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Pre-Feasibility Study

Prime Ministers Small Business Loan Scheme


Footwear Retail Outlet (Ladies and Children)

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, Egerton Road,
Lahore
Tel 92 42 111 111 456, Fax 92 42 36304926-7
helpdesk@smeda.org.pk
REGIONAL OFFICE
PUNJAB

REGIONAL OFFICE
SINDH

REGIONAL OFFICE
KPK

REGIONAL OFFICE
BALOCHISTAN

3rd Floor, Building No. 3,


Aiwan e Iqbal, Egerton Road
Lahore,
Tel: (042) 111-111-456
Fax: (042)6304926-7
helpdesk.punjab@smeda.org.pk

5TH Floor, Bahria


Complex II, M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 5610572
helpdesk-khi@smeda.org.pk

Ground Floor
State Life Building
The Mall, Peshawar.
Tel: (091) 9213046-47
Fax: (091) 286908
helpdesk-pew@smeda.org.pk

Bungalow No. 15-A


Chaman Housing Scheme
Airport Road, Quetta.
Tel: (081) 831623, 831702
Fax: (081) 831922
helpdesk-qta@smeda.org.pk

September 2013

Pre-Feasibility Study

Footwear Retail Outlet (Ladies and Children)

Table of Contents

1 DISCLAIMER ......................................................................................................................................... 2
2 PURPOSE OF THE DOCUMENT ........................................................................................................ 3
3 INTRODUCTION TO SMEDA ............................................................................................................. 3
4 INTRODUCTION TO SCHEME .......................................................................................................... 4
5 EXECUTIVE SUMMARY ..................................................................................................................... 4
6 BRIEF DESCRITION OF PROJECT & PRODUCT .......................................................................... 4
7 CRITICAL FACTORS ........................................................................................................................... 5
8 INSTALLED & OPERATIONAL CAPACITIES ................................................................................ 5
9 GEOGRAPHICAL POTENTIAL FOR INVESTMENT .................................................................... 5
10 POTENTIAL TARGET MARKETS / CITIES .................................................................................... 5
11 PROJECT COST SUMMARY .............................................................................................................. 6
11.1
11.2
11.3
11.4
11.5
11.6
11.7
11.8
11.9
11.10

PROJECT ECONOMICS ................................................................................................................... 6


PROJECT FINANCING .................................................................................................................... 7
PROJECT COST ............................................................................................................................. 7
SPACE REQUIREMENT .................................................................................................................. 8
MACHINERY AND EQUIPMENT...................................................................................................... 8
OFFICE EQUIPMENT...................................................................................................................... 8
RAW MATERIAL REQUIREMENTS ................................................................................................. 8
HUMAN RESOURCE REQUIREMENT .............................................................................................. 9
REVENUE GENERATION................................................................................................................ 9
OTHER COSTS .............................................................................................................................. 9

12 CONTACT DETAILS OF EXPERTS & CONSULTANTS .............................................................. 11


13 ANNEXURE .......................................................................................................................................... 12
13.1
13.2
13.3

INCOME STATEMENT .................................................................................................................. 12


CASH FLOW STATEMENT ........................................................................................................... 13
BALANCE SHEET ........................................................................................................................ 14

14 USEFUL LINKS .................................................................................................................................... 15


15 OPERATING AND FINANCIAL ASSUMPTIONS .......................................................................... 16

Pre-Feasibility Study

Footwear Retail Outlet (Ladies and Children)

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

Pre-Feasibility Study

Footwear Retail Outlet (Ladies and Children)

2 PURPOSE OF THE DOCUMENT


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 Footwear Retail
Outlet 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.

3 INTRODUCTION TO SMEDA
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.

Pre-Feasibility Study

Footwear Retail Outlet (Ladies and Children)

4 INTRODUCTION TO SCHEME
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 upto 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).

5 EXECUTIVE SUMMARY
This SME venture entails setting up Footwear Retail outlet in urban centres of
Pakistan. The outlet is proposed to cater the demand of ladies and childrens
footwear, belonging to middle to upper middle income groups.
The demand for footwear is constantly rising and there are a number of local
manufacturers producing quality footwear. The consumers are becoming
increasingly quality conscious and seek products offering value for money. This
trend has led to strong growth in retail footwear outlets around Pakistan.
The focus of the business would be to provide casual, semi-formal and formal,
quality footwear at affordable prices. The shoes are assumed to be purchased
from different subcontract manufacturers and sold at the retail outlet.
The total project cost for setting up footwear retail outlet is estimated at Rs. 2.16
million out of which Rs. 0.93 million is capital cost and Rs. 1.23 million as working
capital. The project is proposed to be financed through 90% debt and 10%
equity. The project NPV is calculated to be around Rs 4.79 million, with an IRR of
49% and payback period of 2.83 years. This business will provide employment
opportunity to 7 individuals including the owner manager. The outlet will remain
operational for 12 hours per day, and sell 16,000 pairs of shoes in first year. The
legal business status of this project is proposed as Sole Proprietorship

6 BRIEF DESCRITION OF PROJECT & PRODUCT


This document provides information for setting up a Footwear Retail Outlet
selling ladies and childrens shoes. It involves purchase of ladies and childrens
shoes from any local manufacturer and selling it through retail outlet opened in
rented premises, under a brand name in any of the urban centres of Pakistan.
The retail outlet will have covered area 900 sqft. Shoes of requisite qualities and

Pre-Feasibility Study

Footwear Retail Outlet (Ladies and Children)

quantities will be sourced from the wholesale market and small shoe
manufactures.
The product mix would include ladies' and children's shoes in all the sizes. This
product mix is divided into further categories: casual, semi-formal and formal
footwear which include pumps, heels, coat shoes, sandals, slippers etc. made of
leather and other materials. The three categories among ladies' and children's
shoes are further classified by three different proposed selling prices, ranging
between Rs.700 Rs. 1,050 for ladies shoes and Rs. 350 Rs. 630 for
childrens shoes.

7 CRITICAL FACTORS
Following are the factors critical for the success of the footwear retail business.
Develop strong linkages with suppliers for sourcing quality product at
competitive prices.
Efficient management of stock to keep inventory cost at the minimum.
Selection of a central location keeping in mind the target market.
Remain updated of the market trends including latest fashions and designs.
Induction of trained sales personnel for efficient customer handling.
Strong competition with several shops opened in same commercial area.
Very frequent changes in designs in shoe brands in the market.

8 INSTALLED & OPERATIONAL CAPACITIES


Since the proposed venture is a trading business, there are no installed
capacities per se. The turnover will depend on the seasonal sales and ability of
the venture to attract customers through quality and price incentives. Experience
and efficient sales staff also plays a critical role in determining the sales revenue
of the business. The business is expected to have capacity to sell 24,000 shoes
in one year.
The proposed project assumes to sell around 16,000 pairs in the first year of
operation at 70% capacity. These turnover estimates are based on expert
opinion and market sources. The outlet will operate for 12 hours daily.

9 GEOGRAPHICAL POTENTIAL FOR INVESTMENT


It is important to choose a location where customers have an easy access to the
shoe store, therefore shopping malls, busy markets or similar high traffic areas
would be preferable location options.

10 POTENTIAL TARGET MARKETS / CITIES


Lahore is the footwear centre of the country, followed by Karachi, Faisalabad,
Hyderabad, Peshawar, Sahiwal, Gujranwala and Rawalpindi. Most of the shoe
5

Pre-Feasibility Study

Footwear Retail Outlet (Ladies and Children)

manufacturing units and numerous shoe stores are established in these cities.
Therefore, any of the above cities would be a profitable option for setting up a
footwear retail outlet.

11 PROJECT COST SUMMARY


A detailed financial model has been developed to analyze the commercial
viability of Footwear Retail Outlet 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
11.1 Project Economics
A target sale of 16,000 shoes pairs would be achieved by footwear retail outlet in
first year.
The following table shows internal rates of return and payback period.
Table 1: Project Economics

Description
Internal Rate of Return (IRR)
Payback Period (yrs)
Net Present Value (NPV)

Details
49%
2.83
Rs. 4,797,019

Returns on the scheme and its profitability are highly dependent on the efficiency
of the entrepreneur in selecting appropriate business location, hiring trained
sales persons and maintaining quality in terms of shoe designs and customer
services.

Pre-Feasibility Study

Footwear Retail Outlet (Ladies and Children)

11.2 Project Financing


Following table provides details of the equity required and variables related to
bank loan:
Table 2: Project Financing

Description
Total Equity (10%)
Bank Loan (90%.)
Markup to the Borrower (%age/annum)
Tenure of the Loan (Years)

Details
Rs.216,506
Rs.1,948,557
8%
7

11.3 Project Cost


Following requirements have been identified for operations of the proposed
business.
The furniture and fixture is required for display of shoes and storing of stock and
while the office equipment including computers, printer and air conditioner is
necessary for routine business operations and giving a professional outlook to
attract customers and achieve customer satisfaction.
Table 3: Capital Investment for the Project

Capital Investment
Furniture & fixtures
Office equipment
Pre-operating costs
Total Capital Costs
Working Capital
Repair material inventory
Opening inventory
Upfront building rent
Cash
Total Working Capital
Total Investment

Rs.
809,725
103,500
21,758
934,983
Rs.
5,241
546,840
378,000
300,000
1,230,081
2,165,064

Pre-Feasibility Study

Footwear Retail Outlet (Ladies and Children)

11.4 Space Requirement


The area has been calculated on the basis of space requirement for display area,
store, management space and washroom. Following table shows calculations for
project space requirement.
Table 4: Space Requirement

Space Requirement (in ft.)

Rs/Sqft

Shop

70

Sqft
900

Amount
(Rs.)
63,000

11.5 Machinery and Equipment


This particular project does not entail machinery and equipment for production.
11.6 Office Equipment
The computer and printer are required for routine office operation and record
maintenance similarly barcode reader and inventory management software is
necessary for keeping track of inventory and ease of reference of customer and
owner both.
Table 5: Office Equipment Costs
Description
Quantity
Cost
Computers
1
20,000
UPS
1
7,500
Computer printer (s)
1
10,000
Bar code reader
1
15,000
Inventory Management/Acc
1
20,000
software
Security camera
1
30,000
Telephones
2
1,000
Total Office Equipment

Amount
20,000
7,500
10,000
15,000
20,000
30,000
1,000
103,500

Rental Vehicle will be used as a mode of transportation of goods. Hence no


vehicle is proposed for this project.
11.7 Raw Material Requirements
The shoe will be purchased from the manufacturers and wholesalers and the
purchase price per unit is depicted in the table below.

Pre-Feasibility Study

Footwear Retail Outlet (Ladies and Children)

Table 6: Cost of Material


Purchase price per unit year 1 - Ladies shoes
Qty %age
Pair A
20%
Pair B
50%
Pair C
30%
Purchase price per unit in year 1 - Children
shoe
Pair A
Pair B
Pair C

Price (Rs)
750
625
500

20%
50%
30%

450
350
250

11.8 Human Resource Requirement


Table 7: Human Resource Requirement
Description
No. of Employees
Store manager
1
Salesmen
4
Helper
2
Total Staff
7

Salary per month


17,000
10,000
10,000

The table above provides details of human resource required in 1st year to run
this project. Salaries of all employees are estimated to increase at 10% annually.
11.9 Revenue Generation
Table 8: Revenue Generation

Product
Ladies Shoes
Pair A
Pair B
Pair C
Children Shoes
Pair A
Pair B
Pair C
Total

Unit

Qty

Sales Price
(Rs./Unit)

First Year
Sales
Revenue
(Rs)

No.
No.
No.

2,575
6,440
3,864

1,050
875
700

2,704,800
5,635,000
2,704,800

No.
No.
No.

644
1,610
966

630
490
350

405,720
788,900
338,100
12,577,320

11.10 Other Costs


Following table shows other cost such as Furniture, interior designing and
electrical equipments etc.

Pre-Feasibility Study

Description

Footwear Retail Outlet (Ladies and Children)

Table 9: Other Costs


Quantity /
Cost / Rate
Area

Furniture
Executive Chairs
Counter
Seating for customers
Floor equipment (baskets, mirrors etc)
Interior Designing
Shoe Racks with glass material
False ceiling, front door & paint
Flooring 900 sq ft @ 167
Electrical equipment
Air conditioners
(2 ton split)
Generator (5 KVA)
Electric wiring & lighting
Bracket fans
Shoe Store
Shoe Racks with iron & Wood
Lighting & Wiring
Wooden Stools
Admin Office
Desks and Chairs
Total Furniture & Fixtures

10

Amount / Other

1
1
8
1

7,000
20,000
1,500
10,000

7,000
20,000
12,000
10,000

315
450
450

515
500
167

162,225
225,000
75,000

60,000

60,000

70,000

1,800

70,000
60,000
7,200

280

300

1,000

13,300

84,000
30,000
4,000
13,300
809,725

Pre-Feasibility Study

Footwear Retail Outlet (Ladies and Children)

12 CONTACT DETAILS OF EXPERTS & CONSULTANTS

Principal
Govt. Institute of Leather
Technology, Gujranwala
P.O Anwar Industry G.T.Road,
Gujranwala
Phone, 055 9230056

Principal
Footwear Training Institute
Plot # 24, Phase 5, Hayatabad,
Peshawar
091 9217244

Principal

Principal
Pakistan School of Fashion Design
51-J/3, Johar Town, Lahore
TEL: +92 42 3531 5401 08

National College of Arts


4- Shahrah-E-Qaid-E-Azam, Lahore
Tel: +92 42 99210599, 99210601

11

Pre-Feasibility Study

Footwear Retail Outlet

13 ANNEXURE
13.1 Income Statement
Income Statement
Revenue

Year 1
12,577,320

Year 2
15,424,794

Year 3
18,101,576

Year 4
21,159,466

Year 5
24,647,919

Year 6
28,622,467

Year 7
31,553,911

Year 8
34,709,302

Year 9
38,180,232

Year 10
41,998,255

Cost of sales
Cost of purchasing shoes
Direct labor
Fixing and repair material
Direct Electricity
Transport rental expense
Generator expense
Total cost of sales
Gross Profit

9,374,400
720,000
125,773
438,696
234,360
147,150
11,040,379
1,536,941

11,048,400
790,100
154,248
482,566
276,210
161,865
12,913,389
2,511,405

12,963,456
867,025
181,016
530,822
324,086
178,052
15,044,457
3,057,118

15,151,039
951,440
211,595
583,904
378,776
195,857
17,472,611
3,686,855

17,646,504
1,044,074
246,479
642,295
441,163
215,442
20,235,957
4,411,961

20,489,552
1,145,726
286,225
706,524
512,239
236,987
23,377,253
5,245,214

22,538,508
1,257,276
315,539
777,177
563,463
260,685
25,712,647
5,841,263

24,792,358
1,379,686
347,093
854,894
619,809
286,754
28,280,595
6,428,707

27,271,594
1,514,014
381,802
940,384
681,790
315,429
31,105,014
7,075,218

29,998,754
1,661,421
419,983
1,034,422
749,969
346,972
34,211,520
7,786,735

204,000
377,320
126,000
36,000
20,400
180,000
91,323
4,352
1,039,394
497,547

223,862
462,744
138,600
39,600
22,386
189,000
91,323
4,352
1,171,866
1,339,539

245,657
543,047
152,460
43,560
24,566
198,450
91,323
4,352
1,303,414
1,753,704

269,575
634,784
167,706
47,916
26,957
208,373
91,323
4,352
1,450,985
2,235,870

295,821
739,438
184,477
52,708
29,582
218,791
91,323
4,352
1,616,490
2,795,471

324,622
858,674
202,924
57,978
32,462
229,731
91,323
1,797,715
3,447,499

356,228
946,617
223,217
63,776
35,623
241,217
91,323
1,958,001
3,883,262

390,911
1,041,279
245,538
70,154
39,091
253,278
91,323
2,131,574
4,297,133

428,971
1,145,407
270,092
77,169
42,897
265,942
91,323
2,321,801
4,753,418

470,736
1,259,948
297,101
84,886
47,074
279,239
91,323
2,530,306
5,256,429

Earnings Before Interest & Taxes

497,547

1,339,539

1,753,704

2,235,870

2,795,471

3,447,499

3,883,262

4,297,133

4,753,418

5,256,429

Interest expense on long term debt (Project Loan)


Subtotal
Earnings Before Tax

155,885
155,885
341,662

138,414
138,414
1,201,125

119,546
119,546
1,634,158

99,169
99,169
2,136,701

77,161
77,161
2,718,310

53,393
53,393
3,394,106

27,723
27,723
3,855,539

4,297,133

4,753,418

5,256,429

Tax
NET PROFIT/(LOSS) AFTER TAX

341,662

120,113
1,081,013

245,124
1,389,034

320,505
1,816,196

543,662
2,174,648

678,821
2,715,285

771,108
3,084,431

1,074,283
3,222,850

1,188,354
3,565,063

1,314,107
3,942,322

Balance brought forward


Total profit available for appropriation
Balance carried forward

341,662
341,662

341,662
1,422,675
1,422,675

1,422,675
2,811,709
2,811,709

2,811,709
4,627,905
4,627,905

4,627,905
6,802,553
6,802,553

6,802,553
9,517,838
9,517,838

9,517,838
12,602,270
12,602,270

12,602,270
15,825,120
15,825,120

15,825,120
19,390,183
19,390,183

19,390,183
23,332,504
23,332,504

General administration & selling expenses


Administration expense
Sales commission
Building rental expense
Communications expense (phone, fax, mail, internet, etc.)
Office expenses (stationary, entertainment, janitorial services, etc.)
Promotional expense
Depreciation expense
Amortization of pre-operating costs
Subtotal
Operating Income

12
September 2013

Pre-Feasibility Study

Footwear Retail Outlet

13.2 Cash Flow Statement


Cash Flow Statement
Year 0
Operating activities
Net profit
Add: depreciation expense
amortization of pre-operating costs
Deferred income tax
Closing stock
Equipment inventory
Opening inventory
Pre-paid building rent
Accounts payable
Cash provided by operations
Financing activities
Project Loan - principal repayment
Additions to Project Loan
Issuance of shares
Cash provided by / (used for) financing activities
Investing activities
Capital expenditure
Acquisitions
Cash (used for) / provided by investing activities
NET CASH
Cash balance brought forward
Cash available for appropriation
Dividend
Cash balance
Cash carried forward

(5,241)
(546,840)
(378,000)
(930,081)

1,948,557
216,506
2,165,064

(934,983)
(934,983)
300,000

300,000
300,000
300,000

Year 1

Year 2

Year 3

Year 5

Year 6

Year 7

341,662
91,323
4,352
(140,082)
(480,016)
(1,508)
(129,875)
(37,800)
837,011
485,067

1,081,013
91,323
4,352
(372,349)
(59,540)
(1,567)
(156,998)
(41,580)
152,962
697,615

1,389,034
91,323
4,352
(424,881)
(88,932)
(1,891)
(189,409)
(45,738)
175,325
909,182

1,816,196
91,323
4,352
(555,542)
(101,325)
(2,277)
(228,096)
(50,312)
201,249
1,175,567

2,174,648
91,323
4,352
(570,845)
(115,307)
(2,738)
(274,225)
(55,343)
230,738
1,482,602

2,715,285
91,323
(712,762)
(131,072)
(2,398)
(236,444)
(60,877)
256,573
1,919,627

3,084,431
91,323
(809,663)
(95,167)
(2,731)
(273,092)
(66,965)
193,487
2,121,622

(218,379)
(218,379)

(235,850)
(235,850)

(254,718)
(254,718)

(275,095)
(275,095)

(297,103)
(297,103)

(320,871)
(320,871)

(346,541)
(346,541)

Year 8
3,222,850
91,323
(687,541)
(106,998)
(3,154)
(315,422)
(73,662)
214,026
2,341,422

Year 9
3,565,063
91,323
(760,547)
(117,684)
(3,643)
(364,312)
(81,028)
236,869
2,566,041

Year 10
3,942,322
91,323
(841,029)
(129,438)
27,147
2,714,712
891,304
1,930
6,698,271

266,688

461,765

654,464

900,472

1,185,499

1,598,756

1,775,081

2,341,422

2,566,041

6,698,271

300,000
566,688
566,688
566,688

566,688
1,028,453
1,028,453
1,028,453

1,028,453
1,682,918
1,682,918
1,682,918

1,682,918
2,583,390
2,583,390
2,583,390

2,583,390
3,768,889
3,768,889
3,768,889

3,768,889
5,367,645
5,367,645
5,367,645

5,367,645
7,142,727
7,142,727
7,142,727

7,142,727
9,484,149
9,484,149
9,484,149

9,484,149
12,050,189
12,050,189
12,050,189

12,050,189
18,748,460
18,748,460
18,748,460

13
September 2013

Year 4

Pre-Feasibility Study

Footwear Retail Outlet

13.3 Balance Sheet


Balance Sheet
Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

300,000
5,241
546,840
378,000
1,230,081

566,688
480,016
6,748
676,715
415,800
2,145,967

1,028,453
539,557
8,315
833,712
457,380
2,867,418

1,682,918
628,489
10,206
1,023,121
503,118
3,847,852

2,583,390
729,814
12,483
1,251,217
553,430
5,130,334

3,768,889
845,121
15,221
1,525,442
608,773
6,763,446

5,367,645
976,193
17,619
1,761,886
669,650
8,792,993

7,142,727
1,071,360
20,350
2,034,978
736,615
11,006,030

9,484,149
1,178,358
23,504
2,350,400
810,277
13,846,687

12,050,189
1,296,042
27,147
2,714,712
891,304
16,979,394

18,748,460
1,425,480
20,173,940

809,725
103,500
913,225

728,753
93,150
821,903

647,780
82,800
730,580

566,808
72,450
639,258

485,835
62,100
547,935

404,863
51,750
456,613

323,890
41,400
365,290

242,918
31,050
273,968

161,945
20,700
182,645

80,973
10,350
91,323

21,758
21,758
2,165,064

17,406
17,406
2,985,276

13,055
13,055
3,611,052

8,703
8,703
4,495,813

4,352
4,352
5,682,621

7,220,059

9,158,283

11,279,998

14,029,332

17,070,717

20,173,940

837,011
837,011

989,973
989,973

1,165,299
1,165,299

1,366,548
1,366,548

1,597,286
1,597,286

1,853,859
1,853,859

2,047,346
2,047,346

2,261,372
2,261,372

2,498,240
2,498,240

2,500,170
2,500,170

(140,082)
1,730,178
1,590,096

(512,430)
1,494,328
981,898

(937,311)
1,239,610
302,299

(1,492,854)
964,515
(528,339)

(2,063,699)
667,412
(1,396,287)

(2,776,461)
346,541
(2,429,920)

(3,586,124)
(3,586,124)

(4,273,666)
(4,273,666)

(5,034,213)
(5,034,213)

(5,875,241)
(5,875,241)

216,506
341,662
558,169
2,985,276

216,506
1,422,675
1,639,182
3,611,052

216,506
2,811,709
3,028,216
4,495,813

216,506
4,627,905
4,844,412
5,682,621

216,506
6,802,553
7,019,060
7,220,059

216,506
9,517,838
9,734,345
9,158,283

216,506
12,602,270
12,818,776
11,279,998

216,506
15,825,120
16,041,626
14,029,332

216,506
19,390,183
19,606,689
17,070,717

216,506
23,332,504
23,549,011
20,173,940

Assets
Current assets
Cash & Bank
Closing stock
Equipment spare part inventory
Opening inventory
Pre-paid building rent
Total Current Assets
Fixed assets
Furniture & fixtures
Office equipment
Total Fixed Assets
Intangible assets
Pre-operation costs
Legal, licensing, & training costs
Total Intangible Assets
TOTAL ASSETS
Liabilities & Shareholders' Equity
Current liabilities
Accounts payable
Total Current Liabilities
Other liabilities
Deferred tax
Long term debt (Project Loan)
Long term debt (Working Capital Loan)
Total Long Term Liabilities
Shareholders' equity
Paid-up capital
Retained earnings
Total Equity
TOTAL CAPITAL AND LIABILITIES

1,948,557
1,948,557

216,506
216,506
2,165,064

14
September 2013

Pre-Feasibility Study
Footwear Retail Outlet

14 USEFUL LINKS
Prime Ministers Office, www.pmo.gov.pk
Small and Medium Enterprise Development Authority, www.smeda.org.pk
National Bank of Pakistan (NBP), www.nbp.com.pk
First Women Bank Limited (FWBL), www.fwbl.com.pk
Government of Pakistan, www.pakistan.gov.pk
Ministry of Industries & Production, www.moip.gov.pk
Ministry of Education, Training & Standards in Higher Education,
http://moptt.gov.pk
Government of Punjab, www.punjab.gov.pk
Government of Sindh, www.sindh.gov.pk
Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk
Government of Balochistan, www.balochistan.gov.pk
Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk
Government of Azad Jamu Kashmir, www.ajk.gov.pk
Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk
Security 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

15
September 2013

Pre-Feasibility Study
Footwear Retail Outlet

15 OPERATING AND FINANCIAL ASSUMPTIONS


Table 10: Capacity Utilization Assumptions

Starting Capacity Utilization


Annual Growth Rate
Maximum Capacity Utilization for the project

45%
5%
90%

Table 11: Economy-Related Assumptions

Electricity price growth rate


Wage growth rate

10%
10%

Table 12: Cash Flow Assumptions

Accounts Receivable cycle (in days)


Accounts payable cycle (in days)
Raw material inventory (in days)

Cash Sales
60
15

Table 13: Financial Assumptions

Project life (Years)


Debt
Equity
Interest rate on long-term debt
Debt tenure (Years)

10
90%
10%
8%
7

Table 14: Depreciation Rate Assumptions

Office Equipment
Furniture & Fixtures

33%
10%
Table 15: Revenue Related Assumptions

Sale price growth rate


Purchase price growth rate
Percentage of Ladies shoes
Percentage of children shoes

10%
10%
80%
20%

16
September 2013