Notes:

1. Equipments and Machinery

Particular Number of units Per unit price Amount

Equipments and
Machinery
Slow cooker 8 6000 48000
Food processor 2 6200 12400
Blender 2 4000 8000
Rice maker 3 3000 9000
Juicer 5 3000 15000
Contract grill 3 5500 16500
Burners 5 5000 25000
Tea Maker 2 3000 6000
Mixers 3 3500 10500
Steamers 3 5000 15000
Refrigerator 4 80000 320000
LCD 2 40000 80000
Computer 1 25000 25000
Utensils - - 350000
Air conditions 4 97000 388000
Fans 20 3200 64000
Generator 1 300000 300000
Other - - 50000
Total 1742400

2. Conveyance cost

Item quantity Per unit price Amount

Bikes 2 50000 100000
Loader 1 350000 350000
Total 450000

3. Renovation:
renovation is assigned to the sub contractor. Who will charge about rs. 1,000,000 to renovate
the restaurant according to the theme of the village.
 Detail Area to be Per square feet cost Total renovation
renovated in square cost
feet
Total 2448 408.5 1000000

4. Furniture

Item Quantity Per unit price Amount

Chairs 60 4000 240000
Tables 25 5000 125000
Charpai 15 5000 75000
Extra plastic chair set 2 5000 10000
Total 450000

5. Pre operating cost:

Detail Amount
Marketing Expense 300000
Electricity, Gas and 20000
telephone installation
Licensing 40000
Trademark 100000
registration
Recruitment cost 10000
Total 470000

6. Building rent
We will rent a building of 15 marla (4089 sqaure feet). The rent of the building is
250,000 per month. As we make payment for year in start. So we have to pay 3,000,000
in advance.
7. Raw material:
To make first sale of the restaurant we do also need raw material. We will buy raw
material for 15 days. As usually in restaurants 15 days inventory is managed. Our
expected sales for a day are almost 105,000. Our target also is to make sales 105000 per
day. And we decided our cost of food should be 40 percent of price or total sales. We
 have designed our menu on this criterion also. So, if the cost of food for a day is 42000
rupees. Then for 15 days it will be 630000 rupees.
8. Salaries of personnel:

Detail quantity Per person Per month For year

Manager 1 30000 30000 360000
Account holder 1 20000 20000 240000
Chef 2 30000 60000 720000
Cook 4 20000 80000 960000
Helpers 4 12000 48000 576000
Waiters 12 12000 144000 1728000
Security guards 2 10000 20000 240000
Delivery boy 3 12000 36000 432000
Total 438000 5256000

9. Utilities:

Item Per month Per year

Gas 70000 840000
Electricity 150000 1800000
Telephone 6000 72000
Petrol 20000 240000
LPG 40000 480000
Total 286000 3432000

The above mentioned utility bills are estimated by concerning with manager of different
restaurants. These are estimated values.
10. Entertainment:

As in introduction we mentioned that we are also offering the entertainment weekly nights.
In which we will invite different talents to promote the local talent. Like we will organize
qawali nights, musical nights, and other things like these.

Our estimation cost per night is round about 20,000 rupees.

Per night cost Per month Per year

20000 80000 960000
11. Depreciation:
We decided to depreciate equipments, furniture and other assets on 10 percent per anum
of their book value by using diminishing balance method.

Detail Rate of depreciation Total Amount Depreciation

per annum amount
Equipment and 10 percent 1742400 174240
Machinery
Bikes 10 percent 100000 10000
Furniture 10 percent 450000 45000
Total 229240

12. Amortization of Pre operating cost:

Detail Amount Amortization with 3 Per annum amount

years
Renovation 1000000 1000000/3 333,333
Trademark 100000 100000/3 33,333
registration cost
Recruitment cost 10000 10000/3 3,333
Utilities installation 20000 20000/3 6,661
cost
Total 1130000 376660

13. Projected sales:

We have projected our sales by consulting the manager of different restaurants. We asked
them how we can estimate our sales in restaurant sector. Usually, restaurants assign the
price per customer. As they assign the ratio that on average we are charging one person
like 700 or 800 etc. if we see in our region the per person charge by restaurant falls
between 700-1100 depending upon the services, environment and taste of restaurants.
We decided to charge 1050 rupees one person after estimating the cost and other
expenses.
 We make target to serve 100 persons per day. Out of which 40 person at dinner.
 50 persons at lunch.
 10 Deliveries.
 Persons Per person Per day Per Year 1
charge sales month
At lunch 50 1050 52500 1575000 18900000
At dinner 40 1050 42000 1260000 15120000
Home 10 1050 10500 315000 3780000
Deliveries
Total 100 - 105000 3150000 37800000

Our estimated sales per day are 105000 rupees. And for first year total sales are estimated to be
37800000 rupees.

Sales for year 2 and 3:

Our target is to increase our sales by 10 percent each year in order to capture more market.

Expected sale growth Year 2 sales Year 3 sales

10 percent 41580000 45738000

14. CGS:
We design our menu card and per person charge estimation on basis of cost of food.
Usually in restaurants prices are designed in such a way that 33-35 percent of the price is
comprises of food cost. We designed our prices in which 40 percent is food cost. As our
food is high genie and desi based. Most of the menu comprises of the meats.

Year 1 Expected growth Year 2 Year 3

15120000 10 percent 16632000 18295200

15. Change in salaries:

The salaries of personnel’s are detailed above in notes to account number 8. We decided
to change the salaries of employees by 10 percent per annum.
So after each year 10 per cent of salaries will rise.
16. Utilities changes per year:
Check notes to account number 9, to take an idea about utilities of first year. In yeav 2
and 3, utility expenses is expected to rise by 13 percent.

Year 1 Growth rate Year 2 Year 3

 3432000 13 percent 3878160 4382320

17. Rent
We will make a contract with the lender in which it is stated that they can rise the rent by
10 percent only per anum.
18. Repair and maintenance:
1 percent of total sales will be retained for the repair and maintenance cause.
19. Tax:

By following the tax regulations budget of Pakistan we have calculated the tax. Different
slabs rates are proposed for association of persons (AOPs) instead of fixed rate at 25%.

Slabs Taxable income Rate of tax

1 400,000
2 400,001 to 750,000
3 750,001 to 1,500,000
4 1,500,001 to 2,500,000
5 2,500,001 and above
Nil
10% of amount exceeding 400,000
35,000 plus 15% of amount exceeding 750,000
147,500 plus 20% of the amount exceeding 1,500,000
347,500 plus 25% of the amount exceeding 2,500,000.

On the basis of above information we calculated tax rate as follow:

Year Taxable income Tax slab applied Tax paid

1 8708100 347,500+ 6208100*25% 1899525
2 9666540 347,500+ 7166540*25% 2139135
3 10707440 347,500+ 8207440*25% 2,399360

20. Retained Earnings:

Mutually decided that 10 percent of the net income will be account as retained earnings
per anum.
21. Cash:
Cash will be deposit in the bank on the name of restaurant which will be opevate by all
the partners. A joint account.