cut flower farm gladiolus marigold statice and chrysanthemum.pdf

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Pre-Feasibility Study

Prime Ministers Small Business Loan Scheme

CCuutt FFlloowweerrFFaarrmm(Gladiolus, Marigold, Statice and Chrysanthemum)

Small and Medium Enterprises Development Authority

Ministry of Industries & ProductionGovernment 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

PUNJABREGIONAL OFFICE

SINDHREGIONAL OFFICE

KPKREGIONAL OFFICE

BALOCHISTAN

3rd Floor, Building No. 3,

Aiwan e Iqbal Complex, EgertonRoad Lahore,

Tel: (042) 111-111-456

Fax: (042)6304926-7

[email protected]

5TH Floor, Bahria

Complex II, M.T. Khan Road,Karachi.

Tel: (021) 111-111-456Fax: (021) 5610572

[email protected]

Ground Floor

State Life BuildingThe Mall, Peshawar.

Tel: (091) 9213046-47Fax: (091) 286908

[email protected]

Bungalow No. 15-A

Chaman Housing SchemeAirport Road, Quetta.

Tel: (081) 831623, 831702Fax: (081) 831922

[email protected]

September 2013
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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Pre-feasibility Study Cut flower Farm

Table of Content

1 Disclaimer.........................................................................................................12 Purpose of the document ............................................................................23 Introduction to SMEDA .................................................................................24 Introduction to Scheme ................................................................................35 Executive Summary .......................................................................................36 Brief Description of the project ..................................................................37 Critical Factors ................................................................................................48 Installed and Operational Capacity ...........................................................49 Geographic Potential for Investment ........................................................510 Potential Target Markets / Cities ................................................................611 Process Flow:..................................................................................................612 Project Cost Summary ..................................................................................6

12.1 Project Economics ..................................................................................................... 612.2 Project Financing ....................................................................................................... 712.3 Project Cost ................................................................................................................ 812.4 Space Requirement................................................................................................... 812.5 Machinery and Equipment........................................................................................ 812.6 Furniture ...................................................................................................................... 812.7 Raw Material Requirements..................................................................................... 912.8 Human Resource Requirement ............................................................................... 912.9 Revenue Generation ............................................................................................... 1012.10 Other Costs............................................................................................................... 10

13 Contacts - Suppliers, experts/consultants, Dev. Institutions ..........1014 Annexure ........................................................................................................13

14.1 Income Statement ....................................................................................................... 1314.2 Project Balance Sheet ................................................................................................. 1414.3 Cash Flow Statement .............................................................................................. 1514.4 Useful Project Management Tips .......................................................................... 1314.5 Useful Links .............................................................................................................. 14

15 Key Assumptions .........................................................................................15

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11 DDIISSCCLLAAIIMMEERR

This information memorandum is to introduce the subject matter and provide a

general idea and information on the said matter. Although, the material included inthis 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 thismemorandum 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

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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, and 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 need to come up with pre-feasibility reports for undocumented or minimally

documented sectors attains greater imminence as the research that precedes such

reports reveal certain thumb rules; best practices developed by existing enterprises

by trial and error, and certain industrial norms that become a guiding source

regarding various aspects of business set-up and its successful management.

Apart from carefully studying the whole document one must consider critical aspects

provided later on, which form basis of any Investment Decision.

33 IINNTTRROODDUUCCTTIIOONN TTOOSSMMEEDDAA

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 prefeasibility studies in key areas of investment

has been a successful hallmark of SME facilitation by SMEDA.

Concurrent to the prefeasibility 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.

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44 IINNTTRROODDUUCCTTIIOONN TTOOSSCCHHEEMMEE

Prime Ministers Small Business Loans Scheme, 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 National Bank

of Pakistan (NBP) and First Women Bank Ltd. (FWBL).

Small business loans with tenure up to 7 years, and a debt : equity of 90 : 10 will be

disbursed to SME beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber

Pakhtunkhwah, Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally

Administered Tribal Areas (FATA).

55 EEXXEECCUUTTIIVVEESSUUMMMMAARRYY

Cut Flower Farm is proposed to be located at favorable growing areas in

Balochistan including District Quetta, Kalat, Ziarat, Pishin/Khanozai, Killa Saifullahand any other temperate areas.

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

Production Capacity of Gladiolus, Statice, Chrysanthemum and Marigold is 150,000

Kgs. having first year production capacity of 60,000 Kgs. at initial utilization of 40%

in year -01.

Total Cost Estimate is Rs. 1.88 Mill ion with fixed investment ofRs. 1.53 Million and

working capital ofRs. 0.35 Mill ion.

Given the cost assumptions IRR and payback are 62% and 2.21 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 in production for 8 months while

in other provinces of Pakistan, such period is for 4 months only.

Balochistans 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 BBRRIIEEFFDDEESSCCRRIIPPTTIIOONN OOFF TTHHEE PPRROOJJEECCTTFollowing key parameters must be addressed as per pre-feasibility study:

Technology: This proposed farm will cultivate and produce Gladiolus, Statice,

Chrysanthemum and Marigold varieties and will generate revenues from sale of

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these varieties. Additional revenues will be generated from the sale of Gladiolus

Corms which will start from third year.

Location: The Cut Flower Farm is proposed to be located at favourable growing

areas in Balochistan including District Quetta, Kalat, Ziarat, Pishin/Khanozai, Killa

Saifullah and any other temperate areas.

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 the 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 upon demand.

Employment Generation: The proposed project will provide direct employment

to 06 people. Financial analysis shows the unit shall be profitable from the veryfirst year of operation.

77 CCRRIITTIICCAALLFFAACCTTOORRSS

Establishment of the farms in areas where basic infrastructure including waterand electricity are available.

Farming should be done on scientific grounds, taking care of the 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 colorand varieties.

Special attention to healthy and certified seeds/ bulbs, land preparation,

sowing pattern, water management, fertilizer application and marketing is

required.

88 IINNSSTTAALLLLEEDD AANNDDOOPPEERRAATTIIOONNAALLCCAAPPAACCIITTYY

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%% CCaappaaccii ttyyProduction Capacity (Units) 150,000

Initial capacity utilization 40%

Production per year 60,000

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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 the farming of Gladiolus, Statice, Chrysanthemum andMarigold 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 PerYear @ 100 % Sales Price (Rs.)

Gladiolus, Statice,Chrysanthemum and MariGold

150,000 20 - 35

99 GGEEOOGGRRAAPPHHIICCPPOOTTEENNTTIIAALL FFOORRIINNVVEESSTTMMEENNTT

Pakistan is a country conducive to small scale farming where floriculture provides an

opportunity for enhancing income of under privileged.

Floriculture is an upcoming opportunity in Balochistan since it requires less waterand more per acre income then 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 areas.

One of the major competitive advantages of Balochistan is the tenure of production.

In Balochistan, flower plants can be in production for 8 months while in other

provinces of Pakistan, such period is for 4 months only. With the use of controlled

environment sheds, academia, other support industry interface, a round the yearproductivity can be ensured for national & international markets.

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1100 PPOOTTEENNTTIIAALLTTAARRGGEETTMMAARRKKEETTSS//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 ofBalochistan can also be targeted upon demand.

1111 PPRROOCCEESSSSFFLLOOWW::

The Flower process will be as under:

1122 PPRROOJJEECCTTCCOOSSTTSSUUMMMMAARRYY

A detailed financial model has been developed to analyze the commercial viability of

Cut Flower Farm - Gladiolus, Mari Gold, Statice and Chrysanthemum under the

Prime Ministers Small Business Loan Scheme. 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 ofRs.

1.53 Million and Working Capital ofRs. 0.35 Million. The project is assumed to be

financed through 10% equity and 90% debt.

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.

Whereby, 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.

Land

LevelingSowing Watering Early Stage

Plants

Visual

InspectionPlucking Packing

Distribut

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TTaabbllee 33 -- PPrroojjeecctt EEccoonnoommiiccss

Description Details

Internal Rate of Return (IRR) 62%

Payback Period (yrs) 2.21

Since the 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 determined by the marriages, religious (URS) and political

occasions. Due to these reasons it is difficult to forecast the actual requirements for

cut flowers. Similarly, due to the perishable nature of the product appropriate

infrastructure and transportation also plays an important role in the 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 bankloan:

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) 7

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1122..33 PPrroojjeecctt CCoosstt

Following requirements have been identified for operations of the proposedbusiness.

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 20,592Upfront 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) acre, most of which will be used for

farming. Land would be leased out 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 ooffMMaacchhiinneerryy && EEqquuiippmmeenntt

Items Total Cost Rs

Shovels, pickaxes, Cutters , Cart& Misc tools etc

20,000

Total 20,000

1122..66 FFuurrnnii ttuurree

Since it is a field oriented project, therefore, no office equipment will be required,

however, there is a provision for purchase of rudimentary furniture.

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TTaabbllee 88:: FFuurrnnii ttuurree CCoosstt

Description Total Cost(Rs.)

Furniture 20,000

Total 20,000

1122..77 RRaaww MMaatteerriiaall RReeqquuiirreemmeennttss

Cost is determined for different cut flower varieties by adding their seed/ bulb cost

with labour, pesticides, fertilizer etc.

TTaabbllee 99:: CCoosstt ooffMMaatteerriiaall

Material Cost (Rs.) Unit Total 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) FullTime

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.

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1122..99 RReevveennuuee GGeenneerraattiioonn

TTaabbllee 1111:: RReevveennuuee AAssssuummpptt iioonnss

Product Unit Sales

Price(Rs./Unit)

First Year

Production @40%

First Year

SalesRevenue

(Rs)

Gladioli, Statice,Chrysanthemum and MaryGold

150,000 20 - 35 60,000 1,680,600

Total Sales Revenue 1,680,600

Price range for cut flower is Rs. 20 -35. Sales price 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 twoyears. Project starting capacity is assumed that 40% of total available capacity and

the growth in capacity utilization will be 25% per annum.

1122..1100 OOtthheerrCCoossttss

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 MalghaniHorticulturist/Cold Chain SpecialistVegetable Botanist

Agriculture Research Institute, Quetta.Agriculture & Cooperatives Department, Government of BalochistanCell: 0334 4058071

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1144 AANNNNEEXXUURREE

1144..11 IInnccoommee SSttaatteemmeenntt

Statement Summaries SMED

Income Statement

Rs. in actu

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 1

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,

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,

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,

General administration & selling expenses

Administration expense 240,000 244,800 249,696 254,690 259,784 264,979 270,279 275,685 281,198 286,

Rental expense 125,000 137,500 151,250 166,375 183,013 201,314 221,445 243,590 267,949 294,

Utilities expense - - - - - - - - -

T ravell ing & Comm. expense (phone , fax, e tc .) 74,418 114,602 139,355 151,293 164,385 178,745 194,500 211,788 230,761 251,

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,

Amortization expense 43,051 43,051 43,051 43,051 43,051 43,051 43,051 43,051 43,051 43,

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,

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,

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,

Interest expense 128,509 112,921 96,040 77,757 57,957 36,514 13,291 - - Earnings Before Tax 196,222 1,157,858 1,856,153 2,134,433 2,439,971 2,775,312 3,143,233 3,534,901 3,950,099 4,405,

Tax 12,217 151,178 255,923 297,665 343,495 393,797 448,985 507,735 570,015 638,

NET PROFIT/(LOSS) AFTER TAX 184,005 1,006,679 1,600,230 1,836,768 2,096,476 2,381,516 2,694,248 3,027,166 3,380,085 3,767,

Balance brought forward 184,005 1,190,685 2,790,915 4,627,683 6,724,159 9,105,675 11,799,923 14,827,088 18,207,

Total profit available for appropriation 184,005 1,190,685 2,790,915 4,627,683 6,724,159 9,105,675 11,799,923 14,827,088 18,207,173 21,974,

Dividend - - - - - - - - -

Balance carried forward 184,005 1,190,685 2,790,915 4,627,683 6,724,159 9,105,675 11,799,923 14,827,088 18,207,173 21,974,

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1144..22 PPrroojjeecctt BBaallaannccee SShheeeett

Statement Summaries SMEDA

Balance Sheet

Rs. in actuals

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Assets

Current assets

Cash & Bank 200,000 272,668 1,130,247 2,510,206 4,095,991 5,903,378 7,950,300 10,259,709 13,175,232 16,410,712 20,640,431

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 345,592 483,958 1,376,511 2,800,798 4,429,357 6,282,689 8,383,074 10,754,896 13,743,514 17,064,866 20,737,588

Fixed assets

Land - - - - - - - - - - -

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 assets

Pre-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 1,864,121 2,603,322 3,874,258 5,349,466 7,049,446 8,996,480 11,214,951 14,050,217 17,218,218 20,737,588

Liabilities & Shareholders' Equity

Current 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 liabilities

Lease payable - - - - - - - - - - -

Deferred tax - (23,428) (100,621) (213,129) (339,951) (482,450) (642,116) (820,578) (1,019,023) (1,238,628) (1,481,406)

Long term debt 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 1,479,964 1,199,380 866,600 501,223 100,369 (339,094) (820,578) (1,019,023) (1,238,628) (1,481,406)

Shareholders' equity

Paid-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 - 184,005 1,190,685 2,790,915 4,627,683 6,724,159 9,105,675 11,799,923 14,827,088 18,207,173 21,974,387

Total Equity 187,911 371,916 1,378,595 2,978,825 4,815,594 6,912,069 9,293,585 11,987,833 15,014,999 18,395,084 22,162,298

TOTAL CAPITAL AND LIABILITI 1,879,106 1,864,121 2,603,322 3,874,258 5,349,466 7,049,446 8,996,480 11,214,951 14,050,217 17,218,218 20,737,588

- - - - - - - - - - -

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

Statement Summaries SMED

Cash Flow Statement

Rs. in actu

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 1

Operating activities

Net profit - 184,005 1,006,679 1,600,230 1,836,768 2,096,476 2,381,516 2,694,248 3,027,166 3,380,085 3,767,2

Add: depreciation expense - 110,300 110,300 110,300 110,300 110,300 110,300 110,300 110,300 110,300 110,3

amortization expense - 43,051 43,051 43,051 43,051 43,051 43,051 43,051 43,051 43,051 43,0Deferred income tax - (23,428) (77,193) (112,508) (126,822) (142,499) (159,666) (178,462) (198,445) (219,605) (242,7

Accounts receivable - (23,022) (9,065) (14,605) (8,151) (5,484) (6,033) (6,636) (7,300) (8,029) (8,8

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) 271,0

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 (5,0

Other liabilities - - - - - - - - - -

Cash provided by operations (20,592) 272,971 1,074,720 1,615,356 1,840,977 2,084,043 2,346,851 2,634,575 2,939,882 3,262,274 3,934,9

Financing activities

Change 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 - 125,000 137,500 151,250 166,375 183,013 201,314 221,445 243,590 267,949 294,7

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) financing 1,754,106 (200,303) (217,141) (235,397) (255,192) (276,656) (299,929) (325,166) (24,359) (26,795) 294,7

Investing activities

Capital expenditure (1,533,514) - - - - - - - - -

Acquisitions - - - - - - - - - -

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

NET CASH 200,000 72,668 857,579 1,379,959 1,585,785 1,807,387 2,046,922 2,309,409 2,915,523 3,235,479 4,229,7

Cash balance brought forward 200,000 272,668 1,130,247 2,510,206 4,095,991 5,903,378 7,950,300 10,259,709 13,175,232 16,410,7

Cash available for appropriation 200,000 272,668 1,130,247 2,510,206 4,095,991 5,903,378 7,950,300 10,259,709 13,175,232 16,410,712 20,640,4

Dividend - - - - - - - - - -

Cash carried forward 200,000 272,668 1,130,247 2,510,206 4,095,991 5,903,378 7,950,300 10,259,709 13,175,232 16,410,712 20,640,4

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1144..44 UUsseeffuull PPrroojjeecctt MMaannaaggeemmeenntt TTiippss

Technology

List of Machinery & Equipment (As per Section 12.5)

Required spare parts & consumables: Suppliers credit agreements andavailability as per schedule of maintenance be ensured before start of

operations.

Energy Requirement: Should not be overestimated or installed in excess and

alternate source of energy for critical operations to be arranged in advance.

Machinery Suppliers: Should be asked for training and after sales services

under the contract with the machinery suppliers.

Quality Assurance Equipment & Standards: Products quality standards/check

need to be defined on the packaging, to improve credibility.Marketing

Product Development & Packaging: Experts may be engaged for

product/service and packaging design & development.

Ads & P.O.S. Promotion: Business promotion and dissemination through

banners and launch events is highly recommended. Product brochures from

good quality service providers.

Sales & Distribution Network: Expert's advise 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.

Human Resources

Lis t of Human Resource (As per Section 12.8)

Adequacy & Competencies: Skilled and experienced staff to be considered an

investment even to the extent of offering share in business profit.

Performance Based Remuneration: Cost should be focused through

performance measurement and performance based compensation.

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Training & Skill Development: Training and skill development of employees

and exposure of best practices. Least cost options for Training and Skill

Development (T&SD) may be linked with compensation benefits and awards.

1144..55 UUsseeffuull LLiinnkkss

Prime Ministers Office

www.pmo.gov.pk

Small & Medium Enterprises Development Authority (SMEDA)

www.smeda.org.pk

National Bank of Pakistan (SBP)

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 Pakhtoonkhwa

www.khyberpakhtunkhwa.gov.pk

Government of Balochistan

www.balochistan.gov.pk

Government of Gilgi t Baltistan

www.gilgitbaltistan.gov.pk

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Government of Azad Jammu & Kashmir

www.ajk.gov.pk

Trade Development Authority of Pakistan (TDAP)

www.tdap.gov.pk

Securi ty 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

Pakistan Institute of Fashion Design (PIFD)

www.pifd.edu.pk

Pakistan Fashion Design Council (PFDC)

www.pfdc.org

1155 KKEEYYAASSSSUUMMPPTTIIOONNSS

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 20 - 35

Sale price growth rate 10%Production capacity utilization - Year 1 40%

Production capacity utilization growth rate 25%

Maximum capacity utilization 75%

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Financial Assumptions

Description 90 %

Equity 10 %

Debt 90%

Debt Tenure (Years) 7Interest Rate / annum 8%

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 %

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September 2013

Documents

cut flower farm gladiolus marigold statice and chrysanthemum.pdf