Information to the Unit Holders

Transcription

1 Information to the Unit Holders CONCERNING THE MERGER OF Raiffeisen Český balancovaný fond (an investment fund under Austrian law) (the Merging UCITS 1 ) and Raiffeisen CZK LifeCycle Fund 2040 (an investment fund under the Austrian Federal Act on Investment Funds 2011) (the Merging UCITS 2 ) into Raiffeisen fond pravidelných investic, otevřený podílový fond, Raiffeisen investiční společnost a.s. (an investment fund under Czech law) (the Receiving UCITS ) PREAMBLE Raiffeisen Kapitalanlage-Gesellschaft m. b. H. (hereinafter referred to as Raiffeisen KAG ) is a Management Company holding a licence issued by the Austrian Financial Market Authority (hereinafter referred to as FMA ), in the sense of Section 1(1)no(13) of the [Austrian] Federal Banking Act (Bankwesengesetz BWG) (hereinafter referred to as BWG ), in combination with Article 6(2) of the [Austrian] Federal Act on Investment Funds 2011 (Investmentfondsgesetz 2011 InvFG 2011) (hereinafter referred to as InvFG 2011 ). The company is incorporated in the Companies Register registered by the Commercial Court in Vienna under the company register number of 83517w and its head office and registered office are in Vienna. The company business address is at Schwarzenbergplatz 3, A-1010 Wien. Raiffeisen Kapitalanlage-Gesellschaft m. b. H. acts as the UCITS Management Company of the UCITS investment fund, which is supposed to be merged in keeping with the following provisions and by the merger the investment fund shall be dissolved: Raiffeisen Český balancovaný fond (hereinafter also referred to as Merging UCITS 1 ). Raiffeisen CZK LifeCycle Fund 2040 (hereinafter also referred to as Merging UCITS 2 ) (the Merging UCITS 1 and Merging UCITS 2 together the Merging UCITSs ). Raiffeisen investiční společnost a.s., with its registered office at Hvězdova 1716/2b, Praha 4 - Nusle, Company no. (IČ): , incorporated in the Companies Register administered by the Municipal Court in Prague, Section B, File no (hereinafter referred to as RIS ) represents an UCITS management company in the sense of Act no. 240/2013 Collection of Laws (hereinafter Coll. ), Act on Management Companies and Investment Funds (hereinafter referred to as the Act ), which has been issued the appropriate licence by the Czech authority in charge of supervising the capital markets the Czech National Bank (hereinafter referred to as CNB ). Raiffeisen investiční společnost a.s. acts as the manager and the administrator of the collective investment fund, which is supposed to be merged in keeping with the below described provisions and which is to become the Receiving UCITS: Raiffeisen fond pravidelných investic, otevřený podílový fond, Raiffeisen investiční společnost a.s. (hereinafter referred to as the Receiving UCITS ). (The Receiving UCITS and the Merging UCITS jointly hereinafter referred to as the Funds Involved ). The Merger of the Funds Involved was approved by the Austrian Financial Markets Authority (FMA). Any units issued by the above-described funds will hereinafter be described as Units and their owners as Unit Holders. a) Manner of merger and identification of the Funds Involved The Funds Involved will merge pursuant by way of a merger of the Merging UCITS with the legal form of an Austrian common fund in accordance with the InvFG and Czech UCITS investment fund pursuant to Section 3(2)no(15)(a) in combination with no 16 (a) of InvFG 2011 (so-called cross-border merger ). Raiffeisen Český balancovaný fond and Raiffeisen CZK LifeCycle Fund 2040 (the Merging UCITSs) will - on being dissolved without going into liquidation transfer all of its assets and liabilities to Raiffeisen fond pravidelných investic, otevřený podílový fond, Raiffeisen investiční společnost a.s. (the Receiving UCITS) in exchange for the issue to its Unit Holders of units of the receiving UCITS (gross merger by acquisition pursuant Sec 3 para 2 no 15 lit a in combination with no 16 lit a InvFG, Section 398(1)(d) of the Act). Pursuant to Section 398(2) of the Act and Section 126 (1) of InvFG 2011, the merger results in the termination of the Merging UCITS. The Merging UCITS shall be dissolved without liquidation and its assets shall become part of the assets of the Receiving UCITS. After expiry of the stipulated term the Unit Holders of the Merging UCITSs shall become Unit Holders of the Receiving UCITS as of the Effective date of the merger.

2 The merger shall involve the following funds: 1. Raiffeisen fond pravidelných investic, otevřený podílový fond, Raiffeisen investiční společnost a.s. (Receiving UCITS) The fund was established by way of its entry in a list kept by the CNB pursuant to Sections 108(1) and 597(b) of the Act, executed as of Class A1 (capitalisation) of the fund was allocated the following ISIN: CZ Class A2 (dividend) of the fund was allocated the following ISIN: CZ Class A3 (RSTS) of the fund was allocated the following ISIN: CZ Class A4 (regular investment) of the fund was allocated the following ISIN: CZ A notification issued by the RIS regarding marketing of investments in the standard fund in another Member State pursuant to Section 302 of the Act was filed with the CNB on The Units of the fund may be marketed commencing on in the Republic of Austria, on the basis of a notification of the CNB pursuant to Section 303(3) of the Act. The Units of the fund have been marketed only in the Czech Republic and in the Republic of Austria. 2. Raiffeisen Český balancovaný fond (Merging UCITS 1) The fund was established pursuant to the notice from the FMA dated July 19, 2007, ref. no. FMA-IF /0001-INV/2007. The Units of the fund were issued commencing on 11 December Class VTA (full capitalisation outside Austria) of the fund was allocated the following ISIN: AT0000A063V6. Based on a notification in accordance with the Act and the Austrian Investment Fund Act 1993, the Units of the Merging UCITS 1 have been registered in the Czech Republic on 10 September The Units of the Merging UCITS 1 have been marketed by means of public distribution only in the Czech Republic. 3. Raiffeisen CZK LifeCycle Fund 2040 (Merging UCITS 2) The fund was established pursuant to the notice from the FMA dated June 30, 2010, ref. no. FMA-IF /0001-INV/2010. The Units of the fund were issued commencing on 3 November Class VTA (full capitalisation outside Austria) of the fund was allocated the following ISIN: AT0000A0AJPH4. Based on a notification in accordance with the Act and the Austrian Investment Fund Act 1993, the Units of the Merging UCITS 2 have been registered in the Czech Republic on 30 August The Units of the Merging UCITS 2 have been marketed by means of public distribution only in the Czech Republic. b) Rationale for merger, background and incentives for the merger Common funds in the Czech Republic are not subjected to the so-called tax transparency regime where Unit Holders as the beneficiary owners, rather than the fund itself, are considered as the taxable entity, who are then required to pay tax themselves on their income generated through their tax transparent fund. On the contrary, funds established under Austrian law (including the Merging UCITSs) fall under tax transparent entities. The amended Czech Income Tax Act introduced as of 1 January 2013 a new withdrawal tax rate (35%) applicable to income generated by EU non-residents (and residents of states outside the EU that have not concluded the relevant tax treaties) in the CR; this has resulted in some unexpected impacts on revenues from tax transparent funds. Individual beneficiaries of either interest or dividend income received from Czech legal entities shall be required to evidence their tax domicile; otherwise they will be required to pay the 35% withdrawal tax rate in full. As regards transparent funds, this means that they are required to evidence the tax domiciles of all of their Unit Holders so that they become eligible for the application of the mere 15% rate as applied to Czech residents. This is quite an administratively demanding process. The best instrument serving the resolution of the consequences of the tax transparency policy on the Merging UCITSs distributed in the Czech Republic via Raiffeisenbank a.s., with its registered office at Hvězdova 1716/2b, Praha 4, Company no. (IČ): , incorporated in the Companies Register administered by the Municipal Court in Prague, Section B, File no. 2051, is seen in a cross-border merger of the Merging UCITSs with a Receiving UCITS ( mirror fund ), which is to be newly established especially for that purpose and which applies an almost identical investment strategy as the Merging UCITSs. Therefor Receiving UCITS and Merging UCITSs are not funds with significantly different type of investments. Cross-border merger is allowed both under the Act and under InvFG 2011, which duly determine the rules governing its implementation. Furthermore Merging UCITSs have quite low total capital and current and predictable subscriptions does not show any positive progress. Merger of Merging UCITSs should allow also more efficient fund management. In accordance with the InvFG 2011 and the Act the merger is neither subject to approval by the unit-holders of the Receiving UCITS nor by the unit-holders of the Merging UCITSs.

3 c) The expected impact of the merger on the Unit Holders The depositary of the Receiving UCITS: UniCredit Bank Czech Republic and Slovakia, a.s., with its registered office at Želetavská 1525/1, Praha 4, Czech Republic, Company no. (IČ): , incorporated in the Companies Register administered by the Municipal Court in Prague, Section B, File no The depositary of the Merging UCITSs: Raiffeisen Bank International AG, with its registered office at Am Stadtpark 9, 1030 Wien, Republic of Austria, incorporated at the Commercial Court in Vienna under the file number FN m. 1. Impacts on the Unit Holders of the Merging UCITS 1 The Unit Holders of the Merging UCITS 1 will become the Unit Holders of the Receiving UCITS subject to a pre-established exchange ratio as of the Effective date of the merger. Raiffeisen KAG and RIS strongly advise investors to read the attached key investor information of the Receiving UCITS. Graphical description of the Funds Involved: Source: Key Investor Information, Fund Regulations, Fund Prospectus Goals and investment policy Raiffeisen fond pravidelných investic, otevřený podílový fond, Raiffeisen investiční společnost a.s. (Receiving UCITS) Raiffeisen fond pravidelných investic is a mixed fund, whose investment goal is to achieve a long-term growth of the capital measured in CZK. It will be achieved by allocating the money collected in the Fund in bonds, money market instruments and bond funds (totalling not less than 50 percent and not more than 70 percent of the assets), in particular those denominated in CZK, and/or currencies hedged in CZK. Not less than 30 percent of the assets and not more than 50 percent of the assets will be invested to equity and instruments bearing equity risks, focusing in particular on Central and Eastern Europe and other emerging markets. The Fund is managed actively and does not intend to follow any specific index or indicator. Other funds units may form up to 10 percent of the Fund assets. Derivative instruments may be used as part of the fund s investment strategy for up to 100 per cent of the fund s assets and primarily for hedging purposes. Raiffeisen Český balancovaný fond (Merging UCITS 1) Raiffeisen Český balancovaný fond is a mixed fund, whose investment goal is moderate capital growth. It mainly invests (at least 51 per cent of its fund assets) in equities, investment funds and bonds denominated in Czech crowns and in equity funds from Eastern Europe, Eurasia and global emerging markets. The bonds and money market instruments featured in the fund may be issued by sovereigns, supranational issuers and/or companies etc. The overall risk for derivative instruments which are not held for hedging purposes is limited to 50 % of the fund assets. The fund is actively managed and is not limited by means of a benchmark. The fund may invest more than 35 per cent of its fund assets in securities or money market instruments issued or guaranteed by the Czech Republic. Units in other investment funds may account for up to 65 % of the fund s assets. Derivative instruments may be used as part of the fund s investment strategy for up to 49 per cent of the fund s assets and for hedging purposes. Risk and revenue / reward profile Recommended minimum investment horizons SRRI: 4 SRRI: 4 10 years 10 years Ongoing charges 2,15% (estimate for the 1 st accounting period) 1,76% Entry charge (surcharge) / Exit charge (deduction) Entry charge Class A1 and A2 up to 3% Entry charge Class A3 up to 4% Exit charge Class A4 up to 4% Entry charge Class VTA up to 3% No exit charge is applicable to any of the classes Performance fee not applicable not applicable Investment strategies The Funds Involved represent undertakings for collective investment in transferable securities (UCITS), investing in various asset classes (bonds, equities etc.), in particular those denominated in CZK, and/or hedged into CZK. Risk profiles and recommended minimum investment horizons of the Receiving UCITS and the Merging UCITS 1 are conformable.investment policies of the Receiving UCITS and the Merging UCITS 1 are very similar. In both cases, there is a neutral asset-allocation of 60% in bonds (primarily CZK denominated or hedged into CZK) and 40% in equities / equity funds etc. In case of the Merging UCITS 1, territorial focus of the equity investments is Czech Republic, Central and Eastern Europe, Eurasia and global emerging markets. In case of the Receiving UCITS, these are in particular regions mentioned above (i.e. the minor

4 part of the equity subportfolio could be invested also in equities and similar instruments in the U.S., Western Europe, Japan etc.). Thus, investments of the Receiving UCITS unit holders are therefore better diversified in comparison to investments of the Merging UCITS 1 unit holders. For the Unit Holders of the Merging UCITS there are not expected any changes in anticipated performance because of similar investment strategies. With caused by the merger no dilution of the performance is expected. Tax treatment of incomes RIS will implement the acquisition costs of the assets of the Merging UCITS 1 in the fund accounting of the Receiving UCITS in accordance with Article 186 (4) of InvFG As of the Effective date of the merger all incomes and costs of the Merging UCITS 1 are deemed as incomes and costs of the Receiving UCITS. All ordinary (interests, dividend) and extraordinary (exchange rates profits) incomes arising until the Effective date of the merger are to be settled for tax purposes by the Merging UCITS 1 while any applicable Austrian capital gain tax until the Effective date will be deducted by the deposit holding entity. Austria (Unit Holders subject to Austrian tax law) At unit level the fund merger does not lead to a realization and is therefore neutral from a tax perspective. Unit certificates which have been acquired prior to 1 January 2011 remain so called old holdings (Altbestand). These are holdings which may be redeemed without any deduction of Austrian capital gain tax. Unit certificates which have been acquired after 31 December 2010 are so called new holdings (Neubestand) which status is not affected by the merger. Czech Republic (Unit Holders subject to Czech tax law) Merger of Merging UCITS 1 into Receiving UCITS is for Czech tax purposes considered as a neutral operation and thus shall, in principle, not have any negative tax implications for Unit Holders. The exchange ratio shall be calculated in a way that no benefit or loss will be incurred by the Unit holders. For Merging UCITS 1, the period of holding the investment should continue to be calculated as from the moment of its original acquisition without interruption of this period by the merger with the Receiving UCITS. Consequently, the tax-free time test of 6 months (for investments purchased prior 31/12/2013) or 3 years (for purchases after 1/1/2014) shall not be anyhow influenced by the merger. Financial period and periodic reports The financial period of the Merging UCITS 1 extends from 1 December until 30 November. The financial period of the Receiving UCITS is calendar year from 1 January until 31 December. Upon the termination of the Merging UCITS 1 by way of its merger with the Receiving UCITS, the financial year will extend to the calendar year from 1 January until 31 December. At the same time, the effective date for the payment of dividends for the previous financial year to Unit A2 (dividend) Holders will fall on 31 May of the next subsequent year. Costs Unit Holders of the Merging UCITS1 according to the projected values will incur higher current costs as a result of the merger as the ongoing charges of the Receiving UCITS amount up to 2,15% versus 1,76% of the Merging UCITS 1. Unsettled and regular investments Clients of Raiffeisenbank a.s., who invest in the Merging UCITSs by way of once-off or permanent payment orders, will be cautioned about the changes related to the merger of the funds and they will be invited to modify their permanent payment orders. If it still occurs that any funds belonging to the clients would be credited in the term commencing on (inclusive) to the an investment collecting account with a specific symbol corresponding to such clients investments in the Merging UCITSs, such incoming payments may be forwarded to the investment collection account of the Receiving UCITS, subject to the issuance of the relevant Units only in keeping with the settlement terms after the lapse of the term of interruption of issuance and redemption of Units. For the purposes of the merger of the funds, issuance and redemption of Units will be interrupted during the term from 1 December 2014 (inclusive) until 15 December 2014 (inclusive). 2. Impacts on the Unit Holders of the Merging UCITS 2 The Unit Holders of the Merging UCITS 2 will become the Unit Holders of the Receiving UCITS subject to a pre-established exchange ratio as of the Effective date of the merger.

5 Graphical description of the Funds Involved: Source: Key Investor Information, Fund Regulations, Fund Prospectus Goals and investment policy Raiffeisen fond pravidelných investic, otevřený podílový fond, Raiffeisen investiční společnost a.s. (Receiving UCITS) Raiffeisen fond pravidelných investic is a mixed fund, whose investment goal is to achieve a longterm growth of the capital measured in CZK. It will be achieved by allocating the money collected in the Fund in bonds, money market instruments and bond funds (totalling not less than 50 percent and not more than 70 percent of the assets), in particular those denominated in CZK, and/or currencies hedged in CZK. Not less than 30 percent of the assets and not more than 50 percent of the assets will be invested to equity and instruments bearing equity risks, focusing in particular on Central and Eastern Europe and other emerging markets. The Fund is managed actively and does not intend to follow any specific index or indicator. Other funds units may form up to 10 percent of the Fund assets. Financial derivatives are used for hedging purposes and further they might be purchased within the investment strategy, while the overall derivative exposure is set by key parameters of the fund (interest rate risk, currency risk, credit risk,limits of the asset classes) in the prospectus of the fund. Raiffeisen CZK LifeCycle Fund 2040 (Merging UCITS 2) Raiffeisen CZK LifeCycle Fund 2040 fond is a mixed fund, whose investment goal is moderate capital growth. It may invest in bonds and money market instruments issued by countries, supranational issuers and/or companies etc., in all types of other securities and in sight deposits and deposits at notice. An investment horizon for the unit holder up to the year 2040 is assumed. The attributable risk amount for the overall risk calculated as the value-at-risk amount for the investments held in the fund may not exceed 20 % of the net asset value of the fund assets (absolute VaR). The fund is actively managed and is not limited by means of a benchmark. The fund may invest more than 35 % of its fund assets in securities/money market instruments issued by the following issuers: Germany, France, Italy, Great Britain, Switzerland, USA, Canada, Australia, Japan, Austria, Belgium, Finnland, Netherlands, Sweden or Spain. Units in other investment funds may account for up to 100 % of the fund s assets. The fund may acquire derivative instruments which are not held for hedging purposes. The fund may also mainly invest in derivatives. The total market risk amount (absolute VAR) for all of the fund s investments may not exceed 20 per cent of the net asset value of the fund s assets. Risk and revenue / reward profile Recommended minimum investment horizons SRRI: 4 SRRI: 5 10 years 10 years Ongoing charges 2,15% (estimate for the 1 st accounting period) 2,11% Entry charge (surcharge) / Exit charge (deduction) Entry charge Class A1 and A2 up to 3% Entry charge Class A3 up to 4% Exit charge Class A4 up to 4% Entry charge VTA up to 3,50% No exit charge is applicable to any of the classes Performance fee not applicable not applicable Investment strategies The Funds Involved represent undertakings for collective investment in transferable securities (UCITS), investing in various asset classes (bonds, equities etc.), in particular those denominated in CZK, and/or hedged into CZK. The Risk profile indicator SRRI is in case of the Receiving UCITS 4, while in case of the Merging UCITS 2 is 5. Recommended minimum investment horizons of Receiving UCITS and of the Merging UCITS 2 are comparable. Furthermore, as the Effective date of the merger comes closer, there is an intention to make portfolios of both Merging UCITSs more conservative, with an aim to move their Risk profiles closer to that of Receiving UCITS. The Merging UCITS 2 is a mixed fund with variable asset allocation, investing in wide range of financial instruments (so called diversified beta approach is applied on the part of the portfolio). The fund is primarily designed for investors expecting to retire at around the year Hence, the investment goal is to build-up capital (primarily via risky investments - equities etc.) in the period of and its gradual preservation starting in Since 2040, the fund should be invested just in bonds and money market instruments with max. 3 years average maturity. The Receiving UCITS is a mixed fund with neutral asset allocation of 60% in bonds (primarily CZK denominated or hedged) and 40% in equities, focusing in particular on Central and Eastern Europe and other emerging markets. Thus, investments of the Receiving UCITS unit holders are currently (and till the period of ) less diversified and more conservative in comparison to investments of the Merging UCITS 2 unit holders. Therefore the risk indicator SRRI of the key investor information document of the Receiving UCITS is 4 and lower as the SRRI of the Merging UCITS 2 which is 5 while such

6 lower risk may also lead to reduced earning chances. It should, however, be noted that in the case of no merger the risk profile of the Merging UCITS 2 would become less risky and more conservative in the period of The Merging UCITS 2 unit holders are to be aware of the fact, that in case of the positive development of the capital market after merger, lower evaluation may occur and in case of the negative development of the capital market lower devaluation may occur. With caused by the merger no dilution of the performance is expected. Tax treatment of incomes RIS will implement the acquisition costs of the assets of the Merging UCITS 2 in the fund accounting of the Receiving UCITS in accordance with Article 186 (4) of InvFG As of the Effective date of the merger all incomes and costs of the Merging UCITS 2 are deemed as incomes and costs of the Receiving UCITS. All ordinary (interests, dividend) and extraordinary (exchange rates profits) incomes arising until the Effective date of the merger are to be settled for tax purposes by the Merging UCITS 2 while any applicable Austrian capital gain tax until the Effective date will be deducted by the deposit holding entity. Austria (Unit Holders subject to Austrian tax law) At unit level the fund merger does not lead to a realization and is therefore neutral from a tax perspective. Unit certificates which have been acquired prior to 1 January 2011 remain so called so called old holdings (Altbestand). These are holdings which may be redeemed without any deduction of Austrian capital gain tax. Unit certificates which have been acquired after 31 December 2010 are so called new holdings (Neubestand) which status is not affected by the merger. Czech Republic (Unit Holders subject to Czech tax law) Merger of Merging UCITS 2 into Receiving UCITS is for Czech tax purposes considered as a neutral operation and thus shall, in principle, not have any negative tax implications for Unit Holders. The exchange ratio shall be calculated in a way that no benefit or loss will be incurred by the Unit holders. For Merging UCITS2, the period of holding the investment should continue to be calculated as from the moment of its original acquisition without interruption of this period by the merger with the Receiving UCITS. Consequently, the tax-free time test of 6 months (for investments purchased prior 31/12/2013) or 3 years (for purchases after 1/1/2014) shall not be anyhow influenced by the merger. Financial period and periodic reports The financial period of the Merging UCITS 2 extends from 1 November until 31 October.The financial period of the Receiving UCITS is calendar year from 1 January until 31 December. Upon the termination of the Merging UCITSs by way of its merger with the Receiving UCITS, the financial year will extend to the calendar year from 1 January until 31 December. At the same time, the effective date for the payment of dividends for the previous financial year to Unit A2 (dividend) Holders will fall on 31 May of the next subsequent year. Costs Unit Holders of the Merging UCITS 2 will incur slightly higher current costs as a result of the merger, as the ongoing charges of the Receiving UCITS amount up to 2,15% versus 2,11% of the Merging UCITS 2. Unsettled and regular investments Clients of Raiffeisenbank a.s., who invest in the Merging UCITSs by way of once-off or permanent payment orders, will be cautioned about the changes related to the merger of the funds and they will be invited to modify their permanent payment orders. If it still occurs that any funds belonging to the clients would be credited in the term commencing on (inclusive) to the an investment collecting account with a specific symbol corresponding to such clients investments in the Merging UCITSs, such incoming payments may be forwarded to the investment collection account of the Receiving UCITS, subject to the issuance of the relevant Units only in keeping with the settlement terms after the lapse of the term of interruption of issuance and redemption of Units. For the purposes of the merger of the funds, issuance and redemption of Units will be interrupted during the term from 1 December 2014 (inclusive) until 15 December 2014 (inclusive). 3. Impacts on Unit Holders of the Receiving UCITS The merger will result in increased assets of the Receiving UCITS to the extent equal to the assumption of the assets of the Merging UCITSs, accompanied by the corresponding issue of new Units. Although the Merging UCITSs are of SRRI 5 and Receiving UCITS is of SRRI 4 risk profile of the Receiving UCITS will not by impacted during the merger and Unit Holders of Receiving UCITS will not be exposed to higher risk. No changes of the investment strategies of the Receiving UCITS are envisaged. For the Unit Holders of the Receiving UCITS the merger should not result in difference in expected evaluation. With caused by the merger no dilution of the performance is expected. The Unit Holders of the Receiving UCITS will incur no additional costs because the transaction costs related to the merger of the funds and incurred by the Receiving UCITS shall be borne by the manager of the Receiving UCITS.

7 For the purposes of the merger of the funds, issuance and redemption of Units will be interrupted during the term from 1 December 2014 (inclusive) until 15 December 2014 (inclusive). Composition of the assets in the Funds Involved No potential material changes in the portfolio composition of the Funds Involved are expected by RIS and Raiffeisen KAG prior to the Effective date of the Merger. RIS does not expect any substantial impact on the portfolio of the Merging UCITS and does not intend to change the portfolio after merger. Regular reporting of the Funds Involved No potential material differences with respect to the regular reporting are expected by RIS and Raiffeisen KAG with the exception of the changes of the financial period as stated above. d) Calculation method applied in the determination of exchange ratio The exchange ratio is the ratio, to which on the Effective date of the merger the units of the Merging UCITSs will be exchanged into the units of the Receiving UCITS. RIS shall ensure, not later than within one month of the Effective date of the merger, exchange of the Units issued by the Merging UCITSs for Units of the Receiving UCITS. Graphical description of the merger of the different share classes and the calculation method of their exchange ratios: Share class / ISIN (Merging UCITS 1) Class VTA (full capitalisation outside Austria) units / ISIN: AT0000A063V6 Share class / ISIN (Receiving UCITS) Class A1 (capitalisation) units / ISIN: CZ Exchange ratio as of the Effective date of merger will be determined as follows: 1NA = Total of (1A * 1XA)/A1 1NA 1A XA A1 Number of Units of the Receiving UCITS issued for Unit Holders of the Merging UCITS 1 Class VTA as of the Effective date, rounded down to zero decimal digits Fund capital of the Merging UCITS 1 per one Class VTA Unit as of the end of the last business day preceding to the Effective date, expressed with accuracy of two decimal places; Number of Units held by the Merging UCITS 1 Class VTA Unit Holders as of the end of the last business day preceding to the Effective date, expressed with accuracy of three decimal places; Fund capital of the Receiving UCITS per one Class A1 Unit as of the end of the last business day preceding to the Effective date, expressed with accuracy of four decimal places. If no Class A1/A2 Units of the Receiving UCITS are issued as of the Effective date of the merger, then the value of the above-described A1/A2 parameter equals CZK (one Czech crown). Share class / ISIN (Merging UCITS 2) Share class / ISIN (Receiving UCITS) Exchange ratio as of the Effective date of merger will be determined as follows: Class VTA (full capitalisation outside Austria) units / ISIN: AT0000A0JPH4 Class A1 (capitalisation) units / ISIN: CZ NA = Total of (2A * 2XA)/A1 2NA 2A 2XA A1 Number of Units of the Receiving UCITS issued for Unit Holders of the Merging UCITS 2 Class VTA as of the Effective date, rounded down to zero decimal digits Fund capital of the Merging UCITS 2 per one Class VTA Unit as of the end of the last business day preceding to the Effective date, expressed with accuracy of two decimal places; Number of Units held by the Merging UCITS 2 Class VTA Unit Holders as of the end of the last business day preceding to the Effective date, expressed with accuracy of three decimal places; Fund capital of the Receiving UCITS per one Class A1 Unit as of the end of the last business day preceding to the Effective date, expressed with accuracy of four decimal places. If no Class A1/A2 Units of the Receiving UCITS are issued as of the Effective date of the merger, then the value of the above-described A1 parameter equals CZK (one Czech crown). The Class A1 / A2 Units of the Receiving UCITS will be credited to the accounts of the clients of the individual distributors of the Merging UCITS and the individual distributors will then have credited without any undue delay the units to the asset accounts of the Unit Holders.

8 Other information regarding the exchange of Units No Units of the Merging UCITSs will be exchanged for Class A3 (RSTS) Units, CZ and Class A4 (regular investments) Units, CZ of the Receiving UCITS. Units of the Funds Involved are issued in bearer and in dematerialized registered form (i.e. with no effective units to be issued), and denominated in Czech crown (CZK). Pecuniary top-up in case of unreasonable exchange ratio Since the exchange ratio for the exercising of the right to exchange is sufficiently reasonable with view to the fact that the net asset value of the Receiving UCITS will at the Effective Date amount around CZK 1 (one Czech crown), the manager of the Receiving UCITS will not provide the Unit Holders of Units issued by the Merging UCITSs with any pecuniary compensation (topup). e) Specific rights of the Unit Holders in respect to the merger Redemption right By publishing the Information on the proposed merger to the investors Unit holders of the Merging UCITS have the right to redeem their units pursuant Sec 123 InvFG 2011 until the , redemption orders arriving latest by 13:30h at the depositary bank Raiffeisenbank International AG, without any further costs charged by the asset management company. By publishing the Information on the proposed merger to the investors Unit holders of the Receiving UCITS have the right to redeem their units pursuant to 406 (1) (a) of the Act until the , without any further costs charged by the asset management company. Information right / Right for receipt of the Closing Report Unit holders of the Funds Involved have the right upon request to receive additional information and a copy of the approval report of the independent auditor. Such requests are to be directed to Raiffeisenbank a.s. Hvězdova 1716/2b, Praha 4 - Nusle, Tel , info@rb.cz or Raiffeisen Kapitalanlage-Gesellschaft mbh. Schwarzenbergplatz 3, 1010 Vienna Tel /0, info@rcm.at, of Czech investors: rcm-international@rcm.at Unit Holders are to be provided with all information and documents in accordance with the prospectus of the Receiving Fund. Upon request, the RIS or Raiffeisen KAG will provide the currently valid version of the prospectus, key investors information, the annual fund report and the semi-annual fund report of the Receiving fund free of charge. These documents may be obtained from the website in Czech and English language and with respect to the prospectus and the key investors information also in German language. Rights as Unit Holders of the Funds Involved In case Unit Holders of the Funds Involved will not exercise right to redeem their Units, they have also the right - where possible - to have the Units converted into units or book-entry units issued by RIS, resp. Raiffeisen KAG pursuant to Sections 406(1)(a) or 406(1)(b) of the Act and Articles 123no(1) or 123no(2) of InvFG 2011, in the same deadline. Unit holders of the Merging UCITS who decide not to redeem or convert their Units will become Unit Holders of the Receiving UCITS and, as such, entitled to all Unit Holders rights. The Unit Holders will be entitled to redeem their units starting with 16 December f) Planned effective date of the merger The planned effective date of the merger date falls on (hereinafter referred to as Effective date of the merger ). The Merging UCITSs will be dissolved as of the Effective date of the merger and the Unit Holders of that fund will become Unit Holders of the Receiving UCITS. The Effective date of the merger also means the date as of which the assets of the Merging UCITSs from the accounting point of view are deemed to become the assets of the Receiving UCITS. g) Rules of transfer of assets and exchange of Units As of the Effective date of the merger all assets of the Merging UCITSs will be transferred to the Receiving UCITS. At the same time all Unit Holders of the Merging UCITSs will receive in accordance of the exchange ratio, calculated according to the

9 descriptions in the sections d), units of the Receiving UCITS. These units will be credited to the Unit Holders on their securities accounts with the value date of the Effective date. RIS as the management company of Receiving UCITS shall confirm to the depositary of the Receiving UCITS that the transfer of assets and liabilities is complete. h) Implementations of the merger on Unit Holders rights Unit holders of the Merging UCITSs will receive units of the Receiving UCITS and as such have the same rights as in case of the Merging UCITSs, in particular a direct ownership right with respect to the fund s assets and the right to redeem their units according to the prospectus of the Receiving UCITS. i) Merger costs Unit Holders of the Involved Funds will not incur any additional costs as a result of the merger. The incurred transaction costs will be borne by RIS. j) Relevant aspects relating to the Procedure, issuance and redemption of units. For the purposes of the merger of the funds, issuance and redemption of Units of the Involved Funds will be interrupted during the term from 1 December 2014 (inclusive) until 15 December 2014 (inclusive). Prague, dated Raiffeisen investiční společnost a.s.: Mgr. Martin Vít (Vice Chairman of the Board of Directors) Ing. Michal Ondruška (Member of the Board of Directors) Vienna, dated Raiffeisen Kapitalanlage-Gesellschaft m. b.h.: Mag. Michael Höllerer (Geschäftsführer) Mag. Rainer Schnabl (Geschäftsführer) Annex Key Investor Information Document of the Receiving UCITS

10 KEY INVESTOR INFORMATION This document provides you with key investor information about this fund. It is not marketing material. The information is required by law to help you understand the nature and the risks of investing in this fund. You are advised to read it so you can make an informed decision about whether to invest. Raiffeisen fond pravidelných investic, otevřený podílový fond, Raiffeisen investiční společnost a.s. (Raiffeisen Regular Investments Fund, open-ended mutual fund, Raiffeisen investiční společnost a.s.), (hereinafter the Fund ) Class A1 - Capitalisation Class A2 - Dividend Class A3 - RSTS Class A4 Regular Investments ISIN: CZ ISIN: CZ ISIN: CZ ISIN: CZ The fund is a standard securities fund. The Investment Company that manages the Fund (the Management Company): Raiffeisen investiční společnost a.s., Registered Number (IČ): (hereinafter also the Company ). OBJECTIVES AND INVESTMENT POLICY The characteristics of the Fund are that of a mixed investment fund. The Fund s object is to achieve long-term increase in the Fund capital measured in CZK, primarily by way of investments in equity, bonds and units of other funds denominated in Czech crowns, and/or equity funds focusing on Central and Eastern Europe and other emerging markets. To a smaller extent, it may also invest in bonds denominated in selected foreign currencies and money market instruments (including term deposits, etc). The bonds and money-market instruments in the Fund portfolio may be issued by governments, supranational organisations, and corporations. Other funds units may form up to 10 percent of the Fund assets. The Fund may also invest in financial derivatives as part of its investment strategy; they may mainly serve for currency hedging. Investments in investment securities or money market instruments issued or guaranteed by the Czech Republic may comprise up to 70 percent of the value of the Fund assets. More detailed information is available in Chapter 8 of the Fund Prospectus. The performance of the Fund is measured in CZK. The Fund is managed actively and does not copy or follow any specific index or indicator. The Company cannot guarantee the achievement of the investment aim and no third party guarantees for protection of the investors are provided. Fund units are issued and redeemed usually on each business day for the current value set in accordance with the Fund Prospectus. Further information about unit issues and redemption is specified in Chapter 13 of the Fund Prospectus. The Fund issues various types of units designated in short as Classes A1, A2, A3, and A4 units. Class A1, A3 and A4 units comprise capitalisation units and Class A2 units are dividend units. More specific information on the various classes of the units will be specified in the CHARGES section of this statement and in Chapter 14 of the Fund Prospectus. Recommendation: The fund may not be suitable for investors planning to recover their invested pecuniary funds within a term shorter than ten years. RISK AND REWARD PROFILE Potentially lower reward Potentially higher reward Lower risk Higher risk The Fund is placed in Risk Group 4. The Synthetic Indicator 1 to 7 takes into account the fluctuation of the value of the units and shows the potential reward of investments in relation to the degree of risks inherent in the Fund. The higher the number, the higher the potential reward but the less foreseeable the reward, and investors could therefore suffer a loss. However, even the lowest number does not mean that an investment is entirely free of any risk; it rather indicates that in comparison to higher numbers the investment offers a lower but more foreseeable reward. In view of the date of the establishment of the Fund, the actual historical values of the Units cannot be used, so the calculation is based on modelled trends derived from the expected placement of assets. The indicator value was determined based on historical information, which is not always a reliable guide when it comes to the future risk profile of the Fund. The risk and reward indicator is regularly re-assessed and its value can fluctuate up and down. A typical investor should be aware of the risks associated with investments in equity and bonds (including but not limited to market risk, currency risk, interest-rate risk, credit risk, risk of lack of liquidity, and emerging markets risk) and should be prepared to accept the risk of possible loss resulting from investments. The value of investments can rise and fall. No return on such investments is guaranteed. More detailed information is available in Chapter 9 of the Fund Prospectus.

11 CHARGES One-off charges taken before or after you invest Entry charge Class A1 Class A2 Class A3 Class A4 (a surcharge paid by investors from invested amounts) up to 3% up to 3% up to 4% 0% Exit charge (a deduction of the redeemed amount) 0% 0% 0% up to 3% This is the maximum that might be taken out of your money before it is invested or before the proceeds of your investment are paid out. Details about the current amounts of entry and exit charge can be obtained from your financial advisor or distributor, or from Charges taken from the fund over a year (such costs are reflected in the performance of the relevant investment, they are not billed directly to the investor) Ongoing charge (TER) Class A1 Class A2 Class A3 Class A4 2.15% 2.15% 2.15% 2.15% The amount of the Ongoing Charges for the initial period of the existence of the Fund was determined by way of a qualified estimate. Investors can familiarise themselves with the actual amount for a specific year at Charges taken from the fund under certain specific conditions (such costs are reflected in the performance of the relevant investment, they are not billed directly to the investor) Performance fee The aforementioned charges and costs are used, inter alia, to cover the costs of the operation of the Fund, including any costs of public offerings and promotions, and they reduce potential investment growths. Further information about such charges and costs can be found in Chapter 14 of the Fund Prospectus. HISTORICAL PERFORMANCE none Calculations of the past performance are based on the value of the Fund equity. In view of the date of the establishment of the Fund, no sufficient data are currently available that could provide investors with a useful picture of the performance of the Fund so far. Due to this reason the present chart does not contain any information about the past performance of the Fund. More detailed information is available in Chapter 10 of the Fund Prospectus. PRACTICAL INFORMATION Fund depositary: UniCredit Bank Czech Republic and Slovakia, a.s. Contact point for additional information: Raiffeisen investiční společnost a.s. Address: Hvězdova 1716/2b, Praha 4 Hotline: info@rb.cz, Copies of the Prospectus and the latest Annual Reports and Semi-annual Reports for the Fund are available free of charge in Czech at sales points or at the Company registered office or in the electronic format at the website The Company will compensate investors in the Fund for detriment arising to them if the data specified in this statement of key information are unclear, untruthful, misleading or deceptive, or are not in accordance with the data specified in the Fund Prospectus; otherwise, it will not compensate for detriment arising to investors through other incorrectness or incompleteness of data specified in the statement of key information. The mutual fund was authorised in the Czech Republic. The Investment Company managing the Fund is authorised in the Czech Republic and regulated by the Czech National Bank. This document with key investor information was executed in Czech and English language. In case of any discrepancy between the Czech and English wording the Czech version shall prevail. This Key Investor Information is accurate as at 27 May 2014