feasability study caan_english

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Feasibility Study on Industrial Park Creation on the territory of „CAAN” JSC, STRASENI

The study was developed by „ProConsulting” LLC, tel./fax: 21-00-89 2

C O N T E N T S

ABBREVIATIONS .............................................................................................................................................................. 6

EXECUTIVE SUMMARY .................................................................................................................................................... 7

1. INTRODUCTION....................................................................................................................................................... 9

1.1. DESCRIPTION OF THE PROJECT IDEA AND THE CONCEPT OF INDUSTRIAL PARK ............................................................. 9 1.2. GOAL AND OBJECTIVES OF THE STUDY ..................................................................................................................... 9 1.3. BRIEF PRESENTATION OF AN ECONOMIC ENTITY .................................................................................................... 10 1.4. PRESENTATION OF ELABORATING COMPANY .......................................................................................................... 11 1.5. METHODOLOGY .................................................................................................................................................. 11

2. ANALYSIS OF THE REGION .................................................................................................................................. 12

2.1. ANALYSIS OF BUSINESS ENVIRONMENT ..................................................................................................... 12 2.1.1. Sectorial analysis ........................................................................................................................................ 12 2.1.2. Analysis of regional activities of enterprises ............................................................................................. 19 2.1.3. Analysis of the district budget .................................................................................................................... 19 2.1.4. Participation in district and national projects .......................................................................................... 21

2.2. ANALYSIS OF THE INVESTMENT CLIMATE ................................................................................................. 21 2.3. ADMINISTRATIVE-TERRITORIAL ORGANIZATION .................................................................................................... 23 2.4. ANALYSIS OF SOCIO-ECONOMIC ENVIRONMENT ...................................................................................................... 24

2.4.1. Analysis of demographic situation ............................................................................................................. 24 2.4.2. Labour force analysis ................................................................................................................................. 25 2.4.3. Analysis of the population well-being and labour performance ............................................................... 28

2.4.4. ANALYSIS OF PHYSICAL INFRASTRUCTURE ........................................................................................... 30 2.4.5. Analysis of natural resources ..................................................................................................................... 30 2.4.6. Analysis of transport infrastructure .......................................................................................................... 31 2.4.7. Analysis of public utility infrastructure ..................................................................................................... 33 2.4.8. Analysis of vocational and higher education institutions ......................................................................... 36

3. LEGAL FRAMEWORK ............................................................................................................................................ 38

3.1. ANALYSIS OF THE LEGAL FRAMEWORK OF THE RM ................................................................................................ 38 3.2. ANALYSIS OF LEGAL CONFORMITY OF THE MANAGING ENTERPRISE .......................................................................... 39

4. ECONOMIC ENTITY PRESENTATION ................................................................................................................. 42

4.1. PROFILE OF THE ENTERPRISE ............................................................................................................................... 42 4.1.1. General presentation .................................................................................................................................. 42 4.1.2. Brief historical review ................................................................................................................................ 42 4.1.3. Fields of activity .......................................................................................................................................... 42 4.1.4. Dimensions of the enterprise ...................................................................................................................... 43

4.2. ENTERPRISE’S POTENTIAL ................................................................................................................................... 43 4.2.1. Diagnosis and infrastructure of location ................................................................................................... 43 4.2.2. Technical diagnosis .................................................................................................................................... 46

4.2.2.1. Real estate description ...................................................................................................................................... 46 4.2.2.2. Description of facilities and equipment ........................................................................................................... 51

4.2.3. Operational diagnosis ................................................................................................................................ 52 4.2.3.1. The list of enterprises ........................................................................................................................................ 52 4.2.3.2. Buildings ............................................................................................................................................................. 55 4.2.3.3. Equipment .......................................................................................................................................................... 55

4.2.4. Human resources and organizational structure ....................................................................................... 56 4.2.4.1. Management and organizational structure ...................................................................................................... 57 4.2.4.2. Structure of human resources........................................................................................................................... 57

4.3. COMMERCIAL AND MARKETING DIAGNOSIS ............................................................................................................ 58 4.4. ECONOMIC AND FINANCIAL DIAGNOSIS .................................................................................................................. 59

4.4.1. Balance sheet analysis ................................................................................................................................ 59



4.4.2. Analysis of financial results ........................................................................................................................ 62 4.4.3. Analysis on the basis of financial indices ................................................................................................... 64

4.4.3.1. Liquidity ratios ................................................................................................................................................... 64 4.4.3.2. Profitability ratios .............................................................................................................................................. 65 4.4.3.3. Ratios of financial stability ................................................................................................................................ 65 4.4.3.4. Analysis of rate of turnover ............................................................................................................................... 66 4.4.3.5. Profitability analysis .......................................................................................................................................... 67

4.5. SWOT ANALYSIS ............................................................................................................................................... 68

5. SCENARIOS OF THE INDUSTRIAL PARK DEVELOPMENT............................................................................... 69

5.1. DETERMINING THE SCENARIO FOR THE INDUSTRIAL PARK DEVELOPMENT ................................................................ 69 5.2. SELECTION, ANALYSIS AND SUBSTANTIATION OF THE OPTIMAL SCENARIO................................................................. 74 5.3. SALES MARKET FOR PRODUCTION ACTIVITY: .......................................................................................................... 76 5.4. IDENTIFICATION OF POTENTIAL RESIDENT ENTERPRISES ........................................................................................ 80 5.5. IDENTIFICATION OF THE SOURCES OF FINANCING ................................................................................................... 81 5.6. ORGANIZATION OF THE INDUSTRIAL PARK’S ACTIVITY ............................................................................................ 82

6. ACTION PLAN ......................................................................................................................................................... 85

6.1. LEGAL ACTION PLAN .......................................................................................................................................... 85 6.2. OPERATIONAL ACTION PLAN ............................................................................................................................... 88

6.2.1. Activities necessary to rehabilitate constructions and objects belonging to the Straseni "CAAN" JSC ... 88

7. FINANCIAL AND INVESTMENTAL DIAGNOSIS ................................................................................................. 90

7.1. ESTIMATION OF THE NECESSARY VOLUME OF INVESTMENTS .................................................................................... 90 7.2. FINANCIAL PLAN ................................................................................................................................................ 92

7.2.1. Forecast of the managing enterprise income ............................................................................................ 92 7.2.2. Forecast of expenses of the managing enterprise ..................................................................................... 94 7.2.3. Forecast of financial results ....................................................................................................................... 94 7.2.4. Forecast of cash flow .................................................................................................................................. 96 7.2.5. Forecast of the balance sheet ..................................................................................................................... 98 7.2.6. Forecast of financial indicators ............................................................................................................... 100

7.2.6.1. Indicators of profitability ................................................................................................................................ 100 7.2.6.2. Liquidity indicators ......................................................................................................................................... 101 7.2.6.3. Indicators of financial stability ....................................................................................................................... 101 7.2.6.4. Turnover Speed Indicators.............................................................................................................................. 102

7.3. ESTIMATION OF INVESTMENT EFFICIENCY ........................................................................................................... 103

8. SOCIAL AND ECONOMIC AND ENVIRONMENTAL IMPACT OF THE INDUSTRIAL PARK ON THE REGION

105

9. GENERAL CONCLUSIONS .................................................................................................................................... 108

List of tables Table 1. Main socio-economic indices, Straseni .................................................................................................................... 12 Table 2. Situation in industrial sector of Straseni district, 2009 ............................................................................................ 14 Table 3. Agriculture in Straseni district ............................................................................................................................... 15 Table 4. Service sector of Straseni district, 2009 .................................................................................................................. 17 Table 5. Indices of regional activities of enterprises ............................................................................................................. 19 Table 6. Execution of Straseni budget, income taxes, taxes and basic payments, 2007-2008 .................................................. 20 Table 7. Execution of district budget in the part of expenses for 2008 (thousand MDL)......................................................... 20 Table 8. General demographic data ..................................................................................................................................... 25 Table 9. Total availability of population in area of 30 km around Straseni, 2007. .................................................................. 27 Table 10. Salaries in Straseni district, January-August 2010 ................................................................................................. 29 Table 11. Network of local roads ......................................................................................................................................... 33 Table 12. Enterprise’s infrastructure ................................................................................................................................... 43 Table 13. The list of real estate on the balance as of 30.06.2010 ........................................................................................... 46 Table 14. Facilities on the balance as of 30.06.2010 by groups ............................................................................................. 51 Table 15. Incomes, taxes and contributions paid by resident enterprises in 2009 (MDL) ...................................................... 53 Table 16. List of enterprises operating on the territory of „CAAN” JSC as of 01.10.2010 ........................................................ 53 Table 17. Total area and area of rented premises ................................................................................................................. 55 Table 18. Share of the equipment rented by the existing enterprises .................................................................................... 56



Table 19. Structure by age ................................................................................................................................................... 58 Table 20. Structure of staff by education.............................................................................................................................. 58 Table 21. Dynamics of the number of employees and payroll (2008 - 9 months 2010) .......................................................... 58 Table 22. Balance sheet of „CAAN”JSC , 2005 – 2009, MDL.................................................................................................... 59 Table 23. Dynamics of the balance sheet .............................................................................................................................. 61 Table 24. Profit and loss account, MDL ................................................................................................................................ 63 Table 25. Analysis of liquidity ratios of the enterprise .......................................................................................................... 64 Table 26. Return ratios ....................................................................................................................................................... 65 Table 27. Ratios of financial stability ................................................................................................................................... 65 Table 28. Turnover ratios ................................................................................................................................................... 66 Table 29. Profitability ratios ................................................................................................................................................ 67 Table 30. Comparison of activity scenarios of the industrial park ......................................................................................... 72 Table 31. The methods to eliminate the risks of scenario 2 .................................................................................................. 74 Table 32. Benefits of scenario 2 according to categories of beneficiaries ............................................................................... 75 Table 33. Total volume of fruit export during 2004-2009 ..................................................................................................... 76 Table 34. Total volume of vegetable export during 2004-2009 ............................................................................................. 77 Table 35. Advantages of packing house. ............................................................................................................................... 79 Table 36. Comparison of options of financing. ................................................................................................................ 81 Table 37. Services of the managing enterprise. .................................................................................................................... 84 Table 38. Legal Action Plan ................................................................................................................................................. 85 Table 39. Schematic presentation of the legal action plan .............................................................................................. 87 Table 40. Action Plan for rehabilitation of enterprise's infrastructure and constructions ...................................................... 89 Table 41. Investment structure ........................................................................................................................................... 90 Table 42. Amount of repair work ......................................................................................................................................... 91 Table 43. Forecast income of the managing enterprise, thousand MDL (including VAT) ........................................................ 92 Table 44. Forecast of financial results for the period 2010-2020, thousand MDL (Annex 10. ) ................................................... 95 Table 45. Cash flow dynamics, thousand MDL ....................................................................................................................... 96 Table 46 Dynamics of balance sheet, thousand MDL, 2009-2020 .......................................................................................... 98 Table 47. Structure of assets for the period 2009-2020 ........................................................................................................ 99 Table 48. Main indicators of profitability ......................................................................................................................... 100 Table 49. Main liquidity indicators .................................................................................................................................... 101 Table 50. Main indicators of financial stability ................................................................................................................... 101 Table 51 Main indicators of turnover speed ....................................................................................................................... 102 Table 52. Determination of investment efficiency (Annex 12. ) .......................................................................................... 103 Table 53. Forecast of business growth after creation of the park ........................................................................................ 105 List of figures Figure 1. The scheme of economic sectors location in the CDR ............................................................................................. 13 Figure 2. The structure of industrial branches in Straseni district, by number of enterprises, 2009 ....................................... 13 Figure 3. Distribution of employees in processing industry, Straseni district, 2009, No. of people ......................................... 15 Figure 4. Straseni: private investments per capita, MDL ....................................................................................................... 22 Figure 5. Straseni district: structure of investments by the type of economic activity, 2008, % .............................................. 22 Figure 6. Location of Straseni district and „CAAN” JSC within the CDR .................................................................................. 23 Figure 7. Map of localities of Straseni district ....................................................................................................................... 24 Figure 8. Structure of working population in the CDR, 2007 ................................................................................................. 26 Figure 9. Active population and unemployment rate in the CDR ........................................................................................... 26 Figure 10. Research area on demographic situation. ............................................................................................................ 27 Figure 11. Evolution of performance and labour remuneration in the industrial sector of the CDR, prices comparable to

2005=100% .............................................................................................................................................................. 29 Figure 12. Structure of Straseni district lands, ha ................................................................................................................. 30 Figure 13. Structure of agricultural crops ............................................................................................................................ 31 Figure 14. Network of routes in the CDR .............................................................................................................................. 32 Figure 15. Water supply networks density by districts, km/100 km2 .................................................................................... 33 Figure 16. The share of gasified localities by districts, % ...................................................................................................... 35 Figure 17. Gasification network, CDR .................................................................................................................................. 35 Figure 18. The scheme of the territory of the enterprise with the main buildings.................................................................. 47 Figure 19. Structure of „CAAN” JSC ...................................................................................................................................... 57 Figure 20. Organizational structure of „CAAN” JSC ............................................................................................................... 57 Figure 21. Evolution of revenues from leasing services ........................................................................................................ 59 Figure 22. Dynamics of the financial results, MDL ................................................................................................................ 62 Figure 23. Dynamics of liquidity ratios of „CAAN” JSC .......................................................................................................... 64 Figure 24. The scheme of location of „CAAN” JSC and the area proposed for the development ............................................... 69 Figure 25. Use of cold storages ............................................................................................................................................ 78 Figure 26. The organizational structure of the managing enterprise ..................................................................................... 83 Figure 27. Dynamics of enterprise's financial results ........................................................................................................... 95 Lists of photos Photo 1. General view over the enterprise territory ............................................................................................................. 42 Photo 2. State of the road from Chisinau - Ungheni highway to the enterprise ...................................................................... 44 Photo 3. Ramp and cranes ................................................................................................................................................... 44 Photo 4. Condition of internal roads .................................................................................................................................... 45



Photo 5. Production block No. 1 (view from the railroad) ..................................................................................................... 47 Photo 6. Block 2 (to the left) and garages (to the right) ........................................................................................................ 48 Photo 7. Block 3 (view from the side of the sanitary block ) ................................................................................................. 49 Photo 8. Administrative block (facade) ................................................................................................................................ 50 Photo 9. Sanitary block (4 floors) and canteen ..................................................................................................................... 50 List of Annexes Annex 1. List of long term assets as of October 1, 2010 ...................................................................................................... 109 Annex 2 Leased equipment ............................................................................................................................................... 116 Annex 3. Estimate the expenses for capital infrastructure repairs and renovation .............................................................. 117 Annex 4. Investment structure .......................................................................................................................................... 118 Annex 5. Provision of fruits storage and sorting services in the industrial refrigerator ....................................................... 119 Annex 6. Income from lease of available spaces ................................................................................................................. 119 Annex 7. Forecast operational income (VAT including) ...................................................................................................... 119 Annex 8. Forecast consumption and expenses (VAT including) .......................................................................................... 119 Annex 9. Forecast cash flow .............................................................................................................................................. 119 Annex 10. Forecast financial results .................................................................................................................................. 119 Annex 11. Forecast balance sheet ...................................................................................................................................... 119 Annex 12. Calculation of investment efficiency .................................................................................................................. 119 Annex 13. Financial indicators .......................................................................................................................................... 119 Annex 14. Calculation of wear ........................................................................................................................................... 119



ABBREVIATIONS

NBS National Bureau of Statistics

CAAN Company for Unused Assets Rent

CU Certificate of Urbanism

DESIA Documentation of Environmental and Social Impact Assessment

SME Small and Medium Enterprises

IE Individual Enterprise

SE State Enterprise

FH Farm Household

ME Ministry of Economy

NCM Norms in Construction of Moldova

GDP Gross Domestic Product

EDN Electric Distribution Networks

CDR Central Development Region

NDR Northern Development Region

SDR Southern Development Region

TEER Technical Expert Examination Report

RM Republic of Moldova

JSC Joint Stock Company

LLC Limited Liability Company

VAT Value Added Tax

UNIDO United Nations Industrial Development Organization

ATU Administrative Territorial Unit

USD American Dollar



EXECUTIVE SUMMARY

The present feasibility study has been performed in order to determine viability of the concept of creation of the industrial park on the area of 28 ha on the territory of „CAAN” JSC (Company with private capital, 100%) of Straseni, resident town of Straseni district, situated in the Central Development Region (hereinafter CDR) of the Republic of Moldova, at the distance of 23 km from its capital - Chisinau municipality.

The analysis of the region’s potential determined the presence of resources available for the development of industrial activities within the park from the point of view of sectoral development of economy in the region as well as of the directions of specialization of enterprises currently existing on the territory of „CAAN” JSC.

Thus, the regional potential supporting the industrial park creation is focused on: business sector of the district mostly consisted of SMEs – dynamic part of economy representing an identification area of potential residents of the park correlated with availability of the employable population; high level of soil fertility, trends of annual growth of agroindustrial production and large share of its supplies to foreign markets, continuous trend of growth of retail sale sector in the district and considerable share of food products in this sector; high investment rating of Straseni district at the country level due to its closeness to the capital and growth in the number of foreign enterprises in the district; as well as on priority of the organizational measures in the activity of the local public administration, including in the context of public-private partnership development. At the same time, the district has well developed transport infrastructure, and thus, there are good prospects and higher attractiveness for investors willing to invest in the industrial park, while utilities infrastructure requires additional resources for renovation or construction, which may be implemented by creating working conditions of the industrial park.

The results of the factorial analysis of the current situation of „CAAN” JSC identify opportunities of the industrial park creation on the basis of the resources available at the moment of the study (such as placement close to Chisinau municipality, availability of large production areas, experience in operating according to the principles of an industrial park, easy access ways, free working site, rich experience of the staff in technical, legal and accounting fields), as well as risks which, however, can be eliminated through application of certain strategic development directions.

As a result of the analysis of the situation in the region and enterprise, the directions of the industrial park development have been identified. On the basis of a number of indices which led to the substantiation of the optimal scenario of activity, the following points have been identified: creation of the industrial park with the existing activities, new activities on the part of resident enterprises and own production activity related to construction and rent of freezing facilities by administrating enterprise; choice of the variant of financing from own sources of the owner and from borrowed funds (in this case the borrowed capital will make up about 37% of the amount of investment); providing „CAAN” JSC with the status of administrating enterprise directed at managing the activity of the industrial park and its production activity; identification of the residents who can be local enterprises as well as foreign economic entities included in several categories (the enterprises which will use refrigerated spaces and services of the packing house, current enterprises with a division of enterprises specialized in freezing field and other enterprises which, if necessary, can be transferred to other production sites, new enterprises which are engaged in main production activities as well as with other areas of activity, and new enterprises, activity of which will be determined by value chain).

The investments in creation of technical and production infrastructure for establishment of the industrial park are estimated at 27 594 276 Euro which are to be invested in 2 stages during 24 months (2011-2012) and which will be repaid within 9.9 years. At the same time, the net profit obtained by the managing enterprise is estimated in a positive dynamics reaching the amount of 17,7 mln. MDL in 2011 and over 79 mln. MDL in 2020, reaching gross margin of 74% in 2020.

Creation of the industrial park by the determined model will have a positive social-economic impact

upon the region by means of: efficient use of its resource potential by obtaining the associated benefits

(over 800 new jobs in the district, growth of tax collection to the state budget at over 22 mln. MDL in

2011, growth of medical and social insurance payments at over 4 mln. MDL in 2015, contribution to



the growth of revenues from sales in the region in the amount of over 169 mln. MDL in 2011, growth

of exports of local enterprises and investment attractiveness of the region, growth of direct

investments in the region at about 48 mln. Euro etc.), it will also contribute to economic development

of the country. Development of modern utilities infrastructure within the industrial park project will

reduce environmental pollution.

Finally, it is mentioned that the project of industrial park creation on the territory of „CAAN” JSC of

Straseni will be EFFICIENT provided that the following conditions are observed: optimal scenario,

proposed action plan and estimated amount of the investment.



1. INTRODUCTION

1.1. Description of the project idea and the concept of industrial park

According to the Law No.182 of 15.07.2010 on industrial parks, industrial park is a delimited area

having technical and production infrastructure where economic activities are carried out,

predominantly of industrial production, service rendering, implementation of scientific researches

and/or technological development within a specific facilities framework with a view to maximizing the

human and material potential of a region.

The importance of the creation of industrial parks in the Republic of Moldova comes from the need of industrial development of economy able to lead to the optimization of the production costs, obtaining of qualitative and competitive products on the sales market, etc., and as an associated effect, investment processes acceleration in the country is required. Thus, industrial park is an efficient instrument of the economic growth at the national and regional levels due to its impact upon the development of production intended for export and development of home consumption in the country.

Straseni is one of the most developed localities of the CDR, being a resident-town of Straseni district, the economic attractiveness of which is also conditioned by its closeness to Chisinau municipality – the capital of the Republic of Moldova. In this context, the concept of industrial park creation on the territory of „CAAN” JSC of Straseni is focused on socio-economic development of the region by means of: attraction of local and foreign investments; implementation of modern and innovative technologies; development of small and medium enterprise sector; application of certain advanced management practices; more efficient use of public-private property and job creation.

The above mentioned premises as well as availability of the associated site with the area of 14.8704 ha, situated next to rail-road and national highway Chisinau – Soroca, existing infrastructure conditions and economic potential of the region have determined the emergence of the idea and stimulated creation of the industrial park on the territory of „CAAN” JSC according to the results of the feasibility study and on the basis of Law No. 182 of 15.07.2010 on industrial parks.

Creation of the industrial park on the mentioned territory has several major characteristics:

Creation of the park on the territory, the area of which allows carrying out various industrial activities;

Existing infrastructure and assets of production and industrial storage purpose facilitate the carrying out of activities within the industrial park;

Existence of current enterprises on the given territory, majority of which were created over 5 years ago and which carry out their activity according to the principles of industrial park;

Experience of the staff of future managing enterprise as regards managing the activity of renting the site, rendering communal services and cooperation with future resident enterprises;

High qualification of the staff of the managing enterprise allows rendering technical consulting and high quality legal-accounting services.

The developed feasibility study provides for the opportunities to create the industrial park and optimal scenario of its development based on recommendations of economic, technical and legal organization of activity of the industrial park and the expected effects upon the region.

1.2. Goal and objectives of the study

The main goal of the feasibility study on creation of the industrial park on the territory of „CAAN”JSC consists in substantiation of technical-economic and legal viability of the present project.

Objectives of the feasibility study refer to:

establishment of the concept of industrial park and indication of the types of the planned activity;



assessment of the social, economic and environmental impact of the industrial park on the region development;

description of economic activities of the region and possibility to involve the residents in the park as well as human potential of the region necessary for the park activity;

diagnosis of the regional infrastructure necessary for the park activity as well as the condition of technical and production infrastructure which is to be connected to the industrial park;

delimitation of the site and industrial park configuration; determination of the action plan for industrial park creation; estimation of the investment necessary for creation of the park and funding sources; as well as

financial forecasting for activity of the managing enterprises.

Objectives of the industrial park creation refer to:

attraction of local and foreign investments (in vegetables and fruits storing and processing and in related infrastructure; in creation of the park facilities, including provision of modern and equipped areas, etc.);

creation of competitive industrial sectors on the basis of modern and innovative technologies; carrying out of economic activities according to the opportunities of development specific to

the corresponding zone, including more efficient use of public property; development of small and medium enterprises;

creation of jobs within the industrial park and ensuring of equal access of all citizens to activity of the park;

development of human resources by improving the quality of professional training within the park.

1.3. Brief presentation of an economic entity

Joint Stock Company “Company for Unused Assets Rent” (hereinafter „CAAN” JSC) is located in the industrial zone of Straseni at the distance of about 23 km from Chisinau.

Legal address: 1 V. Crasescu St., Straseni, Republic of Moldova. The headquarters of the executive authority is situated at the same address.

„CAAN” JSC, previously ”Masfrigcomplect” (MFC) is founded according to the Law on privatization (No. 627-XII of 04.07.1991), Law on entrepreneurship and enterprises (No. 845-XII of 03.01.1992) and other normative acts of the Republic of Moldova according to the Declaration of Incorporation of September 28, 1995.

The company was registered on December 27, 1995 in the State Register of enterprises and organizations under No. 151052150. The company was given the unique identification code (IDNO) 1005600014663.

In 1996 the company was restructured as a result of the approval by the State Council of Creditors of the Restructuring Plan. Implementation of the Restructuring Plan conditioned the transition of the production nomenclature to LTD type companies founded by the company’s shareholders (former employees of the plant).

The company was established for the purpose of increasing the economic value of the existing assets and revenue obtaining.

According to the company’s Articles of Association it will carry out the following activities:

Lease of production, auxiliary premises, machinery, available facilities and equipment;

Sale of unused assets;

Rendering of business consulting services.



The company is situated on the territory with the area of 14,8704 ha. Historically, it was one of the 4 enterprises of national importance, destined for production of freezing equipment for the whole Soviet Union.

Executive management is performed by Managing Board headed by the General Director (Manager). 33 persons work in the company. The structure of the staff is appropriate – there are consultants in such fields as: constructions, equipment, water-sewage system, etc.

At present, “CAAN” is a joint stock company which, if fact, due to the launch of the restructuring project in the 90-s of the past century, operates according to the principle of an industrial park. However, since the analyzed period there was no Law on industrial parks, the company was founded on the basis of the Law on Rent (No. 861-XII of 14.01.1992) as a company for renting unused assets.

1.4. Presentation of elaborating company

The feasibility study has been developed by ProConsulting LLC company which has operated on the

consulting market of the Republic of Moldova since 2003. The company products portfolio refers to:

Consulting in financial management.

Consulting in strategic management.

Consulting in investments and fund-rising.

Business planning.

Trainings and workshops. Insurance and real estate assessment.

Contact information. MD -2004, 23/9 Mitropolit Petru Movila St., Chisinau, Republic of Moldova.

Tel./fax: +(373 22) 21-00-89. [email protected]

Web: www.proconsulting.md

Team of consultants involved in the development of the present study:

- Palade Anatol - Project Manager.

- Radov Mariana – Senior Consultant, Strategic Management and Investment Projects.

- Popelnitchi Svetlana – Consultant, Marketing and Operational Analysis.

- Lungu Nicolae – Senior Consultant, Financial Management.

- Vascan Grigore - Consultant in technical issues and restructuring.

- Utica Oleg - Consultant in legal issues.

1.5. Methodology

The feasibility study for the creation of the industrial park was developed taking into account the practices of neighboring countries, in particular Romania, Russia, Hungary, Czech Republic. At the same time, the feasibility study was developed according to the UNIDO Methodology, subsequently adjusted to the specific nature of the given project. Within the development of the present feasibility study, a great number of instruments and techniques, depending on the stage of the project sustainability, were used.

Data collection. For this purpose, the team of consultants developed the diagnostic analysis of

the region and „CAAN” JSC using the following methods:

mailto:[email protected]

http://www.proconsulting.md/



Questionnaire method;

Interview method;

Observation;

Analysis of internal and external reports;

Study of the statistical sources;

Empirical methods;

Science-based methods.

Project development. Fundamental methods are numerous, among which the following ones

were the most frequently used:

Methods of forecasting: extrapolation of trends with the help of certain statistical and analytical methods;

Methods of market research;

Methods of strategic and operational diagnosis;

Methods of financial modeling. Methods of strategic modeling;

Methods of scenario building.

2. ANALYSIS OF THE REGION

Since „CAAN” JSC, the enterprise on the basis of which it is proposed to develop industrial park, is situated in the small town of Straseni, the region’s potential was analyzed taking into account all components of socio-economic development.

2.1. ANALYSIS OF BUSINESS ENVIRONMENT

2.1.1. Sectorial analysis

Main indices characterising the socio-economic environment of the region from the point of view of business environment include:

Table 1. Main socio-economic indices, Straseni

The table reflects: the trend of growth of industrial production in 2006 – 2007 which because of the crisis decreased to the level of 2007 (72,7 % in 2009 as compared to 90,1% in 2007); a dramatic situation regarding capital investments in fixed capital, increase rate of which in 2009 made up practically 1/3 of the level of 2006 (37,7 % in 2009); a relatively stable situation in retail trade and rendered services; trend of annual decrease in own revenues in the district’s budget (from 35% in 2006 to 20% in 2009); irregular fluctuations in real salary (decrease in 2007 as compared to 2006,

Population (thousand people) Industrial production, % as compared to the previous year Investment in fixed capital, % as compared to the previous year Retail trade, % as compared to the previous year Services rendered to population, % as compared to the previous year Own revenues in the district budget, % of the total amount of revenues Real salary, % as compared to the previous year Mortality rate, per 1000 residents Crime rate, cases per 10000 residents

Source: „Statistical Yearbooks of the Republic of Moldova” and „Main socio-economic indices by development regions, districts and municipalities”, different years, National Bureau of Statistics and the Ministry of Finance



increase next year and decrease again because of the crisis in 2009). Distribution of economic sectors in Straseni district is reflected in the picture below.

Figure 1. The scheme of economic sectors location in the CDR

Source: National Strategy of Central Development, 2010

Industry. The number of companies involved in the industry of the district is distributed in the following way (Figure 2): most of them are involved in production of food and beverages (26 in number), second position – timber processing (15 companies), followed by production of other products from non-metalliferous minerals (15 companies) and furniture production (10 companies).

Figure 2. The structure of industrial branches in Straseni district, by number of enterprises, 2009

Source: NBS

Meat processing

Oil production

Electric and thermal power plants

Tobacco processing Petrol processing

Waste treatment

Oil extraction

Sugar production

Oil storage

Chemical industry

Machinery production

Manufacture of asphalt

Production of dairy products

Production of canned food, juices and non-alcoholic

beverages

wine, champagne, alcoholic beverages

Production of garments

Cereals processing and storage

Manufacture of construction materials

Manufacture of ceramic products

Manufacture of carpets

Manufacture of leather

Electrical engineering

Production of poultry meat and eggs

Woodworking and furniture manufacture

Free economic zone – existing situation

Free economic zone – forecasting

Industrial parks – forecasting

Glass production

Footwear production

Printing industry

pharmaceutical products

Storage of radioactive wastes

Aeromarine services

Shipbuilding

Metallurgical industry

10 – Furniture

production

2 – Machinery and

electrical equipment

production

9 – Machinery and

equipment manufacture

15 – Production of other

products from non-

metalliferous minerals

26 - Food and beverage

industry

1 – Tobacco product

manufacture

4 - Textile product

manufacture

9 - Production of

garments; furs

preparation and dyeing

15 - Woodworking and

wooden item production

4 - Publishing, printing

and reproduction of

informative materials 3 - Chemical industry

7 - Rubber and plastic

production

others - 15



Thus, the majority is represented by enterprises from the agricultural product processing industry. In 2008 there were 18 wineries, this being the largest number at district level in the country. Thus, industrial production is concentrated in winery sector (wines, divin), and bakery products. There are also 6 enterprises of light industry (including textile industry) in the district. Availability of natural resources in the district also allowed for the development of extraction industry. Gravel, pebble, boulders and flint and stones are extracted for carving and construction, however, they are not used for production of construction materials at the local level.

Revenues from sales produced by the district’s industry are distributed in the following way (Table 2. Situation in industrial sector of Straseni district, 2009): revenue from sales in the whole industrial sector of Straseni district makes up about 300 mln. MDL, out of which over 80% come from processing industry (or about 248 mln. MDL). The largest share of processing industry belongs to food and beverage industry – 61% of processing industry (or about 151 mln. MDL), followed by rubber and plastic production - 12% of processing industry (or about 29 mln. MDL).

Table 2. Situation in industrial sector of Straseni district, 2009

Economic sector Number of companies

Revenues from sales, 2009, thousand MDL

Number of employees

Industry, total 124 294 748 1 792

Extractive industry 2 45 484 211

Processing industry, out of which 119 248 758 1 575

Food industry and beverages 26 151 768 855

Tobacco product manufacturing 1 1 711 8

Textile product manufacturing 4 936 9

Production of garments; furs preparation and dyeing 9 12 744 220

Wood processing and wooden item production 15 5 340 61

Publishing, printing and reproduction of informative materials

4 707 13

Chemical industry 3 3 196 18

Rubber and plastic production 7 29 409 70

Production of other products from non-metalliferous minerals

15 16 199 84

Machinery and equipment manufacturing 9 9 055 63

Production of machinery and electrical equipment 1 100 4

Furniture production 10 11 183 70

Electrical and thermal energy, gas and water 3 505 6

Source: NBS

At the same time, per capital industrial production value is lower than average in the Central Development Region – 2 506 as compared to 3 034 MDL, while in enterprise it makes up 2.93 mln. MDL. Industrial production value for 2009 made up per total in the district 188 mln. MDL (about 48% decrease as compared to 2008).

The number of employees in industry is presented for 2009 in the following way: total in industrial sector there are 1 792 employees, out of which 1 575 (or 88%) are engaged in processing industry



(their distribution within the given branch is presented in Figure 3. Distribution of employees in processing industry, Straseni district, 2009, No. of people), 211 in extractive industry and 6 in energy sector.

Figure 3. Distribution of employees in processing industry, Straseni district, 2009, No. of people

Source: NBS

With reference to Straseni. The first position is held by processing industry, especially viniculture. Straseni enjoys a rich variety of the best European vine sorts: Aligote, Sauvignon, Riesling, Cabernet, Muscat, Ottonet, Pinot, Merlot, Riesling de Italia, Isabella, from which high-quality champagne, dry, ordinary or sweet wine are produced. The industrial part of the town is situated in the North-West region of the town and is separated from the dwelling area by railroad. Winery and brick shop of the Plant of construction materials are situated in the North of the town. The town has and economically uses railroad.

Agriculture. Because of not quite favourable conditions, agricultural harvest, though diverse one, is not very rich as compared to other districts of the CDR. Grape cultivation is very important for the district. At the same time, zootechnical sector is also developed, especially cattle and poultry breeding for slaughter, the field where Straseni holds the third position in the republic. Also pork breeding is quite developed in the district. The number of agricultural enterprises – 11 041 – 12.1 per 100 residents is lower than average in the region. Majority are small enterprises, only 0,6% being agricultural enterprises with the area of over 10 ha. The number of technical stations for maintaining agricultural machinery is relatively small and does not satisfy the needs of the district (only 7 technical stations). The number of tractors in the district is 8,7 units/1000 ha as compared to regional average value of 11,2 units and national average value of 12,9 units.

In the agricultural sector of the district main cultivated vegetal products are: cereal and legume crops, sun-flower, potato, squash, fruit and grapes. In the last 4 years the agrarian sector of the district was developing unevenly because of unfavourable climate conditions, excessive parcellation of lands, use of poor quality seeds and lack of financial sources, the fact reflected in Table 3. Agriculture in Straseni district.

Table 3. Agriculture in Straseni district

Nr. Indices Unit. 01.01.06 01.01.07 01.01.08 01.01.09 01.01.10

1. Global volume of agricultural products at current prices.

thousand MDL 495 000 327 000 300 000 573 000 593 000

Including: vegetal products thousand MDL 378 000 222 000 193 000 488 000 501 000

Food production thousand 117 000 105 000 107 000 85 000 92 000

70 – Furniture

production

7 – Machinery and


63 – Machinery and


84– Production of other

products from non-

metalliferous minerals

70 - Rubber and plastic

production

18 - Chemical

industry

13 - Publishing,

printing and

reproduction of

informative

materials

61 - Woodworking and

wooden item production

9 - Textile product

manufacture

8 – Tobacco product

manufacture

855 - Food and beverage

industry

others - 100

220 - Production of

garments; furs preparation

and dyeing



MDL

2. Global volume of agricultural products at prices compared to 2005

thousand MDL 331 000 221 000 195 000 446 800 495 000

Including: vegetal products thousand MDL 253 000 148 000 121 000 376 000 418 000

Food products thousand MDL 78 000 73 000 74 000 70 800 77 000

3. Agricultural products by types:

Cereal and legume crops - beans ton 54 484 41 419 12 560 46 945 49 560

Sun-flower ton 2 014 2 410 1 700 1 920 1 085

Soya ton 80 36 - - -

Potato Ton 2 350 3 030 2 930 4 075 1 170

Vegetables Ton 2 565 1 661 1 056 3 255 2 035

Fruit and berries Ton 13 344 9 752 8 552 7 590 12 980

Grapes Ton 36 010 19 590 27 300 39 770 44 400

Cattle and poultry in live weight Ton 3 950 3 341 6 110 5 560 5 600

Milk ton 10 282 9 115 5 016 6 275 6 450

Eggs thousand pcs 2 927 3 150 3 260 5 010 5 100

Wool ton 20,5 20,5 20,5 20,5 30

4. Areas sown with agricultural cultures:

Annual cultures ha 17 596 15 146 13 098 11 469 16 289

Vineyards ha 7 685 7 701 7 709 7 714 8 259

Orchards ha 3 261 3 261 3 332 3 343 3 361

5. Planted vines ha 367 156 103 79 150

6. Planted orchards ha 131 86 73 54 85

7. Flock of cattle and poultry

Bovines heads 5 072 5 114 3 883 3 208 3 300

Porcine heads 12 802 15 951 12 503 8 981 9 000

Ovine and caprine heads 9 190 8 977 7 896 7 161 7 500

Horses heads 1 370 1 322 1 336 1 152 1 165

Poultry heads 434 293 476 591 662 747 563 156 526 775

8. Medium production of milk from a cow Kg 2 115 2 560 2 430 2 550 2 600

9. Medium production of eggs from an egg-laying hen

units 250 250 220 245 250

10. Daily rate of bovine fattening g 240 240 250 275 310

11. Daily rate of pork fattening g 275 275 280 320 320

Source: Information on the socio-economic situation in Straseni district (MET)

The situation in the table is due to:

Satisfactory state of cereals;

Revitalization of viticulture branch beginning with 2004, though reduction of its volume in 2009 because of low prices for grapes and absence of wine market, thus, in 2009 areas with non-productive vines grew by 9% as compared to 2008;

Difficult state of pomiculture: non-conformity of agrotechnical requirements to the phytosanitary state (that is in regard of plants protection). Nevertheless, in the last 5 years new orchards were planted on the area of 418 ha;

Higher harvests in vegetables in 2008 vs 2007 resulting from expansion of areas of protected lands, but, also decrease in vegetable areas in 2009 because of surplus of imported vegetables in the domestic market;

Decrease in milk production connected with decrease in cow flock, though increase in cattle and poultry production as well as egg production in 2009 as compared to 2008;



Concentration of animal production in individual sector – population and farm households – and emerging of possibilities of transition to artificial insemination of cattle with the spermatic material from reproducers with high genetic potential (at present there are 28 such points in the district);

Low level of provision with agricultural equipment and outdating of the machine and tractor park, inability of agricultural land owners or holders to purchase new equipment.

Thus, Straseni district has a quite high agricultural potential, however, capacity of processing agricultural products is poor because of outdated technologies and fragmentation of agricultural areas into small parcels. Moreover, poor economic potential or agricultural enterprises and farm households, inefficient management of agricultural production have determined under-developed state of agricultural products processing sector.

With reference to Straseni. The level of mechanization of agricultural farms covers 50% of the needs in agricultural machines and tractors. At present economic entities of the town hold: tractors –15 units, out of which only 3 were bought in the last 5 years; machines – 17 units, all of which are older than 5 years; combines – 4 units, all are older than 5 years. In general, agricultural equipment is physically and morally outdated, insufficient in number for practicing efficient agriculture.

At present, for processing agricultural products the locality has: 2 corn and wheat mills; oil mill; bakery; fruit dryer; 2 refrigerators for storage of agricultural products with the capacity of 500 tonnes; plants for grape processing.

In general, agricultural products are sold on the local market of the Republic of Moldova in proportion of 60%, and namely: industrial crops – Straseni, Chisinau, cereal crops – Straseni, Chisinau, Balti, fruit and vegetables - Straseni, Balti, Chisinau; while 40% of agricultural products are sold on foreign markets.

Most areas of vineards and orchards were planted more than 20 years ago. These sorts today do not meet market requirements and need to be renewed. Thus, most fruits are sold to processing enterprises.

Main economic entities operating in agriculture are: Growing agricultural products – „Secrieru” LLC, „Bacarji” FH; Processing of agricultural products– „Vin Select” LLC, „Plai-Fruct” JSC; Services rendering – „Ceaglei” IE; trade – URECOOP, ASECOP, „Premium Consum” LLC.

Other economic entities carry out an activity on family principle, main occupation being cultivation of personal parcels in small proportions. These farm households have no potential for financing since are poorly developed and have no sufficient mortgage.

Services. Service sector in Straseni district is mostly represented by retail trade, the volume of which was continuously growing until the crisis of 2009, after which it decreased by 4,1%. In the structure of paid services rendered to population the largest share belongs to public, postal services and communications and services of public catering. In the district there are both companies of transportation of goods and passengers. Passenger transportation is mostly performed by individual enterprises and limited liability companies. During 2008-2009 the volume of services provided for population by the economic entities from private and mixed sector with participation of foreign capital increased, while the volume of paid services by institutions of public form of property decreased.

Retail trade. In 2009, consumer goods were sold in value of 251223,2 thousand MDL, registering a decrease by 4,1% as compared to 2008. In the structure of retail sale of goods the considerable share belongs to non-food goods making up 52,67%.

Table 4. Service sector of Straseni district, 2009

Source: NBS

Indices, 2009 thousand MDL

Sale of consumer goods, total 251 223,2

Services rendered to population 137 037

Contract works 39 700



Rendered services. During 2009, the population was provided with paid services in the amount of 137 037 thousand MDL, resulting, in comparable price conditions, in a 4,8% decrease as compared to 2008. At the same time, the volume of paid services rendered to population was due to the activity carried out by economic entities from the sectors: mixed (public+private) – 3,57% of all the rendered services, private – 45,76%, mixed (with foreign participation) – 25,49%. In public sector – 25,17%.

Contract works. In 2009 contracting enterprises and organisations performed construction-erection works in the amount of 39,7 mln. MDL (at current prices) representing a 52% decrease as compared to 2008. In the structure of the performed works, works at new constructions with 51,5% in total volume predominate. Running repairs made up 48,5% of the total volume of performed contract works. In the structure of contract works in 2009 by the form of organization, the main volume of works was carried out by the economic entities with private form of property.

Transportation of goods and passengers. In 2009 goods in the volume of 37.1 thousand tonnes was transported (representing a 23% decrease as compared to 2008). Goods traffic in 2009 made up 45.9 mln. tonnes/km or 0.5% increase as compared to 2008. Passenger transportation with mini-buses made up 1 539. 9 thousand passengers in 2009 (or about 60% more as compared to 2008) and passenger traffic of 31.6 mln. passenger/-km (or by 17% more as compared to 2008).

Potential resources for the industrial park

In the context of industrial park creation, we see the opportunity of its development in various directions, including industry of agricultural products processing, of manufacturing of agricultural equipment and facilities and of technical servicing for agro-industrial complex. This statement is based on:

Complex industrial infrastructure available in the district which benefits from the activities in the areas with the share of national importance such as: viticulture industry (with a very large share in the country production), canning industry, bakery, meat production;

Growth of agricultural production diversity, combining grape cultivation, zootechnical sector (cattle, poultry, pork breeding) and vegetal products cultivation;

High level of soil fertility;

Need for mechanization and agricultural sector servicing characterized by insufficiency of technological maintenance stations and existing outdating agricultural facilities;

Trend of annual increase in agro-industrial production and large share of its supplies to the foreign markets.

Recovery of the mentioned branches is also justified by the significant development and continuous trend of growth in the retail trade sector of the district and significant share of food products in this sector.

Expected benefits for the district

Implementation of this branches within the industrial park will condition:

Growth of the number of enterprises in the district and accordingly new jobs creation,

Modernization and support of the agricultural sector of the region by implementing the mentioned industrial branches,

Increase in industrial production and, correspondingly, agricultural production in the localities of the district,

Increase in exports and investment attractiveness due to increase in volumes of sales in branches,

Extension of local trade in agricultural and industrial products,

Depolarization of economic activities in the Republic which are mostly concentrated in Chisinau municipality

Growth of employees’ incomes and increase in living standards of population from the region.



2.1.2. Analysis of regional activities of enterprises

Development of entrepreneurial activities is one of the main objectives of regional development in the CDR. During 2004-2008 the number of enterprises increased by 43%. The growth in the number of enterprises is registered with all types of enterprises, with the exception of medium enterprises the number of which decreased by 19%. This phenomenon can be explained by the fact that the number of enterprises increased on account of micro-enterprises. At the same time, the number of jobs reduced by 11%, mostly on account of medium and large enterprises. Although the number of enterprises is constantly growing, the level of enterprises localization is rather low and in 2008 it made up 54 enterprises per 10 000 residents, which is twice as little as in average in the country.

Also, spatial distribution of enterprises’ sales is uneven, varying from district to district up to ten-fold.

Straseni is one of the most active zones from economic point of view where over 65 SME operate per 10 000 residents. SME sector makes up 98% of all the enterprises and employs 62% paid workers. More than 73% of all the enterprises are micro-enterprises. They employ 14% of all paid workers and perform 7% of the total amount of business activity.

Table 5. Indices of regional activities of enterprises

Source: National Strategy for Central Development, 2010

Potential of resources for industrial park

The region inclusion in the zones with the highest economic activity in the country determines continuous growth in the number of enterprises in the region, which reflects the potential of their involvement in the industrial park, especially among SMEs which make up the most significant part of the total enterprises in the region.


Benefits will be reflected in the further increase in the number of jobs, continuous growth in the number of enterprises per total, increase in the number of enterprises in industry and, as a consequence, improvement of the situation in agriculture, decrease in the number of agricultural enterprises in the region operating at loss. At the same time, jobs reduction at large enterprises in the region can be compensated by involving the corresponding staff in the territory of the industrial park which will be created.

2.1.3. Analysis of the district budget

With a view to implementing provisions of the Action Program regarding socio-economic development of the district, a number of actions were undertaken for budget-financial situation stabilization. The district budget for 2008 established revenues in the amount of 124 754 thousand MDL and expenses in the amount of 125 254 thousand MDL. During the budget year, amendments were made both to the part of revenues and the part of expenses. As a result, final provisions on revenues from all the components made 138 418 thousand MDL. According to the situation as of January 1, 2009 the budget was executed in the volume of 139 196 thousand MDL, which made up 100.5% of the planned for the

Indices CDR Straseni district

Number of SME per 10 000 residents, 2008 52.84 65.46

Micro-enterprises (0-9 employees), % 74.29 73.29

Small enterprises (10-49 employees), % 21.05 21.87

Medium enterprises (50-249 employees), % 4.65 4.84

Dynamics of the number of employees in industry in 2007 (2004=100) (%) 96.6 94.1

Dynamics in number of industrial enterprises in 2007 (2004=100) (%) 100 100

Dynamics in number of service enterprises in 2007 (2004=100) (%) 136.9 149.8

Dynamics in number of agricultural enterprises in 2007 (2004=100) (%) 103.6 136.1

Share of the agricultural enterprises operating at loss in 2007, (%) 45.57 36.7



reported period. As compared to the period of 2007, revenues by 1 809 thousand MDL less were accumulated. The sum of accounts payable of the institutions from the budget sector as of 01.01.2009 made up 8 153 thousand MDL while the sum of accounts receivable made up 703 thousand MDL. As compared to the indices of 2007 the debts increased by 2 026 thousand MDL and 408 thousand MDL respectively. No salaries payable were registered in the budget sphere for 2007-2008.

Table 6. Execution of Straseni budget, income taxes, taxes and basic payments, 2007-2008

Categories 2008 % 2008/2007

Total general revenues including: 139 196 117

Transfers from the state budget 104 003 127

Total own revenues, out of them: 35 194 95

Income tax on salary and other incomes 15 660 120

Income tax on entrepreneurial activity 6 222 58

Land tax 2 669 97

Real estate tax 941 131

Road tax 707 139

Natural resources consumption tax 870 68

License tax 309 56

Land lease payments 565 105

Business license fee 296 97

Land improvement tax 438 107

Tax for placement of outlets , service tax 572 129

Collection of special fees 4 632 123

Special funds revenues 36 199

Other collections, taxes and payments 1 275 69

Source: Information on socio-economic situation in Straseni district (MET)

Table 7. Execution of district budget in the part of expenses for 2008 (thousand MDL)

Categories Executed % executed / plan

State services of general purpose 13 025 95.0

National defense 502 97.2

Maintaining public order and national security 4 139 99.4

Education 86 134 96.3

Culture, arts, sports and events for the youth 8 276 92.2

Healthcare protection 3 037 98.5

Insurance and social assistance 10 662 96.5

Agriculture, forestry, fishery and water industry 2 183 95.1

Industry and construction - -

Transports, roads, communications and computer science 1 830 74.1

Public utilities and housing facilities maintenance 8 118 91.0

Complex for fuel and energy 339 96.1

Other services related to economic activity - -

Expenses outside other main groups 2 350 67.5

Net credits -64 -

Total expenses 140 531 94.6


Analysis of the local public administration capacities for development demonstrated the existence of minimum financial possibilities. During 2004-2008 average volume of public expenditures per capita in CDR only made up about 1 160 MDL or a little more than 100 USD/75 Euro. Straseni district has the approximate level of this average value.

http://www.multitran.ru/c/m.exe?t=4174007_1_2



Potential of the resources for the industrial park creation

In the context of the public budget, we can note the positive aspect of the financial resources allocation for education which contributes to training and professional development of young staff who may be employed by the potential enterprises on the territory of the industrial park.


We believe that the industrial park creation will allow for justification and increase in financial resources, presently insufficient or even unavailable in the local budget, which will support activities within the park, including by updating the existing transport and road infrastructure, which will provide benefits at the district level by means of improvement of the living conditions of the population.

2.1.4. Participation in district and national projects

In order to have a deep understanding of the problems of district interest in economic and social areas and to solve them, the district participated in development of territorial, national plans:

Local programs of socio-economic development for 2005-2015 in the context of the National program „Moldovan Village”;

Program of socio-economic development of Straseni district for 2008-2011;

Plan of Straseni district land improvement;

Territorial action plan for labour force employment for 2009

District program on eradication of disorders because of iodine deficit;

Territorial immunization program,

Territorial program for prevention and combating virus hepatitis B,C and D, control and prevention of HIV/AIDS/STD or TB, etc.

Special attention is paid to strengthening cooperation and efficient collaboration relations of 3 structures:

At local level – mayor’s offices, local councils;

At district level – district council, district’s chairman, decentralized and deconcentrated district services;

At central level – Parliament, Government, ministries, departments, agencies.


Organizational activity is the priority direction in the activity of the local public administration of the second level. Workshops, meetings, conferences, round-tables with participation of mayors, representatives of decentralized and deconcentrated services on the territory, public officials from mayor’s office are organized regularly. Thus, in 2009, for example, there were: 1 meeting and 7 conferences with participation of mayors of administrative territorial units, secretaries of local councils, public officials with various topics: “Notarial actions”, “Powers of local public administration in 2009 Parliamentary elections”, ”Development of Public-Private partnership”. It is clear that the above listed activities represent the premises for the industrial park creation in the region, especially due to offered assistance in development of public-private partnership within the park.


Positive impact due to local authorities’ involvement in the development of partnerships and projects in the region will be used and enhanced through the park creation and will result, first of all, in the development of entrepreneurial spirit of the region’s population, as well as in the improvement of investment attractiveness of the region and growth of opportunities of foreign investment attraction in the region.

2.2. ANALYSIS OF THE INVESTMENT CLIMATE

Entrepreneurial activity is quite intensive in Straseni district. There are 258 registered enterprises or 4.25 enterprises per 1000 residents, which is above the average for the region. The advantages of the district have allowed for business development so that tax base is above the average for the region.



Own per capita incomes of the district make up 385 MDL, a little higher than the regional average. Correspondingly, the dependence on the transfers from the state budget are lower than the regional average, although still high – 74.7%.

Investments in 2008 were approximately equally distributed among the following sectors: agriculture, processing industry, construction, electric energy, water and gas, transports and communications (Figure 4. Straseni: private investments per capita, ).

Still according to current investment performance Straseni district takes a very favourable place

ranking in the first half of district rating, on the 10th position, in 2008 private investments per capita

being much more larger as compared to the average in the region (Figure 4). What makes Straseni

district to take a lower position in the total rating is the Dynamics of the Investment Performance

where the district takes the 34th place out of 38 positions. Thus, despite the high level of investments

in 2008, historically they did not grow at a rate sufficiently high to compete with other districts of the

country.

Figure 4. Straseni: private investments per capita, MDL

Figure 5. Straseni district: structure of investments by the type of economic activity, 2008, %

Source: calculations of authors based on NSB data

There are 31 enterprises with foreign capital in the district, a very high index for the republic, these being medium enterprises with medium capital about 1 843 thousand MDL per company. Thus, in 2008 the balance of foreign investments made up 57 mln. MDL or 625 MDL per capita, which equals to 33% of the region average.

In 2009 the volume of investments in fixed capital made up 91 mln. MDL at current prices, or by 65% lower as compared to the previous year. The analysis of the structure of investments in fixed capital by the form of property shows that intensification of investment activity was basically determined by public property enterprises which made up about 58.5% of the total volume of investments in fixed

Nation

al

Central

Region

Healthcare &

social assistance

Education

Public administ.

Real estate

transactions

Other

activities Agriculture

Processing industry

Electrical power, gas and water

construction Trade Transp. Communic.

Extracting industry



capital. The share of private sector enterprises in the total volume of investments in fixed capital made up 24.1%. In 2009 main sources of funding of the investment activity were: own resources of economic entities and population – 31.7%; state budget – 28.1%; foreign investments – 23.1%.


Geographical closeness to Chisinau municipality provides an effect of local investment elimination. A number of evident competitive advantages of the capital as compared to Straseni district makes most companies give up investing in this district in favour of Chisinau. Nevertheless, Straseni district still has a high investment rating at the country level, which is obviously a great advantage to create the proposed park. At the same time, regional closeness to the capital may also be considered as an investment advantage, especially for the companies dealing with production, processing of raw materials, storage as well as organized collection of agricultural raw materials. Also, in the context of the industrial park creation, thanks to closeness to the capital, many companies may set their subdivisions or completely delocalize their activity to Straseni. At present, for example, about 40% of all the companies efficiently operating in the district either having headquarters in Chisinau, or founders are from the capital.


In our opinion, the park creation will allow for increase in foreign investments by means of extension of industrial activities in the district, which will obviously improve the investment visibility of the region and will allow for transparency promotion at both district and national level for the investment projects which will be implemented. We also consider development of the framework of partnership between investors and local administration of the district to be an advantage. Moreover, it is essential that the companies which already operate on the territory of „CAAN” JSC have well developed activities, while the enterprise transformation into the industrial park will produce an additional inflow of capital and will offer additional investment opportunities. Along with the industrial park creation, necessary utilities will be created (which presently either are unavailable or their cost exceeds 15% of the sale price). Installation of utilities will cut costs for resident enterprises, resulting in corresponding decrease in costs and increase in opportunities to make investments allowing for new jobs creation.

2.3. Administrative-territorial organization

Joint-Stock Company „CAAN” (Company for unused assets renting) is situated in Straseni, Straseni district (Figure 6. Location of Straseni district and „CAAN” JSC within the CDR). In its turn, Straseni district is a part of Central Development Region.

Figure 6. Location of Straseni district and „CAAN” JSC within the CDR

The immediate location of the analyzed district next to Chisinau municipality (at the distance of 23 km from Chisinau to North-West) should be emphasized (Figure 6. Location of Straseni district and



„CAAN” JSC within the CDR). Besides this neighbourhood, Straseni district has common border with the districts: Calarasi (North-West direction), Nisporeni (West), Hincesti (South-West), Ialoveni (South), Criuleni (East) and Orhei (North-East).

Straseni district has the total area of 729.31 km² (approximately 7% of the CDR area which makes up 10.636 km²). The district consists of 39 localities among which: 2 towns (Straseni (resident town of the district) and Bucovat), 25 communes and 12 villages (Figure 7. Map of localities of Straseni district). Within the analyzed district Straseni has the area of 60.82 km² (8.3% of the district).

Figure 7. Map of localities of Straseni district

Source: www.infostraseni.md


In the course of the analysis we consider location of the new industrial park on the territory of „CAAN” JSC appropriate in the light of the following aspects:

- from the geographical point of view, Straseni district is situated in the centre of the CDR, the resident town being situated right in the centre of the administrative region of the district, ensuring communication lines with all the administrative territories;

- location of the industrial park at the distance of 23 km from Chisinau municipality provides a high attractiveness from the point of view of investors since the market of Chisinau is the most developed trade market of the republic.

Expected benefits for the region

Evidently, placement of the industrial park on the territory of „CAAN” JSC is much more than advantageous, since it has direct access and connections with at least 7 districts, including Chisinau municipality – main economic centre of the country.

2.4. Analysis of socio-economic environment

2.4.1. Analysis of demographic situation

Population of the district makes up 91.5 thousand people (8.5% of the CDR population which makes up 1 065 thousand people). Villages with population of over 5 000 people are: Cojusna, Lozova,

http://www.infostraseni.md/



Vorniceni and Sireti. Within the analyzed district Straseni has a population of 21 867 people (20% of the district).

Straseni district has a population distribution in favor of women (51%) and in favour of rural residents (75.1%), and average population density above the regional average (125.5 residents / km2 as compared to 100.2 in total in the CDR). Natural growth of the population from the district shows insignificant growth in the district of 0.1 per 1 000 residents, while the share of rural population is above the regional average, and namely 75.5% as compared to 60.8% (see Table 8. General demographic data)

Table 8. General demographic data


Population, thousand people, January 1, 2009 1 065 91.5

- Rural population, %

- Urban population, %

60.8

29.1

75.1

24.9

Average population density as of 01.01.2009, residents/km2 100.2 125.5

Percentage of female population as of 01.01.2008, % 51.1 50.9

Percentage of urban population as of 1.01.2008, % 20.1 24.9

Natural population growth per 1000 residents as of 01.01.2008 -0.7 0.1

Source: NBS

With reference to Straseni, the total number of residents makes up 21 867 people (data of 2008, Plan of economic development of Straseni) divided into groups, by gender: female –11 145, (51%); male – 10 722 (49%), and by age: up to 18 years old – 4 274, (19.5%); from 18 to 60 years old – 15 625, (71.5%); over 60 –1 968 (9%). According to the data of the census of 2004, the population of the town made up 18 320 people. Thus, there is a trend of the town population growth in the recent period, mostly caused by the rise in birth rates but also due to the return of some categories of people who worked abroad (especially from the Russian Federation). Straseni, like most localities of the Republic of Moldova, faces the problem of the population migration abroad in search of a more well paid job. Thus, about 2 884 people temporarily left the locality while 43 people left for a period longer than a year or even permanently.

Potential of the resources for the industrial park

From the above mentioned data it is seen that for the industrial park activity it is essential to have the labour force both from Straseni, which presently has active population of over 15 thousand people, and from the district with a little more than 95 thousand people. A positive factor for the activity of the industrial park of „CAAN” JSC is also the fact that the migration process is very slow denoting the possibility that the employees are not subjects to voluntary migration – essential factor for investment projects of any economic entity.


Transformation of „CAAN” JSC into industrial park will have a positive effect on the local population and, by means of further planned investments will result in dispersal of the activities concentrated in Chisinau municipality to rural and urban localities of the region, thus depolarizing economic activity.

2.4.2. Labour force analysis

The share of economically active population in the total CDR makes up about 65% of the total population of the region. Out of these, about 51% are actively involved in labour. 41% of active population are employed in agriculture, which is mostly an agriculture for living (Figure 8. Structure of working population in the CDR, 2007).



Figure 8. Structure of working population in the CDR, 2007


In the whole region, Straseni district demonstrated the level above average of active population (66.3%) and one of the lowest rates of unemployment - 0.58%, second position after Orhei district with 0.38% (Figure 9. Active population and unemployment rate in the CDR). This fact is explained by closeness of Chisinau municipality where many residents of the district are employed.

Figure 9. Active population and unemployment rate in the CDR


With reference to Straseni district, economically active population is 51 326 people, making up 57.77% of the total population. The number of people employed in the economy makes up 49 992, correspondingly 1 334 are not officially employed in the labour market.

Main activity of the town’s population is agriculture, in this sphere being involved about 1 500 people or 63.8% of the total number of employable population; followed by trade where 350 people are employed (14.9%) and processing industry – 200 people (8.5%). The level of unemployment is medium as compared to other localities of the Republic of Moldova. Thus, there are 300 registered unemployed or 12.8% of employable population.

Dividing the population in Straseni (13.865 people with education) by level of education, the following can be stated: higher education – 2 247 people (16.2%); secondary professional education – 94 people (20.8%); incomplete secondary education (9 grades) – 8 735 (63%).

In order to assess the labour force potential for the industrial park creation in Straseni on the basis of „CAAN” JSC, a total research area of 30 km around the locality was determined (see Figure 10. Research area on demographic situation.).

Agriculture

Construction

Transport & communic.

Industry

Commerce

Others

unemployment rate 2007, %

% of active population, 2007



Figure 10. Research area on demographic situation.

Source. www.point.md/map..

Neighbourhood with 11 important localities from Straseni district (Bucovat, Cojusna village, Panasesti village, Capriana village), Ialoveni district (Ialoveni, Malcoci village) and from Chisinau (Chisinau, Ghidighici village, Durleşti, Vatra and Truseni village) municipality was determined. Total availability of population taking into account the trend of employment of the population from these districts is presented in Table 9. Total availability of population in area of 30 km around Straseni, 2007.

Table 9. Total availability of population in area of 30 km around Straseni, 2007.

Locality District Distance

from Straseni, km

Employable population,

people

Current population - total, people

Under employable

age

Above employable

age

Capriana Straseni 15 1 844 2 610 448 318

2 Bucovat Straseni 13.39 1 245 1 771 267 259

3 Cojusna Straseni 11.8 4 511 6 542 1 248 783

4 Panasesti Straseni 9.7 2 321 3 525 784 420

5 Malcoci Ialoveni 13 1 694 2 518 510 314

6 Ialoveni Ialoveni 25 9 806 15 041 3 507 1 728

7 Ghidighici Chisinau municipality

22.5 2 100 4 342 651 1 591

8 Vatra Chisinau municipality

12.9 2 940 3 900 560 400

9 Durlesti Chisinau municipality

22.2 12 308 20 428 4 320 3 800

10 Truseni Chisinau municipality

19.2 5 804 8 290 1 176 1 310

11 Chisinau Chisinau municipality

23 555 461 755 200 104 959 94 780

Total 600 034

Source. NBS and ProConsulting calculations

http://www.point.md/map



The analysis of the data presented in the above table and geographical neighbourhood of 30 km around Straseni locality with the main set points identifies a high potential of the available labour force which can be se used by means of population’s involvement within the created industrial park.

Potential of the resources for the industrial park

From the above mentioned data, it is seen that the population is mostly employed in agriculture, the branch of economy with the lowest salaries but which continues having the essential share in the gross domestic product of the country. At the same time, presence of the agricultural activity in the region will serve as a premise for the development of industries of processing and supporting agricultural sector within the industrial park. Moreover, the data show a level of over 20% of people with higher education, mostly in Straseni. It is a positive factor for the activity of enterprises on the territory of the industrial park, these having sufficient human resources to select candidates for the available positions.

Figure 9. Active population and unemployment rate in the CDR shows that the number of officially registered unemployed people in Straseni district is below local average being one of the lowest in the region. However, it should be taken into account that these are mostly young people who are not engaged in the labour market while great majority of the population from villages are not willing to make the corresponding registration. Nevertheless, it is seen that availability of labour resources is a positive factor for the activity of further development of the industrial park, enterprises operating on its territory having at their disposal a quite diverse market of the labour force.


Once “CAAN” JSC transformation into the industrial park directly implies an inflow of capital, and as a result of which growth of investments is also expected, factors which create new jobs, the direct effect will be focused on increase in the number of well paid jobs and, thus, improvement of living standards of the population.

2.4.3. Analysis of the population well-being and labour performance

Presence of a large number of economic entities in Straseni district determined a level of

monthly salary above the regional average in 2008 – 1 939 MDL (3% above the regional

23,3% below the national average). This also favors the level of consumption above the

average – 2 942 MDL per capita in 2008. In the structure of consumption expenses: food

(48%) and non-food expenses (33%) prevail, expenditures for services making up 13%. We

reduced share of expenses for healthcare (4% of total) and, especially, for education - just 1 MDL

month, 10 times less than in the capital. In total in the Central DR during 2005-2008 labour

performance of the employees essentially decreased alongside with the evolution of the real

2007-2008 performance had a decreasing trend while the salary continued to grow (

Figure 11. Evolution of performance and labour remuneration in the industrial sector of the CDR, prices comparable to 2005=100%). This might be caused by the fact that the companies from the



region try to keep the existing labour force in order not to make them to decide to emigrate in search of other jobs.

Figure 11. Evolution of performance and labour remuneration in the industrial sector of the CDR, prices comparable to 2005=100%

Source: National Strategy of the Central Development, 2010

Recent data of January-August, 2010 reflect average monthly salary of an employee of Straseni district economy which made up 2 255 MDL and increased by 7.3% as compared to the same period of 2009. In budget sphere average salary made up 2 238 MDL and increased by 11.7% as compared to 2009, in real sector – 2 336 MDL making up 6.6% increase. Within this increase hotels and restaurants were identified more where salaries were increased by 75% (see the table below).

Table 10. Salaries in Straseni district, January-August 2010

Type of activity January-August 2010, MDL

Growth rate

as compared to 2009,

%

Agriculture 1 358 108.9

Extractive industry 4 220 85.3

Processing industry 2 084 97.2

Electrical energy, thermal energy, gas, water 0 0

Constructions 2 750 100.9

Trade, repairs 2 033 109.4

Hotels, restaurants 2 031 174.9

Transport, telecommunications 2 692 95.9

Financial activity 2 726 94.6

Real estate 2 399 111.1

Public administration 2 586 99.4

Education 2 193 117.1

Healthcare and social assistance 2 678 111.6

Other activities of collective, social services 1 593 100.9

Entertainment, culture, sport 1 366 99.5

Source: Operative information of salaries in Straseni district, 2010, NBS

Labour productivity index Real remuneration



For Straseni the situation is the following: according to the statistical data, at the end of the I trimester 2008 average revenues depending of the sphere of activity were observed. Thus, average income per capita made up: in primary agriculture – 1 129 MDL, in processing industry – 2 494 MDL, in business (trade) – 2 224 MDL, retired – 641 MDL.

Potential of resources for the industrial park

The main factor which determines registration of higher levels of salaries above the regional average is the district closeness to Chisinau municipality (the distance between Chisinau and Straseni is just 23 km), the fact for which investment inflow a has stronger dynamics and accordingly higher salaries, higher living standards of the population, which may be reflected as an important economic advantage in the industrial park creation in the region.


Main aspects which can be represented as benefits of the industrial park creation are directly reflected in creation of new jobs or better paid jobs.

Along with the transformation into the industrial park and provision of facilities, the corresponding costs will decrease significantly, while with further investments the partner companies under the similar conditions of activity would be able to create new jobs or increase incomes of the employees – the beneficial fact for personal incomes and improvement of the level of the population’s living standards.

2.4.4. ANALYSIS OF PHYSICAL INFRASTRUCTURE

2.4.5. Analysis of natural resources

From the total areas of the district (72 931 ha), agricultural lands make up (31 189 ha) 43%, out of which 3 376 ha are in public ownership and 27 813 ha in private ownership (2008). Besides, the district area includes: area of towns, villages – 5 894 ha (out of which in public ownership – 1 931 ha, in private ownership - 3 963 ha); industrial, transport, telecommunications or other special destination areas –1 209 ha (public ownership - 1 008 ha, private ownership - 201 ha); environmental, healthcare, entertainment areas, areas of historical-cultural value, suburban and „green” zones - 68 ha (public ownership); forest areas – 26 243 ha (public ownership); water areas - 380ha (public ownership) and reserve fund lands – 7 948 ha (public ownership). Thus, the total area of the district consists of: lands in public ownership (56%) and lands in private ownership (44%).

As it is seen, lands in public ownership, characterized by existence of forest resources of over 26 thousand ha prevail which would determine a share of over 35% of the whole area.

Reflected data demonstrate that Straseni district has a significant agricultural potential which makes it possible to obtain products able to fully meet the population’s needs for food consumption and create important available funds for export.

Figure 12. Structure of Straseni district lands, ha




With reference to Straseni, area of which is 6 082 ha, 1 586 ha of which are agricultural lands. The locality is one of the smallest in the republic where the share of forest resources is impressive and makes up about 40% or 2 340 ha.

Recreation zones consist of: bank of Ghidighici, 6 parks of culture and entertainment. Nearby there is national park "CODRII". The administrator of the national park is SE "Moldsilva" with administrative headquarters in Straseni.

The largest share in agricultural lands in Straseni belongs to cultivation areas of vineyard and orchard plantations, specific to the given zone, the next position being occupied by cereal and industrial crops followed by vegetable farming. The detailed structure of cultivated agricultural crops can be seen in the figure below.

Figure 13. Structure of agricultural crops

orz

14.0%

floarea

soarelui

7.8%

porumb

6.1%legume

3.6% vii

28.9%

livezi

11.7%

grau

27.9%

Source: Plan of economic development of Straseni (2008)

CDR is characterized by the deposits of minerals useful for construction materials production - carbonaceous rocks: limestone, marl, argillaceous raw material, sands, sand and gravel formations, diatomite and tripoli. The Centre zone is rich in carbonaceous rocks – limestone which is widely used in construction for limestone calcination for rough stone and gravel as well as an additive to cattle and poultry food. In addition to carbonaceous minerals, deposits of clay, sandy clay, used as raw materials for bricks are developed in the region. Within Straseni district there is the only limestone extraction quarry of national importance, situated in Gornoe village.

Presence of the available natural resources reflects nothing but new possibilities of business development, while „green” areas which predominate in Straseni district perfectly combine profitable activity with recreation opportunities of citizens – thus, there are great opportunities for the development of regional tourism.


For the industrial park activity under the conditions when regional economic activity is mainly based on agriculture, a positive factor is relative dispersion of lands by their destination – 43% agricultural lands, about 35% are forest resource lands, 8% are towns and villages lands. This distribution allows

agricultural

lands

towns,

village

s

industry,

transport

nature,

healthc

are

forestry water stock

vegetables

vineyards

orchards

wheat

barley

sunflower

maize



carrying out diverse activities on the park territory, from agricultural processing and to timber processing or rendering of services for different activities.

At the same time, since Straseni has reduced areas of agricultural lands which makes a large part of the population to be concentrated on the industrial sphere of economy, representing a quite favourable intellectual potential for further operation of the industrial park.


In our opinion, creation of the industrial park will allow for efficient use of the existing agricultural lands in the region by using products and services of the industries supporting agricultural activities.

2.4.6. Analysis of transport infrastructure

Administrative territorial location of the new industrial park in the centre of the development region also determines its perfect connection not just with the local administrative unities, but also with the main regional and international routes.

The position of Straseni district in this part should be analyzed, in the first place, through the CDR, which is situated in the central part of the Republic of Moldova providing links between other regions. In the West the CDR is directly connected with Romania through 3 customs stations, including railroad station - railroad junction in Ungheni. In the East the region’s connection with Ukraine and Russia goes through Transnistrian Region. In the North and South the region’s connection goes through the NDR and SDR. The distances from the main cities are: Iasi, Romania – 20-150 km, Cernauti, Ukraine – 150-220 km, Odessa, Ukraine – 100–170 km.

Transport network of the CDR is represented by two types of transportation: motor and railroad. Traffic of goods and passengers is provided by motor transportation on local, republican and international levels. Railroad transportation is mostly used for traffic of goods and passengers on international level.

Connections to international traffic refer to a dense network of international routes: European Economic Corridor IX (EC IX); Economic Budapest Odessa Corridor (BOC); Giurgiulesti - Briceni Corridor (GBC) (Figure 14. Network of routes in the CDR).

From the CDR it is possible to move to the North through the international route: М2 – Chisinau - Soroca – Ukrainian border and route М14 – Brest – Briceni – Chisinau – Tiraspol - Odessa; to the South: M3 – Chisinau – Giurgiulesti; to the East M21 – Chisinau – Dubasari; to the West M1 - Chisinau – Leuseni. These routes will be supplemented with another international route in case of implementation of transport corridor Budapest - Iasi – Chisinau – Odessa.

Other important international and national transport routes which go through the CDR are:

Northern direction, to Cernauti – Zhytomyr - Lvov – Warsaw: М2 – Chisinau - Soroca – Ukrainian border; to Vinnitsa – Kiev – Moscow: М14 – Brest – Briceni – Chisinau – Tiraspol - Odessa;

Southern direction, to Galati – Tulcea - Constanta - Varna – Istanbul: M3 –Chisinau – Giurgiulesti and R3 – Chisinau – Hincesti - Basarabeasca

South-East direction, to Odessa – Nicolaev – Kherson – Yalta: R2- Chisinau - Bender and R30- Anenii Noi – Causeni - Stefan-Voda - Ukrainian border.

Eastern direction, to Krasnie Okni – Krivoi Rog – Donetsk – Voronezh: M21 – Chisinau - Dubasari and R5 – Chisinau - Vadul–lui-Voda - Dubasari.

Western direction to Iasi – Tirgu Neamt – Cluj – Oradea – Budapest: M1 - Chisinau – Leuseni and R1 – Chisinau - Ungheni.

Figure 14. Network of routes in the CDR

Routes of communications

Budapest Odessa Corridor BOC

European Economic Corridor IX BOC

National highway as international

IX BOC

National route international

IX BOC

Regional route international

IX

Different-grade intersections Customs international

Density of road networks

Regulations




Connections with the inter-regional traffic. Connection with the NDR is made through Balti municipality (М2, М14, R13, R14, R17 ) and the most popular roads are M14 and R14 - dual highways which do not meet the requirements of constantly growing flow of transport. Connection with the SDR is performed through roads M14, M3, R-3, R-30, R-34, out of which R3 is the most agglomerated and needs to be enlarged by at least one traffic lane. Connection with Transnistrian Development Region is possible through international route M1.

Intra-regional road network. Maximum distance between the CDR localities in South-North direction is about 180 km, while in East-West direction - about 120 km and connection can be ensured by transit through Chisinau municipality. The distance between the main urban centres (Ialoveni, Straseni, Ungheni, Orhei, Hincesti) does not exceed 150 km.

Network of local roads. Beside these roads there is a large branched network of roads of local importance. The length of motor roads in the CDR is presented in Table 11. Network of local roads, The share of national roads is 36.5%, overwhelming majority having hard coating. The largest number of roads is in Straseni and Ialoveni districts.

Table 11. Network of local roads


Potential of resources for the industrial park. It should be mentioned that all these aspects related to transport connections and infrastructure in the Centre region are the most developed, thus providing high prospects and a better attractiveness for the investors willing to invest in the industrial park. Location next to the railroad junction Chisinau - Ungheni and in direct closeness to the railroad station of Straseni only increases the investment attractiveness for companies. Thus, well developed regional infrastructure and transportation ways are the factors of success for the industrial park on the territory of „CAAN” JSC.


Density of public roads, km/100 km2, 2009 32.4 36.7

Density of public roads with hard coating, km/100 km2, 2009 30.9 36.4

Share of public roads with hard coating, %, 2009 95.3 99.3



Expected benefits for the region. In this sense, an intensive development of the industrial park will recreate the premises for development of the whole regional infrastructure and, thus, will directly influence the level of the population’s living standards.

2.4.7. Analysis of public utility infrastructure

Water and sewage network. The CDR has significant reserves of potable and mineral water with evident curative properties. The density of potable water distribution networks in the region is in average 13.2 km/100km2 (2008). The share in Straseni district is above regional average making up 14.1 km/100km2 (Figure 15. Water supply networks density by districts, km/100 km2).

Figure 15. Water supply networks density by districts, km/100 km2


Underground waters from phreatic and deep water-bearing layers have a special importance for the CDR development. Unlike deep underwaters, phreatic waters undergo intensive anthropogenic pollution. Out of the total amount of deep underground waters extracted or studied, about 50% cannot be recommended for human consumption without preliminary treatment. These waters are characterized by increased content of mineralization, fluorine, hydrogen sulphide, iron, sodium, ammonia and other elements.

Straseni district is crossed by the rivers: Byk – 18 km, affluents - 37 km, Ichel – 12 km, affluents – 24 km, Isnovat – 20 km, affluents – 6 km. On the district’s territory there are 78 water reservoirs, 122 artesian wells, out of which 47 rigs, 5.641 shaft wells are operated. However, in internal rivers the level of pollution remains high. Main sources of pollution are determined by communal sector by means of water treatment plants which dispose insufficiently purified wastewaters. Out of 13 wastewater treatment plants which operated in the district, only 5 of them are operating at present: „Romanesti” JSC, mayor’s office Bucovat -2 plants, Monastic Complex Capriana and „Euro-Textile Straseni” LTD.

It should be mentioned here that, in general, sewage network in the NDR is poorly developed and technologies of wastewaters treatment are very outdated. Share of housing stock of the CDR having sewage network makes up 15.6% as compared to the national average of 22.6%.

In regard of Straseni, water resources of the town make up 180 ha, formed by the area of the Byk river – 7.11 ha, 5 ponds with the area of 18 ha and protected swamps and 920 wells with the total water volume of about 2 116 m³. The town is provided with potable water by water supply system, with 7100 families using these services. The town’s residents have access to sewage services.

At the same time, for Straseni, it should be mentioned that in 2010 there were submitted applications for financing from the central public authorities for works on infrastructure modernization like the application for reconstruction of the pumping station and restoration of sewage networks, evaluated at 3 mln. MDL.



Waste management. In the CDR, infrastructure and management of solid wastes is poorly developed, both as regards quantity and quality. There is a high level of pollution of soils, waters and other environmental elements mostly caused by poorly developed infrastructure of collection of solid and liquid wastes, including toxic wastes.

The region is characterized by unseparated collection of wastes and a very reduced share of recycled wastes. The CDR daily produces about 1000 tonnes of solid wastes which are presently collected and stored in about 350 small dumps at outskirts of the region’s localities. Most of the dumps occupy large areas but are inadequately arranged.

Natural gas supply for the CDR localities is provided from main gas pipelines at high pressure. In the North of the CDR there is natural main gas pipeline Iamburg - Elet - Cernauti and the branch line from it to Chisinau municipality, through the junction Soldanesti - Rezina, then through pipeline Ribnita - Chisinau, along the CDR territory. The share of housing stock of the CDR connected to the natural gas network makes up 33.5%, which is lower than similar indices for SDR and Gagauzia as well as as compared to the national average of 34.9% (Figure 16. The share of gasified localities by districts, %).

Besides natural gas, there are consumers of liquefied gas in the CDR (industrial sector, rural localities). Supply of consumers with liquefied gas is performed by „Gaznosbat” enterprise situated in Straseni.

The map of the existing and forecasted natural gas networks is presented in Figure 17. Gasification network, CDR.

Figure 16. The share of gasified localities by districts, %


As regards Straseni, the locality is connected to gas, the services of which being used by 5.304 families, making up about 50% of the total population of the town. At the same time, there are still 5 701 families which are not connected, this is mostly because of the lack of financial means.



Figure 17. Gasification network, CDR


Electric energy supply for the localities of the CDR is performed by distribution networks belonging to the company Electric Networks „Centru”, the enterprise with foreign capital of „Union Fenosa” company and of the state enterprise „Retelele Electrice de Distributie Nord”. On the territory of the CDR there are two large stations with the capacity of 333 kW in Ialoveni and Straseni. Other more than 200 stations have the capacity of 35-110 kW. The CDR territory is crossed from the North to the South (Tiraspol – Ialoveni - Straseni - Balti) by two high capacity overhead electric lines of 330 kW. All the localities of the region are connected to electric networks. At the local level there are problems with electricity supply in newly constructed sectors where technical projects of networks are required. The cost of the technical project is to be paid by the local public administration and potential consumers. Thus, connection to electric networks is delayed due to the lack of financial means.

Thermal energy supply is a problem for most residents of apartment houses in the CDR. Housing blocks were provided with thermal energy from central heating networks which at present do not function. Thus, residents of housing blocks which are supplied with gas, installed autonomous boilers, others set ovens in blocks, while others use other electrical appliances for heat production during winter. The situation is similar in public institutions where either autonomous boilers or ovens are installed. Private sector (houses on ground) uses ovens both in urban and rural areas.


A less favourable aspect for the activity of the industrial park is the lack or inadequate provision with water and sewage. In this sense, additional resources are necessary for installation of utilities for water supply and sewage systems. In case of large monetary investments in the interior of the industrial park, the creation of well done local sewage system would ensure a good functionality of the component entities of the industrial park.

At the same time, since Straseni is situated not far from Chisinau municipality it will ensure certain competitive advantages in regard of other towns or districts. The main advantage is direct access to high pressure gas pipelines which can be used for current consumption not only by the population, but also economic entities. From the point of view of effect upon the industrial park, it represents nothing

Natural gas networks

Existing main gas pipelines

Forecasted main gas pipelines

Gas metering plants (existing)

Gas reservoirs (existing)

Gas-compressor stations (existing)

Gas distribution stations (existing)

(existing)



but an advantage and opportunity to attract investors. In case of lack of connection to gas network, economic entities from the territory of the park can do it by themselves with minimum costs and having extended opportunities from the point of view of consumption.

Functioning of electric stations of 330 Kw on the territory of Straseni as well as passing of 2 high voltage overhead lines are quite important decisive factors. Moreover, in case of development of some new activities based on alternative energy, the industrial park would have direct access to the electricity provider, while direct sale of energy would only be a question of time for the future activity of the park.

Lack of thermal energy supply determines establishment of too high prices for heating of spaces on the „CAAN” JSC territory. On one hand, this would seem to be a negative factor, however, if analyzing the possible activities which can be carried out on the territory of the park, the lack of thermal energy would turn out to be a favourable factor – companies which will be able to produce electricity as a result of the activity on production of other goods, will have a free and unrestricted sales market.


The benefits resulting from the industrial park implementation consist in creation or improvement of town’s and region’s infrastructure per total with positive effects upon the environment. Created or reconstructed water treatment plants will also service a part of neighbouring localities of the industrial park, which will reduce environmental pollution. Moreover, the industrial park creation will determine state authorities to construct the facilities related to transport and communications infrastructure with beneficial effect upon the region.

2.4.8. Analysis of vocational and higher education institutions

The educational institutions network of Straseni district consists of: 32 preschool institutions, 39 school institutions, 3 extraschool institutions. The localities without school institutions are: Huzun village, affiliated to theoretical lyceum „Ion Creanga”, Micleuseni; Rasvet village, affiliated to gymnasium Bucovat.

The district has 37 buildings destinated for preschool institutions. Currently only 33 kindergartens work. Localities Stejareni, Gornoe, Micleuseni, Huzun have no preschool institutions. In villages Rasvet, Dolna, Saca, Capriana, Tiganesti preschool institutions have not worked for 10-16 years, the buildings being in a deplorable state.

Out of 32 preschool institutions, 12 work on natural gas, 16 with ovens, 4 with solid and liquid fuel. Out of 39 pre-university institutions, 18 work on natural gas, one with oven and 20 with solid and liquid fuel. Significant problems related to running water supply were revealed in most institutions. Most educational institutions need maintenance of lighting systems. The majority of educational institutions need updating school furniture and didactic materials.

District educational institutions institutionalized:

Total – 12 596 students in 596 classes

Primary education – 4 999 students in 216 classes

Gymnasium education – 6 558 students in 313 classes

Lyceum education – 1 495 students in 72 classes

Secondary education – 144 students in 8 classes

Educational institutions of the district are provided with didactic staff of 950 teachers in pre-university education and 325 teachers in preschool education. Didactic staff provision in 2008-2009 academic years made up 95.15% .

From job offers provided by the educational institutions of the district for 2009-2010 the necessary number makes up 37 teachers. Out of the total number of didactic staff: - 196 specialists carry out didactic charge of more than 27 due to the lack of specialists, - 198 are pensioners. For a qualitative professional training 33 teachers undertake extramural studies. Out of the total number (1275) of



didactic staff, 850 (66 %) have didactic grades: Superior didactic grade – 11, I didactic grade - 80, II didactic grade - 760.

In Straseni cultural educational services are reflected in 4 gymnasiums covering 893 students; 1 lyceum with 1.860 students; 4 kindergartens with 934 children; 2 libraries and one cultural centre. Besides, Straseni has a public organization which supports the community development: public association of teachers and parents functioning within gymnasiums of the locality.


As it has been already mentioned, Straseni almost does not have specialized higher educational institutions. This lack is explained by the fact that most young people that are willing to receive higher education, because of the small distance between the town and Chisinau municipality, go directly to the city, even though making everyday trips. Therefore, the level of education of the population is not considered to be below the regional average, quite the contrary, most lyceum leavers continue their education – the fact allowing the industrial park to have staff specialized in the field, trained and often with work experience, but who might, at the same time, request a higher remuneration for their work.


Expected benefits refer to the improvement of qualification of the people engaged in the industrial activities of the park as well as increase in professional level of the region’s population. This fact may then create conditions for involvement of new specialists – didactic staff in the region as well as integration of students for the period of practical training within the park. Moreover, persistence of created jobs will indirectly entail a greater interest of the population in obtaining and completing higher education as well as experience exchange among didactic staff and those practically trained.

3. LEGAL FRAMEWORK

3.1. Analysis of the legal framework of the RM

General remarks

The legal system of the Republic of Moldova has experienced a relatively good development within the last decade. Moldova has come closer to the standards of European countries and international organisations it adhered to (such as the World Trade Organization), however there is still a long way ahead to fully comply with the legislation. Extension and effectiveness of Moldovan trade legislation has improved but practical implementation of the Law still remains a great problem. Further on we point out the most important positive aspects of Moldovan legislation meant to encourage both local and foreign investors.

Private property protection

Article 1 of the Constitution of the Republic of Moldova stipulates supremacy of the principle of the rule of law. The state guarantees the right of private property (art.46 of the Constitution) and protects property of citizens of the Republic of Moldova, foreign citizens and stateless people (art.126-127 of the Constitution of the Republic of Moldova). The Constitution ensures that property both material and



intellectual, acquired legally cannot be confiscated, legal nature of property being presumed. In 2002 a number of articles contravening the principle of property security and alleged nature of private property, were excluded from Chapter V „Tax Administration” of the Fiscal Code of the Republic of Moldova. The article 23 (3) of the Law on privatization (No. 627-XII of 04.07.1991) stipulates that the state guarantees property rights to privatized property, right to participate in privatization provided equally to citizens of the Republic of Moldova, foreign citizens and stateless persons.

Protection and promotion of investments

According to article 126 of the Constitution the state ensures inviolability of investments of individuals and legal entities, including foreign persons. Article 5 of the Law on investments in entrepreneurial activity states that investors shall invest on the entire territory of the Republic of Moldova and in any field of entrepreneurial activity in compliance with antitrust legislation, environmental legislation, national security etc. The state ensures the regime of security and full and constant protection for all the investments regardless of their form. Investments and provided facilitations cannot be subject to any discrimination by nationality, residence, place of registration, etc., all the investors being provided with equal rights.

The government of the Republic of Moldova offers favourable conditions in the process of privatization of productive objects including the possibility of payment by instalments of the price for the privatized objects, this possibility being important for attraction of investors. If an investor wants to start a totally new business and for this purpose wants to purchase a parcel of land being in public property (except those of agricultural or forest destination), the investor has to pay in the first year at least 50% of the parcel price, the rest of the payment can be staggered for the period of 3 years (according to the Law on normative price and procedure of land purchase and sale No.1308-XIII of 25.07.1997). In order to improve the business climate as well as to promote local and foreign investments, the government of the Republic of Moldova adopted the Decision „On control regulation” according to which all the state institutions executing functions of control and conformity assessment should go through a „guillotine” and only those will survive which really exercise functions of control important for consumers’ security, for public interest, for national security, etc. We believe this is a very appropriate measure, the efficiency of which will fully depend on the readiness of control and assessment bodies to give up their powers.

Foreign investors

With some notable exceptions foreign investors enjoy equal rights with the nationals. Moldova has signed bilateral agreements on investments with more than 25 countries, including the countries which are its principal trade partners or those which allocated important investments in the Republic of Moldova. Our country has also signed 13 international agreements on avoiding double taxation. Foreign investors have the possibility to invest in and control local companies, are protected by international agreements for investment protection and insurance. The government will approve the national program for investments promotion.

The activity of foreign investors in the Republic of Moldova falls in jurisdiction of the Law on investments in entrepreneurial activity which establishes equal rights for national and foreign investors.

Expression of free economic initiative

Market, economic initiative and fair competition are indentified as fundamental principles of the economy (art. 9 of the Constitution of the Republic of Moldova). The government of the Republic of Moldova, central and local public administrations can only give orders to enterprises within the limits of their competences stipulated by legislation (art. 8 of the Law on enterprises and entrepreneurship). Losses, including missed profit, suffered by enterprises as a result of execution of illegal orders shall be recovered from the budget which finances the corresponding authorities. Economic initiative cannot be restricted under the pretext of inopportune nature or its uselessness. Private contracts are discussed freely, then are registered with the notary for their legal authentification. Contracts of land lease are registered with the bodies of the local public administration.

Activity of industrial parks



The process of creation of industrial parks and conditions of activity of their residents are regulated by the Law on industrial parks (No.182 of 15.07.2010, in force since 03.09.2010).

The main objectives of the Law (art.2) are:

I. attraction of local and foreign investments;

II. formation of competitive sectors in industry on the basis of modern and innovative technologies;

III. carrying out of economic activities in compliance with the opportunities of development specific to the corresponding zone, including a more efficient use of public property;

IV. development of small and medium enterprises;

V. creation of jobs.

This law is complete and its provisions are applied along with a number of other laws and legal acts, out of which we would mention:

I. Civil Code of the Republic of Moldova;

II. Tax Code of the Republic of Moldova

III. Law on joint-stock companies, No. 1134 of 02.04.1997;

IV. Law on limited liability companies, No.135 of 14.06.2007;

V. Law on state registration of legal entities and individual entrepreneurs, No. 220 of 19.10.2007;

VI. Law on investments in entrepreneurial activity, No. 81 of 18.03.2004;

VII. Law on regulating entrepreneurial activity through licensing, No. 451 of 30.07.2001

3.2. Analysis of legal conformity of the managing enterprise

From the documents provided by „CAAN” JSC administration and their analysis, it was established that it is a:

- Commercial joint stock company; - Constituent document: Articles of Association No. 151052150 of 27.12.1995 (in new

edition); - Administrative body:

a) General Meeting,

b) Company Board,

c) General Director,

d) Audit Commission.

- shareholders:

e) „GPI Capital”LTD – 73.5%

f) Vasile Rosioru – 20.0%

g) „Draud Com”LTD – 0.14%

h) „Europa Trust”LTD – 0.02%

i) „Exiton Sprad”JSC – 0.3%

j) Others – 6%

General Meeting of shareholders has exclusive powers described in p.7.2. of Articles of Association and where decisions are taken with 2/3 of votes of those present at the meeting, but except the decisions regarding the election of the Company Board– cumulative voting, while other decisions are taken with at least of half of votes represented at the meeting.



Company Board exercises powers described in p.8.1. of the Articles of Association, while decisions are taken with the vote of majority of members presented at the meeting, except for cases when the Law provides for taking decision by unanimous voting.

Representations and branches – unavailable.

Companies in which participated as founder – 2: “Sudor” JSC, CB “Moldindconbank” JSC.

Loans and credits – unavailable

Adjacent land: area 14.8704 ha; category – for construction; property of the administrative territorial unit, transmitted in use on the basis of Title No. 030004 of 27.07.1998

Interdictions – unavailable

Premises:

Total area – 74 947 m2;

production – 51 800 m2

Access ways:

railroad: 0.672 km;

motor road – 2.1 km

Trademarks, patents, registered licenses - 0

Registrar:

Register -F, 9/4 Teilor St., Chisinau

Shares register – reflects modifications in property ownership for shares

Number of ordinary shares – 30 510 83 with nominal value – 8 MDL

The assets less than the amount of the social capital. On 01.02.2010 modifications in the social capital were introduced – 24 408 664 MDL

Obligatory and required registers (register: inventory, journal, ledger, purchases, sales, control) –are present and completed.

Order of organization and functioning –activity is organized appropriately however management is inefficient

DISPUTES – Mayor’s Office of Straseni regarding payment and parameters of the land adjacent to the company’s read estate (Economic Court)

STAFF – 33 employees: higher education – 6; secondary school – 20; vocational school - 7

Absence of rules and strategies for human resources

Trade unions absence

Total lease contracts – 33

Tenants’ fields of activity – trade, production, auto-service, joinery, bar, etc.

Energy complex management – through intermediary – “Elcoj Plus” LLC. Contract concluded with this company should be terminated, and provision of access to electricity for future residents is to be ensured by the manager of future industrial park.

Environmental protection requirements – it is stated that environmental protection requirements are met at acceptable level (act on environmental protection examination No. 014858 of 02.04.2010)

Conclusions:

In the light of correspondence to all the requirements of the Law on industrial parks1, the enterprise:

1 Law #182 of 15.07.2010 on industrial parks



- is created in the form of a joint –stock company;

- uses a parcel of land adjacent to constructions:

- has area of 14.8704 ha (legal limits for industrial parks creation being of 5 ha);

- category of land – for constructions, belonging according to property rights to administrative territorial unit of Straseni and was transmitted for use to the enterprise at the moment of its foundation for unlimited period of time;

- free of loads;

- is not a subject of any litigations during examination and/or settlement process within judicial instance or arbitration (with the exception of litigation regarding payment and parameters of the parcel adjacent to the company’s real estate);

- has access to national transportation motor and rail roads;

- connection of technical and production infrastructure of the park to public utilities is available.

Thus, from the formal point of view, the area on which „CAAN” JSC is situated, meets the main requirements of the Law 182/2010 for granting the title of industrial park, while primary legal aspects of the company create premises for a enterprise managing the park to be established on its basis.

4. ECONOMIC ENTITY PRESENTATION

4.1. Profile of the enterprise

4.1.1. General presentation

„CAAN” JSC is situated in the industrial zone of Straseni at a distance of about 23 km from Chisinau.

Photo 1. General view over the enterprise territory

Short name of the enterprise is „CAAN” JSC.



Legal address: 1 V. Crasescu St., Straseni, Republic of Moldova

Executive headquarters is at the same address.

4.1.2. Brief historical review

„CAAN” JSC, previously MFC. ”Masfrigcomplect” was founded according to the law on privatization (No. 627-XII of 04.07.1991), Law on entrepreneurship and enterprises (No. 845-XII of 03.01.1992) and other normative acts of the Republic of Moldova according to declaration of incorporation of September 28, 1995.

The company was registered on December 27, 1995 in the State Register of enterprises and organizations under No.151052150.

The company received the unique identification code (IDNO) 1005600014663.

In 1996 the company was restructured by means of adoption of Restructuring plan by the State Council of Creditors. Implementation of the Plan of Restructuring conditioned the transition of the production nomenclature to LTD type companies founded by the company’s shareholders (former employees of the plant).

From the moment of the implementation of the restructuring plan and up to now one of the main activities of the company is rent of production, auxiliary premises, machines, facilities and equipment.

At present ”CAAN” is a joint stock company which, in fact, due to the launch of the restructuring project in the 90-s of the past century operates according to the principle of industrial park. However, since there were no Law on industrial parks in the analyzed period, the company was founded on the basis of the Law on Lease as a company for renting of unused assets.

4.1.3. Fields of activity

The company was created to enlarge the economic value of the existing assets and acquisition of incomes.

According to the company’s Articles of association it carries out the following activities:

Rent of production, auxiliary premises, available machines, facilities and equipment;

Sale of unused assets;

Rendering of business consulting services.

Previously the company was producing freezing equipment for industrial refrigerators of various capacities intended to store fruit and vegetables and was provided with the equipment necessary for this activity.

4.1.4. Dimensions of the enterprise

The company is situated on the territory of about 14.8704 ha.

Historically it was one of 4 enterprises of the Soviet Union importance intended to produce freezing equipment for the whole Soviet Union.

After collapse in the 90-s, the enterprise as the majority of large enterprises totally lost sales market and stopped production activities.

Conclusions:

The general situation of the enterprise reflects:

Opportunity to extend the activities on the territory, taking into account vast area of about 13,7 ha.

Large experience of the enterprise analyzed at the level on national orders and in the light of its specialization in freezing equipment production.

Experience of the enterprise in activities of leasing its areas and equipment.



4.2. Enterprise’s potential

4.2.1. Diagnosis and infrastructure of location

General data on the enterprise infrastructure are presented in Table 12.

Table 12. Enterprise’s infrastructure

1 The year of commissioning of the first constructions 1979

2 Area of the enterprise’s territory within fenced perimeter 13.7 ha

3 Area of the territory under constructions 7.5 ha

4 Area of green zones 4.1 ha

5 Area of access ways (asphalt roads, railroads, paved land) 3.3 ha

6 Railroad length 0.672 km

7 Motor-roads length 2 km

„CAAN” JSC is situated in the industrial zone of Straseni just in 23 km to the North-West from Chisinau. This zone is in the North-East part from Straseni along the river Byk.

The territory of the enterprise is 14.8704 ha and is enclosed by a reinforced concrete fence. In the West and North-East the territory borders with other industrial enterprises, in the South and South-West there is a railroad Chisinau - Ungheni, in the East and South-East there is a territory supposed for the development of the industrial zone.

The highway Chisinau - Ungheni is in the West, in parallel with the railroad. There is an asphalt road of about 2.5 km in length from the highway to the enterprise, however the asphalt surface is badly damaged and requires capital repair, and namely a new layer of road coating. From this length, 0.8 km (5 760 m2) also requires a total replacement because of complete degradation of the asphalt concrete layer of the road coating and massive pits appearing on the road.

Photo 2. State of the road from Chisinau - Ungheni highway to the enterprise



The company is connected with the railroad having its own railroad of about 0.672 km which is in a satisfactory condition. Wooden traverses were replaced for reinforced concrete ones. Loading ramp requires repair but, in general, it can be used. Cranes are in working condition.

Photo 3. Ramp and cranes

Construction of interior roads allows for the use of all types of automobiles (TIRs, high-tonnage trucks, etc.), however as other infrastructure objects they require works of reconstruction of road coating of ≈2 000 m long or having area of 10 000 m2.



Photo 4. Condition of internal roads

Electrical grid is in good condition, transformers have been recently repaired, and cable parameters allow using high capacity production facilities.

Water and sewage networks are in a deplorable condition. Potable water supply is possible from aqueduct Micauti, and technical water supply from the existing aqueduct. Pumping station of sewage network is damaged and requires total renovation of equipment and network. Atmospheric precipitation disposal network is in better condition, however it also requires capital repair.

In the past the enterprise had its own boiler station providing thermal energy to both the enterprise subdivisions and the town. Currently the boiler station is not longer controlled by the enterprise, it was transmitted to the mayor’s office and does not work now (is under insolvency procedure), so there is no centralized heating at the enterprise and in the town at all. At present the enterprise is connected to natural gas, pipelines being laid to centralized distribution blocks. Some companies operating on the territory of „CAAN” JSC have installed their own autonomous heating networks equipped with natural gas. Gas networks from the centralized distribution block to the building are installed by the companies which hold on lease the premises („Feralumin” LLC, „Mob-Elita” LLC, „Prodtehmet” LLC, „Masfrigcom” LLC, „Malidor Lux” LLC, „Brutaria Vianda” LLC, etc.)

Conclusions:

regarding infrastructure:

Taking into account the above stated situation, the conclusion about repair and upgrade of the following infrastructure objects has been made:

Internal roads (requiring capital repair and which can be made after closing the pits and provision of a new layer of road coating);

Water supply and sewage networks (which require to be changed, so, in the existing channels old objects will be removed and new ones will be installed);

and the heating system, which requires to be reconstructed .



regarding location:

the enterprise’s location in the industrial zone of the town allows attracting potential residents within the park and/or cooperating with the enterprises of the industrial zone;

at the same time, the enterprise’s location next to the railway is advantageous, it will increase the park attractiveness in the light of ensuring potential residents with the access to railway and facilitating process of transportation of their goods.

4.2.2. Technical diagnosis

4.2.2.1. Real estate description

According to the attached scheme, the enterprise has the following constructions on its balance:

Table 13. The list of real estate on the balance as of 30.06.2010

Name of construction Year of

commissioning Number of

constructions

Initial value, thousand

MDL

Residual value

30.06.2010, thousand

MDL

Depreciation, thousand

MDL

1 Production block No. 1 1979 1 32 808 097 12 316 063 20 492 035



4 Sanitary block 1986 1 4 244 877 2 007 239 2 237 638

5 Administrative block 1986 1 4 407 934 1 984 111 2 423 824

6 Canteen 1980 1 4 534 053 1 301 495 3 232 559

7 Finished products warehouse 1979 565 370 77 588 487 782

8 Control posts 1982 2 26 983 499.9 26 483

11 Transportation section 1979 1 644 582 107 890 536 691

12 Compressor section 1986 1 615 543 184 434 431 109

13 Liquefied gas warehouse 1986 1 60 382 24 227 36 155

14 Metal warehouse 1979 1 445 070 84 833 360 237

15 Forestry products warehouse 1982 1 104 550 31 071 73 479

TOTAL

62 452 544 22 454 039 39 998 505

The scheme of the territory with the location of main buildings is shown in Figure 18. The scheme of the territory of the enterprise with the main buildings.



Figure 18. The scheme of the territory of the enterprise with the main buildings

The main buildings are over 30 old, and during recent 20 years they have not undergone capital repair.

Taking into account the fact that the territory of the enterprise is along the Byk river , where underground waters come to the surface, all the buildings are built on pillar foundation to eliminate the risk of damaging them by underground waters.

Buildings are in a satisfactory condition. Roofs of the production blocks are made of strong metal trusses coated with profiled plates. At present all roofs are in a deplorable condition and require capital repair. The condition of walls is satisfactory, it requires just running repair. Also pavement of the production spaces is deteriorated and requires reparation or total replacement.

Production block No. 1:

Photo 5. Production block No. 1 (view from the railroad)

At present the buildings are not heated. Currently there is no central heating in Straseni.

If production spaces do not require the mentioned height, second floor can be built, used for production or other activities (e.g. administration, sanitary rooms, etc.).

Building of rectangular form in plan.

PPrriivvaattee tteerrrriittoorriieess



Axial dimensions - 240.8x144 metres.

Distance between columns - 24 metres.

Unsupported height – 10.8 metres.

Constructed surface – 34 959.5 m2.

Bearing structure – prefabricated elements from reinforced concrete

According to the project this building was intended for main production space, department of painting and packing freezing equipment.

Cranes.(20 tons, 10 tons, 5 tons) are in a satisfactory condition and can be used for production.

The block is provided with electricity from 4 stations:

No.1 - 2x1000 kW

No.2 - 2x1000 kW

No.3 - 2x1000 kW

No.4 - 1x1000 kW



Axial dimensions 144x72 metres.

Distance between columns -18 metres.


Constructed surface – 10 599.0 m2

Photo 6. Block 2 (to the left) and garages (to the right)

According to the project, block 2 included production of consumer products, repair department and instrumental department.

The block is provided with electricity from 2 stations: No.5 - 250 kW; 1x1000 kW. No.6 - 1x1000 kW.





Axial dimensions - 132x36 metres.

Distance between columns -18 metres.


Constructed surface – 10 599.0 m2

On one side a sanitary block is built:


Height of one floor – 3.3 metres.

Total area – 1 296 m2

According to the project, block 3 included: department of repairs in constructions, department of products preparation and materials storehouse and a sanitary block.

Photo 7. Block 3 (view from the side of the sanitary block )

The block is provided with electricity from station No.9 -1x1000 kW.

Administrative block:

Building of rectangular form in plan with 4 floors.




Total area – 12 376.0 m2.



Photo 8. Administrative block (fasade)

Sanitary block:


Axial dimensions 60x24 metres.




Photo 9. Sanitary block (4 floors) and canteen

Canteen:




Axial dimensions - 48 x 24 metres.




The administrative block together with canteen and sanitary block forms the facade of the main building of the enterprise. These buildings also require capital repair.

Besides the mentioned buildings the enterprise has several garages for cars, compressor station and some other constructions which are in a dissatisfactory condition. For their further use capital repair is required.

Currently some enterprises which rent production spaces have invested in repair or construction of supplimentary buildings.

4.2.2.2. Description of facilities and equipment

The list of long-term assets on the balance as of October 1, 2010 is presented in Annex 1.

All the facilities may be divided into several groups:

Table 14. Facilities on the balance as of 30.06.2010 by groups

Nr. Group name

Number of units

Year of commissi

oning

Initial value,

thousand MDL

Residual value

30.06.10,

thousand MDL

Calculated depreciation,

K MDL %

1 Power equipment and machines 21 1982-1996 483 320 15 345 437 947 96

2 Working equipment and machines

292 1979-1997 4 807 359 186 440 4 620 919 96

3 Measuring and adjustment devices and facilities and laboratory equipment

2 1979-1985 2 236 0 2 236 100

4 Computing 7 2005-2006 27 252 650 26 601 98

5 Other machines and facilities 1985-1996 69 155 9 276 59 879 86

6 Transportation units 45 1979-1991 1 543 154 98 124 1 445 030 94

As it is seen from the table above, all the existing facilities are very old, depreciation being over 90%. Despite the fact most of the facilities are in a working condition, they are morally and physically depreciated, consume too much energy and are intended for very large volumes of production and require large exploitation expenses.

All the cranes are in a satisfactory condition, they can be fully used if necessary.

Conclusions:

Regarding production spaces the situation is the following:

Satisfactory condition of foundations, columns and beams or trusses.

Need of repair and partial consolidation of walls, while for thermal energy conservation, their replacement with thermal insulation panels of SANDWICH type which would also provide an aesthetic facade with minimum costs for future maintenance during exploitation.

Need of capital reconstruction of the roof, woodwork and floor as well as complete replacement of board coating with thermal insulation panels of SANDWICH type. Single-glazed metal windows should be replaced by double-glazed windows.

If necessary, in order to enlarge production or administrative areas and to diminish height of production spaces it is possible to construct second floor.



If area expansion is not required, it is possible to mount a supplementary suspended ceiling which will allow diminishing the height of space and cutting costs for maintenance, heating, lighting, etc.

Regarding auxiliary administrative buildings the situation is the following:

Need of capital repair of premises with replacement of doors and windows, internal networks, floors and execution of finishing works.

Need to repair the roof (in this sense, a solution would be a roof carcass with two slopes and creation of spaces in attic which would enlarge administrative spaces).

Regarding facilities and equipment:

The situation in the table reflects an extremely high depreciation of the facilities and, accordingly, too high exploitation expenses. As regards cranes, they are in a satisfactory working condition, which means possibility of their use within the industrial park which will be created.

4.2.3. Operational diagnosis

At present the enterprise’s activity is related to the rent of production, auxiliary premises, available machines, facilities and equipment and sale of unused assets.

For the lease of production spaces a model contract has been developed which is concluded with each enterprise separately.

The contract stipulates responsibilities and rights of the parties, orders of payment as well as price for 1 m2 of production area making up 127.4 MDL/m2 annually. This is the lowest possible price calculated according to the annex 8 to the State budget for 2010 No.133-XVIII of 23.12.2009.

Non-production areas are offered for lease at 50% of the price of production areas.

The same contract explains the order of formation of the annual rental price for facilities – it makes up 10% of the residual value of the facility at the moment of the contract conclusion + 20 % VAT.

The contract also provides for resident enterprises’ support in legal, informational sphere, secretariat services and staff selection as well as guarding of resident enterprises’ objects. These services are included in the rental price.

4.2.3.1. The list of enterprises

Taking into account the fact that the main activity of the enterprise is lease of production areas and facilities, at present 33 enterprises are operating on the territory of „CAAN” JSC. They carry out the following types of activity:

Manufacturing and maintenance of freezing equipment

Metal working and facilities manufacturing

Furniture manufacturing

Transportation and vehicle repair services

Consumer products production

Bar, concert hall, bakery, etc.

According to the information received from the National Bureau of Statistics in 2009 enterprises situated on the territory of „CAAN” JSC has performance as shown in Table 15. Incomes, taxes and contributions paid by resident enterprises in 2009 (MDL)



Table 15. Incomes, taxes and contributions paid by resident enterprises in 2009 (MDL)

No. Activity Number of enterprise

s

Average number of staff

Sales revenues

Taxes paid to

the budget

Health insurance

contributions

Social insurance

contributions

1 Refrigeration branch – production and services

6 32 7 241 560 157 171 33 389 138 331

2 Branch – furniture production

4 58 8 215 257 54 989 56 592 207 627

3 Equipment production and metal working

6 56 5 880 403 138 600 68 288 224 230

4 Construction materials (aluminium shape)

2 29 283 275 120 750 83 393 292 591

5 Transportation and vehicle repair services

7 13 208 744 2 250 3 266 13 246

6 Other activities (bakery, cafe, services etc.)

9 47 3 324 001 26 393 9 082 41 045

TOTAL 33 235 25 153 240 500 123 254 010 917 070

Source: NBS

The largest share in activities belongs to furniture production, including the largest number of employees – 58, and about 33% of the total volume of sales. It is followed by refrigerating branch with 32 employees and 29% of the total volume of sales. A smaller share belongs to equipment production and metal working with 56 employees and 23% of the total volume of sales. Other activities are less significant with 47 employees and only 15% of the total volume of sales.

General information on enterprises operating on the territory of the company as of 01-10-2010 is presented in Table 16.

Table 16. List of enterprises operating on the territory of „CAAN” JSC as of 01.10.2010

No. Name No. and date of lease contract Director Activity

Location,

no. on plan, block

Rented area m2

Production Non-production

Total

1 Vaiur Mercur LLC 001/3 of 06/05/05

Vartic Nicolae Gr Consumer products 3 – Block 3 138 298 436

2 Tact Zodiac LLC 003/3 of 14/05/05

Maslii Bogdan M Quail breeding 10 – Garage - 10 126 126

3 Debut Gama LLC 004/3 of 20/05/05

Galuca Anton Gh Metal working 2 – Block 2 338 467 805

4 Masfrigcom LLC 008/3 of 20/05/05

Marinov Stefan Ion Freezing equipment production

2 – Block 2 462 726 1188

5 Servocar LLC 009/3 of 20/05/05

Cotaga V. Z. Transportation services 11 – transport department

0 25 25

6 Electrobobina LLC 011/3 of 21/05/05

Taras Hariton Fans production 1 – Block 1 126 12 138

7 Noi Bejenari IE 014/3 of 01/06/05

Bejenari Ion Semion

Furniture production 3 – Block 3 106 156 262

8 GISS LLC 019/3 of 01/07/05

Suman Sergiu Gh. Equipment repair 2 – Block 2 259 249 508

9 Frigomas JSC 028/3 of 23/09/06

Bonta Petru Ion Freezing equipment production

2 – Block 2 130 46 176

10 Belmod LLC 035 of 17/01/1997

Grispeerdt Dierc Carpets 1 – Block 1 0

11 Prodtehmet LLC 043/3 of 01/10/07

Popa Gheorghe Ars. Tools, equipment production

4 – Administrative Block-and 7

278 98.5 376.5

12 Elcoj Plus 054/3 of 02/10/05

Cojocaru I. Electric equipment servicing

4 – administrative Block

18 18

13 Feralumin LLC 057 of 02/04/03

Bednii Alexei Aluminium shape 1 – Block 1 4720 4 720

14 Service Frig LLC 059/1 of 01/12/06

Mindrila Valeriu Freezing equipment servicing

2 – Block 2 136 72 208

15 Barbos Iacob IE 061/1 of 21/05/07

Barbos Iacob Freezing equipment servicing

1 – Block 1 153 135 288

16 Dimans ST LLC 062/1 of 01/10/04

Cionanu Nicolae Furniture production 4 – Administrative Block

810 810



17 Jian Sergiu IE 063/1 of 27/04/07

Jian Sergiu Freezing equipment servicing

11 – transport department

372 372

18 Victoria Olicedaevschi IE

004/3 of 20/05/05

Olicedaevschi V Transportation and repair services


194 194

19 Mob Elita LLC 067/1 of 01/10/04

Ciobanu Nicolae Furniture production Sanitary Block - 5

1457.7 288 1 745

20 Gunplast-E LLC 071 of 15/05/05

Cerneavschi A Joinery from aluminium and PVC

1 – Block 1 179.8 18 197.8

21 Italprod LLC 072 of 15/06/05

Cudreaşov A Winery equipment production

3 – Block 3 972 432 1 404

22 Divalconi LLC 081 of 21/08/06

Dicu Ion Consumer goods production

4 – Administrative Block

772 772

23 Cascald service 084 of 18/12/06

Coţaga Valentin Sauna 11 – transport department

40 68 108

24 Speranţa Arhip IE 085 din 03/01/07

Arhip Igor Vehicle repair services apart 144 144

25 Malidor-Lux 092 of 10/03/08

Arefiev Liliana Bar 6 – Canteen 1 floor

147 78 225

26 Sărbătoarea nunţii LLC

093 of 12/03/08

Grosu Mihaela Ceremonies Services 6 – Canteen 2 floor

648 156 804

27 Brutăria Vianda 096 of 01/10/09

Andreev Irina Confectionery production

6 – Canteen 320 320

28 Гидрохолодтехника JSC

098 of 01/12/09

Rudi Iurie Transport repair services


108 108

29 Mînzatu Vasile IE 099 of 01/02/10

Minzatu Vasile Auto-service 11 – transport department

126 126

30 Livcom Trans LLC 101 of 02/04/10

Alecseev V Auto-service 10 – Garage - 10 90 45 135

31 Imex Agro LLC 102 of 02/04/10

Margina Vasile Storage service 3 – Block 3

172 172

32 Erhan Marin IE 103 of 03/05/10

Erhan Marin Auto-service 11 – transport department

36 72 108

33 Bigga Food LLC 104 of 01/07/10

Rusu Ion Bottle production 2 – Block 2

820 820

TOTAL 14398.5 3441.5 17840

Brief description of enterprises:

Masfrigcom LLC – provides services of freezing equipment maintenance on the whole territory of the republic. Employees - about 20 people. For efficient use of the rented areas it partially constructed second floor. New areas are used as administrative premises, offices for technical staff, etc.; performed repair of the roof of the rented areas; installed gas pipe-line from the distribution block to production block 2; has autonomous gas heating.

Prodtehmet LLC – produces technological instruments and equipment. Employees - about 30 people; privatized a parcel of land on the territory and built a new production area. The rented equipment for production has been already redeemed.

Debut Gama LTD – produces and installs metal constructions of large size (tennis courts, mills, etc.). Employees - about 20 people. The rented equipment for production has been already redeemed.

Noi Bejenari IE – produces furniture for schools, kindergartens and by order. Employees - about 7 people. Purchased new equipment for furniture production. This enterprise rents only production areas.

Frigomas JSC – offers services of installation and maintenance of freezing equipment. Used equipment is purchased abroad, repaired and offered to companies in Moldova.

Service Frig LLC – also offers services of installation and maintenance of freezing equipment, but works with high-performance equipment. It has only 2 employees while installation services are performed by subcontracted staff.

Feralumin LLC – produces profiles for windows and doors. They invested about 3 mln. USD in the business development; purchased modern equipment, repaired roof, partially built second floor used for offices, etc.

Mob Elita LLC – produces furniture (Entourage). They purchased high-performance equipment for production; privatized a parcel of land on the territory. Invested in construction of an



annex to the rented area; repaired roof, floor, replaced doors and windows, installed autonomous heating.

Sărbătoarea nunţii LLC – offers services for conducting festivities (weddings, christening parties, etc.). They purchased equipment for the kitchen, furniture and tableware for servicing. Repaired the roof and performed capital repair of festival halls.

4.2.3.2. Buildings

„CAAN” JSC was created for lending production areas, equipment, etc. In order to carry out these activities the enterprise has created a number of conditions:

Areas were divided into three categories – production areas, non-production areas and areas for responsible storage.

Payment is calculated differently depending on the type of the area.

Presently areas are only partially rented (Table 17. Total area and area of rented premises)

Table 17. Total area and area of rented premises

Name of the building Total

area, m2

Number of

enterprises Rented area

m2 Share of

rented area

Rented production

area, m2

Share of rented production area

1 Production block No. 1 34 560 5 5 344 15% 5 179 15%



4 Sanitary block 5 760 4 1 977 34% 1 878 33%

5 Administrative block 11 840 1 1 746 15% 1 458 12%

6 Canteen 2 592 3 1 349 52% 1 115 43%

8 Control posts 16 16 100% 16 100%

9 Weighing scale 61 0% 0%

10 Garages 261 2 261 100% 216 83%

11 Transportation department 2 200 7 1 041 47% 876 40%

12 Compressor department 485 0% 0%

TOTAL 74 947 17 713 24% 14 271 19%

Although „CAAN” JSC was created for renting areas, the share of rented areas makes up only about 24%.

Moreover, rented production areas makes up only 19%, thus, use of the enterprise’s real estate at present is very reduced.

4.2.3.3. Equipment

According to the contracts, concluded with renting enterprises, they can also rent the available equipment. The annual sum of equipment rent makes up 10% of its residual value plus 20% VAT.



Enterprises can completely redeem this equipment at the residual price. The list of rented equipment is provided in Annex 2.

Having consolidated the information on equipment renting we can state that a reduced number of equipment is rented (the share of use by groups is reflected in the following table. Most requested are transport units and cranes (massive equipment being in a satisfactory working condition).

Table 18. Share of the equipment rented by the existing enterprises

No. Name of the group Number of units on

balance Number of rented

units %

1 Power machines and equipment 21 1 5%

2 Working machines and equipment 292 41 14%

3 Measuring, adjustment devices and facilities, and laboratory equipment

2 0 0%

4 Computing 7 0%

5 Other machines and equipment 0%

6 Transport units 45 9 20%

Conclusions:

At present the activity of 33 enterprises on territory of „CAAN” JSC according to the principles of industrial park is considered to be beneficiary for further use of this experience within the park.

Determination of the main directions of activity within the enterprises on the territory according to which it can be aimed at attracting potential resident enterprises: production and maintenance of freezing equipment, furniture production and auto and transport services and maintenance.

Existing experience of the enterprises on the territory referring to investments in real estate with a view to creating adequate working conditions for employees.

Incomplete use of production block No. 1, which is rented only at 17% mostly because of the unsatisfactory condition of the roof, too large production areas and absence of heating.

Incomplete use of production block No. 2, which is rented only at 43% because of the fact that non-production areas are rented (about 48%).

Incomplete use of administrative and sanitary blocks, which are rented at below 20% (mostly the first floor) and disuse of other floors.

The existing equipment (with the exception of cranes) cannot be considered as asset possible to be used by newly attracted enterprises.

4.2.4. Human resources and organizational structure

„CAAN” JSC was created for the use of production areas and equipment by means of their lease, organizational and legal support of renting enterprises and handling problems of general order (guarding, gas supply, access ways, etc.)

In order to perform these tasks, the following structure of the company was created:



Figure 19. Structure of „CAAN” JSC

4.2.4.1. Management and organizational structure

Executive management is performed by the Management Team headed by General Director (Manager). The enterprise has 32 employees, however, there is no well structured management team. Since the company is engaged only in renting spaces and equipment and some consulting activities, the structure of staff is corresponding – there are consultants in the field of: Construction, Equipment, Water-sewage systems.

The company management does not cover all the necessary functions – the positions of marketing and sales are totally absent.

Figure 20. Organizational structure of „CAAN” JSC

4.2.4.2. Structure of human resources

Analyzing human resources structure by age we can state the share of staff over 45 years old makes up about 80%.

Director

Deputy Director

Chief accountant

Staff Consultant

Accountant

Constructions

Consultant

Water-sewage

Consultant

Equipment

Consultant

Chief of guards

„CAAN” JSC

Company Board

Executive Body (Management of property complex)

„Elcoj-Plus”JSC – energy complex management

Lessee

Lessee Lessee



Table 19. Structure by age

Age group Number of people Share in the total staff

1 up to 35 years old 3 9%

2 35-45 years old 3 9%

3 45-55 years old 13 39%

4 over 55 years old 14 42%

Total 33 100%

As it has been said the organizational structure is uneven. The majority of staff (management and consultants) has been working for a considerable period of time, in other words they have advanced experience and sufficient knowledge, but they do not have adequate motivation.

Table 20. Structure of staff by education

Level of education Number of people Share in total staff

1 Higher education 6 18%

2 Vocational school 7 22%

3 Secondary education 20 60%

Total 33 100%

The number of employees is practically unchanged. In order to save financial means the company applies part-time working schedule for some categories of staff (depending on the need). In these cases people work only 4 hours a day.

Table 21. Dynamics of the number of employees and payroll (2008 - 9 months 2010)

Indices 2008 2009 2010 (9 months)

Average number of staff 32 33 32

Payroll 686 596 829 660 474 700

Monthly salary per employee 1 788 2095 1 688

Conclusions:

The presented data reflect the following situation:

Uneven distribution of positions and functions in the organizational structure, because of which it represented as unbalanced and unclear.

Absence of marketing and sales departments at the enterprise and, accordingly, absence of practice in the sphere.

Trend of the staff „aging” at the enterprise (average age of the staff is about 50 years old).

Insufficient material motivation of the staff (average monthly salary of up to 1700 MDL in 2010).

4.3. Commercial and marketing diagnosis

At the moment of the diagnostic analysis, there were no marketing and sales activities carried out in the enterprise actually. At the moment of „CAAN” JSC foundation, relevant information was placed in the Kompass information system, there was a number of TV shows on the national television (Mesager), however there is no activity of this kind now.

All promotion activities are nothing more than information which is spread by the people who are already working on the territory of the enterprise.



In such a situation we cannot count on a significant increase in the number of enterprises taking production areas on lease.

Figure 21. Evolution of revenues from leasing services

1083

14241570

1788

0

500

1000

1500

2000

2007 2008 2009 2010 estimat

Conclusions:

Since within the company there are practically no marketing activities and activities of promotion of its services, the following conclusions are proposed to be taken into consideration:

Sale of services is performed by means of personal promotion methods, due to long-term relations existing between „CAAN” JSC and its regular customers and which for the most part have been established and maintained by personal support of Director of „CAAN” JSC.

Nevertheless, the opportunity to attract potential residents to the park and to increase the number of enterprises on its territory will allow launching and using promotion and marketing activities within the company, including by involving the staff in the field.

4.4. Economic and financial diagnosis

4.4.1. Balance sheet analysis

The most important factor of a company’s activity is the property it has. This property is reflected in assets the enterprise has. Further on we will perform the analysis of the enterprise’s balance as a major factor in determination of financial stability. Financial analysis is performed for the period of 2005-2009, the overview of the balance for this period is presented below:

Table 22. Balance sheet of „CAAN”JSC , 2005 – 2009, MDL

Total Assets 2005 2006 2007 2008 2009

I. Long-Term Assets

Fixed Assets 25 519 715 25 181 840 24 816 349 24 583 727 24 435 986

tangible assets in progress 15 566 15 566 15 566 15 566 15 566

Long term financial investments 48 410 48 410 48 410 48 410 48 410

Total Long-Term Assets 25 583 691 25 245 816 24 880 325 24 647 703 24 499 962

II Short Term Assets

stocks of commodities and materials 736 070 729 545 697 243 689 338 667 978

Short-term receivables 618 396 495 511 551 432 682 719 694 047

Short term financial investments 0 0 0 0 0

financial resources 24 838 15 469 57 040 150 985 11 252

Other short term assets 348 6 336 4 241 8 178 4 774

Total Short Term Assets 1 379 652 1 246 861 1 309 956 1 531 220 1 378 051

Total Assets 26 963 343 26 492 677 26 190 281 26 178 923 25 878 013

Total Liabilities 2005 2006 2007 2008 2009

III. Equity

authorized capital 30 510 836 30 510 836 30 510 836 30 510 836 30 510 836

retained earnings 0 0 0 0 0

foreca

st



additional capital 0 0 0 0 0

Reserves 368 820 368 820 368 820 368 820 368 820

net profit of the accounting period) -4 532 599 -4 856 098 -4 809 669 -4 808 394 -5 124 384

Total Equity 26 347 057 26 023 558 26 069 987 26 071 262 25 755 272

IV Long Term Debt

long-term bank loans 0 0 0 0 0

Total Long Term Debt 0 0 0 0 0

V Short Term Debt

Short-term commercial debts 0 0 0 0 0

Short term loans 616 286 469 119 120 294 107 661 122 741

debt to founders and other participants 0 0 0 0 0

Other 0 0 0 0 0

Total Short Term Debt 616 286 469 119 120 294 107 661 122 741

Total Liabilities 26 963 343 26 492 677 26 190 281 26 178 923 25 878 013

Assets analysis. Analysis of the enterprise’s assets shows the value of assets in the amount of 25 878 013 MDL at the end of 2009, 1 085 330 MDL or 4% less as compared to the end of 2005 and 300 910 MDL (1%) less as compared to the end of 2008. This factor shows a dynamic development of the enterprise’s activities. The structure of assets in this period did not undergo significant changes, showing an insignificant decrease in long-term assets in relative terms - from 94.9% on 31.12.2005 to 94.7% (relative decrease by 0.02%) at the end of 2009. This decrease in long-term assets is compensated by the increase of relative share of current assets by 0.02% during the analyzed period, from 5.1% in 2005 to 5.3% in total assets in 2009. From financial point of view, there is a certain stagnation in the activity indicating that the enterprise, although having important assets, cannot develop its activity with positive development trend.

From the point of view of long-term assets structure, it is observed that the main components are:

Fixed assets (99.7%); Long-term investments (0.2%); Long-term assets in the course of execution (0.1%). As we can see, the main component of the balance sheet assets is specified by fixed assets of the enterprise which at the end of 2009 made up 87 607 660 MDL, with depreciation level of 72% or accumulated depreciation of 63 171 674 MDL. The structure of fixed

assets include: buildings (71.6%) with the most important book value (over 52% of building value) of block 1; special constructions (11.5%); transmission constructions (9.1%), machines and equipment (6%), transport units (1.8%). As it is seen, ”CAAN” JSC being a company dealing with assets lending, has a specific structure of balance, having important buildings (most of them, under current conditions, being in the last decade of depreciation calculation) which are rented to contracted enterprises. At the same time the enterprise also has a range of specific equipment as well as transport units, but their value is minimal either as a result of calculated depreciation or because they are completely depreciated, if not from physical point of view, then from moral one point of view.

Short-term assets at the end of 2009 made up 1 378 051 MDL which is by 153 168 MDL (1%) less as compared to 2005 and 0.1% as compared to 2008. In the structure of short-term assets at the end of 2009 prevailing positions refer to: short-term liabilities (50.4%); goods and raw materials stocks (48.4%); monetary funds (0.8%).

An insignificant value of current assets is due to the enterprise’s specific activity, while most liabilities are predominantly due to calculated rental rates, whose term of payment has not come yet, or liabilities resulting from the current rent debts of the lessees.

Analysis of liabilities. The enterprise’s liabilities represent the source of assets funding represented in the balance sheet by own and borrowed sources. Further on we will analyze changes in liabilities registered in the analyzed period of 2005-2009.



Table 23. Dynamics of the balance sheet

1/1/ 2006

1/1/2007 1/1/2008 1/1/2009 1/1/2010

lei % lei % lei % lei %

I. Long-Term Assets Intangible assets - 0 - 0 - 0 - 0 -

Fixed Assets - -337 875 -1% -365 491 -1% -232 622 -1% -147 741 -1%

tangible assets in progress - 0% 0% 0% 0%

Long term financial investments

- 0% 0% 0% 0%

Total Long-Term Assets - -337 875 -1% -365 491 -1% -232 622 -1% -147 741 -1%

II. Short Term Assets

stocks of commodities and materials

- -6 525 -1% -32 302 -4% -7 905 -1% -21 360 -3%

Raw materials - -121 -0% -27 482 -11% -7 204 -3% -3 278 -2%

Finished products and goods for sale

- -6 404 -1% -4 820 -1% -701 -0% -18 082 -4%

Short-term receivables - -122 885 -20% 55 921 +11% 131 287 +24% 11 328 +2%

Commercial debts - -174 603 -56% 34 882 +26% 47 255 +28% -45 279 -21%

financial resources - -9 369 -38% 41 571 +269% 93 945 +165% -139 733 -93%

Other short term assets - 5 988 +1 721% -2 095 -33% 3 937 +93% -3 404 -42%

Total Short Term Assets - -132 791 -10% 63 095 +5% 221 264 +17% -153 169 -10%

BALANCE - -470 666 -2% -302 396 -1% -11 358 -0% -300 910 -1%

III. Equity

authorized capital - 0% 0% 0% 0%

Reserves - 0% 0% 0% 0%

Authorzed Reserves - 0% 0% 0% 0%

retained earnings - -323 499 +7% 46 429 -1% 1 275 -0% -315 990 +7%

Total Equity - -323 499 -1% 46 429 +0% 1 275 +0% -315 990 -1%

IV. Long Term Debt

long-term bank loans - - - - -

Other Long Term Debt - - - - -

Total Long Term Debt - - - - -

V. Short Term Debt

- - - - -

Calculated debts, inclusiv - -147 395 -24% -350 586 -75% -13 994 -12% 16 428 +16%

trade invoices receivables - -103 367 -50% -97 562 -94% -1 879 -32% 300 +8%

staff receivables - 6 557 +29% 12 972 +44% 2 125 +5% 8 126 +18%

receivables on extra budget settlements

- -57 502 -15% -273 906 -86% 7 048 +16% -13 091 -25%

Other loans - 6 917 +67% 7 910 +46% -21 288 -85% 21 093 +541%

Other short Term Debt - 228 - 1 761 +772% 1 361 +68% -1 348 -40%

Total Short Term Debt - -147 167 -24% -348 825 -74% -12 633 -11% 15 080 +14%

BALANCE - -470 666 -302 396 -1% -11 358 -0% -300 910 -1%

Own capital is of great importance in funding the enterprise’s assets, at the end of 2009 its share exceeded 99.5% making up the amount of 25 755 272 MDL.

As compared to the previous years in terms of absolute values of own capital the decrease by 591 785 MDL or 2% as compared to 2005, and decrease of 315 990 MDL or 1% as compared to 2008 is observed. From the point of view of share in total sources of funding, an increase by 1.8%, from 97.7% in 2005 to 99.5% at the end of 2009 is observed. Increased share of own capitals correlated with the share proportionally to fixed assets shows that financing of the enterprise’s activity is made according to generally accepted economic principles – long-term assets from long-term financial resources.

An essential part of own capital is due to authorized capital distributed in the form of shares, the value of which has remained unchanged during the whole analyzed period – 30 510 836 MDL.

Increased depreciation of fixed assets and need of significant expenses for their maintenance entails an identification of losses from the performed activity, the fact for which at the end of 2009 uncovered losses for the previous year made up - 5 124 384 MDL, respectively an increase in losses by 591 485 MDL or 13% increase as compared to the end of 2005.



Part of debt capitals consists exclusively of short-term debts which at the end of 2009 made up 122 741 MDL, including:

Debts to the staff (44%)

Debts to the budget (33%).

Insurance debts (21%).

From the point of view of dynamics, short-term debts show a significant decrease, by 80% within 5 analyzed years, from 439 545 MDL in 2005 to 122 741 MDL at the end of 2009, correspondingly an increase by 15 080 MDL or 14% increase as compared to the end of 2008.

4.4.2. Analysis of financial results

Evolution of financial results of ”CAAN” JSC within the analyzed period is marked by occurrence of the global financial crisis which has contributed to the registration of financial stability in the recent period (2008-2009).

Figure 22. Dynamics of the financial results, MDL

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

VV 948 644 1 284 023 1 574 424 1 967 045 1 966 966

CV 728 168 890 732 1 005 948 1 074 045 927 912

P.Brut 220 476 393 291 568 476 893 000 1 039 054

2005 2006 2007 2008 2009

In the course of the analyzed 5 years (2005-2009) it was observed that the sales revenues increased more than twice, from 949 thousand MDL in 2005 to 1 967 thousand MDL at the end of 2009, representing a beneficial factor for the enterprise’s activity. A favourable aspect of this positive dynamics is due to a slower dynamics of costs of sales which during 2005-2008 increased from 728 thousand MDL to 1 074 thousand MDL, a 1.47 times increase, leading subsequently to its decrease to the amount of 923 thousand MDL during 2009, an decrease by 146 133 MDL or 13.6% decrease as compared to 2009. Decrease in the cost of sales is explained not by a better effectiveness of the enterprise management but by transition of some categories of expenses to the category of „General and administrative expenses”, the fact that leads to the initial increase in gross profit, however, eventually the net result of the enterprise may have different dynamics.

The above listed premises have directly contributed to the obvious increase of the enterprise’s gross profit from 221 thousand MDL in 2005 to 1 039 thousand MDL at the end of 2009 (Figure 22. Dynamics of the financial results, ), indicating a 4.7 times increase during 5 analyzed years.

It should be mentioned that revenues of „CAAN” JSC within the analyzed period are reflected by incomes obtained from the lease of available fixed assets, mainly real estate and production equipment. Since the rental price for production equipment is calculated as 10% of the residual value plus VAT, and residual value is very low as a result of accumulated depreciation and obsolescence, much of incomes are obtained from the lease of the available real estate.

A small reflection of the sales revenue for lessees demonstrates that within 2008 they produced goods and provided services in the total amount of 25 mln. MDL, with sales for about 24 mln. MDL; during

Net sales

Cost of sales

Gross profit



2009 the volumes of production and sales significantly decreased to the amount of 12 ml MDL, and during first 9 months of 2010 this dynamics continued – sales making up a little higher than 3.6 mln. MDL. These aspects demonstrate an acute shortage of demand, of investments made and for a dynamic development it is necessary to create conditions more favourable for their activity.

The dynamics of the total financial results within 2005-2009 is reflected in the table below:

Table 24. Profit and loss account, MDL

Indicatorii 2005 2006 2007 2008 2009

Net Sales 948 644 1 284 023 1 574 424 1 967 045 1 966 966

Cost of sales 728 168 890 732 1 005 948 1 074 045 927 912

Gross profit (total loss) 220 476 393 291 568 476 893 000 1 039 054

Other operational income 59 758 75 010 117 504 91 524 15 874

Commercial expenses

General and administrative expenses 748 623 840 504 958 226 1 096 937 1 412 525

Other operating expenses 30 346 18 952 34 014 24 612 3 288

Result from operating activities: Profit (loss) -498 735 -391 155 -306 260 -137 025 -360 885

Result from investing activities: Profit (loss) 465 920 65 519 22 081 138 300 29 904

Result from financing activities: Profit (loss) -170 2 137 43 494

Result from financial and economic activities: Profit (loss) -32 985 -323 499 -240 685 1 275 -330 981

Exceptional result: profit (loss) 287 114

Profit (loss) before tax -32 985 -323 499 46 429 1 275 -330 981

Expenes (savings from) on income tax

Net profit (net loss) -32 985 -323 499 46 429 1 275 -330 981

By the categories of expenses we can see a positive dynamics and in continuation – growth of general and administrative expenses which increased 1.9 times more from 749 thousand MDL in 2005 to 1413 thousand MDL at the end of 2009, respectively an increase by 315 588 MDL or 28.7% only in the last period (2008-2009). The dynamics of growth is due to the fact that available real estate and equipment of the company are depreciated, expenses for administrative staff and production areas maintenance are quite considerable, and without a re-evaluation of available assets and launch of new investment projects (such as industrial park creation), the activity of ”CAAN” JSC will support continuously growing administrative expenses.

Other operational expenses make up an insignificant share in the total expenses borne by the company, and their decrease during the analyzed period prove that all the company’s expenses are administrative ones.

Less favourable aspect of the activity of „CAAN” JSC is the fact that registration of increasingly high administrative expenses results in the registration of losses from the operational activity of the enterprise, losses which during 2005-2009 varied within 137 025 - 498 735 MDL, 2008 being the most favourable year, but whose positive effects were clouded by the global financial crisis.

All these previously reflected causes contributed to a registration of an unstable dynamics of the total financial result. If in 2005 losses made up 32 985 MDL, being significantly decreased on account of sales of the available assets (particularly equipment), so, absence of essential revenues from sales of the available assets led to their increase up to the amount of 323 thousand MDL in 2006, so that consequently, on account of extraordinary revenues obtained by the state, 2007 to be finished with a net profit of 46 mln. MDL. The positive dynamics was also maintained in 2008, but the financial economic crisis which essentially decreased possibilities of enterprises to rent fixed assets determined also the negative result in the amount of 331 thousand MDL.



Evolution of the financial results of „CAAN” JSC proves that without a restructuring and a reorientation of the activity, „CAAN” JSC cannot become a profitable company.

4.4.3. Analysis on the basis of financial indices

4.4.3.1. Liquidity ratios

Liquidity is an important factor in the activity of an enterprise for fulfilling current liabilities. Further on we will analyze liquidity ratios presented in the table below.

Table 25. Analysis of liquidity ratios of the enterprise

01.01.2006 01.01.2007 01.01.2008 01.01.2009 01.01.2010

General Liquidity 2,24 2,66 10,89 14,22 11,23

Current Liquidity 1,04 1,09 5,06 7,74 5,75

Immediate liquidity 0,04 0,03 0,47 1,40 0,09

Net Working capital 763 366 777 742 1 189 662 1 423 559 1 255 310

General Liquidity change - 0,42 8,23 3,33 -3,00

Influence of invested equity - -0,52 0,10 0,01 -2,94

Influence of fixed assets - 0,55 0,78 1,93 1,37

Influence of current liabilities - 0,40 7,35 1,39 -1,43

Coverage ratio of current cash payments 6,1 2,7 13,0 24,1 1,9

Total liquidity reflects possibility of the current assets belonging to the enterprise to be quickly transformed into liquidities necessary to satisfy due payment obligations. At the end of the analyzed period the value of the total liquidity ratio of the enterprise makes up 11,23, being over the recommended value. Also Figure 23. Dynamics of liquidity ratios of „CAAN”JSC proves a positive dynamics of this ratio, increased from 2,24 to 11,23 or more than in 5 times.

Figure 23. Dynamics of liquidity ratios of „CAAN” JSC

0,00

2,00

4,00

6,00

8,00

10,00

12,00

14,00

16,00

01.01.2006 01.01.2007 01.01.2008 01.01.2009 01.01.2010

Coeficientul lichdităţii generale (CR) Coeficientul lichidităţii curente (QR) Coeficientul lichidităţii absolute

The intermediary liquidity ratio reflects the enterprise’s capacity to pay short-term debts without the need to sell out trading stocks and materials. According to the practice, recommended value is between 0.7-1. For the analyzed enterprise the given ratio is much above the recommended ratio (7.74 in 2008 and 5.75 in 2009).

Working capital in this period also shows an important increase from 763 thousand MDL in 2005 to 1 424 in 2008 so that its value during 2009 to be decreased to 1 255 thousand MDL. From the presented data we see 2 important aspects which should be mentioned: from the point of view of security and financial stability „CAAN” JSC can at anytime meet obligations of immediate payment, with the liquidation ratios confirming it; on the other hand, the net values registered above the recommended minimum indicate the fact that available means of the company are not re-invested, while their maintenance only diminishes the company’s possibility to generate profit.

General Liquidity Current Liquidity Immediate Liquidity



The most important aspect of the analysis of liquidity ratios is the fact that their maintenance at rather high level is not because of the availability of cash resources but due to the absence of current debts, the enterprise timely paying off all payment obligations. Moreover, a large part of current assets represents the sums owed by lessees, the sums which are calculated but efficiently paid during the immediately following period.

4.4.3.2. Profitability ratios

Profitability represents the capacity of an enterprise to perform sales which exceed costs for their generation, activity costs. The set of relevant ratios describing the enterprise’s situation regarding efficiency is presented in Table 26. Return ratios.

Table 26. Return ratios

Denumirea poziţiilor u.m. 01.01.2006 01.01.2007 01.01.2008 01.01.2009 01.01.2010

Return on assets % 0% -1% 0% 0% -1%

Return on Equity % 0% -1% 0% 0% -1%

Return on stock Equity % 0% -1% 0% 0% -1%

Return on fixed assets % 0% -1% 0% 0% -1%

Return on current assets % -2% -25% 4% 0% -23%

Influence of Return on Equity ori 0,00 -0,01 0,01 0,00 -0,01

Influence of changes in turnover rate ori 0,00 0,00 0,00 0,00 0,00

Influence of changes of ROS ori 0,00 -0,01 0,02 0,00 -0,01

Influence of changes in sources of finance ori 0,00 0,00 0,00 0,00 0,00

Since the global financial result of the enterprise is reflected by losses of the management period, from the point of view of profitability, this situation seems to be rather difficult for „CAAN” JSC. The data reflected in the above table, negative ones from the point of view of represented figures again prove the need for the enterprise’s restructuring and its orientation on investment projects which can attract investors able to increase the value of the available fixed assets and can generate favourable final financial result.

Since the company’s assets slightly exceed the value of 25 mln. MDL, achievement of favourable financial results is the main goal of the activity of „CAAN” JSC.

4.4.3.3. Ratios of financial stability

Analysis of financial stability of „CAAN”JSC during the analyzed period shows a positively growing trend. This fact is proved by the analyzed ratios in the following table.

Table 27. Ratios of financial stability


Net assdets value lei 26 347 057 26 023 558 26 069 987 26 071 262 25 755 272

Autonomy ratio ori 42,75 55,47 216,72 242,16 209,83

Solvency ratio ori 0,98 0,98 1,00 1,00 1,00

Financial independence ratio ori 0,03 0,03 0,05 0,05 0,05

Share of own sources of current assets % 55% 62% 91% 93% 91%

Share of own sources of stock ori 3,07 3,13 5,39 6,66 5,97

Immobilization ratio ori 18,54 20,25 18,99 16,10 17,78

Share of own sources of fixed assets ori 1,03 1,03 1,05 1,06 1,05

Self financing ratio % - - 100% 100% -

Mobilization of invested capital ori - - 8,87 183,45 -

Mobilization of accumulated capital ori - - 8,87 183,45 -

Altman "Z" ratio ori - 0,50 0,53 0,58 0,54

Assets mobilization ratio ori 0,05 0,05 0,05 0,06 0,05



ROA ori - -0,02 -0,01 -0,01 -0,01

Internal financial ratio ori -0,15 -0,17 -0,17 -0,17 -0,18

Share of stakeholders capital in total liabilities ori 1,13 1,15 1,16 1,17 1,18

Total assets turnover ori 0,04 0,05 0,06 0,08 0,08

Financial stability shows the degree of the enterprise’s dependence on the external financial sources and characterizes its capacity to fulfil current obligations.

The most important ratios characterizing this state is Autonomy Ratio. During the analyzed period the value of this ratio is continuously growing from 42.75 in 2005 to 209.83 in 2009 – the fact demonstrating persistent financial stability.

As well as the Autonomy Ratio, other ratios presented in the Table 27. Ratios of financial stability show positive and growing values, the fact characterizing financial stability of the enterprise at the end of the analyzed period.

The analysis of bankruptcy risk by means of Altman ratio for the analyzed enterprise shows the value of 0.54, which is below the level of 2.675 (when the enterprise is considered to be out of bankruptcy risk). The ratio value is determined by the negative return on assets, negative level of self-financing, reduced level of assets mobilization.

It should be mentioned that „CAAN” JSC has a very high level of financial stability. One of the indices reflecting this statement is provided by the coefficient of total payment capacity which is equivalent to the unit value – the explanation resulting from this is materialized in the fact that the enterprise’s assets are exclusively financed from its own sources of financing which, in the end, have the increased cost. In this sense, the share of own sources of financing is over 91% at the end of 2009 as compared to 55% in 2005 and 93% in 2008.

4.4.3.4. Analysis of rate of turnover

Analysis of the rate of turnover allows analyzing the efficiency of management of the enterprise’s assets and liabilities, which directly affects its financial situation. The turnover ratios in the analyzed period are presented in Table 28.

Table 28. Turnover ratios


Total assets turnover ori 0,04 0,05 0,06 0,08 0,08

Total assets turnover period zile 10 232 7 494 6 023 4 792 4 764

Fixed assets turnover ori 0,04 0,05 0,06 0,08 0,08

Fixed assets turnover period zile 9 709 7 126 5 731 4 532 4 498

Depreciation index % 71% 71% 72% 72% 72%

Current assets turnover ori 0,69 0,98 1,23 1,38 1,35

Current assets turnover period zile 524 368 292 260 266

Net cycle

Inventory turnover zile 94,3 69,6 53,6 39,8 38,8

Turnover period of finished goods zile 185,1 135,8 109,5 87,1 85,4

Turnover period of accounts receivable zile 118,0 62,7 35,2 35,7 35,9

Other assets turnover zile 116,8 94,4 85,7 78,4 91,3

Cost cycle zile 514,1 362,5 284,0 241,0 251,4

Turnover period of accounts payable zile 78,5 43,5 12,5 0,9 0,7

Deffered taxes & wages turnover period zile 151,5 104,8 49,8 16,8 17,2

Other current liabilities turnover period zile 3,9 3,9 5,1 3,1 3,1

Credit cycle zile 233,9 152,2 67,4 20,9 21,1

Net cycle zile 280,3 210,4 216,6 220,1 230,3

TURNOVER TO THE SPECIAL BASES

Inventory turnover zile 265,9 125,3 - 281,5 -

Turnover period of work in progress zile 0,0 0,0 0,0 0,0 0,0

Turnover period of finished goods zile 118,9 100,7 87,8 78,9 71,8



(inventory)

Turnover period of accounts receivable zile 118,0 62,7 35,2 35,7 35,9

Other current assets turnover period zile 49,8 70,0 68,7 71,0 76,7

Turnover period of accounts payable zile 68,6 35,9 20,7 1,3 1,3

Deferred taxes & wages turnover period zile 97,3 65,1 48,8 14,6 16,1

Other current liabilities turnover period zile 2,5 2,9 4,1 2,9 2,6

Rate of turnover of Total Assets at the end of 2009 shows the value of 0.08 which corresponds to a turnover period of 4 764, a more than double increase in the rate of turnover, accordingly a decrease of the period over 2.1 times. Slow dynamics of total assets renewal is due to the fact that the enterprise has important assets, but obtained revenues are too small to provide an added value from their use.

For the current assets the rate of turnover is 1.35 which corresponds to 266 days. This value has increased more than twice during 5 years of activity. Small values here are specific to a company whose activity is directed at leasing long-term assets.

Since the enterprise’s assets are mostly composed of long-term assets, the turnover ratios of current assets will have high net values, which analyzed separately, could indicate an efficient activity. However, from general point of view, these indices do not reflect the real situation because of correlation with the turnover ratios of long-tem assets, it can be observed that the company’s revenues are not sufficient to maintain the positive dynamics and ensure sustainable development.

4.4.3.5. Profitability analysis

Analysis of the profitability of the enterprise’s activity for the analyzed period of 2005-2009 shows the situation fluctuating from period to period.

Table 29. Profitability ratios


Return on Sales % -56% -35% -25% -10% -19%

Return on sales % -3% -25% 3% 0% -17%

Return On Direct Costs % -36% -26% -20% -9% -16%

Return On General Expenses % 0% 0% 0% 0% 0%

Return On Total Costs % -36% -26% -20% -9% -16%

Gross margin lei -528 147 -447 213 -389 750 -203 937 -373 471

Price index % -56% -35% -25% -10% -19%

Operational leverage % 1,0% 1,0% 1,0% 1,0% 1,0%

In terms of profitability, the situation of „CAAN” JSC is also not so favourable. In this sense, registration of losses from the performed activity proves inability of the enterprise’s management to profitably manage the activity and generate financial resources able to ensure a sustainable development of activities.

Conclusions:

At the end of this point we make a conclusion that having an important complex of fixed assets, although used, ”CAAN” JSC initially has favourable premises from the point of view of its transformation into industrial park, which will consequently allow for an essential increase in their value, since the industrial park will offer the facilities for the residents that will be operating on the territory. At the same time, an essential share of own means determine a high level of the company’s stability and high security before potential creditors or investors, certainly correlated with the high risks from the point of view of financial efficiency.

At the same time, it should be noted, gross profit increase rate during 5 analyzed years, which, however, has no major impact on the global result of the management period and which is mostly not because of a better efficiency of the enterprise’s management but due to transition of expenses to the category of „General and administrative expenses”, which caused by its increased share, conditions continuous losses of management activities per total.

Analyzed in terms of financial indicators, „CAAN” JSC shows beneficial situation regarding liquidity, the high level of which, in total, would offer increased opportunities of the company's management,



however, in terms of investments, a too high liquidity leads to the premise of a less favourable management from the point of view of revenue production. A quite difficult situation is reflected in profitability ratios, the negative value of which again confirms the need for the company to be restructured and oriented at investment projects which can attract the investors able to increase the value of the available fixed assets and can generate a favourable final financial result. Moreover, the ratios reflect persistent bankruptcy risk within the whole analyzed period, determined by negative return on assets, negative level of self-financing, reduced level of asset mobilization. Against this background the positive point consists only in the total capacity of the enterprise assets’ payment, which are exclusively financed from own sources of financing.

A general conclusion regarding the general financial situation of the company refers to the fact that the constraints on the basis of which the enterprise’s management operates are not because of the lack of their knowledge but due to the fact that real estate and equipment of „CAAN” JSC has a high level of depreciation and obsolescence, resulting in a lower attractiveness for investment activities and, thus, is likely to generate relatively lower revenues. At the same time, the lack of public utilities such as sewage, heating system, significantly reduces the investment attractiveness, while in the course of total economic crisis, short-term benefits from the use of real estate and used production equipment cannot be achieved.

In order to ensure optimal profitability conditions and create premises for viable development it is required to redirect the activity of „CAAN” JSC by creating the industrial park which would allow combining production activities with increased possibilities to invest and attract foreign investments. Thus, the enterprise will be able to cover the expenses due to involvement of this flow of investments from outside and possibilities to create optimal conditions for activity of all the enterprises existing on the territory of „CAAN” JSC. Available real estate and equipment, if are renovated, could be used in various activities, and owing to this, the enterprise will be able to receive an added value to be used for creation of new development premises – which in the end will result in profit generation .

4.5. SWOT Analysis

STRENGTHS

Location near Chisinau municipality Availability of large production areas Experience in operating according to the principles of an

industrial park and General Director familiarized with the concept of industrial parks

Easy access ways (motor and railroad) Possible connection to public utilities Free working site Land does not require change of destination Land adjacent to constructions is provided for use for an

unlimited period of time Rich experience of the staff in technical, legal and accounting

fields Practice of experience sharing among enterprises on the territory Availability of free adjacent area being in public property which

can be use for expansion of the park area up to 28 ha.

WEAKNESSES Infrastructure is poorly developed Buildings require capital repair and renovation Insufficient financial resources Uneven organizational structure and lack of the

staff qualified in the field of marketing Adjacent areas, the property of local public

administration Energy complex management is through the

intermediary – “Elcoj Plus”LLC Salaries are low, the fact which has negative effect

on motivation and recruitment of highly qualified staff

Absence of policies and practices of management, development and assessment of human resources

Absence of information system

OPPORTUNITIES

Creation of the basis for development of refrigeration industry and completing value chain with necessary activities

Creation of support for farmers in preserving fruit and vegetables crop

Granting of the title of industrial park will eliminate the reason for which Mayor’s Office of Straseni initiated disputes regarding payment and parameters of the area adjacent to the company’s real estate (Economic Court)

Free assignment or transfer in gratuitous use of the property owned by the state to managing enterprise for creation and development of industrial park by the decision of its owner according to the Law on administration and denationalization of private property (only in case of fulfillment of the provisions of art. 12 (2) of Law No. 182 of 15.07.2010 on industrial parks)

The right to privatize the property owned by the state adjacent to constructions at normative land price set at the moment of its transfer in use to the managing enterprise or under lease to the residents of the industrial park, only after purchasing and/or

THREATS

Risk not to find sufficient financial resources (not to find potential investors)

Risk of insufficient use of the available areas

Disputes – Mayor’s Office of Straseni regarding payment and parameters of the area adjacent to the company’s real estate (Economic Court)



commission of the constructions and facilities with industrial and related destination, according to the Law on normative price and procedure of land purchase and sale (after fulfillment of the provisions of art.12, p.1, letter c of Law No.182 of 15.07.2010 on industrial parks)

Granting of tax exemptions according to the Tax Code Application of the reduction coefficient of up to 0.3 to tariff on

land rent payment by the managing enterprise Possibility to create the park with private-public partnership

principles Optimization of state controls over the residents’ activity by

establishing planned controls approved by Government Decision and unforeseen controls performed with consent of the Ministry of Economy

5. SCENARIOS OF THE INDUSTRIAL PARK DEVELOPMENT

5.1. Determining the scenario for the industrial park development

The industrial park creation is conditioned by the need of industrial development of economy able to bring about optimization of production costs, obtaining quality and competitive products on the sale market, etc., while acceleration of investment processes in the country represents an adjacent effect.

Basic missions of the industrial park will be to create added value for its residents with direct effects

on the socio-economic environment. The industrial park as a model of functioning will suppose

creation of advantages for its residents.

An important factor for the industrial park creation is also availability of a prior unused area planned for the enterprise development by means of extension. In case of the park creation the area can be privatized according to the Law on industrial parks (No. 182 of 15.07.2010).

Figure 24. The scheme of location of „CAAN” JSC and the area proposed for the development

In case of industrial park creation it is possible to benefit from the facilities, stipulated in the legislation for both participating enterprises and newly attracted enterprises which will also benefit from the support on the part of the industrial park’s administration.

Territory for

development in

prospect

“CAAN”

JSC

STRASENI



Taking into account the fact that „CAAN” JSC has been already operating as a non-formal industrial park, this situation has been taken into consideration when choosing the optimal scenario of the industrial park creation.

Scenario 1.

Industrial park is created according to the existing concept: enterprises may have any type of activity, new types of activities of newly attracted enterprises may also appear.

Managing enterprise (owner) invests in the park infrastructure and in capital repair of the buildings to eliminate drawbacks revealed within the study.

Creation of a modern infrastructure and adequate activity conditions for resident enterprises will allow for the rent price to increase about two times.

Completing the management team with marketing and sales departments and performing an efficient promotion of the industrial park will allow for an increase in the number of enterprises operating within the industrial park and the use of all available areas.

These two components will increase the revenues from renting spaces from about 2 mln. MDL annually, obtained within recent years up to about 20 mln. MDL annually (provided that all the available areas are used).

Scenario 2.

This scenario will suppose creation of the industrial park with the existing activities, new activities on the part of the resident enterprises and the activity, related to construction and lease of freezing equipment by the managing enterprise.

In this context it is proposed to construct a modern refrigerator for fruit and vegetable storage and a packing house. The refrigerator will be placed in production block No.1, planned square -14.4 thousand m2. In the same block there will be the packing house with the area of 10.0 thousand m2. Together they will make up a modern logistics centre, providing an efficient support to farmers in storing, preserving and selling fruit, vegetable, berry, grape products etc. At the same time refrigerating areas can be offered for lease to other interested economic entities.

In this case investments will be related not only to infrastructure and capital repair but also to construction and equipping the logistic centre.

According to the scenario 2, sources of incomes for the owner will result from both activities: lease of areas (with investments and provisions from the scenario 1) and activity of new production.

At the same time, the enterprises existing on the territory keep their areas and their activity’s profile, while potential residents can have activities from the refrigerating branch as well as other industrial activities and services rendering.

Scenario 3.

The industrial park is created according to the type of development of the regional cluster.

Creation of the industrial park for the regional cluster supposes the concentration of activities on the whole line of value chain within a single sphere: production, installation and maintenance of freezing equipment. It will include the activities: raw material processing, production itself, installation, maintenance and repair of the equipment, research-innovation and training of specialists in the field.

Taking into account the fact that in the past the enterprise was intended for the production of such kind of equipment, the scenario is quite attractive. However, at present, there are no companies which produce freezing equipment, activities are limited to repair and adjustment to the local conditions of the corresponding used equipment brought from Europe as well as installation and maintenance of new modern equipment.

With a view to consolidating these activities it is necessary to invest in the creation of a company on assembling modern freezing equipment on the territory of the enterprise and its sales both on the



territory of Moldova and in neighboring countries, such as Ukraine, Russia, etc. This assembly line can be installed in Block 1.

Enterprises which are not related to the selected profile can continue to operate on the territory of „CAAN” JSC in case if they are not situated on the territories intended for the cluster. Otherwise they can be placed on other areas available on the territory or removed from within the industrial park.

Within the park, business infrastructure as well as favorable model of cooperation among the residents will be created. Thus, the principle of industrial clusters will work within the industrial park. The initiative of their development represents a new way of organizing efforts for economic development which are not limited to the traditional efforts of business costs reduction and general business environment improvement. At the same time, the residents of the industrial park will be also involved in the model of the clusters functioning. The efforts which are concentrated on the conglomerate will attract an interest and a broader involvement on the part of the involved companies.

Besides, with the business diversity which will be developed on the territory of the industrial park, it is useful to create a business incubator for the benefit of all interested residents.

Business incubator is a structure specialized on the creation of favorable, sustainable environment for emerging and efficient activity of innovative small and medium enterprises with development potential which implements original technical ideas.

The main goal of the business incubator is efficient support for those planning creation of own business especially at the initial stage. Entrepreneur can be completely concentrated on the business idea, since all the problems related to business maintenance are supported by the incubator. This also allows for considerable decrease in business administrative costs.

The positive result is the creation of new jobs within the business incubator and efficient development of innovative industries.

Who can participate in the incubator: the enterprise which may request incubation should meet some principal common conditions: to be a new and/or innovative business, to be a private enterprise which has been carrying out a new and/or innovative production activity for less than 2 years, to be an enterprise developing a technology transfer, businesses, accordingly enterprises, contributing to local, regional or national development, to create new jobs, to have financial capacity to pay for the requested services.

For efficient development and operation of residents of the industrial park regardless of the applied scenario, it is proposed to authorize within the park a customs control zone for the clearance of imported/exported goods both by road and rail transport which can represent an opportunity for business environment of Centre region of the Republic of Moldova. In this sense, „CAAN” JSC is ready, on the basis of existing properties, to create a logistics centre with the areas intended for store-houses and offices for offering of the whole set of customs services (customs stations, customs brokers, auxiliary services, branches (representations) of banks, which will serve economic entities (temporary storage warehouses, storehouses) and which is equipped with the mechanism of goods charging-discharging both at railroad and from trucks.

In order to compare the scenarios described above it is proposed to take into account a number of criteria which we consider to be important for the choice of optimal frameworks of carrying out of activities in the planned industrial park, which are the following:

Resources (local raw material resources, productive capacity, equipment and technologies, infrastructure and facilities, staff qualification, organizational system)

Market (industries planned in the region and on the Republican level, export potential of the planned industries)

Related industries (suppliers and industries interacting with the planned industry within the park)



Competition (competitors in the region)

Effects (the impact of reorganization upon the enterprises existing on the territory, general impact upon the region).

Comparison of the scenarios according to the selected criteria is shown in Table 30. Comparison of activity scenarios of the industrial park .

Table 30. Comparison of activity scenarios of the industrial park

Criterion Scenario 1 Scenario 2 Scenario 3

Cluster

Resources

Existing productive capacities.

Appropriate technologies existing on the territory.

Different types of services existing on the territory.

High and diverse qualification, rich experience of the staff of existing enterprises

Presence of cooperation relations among the park’s enterprises.

Availability of access ways for transport (motor and rail)

Availability of spaces for production, storage.

Possibility of technical support at the moment of creation of new enterprises

Points from scenario 1 are valid.

Availability of spaces for creation of the mentioned businesses (refrigerator and packing house).


Vast technical support for the newly created enterprise.

Existing suppliers for modern freezing equipment.

Appropriate (and in some cases modern) technologies existing on the territory.

Maintenance of the areas rented to the enterprises already existing on the territory, which carry out diverse activities, including those referred to refrigerating sphere


Close relations with producers of modern freezing equipment from Europe.

Suppliers with whom the activity in the field of freezing equipment is already being carried out

Possibility to use modern production technologies (assembly) on the territory.


High and diverse qualification, rich experience of the staff of enterprises existing on the territory that serves and repairs freezing equipment and is less experienced in its production.

Market

Potential for sales in the region as well as in other localities of the republic, especially in Chisinau, due to direct closeness.

Regarding production activity:

potential for sales

for industrial freezing equipment due to the large share of agriculture in the region,

for viticultural equipment due to the development of this branch in the region,

for metal goods due to the intensification of development of production of agricultural facilities and equipment, and due to significant share of furniture production in the region, as well as the potential for sales even in the park for this direction,

Growing existing market for furniture


There is a need to create a centre for storage, preserving and sale of agricultural products.

There is a considerable lack of modern and efficient refrigerating areas in the republic

Farmers already have experience and abilities of growing fruits, vegetables, etc., but they need support in their storage and sale.


Potential for sales of industrial freezing equipment due to large share of agriculture in the region and at the republican level.

Need to raise the level of mechanization in agriculture.

Related industries

Local and foreign suppliers.

Large share of related

Local and foreign suppliers.

Development of modern

Most suppliers are foreign.

Large share of related industries in



industries in the volume of sales in the region referring to metal goods production, timber production, intensification of engineering industry development.

agriculture is a priority for the Government.

Grants and technical assistance offered to farmers allow for the intensive development of fruit, vegetable, table grape cultivation in Moldova

the volume of sales in the region referring to refrigerating sphere.

Competition

Absence of direct competitors for freezing equipment in the region.

Minimum competition on non-standard equipment for viniculture.

High competition for furniture production due to closeness to Chisinau. In the region, however, the companies located on the park’s territory are in the top five.


Minimum competition in production activity – storage, preservation and sales of packed fruits and vegetables

Absence of direct competitors for the services of renting modern refrigerating spaces for local producers.


Absence of direct competitors for freezing equipment in the region. Imported goods are competitive.

A competitive advantage would be the creation of business incubator and existence of all products and services of value chain in the same place.

Positive effects

Requires minimum volume of investments (creation of infrastructure and capital repair of buildings).

Due to product diversification, related industries will also grow and there will be even distribution of these within the economy of the region.

Growth of the potential for attraction of foreign investments resulting from the diversification of types of activity of the resident enterprises.

Reduction in the period of launching new enterprises due to their quick inclusion in the organizational structure and already existing cooperation.

Minimization of the risk of dependence on certain directions of specialization in case of supply and demand fluctuations on the market.

Stress on diversification will increase the need of specialists and qualified workers.

Increase in the number of resident enterprises will increase the number of jobs in the park and, accordingly, will reduce unemployment rate.

Positive effects from scenario 1 are valid (with the exception of the volume of investments).

The owner will have two separate sources of incomes – lease and production activity.

Due to the creation of production activities – storage, preservation and sales of packed fruits and vegetables, related industries (fruit and vegetable cultivation) will have a considerable impetus for sustainable development.

Production activities:

will use the existing areas with higher return for a service which is presently in great demand

provide the local market with quality domestic food products throughout the year.

will raise potential for export of fresh and frozen fruits and vegetables from Moldova.

Creation of the logistic centre will enhance the image of republic on the international arena.

Positive effects from scenario 1 are valid (with the exception of the volume of investments).

Creation of the business incubator will allow for the acceleration of the processes of starting businesses from the cluster.

Creation of the whole value chain will essentially increase the cumulative potential of the industrial park.

Creation of an assembly line of modern freezing equipment will give the possibility to have modern freezing equipment at lower prices.

Stress of quality will increase the need in specialists in the field.

In case of emerging of local competitors as well as in case of imported goods there is competitive advantage of offering a complete range of activities totally covering the value chain in the branch.

Negative effects

Risk of failure to quickly find investors and resident enterprises

Risk of occurrence of administrative and corporate conflicts among existing and newly attracted enterprises.

Development of administrative red-tape due to the existence of a single control body of the managing enterprise.

Risk of insufficient financial resources (The necessary volume of investments is larger than it is specified in scenario 1)


Risk of occurrence of administrative and corporate conflicts among existing and newly attracted enterprises, as

Specialization will determine concentration on very high quality and, by default, increase in need to purchase expensive imported modern technology .

Specialization referred exclusively to one sphere may lead to failure to find sufficient suppliers and customers, as well as to find qualified staff for all long-term activities of the value chain. Extension of the period of new



well as risk of occurrence of conflicts of interests in the managing enterprise (the same owner, various activities, various priorities).

Lack of sufficient resources from the state for the creation of the necessary infrastructure.

Development of administrative red-tape due to the existence of a single control body of the managing enterprise

enterprises’ attraction in the park due to complex organizational and legal procedures of nonconforming enterprises.

Slow use of the existing areas due to the long process of releasing areas by nonconforming enterprises.

Great risk of dependence only on one direction in case of economic slowdowns.



5.2. Selection, analysis and substantiation of the optimal scenario

After comparison of the 3 proposed scenarios, it is determined that appropriate choice is scenario 2 - creation of the industrial park with the existing activities, new activities on the part of the resident enterprises and the activity related to construction and renting of freezing equipment by the managing enterprise – justified by the increase in beneficial effects for the present enterprises from the territory, increase in positive effects upon the region, decrease in negative ones, and presence of a higher potential of resources for the implementation of this type of scenario as compared to other two variants.

In case of impossibility to implement scenario 2 for various reasons, the existing concept will be developed according to scenario 1.

Even if choosing optimal scenario there are some risks in the creation of the industrial park which can be eliminated according to the methods described in the table below.

Table 31. The methods to eliminate the risks of scenario 2

Risk Methods of elimination

Risk of insufficient financial resources. • Attraction of foreign investments.

• Partial sales of assets

Risk of failure to quickly find investors and resident enterprises.

• Intensive promotion of the need for strategic industries development in the park and the region;

• Provision of benefits to develop advantageous cooperation within the park;

• Rapid provision of -legal framework on the park’s territory;

• Intensive cooperation with the local public administration;

• Monitoring of the results of the investment made within the industrial park.

Risk of occurrence of administrative and corporate conflicts among existing and newly attracted enterprises.

• Promotion, awareness of the enterprises’ contribution to the important industries of the region;

• Reflection of cooperation opportunities on the territory and creation of synergetic effect upon the whole park;

• Equitable provision of the same operation conditions and facilities for all the resident enterprises.

Absence of sufficient resources from the state for the creation of the necessary infrastructure.

• Intensive promotion of the park’s activities and products in order to attract foreign investors;

• Conclusion of agreements with the residents by which they will pay individually for creation of utilities, the sums which will be deducted from further sums of the rent or reduced from the price of privatization of parcels, real estate and equipment;



• Creation and maintenance of the dialogue between the local public administration and resident enterprises regarding common contribution to the development of the region’s industry;

• Monitoring of the park’s efficiency on the part of local public bodies.


• Correct establishment of legal-administrative framework of the industrial park’s activity, which will set the criteria for selection and acceptance of new residents;

• Efficient monitoring of contract relations between the residents and manager;

• Control of the managing enterprises on the part of the LPA.

At the same time, it would be appropriately to indicate benefits specific to the optimal scenario which are demonstrated in the following table (indicated according to the categories of beneficiaries).

Table 32. Benefits of scenario 2 according to categories of beneficiaries

Category Benefits

Managing enterprise • Ensuring of long-term revenues from two directions of activity.

• Development of an activity currently demanded on the market (storage, package and preservation of fruits and vegetables)

• Increase in the volume of revenues from the lease of spaces due to the expansion of the activity of enterprises on the territory;

• Minimization of risks of dependence on certain directions of specialization in case of slumps

• Improvement of internal infrastructure due to the increase in the number of residents and acquisition of investments for modernization and reorganization;

• Expenses optimization due to the lease of spaces which are not used at present;

• Recognition of contribution it has together with resident enterprises to the development of important industries of the region, and the GDP of the country’s economy;

• Improvement of conditions of employees’ remuneration due to the increase in production volumes of the resident enterprises.

Residents (Enterprises currently operating on the territory and newly attracted enterprises)

• Maintenance of the existing activity of the enterprise on the territory, accordingly, maintenance of already established relations with customers and suppliers;

• Reduction of expenses related to business starting for new resident enterprises of agro-food profile;

• Increase in volumes of sales due to the increase in competitiveness of obtained products and, accordingly, growth of local demand (on account of extension of activities by means of creation of new types of activities within the park);

• Strengthening the potential of foreign investment attraction resulting from products’ diversification;

• Improvement of conditions for employees’ remuneration due to the increase in the volume of production and extension of activities resulting from implementation of new types of activities (refrigerating services) and packing house activity.

Local and central authorities

• Increase in contributions to the local and national public budgets and increase in the number of jobs in the region due to the launching of new types of activities within the park requested on the market.

Consumers of the enterprises from the industrial park

• Improvement of the quality of the products produced within the park (by means of creation of new types of activities based on modern technologies);

• Access to the diversity of products on the local markets, including to additional maintenance services.

Enterprises of related industries and economic entities interested in the partnership

• Due to the diversity of products. related industries will also grow and there will be their even distribution within the region’s economy;

• Opportunities for development and extension of the activity due to the state support offered within the industrial park according to the legislation in force;

• Opportunities of interbranch cooperation.



5.3. Sales market for production activity:

Thus, in this context, first of all we reflect the sales market for production activity of the managing enterprise as follows.

Since Moldova is situated in a moderate climate zone and has fertile soils, traditionally agriculture of the republic is focused on fruits, vegetables and grapes.

The market of fruits, vegetables and grapes of the Republic of Moldova is characterized by evident seasoning. The period of harvest in the country begins in May and lasts until October, when last apples and grapes are harvested. Thus, Moldova is a fruit, grape and vegetable supplier only during warm season of the year, and only during these seasons important amounts of fruits are exported abroad.

Pomiculture is one of the main branches of agro-industrial complex. Covering just 6-7% of the area of arable lands of the republic, pomiculture within recent two decades has been constantly producing about 20% of monetary incomes from selling agricultural products. At present, development of pomiculture in the Republic of Moldova consists in efficient use of the existing orchards with unexhausted potential and their subsequent replacement with new orchards of highly intensive type, with a modern assortment and advanced technologies which ensure early harvesting (in the second year), high yield of fruits during fructification period (40-45 ton/ha), required quality and competitiveness in the domestic and external markets.

During 2004-2009 Moldovan fruit exports recorded huge fluctuations. 2009 was marked with a record figure of fruit export (229 thousand tonnes) with total value of 136 mln. USD. The lowest level of export was registered in 2008 (127 thousand tonnes) mostly caused by drought of the previous year as well as customs restrictions of that period.

Main export countries include CIS countries (Russia, Belarus, Ukraine), receiving about 84 % of the total Moldovan fruit export. In 2009 Russia was the most important export country for Moldova during the last 6 years (183 thousand tonnes of fruit), where 80% of the total fruit export were delivered. Other export countries were France, Greece, Turkey, where exports during 2004-2009 were practically stable. At the same time we should mention the rate of growth of fruit exports to such countries as Germany, Italy, especially in 2009. Export to Romania decreased by 75% as compared to 2004.

Disadvantages of Moldovan exporters are reflected in inadequate calibrating, sorting and packing. Problems connected with supply, low quality and heavy competition imposed by suppliers from such countries as Poland, China, Italy, Greece (able to offer products of the same quality at lower prices) represent serious obstacles for Moldovan exporters that make efforts to penetrate this market segment.

Table 33. Total volume of fruit export during 2004-2009

Source: NBS



Viticulture is also a main branch of agriculture. The Republic of Moldova is on the 19th place in the world by the volume of annual grape production, according to the latest data (of 2007) of Food and Agriculture Organization of the United Nations.

In the RM there are programs of support for pomiculture and viticulture support, which in different ways support the development of these fields.

The largest grape producer is Italy - over 8.5 mln. tonnes of grapes annually, followed by France (6.5 mln) and China (6.3 mln). On the other hand, the largest table grape purchaser is the USA, with imports of 595 thousand tonnes annually, followed by Russia - 407 thousand tonnes and Germany – 306 thousand tonnes (the two last are very attractive for the RM). The Republic of Moldova exports only 20 thousand tonnes of table grapes, being in 20 top exporters of these products. Moldovan producers’ export prices, however, are two or even three times less than those of their main competitors.

Table grape consumption continuously grows and it especially intensifies during cold seasons of the year when the current harvest decreases in household production. Therefore, there appears the need for collection and fresh-keeping of grapes for their sale during deficiency of these products on the market. At present in Moldova out of 110 thousand ha of vines in harvest only about 5% are of table sorts. Out of these about 8 000 ha are given to table sort „Moldova”. More than 80% of areas with table sorts are aged, average annual harvest per hectare being only 1.5 tonnes instead of 4.5-5 tonnes.

Vegetable growing in Moldova is characterized by instability but has a trend to grow. In Moldova vegetables are mostly cultivated on the open ground. During recent years vegetable growing in protected areas (greenhouses) by using modern technologies has been widely spread. But farmers’ incapacity to preserve the harvest does not allow maintaining adequate profitability and does not allow for steady supply of the products to the market. For this reason vegetable import has been already prevailing over the export from Moldova for a long period time and preserves a descending trade balance.

During 2004-2009 Moldova exported about 114 thousand tonnes of vegetables in the total value of 28.4 mln. USD. Within last 2 years export considerably decreased. The main countries of vegetable export during the last 6 years were Belarus, Romania, Russia, with about 50% of the total volume of exports. Other export countries for Moldova were Switzerland, Hungary, Italy, Estonia, France, Germany. The highest export volumes were registered with Belarus in 2006 and 2007 (5274 and 5310 tonnes respectively). Largest transactions take place in season, since Moldova has no adequate capacities for extra-seasonal production.

Table 34. Total volume of vegetable export during 2004-2009

Source: NBS



At the beginning of 2008 the Ministry of Agriculture and Food Industry, National Refrigeration Association (NRA) and the Agribusiness Development Project (ADP) carried out a study of cold storages of the Republic of Moldova intended to preserve fruit and vegetables. The study provided updated results on the similar activities undertaken by these three structures at the end of 2004.

Analysis of refrigerators in the RM.

The study identified 187 cold storages with a total capacity of 178 740 conventional tonnes (recalculated for apples). This figure constitutes an increased of 14 390 tonnes (9%) as compared to 2004, when 161 cold storages with a capacity of 164 350 tonnes were indentified.

Despite the modest, though positive, increase of the total capacity, a significant increase in the operational cold storage capacity was identified (+14 330 tonnes or 23%). This increase was largely the result of the construction of 19 new cold storages during 2005-2007, with a total capacity of 10 350 tonnes.

In the central zone of the country, 76% of the identified facilities are classified as „operational” or „partially operational”, compared to 57% in the Southern and Northern zones. Construction of new cold storages is more intensive in the Central zone (2 900 tonnes) as compared to the Northern zone (2 540 tonnes) and the Southern zone (1 200 tonnes). The analysis of the received data shows that the main products passing through the cold chain are apples (63%) followed by grapes (22%). Very few cold storages (<10%) processed two or more products.

Figure 25. Use of cold storages

Source: The Ministry of Agriculture and Food Industry, National Refrigeration Association and the Agribusiness Development Project . Study of cold storages in the Republic of Moldova. 2008.

The focus on a single product, coupled by the situation when cold storages do not have raw materials in their area of location and limited access to the information on the spaces which can be rented, inevitably leads to a very low degree of capacity utilization (average – 32%). Considering that in all parts of the country there is the possibility to handle a full conveyor of products, and capacity utilization is attainable.

At the same time, the reduced degree of capacity utilization does not mean absence of products. Thus, it is estimated that less than 55% of the volume of exported grapes was included in the cold chain. While for apples this index is estimated at 27% at most. If we take into consideration that some of the products from the cold storage are sold on the local market, then the share of products which pass through the cold chain is reduced to 13, respectively, 16%. For other products, such as stone fruits, berries and vegetables, the situation is even more unfavorable.

A large number of the cold storages do not have suitable access roads and they lack continuous water supply and sewage systems, which are essential for meeting international food safety requirements. Only 5 cold storages have certified food safety management systems (HACCP or ISO 22000) and only two companies hold GlobalGAP certificates.

For the last 10-15 years, the main cold storage activity in the Republic of Moldova was storing fresh products for a 3-4 month period in order to benefit from higher out of season prices. Most products

Unused Used apple

s

vines

s

vegetables

s

others



were delivered to market segments of lower value of the CIS countries, being sorted and packed manually in an inadequate way. At the same time the EU market and other segments of the CIS countries market (especially due to fast development of supermarkets network) require consolidation of farm fresh products in homogeneous lots that do not need to be sorted and packed in the importing countries.

Since the state of existing cold storages demonstrate: unjustified attempts to minimize investment costs, insufficient thermal and hydro-isolation, doors that do not ensure chamber air tightness, lack of humidifiers and sufficient cooling capacity necessary for freezing systems, the market situation reflects the following trends:

Inability to maintain optimum temperature and relative humidity regime

Increased electric energy expenditures

Expensive cold storage operational costs

At the same time, a clear general trend of converting to Freon-using cooling systems was observed, while the share of Ammonia-using systems decreased dramatically. At the same time, EU regulations clearly establish the necessity to convert to environment-friendly cooling agents (ammonia, water, carbon dioxide, propane, etc.). Thus, the risk of losing specialists in the domain of facilities with environment-friendly agents is obvious, and it will generate high conversion costs in 15-20 years. Moreover, a large number of the cold storages do not have suitable access roads, lack continuous water supply and sewage systems, which will significantly encumber the implementation process of the international food quality and safety standards.

As to cold storage equipping the situation on the market of the RM looks in the following way:

1. There are only 2-3 cold storages which have sorting lines;

2. There are only 3 -4 cold storages with the systems of fast freezing (precooler);

3. There are only 3-4 cold storages which have the lines of carton box formers according to the international standards (tray former);

4. There are only 3 cold storages which have CA/ULO atmosphere control systems.

Besides, due to the fact that according to the scenario 2 (optimum) it is planned to have a packing house near the cold storage, it would be appropriate to analyze the following advantages of this activity, which will directly affect the analyzed market (Table 35).

Table 35. Advantages of packing house.

Characteristics: Result/advantage:

Consolidation of available volumes of fruits

and vegetables

Application of modern technologies of sorting,

storage and packaging

Scale economies during materials

procurement and products sales

Manner of informing farmers regarding market demands

Access to market segment with application of

modern trade formats

Higher prices for delivered production

Lower operating costs without prejudicing

profitability of agricultural producers

Operative adjustment of production activity to

market demands

Thus, construction of the cold storage and a packing house will allow for the sale of products not only on the local market but also for export. The end consumers focus on naturalness, while importers



focus on a longer time of the products preserving. The focus can be made both on CIS countries and Europe.

Factors which determine the consumers to increase fruit and vegetable consumption during winter are the following: numerous changes in the economy, deterioration of general ecological conditions, change in living system and consumer’s awareness. The factor that determines the choice of fresh fruits and vegetables in favor of processed ones is beside the increase in prices for processed products, the latter loses qualitative tastes and vitamin contents. Another factor in favor of fresh fruits and vegetables to be chosen by the end consumer is fast preparation and use for food.

5.4. Identification of potential resident enterprises

Resident enterprises can be divided into four categories for the industrial park which will be created on the territory of „CAAN” JSC:

A. Enterprises which will use refrigerating areas and services of packing house provided by the managing enterprise. The cold storage will be placed in the production block 1 with the capacity of 30 thousand tonnes with the following dimensions: area - 14 400 m2, volume- 155 520 m3

Specialization of the companies from this category – storage and preservation of fruits, vegetables, berries, table grapes, etc.

B. Current enterprises, with a division of specialized companies into refrigerating direction and other companies which, if necessary, may be transferred to other production areas.

Enterprises which are involved in the main production activities:

Production of industrial freezing equipment. The range of products is focused on the satisfaction of the requirements of enterprises from agricultural and trade sector in the field of: freezing and storage of food products at low temperatures, storehouses for food products storage, shops, restaurants, etc.; climate control – facilities for technological production; freezing equipment for products storage at various stages of production processes.

Services of installation, adjustment and maintenance of freezing equipment.

Enterprises with other directions of activity:

Production of furniture, joinery from aluminium and PVC. Range of products is focused on the satisfaction of the consumers’ needs in the sphere of production of office furniture; home furniture; etc.

Production of viticultural equipment and bottles production.

Metal processing and production of metal goods, aluminium profiles.

Repair, installation, storage of furniture.

Repair, installation, storage of viticultural equipment, bottles storage.

Repair, installation, storage of metal goods.

Enterprises with supplementary activities:

Transportation and motor-repair services.

Catering services and festive organization (canteen, festive hall )

Terminal services;

Handling and storage services;

Brokerage services;

Hotel services.



C. New enterprises, the activities of which will be determined according to the value chain (production, repair, installation, maintenance of freezing equipment).

D. New enterprises with other types of activities, for the full use of the available spaces.

5.5. Identification of the sources of financing

Taking into account that during implementation of the present project – Feasibility study of industrial park creation at “CAAN” JSC from Straseni – the owner has been changed and at the auction of December 7, 2010 the share of the state was sold to a private investor, therefore, the financing for creation of the industrial park from the state resources becomes inappropriate.

The sources of financing for the creation of the industrial park’ infrastructure can be determined in the following way:

Option 1. Own sources of the owner

Option 2. Own sources and sources from sales of real estate which is not important for the industrial park development

Option 3. Own sources and borrowed sources

Option 4. External investments (foreign and/or local, on the part of potential residents and/or non-resident investors interested in the park’s activity, as well as from obtained unrecoverable funds such as grants)

Table 36. Comparison of options of financing.

Option 1 Option 2

Advantage Disadvantage Advantage Disadvantage

- Possibility of prompt and unlimited access to own sources of financing;

- Financial and decisional independence

- Risk not to have sufficient sources of financing;

- Freedom of actions which the private investor can enjoy;

- Possibility to identify and access additional independent financial sources.

- Possibility to make decisions in short time;

- Financial and decisional independence.

- Risk of failure to sell unused assets;

- Expenses related to the sale of unused assets which may result in the increase of assets price which will condition the decrease in their competitiveness.

Table 36. Continuation.

Option 3 Option 4

Advantage Disadvantage Advantage Disadvantage

- Possibility of prompt and unlimited access to own sources of financing;

- Access to borrowing (credits)

- Risk of failure to identify and attract potential investors;

- Long time required for

- Access to non-recoverable funds;

- Possibility to obtain additional

- Funds may be withdrawn by penalties applied in case of non-



in case of insufficient own funds;

- Existence of various commercial, financial structures able to provide credits which allow negotiating the rate of bank interest.

- Increase in the managing enterprise’s capacity of financing from borrowed sources.

- Possibility to cover in short time and in full amount the needs of financing for the creation of the industrial park.

accessing to bank credit.

sources from residents;

observance of the assumed conditions;

- Risk of failure to attract a sufficient number of residents or residents with poor financial capacity;

- Risk of failure to identify non-residents interested in the park development

Financing of technical and production infrastructure of the industrial park as well as modernization of

its utilities directly depends on the scenario selected for the park creation.

Conclusions: In order to ensure the optimal scenario development frameworks, the variant of

financing from own sources of the owner and from the sources borrowed by him (Option 3) is

considered to be efficient (as it is demonstrated in calculations of financial forecasts). In this case the

borrowed capital will make up about 37% of the amount of investments (see chapter 7 of the present

study).

If variant of financing from own sources of the owner and from the sources borrowed by him (Option

3) cannot be implemented, all the possible options will be applied at the stage of implementation.

5.6. Organization of the industrial park’s activity

With the view to implementing the project of the industrial park creation and proceeding from scenarios and options identified as optimal, we can conclude the Administrator of the industrial park will be represented by “CAAN” JSC, the shareholders of which are private individuals and legal entities of private law.

In order to ensure the functionality of the industrial park, the park’s Administrator will receive the right to use the area, within which the industrial park will be operating. This requires the industrial park’s Administrator to file an assignment application to Straseni Local Council regarding the lease of the area and on the basis of the assignment decision of the Local Council a contract of lease should be concluded with the Mayor’s office of Straseni. The term of the contract of lease should be not less than the period for which the industrial park is created, that is 30 years (the conditions for the area transmission will be determined by the owner of the corresponding area).

Upon approval of the scenario of the industrial park’s activity, various categories of areas should be delimited depending on their further use:

Areas intended for production activity,

Areas intended for production activities and maintenance of freezing equipment

Areas intended for other production activities (furniture production, non-standard equipment, etc.)

Areas intended for offices, other types of activities (services, trade, IT, or other adequate activities, areas intended for customs control zone).



Activities of rendering IT services represent an opportunity since this sector is currently growing. At the same time, since the region has new specialized human capital and it is near to Chisinau, it allows for an adequate use of the administrative areas of the enterprise for the development of this type of activity.

At the initial stage of the industrial park’s activity, models of cooperation among the residents will be established. If necessary, some current residents may be transferred to other available areas to release the areas for planned activities. Adequate placement of the industrial park’s residents will be arranged by its Administrator as a result of specific nature of the activities carried out by the economic entities. The managerial team will be headed by the director of the managing enterprise. The activity of the managing enterprise, including at the initial stage of the industrial park creation is classified by the following activities:

Ensuring of reconstruction and modernization of the existing spaces and their lease (for existing and newly attracted residents );

Ensuring of construction and lease of spaces of freezing equipment for agro-food products preservation;

Activity of sorting and packing houses for vegetables and fruits;

Consulting services (juridical, accounting, etc.).

Services within customs control zone.

For the management of the industrial park’s activities, it is appropriate to reorganize the organizational structures existing in „CAAN” JSC into organizational structure of the managing enterprise (the figure below). The staff of the managing enterprise is planned to be about 40 people.

Figure 26. The organizational structure of the managing enterprise

Source: Developed by ProConsulting

The managing enterprise will have the following responsibilities and obligations:

Coordination of the process of creation of the industrial park’s infrastructure,

Elaboration of the strategies for the industrial park development,

Attraction of investors for the development of industrial park’s activities,

Organization of operational activities of the industrial park,

MANAGING ENTERPRISE

Marketing

department

Real estate

department

Development

department Administrative

department

Promotion Attraction of residents Information

Accounting Space management Infrastructure

management

Legal Business Technical consulting

Secretary security

sanitary services



Cooperation with the specialized central bodies of public administration and with the local public administration in direction of efficient development of all activities of the park,

Development of plans of informatization and promotion of the park’s activities to attract potential residents,

Organization of competitions for selection of optimal residents of the industrial park,

Ensuring of functioning of utility networks according to the technical requirements,

Sustainable development of production infrastructure according to the technological needs,

Ensuring of contract conditions observance by the resident enterprises.

Operating revenues of the managing enterprise of the industrial park where technical and production infrastructure is created on the account of the private investor will be obtained from the lease of areas on the territory of the park as well as from production activity and from the activities of rendering consulting services and other services, as appropriate.

Within the previously mentioned responsibilities by the managing enterprise the following table provides a list of services and a brief description of their relevance for the managing enterprise as well as for resident members of the industrial park.

Table 37. Services of the managing enterprise.

Service Relevance for managing enterprise Relevance for resident enterprises

Services of cold storage and packing house

Lease of refrigerating areas and services of the packing house

Acquisition of incomes from the main activity, extension of the experience in the field and attraction of residents on the line of value chain

Provision of modern conditions for product storage and packing, relations of cooperation between enterprises on the refrigeration chain.

Main services

Provision of utility and communication infrastructure

Possibility to offer prepared and unprepared areas (as appropriate) with the whole utility infrastructure.

Guarantee of conditions for immediate launch of production activities.

Complex provision of industrial production, storage and administrative areas

Ensuring of participants’ (resident enterprises) attraction in the industrial park.

Ensuring of all the conditions for launching production operational activities.

Preparation of production areas according to the preferences of potential residents

Acquisition of additional income from execution of works for area preparation.

Possibility to carry out production activity according to the conditions imposed by the resident enterprise and peculiarities of the production process.

Total or partial arrangement of the territory and areas (reparation services, etc.)

Acquisition of incomes from the park’s administration as a source from exploitation of a trade or real estate object.

Benefits from business service according to modern standards.

Provision with electricity up to the entrance to the production area itself

Guarantee of rendering an assigned volume of services provided for resident enterprises and obtaining a safe source of income from further exploitation of the provided services.

Heating

Hot and cold water supply

Telecommunication services

Air-conditioning

Maintenance of common zones, solid wastes management

Fire protection

Provision of guarding and security system

Provision of health care services (first-aid station)

Higher level of maintenance of the industrial park’s participants

Improvement of the quality of working conditions of the staff

Additional services

Consulting

Additional sources of income on the account of expansion of the sphere of services provided to the park’s residents.

Provision with the additional conditions for business development from enjoying qualified services.

Staff recruitment, organization of specialized training sessions

Assistance regarding safety measures

Legal consulting

Technical, technological consulting,



organization of specialized training sessions

Financial consulting, book-keeping

Services of business assistance (secretariat, Xerox, fax)

Other services (services of transportation, services of terminals, services of handling and storage, services of brokers, hotel services)

6. ACTION PLAN

6.1. Legal Action Plan

In order to create the Industrial Park, legally the distribution of actions necessary for the strategic implementation of the project include:

Table 38. Legal Action Plan

Block Period Executors Deliverable

Block I. Adoption of Decision on creation of industrial park

Development, of study-based informative

materials in order to submit them to the

general meeting of ”CAAN“ JSC

shareholders in order to adopt the

decision on priority directions of

development.

May 2011

General

Director

Agenda of the General Meeting with attached

materials.

Convening the general meeting of ”CAAN“

JSC shareholders in order to adopt the

decision on priority directions of

development, to adopt the GMS decision,

including the completion of Articles of

Association with types of activities related

to management of companies and its

internal reorganization.

May 2011

General

Director

GMS decision on the adoption of new

development priorities by creating industrial

park, including the completion of the Articles

of Association with types of activities related

to management of companies and its internal

reorganization.

Making public the decision to all

stakeholders, including local public

authorities. May 2011

General

Director

Information provided by stakeholders,

including that published in the media.

Initiation of internal reorganization of the

company. May-June

2011

General

Director,

Lawyer

Implemented reorganization.

Preparing materials necessary for

creation of the park and submission to the

Local Council. May 2011

Lawyer,

department

heads, General

Director

Copies of the GMS decision, of documents of

acts confirming land ownership, of excerpts

from the TCO.

Filing with the Local Council the

application to create the park and

establish a Committee for creation and

operation of the industrial park, with

attached materials.

June 2011

General

Director

The application and related materials filed

with the Local Council.



Approval of the decision of the Local

Council on the creation of industrial park

and establishment of the Committee for

creation and operation of the industrial

park.

July 2011 Local Council

Decision of the Local Council to approve the

application and create the Committee

adopted and published in the local media.

Establishment of the Committee for

creation of the industrial park.

July 2011 Mayor

Order of establishing the Committee and

creation of the Committee

Filing with the Straseni Local Council the

application on leasing land and adoption

of such decision July 2011

General

Director

Decision to lease the land approved and

communicated to the "CAAN" JSC and passed

for execution to Mayor of Straseni

Signing the land lease contract

July 2011

General

Director and

Mayor of

Straseni

Land lease contract signed, authenticated and registered with Straseni TCO.

Preparation of materials necessary for

obtaining the title of industrial park

July 2011

Lawyer,

department

heads, General

Director

a) copies of the acts of incorporation of the managing company; b) copies of documents confirming the right of use for at least 30 years or ownership of land and buildings for the creation of industrial park; c) plan of location of the land designed for the industrial park; d) declaration of land tenant or of owner regarding the conditions set out in art. 5 let. a) and b) e) approves of owners of public utility networks; f) cadastre file on changing land use or authorization for construction of the objective; g) approval of the local council under whose jurisdiction the land for industrial park is; h) feasibility study on creation of the industrial park.

Submitting to the Ministry of Economy,

the application for obtaining the title of

industrial park. August 2011

General

Director

Application filed and registered with the ME

with materials described above.

Obtaining the title of industrial park. September

2011

Ministry of

Economy

Title of the industrial park.

Block II. Activity planning and establishing collaborative relationship

Development of the activity plan.

June 2011

General

Director

Developed plan.

Adoption of the activity plan of the

Company Board. June 2011 Company Board

Adopted plan.

Filing requests with the Local Council on

privatization of land designed for existing

construction (for new construction,

July 2011 General

Director

Registered application and recorded

decision.



additional requests shall submit).

Development of procedures of park

activity and principles of collaboration

with park residents.

September-

October

2011

Lawyer,

department

heads, General

Director

of the managing

enterprise

Developed and adopted procedures

textbook.

Drawing up contracts for collaboration

with residents.

September-

October

2011

Lawyer of the

managing

company

Models of drawn up contracts.

Signing contracts with residents

October

2011-

permanent

General

Director of the

managing

enterprise

Signed contracts

Table 39. Schematic presentation of the legal action plan

SCHEMATIC PRESENTATION OF THE LEGAL ACTION PLAN

Ma

y

Jun

e

July

Au

gu

st

Se

pte

mb

er

Octo

be

r

2011

Block I

Development, of study-based informative materials in order to submit them to the general meeting

of ”CAAN“ JSC shareholders in order to adopt the decision on priority directions of development.

Convening the general meeting of ”CAAN“ JSC shareholders in order to adopt the decision on

priority directions of development, to adopt the GMS decision, including the completion of Articles

of Association with types of activities related to management of companies and its internal

reorganization.

Making public the decision to all stakeholders, including local public authorities.

Initiation of internal reorganization of the company.

Preparing materials necessary for creation of the park and submission to the Local Council.

Filing with the Local Council the application to create the park and establish a Committee for

creation and operation of the industrial park, with attached materials.

Approval of the decision of the Local Council on the creation of industrial park and establishment of

the Committee for creation and operation of the industrial park.

Establishment of the Committee for creation of the industrial park.

Filing with the Straseni Local Council the application on leasing land and adoption of such decision

Signing the land lease contract

Preparation of materials necessary for obtaining the title of industrial park

Submitting to the Ministry of Economy, the application for obtaining the title of industrial park.

Obtaining the title of industrial park.

Block II

Development of the activity plan.

Adoption of the activity plan of the Company Board.

Filing requests with the Local Council on privatization of land designed for existing construction

(for new construction, additional requests shall submit).

Development of procedures of park activity and principles of collaboration with park residents.

Drawing up contracts for collaboration with residents.

Signing contracts with residents



6.2. Operational Action Plan

6.2.1. Activities necessary to rehabilitate constructions and objects belonging to the

Straseni "CAAN" JSC

1. Development of study in accordance with Constriction Rules of the RM "Construction design. Instructions on the procedure of development, endorsement, approval and framework-content of the construction project documentation” CRM A. 07.02.-99, art. 4.1.

2. Development of Documentation on assessment of environmental and social impact / (according to art.13, Law RM on the quality of construction no.721-XIII from 02.02.96)

3. Performance of technical expertise of basic constructions and drawing up technical expertise report - TER (art. 3, p.c., Law RM on authorization of execution of construction works no.163 from 09.07.2010)

4. Obtaining the certificate of urbanism - CU (art.6, p.2, Law RM on authorization of execution of construction works no.163 from 09.07.2010) which is attached to the land location plan indicating its size / boundaries, sanitary, approval; environmental approval; fire service approval (art. 6, p.2, Law RM on authorization of execution of construction works no.163 from 09.07.2010)

5. Based on the CU the applicant / beneficiary will obtain (art. 10, p.1, Law RM on authorization of execution of construction works no.163 from 09.07.2010):

– notes of connection to utility networks; - plan of tracking network; - topographical survey; - geotechnical prospectings.

6. Drawing up design documentation (art. 13, Law RM on the quality of construction no.721-XIII

from 02.02.96)

7. Approval of design documentation by the town's Chief Architect (art. 11, p.a., Law RM on

authorization of execution of construction works No.163 from 09.07.2010)

8. Verification of design documentation by project inspectors accredited or by institutions

authorized in this field (The Government Decision on ensurance of the quality of construction

no. 361, dated on 05.06.1996) - the designer is responsible for submitting the technical design

for verification (according to the chap. I, art.11 annex no. 1 to the Government Decision RM on

construction quality assurance no.361 from 25.06.96)

9. Approval of design documentation by the beneficiary. (art. 11, p.5, Law RM on authorization of

execution of construction works no.163 from 09.07.2010)

10. Signing by the beneficiary and the designer the contract on the author supervision (art. 12, p. 1, f),

Law RM on authorization of execution of construction works No.163 from 09.07.2010)

11. Obtaining the construction authorization (6 preliminary necessary documents, including those of

p. 5 above, art. 12, p.1, Law RM on authorization of execution of construction works no.163 from

09.07.2010)

12. Registering a building permit from the State Construction Inspectorate (art. 12, p.10, Law RM on

authorization of execution of construction works no.163 from 09.07.2010)

13. Signing by the beneficiary and technical responsible officer the contract on verification of

construction works (chap. IV, art. 42 of the annex no.1 from Government Decision RM on

construction quality assurance no.361 from 25.06.96)



14. Notification of the State Construction Inspectorate on the commencement of construction (art.

23, p.1, Law RM on authorization of execution of construction works No.163 from 09.07.2010)

15. Carrying out the construction process, drawing up technical books of construction (chap. III, art.

22, g, Law RM on the quality of construction no.721-XIII from 02.02.96)

16. Final reception (Government Decison RM on receiving the approval of construction and installations no.285 from 23.05.1996)

All these activities can be grouped into the following main stages with respective terms .

Table 40. Action Plan for rehabilitation of enterprise's infrastructure and constructions

No. Activities Months

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

1 Development of (pre-) feasibility study including determination of economic effects (1-2)

2

Performance of technical expertise and obtaining documents and agreements necessary for designing (3-5)

3 Designing, prospecting works, copyright control, its expertise and obtaining necessary approvals (6-12)

4 Performance of the construction and assembly works (13-15), of which:

4.1 - Building access roads 4.2 - Building external networks

4.3 - Repairs on production halls

4.4 - Repair of administrative + auxiliary buildings

4.5 - Building of internal roads

5 Acceptance of completed works and drawing up documents

6.2.2. Information and promotion actions

Creating an effective industrial park needs attracting resident companies for most efficient use of available space.

In order to achieve this goal, broad information on creation of the park's, its fields of activity, benefits for resident companies, participation conditions for new companies, etc. is needed.

The information campaign includes the following activities:

Developing and publishing an informational booklet about the industrial park ,

Placing appropriate information in the media (advertising in newspapers, magazines, TV, radio, etc.) ,

Development of the park presentation for beneficiaries and authorities,

Presentation of information within various specialized meetings, to local authorities, concerned ministries etc.,

Development of a web-site and its promotion,

Promotion of the park at specialized exhibitions (e.g. Made in Moldova, Agroteh, etc.) both in Moldova and at international (branch) exhibitions,

Development of basic principles for the industrial park participants (type of activity, requirements towards participants, etc..),

Direct information delivery to companies, which could be included in the park,



The activities will be carried out consistently throughout the entire period of the industrial park construction, until the completion of the available park areas available with appropriate resident companies and in case of the need to attract new residents with specific parameters.

7. FINANCIAL AND INVESTMENTAL DIAGNOSIS

7.1 Estimation of the necessary volume of investments

Creation of any industrial park provides for the allocation of additional funds to create related facilities or new investments in infrastructure designed to generate additional income from use and ultimately create added value.

The data presented in chapter 2 of the study shows that "CAAN" JSC has a vast set of buildings in a more or less good condition.

Based on the assumptions that the total area of buildings makes up about 75 000 m2 distributed mainly as follows: Building 1 – 34 560 m2 Building 2 – 10 454 m2 Building 3-6 718 m2 Administrative Building – 5 760 m2 Other buildings – 17 455 m2.

Most of the investment will target the restructuring of production capacities based on the optimum scenario for which a complex of positive effects was identified with immediate positive impact on the economic and social environment.

Overall analysis of the assets of "CAAN" JSC reveals that around 17 700 m2 out of the available area are subject to land lease contract with the companies currently working on these areas and that will become residents of the new industrial park.

For the efficient use of available spaces, it is proposed to create a mega-complex with a cold storage with a capability of 30 000 tonnes of fruit an area of 14 400 m2. At the same time, in order to ensure full service and necessary for future tenants of the cold store rooms, it is proposed to build rooms for sorting and packing fruit and vegetables. The space needed to set up the packing house (room) will make up 10 080 m2, and all will be created in the main building no. 1 that is the largest one (Lxlxh = 144x240, 8x10, 8 m).

Investments in creation of cold storage buildings, based on projected area, amounts to 9 million EURO given the fact that the estimates of expenses for purchasing the entire set of machinery and refrigerating machinery, make up an average of 300 EURO per square meter (Tables below, and Annex 4. ).

Table 41. Investment structure

Investment objectives Area (m2) Total investment

Investment in construction of the refrigerator, including 14 400 €9 000 000

cold store machinery €5 400 000

cold store machines €3 600 000

Investment in the construction of a packing house, including 10 080 €3 265 920

Machinery for packing house €1 959 552 packaging machines €1 306 368

Investing in creating utilities (road, sewerage, water, gas, etc. .) €1 111 247

Investing in repair of building 50 020 €14 217 109

Total €27 594 276

In order to create the complex of rooms for the operation of packing houses it is foreseen to provide an allocation of 3 265 920 EURO taking into account the fact that packing houses do not need cold storage complexes and specific storage technologies, about 40% of expenses are made for the purchase of equipment for sorting and packaging fruits.



The created cold store facilities are factors that can contribute to achieving the main goal for which industrial parks are built - creation of an industrial sector in Moldova's economy which shall contribute to sustainable development of the gross domestic product by developing export-oriented production. At the same time, these investments need to be supported by additional costs in creating internal and external utilities of the industrial park.

A very important component of future activity of the park is renovation of all remaining available areas (which would occupy an area of about 50 020 m2). According to preliminary calculations, the renovations would amount to 14 217 109 EURO, which equates the total estimated costs of about 4 500 MDL / m2. (estimate of expenditure see Annex 3).

Table 42. Amount of repair work

No. Building Name U.M. Quantity Estimated cost per 1

u.m., th. MDL

Total amount, th. MDL

1 Production building no. 1 m2 34 959,5 2,80 97 886,6

2 Production building no. 2 m2 10 599 2,80 29 677,2

3 Production building no. 3 m2 4 861 2,50 12 152,5

4 Sanitary building m2 5 929 8,00 47 432,0

5 Administrative building m2 12 376 8,00 99 008,0

6 Canteen m2 2 377 8,00 19 016,0

7 Interior roads - 2 km m2 10 000 0,42 4 200,0

8 Access road - 0.8 km m2 5 760 0,52 2 995,2

9 Local Road - 1.7 km m2 12 240 0,32 3 916,8

10 Water supply networks m 1 800 0,30 540,0

11 Sewerage system m 2 000 0,25 500,0

12 Gas supply networks m 1 500 0,30 450,0

13 Heating systems p 10 330,00 3 300,0

14 Land management 300,0

15 Designs and expertise works 21,65

Total 343 140

A specification that may be mentioned is the fact refers to the fact that the amount of 97 886 600 MDL reflected as expenses for the repair of the Building 1, will not be considered since the construction of cold storage rooms will be carried out in this building, and this amount is already included in investment costs.

The fourth component of investments in the park’s activity aims its proper use. At the same time, creation of utilities is a component required by applicable law on creation of industrial parks, component that provides for a contribution of government authorities limited to investment budgets for the related region or field. Creation of the network of park-related internal and external roads, better to say their renovation, creation of a water supply system and a sewage treatment plant are urgently needed for the activity of the industrial park since attracting strategic investors for both park administrator and for the entire economic region or zone is a necessary condition in the context of creating the industrial park.

Finally, it should be noted that investment in the industrial park created within the territory of “CAAN” JSC amounts to 27 594 276 EURO.

Given the necessary investments to be made and the need to allocate them in a relatively short period of time, they will be made in stages:

Stage I

Spring - summer 2011

The construction of the cold storage complex and of the packing house on 50% of the area foreseen for these facilities, would allow storage of 15,000 tons of fruit during the season of 2011- 2012.



Creation of utilities and repair of buildings. Based on the assumptions related to the fact that investment in the repair of buildings and available facilities will attract more investors, it is expected that about 65% of these expenses will be made during the year 2011, and the remainder will be completed during the year 2012.

Stage II

Spring - summer 2012

It is expected to expand cold store capabilities up to 30 000 tonnes of fruit, coupled with an extension of the packing house facilities, so that beginning with the season of 2012-2013 the managing company of the industrial park could be able to operate at maximum capability.

These stages and their contents may change, given the financial vision and possibilities of the managing company.

7.2 Financial Plan

7.2.1 Forecast of the managing enterprise income

The optimal scenario recommended for the operation of the industrial park involves a direct effect on the future activity of the managing company of the industrial park "CAAN" JSC.

The income of the managing company of the industrial park will be established based on 4 basic activities (Annex 7. Forecast operational income (VAT including)

Table 43. Forecast income of the managing enterprise, thousand MDL (including VAT)

Income 2011 2012 2013 2014 2015

1. Income from lease of available spaces, including

8 152,3 14 425,4 15 146,6 15 904,0 16 699,2

- current residents 4 428,3 4 649,7 4 882,1 5 126,3 5 382,6

- new residents 3 724,1 9 775,7 10 264,5 10 777,7 11 316,6

2. Income from the refrigerator 20 250,0 51 933,9 64 992,4 68 242,0 71 654,1

3. Income from the operation of the packing house

1 125,0 12 562,5 24 825,0 26 066,3 27 369,6

4. Income from consulting and other services *

150,0 157,5 165,4 173,6 182,3

Total 29 677,3 79 079,3 105 129,4 110 385,9 115 905,2

Table 43. Continuation

Income 2016 2017 2018 2019 2020

1. Income from lease of available spaces, including

17 534,1 18 410,8 19 331,4 20 297,9 21 312,8

- current residents 5 651,7 5 934,3 6 231,0 6 542,5 6 869,7

- new residents 11 882,4 12 476,6 13 100,4 13 755,4 14 443,2

2. Income from the refrigerator 75 236,8 78 998,6 82 948,6 87 096,0 91 450,8



3. Income from the operation of the packing house

28 738,0 30 174,9 31 683,7 33 267,9 34 931,3

4. Income from consulting and other services *

191,4 201,0 211,1 221,6 232,7

Total 121 700,4 127 785,4 134 174,7 140 883,4 147 927,6

*Amounts are estimated only for consulting services because of the lack of data for other types of services.

1. Income from real estate leasing (See

Annex 6. Income from lease of available spaces )

Currently, "CAAN" JSC has leased about 17 700 m2 of its total space of 74 500 m2. Of the remaining space, 24 480 m2 will be occupied by the cold storage complex and the packing house, while the area of park administration will cover about 1000 m2. This would amount to an area of about 31 000 m2

available for leasing.

The lease payment for the park residents will vary based on the following categories:

- for existing companies the lease payment will amount 250 MDL / m2 per year, following a growth trend of 5% annually for each year.

- for new attracted companies a price of 300 MDL / m2 per year will be set, which will follow a growth trend of 5% annually.

The proposed minimum price of 250 MDL / m2 per year was estimated for the following reasons: according to the study of the market of industrial space lease, it was identified that the price for such services in the towns of the republic (Straseni, Calarasi, Cahul, Ungheni) falls between 1.3 to 1.6 EURO/m2 per month, or 250-307 MDL / m2 per year. This price may be paid provided that an adequate infrastructure of company is created (roads, water, sewage, etc.). The increase in price must be directly related to the conditions created for resident companies.

Classification in categories of residents takes into account the fact that current companies have already invested in the infrastructure of real estate, due to which these spaces will not be subjected to renovation. Other available spaces will be leased to the extent they will be repaired and restored.

For the year 2012 a level of 40% of available spaces occupation is expected, and in the following years these spaces will be completed up to 100%. In this respect, the income from available spaces leasing will exceed 8.1 million MDL for the year 2011, 14.4 million MDL for the year 2012 reaching 21.3 million MDL at end of the year 2020. In terms of categories, this income will be relatively distributed in 32% of revenues from space leasing for existing companies and the other 68% being revenues from spaces leasing to new attracted companies.

2. Revenues from refrigerator and operation of packaging (See Annex 5. Provision of fruits storage and sorting services in the industrial refrigerator)

As mentioned in previous paragraphs, the maximum storage capacity of refrigerators will make up 30 000 tonnes of fruit (apples), volume that will be available at maximum capacity in late 2012. In this regard, the price for storage of fruits and vegetables will focus on an average price of 0.30 bani / kg per month.

Taking into account that a volume of 15 000 tonnes of fruit will be available in autumn 2011, revenues from the operation of refrigerators will be available by the end of August 2011 when harvesting of apples and other fruits likely to be stored in the refrigerator will start.

Refrigerator operation is scheduled for a period of 10 months each year, sanitation and restoring works will take place in April - May - June, or within a 60 day period between these three months. During summer early fruits and vegetables will be stored in the refrigerator that have a relatively short storage period (usually two months), which will allow obtaining revenues during summer. In



this regard, for 2011 revenues from cold store spaces will make up 20.2 million MDL, following an increase of up to 51.9 million MDL in 2012, 91.4 million MDL respectively at the end of 2020.

With reference to the operation of sorting and packing house for fruits and vegetables, currently forecast takes into account only the amount of stored fruits given the maximum cold store capabilities. The pessimistic forecast of these revenues determines an average price for sorting and packaging in the amount of 50 MDL per kg, which would generate a sales volume of 1.1 million MDL from this activity at the end of 2011, 12.6 million MDL respectively in 2012 and increased up to 34.9 million MDL at the end of 2020 correlated with an annual growth of 5% for provision of the respective service.

3. Income from providing consulting and other services

Income from the company’s consulting activity focuses on provision of the respective services provided mainly to industrial park residents. These services are focused on technical consulting services, accounting services, various legal services or others as well. A pessimistic forecast of these services would indicate a sales volume of about 150 000 MDL per year, which will reach 232 700 MDL at the end of 2020.

7.2.2 Forecast of expenses of the managing enterprise

The activity of the managing company is given by its specificity - the company uses huge spaces for leasing to the industrial park residents. This activity is crucial and involves a specific assignment of expenses (see Annex 8. Forecast consumption and expenses (VAT including).

Leased available spaces are not liable for additional expenses, the amount of expense is calculated as accumulated physical and moral wear (Annex 14. of wear). In this regard, cold store machinery has a service life of 10 years, which explains the fact that indirect consumptions have the largest share of 66% of total output.

Direct expenses include expenses related to current operation activity, which preponderance is determined by provision of consulting services: In relative terms this consumption falls within 2-3%. The bulk of the salaries represent salaries of operational staff (about 10 people) with an average annual gross salary of 3 000 MDL. Other expenses, incurred by company refer to promotional costs and costs for attracting new residents, amount to 80-100 thousand MDL per year, which would reflect a 0.5% share of the total.

Expenses related to the administrative body constitute the second largest component, although compared with a share of 9-10%, "CAAN" JSC as an asset management company does not have any categories of expenses related to production activity, most of them focus on staff remuneration, mainly reflected by the administrative staff, or costs for its maintenance. Thus, out of the total volume of these expenses 79% are expenses for labour remuneration, the others focusing on various categories - maintenance, office supplies, communication expenses, taxes, or similar.

7.2.3 Forecast of financial results

Financial results of "CAAN" JSC for the forecast period, are marked by four main areas of activity: space leasing, leasing of refrigerators, activity of sorting and packing fruits and vegetables and consulting services provided by the staff of the company. In this regard, revenues and expenses have been mentioned in previous paragraphs, further paragraphs present dynamics of net financial results. The data represented in the figure below show a favourable situation.

1%

66%

0%4%

29%

C. Dir. C. Indir Ch. Com. CGA Alte. Ch. Op.

Direct

expens

es

Indirec

t exp.

Comm

ercial

Gene

ral &

admi

nistr.

Other



Figure 27. Dynamics of enterprise's financial results

-20 000,0

0,0

20 000,0

40 000,0

60 000,0

80 000,0

100 000,0

120 000,0

140 000,0

VV, mii lei 1 967,0 2 154,7 24 731,1 65 899,4 87 607,8 91 988,2 96 587,6 101 417,0 106 487,9 111 812,3 117 402,9 123 273,0

CV, mii lei 927,9 1 012,7 5 369,7 14 265,0 31 869,2 31 939,6 32 013,5 32 091,1 32 172,6 32 258,1 32 347,9 32 442,2

P.Net, mii lei -331,0 40,8 17 725,4 44 924,9 35 941,4 42 259,3 48 767,0 55 474,1 62 390,6 69 526,9 74 374,0 79 463,5

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

The data presented in the Figure above shows that new investments made in the created industrial park will lead to achieving net sales in constant growth. Commencement of storage of fruits, vegetables and grapes since the autumn of 2011 will enable the company to generate a sales volume of over 25 million MDL, and subsequently will increase up to123 million MDL, or about 5 times in the 10 years of forecast. Given that the activity of the company is focused on providing services of leasing of available spaces, all expenses related to electricity consumption, staff and others are passed to residents. In this regard, the cost of sales includes current expenses of maintaining the staff directly employed in the production process or usage of fixed assets and equipment which are leased directly. Finally, the net profit obtained by the company is experiencing a positive trend reaching 17.7 million MDL in 2011 and over 79 million MDL in 2020. The trend of increasing net profit is determined by the fact that investments in 2012 are expected to be financed from attracted resources (foreign loans or international projects) on which basis in 2013 interest payments occur directly diminishing obtained economic benefits.

As for factors influencing the net profit, the situation is as follows.

Table 44. Forecast of financial results for the period 2010-2020, thousand MDL (Annex 10. )

Breakdown of financial results 2010 2011 2012 2013 2014 2015

Gross Profit 1 142,0 19 361,4 51 634,4 55 738,6 60 048,6 64 574,1

Results from operating activities 3,5 17 725,4 49 916,6 39 934,9 46 954,7 54 185,6

Results from investment activity 37,4 0,0 0,0 0,0 0,0 0,0

Results from financial activity 0,0 0,0 0,0 0,0 0,0 0,0

Results of financial and economic activity 40,8 17 725,4 49 916,6 39 934,9 46 954,7 54 185,6

Income tax 0,0 0,0 -4 991,7 -3 993,5 -4 695,5 -5 418,6

Net profit 40,8 17 725,4 44 924,9 35 941,4 42 259,3 48 767,0

Table 44. Continuation.

Breakdown financial results 2016 2017 2018 2019 2020

Gross Profit 69 325,9 74 315,3 79 554,1 85 054,9 90 830,8

Net sales

Cost of sales

Gross profit



Results from operating activities 61 637,9 69 322,9 77 252,1 82 637,8 88 292,8

Results from investment activity 0,0 0,0 0,0 0,0 0,0

Results from financial activity 0,0 0,0 0,0 0,0 0,0

Results of financial and economic activity 61 637,9 69 322,9 77 252,1 82 637,8 88 292,8

Income tax -6 163,8 -6 932,3 -7 725,2 -8 263,8 -8 829,3

Net profit 55 474,1 62 390,6 69 526,9 74 374,0 79 463,5

As shown in the Table above, the factors influencing the increase in net profit refers to an obvious increase in gross profit of over 4.5 times in the 10 years of forecast activity, from 19.36 million MDL in 2011 up to 90.8 million MDL in 2020. The operating result of the company, which obviously increases about 4.8 times during the forecast period offering the possibility to cover any losses that may result from differences in exchange rate - a factor that does not dependent of company’s management, but of the current situation of the Moldovan economy and national currency instability. An important factor with a less favourable effect is expenses on the income tax from 2012. According to the strategy approved by government authorities, the income tax of legal entities would be reintroduced since January 1, 2011. For reasons related to more active support of entrepreneurs, the income tax at an annual level of 10% will be introduced since January 1, 2012, for which financial results also comprise expenses (savings) on income tax, which amounts are also reflected in the cash flow.

7.2.4 Forecast of cash flow

The cash flow forecast for the period 2010-2020 shows a proper management of inventories and trade receivables able to cover interest payments and loan repayments. The Table below is the summary of cash inflows and outflows.

Table 45. Cash flow dynamics, thousand MDL

2011 2012 2013 2014 2015

Operational Activity

1. Total cash earnings 28 193,5 76 609,2 103 905,0 110 335,3 115 917,0

earnings from sales 28 193,5 76 609,2 103 905,0 110 335,3 115 917,0

2. Total cash payments 7 611,6 20 818,2 38 522,2 37 656,5 36 678,4

- Payments to suppliers and contractors 1 490,0 1 564,5 1 642,7 1 724,9 1 811,1

- interest payments - - 14 000,0 11 200,0 8 400,0

- payment of income tax - 4 991,7 3 993,5 4 695,5 5 418,6

Net flows from operating activities 20 581,9 55 791,0 65 382,8 72 678,8 79 238,6

Investment Activity

4. Total cash earnings

- earnings from the output of long term assets

5. Total cash payments 257 542,3 183 966,2 - - -

- payments for purchase of long term assets

257 542,3 183 966,2 - - -

6. Net flow from investing activities (257 542,3) (183 966,2) - - -

Financial Activity

7. Total cash earnings 245 000,0 140 000,0 - - -

- earnings from loans and credits - 140 000,0 - - -

- earnings from the issue of own shares 245 000,0 - - - -

8. Total payments - - 45 970,7 49 129,6 52 383,5

– payments on loans and credits - - 28 000,0 28 000,0 28 000,0

- dividend payment - - 17 970,7 21 129,6 24 383,5

9. Net flow from financial activities 8 039,6 11 824,9 19 412,1 23 549,2 26 855,1



10. Total Net Flow 8 039,6 11 824,9 19 412,1 23 549,2 26 855,1

Exchange differences

Cash balance at the beginning of the period 9,2 8 048,8 19 873,7 39 285,8 62 835,0

Cash balance at the end of the period 8 048,8 19 873,7 39 285,8 62 835,0 89 690,1

Table. 45 Continuation

2016 2017 2018 2019 2020

Operational Activity

1. Total cash earnings 121 716,3 127 802,3 134 192,4 140 902,0 147 947,1

earnings from sales 121 716,3 127 802,3 134 192,4 140 902,0 147 947,1

2. Total cash payments 35 767,2 34 935,9 34 189,0 36 050,8 38 005,6

- Payments to suppliers and contractors 1 901,7 1 996,7 2 096,6 2 201,4 2 311,5

- interest payments 5 600,0 2 800,0 - - -

- payment of income tax 6 163,8 6 932,3 7 725,2 8 263,8 8 829,3

Net flows from operating activities 85 949,1 92 866,4 100 003,4 104 851,2 109 941,5

Investment Activity

4. Total cash earnings

- earnings from the output of long term assets

5. Total cash payments - - - - -

- payments for purchase of long term assets - - - - -

6. Net flow from investing activities - - - - -

Financial Activity

7. Total cash earnings - - - - -

- earnings from loans and credits - - - - -

- earnings from the issue of own shares - - - - -

8. Total payments 55 737,1 59 195,3 34 763,5 37 187,0 39 731,8

– payments on loans and credits 28 000,0 28 000,0 - - -

- dividend payment 27 737,1 31 195,3 34 763,5 37 187,0 39 731,8

9. Net flow from financial activities 30 212,0 33 671,1 65 239,9 67 664,2 70 209,7

10. Total Net Flow 30 212,0 33 671,1 65 239,9 67 664,2 70 209,7


Cash balance at the beginning of the period 89 690,1 119 902,1 153 573,1 218 813,0 286 477,3

Cash balance at the end of the period 119 902,1 153 573,1 218 813,0 286 477,3 356 687,0

The data presented in the Table above reflect a situation favourable to the company’s activity generating sufficient liquid financial resources to cover its immediate payments. The data outlined above show that during the forecast period the company will finance its activity from internal resources generated by its operating activity, as confirmed by the positive value of the cash flow from operating activities during this period.

The specificity of funding consist in the fact that during 2011, investment in repair of buildings, creation of cold store complex and packing house will be made by the managing company on the account of associates financial resources. For the year 2012 the expansion of the cold store capabilities, completion of investments in buildings and creation of utilities are expected to be coved from external sources of funding, either being attracting from foreign investors, or being obtained from the resources of international programs, including those related to cross-border funds. In this respect, a maximum interest rate was considered given the market conditions of 10%, the respective expenses being presented as interest expense. Meanwhile, contracted foreign sources are expected to be repaid within a period of five years, credit and loan payments being properly represented.

Since the generated revenues are sufficient, and the coverage of all payments and according to the state fiscal policy, since 2012 the tax on income of 10% of the generated profit will already come into force, theses expenses are reflected in the category of payments.

Since 2013 the company intend to pay dividends amounting to 50% of the annual profit, for which the investments made by investors will be recovered within about 10 years. Finally it is found that the



managing company of the industrial park will generate enough resources and funds to cover all current needs, including distribution of dividends to its shareholders.

7.2.5 Forecast of the balance sheet

Analysis of the structure of the balance sheet of "CAAN" JSC during the forecast period of the investment project reflects a favourable situation, which allows a profitable economic and financial activity. The Table below shows the dynamics of the balance sheet (Annex 11. sheet).

Table 46 Dynamics of balance sheet, thousand MDL, 2009-2020

Indicators, MDL 2009 2010 2011 2012 2013 2014

Total Assets 25 878,0 25 933,9 289 124,8 474 109,2 464 113,0 457 277,5

Long-Term Assets 24 500,0 24 258,4 277 692,0 448 733,7 418 272,0 387 810,3 - Fixed Assets 87 607,7 87 607,7 185 735,0 529 116,1 529 116,1 529 116,1 Short Term Assets 1 378,1 1 675,5 11 432,7 25 375,5 45 841,1 69 467,2 - stocks of commodities and materials

668,0 667,4 1 801,6 1 347,8 958,6 690,7

- short-term receivables 694,0 994,0 1 577,0 4 148,5 5 590,9 5 935,5 - financial resources 11,3 9,2 8 048,8 19 873,7 39 285,8 62 835,0

Total Liabilities 25 878,0 25 933,9 289 124,8 474 109,2 464 113,0 457 277,5

Equity 25 755,3 25 796,1 288 521,5 333 446,5 351 417,2 372 546,8

- authorized capital 30 510,8 30 510,8 275 510,8 275 510,8 275 510,8 275 510,8 - retained earnings (5 124,4) (5 083,5) 12 641,8 57 566,8 75 537,5 96 667,1 Long Term Debt - - - 140 000,0 112 000,0 84 000,0 -long-term bank loans - - - 140 000,0 112 000,0 84 000,0 Short Term Debt 122,7 137,8 603,3 662,7 695,9 730,7 - debts on commercial bills 4,2 4,5 456,6 479,5 503,4 528,6

- short-term calculated debt 118,5 133,3 146,6 183,3 192,5 202,1

Table. 46. Continuation

Indicators, MDL 2015 2016 2017 2018 2019 2020

Total Assets 453 697,5 453 780,9 457 339,9 492 485,1 530 073,1 570 225,8

Long-Term Assets 357 348,6 326 886,8 296 425,1 265 963,4 235 501,7 205 040,0 - Fixed Assets 529 116,1 529 116,1 529 116,1 529 116,1 529 116,1 529 116,1 Short Term Assets 96 348,9 126 894,1 160 914,7 226 521,7 294 571,4 365 185,8 - stocks of commodities and materials

416,8 437,7 459,6 482,5 506,7 532,0

- short-term receivables 6 235,6 6 547,6 6 875,0 7 218,8 7 579,7 7 958,7 - financial resources 89 690,1 119 902,1 153 573,1 218 813,0 286 477,3 356 687,0

Total Liabilities 453 697,5 453 780,9 457 339,9 492 485,1 530 073,1 570 225,8

Equity 396 930,3 424 667,3 455 862,6 490 626,1 527 813,1 567 544,9

- authorized capital 275 510,8 275 510,8 275 510,8 275 510,8 275 510,8 275 510,8 - retained earnings 121 050,6 148 787,7 179 983,0 214 746,5 251 933,5 291 665,2 Long Term Debt 56 000,0 28 000,0 - - - - -long-term bank loans 56 000,0 28 000,0 - - - - Short Term Debt 767,2 1 113,6 1 477,2 1 859,0 2 260,0 2 680,9 - debts on commercial bills 555,0 890,8 1 243,3 1 613,4 2 002,1 2 410,1

- short-term calculated debt 212,2 222,8 233,9 245,6 257,9 270,8

During its activity, the managing company of the industrial park "CAAN" JSC will develop a constant growing business, characterized by its specificity and reflected in the data reflected in financial statements. Thus, taking into account the investments made by the managing company in creating infrastructure, utilities, in repair and renovation of buildings and in construction of the cold store complex and packing house, the property increases from 25.9 million MDL in 2009 up to 289.1 MDL in 2011 and reaches 570.2 million MDL in 2020, reflecting an increase of about 2 times in 10 years (2020 compared to 2011).



Table 47. Structure of assets for the period 2009-2020

Indicators, MDL 2009 2010 2011 2012 2013 2014

Total Assets 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Long-Term Assets 94.7% 93.5% 96.0% 94.6% 90.1% 84.8% - Fixed Assets 338.5% 337.8% 64.2% 111.6% 114.0% 115.7% Short Term Assets 5.3% 6.5% 4.0% 5.4% 9.9% 15.2% - stocks of commodities and materials 2.6% 2.6% 0.6% 0.3% 0.2% 0.2% - short-term receivables 2.7% 3.8% 0.5% 0.9% 1.2% 1.3% - financial resources 0.0% 0.0% 2.8% 4.2% 8.5% 13.7%

Total Liabilities 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Equity 99.5% 99.5% 99.8% 70.3% 75.7% 81.5% - authorized capital 117.9% 117.6% 95.3% 58.1% 59.4% 60.3% - retained earnings -19.8% -19.6% 4.4% 12.1% 16.3% 21.1% Long Term Debt 0.0% 0.0% 0.0% 29.5% 24.1% 18.4% -long-term bank loans 0.0% 0.0% 0.0% 29.5% 24.1% 18.4% Short Term Debt 0.5% 0.5% 0.2% 0.1% 0.1% 0.2% - debts on commercial bills 0.0% 0.0% 0.2% 0.1% 0.1% 0.1% - short-term calculated debt 0.5% 0.5% 0.1% 0.0% 0.0% 0.0%

Table. 47 Continuation.

Indicators, MDL 2015 2016 2017 2018 2019 2020

Total Assets 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Long-Term Assets 78.8% 72.0% 64.8% 54.0% 44.4% 36.0% - Fixed Assets 116.6% 116.6% 115.7% 107.4% 99.8% 92.8% Short Term Assets 21.2% 28.0% 35.2% 46.0% 55.6% 64.0% - stocks of commodities and materials 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% - short-term receivables 1.4% 1.4% 1.5% 1.5% 1.4% 1.4% - financial resources 19.8% 26.4% 33.6% 44.4% 54.0% 62.6%

Total Liabilities 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Equity 87.5% 93.6% 99.7% 99.6% 99.6% 99.5% - authorized capital 60.7% 60.7% 60.2% 55.9% 52.0% 48.3% - retained earnings 26.7% 32.8% 39.4% 43.6% 47.5% 51.1% Long Term Debt 12.3% 6.2% 0.0% 0.0% 0.0% 0.0% -long-term bank loans 12.3% 6.2% 0.0% 0.0% 0.0% 0.0% Short Term Debt 0.2% 0.2% 0.3% 0.4% 0.4% 0.5% - debts on commercial bills 0.1% 0.2% 0.3% 0.3% 0.4% 0.4% - short-term calculated debt 0.0% 0.0% 0.1% 0.0% 0.0% 0.0%

I. Analysis of assets .

The Table above shows the key changes in the structure of assets for the first forecast period - 2011 to 2020.

For the period 2011 - 2020, the major changes in the assets of the company are the followings:

- Long-term investments in assets made during the years 2011-2012 have an increased share for the first forecast period and, in terms of share in total assets, they are reduced as a result of moral and physical wear calculation;

- Short-term assets, which for the first forecast period have an insignificant share, at the end of the forecast period increases considerably. The increase is determined by the accumulation of funds on the settlement account of the company, following a profitable activity.

II. Analysis of liabilities .

Ownership equity.

As a result of investments made from the funds of the managing company "CAAN" JSC, equity value is increased up to 275 million. MDL. Further, the profits generated following the activity and



accumulated from one period to another determine an increase in net profit, which implies a final value of 291.6 million MDL in 2020 or 51.1% of the total funding sources.

Long term loans.

As noted, the investments made in 2012 are expected to be made from external sources: external donors and various regional projects. In this respect, at the end of 2012 the total amount of attracted resources is expected to make up 140 million MDL, which constitutes 29.5% of total funding sources. Loans are expected to be attracted for a period of five years, for which the dynamics of respective loans shows a downward trend and will completely disappear in 2016 with the final instalment payment.

Short-term funding sources

Like any economic activity, leasing of available spaces is more or less influenced by various purchases. In this regard, in the future „CAAN" JSC will have some liabilities that will not affect its paying capacity or significant debt since their weight does not exceed 0.4% of total assets, i.e. the amount of 2 680,9 thousand MDL at end of 2020.

7.2.6 Forecast of financial indicators

Evolution of main financial indicators of the company during the analysis period is presented in the Annex 13. of the business plan.

7.2.6.1 Indicators of profitability

Calculations and forests made for an analyzed period shows business profitability and its profitable activity.

Table 48. Main indicators of profitability

Indicators 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Investment Profitability - - 7% 10% 8% 10% 11% 13% 14% 16% 17% 18%

Return On Equity (ROE) -1% 0% 11% 14% 10% 12% 13% 14% 14% 15% 15% 15%

Return On Assets (ROA) -1% 0% 11% 12% 8% 9% 11% 12% 14% 15% 15% 14%

Gross Margin (%) 53% 53% 78% 78% 64% 65% 67% 68% 70% 71% 72% 74%

Net Profit Margin -17% 2% 72% 68% 41% 46% 50% 55% 59% 62% 63% 64%

Return on equity (ROE) is one of the most important indicators of efficiency, being used by owners or potential donors in making an investment decision. During the forecast period a high level of this value of 11%, which is constantly growing determines the profitability of invested funds.

Return on assets (ROA) measures the profitability of the project as relative value of the total engaged assets. The ROA indicator has a value of over 8% throughout the entire forecast period, thus confirming the profitability of the business and that a MDL supplemented to the asset will generate a profit of 0.08 MDL within a period of 12 months or 0.14 MDL for the last forecast year.

Evolutionally, this indicator has an overall upward trend, which is beneficial, indicating that the direction of company’s development is correct.

The table shows that the gross profit margin exceeds 60% throughout the forecast period. This fact is positively appreciated as being determined by the growth of sales revenue with a higher rate than the increase in cost of sales during forecast 10 years. This may arise as a result of favourable price conjuncture, but also by increasing the existing volume of demand.

Net profit margin is the best method of diagnosing the overall ability of the company to obtain profit, given that costs, expenses, and paid tax are taken into account, and the value of over 41% determines



the profitability of the company. This value is specific to companies involved in leasing of spaces available.

7.2.6.2 Liquidity indicators

Liquidity is one of the main indicators characterizing the ability of the company to carry out its immediate payments. The indicators characterizing the level of liquidity are the following.

Table 49. Main liquidity indicators

Indicators 2009 2010 2011 2012 2013 2014

Liquidity Ratio (Coverage) 11,23 12,16 18,95 38,29 65,88 95,07

Intermediate Liquidity (Acid Test) 5,75 7,28 15,96 36,25 64,49 94,12

Immediate liquidity 0,09 0,07 13,34 29,99 56,46 86,00

Working capital (thousand, MDL) 1 255,3 1 537,7 10 829,5 24 712,8 45 145,2 68 736,5

Table. 49. Continuation.

Indicators 2015 2016 2017 2018 2019 2020

Liquidity Ratio (Coverage) 125,58 113,95 108,93 121,85 130,34 136,22

Intermediate Liquidity (Acid Test) 125,03 113,55 108,62 121,59 130,12 136,01

Immediate liquidity 116,91 107,67 103,96 117,70 126,76 133,05

Working capital (thousand, MDL) 95 581,7 125 780,5 159 437,5 224 662,7 292 311,4 362 504,9

As shown in the Table above, the overall liquidity (coverage liquidity) for the period 2011-2020 is well above the minimum acceptable threshold (1.5). On the one hand an excessive liquidity is a factor that the company is not able to invest its available resources. On the other hand, the company’s specific related to space leasing does not provide any debts to suppliers and the permanence of available cash liquidity reflect indicators much higher than the minimum acceptable values.

7.2.6.3 Indicators of financial stability

In terms of solvency indicators, it can be concluded that for "CAAN" JSC they are acceptable.

Table 50. Main indicators of financial stability

Indicators 2009 2010 2011 2012 2013 2014

Capital Adequacy Ratio 99,5% 99,5% 99,8% 70,3% 75,7% 81,5%

Leverage Ratio 0,00 0,01 0,00 0,30 0,24 0,19

Financial Stability Coefficient 0,05 0,06 0,04 0,05 0,10 0,15

Interest Coverage Ratio - - - - 4,98 6,36

Debt Service Ratio - - - - 1,46 1,60

debt service rate - - - 1,9 2,1



Tab. 50 Continuation.

Indicators 2015 2016 2017 2018 2019 2020

Capital Adequacy Ratio 87,5% 93,6% 99,7% 99,6% 99,6% 99,5%

Leverage Ratio 0,13 0,06 0,00 0,00 0,00 0,00

Financial Stability Coefficient 0,21 0,28 0,35 0,46 0,55 0,64

Interest Coverage Ratio 8,69 13,38 27,54 - - -

Debt Service Ratio 1,74 1,90 2,09 - - -

debt service rate 2,4 2,7 3,1 - - -

If we were to consider the company in terms of financial stability, when it is easy to see that funding of the current activity is made mostly from its own resources. Borrowings contracted in 2012 will cause a temporary increase in borrowing up to the 30% of total funding sources, which would not involve the downside risks to the business.

The correct funding relation between assets and their sources, determined by the financial stability coefficient confirms a correct management maturity. Although for the first forecast years (2010-2013) the financial stability coefficient has minimum values, further development of the company involves an increase and safety for future periods.

The company’s ability to pay off the debts of main creditors is determined by the relation exposed through the interest coverage ratio, debt service or RDD.

One of the most relevant indicators in this regard is the debt service ratio, which explains the correlation between the generated net profit, and interest and loan payments. Its optimal value makes up 1.2, and the specificity is that the RDD is calculated only for investment projects. In this regard, calculation of the RDD took into account only credit payments related to the investment goals of the company, and its framing within 1.9 to 3.1 confirms once again that credit and interest payments will not threaten its current activity.

7.2.6.4 Turnover Speed Indicators

In terms of revenue generation abilities following the use of each component of company’s assets, the values of these indicators are given by the company’s specificity - lease of available spaces. Given that the available buildings have considerable values (over 400 million MDL), assents indicators will generate enough negative values, but these are obtained in conditions when during income calculation pessimistic options of development were taken into account.

Table 51 Main indicators of turnover speed

Indicators 2009 2010 2011 2012 2013 2014

Time of turnover of assets (days) 4 830,0 4 388,5 2 324,9 2 119,5 1 954,5 1 828,0

Time of turnover of long term assets (days) 4 560,0 4 129,8 2 228,2 2 017,3 1 806,1 1 599,2

Time of turnover of current assets 269,9 258,6 96,7 102,2 148,4 228,8

Time of turnover of short-term receivables (days) 127,7 143,0 19,0 15,9 20,3 22,9

Time of turnover of loan debt (days) 1,6 1,6 15,7 12,0 5,6 5,9

Time of turnover of stocks of commodities and materials (days)

267,0 240,6 83,9 40,4 13,2 9,4



Table. 51 Continuation.

Indicators 2015 2016 2017 2018 2019 2020

Time of turnover of assets (days) 1 721,3 1 637,5 1 561,5 1 550,3 1 589,5 1 633,4

Time of turnover of long term assets (days) 1 408,0 1 234,7 1 068,2 917,9 779,5 654,0

Time of turnover of current assets 313,3 402,8 493,2 632,4 810,0 979,4

Time of turnover of short-term receivables (days) 23,0 23,1 23,0 23,0 23,0 23,1

Time of turnover of loan debt (days) 6,2 8,2 12,1 16,2 20,4 24,9

Time of turnover of stocks of commodities and materials (days)

6,3 4,9 5,1 5,3 5,6 5,9

During the forecast period, in terms of turnover speed indicators, an increase in the business dynamics is observed, while most of the indicators indicate decreased duration of rotation. For companies leasing real estate, it is specific that the indicators of the turnover period are relatively high. The main reason is that generated revenues, compared to the balance of available assets, have rather big discrepancy, which is explained by the need of moral and physical wear of buildings within 30 years.

7.3 Estimation of investment efficiency

In any activity, a key factor of the decision to invest or not is given by the future flows generated by the investment. In this respect, it is necessary to analyze the efficiency of investment thought the net present value method NPV (Net Present Value)

Table 52. Determination of investment efficiency (Annex 12. )

Investment Value I 459 905 036 MDL

Discount Rate R 10%

Period of Recoverability T 9,9 years

Net Present Value NPV 4 201 022 MDL

Rates of Return RR 10%

Profitability Index (PI) 1 01

Net Present Value (NPV) is a fundamental criterion for economic and financial evaluation of investment projects. NPV represents the capital surplus for a certain period of investment life. Given the fact that the positive value of NPV is a necessary prerequisite for investment projects, a higher value as it would lead to greater profitability of the project. For the activity of the industrial park formed on the territory of „CAAN” JSC of Straseni, the total value of investment falls within 27 594 276 EURO (459 905 036 MDL) distributed by components in accordance with the annexes presented in this study. In determining the value of VAN, the following mathematical formula was taken into account:

I

r

CTVVVAN

n

tt

0 1, where

VV - sales revenue CT – total costs r – discount rate at a level of 10% t –considered year n –number of periods

Calculations determine the net value of the NPV in the amount of 4 201 022 MDL. This is an intrinsic value, which confirms the profitability of the business, but does not involve a final decision since there is no any predetermined level of comparison. The value over 4,2 million MDL indicates that the investment will now generate a positive final value within the considered period (10 years).



Internal Rate of Return (IRR), expresses the level of income equalizing the cost of capital, which equals the updated income with undated expenses, making the amount of income to be equal to zero. IRR is the minimum threshold of profitability of a project, below which it is not effective. The estimated value, calculated depending on the considered marginal criteria, shows for the managing company a level of 10%. Mathematically the value of IRR is expressed by the expression:

with the same meanings of indicators as those mentioned above.

The period of recovery of the investment, given the above assumptions, is estimated at 10 years and reflects, in conditions when the discount rate would be similar to the internal rate of discount, the period during which the company would cover all costs of the investment made of profits generated by this investment.

The profitability index of the investment is estimated at 1,01 and shows the value of the updated surplus capital per every reinvested MDL. The investment requirement for any investment project is that this amount should be greater than the unit. Given that investments in constructions have periods of recovery of over 10 years and that within the financial calculations the most pessimistic forecasts were taken into account, a 10-year recoverability is acceptable for the company’s investments, when in 2013 payments of dividends shall already be made.



8 SOCIAL AND ECONOMIC AND ENVIRONMENTAL IMPACT OF THE INDUSTRIAL PARK ON THE REGION

Impact on the country's economic development.

Creation of the industrial park has a direct impact on economic development and industrialization of the country through:

Creation of a concentration pole of manufacturers, service providers, investors, suppliers and beneficiaries on the territory of the Center development region, which, due to its proximity to the capital, will increase the attractiveness of the region, as well as of the country as a whole;

Increase in the economic activities in industry, and therefore the increase of its share in the country’s GDP;

Attraction of foreign and private investments, with direct implications in the economic growth of the state, due to the creation of new production capability, more jobs, new consumers and taxpayers;

Providing access to distribution channels of foreign investors;

Increase in trade balance if they are export-oriented products.; ‚

Support of the increase in the revenues to the state budget due to paid taxes and contributions paid (see Table above);

Development of infrastructure and upgrading utilities of the industrial park;

Depolarization of economic activities in the Republic mainly concentrated in Chisinau Municipality.

Impact on the region.

Table 53. Forecast of business growth after creation of the park

Indicators 2008 2009 2010 2011

Revenues from sales, thousand MDL 75 880, 2 80 422,6 83 163,0 169 037,5

Existing companies 73 913,1 78 455,7 83 163,0 88 152,8 New companies 54 985,0

Managing company 1 967,0 1 967,0 2 154,7 25 899,8

Average number of staff, persons 236 237 240 407

Existing companies 203 204 207 224

New companies 143 Managing company 33 33 33 40

Tax and VAT, MDL 22 404,7

Existing companies 11 684,0

New companies 7 287,9 Managing company 3 432,8

Health insurance contributions, paid in MDL 252,1 276,9 280,9 612,0

Existing companies 252,1 276,9 280,9 304,6

New companies 194,1 Managing company. 113,4

Social insurance contributions, paid in MDL 1 149,2 994,9 1 009,6 2 212,9

Existing companies 1 149,2 994,9 1 009,6 1 094,4

New companies 697,3 Managing company 421,2



Table. 53. Continuation.

Indicators 2012 2013 2014 2015

Revenues from sales, thousand MDL 296 229,8 331 761,2 350 796,9 370 931,1

Existing companies 93 442,0 99 048,5 104 991,4 111 290,9 New companies 137 458,0 145 705,5 154 447,8 163 714,7

Managing company 65 329,8 87 007,2 91 357,6 95 925,5

Average number of staff, persons 644 705 771 844

Existing companies 247 272 299 329

New companies 357 393 432 476 Managing company 40 40 40 40

Tax and VAT, MDL 40 716,7 46 899,2 49 770,7 52 613,7

Existing companies 12 385,1 13 128,2 13 915,9 14 750,8

New companies 18 219,1 19 312,3 20 471,0 21 699,2 Managing company 10 112,5 14 458,7 15 383,8 16 163,6

Health insurance contributions, paid in MDL 939,2 1 027,2 1 123,7 1 229,5

Existing companies 335,0 368,5 405,4 445,9

New companies 485,1 533,6 587,0 645,7 Managing company 119,1 125,0 131,3 137,8

Social insurance contributions, paid in MDL 2 413,1 2 632,3 2 872,3 3 135,2

Existing companies 1 203,8 1 324,2 1 456,7 1 602,3

New companies 767,0 843,7 928,1 1 020,9 Managing company 442,3 464,4 487,6 512,0

Source: NBS and forecasts of ProConsulting

Creation of the industrial park aims to improve social and economic development of the CDR of the Republic of Moldova and efficient use of its resources by:

creating within the park over 800 new jobs in late 2015, of which 40 will be provided by the managing company with an average salary of 250 EURO per month;

increasing taxes in the state budget amounting to over 22 million MDL in the year of park launch 2011, of which the managing company and resident companies will bring a total of 10 million MDL. The year of valorization and modernization of the entire area - 2012 – will record a substantial almost double increase up to 40 million MDL of taxes paid to the budget of the park;

increasing medical contributions amounting to over 1 million of employees and employers, by 2015 and social insurance contributions making up over 3 million MDL in 2015) ((see Table 53. Forecast of business growth after creation of the park ).

increasing living standards of people in the region, due to provision of stable employment and income;

raising the qualification of persons engaged in industrial activities of the park, enhancing professional development of population in the region.

attracting new specialists - teachers in the region and integrating of students to carry out their practical work experience within the park;

substantial contribution to increasing revenues from sales in the region amounting over 169 million MDL since its launch in 2011, amounting over 296 million MDL in the following year and 370 million MDL in 2015. The contribution of new attracted companies in this regard will make up on average of 60 percent.

supporting the region's agricultural complex by using advanced refrigerator and packing house (with a huge capacity of 30 000 tonnes), valued at an estimated amount of over 12 million EURO;



providing direct access to companies in the region to leasing spaces of the refrigerator in order to store the agricultural production and services of packing house, which will facilitate the collaboration of companies of the same profile and will allow a general increase in the competitiveness of the region;

providing companies of the region a territory of activities with upgraded production, spaces for storing finished products and specialized spaces for installing large capacity industrial equipment, as well as office spaces;

providing some price discounts for rental payment, insuring utilities (electricity, gas, water, sewerage, access roads on the territory and on the area near the park);

insuring companies of the park with access to railway, connection to the capital of the Republic and direct access and connection with no less than 7 districts;

insuring safety for property of park residents;

providing terminal, handling, storage, brokers, hotels services;

providing technical, legal and accounting consulting services on the territory of the park and for companies of the region;

increasing export of local enterprises and investment attractiveness of the region due to higher volume of sales within branches, expansion of local marketing of agricultural and industrial products;

attracting new and modern technologies in the region and raising the level of innovativeness of products and services in the region;

increasing exports of local enterprises and investment attractiveness of the region through increase in direct investments in the region in the amount of about 28 million EURO by the managing company and by potential residents, estimated at around 20 million EURO.

Impact on the managing enterprise will generate:

extraordinary increase in sales revenues, which is expected to achieve by 2020 about 95 million MDL, mainly from production activity;

use of staff experience and its involvement in leasing refrigerator spaces and packing house, which will bring about 50% of annual return;

upgrading existing spaces and normal term of recoverability within 9,9 years of investments;

raising efficiency of assets currently available to the company;

reduction of the speed of stocks rotation that will lower the risk of aging products and will decrease the innovativeness coefficient of these products;

making effective the organizational process and launch of marketing activities and promotion at the company;

use of technical, accounting and legal experience of the staff of the company in provision of consulting services.

Environmental impact.

The managing company activity related to storage of fruits and vegetables is an activity that has a relatively small impact on the environment, involving the use of substances for the maintenance of refrigeration equipment and eventual wastes formed as a result of packing vegetables and fruits. Therefore the activity, can be classified in category B of environmental risk in conditions when the company strictly monitors the storage and operation processes of teflon-based refrigeration equipment.



In order to reduce the environmental impact, minimize the risk of air pollution, soil or groundwater, the company will regularly monitor:

- waste management - methods and places of collecting and storing wastes of all types generated from storage of fruits and vegetables are identified;

- will update sanitary permits for waste management methods;

- refrigeration equipment will meet international environmental standards, and they will be annually inspected and checked in order to prevent environmental accidents.

Moreover, benefits from implementing industrial park lies in improving the overall infrastructure of the town and region as a whole with positive implications on the environment by carrying out repair of roads, gas and water supply networks, which will also serve a part of neighbouring localities of the industrial park, which will allow reduction of environmental pollution. Moreover, the creation of the industrial park will determine the state authorities to build transport and communication infrastructure facilities, reconstruction of the industrial wastewater treatment plant with beneficial impact on the region.

9 GENERAL CONCLUSIONS

In general, the end of this study shows that the concept of building an industrial park on the territory of "CAAN" JSC in Straseni is considered feasible. This conclusion is based on the approaches from the following perspectives:

legal and organizational perspective, which denotes the lack of any major impediments to implement this concept, and raising the quality of managing company’s management, including by applying marketing and promotion practices;

economic and financial perspective, which proved the viability of the project, the benefits of increased economic performance of the managing company, current companies operating on the territory, as well as of the economic potential of resident companies;

technical and operational perspective, which proved the positive impact of modernization and capital repairs of the park as a whole, as well as on improving the town appearance and raising the quality of life and the effectiveness of the recoverability of assets invested in these works;

market perspective, which shows, in addition to launching production activity (services of the refrigerator and the packing house) for the managing company, the substantial contribution to the creation of refrigerating chain in the region, supporting local agriculture producers, and, respectively, the opportunity to increase national export competitiveness;

project impact perspective, which has shown fiscal, social, economic and environmental benefits both at regional and country level.

Finally, it is emphasized that the project of building the industrial park on the territory of "CAAN" JSC in Straseni will be EFFICIENT in conditions of observing: the optimal scenario, proposed action plan and the amount of the estimated investment.



Annex 1. List of long term assets as of October 1, 2010

Types of fixed assets Unit Year

Initial amount, th.

MDL

Residual amount, th.

MDL

Wear, th. MDL

Wear%

B 7 8 9 11 10 12

IV Machinery and equipment, total : including:

1. Machinery and power equipment

10072 SHIELD C 952219 1 90.01 6753.6 1859.0 4895 72.47

10075 TRANSFORMER ТС 313 160/5 1 86.11 4969.2 775.58 4194 84.39

10077 Network Distributor 0,4KW (building no.5 ) 1 Jan-83 8265.6 0 8266 100.00

10090 RECTIFIER ВУК 67/140 1 87.01 4330.0 0.00 4330 100.00

10091 RECTIFIER ВУК 67/140 1 82.01 4397.0 0.00 4397 100.00

10092 ЗАРЯДНОЕ УСТРОЙСТВО УЗА 80/110 1 88.01 3310.0 870.23 2440 73.71

11661 Power equipment 1 Jan-83 11168.4 0.00 11168 100.00

10099 DEVICE USING SPRAY ELECTROLESS PLATINGКОМ-2 ЗN130

1 83.01 28240.8 0.00 28241 100.00

10100 * DISTRIBUTION NETWORK 0.4 KW (Building no.2)

1 80.01 193438.2 0.00 193438 100.00

10158 DIESEL GENERATOR Д-5 МА-5.0 1 85.01 22386.0 0.00 22386 100.00

10159 STATION 5 БГ 48-22 1 87.01 1623.6 775.62 848 52.23

10160 HYDRAULIC STATION 2 БМИГ 48 84 1 87.01 3000.0 716.58 2283 76.11

10161 STATION 2 Г 13 26 МСП 1 87.01 5412.0 1292.70 4119 76.11

10918 EQUIPMENT П -164 1 85.01 24203.4 3201.36 21002 86.77

11471 RECTIFIER ВУК 67/140 1 83.01 4280.4 0.00 4280 100.00

11472 RECTIFIER ВУК 90/25 2 82.01 8560.8 0.00 8561 100.00

11790 * EQUIPMENT FOR HOT WATER SUPPLY 1 90.01 22900 0.00 22900 100.00

11791 * EQUIPMENT FOR HOT WATER SUPPLY 1 90.01 86468.9 0 86469 100.00

12224 WELDING MACHINE А-1230 С ВДГ-303 1 96.11 8326.8 4854.98 3472 41.69

12225 WELDING MACHINE УДГ-350 1 96.11 1285.2 999.12 286 22.26

TOTAL 21 453320 15345 437975

2. Working machinery and equipment

10076 HIGH-FREQUENCY DEVICE FOR MELTING METALS ВПО 60/074

1 79.01 65586.0 0.00 65586 100.00

10088 Vulcanizer medium sett. 1 Jan-83 1426.8 214.17 1213 84.99

10089 RECTIFIER УЗЛ 150/18 1 Jan-82 4329.6 0.00 4330 100.00

10153 REFRIGERATING UNIT. ВСЭ-800 1 85.01 1984.0 0.00 1984 100.00

10169 BENCH-TYPE DRILLING MACHINE 2 М 112 1 77.08 1500.0 0.00 1500 100.00

10176 HYDRAULIC PRESS . 2135 М 1 80.01 2535.0 0.00 2535 100.00

10180 LUBRICATING REFUELLING UNIT С-101 1 86.01 6882.0 0.00 6882 100.00

10181 OIL-FILLING PUMP 3155 М 1 86.01 5022.0 0.00 5022 100.00

10197 WELDING MACHINE ВДУ-504 1 86.01 4464.0 0.00 4464 100.00

10170 DRILLING MACHINE 2 Л-53У 1 80.04 7216.0 0.00 7216 100.00

10187 OVERHEAD CRANE Г/П 1тс 1 Jan-80 1625 0 1625 100.00

10188 OVERHEAD CRANE Г/П 0.5 Т 1 80.01 1625.0 0.00 1625 100.00



10191 OVERHEAD CRANE Г/П 2Т 1 80.01 3500.0 0.00 3500 100.00

10198 WELDING MACHINE ПДГ -312 1 88.01 3273.0 0.00 3273 100.00

10204 HORIZONTAL MILLING MACHINE 6 Р-82 Г 1 84.01 11616.0 1152.42 10464 90.08

10205 HORIZONTAL MILLING MACHINE 6 Р-80 1 80.01 10800.0 0.00 10800 100.00

10210 CYLINDRICAL GRINDING MACHINE 3 Б -12 1 77.01 20680.0 0.00 20680 100.00

10212 CYLINDRICAL GRINDING MACHINE 3 М- 151 1 78.01 32001.0 0.00 32001 100.00

10213 SURFACE GRINDING MACHINE 3 Л 722 В 1 87.01 38640.0 4684.14 33956 87.88

10214 SURFACE GRINDING MACHINE 3 Л 722 А 1 83.01 38650.0 1322.22 37328 96.58

10216 SURFACE GRINDING MACHINE 3 Д 725 1 78.01 38640.0 0.00 38640 100.00

10217 SURFACE GRINDING MACHINE 3 Д 722 1 79.01 38500.0 0.00 38500 100.00

10225 Omnimill versatile machine 676 П 1 May-79 10000 0 10000 100.00

10227 SCREW-CUTTING LATHE. 16 К -20 1 77.01 22000.0 0.00 22000 100.00



10238 Screw-cutting lathe. 6Б75ВФ 1 00.80 15600 600 15000 96.15

10240 INTERNAL GRINDING MACHINES. 3 К 228 1 81.09 27750.0 0.00 27750 100.00

10242 ELECTROMAGNETIC PULSE EROSION MACHINE . 4 Е 723-01 ВФ

1 86.05 38060.0 0.00 38060 100.00

10243 MILLING AND FAX MACHINES 6 Г 463 1 87.01 5600.0 1647.58 3952 70.58

10246 AUT. LATHE CUTTING CIRCULAR 8 Г 663-100 1 87.05 36079.0 3003.42 33076 91.68

10248 Combined press-scissors, С 229 А 1 Jul-85 4526 526 4000 88.38

10249 AIR HAMMER М -4132 1 80.02 20150.0 0.00 20150 100.00

10250 FORGE CHIMNEY 1 79.01 8350.0 0.00 8350 100.00

10251 SETTING "" ELECTRON-10 " 1 81.12 5855.0 0.00 5855 100.00

10252 BRIDGE CRANE Г/П 5 Т 1 78.12 28200.0 0.00 28200 100.00

10253 Bridge crane Г/П 5тс 1 Dec-78 28200 0.00 28200 100.00

10254 Elec. Overhead crane Г/П 3тс 1 Feb-81 4030 0.00 4030 1

10278 Surface grinding machine. 3Г71М 1 Jan-80 21000 0.00 21000 100.00

10265 HAMMER МБ 4136 1 84.04 26500.0 0.00 26500 100.00

10280 Screw-cutting lathe.16К20 ПФ1 1 Nov-78 24000 0 24000 100.00

10288 HORIZONTAL BORING MACHINE . 2 А 614-1 1 85.1 48900.0 4213.23 44687 91.38

10289 UNIVERSAL GRINDING MACHINE 3 В 642 1 78.11 4500.0 0.00 4500 100.00

10305 Bridge crane Г/П 5тс 1 Dec-78 28500 0 28500 100.00

10306 OVERHEAD CRANE Г/П 3 Т 1 81.02 5600.0 0.00 5600 100.00

10308 ELEVATOR ТХП-55 1 82.02 10200.0 0.00 10200 100.00

10320 Vertical Drilling Machine .2Н 135 1 Jan-88 10038 0 10038 100.00

10330 LIFT Г/П 300 КГ 1 86.01 8000.0 0.00 8000 100.00

10332 VIBRATION UNIT FOR GRINDING AND POLISHING OF DETAILS ГЮ 1616

1 90.01 6493.0 1588.22 4905 75.54

10336 REVOLVER LATHE 1 Г 340 П 1 88.12 16500.0 3648.58 12851 77.89

10339 Lapping Machine. 2М112 1 Jan-87 1500 0 1500 100.00

10348 Crank press. КД2324Б 25тс 1 Feb-83 13650 0.00 13650 100.00

10352 Straight side single-action one point press. КД2326 40тс

1 Sep-88 17850.0 0 17850 100.00

10355 STRAIGHT SIDE SINGLE-ACTION ONE POINT PRESS. КД 2128 Е 63 ТС

1 88.01 19440.0 256.29 19184 98.68

10357 Straight side single-action one point press. КД2130Е 100тс

1 Oct-83 30857 0 30857 100.00

10368 INJECTION MOULDING MACHINE Д 3132-250 1 81.12 40250.0 0.00 40250 100.00

10369 INJECTION MOULDING MACHINE Д 3134-500 1 86.12 47600.0 0.00 47600 100.00

10372 BRIDGE CRANE Г/П 5 ТС 1 78.12 28000.0 0.00 28000 100.00

10371 Grinding machine. 3Б 634 1 Aug-84 2500 0.00 2500 100.00

10376 MONORAIL Г/П 3 ТС 1 84.01 2700.0 267.87 2432 90.08

10384 OVERHEAD CRANE Г/П 3 ТС 1 79.01 5600.0 0.00 5600 100.00

10388 CONTOUR WELDING MACHINE УХА-4 МШ-2201 1 83.01 4849.0 0.00 4849 100.00

10390 MECHANIZED WAREHOUSE НОД-14 1 80.01 12200.0 0.00 12200 100.00

10391 GRINDING MACHINE 3 К 633 1 81.01 2080.0 0.00 2080 100.00

10394 STAND FOR BENDING STEEL ROLLS791220 1 83.01 1292.5 0.00 1293 100.00

10399 AUT. STAMP MACH. Д/AIR COOLED STAMP MACH. WITH RES. STR.

1 87.01 10290.0 0.00 10290 100.00

10400 CANTILEVER REVOLVING CRANE НММ-222 Г/П 1 ТС

1 84.01 2500.0 248.03 2252 90.08

10402 CANTILEVER REVOLVING CRANE НММ-222 Г/П 1 ТС

1 84.01 2500.0 248.03 2252 90.08

10404 CANTILEVER REVOLVING CRANE НММ-222 1 85.01 2500.0 410.53 2089 83.58

10416 STAND FOR TESTING STRENGTH AND DENSITY 1 85.07 3450.0 678.6 2771 80.33

10424 BRIDGE CRANE Г/П 10 Т 1 83.12 28000.0 2625.0 25375 90.63

10425 SCREW-CUTTING LATHE1 А 64 1 82.05 28600.0 0.00 28600 100.00

10426 Grinding machine 3Б633 1 Feb-80 2340 0 2340 100.00

10429 Grinding machine 3Б633 1 Jan-88 2014 0.00 2014 100.00

10438 Welding machine А1230 с ВДГ-303 1 Jan-90 4600 0 4600 100.00

10440 Welding machine ПДГ 508с ВДУ 506 1 Jan-90 4300 0.00 4300 100.00

10447 WALKING CRANE Г/П 0,5 ТС 1 89.01 1800.0 763.58 1036 57.58

10450 Bridge crane Г/П 10тс 1 Dec-84 28200 99.4 28101 99.65



10452 SCREW-CUTTING LATHE 16 Е 20 (to trim the frontal part of the engine)

1 84.01 16730 0.00 16730 100.00

10455 Winding machine ТТ-20 1 Jan-88 2080 0 2080 100.00

10456 Device for balancing impeller 1 Jan-87 2303 0 2303 100.00

10460 Welding machine ВС-300 сА-547 60370 1 Jan-86 3596 0 3596 100.00

10467 WALKING CRANE 1 84.01 2500.0 248.0 2252 90.08


10474 Winding machine 5214 АСРН 1 Jan-81 2290 0 2290 100.00

10484 CANTILEVER REVOLVING CRANE Г/П 0,5 ТС 1 87.01 2500.0 735.53 1764 70.58

10485 MONORAIL WITH ELECTRIC TELPHER Г/П 0,5 ТС 1 86.01 1700.0 0.00 1700 100.00

10488 RAMPS 2 85.01 7068.0 0.00 7068 100.00

10491 * PUMPING STATION 2-ГО LIFT 1 88.01 6928.0 0.00 6928 100.00

10492 WELDING TRANSFORMERВДГ-303,З N 407 1 81.01 1300.0 0.00 1300 100.00

10502 RE-GASIFIER ДЭП-215 1 82.01 1984.0 0.00 1984 100.00

10511 * FIRE STATION EQUIPMENT 1 87.01 16693.6 0.00 16694 100.00

10514 * STATION EQ. FOR TREAT. PROD. AND RAIN WASTEWATER

1 87.01 15363.6 0.00 15364 100.00

10534 THREAD-CUTTING MACHINE 1 87.01 2168.0 637.85 1530 70.58

10537 * LOW PRESSURE AIR SYSTEM 1 80.01 92920.0 0.00 92920 100.00

10538 * SYSTEM AIR PRESSURE 1 80.01 51600.0 0.00 51600 100.00

10539 OVERHEAD CRANE WITH EL.TEL.Г/П 2 ТС 1 79.01 4000.0 0.00 4000 100.00

10540 * EQUIPMENT FOR WATER RECYCLING COMPRESSOR STATION

1 79.01 25935.8 0.00 25936 100.00

10549 * ADDITIONAL EQUIPMENT OF COMPRESSOR STATION

1 84.01 12765.0 0.00 12765 100.00

10555 * EQUIPMENT OF INTAKE HEATING 1 84.01 31766.0 0.00 31766 100.00

10556 LIFT АП-17 1 82.01 23000.0 0.00 23000 100.00

10557 LAPPING MACHINE 2 М-112 1 80.01 1500.0 0.00 1500 100.00

10568 PLANNING MACHINE 7112 1 79.01 56700.0 0.00 56700 100.00

10569 BORING MACHINE 2 А -622 1 80.01 48915.0 0.00 48915 100.00

10583 TURNING AND BORING LATHE 1516 1 84.01 62836.0 4075.47 58761 93.51

10586 Combined shearing press С 229 А 1 Jan-85 4526 0.00 4526 100.00



10602 WASHING MACHINE НОР-95 1 90.01 8960.0 1362.71 7597 84.79


10607 WELDING TRANSFORMER ТД -300 У 1 81.01 1300.0 0.00 1300 100.00

10608 MECHANICAL WAREHOUSE НОД-14 1 84.01 13200.0 0.00 13200 100.00

10618 ABRASIVE CUTTING MACHINE 8 В 242 1 84.02 24500.0 0.00 24500 100.00

10619 DEVICE FOR HEAT CUTTING PIPE Г-854 1 86.12 20270.0 0.00 20270 100.00

10620 ABRASIVE CUTTING MACHINE 8 В 242 1 84.12 24500.0 2917.1 21583 88.09

10621 Machine For cutting SHEETS. АСШ-70 1 84.12 3527.3 0.00 3527 100.00


10624 *Saw Machine 8725 Б 1 Nov-82 5646 0 5646 100.00

10625 PLASMA CUTTING DEVICE АВПР-404 1 86.01 10270.0 0.00 10270 100.00

10626 TUMBLING DRUM 1 85.12 4700.0 1257.8 3442 73.24

10632 CRANK PRESS КД 2330 100 Т 1 79.01 30857.0 0.00 30857 100.00

10634 CRANK PRESS MECH. К 2130 В 100 Т 1 84.01 30857.0 0.00 30857 100.00

10637 CRANK PRESS КВ 2132 160 Т 1 82.07 49371.0 0.00 49371 100.00

10641 FRICTION PRESS Ф 1734 250 Т 1 82.01 46700.0 0.00 46700 100.00

10642 FRICTION PRESS Ф 1734 250Т 1 84.12 46790.0 0.00 46790 100.00

10646 GUILLOTINE-SHEARS. Н 3222 1 79.1 42000.0 0.00 42000 100.00



10659 BENDING ROLLS 4-Х ВОЛКОВ ИБ 2424 1 84.04 84000.0 0.00 84000 100.00

10682 MACHINE ФЗС С ЧПУ 16 К 20 М 1 83.01 32490.0 0.00 32490 100.00

10691 REVOLVER LATHE. 1 К-341 Т 1 83.01 11080.0 379.05 10701 96.58






10698 RADIAL DRILLING MACHINE 2 М 55 1 84.12 14625.0 1741.29 12884 88.09

10700 DIAMOND-GRINDING MACHINE 3 Б 22 Д 1 77.01 5600.0 1861.02 3739 66.77

10703 GRINDING MACHINE 3 Е 692 1 92.01 3800.00 1861.02 1939 51.03

10711 KNEE-AND-COLUMN MILLING MACHINE 6 Р 82 1 82.12 11616.0 167.85 11448 98.56

10712 HORIZONTAL BROACHING MACHINE 7534 1 84.12 41360.5 4924.5 36436 88.09

10713 Bridge crane ГП5ТС 1 Dec-84 28000 98.7 27901 99.65


10716 VERTICAL DRILLING MACHINE С ЧПУ 2 Р 135 Ф 2 1 84.01 32040.0 0.00 32040 100.00

10717 VERTICAL DRILLING MACHINES. С ЧПУ 2 Р 135 Ф 2

1 84.01 32040.0 0.00 32040 100.00

10718 VERTICAL DRILLING MACHINES. С ЧПУ 2 Р 135 Ф 2

1 84.01 32040.0 0.00 32040 100.00

10724 REVOLVER LATHE. 1 П -365 1 81.07 16000.0 0.00 16000 100.00

10725 VERTICAL DRILLING MACHINES 2 Р 135 Ф 2 1 84.12 32040.0 0.00 32040 100.00



10728 ROUGH GRINDING MACHINE3 Б 634 ЗN71685 1 85.11 2500.0 545.9 1954 78.16

10730 REVOLVER LATH. 1 К 341 1 79.1 11080.0 0.00 11080 100.00

10731 GRINDING AND POLISHING MACHINE3 Б 854 1 83.12 3500.0 328.1 3172 90.63

10732 GRINDING AND POLISHING MACHINE 3 Б 854 1 83.12 3500.0 328.1 3172 90.63


10775 WALKING CRANE Г/П 1 ТС 1 84.01 1800.0 178.58 1621 90.08

10776 STAND FOR TESTING STRENGTH AND DENSITY 1 83.01 3930.0 0.00 3930 100.00

10781 WELDING MANIPULATOR М-11050 1 84.01 6280.0 0.00 6280 100.00

10785 Tube bending machine ВМС-23В 1 Jan-77 2590 0.00 2590 100.00

10789 * HORIZONTAL BROACHING MACHINE 7 Б 57 1 80.01 51104.0 0.00 51104 100.00

10797 HEATING RINSING BATH ПО 266 РО 2 84.01 12253.0 0.00 12253 100.00

10798 STAMP-MACHINE FOR STAMPING AND ASSEMBLY ФХ-18

1 87.01 10294 0 10294 100.00


1 87.01 10294 0 10294 100.00


1 87.01 10294 0 10294 100.00

10804 WALKING CRANE Г/П 1 ТС 1 84.01 2500.0 248.03 2252 90.08



10807 Machine for bending steel rolls 1 Jan-86 4204 0 4204 100.00

10808 Tube bending machine Г СТМ 21М 1 Jan-81 3500 0 3500 100.00

10810 * GRINDING MACHINE 3 Б 634 1 84.01 3270.0 324.42 2946 90.08

10815 LEAK TEST VACUUM CHAMBER ГТИ 1 81.01 11750.0 0.00 11750 100.00

10821 DELIVERY-ACCEPTANCE TESTING STAND ФХ-18Х2 МС 795

1 88.01 1500.0 0.00 1500 100.00



10828 CANTILEVER REVOLVING CRANE НММ 222 Г/П 0,5 ТС

1 83.01 2500.00 85.52 2414 96.58

10841 WELDING MACHINE ВДГ-303 С ПДГ 312 1 92.01 4200.0 0.00 4200 100.00

10830 CANTILEVER REVOLVING CRANE НММ-222 Г/П 0,5 ТС

1 84.01 2500.0 248.0 2252 90.08

10843 * GRINDING MACHINE 3 Б 633 1 83.01 2750.0 94.1 2656 96.58

10844 LINE OF PRODUCING INSIDE FINNED TUBES МАФ

1 85.01 500000.0 0.00 500000 100.00

10846 Cutting machine по 23202 1 Jan-87 3080 0.00 3080 100.00

10847 SEMI-AUTOMATIC LINE FOR PROCESSING TUBES МАФ 20/10

1 87.01 64796.0 0.00 64796 100.00


10860 BRIDGE CRANE г/п 5тс 1 Dec-78 28200 0.00 28200 100.00

10872 Vertical drilling machines 2Н 125 1 Jan-88 8990 0.00 8990 100.00

10873 REFRIGERATING INSTALLATION МКТ 1420 1 84.12 5900.0 0.00 5900 100.00



10875 EL. OVERHEAD CRANE Г/П 2 ТС 1 84.01 4000.0 396.84 3603 90.08


10882 GRINDING AND POLISHING MACHINE 3 Б 853П 1 82.01 3500.0 0.00 3500 100.00

10883 GRINDING AND POLISHING MACHINE 3 Б 853П 1 82.01 3500.0 0.00 3500 100.00


10885 GANTRY CRANE 10 ТС 1 81.01 79350.0 0.00 79350 100.00

10886 GANTRY CRANE ККС 10 1 78.01 79350.0 0.00 79350 100.00

10887 GANTRY CRANE ККС 20 1 86.01 108809.0 4219.18 104590 96.12

10891 WALKING CRANE 1 79.01 2540.0 0.00 2540 100.00

10890 WALKING CRANE 1 88.01 2540.0 912.39 1628 64.08

10893 STACKER CRANE 2 82.01 74710.0 0.00 74710 100.00

10894 Overhead crane Г/П 3тс 1 Jan-87 5600 0 5600 100.00

10897 STACKER CRANE Г/П 2 ТС 1 83.01 20000.0 0.00 20000 100.00

10899 WALKING CRANE НММ 221 2 87.01 5080.0 1120.94 3959 77.93

10903 STACKER CRANE Г/П 1 ТС 1 83.01 20000.0 0.00 20000 100.00

10904 TRANSFER BED ТСП 300 1 85.01 10200.0 0.00 10200 100.00

10905 TRANSFER BED ТСП-4, 74 2 85.01 20400.0 0.00 20400 100.00

10912 BALANCING MACHINE СИП 800 1 79.01 5470.0 0.00 5470 100.00

10913 STACKER CRANE КТО 1 83.01 20000.0 0.00 20000 100.00

10915 Muffle Furnace СНОЛ 1,62,5-1/М1 1 Jan-82 2604 0 2604 100.00

10920 Vertical drilling machine СВА2 1 Jan-83 4650 0 4650 100.00

10929 Overhead crane Г/П 3тс 1 Jan-80 5600 0 5600 100.00

10938 AUTOMATED WELDING MACHINE ПДГ-513 С ВС -600

1 86.01 4600.0 0.00 4600 100.00

10941 Automated welding machine ТД-300 1 Jan-86 4200 0 4200 1



10985 BRIDGE CRANE Г/П 10 ТС ЗN 510272 1 86.07 28000.0 5495.9 22504 80.37

10986 EL. OVERHEAD CRANE Г/П 5 ТС ЗN 1152 1 81.01 5900.0 0.00 5900 100.00

10987 EL. OVERHEAD CRANE Г/П 5 ТС ЗN 5863 1 81.01 5900.0 0.00 5900 100.00

10988 El. overhead crane Г/П 3,2тс 1 Jan-81 5900 0.00 5900 100.00

10989 El. overhead crane Г/П 3тс 3N 608 1 Jan-84 5600 0.00 5600 100.00

10990 EL. OVERHEAD CRANE Г/П 3 ТС З N 607 1 84.01 5600.0 555.6 5044 90.08


11005 BRIDGE CRANE ЗN 14392 1 84.12 28200.0 4476.8 23723 84.13

11006 BRIDGE CRANE З N 16004 1 84.12 28600.0 4540.3 24060 84.12


11008 BRIDGE CRANE З N 14611 1 83.12 28200.0 2643.8 25556 90.62

11020 Electric furnace СНО-7 6,3 10/6-И-1 1 Jan-85 8600 0 8600 100.00

11879 Testing machine for breakdown 1 Jan-91 1267.35 0 1267 100.00

1 1267.35 0 1267 100.00

11882 GRINDING MACHINE ЗЛ-631 1 Apr-91 1840 0 1840 100.00


11032 REVOLVER LATHE. 1 Г 340 П ПДФ 101 1 84.12 16500.0 0.00 16500 100.00

11033 VERTICAL DRILLING MACHINES 2 Г 175 1 84.01 14520.0 1080.4 13440 92.56

11035 WALKING CRANE Г/П 0,5 ТС 1 88.02 1800.0 656.3 1144 63.54

11038 FLEXIBLE MANUFACTURING UNIT ГЮ-30410000 1 88.09 68000.0 554.2 67446 99.19

11047 Machine for cutting pipe at angle 1 Dec-87 4320 0 4320 100.00

11050 STAMP-MACHINE FOR STAMPING НВО 1 87.12 10320.2 0.00 10320 100.00

11064 ELECTRIC FURNACE 1/12,5-0,25 1 87.01 1674.0 0.00 1674 100.00

11196 PC "Robotron"1715/1,6 1 Jan-87 1100 0 1100 100.00

11633 Electrical Baking case ЭМ 3П 1 Jan-85 2418 0 2418 100.00

11634 electric cooker. comp. ПСМ4448 1 Jan-85 4780 0 4780 100.00

11635 Refrigerator unit ШХ 1 Jan-89 2356 0 2356 100.00

11635 Refrigerator unit ШХ 0,80 1 Jan-85 2356 0 2356 100.00

11639 Refrigerator installation ММВ 4С 1 Jan-85 4750 0 4750 100.00

11648 Dough machine with electric drive ТПП1 1 Jan-85 2120 0 2120 100.00



11636 COLD STORE КХМ- 2601(COND.) 1 87.01 5500.0 0.00 5500 100.00

11640 REFRIGERATING UNIT ВСЭ-800 (WAREHOUSE) 1 85.01 1984.0 0.00 1984 100.00

11658 FREIGHT LIFT ПИ-500 1 83.01 20336.0 0.00 20336 100.00

11682 ELECTRICAL POWER UNIT ВТ-61/5 1 85.01 2658.8 702.74 1956 73.57

11683 OPERATIONAL COMMUNICATION INSTALLATION УД-20

1 85.01 7840.0 1025.30 6815 86.92

11808 MACHINE К-125 1 89.01 2860.0 1213.24 1647 57.58

11816 AUTOMATED STAMP MACHINE WITH UNWINDING DEVICE

1 91.05 10320.0 2971.4 7349 71.21

11818 EL. EROSION MACHINE 4Л 721 Ф1 1 91.05 35200.0 7596.97 27603 78.42

11820 TURNING LATHE ФТ 11-М 1 91.11 22001.0 6647.91 15353 69.78

11822 AUTOMATIC BELT-CUTTING MACHINE 8А554 1 90.07 21500.0 3860.24 17640 82.05

11824 SEMI-AUTOMATIC WELDING MACHINE ПДГ-312 1 91.09 4600.0 0.00 4600 100.00

11836 Vertical drilling machine2С132 1 Jan-90 10840 0 10840 100.00

11844 INDUCTION FURNACEИЛК-0,4 -С 1 1 89.01 15000.0 0.00 15000 100.00

11845 AUTOMATIC TURNING LATHE 1 91.12 8400.0 2026.19 6374 75.88

10848 Screw-cutting lathe 16Б16КП 1 Jan-84 16970 0.00 16970 100.00

11854 PROF. KNURLING MACHINE UPW 25-100 1 89.01 4880.0 2070.27 2810 57.58

11858 STAND FOR HYDRAULIC TESTING1УВЖС МС-761 1 89.01 2980.0 131.7 2848 95.58

11860 CUTTING MACHINE СОТМ-1 1 91.09 1750.0 1045.63 704 40.25

11861 Stand for testing for leaks 1 Apr-91 2045.2 0.00 2045 100.00

11863 STAND FOR TESTING VALVES FOR LEAKS 1 91.02 1320.6 355.2 965 73.10

11881 BALANCING MACHINE 9А 714П 1 91.08 4608.0 2728.42 1880 40.79

11886 ELECTRIC OVERHEAD CRANE(OVERHEAD CRANE)ГП 3,2 ТС

1 89.01 5200.0 2205.89 2994 57.58

11887 BENDING MACHINE ИВ-3428 1 91.01 3785.0 2097.68 1687 44.58

11898 DRYING CABINET FOR POLISHING WHEELS 1 91.03 1089.0 481.45 608 55.79

11899 MACHINE FOR BENDING STEEL ROLLS 1 89.01 4250.0 85.90 4164 97.98

11901 TEST STAND ФХ-9Х2 1 91.01 1100.0 286.0 814 74.00

11915 EXHAUST HOOD ШУВ-1 1 89.01 2666.0 0.00 2666 100.00

11921 WELDING EQUIPMENT УДГ-50 1 89.01 4600.0 0.00 4600 100.00

11922 WELDING EQUIPMENT МКП 1401 1 89.01 4600.0 0.00 4600 100.00

11927 GRINDING MACHINE ЗЛ634 1 91.01 2500.0 1385.53 1114 44.58

11937 * GRINDING AND POLISHING MACHINES Ф.2-Х СТОР. ЗВ 853

2 90.01 8540.0 2089.0 6451 75.54

11938 MACHINE FOR BENDING STEEL ROLLS 1 90.01 4700.0 1002.9 3697 78.66

11950 WELDING INSTALLATION УДГ 501 1 82.01 1472.0 0.00 1472 100.00

12109 Refrigerator unit ШХ 0,80 1 Jan-89 1517.85 0.00 1518 100.00

12110 UNIVERSAL MACHINE 1 90.01 2840.0 0.00 2840 100.00

12115 COFFEE MAKER КК-119 1 90.01 1150.0 0.00 1150 100.00

12117 REFRIGERATED CASE ПВХС-192061 2 90.01 6240.0 0.00 6240 100.00

12119 COLD STORE КХС-2 1 91.01 4500.0 487.89 4012 89.16

12223 WELDING MACHINE А-1230 С ВДГ-303 1 97.06 8326.8 3330.7 4996 60.00

12233 El. overhead crane 3 тс 1 Oct-09 3358.3 3358.3 0 0.00

12161 TELEFAX ПФ 505 1 92.01 4500.0 981.97 3518 78.18

12177 ELECTROLYSE INSTALLATION ""ЭФЕКТ"" 1 93.09 2100.0 672.00 1428 68.00

12193 VIDEO PLAYER 11702 VIDEOCOP VCP-P-1 E 1 94.01 1200.0 568.01 632 52.67

12218 DUST EXTRACTION UNIT 1 97.06 3350.0 1704.69 1645 49.11

12219 DUST EXTRACTION UNIT 2 97.06 6700.0 3157.38 3543 52.87

TOTAL 292 4807276 186440 4620836

3. Machinery and equipment for measurement, control and laboratory equipment

10029 WEIGHBRIDGE АРС-30 1 79.01 2979.3 0.00 2979 100.00

11155 SPECTROPHOTOMETER ФСПА-4 1 85.01 2556.6 0.00 2557 100.00

TOTAL 2 5535.9 0.00 5536

4. Computers

12205 PC АТ486ДХ33 1 Apr-95 6149.52 0 6150 100.00



12206 Monitor "Bridge" 1 Apr-94 1073.6 0 1074 100.00

12212 PC АТ486ДХ2-80 1 May-96 5302.74 0 5303 100.00

12229 FAX 1 12.2005. 1816.67 0 1817 100.00

12230 Celeron PC 1 2006.03 4880.98 0 4881 100.00

12231 Printer, copier, scanner 1 2006.03 2689.75 0 2690 100.00

12232 PC 1 2006.09 5333.33 474.5 4859 91.10

7 27247 475 26772

TOTAL for group IV : 322 - 5293379 202260 5091118

5. Other machinery and equipment

Invent.

12211 "Veronica" Set 1 Mar-96 1519.5 0 1519.5

11626 Furniture set "Casa mare" 1 Jan-86 1805 0 1805

1 1805 - 1805

11627 Furniture set "Casa mare" 1 Jan-88 1942.5 - 1943

11628 Furniture set "Cabinet" 1 Jan-88 2612.5 - 2613

12228 Chair 1 May-05 1471.5 0 1471.5

12091 20 feet container 1 Jan-90 1644 256.28 1387.72

11414 One section wagon 1 Jan-90 2160 168.36 1991.64

11457 master cabin 1 Jan-85 3762.5 0 3762.5

11386 master cabin 1 May-85 3762.5 0 3762.5

11835 Injection mould device 1 Jan-89 25540 1512 24028

12201 Injection mould for cover gas heater 1 Dec-92 4690 264 4426

12202 Injection mould for cover gas heater 1 Dec-92 4690 300 4390

12208 Type-casting machine M/Plastic 9031 1 Mar-96 6710 3869.43 2840.57

12209 Type-casting machine M/Plastic 9057 1 Mar-96 5040 2906.4 2133.6

TOTAL other machinery and equipment 15 69155 9276 59879



Annex 2 Leased equipment

Company No. Machine Name Number of units

Year of commission

ing

Initial amount, th. MDL

Vaiur Mercur SRL

1 Distribution Networks 0,4 kwt 1 1983 8,266 2 Press КД 1 1983 30,857 3 Crane Г/П 3 tone 1 1987 5,600 4 Drilling machine-tool 2C-132 1 1990 10,840

Total 4 47,297

Livcon Trans SRL

1 Universal Machine 676П 1 1979 10,000 2 Combined Press С229 А 1 1985 4,526 3 Strung de filetat 16 K 20 ПФ 1 1 1978 24,000 4 Drilling machine-tool 2H-135 1 1988 10,038 5 Drilling machine-tool 2M-112 1 1987 1,500 6 Grinding machine-tool 3 Б 633 1 1980 2,340 7 Welding Equipment 1 1990 4,600 8 Machine-tool 87256 1 1982 5,648 9 Machine tools for cutting pipe at angle 1 1987 4,320 10 Furnace 1.6x2.5-1/M1 Mr/2 1 1982 2,604

Total 10 69,574 Debut-Gama SRL 1 Crane Г/П 5 tone 1 1978 28,500 Total 1 28,500

Servocar SRL

1 Semitrailer ОДАЗ 9370 1 1987 8,625 2 КАМАЗ 5410 1 1987 57,800 3 Semitrailer ОДАЗ 9370 1 1991 8,625 4 Semitrailer ОДАЗ 9370 1 1991 8,625 5 КАМАЗ 55102 1 1989 57,800 6 КАМАЗ 5410 1 1990 57,800 7 КАМАЗ 5410 1 1990 57,800 8 КАМАЗ 5410 1 1991 57,800 9 КАМАЗ 5410 1 1991 57,800 10 Crane Г/П 1 T 1 1980 1,625

Total 10 374,300

Electrobobina SRL

1 Apparatus for reeling TT-20 1 1988 2,080 2 Balancing Stand 1 1987 2,303 3 Welding machine BC 300 C A-547 6 1 1986 3,596 4 Apparatus for reeling 5214 ACPH 1 1981 2,290 5 Electric furnace CHO 7 6,3 10/6 И 1 1 1985 8,600 6 Equipment for testing 2 1991 2,535 7 Equipment ЗЛ-631 1 1991 1,840

Total 8 23,244

Service-Frig SRL 1 Machine for bending tubes BMC-23B 1 1977 2,590 2 Bending machine 1 1986 4,204 3 Machine for bending tubes Г СТМ 21 М 1 1981 3,500 4 Cutting machine ПО 23202 1 1987 3,080

Total 4 13,374 Noi-Bejenari ÎI 1 Crane Г/П 3 tone 1 1981 5,900 Total 1 5,900

GISS SRL 1 Press Machine C 229 A 1 1985 4526 2 Crane Г/П 5 tone 1 1978 28,200 3 Sanding machine 3 Г 71 М 1 1980 21,000

Total 3 53,726

Frigomaş SRL

1 Crane Г/П 5 tone 1 1978 28,200 2 Welding machineПДГ 508 С ВДУ 1 1990 4,300 3 Sanding machine 3Б 634 1 1984 2,500 4 Stand for testing (hermecity) 1 1991 2,045

Total 4 37,045 Barbos Iacob ÎI 1 Threader 1 A 64 1 1982 28,600 Total 1 29,600 Italprod SRL 1 Crane Г/П 3 tone 1 1979 5,600 Total 1 5,600

Feralumin SRL 1 Crane Г/П 10 tone 1 1984 28,200 2 Crane Г/П 10 tone 1 1984 28,000 3 Crane Г/П 5 tone 1 1984 28,000

Total 3 84,200

Divalconi SRL 1 Crane Г/П 10 tone 1 1984 28,500 2 Crane Г/П 5 tone 1 1984 28,200

Total 2 56,700



Annex 3. Estimate the expenses for capital infrastructure repairs and renovation

General estimate in amount of: 321,075 Th. MDL

Including recoverable amounts: 0.000 Th. MDL

GENERAL ESTIMATE

Reconstruction of buildings and constructions of Straseni „CAAN” JSC

Deawn up in current prices: quarter IV 2010

No. No. estimate Name of chapters of expenses, objects

Amount, th. MDL

Total amount, th. MDL Construction

works Mounting

works

Equipment, furniture, inventory

other works

1 2 3 4 5 6 7 8

Chapter 1 Preparation of the site for object construction

Total Chapter 1 0.00 0.00 0.00 0.00 0.00

Chapter 2 Objects of basic investments

1 Production building no. 1 78,310.00 78,310.00



4 Sanitary building 37,600.00 37,600.00

5 Administrative building 77,200.00 77,200.00

6 Canteen 13,700.00 13,700.00

7 Heating systems 550.00 1,900.00 2,450.00

Total Chapter 2 239,371.00 550.00 1,900.00 0.00 241,821.00

Chapter 3 auxiliary and service objects

Total Chapter 3 0.00 0.00 0.00 0.00 0.00

Chapter 4 Energy Objects

Total Chapter 4 0.00 0.00 0.00 0.00 0.00

Chapter 5 Communications and transport objects 0.00

Interior roads - 2 km 3 160.00 3,160.00

Access road - 0.8 km 2 100.00 2,100.00

Local road - 1.7 km 2 860.00 2,860.00

Total Chapter 5 8,120.00 0.00 0.00 0.00 8,120.00

Chapter 6 Civil engineering and external networks (water, sewer, heat, gas)

Water supply networks 430.00 430.00

Sewerage system 390.00 390.00

Gas supply networks 400.00 400.00

Total Chapter 6 400.00 0.00 0.00 0.00 400.00

Chapter 7 Territory management and green spaces

Total Chapter 7 0.00 0.00 0.00 0.00 0.00

Total Chapter 1-7 247,891.00 550.00 1,900.00 0.00 250,341.00



Chapter 8 Site organization

NCML 01.03.01 4.1. an. 1 pag.5

Buildings and provisory buildings k=1,4*0,8=1,12%

0.00

Total Chapter 8 0.00 0.00 0.00

including the amount of reimbursement 0.00 0.00 0.00

Total Chapter 1-8 247,891.00 550.00 1,900.00 0.00 250,341.00


Chapter 9 Other expenses

NCML 01.04-2001 an.A pag.5

Additional expenses for construction works - time mounting figure 0,8%

1,983.13 4.40 1,987.53

CPL 01.01.01. an.B pag.31; calcul.

Payment for electricity 2,181.44 4.84 2,186.28

Total Chapter 9 4,164.57 9.24 0.00 0.00 4,173.81

Total Chapter 1-9 252,055.57 559.24 1,900.00 0.00 254,514.81

The repayment amount including temporary objects

0.00 0.00 0.00

Chapter 10 Maintenance of directorate (technical supervision )

CPL 01.01.01. an.C pag.31.

Technical Supervision - 1,0% 2 545.15 2,545.15

Total Chapter 10 2,545.15 2,545.15

Chapter 11 Training of operating staff 0.00 0.00

Total Chapter 11 0.00 0.00

Chapter 12 Design work, prospecting, copyright control

Contract Design works 3,610.00

Min.Ecol.RM 1306-01-07 of June 13,.03 p.1 par. 2

Copyright inspection 0.00

Min.Ecol.RM 1306-01-07 of June 13,.03 p.1 par. 5

Expertise 361.00

Total Chapter 12 3,971.00

Total Chapter 1-12 252 055,57 559.24 1,900.00 2,545.15 261,030.96


CPL 01.01.01. p.6 11 pag 17

Reserve funds for unforeseen expenses 2%

5 041,11 11.18 38.00 50.90 5,220.62

Total including reserve 257,096.68 570.42 1,938.00 2,596.05 266,251.58

CPL 01.01.01. p.6.12 pag 17

Deductions into the fund of construction normative base 0,5%

1,285,48 2.85 9.69 12.98 1,311.01

Total inc. CNB 258,382.16 573.28 1,947.69 2,609.03 267,562.58

Value added tax 20% 51 676,43 114.66 389.54 521.81 53,512.52

Total inc. VAT 310,058.60 687.93 2,337.23 3,130.84 321,075


Total inc. BNC 258,382.,16 573.28 1,947.69 2,609.03 267,562.58

Value added tax 20% 51,676.43 114.66 389.54 521.81 53,512.52

Total inc. VAT 310,058,60 687.93 2,337.23 3,130.84 321,075


Annex 4. Investment structure



Annex 5. Provision of fruits storage and sorting services in the industrial refrigerator

Annex 6. Income from lease of available spaces

Annex 7. Forecast operational income (VAT including)

Annex 8. Forecast consumption and expenses (VAT including)

Annex 9. Forecast cash flow

Annex 10. Forecast financial results

Annex 11. Forecast balance sheet

Annex 12. Calculation of investment efficiency

Annex 13. Financial indicators

Annex 14. Calculation of wear

Anenx 4. Investment structure

Investment in construction of the

refrigerator, including144x100x10,8 14 400 155 520 30 000 €9 000 000

refrigeration equipment €5 400 000

refrigeration machinery €3 600 000

Investment in the construction of a

packing house, including144x70x10,8 10 080 108 864 21 773 €3 265 920

packing house equipment €1 959 552

packing house machinery €1 306 368

Investing in utilities (road, sewer, water,

gas, etc.. )€1 111 247

Investing in the repairation of buildings 50 020 €14 217 109

Total, amount € 27 594 276

Total, % 100%

Ratio Eur = 16,00

Ratio Usd = 12,00

Space (sq.m.)Investment item Size (LxlxH m) total amountVolume(cub.

m.)Capacity(t)


Phase 1 - 2011 spring - summer







packing house equipment €979 776

packing house machinery €653 184


gas, etc.. )€722 311



Total, % 100%

Investment item Size (LxlxH m) Space (sq.m.)Volume(cub.

m.)total amountCapacity(t)












gas, etc.. )€388 936



Total, % 100%


m.)Capacity(t) total amount


2011 2012 2013 2014 2015 2016

Total available volume 15 000 ton 30 000 ton 30 000 ton 30 000 ton 30 000 ton 30 000 ton

Price per kg storage services (lei / month)

0,30 lei/kg/month 0,32 lei/kg/month 0,33 lei/kg/month 0,35 lei/kg/month 0,36 lei/kg/month 0,38 lei/kg/month

Price per kg (sorting and packaging) (lei / kg)

0,50 lei/kg 0,55 lei/kg 0,60 lei/kg 0,63 lei/kg 0,66 lei/kg 0,69 lei/kg

Sales plan for 2011

jan feb mar apr may jun

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

Storage Income 0 0 0 0 0 0

sorting and packaging Income 0 0 0 0 0 0

Total 0 lei 0 lei 0 lei 0 lei 0 lei 0 lei

Sales plan for 2012


70% 55% 35% 0% 0% 10%

Storage Income 3 150 000 2 475 000 1 575 000 0 0 472 500

sorting and packaging Income 1 125 000 1 125 000 1 500 000 2 625 000 0 0

Total 4 275 000 lei 3 600 000 lei 3 075 000 lei 2 625 000 lei 0 lei 472 500 lei

Sales plan for 2013


70% 55% 35% 0% 0% 10%

Storage Income 6 945 750 5 457 375 3 472 875 0 0 992 250



Incomes 2011 2012 2013 2014 2015 2016

Storage Income 20 250 000 51 933 938 64 992 375 68 241 994 71 654 093 75 236 798

sorting and packaging Income 1 125 000 12 562 500 24 825 000 26 066 250 27 369 563 28 738 041

Total 21 375 000 lei 64 496 438 lei 89 817 375 lei 94 308 244 lei 99 023 656 lei 103 974 839 lei


2017 2018 2019 2020

Total available volume 30 000 ton 30 000 ton 30 000 ton 30 000 ton


0,40 lei/kg/month 0,42 lei/kg/month 0,44 lei/kg/month 0,47 lei/kg/month


0,73 lei/kg 0,77 lei/kg 0,80 lei/kg 0,84 lei/kg

Sales plan for 2011

jul aug sep oct nov dec Total

0% 70% 100% 100% 95% 85% 0%

Storage Income 0 3 150 000 4 500 000 4 500 000 4 275 000 3 825 000 20 250 000

sorting and packaging Income 0 0 0 0 375 000 750 000 1 125 000

Total 0 lei 3 150 000 lei 4 500 000 lei 4 500 000 lei 4 650 000 lei 4 575 000 lei 21 375 000 lei

Sales plan for 2012


35% 70% 100% 100% 95% 85% 0%

Storage Income 1 736 438 6 615 000 9 450 000 9 450 000 8 977 500 8 032 500 51 933 938

sorting and packaging Income 825 000 2 887 500 0 0 825 000 1 650 000 12 562 500

Total 2 561 438 lei 9 502 500 lei 9 450 000 lei 9 450 000 lei 9 802 500 lei 9 682 500 lei 64 496 438 lei

Sales plan for 2013


35% 70% 100% 100% 95% 85% 0%

Storage Income 3 472 875 6 945 750 9 922 500 9 922 500 9 426 375 8 434 125 64 992 375

sorting and packaging Income 1 800 000 6 300 000 0 0 900 000 1 800 000 24 825 000


Incomes 2017 2018 2019 2020 0 0 0

Storage Income 78 998 638 82 948 570 87 095 998 91 450 798 0 0 0


Total 109 173 581 lei 114 632 260 lei 120 363 873 lei 126 382 066 lei 0 lei 0 lei 0 lei


2010 2011 2012 2013 2014 2015

Spaces occupied by

current residents 17 713 17 713 17 713 17 713 17 713 17 713

lease price current

residents 127,40 lei/sq.m. 250,00 lei/sq.m. 262,50 lei/sq.m. 275,63 lei/sq.m. 289,41 lei/sq.m. 303,88 lei/sq.m.

Annual income 2 256 636 lei 4 428 250 lei 4 649 663 lei 4 882 146 lei 5 126 253 lei 5 382 566 lei

Spacesoccupied by new

residents 31 034 12 414 31 034 31 034 31 034 31 034

lease price new

residents300,00 lei/sq.m. 315,00 lei/sq.m. 330,75 lei/sq.m. 347,29 lei/sq.m. 364,65 lei/sq.m.

Annual income 3 724 080 lei 9 775 710 lei 10 264 496 lei 10 777 720 lei 11 316 606 lei

Total 8 152 330 lei 14 425 373 lei 15 146 641 lei 15 903 973 lei 16 699 172 lei


2016 2017 2018 2019 2020

Spaces occupied by

current residents 17 713 17 713 17 713 17 713 17 713

lease price current

residents 319,07 lei/sq.m. 335,02 lei/sq.m. 351,78 lei/sq.m. 369,36 lei/sq.m. 387,83 lei/sq.m.



residents 31 034 31 034 31 034 31 034 31 034

lease price new





2011 2012 2013 2014 2015

amount amount amount amount amount

1. Income from lease of available

spaces, including 8 152 330 14 425 373 15 146 641 15 903 973 16 699 172

- current residents 4 428 250 4 649 663 4 882 146 5 126 253 5 382 566

- new residents 3 724 080 9 775 710 10 264 496 10 777 720 11 316 606

2. Income from refrigerator 20 250 000 51 933 938 64 992 375 68 241 994 71 654 093

3. Income from the operation of the

packing house 1 125 000 12 562 500 24 825 000 26 066 250 27 369 563

4. Income from consulting services 150 000 157 500 165 375 173 644 182 326

Total 29 677 330 79 079 310 105 129 391 110 385 861 115 905 154

VAT from SALES 4 946 222 13 179 885 17 521 565 18 397 643 19 317 526

Net sales 24 731 108 65 899 425 87 607 826 91 988 217 96 587 628

Operational income


2016 2017 2018 2019 2020





- new residents 11 882 437 12 476 558 13 100 386 13 755 406 14 443 176



packing house 28 738 041 30 174 943 31 683 690 33 267 874 34 931 268


Total 121 700 411 127 785 432 134 174 704 140 883 439 147 927 611

0 0% 0% 0% 0% 0%

VAT from SALES 20 283 402 21 297 572 22 362 451 23 480 573 24 654 602

Net sales 101 417 010 106 487 860 111 812 253 117 402 866 123 273 009

Operational income


2011 2012 2013 2014 2015

Direct consumptions amont amont amont amont amont

Raw material 45 000 47 250 49 613 52 093 54 698

Electrical power 50 000 52 500 55 125 57 881 60 775

Salary 360 000 378 000 396 900 416 745 437 582

Other costs 5 000 5 250 5 513 5 788 6 078

subtotal 460 000 483 000 507 150 532 508 559 133

Total direct consumptions 460 000 483 000 507 150 532 508 559 133

2011 2012 2013 2014 2015

Indirect consumptions amont amont amont amont amont

Reparation and maintenance of fixed assets 1 000 000 1 050 000 1 102 500 1 157 625 1 215 506

fixed assets depreciation 4 093 056 12 924 519 30 461 711 30 461 711 30 461 711

subtotal 5 093 056 13 974 519 31 564 211 31 619 336 31 677 217

Total indirect consumptions 5 093 056 13 974 519 31 564 211 31 619 336 31 677 217

2011 2012 2013 2014 2015

Managing expenses amont amont amont amont amont

1. Commercial expenses

Marketing, promotion 70 000 73 500 77 175 81 034 85 085

Other commercial expenses 10 000 10 500 11 025 11 576 12 155

subtotal 80 000 84 000 88 200 92 610 97 241

2. General and administrative expenses

Salary + social insurance 1 260 000 1 323 000 1 389 150 1 458 608 1 531 538

Transportation 130 000 136 500 143 325 150 491 158 016

Banking and telephone expenses 60 000 63 000 66 150 69 458 72 930

Administrative mainenance 20 000 21 000 22 050 23 153 24 310

Taxes 51 000 53 550 56 228 59 039 61 991

Other General and administrative expenses 70 000 73 500 77 175 81 034 85 085

subtotal 1 591 000 1 670 550 1 754 078 1 841 781 1 933 870

3. Other operational expenses

Interest rate 0 0 14 000 000 11 200 000 8 400 000

Other operational expenses 30 000 31 500 33 075 34 729 36 465

subtotal 30 000 31 500 14 033 075 11 234 729 8 436 465

Total Operational expenses 1 701 000 1 786 050 15 875 353 13 169 120 10 467 576

Total expenses 7 254 056 16 243 569 47 946 713 45 320 964 42 703 926


2016 2017 2018 2019 2020

Direct consumptions Suma Suma Suma Suma Suma

Raw material 57 433 60 304 63 320 66 485 69 810


Salary 459 461 482 434 506 556 531 884 558 478

Other costs 6 381 6 700 7 036 7 387 7 757

subtotal 587 090 616 444 647 266 679 630 713 6110 0 0 0 0 0


2016 2017 2018 2019 2020

Indirect consumptions Suma Suma Suma Suma Suma



subtotal 31 737 992 31 801 807 31 868 811 31 939 166 32 013 0390 0 0 0 0 0


2016 2017 2018 2019 2020

Managing expenses Suma Suma Suma Suma Suma




subtotal 102 103 107 208 112 568 118 196 124 106



Transportation 165 917 174 212 182 923 192 069 201 673



Taxes 65 090 68 345 71 762 75 350 79 118


subtotal 2 030 564 2 132 092 2 238 697 2 350 632 2 468 163


Interest rate 5 600 000 2 800 000 0 0 0


subtotal 5 638 288 2 840 203 42 213 44 324 46 5400 0 0 0 0 0

Total Operational expenses 7 770 955 5 079 503 2 393 478 2 513 152 2 638 8090 0 0 0 0 0

Total expenses 40 096 037 37 497 753 34 909 555 35 131 948 35 365 459


Total Total Total Total Total Total Total

2009 2010 2011 2012 2013 2014 2015

I Operational Activity

A cash earnings

earnings from sales 1 689 483 2 046 935 28 193 464 76 609 211 103 904 985 110 335 251 115 917 015

earnings from space leasing 7 744 714 13 704 104 14 389 309 15 108 775 15 864 213

earnings from refrigerator leasing 19 237 500 49 337 241 61 742 756 64 829 894 68 071 389

earnings from packing house 1 068 750 11 934 375 23 583 750 24 762 938 26 001 084

earnings from consulting 142 500 149 625 157 106 164 962 173 210

earnings from receivables 1 483 867 4 032 064 5 468 683 5 807 118

other earnings 61 642 64 640 Total earnings 1 751 125 2 111 575 28 193 464 76 609 211 103 904 985 110 335 251 115 917 015

B cash payments

Payments to suppliers and contractors 461 616 556 635 1 490 000 1 564 500 1 642 725 1 724 861 1 811 104 Salary and social insrance payments 960 750 992 864 1 620 000 1 701 000 1 786 050 1 875 353 1 969 120 interest payments - - - - 14 000 000 11 200 000 8 400 000 payment of income tax 4 991 661 3 993 490 4 695 473 5 418 555 other payments (including VAT) 498 825 601 503 4 501 577 12 561 002 17 099 938 18 160 771 19 079 643

Taxes 51 000 53 550 56 228 59 039 61 991 VAT 4 450 577 12 507 452 17 043 710 18 101 732 19 017 652 Others 498 825 601 503

Total payments 1 921 191 2 151 001 7 611 577 20 818 162 38 522 203 37 656 457 36 678 422

NET FLOW from OPERATIONAL ACTIVITY (170 066) (39 426) 20 581 886 55 791 049 65 382 783 72 678 794 79 238 592

C Investment Activity

earnings from the output of long term assets 30 333 37 380 payments for purchase of long term assets - - 257 542 265 183 966 155 - - -

payment for refrigerator construction 72 000 000 72 000 000

payment for packing house construction 26 127 360 26 127 360

payment for utilities 11 556 968 6 222 983

payment for reparation of buildings 147 857 937 79 615 812 Interest received

Dividends received

others

NET FLOW from INVESTMENT ACTIVITY 30 333 37 380 (257 542 265) (183 966 155) - - -

D Financial Activity

earnings from loans and credits - - - 140 000 000 - - - earnings from the issue of own shares 245 000 000 others - - - - - - - Sub-total - - 245 000 000 140 000 000 - - -

E payments for loans and credits - - - - 28 000 000 28 000 000 28 000 000 dividend payment 17 970 705 21 129 629 24 383 499 payments for purchasing of own shares

others

Sub-total - - - - 45 970 705 49 129 629 52 383 499

NET FLOW from FINANCIAL ACTIVITY - - 245 000 000 140 000 000 (45 970 705) (49 129 629) (52 383 499)

NET FLOW from economic activity(139 733) (2 046) 8 039 621 11 824 894 19 412 078 23 549 165 26 855 094

Exceptional earnings (payments)

H TOTAL NET FLOW (139 733) (2 046) 8 039 621 11 824 894 19 412 078 23 549 165 26 855 094


ICash balance at the beginning of the period

150 985 11 252 9 206 8 048 827 19 873 720 39 285 798 62 834 963

J Cash balance at the end of the period 11 252 9 206 8 048 827 19 873 720 39 285 798 62 834 963 89 690 057


Total Total Total Total Total

2016 2017 2018 2019 2020

I Operational Activity - - - - -

A cash earnings

earnings from sales 121 716 286 127 802 281 134 192 404 140 902 025 147 947 126





earnings from receivables 6 100 896 6 406 120 6 726 436 7 062 758 7 415 896

other earnings - - - - - Total earnings 121 716 286 127 802 281 134 192 404 140 902 025 147 947 126

B cash payments

Payments to suppliers and contractors 1 901 660 1 996 743 2 096 580 2 201 409 2 311 479 Salary and social insrance payments 2 067 576 2 170 955 2 279 503 2 393 478 2 513 152 interest payments 5 600 000 2 800 000 - - - payment of income tax 6 163 792 6 932 290 7 725 213 8 263 782 8 829 280 other payments (including VAT) 20 034 195 21 035 935 22 087 733 23 192 120 24 351 726

Taxes 65 090 68 345 71 762 75 350 79 118 VAT 19 969 104 20 967 590 22 015 971 23 116 769 24 272 608 Others - - - - -

Total payments 35 767 222 34 935 922 34 189 028 36 050 788 38 005 636

NET FLOW from OPERATIONAL ACTIVITY 85 949 064 92 866 359 100 003 376 104 851 237 109 941 490


earnings from the output of long term assets - - - - - payments for purchase of long term assets - - - - -

payment for refrigerator construction - - - - -

payment for packing house construction - - - - -

payment for utilities - - - - -

payment for reparation of buildings - - - - - Interest received - - - - - Dividends received - - - - - others - - - - -

NET FLOW from INVESTMENT ACTIVITY - - - - -


earnings from loans and credits - - - - - earnings from the issue of own shares - - - - - others - - - - - Sub-total - - - - -

E payments for loans and credits 28 000 000 28 000 000 - - - dividend payment 27 737 062 31 195 304 34 763 457 37 187 019 39 731 758 payments for purchasing of own shares - - - - - others - - - - - Sub-total 55 737 062 59 195 304 34 763 457 37 187 019 39 731 758

NET FLOW from FINANCIAL ACTIVITY (55 737 062) (59 195 304) (34 763 457) (37 187 019) (39 731 758)

NET FLOW from economic activity30 212 002 33 671 055 65 239 919 67 664 218 70 209 732

Exceptional earnings (payments) - - - - -

H TOTAL NET FLOW 30 212 002 33 671 055 65 239 919 67 664 218 70 209 732

Exchange differences - - - - -


89 690 057 119 902 059 153 573 114 218 813 033 286 477 251

J Cash balance at the end of the period 119 902 059 153 573 114 218 813 033 286 477 251 356 686 983


No row 2009 2010 2011 2012 2013 2014

1. Net sales 01 1 966 966 2 154 668 24 731 108 65 899 425 87 607 826 91 988 217

2. Cost of sales 02 927 912 1 012 694 5 369 723 14 265 019 31 869 236 31 939 612

3. Gross Profit 03 1 039 054 1 141 974 19 361 385 51 634 406 55 738 590 60 048 605

4. Other operational income 04 15 874 17 307

5.Commercial expenses 05 66 667 70 000 73 500 77 175

6. General & administrative expenses 06 1 412 525 1 152 525 1 544 333 1 621 550 1 702 628 1 787 759

7.Other operational expenses 07 3 288 3 288 25 000 26 250 14 027 563 11 228 941

8. Results from operating activities (3+4-5-6-

7)08 (360 885) 3 468 17 725 385 49 916 606 39 934 900 46 954 731

9.Results from investment activity 09 29 904 37 380

10. Results from financial activity 10

11.Results of financial and economic activity

(8+9+10)11 (330 981) 40 848 17 725 385 49 916 606 39 934 900 46 954 731

12.Results from exceptional activity 12

13.Profit before taxes (11+12) 13 (330 981) 40 848 17 725 385 49 916 606 39 934 900 46 954 731

14.Income tax 14 (4 991 661) (3 993 490) (4 695 473)

15.Net profit (13+14) 15 (330 981) 40 848 17 725 385 44 924 946 35 941 410 42 259 258


0 No row 2015 2016 2017 2018 2019 2020

1. Net sales 01 96 587 628 101 417 010 106 487 860 111 812 253 117 402 866 123 273 009

2. Cost of sales 02 32 013 507 32 091 097 32 172 566 32 258 109 32 347 929 32 442 240

3. Gross Profit 03 64 574 121 69 325 912 74 315 294 79 554 144 85 054 937 90 830 769

4. Other operational income 04 - - - - - -

5.Commercial expenses 05 81 034 85 085 89 340 93 807 98 497 103 422


7.Other operational expenses 07 8 430 388 5 631 907 2 833 502 35 178 36 936 38 783

8. Results from operating activities (3+4-5-6-7) 08 54 185 553 61 637 916 69 322 897 77 252 128 82 637 819 88 292 796

9.Results from investment activity 09 - - - - - -

10. Results from financial activity 10 - - - - - -


(8+9+10)11 54 185 553 61 637 916 69 322 897 77 252 128 82 637 819 88 292 796

12.Results from exceptional activity 12 - - - - - -

13.Profit before taxes (11+12) 13 54 185 553 61 637 916 69 322 897 77 252 128 82 637 819 88 292 796

14.Income tax 14 (5 418 555) (6 163 792) (6 932 290) (7 725 213) (8 263 782) (8 829 280)

15.Net profit (13+14) 15 48 766 997 55 474 124 62 390 607 69 526 915 74 374 038 79 463 516


ASSETS No 2008 2009 2010 2011 2012 2013 2014

1

1.1

Long-Term Assets

Intangible assets

Intangible assets (111,112) 010

- - - - - - -

Intangible assets amortization (113) 020 - - - - - - -

Intangible assets ( 010-020) 030 - - - - - - -

1,2Long-Term material Assets

working material assets (121) 04015 566 15 566 15 566 159 414 905

Land(122) 050 - - - - - - -

Fixed assets (123) 060 87 513 844 87 607 660 87 607 660 185 735 020 529 116 080 529 116 080 529 116 080

Natural ressources (125) 070 - - - - - - -

Depreciation of fixed assets (124,126) 080 (62 930 117) (63 171 674) (63 413 231) (67 506 287) (80 430 806) (110 892 517) (141 354 228)

Long-Term material Assets (040+050+

060+070-080)090 24 599 293 24 451 552 24 209 995 277 643 638 448 685 274 418 223 563 387 761 852

1,3

Long-Term financial Assets Long-

term investments unrelated parties (131)

100

48 410 48 410 48 410 48 410 48 410 48 410 48 410

Long-term investments related parties (132) 110 - - - - - - -

Change of Long-term investments (133) 120 - - - - - - -

Long-term receivables (134) 130 - - - - - - -

Deffered income tax (135) 140 - - - - - - -

expenses paid in advance (136) 150 - - - - - - -

Total 1.3 (100+110+120+ +130+140+150) 160 48 410 48 410 48 410 48 410 48 410 48 410 48 410

1,4 Other Long-term assets (141,142) 170 - - - - - - -

Total chapter 1 (030+090+160+170) 180 24 647 703 24 499 962 24 258 405 277 692 048 448 733 684 418 271 973 387 810 262

2 2.1 CURRENT ASSETS Raw

materials&components stocks

Materials (211) 190

168 330 165 214 162 668 185 442 194 714 204 449 214 672

Animal rearing and fattening (212) 200 - - - - - - -

Work in progress inventory(213-214) 210 45 291 45 129 45 018 1 616 188 1 153 079 754 102 476 012

Production in progress (215) 220 - - - - - - -

Finished goods (216) 230 469 467 457 635 459 682 - - - -

Shipped goods(217) 240 6 250 - - - - - -

Total 2.1 (190+200+210 + +220+140+150) 250 689 338 667 978 667 368 1 801 630 1 347 793 958 551 690 684

2,2Accounts receivable

Accounts receivable from customers (221) 260218 559 173 280 303 240 1 483 867 4 032 064 5 468 683 5 807 118

Adjustments on doubtful debts (222) 270 - - - - - - -

Receivables from related parties (223) 280 - - - - - - -

expenses paid in advance (224) 290 - - -

Receivables from budget(225) 300 455 387 - - - - -

Preliminary Claims (226) 310 - - - - - - -

Receivables from personnel (227) 320 2 572 20 694 20 694 93 123 116 404 122 224 128 335

Short-term receivables on income calculated

(228)330 461 133 499 686 670 016 - - -

Other receivables(229) 340 - - - - - - -

Total 2.2 (260-270+280+

290+300+310+320+ 330+340)350 682 719 694 047 993 950 1 576 990 4 148 467 5 590 907 5 935 454

2,3

Current financial investment

Current financial investment in unrelated

parties (231) 360

- - - - - - -

Current financial investment in related parties

(232)370 - - - - - - -

Decrease of short-term investments (233) 380 - - - - - - -

Total 2.3 (360+370+380) 390 - - - - - - -

2,4Cash Cash

(241) 40021 410 1 000 1 305 1 141 341 2 818 137 5 570 811 8 910 134

Current accounts in local currency(242) 410 129 575 10 252 7 900 6 907 486 17 055 584 33 714 987 53 924 829

Current accounts in foreign currency (243) 420 - - - - - - -

Other cash (244, 245, 246) 430 - - - - - - -

Total 2.4 (400+410+ 420+430) 440 150 985 11 252 9 206 8 048 827 19 873 720 39 285 798 62 834 963

2,5 Other current assets (251, 252) 450 8 178 4 774 5 013 5 263 5 527 5 803 6 093

TOTAL chapter 2 (250+

350+390+440+450)460 1 531 220 1 378 051 1 675 536 11 432 709 25 375 507 45 841 060 69 467 193

TOTAL ASSETS (180+460) 470 26 178 923 25 878 013 25 933 941 289 124 757 474 109 191 464 113 033 457 277 456


Nr.

n.s.LIABILITIES Cod 2008 2009 2010 2011 2012 2013 2014

3 3.1 EQUITY Share

and additional capital Share

capital (311) 480

30 510 836 30 510 836 30 510 836 275 510 836 275 510 836 275 510 836 275 510 836

Additional capital (312) 490 - - - - - - -

Unpaid capital (313) 500 - - - - - - -

Capital withdraw (314) 510 - - - - - - -

Total.3.1 (480+490-500-510) 520 30 510 836 30 510 836 30 510 836 275 510 836 275 510 836 275 510 836 275 510 836

3,2Reserves

Reserves according to law (321) 530- - - - - - -

Reserves according to statutory doc. (322) 540 - - - - - - -

Others (323) 550 368 820 368 820 368 820 368 820 368 820 368 820 368 820

Total 3.2 (530+540+550) 560 368 820 368 820 368 820 368 820 368 820 368 820 368 820

3,3 Profit and loss surplus (331) 570 - 14 991 - - - - -

Retained earnings (uncovered loss) of

previous years (332) 580 (4 809 669) (4 808 394) (5 124 384) (5 083 536) 12 641 850 39 596 090 54 407 872

Net profit (loss) (333) 590 1 275 (330 981) 40 848 17 725 385 44 924 946 35 941 410 42 259 258

Used profit (334) 600 - - -

Total 3.3 (± 570±580± 590±600) 610 (4 808 394) (5 124 384) (5 083 536) 12 641 850 57 566 795 75 537 500 96 667 129

3,4

Secondary capital

Differences from revaluation of long term

assets (341)

620 - - - - - - -

Grants (342) 630 - - - - - - -

Total 3.4 (±620±630) 640 - - - - - - -

TOTAL chapter 3 (520+560±610±640) 650 26 071 262 25 755 272 25 796 120 288 521 506 333 446 451 351 417 156 372 546 785

4. 4.1 Long term liabilities

Financial Long term liabilities

Bank credits (411,412)

660 - - - - 140 000 000 112 000 000 84 000 000

Loans (413) 670 - - - - - - -

Others (414) 680 - - - - - - -

Total 4.1 (660+670+680) 690 - - - - 140 000 000 112 000 000 84 000 000

4,2Accounted Long term liabilities

Lease Long term liabilities (421)700 - - - - - - -

Anticipated long-term revenue (422) 710 - - - - - - -

Special revenues (423) 720 - - - - - - -

Revenues received in advance (424) 730 - - - - - - -

Deffered tax(425) 740 - - - - - - -

Others (426) 750 - - - - - - -

Total 4.2 (700+710+720+ 730+740+750) 760 - - - - - - -

Total chapter 4 (690+760) 770 - - - - 140 000 000 112 000 000 84 000 000

5 5.1 Short term liabilities

Financial short term liabilities


780 - - - - - - -

Loans (513) 790 - - - - - - -

Current share of long-term liabilities (514) 800 - - - - - - -

Others (515, 516) 810 - - - - - - -

Total.5.1 (780+790+800+810) 820 - - - - - - -

5,2Short term commercial liabilities

Short term commercial liabilities (521) 830 3 921 4 221 4 521 456 621 479 452 503 425 528 596

Short term liabilities to related parties (522) 840 - - - - - - -

Revenues received in advance(523) 850 - - - - - - -

Total 5.2 (830+840+850) 860 3 921 4 221 4 521 456 621 479 452 503 425 528 596

5,3Acconted Short term liabilities

Accounted salary (531)870 44 573 52 699 60 825 66 908 83 634 87 816 92 207

Other accounted liabilities to personnel (532) 880 - - - - - - -

Accounted Social insurance (533) 890 3 897 24 990 46 083 50 691 63 364 66 532 69 859

Taxes payable (534) 900 51 920 38 829 25 738 28 312 35 390 37 159 39 017

Preliminary liabilities (535) 910 - - - - - - -

Extrabudget liabilities (536) 920 - - - - - - -

Shareholders payable (537) 930 - - - - - - -

future expenses and payments provisions

(538)940 - - - - - - -

Others (539) 950 3 350 2 002 654 719 899 944 991

Total 5.3 (870+880+890+

900+910+920+930+940+950)960 103 740 118 520 133 300 146 630 183 288 192 452 202 074

TOTAL chapter 5 (820+860+960) 970 107 661 122 741 137 821 603 251 662 740 695 877 730 670

TOTAL LIABILITIES (650+770+970) 980 26 178 923 25 878 013 25 933 941 289 124 757 474 109 191 464 113 033 457 277 455


Nr.

n.s.ASSETS No 2015 2016 2017 2018 2019 2020

1

1.1

Long-Term Assets Intangible

assets Intangible assets

(111,112) 010

- - - - - -

Intangible assets amortization (113) 020 - - - - - -

Intangible assets ( 010-020) 030 - - - - - -


working material assets (121) 040- - - - - -

Land(122) 050 - - - - - -

Fixed assets (123) 060 529 116 080 529 116 080 529 116 080 529 116 080 529 116 080 529 116 080

Natural ressources (125) 070 - - - - - -

Depreciation of fixed assets (124,126) 080 (171 815 939) (202 277 649) (232 739 360) (263 201 071) (293 662 782) (324 124 493)


060+070-080)090 357 300 141 326 838 431 296 376 720 265 915 009 235 453 298 204 991 587

1,3Long-Term financial Assets Long-

term investments unrelated parties (131) 10048 410 48 410 48 410 48 410 48 410 48 410

Long-term investments related parties (132) 110 - - - - - -

Change of Long-term investments (133) 120 - - - - - -

Long-term receivables (134) 130 - - - - - -

Deffered income tax (135) 140 - - - - - -

expenses paid in advance (136) 150 - - - - - -

Total 1.3 (100+110+120+ +130+140+150) 160 48 410 48 410 48 410 48 410 48 410 48 410

1,4 Other Long-term assets (141,142) 170 - - - - - -

Total chapter 1 (030+090+160+170) 180 357 348 551 326 886 841 296 425 130 265 963 419 235 501 708 205 039 997



Materials (211) 190

225 405 236 676 248 509 260 935 273 982 287 681

Animal rearing and fattening (212) 200 - - - - - -

Work in progress inventory(213-214) 210 191 429 201 000 211 050 221 603 232 683 244 317

Production in progress (215) 220 - - - - - -

Finished goods (216) 230 - - - - - -

Shipped goods(217) 240 - - - - - -

Total 2.1 (190+200+210 + +220+140+150) 250 416 834 437 676 459 560 482 538 506 665 531 998



Adjustments on doubtful debts (222) 270 - - - - - -

Receivables from related parties (223) 280 - - - - - -


Receivables from budget(225) 300 - - - - - -

Preliminary Claims (226) 310 - - - - - -

Receivables from personnel (227) 320 134 752 141 489 148 564 155 992 163 792 171 981


(228)330 - - - - - -

Other receivables(229) 340 - - - - - -

Total 2.2 (260-270+280+

290+300+310+320+ 330+340)350 6 235 647 6 547 610 6 875 000 7 218 750 7 579 688 7 958 672

2,3



parties (231) 360

- - - - - -


(232)

370 - - - - - -

Decrease of short-term investments (233) 380 - - - - - -

Total 2.3 (360+370+380) 390 - - - - - -

2,4Cash Cash

(241) 40012 718 244 17 002 372 21 777 000 31 028 162 40 623 095 50 578 987


Current accounts in foreign currency (243) 420 - - - - - -

Other cash (244, 245, 246) 430 - - - - - -

Total 2.4 (400+410+ 420+430) 440 89 690 057 119 902 059 153 573 114 218 813 033 286 477 251 356 686 983

2,5 Other current assets (251, 252) 450 6 398 6 717 7 053 7 406 7 776 8 165


350+390+440+450)460 96 348 936 126 894 062 160 914 727 226 521 727 294 571 380 365 185 818

TOTAL ASSETS (180+460) 470 453 697 487 453 780 903 457 339 857 492 485 146 530 073 088 570 225 815


Nr.

n.s.LIABILITIES Cod 2015 2016 2017 2018 2019 2020

3 3.1 EQUITY Share and

additional capital Share

capital (311) 480

275 510 836 275 510 836 275 510 836 275 510 836 275 510 836 275 510 836

Additional capital (312) 490 - - - - - -

Unpaid capital (313) 500 - - - - - -

Capital withdraw (314) 510 - - - - - -

Total.3.1 (480+490-500-510) 520 275 510 836 275 510 836 275 510 836 275 510 836 275 510 836 275 510 836

3,2Reserves

Reserves according to law (321) 530- - - - - -

Reserves according to statutory doc. (322) 540 - - - - - -

Others (323) 550 368 820 368 820 368 820 368 820 368 820 368 820

Total 3.2 (530+540+550) 560 368 820 368 820 368 820 368 820 368 820 368 820

3,3

Profit and loss surplus (331)

570

- - - - - -

Retained earnings (uncovered loss) of previous

years (332) 580 72 283 630 93 313 566 117 592 386 145 219 536 177 559 432 212 201 712

Net profit (loss) (333) 590 48 766 997 55 474 124 62 390 607 69 526 915 74 374 038 79 463 516

Used profit (334) 600 - - - - - -

Total 3.3 (± 570±580± 590±600) 610 121 050 628 148 787 690 179 982 994 214 746 451 251 933 470 291 665 228

3,4

Secondary capital


assets (341)

620 - - - - - -

Grants (342) 630 - - - - - -

Total 3.4 (±620±630) 640 - - - - - -

TOTAL chapter 3 (520+560±610±640) 650 396 930 284 424 667 346 455 862 650 490 626 107 527 813 126 567 544 884




660 56 000 000 28 000 000 - - - -

Loans (413) 670 - - - - - -

Others (414) 680 - - - - - -

Total 4.1 (660+670+680) 690 56 000 000 28 000 000 - - - -


Lease Long term liabilities (421)700 - - - - - -

Anticipated long-term revenue (422) 710 - - - - - -

Special revenues (423) 720 - - - - - -

Revenues received in advance (424) 730 - - - - - -

Deffered tax(425) 740 - - - - - -

Others (426) 750 - - - - - -

Total 4.2 (700+710+720+ 730+740+750) 760 - - - - - -

Total chapter 4 (690+760) 770 56 000 000 28 000 000 - - - -




780 - - - - - -

Loans (513) 790 - - - - - -

Current share of long-term liabilities (514) 800 - - - - - -

Others (515, 516) 810 - - - - - -

Total.5.1 (780+790+800+810) 820 - - - - - -


Short term commercial liabilities (521) 830 555 026 890 770 1 243 281 1 613 416 2 002 058 2 410 132

Short term liabilities to related parties (522) 840 - - - - - -

Revenues received in advance(523) 850 - - - - - -

Total 5.2 (830+840+850) 860 555 026 890 770 1 243 281 1 613 416 2 002 058 2 410 132


Accounted salary (531)870 96 817 101 658 106 741 112 078 117 682 123 566

Other accounted liabilities to personnel (532) 880 - - - - - -

Accounted Social insurance (533) 890 73 352 77 019 80 870 84 914 89 160 93 618

Taxes payable (534) 900 40 968 43 016 45 167 47 426 49 797 52 287

Preliminary liabilities (535) 910 - - - - - -

Extrabudget liabilities (536) 920 - - - - - -

Shareholders payable (537) 930 - - - - - -

future expenses and payments provisions (538) 940 - - - - - -

Others (539) 950 1 041 1 093 1 148 1 205 1 265 1 329

Total 5.3 (870+880+890+

900+910+920+930+940+950)960 212 178 222 787 233 926 245 623 257 904 270 799

TOTAL chapter 5 (820+860+960) 970 767 204 1 113 557 1 477 207 1 859 039 2 259 962 2 680 931

TOTAL LIABILITIES (650+770+970) 980 453 697 488 453 780 903 457 339 857 492 485 146 530 073 088 570 225 815


2011 2012 2013 2014 2015

Capital investment 459 905 036

Inputs 22 921 430 63 999 263 85 612 656 89 893 289 94 387 953

Outputs 2 819 248 3 019 648 17 179 160 14 538 118 11 905 024

ratio of Actualization 10% 1,10 1,21 1,33 1,46 1,61

Updated flow 18 274 711 50 396 376 51 415 098 51 468 595 51 215 409

Treasury flow -459 905 035 20 102 183 60 979 615 68 433 496 75 355 170 82 482 929

Accumulated flow 0 -459 905 035 -441 630 324 -391 233 948 -339 818 850 -288 350 254 -237 134 845

Period of Recoverability T 9,9 ani

Net Present Value VNA 4 201 022 MDL

Rates of Return RIR 10%

Profitability Index (PI) 1,01


0 2016 2017 2018 2019 2020


Inputs 99 107 351 104 062 718 109 265 854 114 729 147 120 465 604

Outputs 9 280 275 6 664 289 4 057 504 4 260 379 4 473 398


Updated flow 50 705 042 49 980 795 49 080 472 46 849 541 44 720 017

Treasury flow -459 905 035 89 827 075 97 398 429 105 208 351 110 468 768 115 992 206

Accumulated flow -459 905 035 -186 429 803 -136 449 008 -87 368 536 -40 518 995 4 201 022






Optimal value Formula

2008 2009 2010 2011 2012 2013 2014

liquidity indicatorsLiquidity Ratio (Coverage) >1,5 Current assets / Current liabilities 14,22 11,23 12,16 18,95 38,29 65,88 95,07

Intermediate Liquidity (Acid Test) >0,7(Cash + Short-term receivables) / Current

Liabilities7,74 5,75 7,28 15,96 36,25 64,49 94,12

Immediate liquidity >0,1 Cash / Current Liabilities 1,40 0,09 0,07 13,34 29,99 56,46 86,00Working capital (thousand, MDL) Current Assets-Current Liabilities 1 423,6 1 255,3 1 537,7 10 829,5 24 712,8 45 145,2 68 736,5financial stability Capital Adequacy Ratio >30% Equity / Total assets 99,6% 99,5% 99,5% 99,8% 70,3% 75,7% 81,5%Leverage Ratio <2,33 Loan Capital / Equity 0,00 0,00 0,01 0,00 0,30 0,24 0,19

Financial Stability Coefficient (Permanent Capital - Activelle long term) / Total

assets *0,05 0,05 0,06 0,04 0,05 0,10 0,15

Interest Coverage Ratio Profit before tax + interest / interest amount - - - - - 4,98 6,36

Debt Service Ratio (Interest payment + payment + Net loans) /

(Interest + Payment loans LDAP)- - - - - 1,46 1,60

debt service rate >1,2(Net income + depreciation + interest over the

period) / (loan + interest over time)- - - - 1,9 2,1

turnover speed Time of turnover of assets (days) average balances of assets x n / net sales - 4 830,0 4 388,5 2 324,9 2 119,5 1 954,5 1 828,0

Time of turnover of long term assets (days) average balances of long term assets x n / net

sales- 4 560,0 4 129,8 2 228,2 2 017,3 1 806,1 1 599,2

Time of turnover of current assets average balances of current assets x n / net sales - 269,9 258,6 96,7 102,2 148,4 228,8

Time of turnover of short-term receivables (days) Average balances of short-term debt x n / net

sales- 127,7 143,0 19,0 15,9 20,3 22,9

Time of turnover of loan debt (days) Average debt balances payable x n / cost of sales - 1,6 1,6 15,7 12,0 5,6 5,9

Time of turnover of stocks of commodities and materials (days) Average balances of goods and materials stocks x

n / cost of sales- 267,0 240,6 83,9 40,4 13,2 9,4

Number of days per period, days n 366 365 365 365 366 365 365profitability Investment Profitability Net profit / investment cost - - - 7% 10% 8% 10%Return On Equity (ROE) Net profit / average equity - -1% 0% 11% 14% 10% 12%Return On Assets (ROA) Net profit / average assets - -1% 0% 11% 12% 8% 9%Gross Margin (%) gross profit / net sales - 53% 53% 78% 78% 64% 65%Net Profit Margin Net profit / net sales - -17% 2% 72% 68% 41% 46%* Permanent Capital = Equity + Long Term Debt

Forecast


0 Optimal value Formula

2015 2016 2017 2018 2019 2020

liquidity indicatorsLiquidity Ratio (Coverage) >1,5 Current assets / Current liabilities 125,58 113,95 108,93 121,85 130,34 136,22


Liabilities125,03 113,55 108,62 121,59 130,12 136,01

Immediate liquidity >0,1 Cash / Current Liabilities 116,91 107,67 103,96 117,70 126,76 133,05Working capital (thousand, MDL) 0 Current Assets-Current Liabilities 95 581,7 125 780,5 159 437,5 224 662,7 292 311,4 362 504,9financial stability Capital Adequacy Ratio >30% Equity / Total assets 87,5% 93,6% 99,7% 99,6% 99,6% 99,5%Leverage Ratio <2,33 Loan Capital / Equity 0,13 0,06 0,00 0,00 0,00 0,00

Financial Stability Coefficient 0(Permanent Capital - Activelle long term) / Total

assets *0,21 0,28 0,35 0,46 0,55 0,64

Interest Coverage Ratio 0 Profit before tax + interest / interest amount 8,69 13,38 27,54 - - -

Debt Service Ratio 0(Interest payment + payment + Net loans) /

(Interest + Payment loans LDAP)1,74 1,90 2,09 - - -

debt service rate >1,2(Net income + depreciation + interest over

the period) / (loan + interest over time)2,4 2,7 3,1 - - -

turnover speed

Time of turnover of assets (days) average balances of assets x n / net sales 1 721,3 1 637,5 1 561,5 1 550,3 1 589,5 1 633,4


sales1 408,0 1 234,7 1 068,2 917,9 779,5 654,0

Time of turnover of current assets average balances of current assets x n / net sales 313,3 402,8 493,2 632,4 810,0 979,4


sales23,0 23,1 23,0 23,0 23,0 23,1

Time of turnover of loan debt (days) Average debt balances payable x n / cost of sales 6,2 8,2 12,1 16,2 20,4 24,9

Time of turnover of stocks of commodities and materials

(days)

Average balances of goods and materials stocks x

n / cost of sales6,3 4,9 5,1 5,3 5,6 5,9

Number of days per period, days n 365 366 365 365 365 366profitability Investment Profitability Net profit / investment cost 11% 13% 14% 16% 17% 18%

Return On Equity (ROE) Net profit / average equity 13% 14% 14% 15% 15% 15%

Return On Assets (ROA) Net profit / average assets 11% 12% 14% 15% 15% 14%Gross Margin (%) gross profit / net sales 67% 68% 70% 71% 72% 74%Net Profit Margin Net profit / net sales 50% 55% 59% 62% 63% 64%* Permanent Capital = Equity + Long Term Debt

Forecast


Initial cost

Depreciation

ratio Residual value

Value of annual

depreciation

lei (%) lei lei

Refrigerator equipment phase 1 72 000 000 10% 7 200 000 6 480 000

Packing house equipment phase 1 26 127 360 10% 2 612 736 2 351 462



Current fixed assets 24 194 429 5% 1 209 721 1 149 235

Utilities 17 779 951 5% 888 998 844 548

new investments in repairs 227 473 749 5% 11 373 687 10 805 003

Total 196 254 720 20 835 193 30 461 711








packing house equipment €1 959 552

packing house machinery €1 306 368


gas, etc.. )€1 111 247



Total, % 100%

Ratio Eur = 16,00

Ratio Usd = 12,00

Space (sq.m.)Investment item Size (LxlxH m) total amountVolume(cub.

m.)Capacity(t)












gas, etc.. )€722 311



Total, % 100%


m.)total amountCapacity(t)












gas, etc.. )€388 936



Total, % 100%


m.)Capacity(t) total amount


2011 2012 2013 2014 2015 2016

Total available volume 15 000 ton 30 000 ton 30 000 ton 30 000 ton 30 000 ton 30 000 ton


0,30 lei/kg/month 0,32 lei/kg/month 0,33 lei/kg/month 0,35 lei/kg/month 0,36 lei/kg/month 0,38 lei/kg/month


0,50 lei/kg 0,55 lei/kg 0,60 lei/kg 0,63 lei/kg 0,66 lei/kg 0,69 lei/kg

Sales plan for 2011


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

Storage Income 0 0 0 0 0 0

sorting and packaging Income 0 0 0 0 0 0

Total 0 lei 0 lei 0 lei 0 lei 0 lei 0 lei

Sales plan for 2012


70% 55% 35% 0% 0% 10%

Storage Income 3 150 000 2 475 000 1 575 000 0 0 472 500



Sales plan for 2013


70% 55% 35% 0% 0% 10%

Storage Income 6 945 750 5 457 375 3 472 875 0 0 992 250



Incomes 2011 2012 2013 2014 2015 2016

Storage Income 20 250 000 51 933 938 64 992 375 68 241 994 71 654 093 75 236 798

sorting and packaging Income 1 125 000 12 562 500 24 825 000 26 066 250 27 369 563 28 738 041

Total 21 375 000 lei 64 496 438 lei 89 817 375 lei 94 308 244 lei 99 023 656 lei 103 974 839 lei


2017 2018 2019 2020

Total available volume 30 000 ton 30 000 ton 30 000 ton 30 000 ton


0,40 lei/kg/month 0,42 lei/kg/month 0,44 lei/kg/month 0,47 lei/kg/month


0,73 lei/kg 0,77 lei/kg 0,80 lei/kg 0,84 lei/kg

Sales plan for 2011


0% 70% 100% 100% 95% 85% 0%

Storage Income 0 3 150 000 4 500 000 4 500 000 4 275 000 3 825 000 20 250 000

sorting and packaging Income 0 0 0 0 375 000 750 000 1 125 000

Total 0 lei 3 150 000 lei 4 500 000 lei 4 500 000 lei 4 650 000 lei 4 575 000 lei 21 375 000 lei

Sales plan for 2012


35% 70% 100% 100% 95% 85% 0%

Storage Income 1 736 438 6 615 000 9 450 000 9 450 000 8 977 500 8 032 500 51 933 938



Sales plan for 2013


35% 70% 100% 100% 95% 85% 0%

Storage Income 3 472 875 6 945 750 9 922 500 9 922 500 9 426 375 8 434 125 64 992 375

sorting and packaging Income 1 800 000 6 300 000 0 0 900 000 1 800 000 24 825 000


Incomes 2017 2018 2019 2020 0 0 0

Storage Income 78 998 638 82 948 570 87 095 998 91 450 798 0 0 0


Total 109 173 581 lei 114 632 260 lei 120 363 873 lei 126 382 066 lei 0 lei 0 lei 0 lei


2010 2011 2012 2013 2014 2015

Spaces occupied by

current residents 17 713 17 713 17 713 17 713 17 713 17 713

lease price current

residents 127,40 lei/sq.m. 250,00 lei/sq.m. 262,50 lei/sq.m. 275,63 lei/sq.m. 289,41 lei/sq.m. 303,88 lei/sq.m.

Annual income 2 256 636 lei 4 428 250 lei 4 649 663 lei 4 882 146 lei 5 126 253 lei 5 382 566 lei


residents 31 034 12 414 31 034 31 034 31 034 31 034

lease price new





2016 2017 2018 2019 2020

Spaces occupied by

current residents 17 713 17 713 17 713 17 713 17 713

lease price current

residents 319,07 lei/sq.m. 335,02 lei/sq.m. 351,78 lei/sq.m. 369,36 lei/sq.m. 387,83 lei/sq.m.



residents 31 034 31 034 31 034 31 034 31 034

lease price new





2011 2012 2013 2014 2015





- new residents 3 724 080 9 775 710 10 264 496 10 777 720 11 316 606



packing house 1 125 000 12 562 500 24 825 000 26 066 250 27 369 563


Total 29 677 330 79 079 310 105 129 391 110 385 861 115 905 154

VAT from SALES 4 946 222 13 179 885 17 521 565 18 397 643 19 317 526

Net sales 24 731 108 65 899 425 87 607 826 91 988 217 96 587 628

Operational income


2016 2017 2018 2019 2020





- new residents 11 882 437 12 476 558 13 100 386 13 755 406 14 443 176



packing house 28 738 041 30 174 943 31 683 690 33 267 874 34 931 268


Total 121 700 411 127 785 432 134 174 704 140 883 439 147 927 611

0 0% 0% 0% 0% 0%

VAT from SALES 20 283 402 21 297 572 22 362 451 23 480 573 24 654 602

Net sales 101 417 010 106 487 860 111 812 253 117 402 866 123 273 009

Operational income


2011 2012 2013 2014 2015

Direct consumptions amont amont amont amont amont

Raw material 45 000 47 250 49 613 52 093 54 698


Salary 360 000 378 000 396 900 416 745 437 582

Other costs 5 000 5 250 5 513 5 788 6 078

subtotal 460 000 483 000 507 150 532 508 559 133


2011 2012 2013 2014 2015

Indirect consumptions amont amont amont amont amont



subtotal 5 093 056 13 974 519 31 564 211 31 619 336 31 677 217


2011 2012 2013 2014 2015

Managing expenses amont amont amont amont amont




subtotal 80 000 84 000 88 200 92 610 97 241



Transportation 130 000 136 500 143 325 150 491 158 016



Taxes 51 000 53 550 56 228 59 039 61 991


subtotal 1 591 000 1 670 550 1 754 078 1 841 781 1 933 870


Interest rate 0 0 14 000 000 11 200 000 8 400 000


subtotal 30 000 31 500 14 033 075 11 234 729 8 436 465

Total Operational expenses 1 701 000 1 786 050 15 875 353 13 169 120 10 467 576

Total expenses 7 254 056 16 243 569 47 946 713 45 320 964 42 703 926


2016 2017 2018 2019 2020

Direct consumptions Suma Suma Suma Suma Suma

Raw material 57 433 60 304 63 320 66 485 69 810


Salary 459 461 482 434 506 556 531 884 558 478

Other costs 6 381 6 700 7 036 7 387 7 757

subtotal 587 090 616 444 647 266 679 630 713 6110 0 0 0 0 0


2016 2017 2018 2019 2020

Indirect consumptions Suma Suma Suma Suma Suma



subtotal 31 737 992 31 801 807 31 868 811 31 939 166 32 013 0390 0 0 0 0 0


2016 2017 2018 2019 2020

Managing expenses Suma Suma Suma Suma Suma




subtotal 102 103 107 208 112 568 118 196 124 106



Transportation 165 917 174 212 182 923 192 069 201 673



Taxes 65 090 68 345 71 762 75 350 79 118


subtotal 2 030 564 2 132 092 2 238 697 2 350 632 2 468 163


Interest rate 5 600 000 2 800 000 0 0 0


subtotal 5 638 288 2 840 203 42 213 44 324 46 5400 0 0 0 0 0

Total Operational expenses 7 770 955 5 079 503 2 393 478 2 513 152 2 638 8090 0 0 0 0 0

Total expenses 40 096 037 37 497 753 34 909 555 35 131 948 35 365 459


Total Total Total Total Total Total Total

2009 2010 2011 2012 2013 2014 2015

I Operational Activity

A cash earnings

earnings from sales 1 689 483 2 046 935 28 193 464 76 609 211 103 904 985 110 335 251 115 917 015





earnings from receivables 1 483 867 4 032 064 5 468 683 5 807 118

other earnings 61 642 64 640 Total earnings 1 751 125 2 111 575 28 193 464 76 609 211 103 904 985 110 335 251 115 917 015

B cash payments

Payments to suppliers and contractors 461 616 556 635 1 490 000 1 564 500 1 642 725 1 724 861 1 811 104 Salary and social insrance payments 960 750 992 864 1 620 000 1 701 000 1 786 050 1 875 353 1 969 120 interest payments - - - - 14 000 000 11 200 000 8 400 000 payment of income tax 4 991 661 3 993 490 4 695 473 5 418 555 other payments (including VAT) 498 825 601 503 4 501 577 12 561 002 17 099 938 18 160 771 19 079 643

Taxes 51 000 53 550 56 228 59 039 61 991 VAT 4 450 577 12 507 452 17 043 710 18 101 732 19 017 652 Others 498 825 601 503

Total payments 1 921 191 2 151 001 7 611 577 20 818 162 38 522 203 37 656 457 36 678 422

NET FLOW from OPERATIONAL ACTIVITY (170 066) (39 426) 20 581 886 55 791 049 65 382 783 72 678 794 79 238 592


earnings from the output of long term assets 30 333 37 380 payments for purchase of long term assets - - 257 542 265 183 966 155 - - -

payment for refrigerator construction 72 000 000 72 000 000

payment for packing house construction 26 127 360 26 127 360

payment for utilities 11 556 968 6 222 983

payment for reparation of buildings 147 857 937 79 615 812 Interest received

Dividends received

others

NET FLOW from INVESTMENT ACTIVITY 30 333 37 380 (257 542 265) (183 966 155) - - -


earnings from loans and credits - - - 140 000 000 - - - earnings from the issue of own shares 245 000 000 others - - - - - - - Sub-total - - 245 000 000 140 000 000 - - -

E payments for loans and credits - - - - 28 000 000 28 000 000 28 000 000 dividend payment 17 970 705 21 129 629 24 383 499 payments for purchasing of own shares

others

Sub-total - - - - 45 970 705 49 129 629 52 383 499

NET FLOW from FINANCIAL ACTIVITY - - 245 000 000 140 000 000 (45 970 705) (49 129 629) (52 383 499)

NET FLOW from economic activity(139 733) (2 046) 8 039 621 11 824 894 19 412 078 23 549 165 26 855 094

Exceptional earnings (payments)

H TOTAL NET FLOW (139 733) (2 046) 8 039 621 11 824 894 19 412 078 23 549 165 26 855 094



150 985 11 252 9 206 8 048 827 19 873 720 39 285 798 62 834 963

J Cash balance at the end of the period 11 252 9 206 8 048 827 19 873 720 39 285 798 62 834 963 89 690 057


Total Total Total Total Total

2016 2017 2018 2019 2020

I Operational Activity - - - - -

A cash earnings

earnings from sales 121 716 286 127 802 281 134 192 404 140 902 025 147 947 126





earnings from receivables 6 100 896 6 406 120 6 726 436 7 062 758 7 415 896

other earnings - - - - - Total earnings 121 716 286 127 802 281 134 192 404 140 902 025 147 947 126

B cash payments

Payments to suppliers and contractors 1 901 660 1 996 743 2 096 580 2 201 409 2 311 479 Salary and social insrance payments 2 067 576 2 170 955 2 279 503 2 393 478 2 513 152 interest payments 5 600 000 2 800 000 - - - payment of income tax 6 163 792 6 932 290 7 725 213 8 263 782 8 829 280 other payments (including VAT) 20 034 195 21 035 935 22 087 733 23 192 120 24 351 726

Taxes 65 090 68 345 71 762 75 350 79 118 VAT 19 969 104 20 967 590 22 015 971 23 116 769 24 272 608 Others - - - - -

Total payments 35 767 222 34 935 922 34 189 028 36 050 788 38 005 636

NET FLOW from OPERATIONAL ACTIVITY 85 949 064 92 866 359 100 003 376 104 851 237 109 941 490


earnings from the output of long term assets - - - - - payments for purchase of long term assets - - - - -

payment for refrigerator construction - - - - -

payment for packing house construction - - - - -

payment for utilities - - - - -

payment for reparation of buildings - - - - - Interest received - - - - - Dividends received - - - - - others - - - - -

NET FLOW from INVESTMENT ACTIVITY - - - - -


earnings from loans and credits - - - - - earnings from the issue of own shares - - - - - others - - - - - Sub-total - - - - -

E payments for loans and credits 28 000 000 28 000 000 - - - dividend payment 27 737 062 31 195 304 34 763 457 37 187 019 39 731 758 payments for purchasing of own shares - - - - - others - - - - - Sub-total 55 737 062 59 195 304 34 763 457 37 187 019 39 731 758

NET FLOW from FINANCIAL ACTIVITY (55 737 062) (59 195 304) (34 763 457) (37 187 019) (39 731 758)

NET FLOW from economic activity30 212 002 33 671 055 65 239 919 67 664 218 70 209 732

Exceptional earnings (payments) - - - - -

H TOTAL NET FLOW 30 212 002 33 671 055 65 239 919 67 664 218 70 209 732

Exchange differences - - - - -


89 690 057 119 902 059 153 573 114 218 813 033 286 477 251

J Cash balance at the end of the period 119 902 059 153 573 114 218 813 033 286 477 251 356 686 983


No row 2009 2010 2011 2012 2013 2014

1. Net sales 01 1 966 966 2 154 668 24 731 108 65 899 425 87 607 826 91 988 217

2. Cost of sales 02 927 912 1 012 694 5 369 723 14 265 019 31 869 236 31 939 612

3. Gross Profit 03 1 039 054 1 141 974 19 361 385 51 634 406 55 738 590 60 048 605

4. Other operational income 04 15 874 17 307

5.Commercial expenses 05 66 667 70 000 73 500 77 175


7.Other operational expenses 07 3 288 3 288 25 000 26 250 14 027 563 11 228 941

8. Results from operating activities (3+4-5-6-

7)08 (360 885) 3 468 17 725 385 49 916 606 39 934 900 46 954 731

9.Results from investment activity 09 29 904 37 380

10. Results from financial activity 10


(8+9+10)11 (330 981) 40 848 17 725 385 49 916 606 39 934 900 46 954 731

12.Results from exceptional activity 12

13.Profit before taxes (11+12) 13 (330 981) 40 848 17 725 385 49 916 606 39 934 900 46 954 731

14.Income tax 14 (4 991 661) (3 993 490) (4 695 473)

15.Net profit (13+14) 15 (330 981) 40 848 17 725 385 44 924 946 35 941 410 42 259 258


0 No row 2015 2016 2017 2018 2019 2020

1. Net sales 01 96 587 628 101 417 010 106 487 860 111 812 253 117 402 866 123 273 009

2. Cost of sales 02 32 013 507 32 091 097 32 172 566 32 258 109 32 347 929 32 442 240

3. Gross Profit 03 64 574 121 69 325 912 74 315 294 79 554 144 85 054 937 90 830 769

4. Other operational income 04 - - - - - -

5.Commercial expenses 05 81 034 85 085 89 340 93 807 98 497 103 422


7.Other operational expenses 07 8 430 388 5 631 907 2 833 502 35 178 36 936 38 783

8. Results from operating activities (3+4-5-6-7) 08 54 185 553 61 637 916 69 322 897 77 252 128 82 637 819 88 292 796

9.Results from investment activity 09 - - - - - -

10. Results from financial activity 10 - - - - - -


(8+9+10)11 54 185 553 61 637 916 69 322 897 77 252 128 82 637 819 88 292 796

12.Results from exceptional activity 12 - - - - - -

13.Profit before taxes (11+12) 13 54 185 553 61 637 916 69 322 897 77 252 128 82 637 819 88 292 796

14.Income tax 14 (5 418 555) (6 163 792) (6 932 290) (7 725 213) (8 263 782) (8 829 280)

15.Net profit (13+14) 15 48 766 997 55 474 124 62 390 607 69 526 915 74 374 038 79 463 516


ASSETS No 2008 2009 2010 2011 2012 2013 2014

1

1.1

Long-Term Assets

Intangible assets

Intangible assets (111,112) 010

- - - - - - -

Intangible assets amortization (113) 020 - - - - - - -

Intangible assets ( 010-020) 030 - - - - - - -


working material assets (121) 04015 566 15 566 15 566 159 414 905

Land(122) 050 - - - - - - -

Fixed assets (123) 060 87 513 844 87 607 660 87 607 660 185 735 020 529 116 080 529 116 080 529 116 080

Natural ressources (125) 070 - - - - - - -

Depreciation of fixed assets (124,126) 080 (62 930 117) (63 171 674) (63 413 231) (67 506 287) (80 430 806) (110 892 517) (141 354 228)


060+070-080)090 24 599 293 24 451 552 24 209 995 277 643 638 448 685 274 418 223 563 387 761 852

1,3

Long-Term financial Assets Long-

term investments unrelated parties (131)

100

48 410 48 410 48 410 48 410 48 410 48 410 48 410

Long-term investments related parties (132) 110 - - - - - - -

Change of Long-term investments (133) 120 - - - - - - -

Long-term receivables (134) 130 - - - - - - -

Deffered income tax (135) 140 - - - - - - -

expenses paid in advance (136) 150 - - - - - - -

Total 1.3 (100+110+120+ +130+140+150) 160 48 410 48 410 48 410 48 410 48 410 48 410 48 410

1,4 Other Long-term assets (141,142) 170 - - - - - - -

Total chapter 1 (030+090+160+170) 180 24 647 703 24 499 962 24 258 405 277 692 048 448 733 684 418 271 973 387 810 262



Materials (211) 190

168 330 165 214 162 668 185 442 194 714 204 449 214 672

Animal rearing and fattening (212) 200 - - - - - - -

Work in progress inventory(213-214) 210 45 291 45 129 45 018 1 616 188 1 153 079 754 102 476 012

Production in progress (215) 220 - - - - - - -

Finished goods (216) 230 469 467 457 635 459 682 - - - -

Shipped goods(217) 240 6 250 - - - - - -

Total 2.1 (190+200+210 + +220+140+150) 250 689 338 667 978 667 368 1 801 630 1 347 793 958 551 690 684



Adjustments on doubtful debts (222) 270 - - - - - - -

Receivables from related parties (223) 280 - - - - - - -

expenses paid in advance (224) 290 - - -

Receivables from budget(225) 300 455 387 - - - - -

Preliminary Claims (226) 310 - - - - - - -

Receivables from personnel (227) 320 2 572 20 694 20 694 93 123 116 404 122 224 128 335


(228)330 461 133 499 686 670 016 - - -

Other receivables(229) 340 - - - - - - -

Total 2.2 (260-270+280+

290+300+310+320+ 330+340)350 682 719 694 047 993 950 1 576 990 4 148 467 5 590 907 5 935 454

2,3



parties (231) 360

- - - - - - -


(232)370 - - - - - - -

Decrease of short-term investments (233) 380 - - - - - - -

Total 2.3 (360+370+380) 390 - - - - - - -

2,4Cash Cash

(241) 40021 410 1 000 1 305 1 141 341 2 818 137 5 570 811 8 910 134


Current accounts in foreign currency (243) 420 - - - - - - -

Other cash (244, 245, 246) 430 - - - - - - -

Total 2.4 (400+410+ 420+430) 440 150 985 11 252 9 206 8 048 827 19 873 720 39 285 798 62 834 963

2,5 Other current assets (251, 252) 450 8 178 4 774 5 013 5 263 5 527 5 803 6 093


350+390+440+450)460 1 531 220 1 378 051 1 675 536 11 432 709 25 375 507 45 841 060 69 467 193

TOTAL ASSETS (180+460) 470 26 178 923 25 878 013 25 933 941 289 124 757 474 109 191 464 113 033 457 277 456


Nr.

n.s.LIABILITIES Cod 2008 2009 2010 2011 2012 2013 2014

3 3.1 EQUITY Share

and additional capital Share

capital (311) 480

30 510 836 30 510 836 30 510 836 275 510 836 275 510 836 275 510 836 275 510 836

Additional capital (312) 490 - - - - - - -

Unpaid capital (313) 500 - - - - - - -

Capital withdraw (314) 510 - - - - - - -

Total.3.1 (480+490-500-510) 520 30 510 836 30 510 836 30 510 836 275 510 836 275 510 836 275 510 836 275 510 836

3,2Reserves

Reserves according to law (321) 530- - - - - - -

Reserves according to statutory doc. (322) 540 - - - - - - -

Others (323) 550 368 820 368 820 368 820 368 820 368 820 368 820 368 820

Total 3.2 (530+540+550) 560 368 820 368 820 368 820 368 820 368 820 368 820 368 820

3,3 Profit and loss surplus (331) 570 - 14 991 - - - - -

Retained earnings (uncovered loss) of

previous years (332) 580 (4 809 669) (4 808 394) (5 124 384) (5 083 536) 12 641 850 39 596 090 54 407 872

Net profit (loss) (333) 590 1 275 (330 981) 40 848 17 725 385 44 924 946 35 941 410 42 259 258

Used profit (334) 600 - - -

Total 3.3 (± 570±580± 590±600) 610 (4 808 394) (5 124 384) (5 083 536) 12 641 850 57 566 795 75 537 500 96 667 129

3,4

Secondary capital


assets (341)

620 - - - - - - -

Grants (342) 630 - - - - - - -

Total 3.4 (±620±630) 640 - - - - - - -

TOTAL chapter 3 (520+560±610±640) 650 26 071 262 25 755 272 25 796 120 288 521 506 333 446 451 351 417 156 372 546 785




660 - - - - 140 000 000 112 000 000 84 000 000

Loans (413) 670 - - - - - - -

Others (414) 680 - - - - - - -

Total 4.1 (660+670+680) 690 - - - - 140 000 000 112 000 000 84 000 000


Lease Long term liabilities (421)700 - - - - - - -

Anticipated long-term revenue (422) 710 - - - - - - -

Special revenues (423) 720 - - - - - - -

Revenues received in advance (424) 730 - - - - - - -

Deffered tax(425) 740 - - - - - - -

Others (426) 750 - - - - - - -

Total 4.2 (700+710+720+ 730+740+750) 760 - - - - - - -

Total chapter 4 (690+760) 770 - - - - 140 000 000 112 000 000 84 000 000




780 - - - - - - -

Loans (513) 790 - - - - - - -

Current share of long-term liabilities (514) 800 - - - - - - -

Others (515, 516) 810 - - - - - - -

Total.5.1 (780+790+800+810) 820 - - - - - - -


Short term commercial liabilities (521) 830 3 921 4 221 4 521 456 621 479 452 503 425 528 596

Short term liabilities to related parties (522) 840 - - - - - - -

Revenues received in advance(523) 850 - - - - - - -

Total 5.2 (830+840+850) 860 3 921 4 221 4 521 456 621 479 452 503 425 528 596


Accounted salary (531)870 44 573 52 699 60 825 66 908 83 634 87 816 92 207

Other accounted liabilities to personnel (532) 880 - - - - - - -

Accounted Social insurance (533) 890 3 897 24 990 46 083 50 691 63 364 66 532 69 859

Taxes payable (534) 900 51 920 38 829 25 738 28 312 35 390 37 159 39 017

Preliminary liabilities (535) 910 - - - - - - -

Extrabudget liabilities (536) 920 - - - - - - -

Shareholders payable (537) 930 - - - - - - -

future expenses and payments provisions

(538)940 - - - - - - -

Others (539) 950 3 350 2 002 654 719 899 944 991

Total 5.3 (870+880+890+

900+910+920+930+940+950)960 103 740 118 520 133 300 146 630 183 288 192 452 202 074

TOTAL chapter 5 (820+860+960) 970 107 661 122 741 137 821 603 251 662 740 695 877 730 670

TOTAL LIABILITIES (650+770+970) 980 26 178 923 25 878 013 25 933 941 289 124 757 474 109 191 464 113 033 457 277 455


Nr.

n.s.ASSETS No 2015 2016 2017 2018 2019 2020

1

1.1

Long-Term Assets Intangible

assets Intangible assets

(111,112) 010

- - - - - -

Intangible assets amortization (113) 020 - - - - - -

Intangible assets ( 010-020) 030 - - - - - -


working material assets (121) 040- - - - - -

Land(122) 050 - - - - - -

Fixed assets (123) 060 529 116 080 529 116 080 529 116 080 529 116 080 529 116 080 529 116 080

Natural ressources (125) 070 - - - - - -

Depreciation of fixed assets (124,126) 080 (171 815 939) (202 277 649) (232 739 360) (263 201 071) (293 662 782) (324 124 493)


060+070-080)090 357 300 141 326 838 431 296 376 720 265 915 009 235 453 298 204 991 587

1,3Long-Term financial Assets Long-

term investments unrelated parties (131) 10048 410 48 410 48 410 48 410 48 410 48 410

Long-term investments related parties (132) 110 - - - - - -

Change of Long-term investments (133) 120 - - - - - -

Long-term receivables (134) 130 - - - - - -

Deffered income tax (135) 140 - - - - - -


Total 1.3 (100+110+120+ +130+140+150) 160 48 410 48 410 48 410 48 410 48 410 48 410

1,4 Other Long-term assets (141,142) 170 - - - - - -

Total chapter 1 (030+090+160+170) 180 357 348 551 326 886 841 296 425 130 265 963 419 235 501 708 205 039 997



Materials (211) 190

225 405 236 676 248 509 260 935 273 982 287 681

Animal rearing and fattening (212) 200 - - - - - -

Work in progress inventory(213-214) 210 191 429 201 000 211 050 221 603 232 683 244 317

Production in progress (215) 220 - - - - - -

Finished goods (216) 230 - - - - - -

Shipped goods(217) 240 - - - - - -

Total 2.1 (190+200+210 + +220+140+150) 250 416 834 437 676 459 560 482 538 506 665 531 998



Adjustments on doubtful debts (222) 270 - - - - - -

Receivables from related parties (223) 280 - - - - - -


Receivables from budget(225) 300 - - - - - -

Preliminary Claims (226) 310 - - - - - -

Receivables from personnel (227) 320 134 752 141 489 148 564 155 992 163 792 171 981


(228)330 - - - - - -

Other receivables(229) 340 - - - - - -

Total 2.2 (260-270+280+

290+300+310+320+ 330+340)350 6 235 647 6 547 610 6 875 000 7 218 750 7 579 688 7 958 672

2,3



parties (231) 360

- - - - - -


(232)

370 - - - - - -

Decrease of short-term investments (233) 380 - - - - - -

Total 2.3 (360+370+380) 390 - - - - - -

2,4Cash Cash

(241) 40012 718 244 17 002 372 21 777 000 31 028 162 40 623 095 50 578 987


Current accounts in foreign currency (243) 420 - - - - - -

Other cash (244, 245, 246) 430 - - - - - -

Total 2.4 (400+410+ 420+430) 440 89 690 057 119 902 059 153 573 114 218 813 033 286 477 251 356 686 983

2,5 Other current assets (251, 252) 450 6 398 6 717 7 053 7 406 7 776 8 165


350+390+440+450)460 96 348 936 126 894 062 160 914 727 226 521 727 294 571 380 365 185 818

TOTAL ASSETS (180+460) 470 453 697 487 453 780 903 457 339 857 492 485 146 530 073 088 570 225 815


Nr.

n.s.LIABILITIES Cod 2015 2016 2017 2018 2019 2020

3 3.1 EQUITY Share and

additional capital Share

capital (311) 480

275 510 836 275 510 836 275 510 836 275 510 836 275 510 836 275 510 836

Additional capital (312) 490 - - - - - -

Unpaid capital (313) 500 - - - - - -

Capital withdraw (314) 510 - - - - - -

Total.3.1 (480+490-500-510) 520 275 510 836 275 510 836 275 510 836 275 510 836 275 510 836 275 510 836

3,2Reserves

Reserves according to law (321) 530- - - - - -

Reserves according to statutory doc. (322) 540 - - - - - -

Others (323) 550 368 820 368 820 368 820 368 820 368 820 368 820

Total 3.2 (530+540+550) 560 368 820 368 820 368 820 368 820 368 820 368 820

3,3

Profit and loss surplus (331)

570

- - - - - -

Retained earnings (uncovered loss) of previous

years (332) 580 72 283 630 93 313 566 117 592 386 145 219 536 177 559 432 212 201 712

Net profit (loss) (333) 590 48 766 997 55 474 124 62 390 607 69 526 915 74 374 038 79 463 516

Used profit (334) 600 - - - - - -

Total 3.3 (± 570±580± 590±600) 610 121 050 628 148 787 690 179 982 994 214 746 451 251 933 470 291 665 228

3,4

Secondary capital


assets (341)

620 - - - - - -

Grants (342) 630 - - - - - -

Total 3.4 (±620±630) 640 - - - - - -

TOTAL chapter 3 (520+560±610±640) 650 396 930 284 424 667 346 455 862 650 490 626 107 527 813 126 567 544 884




660 56 000 000 28 000 000 - - - -

Loans (413) 670 - - - - - -

Others (414) 680 - - - - - -

Total 4.1 (660+670+680) 690 56 000 000 28 000 000 - - - -


Lease Long term liabilities (421)700 - - - - - -

Anticipated long-term revenue (422) 710 - - - - - -

Special revenues (423) 720 - - - - - -

Revenues received in advance (424) 730 - - - - - -

Deffered tax(425) 740 - - - - - -

Others (426) 750 - - - - - -

Total 4.2 (700+710+720+ 730+740+750) 760 - - - - - -

Total chapter 4 (690+760) 770 56 000 000 28 000 000 - - - -




780 - - - - - -

Loans (513) 790 - - - - - -

Current share of long-term liabilities (514) 800 - - - - - -

Others (515, 516) 810 - - - - - -

Total.5.1 (780+790+800+810) 820 - - - - - -


Short term commercial liabilities (521) 830 555 026 890 770 1 243 281 1 613 416 2 002 058 2 410 132

Short term liabilities to related parties (522) 840 - - - - - -

Revenues received in advance(523) 850 - - - - - -

Total 5.2 (830+840+850) 860 555 026 890 770 1 243 281 1 613 416 2 002 058 2 410 132


Accounted salary (531)870 96 817 101 658 106 741 112 078 117 682 123 566

Other accounted liabilities to personnel (532) 880 - - - - - -

Accounted Social insurance (533) 890 73 352 77 019 80 870 84 914 89 160 93 618

Taxes payable (534) 900 40 968 43 016 45 167 47 426 49 797 52 287

Preliminary liabilities (535) 910 - - - - - -

Extrabudget liabilities (536) 920 - - - - - -

Shareholders payable (537) 930 - - - - - -

future expenses and payments provisions (538) 940 - - - - - -

Others (539) 950 1 041 1 093 1 148 1 205 1 265 1 329

Total 5.3 (870+880+890+

900+910+920+930+940+950)960 212 178 222 787 233 926 245 623 257 904 270 799

TOTAL chapter 5 (820+860+960) 970 767 204 1 113 557 1 477 207 1 859 039 2 259 962 2 680 931

TOTAL LIABILITIES (650+770+970) 980 453 697 488 453 780 903 457 339 857 492 485 146 530 073 088 570 225 815


2011 2012 2013 2014 2015


Inputs 22 921 430 63 999 263 85 612 656 89 893 289 94 387 953

Outputs 2 819 248 3 019 648 17 179 160 14 538 118 11 905 024


Updated flow 18 274 711 50 396 376 51 415 098 51 468 595 51 215 409

Treasury flow -459 905 035 20 102 183 60 979 615 68 433 496 75 355 170 82 482 929

Accumulated flow 0 -459 905 035 -441 630 324 -391 233 948 -339 818 850 -288 350 254 -237 134 845






0 2016 2017 2018 2019 2020


Inputs 99 107 351 104 062 718 109 265 854 114 729 147 120 465 604

Outputs 9 280 275 6 664 289 4 057 504 4 260 379 4 473 398


Updated flow 50 705 042 49 980 795 49 080 472 46 849 541 44 720 017

Treasury flow -459 905 035 89 827 075 97 398 429 105 208 351 110 468 768 115 992 206

Accumulated flow -459 905 035 -186 429 803 -136 449 008 -87 368 536 -40 518 995 4 201 022






Optimal value Formula

2008 2009 2010 2011 2012 2013 2014

liquidity indicatorsLiquidity Ratio (Coverage) >1,5 Current assets / Current liabilities 14,22 11,23 12,16 18,95 38,29 65,88 95,07


Liabilities7,74 5,75 7,28 15,96 36,25 64,49 94,12

Immediate liquidity >0,1 Cash / Current Liabilities 1,40 0,09 0,07 13,34 29,99 56,46 86,00Working capital (thousand, MDL) Current Assets-Current Liabilities 1 423,6 1 255,3 1 537,7 10 829,5 24 712,8 45 145,2 68 736,5financial stability Capital Adequacy Ratio >30% Equity / Total assets 99,6% 99,5% 99,5% 99,8% 70,3% 75,7% 81,5%Leverage Ratio <2,33 Loan Capital / Equity 0,00 0,00 0,01 0,00 0,30 0,24 0,19

Financial Stability Coefficient (Permanent Capital - Activelle long term) / Total

assets *0,05 0,05 0,06 0,04 0,05 0,10 0,15

Interest Coverage Ratio Profit before tax + interest / interest amount - - - - - 4,98 6,36

Debt Service Ratio (Interest payment + payment + Net loans) /

(Interest + Payment loans LDAP)- - - - - 1,46 1,60

debt service rate >1,2(Net income + depreciation + interest over the

period) / (loan + interest over time)- - - - 1,9 2,1

turnover speed Time of turnover of assets (days) average balances of assets x n / net sales - 4 830,0 4 388,5 2 324,9 2 119,5 1 954,5 1 828,0


sales- 4 560,0 4 129,8 2 228,2 2 017,3 1 806,1 1 599,2

Time of turnover of current assets average balances of current assets x n / net sales - 269,9 258,6 96,7 102,2 148,4 228,8


sales- 127,7 143,0 19,0 15,9 20,3 22,9

Time of turnover of loan debt (days) Average debt balances payable x n / cost of sales - 1,6 1,6 15,7 12,0 5,6 5,9

Time of turnover of stocks of commodities and materials (days) Average balances of goods and materials stocks x

n / cost of sales- 267,0 240,6 83,9 40,4 13,2 9,4

Number of days per period, days n 366 365 365 365 366 365 365profitability Investment Profitability Net profit / investment cost - - - 7% 10% 8% 10%Return On Equity (ROE) Net profit / average equity - -1% 0% 11% 14% 10% 12%Return On Assets (ROA) Net profit / average assets - -1% 0% 11% 12% 8% 9%Gross Margin (%) gross profit / net sales - 53% 53% 78% 78% 64% 65%Net Profit Margin Net profit / net sales - -17% 2% 72% 68% 41% 46%* Permanent Capital = Equity + Long Term Debt

Forecast


0 Optimal value Formula

2015 2016 2017 2018 2019 2020

liquidity indicatorsLiquidity Ratio (Coverage) >1,5 Current assets / Current liabilities 125,58 113,95 108,93 121,85 130,34 136,22


Liabilities125,03 113,55 108,62 121,59 130,12 136,01

Immediate liquidity >0,1 Cash / Current Liabilities 116,91 107,67 103,96 117,70 126,76 133,05Working capital (thousand, MDL) 0 Current Assets-Current Liabilities 95 581,7 125 780,5 159 437,5 224 662,7 292 311,4 362 504,9financial stability Capital Adequacy Ratio >30% Equity / Total assets 87,5% 93,6% 99,7% 99,6% 99,6% 99,5%Leverage Ratio <2,33 Loan Capital / Equity 0,13 0,06 0,00 0,00 0,00 0,00

Financial Stability Coefficient 0(Permanent Capital - Activelle long term) / Total

assets *0,21 0,28 0,35 0,46 0,55 0,64

Interest Coverage Ratio 0 Profit before tax + interest / interest amount 8,69 13,38 27,54 - - -

Debt Service Ratio 0(Interest payment + payment + Net loans) /

(Interest + Payment loans LDAP)1,74 1,90 2,09 - - -

debt service rate >1,2(Net income + depreciation + interest over

the period) / (loan + interest over time)2,4 2,7 3,1 - - -

turnover speed

Time of turnover of assets (days) average balances of assets x n / net sales 1 721,3 1 637,5 1 561,5 1 550,3 1 589,5 1 633,4


sales1 408,0 1 234,7 1 068,2 917,9 779,5 654,0

Time of turnover of current assets average balances of current assets x n / net sales 313,3 402,8 493,2 632,4 810,0 979,4


sales23,0 23,1 23,0 23,0 23,0 23,1

Time of turnover of loan debt (days) Average debt balances payable x n / cost of sales 6,2 8,2 12,1 16,2 20,4 24,9

Time of turnover of stocks of commodities and materials

(days)

Average balances of goods and materials stocks x

n / cost of sales6,3 4,9 5,1 5,3 5,6 5,9

Number of days per period, days n 365 366 365 365 365 366profitability Investment Profitability Net profit / investment cost 11% 13% 14% 16% 17% 18%

Return On Equity (ROE) Net profit / average equity 13% 14% 14% 15% 15% 15%

Return On Assets (ROA) Net profit / average assets 11% 12% 14% 15% 15% 14%Gross Margin (%) gross profit / net sales 67% 68% 70% 71% 72% 74%Net Profit Margin Net profit / net sales 50% 55% 59% 62% 63% 64%* Permanent Capital = Equity + Long Term Debt

Forecast


Initial cost

Depreciation

ratio Residual value

Value of annual

depreciation

lei (%) lei lei





Current fixed assets 24 194 429 5% 1 209 721 1 149 235

Utilities 17 779 951 5% 888 998 844 548

new investments in repairs 227 473 749 5% 11 373 687 10 805 003

Total 196 254 720 20 835 193 30 461 711

feasability study caan_english

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