177 Education Feasibility

8/2/2019 177 Education Feasibility

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Pre-Feasibility Study

MMOONNTTEESSSSOORRII SSCCHHOOOOLL

Small and Medium Enterprise Development Authority

Government of Pakistan

www.smeda.org.pk

HEAD OFFICE

th & 8th Floor LDA Plaza, Egerton Road, Lahore.

Tel: (92 042) 111-111-456 Fax: (92 042) [email protected]

REGIONAL OFFICE

PUNJAB

REGIONAL OFFICE

SINDH

REGIONAL OFFICE

NWFP

REGIONAL OFFICE

BALOCHISTAN

th Floor LDA Plaza,

gerton Road, Lahore.Tel: (042) 111-111-456

ax: (042) 6304926-7

[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]

September, 2006


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Pre-Feasibility Study Montessori School

PREF-66/Rev 2/September, 2006 2

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 user of 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 CONTROLDocument No. PREF-66

Revision 2

Prepared by SMEDA-Punjab

Issue Date August, 2003

Revision Date September, 2006

Issued by Library Officer


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1 INTRODUCTION TO SMEDA 4

2 PURPOSE OF THE DOCUMENT 4

3 PROJECT PROFILE 4

3.1 PROJECT BRIEF 4

3.2 OPPORTUNITY RATIONALE 5

3.3 PROJECT COST 53.4 PROPOSED CAPACITY 5

4 CURRENT INDUSTRY STRUCTURE 6

4.1 PRE SCHOOL/DAYCARE 7

4.2 NURSERY/KINDERGARTEN/MONTESSORI 7

5 MARKET ANALYSIS 7

5.1 THE UPPER INCOME GROUP 7

5.2 THE MEDIUM INCOME GROUP 8

5.3 THE LOWER INCOME GROUP 8

6 KEY SUCCESS FACTORS 8

7 REGULATIONS 9

8 HUMAN RESOURCE REQUIREMENT 9

8.1 KEY PERSONNEL 98.1.1 Principal 9

8.1.2 Teachers coordinator 9

8.1.3 Accountant 10

8.1.4 Teachers 10

8.1.5 Student Attendants 10

8.1.6 Librarian / Activity Teacher 10

8.1.7 Computer Teacher 10

9 EQUIPMENT REQUIREMENT 10

10 LAND & BUILDING 1110.1 AREA REQUIREMENTS 11

10.2 RECOMMENDED MODE FOR ACQUIRING LAND 1210.2.1 Building Rent 12

10.3 SUITABLE LOCATION 12

11 PROJECT ECONOMICS 13

12 FINANCIAL ANALYSIS 13

12.1 PROJECTED INCOME STATEMENT 14

12.2 PROJECTED BALANCE SHEET 15

12.3 PROJECTED CASH FLOW STATEMENT 16

13 KEY ASSUMPTIONS 17


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11 IINNTTRROODDUUCCTTIIOONN TTOO SSMMEEDDAA

The Small and Medium Enterprise Development Authority (SMEDA) was established

with the objective to provide fresh impetus to the economy through the launch of anaggressive SME support program.

Since its inception in October 1998, SMEDA adopted a sectoral SME developmentapproach where key sectors were selected on the criterion of SME presence. In depth

research was conducted and comprehensive development plans were formulated afteridentification of impediments and retardants. The all-encompassing sectoral development

strategy involved overhauling of the regulatory environment by taking into considerationother important aspects including finance, marketing, technology and human resource

development.

SMEDA has so far successfully formulated strategies for key sectors including, Fruits &

Vegetables, Marble & Granite, Gems & Jewelry, Marine Fisheries, Leather & Footwear,Textiles, Surgical Instruments, Transport and Dairy. Whereas the task of SME

development at a broader scale still requires more coverage and enhanced reach in termsof SMEDAs areas of operation.

Along with the sectoral focus a broad spectrum of Business Development Services is alsobeing offered to the SMEs by SMEDA. These services include identification of viablebusiness opportunities for potential SME investors. In order to facilitate these investors,

SMEDA provides Help Desk Services as well as development of project specificdocuments. These documents consist of information required to make well researched

investment decisions. Pre-feasibility Studies and Business Plan Development are some ofthe services provided to enhance the capacity of individual SMEs to capitalize on viable

business opportunities.

22 PPUURRPPOOSSEE OOFF TTHHEE DDOOCCUUMMEENNTT

Pre-feasibility studies are developed primarily to facilitate potential entrepreneurs inproject identification for investment. Pre-feasibility Studies may form the basis on which

an important investment decision maybe made. The document covers various aspects ofthe business venture from project concept development to, financing and business

management.

33 PPRROOJJEECCTT PPRROOFFIILLEE

The project is about starting a Montessori school for elementary education of children.

The proposed plan is to start classes ranging from Playgroup to Class II.

33..11 PPrroojjeecctt BBrriieeff

The study provides information regarding investment opportunity for setting up aMontessori school in any metropolitan city of Pakistan i.e. Lahore, Islamabad, Peshawar,

Quetta or Karachi. However, the project may also be started in smaller cities, after carefulmarket research. It is also recommended that the Montessori school should be located in

an easily approachable location in line with the selected target market.


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33..22 OOppppoorrttuunniittyy RRaattiioonnaallee

Montessori school education is the first formal learning stage for a child. A child learns to

recognize different alphabets, words, sounds and characteristics. It teaches children tobehave in groups, helping them learn socialization at an early stage.

The fast paced life of the metropolitan cities is significantly influencing the life style ofits inhabitants. Economic pressures are compelling both parents to work towards

achieving and sustaining quality life standards. This has further added to complexity andcompetition of a Metropolitan city. As a result of these social changes, the trend of

sending children to Daycare Centers or to Montessori schools at a much earlier age isgaining rapid grounds. This has further added to complication and competition of a

metropolitan city resulting in high demand for Montessori schools in the metropolitancities.

Schools with high reputation have a stringent admission selection process, for whichMontessori schools provide the necessary training. This has also given rise to high

demand for Montessori school systems that can prepare children for admission to

reputable Primary schools.The growing population has exhausted the limited capacity of the existing private as wellas public primary school systems. The growing population has put tremendous pressure

on the existing public sector education infrastructure in the country. Private sector withits investment capacity to provide well equipped and well staffed school system is

therefore, well positioned to exploit this opportunity for establishing viable schoolsystems in the country.

33..33 PPrroojjeecctt CCoosstt

Total project cost for setting up a Montessori School is estimated at Rs. 2.38million.

33..44 PPrrooppoosseedd CCaappaacciittyy

It is proposed that students be admitted for Playgroup to Class II. There are ten proposed

classrooms for the school having a total capacity of 240 students. However, this capacitymay not be achieved in the initial years of operations.


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Table 3-1: Year Wise Number of Students (Maximum Utilization)

Class Students Per Year

Year 1 Year 2 Year 3 Year 4 Year 5

Play Group 24 27 30 33 36

KG-I 12 36 40 40 40

KG-II 12 25 40 40 40

Class I 6 18 32 47 47

Class II 6 13 25 39 54

Drop-Outs 0 3 6 9 11

Pass-Outs 0 6 13 25 39

Total 60 117 171 218 206

44 CCUURRRREENNTT IINNDDUUSSTTRRYY SSTTRRUUCCTTUURREE

The Montessori education in the country is yet at an early stage to absorb the growing

demand. However, few school systems have steadily established themselves at least inbigger cities of the country. Some prominent names in Montessori education in Lahore

include, The Lahore Pre-School, Kids Campus, Scarsdale, Lahore Grammar School,Lahore Alma and the Lahore Kindergarten within the Lahore city. Karachi is the largest

city with well-established private sector education systems. Major Montessori schools inKarachi include Montessori World, Radiant Montessori, PAF Montessori, Head Start and

CAS (Center for Advanced Studies).

The Education system of Pakistan is divided into the following tiers:

Table 4-1: Education System in Pakistan

Level Classes AdmissionAge (Year)

Duration

Elementary (Montessori) Playgroup, Kindergarten 3-5 2 Years

Primary I-V 5 5 Years

Middle VI-VIII 10 3 Years

Secondary IX-X 13 2 Years

Higher Secondary XI-XII 16 2 Years

B.A (Graduate Degree) 2 Years

M.A (Post-graduate Degree) 2 Years

M. Phil/ Ph.D. 3 Years

Educational Guide of Pakistan (2000-01)

At present, most of the elementary school systems in the country fall in one of thefollowing two categories.

Pre-School/Daycare

Nursery/Kindergarten/Montessori/Test Preparation Centers


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44..11 PPrree SScchhooooll//DDaayyccaarree

The Pre-school/ Daycare Centers admit children ranging from 3 months to 3 years of age.

However, on an average a child of two and a half years of age is normally admitted to aPre-School. At Daycare Centers, children are normally engaged in playful activities with

no formal training imparted.

Pre-school training includes recognition of numbers and alphabets, introduction to basic

shapes, body parts, poems and basic religious knowledge.

44..22 NNuurrsseerryy//KKiinnddeerrggaarrtteenn//MMoonntteessssoorrii

This tier of education system is the first stage of formal learning process for a child.Normally a child of three years of age is admitted to this system of education. Different

teaching methods and course work is applied at this level of education. Most schoolsystems adopt their own teaching methodology. At this level of school education, it is the

teachers and the school environment that is more important for the pupils than the coursework itself. The schools prepare their students to socialize with other children in the same

age bracket and familiarize them for a more formal primary level education.In addition, a vast majority of the schools in this tier also adopt their course curriculum to

prepare the children for admission in primary level schools, where admission is highlycompetitive.

55 MMAARRKKEETT AANNAALLYYSSIISS

There are two broad market-positioning options available to a Montessori School System.

Based on the household income.

Based on the quality/standard of education offered

Irrespective of the education services, income based target market will play a crucial rolein the overall positioning of the school.

Any entrepreneur planning to open up a Montessori school should first decide upon the

objective of the venture. Various options available in this regard may include:

To plan a Montessori school with emphasis on Daycare services.

To establish a school as a Preparatory School for other reputed Primary Level

Schools.

To establish a Montessori School with incremental expansion of services into primary

and high school level.

Based on income level, the school can position itself for any of the following three broadincome groups;

55..11 TThhee UUppppeerr IInnccoommee GGrroouupp

The upper income group segment is quality and reputation conscious. Most parents of the

children enrolled in these schools belong to the different section of the society i.e. self-employed businessmen, high paid government or private sector executives. Existing


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schools in the category charge a fee ranging from Rs.5,000-10,000 per month. Theseschools are characterized by large custom built campuses, swimming pools, indoor as

well outdoor physical activities areas, and furnished spacious classrooms with heaters andair conditioners. These schools offer well designed modern course work, and employ

highly trained Montessori teachers.

55..22 TThhee MMeeddiiuumm IInnccoommee GGrroouupp

Schools in this category normally charge a fee ranging from Rs. 1,500-4,000 per month.These schools cater to children of well-educated and professionally employed parents.

The important characteristics of these schools include well located school buildings thatmay be custom built or rented premises, modern course work adopted by other modern

school systems, and comfortable class rooms with some provisions for playing area.

55..33 TThhee LLoowweerr IInnccoommee GGrroouupp

The concept of Montessori education is not very old in this income bracket, however anincreasing number of parents in this category have also now started sending their children

to these schools. One of the major reasons is that most of the private schools at primarylevel now do not accept students directly in Class 1. This category of schools charges a

monthly fee up to Rs.800. These schools have small buildings with little or no provisionsfor physical activities.

66 KKEEYY SSUUCCCCEESSSS FFAACCTTOORRSS

At a Montessori school level, teachers/attendants play a critical role in the success oflearning process. Therefore, it is suggested that staff employed by the school should be

highly educated and properly trained for Montessori education. Before starting educationservices, it is recommended that teacher training program should be imparted.

In addition to the quality of teachers employed, the teacher student ratio should be kept ata well-researched optimum level.

The education curriculum should be well researched and comprehensive. In addition topaper course work, it is suggested that visual and other teaching tools should also be

optimally used.

Parents are conscious about the well being and safety of their children at schools,

therefore, it is suggested that the school environment ensures security and should be freefrom any apparent hazards. The school should preferably not be located in a highly

populated location or at a location with high traffic hazards.

The area of the classrooms should be in line with the number of students in each

classroom. Moreover, the classrooms should either be air-conditioned or at least wellventilated. Classrooms should also be well equipped with teaching as well as extra

curricular activity aids.

Adequate provisions for physical, either indoor or outdoor or both facilities should be

made available.

Continuous teacher parent interaction should also be a regular feature of the school

education system.


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77 RREEGGUULLAATTIIOONNSS

No formal registration is required for the Montessori and elementary schools with the

Education Directorate Schools. However, if any expansion is planned, the schools arerequired to get registered with Provincial Education Department in the office of

Education Directorate Schools. The application is to be submitted on a prescribed form

which can be obtained from the department. Domestic rates apply on the utility bills if aninstitution is registered with the department.

88 HHUUMMAANN RREESSOOUURRCCEE RREEQQUUIIRREEMMEENNTT

Table 8-1: Human Resource required for the business

Position Number Salary per

month (Rs.)

Annual Salary

(Rs.)

Principal 1 30,000 360,000

Teacher coordinator 1 15,000 180,000

Activity Teacher cum Librarian 1 7,000 84,000Computer Teacher 1 8,500 102,000

Teacher Play Group 2 7,000 168,000

Teacher KG-I 2 7,000 168,000

Teacher KG-II 2 7,000 168,000

Class I 2 8,500 204,000

Class II 2 8,500 204,000

Games teacher 1 7,000 84,000

Accountant 1 10,000 120,000

Student Attendant 4 5,000 240,000

Guard 2 5,000 120,000Peon / Helper 1 4,000 48,000

Cleaner 2 3,500 84,000

Gardner 1 3,500 42,000

TOTAL 26 2,376,000

88..11 KKeeyy PPeerrssoonnnneell

88..11..11 PPrriinncciippaall

The principal should be responsible for coordinating all the activities of the school

including the hiring of teachers, developing liaison with the parents, maintaining anddeveloping the brand name of the school for appropriate positioning, course design,

admission tests and extra curricular activities.

88..11..22 TTeeaacchheerrss ccoooorrddiinnaattoorr

An experienced and trained Montessori school teacher is recommended for this post TheCoordinator would be assisting the principal in all school matters. He/she will be

responsible for teachers attendance, their performance and evaluation. He/she has tocollaborate with students, parents, staff and volunteers to ensure that group activities run


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effectively. Supervise and monitor the tutoring of students .Coordinate any specialprojects to increase coaching awareness among teachers including arranging guest

speakers, visits and workshops.

88..11..33 AAccccoouunnttaanntt

The accountant will be responsible for book keeping and maintaining accounts, salaries,and other administrative expenditures.

88..11..44 TTeeaacchheerrss

Experienced teachers or fresh graduates with a natural aptitude for teaching should be

employed. A balanced mix of experienced and fresh teachers is recommended forefficient running of the school. Each teacher shall be given a class and held responsible

for proper training, imparting knowledge, arranging co-curricular activities for thechildren and their performances in the examinations.

88..11..55 SSttuuddeennttAAtttteennddaannttss

The students in the elementary institutes are very young and may also need attendants or

baby-sitters. Each class will be having one attendant for the children.

88..11..66 LLiibbrraarriiaann//AAccttiivviittyy TTeeaacchheerr

One person is recommended for running the library and for activity room.

88..11..77 CCoommppuutteerrTTeeaacchheerr

The person should be responsible for the introduction of IT to the young students and forproper arrangement of students games and basic computer learning.

99 EEQQUUIIPPMMEENNTT RREEQQUUIIRREEMMEENNTT

The details of the different equipment required for the project is given in the following

tables:

Table 9-1: Office Equipment Requirement Details

Equipment Quantity Cost per

Unit (Rs.)

Total Cost

(Rs.)

Computers 3 25,000 75,000

Printer (Laser) 1 25,000 25,000

UPS 3 8,500 25,500

Air condition (1.5 tons) 4 24,000 96,000

Total Equipment 11 221,500

Table 9-2 Other Equipment Requirement Detail

Description Quantity Cost per Unit

(Rs)

Total Cost

(Rs)

See Saw 2 2,500 5,000

4 Feet Slide 1 2,500 2,500

6 Feet Slide 1 3,500 3,500


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8 Feet Slide 1 4,500 4,500

Monkey Bars 6x6 1 6,000 6,000

White Boards 10 2,000 20,000

Soft Boards 10 500 5,000

Computer 10 25,000 250,000

UPS 10 8,500 85,000

Water cooler 1 10,000 10,000

Total 391,500

Table 9-3: Furniture & Fixtures Detail

Furniture & Fixtures Quantity Cost per

Unit(Rs)

Total

Cost(Rs)

Round tables for Play group 6 4,500 27,000

Chairs for Play group 32 500 16,000

Teacher chairs for Play group 2 1,000 2,000Round Tables for KG-I 6 4,500 27,000

Chairs for KG-I 32 500 16,000

Teacher chairs for KG-I 2 1,500 3,000

Round Table for KG-II 6 4,500 27,000

Chairs for KG-II 32 500 16,000

Teachers Chair for KG -II 2 1,500 3,000

Teacher Table & Chair for class-I 2 1,600 3,200

Student table & Chair for Class- I 40 1,200 48,000

Teacher Table & Chair for class -II 2 1,600 3,200

Student Table & Chair for Class -II 40 1,200 48,000

Cupboards & Book shelves 8 6,500 52,000

Children Books /toys/Entertainmentequipment

150,000

Computer Chairs 20 800 16,000

Computer Tables 10 1,000 10,000

Carpet ( sq. ft) 4,019 40 160,760

Principal and admin staff 1 100,000 100,000

Total Furniture & Fixture Cost 4,262 728,160

1100 LLAANNDD && BBUUIILLDDIINNGG

1100..11 AArreeaa RReeqquuiirreemmeennttss

For two hundred and forty students (240), 2.5 kanal of land would be sufficient. A

purpose built building may also be purchased. The covered area should have 10classrooms, one common room for teachers, and one room for principal one for teacher

coordinator and one room for the administration staff. Appropriate number of washrooms


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is suggested for teachers, principal, children and administration staff. A big hall should beallocated with proper divisions for library/ entertainment room, and computer section. An

adequate area should be allocated for the playground. The playground should haveseesaws, slides, monkey bars and other playing equipment and tools.

Table 10-1 Covered Area Requirements

Space Requirements Required Area (Sq. ft)

Class Rooms 2,400

Teachers Room 144

Library/Entertainment Room 500

Admin Rooms 575

Computer Class 400

Washrooms & Kitchen 270

Grounds 6,961

Total Covered Area Requirement 11,250

1100..22 RReeccoommmmeennddeedd MMooddee ffoorr AAccqquuiirriinngg LLaanndd

It is recommended that the proposed project should be established in a rented building toreduce initial infrastructure cost. In case a purpose built building is purchased,

infrastructure cost will increase.

1100..22..11 BBuuiillddiinnggRReenntt

Average monthly rent for the building required Rs. 50,000 to 60,000. For this studymonthly rent is estimated at Rs. 55,000.

Table 10-2: Rent Cost

Rent Cost Monthly Rent

(Rs.)

Annual Rent

(Rs.)

Building rent cost @ Rs. 5 per square foot 55,000 330,000

1100..33 SSuuiittaabbllee LLooccaattiioonn

The suitable location will depend upon the target market. All major cities in the countryare best suited for starting a Montessori school. However, with the increasing population

pressure and increasing concentration of well reputed Montessori schools in metropolitancities, peripheral and smaller cities also present a very lucrative business opportunity for

opening up a well planned Montessori school. Cities like Sargodha, Multan, Faisalabad,

Sheikhupura, Rahimyar Khan, Gujranwala, Sialkot, Gujrat, Hyderabad and Abbotabadare some of the cities in this category. Moreover, the presence of large middle classfamilies in major cantonment cities of the country is another opportunity to be tapped.


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1111 FFIINNAANNCCIIAALL AANNAALLYYSSIISS

1111..11 PPrroojjeecctt EEccoonnoommiiccss

Table 11-1 Project Cost/Capital RequirementsFixed Capital Requirement Total Cost Rs.

Machinery & Equipment 391,500

Office Equipment 221,500

Office Furniture & Fixture 552,160

Pre-Operating Cost 226,000

Total Fixed Capital Cost 1,391,160

Working Capital

Upfront Building Rental 330,761

Rent Security (Refundable) 165,381

Cash 500,000

Total Working Capital 996,142

Total Investment in the Project (Rs.) 2,387,302

Table 11-2 Financing Plan

Description

Equity 50% 1,193,651

Debt 50% 1,193,651

Table 11-3 Project Returns

Equity Project

Net Present Value 6,394,253 4,291,402

Internal Rate of Return 87% 39%

Payback Period (Years) 3.08 4.07


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1111..22 PPrroojjeecctteedd IInnccoommee SSttaatteemmeenntt


Revenue

Admission Fee 300,000 435,750 413,438 358,864 309,954

Tuition Fee 2,088,000 4,738,800 7,470,540 9,958,542 12,008,548

Sub Total 2,388,000 5,174,550 7,883,978 10,317,406 12,318,502

COST OF GOOD SOLD

Faculty Staff Salary 1,722,000 1,755,600 1,931,160 2,124,276 2,336,704

Total 1,722,000 1,755,600 1,931,160 2,124,276 2,336,704

Gross Profit 666,000 3,418,950 5,952,818 8,193,130 9,981,799

GENERAL ADMINISTRATION &

SELLING EXPENSE

Administration Staff Salary 654,000 719,400 791,340 870,474 957,521

Building Rent 660,000 726,000 798,600 878,460 966,306Electricity Expense 287,629 316,392 348,031 382,834 421,118

Water Expense 45,000 79,200 87,120 95,832 105,415

Gas Expense 9,000 9900 10890 11979 13176.9

Communication Expense 32,700 35,970 39,567 43,524 47,876

Office Expenses 32,700 35,970 39,567 43,524 47,876

Students' Teaching Aid 47,760 103,491 157,680 206,348 246,370

Entertainment and Events Expense 23,880 51,746 78,840 103,174 123,185

Professional Fee 23,880 51,746 78,840 103,174 123,185

Depreciation expense 104,864 104,864 104,864 104,864 104,864

Amortization of pre-operating costs 45,200 45,200 45,200 45,200 45,200Promotional Expense 96,000 86,400 77,760 69,984 62,986

Maintenance Cost 48,000 52,800 58,080 63,888 70,277

Total Operating Expenses 2,110,613 2,419,078 2,716,379 3,023,259 3,335,356

Operating Income (1,444,613) 999,872 3,236,439 5,169,870 6,646,442

Earning Before Interest & Taxes (1,444,613) 999,872 3,236,439 5,169,870 6,646,442

Interest on short term debt - 291,066 218,765 - -

Interest expense on long term debt 160,987 135,086 105,432 71,482 32,612

Sub Total 160,987 426,152 324,197 71,482 32,612

Earning Before Taxes (1,605,600) 573,719 2,912,242 5,098,389 6,613,831

Taxes - - 376,072 1,019,678 1,322,766

Net Profit After Taxes (1,605,600) 573,719 2,536,170 4,078,711 5,291,065


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1111..33 PPrroojjeecctteedd BBaallaannccee SShheeeett

Const. Year Year 1 Year 2 Year 3 Year 4 Year 5

CURRENT ASSETS

Cash in Bank 500,000 500,000 500,000 1,384,078 5,186,044 10,139,773

Accounts Receivable - 155,739 337,471 514,172 672,874 803,381

Rent Security(Refundable) 165,000 165,000 165,000 165,000 165,000 -

Pre-paid Building Rent 330,000 693,000 762,300 838,530 922,383 483,153

Total Current Asset 995,000 1,513,739 1,764,771 2,901,780 6,946,302 11,426,307

FIXED ASSETS

Machinery & Equipment 391,500 356,265 321,030 285,795 250,560 215,325

Office Equipment 221,500 201,565 181,630 161,695 141,760 121,825

Furniture & Fixtures 552,160 502,466 452,771 403,077 353,382 303,688

Total Fixed Assets 1,165,160 1,060,296 955,431 850,567 745,702 640,838

INTANGIBLE ASSETS

Pre-Operational Costs 226,000 180,800 135,600 90,400 45,200 -

Total Intangible Assets 226,000 180,800 135,600 90,400 45,200 -

TOTAL ASSETS 2,386,160 2,754,835 2,855,802 3,842,747 7,737,204 12,067,145

CURRENT LIABILITIES

Short term Financing - 1,973,024 1,482,921 - - -

Students Security Payable 180,000 402,000 570,000 654,000 -

Total Current Liabilities - 2,153,024 1,884,921 570,000 654,000 -

OTHER LIABILITIES

Long Term Debt 1,193,080 1,014,331 809,681 575,378 307,124 -

Total Long Term Liabilities 1,193,080 1,014,331 809,681 575,378 307,124 -

SHAREHOLDER'S

EQUITY

Paid-up Capital 1,193,080 1,193,080 1,193,080 1,193,080 1,193,080 1,193,080

Retained Earnings (1,605,600) (1,031,881) 1,504,289 5,583,000 10,874,065

Total Equity 1,193,080 (412,520) 161,199 2,697,369 6,776,080 12,067,145

TOTAL CAPITAL &

LIABILITIES

2,386,160 2,754,835 2,855,802 3,842,747 7,737,204 12,067,145


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1111..44 PPrroojjeecctteedd CCaasshh ffllooww SSttaatteemmeenntt

Year-0 Year 1 Year 2 Year 3 Year 4 Year 5

Operating activities

Net profit

-

(1,605,600) 573,719 2,536,170 4,078,711 5,291,065

Add: depreciation expense 104,864 104,864 104,864 104,864 104,864

amortization of pre-operating costs - 45,200 45,200 45,200 45,200 45,200

Accounts receivable - (155,739) (181,732) (176,702) (158,702) (130,506)

Pre-paid building rent (330,000) (363,000) (69,300) (76,230) (83,853) 439,230

Rent Security (Refundable) (165,000) - - - - 165,000

Student Security(Refundable) - 180,000 222,000 168,000 84,000 (654,000)

Cash provided by operations (495,000) (1,794,275) 694,752 2,601,302 4,070,221 5,260,853

Financing activities

Long Term Debt Repayment ` (178,749) (204,650) (234,303) (268,254) (307,124)

Short term debt principal repayment - (1,973,024) (1,482,921) - -

Additions of New Long Term Debt 1,193,080 - - - - -

Issuance of shares 1,193,080 - - - - -

Cash provided by / (used for)

financing activities 2,386,160 (178,749) (2,177,673) (1,717,224)

(268,254) (307,124)

Investing activities

Capital expenditure (1,391,160) - - - - -

Cash (used for) / provided by

investing activities (1,391,160) - - -

- -

NET CASH 500,000 (1,973,024) (1,482,921) 884,078 3,801,967 4,953,729

Cash balance brought forward - 500,000 500,000 500,000 1,384,078 5,186,044

Cash available for appropriation 500,000 (1,473,024) (982,921) 1,384,078 5,186,044 10,139,773

Cash balance 500,000 (1,473,024) (982,921) 1,384,078 5,186,044 10,139,773

Short term loan requirement 1,973,024 1,482,921 - - -

Cash carried forward 500,000 500,000 500,000 1,384,078 5,186,044 10,139,773


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1122 KKEEYY AASSSSUUMMPPTTIIOONNSS

Table 12-1 Operating Assumptions

Operational Days Per Month 22Months Operational 12

Table 12-2 Capacity Utilization Assumptions

Capacity Utilization (First Year) 25%

New Students Admission Growth Rate 10%

First Year Student Enrollment 60

Student Drop-out Ratio 5%

Table 12-3 Economic Assumptions

Electricity Growth Rate 10%

Salary Growth Rate 10%

Rent Growth Rate 10%

Student Fee Growth Rate 5%

Admission Fee Growth Rate 7%

Table 12-4 Expense Assumptions

Office Expense (Stationary, Entertainment etc.) 5% of Administrative Expense

Communication Expense 7% of Administrative Expense

Promotional Expense 5% of Revenue

Professional Expense (Legal, Audit etc.) 1% of Revenue

Students Teaching Aid 2% of Revenue

Table 12-5 Depreciation Assumptions

Depreciation Method Straight Line

Equipment 10%

Office Furniture & Fixtures 10%


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Table 12-6 Student Capacity Assumptions (Maximum Utilization)

Class Students Per Year


Play Group 24 27 30 33 36

KG-I 12 36 40 40 40KG-II 12 25 40 40 40

Class I 6 18 32 47 47

Class II 6 13 25 39 54

Drop-Outs 0 3 6 9 11

Pass-Outs 0 6 13 25 39

Total 60 117 171 218 206

Table 12-7 Proportion of New Admission

Play Group 40%KG 1 20%

KG 2 20%

Class 1 10%

Class 2 10%

Table 12-8 Revenue Assumptions

Admission Fee Student Security

(Refundable)

Monthly Fee

Play Group 5,000 3,000 2,500KG 1 5,000 3,000 3,000

KG 2 5,000 3,000 3,000

Class 1 5,000 3,000 3,500

Class 2 5,000 3,000 3,500

Documents

177 Education Feasibility