EXECUTIVE SUMMARY

Project Title : Modernization of Aquaculture and Hydroponics Development Project

Principal Proponent : Bangsamoro Aqua-culture and Hydroponics Dev’t. Corp.

Postal Address : Purok Saginagan, Kalangan, Cotabato City 9600, Philippines

Office Address : Panda Palace Hotel, Sinsuat Avenue, Esteros RH9, Cotabato City

Contact Person : Mr. Armando T. Sanso, Chairman/President

Contact Details : Mob+639103170309/+639167954685

Email Add: armandosanso@yahoo.com

PROJECT OBJECTIVES:

The main objectives of the project are to develop and design a high-quality export-oriented sea food
products and fruits, vegetables and ornamental plants in a pristine and controlled environment; share an
equitable micro-economic dividend of the products derived from the project to the concerned Filipino
people and foreign investors and accomplish within a limited land use area for new human settlement, a
joint management with local government authorities and private sectors’ participation in an Eco-Green
environment protection program.

PROJECT DESCRIPTION:

The Aquaculture and Hydroponics Farming Project integrates a complete self-contained community holistic
development planning, mass housing component and its amenities employing modern technology on
architectural and engineering planning design, construction methodologies, computer controlled
management and operation of the system to ensure an efficient, fast and orderly effective delivery of the
products nationwide and globally.

PROJECT LOCATIONS:

The first projects will be located in Cotabato City and will progressive in the area of Bangsamoro region such
as Maguindanao, Lanao Del Sur, Basilan, Sulo and Tawi-tawi if the projects are prove that serves the
economics of the Government of the Bangsamoro.
PROJECT COMPONENTS:

The project has the following components:

1. PRE-CONSTRUCTION PHASE.

This phase includes the following: land acquisition, acquisition of permits and licenses, relocation survey,
site preparation survey, topographic survey, soil investigation and preparation of plans.

2. CONSTRUCTION PHASE.

This phase includes the following:

2.1 Site Preparation and Development to include the development of administration office/temporary
facilities, perimeter fencing, back filling, leveling/grading, excavation, circumferential roads with curve and
gutter and sidewalk, islands with posts and lamps/underground wiring, drainage system with catch basin,
water supply, parking area and CCTV camera and electronics.

2.2 Commercial/Residential Zone Development to include the development of 5-hectare Aquaponics mall
with Aquaponics tourism and commercial facilities, 24-storey corporate residence, bus and van terminal and
other commercial facilities.

2.3 Industrial Zone Development to include the development of six (6) units of Aquaponics buildings with
Aquaponics’ equipments tools and accessories, fish sorting and packaging building, feed mill/warehouse,
motor pool, ice storage and processing plant, sewerage and waste water treatment plant, water recycling
plant and back-up electrical power supply plant.

2.4 Recreational Zone Development to include the development of clubhouse and restaurant with swimming
pool, tennis and basketball court, mini-park/landscaping, tree plantation and other recreational facilities.2.5
Development of Other Facilities to include the development of fountain with flag and electrification,
overhead and pressurized water tank maintenance and multi-purpose hall building and transportation and
communication facilities.

PROJECT MANAGEMENT:

Bangsamoro Aqua-culture and Hydroponics Dev’t. Corp., shall assume full responsibility for the project with
proper cooperation and support from its subsidiary corporation. A Project Management Task Group will
implement the project with a qualified Project Manager who will head the group and be responsible for the
entire construction of the project.

The three (3) special groups that will assist the Project Manager in the implementation of the project are:

(a) Administrative and Support Facilities Group – will be responsible for the development and training of
personnel and assigning them to the right position required by the project,

(b) Construction Planning and Operation Task Group – will be responsible for the supervision during the
implementation of Construction Phases I and II (Stages 1, 2 and 3) of the project development schedule and

(c) Marketing/Enterprise Development Task Group – will be responsible for the implementation of Phase II
(Stage 4) which is the development and establishment of sustainable enterprises of bio-diversified light
industries that are allied to the Green Aqua Farms and the establishment of a marketing arm locally and
abroad. A project monitoring and evaluation system shall be set up. Meetings and reviews shall be
undertaken to review and evaluate the progress and performance of the project.

FUNDS REQUIRED:

Uses of Funds: ………………………………………….Php 111,413,697,537.54……………………….(US $ 2,717,407,257.01)

Infra-Project Cost:……………………..……………….Php 76,227,215,064.00………………………..(US $ 1,859,200,367.41)

Direct Cost:…………………………………………………Php 54,448,010,760.00…………………….…(US $ 1,328,000,262.44)

Indirect Cost:………………………………………………Php 13,612,002,690.00…………………………(US $ 332,000,065.61)

Taxes (12%):……………………………………………….Php 8,167,201,614.00………………………. (US $ 199,200,039.37)

Operating Expenses:…………………………………..Php 29,881,068,305.09………………………..(US $ 728,806,544.03)

Operating Cost (30%):………………………………..Php 22,868,164,519.20…………………………(US $ 557,760,110.22)

Maintenance Cost (5%):……………………………..Php 3,811,360,753.20…………………………(US $ 92,960,018.37)

Taxes (12%):……………………………………………….Php 3,201,543,032.69…………………………(US$ 78,086,415.43)

Miscellaneous/Facilitation Expenses:…………Php 5,305,414,168.45…………………………(US $ 129,400,345.57)

NARRATIVE DESCRIPTION OF THE COMPANY:

BANGSAMORO AQUA-CULTURE AND HYDROPONICS DEV’T. CORP. duly registered with the Securities and
Exchange Commission on December 04, 2014 with Certificate Registration No. CS201434652 its primary
purposes are the following;

PRIMARY PURPOSE:

To engage, own, manage, operate, plan support, and administer programs, project or enterprise
particularly the modernized and technologically applied aquaculture and hydroponics farming and to
engage in export and import trading activities including seeds and culture techniques to develop the
business of fishing and trading of marine and agriculture products for domestic and export market and
also in general construction of agriculture and hydroponics building, fishpond, fish pen, fish cage and other
fishery technologies for the production of fish, shrimp, crustacean, mollusks and other seafood and
agricultural products such as vegetables, fruits, ornamental and herbal plants to produce the best seafood
and agriculture products in a pristine controlled environment in sea food breeding and agriculture
productive technology for the benefit of this Corporation.
SECONDARY PURPOSE:

1. To develop, manage, own, lease and operate agricultural lands, farms, pasture lands, ranches,
fishpond, fishpens, foreshore lands and similar fishing rights or concessions;

2. To engage in planting and cultivation of all corps, orchard, groves and all types of agricultural or
farm products.

3. To engage in raising, breeding cross-breeding and pasturing of cows, goats, carabaos, chickens
and other similar stocks, and in general to undertake or carry on all kinds of studies, experiments,
cultivation, storage and trading of all kinds of agriculture livestock’s and fishery product and its
by-products but not limited to industrial processing plant for livestock’s and fishery feeds.

CARDAVA PROJECTS

The vision is to establish a model and decent, productive and environmentally sound Aquaculture
and Hydroponics projects and other related livelihood and services through proper and sustainable
management as a tool in alleviating poverty. To attain its vision, its missions are to improve the standard
of living in the municipality and rural areas to fund and develop economically viable,
environmentally sound, fully integrated mass-housing and agro-based humanitarian livelihood projects
and to resolve every undertaking with a high degree of sincerity, dedication and commitment to the
service and benefit of the Bangsamoro People towards growth, peace, unity and development.

Since its inception, the Corporation has envision to put up Banana Chips plants and Plantation of Cardava
with warehouse, each of location needs of more or less 1,000 has. to sustain the operation of Banana Chips
Plants at the amount of Php 315,000,000.00 each location : the following are selected location

(a) Agusan Del Sur Site; In partnership with Kabaohan Farmers Producers Cooperative

Development of 2,836 has. Approved CAD-T R13-BUN-0909-136 belong to Monobo Tibe located at
Sittio Kabaohan, Bunawan Brook, Bunawan, Agusan Del Sur.

(b) Maguindanao Site; In partnership with Southwestern Mindanao Landowners Development Assn.,
Inc.

Development of more or less 1,000 has. Ancestral Domain Land (NCIP) concessioner of
Southwestern Mindanao Landowners Development Assn., Inc. Cardava Plantation with warehouse
and Banana Chips Plants located at Sittio Barongis, Mirab, North Upi, Maguindanao.

(c) Lanao Del Sur Site:

(d) Basilan Site:

(e) Sulu Site:

(f) Tawi-Tawi Site;

The officers of the Corporation are the following:

MR. ARMANDO T. SANSO

President/Chairman

LAKIMAN A. TINGLI
Vice-President/COO

VICENTE M. ALI
VP for Finance

MOHAMMAD E. KAMAM
Admin/Secretary

ROLANDO A. STA.ANA
General Manager and
VP-International Business Development

JACOB H. PALAO
VP-Internal/External Affairs

KAHARUDIN A. HUSSAIN
VP-Programs and Projects

ABUHORAIRAH Z. GUIALAB
Treasurer

DARIEF A. LABAN
Internal Auditor

SOLAIMAN B. ALI
Spiritual Adviser

ABDULBASIT M. LAPEDSING
Liaison Officer
Project Implementation Schedule: The pre-construction phase to include land acquisition, acquisition of legal
permits, relocation survey, site preparation survey, topographic survey, soil investigation and preparation of
plan will be implemented within four (4) months. The construction phase will be implemented within twelve
(12) months. The implementation of Aquaculture and Hydroponics Farming will take about eight (8) months
to include harvest time.

STAGE OF FUNDING:

New Market Feasibility: The market feasibility of Aquaculture:

(a) On-going commercial fishing in many areas is not as sustainable as it was due to over fishing and
population of the world’s waterways;

(b) The Aquaculture industry worldwide is expanding rapidly to meet the increasing global demand and this
demand is accelerating due to the spread of bovine disease in Europe;

(c) There is a high demand of Asian government for fingerlings deployment as part of the world ocean
stocking program;

(d) There is also a rapidly growing demand for fingerlings and prawn larvae for grow out;

(e) Approximately 80% of the total wild production of Australian fish is for export;

(f) Aqua-culture activity accounted for 29% of the total value of Australian fish production in 2000 generating
Aus$678 Million in that year;

(g) Japan is the world’s largest consumer of sea food in a prime market for aquaculture fin-fish grouper,

(h) Japan is considered as one of the largest buyer of aquaculture products considering the recent tsunami
that occurred in this country and

(i) Other markets are rapidly emerging in other parts of the world particularly China. The market viability of
hydroponics:

(a) Hydroponics costs are expected to decrease as sales continue to increase and these systems become
more commercialized;

(b) Fast and flexible hydroponics cropping period (4 months);

(c) Allows growers to quickly change production to take advantage of market conditions,

(d) Double cropping to produce two crops per year from one place and

(e) The annual net income per 1/3 acre of the aqua farm project will be U.S. $40,000. The Aquaculture and
Hydroponics Industry worldwide is expanding rapidly to meet the increasing global demand of wet markets,
hotels, restaurants and other institutional organizations.
 Technical Feasibility: Viewed from the project development master plan’s schedule of activities, it is
conceived that the technical feasibility of the project comes into effect with the holistic approach in
community development a fully integrated system of land development incorporating all the project
amenities auxiliary support system facilities and infrastructure necessary for the build-up of the major
income-generating livelihood projects (aqua farm) and in the full-scale training of selected management staff
and technical personnel leading ultimately to the full operation or production process of the project. There is
no problem as to the availability of required manpower and other facilities. The holding company has ready
sources of the required manpower and other facilities. The holding company has experts in Aquaculture and
Hydroponics Farming (otherwise called as Aquaponics). An efficient communication system will be
established to achieve better coordination of project operation and management activities. The line of
communication will be opened 24 hours at the Head Office.

Financial Feasibility:

The project will require a total cash investment of Php 111,413,697,537.54 (US$ 2,717,407,257.01) for the
following:

Infra-Project Cost …………………………..Php 76,227,215,064.00…………………….(US $ 1,859,200,367.41)

Operating Cost …………………………..Php 29,881,068,305.09…………………….(US $ 728,806,544.03)

Project Facilitation Expenses…………….Php 5,305,414,168.45……………………..(US $ 129,400,345.57)

FINANCIAL ANALYSIS

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Average

Return on Assets (ROA) = 0.05% 0.48% 3.50% 3.50% 3.20% 3.20% 3.20% 2.45%

Return on Equity (ROE) 0.01% 0.11% 8.19% 8.28% 7.72% 7.68% 11.07% 6.15%

Profit Margin 3.87% 26.88% 41.21% 45.17% 47.61% 50.80% 53.59% 38.45%

Return on Investment
(ROI) 0.04% 0.42% 30.90% 30.71% 28.59% 28.41% 28.04% 21.02%

Assets Turnover Ratio 1.04% 1.56% 7.50% 6.80% 6.00% 5.60% 5.23% 4.82%
Source of Funds: The funds will be sourced from Middle East Group of Investor working worldwide.

Potential Project Risks and Concerns: Financial investment risks are negligible. The expected economic
benefits are projected to outweigh the total capital investment.

Project Justification and Recommendation: 1) the project is feasible financially due to its return on
investment of 21.02%. 2) The profit potential of commercial aquaponics is increased due to the availability
of free nutrients for the plants, lower water requirements, elimination of a separate bio filter in some
aquaponic design approaches, less water quality monitoring and shared costs for operation and
infrastructure. In addition, the plant crops cannot be sprayed with chemical herbicides or pesticides, so they
can be marketed as “spray free”, which brings potentially higher profits. 3) It is technically feasible.4) There
is a high global demand for products of Aquaculture and Hydroponics.5) It will employ a lot of people. 6) The
holding company has experts in Aquaculture and Hydroponics Farming (otherwise called as Aquaponics).

In view of the foregoing premises, this humanitarian project is highly recommended for implementation and
favorable funding support.