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Table of Contents

1.0 Executive Summary.....................................................................................................................1


1.1 Objectives....................................................................................................................................2
1.2 Mission...........................................................................................................................................2
1.3 Keys to Success.........................................................................................................................2
Chart: Highlights...........................................................................................................................3
2.0 Company Summary......................................................................................................................3
2.1 Company Ownership................................................................................................................3
2.2 Location & Facilities..................................................................................................................4
2.3 Company History.......................................................................................................................4
Chart: Past Performance............................................................................................................4
Table: Past Performance.............................................................................................................5
3.0 Products and Services.................................................................................................................6
4.0 Market Analysis Summary.........................................................................................................7
4.1 Market Segmentation..............................................................................................................8
Table: Market Analysis................................................................................................................9
Chart: Market Analysis (Pie).....................................................................................................9
4.2 Target Market Segment Strategy........................................................................................9
4.3 Competition and Buying Patterns.....................................................................................10
5.0 Strategy and Implementation Summary...........................................................................11
5.1 Competitive Edge....................................................................................................................11
5.2 Milestones..................................................................................................................................12
Table: Milestones.........................................................................................................................12
Chart: Milestones........................................................................................................................12
5.3 Marketing Strategy.................................................................................................................13
5.4 Sales Strategy..........................................................................................................................14
5.4.1 Sales Forecast..................................................................................................................14
Chart: Sales Monthly.............................................................................................................15
Chart: Sales by Year..............................................................................................................15
Table: Sales Forecast.............................................................................................................16
6.0 Management Summary.............................................................................................................17
6.0 Management Summary.............................................................................................................17
6.1 Personnel Plan..........................................................................................................................17
Table: Personnel..........................................................................................................................17
7.0 Financial Plan................................................................................................................................18
7.1 Important Assumptions........................................................................................................18
Table: General Assumptions...................................................................................................18
7.2 Break-even Analysis...............................................................................................................19
7.2 Break-even Analysis...............................................................................................................19
Table: Break-even Analysis.....................................................................................................19
Chart: Break-even Analysis....................................................................................................19
7.3 Projected Profit and Loss.....................................................................................................20
Chart: Profit Monthly.................................................................................................................21
Chart: Profit Yearly.....................................................................................................................21
Chart: Gross Margin Monthly.................................................................................................22
Page 1

Table of Contents

Chart: Gross Margin Yearly.....................................................................................................22


Table: Profit and Loss................................................................................................................23
7.4 Projected Cash Flow...............................................................................................................24
7.4 Projected Cash Flow...............................................................................................................24
Chart: Cash...................................................................................................................................24
Table: Cash Flow.........................................................................................................................25
7.5 Projected Balance Sheet......................................................................................................26
Table: Balance Sheet.................................................................................................................26
7.6 Business Ratios........................................................................................................................26
Table: Ratios.................................................................................................................................27
Table: Sales Forecast...........................................................................................................................1
Table: Personnel....................................................................................................................................2
Table: Personnel....................................................................................................................................2
Table: Profit and Loss..........................................................................................................................3
Table: Profit and Loss..........................................................................................................................3
Table: Cash Flow...................................................................................................................................4
Table: Balance Sheet...........................................................................................................................5

Page 2

Kouros Brothers Ltd.

1.0 Executive Summary


Kouros Brothers Ltd. is an agriculture machinery and implements manufacturer importer and
authorized reseller that sells A-Z series of heavy machinery and systems for
Potatoes, Vegetables, Cereals, Stubble, and beach cleaning turn key projects and machinery.
We have also patented and piloted four innovative machinery and systems the last 6 years for
Vegetable and Cereal productions. Is also the sole and exclusive agent and dealer of 10 main
agriculture manufacturers in Europe. It has managed to create communication links and
to export its series of machinery in Middle East and Syria the last 3 years.
Kouros Brothers Ltd. has an experienced management team with direct knowledge of the
industry, extensive research experience, and unique administrative skills. Its team includes
Mr. Kouros and Mr Panikos Stella live in Larnaca, Cyprus. Both Owners have compiled an
extensive list of customers/potential customers, vendors, and contacts for equipment
consignment.
New Opportunity
Last week it was announced by the Ministry of Agriculture, Natural Resources and Environment
that EU has available 256 million Euro for funding from 65%-80% of all units or producers
intending to modernize and use technological advances in order to improve customers'
(Agriculture Producers') product quality and to be able to export goods into European markets
at competitive prices.
We have a good reputation locally, but sales are slow because local farmers cannot buy new
equipment every year. With Cyprus' admission to the EU, this large amount of funding will let
farmers buy more and newer equipment. However, the local farmers will only buy equipment
they know to be effective; the best way to convince them, in our experience, is to bring a
sample of equipment to their fields to demonstrate.
Kouros Brothers Ltd. has good earnings and assets, but we do not have enough cash on hand
to buy the wide range of demonstration equipment we need to meet the sales potential created
by the upcoming Government funds to our customers. The company intents to employ local
individuals and to provide extensive training about its products and services in order to promote
its sales. Loyal customers help to expand the company's business area by word-of-mouth.
We have already identified a list of potential customers and communities that are willing and
able to try its new product series. Even more so, the pilot equipments will be used for
the upcoming October International fair for Agriculture and Livestock that will take place, at
Nicosia, Cyprus. And also, the company plans to participate in the Thesalloniki state Agricultural
fair that will take place on the 28th January next. As a sole agent and sales representative for
Cyprus, Greece and Syria for some series of Wheat planting systems, the company needs to
promote its series of products to all available marketing opportunities.
The company is seeking funding of the amount of 50,000 for the purpose of expanding the
business. Expansion plans include the purchase of additional equipments allowing the company
to promote and to demonstrate its products and services, and also by hiring additional
personnel. This loan will be paid back in 6 years, with principal payments of 5,833/year, at
8.5% interest. This is on top of the existing 10,000 loan, which will be paid back on the same
time frame, at roughly 1,666/year.

Page 1

Kouros Brothers Ltd.

With this new demonstration equipment, and well-funded customers, our projected revenues
for Year 1 are expected to reach 274,200, and up to 400,000 by Year 5.
1.1 Objectives
The Kouros Brothers Ltd. directors believe that, there is a current untapped market
opportunity for agriculture machinery because, existing providers of agriculture machinery and
implements are too diversified to serve the increasingly specialized needs of the
potato segment, by ignoring the crop needs for mechanization of Vegetables, Cereal, wheat and
livestock sectors.
The company's coverage area is constantly increasing, as customers are becoming aware of the
company's presence. European community offers a real business opportunity for such
expansion, because now, there are 256 million Euro available for agriculture funding and
support by EU agriculture committee, left to the Cyprus Government, to fund the Local Farmers
and Agriculture producers for upgrading their production effectiveness and efficiency.
1.2 Mission
Kouros Brothers Ltd. mission is to become THE exclusive full-service equipment manufacturer
and authorized importer, sales, and service company in agriculture machinery and implements
in Cyprus and to expand its business to Middle East, with the ability to satisfy all needs of
Livestock farmers and Agriculture producers.
Therefore, the company's strategy is to create a limited geographical niche for itself, where
there will be no potential competitors. Kouros Brothers Ltd. aims to offer highquality agriculture equipments and machinery for crop mechanization of potato, vegetables and
wheat crops at a price which is competitive in comparison to other premium-quality commercial
machinery manufacturers in the local market.
1.3 Keys to Success
Kouros Brothers Ltd.'s keys to success will include:
1.
2.
3.
4.

A high level of quality in its product line.


A-Z equipment mechanization series for Vegetables, Cereals, Potatoes & Livestock.
Maintaining and growing its referral networks to generate new and repeat sales.
Significant investments in research and development of machinery with the aim to focus on
precisely controlled equipment (Coriander seed, carrot machines etc.).
5. Improving efficiencies of operations and to reduce the crop producers operating costs.
6. Link with Consulting offices for Agriculture and Scientific support to its Customers.
7. The machinery and Systems of Kouros Brothers Ltd. aim to help Cypriot farmers and
Agriculture producers to export their products in the European market and to obey all
European directives for product quality.

Page 2

Kouros Brothers Ltd.

Chart: Highlights

2.0 Company Summary


Kouros Brothers Ltd. is a manufacturer of heavy Agriculture equipments and Euro, with one
location in industrial Estate area, Larnaca. The company began its operations since 1963 with
little capital investment. The company combined 40 years of experience in the Agriculture
machinery and Implements field to generate a large customer base, where until recently owned
80% of the local Potato machinery market.
The company is specialized into Potato planting and mechanization. After Cyprus accession into
EU the company's Directors decided to expand their field of products and to diversify into
Cereal, vegetables and livestock. Kouros Brothers Ltd. hopes to initially make a successful effort
to secure start-up financing to implement a new business opportunity.
2.1 Company Ownership
Kouros Brothers Ltd. is a limited liability company. Mr. Kouros Stella Zither, Mr. Panikos Stella,
and Mr. Andreas Stella are the shareholders, owning 66%, 26% and 8% of the share capital,
respectively.

Page 3

Kouros Brothers Ltd.

2.2 Location & Facilities


The company has one office currently located in Industrial Area, at Our Town. The factory is
only 3.5 kilometers from the center of town and is located on the front line of the industrial
area. It has a 500 sq. meter showroom and is visible from the main road.
The factory has 3000m2 of shop floor area, where all manufacturing equipments and facilities
are located and used for either maintenance or manufacturing of equipments and implements.
The factory facilities are open from 07:00 - 17:00 hours, Monday to Friday. The company does
receive after hours calls or on weekends and provides assistance as needed.
2.3 Company History
Kouros Brothers Ltd. was founded in Our Town, Cyprus in 1963, to manufacture and to sell a
complete A-Z series of potatoes crop mechanization. The company was formed by the Stella
Zither family: Mr. Kouros Stella Zither, Mr. Panikos Stella, and Mr. Andreas Stella.
Kouros Brothers Ltd. has its principal offices and manufacturing unit of 3000 m2 , located at Our
Town, Industrial estate area, Cyprus.
We have good earnings and Capital Assets (the value of the land and store), but do not have
enough cash on hand to buy new samples of the equipment to demonstrate their effectiveness
to farmers.

Chart: Past Performance

Page 4

Kouros Brothers Ltd.

Table: Past Performance

Past Performance
2002

2003

2004

0
0
0.00%
0
0
0.00

189,336
117,104
61.85%
53,688
0
28.89

187,932
114,356
60.85%
62,156
0
9.81

2002

2003

2004

0
0
0
0
0

37,233
0
5,000
10,700
52,933

22,870
0
10,000
13,980
46,850

Long-term Assets
Accumulated Depreciation
Total Long-term Assets

0
0
0

100,000
3,104
96,896

100,000
3,508
96,492

Total Assets

149,829

143,342

Accounts Payable
Current Borrowing
Other Current Liabilities (interest free)
Total Current Liabilities

0
0
0
0

0
59,015
23,702
82,717

0
50,665
13,501
64,166

Long-term Liabilities
Total Liabilities

0
0

10,000
92,717

10,000
74,166

Paid-in Capital
Retained Earnings
Earnings
Total Capital

0
0
0
0

10,000
(16,304)
63,416
57,112

10,000
6,976
52,200
69,176

Total Capital and Liabilities

149,829

143,342

0
0
0.00

30
0
0.00

30
0
0.00

Sales
Gross Margin
Gross Margin %
Operating Expenses
Collection Period (days)
Inventory Turnover
Balance Sheet

Current Assets
Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets

Current Liabilities

Other Inputs
Payment Days
Sales on Credit
Receivables Turnover

Page 5

Kouros Brothers Ltd.

3.0 Products and Services


Kouros Brothers Ltd. is a manufacturer and Authorized dealer of imported Agriculture
machinery and implements. The company is a manufacturer of the Potato A-Z mechanization
such as Potato Planters, Diggers, Harvesters, Inter row cultivators, Taper Machines and Potato
Fork-lift tractor mounted machines, Soil Preparation Machinery and Implements, Cereal
Machinery and Implements, Transplanting machinery, Irrigation systems, Vegetable small seed
planting machines, Wheat and Barley mechanization, Animal food factory and packing systems
and Fire Fighting units designed for Agriculture areas.
Kouros Brothers Ltd. takes pride in having brought several new items for Livestock and
Vegetable equipments that were otherwise unknown, such as the manure spreader machines,
Cereal mechanization, and soil preparation machines. We also have designed and patented a
new vegetable seed planting machine for Coriander, Onions, Beans, peas, broad beans, ground
nuts, garlic, etc.
Kouros Brothers Ltd. has obtained the authorization to be a distributor for Beach Cleaning
machines (French Patented systems). We are also a sole agent for beach creating technology
and systems implementation.
Cereals
In the case of cereals, the farmers plant 50-120 kgs of seeds per hectare, while they could
have the same results and even more production with 18 kgs seed per hectare. Cereal planting
systems can save up to 70-100 kgs seed that is wasted in each hectare without reason.
Stubble Cultivator Implement
Stubble is an easy and inexpensive food for cows, sheep and other animals, and it decreases
the use of fertilizers by 50%. Farmers who acquire the knowledge to increase stubble create
their own forage, with the utilization of stable and barley.
If stubble is left in the fields, it can cause serious problems to the Wheat producers. The result
is that soil is overloaded, there is a decrease of the fertility of soil and there is a
continuous danger of fires which can burn hundreds of hectares of virgin forests and cause
disasters to the environment as happens very ofter in summer. (EU directives have forbidden
field-burning.)
Our unique Stubble cultivator machine can increase Wheat production and also
can decrease the producer's operating costs. By not exploiting stubble, farmers waste of tens of
millions of pounds per year.
Potatoes
The potato producers lose huge quantities of potatoes that are abandoned in the fields
without being collected, because they are only 5-10 cm below soil surface. From research, we
found out that more than 1-1.5 tonnes of potatoes are abandoned in the soil in each hectare
(1,000 t. meters), and in monetary terms we can say that the profit of the producer is
abandoned in the field.
Our unique series of Potato mechanization systems and hectare that are exclusively
manufactured into our Factory are tested for simplicity and are made with the best
materials can warranty the potato quality and Low operating costs to the potato producer.
These machines are satisfying the European directives requirements for Potato quality.

Page 6

Kouros Brothers Ltd.

Livestock-farming
The cows in Cyprus produce 4-5 tonnes milk per year instead of 10-12 tones per year. For
solving such problems our company has created last year a Pilot System of Cereals that can
increase cereal production up to 1,000 -1,500 kgs per hectare clover for the livestock-farming
and mixing of hay and pellets.
Our company has all the mechanization series and the associates with technology and knowhow for animal food preparation and production from Cypriot materials such as Lolium, Loutex,
Maze, Vetch, AA and trefoil.
Compost Machinery and Manure Spreader. Our Company has well-established
European associates with the know-how and the technology to create compost, helping not only
in farming sewage problems but also in quality of soil fertilization.
Wheat Planting Machines
The Wheat producer, in order to plant seed into 100 hectares, needs to use 250 kgs of Seed
and to go to his field at least 4 times. This means 4 times more operating costs and even more
so, Wheat prices dropped by 40% with the Cyprus accession into EU.
Our machine is designed such that it can do all four processes--soil cultivation, fertilizing and
planting on line, seed cover with soil and corrugation--in one go. The producer needs only 80
kgs per 100 hectares, instead of 250 kgs. Fertilizer is dropped just 1 cm from soil surface,
reducing fertilization costs by 50%, because the fertilizer is not moved away by wind or rain.
Seed Vegetable Planting Machines
Through research and development over the last 3 years, we have managed to create and to
patent a unique Seed vegetable machine for a variety of vegetables such as onions, beans,
garlic, coriander, etc. This machine is capable of planting all mentioned Vegetables by
minimizing operational costs by up to 70% and can have the products made as per European
Union directives as concern Size, Weight and Quality.
The company has already tested this machine for 3 years with several Cypriot vegetable
producers and the results were beyond expectations. The machine has already been registered
and patented rights are exclusively owned by our company. (Patent No. CY2351)
4.0 Market Analysis Summary
The overall market for agriculture machinery and implements is immense.
This business plan has identified over 1,800 agricultural producers and farmers in the local
market that have a potential need to maintain and/or win customers or even more so are
striving to survive. The funding schemes for agriculture and livestock support set by EU will
allow them to stay competitive and this business opportunity is all about it.
Last week it was announced by the Ministry of Agriculture, Natural Resources and Environment
that EU has available 256 million Euro for funding from 65%-80% of all units or producers
intending to modernize and use technological advances in order to improve customers'
(Agriculture Producers') product quality and to be able to export goods into European markets
at competitive prices.
In reality, all agriculture and livestock businesses are in need of our products, because there
are only 3 potential competitors locally who import or manufacture agricultural machinery and

Page 7

Kouros Brothers Ltd.

implements. Those involved with Potato mechanization have copied some of our unique series
of products, whereas only 2 of them are involved with Cereal and Wheat implements. Kouros
Brothers Ltd. has all machinery and implement series of equipments that will allow the Cypriot
agriculturer and Livestock producer to stay competitive into European markets.
4.1 Market Segmentation
Our market segmentation scheme is fairly straightforward, and focuses on all agricultural and
livestock sectors. The information contained in our customer analysis table is taken directly
from the last statistics report published by the Ministry of Commerce and Industry and
Tourism website and clearly shows that our largest market potential is more concentrated on
the following sectors:

Potato Crop Mechanization


Cereals Crop Mechanization, including Wheat and Barley
Vegetables crop Mechanization
Packing Technology
Livestock Machinery
Beach Cleaning Machines and Beach Creation methodologies
Fire Fighting Systems for rural areas

For more than 35 years, the company has owned almost 80% of the potato mechanization
market. However, due to negative growth opportunities in this sector the last years, the
prospects of this sector were unclear. Therefore, the company in order to survive has decided to
invest in sectors such as new vegetable machine designs that will satisfy the vegetable
producer needs (lower operational costs, low investment costs, simple machines, etc.) and also
simultaneously through dealership of the main European agriculture machinery and implements
manufacturers to become their sole agent and promoter in Cyprus and the Middle East area.
After 40 years of experience in agricultural machinery and implements manufacturing and
design, the company has identified its strengths and weaknesses and has focused on vegetable,
Cereals, Livestock and Beach Cleaning implements and technologies, allowing it to offer the
same quality of service and support as are afforded by the larger businesses.
The strategy used for years was to bring in selected products, and then attempt to find a buyer.
This resulted in inventory overstock, and obsolescence. The company already knows the
customers' needs and wants, therefore, as part of its marketing mix has decided to use the
start up funding for buying a series of 6 main machinery that will have the most predicted
demand and via marketing and promotion will try to promote its complete series of products.
After sales, services and spare parts provision to repeat customers is also part of our new
Marketing strategy. The aim of the new marketing approach is to keep the existing customers
and not to start building a new market share. Long-term relationships with customers is one of
the key-success factors mentioned earlier and was one of the reasons that company survived
and earned their business.
The company expects that by implementing a correct marketing mix, we will increase our
share in this market segment by offering the same value-added service and support benefits
that its commercial clients demand.

Page 8

Kouros Brothers Ltd.

Table: Market Analysis

Market Analysis
2005
Potential Customers
Potato Crop Mechanization
Cereals Crop Mechanization
Vegetables Crop
Mechanization
Beach Cleaning Machines and
Beach Creation systems
Fire Fighting Systems
Packing Technology and
Equipments
Livestock Machinery
Total

2006

2007

2008

2009

Growth

CAGR

2%
5%
3%

465
370
175

474
389
180

483
408
185

493
428
191

503
449
197

1.98%
4.96%
3.00%

2%

125

128

131

134

137

2.32%

1%
5%

280
180

283
189

286
198

289
208

292
218

1.05%
4.90%

7%
3.19%

72
1,667

77
1,720

82
1,773

88
1,831

94
1,890

6.89%
3.19%

Chart: Market Analysis (Pie)

4.2 Target Market Segment Strategy


Our choice of target markets is based on comprehensive experience within
the agriculture industry coupled with an in-depth understanding of the customers' needs for
more than 40 years.
We have taken a unique approach to satisfy our customers needs and wants and also
simultaneously to answer all their questions and to air their fears about the effectiveness and
efficiency of our products. The company identified that only the on-site testing of the
agriculture machinery in the customers' fields could calm down even the most resistive and
questionable customer.

Page 9

Kouros Brothers Ltd.

The company cannot be successful by just waiting for the customer to come for ordering.
Instead, we must focus on the specific market segments whose needs match more to our series
of products. Focusing on targeted segments is the key to company's future.
Therefore, the company's focus and marketing message will be not only the customer needs but
also the after service and spare parts services offered. A good marketing mix will
develop company's message, communicate it, and fulfill its commitment to excellence.
Developing a market strategy is a departure from the way the company has been managed in
the past. We will change the paradigm of being a product- and price-focused sales organization,
to that of becoming a customer- and market-focused organization, aiming in sharing
responsibility for customer satisfaction. We will accomplish this paradigm shift through the
implementation of a balanced and continuous market research for agriculture needs and
technology demands.
Planning and implementing specific strategies for each of the seven identified segments will be
an ongoing process, and we will will consult with marketing specialists, and our manufacturers,
to further refine these efforts as we develop an effective marketing plan.
4.3 Competition and Buying Patterns
Our customers want equipment that works well. They are paying a great deal of their annual
income to purchase a machine, and will not buy anything unless they have a clear
demonstration that it works, or a recommendation about buying from another farmer they
trust. The Cypriot farmer and agriculture producer is the last minute man. He plans to buy a
machinery only when it is critical and necessary, and when he identify the need, he wants
immediate delivery.
Kouros Brothers Ltd.'s closest competitors are located in Next Town, Other Town and Our Town.
They include the following five companies:

IJK. Ltd.
UVX. Ltd
ABC. Ltd

All above listed competitors are offering standardized agriculture forbidden and implements
for the potato industry and only 2 seek to satisfy somehow other sectors of the agriculture and
Livestock Industry.

Page 10

Kouros Brothers Ltd.

5.0 Strategy and Implementation Summary


Emphasize Customer Service
Kouros Brothers Ltd. has already differentiated itself from other manufacturers and importers of
agriculture machinery and implements by offering a spare parts and service maintenance to
their maintenance, professional advice to customers and custom solutions depending on
customer demands.
Build a Relationship-Oriented Business
Build long-term relationships with clients, not just selling the equipments. Let them become
dependent on company's assistance to help out in many situations. Make them understand the
value of the relationship.
Focus on Target Markets
The company plans to rapidly develop marketing alliances with agriculture consulting
offices. The market strategy is to capitalize on Kouros Brothers Ltd. ever-increasing customer
base and contacts by offering the latest products and after sales service.
The company's goal in the next year is to exhibit its products in the Agriculture state fair that
will take place at Nicosia next October which will allow for expanding the product service area
with up-to-date servicing equipment.
Even more so, the company is planning to participate to the 2006 Agriculture machinery fairexhibition at Thesalloniki, Greece at 28.1.2006 - 1.2.2006. The company as a sole Agent and
sales representative of innovative new forbidden for Cyprus, Greece, and Syria will promote its
latest wheat planting machine (to be patented in February, 2005), which is not only the latest
technology in this field but also can reduce the operating costs of the wheat producers by 50%.
5.1 Competitive Edge
Our competitive edge is our positioning as a strategic ally with our clients, who are clients more
than customers. By building a machinery based on long-standing relationships with satisfied
clients, we simultaneously build defenses against competition. The longer the relationship
stands, the more we help our clients understand what we offer them and why they should both
stay with Kouros Brothers Ltd.. In close-knit communities like Cyprus, reputation is extremely
important, and word-of-mouth advertising is invaluable.
The following differentiate Kouros Brothers Ltd. from its competitors:

Wide Range of Machinery and Implements. The company's machinery series satisfy all
needs and wants of the Cypriot crop producer. Our latest technology systems and
implements allow farmers to produce higher-quality products and give them a better
competitive edge into European Markets.

Low Overhead Cost. The company's machinery systems provide a unique, low-cost
production which was estimated to range from 30-70% of the crop operating cost.

Page 11

Kouros Brothers Ltd.

5.2 Milestones
The following table lists important program milestones, with dates and managers in charge, and
subjective budgets for each. The milestone schedule indicates our emphasis on planning for
implementation. The most important programs are the sales and marketing programs listed in
detail in the previous topics.
Company also is attributing a great emphasis on the 2005 Agriculture Fair which takes place
every 2 years in the International State Fair, Nicosia and the Agriculture state fair at
Thesalloniki, Greece in late January 2006.
Table: Milestones

Milestones
Milestone
Seek Financing
Order of Equipments
Spare Parts Orders
Marketing associates Contact
Printing advertising stationery
DVD and CD creation
Direct Marketing
Contact Fair Organizers
International Fair Participation,
Nicosia
Thesallonoki Fair Arrangements
Totals

Start Date
9/13/2010
10/28/2010
10/28/2010
10/28/2010
10/28/2010
10/28/2010
10/28/2010
3/22/2011
7/5/2011

End Date
10/28/2010
12/12/2010
12/12/2010
12/22/2010
1/6/2011
1/21/2011
3/2/2011
4/21/2011
7/8/2011

Budget
1,000
50,000
4,000
2,000
3,000
1,500
2,000
1,500
2,000

Manager
Kouros & Panikos
Kouros & Panikos
Kouros & Panikos
Panikos
Panikos
Kouros & Panikos
Kouros
Kouros & Panikos
Kouros & Panikos

Department
M&T + Accounting
M&T + Accounting
M&T + Accounting
Accounting
Accounting
M&T + Accounting
M&T
M&T + Accounting
M&T + Accounting

10/7/2011

10/11/2011

3,000
70,000

Kouros & Panikos

M&T + Accounting

Chart: Milestones

Page 12

Kouros Brothers Ltd.

5.3 Marketing Strategy


The overall marketing plan for Kouros Brothers Ltd. products and services is based on the
following fundamentals:

The segment of the market(s) planned to reach.


Distribution channels planned to be used to reach market segments: radio, sales associates,
and Post cards, direct marketing, mailings, etc.
Share of the market expected to capture over a fixed period of time.

Market Responsibilities
Kouros Brothers Ltd. is committed to an extensive promotional campaign. This will be done
aggressively and on a broad scale. To accomplish initial sales goals, the company will require an
extremely effective promotional campaign to accomplish two primary objectives:
1. Attract quality sales/service personnel that have a desire to be successful.
2. Attract customers that will constantly look to Kouros Brothers Ltd. for their marketing.
In addition, the company plans to advertise in magazines, newspapers, television, radio, and on
billboards throughout the country.
Promotion
In addition to standard advertisement practices, Kouros Brothers Ltd. will gain considerable
recognition through these additional promotional mediums:

Press releases sent to major radio stations, newspapers, and magazines.

Radio advertising on secondary stations.

Incentives. As an extra incentive for customers and potential customers to Kouros Brothers
Ltd. name, the company plans to distribute coffee mugs, T-shirts, pens, and other
advertising specialties with the company logo. This will be an ongoing program for the
company, when appropriate and where it is identified as beneficial.

Brochures. The objective of brochures is to portray the company's goals and products as an
attractive functionality. It will also show to customers how to use the latest technology of
innovations or what it relates to agricultural and Livestock sector.

Investment in Advertising and Promotion


For the first year of operation, advertising, and promotion is budgeted at a combined total of
10,000. A fixed amount of sales revenues will go toward the Kouros Brothers Ltd.
advertisement campaign.

Page 13

Kouros Brothers Ltd.

5.4 Sales Strategy


We will be offering a unique solution that will be introduced to the market through targeted
advertising and direct sales. The direct sales force will consist of Mr. Kouros and Mr. Panayiotis
Stella with coordination of their seasoned sales associate offices.
Mr. Kouros Stella will manage the direct sales through personal sales calls and direct visits to
villages and customer premises. This market is a long term, repetitive business where
relationships are a key component to success.
We will promote the company and its ability to act as an ally to agriculture producers and
livestock farmers. We will make marketable Kouros Brothers Ltd., and keep the reputation as
the industry-leading manufacturer it represents.
Pricing
Currently, Kouros Brothers Ltd. maintains a commercial credit policy for business customers
with a net 30-day limit. Most of Kouros Brothers Ltd. customers choose to deal with their own
financial sources.
The company offers competitive prices, which are subject to review when necessary. Knowledge
of market and competitor prices gives to the company the advantage of pricing in-line with
competitors. The Kouros Brothers Ltd. suppliers have and will continue to supply products that
enable the company to meet the customers' price ranges.
Most companies have a 15-20% markup on their merchandise. Having worked for most of the
larger companies in the area, Mr. Kouros Stella has an advantage of knowing which companies
are firm with the prices and how much others will decrease their prices.
5.4.1 Sales Forecast
The important elements of the Sales Forecasts are shown in the chart and table below. Our
sales are based on Government approval of funding for Agriculture and Livestock industries at
the end of 2004, which will allow our customers to purchase more new equipment to remain
competitive within the new EU market. Our exclusive contracts with European equipment
manufacturers, our own patented designs, and our knowledge of the local Cyprus agricultural
market and buying tendencies will allow us to capture a large part of that new funding. We
project a sales increase over 50% next year. Beach Creation projects include a 10-12%
commission.
Direct costs vary by category; in-house items like the potato mechanization equipment will
have a lower direct cost than other equipment. We project an increase in gross margin as we
gain market share and develop better contracts with our suppliers. Farmers buy equipment
seasonally, so sales vary by month.

Page 14

Kouros Brothers Ltd.

Chart: Sales Monthly

Chart: Sales by Year

Page 15

Kouros Brothers Ltd.

Table: Sales Forecast

Sales Forecast
2005

2006

2007

2008

2009

A-Z potato mechanization


A-Z Cereals mechanization
A-Z Vegetable mechanization
Livestock Machines
Beach Cleaning
Packing Technology
Other Machinery
Total Sales

64,500
41,000
47,500
39,900
32,900
41,200
7,200
274,200

70,950
45,100
52,250
43,890
36,190
45,320
7,920
301,620

78,045
49,610
57,475
48,279
39,809
49,852
8,712
331,782

85,850
54,571
63,223
53,107
43,790
54,837
9,583
364,960

94,434
60,028
69,545
58,418
48,169
60,321
10,542
401,456

Direct Cost of Sales


A-Z Potato Mechanization
A-Z Cereals Mechanization
A-Z Vegetables Mechanization
Livestock Machinery
Beach Cleaning Machines
Packing Technology
Other Machinery
Subtotal Direct Cost of Sales

2005
43,215
20,500
23,750
27,252
23,030
26,780
5,040
169,567

2006
31,928
29,541
35,530
29,845
25,333
29,458
5,544
187,178

2007
35,120
32,495
39,083
32,830
27,866
29,911
6,098
203,403

2008
38,632
35,744
42,991
36,113
30,653
32,902
6,708
223,744

2009
42,496
39,318
47,290
39,724
33,718
36,193
7,379
246,118

Sales

Page 16

Kouros Brothers Ltd.

6.0 Management Summary


Kouros Brothers Ltd. management is comprised of experienced entrepreneurs and business
professionals from the accounting, technology and marketing management industries. Our
management team possesses a breadth of functional experience in Potato crop mechanization
and were the leaders and manufacturers of agricultural attributing and implements since 1963.
Mr Kouros. Zither was involved in a variety of product development projects designing new
Farmers and implements according to customers specific needs and even more so, Mr.
Kouros has managed to patent more than 4 innovative planting and Harvesting systems for
Potatoes and Vegetables.
Mr. Panayiotis will be devoted on the senior management responsibilities for directing the sales/
marketing, finance, and distribution efforts and Mr. Kouros will be directing the development,
operations, technological advancements and service operations.
6.1 Personnel Plan
Kouros Brothers Ltd. management is highly experienced and qualified. Its key management
team includes Mr. Kouros and Mr. Panayiotis Stella. Jointly, they are responsible for processing
quotes, arranging financing as needed, scheduling invoices for pickup and delivery, on-site
testing and contract sales.
Mr. Kouros Stella, the General Director, has 35 years of marketing experience, sales experience,
mechanical experience. Mr. Kouros makes all decisions concerning equipment purchases, and
sometimes contacting customers when needed for providing advice and technological support
when requested as this is his area of expertise.
Mr. Panayiotis, the Accounting Director, is in charge of obtaining all equipment for sales,
completing contracts, working up quotes, setting up delivery of merchandise, arranging
financing as needed, contacting customers, and verifying pickup and delivery. Mr Panayiotis has
also 27 years of secretarial experience and 12 years accounts payable and receivable
experience. Mr. Panayiotis, in conjunction with Mr. Kouros, answers the phone, faxes, does all
the computer work, and if needed files any monthly or quarterly tax forms, compiles
correspondence as needed, accounts receivable, accounts payable, meets with a bookkeeper for
end of year tax return, keeps all office needs running smoothly, filing, typing, copies.
Future plans call for the hiring of a Marketing and Sales manager with hopes of adding 2
more Lathe men and a Welder/Fitter as needed.
Table: Personnel

Personnel Plan
2005

2006

2007

2008

2009

General Director
Accounting Director
Lathe Man
Welder / Fitter
Salesperson
Total People

10,000
10,000
6,000
6,000
6,000
5

10,500
7,500
6,000
6,000
6,000
5

11,000
8,000
6,500
6,500
6,500
5

11,500
8,500
7,000
7,000
7,000
5

12,000
9,000
7,500
7,500
7,500
5

Total Payroll

38,000

36,000

38,500

41,000

43,500

Page 17

Kouros Brothers Ltd.

7.0 Financial Plan


The following sections shows in detail that Kouros Brothers Ltd. will be profitable and will easily
repay its new loan within six years.
7.1 Important Assumptions
The key underlying assumptions of our financial plan shown in the following general assumption
table are:
1. We assume access to the funding necessary to re-shape the company, and to provide
adequate initial capitalization for a wider range of demonstration equipment.
2. We assume realistic to minimum sales, against highest expenses.
3. We assume that European funding for agriculture support and development will take
place early in 2005 and that the Cyprus Government will release those funds, allowing the
farmers and agriculture producers to buy a complete series for their equipment needs.
Other key business assumptions are:

As we join the EU marketplace, small farms will find it increasingly hard to stay in business,
and only the well organized and standardized units will survive. (Based on trends in other
recently-added EU member-nations.)
Steady economic growth in Agriculture and Livestock sector, as predicted by the Ministry of
Economics once funding for equipment is released by Cyprus Government.

Table: General Assumptions

General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other

2005

2006

2007

2008

2009

1
5.00%
8.50%
11.00%
0

2
5.00%
8.50%
11.00%
0

3
5.00%
8.50%
11.00%
0

4
5.00%
8.50%
11.00%
0

5
5.00%
8.50%
11.00%
0

Page 18

Kouros Brothers Ltd.

7.2 Break-even Analysis


Our Break-even Analysis is shown in the following table and chart.
We will monitor direct costs very closely, and maintain them at or below 65% by taking
advantage of all promotions and discounts offered by authorized manufacturers as they have
tentatively agreed to offer us "end column" pricing as a new dealer incentive. We anticipate
surpassing our break-even point once local farmers begin to spend their new government grant
money.
Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even

15,893

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

62%
6,065

Chart: Break-even Analysis

Page 19

Kouros Brothers Ltd.

7.3 Projected Profit and Loss


The following table shows the projected Profit and Loss statement for the next five years. Our
largest operating expenses are payroll-related, to cover necessary staff. We are adding a
salesperson, and a welder/fitter and lathe man to work on repairs of existing equipment and to
finish the in-house designed patented vegetable and cereal equipment.
Direct costs of goods reflects costs for purchasing inventory and having it delivered to our
store. The third row shows additional direct costs for manufacturing our patented vegetable and
cereal equipment.
Depreciation reflects the declining value of our long-term assets:

100,000 value of land and store, depreciated over 29 years (3,400/year).


50,000 of new demo equipment depreciated over a term of 9 years (5,556/year).
In 2008 we will sell the depreciated demo equipment and buy 30,000 new assets, and
depreciate that amount over 9 years (3,333/year).

Page 20

Kouros Brothers Ltd.

Chart: Profit Monthly

Chart: Profit Yearly

Page 21

Kouros Brothers Ltd.

Chart: Gross Margin Monthly

Chart: Gross Margin Yearly

Page 22

Kouros Brothers Ltd.

Table: Profit and Loss

Pro Forma Profit and Loss


2005

2006

2007

2008

2009

274,200
169,567
8,850
178,417

301,620
187,178
9,735
196,913

331,782
203,403
10,709
214,112

364,960
223,744
11,779
235,523

401,456
246,118
12,957
259,075

95,783
34.93%

104,707
34.71%

117,670
35.47%

129,437
35.47%

142,381
35.47%

Payroll
Marketing/Promotion
Depreciation
Insurance
Office consumables
Leasing
Trading expenses
Payroll Taxes
Electricity
Water
Fuels and Transport Expenses
Telex and Faxing
Banking rights
Travelling expenses
Tools Maintenance

38,000
6,000
8,489
480
200
600
400
0
1,400
2,004
3,100
4,500
1,100
4,500
2,004

36,000
6,000
8,952
550
250
650
450
0
1,500
0
1,600
2,400
1,000
5,000
5,000

38,500
5,000
8,952
600
300
650
500
0
1,700
0
1,700
2,400
1,000
5,000
5,000

41,000
5,000
6,733
700
350
650
550
0
1,800
0
1,800
2,400
1,100
5,000
5,000

43,500
5,000
6,733
800
400
650
600
0
2,000
0
1,900
2,400
1,200
5,000
5,000

Total Operating Expenses

72,777

69,352

71,302

72,083

75,183

Profit Before Interest and Taxes


EBITDA
Interest Expense
Taxes Incurred

23,006
31,495
5,814
1,891

35,355
44,307
4,830
3,358

46,368
55,320
3,802
4,682

57,354
64,087
2,775
6,004

67,198
73,931
1,747
7,200

Net Profit
Net Profit/Sales

15,301
5.58%

27,167
9.01%

37,884
11.42%

48,576
13.31%

58,251
14.51%

Sales
Direct Cost of Sales
Production Costs for Patented Planters
Total Cost of Sales
Gross Margin
Gross Margin %

Expenses

Page 23

Kouros Brothers Ltd.

7.4 Projected Cash Flow


Cash flow reflects the seasonal purchasing of our customers. Our Cash Balance will increase
as customers return to us for repeat sales, after their initial great experiences with us, based on
the reasonable assumption of Funding support by Government, which is expected to be 256
millions for 2005-6. This agriculture development plan for 2004-2006 is supported by European
Union for all its new members and this funding support will allow the Farmers and Agriculture
crop producers to buy the neccessary equipments and to boost their sales and product quality.
The Cash Flow table shows the projected new long-term loan amount (50,000), received
in January, and the repayment of existing and new loans.
The table also shows how we will use this 50,000, to purchase a new, wider range of
demonstration equipment, as long-term assets in January. This equipment is necessary to
convince skeptical local farmers about the effectiveness of the new machines - we must have at
least one model of each machine, which we can bring to their fields and demonstrate to them.
Since this equipment is being used, we are depreciating it over nine years (see "Depreciation"
in the Profit and Loss statement, above). We will sell this first round of demo equipment at the
beginning of 2008, for its depreciated value, and buy another 30,000 of new demo equipment
of the latest models, funded by cash flows from the business. This replacement equipment will
also be depreciated over nine years.

Chart: Cash

Page 24

Kouros Brothers Ltd.

Table: Cash Flow

Pro Forma Cash Flow


2005

2006

2007

2008

2009

205,650
64,079
269,729

226,215
74,958
301,173

248,837
82,454
331,290

273,720
90,699
364,419

301,092
99,769
400,861

0
0
0
35,000
0
0
0
304,729

0
0
0
0
0
0
0
301,173

0
0
0
0
0
0
0
331,290

0
0
0
0
0
27,003
0
391,422

0
0
0
0
0
0
0
400,861

2005

2006

2007

2008

2009

38,000
201,427
239,427

36,000
228,376
264,376

38,500
246,619
285,119

41,000
268,844
309,844

43,500
293,027
336,527

0
7,800
3,372
7,351
500
50,000
0
308,450

0
7,800
3,375
7,500
500
0
0
283,551

0
7,800
3,375
7,500
500
0
0
304,294

0
7,800
3,379
7,500
500
30,000
0
359,023

0
7,800
0
7,500
500
0
0
352,327

(3,721)
19,149

17,622
36,771

26,996
63,767

32,400
96,167

48,534
144,701

Cash Received
Cash from Operations
Cash Sales
Cash from Receivables
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent
Net Cash Flow
Cash Balance

Page 25

Kouros Brothers Ltd.

7.5 Projected Balance Sheet


Estimated balance sheets for the years 2005-2009 are provided below. The demonstration
equipment we plan to buy shows up under long-term assets, bought in January of 2005,
depreciated, sold in 2008, and replaced with 30,000 of new demo equipment. We project an
increasing net worth.
Table: Balance Sheet

Pro Forma Balance Sheet


2005

2006

2007

2008

2009

19,149
4,471
11,582
14,480
49,682

36,771
4,918
17,218
14,980
73,888

63,767
5,410
18,420
15,480
103,077

96,167
5,951
20,510
15,980
138,607

144,701
6,546
22,561
16,480
190,287

150,000
11,997
138,003
187,685

150,000
20,949
129,051
202,938

150,000
29,901
120,099
223,175

152,997
36,634
116,363
254,970

152,997
43,367
109,630
299,917

2005

2006

2007

2008

2009

12,565
42,865
10,129
65,559

19,326
35,065
6,754
61,145

20,355
27,265
3,379
50,999

22,253
19,465
0
41,718

24,248
11,665
0
35,913

Long-term Liabilities
Total Liabilities

37,649
103,208

30,149
91,294

22,649
73,648

15,149
56,867

7,649
43,562

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital

10,000
59,176
15,301
84,477
187,685

10,000
74,477
27,167
111,644
202,938

10,000
101,644
37,884
149,528
223,175

10,000
139,528
48,576
198,103
254,970

10,000
188,103
58,251
256,354
299,917

84,477

111,644

149,528

198,103

256,354

Assets
Current Assets
Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

Net Worth

7.6 Business Ratios


The table below presents common business ratios as a reference. Our business is part of the
planting, haying, harvesting and processing machinery Industry (SIC Code 3523.01). Industry
Profile Ratios are shown in the final column for comparison.

Page 26

Kouros Brothers Ltd.

Table: Ratios

Ratio Analysis
2005

2006

2007

2008

2009

Industry Profile

45.90%

10.00%

10.00%

10.00%

10.00%

-0.95%

Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets

2.38%
6.17%
7.72%
26.47%
73.53%
100.00%

2.42%
8.48%
7.38%
36.41%
63.59%
100.00%

2.42%
8.25%
6.94%
46.19%
53.81%
100.00%

2.33%
8.04%
6.27%
54.36%
45.64%
100.00%

2.18%
7.52%
5.49%
63.45%
36.55%
100.00%

32.82%
34.00%
14.34%
81.16%
18.84%
100.00%

Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth

34.93%
20.06%
54.99%
45.01%

30.13%
14.86%
44.99%
55.01%

22.85%
10.15%
33.00%
67.00%

16.36%
5.94%
22.30%
77.70%

11.97%
2.55%
14.52%
85.48%

26.15%
23.74%
49.89%
50.11%

100.00%
34.93%
29.35%

100.00%
34.71%
25.71%

100.00%
35.47%
24.05%

100.00%
35.47%
22.16%

100.00%
35.47%
20.96%

100.00%
27.32%
14.62%

3.10%
8.39%

2.97%
11.72%

2.70%
13.98%

1.84%
15.72%

1.68%
16.74%

1.07%
3.82%

0.76
0.58
54.99%
20.35%
9.16%

1.21
0.93
44.99%
27.34%
15.04%

2.02
1.66
33.00%
28.47%
19.07%

3.32
2.83
22.30%
27.55%
21.41%

5.30
4.67
14.52%
25.53%
21.82%

2.85
1.44
51.13%
5.77%
11.81%

Sales Growth
Percent of Total Assets

Percent of Sales
Sales
Gross Margin
Selling, General & Administrative
Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios

2005

2006

2007

2008

2009

Net Profit Margin


Return on Equity

5.58%
18.11%

9.01%
24.33%

11.42%
25.34%

13.31%
24.52%

14.51%
22.72%

n.a
n.a

15.33
29
12.00
17.03
27
1.46

15.33
23
13.00
12.17
25
1.49

15.33
23
11.42
12.17
29
1.49

15.33
23
11.49
12.17
29
1.43

15.33
23
11.43
12.17
29
1.34

n.a
n.a
n.a
n.a
n.a
n.a

1.22
0.64

0.82
0.67

0.49
0.69

0.29
0.73

0.17
0.82

n.a
n.a

(15,877)
3.96

12,742
7.32

52,078
12.20

96,890
20.67

154,374
38.46

n.a
n.a

0.68
35%
0.51
3.25
0.00

0.67
30%
0.85
2.70
0.00

0.67
23%
1.55
2.22
0.00

0.70
16%
2.69
1.84
0.00

0.75
12%
4.49
1.57
0.00

n.a
n.a
n.a
n.a
n.a

Activity Ratios
Accounts Receivable Turnover
Collection Days
Inventory Turnover
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

Page 27

Appendix
Table: Sales Forecast

Sales Forecast
Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

3,500
1,500
2,500
2,500
400
2,700
600
13,700

5,000
2,500
3,000
3,400
1,500
3,500
600
19,500

10,000
3,500
3,000
3,400
2,000
3,500
600
26,000

7,500
4,000
4,500
3,400
2,500
3,500
600
26,000

6,500
4,500
6,000
3,400
3,500
3,500
600
28,000

6,000
6,500
6,000
3,400
4,500
3,500
600
30,500

4,000
4,000
4,000
3,400
5,000
3,500
600
24,500

3,000
3,500
3,000
3,400
5,500
3,500
600
22,500

3,000
2,500
5,500
3,400
2,000
3,500
600
20,500

5,500
2,500
6,000
3,400
2,000
3,500
600
23,500

6,000
3,000
2,000
3,400
2,500
3,500
600
21,000

4,500
3,000
2,000
3,400
1,500
3,500
600
18,500

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2,345
750
1,250
1,708
280
1,755
420
8,508

3,350
1,250
1,500
2,322
1,050
2,275
420
12,167

6,700
1,750
1,500
2,322
1,400
2,275
420
16,367

5,025
2,000
2,250
2,322
1,750
2,275
420
16,042

4,355
2,250
3,000
2,322
2,450
2,275
420
17,072

4,020
3,250
3,000
2,322
3,150
2,275
420
18,437

2,680
2,000
2,000
2,322
3,500
2,275
420
15,197

2,010
1,750
1,500
2,322
3,850
2,275
420
14,127

2,010
1,250
2,750
2,322
1,400
2,275
420
12,427

3,685
1,250
3,000
2,322
1,400
2,275
420
14,352

4,020
1,500
1,000
2,322
1,750
2,275
420
13,287

3,015
1,500
1,000
2,322
1,050
2,275
420
11,582

Sales
A-Z potato mechanization
A-Z Cereals mechanization
A-Z Vegetable mechanization
Livestock Machines
Beach Cleaning
Packing Technology
Other Machinery
Total Sales

0%
0%
0%
0%
0%
0%
0%

Direct Cost of Sales


A-Z Potato Mechanization
A-Z Cereals Mechanization
A-Z Vegetables Mechanization
Livestock Machinery
Beach Cleaning Machines
Packing Technology
Other Machinery
Subtotal Direct Cost of Sales

67%
50%
50%
68%
70%
65%
70%

Page 1

Appendix
Table: Personnel

Personnel Plan
General Director
Accounting Director
Lathe Man
Welder / Fitter
Salesperson
Total People
Total Payroll

0%
0%
0%
0%
0%

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

833
833
500
500
500
5

833
833
500
500
500
5

833
833
500
500
500
5

833
833
500
500
500
5

833
833
500
500
500
5

833
833
500
500
500
5

833
833
500
500
500
5

833
833
500
500
500
5

833
833
500
500
500
5

833
833
500
500
500
5

833
833
500
500
500
5

833
833
500
500
500
5

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

Page 2

Appendix
Table: Profit and Loss

Pro Forma Profit and Loss


Sales
Direct Cost of Sales
Production Costs for Patented
Planters
Total Cost of Sales

10%

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

13,700

19,500

26,000

26,000

28,000

30,500

24,500

22,500

20,500

23,500

21,000

18,500

8,508

12,167

16,367

16,042

17,072

18,437

15,197

14,127

12,427

14,352

13,287

11,582

400

550

650

850

1,050

1,250

800

650

800

850

500

500

8,908

12,717

17,017

16,892

18,122

19,687

15,997

14,777

13,227

15,202

13,787

12,082

Gross Margin

4,793

6,783

8,983

9,108

9,878

10,813

8,503

7,723

7,273

8,298

7,213

6,418

Gross Margin %

34.98%

34.78%

34.55%

35.03%

35.28%

35.45%

34.71%

34.32%

35.48%

35.31%

34.35%

34.69%

Expenses
Payroll

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

Marketing/Promotion

500

500

500

500

500

500

500

500

500

500

500

500

Depreciation

283

746

746

746

746

746

746

746

746

746

746

746

Insurance

40

40

40

40

40

40

40

40

40

40

40

40

Office consumables

17

17

17

17

17

17

17

17

17

17

17

17

Leasing

50

50

50

50

50

50

50

50

50

50

50

50

Trading expenses

33

33

33

33

33

33

33

33

33

33

33

33

0
117

0
117

0
117

0
117

0
117

0
117

0
117

0
117

0
117

0
117

0
117

0
117

Water

167

167

167

167

167

167

167

167

167

167

167

167

Fuels and Transport Expenses

258

258

258

258

258

258

258

258

258

258

258

258

Telex and Faxing

375

375

375

375

375

375

375

375

375

375

375

375

92

92

92

92

92

92

92

92

92

92

92

92

375
167

375
167

375
167

375
167

375
167

375
167

375
167

375
167

375
167

375
167

375
167

375
167

5,641

6,103

6,103

6,103

6,103

6,103

6,103

6,103

6,103

6,103

6,103

6,103

Payroll Taxes
Electricity

15%

Banking rights
Travelling expenses
Tools Maintenance
Total Operating Expenses

15%

Profit Before Interest and Taxes

(848)

679

2,879

3,004

3,774

4,709

2,399

1,619

1,169

2,194

1,109

314

EBITDA

(565)

1,425

3,625

3,750

4,520

5,455

3,145

2,365

1,915

2,940

1,855

1,060

Interest Expense

524

517

510

502

495

488

481

474

467

460

452

445

(151)

18

261

275

361

464

211

126

77

191

72

(14)

Net Profit

(1,221)

145

2,109

2,227

2,919

3,757

1,707

1,020

625

1,544

585

(116)

Net Profit/Sales

-8.91%

0.74%

8.11%

8.56%

10.42%

12.32%

6.97%

4.53%

3.05%

6.57%

2.78%

-0.63%

Taxes Incurred

Page 3

Appendix
Table: Cash Flow
Pro Forma Cash Flow
Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

10,275

14,625

19,500

19,500

21,000

22,875

18,375

16,875

15,375

17,625

15,750

13,875

114

3,473

4,929

6,500

6,517

7,021

7,575

6,108

5,608

5,150

5,854

5,229

10,389

18,098

24,429

26,000

27,517

29,896

25,950

22,983

20,983

22,775

21,604

19,104

0.00%

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

35,000
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

Sales of Long-term Assets

New Investment Received

45,389

18,098

24,429

26,000

27,517

29,896

25,950

22,983

20,983

22,775

21,604

19,104

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Cash Received
Cash from Operations
Cash Sales
Cash from Receivables
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets

Subtotal Cash Received


Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

333

10,283

19,271

24,023

19,624

22,265

23,910

15,668

16,423

14,452

19,817

15,356

3,499

13,449

22,438

27,190

22,791

25,432

27,077

18,835

19,590

17,619

22,984

18,523

Additional Cash Spent


Sales Tax, VAT, HST/GST Paid Out

Principal Repayment of Current Borrowing

650

650

650

650

650

650

650

650

650

650

650

650

Other Liabilities Principal Repayment

281

281

281

281

281

281

281

281

281

281

281

281

Long-term Liabilities Principal Repayment

476

625

625

625

625

625

625

625

625

625

625

625

42

42

42

42

42

42

42

42

42

42

42

42

50,000

Subtotal Cash Spent

54,948

15,047

24,036

28,788

24,389

27,030

28,674

20,433

21,188

19,216

24,582

20,121

Net Cash Flow

(9,559)

3,051

394

(2,788)

3,128

2,866

(2,724)

2,551

(204)

3,559

(2,977)

(1,016)

Cash Balance

13,311

16,363

16,756

13,968

17,097

19,963

17,238

19,789

19,585

23,143

20,166

19,149

Purchase Other Current Assets


Purchase Long-term Assets
Dividends

Page 4

Appendix
Table: Balance Sheet

Pro Forma Balance Sheet


Assets

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

22,870
0
10,000
13,980
46,850

13,311
3,311
8,508
14,022
39,151

16,363
4,713
12,167
14,063
47,306

16,756
6,283
16,367
14,105
53,512

13,968
6,283
16,042
14,147
50,441

17,097
6,767
17,072
14,188
55,124

19,963
7,371
18,437
14,230
60,001

17,238
5,921
15,197
14,272
52,628

19,789
5,437
14,127
14,313
53,667

19,585
4,954
12,427
14,355
51,321

23,143
5,679
14,352
14,397
57,571

20,166
5,075
13,287
14,438
52,966

19,149
4,471
11,582
14,480
49,682

100,000
3,508
96,492
143,342

150,000
3,791
146,209
185,360

150,000
4,537
145,463
192,768

150,000
5,283
144,717
198,228

150,000
6,029
143,971
194,411

150,000
6,775
143,225
198,348

150,000
7,521
142,479
202,479

150,000
8,267
141,733
194,361

150,000
9,013
140,987
194,653

150,000
9,759
140,241
191,562

150,000
10,505
139,495
197,066

150,000
11,251
138,749
191,715

150,000
11,997
138,003
187,685

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Starting Balances

Current Assets
Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

0
50,665
13,501
64,166

9,646
50,015
13,220
72,881

18,465
49,365
12,939
80,769

23,372
48,715
12,658
84,745

18,884
48,065
12,377
79,326

21,459
47,415
12,096
80,970

23,389
46,765
11,815
81,969

15,119
46,115
11,534
72,768

15,948
45,465
11,253
72,666

13,786
44,815
10,972
69,573

19,303
44,165
10,691
74,159

14,923
43,515
10,410
68,848

12,565
42,865
10,129
65,559

Long-term Liabilities
Total Liabilities

10,000
74,166

44,524
117,405

43,899
124,668

43,274
128,019

42,649
121,975

42,024
122,994

41,399
123,368

40,774
113,542

40,149
112,815

39,524
109,097

38,899
113,058

38,274
107,122

37,649
103,208

10,000
6,976
52,200
69,176
143,342

10,000
59,176
(1,221)
67,955
185,360

10,000
59,176
(1,076)
68,100
192,768

10,000
59,176
1,033
70,209
198,228

10,000
59,176
3,260
72,436
194,411

10,000
59,176
6,179
75,355
198,348

10,000
59,176
9,936
79,112
202,479

10,000
59,176
11,643
80,819
194,361

10,000
59,176
12,663
81,839
194,653

10,000
59,176
13,288
82,464
191,562

10,000
59,176
14,832
84,008
197,066

10,000
59,176
15,417
84,593
191,715

10,000
59,176
15,301
84,477
187,685

69,176

67,955

68,100

70,209

72,436

75,355

79,112

80,819

81,839

82,464

84,008

84,593

84,477

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

Page 5