MAGA Tea

Group Members

SYED RAZA ABBAS 8MOHAMMAD ALI 41FAHAD MANNAN 40MAIMOONA AKHTAR 10MEHWISH MANZOOR 47SADIA BALOUCH 45

MBA HRM 5th SemesterAlfalah Institute of Banking and Finance Bahauddin Zakariya University Multan

Table of Content Company Overview......3 History of Engro......4Business Defination...6Industry Anaysis..........8Customer Analysia .......................................9Competitive Analysis.. 13Marketing Plan..14Financial Plan...28

Company Overview:

Engro Foods Limited is an 87% owned subsidiary engaged in the manufacturing, processing and marketing of dairy products, frozen desserts and fruit drinks. The business owns two milk processing plants in Sukkur and Sahiwal and operates a dairy farm in Nara, Sindh. In its continued efforts to elevate consumer delight worldwide, the business has established several brands that have already become household names in Pakistan such as Olpers (UHT milk, low-fat milk, cream, desi ghee, lassi and flavored drinks), Omor (frozen desserts), Tarang (tea whitener), Dairy Omung (UHT dairy liquid and dessert cream) and most recently, Mabrook (fresh dairy).Engro Foods is among the biggest and fastest growing companies in Pakistan with a vision to cater to local needs with products conforming to global standards.Highly passionate about providing millions of people across the length and breadth of Pakistan and beyond with the ultimate brand experience, our product portfolio comprises some of the country's biggest and best selling brands including Olper's, Olper's Lite, Omore, Dairy Omung, Olper's Lassi and Tarang.Engro Foods Registration Number : 0050184 National Tax Number : 2285414-2But whether it is our thick, creamy all-purpose milk, scrumptious ice-cream high on nutrition content or refreshing range of beverages, our approach remains largely the same as we strive to keep product innovation at the forefront of our guiding philosophy and consumer satisfaction at the heart of our operational strategy. History of Engro CorporationIn 1957, the search for oil by Pak Stanvac, an Esso/Mobil joint venture led to the discovery of the Mari Gas field near Daharki a small, remote area in Upper Sindh province at the time. Esso proposed the establishment of a urea plant in that area which led to a fertilizer plant agreement signed in 1964. In the subsequent year, Esso Pakistan Fertilizer Company Limited was incorporated, with 75% of the shares owned by Esso and 25% by the general public.The construction of a urea plant commenced at Daharki in 1966 and production began in 1968. At US $43 million with an annual production capacity of 173,000 tons, it was the single largest foreign investment by a multinational corporation in Pakistan at the time. As part of an international name change program, Esso became Exxon in 1978 and the Company was renamed Exxon Chemical Pakistan Limited. The Company continued to prosper as it relentlessly pursued productivity gains and strived to attain professional excellence.In 2002, the renowned Dawood Group became the patron shareholder of Engro Chemical Pakistan Limited. Soon thereafter, the Company started a journey of venturing into other sectors including foods, energy, industrial control and automation, PVC resin manufacturing and marketing, and chemical terminal and storage.Engro Chemical Pakistan Limited then started a journey of venturing into other sectors including foods, energy, industrial control and automation, PVC resin manufacturing and marketing, and chemical terminal and storage.Engro Fertilizers Limited was incorporated in June 2009 to manage the fertilizer business post demerger. The demerger required the approval of the High Court of Sindh, which was granted on December 9, 2009 after obtaining the requisite approvals from the creditors and shareholders of the Company. The demerger became effective from January 1, 2010. Consequently, all fertilizer business assets and liabilities have been transferred to Engro Fertilizers Limited against the issue of shares to the Company.overseeing the performance of the subsidiaries and affiliates, allocation of capital, management of talent, leadership development, HR guiding policies, leadership role in public relations and CSR activities, control structures, legal and IT support. VisionEngro Foods will continue to make investments aimed at impacting lives and delighting consumers each day, every day, in a multitude of ways. Core ValuesAt Engro Foods our core values continue to define every aspect of our way of doing business ensuring that we value the five hats that we wear to guide us in our purpose, principles and business operations.

Business DefinitionTea is the most popular drink in the world. Every day billions cup of tea consumed by the consumers. In Pakistan, a morning and evening cup of tea is an essential part of everyday culture. This tradition has existed for many years. Every guest in a home in Pakistan is most likely to ask for a cup of tea to relax after a demanding journey. This trend has always created a strong demand for tea in Pakistan and made it the world's third largest importer of tea. Pakistan imports all its tea from abroad and is the second largest tea importer. The per capita consumption of tea in Pakistan is 1kg/annum. The Government imports about 1,40,000 metric tons of tea costs billions of rupees annually. The demand for tea is increasing year by year in the come around of high population growth (3% annually) .Pakistan is expected to become the world largest tea importer in the near future. For future, needs of our product should be Profitable . In 2012, the tea industry reached the $1.7 billion category and it is expected to continue growing indefinitely . Market analysts prove that the tea industry will continue to boom and is not expected to reach saturation level in the near future. Engro food Ltd. is going to launch its new black tea product in Southern Punjab regions.

Brand Name MAGA TEA Logo

MAGA tea will helps its consumers incorporate confidence, optimism and cheerfulness in their lives. In the world of tea blending in Pakistan and around the world means only two things; Quality & Reliability. . In order to ensure a successful product introduction. Firstly we want to target some regions of Pakistan then establish our product domestically. In order to ensure a successful product introduction. Firstly we want to target some regions of Pakistan then establish our product domestically.

Industry Analysis: Market Overview of TeaTea is included in food and beverage industry. ENGRO food is member of one the famous and renewed ENGRO group of Pakistan . ENGRO food choose Southern Punjab market for its new tea brand. For future, needs of tea products should be Profitable .In 2012, the tea industry reached the $1.7 billion category and it is expected to continue growing indefinitely . Market analysts prove that the tea industry will continue to boom and is not expected to reach saturation level in the near future. The competitive growth requires excellent plan of the business. Include the new concept, categories and brands will entail a period of continuous investment with consequent impact on profit. Engro Food will increase the product line of MAGA TEA in Different tastes of Tea like Ice tea , Danedar tea .Growth of both, new and existing categories is impacted on our sales increase .we will continue to focus on our aim of strengthening our market leadership in future through continuous innovations, increased consumer focus, deepening the distribution .we will introduce Green tea Bags and Black Tea Bags of MAGA tea and Our people will remain loyal for the continued growth of the business. Increase of taxes in tea, remains an issue particularly with the increase in sales tax. Then we will increase the price of MAGA TEA dramatically. MAGA TEA require promotion to introduce tea among consumers. From where people get interest in taking MAGA TEA as a new taste. For the last decade, the health benefits of tea have gained wide coverage in the media. Studies continue to show the beneficial properties of tea, with health benefits from lower cholesterol levels to improve health and decreasing chance of cancer and many other surveys conducted related tea advantages ,So i have idealize that tea will be beneficial for people health and the business of tea will gain profit in Pakistan .Customer Analysis: MAGA TEA is Steady growth expected over the forecast period .The hot drinks market is expected to further develop between 2007 and 2012 as the population of Pakistan increasesThe population is increased.People of Multan use tea daily 3 to 4 times in routine.Customers use open tea and Now people are aware of packet tea is safe and healthy for them. They rely on brand tea that is fully pack in sachet or packet. So, MAGA Tea Will satisfy their cutomers to provide them sachet pack tea with great taste.Target Market As a whole when we see the market of tea in Pakistan, The target market of tea is the all ages of the people from 5 to 70. The target of Maga Tea brand is the rural areas of Southern Punjab and along with the use in some urban areas of Multan offices and business class and home as well. VITAL TEA is basically the one to one competitor against Lipton yellow label and us. In this current situation that is clearly shows that potential of each brand in each segment define by the company. They clearly look at the nature and extent of diversity of buyers needs and wants in a market. This thing offers a great opportunity for VITAL TEA to focus its business capabilities on the requirement of one or more groups of buyers. But in Multan VITAL TEA is used less and VITAL TEA has a less market share in Southern Punjab. VITAL TEA has 6% market share. VITAL TEA product is also belong to Haroon Abad city 15-B, AWAMI BAZAR, HAROONABAD of (Bahawalpur Division) Southern Punjab. MAGA TEA is a new tea and our target market will be the Schools, colleges and Universities of Southern Punjab. Its depend upon the sale and taste of our Tea either people prefer to take MAGA TEA as compare to the VITAL TEA. Market SegmentationThere are two clear segments of consumers in the market, branded tea consumers and un-branded tea consumers. In Punjab, the city dwellers as well as a majority of rural areas are absolutely brand loyal while unbranded tea is only popular in teashops and hotels. In Khyber Pakhtoonkhawa and Baluchistan, 90% of the population still prefer the unbranded form as it gives them the chance of see and smell what they buy before paying for it. In addition, the mindset is such like that in southernpunjab rural areas.MAGA TEA segment the Multan market very accurately with Demographic Segmentation:-

Age Above 5 years. Gender Male, Female Family size 1-2,3-4,5 above. Income Level Almost all people. Occupation All categories. Education Educated and uneducated. Religion All Race Asian Nationality Doesnt matter

Geographic Segmentation:- World regionAsia CitiesMultan Density Urban-Rural Climate Hot & dryBehavioural Segmentation: Occasion Any occasion Loyalty Status Not Significantly high Readiness Stage Awake & interested Attitude towards brand Positive & enthusiasticPsychographic Segmentation:

Social Class Every class Lifestyle Fulfilled, believers, experience makers

The main objective of the segmentation is to examine of VITAL TEA differences in needs and wants and to identify the segments within the product market of interest. Demographic Segmentation of VITAL TEA product is not bounded to any particular age, gender or lifecycle stage. This brand is meant for the entire user in higher upper or middle group. MAGA TEA will also segmented the market as per the Vital tea segmentation after launching. MAGA TEA will drink by Male & Female of class A, B & C upper ,middle and lower class families. All hot drink users will also take MAGA TEA as their muscle relaxation. MAGA TEA will be liked by every age group of people in future.CertificationVITAL TEA or LIPTON company to be awarded the ISO 9001/2000 Quality Certification. So as per the MAGA TEA will also register the tea from (PSCS) Pakistan Standard Quality to run the business legally and complete the registration requirements. Customer Needs Market Potential of MAGA TEA is Steady growth expected over the forecast period .The hot drinks market is expected to further develop between 2007 and 2012 as the population of Pakistan increases. As Majority of population consists of youth & there is a need to cater this major segment because with the passage of time their inclination towards tea would be more & more because studies shows that older consume more than younger. It will also be boosted MAGA TEA. Its sales volume will be increased.

Competitive Analysis:Three big competitors of MAGA TEA are VITAL TEA, TAPAL TEA and Unilever brands LIPTON and SUPREME .They have a big market share in Pakistan. In Pakistan tea is uses by 150,000 tons and the organized market show 80,000 tons and the unorganized show 70,000 tons. Here organized depicts the market owned by the brands and unorganized depicts that this portion is owned by the loose tea. The main competitor for organized tea market is the unorganized tea market present in Pakistan. Engro food main focus is on unorganized tea market. Where different companies like UNILEVER and VITAL TEA is holding the less market share. Some other companies also present in the market but having very low share of the market. Unilever Pakistan limited has 43% market share. Tapal private limited has 41% market share. Vital Tea limited has 3% market share. Tetley has 4% market share The remaining 10% belongs to other market share in the organized market.Direct Competitors of MAGA TEA Unilever Pakistan limited has 43% market share. Tapal private limited has 41% market share.Indirect Competitors of MAGA TEAIn Multan VITAL TEA is used less. VITAL TEA has 6% market share. VITAL TEA product is also belong to Haroon Abad city 15-B, AWAMI BAZAR, HAROONABAD MAGA TEA is a new tea and our target market will be the all ages from rural, Schools, colleges and Universities of Southern Punjab. Its depend upon the sale and taste of our Tea either people prefer to take MAGA TEA as compare to the VITAL TEA Vital Tea limited has 6% market share. The remaining 10% belongs to other market share in the organized market.

Marketing Plan:Market Trend: Trends of market are now changing. If we see the consumers of tea firstly they are using or you can say addicted of the generic tea which is the black one but now the trend is changing. Consumers now want something different in taste now as the competition is getting higher. Consumer of tea wants some new flavours in tea because now their taste is changing as the time is changing so trend is changing in the market. And VITAL TEA utilize this trend very accurately as their innovations show us everything. MAGA TEA will also change the taste to Include the new concept, categories and brands will entail a period of continuous investment with consequent impact on profit. Engro food will increase the product line of MAGA TEA in Different tastes of Tea like Ice tea , Danedar tea etc and give a complete satisfaction to their consumers first. Product Differentiation: VITAL TEA Industry is now on the working with full strength as per their investment. Market growth of VITAL TEA is also increased. Large players has established their brands in the market and enjoyed huge profit margins. Now they are looking towards product differentiation and multi segmentation because consumers are now more taste conscious and looking for variety available to them in a tea market. MAGA TEA should make a good marketing strategy to get huge profit margins in future. We have to expand our business and segmentation to the upper Punjab and Sindh after getting positive response of sale.

Market Research Through R&D: VITAL is now becoming a research-oriented company. It subscribes to conducts various researches in the area of retail audits, consumer behavior, media planning and product development. This research is used for continuous improvement in product quality, brand positioning and communication according to the changing requirements of the consumers. Consistency and quality are the two keystones of Eastren VITAL company production policy, and the Quality Control Department at VITAL ensures that flavor and freshness is never compromised. MAGA TEA will reserach on tastes and people preferences ,product quality our brand positioning time by time. Our vast experience in the world of tea blending in Pakistan and around the world means only two things; Quality & Reliability. Price Strategy: TAPAL over VITAL TEA has competitive pricing strategy for its products. In competitive pricing the price of the product is determined considering the price of competitors. In this type of pricing strategy, the prices of the competitors are studied . As the price of TAPAL and VITAL tea is around 300 rupee per Kg, they are introducing the TEA with a price slightly lower than increasing it. 200 grams Vital Tea (Flagship Product) Hard Pack R.s 70400 grams Dawn Classical Dust Tea Pack R.s 155 MAGA TEA will make a strategy to get influence of the people in initial stages of the product The prices of tea are very costly and mostly people use Kenya Tea or Sri Lankan tea because of the less income in Southern Punjab as compare to LAHORE and Karachi. Firstly, we launch our product in Multan region to get positive response from these southern Punjab people. Why people use loose tea of Sri Lanka and Kenya. MAGA TEA will provide them less costly tea as per the price of 220 per Kg and 20 rupee sachet60 rupee sachetpacks will available in starting time of launching. After by adopt this strategy MAGA tea sale will observe. The main aim of this research study is to analyze the preference of people (of different age groups) on consumption patterns of tea. If our product is survived in the market then we will measure the income of Multan people 200 grams MAGA TEA Hard Pack Rs. 55 400 grams MAGA TEA Hard Pack Rs. 120 Study claims as the high percentage of illiterate people does causes a problem for them as these sort of people does not know about the problems in the loose tea in the market. A major portion of the market which is a low level class goes for the loose tea as they do not know the low quality of tea used in it which can be a threat for their health. But due to the less cost of MAGA TEA people will purchase it and we will aware the people by adding promotion in Schools and Universities and Bus lorry stand to aware the people about problems in the loose tea.

Promotional PlanWe will use the different Mediums to promote our brand name. There are different ways through which we can create the positive image of our brand in the society. In today high competitive landscape you cant rely on one medium for the better image. Different association must be the part of brand and customers so those customers get awareness about the brand. I think the best advantage of using different media is that different customers are associated and affiliated with different media. So though their desire media and associations customer attract to the brand and caused the Brand Equity. So to enhance our MAGA Tea brand equity we will use the different medias, which are following. Print MediaPrint Media is a medium that disseminates printed matter. NewspaperWe use Daily Jang for prints add. Which head office in Multan at Adali Chowk. We select this paper because this well-known newspaper of Pakistan. This is the part of Geo group which is the Pakistan famous news channels. Geo group has different channel in Pakistan. Therefore has great image in the news. So the rating of geo channel in High and circulation of Jhang newspaper is also high. Large number of people linked with Jhang newspaper and read it daily. As well as in Multan city the ratio of reading the Jhang is high. So thats why we select this newspaper for our promotion.

Cost:Each page of newspaper contains 8 columns. Width of each column is 4.1 cm. So total width of page is 4.1 8 =33cm. Length of the single page is 54 cm. Minimum space for single add is 5cm 1 column.Rate of add have different cost at different pages. Newspaper consist of 16 pages and just front 2 have coloured adds and other consist of black & white add. So we will use the black & white pages for our MAGA Tea advertisement. Basic rates: 515 Rs. for normal pages (3 to 13). Inside front: 772.50 per cm per column. Inside Back: 772.50 per cm per column. Back page: 1158.75 per cm per column. Front page 1545 per cm per column.MagazineWe also want to publish the print add in the Sunday magazine of express Multan. We select the sunday magazine because it is very popular as newspaper. There is possibility of discount to publish the add in both the part of Jang.

Akhbar e Jehan of JungThis is weekly publish magazine by Jang group. We will use this magazine for advertisement because this publishes on Sunday and this is the best time to create awareness among the people. Page Size40cm * 28cm No. Of Columns06 Column Width4.25cm Column Length37cm No. Of Pages68 or moreRate is different according to page position.Inside Full PageFull Page ColorRs. 1,25,000

Page 36 (White Offset)Full Page ColorRs. 1,35,000

Inside Front CoverFull Page ColorRs. 1,50,000

Inside Back CoverFull Page ColorRs. 1,50,000

Back CoverFull Page ColorRs. 2,25,000

Out of Home MediaBillboard:We select 4 locations for large billboards in Multan.1) In Chwk Kumharan. In the middle of Chwk Kumharan look right side billboard to let for add2) Another billboard is free which is near to Rashid Abad Chowk. This is situated on the main road and position of board is perfect to attract the audience.. 3) Third location which we looking for at Kent. This billboard is near to the Askery Jheel. Now this is in the use of Army where they display soldiers of Pakistan. After get permission we can use this place for our Brand promotion. 4) 4th location which we looking for is at some distance from 9 number chuongi. From 9 no. to Kent on the flyover there is hooding which is under the PepsiCo and they use to promote the Mountain Dew promotion now days. We thought that this would be the best one for our outdoor promotion. Billboard Size is 50 * 20=1,000 sq. ft CostCost of billboard depends on three things.i) What type of Add is going to the part of Billboard?ii) What is the Placement of Billboard (in City or outside City)?iii) What is the Size of Billboard?These are three factors which finalized the cost of Billboard. There are different rate of billboards in Multan.Cost of Billboard in City is 50,000 Rs.Cost of Billboard in Kent is 75000 Rs.Cost of Billboard outside the City is 50,000-100,000 Rs.Pena FlexWe also use different type of Pena flex for the publicity of our MAGA Tea. We will use the different Pena Flex near to our MAGA Tea location. This is so because to create the awareness among the customers they will play a Vitol role. We will use the Pena Flex in different Location like, 9 & 6 No., B.Z.U, Gulgast, Husain Agahi and Larry Ada.CostWe will use the 20*10 ft Pena Flexes. Par squires foot cost of each Pena Flex is 12 Rs. So total cost will be, Total Squire Foot = 20 * 10= 200 sq. ft. Total Cost (1 Pena Flex) = 200 * 12= 2400 Rs Total Cost (6 Pena Flexes) = 2400 * 6= 14400 RsStreamersStreamers will be placed on that places where people can easily picked and see the message of our Tea. These would be place roads and colonies etc. these will convey the short but effective message about over MAGA Tea. Special offers and discounts information also provide through the streamers. CostAs we are starting the new business then need large amount of promotion to stable the business and create the positive image in the mind of customers. So we need large amount of streamers to create awareness among the customers. We discover that per unit amount of streamers are 120-150 Rs. So for the first month we need 100 streamers in Multan.Total Cost Streamer=100 * 15 = 15,000 RsTransitAnother tool which we will use for promotion will be the transit. we are starting our tea business just in Multan so we chosen the transit mode which communicates the message in Multan. Therefore IB bus service is the best source in this respect. Because this move just in Multan City , rural ares and salarwan. Another option may be the Faisal Mover (FM) within in Multan Bus Service. This service moved from Vehari Chwk to Dera Adda. FM bus service passed through the crowded areas of Multan. Therefore we select this service as Transit mode. Our third options in transit mode will the Auto Riksha in Multan. Large numbers of people like to use auto Rikshaws for convince. Another authentic source of transit advertisement. Their range is every street, colony, Mohallah and Chwks of Multan. Large numbers of people like to move toward their desired places through Auto Rikshaw. So these also help to convey the message to the customers.

Merits of Transit: Fast way to convey the message. Cheaper in Cost. Cover more audience. Easy to understand and recognize by the customers. Caused to increase the Brand Equity.Demerits of Transit: Make low quality Brand image in the mind of customer. Owner of transit vehicles are not property keep the message to the customers. Dont neat and clean the poster of company. Then cant seen by the audience. Sometime one vehicle using more than one messages by the different companies.Wall CalkingWall chalking is another source of street furniture. This is an effective way to convey the message to the customers. We will prefer to those area for wall chalking where people visit for picnics like Parks, Zoo, Game Houses and Sports grounds Etc. we select these places because when people go there they also prefer taking food and other household goods and is the right time to tell the people about our Tea. Otherwise to promote the product road is also the better place for wall chalking. During the walk people focuses on the wall chalking message.

CabinWe also use Cabin to attract the customers. Multan is famous for summers. It is too hot in summers so we will different type and stylish cabins for customers. Where people can stay and enjoy their time this would the effective techniques to attract the customers. So we have selected different places for the cabins Larry Adda 9 No. Chungi B.Z.U Multan Cowk Kumharan Dera AddaCost We have to built total 5 cabins and total cost of 5 cabins will be 175,000 Rs. Broadcast MediaTV:Most effective way to create awareness among the customers Is Broad Cast Media. Reach:We have planned to target the following channel. Waseb Tv Multan , ROHI Tv, Express NewsTime Frame: We will use Prime time for our advertisement most of the time. Because this is the best time to attract the audience. Large amount of viewer seeing the TV at that time.

Cost:Each channel has different cost structure.Cost of TV Ad on Waseb TV Multan, ROHI TV and Express News:TimingPricingBasis of SelectionDays to runTime to run per DayTotal Cost per day

17:00-19:0020000.00/mWhile having tea most of SP people watch express,Waseb Tv and Rohi Tv etc1stto 10thday and 15thto 30thday1 minute ad 10 time during this hour200,000.00

19:00-20:0075000.00/mTV Hour1stto 20thday1 minute ad 2 times a days in this time150,000.00

21:00-22:00260,000.00/mMostly executive class at this time watch TV for external information like politics, economy, national and internationalAll 30 Days with little time variations on selected hours1 minute ad 3 time during this hour780,000.00

RadioRadio is another effective source to attract the customer. In the some part of Multan Radio is best source to collect information. For our MAGA Tea advertisement we have to select different channels on radio. FM 104.6 (B.Z.U) Must FM 103 (Multan City) FM 101 FM 93CostCost of the Radio is less than TV adds. Its Minimum charges are 10,000 Rs. After the negotiation about Frequency and length of add charges will increase. When frequency and time frame of add is high then price will be higher than 10,000 Rs. Electronic MediaIn today modern era electronic media is playing Vitol role to educate and increase the brand equity of brand. Internet is the best source of electronic media. InternetA computernetwork consisting of a worldwide network of computernetworks that use the TCP/IP network protocols to facilitate data transmission and exchange the information. In our MAGA Tea we have the home delivery service of products. We will start online purchasing for the relaxation of customers. Customer will place the order through our website then we deliver the good at their home. This will help us to create the brand equity of the brand. Distribution Channel Manufacturer ------ Distributor---------Retailer --------Consumer Our product MAGA TEA will use 3 types of distribution channel to minimize the cost of our product in beginning stage. we will use manufacture cost and send our product directly to retailer and retailer will provide the MAGA TEA to consumers. Exit Strategy Disposal of equipment, and furniture, and fixtures would occur at auction. The additional assets such as the staffs uniforms, table cloths, and cutlery could be sold at auction. Food inventory because of its quick perishable time would be considered a write-off.

Financial Plan:Start-Up Costs Total start up costs will be 35000000 of which will be contributed by the owners and the remainder will be secured MAGA Tea ough a proposed bank loan. Start-Up Expenses Amount in R.s

Permits Deposit 2,00,000

Contingency urgrent 20,00,000

Promotion expense 8,00,000

Working Capital 93,30,000

Pre Opening Expenses 2,25,00,000

Salaries expense 1,70,000

Total Start-Up Expenses 3,50,00,000

Source and Use of Funds Total start-up costs are estimated to be 35000000. The majority of the costs are associated with the Tea equipment, inventory and furniture and furnishings for the dining room. Total costs for these items are reported to be Owners will contribute 25000000 and are requesting an additional 10000000 in the form of a bank loan. The loan is expected to be a fully amortizing 5 year term note. Source and Use of Source and Use of Funds Amount in R.s

Sources of Funds

Owners' and other investments 25000000

Bank loans 10000000

Other loans -

Total Source of Funds 3,50,00,000

Use of Funds

Buildings/real estate 2,00,00,000

Leasehold improvements 25,00,000

Capital equipment 15,00,000

Location/administration expenses 2,00,000

Opening inventory Crockery 8,00,000

Advertising/promotional expenses 8,00,000

Other expenses salaries 1,70,000

Contingency fund 20,00,000

Working capital 70,30,000

Total Use of Funds 3,50,00,000

Projected Profit and Loss The profit and loss demonstrates modest increases in revenues over the MAGA TEA expected years with adjustments for inflation. Pro Forma Profit and Loss Pro Forma Profit and Loss Year 1

Income

Sales (1200000 per month)1,44,00,000

Cost of Goods Sold 36,00,000

Gross Profit 1,08,00000

Expenses

Accounting / Legal 50,000

Bad Debts 0

Shrinkage 40,000

Credit Card Fees 0

Insurance

Miscellaneous 40,000

Payroll Taxes 0

Permits and Licenses 20,000

Rent 0

Salaries 171000

Wages 0

Total Expenses 3,21,000

Net Profit 10,479,000

Projected Cash Flow The statement of cash flow shows the incoming and outgoing cash of the business. Pro Forma Cash FlowPro Forma Cash Flow Year 1

Cash Received

Cash from Operations 1,44,00,000

Cash from Receivables 0

Subtotal Cash from Operations 1,44,00,000

Additional Cash Received 0

Sales Tax

Owners Investment 2, 50, 00,000 Subtotal Cash Received 2,50,00,000

Expenditures

Expenditures from Operations 20,52,000

Cash Spent 0 Bills Paid 24,00,000

Subtotal Spent on Operations 44,52,000

Additional Cash Spent 36,00,000

Sales Tax

Loan Payment 0

Subtotal Additional Cash Spent 36,00,000

Subtotal Expenditures 8052000

Net Cash Flow 1,69,48,000

Cash Balance 1,69,48,000

Projected Balance Sheet Pro Forma Balance SheetPro Forma Balance Sheet Year 1

Assets

Current Assets

Cash 1,42,00,000

Accounts Receivable 0

Inventory 2,00,000

Other Current Assets 8,00,000

Total Current Assets 1,52,00,000

Long Term Assets

Long Term Assets-building 2,00,00,000

Accumulated Depreciation 10% 2,00,000

Total Long Term Assets 1,98,00,000

Total Assets 3,50,00,000

Liabilities and Capital

Current Liabilities

Accounts Payable 0

Current Borrowing 0

Other Current Liabilities -

Subtotal Current Liabilities

Long Term Liabilities 1,00,00,000

Total Liabilities 1,00,00,000

Paid In / Invested Capital

Retained Earnings

Earnings

Total Capital 2,50,00,000

Total Liabilities and Capital 3,50,00,000

Net Worth 3,50,00,000

30 Alfalah Institute of Banking and Finance BZU