cut clower farm ( gladiolus, marigold, statice and chrysanthemum)

Pre-Feasibility Study

(Cut Flower Farm) (Gladiolus, Marigold, Statice and Chrysanthemum)

Small and Medium Enterprises Development Authority

Ministry of Industries & Production Government of Pakistan

www.smeda.org.pk

HEAD OFFICE 4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road,

Lahore Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7

[email protected]

REGIONAL OFFICE Punjab

REGIONAL OFFICE Sindh

REGIONAL OFFICE Khyber Pakhtunkhwa

REGIONAL OFFICE Balochistan

3rd Floor, Building No. 3, Aiwan-e-Iqbal Complex,

Egerton Road Lahore, Tel: (042) 111-111-456 Fax: (042) 36304926-7

[email protected]

5TH Floor, Bahria Complex II, M.T. Khan Road,

Karachi. Tel: (021) 111-111-456

Fax: (021) 35610572 [email protected]

Ground Floor State Life Building

The Mall, Peshawar. Tel: (091) 111-111-456


Bungalow No. 15-A Chaman Housing Scheme

Airport Road, Quetta. Tel: (081) 2831623, 2831702


Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost

December, 2013

Pre-feasibility Study Cut flower Farm

Table of Content

1 Disclaimer ......................................................................................................... 2

2 Purpose of the document ............................................................................ 3

3 Introduction to SMEDA ................................................................................. 3

4 Introduction to Scheme ................................................................................ 3

5 Executive Summary ....................................................................................... 4

6 Brief Description of the project .................................................................. 4

7 Critical Factors ................................................................................................ 5

8 Installed and Operational Capacity ........................................................... 5

9 Geographic Potential for Investment ........................................................ 6

10 Potential Target Markets / Cities ................................................................ 6

11 Process Flow: .................................................................................................. 6

12 Project Cost Summary .................................................................................. 6

12.1 Project Economics ..................................................................................................... 7 12.2 Project Financing ....................................................................................................... 8 12.3 Project Cost ................................................................................................................ 8 12.4 Space Requirement ................................................................................................... 8 12.5 Machinery and Equipment ........................................................................................ 9 12.6 Furniture ...................................................................................................................... 9 12.7 Raw Material Requirement ....................................................................................... 9 12.8 Human Resource Requirement ............................................................................... 9 12.9 Revenue Generation ............................................................................................... 10 12.10 Other Costs ............................................................................................................... 10 13 Contacts - Suppliers, experts/consultants, Dev. Institutions .......... 11

14 Annexure ........................................................................................................ 11

14.1 Income Statement ....................................................................................................... 11 14.2 Project Balance Sheet ................................................................................................. 12 14.3 Cash Flow Statement .............................................................................................. 13 14.4 Useful Project Management Tips .......................................................................... 14 14.5 Useful Links .............................................................................................................. 14 15 Key Assumptions ......................................................................................... 16

Pre-feasibility Study Cut Flower Farm

11 DDIISSCCLLAAIIMMEERR

This information memorandum is to introduce the subject matter and provide a general idea and information on the subject. Although, the material included in this document is based on data / information gathered from various reliable sources; however, it is based upon certain assumptions which may differ from case to case. The information has been provided on “as is where is basis” without any warranties or assertions as to the correctness or soundness thereof. Although, due care and diligence has been taken to compile this document, the contained information may vary due to any change in any of the concerned factors, and the actual results may differ substantially from the presented information. SMEDA, its employees or agents do not assume any liability for any financial or other loss resulting from this memorandum in consequence of undertaking this activity. The contained information does not preclude any further professional advice. The prospective user of this memorandum is encouraged to carry out additional diligence and gather any information which is necessary for making an informed decision, including taking professional advice from a qualified consultant / technical expert before taking any decision to act upon the information.

For more information on services offered by SMEDA, please contact our website: www.smeda.org.pk

SMEDA Services / Information related to PM’s Youth Business Loan are FREE OF COST - 2

http://www.smeda.org.pk/


22 PPUURRPPOOSSEE OOFF TTHHEE DDOOCCUUMMEENNTT

The objective of the pre-feasibility study is primarily to facilitate potential entrepreneurs in project identification for investment. The project pre-feasibility may form the basis of an important investment decision and in order to serve this objective, the document / study covers various aspects of project concept development, start-up, production, marketing, finance and business management.

The purpose of this document is to facilitate potential investors in Cut Flower Farm by providing them with a general understanding of the business with the intention of supporting potential investors in crucial investment decisions.

The pre-feasibility reports builds upon best practices developed by enterprises through trial and error and industrial norms that provide practical guidance on various aspects of starting and managing a successful business.

Apart from carefully studying the whole document one must consider critical aspects provided later on, which form basis of any investment decision.

33 IINNTTRROODDUUCCTTIIOONN TTOO SSMMEEDDAA

The Small and Medium Enterprises Development Authority (SMEDA) was established in October 1998 with an objective to provide fresh impetus to the economy through development of Small and Medium Enterprises (SMEs).

With a mission "to assist in employment generation and value addition to the national income, through development of the SME sector, by helping increase the number, scale and competitiveness of SMEs", SMEDA has carried out ‘sectoral research’ to identify policy, access to finance, business development services, strategic initiatives and institutional collaboration and networking initiatives.

Preparation and dissemination of pre-feasibility studies in key areas of investment has been a hallmark of SME facilitation by SMEDA.

Concurrent to the pre-feasibility studies, a broad spectrum of business development services is also offered to the SMEs by SMEDA. These services include identification of experts and consultants and delivery of need based capacity building programs of different types in addition to business guidance through help desk services.

44 IINNTTRROODDUUCCTTIIOONN TTOO SSCCHHEEMMEE

‘Prime Minister’s Youth Business Loan’ program, for young entrepreneurs, with an allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide subsidised financing at 8% mark-up per annum for one hundred thousand (100,000)



beneficiaries, through designated financial institutions, initially through the National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL).

Loans from Rs. 0.1 million to Rs. 2.0 million with tenure up to 8 years inclusive of 1 year grace period, and a debt: equity of 90: 10 will be disbursed to SME beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally Administered Tribal Areas (FATA).

55 EEXXEECCUUTTIIVVEE SSUUMMMMAARRYY

Cut Flower Farm is proposed to be located at favorable flower growing areas in Balochistan including District Quetta, Kalat, Ziarat, Pishin/Khanozai, Killa Saifullah and any other comparable temperate areas.

The varieties included are Gladiolus, Mari Gold, Statice and Chrysanthemum.

Production Capacity of Gladiolus, Statice, Chrysanthemum and Marigold is 150,000 Kg, having first year production capacity of 60,000 Kg at initial utilization of 40% in year -01.

Total Cost Estimate is Rs. 1.88 Million with fixed investment of Rs. 1.53 Million and working capital of Rs. 0.35 Million.

Given the cost assumptions IRR and payback are 71% and 2.04 years, respectively.

The most critical considerations or factors for success of the project are:

• One of the major competitive advantages of Balochistan is the tenure of production. In Balochistan, flower plants can be produced for 8 months while in other provinces of Pakistan, such period is for 4 months only.

• Balochistan’s dry and cold climate offers better opportunities for growth of cut flower. Quetta, Mastung, Kalat, Pishin, Killa Saifullah and Ziarat are some of the areas recommended for starting such a farm in Balochistan.

66 BBRRIIEEFF DDEESSCCRRIIPPTTIIOONN OOFF TTHHEE PPRROOJJEECCTT

Following have been addressed as per pre-feasibility study for a five acre farm:

• Location: The Cut Flower Farm is proposed to be located at favourable flower growing areas in Balochistan including District Quetta, Kalat, Ziarat, Pishin / Khanozai, Killa Saifullah and any other temperate area.

• Product: The farm would produce cut flowers to fulfil the local demand of cut flower varieties including Gladiolus, Mari Gold, Statice and Chrysanthemum.

• Target Market: The target market for the Cut Flower Farm is local. Major buyers of cut flower are in larger cities such as Karachi, Peshawar, Lahore and



Islamabad and domestic market is Quetta, whereas, other potential areas of Balochistan can also be targeted based upon demand.

• Employment Generation: The proposed project will provide direct employment to 06 people. Financial analysis shows the unit shall be profitable from the very first year of operation.

77 CCRRIITTIICCAALL FFAACCTTOORRSS

• Establishment of the farms in areas where basic infrastructure including water and electricity are available.

• Farming should be done on scientific grounds, taking care of input requirements and pest management techniques.

• Well-trained / experienced staff will add to the efficiency of the farm.

• Producer should be aware of ever-changing fashion in terms of flower color and varieties.

• Special attention towards healthy and certified seeds / bulbs, land preparation, sowing pattern, water management, fertilizer application and marketing is required.

88 IINNSSTTAALLLLEEDD AANNDD OOPPEERRAATTIIOONNAALL CCAAPPAACCIITTYY

Total farm area is assumed to be five (05) Acres. Cultivation of Gladiolus, Statice, Chrysanthemum and Marigold will be distributed on the farm area respectively.

TTaabbllee 11:: PPrroodduuccttiioonn aatt 4400%% CCaappaacciittyy Production Capacity (Units) 150,000 Initial capacity utilization 40% Production per year 60,000 Production lost to Petals 12,000 Production quantity sold (Flowers) 48,000 Production quantity sold (Flowers in kgs. for petals) 30

The proposed project is for farming of Gladiolus, Statice, Chrysanthemum and Marigold varieties and will generate revenues from sale of these varieties. Additional revenues will be generated from the sale of Gladiolus Corms which will start from the third year.



TTaabbllee 22:: PPrroodduucctt MMiixx Product Production Capacity Per

Year @ 100 % Sales Price (Rs.)

Gladiolus, Statice, Chrysanthemum and Mari Gold

150,000 kg 20 – 35/kg

99 GGEEOOGGRRAAPPHHIICC PPOOTTEENNTTIIAALL FFOORR IINNVVEESSTTMMEENNTT

Pakistan is a country conducive to small scale farming where floriculture provides an opportunity for enhancing income from available land resources.

Floriculture is an upcoming opportunity in Balochistan since it requires less water and provides more per acre income than traditional crops. It can play a major role in the economy of Balochistan and can become an important sector such as Horticulture, Livestock & Fisheries.

Favorable growing areas in Balochistan include Dist. Quetta, Kalat, Ziarat, Pishin/Khanozai, Killa Saifullah and any other temperate area.

One of the major competitive advantages of Balochistan is the tenure of production. In Balochistan, flower plants can be in produced for 8 months while in other provinces of Pakistan, such period is for 4 months only.

1100 PPOOTTEENNTTIIAALL TTAARRGGEETT MMAARRKKEETTSS // CCIITTIIEESS

Major buyers of cut flowers are in large cities such as Karachi, Peshawar, Lahore, and Islamabad. Main local target market is Quetta, whereas, other potential areas of Balochistan can also be targeted based on demand.

1111 PPRROOCCEESSSS FFLLOOWW::

The Flower process will be as under:

1122 PPRROOJJEECCTT CCOOSSTT SSUUMMMMAARRYY

A detailed financial model has been developed to analyze the commercial viability of “Cut Flower Farm - Gladiolus, Mari Gold, Statice and Chrysanthemum” under the

Land Leveling

Sowing Watering

Early Stage Plants

Visual Inspection

Plucking

Packing & Distribution



Prime Minister’s Youth Business Loan. Various cost and revenue related assumptions along with results of the analysis are outlined in this section.

The projected Income Statement, Cash Flow Statement and Balance Sheet are attached as appendix.

1122..11 PPrroojjeecctt EEccoonnoommiiccss

The total project investment is Rs. 1.88 Million which includes Capital Cost of Rs. 1.53 Million and Working Capital of Rs. 0.35 Million.

All the figures in this financial model have been calculated for a total farm area assumed to be Five (05) Acres. Cultivation of the cut flowers is expected to yield 150,000 Gladiolus, Statice, Chrysanthemum and Marigold over a distributed area of 05 Acres, respectively.

Yield covered by Cut Flower Farm of Gladiolus, Statice, Chrysanthemum and Marigold in year one will be 60,000 at initial capacity of 40%.

The following table shows internal rates of return and payback period.

TTaabbllee 33 -- PPrroojjeecctt EEccoonnoommiiccss

Description Details

Internal Rate of Return (IRR) 71%

Payback Period (Yrs) 2.04

Net Present Value – NPV (Rs.) 4,196,607

Since floriculture sector in Pakistan is not highly developed there are great variations in the production and consumption cycle of cut flowers. The production cycle is especially dependent upon the natural environment and weather. Similarly, the consumption cycle is influenced by marriages, religious (URS) and political occasions. Due to these reasons it is difficult to forecast the actual requirement for cut flowers. Similarly, due to the perishable nature of the product, appropriate infrastructure and transportation also plays an important role in marketing and profitability of cut flowers.

Focus on healthy and certified seeds/ bulbs, land preparation, sowing pattern, water management, fertilizer application, hiring of skilled personal, pest management, ever-changing fashion in terms of flower color and varieties, along with marketing is required to avoid project losses.



1122..22 PPrroojjeecctt FFiinnaanncciinngg

Following table provides details of the equity required and variables related to bank loan:

TTaabbllee 44:: PPrroojjeecctt FFiinnaanncciinngg

Description Details

Total Equity (10%) Rs.187,911

Bank Loan (90%) Rs.1,691,195

Annual Markup to the Borrower 8%

Tenure of the Loan (Years) 8

Grace Period (Years) 1

1122..33 PPrroojjeecctt CCoosstt

Following requirements have been identified for operations of the proposed business.

TTaabbllee 55:: CCaappiittaall IInnvveessttmmeenntt ffoorr tthhee PPrroojjeecctt

Capital Investment Rs. Land On lease Machinery & equipment 20,000 Land tillage and saplings 1,063,000 Furniture & fixtures 20,000 Pre-operating costs 430,514 Total Capital Costs 1,533,514 Working Capital Rs. Raw material inventory 20,592 Upfront land lease rent 125,000 Cash 200,000 Total Working Capital 345,592 Total Investment 1,879,106

1122..44 SSppaaccee RReeqquuiirreemmeenntt

Total required land for this project is five (05) acres, most of which will be used for farming. Land would be leased for the project, however, investors with own land can generate more income from the project.



1122..55 MMaacchhiinneerryy aanndd EEqquuiippmmeenntt

Following table provides a list of equipment required for planting, managing and harvesting the farm.

TTaabbllee 77:: LLiisstt ooff MMaacchhiinneerryy && EEqquuiippmmeenntt

Items Total Cost Rs Shovels, pickaxes, Cutters , Cart & Misc tools etc

20,000

Total 20,000

1122..66 FFuurrnniittuurree

Since this is a field oriented project, therefore, no office equipment will be required. However, there is a provision for purchase of rudimentary furniture.

TTaabbllee 88:: FFuurrnniittuurree CCoosstt

Description Total Cost (Rs.)

Furniture 20,000 Total 20,000

1122..77 RRaaww MMaatteerriiaall RReeqquuiirreemmeenntt

Cost is determined for different cut flower varieties by adding their seed / bulb cost with labour, pesticides, fertilizer etc.

TTaabbllee 99:: CCoosstt ooff MMaatteerriiaall

Material Cost (Rs.) Unit Total Annual Cost (Rs.)

Pesticide Sprays 20,000 5 100,000

Fertilizers 25,000 5 125,000 Water 25,000 5 125,000 Weeding 25,000 5 125,000 Total 475,000

1122..88 HHuummaann RReessoouurrccee RReeqquuiirreemmeenntt

TTaabbllee 1100:: HHuummaann RReessoouurrccee RReeqquuiirreemmeenntt

Description No. of Employees Salary/month

Supervisor / Marketing Officer

1 20,000

Farm Worker (Mali) Full Time

5 50,000



Total Staff 6 70,000 Supervisor / Marketing Officer will be responsible for overseeing on-farm activities and marketing / sales of the cut flower.

Semi-skilled workers are required to look after the plants, watering, fertilizer application, de-weeding, insecticide use, planting and harvesting at the farm.

1122..99 RReevveennuuee GGeenneerraattiioonn

TTaabbllee 1111:: RReevveennuuee AAssssuummppttiioonnss

Product Unit Sales Price

(Rs./Unit)

First Year Sales Revenue (Rs)

Gladiolus, Statice, Chrysanthemum and Marigold

48,000 35 1,680,000

Petals (Kg.) 30 20 600 Total Sales Revenue 1,680,600

Price range for cut flower is Rs. 20 – 35 per kg. Sales growth rate is assumed to increase at 10% per annum. Increase in cost of goods sold is assumed to be 12%, as it is anticipated that some of the bulbs will be available for re-use within two years. Initial capacity of project is assumed at 40% of total available capacity and growth in capacity utilization is projected at 25% per annum.

1122..1100 OOtthheerr CCoossttss

TTaabbllee 1122:: MMiisscc EExxppeennsseess

Operating Expense / annum (Rs.) Administration Expense / annum 240,000 Land lease/rental expense / annum 125,000 Travelling expense 50,418 Communication expense 24,000 Depreciation expense 110,300 Amortization expense 43,051

Subtotal 592,769



1133 CCOONNTTAACCTTSS -- SSUUPPPPLLIIEERRSS,, EEXXPPEERRTTSS//CCOONNSSUULLTTAANNTTSS,, DDEEVV.. IINNSSTTIITTUUTTIIOONNSS

Mr. Fahim Ahmed Malghani Horticulturist/Cold Chain Specialist Vegetable Botanist Agriculture Research Institute Agriculture & Cooperatives Department, Government of Balochistan Quetta Cell: 0334 4058071


1144 AANNNNEEXXUURREE

1144..11 IInnccoommee SSttaatteemmeenntt

Statement Summaries SMEDAIncome Statement

Rs. in actualsYear 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Revenue 1,680,600 3,004,073 3,812,861 4,194,147 4,613,562 5,074,918 5,582,410 6,140,651 6,754,716 7,430,188 Cost of goods sold 763,100 1,083,040 1,167,016 1,256,248 1,355,101 1,464,702 1,586,311 1,721,337 1,871,357 2,038,137

Gross Profit 917,500 1,921,033 2,645,845 2,937,900 3,258,461 3,610,216 3,996,099 4,419,314 4,883,359 5,392,051

General administration & selling expensesAdministration expense 240,000 244,800 249,696 254,690 259,784 264,979 270,279 275,685 281,198 286,822 Rental expense 125,000 137,500 151,250 166,375 183,013 201,314 221,445 243,590 267,949 294,743 Utilities expense - - - - - - - - - - Travelling & Comm. expense (phone, fax, etc.) 74,418 114,602 139,355 151,293 164,385 178,745 194,500 211,788 230,761 251,588 Office vehicles running expense - - - - - - - - - - Office expenses (stationary, etc.) - - - - - - - - - - Promotional expense - - - - - - - - - - Insurance expense - - - - - - - - - - Professional fees (legal, audit, etc.) - - - - - - - - - - Depreciation expense 110,300 110,300 110,300 110,300 110,300 110,300 110,300 110,300 110,300 110,300 Amortization expense 43,051 43,051 43,051 43,051 43,051 43,051 43,051 43,051 43,051 43,051 Property tax expense - - - - - - - - - - Miscellaneous expense - - - - - - - - - -

Subtotal 592,769 650,254 693,653 725,710 760,533 798,390 839,576 884,414 933,260 986,505 Operating Income 324,731 1,270,779 1,952,192 2,212,190 2,497,928 2,811,826 3,156,523 3,534,901 3,950,099 4,405,546

Other income - - - - - - - - - - Gain / (loss) on sale of assets - - - - - - - - - - Earnings Before Interest & Taxes 324,731 1,270,779 1,952,192 2,212,190 2,497,928 2,811,826 3,156,523 3,534,901 3,950,099 4,405,546

Interest expense 140,368 128,509 112,921 96,040 77,757 57,957 36,514 13,291 - - Earnings Before Tax 184,362 1,142,270 1,839,271 2,116,150 2,420,171 2,753,869 3,120,010 3,521,610 3,950,099 4,405,546

Tax 11,327 148,840 253,390 294,922 340,525 390,580 445,501 505,741 570,015 638,332 NET PROFIT/(LOSS) AFTER TAX 173,035 993,430 1,585,881 1,821,228 2,079,646 2,363,289 2,674,508 3,015,869 3,380,085 3,767,214

Balance brought forward 173,035 1,166,465 2,752,346 4,573,574 6,653,220 9,016,509 11,691,017 14,706,886 18,086,971 Total profit available for appropriation 173,035 1,166,465 2,752,346 4,573,574 6,653,220 9,016,509 11,691,017 14,706,886 18,086,971 21,854,185 Dividend - - - - - - - - - - Balance carried forward 173,035 1,166,465 2,752,346 4,573,574 6,653,220 9,016,509 11,691,017 14,706,886 18,086,971 21,854,185


1144..22 PPrroojjeecctt BBaallaannccee SShheeeett

Statement Summaries SMEDABalance Sheet

Rs. in actualsYear 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

AssetsCurrent assets

Cash & Bank 200,000 480,929 1,544,354 3,256,238 5,224,427 7,469,604 10,015,072 12,889,647 16,124,686 20,070,823 25,093,541 Accounts receivable - 23,022 32,087 46,691 54,843 60,327 66,359 72,995 80,295 88,324 97,157 Finished goods inventory - - - - - - - - - - - Equipment spare part inventory - - - - - - - - - - - Raw material inventory 20,592 50,769 62,926 77,525 95,511 117,670 144,969 178,602 220,038 271,087 - Pre-paid annual land lease 125,000 137,500 151,250 166,375 183,013 201,314 221,445 243,590 267,949 294,743 - Pre-paid building rent - - - - - - - - - - - Pre-paid lease interest - - - - - - - - - - - Pre-paid insurance - - - - - - - - - - -

Total Current Assets 345,592 692,219 1,790,618 3,546,830 5,557,793 7,848,915 10,447,846 13,384,834 16,692,968 20,724,978 25,190,698

Fixed assetsLand - - - - - - - - - - - Building/Infrastructure - - - - - - - - - - - Saplings & Land Tillage 1,063,000 956,700 850,400 744,100 637,800 531,500 425,200 318,900 212,600 106,300 -

Machinary & Equipment 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - Furniture & fixtures 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - Office vehicles - - - - - - - - - - - Office equipment - - - - - - - - - - -

Total Fixed Assets 1,103,000 992,700 882,400 772,100 661,800 551,500 441,200 330,900 220,600 110,300 -

Intangible assetsPre-operation costs 430,514 387,463 344,411 301,360 258,309 215,257 172,206 129,154 86,103 43,051 0 Legal, licensing, & training costs - - - - - - - - - - -

Total Intangible Assets 430,514 387,463 344,411 301,360 258,309 215,257 172,206 129,154 86,103 43,051 0 TOTAL ASSETS 1,879,106 2,072,382 3,017,429 4,620,290 6,477,902 8,615,672 11,061,251 13,844,888 16,999,670 20,878,329 25,190,698

Liabilities & Shareholders' EquityCurrent liabilities

Accounts payable - 12,241 25,347 28,832 32,649 37,007 41,989 47,695 54,240 61,762 56,696 Export re-finance facility - - - - - - - - - - - Short term debt - - - - - - - - - - - Other liabilities - - - - - - - - - - -

Total Current Liabilities - 12,241 25,347 28,832 32,649 37,007 41,989 47,695 54,240 61,762 56,696

Other liabilitiesLease payable - - - - - - - - - - - Deferred tax - 8,000 134,315 351,200 604,039 896,361 1,232,024 1,615,245 2,050,633 2,541,686 3,091,907 Long term debt 1,691,195 1,691,195 1,503,392 1,300,001 1,079,729 841,174 582,819 303,021 - - -

Total Long Term Liabilities 1,691,195 1,699,195 1,637,707 1,651,201 1,683,768 1,737,535 1,814,843 1,918,266 2,050,633 2,541,686 3,091,907

Shareholders' equityPaid-up capital 187,911 187,911 187,911 187,911 187,911 187,911 187,911 187,911 187,911 187,911 187,911 Retained earnings - 173,035 1,166,465 2,752,346 4,573,574 6,653,220 9,016,509 11,691,017 14,706,886 18,086,971 21,854,185

Total Equity 187,911 360,946 1,354,376 2,940,257 4,761,485 6,841,131 9,204,419 11,878,928 14,894,796 18,274,881 22,042,095 TOTAL CAPITAL AND LIABILITI 1,879,106 2,072,382 3,017,429 4,620,290 6,477,902 8,615,672 11,061,251 13,844,888 16,999,670 20,878,329 25,190,698

- - - - - - - - - - -


1144..33 CCaasshh FFllooww SSttaatteemmeenntt - - - - - - - - - - -

Statement Summaries SMEDACash Flow Statement

Rs. in actualsYear 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Operating activitiesNet profit - 173,035 993,430 1,585,881 1,821,228 2,079,646 2,363,289 2,674,508 3,015,869 3,380,085 3,767,214 Add: depreciation expense - 110,300 110,300 110,300 110,300 110,300 110,300 110,300 110,300 110,300 110,300 amortization expense - 43,051 43,051 43,051 43,051 43,051 43,051 43,051 43,051 43,051 43,051 Deferred income tax - 8,000 126,315 216,885 252,839 292,322 335,663 383,221 435,389 491,053 550,221 Accounts receivable - (23,022) (9,065) (14,605) (8,151) (5,484) (6,033) (6,636) (7,300) (8,029) (8,832) Finished good inventory - - - - - - - - - - - Equipment inventory - - - - - - - - - - - Raw material inventory (20,592) (30,177) (12,158) (14,599) (17,986) (22,159) (27,299) (33,633) (41,436) (51,049) 271,087 Pre-paid building rent - - - - - - - - - - - Pre-paid lease interest - - - - - - - - - - - Advance insurance premium - - - - - - - - - - - Accounts payable - 12,241 13,105 3,486 3,817 4,358 4,982 5,706 6,545 7,522 (5,066) Other liabilities - - - - - - - - - - -

Cash provided by operations (20,592) 293,429 1,264,979 1,930,400 2,205,098 2,502,034 2,823,953 3,176,518 3,562,419 3,972,932 4,727,975

Financing activitiesChange in long term debt 1,691,195 - (187,803) (203,391) (220,272) (238,555) (258,355) (279,798) (303,021) - - Change in short term debt - - - - - - - - - - - Change in export re-finance facility - - - - - - - - - - - Add: land lease expense - 125,000 137,500 151,250 166,375 183,013 201,314 221,445 243,590 267,949 294,743 Land lease payment (125,000) (137,500) (151,250) (166,375) (183,013) (201,314) (221,445) (243,590) (267,949) (294,743) - Lease principal repayment - - - - - - - - - - - Issuance of shares 187,911 - - - - - - - - - - Purchase of (treasury) shares - - - - - - - - - - -

Cash provided by / (used for) financ 1,754,106 (12,500) (201,553) (218,516) (236,910) (256,856) (278,486) (301,943) (327,380) (26,795) 294,743

Investing activitiesCapital expenditure (1,533,514) - - - - - - - - - - Acquisitions - - - - - - - - - - -

Cash (used for) / provided by invest (1,533,514) - - - - - - - - - -

NET CASH 200,000 280,929 1,063,426 1,711,884 1,968,189 2,245,178 2,545,467 2,874,575 3,235,039 3,946,137 5,022,718

Cash balance brought forward 200,000 480,929 1,544,354 3,256,238 5,224,427 7,469,604 10,015,072 12,889,647 16,124,686 20,070,823 Cash available for appropriation 200,000 480,929 1,544,354 3,256,238 5,224,427 7,469,604 10,015,072 12,889,647 16,124,686 20,070,823 25,093,541 Dividend - - - - - - - - - - - Cash carried forward 200,000 480,929 1,544,354 3,256,238 5,224,427 7,469,604 10,015,072 12,889,647 16,124,686 20,070,823 25,093,541


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Technology

• Quality Assurance Equipment & Standards: Products quality standards/check need to be defined.

Marketing

• Product Development & Packaging: Experts may be engaged for product / service and packaging design & development.

• Ads & Point of Sale Promotion: Business promotion and dissemination through banners and launch events is highly recommended. Product brochures from good quality service providers can be developed.

• Sales & Distribution Network: Expert's advice and distribution agreements are required.

• Price - Bulk Discounts, Cost plus Introductory Discounts: During the introductory phase price may be lower and used as a promotional tool. Product cost estimates should be carefully documented before price setting. Government controlled prices shall be displayed, where applicable.

Human Resources

• List of Human Resource (As per Section 12.8)

• Adequacy & Competencies: Recruitment of skilled and experienced staff should be considered an investment.

• Performance Based Remuneration: Performance based remuneration should be offered to incentivize workers.

• Training & Skill Development: Training and skill development of employees and exposure to best practices should be undertaken. Least cost options for Training and Skill Development (T&D) may be linked with compensation benefits and awards.

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• Prime Minister’s Office

www.pmo.gov.pk

• Small & Medium Enterprises Development Authority (SMEDA)

www.smeda.org.pk

• National Bank of Pakistan (NBP)


www.nbp.com.pk

• First Women Bank Limited (FWBL)

www.fwbl.com.pk

• Government of Pakistan

www.pakistan.gov.pk

• Ministry of Industries & Production

www.moip.gov.pk

• Ministry of Education, Training & Standards in Higher Education

http://moptt.gov.pk

• Government of Punjab

www.punjab.gov.pk

• Government of Sindh

www.sindh.gov.pk

• Government of Khyber Pakhtunkhwa

www.khyberpakhtunkhwa.gov.pk

• Government of Balochistan

www.balochistan.gov.pk

• Government of Gilgit Baltistan

www.gilgitbaltistan.gov.pk

• Government of Azad Jammu & Kashmir

www.ajk.gov.pk

• Trade Development Authority of Pakistan (TDAP)

www.tdap.gov.pk

• Securities & Exchange Commission of Pakistan (SECP)

www.secp.gov.pk

• Federation of Pakistan Chambers of Commerce and Industry (FPCCI)

www.fpcci.com.pk

• State Bank of Pakistan (SBP)

www.sbp.org.pk


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Production Related Assumptions

Production Capacity (Units) 150,000 Initial capacity utilization 40% Production per year 60,000 Production lost to Patel (@ 20%) 12,000 Production quantity sold (Flowers) 48,000 Production quantity sold (Flowers in kgs. for petals) 30

Revenue Assumption

Production Capacity 50,000 3 150,000 Sale price per Flower in year 1 Rs. 35 Sale price per Kg. petals Rs. 20 Sale price growth rate 10% Production capacity utilization - Year 1 40% Production capacity utilization growth rate 25% Maximum capacity utilization 75% Financial Assumptions

Description 90 % Equity 10 % Debt 90% Debt Tenure (Years) 8 Interest Rate / annum 8% Grace Period (Years) 1

Depreciation Rates

Furniture 10 % Machinery and Equipment 10 %

Cash Flow Assumptions

Accounts Receivables Cycle (days) 5

Accounts Payable Cycle (days) 15

Cash in Hand Rs. 200,000


Economy Related assumptions

Inflation rate 10 % Electricity growth rate 10 % Water price growth rate 2 % Wage growth rate 2 %


cut clower farm ( gladiolus, marigold, statice and chrysanthemum)

Documents