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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  countr ies   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  

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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

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 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  

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  

   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    

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•  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  

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  

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  

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.