GROWYOUR WEALTH WITH

TAX FRIENDLY,PROPERTY-BACKED

INVESTMENTS

Projected IRR of 16%-20% p.a.

Investing in TourismThe South African Tourism sector is arguably one of the most exciting sectors for growth and has been identified by the South African government as a priority sector for job creation. According to the Minister of Tourism, Derek Hanekom, thanks to the changes in visa regulations, we can expect growth beyond 7% in 2019, as in becomes easier for foreigners to visit South Africa.

South Africa has also seen increased global air connectivity at all three of its major international airports namely, Johannesburg, Cape Town and Durban.OR Tambo has seen the re-commencement of Alitalia flights after 10 years of inactivity. Cape Town has become South Africa’s fastest growing airport in terms of foreign arrivals and has recently secured a direct flight to Hong Kong. Lastly, King Shaka International has secured Durban's first direct flight to London Heathrow with British Airways.

With an enormous variety of travel experiences offered in one country (beach, bush, berg, dessert), the South African tourism industry may be one of the country’s most underutilised sectors with arguably the most potential for growth.

About Section 12J• In 2009, SARS introduced Section 12J to the Income Tax Act, with the purpose of

stimulating investment into local SMMEs. • Any investment made into a SARS-approved VCC is 100% deductible from

the investor’s taxable income in the year of investment; whether the investor is an individual, a company or a trust.

• Ring-fenced VCC’s, like Euphoric Capital, allow South African taxpayers to indirectlyinvest in qualifying investments which they have identified and benefit from the tax deduction associated with Section 12J, whilst having exposure only to their specific investment through a specific class of share.

• In order for the tax deduction to remain permanent, an investor must holdthe shares in the Section 12J VCC for a minimum period of 5 years. If the investor disposes of their shares prior to the 5-year period, the investor would be required to pay back the full tax deduction with no interest or penalties incurred.

• When an investor exits the Section 12J VCC, the investor’s base cost for capitalgains tax (CGT) purposes will be reduced to zero. This means the investor will pay CGT on their investment amount as well as any growth on the investment. By way of example, if the initial investment amount is R1 million and the investment fails to increase in value, the investor will incur CGT on the R1 million.

The following table provides the impact of a 100% tax deduction in year 1 on an investors risk capital.

1Assuming a maximum marginal tax rate

INVESTMENT

Investment Amount

INDIVIDUALS

R1000 000 R1000 000 R1000 000

Tax Rate 45% 45% 28%

Minimum Return in Year 1 (Tax Deduction) R450 0001 R450 000 R280 000

Net Investment/Risk Capital

R550 000 R550 000 R720 000

TRUST COMPANIES/CCs

Euphoric Capital Limited• Euphoric Capital helps investors diversify and grow their wealth through tax-friendly,

property-baked investments in the hospitality sector.• By partnering with operators and developers, Euphoric Capital is able to create a

bigger impact on the economy while enhancing investors’ exposure to high-quality hospitality investment opportunities in key areas in South Africa.

• Euphoric Capital is an authorised Financial Services Provider (FSP #48776)registered with the FSCA. A copy of the FSCA licence can be found in Annexure 4 of the Euphoric Capital Prospectus.

• Euphoric Capital is approved by SARS as a Venture Capital Company intermsof Section 12J of the Income Tax Act under reference number VCC-0078.

• Investments into Euphoric Capital are 100% deductible from an Investor’staxable income, in the tax year in which the investment is made.

Paul SykesChairman of the BoardB. Compt (Unisa)

Dean McluckieExecutive DirectorB. Com. (Honours) in economics & information systems(Rhodes University)

Jonathan BolleursNon-Executive DirectorB.Com. (Honours) in Business Management (Stellenbosch)

Steven JohnstoneNon-Executive DirectorB. Sc. (Honours) Environmental Science(Rhodes University), MBA (GIBBS, University of Pretoria)

Team

Strategic Partners & Advisers

Investment OpportunityWe have identified an established hospitality development with more than R175mil worth of infrastructure already developed where we are able to acquire brand-new, fully furnished hospitality lodges at less than R11,000 m2. his Price point presents a fantastic opportunity for capital growth over the investment period. The existing operator, The Touchdown Group, has achieved historial yeilds of 7%-9% p.a. over the past 2 years, which is expected to continue into the future. Last but not least, the inherent tax deduction results in an additional annual return on the investment to a maximum of 9% p.a.*

The maximum annual return on investment is calcualted as flows: 45%/5= 9%. This is only if the client holds the investment for 5 years and exits the VCC after 5 years and 1 day from the date of investment.

Minimum Investment: R50,000Maximum Investment: R2,500,000Subscription price per share: R100Share Class: CRisk-Profile: Low to Moderate RiskProjected after-tax IRR: 16%-20% p.a.Closing date: 22 November 2019

Exit OpportunityShares need to be held for a minimum of five years to avoid a recoupment of the upfront tax deduction. After 5 years, investors in Euphoric Capital will have an opportunity to acquire any of the underlying properties. Should the Euphoric Capital shareholders choose not to acquire the underlying properties, they will be sold on the open market. Details of this exit option can be explained in more detail with a Euphoric Capital representative.

An alternative exit strategy may be to list the Euphoric Capital shares or the underlying investments on an alternative exchange (such as ZARX) to provide liquidity for those investors looking to exit after year 5.

FeesCapital Raising Fee: Once-off 1.5% (excl. VAT) of capital raisedAnnual Management Fee: 1.9% (excl. VAT) p.a. of capital raised

3

4

Pool ofInvestors

InvesteeCompanies

Fund Manager

1

7

6

InvesteeCompanies

25

1. Investment into VCC2. VCC issues investor with VCC share

certificate an tax certificate3. VCC capitalises investee companies4. Investee companies pay dividend to VCC5. VCC pays dividend to investors6. Investor allowed to claim tax deduction

when submitting return to SARS7. Investor submits tax certificate to SARS

(if requested)

Investment Structure

The diagram provides an illistration of a typical Euphoric Capital Investment

ConclusionA selected investment into Euphoric Capital with exposure to the Seasons 12J Collection provides investors with exposure to one of the lowest-risk 12J investment opportunities on the market. Investors benefit from the following key fundamentals:

1. Underlying security of property.2. Dedicated operator with over 20 years worth of experience in the industry.3. Projected yields of 11% - 13% p.a on effective risk capital (assuming maximum marginal tax rate).4. Historical capital growth of 7.5% - 8.5% p.a.5. 100% tax deduction on total investment amount.6. Overall projected after-tax IRR of 16% - 20% p.a.7. Proven, profitable business model with over R175mil worth of infrastructure already built.

Euphoric Capital Is An Authorised Financial Services Provider (FSP#48776)And An Approved Section 12J Venture Capital Company (VCC#0078)

Contact Us011 575 8207

dean@euphoric.groupwww.euphoriccapital.co.za

ORSchedule a Meeting

https://go.oncehub.com/EuphoricCapital