In the agricultural sectors of emerging economies such as India, capital is king. It dictates power and ownership and therefore providers of capital capture the lion’s share of surpluses created in agribusiness value chains. Now a new investment model which employs Participative Capital is challenging the status quo. The concept was developed by community-led initiative Just Change, and is the first plan of its kind which links producers, consumers and investors to ensure more equitable and sustainable economic systems. This participatory model allows for investments to be made in a manner where ownership, benefit and risk are shared by all participants. In November 2011, 25 executives from 12 countries representing 15 organisations spent a week in India to produce a viable plan for Just Change to operationalise Participative Capital. This diverse group was comprised of emerging leaders from countries including Japan, India, Nigeria, and Malaysia nominated by global companies such as FedEx, BASF, NEC, Orix and Infosys. The business plan presented to JCI focussed on creating a new independent operating company with the governance structure that would allow the participation of producers, consumers and investors in the production and sales of tea and paddy - a model that was created with the means to be used for other commodity products.

1. Just Change
Business Plan To Operationalise Participative Capital
Changing The Role Of Capital
For Sustained Growth In Rural India
Produced by the participants of the Global Young Leaders Programme, November 2011

2. Table Of Contents
Executive Summary 3
Introduction 5
Background 6
Business Model 14
Business Development 27
Supply Chain Management 37
Community Benefits 44
Financial Analysis 50
Recommendations & Conclusion 65
Appendix 69

3. Executive Summary 1 of 2
• Just Change is a community led initiative that
grew out of the struggle of the Adivasis of
Gudalur, Tamil Nadu to improve and sustain
their livelihoods in the face of adverse market
forces
• An examination was conducted in the way the
currently economy is structured
• Just Change India has developed a concept to
address this issue – an international
cooperative of producers, consumers and
investors, enabled through a Participative
Capital business model
• The business model outlines the establishment
of a new “Operational Company”, that links
producers, consumers and investors to provide
mutual economic and social benefits
3

4. Executive Summary 2 of 2
• To operationalise Participative Capital an
estimated capital investment of INR 100
million (10 crore) is required in which a
return will be expected by the fourth year
• By sharing returns between investors and
community groups, rural community
livelihoods will be improved – returns are to
be managed through a robust governance
structure within a sustainable business model
• Community groups will re-invest the returns
into community programs such as education,
skills training and healthcare services as well
as channel a portion into stability funds
• The recommendation outlines a pilot project
with Tea and Paddy in Tamil Nadu , with the
intention for expansion into neighbouring
states and other commodity products
4

5. Just Change
Background and Objectives
I. Just Change India
II. Adivasis Journey
III. Global Tea Market
IV. Global Paddy Market
V. The Challenge
VI. Investment Plan Objectives

6. 3
Just Change India
• Just Change is a concept that grew out of the struggle of the Adivasi farmers of
Gudalur, Tamil Nadu to secure their livelihoods and live in dignity
• Around 2003, “Market forces” saw prices of tea leaves plummet to a level that is
threatening the farmers’ livelihoods, yet consumers worldwide continued to pay
high prices
• “Just Change” pioneered an alternative way of doing business which links poor
producers, consumers and investors to work together for mutual benefit
“a grassroots response to the global economy that has left the
vast majority of people powerless with little or no control over
factors that influence their lives...”
- Stan Thekaekara, Founder of Just Change
To foster a more just, equitable and sustainable economy for farmers
7

7. 3
Global Tea Market - Overview
• Tea is the highest consumed drink
in the world - production
dominated by China, India, Kenya
and Sri Lanka
• Export Market is dominated by Sri
Lanka, China and India with the
major players in the Import Market
being Pakistan, Japan and China
• No global institution exists in the
tea industry, only individual nations
have national Tea Boards or Tea
Associations
• Tea production is labour intensive
where the livelihoods of millions in
the rural areas are largely
dependent on tea picking and
processing
GLOBAL TEA PRODUCTION
Source: Tea Board of India, www.teaboard.gov.in
9

8. 33
Tea Market – Sustainability Issues
• Global prices have been declining
since 2000 due to the price
collusion by the oligopolistic tea
manufacturing industry
• A combination of price volatility
and the domination of the tea
supply chain by a few
international companies is
adversely affecting the
sustainability of the tea sector
• Working conditions and
livelihoods of plantation workers
and small scale farmers in tea
producing countries are under
growing pressure - most earn less
than Rs.100 a day.
10

9. 3
Global Paddy Market – Overview
• Rice cultivation is the principal activity and source of income for
millions of households around the world
• At the beginning of the 1990s, annual production of rice was around
350 million tons and by the end of the century it had reached 410
million tons
• Globally, India has the largest rice area and is second in rice
production, after China
• Among the exporting countries, Thailand, Vietnam, India and
Pakistan are the major countries exporting rice in sizeable quantity
11

10. The Challenge
“The YLP participants work closely with Just Change to address the challenge of
operationalising, on a larger scale, the concept of Participative Capital which is
envisioned to generate a more equitable economic and social benefit for the network
of producers and consumers as well as provide a return of investment to the
investors.”
*Sources: International Fund for Agricultural Development www.ruralpoverty.org & China vs. India: A Tale
of Two Plans, The Economist Network
Two thirds of India’s population are rural
farming communities with 30% living below the poverty line.
While the economy has been growing at 8% , agricultural output has
risen at only 3.3% per year*
POVERTY
Commodity retail prices largely benefit the intermediary branding and
packaging companies, wholesalers and retailers
MARKET
INEQUITY
Access to basic commodities like tea, rice and spices have become
disproportionately expensive for consumers and less profitable for
producers
COMMODITY
ACCESS
RESTRICTIONS
12

11. Investment Plan Objectives
• To create an investment framework for the operationalising of
Participative Capital
• To allow investors with aligned interests to become active
participants of social change while realising a financial return
• To ensure fair prices for producers so they have more control
• To deliver good quality products at fair prices to consumers
• To enhance and improve the overall societal development
• To create an investor framework that can be applied across
different commodity products and states in India
Creating a more just, equitable and sustainable economy
13

12. Just Change
Business Model
i. Purpose
ii. Participative Capital
iii. Benefits of Co-Destiny
iv. The Key Players
v. Business Model
vi. Organisational Structure
vii. Governance Overview
viii. Governance Approach

13. Purpose
• To outline the enterprise operating on the principles of
sustainability to also be run as a profitable business
• The bases of the enterprise is on the principle of Participative
Capital, to include the participation of producers, consumers
and investors
• The governance structure of the enterprise is to ensure
equitable returns are delivered to all stakeholders
15

14. 16
•Relationship reinforced among participants via co-existence and co-operation
towards a common destination and mutual economic and social benefits
Co-destiny
•The transactional value derived from the commodity, consumption and capital
from the network of producer groups, consumer groups and investors results in
surplus which in turn is redistributed equitably into the business or contributes
to improving the standard of living of the people in rural India
Value and
Surplus
•A structured Operating company linking consumer groups and producer
groups, focusing on supply chain efficiency and surplus distribution
Central
Governance
Participative Capital
Participative Capital is a concept that generates a more equitable economic and
social benefit for the network of producers and consumers as well as provide a
return of investment to the investors.
Sustainable business
income and growth
Equitable distribution
of economic benefits
Extend social benefits to
the greater community

15. Participative Capital - Visual Model
17

16. Benefits Co-Destiny
Capital
Investors
Producer
Groups
Community
& India
Consumer
Groups
Co-destiny
•Receive goods at a fair
price
•Improved quality of
products via improved
supply chain model and
governed process and
federation aggregator
•Better price stability via
Federation’s risk fund
•Enjoy economic & social
benefits from surplus
•Improve standard of
living in rural India
•Strenghting community
relationships
•Fair price for their
products
•More consistent
demand via a more
structured supply chain
and loyalty incentives
•Enjoy economic and
social benefits from
surplus
•Financial return on
investment
•Contribute to
betterment of society
e.g. minimise poverty
and improve standard of
living, healthcare and
education
•Small investment – Big
impact
18

17. The Key Players
Producer Groups
Farmers represented through
Local Societies at Village/Taluka
levels
Consumer Groups
• Cooperatives
• Mid-size wholesalers
• Local consumers in villages
Operating Company
(JCI Producer Company)
• Deploy ‘Capital’ provided by investors
• Process commodities provided by the
Producing Groups
• Distribute commodities to Consumer Groups
• Distribute financial returns to all stakeholders
Investors
Provide capital with the intent to generate financial return
19

18. Organisation StructureExternal
Auditors
Board of Directors
JCIPC ( Just Change India Producer Company )
JCT PG Shareholders GM Investor
Oversight /
Approval
Finance & Admin Operations
Supply Chain
Purchases
IT
General Manager (GM)
Community Relations
Marketing & Bus Dev Operation
Executive Director
Just Change Trust (JCT) Advisory/Think tank
21

19. Just Change India Producer Company
JCIPC - an Independent Operating Company
• JCIPC is to facilitate return on investment and build capacity to expand
product(s) and services
• JCT will continue to operate as a think tank, independent of JCIPC but
will also take an advisory role on Board of Directors
• Board of Directors consists of representatives from all the major
stakeholders to oversee and approve the major decisions made within
JCIPC, ensuring the direction and purpose of the entity remains
community driven
• The day to day operation of the entity is split into several business units
including: Finance & Administration, Operations and Community
Relations
22

20. Business Units 1 of 2
Role of Finance & Administration
• Investment management
• Governance of capital and
surplus
• Provide funding management
to Operations
• Distribute funding to producer
members
• Identify and manage financial
privileges for members (i.e.,
rebates)
• Human resource
administration and
management
• Internal audit
2323

21. Role of Operations
• Business Development & Marketing
• Marketing & communications
• Promotional materials
• Public relations
• Brand awareness
• Pricing
• Supply Chain
• Manage the market place
• Manage logistics
• Manage warehouse
• Purchasing
• Inventory management
• Supplier management
• IT
• Manage technology vendor
• Provide day to day technology
support
Business Units 2 of 2
24
Role of Community Relations
• Communication with
community
• Community development
initiative
• Community fund
Management

22. Business model and organisation structure will ensure:
• Compliance with all applicable laws and regulations
• Transparency and segregation of duties in the overall
administration of the Operating company (see business
model)
• Accountability of key stakeholders
• Effective management of the capital and financial surplus
distribution amongst investors, consumers and producers
• Profitable management of a multiple commodity products
enterprise (Rice, tea)
• Execution of strategy
Governance and management organisation structure is scalable for
multiple product(s).
25
Key Aspects of Governance

23. 26
Governance Approach
• Exclusive participation via shareholding in
Operating company, assurance of fair
price and quality goods and incentives to
promote continuous supply and demand
of commodity
• Selection criteria of participants in supply
chain for worthiness
• Central governance on surplus management
via Board of Directors of Operating company
benefitting consumer groups, producer
groups and investors
• Operating company to focus on business
development; match demand and supply as
well as ensure fair price, price stability and
quality goods
• Central governance on surplus
management via Board of Directors of
Operating company
• Dedicated community relations personnel
to focus on community development
initiatives
• A structured Operating company linking
consumer groups and producer
groups, focusing on marketing and supply
chain efficiency
• Selection criteria of vendors/suppliers for
worthiness
Sustainable business income
and growth
Equitable distribution of
economic benefits
Extend social benefits to the
greater community
Improved and efficient
marketing and supply chain

24. Just Change
Business Development
i. Purpose
ii. Market Strategy Overview
iii. Marketing Plan
iv. Branding Strategy

25. Purpose
• Participative capital is a new concept being introduced
amongst producers, consumers and investors and therefore a
strong marketing plan is required for successful business
development
• As a ‘start-up’ the main goal is to increase awareness and gain
the confidence of producer and consumer groups
• A secondary goal is to develop a strong brand which will build
trust and loyalty to JCPC
28

26. Marketing Strategy Overview
Top priority is
“Attracting Consumers & Producer Groups”
Marketing Strategy
Branding
Attracting
Consumer & Producer
Groups
STEP 1 STEP 2
29

27. Marketing Plan – Year 1 and 2
Main focus:
To attract Consumer and Producer Groups
Method
• Year 1 and 2 – focus on maintaining and extending consumer demands and
ensure production levels increase accordingly as well
• JCIPC will be using their in-house resources to achieve their first two years’
marketing goals
• The approach in the first two years do not require substantial investment
• After the first 2 years, once the base of producer/consumer have been founded
with investment flowing in, more substantial marketing activities are planned in
accordance with an increased budget for marketing expense
• Plans to attract producer and new consumer groups are outlined in the next two
slides
30
No substantial marketing expenses expected in years 1 and 2

28. Attracting Producer Groups
For existing producer groups/circle:
Suggested methods:
• Supply contract: premium at
signing of contract: e.g: INR20/kg
green leaves
• Guaranteed fixed buying price:
e.g: INR45/kg green leaves
• Share of surplus/volume unit
• First right to invest
• Group representative have
aggregated vote in decision
making process
• Access to education and health
care as members
• All groups benefiting from
participative capital
For new producer groups/circle:
Suggested methods:
• Multi level marketing:
producers earn eventual share
of surplus increases
• At signing supply contract:
entitled to the benefit package
offered to existing members
31

29. Attracting New Consumer Groups
Suggested methods
• Initially use word of mouth, going
through trusted organisations and
then using the success stories to
attract others, highlighting all the
benefits of participating
• Benchmarking against market price
and offering discounts
• Partnership with cooperatives in Tamil
Nadu, Kerala, and other states: % per
total volume to the cooperatives ;
mutual technical support;
• Referral scheme
• Membership discount for loyal
consumers
32

30. Marketing Plan – Years 3-5
Year 3 Year 4 Year 5
Producers Educate and visit new villages
on concept to get buy in and
develop relationships
Roll out rewards scheme for
new producers (commission)
Media campaign
Policy advocacy
Trade show
Best producer of the year award
Tea
Consumers
Newspaper ads
Flyers
Website
TV ad
Tea tasting
Product Promotion
Trade show
Study tour
Paddy
Consumers
Newspaper ads
Flyers
Rice tasting
Roadshow
TV ads
Website
Roadshow
Trade show
Study tour
*Eakgon Cellphone is a cellphone service for illiterate farmers to provide them with information on cultivation
Starting in year 4 the budgeted marketing expenses will increase allowing for
additional efforts in scaling up JCIPC’s operations.
33

31. Market Expansion Plan
Tea to be
sold [MT]
No. of
Society
Households
Year 1 100 5 20,000
Year 2 125 6 25,000
Year 3 188 8 47,000
Year 4 281 10 132,070
Year 5 422 15 557,335
Year 6 633 25 3,527,933
Period
Rice to be
sold [MT]
No. of
Society
Households
Year 1 2000 8 20,000
Year 2 4000 12 40,000
Year 3 8000 18 160,000
Year 4 14000 25 1,120,000
Year 5 21000 35 11,760,000
Year 6 30000 40 176,400,000
Period
In order to achieve the above mentioned figures, we will do the following
steps:
Step 1: Promote brand and bring societies on board
Step 2: Branding
*Projections are conservative and expected to be exceeded based on selling goods in open market
34

32. Branding Strategy – Just Change Tea & Rice
Promotion
• The brand will be
associated with
certain
communities i.e.
Raitasanga
• Create sense of
ownership /
relationship with
the brand
• Offer free samples to
potential consumers
• Multilevel marketing
• Use referrals and
word of mouth to
increase awareness
• Business tie-up with
entrepreneur groups
in the society
• Price penetration
within the different
groups of society
• Premium pricing for
different quality of
tea / rice
• Leverage on existing
retail chain outlets in
YR1 to mid YR2
• Set up new exclusive
retail outlets
• Location based
brand will serve as
potential tourist
destination site
35
Product Place
PricePromotion

33. Just
Change
Branding
“Supporting the
communiTEA”
“Just Change your rice”
Enabling a sense of ownership within the community
36

34. Just Change
Supply Chain Management
I. Traditional Supply Chain Model & Issues
II. Solution to the Traditional Model
III. Benefits of 3 Tier Supply Chain
IV. Why a Marketplace is Needed
V. Marketplace Framework
VI. Warehousing

35. Farmers
Mandis
(Market)
Aggregator
Processing
Packaging
State
Procurement
System
Intermediary
Distribution Hubs
Consumer
Registered
Dealer
Traditional Supply Chain Model & Issues
Issues
• Exploitation by dealers and
aggregators
• No common marketplace to:
• Buy and sell product
• Identify producers and
consumers beyond local
boundaries
• Share information
• No warehouse for temporary storage
• Lack of logistics network
Lack of marketplace between Producers and Consumers limits
fair trade and equitable growth
38

36. Village
Farmers
Producer
Group
Operating
Company
Consumer
Groups
Open
Market
Consumer
Warehouse
Solution to the Traditional Model
Tier 3 : Consumer Groups
• Sales & distribution to end consumer
Tier 2 : Operating Company
• Marketplace to link up producers and
consumers
• Warehousing/stock management
Tier 1 : Producer Group
• Process goods, packaging
• Sell goods to Operating Company
3 Tiers Supply Chain Model
3 Tier model links up producers and consumers directly
39

37. Benefits of 3 Tier Supply Chain Model
Producers enjoy:
• Increased margins due to direct sale to consumer
groups
• Easy access to information
• Ability to retain personal relationships
Consumers enjoy:
• Ability to search and price compare
• Lower prices due to direct purchase
• Decreased costs through the use of online auction
• Easy access to information to facilitate daily
operations
These benefits are obtained by using the marketplace
platform within the Operating Company.
Marketplace is the essence of 3 Tier Supply Chain Model
40

38. Why a Marketplace is Needed
A marketplace enables Producers and Consumers to:
• Communicate effectively
– Linking rural communities to
consumer groups
– Visibility of supply and demand
beyond local networks
• Trade, Buy and Sell
– Price creation and determination
– Match up willing buyer and seller
Marketplace brings producer and consumer groups together
41

39. Marketplace Framework
• Concept
• Create a marketplace platform online and through a mobile phone network for
Sellers and Buyers to go beyond the current limits of a traditional market
• Role
• Enable Producers and Consumers to buy and sell products beyond current
boundaries, by leveraging on the information and logistics network provided
and recommended by the Operating Company
• Establish the connection between Producers and Consumers, allowing them to
interact and communicate
Successful marketplace implementation needs warehousing
42

40. Warehousing
• Concept
• Serves as storage of products when there
is no immediate match in the Marketplace
between producers and consumers
• Operating company manages
logistics to Consumer for warehouse
products
Ｗarehousing enables sales at the right time and price
• Role
• Provides Producers with stable income with stable sales of products
• Provides Consumers with reliable supply of products
• Operating company’s purchase of product during oversupply eliminates
price volatility for Producers
43

41. Just Change
Community Benefits
I. Community Services Overview
II. Impact Opportunities
III. Financial Benefits
IV. Women Empowerment
V. Community Benefit Indicators

42. Community Services Overview
Primary issues faced by the community:
• Availability and usage of public health services and facilities is still
minimal at best - critical care services are often 100KM or more
away.
• Significant school dropout rates among children
• Market fluctuations often lead to significant income loss for rural
farmers who lack access to emergency funds, which results in the
loss of land – this has also led to a disturbing increasing trend of
alcoholism and suicide rates
45

43. Impact Opportunities
A Board of Directors of the Operating Company is to allocate certain
funds to address the community needs. This pilot program is to
focus on:
• Education and Skills Training
• Healthcare services
• Improved communication
• As returns increase as the operations scales up, additional
services may be introduced to address needs of other target
communities, including:
• Women’s empowerment
• Financial assistance through community funds for
contingencies
• Community services will roll out all activities & services via
existing community structures
46

44. 47
Financial Benefits
Current scenario, as is:
• Currently the producers are
organised only to a limited extent
while the power of collective
financial capability is not realised
so far
• The community borrow money
from local money lenders at a very
high interest rate when in need -
interest rates are often 3% /month
New initiatives:
Community loan fund
• To address financial constraints caused by
unforeseen events
• It is paid out as a low interest loan i.e.
interest sufficient to cover
administration, supervision & loan loss cost
with no element of profit taking
• Initial funding from Investors portion
• Kept sustainable by a) repayment by
borrowers b) surpluses generated by business
Implementation Needs:
• Group lending by way of cross guarantee
• Cap on borrowing size per borrower, loans are short term in nature 1-2 years
• Cap of number of loans to be lent in each financial year.
• Governance at project level to ensure compliance of operational/administrative
procedures & policies.
• Set up a team to operate the fund

45. 48
Women Empowerment
Current scenario, as is:
• Women’s power is not fully
utilised for the community’s
benefit
• Each woman is an individual
worker, therefore no leveraging
on the power of women as a
group
New initiatives:
• Build a stronger, happier and value
driven community through the groups,
focusing on:
– Managing household financials and
savings
– Collective bargaining of goods for
the community
• Visit other communities and villages to
learn and share best practices
• Reskill in areas to support execution of
the model (i.e., SNEHA group)
• Increase awareness of government
schemes and ways to take better
advantage of them
Implementation Needs:
• X* salaried women to visit
communities
• Driver(s)
• Car(s)
• Administrative support
*Number is scalable, depending on
membership

46. Community Benefit Indicators
Community Intangible benefits Tangible indicators
Producers Steady income Net increase in average income
Primary Education Number of children enrolled in primary
school
Literacy rate: percentage of people
Healthcare Number of injury deaths
Number of deaths in children age 1-59
months
Skills training Percentage of revenue growth in
community
Communications Number of people who has access to the
broadband internet including common
facilities
Consumers Lower retail price Discount rate: the percentage of deduction
of price compared to the market price
49
*Additional details on community opportunities in appendix

47. Just Change
Financial Analysis
I. Key Targets
II. Shareholding Principles
III. Capital Raising
IV. Surplus Distribution
V. Key Assumptions
VI. Financial Overview
VII. Sensitivity Analysis
VIII. Future Growth Driver

48. Key Targets
• Sustainable
• Multiple revenue streams creates surplus stability
• There will be two rounds of capital raising to maintain stable
cashflow for working capital and business expansion
• Scalable
• Profitability of business is highly dependent on scale and volume
• Model is dependent on Just Change’s ability to attract producers and
consumers
• Lowering marginal costs and capital expenditures create attractive
margins for business expansion
• Large potential for growth
• Flexibility of business model promotes expansion into more
commodities (such as spices, vegetable oil, cotton, cocoa etc.)
• Case study of tea and paddy is highly promising
The economics of participative capital delivers financial gains
51

49. Shareholding Principles
Participative
Shareholding
Model
90 (Capital to be repaid) 10
218
Surplus 20
90%
10%
90-18 = 72 28
4272-14 = 58
14 6
Surplus 20
72%
28%
52
The Shareholding structure is not only determined by capital contribution but also by
participative contribution to the business
The shareholding of producers increases as the initial capital investment is repaid
Investors will provide the capital for the business,
and producers will be providing their labour and
sweat capital
Example of Participative Shareholding

50. Capital Raising - Shareholding
PRODUCER
SHAREHOLDING
COMPANY
Capital
10%
Capital
90%
INVESTOR
Capital
100%
Sweat Capital
Shareholding
Interest on day 1
10% 90%
Producers become shareholders by investing labour capital
The operating company will
make an upfront commitment
of 10% of capital raised to
invest in a community fund on
day 1
The shareholding structure is
linked directly to the amount
of invested capital left to be
repaid
The long term stable
shareholding relationship will
primarily benefit the
producers
COMMUNITY
FUND
FUND TO
BUSINESS
53

51. Capital Raising - Overview
Bridging the gap
90%
10%
Investor Capital Breakdown
Business Capital
Commitment to Community
Total Participative Capital
Investment
INR 100M
Upfront commitment to communities
• Capital raising will occur in two rounds, both
raising INR 50M
• Second round will take place in year three of
operations
• Producer communities will have an
opportunity to invest in the second round of
capital raising
50%
20%
30%
Business Capital Breakdown
Working Capital Marketing
Stability Fund
54

52. Capital Requirements - Overview
50%
20%
30%
Working Capital Marketing Stability Fund
The capital raised will be primarily used for working capital
To mitigate financial risks arising from
supply and demand mismatches and
production shortfalls due to natural
forces, a stability fund will be
established
Marketing and brand building will be
essential in establishing our business
operations and is a key consideration
during the capital raising process
The business will require a large
provision of capital for working capital
needs especially in the beginning stages
of operations
INR 90M
55

53. Overview – Surplus Distribution
The distribution of surplus will filter through 3 levels
First 3
Years
Stable
Distribution
Beginning
Distribution
Stable
Distribution
Multi-level surplus
distribution
structure
56

54. Overview – Surplus Distribution
• The operating company will retain 100% of the surplus in the first three
years to build the business
• Thereafter, the operating company will retain a constant 25% of surplus
to maintain operations
• Of the remaining 75%, surplus will be distributed to both the producers
and investors with the division skewed towards the investors until the
original capital invested has been repaid
• The producers’ share of the surplus will be returned in the form of cash
and community investments via the community fund
Investors benefit more at the start of the venture. Upon
capital repayment, majority of surplus goes to producer
57

55. Key Assumptions
Assumptions provided from sources within the producer communities
Rice Tea
Y1 Y3
Commodity Annual Growth Rate
Tea 25% 50%
Y1 Y3 Y5
Commodity
Paddy
Composition
Cost
INR/kg
Sell INR/kg
Unbroken Rice 68% 18.5 22 24 26.25
Broken Rice 7% 9 11
Husk 20% 4 5
Rice Bran 3% 27 37
Y1 Y2 Y3 Y4 Y5
Commodity Annual Growth Rate
All Rice Products 100% 100% 75% 50% 43%
• Rice production anticipated for high growth in the first three years that
will then taper off
• Conversely, tea’s growth rate is expected to accelerate after the second
year of production
• No expected growth in broken rice, husk and rice bran in 5 years as their
contribution in terms of value is small
Y1 Y2 Y3 Y1 Y2 Y3
Commodity Cost INR/kg Sell INR/kg
Tea (Mass) 70 75 80 100 112 125
58

56. Financials – Income Statement
Margins increase with scaling efficiency
Financial Overview (INR M) Y1 Y2 Y3 Y4 Y5 Y6
Total Sales 45.7 85.4 177.2 304.3 488.6 702.0
Total Cost of Goods Sold 43.6 79.6 157.9 269.9 404.6 578.8
Net Profit -1.4 -0.5 9.3 17.5 49.8 72.9
Gross Margins 19.9% 20.4% 20.1% 19.8% 25.1% 25.1%
Net Profit Margin (%) -3.1% -0.6% 5.2% 5.8% 10.2% 10.4%
59

57. Financials – Gross Income
Higher margins obtained with economies of scale
Warehousing (INR M) Y1 Y2 Y3 Y4 Y5 Y6
Total Paddy (MT) 2000 4000 8000 14000 21000 30000
COGS 29.6 59.3 126.7 221.8 332.6 475.2
Sales 35.7 71.4 153.6 268.8 435.3 621.9
Total Tea (MT) 100.0 125.0 187.5 281.3 421.9 632.8
COGS (INR M) 7.0 9.4 15.0 22.5 33.8 50.6
Sales (INR M) 10.0 14.0 23.4 35.2 52.7 79.1
Cash Surplus (INR M) 9.0 16.7 35.3 59.7 121.7 175.2
Gross Margins 19.8% 19.6% 19.9% 19.6% 24.9% 25.0%
Participation Fee (INR M) Y1 Y2 Y3 Y4 Y5 Y6
Paddy Volumes handled (MT) 1360 2720 5440 9520 14280 20400
Paddy Value 29.92 59.84 119.68 209.44 314.16 448.8
Tea Volumes handled (MT) 50 250 500 700 1200 1800
Tea Value 5 25 50 70 120 180
Participation Fees 0.35 0.85 1.70 2.79 4.34 6.29
Participation & Vendor Fees 0.35 0.89 1.85 3.09 4.84 7.29
60

58. Financials – Operating Margins
Operating Cost (INR M) Y1 Y2 Y3 Y4 Y5 Y6
Headcount 5 6 7 8 8 9
Salary and Wages 1.7 2.3 2.9 3.6 3.9 4.1
Office exp. Including rental(SGA) 1.2 1.2 1.8 1.8 2.2 2.2
Marketing(SGA) 0.9 1.8 1.4 2.3 2.5 3.6
Promotion(SGA) 0.9 1.8 1.4 2.3 2.5 3.6
Warehouse costs 0.3 0.6 1.2 2.1 3.2 4.5
Transport Costs 4.2 7.0 10.9 18.6 29.9 42.9
Training Camp costs(SGA) 0.9 1.8 1.4 1.6 2.5 3.6
Interest (10% rate) 0.0 0.0 0.0 1.2 3.0 6.0
Total Operating Cost 10.1 16.4 20.9 33.6 49.5 70.5
Operating Margin -4.3% 0.0% 7.7% 8.8% 15.3% 15.8%
Supply chain costs make up the majority of OPEX
61

59. Financials – Returns to Investors
Investor Interests Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
Investor Shareholding (%) 90.0% 90.0% 90.0% 88.7% 85.5% 69.5% 35.0% 35.0% 35.0% 35.0%
Surplus to Investors (INR M) - - - 6.3 11.6 32.0 38.0 21.1 23.2 25.5
Investor IRR (%) - - - -86.3% -48.8% -15.6% -0.6% 4.3% 8.1% 11.0%
Participative capital investing is a fairly new
investment concept
The expected return is relatively lower in
comparison with conventional investments
This model offers an investor the
opportunity to enhance the community’s
well being in India
Investors can fulfill an engaging relationship
with a community for better living.
The investment gives the community a sense of purpose
62

60. Sensitivity Analysis
Net Profit (INR M) Y1 Y2 Y3 Y4 Y5 Y6
Best Case (+20% Production) 5.0 11.4 34.1 60.1 118.2 171.2
Base Case -1.4 -0.5 9.3 17.5 49.8 72.9
Worst Case (-20% Production) -7.8 -12.5 -15.5 -25.1 -18.6 -25.4
Investor IRR Y4 Y5 Y6 Y7 Y8 Y9 Y10
Best Case -79.5% -39.0% -7.8% 3.8% 9.2% 13.1% 16.1%
Base Case -86.3% -48.8% -15.6% -0.6% 4.3% 8.1% 11.0%
Worst Case -93.5% -59.0% -26.4% -9.1% -1.6% 1.8% 4.7%
Water and weather conditions have a strong impact on crop
production and financial performance
63
Because weather conditions will change year to year, the
worst case scenario where production is consistently
below estimates is highly unlikely

61. Future Financial Growth Driver
Scale up requires additional margins to be obtained through
the optimisation of the supply chain
64

62. Recommendations & Conclusion
I. Implementation Milestones
II. Risk Assessment Matrix
III. Recommendations & Conclusion

63. Implementation Milestones
Create
Operating
Company
Source &
Implement
Supply Chain
Year 2Year 1 Year 3
Secure
Capital
Year 4 Year 5
Investor
Surplus
Distribution
Community
Investments
Attract and enlist Producer and Consumer Groups
66
Sign up
producer, consum
er groups
Community
benefits
defined
Create
brand
Community
benefits
defined
5 year implementation plan
*Additional details on Implementation Plan in Appendix

64. Risk Assessment Matrix
Lack of alignment of goals of members of Operating
Company and Board of Directors
Lack of transparency in the administration of the
Operating Company and Board of Directors
Thin spread of surplus due to overwhelming
community requests
Ineffectiveness of and lack of outreach of community
programmes
Limited market penetration
Lack of confidence of investors in profitability of
business venture
Commodity price volatility
Inability to secure funding to commence
implementation of business model
Production downtime due to poor
maintenance and power outages
1
2
3
4
5
7
8
9
Poor quality commodity10
Supply chain failure impacting commodity distribution11
12 Commodity supply outweighs demand
5
8
2
3
7
Likelihood
Impact
9
Low Medium High
LowMediumHigh
1
4 6
10
11
12
67

65. Recommendations & Conclusion
• In keeping with the vision of Just Change, a methodology in
‘operationalising ‘ a Participative Capital business model has been
created
• Recommendations include the establishment of a new ‘Operational
Company’ that not only links the producers and consumers but also
investors
• The recommendation outlines a pilot project with Tea and Paddy in
Tamil Nadu and Kerala regions respectively, with the intention for
progressive expansion
• With a capital investment of INR 100M, estimated initial
investments will enable scaling resulting in operating profits from
year 3 onwards
• The venture is expected to improve the livelihoods of rural
communities, producers and consumers alike, whilst providing a
sustainable business model for the success of stakeholders
68

66. Just Change
Appendix
I. Assumptions
II. Financial Details
III. Governance
IV. Community Opportunities
V. Detailed Implementation Plan
VI. Risks and Mitigation

67. Assumptions
• Governance and structure created with a focus on the tea and
rice business
• Marketplace system can be set up to be used via mobile phone
network and online – platform software to be developed
• All producer and consumer groups have access to mobile
phones (SMS)
• Logistics infrastructure exists for the delivery of goods
• Surplus distribution and implement plan assumes profit
70

68. Income Statement
Brokerage Y1 Y2 Y3 Y4 Y5 Y6
Volumes handled (MT)* 3660 7283 14331 24806 37359 53518
Brokerage & Vendor Fees** 0.05 0.29 0.65 1 1.7 2.8
Warehousing Y1 Y2 Y3 Y4 Y5 Y6
Total Tea (MT) 250 313 391 586 879 1318
COGS (INR M) 18.8 23.4 29.3 43.9 65.9 98.9
Sales (INR M) 31.3 39.1 48.8 73.2 109.9 164.8
Gross Margin 12.5 15.6 19.5 29.3 43.9 65.9
71
With economies of scale, better margins can be generated
*Volume reflects the total volumes handled for brokerage as well as warehousing for tea and
paddy
** Brokerage & Vendor Fees are one of the income streams along with Warehousing, income
from brokerage reflects only the brokerage volumes

69. Financial Overview
(INR M) Y1 Y2 Y3 Y4 Y5 Y6
lNCOME 67 110 192 323 485 701
COGS 60 101 177 299 445 639
PBIT 2.2 1.1 1.5 3.7 7.4 13.6
Sales
COGS
PAT
0
100
200
300
400
500
600
700
800
Y1
Y2
Y3
Y4
Y5
Y6
72

70. Operating Costs
(INR M) Y1 Y2 Y3 Y4 Y5 Y6
Salary and Wages 1.16 1.36 1.51 1.61 1.61 1.71
Offic exp. Inclu rental 1.2 1.2 1.8 1.8 2.16 2.16
Marketing 0.06 0.08 0.10 0.15 0.22 0.33
Promotion 0.06 0.08 0.10 0.15 0.22 0.33
Warehouse costs 1 1 0.8 0.8 1 1
Transport Costs 3.8 4.7 5.9 8.8 13.2 19.8
Training Camp costs 0.25 0.31 0.39 0.59 0.88 1.32
Total Operating Costs 7.49 8.72 10.51 13.83 19.27 26.62
73
Transport costs is the majority of operating costs – accounts
for more than 50%

71. Capital Required
90%
10%
Investor Capital Breakdown
Business Capital
Commitment to Community
50%
20%
10%
20%
Business Capital Breakdown
Warehousing Working Capital
Marketing Stability Fund
Total required
participative
capital investment
• 2M USD (100M
INR, 10 crores)
74
Investment :
2M USD
100 M INR
Business Capital
1.8M USD
90M INR

72. Member Role Hiring profile
General Manager [1] -Decision maker in General
Management Group (GMG)
-A dynamic individual who is experienced in agriculture
business (Min. 5 years experience)
Finance Manager[1] -Manage daily operation related to
finance such as surplus management or
capital management
-A dynamic individual who is experienced in agricultures
business as well as with the financial industry (Min. 3 years
experience)
Supply Chain Manager
[1]
-Manage daily operation related to
supply chain
-A dynamic individual who is experienced in agricultures
business as well as with Supply Chain management and
inventory control (Min. 3 years experience)
Purchasing Manager [1 ] -Manage daily operation related to
procurement
-A dynamic individual who is experienced in agricultures
business as well as with previous procurement experience
(Min. 3 years experience)
Marketing & Bus Dev
Manager [1+1member]
-Manage daily operation related to
marketing & Business Development
-A dynamic individual who is experienced in agricultures
business as well as experienced with marketing and
business development in the rural sector (Min. 3 years
experience)
IT Manager [1] - Manage daily operation related to
Business Development such as
distribution strategy
-A dynamic individual who is experienced in agricultures
business as well as IT experience in the rural sector (Min. 3
years experience)
Community Relation
Manager [1+1member]
-Manage daily operation related to
community relations
-A dynamic individual who is experienced in agricultures
business (Min. 3 years experience)
Detail of JCIPC General Mgmt Group
77

73. Community Opportunities: Education
Current State
• High rate for school dropouts
• Dominant child labor
New Initiatives
• Increased access to education
facilities by actively engaging
government in partnership with
NGOs
• Extend financial assistance to
impoverished households
• Obtain computers for schools
through donations from
corporations
Education for the Future
79

74. • Rural farming communities have
limited skill sets that prevent
them to pursue secondary
sources of income
• Growers among the
communities are not exposed to
effective crop
cultivation/production methods
and have less than optimal
output
Current State New Initiatives
• Impart training to generate
secondary source of income
• Partner with agricultural
agencies to provide trainings
on latest
cultivation/production
methods
• Extend training in basic
business for enterprising
members so that they can
successfully start and run
small businesses
Community Opportunities: Skills Training
Training for Alternate Livelihoods
80

75. • Rural communities often under
utilise the public health services
mainly due to lack of awareness
• Insufficient specialists available:
Critical cases referred to places of
distances of 100KM or more
Current State New Initiatives
• Increase awareness on the
need for healthcare with the
help of local community
organisations and public
health officials
• Encourage expectant mothers
to go for continued follow up
checks
• Bring public health officials to
villages for basic medical
checks ups and immunisation
for children and women
Community Opportunities: Healthcare Services
Healthcare is key for good well being
81

76. Current State New Initiatives
• Lack of awareness of
government schemes
• Very limited interaction
between producers and
consumers resulting in lost
opportunities
• Build community groups to
influence government
policies/decisions to protect
community interests.
• Increase awareness on government
schemes and programs related to
development of rural communities
• Build communication channels
(phone & internet access) to
facilitate interaction & information
sharing between producers,
consumers, investors, government
etc.
Community Opportunity: Access to Information
Keeping Communities and Stakeholders Connected
82

77. Community Opportunities: Additional Initiatives
• Take initiatives that will
empower the community
through creation of Stree-
shakti groups
Improving Standards for Community Stability
• Develop a community loan fund
to address emergency financial
needs by extending a low
interest loan
83

78. Implementation Plan – Year 1
Identify Project Manager/Lead for Participative Capital Initiative JCT
Attract investors JCT
Secure 1M Capital JCT
Hire Operating Company resources (Finance, Operations, Business
Development)
JCT
Establish fund to manage 1M capital Finance
Define and implement producer group membership requirements,
needs & structures (i.e., tracking)
Bus Dev
Define and implement consumer group membership requirements,
needs & structures
Bus Dev
Create outreach materials to attract producer/consumer groups Bus Dev
Identify and attract producer and consumer groups (i.e., Tea/Rice
tasting road shows, community visits)
Bus Dev
84

79. Implementation Plan – Year 1
Hire additional Operating Company resources (Community
relations, additional Operations)
JCT
Sign up producer and consumer groups Bus Dev
Source supply chain resources (warehouse, logistics, Market Place
software)
Operations
Secure financing for supply chain resources Finance
Implement supply chain solutions Operations
Create Board of Directors & elect Chairperson JCT
Define methods to communicate with producers/consumers Bus Dev
85

80. Implementation Plan – Years 2-5
Year 3
Research Community Service needs of producer communities
Design Community benefit indicators
Define and create branding and packaging
Year 4
Prioritise community services based on needs
Design operation plan and budget for community services
Distribute surplus to investors
Year 5
Launch community services to producer communities
86

81. Risk Assessment & Mitigation
87
No. Risk Functional
Area
Likelihood Impact Risk Mitigation
1. Lack of Alignment of Goals of
members of the Operating
Company and Board of
Directors
Governance LOW HIGH 1. Define clear roles and
responsibilities of each role in
the Governance Structure
2. Rotation through election of key
roles in Operating Company and
Board of Directors
3. Just Change to play an
intermediary role in any disputes
or alignment issues
2. Lack of transparency of the
administration of the
Operating Company and
Board of Directors
Governance LOW MEDIUM 1. Establishment of a strong
corporate governance model,
transparency in systems,
processes, decision making with
clear roles and responsibilities
and segregation of duties
embedded in the organisation
3. Overwhelming requests for
community and social benefit
programmes resulting in thin
spread of surplus and
minimising social impact of
initiatives
Community MEDIUM MEDIUM 1. Community and social benefit
programmes to be agreed upon
and prioritised (eg. top 5) by the
established Governance
structures

82. Risk Assessment & Mitigation
88
No. Risk Functional
Area
Likelihood Impact Potential Risk Mitigation
4. Community programmes are
not effective and reach only a
certain portion of the
community resulting in
minimal social impact,
potential escalation of social
issues, disparity, jealousy and
conflict
Community MEDIUM MEDIUM 1. Establishment of Key
Performance Indicators
(KPIs) for measuring benefits
of community programmes
2. Implementation of robust
communication channels to
the various stakeholders of
the business model
5. Limited market penetration
resulting in low revenue
growth
Business
Development
LOW HIGH 1. Implementation of effective
marketing strategy striking a
balance of economic and social
benefits
6. Lack of confidence of
investors in profitability of
venture and supporting risk
management and control
processes
Finance MEDIUM MEDIUM 1. Establishment of a strong
financial and risk management
policies and procedures with
clear segregation of duties and
delegation of authorities
framework embedded in the
Finance Function of the
Operating Company
2. Provision of a robust financial
model outlining profitability and
cash flow projections

83. Risk Assessment & Mitigation
89
No. Risk Functional
Area
Likelihood Impact Potential Risk Mitigation
7. Commodity Price volatility
resulting in uncertainty in
revenue streams
Finance MEDIUM HIGH 1. Monitoring undertaken by
Operating Company on
commodity markets and
pricing trends
2. Utilise Delayed Marketing
mechanism to manage price
volatility
8. Inability to secure funding to
commence implementation of
business model
Finance MEDIUM HIGH 1. Secure strong investors with
like-mindedness on both the
economic benefits and long term
social view
9. Production downtime due to
poor maintainence and power
outage resulting in supply not
being able to meet demand
and a loss of revenue
Supply Chain LOW HIGH 1. Implement robust preventive
maintenance plans
2. Implement backup generators to
supplement primary source of
electricity

84. Risk Assessment & Mitigation
90
No. Risk Functional
Area
Likelihood Impact Potential Risk Mitigation
10. Poor Quality Commodity
impacting business venture
economic and social interests
Supply Chain LOW MEDIUM 1. Stringent Quality Criteria
established by Operating
Company
2. Quality Control checks
undertaken by Operating
Company
11. Failure in supply chain to
distribute commodities to
consumer groups on a timely
basis
Supply Chain LOW HIGH 1. Establishment of Key
Performance Indicators
(KPIs) for measuring and
monitoring supplier
performance
2. Multi supplier strategy to
ensure contingency suppliers
in the event of supplier failure
3. Stringent Supplier
Assessment as part of
selection criteria
12. Supply outweighs Demand
resulting in excess
commodity and wastage
Supply Chain MEDIUM HIGH 1. Channel excess supply to
auction houses and other
trading houses
2. Stringent Demand and
Production Planning
undertaken by Operating
Company
3. Maintain contingency funds to
sustain farmers livelihood

85. Thank you
If you are interested in more details about the business plan please contact the Global Institute For Tomorrow
Suite 1111, CityPlaza One, 1111 King’s Road, Taikoo Shing, Hong Kong
Tel: (852) 3571 8103 www.global-inst.com