elf pgi report final[1]

Brief Report: A Real Estate, Corporate Farming Initiative

ECO-LOGICAL FOX

Peerless Green Initiatives, Chennai, India+91 81241 [email protected]

CONTENTS

Synopsis............................................................................ 2

Project Proposal- Agribusiness Corporate Farming......... 3

Project Team..................................................................... 4

Indian Agriculture- Present Scenario............................... 5

US and international Agriculture Scenario....................... 6

The ELF ’Sustainable’ Farming Approach....................... 7

Summary of ELF Plan Initiatives ................................... 9

Important Results............................................................. 11

High Level Commercials................................................. 12

Real Property & Winery detail......................................... 13

Eco-wine-tourism Plan..................................................... 14

Conclusion........................................................................ 16

ECO-LOGICAL FOX - Brief Report: A Real Estate, Corporate Farming Initiative. 1

The Eco-Logical Fox (ELF) Wine Estate Corporate Farming Initiative

(ELF, LLP) is a partnership agribusiness of sustainable practices and durable

methods designed to develop high level commercial returns. Value additions

include renewable energy infrastructure, innovative resource management

and conservation. Further, established Indo-American strategic partnerships

will facilitate the development of valuable technical methods and efficient

cross-marketing of networks to synergize corporate and social dividends.

ELF, Limited Liability Partnership, will begin by acquiring a turn-key Central

California U.S.A. wine estate with solid fundamentals and capacity for scaled

expansion. This property has been identified and fully reviewed by the ELF

Project Team. Upon acquisition, marketing and operations will be intensified

and the estate infrastructure will be made more energy efficient. Furthermore,

ELF, LLP and its strategic partner, Mandala Valley Winery, India, will begin

cross marketing of products. Once fully developed over the course of two years,

the ELF LLP will be the premier example of green agribusiness, ecotourism

and Indo-American commercials.

SYNOPSIS


Project ProposalELF, LLP adopts a two prong business strategy (the ‘ELF Plan’) that takes advantage of the synergy between the current economics of the Indian and California wine market. The two objects are:

1. To take advantage of the buyer-favorable real estate climate in the U.S. through acquisition of an existing 64 acre turn-key vineyard/winery (‘wine estate’) currently priced $2.1 million USD. The wine estate currently has 24 acres of vineyards with a yield potential of 98 tons of wine grapes per year and has a permit to plant an additional 20 acres of grape vine. The estate includes a turn-key winery fully equipped for production of over 10,000 cases of wine per year. Further, the property is on the tourist ‘Pleasant Valley’ wine tasting corridor’ minutes from wine tourist destination, Paso Robles, California. The estate also has a permitted winery tasting room and banquet room for on site events. Historically, the estate brand has a long solid history of retail point-of-sale, wine club membership and will provide ELF, LLP ample opportunity to develop an eco-resort on the estate’s 10 acre wildlife reserve.

2. The strategic partnership between ELF’s project team and Mandala Valley Wines in India provides the ideal conduit for cross-marketing of wines and innovations. ELF will create a competitive advantage by target marketing its products to the 4 million U.S. NRIs (2 million of whom reside in California) as well as estate wine-tourism and promotion of India’s Mandala Valley brand wine. Further,

the wine-consumer niche in India is a ripe marketing opportunity rising 30% annually. The increasing curiosity of India wine connoisseurs for California wines allows for ELF to cost effectively transport wine in bulk for bottling by Mandala Valley and thus avoiding excise taxation and customs duty thus creating a competitive pricing and availability advantage. The cross marketing of the two brands in each other’s home market will create brand synergy and value.

The proposed ELF Plan is supported by the California Sustainable Winegrowers Alliance, UNEP Biodiversity Partnership and M.S. Swaminathan Research Institute, all of which through ELF’s management company Peerless Green Initiatives (PGI)1 are organizations that will provide a cost-effective technical supply line of valuable resources for ELF’s process implementation. The ELF Plan, as detailed below, includes energy efficient infrastructure, Co2 sequestration strategies, water and soil management models, biological pest and herb control, as well as establishment of conservation zones forested with bamboo. These initiatives create the potential to reduce taxes, provide cost offset rebates and generate carbon certificates that can be traded on the open market as a secondary form of land use revenue.

ELF, LLP investment involves the acquisition and development of a showcase for-profit sustainable wine estate (Real Estate Limited Partnership) as an exclusive private undertaking enhanced by tax-saving strategies and limited in partnership making SEBI or SEC registration unnecessary. In addition to healthy direct return on investment, the ELF partner will: accrue carbon credit certificates, be entitled to annual timeshare on the California estate eco-resort, have the pride in ownership that comes with a real estate investment and be eligible for royalties for IP that benefits India’s National food-security. Lastly, India resident partners, may qualify for U.S. investor status E1-5.1 As a value addition, the Partnership will be managed in house by Chennai based veteran green business turn key specialists Peerless Green Initiatives, a Delaware Corporation. www.peerlessgreen.net. PGI's management and use of sourced networks will enhance the land value and marketability of production as well as build ecological/social value chains; and eco-efficient infrastructure. The output of which will be the creation of solid returns and insure partners a verified 'green' investment. Along with other value additions (summarized in the Sustainable Agriculture Table, below) ELF is an exciting high commercial, socially responsible opportunity that takes advantage of current economics in U.S. and India.


Project Team

Project Planning and Implementation: Peerless Green Initiatives executive team, USA, ChennaiM.S. Swaminathan Research Institute, India, Advisory

Land Acquisition:Lawyers and California Wine-Business ProfessionalsJohn Bergman, Bergman International, USA

Crop Practices and Processes: M.S. Swaminathan Research Institute, ChennaiCalifornia Sustainable Winegrower Alliance, USA

Asset Management: Dhruv Funani, LEED AIA, Peerless Green InitiativesDavid Sands, LEED AIA, BambooLiving, (ecotourism)Peerless Green Initiatives manager team, USA, Chennai

Financial Management: Prof. L. Chris Haug, MBA, U.S.A. *Sunil Ahuja, CA, Peerless Green Initiatives and manager team, USA/ Chennai

Marketing and Sales: *Ramesh Rao, Mandala Valley Wines; Scion Advertising Agency, Bangalore*Deborah Connelly, Esq, Peerless Green Initiatives*Nandana Sen/Glenn Crowely, Phd, brand ambassadors


BACKGROUND SOCIAL MISSION: Agriculture & the Wine Industry in India:

By history, in Pre-Independence India during 1930s nearly 70 % of the population were working in agriculture and farm related work. Two thirds of the population was cultivating food for themselves and the other 1/3rd population. The farmer-consumer ratio was 2:1. In 1950s after independence industrialization started, public sector companies and other activities created migration of people from rural to cities. The result was a farmer-consumer ratio of 1:1. The farmer’s burden has doubled. From 1980s to 2000 the tremendous growth of IT, auto and other industrial sectors left only 25% of the burgeoning populous dedicated to farming. Of those, over half were poor and marginalized whose productivity was very low. Currently, the farmer’s burden of maintaining India’s food-security is six times compared to 1930s. Ineffective infrastructure, supply lines and inflation caused by middlemen has left India’s food security critical. If this scenario continues, India’s small farm groups will lose hope on agriculture. The need for technical and sustainable farming methods marketing and processes are a must. It is clear that private industrials and social investors need to proactively adopt innovative and high tech farming and management practices in order to capacity build and innovate for the good of farmers, agribusiness...and most importantly, India’s food security.2

However 'high tech' commercial farming is not enough. For example, in the U.S.A., the long term effect of commercial chemical farming has been proven to result in less nutritious produce than sustainable practice produce.

2 This is where PGI, will add value by bringing the best practices of sustainable farming, from US to India, through specifically identified projects such as ELF. Like PGI's prior successful business model regarding bamboo, ELF is poised to become the definitive sustainable scalable business model of farming by applying a multi-national holistic approach focused on profit to farm, farmer and consumer alike.


Agriculture & the Wine Industry in U.S.A: Present Scenario

The ELF Plan is as much about market-making as it is about sustainable agriculture, social initiative and food security. PGI was participant at the UNEP Biodiversity Conference on Food Security, in Chennai India in February 2010, and has been vested in policy and facilitation-of-process to address poor farming infrastructure and practices that threaten India’s food security. Further, PGI’s status in the industry has been validated by it being chosen to hosting the upcoming UNEP Biodiversity Convention on agribusiness in Calcutta on November 29, 2010, which will highlight the core ELF ethos, namely the coordination and adoption of global technical methods and efficient supply line logistics to create healthier crops and will stop grain from rotting at depots. The ELF eco-business plan was developed by PGI to demonstrate actual application of well researched processes and how implementation can help US and India achieve and maintain food security and be the bread-basket to the world. UNEP’s recognition of PGI as a leader in the field, and a proven designer of sourcing efficient-large scale agribusiness programs assures that ELF has available a network of the best and brightest in India and U.S. to source and procure necessary efficiency methods and infrastructure.

As such, India’s newly developed wine industry can provide a platform example of the potential of modern practices and effective logistics. Further, the American and Indian ‘wine-lifestyle-consumer’ drink wine for the health properties, in moderation as a quality accompaniment with good food, provides an excellent opportunity for marketing product and social agenda. Market trends demonstrate wine is an acceptable beverage in India with consumers bullishly searching for quality domestic vintages and high price-point California brands.

American industrial farming has proved to be a benefit through the technical advancements of processes, but has been blighted through the over-use of fossil fuel infrastructure and chemical pesticides, poor land water management. The ELF Plan's focus on the adoption of responsible agribusiness practices and processes (popular in the U.S.) provides an opportunity to import India's traditional indigenous farming knowledge, wisdom and cost-efficient processes. Further, the enormous pool of research and institutes in India dedicated to efficient and eco-friendly farming, is a valuable commodity that US farmers and agribusiness are ready to learn and adopt. The Indo-American cross pollination of new and old tech is an area the ELF Plan will efficiently source and deliver to the market. As a result, successful processes can be converted into royalty generating intellectual property and proprietary process models. Not to be understated are the enormous social benefits of synergy that a merged plan of sustainable practices, clean technology and validated traditional wisdom will bring to Indo-American food security.


Specifically the California wine industry has proved resilient despite economic down-turn. Despite the modest wine market dip of only 2% since 2008, the well known industry barometer, Sonoma County Wine Auction 2010 raised a record breaking USD1.3 million in one weekend.

In juxtaposition, the 2007-2008 real estate town-turn has created an immediate buyer's opportunity. Californians trimmed their portfolios by shedding their 'get-away' wine estates for up to 60% below State assessed land values. Therefore, the perfect confluence of a strong wine industry, strong social initiatives and easy market entry through acquisition of wine estates makes this a 'ripe' time for action.

WINE INSTITUTE WIRE: July 2010: SAN FRANCISCO – During the recessionary 2009 economy, California vintners shipped 467.7 million gallons (196.7 million cases) of California wine to the U.S. wine market in 2009, up a modest 0.2% compared to the previous year’s volume, according to wine industry consultants Gomberg, Fredrikson & Associates in Woodside. Retail Value Down 4%, but Volume Grows 2% in the U.S. Wine sales to the U.S. from all production sources— California, other states and foreign producers—grew 2% to 767.4 million gallons (322.8 million cases) in 2009. The 467.7 million gallons of California wine shipped to the U.S. represented a 61% share of the U.S. wine market. The statistics suggest that despite the economy, wine consumers are keeping a bottle on wine at the dinner table.

The ELF Sustainable Farming Approach:

Ecological-Efficient-EconomicA full FAQ regarding the details of the ELF Plan is available to serious investors via request at [email protected]. Preservation of the world's food security requires science and processes to be implemented and communicated to establish nourished populations and viable agribusiness while protecting the ecology from further climate change. One of the most critical is India where the burgeoning population is outstripping food availability. Viticulture, like other agribusiness, entails the production of high quality food products from agricultural systems that rely upon more natural approaches to crop nutrition, pest and disease control, and management of natural resources such as soil. The principles of sustainable viticulture include the development and maintenance of good soil structure, fertility and biological activity, and the avoidance of many harmful viticultural chemicals. The ELF Plan will meet this challenge by adopting a wide range of acceptable durable techniques that are safe and promote better crop yields.


The easiest answer to the World’s food security problem is by making farming activity profitable to the farmer and environmentally friendly. Assuring that processes coexists with the natural environment is known as ‘harmonization’ of business and environment. Examples are conversion to renewable energy sources (wind, solar, bio-fuel) carbon sequestration, cost efficient biological methods of pest control and soil and water conservation.

Cooperatives: An often overlooked benefit of going green are the abundant available incentives offered by the U.S. State and Federal Government, intergovernmental organizations and NGO grants. This is a specialty area of management firm PGI and will result in tax breaks and rebates for setting aside conservation land, reducing CO2 emissions, employing sustainable processes, promoting food security and reducing grid dependency. The result: the ELF, LLP will enjoy multi-year tax holidays that will discount for example the annual USD17,500 property taxes; PGI’s inclusion in a broad range of cooperatives such as the California Sustainable Winegrowers Association, UCDavis Wine Institute, Indian Wine Academy, UNEP and WOOF (Work on Organic Farm Association) and strategic partnerships with MS Swaminathan Research Foundation will pay dividends by sourcing high tech consult and implementation of sustainable farming on a low-cost, no-cost basis. This has the effect of reducing overall labor costs by 50% or more per year. (USD15000 per year, to less than USD7000.)

The current media driven consumer perception of sustainable farming and renewable energy/ resource management has reaped many rewards for businesses in U.S. and India. The less seen side of commercial sustainability is that it creates efficiencies and cooperatives that quickly offset cap-ex of sustainable strategies and energy infrastructure. For example, the California wine estate targeted for ELF, LLP acquisition has historical annual overhead of USD102,796. This figure can be drastically reduced through cost cutting services, labor and chemical inputs through the implementation of: renewable energy infrastructure, cooperative alliances and bio processes.

Renewables: The acquisition property consumes USD14,000 in annual energy costs. This can be be reduced by 2/3 through the use of non-grid dependent energy sources such as solar photovoltaic panels, solar water heating, bio-fuels and low-watt energy efficient lights, generators and pumps.


Bio-Controls: The use of costly fertilizers and chemicals to control unwanted herbs and pests can be eliminated and replaced with biodynamic and biological predation methods which have been proven by USDA to increase the quality of crops, resulting in lower cost of farming and higher value at market. For example, using the revived 'traditional grazing herd method' will keep back weeds and in turn fertilize will can cut cost from USD10,000 per year to a couple thousand dollars; and micro-injector fed organic chemical preparations such as neem and enzymes to control pests and fungus reduces pest control costs from USD50 per acre to USD18 per acre.

All told, annual overhead will progressively decline to USD65,000-79,000 through a conservative two year plan of implementation of processes and efficient infrastructure.

Why ELF, LLP uses a Wine Estate to promote Food Security

Wine estates have proven a stable industry and provide the perfect platform to overlay sustainable farming. The wine industry had historically respected age-old elements of efficiency and ecologically responsible farming. Many of the 'new' farming processes were applied and perfected centuries ago by winegrowers. The wine industry and its consumers currently embrace the adoption of socially and ecologically responsible processes and practices. As such, the ELF Plan can rapidly create goodwill and image as a pinnacle of neo-modern farming. ELF, LLP will apply the proven California Sustainable Winegrower Alliance method of sustainable winegrowing employing processes sensitive to the environment (Environmentally Sound), responsive to the needs and interests of society at large (Socially Equitable), and are economically feasible to implement and maintain (Economically Feasible). The combination of these three principles is often referred to as the three "E's" of sustainability.


Sustainable AgricultureService Area

Target Resource

Need Description ELF Plan of Action

Ecosystem Services

Soil* Erosion Control*Soil Protection*Nutrient Protection

• Use of bamboo and jatropha as erosion barrier and marketable co-crop• Mixed and certified elite grape varieties and complementary co-crops/

ground cover to cycle nutrients and support natural disease resistance.• Sheep livestock weed- to- fertilizer cycling• 'Sacred' conservation groves, nursery and bio-pest management using neem

and other proprietary traditional mixes

Water*Water Conservation*Water Cycling*Water Harvesting

• Rainwater harvesting and surface water channeling to reduce reliance on groundwater

• Energy efficient gravity fed micro-irrigation to reduce consumption and waste

• 'Sacred' tanks of surface water storage and cycling of gray water; plus bamboo shade forest for creation of cooling micro-climate/ drought tolerance

Air*Carbon Sequestration*Carbon Reduction*Zero Fossil Fuel

• Use of bamboo biomass, jatropha bio-fuel and solar renewable energy systems to meet estate energy requirements.

• Use of alternative fuel and renewable fuels to obtain trade-able Carbon Offset Credits

• Use of bamboo reserve as carbon containment vehicle to obtain Carbon Sequestration Credits

• Above will be used to design and implement Zero Carbon/ Carbon Negativefarm-to-table produce. (IP)

Energy*Alternative Fuels*Renewable Fuels*Fuel Efficient Systems

• Onsite micro-processing of jatropha inter-crop as fuel for machinery and transportation

• Use of solar power sets to offset energy requirements of farming and processing

• Use of appropriate technology building design and traditional buildingmethods like cob and earthen brick that is efficient, climate appropriate and disaster resistant.

• Use of high efficiency solar cyclonic pumps and gravity feeds for water management.

Social Services

Farmers and Farming

*Crop variety*Improved processes of communication and feedback to battle climate change and risk management*Community based management and crop portfolio for security and risk tolerance*Transfer of modern technical methods of farming to developing nations adoption of efficient age-old traditional farming wisdom to reduce reliance on chemical farming practices.

• Strategic ties with MS Swaminathan Research Foundation and Mandala Valley, coupled with California Sustainable Wine Alliance to create communication and tech network approach to agricultural processes, security and management.(IP)

• Value added participation in Alliances and Farm Clubs to develop transferable quality community management practices and market presence of small farmer. (IP)

• Eco-tourism to promote consumer understanding and appreciation of sustainable farming.

Consumer

*Quality, hygienic, nutritious produce*Logistical efficiency and integrated supply-line management to avoid crop rot loss*Co-op and strategic alliances to assure

• Use of 'breathable' flex tanks for the transport and storage of produce and prolonging produce shelf-life.

• Use of PGI's co-op supply lines and integrated logistics for domestic and international produce marketing

• PGI Marketing plan to raise awareness of health and quality benefits of sustainable farming

• PGI eco-tourism plan will draw on public interest in 'green' industry; 'work on organic farm' volunteers can learn while offsetting labor costs.

Eco-Policy BuildingServices

International

* Millenium Goals of UN:*Cooperation to build capacities for food and agriculture resources and risk management*Strengthen the dissemination of knowledge, appropriate technology and tools to improve management practices.

• PGI's UNEP/ FAO network will promote the ELF program.• PGI's International strategic partnerships with Agro-Farmers Association,

Swaminathan Research Foundation and Sustainable Winegrowers Alliance will promote dissemination of tech and traditional know-how

• ELF-Mandala Valley bilateral relationship will be a high media exposure showcase relationship of 'real' cooperation

• PGI policy team with in-roads to India, US and UN can promote and lobby policy supportive of the agenda

Below is a Summary of ELF Plan Initiatives


Thumbnail Summary Inputs and Capital Expenditure:Wine Estate Acquisition: USD 2,100,000 (INR 9,24,00,000)Capital Improvements (Y1/Y2) USD 350,000 (INR 1,54,00,000)x-Marketing, Management, Overheads: USD 150,000 (INR 66,00,000)Total Investment Capital Required: USD 2.60 million (INR 11.44 crore)

Thumbnail Summary of 5 Year Outputs:

(*Please request full prospectus for plan details, necessary re-investments and itemization of annual management and professional fees: ELF proforma expects break even in Y3; with Investor Exit Options at Y5, Y8 or Y10. ELF Partners are paid annually through distributions on profits and structured return of principle; ELF partnership includes time-share rights to the residence eco-lodge) Based on proforma the annual return on investment averaged over 5 years will be 18% -22% per year.

Important Results:The tables above illustrate the deep social and ecological impact potential of the ELF plan. However, the true win-win is the creation of a highly cost efficient and profitable business basket of goods and ecological-social services. PGI, MSSRF, UNEP and CSWA/UC Davis University have demonstrated that the use of sustainable practices makes a wine estate more secure, more cost-effective and more profitable through healthier produce that attracts higher prices at market.3 As an example, the U.S. Government (USDA) has adopted a policy that rebates 60% of the cost of converting vineyard farms to solar. Further, a report funded by the National Fish and Wildlife Foundation (NFWF) reported that 101 California winegrowers who have adopted the sustainable management practices have more successful wine-businesses as a result.4

3 Representative results have been published in "Reducing Risks through Sustainable Winegrowing: A Growers'' Guide," funded by the U.S. Department of Agriculture, Risk Management Agency. The guide demonstrates that sustainable methods reduces risk and can be an effective management strategy to enhance the long-term viability of businesses.

4 (Complete survey results are detailed in the report titled, "Understanding Adoption and Impacts of Sustainable Practices: Sustainable Winegrowing Program Participants' Survey," available online.) These methods and the further development of processes enhanced though Indian traditional indigenous knowledge provided by strategic partner M.S. Swaminathan Research Foundation, coupled with PGI's record of international standard business models and sustainable planning, allows for the in-house creation of valuable IP that will have enormous social impact with worldwide influence. For an example see http://www.rncos.com/food%20Markets.htm whose industry reports fetch $800USD per copy.


Currency Year 1 Year 2 Year 3 Year 4 Year 5US Dollar 5,63,500 4,85,000 12,105,00 20,66,000 40,69,000Indian Rupee 2,47,94,000 2,13,40,000 5,32,62,000 9,09,04,000 17,90,36,000

DETAIL OF THE ELF PLAN: High Commercials:

“Healthy financial returns” can be a better option than mere High Commercials

Green Plan Overview

Typically a wine estate's highest cap-ex cost is winery infrastructure cost. One of the true values of the California estate to be acquired is that the winery is fully developed to the scale of the vineyard output of 10,000 cases per year. This is a major cost savings, developed by the seller and an immediate benefit to ELF, LLP. The ELF Plan can therefore focus on the high-return improvement and expansion of the existing 43 acre vineyard while reducing infrastructure overhead and aggressively marketing the brands that will convey with the sale. Below is a overview of the estate:

• The current 23 acre plantation currently yields enough to produce 1000 cases annually with each case selling for USD200-300 (INR 8800- 13,200) per case. In order to take advantage of the winery potential during the two years required to scale the vineyard to its potential 43 acres, ELF LLP will sell existing stock, procure bulk grapes and bulk wine to produce revenue. As such, turnovers are assured and will offset much of the cost of vineyard expansion and renewable energy infrastructure conversion. Once complete, the wine estate will be fully integrated at full capacity in year 3.

• With expansion of the vineyard to 43 acres, the harvest will begin yielding 150-200 tons of grapes annually, sufficient to produce 10,000 cases of wine per year. The capital improvement required in the vineyard would be approximately USD350,000 (INR 1,54,00,000) over the course of two years, much of which can be implemented through the reinvestment of wine inventory included in the sale.

• Also the ELF plan includes greenhouse development to host UC Davis 'elite' certified shoots, which shall be a source of revenue through sale to other vineyards, and will be a ready supply of premium quality vines and accordingly premium caliber wine. On site greenhousing is a cost efficient method of shoot procurement, quality assurance and security.

• The ELF plan includes using the management team's deep industry networks, policy experience and skillset to have the estate certified by the Sustainable Wine Alliance, USDA, FAO and US Green Building Counsel “LEED” criteria. These certifications have been shown to increase the desirability (price point) of the wine product will encourage its development as a eco-resort destination. The secondary benefit of meeting these criteria is eligibility for incentives that can reduce the estate's current overheads, offset costs of certification and lend an elite channel of marketing and goodwill. These all equal increased product quality and consumer value addition.

• A value added of operating a sustainable farm is the ready availability of skilled eco-activists, 'Woofs' (work on organic farm) and farming-clubs- who volunteer during pruning, planting and harvesting seasons. This network advantage is a major offset to increasing labor costs by crowd-sourcing the work to green business activists. The implementation of carbon reduction policies and sequestration through established 'sacred spaces' on the estate and a bamboo plantation will protect the vineyard, support micro-climate, offset overheads by up to 10% and create tradeable carbon certificates. The integration of biofuel and renewable sources of fuel and energy promises to dramatically reduce on site fuel costs and carbon emissions.

• The implementation of carbon reduction policies and sequestration through established ‘sacred spaces’ on the estate and a bamboo plantation will protect the vineyard, support micro-climate, offset overheads by up to 10% and create tradeable carbon certificates. The integration of biofuel and renewable sources of fuel and energy promises to dramatically reduce on site fuel costs and carbon emissions.


Real Property & Winery Detail:The negotiated acquisition price of $2.1 million, includes a 3,000 sq foot residence/office/banquet hall, a 2500 sq foot state-of-the-art winery, furnished tasting room, furnished banquet room, wine lab, and all modern farm equipment. (See Inventory, attached.) The property is improved with 24 acres of trellised micro-irrigated vine and an additional 20 acres, prepared and trellised ready for planting. Included is a 3000 sq foot wine cellar with inventory worth USD130,000 and a cask inventory of 700 cases in 70 high quality French Oak barrels. All accounted the property and asset value of this property is easily USD4 million. 5

In order to reach maximum potential of 4+ tons per acre a number of vines will need to be replaced with new 'elite' cultured root stock. This will be phased in over the course of two to three years. The benefit of this will be the procurement of high quality, certified disease resistant root stock. Due to PGI's networks they can be procured at deep discount from the Sustainable Wine Institute at UC Davis. The total two year cost of replacement will be USD44,225, and contemporaneously, an additional 20 acres will be planted on prepared and trellised land, bringing the matured annual harvest of at least 150+ tons, which would allow the winery to operate at its full potential of 10,000 cases per year. Assuming a sales distribution of 60% retail and 40% wholesale, this would gross USD4.2M annually (This does not include the value appreciation of the present cost per case of USD 200FOB wholesale. The viticulture of elite varieties has been proven to increase wine quality and accordingly demands a higher price. The ELF marketing plan includes product value addition that should increase case value by 25-50% particularly by bulk shipping to India and economic upturn in U.S. Likewise the supply-demand shortage of California wine in India supports the plan of shipping bulk wine for bottling and sale by Mandala Valley at a premium price-point.

5 The potential of this investment property is evident when compared against other geographically proximate farms: A forty acre farm (with no winery) and sixty acre farm (with winery and resort) that have been fully developed and are on sale for USD4M; Therefore, the property targeted for acquisition- 64 acre turnkey wine estate with 24 acres under vine, 20 acres ready for planting and a state-of-art winery and tasting room, is well priced and has incredible untapped potential currently, in the medium and long term. See Exhibit 1.


Unique Cross Marketing/ IP marketing:

Eco-wine-tourism Plan:

Perhaps one of the most unique opportunities of ELF is it strategic partner 'sister estate' Mandala Vineyard in India which shall be the conduit not only to the cross-marketing of wine but the promotion of IP implementation. It is a strategic tie that can bring opportunity for revenues derived from each others' markets. The India wine market has grown three fold in eight years, and according to a detailed market study funded by U.S. and Indian Wine groups, showed the India wine consumer is showing interest in the elite California varieties . Further, the U.S. is home to 4 million NRIs, over half of whom live in California. As such, the cross-importation of the sister brands can be exploited through the efficiency of this strategic alliance. The use of eco-friendly Flex-tanks can allow for cyclical shipment of California and India wine at a fraction of the cost of cask shipping, and with no dead-heading. The cross-marketing can further target cross-tourism and as a conduit for valuable transfer of valuable proprietary technical methods (TOTEMS) and sharing of traditional indigenous knowledge (TIK).

Not to be under-estimated is the the secondary revenue stream that can be derived from the development of the estate as ecological wine-tourism resort. For example, the State of California has passed legislation this year for providing for USD600,000 (INR 2,64,00,000) in marketing a wine-tourist 'tasting corridor' in Central California ( the acquisition wine estate is on this route.)

P A S O R O B L E S W I N E C O U N T R Y

Paso Robles Wine Country is ideally located along California’s Central Coast. Situation ten minutes inland over the Santa Lucia Mountains, the region provides optimum growing conditions with warm days and cool nights. The entire AVA is 612,308 acres of which approximately 26,000 acres are planted to wine grapes. Benefiting from the state’s largest diurnal temperature swing, wine grapes get fully ripe with balanced sugars and acid flavors. Vineyards are located throughout the region in the area’s various microclimates suited to grow more than 40 wine varieties. The Paso Robles and York Mountain Viticulture Areas (AVA) were established in 1983 as recognized and defined by the Alcohol and Tobacco Tax and Trade Bureaus (TTB). For more information about Paso Robles Wine Country visit pasowine.com.

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The property can accommodate tourists at it fully stocked tasting room and banquet hall. This can be built upon through the establishment of an eco-resort. This will increase on-site retail point-of-sale at the winery tasting room and is an efficient source of revenue that will be enhanced further through the development of an on site ecotourism resort. Eco-winery resorts are frequently featured in internationally recognized Wine Spectator magazine. As such, with a modest investment of USD200,000 (INR 88,00,000) would allow for the addition of a boutique cluster of pre-fab International Building Code certified bamboo cottages through PGI's strategic alliance with Bamboo Living and internationally renown LEED architect David Sands. This value added feature will tap the local lucrative ecotourism market which has proved to be recession-proof and continues to show 90% occupancy rates at 350-500USD (INR15400 – 22,000) per night, per cottage.

Finally, as part of the partnership management fees to PGI, the acquired property will be target marketed and policy-promoted by the PGI marketing and policy team through its deep legal, market and policy background which, due to California's progressive incentives for CSR (corporate sustainability and responsibility), will net real incentives and brand goodwill that will further offset overhead and promote market presence and price-point value development. Internationally publicizing brand Corporate Sustainability and Responsibility (CSR) will create goodwill and promote the estate as a premiere ecotourism resort destination. In fact, PGI's current CSR has already been internationally lauded for its visionary proactivity and project successes. Further, California State's earmark of USD600,000 in 2011 to promote wine tourism marketing of Central California Wine Tourism (which is responsible for USD1 billion annual turnover) is an enormous untapped value addition and further recognition of the emergence of the area as a premium wine destination.


Conclusion:Mindful of its core social interest, the ELF Plan will publicize its unique distinction as a bi-lateral Indo-American cooperative designed to promote agribusiness and food security. A committed and integrated approach like ELF, LLP can bring applied IP and business processes for adoption in the broader marketplace. ELF is for-profit by design. Only through demonstrating sustainable can equal profits will the industry follow the ELF lead. The developed ELF model and the resultant agri- intellectual property (AgIP) will enter the billion dollar international AgIP industry and will derive enormous social dividends for the food security of India, U.S. and the world. The rarity of programs that bring R&D into commercial application- along with strategic alliances with USAID funded M.S. Swaminathan Research Foundation and the equality driven policy of ELF woman-members like CEO Deborah Connelly and brand ambassador Nandana Sen (daughter of Nobel Prize Laureate Dr. Amartya Sen)- sets the stage for a strategic competitive advantage through bilateral development of efficient farming practices, social sensitivity and availability of grants and incentives.

Thank you for the review of this brief description of the ELF program and for a full prospectus, contact your referring broker. This is a once-in-a-lifetime opportunity to have a U.S. investment footprint in prestigious California wine county real estate; taking advantage of favorable market factors in U.S. and India; and most important doing well for your Country and the World.

Jai Hind! And long live the partnership between India and the United States.

Eco-Logical Fox: Doing its part to realize the potential of the U.S.-India alliance as detailed in President Obama and Prime Minister Singh's Historic November 2009 MOU to promote: “The need for substantially scaled-up resources to support migration and adaption in developing countries... of measures for promoting technological development, dissemination and transfer and capacity building that will strengthen the world's ability to combat climate change.”

And more recently by President Obama to India's Parliament, November 8, 2010: Together, we can strengthen agriculture. Cooperation between Indian and American researchers and scientists sparked the Green Revolution. Today, India is a leader in using technology to empower farmers... And the United States is a leader in agricultural productivity and research. Now, as farmers and rural areas face the effects of climate change and drought, we'll work together to spark a second, more sustainable Evergreen Revolution.


elf pgi report final[1]

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