gipf annual report

GIP

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nnua

l Re

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2014

GIPF Annual Report 2014

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5 Vision, Mission and Core Values 7 Corporate Governance Statement 12 Board and Committee Meetings attended 14 ChiefExecutiveOfficer’sReport 18 The Board of Trustees 23 The Executive Management Committee

Content

26 The Management Team of GIPF 32 Chairperson’sReport 35 Annual Financial Statements 43 StatementofResponsibilitybytheBoardofTrustees 44 StatementofResponsibilitybythePrincipalOfficer 45 IndependentAuditor’sReport


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VisionTobealeadingpensionfundandamodelcorporatecitizeninNamibia.

MissionTosafeguardandgrowtheFundforthebenefitofitsstakeholdersandNamibia.

Core Values

Integrity: Wewillalwaysbehonest,fair,transparentandtrustworthyineverythingwedo.

Service Excellence: Wewillstrivetodeliverthehighestqualityofservice(right,fastandhumane)toallour stakeholdersinaninnovative,professionalandrespectfulmanner.

Teamwork: Webelievethatteamsachievemorethanindividuals.Wethereforeundertaketoworktogether asateaminsupportofoneanotherinpursuitofourvision.


7CORPORATE GOVERNANCE STATEMENT

“Corporate governance is concerned with holding the balance between economic and social goals andbetweenindividualandcommunalgoals.Thegovernanceframeworkistheretoencouragetheefficientuseofresourcesandequallytorequireaccountabilityforthestewardshipoftheresources.Theaimistoalignasnearlyaspossibletheinterestsofindividuals,corporationsandsociety.”–SirAdrianCadbury,UK,CommissionReport:CorporateGovernance1992

SoundcorporategovernanceprovidesthebasisforGIPFtorealiseitsvision“tobealeadingpensionfundandamodelcorporatecitizeninNamibia”.

TheFund’sgovernancephilosophyisbasedonthePensionFund’sAct,1956(Actno.24of1956),theGIPFRulesof1999,theKingIIICodeofCorporateGovernanceof2009,theSouthAfricanFinancialServicesBoard’sPensionFundCircular130of2007/2008,theNAMFISACircularonPensionFundsCorporateGovernanceNo1of2003, theGIPFBoardCharter, termsof referenceofvariousBoardcommitteesandvariousothercorporategovernancepolicies,collectivelyconstitutingthecorporategovernanceframework.

1. THE BOARD OF TRUSTEESTheBoardofTrusteesgovernstheFundinaccordancewiththecorporategovernanceframeworkandisthuschargedwithahighleveloversightoftheFund’sstrategy,riskandorganisationalperformance.

1.1 Board CompositionTheBoardconsistsofninetrustees,whoareappointedintermsofsection10(1)oftheRulesoftheFund.Oftheninetrustees,threeareappointedbytheGovernment,threebythePublicServiceCommission,andtheremainingthreebyorganisedlabour(i.e.onebytheNamibianNationalTeachers’Union(NANTU)andtwobytheNamibianPublicWorkers’Union(NAPWU)).

1.2 DutiesThedutiesoftheBoardofTrusteesare:- to manage, control and administer the Fund;- toensurethatproperinternalcontrolsystemsareinplacetomitigatesignificantrisks facedbytheFund;

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- toestablishariskmanagementframeworkanditsreview;- toprovidestrategicandpolicydirectionforthemanagementoftheFund;- to receive regular management reports to monitor operational compliance;- toproposeamendmentstotheRulesoftheFund;- todeterminetheinvestmentpolicy,settingoutinvestmentguidelinesandperformancebenchmarksinlinewiththepolicyand- toestablishandmanagestakeholdersrelationships.

1.3 Board CommitteesThe Board ensures fiduciary effectiveness throughBoard committees, which assist it in discharging its duties and responsibilities. The Board is assisted by fivecommitteesnamely,- the Audit Committee; - theBenefitsandAdministrationCommittee;- the Investment Committee;- the Legal, Governance and Compliance Committee; and- theRemunerationandHumanResourcesCommittee.

TheCommitteesoperateunderasetofformaltermsofreferenceandthechairpersonofeachcommitteereportstotheBoardduringscheduledmeetings.

1.3.1 Audit CommitteeThecommitteeconsistsoffourmembers,oneofwhomisanindependentexternalmemberappointedonthebasisofhis/herexpertiseinfinanceand/orauditing.Themembersofthecommitteeduringthereportingperiodwere:MsE.Beukes(Chairperson),Ms.S.Kandere,MrG.MenetteandMrE.Hoveka(independentexternalmember).Theauditcommittee’smandateistoensureeffectiveinternalcontrolsandriskmanagementaswellaspromotetheintegrityoffinancialreportingintheFund.

Thespecificresponsibilitiesofthecommitteeincludethefollowing:(a) toreviewandrecommendtotheBoardofTrusteestheannualfinancialstatements;(b) todealwithmattersrelatingtointernalcontrol,accountingpolicies,reportinganddisclosure;(c) todealwiththeengagementofexternalauditorsanddeterminefeespayabletotheseauditors;(d) toreviewandapproveinternalauditpolicies,plans,reportsandfindings;(e) toevaluatetheperformanceofexternalauditors;(f) toreviewexternalauditplans,findingsandreports;and(g) toassisttheBoardinexercisingtheoversightofriskmanagementandgovernance.

TheCommitteemeetsonaquarterlybasis.

Thefollowingwerethenotablehighlightsofthecommitteeduringthereportingperiod–- SubmissionoffinancialstatementstotheRegulatorinduetime;- Timeousapprovalofthebudgetanditsimplementation;- RevisionoftheFNBSettlementFacilityLimit;- CorrectionoftheBankBalanceVariance;- Obtainingofanunqualifiedauditfortheyearended2013- ConsultationsonEnterpriseRiskManagement(ERM)Policy,ERMProceduresManualandStrategicRiskRegisterand- Consideration and approval of the Internal Audit Plan

1.3.2 Benefits and Administration CommitteeThecommitteeconsistsoffour(4)members.Themembersofthecommitteeduringthereportingperiodwere:MrRKamerika(Chairperson),MrHMootseng,MsE.SamsonandMsLNuugwedha.


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TheBenefitsandAdministrationCommittee’smandateistoensureasoundadministrativeframeworkfortheFundandanefficientmanagementanddistributionofmemberandbeneficiarybenefits.

ThespecificresponsibilitiesoftheCommitteeincludethefollowing:-(a) toreview,adviseandmakerecommendationsonmatterspertainingtoadministrativepoliciesoftheFund;(b) toreview,adviseandmakerecommendationsontheFund’sbenefitsfromtimetotime,onmatterspertainingtoguidelinesand processesondispositionofdeathbenefitsandtheactualdistributionofdeathbenefitsintermsofsection37CofthePensionFundsAct;(c) toadvise,reviewandmakerecommendationsonpensionincreasestotheFund(d) toreview,adviseandmakerecommendationsonmatterspertainingtotheprocurementofgoodsandservicesfortheGIPF;(e) todevelop,reviewandmakerecommendationstotheBoardfortheapprovalofthecommunicationpolicy,strategyandplans, thebrandstrategy,thesocialinvestmentprograms;and(f) toreview,adviseandmakerecommendationsonanyothermatterofageneraladministrativenaturewhichwarrantstheattention oftheBoardthroughitsCommittees.

Thefollowingwerenotablehighlightsofthecommitteeduringthereportingperiod:- Approvalofthepensionincreaseof7,5%forthefinancialyear2013/2014;- Introductionofpracticeonrecoveryofoverpayments;- ReviewoftheICTPolicyandStandards;and- ApprovaloftheIntegratedMarketingandCommunicationStrategy.

1.3.3 Investment CommitteeThecommitteeconsistsoffive(5)members.ThemembersofthecommitteeduringthereportingperiodwereMr.M.GaomabII(Chairperson),Ms.E.Samson,Ms.E.Beukes,Ms.K.Nuugwedha,Mr.R.KamerikaandMr.H.Iita.

TheCommittee’smandateistoguideandadvisetheBoardofTrusteesoninvestmentrelatedpoliciesandstrategies.Thespecificresponsibilitiesare:-(a) toactasaninterpretiveandadvisorybodyoftheBoardforinvestmentrelatedpoliciesandstrategies(b) toreceivemanagementreportsoninvestmentsandprovidedirectionbasedontheinvestmentpolicies;(c) tomonitorandevaluatetheimplementationoftheinvestmentrelatedpolicies;(d) toobtainandconsiderproposalsoninvestmentrelatedmattersfromexternalserviceprovidersandfrommanagement;(e) toassistmanagementintheformulationandreviewofinvestmentrelatedpolicies;and(f) toreporttoandadvicetheBoardonanyinvestmentrelatedmatter.

Thehighlightsofthecommitteeduringthereportingperiodwere:- FinalisationoftheCustodytender;- ReviewoftheAssetandLiabilityModel(ALM)Plan;- Initiation of the Core Satellite Manager Selection process;- RevisionoftheInvestmentPolicy;- Roll-overandrenewalofthecurrencyhedge;and- ProcurementofUnlistedInvestmentsValidationserviceproviders.

1.3.4 Legal, Governance and Compliance CommitteeThecommitteeconsistsoffour(4)members,oneofwhomisanindependentexternalmemberappointedonthebasisofhis/herexpertiseinlegal,governanceand/orregulatorycompliance.Themembersofthecommitteeduringthereportingperiodwere:Ms.K.Nuugwedha(Chairperson),Mr.M.GaomabII,Ms.EBeukes,andDr.S.Akweenda(independentexternalmember). ThemandateoftheCommitteeistoguideandadvisetheBoardonlegal,governanceandcompliancematters.

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Thespecificresponsibilitiesareto:(a) developandregularlyreviewthecorporategovernanceframework,whichincludestheBoardCharter,theBoardcommittees’termsofreference,thecode ofconduct,thecodeofethics,conflictofinterestpolicy,theBoard’sperformanceassessmentframework,thetrusteeremunerationpolicy,theBoard’s inductionandtrainingpolicy.(b) considerandrecommendallruleamendmentstotheBoard;(c) dealwithlegalriskmanagement,litigationandcomplexcontractsanddisputesinvolvingtheFund;(d) monitorandoverseetheFund’scompliancemanagementframework. Thehighlightsofthecommitteeduringthereportingperiodwere:- thereviewofthefollowinggovernancedocuments:boardcharter,fitandproperpersonquestionnaire,boardperformanceappraisalframework,acceptance oftrust,codeofethics,conflictsofinterestpolicy,giftspolicyanddelegationsofauthorityframework;- attendancebytheboardmembersofthein-housegovernancetrainingconductedbySouthAfricanretirementfundgovernanceexpert,MrJonathanMort;- developmentofICTgovernanceframework;- thefinalisationofNAC//GIPFarbitration.- thetransformationfrompaper-basedtoelectronicbasedcommunicationplatform.

1.3.5 Remuneration and Human Resources CommitteeThecommitteeconsistsoffive(5)members.Themembersofthecommitteeduringthereportingperiodwere:Mr.HeinrichIita(Chairperson),Ms.ElsieBeukes,Mr.RudolphKamerika,Ms.SarafinaKandere,Mr.HubertMootseng.

TheCommittee’sprimarymandateistoguideandadvisetheBoardonhumancapitalissuesandremunerationoftheTrustees,executivemanagementandotherstaffmembers.

Thespecificresponsibilitiesofthecommitteeare:-

(a) toreview,consider,andmakerecommendationsonmatterspertainingtoremunerationoftheBoardofTrustees,managementandstaff;and(b) toreview,adviseandmakerecommendationsonhumancapitalissuespertainingtotraininganddevelopment,recruitmentandselection,industrial relations,organisationaldevelopment,strategicplanning,successionplanning,affirmativeaction,performancemanagementandotherhumancapital issues.

Thehighlightsofthecommitteeduringthereportingperiodwere:- therecruitmentoftheGM:MarketingandCorporateCommunication- thereviewofthenewstrategicplan(2013–2018)andre-alignmentoftheorganisationalstructureaccordingly;- theapprovalofthePerformanceManagementPolicyandProcedures- theapprovaloftheMonetaryIncentivesStructure;- theapprovalofHealthandSafetyPolicy;- thecompletionofanorganisation-widejobevaluationandgradingexercise.- approvalofthetrusteeremunerationincrease.

2. OTHER NOTEWORTHY GOVERNANCE MATTERS

2.1 Remuneration paid to trustees and executive managementTheGIPF’sremunerationphilosophyisfoundedonthepremisethat,remunerationlevelsshouldbesufficienttoadequatelycompensatetrusteesfortheirtimeandeffortdevotedtothebusinessoftheFund.

IntermsoftheBoardRemunerationPolicytheremunerationismadeupofacombinationofretainerandpermeetingfees.


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2.2 Conflicts of InterestsTheFundhasaConflictsofInterestPolicyinplaceandalltrusteesandstaffareboundbythepolicy.TheconflictsofinterestspolicyisintendedtoenablethetrusteesoftheFundtorecogniseanddisclosesituationsofconflictsandensurethatsuchsituationsareappropriatelymanaged,resolvedoravoided.

Trustees are required to disclose their shareholdings as well as other roles (directorships, trusteeships, partnerships etc.) in business entities at leastannuallyandinformtheBoardwhenanychangesoccur.TrusteesarealsorequiredtoinformtheBoardtimeouslyofconflictsofinterestorpotentialconflictsofinterestthattheymayhaveinrelationtoparticularitemsofbusinessandareobligedtorecusethemselvesfromdiscussionsordecisionsinrelationtosuchmatters.

Duringthereportingperiod,noneofthetrusteeshadaninterestincontractsorarrangementsenteredintobytheFund.

2.3 Corporate Secretary and Governance AdviceTrusteeshaveunlimitedaccesstotheFund’scorporatesecretary,EscherLuandawhoactsasanadvisorongovernanceandethicalpracticeswithintheFund.Thesecretaryisresponsibleforinductionandon-goingtraininganddevelopmentoftrusteestoensurethattheysettlewellintheirresponsibilitiesandensuringthattrusteesarekeptabreastofrelevantdevelopmentsincorporategovernance.

2.4 Code of Conduct and EthicsTheBoardofTrusteeshasadoptedacodeofconductandethicstounderscoregoodethicalbehaviour.GIPFiscommittedtoahighstandardofintegrityinallitsdealingswithmembersandotherstakeholders.Itexpectshighstandardsfromitstrustees,managementandotheremployeesandrequiresthemtoconductbusinesshonestlyandinaccordancewithbestpracticestandards.

2.5 Board EvaluationTheBoardofTrusteesunderwentaperformanceevaluationduringtheyearunderreview.TheexercisewasintendedtoascertaintheeffectivenesswithwhichtheBoarddischargesitsmandateandmattershighlightedintheassessmentaretobeaddressedduringtheyear2014/2015. 2.6 InsuranceAdequatetrusteeandofficers’liabilityinsurancecovertothetuneofN$40millionwastakenoutbytheFund.Noclaimsundertherelevantpolicywerelodgedduringtheyearunderreview.

2.7 Stakeholder Relationship ManagementTheFundrecognisesthatgoodstakeholdermanagementisanessentialfeatureofsoundcorporategovernance.TheFundsharespertinentinformationrelatingtomajorprojects,growth,assetsizeandothermajordevelopmentsatanannualstakeholders’eventaswellasthroughtheprintandelectronicmedia.TheFundalsomaintainsregularengagementwithkeystakeholders,liketheOfficeofthePrimeMinister,thePublicServiceCommission,theinvestmentmanagementcommunity,thePensioners’Association,members,memberorganisations,organisedlabourandthegeneralpublicatlarge.

TheFundalsohostedanAnnualStakeholdersDinnermeetingduringOctober2013wherepertinentdevelopmentsregardingtheFundweresharedwithmajorstakeholders.

2.8 Internal Control EnvironmentTheBoardhasoverallresponsibilityfortheFund’ssystemofinternalcontrolandisaccountableforreviewingitseffectiveness.InternalcontrolsystemsaredesignedtomanageriskswithinthebusinessratherthantotallyeliminatethepotentialfailuretoachievetheFund’sobjectives.Inevitably,theycanprovideonlyreasonableandnotabsoluteassuranceagainstmaterialmisstatementorloss.TheboardisextremelyconsciousoftheimportanceoftheFund’ssystemofinternalcontrolsandattachesahighprioritytomonitoringtheireffectivenessanddevelopingtheminlinewithbestpractice.

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2.9 The system of internal controlTheboardhasdelegatedtoexecutivemanagementtherequirementforoversight,establishmentandimplementationofappropriatesystemsofinternalcontrol.TheAuditCommitteecontinues,throughregularreportsbytheInternalAuditfunctionoftheFund,tomonitortheinternalcontrolsystems.

2.10 Risk GovernanceTheFundhasestablishedanenterprise-wideriskmanagementprocess.ExecutivemanagementanddepartmentsareresponsibleforthemanagementofrisksacrosstheFund.TheriskregistersetsouttheprocessforcapturingallrisksrelevanttotheFund.ExecutiveManagementisresponsibleforthecollationofthisinformationandreportingthroughtheAuditCommittee.ExecutivemanagementisentrustedtoensurethattheEnterpriseRiskManagementprocessisembeddedatalllevelsandoverseenindependentlyandobjectively,atanappropriatelevel.TheAuditCommitteeandtheInternalAuditDepartment,keepsundercontinuousreviewtheadequacyandeffectivenessoftheFund’senterpriseriskmanagementprocessandthesystemofinternalcontrol.WhenplanningtheirinternalauditsoftheFund,InternalAudittakesintoconsiderationissuesraisedintheriskregister.

3. Trustee Networking, Training, and Capacity Building ActivitiesDuringyearunderreview,anumberoftrusteesattendedtraining,networkingandcapacitybuildingevents: 3.1 CFA Institute Annual ConferenceMrHeinrichIitaattendedtheCFAInstituteAnnualConferencefrom19-22May2013attheSandExpoandConventionCentre,MarinaBaySandsinSingaporeaspartofnetworkingandcapacitybuildingofthetrustees.

3.2 Fund Forum InternationalMsESamson,MrRKamerikaandMsKNuugwedha,attendedtheFundForumInternationalinMonaco,Francefrom24-28June2013.

ABBREVIATIONSGRN - GovernmentoftheRepublicofNamibiaPSC - PublicServiceCommissionNANTU - NamibiaNationalTeachers’UnionNAPWU - NamibiaPublicWorkers’UnionBOT - Board of TrusteesAC - Audit CommitteeBAC - BenefitsandAdministrationCommitteeIC - Investment CommitteeRHRC - RemunerationandHumanResourcesCommitteeLGCC - Legal, Governance and Compliance Committee

4. ATTENDANCE OF BOARD AND COMMITTEE MEETINGS: 01 APRIL 2013 – 31 MARCH 2014

Trustee Name Date of Appointment Appointing Authority Meetings Attended BOT AC BAC IC LGCC RHRC

E Samson 19 August 2008 GRN 22 - 10 9 - -M Gaomab II 10 August 2011 GRN 15 3 - 9 3 -K Nuugwedha 10 August 2011 GRN 22 - 7 8 3 -G Menette 01 January 2013 PSC 17 3 - - - 5H Mootseng 01 October 2010 PSC 16 - 9 - - 7E Beukes 13 April 2012 PSC 19 4 - 6 2 -R Kamerika 26 April 2010 NANTU 21 - 10 - - 11H Iita December 2011 NAPWU 19 - - - - 11S Kandere 28 October 2010 NAPWU 7 1 - - - 1E Hoveka 17 April 2003 Independent - 1 - - - -S Akweenda 07 February 2012 Independent - - - - 3 -


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CHIEF EXECUTIVE OFFICER’S REPORT

TheFundexperiencedsomeremarkablegrowthduringthereportingperiodmainlyattributedtogrowthinContributionreceiptsandinvestmentreturns.ThecontributingmemberstotheFundduringtheperiodunderreviewstoodat92 886.Thismembership isbackedupbyanassetbaseofmore thanN$77.1billionwithanequivalent level of liabilities andreserves.BasedonthefactthattheFund`sactuarialvaluationisbeingperformedeverythreeyears,itsanticipatedthattheaccuratelevelofactuarialliabilitieswillbedeterminedwiththenextvaluationcoveringtheperiodending31March2015.ThelatestactuarialvaluationfortheFundwasasof31March2012,ThefollowingelementsoftheFund`soperationdeserveacloserlook.

1. MEMBERSHIP AND ANNUITANTS

Theactivemembershipofthefunddecreasedduringtheperiodunderreview,eventhoughatotalof2138newmemberswere admitted to the Fund. This picture is attributed to the exits recorded throughwithdrawals, retirement, death andretrenchment.Atotalof3333exitshavebeenrecorded.Ontheotherhand,theFundadded1864annuitantsduringtheperiodunderreviewtobringthetotalnumberofannuitantsto57 407(Active:30402;Non-active:27005).

ThegraphicalpresentationoftheFund`smembersandannuitantsforthelastsixyearsispresentedbelow:

Membership and Annuitants

Annual average decline in active membership is 1.27% while the annuitants increase by 3%.

100000

90000

80000

70000

60000

50000

40000

30000

20000

10000

0 2009 2010 2011 2012 2013 2014

Active Members

Annuitants

David NuyomaChiefExecutiveOfficer/PrincipalOfficer


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2. FINANCIAL HIGHLIGHTS

2.1 Accumulated Reserves

TheFund`sreserveincreasedbymorethanN$13.950billiontototalN$76.430billionattheendoftheperiod.ThegrowthintheFund`sreserveincreasedby22.3%whiletheliabilityontheotherhandwasmaintainedatthesamelevelasthepreviousfinancialyear.ThegrowthintheFund`sreserveisdepictedonthegraphhereunder:

Historical Fund Reserves

The liability remained constant during the last 3 years due to the fact that actuarial value for the fund is determined only after three year cycle.

2.2 Contributions received and benefits paid

ThecontributionstotheFundcompriseofparticipatingemployers`andactivemembers.Duringtheperiodunderreview,contributionsincreasedbyN$454millionfromtheprioryeartoN$2.601billion.Thisrepresentsanincreaseof21%incomparisontothecontributionsreceivedduringthepreviousfinancialyear.

Theincreasewasmainlyattributedtothepublicservicesalaryincreaseandgradingrelatedadjustmentsbytheemployer.Thebenefitspaymentontheotherhandincreasedby4.8%incomparisontothepreviousyear’stotalbenefitspaid.AtotalofN$1.615billionwaspaidasbenefitsduringtheyearunderreview,translatingintoatotalincreaseofN$73.459millionmorethanbenefitspaidduringthecorrespondingperiod.

Similarly,theincreaseinbenefitspay-outisattributedtotheannualsalaryincreaseofferedbytheemployeraswellasthenewadditionof1864newannuitantsaddedduringtheperiod.

Contributions received and Benefits paid during the last six years

For the last 6 years, contributions posted an average increase of 16% while benefits payments posted an average increase of 10%.

90

80

70

60

50

40

30

20

10

0 2010 2011 2012 2013 2014

BILL

IONS

3 000 000 000

2 500 000 000

2 000 000 000

1 500 000 000

1 000 000 000

500 000 000

0 2009 2010 2011 2012 2013 2014

Contribution received

Benefits Paid

CONTRIBUTIONS VS BENEFITS PAID

N$

1 166 616 000 1 376 764 000 1 655 283 000 1 926 873 000 2 147 596 000 2 601 080 340

1 092 186 000 1 083 833 000 1 333 878 000 1 254 157 000 1 541 932 000 1 615 391 369

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TheFund`scontributionratiooverbenefitspaymentsshowedadecreaseof10%duringtheperiodwhiletheadministrativeexpenditurealsodeclinedby1%.Theprofitabilityratiohereunderreflectsthetrendforthelast6years.

Profitability Ratio during the last six years

The Fund` spending level on benefits was 62% of contribution received while administrative expenses were at 5% for the period under review. The period surplus margin increase by 10% to end at 33% (2013:23%) for the period ending 31 March 2014

2.3 Cost of administration

Theadministrationexpenseasapercentageofpensionableremunerationdecreasedmarginallyfrom1.29%reportedduringMarch2013to1.19%asatMarch2014.ThisfollowedanadoptionofapolicytolinktheFund’scosttoservetolevelof1.50%ofpensionableremunerationduring2013/14financialyearandtherebymaintainingtheoperationalexpenditureswithintheadoptedceiling.

3. Fund Solvency

Solvencyratioisakeymetricusedtomeasuretheabilityofacompanytopayitsdebtandotherobligationswhenrequired.Generally,anacceptablesolvencylevelvariesfromindustrytoindustry,butasageneralruleofthumb,asolvencyratiohigherthan20%isconsideredtobefinanciallysound.Iftheratioistoolow,itcanbeconsideredtocarryingasignificantriskofpossibledefaultingondebtobligation.

Graphicalpresentationofthesolvencyratioforthepast6years:

The GIPF solvency ratio as of March 2014 equals to 41%, an improvement of 5% if compared to the corresponding period of the last financial years.

ThesolvencyratiowouldhoweverbedifferentiftheliabilityoftheFundchangeswiththeanticipatedactuarialvaluationthatwouldcoverthecurrentcyclethatends31stMarch2015.

60%

50%

40%

30%

20%

10%

0%

-10%

-20%

-30%

SOLVENCY RATIO

RATIO

2009 2010 2011 2012 2013 2014

Contribution received

Benefits Paid

1 166 616 000 1 376 764 000 1 655 283 000 1 926 873 000 2 147 596 000 2 601 080 340

1 092 186 000 1 083 833 000 1 333 878 000 1 254 157 000 1 541 932 000 1 615 391 369

100%

80%

60%

40%

20%

0%

-20%

PROFITABILITY RATIO DURING THE LAST SIX YEARS

2009 2010 2011 2012 2013 2013

Benefits / Contributions

Surplus margin

Admin. / Contributions


174. Stakeholders’ Management

Theyearunderreviewrecordedanincreasedpaceandvolumeofstakeholders’engagementsinlinewithourstrategytoimproveonthisscore.Allkeystakeholdersof the Fundwere consulted for the purpose of attaining commongroundon strategicmatters of the Fund. These consultationswere about investments, rulesamendments,regulatorymatterstomentionbutafew.Goingforwardweintendtoachievemoreinthisareaasrequiredbygoodgovernance.

5. Administrative Efficiency

Competitiveadvantageofanypensionschemedependsontheeffectivenessoftheadministrationsystems.Theperiodunderreviewhasseeninnovationsintermsofoperatingsystemsaswellasinthedeploymentofrelevanthumanresourcesinkeyareasofourstructure.InparticulartheFundinnovatedonmeasurestoreduceturn-aroundtimesinbenefitspaymentandweareexcitedtoreportthatclaimsarebeingpaidmuchfasterthaneverbefore.Theyearunderreviewalsosawthere-commencementofanICTprojectbetweentheFundandHomeAffairsministrytohavememberinformationsharingplatform.IntermsofHumanresources,GIPFnowhasastaffcomplementof201comparedto186reportedduringthelastfinancialyear.TheFundcontinuestooptimiseonthisscoreinordertoachieveareasonablerateofservicedeliverytoourmembers.

6. Institutional Rebranding

Theyearunderreviewmarkedthebeginningofthecorporatemake-overinlinewithourimperativestrategytoimprovetheimageandreputationoftheinstitution.Incompetitiveindustries,normalbusinessrebrandingtakesplaceeverysevenyearsifthereisnootherbusinessmatterthatmakesitinevitable.GIPFasaninstitutionhasgonethroughmanytransformationssinceitsinception23yearsagointermsofstrategicdirection,management,productsofferingandpositioninthemarkettomentionbutafew.Despitethistransformation,theFund’scorporatebrandremainedthesamethroughout,displayinganon-progressivepostureoftheinstitution.ArevampedcorporatebrandwasdeemedasaconfidencebuildinginterventiontostaffmembersandwouldinfluencepositivethinkingamongtheFundstakeholders.IntheendwehopetoachievereasonablebrandequitythatsuitsourvisiontobealeadingpensionFundandamodelcorporatecitizeninNamibia.Thefirsttwophasesofthere-brandingprocesswhichentailedstakeholders’perceptionauditandbrandconceptualizationwerefinalisedduringtheperiodunderreview.Theactualroll-outofthenewbrandwillbeconductedinthenextfinancialyear.

........................................................................David NuyomaChiefExecutiveOfficer/PrincipalOfficer

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The Board of Trustees governs the Fund in accordance with the corporate governanceframeworkoftheFundandisthuschargedwithahighleveloversightoftheFund’sstrategy,riskandorganisationalperformance

THE BOARDOF TRUSTEES


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Mr.DavidNuyoma ChiefExecutiveOfficer/PrincipalOfficer

Mr.MiheGaomabIITrustee

Adv.EllaineSamsonChairperson

Mr.HeinrichIitaTrustee

Mr.RudolphKamerikaTrustee

Mr.HubertMootsengTrustee

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Mr.GomsMenettèTrustee

Ms.SarafinaKandereTrustee

Ms.ElsieBeukesTrustee

Ms.KandaliNuugwedhaTrustee

Mr.ErastusHovekaSpecialistindependentexternalmember:Audit Committee

Dr.SakeusAkweendaSpecialistindependentexternalmember:Legal, Governance and Compliance Committee

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THE EXECUTIVEMANAGEMENT

COMMITTEE

Mr.DavidNuyomaChiefExecutiveOfficer

Mr.ElvisNashilongoGeneralManager:Marketing&CorporateCommunication

Mr.ConvilleBritzGeneralManager:Investments

Mrs.MilkaMungundaGeneralManager:Operations

Mr.DanielNdaraGeneralManager:Finance

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Mr.OnnoAmutenyaGeneralManager:MIS

Mr.ErnestLiswanisoGeneralManager:HumanResources

Mr.ChristopherMukubondaManager:InternalAudit

Mr.Melki-zedekUupindiManager:LegalServices

Mr.EscherLuandaManager:CorporateGovernance

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THE MANAGEMENTTEAM OF GIPF


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Mr.Gotlieb!NarusebManager:IT

Mr.LeeviTshooparaManager:ListedInvestments

Mr.MbatiTjihoRiskOfficer

Mrs.HilkkaMbakoManager:ClientServices

Mrs.AnnaHambudaManager:Data&RecordManagement

Mr.AmosKambondeManager:Marketing

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Ms.DaylightNameneManager:CorporateCommunication

Ms.VenessaKangueehiManager:BenefitsProcessing

Ms.GetrudeXawesManager:HumanResources

Mr.EbsonHoesebManager:OrganizationalDevelopment&IndustrialRelations

Mr.SelbySibeyaManager DC Funds

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Mrs.SaraMezui-EngoManager:PrivateEquity/UnlistedInvestments

Mrs.AinoShipikiManager:Finance

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CHAIRPERSON’S REPORT

TheyearunderreviewhasseentheFund’sassetsgrowingfromN$63bnfrom2013toN$77bnbyendofMarch2014.Thissalientandstablegrowthrepresentsa21%increaseinassetsundermanagement.TheGIPFcontinuestorecordimpressivereturnsyearonyear–asthesinglebiggestpensionfundinNamibia.TheFundhadperformedwellrelativetootherpensionfundsintheregion.Further,aninterestingobser-vationhasalsobeenmadetothefactthattheNamibianpensionfunds’industryhasaboutN$103billionofassetsundermanagementofwhich71%belongstoGIPF.ThisreflectsthepositionGIPFoccupiesinthelocalretirementindustryaswellastheNamibianeconomyatlarge.

ThisisthereforeapremierinstitutionthatattractspublicinterestsandourresponsibilitywasandstillistonavigatethroughtheseinterestsforthebenefitofNamibiaandherpeople.From this perspective, it is important thatwe recognisewhat a very important role the Fundplays inshapingthediscourseofournationaleconomicagenda,especiallyontheinvestmentpotentialwithinNamibiaandbeyond.

Asawell-diversifiedpensionFundthatisinvestedglobally,includingtheneweconomicfrontier,Africa,weremainedfocusedaswewatchedtheworldgothroughmajoreconomicuncertaintiesincludingpossibili-tiesoftaperingoffinancialstimulusbytheUSFederalReserve.Asaconsequence,theFundisinvestedinNamibia,Africa,theemergingeconomiesanddevelopedmarkets(offshore).

Wecontinuetobequiteproudoftheinvestmentresultswewereabletoachievesinceweadoptedthespecialistmandateapproachcomparedtothebalancedmandateapproach.

Adv. Ellaine SamsonChairperson:BoardofTrustees


33

Thegraphbelowindicatesthatwewerestillabletoachievesecondquartileperformancedespitetherecentconditionsdominatingtheinvestmentlandscape.

OneofthehighlightsduringtheyearunderreviewisthegradualrecoverydrivenbyemergingmarketeconomiesaswellasthebiggereconomiesliketheUSandtheUK.WesawhowthisbegantoleadtothetaperingoftheQuantitativeEasing(QE)intheUS,whichwasimplementedtowardstheendofthisreportingperiod.Tothisextent,theGIPFinvestmentstrategyremainedresilienttomarketconditionsanduncertaintiesandwebenefitedfromtheinefficienciesthatexistedinthemarket.

Asrequiredintermsofourstrategy,wecontinuedtowatchwithkeeninterestthegeopoliticaleventswhichshapedthemarketsintheregionandbeyond.Otherrisksalsoexisted,liketheEurozonegoingthroughapersistentrecoveryphasesincethestartofthesovereigndebtcrisisin2008.

Inmitigatingtheserisks,optimizationoftheFund’sportfoliostructurehasbeendeemedtobeessential.TheBoardofTrusteeshadcontinuedtoholdtheviewthatassetsundermanagementmeannothingiftheyarenotdeployedfurtherthanmereprovisionofpensionbenefits.

Inthiscontext,itgoeswithoutsayingthatnationalsavingsshouldbeutilizedtostimulatedomesticeconomythroughappropri-ategovernancestructures.InanticipationoftheamendmentstoRegulation28,GIPFprepareditselftoensurecompliance.

Ofnoteisourinvestmentsintosecondarylistings(dual)onthelocalstockexchange,theNamibianStockExchange–andherewearesatisfiedthattheFundwillremaininvestedwithintheprescribedlimitsexpectedtobeinthenewregulation.Theexpectedreducedlimitstoduallistingswillmakeitnecessaryforpensionfunds,especiallytheGIPFtodevelopdifferentstrategies,whilstfocussedontheobjectiveof theFund, thatof returninggoodgrowth.Havingsaidthat,onewouldhowever like toseemoreprimary listingshappeningontheNSXinorder tomakethe localcountersmoretradableandensure liquidity inthelocalmarket.

End Date of Rolling Period

Gipf vs NAM Balanced Funds: 12 Months Rolling Outperformance Relative to the Universe Average for the Period Ended March 2014

12 M

onth

s Roll

ing O

utpe

rform

ance

(%)

34

Toachievethelatter,theGIPFwishestoseemoreprivatecompaniesoptingforlistingasameanstoraisenewcapitalandtounlockvalueforcurrentinvestors.Thesameholdstrueforsomeofthesemi-governmentalentities.

Ontheunlistedinvestmentfront,theGIPFstartedinvestingintheunlistedspaceandprivateequityin2010followingtheadoptionofthenewUnlistedInvestmentPolicy.

ThispolicywasadoptedtoensurethattheGIPFcontinuedtoplayits’cardinalroleasthelargestinstitutionalinvestorinNamibia,bymappingoutitsplaceinthedevelopmentalagendaofthecountry.TodatetheGIPFhasinvestedsignificantlybyprovidingdevelopmentalcapitalthroughvariousunlistedmanagersandwillcontinuetodoso.

TheGIPFcanconfidentlyshowthetypeofdevelopmentsithasfinancedacrossthebreadthandwidthofNamibia,aswellasthecatalyticeffectsuchinvestmentshashadinallavenueswheresuchinvestmentsweremade.ManyofthesemeaningfulcontributionsmadetotheNamibianeconomyandthedevelopmentofthedifferentinfrastructureoftownsweredonepriortotheenactmentofRegulation29ofthePensionFundsAct.IamproudtoindicatethattheyearunderreviewhasseenaboutN$950millionbeinginvestedinunlistedprojects,themajorityofwhichwasinjectedintopropertyandthedevelopmentofinfrastructure.IntryingtosafeguardtheFund’sassets,wehaveputinplaceinvestmentgovernanceinconjunctionwithourassetmanagerswherewehavecommencedwithaprojecttosupporttheincubationoflocalassetmanagementcapacityinNamibia.

We have also through fruitful constructive engagement and consultation developed clear cut unlisted investment guidelines that delineates the implementation of clearrolesandresponsibilitiesofwhatthefinancialindustry,inparticularwhattheunlistedinvestmentmanagersareexpectedtodoandwhattheFundundertheesteemedregulatoryguidanceofNAMFISAisexpectedtodo.

Lastbutnotleast,IwouldliketoexpresstheFund’sgratitudetowardsallourstakeholdersforconstructiveengagementswehadduringtheperiodunderreview.GIPFshallcontinuemoreeffectivestakeholderengagementsonissuesofmutualinterestforthebenefitofthosewhoentrustuswiththeirlifesavings.Further,theFundwishestokeepmoreinclusiveengagementswiththeregulator,NAMFISAtoensureprudentialandsupervisorycompliance.

Inconclusion,IamgratefultomyBoardofTrusteesfortheirsustainedcontributiontothebusinessoftheFund.WhileonapersonalnoteIwishtoshowmyapprecia-tionfortheconfidenceandtrusttheyhaveshowninmyabilitytopresideovertheFundasChairmanoftheBoardfortheensuinghorizon.Similarly,IwishtoapplaudmanagementforthediligentexecutionandimplementationoftheGIPFstrategiesasdirectedbytheBoard.Aswecontinuedeliveringonthepensionpromise,whichissacrosanct,wewouldliketobeviewednotonlyasafinancialanchorinNamibia,butasagoodcorporatecitizenthattakesitsrightfulplaceatthecentreoffinancial,economicandsocialdevelopmentofourcountry.

........................................................Adv. Ellaine Samson Chairman:BoardofTrustees


35

Nameofretirementfund:GOVERNMENTINSTITUTIONSPENSIONFUNDNAMFISAregistrationnumber:25/7/7/67Fortheyear:01/04/2013to31/03/2014

ANNUAL FINANCIAL

STATEMENTS

36

REGULATORY INFORMATION For the period ended 31 March 2014

Registered office of the fund Postal address: P. O. Box 23500, WindhoekPhysical address: GIPF House, Corner of Dr Kenneth David Kaunda & Goethe Streets, Windhoek

Financial reporting periods Current: 01/04/2013 to 31/03/2014Previous: 01/04/2012 to 31/03/2013

Ms. E. Samson E 19/08/2008 11/08/2011 (Chairperson) (17/08/2013 appointed as chairperson)Mr. H. Mootseng EE 01/10/2009 01/10/2012 Ms. M. Hummel EE 16/04/2006 11/04/2009 12/04/2012Ms. S. Shidute EE 01/01/2007 31/12/2009 31/12/2012Mr. R. Kamerika U 26/04/2010 27/04/2013Ms. S. Kandere U 28/10/2010 Mr. M. Gaomab II E 10/08/2011 Ms. K. Nuugwedha E 10/08/2011 Mr. H. Iita U 23/11/2011 Ms. E. Beukes EE 12/04/2012Mr. G Menette EE 01/01/2013

* ‘E’ denotes appointed by the Government of the Republic of Namibia * ‘EE’ denotes appointed by the Public Service Commission* ‘U’ denotes appointed by organised labour

Fund officer Principal officer Previous Acting Principal officer

Full name: Mr. D. Nuyoma Mrs. M. DaxPostal address: PO Box 23500, Windhoek PO Box 23500, WindhoekPhysical address: 1st Floor, GIPF House 1st Floor, GIPF House Corner of Dr Kenneth David Kaunda Corner of Dr Kenneth David Kaunda & Goethe Streets & Goethe StreetsTelephone number: 061-2051201 061-2051201Email address: [email protected] [email protected] appointed: 01 January 2013 01 October 2011Term ended: N/A 31 December 2012

Name Appointing Date Date Term ended Authority* appointed re-appointed


37

Professional service providers Actuary/Valuator Auditors

Full name: Humanity Employee Benefits (Pty) Ltd PricewaterhouseCoopersPostal address: PO Box 4754, Windhoek PO Box 1571, WindhoekPhysical address: Ground Floor, MVA Centre 334 Independence Avenue, WindhoekTelephone number: 061-2051376 061-284 1000Qualifications: Society of Actuaries of Namibia (SAN), Registered Accountants and Auditors Actuarial Society of South Africa (ASSA), Chartered Accountants (Namibia) Institute of Actuaries, UK Date appointed: 01 December 2004 06 February 2013

Benefit administrator Investment advisors

Full name: Government Institutions Pension Fund RisCura Solutions (Pty) LtdPostal address: PO Box 23500 Windhoek PO Box 27449, Windhoek, NamibiaPhysical address: GIPF House, Corner of Dr Kenneth 2nd Floor Heritage Square Building David Kaunda & Goethe Streets Corner of Lindequist and Robert Mugabe AvenueTelephone number: 061-205 1111 061-410350Date appointed: 01 January 2013 23 October 2008Registration number: N/A 1999/010296/07

Investment managers Investment managers

Full name: Allan Gray Namibia (Pty) Ltd Investec Asset Management (Pty) LtdPostal address: PO Box 230 Windhoek PO Box 3018 WindhoekPhysical address: 1st Floor Heritage Square Building Ground Floor Heritage Square Building Unit 2, Corner Lindequist & Robert Corner Lindequist & Robert Mugabe Avenue, Windhoek Mugabe Avenue, WindhoekTelephone number: 061-22 1103 061-389 510Date appointed: 29 November 1996 10 November 1998Registration number: 96/212 96/0045


Full name: Namibia Asset Management (Pty) Ltd Old Mutual Asset Managers (Pty) LtdPostal address: PO Box 23329 Windhoek PO Box 165, WindhoekPhysical address: 1st Floor, KPMG House 10th Floor, Mutual Tower Building 24 Orban Street, Klein Windhoek Independence Avenue, WindhoekTelephone number: 061-275700 061-299 8000Date appointed: 18 September 1996 14 October 1998Registration number: 97/397 94/463

*Old Mutual Asset Managers (Pty) Ltd also serves as unlisted investment managers for the Tunga Real Estate Fund and the Expanded Infrastructure Fund.

REGULATORY INFORMATION - CONTINUEDFor the period ended 31 March 2014

38

Professional service providers (continued)


Full name: Prudential Portfolio Managers (Pty) Ltd Momentum Asset Management Namibia (Pty) Ltd (previously known as RMB Asset Management (Pty) Ltd)Postal address: PO Box 25743 PO Box 3785 Windhoek WindhoekPhysical address: 6 Feld Street 4th Floor, Millennium Crown Building Windhoek Corner of AB May Street & Robert Mugabe Avenue WindhoekTelephone number: 061-256 166 061-299 8012Date appointed: 1 March 2007 1 March 2007

Registration number: 1996/185 2003/781

*Investment managers Investment managers

Full name: Sanlam Investment Management (Pty) Ltd Sovereign Asset Management (Pty) LtdPostal address: PO Box 23081 PO Box 22378 Windhoek WindhoekPhysical address: 4th Floor, Sanlam Centre 94 Nelson Mandea Avenue 154 Independence Avenue Klein Windhoek Windhoek WindhoekTelephone number: 061-274 100 061-220 743Date appointed: 20 May 1997 08 February 2001Registration number: 99/107 2000/551


Full name: Wellington Management International Ltd Marathon Asset Management LLPPostal address: N/A N/APhysical address: Cordinal Place, 80 Victoria Street Orion House London W1J 8LA 5 Upper Street Martin’s Lane United Kingdom London WC2H 9EA United KingdomTelephone number: +44 (0) 20-7339-8800 +44 (0) 20 7497 2211Date appointed: 01 July 2005 10 February 2010Date resigned: 12 December 2012Registration number: 801-15908 OC305964


Full name: South Suez Capital (Pty) Ltd All Season Capital Management (Pty) LtdPostal address: N/A N/APhysical address: Suite 104, Grand Bay Business Park Grand Bay Business Park Air Grand Bay Road Air Grand Bay Road Grand Bay Grand Bay Republic of Mauritius Republic of MauritiusTelephone number: +230 263 1491 +230 263 2082Date appointed: 15 December 2009 29 June 2009Registration number: C10091651 C08074314 *Sanlam Investment Management (Pty) Ltd also serves as unlisted investment managers for the SIM Real Estate Fund.

REGULATORY INFORMATION – CONTINUEDFor the period ended 31 March 2014


39REGULATORY INFORMATION – CONTINUEDFor the period ended 31 March 2014



Full name: Abax Investments (Pty) Ltd Stanlib Asset Management (Pty) LtdPostal address: PO Box 23851, Claremont, 2735 PO Box 3327, WindhoekPhysical address: Ground Floor, Coronation House 1st Floor, Gutenburg Plaza The Oval, 1 Oakdale Road 51-55 Werner List Street Newlands, Cape Town Windhoek Republic of South Africa Telephone number: 0027 21 670 8960 061-294 2273Date appointed: 04 March 2010 01 September 2008Registration number: 2000/008606/07 162/68


Full name: Mazi Capital (Pty) Ltd Tri-Alpha Investment Management (Pty) Ltd Postal address: P.O. Box 784583, Private Bag X5061, Sandton, 2146 Stellenbosch, RSA 7599Physical address: The Place, 1 Sandton Drive Ground Floor, Block A, 7 West Quary Ground Floor, South Wing West Quary Road, Victoria and Alfred Sandton 2146, Johannesburg, RSA Waterfront, Cape Town, 8001, RSATelephone number: +27 11 245 8909 +27 21 425 0221Date appointed: 05 March 2010 20 April 2010Registration number: 2006/006855/07 2006/008726/07


Full name: Element Investment Managers (Pty) Ltd Taquanta Asset Managers (Pty) LtdPostal address: PO Box 13, Cape Town PO Box 23540, Claremont 8001 RSA, 7735Physical address: 25th Floor 7th Floor, Newlands Terraces, Attenbury 1 Riebeck Street 8 Boundary Road Cape Town, RSA Newlands, Cape Town, RSATelephone number: +27 21 426 0999 +27 21 681 5199Date appointed: 05 March 2010 26 June 2010Registration number: 1998/006727/07 1999/021871/07N/A


Full name: Mezzenine Partners (Acting in its capacity Prudential Portfolio Managers as a general partner of Credit Partners1, LP) (Namibia) (Pty) Ltd (Acting in the capacity as Co-Manager of Episode Inc)Postal address: PO Box 202 Melrose Arch PO Box 25743 Johannesburg, RSA, 2076 Windhoek Physical address: Stanlib Building, 3rd Floor, 6 Feld Street 17 Melrose Bailevard, Melrose Arch, Republic of Namibia Johannesburg, RSA, 2196 Telephone number: +27 11 507 1080 +264 61 256 166Date appointed: 01 April 2010 12 April 2010Registration number: 2009/008324/07 96/185

40




Full name: ABSA Capital Alternative Asset BlackRock Investment Managers (UK) Ltd Management (Pty) Ltd Postal address: N/A N/A

Physical address: 163 Uys Krige Drive 12 Throgmorton Avenue Plattekloof EC2N 2DL Cape Town London 7500 United Kingdom RSA Telephone number: +27 21 927 6403 +44 (2) 20 7743 3000Date appointed: 06 March 2013 01 February 2013Registration number: 1999/027973/07 2020394

Unlisted investment managers Unlisted investment managers

Full name: IJG Private Equity (Pty) Ltd (in their capacity Kongalend Financial Services (Pty) Ltd as Fund Managers for the Desert Stone Fund) (in their capacity as Fund Managers for the Kongalend Renewable Energy Trust)Postal address: PO Box 186 PO Box 40303 Windhoek WindhoekPhysical address: 1st Floor, Heritage Square Building Corner Haddy and Viljoen Street 100 Robert Mugabe Avenue Windhoek West Windhoek Windhoek Republic of Namibia Republic of NamibiaTelephone number: + 264 61 383 500 + 264 61 241 440Date appointed: 11 May 2010 05 May 2010Registration number: T183/10 T184/10


Full name: Business Financial Solutions (BFS) (in their Venture Partners Botswana (VPB) Namibia capacity as Fund Managers for the Namibia (Pty) Ltd (in their capacity as Fund Managers Procurement Fund) for the VPB Growth Fund) Postal address: PO Box 5064 PO Box 40847 Windhoek WindhoekPhysical address: 7 Newton Street 7 Viljoen Street Ausspannplatz NVA Centre, WindWest Windhoek Windhoek Republic of Namibia Republic of NamibiaTelephone number: + 264 61 388 600 + 264 61 220069Date appointed: 14 April 2010 11 May 2010Registration number: T172/10 T185/10


41REGULATORY INFORMATION – CONTINUEDFor the period ended 31 March 2014



Full name: Safland Property Services Namibia (in Königstein Capital (Pty) Ltd (in their their capacity as Fund Manager of the capacity as Fund Managers for the Frontier Property Trust) Königstein Capital Property Investment Fund)Postal address: PO Box 97438 PO Box 86127 Windhoek WindhoekPhysical address: 2 Barrot Street, Western Square Unit 7 – The Village Eros, Windhoek 18 Lillencron Street, Windhoek Republic of Namibia Republic of NamibiaTelephone number: +264 61 225 274 + 264 61 303 227Date appointed: 12 May 2011 11 May 2010Registration number: 2008/0798 T244/11

Unlisted investment managers Unlisted investment manager

Full name: Preferred Management Services (Pty) First Capital Treasury Solutions (Pty) Ltd (in their capacity as Fund Manager Ltd (in their capacity as Fund Managers of the Preferred Investment Property for the First Capital Real Estate Finance Fund) Fund) Postal address: PO Box 26710 PO Box 4461 Windhoek WindhoekPhysical address: Bougian Villa Complex 5 Beethoven and Strauss Street 78 Sam Nuyoma Drive, Windhoek West Klein Windhoek, Windhoek Windhoek Republic of Namibia Republic of NamibiaTelephone number: +264 61 248 318 +264 61 401 326Date appointed: 16 August 2011 29 September 2011Registration number: T245/11 1995/011585/07 Investment managers Transition managers

Full name: Visio Capital Management (Pty) Ltd RMB Morgan Stanley (Pty) Ltd

Postal address: N/A PO Box 25743 Windhoek Physical address: The Place, 1 Sandton Drive, 1 Merchant place, Corner Freman Drive Ground Floor, South Wing, and Rivonia Road, Sandton, 2196 Sandton, 2146 Republic of South Africa Republic of South Africa

Telephone number: + 27 21 927 6403 +27 11 282 8630Date appointed: 10 March 2014 29 October 2012Registration number: 2003/01/83/65/07 1995/011585/07

42 42



Custodian and nominees Custodian and nominees

Full name: Standard Bank Namibia (Pty) Ltd State Street Southern Africa (Pty) LtdPostal address: PO Box 3327 PO Box 1134 Windhoek Cape Town, RSA, 8000Physical address: 2nd Floor, Standard Bank Centre Liesbeek House Town Square River Park Gloucester Road, Windhoek Mowbray, Cape Town, RSATelephone number: 061-294 2602 +27 21 681 2102NAMFISA approval no: 78/01314/07 N/ADate appointed: 16 April 1997 01 July 2005

Risk insurers Investment accounting services Full name: The Hollard Insurance Company of Namibia Ltd RisCura Solutions (Pty) Ltd Postal address: PO Box 5077 PO Box 27449 Ausspannplatz Windhoek, Namibia Windhoek Physical address: Jan Jonker Commercial Suite 2nd Floor, Heritage Square Building Corner of Jan Jonker and Thorer Street Corner of Lindequist & Robert Mugabe Windhoek Avenue Windhoek Telephone number: 061-371300 061-410350 NAMFISA approval no: 08/LT/19 N/A Date appointed: 18 December 2006 01 January 2009

Participating employers

The following employers participated in the Fund in terms of the rules of the Fund during the year under review:

Name Environmental Investment Fund of Namibia AgriBusDevOffices, Ministries and Agencies of the Government of the Republic of Namibia Berseba Village CouncilMillennium Challenge Account Gibeon Village CouncilMission Hospitals Gochas Village CouncilNamibia Institute of Pathology Kalkrand Village CouncilNamibia Student Financial Assistance Fund (NSFAF) Koës Village CouncilNamibia Tourism Board Namibia Statitics Agency (NSA)Namibia Wildlife Resorts Limited National Heritage CouncilNamibian Institute of Public Administration and Management New Era CorporationNational Council for Higher Education (NCHE) Regional CouncilsRoads Contractor Company Limited Stampriet Village CouncilSmall Business Credit Guarantee Trust Tses Village CouncilSocial Security Commission Tungeni Africa InvestmentsTrust Fund for Regional Development & Equity Provisions Witvlei Village Council


43STATEMENT OF RESPONSIBILITY BY THE BOARD OF TRUSTEESFor the year period 31 March 2014

Responsibilities

TheBoardofTrusteesherebyconfirmtothebestoftheirknowledgeandbeliefthat,duringtheperiodunderreview,intheexecutionoftheirdutiestheyhavecompliedwiththedutiesimposedbyPensionFundsAct,1956(ActNo.24of1956)(“hereafterreferredtoasPensionFundsAct)andotherrelevantlegislationaswellastherulesofthefund,includingthefollowing:• ensuredthatproperregisters,booksandrecordsoftheoperationsoftheFundwerekept,inclusiveofproperminutesofallresolutionspassedbytheboardof

trustees; • ensuredthatproperinternalcontrolsystemswereemployedbyoronbehalfoftheFund;• ensuredthatadequateandappropriateinformationwascommunicatedtothemembersoftheFund,informingthemoftheirrights,benefitsanddutiesinterms

of the rules of the Fund; • tookallreasonablestepstoensurethatcontributions,whereapplicable,werepaidtimeouslytotheFundorreportedwherenecessaryinaccordancewithSection13AofthePensionFundsActinNamibia;

• obtainedexpertadviceonmatterswheretheylackedsufficientexpertise;• ensuredthattherulesandtheoperationandadministrationoftheFundcompliedwiththePensionFundsActinNamibiaandallotherapplicablelaws;• ensuredthatfidelitycoverwasmaintained.ThiscoverwasdeemedadequateandincompliancewiththerulesoftheFund;and• ensuredthatinvestmentsofthefundwereimplementedandmaintainedinaccordancewiththeFund’sinvestmentstrategy.

Approval of the annual financial statements

TheannualfinancialstatementsoftheGovernmentInstitutionsPensionFundaretheresponsibilityoftheBoardofTrustees.TheBoardofTrusteesfulfilsthisrespon-sibilitybyensuringtheimplementationandmaintenanceofaccountingsystemsandpracticesadequatelysupportedbyinternalfinancialcontrols.Thesecontrols,whichareimplementedandexecutedbythefundand/oritsbenefitadministrators,providereasonableassurancethat:

• theFund’sassetsaresafeguarded;• transactionsareproperlyauthorisedandexecuted;and• thefinancialrecordsarereliable.

Theannualfinancialstatementssetoutonpages14to33havebeenpreparedforregulatorypurposesinaccordancewith:

• thebasisofaccountingappliedtoretirementfundsinNamibia;• therulesoftheFund;and• theprovisionsofthePensionFundsActinNamibia.

Thesefinancialstatementshavebeenreportedonbytheindependentauditors,PricewaterhouseCoopers,whoweregivenunrestrictedaccesstoallfinancialrecordsandrelateddata,includingminutesofallrelevantmeetings.TheBoardofTrusteesbelievesthatallrepresentationsmadetotheindependentauditorsduringtheirauditwerevalidandappropriate.Thereportoftheindependentauditorsispresentedonpages12to13.

Thesefinancialstatementswereapprovedbytheboardoftrusteeson23rd September2014andaresignedontheBoardofTrustees’behalfby:

Mr M. Gaomab II Mr. I Nashandi Mr R. Kamerika

CHAIRPERSON OF THEBOARD OF TRUSTEES

CHAIRPERSON OF THE BOARD AUDIT COMMITTEE

CHAIRPERSON OF THE BOARD BENEFITS AND ADMI-ISTRATION COMMITTEE

23 September 2014 23 September 2014 23 September 2014

44

STATEMENT OF RESPONSIBILITY BY THE PRINCIPAL OFFICERFor the period ended 31 March 2014

Iconfirmthat,fortheperiodunderreview,theGovernmentInstitutionsPensionFundhastimeouslysubmittedallregulatoryandotherreturns,statements,documentsandanyotherinformationasrequiredintermsofthePensionFundsActinNamibia.

MrD.NuyomaPRINCIPAL OFFICER23September2014Windhoek


45INDEPENDENT AUDITOR’S REPORTTO THE TRUSTEES OF THE GOVERNMENT INSTITUTIONS PENSION FUND

Reportonannualfinancialstatements

WehaveauditedtheannualfinancialstatementsoftheGovernmentInstitutionsPensionFundwhichcomprisesoftheReportoftheBoardofTrustees,andthestate-mentofassets,liabilitiesandfundsasat31March2014,andthestatementofchangesinnetassetsandfundsfortheyearthenended,andthenotestothefinancialstatements,whichincludetheprincipalaccountingpoliciesandotherexplanatorynotes,assetoutonpages14to25.

BoardofTrustees’ResponsibilityfortheFinancialStatements

Thetrusteesareresponsibleforthepreparationandpresentationofthesefinancialstatementsforregulatorypurposes,inaccordancewiththebasisofpreparationapplicabletoretirementfundsinNamibia,assetoutinthenotestothefinancialstatements,andforsuchinternalcontrolasthetrusteesdetermineisnecessarytoenablethepreparationandpresentationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditor’sResponsibility

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithInternationalStandardsonAuditing.Thosestandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttotheentity’spreparationandpresentationofthefinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebytheentity,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

InouropinionthefinancialstatementsoftheGovernmentInstitutionsPensionFundfortheyearended31March2014,havebeenprepared,inallmaterialrespects,inaccordancewiththebasisofpreparationapplicabletoretirementfundsinNamibiaassetoutinthenotestothefinancialstatements.

46

INDEPENDENT AUDITOR’S REPORT– CONTINUEDTO THE MEMBERS OF THE GOVERNMENT INSTITUTIONS PENSION FUND

Other Matter – Report on Other Legal and Regulatory Requirements

Wedonotexpressanopiniononthefinancialconditionofthefundfromanactuarialpointofview.

Other matter - Restriction on use

Thefinancialstatementsarepreparedforregulatorypurposesinaccordancewiththebasisofpreparationindicatedabove.Consequently,thefinancialstatementsandrelatedauditorreportmaynotbesuitableforanotherpurpose.

PricewaterhouseCoopersRegisteredAccountantsandAuditorsCharteredAccountants(Namibia)PerLouisvanderRietPartnerWindhoek

29September2014


47REPORT OF THE BOARD OF TRUSTEESFor the period ended 31 March 2014

1. DESCRIPTION OF THE FUND

1.1. Type of fund:

IntermsofSection1oftheIncomeTaxAct(Act24of1981),asamendedtheFundisclassifiedasapensionfund.TheFundisadefinedbenefitfund.

1.2. Benefits

1.2.1. TheFundprovidesforthefollowingbenefitstoitsmembers:

1.2.1.1. Death benefitAonceofflumpsumamount,aswellasmonthlypensions,arepaidtothesurvivingspouseandchildrenofamemberwhodiesinservice.Amonthlypensionispaidtothesurvivingspouseonthedeathofaretiredmember.

1.2.1.2 Normal retirementAmemberreceivesamonthlypensionuponattainingtheageof60,commencingonthefirstdayofthemonthfollowingretirement,calculatedas2.4%ofthemember’sfinalsalary,multipliedbythemember’stermofpensionableservice.

1.2.1.3. Early age retirementEarlyageretirementispermissible,withtheconsentoftheemployer,uponorafterthememberattainstheageof55yearsbutbeforetheageof60years.Thepension,ascalculatedatthenormalretirementageof60years,isreducedby0.25%foreverymonthbywhichmember’spensionableserviceisterminatedpriortohis/hernormalretirementageof60years.

1.2.1.4. Early ill-health retirementAmemberwhoisonprotractedill-healthleavemayretireatanytimepriortohis/hernormalretirementdate.Suchill-healthearlyretirementpensioniscalculatedas2.4%ofthemember’sfinalsalary,multipliedbythemember’stermofpensionableservice.Aonceofflumpsumisalsopayableonearlyillhealthretirement.

1.2.1.5. Disability pensionAmembermayqualifyforadisabilitypension,ifthememberbecomestotallyandpermanentlydisabledwhileinservice.Thedisabilitypensioniscalculatedas75%ofthemember’spensionableemolumentsandispayableuntilthemember’snormalretirementage,whereafterthememberretiresintermsoftherulesoftheFund.

1.2.1.6. Funeral benefitAfuneralbenefitispaidupondeathofthemainmember,spouseandqualifyingchildasfollows:

• Activememberandspouse:N$8,000

• Retiredmember:N$8,000

• Qualifyingchildaged1yearorolder:N$3,000

• Qualifyingchildundertheageof1yearorstillborn:N$1,000.

1.2.2. StrategyofBoardofTrusteestowardsunclaimedbenefits.Ifabenefitremainsunclaimedforthreeyearsafterthedateitbecomespayable,itshallreverttotheFund,andsuchbeneficiaryshallhavenofurtherclaimagainsttheFund.HowevertheTrusteesshallhavethediscretiontopayoutsuchbenefitaftertheexpirationofthethreeyearperiod.

48

Unclaimedbenefits/rejectionsrepresentsclaimsthatwereprocessedforpayment,butwererejectedbythebankforreasonssuchasbeneficiary’saccountclosed,accountin-activeetc.

1.2.3. Inrespectofunclaimedbenefits,completerecords,asprescribed,aremaintainedasfromthedateofinception.

1.3. Contributions

1.3.1. DescriptionintermsoftherulesoftheFund.

1.3.1.1.Members’contributions.Memberscontributeeachmonthatarateof7%ofpensionablesalary.

1.3.1.2.Employers’contributions.Participatingemployerscontributeatarateof16%ofpensionablesalary.

1.4. Rule amendmentsFuneral Benefits

Ruleamendment no.

Date of board of trustees’

resolution

Effective date Date registered by NAMFISA

Date approved by Minister of

Finance

5 21-Sep-2012 14-Dec-2012 14-Dec-2012 N/A

Theruleamendmentprescribesthenewamountpayabletoqualifyingbeneficiariesforfuneralbenefits.

1.5. ReservesTherulesoftheFundmakenoprovisionforspecificreserves.However,intermsoftheStatutoryActuarialValuationforthefinancialyearended31March2012,thefollowingreserveaccountshavebeencreatedandarerevisedevery3years.

2014N$`000

2013N$`000

2012N$`000

2009N$`000

2006N$ ‘000

2003N$ ‘000

Member liabilities

Active members 24,781,191 24,781,191 24,781,191 13,666,532 13,790,336 7,453,505

Pensioners 8,194,547 8,194,547 8,194,547 5,586,819 3,314,848 1,979,794

Disabled members 252,629 252,629 252,629 173,540 261,279 197,540

Risk reserves

Aids 1,734,683 1,734,683 1,734,683 1,093,323 1,103,227 1,228,709

Data 1,239,060 1,239,060 1,239,060 971,345 868,323 754,585

Longevity 3,932,857 3,932,857 3,932,857 2,914,034 - -

Employer contribution 5,704,704 5,704,704 5,704,704 3,874,680 - -

Actuarial reserves 1,721,203 1,721,203 1,721,203 1,660,576 2,292,119 1,286,978

Un-allocated reserves 29,544,320 14,919,024 2,617,231 - 4,450,469 (1,742,477)

Accumulated funds 77,105,194 62,479,898 50,178,105 29,940,849 26,080,601 11,158,634

REPORT OF THE BOARD OF TRUSTEES – CONTINUEDFor the period ended 31 March 2014


49REPORT OF THE BOARD OF TRUSTEES – CONTINUEDFor the period ended 31 March 2014

2. INVESTMENTS

2.1. Investment strategy

TheBoardofTrusteeshave formulatedan investmentstrategywhereby the investmentsaremanagedaccordingto thefollowingprinciples.ThisinvestmentstrategycomplieswiththeprovisionsofRegulation28ofthePensionFundsActinNamibia:

2.1.1. TheinvestmentreturnsrequiredtoensurefinancialsustainabilityhavebeendefinedandtheactualrealnetrateofreturnearnedontheassetsoftheFundismeasuredagainstthesetargets.

2.1.2. TheassetsclassallocationsandweightingperassetclassofthepensionfundassetsmatchthetimeprofilesoftheFund’sliabilities

2.1.3. TheFund’sassetsaredistributedgeographicallyandinvariousdiversifiedassetclasses.2.1.4. Therisk toleranceof theFundisdefinedasbeinggenerally lowandanumberofprudential limitshavebeen

defined

2.2. Unlisted investments Asat31March2014,thefollowingunlistedFundManagersorAssetManagershadmadecapitaldrawdownsforinvest-mentpurposes:

a) TheNamibianProcurementTrust(“NamPro”);b) KongalendRenewableEnergyTrustFund(“Kongalend”);c) FrontierPropertyFund(“Frontier”);d) DesertStoneFund(“DSF”);e) VenturePartnersBotswanaGrowthFund(“VPB”);f) TheTungaRealEstateFund(“OMIGNAMTunga”);g) ExpandedInfrastructureFund(“OMIGNAMInfrastructure”);h) FirstCapitalRealEstateFinanceFund(“FCREFF”);i) KonigsteinCapitalInvestmentPropertyFund(“KCIPF”);andj) PreferredInvestmentPropertyFund(“PIPF”).

NamProisengagedinprovidingshort-termworkingcapitalfacilitiesandmedium-termassetbackedfinancing(FinanceandOperatingleases)toSME’sawardedtenders/supplyand/orservicecontractsbyreputablelargecorporate,govern-mentdepartments,parastatalsorlocalauthorities.Asat31March2014,ithadwrittenanumberofperformanceguaran-teesandprovidedfacilitiestoanumberofSME’s.

Kongalendwasfoundedwiththemainpurposeofengaginginrenewableenergyandsmall&mediumenterprises’creditfinancing.Asat31March2014,ithadprovidedloanstoanumberofSME’s.

TheFrontierPropertyFundhasabuy-and-holdmandatewith theFundwithspecific focuson investing in thedifferentregionswithinthebordersoftheRepublicofNamibia.TheinvestmentcharterallowstheFrontierFundtoinvestinretail,office,commercialandindustrialbuildingswiththeobjectiveofearninginvestmentreturnsinexcessofapre-determinedhurdlerate.Asat31March2014,thefundhadmadeinvestmentsintoseveralretailandofficeopportunitiesinWindhoek,Otjiwarongo,OndangwaandKatimaMulilo.

50


2. INVESTMENTS – (Continued)

DSFisaprivateequitytrustthatismandatedtoinvestinearlystageventurecapital,greenfieldprojects,developmentcapital,andbuyoutinvestments.Asat31March2014,ithadmadeaninvestmentinaMobilePaymentSolutionCompanyandEngineeringCompany.

VPBisaprivateequitytrustthatismandatedtoinvestinearlystageventurecapital,greenfieldprojects,developmentcapital,buyoutinvestments.Asat31March2014,ithadmadeaninvestmentinaMedicalServiceCentre.

OMIGNAMTungaisaRealEstateInvestmenttrust(REIT)withtheobjectiveofbuildingadominantNamibiaPropertyfund.Asat31March2014,ithadmadedraw-downforinvestmentsinshoppingcentreinthetownsofArandis,RehobothandGrootfontein.

OMIGNAMInfrastructuretargetsinfrastructuralprojectsliketollroads,railwaysandancillaryservices,bulkpowersupply,powerdistributions,telecommunications,bulkwatersupply,waterandwastewatertreatmentandreticulation,privatisation,educationandhealthcareetc.Asat31March2014,ithadprovidedfundingforinfrastructuralservicestotheSwakopmundMunicipalities.

FCREFFisatrustsetuptoprovidefundingforlocalauthoritiesanddevelopanactiveinsuranceofmortgagebackedsecurities.Asat31March2014,ithadprovidedfundingforOutapiTownCouncil.

KCIPFisatrustsetuptoprovidefundingforidentificationandadjudicationofpropertyinvestmentsopportunityfortheFundonwholesalecapacitywhichentailsinvestmentindevelopmentprojectsthatgenerateacceptablelongtermreturns.Asat31March2014,thetrustshadinvestedinseveraldevelopmentprojectsacrossthecountry,withmajorweightingtowardWindhoek.

PIPFisatrustsetuptoprovidefundingforidentificationandadjudicationofpropertyinvestmentsopportunityfortheFundonwholesalecapacitywhichentailsinvest-mentindevelopmentprojectsthatgenerateacceptablelongtermreturns.Asat31March2014,thetrustshadinvestedinseveraldevelopmentprojects(residential,warehousing&officespace)acrossthecountry,withmajorweightingtowardWindhoek.

Refertonote14oftheannualfinancialstatementsforfurtherdetails.

2.3 Management of investments

TheFund’sinvestmentsconsistofguaranteedportfoliosandmanagedportfoliosplacedwithinvestmentmanagers,aswellasdirectinvestmentsinunlistedNamibiancompanies,asdetailedbelow.Theinvestmentmanagershavefulldiscretionastothecompositionoftheassetsintheportfolioundertheirmanagement,withintheboundariesallowedbythePensionFundsActinNamibia.TheBoardofTrusteesmeetatquarterlyintervalstodiscussinvestmentpolicyandtomonitortheassetallo-cationandperformanceoftheinvestmentmanagersagainsttheinvestmentstrategyoftheFund.Theinvestmentmanagersareremuneratedonapercentagebasisbasedonmarketvaluesandarepaidquarterly.


51

ThefairvalueoftheFund’sinvestmentsadministeredbytheinvestmentmanagersattheendoftheperiodis:

31/3/2014 31/3/2013

N$ ‘000 N$ ‘000

Abax Investments (Pty) Ltd 2,678,285 1,985,170

ABSA Capital (Alternative Asset Management (Pty) Ltd) (271,417)* (176,286)*

Allan Gray Namibia (Pty) Ltd 3,257,061 2,558,061

All Season Capital Management (Pty) Ltd 2,582,617 2,093,653

BFS Nampro Fund Managers (Pty) Ltd 155,385 147,436

BlackRock Investment Management (UK) Ltd 9,341,667 6,009,342

Credit Partners (Pty) Ltd (Mezzenine Partners) 213,439 229,030

Element Investment Managers (Pty) Ltd - 817,927

First Capital (Pty) Ltd 9,901 4,952

IJG Private Equity (Pty) Ltd 75,877 12,548

Investec Asset Management (Pty) Ltd 11,403,332 9,876,947

Kongalend Financial Services (Pty) Ltd 81,097 51,397

Königstein Capital (Pty) Ltd 38,281 18,481

Mazi Capital (Pty) Ltd 439,836 1,596,662

Momentum Asset Management Namibia (Pty) Ltd 2,938,280 2,799,273

Namibia Asset Management (Pty) Ltd 11,522,236 9,496,712

Old Mutual Asset Management (Pty) Ltd 8,540,101 7,588,257

Preferred Management Services (Pty) Ltd 108,527 34,240

Prudential Portfolio Managers (Pty) Ltd 2,117,974 2,051,405

Safland Property Services (Pty) Ltd 241,906 230,918

Sanlam Investment Management (Pty) Ltd 7,437,727 6,574,068

South Suez Capital (Pty) Ltd 999,916 616,488

Sovereign Asset Management (Pty) Ltd 1,648,884 1,200,933

Taquanta Asset Managers (Pty) Ltd 402,003 284,850

RMB Morgan Stanley (Pty) Ltd 518 58

TriAlpha Investment Management (Pty) Ltd 1,088,447 844,134

Visio Capital Management (Pty) Ltd 1,745,431 -

VPB Namibia (Pty) Ltd 32,290 32,290

Wellington Management International LLP 7,729,316 5,314,166

Total investments managed by investment managers 76,558,917 62,293,112

GIPF Direct Investments 39,866 41,546

Total Investments 76,598,783 62,334,658

*TheFund’slossonderivativesexposure(hedges).


2. INVESTMENTS – (Continued)

52


3 MEMBERSHIP

Active members Deferred pensioners Pensioners Unclaimed benefits

Numbers at beginning of period 94,081 28,538 27,432Adjustments (*) Additions Transfers in 2,138 1,437 Transfers out Withdrawals (1,439) Retirements (1,181) Deaths (700) Retrenchments (13) Transfers (from)/to deferred pensionersUnclaimed benefit paid 427 (427)

Numbers at end of period 92,886 30,402 7,005

Themajorityofthemembersshownas‘transferredin’relatestonewemployeesofparticipatingemployerswhojoinedthefundduringtheperiod.

4 ACTUARIAL VALUATION

ThefinancialstatementssummarisethetransactionsandnetassetsoftheFund.Inaccordancewiththerulesofthefund,theactuarialpositionofthefund,whichdoestakeaccountofsuchliabilities,isexaminedandreportedonbytheactuaryatintervalsnotexceedingthreeyears.

Avaluationwasperformedasat31March2012andthevaluatorreportedthattheFundwasinasoundfinancialposition,andthatthepresentratesofcontributionsareadequatetoenablethefundtoprovidethebenefitstowhichmembersareentitled.

5. SUBSEQUENT EVENTS

Noeventshaveoccurredbetween31March2014dateofthisreportwhichareofsuchsignificancethattheyshouldbedealtwithinthereport.

6. INVESTMENT IN PARTICIPATING EMPLOYERS

TheFundholdsinvestmentsinparticipatingemployers.

7. FIDELITY COVER

DuringtheyearfidelitycoverwasmaintainedincompliancewiththeRulesoftheFund.

8. HOUSING LOAN FACILITIES

TheFundcurrentlydoesnothaveanyhousingloanfacilitiesorguaranteesgrantedintermsofSection19(5)ofthePensionFundAct.


53STATEMENTS OF NET ASSETS AND FUNDSAt 31 March 2014

Notes 2014 2013 N$’000 N$’000

ASSETSNon-current assets 76,672,924 62,407,692

Property, plant and equipment 1 74,141 73,034Investments 2 76,598,783 62,334,658 Current assets 432,270 642,778Accounts receivable 3 13,067 21,205Contributions receivable 7 219,264 208,765Cash at bank 199,939 412,808 Total assets 77,105,194 63,050,470 FUNDS AND LIABILITIES Funds Accumulated funds 76,430,531 62,479,898Total funds 76,430,531 62,479,898

Non-current liabilities 273,358 245,904Benefits payable 5 242,603 215,972Unclaimed benefits/Rejections 6 30,755 29,932 Current liabilities 401,305 324,668Benefits payable 5 313,280 238,306Accounts payable 4 88,025 86,362 Total funds and liabilities 77,105,194 63,050,470

STATEMENTS OF CHANGES IN NET ASSETS AND FUNDSFor the period ended 31 March 2014

Notes 2014 2013 N$’000 N$’000 Contributions received and accrued 7 2,601,407 2,147,596Net investment income 8 13,091,061 11,787,775Other income 9 13,195 28,953Less: Administration/operating expenses 10 (139,639) (120,599)

Net income before transfers and benefits 15,566,024 13,843,725 Transfers and benefits (1,615,391) (1,541,932)Benefits paid 6 (1,615,391) (1,541,932) Net income after transfers and benefits 13,950,633 12,301,793

Funds and reserves Balance at beginning of year 62,479,898 50,178,105 Balance at end of year 76,430,531 62,479,898

54

NOTES TO THE ANNUAL FINANCIAL STATEMENTSFor the period ended 31 March 2014

PRINCIPAL ACCOUNTING POLICIES – (Continued)

Basis of preparation

ThefinancialstatementsarepreparedforregulatorypurposesinaccordancewiththeRegulationsofthePensionFundsActinNamibia.Theregulationsrequirethatthebasisofaccountingappliedbythepensionfundscomprisegenerallyacceptedaccountingpractice,asappliedtoretirementfundsinNamibia,exceptfor:

• therecognition,measurementanddisclosureofactuarialliabilities;• disclosureofcashflowinformation;• disclosureofprioryearadjustments;• presentationofconsolidatedfinancialstatementsinwhichinvestmentsinsubsidiaryisconsolidatedinaccordancewiththestandardonconsolidatedand separatefinancialstatements;and

• disclosureofquantitativeriskdisclosuresasrequiredbyIFRS7.

Thefinancialstatementsarepreparedonthehistoricalcostandgoingconcernbasisexceptforitemscarriedatfairvalueassetoutintheaccountingpolicesbelow.Thefinancialstatementsaremeasuredandpresentedinthefunctionalcurrency.

Principal Accounting Policies

Thefollowingaretheprincipalaccountingpoliciesadoptedandappliedconsistentlyforsimilartransactions,othereventsandcircumstancesforthereportingperiod,andareconsistentinallmaterialrespectswiththoseappliedinthepreviousreportingperiod,bytheFund,exceptasotherwiseindicated.

Consolidation disclosure changes

TheFund`sFinancialStatementsince31March2010werepresentedinaconsolidatedformatwherebyKuleniFundAdministration(Pty)Ltdstatementswasconsol-idatedintothestatementsoftheFund.However,theFund`sActuariesrecommendedthattheconsolidationbediscontinuedandtheFund`sstatementbepresentedseparately.TheActuarystronglyrecommendedthatanyinvestmentsbytheFundinsubsidiarycompaniesbeexcludedfromanyconsolidationofaccountsbutratherbeincludedonthebasisofitsnetworthtotheFund.BasedonthisrecommendationtheFund`scurrentfinancialstatementisnotconsolidatedwiththatofKuleniFundAdministration(Pty)Ltd.

Asset impairments

Assetimpairmenttestsareappliedannuallytocashgeneratingunitsandindividualassetswhosemeasurementbasisishistoriccostorhistoriccostasadjustedforrevaluations.Animpairmentlossisrecognisedwhenanasset’scarryingvalueexceedsitsrecoverableamount.Impairmentlossesareinitiallyadjustedagainstanyapplicablerevaluationreservethenexpensedintheprofitandloss.Iftheimpairmentlossforanindividualassetexceedsthecarryingvalueoftheasset,theexcessisrecognisedasaprovision.

Therecoverablevalueisthehigherofthecashgeneratingunit’sorindividualasset’sfairvalue,lesscoststosell,anditsvalueinuse.Fairvaluelesscoststosellistheamountobtainablefromthesaleoftheassetinanarm’slengthtransactionbetweenknowledgeable,willingparties,lessthecostofdisposal.Valueinuseisthepresentvalueofestimatedfuturecashflowsexpectedtoflowfromthecontinuinguseoftheassetandfromitsdisposalattheendofitsusefullife.

Iftherecoverableamountofacashgeneratingunitorindividualassetsubsequentlyexceedsthecarryingvalueresultingfromtheapplicationofitsaccountingpolicy,animpairmentreversalisrecognisedtothatextent.Theimpairmentreversalisappliedinreverseordertotheimpairmentloss.


55NOTES TO THE ANNUAL FINANCIAL STATEMENTS – CONTINUEDFor the period ended 31 March 2014


Property, plant and equipment

Landisaccountedforatcostandisnotdepreciatedunlesstherehasbeenapermanentdeclineinitsvalue.

Buildings,computerequipment,furnitureandfittings,officeequipment,motorvehicles,softwaredevelopmentandrefurbishmentsarestatedatcostanddepreciatedonthereducingbalancemethodovertheirestimatedusefullives.

Depreciationisprovidedovertheusefullifeofeachassettowritedownitscarryingvalue,onasystematicbasis,toitsestimatedresidualvalue.Thedepreciationmeth-odadoptedreflectsthepatterninwhichtheasset’s,oritscomponent’s,economicbenefitsareconsumed.Thedepreciationchargeofanimpairedassetisadjustedinfutureperiodstoallocatetheasset’srevisedcarryingvalue,lessitsresidualvalue,onasystematicbasisoveritsremainingusefullife.

Theassetsresidualvaluesandusefullivesarereviewedateachreportingdateandadjustedifnecessary.

Thefollowingdepreciationrateswereappliedduringtheyear:Buildings 2%p.a.Motorvehicles 20%p.a.Computerequipment&softwaredevelopment 25%p.a.Officeequipment 20%p.a.Furniture&fittings 15%p.a.Refurbishments 33%p.a.

Gainsandlossesondisposalofproperty,plantandequipmentaredeterminedbyreferencetotheircarryingamountandaretakenintoaccountindeterminingthenetincomeorloss.

Leased assets

Leasesunderwhichtherisksandrewardsofownershipareeffectivelyretainedbythelessorareclassifiedasoperatingleases.

Investments

Investment property

Investmentpropertiesareheldtoearnrentalincomeandforappreciationincapitalvalue.Owner-occupiedpropertiesareheldforadministrativepurposes.Thisdis-tinguishesowner-occupiedpropertiesfrominvestmentproperties.Investmentpropertyisdistinguishedfromowneroccupiedpropertyonthesubstantivepercentageusagebasis.Reclassificationstoorfrominvestmentpropertyareonlyrecognisedwhenachangeinuseisevidencedbythesubstantivepercentageusagebasis.

Investmentpropertyismeasuredatfairvaluedeterminedannuallyatmarketvalueonacomparablemarkettransactionbasis.AnyresultingfairvalueadjustmentsarerecognisedintheStatementofchangesinnetassetsandfunds.Investmentpropertiesarenotsubjecttodepreciation.

Investmentpropertyisderecognisedonreclassificationtoowneroccupiedpropertyorondisposalandisremeasuredtofairvalueatthedateofderecognition.

56

NOTES TO THE ANNUAL FINANCIAL STATEMENTS – CONTINUEDFor the period ended 31 March 2014


Investments in financial instruments

Afinancialinstrumentisanycontractthatgivesrisetobothafinancialassetofoneentityandafinancialliabilityorequityinstrumentofanotherentity.Afinancialassetorafinancialliabilityisrecognisedwhenitscontractualarrangementsbecomebinding.Investmentsinfinancialinstrumentsareclassifiedandmeasuredasfollows:

Investment classification Classification Carrying value

Held for trading Equities: NSX – primary listing At fair value through statement of changes in net assets and funds Fair value NSX – secondary listing At fair value through statement of changes in net assets and funds Fair value Foreign listed equities At fair value through statement of changes in net assets and funds Fair value Unlisted equities At fair value through statement of changes in net assets and funds Fair value Equity index-linked instruments At fair value through statement of changes in net assets and funds Fair valueDebentures At fair value through statement of changes in net assets and funds Fair valueBills, bonds and securities At fair value through statement of changes in net assets and funds Fair valueCollective investments At fair value through statement of changes in net assets and funds Fair valueInsurance policies: Non-market related policies At fair value through statement of changes in net assets and funds Fair value Market related policies At fair value through statement of changes in net assets and funds Fair valueDerivative market instruments At fair value through statement of changes in net assets and funds Fair valueCash and deposits At fair value through statement of changes in net assets and funds Amortised costPrivate equity At fair value through statement of changes in net assets and funds Fair valueOpen Trades and AccrualsHeld to maturity At fair value through statement of changes in net assets and funds Amortised costLoans and debentures Loans and receivables Amortised costOther investments under management At fair value through statement of changes in net assets and funds Fair value

At fair value through statement of changes in net assets and funds

Afinancialassetatfairvaluethroughthestatementofchangesinnetassetsandfundsisinitiallymeasuredatcostontradedate,whichincludestransactioncosts.Subsequenttoinitialrecognition,theseinstrumentsaremeasuredassetoutbelow.Afinancialassetatfairvaluethroughthestatementofchangesinnetassetsandfundsismeasuredatfairvalue,whichisthefairvaluewithoutanydeductionfortransactioncoststhatmaybeincurredonsaleorotherdisposal.

Fair value is determined as follows:Listed investmentsInvestmentslistedonarecognisedstockexchangearevaluedbyreferencetostockexchangequotedsellingpricesatthecloseofbusinessonthereportingdate.

Unlisted investment / Private equityUnlistedequityinvestmentsarecalculatedbytheboardoftrustees,withreferencetothetrustees’valuationasattheendofthereportingperiod.

Market related insurance policies Marketrelatedpoliciesarevaluedattheequivalenttothemarketvalueoftheunderlyingassetsascertifiedbytheinvestmentinsurersconcerned.

Non-market related insurance policiesNon-marketrelatedpoliciesarevaluedattheequivalentoftheguaranteedamountandbonusesascertifiedbytheinsurerconcerned.Non-vestedincomeisincludedinthevaluation.




Derivative market instrumentsDerivativemarketinstrumentsarevaluedatmarketvalue.

Cash and depositsCashanddepositsarevaluedatamortisedcost.

Open trades and accrualsOpentradesandaccrualsarevaluedatamortisedcost.

Subsequent measurementAnygainorlossarisingonremeasurementtofairvalueofafinancialassetclassifiedasatfairvaluethroughthestatementofchangesinnetassetsandfundsisrec-ognisedinnetinvestmentincomeinthereportingperiodofoccurrence.

DerecognitionOnderecognition,afinancialassetclassifiedasatfairvaluethroughthestatementofchangesinnetassetsandfunds,isremeasuredtofairvalueatthedateofderecognition.

Loans and receivables

Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedonanactivemarketandarerecognisedwhentheassetisacquiredusingtradedateaccounting.

Loansandreceivablesaremeasuredatamortisedcost.

Amortised costAmortisedcostiscalculatedbyusingtheeffectiveinterestratemethodasadjustedforanyimpairment.Transactioncostsonacquisitionareincludedinthecostoftheassetoninitialrecognition.

ImpairmentLosses measured on impairments and gains recognised on the reversal of impairments are recognised as an expense or income in the Statement of changes in net assetsandfundsinthereportingperiodofoccurrence.

Gains and lossesAgainorlossonloansandreceivablesisrecognisedintheStatementofchangesinnetassetsandfundswhenthefinancialassetisderecognisedorimpaired,andthroughtheamortisationprocess.

Benefit and Pension claim

Benefitexpensesarerecognisedasthebenefitsoccur,throughthestatementofchangesinnetassetsandfundsonanaccrualbasis.Aliabilityisraisedforallbenefitsaccruingattheendofthefinancialyear,whichhasnotbeenpaid.

Transfers to and from other funds

Section14transferstoorfromotherfundsarerecognisedonapprovalbeinggrantedbytheRegistrar.Individualtransfersarerecognisedwhentheindividualmem-ber’stransferisreceivedorpaid.

58



Other financial instruments

Financialinstrumentsotherthaninvestmentsandtransferstoandfromotherfundsarerecognisedatamortisedcost.Otherfinancialassetsaretestedforimpairmentannuallyandadjustedforanyimpairmentwriteoffsandreversals.

Provisions for benefits and expenditure

Employeebenefitsforcompensatedabsencesarisingfrompastevents,forwhichitisprobablethatanoutflowofeconomicbenefitswillberequiredtosettletheobli-gation,arerecognisedasaprovisionatthenettotalofthepresentvalueoftheobligationatthereportingdate.Changesintheoutstandingobligation,inareportingperiod,arerecognisedinthestatementofchangesinnetassetsandfunds.

Provision for employee benefits

EmployeebenefitsforaccruedleaveandbonusarerecognisedasaprovisionintheStatementofchangesinnetassetsandfunds.

Contributions

Contributionsarebroughttoaccountontheaccrualbasisexceptforvoluntarycontributions,whicharerecordedintheperiodinwhichtheyarereceived.

Dividend income

Dividendincomeisrecognisedwhentherighttoreceivepaymentisestablished.

Insurance policy income

Insurancepolicyincomeisrecognisedwhentherighttoreceivepaymentisestablished.

Interest income

Interestincomeisrecognisedandaccruedtotheinvestmentusingtheeffectiveinterestratemethodandrecognisedinnetinvestmentincome.Interestreceived,wherenoaccrualhadpreviouslytakenplace,iscreditedtotheinvestmentonreceipt.

Collective investment schemes

Incomeoncollectiveinvestmentschemesisrecognisedwhentherighttoreceivepaymentisestablished.

Rental income

Rentalincomeisrecognisedontheaccrualbasisinaccordancewiththesubstanceoftherelevantagreementsovertheleaseterm.Rentalpremiumsaspertherentalcontractareamortisedonastraight-linebasisovertheleaseterm.


59Estimates and management assumption for the future

Significantestimatesandjudgementsthatwereincludedinthefinancialstatementsrelatetothefollowing:

• Accrualforunclaimedbenefits AccrualforunclaimedbenefitsismadewhentheFundisnotifiedofaclaim.CurrentlytheFundhasnoothermechanismsofestablishinguninitiatedclaims,andthereforeisnotinapositiontoestimatetheextent,ifany,ofuninitiatedclaims.

• Anactuarialvaluationisperformedeverythreeyearsinorder,amongstothers,toestablishthefundinglevelsoftheFund.ThisactuarialvaluationisdependentuponestimatesmadebytheStatutoryActuaryandanychangesinestimateswillimpactonthefundingleveloftheFund.

• Avaluationofnon-publiclytradedinvestmentsisdoneannually,asinformationoftheseinvestmentsandloansarenotreadilyavailable.Significantjudgementisusedindeterminingthefairvalueoftheseinvestmentsandloans.

Comparatives

Wherenecessary,comparativefigureshavebeenreclassifiedtoconformtochangesinpresentationinthecurrentperiod.

Subsequent measurement

Loansandreceivablesaresubsequentlymeasuredatamortisedcost,usingtheeffectiveinterestratemethod,adjustedforanyimpairment.

Financialassetsaresubsequentlymeasuredatamortisedcost,usingtheeffectiveinterestratemethod,adjustedforanyimpairment.

Financialliabilitiesaresubsequentlymeasuredatamortisedcost,usingtheeffectiveinterestratemethod.

Trade and other receivables

Tradeandotherreceivablesaremeasuredatinitialrecognitionatfairvalue,andaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestratemethod.Appropriateallowancesforestimatedimpairmentsarerecognisedthroughthestatementofchangesinnetassetsandfundswhenthereisobjectiveevidencethattheassetisimpaired.Theallowancerecognisedismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedattheeffectiveinterestratecomputedattheinitialrecognition.Thecarryingamountoftheassetisreducedthroughtheuseofanallowanceaccount,andtheamountoftheprofitisrecognisedinthestatementofchangesinnetassetsandfunds.Whenatradereceivableisuncollected,itiswrittenoffagainsttheallowanceaccountfortradereceivables.Subsequentrecoveriesofamountspreviouslywrittenoffarerecognisedinthestatementofchangesinnetassetsandfunds.Tradeandotherreceivablesareclassifiedasloansandreceivables.

60

NOTES TO THE ANNUAL FINANCIAL STATEMENTS – CONTINUEDFor the period ended 31 March 2014PRINCIPAL ACCOUNTING POLICIES – (Continued)

1. Property, plant and equipment

1.1 31 March 2014 Land & Motor Computer Computer and Furniture, Total buildings vehicles software & office equipment fittings and systems refurbishments N$ ‘000 N$ ‘000 N$ ‘000 N$ ‘000 N$ ‘000 N$ ‘000 Gross carrying amount At 1 April 2013 60,362 4,699 19,781 27,358 15,612 127,812Additions 794 - 4,431 - 116 5,341Disposals - (709) - (3,869) (484) (5,062) At 31 March 2014 61,156 3,990 24,212 23,489 15,244 128,091 Accumulated depreciation (9,858) (1,316) (17,179) (14,782) (10,815) (53,950) At 1 April 2013 (8,897) (1,338) (15,634) (18,204) (10,706) (54,779)Depreciation charges (961) (625) (1,545) (3,616) (1,920) (8,667)Depreciation on disposals - 647 - 7,038 1,811 9,496

Net carrying amount at 31 March 2014 51,298 2,674 7,033 8,707 4,429 74,141

Land and buildings comprise of: Erf 2014 N$’000

7489, Windhoek (a portion of erf 79 Windhoek) 36,281906, Swakopmund 15,3371592, Oshakati 9,324342, Katima Mulilo (vacant erf) 682329, Ondangwa (vacant erf) 146

61,156



1. Property, plant and equipment - (Continued)

1.2 31 March 2013 Land & Motor Computer Computer and Furniture, Total buildings vehicles software & office equipment fittings and systems refurbishments N$ ‘000 N$ ‘000 N$ ‘000 N$ ‘000 N$ ‘000 N$ ‘000

Gross carrying amount At 1 April 2012 58,113 3,168 19,470 23,806 15,319 119,876Additions 2,249 1,531 311 3,581 293 7,965Disposals - - - (29) - (29) At 31 March 2013 60,362 4,699 19,781 27,358 15,612 127,812 Accumulated depreciation (8,897) (1,338) (15,634) (18,203) (10,706) (54,778) At 1 April 2012 (7,925) (929) (14,473) (16,247) (9,502) (49,076)Depreciation charges (972) (409) (1,161) (1,963) (1,204) (5,709)Depreciation on disposals - - - 7 - 7 Net carrying amount at 31 March 2013 51,465 3,361 4,147 9,155 4,906 73,034

Land and buildings comprise of:Erf 2013 N$’0007489, Windhoek (a portion of erf 79 Windhoek) 34,255906, Swakopmund 16,1271592, Oshakati 9,766342, Katima Mulilo (vacant erf) 682329, Ondangwa (vacant erf) 146 60,362

62


2. Investments

Local Common Foreign Total Total Monetary Area 2014 2013 N$’000 N$’000 N$’000 N$’000 N$’000 Investments held for trading Equities 18,646,971 12,251,238 16,988,856 47,887,065 42,695,461Private equity *947,408 99,992 899,924 1,947,324 1,302,623Cash and deposits 2,101,813 490,260 135,152 2,727,225 2,479,635Bills, bonds and securities 4,147,071 8,095,334 5,613,139 17,855,544 16,020,763Collective investment schemes 1,298,658 69,080 5,194,017 6,561,755 152,662Investments held to maturity Loans 41 - - 41 41Derivative market instruments - (266,881) 290,678 23,797 235,428Open trades and accruals Trade sales receivables 13,914 339,111 65,924 418,949 185,649Trade purchases payable (41,635) (994,941) (118,569) (1,155,145) (1,016,664)Investment income receivables 211,980 114,290 5,835 332,105 279,034Sundry debtors 18 107 - 125 26Sundry creditors - (2) - (2) -Total 27,326,238 20,097,597 29,074,956 76,598,783 62,334, 658 35.7% 26.3% 38.00% 100% 100% 2014 2013 N$’000 N$’000 *Private equity Amount advanced 947,408 686,135 Less: impairment - - Net carrying amount 947,408 686,135

3. Accounts receivable 2014 2013 N$ ‘000 N$ ‘000

Advances to Kuleni Fund Administrators (Pty) Ltd 2,300 2,783Accrued interest on contribution late payments 2,361 3,064Pre-paid expenses - 1,916Study loans - staff 1,230 920VAT receivable 6,057 11,078Other 1,119 1,444 13,067 21,205

4. Accounts payable 2014 2013 N$ ‘000 N$ ‘000

Investment management fee accruals 60,438 60,740Custodian fee accruals 560 556NAMFISA levy accrual 3,906 2,134Leave accrual 7,394 6,248Bonus provision 977 880Operational creditors 10,185 9,786PAYE 2,167 2,084Other 2,398 3,934 88,025 86,362



5. Benefits Benefits paid Benefits paid Benefits payable Benefits payable 2014 2013 2014 2013 N$ ‘000 N$ ‘000 N$ ‘000 N$ ‘000

Monthly pensions 857,686 728,842 38,697 41,973Lump sums on retirements 322,679 336,579 99,750 73,107Lump sums before retirement Death benefits 132,741 110,856 318,782 264,698Withdrawal benefits 293,708 360,680 98,131 73,909Funeral benefits 8,577 4,975 524 591 1,615,391 1,541,932 *555,884 *454,278

*Non-current benefits payable older than one year is N$242,603 (2013: N$215,972).

6. Unclaimed benefits/Rejections 2014 2013 N$ ‘000 N$ ‘000 At beginning of period 29,932 28,963Transferred from benefits payable 9,930 8,189Benefits paid (9,107) (7,220)At end of period 30,755 29,932

7. Contributions Contributions Contributions Contributions Contributions received received receivable receivable 2014 2013 2014 2013 N$ ‘000 N$ ‘000 N$ ‘000 N$ ‘000

Member contributions 759,290 619,777 154,050 151,876Employer contributions 1,842,234 1,528,153 65,214 56,889Contributions refunds (117) (334) - - 2,601,407 2,147,596 219,264 208,765

8. Net investment income 2014 2013

N$ ‘000 N$ ‘000

Income from investment properties and investments 13,322,251 12,008,112· Dividends 1,124,626 1,159,068· Interest income 978,810 720,282· Realised profit 2,840,637 2,847,246· Unrealised profit/(loss) on investments 6,146,007 4,582,674· Management fee rebate 2,375 -· Securities lending income 15,644 7,199· Foreign exchange income/(losses) - unrealised 197,979 1,489,731· Foreign exchange income/(losses) - realised 2,015,339 1,196,343· Other investment income 1,834 5,569 Less: Expenses incurred in managing investments (231,190) (220,337) 13,091,061 11,787,775

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9. Other income 2014 2013 N$ ‘000 N$ ‘000

Bank interest income 11,327 16,152 Other income 1,868 12,801 13,195 28,953

10. Administration/operating expenses 2014 2013 N$ ‘000 N$ ‘000

Actuarial fees 588 1,046Auditors remuneration 1,233 824 Prior years 1,233 824Bank charges 1,212 1,196Consultancy fees 9,996 10,273Depreciation 6,311 5,709NAMFISA membership levies 1,804 1,693Office expenses 32,192 25,787Operating lease payments 804 758Other expenses – tax penalties and interest 3,067 -Principal officer expenses 2,453 1,326 Remuneration 1,435 911 Allowances 811 285 Contributions to retirement fund 97 86 Bonus 110 44Executive management 5,048 5,377 Remuneration 2,875 3,042 Allowances 1,470 1,645 Contributions to retirement fund 513 423 Bonus 190 267Staff expenses 71,366 62,804 Remuneration 68,690 61,311 Training expenses 2,001 844 Study loan grants 675 649Trustee/director expenses 3,565 3,806 Seminars and workshops 794 30 Training 93 589 Meeting allowances 2,678 3,187

139,639 120,599

10.1 Number of employees 2014 2013

Principal Officer 1 1Executive Management 5 4Permanent 168 156Fixed term 11 11Casuals 8 8 193 180



11. Risk management policies

Risk management framework

TheBoardofTrusteeshasoverallresponsibilityfortheestablishmentandoversightoftheFund’sriskmanagementpolicies.

TheFund’s riskmanagementpoliciesareestablishedto identifyandanalysetherisksfacedbytheFund,tosetappropriaterisklimitsandcontrols,andtomonitorrisksandadherencetolimits.Riskmanagementpoliciesandsystemsarereviewedregularlytoreflectchangesinmarketconditionsandthefund’sactivities.

· Solvency riskSolvencyriskistheriskthattheinvestmentreturnsonassetswillnotbesufficienttomeettheFund’scontractualobligationstomembers.

Continuous monitoring by the Board and the Fund’s actuary takes place toensure that appropriate assets are held, or disinvested from, where appropriate, wherethefundsobligationtomembersaredependentupontheperformanceofspecificportfolioassetsandthatasuitablematchofassetsexistsforallotherliabilities.

· Credit riskCredit risk is the risk that a counter-party toafinancial instrumentwill fail todischargeanobligation,andcausetheFundtoincurafinancialloss.

TheBoardmonitors receivablebalancesonanon-goingbasiswith the resultthatthefund’sexposuretobaddebtsisnotsignificant.Thelevelofprovisionismaintainedasdeemednecessary.

· Legal riskLegal risk is the risk that theFundwillbeexposed to contractualobligationswhich have not been provided for. The Legal Advisor reviews all contractualagreementsbeforetheyaresigned.MorecomplexagreementsarereferredtoexternalLawyersforreviewandadvice.

· Cash flow riskCash flow risk is the risk that future cash flows associated with monetaryfinancialinstrumentswillfluctuateinamount.Inthecaseofafloatingratedebtinstrument, for example, such fluctuations result in a change in the effectiveinterest rate of the financial instrument, usually without a correspondingchangeinitsfairvalue.

· Market riskMarketriskistheriskthatthevalueofafinancialinstrumentwillfluctuateasaresultofchangesinthemarket.Marketriskappliestoallinvestmentsaccounted

foratfairvalue.Marketriskcomprises:

Currency riskCurrency risk is the risk that thevalueofafinancial instrumentwillfluctuate,inNamibiaDollar,becauseofchangesinforeignexchangerates.TheFundisfullyawareoftheconstantfluctuationoftheinternationalcurrenciesrelativetotheNamibiaDollar (which isourbase reportingcurrency).TheFund throughitsdesignatedassetmanagers invests inassetsaroundtheglobe. It ispartofthemandateofthemanagerstoactivelymonitorandmanagecurrencyriskoftheseinvestmentsrelativetotheUSdollarandtheydothisthroughexposuretoanumberofdifferentcurrenciesandsecurities.

Fair value interest rate riskFairvalueinterestrateriskistheriskthatthevalueofafinancialinstrumentwillfluctuatebecauseofchangesinmarketinterestrates.

The Fund outsource themanagement of its assets to reputable assetmanagementfirms.Allthesefirmshaveestablishedriskmanagementpoliciesandproceduressupportedbyriskmanagementdepartmentswithskilledstaff.AllrisksassociatedwiththeinstrumentsinwhichGIPFfundsareinvested,arethereforemanagedbytheseassetmanagementfirms(i.e.cashflowrisk,marketrisk,currencyriskandfairvalueinterestraterisk).

Price riskPrice risk is the risk that the value of a financial instrument will fluctuate asa result of changes in market prices, whether those changes are caused byfactorsspecifictotheindividualinstrument,oritsissuer,orfactorsaffectingallinstrumentstradedinthemarket.

· Liquidity riskLiquidityriskistheriskthattheFundwillencounterdifficultyinraisingfundstomeetcommitmentsassociatedwithfinancialinstruments.TheFund’sliabilitiesarebackedbyappropriateassetsandithassignificantliquidresources.

12. Related party relationships

In consideringeachpossible relate-party relationship, attention is directed tothesubstanceoftherelationshipandnotmerelythelegalform.

Iftherehavebeentransactionsbetweenrelatedparties,theFundshalldisclosethenatureof the relatedparty relationshipaswell as theamount relating toeachrelatedpartyrelationship.

12.1 ContributionsTheFundreceivedcontributionspaidbytheparticipatingemployersduringtheperiod(refertonote7):

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• Theparticipatingemployersmadecontributiontowardsmembers’retirementandexpenses• TheparticipatingemployerscontributionspayabletoFund

13. Contingent liabilities

TheFundhasthefollowingfacilitieswithFirstNationalBankofNamibia:

· ContingentfacilitiesforaguaranteeissuedinfavourofBankWindhoekonbehalfofNamibiaProcurementFundamountingtoN$13.5millioninlieuofactualdrawdownoncommittedamount.

14. Investment commitments as at 31 March 2014

2014 2013 N$ million N$ million

Commitments Disbursed Undisbursed Commitments Disbursed Undisbursed Amounts Amounts Amounts Amounts Amounts

Business Financial Solutions 160 160 - 160 154 6 First Capital Treasury Solutions (Pty) Ltd 100 19 81 100 10 90 Kongalend Financial Services 150 95 55 150 66 84 Königstein Capital (Pty) Ltd 150 51 99 150 26 124 IJG Africa Alliance 160 58 102 160 21 139 Preferred Management Services 250 168 82 250 42 208 Old Mutual Investment Group Namibia 550 217 333 550 158 392 Safland Property Services Namibia 450 279 171 450 255 195 Sanlam Investment Management Namibia 250 5 245 250 4 246 VPB Namibia 160 56 104 160 49 111 Total amounts 2,380 1,108 1,272 2,380 785 1,595

GIPF House, Corner of Dr Kenneth David Kaunda & Goethe Streets, WindhoekPO Box 23500Windhoek Tel : (061) 205 1000Fax : (061) 205 1232 Email: [email protected]

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