Pre-feasibility Study

APPLE TREATMENT
PLANT
December 2023

The figures and financial projections are approximate due to fluctuations in exchange
rates, energy costs, and fuel prices etc. Users are advised to focus on understanding essential
elements such as production processes and capacities, space, machinery, human resources, and
raw material etc. requirements. Project investment, operating costs, and revenues can change
daily. For accurate financial calculations, utilize financial calculators on SMEDA’s website and
consult financial experts to stay current with market conditions

Small and Medium Enterprises Development Authority

Ministry of Industries and Production
Government of Pakistan
Pre-Feasibility Study (Apple Treatment Plant)

Table of Contents
1 DISCLAIMER ........................................................................................................................................ 3
2 EXECUTIVE SUMMARY .................................................................................................................. 4
3 INTRODUCTION TO SMEDA ......................................................................................................... 5
4 PURPOSE OF THE DOCUMENT .................................................................................................. 5
5 BRIEF DESCRIPTION OF PROJECT & PRODUCT............................................................... 6
6 PRODUCTION PROCESS ............................................................................................................... 7
7 INSTALLED AND OPERATIONAL CAPACITIES ................................................................... 8
8 CRITICAL FACTORS ........................................................................................................................ 8
9 GEOGRAPHICAL POTENTIAL FOR INVESTMENT.............................................................. 9
10 POTENTIAL TARGET CUSTOMERS / MARKETS ............................................................... 10
11 PROJECT COST SUMMARY ....................................................................................................... 10
11.1 PROJECT ECONOMICS........................................................................................................................ 10
11.2 PROJECT COST ..................................................................................................................................... 12
11.3 SPACE REQUIREMENT ........................................................................................................................ 12
11.4 MACHINERY & EQUIPMENT REQUIREMENT ................................................................................ 13
11.5 FURNITURE & FIXTURES REQUIREMENT ..................................................................................... 13
11.6 OFFICE EQUIPMENT REQUIREMENT ............................................................................................. 14
11.7 HUMAN RESOURCE REQUIREMENT .............................................................................................. 14
11.8 UTILITIES AND OTHER COSTS .......................................................................................................... 15
11.9 REVENUE GENERATION ..................................................................................................................... 15
11.10 RAW MATERIAL REQUIREMENT .................................................................................................. 15
12 CONTACT DETAILS ........................................................................................................................ 16
12.1 MACHINERY SUPPLIERS .................................................................................................................... 16
13 USEFUL WEB LINKS ...................................................................................................................... 17
14 ANNEXURES ..................................................................................................................................... 18
14.1 INCOME STATEMENT ........................................................................................................................... 18
14.2 BALANCE SHEET ................................................................................................................................... 19
14.3 CASH FLOW STATEMENT .................................................................................................................. 20
15 KEY ASSUMPTIONS ....................................................................................................................... 21
15.1 OPERATING COST ASSUMPTIONS.................................................................................................. 21
15.2 PRODUCTION COST ASSUMPTIONS .............................................................................................. 21
15.3 REVENUE ASSUMPTIONS .................................................................................................................. 21

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1 DISCLAIMER
This information memorandum is to introduce the subject matter and provide a
general idea and information on the said matter. Although, the material included in
this 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 warranties or assertions as to the correctness or soundness thereof. 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, its
employees or agents do not assume any liability for any financial or other loss
resulting from this memorandum in consequence of undertaking this activity. The
contained information does not preclude any further professional advice. The
prospective user of this memorandum is encouraged to carry out additional
diligence and gather any information which is necessary for making an informed
decision; including taking professional advice from a qualified consultant/technical
expert before taking any decision to act upon the information.
For more information on services offered by SMEDA, please contact our website:
www.smeda.org.pk

Document Control

Document No. PREF-NO. 04

Revision No. 02

Prepared by SMEDA-Balochistan

Revision Date December, 2023

For information [email protected]

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2 EXECUTIVE SUMMARY
The proposed project involves the establishment of an Apple treatment Plant
strategically located in close proximity to major urban centers or areas with high
Apple production. This endeavor is highly recommended, as it promises to yield
significant economic advantages for the country since the main focus of the
initiative is to enhance quality of locally produce apple moreover packing the
product in accordance with international standards and introduction of the product
in international markets, while creating both direct and indirect employment
opportunities domestically. Additionally, the project's appeal is enhanced by its
cost-effectiveness and relative simplicity in terms of installation.
This processing facility serves as a crucial link between international markets and
local growers. People will bring their apples to this plant for processing, adding
value to the fruit by bringing it up to international standards. The treated and
packed apples will have an extended shelf life, resulting in lower levels of spoilage
and wastage. A key feature of this initiative is the commitment to treating locally
produced apples in a hygienic manner, strictly adhering to international quality and
safety standards.
The proposed project consists of modern day state of the art machinery likewise
washing machine and upgrade platform portion, drying portion with air fan and wax
portion, heating and drying portion, automatic loader for grading machine,
conveyer belt with return conveyer, single-lane electronic conveyer, single-lane
electric fruit grading machine and a packing machine.
The Apple Treatment Plant has the capacity to treat approximately 4,800 tons of
Apples annually and will operate for 330 days a year, 8 hours a day. Initially, the
plant will operate at 75% capacity utilization, increasing by 5% annually until
reaching a maximum utilization of 95%.
The proposed business requires a total investment of Rs. 102.46 million. This
includes capital investment of Rs. 100.17 million and working capital of Rs. 2.28
million. The project will be established using 100% equity financing. The Net
Present Value (NPV) of project is Rs. 167.20 million with an Internal Rate of
Return (IRR) of 47% and Payback period of 2.78 years. The proposed project may
also be established using leveraged financing. At 50% financing at a cost of 28%,
the proposed business provides Net Present Value (NPV) of Rs. 143.46 million,
Internal Rate of Return (IRR) of 34% and Payback period of 2.94 years.

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3 INTRODUCTION TO SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was
established in October 1998 with an objective to provide fresh impetus to the
economy through development of Small and Medium Enterprises (SMEs).
With a mission "to assist in employment generation and value addition to the
national income, through development of the SME sector, by helping increase the
number, scale and competitiveness of SMEs", SMEDA has carried out ‘sectoral
research’ to identify policy, access to finance, business development services,
strategic initiatives and institutional collaboration and networking initiatives.
Preparation and dissemination of prefeasibility studies in key areas of investment
has been a successful hallmark of SME facilitation by SMEDA.
Concurrent to the prefeasibility studies, a broad spectrum of business
development services is also offered to the SMEs by SMEDA. These services
include identification of experts and consultants and delivery of need based
capacity building programs of different types in addition to business guidance
through help desk services.

4 PURPOSE OF THE DOCUMENT

The objective of the pre-feasibility study is primarily to facilitate potential

entrepreneurs in project identification for investment. The project pre-feasibility
may form the basis of an important investment decision and in order to serve this
objective, the document/study covers various aspects of project concept
development, start-up, and production, marketing, finance and business
management.
The purpose of this document is to facilitate potential investors in Apple
Treatment Plant by providing them with a general understanding of the business
with the intention of supporting potential investors in crucial investment decisions.
The need to come up with pre-feasibility reports for undocumented or minimally
documented sectors attains greater imminence as the research that precedes
such reports reveal certain thumb rules; best practices developed by existing
enterprises by 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
aspects provided later on, which form basis of any Investment Decision.

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5 BRIEF DESCRIPTION OF PROJECT & PRODUCT

Apple is an important crop in Balochistan in terms of people employed, the value

of the output it generates. The reason behind its failure to export and no demand
in the international Apple Market is mainly caused by Pakistan’s failure to supply
well processed, preserved, sorted, graded, waxed and packed apples as per the
demand of the international market. The freshness of apples from the orchard is
not retained due to the lapse period of transportation and proper treatment, which
is the main requisite of the international market.
In order to earn substantial foreign exchange it is deemed important to establish
Apple treatment plant. Since it is worth mentioning that Pakistan is a developing
country and inflow of foreign exchange is deemed important variable in growth and
development of a country.
The proposed project aims to establish a Post-Harvest Apple Treatment Plant to
boost apple exports from Pakistan and simultaneously elevate domestic fruit
quality. This facility will cater to both exporters and local traders, offering services
to process apples to meet international standards for either export or domestic
sale. By charging for these services, the project will become self-sustaining
through generated revenue. The expected surge in exported volumes will not only
promote investment in the horticulture sub-sector but also trigger positive
improvements in production methods and growing practices throughout the
industry. While addressing the critical requirements of the international market
remains the primary focus, the facility will also significantly impact domestic trade
by setting new quality standards within the local market.

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6 PRODUCTION PROCESS
The production process is mainly subjected to machine/method used particular to
the desired output product. Following is the process flow of the Apple Treatment
Plant:
Here's a comprehensive process flow for an Apple Treatment Plant, incorporating
visual elements:
Apple Intake & Pre-Sorting:
 Trucks deliver apples to the facility.
 Initial visual inspection for major defects or damage.
 Removal of leaves, stems, or other extraneous materials.
 Transfer of apples to the washing line via conveyor belts.
Washing & Sanitation:
 Apples are thoroughly washed with clean water and food-grade cleaning
solutions.
 Gentle brushing to remove dirt and residue.
 Rinsing with clean water to eliminate any remaining contaminants.
Defect Removal & Quality Assessment:
 Manual or automated inspection for visual defects (bruises, blemishes,
etc.).
 Removal of defective apples from the processing line.
 Assessment of overall quality and suitability for further processing.
Waxing & Optional Coating:
 Application of a thin layer of food-grade wax to enhance appearance and
extend shelf life (optional).
 Potential application of alternative coatings, such as edible films or 1-MCP
for additional preservation (optional).
Drying & Conditioning:
 Thorough drying of apples to remove excess moisture.
 Air drying or forced-air drying systems are common.
 Temperature conditioning to optimize storage and ripening (optional).
Precision Grading:
 Automated or semi-automated grading systems to categorize apples based
on size, color, weight, and quality standards.
 Sorting into different grades for specific markets or end uses.
Packaging & Finalization:

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 Packing of apples into designated containers (boxes, crates, bags, etc.)

according to grade and client requirements.
 Labeling with necessary information (variety, origin, grade, packing date,
etc.).
 Palletizing and preparation for storage or transport.

7 INSTALLED AND OPERATIONAL CAPACITIES

The treatment plant has the capacity to treat approximately 4,800,000 kg’s of
Apple annually and will be operational for 330 days a year and 8 hours a day.
Initially the plant will be operated at 75% of capital utilization and will increase it by
5% annually. The Maximum capacity utilization will be 95%.

8 CRITICAL FACTORS
 Selection of proper location, equipment and staff would be required to run
project successfully.
 Continuous efforts should be made for up-gradation of the processing
techniques.
 To attract large number of customers the product must be processed in
accordance with international quality standards.
 Government rule and policies may be followed
 Availability of skilled human resource may produce higher profits moreover
it may also increase efficiency of the plant
 High demand in local and international markets
 Intensive measure may be taken to maintain hygiene during apple
treatment process to maintain freshness of the Apple.
 Low market competition may also be considered as a plus point in
implementation and success of the initiative.

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9 GEOGRAPHICAL POTENTIAL FOR INVESTMENT

Pakistan is the world’s 24th largest country in apple and 34th largest by the area
for apple production. Balochistan is the largest apple-producing province, followed
by Khyber-Pakhtunkhwa, contributing 25% of Pakistan’s total apple production.
Baluchistan’s Apple production area was 88,807 hectares, with an annual
production of 482,819 tons. About 80% of Pakistan’s apple production is
contributed by Baluchistan and is mainly produced in the northern part of the
province (Javad et al., 2020). Many varieties of apples are grown in Pakistan,
including golden apples, red apples, kala kulu, kaja, gacha, amri, mushadi and
kashmiri. The major apple-growing districts in Balochistan include Mustung, Kalat,
Killa Abdullah, Killa Saifullah, Loralai, Pashin, Quetta, and Ziarat. Among these
districts, Ziarat is located in the center of these districts.

The apple processing industry in Pakistan is currently operating below its optimal
capacity, primarily attributed to a range of factors. These include the absence of
cutting-edge technologies, limited awareness, a shortage of skilled labor,
challenges in delivering inputs in the required quantities and timely manner,
elevated production costs, the prevalence of adulterated materials, and a general
lack of familiarity with modern technological advancements. This confluence of
challenges has resulted in a significant disparity between the anticipated potential
and the current operational capacity of the sector.

The introduction of strategic initiatives provides an avenue to unlock the inherent

potential within the sector, facilitating a more substantial contribution to the
national economy compared to conventional practices, where a considerable
portion of the apple yield is typically wasted or sold at lower prices within the local
market. By implementing these initiatives, there exists the opportunity to showcase
the product on the international stage, potentially leading to an influx of foreign
remittances. The optimal location for the proposed project is in close proximity to
rural areas characterized by significant apple production. The establishment of
such a facility not only holds the promise of economic advantages but also gives
rise to numerous direct and indirect employment opportunities.

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10 POTENTIAL TARGET CUSTOMERS / MARKETS

In addition to local markets in Quetta, Karachi, Lahore, Peshawar and Islamabad,
Pakistani apples have the potential to meet the demand in various countries, with
preferences often driven by factors such as taste, quality, and seasonal
availability. Some countries that traditionally demonstrate demand for Pakistani
apples or could be targeted for export include Countries in the Middle East, such
as Saudi Arabia, UAE, and Qatar, have shown consistent demand for Pakistani
fruits, including apples moreover European countries, including the United
Kingdom, Germany, and the Netherlands, are markets that appreciate high-quality
produce and may provide opportunities for Pakistani apple exports.

11 PROJECT COST SUMMARY

11.1 Project Economics

All the figures in this financial model have been calculated for estimated sales
revenue of Rs. 72 million in the year one. The capacity utilization during year one
is worked out at 75% with 5% increase in subsequent years up to the maximum
capacity utilization of 95%.
The following table shows Internal Rate of Return, Payback Period and Net
Present Value of the proposed venture.
Table 1: Project Economics (100% Equity Based)
Description Details

Internal Rate of Return (IRR) 47%

Payback Period (Yrs.) 2.78

Net Present Value (Rs.) 167,199,415

Calculation of break-even analysis is as follows:

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Table 2: Breakeven (100% Equity Based)

BREAKEVEN ANALYSIS Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Break-Even Revenue 25,216,860 25,883,900 26,736,087 27,778,148 29,018,594 30,168,633 30,981,913 32,931,199 34,566,776 36,389,747

Break-Even (Units) 1,260,843 1,176,541 1,114,004 1,028,820 1,000,641 942,770 885,198 844,390 803,879 774,250

Margin of Safety 65% 69% 73% 76% 78% 79% 81% 81% 82% 83%

However, for the purposes of further explanation the Project Economics based on
Debt: Equity (i.e. 50:50) Model has also been computed. On the basis of Debt:
Equity model the Internal Rate of Return, Payback Period and Net Present Value
of the proposed project are provide in the table below:
Table 3: Project Economics Based on Debt (50%) : Equity (50%)
Description Details

Internal Rate of Return (IRR) 44%

Payback Period (Yrs.) 2.94

Net Present Value (Rs.) 143,467,908

The financial assumptions for Debt: Equity are as follows:

Table 4: Financial Assumptions for Debt (50%) :Equity (50%) Model

Description Details
Debt 50%
Equity 50%
Interest Rate on Debt 28%
Debt Tenure 05 Years

The projected Income Statement, Cash Flow Statement and Balance Sheet
enclosed as annexures are based on 100% Equity Based Business Model.

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11.2 Project Cost

Following fixed and working capital requirements have been identified for
operations of the proposed business.

Table 5: Project Cost

Description Amount Rs.
Capital Cost
Land 8,481,600

Building/Infrastructure 47,430,000
Plant and Machinery 43,468,000
Furniture & Fixture 582,000
Office Equipment 210,000
Total Capital Cost 100,171,600
Working Capital
Equipment and Spare Part Inventory 900,000
Raw Material Inventory 450,000
Upfront Insurance Payment 434,680
Cash 500,000
Total Working Capital 2,284,680
Total Project Cost 102,456,280

11.3 Space Requirement

The space requirement for the proposed unit is estimated considering various
facilities including management office, power house, godown and open space, etc.
Details of space requirement and cost related to land & building is given below;
Table 6: Space Requirment
Estimated Unit Cost Total Cost
Description
Area (Sqft) (Rs.) (Rs.)
Area for Plant 7,00 3,500 26,250,000
Management Office 500 3,800 1,900,000
Ware house 4,000 3,200 12,800,000

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Masjid 500 4,000 2,000,000

Guards Room 100 3,400 340,000
Washrooms 200 3,200 640,000
Boundary wall - 3,000,000 3,000,000
Driveway/Open area 10,000 50 500,000
Total 22,800 47,430,000

11.4 Machinery & Equipment Requirement

Plant, machinery and equipment for the proposed project are stated below.

Table 7: Machinery & Equipment

Description Quantity Unit Cost Total Cost
(Rs.)
(Rs.)
Sorting table & Machine 1 3,800,000 3,800,000
Washing chamber with conveyor &
waxing machine 1 11,403,776 11,403,776
Grading machine 1 7,200,000 7,200,000
Packing machine 1 3,196,224 3,196,224
Generator (500 KVA) 1 4,500,000 4,500,000
Tube well 1 2,500,000 2,500,000
GST @ 18% 1 5,868,000 5,868,000
Installation & misc. 1 5,000,000 5,000,000
Total 43,468,000

11.5 Furniture & Fixtures Requirement

Details of the furniture and fixture required for the project are given below;

Table 8: Furniture & Fixture

Description Quantity Unit Cost Total Cost
(Rs.) (Rs.)

Table and chairs (lump Sum) 1 350,000 350,000

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Lighting and electric wiring 1 400,000 400,000

Fans 4 8,000 32,000
Total 582,000/-

11.6 Office Equipment Requirement

Following office equipment will be required for Apple treatment plant;

Table 9: Office Equipment

Description Quantity Unit Cost Total Cost
(Rs.) (Rs.)

Computer with desktop 2 75,000 150,000

3-in-1 printer 1 50,000 50,000
Telephones 1 10,000 10,000
Total 210,000/-

11.7 Human Resource Requirement

In order to run operations of Apple Treatment Plant smoothly, details of human
resources required along with number of employees and monthly salary are
recommended as under;
Table 10: Human Resource Requirment
Description No. of Employees Monthly Salary
per person (Rs.)
Project Manager 1 75,000
Quality checker 1 32,000
Skilled labor 5 32,000
Semi-skilled Labor 5 30,000
Accountant 1 60,000
Guards 2 28,000
Store-keeper 2 28,000
Sweeper (Part-time) 2 25,000
Plant operator 2 35,000
Total 21

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11.8 Utilities and other costs

An essential cost to be borne by the project is the administrative expense which is
Rs. 3,742,200 for the first year of business operations. Furthermore, promotional
expense being essential for marketing of Apple treatment plant is estimated as 2%
of revenue and that is Rs. 1,440,000 for year 1.

11.9 Revenue Generation

Based on the capacity utilization of 75%, sales revenue during the first year of
operations is estimated as under;

Table 11: Revenue Generation – Year 1

Description No. of Finished Units Sale Sales
Units Goods available Price / Revenue
Treated Inventory for Sale unit (Rs.)
(No.) (No.) (No.) (Rs.)
Apple Treatment 36,00,000 - 36,00,000 20 72,000,000

11.10 Raw material Requirement

The details of raw material required for this unit are provided below:
Description Price per Kg Cost per KG processed

Wax (food Grade Rs. 450 Rs. 5

One kg wax is utilized for treatment 100kgs of apples

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12 CONTACT DETAILS
In order to facilitate potential investors, contact details of private sector Service
Providers relevant to the proposed project be given.

12.1 Machinery Suppliers

Name of Addres Phone Fax E-mail Website

Supplier s

Langao
Industri
al Zone,
Longkou Longko +86
fushi03@foamext
Fushi u, 152535 -
ruder.cn
Packing Shando 98316
ng
265709
China

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13 USEFUL WEB LINKS

Small & Medium Enterprises Development www.smeda.org.pk
Authority (SMEDA)
Government of Pakistan www.pakistan.gov.pk

Ministry of Industries & Production www.moip.gov.pk

Ministry of Education, Training & Standards in http://moptt.gov.pk

Higher Education
Government of Punjab www.punjab.gov.pk

Government of Sindh www.sindh.gov.pk

Government of Khyber Pakhtunkhwa www.khyberpakhtunkhwa.gov.pk

Government of Balochistan www.balochistan.gov.pk

Government of Gilgit Baltistan www.gilgitbaltistan.gov.pk

Government of Azad Jamu Kashmir www.ajk.gov.pk

Trade Development Authority of Pakistan www.tdap.gov.pk

(TDAP)
Security Commission of Pakistan (SECP) www.secp.gov.pk

Federation of Pakistan Chambers of www.fpcci.com.pk

Commerce and Industry (FPCCI)
State Bank of Pakistan (SBP) www.sbp.org.pk

Punjab Small Industries Corporation www.psic.gop.pk

Sindh Small Industries Corporation www.ssic.gos.pk
Pakistan Horticulture Development and Export www.phdec.org.pk
Company (PHDEC)
Punjab Vocational Training Council (PVTC) www.pvtc.gop.pk
Technical Education and Vocational Training www.tevta.org
Authority (TEVTA)
Pakistan Readymade Garment Technical www.prgmea.org/prgtti/
Training Institute
Livestock & Dairy Development Department, www.livestockpunjab.gov.pk
Government of Punjab.
Punjab Industrial Estates (PIE) www.pie.com.pk
Faisalabad Industrial Estate Development and www.fiedmc.com.pk
Management Company (FIEDMC)
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14 ANNEXURES

14.1 Income Statement

Statement Summaries SMEDA

Income Statement
Rs. in actuals
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Revenue 72,000,000 84,480,000 98,736,000 114,998,400 133,525,920 146,878,512 161,566,363 177,723,000 195,495,299 215,044,829
Cost of goods sold 31,944,000 36,049,355 40,567,275 45,538,234 51,006,796 54,564,314 58,399,530 62,536,223 67,000,344 71,820,218
Gross Profit 40,056,000 48,430,645 58,168,725 69,460,166 82,519,124 92,314,198 103,166,833 115,186,776 128,494,955 143,224,612

General administration & selling expenses

Administration expense 3,742,200 4,106,546 4,506,365 4,945,111 5,426,574 5,954,913 6,534,692 7,170,919 7,869,089 8,635,235
Rental expense - - - - - - - - - -
Utilities expense - - - - - - - - - -
Travelling & Comm. expense (phone, fax, etc.) 356,400 391,100 429,178 470,963 516,817 567,135 311,176 682,945 749,437 822,403
Office vehicles running expense - - - - - - - - - -
Office expenses (stationary, etc.) 178,200 195,550 214,589 235,481 258,408 283,567 311,176 341,472 374,719 411,202
Promotional expense 1,440,000 1,689,600 1,974,720 2,299,968 2,670,518 2,937,570 3,231,327 3,554,460 3,909,906 4,300,897
Insurance expense 434,680 391,212 347,744 304,276 260,808 217,340 173,872 130,404 86,936 43,468
Professional fees (legal, audit, etc.) 720,000 844,800 987,360 1,149,984 1,335,259 1,468,785 1,615,664 1,777,230 1,954,953 2,150,448
Depreciation expense 6,797,500 6,797,500 6,797,500 6,797,500 6,797,500 6,797,500 6,797,500 6,797,500 6,797,500 6,797,500
Amortization expense - - - - - - - - - -
Property tax expense - - - - - - - - - -
Miscellaneous expense 360,000 422,400 493,680 574,992 667,630 734,393 807,832 888,615 977,476 1,075,224
Subtotal 14,028,980 14,838,707 15,751,135 16,778,275 17,933,514 18,961,203 19,783,238 21,343,544 22,720,016 24,236,377
Operating Income 26,027,020 33,591,938 42,417,590 52,681,891 64,585,610 73,352,995 83,383,595 93,843,232 105,774,939 118,988,235

Other income 2,042,928 6,113,458 10,863,740 16,879,966 24,420,981 33,476,543 44,090,887 56,558,030 71,126,473 88,384,159
Gain / (loss) on sale of assets - - - - - - - - - -
Earnings Before Interest & Taxes 28,069,948 39,705,396 53,281,330 69,561,857 89,006,590 106,829,538 127,474,482 150,401,262 176,901,412 207,372,393

Interest expense - - - - - - - - - -
Earnings Before Tax 28,069,948 39,705,396 53,281,330 69,561,857 89,006,590 106,829,538 127,474,482 150,401,262 176,901,412 207,372,393

Tax 8,140,285 11,514,565 15,451,586 20,172,939 25,811,911 30,980,566 36,967,600 43,616,366 51,301,410 60,137,994
NET PROFIT/(LOSS) AFTER TAX 19,929,663 28,190,831 37,829,744 49,388,919 63,194,679 75,848,972 90,506,882 106,784,896 125,600,003 147,234,399

Balance brought forward 19,929,663 48,120,495 85,950,239 135,339,157 198,533,837 274,382,809 364,889,691 471,674,587 597,274,590
Total profit available for appropriation 19,929,663 48,120,495 85,950,239 135,339,157 198,533,837 274,382,809 364,889,691 471,674,587 597,274,590 744,508,989
Dividend - - - - - - - - - -
Balance carried forward 19,929,663 48,120,495 85,950,239 135,339,157 198,533,837 274,382,809 364,889,691 471,674,587 597,274,590 744,508,989

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14.2 Balance Sheet

Statement Summaries SMEDA
Balance Sheet
Rs. in actuals
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Assets
Current assets
Cash & Bank 500,000 33,548,804 68,342,169 112,720,169 168,612,603 238,403,743 319,538,643 415,309,472 527,324,362 658,116,857 814,952,453
Accounts receivable - 197,260 214,356 250,981 292,787 340,444 384,116 422,527 464,780 511,258 562,384
Finished goods inventory - - - - - - - - - - -
Equipment spare part inventory 900,000 1,058,400 1,239,816 1,447,303 1,684,299 1,856,940 2,047,276 2,257,122 2,488,477 2,743,546 -
Raw material inventory 450,000 529,200 619,908 723,652 842,150 928,470 1,023,638 1,128,561 1,244,239 1,371,773 -
Pre-paid annual land lease - - - - - - - - - - -
Pre-paid building rent - - - - - - - - - - -
Pre-paid lease interest - - - - - - - - - - -
Pre-paid insurance 434,680 391,212 347,744 304,276 260,808 217,340 173,872 130,404 86,936 43,468 -
Total Current Assets 2,284,680 35,724,876 70,763,994 115,446,381 171,692,646 241,746,937 323,167,545 419,248,086 531,608,794 662,786,902 815,514,837

Fixed assets
Land 8,481,600 8,481,600 8,481,600 8,481,600 8,481,600 8,481,600 8,481,600 8,481,600 8,481,600 8,481,600 8,481,600
Building/Infrastructure 47,430,000 45,058,500 42,687,000 40,315,500 37,944,000 35,572,500 33,201,000 30,829,500 28,458,000 26,086,500 23,715,000
Machinery & equipment 43,468,000 39,121,200 34,774,400 30,427,600 26,080,800 21,734,000 17,387,200 13,040,400 8,693,600 4,346,800 -
Furniture & fixtures 582,000 523,800 465,600 407,400 349,200 291,000 232,800 174,600 116,400 58,200 -
Office vehicles - - - - - - - - - - -
Office equipment 210,000 189,000 168,000 147,000 126,000 105,000 84,000 63,000 42,000 21,000 -
Total Fixed Assets 100,171,600 93,374,100 86,576,600 79,779,100 72,981,600 66,184,100 59,386,600 52,589,100 45,791,600 38,994,100 32,196,600

Intangible assets
Pre-operation costs - - - - - - - - - - -
Legal, licensing, & training costs - - - - - - - - - - -
Total Intangible Assets - - - - - - - - - - -
TOTAL ASSETS 102,456,280 129,098,976 157,340,594 195,225,481 244,674,246 307,931,037 382,554,145 471,837,186 577,400,394 701,781,002 847,711,437

Liabilities & Shareholders' Equity

Current liabilities
Accounts payable - 410,173 460,959 516,102 575,949 638,061 672,768 709,499 748,382 789,560 746,168
Export re-finance facility - - - - - - - - - - -
Short term debt - - - - - - - - - - -
Other liabilities - - - - - - - - - - -
Total Current Liabilities - 410,173 460,959 516,102 575,949 638,061 672,768 709,499 748,382 789,560 746,168

Other liabilities
Lease payable - - - - - - - - - - -
Deferred tax - 6,302,860 6,302,860 6,302,860 6,302,860 6,302,860 5,042,288 3,781,716 2,521,144 1,260,572 0
Long term debt - - - - - - - - - - -
Total Long Term Liabilities - 6,302,860 6,302,860 6,302,860 6,302,860 6,302,860 5,042,288 3,781,716 2,521,144 1,260,572 0

Shareholders' equity
Paid-up capital 102,456,280 102,456,280 102,456,280 102,456,280 102,456,280 102,456,280 102,456,280 102,456,280 102,456,280 102,456,280 102,456,280
Retained earnings - 19,929,663 48,120,495 85,950,239 135,339,157 198,533,837 274,382,809 364,889,691 471,674,587 597,274,590 744,508,989
Total Equity 102,456,280 122,385,943 150,576,775 188,406,519 237,795,437 300,990,117 376,839,089 467,345,971 574,130,867 699,730,870 846,965,269
TOTAL CAPITAL AND LIABILITIES102,456,280 129,098,976 157,340,594 195,225,481 244,674,246 307,931,037 382,554,145 471,837,186 577,400,394 701,781,002 847,711,437

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December 2023
Pre-Feasibility Study (Apple Treatment Plant)

14.3 Cash Flow Statement

Statement Summaries SMEDA

Cash Flow Statement
Rs. in actuals
Year 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 - 19,929,663 28,190,831 37,829,744 49,388,919 63,194,679 75,848,972 90,506,882 106,784,896 125,600,003 147,234,399
Add: depreciation expense - 6,797,500 6,797,500 6,797,500 6,797,500 6,797,500 6,797,500 6,797,500 6,797,500 6,797,500 6,797,500
amortization expense - - - - - - - - - - -
Deferred income tax - 6,302,860 - - - - (1,260,572) (1,260,572) (1,260,572) (1,260,572) (1,260,572)
Accounts receivable - (197,260) (17,096) (36,625) (41,806) (47,657) (43,671) (38,412) (42,253) (46,478) (51,126)
Finished good inventory - - - - - - - - - - -
Equipment inventory (900,000) (158,400) (181,416) (207,487) (236,996) (172,641) (190,336) (209,846) (231,355) (255,069) 2,743,546
Raw material inventory (450,000) (79,200) (90,708) (103,743) (118,498) (86,320) (95,168) (104,923) (115,678) (127,534) 1,371,773
Pre-paid building rent - - - - - - - - - - -
Pre-paid lease interest - - - - - - - - - - -
Advance insurance premium (434,680) 43,468 43,468 43,468 43,468 43,468 43,468 43,468 43,468 43,468 43,468
Accounts payable - 410,173 50,786 55,143 59,846 62,112 34,708 36,730 38,884 41,177 (43,392)
Other liabilities - - - - - - - - - - -
Cash provided by operations (1,784,680) 33,048,804 34,793,365 44,378,000 55,892,433 69,791,141 81,134,900 95,770,828 112,014,891 130,792,495 156,835,596

Financing activities
Change in long term debt - - - - - - - - - - -
Change in short term debt - - - - - - - - - - -
Change in export re-finance facility - - - - - - - - - - -
Add: land lease expense - - - - - - - - - - -
Land lease payment - - - - - - - - - - -
Change in lease financing - - - - - - - - - - -
Issuance of shares 102,456,280 - - - - - - - - - -
Purchase of (treasury) shares - - - - - - - - - - -
Cash provided by / (used for) financing 102,456,280
activities - - - - - - - - - -

Investing activities
Capital expenditure (100,171,600) - - - - - - - - - -
Acquisitions - - - - - - - - - - -
Cash (used for) / provided by investing(100,171,600)
activities - - - - - - - - - -

NET CASH 500,000 33,048,804 34,793,365 44,378,000 55,892,433 69,791,141 81,134,900 95,770,828 112,014,891 130,792,495 156,835,596

Cash balance brought forward 500,000 33,548,804 68,342,169 112,720,169 168,612,603 238,403,743 319,538,643 415,309,472 527,324,362 658,116,857
Cash available for appropriation 500,000 33,548,804 68,342,169 112,720,169 168,612,603 238,403,743 319,538,643 415,309,472 527,324,362 658,116,857 814,952,453
Dividend - - - - - - - - - - -
Cash carried forward 500,000 33,548,804 68,342,169 112,720,169 168,612,603 238,403,743 319,538,643 415,309,472 527,324,362 658,116,857 814,952,453

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December 2023
Pre-Feasibility Study (Apple Treatment Plant)

15 KEY ASSUMPTIONS

15.1 Operating Cost Assumptions

Description Details
Operational Days/ year 330
Hours operational/ days 8
Shift Length (Hours) 8

15.2 Production Cost Assumptions

Description Details
Initial Capital utilization 75%
Annual Capital Utilization Growth 5%
Maximum Capital Utilization 95%

15.3 Revenue Assumptions

Description Details
Revenue 72,000,000
Cost of goods sold 31,944,000
Service Price/kg 20
Service provided per year (Kg) 3,600,000
service Quantity sold (Kg) 3,600,000

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December 2023