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CIM Investment Banking: How Do You Create Them?

This CIM creation process is quite difficult for bankers since it consists of a lot of copying work from different sources.

You'll spend through 90% of your "thinking time" on only two segments: the Executive Summary/Investment Highlights initially and the Financial Performance part close to the end.

You transform this data into numerous reports, including a more limited, 5-10 page "Leader Summary" or "Teaser," and afterward a more top to bottom, 50+ page "Classified Information Memorandum."

You may do extra research on the business and the organization's rivals, yet you'll get a lot of this data from your customer only; in case you're working at an enormous bank, you can likewise request that somebody pull up IDC or Gartner reports.

The Executive Summary segment requires some investment and energy since you have to consider how to situate the organization to likely purchasers.

The "Financial Performance” area additionally occupies a great deal of time since you need to make an proper outlook of an organization's budget summaries… without altogether lying.

So it's not as simple as pasting in the organization's recorded budget summaries and afterward making straightforward projections – think "sensible turn."

The Order and Contents of a Confidential Information Memorandum

The structure of a CIM changes by firm and gathering, yet it generally contains these segments:
  • 1. Executive Summary
  • 2. Investment Thesis
  • 3. Overview of the Market
  • 4. Overview of the Target Company
  • 5. Products and Services
  • 6. Revenue Profile
  • 7. Employee Profile
  • 8. Customer Profile
  • 9. Financials – Historical and Projections
  • 10. Management Structure

Under a point-by-point examination of each part -

1 Executive Summary

This is a 1-2-page summary of the whole notice. It contains the following mentioned points:

  • • Key Business Products and Service Offerings of the Company
  • • Budgetary Overview – Revenue, EBITDA Margins, Cash Flow, benefit
  • • The Nature of the Transaction
  • • Investment Rationale
2 Investment Thesis

This part of the CIM contains the venture reasoning in detail – for example why the "target organization" would be an extraordinary fit for the acquirer. Regularly, it might incorporate the accompanying (as Investment models):

The organization acts as a platform for market entry and development

The sort of organizations it has with driving players, giving top tier administrations and the occasion to expand on them for the acquirer

Potential gain opportunity from measure optimization, strategically pitching, cost improvement, mechanization, and so on

Blue-chip customers and longstanding relationship with them

Solid Order Book

Experience of the administration and solid capacities in business extension

Solid position locally with a global traction

Potential for cooperative energies

3 Overview of the Market

It is basic for the acquirer to realize the market size and current market patterns. It is the obligation of the financier to give a review of the market and put forth the organization's defense more grounded. The venture financier readies the market review from tenable information sources, for example, the World Bank, Gartner, IDC, Forrester, Bloomberg, Reuters, and so on Believable sources give dependability to the information focuses and help the acquirer to all the more likely comprehend the market and plan the correct system.

The review of the market contains components like:

Market size

Top parts in different business portions

The pattern of different product offerings

Development patterns on the lookout and the driving components behind them

Planning of the competitors with the "target's positioning"

4 Overview of the Company

It contains fundamental subtleties of the organization, for example,

Year of establishment

Organization description

Business fragments and their capacities

Income, EBITDA and overall gain

Representative subtleties

Clients, customers, and clients

Spot of central command with various office areas

Late news about the organization

5 Products and Services

This segment contains a point-by-point investigation of the items and administrations offered by the organization in its everyday business tasks.

For the item classes, the organization will incorporate elite of the items it offers under different portions, the separating components of the items, the objective section of every item, and so forth

From an assistance point of view, it shows the organization's different help contributions, the capacity of the organization, the start to finish cycle of the administrations it offers, income models, for example, Fixed Price ventures, or those dependent on Time and Material, and so forth

6 Revenue Profile

It shows the income profile of the organization from various angles, which is significant for the acquirer. It shows the income blend as per Geo, Product, Business Segments, and so on by indicating the data thusly, purchasers can see where the significant income originates from and on the off chance that it is lined up with their business technique.

7 Employee Profile

Segregation of the representatives are appeared so the purchaser has a reasonable thought of existing work force blend and can design changes that will assist them with accomplishing cost optimization, or whatever system they intend to execute.

A worker profile can be appeared in a various different ways, including by Function, Qualifications, Geography, Pyramid, and so forth

It's critical to have full profiles on every single key worker.

8 Customer Profile

For any acquirer, it is critical to realize what sort of clients the organization would serve later on. A portion of the famous inquiries the securing organization would be keen on incorporate – will the clients be huge venture clients or an excessive number of little clients, how long of relationship with the clients, income commitment from Top 5 or 10 clients, and so on

9 Financials – Historical and Projections

This is maybe the main area from a valuation point of view, as it gives a nitty gritty examination of the benefit and misfortune account. It contains real monetary data from earlier years, just as budgetary projections by the administration of the objective organization. The suppositions of such projections are additionally composed so the purchaser comprehends the reasoning for such projections. Since the objective organization is setting up the projections, it will attempt to show the organization in an inspirational position and make it alluring to accomplish a higher valuation.

10 Management Structure

A brief profile about key faculty of the organization, featuring their role(s) in the organization, long periods of involvement, past work insight, and so on

This segment is critical, and furthermore one of the most self-evident actuality areas. It commonly incorporates every individual's photo, name, title, and a multi-passage portrayal of what they do, their experience, and their specialty.

An authoritative graph may likewise be helpful in this part to represent the order and announcing structure.


Confidential Information Memorandum 

             For Agriculture  




Executive Summary

Operational Plan

Why Agriculture

Investment Rationale

The Market

Agriculture in Gambia

Gambia Economy


Organisational Structure

Investment Requirement

Financial Summary


Risk Analysis

Risk Management

Appendix A - Operational Road Map

Appendix B - Financial Assumption

Appendix C - Organisational Detail












ABC Co will initially secure and farm 10,000 hectares of identified land in Gambia. The principle crops will be Maize and Rice for which off- take has already been secured if required. The land has been identified, and is available for a nominal lease charge of USD 0.50 per acre on a 49 year renewable land lease with an option for a further 99 year lease. 


AH has the full support of the Gambian Government with whom they have been working closely to realise their vision of agriculture being the vehicle to alleviating poverty, reducing imports and achieving critical fiscal growth. 


While the investment objective of the company is to achieve attractive levels of risk adjusted returns from the crop yields, AH also intends to take advantage of the capital appreciation available from leasing the land at a nominal low value and increasing the value by utilizing Western style farming methods. 


From our past experience, positive soil tests, and plans to establish irrigation systems, AH will be able to plant and harvest irrigated hectares twice annually. The most advanced precision farming techniques along with the best fertilisers and chemicals will be used to maximise the crop yield per hectare. 




ABC Co includes experts from Global Farming Solutions Ltd, (GFS), a company with experience of implementing ground up large scale farm operations in four continents, with relevant experience in West Africa gained from projects in Ghana, Mali and Burkina Faso. 


GFS have extensive experience of the growing the following crops: Maize, Soybeans, Sunflowers, Cotton, Rice, Wheat, Oats, Rape, Canola, Papaya, Peanuts, Coffee, Tobacco, Coffee, Zucchini, Spinach, Sweet Potatoes, and Eucalyptus 



Having established the 10,000 Ha operation, AH plans to expand the operation to 100,000 total hectares for active agriculture production consisting of various forms of production crops, horticulture, secondary agro-processing facilities for food preservation and vertical integration, pastures for development of the short-cycle livestock chain, and the development of agro-forestry. This also includes 10% of the land being allocated to a small farmer program of direct participation from community farmers. 






 AH plans to phase the land leasing/ farming of land over a 10 year period. This will be executed while parallel operations are taking place to ensure that existing land is farmed properly and additional hectares are being cleared and prepared. As indicated in the chart below, this roll out will begin slowly, to make sure a proper foundation is established and that the infrastructure required is in place. Then, accelerated, yet controlled growth will start during the beginning of year 3 until all hectares are effectively in production by 2022. 100,000 HA will be in production based on the following rollout: 

Year 1: AH will open 5,000 HA of land at the onset of 2012. AH’s goals will be to plant 3,500 HA of this land for maize production during the rainy season and set up early infrastructure. The land will not have the ability for double cropping in year one as there will not be adequate time to implement irrigation systems. Additionally 500 HA of the land will be prepared for the Small Farmer Program. 

Year 2: AH will open up an additional 5,500 HA of land to be used for maize and rice production. 5,000 HA of this land will have center pivot irrigation systems and be planted for rice, the other 3,500 HA will be planted for maize. This will allow us to begin the cycle of double cropping rice and provide a total of 13,500 HA in production. Additionally 500 HA of land will be cleared and prepared for the Small Farmer Program. 

Years 3-10: AH will begin to develop the remaining hectares, consistently for the next 8 years. AH’s method takes into consideration economies of scale and maximizing effective equipment capacity. AH has determined to repeat this method every year going forward until all of the land is in production in 2022. 

AH will continuously roll-out approximately 11,000 HA of land per annum, to be put into a form of production for the subsequent 8 years. Not all of the 11,000 HA per annum will be put into broad-scale commercial farming each year, with a total of 10,000 HA being allocated to the localized small farmer program over the 10 year program. 


LAND AREA I N PRODUCTION 2012    2013201420152016201720182019202020212022 TOTAL 
Crop Land Cle ared 5000 5000 10000 10000 10000 10000 10000 10000 10000 10000 10000 100000 
Cropping Are a Breakdown             
Broadacre Farming 2500 5000 7500 7500 7500 7500 7500 7500 7500 7500  67500 
Renewable Agro Forestry   1000 1000 1000 1000 1000 1000 1000 1000 1000 9000 
Horticulture   1000 1000 1000 1000 1000 1000 1000 1000 1000 9000 
Pasture for Livestock   500 500 500 500 500 500 500 500 500 4500 
Small Farmer Program 500 500 1000 1000 1000 1000 1000 1000 1000 1000 1000 10000 
Annual Total  3000 5500 11000 11000 11000 11000 11000 11000 11000 11000 3500 100000 
Irrigated Production 500050005000500050005000500050005000 132500 

 Years 3-10 to be divided as follows: 


7,500 HA/yr for broad hectare commercial farming to include rotational production crops such as corn, rice, sunflower, wheat, and millet. In total, 67% of this broad hectare commercial farming will have irrigation infrastructure to support it. 

1000 HA/yr for Horticulture (tomatoes, onions, etc) and more permanent crops such as mangos, pecans, oranges and other viable crops to complement the Gambian needs and to create opportunities for internal supply for value-added integration in the future. 

1000 HA/yr for short term renewable agro-forestry  projects. Eucalyptus trees will be the primary focus which will be used for energy and wood production. Eucalyptus trees are extremely fast growing and yield more effective metric tons of wood per year when compared to other trees during the same time period. 


1000 HA/yr of cleared land will be set aside for local Gambian farmers. The locals, coupled with AH expertise, will use this land to produce crops such as rice, corn, sunflowers, peanuts, etc. AH will provide inputs for these farmers and help in production practices and training to encourage better local farming. At harvest time, AH will purchase the production from these farmers, insuring them an increase in annual revenue. 

500 HA/yr for pasture to help create the short cycle livestock chain. The focus will be on cattle, chickens, and sheep. 

Year 10 will be leveraged to finalize the growth of our project consisting of 100,000 HA. The final 3,500 hectares will be distributed to projects involving horticulture, renewable agro-forestry, livestock development and to our small farmer project. 


The infrastructure will be constructed and implemented so that AH is adequately prepared for scale up. Development will occur more heavily in the first part of the project. The following points highlight major infrastructure developments: 

Central Headquarters: A multi-purpose building to accommodate Living Quarters for Management, AHFF Main Office, Small Farmer Program Training  Facility, Small Farmer Program Support Staff Office, etc. Ground breaking will occur upon approval of the project. 

Multi-Room Warehouse: This warehouse will be leveraged for equipment storage & maintenance as well as housing production inputs. In addition to storage, it will also serve as a corn/rice bagging facility for distribution to local markets. 

Grain Drying and Grain Storage Bins: The Gambian climate is sub-tropical, which is beneficial for growing crops, yet challenging for drying and storing them post harvest. In order to ensure that the grain will be preserved and appropriately distributed to the proper buying markets, drying and storage bins are necessary. 

This is a priority for AH. The grain drying and storage set-up will be rolled out to accommodate grain. The bins and drying facility will be scaled up to adequately support the hectares at the time of harvest and will be operating at full capacity. 

Transportation & Logistics 

AH in co-operation with Fidelity Group will establish a river based transportation system (river barges / specialist vessels and loading terminals / platforms) for transfer of all equipment, inputs and crops to and from strategic drop points and Banjul Port 





 The financial crisis of the last two years has seen many investors lose out. The financial markets have not been reacting as they should and companies from start- ups to established enterprises have seen their share prices suffer. Now is the perfect time to consider investments which go ‘back to basics’. The increase in the global production of bio-diesel has lead to a significant decline in the output of consumable crops. With the global population anticipated to reach 9 billion over the next 40 years, the demand, and therefore the price, for basic crops consumed on a daily basis is set to increase. This opens up a significant opportunity to profit from a green and sustainable investment with potential annual returns of up to 30%. 



The combination of strong market prices for soft commodities, the abundance of rich soil and the low cost of labour, ensures that farming in Gambia can be far more profitable than anywhere else in the world. AH expects to leverage this opportunity to obtain a high return on investment and commit to high annual dividend returns to investors. 





Investment Forecast 

AH believes that the agricultural market has the potential for substantial growth and solid profits. The promoters conservative estimate on return on Investments is between 21.0 – 25.0% per annum. 


Our business model incorporates a proactive program leveraging local labour coupled with highly experienced leaders in agriculture, combined with cutting edge Western agro- technology, in order to create the most financially attractive and sustainable performance for the investors. 

AH will start the project on a relatively small scale (compared to the total hectarage AH will manage), and scale up aggressively after the first harvest, thus further mitigating investors initial risk and allowing the company to partially organically grow. 






 This investment opportunity combines exposure to agricultural commodities, produce and food prices with diversified land and farm asset backing. 

When hugely increasing populations and a tighter global food supply combines with climate change and an increased demand for farm land, investing in agriculture becomes an enticing and ethical proposition. 

Key investors (especially hedge funds) have advocated agriculture as part of a diversified portfolio for years. That approach has gathered momentum recently as demand for food threatens to outstrip supply and as continued risk infiltrates the stock markets of the world. 

This opportunity is generating a lot of press coverage due to the steady rise of soft commodity prices, and the increasing investment from the Middle East and China into agricultural projects in order to gain food security. What some people forget is that agriculture has been a successful but little known investment allocation for decades. 

Past performance figures of similar projects show audited returns of 50% to investors after 2 ½ years and 59% over 3 years. 

This investment opportunity represents one of the very few opportunities internationally that gives you a twofold potential return;- 

  • The yields from the land and its produce 
  • Asset Appreciation of farm land 

If the underlying asset is in an area that is affected by historical lack of investment like Gambia, then the opportunity to acquire it at a distressed price mitigates the investors initial risk greatly. For sovereign wealth funds that are looking for food security, investing into a private project with guarantees of off-take can be a food security strategy that does not have the political implications that government to government deals have. Rather than feeding views of neo-colonialism, countries can secure commodity supply, benefit from the investment, and be seen to invest into the country rather than taking from it. 

There is low correlation with traditional asset classes such as stock markets, real estate and bonds. Combining direct exposure to agricultural commodities and farm land assets with an already well diversified investment portfolio provides the potential to deliver enhanced investment returns, reduced investment risk, or some combination of both enhanced return and reduced risk. In other words, adding this opportunity to an investment portfolio has the potential to deliver more efficient risk adjusted investment returns 







In the short term, where there is greater demand than supply, this can be satisfied by drawing from stock reserves. However, if demand in the long term exceeds supply, production must increase or prices would rise until demand meets supply. 

The agricultural markets are gradually growing more integrated and a change in demand is thus driven by global demand changes. Currently, there are three major factors contributing to the overall increase in demand for grain and energy crops:-


Human Food Consumption: 

It is mainly the world population and changes in food preferences that affects human food consumption. Population growth has historically accounted for approximately 70% of the increases in the food production and consumption. It is predicted that the world population will rise on average by 1.1% over the next 10 years. The main population growth originates from China and India. Changing food preferences generally imply an increasing demand for animal products, fruit and vegetables. 


Animal Feed Consumption: 

The demand for feed is primarily driven by the consumption of meat. The sustained economic growth in certain developing and transition economies has resulted in growth in disposal incomes, allowing people to change their eating preferences from staple foods towards a mix of more expensive, higher value-added products. Meat consumption, which is highly correlated with economic development, has risen substantially in Asian countries, primarily in India and China. This development has a positive effect on the demand for grain since it takes between seven and thirteen kilograms of grain to produce a single kilogram of meat. There has been a significant price difference in the past between crops used as food and crops used for feeding animals due to difference in quality. However, as a result of an increasing demand for feed during the last two years the price difference has been reduced. 


Renewal Energy: 

An increasing demand for renewal energy, of which bio energy is one of the main sources, has been evident lately. This development is fueled by the government policies and subsides for, among other things, bio fuel usage which has conveyed an increasing demand for energy crops such as maize and canola. The Biofuel market is currently driven by environmental issues such as vehicle emissions and also energy security concerns. EU and US biodiesel and bioethanol mandates are leading to a strong increase in the demand for applicable bio-source alternatives. In the EU, where approximately 51% of all vehicles run on diesel, the focus is on bio diesel, and sunflower and canola are the feed stock of choice, owing to the fact that they are the only feed stock which meets or exceeds the EUs quality standards. With the EU having mandated the 5.7% bio diesel incorporation rate in all diesel fuel by 2010, and a 10% rate by 2020, it is estimated that the actual feed stock required to meet this target will be over 35 million tonnes, equal to production of around 11.9 million hectares of land – 8.5 times as much land as is used to produce canola and sunflower for bio diesel in the EU in 2005. 

Almost every expert will agree that the demand for food will increase. The only argument is by how much. It is very difficult to predict how much food will be consumed in the next half century. According to Norman Borlaug, writing in the Wall Street Journal, “Consider that  current agricultural productivity took 10,000 years to attain the production of roughly six billion gross tons of food per year. Today, nearly seven billion people consume that stockpile almost in its entirety every year. Factor in growing prosperity and nearly three billion new mouths by 2050, and you quickly see how the crudest calculations suggest that within the next four decades the world’s farmers will have to double production. 







The main cash crop of The Gambia is groundnuts. The country is primarily a agricultural country with 80% of the population depending on agriculture for its food and cash income.  The  farming economy is the only means of income creation     for     the      majority      of   rural families most whom live below the poverty line. 


The agricultural sector is the most important sector of the Gambian economy, contributing 32% of the gross domestic product, providing employment for 80% of the population, and accounting for 70% of the country's foreign exchange earnings. It remains the prime sector     to     raise     income      levels,   for investments, to improve food security and reduce levels of poverty. 

About 54% of the land area in The Gambia is good quality arable land (5,500 square kilometres), out of which about 39% (1,880 sq. km) is currently farmed by the 41,000 subsistence farmers in The Gambia. About 810 sq. km. (81,000 hectares) are irrigable, all in the (CRD) Central River Division (56%) and (URD) Upper River Division (44%). About 2,300 hectares of this potential area, are currently under irrigation. Crop production is quite diversified. Cash crops are grown in the up-land areas and rice in lowland, riverine areas (rain-fed swamps or under irrigation) for both subsistence and Cash. Other principal subsistence cereal crops grown are maize, sorghum and millet. When the sector is looked at by gender 51% are women. 


The climate is largely semi-arid with one wet season followed by a seven month dry season. 

The rainy season commences from June and continues to October. Average daily temperatures are 28.2° C in the dry season and 28° C in the rainy season. Low levels of soil moisture prevailing in September and October, can adversely affect crop harvests. 

Agro-ecological zones 

Based on the rainfall pattern, there are 3 major agro-ecological zones in Gambia namely Sahelian, Sudan-Sahelian and Sudan-Guinean zones. The Sahelian Zone has a Sahelian micro-climate with open dry season savannah vegetation. Rainfall is unpredictable and less than 600-mm total annually, with an effective crop-growing season of less than 79 days. Soils have low water retention capacity and this is a high- risk area for long-duration crops. Thus early maturing, short-duration and drought tolerant crops are cultivated in this zone. Cassava, sesame and cowpea are the main produce with millet grown only occasionally because of the risk that birds would consume their crop. 

The Sudan-Sahelian Zone lies within the 600 to 900 millimeter rainfall area. With a longer growing season, 79 to 119 days, the up-land areas are well suited to groundnut, cotton and sorghum. The flood plains along The Gambia River and associated lowland valley systems are an excellent rice growing catchment under tidal swamp irrigation. 

The Sudan- Guinean Zone lies within the  900 to 1200 mm rainfall isohyets. The growing season is 120-150 days and in normal seasons full crop water requirements are met throughout the growing season. In some lowland areas the long dry season results   in    increased    salinisation    of The Gambia River and an emphasis on saline tolerant rice varieties. The principal crops cultivated in this agro-ecology are early millet, groundnut, rice (rain-fed upland and lowland, irrigated lowland, mangrove and mangrove salt-tolerant), maize, vegetable, sesame and cowpea. 




 The Gambian economy grew by 5.5 percent in 2010 reflecting strong growth of agriculture and industry by 14.4 percent and 12.3 percent respectively. The robust growth is expected to be sustained in 2011. 



End-period inflation, measured by the National Consumer Price Index (NCPI), was 5.8 percent in December 2010, higher than the 2.7 percent in December 2009. The annual average inflation rate was 5.0 percent relative to 4.6 percent in 2009. 

Food inflation increased significantly from 

2.9 percent in December 2009 to 8.3 percent in December 2010. In contrast, non-food inflation decelerated to 1.9 percent compared to 2.8 percent in December 2009. 

Core inflation, which excludes the prices of energy, utilities and volatile food items, increased from 2.8 percent in December 2009 to 5.7 percent in December 2010. 

Outlook for Inflation 


The recent moderation in headline inflation is consistent with the deceleration in the monetary aggregates and the stability of the Dalasi. In the near-term, inflation is forecast to remain in single digit. However, there are risks to the outlook emanating mainly from cost-push factors such as rising food and energy prices. 

Deposit liabilities rose to D11.3 billion (39.8 percent of GDP) in 2010 compared to D9.48 billion (36.7 percent of GDP) in 2009. The average capital adequacy ratio increased to 46.3 percent, higher than the 

Taking the above factors into consideration including the inflation outlook, the MPC has decided to leave the policy rate unchanged at 15 percent. 

Growth in the monetary aggregates decelerated in the year to end-December 2010. Money supply grew by 13.7 percent, lower than the growth rate of 19.4 per cent in the previous year. Quasi money increased by 19.3 percent and narrow money by 7.5 percent. Reserve money, the Bank’s operating target, grew by 10.5 percent, slightly higher than the 9.3 percent a year ago. The banking industry is fundamentally sound. The industry recorded growth in assets, deposits, capital and profits in 2010. Total assets of the industry increased to D17.8 billion, or 22.7 percent from 2009. Return on assets was 

1.5 percent compared to negative 2.0 percent in the previous year. 

Loans and advances, accounting for 29.8 percent of total assets, increased to D5.3 billion, or 8.6 percent. Credit to distributive trade increased by 29.3 percent, agriculture (5.7 percent), construction (9.6 percent), fishing (0.4 percent), tourism (4.0 percent) and other commercial loans (24.4 percent). 

The ratio of impaired advances to gross loans and advances declined modestly to 

14.0 percent in December 2010, lower than the 16.2 per cent in September 2010. 

The domestic foreign exchange market remains vibrant. The volume of transactions, measured by aggregate sales and purchases, increased to US$1.65 billion in the year to end-December 2010 compared to US$1.49 billion a year earlier. 

In nominal effective exchange rate terms, 33.2 percent in 2009 and over and above the minimum requirement of 8.0 percent. Preliminary budget estimates indicate that revenue and grants totalled D4.3 billion (15.2 percent of GDP) in 2010, lower than the D4.9 billion (19.0 percent of GDP) in 2009, but was 21.2 percent below the budget estimate. Total expenditure and net lending, on the other hand, is estimated at D5.1 billion (18.1 percent of GDP) compared to D6.0 billion (23.2 percent of GDP) in 2009. The overall budget balance (including grants) on commitment basis was a deficit of D834.6 million (2.9 percent of GDP), lower than the D1.1 billion (4.1 percent of GDP) in 2009. 

Preliminary balance of payments (BOP) gave an overall surplus of US$77.0 million compared to the deficit of US$32.7 million in 2009. Exports and imports decreased to US$117.2 million and US$173.1 million, or 

percent and 12.2 percent respectively. 

The current account surplus, including official transfers, increased to US$42.2 million, slightly higher than the surplus of US$41.9 million in the corresponding period in 2009. Similarly, the capital and financial account was in a surplus of US$34.8 million compared to a deficit of US$74.7 million in the corresponding period in 2009. 

As at end-December 2010, gross international reserves amounted to US$163.5 million, equivalent to 5.1 months of import cover. 

.the Dalasi depreciated by 5.7 percent against a basket of currencies. Against individual currencies, the Dalasi weakened by 5.3 percent and 1.3 percent against the US Dollar and British Pound respectively but appreciated against the Euro by 4.7 percent. The domestic debt increased to D8.7 billion (40.8 percent of GDP) in 2010, or 18.9 percent from 2009. Treasury bills, accounting for 67.9 percent of domestic debt, increased to D5.9 billion, or 13.9 percent. 

The yield of the 91-day, 182-day and 364- day bills declined to 10.01 percent, 10.6 percent and 13.18 percent in December 2010 compared to 10.98 percent, 12.91 percent and 14.30 percent respectively in December 2009. 

Data on the maturity structure indicate that the 364 day bills accounted for 64 percent of the outstanding Treasury bills, 182-day bills (17.1 percent) and 91-day bills (18.9 percent). 

According to the readings of the latest Business Sentiment Survey, majority of the respondents indicated that economic and business activity were higher in the fourth quarter compared to the third quarter of 2010, but inflation is expected to accelerate in the first quarter of 2011 reflecting in large part rising energy and food prices. 





Justin Bruch - Operations Director 

Justin is a native of Iowa, where he grew up on a family farm. He spent seven years working in the Animal Health Industry in California for Novartis as a manager working with large dairy and farming operations. During this time he was involved in farming operations in both Iowa and Brazil. 

In 2008 Justin moved to the Ukraine to set up the precursor of GFS, a farm management business and operations management for a farm that was owned by Morgan Stanley Commodities. Starting in 2009 Justin assumed farm management responsibility for 7500 ha which at the time was managed by an international controller that works in the Ukraine full time. 

Justin holds a Bachelors Degree in Agronomy from Iowa State University and Masters Degree in Business Administration from California State University. 

Gary Crates - Director: 

Gary has accrued a broad range of senior executive experience over the past 20 years in managing large multi-national operations. Formerly a Country Manager employing over 500 staff, before moving to Regional Commercial Director for 23 countries, in a €150m business with over 2000 staff. He is a specialist in Middle East 

/African business having operated in the regions for the last 17 years. 

Tyler Bruch - Operations Director 


Tyler started Bruchside Farms International in March 2003, now incorporated as Bruchside Agropecaurio do Brasil. In 2005, Tyler co-founded Global Ag Investments LLC, an investment company that works with U.S. private investors and Institutional investors for the purpose of investments abroad. Bruch also Co-founded Global Ag Investments Ukraine LLC in 2008 and is active in strategic growth decisions. 

Tyler has a degree in Agriculture Studies from Iowa State University with an emphasis in economics. He has also studied International Agriculture in Canada, Italy, Panama and Brazil. 

Tyler has been actively involved in agriculture for many years, having grown up in a farming family in Iowa. He has co- managed crop production and labour for Bruchside Farms, Inc. in Iowa for four years prior to moving to Brazil. Tyler has over 8 years of management farming experience already in Brazil and is fluent in Portuguese. 

He is a frequent presenter on Brazilian agriculture to universities and continuing education groups all over the Mid-West. He is also a contributing editor to Corn and Soybean Digest Magazine and speaks annually at the Commodity Classic. Tyler was selected by CNBC Business News for a documentary on international business in 2008; this documentary won a business Emmy for CNBC. Princeton Premier selected Tyler into the 2008-2009 Young Business Leaders of the Country class, and he was featured by his alma mater, Iowa State University, as one of the Top Alumni for Success. 









The Board of Directors will use their experience to guide the company strategically to reach its growth and profitability targets. Justin & Tyler Bruch, both who have extensive experience of operating and developing farms will look after the day to day operations of the project and ensure that these targets are met. A full breakdown of the organisational structure and its functions can be found in Appendix C. 






The company requires debt finance of USD 20.3 Million. The financial forecasts are for phase 1 10,000 Hectares only. 

Since there will be more than adequate cash flow to cover the debt service, AH would be willing to commit to a loan term of five years with a grace period of one year. The debt facility can be structured to be secured against Buildings, Machinery and Account Receivables. It is the company’s intention to secure political risk insurance from a major provider like Coface or Zurich. In addition to the above, other financial and non?financial covenants can also be put in place to support the facility amongst which are key financial ratio covenants as well as maintenance of existing shareholder structure and key management members. 

With an average debt service coverage ratio of 3.1:1 there is a sufficient margin of cover should any unforeseen circumstances affect the profitability of the project. 



Given the strategic importance of the sector to countries in need of securing food supplies, the following exit options are proposed following the 6 year business plan 

sale to a) Strategic Investor, b) Agri or Pension Funds c) Sovereign Wealth Fund or 

an IPO to further expand the business upon mutual agreement with investor / shareholder and management company .









 2015 2016 2017 2018 2019 













Rice  $5,250,000 $10,750,000 $12,000,000 $13,500,000 
Input Reimbursment from Social Program $250,000 $250,000 $500,000 $500,000 $500,000 


Total revenues $6,550,000   $13,600,000   $25,950,000$27,200,000$30,800,000 




19 Fertilizer $1,852,550 $3,689,800 $5,947,300 $5,947,300 $5,947,300 
20 Chemicals $525,000 $1,270,000 $2,070,000 $2,070,000 $2,070,000 
21 Seeds $574,000 $1,088,000 $1,338,000 $1,748,000 $1,748,000 
22 Fuel $420,000 $1,310,000 $2,160,000 $2,460,000 $2,460,000 
33 Other Operating Cost $3,503,070 $1,098,765 $1,132,980 $996,480 $996,480 
 Total variable costs $6,874,620 $8,456,565 $12,648,280 $13,221,780 $13,221,780 



Gross margin -$324,620$5,143,435   $13,301,720$13,978,220$17,578,220 


36 Management $300,000 $300,000 $300,000 $300,000 $300,000 
49 Other $833,128 $1,326,880 $1,537,220 $1,537,220 $1,537,220 
 Total fixed costs $1,133,128 $1,626,880 $1,837,220 $1,837,220 $1,837,220 



EBITDA -$1,457,748$3,516,555   $11,464,500$12,141,000$15,741,000 


Interest $0 $0 $0 $0 $0 
Depreciation $1,173,200 $2,329,928 $2,830,133 $3,030,073 $3,116,053 
Amortization $0 $0 $0 $0 $0 
Earnings Before Tax -$2,630,948 $1,186,627 $8,634,367 $9,110,927 $12,624,947 
Tax $0 $0 $0 $0 $0 
EARNINGS AFTER TAX -$2,630,948$1,186,627$8,634,367$9,110,927$12,624,947 
Retained Earnings / losses  -2,630,948 -1,444,321 7,190,045 16,300,972 28,925,919 








 2015 2016 2017 2018 2019 
Current assets      
Cash 710,730 1,590,524 6,894,770 13,912,678 23,779,564 
Accounts Receivable 6,550,000 10,975,000 20,325,000 20,950,000 23,800,000 
Total Current Assets 7,260,730 12,565,524 27,219,770 34,862,678 47,579,564 


Fixed assets 

Machinery and Vehicles 5,067,107 7,928,709 9,798,226 11,678,730 12,775,489 
Infrastructure and Buildings 3,619,429 7,645,957 10,684,531 11,828,141 13,040,620 
Land - Book value 
Less Depreciation (1,173,200) (3,503,128) (6,333,262) (9,363,335) (12,479,388) 
Total fixed assets 7,513,336 12,071,537 14,149,495 14,143,536 13,336,721 
Goodwill and other assets - 
Total Assets 14,774,066 24,637,061 41,369,265 49,006,214 60,916,285 


Liabilities and Owner's Equity 

Accounts Payable 12,058,086 12,734,454 13,832,292 12,358,314 11,643,438 
Current and Long-term Debt 
Total Liabilities 12,058,086 12,734,454 13,832,292 12,358,314 11,643,438 
Total Net Assets 2,715,980 11,902,607 27,536,973 36,647,900 49,272,847 


Owner's Equity 

Retained Earnings (2,630,948) (1,444,321) 7,190,045 16,300,972 28,925,919 
Equity 5,346,928 13,346,928 20,346,928 20,346,928 20,346,928 
Net Owner's Equity 2,715,980 11,902,607 27,536,973 36,647,900 49,272,847 












The financial forecasts are for phase 1 - 10,000 Hectares only. The company will benefit from revenue from the 13th Month. 

The company is projected to have losses of USD 2.6 Million in year one rising to earnings of USD 12.6 Million by year five. 

Payback of the debt facility shall occur in year 6 of the project. 

Average Debt Service Coverage Ratio will be 3.1:1, which is above the standard minimum ratio of 1.75:1 normally required by financial institutions. 




Sales prices per tonne were taken from the IMF collated 2010 figures and discounted by management by up to 20% to reflect a more prudent position. 

Sales price of the commodities will rise on average 2% per annum. AH will be able to achieve the yields per hectare specified. 

The crop will not be affected by disease or pestilence. 



Price of land per hectare has been shown at USD 0.50 and will not rise before project commencement. 

An inflation rate of 2% was applied for all expenditure. 





 Apart from these specific incentive packages, others can be negotiated with the Agency depending on the strategic nature of the investment. The award of incentives does not differentiate between domestic and foreign investors and all investors are treated equally. 

Free Zones Licence 

As a strategy for developing the export potential of the country, GIPFZA is also developing Free Zones in specially selected locations to enable investors to operate in an environment that has the ideal set of infrastructure and special tax incentive regimes (relevant to any vertical segment opportunities, drying /silo storage / processing / canning, etc). 



a) Transactions in the Free Zones shall be denominated in foreign exchange; Investment in the zones should be sufficiently viable both commercially and financially; Sufficient generation of domestic value added to quality finished product for conferment of origin status; b) Employment generation and training of nationals; 

Ability to export a substantial portion (70%) of output in foreign markets; 

Positive contribution to the formation of domestic productive capital; 

Special attention and encouragement shall be extended to the establishment of single factory or stand-alone free zones outside the Greater Banjul Area. 

Exemption from all taxes and custom duties payable on all imports provided that the imports are used or to be used exclusively within the zone, and subject to any other limitations specified by the regulations made pursuant to the Act; 

Where import duty or sales tax has been paid by a zone investor in respect of any goods on their importation into the customs territory, no refund shall be allowed merely because the goods are to be later transferred into any of the free zones; 

Exemption of customs duty, excise duty and sales tax on goods produced within or imported into any of the zones, unless the goods are entered for consumption into the national customs territory; 

Exemption of import duty on capital equipment; 

Full exemption of corporate tax or income tax for the first 10 years from the date of approval of license in the case of trading activities in the zones, thereafter tax shall be pegged at a rate not exceeding six per cent per annum; 

For activities related to tourism corporate tax or income tax shall be charged at the rate of ten per cent for the first 20 years, and shall revert to the normal rate thereafter; 

Full withholding of corporate or income tax on dividend and other payments during the period of tax holiday; 

Full relieve from payment of municipal taxes; 

Incentives Package 

Licence holders shall have the following incentives extended to them:- 

Special Investment Certificate 

For the purpose of investing in the domestic economy, the Government has identified a number of sectors as priority areas, and investing in these sectors will give access to attractive and special investment incentive. These sectors include:- 

Priority Sectors: 

Agriculture , Forestry & Fisheries 

Manufacturing Skills Development 

Communication Energy Mineral Exploitation 

Services (Financial, off-shore banking, Health and Veterinary services, river and transportation, 

information technology). 


Eligibility: Special Investment Status shall be conferred to investments, which fulfil the following eligibility criteria: The establishment of a company or partnership under the laws of The Gambia; Investment in fixed assets of at least ONE HUNDRED THOUSAND United States Dollars or its equivalent at the time of application for the incentives; 

Investment must be outside the Free Zones and in one of the priority sectors listed above. 

Benefits for Special Investment Certificate Holders: 

Investors upon whom “special investment” status has been conferred shall be 

Zone investors shall also be exempted from pay roll tax or other restrictions or prohibitions on import or export trade with the exception of trade in firearms, military or other illegal goods. 

on dividends; 


Exemption from customs duties on the following items:- 

The approved capital equipment, machinery, appliances, furniture and fittings imported to be used by the project or business; 

The approved quantity of semi-finished products, spare parts, raw materials and other supplies to be used in the production process; 

Exemption from the sales tax on the items mentioned in paragraph (b); 

Exemption from the turnover tax; 


Preferential treatment for land allocation for the site of the proposed investment and the provision of infra-structural facilities; 

Special and attractive scheme of accelerated depreciation as set out in the Second Schedule to the Investment Promotion Act.

Labour Regulations 

This section outlines some of the key legislation regarding the employment of workers in The Gambia including the procedures required for the employment of foreigners. It also outlines details of the mandatory National Provident and Pensions Fund and some indicative labour costs. 

Labour Legislation: 

The legal framework of labour relations consists of the Labour Act, 1990, and of regulations issued there under. The Act covers the general conditions of employment including dismissal as well as recruitment .


training, protection of wages, registration of trade unions and employers' organizations, industrial relations, and procedures for the settlement of labour disputes. 

The cost of labour in The Gambia is relatively cheap. The amount of wages paid to employees is determined principally on the basis of a minimum wage structure fixed by the joint industrial councils (JICs) or through the process of collective bargaining involving the worker and the employer in consultation with the Government. The workforce is generally regarded as friendly, hardworking and disciplined. 

The Gambia has a liberal policy concerning the employment of foreigners for managerial and technical assignments. Depending on the requirements of the Company, as judged by an allocation committee, the company is allotted an expatriate quota for specific posts for a stipulated period. 

A residence permit should be obtained, usually after the arrival in The Gambia of the person (s) concerned. The entry permit covers the immediate members of the expatriate’s family. However, they are not permitted to undertake any employment without prior permission 

Risk Management & Dispute Resolution 

Both local and foreign investors are protected by the laws of the country and where an offence is committed, due legal procedure is applied and investors can have unimpeded access to local and international arbitration. 

The Gambia is also a member of the International Centre for the Settlement of Investment Disputes (ICSID) and the and hiring of labour, registration and 


Multilateral Investment Guarantee Agency (MIGA) of the World Bank Group. The Constitution of The Gambia, guarantees and safeguards against nationalization and expropriation of investments. The Investment Promotion Act and Free Zones 

Investment Laws & Regulations 

The Gambia Investment Promotion Act 2001 and Free Zones Act 2001 are the main laws governing investment in The Gambia. These Acts provide guidance on investing in The Gambia 

and clearly indicate the priority sectors for the country, guarantees to investors, investment incentives eligibility criteria, procedures, the institutional framework and answers to questions that investors usually consider in making an investment decision. 

Investment Promotion Act Free Zones Act 2001 Environment Act 1994 Income Tax Act 2004 

Business Registration Act 2004 

National Environment Management Act(NEMA)1994, Hazardous Chemicals and Pesticide Control and Management Act 1994, EIA Guidelines, Environment Quality Standards Approved Income and Sales Tax Act 2004 





 General Risk Factors 


Investment into any company involves certain risks. While the promoters believe that the assumptions underlying the companys projections as to the company’s future earnings are reasonable, there is no assurance that such earnings or the projected IRR will be realized. All investments carry risk, therefore potential investors should take the following risks into consideration: 

The projected return for the investment is dependent on future sales levels and contract negotiations. The assumption is that they will progressively rise over a five year period. However, it cannot be predicted with any certainty what the prevailing market conditions will be like during the period of the project, therefore if the sales values do not rise as expected the IRR could be less than expected. 

The projections contained in this Information Memorandum are based on a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies. No independent accountants have expressed an opinion or any other form of assurance on these projections. 

Projections are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projects are based will not materialize or will vary significantly from actual results, and such variances will likely increase with time. 

Accordingly, actual results during the periods covered will vary from the financial projections, and these variations may be material and adverse. 

It is expected that the investment in the project will not be realized for approximately five years. 

Whilst it is hoped that the returns projected will be realized, other factors such as the global financial crisis, the increasingly competitive business environment, the condition of the public equity markets and the availability of potential investors, may shorten or lengthen the investment term. Investors may be exposed to current exchange rate movements because the Company may be making and realizing investments denominated in more than one currency. Certain Investors will be exposed to currency exchange rate fluctuations because the Interest will be accounted for in Euros (i.e. all draw downs and distributions will be made in Euros). 

Risk Factors Specific to Agriculture 

Productivity of the project is contingent in some part to the standard of the soil being tilled. Yields and thus revenue can be affected substantially by the soil quality of an agricultural project. 

The investment is subject to the risk of flooding, drought, disease or pestilence. Either of these factors could have a negative influence on the rate of return to the investor. 

Risk Factors Specific to Gambia 


AH’s business plan is based on current Gambian government policy. Changes in respect of legislation concerning agriculture could have a negative effect on profits. 






 AH understands fully the risks involved in both agriculture and in undertaking business in Gambia and has taken great lengths to mitigate these risks to the fullest extent possible. The company was strategically planned in order to lower the risk exposure for an investor. The directors have years of experience internationally in agriculture, transport and trading and will be able to use their experience to lower the inherent risks on the agriculture side as well as any perceived risk profile in operating in the Gambian market. 

To this end, AH have identified the need for a permanent Chief Risk Officer who will be responsible for risk management on a micro and macro level as well as implementing business continuity plans. The risk management process policy has already been drawn up. 

Extensive planning has been undertaken in the pre project commencement stage to lower the risk profile from the very start: 


Crop Failure 

AH, in conjunction with the Ministry of Agriculture has identified the most suitable land for its strategic aims. The soil analysis has shown that it is prime fertile soil suitable for arable crops. Irrigation which is imperative to any project is available in abundance. AH will use the most up to date western techniques that have been proven to reduce the possibility of crop failure and enhance yields per hectare. As the final measure of protection full crop insurance will be taken by the company. 

Flooding, Pestilence and Disease 

A sizable portion of the use of proceeds ofinvestment has been allocated for pesticides in order to prevent the spread of disease and pestilence. 


Political Risk 

AH has been working and will work in the future with the Ministry of Agriculture. It is common knowledge that the government is trying to promote agriculture to foreign companies and governments and have made steps to make this an easier process including help with investment and various tax incentives which were stated in the legislation section. 

Whereas the promoter cannot guarantee that these benefits and agreements will not be amended or withdrawn in the future, it is thought to be an unlikely occurrence as it would be damaging to an industry that is paramount to Gambia's economic future. 


Price Reduction Risk 

Whilst no company has full control of the price of commodities, AH is confident that they are operating in a market that is currently importing >80% of rice,  maize and other key crops, and the Gambia is geographically located next to a region where these crops are always required (West Africa and Europe). Further,  the identified global supply/demand ratio means that for the foreseeable long term future, crop prices will not be reduced. Thirdly, it has been the promoters of AH’s historical policy to diversify off takers in order to not be at the mercy of one price taker. It is also the company’s intention to implement full vertical integration, using their previous experience to become processors of their own crop and at a later stage to manage the logistics of the full supply chain. 


 Repatriation of Funds Risk 

There are no restrictions or problems in transferring hard currency payments in and out of Gambia. Other businesses with FDI support and backers have been doing this with no difficulty for the last decade. However investor confidence can be maintained by means of account management via a Western Bank affiliated to a Gambian bank (e.g., Societe Generale). 


Operational Risk 

It has been mentioned previously that a long process of strategic planning has been undertaken into every aspect of the project to reduce project risk and the operational aspect of it has been prominent in this regard. From the selection of land encompassing soil, irrigation and surrounding infrastructural variable to the strategic partnership with the government, every operational risk has been analyzed and decisions and actions taken to both allay risk factors and maximize revenues. 

AH’s prudent decision to start the project on a smaller scale (relative to other implemented projects) and build the hectarage up gradually is testament to this risk reducing strategic planning. 






The 10 year Roll-Out Project constitutes putting 100,000 hectares into active agriculture production consisting of various forms of production crops, horticulture, secondary agro- processing facilities for food preservation and vertical integration, pastures for development of the short-cycle livestock chain, and the development of agro-forestry. This also includes  10,000 hectares being allocated to our small farmer program of direct participation from community farmers. The first two years will feature building the necessary foundation and infrastructure for creating a sustainable agricultural platform in The Gambia while developing land, based on a controlled growth process. Upon establishing a solid foundation, the following 8 years will have the needed support to progress at an accelerated pace while maintaining a quality structure, enabling all hectares to be completely in production by 2022. 

The hectare roll-out plan can be viewed later herein. As previously discussed, AH will capitalize on 2 effective cropping

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CA Vikas Jain - Chief Advisor

Mr. Vikas Jain is a reputed Chartered Accountant possessing in-depth understand...

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CA Vikas Jain

CA Vikas Jain - Chief Advisor

Mr. Vikas Jain is a reputed Chartered Accountant possessing in-depth understand...

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