&&10 */2%$/ )2580 21 ,17(51$7,21$/ ,19(670(17 &RQIHUHQFH RQ )RUHLJQ 'LUHFW ,QYHVWPHQW DQG WKH (QYLURQPHQW /HVVRQV WR EH /HDUQHG IURP

WKH 0LQLQJ 6HFWRU    )HEUXDU\  2(&' +HDGTXDUWHUV  UXH $QGUp 3DVFDO  &('(;  3DULV )UDQFH

'UDIW

7KH ,QGLDQ 0LQLQJ 6HFWRU (IIHFWV RQ WKH (QYLURQPHQW

%\ 3UDGHHS 6 0HKWD

)', ,QIORZV

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 6RXUFH 6XVWDLQDEOH 'HYHORSPHQW 1HWZRUNLQJ 3URJUDPPH 6'13 ,QGLD 7KH ,QGLDQ 0LQLQJ 6HFWRU 7KH PLQLQJ VHFWRU LQ ,QGLD FRQWULEXWHV DSSUR[LPDWHO\ IRXU SHUFHQW WR WKH *URVV 'RPHVWLF 3URGXFW *'3 DQG LV RQH RI WKH ODUJHVW HPSOR\HUV LQ ,QGLD HPSOR\LQJ PRUH WKDQ RQH PLOOLRQ ZRUNHUV ZKLFK LV DURXQG IRXU SHUFHQW RI WKH ,QGLDQ ZRUNIRUFH ,QGLD SURGXFHV  PLQHUDOV RXW RI ZKLFK  DUH PLQHUDO IXHOV  PHWDOOLF  QRQPHWDOOLF DQG  PLQRU PLQHUDOV 6HH 7DEOHV , ,, 7DEOH , 0LQHUDO 3URGXFWLRQ LQ ,QGLD 0LQHUDO ,URQ 2UH %DX[LWH &KURPLWH /LPHVWRQH &RDO &RSSHU 2UH        0LOOLRQ 7RQQHV               &$*5 &RPSRXQG $QQXDO *URZWK 5DWH                

5HPDUNV  RUH H[SRUWHG  RUH RU DOXPLQD H[SRUWHG 2UH H[SRUWHG  FHPHQW H[SRUWHG &RNLQJ FRDO H[SRUWHG &RSSHU PHWDO RU FRQFHQWUDWH H[SRUWHG

6RXUFH 7DWD (QHUJ\ 5HVHDUFK ,QVWLWXWH 7(5, 

7DEOH ,, ,QGLDV 3RVLWLRQ LQ WKH :RUOG LQ 7HUPV RI 3URGXFWLRQ 3URGXFW 3RVLWLRQ LQ :RUOG 3URGXFWLRQ 0LFD EORFNV DQG VSOLWWLQJ VW &RDO /LJQLWH %DU\WHV &KURPLWH UG ,URQ 2UH WK %DX[LWH 0DQJDQHVH RUH WK $OXPLQLXP WK &UXGH 6WHHO WK 6RXUFH *RYHUQPHQW RI ,QGLD 0LQLVWU\ RI &RPPHUFH ,QGXVWU\ ,Q  WKH WRWDO YDOXH RI PLQHUDO SURGXFWLRQ H[FOXGLQJ DWRPLF PLQHUDOV ZDV 5V  PLOOLRQ  PQ DW 5V   H[FKDQJH UDWH 7KHUH DUH PRUH WKDQ  PLQLQJ RSHUDWLRQV LQ WKH FRXQWU\ PRVW RI ZKLFK DUH RQ D YHU\ VPDOO VFDOH DQG  RI ZKLFK DUH XQGHUJURXQG LQ WKH QRQIXHO VHFWRU 7KH LQGXVWU\ LV GRPLQDWHG E\ JRYHUQPHQW FRUSRUDWLRQV RU 3XEOLF 6HFWRU 8QLWV  368V DV WKH\ DUH NQRZQ LQ ,QGLD ZKLFK HPSOR\ PRUH WKDQ  SHUFHQW RI WKH LQGXVWU\ ZRUNIRUFH 7KH PLQLQJ VHFWRU JUHZ DW DQ DYHUDJH DQQXDO UDWH RI  SHUFHQW EHWZHHQ  DQG  DQG RQO\  SHUFHQW EHWZHHQ  DQG  (FRQRPLF 6XUYH\  (IIHFWV RI 0LQLQJ RQ WKH (QYLURQPHQW LQ ,QGLD 7KH PLQLQJ VHFWRU LQ ,QGLD LV SODJXHG E\ VHYHUDO HQYLURQPHQWDO DQG KHDOWK DQG VDIHW\ UHODWHG SUREOHPV 6HYHUDO DFFLGHQWV KDYH WDNHQ SODFH LQ XQGHUJURXQG DQG VXUIDFH PLQHV OLNH FRDO DQG VWRQH PLQHV LQ WKH ODVW IHZ \HDUV ZKLFK KDYH NLOOHG VFRUHV RI PLQHZRUNHUV $Q H[DPSOH RI HQYLURQPHQWDO GDPDJH E\ D PLQLQJ FRPSDQ\ LQ ,QGLD LV WKH .XGUHPXNK ,URQ 2UH &RPSDQ\ /LPLWHG .,2&/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

VHFWRU 0RVW RI WKH LQFUHDVH LQ WKH SURGXFWLRQ RI PLQHUDOV ZLOO FRPH IURP RSHQ FDVW PLQHV LQ WKH IXWXUH ZKLFK ZRXOG OHDG WR D ORVV RI ODUJH WUDFWV RI IRUHVW DQG DJULFXOWXUDO ODQG (QYLURQPHQWDO /HJLVODWLRQ LQ ,QGLD 7KH RYHUDOO IUDPHZRUN RI HQYLURQPHQWDO OHJLVODWLRQ LQ ,QGLD LV VHW E\ WKH 1DWLRQDO &RQVHUYDWLRQ 6WUDWHJ\ DQG 3ROLF\ 6WDWHPHQW RQ (QYLURQPHQW DQG 'HYHORSPHQW LVVXHG E\ WKH 0LQLVWU\ RI (QYLURQPHQW DQG )RUHVWV 0R() -XQH 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 1RWLILFDWLRQ PDNHV DQ (,$ VWDWXWRU\ IRU  GLIIHUHQW DFWLYLWLHV PLQLQJ EHLQJ RQH RI WKHP 7KH (,$ QRWLILFDWLRQ DOVR LQFOXGHV GHWDLOV RI SURFHGXUHV IRU REWDLQLQJ HQYLURQPHQWDO FOHDUDQFH DQG IRU SXEOLF LQYROYHPHQW EHVLGHV VHWWLQJ WLPH VFKHGXOHV IRU GHFLVLRQ WDNLQJ 8QGHU WKH SURYLVLRQV RI WKH (,$ QRWLILFDWLRQ XQGHU WKH (QYLURQPHQW 3URWHFWLRQ $FW 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 HQFRXUDJH ODUJHVFDOH SULYDWH LQYHVWPHQW LQ WKH VHFWRU DQG LL DFKLHYH LQFUHDVHG H[SRUW RI PLQHUDOV LQ YDOXH DGGHG IRUP ,QLWLDOO\ DOO SURSRVDOV ZHUH FRQVLGHUHG RQ D FDVHE\FDVH EDVLV E\ WKH )RUHLJQ ,QYHVWPHQW 3URPRWLRQ %RDUG ),3% ,Q  WKH VHFWRU ZDV IXUWKHU OLEHUDOLVHG DV WKH DXWRPDWLF DSSURYDO URXWH IRU )', ZDV RSHQHG XS DQG IRUHLJQ HTXLW\ SDUWLFLSDWLRQ RI XS WR  SHUFHQW LQ PLQLQJ SURMHFWV DQG  SHUFHQW LQ VHUYLFHV LQFLGHQWDO WR PLQLQJ ZDV SHUPLWWHG ,Q )HEUXDU\  WKH 'HSDUWPHQW RI 0LQHV UHYLHZHG WKH VHFWRUDO JXLGHOLQHV LQ WKH PLQLQJ VHFWRU DQG PDGH D IHZ FKDQJHV EULQJLQJ DERXW IXUWKHU OLEHUDOLVDWLRQ LQ WKH VHFWRU 6HH %R[ ,,

%R[ ,, *XLGHOLQHV IRU )', LQ 0LQLQJ DQG 0LQHUDO 6HFWRU    SHUFHQW )', DOORZHG LQ H[SORUDWLRQ DQG PLQLQJ RI GLDPRQGV WKURXJK DXWRPDWLF URXWH )RU SURSRVDOV VHHNLQJ KLJKHU WKDQ  SHUFHQW )', WKH FDVHV ZLOO KDYH WR FRPH WR WKH ),3% IRU FOHDUDQFH   SHUFHQW )', DOORZHG LQ H[SORUDWLRQ DQG PLQLQJ RI JROG DQG VLOYHU DQG PLQHUDOV RWKHU WKDQ GLDPRQGV DQG SUHFLRXV VWRQHV PHWDOOXUJ\ DQG SURFHVVLQJ   SHUFHQW )', DOORZHG RQ WKH DXWRPDWLF URXWH IRU SURFHVVLQJ RI PLQHUDO DQG PHWDOOXUJ\  )RU WKH SHWUROHXP VHFWRU WKH SHUFHQWDJH )', SHUPLWWHG YDULHV IURP  SHUFHQW WR  SHUFHQW GHSHQGLQJ RQ WKH W\SH RI DFWLYLW\ )RU SHWUROHXP SURGXFWV PD[LPXP  SHUFHQW )', LV SHUPLWWHG 7KH DXWRPDWLF URXWH LV QRW DYDLODEOH  )RU FRDO DQG OLJQLWH XS WR  SHUFHQW )', SHUPLWWHG IRU WKH VHWWLQJ XS RI PLQHV IRU FDSWLYH FRQVXPSWLRQ )RU WKHVH FDVHV )', LV DOORZHG XS WR  SHUFHQW XQGHU WKH DXWRPDWLF URXWH VXEMHFW WR WKH FRQGLWLRQ WKDW VXFK LQYHVWPHQW VKRXOG QRW H[FHHG  SHUFHQW RI WKH HTXLW\ RI D 3XEOLF 6HFWRU 8QLW 368  )RU DWRPLF PLQHUDOV XS WR  SHUFHQW )', SHUPLWWHG LQ FHUWDLQ DFWLYLWLHV HJ PLQLQJ DQG PLQHUDO VHSDUDWLRQ YDOXH DGGLWLRQ SHU VH WR VXFK SURGXFWV DQG LQWHJUDWHG DFWLYLWLHV FRPSULVLQJ WKHVH WZR DFWLYLWLHV 6RXUFH *RYHUQPHQW RI ,QGLD 0LQLVWU\ RI &RPPHUFH ,QGXVWU\

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 8QIDYRXUDEOH ODERXU ODZV EXUHDXFUDWLF VORWK DQG FRPSOH[ UXOHV UHJXODWLRQV DUH KROGLQJ WKH LQYHVWRUV EDFN %HVLGHV ODFN RI SURSHU LQIRUPDWLRQ RQ WKH YROXPH DQG TXDOLW\ RI GHSRVLWV RI VRPH PLQHUDOV OLNH JROG LQ ,QGLD GR QRW PDNH VFDOH RI RSHUDWLRQV SURILWDEOH IRU ODUJH ILUPV

*UDSK , 6HFWRUZLVH

%UHDNXS RI )', DQG 7HFKQLFDO &ROODERUDWLRQ $SSURYHG $XJ  WR -DQ 
2WKHUV  )XHOV 

+RWHOWRXULVP 

)RRG3URFHVVLQJ,QGV

(OHFWULFDO (TXLSPHQWV 7HOHFRPPXQ 0HWDOOXUJLFDO ,QGV  LFDWLRQV 

7UDQVSRUWDWLRQ,QGXVWULHV  6HUYLFH6HFWRU 

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

HQYLURQPHQWDO SURWHFWLRQ ,Q ,QGLD DOVR PDQ\ ODUJH PLQLQJ FRPSDQLHV KDYH DGRSWHG HQYLURQPHQW IULHQGO\ SUDFWLFHV 6HH %R[ ,,,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

'HILFLHQFLHV LQ (,$ DQG WKH (QYLURQPHQWDO 0DQDJHPHQW 3ODQ (03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

6RXUFH 6'13 'HOKL 7KH %XVLQHVV /LQH 1RYHPEHU  

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

7KH ZULWHU LV 6HFUHWDU\ *HQHUDO RI WKH &876 &HQWUH IRU ,QWHUQDWLRQDO 7UDGH (FRQRPLFV (QYLURQPHQW DQG FDQ EH UHDFKHG DW ZZZFXWVRUJ 5HVHDUFK DVVLVWDQFH IRU WKLV SDSHU KDV EHHQ SURYLGHG E\ 0V 6DQFKLWD &KDWWHUMHH 5HVHDUFK $VVLVWDQW DW &876 5HIHUHQFHV  'U 9HHQD -KD  ,QYHVWPHQW /LEHUDOLVDWLRQ DQG (QYLURQPHQW 3URWHFWLRQ &RQIOLFWV DQG &RPSDWLELOWLHV ,QGLD $ &DVH 6WXG\ 'HOKL  *RYHUQPHQW RI ,QGLD 0LQLVWU\ RI &RPPHUFH ,QGXVWU\ 'HSDUWPHQW RI ,QGXVWULDO 3ROLF\ 3URPRWLRQ KWWSZZZQLFLQPLQHV  *RYHUQPHQW RI ,QGLD 0LQLVWU\ RI ([WHUQDO $IIDLUV KWWSPHDGHYQLFLQHFRQRP\IGLKWP  1LFN 0DEH\ DQG 5LFKDUG 0FQDOO\  )RUHLJQ 'LUHFW ,QYHVWPHQW DQG WKH (QYLURQPHQW )URP 3ROOXWLRQ +DYHQ WR 6XVWDLQDEOH 'HYHORSPHQW $ :RUOG :LOGOLIH )XQG8. 5HSRUW  2QHZRUOG  (QYLURQPHQWB,QGLD %DX[LWH 71&V *UDE 7ULEDO /DQG ZLWK ,PSXQLW\ KWWSZZZRQHZRUOGRUJLSVMXQHBBKWPO   5 . 3DFKDXUL DQG 5 . %DWUD HG  'LUHFWLRQV ,QQRYDWLRQV DQG 6WUDWHJLHV IRU +DUQHVVLQJ $FWLRQ IRU 6XVWDLQDEOH 'HYHORSPHQW 'HOKL 7DWD (QHUJ\ 5HVHDUFK ,QVWLWXWH 7(5,  6XVWDLQDEOH 'HYHORSPHQW 1HWZRUNLQJ 3URJUDPPH 6'131HZ 'HOKL KWWSVGQSGHOKLQLFLQUHVRXUFHVPLQLQJPLQLQJIUDPHKWPO  7RPH -RQHV DQG 5LFKDUG 0F1DOO\  3ROOXWLRQ IRU ([SRUW" 8QLWHG 1DWLRQV (GXFDWLRQDO 6FLHQWLILF DQG &XOWXUDO 2UJDQL]DWLRQ 81(6&2 KWWSZZZXQHVFRRUJFRXULHUBXNSODQHWHW[WKWP