anexbaby.com

INVESTMENT PROPOSAL

anexbaby.com

Corporate seat: POLSKA, Warszawa, ul.Smulikowskiego 1/3, lok 1. 00-389

Project owner: ТМ “Anex” (Polish and Ukrainian ownership)

Line of business: Baby carriage manufacture

Objective: Business plan objective is focused on the increase in output of multy-function baby carriages.

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Distinct product design; Full compliance with European standards;

Environmenally friendly and safe materials;

Built-in reliability of the product structure and components;

Decent quality-to-price ratio.

Our customers will receive the following:

Project initiators: Project is being implemented by the young (21 to 32) goal-oriented team, who are focused on innovative solutions. Being a young (3 years in the industry) and fast-growing company, we still pride ouselves on making significant effort aimed at innovations. The latter have been brought about in consequence to high activity teamwork. Now we can safely say that our company holds a prominent place in the baby stroller industry.

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2012 February

trade mark was registered.

“Anex” trade mark was registered in 2012 .On the initial stage we started to manufacture the parts that were then in demand. The stroller frames we made were made of metal and their level of workmanship and structural reliability proved quite distinctive in the industry environment at that time. In such a way we located a niche of our own and managed to safely enter the market.Navara

2012

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2013 March

2014 May

2014

2013

Exhibition “Mir Detstva” Moscov

Exhibition “Babyexpo” Kyiv

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2015 January

Exhibition “Mir Detstva” Minsk

With the Ukrainian economy plunging into deep crisis, a decision was taken to have the plant relocated to Poland. Predictability of polish tax legislation facilitated our expanding into the new markets and helped us timely secure VAT returns. We also managed to go through certification process in third countries. In doing so, we still elected to let the sewing shop remain in Ukraine aiming at the sawn sets cost reduction resulting from the reasonable labor costs there. The whole bulk of cloth which is utilized for sewing is nowadays delivered - by way of temporary imports - from Poland, and is therefore exempt from tax due to the relevant regulations in both countries.

2015 March

2015

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• New stroller prototypes have been designed and elaborated;• A mold tool for in-house production of specific parts designed and manufactured;• Two new (“Sport” and “Classic”) models with aluminum frames commercialized;• Design patents for new production pieces taken out;• A brand new corporate site launched which is now free from defects the old version had ;

• Printed ads produced;

In 2014-2015 our collaborative work has helped us tackle a range of tasks, such as:

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• Communities on Facebook, Instagram, Вконтакте, Youtube created;

• Videos made;

• Internet advertising launched;• A new system of sales elaborated;• EN 1888 2012 Certificate (to facilitate the entry into the European markets) received;• Customs Union Certificate (RF, Belarus, Kazakhstan) received;• Successful sales in the RF and Belarus launched;• A sales team who are experienced in the European industry segment staffed and built.

instagram.com/anex_baby facebook.com/AnexBaby youtube.com/channel/UCIqYJ_KZrZDTLf51OeMLPsQ

https://www.youtube.com/watch?v=yQKi913NXf4 https://www.youtube.com/watch?v=_K-2zYxryas

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Exhibition “Mir Detstva 2015” Moscov

2015 May

2015

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Whereas the manufacture of sets, their final assembling and boxing is performed in Częstochowa, Poland.

At the moment the quantity of 1000-1200 units are manufactured each month, while the ultimate capacity will allow up to 2000 sawed sets to be produced. Facilities in Poland help provide 2500 frames as assembled and packaged there.

During 2015 sales period we were in a position to market more strollers than we could produce. Although the run on strollers has being grow-ing slack since November, we now produce and market 900 strollers a month and our volumes keep bulking due to a constant increase of a customer base.

If the demand keeps steady and we have managed to bring our new models onto the market, the sales will start growing dramatically and we will soon reach the production volume of 3 thousand pcs per nonths. It is worth mentioning that most of the produce is distributed on the pre-order basis. We have our own sales outlets in Europe, Ukraine and Russia, and the staff there effect sales directly to retailers. Hence, their sales efficiency is not limited by only one distributor. Every new day now brings us a new sales outlet in one of the European cities, to which de-liveries of ТМ “Anex” prams are effected.

We are therefore positive that, in view of the prospective product line extension, we will easily hit the 5000 units mark..

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Investment programThe demand for baby buggies keeps growing all around the world, which is checked out by recent childbirth figures:

World Birth and Death Rates

Birth Rate Death Rate

19 births/1,000 population 8 deaths/1,000 population

131,4 million births per year 55,3 million people die each year

360,000 births per day 151,600 people die each day

15,000 births each hour 6,316 people die each hour

250 births each minute 105 people die each minute

Four births each second of every day Nearly two people die each second

Average life expectancy at birth is approximately 67 years. Sources: Population Reference Bureau & The World Factbook (Central Intelligence Agency)

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Right from the beginning of 2015 we are planning to boost production, expand business and accelerate sales:

Accelerating sales in the RF, Poland, Kazakhstan and Belarus;

Reaching the new markets;

Increasing product promotion costs;

Increasing production capacity;

Replenishing stock and setting up new production facilities;

Accelerating funds inflw into innovation activities;

During 2015-2016 a more substantial investments are expected to arrive into R&D. While the product line being further expanded and new one-of-a-kind models hitting the shelves, the 3000 pcs\month mark appears well attainable;

By 2017 a press mold shall have been purchased in China as well as orders for umbrella-type models placed with Chinese manufacturers. By now we have established good partner relationship with com panies there and one of our models was produced in China, under our name;

Within 2017-2018, we envisage our expanding into the new markets and increasing output up to 5000 pcs\month. Unlike the 50 Polish pram manufacturers with their circa 10000 pram pcs being normally furnished with standard, trite accessories, we are sure to stand out in a crowd. Offering one of a kind, custom-made components we enjoy the market advantage which will help us secure both large-scale customers and steady end users;

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We have positive sales experience in China, too, as the demand for quality European products, as well as the ready market, is firmly growing there. There is a crucial difference between buggies made in China and Poland, concerning their exterior and specs. Therefore, in China perspectives for TM “Anex” goods remain nothing but promising. Some of our industry counterparts, who have been into baby stuff since 2014, were quite successful in China, wherein the competition in high quality strollers segment has been quite slack.

Perspective customers: Wholesellers and retailers of products for children, Internet shops. Customers in Belarus, Ukraine, Poland, Kazakhstan and Russia have confirmed their commitment to ТМ “Anex” brand, and so far scheduled further purchases.

Time frame and project recoupment period: investment horizon 2015-2016

Provided the investments have been attained, we are in a position to upgrade and expand production facilities and eventually reach the 4000 pcs volume by 2016.

Average cost per one buggy makes $280.00, while the net revenue equals to 12% ($33.00) per unit.

In the event the marketed output has amounted to 4000pcs a month, the annual revenue will reach $ 1 612 800. The lowest return per unit figure has been used for the calculation purposes, and in the meantime, should the unique pram models be put into production and be marketed, the absolute revenue figure will raise substantially.

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Company assets:

• Framework production plant located in Poland;

• Fully furnished sewing shop (1500m2 floor space) built on the privately owned land plot (0,4hectars);

• Working assets;

• Registered trade marks;

• Fully stocked outlets in Poland and Ukraine;

• Within 3-year time period the cash invested into the company totaled to circa $1,9mln. $600 K of the mentioned sum was a private loan and has to be paid off after the funds for the company have been secured.

Project value: 4,5-5,3 mln US dollars.

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What is planned after the investments have been received:

• Additional plant items are to be purchased and the sewing shop upgraded: total of $300000. That will help us have some of the manufacturing processes automated, labor costs redused and the eventual out put increased up to 2,5 thousand sets;

• A new warehouse facility and a production unit to be set up in Poland for final assembly and packaging of prams - $1 500 000 (5 thousand m2);

• Press molds for manufacturing unique parts -300 thousand dollars;

• Purchase of commercial vehicles - 200 thousand dollars US;

• Increasing the working assets – 2,6 mln dollars US (less $ 600 000 for settling the private loan);

• Press-forms order (umbrella type prams) to be placed in China - 300 thousand dollars US;

The prospective investor is expected to buy into 45% of share stock, or disburse a loan at 6-7% interest.The investments will primarily be unilized, by reasonable lots, to replenish company assets with each lot being distinctly set out on our side. (One must admit that - due to the Ukrainian taxation practices situation - not all volumes are normally entered into the tax accounting reports. Partly they are only reflected in the financial accounting) .