raal bp 2017 eng galan · the level of materiality in this business plan is understood as the...

BUSINESS PLAN "CONSTRUCTION AND LAUNCH OF AN ASSEMBLY

PRODUCTION OF COMPLEX COOLING SYSTEMS AND HEAT-EXCHANGERS IN RUSSIA"

Amount of investments: 12 749 950 € Financial Efficiency: DPBP 3 yr., IRR 30% 7 march 2017 Resume: Risks - not significant, Efficiency - high

Oleg Strelkovsky LLC «RAAL» Page ! of !1 45

BUSINESS PLAN INITIATED BY LLC «RAAL», SFD, RR, RUSSIA. MR. O. STRELKOVSKY

MEMORANDUM OF CONFIDENTIALITY 3

PLANNING METHODOLOGY 3

LEVEL OF IMPORTANCE 3

1 RESUME 5 1.1 ESSENCE OF PROJECT 5

1.2 Project Implementation Area 8

1.3 INVESTMENT OF PROJECT 9

1.4 FINANCING OF PROJECT 9

1.5 PLAN OF ACTIONS 9

1.6 PROJECT EFFICIENCY 10

2 INITIATOR OF THE PROJECT 11 3 ESSENCE OF OFFERED PROJECT 12

3.1 COMMON DESCRIPTION 12

3.2 PRODUCTS AND COMPETITIVENESS 12

3.3 SHORT DESCRIPTION OF BASIC COMPETITORS 14

3.4 POTENTIAL MARKET CAPACITY 14

3.5 Main technical characteristics of the project 15

4 ORGANIZATIONAL PLAN 20 4.1 Project stage 20

4.2 Planned timeframe 20

4.3 Schedule of project implementation 20

4.4 Management structure 24

4.5 PROJECT TEAM 24

4.6 SWOT ANALYSIS 25

5 FINANCIAL PLAN 26 5.1 Background and assumptions 26

5.2 Tax environment 26

5.3 Capital expenditures 27

5.4 Revenue calculation 28

5.5 Operating expenses 28

5.6 Number of employees, wages 33

5.7 Sources and conditions of financing 36

5.8 Estimation of economic efficiency of the project 39

6. RISK ASSESSMENT 42


TABLE OF CONTENTS

MEMORANDUM OF CONFIDENTIALITY

This business plan was prepared by a company "Finances and Credit" and contains information, characterizing financial - economic, organizational and marketing parties of investment project. The information presented in this document carries confidential character and is a property of company which Initiated the project: Limited Liability Company «RAAL» from Taganrog of the Rostov area. This document is intended only for persons getting him from a consent the proprietor of information. A transmission, printing-down or disclosure of any information contained in this business plan, without the written consent of proprietor is strictly forbidden.

Facts, analysis, offered opinions and conclusions, expounded in this document are actual exceptionally within the limits of specification in given account assumptions and limiting terms and are personal, impartial analysis, opinions and conclusions.

A fee for preparation of business plan not in which degree is unconnected with the achievement of beforehand certain parameters or tender.

A fee for preparation of current business-plan not in any degree is not connected with the achievement of beforehand certain parameters or tendency in determination of perspective of project in behalf on a client, and similarly with the achievement of the beforehand specified result or with afterclaps.

All calculations confess actual on July, 20 2016, if from the named date to the moment of signing this business-plan, there where no circumstances that would substantially influence on the financial and marketing indexes of business-plan.

PLANNING METHODOLOGY

When developing the business plan, an international methodology for the evaluation of investment projects was used, as defined by the UNIDO (United Nations Industrial Development Organization) standards, which are used by most foreign and Russian investors.

LEVEL OF IMPORTANCE

The level of materiality in this business plan is understood as the limiting value of the discrepancies in the indicators of the Business Plan, from which a qualified user of the business plan, with a greater degree of probability, will no longer make correct conclusions and make correct economic decisions based on it. Under


PROJECT INFORMATION

the level of materiality, in this case, is understood the limiting value of the discrepancies in the indicators of the Business Plan, which is conditioned by the assumptions of the mathematical model. The discrepancies are caused by the use in the present plan of average prices and averages. In determining the absolute value of the level of materiality, the most important indicators characterizing the activity of the economic entity (the basic indicators of the Business Plan) are taken as a basis.

# Base index Stake, %

1 Cost of commodities and services 5 %

2 Volume of sales of goods and services 5 %

3 Amount of investments, € 5 %


PROJECT INFORMATION

1 RESUME 1.1 ESSENCE OF PROJECT The project involves the construction of a plant for the production of complex cooling systems and heat exchangers RAAL® and sales of plant products in the territories of Russia and the CIS. Building of plant will come true from "the ground up" in three stages. Legal form of project - the closed joint-stock company (JSC) will be registered as a new legal entity by reorganization of existent company Limited Liability Company " RAAL».

The relevance of the project is linked:

• With the demand for products in the markets of Russia and the CIS countries due to its manufacturability and comparative cheapness with respect to competitors' analogues;

• Tightening by the state of environmental standards for the content of harmful substances in exhaust gases to the class of EURO-5 and Euro-6 (see Technical Regulation No. 609 "On Requirements for Emissions of Pollutant Substances by Automotive Equipment Issued for Use in the Territory of the Russian Federation ", Since January 1, 2014 in the territory of Russia operates the Euro-5 standard);with the dramatic change of course of dollar and euro to I chop, that took a competition at price to the minimum. Realization of project will allow to extract an additional income due to the decline of prime price and tax deductions for the import substitution productions organized in Russia;

• With a sharp change in the exchange rate of the dollar and the euro to the ruble, which reduced competition at a price to a minimum. Realization of the project will allow to extract additional profit at the expense of decrease in the cost price and tax privileges for import-substituting manufactures organized in Russia.

Supposed participants of project and their stake:

1. LTD "RAAL" (Russia, Taganrog), 25% is an initiator of project, in the function of that will enter operative management by an enterprise and realization of products in Russia and Republic of Belarus.

2. S.C. RAAL S.A. (Romania, Bystrica), 25% - Author supervision of technology, provision of equipment, necessary technological equipment and training of personnel.

3. INVESTOR, 50% is financing of the project with the subsequent sale of the share (5 years after the start of production). Within five years, the Investor receives the full amount of the invested funds taking into account the interest, according to the investment contract. Upon completion of the investment contract, the Investor and RAAL LLC determine the shares in the project and upon agreement of the parties, or purchase shares


RESUME

from the Investor in favor of RAAL LLC, or continue to work together within the Partnership to derive profit from the project.

The planned range of products includes:

• Aluminum cooling systems based on a technology Noсolok, • radiators of the cooling system, • oil-filled radiators, • charge air coolers, • capacitors, • systems of the combined cooling, made from an aluminum alloy and stainless steel.

Furthermore, it is assumed to manufacture of steel structures, which are used for cooling. Basic industries, consuming products:

INDUSTRY APPLICATION

Agriculture and forestry • tractors • combines, harvesters • loaders, autoloaders • weed-killing machines • garden machines • forestry machines

Construction • power-shovels, bulldozers • frontal loaders • autoloaders • self-propelled seals of soil • faucets • motor-graders, tractors • trucks, tippers • road-building equipment

Mining • dump • joined dump • mobile crushers • mining equipment

Motor industry • cars • motor cycles • carting, cross-country motor vehicles • snowmobiles, hydro skiing


RESUME

Commercial motor transport • busses • omnibuses • vans • freight motor transport

Railway equipment • locomotives • trams • handcars • metros • transformers of traction

Dehumidifiers of air • industrial dehumidifiers of air • water coolers

Compressors • stationary compressors • portable compressors

Power engineering • transformers, rectifiers • stationary and movable generators • wind power-stations • systems of recovery of energy

Engines • petrol engines • diesel engines • gas engines • engines for marine applications

Hydraulic equipment • hydraulic options for an industrial equipment • hydraulic equipment for the heavy special

techniqueSystems Heating Ventilation Conditioning • vent systems

• systems of acclimatization • refrigeration systems

INDUSTRY APPLICATION


RESUME

1.2 PROJECT IMPLEMENTATION AREA The project is expected to be implemented in Taganrog, Rostov region of Russia, which has a sufficient number of skilled labor, since here is located the LLC "RAAL", which is the representative of the Romanian plant S.C. RAAL S.A. (Bystrica, Romania) in the territory of Russia and CIS countries.

Construction of the plant is expected in the area of Mykolaiv Highway in Taganrog on a land plot of 12451 square meters. M. This land plot belongs to the category of land in settlements for use in order to operate the production base and is located within the city limits. The exact location of the land: Russia, Rostov Region, Taganrog, Nikolayevskoe Highway, 16-9.

The site has enough infrastructure for the production organization: there is a railway branch on the territory, an automobile exit to the Nikolayevskoye highway leading to the M-4 highway and the M-23 highway, all necessary communications (heating and water supply, sewerage, electricity). Cadastre cost of earth : 29 934 071, 65 rubles. Cost: 19 800 000 rubles.


RESUME

Section 1.2 is divided into two parts, communicating with each other: 0,4 hectares and 0,8 hectares. The smaller part of the plot goes to the adjacent route and is suitable for organizing commercial and office premises, most of the site will be used for production and storage space.

1.3 INVESTMENT OF PROJECT The cost of the project is 930,673.35 thousand rubles. (12,748,950 thousand €), subject to construction for 22 months and the beginning of sales of products in the 7th quarter (in the 19th month from the beginning of the project). The main investments are planned for the first 1.5 years of the project implementation.

1.4 FINANCING OF PROJECT Financing of the project is expected due to the investment of own funds in the amount of 4.7 million rubles. And due to attraction of borrowed funds in the amount of 920.453 million rubles.

It is planned to raise funds for a period of 18 quarters, at a cost of 15% per annum, with a deferred payment of the body of the loan for 8 quarters since the start of the project.

To implement the project, a strategic investor will be searched.

1.5 PLAN OF ACTIONS To implement the project, it is needed to solve the following tasks:

• Organize attraction of financing; • To advance development of design estimates; • Advance the order for the manufacture of equipment; • Conducting preparatory works for the construction of a site for construction; • Construction works • Installation and start-up of equipment; • Hiring; • The beginning of a "new" activity.

The schedule of the main stages of work and their duration are shown in the figure below:


RESUME

1.6 PROJECT EFFICIENCY Assumptions used in calculating the effectiveness of the model:

• Planning horizon - 5 years; • Planning interval - 1 quarter; • The project is designed for inflation-adjusted prices; • The project is calculated in Russian rubles.

As a result of economic calculations, the following indicators of project efficiency were derived:

The project shows a high level of profitability and payback for the average market indicators.

INDEX UNIT VALUE

Net present value (NPV) thousand of roubles 1 186 529

Discounted payback period (DPBP) years 3

Internal rate of return (IRR) % 30


RESUME

2 INITIATOR OF THE PROJECT An initiator of the project is “RAAL” LLC, registered in Taganrog, Rostov Region, at Bolnichnaya st., 11-D.

A company was opened on August 12, 2013, as a representative office of the Romanian plant S.C. RAAL S.A. (Bystrica, Romania) on the territory of Russia and the CIS countries and began to trade the production of the plant, deliver to the conveyors of various industrial enterprises in Russia and Belarus.

The company currently includes "ASTM Marketing" LLC, which is fully controlled by “RAAL“ LLC and carries out marketing, consulting and research activities in various business sectors. Website: http://raal-rus.ru, a web-site of a factory in Romania is www.raal.ro

OGRN: 1136154008891 The certificate of state registration: Series 61 № 007557341 of 12.08.13. Issued by the Inspectorate of the Federal Tax Service for the city of Taganrog, Rostov region 6154 INN: 6154129735; KPP: 615401001

Certificate of registration: Series 61 № 007557347 dated 12.08.13. Issued by the Inspectorate of the Federal Tax Service of Russia for Taganrog, Rostov region 6154 Legal address: 347930, 11, Bolshaya Str., Taganrog, 347930, Russia, Rostov Region. Actual address: 347930, 11, Bolshaya Str., Taganrog, 347930, Russia, Rostov Region. OKPO: 14545200; OKATO: 60437000000; OKOGU: 4210014; OCTO: 60737000; OKOPF: 12,165; OKFS: 16; OKVED: 51.66; 28.22.1; 29.24; 29.56.2; 31.61; 71.34; 74.13.1; Account number: 40702810000230004358 In the Rostov branch of OJSC Bank of Moscow Corr. Account: 30101810900000000991 BIK: 046015991;

Founders of LLC «RAAL":

• Strelkovsky Oleg Albertovich - 80% of the authorized capital • LLC "ASTM-Marketing" - 20% of the authorized capital (the share will be sold to S.C. RAAL S.A. or Investor) General Director: Oleg Strelkovsky Chief Accountant: Viktoria Liventseva


INITIATOR OF THE PROJECT

http://www.raal.ro

3 ESSENCE OF OFFERED PROJECT 3.1 COMMON DESCRIPTION The project involves the construction of a plant for the production of complex cooling systems and heat exchangers RAAL® and sales of plant products in the territories of Russia and the CIS.

The product range planned for release:

- aluminum cooling systems using Noolok technology, - radiators of the cooling system, - oil radiators, - charge air coolers, - capacitors, - Combined cooling systems made of aluminum alloy and stainless steel. - manufacture of steel structures, which are used for cooling systems. -The initiator of the project has the following property:

Implementation of the project, in addition to the obviously socially significant factors such as creating jobs and generating additional cash flow to the budget, will contribute to improving the overall standard of living in Taganrog.

As a result of the project, the average annual net profit from the beginning of the sale of products will be 101 million rubles.

3.2 PRODUCTS AND COMPETITIVENESS The market of radiators in Russia exactly follows the dynamics of the development of the automotive market.

The planned output of radiators will depend on orders from the automotive industry.

NAME OF PROPERTY COST (thousands of roubles)

Vehicle Toyota Camry 2014 y.o.i. 1500

Vehicle Audi A8l 2007 y.o.i. 850

Mobile drilling platform based on vehicle Gazelle Farmer Business 2016 y.o.i.

2 357

TOTAL: 4 707


ESSENCE OF OFFERED PROJECT

According to the forecasts of the Federal Road Agency of the Ministry of Transport of the Russian Federation, the total fleet of Russia in 2016 will be more than 50 million units.

The market of radiators and the production of cars depend on the socio-economic factors of the country's development (GDP, inflation, cross-rate of currencies, freight turnover, etc.).

In the short term, the demand for radiators will grow. Consumption of radiators will be provided due to the increase in the production of car factories and the expansion of the product range.

Table:

The plan of measures for import substitution in the automotive sector of Industry of the Russian Federation ¹ (extraction)

The most important condition guaranteeing the success of this project is a number of advantages with which the company plans to occupy one of the leading positions in the market. The main competitive advantages and favorable external factors of the project:

Location and provision with necessary infrastructure;

• availability of raw materials; • good transport and logistics capabilities; • more than 30 years of experience of the main manufacturer (RAAL) and its design and technological solutions; • administrative support of the project by the authorities; • unsaturation of the Russian market with such products.

# CODE JECFA PRODUCT/TECHNOLOGY TERM OF THE PROJECT

ACTUAL INDICATOR OF THE IMPORT SHARE BEFORE THE PROJECT IS IMPLEMENTED

MAX PLANNED SHARE OF IMPORT BY 2020 YR

2 20A2 29.32 Cooling radiators 2015-2016 95 % 5 %

5 20A5 29.32 Production of automotive components / Radiators / Plastic tanks / Radiator and coolers of SAC module

2014-2017 100 % 0 %



3.3 SHORT DESCRIPTION OF BASIC COMPETITORS The company RAAL in Russia and CIS countries actually has no competition, especially in the areas of production standards EURO-5 and EURO-6.

The main competitors of the future company in the market of Russia and the CIS:

• JSC «ShAAZ» - Shadrinsky auto-aggregate plant (Russia) - EURO-4,5 has just started producing • «Composite Group» - Buzuluk Mechanical Plant JSC (Russia) - EURO-4.5 has just started producing • LLC «Orenburg Radiator» (Russia) - EURO-4 • OAO «LUZAR» (Russia) - EURO-4.5 has just started producing • OOO «PromRadiator» - EURO-3,4 • NGO «TASPO-radiator» (Belarus) - EURO-4,5 has just started producing

The above companies are specially selected for technological production capabilities in accordance with the requirements of the EURO-norms, in order to clearly illustrate the advantages and prospects of the organization of the Russian production of RAAL. All these companies are capable of producing radiators using NOCOLOK technology and are developing the standards for EURO-5.

Undoubtedly, these companies have great potential and opportunities, but do not have on as much a flexible system of production and development of cooling systems as RAAL. RAAL has been producing radiators for five years according to the EURO-6 standards.

The EURO-6 standard will be introduced in Russia in 2016-2017, Belarus has already begun to produce cars according to the standards of EURO-6.

3.4 POTENTIAL MARKET CAPACITY The main consumers of future production will be:

• LLC "Likino Bus Plant". Potential: 1200 units / year, 600 units / year Estimated turnover amount of thousands of rubles / year: 117,000 The delivery is already in progress. The total amount of delivery was 68 million rubles, the order for February-May 2015 came up for another 36 million rubles. • OOO PAZ Pavlovsky Bus Plant. Potential: 4 500 units / year Estimated turnover amount of thousands of rubles / year: 112,500 • OOO Ulyanovsk Bus Plant Potential: 1200 units / year. Estimated turnover of thousands of rubles / year: 90,000



• ZAO Petersburg Tractor Works. Potential: 150-300 units / year Estimated turnover amount of thousands of rubles / year: 11,250 • OAO Promtractor Potential: 300 units / year. Estimated turnover amount thousand rubles / year: 23 100 • OJSC KZ "Rostselmash Group" • OJSC Nevyansky Machine-Building Plant Potential: 15-25 units / year. Estimated turnover amount of thousands of rubles / year: 7,750 • OJSC KAMAZ Potential - 45 000 units. in year Estimated turnover amount of thousands of rubles / year: 810,000

In addition, specialists of LLC RAAL in late 2015 worked with FSUE NAMI to create a cooling system for the Uniform Modular Platform (EMP) for cars of the Presidential Motorcade. The EMF will include four types of cars, the total volume of the expected production for 2018-2020 is 33,000. The estimated turnover is 510 000 rubles / year.

3.5 MAIN TECHNICAL CHARACTERISTICS OF THE PROJECT 3.5.1 GENERAL INFORMATION

The demand for auto components in the consumption markets is growing day by day, but the technologies in the development of cooling systems are not progressing at such a rapid pace as the growth of transport



requirements for ecology, economy, cheaper and at the same time facilitating the overall weight of the structure and parts.

The company-manufacturer RAAL for its 30 years of experience has reached the highest level of quality of development of heat exchange equipment, developing and investing in development only this sub-sector. In this segment of the market of heat exchangers, RAAL is rightfully ranked first in the combination of price and quality and the flexibility to develop new technological solutions to meet the needs of its customers.

Thanks to the know-how of RAAL, the production planned in Taganrog will become so flexible that it will not depend on small, medium or heavy workloads for orders and new projects.

Machines for the production of the core of any heat exchanger allow one hour to change the rigging and start production of other types of products, possibly small-scale, and then go back to a large order, thereby not denying and not overcharging the smaller orders.

The availability of such innovative equipment on the production lines allows very flexible and inexpensive re-profiling of the production under the most complex and experimental tasks at the request of consumers without expensive preparation and correspondingly increasing the cost of prototypes of products that are typical for batch production.

RAAL's technology has already enabled it and the Russian representative office to participate in expensive projects based on the prepared production, and not at the testing stage. This opened up opportunities for us to produce products corresponding to the latest technologies and environmental safety classes of EURO-5 and EURO-6.



3.5.2 PLANT STAFF AND PROJECT TEAM Project implementation management will be carried out by a team of experienced professionals, the basis of which will be staffed by reorganized RAAL LLC (Russia) and technical specialists of RAAL (Romania).

Staff costs for the project quarters are presented below (for more details see the image):



3.5.3 BRIEF DESCRIPTION OF PRODUCTION AND STORAGE AREAS The project requires the construction of industrial and storage areas:

Table Brief information on construction of production facilities

An example of a variant of a finished building is presented in the photo:

The design and estimate cost of one complex is: 24,840,000 rubles = 24 * 125 * 7.8 m Total 3 buildings 24 * 125 * 7.8 m = 74 520 000 rubles.

CONSTRUCTION TIME: WORKSHOP 1 - 2016YR, WORKSHOP 2,3 - 2016 / 2017 YRS

Area of construction Rostov region

Dimensions 3 buildings of 24x125x7,8m (height to the bottom of load-bearing structures)

Frame step 6m

Spans Single - span

Levels Single - floor

Snow area III

Wind area I

Frame Combined

- bearing skeletons of buildings - from cold-formed galvanized C-profiles (steel 350 according to GOST R 52246-2004 with zinc coating 275 g / m 2);

- Crane rack construction - from a welded I-beam profile of constant cross section (steel С255 in accordance with GOST 27778-88, coating - ground GF-021 with a thickness of 40 μm)

Crane overpasses Separately standing; Lifting capacity up to 10t. The mark of the top of the beam is 6.05 m; Crane span 22.16 m

Walls Assembly: three-layer (corrugated sheet, foil insulation 150 mm, profiled)

Roof Assembly: two-layer (profiled sheet, foil insulation 200 mm)

Translucent roof areas Polycarbonate

Roof equipment Fences and snow chains



3.5.4 BRIEF DESCRIPTION OF RAW MATERIALS The main raw materials for the production of products are: - clad aluminum in sheets, square bars, tubes and plates, different sizes and profiles; - steel sheet products of various sections and sizes, hardware products; - Welded wire, electrodes, fluxes and additives, technical lubricants and lubricating and cooling liquids for machine tools.

The main suppliers of raw materials for production are: - OK "RUSAL" - Aluminum rolling, - JSC EVRAZ Metal Inprom - Steel rolled products, - TPK "Metiznyi Alyans" - Hardware and fastening products

3.5.5 BRIEF DESCRIPTION OF THE TECHNOLOGY The acquisition of equipment for production is expected from the following suppliers: - INTERWESP Corporation, - OJSC Sterlitamak-MTE

The technological process is divided into three parts

1.ENGINEERING - Development of new projects on the technical task of the customer - for this purpose RAAL organized a close-knit team of engineers from 160 people in the sectors of heat sink, thermodesign, hydraulics, test bed, etc.

2. PRODUCTION - Actually this is the production of the cooling systems themselves and the experimental production of prototypes, which is organized together, this includes: • Manufacture of equipment, for assembling the core of the matrix (snake), radiator housing, equipment for soldering in furnaces using NOCOLOK technology, fasteners. • Assembly production, where all components are recruited into a single unit and fixed in a tooling. • Soldering in furnaces • Painting in chambers • Assembling in a single cooling unit, if required by the process • Packing and sending to the customer

3. MARKETING - The realization of finished products, as well as the search for new customers - the staff of managers to work with customers and its engineering capabilities.



4 Organizational plan 4.1 PROJECT STAGE Currently, preparations are being made for the implementation of the project, during which the issues of the final equipment assembly of the plants are determined, the marketing policy is being designed, the recruitment issues are being studied, and the financing of the project is being studied.

4.2 PLANNED TIMEFRAME The project is scheduled to start on 01.10.2016. After the start of financing, the equipment will be prepaid on a contract basis, work will begin on the preparation and arrangement of a site for plants, a contractor for construction will be hired. Completion of the investment stage of the work is planned to be carried out within 6 quarters from the beginning of the project.The whole project is designed for 20 quarters, the commissioning period is 22 months.

4.3 SCHEDULE OF PROJECT IMPLEMENTATION In the implementation of the project, the following main stages can be distinguished:

• Attracting financing; • Advancement of equipment; • Site preparation for plants; • Installation of equipment; • Personnel selection and training; • The beginning of a "new" activity.

NAME BRAND, MODEL Q-TY PRICE PER UNIT (EURO)

TOTAL (EURO)

TOTAL (Th.Roubles)

1 STAGE: Equipment, machinery, certification and construction works on a turn-key basis for assembly production:

RESULTS OF THE 1ST STAGE: 2 838 450 207 207

Guillotine shears and bending machines

Ermaksan PBP2600-100 2 40 000 80 000 5 840

Ermaksan PBP2100-40 1 36 000 36 000 2 628

Ermaksan HGD 3100-10 2 40 000 80 000 5 840

Ermaksan HGS 2600x6 1 28 000 28 000 2 044

Ermaksan GMR 2100-4 1 19 000 19 000 1 387

Ermaksan HGS 2600x6 1 28 000 28 000 2 044


ORGANIZATIONAL PLAN

Ermaksan HGS 2100-6 1 26 000 26 000 1 898

Ermaksan PBP2600-100 1 40 000 40 000 2 920

Ermaksan GMR 1400/3 1 15 000 15 000 1 095

Mechanical Press Yangli J23-10D 1 4 500 4 500 329

Yangli J23-40D 4 13 500 54 000 3 942

Yangli J23-63D 1 17 000 17 000 1 241

Band-saw Beka-Mak BMSO 325 1 10 000 10 000 730

Beca-Mak BMSO 280 1 9 000 9 000 657

Cutting machine AMADA ARIES 245 2 162 000 324 000 23 652

Hydraulic Press SAHINLER HCP 100 3 33 000 99 000 7 227

SAHINLER HCP 30 6 25 000 150 000 10 950SAHINLER AT-S1020-150 1 13 500 13 500 986

Welders FRONIUS MW400 10 1 200 12 000 876

FRONIUS TPS 4000 3 5 750 17 250 1 259

KEMPPI PRO 4200 3 3 650 10 950 799

Washer with hot water Own production 3 2 000 6 000 438

Washer with cold water Own production 3 2 000 6 000 438

Powder painting ITW GEMA 1 400 000 400 000 29 200

Overhead traveling crane 10 tonns 1 20 000 20 000 1 460

Crimping line Own production 2 42 000 84 000 6 132

Welding posts Own production 20 7 550 151 000 11 023

Instrumentation To machines and mechanisms - - 150 000 10 950

Storage equipment Shelvings 20 3 500 70 000 5 110

Telphers 0,5 - 3 tons 3 5 000 15 000 1 095

Manual hoist (shovel) 5 250 1 250 91


TOTAL (EURO)

TOTAL (Th.Roubles)


ORGANIZATIONAL PLAN

Packaging equipment 10 500 5 000 365

Motor transport Loader LIUGONG CPCD20 2 14 500 29 000 2 117

Truck – 10 tonns 1 50 000 50 000 3 650

GAZelle NEXT 2 14 000 28 000 2 044

TOTAL equipment: 2 088 450 152 457

Design and estimate documentation 250 000 18 250

Construction of the 1st workshop and warehouse 150 000 10 950

Certification of production 350 000 25 550

2nd STAGE: Construction of the 2nd and 3rd workshops, purchase of additional equipment, installation of an oven for soldering aluminum matrix fibers:

RESULTS OF THE 2ND STAGE: 4 232 000 308 936

Soldering line RAAL – technology NOCOLOK 1 800 000 800 000 58 400

Turning, milling and machining centers

CN GILDEMEISTER GDM 65/2A 2 120 000 240 000 17 520

Haas ST-25Y 5 95 000 475 000 34 675

Haas EC-1600ZT 2 280 000 560 000 40 880

Cutting machine AMADA ARIES 245 2 162 000 324 000 23 652

Laser cutting machine Ermaksan Fibermak LM 3x1,5 1 360 000 360 000 26 280

Plasma Cutting Machine Ermaksan EPL2x6 260 1 100 000 100 000 7 300

Hydraulic Press SAHINLER HCP 100 3 33 000 99 000 7 227

SAHINLER HCP 30 6 25 000 150 000 10 950SAHINLER AT-S1020-150 5 13 500 67 500 4 928

Welders FRONIUS MW400 10 1 200 12 000 876

FRONIUS TPS 4000 5 5 750 28 750 2 099

KEMPPI PRO 4200 5 3 650 18 250 1 332

Overhead traveling crane 10 tonns 2 20 000 40 000 2 920


TOTAL (EURO)

TOTAL (Th.Roubles)


ORGANIZATIONAL PLAN

Crimping line Own production 2 42 000 84 000 6 132

Instrumentation To machines and mechanisms -- ------ 120 000 8 760

Motor transport Loaders LIUGONG CPCD20 3 14 500 43 500 3 176

Truck – 22 tonns 2 90 000 180 000 13 140

Truck – 10 tonns 2 50 000 100 000 7 300

Truck – 5 tonns 2 35 000 70 000 5 110GAZelle NEXT – 1,5 – 3 tonns 5 14 000 70 000 5 110


Construction of the 2nd and 3rd workshops 175 000 12 775

Organization of the design department 115 000 8 395

STAGE 3: Installation of additional soldering lines and final equipment

TOTAL 3ST STAGE: 4 025 500 293 862

Cutting machines RAAL – для алюминиевой фибры 20 50 000 1 000 000 73 000

Soldering line RAAL – технология NOCOLOK 2 800 000 1 600 000 116 800

Turning, milling and machining centers

CN GILDEMEISTER GDM 65/2A 2 120 000 240 000 17 520

Haas EC-1600ZT 1 280 000 280 000 20 440

Laser cutting machine Ermaksan Fibermak LM 3x1,5 1 360 000 360 000 26 280

Plasma Cutting Machine Ermaksan EPL2x6 260 1 100 000 100 000 7 300

Assembly posts Собственное производство 10 7 550 75 500 5 512

Instrumentation К станкам и механизмам 0 0 120 000 8 760


Spare parts for equipment, cables and accessories for 1,5-2 years 150 000 10 950

Unexpected costs fund 100 000 7 300

Total for the project: 11 095 950 810 004


TOTAL (EURO)

TOTAL (Th.Roubles)


ORGANIZATIONAL PLAN

4.4 MANAGEMENT STRUCTURE Organizationally the project has 2 centers: a factory and a trading house in Taganrog. The distribution of the functional between the plant and the trading house is assumed to be as follows: • Plant - produces and develops products. • Trading House - sells products with all possible marketing moves. To manage the plant, a CEO is hired, who reports directly to investors.

Organizational structure of management (project)

4.5 PROJECT TEAM The project will be implemented by a team of professionals who have the necessary work experience and professional skills.

The core of the project team are successful entrepreneurs and managers who have many years of successful experience in the industry and are aware of the peculiarities of bringing a new brand of products to this market.

Brief CVs of the project team are presented in the Appendix.


ORGANIZATIONAL PLAN

INVESTOR

CEO

COMMERCIAL DIRECTOR PRODUCTION DIRECTOR FINANCIAL DIRECTOR

Sales department

Trading house

Procurement Division

PKO - Chief Designer

PRODUCTION

Planning department

Chief Accountant

Accounting, Financial Department

Director for Economics

4.6 SWOT ANALYSIS The main strength of the project is the growing demand for the planned assortment of products, the growth of the consumer environment.

In general, the project in question has undeniable strengths and competitive advantages, which makes it possible to evaluate the project as a promising one.

Strengths Weak sides

Sustainable development of the extractive, automotive and construction industries, agriculture Favorable geographical location. A well thought out sales strategy, combining advantageous price offers, the possibility of a phased investment, a system of discounts. Project management will be carried out by a team of professional managers

Average level of competition

There is a risk of an increase in the timing of the project in connection with the delay in the timing of approvals, etc. (administrative resource).

Opportunities Threats

Growing demand outstrips supply in the market, which allows new players to freely occupy a market niche.

Decrease in demand in case of unfavorable development of the economic situation.


ORGANIZATIONAL PLAN

5 FINANCIAL PLAN 5.1 BACKGROUND AND ASSUMPTIONS The initial data used in this business plan is provided by the Initiator of the project, as well as obtained through the use of a global Internet network with visits to sites corresponding to the business plan subjects.

The financial plan of the project was calculated taking into account the following assumptions: • Project duration - 5 years; • Planning interval - 1 quarter; • The project is calculated in constant prices; • The project is calculated in rubles.

5.2 TAX ENVIRONMENT Calculation of costs associated with the payment of taxes was carried out in accordance with the current tax policy of the state.

The following tax rates were adopted in the calculations:

1. Value Added Tax - 18%; 2. Profit tax - 20%; 3. The tax on the payroll fund is 30.2%; 4. NDFL - 13%; 5. Property tax - 2.2%.

The actual costs of paying taxes at the moment are difficult to assess, they will depend on the current tax policy of the state and the adopted taxation strategy.


FINANCIAL PLAN

5.3 CAPITAL EXPENDITURES Here are the capital costs of the project (in thousands of rubles)


FINANCIAL PLAN

5.4 REVENUE CALCULATION Planned sales volume (thousand rubles) for 5 years from the beginning of operation of plants (for more details see the annexes):

5.5 OPERATING EXPENSES The composition of the cost is shown in the following table:


FINANCIAL PLAN


FINANCIAL PLAN

5.6 NUMBER OF EMPLOYEES, WAGES The company-initiator of the project selected contractors and a team of managers of the construction and operation of the plant. The staffing schedule assumes hiring of 1000 people (7 months of the project), including administrative positions (for more details see the annexes). In the case of increased profits in the operation of plants in relation to the calculated in the business plan, it is planned to direct up to 10% of the additional profit received to stimulate staff.

The planned staffing structure is as follows:


FINANCIAL PLAN


FINANCIAL PLAN

5.7 SOURCES AND CONDITIONS OF FINANCING To implement the project, it is expected to attract a long-term loan of 904 million rubles. And the organization of factoring in the amount of 16.1 million rubles, which will be split into tranches starting from the first quarter of the project (thousand rubles).

The repayment schedule for long-term loans and factoring raised for project financing is shown below in the calculation model (the "Financing" sheet).


FINANCIAL PLAN


FINANCIAL PLAN

The loan is supposed to be borrowed at 15% per annum for a period of 18 quarters from the start of the project. In the first 8 quarters since the start of the project, vacations are planned for the payment of the body of the loan and it is planned to finance the construction of the plant and infrastructure, advance manufacturing and pay for equipment, its installation and commissioning, to build the necessary infrastructure and landscaping.

Financing of the project is expected due to the investment of own funds in the amount of 4.7 million rubles. And at the expense of borrowings in the amount of 920 million rubles.

Forecast data on income and expenditure of the project are found in the annex in the form of standard forms of financial reporting.

5.8 ESTIMATION OF ECONOMIC EFFICIENCY OF THE PROJECT 5.8.1 JUSTIFICATION FOR THE DISCOUNT RATE

The discount rate (%) is the comparison rate (the discount rate) for which the cash flows are discounted. Corresponds to the interest rate reflecting the alternative yield, or the cost of capital. Discounting is the operation of calculating the present value of money amounts relating to future periods of time.

The discount rate in this project was calculated on the basis of the accepted methodology.

A risk-free rate compensates for the value of money over time with a near zero risk level. Usually, a risk-free rate is understood as the norm of a compound interest, which in the form of profit can be obtained by investing money in absolutely reliable financial assets.

The size without a risk rate is estimated at the rate of return of the most reliable securities. According to experts, such bonds are still government bonds denominated in foreign currency (OVVZ). At the same time, the least risky assets for today are bonds with the most "long" maturity (2018, 2028, 2030):

Yield of government bonds (%):

RELEASE RETURN

Russia-2018-9t 5, 726

Russia-2028-7t 5, 993

Russia-2030-11t 5, 696


FINANCIAL PLAN

As a risk-free rate, the rate of yield on government bonds with a maturity in 2018 of 5.726% is adopted. The maturity of these bonds is closest to the duration of the project. The nominal risk-free rate was 5.7%. In addition, when calculating the discount rate, it is necessary to take into account the so-called "risk premium".

Methodological recommendations for evaluating the effectiveness of investment projects recommend taking into account three types of risk:

• country risk; • risk of unreliability of project participants; • risk of non-receipt of projected income.

Calculation of the discount rate,%

5.8.2 PROJECT PERFORMANCE INDICATORS Based on the results of calculations of the financial model of the project using the above data in the business plan, the project has the following performance indicators:

As a result of economic calculations, the following indicators of project efficiency were derived:

INDEX LEVEL

Nominal risk-free rate 5,7

Country risk, including: 6,8

- Socio-political 0,8

- Intraeconomic 3

- Foreign economic 3

Unreliability of project participants 0,5

Risk of shortage of income 2

Discount rate 15

INDICATOR UNIT VALUE

Net present value (NPV) Thsd. Rur 1 186 529

Discounted payback period (DPBP) Years 3

Internal rate of return (IRR) % 30 %


FINANCIAL PLAN

The effectiveness of the project is estimated as above the average for this level of investment and similar projects.

The discount rate is the rate of return (in%) that the investor needs to receive on invested capital. Those. The project is attractive to the investor if its rate of return exceeds the discount rate for any other way of investing with similar risk.

In addition, the following performance indicators were used in the calculations:

Net present value (NPV) - shows the amount of money that the investor expects to receive from the project, after the cash inflows have paid off its initial investment costs and periodic cash outflows associated with the implementation of the project.

The discounted payback period (DPBP) is the length of the period from the start point to the payback period of the project, taking into account discounting.

The internal rate of return (IRR) is the interest rate at which the net present value is 0.

Rate of return on discounted costs (PI) - the ratio of the amount of discounted cash inflows to the amount of discounted cash outflows.


FINANCIAL PLAN

6. RISK ASSESSMENT In this section, a qualitative risk analysis of the project is carried out, and general recommendations are given regarding methods of dealing with them.

The risks associated with the implementation of this project can be divided into several categories.

Nonspecific risks

The first group includes nonspecific risks, i.e. Directly or indirectly threatening almost any project. In this category, we can identify macroeconomic risks (deterioration of the economic situation in the country, fluctuations in exchange rates, etc.), administrative risks (changes in the rules of harmonization, tax legislation, etc.), as well as the emergence of force majeure circumstances. It is not worthwhile to consider this group of risks in detail, since it is almost impossible to reduce their probability.

The main method of dealing with nonspecific risks is insurance of the project. In addition, partial protection against threats of this category will be the flexibility and mobility of the company, allowing you to quickly respond to changes and quickly rebuild.

Organizational risks

Among the risks of the second group are the following:

# DESCRIPTION DEGREE OF THREAT OVERCOME METHOD

Increasing the duration of the project due to organizational reasons

1 Some risks of the project demonstrate a positive dependence on time, this threat requires special attention. Delaying the implementation of the project increases other risks (for example, marketing).

The probability of this risk is directly dependent on the organizational efforts to implement the project.

Minimize this threat by developing a detailed calendar plan and strictly following the rules of project management.

The emergence of unforeseen technological difficulties

2 When implementing almost any project, there is a possibility of unforeseen problems of a technical nature.

The probability of technological difficulties exists, but not very high, since the technical side of the project has been thoroughly worked out by its initiator.

Minimize this threat by hiring consultants, high-level specialists.

Violation of agreements by external project participants


RISK ASSESSMENT

Marketing risks

The third category includes marketing risks associated with the possible negative impact of the market environment and the conceptual marketing miscalculations of the project. Among the marketing risks are the following:

3 This group includes such risks as changes in conditions such as the cost and timing of construction, the supply of equipment and raw materials, financing conditions, etc., can lead to serious problems at the project implementation stage.

The likelihood of violation of agreements by outside project participants is low, since many of them have already established partnerships and established personal ties.

To minimize these threats, it is necessary to clearly state the obligations of the parties and legally formalize all agreements.



Risks associated with the actions of competitors. Calculation of project indicators was based on the assumption that the competitive situation will not fundamentally change in the near future. If the actions of competitors are active, it can negatively affect the prospects of the project.

1 The entry of new players. The probability of this risk exists, as a favorable market environment will attract new players to the market. The deterrent is a high investment value.

Companies entering the market will be able to compete with this project. Minimizing the risk, as the project's own idea, is, in time to occupy its niche. With sufficient saturation of the market, there is no motivation to create new companies.

Revaluation of the Sales Plan The financial indicators of the project are quite dependent on the timing and volume of sales. To the failure of the sales plan can result in a reassessment of the demand for the project's products on the market, gaps in marketing.

2 Revaluation of demand The probability is low, because the project is planned based on the specific needs and orders of existing potential buyers.

Nevertheless, to reduce the consequences of revaluation of demand can be through the establishment of effective sales channels, a sound marketing strategy.


RISK ASSESSMENT

From all of the above, we can draw the following conclusion: the risks associated with the implementation of the project are not significant, and most of them can be minimized with the help of competent management.

3 Ineffectiveness of the promotion program The probability of this risk is low, since the promotion of products will be managers who have a lot of experience in the market.

The main method of reducing this risk is to conduct additional marketing research and involve experienced specialists in the project to develop and implement marketing activities.



RISK ASSESSMENT


NOTES

raal bp 2017 eng galan · the level of materiality in this business plan is understood as the...

Documents