Equity equivalent programmes for multinationals

Annexure B Guidelines: Business Plan for Equity Equivalents Programme

1. General Information Requirement

1.1 Summarise contact details on Multinational letterhead of the Equity Equivalent (EE) Programme Vehicle (which is the separate legal entity established to operate the envisaged proposal for which the Equity Equivalent Programme is to be applied, if available), the Multinational, and the Multinational subsidiary operating in South Africa, which should include the following:

1.1.1 Business name

1.1.2 Business address

1.1.3 Company registration numbers

1.1.4 Contact telephone and fax number

1.1.5 Email contact details, website addresses if available

1.2 Contact details of EE Programme co-coordinator at the Multinational

1.3 Contact details of the key person at the EE Programme level if already appointed

1.4 Whilst appreciating that in some instances the EE Programme Vehicle may still have to be established, the following documentation will have to be appended to the business plan, whilst some of the information may be required for presentation at the time of establishment of the EE Programme Vehicle, prior to final EE Committee approval:

1.4.1 Certified Incorporation Documentation of both project vehicle and Multi-national subsidiary in South Africa

1.4.2 Certified tax clearance certificates of Multinational subsidiary in South Africa

1.4.3 Confirmation of tax registration for the EE Programme vehicle (if entity already registered, then tax clearance certificate required)

1.4.4 Certified copies of identity or passport documents of the CEO and person representing the project vehicle and the Multinational

1.4.5 Contact details of auditors and bankers, including details of contact person

Please note, this document is not meant to be exhaustive and additional information may be required based on the requirements of the specific application.

2. Equity Equivalents Programme Business Plan Generic Information Requirements

Please provide the following general programme information by commenting on the items listed below, where applicable.

2.1 Executive Summary (not longer than 2 pages), which should include the following:

2.1.1 Fundamentals of the EE Programme proposal(s)

2.1.2 The intended beneficiaries

2.1.3 The sector of the economy the EE Programme is to service / or is to operate in

2.1.4 Identify any benefits that the Multinational?s own business would gain from the EE Programme

2.1.5 Briefly outline the role(s) the Multinational is to play in facilitating the implementation, ongoing monitoring and success of the proposal

2.1.6 General day-to-day management of the EE Programme

2.1.7 Comment on the impact of the proposal on the South African Economy through it?s roll-out

2.2 EE Programme Background Information:

2.2.1 Mission statement

2.2.2 EE Programme objectives

2.2.3 Legal nature of the EE Programme vehicle viz. trust, limited liability company, partnership etcetera; and comment on preference of use

2.2.4 Shareholding structure

2.2.5 Envisaged directors and executive operational control

2.2.6 Role of Multinational in implementation and resource to be applied to the EE Programme; in terms of time, personnel, financial or other

2.2.7 Key strategic partnerships and alliances

2.2.8 Historical performance if an existing legal entity or business is being considered to house the proposal (please note the EE Programme places preference to new project vehicles with specific mandates addressing a particular industry or sector gap)

2.3 Product or Services:

2.3.1 Detailed description of products or service on offer

2.3.2 Status of development

2.3.3 Key milestones achieved and / or still to be achieved in implementation of the project

2.3.4 Detailed cost breakdown per unit of product or service

2.3.5 Technology employed

2.3.6 Intellectual property, patents & royalties

2.3.7 Competitive advantages and disadvantages together with a detailed SWOT analysis

2.4 Operational Plan:

2.4.1 Provide an outline / description of the daily operation of the EE Programme

2.4.2 Comment on the day-to-day management of the EE Programme

2.4.3 Confirm the location of the project and whether the premises is to be leased or purchased

2.4.4 List and motivate the operational expenses, including all input costs

2.4.5 Provide a detailed breakdown of direct operational staff and other indirect personnel Number of employees Type of labour (skills, unskilled, professional) Comment on where the personnel is to be sourced Remuneration structure and motivation Comment on whether the personnel have been identified and likelihood of joining the EE Programme Comment on the role of Multinational involvement in the overhead structure of the EE Programme Provide detailed job description and defined roles

2.4.6 Provide an operational organogram for the EE Programme

2.4.7 Provide CVs of key management, possible remuneration structure and identify their roles within the EE Programme

2.4.8 Provide information on any inventory requirements and typical inventory investment levels required

2.4.9 Confirm the names of suppliers, vendors or contractors and provide a description on their role with regards to inputs and capital equipment requirements

2.4.10 Provide a list of capital equipment requirements to set-up the EE Programme and provide documentation to motivate the cost

2.4.11 Provide a list of detailed operational milestones that could be used as measurements of implementation

2.5 Marketing or Revenue Plan:

2.5.1 Provide the overall marketing strategy

2.5.2 Describe the customer segment that the EE Programme is to engage given the defined product or service

2.5.3 Discuss the pricing strategy

2.5.4 Discuss all sources of income to be derived from the EE Programme

2.5.5 Discuss the advertising and promotion and any applicable sales tactics

2.5.6 Discuss the distribution strategy

2.5.7 Provide detail on the EE Programme marketing environment: Market trends Industry analysis Market research results Competitor analysis Substitute products or services Project?s market share Barriers to entry Potential market segments ? size & growth

2.5.8 Provide detail on any beneficiaries or related stakeholders that the service or product expected to impact

2.5.9 Provide a detailed sales / revenue budget, showing units and price, identifying ramp-up periods, on a monthly basis for at least two years

2.5.10 Provide a list of potential revenue milestones similar to those provided for operational milestones that can be measured

2.6 Critical risk factors:

2.6.1 Highlight key risk areas

2.6.2 Describe plans to minimise their impact

2.6.3 Provide copies of all key material agreements and contracts, or if still to be concluded, salient features of contracts, including the Support Agreement or an Operational Assistance Agreement between the Multinational and the EE Programme

2.6.4 Provide detailed measure able milestones that would allow monitoring of the EE Programme implementation and it?s success

2.6.5 Indicate suggested exit strategy from the EE Programme for the Multinational

2.6.6 Indicate future developments so as to evidence the sustainability of the EE Programme beyond the Multinational measured period

2.7 Funding Plan:

2.7.1 Details of funding required and application thereof (setup, capital and operational costs)

2.7.2 Capital required or invested to date

2.7.3 Multinational?s contribution to costs

2.7.4 EE Programme shareholder or promoter contribution

2.8 Financial Information:

2.8.1 Three years? historical (audited in the case of an existing company being used to house the EE Programme)

2.8.2 Projected income statement, balance sheet and cash flow monthly for first two years and then annually for at least 3 years

2.8.3 Break-even analysis

2.8.4 Applicable sector specific business ratios

2.8.5 Key assumptions underpinning the forecast assumption

2.9 Exit Strategy:

Unpack the Exit Strategy by the Multinational, if applicable.


Include any other pertinent details and studies used as motivation of the business plan, which could include for example:

3.1 Brochures and advertising materials

3.2 Industry studies

3.3 Blueprints and plans

3.4 Maps and photos of location

3.5 Magazine or other articles

3.6 Detailed lists of equipment owned or to be purchased

3.7 Copies of leases and contracts

3.8 Letters of support from future customers

3.9 Any other materials needed to support the assumptions in this plan

3.10 Market research studies


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