The Potato Farming & Distribution Company Version II

8/12/2019 The Potato Farming & Distribution Company Version II

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The Potato Farming and Distribution Company (Private) Limited

Vision -The Potato Co is a top 3 vertically integrated producer and distributor of fresh and processed table potatoes. Through our production and distribution

activities we are striving to make fresh table potatoes affordable and readily accessible to every Zimbabwean meal table/occasion.

Mission statement- Our mission is to make fresh and processed table potatoes affordable and readily accessible to every Zimbabwean and other selected

markets at the right time and at the right price.

Strategy Continual investment in the operational assets and systems of our vertically integrated model will allow us to us to exceed our customers

expectations in the size and quality of our product and the consistency of our supply. We will achieve our targets by investing in the scale and efficiency of our

production operations and in our relationships with our customers and business partners.

At an operational level, our strategy is focused on six key elements of our business model:

Land assets

Value is in use and not in ownership (Region II area)

Must have access to surface water4 access points (pump house points)

Good soil depth, quality and character

Must be at least 3,000 hectares (scalable through JVs with surrounding under uilitised farms up to 5,000)

Infrastructureroad, housing, irrigation, machinery and equipment storage

Procurement

Purchasing of inputs in bulk from manufacturer or in bulck from wholesaler, preferably on terms that cover crop production cycle

Full year procurement in October based on budget/crop plans for the coming year

Production

Highly mechanized production Two cropping cycles per annum on at least 75% of land

Land to be 80%-90% under irrigation

Potatoes lead crop

Maize (half yellow maize and half white maize) and soya bean trailing crops, seasonal cabbage crop

Processing and Distribution

Occurs on sight

One wholesale and distribution centre in Harare

Fresh potatoes branded

Processed potatoes, cut chips and chicken eggs for the retail outlets no name brands


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Two 30 tonne trucks for the Bulawayo market

3rd

party transportation for the export markets

Finance

Human resources

Top management paid mostly on meeting performance target similar to buy insell out at NAV BTG Pactual model

Shamva

Centenary

Chegutu

Mt Hampden

Chinhoyi

Glendale

Norton

MaronderaBeatrice

Darwindale

Mvuurwi

Mutoko road area/Enterprise Rural district council area


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Farming grains,

potatoes and cabbage

Soya

Maize

Processing of edible oils

and potatoes

Edible

oils

Feed

cake

Stock feed

Cattle

feed

Chicken

feed

Pig

feed

PorkBroilersBeef Eggs

Feed lot

Piggery

Poultry houses

Potatoes

Wholesale market and retail

outlet no name brands

Potatoes

Widows, orphans, the

homeless and the elderly


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1. Company name and what it means

The Potato Farming & Distribution Company (Private) Limited is a company involved in production of potatoes and their distribution on.

2. Company vision and mission statements. Give more detail on your business ethos and policy if possible

Vision - The Potato Co is a top 3 national producer and distributor of potatoes, planting and harvesting 1,000 hectares annually. Through continual

investment in our production platform and distribution infrastructure we are continually meeting our internal production and financial goals, allowing us

to exceed our customers expectations in the size and quality of our product and the consistency of our supply.

Mission statement- Our mission is to make fresh and processed table potatoes affordable and readily accessible to every Zimbabwean and other selected

markets at the right time and at the right price.

3. Any symbols you would like to be associated with? (e.g. leaf for agriculture)

Black farmer taking potatoes in the back of an old pickup truck to market with a potato field and packing shed in the back ground

4. Who are your competitors?

Farmers involved in potato production;

In distribution we are in competition with stand/stall owners in Mbare, Muchero Africa, Harare Produce Sales, Freshpro, FAVCO and Valley Farm

Secrets.

5. What distinguishes you from your competition?

Our operation is vertically integrated spanning production and distribution. We have developed our production infrastructure to feed into our distribution

channel, our competitors and our end user customers.

6. What colours would you want to be associated with and why?

Brown and greenrelates/represents fertile productive land.


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Yusuf Koya has entered into a f ixed term service agreement with the Company under the terms of which he agreed to act as an executive director of the

Company. The remuneration payable under this agreement is approximately US$367,000 gross per annum plus approximately US$38,000 gross personal air

fares allowance per annum and approximately US$46,000 gross accommodation allowance per annum. A company car is also provided to the executive,

together with a fuel allowance. Every four years, the executive director also has the option of purchasing the company car (if any) provided to him by the

Company, for an amount which is equal to 10 per cent. of its original cost price. The executive also receives medical benefits. A gratuity is payable to the

executive director on completion of the fixed term as detailed in paragraph 8.14 of this Part VI. Bonuses may be awarded as detailed in paragraph 8.13 of thisPart VI. The agreement commenced with effect from 1 April 2011 and is terminable by six months notice on either side (provid ed that any such notice given

from the executive to the Company shall not take effect on a date which is earlier than the first anniversary of Admission) and will automatically terminate on

31 March 2013. The executive is entitled to be reimbursed in respect of all expenses reasonably incurred by him in the proper performance of his duties.

25 per cent. of Companys net profit above the annual budgeted figure is to be made available to be shared between the Executive Directors of the Company

subject to maximum pay-out of 50 per cent of such Executive Directors annual basic salary. Any bonuses payable to the Executive Directors will be approved

by the remuneration committee of the Board and will be made by reference to the net profit set out in the audited accounts of the Company for the relevant

financial year. The compensation amount is set aside quarterly but not paid out until the fourth quarter, when the firms full-year results are

known.

The Executive Directors are entitled to a gratuity of an amount equal to 10 per cent. ofthe gross basic salary paid to them over their two year contract lessstatutory deductions for tax. This sum is paid upon completion of their two year fixed term contract. While there is no contr actual right to this sum if the

Executive Director resigns or is summarily dismissed prior to the expiry of that two year period, the Executive Directors service agreements provide that in

exceptional cases, the Company may (in its sole discretion) make a pro rated payment. The payment of the gratuity is recogn ised by Zambian common law as

a payment made in lieu of terminal benefits, such as retirement benefits, which accrue to employees who are on permanent employment contracts. I t is

market practice in Zambia where an employee is on a f ixed term contract for the employer to provide the employee with a payment called a gratuity in lieu

of the fact that the employee will not accrue terminal benefits due to the short term nature of the employment.


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We build value for our investors through the strength of our customers' satisfaction and by consistently producing superior operating results.

armakers need to have a well-organised and managed warehouse with the right amount of inventory in the right place at all timesand ittakes a tremendous amount of thought, analysis, planning and care to create and maintain the optimum facility.

Strategy

The company will continue improving the products it offers, maintaining the standard of reliable sources, quality production and food safety.

The second important feature was for the longer term, and concerns the shareholdings of the partnership. Essentially, the partners shares are not directly part of the listed vehicle buthave been placed into a holding company that is owned 100% by the partners. If partners wish to leave the bank they cannot simply sell their shares on the open market. Partnershave to sell their shares back to the partnership at book value, which will then reassign those shares to existing partners a t book value. Partners cant sell for the sale price of 2.5 timesbook (which probably helped the pricing discipline discussed above). Instead, the partners equity increases in value only by increasing the book value of the firm. Wealth creation forthe partners and the shareholders is therefore di rectly aligned. Thats the carrot.


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But we have kept the exact same spirit of a partnership. It doesnt matter if our stock is trading at 2.5x book, if partners are not performing [and evaluation of performance is at the totaldiscretion of the management committee], partners leave and sell at book. And then new partners can come in and be entrepreneurs and become very wealthy by buying at book. Thisbrings us what I consider to be the best possible alignment of interest. We dont have a date for vesting. We dont have options. And we dont have dilution. Partners can only makemoney by creating high return on equity for the long term. And if we do that we will provide returns for shareholders, so it is a perfect alignment of interest."

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