Offer Period 1 April 2015 to 31 December 2015

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1 Key Terms

2 Key Terms Fund Providence Investment Funds PCC Limited (the Fund ) is a protected cell company registered in Guernsey under registration number and has been registered with the Guernsey Financial Services Commission as a registered fund. A protected cell company is a single legal entity which has the ability, under statute, to issue shares in separate cells. The assets and liabilities of each cell are segregated and protected by law. Investment Objectives To generate uncorrelated, fixed coupon absolute returns from investing in the factoring of receivables of small and medium sized businesses in Brazil. These receivables are typically 30 to 180 day in tenure and are purchased at a discount of approximately 2% to 4% per month. The receivables are generated by the Fund s Brazilian associates, Providence Fomento Mercantil, Investimento e Participacoes, Ltda and/or BPA Fomento Mercantil, Investimento e Participacoes, Ltda., which are licensed factoring companies and members of the Brazilian national factoring trade association, ANFAC. Fund Cells 42 closed ended cells distinct as to investment currency, term, distribution payment frequency and whether the cells benefit from political risk mitigation insurance or not (see table on page 4) Offer Period 1 April 2015 to 31 December 2015 Share Classes Three preference share classes in each cell, dependent on Investment Amount, (see table below) Investment Amount Minimum of US$50,000 / EUR37,500 / GBP30,000 / CHF45,000 Investment Term 18, 24, 36 or 48 months Distribution Payments Distribution cells - monthly or quarterly. Accumulation cells - income is rolled-up, compounded quarterly and paid at the end of the Investment Period Investment Return Between 7.00% per annum and 14.25% per annum depending on amount, term and distribution payment frequency (see table on page 4) Manager Providence Investment Management International Limited Administrator Lumiere Fund Services Limited Auditor PricewaterhouseCoopers CI LLP Bankers The Royal Bank of Scotland International Limited Management Fee Nil Administration Fee 0.5% per annum paid by the Manager Performance Fee All gains above the fixed investment returns paid to investors are paid to the Manager Investment Amount Class A Class B Class C US Dollars up to US$249,999 US$250,000 - US$499,999 US$500,000 and above Euros up to EUR187,499 EUR187,500 - EUR374,999 EUR375,000 and above Pounds Sterling up to GBP162,499 GBP162,500 - GBP324,999 GBP325,000 and above Swiss Francs up to CHF224,999 CHF225,000 - CHF449,999 CHF450,000 and above 2

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4 Investment Returns DISTRIBUTION CELLS CELL NAME CURRENCY DISTRIBUTION PERIOD RETURN (per annum) SHARE CLASS A SHARE CLASS B SHARE CLASS C 18 Month Monthly Distribution USD, EUR, GBP or CHF Monthly 18 months 9.50% 10.50% 11.50% 18 Month Quarterly Distribution USD, EUR, GBP or CHF Quarterly 18 months 10.75% 11.75% 12.75% 36 Month Monthly Distribution USD, EUR, GBP or CHF Monthly 36 months 11.00% 12.00% 13.00% 36 Month Quarterly Distribution USD, EUR, GBP or CHF Quarterly 36 months 12.25% 13.25% 14.25% ACCUMULATION CELLS CELL NAME CURRENCY DISTRIBUTION PERIOD RETURN (per annum, compounded quarterly) SHARE CLASS A SHARE CLASS B SHARE CLASS C 18 Month Accumulation USD, EUR, GBP or CHF On Maturity 18 months 10.75% 11.75% 12.75% 36 Month Accumulation USD, EUR, GBP or CHF On Maturity 36 months 12.25% 13.25% 14.25% POLITICAL RISK MITIGATION INSURED CELLS CELL NAME CURRENCY DISTRIBUTION PERIOD RETURN (per annum) SHARE CLASS A SHARE CLASS B SHARE CLASS C 24 Month Monthly Distribution USD, EUR or GBP Monthly 24 months 7.00% 8.00% 9.00% 24 Month Quarterly Distribution USD, EUR or GBP Quarterly 24 months 8.25% 9.25% 10.25% 24 Month Accumulation USD, EUR or GBP On Maturity 24 months 8.25% 9.25% 10.25% 48 Month Monthly Distribution USD, EUR or GBP Monthly 48 months 9.00% 10.00% 11.00% 48 Month Quarterly Distribution USD, EUR or GBP Quarterly 48 months 10.25% 11.25% 12.25% 48 Month Accumulation USD, EUR or GBP On Maturity 48 months 10.25% 11.25% 12.25% NB. The political risk mitigation insured accumulation cell returns are compounded quarterly. 4

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7 About Providence Providence Investment Management International Limited ( PIMIL ) is a Guernsey registered investment management company which is licensed by the Guernsey Financial Services Commission. PIMIL is part of The Providence Group which is a fast-growing, global business employing more than 200 people from 21 offices in 12 territories, across the developed and developing world. We are primarily focused on providing financial services and international trade finance. Our core specialism is providing the capital that firms around the world require to succeed. The failure of the banks to meet this need in the wake of the liquidity crisis has left a vacuum that the Providence Group is helping to fill. Fund Objectives The Fund s investment strategy is to generate attractive, uncorrelated, fixed coupon absolute returns from investing in the factoring of receivables of small and medium sized businesses in Brazil. For that purpose, The Providence Group has two Brazilian subsidiaries, Providence Fomento Mercantil, Investimento e Participacoes, Ltda and BPA Fomento Mercantil, Investimento e Participacoes, Ltda, to purchase such receivables in the open and longstanding domestic Brazilian factoring market. Liquidity Early redemptions will not be permitted where the Investment Term is either 18 months or 24 months. However, where the Investment Term is either 36 months or 48 months, early redemptions may be permitted either 18 months or 24 months respectively after the subscription date at the discretion of the Fund s directors, subject to at least 30 days prior written notice to the Administrator, and the Fund reserves the right to levy an early redemption penalty of up to 1%. Structure The Fund enters into a contractual loan agreement with either Providence Fomento Mercantil, Investimento e Participacoes, Ltda or BPA Fomento Mercantil, Investimento e Participacoes, Ltda, pursuant to which the Fund provides finance to enter into a series of debt factoring contracts in Brazil in the course of normal day-to-day business activities. The Fund regularly receives agreed sums to enable it to meet its distribution commitments to the Fund s investors and to cover the charges set out herein and its other expenses. In the event that market conditions in Brazil vary to the extent that the average monthly discount (as published by the Brazilian national factoring trade association, Associação Nacional das Sociedas de Fomento Mercantil ( ANFAC )) falls below 2.0% per month, the Fund s ability to pay the agreed investment return will be restricted and the Fund s assets may therefore include cash and/or bonds with a view to providing returns to investors as effectively as possible. Charges There are no fixed charges to investors from PIMIL, which only receives its performance fee after the fixed investment returns have been paid to investors. The Administrator charges 0.5% per annum and this is paid by PIMIL. All other charges, fees and expenses, including any introductory fees paid to financial intermediaries who refer investors, are paid by PIMIL after the fixed investment returns have been paid to investors. 7

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9 Background to Factoring in Brazil Known in Brazil as Fomento Mercantil, factoring is a service activity that includes ongoing advisory work on credit, risk, accounting, inventory and working capital management, in tandem with the irrevocable purchase of credit rights, in the form of receivables that arise from the sale of goods or services, with maturities ranging from 30 to 300 days (but usually up to 180 days). The factoring company assumes the credit risk associated with the negotiable instruments, which has remained historically low for the last 10 years due to the severe penalties existing for defaulted credits. Factoring must be based on commercial sales and is governed by Brazil s Civil Code. It can be conducted only with legal persons or enterprises and not with individuals. The most common accounts receivable are duplicatas (commercial invoices), which account for almost 60% of all factoring receivables. Others are cheques, bills of exchange, bills of lading, warrants, promissory notes and post-dated cheques. The latter can be issued to cover mercantile sales and, as a habit dating from the country s high inflationary years in the 1980s when consumer credit was virtually non-existent, have evolved to the extent that they became the norm. As a result the Brazilian Central Bank now monitors and regulates this form of nationally accepted payment. In the latter half of the twentieth century, the introduction of computers eased the accounting burdens of factors and enhanced their ability to obtain information about a debtor s creditworthiness, while the Internet has accelerated the process and reduced costs. Today, credit information and regulatory controls are in effect any time of the day or night on-line and Brazil has one of the most advanced and controlled cheque processing systems in the world. Its point-of-sale systems provide background and activity information on the cheque issuer to such an extent that in many countries it would be a violation of privacy laws. In addition, if an individual s cheque bounces twice, the issuer s accounts at every single banking institution in the country are automatically closed and they lose their privilege to open any other bank accounts for 5 years. These factors go a long way to explaining why Brazil s total national default rate on cheques is only around 2.0%. There are over 700 known factoring companies in Brazil, which provide services to more than 65,000 small and medium sized enterprises. 80% of these enterprises belong to the industrial sector, with creditor rights arising from mercantile sales amounting to a monthly turnover of around US$10 billion, or around 6% of all domestic sources of financing. Factoring companies employ more than 6,000 people and are estimated to provide a further 710,000 indirect employment opportunities. Thus, factoring is a sizeable industry in Brazil and an important source of finance for many firms. Factoring in Brazil Key Points Factoring is an important alternative to the banking sector for the financing of small and medium sized enterprises. Given the high barriers to entry into the formal banking system, factoring companies have found an important market niche. Factoring enables quick and, by Brazilian standards, relatively inexpensive access to financing. Whereas an annual interest rate of 48% for any loan product is considered unacceptably high in many developed Western economies, in Brazil it is regarded as the cheapest form of financing available to the average borrower. Alternative sources such as bank credit based on the discounting of invoices, personal or consumer overdraft facilities or credit cards, can cost in excess of 10% per month. Providence Fomento Mercantil, Investimento e Participacoes, Ltda and BPA Fomento Mercantil, Investimento e Participacoes, Ltda, are licensed factoring companies in Brazil and members of the Brazilian national factoring trade association ANFAC, specifically the only foreign-owned entities that hold such membership in Brazil. ANFAC is authorised by the Brazilian Central Bank as a self regulatory body to regulate the domestic factoring market. 9

10 Brazil Current Outlook The Brazilian economy enjoys a stable outlook. Emerging markets in general, and Brazil in particular, enjoyed a fast recovery from the 2008/09 global financial crisis and today, Brazil offers many exciting and stable opportunities as the most dynamic of the BRIC economies: It has an investment grade credit rating from all major credit rating agencies following nearly 20 years of conservative economic policy and is a lender to the International Monetary Fund. Its exports and retail sales are increasing, its inflation is under control, there is continuing and sustainable economic growth, a stable political environment, expanding lower and middle economic classes and increasing demand for consumer credit. Direct foreign investment increased to over 650% between 2003 and 2012, GDP per capita is increasing and unemployment rates continue to fall. Brazil is energy independent and in 2007 the world s largest offshore oil reserves were discovered off the coast of Rio de Janeiro. Last year Brazil hosted the 2014 FIFA World Cup and next year is hosting the 2016 Olympic Games with an anticipated combined positive contribution to the country s economy of over US$120 billion. During the 1990s, the Brazilian economy did not experience the same level of robust growth as other major emerging economies like India, Russia and China. But in the last two decades Brazil has evolved to become the 7th largest economy in the world (and briefly eclipsing the UK as the 6th largest in December 2011) and has been growing at an average rate of over 3% per year. Beginning shortly after the settling of global economic changes and the election of Luiz Lula Da Silva in the 2002 Brazilian presidential elections, economic growth has been consistent and supported by a development cycle of significant investments. As the largest and most populous country in South America and the fifth largest country in the world in both area and population, Brazil is well-positioned for those positive trends to continue. The nation has well-developed manufacturing, mining, agricultural and service industries, as well as a large labour pool and as a result foreign investors are pouring money into the economy. In this short time Brazil has gone from being a borrower nation to being a contributor to the International Monetary Fund and has posted healthy trade surpluses for each of the last 13 years. Although Brazil s household debtto-income ratio has been increasing recently, at around 44% it compares favourably with the advanced economies of the UK at 146%, the U.S. at 108% and Japan at 124%. The government of Brazil is stable and the inflation rate is now low and under control as a result of policies instituted by its Central Bank. Brazil has also been able to build up significant reserves in excess of $350 billion which will mitigate the effects of further deterioration in global economic conditions. In no small part, Brazil s miraculous transformation in recent years has been due to its thriving factoring industry that provides the liquidity spurring the growth of Brazil s small and medium sized businesses. Factoring has been a way of life in Brazil for decades with over US$90 billion of receivables now being purchased by factoring companies each year. The good news about Brazil has been in abundance in recent years and whilst, like all countries, its government has some challenges to tackle, the economy continues to move forward and grow. It has enjoyed an increasing balance of payments surplus, continued government commitment to fiscal discipline and inflation control, increasing export volume growth, stable interest rates and strong foreign direct investment, all of which are expected to continue to strengthen the economy and fulfill the prophesy of Brazil being the country of the future. 10

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12 Key Risks Credit Risk Investors are reliant on the Fund, PIMIL, the Administrator, the Fund s bankers and the Fund s Brazilian factoring associates to fulfil their obligations in respect of the investment strategy. The payment of the investment return is dependent on the success of the investment strategy, which is only suitable for experienced and sophisticated investors who can afford the risk inherent in this type of investment. Redemption Investors may be entitled to redeem their investments in the Fund before maturity but, if they do, they may not receive the full amount of invested capital. Any redemptions prior to maturity will be permitted solely at the discretion of the Fund s directors. General Risks The value of the underlying risk investment may be influenced by complex and inter-related political, economic, financial and other factors that affect cross-border investment markets generally. Investment in the Fund may expose investors to many different risks including, without limitation, interest rate, foreign exchange, time value and/ or political risks. Past performance does not guarantee or predict future performance. Investors may also be exposed to foreign exchange risk, to the extent that they invest in investments denominated in a currency other than their home currency. This document should be read in conjunction with the Fund s Scheme Particulars and any relevant Supplemental Particulars. Please refer to the Risk Factors section contained therein. Taxation Investors should not treat the contents of this fact sheet as advice relating to legal, taxation, investment or other matters. Prospective investors should consult their stockbroker, accountant, lawyer, independent financial adviser or other professional adviser to ascertain the consequences of them investing in, holding, redeeming and/ or receiving distributions from the Fund under the relevant laws of the jurisdiction to which they are subject, including the tax and any exchange control requirements. Under current legislation in Guernsey, there are no Guernsey income or withholding taxes payable in respect of their Fund shares by investors in the Fund who are not residents of Guernsey. There are no death duties, capital inheritance taxes, capital gains taxes or stamp duty payable in Guernsey in connection with the acquisition, holding or disposal of the Fund s shares and, therefore, at present, neither the Fund nor any non-guernsey resident shareholder in the Fund will suffer any tax in Guernsey on capital gains. Payments made by the Fund to non-guernsey shareholders, whether made during the life of the Fund or by distribution on the liquidation of the Fund, will not be subject to Guernsey tax. 12

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14 Business Service Providers Administrator Lumiere Fund Services Limited PO Box 268, Mill Court, La Charroterie, St. Peter Port, Guernsey GY1 3QZ T: F: E: Auditors PricewaterhouseCoopers CI LLP PO Box 321, Royal Bank Place, 1 Glategny Esplanade, St Peter Port, Guernsey GY1 4ND Bankers The Royal Bank of Scotland International Limited PO Box 62, Royal Bank Place, 1 Glategny Esplanade, St Peter Port, Guernsey GY1 4BQ Manager Providence Investment Management International Limited PO Box 268, Mill Court, La Charroterie, St. Peter Port, Guernsey GY1 3QZ Legal Advisers in Guernsey Collas Crill PO Box 140, Glategny Court, Glategny Esplanade, St Peter Port, Guernsey GY1 4EW Important Information This document has been issued and approved by PIMIL. Although information and any opinions in this document have been obtained from sources believed to be reliable, PIMIL does not represent or warrant their accuracy, and such information may be incomplete or condensed. Past performance is not a guide to future performance and the income from it can rise as well as fall as a result of currency and market fluctuations and you may not get back the amount originally invested. This publication is for private circulation and information purposes only and does not constitute a personal recommendation or investment advice or an offer to buy or sell or an invitation to buy or sell securities in any fund referred to. No responsibility can be accepted for any consequential loss arising from the use of this information. The information is expressed at its date and is issued only to and directed only at those individuals who are permitted to receive such information in accordance with Guernsey laws and regulations. In some countries the distribution of this publication may be restricted. It is your responsibility to find out what those restrictions are and observe them. The Fund is not authorised or regulated under the provisions of the Financial Services and Market Act Accordingly, the Fund is an Unregulated Collective Investment Scheme and cannot be promoted or sold in the United Kingdom, other than under the exemptions permitted by the Act, in particular, the Financial Services and Market Act 2000 (Participation of Collective Investment Schemes) (Exemptions) Order The Fund may not be offered or sold in the United States or to U.S. persons at any time (as defined in Regulation S under the U.S. Securities Act of 1933 or the U.S. Internal Revenue Code). The Fund has not been and will not be registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any state in the United States and is subject to U.S. tax requirements. In purchasing the Fund, you represent and warrant that you are neither located in the United States nor a U.S. person and that you are not purchasing for the account or benefit of any such person. The Fund may not be offered, sold, transferred or delivered without compliance with all applicable securities laws and regulations. The Fund is registered with, and PIMIL is licensed by, the Guernsey Financial Services Commission. 14

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16 Providence Investment Management International Limited PO Box 268, Mill Court, La Charroterie, St. Peter Port, Guernsey GY1 3QZ T: KT_0415