Jolly Boy

Ocean’s 5 Stefano Di Genua Julia Goessler Shirley Liu Leo Tumwattana Jon Yau A jolly great investment opportunity in China

Vision To become the leading ice cream brand in Northeast China

Jolly Boy Success Strategy

Capture the Mass Premium segment in Northeast China with great potential.

Existing operations and extensive distribution network .

Experienced management and strong relationships .

IPO in 3 years can give you a return of 15 times the initial investment

Investment highlights IRR of 118% after 3 years

Agenda

The key Jolly Boy differentiations Small Niche Market Low Margin Flexible Quality Pricing Capture the MASS PREMIUM market

Timeline Clear timeline for future growth

Agenda

Ice Cream Market - China China has a HUGE ice cream market potential

Ice cream market is growing by 9% annually

Income is rising rapidly – 10% per year

Rising demand for dairy products

As a result:

More than 73% of Chinese ate ice cream in 2006!

(China Marketing Media Study 2006)

Per Capita Per Year Ice Cream Consumption Source: Agriculture and Agri-Food Canada Huge room for future growth

China’s North East Region Over 100 million people in Northeast China Northeast China has perfect market conditions Harbin Beijing Heilongjiang Jilin Shanghai Changchun Changchun GDP per capita RMB 21,000 Ranked 52 out of 650 Chinese cities Harbin GDP per capita RMB 22,000 Ranked 50 out of 650 Chinese cities Jilin Province’s ice cream market size: 400,000 tons

Agenda

Competitive Landscape Sources: Sinomonitor International Yili 15% Nestle 10% Walls 10% Jilin market size: 400,000 tons/annum No dominant player in industry Meadow 10% Mengniu 10% Jolly Boy 45% 168,000 tons

Products Yili, Mengniu Quality Price 1.5 RMB 3.0 RMB Fragmented Domestic Players Nestle, Walls, Meadow Jolly Boy Chocolate Jolly Boy Genius Fruit Bars Jolly Boy Game Ice Bars MASS Less Expensive PREMIUM Quality Targeting the MASS PREMIUM market

Agenda

Marketing and Distribution Strong marketing & distribution already in place

Agenda

Key d ecision m aker MR MAO Mr. Mao the best man for success Award-winning Management Connections With Distribution Channels Market Expertise

Ownership Breakdown Highly committed founders No one owning more than 3.5% stake

Agenda

Proposed Ownership Breakdown

Proposed Ownership Breakdown Offering great ownership opportunity Percent ownership offered to investor(s) 7.4%

Investment Keynotes IRR of 118% (based on an exit in 2009) Break even within 13 months IPO return of 15 times initial investment * 2009 dividends = 150% of initial investment *Based on projections and exit value in 2009

Projected Annual Profits Profits to grow by over 50% per year

Profit Sensitivity Analysis (versus sale flux)

Profit Sensitivity Analysis (versus sale flux) IRR 118%

Profit Sensitivity Analysis (versus sale flux) IRR 89.8%

Profit Sensitivity Analysis (versus sale flux) IRR 138.2%

Usage Advertising Expansion

Summary – Strategy for Success

Jolly Boy Ice Cream

Jolly Boy Projections 2006 2007 2008 2009 Sales Cases 1,624 4,048 6,072 9,107 Units 66,768 165,840 248,760 373,140 Gross Revenue (RMB 000's) 74,021 186,533 279,799 419,699 Variable Material Cost (47,394) (101,845) (152,768) (229,152) Variable Manufacturing Cost (4,154) (10,189) (13,807) (20,333) Other 0 0 0 0 Gross Profit 22,473 74,499 113,224 170,214 Per Case 13.84 18.40 18.65 18.69 As % of Gross Revenue 30.4% 39.9% 40.5% 40.6% Operating Expenses Sales & Distribution (3,126) (10,631) (16,961) (28,510) Primary Distribution (566) (1,200) (1,915) (2,987) Fleet (2,361) (5,774) (8,360) (12,245) Advertising (5,922) (14,923) (22,384) (33,576) Fixed Mfg. Cost (5,972) (10,862) (14,005) (15,222) General & Administrative (3,022) (4,266) (6,216) (8,270) Research & Development (2,221) (14,923) (22,384) (29,379) Total Operating Expenses (23,190) (62,579) (92,225) (130,189) As % of Gross Revenue 31.3% 33.5% 33.0% 31.0% Operating Profit Before Tax (717) 11,920 20,999 40,025 As % of Gross Revenue -1.0% 6.4% 7.5% 9.5% Tax 0 0 0 0 Net Operating Profit After Tax (717) 11,920 20,999 40,025 Investor Cash Flows Investment (2,000) 29,648 Dividends 0 0 0 0 0 Exchange Rate 8.0 7.2 6.5 5.8 5.2 US$ Cash Flow ($250) $0 $0 $0 $5,649 Investor IRR 118.0%

Assumptions Investment 2,000 PE Ratio 10.0 Existing Capital 25,000 Payout Ratio 85.0% Total Capital 27,000 2009 Dividend 2,520 Ownership Interest 7.41%

Exchange Rate Sensitivity Analysis Worst Case Negative Case Base case IRR 96.2% 105.7% 118.0%

Management Structure Investor to receive USD 5.6 Million in 2009 2006 2007 2008 2009 FCF of JollyBoy (RMB ‘000) (717) 11,920 20,999 40,025 Investment (RMB ‘000) - 29,648 Dividends (RMB ‘000) - - - - Exchange rate (RMB:USD) 8.0 7.2 6.5 5.8 5.2 USD cash flow (USD ‘000) (250) - - - 5,649

Dividend Policy

No dividends for the first three years

Raise funds for Harbin City plant

2009 dividend alone enough to repay initial capital invested

3 Products Range of products targets low, middle and high-end RMB New Zealand Premium chocolate coated bars 3.0 “ Genius” fruit ice bars 1.5 “ Game” ice milk bars 2.0

Projected Annual Revenue Revenue increases by 467% by 2009

Dairy Supply in Northeast China Enough local dairy supply for Jolly Boy’s lower range ice creams Source: www.nenet.com.cn Northeast has the largest production capacity and is increasing at 25% a year

Weather and Seasonality