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BUSINESS PLAN
TREVO CAPITAL LTD
(“TREVO” OR THE “COMPANY”)
23 November 2015
1
lelephone
KPMG Advisory Services Ltd
KPMG Centre
31, Cybercity
Ebene
Mauritius
Fax
BAN No.
Website
Our ref
The Directors
Trevo Capital I .td
3rd Floor, La Croisette
Grand Baie
+230 406 9999
+230 406 9988
C06010081
www .kprng.rnu
HBB/ral/220915
13 November 20 15
Oear Sirs
Report of the Independent Financial Advisor
KPMU Advisory Services Ltd (''KPMG") was appointed by Trevo Capital Ltd {the " Company")
to review the business plan prepared by the Company in the context of a listing on the Stock
Exchange of Mauritius Ltd ('"SEM") in accordance with Chapter 18 of the Listing Rules.
Scope of work
Our scope and limitations are set out in our engagement letter to Trcvo Capital Lld. We have
performed such specific procedures as we believe appropriate in the context of the objectives of
the engagement. We emphasise that these procedures are limited in nature and the scope of the
work to be pcrlom1cd is less than that for an audit of financial statements and cannot be relied
upon to provide the same level of assurance as an audit.
Key review considerations
We have undertaken the following procedures in our review of the Company's busi ness plan:
•
Obtained an understand ing of the structure ofTrevo Capital I.td;
•
Read the <.:Ontcnls o f the Company' s business plan;
•
Reviewed the fin ancial forecasts for the period from 2015 to 2018 (the "Forecast Period")
and the underl ying assum ptions;
•
Reviewed the process for the preparation o r the financia l forecasts;
•
Reviewed the reasonableness o f the material ass umptions in the financia l forecasts relating
to revenue growth and margins;
•
Reviewed the sensitivity analysis on th e material assumptions to assess the risks of
delivering the forecasts financial perlonnance; and
•
Held discussions with management of the Company on the contents of the business plan and
the assumptions underlyi ng the financ ial forecasts.
KPMG Adv1so1y Su1v11,."f:ts l td. a Maurmu11 i.1111i..cJ l1ilbd11v comp1mv
and a rnembcn fiun of the KPMG n~tw-o1 lc ui nl(loµiunch;m rmtrnt>&t
tirms atht1ated v.Mh KPM G luh.1m;,it1orn.1I C:ooperu11vo t"KPMG
\ntemattooa1· i. ts Swiss enuw.
Trevo Ct1pitt1l ltd
Repurt ofthe /11depe11de11t Financial Advisor
13 November 2015
Conclusion
Based on our review of the assumptions underlying the preparation of the business plan, we are
of the view that the assumptions applied are reasonable under the c urrent circumstances. We are
therefore of the view that the business plan prepared by Trcvo Capital Ltd demonstrates the
viability of the business over the Forecast Period.
On the basis of the indicative terms of the Preference s hares specified on pages 18 to 19 of the
business plan and the interpretation in accordance with Internat ional Financial Reporting
Standards ("IFRS"), the Preference shares have been classified and shown as Equity in the
business plan of the Company.
Our review is based on prevailing conditions and KPMG's view as at I2 November 2015.
KPMG has not undertaken to nor shall KPMG be under any obligation to update this report or
revise the information contained in this report for events or circumstances arising after the 12
November 2015 and this report or any information contained in this report shall not amount to
any form of guarantee that KPMG have determined or predicted future events or circumstances.
Limitations
This engagement has not been performed by us in the capacity as a Licenced Auditor and does
not constitute an audit or review, due diligence, or other assurance engagement or an agreedupon procedures engagement, performed in accordance with International Standards on
Auditing (ISAs), International Standards o n Review Engagements (ISREs), International
Standards on Assurance Engagements {ISAEs) or International Standards on Engagements to
perform Agreed-upon Procedures regardi ng Financial Information .
The realisation of the forecasts/projections prepared by the Company is dependent on the
continuing validity of the assumptions on which they are based. The assumptions will need to
be reviewed and revised to re nect such changes in trading patterns, cost structures or the
direction of the business as they emerge. We accept no responsibility for the realisation of' the
projections.
Independence
We confinn that we have no direct or indirect interest in the shares ofTrevo Capital Ltd.
Yours faithfull y
Huns Biltoo
Partner
2
TABLE OF CONTENTS
Page
1.
2.
3.
4.
DEFINITIONS
4
EXECUTIVE SUMMARY
6
INTRODUCTION
7
1.1 About Us
7
1.2 Why Mauritius?
7
1.3 Listing on the SEM
7
1.4 Creation of value to shareholders
7
1.5 Local Service Providers
8
CORPORATE INFORMATION
9
2.1 Group Structure
9
2.2 Company’s Mission and Long Term Aims
10
2.3 Management Team
10
2.4 Company’s Historical Milestones
12
MARKET RESEARCH
13
3.1 Industry Description and Trends
13
3.2 Target Market
13
3.3 Opportunities/Threats/Challenges in the Industry
13
3.4 Competitors Profile and Competitive Advantage
14
BUSINESS STRATEGY
15
4.1 Current Objectives
15
4.2 Preference Shares
18
4.3 SWOT Analysis
19
4.4 Risk Factors and Risk Management
20
2
5.
6.
7.
HISTORICAL FINANCIAL INFORMATION
23
5.1 Reporting
23
5.2 Statement of Comprehensive Income
23
5.3 Statement of Financial Position
24
5.4 Statement of Changes in Equity
24
5.5 Statement of Cash Flow
25
FINANCIAL FORECASTS AND ASSUMPTIONS
26
6.1 Financial Forecasts
26
6.2 General Assumptions
28
6.3 Specific Assumptions and Analysis
28
6.4 Scenario Analysis
30
FUNDING REQUIREMENTS
32
Annexure A
Audited Financial Statement of the Company for the period ended 28
February 2015
33
Annexure B
Detailed Projected Asset Allocation as at 31 December 2018
34
Annexure C
Forward Sale Agreement
36
Annexure D
Listed Portfolio
37
3
DEFINITIONS
In this Business Plan, unless the context indicates otherwise, references to the singular include the plural and
vice versa, words denoting one gender include the others, expressions denoting natural persons include juristic
persons and associations of persons and vice versa, and the words in the first column have the meanings stated
opposite them in the second column, as follows:
“the Company” or “Trevo”
Trevo Capital Ltd (formerly Arro ETF Management Limited),
a company registered as a public limited company under the
laws of Mauritius and holding a Category 1 Global Business
License issued by the FSC;
“directors” or “the board” or “board of directors”
the directors of the Company as at the date of this Business
Plan, further details of whom appear in Section 2.3 below;
“Forward Sale Agreement”
the Forward Sale Agreement entered into between the
Company and Treemo, further details of which are
contained in Section 4.1 and a signed copy of which is
attached as Annexure C;
“FSC”
the Financial Services Commission of Mauritius;
“GBL1”
a category one Global Business Licence issued under the
Financial Services Act 2007;
“ISDA”
International Swaps and Derivatives Association;
“Listed Portfolio”
the portfolio of shares in Steinhoff International Holdings
Limited, listed on the JSE, to be purchased by the Company
in terms of the Forward Sale Agreement, as detailed in
Annexure D;
“Mauritian Companies Act”
the Mauritian Companies Act 2001 (Act 15 of 2001) as
amended;
“Mauritius”
the Republic of Mauritius;
“MUR” or “Rs”
the Mauritian Rupee;
“NACA”
Nominal annual compounded annually;
“NAD” or “N$”
Namibian Dollars, the legal currency of Namibia;
4
“NSX”
the Namibian Stock Exchange, which is licenced as an
exchange in terms of the Stock Exchange Control Act 1 of
1985, as amended;
“Preference Shares”
the non-redeemable, non-participating preference shares in
the stated capital of the Company denominated in ZAR;
“SEM”
the Stock Exchange of Mauritius Ltd established under
the repealed Stock Exchange Act 1988 and now
governed by the Securities Act 2005 of Mauritius;
“SEM Official Market”
the Official List of the SEM;
“Treemo”
Treemo (Pty) Ltd, a private company incorporated under the
laws of South Africa;
“USD” or “$”
US Dollars, the legal currency of the United States;
“ZAR”
South African Rand, the legal currency of the Republic of
South Africa;
5
EXECUTIVE SUMMARY
Trevo, previously known as Arro ETF Management Limited, was incorporated in Mauritius on 9 November 2009
and its core business is related to strategic investments in a strategically selected group of assets. The Company
has applied to be listed on the Stock Exchange of Mauritius under Chapter 18 of the Listing Rules, with a
secondary listing on the Namibian Stock Exchange (NSX).
The Company’s reason for listing is to raise capital in a regulated environment, to ensure transparency in terms
of disclosure to shareholders and accountability for management actions.
The Company has been dormant since incorporation and aims to raise capital during its listings on the SEM and
NSX in order to fund its business activities.
The Company intends to list 600,000 non-voting, non-redeemable preference shares denominated in ZAR, with
a fixed dividend yield of 7%, with an equivalent value in USD of $600,000, on the SEM and 313,000,000 of the
same class of preference shares, with a USD value of $313,000,000, to be dual listed on the NSX. The Company
intends to raise additional sums of $50 million in 2017 and $50 million in 2018.
The Company has entered into the Forward Sale Agreement with Treemo (Pty) Ltd, in terms of which it will
acquire from Treemo the Listed Portfolio, valued at approximately the ZAR equivalent of $313 million, which
purchase price will be settled either in cash or by the issue to Treemo of an equivalent number of preference
shares. It is possible that the value of the Listed Portfolio may have increased or decreased by the time the
Forward Sale Agreement is executed, and in such event, the capital raised and number of shares to be issued on
the NSX will increase or decrease accordingly.
Trevo will be led by a strong team of individuals with diverse experience, ranging from financial advisory and
taxation to banking, and have a successful track record in business management and creating value for
shareholders.
Trevo’s medium term target is to grow its total gross assets to approximately $585 million for the period ended
31 December 2018. The assumptions underlying the forecasts are outlined in detail in Sections 6.2 and 6.3 below
and are based on several factors, including dividends, unrealised gains, etc.
The Company’s long-term objective is to establish a strategically selected global portfolio of assets that will
consist of various listed and unlisted investment securities across a range of asset classes (including property).
The intention is to carefully select a number of strategic holdings, as opposed to a portfolio approach.
6
1.
INTRODUCTION
1.1
About Us
Trevo, previously known as Arro ETF Management Limited, was incorporated in Mauritius as a Category 1
Global Business License company on 9 November 2009.
The Company is seeking a primary listing on the SEM, with a secondary listing on the NSX, of 313,600,000
non-redeemable, non-participating preference shares denominated in ZAR.
The Company’s long-term objective is to establish a strategically selected global selection of assets that
will consist of various listed and unlisted investment securities across a range of asset classes (including
property).
1.2
Why Mauritius?
Mauritius has a conducive environment to stimulate private investment and growth, improving the
competitiveness and productivity as well as ensuring sustainable development for its economy, its people
and the environment. Mauritius stands as a first choice location for the incorporation of the Company,
through its geographical, cultural, economic and fiscal point of view, in order to excel throughout the
Indian Ocean region.
Mauritius is well-renowned for its business friendly environment and its investor-friendly laws and is one
of the reasons the Company is seeking a listing in Mauritius is to take advantage of this.
1.3
Listing on the SEM
It is envisaged that a listing on the SEM will facilitate greater and more flexible access to the global markets
and the targeted investors for the execution of the Company’s long-term strategic plan.
1.4
Creation of value to shareholders
The Company will issue Preference Shares to select international shareholders. These Preference Shares
will earn an annual fixed dividend yield of 7.00%, quoted as a NACA rate, and calculated on an actual/365
basis, payable at the discretion of the directors.
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1.5 Local service providers
Company secretary and company administrator
Legal advisor as to Mauritian law
Osiris Corporate Solutions (Mauritius) Limited
3rd Floor, La Croisette
Grand Baie
Mauritius
C&A Law
Suite 1005, Level 1
Alexander House
35 Cybercity
Ebene, 72201
Mauritius
SEM authorised representative and listing sponsor
Auditors
Capital Markets Brokers Ltd
Ground Floor, Alexander House
35 Cybercity
Ebene, 72201
Mauritius
KPMG
KPMG Centre
31 Cybercity
Ebene, 72201
Mauritius
Independent Financial Advisor
Registrar and Transfer Agent (Mauritius)
KPMG Advisory Services Ltd
KPMG Centre
31 Cybercity
Ebene, 72201
Mauritius
Mauritius Computing Services Ltd
18 Edith Cavell Street
Port Louis
Mauritius
8
2.
CORPORATE INFORMATION
2.1 Company Structure
Company Structure before SEM listing
Osiris Corporate Solutions (Mauritius) Ltd as trustee of Trevo Holdings Trust (“the Trust”) is a 100%
ordinary and preference shareholder of the Company. The Trust was established in terms of the laws of
the British Virgin Islands on 7 September 2015. The beneficial owner of the Trust is Miles Walton.
The Company’s structure, following listing, will be as follows:
Osiris Corporate Solutions (Mauritius)
Ltd as trustee of Trevo Holdings Trust
(British Virgin Islands)
(Beneficial owner: Miles Walton)
100% Ordinary Shareholder
100% Preference Shareholder
Trevo Capital Ltd
(Mauritius)
Listed Portfolio
Activities of Trevo
In order to provide value to its investors, the Company will first establish a strategically selected global
portfolio of strategic investments in order to facilitate capital growth and, once established, will thereafter
consider additional long-term investments. The Companies principal activities will thus consist of the
following:

Raise funding from the listing on the SEM and NSX;

On listing on the NSX, the Company will hold a significant stake in the Listed Portfolio, a blue-chip,
internationally listed Company, with the intention to sell down this stake relatively quickly;

Manage its investments in order to achieve high capital growth and investment income;

Seek investment from a number of select international investors, of which the Company has
already received interest; and

Consider additional feasible, long-term investment opportunities, preferably in the retail and
property sectors.
9
The Company is committed to increasing its asset base progressively to provide value to its shareholders
and will continue to evaluate potential opportunities consistent with its objective and strategy.
2.2 Company’s Mission and Aims
In order to meet the Company’s long-term objective, it will be the Company’s initial aim to accumulate
financial resources. The Company is aiming to have gross assets to the value of $585 million for the period
ended 31 December 2018.
2.3 Management Team
Board of Directors
The Board of the Company will be responsible for the management of the Company and strategic decision
making and implementation. All decisions in connection with investments, including without limitation
approving acquisitions, financings and dispositions of investments and effecting transactions will be taken
and implemented by the Company. The Board will ensure that each member has the requisite advisory
and management experience and expertise. Following on the successful listings on the SEM and NSX and
the sell down of the Company’s existing positions, the management team will be strengthened by bringing
onto the board individuals with significant international retail experience. In this way, the Company will
have the capital and expertise to pursue its strategy, to achieve significant value enhancement for the
Company.
The Board includes the following directors:
Roshan Nathoo (executive director)
Mr Nathoo has been working in the financial services industry in Mauritius for more than 20 years. Roshan
is the Managing Director of Globefin Management Services. He was the Managing Director of Standard
Bank Trust (Mauritius) for 4 years from 2002 to 2006. During that time, he contributed to making Mauritius
a hub for the Standard Bank Group for businesses from South Africa, Sub-Sahara Africa Region as well as
from the Middle East. He was also the Chief Operating Officer of the Standard Bank Group in Mauritius
(which comprised both Banking operations as well as Corporate and Fiduciary Services operations) from
2006 to 2008 with specific responsibility for Banking Operations, IT, Treasury Back Office and Trade
Services.
He was formerly a senior manager at the representative office of Arthur Anderson in Mauritius where he
worked for 8 years from 1994 to 2002 in the Offshore Business Department. He was responsible for a
portfolio of clients with primary interest in the Emerging Markets of India, China, South East Asia and
South Africa.
Mr Nathoo is a Fellow of the Association of Chartered Certified Accountants (UK), a member of the
Chartered Institute of Management Accountants (UK) and a member of the Society of Trust and Estate
Practitioners (UK).
Ajay Kumar Jeetoo (executive director)
Mr Jeeto heads the Trusts Administration section within Globefin Management Services Ltd. He has over
twelve years of experience in the Corporate, Trust and Fund industry and brings with him a wealth of
experience and skills. His last position was that of Head of a Trust and Corporate Services team at a major
bank in Mauritius. He holds a BSc (Hons) in Economics and Finance, is a member of the Institute of
10
Chartered Secretaries and Administrators (ICSA) and a member of the Society of Trust and Estate
Practitioners (STEP).
Daniel Romburgh (non-executive director)
Mr Romburgh has vast experience as an executive of fund advisories and in the administration of
investment funds. He has been Head of Operations at Drake Fund Advisors (SA) (Pty) Ltd. He was
previously a director of Caledonian Fund Services (South Africa) (Pty) Ltd. His responsibilities included
internal and outward management of an international fund administration and accounting service
provider. He was previously appointed as accounts manager at Beacon Fund Administrators (Pty) Ltd.
Peter Todd (non-executive director)
Mr Todd qualified as an attorney and then became a senior tax manager at Arthur Anderson and
Associates in Johannesburg. He joined TWS Rubin Ferguson in 1993 as a tax partner and was instrumental
in listing several companies on the JSE. Mr Todd’s practice was very focused on the property industry in
South Africa and TWS had most of the major property companies as clients including, Stocks and Stocks,
RPP, Abland, Edge Properties Ltd and Concor Ltd. The practice consulted on property structuring and
raising finance for property developments. In 2000, Mr Todd set up Osiris International Trustees Limited
in the BVI to provide international trust and corporate administrative services to global clients, as well as
Drake Fund Advisors which sets up and administers hedge funds in the BVI and Cayman Islands. Mr Todd
was involved as a director from inception with the creation of Ciref Ltd. Ciref went on to list on AIM and
later reversed into Wichford Ltd on the main board of the LSE. Mr Todd was also general manager of
Corovest Fund Managers the investment manager of Redefine. Mr Todd remained a non-executive
director of Redefine International Limited from initial listing for some 9 years and has otherwise been
involved in the property industry for many years including in property syndications into the UK market, a
large office development in the BVI, and in indirectly managing some 50 other property investments
worldwide.
Uday Gujadhur (non-executive director)
Mr Gujadhur has over 30 years of professional experience in the fields of auditing, taxation, consulting
and structuring. Locally, he has been involved in advising both local and international firms in various
business sectors including investment funds seeking listing on the SEM. Between 1986 and 1994, he
carried out various audits of companies and projects financed by World Bank/African Development Bank
in certain African countries. Until 2008, Mr Gujadhur was the CEO, director and shareholder of a major
trust and fiduciary company in Mauritius. In 2000, Mr Gujadhur was a member of the consultative
committee set up by the Government of Mauritius to advise on the reforms to the non-banking financial
services sector, which led to the setting up of the Financial Services Commission and the enactment of a
new legal and regulatory framework in 2001. He is a Fellow of the Association of Chartered Certified
Accountants, UK and is the Founder member of the International Fiscal Association IFA, Mauritius Branch.
He is also a member of the Institute of Directors, UK and a Fellow of the Mauritius Institute of Directors.
Corporate Governance
As a company listed on Stock Exchange of Mauritius, Trevo shall endeavour to comply with the provisions
of the Code of Corporate Governance of Mauritius. The Board shall ensure that the Company adheres to
all the laws of Mauritius, complies with the listing requirements of The Stock Exchange of Mauritius (for
listed companies) and follows the guidelines laid down in the Code.
Conflicts of Interest
None of the directors of the Company hold any securities in the Company as at the date hereof.
11
No directors of the Company or its controlling shareholders have a beneficial interest in transactions
entered into by the Company:
• during the current financial year; or
• during the two preceding financial years; or
• during any earlier financial year and which may still be outstanding.
No amount has been paid to any director (or to any company in which he is interested (whether directly
or indirectly) or of which he is a director or to any partnership, syndicate or other association of which he
is a member) in the three years preceding the date hereof (whether in cash or securities or otherwise) by
any person either to induce him to become or to qualify him as a director or otherwise for services
rendered by him (or by the associate identity) in connection with the promotion or formation of the
Company.
No director of the Company or its controlling shareholders have had any material beneficial interest, direct
or indirect, in the promotion of the Company or in any property acquired or proposed to be acquired by
the Company in the three years preceding the date hereof and no amount has been paid during this
period, or is proposed to be paid to any director.
The Board will determine a policy for detailing the manner in which a director’s interest in transactions is
to be determined and the interested director’s involvement in the decision-making process. Real or
perceived conflicts will be disclosed to the Board and managed in accordance with the predetermined
policy used to assess a director’s interest in transactions. The independence of Non-executive Directors
will be reviewed from time-to-time. The Company does not propose to conduct a rigorous and extensive
review of the independence of the Non-executive Directors. It is the Company’s belief that, unless the
directors have newly acquired recent interest in the Company, passage of time does not lead to a lack of
independence.
Administrative Functions
All administrative business functions of the Company shall be carried out by Osiris Corporate Solutions
(Mauritius) Limited (“Osiris”) in Mauritius. Osiris is licensed and regulated by the Financial Services
Commission.
2.4 Company Historical Milestones
The Company’s historical milestones are set out in the table below.
Date
9 November 2009
27 January 2010
16 March 2011
30 June 2015
26 August 2015
Event
Incorporation in Mauritius as Bravura FM Limited
Company changes name to Foreign Ex FM Limited
Company changes name to Arro ETF Management Limited
Arro ETF Management commences active business activities
Company changes name to Trevo Capital Ltd
The Company has been dormant for the period from incorporation until 30 June 2015. Since inception,
there have been no regulatory breaches by the Company in any jurisdiction.
12
3.
MARKET RESEARCH
3.1 Industry description and trends
Trevo’s intention is to build a growing and income yielding investment portfolio. Its investment strategy
will not be restricted to only one particular industry, however it will seek to invest in the retail and property
sectors, to reflect the existing and future experience levels of management.
The Company will therefore be seeking a strategic selection select investment opportunities, both listed
and unlisted, across all the major asset classes, ranging from equities, to bonds and property. It may also
make private equity investments or large investments in select listed companies, e.g. Apple, Shell Oil and
Alibaba. These investment opportunities will be identified over time as, and when, they arise.
Consequently, Trevo will not be operating in any one specific industry, nor is Trevo comparable to a
particular industry.
No single market, industry or country has been proven to be the top performer in the investment market
and neither can one make assumptions about the one market based on the performance of the other.
Consequently an active involvement in the day-to-day management of the Company’s investments is
imperative. For example, just recently China’s two stock exchanges (if combined with the Hong Kong
exchange equates to the second largest financial market in the world) entered freefall while US equities
continues to show robust returns even with the Federal Reserve Bank moving towards normalising policy
rates. It is nearly impossible to predict which market will perform in a given year.
The Company will consider a feasible, long –term investment opportunity, preferably in the retail sector.
The retail industry will fluctuate according to the buying power of consumers (for example, there was a
massive decline in economic activity from 2007 to 2009 due to the recession), but over the years the
industry has also proven to be resilient, showing healthy recovery after periods of lower consumer activity.
There is also the vast, largely untapped, African retail market that could translate into big shareholder
returns if pursued.
3.2 Target Investors
The target market of the Company is select, high net worth individuals looking for long-term capital growth
and a fixed yield on their investment. Several such individuals have already indicated an interest in
participating in future capital raising exercises once the Company has been listed. Any additional
subscription for shares will be via a private placement. It is anticipated that with new investors coming in
as a result of the above mentioned capital raisings, more than 10% of the issued share capital of Company
will be in public hands over the next two years.
3.3 Opportunities/Threats/Challenges in the Industry
Investment industry
This industry is not very predictable and carries a measure of risk depending on the type of investments
made. There is always the possibility of large returns but also big losses if the market has been incorrectly
interpreted.
13
Retail investment industry (as the preferred industry)
The retail industry will fluctuate according to the buying power of consumers, so if a particular economy
is not performing very well, the retail industry will suffer because of that. There are big opportunities in
the African retail market, as that market still remains largely untapped. Competition in this industry tends
to be intense, with many market participants.
3.4 Competitors Profile and Competitive Advantages
Trevo will be seeking investments from select international investors only and therefore will not be
seeking to raise funding from the retail or traditional wholesale market. The objective and strategy of the
Company gives it the flexibility to adapt to changing circumstances and to take advantage of opportunities
that otherwise would not be possible.
14
4.
BUSINESS STRATEGY
4.1 Current Objectives
Overview
The Company’s long-term objective is to establish a global portfolio of assets that will consist of various
listed and unlisted investment securities across a range of asset classes (including retail and property). The
Company therefore intends to undertake the following:

The Company will list preference shares (with terms as set out below) on the SEM and the NSX.

The primary listing of the Company on the SEM and the dual listing on the NSX will
facilitate greater and more flexible access to:


the global markets; and
the targeted investors.

The Company has entered into the Forward Sale Agreement with Treemo, in terms of which the
Company, on or about the listing date, will acquire from Treemo the Listed Portfolio of shares in
Steinhoff International Holdings Limited, further details of which are in Annexure D, valued at
approximately the ZAR equivalent of $313 million, which purchase price shall be settled either in
cash or by the issue of preference shares in the Company to the value of the ZAR equivalent of
$313 million. It is possible that the value of the Listed Portfolio may have increased or decreased
by the time the Forward Sale Agreement completes, and in such event, the capital raised and
number of shares to be issued on the NSX will increase or decrease accordingly. Treemo is a South
African company of which Mr Pieter Erasmus, together with his family trust, is the holder of all the
issued share capital. Following the successful completion of the transaction detailed above, Mr
Erasmus, together with his family trust, will hold the preference shares.

The current make-up of the Listed Portfolio is highly concentrated and low yielding, which exposes
the Company to various risks, which could affect the achievement of the Company’s long-term
objective, including:





country specific social, political and legislative risk;
unsystematic risk (business risk);
currency risk;
liquidity risk; and
inflationary risk.

The Listed Portfolio will thus be liquidated over time. The shares in the Listed Portfolio will be sold
in the market, at the prevailing market value. There are no guarantees in place in respect of the
price at which the Listed Portfolio will be liquidated. The details of the trading volumes, growth in
share price and market capitalisation of the Listed Portfolio is detailed in Annexure D. Due to the
liquidity of the shares, it is expected that the Listed Portfolio will be liquidated in the timeframes
given below, however in the unlikely event that this is not achievable, the Company will liquidate
the Listed Portfolio as and when this is possible, failing which it will retain the Listed Portfolio and
enjoy the future growth in the shares.

The proceeds of the liquidation of the Listed Portfolio will be used as a building block for the
Company to pursue the strategy detailed below and will be reinvested in higher yielding securities
15
and/or property in order to achieve the following proposed asset allocation:
Percentage
Asset class
Allocation of total
portfolio
Mauritius
South Africa
Rest of the World
Property
20%
5%
25%
70%
Listed equities
20%
25%
17%
58%
0%
Resources
0%
0%
0%
Hotels
20%
100%
0%
0%
Communication and Electronics
10%
0%
10%
90%
Retail
20%
0%
30%
70%
Financial Services
25%
20%
20%
60%
Healthcare
10%
0%
50%
50%
Technology
15%
0%
0%
100%
30%
0%
0%
100%
75%
0%
0%
100%
Index funds
25%
0%
0%
100%
ETF's
50%
0%
0%
100%
Other index funds
50%
0%
0%
100%
25%
3.3%
43.3%
53.3%
33.33%
0%
30%
70%
66.67%
5%
50%
45%
5%
35%
0%
65%
100%
8.58%
19.23%
72.18%
Passive investments
Structured investments with Capital
Guarantee
Active Investments
Venture Capital Opportunities (mainly
renewables)
Private Equity Investments
Cash and cash equivalents
Total geographic split
It is to be noted that each investment, as per the table above, represents a large strategic stake
in each of the sectors and jurisdictions, and does not represent a portfolio approach to investing.
The realisation of the Listed Portfolio will be staggered as follows:
Portfolio composition
Initial JSE listed shares (South Africa)
Global investments (including listed equities, passive
investments, venture capital investments, cash and
property
FY16
70%
30%
FY17
30%
70%
FY18
19.23%%
80.77%

In due course, the Directors intend appointing reputable investment advisors to assist in
determining where the best investment opportunities will be in line with the Company’s
strategy, which institutions will be appointed as soon as possible after the SEM Listing. It is noted
that there may be multiple advisors, as there are multiple investment jurisdictions and multiple
asset classes. The directors will seek out the best advisors per sector.

While no specific assets have been earmarked for acquisition at the date hereof, the Company
intends to acquire assets in terms of its investment strategy set out herein and as advised by its
investment advisors. A proposed asset allocation is included in Annexure B.
16

Trevo will aim to have maximum flexibility in its investment mandate to ensure that investment
can take place with the following in mind:





possible investment in a greater variety of investment instruments/vehicles (including
equity, bonds, preference shares, cash, derivatives, index tracking vehicles, listed
property etc.);
possible introduction of leverage;
faster response to changes in exchange and interest rates;
faster response to legislative changes; and
faster response to changing political and social circumstances due to the increased
liquidity.
The globalisation of the portfolio is thus key to the objective of the Company.

Trevo’s intention is to build a growing and income yielding investment portfolio. Its investment
strategy will not be restricted to only one particular industry. The Company will therefore be
seeking a strategic selection of investment opportunities, both listed and unlisted, across all the
major asset classes, ranging from equities, to bonds and property. It may also make private equity
investments or large investments in select listed companies, e.g. Apple, Shell Oil and Alibaba.
These investment opportunities will be identified over time as, and when, they arise.
Opportunistic holdings in retail or property may materialise and will be pursued aggressively.

The returns received on this portfolio will be used to service the dividends on the preference
shares and the remainder will be reinvested.

Obtain additional funding from select international investors.

The Company is aiming to have gross assets to the value of $585 million by the end of the period
ended 31 December 2018, with a total comprehensive income of $75 million for the same period,
as follows:
Total comprehensive
income
Gross assets

Year ended
28 February 2016
(USD)
11 444 931
Year ended
28 February 2017
(USD)
76 193 258
Year ended
28 February 2018
(USD)
92 298 285
Period ended
31 December 2018
(USD)
75 125 319
319 677 931
420 503 189
533 933 474
585 002 126
At that point, the Company will consider additional feasible, long-term investment opportunities,
preferably in the retail sector, which will reflect the experience of the incoming management and
the interests from the potential investor base.
Geographic jurisdictions
The Company will generally seek to identify investment opportunities across various markets and sectors
as its core strategy, with a main focus on opportunities in the retail industry. The Company has no
geographic limits on where it may invest, although intends to focus on Mauritius (approximately 8.5% of
the assets), South Africa (approximately 19% of the assets) and the rest of the world (approximately 72%
of the assets). A proposed geographic breakdown is included in Annexure B. This flexibility allows the
Company’s management to look for opportunities in markets around the world, including emerging
markets, that it believes will provide the best strategic investment to meet the Company’s objective. When
choosing markets, the Company considers various factors, including economic and political conditions,
potential for economic growth and possible changes in currency exchange rates.
17
Process
The Company’s directors will set the investment policy, parameters and objectives, and will review and
approve each sale or purchase of assets. The Board will also be responsible for identifying the availability
of new opportunities that fall within the policy and objectives and negotiating the terms and ongoing
management of the assets. The board may appoint various financial and investment advisors to identify
potential opportunities.
Schedule of Assets
Prior to listing on the SEM, Trevo will have cash of $700,100, $100,100 represented by the 100,100 issued
ordinary shares of the Company, together with the equivalent in ZAR of $600,000, represented by the
600,000 issued preference shares to be listed on SEM and is aiming to raise the equivalent in ZAR of
$313,000,000, or more in terms of the Forward Sale Agreement, on listing on the NSX, in terms of the
Forward Sale Agreement.
Forward Sale Agreement
In terms of the Forward Sale Agreement, the Company will acquire from Treemo the Listed Portfolio, on
the following terms:
(a) the Forward Sale Agreement was entered into in terms of and governed by ISDA documentation on
29 October December 2015;
(b) The purchase consideration will be determined with reference to the forward price of the Listed
Portfolio;
(c) Trevo will be required to settle the purchase consideration within 3 months of the date of conclusion
of the Forward Sale Agreement;
(d) The purchase consideration may be settled by Trevo either in cash or by the issue to Treemo or
nominee of an equivalent number of preference shares in Trevo listed on the NSX;
(e) Trevo will settle the purchase consideration against delivery by Treemo of the Listed Portfolio to
Trevo; and
(f) Treemo’s obligation to deliver the Listed Portfolio to Trevo will be secured by an option granted to
Trevo by Treemo’s shareholder that will enable Trevo to acquire Treemo’s shares and thus control
of Treemo.
A signed copy of the Forward Sale Agreement is attached hereto as Annexure C.
The board is of the opinion that the Forward Sale Agreement is critical to the Company, as it will enable
the Company to acquire a significant portfolio of assets, to be settled in cash or in preference shares in
the event that insufficient capital is raised, thereby ensuring that the Company will raise substantial
capital, with little risk of Treemo’s default. The Listed Portfolio will provide the Company with a platform
from which to leverage and to implement the Company’s business objectives.
4.2 Preference Shares
Indicative Terms and Conditions
Preference Shares:


Denominated in ZAR;
Non-redeemable, non-participating preference shares;
18



Preference Share
Dividend Rate:



Preference Share
Dividend Payment
Dates:
4.3



Dividends are non-cumulative;
No ordinary dividends may be paid if the preference dividend is not paid;
Preferred rights:
o The Preference Shares will rank in priority to all ordinary
shareholders;
o The Preference Shares will rank after all debt;
o The Preference Shares will rank pari passu with all other preference
shareholders of the same class of shares;
o The Preference Shares will earn a fixed dividend yield, payable at
the discretion of the directors after consideration of the solvency
requirements set by the Mauritian Companies Act;
o In the event that the dividend is undeclared in any year, the
dividend will not be accumulated for payment in a subsequent year
in which dividends are declared;
o The dividend will rank before all ordinary shareholders’ dividends;
o The dividends will rank pari passu with all other preference
shareholders’ dividends of the same class;
o The Preference Shares will not participate in residual profits; and
o The Preference Shares will not carry any voting rights:
 Unless any dividends remain outstanding;
 Unless the rights attaching to the Preference Shares are to
be amended.
Fixed yield of 7.00%, quoted as a NACA rate, referenced against the value in
ZAR of the shares;
Calculated on an Actual/365 basis;
payable at the discretion of the directors after consideration of the solvency
requirements set by the Mauritian Companies Act.
Declared and paid annually;
Payable after the Dividend Declaration Date;
Settled in cash.
SWOT Analysis
An analysis of the Company’s strengths, weaknesses, opportunities and threats is detailed below:
Strengths







There is an experienced board of directors with proven track record in business and risk
management;
The company has identified a large anchor shareholder who is able to provide a huge capital
injection which will kick start the investment process and provide first class business, retail
and property experience;
Established relationships with financial, investment and business advisors;
Access to select future investors;
Contacts within the retail industry;
Flexible, with quick decision making process, in terms of responding to changing
circumstances and opportunities; and
Already have pipeline assets and investor.
19
Weaknesses





Possible loss of capital from market fluctuations;
High fees of financial and investment advisors;
High entry or exit fees into and out of the more bespoke, less liquid, investments;
Controlling stake in an unlisted company might prove too expensive; and
Concentration of initial portfolio.
Opportunities






Access to further capital from new investors;
Contacts within the retail industry;
Established relationships with potential future investors;
Leverage can be introduced;
Ability to invest in global markets; and
Ability to invest across a multitude of asset classes.
Threats






Negative performance of global capital markets;
Reduced consumer spending;
Political and regulatory risks;
Currency fluctuations;
Poor investment decisions; and
Incorrect investment timing.
4.4 Risk Factors
In implementing its investment policy, the Company will contemplate opportunities that will yield
satisfactory returns at acceptable levels of risk.
The risks to the Company are all of the risks that would typically be associated with investing in global
assets. Set out below is a list of identified risks. The Board will take appropriate steps to attempt to
mitigate such risks.
A number of factors may affect the result of operations, financial condition and prospects of the Company.
This section describes the risk factors that are considered by the Board to be material. However, these
factors should not be regarded as a complete and comprehensive statement of all potential risks and
uncertainties. Additional risks not presently known to the Board or that the Board currently considers to
be immaterial may also adversely impact the Company’s business operations. The business, growth
prospects, financial condition and/or results of operations of the Company could be materially adversely
affected by any of these risks. The trading price of the shares could decline due to the materialisation of
any of these risks and shareholders could lose part or all of their investment.
Failure to raise capital
It is a risk that the Company may fail to raise the funds required to meet its initial objectives. However, in
the event that insufficient funds are raised to acquire the Listed Portfolio, in terms of the Forward Sale
20
Agreement the Company is entitled to settle the purchase price by an issue to Treemo of an equivalent
number of preference shares. Therefore, the Company will be in a position to raise the projected $313
million in 2015. The Company is also already aware of potential investors willing to invest in the Company.
As such, the Company is confident that future capital raises will be successful.
Further details on the risk of failing to raise capital, including an illustration of three scenarios, are included
in Section 6.3.
Achievability of financial forecasts
In the event that the Company fails to raise capital, there could be a material impact on the forward
looking statements. Significant assumptions had to be made regarding future market performance in the
production of the forward looking statements. A deviation in any of these assumptions could cause the
financial forecasts to be materially different.
No assurance of Profits
Given the market volatility and business risks associated with this venture, there can be no assurance that
the Company will sustain a cumulative profit during the period of its existence. Shareholders may lose part
or all of their initial investment.
Restrictions
The Company's policies do not prohibit certain investment techniques such as concentration of investments
in a small number of companies, or sectors that may entail significant risks.
Currency Risks
The Company may be invested substantially in assets whereby the income and proceeds of which will be
received in currencies other than USD or ZAR. Accordingly, the value of the Shares and distributions in USD/
ZAR terms will be adversely affected by any reductions in value of the relevant currency relative to USD/ZAR.
In addition, the Company will incur transaction costs in connection with the conversions between other
currencies and USD/ZAR.
Political and/or Regulatory Risks
The value of the Company’s assets may be affected by uncertainties such as political developments,
changes in government policies, changes in taxation, restrictions on foreign investment and currency
repatriation, currency fluctuations and other developments in the laws and regulations of countries in
which investment is made. Furthermore, the legal infrastructure and accounting, auditing and reporting
standards in certain countries in which investments may be made may not provide the same degree of
protection or information to shareholders as would generally apply in major securities markets.
Overall Risk
All investments in assets represent a potential risk of loss of capital. While the Company will take due care
in the management of its assets, there can be no assurance that the Company will not incur losses. Many
unforeseeable events may cause sharp market fluctuations, which could adversely affect the Company.
Changes in economic conditions, including, for example, interest rates, inflation rates, industry conditions,
competition, technological developments, political events and trends, changes to tax laws and
innumerable other factors can substantially and adversely affect the performance of the Company. None
of these conditions will be within the control of the Company.
21
Leverage and Financing Risk
The balance sheet of the Company may be leveraged so as to achieve a higher rate of return. While
leverage presents opportunities for increasing the total return of the Company, it has the effect of
potentially increasing losses as well. Accordingly, any event which adversely affects the value of an asset
by the Company would be magnified to the extent that the Company is leveraged. The cumulative effect
of the use of leverage by the Company in a market that moves adversely to the Company’s investments
could result in a substantial loss which would be greater than if the Company were not leveraged. In
general, the anticipated use of short-term margin borrowings results in certain additional risks to the
Company.
Liquidity Risk
Due to the high concentration and low yielding nature of the Listed Portfolio, the Company intends to
liquidate the Listed Portfolio over the next 3 years. There is a risk that it will be difficult to liquidate such
a large volume of a single stock in the time frames provided. However, in light of the historic trading
volumes, growth in share price and current market capitalisation of the Listed Portfolio, as detailed in
Annexure D, the Company is of the view that there will not be any difficulties or delays in liquidating the
portfolio.
22
5.
HISTORICAL FINANCIAL INFORMATION
5.1 Reporting
The audited financial statements for the Company for the period ended 28 February 2015 are attached
hereto as Annexure B.
The historical financial information for the Company is provided in Sections 5.2 to 5.5 below.
5.2 Statement of Comprehensive Income
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2015
2015
USD
2014
USD
Revenue
-
-
Administrative expenses
-
(50)
Loss before taxation
-
(50)
Taxation
-
-
Loss for the year
-
(50)
Other comprehensive income for the year
-
-
Items that will not be reclassified subsequently to profit or loss
-
-
Items that may be reclassified subsequently to profit or loss
-
-
Total comprehensive loss for the year
-
(50)
Other comprehensive income
23
5.3 Statement of Financial Position
STATEMENT OF FINANCIAL POSITION
AS AT 28 FEBRUARY 2015
ASSET
Current asset
Cash and cash equivalents
TOTAL ASSET
EQUITY AND LIABILITIES
Share capital and reserves
Stated capital
Revenue deficit
TOTAL EQUITY AND LIABILITIES
2015
USD
2014
USD
-
-
-
-
100
(100)
100
(100)
-
-
5.4 Statement of Changes in Equity
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2015
Stated
capital
USD
Revenue
deficit
USD
Total
USD
100
(50)
50
-
(50)
(50)
Balance at 28 February 2014
100
(100)
-
Balance at 1 March 2014
100
(100)
-
-
-
-
100
(100)
-
Balance at 1 March 2013
Total comprehensive loss for the year
Total comprehensive income for the year
Balance at 28 February 2015
24
5.5 Statement of Cash Flows
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 28 FEBRUARY 2015
2015
USD
2014
USD
Cash flows from operating activities
Loss before taxation
-
(50)
Change in working capital
-
-
Net cash used in operating activities
-
(50)
Change in cash and cash equivalents
-
(50)
Cash and cash equivalents at beginning of the year
-
50
Cash and cash equivalents at end of the year
-
-
25
6.
FINANCIAL FORECASTS AND ASSUMPTIONS
6.1 Financial Forecasts
The financial forecasts for the Company, based on the information immediately available, are included below.
Please note that these forecasts have not been reviewed nor reported on by the auditors of the Company and
are based on the Company’s current expectations and predictions about future events including the Company’s
intentions.
These forecasts are, however, subject to inherent risks, uncertainties and assumptions that could cause actual
results, performance or achievements of the Company to differ materially from the expectations and predictions,
expressed or implied, in such forecasts. These factors include, among other things, those risks identified in this
Business Plan. These forecasts, including the assumptions on which they are based and the financial information
from which they are prepared, are the responsibility of the directors of the Company.
Forecast financial statements of Trevo
Set out below are the forecast financial statements of Trevo for the years ending 29 February 2016, 28 February
2017, 28 February 2018 and the period ending 31 December 2018 (the “Forecast Information”).
The Forecast Information of Trevo is the responsibility of the directors. The Forecast Information has been
prepared in compliance with IFRS and in accordance with Trevo’s accounting policies.
Forecast statement of financial position
29 February 2016
USD
28 February 2017
USD
28 February 2018
USD
31 December 2018
USD
321 617 788.74
321 617 788.74
426 218 080.50
426 218 080.50
540 859 629.19
540 859 629.19
592 627 961.14
592 627 961.14
-1 939 857.75
-1 939 857.75
-5 714 891.41
-5 714 891.41
-6 926 155.30
-6 926 155.30
-7 625 835.08
-7 625 835.08
TOTAL ASSETS
319 677 930.99
420 503 189.09
533 933 473.90
585 002 126.06
EQUITY & LIABILITIES
Reserves
Retained income
Ordinary Share Capital
Preference Shares
319 677 930.99
5 977 930.99
100 000.00
313 600 000.00
420 503 189.09
56 803 189.09
100 000.00
363 600 000.00
533 933 473.90
120 233 473.90
100 000.00
413 600 000.00
585 002 126.06
171 302 126.06
100 000.00
413 600 000.00
Non-current Liabilities
0.00
0.00
0.00
0.00
Current Liabilities
0.00
0.00
0.00
0.00
319 677 930.99
420 503 189.09
533 933 473.90
585 002 126.06
ASSETS
Non-current Assets
Investments
Current Assets
Cash and Cash Equivalents
TOTAL EQUITY & LIABILITIES
26
Forecast statement of comprehensive income
29 February 2016
USD
2 824 845.00
-397 702.75
-5 000.00
-411.00
-3 283.50
-374 400.00
-1 358.25
-3 750.00
-6 250.00
0.00
-3 250.00
28 February 2017
USD
22 195 500.00
-602 533.66
-5 300.00
-1 742.64
-13 922.04
-511 6800.00
-5 758.98
-23 850.00
-26 500.00
0.00
-13 780.00
28 February 2018
USD
27 902 476.56
-245 740.45
-5 618.00
-1 847.20
-14 757.36
-149 435.57
-6 104.52
-25 281.00
-28 090.00
0.00
-14 606.80
31 December 2018
USD
23 442 056.20
-85 069.31
-4 962.57
-1 631.69
-13 035.67
0.00
-5 392.32
-22 331.55
-24 812.83
0.00
-12 902.67
2 427 142.25
21 592 966.34
27 656 736.11
23 356 986.89
0.00
0.00
0.00
3 120 000.00
0.00
3 756 492.37
0.00
0.00
Profit/(Loss) For the Year
2 427 142.25
24 712 966.34
31 413 228.49
23 356 986.89
Market value adjustments
Pref share liability write-up/write down
9 017 788.74
0.00
51 480 291.77
0.00
60 885 056.32
0.00
51 768 331.94
0.00
11 444 930.99
76 193 258.11
92 298 284.80
75 125 318.83
Investment income
Operating Expenses
Audit Fees
Transfer secretary
SEM annual Fee
Trading costs
CDS annual fee
Other fees
Directors fees
Investment management fees
Administration fees
Operating Income/(Loss)
Interest paid
Realised gain
Total Comprehensive Income For the
Year
Forecast statement of changes in equity
FY 16
Balance as at 1 March 2014
Total Comprehensive Income for the year
Dividends
Balance as at 1 March 2015
Total Comprehensive Income for the year
Dividends
Balance as at 29 February 2016
USD
0.00
0.00
0.00
0.00
11 444 930.99
-5 467 000.00
5 977 930.99
FY 17
Balance as at 1 March 2015
Total Comprehensive Income for the year
Dividends
Balance as at 1 March 2016
Total Comprehensive Income for the year
Dividends
Balance as at 28 February 2017
0.00
11 444 930.99
-5 467 000.00
5 977 930.99
76 193 258.11
-25 368 000.00
56 803 189.09
FY 18
Balance as at 1 March 2016
Total Comprehensive Income for the year
Dividends
Balance as at 1 March 2017
Total Comprehensive Income for the year
Dividends
5 977 930.99
76 193 258.11
-25 368 000.00
56 803 189.09
92 298 284.80
-28 868 000.00
27
PE 18 DEC
6.2
Balance as at 28 February 2018
120 233 473.90
Balance as at 1 March 2017
Total Comprehensive Income for the year
Dividends
Balance as at 1 March 2018
Total Comprehensive Income for the year
Dividends
Balance as at 31 December 2018
56 803 189.09
92 298 284.80
-28 868 000.00
120 233 473.90
75 125 318.83
-24 056 666.67
171 302 126.06
General Assumptions
Main assumptions and comments on the forecast financial information
Assumptions considered to be significant are disclosed below, however, the assumptions disclosed are not
intended to be an exhaustive list.
 Trevo has compiled high level financial business projections to demonstrate the intentions and
prospects of the Company for the next thirty six months.
 The Forecast Information is based on information derived from the historical financial information and
the directors’ knowledge of and experience in the industry.
 The forecasts have been prepared in accordance with the framework concepts and measurement and
recognition requirements of International Financial Reporting Standards (IFRS).
 The Company’s medium term target is to grow its gross asset value from $320 million as at 29 February
2016 to approximately $585 million by the end of the period ended 31 December 2018.
 This Business Plan includes forward-looking statements that have been based on Trevo’s current
expectations and predictions about future events including Trevo’s intentions. These forward-looking
statements are, however, subject to inherent risks, uncertainties and assumptions that could cause
actual results, performance or achievements of Trevo to differ materially from the expectations and
predictions, expressed or implied, in such forward-looking statements. These factors include, among
other things, those risks identified previously.
6.3
Specific Assumptions and Analysis
 It has been assumed that the 2015 funding requirement is the ZAR equivalent of $313 million, for which
capital will be raised on listing on the NSX, by the settlement of the Listed Portfolio. It is possible that
the value of the Listed Portfolio may have increased or decreased by the time the Forward Sale
Agreement completes, and in such event, the capital raised and number of shares to be issued on the
NSX will increase or decrease accordingly.
 It is assumed that additional capital in the amount of $50 million will be raised in each of the 2017 and
2018 financial years.
 The preference shares pay a fixed dividend of 7%, payable at the discretion of the directors. If
undeclared or unpaid, no interest will accrue on this dividend.
 In the event that no dividend is declared in a particular year, as per the discretion of the directors, the
dividend will not be accumulated for payment in a subsequent year in which dividends have been
declared.
 It is assumed that all cash flows (income and expenses) occurred at the end of the year.
 A listing date of 23 November 2015 has been assumed.
 An exchange rate of N$14.00 to $1 has been assumed at listing date.
28
 An exchange rate of N$14.00 to $1 has been assumed at year-end.
 It has been assumed that the exchange rate remained consistent at N$14.00 to $1 for FY17 and FY18.
Assets
The following asset composition over the three years has been assumed:
Portfolio composition
Initial JSE listed shares (South Africa)
Global investments (including listed equities, passive
investments, venture capital investments, cash and
property)
FY16
70%
30%
FY17
30%
70%
FY18
19.23%
80.77%
The historic dividend yield on the JSE listed shares of 1.9% has been used, as the Company considers this to be
a reasonable and sustainable return on these listed shares.
The Listed Portfolio has shown the historical growth figures set out in Annexure D.
The Company has therefore used the conservative assumption of 10% growth as a reasonable projected growth
rate for the Listed Portfolio.
The Company used the average between the MSCI World Index (in USD) and the Market Vectors US Listed Retail
25 Index as a proxy for estimating the projected returns and growth in the Global Securities.
Market Vectors US Listed Retail 25 Index
MSCI World Index (USD)
Average
Gross yield for 1 year (August
2014 to August 2015)
9.69%
5.49%
7.59%
Growth in index level (price)
(August 2014 to August 2015)
26.61%
3.80%
15.20%
Assumptions for operating expenses
Total administration and corporate costs for a full year will be $85,711 in 2015. Some of the expenses will be
pro-rated for a portion of the year. The Company has assumed an annual escalation rate 6%. These expenses are
broken down as follows:
Audit Fees
SEM annual Fee
CDS annual fee
Transfer secretary
Other fees
Directors fees
Administration fees
The company has no
employees
Other fees consist of:
Rent
Insurance
Bank charges
Full year
$5 000
$13 134
$5 433
$1 644
$22 500
$25 000
$13 000
FY16
$5 000
$5 473
$2 264
$685
$9 375
$5 208
$5 417
FY17
$5 300
$13 922
$5 759
$1 743
$23 850
$26 500
$13 780
FY18
$5 618
$14 757
$6 105
$1 847
$25 281
$28 090
$14 607
HY18 AUG
$2 978
$7 821
$3 235
$979
$13 399
$14 888
$7 742
$2 000
$5 000
$1 000
29
Board meeting
expenses
Government fees and
taxes
Dual listing fees
$7 000
$2 500
$5 000
6.4 Scenario analysis
A sensitivity analysis has been carried out with respect to the future forecasts for income, expenses,
finance costs and total comprehensive income for three different time frames: 2016, 2017 and 2018. The
three scenarios retained are 1) the sum of $113 million is raised in 2016, with $50 million raised in 2017
and $50 million raised in 2018 and the assets increased accordingly (least likely; (2) the sum of $213 million
is raised in 2016, with $50 million raised in 2017 and $50 million raised in 2018 and the assets increased
accordingly (equally likely); and (3)) the sum of $313 million is raised in 2016, with $50 million raised in
2017 and $50 million raised in 2018 and the assets of the Company are increased accordingly (most likely,
given the Forward Sale Agreement to be entered into by the Company);
The following tables show the projected pro-forma income statement and balance sheet of the Company
for the financial years ended 29 February 2016, 28 February 2017, 28 February 2018 and 31 December
2018 given the three scenarios mentioned above. These figures should be read with reference to the
projections and the assumptions set out in Sections 6.2 and 6.3.
LEAST LIKELY
$113 000 000.00
EQUALLY LIKELY
$213 000 000.00
2016
Pro forma Income Statement for the year ended 29
February 2016
Income
Expenses
Operating profit
Total comprehensive
income for the year
USD
1 021 345
-175 703
863 642
4 100 797
Pro forma Balance Sheet for the period ended 29
February 2016
Total assets
Total Equity
Total Liabilities
Total equity and
liabilities
USD
115 833 797
115 833 797
0
115 833 797
2017
Pro forma Income Statement for the year ended 28
February 2017
Income
Expenses
Operating profit
Total comprehensive
income for the year
USD
11 549 500
-274 534
11 274 966
34 680 693
MOST LIKELY
$313 000 000.00
Pro forma Income Statement for the year ended 29
February 2016
Income
Expenses
Operating profit
Total comprehensive
income for the year
USD
1 923 095
-277 703
1 645 392
7 772 864
Pro forma Balance Sheet for the period ended 29
February 2016
Total assets
Total Equity
Total Liabilities
Total equity and
liabilities
USD
217 755 864
217 755 864
0
217 755 864
Pro forma Income Statement for the year ended 28
February 2017
Income
Expenses
Operating profit
Total comprehensive
income for the year
USD
18 432 500
-438 534
17 993 966
436 976
Pro forma Income Statement for the year ended
29 February 2016
Income
Expenses
Operating profit
Total comprehensive
income for the year
USD
2 824 845
-397 703
2 427 142
11 444 931
Pro forma Balance Sheet for the period ended 29
February 2016
Total assets
Total Equity
Total Liabilities
Total equity and
liabilities
USD
319 677 931
319 677 931
0
319 677 931
Pro forma Income Statement for the year ended
28 February 2017
Income
Expenses
Operating profit
Total comprehensive
income for the year
USD
25 315 500
-602 534
24 712 966
76 193 258
30
Pro forma Balance Sheet for the period ended 28
February 2017
Total assets
Total Equity
Total Liabilities
Total equity and
liabilities
USD
189 146 490
189 146 490
0
189 146 490
2018
Pro forma Income Statement for the year ended 28
February 2018
Income
Expenses
Operating profit
Total comprehensive
income for the year
USD
16 263 477
-149 965
16 113 512
47 770 613
Pro forma Balance Sheet for the period ended 28
February 2018
Total assets
Total Equity
Total Liabilities
Total equity and
liabilities
USD
272 049 104
272 049 104
0
272 049 104
2018 (December)
Pro forma Income Statement for the year ended 31
December 2018
Income
Expenses
Operating profit
Total comprehensive
income for the period
USD
12 493 911
-85 069
12 408 842
39 161 018
Pro forma Balance Sheet for the period ended 31
December 2018
Total assets
Total Equity
Total Liabilities
Total equity and
liabilities
USD
298 820 121
298 820 121
0
298 820 121
Pro forma Balance Sheet for the period ended 28
February 2017
Total assets
Total Equity
Total Liabilities
Total equity and
liabilities
USD
304 824 840
304 824 840
0
304 824 840
Pro forma Income Statement for the year ended 28
February 2018
Income
Expenses
Operating profit
Total comprehensive
income for the year
USD
23 961 223
-197 853
23 763 370
70 034 449
Pro forma Balance Sheet for the period ended 28
February 2018
Total assets
Total Equity
Total Liabilities
Total equity and
liabilities
USD
402 991 289
402 991 289
0
402 991 289
Pro forma Income Statement for the year ended 31
December 2018
Income
Expenses
Operating profit
Total comprehensive
income for the period
USD
17 967 984
-85 069
17 882 914
57 143 168
Pro forma Balance Sheet for the period ended 31
December 2018
Total assets
Total Equity
Total Liabilities
Total equity and
liabilities
USD
441 911 124
441 911 124
0
441 911 124
Pro forma Balance Sheet for the period ended 28
February 2017
Total assets
Total Equity
Total Liabilities
Total equity and
liabilities
USD
420 503 189
420 503 189
0
420 503 189
Pro forma Income Statement for the year ended
28 February 2018
Income
Expenses
Operating profit
Total comprehensive
income for the year
USD
31 658 969
-245 740
31 413 228
92 298 285
Pro forma Balance Sheet for the period ended 28
February 2018
Total assets
Total Equity
Total Liabilities
Total equity and
liabilities
USD
533 933 474
533 933 474
0
533 933 474
Pro forma Income Statement for the year ended
31 December 2018
Income
Expenses
Operating profit
Total comprehensive
income for the period
USD
23 442 056
-85 069
23 356 987
75 125 319
Pro forma Balance Sheet for the period ended 31
December 2018
Total assets
Total Equity
Total Liabilities
Total equity and
liabilities
USD
585 002 126
585 002 126
0
585 002 126
31
7.
FUNDING REQUIREMENTS
Trevo intends listing on the SEM by way of private placement. Thereafter, the Company intends to raise
the ZAR equivalent of $313 million on listing on the NSX, which will be achieved through the Forward Sale
Agreement with Treemo.
The Company will further utilise appropriate debt funding governed by careful consideration of the cost
of borrowing and the ability to mitigate the risk of interest rate increases and the effect of leverage on the
returns generated from investments made.
SIGNED AT MAURITIUS ON 23 NOVEMBER 2015 ON BEHALF OF TREVO CAPITAL LTD
____________________________
32
Annexure A
AUDITED FINANCIAL STATEMENTS OF THE COMPANY FOR THE PERIOD ENDED 28 FEBRUARY 2015
33
Annexure B
DETAILED PROJECTED ASSET ALLOCATION AS AT 31 DECEMBER 2018
Investment Strategy
Value of total capital raise - ZAR
ZAR:USD exchange rate
Value of total capital raise - USD
4 500 000 000
13.00
346 153 843
Percentage
Asset class
Allocation of total
portfolio
Mauritius
South Africa
Rest of the World
Property
20%
5%
25%
70%
Listed equities
20%
25%
17%
58%
Resources
0%
0%
0%
0%
Hotels
20%
100%
0%
0%
Communication and Electronics
10%
0%
10%
90%
Retail
20%
0%
30%
70%
Financial Services
25%
20%
20%
60%
Healthcare
10%
0%
50%
50%
Technology
15%
0%
0%
100%
30%
0%
0%
100%
Structured investments with Capital Guarantee
75%
0%
0%
100%
Index funds
25%
0%
0%
100%
ETF's*
50%
0%
0%
100%
Other index funds
50%
0%
0%
100%
25%
3.3%
43.3%
53.3%
Venture Capital Opportunities (mainly renewables)
33.33%
0%
30%
70%
Private Equity Investments
66.67%
5%
50%
45%
5%
35%
0%
65%
100%
8.58%
19.23%
72.18%
Passive investments
Active Investments
Cash and cash equivalents
Total geographic split
South African Rand
Values - ZAR
Asset class
Allocation of total
portfolio
Mauritius
South Africa
Rest of the World
Property
900 000 000
45 000 000
225 000 000
630 000 000
Listed equities
900 000 000
225 000 000
153 000 000
522 000 000
Resources
Hotels
Communication and Electronics
180 000 000
180 000 000
-
-
-
-
90 000 000
-
9 000 000
81 000 000
Retail
180 000 000
-
54 000 000
126 000 000
Financial Services
225 000 000
45 000 000
135 000 000
45 000 000
Healthcare
90 000 000
-
Technology
135 000 000
-
45 000 000
-
45 000 000
135 000 000
34
Passive investments
1 350 000 000
-
-
1 350 000 000
1 012 500 000
-
-
1 012 500 000
Index funds
337 500 000
-
-
337 500 000
ETF's*
168 750 000
-
-
168 750 000
Other index funds
168 750 000
-
-
168 750 000
Structured investments with Capital Guarantee
Active Investments
1 125 000 000
37 501 875
Venture Capital Opportunities (mainly renewables)
374 962 500
Private Equity Investments
750 037 500
37 501 875
225 000 000
78 750 000
4 500 000 000
386 251 875
Cash and cash equivalents
Total geographic split
-
487 507 500
599 990 625
112 488 750
262 473 750
375 018 750
337 516 875
865 507 500
146 250 000
3 248 240 625
US Dollar
Values - USD
Asset class
Allocation of total
portfolio
Mauritius
South Africa
Rest of the World
Property
69 230 769
3 461 538
17 307 692
48 461 538
Listed equities
69 230 769
17 307 692
11 769 231
40 153 846
Resources
Hotels
Communication and Electronics
13 846 154
6 923 077
Retail
13 846 154
Financial Services
17 307 692
Healthcare
Technology
13 846 154
-
-
-
692 308
-
4 153 846
9 692 308
3 461 538
10 384 615
3 461 538
3 461 538
3 461 538
6 923 077
-
6 230 769
10 384 615
-
-
10 384 615
103 846 154
-
-
103 846 154
Structured investments with Capital Guarantee
77 884 615
-
-
77 884 615
Index funds
25 961 538
-
-
25 961 538
ETF's*
12 980 769
-
-
12 980 769
Other index funds
12 980 769
-
-
12 980 769
Passive investments
Active Investments
86 538 462
2 884 760
Venture Capital Opportunities (mainly renewables)
28 843 269
Private Equity Investments
57 695 192
2 884 760
17 307 692
6 057 692
Cash and cash equivalents
Total geographic split
346 153 846
-
29 711 683
8 652 981
20 190 288
28 847 596
25 962 837
66 577 500
11 250 000
249 864 663
*Investment criteria for ETF investments
1. High level of liquidity. The market is flooded with funds that use the ETF structure but don’t really do what ETFs traditionally do.
Instead of tracking a broadly followed index they attempt to replicate illiquid assets, such as the price of oil or a short position
against the market. The problem is that not very many people buy and sell them. Fewer participants means increased chances of
paying too much for a fund.
2. Focus on low fee ETF's which are upfront about their total costs.
3. Allocate and rebalance. Research shows that, over the past 15 years, investors who owned a portfolio of ETFs that included a
diversity of asset classes and who rebalanced with discipline enjoyed a 1.5% premium over the broad stock market return.
35
Annexure C
FORWARD SALE AGREEMENT
36
Annexure D
LISTED PORTFOLIO
 The Listed Portfolio will consist of 56,578,213 shares in Steinhoff International Holdings Limited (“the JSE Company”).
 The JSE Company has 3,667,476,771 shares in issue.
 The Listed Portfolio therefore represents a shareholding of 1.543% in the JSE Company.
 The market capitalization of the JSE Company is ZAR313.65 billion.
 Current Beta = 1.
 Growth in share price of the JSE Company:
 1 week: +4.43%
 1 month: +9.28%
 3 months: +17.71%
 6 months: +28.8%
 1 year: +56.17%
 2 years: +151.63%
 3 years: +208.36%
 Trading volumes of the shares of the JSE Company (calculated over the last 6 months)
 Average volume per day: 10 million shares
 Average value per day: ZAR753.54 million (approximately USD 57,97 million using an exchange rate of
ZAR13.00:USD1.00)
 Average volume per week: 47 million shares
 Average value per week: ZAR3.52 billion (approx. USD 0.27 billion using an exchange rate of
ZAR13.00:USD1.00)
This illustrates that 56,578,213 shares in the JSE Company can be sold down in 5.66 days.
 Dividend payments of the JSE Company:

2013: ZAR0.80 per share

2014: ZAR1.50 per share

2015: ZAR1.65 per share
Trading on the JSE
Central Order
Book and
Reported
Trades
Number of
Trades
Volume
Value
Week
Week
Ended
11.09.2015
Ended
12.09.2014
1 334 153
982 211
%
Change
Week on
Week
Year to
Year to
Date
2015
Date
2014
42 847 982
29 299 490
49 292 655 202
42 965 493 802
3 398 773 583 125
2 728 375 423 936
35.83
1 573 380 812
1 107 046 242
106 597 325 993
80 722 867 460
42.12
32.05
%
Change
Year on
Year
46.24
14.73
24.57
37
Total JSE Market Capitalisation
Week
Week
% Change
Ended
Ended
Year on
11.09.2015
12.09.2014
Year
JSE Market Capitalisation (R
11 206.79
bn)
Source: JSE statistical data per website for week ending 11 September 2015.
12 069.79
7.15
38