Approaches to Reduce Youth Poverty in Cape Town, South Africa

+80%2/'781,9(56,7b7=8%(5/,1

/DQGZLUWVFKDIWOLFK*lUWQHULVFKH)DNXOWlW

6FKULIWHQUHLKHGHV6HPLQDUVIU/lQGOLFKH(QWZLFNOXQJ

$SSURDFKHV

WR5HGXFH<RXWK3RYHUW\

LQ&DSH7RZQ6RXWK$IULFD

6/(7HDP

*DEULHOH=GXQQHNWHDPOHDGHU

&KULVWLDQ&UD\

%ULWWD/DPEHUW]

1DWKDOLH/LFKW (YD5X[

RQEHKDOIRI

)HGHUDO0LQLVWU\IRU

(FRQRPLF&RRSHUDWLRQDQG 'HYHORSPHQW

6/(

6LW]+HVVLVFKH6WU '%HUOLQ

7HO)D[

(PDLOVDELQHGRHUU#DJUDUKXEHUOLQGH KWWSZZZEHUOLQHUVHPLQDUGH

%HUOLQ'HFHPEHU

6/(

6FKULIWHQUHLKHGHV6/(6HPLQDUIU/lQGOLFKH(QWZLFNOXQJ 3XEOLFDWLRQ6HULHVRIWKH&HQWUHIRU$GYDQFHG7UDLQLQJLQ5XUDO 'HYHORSPHQW

+HUDXVJHEHU (GLWRU

6/(6HPLQDUIU/lQGOLFKH(QWZLFNOXQJ

&HQWUHIRU$GYDQFHG7UDLQLQJLQ5XUDO 'HYHORSPHQW

+XPEROGW8QLYHUVLWlW]X%HUOLQ

6LW]+HVVLVFKH6WU8QWHUGHQ/LQGHQ '%HUOLQ*HUPDQ\

(PDLOVDELQHGRHUU#DJUDUKXEHUOLQGH ,QWHUQHWZZZDJUDUKXEHUOLQGHVOH ZZZEHUOLQHUVHPLQDUGH 5HGDNWLRQ

0DQDJLQJ(GLWRU 'U.DULQ)LHJH

6HPLQDUIU/lQGOLFKH(QWZLFNOXQJ 'UXFN

3ULQWHUV 2IIVHW'UXFNHUHL*HUKDUG:HLQHUW*PE+

6DDOEXUJVWUD‰H'%HUOLQ 9HUWULHE

'LVWULEXWRUV 6HPLQDUIU/lQGOLFKH(QWZLFNOXQJ

6LW]+HVVLVFKH6WU8QWHUGHQ/LQGHQ '%HUOLQ*HUPDQ\

6DELQHGRHUU#DJUDUKXEHUOLQGH

$XIODJH

^VWHGLWLRQ

&RS\ULJKWE\ 6/(²6HPLQDUIU/lQGOLFKH(QWZLFNOXQJ

&HQWUHIRU$GYDQFHG7UDLQLQJLQ5XUDO 'HYHORSPHQW

,661,6%1

7LWHOIRWR&RYHUSKRWR <RXQJSHRSOHLQDZRUNVKRS&DSH7RZQ

)^25(:25' ,

)RUHZRUG

7KLVUHSRUWLVWKHUHVXOWRIDILYHPRQWKSURMHFWFDUULHGRXWE\DFRQVXOWDQW WHDPIURPWKH&HQWUHIRU$GYDQFHG7UDLQLQJLQ5XUDO'HYHORSPHQW6/(LQLWV

*HUPDQDEEUHYLDWLRQ+XPEROGW8QLYHUVLW\%HUOLQZKRVWD\HGWKUHHPRQWKV LQWKHDUHDXQGHUVXUYH\7KHVWXG\ZDVFRPPLVVLRQHGE\WKH*HUPDQ)HG HUDO0LQLVWU\IRU(FRQRPLF&RRSHUDWLRQDQG'HYHORSPHQW7KH6/(FRQVXOW DQWWHDPZDVFRPSRVHGRIRQHVRFLDOVFLHQWLVWRQHSROLWLFDOVFLHQWLVWWZR HGXFDWLRQDOVFLHQWLVWVDOOSDUWLFLSDQWVRIWKH^VWDQQXDOWUDLQLQJFRXUVHDQG DVRFLRORJLVWWHDPOHDGHU,WZDVVXSSRUWHGE\DORFDODVVLVWDQW

,QWHUGLVFLSOLQDU\FRQVXOWDQF\SURMHFWVDUHDQLQWHJUDOSDUWRIWKH6/(WUDLQLQJ SURJUDPPHWKHDLPRIZKLFKLVWRSUHSDUH\RXQJSURIHVVLRQDOVIRUDVVLJQ PHQWVLQELODWHUDODQGPXOWLODWHUDOGHYHORSPHQWRUJDQLVDWLRQV,WHQDEOHVSDU WLFLSDQWV WR REWDLQ YDOXDEOH SUDFWLFH LQ WKH XVH RI DFWLRQ DQG GHFLVLRQ RULHQWHG UHVHDUFK PHWKRGV $W WKH VDPH WLPH WKH SURMHFWV FRQWULEXWH WR LGHQWLI\LQJDQGVROYLQJGHYHORSPHQWSUREOHPV

,Q WKH ILYH JURXSV IURP WKH ^VW FRXUVH RI WKH 6/( VLPXOWDQHRXVO\

FRQGXFWHG SURMHFWV LQ DQRWKHU UHJLRQ RI 6RXWK $IULFD &DPHURRQ 0RQJROLD DQGWKH&DXFDVXV

3URI'U8ZH-HQV1DJHO 'U.DULQ)LHJH

'HDQ $FWLQJ'LUHFWRU

)DFXOW\RI$JULFXOWXUDODQG 6/(²&HQWUHIRU$GYDQFHG +RUWLFXOWXUDO6FLHQFHV 7UDLQLQJLQ5XUDO'HYHORSPHQW +XPEROGW8QLYHUVLW\%HUOLQ

$&.12:/('*(0(176 ,,,

$FNQRZOHGJHPHQWV

7KLVVWXG\ZRXOGQRWKDYHEHHQSRVVLEOHZLWKRXWWKHDVVLVWDQFHDQGVXSSRUW RIWKHPDQ\VWDIIPHPEHUVDWWKHRUJDQLVDWLRQVDQGSURMHFWVZHHYDOXDWHGLQ

&DSH7RZQDQG3UHWRULD$OWKRXJKZHFDQQRWWKDQNHYHU\RQHZKRSURYLGHG XV ZLWK LQIRUPDWLRQ E\ QDPH ZH ZRXOG DW OHDVW OLNH WR PHQWLRQ VRPH RI WKHPKHUH

6SHFLDO WKDQNV JRHV WR WKH \RXQJ SHRSOH ZH LQWHUYLHZHG DQG ZKR SDUWLFL SDWHGLQRXUZRUNVKRSV7KHLULQVLJKWVLQWROLIHLQWKHLUFRPPXQLWLHVDQGWKHLU UHDGLQHVV WR VKDUH WKHLU YLHZV RQ YHU\ SHUVRQDO LVVXHV ZHUH LQYDOXDEOH IRU WKHVWXG\

:HZRXOGOLNHWRWKDQN:D\QH*ROGLQJIURP<RXWK8QOLPLWHGIRUKLVFRQWLQX RXV VXSSRUW DQG SDWLHQFH ZLWK XV :H DOVR RZH VSHFLDO WKDQNV WR 0DXUHHQ YDQ:\N+DQQHULH:KLWHDQG/OHZHOO\Q-RUGDDQIURPWKH1HZ:RUOG)RXQGD WLRQIRUWKHLUYDOXDEOHLQSXWV8OULFK%XUJPHUDQG/HRQDUG1JZDW\XIURPWKH 8UEDQ&RQIOLFW0DQDJHPHQW3URMHFWDOVRSURYLGHGXVZLWKFRQWLQXRXVVXSSRUW DQG LQIRUPDWLRQ 0DULRQ .HLP IURP WKH VDPH SURMHFW GLG VR HYHQ DIWHU VKH ZHQWRQPDWHUQLW\OHDYH)XUWKHUPRUHZHZRXOGOLNHWRH[SUHVVRXUJUDWLWXGH WR%HUQKDUG.RKOHU-DVRQ&RUQHOLXV5RVHPDU\0XOOHUDQG3HQQ\7HODQDIURP WKH.ROSLQJ6RFLHW\6RXWK$IULFDZKRQRWRQO\VXSSRUWHGXVLQRXUWDVNEXW DOVRLQWURGXFHGXVWRWKHLU.ROSLQJ)DPLOLHVDQGFRPPXQLWLHV:HZRXOGOLNH WRWKDQN-DVSHU:DOVK0DOHWVDWVL:RWLQL9DQHVVD'DPRP%LOOL'XSUHH]DQG 6\GQH\'XYDOIRUKHOSLQJXVILQGRXUZD\WKURXJKWKHPDQ\SURMHFWVDQGSUR JUDPPHV RI &DWKROLF :HOIDUH DQG 'HYHORSPHQW 2XU JUDWHIXO DSSUHFLDWLRQ JRHVWR'DQ%URZQ*UHJ%HUU\0DULRQ-DFREV)DWKHU3DWULFN1DXJKWRQDQG -RKQ3DVVIRUJLYLQJXVDQLQVLJKWLQWRWKHZRUNRIWKH6DOHVLDQ,QVWLWXWH

0DQ\PRUHSHRSOHVXSSRUWHGXVGXULQJDQGSULRUWRRXUVWD\LQ6RXWK$IULFD ,QWKHSUHSDUDWRU\SKDVHLQ%HUOLQZHSURILWHGIURPWKHDVVLVWDQFHDQGFRP PHQWV RI .DULQ )LHJH DQG *HVD *UXQGPDQQ IURP WKH&HQWUH IRU $GYDQFHG 7UDLQLQJLQ$JULFXOWXUDODQG5XUDO'HYHORSPHQW:HDOVRUHFHLYHGKHOSIXORUL HQWDWLRQ IURP 'LUN 6SUHQJHU DQG &KULVWLDQ %HUJ GXULQJ WKLV SHULRG 9RONHU

*UHXOLFKIURP6R]LDOXQG(QWZLFNOXQJVKLOIHGHV.ROSLQJZHUNVZDVYHU\KHOS IXOLQSUHSDULQJXVIRUWKHHYDOXDWLRQSHULRGLQ&DSH7RZQ0DUHN6SLWF]RN YRQ%ULVLQVNLDQG0DU\0SKR0DVLWDIURP6RXWK$IULFDJDYHXVXVHIXOLQIRU PDWLRQRQWKH+,9$,'6FRQWH[WWKHUH

,9 $&.12:/('*(0(176 /DVWEXWQRWOHDVWPDQ\WKDQNVWR%UXQKLOGH9HVWIURPWKH)HGHUDO0LQLVWU\

RI(FRQRPLF&RRSHUDWLRQDQG'HYHORSPHQWIRUKHUVXSSRUWGXULQJWKHHYDOXD WLRQSHULRGDQGGXULQJKHUVWD\LQ&DSH7RZQ

6^800$5< 9

6XPPDU\

6XPPDU\RIPDMRUILQGLQJV

3URMHFWGHVFULSWLRQ

7KHIROORZLQJRUJDQLVDWLRQVDQGSURMHFWVZHUHHYDOXDWHGWKH:RUN2SSRUWX QLW\ 3URJUDPPH :23 RI WKH.ROSLQJ 6RFLHW\ 6RXWK $IULFD.6$ \RXWK FHQWUHVDQGSURMHFWVRI&DWKROLF:HOIDUHDQG'HYHORSPHQW&:'DQG<RXWK 8QOLPLWHG<8SURMHFWVIRUVWUHHW\RXWKRIWKH6DOHVLDQ,QVWLWXWH6,DQGWKH 8UEDQ &RQIOLFW 0DQDJHPHQW 3URMHFW 8&03 FRPELQLQJ WUDLQLQJ IRU \RXQJ SHRSOH ZLWK YROXQWDU\ SHDFH VHUYLFHV 2QH FRPPXQLW\FHQWUHVXSSRUWHGE\

(YDQJHOLVFKHU(QWZLFNOXQJVGLHQVW(('WKH1HZ:RUOG)RXQGDWLRQ1:) ZDV LQFOXGHG DV D UHIHUHQFH SURMHFW (DFK RI WKH HYDOXDWHG SURMHFWV LPSOH PHQWHG D EURDG DUUD\ RI PHDVXUHV WR UHGXFH SRYHUW\ 7KH VWXG\ WKHUHIRUH IRFXVVHG RQ WKHPDWLF FRPSRQHQWV WKDW ILJXUH LQ DOO SURMHFWV OLIHVNLOOV DQG YRFDWLRQDOWHFKQLFDO WUDLQLQJ +,9$,'6PDLQVWUHDPLQJ FRQIOLFW SUHYHQWLRQ DQGPDQDJHPHQW

*HQHUDOFRQGLWLRQV

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·VSRSXODWLRQDUHLQIHFWHGZLWK+,9$,'6IRULQVWDQFH PDQ\SHRSOHFRXOGQRWH[HUFLVHWKHLUULJKWRIDFFHVVWRKHDOWKFDUHDVWKH JRYHUQPHQWUHIXVHGXQWLOUHFHQWO\WRUHFRJQLVHWKHGUDPDWLFVFDOHRIWKHLOO QHVV

$WWKHEHJLQQLQJRIWKHSRVWDSDUWKHLGHUDRSWLPLVWLFH[SHFWDWLRQVSUHYDLOHG DVWRWKHSRVVLELOLWLHVRIDGGUHVVLQJWKHSUREOHPVRISRYHUW\DQGGLVWULEXWLRQ 7KH5HFRQVWUXFWLRQ DQG 'HYHORSPHQW 3URJUDPPH RI GRFXPHQWV WKH H[SHFWDWLRQVIRUIDVWVRFLRHFRQRPLFWUDQVIRUPDWLRQ7KHSULRULWLHVOLVWHGDUH

9, 6^800$5<

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

7KHUHLVDEURDGFRQVHQVXVLQ6RXWK$IULFDQVRFLHW\WKDWFULPHLVDVHYHUH REVWDFOH WR SROLWLFDO DQG HFRQRPLF GHYHORSPHQW 7KH JRYHUQPHQW KDV DF NQRZOHGJHG WKH UHOHYDQFH RI UHGXFLQJ YLROHQFH DQG FULPH WKURXJK WKH LP SOHPHQWDWLRQRISURJUDPPHVVXFKDVWKH1DWLRQDO&ULPH3UHYHQWLRQ6WUDWHJ\

ZKLFKDLPVDWFRRUGLQDWLQJWKHDFWLYLWLHVRIYDULRXVGHSDUWPHQWVLQYROYHGLQ FULPH FRQWURO DQG SUHYHQWLRQ RU WKH'RPHVWLF 9LROHQFH $FW +RZHYHU WKH HQIRUFHPHQWRIOHJLVODWLRQDQGLPSOHPHQWDWLRQRIQHZVWUDWHJLHVDSSHDUVGLI ILFXOW,QVHFXULW\UHPDLQVDVSHFLILFFKDUDFWHULVWLFRISRYHUW\LQ6RXWK$IULFD

$ YLROHQW HQYLURQPHQW SRVHV D ULVN IRU WKH VXFFHVV RI DOO HYDOXDWHG \RXWK SURMHFWVDQGSURJUDPPHV

:KLOHWKHHGXFDWLRQDOV\VWHPLQWKHDSDUWKHLGHUDZDVXVHGDVDQLQVWUXPHQW RI GLVFULPLQDWLRQ LW LV QRZ FRQVLGHUHGDNH\IDFWRUIRUUHGXFLQJVRFLDOLQH TXDOLW\ DQG SRYHUW\ +RZHYHU DOWKRXJK WKH 6RXWK $IULFDQ JRYHUQPHQW VSHQGVDFRQVLGHUDEOHSRUWLRQRIWKHQDWLRQDOEXGJHWRQHGXFDWLRQWKHZLGH JDSVLQDFFHVVWRDQGTXDOLW\RIHGXFDWLRQDORQJUDFLDOO\GHILQHGDQGUHJLRQDO OLQHVFRXOGQRWEHEULGJHG6LQFHWKH6RXWK$IULFDQJRYHUQPHQWKDV EHHQLQWKHSURFHVVRIUHIRUPLQJWKHV\VWHPRIVNLOOVDQGYRFDWLRQDOWUDLQLQJ (VVHQWLDOWRWKHVHUHIRUPVDUHWKH6NLOOV'HYHORSPHQW/HYLHVDQGWKH1DWLRQDO 4XDOLILFDWLRQ )UDPHZRUN 14) D V\VWHP RI HGXFDWLRQ DQG WUDLQLQJ ZLWK TXDOLILFDWLRQV RQ HLJKW OHYHOV IRU ZKLFK QDWLRQDO VWDQGDUGV KDYH EHHQ GH ILQHG$VWKHYDULRXVOHYHOVDUHVSOLWLQWRPRGXOHVWKHV\VWHPHQDEOHV¶OLIH ORQJ·OHDUQLQJ7KH6NLOOV'HYHORSPHQW/HYLHVDUHXVHGDVDVRXUFHRIILQDQFH WRSURPRWHUHIRUPVLQWKHVNLOOVDQGYRFDWLRQDOWUDLQLQJV\VWHP

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

&RQVLGHULQJWKHKLJKUDWHRI\RXWKSRYHUW\DQGXQHPSOR\PHQWDQGWKHVL]H DQGVFRSHRIWKHRUJDQLVDWLRQVDQGSURMHFWVHYDOXDWHGLWLVFOHDUWKDWWKH\

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

4XDOLW\RIWKHDLPVDQGSODQQLQJRIWKHSURMHFWV

7KHSODQQLQJRIWKHSURMHFWVDQGSURJUDPPHVFRYHUHGLQWKLVUHSRUWFDQEH JHQHUDOO\FKDUDFWHULVHGDVSURFHVVDQGDFWLRQRULHQWHG,QTXDOLWDWLYHDVVHVV PHQWV WKH RUJDQLVDWLRQV DQG SURMHFWV DQDO\VH QHHGV LQ FORVH FRQWDFW WR FRPPXQLW\PHPEHUVRULQWKHFDVHRIWKH6DOHVLDQ,QVWLWXWHWRVWUHHWFKLO GUHQDQG\RXWK2QO\<81:)DQG8&03DSSOLHGWKHORJLFDOIUDPHZRUNWR GRFXPHQW WKH SODQQLQJ SURFHVV 5HFHQWO\ VWUXFWXUHG SDUWLFLSDWLYH QHHGV DV VHVVPHQWVZHUHFDUULHGRXWLQSDUWLFXODUE\1:)

$OORUJDQLVDWLRQVKDYHVLPLODURYHUDOODLPVHPSRZHUPHQWRILQGLYLGXDOVDQG FRPPXQLWLHVSRYHUW\UHGXFWLRQGHFUHDVHRIXQHPSOR\PHQWVRFLDOVWDELOLW\

DQGWKHLPSURYHPHQWRIWKHOLYHOLKRRGRIWKHSRSXODWLRQLQORZLQFRPHXUEDQ DUHDV.6$&:'6,DQG1:)DGRSWHGDKROLVWLFDSSURDFKZLWKDFWLYLWLHVRQ VHYHUDOOHYHOVZLWKRXWFOHDUO\IRUPXODWLQJSULRULWLHV

9,,, 6^800$5<

0DLQ SURMHFW DLPV RI WKH WUDLQLQJ SURJUDPPHV DUH WR SURYLGH YRFD WLRQDOWHFKQLFDODQGOLIHVNLOOVWUDLQLQJWRVXSSRUWSDUWLFLSDQWVLQILQGLQJJDLQ IXOHPSOR\PHQWDQGWRUDLVHWKHLUVHOIHVWHHPDQGLPSURYHWKHLUVRFLDOVNLOOV

$ IXUWKHU DLP RI WKH6DOHVLDQ ,QVWLWXWH LV WKH UHLQWHJUDWLRQ RI VWUHHW \RXWK LQWR WKHLU IDPLOLHV DQG FRPPXQLWLHV 7KH WDUJHW JURXSV RI DOO RUJDQLVDWLRQV XQGHU UHYLHZ DUH \RXQJ SHRSOH IURP PDUJLQDOLVHG DUHDV RI WKH &DSH 7RZQ UHJLRQRUPRUHJHQHUDOO\IURPDSRRUEDFNJURXQG0RVWHIIRUWVDUHSULPDULO\

JHDUHGWRLPSURYLQJWKHVLWXDWLRQRIWKHLQGLYLGXDO1:)DQG8&03LQSDU WLFXODU LQFOXGH FRQIOLFW WUDQVIRUPDWLRQ DSSURDFKHV WKDW WDUJHW FRPPXQLWLHV LQRUGHUWRHQODUJHVHFXULW\LQWKHIRUPHUWRZQVKLSV

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

4XDOLW\RISURMHFWLPSOHPHQWDWLRQDQGVWHHULQJ

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

7KH\RXWKDQGFRPPXQLW\FHQWUHVRI&:'1:)DQGWKH6DOHVLDQ,QVWLWXWH RIIHUYDULRXVSURJUDPPHVFRQVLGHUHGDSSURSULDWHWRPHHWWKHQHHGVDQGLQ

6^800$5< ,;

WHUHVWVRI\RXQJSHRSOHVXFKDVVSRUWVDQGFXOWXUDODQGUHFUHDWLRQDODFWLYL WLHV7KH6DOHVLDQ,QVWLWXWHSURYLGHVRXWGRRUDFWLYLWLHVLQFDPSVRXWVLGH&DSH 7RZQZLOGHUQHVVWKHUDS\$OORUJDQLVDWLRQVDQGSURMHFWVLQWHJUDWH+,9$,'6 SUHYHQWLRQLQWKHLU\RXWKSURJUDPPHV7RHQODUJHWKHLUFDSDFLWLHVDQGHQVXUH KLJKVWDQGDUGVWKH\PRVWO\ZRUNLQFRRSHUDWLRQZLWKVSHFLDOLVHG1*2VDQG JRYHUQPHQWDJHQFLHV

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

$OOVWDIIPHPEHUVLQWHUYLHZHGFRQVLGHUWKHLUVWXGHQWFRXUVHHYDOXDWLRQVDVD UHOHYDQW LPSDFW PHDVXUHPHQW RI SHUVRQDO JDLQV 7KH UHVXOWV RI WKH WUDFHU VWXGLHVDQGWKHDVVHVVPHQWVRIVWXGHQWVSURYLGHRUJDQLVDWLRQVDQGSURMHFWV ZLWKDEDVLVIRUIXUWKHUSURMHFWSODQQLQJLPSOHPHQWDWLRQDQGVWHHULQJ

; 6^800$5<

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

'HYHORSPHQWSROLF\HIIHFWLYHQHVVDQGVLJQLILFDQFHRIWKHSURMHFWV

7KH RUJDQLVDWLRQV DQG SURMHFWV XQGHU UHYLHZ KDYH D VWURQJ RULHQWDWLRQ DQG KROLVWLFDSSURDFKWRZDUGVWKHUHGXFWLRQRI\RXWKSRYHUW\7KHLUJHQHUDOSROL FLHV DQG VWUDWHJLHV FRPSO\ ZLWK WKH LQWHUQDWLRQDOO\ DJUHHG DLPV DV GRFX PHQWHG LQ WKH0LOOHQQLXP 'HYHORSPHQW *RDOV DQG$JHQGD VXFK DV HP SOR\PHQW FUHDWLRQ +,9$,'6 SUHYHQWLRQ SDUWLFLSDWLRQ LQ GHFLVLRQPDNLQJ SURFHVVHVDQGSHDFHIXOFRQIOLFWUHVROXWLRQ7KLVDOVRFRQIRUPVZLWKWKH%0=

$FWLRQ3URJUDPPH7KHFRPPXQLW\DQG\RXWKFHQWUHVDQGWKHWUDLQLQJ RIIHUV VXSSOLHG E\ WKH RUJDQLVDWLRQV DQG SURMHFWV UHDFK D ODUJH QXPEHU RI

\RXQJSHRSOHZLWKVHOIKHOSDQGHPSRZHUPHQWDSSURDFKHV

$FFRUGLQJWRSURMHFWDQGSURJUDPPHVWDWLVWLFVPRVWWUDLQLQJSURJUDPPHSDU WLFLSDQWVKDYHIRXQGHPSOR\PHQWEHWZHHQDQGSHUFHQW+RZIDUD UHGXFWLRQ RI \RXWK SRYHUW\ KDV EHHQ DFKLHYHG LV KRZHYHU GLIILFXOW WR DV VHVVDVLWKDVQRWEHHQUHFRUGHGZKHWKHUHPSOR\PHQWLVSHUPDQHQWRUWHP SRUDU\,QDGGLWLRQQRGHWDLOVDUHDYDLODEOHRQZKHWKHUIRUPHUFRXUVHSDUWLFL SDQWVHDUQVXIILFLHQWLQFRPHRUKDYHPHUHO\EHFRPHDSDUWRIWKHVRFDOOHG ZRUNLQJ SRRU ,Q WKH 6RXWK $IULFDQ FRQWH[W RI HQRUPRXV \RXWK XQHPSOR\

PHQWUDWHVWKHSURYLVLRQRIWUDLQLQJWRLQFUHDVHRSSRUWXQLWLHVRQWKHODERXU PDUNHWLVDUHOHYDQWVWUDWHJLFDSSURDFK+RZHYHUJLYHQWKHFDSDFLWLHVRIWKH SURJUDPPHVDQGSURMHFWVWKH\FDQRQO\SURYLGHDVPDOOFRQWULEXWLRQWRVROY LQJWKHRYHUDOOVWUXFWXUDOSUREOHPVRISRYHUW\DQGXQHPSOR\PHQW

6^800$5< ;, /LIHVNLOOV FRXUVHV VHHP WR EH D SDUWLFXODUO\ VXLWDEOH LQVWUXPHQW WR LQFUHDVH

\RXQJSHRSOH·VFKDQFHVIRUWKHLQWHJUDWLRQLQWRWKHIRUPDORULQIRUPDOODERXU PDUNHW DV ZHOO DV WKHLU SDUWLFLSDWLRQ LQ GHFLVLRQPDNLQJ SURFHVVHV ,Q JHQ HUDOSURYLGLQJVSDFHIRU\RXQJSHRSOHLQWKHIRUPRI\RXWKDQGFRPPXQLW\

FHQWUHVLVSHUFHLYHGDVDQLPSRUWDQWLQWHJUDWLRQVWUDWHJ\7KHRUJDQLVDWLRQRI RXWGRRUFDPSVDQGFXOWXUDODQGVSRUWVHYHQWVLVRIWHQWKHILUVWVWHSWRZDUGV WKHLQFOXVLRQRIVWUHHWFKLOGUHQDQG\RXWKDWULVN

&DSDFLW\EXLOGLQJ IRU FRQIOLFW DQG FULPH SUHYHQWLRQ DLPV DW VROYLQJ FUXFLDO SUREOHPV LQ WKH FXUUHQW 6RXWK $IULFDQ VLWXDWLRQ ,Q WKLV UHVSHFW WKH 8&03 DSSURDFKRIFRPELQLQJWUDLQLQJIRU\RXQJSHRSOHZLWKDYROXQWDU\SHDFHVHU YLFHFDQEHFRQVLGHUHGLQQRYDWLYH7KHLPSDFWRI8&03RQORZHULQJWKHOHY HOV RI FULPH DQG YLROHQFH LV KRZHYHU GLIILFXOW WR HVWLPDWH &RPPXQLW\

PHPEHUV DQG SROLFH RIILFLDOV DSSUHFLDWH WKH SUHVHQFH RI &3:V EXW SRLQWHG RXWWKHFRPSOH[LW\RIWKHSUREOHPVLQIRUPHUWRZQVKLSVWKDWJLYHULVHWRVSH FLILFIRUPVRIYLROHQFHDQGFULPHRQZKLFKWKHSHDFHZRUNHUVKDYHOLWWOHRU QRLQIOXHQFH7KHGHYHORSPHQWRI8&03LQWRDWZRFRPSRQHQWSURJUDPPH PD\KDYHDORQJWHUPFRQFHSWXDOSUREOHP,QWKHFRQWH[WRIH[WHQGLQJWKH SURMHFWWRRWKHUORFDWLRQVWKHGDQJHURIRYHUEXUGHQLQJSHDFHZRUNHUVZLWK WKH UHODWLYHO\ ORQJ WLPH RI YROXQWDU\ VHUYLFH DQG WKH FRQIURQWDWLRQ ZLWK YLROHQWVLWXDWLRQVVKRXOGEHDVVHVVHG

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

;,, 6^800$5<

6XPPDU\RIPDMRUUHFRPPHQGDWLRQV

3URMHFWUHODWHGUHFRPPHQGDWLRQV

,I QRW RWKHUZLVH LQGLFDWHG UHFRPPHQGDWLRQV DSSO\ WR DOO RUJDQLVDWLRQV DQG SURMHFWVLQ6RXWK$IULFD

1HWZRUNLQJFRRUGLQDWLRQDQGVKDULQJRIUHVRXUFHV

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

7R FUHDWH IXUWKHU V\QHUJ\ HIIHFWV FRRSHUDWLRQ DQG FRRUGLQDWLRQ ZLWK JRY HUQPHQW DJHQFLHV LQYROYHG LQ HGXFDWLRQDO DQG \RXWK SROLFLHV ZLWK SULYDWH EXVLQHVVHVLQDSRVLWLRQWRSURYLGHIXQGLQJDQGHPSOR\PHQWDVZHOODVZLWK 1*2VWKDWSURYLGHFRXQVHOOLQJDQGPHQWRULQJVHUYLFHVVKRXOGEHH[WHQGHG

$VDOORUJDQLVDWLRQVRIIHUOLIHVNLOOVFRXUVHVLQGLIIHUHQWSURJUDPPHVDQH[

FKDQJH RI FRQFHSWV DQG H[SHULHQFH LV KLJKO\ UHFRPPHQGHG 7KH LGHD LV WR JDLQ IURP WKH H[SHULHQFH DQG PHWKRGRORJLFDO IUDPHZRUNV RI RWKHUV DQG WR LPSURYHDQGDGDSWWKHWUDLQLQJPRGXOHVFRQWLQXRXVO\6WDQGDUGLVDWLRQLVUH JDUGHGDVXVHIXOLQDFKLHYLQJRIILFLDOUHFRJQLWLRQE\JRYHUQPHQWLQVWLWXWLRQV

$VDOOSURMHFWVDUHFXUUHQWO\LQWKHSURFHVVRILQWHQVLI\LQJWKHLUFRRSHUDWLRQ ZLWKWKH'HSDUWPHQWRI/DERXUDQGWKH6HFWRUDO(GXFDWLRQDQG7UDLQLQJ$X WKRULWLHV WR JDLQ RIILFLDO UHFRJQLWLRQ IRU WUDLQLQJ RIIHUV VXFK DV OLIHVNLOOV FRXUVHV ZLWKLQ WKH1DWLRQDO 4XDOLILFDWLRQ )UDPHZRUN DV ZHOO DV DFFHVV WR IXQGVIURPWKHVNLOOVOHY\LWLVUHFRPPHQGHGWKDWDGLVFXVVLRQURXQGVKRXOG EHRUJDQLVHGWRVKDUHLGHDVRQKRZWRRYHUFRPHEXUHDXFUDWLFKXUGOHV

6^800$5< ;,,, 3ODQQLQJDQGLPSOHPHQWDWLRQ

:KHUH HQWLUH FRPPXQLWLHV RU ODUJHU QXPEHUV RI \RXQJ SHRSOH DUH WDUJHWHG IRUH[DPSOHZLWKWKHHVWDEOLVKPHQWRI\RXWKFHQWUHVLWLVUHFRPPHQGHGWKDW PRUH IRUPDOLVHG QHHG DQDO\VHV VKRXOG EH FDUULHG RXW EHIRUH LPSOHPHQWLQJ QHZSURMHFWVDQGSURJUDPPHV8&03VKRXOGLQWHJUDWHD3HDFHDQG&RQIOLFW ,PSDFW$VVHVVPHQWLQWRWKHSODQQLQJRIH[WHQVLRQWRRWKHUSURMHFWORFDWLRQV 7KLVVHHPVHVSHFLDOO\VLJQLILFDQWDVDEDVLVWRPHDVXUHIXWXUHLPSDFW,WLV UHFRPPHQGHGWKDWDQH[WHUQDOIDFLOLWDWRUVKRXOGGHYHORSDFRQFHSWDGDSWHG WRWKHUHTXLUHPHQWVRI8&03

$V TXLWH D QXPEHU RI SURJUDPPHV RQ +,9$,'6 SUHYHQWLRQ DOUHDG\ H[LVW 8&03VKRXOGOHDYHWKLVWRSLFWRVSHFLDOLVHG1*2VDQGLQVWLWXWLRQV,QVWHDG LWVKRXOGGHYHORSD¶FRQIOLFWJURXQGEUHDNHU·SURILOHIRUSHDFHZRUNHUV

7DUJHWJURXSV

$SDUW IURP WKH6DOHVLDQ ,QVWLWXWHDOOSURMHFWVDQGSURJUDPPHVKDYHDKLJK SHUFHQWDJHRIJLUOVDQG\RXQJZRPHQDPRQJWKHSDUWLFLSDQWV6SHFLDOQHHGV DQGLQWHUHVWVWKDWFRXOGEHWDUJHWHGLQWUDLQLQJRULQJLUOVWRJLUOVSHHUHGXFD WLRQVKRXOGEHFRQVLGHUHG$GGLWLRQDOO\FRXQVHOOLQJRQGRPHVWLFYLROHQFHDQG VH[XDO DEXVH DV ZHOO DV OHDGHUVKLS WUDLQLQJ VKRXOG DOVR EH WDNHQ LQWR DF FRXQW$V\VWHPDWLFJHQGHUPDLQVWUHDPLQJDSSURDFKVKRXOGEHDSSOLHGLQDOO SURMHFWVDQGSURJUDPPHV

$V6RXWK$IULFDQVRFLHW\LVKLJKO\IUDJPHQWHGDOOSURMHFWVVKRXOGFRQWLQXHWR HQFRXUDJH WKH SDUWLFLSDWLRQ RI \RXWK IURP YDULRXV EDFNJURXQGV DQG HVSH FLDOO\IURPGLVDGYDQWDJHGJURXSVVXFKDV\RXWKIURPLQIRUPDOVHWWOHPHQWV UHIXJHHVDQGVWUHHW\RXWK)XUWKHUPRUH¶RXWGRRUSURJUDPPHV·DQGWUDQVSRUW IDFLOLWLHV VKRXOG EH SURYLGHG DV D PHDQV RI OHWWLQJ WKHP ¶VHH WKH RXWVLGH ZRUOG·

,PSURYLQJH[LVWLQJLPSDFWPRQLWRULQJDQGDVVHVVPHQW

7RHQKDQFHH[LVWLQJLPSDFWPRQLWRULQJDQGDVVHVVPHQWLWLVUHFRPPHQGHG WKDWSURJUDPPHDQGSURMHFWJRDOVIRUPXODWHGLQYHU\JHQHUDOWHUPVVKRXOGEH UHIRFXVHG

(DFKRIWKHHYDOXDWHGRUJDQLVDWLRQVDQGSURMHFWVKDVEHJXQWRGHYHORSV\V WHPV IRU LPSDFW PRQLWRULQJ DQG DVVHVVPHQW 6LPLODULWLHV DQG GLIIHUHQFHV RI

;,9 6^800$5<

WKHYDULRXVV\VWHPVVKRXOGEHIXUWKHUGLVFXVVHGWRHQDEOHWKHLPSOHPHQWD WLRQRIJHQHUDOLPSURYHPHQWVDQGWKHGHYHORSPHQWRIFRPPRQVWDQGDUGV 7RDVVHVVWKHDFKLHYHPHQWRIHPSOR\PHQWUHODWHGWUDLQLQJSURJUDPPHVIRO ORZXSVWDWLVWLFVVKRXOGLQFOXGHLQIRUPDWLRQRQWKHNLQGRIZRUNIRXQGGXUD WLRQRIFRQWUDFWVDVZHOODVDQHVWLPDWHRIWKHLQFRPHOHYHO

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

&RQFOXVLRQVIRUGHYHORSPHQWSROLF\

3RYHUW\LQ6RXWK$IULFDLVDPXOWLGLPHQVLRQDOSUREOHP,QRUGHUWRFRQWULEXWH WRWKHUHGXFWLRQRI\RXWKSRYHUW\*HUPDQGHYHORSPHQWFRRSHUDWLRQVKRXOG VXSSRUWDSSURDFKHVRQGLIIHUHQWOHYHOVDQGFRRSHUDWHZLWKJRYHUQPHQWDJHQ FLHVDQG1*2V)ROORZLQJUHFRPPHQGDWLRQVDUHHLWKHUGLUHFWHGWRSDUWLFXODU DFWRUVRUFRQVWLWXWHPRUHJHQHUDOFRQFOXVLRQVIRUFRQFHSWXDOGHYHORSPHQWLQ UHGXFLQJ\RXWKSRYHUW\

%HWWHU OLQNDJH ZLWK QDWLRQDO SRYHUW\ UHGXFWLRQ VWUDWHJLHV DQG LQWHUQDWLRQDO JRDOV

:LWK5'3WKH6RXWK$IULFDQJRYHUQPHQWFRPPLWWHGLWVHOIWRVWUDWHJLHVIRU SRYHUW\UHGXFWLRQRQGLIIHUHQWOHYHOVWKDWDUHLQFRPSOLDQFHZLWKLQWHUQDWLRQDO JRDOVVXFKDVWKH0LOOHQQLXP'HYHORSPHQW*RDOV)LVFDOUHVWUDLQWVDVDUHVXOW RI*($5KRZHYHUKDYHFDXVHGVHWEDFNVLQLPSOHPHQWDWLRQ,QRUGHUWRFRQ WULEXWHWRDFRKHUHQWSRYHUW\UHGXFWLRQSROLF\LQWKHFXUUHQWWUDQVIRUPDWLRQ SKDVH%0=DQG*7=VKRXOGVXSSRUWREMHFWLYHVDQGVWUDWHJLHVRIWKH6RXWK

$IULFDQJRYHUQPHQWDVWKH\DUHH[SUHVVHGLQ5'37RPRQLWRUSUHVHQWJRY HUQPHQW SROLFLHV LQLWLDWLYHV VXFK DV WKH ¶3HRSOH·V %XGJHW· IURP &26$78 6$&& DQG 6$1*2&2 VKRXOG EH VXSSRUWHG SDUWLFXODUO\ E\ 1*2V VXFK DV 6(.&DULWDV,QWHUQDWLRQDODQG((')RUOREE\SROLFLHVDQGWKHGLVFXVVLRQRID

6^800$5< ;9

¶SRYHUW\VHQVLWLYH· EXGJHW UHJXODU UHVHDUFK DQG SXEOLF KHDULQJV VKRXOG EH RUJDQLVHGWRSURYLGHLQVLJKWVLQWRWKHDOORFDWLRQRISXEOLFH[SHQGLWXUHDQGLWV SRWHQWLDO LPSDFW RQ SRYHUW\ DQG LQHTXDOLW\ ,Q WKH GLVFXVVLRQ RI D SRYHUW\

VHQVLWLYHEXGJHWVSHFLDODWWHQWLRQVKRXOGEHJLYHQWRGLIIHUHQFHVLQWKHH[

SHULHQFHRISRYHUW\EHWZHHQDQGZLWKLQVRFLDOJURXSV'DWDVKRXOGEHGLVDJ JUHJDWHGLQWRFDWHJRULHVVXFKDVDJHJHQGHUDQGHWKQLFJURXS

&RQFHSWXDOGHYHORSPHQWLQUHGXFLQJ\RXWKSRYHUW\

)ROORZLQJUHFRPPHQGDWLRQVDUHDGGUHVVHGWR*HUPDQGHYHORSPHQWFRRSHUD WLRQLQJHQHUDO%0=*7=DQG1*2VDQGVKRXOGEHFRQVLGHUHGLQDOOSUR MHFWVDQGSURJUDPPHV

([HFXWLQJDQGLPSOHPHQWLQJRUJDQLVDWLRQVZRUNLQJRQWKHUHGXFWLRQRI\RXWK SRYHUW\VKRXOGIROORZKROLVWLFDSSURDFKHVWKDWDOVRWDUJHWIDPLOLHVDQGFRP PXQLWLHV2UJDQLVDWLRQVQHHGWREHIOH[LEOHWREHDEOHWRDGDSWWRFKDQJLQJ FRQGLWLRQV 7KH FUHDWLRQ RI YROXQWDU\ VWUXFWXUHV WR VXSSRUW SURMHFW VWDII LV DOVRUHFRPPHQGDEOH&RPPXQLW\FHQWUHVZRUNLQJZLWK\RXWKVKRXOGEHOR FDWHGFORVHWRWKHWDUJHWJURXS

$VPRVW6RXWK$IULFDQIRUPHUWRZQVKLSV²VLPLODUWRORZLQFRPHTXDUWHUVLQ FLWLHV LQ RWKHU $IULFDQ FRXQWULHV /DWLQ $PHULFD DQG $VLD ² VKRZ D ODFN RI DUHDV IRU OHLVXUH DFWLYLWLHV DQG FRPPXQLFDWLRQ WKH SURPRWLRQ RI VSHFLILF

\RXWKIULHQGO\ VSDFHV LV UHFRPPHQGHG 7KHUH LV D QHHG IRU SDUNV VSRUWV ILHOGVSOD\JURXQGVSODFHVDQGHTXLSPHQWIRUGUDPDDQGPXVLFDQGKROLGD\

SURJUDPPHV7KHFUHDWLRQRI\RXWKIULHQGO\VSDFHVFDQEHFRPHDQHIIHFWLYH LQVWUXPHQWLQSURPRWLQJ\RXQJSHRSOH·VWDOHQWDQGFUHDWLYHSRWHQWLDO6SRUWV DQGFXOWXUDODFWLYLWLHVDUHLPSRUWDQW¶SXOOIDFWRUV·LQPRWLYDWLQJ\RXQJSHRSOH WRMRLQRWKHUSURJUDPPHV8UEDQSODQQLQJWKDWLQWHJUDWHVWKHQHHGVRI\RXWK FDQFRQWULEXWHWRLQFOXVLRQDQGHPSRZHUPHQW

$V JLUOV DQG \RXQJ ZRPHQ DUH GLVFULPLQDWHG LQ PDQ\ VRFLHWLHV V\VWHPDWLF JHQGHUPDLQVWUHDPLQJVKRXOGEHSDUWDOOSURMHFWVLQWKH\RXWKVHFWRUDVZHOO DVRISURJUDPPHSODQQLQJLPSOHPHQWDWLRQPRQLWRULQJDQGHYDOXDWLRQ

;9, 6^800$5<

&RQFOXVLRQVDQGUHFRPPHQGDWLRQVRQSURFHGXUHVDQGLQVWUXPHQWV

/LIHVNLOOVFRXUVHVFRPELQLQJWUDLQLQJLQFRPPXQLFDWLRQDQGFRQIOLFWSUHYHQ WLRQDQGWUDQVIRUPDWLRQDUHDGHTXDWHLQVWUXPHQWVWRVWUHQJWKHQ\RXQJSHR SOH·VFDSDFLWLHV6(.&DULWDV,QWHUQDWLRQDO(('DQG*7=VKRXOGFRQWLQXHWR VXSSRUW WKHLU ORFDO SDUWQHUV LQ WKH GHYHORSPHQW DQG DGDSWDWLRQ RI PHWKRGV DQGFRQWHQWRIWUDLQLQJSURJUDPPHV$VOLIHVNLOOVHGXFDWLRQLVFRQVLGHUHGDQ LPSRUWDQWHOHPHQWIRUWKHDGYDQFHPHQWRI\RXQJSHRSOHLWLVVXJJHVWHGWKDW FRXUVHV VKRXOG EH H[WHQGHG WR LQFOXGH VFKRROV LQ RUGHU WR UHDFK D JUHDWHU QXPEHU RI FKLOGUHQ DQG \RXWK %0= DQG *7= VKRXOG FRQWLQXH WR VXSSRUW JRYHUQPHQWDJHQFLHVDQGVFKRROVWRGHYHORSDSSURSULDWHFXUULFXOD

'RQRUDJHQFLHVWKDWFRQVLGHULPSDFWPRQLWRULQJDQGDVVHVVPHQWVLJQLILFDQW VKRXOGEHDZDUHRIVXSSRUWQHHGV,QYHVWPHQWVLQWKHWUDLQLQJRIVWDIIDQG WKHLQWURGXFWLRQRIDSSURSULDWHLPSDFWPRQLWRULQJV\VWHPVDUHSHUFHLYHGDV LQYHVWPHQWVLQORQJWHUPFRVWHIIHFWLYHQHVV6(.&DULWDV,QWHUQDWLRQDO((' DQG*7=VKRXOGUHVHUYHDFHUWDLQDPRXQWRIIXQGVWRHQDEOHDQDGHTXDWHLP SDFWPRQLWRULQJWKURXJKRXWWKHSURMHFWRUSURJUDPPHSKDVH

7KH LQWURGXFWLRQ RI JHQHUDO PLQLPXP VWDQGDUGV IRU LPSDFW PRQLWRULQJ DQG HYDOXDWLRQLVQHFHVVDU\WRLQFUHDVHWKHH[FKDQJHRIH[SHULHQFHVDPRQJRU JDQLVDWLRQVDQGLQVWLWXWLRQVZRUNLQJLQWKH\RXWKVHFWRUDVZHOODVWRIDFLOL WDWHQDWLRQDOUHJLRQDODQGLQWHUQDWLRQDOFRPSDULVRQV$GGLWLRQDOO\QHHGVDV VHVVPHQWVVKRXOGEHSDUWRISODQQLQJSURFHGXUHV6(.&DULWDV,QWHUQDWLRQDO (('DQG*7=VKRXOGDVVLVWWKHLUORFDOSDUWQHUVWRGHYHORSDQGDSSO\LQVWUX PHQWVIRULPSDFWPRQLWRULQJDQGSDUWLFLSDWRU\QHHGVDVVHVVPHQWV

$Q LPSDFW PRQLWRULQJ V\VWHP VKRXOG LQFOXGH QHJDWLYH DQG XQLQWHQGHG LP SDFWVDVZHOOWDNLQJLQWRDFFRXQWWKHRYHUDOOFRQWH[W,WVKRXOGDOVREHFRQ VLGHUHGWKDWDVLPSDFWVDUHHIIHFWLYHDIWHUDFHUWDLQWLPHODJWKHLUPHDVXULQJ VKRXOGEHSODQQHGDWDSSURSULDWHLQWHUYDOV7KHGHYHORSPHQWRILQGLFDWRUVLV RIVSHFLILFUHOHYDQFHWRWKHLPSURYHPHQWRILPSDFWPRQLWRULQJ7RIRUPXODWH LQGLFDWRUVWKDWDUHRSHUDWLRQDOO\IHDVLEOH6(.&DULWDV,QWHUQDWLRQDO(('DQG

*7=VKRXOGVXSSRUWWKHLUORFDOSDUWQHUVZLWKZRUNVKRSVRUDQGH[WHUQDOID FLOLWDWRUV

6^800$5< ;9,,

0DLQFRQFOXVLRQVDQGOHVVRQVOHDUQW

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

)RUDVLJQLILFDQWDQGVXVWDLQDEOHUHGXFWLRQRI\RXWKSRYHUW\FRRSHUDWLRQEH WZHHQ JRYHUQPHQW DJHQFLHV 1*2V FLYLO VRFLHW\ VWUXFWXUHV DQG FRPPXQL WLHV LV UHTXLUHG 7KXVWKHGLDORJXHEHWZHHQUHVHDUFKHUV1*2VFRPPXQLW\

UHSUHVHQWDWLYHVGHYHORSPHQWLQLWLDWLYHVDQGSROLF\PDNHUVVKRXOGEHLQWHQVL ILHG DQG FRRUGLQDWHG *HUPDQ GHYHORSPHQW FRRSHUDWLRQ %0= *7= DQG 1*2VVKRXOGVXSSRUWH[LVWLQJQHWZRUNV

6HOIHPSOR\PHQWRIWHQDSSHDUVDVDQDOWHUQDWLYHLQDVLWXDWLRQRIVWDJQDWLQJ RUGHFUHDVLQJHPSOR\PHQWRSSRUWXQLWLHVLQWKHIRUPDOVHFWRU+RZHYHUSUR YLGLQJ DGYLVRU\ VHUYLFHV RU RUJDQLVLQJ FUHGLW SURJUDPPHV IRU \RXQJ SHRSOH VKRXOGEHEDVHGRQUHDOLVWLFDVVHVVPHQWVRIWKHDEVRUSWLYHFDSDFLWLHVRIWKH 600(VHFWRU%0=DQG*7=VKRXOGFDUU\RXWDVWXG\DVVHVVLQJWKHSRWHQWLDO RIWKHPLFURVFDOHHQWHUSULVHVHFWRUWKDWFDQEHRISDUWLFXODULPSRUWDQFHIRU

\RXQJSHRSOH

7KH IROORZLQJ FRQFOXVLRQV DQG UHFRPPHQGDWLRQV DUH DGGUHVVHG WR *HUPDQ GHYHORSPHQWFRRSHUDWLRQLQJHQHUDODQGVKRXOGEHFRQVLGHUHGLQDOOSURMHFWV DQGSURJUDPPHV%0=*7=DQG1*2V

<RXWKSURMHFWVDQGSURJUDPPHVDUHH[FHHGLQJO\UHOHYDQWWRDGGUHVVLQJVSH FLILFIRUPVRISRYHUW\DPRQJ\RXQJSHRSOHVXFKDVKLJKXQHPSOR\PHQWDQG H[FOXVLRQIURPGHFLVLRQPDNLQJSURFHVVHV)RUDFWLYLWLHVVXFKDVWUDLQLQJDQG HGXFDWLRQLWVHHPVDGHTXDWHWRIROORZWKHSROLF\RIWKH6RXWK$IULFDQJRY HUQPHQW DQG H[WHQG WKH WHUP ¶\RXWK· WR WKH DJH RI LQ RUGHU WR LQFOXGH GLVDGYDQWDJHGSHUVRQVDQGJURXSV7KHGHILQLWLRQRIPRUHQDUURZDJHOLPLWV PD\RQWKHRWKHUKDQGEHPRUHDSSURSULDWHIRURWKHUDFWLYLWLHV

;9,,, 6^800$5<

7KHFRQFHSWPDLQVWUHDPLQJZDVGHYHORSHGLQWKHILHOGRIZRPHQDQGJHQGHU VWXGLHV *HQGHU PDLQVWUHDPLQJ LV GHILQHG DV ´WKH SURFHVV RI DVVHVVLQJ WKH LPSOLFDWLRQVIRUZRPHQDQGPHQRIDQ\SODQQHGDFWLRQLQFOXGLQJOHJLVODWLRQ SROLFLHV RU SURJUDPPHV LQ DQ\ DUHDV DQG DW DOO OHYHOV ,W LV D VWUDWHJ\ IRU PDNLQJWKHFRQFHUQVDQGH[SHULHQFHVRIZRPHQDVZHOODVRIPHQDQLQWH JUDOSDUWRIWKHGHVLJQLPSOHPHQWDWLRQPRQLWRULQJDQGHYDOXDWLRQRISROLFLHV DQG SURJUDPPHV LQ DOO SROLWLFDO HFRQRPLF DQG VRFLHWDO VSKHUHV VR WKDW ZRPHQDQGPHQEHQHILWHTXDOO\DQGLQHTXDOLW\LVQRWSHUSHWXDWHGµ5HIHU ULQJWRWKHTXHVWLRQRIZKHWKHU\RXWKVKRXOGEHPDGHDFURVVFXWWLQJPDLQ VWUHDPLQJ WKHPH LW LV UHFRPPHQGHG WKDW DQ ² LQ DQDORJ\ WR WKH JHQGHU GHEDWH ¶DJH PDLQVWUHDPLQJ· RU ¶JHQHUDWLRQ PDLQVWUHDPLQJ· UDWKHU WKDQ D

¶\RXWKPDLQVWUHDPLQJ·DSSURDFKVKRXOGEHDSSOLHG7KLVLVHVSHFLDOO\UHOHYDQW LQSURMHFWVDQGSURJUDPPHVSRWHQWLDOO\UHOHYDQWWR\RXQJSHRSOHEXWDOVRWR RWKHU DJH JURXSV VXFK DV XUEDQ DQG FRPPXQLW\ GHYHORSPHQW 7KH VRFLDO GLIIHUHQWLDWLRQ RI WDUJHW JURXSV DFFRUGLQJ WR DJH JHQGHU RU HWKQLF JURXS VKRXOGEHDQDO\VHGLQQHHGVDVVHVVPHQWVDQGWKURXJKRXWWKHSODQQLQJDQG LPSOHPHQWDWLRQSKDVH

7RLQWHJUDWHWKHSHUVSHFWLYHRIFKLOGUHQDQG\RXWKLQVWUDWHJLHVDQGSROLFLHV WKHLU SDUWLFLSDWLRQ VKRXOG EHFRPH FHQWUDO LQ UHVHDUFK RQ SRYHUW\ DQG ZHOO EHLQJ ,W LV UHFRPPHQGHG WKDW FRPPXQLW\EDVHG \RXWK RUJDQLVDWLRQV DQG JURXSVVKRXOGSOD\DNH\UROHLQWKHLGHQWLILFDWLRQRIQHHGVDWORFDOOHYHOWR HQVXUHERWWRPXSDSSURDFKHVLQFOXVLRQDQGSDUWLFLSDWLRQ2UJDQLVDWLRQVDQG SURMHFWV VKRXOG FUHDWH RSSRUWXQLWLHV IRU GLDORJXH WR VKDUH NQRZOHGJH ZLWK DQGDERXW\RXQJSHRSOH,QGLFDWRUVWRPHDVXUHWKHLPSDFWRI\RXWKSURMHFWV DQGSURJUDPPHVVKRXOGEHLGHQWLILHGLQFRRSHUDWLRQZLWK\RXWKUHSUHVHQWD WLYHV7KHFUHDWLYHDQGLQQRYDWLYHSRWHQWLDORI\RXWKVKRXOGEHXVHGDQGLQ WHJUDWHGDWDOOOHYHOVRIGHFLVLRQPDNLQJSURFHVVHV

&RQIOLFWSUHYHQWLRQLQ6RXWK$IULFDLVUHQGHUHGGLIILFXOWWKURXJKZLGHVSUHDG FULPHDQGJDQJYLROHQFH7KHUHIRUHDSDUWIURPFDSDFLW\EXLOGLQJLQFRPPX QLWLHVLWLVFUXFLDOWRDGGUHVVFULPHDQGYLROHQFHRQWKHQDWLRQDOOHYHO,WLV UHFRPPHQGHGWKDWFRPPXQLWLHVHVWDEOLVKLQJFLYLOVRFLHW\VWUXFWXUHVWROREE\

IRUFULPHDQGFRQIOLFWSUHYHQWLRQVKRXOGEHVXSSRUWHG

,/2*HQGHU(TXDOLW\7RROZZZLORRUJSXEOLFHQJOLVKEXUHDXJHQGHUQHZVLWHDERXW GHILQKWP

7^$%/(2⁾&^217(176 ;,;

7DEOHRI&RQWHQWV

)25(:25' ,

$&.12:/('*(0(176,,,

6800$5< 9

6XPPDU\RIPDMRUILQGLQJV 9

6XPPDU\RIPDMRUUHFRPPHQGDWLRQV ;,,

&RQFOXVLRQVIRUGHYHORSPHQWSROLF\ ;,9

0DLQFRQFOXVLRQVDQGOHVVRQVOHDUQW ;9,,

7$%/(2)&217(176 ;,;

/,672)$%%5(9,$7,216 ;;,,,

,1752'8&7,21

%5,()'(6&5,37,212)7+(352-(&76

&RQFHSWVDQGDFWLYLWLHV

7DEXODWHGRYHUYLHZ

*(1(5$/&21',7,216

3ROLWLFDOHFRQRPLFVRFLDODQGVRFLRFXOWXUDOIDFWRUVLQ6RXWK$IULFD

(GXFDWLRQDOSROLFLHV

+XPDQULJKWVVLWXDWLRQ

+,9$,'6

5LVNVHQGDQJHULQJWKHVXFFHVVRISURMHFWVDQGSURJUDPPHV %ULHIDQDO\VLVRIWKHVHFWRUDOWKHPH\RXWK·

$FWLYLWLHVRIRWKHUPXOWLODWHUDODQGLQWHUQDWLRQDOGRQRUVLQ

WKLVVHFWRU

*RYHUQPHQWSROLF\DQGDFWLYLWLHVRI1*2V $QDO\VLVRIWKHLQVWLWXWLRQDOIUDPHZRUNRIRUJDQLVDWLRQVDQG

SURMHFWVXQGHUUHYLHZ

&RQFOXVLRQV

;; 7^$%/(2)&^217(176 48$/,7<2)7+($,06$1'3/$11,1*2)7+(352-(&76

$QDO\VLVDQGDVVHVVPHQWRIDLPV

$QDO\VLVDQGDVVHVVPHQWRISODQQLQJTXDOLW\

1HHGVDQDO\VLV

'HILQLWLRQRIWDUJHWJURXSV

3DUWLFLSDWLRQRIWKHWDUJHWJURXSV

$GMXVWPHQWRISODQQLQJGXULQJSURMHFWLPSOHPHQWDWLRQ 2YHUDOODVVHVVPHQWRISURMHFWDLPVDQGSODQQLQJ 48$/,7<2)352-(&7,03/(0(17$7,21$1'67((5,1*

$QDO\VLVRIWKHTXDOLW\RISURMHFWLPSOHPHQWDWLRQ

,QVWLWXWLRQDOEDFNJURXQG

&XUULFXODDQGHGXFDWLRQDOPHWKRGV

+,9$,'6PDLQVWUHDPLQJ

3DUWLFLSDWLRQRIWDUJHWJURXSV

2EVWDFOHVIRUSDUWLFLSDWLRQ

*XLGDQFHDQGFRXQVHOOLQJLQVHHNLQJHPSOR\PHQW $SSURDFKHVWRVXSSRUW\RXQJSHRSOHLQEHFRPLQJVHOI

HPSOR\HG

8VHRIUHVRXUFHVLQVWLWXWLRQVDQGH[SHUWVDYDLODEOHLQ

SDUWQHUFRXQWU\

$YHQXHVIRUFRRSHUDWLRQZLWKORFDOSULYDWHEXVLQHVVDQG

LQGXVWU\

3HUVRQQHOWUDLQLQJIRUWKHSDUWQHUVLGH $QDO\VLVDQGDVVHVVPHQWRIWKHTXDOLW\RISURMHFWPDQDJHPHQW

6WHHULQJLQVWUXPHQWV

0RQLWRULQJRIDFWLYLWLHVDQGLPSDFW

'LIILFXOWLHVRILPSDFWPRQLWRULQJ

$VVLVWDQFHQHHGHGWRLPSURYHLPSDFWPRQLWRULQJ 2YHUDOODVVHVVPHQWRISURMHFWLPSOHPHQWDWLRQDQGVWHHULQJ

7^$%/(2⁾&^217(176 ;;,

'(9(/230(1732/,&<())(&7,9(1(66

$1'6,*1,),&$1&(2)352-(&76

3URMHFWUHVXOWVDQGDFKLHYHPHQWRIDLPV

$VVHVVPHQWRIFRVWEHQHILWUDWLRDQGSURILWDELOLW\

5HFRUGLQJDQGDVVHVVPHQWRIHFRQRPLFDQGVRFLDOLPSDFWV $VVHVVPHQWRISRYHUW\RULHQWDWLRQ

FRQWULEXWLRQWRWKHLQWHUQDWLRQDOGHYHORSPHQWJRDOV

DQGWRWKHJRDOVRIWKH$FWLRQ3URJUDPPH

6XVWDLQDELOLW\

*HQHUDOFRQGLWLRQV

3URMHFWH[HFXWLQJDJHQF\SDUWQHU

7DUJHWJURXS

*HQHUDODVVHVVPHQWRISURMHFWHIIHFWLYHQHVVLQGHYHORSPHQWWHUPV DQGRIVXVWDLQDELOLW\DQGVLJQLILFDQFH &21&/86,216$1'5(&200(1'$7,216

3URMHFWUHODWHGUHFRPPHQGDWLRQV

*HQHUDOFRQFOXVLRQVIRU\RXWKSURMHFWVLQ6RXWK$IULFD

&RQFOXVLRQVIRUGHYHORSPHQWSROLF\

&RQFOXVLRQVDQGUHFRPPHQGDWLRQVRQSURFHGXUHVDQGLQVWUXPHQWV

$11(;

0LQXWHVRIWKH,PSDFW:RUNVKRSWK$XJXVW

([DPSOHVRIHYDOXDWLRQIRUPV

%,%/,2*5$3+<

$%%5(9,$7,216 ;;,,,

/LVWRIDEEUHYLDWLRQV

$$ $XVZlUWLJHV$PW0LQLVWU\RI)RUHLJQ$IIDLUV

$%(7 $GXOW%DVLF(GXFDWLRQ7UDLQLQJ

$1& $IULFDQ1DWLRQDO&RQJUHVV

%0= %XQGHVPLQLVWHULXP IU :LUWVFKDIWOLFKH =XVDPPHQDUEHLW XQG (QWZLFNOXQJ )HGHUDO 0LQLVWU\ IRU (FRQRPLF &RRSHUDWLRQ DQG 'HYHORSPHQW

&$)'$ &DSH)ODWV'HYHORSPHQW$VVRFLDWLRQ

&$7$' &HQWUH IRU $GYDQFHG 7UDLQLQJ LQ $JULFXOWXUDO DQG 5XUDO 'HYHORSPHQW

&26$78 &RQJUHVVRI6RXWK$IULFDQ7UDGH8QLRQV

&3) &RPPXQLW\3ROLFH)RUXP

&3: &RPPXQLW\3HDFH:RUNHU

&9 &XUULFXOXP9LWDH

&:' &DWKROLF:HOIDUHDQG'HYHORSPHQW

'(' 'HXWVFKHU(QWZLFNOXQJVGLHQVW*HUPDQ'HYHORSPHQW6HUYLFH ((' (YDQJHOLVFKHU (QWZLFNOXQJVGLHQVW $QJOLFDQ 'HYHORSPHQW

6HUYLFH

(74$ (GXFDWLRQDQG7UDLQLQJ4XDOLW\$VVXUDQFH%RG\

)$2 )RRGDQG$JULFXOWXUH2UJDQLVDWLRQRIWKH8QLWHG1DWLRQV

*($5 6WUDWHJ\IRU*URZWK(PSOR\PHQWDQG5HGLVWULEXWLRQ

*7= *HVHOOVFKDIW IU 7HFKQLVFKH =XVDPPHQDUEHLW $JHQF\ IRU 7HFKQLFDO&RRSHUDWLRQ

+22& +DQGVRIRXU&KLOGUHQ

,'$6$ ,QVWLWXWHIRU'HPRFUDF\LQ6RXWK$IULFD ,.6 ,QWHUQDWLRQDO.ROSLQJ6RFLHW\

,/2 ,QWHUQDWLRQDO/DERXU2UJDQLVDWLRQ .6$ .ROSLQJ6RFLHW\6RXWK$IULFD 1'$ 1DWLRQDO'HYHORSPHQW$JHQF\

1*2 1RQ*RYHUQPHQWDO2UJDQLVDWLRQ 14) 1DWLRQDO4XDOLILFDWLRQV)UDPHZRUN 16$ 1DWLRQDO6NLOOV$XWKRULW\

17% 1DWLRQDO7UDLQLQJ%RDUG

;;,9 $%%5(9,$7,216 1:) 1HZ:RUOG)RXQGDWLRQ

1<& 1DWLRQDO<RXWK&RPPLVVLRQ 3'3 3HDFHDQG'HYHORSPHQW3URMHFW

5'3 5HFRQVWUXFWLRQDQG'HYHORSPHQW3URJUDPPH 5'63 5XUDO'HYHORSPHQW6XSSRUW3URJUDPPH 6$&& 6RXWK$IULFDQ&RXQFLORI&KXUFKHV 6$1*2&2 6RXWK$IULFDQ1*2&RDOLWLRQ

6$36 6RXWK$IULFDQ3ROLFH6HUYLFH

6$4$ 6RXWK$IULFDQ4XDOLILFDWLRQ$XWKRULW\$FW 6$6 6RXWK$IULFDQ6ROXWLRQV

6(. 6(. 6R]LDO XQG (QWZLFNOXQJVKLOIH GHV .ROSLQJZHUNV 6RFLDO DQG'HYHORSPHQW$LGRIWKH.ROSLQJ6RFLHW\

6(7$ 6HFWRUDO(GXFDWLRQ7UDLQLQJ$XWKRULW\

6, 6DOHVLDQ,QVWLWXWH

600( 6PDOOPHGLXPDQGPLFURHQWHUSULVHV 75& 7UXWKDQG5HFRQFLOLDWLRQ&RPPLVVLRQ 8&03 8UEDQ&RQIOLFW0DQDJHPHQW3URMHFW 8&7 8QLYHUVLW\RI&DSH7RZQ

80$& <RX0DQDJLQJ&RQIOLFW 81 8QLWHG1DWLRQV

81'3 8QLWHG1DWLRQV'HYHORSPHQW3URJUDPPH

81(6&2 81(GXFDWLRQDO6FLHQWLILFDQG&XOWXUDO2UJDQLVDWLRQ 81,&() 8QLWHG1DWLRQV&KLOGUHQ·V)XQG

:&6&) :HVWHUQ&DSH6WUHHW&KLOGUHQ)RUXP :+2 :RUOG+HDOWK2UJDQLVDWLRQ

:23 :RUN2SSRUWXQLW\3URJUDPPH

<8 <RXWK8QOLPLWHG

,1752'8&7,21

,QWURGXFWLRQ

6LQFHWKHVWKH8QLWHG1DWLRQV81SROLFLHVDQGVWUDWHJLHVDVZHOODV WKRVHRIQDWLRQDODQGLQWHUQDWLRQDOGHYHORSPHQWDJHQFLHVKDYHVWUHVVHGWKH LPSRUWDQFHRIUHFRJQLVLQJWKHSUREOHPVDQGSRWHQWLDORI\RXWK7KH$JHQGD RI WKH 5LR :RUOG 6XPPLW FDOOHG IRU ´DFWLYLWLHV DLPHG DW UHGXFLQJ FXUUHQWOHYHOVRI\RXWKXQHPSOR\PHQWµDQGXUJHGQRQJRYHUQPHQWDORUJDQL VDWLRQV 1*2V WR ´GHYHORS HGXFDWLRQ DQG DZDUHQHVV SURJUDPPHV VSHFLIL FDOO\WDUJHWHGDWWKH\RXWKSRSXODWLRQRQFULWLFDOLVVXHVµDVDSUHUHTXLVLWHIRU VXVWDLQDEOHGHYHORSPHQW7KHPDLQDUJXPHQWVIRUDVWURQJHULQYROYHPHQWLQ SROLFLHVDQGVWUDWHJLHVWDUJHWLQJ\RXQJSHRSOHDUHDVIROORZV

N <RXWKSRYHUW\XQHPSOR\PHQWDQGH[FOXVLRQIURPGHFLVLRQPDNLQJSURF HVVHVDUHZLGHVSUHDGDQGLQWHQVLI\LQJ$FFRUGLQJWRHVWLPDWHVRIWKH,Q WHUQDWLRQDO /DERXU 2UJDQLVDWLRQ ,/2 PRUH WKDQ SHUFHQW RI WKH WRWDO XQHPSOR\HGSRSXODWLRQDUHFXUUHQWO\\RXQJSHRSOH,/2

N 7KH +,9$,'6 LQIHFWLRQ UDWH LV HVSHFLDOO\ KLJK DPRQJ \RXQJ SHRSOH LQ FUHDVLQJORQJWHUPSRYHUW\ULVNVIRUVRFLHWLHVRQDORFDODQGQDWLRQDOOHYHO N &KLOGUHQDQG\RXWKDUHRIWHQYLFWLPVRIDEXVHH[SORLWDWLRQDQGYLROHQFH

$WWKHVDPHWLPHKRZHYHUWKH\DUHDOVRSURJUHVVLYHO\LQYROYHGLQYLROHQW DQGFULPLQDOEHKDYLRXULQH[WUHPHFDVHVDVFKLOGVROGLHUVRUJDQJPHP EHUV

N ,QGHYHORSLQJFRXQWULHVLQSDUWLFXODU\RXQJSHRSOHUHSUHVHQWDODUJHSUR SRUWLRQRIWKHWRWDOSRSXODWLRQ$VDUHVXOWRIWKHLUHQRUPRXVSRWHQWLDOIRU KXPDQDQGVRFLDOGHYHORSPHQWWKH\DUHUHJDUGHGDV¶SDUWRIWKHVROXWLRQ UDWKHUWKDQWKHSUREOHP·DQGDVSRWHQWLDO·FKDQJHDJHQWV·

,Q WKH VWUDWHJLHV IRU SRYHUW\ UHGXFWLRQ DQG VXVWDLQDEOH GHYHORSPHQW LQ WKH 81 0LOOHQQLXP 'HFODUDWLRQ VSHFLDO DWWHQWLRQ ZDV JLYHQ WR FKLOGUHQ DQG

\RXWK 6RPH RI WKH0LOOHQQLXP 'HYHORSPHQW *RDOV DGGUHVV FKLOGUHQ DQG

\RXWK GLUHFWO\ VXFK DV WKH LPSURYHPHQW RI HGXFDWLRQ DQ LQFUHDVH LQ HP SOR\PHQWRSSRUWXQLWLHVSURPRWLRQRIJHQGHUHTXDOLW\DQG+,9$,'6SUHYHQ WLRQ7KH<RXWK(PSOR\PHQW1HWZRUNZDVFRQYHQHGXQGHUWKHOHDGHUVKLSRI

&KDSWHUZZZGHYHORSPHQWJRDOVRUJ

/D&DYD/\WOH

ZZZGHYHORSPHQWJRDOVRUJ

,1752'8&7,21 WKH:RUOG%DQNDQG,/2WRGHYHORS¶LPDJLQDWLYHDSSURDFKHV·WRWKHLVVXHVRI

\RXWKXQHPSOR\PHQW

7KHJURZLQJDZDUHQHVVRIWKHSUREOHPVDQGSRWHQWLDORI\RXWKZDVUHIOHFWHG DW D QXPEHU RI JOREDO FRQIHUHQFHV DV ZHOO DV LQ WKH IRUPXODWLRQ RI WKHLU ULJKWVWRHGXFDWLRQHPSOR\PHQWDQGKHDOWKDVVWDWHGLQDYDULHW\RILQWHUQD WLRQDOLQVWUXPHQWVDQGDFWLRQSURJUDPPHV7KH8QLWHG1DWLRQV:RUOG$FWLRQ 3URJUDPPHIRU<RXWKRIIRUH[DPSOHDLPVDERYHDOODWLQFUHDVLQJRS SRUWXQLWLHVIRU\RXWKSDUWLFLSDWLRQLQGHFLVLRQPDNLQJSURFHVVHV,WVHHNVWR PDNHJRYHUQPHQWVPRUHUHVSRQVLYHWRWKHLUDVSLUDWLRQVDQGSRWHQWLDO$WWKH IRXUWK:RUOG <RXWK )RUXP LQ 'DNDU LQ RUJDQLVHG E\ WKH 8QLWHG 1D WLRQV LW ZDV VWDWHG WKDW HIIHFWLYH FRPPXQLFDWLRQ FKDQQHOV EHWZHHQ 1*2V DQGWKH81V\VWHPDUHHVVHQWLDOIRUGLDORJXHDQGFRQVXOWDWLRQRQDFWLYLWLHV DQG SURJUDPPHV GHVLJQHG IRU WKH HPSRZHUPHQW RI \RXWK 7KH )RUXP·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

6LQFHWKHHQGRIWKHV*HUPDQGHYHORSPHQWFRRSHUDWLRQKDVDOVRHP SKDVLVHGWKHLPSRUWDQFHRI\RXWKSURPRWLRQLQLWVSURMHFWVDQGSURJUDPPHV ,Q WKH)HGHUDO 0LQLVWU\ IRU (FRQRPLF &RRSHUDWLRQ DQG 'HYHORSPHQW

%0=WKH*HUPDQ$JHQF\IRU7HFKQLFDO&RRSHUDWLRQ*7=DQG1*2VSXE OLVKHGDVWUDWHJ\SDSHUVWDWLQJWKDW´WKHLQWHUHVWVRIFKLOGUHQDQG\RXQJSHR SOHVKDOOEHFRQVLGHUHGDJHQHUDOFURVVFXWWLQJWDVNRI'HYHORSPHQW&RRS HUDWLRQµ*7=,QLWV$FWLRQ3URJUDPPH%0=IRUPXODWHVWHQ VWUDWHJLHVIRUKDOYLQJH[WUHPHSRYHUW\ZRUOGZLGHE\WKH\HDU

8QLWHG1DWLRQV

/D&DYD/\WOH

,1752'8&7,21 7KHVHLQFOXGH

N ´ERRVWLQJ WKH HFRQRP\ DQG HQKDQFLQJ WKH DFWLYH SDUWLFLSDWLRQ RI WKH SRRUµDPRQJRWKHUVE\VXSSRUWLQJVHOIHPSOR\PHQWSRWHQWLDOVRI\RXWK N ´JXDUDQWHHLQJ EDVLF VRFLDO VHUYLFHV ² VWUHQJWKHQLQJ VRFLDO SURWHFWLRQµ

DPRQJRWKHUVWKURXJK+,9$,'6SUHYHQWLRQ N ´IRVWHULQJJHQGHUHTXDOLW\µ

N ´HQVXULQJWKHSDUWLFLSDWLRQRIWKHSRRU²VWUHQJWKHQLQJJRRGJRYHUQDQFHµ DQG

N ´UHVROYLQJ FRQIOLFW SHDFHIXOO\ ² IRVWHULQJ KXPDQ VHFXULW\ DQG GLVDUPD PHQWµ )HGHUDO 0LQLVWU\ IRU (FRQRPLF &RRSHUDWLRQ DQG 'HYHORSPHQW

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

$SSURDFKHVWRUHGXFH\RXWKSRYHUW\LQ6RXWK$IULFD

7KH HYDOXDWLRQ ¶$SSURDFKHV WR UHGXFH \RXWK SRYHUW\ LQ &DSH 7RZQ 6RXWK

$IULFD·LVRQHRIIRXULQWKHVHULHVHYDOXDWLRQRQ·&RPEDWLQJ<RXWK3RYHUW\·

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

*7=H

,1752'8&7,21 7KHREMHFWLYHVRIWKHVHULHVHYDOXDWLRQIRUPXODWHGE\WKH%0=DQGVXSSOH PHQWHGE\SUHSDUDWRU\VHVVLRQUHVXOWVIURPWK0D\ZHUHWRDQDO\VH DQG DVVHVV JRDOV DQG DFKLHYHPHQWV RI WKH SURMHFWV DQG SURJUDPPHV WKHLU UHVXOWVDQGWKHLULQWHQWLRQDODQGXQLQWHQWLRQDOLPSDFWVVXFKDV

N FRQWULEXWLRQWRWKHVXVWDLQDEOHUHGXFWLRQRI\RXWKSRYHUW\DQGWKHSUHYHQ WLRQPDQDJHPHQWRIFRQIOLFWVDQGYLROHQFHLQXUEDQDUHDV

N DSSURSULDWHQHVV RI GHYHORSPHQW DSSURDFKHV LQ WHUPV RI PHHWLQJ QHHGV VXVWDLQDELOLW\ DQG EURDGEDVHG SRYHUW\ UHGXFWLRQ JRRG DQG EHVW SUDF WLFHVOHVVRQVOHDUQW

N HIIHFWLYHQHVVRILQQRYDWLYHPHWKRGVLQ\RXWKZRUN N HIIHFWLYHQHVVRI+,9$,'6PDLQVWUHDPLQJ

N RSSRUWXQLWLHV IRU \RXWK SDUWLFLSDWLRQ LQ GHFLVLRQPDNLQJ SURFHVVHV DWGLI IHUHQW OHYHOV DQG REVWDFOHV WR WKHLU SDUWLFLSDWLRQ DFFRXQWLQJ IRU JHQGHU DVSHFWV

N DGHTXDF\ RI WKH LQVWLWXWLRQDO VHWXS FRRUGLQDWLRQ DQG FRRSHUDWLRQ EH WZHHQSURMHFWVVSHFLILFDWLRQRIFRRSHUDWLRQZHDNQHVVHVDQGUHFRPPHQ GDWLRQVIRULPSURYHPHQWV

N VWUHQJWKVDQGZHDNQHVVHVRIJRYHUQPHQWDODQGQRQJRYHUQPHQWDORUJDQL VDWLRQV

N DQDO\VLVRIWKHPHWKRGVDSSOLHGIRUDVFHUWDLQLQJLPSDFWVDQGIRUPRQLWRU LQJDQGHYDOXDWLRQSUDFWLFDOUHFRPPHQGDWLRQVIRULPSURYHPHQWVSDUWLFX ODUO\IRUWKHSURMHFWVXSSRUWHGE\WKH*7=

N UHFRPPHQGDWLRQV IRU FRQFHSWXDO GHYHORSPHQW LQ FRPEDWLQJ \RXWK SRY HUW\ IRU %0= SURJUDPPHV DQG SULRULW\ SROLF\PDNLQJ EDVHG RQ DQDO\VLV DQGDVVHVVPHQWDQG

N VXVWDLQDELOLW\RIPHDVXUHV

7KH IROORZLQJ RUJDQLVDWLRQV DQG SURMHFWV LQ WKH &DSH 7RZQ DUHD DQG LQ 6RVKDQJXYH3UHWRULDZHUHHYDOXDWHG

N 8UEDQ &RQIOLFW 0DQDJHPHQW 3URMHFW 8&03 SUHYLRXVO\ HQWLWOHG 3HDFH DQG 'HYHORSPHQW 3URMHFW :HVWHUQ &DSH *7= 3URMHFW QR ZLWKSURMHFWORFDWLRQVLQ1\DQJD&URVVURDGV&DSH7RZQDQG 6RVKDQJXYH3UHWRULD

,1752'8&7,21 N :RUN 2SSRUWXQLW\ 3URJUDPPH.ROSLQJ 6RFLHW\ 6RXWK $IULFD VXSSRUWHG

E\6R]LDOXQG(QWZLFNOXQJVKLOIHGHV.ROSLQJZHUNV6(.

N 3URPRWLRQ RI \RXWK VRFLDO ZRUN E\&DWKROLF :HOIDUH DQG 'HYHORSPHQW

&:'DSURMHFWVXSSRUWHGE\&DULWDV,QWHUQDWLRQDO

N 6DOHVLDQ ,QVWLWXWH SURMHFWV IRU VWUHHW \RXWK VXSSRUWHG E\&DULWDV ,QWHUQD WLRQDO

$Q(YDQJHOLVFKHU(QWZLFNOXQJVGLHQVW(('VXSSRUWHGFRPPXQLW\FHQWUHHQ WLWOHGWKH1HZ:RUOG)RXQGDWLRQZDVLQFOXGHGDVDUHIHUHQFHSURMHFW

(DFK RI WKH HYDOXDWHG SURMHFWV LPSOHPHQWHG D EURDG DUUD\ RI PHDVXUHV ,Q DGGLWLRQWRSRYHUW\UHGXFWLRQWKHHYDOXDWLRQWKHUHIRUHIRFXVHGRQWKHIROORZ LQJ WKHPDWLF FRPSRQHQWV WKDW ILJXUH LQ DOO SURMHFWV FRQIOLFW SUHYHQWLRQDQG PDQDJHPHQW SUHSDUDWLRQ IRU HPSOR\PHQW YRFDWLRQDO DQG WHFKQLFDO HGXFD WLRQ SURPRWLRQ RI VHOIFRQILGHQFH WKURXJK OLIHVNLOOV WUDLQLQJ DQG +,9$,'6 PDLQVWUHDPLQJ

5HVHDUFKPHWKRGV

'XULQJ WKH SUHSDUDWRU\ SKDVH LQ %HUOLQ WKH WHDP HYDOXDWHG SURMHFW GRFX PHQWVGLVFXVVHGOLWHUDWXUHUHOHYDQWWRWKHDQDO\VLVRI\RXWKSRYHUW\LQ6RXWK

$IULFDRUJDQLVHGLQWHUYLHZVZLWKUHVRXUFHSHUVRQVDQGGHYHORSHGWKHPHWK RGRORJLFDOFRQFHSWIRUWKHVWXG\$VSDUWRIDQ,QFHSWLRQ5HSRUWRQEHKDOIRI WKH%0=K\SRWKHVHVRQSURMHFWDQGSURJUDPPHLPSDFWZHUHIRUPXODWHGRQ IRXU OHYHOV WDUJHW JURXSV LPSOHPHQWLQJH[HFXWLQJ DJHQFLHV VHFWRU \RXWK SROLFLHV6RXWK$IULFDQVRFLHW\0DLQK\SRWKHVHVZHUH

N 7KHSURMHFWVDQGSURJUDPPHVKDYHDQLPSDFWRQWDUJHWJURXSOHYHOSUR MHFWSDUWLFLSDQWVFRPPXQLWLHV,PSDFWPHDVXUHPHQWHYHQRQWKLVOHYHOLV GLIILFXOWEHFDXVHRIWKHPXOWLWXGHRILQIOXHQFLQJIDFWRUVRXWVLGHSODQQHGLQ WHUYHQWLRQV

N $OOHYDOXDWHGRUJDQLVDWLRQVDQGSURMHFWVLQFUHDVHGWKHLUFDSDFLWLHVIRUWKH LPSOHPHQWDWLRQRISURMHFWVWRUHGXFH\RXWKSRYHUW\LQWKHODVW\HDUV

N 7KHSURMHFWVDQGSURJUDPPHVKDYHDQLPSDFWRQVRFLHW\DQG\RXWKVHFWRU OHYHODVSDUWRIWKHHIIRUWVWRWUDQVIRUPWKH6RXWK$IULFDQVRFLHW\KRZ HYHUSDUWLFXODUO\RQWKHVHOHYHOVODUJHDWWULEXWLRQJDSVH[LVW

,1752'8&7,21 7KHIROORZLQJUHVHDUFKPHWKRGVZHUHDSSOLHGGXULQJWKHILHOGZRUNSKDVHLQ 6RXWK$IULFD

N LQWHUYLHZV ZLWK UHVRXUFH SHUVRQV LH RIILFLDOV RI WKH'HSDUWPHQW RI

&RPPXQLW\6DIHW\6RXWK$IULFDQ3ROLFH6HUYLFHDFDGHPLFVIURPWKH8QL YHUVLW\RI&DSH7RZQDQGUHSUHVHQWDWLYHVRI1*2VLQWHUYLHZV

N SDUWLFLSDQWREVHUYDWLRQYLVLWVWR\RXWKDQGFRPPXQLW\FHQWUHVSDUWLFLSD WLRQLQFRXUVHVZRUNVKRSVDQGSURMHFWDFWLYLWLHV

N HYDOXDWLRQRIWUDLQLQJPDQXDOVDQGRWKHUSURMHFWGRFXPHQWV

N LQWHUYLHZV ZLWK SURMHFW FRRUGLQDWRUV DQG SURMHFW VWDII VRFLDO ZRUNHUV WHDFKHUV ZRUNVKRS LQVWUXFWRUV YROXQWHHUV DQG IDFLOLWDWRUV XVLQJ VHPL VWUXFWXUHGTXHVWLRQQDLUHVDQGLQWHUYLHZJXLGHOLQHVLQWHUYLHZV

N LQGLYLGXDO DQG JURXS LQWHUYLHZV ZLWK FXUUHQW DQG IRUPHU FRXUVH SDUWLFL SDQWVVHPLVWUXFWXUHGDQGELRJUDSKLFDOLQWHUYLHZVLQWHUYLHZV

N GLVFXVVLRQV DQG ZRUNVKRSV ZLWK FXUUHQW DQG IRUPHU FRXUVH SDUWLFLSDQWV LQFOXGLQJWKHHODERUDWLRQRIUHVRXUFHDQGPLQGPDSVDQG

N LQWHUYLHZV ZLWK FRPPXQLW\ PHPEHUV RI 1\DQJD&URVVURDGV LQWHU YLHZV

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

VHHSURWRFRORIWKHZRUNVKRSLQWKHDQQH[

3^52-(&7'(6&5,37,21

%ULHIGHVFULSWLRQRIWKHSURMHFWV

&RQFHSWVDQGDFWLYLWLHV

.ROSLQJ6RFLHW\6RXWK$IULFD.6$

7KH.ROSLQJ6RFLHW\DFDWKROLFOD\PHPEHUVKLSRUJDQLVDWLRQZDVIRXQGHG LQ *HUPDQ\ LQ DQG HVWDEOLVKHG LQ RWKHU FRXQWULHV ODWHU RQ.ROSLQJ 6RXWK$IULFDZDVLQLWLDWHGLQDVSDUWRIWKH,QWHUQDWLRQDO.ROSLQJ6RFL HW\,.67KH.ROSLQJ6RFLHW\IRFXVHVRQVRFLDOZRUNFRPELQHGZLWKYRFD WLRQDO WUDLQLQJ DQG WKH SURPRWLRQ RI SURIHVVLRQDO VNLOOV 7KH DLP RI.ROSLQJ 6RFLHW\ 6RXWK $IULFD .6$ LV WR GHYHORS ´IDPLO\OLNH JURXSV WR HPSRZHU SHRSOHWRUHDFKWKHLUIXOOSRWHQWLDOµ3HUVRQVZKRMRLQD.ROSLQJ)DPLO\DUH HQFRXUDJHG WR DVVLVW RWKHUV)DPLOLHV DUH H[SHFWHG WR LGHQWLI\ DQG DGGUHVV QHHGV LQ D VSHFLILF FRPPXQLW\ WKHUHIRUH WKHLU DFWLYLWLHV DUH GHSHQGLQJ RQ ORFDOSUREOHPV7KHUHDUHFXUUHQWO\.ROSLQJ)DPLOLHVLQ6RXWK$IULFDZLWK EHWZHHQWHQDQGPHPEHUVUHVSHFWLYHO\7KH\FDQIRUPSDUWQHUVKLSVZLWK HDFK RWKHU ZLWKLQ 6RXWK $IULFD RU ZLWK)DPLOLHV LQ RWKHU FRXQWULHV ,QLWLD WLYHVWRIRXQG.ROSLQJ)DPLOLHVPRVWO\GHYHORSLQWKHSDULVKHVDOWKRXJK.6$

DLPV DW VSUHDGLQJ EH\RQG WKH FKXUFK $ PLQLPXP RI VHYHQ SHUVRQV LV UH TXLUHG WR IRUP D QHZ)DPLO\ 5HOLJLRXV FRQYLFWLRQ LV QRW D SUHUHTXLVLWH IRU PHPEHUVKLSLQRUGHUWREHHOHFWHGWRFHUWDLQSRVLWLRQVLQWKHRUJDQLVDWLRQV KRZHYHUFDQGLGDWHVPXVWEHORQJWRWKH&DWKROLF&KXUFK

,QDGGUHVVLQJWKHKLJKXQHPSOR\PHQWUDWHDPRQJ\RXQJSHRSOHDQGLQRUGHU WRGHYHORSWKHLUSRWHQWLDO.6$HVWDEOLVKHGWKH:RUN2SSRUWXQLW\3URJUDPPH :23LQ7KHH[SUHVVHGJRDORI:23LVWRVXSSRUWSDUWLFLSDQWVXQWLO WKH\ ILQG JDLQIXO HPSOR\PHQW WKH PDLQ WRROV DUH WHDFKLQJ OLIH DQG YRFD WLRQDOWHFKQLFDOVNLOOV7KH:RUN2SSRUWXQLW\3URJUDPPHSDUWLFLSDQWVDUHDV VLVWHG E\.ROSLQJ )DPLOLHV EXW DUH DOVR HQFRXUDJHG WR MRLQ)DPLOLHV WKHP VHOYHVRUIRUPQHZRQHVWRVXSSRUWRWKHUPHPEHUVRIWKHFRPPXQLW\

,QWHUYLHZZLWK%HUQKDUG.RKOHU0D\

,Q WKHUH ZHUH .ROSLQJ )DPLOLHV LQ 6RXWK $IULFD ZLWK D WRWDO RI FORVH WR PHPEHUV&DSH7RZQKRVWVWKHODUJHVWQXPEHUZLWK)DPLOLHVVL[DUHLQ2XGWVKRRUQ 7KHUHLVRQO\RQH)DPLO\LQ-RKDQQHVEXUJEXWZLWKPRUHWKDQPHPEHUVKRZHYHULWLV RQHRIWKHODUJHVWLQ6RXWK$IULFD$QQXDO5HSRUW

,QWHUYLHZVZLWK.6$VWDIIDQG%RDUGPHPEHUV$XJXVW

3^52-(&7'(6&5,37,21

&DWKROLF:HOIDUHDQG'HYHORSPHQW&:'DQG<RXWK8QOLPLWHG<8

&DWKROLF:HOIDUHDQG'HYHORSPHQW&:'ZDVIRXQGHGLQDQGFRQVWL WXWHVWKHRIILFLDOZHOIDUHDQGGHYHORSPHQWDUPRIWKH&DWKROLF$UFKGLRFHVH RI&DSH7RZQ:LWKLWVKHDGRIILFHEDVHGLQWKHFLW\FHQWUH&:'VHUYHVDV DQXPEUHOODRUJDQLVDWLRQIRUSURJUDPPHVPDLQO\LQPDUJLQDOLVHGFRPPX QLWLHVZLWKEODFNDQGFRORXUHGSRSXODWLRQV&:'UXQVHLJKWFRPPXQLW\GH YHORSPHQWFHQWUHVZLWKVRFLDOVHUYLFHVVXFKDV

N FRPPXQLW\NLWFKHQVFDUHIRUWKHDJHGQXUVHU\VFKRROVDQGUHIXJHHVKHO WHUSURJUDPPHV

N FRXQVHOOLQJLQGLYLGXDODQGJURXSDGYLFHRQVH[XDODEXVHGRPHVWLFYLR OHQFHRU+,9$,'6

N FDSDFLW\EXLOGLQJDQGSHUVRQDOHPSRZHUPHQWHVSHFLDOO\IRU\RXWK

&:'HIIRUWVIRUSRYHUW\UHGXFWLRQDUHFORVHO\UHODWHGWRWKHGHYHORSPHQWRI D VWDEOH VRFLDO FRPPXQLW\ LQIUDVWUXFWXUH 6HUYLFHV DUH SURYLGHG IRU DOO DJH JURXSVUHJDUGOHVVRIFRQIHVVLRQDOEDFNJURXQG7KH&:'\RXWKSURJUDPPHV DUHVSOLWXSLQWRIRXUIRFXVDUHDV

N VSRUWVDQGUHFUHDWLRQ N DUWVDQGFXOWXUH

N OLIHVNLOOVDQG+,9$,'6SUHYHQWLRQDQG N HFRQRPLFHPSRZHUPHQW

6RPH\RXWKSURJUDPPHVDUHLQWHJUDWHGLQWRDFRPPXQLW\GHYHORSPHQWFHQ WUHRWKHUVRSHUDWHLQWKHLURZQEXLOGLQJV

7KLVUHSRUWVHHNVWRJLYHDQRYHUDOOLPSUHVVLRQRI&:'+RZHYHUGXHWRWKH ODUJH QXPEHU RI SURJUDPPHV &:' HQFRPSDVVHV WKH IRFXV ZLOO EH RQ WKH IROORZLQJ \RXWK SURJUDPPHV WKH,NKZHVL /RPVRDQG5DYHQVPHDG \RXWK FHQWUHV WKH -REVWDUW DQG )DFLQJ WKH )XWXUH ZLWK &RXUDJH WUDLQLQJ SUR JUDPPHVDQG<RXWK8QOLPLWHG

<RXWK 8QOLPLWHG<8 LV GHVLJQHG WR FRRUGLQDWH WKH \RXWK SURJUDPPHV RI

&:'WKH6DOHVLDQ,QVWLWXWHDQGWKH&DWKROLF$UFKGLRFHVDQ<RXWK&RPPLV VLRQDQGWRQHWZRUNZLWKRWKHURUJDQLVDWLRQV)RXQGHGLQ<8WDUJHWV

´\RXWKOLYLQJRQWKHVWUHHWVDQG\RXWKDWULVNLQWKH&DSH7RZQ&RVPRSROL WDQ$UHDµWR´HQDEOHWKHPWREHFRPHIXOILOOHGLQGHSHQGHQWLQWHJUDWHGDQG

3^52-(&7'(6&5,37,21 UHVSRQVLEOHPHPEHUVRIVRFLHW\µ<8FDUULHVRXWLWVRZQSURJUDPPHVIR FXVLQJRQVSRUWHYHQWVWKDWEULQJ\RXWKIURPGLIIHUHQWFRPPXQLWLHVWRJHWKHU 6DOHVLDQ,QVWLWXWH6,

7KH6DOHVLDQ2UGHULVD&DWKROLFLQWHUQDWLRQDOVRFLHW\HQJDJHGLQWKHHGXFD WLRQDQGUHKDELOLWDWLRQRIWKHPRVWGLVDGYDQWDJHG\RXWKLUUHVSHFWLYHRIUHOL JLRXVIDLWK,WZDVIRXQGHGLQE\WKH,WDOLDQSULHVW)DWKHU*LRYDQL%RVFR 'RQ %RVFR ,Q &DSH 7RZQ WKH6DOHVLDQ ,QVWLWXWH 6, WRRN XS LWV ZRUN LQ 6LQFH WKH6DOHVLDQ ,QVWLWXWH KDV UXQ D SURJUDPPH IRU WKH UH LQWHJUDWLRQ RI VWUHHW FKLOGUHQ DQG \RXWK LQWR VRFLHW\ DQG FRQWDLQV WKH SUR MHFWV/HDUQWR/LYH'RQ%RVFR+RVWHO6FKRROIRU/LIHDQG6L[WHHQ2XW UHDFK

/HDUQ WR /LYH LV D VFKRRO IRU FKLOGUHQ DQG \RXWK ZKR KDYH GURSSHG RXW RI VFKRRODQGOLYHGRUFXUUHQWO\OLYHRQWKHVWUHHW)RUVWUHHWFKLOGUHQRUWKRVH ZKRLQKDELWRQHRIWKHYDULRXVVKHOWHUVWKURXJKRXWWKHFLW\EDVLFQXPHUDF\

DQGOLWHUDF\VNLOOVDUHRIIHUHGLQILYHFODVVHVZKLOHWKHPRUHDGYDQFHGVWX GHQWV SDUWLFLSDWH LQ$GXOW %DVLF (GXFDWLRQ 7UDLQLQJ $%(7 DW WKH HQG RI ZKLFKWKH\UHFHLYHDFHUWLILFDWH7KHSURJUDPPHDOVRLQFOXGHVGDQFHFODVVHV VSRUWVDFWLYLWLHVDQGUHFUHDWLRQ7HFKQLFDOWUDLQLQJIRU\RXWKRYHU\HDUV RIDJHLVDQDGGLWLRQDOHOHPHQWRIWKHSURMHFWDQGLQFOXGHVPHWDOZRUNEULFN OD\LQJDQGFDUSHQWU\7KHPDLQIRFXVRIWKH/HDUQWR/LYHSURMHFWLV\RXQJ SHRSOH·VSHUVRQDOGHYHORSPHQW

'RQ %RVFR +RVWHO 6FKRRO IRU /LIH LV DQ PRQWK UHVLGHQWLDO SURJUDPPH WKDWLQFOXGHVIRUPDOHGXFDWLRQ$%(7OLIHVNLOOVDQGWHFKQLFDOVNLOOVWUDLQLQJ IRUPDOH\RXWKRYHU\HDUVRIDJH7KHPRQWKVDUHGLYLGHGLQWRWKUHH SKDVHV¶VHWWOLQJ·¶ZRUNSUHSDUDWLRQ·DQG¶LQGHSHQGHQFHSUHSDULQJWROHDYH·

$WWKHHQGRIHDFKSKDVHWKH\RXWKUHGHILQHWKHLUDLPVLQD¶UHIRFXVFDPS·

)DPLO\DQGFRPPXQLW\ZRUNLVDOVRDQHOHPHQWRIWKHSURMHFW7KHREMHFWLYH LVWRSUHSDUH\RXWKIRUDQLQGHSHQGHQWOLIHWRHQVXUHWKDWWKH\DUHDFFHSWHG EDFNE\WKHLUIDPLOLHVDQGFRPPXQLWLHVRUKDYHDQDFFRPPRGDWLRQDQGWR LQLWLDWHIXUWKHUVWXG\RUMREVHHNLQJ6,DOVRRIIHUVDGYLFH)LUVW$LGFORWKHV DQGEDWKLQJIDFLOLWLHV

,QWHUYLHZZLWK:D\QH*ROGLQJ$XJXVW

,QWHUYLHZZLWK'DQ%URZQ

3^52-(&7'(6&5,37,21 6L[WHHQLVPDLQO\DQRXWUHDFKSURMHFWIRUPDOHVWUHHW\RXWKRYHU\HDUV RIDJH$VWUHHWZRUNHUEXLOGVXSUHODWLRQVKLSVZLWK\RXWKRQWKHVWUHHWV+H DOVRPHGLDWHVEHWZHHQ\RXWKDQGSROLFHDQGVHFXULW\DQGEULQJV\RXWKOHDG HUV WRJHWKHU ,QWHUHVWHG \RXWK DUH RIIHUHG D GD\ ZLOGHUQHVV FDPS DIWHU ZKLFKWKH\DUHDVVHVVHGDQGVHOHFWHGIRUWKH'RQ%RVFR+RVWHO)RXUWLPHV D\HDUWKHSURMHFWRIIHUVDWKUHHGD\PRWLYDWLRQDQGUHIOHFWLRQRXWUHDFKFDPS IRUVWUHHW\RXWK\RXWKOHDGHUVDQGFKLOGSURVWLWXWHVWKH\GLVFXVVYLROHQFH RQWKHVWUHHWVDQGKRZWRGHDOZLWK+,9$,'6DQGRWKHUGLVHDVHV$QRWKHU DVSHFWRIWKHSURMHFWLQYROYHVSUHYHQWLYHFRPPXQLW\DQGIDPLO\ZRUNLQWKH DUHDVVWUHHW\RXWKRULJLQDOO\FRPHIURP3DUWRIWKLVZRUNHQWDLOVKROLGD\SUR JUDPPHVDQGZRUNZLWKGLYHUVHFRPPXQLW\OHDGHUVDQGRUJDQLVDWLRQVWRHQ FRXUDJHWKHPWRWDNHXSDFWLYLWLHVVXFKDVFOHDQLQJXSWKHLUVXUURXQGLQJVRU UXQQLQJYHJHWDEOHJDUGHQV

1HZ:RUOG)RXQGDWLRQ1:)

7KH1HZ:RUOG)RXQGDWLRQ1:)ZDVIRXQGHGLQDQGVWDUWHGZLWKD QXUVHU\VFKRROIRUFKLOGUHQLQDQLQIRUPDOVHWWOHPHQWLQ9U\JURQG,QWKH EHJLQQLQJWKHRUJDQLVDWLRQIRFXVHGLWVDFWLYLWLHVRQFKLOGFDUHVRFLDOZRUNDQG VHOIKHOSDSSURDFKHV1:)VHWQHZSULRULWLHVZLWKWKHSROLWLFDOWUDQVLWLRQDIWHU 7KH RUJDQLVDWLRQ VKLIWHG LWV IRFXV WR HPSRZHUPHQW DSSURDFKHV WKDW HQFRXUDJHFLWL]HQV´WRWDNHWKHLUULJKWIXOSODFHLQWKHQHZGHPRFUDF\µ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

,QWKH\RUJDQLVHGDKROLGD\SURJUDPPHIRURYHUFKLOGUHQDQG\RXWKLQWHUYLHZV ZLWK6,SURMHFWVWDII$XJXVW

3^52-(&7'(6&5,37,21 JHWV \RXWK LQ SDUWLFXODU LV WKH WKUHHPRQWK:RUNSODFH 6NLOOV &RXUVH ,W LQ FOXGHVPRGXOHVRQOLIHVNLOOVFRPSXWHUVNLOOVFRPPXQLFDWLRQWLPHPDQDJH PHQWDQGFRQIOLFWUHVROXWLRQDVZHOODVDMREVKDGRZLQJSURJUDPPH

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

8UEDQ&RQIOLFW0DQDJHPHQW3URMHFW8&03

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

7KHSURMHFWLVFRPSULVHGRIWZRFRPSRQHQWVWKHILUVWRIZKLFKFRQVLVWVRI YROXQWDU\ZRUNE\&RPPXQLW\3HDFH:RUNHUV&3:VZKRSUDFWLFHSHDFHIXO PHWKRGVRIPHGLDWLQJDQGKDQGOLQJFRQIOLFWV7KH&3:VDUH\RXQJPHQDQG ZRPHQIURPWKHFRPPXQLWLHVEHWZHHQWKHDJHRIDQGWKHPDMRULW\RI ZKRPDUHLQWKHLUHDUO\DQGPLGWZHQWLHV7KH\SDWUROLQWKHFRPPXQLW\DF FRPSDQ\ PDVV HYHQWV VXFK DV IXQHUDOV DQG GHPRQVWUDWLRQV SURYLGH )LUVW

$LGHQVXUHWKDWSHQVLRQHUVDUULYHKRPHVDIHO\DIWHUSLFNLQJXSWKHLU2OG$JH

,QWHUYLHZVZLWK1:)VWDII$XJXVW

3^52-(&7'(6&5,37,21

*UDQWVRUSURYLGHWUDIILFJXLGDQFHIRUVFKRROFKLOGUHQ&3:VWU\WRUHDFKDG KRF VHWWOHPHQWV EHWZHHQ FRQIOLFWLQJ SDUWLHV $GGLWLRQDOO\ FRPPXQLW\ UHVL GHQWVFDQUHSRUWWKHLUFDVHVGLUHFWO\WRWKH8&03RIILFHV,QFDVHVRIKHDY\

FULPHVXFKDVUDSHPXUGHURUDUPHGFRQIOLFWV&3:VFDOOWKHSROLFHDQGWKH DPEXODQFH

&3:VGHDOZLWKDSSUR[LPDWHO\WRGLIIHUHQWFDVHVSHUPRQWKPRVWO\

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

HUV

,QWHUYLHZVZLWK8&03VWDII$XJXVW

3^52-(&7'(6&5,37,21

7DEXODWHGRYHUYLHZ

.ROSLQJ6RFLHW\6RXWK$IULFD

,PSOHPHQWLQJDJHQF\ 6R]LDOXQG(QWZLFNOXQJVKLOIHGHV.ROSLQJZHUNV ([HFXWLQJDJHQF\ .ROSLQJ6RFLHW\6RXWK$IULFD

3URMHFWWLWOH :RUN2SSRUWXQLW\3URJUDPPH

7LPHIUDPH VLQFH

7DUJHWJURXS \RXQJSHRSOHDJHGWRIURPORZLQFRPHIDPL OLHVDQGZLWKJUDGHHGXFDWLRQ

2YHUDOODLP WR VXSSRUW SDUWLFLSDQWV XQWLO JDLQIXO HPSOR\PHQW LV IRXQG

3URMHFWDLP N WR SURYLGH HGXFDWLRQ DQG WUDLQLQJ IRU WKH SURPR WLRQ RI UHVSRQVLEOH VHOIUHOLDQW DQG VNLOOHG LQGL YLGXDOV

N WR FRQWULEXWH WR DZDUHQHVVUDLVLQJ RI WKH HWKLFV DQGVSLULWXDOLW\RIZRUNWRLPSURYHWKHVLWXDWLRQRI LQGLYLGXDOVDQGWKHEURDGHUFRPPXQLW\

N WR SURPRWH WKH DVVLVWDQFH RI RWKHUV LQ WKH FRP PXQLW\ RQFH SDUWLFLSDQWV· RZQ SRVLWLRQ KDV EHHQ HVWDEOLVKHGDQGVWDELOLVHG

1XPEHURISHUVRQQHO HOHYHQIRUDOO.6$DFWLYLWLHVLQ6RXWK$IULFD

2YHUDOOSURMHFWFRVWV 5DQGIRUDWZHOYHPRQWK:23F\FOHDERXW (XUR

*HUPDQ FRQWULEXWLRQ WRFRVWV

EXGJHW %0= 5DQG RWKHUGRQRUVRXWVLGH6RXWK$IULFD5DQG RWKHUGRQRUVLQ6RXWK$IULFD5DQGWRWDO DERXW(XUR

)RUPHU(YDOXDWLRQV 5RX[

3^52-(&7'(6&5,37,21

&DWKROLF:HOIDUHDQG'HYHORSPHQW

,PSOHPHQWLQJDJHQF\ &DULWDV,QWHUQDWLRQDO

([HFXWLQJDJHQF\ &DWKROLF:HOIDUHDQG'HYHORSPHQW

3URMHFWWLWOH -REVWDUW )DFLQJ WKH IXWXUH ZLWK FRXUDJH \RXWK FHQWUHV

7LPHIUDPH -REVWDUW VLQFH )DFLQJ WKH IXWXUH ZLWK FRXU DJHVLQFH

7DUJHWJURXS XQHPSOR\HG\RXQJSHRSOHDQG\RXWKIURPPDUJLQ DOLVHGFRPPXQLWLHV

2YHUDOODLP WR UHGXFH SRYHUW\ WKURXJK VHUYLFH FDULQJ DQG DF FRXQWDELOLW\LQSRRUFRPPXQLWLHV

3URMHFWDLP &:'JHQHUDO

N WRFUHDWLYHO\QXUWXUHFRPPXQLW\LQLWLDWLYHV

N WR EHFRPH D YLVLEOH DQG DFFHVVLEOH SUHVHQFH LQ WKHFRPPXQLWLHV

N WRFKDQQHOUHVRXUFHVWRFRPPXQLWLHV -REVWDUW

N WRDVVLVWGLVDGYDQWDJHGDQGXQHPSOR\HGSHRSOH E\SURYLGLQJSUDFWLFDOFDUHHURULHQWHGVNLOOV

N WRSODFHWKHPLQJDLQIXOHPSOR\PHQWZLWKLQWKH KRVSLWDOLW\VHFWRU

1XPEHURISHUVRQQHO HPSOR\HHVIRUDOOSURMHFWVDQGSURJUDPPHV 2YHUDOOSURMHFWFRVWV DQQXDORYHUDOOEXGJHW0LR5DQGLQ

(XUR

&DULWDV FRQWULEXWLRQ WR FRVWV

(XURSHU\HDU

)RUPHU(YDOXDWLRQV HYDOXDWLRQE\&DULWDV,QWHUQDWLRQDO

3^52-(&7'(6&5,37,21

6DOHVLDQ,QVWLWXWH

,PSOHPHQWLQJDJHQF\ &DULWDV,QWHUQDWLRQDO ([HFXWLQJDJHQF\ 6DOHVLDQ,QVWLWXWH 3URMHFWWLWOHV D/HDUQWR/LYH

E'RQ%RVFR+RVWHO²6FKRROIRU/LIH F6L[WHHQ2XWUHDFK

7LPHIUDPH WKUHH SKDVHV IURP

DQGDQQXDORSHUDWLRQDOSODQQLQJ

7DUJHWJURXS D FKLOGUHQ DQG \RXWK ZKR KDYH GURSSHG RXW RI VFKRRO DQG OLYHG RU OLYH RQ WKH VWUHHW RU FRPH IURPYDULRXVVKHOWHUVDQGKRPHV

E PDOH VWUHHW \RXWK \RXQJ RIIHQGHUV DQG IRUPHU JDQJPHPEHUVRYHU

FFKLOGUHQDQG\RXWKOLYLQJRQWKHVWUHHWDQGWKRVH IURPGLVDGYDQWDJHGFRPPXQLWLHV

2YHUDOODLP ,QWHJUDWLRQRIVWUHHW\RXWKDQGHPSRZHUPHQWRIGLV DGYDQWDJHGFKLOGUHQ\RXWKDQGFRPPXQLWLHV

3URMHFWDLP

N WR VWUHQJWKHQ VHOIHVWHHP WR SURYLGH HGXFDWLRQ DQGZRUNH[SHULHQFH

N WR LQWHJUDWH \RXWK LQWR WKH IRUPDO DQG LQIRUPDO ODERXUPDUNHW

N WRLQWHJUDWHVWUHHW\RXWKLQWRIDPLOLHVRUFRPPX QLWLHVDQGWRSUHSDUHWKHPIRUDQLQGHSHQGHQWOLIH N WREXLOGUHODWLRQVKLSVZLWKVWUHHW\RXWK

N WR VXSSRUW VWUHHW \RXWK ZKR GHFLGH WR OHDYH WKH VWUHHW

N WR HPSRZHU FRPPXQLWLHV DQG WR SUHYHQW \RXWK IURPMRLQLQJJDQJVDQGOHDYLQJWKHLUIDPLOLHV

3^52-(&7'(6&5,37,21 1XPEHURISHUVRQQHO VWDIIPHPEHUVRQHGLUHFWRURIWKH6DOHVLDQ,QVWL

WXWHRQHDGPLQLVWUDWRUEXUVDURQHVHFUHWDU\

D FRRUGLQDWRU WKUHH ZRUNVKRS LQVWUXFWRUV IRXU WHDFKHUFRRNFOHDQHU

EFRRUGLQDWRUVRFLDOZRUNHUWKUHHFKLOGFDUHZRUN HUVDGPLQLVWUDWRUFRRNFOHDQHU

FFRRUGLQDWRUFOHDQHUVWUHHWZRUNHU 2YHUDOOSURMHFWFRVWV DERXW(XURLQ

D(XUR E(XUR F(XUR

&DULWDV FRQWULEXWLRQ WRFRVWV

DERXW(XURLQ D(XUR

E(XUR F(XUR

7KH%0=FRQWULEXWLRQWR&DULWDVLVDERXWSHUFHQW RIWKHWRWDOEXGJHW

)RUPHUHYDOXDWLRQV HYDOXDWLRQE\&DULWDV,QWHUQDWLRQDOLQ

3^52-(&7'(6&5,37,21

1HZ:RUOG)RXQGDWLRQ

,PSOHPHQWLQJDJHQF\ (YDQJHOLVFKHU(QWZLFNOXQJVGLHQVW ([HFXWLQJDJHQF\ 1HZ:RUOG)RXQGDWLRQ

3URMHFWWLWOH :RUNSODFH6NLOOV&RXUVH/DYHQGHU+LOO'HYHORSPHQW )RUXP

7LPHIUDPH DQQXDORSHUDWLRQDOSODQ

/DYHQGHU+LOO'HYHORSPHQW)RUXPVLQFH

7DUJHWJURXS \RXQJ SHRSOH IURP PDUJLQDOLVHG DUHDV RI /DYHQGHU +LOO6HDZLQGV9U\JURQG6WHHQEHUJDQG5HWUHDW 2YHUDOODLP N WRHPSRZHULQGLYLGXDOVDQGFRPPXQLWLHV

N WR PRELOLVH RUJDQLVH DQG LQWHJUDWH FRPPXQLW\

VWUXFWXUHVLQRUGHUWREXLOGDFLYLOVRFLHW\

3URMHFWDLP N WR HTXLS \RXWK ZLWK WKH UHOHYDQW NQRZOHGJH DQG VNLOOVWRPDNHLQIRUPHGFKRLFHV

N WRHQDEOH\RXQJSHRSOHWRIXQFWLRQDVPXOWLSOLHUV LQWKHFRPPXQLW\

N WR PDNH WKH XQHPSOR\HG PRUH HPSOR\DEOH DQG SURPRWH VHOIHPSOR\PHQW WKURXJK WUDQVIHU RI LQ IRUPDWLRQNQRZOHGJHDQGVNLOOV

N WR ZRUN FORVHO\ ZLWK VSHFLDOLVHG LQVWLWXWLRQV DQG WRGHYHORS1:)DVDUHJLVWHUHGPXOWLWUDLQLQJFHQ WUH

1XPEHURISHUVRQQHO

2YHUDOOSURMHFWFRVWV (XUR

((' FRQWULEXWLRQ WR FRVWV

(XURWLPHIUDPH

)RUPHUHYDOXDWLRQV $QQXDOHYDOXDWLRQE\(('