SMEDA Salt Products

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Pre-Feasibility Study

SSAALLTT PPRROODDUUCCTTSS

Small and Medium Enterprise Development Authority

Government of Pakistan



Government of Pakistan

Pre-feasibility Salt Products

1. INTRODUCTION TO SMEDA.................................................................................................... 5

2. PURPOSE OF THE DOCUMENT............................................................................................... 5

3. CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT..................... 6

3.1. SWOT ANALYSIS ...................................................................................................................6

3.1.1. STRENGTHS ............................................................................................................................ 6

3.1.2. WEAKNESSES.......................................................................................................................... 63.1.3. OPPORTUNITIES ...................................................................................................................... 7

3.1.4. THREATS ................................................................................................................................7

4. PROJECT PROFILE.................................................................................................................... 7

4.1. OPPORTUNITY RATIONALE ...................................................................................................... 74.2. PROJECT BRIEF ....................................................................................................................... 8

4.3. MARKET ENTRY TIME ............................................................................................................. 8

4.4. PROPOSED BUSINESS LEGAL STATUS ....................................................................................... 8

4.5. PROJECT CAPACITY................................................................................................................. 94.6. PROJECT INVESTMENT ............................................................................................................. 9

4.7. RECOMMENDED PROJECT PARAMETERS ................................................................................... 9

4.8. PROPOSED LOCATION.............................................................................................................. 9

4.9. OTHER FIXED ASSETS REQUIREMENT .................................................................................... 10

4.10. MACHINERY REQUIREMENT .................................................................................................. 10

5. LAND & BUILDING REQUIREMENT .................................................................................... 11

6. MARKET INFORMATION ABOUT ROCK SALT.................................................................. 11

6.1. SALT MINES IN PAKISTAN ..................................................................................................... 116.1.1. KHEWRA SALT MINES........................................................................................................... 116.1.2. WARCHA SALT MINES .......................................................................................................... 12

6.1.3. KALABAGH SALT MINES ....................................................................................................... 12

6.1.4. JATTA /BAHADURKHEILSALT MINES ..................................................................................... 13

6.2. THE HEALING EFFECT OF SALT.............................................................................................. 136.3. WHERE DO SALT LAMPS COME FROM?.................................................................................. 14

6.4. THE BENEFICIAL EFFECTS OF SALT CRYSTAL LAMPS ON OUR HEALTH .................................. 146.5. IONS AND HEALTH ................................................................................................................ 14

6 6 S C L C T 15




8.1.11. MARKETING EXPENSES ASSUMPTIONS .............................................................................. 22

9. FINANCIAL STATEMENTS..................................................................................................... 24

9.1. INCOME STATEMENT........................................................................................................ 24

9.2. BALANCE SHEET................................................................................................................. 25

9.3. CASH-FLOW STATEMENT................................................................................................ 26




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. All the material

included in this document is based on data/information gathered from various sources and

is based on certain assumptions. Although, due care and diligence has been taken to

compile this document, the contained information may vary due to any change in any of

the concerned factors, and the actual results may differ substantially from the presented

information. SMEDA does not assume any liability for any financial or other loss

resulting from this memorandum in consequence of undertaking this activity. The

prospective user of this memorandum is encouraged to carry out additional diligence and

gather any information he/she feels necessary for making an informed decision.

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

DOCUMENT CONTROL




11.. IINNTTRROODDUUCCTTIIOONN TTOO SSMMEEDDAA

The Small and Medium Enterprise Development Authority (SMEDA) was established

with the objective to provide fresh impetus to the economy through the launch of anaggressive SME Support Program.

Since its inception in October 1998, SMEDA had adopted a sectoral SME Development

Approach. A few priority sectors were selected on the criterion of SME presence. Indepth research was conducted and comprehensive development plans were formulated

after identification of impediments and retardants. The all-encompassing sectoraldevelopment strategy involved recommending changes in the regulatory environment by

taking into consideration other important aspects including Finance, Marketing,Technology and Human Resource Development.

SMEDA has so far successfully formulated strategies for sectors including, Fruits and

Vegetables, Marble and Granite, Gems and Jewelry, Marine Fisheries, Leather andFootwear, Textiles, Surgical Instruments, Transport and Dairy. Whereas the task of SME

development at a broader scale still requires more coverage and enhanced reach in termsof SMEDA’s areas of operation.

Along with the sectoral focus a broad spectrum of Business Development Services is alsooffered to the SMEs by SMEDA. These services include identification of viable business

opportunities for potential SME Investors. In order to facilitate these Investors, SMEDAprovides business guidance through its help desk services as well as development of

Project Specific Documents. These documents consist of information required to make

well-researched investment decisions. Pre-feasibility Studies and Business PlanDevelopment are some of the services provided to enhance the capacity of individualSMEs to exploit viable business opportunities in a Scientific/Structured way.




Whilst due care and attention has been taken in performing the exercise, no liability can

be inferred for any in-accuracy or omissions reported from the results thereof. It isessential that our report be read in its entirety with financial model in order to fully

comprehend the impact of key assumptions on the range of values determined.

This particular Pre-feasibility is regarding "Salt Lamp Manufacturing Unit ". Beforestudying the whole document one must consider following critical aspects, which forms

basis of any Investment Decision

33.. CCRRUUCCIIAALL FFAACCTTOORRSS && SSTTEEPPSS IINN DDEECCIISSIIOONN MMAAKKIINNGG FFOORRIINNVVEESSTTMMEENNTT

Before making the decision, whether to invest in setting up the salt lamp manufacturingbusiness or not, one should carefully analyze the associated risk factors. A SWOT

analysis can help in analyzing these factors, which can play important role in making thedecision.

33..11.. SSWWOOTT AAnnaallyyssiiss

Before making the decision, whether to invest in the Salt Lamp Manufacturing or not,

one should carefully analyze the associated risk factors. A SWOT analysis can help inanalyzing these factors, which can play important role in making the decision.

33..11..11.. SSttrreennggtthhss

i- Continuous availability and easy access to Raw Material. 100% of the raw

material that mainly comprises rock salt is available in the Khewra, District

Jhelum.ii- Availability of Cheaper Labor.iii- Tariff cuts under Trade Agreements are anticipated which may result in

increase in the Export market of the Salt lamps.




ii- The production process is highly manual and requires high involvement of man power thus strong controls over the man power is required.

iii- Expected loss at the initial stages of the project as both the local & exportmarket needs to be captured and considering the nature of the products

manufactured it requires heavy promotional charges.iv- Weak design protection.

v- High employment turnover rate.

33..11..33.. OOppppoorrttuunniittiieess

i- Increasing preference for the high quality products unique in nature.

ii- Increasing share of developing countries in Salt lamp imports of France,Belgium & UK and other countries of European union.

iii- The salt rock crystal is known for its ability to ionize the air thus enhancing

the well being and improving the health of human being.iv- The crystal salt is believed to help in the cure of many diseases.

Bioenergetics therapists and homeopaths in Western Europe haverecommended crystal salt lamps for long time to support treatment of

allergies, respiratory system and blood system diseases. They are often used

in the treatment of rheumatism.v- Due to its beautiful and rich colors, salt lamps can also be used in color

therapy. i.e. chromo therapy.

vi- The soothing light of the lamp helps neurotic person and people sufferingfrom insomnia.

33..11..44.. TThhrreeaattss

i- Low saving and low holding capacity of General Public as a result of which

there is increasing level of poverty.ii- Quality and design of the Salt Lamps need to be considered very closely as

the lifestyle of people is improving.iii T d i l d i h i kl




44..22.. PPrroo j jeecctt BBrriieef f

The project will be producing rock salt crystal products from highest quality of

crystallized salt rocks. The rock salt crystal products discussed in this pre-feasibilityincludes;- salt lamps, salt soaps, salt candle stands, salt tiles and other decoration

pieces including rabbits, camels and cats etc. This pre-feasibility is however mainlyfocusing on the Salt lamp manufacturing.

A salt lamp is simply a chunk of mined salt that has been hollowed out to allow roomfor a light bulb or tiny candle. The light glows through the medium of the salt crystal,

which can range in color from a dark salmon pink to a pale orange. Salt crystals for

salt lamps are mined in Russia and central Europe as well as in the Himalayas. Saltlamps make attractive accent lights. Their main attraction, however, is that theheating of the salt causes the crystal to release negative ions (often called simply

'ions').

Negative ions have long been considered healthy; the sea air, mountain air and the air

around swiftly running water is high in negative ions. Indoor air, recirculated air, andair around electronic equipment is very low in negative ions. Many office workers

who suffer health complaints around fluorescent lighting and computer monitorsreport considerably less fatigue and headaches if the concentration of negative ions in

the air is increased. Why negative ions may be beneficial is only partially understood.

It has been shown that negative ions in the air bind with airborne pollutants, making

them heavier so that they fall to the ground, and therefore are unavailable to beinhaled. Many modern air purifiers - the so-called 'ionic air cleaners' - use this

technique to provide cleaner indoor air for allergy sufferers. Some studies seem toindicate that an increase in negative ions in the air increases blood flow to the brain,

which would have the effect of improved concentration. The salt lamp is an attractivealternative to the utilitarian look of an air purifier.

The amount of negative ions a salt lamp can release depends on its size and how




The said project can be a sole proprietorship or a partnership and even it can beregistered under the Companies Ordinance, 1984 with the Securities & Exchange

Commission of Pakistan. The selection totally depends upon the choice of theentrepreneur. This pre-feasibility assumes the legal status of a sole proprietorship.

44..55.. PPrroo j jeecctt CCaappaacciittyy

Selection of Project Size is really critical. After doing thorough Market Research, it is

decided that the proposed Pre-feasibility will be based upon the Production Capacityof 300 pieces per day. As it is evident that the standard of living is rising steadily and

the society is getting increasingly brand loving and design conscious, high grade

producers will have heyday in the Salt Lamp market in future. This particular Pre-feasibility study is however based on the maximum production capacity of 170 piecesper day which is the minimum viable size for a Salt lamp manufacturing unit with a

growth rate of 5% per annum.

Table 1: Production CapacityHours utilized one day 8

Production Capacity in pieces per day 110

44..66.. PPrroo j jeecctt IInnvveessttmmeenntt

Total Project cost is Rs. 15,879,181. Details are worked out in the table below:-

Table 2: Project Cost (Rs.)Capital Investment 9,014,500

Working Capital Requirement 6,864,681

Total Investment 15,879,181

Table 3: Project ViabilityIRR % - age 41.60%




Pre-feasibility is recommended at Sargodha. The availability of main raw material inthe region considerably increases the scope for establishment of the proposed project

in the said region.

44..99.. OOtthheerr FFiixxeedd AAsssseettss RReeqquuiirreemmeenntt

Following additional fixed assets are required for factory and management offices.

Table 5: Fixed AssetsItems No. Cost/Item

(Rs.)Total Cost

(Rs.)

Office Equipments

Computers 6 25,000 150,000

Printers 3 25,000 75,000

Fax Machine 1 10,000 10,000

Telephone Exchange 1 10,000 10,000

Telephone Sets 5 500 2,500

247,500

Fittings & Installations

Air Conditioners 2 25,000 50,000

Generator 165 KVA - Local 1 50,000 50,000

Electric Installations and Heating

System 1 100,000 100,000

Water Pump ( 2.0 H.P ) includingboring 150 ft 1 15,000 15,000

215,000

F i & Fi




TOTAL 496,000

55.. LLAANNDD && BBUUIILLDDIINNGG RREEQQUUIIRREEMMEENNTT

Building for the proposed business will be built on the land which will be purchased inSargodha as. Total Land Cost including acquisition & documentation charges for land

are.

Table 7: Land Cost

Total Area (Kannals) Cost per Kannal (Rs.) Total Land Cost (Rs.)

5 300,000 1,500,000

Following Table shows the detailed building requirements for the Project. The break - upof the required area and construction cost of relevant department is produced below:

Table 8: Construction CostBuilding & Civil works Space

Required(sq. ft.)

ConstructionCost / sq. ft.

(Rs.)

Total Cost(Rs.)

Main Hall 2,500 500 1,250,000

Finished Goods Store 1,500 550 825,000

Raw Material Store - Open Plot Area 4,500 75 337,500

Management Office 1,000 700 700,000

Accessories Store 350 550 192,500

Toilets 400 550 220,000

Loading, unloading Bay - Open Area 2,250 50 112,500Grounds & Tracks - - Open Area 10,000 100 1,000,000

Total Space Requirement (sq. ft) 22,500 4,637,500

Bo ndar all (R ft) 780 350 273 000




Table 9: Salt Mines - KhewraContact Project manager 092-458-211137

Khewra salt MinesKhewra, Distt. Jhelum

Location 160km south of Islamabad

Leased area 3,398.53 acres

Geological Horizon Pre-Cambrian

Commercial salt Average 96%

Shades of salt White, Pink and Red

Mining method Room and PillarRock Saly Resources 6.687 Billion Tons

Production (2003-04) 318,000 tons

66..11..22.. WWaarrcchhaa SSaalltt MMiinneess

Warcha salt Mines are located 276km from Islamabad. The salt occurs in the form

of an irregular and broken salt dome. Its white salt is well demanded by themanufacturers of kitchen-flow salt. The pure white salt is transparent and

crystalline. Other Features are as follows:

Table 10: Salt Mines - WarchaContact Project Manager

Tel: 092-4528-770315Warcha Salt Mines

Warcha, Distt. Mianwali

Location 276km south of Islamabad

Leased Area (Two) 3,601.17 acres





Table 11: Salt Mines - KalabaghContact Project Manager

Office Tel: 092-4529-395704Kalabagh Salt Mines

Kalabagh, Distt. Mianwali

Location 296km from Islamabad or

50km from Mianwali

Leased Area(Two Leases)

3,837.81 acres


Purity of Salt (NaCl) Average 96%

Shades of salt White and Pink

Rock Salt Resources Over One Billion tons

Production (2003-04) 52,995 tons

66..11..44.. JJaattttaa / / BBaahhaadduurrkkhheeiill SSaalltt MMiinneessTable 12: Salt Mines - Jatta / BahadurKheilContact Project Manager

PMDC Jatta/BahadurKhel Salt Mines

Jatta, Distt. Karak Office Tel: 092-922-550020

Location 217km from Islamabad or

35 km from KohatLeased Area 8,449.92 acres

Geological Horizon Tertiary (?)




salts in this process. People everywhere are reconsidering the healing effects of natural crystal salt. We can find it in skin care lotions, for use as bath salts and is even

used in inhalation or cleansing treatments for illnesses of the respiratory system andfor a variety of other indications.

66..33.. WWhheerree DDoo SSaalltt LLaammppss CCoommee FFrroomm??

Salt Electrical Lamps are manufactured from crystals of rock salt which has been

deposited in earth for 260 million years and is mined bye means of traditional miningmethods from the depths reaching 700-1100 meters which allows fully maintain the

natural benefits of slats created by natural with guarantee that there is no toxic

contamination

66..44.. TThhee BBeenneef f iicciiaall EEf f f f eeccttss OOf f SSaalltt CCrryyssttaall LLaammppss OOnn OOuurr HHeeaalltthh

Science decades the beneficial effects of negative ions in the treatment of many

illnesses has been known, such as rheumatism, allergies, respiratory diseases,sleeplessness, migraine high blood pressure, physical disorders, disorders declination

in performance e.t.c, Salt crystal lamps are additional instruments in the treatment of such disorders.

Salt lamps strong and negatively ionize the air counteracting detrimental positiveionization. Owing to their nice and delicate light they create a unique atmosphere.

When placed by a television set, computer etc. They absorb detrimentalelectromagnetic radiation.

66..55.. IIoonnss aanndd HHeeaalltthh

We spend most of our lives in enclosed places. Our frame of mind and physical

condition depend on the composition of the air that we breath. Air is electricallycharged, which means it contains in definite proportions, positively charged

molecules (positive ions) and negatively charge molecules (negative ions). Scientificresearch has shown that their balance is required to create a good mood. Computers




Dust

Pollen (grass, weed and tree pollen) Dust mites

Animal dander

Smoke

Odor

Mold spores

The impact of negative ions is powerful. Originally they were found to help asthmapatients. Later they were discovered to affect Serotonin levels in the bloodstream,

stabilize alpha rhythms and to positively affect reactions to sensory stimuli. Theattendant greater level of alertness can translate into improved learning, improved

well-being and enhanced performance of mental tasks.

Rock Salt Crystal Lamps are highly suitable for daily use near Televisions, and

Computers around smokers, in office with air-conditioning, during massage therapy,in mediation rooms and anywhere else you want to restore or preserve the natural air

quality.

Ionizing machines emit negative electric charges into the air, and this supposedly

causes airborne allergens to cluster and fall to the ground. These machines have beenclaimed to help hay fever and asthma sufferers by decreasing the allergen load on the

nasal mucosa and lungs.

Many people, who can't go to the salt mines, use salt crystal lamps to create those

ions. They buy salt crystal lamps made from the same salt mines used the

speleotherapic clinics. These lamps are reported to provide relief the same was peopleare relieved at the salt mines.

66..66.. SSaalltt CCrryyssttaall LLaammppss aanndd CCoolloorr TThheerraappyy




66..66..11.. RReedd ((BBrriigghhtt RReedd))

Warm and stimulating. Use in anemia, or whenever you are feeling cold and pale,

with chilled extremities; also useful for ultraviolet and X-ray burns and frostbite;red is a liver stimulant and counter-irritant (to bring internal inflammations to the

surface). Nutrients: vitamin B12, acidity.

66..66..22.. OOrraannggee

A respiratory stimulant; useful for weak lungs, asthma, consumption, emphysema;also for overweight and under-active people with an under-active thyroid

(energizes thyroid, sedates parathyroid). Orange relieves spasms and cramps,

increases milk secretion, corrects rickets and soft bones, osteoporosis; stimulatesstomach and digestion, and relieves flatulence and distension; also stimulates thebladder, kidneys, liver and pancreas, try with epilepsy. It is valuable for chronic

kidney disease and gallstones; arthritis, gout and rheumatism during non-painfulperiods. Minerals: boron, calcium, copper, selenium, silicon.

66..66..33.. YYeellllooww

The most luminous color. A strong stimulant and energizer for muscles and

nerves: use in all cases of paralysis and muscle disorders, for nerve building, andin nervous exhaustion. Yellow energizes the alimentary tract and stimulates

digestion, flow of bile, gastric juices, pancreas activity, lymphatic system, heart,eyes and ears. It generally activates all bodily functions except those of the

spleen, which is sedated; use for indigestion, constipation, diabetes, anddepression for skin cleansing and to destroy intestinal worms. Minerals:

magnesium, molybdenum, sodium.

66..66..44.. AArroommaa TThheerraappyy

Alternative medical techniques can help you avoid the discomfort and side effectsthat come with prescription drugs. And depending on the technique used,




found are related to the long winter nights experienced by the people who livethere.

Salt lamps can be used for light therapy and they can be used to adjust ouremotional conditions. Salt comes in a very useful spectrum of colors that create

different moods. So you can choose one or more to fit your current condition.

Red is the provocative color that boosts your vital forces and gives you an

energetic outlook on life. Apricot is said to help you overcome over comeemotional blocks, improve open mindedness and increase vital energy. Orange is

supposed to aid relaxation and improve body harmony. It is also said to be very

helpful in overcoming stress, and nervous shock. It also is supposed to increasecreativity and your outlook on life. White brightens your outlook and has acalming effect that helps you concentrate and enrich your emotional life.

77.. HHUUMMAANN RREESSOOUURRCCEE RREEQQUUIIRREEMMEENNTT

77..11..11.. HHuummaann RReessoouurrccee RReeqquuiirreemmeennttss

Following table shows the requirements of Human. Salaries and wages are assumed

to grow at 10% per annum.

Table 13: Human Resource RequirementDescription No. of

ShiftsNumber of Employees

Per MonthSalary

AnnualSalary

(Rupees)

PRODUCTION STAFF

Production Manager 1 1 35,000 420,000

Quality In charge 1 1 25,000 300,000

Store Supervisor 1 1 7,000 84,000

Cutter Operator 1 4 6 500 312 000




Sweeper 1 2 3,000 72,000

Total Administrative Salaries 912,000

MARKETING & SELLINGCOST

Marketing Manager in EUCountries

1 1 175,000 2,100,000

Export Manager 1 1 30,000 360,000

Sales Officer 1 1 15,000 180,000

Total Marketing Salaries 2,640,000

Direct Production Cost

Factory Wages 3,720,000

*Other Benefits 930,000

4,650,000

Administrative Cost 912,000

Other Benefits 228,000

1,140,000

Marketing Cost 2,640,000

Other Benefits 660,000

3,300,000




88.. KKEEYY AASSSSUUMMPPTTIIOONNSS

88..11..11.. PPrroo j jeecctt AAssssuummppttiioonnss

Projected Life of The Project in Years 10

Sponsors' Equity 50%

Debt Financing 50%

Annual Mark Up Rate (Short Term & Long Term) 14%

Debt Tenure in Years 5

General Inflation Rate 5%

88..11..22.. OOppeerraattiinngg AAssssuummppttiioonnss

Total No. of Days in One Year 365

Total No. of Months in One Year 12

No of Working Days in One Year 300

No. of Working hours/day 8

No. of Shift 1

Expected Production Growth Rate 5%

88..11..33.. DDeepprreecciiaattiioonn RRaattee AAssssuummppttiioonn

Land 0%Buildings 5%

Plant & Machinery 10%

Fitti & I t ll ti 10%




candle stands ( 1 - 2 kgs) 5% 120 6 360

Salt Soaps ( 0.4 - 0.6 kgs) 5% 150 2 120

Other Decoration Pieces ( 8 - 12 kg) 10% 5 50 3,000Lamps ( 10 - 12 kg ) 45% 60 25 1,500

Lamps ( 12 - 14 kg ) 30% 40 30 1,800

Lamps ( 14 - 16 kg ) 25% 25 35 2,100

Exchange Rate 60

Sales Tax Rate on supply 0%

Estimated margin on Sales Price 50%

88..11..55.. LLoonngg TTeerrmm SSeeccuurriittyy DDeeppoossiittss

Electricity 2 months bill

88..11..66.. WWoorrkkiinngg CCaappiittaall TTuurrnnoovveerrRaw Material Inventory 30 Days Raw Material Consumption

Work - in - Process (60%

Complete as to material andconversion Cost)

15 Days expected Production

Finished Goods 30 Days Goods available for sale

Packing Material 30 Days Goods available for sale

Stores and Spares 30 Days Stores & Spares Consumption

Accounts Receivable - credit 45 Days




Wooden Base (Rs.) 15.00

Leads & Holder (Rs.) 25.00

Bulbs (Rs.) 10.00

88..11..88.. PPaacckkiinngg MMaatteerriiaall && SSttoorreess aanndd SSppaarreess

Packing Material Costs duringthe 1st Year of Operation

Cost per unit

Cartons rate perunit

30

Small Boxes rate perunit

7

*Other Packing Materials Cost per

item

6

Stores & Spares 5% of Raw Material consumption

The standard packing perCarton is assumed to be asfollows:

No. of pieces per carton

Lamps (2-4)Kg 20

Lamps (4-6)Kg 16

Lamps (6-8)Kg 12

Lamps (8-10)Kg 8

Candle Stand (1-2) Kg 40

Salt Soaps(.4-0.60) Kg 200




Carriage & Freight Inward 10% of cost of Raw Material

consumed.Repair & Maintenance

Machinery, building and fittings &installations

10% of the Cost.

Machinery & equipment insurance rate 2% of Written down value of the

Machinery & Equipments.

Other Overhead Charges 2% of Total Cost of Goods

Manufactured excludingoverhead cost.

88..11..1100.. AAddmmiinniissttrraattiivvee EExxppeennssee AAssssuummppttiioonnss

Salaries & Wages

Inflation Rate for Salaries & Wages 10%

Traveling & Conveyance 1%

Printing & Stationary .5%

Audit Fee 75,000

Out of Pocket Expenses 10,000

Policy Mannual(cost from 1st Year onward) 100,000

Income Tax & Sales Tax Consultancy 35,000

Inflation rate of Consultancy charges10%

Entertainment .5%

Telephone Fax and Postage .75%




( Carriage includes inlandfreight, sea freight, insurance

and other expenses )Vehicle Running Expenses

Price/Liter Traveling per day Annual

Tours

1 Car 35 300 Km per day 100

2 Motorcycles 57 50 Km per day 300

Sale Point Expenses ( In EU

Countries)Per Month Annual

Rupees Rupees

Sale office rent

40,000

480,000

Other Over head Charges30,000

360,000

840,000

Promotional Expenses

Quantity Per unit

book lets 1,500 350

Web site Expenses 1 50,000

Newspaper Advertisements 24 50,000

Other Income - includes profiton Bank deposits, and scrap of spare parts & salt scrape

1% of turnover




24

99.. FFIINNAANNCCIIAALL SSTTAATTEEMMEENNTTSS

99..11..IINNCCOOMMEE SSTTAATTEEMMEENNTT

(Million Rupees)

Year - I Year - 2 Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8 Year - 9 Year - 10Sales - Net of Sales Tax 35.66 42.39 47.00 51.84 57.16 63.02 69.48 76.60 84.45 93.11

Cost of Sales 13.06 16.33 17.98 19.62 21.44 23.44 25.64 28.05 30.71 33.63

Gross Profit 22.60 26.06 29.02 32.23 35.72 39.58 43.84 48.55 53.74 59.48

Administrative Expenses 2.41 2.49 2.65 2.82 3.03 3.28 3.55 3.86 4.20 4.58

Marketing & Selling Expenses 7.79 8.32 8.88 9.48 10.13 10.83 11.58 12.40 13.27 14.22

Total Administrative & Selling Exp 10.21 10.81 11.52 12.30 13.16 14.11 15.13 16.25 17.47 18.80

Operating Profit 12.39 15.25 17.50 19.92 22.56 25.48 28.71 32.29 36.27 40.68

Other Income 0.36 0.42 0.47 0.52 0.57 0.63 0.69 0.77 0.84 0.93

12.75 15.68 17.97 20.44 23.13 26.11 29.41 33.06 37.11 41.61

Mark up on Long Term Loans - 1.06 0.83 0.61 0.39 0.17 - - - -

Bank Charges 0.04 0.04 0.05 0.05 0.06 0.06 0.07 0.08 0.08 0.09

Other Charges 0.64 0.73 0.85 0.99 1.13 1.29 1.47 1.65 1.85 2.08

Financial & Other Charges 0.67 1.83 1.73 1.65 1.58 1.52 1.54 1.73 1.94 2.17

Profit before Taxation 12.08 13.85 16.23 18.79 21.55 24.58 27.87 31.33 35.18 39.44

Taxation 0.53 0.64 0.71 0.78 0.86 0.95 1.04 1.15 1.27 1.40

Profit after Taxation11.54 13.21 15.53 18.01 20.69 23.64 26.83 30.19 33.91 38.04

Retained Earnings - 11.54 24.76 40.29 58.30 78.99 102.63 129.45 159.64 193.55




25

99..22..BBAALLAANNCCEE SSHHEEEETT

(Million Rs.)Year - I Year - 2 Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8 Year - 9 Year - 10

Tangible Fixed Assets 8.37 7.80 7.31 6.86 6.47 6.12 5.80 5.51 5.25 5.01

Long Term Deposits

Electricity 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15

Current Assets:

Stock in Trade 2.20 2.56 2.79 3.08 3.39 3.73 4.11 4.52 4.98 5.48

Stores & Spares 0.16 0.20 0.22 0.24 0.26 0.28 0.31 0.34 0.37 0.40

Advances, Deposits & Other

Receivables 1.88 2.06 2.26 2.47 2.71 2.97 3.25 3.57 3.91 4.29

Accounts Receivable 4.40 5.23 5.79 6.39 7.05 7.77 8.57 0.94 10.41 11.48

Cash in Hand / Bank 12.04 23.56 37.06 52.90 71.29 92.48 118.35 155.98 180.17 216.81

Total Current Assets 20.68 33.61 48.12 65.08 84.69 107.22 134.58 165.34 199.84 238.47

Total Assets 29.20 41.56 55.58 72.09 91.31 113.49 140.53 171.01 205.24 243.63

Owners Equity:

Capital Introduced 7.94 7.94 7.94 7.94 7.94 7.94 7.94 7.94 7.94 7.94

Accumulated Profits 11.54 24.76 40.29 58.30 78.99 102.63 129.45 159.64 193.55 231.59

19.48 32.70 48.23 66.24 86.93 110.57 137.39 167.58 201.49 239.53

Long Term Loan 6.35 4.76 3.18 1.59 - - - - - -

Current Liabilities:

Current Portion of Long Term Loan 1.59 1.59 1.59 1.59 1.59 - - - - -

Accounts Payable 0.06 0.10 0.10 0.11 0.12 0.13 0.14 0.15 0.16 0.18

Accrued Charges 1.18 1.28 1.39 1.52 1.65 1.79 1.95 2.13 2.32 2.53Mark - up payable - 0.50 0.39 0.28 0.17 0.06

Sales Tax Payable - - - - - - - - - -

Provision for Taxation 0.53 0.64 0.71 0.78 0.86 0.95 1.04 1.15 1.27 1.40

3.36 4.10 4.18 4.27 4.38 2.92 3.14 3.43 3.75 4.10

29.20 41.56 55.58 72.09 91.31 113.49 140.53 171.01 205.24 243.63




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99..33.. CCAASSHH--FFLLOOWW SSTTAATTEEMMEENNTT

(Million Rs.)Year - I Year - 2 Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8 Year - 9 Year - 10

Profit before Taxation 12.08 13.85 16.23 18.79 21.55 24.58 27.87 31.33 35.18 39.44

Depreciation 0.65 0.57 0.50 0.44 0.39 0.35 0.32 0.29 0.26 0.24

12.72 14.42 16.73 19.23 21.94 24.94 28.19 31.62 35.44 39.68

Stock in Trade (2.20) (0.36) (0.23) (0.28) (0.31) (0.34) (0.38) (0.42) (0.46) (0.50)

Stores & Spares (0.16) (0.04) (0.02) (0.02) (0.02) (0.02) (0.03) (0.03) (0.03) (0.03)

Advances, Deposits & Other

Receivables

(1.88) (0.18) (0.19) (0.21) (0.24) (0.26) (0.29) (0.31) (0.35) (0.38)

Accounts Receivable (4.40) (0.83) (0.57) (0.60) (0.66) (0.72) (0.80) (0.88) (0.97) (1.07)

Accounts Payable 0.06 0.03 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01

Accrued Charges 1.18 0 .10 0.11 0.12 0 .13 0.15 0 .16 0 .17 0 .19 0.21

Mark - up payable - 0.50 (0.11) (0.11) (0.11) (0.11) (0.06) - - -

Sales Tax Payable - - - - - - - - - -

(7.40) (0.77) (1.01) (1.09) (1.19) (1.30) (1.37) (1.45) (1.60) (1.76)

Cash form other Sources

Sponsors' Equity 7.94 - - - - - - - - -

Debt Financing 7.94 - - - - - - - - -

15.88 - - - - - - - - -

Total Sources 21.20 13.65 15.72 18.14 20.75 2 3.63 2 6.82 30.17 33.84 37.91

Applications:

Fixed Assets 9.01 - - - - - - - - -

Long Term Deposits 0.15

Re -Payment of Loan - 1.59 1.59 1.59 1.59 1.59 - - - -Taxation - 0.53 0.64 0.71 0.78 0.86 0.95 1.04 1.15 1.27

9.17 2.12 2.22 2.29 2.37 2.45 0.95 1.04 1.15 1.27

Cash Increase/(Decrease) 12.04 11.53 13.50 15.84 18.39 21.19 25.87 29.13 32.69 36.65

Opening Balance - 12.04 23.56 37.06 52.90 71.29 92.48 118.35 147.48 180.17

Closing Balance 12.04 23.56 37.06 52.90 71.29 92.48 118.35 147.48 180.17 216.81




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SMEDA Salt Products

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Transcript of SMEDA Salt Products