Pepper Club The Hottest Address in Cape Town

The Investment Consists of: An apartment (Sectional Title Ownership) A furniture pack by a leading hotel designer, A rental pool operated by experienced hotel operators

Payment terms Apartment & Parking Bay – 20% deposit : 7 days from signature – Balance of purchase price on Transfer Note: Investors also purchase a standard furniture pack (not financed by the banks) priced from R

Projected Revenue 8.5% for the first year of operation (Mar 2010 to Mar 2011) increasing by 10% pa Or guaranteed 7% pa - for 2 years

Taxation - Allowances UDZ Allowance – 55% of unit cost – 11% in the first year – then 4.4% for 10 years Depreciation Allowance – 20% pa on the cost of the Furniture pack Tax Deductable Interest – Interest payable on all funds borrowed to finance the investment is tax deductable Assessed Tax Losses – Tax Losses may be set off against any other taxable income or may be carried forward to following tax periods

Taxation – Based on R1,4m Investment plus R Furniture Pack 80% Mortgage Projected Interest Total Tax Net Rental UDZ 9.5% Allowances Year 1 134,300 (154,000) (36,000) (106,400) (296,400) Year 2 147,730 ( 61,600) (36,000) (103,750) (201,350) Year 3 162,503 (61,600) (36,000) (99,571) (197,171) Year 4 178,753 (61,600) (36,000) (93,593) (191,193) Year 5 196,628 (61,600) (36,000) (85,503) (183,103) Total 819,914 (400,400) (180,000) (488,816) (1,069,217)

Total Return – 80% Mortgage Net Capital Total Return on Income Appreciation Return Investment After Mortgage Interest R R R Year 1 27, , , % p.a. Year 2 43,980173, , % p.a. Year 3 62, , , % p.a. Year 4 85, , , % p.a. Year 5 111, , , % p.a. Average % p.a. Total 331,097964,606 1,295,703

INVESTOR – 80% LOAN Projected Income, Tax Free to Year 8 Projected period to repay loan only out of projected income In year 10

30 Days Free Usage An Investor may occupy his apartment for 30 days each year, free of rental.

Pepper Club The Hottest Address in Cape Town Only the contents of Agreements signed by the parties may be relied upon. All other representations, written or verbal, are not warranted