subcontract workshop

8/18/2019 Subcontract Workshop

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Pre-Feasibility Study

SUBCONTRACT WORKSHOP FACILITY

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) [email protected]

REGIONAL OFFICEPUNJAB

REGIONAL OFFICESINDH

REGIONAL OFFICE

KPK REGIONAL OFFICE

BALOCHISTAN

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

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

[email protected]

5TH

Floor, Bahria

Complex II, M.T. Khan Road,

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

Fax: (021) 5610572

[email protected]

Ground Floor

State Life Building

The Mall, Peshawar.Tel: (091) 9213046-47

Fax: (091) 286908

[email protected]

Bungalow No. 15-A

Chaman Housing Scheme

Airport Road, Quetta.Tel: (081) 831623, 831702

Fax: (081) 831922

[email protected]

June 2011


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Pre-Feasibility Study Subcontract Workshop Facility

1 EXECUTIVE SUMMARY ................................................................................ 5

2 INTRODUCTION TO SMEDA ........................................................................ 6

3 PURPOSE OF THE DOCUMENT................................................................... 6

4 PROJECT PROFILE......................................................................................... 7

4.1 PROJECT BRIEF................................................................................................ 74.2 OPPORTUNITY R ATIONALE.............................................................................. 7

4.3 PROPOSED BUSINESS LEGAL STATUS.............................................................. 8

4.4 PROJECT COST ................................................................................................ 84.5 PROPOSED CAPACITY...................................................................................... 8

4.6 PROPOSED PRODUCT MIX ............................................................................... 8

4.7 POSSIBLE OPERATIONS AT THE WORKSHOP..................................................... 84.8 PROCESSES INVOLVED MODULE WISE.............................................................. 9

5 KEY SUCCESS FACTORS............................................................................... 9

6 SWOT ANALYSIS ............................................................................................. 9

6.1 STRENGTHS..................................................................................................... 9

6.2 WEAKNESSES ................................................................................................ 10

6.3 OPPORTUNITIES............................................................................................. 106.4 THREATS ....................................................................................................... 10

7 INDUSTRY & MARKET ANALYSIS........................................................... 10

8 RAW MATERIAL............................................................................................ 10

8.1 R AW MATERIAL R EQUIREMENT.................................................................... 10

9 MACHINERY DETAILS ................................................................................ 11

10 OFFICE EQUIPMENT ................................................................................ 12

11 VEHICLES .................................................................................................... 13

12 MANPOWER REQUIREMENTS .............................................................. 13

12.1 NUMBER OF PEOPLE R EQUIRED ................................................................. 13

13 LAND & BUILDING .................................................................................... 13

13.1 LAND AND BUILDING R EQUIREMENT......................................................... 1313.2 SUITABLE LOCATION ................................................................................. 1413.3 I NFRASTRUCTURE R EQUIREMENT .............................................................. 14

14 PROJECT ECONOMICS ............................................................................ 14

15 FINANCIAL ANALYSIS ............................................................................. 16

15.1 PROJECT COST ........................................................................................... 16

PREF-10/June, 2011/ Rev 2

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15.2 PROJECTED I NCOME STATEMENT............................................................... 17

15.3 PROJECTED CASH FLOW STATEMENT ........................................................ 1815.4 PROJECTED BALANCE SHEET ..................................................................... 19

15.5 R EVENUE GENERATION TABLES ................................................................ 20

16 KEY ASSUMPTIONS .................................................................................. 23

17 ANNEXURE .................................................................................................. 24

17.1 MACHINERY SUPPLIERS............................................................................. 24

17.2 TAX DEDUCTION INCOME SLABS ................................................................ 25


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DISCLAIMER

The purpose and scope of this information memorandum is to introduce the subject

matter and provide a general idea and information on the said area. All the material

included in this document is based on data/information gathered from various

sources and is based on certain assumptions. 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 does not assume any liability for any

financial or other loss resulting from this memorandum in consequence of

undertaking this activity. Therefore, the content of this memorandum should not be

relied upon for making any decision, investment or otherwise. The prospective userof this memorandum is encouraged to carry out his/her own due diligence and gather

any information he/she considers necessary for making an informed decision.

The content of the information memorandum does not bind SMEDA in any legal or

other form.

DOCUMENT CONTROL

Document No. PREF-10

Revision 2

Prepared by SMEDA-Punjab

Approved by GM Punjab

Issue Date June, 2002

Revision Date June, 2011

Issued by Library Officer


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11

EEXXEECCUUTTIIVVEE SSUUMMMMAARRYY

This particular pre-feasibility involves setting up a ‘Subcontract Workshop’ in anyindustrial city of Pakistan. The workshop is assumed to cater to the automobile,

vehicle repairing, car engine rebuilding and other small workshop practices. The

machinery is proposed to be purchased in two phases of the project and the workers

are hired accordingly.

Sub contracting workshop comes in the segment of light engineering industry. The

development in light engineering industry is a continuous process. Most of the

subcontracting workshops are part of small and medium scale industry.

Subcontracting workshops work in support of various industries for repairing andmanufacturing of machinery and machinery parts. Most of the workshops are in

cities like Lahore, Gujranwala, Faisalabad, Karachi etc.

The total project cost for setting up this workshop is estimated at Rs. 3.551 million.

The project is financed through 50% debt and 50% equity. The project NPV isaround Rs. 0.862 million, with an IRR of 24% and payback period of 4.94 years. The

legal business status of this project is proposed as ‘Sole Proprietorship’.

The workshop is proposed to operate 8 hours everyday. The maximum jobs for the

project are assumed to be 2,880 per year. During the first year 25% capacity isassumed and for the second year 40% capacity is assumed. Second year onwards

there is a 10% annual increase in the number of jobs carried out. The number of jobs

completed depends on the total number of machinery and employees hired.


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22 IINNTTRROODDUUCCTTIIOONN TTOO SSMMEEDDAA

The Small and Medium Enterprises Development Authority (SMEDA) was

established with the objective to provide fresh impetus to the economy through the

launch of an aggressive SME support program.

Since its inception in October 1998, SMEDA adopted a sectoral SME developmentapproach. A few priority sectors were selected on the criterion of SME presence. In

depth research was conducted and comprehensive development plans were

formulated after identification of impediments and retardants. The all-encompassingsectoral development strategy involved recommending changes in the regulatory

environment by taking into consideration other important aspects including finance,

marketing, technology and human resource development.

SMEDA has so far successfully formulated strategies for industries such ashorticulture, including export of fruits and vegetables, marble and granite, gems and

jewellery, marine fisheries, leather and footwear, textiles, surgical instruments,

transport, dairy etc. Whereas the task of SME development at a broader scale stillrequires more coverage and enhanced reach in terms of SMEDA’s areas of

operation.

Along with the sectoral focus a broad spectrum of business development services is

also offered to the SMEs by SMEDA. These services include identification of viable business opportunities for potential SME investors. In order to facilitate these

investors, SMEDA provides business guidance through its help desk services as well

as development of project specific documents. These documents consist ofinformation required to make well-researched investment decisions. Pre-feasibility

studies and business plan development are some of the services provided to enhance

the capacity of individual SMEs to exploit viable business opportunities in a better

way.

This document is in the continuation of this effort to enable potential investors to

make well-informed investment decisions.

33 PPUURRPPOOSSEE OOFF TTHHEE DDOOCCUUMMEENNTT

The objective of this proposed Pre-feasibility is primarily to facilitate potential

entrepreneurs with investment information and provide an overview about the

"Subcontract Workshop Business". The project pre-feasibility may form the basis ofan important investment decision and in order to serve this objective, the

document/study covers various aspects of project concept development, start-up, andmarketing, finance and business management.

The purpose of this document is to facilitate potential investors by providing them amacro and micro view of the business with the hope that the information provided

herein will aid the potential investors in crucial investment decisions.

Our report is based on the information obtained by us from industry sources as well

as our discussions with businessmen. In the financial model, since


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forecast/projections relate to the future periods, actual results are likely to differ

because of the events and circumstances that do not occur as expected.

44

PPRROOJJEECCTT PPRROOFFIILLEE

44..11

PPrroo j jeecctt BBrriieef f

This particular pre-feasibility is about setting up a Subcontract Workshop facility,

which will cater to the automobile sector, providing services such as automobile,

vehicle repairing, car engine rebuilding and other small workshop practices. This pre-feasibility is suitable for a person who has a Mechanical Engineering

background. These engineers are recommended to have previous experience in a

workshop environment. This project can be started by having at least the machinesmentioned in the first module (Table 9-1). Later on, as the business builds up, four

more machines, as given in module-2, can be added in 4th

year of operations. This

means, capital investment will be carried out keeping in view the job orders coming

in. Marketing efforts, mainly including personal visits, are required to obtain joborders.

Subcontract workshops can act as a subcontracting/service oriented facility to

organizations working in any of the following sectors:

• Textile Sector

• Auto repair shops

• Auto part makers

• Cement Sector

• Cooking Oil Unit

• Food Industry

•

Sugar Industry

• Soft Drink Industry

• Flour Mills

• Rice Mills

44..22 OOppppoorrttuunniittyy RRaattiioonnaallee

The lack of sub-contracting and specialization is one of the major structural

weaknesses of the country's engineering industries. There are very few domestic

supporting industries. The supporting industries are responsible for producing andrepairing parts and components of machinery and equipment and for providing

industrial service. These industries contribute to reducing the import dependency,create employment, link large and medium sized companies through sub-contracting

arrangements etc. Mostly, expatriate engineers returning from the Gulf and MiddleEast demand such feasibility, because they have some savings to invest and want to

carry out business in a field in which they have knowledge and previous work

experience. A person with engineering background can easily manage a SubcontractWorkshop business.


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FFiigguurree 44--11 FFllooww CChhaarrtt f f oorr DDiif f f f eerreenntt PPrroocceesssseess

Riveting/Assembling

Drilling/Turning

Shaping /Milling

Die making

Welding/Grinding

Stamping

PrecisionGrinding

Painting Drying

44..88 PPrroocceesssseess iinnvvoollvveedd mmoodduullee wwiissee

Table 4-2 shows the processes that are involved in this subcontract workshop:

TTaabbllee 44--22 PPrroocceesssseess IInnvvoollvveedd

MODULE I MODULE II

a)

Shaping d)

Surface Grinding (Precision)Milling e) Die making

Turning f) Stamping

Drilling g) Cylindrical Grinding (Precision)

Riveting

b) Welding

Rough Grinding

c) Painting

Drying

55 KKEEYY SSUUCCCCEESSSS FFAACCTTOORRSS

1. The commercial viability of this venture depends upon the availability of skilled

labour having knowledge about engineering. The entrepreneur should have a

good knowledge of the field.2. The required standards have to be followed strictly.

3. Ensuring quality check at different stages of production.

4. Cost cutting methods and correct raw material has to be employed.5. To establish a brand name, aggressive marketing efforts such as regular sale

calls, are required. High volume orders will be the key to survival.

66

SSWWOOTT AANNAALLYYSSIISS

66..11 SSttrreennggtthhss

1. Availability of low cost human resource2. Easy availability of machinery

3. Large number of contacts in the industry.

9

4. High growth and demand in the market



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5. Entrepreneurs previous workshop experience and engineering background

66..22 WWeeaakknneesssseess

1. Time required to build up a reputation in the market

2. Longer payback period

3.

Delays in delivery time of orders4. Lack of skilled manpower for modern machinery

5. High cost of utilities

6. Use of traditional manufacturing practices & absence of automation7. Non-availability of quality raw materials

8. Non-availability of technical consultants & skilled workforce

9. No quality control systems10. Safety issues for workers

66..33 OOppppoorrttuunniittiieess

1. Potential for high market growth

2.

Expansion into a number of different industries3. Long term relationship and contracts with firms

4. Increase in capacity by purchase of additional machinery and hiring additionalstaff.

66..44 TThhrreeaattss

1. Increasing cost of raw material

2. Increase in duty on raw material import.

3. Entrepreneur with non-engineering background, due to which engineeringquality standards are not adhered to.

4. Not many orders, once production has started.

5.

Delays in getting utility connections6. Delays in receiving tools and dies

7. Untrained labour left unsupervised and not trained by the entrepreneur.8. Undue interventions from the Government agencies

77 IINNDDUUSSTTRRYY && MMAARRKKEETT AANNAALLYYSSIISS

The subcontracting business is operating as a small scale, informal sector inPakistan. Most small workshop clusters are found near industrial areas of the

country, such as Lahore, Faisalabad, Karachi and Gujranwala. No proper data or

statistics are available on the industry structure or market of these workshops.

88

RRAAWW MMAATTEERRIIAALL

88..11 RRaaww MMaatteerriiaall RReeqquuiirreemmeenntt

The pre-feasibility assumes to be using 3 types of steel as raw material. The jobs are

defined by the type of raw material used in the job, as given in the table below. It is


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assumed that 1 kg of raw material is being utilized per job. The raw material detail is

given in Table 8-1.

TTaabbllee 88--11 RRaaww MMaatteerriiaall RReeqquuiirreemmeenntt

Job Type DescriptionPrice/Unit

(Rs.)

Job A Steel die, Tool steel 400 / kg

Job B Heat treatable steel SAI 1045, 1040 100 / kg

Job C Flat Steel Bar, Round Steel bar, ½ Round Steel BarSteel Sheet, Cast Iron, Hexagon Steel Bar, Steel Strip

80 / kg

99

MMAACCHHIINNEERRYY DDEETTAAIILLSS

Table 9-1 shows the list of machinery and tools that are required for a subcontract

workshop. Table 9-2 give details such as size, accuracy level etc of the machinery

and tools proposed. The machinery is assumed to be acquired in two phases, asshown in the table below. Module-I machinery is purchased at the beginning of the

project and Module-II machinery is purchased in year 4.

TTaabbllee 99--11 LLiisstt oof f MMaacchhiinneerryy,, TToooollss && AAcccceessssoorriieess

Type Brand & ModelTotal Cost

(Rs)

Module-I

Shaper Butler brand size 18 inch 250,000

Tools U.K origin 350,000

Metal Works Table U.K origin 30,000

Tool Racks Local Made 20,000

Lathe Colchester brand 6ft bed height 200,000

Pedestal Grinder China origin 8,000

Drill Machine U.K origin size ¾ inch, Herbert brand 70,000

Welding Unit U.K origin 500 Amp, Lincoln brand 80,000

Disc Grinder Hitachi 4 inch 6,000

Paint Spray Gun U.K origin 40,000

Paint drying Oven Local made 130,000

Module-II

Surface Grinder U.K/U.S origin model 540, Jones &

Shipman brand

150,000

Vertical Milling Machine U.K origin, Bridgeport 450,000

Power Press 25 tons local made 150,000

Cylindrical Grinder U.K/U.S origin, Jones & Shipman 200,000

Total Machinery Cost 2,134,000


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12

Generator – 70 KVA 1,225,000

Total Cost 3,359,000

TTaabbllee 99--22 MMaacchhiinneerryy aanndd ttoooollss ddeettaaiillss

Type Details

Module-I

Metal Works Table Length: 6 feet, Width: 4 feet

Tool Racks Height: 8 feet, Width: 3 feet, Length: 6 feet.

3 shelves, 2 feet each. 16 SWG sheet used.

Drill Machine Pedestal Type

Paint drying Oven Size: 8 x 8 feet. With roof, non-walkable, fixed.

With 20 SWG sheet used outside and 16 SWGsheet used inside.

Module-II

Surface Grinder Length: 1.5 feet, Width: 1 foot. With wooden

foundation. Accuracy level: ± 100 - 200

micrometer.

Vertical Milling Machine Used in dust-free environment. Accuracy level:

± 0.2 - 0.3 millimetre

1100 OOFFFFIICCEE EEQQUUIIPPMMEENNTT

Following tables present the office equipment and furniture/fixtures requirement fora subcontract workshop:

TTaabbllee 1100--11 OOf f f f iiccee EEqquuiippmmeenntt

Items Qty Cost/Unit (Rs.) Total Cost (Rs.)

Computers 1 25,000 25,000

Printers 1 20,000 20,000

UPS 1 7,500 7,500

Telephone Sets 2 1,000 2,000

Total Cost 54,500

TTaabbllee 1100--22 FFuurrnniittuurree

Items Qty Cost/Unit (Rs.) Total Cost (Rs.)

Tables 2 8,000 16,000Chairs 5 3,000 15,000

Shelves 3 10,000 30,000

Stools 7 800 5,600

Work Tables 2 5,000 10,000

Misc. 1 15,000 15,000



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13

Total Cost 91,600

1111 VVEEHHIICCLLEESS

The vehicle taken for the project is a motorbike, which will be used by the owner to

make sales call and promote the workshop.

TTaabbllee 1111--11 OOf f f f iiccee VVeehhiicclleess

Vehicle type Number Cost/Unit (Rs.) Total Cost (Rs.)

Metro Motorbike 1 44,000 44,000

Registration fee 6% 2,640

Total Cost 46,640

1122

MMAANNPPOOWWEERR RREEQQUUIIRREEMMEENNTTSS

1122..11

NNuummbbeerr oof f PPeeooppllee RReeqquuiirreedd Manpower listed below is proposed for the operation, additional workers are hired in

year 4 and year 8 with the purchase of additional machinery.

TTaabbllee 1122--11 MMaannppoowweerr RReeqquuiirreemmeenntt

Manpower Required Number Salary/month (Rs.) Annual Salary (Rs.)

Module-I

Owner 1 35,000 420,000

Accountant 1 12,000 144,000

Welder 1 22,000 264,000Lathe operator 1 18,000 216,000

Worker 1 12,000 144,000

Helper 1 7,000 84,000

Module-II

Worker 2 12,000 288,000

Total Salary 8 1,560,000

1133 LLAANNDD && BBUUIILLDDIINNGG

1133..11

LLaanndd aanndd BBuuiillddiinngg RReeqquuiirreemmeenntt

An already built showroom can be rented for the proposed business in anycommercial area or it can be purchased based on the judgment of the entrepreneur. It

is however recommended to rent the shop. The rent in this pre-feasibility is taken to

be about Rs. 10,000/- per month. The total area requirement for this proposed project

is assumed to be of approximately 2,250 sq. feet (0.5 kanal).



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TTaabbllee 1133--11 SSppaaccee RReeqquuiirreemmeenntt

Space Required. (Sq. ft)

Management office 400

Production area 900

Open area 950Total Infrastructure Cost 2250

1133..22 SSuuiittaabbllee LLooccaattiioonn

The land should ideally be located outside municipal and cantonment limits,

preferably in a small industrial estate. Other options could be a small town off major

highway, or a low-income residential area. In Lahore most subcontract workshopsare located in Darogawala, Sheikhupura Road, Ravi Bridge.

1133..33 IInnf f rraassttrruuccttuurree RReeqquuiirreemmeenntt

•

Road access• Electricity

• Telephone, fax

1144

PPRROOJJEECCTT EECCOONNOOMMIICCSS

The total project cost for setting up the unit is Rs. 3.551 million. The capital cost

incurred is Rs. 3.032 million and the working capital is Rs. 0.519 million. The totalcost, project returns and financial plan are given in the tables below:

TTaabbllee 1144--11 TToottaall PPrroo j jeecctt CCoosstt

Account Head Total Cost (Rs)

Total Capital Cost 3,032,146

Total Working Capital 519,691

Total Project Cost (Rs) 3,551,837

TTaabbllee 1144--22 PPrroo j jeecctt RReettuurrnnss

Project

IRR 24%

NPV (Rs) 862,954

Payback Period (Years) 4.94

TTaabbllee 1144--33 FFiinnaanncciinngg PPllaann

Financing Ratio Rs.

Equity 50% 1,775,918

Debt 50% 1,775,918


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PREF-10/June, 2011/ Rev 2 16


Capital Investment Rs. in actuals

Land -

Building/Infrastructure -

Machinery & equipment 2,409,000

Furniture & fixtures 91,600

Office vehicles 46,640

Office equipment 54,500

Pre-operating costs 380,406

Training costs 50,000

Total Capital Costs 3,032,146

Working Capital Rs. in actualsEquipment spare part inventory 6,023

Raw material inventory 20,886

Upfront building rent 120,000

Upfront insurance payment 122,782

Cash 250,000

Total Working Capital 519,691

Total Investment 3,551,837

Initial Financing Rs. in actuals

Debt 1,775,918

Equity 1,775,918

Initial Investment

Payback Period (Yrs) 4.95 4.94

50%

50%

Net Present Value (Rs.) 548,719 862,954

Internal Rate of Return 31% 24%

Project Returns

EQUITY PROJECT

1155 FFIINNAANNCCIIAALL AANNAALLYYSSIISS

1155..11 PPrroo j jeecctt CCoosstt


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Pre-Fea

PREF-10/June

sibility Study

, 2011/ Rev 2

22

Years Years

Capacity

Utilization

Expenses per

year

Yearly

production

Cost

price/per job

(type A job)

Cost

price/per job

(type B job)

Cost price/per

job (type C

job)

Capacity

Utilization

Expenses per

year

Yearly

production

Sel

price/p

(type

50

25

Year 1 25% 2,449,732 708 3,860 3,560 3,540 Year 1 25% 2,449,732 708

Year 2 40% 2,793,627 1,152 2,845 2,530 2,509 Year 2 40% 2,793,627 1,152

Year 3 50% 3,165,286 1,440 2,639 2,308 2,286 Year 3 50% 3,165,286 1,440

Year 4 60% 3,995,032 1,728 2,775 2,428 2,405 Year 4 60% 3,995,032 1,728

Year 5 70% 4,718,022 2,016 2,826 2,462 2,438 Year 5 70% 4,718,022 2,016

Year 6 80% 5,272,279 2,304 2,799 2,416 2,390 Year 6 80% 5,272,279 2,304

Year 7 90% 5,961,981 2,592 2,836 2,434 2,407 Year 7 90% 5,961,981 2,592

Year 8 100% 6,762,325 2,880 2,911 2,489 2,461 Year 8 100% 6,762,325 2,880

Year 9 100% 7,364,468 2,880 3,148 2,705 2,675 Year 9 100% 7,364,468 2,880

Year 10 100% 8,027,844 2,880 3,408 2,943 2,912 Year 10 100% 8,027,844 2,880

Year 1 profit margin

COST PRICE PER JOB SELLING PRICE P

Profit Margin


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1166 KKEEYY AASSSSUUMMPPTTIIOONNSS

TTaabbllee 1166--11 OOppeerraattiioonnaall AAssssuummppttiioonnss

Maximum number of job orders (Annually) 2,880

Number of job orders – Year 1 (Annually) 708

Hours operational per day 8

Days operational per year 300

TTaabbllee 1166--22 EEccoonnoommyy--RReellaatteedd AAssssuummppttiioonnss

Electricity price growth rate 10%

Diesel price growth rate 10%

Wage growth rate 10%

TTaabbllee 1166--33 CCaasshh FFllooww AAssssuummppttiioonnss Accounts Receivable cycle (in days) 15

Accounts payable cycle (in days) 15

Raw material inventory (in days) 90

Equipment spare part inventory (in days) 90

TTaabbllee 1166--44 RReevveennuuee AAssssuummppttiioonnss11

Maximum number of job orders (Annually) 2,880

Number of job orders – Year 1 (Annually) 708

Job Type Profit Margin

Year 1 Year 2 - 10

Job A 25% 50%

Job B 15% 25%

Job C 10% 15%

TTaabbllee 1166--55 EExxppeennssee AAssssuummppttiioonnss

Cost of raw material Rs/kg

Steel die, Tool steel 400/kg

Heat treatable steel SAI 1045, 1040 100/kg

Flat Steel Bar, Round Steel bar, ½ Round Steel BarSteel Sheet, Cast Iron, Hexagon Steel Bar, Steel Strip

80/kg

Raw material cost growth rate 5%

Electricity utilization in hours/day 5

23

1 Revenue is calculated by applying a profit margin on raw material cost and other expenses

incurred.



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24

Generator diesel utilization in hours/day 3

Machinery maintenance (% of machinery cost) 1%

Machinery maintenance growth rate 10%

Office expenses (% of administration expense) 15%

Promotional sales call expense (% of revenue)

Year 1 - 2 1%

Year 3 - 6 0.5%

Year 7 - 10 0.3%

Communication expense ( % of administration expense) 5%

Equipment and machinery insurance 5%

Office vehicles insurance rate 5%

Bad debt expense 0.5%

TTaabbllee 1166--66 FFiinnaanncciiaall AAssssuummppttiioonnss

Project life (Years) 10

Debt 50%

Equity 50%

Interest rate on long-term debt 17%

Interest rate on short-term debt 16%

Debt tenure (Years) 5

Debt payments per year 2

TTaabbllee 1166--77 DDeepprreecciiaattiioonn RRaattee AAssssuummppttiioonnss

Machinery and Equipment 10%Office Equipment 10%

Furniture & Fixtures 10%

Vehicles 10%

1177 AANNNNEEXXUURREE

1177..11 MMaacchhiinneerryy SSuupppplliieerrss

Company Name: Zubair Engineering.

Address: P.O.Box 515, G.T. Road, Climaxabad, Lohynawala

City: GujranwalaTel: 055-3894792, 3021141Fax: 055-3894793

Email: [email protected]

Company Name: International Machinery

Address: 8 Libya Colony Road, Salamatpura stop, GT Road,

Daroghawala



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25

City: Lahore

Tel: 042-36554499

Company Name: Friends Machinery Store.

Address: Near Telephone Exchange, Bahata Machine wala, GT Road,

Daroghawala

City: Lahore.Tel: 042-36531029, 36540929

Company Name: Universal Machinery Store.

Address: 313-D 4, Pakistan Last Mint. GT Road

City: Lahore.Tel: 042-36541811

Company Name: Shahid Machinery Store.Address: Salamatpura, GT Road, Daroghawala

City: Lahore.

Tel: 042-36166715

1177..22

TTaaxx ddeedduuccttiioonn iinnccoommee ssllaabbss

Income Slabs Tax Rate

0.00%

100,000 – 110,000 0.50%

110,000 – 125,000 1.00%

125,000 – 150,000 2.00%

150,000 – 175,000 3.00%

175,000 – 200,000 4.00%

200,000 – 300,000 5.00%

300,000 – 400,000 7.50%400,000 – 500,000 10.00%

500,000 – 600,000 12.50%

600,000 – 800,000 15.00%

800,000 – 1,000,000 17.50%

1,000,000 – 1,300,000 21.00%

1,300,000 and above 25.00%

subcontract workshop

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