Projected GAAP Compliant financial statements if new planting is undertaken

Income Statement 2005 2006 2007 2008 2009 2010

Revenue 81200 103200 144000 208000 256000 304000

Less: Labour Expense Note 1 32250 32250 95000 95000 95000 95000
GROSS MARGIN 48950 70950 49000 113000 161000 209000
Less:
Depreciation 13750 13750 13750 13750 13750 13750
Interest 37174 35913 34575 33153 31642 30037
SGA 5000 5000 5000 5000 5000 5000
INCOME/(LOSS) BEFORE TAX -6974 16287 -4325 61097 110608 160213
Less: Tax -2789.6 6514.8 -1730 24438.8 44243.2 64085.2
NET INCOME / (LOSS) -4184.4 9772.2 -2595 36658.2 66364.8 96127.8

Balance Sheet
Cash
Accounts Receivables
TOTAL CURRENT ASSETS
PPE
- Vines and Trellis
Less: Acc Depreciation
- Land
Deferred Tax Asset
TOTAL ASSETS
300207.4 366141.2 383959.6 446445.4 560921.9 726968.7
686900 686900 686900 686900 686900 686900
-22174 -35924 -49674 -63424 -77174 -90924
400000 400000 400000 400000 400000 400000
67649.2 64179.2 87252 97858.4 81102.4 39010.4
1432583 1481296 1508438 1567780 1651750 1761955

Deferred Tax Liability 45524 84465.6 114201.8 136885.8 154491.5 168568.5

Secured Long Term Debt
TOTAL LIABILITIES
Common Stock
Retained Earnings/(Deficit)
TOTAL LIABILITIES AND EQUITY
650000 650000 650000 650000 650000 650000
695524 734465.6 764201.8 786885.8 804491.5 818568.5
800000 800000 800000 800000 800000 800000
-62941.4 -53169.2 -55764.2 -19106 47258.8 143386.6
1432583 1481296 1508438 1567780 1651750 1761955
Notes

1 GAAP capitalised expenses that prepared an asset for use and depreciation began once the asset beg
this case, 2007)
2 Depreciation Schedule
Rootstock and Trellising 351400
Add: Farmng Cost 125500
Total Cost to be depreciated 476900
GAAP LIFE 50 years
Tax Life 10 years
Year MACRS Dep Rate MACRS Dep Amount MACRS Acc Dep GAAP Dep Amount
2005 10 47690 47690 9538
2006 18 85842 133532 9538
2007 14.4 68673.6 202205.6 9538
2008 11.52 54938.88 257144.48 9538
2009 9.22 43970.18 301114.66 9538
2010 7.37 35147.53 336262.19 9538
3 Deferred Tax Liability Schedule
Year GAAP Acc Dep MACRS Acc Dep Difference Tax Rate
2005 22174 135984 113810 40%
2006 35924 247088 211164 40%
2007 49674 335178.6 285504.6 40%
2008 63424 405638.48 342214.48 40%
2009 77174 463402.66 386228.66 40%
2010 90924 512345.19 421421.19 40%
4 Deferred Tax Asset Schedule
Year Cumulative NOL Tax Rate DTA Change in DTA
2005 -169123 40% 67649.2 8260.2
2006 -160448 40% 64179.2 -3470
2007 -218130 40% 87252 23072.8
2008 -244646 40% 97858.4 10606.4
2009 -202756 40% 81102.4 -16756
2010 -97526 40% 39010.4 -42092
egan once the asset began production (in

GAAP Acc Dep

9538
19076
28614
38152
47690
57228

DTL Change in DTL

45524 25306
84465.6 38941.6
114201.84 29736.24
136885.792 22683.952
154491.464 17605.672
168568.476 14077.012