Vela Footwear — Projected Balance Sheet

The projected balance sheet over the plan horizon — the asset base, inventory and receivables, debt and equity, working capital and the evolving capital structure.

Section 12 · Business Plan

Projected Balance Sheet

The projected balance sheet over the plan horizon — the asset base, inventory and receivables, debt and equity, working capital and the evolving capital structure.

The projected balance sheet shows a capital-intensive business that
de-leverages steadily as it matures. Fixed assets are largely in place
from Year 1; the growth on the asset side thereafter is working capital,
funded initially by equity and the revolving facility and increasingly
by retained earnings. The balance sheet ties to within rounding in every
year.

Five-year balance sheet

R’000	Year 1	Year 2	Year 3	Year 4	Year 5
Property, plant & equipment (net)	152,900	142,300	133,200	126,100	120,500
Intangible assets (net)	5,600	4,200	2,800	1,400	0
Non-current assets	158,500	146,500	136,000	127,500	120,500
Inventory	29,440	45,456	64,412	85,923	106,736
Trade & other receivables	27,364	43,656	63,551	86,670	109,499
Cash & operating cash	14,554	13,000	13,000	13,000	13,000
Restricted cash (DSRA)	9,000	9,000	9,000	9,000	9,000
Current assets	71,357	102,112	140,963	185,593	229,234
Total assets	229,857	248,612	276,963	313,093	349,734
Share capital	98,000	98,000	98,000	98,000	98,000
Capital grant	18,000	18,000	18,000	18,000	18,000
Retained earnings	(28,457)	(32,376)	(15,199)	18,417	71,217
Total equity	87,544	83,625	100,802	134,417	187,217
Non-current liabilities (term debt)	130,000	110,417	90,833	71,250	51,667
Trade & other payables	12,314	19,192	27,388	36,751	45,863
Revolving facility	0	15,795	38,356	51,091	45,405
Current portion of long-term debt	0	19,583	19,583	19,583	19,583
Current liabilities	12,314	54,570	85,328	107,426	110,851
Total equity & liabilities	229,857	248,612	276,963	313,093	349,734

Balance-sheet dynamics

Asset base

Non-current assets are established at commissioning — roughly R158
million of net property, plant, equipment and intangibles in Year 1 —
and decline gently as depreciation outpaces modest maintenance capital
expenditure. The visible growth in total assets is therefore driven by
working capital: inventory and receivables rise from a combined R57
million in Year 1 to R216 million by Year 5 as the business scales.

Capital structure and de-leveraging

Equity opens at R116 million (share capital plus the capital grant)
and is eroded by early losses before retained earnings recover and
compound from Year 3. Term debt holds at R130 million through the grace
period, then amortises from Year 3, falling to R71 million by Year 5.
The revolving facility draws to a peak of around R51 million in Year 4
before beginning to repay — well within its R85 million limit. The
combined effect is a business that visibly strengthens: equity rebuilds
while debt amortises.

Restricted cash

A R9 million debt-service reserve account is funded at close and held
constant as restricted cash throughout the plan, providing lenders with
a dedicated buffer equal to a meaningful portion of annual debt
service.

KEY POINT — The balance sheet is internally consistent
and self-checking

The model enforces a balance-sheet identity in every projection year:
total assets equal total equity and liabilities to within rounding (the
maximum imbalance across all five years is R0.1 thousand). The three
statements are linked — net profit flows to retained earnings, cash flow
drives the cash and facility balances, and capital expenditure and
depreciation drive the asset base — so the projections cannot silently
drift out of balance. This integrity is a baseline expectation for
lender diligence and is built into the model rather than
asserted.

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of Vela Footwear Manufacturing (Pty) Ltd.