I.

THE DESCRIPTION OF THE PROJECT

A. Denomination, Head-office, Juridical form 1. The denomination of the company is S.C Health Club LCC S.R.L and is set up through the authentication of the present status and the society contract in concordance with law no..31/1990 regarding commercial societies republished with the subsequent changes and modifications in M.O. no. 1066/17 November 2004. 2.S.C. LCC is a Romanian juridical society, having the juridical form of a limited company, with three founding associates, as follows: , with the residence in .. Iconaru Claudia with the residence in 14, Valea Lunga Street, Bucharest with the residence in .. The social obligations are guaranteed with the social capital and the activity of the society is concluded according to the law no. 31/1990 3. The constituted society will be denominated SC Health Club LCC S.R.L in every act, bill or any other document . The denomination of the firm will be followed by the characteristics of the juridical form, the office and the registration number from the Commercial Register. 4. The head- office will be established in Romania, 156 Magheru Bd. and can be changed according to the Associates General Meeting according to article 199 from law no..31/1990 5. The duration of the society is unlimited starting from the date it is registered at the Commercial Register B. The object of activity The principal object of activity is: CAEN Code 9262 other sporting activities (fitness, gymnastics, swimming) The secondary activity is: CAEN Code 5211 en detail commerce for non-alcoholic drinks All the activities are unfolded at the head office.

C. The management and the personnel of the company THE MANAGEMENT No. Crt 1 2 3 THE PERSONNEL No. Crt 1 2 3 4 5 6 7 Position Name and Surname

Position Fitness Coach Fitness Coach Aerobic Trainer Aerobic Trainer Medical Assistant Cashier Room Cleaner

Name and Surname

II. THE MARKET AND THE MARKET STRATEGIES

a) The clients Our clients are persons from the central region of Bucharest, aged over 14 years, with medium or high incomes. The estimated number of the members of the club is 1200, a total number of members beneficiating from all programs including fitness, aerobics, Jacuzzi, sauna, solarium, massage. b) The concurrence Based on the market research, the concurrence is medium in this region, represented by a few societies that offer a full package of services for this segment of clients. c) The marketing mix a. The Service S.C Health Club LCC S.R.L offers - Individualized programming for your body type and for any specific needs and goals including fitness and aerobic exercises, professional guidance and expertise.

- Relaxing and anti-cellulite massage - The benefits from the latest technology of spa and sauna - Risk-free solarium tan Our goal is to have a high quality service experience for all members and all of them to be properly oriented into our club with a Personal training orientation or/and a Fit fix orientation once they have joined.

Our awesome music, passionate instructors, and world class programming inspire exhilarating, fun workout experiences. Every three months we release fresh new choreography and music for gymnastics training. b. The price
MEMBERSHIP TAX Tax Period Explication The tax for existent members to continue their membership Registration of minimum 6 members

06 60*) months 60 90 125 6 months

We provide membership cards to our clients that give them the possibility to beneficiate of all our programs of health care.

6 Registration of minimum two months members 6 months Registration tax for 1 member

After being a member of the club the prices for our services are the following:
FITNESS AND AEROBIC 09:0015:00 1/H 15:0001:00 1.5/H Massage 09:00 - 1:00 5 sedinta de 40 minute 10 sedinta de 80 minute Solarium 09:00 1:00 1 /5 minutes

Jacuzzi and Sauna 09:00-1:00 2/or

c. Promotion and publicity We are going to attract clients through a friendly environment. The ultimate goal is that friendships are developed and this creates an opportunity for members to want to come back to the club on a day to day basis. Members never cancel their membership because they have too many friends at the club or are having too much fun. We are going also to invest in a site development and a site optimization, so our potential clients can find us anywhere with just a click, we are going to share flyers all the P-ta Romana, develop attractive banners around our location and radio publicity.

III. INITIAL DATA FOR FINANCIAL ANALISYS

a. Social Capital The social capital of S.C Health Club LCC S.R.L will be Divided as follows: % value of .. Subscribed and unpaid ..% value of.. Subscribed and unpaid .%value of subscribed and unpaid

b. Description of the initial assets 1. The building One fitness room 45 square meters

One gymnastics room 20 square meters One Jacuzzi room One massage room One sauna room One solarium room 10 square meters 8 square meters 12 square meters 9 square meters

Two bathrooms Two cloakrooms

-5 * 2 square meters -7*2 square metres

Cost of the place due to the region and special arranging: 220.000 Euro

2. The equipment

a) Abdominal equipment

Powerline AB Crunch Board Price: 159.99 euro Quantity: 2pcs

Abdominal Trainer JET Folding Bench Price: 199.99 euro Quantity: 3pcs

Body Craft Hyper Extension

Price: 211 euro Quantity: 2 pcs

b) Back and arms machines Back and Arm Machine Price: 449 euro Quantity: 2pcs
Powerline Olympic Power Master Bench Price: 299.99 euro Quantity: 2pcs

Powerline Preacher Curl Bench

Price: 120 euro Quantity: 2pcs

c) Leg Machines

Husky Hip and Leg Sled Price: 899 euro Quantity: 2pcs

Seated Calf Machine Price: 120 euro Quantity: 1pcs

Elliptical Cross Trainer Price: 157 euro Quantity: 4pcs Kettler Power Stepper Price: 210 euro Quantity: 2pcs

d)

Jacuzzi 300 Series J-385 7-8 S EATS 43 Power Pro Jets Price: 9100 euro Quantity: 2 pcs

e) Massage Table Price: 110 euro Quantity: 1pcs

f) Solarium Can

Price: 8700 euro Qty: 1 Price: 6800 Qty: 1

g) Sauna

Price: 2800 euro Qty: 1

3.Furniture Total cost: 500 euro 4. Inventories S.C Health Club LCC S.R.L will sell soft-drinks for its clients.

The annual estimated level of soft-drinks acquisitions from suppliers is 7200 euro.

INITIAL BALANCE SHEET ASSETS CURRENT ASSETS Cash34894.07 Inventories.. 2200 PROPERTY PLANT AND EQUIPMENT Building..220000 Equipment.. 42905.93 Less Acc Depr.. 0 NET PROPERTY PLANT AND EQUIPMENT .262905.93 LONG-TERM DEBT LIABILITIES CURRENT LIABILITIES 0 0

SHAREHOLDERS EQUITY Paid-in Capital..300000

TOTAL ASSETS ..300000

TOTAL ASSETS.300000

Item 1 2

Investment Category Building Equipment Fitness Eq. Spa Sauna Solar Furniture Inventory Total Investment Costs

INITIAL INVESTMENT COSTS Foreign Currency Local Currency 220000 798072 5945.94 18200 2800 15500 610 7200 21569 66022 10157.28 56227.8 2212.83 26118.72

Total Costs EUR 220000 5945.94 18200 2800 15500 610 7200 270255.94

Item 1

Specification Shareholders' Equity

SOURCES OF FINANCE Foreign Currency Local Currency

% from the total fund amount 100%

Item 1

4 5 6 7

SELLING PRICES Specification Membership Card -for a gr. of min 6 pers. -for min 2 pers. -for 1 pers. Fitness -from 9AM-3PM -from 3PM-1AM Aerobics -from 9AM-3PM -from 3PM-1AM Solarium Massage Jacuzzi Sauna

Value/Amount 60 EUR 90 EUR 125 EUR 1EUR/hour 1,5EUR/hour 1EUR/hour 1,5EUR/hour 1EUR/5min 5EUR/40 min 2EUR/hour 2EUR/hour

Expenses
a. Wages 1.Gen Manager/Pr Manager/ Financial Manager Base salary= 2000ron Income before tax= 2000ron Contributions to social funds (9.5% from the income before tax)=190ron Contributions to health funds(6.5%from the income before tax)=130ron Contributions to unemployment fund(1%from base salary)=20ron Net income=Income before tax- Contributions= 2000 (190+130+20)=1660 Personal Deduction=250ron Net salary= Income before tax Salary tax( 16% from(income before taxDP)=1660- (16%1410)=1436.4 2.Fitness/Aerobics Coaches Base salary= 1200ron Income before tax= 1200ron

Contributions to social funds (9.5% from the income before tax)=114ron Contributions to health funds(6.5%from the income before tax)=78ron Contributions to unemployment fund(1%from base salary)=12ron Net income=Income before tax- Contributions= 996 Personal Deduction=250ron Net salary= Income before tax Salary tax( 16% from(income before taxDP)=996- (16%746)=876.64 3. Medical Assistant/Cashier Base salary= 600ron Income before tax= 600ron Contributions to social funds (9.5% from the income before tax)=57ron Contributions to health funds(6.5%from the income before tax)=39ron Contributions to unemployment fund(1%from base salary)=6ron Net income=Income before tax- Contributions= 498 Personal Deduction=250ron Net salary= Income before tax Salary tax( 16% from(income before taxDP)=498- (16%248)=458.32 4. Room Cleaner Base salary= 450ron Income before tax= 450ron Contributions to social funds (9.5% from the income before tax)=42.75ron Contributions to health funds(6.5%from the income before tax)=29.25ron Contributions to unemployment fund(1%from base salary)=4.5ron Net income=Income before tax- Contributions= 373.5 Personal Deduction=250ron Net salary= Income before tax Salary tax( 16% from(income before taxDP)= 353.74 The society contributions to a) Social funds ( 22%income before tax)=((22%2000)*3 + (22%1200)*2 + (22%600)*2 + 22%450)= 2111 b) Health funds (7%income before tax)= 703.5 c) Unemployment fund ( 3%income before tax)=241.5 d) Risk fund(0.546%income before tax)=6.55 e) Other ( 0.75%income before tax)=75.37

TOTAL WAGES=2043.73EURO TOTAL CONTRIBUTIONS=1396.65EURO b. Utilities 1. SAUNA Utility = (4.5Kwh*2700lei/h)*(15h*30h/day)=161.26euro/month 2. JACUZZI Utility=(0.25kwh*2700)*(15h*30h/day)= 62.02euro/month 3. SOLARIUM Utility=769.10euro/month 4. Other=41.66euro/month 5. Water=41.66euro/month 6. Telephone and other=41.66euro/month c. Depreciation 1. Building Useful life = 60 years Method of depreciation = Straight Line Method Residual life= 0 D1=Cost/Useful life=366.66euro 2. Fitness Equipment Useful life = 3 years Method of depreciation = Straight Line Method Residual life= 0 D1=Cost/Useful life=1981.98euro 2. Sauna/Spa/Solarium/furniture Useful life = 5 years Method of depreciation = Straight Line Method Residual life= 0 D1 spa=Cost/Useful life=3640euro D1 sauna=Cost/Useful life=3100euro D1 solarium=Cost/Useful life=560euro D1 furniture=Cost/Useful life=122euro TOTAL UTILITIES = 13408.56 TOTAL DEPRECIATION = 9770.64

d. R&D Expenses= 18000eur

Item 1 2 3 4 5 EXPENSES Specification Amount Wages 2043.73 Contributions 1396.65 Utilities 13408.56 Depreciation 9770.64 R&D 18000 44619.58

REVENUES 1. From fitness a. from 9am to 3pm No of hours=6 Price/h=1eur No of machines=21 Maximum revenue=126 euro Estimated revenue=63euro B. from 3 pm to 1 am No of hours=9 Price/h=1.5 euro No of machines=21 Maximum revenue=283.5 euro Estimated revenue=142 euro Total estimated revenue per year=73800 2. From aerobics b. from 9am to 3pm No of hours=3 Price/h=1eur No of persons=20 Estimated revenue=60euro B. from 3 pm to 1 am No of hours=4 Price/h=1.5 euro

No of persons=20 Estimated revenue=120 euro Total estimated revenue per year=64800 3. From sauna No of hours=15 Price/h=2eur No of persons=5 Maximum revenue=150 euro Estimated revenue=75euro Total estimated revenue per year=27000euro 4. From spa No of hours=15 Price/h=2eur No of persons=5 No of spa=2 Maximum revenue=360 euro Estimated revenue=180euro Total estimated revenue per year=64800euro 5. From massage No of hours=8 Price/h=7.5eur Maximum revenue=60 euro Estimated revenue=30euro Total estimated revenue per year=10800euro 6. From solarium No of hours=8 Price/h=12 euro No. of machines=2 Maximum revenue=192 euro Estimated revenue=91euro Total estimated revenue per year=34560euro 7. From drinks Total estimated revenue per year=2160euro

8. From membership card Total estimated revenue per year=44400euro

Item 1 2 3 4 5 6 7 8

REVENUES Specification Estimated Fitness 73800 Aerobic 64800 Sauna 27000 Spa 64800 Massage 10800 Solar 34560 Drinks 2160 Cards 44400 322320

INCOME STATEMENT REVENUES Less Expenses Wages Contributions Utilities Depreciation RD Income before tax Tax Net income 322320 2043.73 1396.65 13408.56 9770.64 18000 277700.42 4432.06 233268.35

STATEMENT OF RETAINED EARNINGS Retained earnings at beginning Additional net income Deductible dividends Retained earnings at the end of the year 0 233268.35 125000 108268.35

FINAL BALANCE

ASSETS Current Assets Cash Inventory PLANT,PROPERTY & EQUIPMENT Building at cost Less Acc.Depr. Net building Equipment at cost Less Acc.Depr. NET PLANT,PROPERTY & EQUIPMENT TOTAL ASSETS 220000 366.66

359152.59 0

43044.94 9403.98 253285.3 612437.89

LIABILITIES&SHAREHOLDER'S EQUITY Current Liabilities Accounts Payable Taxes payable Accrued expenses Dividends payable TOTAL CURRENT LIABILITIES SHAREHOLDRES EQUITY Paid in capital Retained Earnings TOTAL SHAREHOLDERS EQUITY TOTAL LIABILITIES & SHAREHOLDERS EQUITY 300000 108268.35 408268.35 612437.89

31408.58 45717.27 2043.73 125000 204169.54

EVALUATING THE INVESTMENT 1.PAYBACK PERIOD PAYBACK PERIOD= INITIAL INVESTMENT COST/ NET PROFIT + DEPRECIATION= 270255.94/ 233268.35 + 9770.64= 1.11 2.AVERAGE RATE OF RETURN AVERAGE RATE OF RETURN =EXPECTED AVERAGE ANNUAL INCOME/INVESTMENT*1/2=200000/150000= 2 3. PROFITABILITY INDEX PROFITABILITY INDEX = PRESENT VALUE OF THE EXPECTED CASH FLOW/INVESTMENT COST= 324258/270255.94= 1.19