Zambia investment oppty

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2. 2
Na%onality:
Zambian
Languages:
English is the official language and is widely spoken. There are 73
dialects in Zambia, including Bemba, Tonga, Nyanja, Lozi, Luvale,
Lunda.
Major
Religions: ChrisGanity 97,5%, Islam-­‐Hindu and indigenous beliefs
Capital
City:
Lusaka
Climate:
Tropical
Terrain:
Mostly high plateau with few hills and mountains
Natural
Resources: Copper, cobalt, gold, nickel, diamonds, coal, emeralds,
uranium, water.
Land
Use:
Arable land: 60 million hectares. Only 15% of arable land is culGvated.
Time:
+2 hours of GMT
Country
code:
+260
Internet
Domain: .zm
Measures:
Metric system
• Zambia is a landlinked country located in
South-­‐Central region of Africa with a total
surface area of 752’614 km2, with a maximum
length of 1’206 km E–W and a maximum width
of 815 km N–S. Zambia shares a total
boundary length of 5’664 km with eight
countries namely: Tanzania, Malawi,
Mozambique, Zimbabwe, Botswana, Namibia,
Angola, and the DemocraGc Republic of the
Congo (DRC);
• Zambia has an esGmated populaGon of about
14,22 million people. Lusaka is the capital city
of Zambia with a populaGon of more than 1,5
million;
• Zambia’s rural areas are home to two thirds of
the total populaGon;
• ChrisGanity is the main religion, followed by
Islam with about 2,5% of the populaGon ;
• Currency – Zambian Kwacha (ZMW) = 100
Ngwee.
• Exchange Rate: The exchange rate is market
determined. Current Rate ~ 6,2 ZMW / 1 US$
• Main export commodiGes come from Mining &
Agriculture.
Source:
CIA
Factbook,
Finscope
Zambia,
Central
Sta9s9cal
Office,
Zambia

3. 3
Socio-economic profile
• The majority (62%) of the adult populaGon live in rural areas
• Almost half (47%) of the adult populaGon are under the age of 30 years
• More than half of the adult populaGon (56%) have only a primary school educaGon or
less
• Many adults get income on an irregular, inconsistent basis – income from farming and
self-­‐employment are the most relied upon sources of income:
• 50% of rural and 27% of urban adults do not have a regular monthly income
• Only 14% of urban adults earn a salary or wages from a company or business,
reducing to less than 3% for rural adults
• In rural areas, financial acGvity is driven by farming acGviGes, whereas in urban
areas self-­‐employment (running own business) feature more prominently
• Almost 80% of adults earn below K400 000 a month (US$1 = K5 145 (June 2010))
Female
51%
Male
49%
Gender distribution
Urban
38%
Rural
62%
Urban-rural distribution
10%
15%
12%
8%
17%
5%
8%
6%
12%
7%
Percentage Share of Population
by Province, Zambia, 2010
Central
Copperbelt
Eastern
Luapula
Lusaka
Muchinga
Northern
North-Western
Southern
Western

4. 4
FINANCIAL
PRODUCTS
PENETRATION
• Accessibility to banking products & services remains a problem.
Only about 13,9% of the populaGon have access to banking
products & services;
• Currently Zambian consumers pay for services such as Electricity,
water, etc. through the service provider service centers, retail
chain stores, super markets & mobile money operators e.g. Airtel,
MTN, POS -­‐ Kazang & Zoona;
• Payment terminals are an important tool for corporate cash
collecGon operaGons (LaFarge, Zambia Breweries);
• PotenGal micro-­‐payments market including Telcos top-­‐up is US$
175 million per month.
The Zambian Access Strand
• 37.3% of Zambian adults are financially served leaving 62.7% of
adults financially excluded (i.e. using no financial products –
formal or informal to manage their financial lives)
• 23.2% of Zambians adults are formally served: 13.9% have a bank
account and 9.3% have other formal financial products though
they do not have a bank account
• 14.1% of Zambians are informally served only (i.e. using only
informal financial products)
EXISTING
PAYMENTS
STRUCTURES
32%
23%
18%
17%
7%
2% 1% Total of 175 mln US$ Per Month
!!CASH!SERVICE
!!TELCOS
!!MUNICIPALITY!BILLS
!!TAXES!AND!FEES
!!FINANCE!PRODUCTS
!!INTERNET
!!PAY!TV
Source:
CIA
Factbook,
Cellpay,
Finscope
Zambia,
ZICTA

5. Another
Company
5
1,12$
4,59$
7,13$
9,68$
12,81$
563$
1$715$
2$867$
4$019$
5$171$
2014$ 2015$ 2016$ 2017$ 2018$
Revenue,$million$USD$
Quan;ty$of$installed$terminals$
REVENUE
&
TERMINAL
QUANTITY
DYNAMICS
Touch Four Pay Limited is a Zambian registered Company and
subsidiary of Bantec InternaGonal an e-­‐Commerce and Mobile
payments soluGon provider which has offices in Europe,
Northern America and Africa, with numerous terminals located
worldwide offering over 3000 mobile payment services;
• Workforce employees:
− Lusaka: 7 people (as at May, 2014)
− Other offices: 65 people.
• Signed contracts with main service providers and TELCOS;
• The company is currently conducGng online transacGon tests,
UATs & fine tuning integraGon parameters. Deployment of
terminals will start latest April 2014.
THE
COMPANY
SHAREHOLDING
STRUCTURE
HK
Individual
Individual
TOUCH FOUR PAY OFFICE
MAIN
AGENTS
100%
12%88%

6. 6
BUSINESS
DESCRIPTION
&
ARCHITECTURE
FORECAST;
GEOGRAPHICAL
LOCATION
OF
TERMINALS
info
info
cache
cache
cache
servise
bank
processing
Service Providers
“Touch4pay
offers
its
agents
a
special
proposal
for
Incasa9on/CIT
from
established
CIT
agents
such
as
ARMAGUARD”.
Dimensions: 198,5х55 ,5х39 ,5 cm
Weight: 136 kg.
Power consumption: < 200W
Storage temperature range: -10 …… +80 С
Operating temperature: +10 ……. +60 С
Terminal with 22” advertising screen
cost – US$ 3’800 + VAT
1000
1200
70
200
200
200
Total ~ 2’870 pcs
Maintenance
and
repair
of
terminals
§ spare parts and
consumables storage;
§ Repair terminals;
§ InstallaGon;
§ Servicing of terminals.
Maintenance
&
Support
Online
monitoring
system
§ Display;
§ Validator;
§ Fiscal printer;
§ Network;
§ Emergency sensor.
Online
Monitoring
system
2014-­‐2016

7. 7
• The Company was granted an Investment License under the ZDA Act of the
Laws Of Zambia; Key benefits:
ü Zero % taxes on dividends for 5 years from the first declaraGon;
ü Zero % taxes on profits for 5 years from the first announcement;
• Currently awaiGng the issuance of a Bank of Zambia designaGon License.

8. 8

9. 9
Risk Mitigation
1. Industry Life Cycle (The risk that the industry will
not grow fast enough to sustain the level of
investment)
The ICT Industry is projected to have a steady growth, which will be largely determined
by the World GDP growth, which influences disposable incomes and other industries
growth rates.
2. CompeGGon (The risk of losing market share due
to increased industry rivalry)
Strategic partnerships with players ,service industries and distributors.
3. New Entrants
TOUCH FOUR PAY will conGnually scan the market for new entrants and develop
strategies aimed at maintaining its market share through improvements in the quality
and variety of its service offering.
4. OperaGonal Gearing (The risk of loss due to high
fixed costs)
The Company has low fixed cost element projecGon in relaGon to the variable costs. This
means that TOUCH FOUR PAY's costs structure limits its exposure to loss due to high
overheads even when operaGng at low capacity.
5. Financial Risk (The risk of loss due to fraud or
thev)
1. The company intends to invest in an integrated IT and accounGng system, which will
monitor and manage the whole transacGon process.
2. The Company will seek to conGnuously review and improve on exisGng systems of
internal controls and financial management.
6. Human Resource Risk (Failure to recruit and
retain the right people)
1. The Company will seek complete reviews of the human resource management
systems and policies from Gme to Gme.
2. The Company will develop operaGonal manuals and systems to guarantee effecGve
management and staff; this is to involve both internal and external training. Seek
consultancy services when required.
7. Taxes and Compliance (Failure to comply with
tax legislaGon and industry standards)
The Company intends to InsGtute a programme of strict compliance with relevant taxes
and industry standards.

10. 10
P&L
USD
2013
2014
2015
2016
2017
2018
Turnover
total
16
839
171
104
330
880
203
898
240
303
465
600
403
032
960
Transac%on
turnover
14
034
900
96
235
200
192
484
800
288
734
400
384
984
000
Revenue
from
transac%on
689
238
2
081
980
3
410
631
4
739
282
6
067
933
Revenue
from
processing
services
7
200
293
760
708
480
1
123
200
1
537
920
Commission
from
agents
terminals
114
838
827
199
1
741
130
2
655
061
3
568
992
Commission
from
own
terminals
567
200
961
021
961
021
961
021
961
021
Marginality
of
the
terminal
services
4,9%
2,2%
1,8%
1,6%
1,6%
Revenue
from
adver%sing
315
936
1
491
840
2
708
352
3
924
864
5
141
376
Revenue
from
sales
of
terminals
118
250
1
015
872
1
015
872
1
015
872
1
601
776
Revenue
total
1
123
423
4
589
692
7
134
855
9
680
018
12
811
085
Expenses
-­‐234
925
-­‐772
410
-­‐729
746
-­‐874
014
-­‐1
085
832
-­‐1
216
940
Equipment
costs
-­‐64
250
-­‐45
100
-­‐43
300
-­‐26
000
-­‐34
250
-­‐20
250
Salary
-­‐50
300
-­‐329
935
-­‐398
446
-­‐516
264
-­‐646
082
-­‐773
640
Organiza%onal
and
administra%ve
expenses
-­‐120
375
-­‐397
375
-­‐288
000
-­‐331
750
-­‐405
500
-­‐423
050
EBITDA
-­‐234
925
351
013
3
859
946
6
260
841
8
594
186
11
594
145
Marginality
31,2%
84,1%
87,8%
88,8%
90,5%
Income
tax
Under
ZDA
Act
the
company
have
zero
percent
tax
on
profits
for
5
years
from
the
first
year
profits
are
made.
The
net
profit
-­‐234
925
351
013
3
859
946
6
260
841
8
594
186
11
594
145
Free
cash
flow
2013
2014
2015
2016
Free
cash
flow
-­‐234
925
351
013
3
859
946
6
260
841
Net
income
-­‐234
925
351
013
3
859
946
6
260
841
Deprecia%on
Capital
expenses
Changes
in
working
capital
WACC
25,00%
Discounted
cash
flow
-­‐234
925
280
811
2
470
365
3
205
550
Periods
0
1
2
3
Net
discounted
profit
5
721
801
CalculaYon
of
the
terminal
value
Free
cash
flow
6
323
449
The
growth
in
the
pos_orecasted
period
1%
A
terminal
value,
2013
26
347
705
PV
terminal
value
13
490
025
Cost
of
the
company
DCF,
2013-­‐2016
19
211
826

11. 11
COMPARATIVE
MULTIPLES
OF
PUBLIC
COMPANIES
REVENUE
DYNAMICS
AND
EBITDA
2014-­‐18
Company
Market
cap,
USD
Enterprise
Value,
USD
EV/Rev,
bm
EV/EBITDA,
bm
Visa
124,53
B
121,18
B
10,51
16,39
Mastercard
82,25B
77,16
B
9,87
16,99
Alliance
Data
Systems
10,20
B
18,57
B
4,69
15,39
Total
System
Services
5,55
B
5,5
B
2,91
12,77
Western
Union
9,3B
11,43B
2,06
7,64
FleetCor
9,10
B
9,84
B
12,24
22,45
Euronet
Worldwide
1,93
B
2,04
B
1,52
12,42
QIWI
2,44
B
2,24
B
6,32
28,18
Median
5,51
15,89
FINAL
EVALUATION
OF
THE
COMPANY
1,12
4,59
7,13
9,68
12,81
0,35
3,86
6,26
8,59
11,59
2014 2015 2016 2017 2018
Revenue, million USD
EBITDA, million USD
Parameter
2014
2015
2016
Valua%on,
mln
USD
Share
of
Valua%on,
mln
USD
Share
of
Valua%on,
mln
USD
Share
of
EV/Revenue
6,18
40%
25,27
40%
70,53
40%
EV/EBITDA
5,58
20%
61,33
20%
99,48
20%
DCF
1,23
40%
12,91
40%
19,21
40%
The
final
grade
4,08
100%
27,54
100%
55,79
100%
§ Company valuaGon is calculated on two methodologies: DCF and
mulGples of comparable companies.
§ Rates by DCF 2014-­‐2016 : US$ 19,21 million.
§ Rate mulGples:
− EV/Revenue 2015
US$ 25,27 million.
− EV/EBITDA 2015
US$ 61,33 million.
§ The average valuaGon of the company in 2015 US$ 27,54 million.
§ If to esGmate on the projecGons for 2016, weighted assessment of
the company will amount to US$ 55,79 million.