Page 13 - Stellar IAR2015

3.2.3. opportunistically utilise the Company’s balance sheet to generate fees for shareholders through corporate nance strategies in support of investee companies or on a standalone basis.3.3. Sectors and geographiesStellar Capital will hold investments in three core areas:3.3.1. Industrials and Support Services;3.3.2. Financials; and3.3.3. Disruptive opportunities across all markets. This may comprise an investment in any business (typically technologyrelated) in the process of creating a new market or value network with the potential to displace established market leaders.Stellar Capital will initially invest in South African based investments with focused international operations, whilst retaining the ability to over time invest in foreign based investments which may or may not have established operations within South Africa.3.4. Other parameters Stellar Capital will:3.4.1. seek to invest in growth and early-maturity stage businesses in which management teams remain equity incentivised throughout the investment life cycle;3.4.2. establish primarily large minority equity holdings, but retain the ability to hold majority holdings, particularly during the initial stage of the investment;3.4.3. not retain operational management of its investees for prolonged periods, but will hold the ability do so during the initial stage of the investment or as is deemed necessary from time to time;3.4.4. seek board representation within its investees’ reporting structures without establishing board control for prolonged periods of the investment cycle;3.4.5. hold investments without pre-determined realisation periods; and3.4.6. exit investments in the event of:3.4.6.1. protracted periods of under-performance relative to criteria set by management depending on the nature, sector and stage of the investments;3.4.6.2. 3.4.6.3.4. Growth targetsreceipt of unsolicited o ers at materially higher values than attributed by Stellar Capital; or availability of alternative investments with substantially superior returns.Stellar Capital will seek to deliver total shareholder return in the form of NAV growth and shareholder distributions (where applicable) of at least 15% and more per annum over each rolling 3 year period target.Stellar Capital will retain a discretionary dividend policy until it has reached su cient maturity and stability in earnings from underlying investments. Cash will be retained for growth in the initial stages of development.The Board may amend the growth targets from time to time, subject to shareholder approval of material changes as required by section 15.7 of the JSE Listings Requirements.5. Categorisation of TransactionsInvestment Transactions undertaken by Stellar Capital will be categorised relative to the Company’s size (either market capitalisation or issued share capital as appropriate) as required by section 9 of the JSE Listings Requirements.For purposes of applying the JSE Listing Requirements and as approved by the JSE, the following investment activities are considered to be conducted in the ordinary course of business as contemplated in the JSE Listings Requirements:5.1. The acquisition and disposal of listed and unlisted equity and hybrid instruments;5.2. The acquisition and disposal of credit instruments, including loan notes, listed and unlisted bonds and redeemable preferenceshares;5.3. The advance of (and repayment of) loans and advances to investees and third-parties; and5.4. The underwriting of committed transactions where such underwriting commitment does not result in the acquisition ordisposal of an asset.STELLAR CAPITAL PARTNERS | 09