CONTACT INFORMATION Branch: Mechanical Engineering Business Name: «DEMUT» Manufacture of electrical equipment Address: Kyiv region, village Kotsyubinskoe Project Stage: Startup (Startup / Seed) Phone Number: +380675051920 Required investments: $ 660 000 Email Address: [email protected] Investment type: Equity Official website: http://www.demut.in.ua/ PBP: 30 months Skype: demut

FINANCIAL PLANNING Total cost of project, $ 760 000 Own sources, $ 100 000: - 23 630 - 3D modeling and detailing in DWG; - 48 600 – prototyping Hood; - 20 000 – the design of the production process; - 7 700 – staff recruitment; - Mercedes sprinter; - own warehouse 120 м2 Required investments, $ 660 000 Scheduling of 1 month = 311 256 (prepayment for ИТОГО: investments, $ equipment) + 12 620 (marketing costs) 518 760 – equipment = 323 876; procurement; 3 month = 207 504 (payment for 112 240 – components equipment) + 12 620 (marketing costs) procurement; = 220 124; 25 240 – marketing costs; 4 month = 112 240 (components 3 760 – unexpected costs procurement) + 3 760 (unexpected costs) = 116 000 Terms of attracting Direct investments (equity) investments The preliminary offer to  70% of the profit until the payback period and 50% over the next year; the investor  PBP - 30 months;  the equipment is in the investor property (prior to the return on investment) and then can go to the initiator of the project Exit strategies Direct sale of the investor's part to another investor. Total sale the company to the larger competitor PYRAMIDA Intellectual Property The rights of the trademark and patents (in Ukraine) belong to the author of the project

FINANCIAL FORECAST 1-st year 2-nd year 3-d year Total Revenue, $ 2 504 400 2 504 400 2 504 400 7 513 200 The cost price, $ 1 894 524 1 932 090 1 932 090 5 758 704 Profit, $ 609 876 572 310 572 310 1 754 496 Return on investment, ROI, % 265.8 Payback period, PP, months 30

ABOUT COMPANY The field of company activity is modeling, production and marketing of large household appliances and accessories for kitchen.

Problem worth solving The uniformity of electrical kitchen appliances, poor build quality, high prices and poor service.

Start of production Rent: Kiev region, village Kotsyubinskoe. Duration: 4 months (delivery and commissioning of equipment, staff training). Consultant is process engineer of Italian company “Fabita”.

Competitive advantages of the company are as follows: • the modeling that allows to stand out favorably among competitors and react instantly to changes in market conditions; • the production of spare parts and components that allows to sell them to the competitors; • a multi-stage quality control; • a line of large-production (from the hinge to the elevator) that reduces key risks; • the ability to produce ovens, cooktops, dishwashers, electric convectors.

TEAM AND KEY ROLES Office Team - 6 persons:  Evgeny Yurchenko - CEO, author of the project with 17 years’ experience in sales and brands promotion of electrical kitchen appliances.  Senior Sales Manager - with more than 10 years’ experience.  3 Region Sales Managers - with more than 3 years’ experience in promotion TEKA, SMEG, FABER, MIRTA, PIRAMYDA, МИРС.  Accouter - with more than 3 years’ experience.

Production Team – 19 persons:  Technologist - with 15 years’ experience.  Master (Head of Production) - with more than 8 years’ experience with tin and bending work.  Staff - 17 people with more than 7 years’ experience.

Consultant - process engineer of Italian company “Fabita”.

PRODUCTS OR SERVICES The products and services are as follows:  the modeling and production of large household appliances and accessories for kitchen;  the promotion and export under company's brand.

The main products on the initial stage are hoods (standard, classic and chimney).

The volume of production – up to 60 000 pieces per year: FS and Telescope - 70%; Airline - 30%. Production plan are as follows:  ovens;  cooktops;  dishwashers;  electric convectors.

Catalogue

Airforce Airline FS T-Glass Telescope

H-1 H-2 H-3 H-3 BLDIX

MARKET The sales of hoods in Ukraine every year are as follows:  FS – 3 million pieces;  Telescop – 1.5 million pieces;  Chimney – 1.6 million pieces

The monthly turnovers of hoods' producers are as follows:  FS - $ 35 000 - 200 000.  Telescop - $ 27 000 - 360 000.  Chimney - $ 50 000 - 130 000.

Competitors ТМ «PYRAMIDA», TM «CATA», ТМ «VENTOLUX», ТМ «Eleyus», TM «Jantar»

DEMUT, VENTOLUX, PYRAMIDA, ELEYUS, JANTAR CATA, Spain/ Ukraine China China / Ukraine Ukraine China Price, $ 36-105 42-115 43-117 46-122 55-140 Service, years 3+1 2+1 1/2 2/3 1/2 Design New Standard Standard Standard Obsolete Build quality +++ - - + +\- Market size, % 1.5 20 26 5 5

COMPETITIVE ADVANTAGES Own modeling - allows for instant react to changes in demand. Low price - up to 35% lower than in European countries. Stylish, ergonomic and exclusive design - more than 90% of the focus group confirm. Unique design details - increasing productivity by 15% and decreasing in engine noise and vibration by 20%. Prolonged warranty - 3-year warranty and 1 year of free service for individual models.

The key feature that is planned to be added is sensor fire safety.

TARGET MARKET Ukraine, Russia, Moldova, Kazakhstan, the countries of Europe (the Balkans close).

Potential customers B2C: the end users with low and middle level of income. B2B: the private entrepreneurs, the shops of home appliances and furniture, the small and large retail chains.

Sales channels The 1st year - retail sales, small and large retail chains, online retailers in Ukraine. The 2nd year - retail sales, small and large retail chains, online retailers in Ukraine + export in Russia, Moldova, Kazakhstan, the countries of Europe (the Balkans close).

Sales stimulation is bonus program for shop assistants.

CURRENT STATUS Developed:  models of hoods - FS, H-1, H-2, H-3, Telescope, Airline, Airforce, Tglass;  model of electric convector.

Produced: the 4-test sample of hoods: FS, Telescope, Airline, Airforce.

Own funds - $ 100 000 (for modeling and prototyping; design of the production process, the selection of personnel for the production and sales).

In development - a set of spare parts.

Pre-orders - 5 from Ukraine.

Preliminary agreements  in Moldova is MAXIMUM;  in Kazakhstan is SULPAK.

Documentation:  business plan;  TM and patents - in the registration process.