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Pre-Feasibility Study

DEPARTMENTAL STORE

Small and Medium Enterprises Development Authority
Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk

HEAD OFFICE
4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road,
Lahore
Tel (92 42) 111 111 456, Fax: (92 42) 36304926-7
helpdesk@smeda.org.pk

REGIONAL OFFICE
PUNJAB
3rd Floor, Building No. 3, Aiwane-Iqbal Complex,
Egerton Road,
Lahore.
Tel: (042) 111 111 456,
Fax: (042) 36304926-7
helpdesk.punjab@smeda.org.pk

REGIONAL OFFICE
SINDH
5TH Floor, Bahria Complex II,
M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 35610572
helpdesk-khi@smeda.org.pk

REGIONAL OFFICE
KHYBER PAKTUNKHWA
Ground Floor
State Life Building The Mall,
Peshawar.
Tel: (091)111 111 456,92130467
Fax: (091) 5286908
helpdesk-pew@smeda.org.pk

June 2015

REGIONAL OFFICE
BALOCHISTAN
Bungalow No. 15-A Chamn
Housing Scheme Airport Road,
Quetta.
Tel: (081) 2831623, 2831702
Fax: (081) 2831922
helpdesk-qta@smeda.org.pk

Pre-Feasibility Study

Departmental Store

TABLE OF CONTENTS
1

DISCLAIMER................................................................................................................................. 3

2

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

3

Introduction to SMEDA ................................................................................................................. 4

4

Purpose of the Document............................................................................................................. 5

5

Brief Descripton Of Project ........................................................................................................... 5
5.1

Project Brief ........................................................................................................................... 5

5.2

Installed & Operational Capacities ....................................................................................... 6

6

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

7

Geographical Potential for Investment ........................................................................................ 8

8

Potential Target Markets .............................................................................................................. 8

9

Project Cost Summary .................................................................................................................. 8
9.1

Project Economics ................................................................................................................. 8

9.2

Project Financing ................................................................................................................... 9

9.3

Project Cost ........................................................................................................................... 9

9.4

Machinery & Equipment Requirements ............................................................................. 10

9.5

Office Equipment Requirements ........................................................................................ 10

9.6

Furniture and Fixture Requirements .................................................................................. 10

9.7

Space Requirement............................................................................................................. 11

9.8

Raw Material Requirements ............................................................................................... 11

9.9

Human Resource Requirement.......................................................................................... 12

9.10

Other Costs .......................................................................................................................... 12

9.11

Revenue Generation ........................................................................................................... 12

10 contact details ............................................................................................................................. 13
10.1

Machinery and Equipment Suppliers ................................................................................. 13

11 Useful links .................................................................................................................................. 14
12 Annexures.................................................................................................................................... 15
12.1

Income Statement ............................................................................................................... 15

12.2

Balance Sheet ..................................................................................................................... 16

12.3

Cash Flow Statement .......................................................................................................... 17

13 Key Assumptions ........................................................................................................................ 18
June 2015

1

...................2 Economy Related Assumptions ............... 19 June 2015 2 ..........1 Operating Assumptions......................................................................................................................................................................................................................................4 Financial Assumptions . 18 13........................ 18 13........Pre-Feasibility Study Departmental Store 13......................... 18 13......................................................................3 Expense Assumptions....

pk DOCUMENT CONTROL Document No. The information has been provided on as is where is basis without any warranties or assertions as to the correctness or soundness thereof. PREF-NO. including taking professional advice from a qualified consultant / technical expert before taking any decision to act upon the information. however. it is based upon certain assumptions.smeda. Although. SMEDA.pk June 2015 3 . which may differ from case to case. the material included in this document is based on data / information gathered from various reliable sources. 76 Revision No. For more information on services offered by 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. Although.org. and the actual results may differ substantially from the presented information. 3 Prepared by SMEDA-Punjab Revision Date June 2015 For Information Provincial Chief Punjab janjua@smeda. The contained information does not preclude any further professional advice.Pre-Feasibility Study Departmental Store 1 DISCLAIMER This information memorandum is to introduce the subject matter and provide a general idea and information on the said matter. please contact our website: www.org. due care and diligence has been taken to compile this document. 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. the contained information may vary due to any change in any of the concerned factors.

respectively. it has been assumed that the proposed “Departmental Store” is opened in an area where there are approximately 3. Keeping in view the consumer’s needs and requirements. and thousands of shopping stores in almost all cities of Pakistan. Spending time and money wisely in the process of site selection is of primary importance. and is recommended to be started at a rented premise. The total cost of establishing a Departmental Store in developing areas is estimated at Rs. The same concept has been used by Canteen Department Store (CSD). Rs. Macro. ft. With a mission "to assist in employment generation and value addition to the national income. The structure of Pakistan’s economy has changed from agricultural to service base.300.06 million including Rs. large investment has been made in these stores by few multinational companies. The Departmental Store is organized into departments offering a variety of retail merchandize under one roof. etc. 7. SMEDA has carried out ‘sectoral research’ to identify policy. 4.22 years. Net Present Value and Payback Period for proposed Departmental Store are 32%. strategic initiatives and institutional collaboration and networking initiatives. 12. Metro.120 sq. 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). while the services sector accounts for 54% of the GDP. In Pakistan the concept of Departmental Store has gained popularity in late eighties after the emergence of Utility Stores by the government. through development of the SME sector. scale and competitiveness of SMEs". Departmental Store is a retail establishment which specializes in satisfying wide range of consumer's personal and residential durable product needs and at the same time offering the consumer a multiple choice of merchandise lines. In this pre-feasibility study. respectively. business development services.000 households. HKB.Pre-Feasibility Study Departmental Store 2 EXECUTIVE SUMMARY Departmental Stores are emerging as one of the good business ventures in Pakistan as it provides all the basic merchandise under one roof. Al-Fateh. in all product categories. i. The proposed “Departmental Store” requires an area of approx 3.e. Hyper Star. Location of the store is an important factor with any retail organization.24 million as working capital.024 and 5. at variable prices. Agriculture and industry sector now account for about 22% and 24% of GDP. by helping increase the number. Cosmo Cash & Carry. June 2015 4 . access to finance.83 Million capital cost and Rs. Projected IRR. 12.

Pre-Feasibility Study Departmental Store Preparation and dissemination of prefeasibility studies in key areas of investment has been a successful hallmark of SME facilitation by SMEDA. The project pre-feasibility may form the basis of an important investment decision and in order to serve this objective. 4 PURPOSE OF THE DOCUMENT The objective of the pre-feasibility study is primarily to facilitate potential entrepreneurs in project identification for investment. ft. which form basis of any investment decision. and certain industrial norms that become a guiding source regarding various aspects of business set-up and it’s successful management. the document / study covers various aspects of project concept development. 5 BRIEF DESCRIPTON OF PROJECT 5. The purpose of this document is to facilitate potential investors in for investing in a Departmental Store by providing them with a general understanding of the business with the intention of supporting potential investors in crucial investment decisions. best practices developed by existing enterprises by trial and error. start-up. 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. Concurrent to the prefeasibility studies. marketing. Apart from carefully studying the whole document one must consider critical aspects provided later on. and production. The proposed project is a single floor departmental Store on an area of approximately 3. 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. a broad spectrum of business development services is also offered to the SMEs by SMEDA. detergents and chemicals  Cosmetics and artificial jewellery June 2015 5 . finance and business management. The project will offer following broad categories of goods to its customers:  Groceries and food items  Baby garments and baby products  Crockery and plastic items  Soaps.120 sq.1 Project Brief The proposed Departmental Store will provide a variety of goods ranging from grocery items to garments under one roof.

Islamabad. Faisalabad. As more and more retail outlets are opening and consumer buying has shifted towards packaged / branded products. The proposed Departmental Store is feasible in any area where there are approximately 3. companies are coming up with top quality products and with the increase in production level the employment also increases. etc. but indirectly it is contributing in the employment growth. The proposed project will provide direct employment resources to 24 employees. Although in Pakistan retail business is not providing employment at a large scale directly. it will offer the following broad categories of goods to its customer: Table 1: Installed Capacity Category of Items Proportion Groceries and Food Items Baby Garments and Baby Products Crockery and Plastic Items Soaps Detergents and Chemicals Cosmetics and Artificial Jewellery Ice cream and Beverages Stationery and Greeting Cards/Gifts Items Watches and Clocks Electronic and Electrical Appliances General Items June 2015 6 55% 5% 4% 15% 5% 5% 1% 1% 2% 2% Average Gross Margin 15% 35% 30% 10% 30% 10% 20% 30% 30% 15% .2 Installed & Operational Capacities With respect to the available capacity of the departmental Store.000 houses / family units. The Store should be centrally and conveniently located within a developing or a newly developed residential town in any of the big cities like Lahore. 5. Rawalpindi. Location of Departmental Store is of primary concern with any retail organization. greeting cards and gifts items  Watches and clocks  Electronics / electrical products  General items  Bakery Items Legal status is recommended to be a sole proprietorship / partnership. Sargodha.Pre-Feasibility Study Departmental Store  Ice-cream and beverages  Stationery.

The factors that make this project viable in Pakistan are:  Easy access to wholesale markets  Plentiful availability of resources / salesman  No process / transformation involved  Variety of goods under one roof  Margin for innovation  Easy diversification towards new product mix  Customer card system can be one of the best strategies for the retention of existing customers and for developing new customers. Currently there is a new trend and large investment has been made in super stores by few multinational companies i.  There should be regular and sustained marketing through fliers distribution and Cable TV. Hyper star. the concept of Departmental Store has gained popularity in the late eighties after the emergence of Utility Stores by the government. etc.  To obtain a good average of profits it is necessary to provide state of art facilities to customers. Macro.e. June 2015 7 . Cosmo Cash & Carry. Customer Card System is one of the best CRM practices used globally. Card System maintains data base of customers which can be later on used for permanent promotional and marketing activities. The same concept has been used by Canteen Department Store (CSD).Pre-Feasibility Study Departmental Store Bakery Items Total 5% 100% 20% 6 CRITICAL FACTORS In Pakistan. It is advisable to maintain a parking space whereby around 15-20 cars can be parked  The hired staff should be well mannered and well trained in dealing with the customers.  Free gift schemes and valuable customer dinner can be additional success factors.  The store should have an ample space for car parking. This concept was successful due to the availability of all basic utilities under one roof which saves time. Metro.

This phenomenon grew rapidly. 8 POTENTIAL TARGET MARKETS The target customer for Departmental stores is the population / family units of big cities. and much more.1 Project Economics All the figures in this financial model have been calculated for estimated sales of Rs. and breads to their offerings (which had formerly been offered by individual stores such as butchers. Various costs and revenues related assumptions along with results of the analysis are outlined in this section. flowers. The concept of "Self-Serving Store" was started. Location and amenities are some of the most vital factors in the success of a store. Faisalabad. These stores also began to offer products beyond the normal scope of the dry-good grocery store. and the milk man). They added meat. bakeries. 81 million in the year one. In the late eighties a paradigm shift in grocery store science occurred. and today thousands of stores exist in the big cities. Multan. The market for Departmental stores in Pakistan has been developing steadily over the last decade and a mushroom growth of large stores is observed in all big cities.Pre-Feasibility Study Departmental Store 7 GEOGRAPHICAL POTENTIAL FOR INVESTMENT Departmental store business is emerging as one of the good business ventures in Pakistan as it provides all the basic merchandise under one roof. 9 PROJECT COST SUMMARY A detailed financial model has been developed to analyse the commercial viability of Departmental Store. as population of big cities is increasing day by day and new societies and residential towns are being developed. The projected Income Statement. Rawalpindi. fruit and vegetables. June 2015 8 . There are thousands of Departmental stores in Lahore. Cash Flow Statement and Balance Sheet are also attached as annexure. Over the decades. Still a good potential is available for new stores. one sees that they offer greeting cards. 9. Gujranwala and this number is increasing day by day. video rental. fast food. dairy. Departmental stores have evolved even further. They selected their goods as they continued through the maze to a cashier. Customers entered the revolutionary store and walked through a narrow maze of shelves containing groceries. Now. The capacity utilization during year one is worked out at 50% with 5% increase in subsequent years up to the maximum capacity utilization of 80 %. childcare.

Raw material inventory Up front building rent Cash in hand needed for three month expenses (Admin.831 . 12.000 378.300.Pre-Feasibility Study Departmental Store The following table shows internal rate of return.000 Security Deposit Office Equipment Total Capital Investment Working Capital Requirement Initial Stock. etc.552.750 5.2 Project Financing Following table provides the details of required equity and variables related to bank loan.000 Furniture & Fixtures 1. Table 3: Project Financing Description Details Total Equity (50%) Bank Loan (50%) Rs. payback period and net present value of the proposed venture.750 900.000 9 500.) June 2015 60.031. Machinery & Equipment 2.595.000 4.750 Office Vehicle (motorcycle with delivery cabin) Pre-Operating Cost Training Costs 14. Table 2: Project Economics Description Details Internal Rate of Return (IRR) 32% Pay Back Period (Years) 5.000 741. Table 4: Project Cost Capital Investment Amount Rs.031.3 5 Project Cost Following fixed and working capital requirements have been identified for operations of the proposed business.22 Net Present Value (NPV) Rs.264. 6.000 57.666 Rs.825.666 Annual Markup to the Borrower 16% Tenure of the Loan (Years) 9.024 9. 6.

Table 5: Machinery & Equipment Requirements No.000 35.000 Printer Telephone Connection Sets Total 1 2 15.Pre-Feasibility Study Departmental Store Total Working Capital Total Investment 9.000 7.000 35.000 Office Equipment Requirements Following is the detail of office equipment required for this project.000 5.000 12.000 3.500 6.000 17.000 6.331 Machinery & Equipment Requirements Following is the detail of equipment required for this project.) Total Cost (Rs.000 800.) Computer 1 35.500 10.5 Cost per unit Rs.000 57.237.6 Furniture and Fixture Requirements Following is the detail of furniture and fixtures required for this project.000 1 1 20 3 95.000 105.4 7. 1 3 2 1 3 3 750.000 18. Total Cost Rs.000 2.000 9. of Units Description Shelves and Racks @ Rs 500 per sq ft for 1500 sq ft Cash drawers (model Tysso RJ 11) Handy scanners (XL 6800 series) Multinie barcode scanner (Libra 7050) Computers + barcode readers Printers for bills printing (tysso PRP 188) Software (sales + stocks + Purchase management) Fax machine ( panasonic) Service Trolleys U.000 24 1 8.000 800.000 12.000 95. June 2015 10 .500 13.000 15.264.063.500 200.000 192.000 45.000 16.500 15.000 750.500 17.S for Computers Security cameras with DVR recording + installation Generator (25 KVA) Total 9.P.581 12. Table 6: Office Equipement Requirements Description Quantity Unit Cost (Rs.

000 Sign Board for Outside with Lights 1 60.000 Total 9.000 60.8 Raw Material Requirements Raw material could be purchased from any whole sale market in the city.552. The main investment in this business is of land and building. ft.7 1. In this pre-feasibility the rent cost of 3. 150.535 Description Cost per unit Rs.Pre-Feasibility Study Departmental Store Table 7: Furniture and Fixture Requirements Chairs Tables Sofa Set for Office Energy Savers for Office No.535 Total 3. which is very high due to very expensive land in the proposed locations and high construction cost.000 to Rs.120 9. 3.000. Total Cost Rs.000 Air Conditioner ( 1.) Owner’s Office 120 Accounts & Procurement.500 8. of Units 10 3 1 500 Electric Fittings and Installation Renovations 1 2. 150. Following table shows the covered area requirement for the proposed store: Table 8: Space Requirement Description Area (Sq.000 480.5 tons) 8 60.750 Space Requirement The proposed Departmental store requires an area of approx 3.000 300 35.750 Ceiling Fans 2 2.000 150. ft. land is taken Rs.ft. 100.120 sq.120 sq.000 per month.000 15.000 633.500 5.000 24. June 2015 11 .000 250 150.000 15.000 150. Office 120 Wash rooms for Gents and ladies 120 Warehouse Display / Shopping Area 225 2. The rent cost of a commercial building situated in a well-populated housing society will be ranging from Rs. It is recommended that the store should be started at a rented premises.

176.000 300.000 144. 7 will work in the evening.11 Revenue Generation Based on the capacity utilization of 50%. Table 10: Revenue Generation (First Year) Description of items Groceries & Food items Baby Products Sales Revenue (Rs. June 2015 12 .000 13. the sales revenue during the first year of operations is estimated as under.000 312. 9.) 360. Purchase Offcr Cashiers* Helpers/Cleaners* Accounts Officer Warehouse Keeper Security Guards* Total 9.000 12. for 11 categories of the grocery items sales for the shopping mall. A three-phase commercial electricity connection is required.) 30. 2 Cashier & Helpers/Cleaners in morning.000 15.000 12.000 216.Pre-Feasibility Study 9. Current rate of electricity for these connections is Rs 14 per kilowatt-hour.000 288.550.) Proportion Capacity Utilization Avg. telephone and water.000 4.10 Salary/Month (Rs. one solely used for home delivery service calls.000 14. At least two telephone connections are required. 2 in evening.000 Number 1 12 1 1 3 2 1 1 2 24 Annual salary (Rs.000 504. 1 security guard in morning and 1 in evening shift will work.000 180.000  These people will work in two shifts: 5 Salesmen work in the morning.050.000 18. Gross Margin 55% 50% 15% 44.9 Departmental Store Human Resource Requirement Skilled salesmen are easily available at competitive wage rates.000 Other Costs The necessary utilities are electricity.000 13.000 25.000 5% 50% 35% 4.872. Number of workers required for each department of Store is given below: Table 9: Human Resource Requirement Positions Store Manager Salesmen & Sales girls Purchase Officer Asst.000 1.

rehmansgroup.050. Walton.000 810.000 4.050.000. Main Boulevard DHA Cant Lahore Racks & Shelves Suppliers Shekhupura Road behind Mr.240.Pre-Feasibility Study Departmental Store Crockery Soaps detergents Cosmetics Beverages Stationary Watches Electronics General Items Bakery items 4% 15% 5% 5% 1% 1% 2% 2% 5% Total 100% 50% 50% 50% 50% 50% 50% 50% 50% 50% 30% 10% 30% 10% 20% 30% 30% 15% 20% 3. Rawalpindi Johar Software House. 425.1 Machinery and Equipment Suppliers Name of Supplier Machinery Supplier Rahman Business Systems Address E.000 10 CONTACT DETAILS In order to facilitate potential investors.com (+92-300) 5145266 (+92-333) 2307246 Software Designers Mr. Rawalpindi Mashood Alam Gulshan Iqbal.smeda. contact details of private sector service providers relevant to the proposed project be given.000 4.000 81. Karachi http://smap.150.000 12.000 810.620.000 1.050.org/ 13 (+92-51) 5857225 (+92-323) 2344403 (+92-42) 111 111 456 .com info@rehmansgroup.000 1. 10.000 4.620. Karachi Contact (+92-42) 6612139. Rashid Jamil Danyal Siddiqui SMEDA SMAP free Download June 2015 Khalid Consultants. 6621458 (+92-333) 4234931 www. Javaid Sheikh Kohe Noor Mill.

pk www.pk www.secp.sindh.sbp.pk Government of Balochistan Government of GilgitBaltistan www.org.gov.pk www.companylist.moip.pk Ministry of Industries & Production Government of Punjab www.pk List of Retail Companies in Pakistan www.pk www.balochistan.pk www.smeda.org/retails www.gov.gop.pk Security Commission of Pakistan (SECP) Federation of Pakistan Chambers of Commerce and Industry (FPCCI) www.com www.slideshare.gov.punjab.khyberpakhtunkhwa.com/retailing 14 .brecorder.gov.pakistan.pk www.ssic.gilgitbaltistan.fpcci.gop.psic.gos.net/retailing Retailing in Pakistan Future of Retailing Retailing in Pakistan Overview June 2015 www.pk Government of Sindh Government of Khyber Pakhtunkhwa www.Pre-Feasibility Study Departmental Store 11 USEFUL LINKS Small & Medium Enterprises Development Authority (SMEDA) Government of Pakistan www.tdap.gov.ajk.pk Sindh Small Industries Corporation Punjab Board of Information Technology www.pk State Bank of Pakistan (SBP) Punjab Small Industries Corporation www.gov.com.pk Trade Development Authority of Pakistan (TDAP) www.pk www.pk Government of Azad Jamu Kashmir www.euromionitor.gov.gov.pbit.gov.org.gov.

333.145.120 166.608 7.780.008 22.537 343.917 550.372 3.520 187. janitorial services.305 6.170.788 700.553 4.972 2.106.244.582.080 1.940 284.943 169.503 3.570.537 169.531.240.134.547.Pre-Feasibility Study Departmental Store 12 ANNEXURES 12.400 194.582.932.011.918.069.752 253.679 209.525.091 169.570.534.916 2.290 97.321.146 10. audit.543 102.638 2.444 588.172.810 3.312.955. consultants.733 2.600 2.650.825 9.720 234.000 810.389.675 75. etc.783.893 116.178 239.772 1.044.764.000 2.195.000 194.609 193.342 13.395.769 22.503 43.336 5.884.222.270 358.600 2.675 75.740 23.104.187.884 234.594.764.154.448 124.000 Year 2 98.490.401.050 980.644 461.391 17.507.789 23.498 16.176.950 3.710 98.129 3.291 378.924.591 154. etc.448 170.920 9.761.070 212.622 27.306 96.444 2.932 2.570.635.214.769 2.942 4. licensing.550 164.646 127.875 4.122 28.306 5.660.000 120.320 19.518 1.212.918 3.532 7.600 2.125.786.448 21.003 39. entertainment.021 67.686.220 21.077 233.980.420 415.991 162.411 15.965 Year 7 229.760.785 257.595 9.920 71.178.536 5.958.781.898.409 3.590.959.675 75.800 5. fax.778.900 169.098 121.295.387.893 8.783.691 3.550 4.802 12.854 205.643 3.800 2.687.312 85.028.303.000 81.348.855 197.000 2.720.289 7.306 Year 8 252.520 3.909.766 2.389.231 378.145 1.049.740 23.380 2.205 6.825 10.527.800 7.582.000.198 1.917 Interest expense on long term debt (Project Loan) Interest expense on long term debt (Working Capital Loan) Subtotal Earnings Before Tax 366.554 175.553 307.547.800 7.009.589 1.675 75.093 35.646 10.890 398.597 Revenue Cost of sales Raw Material Cost Wages Operation costs 1 (direct labor) Operating costs 2 (machinery maintenance) Operating costs 3 (direct electricity) Total cost of sales Gross Profit General administration & selling expenses Administration expense Administration benefits expense Building rental expense Electricity expense Office refreshment expense Communications expense (phone.055.795.089 549.356 8.122 226.348 116.262.600 2.) Depreciation expense Amortization of pre-operating costs Amortization of legal.000 Year 4 140.607 143.868 168.267 2.795.204 190.385 1.000 2.914 238.652 3.261 284.397.954 415.100 166.500.159.915 137.060 1.825 14.854 667.655. etc.672 258.147.956.840.895 17.625 1.) Promotional expense Professional fees (legal.094.715 5.942 1.205 105.483.676.601 28.122 28.005 4.692 258.915 1.754 3.055 1.624 5.384 18.180.400 405.362.917 Gain / (loss) on sale of office equipment Gain / (loss) on sale of Furniture & Fixtures Earnings Before Interest & Taxes 4.047 230.958.343 2.600 132. mail.943 8.637.154.788 2.425.210.425.825 13.800.543 166.334.476.854 25.1 Income Statement Calculations SMEDA Income Statement Year 1 81.300 Year 5 166.854 25.985 25.367.539 32.094 978.261.200 2.000 166.800 8.975.947.110 Year 10 305.357 159.653.160 145.307.208 14.186.958.246 21.042 6.740 216.700.592.800 6.594.347.046.770 169.283 238.358.094 2.474.342.754 1.988 4.000 Year 3 117.000 1.553.437.587 312.174 10.891.632.267 830.) Office expenses (stationary.520.000 176.040 490.216.675 75.440 213.131 17. internet.600 2.628.273.809.373.370 1.499.129 1.935.127 2.825 12.149.250.235.406 12.363 282.498.425.362.260 13.503 1.034 312.046 2.188.006 262.582.769 140. and training costs Subtotal Operating Income Tax NET PROFIT/(LOSS) AFTER TAX June 2015 15 .280 9.010.040 1.535.412.387.932.858.612.736 Year 9 277.900.200 213.399 972.000 176.624.842 17.596 65.800 13.212.776 159.848.736.940.400 1.940 Year 6 195.846 343.460 4.289 166.423.107 3.

259.168.328.764.699.237.264.910 34.130 644.867 7.000 156.000 776.000 2.250.400 11.779.313 5.750 60.666 6.264.165.463 11.031.183 10.011.000 155.363.512 123.831 3.647.666 42.597 41.000 621.750 900.653 8.449.288 1.050 500.230 86.551.057.000 12.400 33.078 802.762 1.547 151.050 7.933.800 26.968 6.2 Departmental Store Balance Sheet SMEDA Calculations Balance Sheet Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 741.172 9.790 3.468 103.725 500.568 3.459 38.356 1.160.464.648 Fixed assets Security Deposit for Rental Building Machinery & equipment Furniture & fixtures Office vehicles Office equipment Total Fixed Assets 500.149.650.504 56.987.203.925 60.219 9.031.Pre-Feasibility Study 12.096.031.650.268 126.675 - 6.063.716.666.000 2.031.000 45.000 11.259 .000 17.183 9.435.798 10.600 156.359.022 6.264.000 2.631 378.746 17.811 5.767 2.323 226.900 22.465 966.264.099 3.031.086.275 156.447.264.000 2.264.260.743.270 33.241 28.264.666 12.666 6.631 72.475 60.314.031.887.090.792.190 108.294.400 3.592.000 4.536.122.546.600 18.198 3.938 26.915 8.831.800 3.100.064.666 2.021.984.089.552.595.102.793.540 12.690 29.259 3.754 500.988.557 49.678.298.374 9.947 393.139.264.557 1.627.100 156.029 4.124.031.203.703.675 72.000 7.666 90.602 116.252 11.821.712 1.758 9.631 58.451 6.031.000 2.601.385.000 22.000 2.244.920.328.542 6.317.666 56.000 931.190 - 6.631 14.259.031.661.152 6.649 12.902 1.412.400 500.769.631 29.331 16 - 6.050 6.628 1.432.510.252 10.000 14.631 2.000 2.200 5.433.929.089.785 8.992 2.000 2.285 1.113 26.294.538 21. licensing.068.647.738 5.000 1.098.474 5.031.000 1.435.775 2.753.926 33.391 89.709.031.273 18.200 4.929 500.000 310.410.035 72.331 302.264.006 96.666 110.600 4.536.474 4.542 75.734.924 - 6. & training costs Total Intangible Assets TOTAL ASSETS Liabilities & Shareholders' Equity Current liabilities Accounts payable Short term debt Total Current Liabilities Other liabilities 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 June 2015 - 6.195.897.939.205 21.172 7.499.436 4.551.977 1.800 78.370 62.579.587 4.666 30.000 1.054 4.590.629 Assets Current assets Cash & Bank Accounts receivable Finished goods inventory Raw material inventory Pre-paid building rent Total Current Assets 5.738.872.280 500.455 500.726 79.052 2.671 108.877.000 57.968 5.264.500.423.550 3.982 1.666 73.500.938 7.261 26.000 14.592.464.242.423 6.875 3.907.581 3.219.650 60.792.090.296.031.599.512 - 6.405 52.992 10.773.259.200 313.750 500.200.267.291.845 68.580 18.218 - 6.462 42.838 48.000 34.075 500.840 10.000 465.466 4.666 20.943 990.469.215 3.547 6.924 126.000 1.288 2.666 2.200 60.618.550 156.791 6.410.800 8.917.104 500.510.421.561.916 Intangible assets Pre-operation costs Legal.430.218 89.375 156.649 3.528 1.810 7.952.122.264.702 4.611.171.884.748 3.000 392.821.219.761.916 42.666 12.031.169.796 36.021.415 16.000 2.017 2.798 11.176 1.250.999.740.589 3.063.767.770.600 2.065.385.323 6.594.000 2.200 21.153 105.631 43.825 156.999.259 2.400 235.975 4.512 56.000 2.397.197.907.058.430.

085) (516.145.011 8.611.465) (966.769) 1.988 166.280 169.800 (3.440) 1.800 (752.900.536 166.675 75.905.063.377.750) (900.044.029) (5.379) - - - - - 741.434 Year 9 17.282.217 9.800 (994.825 (1.000) 677.106.275) (3.600 2.086.980.398.379) - - - - - (4.104.557) - - - - - - 12.340) (192.342) (99.108.791 6.600 2.331 (860.621 Year 10 (6.836 7.principal repayment Additions to Project Loan Additions to Working Capital Loan Issuance of shares Purchase of (treasury) shares Cash provided by / (used for) financing activities Investing activities Capital expenditure Acquisitions Cash (used for) / provided by investing activities NET CASH June 2015 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 14.231.328.675 75.877) (821.975) 393.891) (108.767) (2.109 17 2.Pre-Feasibility Study 12.825 (1.133) (1.600 2.639.261) 68.000) 3.787) (769.825.460.905.975 Year 8 16.140.121 5.215.869) (717.715) (699.244.761.616 8.356 169.434 8.923) 1.383.920) (131.600 2.702 1.089.703) (6.623 (4.736.082 4.779.373.387 Year 7 19.246.013 2.065.123) (4.852.900) 793.532 169.044.904) (706.531) (603.512.764.3 Departmental Store Cash Flow Statement Calculations SMEDA Cash Flow Statement Year 0 Operating activities Net profit Add: depreciation expense amortization of pre-operating costs amortization of training costs Accounts receivable Finished goods inventory Equipment inventory Raw material inventory Pre-paid building rent Accounts payable Cash provided by operations Financing activities Project Loan .451 1.075) (144.108) (1.327) (7.075.412.875 3.270.328.650.960) (8.623 .495.217) - (644.785) (159.138) (940.621 68.principal repayment Working Capital Loan .231.750) 2.600 2.709) - (470.122.977.825.825 (1.099.750) - - - - (169.628 (1.666 (344.618.956) 49.022) - - - - - (5.806) (119.675 75.625 166.303.891) (826.443.460.750) - - - - (169.385) 1.612 5.915 166.418) (802.795.624.465.946) 1.831 (2.168.675 75.437) (2.495 3.254) - (550.512.395 2.790) 928.387 8.800 (349.567.052 2.139.306.138) (2.950) (175.454 8.766) (3.783.301) (543.701) (636.938) (1.851 5.053) - (402.597 169.825 (1.825 (990.521) (471.108.280) 4.348.055.031.826) (1.153 (1.675 75.193) (90.042 169.975 8.595.733 166.800 (865.979) (624.000) 12.

Pre-Feasibility Study Departmental Store 13 KEY ASSUMPTIONS 13.000 / month Promotional Expense Cost of Goods Sold Growth Rate Capacity Utilization Growth Rate 0.2 7 30 30 15 30 7 30 30 30 30 3 Economy Related Assumptions Description Details Electricity / Fuel Cost growth rate 10% Salaries growth rate 10% 13. 10.1 Operating Assumptions Hours operational per day Days operational per year 12 hours 360 days Stock inventory remain in store Category of item No.3 Expense Assumptions Description Details Office Refreshment Expense Rs.000 / month Communication Expense Rs. of days Groceries and food items Baby garments and baby products Crockery and plastic items Soaps detergents and chemicals Cosmetics and artificial jeweler Ice cream and Beverages Stationery and greeting cards/gifts Watches and Clocks Electronic and electrical appliances General items Bakery Items 13.5% of revenue 10% 5% 10% of administration expense 10% of administration expense 10% Administration Benefits Expense Office Expenses Operating Costs Growth Rate June 2015 18 . 8.

Pre-Feasibility Study 13.4 Departmental Store Financial Assumptions Description Details Debt Equity 50% 50% Interest Rate on Debt Debt Tenure 16% 5 Years Debt Payment / Year 12 June 2015 19 .