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July 2005

THI S SAMPLE PLAN W AS ORI GI NALLY W RI TTEN I N SOUTH AFRI CAN RAND ( R) .

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THI S SAMPLE PLAN W AS ORI GI NALLY W RI TTEN I N SOUTH AFRI CAN RAND ( R) .

Co n f i d e n t i a l i t y A g r e e m e n t

The undersigned reader acknowledges that the information provided by _______________ inthis business plan is confidential; therefore, reader agrees not to disclose it without theexpress written permission of _______________.

It is acknowledged by reader that information to be furnished in this business plan is in allrespects confidential in nature, other than information which is in the public domain throughother means and that any disclosure or use of same by reader, may cause serious harm or

damage to _______________.

Upon request, this document is to be immediately returned to _______________.

___________________Signature

___________________Name (typed or printed)

___________________Date

This is a business plan. It does not imply an offering of securities.

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1 . 0 Ex e c u t i v e S u m m a r y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.2 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.3 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2 . 0 Co m p a n y Su m m a r y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.1 Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.2 Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

3 . 0 P r o d u c t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

4 . 0 M a r k e t A n a l y s i s Su m m a r y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

4.1 Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64.2 Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.3 Industry Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

4.3.1 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

5 . 0 S t r a t e g y a n d I m p l e m e n t a t i o n S u m m a r y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.1 Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.2 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.3 Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

5.3.1 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.4 Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

6 . 0 M a n a g e m e n t Su m m a r y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1

6.1 Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

7 . 0 Fi n a n c i a l P l a n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2

7.1 Start-up Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

7.2 Important Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137.3 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137.4 Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147.5 Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Table of Contents

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1.0 Executive Summary

I n t r o d u c t i o n

FynbosFarm will be a project built around a highly successful businessman and thedevelopment and training of skilled and semi-skilled staff in the hydroponics and instant turfmarket. The project aim is to carry out intensive and high turnover production, off a smallarea, while providing work and leadership experience for local women.

The company is a combination of cutting edge, high quality, efficient food technology and

production. It is committed to the improvement of taste in vegetables and excellent qualityand nutritional value. The company will provide education, experience and research in thehydroponic field. It has the experience and extensive knowledge of well-known grower MikeShelly as a consultant. This project will be KZN-based, and will supply vegetables for thenational and international markets, and instant turf for the local market.

P r o d u c t s

The 4 main crops to be grown will be instant turf, long life tomatoes, cucumbers, and coloured

peppers.

Tomatoes: 4ha under plastic which will produce 2100 000 kgs per year Cucumbers: 1ha under plastic which will produce 205 000 kgs per year Peppers: 1ha under plastic which will produce 250 000 kgs per year Turf: 30ha in the open.

Fi n a n c i a l c o n s i d e r a t i o n s

The company is seeking R20 798 753 in both short-term and long term funding to finance thepurchase of a new farm and development costs of the project. This will cover startup expensesand first year loses. it is estimated that the company will begin to make a profit in year 2 ofoperations. The company's break even point is a monthly production of 38 479kg's ofproduce The project is expected to begin production within 8 months from start of the first

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R0

R2,000,000

R4,000,000

R6,000,000

R8,000,000

R10,000,000

R12,000,000

R14,000,000

R16,000,000

R18,000,000

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

SalesGross Margin

Net Profit

Highlights

1.1 Objectives

The objective of this project is to establish an intensive farm, producing high-quality producefor both the national and international market year round.

1 2 Mission

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1.3 Keys to Success

Efficient production utilizing greenhouses. No existing projects of this magnitude in the K.Z.N region. Experience in the vegetable industry goes back to 1996.

2.0 Company Summary

FynbosFarm will be a partnership of successful businessmen developing a small farm into a

highly productive hydroponics and instant turf project.

Hydroponics is the growing of high-quality vegetables in high-tech, multi-span greenhouses.The produce is grown in 15L bags with a medium used to support the root system. The plantsare automatically fed nutrients through irrigation systems.The plants are grown in the bestsuitable growing conditions, which allows each plant to produce the maximum fruit possible.

Instant turf will be grown out in open field production. The turf will be irrigated via overheadspray units, using the run-off fertilizer from the multispan tunnels. This fertilizer is highly

effective and will provide all the requirements the instant turf will require. The turf will be cutand sold by the square meter, and is harvested with a sod cutter.

The company will concentrate on the production of tomatoes, peppers and cucumbers in thetunnels, and in time will pursue more selective vegetables and the fresh cut flower market.

2.1 Company Ownership

FynbosFarm is owned jointly by its two founders. Founder 1 will serve as the project manager.

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The largest portion of the start-up requirements is R20 Million for purchase of the site andconstruction of the necessary buildings and infrastructure, including well-digging. These arelisted below as long-term assets.

The start-up period is five months long, and includes construction and one and a half monthsfor growing the first crops, to be sold beginning in July.

Table: Start-up

Start-up

Requirements

Start-up ExpensesLegal R70,000Borehole testing R10,000Seedlings R128,000Sawdust R155,000Plant bags R57,753Twine and clips R28,000Site leveling R250,000Other R95,000Total Start-up Expenses R793,753

Start-up AssetsCash Required R5,000Other Current Assets R0Long-term Assets R20,000,000Total Assets R20,005,000

Total Requirements R20,798,753

R25,000,000

Start-up

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4.0 Market Analysis Summary

In an era of big-box food stores, when 4 major grocery chains control the purchase ofvegetables, the proliferation of open air markets has come out of nowhere, giving moreconsumers an option to purchase fresh vegetables. Such markets include retailers such asFruit and Veg City and VegExpress. FynbosFarm will not only supply the major supermarkets,but also the markets mentioned above.

With these trends in mind, FynbosFarm will also concentrate on wholesale live vegetablemarkets that sell hydroponic produce, fresh farmers markets, and export to neighbouring

states and international markets.

4.1 Market Segmentation

For the purposes of this plan, we are focusing on retail outlets and VegCity shops within 45miles of our location.

Table: Market Analysis

Market Analysis2005 2006 2007 2008 2009

Potential Customers Growth CAGRRetail outlets 25% 100 125 156 195 244 24.98%vegcities 10% 20 22 24 26 29 9.73%Other 25% 50 63 79 99 124 25.49%Total 23.62% 170 210 259 320 397 23.62%

Market Analysis (Pie)

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4.2 Target Market Segment Strategy

The target customers include the major retail outlets and export markets for the vegetables.

The target customers for instant lawn include nursery and garden centres, landscapers, andprivate customers.

4.3 Industry Analysis

The hydroponic industry is still fairly new in the S.A. market, in terms of research and thenumber of completely developed farms. The biggest negative is the start-up costs to erect afully state-of-the-art project. Therefore, if a project is going to be developed, two majorfactors need to be taken into account.

S el e c t e d M a r k e t s . Due to high quality, vegetables must be sold retail outlets, etc. toretrieve highest price.

P r o j e c t s i z e. The project must be able to supply produce all year round; if not, retail

outlets will not be interested.

The Industry is still small, and therefore a project of this magnitude will create interest amongall the major veg outlet markets.

4.3.1 Competition and Buying Patterns

FynbosFarm aims to be the biggest growers of hydroponics in the KZN region. At present thereare very few big growers, minimizing the competition. The advantage of hydroponics on alarge scale is the availability to produce vegetables all year round in large quantities. Thisimmediately becomes a positive factor with major retail outlets and exporters

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5.1 Competitive Edge

FynbosFarm's main competitive advantages are:

Efficient production utilizing greenhouses. No existing projects of this magnitude in the K.Z.N region. Experience in the vegetable industry goes back to 1996.

5.2 Marketing Strategy

FynbosFarm will market and supply its products to the selected outlets aggressively, focusingat first on local markets, and then on export options. We will emphasize the reliable year-round output of our climate-controlled hydroponics facilities, as well as the ability to produce in-demand, non-native vegetables.

Marketing for turf will take place with direct contact between FynbosFarm and regionalgreenhouses and landscapers.

The company will also eventually develop a website and advertise on the Internet, althoughthese future marketing avenues are not included in this plan.

5.3 Sales Strategy

At FynbosFarm, the sales process is primarily the same for vegetables as it is for instant turf,in that both products will be mainly sold through wholesale marketing. Shipments ofvegetables will be transported in refrigerated trucks as per orders and instant turf will be

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Table: Sales Forecast

Sales ForecastFY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Unit SalesTomatoes 2,100,000 1,500,000 2,100,000 1,500,000 2,100,000Peppers 205,000 210,000 205,000 210,000 205,000Cucumbers 250,000 250,000 250,000 250,000 250,000Instant Turf 150,000 200,000 200,000 200,000 200,000Total Unit Sales 2,705,000 2,160,000 2,755,000 2,160,000 2,755,000

Unit Prices FY 2006 FY 2007 FY 2008 FY 2009 FY 2010Tomatoes R4.00 R4.25 R4.50 R4.75 R5.00

Peppers R10.00 R10.50 R11.00 R11.50 R12.00Cucumbers R1.80 R1.90 R2.10 R2.20 R2.30Instant Turf R10.00 R11.00 R12.00 R13.00 R14.00

SalesTomatoes R8,400,000 R6,375,000 R9,450,000 R7,125,000 R10,500,000Peppers R2,050,000 R2,205,000 R2,255,000 R2,415,000 R2,460,000Cucumbers R450,000 R475,000 R525,000 R550,000 R575,000Instant Turf R1,500,000 R2,200,000 R2,400,000 R2,600,000 R2,800,000Total Sales R12,400,000 R11,255,000 R14,630,000 R12,690,000 R16,335,000

Direct Unit Costs FY 2006 FY 2007 FY 2008 FY 2009 FY 2010Tomatoes R2.00 R2.13 R2.25 R2.38 R2.50Peppers R5.00 R5.25 R5.50 R5.75 R6.00Cucumbers R0.90 R0.95 R1.05 R1.10 R1.15Instant Turf R4.80 R5.28 R5.76 R6.24 R6.72

Direct Cost of SalesTomatoes R4,200,000 R3,187,500 R4,725,000 R3,562,500 R5,250,000Peppers R1,025,000 R1,102,500 R1,127,500 R1,207,500 R1,230,000Cucumbers R225,000 R237,500 R262,500 R275,000 R287,500Instant Turf R720,000 R1,056,000 R1,152,000 R1,248,000 R1,344,000Subtotal Direct Cost of Sales R6,170,000 R5,583,500 R7,267,000 R6,293,000 R8,111,500

Sales Monthly

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R0

R2,000,000

R4,000,000

R6,000,000

R8,000,000

R10,000,000

R12,000,000

R14,000,000

R16,000,000

R18,000,000

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Tomatoes

Peppers

Cucumbers

Instant Turf

Sales by Year

5.4 Milestones

The following table and chart show the main milestones for the first year.

Table: Milestones

Milestones

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2005 2006

Raise funding

Begin Construction

Begin First Crop Planting

Begin Sales

Begin Turf Sales

Total Sales over R12 Million

Milestones

6.0 Management Summary

The project manager has 10 years of experience in the vegetable industry.

[ P r o p r i e t a r y a n d c o n f i d e n t i a l i n f o r m a t i o n r e m o v e d . ]

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7.0 Financial Plan

The financial plan is outlined in the following tables and charts. With initial loans of R18 Million,we can construct the hydroponics facilities and begin crop development. based on the highdemand for these products, we expect solid sales in the first year, with improving margins.

7.1 Start-up Funding

FynbosFarm needs R20 798 753 to fund its start-up requirements. The owner will provide R2798 753, and is seeking another R 18 Million in long-term borrowing, using as collateral twoother successful agricultural ventures he owns.

Table: Start-up Funding

Start-up FundingStart-up Expenses to Fund R793,753Start-up Assets to Fund R20,005,000

Total Funding Required R20,798,753

AssetsNon-cash Assets from Start-up R20,000,000Cash Requirements from Start-up R5,000Additional Cash Raised R0Cash Balance on Starting Date R5,000Total Assets R20,005,000

Liabilitiesand Capital

LiabilitiesCurrent Borrowing R0Long-term Liabilities R18,000,000Accounts Payable (Outstanding Bills) R0

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7.4 Projected Profit and Loss

The following table and charts show our projected Profit and Loss statement. Monthly detailsfor the first year can be found in the appendix.

Table: Profit and Loss

Pro Forma Profit and LossFY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Sales R12,400,000 R11,255,000 R14,630,000 R12,690,000 R16,335,000Direct Costs of Goods R6,170,000 R5,583,500 R7,267,000 R6,293,000 R8,111,500Other Costs of Goods R0 R0 R0 R0 R0

------------ ------------ ------------ ------------ ------------Cost of Goods Sold R6,170,000 R5,583,500 R7,267,000 R6,293,000 R8,111,500

Gross Margin R6,230,000 R5,671,500 R7,363,000 R6,397,000 R8,223,500Gross Margin % 50.24% 50.39% 50.33% 50.41% 50.34%

ExpensesPayroll R480,000 R483,000 R519,750 R559,345 R602,009Marketing/Promotion R10,000 R10,500 R11,025 R11,907 R12,860Depreciation R666,660 R666,700 R666,700 R666,700 R666,700H.P.s R120,000 R120,600 R121,203 R121,203 R120,600Fuel R100,000 R105,000 R110,250 R115,726 R121,550maintenance R20,000 R21,000 R22,050 R23,153 R24,310Payroll Taxes R395,925 R365,584 R459,480 R414,284 R516,155Other R180,000 R189,000 R198,450 R208,373 R218,719

------------ ------------ ------------ ------------ ------------Total Operating Expenses R1,972,585 R1,961,384 R2,108,908 R2,120,691 R2,282,903

Profit Before Interest and Taxes R4,257,415 R3,710,116 R5,254,092 R4,276,309 R5,940,597EBITDA R4 924 075 R4 376 816 R5 920 792 R4 943 009 R6 607 297

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(R50,000)

R0

R50,000

R100,000

R150,000

R200,000

R250,000

R300,000

R350,000

R400,000

R450,000

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Profit Monthly

R2,500,000

R3,000,000

R3,500,000

Profit Yearly

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R0

R100,000

R200,000

R300,000

R400,000

R500,000

R600,000

R700,000

R800,000

R900,000

R1,000,000

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Gross Margin Monthly

R6,000,000

R7,000,000

R8,000,000

R9,000,000

Gross Margin Yearly

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7.5 Projected Cash Flow

The following table and chart show our projected cash flow, including estimate repayments ofthe principal borrowing amount.

(R200,000)

R0

R200,000

R400,000

R600,000

R800,000

R1,000,000

R1,200,000

R1,400,000

R1,600,000

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Net Cash Flow

Cash Balance

Cash

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Table: Cash Flow

Pro Forma Cash Flow FY 2006 FY 2007 FY 2008 FY 2009 FY 2010Cash Received

Cash from OperationsCash Sales R1,860,000 R1,688,250 R2,194,500 R1,903,500 R2,450,250Cash from Receivables R9,471,833 R9,665,383 R12,144,769 R10,953,616 R13,570,761Subtotal Cash from Operations R11,331,833 R11,353,633 R14,339,269 R12,857,116 R16,021,011

Additional Cash ReceivedSales Tax, VAT, HST/GSTReceived

R0 R0 R0 R0 R0

New Current Borrowing R0 R0 R0 R0 R0New Other Liabilities (interest-free) R0 R0 R0 R0 R0New Long-term Liabilities R0 R0 R0 R0 R0Sales of Other Current Assets R0 R0 R0 R0 R0Sales of Long-term Assets R0 R0 R0 R0 R0New Investment Received R0 R0 R0 R0 R0Subtotal Cash Received R11,331,833 R11,353,633 R14,339,269 R12,857,116 R16,021,011

Expenditures FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Expenditures from Operations

Cash spending R480,000 R483,000 R519,750 R559,345 R602,009Bill Payments R8,567,859 R9,155,319 R10,413,285 R10,018,984 R11,074,983Subtotal Spent on Operations R9,047,859 R9,638,319 R10,933,035 R10,578,329 R11,676,992

Additional Cash SpentSales Tax, VAT, HST/GST Paid Out R0 R0 R0 R0 R0Principal Repaymentof CurrentBorrowing

R0 R0 R0 R0 R0

Other Liabilities PrincipalRepayment

R0 R0 R0 R0 R0

Long-termLiabilities Principal

RepaymentR870,000 R1,000,000 R1,250,000 R1,500,000 R4,000,000

Purchase Other Current Assets R0 R0 R0 R0 R0Purchase Long-term Assets R0 R0 R0 R0 R0Dividends R0 R0 R0 R0 R0SubtotalCash Spent R9 917 859 R10 638 319 R12 183 035 R12 078 329 R15 676 992

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7.6 Projected Balance Sheet

The Balance Sheet shows a steady increase in Net Worth over the next five years.

Table: Balance Sheet

Pro Forma Balance SheetFY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Assets

Current Assets

Cash R1,418,974 R2,134,288 R4,290,523 R5,069,310 R5,413,329Accounts Receivable R1,068,167 R969,534 R1,260,264 R1,093,148 R1,407,137Other Current Assets R0 R0 R0 R0 R0Total Current Assets R2,487,141 R3,103,822 R5,550,787 R6,162,458 R6,820,467

Long-termAssetsLong-termAssets R20,000,000 R20,000,000 R20,000,000 R20,000,000 R20,000,000Accumulated Depreciation R666,660 R1,333,360 R2,000,060 R2,666,760 R3,333,460Total Long-term Assets R19,333,340 R18,666,640 R17,999,940 R17,333,240 R16,666,540Total Assets R21,820,481 R21,770,462 R23,550,727 R23,495,698 R23,487,007

Liabilities and Capital FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Current LiabilitiesAccounts Payable R937,115 R454,115 R891,866 R332,521 R962,011Current Borrowing R0 R0 R0 R0 R0Other Current Liabilities R0 R0 R0 R0 R0Subtotal Current Liabil it ies R937,115 R454,115 R891,866 R332,521 R962,011

Long-term Liabilities R17,130,000 R16,130,000 R14,880,000 R13,380,000 R9,380,000Total Liabilities R18,067,115 R16,584,115 R15,771,866 R13,712,521 R10,342,011

Paid-in Capital R2,798,753 R2,798,753 R2,798,753 R2,798,753 R2,798,753Retained Earnings (R793,753) R954,613 R2,387,594 R4,980,108 R6,984,424Earnings R1,748,366 R1,432,981 R2,592,514 R2,004,316 R3,361,818Total Capital R3,753,366 R5,186,347 R7,778,861 R9,783,177 R13,144,995Total Liabilities and Capital R21,820,481 R21,770,462 R23,550,727 R23,495,698 R23,487,007

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Table: Ratios

Ratio AnalysisFY 2006 FY 2007 FY 2008 FY 2009 FY 2010

IndustryProfile

Sales Growth 0.00% -9.23% 29.99% -13.26% 28.72% -1.70%

Percent of Total AssetsAccounts Receivable 4.90% 4.45% 5.35% 4.65% 5.99% 2.94%Other Current Assets 0.00% 0.00% 0.00% 0.00% 0.00% 24.83%Total Current Assets 11.40% 14.26% 23.57% 26.23% 29.04% 39.79%Long-term Assets 88.60% 85.74% 76.43% 73.77% 70.96% 60.21%Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabilities 4.29% 2.09% 3.79% 1.42% 4.10% 22.33%Long-term Liabilities 78.50% 74.09% 63.18% 56.95% 39.94% 22.42%Total Liabilities 82.80% 76.18% 66.97% 58.36% 44.03% 44.75%Net Worth 17.20% 23.82% 33.03% 41.64% 55.97% 55.25%

Percent of SalesSales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%Gross Margin 50.24% 50.39% 50.33% 50.41% 50.34% 46.28%Selling, General & AdministrativeExpenses

36.14% 37.66% 32.61% 34.62% 29.76% 29.76%

Advertising Expenses 0.00% 0.00% 0.00% 0.00% 0.00% 0.36%

Profit Before Interest and Taxes 34.33% 32.96% 35.91% 33.70% 36.37% 0.30%

Main RatiosCurrent 2.65 6.83 6.22 18.53 7.09 1.08Quick 2.65 6.83 6.22 18.53 7.09 0.38Total Debt to Total Assets 82.80% 76.18% 66.97% 58.36% 44.03% 54.22%Pre-tax Return on Net Worth 66.54% 39.47% 47.61% 29.27% 36.54% 0.29%Pre-tax Return on Assets 11.45% 9.40% 15.73% 12.19% 20.45% 0.63%

Additional Ratios FY 2006 FY 2007 FY 2008 FY 2009 FY 2010Net Profit Margin 14.10% 12.73% 17.72% 15.79% 20.58% n.a

Return on Equity 46.58% 27.63% 33.33% 20.49% 25.57% n.a

Activity RatiosAccounts Receivable Turnover 9.87 9.87 9.87 9.87 9.87 n.aCollection Days 29 39 33 40 33 n a

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Appendix Table: Sales Forecast

Sales ForecastJul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Unit SalesTomatoes 0% 100,000 200,000 300,000 300,000 200,000 100,000 0 0 100,000 200,000 300,000 300,000Peppers 0% 10,000 15,000 20,000 30,000 30,000 30,000 25,000 20,000 15,000 0 0 10,000

Cucumbers 0% 20,000 45,000 45,000 15,000 0 0 20,000 45,000 45,000 15,000 0 0Instant Turf 0% 0 0 0 30,000 30,000 30,000 30,000 30,000 0 0 0 0Total Unit Sales 130,000 260,000 365,000 375,000 260,000 160,000 75,000 95,000 160,000 215,000 300,000 310,000

Unit Prices Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May JunTomatoes R4.00 R4.00 R4.00 R4.00 R4.00 R4.00 R4.00 R4.00 R4.00 R4.00 R4.00 R4.00Peppers R10.00 R10.00 R10.00 R10.00 R10.00 R10.00 R10.00 R10.00 R10.00 R10.00 R10.00 R10.00Cucumbers R1.80 R1.80 R1.80 R1.80 R1.80 R1.80 R1.80 R1.80 R1.80 R1.80 R1.80 R1.80Instant Turf R10.00 R10.00 R10.00 R10.00 R10.00 R10.00 R10.00 R10.00 R10.00 R10.00 R10.00 R10.00

SalesTomatoes R400,000 R800,000 R1,200,000 R1,200,000 R800,000 R400,000 R0 R0 R400,000 R800,000 R1,200,000 R1,200,000Peppers R100,000 R150,000 R200,000 R300,000 R300,000 R300,000 R250,000 R200,000 R150,000 R0 R0 R100,000Cucumbers R36,000 R81,000 R81,000 R27,000 R0 R0 R36,000 R81,000 R81,000 R27,000 R0 R0Instant Turf R0 R0 R0 R300,000 R300,000 R300,000 R300,000 R300,000 R0 R0 R0 R0Total Sales R536,000 R1,031,000 R1,481,000 R1,827,000 R1,400,000 R1,000,000 R586,000 R581,000 R631,000 R827,000 R1,200,000 R1,300,000

Direct Unit Costs Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May JunTomatoes 50.00% R2.00 R2.00 R2.00 R2.00 R2.00 R2.00 R2.00 R2.00 R2.00 R2.00 R2.00 R2.00Peppers 50.00% R5.00 R5.00 R5.00 R5.00 R5.00 R5.00 R5.00 R5.00 R5.00 R5.00 R5.00 R5.00Cucumbers 50.00% R0.90 R0.90 R0.90 R0.90 R0.90 R0.90 R0.90 R0.90 R0.90 R0.90 R0.90 R0.90Instant Turf 48.00% R4.80 R4.80 R4.80 R4.80 R4.80 R4.80 R4.80 R4.80 R4.80 R4.80 R4.80 R4.80

Direct Cost of SalesTomatoes R200,000 R400,000 R600,000 R600,000 R400,000 R200,000 R0 R0 R200,000 R400,000 R600,000 R600,000Peppers R50,000 R75,000 R100,000 R150,000 R150,000 R150,000 R125,000 R100,000 R75,000 R0 R0 R50,000Cucumbers R18,000 R40,500 R40,500 R13,500 R0 R0 R18,000 R40,500 R40,500 R13,500 R0 R0Instant Turf R0 R0 R0 R144,000 R144,000 R144,000 R144,000 R144,000 R0 R0 R0 R0Subtotal Direct Co st o f Sal es R2 68,000 R51 5,500 R74 0,500 R907 ,5 00 R694 ,0 00 R494,00 0 R2 87,000 R2 84,500 R31 5,500 R41 3,500 R600 ,0 00 R650,00 0

Appendix

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Appendix Table: Personnel

Personnel PlanJul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Project manager 0% R35,000 R35,000 R35,000 R35,000 R35,000 R35,000 R35,000 R35,000 R35,000 R35,000 R35,000 R35,000Consultant 0% R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000 R5,000Total People 2 2 2 2 2 2 2 2 2 2 2 2

Total Payroll R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000

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Appendix Table: Profit and Loss

Pro Forma Profit and LossJul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Sales R536,000 R1,031,000 R1,481,000 R1,827,000 R1,400,000 R1,000,000 R586,000 R581,000 R631,000 R827,000 R1,200,000 R1,300,000Direct Costs of Goods R268,000 R515,500 R740,500 R907,500 R694,000 R494,000 R287,000 R284,500 R315,500 R413,500 R600,000 R650,000Other Costs of Goods R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0

--- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- -Cost of Goods Sold R268,000 R515,500 R740,500 R907,500 R694,000 R494,000 R287,000 R284,500 R315,500 R413,500 R600,000 R650,000

Gross Margin R268,000 R515,500 R740,500 R919,500 R706,000 R506,000 R299,000 R296,500 R315,500 R413,500 R600,000 R650,000Gross Margin % 50.00% 50.00% 50.00% 50.33% 50.43% 50.60% 51.02% 51.03% 50.00% 50.00% 50.00% 50.00%

ExpensesPayroll R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000Marketing/Promotion R833 R833 R833 R833 R833 R833 R833 R833 R833 R833 R833 R833Depreciation R55,555 R55,555 R55,555 R55,555 R55,555 R55,555 R55,555 R55,555 R55,555 R55,555 R55,555 R55,555H.P.s R10,000 R10,000 R10,000 R10,000 R10,000 R10,000 R10,000 R10,000 R10,000 R10,000 R10,000 R10,000Fuel R8,333 R8,333 R8,333 R8,333 R8,333 R8,333 R8,333 R8,333 R8,333 R8,333 R8,333 R8,333maintenance R1,667 R1,667 R1,667 R1,667 R1,667 R1,667 R1,667 R1,667 R1,667 R1,667 R1,667 R1,667Payroll Taxes 15% R20,070 R33,064 R44,876 R53,644 R42,435 R31,935 R21,068 R20,936 R22,564 R27,709 R37,500 R40,125Other R15,000 R15,000 R15,000 R15,000 R15,000 R15,000 R15,000 R15,000 R15,000 R15,000 R15,000 R15,000

--- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- - - -- -- -- -- -- -

Total Operating Expenses R151,458 R164,452 R176,265 R185,032 R173,823 R163,323 R152,456 R152,325 R153,952 R159,097 R168,888 R171,513

Profi t Be fo re In te re st and T axes R1 16,542 R351,04 8 R5 64,235 R734 ,4 68 R532 ,17 7 R3 42,677 R146,54 4 R144,17 5 R16 1,548 R254,40 3 R43 1,112 R47 8,4 87EBITDA R172,097 R406,603 R619,790 R790,023 R587,732 R398,232 R202,099 R199,730 R217,103 R309,958 R486,667 R534,042Interest Expense R149,750 R149,500 R149,000 R148,500 R148,000 R147,250 R146,500 R145,750 R145,000 R144,250 R143,500 R142,750Taxes Incurred (R9,963) R60,464 R124,571 R175,790 R115,253 R58,628 R13 (R472) R4,964 R33,046 R86,284 R100,721

Net Profit (R23,246) R141,084 R290,665 R410,178 R268,924 R136,799 R31 (R1,102) R11,584 R77,107 R201,328 R235,016Net Profit/Sales -4.34% 13.68% 19.63% 22.45% 19.21% 13.68% 0.01% -0.19% 1.84% 9.32% 16.78% 18.08%

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Appendix Table: Cash Flow

Pro Forma Cash FlowJul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Cash Received

Cash from Operations

Cash Sales R80 ,4 00 R1 54,650 R22 2,1 50 R274 ,05 0 R2 10,000 R150,00 0 R87 ,9 00 R87 ,1 50 R94,650 R12 4,050 R1 80,000 R195,00 0Cash from Re cei vabl es R15 ,1 87 R4 69,625 R88 9,1 00 R1,268,65 3 R1 ,5 40,852 R1,178 ,66 7 R83 8,2 70 R49 7,9 58 R4 95,267 R54 1,903 R7 13,518 R1 ,0 22,833S ubto ta l Cash f rom Opera tions R95,587 R624,275 R1,111,250 R1,542,703 R1,750,852 R1,328,667 R926,170 R585,108 R589,917 R665,953 R893,518 R1,217,833

Additional Cash ReceivedSales Tax, VAT, HST/GST Received 0.00% R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0New Current Borrowing R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0New Other Liabilities (interest-free) R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0New Long-term Liabilities R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0Sales of Other Current Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0Sales of Long-term Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0New Investment Received R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0Subtotal Cash Recei ved R95 ,5 87 R6 24,275 R 1,111 ,2 50 R 1,542,70 3 R1 ,7 50,852 R 1,328 ,66 7 R92 6,1 70 R58 5,1 08 R5 89,917 R66 5,953 R8 93,518 R 1,2 17,833

Expenditures Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Expenditures from Operations

Cash spending R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000 R40,000Bill Payments R15,456 R474,713 R804,375 R1,102,330 R1,311,743 R1,026,592 R758,405 R490,285 R487,791 R528,211 R662,631 R905,327Subtotal Spent on Operations R55,456 R514,713 R844,375 R1,142,330 R1,351,743 R1,066,592 R798,405 R530,285 R527,791 R568,211 R702,631 R945,327

Additional Cash SpentSales Tax, VAT, HST/GST Paid Out R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0Principal Repayment of CurrentBorrowing

R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0

Other Liabilities Principal Repayment R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0Long-term Liabilities PrincipalRepayment

R30,000 R30,000 R60,000 R60,000 R60,000 R90,000 R90,000 R90,000 R90,000 R90,000 R90,000 R90,000

Purchase Other Current Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0Purchase Long-term Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0Dividends R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0Subtotal Cash Spent R85 ,4 56 R5 44,713 R90 4,3 75 R1,202,33 0 R1 ,4 11,743 R1,156 ,59 2 R88 8,4 05 R62 0,2 85 R6 17,791 R65 8,211 R7 92,631 R1 ,0 35,327

Net Cash Flow R10,130 R79,562 R206,875 R340,374 R339,109 R172,075 R37,765 (R35,177) (R27,874) R7,743 R100,888 R182,506Cash Balance R15,130 R94,692 R301,567 R641,940 R981,049 R1,153,124 R1,190,889 R1,155,712 R1,127,837 R1,135,580 R1,236,468 R1,418,974

Appendix

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Appendix Table: Balance Sheet

Pro Forma Balance SheetJul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Assets Starting Balances

Current Assets

Cash R5,000 R15,130 R94,692 R301,567 R641,940 R981,049 R1,153,124 R1,190,889 R1,155,712 R1,127,837 R1,135,580 R1,236,468 R1,418,974Accou nts Recei vabl e R0 R4 40,413 R847 ,1 38 R 1,21 6,8 88 R1,50 1,1 85 R 1,150 ,3 33 R8 21,667 R481,49 7 R477,38 8 R51 8,472 R679 ,5 18 R9 86,000 R 1,0 68,167Other Current Assets R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0Total Current Assets R5,000 R455,544 R941,830 R1,518,455 R2,143,125 R2,131,383 R1,974,790 R1,672,385 R1,633,100 R1,646,309 R1,815,098 R2,222,468 R2,487,141

Long-term AssetsLong-term Assets R20,000,000 R20,000,000 R20,000,000 R20,000,000 R20,000,000 R20,000,000 R20,000,000 R20,000,000 R20,000,000 R20,000,000 R20,000,000 R20,000,000 R20,000,000Accumul ated De precia ti on R0 R55,555 R111 ,1 10 R166 ,66 5 R2 22,220 R27 7,775 R3 33,330 R388,88 5 R444,44 0 R49 9,995 R555 ,5 50 R6 11,105 R666,66 0Total Long-term Assets R20,000,000 R19,944,445 R19,888,890 R19,833,335 R19,777,780 R19,722,225 R19,666,670 R19,611,115 R19,555,560 R19,500,005 R19,444,450 R19,388,895 R19,333,340Total Assets R20,005,000 R20,399,989 R20,830,720 R21,351,790 R21,920,905 R21,853,608 R21,641,460 R21,283,500 R21,188,660 R21,146,314 R21,259,548 R21,611,363 R21,820,481

Liabilities and Capital Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Current LiabilitiesAccou nts Pa yabl e R0 R4 48,234 R767 ,8 83 R1,05 8,2 88 R1,27 7,2 25 R1,001 ,0 04 R7 42,058 R474,06 7 R470,32 9 R50 6,399 R632 ,5 27 R8 73,013 R937,11 5Current Borrowing R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0Other Current Liabilities R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0 R0

S ubto ta l Cur rent L iabi li ties R0 R448,234 R767,883 R1,058,288 R1,277,225 R1,001,004 R742,058 R474,067 R470,329 R506,399 R632,527 R873,013 R937,115

Long-term Liabilities R18,000,000 R17,970,000 R17,940,000 R17,880,000 R17,820,000 R17,760,000 R17,670,000 R17,580,000 R17,490,000 R17,400,000 R17,310,000 R17,220,000 R17,130,000Total Liabilities R18,000,000 R18,418,234 R18,707,883 R18,938,288 R19,097,225 R18,761,004 R18,412,058 R18,054,067 R17,960,329 R17,906,399 R17,942,527 R18,093,013 R18,067,115

Paid- in Capital R2,798,753 R2,798,753 R2,798,753 R2,798,753 R2,798,753 R2,798,753 R2,798,753 R2,798,753 R2,798,753 R2,798,753 R2,798,753 R2,798,753 R2,798,753Retained Earnings (R793,753) (R793,753) (R793,753) (R793,753) (R793,753) (R793,753) (R793,753) (R793,753) (R793,753) (R793,753) (R793,753) (R793,753) (R793,753)Earni ngs R0 (R2 3,2 46) R117 ,8 38 R408 ,50 3 R8 18,680 R1,087 ,6 04 R1,224,40 2 R1,224,433 R1 ,2 23,331 R1,234 ,9 15 R1,312 ,02 2 R1 ,51 3,350 R1 ,7 48,366Total Capital R2,005,000 R1,981,754 R2,122,838 R2,413,503 R2,823,680 R3,092,604 R3,229,402 R3,229,433 R3,228,331 R3,239,915 R3,317,022 R3,518,350 R3,753,366Total Liabilities and Capital R20,005,000 R20,399,989 R20,830,720 R21,351,790 R21,920,905 R21,853,608 R21,641,460 R21,283,500 R21,188,660 R21,146,314 R21,259,548 R21,611,363 R21,820,481

Net Worth R2,005,000 R1,981,754 R2,122,838 R2,413,503 R2,823,680 R3,092,604 R3,229,402 R3,229,433 R3,228,331 R3,239,915 R3,317,022 R3,518,350 R3,753,366

Appendix

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