Farm Machinery Manufacturer Business Plan

ARD Unifert - Kurdistan.

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Executive Summary
ARD Unifert - Kurdistan. 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.

ARD Unifert - Kurdistan. 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.
ARD Unifert - Kurdistan. 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.

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 ARD Unifert - Kurdistan.  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

ARD Unifert - Kurdistan. 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. ARD Unifert - Kurdistan. aims to offer high-
quality 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

ARD Unifert - Kurdistan.'s keys to success will include:

1. A high level of quality in its product line.

2. A-Z equipment mechanization series for Vegetables, Cereals, Potatoes & Livestock.
3. Maintaining and growing its referral networks to generate new and repeat sales.
4. 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 ARD Unifert - Kurdistan. 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.

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Company Summary
ARD Unifert - Kurdistan. 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. ARD Unifert - Kurdistan. hopes to initially make a successful
effort to secure start-up financing to implement a new business opportunity. 

2.1 Company Ownership

ARD Unifert - Kurdistan. 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.

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

ARD Unifert - Kurdistan. 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.

ARD Unifert - Kurdistan. 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.
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Past Performance

2002 2003 2004

Sales £0 £189,336 £187,932

Gross Margin £0 £117,104 £114,356

Gross Margin % 0.00% 61.85% 60.85%

Operating Expenses £0 £53,688 £62,156

Collection Period (days) 0 0 0

Inventory Turnover 0.00 28.89 9.81

Balance Sheet

2002 2003 2004

Current Assets

Cash £0 £37,233 £22,870

Accounts Receivable £0 £0 £0
Inventory £0 £5,000 £10,000

Other Current Assets £0 £10,700 £13,980

Total Current Assets £0 £52,933 £46,850

Long-term Assets

Long-term Assets £0 £100,000 £100,000

Accumulated Depreciation £0 £3,104 £3,508

Total Long-term Assets £0 £96,896 £96,492

Total Assets £0 £149,829 £143,342

Current Liabilities

Accounts Payable £0 £0 £0

Current Borrowing £0 £59,015 £50,665

Other Current Liabilities (interest free) £0 £23,702 £13,501

Total Current Liabilities £0 £82,717 £64,166

Long-term Liabilities £0 £10,000 £10,000

Total Liabilities £0 £92,717 £74,166

Paid-in Capital £0 £10,000 £10,000

Retained Earnings £0 (£16,304) £6,976

Earnings £0 £63,416 £52,200

Total Capital £0 £57,112 £69,176

Total Capital and Liabilities £0 £149,829 £143,342

Other Inputs

Payment Days 0 30 30

Sales on Credit £0 £0 £0

Receivables Turnover 0.00 0.00 0.00

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Products and Services

ARD Unifert - Kurdistan. 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.

ARD Unifert - Kurdistan.  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.

ARD Unifert - Kurdistan. 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.

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 know-how
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.

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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
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. ARD
Unifert - Kurdistan. 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.

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Market Analysis

2005 2006 2007 2008 2009

Potential Customers Growth CAGR

Potato Crop Mechanization 2% 465 474 483 493 503 1.98%

Cereals Crop Mechanization 5% 370 389 408 428 449 4.96%

Vegetables Crop Mechanization 3% 175 180 185 191 197 3.00%

Beach Cleaning Machines and

2% 125 128 131 134 137 2.32%
Beach Creation systems

Fire Fighting Systems 1% 280 283 286 289 292 1.05%

Packing Technology and

5% 180 189 198 208 218 4.90%
Equipments

Livestock Machinery 7% 72 77 82 88 94 6.89%

Total 3.19% 1,667 1,720 1,773 1,831 1,890 3.19%

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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.

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.

ARD Unifert - Kurdistan.'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.

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Strategy and Implementation Summary

Emphasize Customer Service
ARD Unifert - Kurdistan. 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 ARD Unifert - Kurdistan. 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 fair-
exhibition 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
ARD Unifert - Kurdistan.. In close-knit communities like Cyprus, reputation is extremely
important, and word-of-mouth advertising is invaluable.

The following differentiate ARD Unifert - Kurdistan. 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.

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.

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Milestones

Milestone Start Date End Date Budget Manager Department

M&T +
Seek Financing 5/13/2009 6/27/2009 £1,000 Kouros & Panikos
Accounting

M&T +
Order of Equipments 6/27/2009 8/11/2009 £50,000 Kouros & Panikos
Accounting

M&T +
Spare Parts Orders 6/27/2009 8/11/2009 £4,000 Kouros & Panikos
Accounting

Marketing associates Contact 6/27/2009 8/21/2009 £2,000 Panikos Accounting

Printing advertising stationery 6/27/2009 9/5/2009 £3,000 Panikos Accounting

DVD and CD creation 6/27/2009 9/20/2009 £1,500 Kouros & Panikos M&T +
 Accounting

Direct Marketing 6/27/2009 10/30/2009 £2,000 Kouros M&T

M&T +
Contact Fair Organizers 11/19/2009 12/19/2009 £1,500 Kouros & Panikos
Accounting

International Fair Participation, M&T +

3/4/2010 3/7/2010 £2,000 Kouros & Panikos
Nicosia Accounting

M&T +
Thesallonoki Fair Arrangements 6/6/2010 6/10/2010 £3,000 Kouros & Panikos
Accounting

Totals £70,000

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5.3 Marketing Strategy

The overall marketing plan for ARD Unifert - Kurdistan. 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
ARD Unifert - Kurdistan. 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 ARD Unifert - Kurdistan. 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, ARD Unifert - Kurdistan. 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 ARD Unifert -
Kurdistan. 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 ARD Unifert - Kurdistan.
advertisement campaign.

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  ARD Unifert - Kurdistan., and keep the
reputation as the industry-leading manufacturer it represents.

Pricing

Currently, ARD Unifert - Kurdistan. maintains a commercial credit policy for business

customers with a net 30-day limit. Most of ARD Unifert - Kurdistan. 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 ARD Unifert - Kurdistan. 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.

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Sales Forecast

2005 2006 2007 2008 2009

Sales

A-Z potato mechanization £64,500 £70,950 £78,045 £85,850 £94,434

A-Z Cereals mechanization £41,000 £45,100 £49,610 £54,571 £60,028

A-Z Vegetable mechanization £47,500 £52,250 £57,475 £63,223 £69,545

Livestock Machines £39,900 £43,890 £48,279 £53,107 £58,418

Beach Cleaning £32,900 £36,190 £39,809 £43,790 £48,169

Packing Technology £41,200 £45,320 £49,852 £54,837 £60,321

Other Machinery £7,200 £7,920 £8,712 £9,583 £10,542

Total Sales £274,200 £301,620 £331,782 £364,960 £401,456

Direct Cost of Sales 2005 2006 2007 2008 2009

A-Z Potato Mechanization £43,215 £31,928 £35,120 £38,632 £42,496

A-Z Cereals Mechanization £20,500 £29,541 £32,495 £35,744 £39,318

A-Z Vegetables Mechanization £23,750 £35,530 £39,083 £42,991 £47,290

Livestock Machinery £27,252 £29,845 £32,830 £36,113 £39,724

Beach Cleaning Machines £23,030 £25,333 £27,866 £30,653 £33,718

Packing Technology £26,780 £29,458 £29,911 £32,902 £36,193

Other Machinery £5,040 £5,544 £6,098 £6,708 £7,379

Subtotal Direct Cost of Sales £169,567 £187,178 £203,403 £223,744 £246,118

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Management Summary
ARD Unifert - Kurdistan. 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

ARD Unifert - Kurdistan. 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.

Personnel Plan

2005 2006 2007 2008 2009

General Director £10,000 £10,500 £11,000 £11,500 £12,000

Accounting Director £10,000 £7,500 £8,000 £8,500 £9,000

Lathe Man £6,000 £6,000 £6,500 £7,000 £7,500

Welder / Fitter £6,000 £6,000 £6,500 £7,000 £7,500

Salesperson £6,000 £6,000 £6,500 £7,000 £7,500

Total People 5 5 5 5 5

Total Payroll £38,000 £36,000 £38,500 £41,000 £43,500

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Financial Plan
The following sections shows in detail that ARD Unifert - Kurdistan. 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. 

General Assumptions

2005 2006 2007 2008 2009

Plan Month 1 2 3 4 5

Current Interest Rate 5.00% 5.00% 5.00% 5.00% 5.00%

Long-term Interest Rate 8.50% 8.50% 8.50% 8.50% 8.50%

Tax Rate 11.00% 11.00% 11.00% 11.00% 11.00%

Other 0 0 0 0 0

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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.
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Break-even Analysis

Monthly Revenue Break-even £15,893

Assumptions:

Average Percent Variable Cost 62%

Estimated Monthly Fixed Cost £6,065

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). 

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Pro Forma Profit and Loss

2005 2006 2007 2008 2009

Sales £274,200 £301,620 £331,782 £364,960 £401,456

Direct Cost of Sales £169,567 £187,178 £203,403 £223,744 £246,118

Production Costs for Patented Planters £8,850 £9,735 £10,709 £11,779 £12,957

Total Cost of Sales £178,417 £196,913 £214,112 £235,523 £259,075

Gross Margin £95,783 £104,707 £117,670 £129,437 £142,381

Gross Margin % 34.93% 34.71% 35.47% 35.47% 35.47%

Expenses

Payroll £38,000 £36,000 £38,500 £41,000 £43,500

Marketing/Promotion £6,000 £6,000 £5,000 £5,000 £5,000

Depreciation £8,489 £8,952 £8,952 £6,733 £6,733

Insurance £480 £550 £600 £700 £800

Office consumables £200 £250 £300 £350 £400

Leasing £600 £650 £650 £650 £650

Trading expenses £400 £450 £500 £550 £600

Payroll Taxes £0 £0 £0 £0 £0

Electricity £1,400 £1,500 £1,700 £1,800 £2,000

Water £2,004 £0 £0 £0 £0

Fuels and Transport Expenses £3,100 £1,600 £1,700 £1,800 £1,900

Telex and Faxing £4,500 £2,400 £2,400 £2,400 £2,400

Banking rights £1,100 £1,000 £1,000 £1,100 £1,200

Travelling expenses £4,500 £5,000 £5,000 £5,000 £5,000

Tools Maintenance £2,004 £5,000 £5,000 £5,000 £5,000

Total Operating Expenses £72,777 £69,352 £71,302 £72,083 £75,183

Profit Before Interest and Taxes £23,006 £35,355 £46,368 £57,354 £67,198

EBITDA £31,495 £44,307 £55,320 £64,087 £73,931

Interest Expense £5,814 £4,830 £3,802 £2,775 £1,747

Taxes Incurred £1,891 £3,358 £4,682 £6,004 £7,200

Net Profit £15,301 £27,167 £37,884 £48,576 £58,251

Net Profit/Sales 5.58% 9.01% 11.42% 13.31% 14.51%

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.

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Pro Forma Cash Flow

2005 2006 2007 2008 2009

Cash Received

Cash from Operations

Cash Sales £205,650 £226,215 £248,837 £273,720 £301,092

Cash from Receivables £64,079 £74,958 £82,454 £90,699 £99,769

Subtotal Cash from Operations £269,729 £301,173 £331,290 £364,419 £400,861

Additional Cash Received

Sales Tax, VAT, HST/GST Received £0 £0 £0 £0 £0

New Current Borrowing £0 £0 £0 £0 £0

New Other Liabilities (interest-free) £0 £0 £0 £0 £0

New Long-term Liabilities £35,000 £0 £0 £0 £0

Sales of Other Current Assets £0 £0 £0 £0 £0

Sales of Long-term Assets £0 £0 £0 £27,003 £0

New Investment Received £0 £0 £0 £0 £0

Subtotal Cash Received £304,729 £301,173 £331,290 £391,422 £400,861

Expenditures 2005 2006 2007 2008 2009

Expenditures from Operations

Cash Spending £38,000 £36,000 £38,500 £41,000 £43,500

Bill Payments £201,427 £224,307 £246,170 £268,193 £292,490

Subtotal Spent on Operations £239,427 £260,307 £284,670 £309,193 £335,990

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out £0 £0 £0 £0 £0

Principal Repayment of Current Borrowing £7,800 £7,800 £7,800 £7,800 £7,800

Other Liabilities Principal Repayment £3,372 £3,375 £3,375 £3,379 £0

Long-term Liabilities Principal Repayment £7,351 £7,500 £7,500 £7,500 £7,500

Purchase Other Current Assets £500 £500 £500 £500 £500

Purchase Long-term Assets £50,000 £0 £0 £30,000 £0

Dividends £0 £0 £0 £0 £0

Subtotal Cash Spent £308,450 £279,482 £303,845 £358,372 £351,790

Net Cash Flow (£3,721) £21,691 £27,446 £33,051 £49,071

Cash Balance £19,149 £40,840 £68,286 £101,336 £150,407

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.

Pro Forma Balance Sheet

2005 2006 2007 2008 2009

Assets

Current Assets

Cash £19,149 £40,840 £68,286 £101,336 £150,407

Accounts Receivable £4,471 £4,918 £5,410 £5,951 £6,546

Inventory £11,582 £12,785 £13,893 £15,283 £16,811

Other Current Assets £14,480 £14,980 £15,480 £15,980 £16,480

Total Current Assets £49,682 £73,523 £103,069 £138,550 £190,244

Long-term Assets

Long-term Assets £150,000 £150,000 £150,000 £152,997 £152,997

Accumulated Depreciation £11,997 £20,949 £29,901 £36,634 £43,367

Total Long-term Assets £138,003 £129,051 £120,099 £116,363 £109,630

Total Assets £187,685 £202,574 £223,168 £254,912 £299,874

Liabilities and Capital 2005 2006 2007 2008 2009

Current Liabilities

Accounts Payable £12,565 £18,962 £20,347 £22,195 £24,206

Current Borrowing £42,865 £35,065 £27,265 £19,465 £11,665

Other Current Liabilities £10,129 £6,754 £3,379 £0 £0

Subtotal Current Liabilities £65,559 £60,781 £50,991 £41,660 £35,871

Long-term Liabilities £37,649 £30,149 £22,649 £15,149 £7,649

Total Liabilities £103,208 £90,930 £73,640 £56,809 £43,520

Paid-in Capital £10,000 £10,000 £10,000 £10,000 £10,000

Retained Earnings £59,176 £74,477 £101,644 £139,528 £188,103

Earnings £15,301 £27,167 £37,884 £48,576 £58,251

Total Capital £84,477 £111,644 £149,528 £198,103 £256,354

Total Liabilities and Capital £187,685 £202,574 £223,168 £254,912 £299,874

Net Worth £84,477 £111,644 £149,528 £198,103 £256,354

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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. 

Ratio Analysis

2005 2006 2007 2008 2009 Industry Profile

Sales Growth 45.90% 10.00% 10.00% 10.00% 10.00% -0.95%

Percent of Total Assets

Accounts Receivable 2.38% 2.43% 2.42% 2.33% 2.18% 32.82%

Inventory 6.17% 6.31% 6.23% 6.00% 5.61% 34.00%

Other Current Assets 7.72% 7.39% 6.94% 6.27% 5.50% 14.34%

Total Current Assets 26.47% 36.29% 46.18% 54.35% 63.44% 81.16%

Long-term Assets 73.53% 63.71% 53.82% 45.65% 36.56% 18.84%

Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabilities 34.93% 30.00% 22.85% 16.34% 11.96% 26.15%

Long-term Liabilities 20.06% 14.88% 10.15% 5.94% 2.55% 23.74%

Total Liabilities 54.99% 44.89% 33.00% 22.29% 14.51% 49.89%

Net Worth 45.01% 55.11% 67.00% 77.71% 85.49% 50.11%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Gross Margin 34.93% 34.71% 35.47% 35.47% 35.47% 27.32%

Selling, General & Administrative Expenses 29.35% 25.71% 24.05% 22.16% 20.96% 14.62%

Advertising Expenses 3.10% 2.97% 2.70% 1.84% 1.68% 1.07%

Profit Before Interest and Taxes 8.39% 11.72% 13.98% 15.72% 16.74% 3.82%

Main Ratios

Current 0.76 1.21 2.02 3.33 5.30 2.85

Quick 0.58 1.00 1.75 2.96 4.83 1.44

Total Debt to Total Assets 54.99% 44.89% 33.00% 22.29% 14.51% 51.13%

Pre-tax Return on Net Worth 20.35% 27.34% 28.47% 27.55% 25.53% 5.77%

Pre-tax Return on Assets 9.16% 15.07% 19.07% 21.41% 21.83% 11.81%

Additional Ratios 2005 2006 2007 2008 2009

Net Profit Margin 5.58% 9.01% 11.42% 13.31% 14.51% n.a

Return on Equity 18.11% 24.33% 25.34% 24.52% 22.72% n.a

Activity Ratios

Accounts Receivable Turnover 15.33 15.33 15.33 15.33 15.33 n.a

Collection Days 29 23 23 23 23 n.a

Inventory Turnover 12.00 15.36 15.25 15.34 15.34 n.a

Accounts Payable Turnover 17.03 12.17 12.17 12.17 12.17 n.a

Payment Days 27 25 29 29 29 n.a

Total Asset Turnover 1.46 1.49 1.49 1.43 1.34 n.a

Debt Ratios

Debt to Net Worth 1.22 0.81 0.49 0.29 0.17 n.a

Current Liab. to Liab. 0.64 0.67 0.69 0.73 0.82 n.a

Liquidity Ratios

Net Working Capital (£15,877) £12,742 £52,078 £96,890 £154,374 n.a

Interest Coverage 3.96 7.32 12.20 20.67 38.46 n.a

Additional Ratios

Assets to Sales 0.68 0.67 0.67 0.70 0.75 n.a

Current Debt/Total Assets 35% 30% 23% 16% 12% n.a

Acid Test 0.51 0.92 1.64 2.82 4.65 n.a

Sales/Net Worth 3.25 2.70 2.22 1.84 1.57 n.a

Dividend Payout 0.00 0.00 0.00 0.00 0.00 n.a

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