Pre-Feasibility Study

CUT FLOWERS FARM
(Roses)

Small and Medium Enterprise Development Authority
Government of Pakistan
www.smeda.org.pk

HEAD OFFICE 6th Floor LDA Plaza, Egerton Road, Lahore. Tel: (92 042) 111-111-456 Fax: (92 042) 6304926-7 Helpdesk@smeda.org.pk
REGIONAL OFFICE PUNJAB 8th Floor LDA Plaza, Egerton Road, Lahore. Tel: (92 042) 111-111-456 Fax: (92 042) 6304926-7 helpdesk@smeda.org.pk REGIONAL OFFICE SINDH 5TH Floor, Bahria Complex II, M.T. Khan Road, Karachi. Tel: (021) 111-111-456 Fax: (021) 5610572 helpdesk-khi@smeda.org.pk REGIONAL OFFICE NWFP Ground Floor State Life Building The Mall, Peshawar. Tel: (091) 9213046-47 Fax: (091) 286908 helpdesk-pew@smeda.org.pk REGIONAL OFFICE BALOCHISTAN Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) 831623, 831702 Fax: (081) 831922 helpdesk-qta@smeda.org.pk

December, 2006

2006 Library Officer PREF-27/December2006/Rev2 .Roses DISCLAIMER The purpose and scope of this information memorandum is to introduce the subject matter and provide a general idea and information on the said area. and the actual results may differ substantially from the presented information. 2001 December . Therefore. The prospective user of this memorandum is encouraged to carry out his/ her own due diligence and gather any information he/she considers necessary for making an informed decision. Although. the contained information may vary due to any change in any of the concerned factors.Pre-Feasibility Study Cut Flowers Farm . the content of this memorandum should not be relied upon for making any decision. All the material included in this document is based on data/information gathered from various sources and is based on certain assumptions. The contents of the information memorandum do not bind SMEDA in any legal or other form. due care and diligence has been taken to compile this document. SMEDA does not assume any liability for any financial or other loss resulting from this memorandum in consequence of undertaking this activity. investment or otherwise. DOCUMENT CONTROL Document No. Revision Prepared by Issue Date Revision Date Issued by PREF-27 2 SMEDA-Punjab October 5.

10 Land Flower Plants Water Labor Pesticide Sprays Fertilizers Building & Shed Farm Fixtures & Tools Packing Transportation 6 6 6 7 8 8 8 9 9 9 10 10 10 10 11 9 10 11 12 OUTPUT OVERALL PICTURE GENERAL FACTS & FIGURES FINANCIAL ANALYSIS Capital Investment Working Capital Initial Financing 11 11 12 12 12 12 12 12.Pre-feasibility-study 1 2 3 3. 3 8. 3 13 14 15 16 17 REGULATION KEY SUCCESS FACTORS THREATS ASSUMPTIONS FINANCIAL STATEMENTS 13 13 13 13 14 PREF-27/December 2006 /Rev2 3 . 7 8. 2 Cut Flower Farm (Roses) 4 4 4 5 5 INTRODUCTION TO SMEDA PURPOSE OF THE DOCUMENT PROJECT PROFILE Project Brief Project Rationale 4 5 6 7 8 PROCESS FLOW CHART VIABLE ECONOMIC SIZE CURRENT INDUSTRY STRUCTURE SALES & MARKETING ISSUES FARM INPUTS 8. 1 3. 1 8. 9 8. 6 8. 2 8. 1 12. 5 8. 8 8. 2 12. 4 8.

Fruits & Vegetables. Pre-feasibility Studies may form the basis on which an important investment decision maybe made. technology and human resource development. The all-encompassing sectoral development strategy involved overhauling of the regulatory environment by taking into consideration other important aspects including finance. Whereas the task of SME development at a broader scale still requires more coverage and enhanced reach in terms of SMEDA’s areas of operation. 3 PROJECT PROFILE The project is about starting a cut flower farm near pattoki PREF-27/December 2006 /Rev2 4 .Pre-feasibility-study Cut Flower Farm (Roses) 1 INTRODUCTION TO SMEDA The Small and Medium Enterprise Development Authority (SMEDA) was established with the objective to provide fresh impetus to the economy through the launch of an aggressive SME support program. Marble & Granite. These services include identification of viable business opportunities for potential SME investors. Gems & Jewelry. SMEDA provides Help Desk Services as well as development of project specific documents. In depth research was conducted and comprehensive development plans were formulated after identification of impediments and retardants. marketing. financing and business management. Since its inception in October 1998. SMEDA adopted a sectoral SME development approach where key sectors were selected on the criterion of SME presence. Textiles. Transport and Dairy. The document covers various aspects of the business venture from project concept development to. Leather & Footwear. Pre-feasibility Studies and Business Plan Development are some of the services provided to enhance the capacity of individual SMEs to capitalize on viable business opportunities. 2 PURPOSE OF THE DOCUMENT Pre-feasibility studies are developed primarily to facilitate potential entrepreneurs in project identification for investment. Surgical Instruments. Marine Fisheries. In order to facilitate these investors. SMEDA has so far successfully formulated strategies for key sectors including. Along with the sectoral focus a broad spectrum of Business Development Services is also being offered to the SMEs by SMEDA. These documents consist of information required to make well researched investment decisions.

Roses are the most traded of all cut flower varieties around the world. especially roses. Besides earning money one also helps keep the environment clean and beautiful. the high returns as compared to any other agricultural venture makes it economically viable. seminars. Though it is a capital-intensive project. Despite lack of knowledge on modern floricultural production techniques. 2 Project Rationale Growing cut flowers. PREF-27/December 2006 /Rev2 5 . The resource rich local soil provides ideal agronomic conditions for the production of cut flowers. difficulty in obtaining the latest varieties and the lack of infrastructure.Pre-feasibility-study 3. Demand for cut flowers. however it is an infant industry as far as its growth is concerned. especially roses. Low cost of labor combined with very reasonable land lease rates and helpful climatic conditions for most part of the year serve as the basis for making this project attractive. Rose plants are easily available and are very cheap. 3. the industry is continuously attracting new entrants. birthday parties. 1 Project Brief Cut Flower Farm (Roses) Cut flowers growth is not a new phenomenon in floricultural sector of Pakistan. and other such social gathering events are incomplete without floral decorations. is a very profitable business if done properly on commercial basis. The trend in Pakistan is no different. is growing tremendously as more and more people are becoming aware of the beauty of flowers as decorative items. Weddings. This pre-feasibility is being prepared by SMEDA and is intended to provide general information on the opportunity for an investor in the floricultural sector to develop cutflowers farm of roses for supply in local market.

and Islamabad. especially roses. Though Kasur and Sheikhupura districts have also developed some expertise in this field. flowers are distributed to all parts of the country including Karachi. PREF-27/December 2006 /Rev2 6 . yet Pattoki still serves as the hub market for all floricultural trade. Peshawar.Pre-feasibility-study Cut Flower Farm (Roses) 4 PROCESS FLOW CHART Picking (Early morning) Washing in clean water Treatment with life enhancing solution Packing in wooden and/or cardboard boxes Visual Inspection Drying with natural air Distribution via train and/or truck Sales & marketing through wholesalers and/or flower shops 5 VIABLE ECONOMIC SIZE A small farm of 5 acres would be economically viable considering the amount of effort and money required and returns expected. Patto ‘mandi’ is the major forum for buying and selling of fresh cut flowers. Besides rose growing fields of 5 acres. From Pattoki. another 2 kanal of land is required to perform post-harvesting functions and other related chores. Lahore. 6 CURRENT INDUSTRY STRUCTURE Pattoki serves as the center for floricultural activity in Pakistan.

however primitive they may be. There are two basic market segments for flowers: a) Retail sales to consumers b) Wholesale sales to corporate and institutional customers In every major city of the country there are numerous retail outlets selling all kinds of flowers to consumers. Once the party is over the flowers go to the bin. These outlets could be anything from a roadside corner kiosk to a proper retail outlet shop in some high-end urban locality. Some shops buy directly from ‘mandi’ as well. Whatever pre-harvest and postharvest handling techniques are being used is the direct result of their personal ingenuity. From Begumkot ‘mandi’ either the shopkeepers or wholesale PREF-27/December 2006 /Rev2 7 . The major reason for this slow development process has been the lack of interest on part of progressive farmers to enter this field. For party decorators high quality is not an issue as they use the flowers only once. The credit goes to small and poor farmers who have kept on going without much technical and/or financial support over the years. They buy from Pattoki ‘mandi’ in the morning and bring their product to Begumkot (Sheikhupura District) ‘mandi’ and resell it for profit. They buy in bulk quantities. Nine out of ten times it’s the distributor who is the supplier to most of small shops in the city. is still growing. 7 SALES & MARKETING ISSUES Local market of cut flowers. especially for different varieties and colors in roses. This they achieve by eliminating the middleman. But this setup is quite rare. Besides retail outlets the major buyers are corporate and institutional customers. quality is an important issue. Pattoki area is the major supplier to fulfill this demand. Some small traders have developed another sale channel. Majority of the industry is unorganized. There are only few major players in this industry.Pre-feasibility-study Cut Flower Farm (Roses) Overall. there is great potential for anyone who comes into this field and does farming on progressive basis. This is not a good sign considering the years this sector has been around. All these institutional as well as corporate customers are fed by wholesale dealers and distributors. offices and most importantly party decorators and marriage halls. As far as hotels and offices are concerned. they don’t need long life product. But again as flowers are changed everyday. Therefore. still going through birth pains. A major advantage of buying from distributors is the availability of credit facility. Buying directly from the farms give bigger shops access to better quality flowers as flowers do not go through too many different hands and there is less wear and tear. These shops are either fed directly from farms or through a middleman or distributor. Another important aspect of buying directly from farms is better profit margins for both farm owners as well as shopkeepers. this sector is still in infancy. These include hotels.

lease rate in Pattoki area is Rs 15000 per acre per year. During this period. drying. the fields are to be looked after as if they are in production. At present. 2 Flower Plants Area(in acres) Cost / Rate 700. Faisalabad. these six months old plants at the farm are to be taken care of till October. and labor requirements remain the same as for a commercially running farm. Gujranwala. packing and other related facilities.527. Rose flowers produced during this development stage are not cut along with stem from the plant.450 plants of rose would be required.000 Amount / Other 0. Only the flower is picked but not sold commercially because it is not yet fit for commercial sale. An important point is that the average life of a rose flower plant is 5 years.585 Roughly 11. Starting from January.319 75. pesticide spray. etc.Pre-feasibility-study Cut Flower Farm (Roses) distributors and traders buy this stuff and sell in cities like Lahore.037 5. Land is to be obtained on lease.000 15. In all 54. Water. New plants are grafted in July by the nurseries and are ready to be transferred to the field in January. PREF-27/December 2006 /Rev2 8 . approximately 4-ft2 area for each rose plant.000 plants would be planted in each acre. Description Land price / acre Land lease cost /acre / year Room Shed Field Total Land Requirement Land purchase price Land lease cost 8.002 0. 8 FARM INPUTS Following inputs are required: 8. Each six-month old plant costs Rs 10 on average when bought from nursery. These plants would be brought from a commercial nursery. fertilizer. washing. After 5 years all the plants would have to be replaced with new ones. From November you start to take commercial production from the farm.04 3.000 5. 1 Land Land requirement is 5 acres for growing flowers and 2 kanals as area for sorting.

These laborers would also act as pickers. But that cost is negligible. If fresh canal water were available.000 Between April and November.000 240. The average cost of water and upkeep of water channels costs about Rs 1. etc.000 .month. this would be the ideal situation. as is for any living thing. 4 Labor General formula is 1 person per acre excluding the foreman and farm manager.000/month/acre. fields are irrigated every week.500 per acre per year. the quality of water is good and it is very useful for plants. One pesticide spray costs Rs 5000 resulting in total cost of sprays per acre per year is Rs 25. sorters. Post Manager/Accountant Foreman Semi-Skilled Workers Total 8. 3 Water Cut Flower Farm (Roses) Water is a regular requirement of flower plants. if canal water were available it would cut out the expenses of installation of a tube well and the electricity or diesel cost of running that tube well. In all 5 laborers would be required. Table 6-8-1 Required Manpower in the Year 1 of the Operation. 5 Pesticide Sprays # of personnel 1 1 5 7 Salary/month 8.000 to install a reasonable capacity and quality pump. There would be 1 foreman to keep the work moving and one farm manager cum accountant to manage the farm overall. Otherwise the normal practice is irrigating every 20-25 days. Secondly.000 6. May and June. packers. During peak season. canal water is available for irrigation. Firstly. But to be on the safe side water-pump should also be installed at the farm. Table6-8-2 Material Required Material Pesticide Sprays PREF-27/December 2006 /Rev2 Cost/Acre(Bag) 5.000 9 Acres/Bags 5 Amount 25. cleaners. It would cost about Rs 50. This Laborer would cost Rs 4. 8. one spray of pesticides is required every fortnight. Foreman could be hired for Rs 6000/.000 4. During April. whereas the manager cum accountant would be hired for Rs 8. temporary pickers can be hired on daily wages. From December till March only one pesticide spray is required per month as prevention against fungus.000 1st year cost 96.Pre-feasibility-study 8.000 150.000/month.000. In Pattoki area.000 72.

8 Farm Fixtures & Tools Basic farm tools and fixtures would include tools for pruning the plants. This construction rate is based on the fact that the room and the shed would be made up of semi-baked bricks using local masonry skills. and other post harvest activities. etc. The construction rate is Rs 100 per square feet. Usual gross weight for cardboard cartons is 15-20 Kg. an 8-10 Kg ice block is also placed along with flowers to keep their temperature down. About 100 boxes are enough to keep a cycle of rotation going. 8. is also placed in each box for cooling effect. Besides storage room. The idea is to cut the initial capital investment. Cardboard cartons are usually used for short distance transportation. Only a small room for storage purpose is required. sorting. Each wooden crate can carry about 25-30 Kg flowers (one-Kg flowers is roughly 60 individual stems). This area is to be used for washing. Besides these tools. For long distance transportation.000. Cardboard carton usually cost Rs 35/box. one proper shed is required. 7 Building & Shed Cost/Acre(Bag) 500 Acres/Bags 24 Amount 60. 9 Packing Rose flowers are either packed in specially designed wooden crates or else in cardboard cartons. Table 6-8-3 Fertilizers Required Material NPK 8. The shed should be 40’x40’ covered area with open sides for air passage. other fixtures are required including clean water hand pump. tubs. 6 Fertilizers Cut Flower Farm (Roses) Flower plants require DAP. potash. and removing leaves. A maximum of 10’x10’ room is enough. If they are to be used for long distance transportation.But for this feasibility we are using the combination of NPK which cost 500/bag and 2 bags per month per acre are required. This is an important requirement. All items would be Pakistan made and are easily available. 3 bags of potash are required every quarter at Rs 700/bag. Total capital requirement for all these items is Rs 40. 4 bags of DAP are required every quarter at Rs 1000/bag. packing. ice. picking the flowers.000 This project does not require any major building structure. tables. Wooden crates are reusable over longer periods of time. 8. and 4 bags of ammonium nitrate are required every quarter at Rs 350/bag. wooden crates and fans. Each wooden crate would cost Rs 160. packed in plastic bag. Sometimes one or two bags of urea are also required. PREF-27/December 2006 /Rev2 10 .Pre-feasibility-study 8. and ammonium nitrate fertilizers for proper yield.

Therefore. the situation gets better steadily and slowly. one rose stem sells minimum for Rs 1 Sale is against credit and usual credit period is 15 days. To take these crates and/or cartons from farm to railway station a motorcycle cart is used which can be hired on rent at very nominal rates. there is no flower for commercial sale. But if we average out the price over the period of 12 months. 10 OVERALL PICTURE The over-all picture would go something like this that once you have planted six-month old rose plants in the fields in January. From mid April till mid June. about 20 flowers are not up to the required standard and are destroyed either by man handling or by some disease. The complete produce of the farm would be sold in open market and to wholesalers. In the first year. 9 OUTPUT Production of rose flowers has different seasonal variations. assessed to be about 70% of total production in a year. From mid June till October. PREF-27/December 2006 /Rev2 11 . From November onwards the farm would be ready for production. Flowers would bloom but they would not be used for commercial sale as their stem would still be smaller and if cut at that time it would destroy the plant and/or reduce its life. only two months of production would be available for commercial sales. you have to look after the farm in all respects. on daily basis. etc. Between November and March. including fertilizers. Next year approximately 80% capacity would be reached and in the third year farm would be operating on full capacity.Pre-feasibility-study Cut Flower Farm (Roses) 8. Direct supply to flower shops is possible if the offer is attractive. from there on till October. It varies from Rs 35 for hundred stems to Rs 550 per hundred stems. Sale price also depends on season. one plant of rose flower has an average yield of 50 flowers per year. These are sold as petals.10 Transportation Flowers packed in wooden crates and cardboard cartons are transported to big cities from Pattoki via train. but without any yield. maximum yield is obtained. ending in December. quality and size of flowers. pesticides. only 30 flowers per plant per year are available for commercial sales. On an average. Out of these 50.

173 621.585 250.2 Working Capital Working Capital Raw material inventory Upfront land lease rental Cash Total Working Capital 12.701 818.000 423.644 Rs.000 21.3 Initial Financing Initial Financing Debt Equity Total Investment Rs. 153.000 50.345 Rs.000 594. 621.1 Capital Investment Capital Investment Building/Infrastructure Land tillage and saplings Machinery & Equipment Pre-operating costs Total Capital Costs 12.173 1.500 12 FINANCIAL ANALYSIS 12.633.701 PREF-27/December 2006 /Rev2 12 . 98.242. of saleable flowers /plant / year Total available saleable flowers/year 5 acres 54.Pre-feasibility-study Cut Flower Farm (Roses) 11 GENERAL FACTS & FIGURES *Farm at 100% capacity Total Area Total no.058 75. of rose flower plants Average no.450 30 1.

000 plants are planted per acre Farm is based in Pattoki area Already grafted plants would be bought from a nursery Canal & Pump water would be used for irrigation PREF-27/December 2006 /Rev2 13 .888 2. 14 KEY SUCCESS FACTORS The proposed project would have a number of competitive advantages: 1) 2) 3) 4) Low cost of labor Lower rent rate of available land Growing local market Country profile suites this project. There are certain diseases that can affect flowers detrimentally. flowers should be transported from the field as soon as possible in order to take advantage of its short life.25 13 REGULATION There is no government regulation. Without any life enhancing treatment. 15 THREATS Flowers are perishable products with a limited life span.Pre-feasibility-study Cut Flower Farm (Roses) Table 12-1 Project Returns Project IRR NPV Payback Period 59% 1. 16 ASSUMPTIONS The proposed project is based on following assumptions: 1) 2) 3) 4) 5) Only rose flowers would be grown Approximately 11. which affects this business.838. its shelf life is three days to four days maximum. but timely pesticide sprays act as a defense against such threats. Therefore.

083.965) (12.858 32.723 1.288 150.299.909 129.340 304.867.575 117.563 1.607.357 172.190 1.210 720.893.000 75.262.585 1.326 1.190 373.670.051.570 165. mail.941 4.500 1.009.036 1.021 2.262 129.530 72.373 10.384 1.109 143.416 (99.287 2.050 319.438 1. and training costs Subtotal Operating Income Earnings Before Interest & Taxes Interest expense on long term debt (Debt facility : Bank 1) Interest expense on long term debt (Debt facility : Bank 2) Subtotal Earnings Before Tax Tax NET PROFIT/(LOSS) AFTER TAX Balance brought forward Total profit available for appropriation Dividend Balance carried forward 421.757 1.867.183 1.818.803 2.506.050 4.264 75.484 204.050 4.938 1.769 1.560 1.964 (99.803 2.979 292.092.759.881 2.853 6.514.050 4.830 1.733 4.681 61.656 72.566 1.578.488.340 311.924 75.357 8.624 1.592 1.667.379 3.320 165.723 72.989 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 1.972.832 1.954.092.911 1.192 180.052 7.916 334.941 3.769 1.109 8.000.000 75.394 274.500 72.009.050 4.043 10.530 1.830 394.585 1.592 72.585 1.190 1.369.095 1.140 (99.015 1.Pre-feasibility-study Cut Flower Farm (Roses) 17 FINANCIAL STATEMENTS Income Statement Year 1 Revenue Cost of sales Cost of goods sold 1 Operating costs 3 (direct electricity) Operating costs 4 (direct water) Total cost of sales Gross Profit General administration & selling expenses Administration expense Administration benefits expense Land lease rental expense Travelling expense Communications expense (phone.340 1.305 5.766.264 8.545 14.757 72.475 157.317 6.585 1.048 6.109 10.550 2.818.660 1.689 72.972.803.607.925 159.962 7.588 1.574 11.414.561 1.020.585 1.474 1.607.474 1.766.083.210 1. etc.830 1.574 173.061.645 150.585 1.930) (99.157 1.656 1.631 1.930) 720.270.050 316.867.098.053 820.729 182.320 4.592 1.124 2.485 2.488.738 6.793 72.752 7.190.670.336.681 1.585 1.679 1.585 1.365 75. fax.) Depreciation expense Amortization of pre-operating costs Amortization of legal.052 175.252 32.818.180 9.749 75.761 1.210 156.375.766.493.050 326.575.925 1.320 5.191.575.270.689 1.340 308.023 2.061.010 123.722 2.715 720.357 7.554 6.252 1.151 2.409 136.860.413.976 (12.303 75.020.488.181 75.972.624 72.914 166.387 136.941 162.754 1.308 2.009.965) 86.717.585 1.778 158.561 72.916 1.340 314.052 5.050 4. licensing.873 61.769 297.930) 153.416 11.493.337 194.852 12.092.689 10.086.925 3.964 86.972 1.916 1.618.515 143.612 75.406.260.987.899 1.930) 14 PREF-27/December 2006 /Rev2 .154.670 6.050 323.784 7.873 1.501 1.373.652 6.759.083.712 7.258 7.270.670.218 8.193 184.514.858 1.047 6.930) (99.109 175.454 2.029 8.585 1.373 11.050 330.020.575.060 75.062 150.731 7.514.803 416.474 315. internet.406.373 179.052 168.340 317.793 1.631 1.631 353.

173 8.941 3.800 35.585 5.492 39.345 145.000 39.650 7.200 15.600 45.5 76.489.973 4.425.267.098 122.585 1.742 5.021 1.585 927.585 219.598.800 118.380.020.593.758.284 214.1 11.373 100.200 40.173 5. licensing.350 534.701 621.585 10.525 7.173 1.530 44.758.473 17.052 6.050 415.113 35.000 25.926.849.425.357 7.800 4.098 2.400 30.000 24.464.818.173 720.5 12.000 436.361 961.225 99.5 15 PREF-27/December 2006 /Rev2 .546 45.150 59.641.585 7.373 10.700 6.083 24.282 45.850 8.627 119.000 42.600 20.701 21.0 45.661.0 105.701 1.683.682 10.100 237.390.760 39.225 6.989 75.573.4 12.349.0 153.399 90.179.342 108.173 7.000 364.149 75.000 30.113 3.683.267.713.425 176.800 10.950 17.000 44.000 580.000 724.113 114.644 12.000 148.173 3.243 961.607.179.492 107.600 9.514.000 35.408 75.700 475.173 621.172.585 8.568 2.000 508.320 4.009.083 130.173 (99.5 621.400 5.747 194.098 30.727 75.195 131.550 10.415 86.120 78.361 17.000 797.759.191 75.400 356.585 4.092.0 98.925 2. & training costs Total Intangible Assets TOTAL ASSETS Liabilities & Shareholders' Equity Deferred tax Long term debt (Debt facility : Bank 1) Long term debt (Debt facility : Bank 2) Total Long Term Liabilities Shareholders' equity Paid-up capital Retained earnings Total Equity TOTAL CAPITAL AND LIABILITIES 250.821 137.821 17.530 91.891.874.450 178.546 76.340 3.440.593.282 84.546 10.578 440.270.996 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 12.173 4.244.000 292.340 4.173 1.000 621.000 50.609.341.380 69.173 621.000 621.750 297.198.000 621.578 621.750 4.564.631.048 235.880 8.930) 521.345 440.701 251.492 4.282 9.585 423.877 75.585 3.000 652.000 18.021 13.383 1.390 144.242.000 594.681 2.109 75.464.210 1.000 621.228.000 220.510 692.049 75.000 621.173 621.5 12.162 1.000 621.000 21.225 42.135.173 10.958.763 95.926.120 82.530 7.310 159.099 75.Pre-feasibility-study Cut Flower Farm (Roses) Balance Sheet Year 0 Assets Current assets Cash & Bank Accounts receivable Finished goods inventory Equipment spare part inventory Raw material inventory Pre-paid annual land lease Total Current Assets Fixed assets Land Building/Infrastructure Saplings & Land Tillage Machinary & Equipment Total Fixed Assets Intangible assets Pre-operation costs Legal.147.000 621.030.661.000 234.900 13.058 75.109 9.242.0 621.681 8.902.000 45.

172.878) 674.264 72.250.585) 1.573.585 (75.585 (75.000 (29.760 (818.399 7.098.585) 1.000 16 PREF-27/December 2006 /Rev2 .120 Year 5 1.000 18.585) 1.038 12.585) (205.473 18.415 5.198.principal repayment Debt facility : Bank 2 .120 4.465.493.413.373 10.045.585 (75.173 1.120 2.598.191.465.760 692.295 75.373 10.050 4.340 17.050) 1.336.321) (18.Pre-feasibility-study Cut Flower Farm (Roses) Cash Flow Statement Year 0 Operating activities Net profit Add: depreciation expense amortization of pre-operating costs amortization of training costs Deferred income tax Accounts receivable Finished goods inventory Equipment inventory Raw material inventory Cash provided by operations Financing activities Debt facility : Bank 1 .620 692.585) 1.752 72.172.015 72.624.000 (4.340 5.920) (14.050 3.564.537) (19.598.principal repayment Add: land lease expense Land lease payment Additions to Debt facility : Bank 1 Additions to Debt facility : Bank 2 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 Year 1 (99.080 75.244.415 Year 7 1.564.380 2.030.244.849.585) (180.323.340 7.000 250.585) (234.399 Year 8 1.173 621.000 (4.585 75.373 Year 10 1.585 (75.050 0 (5.760 Year 3 1.573.665 10.198.594) (231.172.198.740 75.399 8.342) (10.415 5.166.120 4.473 18.940) 1.320 (234.364 75.573.763 8.849.364 7.164 (205.340 6.764) (21.763 10.598.000 (4.217) 1.030.198.323.379 72.392.715 72.050 2.469) 1.930) 72.050 1.120 2.585 (75.527) 250.610 8.140.120 5.244.000 (3.050 4.000 75.667.081) 880.585) 1.250.260.760 692.002) 235.140 72.000 (9.878) 75.543.000 250.050 4.585 (75.594) 75.380 1.287 18.564.284) (11.051) (50.399 7.701) (818.763 8.058) (75.763 Year 9 1.585 (75.585 2.000 2.733 72.585 (75.050 4.932) (180.392.038 (98.340 (17.984 5.701) 905.701) 250.030.120 Year 6 1.030.050 4.172.373 12.578.000 (4.380 Year 4 1.585) 621.564.585 (75.701) 75.058) (98.115) (16.543.000 250.970.984 75.568) (12.473 692.598.043 72.760 1.473 Year 2 820.050 4.380 1.196) (13.038 12.120 4.372) 1.000 (22.610 75.585) 1.740 1.415 7.989 1.305 72.850) 1.849.624.295 4.900) 1.573.849.

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