Wood Chip and Wood Pellet Plant Feasibility Study - Town of ...

AppendicesABCDEFinancial Pro Forma StatementsPellet Line QuoteLocal Biomass Quantities and PricesCost and Payback CalculationsPlant Schematic LayoutCBCL Limited Energy ServicesTable of Contents ii

predominately for industrial pellets for power and heat generation and the prices being offered ($160 US/tonne delivered) aren’t high enough to make the plant viable. The residential market delivered price inEurope of over $350 per tonne suggests that there is room for negotiation with European buyers but theonly prices offered so far are too low. The US market in the northeast does not appear to be sufficientlydeveloped yet to have increased the fuel demand, and price, to a level that will allow pellets from thisplant to be competitive.A complementary woodchip operation could be developed. The capital requirements are much lower butso are the margins between the cost of raw material and the price paid for woodchips in the local area.Long distance transportation costs are high for this low energy density fuel so the customer base musttypically be within 150 km of the source. There are a limited number of potential woodchip fuelcustomers within this range and the potential for market growth is limited. The woodchip operation couldalso draw raw biomass away from the pellet business which could be a problem if availability becomeslimited.CBCL Limited Energy Services Executive Summary 4

The most important content of these standards regarding pellets are described in Table 7 below.Table 7.Commonly Used StandardsCBCL Limited Energy Services Product Description 12

3.2 Wood Chips3.2.1 European StandardThe wood-chip fuel must conform to the following specification:SIZE CLASSIFICATIONCHIPMAXIMUM % PARTICULATE SIZEMAXIMUM EXTREMESDESIGNATION 63 mm 10 25G120 < 1 mm 1 – 63 mm 63 – 100 mm > 100 mm 12 30G150 < 1 mm 1 – 100 mm 100 – 130 mm > 130 mm 15 40MOISTURE CONTENT CLASSIFICATIONCHIPDESIGNATIONMOISTURE CONTENT IN % (WET BASIS)MC DEFINITIONW20 < 20 Air DriedW30 20 – 30 Undercover StoredW35 30 – 35 Limited Undercover StoredW40 35 – 40 WetW50 40 – 50 GreenMOISTURE DENSITY CLASSIFICATIONCHIPDESIGNATIONMATERIAL DENSITY IN KG/M 3DENSITY DEFINITIONS160 < 160 LowS200 160 – 250 MediumS250 > 250 HighASH CONTENT CLASSIFICATIONCHIPDESIGNATIONASH CONTENT AS % OF FUEL WEIGHTASH CONTENT DEFINITIONA1 < 1 LowA2 > 1 HighThe above definitions have been extracted from ONORM M7 133 and DIN 66 165 specifications forwood chip fuel.CBCL Limited Energy Services Product Description 13

6 ECONOMIC BENEFITSThe economic benefits associated with the development of a biomass fuel business in the AnnapolisDigby region are several:.1 Woodlot owners in the region will be provided with an additional market for their harvestedbiomass, including residual material that is currently left in the forest..2 Woodlot harvesting contractors will see an increase in business to meet the increased demand forbiomass..3 Increased harvesting activity will lead to increased employment levels in the harvesting business..4 Increased harvesting activity will also lead to increased business for local trucking companiesengaged to haul biomass to the new business and to transport processed fuel to markets..5 The availability of a lower cost convenient heating fuel in the local area should encourage thedevelopment of a local market for increased quantities of biomass fuel. Residents, businesses, andinstitutions in the local area that take advantage of this new fuel source will see their energy costsreduced, thus freeing up money to spend in the local economy..6 An increased number of biomass fired appliances in the local area should lead to an increase inthe development of local businesses to sell and service this type of appliance with acommensurate increase in employment. The local community college in Lawrencetown isoffering a renewable energy technology program. Graduates of this program would be wellqualified for jobs in the biomass heating appliance business..7 Development of a biomass fuel business that is progressive should eventually lead to additionalbusiness creation through research into and development of new biomass derived fuel products aswell as increased markets..8 Businesses that switch to biomass fuel from fossil fuels will significantly reduce their greenhousegas emissions. The reduction in emissions can be certified as an emission reduction credit whichwould have a small value on current voluntary trading markets in North America and highervalues in Europe where cap and trade systems are more established. The value of these emissionreduction credits will produce an additional revenue source for biomass fuel customers..9 The provincial government silvaculture fee could be used to encourage and support greatermanagement of woodlots with the resultant thinning waste offering a great source of raw materialfor the new business.CBCL Limited Energy Services Economic Benefits 25

7 RISKSAs with any new business venture, there are some inherent risks associated with this business. Some ofthe most significant are as follows:.1 Availability of Raw Biomass – local woodlot owners and contractors must be convinced of thelong term viability of the business before they will commit to long term supply contracts.Contractors in particular will be initially cautious since they will be faced with investment costsfor the new equipment needed to obtain the additional biomass fraction and bring it to the newbusiness for processing..2 Availability of Investment Capital – Investment capital in excess of $3 million dollars will likelybe needed to set up the business..3 Availability of Biomass Fuel Markets – although the local market shows good potential forgrowth, at least initially it will be too small to absorb much of the new business’ production.Export markets will be needed in the short term to sustain the business until the local marketgrows. Export contracts can be difficult to arrange and payment can be slow and complicated.This could result in cash flow problems during the initial operational phase..4 Biomass processing can be a somewhat hazardous endeavour and fires are not uncommon. A firecould put a business out of production for an extended period and jeopardize customer relations ifalternate supplies can’t be arranged.CBCL Limited Energy Services Risks 26

8 CONCLUSIONSThe high cost of fuel oil and our high level of dependence on it in this province as a heating fuel has ledmany people to explore alternative options to provide building heating. The use of biomass as a heatingfuel has been common in Nova Scotia as long as people have lived here due to the cold winters andabundant forests. Wood fuel for heating purposes is still accomplished primarily with wood stoves and isconsidered more of a rural tradition. Our province, like the rest of Canada, is becoming increasinglyurban, however, which presents problems for the traditional wood burning practices due to air qualityconcerns from particulate emissions when many woodstoves are operating in a small area. City dwellersalso have less space with which to receive, split, stack, and store firewood. Wood pellets offer thealternative to fuel oil that many homeowners are looking for. The fuel is compact and can be stored easilyin any dry location, the appliances can run automatically, and the particulate emissions are very low.Our payback analysis in appendix D shows the costs and savings associated with switching from fuel oilto wood pellets for a typical residence and a typical school. The residential savings of over $1300 andpayback of between 6 and 8 years could be improved upon if government incentives currently offeredonly for supplemental pellet stoves could be extended to whole home pellet boilers and furnaces. Theseappliances are being developed and manufactured locally and should be supported in this manner in orderto grow the local market for pellets and make a home bulk delivery system viable.The analysis for the school shows very substantial savings compared with fuel oil and a payback of lessthan 2 years. Even if the annual maintenance cost of the pellet boiler was several times that of a fuel oilboiler, the savings would still be substantial and the payback very rapid. A locally manufacturedcommercially sized pellet boiler is not expected to be available for another two (2) years but Canadianmade boilers in the correct size range are currently available and transportation companies here have theequipment to transport and deliver bulk pellet loads. The Nova Scotia Community College has expressedinterest in biomass fuel at some of its campuses as have some district health authorities. The desire tohave an institutional market for pellet fuels in Nova Scotia seems to be here but it may need somepolitical assistance to make it reality.European export markets for pellets can be found easily. Several pellet mill equipment vendors in Europehave indicated that they can also broker any plant production to industrial clients in Europe. The averageprices, however, don’t seem to be high enough to cover the anticipated cost of production at the plant.The operating cost calculation in Appendix D shows an operating cost per tonne of approximately $147per tonne for a 30,000 tonne/yr plant. The export price quoted to us of $160 US ($171 Cdn.) delivered inthe UK leaves only $24/tonne to cover transportation and plant mark-up. This is insufficient due to thedistances involved and the transport and handling costs. Our financial analysis (Appendix A) indicatesthat a pellet price of $180/tonne fob plant is required to provide a desirable rate of return to attractinvestors to the project. A realistic price landed in Europe for pellets from this plant would therefore becloser to $230/tonne which is about 35% higher than the initial price we were quoted.The financial analysis also showed that $40/tonne was close to the maximum price that could be paid forraw biomass delivered to the plant. This assumes a roadside price of $30/tonne and $10/tonne forCBCL Limited Energy Services Conclusions 27

transportation, which is consistent with the prices shown in section 2.1. Existing contractor equipment canbe used to bring round wood to the roadside for sale as sawlogs or pulpwood and initially the plant wouldhave to depend on this equipment to harvest additional roundwood from unmerchantable species toachieve the raw material volumes required at the expected costs. Additional material from the recovery ofharvesting waste would be available but would require contractor investment in new equipment such asslash bundlers at a considerable expense. Contractors may be unwilling to make this investment if theroadside price remains at $30/tonne unless the price paid to woodlot owners for this material is reduced sothe contractors can make sufficient profit on this material to justify their investment in the newequipment.CBCL Limited Energy Services Conclusions 28

Appendix AFinancial Pro Forma StatementsCBCL Limited Energy ServicesAppendices

Annapolis Digby Pellet PlantEarnings Statement1 RevenuePellet Production30,000 tonnesNet Electrical Power output kw0 kwGross Plant Heat Rate12,500 btu/kwhrDomestic Pellet Sales5,000 tonnesRate180.0000 $/tonneAnnual escalation 2.00%Export Pellet Sales25,000 tonnesRate180.0000 $/tonneAnnual escalation 2.00%Woodchip salestonnesRate$/tonneAnnual escalation 2.00%Carbon Credits $/tonne0 $/tonneNSP Intensity Factor0.80 tCO2e/mwhr0.00 $/mwhrInitial availability of plant on an annual basis 100.0%0.000%2 Annual O&M Cost Estimate(All costs in 2008 CAN$)Operating and Maintenance - FixedManager 50,000taxes 10,000electricity 591,000Maintenance Contract 50,000Operators (21 total) 630,000Consultants 0Insurance 15,000General Supplies 100,000Miscellaneous 30,000 31.76%Fuel 4,500communications 2,000PRICE $/TONNE 40Fuel Heating Value btu/lb 0Tonnes/year 72,000Total Fuel 2,880,000.0Total costs - 1st year 4,363,000Annual escalation 2.0%

Annapolis Digby Pellet Plant3 Accounts receivableCollection of revenue as follows:Current 0.0%30 days 100.0%60 days 0.0%Provision for Bad debts 0.0%100.0%Total annual revenue - amount in A/R at end of yea 8.3%4 Capital CostsNon depreciable 250,000Depreciable 4,000,000Total 4,250,000Depreciation Rates - Straight line - years 20.0Capital Additions Year Amount-Depreciation on capital additions 7 0line 14 04 Financing of Capital CostsDebt 70.0% 2,975,000Equity / Internal 30.0% 1,275,000Minimal rate of return on equity 10.0%(Discount rate)Financing of Capital Additions Loan #2Debt 50.0% 0Equity 50.0% 0Terms of DebtLoan #1 Loan #2Interest Rate 7.50% 7.50%Term - years debt to be paid 30 0Paid in # of periods per year 4 4PvFuture value of debt at end of termFv 0 0Payments at beginning (1) or end Type 0 0

Annapolis Digby Pellet Plant5 Bank Operating LoanInterest on bank debt 10.0%6 Accounts payablePayment of expenses under the following termsCurrent 0.0%30 days 100.0%60 days 0.0%100.0%Total annual expenses, amount in A/P at end of ye 8.3%7 Corporate tax rate 40.0%Capital Cost Allowance Rate 40.0%Payable in 1808 DividendsNet minimum retained earnings: 0- balance paid out as dividends in following year

Projected Statement of EarningsYear 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034RevenueDomestic Pellet Sales 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000Rate 180.0000 183.6000 187.2720 191.0174 194.8378 198.7345 202.7092 206.7634 210.8987 215.1167 219.4190 223.8074 228.2835 232.8492 237.5062 242.2563 247.1014 252.0435 257.0843 262.2260 267.4705 272.8199 278.2763 283.8419 289.5187Total 900,000 918,000 936,360 955,087 974,189 993,673 1,013,546 1,033,817 1,054,493 1,075,583 1,097,095 1,119,037 1,141,418 1,164,246 1,187,531 1,211,282 1,235,507 1,260,217 1,285,422 1,311,130 1,337,353 1,364,100 1,391,382 1,419,209 1,447,594Export Pellet Sales 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000Rate 180.0000 183.6000 187.2720 191.0174 194.8378 198.7345 202.7092 206.7634 210.8987 215.1167 219.4190 223.8074 228.2835 232.8492 237.5062 242.2563 247.1014 252.0435 257.0843 262.2260 267.4705 272.8199 278.2763 283.8419 289.5187Total 4,500,000 4,590,000 4,681,800 4,775,436 4,870,945 4,968,364 5,067,731 5,169,086 5,272,467 5,377,917 5,485,475 5,595,184 5,707,088 5,821,230 5,937,654 6,056,408 6,177,536 6,301,086 6,427,108 6,555,650 6,686,763 6,820,499 6,956,909 7,096,047 7,237,968Woodchip sales 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Rate 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Carbon Credits 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Capacity Payment 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total potential revenue 5,400,000 5,508,000 5,618,160 5,730,523 5,845,134 5,962,036 6,081,277 6,202,903 6,326,961 6,453,500 6,582,570 6,714,221 6,848,506 6,985,476 7,125,185 7,267,689 7,413,043 7,561,304 7,712,530 7,866,780 8,024,116 8,184,598 8,348,290 8,515,256 8,685,561% available 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%Gross revenue 5,400,000 5,508,000 5,618,160 5,730,523 5,845,134 5,962,036 6,081,277 6,202,903 6,326,961 6,453,500 6,582,570 6,714,221 6,848,506 6,985,476 7,125,185 7,267,689 7,413,043 7,561,304 7,712,530 7,866,780 8,024,116 8,184,598 8,348,290 8,515,256 8,685,561ExpensesOperating and maintenance 4,363,000 4,450,260 4,539,265 4,630,051 4,722,652 4,817,105 4,913,447 5,011,716 5,111,950 5,214,189 5,318,473 5,424,842 5,533,339 5,644,006 5,756,886 5,872,024 5,989,464 6,109,253 6,231,438 6,356,067 6,483,188 6,612,852 6,745,109 6,880,011 7,017,612Interest on debt 222,359 220,224 217,925 215,448 212,780 209,907 206,811 203,478 199,886 196,018 191,852 187,364 182,530 177,323 171,715 165,673 159,166 152,157 144,607 136,475 127,716 118,281 108,118 97,171 85,380Depreciation and amortization 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 0 0 0 0 0Amortization capital additions 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total expenses 4,785,359 4,870,484 4,957,190 5,045,498 5,135,432 5,227,011 5,320,258 5,415,193 5,511,836 5,610,207 5,710,325 5,812,206 5,915,869 6,021,329 6,128,600 6,237,697 6,348,630 6,461,410 6,576,046 6,692,542 6,610,904 6,731,133 6,853,227 6,977,183 7,102,992Net Income before corporate taxes 614,641 637,516 660,970 685,025 709,702 735,025 761,019 787,709 815,124 843,293 872,245 902,015 932,637 964,147 996,585 1,029,992 1,064,413 1,099,893 1,136,484 1,174,238 1,413,212 1,453,465 1,495,063 1,538,073 1,582,569Corporate taxes 245,857 255,006 264,388 274,010 283,881 294,010 304,408 315,084 326,050 337,317 348,898 360,806 373,055 385,659 398,634 411,997 425,765 439,957 454,594 469,695 565,285 581,386 598,025 615,229 633,028Net income 368,785 382,510 396,582 411,015 425,821 441,015 456,611 472,626 489,075 505,976 523,347 541,209 559,582 578,488 597,951 617,995 638,648 659,936 681,890 704,543 847,927 872,079 897,038 922,844 949,542Retained earnings - beginning 368,785 382,510 396,582 411,015 425,821 441,015 456,611 472,626 489,075 505,976 523,347 541,209 559,582 578,488 597,951 617,995 638,648 659,936 681,890 704,543 847,927 872,079 897,038 922,844Dividends 368,785 382,510 396,582 411,015 425,821 441,015 456,611 472,626 489,075 505,976 523,347 541,209 559,582 578,488 597,951 617,995 638,648 659,936 681,890 704,543 847,927 872,079 897,038 922,844Retained earnings - end 368,785 382,510 396,582 411,015 425,821 441,015 456,611 472,626 489,075 505,976 523,347 541,209 559,582 578,488 597,951 617,995 638,648 659,936 681,890 704,543 847,927 872,079 897,038 922,844 949,542

Projected Balance SheetYear 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034ASSETSCash 700,550 891,888 1,081,470 1,269,142 1,454,732 1,638,058 1,818,922 1,997,110 2,172,393 2,344,522 2,513,228 2,678,222 2,839,191 2,995,800 3,147,683 3,294,450 3,435,677 3,570,910 3,699,654 3,821,382 3,935,521 3,841,454 3,738,517 3,625,993 3,503,111Accounts receivable 450,000 459,000 468,180 477,544 487,094 496,836 506,773 516,909 527,247 537,792 548,547 559,518 570,709 582,123 593,765 605,641 617,754 630,109 642,711 655,565 668,676 682,050 695,691 709,605 723,7971,150,550 1,350,888 1,549,650 1,746,685 1,941,826 2,134,894 2,325,695 2,514,019 2,699,640 2,882,314 3,061,775 3,237,740 3,409,900 3,577,923 3,741,449 3,900,091 4,053,431 4,201,018 4,342,365 4,476,947 4,604,197 4,523,504 4,434,208 4,335,598 4,226,908Capital AssetsNon depreciable 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000Depreciable 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,0004,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000Accumulated depreciation 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000 2,200,000 2,400,000 2,600,000 2,800,000 3,000,000 3,200,000 3,400,000 3,600,000 3,800,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000Net 4,050,000 3,850,000 3,650,000 3,450,000 3,250,000 3,050,000 2,850,000 2,650,000 2,450,000 2,250,000 2,050,000 1,850,000 1,650,000 1,450,000 1,250,000 1,050,000 850,000 650,000 450,000 250,000 250,000 250,000 250,000 250,000 250,000Total assets 5,200,550 5,200,888 5,199,650 5,196,685 5,191,826 5,184,894 5,175,695 5,164,019 5,149,640 5,132,314 5,111,775 5,087,740 5,059,900 5,027,923 4,991,449 4,950,091 4,903,431 4,851,018 4,792,365 4,726,947 4,854,197 4,773,504 4,684,208 4,585,598 4,476,908LIABILITIESAccounts payable 363,583 370,855 378,272 385,838 393,554 401,425 409,454 417,643 425,996 434,516 443,206 452,070 461,112 470,334 479,740 489,335 499,122 509,104 519,287 529,672 540,266 551,071 562,092 573,334 584,801Corporate taxes 245,857 255,006 264,388 274,010 283,881 294,010 304,408 315,084 326,050 337,317 348,898 360,806 373,055 385,659 398,634 411,997 425,765 439,957 454,594 469,695 565,285 581,386 598,025 615,229 633,028609,440 625,861 642,660 659,847 677,435 695,435 713,861 732,727 752,046 771,833 792,104 812,876 834,166 855,993 878,374 901,332 924,887 949,062 973,880 999,367 1,105,550 1,132,457 1,160,118 1,188,564 1,217,829Long term debt 2,947,326 2,917,517 2,885,408 2,850,823 2,813,570 2,773,444 2,730,222 2,683,667 2,633,520 2,579,505 2,521,324 2,458,655 2,391,152 2,318,442 2,240,123 2,155,763 2,064,896 1,967,020 1,861,595 1,748,037 1,625,720 1,493,967 1,352,052 1,199,190 1,034,537Total liabilities 3,556,765 3,543,378 3,528,068 3,510,670 3,491,005 3,468,879 3,444,084 3,416,393 3,385,565 3,351,338 3,313,428 3,271,531 3,225,318 3,174,434 3,118,498 3,057,096 2,989,784 2,916,082 2,835,475 2,747,404 2,731,270 2,626,424 2,512,170 2,387,754 2,252,366EQUITYCapital 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000Retained earnings 368,785 382,510 396,582 411,015 425,821 441,015 456,611 472,626 489,075 505,976 523,347 541,209 559,582 578,488 597,951 617,995 638,648 659,936 681,890 704,543 847,927 872,079 897,038 922,844 949,542Total equity 1,643,785 1,657,510 1,671,582 1,686,015 1,700,821 1,716,015 1,731,611 1,747,626 1,764,075 1,780,976 1,798,347 1,816,209 1,834,582 1,853,488 1,872,951 1,892,995 1,913,648 1,934,936 1,956,890 1,979,543 2,122,927 2,147,079 2,172,038 2,197,844 2,224,542Total Liabilities and Equity 5,200,550 5,200,888 5,199,650 5,196,685 5,191,826 5,184,894 5,175,695 5,164,019 5,149,640 5,132,314 5,111,775 5,087,740 5,059,900 5,027,923 4,991,449 4,950,091 4,903,431 4,851,018 4,792,365 4,726,947 4,854,197 4,773,504 4,684,208 4,585,598 4,476,908Return on InvestmentEarnings before tax 614,641 637,516 660,970 685,025 709,702 735,025 761,019 787,709 815,124 843,293 872,245 902,015 932,637 964,147 996,585 1,029,992 1,064,413 1,099,893 1,136,484 1,174,238 1,413,212 1,453,465 1,495,063 1,538,073 1,582,569Interest on long term debt 222,359 220,224 217,925 215,448 212,780 209,907 206,811 203,478 199,886 196,018 191,852 187,364 182,530 177,323 171,715 165,673 159,166 152,157 144,607 136,475 127,716 118,281 108,118 97,171 85,380Earnings before interest and tax 837,000 857,740 878,895 900,473 922,482 944,932 967,830 991,187 1,015,011 1,039,311 1,064,097 1,089,379 1,115,167 1,141,470 1,168,299 1,195,665 1,223,579 1,252,050 1,281,091 1,310,713 1,540,927 1,571,746 1,603,181 1,635,245 1,667,949Investment - Net debt & equity 4,250,000 4,591,110 4,575,026 4,556,990 4,536,838 4,514,391 4,489,459 4,461,833 4,431,292 4,397,594 4,360,481 4,319,671 4,274,864 4,225,734 4,171,930 4,113,074 4,048,759 3,978,544 3,901,956 3,818,485 3,727,580 3,748,647 3,641,046 3,524,090 3,397,034Return on Investment (ROI) before tax 19.69% 18.68% 19.21% 19.76% 20.33% 20.93% 21.56% 22.21% 22.91% 23.63% 24.40% 25.22% 26.09% 27.01% 28.00% 29.07% 30.22% 31.47% 32.83% 34.33% 41.34% 41.93% 44.03% 46.40% 49.10%Return on Investment (ROI) after tax 11.82% 11.21% 11.53% 11.86% 12.20% 12.56% 12.93% 13.33% 13.74% 14.18% 14.64% 15.13% 15.65% 16.21% 16.80% 17.44% 18.13% 18.88% 19.70% 20.60% 24.80% 25.16% 26.42% 27.84% 29.46%Return on equity (ROE) after tax 22.44% 23.27% 23.93% 24.59% 25.26% 25.93% 26.61% 27.29% 27.99% 28.68% 29.39% 30.09% 30.81% 31.53% 32.26% 33.00% 33.74% 34.49% 35.24% 36.00% 42.83% 41.08% 41.78% 42.49% 43.20%31.76%Net present value of investment (NPV) 4,458,728Net investment - equity 1,275,000Net positive (negative) return 3,183,728Total dividends paid during operation 10,453,604 9,749,062 9,067,171 8,407,235 7,768,588 7,150,592 6,552,641 5,974,153 5,414,571

Projected Statement of Cash FlowYear 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034Cash From OperationsNet Income 368,785 382,510 396,582 411,015 425,821 441,015 456,611 472,626 489,075 505,976 523,347 541,209 559,582 578,488 597,951 617,995 638,648 659,936 681,890 704,543 847,927 872,079 897,038 922,844 949,542Depreciation and amortization 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 0 0 0 0 0568,785 582,510 596,582 611,015 625,821 641,015 656,611 672,626 689,075 705,976 723,347 741,209 759,582 778,488 797,951 817,995 838,648 859,936 881,890 904,543 847,927 872,079 897,038 922,844 949,542Cash From FinancingBank loanAccounts payable 363,583 7,272 7,417 7,565 7,717 7,871 8,029 8,189 8,353 8,520 8,690 8,864 9,041 9,222 9,407 9,595 9,787 9,982 10,182 10,386 10,593 10,805 11,021 11,242 11,467Corporate taxes payable 245,857 9,150 9,382 9,622 9,871 10,129 10,398 10,676 10,966 11,267 11,581 11,908 12,249 12,604 12,975 13,363 13,768 14,192 14,636 15,102 95,589 16,101 16,639 17,204 17,798Debt 2,975,000Capital addition debt 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Capital 1,275,000Total cash provided 4,859,440 16,422 16,799 17,187 17,588 18,000 18,426 18,865 19,319 19,787 20,271 20,772 21,290 21,826 22,382 22,958 23,555 24,175 24,818 25,487 106,183 26,907 27,661 28,446 29,265Cash UsedAccounts receivable 450,000 9,000 9,180 9,364 9,551 9,742 9,937 10,135 10,338 10,545 10,756 10,971 11,190 11,414 11,642 11,875 12,113 12,355 12,602 12,854 13,111 13,374 13,641 13,914 14,192Land 250,000Buildings and equipment 4,000,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Debt repayment 27,674 29,809 32,108 34,585 37,253 40,126 43,222 46,556 50,147 54,015 58,181 62,669 67,503 72,710 78,319 84,360 90,867 97,876 105,426 113,558 122,317 131,752 141,915 152,862 164,653Dividends 0 368,785 382,510 396,582 411,015 425,821 441,015 456,611 472,626 489,075 505,976 523,347 541,209 559,582 578,488 597,951 617,995 638,648 659,936 681,890 704,543 847,927 872,079 897,038 922,844Total cash used 4,727,674 407,594 423,798 440,531 457,819 475,689 494,173 513,302 533,111 553,634 574,913 596,987 619,903 643,706 668,449 694,186 720,975 748,879 777,964 808,303 839,971 993,053 1,027,635 1,063,813 1,101,689Net cash provided (used) 700,550 191,337 189,583 187,671 185,590 183,326 180,864 178,189 175,283 172,129 168,706 164,994 160,970 156,608 151,884 146,767 141,227 135,232 128,745 121,728 114,139 -94,067 -102,937 -112,523 -122,882Cash - beginning 700,550 891,888 1,081,470 1,269,142 1,454,732 1,638,058 1,818,922 1,997,110 2,172,393 2,344,522 2,513,228 2,678,222 2,839,191 2,995,800 3,147,683 3,294,450 3,435,677 3,570,910 3,699,654 3,821,382 3,935,521 3,841,454 3,738,517 3,625,993Cash - end 700,550 891,888 1,081,470 1,269,142 1,454,732 1,638,058 1,818,922 1,997,110 2,172,393 2,344,522 2,513,228 2,678,222 2,839,191 2,995,800 3,147,683 3,294,450 3,435,677 3,570,910 3,699,654 3,821,382 3,935,521 3,841,454 3,738,517 3,625,993 3,503,111

Projected Debt Repayment ScheduleLoan #1 Loan #2 Loan #3Interest rate on debt 7.50% 7.50% 0.00%Terms of repayment - years 30 0 0- no of payments in year 4 4 0No. of periods for payment of debt (Nper) 120 0 0Amount of debt 2,975,000 0 0Future balance of debt at end of term 0 0 0Payments due beginning (1) or end of period 0 0 0Period payment 62,508 #DIV/0! #DIV/0!Start Period 1 0 0Opening Additions Payment Interest Principal End Paid in YearPeriod Balance Balance Balance Interest Principal1 2,975,000 0 2,975,000 62,508 55,781 6,727 2,968,2732 2,968,273 0 2,968,273 62,508 55,655 6,853 2,961,4203 2,961,420 0 2,961,420 62,508 55,527 6,982 2,954,4384 2,954,438 0 2,954,438 62,508 55,396 7,113 2,947,326 222,359 27,6745 2,947,326 0 2,947,326 62,508 55,262 7,246 2,940,0806 2,940,080 0 2,940,080 62,508 55,126 7,382 2,932,6987 2,932,698 0 2,932,698 62,508 54,988 7,520 2,925,1788 2,925,178 0 2,925,178 62,508 54,847 7,661 2,917,517 220,224 29,8099 2,917,517 0 2,917,517 62,508 54,703 7,805 2,909,71210 2,909,712 0 2,909,712 62,508 54,557 7,951 2,901,76111 2,901,761 0 2,901,761 62,508 54,408 8,100 2,893,66012 2,893,660 0 2,893,660 62,508 54,256 8,252 2,885,408 217,925 32,10813 2,885,408 0 2,885,408 62,508 54,101 8,407 2,877,00114 2,877,001 0 2,877,001 62,508 53,944 8,564 2,868,43715 2,868,437 0 2,868,437 62,508 53,783 8,725 2,859,71216 2,859,712 0 2,859,712 62,508 53,620 8,889 2,850,823 215,448 34,58517 2,850,823 0 2,850,823 62,508 53,453 9,055 2,841,76818 2,841,768 0 2,841,768 62,508 53,283 9,225 2,832,54319 2,832,543 0 2,832,543 62,508 53,110 9,398 2,823,14420 2,823,144 0 2,823,144 62,508 52,934 9,574 2,813,570 212,780 37,25321 2,813,570 0 2,813,570 62,508 52,754 9,754 2,803,81622 2,803,816 0 2,803,816 62,508 52,572 9,937 2,793,88023 2,793,880 0 2,793,880 62,508 52,385 10,123 2,783,75724 2,783,757 0 2,783,757 62,508 52,195 10,313 2,773,444 209,907 40,12625 2,773,444 0 2,773,444 62,508 52,002 10,506 2,762,93726 2,762,937 0 2,762,937 62,508 51,805 10,703 2,752,23427 2,752,234 0 2,752,234 62,508 51,604 10,904 2,741,33028 2,741,330 0 2,741,330 62,508 51,400 11,108 2,730,222 206,811 43,22229 2,730,222 0 2,730,222 62,508 51,192 11,317 2,718,90530 2,718,905 0 2,718,905 62,508 50,979 11,529 2,707,37731 2,707,377 0 2,707,377 62,508 50,763 11,745 2,695,63232 2,695,632 0 2,695,632 62,508 50,543 11,965 2,683,667 203,478 46,55633 2,683,667 0 2,683,667 62,508 50,319 12,190 2,671,47734 2,671,477 0 2,671,477 62,508 50,090 12,418 2,659,05935 2,659,059 0 2,659,059 62,508 49,857 12,651 2,646,40836 2,646,408 0 2,646,408 62,508 49,620 12,888 2,633,520 199,886 50,14737 2,633,520 0 2,633,520 62,508 49,378 13,130 2,620,39038 2,620,390 0 2,620,390 62,508 49,132 13,376 2,607,01439 2,607,014 0 2,607,014 62,508 48,882 13,627 2,593,38740 2,593,387 0 2,593,387 62,508 48,626 13,882 2,579,505 196,018 54,01541 2,579,505 0 2,579,505 62,508 48,366 14,143 2,565,36342 2,565,363 0 2,565,363 62,508 48,101 14,408 2,550,95543 2,550,955 0 2,550,955 62,508 47,830 14,678 2,536,277

44 2,536,277 0 2,536,277 62,508 47,555 14,953 2,521,324 191,852 58,18145 2,521,324 0 2,521,324 62,508 47,275 15,233 2,506,09046 2,506,090 0 2,506,090 62,508 46,989 15,519 2,490,57147 2,490,571 0 2,490,571 62,508 46,698 15,810 2,474,76148 2,474,761 0 2,474,761 62,508 46,402 16,106 2,458,655 187,364 62,66949 2,458,655 0 2,458,655 62,508 46,100 16,408 2,442,24650 2,442,246 0 2,442,246 62,508 45,792 16,716 2,425,53051 2,425,530 0 2,425,530 62,508 45,479 17,030 2,408,50152 2,408,501 0 2,408,501 62,508 45,159 17,349 2,391,152 182,530 67,50353 2,391,152 0 2,391,152 62,508 44,834 17,674 2,373,47854 2,373,478 0 2,373,478 62,508 44,503 18,006 2,355,47255 2,355,472 0 2,355,472 62,508 44,165 18,343 2,337,12956 2,337,129 0 2,337,129 62,508 43,821 18,687 2,318,442 177,323 72,71057 2,318,442 0 2,318,442 62,508 43,471 19,037 2,299,40458 2,299,404 0 2,299,404 62,508 43,114 19,394 2,280,01059 2,280,010 0 2,280,010 62,508 42,750 19,758 2,260,25260 2,260,252 0 2,260,252 62,508 42,380 20,129 2,240,123 171,715 78,31961 2,240,123 0 2,240,123 62,508 42,002 20,506 2,219,61762 2,219,617 0 2,219,617 62,508 41,618 20,890 2,198,72763 2,198,727 0 2,198,727 62,508 41,226 21,282 2,177,44564 2,177,445 0 2,177,445 62,508 40,827 21,681 2,155,763 165,673 84,36065 2,155,763 0 2,155,763 62,508 40,421 22,088 2,133,67666 2,133,676 0 2,133,676 62,508 40,006 22,502 2,111,17467 2,111,174 0 2,111,174 62,508 39,585 22,924 2,088,25068 2,088,250 0 2,088,250 62,508 39,155 23,354 2,064,896 159,166 90,86769 2,064,896 0 2,064,896 62,508 38,717 23,791 2,041,10570 2,041,105 0 2,041,105 62,508 38,271 24,238 2,016,86771 2,016,867 0 2,016,867 62,508 37,816 24,692 1,992,17572 1,992,175 0 1,992,175 62,508 37,353 25,155 1,967,020 152,157 97,87673 1,967,020 0 1,967,020 62,508 36,882 25,627 1,941,39474 1,941,394 0 1,941,394 62,508 36,401 26,107 1,915,28775 1,915,287 0 1,915,287 62,508 35,912 26,597 1,888,69076 1,888,690 0 1,888,690 62,508 35,413 27,095 1,861,595 144,607 105,42677 1,861,595 0 1,861,595 62,508 34,905 27,603 1,833,99178 1,833,991 0 1,833,991 62,508 34,387 28,121 1,805,87079 1,805,870 0 1,805,870 62,508 33,860 28,648 1,777,22280 1,777,222 0 1,777,222 62,508 33,323 29,185 1,748,037 136,475 113,55881 1,748,037 0 1,748,037 62,508 32,776 29,733 1,718,30482 1,718,304 0 1,718,304 62,508 32,218 30,290 1,688,01483 1,688,014 0 1,688,014 62,508 31,650 30,858 1,657,15684 1,657,156 0 1,657,156 62,508 31,072 31,437 1,625,720 127,716 122,31785 1,625,720 0 1,625,720 62,508 30,482 32,026 1,593,69486 1,593,694 0 1,593,694 62,508 29,882 32,627 1,561,06787 1,561,067 0 1,561,067 62,508 29,270 33,238 1,527,82988 1,527,829 0 1,527,829 62,508 28,647 33,861 1,493,967 118,281 131,75289 1,493,967 0 1,493,967 62,508 28,012 34,496 1,459,47190 1,459,471 0 1,459,471 62,508 27,365 35,143 1,424,32891 1,424,328 0 1,424,328 62,508 26,706 35,802 1,388,52692 1,388,526 0 1,388,526 62,508 26,035 36,473 1,352,052 108,118 141,91593 1,352,052 0 1,352,052 62,508 25,351 37,157 1,314,89594 1,314,895 0 1,314,895 62,508 24,654 37,854 1,277,04195 1,277,041 0 1,277,041 62,508 23,945 38,564 1,238,47796 1,238,477 0 1,238,477 62,508 23,221 39,287 1,199,190 97,171 152,86297 1,199,190 0 1,199,190 62,508 22,485 40,023 1,159,16798 1,159,167 0 1,159,167 62,508 21,734 40,774 1,118,39399 1,118,393 0 1,118,393 62,508 20,970 41,538 1,076,855100 1,076,855 0 1,076,855 62,508 20,191 42,317 1,034,537 85,380 164,653

Tax CalculationYear 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034Net Income Before Tax 614,641 637,516 660,970 685,025 709,702 735,025 761,019 787,709 815,124 843,293 872,245 902,015 932,637 964,147 996,585 1,029,992 1,064,413 1,099,893 1,136,484 1,174,238 1,413,212 1,453,465 1,495,063 1,538,073 1,582,569Add:Depreciation and amort. 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 0 0 0 0 0Capital add. Amort. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Adjusted 814,641 837,516 860,970 885,025 909,702 935,025 961,019 987,709 1,015,124 1,043,293 1,072,245 1,102,015 1,132,637 1,164,147 1,196,585 1,229,992 1,264,413 1,299,893 1,336,484 1,374,238 1,413,212 1,453,465 1,495,063 1,538,073 1,582,569Deduct:Capital Cost Allowance 800,000 1,280,000 768,000 460,800 276,480 165,888 99,533 59,720 35,832 21,499 12,899 7,740 4,644 2,786 1,672 1,003 602 361 217 130 78 47 28 17 10Net tax deduct 800,000 1,280,000 768,000 460,800 276,480 165,888 99,533 59,720 35,832 21,499 12,899 7,740 4,644 2,786 1,672 1,003 602 361 217 130 78 47 28 17 10Taxable income 14,641 -442,484 92,970 424,225 633,222 769,137 861,486 927,990 979,293 1,021,794 1,059,346 1,094,275 1,127,993 1,161,361 1,194,913 1,228,989 1,263,811 1,299,532 1,336,267 1,374,108 1,413,134 1,453,418 1,495,035 1,538,056 1,582,559Taxes payable 5,857 -176,994 37,188 169,690 253,289 307,655 344,594 371,196 391,717 408,717 423,738 437,710 451,197 464,544 477,965 491,596 505,524 519,813 534,507 549,643 565,253 581,367 598,014 615,223 633,024Provision for corporate taxes 245,857 255,006 264,388 274,010 283,881 294,010 304,408 315,084 326,050 337,317 348,898 360,806 373,055 385,659 398,634 411,997 425,765 439,957 454,594 469,695 565,285 581,386 598,025 615,229 633,028Deferred taxes 240,000 432,000 227,200 104,320 30,592 -13,645 -40,187 -56,112 -65,667 -71,400 -74,840 -76,904 -78,142 -78,885 -79,331 -79,599 -79,759 -79,856 -79,913 -79,948 31 19 11 7 4Accumulated deferred 240,000 672,000 899,200 1,003,520 1,034,112 1,020,467 980,280 924,168 858,501 787,101 712,260 635,356 557,214 478,328 398,997 319,398 239,639 159,783 79,870 -78 -47 -28 -17 -10 -6Undepreciated Capital Cost - Beg. 3,200,000 1,920,000 1,152,000 691,200 414,720 248,832 149,299 89,580 53,748 32,249 19,349 11,610 6,966 4,179 2,508 1,505 903 542 325 195 117 70 42 25Additions 4,000,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 04,000,000 3,200,000 1,920,000 1,152,000 691,200 414,720 248,832 149,299 89,580 53,748 32,249 19,349 11,610 6,966 4,179 2,508 1,505 903 542 325 195 117 70 42 25CCA 800,000 1,280,000 768,000 460,800 276,480 165,888 99,533 59,720 35,832 21,499 12,899 7,740 4,644 2,786 1,672 1,003 602 361 217 130 78 47 28 17 10UCC End 3,200,000 1,920,000 1,152,000 691,200 414,720 248,832 149,299 89,580 53,748 32,249 19,349 11,610 6,966 4,179 2,508 1,505 903 542 325 195 117 70 42 25 15

Annapolis Digby Pellet PlantEarnings Statement1 RevenuePellet Production10,000 tonnesNet Electrical Power output kw0 kwGross Plant Heat Rate12,500 btu/kwhrDomestic Pellet Sales5,000 tonnesRate180.0000 $/tonneAnnual escalation 2.00%Export Pellet Sales5,000 tonnesRate180.0000 $/tonneAnnual escalation 2.00%Woodchip salestonnesRate$/tonneAnnual escalation 2.00%Carbon Credits $/tonne0 $/tonneNSP Intensity Factor0.80 tCO2e/mwhr0.00 $/mwhrInitial availability of plant on an annual basis 100.0%0.000%2 Annual O&M Cost Estimate(All costs in 2008 CAN$)Operating and Maintenance - FixedManager 50,000taxes 10,000electricity 197,000Maintenance Contract 20,000Operators (7 total) 210,000Consultants 0Insurance 15,000General Supplies 30,000wood royalty 30,000 1.30%Fuel 1,500communications 2,000PRICE $/TONNE 40Fuel Heating Value btu/lb 0Tonnes/year 24,000Total Fuel 960,000.0Total costs - 1st year 1,526,000Annual escalation 2.0%

Annapolis Digby Pellet Plant3 Accounts receivableCollection of revenue as follows:Current 0.0%30 days 100.0%60 days 0.0%Provision for Bad debts 0.0%100.0%Total annual revenue - amount in A/R at end of yea 8.3%4 Capital CostsNon depreciable 250,000Depreciable 4,000,000Total 4,250,000Depreciation Rates - Straight line - years 20.0Capital Additions Year Amount-Depreciation on capital additions 7 0line 14 04 Financing of Capital CostsDebt 70.0% 2,975,000Equity / Internal 30.0% 1,275,000Minimal rate of return on equity 10.0%(Discount rate)Financing of Capital Additions Loan #2Debt 50.0% 0Equity 50.0% 0Terms of DebtLoan #1 Loan #2Interest Rate 7.50% 7.50%Term - years debt to be paid 30 0Paid in # of periods per year 4 4PvFuture value of debt at end of termFv 0 0Payments at beginning (1) or end Type 0 0

Annapolis Digby Pellet Plant5 Bank Operating LoanInterest on bank debt 10.0%6 Accounts payablePayment of expenses under the following termsCurrent 0.0%30 days 100.0%60 days 0.0%100.0%Total annual expenses, amount in A/P at end of ye 8.3%7 Corporate tax rate 40.0%Capital Cost Allowance Rate 40.0%Payable in 1808 DividendsNet minimum retained earnings: 0- balance paid out as dividends in following year

Projected Statement of EarningsYear 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034RevenueDomestic Pellet Sales 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000Rate 180.0000 183.6000 187.2720 191.0174 194.8378 198.7345 202.7092 206.7634 210.8987 215.1167 219.4190 223.8074 228.2835 232.8492 237.5062 242.2563 247.1014 252.0435 257.0843 262.2260 267.4705 272.8199 278.2763 283.8419 289.5187Total 900,000 918,000 936,360 955,087 974,189 993,673 1,013,546 1,033,817 1,054,493 1,075,583 1,097,095 1,119,037 1,141,418 1,164,246 1,187,531 1,211,282 1,235,507 1,260,217 1,285,422 1,311,130 1,337,353 1,364,100 1,391,382 1,419,209 1,447,594Export Pellet Sales 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000Rate 180.0000 183.6000 187.2720 191.0174 194.8378 198.7345 202.7092 206.7634 210.8987 215.1167 219.4190 223.8074 228.2835 232.8492 237.5062 242.2563 247.1014 252.0435 257.0843 262.2260 267.4705 272.8199 278.2763 283.8419 289.5187Total 900,000 918,000 936,360 955,087 974,189 993,673 1,013,546 1,033,817 1,054,493 1,075,583 1,097,095 1,119,037 1,141,418 1,164,246 1,187,531 1,211,282 1,235,507 1,260,217 1,285,422 1,311,130 1,337,353 1,364,100 1,391,382 1,419,209 1,447,594Woodchip sales 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Rate 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Carbon Credits 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Capacity Payment 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total potential revenue 1,800,000 1,836,000 1,872,720 1,910,174 1,948,378 1,987,345 2,027,092 2,067,634 2,108,987 2,151,167 2,194,190 2,238,074 2,282,835 2,328,492 2,375,062 2,422,563 2,471,014 2,520,435 2,570,843 2,622,260 2,674,705 2,728,199 2,782,763 2,838,419 2,895,187% available 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%Gross revenue 1,800,000 1,836,000 1,872,720 1,910,174 1,948,378 1,987,345 2,027,092 2,067,634 2,108,987 2,151,167 2,194,190 2,238,074 2,282,835 2,328,492 2,375,062 2,422,563 2,471,014 2,520,435 2,570,843 2,622,260 2,674,705 2,728,199 2,782,763 2,838,419 2,895,187ExpensesOperating and maintenance 1,526,000 1,556,520 1,587,650 1,619,403 1,651,791 1,684,827 1,718,524 1,752,894 1,787,952 1,823,711 1,860,185 1,897,389 1,935,337 1,974,044 2,013,525 2,053,795 2,094,871 2,136,768 2,179,504 2,223,094 2,267,556 2,312,907 2,359,165 2,406,348 2,454,475Interest on debt 222,359 220,224 217,925 215,448 212,780 209,907 206,811 203,478 199,886 196,018 191,852 187,364 182,530 177,323 171,715 165,673 159,166 152,157 144,607 136,475 127,716 118,281 108,118 97,171 85,380Depreciation and amortization 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 0 0 0 0 0Amortization capital additions 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total expenses 1,948,359 1,976,744 2,005,575 2,034,851 2,064,572 2,094,734 2,125,335 2,156,372 2,187,839 2,219,730 2,252,037 2,284,753 2,317,867 2,351,367 2,385,239 2,419,468 2,454,037 2,488,925 2,524,111 2,559,569 2,395,272 2,431,188 2,467,283 2,503,519 2,539,855Net Income before corporate taxes -148,359 -140,744 -132,855 -124,677 -116,194 -107,389 -98,243 -88,738 -78,852 -68,563 -57,847 -46,679 -35,032 -22,875 -10,177 3,095 16,977 31,509 46,732 62,691 279,434 297,012 315,480 334,899 355,332Corporate taxes -59,343 -56,298 -53,142 -49,871 -46,478 -42,955 -39,297 -35,495 -31,541 -27,425 -23,139 -18,672 -14,013 -9,150 -4,071 1,238 6,791 12,604 18,693 25,076 111,773 118,805 126,192 133,960 142,133Net income -89,015 -84,446 -79,713 -74,806 -69,716 -64,433 -58,946 -53,243 -47,311 -41,138 -34,708 -28,008 -21,019 -13,725 -6,106 1,857 10,186 18,905 28,039 37,615 167,660 178,207 189,288 200,940 213,199Retained earnings - beginning -89,015 -173,462 -253,175 -327,981 -397,697 -462,130 -521,076 -574,319 -621,630 -662,767 -697,476 -725,484 -746,503 -760,228 -766,334 -764,477 -754,291 -735,385 -707,346 -669,732 -502,071 -323,864 -134,576 66,364Dividends 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 66,364Retained earnings - end -89,015 -173,462 -253,175 -327,981 -397,697 -462,130 -521,076 -574,319 -621,630 -662,767 -697,476 -725,484 -746,503 -760,228 -766,334 -764,477 -754,291 -735,385 -707,346 -669,732 -502,071 -323,864 -134,576 66,364 213,199

Projected Balance SheetYear 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034ASSETSCash 1,134 89,467 180,336 273,740 369,680 468,148 569,135 672,624 778,597 887,025 997,875 1,111,109 1,226,678 1,344,527 1,464,590 1,586,793 1,711,051 1,837,266 1,965,330 2,095,118 2,226,493 2,279,300 2,333,368 2,388,508 2,378,143Accounts receivable 150,000 153,000 156,060 159,181 162,365 165,612 168,924 172,303 175,749 179,264 182,849 186,506 190,236 194,041 197,922 201,880 205,918 210,036 214,237 218,522 222,892 227,350 231,897 236,535 241,266151,134 242,467 336,396 432,922 532,045 633,760 738,059 844,927 954,345 1,066,288 1,180,724 1,297,615 1,416,914 1,538,568 1,662,512 1,788,674 1,916,969 2,047,303 2,179,567 2,313,639 2,449,385 2,506,650 2,565,265 2,625,042 2,619,409Capital AssetsNon depreciable 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000Depreciable 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,0004,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000 4,250,000Accumulated depreciation 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000 2,200,000 2,400,000 2,600,000 2,800,000 3,000,000 3,200,000 3,400,000 3,600,000 3,800,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000Net 4,050,000 3,850,000 3,650,000 3,450,000 3,250,000 3,050,000 2,850,000 2,650,000 2,450,000 2,250,000 2,050,000 1,850,000 1,650,000 1,450,000 1,250,000 1,050,000 850,000 650,000 450,000 250,000 250,000 250,000 250,000 250,000 250,000Total assets 4,201,134 4,092,467 3,986,396 3,882,922 3,782,045 3,683,760 3,588,059 3,494,927 3,404,345 3,316,288 3,230,724 3,147,615 3,066,914 2,988,568 2,912,512 2,838,674 2,766,969 2,697,303 2,629,567 2,563,639 2,699,385 2,756,650 2,815,265 2,875,042 2,869,409LIABILITIESAccounts payable 127,167 129,710 132,304 134,950 137,649 140,402 143,210 146,075 148,996 151,976 155,015 158,116 161,278 164,504 167,794 171,150 174,573 178,064 181,625 185,258 188,963 192,742 196,597 200,529 204,540Corporate taxes -59,343 -56,298 -53,142 -49,871 -46,478 -42,955 -39,297 -35,495 -31,541 -27,425 -23,139 -18,672 -14,013 -9,150 -4,071 1,238 6,791 12,604 18,693 25,076 111,773 118,805 126,192 133,960 142,13367,823 73,412 79,162 85,079 91,172 97,447 103,913 110,579 117,455 124,551 131,876 139,444 147,265 155,354 163,723 172,387 181,363 190,668 200,318 210,334 300,736 311,547 322,789 334,489 346,672Long term debt 2,947,326 2,917,517 2,885,408 2,850,823 2,813,570 2,773,444 2,730,222 2,683,667 2,633,520 2,579,505 2,521,324 2,458,655 2,391,152 2,318,442 2,240,123 2,155,763 2,064,896 1,967,020 1,861,595 1,748,037 1,625,720 1,493,967 1,352,052 1,199,190 1,034,537Total liabilities 3,015,149 2,990,929 2,964,570 2,935,902 2,904,742 2,870,891 2,834,135 2,794,246 2,750,975 2,704,056 2,653,200 2,598,099 2,538,417 2,473,795 2,403,846 2,328,151 2,246,260 2,157,688 2,061,913 1,958,371 1,926,456 1,805,514 1,674,841 1,533,679 1,381,210EQUITYCapital 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000Retained earnings -89,015 -173,462 -253,175 -327,981 -397,697 -462,130 -521,076 -574,319 -621,630 -662,767 -697,476 -725,484 -746,503 -760,228 -766,334 -764,477 -754,291 -735,385 -707,346 -669,732 -502,071 -323,864 -134,576 66,364 213,199Total equity 1,185,985 1,101,538 1,021,825 947,019 877,303 812,870 753,924 700,681 653,370 612,233 577,524 549,516 528,497 514,772 508,666 510,523 520,709 539,615 567,654 605,268 772,929 951,136 1,140,424 1,341,364 1,488,199Total Liabilities and Equity 4,201,134 4,092,467 3,986,396 3,882,922 3,782,045 3,683,760 3,588,059 3,494,927 3,404,345 3,316,288 3,230,724 3,147,615 3,066,914 2,988,568 2,912,512 2,838,674 2,766,969 2,697,303 2,629,567 2,563,639 2,699,385 2,756,650 2,815,265 2,875,042 2,869,409Return on InvestmentEarnings before tax -148,359 -140,744 -132,855 -124,677 -116,194 -107,389 -98,243 -88,738 -78,852 -68,563 -57,847 -46,679 -35,032 -22,875 -10,177 3,095 16,977 31,509 46,732 62,691 279,434 297,012 315,480 334,899 355,332Interest on long term debt 222,359 220,224 217,925 215,448 212,780 209,907 206,811 203,478 199,886 196,018 191,852 187,364 182,530 177,323 171,715 165,673 159,166 152,157 144,607 136,475 127,716 118,281 108,118 97,171 85,380Earnings before interest and tax 74,000 79,480 85,070 90,771 96,586 102,518 108,569 114,740 121,035 127,455 134,004 140,685 147,498 154,448 161,537 168,768 176,143 183,666 191,339 199,166 407,150 415,293 423,598 432,070 440,712Investment - Net debt & equity 4,250,000 4,133,310 4,019,055 3,907,233 3,797,842 3,690,873 3,586,313 3,484,146 3,384,348 3,286,890 3,191,738 3,098,848 3,008,171 2,919,649 2,833,214 2,748,789 2,666,286 2,585,606 2,506,635 2,429,248 2,353,305 2,398,648 2,445,103 2,492,476 2,540,554Return on Investment (ROI) before tax 1.74% 1.92% 2.12% 2.32% 2.54% 2.78% 3.03% 3.29% 3.58% 3.88% 4.20% 4.54% 4.90% 5.29% 5.70% 6.14% 6.61% 7.10% 7.63% 8.20% 17.30% 17.31% 17.32% 17.33% 17.35%Return on Investment (ROI) after tax 1.04% 1.15% 1.27% 1.39% 1.53% 1.67% 1.82% 1.98% 2.15% 2.33% 2.52% 2.72% 2.94% 3.17% 3.42% 3.68% 3.96% 4.26% 4.58% 4.92% 10.38% 10.39% 10.39% 10.40% 10.41%Return on equity (ROE) after tax -7.51% -7.12% -7.24% -7.32% -7.36% -7.34% -7.25% -7.06% -6.75% -6.30% -5.67% -4.85% -3.83% -2.60% -1.19% 0.37% 2.00% 3.63% 5.20% 6.63% 27.70% 23.06% 19.90% 17.62% 15.89%1.30%Net present value of investment (NPV) -342,860Net investment - equity 1,275,000Net positive (negative) return -1,617,860Total dividends paid during operation 0 0 0 0 0 0 0 0 0

Projected Statement of Cash FlowYear 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034Cash From OperationsNet Income -89,015 -84,446 -79,713 -74,806 -69,716 -64,433 -58,946 -53,243 -47,311 -41,138 -34,708 -28,008 -21,019 -13,725 -6,106 1,857 10,186 18,905 28,039 37,615 167,660 178,207 189,288 200,940 213,199Depreciation and amortization 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 0 0 0 0 0110,985 115,554 120,287 125,194 130,284 135,567 141,054 146,757 152,689 158,862 165,292 171,992 178,981 186,275 193,894 201,857 210,186 218,905 228,039 237,615 167,660 178,207 189,288 200,940 213,199Cash From FinancingBank loanAccounts payable 127,167 2,543 2,594 2,646 2,699 2,753 2,808 2,864 2,921 2,980 3,040 3,100 3,162 3,226 3,290 3,356 3,423 3,491 3,561 3,633 3,705 3,779 3,855 3,932 4,011Corporate taxes payable -59,343 3,046 3,156 3,271 3,393 3,522 3,658 3,802 3,954 4,116 4,286 4,467 4,659 4,863 5,079 5,309 5,553 5,813 6,089 6,384 86,697 7,031 7,387 7,767 8,173Debt 2,975,000Capital addition debt 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Capital 1,275,000Total cash provided 4,317,823 5,589 5,750 5,917 6,092 6,275 6,466 6,666 6,876 7,095 7,326 7,567 7,821 8,088 8,369 8,665 8,976 9,304 9,651 10,016 90,402 10,810 11,242 11,699 12,184Cash UsedAccounts receivable 150,000 3,000 3,060 3,121 3,184 3,247 3,312 3,378 3,446 3,515 3,585 3,657 3,730 3,805 3,881 3,958 4,038 4,118 4,201 4,285 4,370 4,458 4,547 4,638 4,731Land 250,000Buildings and equipment 4,000,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Debt repayment 27,674 29,809 32,108 34,585 37,253 40,126 43,222 46,556 50,147 54,015 58,181 62,669 67,503 72,710 78,319 84,360 90,867 97,876 105,426 113,558 122,317 131,752 141,915 152,862 164,653Dividends 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 66,364Total cash used 4,427,674 32,809 35,168 37,706 40,437 43,374 46,534 49,934 53,593 57,530 61,767 66,326 71,233 76,515 82,199 88,318 94,905 101,994 109,626 117,843 126,688 136,210 146,462 157,500 235,747Net cash provided (used) 1,134 88,334 90,868 93,405 95,939 98,468 100,987 103,490 105,972 108,428 110,851 113,234 115,569 117,849 120,063 122,203 124,258 126,215 128,063 129,788 131,375 52,807 54,068 55,139 -10,365Cash - beginning 1,134 89,467 180,336 273,740 369,680 468,148 569,135 672,624 778,597 887,025 997,875 1,111,109 1,226,678 1,344,527 1,464,590 1,586,793 1,711,051 1,837,266 1,965,330 2,095,118 2,226,493 2,279,300 2,333,368 2,388,508Cash - end 1,134 89,467 180,336 273,740 369,680 468,148 569,135 672,624 778,597 887,025 997,875 1,111,109 1,226,678 1,344,527 1,464,590 1,586,793 1,711,051 1,837,266 1,965,330 2,095,118 2,226,493 2,279,300 2,333,368 2,388,508 2,378,143

44 2,536,277 0 2,536,277 62,508 47,555 14,953 2,521,324 191,852 58,18145 2,521,324 0 2,521,324 62,508 47,275 15,233 2,506,09046 2,506,090 0 2,506,090 62,508 46,989 15,519 2,490,57147 2,490,571 0 2,490,571 62,508 46,698 15,810 2,474,76148 2,474,761 0 2,474,761 62,508 46,402 16,106 2,458,655 187,364 62,66949 2,458,655 0 2,458,655 62,508 46,100 16,408 2,442,24650 2,442,246 0 2,442,246 62,508 45,792 16,716 2,425,53051 2,425,530 0 2,425,530 62,508 45,479 17,030 2,408,50152 2,408,501 0 2,408,501 62,508 45,159 17,349 2,391,152 182,530 67,50353 2,391,152 0 2,391,152 62,508 44,834 17,674 2,373,47854 2,373,478 0 2,373,478 62,508 44,503 18,006 2,355,47255 2,355,472 0 2,355,472 62,508 44,165 18,343 2,337,12956 2,337,129 0 2,337,129 62,508 43,821 18,687 2,318,442 177,323 72,71057 2,318,442 0 2,318,442 62,508 43,471 19,037 2,299,40458 2,299,404 0 2,299,404 62,508 43,114 19,394 2,280,01059 2,280,010 0 2,280,010 62,508 42,750 19,758 2,260,25260 2,260,252 0 2,260,252 62,508 42,380 20,129 2,240,123 171,715 78,31961 2,240,123 0 2,240,123 62,508 42,002 20,506 2,219,61762 2,219,617 0 2,219,617 62,508 41,618 20,890 2,198,72763 2,198,727 0 2,198,727 62,508 41,226 21,282 2,177,44564 2,177,445 0 2,177,445 62,508 40,827 21,681 2,155,763 165,673 84,36065 2,155,763 0 2,155,763 62,508 40,421 22,088 2,133,67666 2,133,676 0 2,133,676 62,508 40,006 22,502 2,111,17467 2,111,174 0 2,111,174 62,508 39,585 22,924 2,088,25068 2,088,250 0 2,088,250 62,508 39,155 23,354 2,064,896 159,166 90,86769 2,064,896 0 2,064,896 62,508 38,717 23,791 2,041,10570 2,041,105 0 2,041,105 62,508 38,271 24,238 2,016,86771 2,016,867 0 2,016,867 62,508 37,816 24,692 1,992,17572 1,992,175 0 1,992,175 62,508 37,353 25,155 1,967,020 152,157 97,87673 1,967,020 0 1,967,020 62,508 36,882 25,627 1,941,39474 1,941,394 0 1,941,394 62,508 36,401 26,107 1,915,28775 1,915,287 0 1,915,287 62,508 35,912 26,597 1,888,69076 1,888,690 0 1,888,690 62,508 35,413 27,095 1,861,595 144,607 105,42677 1,861,595 0 1,861,595 62,508 34,905 27,603 1,833,99178 1,833,991 0 1,833,991 62,508 34,387 28,121 1,805,87079 1,805,870 0 1,805,870 62,508 33,860 28,648 1,777,22280 1,777,222 0 1,777,222 62,508 33,323 29,185 1,748,037 136,475 113,55881 1,748,037 0 1,748,037 62,508 32,776 29,733 1,718,30482 1,718,304 0 1,718,304 62,508 32,218 30,290 1,688,01483 1,688,014 0 1,688,014 62,508 31,650 30,858 1,657,15684 1,657,156 0 1,657,156 62,508 31,072 31,437 1,625,720 127,716 122,31785 1,625,720 0 1,625,720 62,508 30,482 32,026 1,593,69486 1,593,694 0 1,593,694 62,508 29,882 32,627 1,561,06787 1,561,067 0 1,561,067 62,508 29,270 33,238 1,527,82988 1,527,829 0 1,527,829 62,508 28,647 33,861 1,493,967 118,281 131,75289 1,493,967 0 1,493,967 62,508 28,012 34,496 1,459,47190 1,459,471 0 1,459,471 62,508 27,365 35,143 1,424,32891 1,424,328 0 1,424,328 62,508 26,706 35,802 1,388,52692 1,388,526 0 1,388,526 62,508 26,035 36,473 1,352,052 108,118 141,91593 1,352,052 0 1,352,052 62,508 25,351 37,157 1,314,89594 1,314,895 0 1,314,895 62,508 24,654 37,854 1,277,04195 1,277,041 0 1,277,041 62,508 23,945 38,564 1,238,47796 1,238,477 0 1,238,477 62,508 23,221 39,287 1,199,190 97,171 152,86297 1,199,190 0 1,199,190 62,508 22,485 40,023 1,159,16798 1,159,167 0 1,159,167 62,508 21,734 40,774 1,118,39399 1,118,393 0 1,118,393 62,508 20,970 41,538 1,076,855100 1,076,855 0 1,076,855 62,508 20,191 42,317 1,034,537 85,380 164,653

Tax CalculationYear 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034Net Income Before Tax -148,359 -140,744 -132,855 -124,677 -116,194 -107,389 -98,243 -88,738 -78,852 -68,563 -57,847 -46,679 -35,032 -22,875 -10,177 3,095 16,977 31,509 46,732 62,691 279,434 297,012 315,480 334,899 355,332Add:Depreciation and amort. 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 0 0 0 0 0Capital add. Amort. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Adjusted 51,641 59,256 67,145 75,323 83,806 92,611 101,757 111,262 121,148 131,437 142,153 153,321 164,968 177,125 189,823 203,095 216,977 231,509 246,732 262,691 279,434 297,012 315,480 334,899 355,332Deduct:Capital Cost Allowance 800,000 1,280,000 768,000 460,800 276,480 165,888 99,533 59,720 35,832 21,499 12,899 7,740 4,644 2,786 1,672 1,003 602 361 217 130 78 47 28 17 10Net tax deduct 800,000 1,280,000 768,000 460,800 276,480 165,888 99,533 59,720 35,832 21,499 12,899 7,740 4,644 2,786 1,672 1,003 602 361 217 130 78 47 28 17 10Taxable income -748,359 -1,220,744 -700,855 -385,477 -192,674 -73,277 2,224 51,543 85,316 109,938 129,253 145,581 160,324 174,339 188,151 202,092 216,375 231,148 246,515 262,561 279,356 296,965 315,452 334,882 355,322Taxes payable -299,343 -488,298 -280,342 -154,191 -77,070 -29,311 890 20,617 34,127 43,975 51,701 58,232 64,130 69,736 75,260 80,837 86,550 92,459 98,606 105,024 111,742 118,786 126,181 133,953 142,129Provision for corporate taxes -59,343 -56,298 -53,142 -49,871 -46,478 -42,955 -39,297 -35,495 -31,541 -27,425 -23,139 -18,672 -14,013 -9,150 -4,071 1,238 6,791 12,604 18,693 25,076 111,773 118,805 126,192 133,960 142,133Deferred taxes 240,000 432,000 227,200 104,320 30,592 -13,645 -40,187 -56,112 -65,667 -71,400 -74,840 -76,904 -78,142 -78,885 -79,331 -79,599 -79,759 -79,856 -79,913 -79,948 31 19 11 7 4Accumulated deferred 240,000 672,000 899,200 1,003,520 1,034,112 1,020,467 980,280 924,168 858,501 787,101 712,260 635,356 557,214 478,328 398,997 319,398 239,639 159,783 79,870 -78 -47 -28 -17 -10 -6Undepreciated Capital Cost - Beg. 3,200,000 1,920,000 1,152,000 691,200 414,720 248,832 149,299 89,580 53,748 32,249 19,349 11,610 6,966 4,179 2,508 1,505 903 542 325 195 117 70 42 25Additions 4,000,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 04,000,000 3,200,000 1,920,000 1,152,000 691,200 414,720 248,832 149,299 89,580 53,748 32,249 19,349 11,610 6,966 4,179 2,508 1,505 903 542 325 195 117 70 42 25CCA 800,000 1,280,000 768,000 460,800 276,480 165,888 99,533 59,720 35,832 21,499 12,899 7,740 4,644 2,786 1,672 1,003 602 361 217 130 78 47 28 17 10UCC End 3,200,000 1,920,000 1,152,000 691,200 414,720 248,832 149,299 89,580 53,748 32,249 19,349 11,610 6,966 4,179 2,508 1,505 903 542 325 195 117 70 42 25 15

Annapolis Digby Woodchip BusinessEarnings Statement1 RevenuePellet Production0 tonnesNet Electrical Power output kw0 kwGross Plant Heat Rate12,500 btu/kwhrDomestic Pellet Sales0 tonnesRate180.0000 $/tonneAnnual escalation 2.00%Export Pellet Sales0 tonnesRate180.0000 $/tonneAnnual escalation 2.00%Woodchip sales20,000 tonnesRate50.0000 $/tonneAnnual escalation 2.00%Carbon Credits $/tonne0 $/tonneNSP Intensity Factor0.80 tCO2e/mwhr0.00 $/mwhrInitial availability of plant on an annual basis 100.0%0.000%2 Annual O&M Cost Estimate(All costs in 2005 CAN$)Operating and Maintenance - FixedManager 0taxes 1,000electricity 0Maintenance Contract 15,000Operators (2 total) 60,000Consultants 0Insurance 2,000General Supplies 500wood royalty 12,000 51.85%Fuel 6,000communications 100PRICE $/TONNE 40Fuel Heating Value btu/lb 0Tonnes/year 20,000Total Fuel 800,000.0Total costs - 1st year 897,000Annual escalation 2.0%

Annapolis Digby Woodchip Business3 Accounts receivableCollection of revenue as follows:Current 0.0%30 days 100.0%60 days 0.0%Provision for Bad debts 0.0%100.0%Total annual revenue - amount in A/R at end of yea 8.3%4 Capital CostsNon depreciable 0Depreciable 225,000Total 225,000Depreciation Rates - Straight line - years 20.0Capital Additions Year Amount-Depreciation on capital additions 7 100,000line 14 100,0004 Financing of Capital CostsDebt 70.0% 157,500Equity / Internal 30.0% 67,500Minimal rate of return on equity 10.0%(Discount rate)Financing of Capital Additions Loan #2Debt 50.0% 50,000Equity 50.0% 50,000Terms of DebtLoan #1 Loan #2Interest Rate 7.50% 7.50%Term - years debt to be paid 10 0Paid in # of periods per year 4 4PvFuture value of debt at end of termFv 0 0Payments at beginning (1) or end Type 0 0

Annapolis Digby Woodchip Business5 Bank Operating LoanInterest on bank debt 10.0%6 Accounts payablePayment of expenses under the following termsCurrent 0.0%30 days 100.0%60 days 0.0%100.0%Total annual expenses, amount in A/P at end of ye 8.3%7 Corporate tax rate 40.0%Capital Cost Allowance Rate 40.0%Payable in 1808 DividendsNet minimum retained earnings: 0- balance paid out as dividends in following year

Projected Statement of EarningsYear 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034RevenueDomestic Pellet Sales 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Rate 180.0000 183.6000 187.2720 191.0174 194.8378 198.7345 202.7092 206.7634 210.8987 215.1167 219.4190 223.8074 228.2835 232.8492 237.5062 242.2563 247.1014 252.0435 257.0843 262.2260 267.4705 272.8199 278.2763 283.8419 289.5187Total 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Export Pellet Sales 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Rate 180.0000 183.6000 187.2720 191.0174 194.8378 198.7345 202.7092 206.7634 210.8987 215.1167 219.4190 223.8074 228.2835 232.8492 237.5062 242.2563 247.1014 252.0435 257.0843 262.2260 267.4705 272.8199 278.2763 283.8419 289.5187Total 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Woodchip sales 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000Rate 50 51 52 53 54 55 56 57 59 60 61 62 63 65 66 67 69 70 71 73 74 76 77 79 80Total 1,000,000 1,020,000 1,040,400 1,061,208 1,082,432 1,104,081 1,126,162 1,148,686 1,171,659 1,195,093 1,218,994 1,243,374 1,268,242 1,293,607 1,319,479 1,345,868 1,372,786 1,400,241 1,428,246 1,456,811 1,485,947 1,515,666 1,545,980 1,576,899 1,608,437Carbon Credits 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Capacity Payment 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total potential revenue 1,000,000 1,020,000 1,040,400 1,061,208 1,082,432 1,104,081 1,126,162 1,148,686 1,171,659 1,195,093 1,218,994 1,243,374 1,268,242 1,293,607 1,319,479 1,345,868 1,372,786 1,400,241 1,428,246 1,456,811 1,485,947 1,515,666 1,545,980 1,576,899 1,608,437% available 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%Gross revenue 1,000,000 1,020,000 1,040,400 1,061,208 1,082,432 1,104,081 1,126,162 1,148,686 1,171,659 1,195,093 1,218,994 1,243,374 1,268,242 1,293,607 1,319,479 1,345,868 1,372,786 1,400,241 1,428,246 1,456,811 1,485,947 1,515,666 1,545,980 1,576,899 1,608,437ExpensesOperating and maintenance 897,000 914,940 933,239 951,904 970,942 990,360 1,010,168 1,030,371 1,050,978 1,071,998 1,093,438 1,115,307 1,137,613 1,160,365 1,183,572 1,207,244 1,231,389 1,256,017 1,281,137 1,306,760 1,332,895 1,359,553 1,386,744 1,414,479 1,442,768Interest on debt 11,507 10,657 9,742 8,755 7,693 6,548 5,316 3,988 2,558 1,018 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Depreciation and amortization 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 0 0 0 0 0Amortization capital additions 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total expenses 919,757 936,847 954,230 971,909 989,884 1,008,159 1,026,734 1,045,609 1,064,787 1,084,266 1,104,688 1,126,557 1,148,863 1,171,615 1,194,822 1,218,494 1,242,639 1,267,267 1,292,387 1,318,010 1,332,895 1,359,553 1,386,744 1,414,479 1,442,768Net Income before corporate taxes 80,243 83,153 86,170 89,299 92,548 95,922 99,429 103,076 106,873 110,827 114,306 116,818 119,379 121,991 124,656 127,374 130,147 132,975 135,859 138,802 153,053 156,114 159,236 162,421 165,669Corporate taxes 32,097 33,261 34,468 35,720 37,019 38,369 39,772 41,231 42,749 44,331 45,723 46,727 47,752 48,797 49,863 50,950 52,059 53,190 54,344 55,521 61,221 62,445 63,694 64,968 66,268Net income 48,146 49,892 51,702 53,580 55,529 57,553 59,657 61,846 64,124 66,496 68,584 70,091 71,627 73,195 74,794 76,425 78,088 79,785 81,516 83,281 91,832 93,668 95,542 97,452 99,401Retained earnings - beginning 48,146 49,892 51,702 53,580 55,529 57,553 59,657 61,846 64,124 66,496 68,584 70,091 71,627 73,195 74,794 76,425 78,088 79,785 81,516 83,281 91,832 93,668 95,542 97,452Dividends 48,146 49,892 51,702 53,580 55,529 57,553 59,657 61,846 64,124 66,496 68,584 70,091 71,627 73,195 74,794 76,425 78,088 79,785 81,516 83,281 91,832 93,668 95,542 97,452Retained earnings - end 48,146 49,892 51,702 53,580 55,529 57,553 59,657 61,846 64,124 66,496 68,584 70,091 71,627 73,195 74,794 76,425 78,088 79,785 81,516 83,281 91,832 93,668 95,542 97,452 99,401

Projected Balance SheetYear 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034ASSETSCash 71,888 74,006 75,311 75,739 75,220 73,678 -28,967 -32,802 -37,923 -44,431 -29,907 -16,355 -2,757 -89,112 -75,419 -61,678 -47,886 -34,044 -20,150 -6,203 7,798 10,604 13,466 16,386 19,363Accounts receivable 83,333 85,000 86,700 88,434 90,203 92,007 93,847 95,724 97,638 99,591 101,583 103,615 105,687 107,801 109,957 112,156 114,399 116,687 119,021 121,401 123,829 126,306 128,832 131,408 134,036155,222 159,006 162,011 164,173 165,422 165,685 64,880 62,921 59,715 55,160 71,676 87,260 102,930 18,689 34,537 50,478 66,513 82,643 98,871 115,198 131,627 136,910 142,298 147,794 153,400Capital AssetsNon depreciable 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Depreciable 225,000 225,000 225,000 225,000 225,000 225,000 325,000 325,000 325,000 325,000 325,000 325,000 325,000 425,000 425,000 425,000 425,000 425,000 425,000 425,000 425,000 425,000 425,000 425,000 425,000225,000 225,000 225,000 225,000 225,000 225,000 325,000 325,000 325,000 325,000 325,000 325,000 325,000 425,000 425,000 425,000 425,000 425,000 425,000 425,000 425,000 425,000 425,000 425,000 425,000Accumulated depreciation 11,250 22,500 33,750 45,000 56,250 67,500 78,750 90,000 101,250 112,500 123,750 135,000 146,250 157,500 168,750 180,000 191,250 202,500 213,750 225,000 225,000 225,000 225,000 225,000 225,000Net 213,750 202,500 191,250 180,000 168,750 157,500 246,250 235,000 223,750 212,500 201,250 190,000 178,750 267,500 256,250 245,000 233,750 222,500 211,250 200,000 200,000 200,000 200,000 200,000 200,000Total assets 368,972 361,506 353,261 344,173 334,172 323,185 311,130 297,921 283,465 267,660 272,926 277,260 281,680 286,189 290,787 295,478 300,263 305,143 310,121 315,198 331,627 336,910 342,298 347,794 353,400LIABILITIESAccounts payable 74,750 76,245 77,770 79,325 80,912 82,530 84,181 85,864 87,582 89,333 91,120 92,942 94,801 96,697 98,631 100,604 102,616 104,668 106,761 108,897 111,075 113,296 115,562 117,873 120,231Corporate taxes 32,097 33,261 34,468 35,720 37,019 38,369 39,772 41,231 42,749 44,331 45,723 46,727 47,752 48,797 49,863 50,950 52,059 53,190 54,344 55,521 61,221 62,445 63,694 64,968 66,268106,847 109,506 112,238 115,045 117,931 120,899 123,952 127,095 130,331 133,664 136,842 139,669 142,553 145,494 148,494 151,553 154,675 157,858 161,105 164,417 172,296 175,742 179,256 182,841 186,498Long term debt 146,479 134,608 121,821 108,048 93,213 77,233 60,021 41,481 21,511 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total liabilities 253,326 244,114 234,059 223,093 211,144 198,132 183,973 168,576 151,841 133,664 136,842 139,669 142,553 145,494 148,494 151,553 154,675 157,858 161,105 164,417 172,296 175,742 179,256 182,841 186,498EQUITYCapital 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500Retained earnings 48,146 49,892 51,702 53,580 55,529 57,553 59,657 61,846 64,124 66,496 68,584 70,091 71,627 73,195 74,794 76,425 78,088 79,785 81,516 83,281 91,832 93,668 95,542 97,452 99,401Total equity 115,646 117,392 119,202 121,080 123,029 125,053 127,157 129,346 131,624 133,996 136,084 137,591 139,127 140,695 142,294 143,925 145,588 147,285 149,016 150,781 159,332 161,168 163,042 164,952 166,901Total Liabilities and Equity 368,972 361,506 353,261 344,173 334,172 323,185 311,130 297,921 283,465 267,660 272,926 277,260 281,680 286,189 290,787 295,478 300,263 305,143 310,121 315,198 331,627 336,910 342,298 347,794 353,400Return on InvestmentEarnings before tax 80,243 83,153 86,170 89,299 92,548 95,922 99,429 103,076 106,873 110,827 114,306 116,818 119,379 121,991 124,656 127,374 130,147 132,975 135,859 138,802 153,053 156,114 159,236 162,421 165,669Interest on long term debt 11,507 10,657 9,742 8,755 7,693 6,548 5,316 3,988 2,558 1,018 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Earnings before interest and tax 91,750 93,810 95,911 98,054 100,241 102,470 104,745 107,065 109,431 111,845 114,306 116,818 119,379 121,991 124,656 127,374 130,147 132,975 135,859 138,802 153,053 156,114 159,236 162,421 165,669Investment - Net debt & equity 225,000 262,125 252,000 241,023 229,128 216,242 202,286 187,178 170,827 153,134 133,996 136,084 137,591 139,127 140,695 142,294 143,925 145,588 147,285 149,016 150,781 159,332 161,168 163,042 164,952Return on Investment (ROI) before tax 40.78% 35.79% 38.06% 40.68% 43.75% 47.39% 51.78% 57.20% 64.06% 73.04% 85.31% 85.84% 86.76% 87.68% 88.60% 89.52% 90.43% 91.34% 92.24% 93.15% 101.51% 97.98% 98.80% 99.62% 100.43%Return on Investment (ROI) after tax 24.47% 21.47% 22.84% 24.41% 26.25% 28.43% 31.07% 34.32% 38.44% 43.82% 51.18% 51.51% 52.06% 52.61% 53.16% 53.71% 54.26% 54.80% 55.35% 55.89% 60.90% 58.79% 59.28% 59.77% 60.26%Return on equity (ROE) after tax 41.63% 43.14% 44.04% 44.95% 45.86% 46.78% 47.71% 48.64% 49.58% 50.52% 51.18% 51.51% 52.06% 52.61% 53.16% 53.71% 54.26% 54.80% 55.35% 55.89% 60.90% 58.79% 59.28% 59.77% 60.26%51.85%Net present value of investment (NPV) 569,797Net investment - equity 67,500Net positive (negative) return 502,297Total dividends paid during operation 1,325,908 1,242,627 1,161,111 1,081,326 1,003,238 926,814 852,020 778,825 707,198

Projected Statement of Cash FlowYear 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034Cash From OperationsNet Income 48,146 49,892 51,702 53,580 55,529 57,553 59,657 61,846 64,124 66,496 68,584 70,091 71,627 73,195 74,794 76,425 78,088 79,785 81,516 83,281 91,832 93,668 95,542 97,452 99,401Depreciation and amortization 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 0 0 0 0 059,396 61,142 62,952 64,830 66,779 68,803 70,907 73,096 75,374 77,746 79,834 81,341 82,877 84,445 86,044 87,675 89,338 91,035 92,766 94,531 91,832 93,668 95,542 97,452 99,401Cash From FinancingBank loanAccounts payable 74,750 1,495 1,525 1,555 1,587 1,618 1,651 1,684 1,717 1,752 1,787 1,822 1,859 1,896 1,934 1,973 2,012 2,052 2,093 2,135 2,178 2,221 2,266 2,311 2,357Corporate taxes payable 32,097 1,164 1,207 1,252 1,299 1,350 1,403 1,459 1,519 1,582 1,392 1,004 1,025 1,045 1,066 1,087 1,109 1,131 1,154 1,177 5,700 1,224 1,249 1,274 1,299Debt 157,500Capital addition debt 0 0 0 0 0 50,000 0 0 0 0 0 0 50,000 0 0 0 0 0 0 0 0 0 0 0Capital 67,500Total cash provided 331,847 2,659 2,732 2,807 2,886 2,968 53,053 3,143 3,236 3,333 3,178 2,827 2,883 52,941 3,000 3,060 3,121 3,183 3,247 3,312 7,878 3,446 3,515 3,585 3,657Cash UsedAccounts receivable 83,333 1,667 1,700 1,734 1,769 1,804 1,840 1,877 1,914 1,953 1,992 2,032 2,072 2,114 2,156 2,199 2,243 2,288 2,334 2,380 2,428 2,477 2,526 2,577 2,628Land 0Buildings and equipment 225,000 0 0 0 0 0 100,000 0 0 0 0 0 0 100,000 0 0 0 0 0 0 0 0 0 0 0Debt repayment 11,021 11,871 12,787 13,773 14,835 15,980 67,212 18,540 19,970 21,511 0 0 0 50,000 0 0 0 0 0 0 0 0 0 0 0Dividends 0 48,146 49,892 51,702 53,580 55,529 57,553 59,657 61,846 64,124 66,496 68,584 70,091 71,627 73,195 74,794 76,425 78,088 79,785 81,516 83,281 91,832 93,668 95,542 97,452Total cash used 319,354 61,683 64,378 67,209 70,184 73,312 226,606 80,074 83,730 87,587 68,488 70,616 72,163 223,741 75,351 76,993 78,668 80,376 82,119 83,896 85,709 94,308 96,194 98,118 100,081Net cash provided (used) 71,888 2,117 1,305 428 -519 -1,541 -102,645 -3,836 -5,121 -6,508 14,524 13,552 13,598 -86,355 13,693 13,742 13,791 13,842 13,894 13,947 14,001 2,806 2,862 2,919 2,978Cash - beginning 71,888 74,006 75,311 75,739 75,220 73,678 -28,967 -32,802 -37,923 -44,431 -29,907 -16,355 -2,757 -89,112 -75,419 -61,678 -47,886 -34,044 -20,150 -6,203 7,798 10,604 13,466 16,386Cash - end 71,888 74,006 75,311 75,739 75,220 73,678 -28,967 -32,802 -37,923 -44,431 -29,907 -16,355 -2,757 -89,112 -75,419 -61,678 -47,886 -34,044 -20,150 -6,203 7,798 10,604 13,466 16,386 19,363

Projected Debt Repayment ScheduleLoan #1 Loan #2 Loan #3Interest rate on debt 7.50% 7.50% 0.00%Terms of repayment - years 10 0 0- no of payments in year 4 4 0No. of periods for payment of debt (Nper) 40 0 0Amount of debt 157,500 50,000 0Future balance of debt at end of term 0 0 0Payments due beginning (1) or end of period 0 0 0Period payment 5,632 #DIV/0! #DIV/0!Start Period 1 0 0Opening Additions Payment Interest Principal End Paid in YearPeriod Balance Balance Balance Interest Principal1 157,500 0 157,500 5,632 2,953 2,679 154,8212 154,821 0 154,821 5,632 2,903 2,729 152,0923 152,092 0 152,092 5,632 2,852 2,780 149,3124 149,312 0 149,312 5,632 2,800 2,832 146,479 11,507 11,0215 146,479 0 146,479 5,632 2,746 2,886 143,5946 143,594 0 143,594 5,632 2,692 2,940 140,6547 140,654 0 140,654 5,632 2,637 2,995 137,6598 137,659 0 137,659 5,632 2,581 3,051 134,608 10,657 11,8719 134,608 0 134,608 5,632 2,524 3,108 131,50010 131,500 0 131,500 5,632 2,466 3,166 128,33311 128,333 0 128,333 5,632 2,406 3,226 125,10812 125,108 0 125,108 5,632 2,346 3,286 121,821 9,742 12,78713 121,821 0 121,821 5,632 2,284 3,348 118,47314 118,473 0 118,473 5,632 2,221 3,411 115,06315 115,063 0 115,063 5,632 2,157 3,475 111,58816 111,588 0 111,588 5,632 2,092 3,540 108,048 8,755 13,77317 108,048 0 108,048 5,632 2,026 3,606 104,44218 104,442 0 104,442 5,632 1,958 3,674 100,76819 100,768 0 100,768 5,632 1,889 3,743 97,02620 97,026 0 97,026 5,632 1,819 3,813 93,213 7,693 14,83521 93,213 0 93,213 5,632 1,748 3,884 89,32922 89,329 0 89,329 5,632 1,675 3,957 85,37123 85,371 0 85,371 5,632 1,601 4,031 81,34024 81,340 0 81,340 5,632 1,525 4,107 77,233 6,548 15,98025 77,233 0 77,233 5,632 1,448 4,184 73,04926 73,049 0 73,049 5,632 1,370 4,262 68,78727 68,787 0 68,787 5,632 1,290 4,342 64,44528 64,445 0 64,445 5,632 1,208 4,424 60,021 5,316 17,21229 60,021 0 60,021 5,632 1,125 4,507 55,51430 55,514 0 55,514 5,632 1,041 4,591 50,92331 50,923 0 50,923 5,632 955 4,677 46,24632 46,246 0 46,246 5,632 867 4,765 41,481 3,988 18,54033 41,481 0 41,481 5,632 778 4,854 36,62634 36,626 0 36,626 5,632 687 4,945 31,68135 31,681 0 31,681 5,632 594 5,038 26,64336 26,643 0 26,643 5,632 500 5,133 21,511 2,558 19,97037 21,511 0 21,511 5,632 403 5,229 16,28238 16,282 0 16,282 5,632 305 5,327 10,95539 10,955 0 10,955 5,632 205 5,427 5,52840 5,528 0 5,528 5,632 104 5,528 0 1,018 21,511

Tax CalculationYear 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034Net Income Before Tax 80,243 83,153 86,170 89,299 92,548 95,922 99,429 103,076 106,873 110,827 114,306 116,818 119,379 121,991 124,656 127,374 130,147 132,975 135,859 138,802 153,053 156,114 159,236 162,421 165,669Add:Depreciation and amort. 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 0 0 0 0 0Capital add. Amort. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Adjusted 91,493 94,403 97,420 100,549 103,798 107,172 110,679 114,326 118,123 122,077 125,556 128,068 130,629 133,241 135,906 138,624 141,397 144,225 147,109 150,052 153,053 156,114 159,236 162,421 165,669Deduct:Capital Cost Allowance 45,000 72,000 43,200 25,920 15,552 9,331 25,599 35,359 21,216 12,729 7,638 4,583 2,750 21,650 32,990 19,794 11,876 7,126 4,275 2,565 1,539 924 554 332 199Net tax deduct 45,000 72,000 43,200 25,920 15,552 9,331 25,599 35,359 21,216 12,729 7,638 4,583 2,750 21,650 32,990 19,794 11,876 7,126 4,275 2,565 1,539 924 554 332 199Taxable income 46,493 22,403 54,220 74,629 88,246 97,841 85,080 78,967 96,907 109,348 117,919 123,485 127,879 111,592 102,916 118,831 129,521 137,099 142,834 147,486 151,513 155,190 158,682 162,088 165,470Taxes payable 18,597 8,961 21,688 29,852 35,298 39,136 34,032 31,587 38,763 43,739 47,168 49,394 51,152 44,637 41,167 47,532 51,808 54,840 57,134 58,995 60,605 62,076 63,473 64,835 66,188Provision for corporate taxes 32,097 33,261 34,468 35,720 37,019 38,369 39,772 41,231 42,749 44,331 45,723 46,727 47,752 48,797 49,863 50,950 52,059 53,190 54,344 55,521 61,221 62,445 63,694 64,968 66,268Deferred taxes 13,500 24,300 12,780 5,868 1,721 -768 5,739 9,644 3,986 592 -1,445 -2,667 -3,400 4,160 8,696 3,418 251 -1,650 -2,790 -3,474 616 369 222 133 80Accumulated deferred 13,500 37,800 50,580 56,448 58,169 57,401 63,141 72,784 76,771 77,362 75,917 73,250 69,850 74,010 82,706 86,124 86,374 84,725 81,935 78,461 79,076 79,446 79,668 79,801 79,880Undepreciated Capital Cost - Beg. 180,000 108,000 64,800 38,880 23,328 13,997 88,398 53,039 31,823 19,094 11,456 6,874 4,124 82,475 49,485 29,691 17,815 10,689 6,413 3,848 2,309 1,385 831 499Additions 225,000 0 0 0 0 0 100,000 0 0 0 0 0 0 100,000 0 0 0 0 0 0 0 0 0 0 0225,000 180,000 108,000 64,800 38,880 23,328 113,997 88,398 53,039 31,823 19,094 11,456 6,874 104,124 82,475 49,485 29,691 17,815 10,689 6,413 3,848 2,309 1,385 831 499CCA 45,000 72,000 43,200 25,920 15,552 9,331 25,599 35,359 21,216 12,729 7,638 4,583 2,750 21,650 32,990 19,794 11,876 7,126 4,275 2,565 1,539 924 554 332 199UCC End 180,000 108,000 64,800 38,880 23,328 13,997 88,398 53,039 31,823 19,094 11,456 6,874 4,124 82,475 49,485 29,691 17,815 10,689 6,413 3,848 2,309 1,385 831 499 299

Appendix BPellet Line QuoteCBCL Limited Energy ServicesAppendices

Ltd.Turn Key Installation Pellets Pressing Line – 8MT/hGreenForze ABHalla, Hallegarde 122Tomas Persson E-mail: tomas.persson@greenforze.com Ph +46 707 26 35 85, Harvey Guntrip E-mail: harvey.guntrip@greenforze.com +44 (0) 7931 437259PROPOSAL NUMBER: X DATE: 19th, May 2008TABLE OF CONTENTSSECTION ONE: INTRODUCTIONSECTION TWO: TECHNICAL FLOWCHARTSECTION THREE: GENERAL INFORMATIONSECTION FOUR: DESCRIPTION OF DIFFERENT PROCESSESSECTION FIVE: EQUIPMENT LISTSECTION SIX: CONDITIONSSECTION SEVEN: WEARING SPARE PARTS LISTSECTION EIGHT: QUALITY GUARANTEE & AFTER-SALE SERVICESECTION NINE: LIST OF NECESSARY INSTALLATION TOOLSECTION ONE: INTRODUCTIONGreenForze designs and turn-key delivers plants for the conditioning and compacting of many different feed stock. Our pellets producing plants successfully compactsorganic products of different particle sizes, moisture contents, and bulk densities, such as the Wood Waste (Logs, Wood Shavings, Wood Chips, Sawdust), Straw(Miscanthus, Bagasse) and the other form of biomass. Our pelleting presses have a drive power from 15 kw to 160 kw to make different size pellet. We design and constructwood/straw pelleting plants according to the requirement of the customer, considering the capacity and the local conditions between 1-8ton/1hour. Till now, 10 turn-keyprojects complete plants have been delivered to customers in UK, Hungary, Sweden, Malaysia and Ukraine.SECTION TWO: TECHNICAL FLOWCHARTSECTION THREE: GENERAL INFORMATIONCapacity: 4MT /hInput Material: Logs with diameter

Ltd.GROUP 2 Drying Process 516180,00Group 3 Pelletising Process 1045410,00Group 4 Cooling Process 186940,00Group 5 Packing Process 48870,00GROUP 6 Assistant System 14400,00GROUP 7Miscellaneous, electrical equipment39450,00GROUP 8 Services 41000,00GROUP 9PLC SystemTOTAL USD 2152950,00SECTION FIVE: EQUIPMENT LISTGroup 1NO DESCRIPTION QTYCrushing Process101 Combined Chipping and Crushing Machine (BX1112) 2 110*2102 Air-Lock (TGF-20L) 2 1.5*2103 Fan (Y5-47-15) 2 15*2104 XCL-1000 2105 Electrical Controlling System(PLC) 2Power (kW)UNIT (USD)PRICE USDTOTAL (USD)Note: 1. The BX-Series Combined Chipping and Crushing Machine is used for the raw Log with diameter

Ltd.NO DESCRIPTION QTY Power (kW)504 Semi-Auto Packing Machine (DSC-50) 1 1,30Note: The Semi-Auto Packing Machine includes: Scale, Sewing, Conveyor unit and Air Compressor.UNIT (USD)PRICE USDTOTAL (USD)GROUP 6Assistant System601 Steam System602 Flange (with diameter 500 mm and 600 mm)603 Soft Connection (round shape and square shape)604 Different Feeder 12605 Hand-Operated Hoisty Block (with capacity 500 kg) 1606 Penumatic Oil Ejection Pump (4L) 1607 Special Roller Bearing Lubrication Grease 15 Barrels608 Oil Pipe and Special Oil Pipe Connector 10609 Special Screws 40SubtotalGROUP 7Miscellaneous, Electrical Equipment701 General Electrical Control Cabinet (PCL) 1SubtotalGROUP 8ServicesSubtotal801 Engineer / Planning802 Assembly, commissioning and trainingAccomodations, transport not includedTotal: 2 Engineer and 1 TranslatorSubtotalGROUP 9 PLC System48 870,0014400,0039450,0041000,00###########################################################################################################################################Total (USD)2152950,00SECTION SIX: CONDITIONSPrice validityOur prices are valid for a period of 30 days. After this period we reserve the right to revise ourprices without any notice.Time of delivery1. 3-4 months after receipt of order and prepayment provided that all technical and commercialdetails have been agreed upon. We reserve the right to revise the date of delivery at the timeof placing of order.Terms of Delivery1. Applicable are the enclosed "General Conditions for the Supply and Erection of Plant and Machinery for Import and Export, LMW 188 A"2. Our liability according to the terms of supply is only applicable if original spare and wear parts are used and inspection of assembley and start-up of plant has beenexcuted by our specialists.3. As individual agreement consequential and indirect damage, e.g. loss of profit, are excluded from our liability and any liability is limited to the agreed price of objects ofpurchase / wage, with the exception of such damage which are covered by our liability insuranceDispatch and InsuranceDispatch and Insurance at the expense of the consignee. Insurance will be effected at your explicit request only.Price basisCIF agreed container port, acc. To INCOTERMS 2000Payment50% as prepayment against the confirmation of the contract. 40% prior to delivery and on receipt of invoice,10 days net.10% after commissioning, if that is part of the agreement, 3 months.DocumentationThe original operating instructions will be supplied in duplicate in printed form, in English.Explosion protection regulationsThe prices of this offer do not consider the assembly of the machine or plant in compliancewith the explosion protection regulations valid from July 1, 2003 on acc. to the EC Directive94/9/EC of 23/09/94 and the corresponding 11th decree of the law for the protection of plantand machinery. Possible local regulations, e.g. in Russia Gostechnadzor regulations, must beindicated by the customer, who will also bear the additional costs.Prices and scope of supplyPrices and scope of supply of our proforma invoice are limited by the text of the itemsE.&O.E.Note:1. The above data is based on a mixture of 50% pine and 50% the other woods;2. As the wood to be processed is a natural products, the above mentioned data concerning capacities,product parameters, and consumptions may vary depending on the origin, type, and nature of the raw material.3. The following items are not included:Supporting structures for the offered machines and equipments;Building equipment, such as illumination, heating, ventilation, sanitary facilities etc.;Fire and explosion protection equipment, steam plant;Electrical power circuit, electrical installation material for connection of the electrical equipment with the swithch cabinets;Foundation earth, equipotential bonding for machines, supports, steel constructures, cable racks, building;Assemble tools, cranes, and lifting gears, worksite electrical supply and illumination.4. Energy Consumption: Water 160-240 kg/1h & Steam 160-240 kg/1h, Coal 480-640 kg / 8MT raw material with 30% moistureElectricity 800kW, Manpower 2-3 per shift.5. Occupying Area: 24 * 16 * 10m6. Loading Container: 11 * 40 FCL3 / 3

Appendix CLocal Biomass Quantities and PricesCBCL Limited Energy ServicesAppendices

Appendix DCost and Payback CalculationsCBCL Limited Energy ServicesAppendices

Typical Residence:Pellet boiler conversion costs and paybackNo. 2 oil fired boiler provides heat and dhw.Annual Oil ConsumptionCurrent Oil Price:3,000 L$1.10/L∴ Annual Cost of Oil: $3,300Average cost of a residential pellet boiler: $7,000Accessories plus installation: $3,500∴ Total Cost: $10,500Annual Pellet Consumption:Current Pellet Cost:6.5 tonnes$5.50 per 18 kg bag – premium bagged pelletsNumber of Bags Required: 361Cost of Pellets: $1,986 ∴ Annual savings over oil is $1,314∴ Simple payback of investment in pellet boiler is $10,500 = 8 years$1,314If utility grade pellets were available for bulk home delivery at an average cost of $250/tonne the annualpellet cost would be $1,625 and the payback would be $10,500 = 6.3 years$1,625

Typical School:Pellet boiler conversion costs and paybackSchool currently heated by No. 2 oil fired boiler providing heat and dhw.Annual Oil ConsumptionCurrent Fuel Oil Price:150,000 L$1/LCost of an institutional pellet boiler: $90,000Accessories plus installation – storage silo, controls, building modifications: $60,000∴ Total Installed Cost: $150,000Annual Pellet Consumption:300 tonnesCurrent Cost of Bagged Pellets Purchased in Large Lots: $5 per 18 kg bagNumber of Bags Required:∴ Cost of Pellets:16,666 bags$83,333 plus delivery chargesAssume delivery from nearest retailer of $5/tonne = $1,500∴ Annual savings with bagged pellets is150,000 – (83,333 + 1,500) = $65,167 = 2.3 years paybackBulk pellet delivery at $180/tonne will result in an annual cost of $54,000∴ Annual savings would be $96,000 = 1.6 years payback

Operating Cost Calculation5 TPH PlantAssumption 1 10,000 TPY 1 Shift 8 jobs (7 workers + manager)Assumption 2 20,000 TPY 2 Shifts 11 jobs (14 workers + manager)Assumption 3 30,000 TPY 3 Shifts 22 jobs (21 workers + manager)Assumption 1Raw Material 24,000 –72,000 TPY @$40 tonnedeliveredLabour 7 - 21labourers +managerASSUMPTIONS1 2 3 1 2 3$960,000 $1,920,000 $2,880,000$260,000$470,000 $680,000(7-21 @ $15/hr + $50k forMgr)Electricity $197,000 $394,000 $591,000GeneralSupplies$30,000 $60,000 $100,000Supp. Fuel $1,500 $3,000 $4,500Maint Contract $20,000 $35,000 $50,000Insurance $15,000 $15,000 $15,000Taxes $10,000 $10,000 $10,000Wood Royalty $30,000 $50,000 $75,000Fee, Internet $2,000 $2,000 $2,000Operating Cost $/tonne$1,525,500 $2,959,000 $4,407,500 $152. 50 $147. 95 $146. 91Electricity Consumption5 TPY Mill1,200 hp @ 0.796 kW/hp = 895 kW x 2,000 hr/yr = 1,790,400 kWh/yr @ $0.10 = $179,400 + Misc.(Lights) = $197,000

Appendix EPlant Schematic LayoutCBCL Limited Energy ServicesAppendices