Business plan feasibility

Edna Mall expansion project proposal

December, 2013

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1. Executive Summary
The proposed expansion project of Edna Mall Plc consists expanding the
existing capacity of its Matti Multiplex Cinema, Children play ground (bongo’s),
replacement of cinema old technology by new and facilities like cinema chairs
and renovation activities on the interior and exterior areas of the Mall
(building).
Edna Mall in its existing capacity has been becoming renowned family
destination entertainment center in the city. The expansion project will offer
additional attractive games and cinemas in available and secure environment.
This expansion project of Edna mall will play a paramount role in bridging the
demand and supply gap. As the entertainment business is a new business
venture for our country, it starts to attract more investment.

The initial investment for the expansion is estimated to be birr 100,000,000

which include the game machines, cinemas equipment, fixtures,
Furniture, cinema hall construction, expansion of children play ground on
1200m2, renovation works on the building and working capital.
The projections are taken over a period of 5 years. Due to the expansion and
renovation works Edna mall plc is expected to augment average annual profits
of birr 118,047,230.Edna Mall with its existing, expansion and renovation
works it will provide an internal rate of return (IRR) of 31.7 and a payback
period of less than years.
These results show that the expansion project is feasible.
Edna Mall Plc, in its existing capacity, has been playing a significant role in
contributing towards social and developmental movements in the city as well
as in the country. With its expansion activities it will be expected to enhance
its contributions in the economic, development and social environments. The
expansion project will offer 40 job opportunities. With this all expansion efforts,
Edna mall will defiantly step up to wards the availability of latest

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 entertainment technology as well the internal and external view of the mall will
total be changed and this all will directly brings the mall to a successful profit
making scenario

2. Background
Edna mall is Ethiopia’s first complete family destination that will offer its
discerning clientele a unique and distinctive shopping office, entertainment
and dining experience under one roof. It is located opposite Bole Medhanealem
Church, positioned to become Addis Ababa’s landmark where a customer will
truly be spoilt for choice. The owner and developer of this gigantic
establishment, Engineer Tekleberhan Ambaye, being the proprietor of one of
the country’s leading construction company, TACON, dedicates this first retail
project to the vibrant nations of Ethiopia to commemorate the Ethiopian
millennium year. It is a 7-floor building which is laid on a 2000 meter square
land with an investment of over Birr 150 million. It was officially inaugurated
on November 29, 2007 by Ato Girma W. Giorigis, President of the Federal
Democratic Republic of Ethiopia, Ato Berhanu Duressa, Mayor of Addis Ababa
City and other high officials and diplomats. Edna mall Plc. is one of the
business establishments of Tekleberhan Ambaye Enterprises.

The Mall’s major areas of business include Matti multiplex Cinema, Bob &
Bongo’s Fun palace (children playground), Bob &Bites (family restaurant) cafes,
numerous shops and offices. Matti multiplex Cinema, Bob & Bongo’s Fun
palace and Bob Bites are run under Edna mall Plc. management.

Matti Multiplex Cinema presents Ethiopia’s first three-screen movie theater

complex that will showcase the latest and best of Hollywood, regional and local
films. Bob & Bongo’s fun Palace is indoor-themed entertainment area that
relives the fantastic friendship and adventures among children inside the
palace. Bob & Bites is a unique family casual dining restaurant set in the
vicinity of Bob & Bongo’s. The shopping center provides customers with a

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 stimulating environment offering varied choices for all groups and items. The
complex also has offices with its special designs to suit international and local
companies.

3. Objective.

The objective of Edna Mall expansion project is to meet the demand gap in the
entertainment industry of the city. Edna Mall,in its existing situation, is
becoming the prominent family destination entertainment center in the capital.
It has been exerted efforts to suit our country to the state of art entertainment
technologies.

Currently, the world is amazingly growing in the entertainment technology,

Edna mall, from its strategic mission and to beat the competitive environment,
it has to cope with the state of art technology in the entertainment industry. In
order to practice its vision properly an expansion project is deemed necessary
to launch in the existing mall. Hence, this expansion project will have the
following objectives.

 To boost the access of availing more standardized play ground to the

increasing demand with a very latest video, redemption and attraction
games.
 To suit its cinema existing technology to the recent technologies
 To expand the capacity of its cinema area. As currently have three world
class cinema halls.
 To bring a very new view of the building from internal and external sides.
 To enhance the contribution in the realization of the city of Addis Abeba
to ultimately make it a competent city in consistency with international
standards.
 To contribute more in the socioeconomic development of the country in
general and the capital city in particular.

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4. Expected outcomes.

Expected outcomes in relation with the realization of the expansions project

objective includes:

 The immediate increment in the capacity of play ground and the

cinema,
 Introduction of new and latest state of art entertainment technology
which our country will make to suit to the current entertainment
standards.
 To secure its unbeatable position in the industry so as to maximize its
revenue augmentation.
 Additional employment opportunity for at least 40 employees.
 Contribute to the increase in the amount of revenue that the city
government as well as the federal government would collect through
taxation.

5. Expansion project descriptions

The project consists expanding of children play ground, cinema Hall and
renovation works internal and external on the existing Edna Mall building
which will offer more attractive game machines, state of art cinema
technology, a completely new view of the building and a more secure
environment.
Edna Mall currently, is the leading family destination entertainment center
in the capital. To secure its leading entertainment capability in the city,its
needs making itself more and more alert to a new entertainment technology.
And it has been exercising such valuable practices. The most and recent
event was the introduction of the 7D game simulator which it has been the
first in its kind to our country and Africa.

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 6. Business Amenities of Edna Mall

The building would have a total of nine story, two basement floors, a ground
floor, and upper stories from first to sixth floors. The building is envisaged to
draw revenue earnings through the services delivered under its umbrella. The
cinema with its three world class cinema screens, the children play ground
which is the most spectacular area in the city, the restaurants and counters in
every floor, the birthday party room, the school packages and the rent for
different shops, restaurants and café and offices are the major services of Edna
Mall. The two basement floors would also draw revenues from the car parking
service to be provided to occupant customers as well as to the visitors or guests
that show up there seeking any of the services provided by the occupants to
the EDNA firm itself.

6.1. Cinema Hall Services

A new system of service delivery of theatre and cinema shows, which is an up-
to date system and application equipped with contemporary technologies and
devices also in use in the developed countries, has been introduced and
established in Edna Mall. It has been the firstto break out the old and
conventional system.

 Popularly known as Matti Multiplex

 It has three world class three screen movie theatre
 Their seat capacity is as follows

Cinema Name Seat Number Remark

Cinema 1 152
Cinema 2 152
Cinema 3 475 Multipurpose hall
Total 779

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The cinema halls are well equipped with :

 very comfortable and standardize chairs

 latest sound system with 7.1 surrounding sound system
 effective and to the standard lighting system
 latest high definition 2D and 3D digital projectors
 Air conditioning facilities
 ups

The only cinema showing Hollywood movies with 3D effects

Furthermore, this modern system of cinema and theater service delivery would
also be convenient to respond to secured privacy at an individual level while at
the same time serving larger number of spectators. To add to this interest and
privacy-based high-quality service delivery arrangement, there is a bar within
this facility so that spectators gain a better advantage sending their orders or
to go to the luxury bar.

Furthermore, this modern system of cinema and playground entertainment

service delivery would also be convenient to respond to secured privacy at an
individual level while at the same time there could be larger number of clients.
To add to this customer need-and –privacy-based high-quality service delivery
arrangement, there is a restaurant within the proximity of this facility so that
spectators gain a better advantage sending their order.

Alongside such convenient arrangement, parents and/or elders who would

come to attend cinema or theater shows can have their children get pleasure
from the entertainment facility at availed at the playground, which is
separately designated for such arrangements for the children to get access to
varieties of entertaining and educative activities under the guardianship of

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attendants to be assigned for the purpose. Parents can have easy access to
their respective children by way of the linking passage/access.

6.2. Children Fun palace (children play ground)

EDNA multi-story commercial building complex also incorporates a

multifaceted playground for family entertainment service outfitted with
modern and up-to-date facilities. This playground, with its versatile
amenities, is sited conveniently stretching in adjacency to one side of the
building. The existing playground is designed in such a way that it has
sufficient capacity of entertainment up to 1000 children and adults and
time in week days 4000 children’s and adults in one time.

As one scheme of revenue earning, the existing playground is equipped with

an assortment of contemporary entertainment devices. The family
entertainment center has got a reception counter that doubles as a
redemption counter.

The existing play ground comprises of the family entertainment center are:

Bumper Cars:- the bumper cars site is situated directly facing the entrance
and can accommodate eight cars each of which is fit for wither two children
or one adult and one child. The bumper car attraction is positioned to utilize
the structural columns which are themed like a glowing tree with lighting
features.

Carousel and Jump-in star:- the Carousel is situated alongside the

bumper cars area. The carousel suitably targets kids in to age groups
ranging from 3 to 9 years. The Carousel is undoubtedly expected to be the
highest revenue earner. The Jump-in star is also situated in adjacency to
the Rocket Prop and has each the capacity to carry up to six people at a
time and is believed a true thrill provider for kids as well as to elders.

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 Adventure play/Soft play /Area:- this area is toddlers play area.

Video/Arcade Machines:- This facility has been Arcade machines which are
distributed throughout the Family Entertainment Center taking into
consideration consistency of age categories. This is also a perfect mix of
games, which consist of video, novelty, sports, and redemption games. And
they are 60 in number.

It is popularly known as Bob and Bongo’s. The existing total area covered is
720m2 and all machines are from USA and Europe.

6.3. Restaurant Area

o Popularly shown as Bob & Bites
o It comprises business of restaurant itself, cinema counters and Ice
cream counters
o Bob & Bits is popular restaurant located next to Bob & Bongo’s on
ground floor of Edna mall
o Its seats capacity at a time is approximately 100 person
o It offer variety of foods like burgers, sandwich, Pizza, Pasta, local
food etc…
o The restaurant business is directly proportional to business in Bob
and Bongo’s. The Restaurant provides food and soft drinks for
school packages and Birthday Party
o Its kitchen equipment are well advanced
o Cinema counters in the cinema area are catering different cookies,
popcorns and soft drinks. Cinema counters business is directly
related with cinema business.
This restaurant is situated close to the children play ground which it will
create a convenient location to the parents of the children. The parents
can have any type of order from the restaurant and they can enjoy their
children’s pleasure from the restaurant in a very close distance.

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 6.4. 7D

As Edna Mall is already alert to entertainment technology , the

development of cinema theater technology, first 2D, second 3D, and now
realizes 7D cinema simulator. Because people are not satisfied just the
films plot and the 3D image, they look for the real simulation, where they
feel they are in the film. It gives them different feelings, such as exciting
moment, scary moment etc. 

This technology is a perfect combination of 3D images and effects

produced by the special equipments upon the human perceptive organs.
You become totally involved in what is happening on the screen, and feel
movements, rays of sun, wind blowing and humid air of ocean breeze etc.

7D cinema equipment is the best cinema among all motion cinemas,

outstanding feature:

 Best performance;
 Simplest structure;
 Most energy saving;
 Fastest and smoother seat action;
 Longest lifetime;
 Nearly no need maintenance.

 It features variety of animations movies ranging from 4-6 minutes

o Even movies makes everybody to experience 7 effects which are
synchronized with the theme of Movie
o Effects in 7D are water, wind ,chair movement, snow, smoke and full 3D
effects

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It is from Turkey and the first 7D simulator game to Ethiopia and Africa.The
7D simulator games has taken city by storm and is bring lot of customers on
daily basis

6.5. Building Rental Services

Building leasing activities have been also carried under the Tekleberhane
Ambaye real estate establishment.

Currently, there are around 43 tenants in the building who have been running
shops, café, restaurants and offices. Currently, the rental service generates an
annual revenue of birr 14,554,835.

The two basements are accommodating different functions including parking

area for the vehicles owned by the clients, stores, lockers, electrical gauges,
water collection tankers. The major part of the floor space in both basements is
used for car parking. The total capacity of the parking space in the two
basements would be 100 vehicles.

6.6. Birthday party and school packages

o Birthday party and school packages have been one of the areas of
business entities of Edna mall for the last six years
o It has well arranged birthday parts room
o School packages have been one of the businesses carried out
during the low sales seasons to enhance generating of revenue.
Edna mall has been established a good image and link with
children kindergarten and elementary schools.
6.7. Screen advertisements

The revenue from the screen ad have been augmented in two aspects

o The Indoor screen(cinema screen)

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 o The outdoor screen (the LED screen) which it has situated at the
main gate of Edna mall.

7. Investment requirements
Edna Mall, the leading entertainment center in the country has desired to make an
investment for its expansion project on all of its business entities and the renovation
on the building.

Ethiopian entertainment industry is growing by leaps and bonds. The

county’s economic growth has hugely contributed to the rise of the
sector.

The growth of our country’s movie industry for example can be

associated with the country’s recent economic growth which helped the
moviegoers to afford cinema tickets and at present in our country at least
five to six movies come to screens weekly on average compared to 1or 2
per annum 5 years ago. Similar the number of cinema halls has also
been tripled.
Since Edna Mall is specializing for foreign movies it has been the leading
in bringing the 2D and 3D movies to our country.

Generally, the entertainment industry is now mobilizing multimillion of

birrs every year that in its part contributed for the public’s satisfaction
which emanated from the movies, children fun palaces and other
entertainment areas.

Edna mall is playing its vital role in getting the entertainment and
movies industry to the next level. This can be witnessed that from 2D
and 3D cinema to high tech 7D entertainment gadgets.

Cognizant this, Edna mall is still striving to become the leading

entertainment center in the country as well as in the horn of Africa.

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 To realize its vision currently huge investment on bringing new cinema
and children fun palace technology and on innovation is deemed to be
vital.
Edna Mall currently is not only the first in the entertainment it is also
the leading in the contribution of social and developmental activities.
This all activities have been carried from the revenue that has been
generated from Edna mall. To increase its corporate responsibility from
what it has done yet, it needs a support to facilitate this expansion
project which we expect to augment more revenue. The total amount
required to accomplish the following investment areas are USD
5,433,190.25. The breakdown of the investment areas are indicated as
follows.
The investment costs are to be covered by30% of the owner equity and
70% bank loan.

7.1. Cinema.

The work in the cinema area includes renovation of cinema halls and its
lobbies, construction of new cinema halls, replacing of the old chairs by new
and latest chairs from Europe and purchase of new 2013 model cinema 2D and
3D digital high definition projectors.

The technology selection for the cinema equipments have been selected from
the renowned cinema equipment suppliers in Germany and USA.

The Projectors and their accessories have already selected from Barco of
Germany and Christie of USA.

The Chairs and other facilities have been selected from Italy.

The proforma invoices are attached with this document.

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No Type Evidences Value Status/Remark
1 Color Bullet camera, PT Pro forma invoice USD 61,496
controls, PTZ camera, 16 EXP/YGT/567/13
channel DVR, 22 inch
monitor , video & power
transiver, 6 port passive
video & data transiver ,
100 KVA UPS-Unit, fire
alarm panel-as set,
smoke detector, fire
alarm push button, fire
alarm cable as roll ,
network cat 6 cables,
network cat 7 cable,
public address speakers
2 Roof top cinema Contract made with USD Two cinema halls
expansion AVISS L.L.C contract 1,570,000 will be
number constructed in
2013/06/001 the existing
building having A
capacity of 210
seats.
3 Cinema chairs Commercial invoices Euro 97,500 L/C already
number 104 opened
4 Digital cinema projector Pro forma invoice USD 149,355
number
YGT/EXP/07/13
5 Roof top cinema electrical Agreement with M/S USD 770,000
work AVISS LLC contract
number
2013/06/002
6 DI/2013/01/0895 USD 229,000
D-Cinema system
installation & support

7 UPS 100KVA capacity

Total USD
2,877,351
7.2. Children Play ground Game,
As we have mentioned earlier, the expansion in the play ground covers
an area of 1200m2. In this area around sixty machines are to be installed

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 and several interior activities are to be done, which we expect to augment
more revenue.
The technology selection for the game machines have been made from
USA, Europe, and Canada.
The following game machines and other material to be purchased are
detailed as follows:

No Type Evidences Value

1 Various children game Pro forma invoice of USD 212,000
machineries Warehouse Games
number 050513 SNDP
2 Dua Lane roller Ball Pro forma invoice of fun USD 63,618.25
entertainment company
number 13021006
3 Pac-Man Smash Air hockey Pro forma invoice of USD 4,950
Warehouse Games
number 060813 SNDP
4 Sound monitor, convertor and Pro forma invoice of USD 3,545
gramophone Yutaf general Trading
5 Customize tokens, Led Tree, Commercial invoice of USD 29,565
Parq FLR solid golden maple Yuraf general Trading
number
6 paper cups and plate charges Pro-forma invoice USD 14,573
No.YGT/EXP/012/13
7 Cotton cap, ceramic mug, Pro forma invoice USD 5,000
plastic pen and pencil number YGT/EXP/13
8 6 axis and 2 axis full motion Pro forma invoice USD 98,800
number 100613001
9 Debit card system Pro forma invoice USD 101,077.75
number 13021008 of
FUNCO
Total USD 538,128.25

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The proforma invoices are attached with this document.

7.3. Building

The renovation works comprises of the interior and exterior parts of the
building. The expansion in the children play ground, cinema halls, and their
lobby and the restaurant areas are parts of the renovation works. These
renovation activities will bring a magnificent new and ever seen view to the
building which it will add a value for its leading role in the industry. In effect
plays its great role in attracting and retaining its customers which it will be
resulted in revenue augmentation.

For this renovation work Edna Mall has entered an agreement with Rawat
Group, Dubai, U.A.E, the bill of quantity and the pro forma invoice is attached
in the file;

No Type Evidences Value

1.1 Renovation work(details Pro forma invoice number USD 419,918.14
are in the bill of RWT-TRD-1714)
quantity and pro forma
invoice RWT-TRD-1714)
1.2 Renovation work(details Pro forma invoice number UDS 80,965.15
are in the bill of RWT-TRD-1713)
quantity and pro forma
invoice RWT-TRD-1714)
1.3 Labor Work Letter of agreement signed USD 1,000,000
between
TeklebirhanAmbaye and
Rawaat
1.4 Toilet Work Letter of RAWAAT USD 89,400
ALMANDHAR under
reference

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 RWT/CONT/Trdg/2013/1
004/R2
1.5 Aroma/odor treatment Attachment of Rawaat USD 37,508
machine/ Group(attached in the file)
1.6 Supply and installation Agreement made with Birr 1,579,832.26
of electro mechanical Gast solar Mechanics
works /AC installation contract number E-EDN-
for the new children 04
play ground/
1.7 Corrective maintenance Agreement made with Birr 458,735
for installation of Gast solar Machanics
electro mechanical contract number E-EDN-
works /AC installation 04
for the new children
play ground
1.8 Wireless conference Quotation of AVISS USD 282,627.43
system number
DQ/2013/08/275
600 KVA Generator
Total USD 1,910,418.72 and
Birr 2,038,567.26(USD
107,293)

8. Market Analysis

Entertainment is directly associated with the economic growth of a country

which it would be directly reflected in the standard living of the society.

Currently, Ethiopia is of the fastest growing countries. In the last four to five
years its economic growth has been reflected a double digit growth. This
economic boom brings a change in the life style of the society. The other factor
that has played a paramount role in the entertainment industry is the
population growth.

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In our country the annual population growth rate is 2.9%. The more the
population there is an attraction for entertainment investment as far as the
economic growth is there. Edna mall Plc, since its inception, it has been
registering a remarkable growth in the revenue augmentation in the
entertainment industry.

Currently, Edna mall is expanding its existing entertainment services in its

existing building. The reason for its expansion investment is the increasing
demand trend of entertainment in the metropolitan. To be specific, let’s see the
population size of Addis Ababa by age group as Edna mall is currently
targeting the Addis Ababa market.

S/ Age group Population Size % Contn

N
1 0-9 456,618 15
2 10-19 717,514 23
3 20-29 875,071 28
4 30-39 475,350 15
5 40-49 248,996 8
6 50-59 152,809 5
7 60-69 924,60 3
8 >69 63,939 2
Total 3,082,759 100
Sources (2007)

by taking the Annual population growth rate of A.A to be 2% the population

size for the period 2013 is accordingly projected. The above table indicates us
the projected population size.

The other inviting factor for an investment in this entertainment industry is the
per capita income of the citizen. The per capital income of the country has
been registered a remarkable growth from year to year. It was USD 795 in the
year 2007. Now, in the year 2013 grows to USD 1200. The yearly trend of the
per capita income is detailed as follows.

Year Per capita income in USD

2007 795
2008 881
2009 954
2010 1018
2011 1100
2012 1200
Source-World fact book

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Scenario:- The age group 10-39 is the expected age to be an attendant of a
movie. Then the total population will become 2,067,935.

Assumption 1)2% of this population actual or potential view of a movie in a day

then the total required cinema halls will be calculated at a capacity of 500 seat.

i.e. 41358 /500 = 82 cinema halls

This considers each cinema hall will have only one show time in a day which is
the worst scenarios.

This considers the worst scenarios that each cinema hall can have one show
time in a day. This figure can indicate us the demand for movie in our city is
very high.

Currently, in A.A there are around 10 cinema halls which they have an average
capacity of 400 seat. Taking this in to consideration, the demand and supply
gap is still there. From the worst scenario sideas we can see that the gap is
around 72cinema halls.

Hence, from this we can conclude that the cinema entertainment is very
attractive business area in A.A. On the other side Edna mall matti cinema’s
has been registered a sales average growth of 34% during the last three years.
This by itself can indicate us to what extent the demand growth is. Edna mall
for its world class three screen movie it has been the leading in the industry . It
has it own competitive edges that the only provider of Holly wood movies in the
country as well as it has been alerting itself for state of art technology. This can
be witnessed for its availing of the latest 2D & 3D high definition digital cinema
projectors.

Children and adult play ground

As we can see from the age group, the age group vulnerable to such play
ground is under 39 which it will be 2,524,557.

If we assume that all of these have to visit any children play ground as follows

 50% visits once in a year = 1,262,278

 25% vistis twice in a year= 1,262,278
 15% visits thrice in a year= 1,136,050
 10% visits four time in a year=1,009,823
Total visitors in a year = 4,670,429

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On the estimated demand side there will be 4,670,429 visiting to be made.In
the current situation the average daily visiting made on Edna mall children
play ground is 2000. The annual total visiting would be730,000. As the
capacity and area coverage of the other children play grounds in the city is very
small the average daily visiting is around 1000. The annual total visiting is
364,000.

The current total vising made in Edna mall & the other children play ground
becomes 1,094,000. From this we can see that the gap between the existing
capacity (the supply) and the estimated demand is 3,576,429Visiting. This gap
indicates us there is a big demand gap in the city which it attracts investment.

Edna mall, capacity & technology wise, is the pioneer and the leading in the
city. At present, Edna mall is the largest children. The other fact ,that indicate
us about the increasing trend of demand is the sales trend that has been
experiencing in Edna mall which it has been registered on an average annual
growth of 40% for the last three years.

Restaurant and counters

This business activity in Edna mall is proportionately analyzed with the

business of the children plays grounds and cinema. The sales in the area has
been also registered an average yearly sales growth of 40% for the last three
years.

8.1. Target Markets:-

Edna mall’s target Customers are the high and medium income

Level customers.

8.2. Brand loyalty

Edna mall for its good deeds in the social and developmental activities as well
as for the technology that it has owned in the area of entertainment, its brand
reputation is installed in the mind of customers. It has been positioned in the
mind of customers.

8.3. SWOT Analysis

SWOT a costing analysis is summarized as follows

Strength and weakness

- Financially health

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 - State of art technologies
- Brand loyalty
- Only supplies of Holy wood movies
- The pioneer of 3D movie in Ethiopia
- The 1st to introduce 7D to Ethiopia and Africa
- The well advanced children fun palace
- Well established cinema and Bongos facilities
- Delivering all of its services under one umbrella
- The creation of integrated business entities
- Sole distributor of holly wood movies in the horn of Africa
- Engagement in cities development activities
- Adherence to government obligations and regulations
- Owning of multipurpose building
- Owing of three word class cinema halls
- Updated financial books
- Conducting intensive promotional activities
- Involvement in social responsibility
- Lack of proper training
- Lack of technical capability

Opportunities and Threats

- Locational advantage
- Population size increasing
- The increment of the interest towards different entertainment technology
- Sustained economic growth of the country
- Sustained political stability.
- Improvement of standard living of the people
- Conducive investment policy
- Lack of well-equipped training center
- Continual escalation of exchange value of foreign currency
- Lack of technical expertise
8.4. Marketing Strategies
We have derived the following areas of strategic focus as our guide in
strategizing to fulfill the motives.

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  Enhancing the expansion of the business entities of Edna mall
plc. In Addis Ababa, and outside Addis Ababa.
 Coping with the latest entertainment technologies
 Playing the leading role is the entertainment industry by
enhancing the competitive edges

 Advancing the cinema facilities like chairs, sound systems,

lighting systems etc…

 Profit maximization

 Implementation of quality management system(QMS)

 Upgrading 7D effects

 Bringing latest game machine

 Comprehensive training for employee on customer service

 Intensive promotional activities

 Intensive branding activities

9. ORGANO GRAM AND MANNING

9.1. Organo gram

The organization design of Edna mall plc clearly shows flat

structure where the existing global competition demands to
shorten the decision making process. It reorganizes its
activities through five departments, two sections and five units
by which clearly defined economic roles.

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 Edna Mall PLC Organizational Structures
President
…..
Executive
Executive ….. Secretary
Advisors

DGM/GM

ICT Service unit ………….. Legal service advisor

Foreign purchaser&
Common pool executive ……. .…….. Liaison Service unit
Secretary
…….. Quality management
system service unit

Planning & HRD & Building & Property

Finance and investment
Operation Department marketing Administration S. Department
Department
Department Department
Building
Cost & Budget Marketing
HRM Unit administration
unit Building
research
Cinema customer Maintenance
&dev’t unit
service division unit
Generate
Revenueaccount
& Cleaning
unit
disbursement General section
unit Service
Planning Property
Bongos and Unit
unit administration
Bits division
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section
 9.2. Human resource management
The total number of existing human resource of Edna mall Plc is 270
and the future human resource plan after expansion will be 310. This
shows the organization can contribute to reduce the unemployment
burden of the government in addition to positive contribution for tax
revenue increment and national call from the government for the pillar
projects to achieve MDG goals and GTP plan of the country.

The management team qualification depicted below as follows:

S/ Description of items Qualification quantity Additional Remark

N HR due to
expansion
1 General Manager MA 1 -
2 Human Resource MA 1 -
manager
3 Finance manager BA 1 -
4 Operation manager BA 1 -
5 Building and property MA 1 -
administration manger
6 Marketing manger BA 1 -
7 All other employees BA, Diploma, 264 36
certificate and 8
grade complete
Total 270 40

10. Expansion Project Period

The expansion project duration period is expected to be three to four months

after the release of the required bank loan.

11. Financial Plan

11.1.Revenue Projection

Assumption and facets

Cinema
o Existing capacity 779 seats
o Additional capacity, 410 seats
o Exiting selling prices

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  Week days Birr 45
 Week end days Birr 50
 Week days (3D) Birr 60
 Week end days(3D) Birr 7D
o Existing revenue at full capacity will be
o 4 day x 45birr/day x 304 seat x 5 show x 48= 13,132,800
o 3 days x 50 birr/day x 304 seat x 5 show x 48= 10,977,000
o 4 days x 60birr/day x 475 seat x 5 show x48 =27,360,000
o 3 days x 70birr/day x 475 seat x 5 show x 48= 23,940,000
Total = 75,376,800
However, investments are to be carried on the cinema technology, capacity,
increment and renovation works. This will lead to price increment and show
time increment. Price increment will be made twice in five year time.
After expansion the seat capacity, will increase to 1189 seats shows will also be
increased
o Week days 55 birr
o Week end days 65 birr
o Week days(3D) 70 birr
o Week end days(3D) 80 birr

Revenue from existing capacity

 4 days x
304 seats x 55 birr/day x 6shows x 48 =19,261,440
 3 days x
304 seats x 65 birr/day x shows x 48= 17,072,640
 4 days x
475 seats x 70 birr/day x 6 show x 48= 38,304,000
 3 days x
475 seat x 80 birr/day x 6 show x 48=32,832,000
Revenue twice expansion = 107,470,080
 4 days x 410 seats x 55 birr/day x 6 shows x 48=25,977,600
 3 days x 410 seats x 65 birr/day x 6 show x 48 = 23,025,600
Total = 49,003,200

In 2009 E.C again price increment will be expected as follows:

o Week days 75 birr

o Week end days 85 birr
o Week days(3D) 90 birr
o Week end day(3D) 100 birr

Existing capacity(full capacity)

 4 days x 304 seats x 75 birr/day x 6 shows x 48 =26,265,600

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  3 days x 304 seats x 85 birr/day x 6 show x 48 = 22,325,760
 4 days x 475 seats x 90 birr/day x 6 show x 48 = 49,248,000
 3 days x 475 seats x 100 birr/day x6 show x 48 = 41,040,000
Total = 138,879,360

Expansion capacity (Full capacity)

 4 day x 410 seats x 75 birr/day x 6 shows x 48 = 23,424,000

 3 days x 410 seats x 85 birr/day x 6 shows x 48 = 30,110,400
Total = 65,534,400

The following will be the revenue to be collected from cinema

S/ Years Revenue From Assumed

N Capacity
utilization
1 2006 EC 32,972,009 16,239,999 49,212,118 31 %
2 2007 EC 41,215,149 20,299,999 61,515,148 39 %
3 2008 EC 55,640,450 27,405,000 83,045,450 53 %
4 2009 EC 80,678,655 39,737,248 120,415,903 59 %
5 2010 EC 125,051,916 61,592,734 186,644,650 91 %

Children play ground

Assuming the existing children play ground is visited by daily on average by

2500 visitors. The total annual visitors will be 2500 x 365= 912,500. Because of
the expansion the total daily visitors will increase on average to 4000 at the
begins of the operational. The annual visitors will be 1,825,000.

S/N Years Annual Expense Assumed

visitor population Capacity
utilization
1 2006 EC 1,460,000 17 25,152,86
2 2007 EC 1,825,000 17 31,441,076
3 2008 EC 2,190,000 18 39,301,345
4 2009 EC 2,555,000 22 56,986,951
5 2010 EC 2,920,000 30 88,329,773

Restaurant

As the expansion increase the capacity of the cinema as well as the children
playground the number of visitors will increase because of this capacity.

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 Because of the different reason mentioned in the market analysis customers
visiting the mall will also be continue to increase .

Hence, we assumed here the a steady growth 25% , 53%, 45%, 455% growth
rate is assumed respectively in the 2nd , 3rd, 4th years respectively.

7D

o With the up gradation of an additional effects and availing of new latest

movies the 7D visitors will be maximized. Accordingly, the sales growth
assumed to be 25%, 35%, 45% &55% for the 2 nd, 3rd 4th and 5th year
respectively.

Others:-

o The average sales growth for birth day package & shows package is
assumed to be 7% and 3% respectively.
 The average sales is assumed to be each 5%
o Cost of sales:- The rates of the actual cost of sales against the actual
revenue performance for fro previous periods were considered to calculate
the cost of sales of the projected revenues.
o Interest_ Loan a amortized for three years by 9.5% interested rate with a
quality employment
o Depreciation:- calculated including the newly fixed assets at the rate of
20&25% applicable by tax law.

11.2. Profit and loss statement and cash flow

- The profit and loss statement and cash flow projections have been made
based on the above assumptions. The five years projections have already
attached this document.

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 11.3. IRR and payback period

The internal rate of return is calculated based on the total investment out day.
Including the new investment. And the IRA is 31.7%. Which it indicates the
feasibility of the project? The pay lack period is less than a year.

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