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Investment Guidelines

Effective as of 15 May 2003

Based on Art. 3 of the Articles of Association, the Board of Directors of ProgressNow! invest AG has issued the following investment guidelines. These are available to interested parties upon request.

I. Fundamental Principles

1. Company Purpose

As stated in the company’s Articles of Association, the purpose of the company is inter alia as follows:
"The Company’s purpose is the direct or indirect acquisition, holding and management of participations in domestic and foreign listed and unlisted companies that are active in a field, or offer products or services, that make an active contribution to human well-being, in particular the holding of shares in ProgressNow! (Overseas) Ltd."

2. Basis of the Investment Policy

The basis of the investment policy is defined in Art. 3 of the Articles of Association and is as follows:

  • The investment objective is to increase the company’s value, with controlled risk, by investing the company’s assets globally in a diversified portfolio of listed and unlisted companies that are active in a field, or offer products or services, that make an active contribution to human well-being.
  • No investments will be made in the exploitation of non-renewable resources, the trade of endangered animal or plant species, the weapons industry, the tobacco industry, waste-intensive or environmentally harmful products or production processes, unhealthy or genetically modified foodstuffs and food additives, or companies whose business or production processes violate human rights or threaten the health and safety of their employees.
  • The company can borrow up to 30% of the consolidated net asset value.

 
II. Investment objective and strategy

1. Purpose

These investment guidelines apply to ProgressNow! invest AG and its subsidiary ProgressNow! (Overseas) Ltd (hereinafter referred to as “ProgressNow! invest Group"). The guidelines are binding for all investments. Investments that do not conform to the following guidelines may not be made. 2. Investment Strategy The ProgressNow! invest Group invests globally in companies that are active in a field, or offer products or services, that make an active contribution to human well-being. The investment focus is on companies in healthcare, education and environment, including renewable energy sources. Positive criteria for investments are:

  • a high degree of innovation
  • a revolutionary approach
  • a unique product or service
  • universal applicability
  • a long-term benefit to consumers
  • a minimum of negative side-effects.
 
No investments will be made in
  • the exploitation of non-renewable resources
  • the trade of endangered animal or plant species
  • the weapons industry
  • the tobacco industry
  • waste-intensive or environmentally harmful products
  • unhealthy or genetically modified foodstuffs and food additives
  • companies whose business or production processes violate human rights or threaten the health and safety of their employees.
 
Investments can be made
  • in privately held companies (venture capital to pre-IPO stage financing) and
  • in companies listed on an official stock exchange.
3. Investment Objectives

After allowing for risk factors, a medium and long term return of 15% p.a. is to be targeted. After taking into account the state of the economy and capital markets, the ProgressNow! invest Group invests the available assets in companies in accordance with the investment guidelines. Depending on the investment environment, liquidity amounting to several times the value of the investments may be held.

4. Investment Style

The investment style of the ProgressNow! invest Group is characterized by the building up of holdings based on a medium to long term view. The investment focus is on young, privately held companies with promising technological innovations. Investments take the form of blocks of shares (majority holdings or significant minorities) or co-investments with leading venture capitalists. Holdings in companies with above-average growth potential should be targeted. No restrictions exist regarding the regional focus of the companies in which the ProgressNow! invest Group may invest.

5. Weighting of Investments

5.1. Weighting of investments according to industries:

  • a maximum of 100% of investments in the healthcare segment
  • a maximum of 50% of investments in the education segment
  • a maximum of 50% of investments in the environmental segment including renewable energies
5.2. Weighting of investments according to a company's stage of development:
  • a maximum of 100% of investments in private equity
  • a maximum of 50% of investments in stock exchange listed companies
6. Selection Criteria

ProgressNow! advisers AG performs a constant market analysis. Companies corresponding to the criteria listed in paragraph II.2. are put on a screening list. The market prospects are evaluated and the risks analysed.
The following considerations in particular are decisive for an investment:

  • Is the investment in line with the investment guidelines?
  • Are the current strategic positions being strengthened after taking into account the opportunities and risks?
  • What is the development potential from a technological and market point of view?
  • Is the risk/return ratio appropriate?
  • Is the price appropriate?
7. Risk Diversification

As a general rule, at acquisition no single investment should exceed 30% of the consolidated net asset value of the company.

8. Hedging

Transactions with derivatives and options will only be made for hedging purposes.

9. Use of Leverage

In accordance with Art. 3 of the Articles of Association of ProgressNow! invest AG, the ProgressNow! invest Group can borrow up to 30% of the consolidated net asset value.

 
III. Short term deviations from the above investment guidelines

The company intends to keep a high investment degree. However, it is likely that at the beginning of the investment process, substantial cash positions will be held. Furthermore, the characteristics of private equity business may make it necessary to bridge short-term cash inflows. In both cases the ProgressNow! invest Group may invest in short-term (less than twelve months to maturity) and medium-term (no more than five years to maturity) debt securities or hold cash with prime banks. The company intends to invest only in debt securities that are rated A or better by Standard & Poor’s Ratings Group or Moody’s Investors Service Inc.


IV. Alterations to the investment guidelines

The investment guidelines can at any time be completely or partly altered or supplemented by resolution of the board of directors of ProgressNow! invest AG, provided the alterations are in accordance with the company purpose and Art. 3 of the Articles of Association.
According to Art. 22 of the Swiss stock exchange’s supplementary regulations for the listing of investment companies, the alteration of the guidelines must be published at least one month before it comes into effect in accordance with Art. 73 of the listing regulations. The new investment guidelines must be observed within a month of taking effect.

 
Frauenfeld, 11 April 2003
 

 

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