roof tiles manufacturing unit ( light weight )

8/12/2019 Roof Tiles Manufacturing Unit ( Light Weight )

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Pre-Feasibility Study(Roof Tiles Manufacturing Unit Light Weight)

Small and Medium Enterprises Development AuthorityMinistry of Industries & Production

Government of Pakistanwww.smeda.org.pk

HEAD OFFICE4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road,

LahoreTel: (92 42) 111 111 456, Fax: (92 42) 36304926-7

[email protected]

REGIONAL OFFICEPunjab

REGIONAL OFFICESindh

REGIONAL OFFICEKhyber Pakhtunkhwa

REGIONAL OFFICEBalochistan

3rd Floor, Building No. 3,Aiwan-e-Iqbal Complex,

Egerton Road Lahore,Tel: (042) 111-111-456Fax: (042) 36304926-7

[email protected]

5TH Floor, BahriaComplex II, M.T. Khan Road,

Karachi.Tel: (021) 111-111-456

Fax: (021) [email protected]

Ground FloorState Life Building

The Mall, Peshawar.Tel: (091) 111-111-456


Bungalow No. 15-AChaman Housing Scheme

Airport Road, Quetta.Tel: (081) 2831623, 2831702


Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost

December, 2013


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Table of Content19T1 19T 19TDISCLAIMER 19T .......................................................................................... 2

19T2 19T 19TPURPOSE OF THE DOCUMENT 19T ....................................................... 3

19T3 19T 19TINTRODUCTION TO SMEDA 19T .............................................................. 3

19T4 19T 19TINTRODUCTION TO SCHEME 19T ........................................................... 4 19T5 19T 19TEXECUTIVE SUMMARY 19T ...................................................................... 4

19T6 19T 19TBRIEF DESCRIPTION OF THE PROJECT 19T ...................................... 4

19T7 19T 19TCRITICAL FACTORS 19T ............................................................................ 5

19T8 19T 19TINSTALLED AND OPERATIONAL CAPACITY 19T............................... 5

19T9 19T 19TGEOGRAPHIC POTENTIAL FOR INVESTMENT 19T........................... 5

19T10 19T 19TPOTENTIAL TARGET MARKETS / CITIES 19T ..................................... 6

19T11 19T 19TPRODUCTION PROCESS FLOW 19T ...................................................... 7

19T12 19T 19TPROJECT COST SUMMARY 19T .............................................................. 8

19T12.1 19T 19TProject Economics 19T ................................................ ............................................... 9 19T12.2 19T 19TProject Financing 19T ................................................................................................. 9 19T12.3 19T 19TProject Cost 19T ........................................................................................................ 10 19T12.4 19T 19TSpace Requirement 19T ........................................................ ................................... 10 19T12.5 19T 19TMachinery and Equipment 19T ...................................................... .......................... 11 19T12.6 19T 19TOffice Equipment 19T ............................................................................................... 12 19T12.7 19T 19TRaw Material Requirements 19T ................................................... .......................... 12 19T12.8 19T 19THuman Resource Requirement 19T ...................................................... ................. 13 19T12.9 19T 19TRevenue Generation 19T ......................................................................................... 13 19T12.10 19T 19TOther Costs 19T ................................................... ...................................................... 13

19T13 19T 19TContact Details of Suppliers, Experts and Governmentinstitutions 19T ....................................................................................................... 14

19T14 19T 19T ANNEXURE 19T .......................................................................................... 15

19T14.1 19T 19TIncome Statement 19T ................................................. ............................................. 15 19T14.2 19T 19TProjected Balance Sheet 19T .................................................................................. 16 19T14.3 19T 19TCash Flow Statement 19T ..................................................... ................................... 17 19T14.4 19T 19TUseful Project Management Tips 19T .................................................................... 18 19T

14.519T

19T

Useful Links19T

........................................................................................................ 18 19T15 19T 19TKEY ASSUMPTIONS 19T .......................................................................... 20


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11 DDIISS CC LL A A IIMMEE RR This information memorandum is to introduce the subject matter and provide ageneral idea and information on the said subject. Although, the material included inthis document is based on data / information gathered from various reliable sources;

however, it is based upon certain assumptions which may differ from case to case.The information has been provided on as is where is basis without any warrantiesor assertions as to the correctness or soundness thereof. Although, due care anddiligence has been exercised to compile this document, the contained informationmay vary due to any change in any of the concerned factors, and the actual resultsmay differ substantially from the presented information. SMEDA, its employees oragents do not assume any liability for any financial or other loss resulting from thismemorandum in consequence of undertaking this activity. The contained informationdoes not preclude any further professional advice. The prospective user of thismemorandum is encouraged to carry out additional diligence and gather any

information which is necessary for making an informed decision including takingprofessional advice from a qualified consultant / technical expert before taking anydecision to act upon the information.

For more information on services offered by SMEDA, please contact our website:www.smeda.org.pk

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST - 2
http://www.smeda.org.pk/http://www.smeda.org.pk/http://www.smeda.org.pk/


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22 PP UURR PP OO SS EE OO FF TTHHEE DDOO CC UUMMEE NNTT The objective of the pre-feasibility study is primarily to facilitate potentialentrepreneurs in project identification for investment. The project pre-feasibility mayform the basis of an important investment decision and in order to serve thisobjective, the document / study covers various aspects of project concept

development, start-up, production, marketing, finance and business management.The purpose of this document is to facilitate potential investors in Roof TilesManufacturing Unit (Light Weight) by providing them with a general understandingof the business with the intention of supporting potential investors in crucialinvestment decisions.

The need to come up with pre-feasibility reports for undocumented or minimallydocumented sectors attains greater imminence as the research that precedes suchreports reveal certain thumb rules; best practices developed by existing enterprisesby trial and error, and certain industrial norms that become a guiding source

regarding various aspects of business set-up and its successful management. Apart from carefully studying the whole document, one must consider critical aspectsprovided later on, which form basis of any investment decision.

33 IINNTTRR OO DDUUCC TTIIOO NN TTOO SS MMEE DD A A The Small and Medium Enterprises Development Authority (SMEDA) wasestablished in October 1998 with an objective to provide fresh impetus to theeconomy through development of Small and Medium Enterprises (SMEs).

With a mission "to assist in employment generation and value addition to thenational income, through development of the SME sector, by helping increase thenumber, scale and competitiveness of SMEs" , SMEDA has carried out sectoralresearch to identify policy, access to finance, business development services,strategic initiatives, institutional collaboration and networking initiatives.

Preparation and dissemination of prefeasibility studies in key areas of investmenthas been a hallmark of SME facilitation by SMEDA.

Concurrent to the prefeasibility studies, a broad spectrum of business developmentservices is also offered to the SMEs by SMEDA. These services include

identification of experts and consultants and delivery of need based capacity buildingprograms of different types in addition to business guidance through help deskservices.



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44 IINNTTRR OO DDUUCC TTIIOO NN TTOO SS CC HHEE MMEE Prime Ministers Youth Business Loan scheme, for young entrepreneurs, with anallocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to providesubsidised financing at 8% mark-up per annum for one hundred thousand (100,000)beneficiaries, through designated financial institutions, initially by National Bank of

Pakistan (NBP) and First Women Bank Ltd. (FWBL).Loans from Rs.0.1 million to Rs.2.0 million with tenure upto 8 years inclusive ofgrace period of 1 year and a debt : equity of 90 : 10 will be disbursed to SMEbeneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwa,Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally AdministeredTribal Areas (FATA).

55 EE XXEE CC UUTTIIVVEE SS UUMMMM A A RRYY Light Weight Roof Tiles Manufacturing Unit is proposed to be located in adjoiningareas and major towns of any of the major cities of Balochistan.

Roof tiles used in Balochistan are generally available in the size 12x12 (one Sqft.)However, on demand, roof tiles of different specifications can also be manufactured.

Installed capacity of the proposed unit is 288,000 tiles and its initial utilization will be230,400 tiles at 80% in year 1.

Total Cost Estimates is Rs. 2.15 Million with fixed investment Rs. 1.69 Million andworking capital Rs. 0.46 Million.

Given the cost assumptions, internal rate of return (IRR) and payback are 33% and

3.97 years respectively

66 BB RR IIEE FF DDEE SS CC RR IIPP TTIIOO NN OO FF TTHHEE PP RR OO JJ EE CC TT Key parameters pertaining to the proposed project are briefly described as under:

Technology: Traditional molds (known as firma by the local industry) andsimple masonry equipment would be required to produce light weight roof tiles forthe use of construction industry.

Location: The unit would be located in urban areas such as Quetta, Mastung,

Kalat, Sibi, Pishin, Killa Saifullah, Ziarat and other similar cities and towns of thecountry, where access of buyers is easy and all facilities are available.

Product: The unit would produce light weight roof tiles to fulfil the local housingconstruction demand of tiles of different sizes and strengths depending upon theindividual requirements of the customer.



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Target Market: Main target market for the proposed project is the local industry.However customers from neighbouring country Afghanistan can also be targetedsince reconstruction of the country is in progress.

Employment Generation: The proposed unit will provide direct employment to04 people. Financial analysis shows the unit shall be profitable from the very first

year of operation.

77 CC RR IITTIICC A A LL FF A A CC TTOO RR SS Establishment of the unit in areas where basic facilities including water and

electricity are available. Material procurement skills. Training of staff to increase efficiency. Effective distribution networks.

88 IINNSS TT A A LLLLEE DD A A NNDD OO PP EE RR A ATTIIOO NN A A LL CC A A PP A A CC IITTYY The financial statements for this project are based on the production of 900 tiles/day. However, the project can be initiated with the production of 300 tiles / day insmaller towns and other areas where the demand is comparatively lower. Initialproduction capacity of unit is assumed to be 80% which will increase @ 10%annually and attain maximum capacity of 95 %.

TTaa bb llee 11 :: PP r r oo dd uu cc tt iioo nn CC aa pp aa cc iitt yy

AverageDaily

Production/ person

No. ofLabour

Total DailyProduction

AnnualProduction

(320days/Yr)

@ 100%capacity

CapacityUtilizationin Year-1

80%

FinishedTiles

Inventory

Tilesavailablefor Sale(Year-1)*

300 3 900 288,000 230,400 9,600 220,800

99 GG EE OO GG RR A A PP HHIICC PP OO TTEE NNTTII A A LL FF OO RR IINNVVEE SS TTMMEE NNTT Construction activities and its output is an integral part of a countrys economy andindustrial development. The construction industry is often seen as a driver ofeconomic growth especially in developing countries. This industry can mobilize andeffectively utilize local human and material resources in the development andmaintenance of housing and infrastructure to promote local employment andimprove economic efficiency.

There are different types of roof options including reinforced concrete structure, claybricks, metal roof etc. Due to the soaring construction costs, low cost roof options



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are in high demand in most of the rural and peri urban areas of the country. The tilesare used in a large number of construction projects including non-traditional /traditional housing, community centers, warehouses and factories etc. It is alsosuitable for schools and other public buildings especially in the rural areas.

Demand for such type mainly exists for housing projects in towns and smaller cities.

Additionally, in larger cities the low cost roofs are used in suburban housingschemes, warehouses and factories. The production unit can be established in citiesand towns where access to basic raw materials including cement, sand and water iseasily available.

11 00 PP OO TTEE NNTTII A A LL TT A A RR GG EE TT MM A A RR KKEE TTSS // CC IITTIIEE SS Market for the light weight roof tiles exists in all major cities where constructionactivities are advancing day by day. Besides the housing sector, tiles can bemarketed to corporate customers for construction of warehouses, factories, schools

and hospitals etc. District Quetta, Mastung, Kalat, Sibi, Pishin, Killa Saifullah, Ziaratand other cities and towns of the country including Lahore, Karachi, Multan,Faisalabad, Peshawar, Rawalpindi etc. are the potential localities. The tiles can alsobe sold to customers from Afghanistan where construction industry is in boom.



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11 11 PP RR OO DDUUCC TTIIOO NN PP RR OO CC EE SS SS FF LLOO WW Major raw materials used in the manufacturing of roof tiles include cement, sand andgravel mixture which is reinforced with steel wires.

Steps required for the manufacturing of these tiles comprise of mixing, moulding, de-moulding & curing, storage and distribution. Production flow diagram is given below:

Following steps describe the process flow for the production of light weight roof tilesin detail:

Step 1: Ordering & Stockpiling of Raw Materials Raw materials required for the production of light weight roof tiles include

sand, cement, iron wires and crushed gravel and are ordered and stored asper the production requirement.

It is recommended to store raw materials for at least one weeks productionrequirements for efficient running of project and orders fulfillment on time.

Molding (1 Day)

Ordering & Stockpiling of RawMaterials

Mixing (1 Day)

De-molding and Curing (2 -10 Days)

Storage / Sale & Distribution



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Step 2: Mixing Cement aggregates while mixing in the foremost step. Sand is pre-washed to

remove dirt contaminants. When the aggregate are mixed thoroughly, water isadded to the mixture.

In the local roof tile industry, mixing is performed manually, however, forhigher production requirements aggregate mixer machine may also be usedwhen producing large quantity of tiles.

Step 3: Molding The mold is lubricated with a thin layer of used motor oil and kerosene

mixture. It prevents sticking and allows the tile to be easily removed from themold after setting. The lubrication is applied by using a paint brush.

After lubrication the mold is half filled with aggregate mixture. At this pointmetal wires are placed on the aggregate in a crisscross manner. Six to twelvewires are used depending upon the requirement of the customer. Thediameter of wire also varies. After adding the wires the mold is completelyfilled with the cement aggregate.

When the molds are full, the concrete is compacted and the upper surface ismade smooth by using masonry tools.

The size and design of the mold determines the size and design of thefinished tile.

Step 4: De-molding, Setting & Curing The mold containing the wet concrete tile is moved to the setting area.

Initially, small amount of water is applied to keep the tiles wet. After about oneday the tiles are removed from the mold and moved to a water tank wherethey are kept immersed in water for further two days.

After being removed from the water tank the tiles are kept in ambienttemperature for another seven days to become firm.

Step 5: Storage and distribution The tiles do not require specific storage requirements; they are normally

stored in open air. The tiles are inspected for defects before shipment.

11 22 PP RR OO JJ EE CC TT CC OO SS TT SS UUMMMM A A RRYY A detailed financial model has been developed to analyze the commercial viability ofRoof Tiles Manufacturing Unit (Light Weight). Various cost and revenue relatedassumptions along with results of the analysis are outlined in this section.



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The projected Income Statement, Balance Sheet and Cash Flow Statement areattached as Appendices.

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The total project investment is Rs. 2.15 Million which includes Capital Cost of Rs.

1.69 Million and Working Capital of Rs. 0.46 Million. The project is assumed to befinanced through 10% equity and 90% debt basis.

All the figures in this financial model have been calculated for an estimated area ofaround 10,000 Sqft. The manufacturing unit is expected to produce 900 tiles / day.

Whereby production covered by proposed unit at 100% capacity in year one will be288,000 tiles.

The following table shows internal rate of return and payback period.

TTaa bb llee 33 -- PP r r oo j jee cc tt EE cc oo nn oo mm iicc ss

Description DetailsInternal Rate of Return (IRR) 33%Payback Period (yrs) 3.97Net Present Value (NPV) Rs.2,599,480

Major portion of the cost of tile is attributed to the quantity of cement and number /diameter of reinforcement wire used in a single tile. There are variations in quantityof cement and the number of reinforcement wires used, additionally; the diameter ofreinforcement wire is also reduced by some manufactures. This results in greatvariation in the production cost of a single tile. Therefore, it is difficult to competesolely on the basis of price in this sector. The entrepreneur can, however, attaincompetitive edge in this industry by standardizing the production process. Higherstrengths can be produced with the addition of supplementary cement and usinggood quality of reinforcement wires.

Price is normally determined by the amount of cement used and the number ofreinforcement wires used in the tile. Owing to the nature of supply and demand,short-term price fluctuations may also occur.

1122 ..22 PP r r oo j jee cc tt FF iinn aa nn cc iinn gg Following table provides details of the equity required and variables related to bankloan:



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TTaa bb llee 44 :: PP r r oo j jee cc tt FF iinn aa nn cc iinn gg

Description DetailsTotal Equity (10%) Rs.215,059Bank Loan (90%) Rs.1,935,527Markup to the Borrower (%age/annum) 8%

Tenure of the Loan (Years) 08Grace period (Year) 01

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Following requirements have been identified for operations of the proposedbusiness:

TTaa bb llee 55 :: CC aa pp iitt aa ll IInn vv ee ss ttmm ee nn tt f f oo r r tthh ee PP r r oo j j ee cc tt

Capital Investment Rs.

Building/Infrastructure 843,400Machinery & equipment 750,000Furniture & fixtures 25,000Office equipment 20,000Pre-operating costs 51,681Total Capital Costs 1,690,081

Working Capital Rs.Upfront Land lease 100,000Equipment spare part inventory 13,800

Raw material inventory 96,704Cash 250,000Total Working Capital 460,504Total Investment 2,150,585

1122 ..44 SS pp aa cc ee RR ee qq uu iir r ee mm ee nn tt

Considering the various facilities required including production, storage of rawmaterials and finished tiles, total land requirement for the project is estimated at10,000 Sft. The finished product and raw materials (with the exception of cement)

does not require covered area, therefore, they can be stored in open air. However, astorage room for cement is required and a small office should also be constructed atthe production facility. A detail of covered area required for different facilities is givenbelow:



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TTaa bb llee 66 :: BB uu iilldd iinn gg RR ee qq uu iir r ee mm ee nn tt

Description Area(Sft)

Unit Cost(Rs.)

Total Cost(Rs.)

Office 224 1,300 291,200Store 224 1300 291,200

Production Shed 360 600 216,000Water Tank - - 45,000Total 843,400

Total cost for construction of building and infrastructure is worked out to beapproximately Rs. 0.84 million.

1122 ..55 MMaa cc hh iinn ee r r yy aa nn dd EE qq uu iipp mm ee nn tt

Major cost of the equipment is attributed to the molds (known as firma by the localindustry), in addition to the molds the project requires very simple masonryequipment. (Cement mixer is only feasible to be used if the production capacity is inexcess of 1,000 tiles / day).

Following table provides a list of equipment required for the establishment of a LightWeight Roof Tiles Manufacturing Unit:

TTaa bb llee 77 :: LLiiss tt oo f f EE qq uu iipp mm ee nn tt

Items Total Cost(Rs.)

1 Tile Molds (450 molds)* 720,0002 Misc. Equipment (Shovels, Wheel barrow,

Brushes and other masonry tools)

30,000

Total 750,000* One mold produces 2 tiles

The unit does not require high tech equipments or machinery. The molds can bemade of wood or metal, for this project it is proposed that metallic molds are usedsince they are much more durable and long lasting as compared to wooden molds.One mold consists of two tiles placed side by side. Other miscellaneous equipmentsinclude items such as shovels, wheel barrow, brushes and other masonry tools.



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1122 ..66 OO f f f f iicc ee EE qq uu iipp mm ee nn tt

These costs are based on the assumption that a setup will be required to monitor theunit and manage the production of roof tiles. The office is also proposed to belocated at site.

TTaa bb llee 88 :: OO f f f f iicc ee EE qq uu iipp mm ee nn tt CC oo ss tt ss

Furniture / Officeequipment

Cost per unit Total Cost(Rs.)

1 Furniture Lumpsum 25,0002 Office Equipment Lumpsum 20,000

Total 45,000

1122 ..77 RR aa ww MMaa tt ee r r iiaa ll RR ee qq uu iir r ee mm ee nn tt ss

The raw material required for making roof tiles includes cement, sand, crushedstone, stone powder, iron wire and water. Cost of goods sold for cement tiles isdetermined for by adding cement, sand, gravel, sand powder, iron wires, water anddirect labour costs. This cost varies owing to the different ratios of raw materialsused by different manufacturers. For this project an average cost of goods sold isassumed to be Rs. 13.14 per tile.

TTaa bb llee 99 :: CC oo ss tt oo f f MMaa ttee r r iiaa ll

Description Unit

Required toproduce 115

tiles

UnitCost

(Rs.)

Cost(Rs.)

Cost /Tile

(12 x12 )(Rs.)

Cement (1 bag) 1 510 510 4.43Sand (1-1.5 bag) 4.05 40 162 1.41Gravel (zero size-0.5 bag) 1.5 40 60 0.52

Crush powder (khaka-1.5 bag) 4.5 50 225 1.96

Iron wire 4.6 65 299 2.60

Used Motor Oil (1-1.5 liters) 1.5 80 120 1.04Water 135 1 135 1.17

Cost per Unit 13.14



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1122 ..88 HHuu mm aa nn RR ee ss oo uu r r cc ee RR ee qq uu iir r ee mm ee nn tt

Roof tiles manufacturing is a simple process hence unskilled workers with propertraining / instructions can easily start the production. The personal needed for theproject are as under:

TTaa bb llee 1100 :: HHuu mm aa nn RR ee ss oo uu r r cc ee RR ee qq uu iir r ee mm ee nn tt

Descrip tion No. of Employees Salary per month(Rs.)

Labor (Semi/Unskilled) 3 30,000Security Guard 1 10,000Total Staff 4 40,000

The above table provides details of human resource required to run the proposedmanufacturing unit. Semi / unskilled workers are required to make the roof tiles. Theowner will be responsible to oversee the raw material, finished goods and take

orders and manage the marketing / sales of the roof tiles.

1122 ..99 RR ee vvee nn uu ee GG ee nn ee r r aa tt iioo nn

Sales price ranges from Rs. 16 to Rs. 20 per tile depending upon the quality of tile.Sale price for this project has been calculated as Rs. 18 per tile. The sales pricegrowth rate is assumed to increase at 10% per annum.

TTaa bb llee 11 11 :: RR ee vv ee nn uu ee A A ss ss uu mm pp tt iioo nn ss

Product Unit Sales

Price(Rs./Unit)

First Year

Production@ 80%(less

inventory)

First Year

SalesRevenue(Rs)

Roof tiles 288,000 18 220,800 3,974,400Total Sales Revenue 3,974,400

1122 ..1100 OO tthh ee r r CC oo ss tt ss

TTaa bb llee 1122 :: OO pp ee r r aa tt iinn gg EE xx pp ee nn ss ee ss

Description Rs. Administration expense 120,000Land lease rental expense 100,000Travelling expense 48,000Communications expense (phone, fax, mail, internet, etc.) 12,000Office expenses (stationary, entertainment, janitorial 12,000



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services, etc.)Professional fees (legal, audit, consultants, etc.) 9,936Depreciation expense 121,670

Amortization of pre-operating costs 10,336Subtotal 433,942

11 33 CC OO NNTT A A CC TT DDEE TT A A IILLSS OO FF SS UUPP PP LLIIEE RR SS ,, EE XXPP EE RR TTSS A A NNDD GG OO VVEE RR NNMMEE NNTT IINNSS TTIITTUUTTIIOO NNSS

1. Institute of Ceramics, Small Industrial Estate (SIE)G.T Road, GujratPh: 053 3520883

2. Muhmammad Iqbal KhanM/s Khan & Brothers RCC Pipe and tough Tile, Zarghoon Road, Quetta.

Cell: 0333-7817500.

3. Kasi RRC Pipes and Tiles, Airport Road, Quetta.Cell: 0300-3887682, 0333-7875901.

4. Haji Abdullah M/s haji Abdullah RCC Pipes & Pillar Factory, Almo Choke,AirportRoad,Near Ganj Quetta.Cell: 0321-8114680 (Haji Abdullah)Cell:0336-6719161 (Nasar Ullah)



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11 44 A A NNNNEE XXUURR EE

11 44 ..11 IInn cc oo mm ee SS tt aa tt ee mm ee nn tt

Statement Summaries SMEDAIncome Statement

Rs. in actualsYear 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Revenue 3,974,400 5,108,400 5,945,940 6,554,909 7,210,400 7,931,440 8,724,584 9,597,042 10,556,746 11,612,421 Cost of goods sold 3,290,280 4,110,810 4,681,889 5,076,073 5,491,511 5,941,097 6,427,652 6,954,232 7,524,147 8,140,981

Gross Profit 684,120 997,590 1,264,051 1,478,836 1,718,889 1,990,343 2,296,932 2,642,810 3,032,599 3,471,440

General administration & selling expensesAdministration expense 120,000 131,683 144,504 158,573 174,012 190,954 209,546 229,948 252,336 276,903 Travelling & Comm. expense (phone, fax, etc.) 60,000 65,842 72,252 79,287 87,006 95,477 104,773 114,974 126,168 138,452 Office expenses (stationary, etc.) 12,000 13,168 14,450 15,857 17,401 19,095 20,955 22,995 25,234 27,690 Professional fees (legal, audit, etc.) 9,936 12,771 14,865 16,387 18,026 19,829 21,811 23,993 26,392 29,031 Depreciation expense 121,670 121,670 121,670 121,670 121,670 121,670 121,670 121,670 121,670 121,670 Amortization expense 10,336 10,336 10,336 10,336 10,336 - - - - -

Subtotal 433,942 455,471 478,078 502,111 528,452 547,026 578,755 613,579 651,799 693,747 Operating Income 250,178 542,119 785,973 976,725 1,190,437 1,443,317 1,718,177 2,029,231 2,380,800 2,777,693

Other income - - - - - - - - - - Gain / (loss) on sale of assets - - - - - - - - - - Earnings Before Interest & Taxes 250,178 542,119 785,973 976,725 1,190,437 1,443,317 1,718,177 2,029,231 2,380,800 2,777,693

Interest expense 160,648 147,075 129,235 109,915 88,991 66,331 41,789 15,211 - - Earnings Before Tax 89,530 395,044 656,738 866,810 1,101,446 1,376,987 1,676,387 2,014,020 2,380,800 2,777,693

Tax 17,906 79,009 131,348 173,362 220,289 275,397 335,277 402,804 476,160 555,539 NET PROFIT/(LOSS) AFTER TAX 71,624 316,035 525,390 693,448 881,157 1,101,590 1,341,110 1,611,216 1,904,640 2,222,155

Balance brought forward 71,624 387,659 913,050 1,606,497 2,487,654 3,589,244 4,930,354 6,541,569 8,446,210 Total profit available for appropriation 71,624 387,659 913,050 1,606,497 2,487,654 3,589,244 4,930,354 6,541,569 8,446,210 10,668,364 Owner's Withdrawals - - - - - - - - - - Balance carried forward 71,624 387,659 913,050 1,606,497 2,487,654 3,589,244 4,930,354 6,541,569 8,446,210 10,668,364



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1144 ..22 PP r r oo j jee cc tt ee dd BB aa llaa nn cc ee SS hh ee ee tt

Statement Summaries SMEDABalance Sheet

Rs. in actualsYear 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

AssetsCurrent assets

Cash & Bank 250,000 213,928 459,514 794,842 1,289,086 1,952,494 2,778,598 3,807,964 5,067,489 6,951,974 9,804,344

Accounts receivable - 326,663 373,266 454,288 513,734 565,698 622,267 684,494 752,944 828,238 911,062 Finished goods inventory - 143,056 172,080 195,507 211,503 228,813 247,546 267,819 289,760 313,506 339,208 Eq uip me nt sp are pa rt in ve nt ory 13, 800 18,286 21,942 24,936 28,278 32,067 36,364 41,237 46,763 53,029 - Raw material inventory 96,704 131,799 162,668 190,153 221,795 258,702 301,749 351,961 410,527 478,838 - Pre-paid annual land lease 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 -

Total Current Assets 460,504 933,732 1,289,470 1,759,727 2,364,395 3,137,773 4,086,525 5,253,475 6,667,481 8,725,586 11,054,613

Fixed assetsBuilding/Infrastructure 843,400 801,230 759,060 716,890 674,720 632,550 590,380 548,210 506,040 463,870 421,700 Machinery & equipment 750,000 675,000 600,000 525,000 450,000 375,000 300,000 225,000 150,000 75,000 - Furniture & fixtures 25,000 22,500 20,000 17,500 15,000 12,500 10,000 7,500 5,000 2,500 - Office equipment 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 -

Total Fixed Assets 1,638,400 1,516,730 1,395,060 1,273,390 1,151,720 1,030,050 908,380 786,710 665,040 543,370 421,700

Intangib le assetsPre-operation costs 51,681 41,345 31,009 20,673 10,336 - - - - - -

Total Intangible Assets 51,681 41,345 31,009 20,673 10,336 - - - - - - TOTAL ASS ETS 2,150,585 2,491,807 2,715,539 3,053,789 3,526,451 4,167,823 4,994,905 6,040,185 7,332,521 9,268,956 11,476,313

Liabilities & S hareholders' EquityCurrent liabilities

Accounts payable - 251,691 317,230 362,866 394,175 427,410 463,582 502,973 545,893 592,688 592,890

Total Current Liabilities - 251,691 317,230 362,866 394,175 427,410 463,582 502,973 545,893 592,688 592,890

Other liabilitiesDeferred tax - 17,906 75,000 75,000 75,000 75,000 60,000 45,000 30,000 15,000 - Long term debt 1,935,527 1,935,527 1,720,591 1,487,816 1,235,720 962,701 667,021 346,799 - - -

To ta l Lo ng Te rm Lia bilit ie s 1,935,527 1,953,433 1,795,591 1,562,816 1,310,720 1,037,701 727,021 391,799 30,000 15,000 -

Shareholders' equityPaid-up capital 215,059 215,059 215,059 215,059 215,059 215,059 215,059 215,059 215,059 215,059 215,059 Retained earnings - 71,624 387,659 913,050 1,606,497 2,487,654 3,589,244 4,930,354 6,541,569 8,446,210 10,668,364

Total Equity 215,059 286,683 602,718 1,128,108 1,821,556 2,702,713 3,804,302 5,145,412 6,756,628 8,661,268 10,883,423 TOTAL CAPITAL AND LIABILITI 2,150,585 2,491,807 2,715,539 3,053,789 3,526,451 4,167,823 4,994,905 6,040,185 7,332,521 9,268,956 11,476,313



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Statement Summaries SMEDA

Cash Flow Statement

Rs. in actualsYear 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Operating activities Net profit - 71,624 316,035 525,390 693,448 881,157 1,101,590 1,341,110 1,611,216 1,904,640 2,222,155 Add: depreciation expense - 121,670 121,670 121,670 121,670 121,670 121,670 121,670 121,670 121,670 121,670

amortization expense - 10,336 10,336 10,336 10,336 10,336 - - - - - Deferred income tax - 17,906 57,094 - - - (15,000) (15,000) (15,000) (15,000) (15,000) Accounts receivable - (326,663) (46,603) (81,022) (59,446) (51,964) (56,570) (62,227) (68,449) (75,294) (82,824) Finished good inventory - (143,056) (29,025) (23,427) (15,996) (17,310) (18,733) (20,273) (21,941) (23,746) (25,701) Equipment inventory (13,800) (4,486) (3,656) (2,995) (3,341) (3,789) (4,297) (4,873) (5,526) (6,266) 53,029 Raw material inventory (96,704) (35,095) (30,869) (27,485) (31,642) (36,907) (43,048) (50,211) (58,566) (68,312) 478,838 Accounts payable - 251,691 65,538 45,636 31,310 33,235 36,172 39,391 42,920 46,794 203 Other liabilities - - - - - - - - - - -

Cash provided by operations (110,504) (36,072) 460,522 568,103 746,340 936,428 1,121,784 1,349,587 1,606,324 1,884,486 2,752,370

Financing activitiesChange in long term debt 1,935,527 - (214,936) (232,775) (252,096) (273,019) (295,680) (320,221) (346,799) - - Issuance of shares 215,059 - - - - - - - - - -

Cash provided by / (used for) financing 2,050,585 - (214,936) (232,775) (252,096) (273,019) (295,680) (320,221) (346,799) - 100,000

Investing activitiesCapital expenditure (1,690,081) - - - - - - - - - -

Cash (used for) / provided by investing (1,690,081) - - - - - - - - - -

NET CASH 250,000 (36,072) 245,586 335,328 494,244 663,408 826,104 1,029,366 1,259,524 1,884,486 2,852,370

Cash balance brought forward 250,000 213,928 459,514 794,842 1,289,086 1,952,494 2,778,598 3,807,964 5,067,489 6,951,974 Cash available for appropriation 250,000 213,928 459,514 794,842 1,289,086 1,952,494 2,778,598 3,807,964 5,067,489 6,951,974 9,804,344 Cash carried forward 250,000 213,928 459,514 794,842 1,289,086 1,952,494 2,778,598 3,807,964 5,067,489 6,951,974 9,804,344

s



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Technology

Quality Assurance Equipment & Standards: Whatever means requiredproducts quality standards need to be defined on the packaging and a system to

check them instituted, this improves credibility.Marketing

Ads & P.O.S. Promotion: Business promotion and dissemination throughbanners and launch events is highly recommended. Product brochures fromgood quality service providers can be of great help.

Sales & Distribution Network: Expert's advice and distribution agreements arerequired.

Price - Bulk Discounts, Cost plus Introductory Discounts: Price should never

be allowed to compromise quality. Price during introductory phase may be lowerand used as promotional tool. Product cost estimates should be carefullydocumented before price setting.

Human Resources

Adequacy & Competencies: Skilled and experienced staff should beconsidered an investment even to the extent of offering share in business profit.

Performance Based Remuneration: Attempt to manage human resource costshould be focused through performance measurement and performance basedcompensation.

1144 ..55 UUss ee f f uu ll LLiinn kkss

Prime Ministers Office

www.pmo.gov.pk

Small & Medium Enterprises Development Authority (SMEDA)

www.smeda.org.pk

National Bank o f Pakistan (NBP)www.nbp.com.pk

First Women Bank Limited (FWBL)

www.fwbl.com.pk

Government of Pakistan



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www.pakistan.gov.pk

Ministry of Industries & Production

www.moip.gov.pk

Ministry of Education, Training & Standards in Higher Education

http://moptt.gov.pk Government o f Punjab

www.punjab.gov.pk

Government of Sindh

www.sindh.gov.pk

Government of Khyber Pakhtoonkhwa

www.khyberpakhtunkhwa.gov.pk

Government of Balochistan

www.balochistan.gov.pk

Government of Gilgit Baltistan

www.gilgitbaltistan.gov.pk

Government of Azad Jammu & Kashmir

www.ajk.gov.pk

Trade Development Authority of Pakistan (TDAP)

www.tdap.gov.pk

Securities and Exchange Commission of Pakistan (SECP)

www.secp.gov.pk

Federation of Pakistan Chambers of Commerce and Indus try (FPCCI)

www.fpcci.com.pk

State Bank of Pakis tan (SBP)

www.sbp.org.pk



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11 55 KKEE YY A A SS SS UUMMPP TTIIOO NNSS

Production related assumptions

Average

DailyProduction/ person

No. of

Labour

Total Daily

Production

Annual

Production(320days/Yr)

@ 100%capacity

Capacity

Utilizationin Year-180%

Finished

TilesInventory

Tiles

availablefor Sale(Year-1)*

300 3 900 288,000 230,400 9,600 220,800

Cost assumptions

Cost of goods sold for cement tiles is determined by adding cement, sand, gravel,sand powder, iron wires, water and direct labour costs. This cost varies owing to thedifferent ratios of raw materials used by different manufacturers. For this project anaverage cost of goods sold is assumed to be Rs. 13.14 per tile.

Revenue assumptions

Sales price ranges from Rs. 16 to Rs. 20 per tile depending upon the quality of tile.Sale price for this project has been calculated as Rs. 18 per tile. The sales pricegrowth rate is assumed to increase at 10% per annum.

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Product Unit SalesPrice

(Rs./Unit)

First YearProduction

@ 80%(less

inventory)

First YearSales

Revenue(Rs)

Roof tiles 288,000 18 220,800 3,974,400Total Sales Revenue 3,974,400

Financial Assumptions

Debt 90 %

Equity 10 %Required rate of return on equity 25 %WACC 16 %



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Depreciation Rates

Building and Infrastructure 5 %Office Equipment 10 %Machinery and Equipment 10 %

Cash Flow Assumptions

Accounts Receivables Cycle (In Days) 30

Accounts Payable Cycle (In Days) 30Cash in Hand Rs. 250,000

Economy Related assumptions

Inflation rate 10 %

Electricity growth rate 10 %Water price growth rate 10 %Wage growth rate 10 %

roof tiles manufacturing unit ( light weight )

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