SRI RAHULA COLLAGE ANURADHAPURA
Mr. R. N. Thennakoon 623/22, Freeman Mawatha, Anuradhapura 025-2226255 / 025-4934081-3 [email protected]
Prepared By
0773924536 - 0776547346 - 0727203333 - 0727103333 [email protected] Sri Rahula Collage-Anuradhapura
CONTENTS
Executive Summary 03 - 03
Sector Background 04 - 06
The Current Project/Business 07 - 11
The Propose Project/Business 12 - 13
Marketing Plan 14 - 16
Production/Service Plan 17 - 18
Management and Administration Structure 19 - 20
Finance Plan 21 - 28
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1.0. Executive Summary Name of the business/project : SRI RAHULA COLLAGE Sector/Sub Sector : Education Directors/Proprietors : Mr. R. N. Thennakoon National Identity Card No and Age : 750922350V Address of the Business/project : 623/22, Freeman Mawatha, Anuradhapura Telephone/Fax : 025-2226255 / 025-4934081-3 E-mail/Web : [email protected] Existing Year Year 1
No of students Male : 409 535
Female : 352 466
No of Academic staff Male : 11 20
Female 33 45
No of Non Academic staff Male : 3 4
Female 4 6
Annual direct materials cost : LKR 2,700,000 2,970,000
Annual direct labor cost : LKR 17,214,756 26,692,085
Annual production overhead cost : LKR 4,193,000 5,450,900
Annual management & administration cost : LKR 260,000 338,000
Annual marketing cost : LKR 175,000 525,000
Annual net sales : LKR 63,011,100 84,640,500
Annual gross profit : LKR 40,688,028 61,522,426
Annual net profit : LKR 21,251,074 24,662,787
Rate of net profit before tax : 40% 34%
Rate of return : 19% 7%
Break even point : LKR 6,766,592 9,720,390
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2.0. Sector Background 2.1. Education in Sri Lanka Education in Sri Lanka has a long history which dates back two millennia and the Constitution of Sri Lanka provide for education as a fundamental right. The Sri Lanka's population has a literacy rate of 92%, higher than that expected for a third world country; it has the highest literacy rate in South Asia and overall, one of the highest literacy rates in Asia. Education plays a pivotal role in the life and culture of the country and dates back to 543 BC. Modern education system was brought about with the integration of Sri Lanka in to the British Empire in the 19th century and it falls under the control of both the Central Government and the Provincial Councils, with some responsibilities lying with the Central Government and the Provincial Council having autonomy for others.
Sri Lankan government provides free education, scholarships for disadvantaged students, mid- day meals, free textbooks, free uniforms, and subsidized transport. This enabled Sri Lanka to achieve an adult literacy rate of 92.5%. Sri Lanka was an early achiever in terms of the Millennium Development Goal of universal primary education, having reached 98% primary enrollment.
The government free education system in Sri Lanka consists of several institutes: (1) Schools that offer primary education (grades 1−5). (2) Schools that offer secondary education (grades 6−11) up to O/L examination. (3) Schools that offer senior secondary education (grades 12−13) up to A/L examination. (4) National Universities. (5) Technical education and vocational training (TEVT).
2.2. Performance of School Education Sector in Sri Lanka # Capital Expenditure for constructions and repairs of school buildings is Rs.Mn. 8292.46 in year 2014. # Investment on purchasing school furniture and equipment is Rs.Mn. 2639.90 in year 2014. # The student percentage of receiving more than 70% at the grade five scholarship examination has been increased up to 78.9% in the year 2014. # 66.67% students were qualified for G.C.E. (A/L) in the year 2014. # 66.43% students were qualified for university education in the year 2014. appeared 247376 students and qualified 149,489 students. # Provision of text books and uniforms in time. # Printing and distribution of Teacher Instructional Manuals and syllabus in time # Broadcasting and publication of programs via media and provision of facilities to access for study materials through internet.
Source: Annual Performance Report, Ministry of Education, Sri Lanka, 2014.
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2.3. Private and International Schools in Sri Lanka In addition to government schools, there are International and Private schools in Sri Lanka. International Schools charge fees and they have separate curriculum and education is usually in English medium. International Schools are popular among families who want their children to study in English medium, possible with a view to continuing their studies overseas. Some parents have to put their child in a private school when they are not selected to a popular government school.
Many schools have traditional teacher-led approach, especially even in very young ages children are forced to learn heavy subject contents. These schools aim at teaching to help pass examinations, so they can claim that they produce students with best grades. However some schools offer student-oriented inquiry based teaching methodologies.
Some international and private schools teach some parts of Sri Lankan national curriculum and many schools offer Sinhala or Tamil as second language. Different schools follow different types of curricula, some of the curricula are designed internally by school authorities. These schools do not provide knowledge relevant to national needs but they provide opportunities to enter a new world globally and may secure good employment.
A successful education system will focus on learning, rather than schooling, and create an enabling environment that promotes creativity. It should improve the quality of basic and tertiary education, and provide opportunities for lifelong learning.
2.4. Importance of the Private School Education The private or semi government schools are very important to developing country like Sri Lanka because as a developing country we provide government education totally free in presently. The people request to allocate 6% of the GDP for education but every government have faced more difficulties when allocating 6% from GDP therefore private or semi government schools are important to reduce educational expenses but government supervision and teach according to government curriculum is needed.
As a result of the disparity in quality amongst the schools in the Sri Lankan education system, there is very great competition amongst parents to enroll their children in recognized National Schools. The struggle to find places in these schools leads to a number of unfortunate consequences, including malpractice such as the forging of documents attesting to residence in the area and attempts at bribery. Increasing pressure through various means on school administrators has led to the entry of more students than can be accommodated comfortably within recognized schools, resulting in overcrowding, resource constraints and difficulties in administration. If government support to develop private or semi government schools the burden on the free education system is lowered.. Private schools and semi government schools in particular have a role to play in this regard, because they can be more flexible and responsive to change than Government schools, which need to change along with the entire education system. The heads of schools, government and private, must contribute to systemic change by proposing ways to increase the relevance of education to the needs of the nation.
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To create an effective education system, Sri Lanka needs to offer more autonomy to private sector educational institutions. In this respect, investments involving the private sector will become increasingly important. In addition to releasing more state resources for students who are affected by poverty, private sector education would provide an alternative mode of service delivery. These institutions would be compelled to offer high-quality services to remain viable in an economic context, where they are competing with public sector establishments that provide free education. This competition is particularly important in raising standards in both public and private sectors.
2.5. Global Education Today School education today is focused on establishing the fundamental literacy and numeracy skills of children, as well as developing their understanding of the world. These skills are increasingly necessary for life in the modern world, and are essential to the functioning of developed economies. For this reason, primary education is compulsory and provided by the state in almost all countries around the world. The second United Nations Millennium Development Goal was to ―ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling.‖ This goal was missed but significant progress has been made. In 1999, only 81% of children in the developing world attending primary school, and today the figure is around 92% — equivalent to 58 million children not in primary education. The world is changing fast. Boundaries—literal as well as figurative— are shifting and even disappearing altogether. The culture that once lived halfway around the world now lives just down the block. The ability to thrive in this new and rapidly changing environment is grounded in a globally focused curriculum.
The 67.4 million children who are out of school are likely to encounter great difficulties in the future, as deficient or non-existent basic education is the root cause of illiteracy. With some 775 million adults lacking minimum literacy skills, literacy for all thus remains elusive. According to UNESCO, in the world today there are about 1 billion non-literate adults. This 1 billion is approximately 26 percent of the world's adult population. Women make up two- thirds of all non-literates. 98 percent of all non- literates live in developing countries. Millions of children in poorer countries can't read or do simple sums according to a United Nations report. The report says this is because there are around 57 million children who don't have a school to go to. The global literacy rate for all males is 90.0% and the rate for all females is 82.7%. The rate varies throughout the world with developed nations having a rate of 99.2% (2013); Oceania having 71.3%; South and West Asia having 70.2% (2015) and sub-Saharan Africa at 64.0% (2015).
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3.0. The Project/Business 3.1. Vision "Contributing the development of a better society"
3.2. Mission "To produce persons who are equipped with all the necessary competencies useful to the society, well-disciplined and fit into the national as well as international levels and to dedicate for a great service of fulfilling social expectations."
3.3. Belief "Every child is unique" "Every child can learn" "Every child should looked after and cared for"
3.4. Motto "Discipline bring prosperity"
3.5. Present Situation of the Sri Rahula Collage Sri Rahula College in Anuradhapura has emerged as a unique government approved private school in the North Central Province. Its commitment in providing wholesome education has brought home, the holy city, fame and prestige. Today, Sri Rahula College, together with its affiliated bodies-The City College and the City Kindergarten- coach children by providing quality English education embedded in the national curriculum.
The student population of the Rahula College is privileged to obtain the patronage of the Ministry of Education and they have become recipients of free text books, expertise teacher service with the facility of teacher training and sources of knowledge enrichment. Although the institution still bears the burden of paying teacher salaries to the market standards to absorb the best talent, the management leaves no room for financial burdens to debacle the school development projects.
Therefore, under the guidance of the prudent and intuitive management, Sri Rahula College is housed with spacious buildings and classrooms with modern amenities for pupils to learn in a resourceful environment.
Since its humble beginning with two students, nearly a decade ago, in 2007, Sri Rahula College has been growing year by year surpassing all the government and private schools in the district in quality delivery of education. As a result, the school has carved out a niche as the most sought after school in Anuradhapura with the identity of multi- cultural, multi religious peaceful school environment. Moreover, Sri Rahula College fulfills a social demand of professionals in medical, legal, civil administration and military sectors by creating learning opportunities for their children similar to their hometowns. This fact positively caused their retention in this difficult region.
Sri Rahula College is a brainchild of the founder, Mr. Roshan Thennakoon, a young entrepreneur with intuitive mind. His strong commitment forged by the belief, ―education can eradicate poverty and empower people,‖ made the establishment come up as a prime education provider.
However, the journey was not easily made but through untold hardships and obstacles. The managing director, Mr. Thennakoon has got a strong team of dedicated teachers, faithful friends and parent community who joined hands with him to make his dream a reality.
Thus, Rahula College has become a national treasure which creates productive citizens to the country. Therefore the school needs encouragement and support from all the responsible parties to further its service to more needy children in Anuradhapura and its vicinity regions.
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Student Admissions
180 160 140 120 100 80 60 40 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Registration Fees of Rahula Collage 70000 LKR 60000 50000 40000 30000 20000 10000 0 Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Monthly Fees of Rahula Collage
4,000 LKR 3,000
2,000
1,000
0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
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3.6. Performance of the Sri Rahula Collage #. The Sri Rahula College got outstanding results at grade 5 scholarship exam in 2015 and ranked number one at district level and 35 among 53 schools in the island, which have been categorized as schools par excellence in performance, at this highly competitive examination by the examination department of Sri Lanka.
#. The Sri Rahula College students are not only clever for education but for music and dancing too. The Rahul students have won medals for Athletics, Gymnastic, Table tennis and Chess games also during the last few years. All Schools in the district have their own playgrounds but Rahula college doesn’t have that facility but students and teachers’ commitment is high. They plan, organize, practice, participate and win games.
#. The evidence for the remarkable performance that the Rahula College students achieved recently under extra curricular activities was securing the first place in the category of western music choir sinning primary mix in 2016 at National Level Competitions.
#. All cultural events are celebrated including Independence day, Sinhala New Year festival, Wesak Poya, Poson Poya, Ramadan, Christmas and Thai Pongal. All students participate actively in these events regardless their ethnic back grounds. #. Rahula College's students are discouraged in attending private tuition classes and teachers of the Rahula College also do not provide tuition for Rahula students. But if school feels necessity of such extra education, Rahula College provides after school classes without levying any charges.
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3.7. SWOT Analysis of Sri Rahula Collage Strengths Weakness Knowledge, capacity and experience Lack of financial facility Marketing channels No playground Investment of own capital Lack of space (Land & building) Human resource
Opportunities Threats Developing sector International schools bad Extra demand competition Government promote the sector
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3.8. Comparative Advantages of the Rahula Collage Enriched academic opportunities; One of the accepted benefits of Sri Rahula Collage is that they provide exceptional and challenging educational experiences through extracurricular activities.
Smaller classes; A comprehensive study on class size made by educational researchers showed that the smaller the class size, the better the average student performs on academic achievement tests. According to the international standards Sri Rahula Collage limited no of students maximum up to 35.
Parental involvement; Rahula Collage is built around open communication between parents and administration, and they make it a priority to involve parents in the community. From frequent parent-teacher meetings, social events, families become an integral part of the child’s education. This common ground also helps strengthen parent-child relationships. Dedicated teachers; The collage has appointed instructors are both qualified and passionate about their subjects, often holding advanced degrees in their field. Students have close relationships with their teachers.
A safe environment; The collage has reputations for maintaining high standards for discipline and respect from the parents within past 9 years. The collage discourages dangerous behavior and the school strongly agreed to create safe environment.
Community environment; According to the collage experience more than 80 per cent of parents believe their school’s environment is motivating, supportive and nurturing.
Ample resources; Currently the school has face lack of resource problem but considering year 2007 now collage has developed most of necessary facilities. At private schools, parents find incredible resources to support student learning in the classroom, sports field, art studio, and beyond. Rahula collage will be developed those near future because quality resources provide students with the opportunity to fully explore their interests and talents. Extracurricular activities; While academics remain the priority in the collage, encourage participation in extracurricular activities such as sports, music, arts. Extracurricular activities can provide a much-needed break from the stresses of academics while developing skills and engaging in valuable social situations.
Shared educational philosophy; There are innumerable approaches to education, and finding a school that matches one’s own perspective can create a positive, productive academic experience for child. Choosing the right private school will not only allow students to thrive in a supportive environment and build independence, but also gain unique skills that fit their learning style. Development for today's and tomorrow's world; The Rahula Collage go beyond offering the mandatory subjects required by education department curriculum; Collage re offering students a wide range of specializations including English, Math, Science and Sports. Private schools are responsible for producing many leaders in politics, business and society, with a history of adapting quickly to changes in technology and culture. And today, they are also sought by parents of kids with special needs such as behavior problems or learning disabilities. "This school really helps you focus and think about your child’s future‖.
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3.9. Proposed Expansion Mr.Thennakoon expects to expand SRI Rahula College due to extra demand grown during the past few years. Excessive extra applications were received for grade 1 and also a significant number of students have requested to enter other grades too. Mr. Thennakoon and all staffs of Rahula group have discussed and prepared plans several times regarding the expansion of the Rahula College. The expansion will be implemented in 4 steps and after the completion of these 4 steps, the Rahula College will achieve the global standards. Total development plan will be implemented within 8 years. Step 1 Sri Rahula Collage has planned to increase grade 1 classes and start A/L classes in 2018. As well they have increased classes within past few years therefore additional class rooms are required for year 2018. Mr. Thennakoon and the Rahula group has planned to construct new 4 story building including main hall, admin office, IT room, science lab, library, Staff room and 32 class rooms and it will be enough for next few years expansion. Estimated cost for this construction is Rs. 136.34Mn.
Step 2 The second step will be started at year 2019 and planned to establish second floor of auditorium and computer lab. Total estimate for the second step is Rs. 38.23Mn and Rs. 34.41Mn for the Auditorium and Rs. 3.82Mn for computer lab.
The Rahula College badly in need an auditorium. The school has faced difficulties to hold meetings and other ceremonies. Currently they have to hire it from out side at exorbitant charges. A modern auditorium is required for the school to use for internal purposes. The proposed auditorium will be constructed with 450 seating capacity, large stage, high definition sound system, high quality light system, multimedia, Wi- Fi and many more modern facilities and equipment.
Having a small computer unit which can have 26 students at time, students have the facility to lay the foundation for an IT degree offered by IDM school of computing. The college expects to expand this unit by establishing a computer lab with all modern facilities in this first stage and serve more internal students and further it for out side students including adults.
Step 3 The third step will be started at year 2021 and planned to construct another 4 story building with similar facilities suggested in the first step . Total estimate for the third step will be Rs. 136.34Mn.
Step 4 The fourth step will be started at year 2023 and planned to establish Pool and Sports Complex and Total estimate for the third step will be Rs. 167Mn.
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3.10. Project Rational It is the belief of intellectuals that education of a Country is a long term investment and it provides a country with quality and versatile work force to achieve sustainable development goals. One of the reasons for the slow development in geographically difficult zones such as Anuradhapura is lack of knowledgeable, educated population to be employed to serve the community at all levels including administrative, medical educational, legal, commercial, science and research sectors.
As a solutions to this, it has been proposed to allocated 6% of the GDP too provide free education to make it accessible to every economic level. However, this is no easy task. And also the 6% allocation too cannot provide facilities to meet the satisfied quality education.
Therefore, there is a positive understanding among the political hierarchy to promote private and semi-government schools under the direct supervision of the government while giving prominence to free education.
The Sri Rahula college being a government approved private school has realized the national educational goals and strives hard to deliver results in line with them. It coaches students for grade 5 scholarship exam, GCE ordinary level and GCE Advance level exams in accordance to the syllabuses in the national curriculums in Sinhala medium in the primary education and fully bi-lingual in the secondary. The institution is a strong believer in the existing English/Sinhala combined bi- lingual product. It has made it 100% implemented to generate accelerated results in producing techno savvy English educated population with mother tongue excellence. These venture is a proof of college’s capability of harnessing the opportunity given by the government under restrictions. The college’s prestige has brought down the sheer competition for popular schools by providing opportunities for enrolment for the same curriculum. The strong commitment and transparency together with goal – oriented planning have made it convenient for the management to develop the school physically with resources and broaden and enrich the curriculum suitably with growing demands of social, local and global trends.
The college’s prestige has brought down the sheer competition for popular schools by providing opportunities for enrolment for the same curriculum. The strong commitment and transparency together with goal – oriented planning have made it convenient for the management to develop the school physically with resources and broaden and enrich the curriculum suitably with growing demands of social, local and global trends.
3.11. Expected Support from The Government It is a well known fact that operating an Educational institute according to the existing rules and regulations in highly competitive business environment is very much challenging task.
The Sri Rahula college has to bear heavy costs in establishing infrastructure , facilities, paying teacher salaries etc. Out of all the expenses the teacher salaries and payment of the loan premiums have become an unbearable burden at the moment. Therefore if the government bodies are magnanimous in extending its support to ease the following financial burdens to the school it may continually grow sustainably ( the college policy is to maintain the school fee at minimally possible level)
• To pay the salaries of teachers assigned by the Department of Education (including the present carder and future recruitments) • To provide suitable lands from Anuradhapura city area to provide facilities such as buildings and a spacious playground. • To grant the funds to develop the school to provide more opportunities, standard facilities and ease the financial liabilities
3.12. Expected Support from The Banks/Financial Institutions Sri Rahula College will require Rs 250 Million for the proposed expansion and the College expects loan facilities from the banks/Financial Institutions under the low interest rate with the long term repayment schedule.
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4.0. Marketing Plan 4.1. Business Model Sri Rahula College provides quality and sufficient education for student and they need not get extra tuition and themed Education without Tuition.
4.2. Market Strategy
4.2.1. Target Market Anuradhapura town area and other areas around Anuradhapura are the main market areas of Rahula College. Especially Doctors, Lawyers, Lectures, Bankers and other Public and Private sector executives' children are the main target market of the college.
4.2.2. Advertising The Sri Rahula College will spend a least amount of money for its advertising campaigns but expect to develop their own website to provide information regarding the school and its services for clients because majority of its clients are more educated and widely use IT facilities. As it may develop necessary Posters, Banners and brochures for City Kids Kindergarten, City College and Rahula College for general community awareness. Few name boards will be established on different roads in Anuradhapura for marketing purpose as well as easy access for new clients.
4.2.6. Pricing Present market prices in 2017 Registration Fee LKR 45,000 - 170,000 Monthly Fee LKR 3,000 - 7,500
Prices of the Rahula Collage in 2017 Registration Fee LKR 60,000 Monthly Fee LKR 3,800
Sri Rahula International International International School Collage School ―A‖ School ―B‖ School ―C‖ Registration Fee at 2017 60,000 170,000 70,000 45,000 Remarks 145 Students Below 25 Below 25 Below 25 were registered Students were Students were Students were registered registered and registered Registration fee for first 25 students are free Registration Fee at 2017 200,000
150,000 LKR 100,000 50,000 0 Sri Rahula Collage International School International School International School ―A‖ ―B‖ ―C‖ School
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4.3. Assumption # Sales will increase in 5% since second year. # Marketing cost will increase in 5% since second year.
4.4. Sales Forecast Products/Service Existing Year Year 1 Year 2 Year 3 Registration fees of Qty 165 240 276 290 Rahula Collage Per 1 60,000 65,000 68,250 71,663 Value 9,900,000 15,600,000 18,837,000 20,767,793 Monthly service fees Qty 761 1,001 1,247 1,427 of Rahula Collage Annual 45,600 48,000 50,400 52,920 Value 34,701,600 48,048,000 62,848,800 75,506,256 Computer class fees Qty 26 50 60 66 of Rahula Collage Per 1 13,500 14,500 15,225 15,986 Value 351,000 725,000 913,500 1,055,093 Registration fees of Qty 275 400 440 484 City Collage Per 1 1,100 1,100 1,155 1,213 Value 302,500 440,000 508,200 586,971 Monthly service fees Qty 275 400 440 484 of City Collage Per 1 12,000 13,200 13,860 14,553 Value 3,300,000 5,280,000 6,098,400 7,043,652 Registration fees of Qty 260 275 303 333 City Kids Per 1 10,000 8,500 8,925 9,371 Value 2,600,000 2,337,500 2,699,813 3,118,283 Monthly service fees Qty 260 275 303 333 of City Kids Per 1 45,600 44,400 46,620 48,951 Value 11,856,000 12,210,000 14,102,550 16,288,445 Total Annual Sales 63,011,100 84,640,500 106,008,263 124,366,493
Year Year 4 Year 5 Year 6 Year 7 Total Annual Sales 136,803,142 150,483,456 165,531,802 182,084,982
Annual Sales Forecast
200
150 Million
- 100
LKR 50 - Existing Propose Propose Propose Propose Propose Propose Propose Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
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4.5. Annual Marketing Expenses Expenses Item Existing Year Year 1 Year 2 Year 3 Promotions and Advertising 175,000 525,000 551,250 606,375 - -
Annual Marketing Expenses 175,000 525,000 551,250 606,375
Year Year 4 Year 5 Year 6 Year 7 Annual Marketing Expenses 667,013 733,714 770,399 847,439
4.6. Marketing Fixed Assets Current
Property Value (LKR)
Total -
Proposed
Property Value (LKR)
Total -
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6.0. Service Plan
6.1. Assumption Production units will increase in 5% since second year. Production cost will increase in 5% since second year.
6.2. Service Flow Chart
Applications Interview Selection
Teaching Sports Computer Establish Classes Registration Competitions Festivals
Monthly Fees Registration Fees
6.3. Service Fixed Assets Current Property Value (LKR) % of Depreciation Annual Depreciation Land 70,725,000 - Building 40,000,000 5% 2,000,000 Machineries, Tools & 8,000,000 15% 1,200,000 Equipment Furniture 5,500,000 15% 825,000 Vehicles 4,000,000 10% 400,000 - Total 128,225,000 4,425,000
Proposed Property Value (LKR) % of Depreciation Annual Depreciation Lands 23,275,000 - 4 Story Building (Step 1) - 136,352,370 5% 6,817,619 Annex i Machineries, Tools and 9,000,000 15% 1,350,000 Equipment - Annex vi Furniture - Annex vii 6,500,000 15% 975,000 - Total 175,127,370 9,142,619
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6.5. Annual Direct Materials Expenses Raw Material Existing Year Year 1 Year 2 Year 3 Raw Material - Monthly 225,000 247,500 272,250 313,088 Stationeries and Months 12 12 12 12 Etc… Value 2,700,000 2,970,000 3,267,000 3,757,050 Annual Direct Materials Expenses 2,700,000 2,970,000 3,267,000 3,757,050
Year Year 4 Year 5 Year 6 Year 7 Annual Direct Materials Expenses 3,944,903 4,142,148 4,349,255 4,566,718
6.6. Annual Direct Labor requirement & Expenses Type of labor Existing Year Year 1 Year 2 Year 3 Salary Payments for Annual Rahula Collage Total Staffs 13,073,916 21,148,982 23,263,880 26,753,462 Salary Payments for Annual City Collage Staffs Total 922,800 1,199,640 1,319,604 1,517,545 Salary Payments for Annual Pre-School Staffs Total 2,613,600 3,397,680 3,737,448 4,298,065 Annual EPF and ETF Total 604,440 945,783 1,040,361 1,196,415
Annual Direct Labor Expenses 17,214,756 26,692,085 29,361,293 33,765,487
Year Year 4 Year 5 Year 6 Year 7
Annual Direct Labor Expenses 35,453,761 37,226,450 39,087,772 41,042,161
6.7. Annual Production Overhead Expenses Expenses Item Existing Year Year 1 Year 2 Year 3 Electricity - All 576,000 748,800 823,680 947,232 Water - All 264,000 343,200 377,520 434,148 Repairing and maintenance cost - All 325,000 422,500 464,750 534,463 Refreshments - All 240,000 312,000 343,200 394,680 Transport - All 148,000 192,400 211,640 243,386 Building Rent 240,000 312,000 343,200 394,680 Other 2,400,000 3,120,000 3,432,000 3,946,800 - - - Total Overhead Expenses 4,193,000 5,450,900 5,995,990 6,895,389
Year Year 4 Year 5 Year 6 Year 7 Annual Production Overhead Expenses 7,240,158 7,602,166 7,982,274 8,381,388
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7.0. Organization & Management Plan
7.1. Assumption Management cost will increase in 5% since second year.
7.2. Legal Status of the Business (Form of Business)
a. Business Name SRI RAHULA COLLAGE b. Registration Number c. Address/Contact details 623/22, Freeman Mawatha, Anuradhapura 025-2226255 / 025-4934081-3
7.3. Organizational and Management Structure
Proprietor
Manager
Deputy Manager Education Manager Principal Non Academic Teacher Admin. Develop. Unit Deputy Principal
Administrative
Section Head Section head 6-11 1-5
English Unit Media Sports Unit Environment Prefects
7.4. Experience & Competency of The Key Actors in the Business/Project Name & Designation Academic Qualifications Years of Work in Rahula Collage Mr. R. N. Thennakoon Owner Years of experience as a 9 Provincial Coordinating Secretary. Has got more than 15 years experience in the educational sector manager / founder of Sri Rahla College / City College/ City kids’ Kindergarten. Investor and Entrepreneur.
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7.5. Pre-Operating Activities in Gant Chart Time Table in Months Activity 1 2 3 Existing Loan Resettlement
7.6. Pre-Operating Expenses Pre-Operating Activity Amount - Rs. Existing Loan Resettlement 90,000,000
Total Pre-Operating Expenses 90,000,000
7.7. Management & Administration Cost Administration Activities Existing Year Year 1 Year 2 Year 3 Telephone & Internet bills 215,000 279,500 293,475 308,149 Auditing & Other Legal Payments 45,000 58,500 61,425 64,496 - -
Total Administration Cost 260,000 338,000 354,900 372,645
Year Year 4 Year 5 Year 6 Year 7 Annual Total Administration Cost 391,277 410,841 431,383 452,952
7.8. Administration and Management Fixed Assets and Equipment Current Property Value (LKR) % of Depreciation Annual Depreciation
Office Furniture - In 3 Institutes 275,000 8% 22,000 Computers, Printers, Photocopiers, Etc… - In 3 620,000 15% 93,000 Institutes - Total 895,000 115,000
Proposed Property Value (LKR) % of Depreciation Annual Depreciation - - Total 0 -
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8.0. Financial Plan
8.1. Project Cost ( Capital Requirement )
Cost Item Existing Proposed Total Fixed Assets Land 70,725,000 23,275,000 94,000,000 Buildings & Other Constructions 40,000,000 136,352,370 176,352,370 Machineries and Equipment 8,620,000 9,000,000 17,620,000 Vehicles 4,000,000 4,000,000 Furniture 5,775,000 6,500,000 12,275,000 Other Fixed Assets Total ( a) 129,120,000 175,127,370 304,247,370
Pre Operative Expenses Existing Loan Resettlement 90,000,000 90,000,000 - Total Pre Operative Expenses ( b ) - 90,000,000 90,000,000
Working Capital Expenditure. Raw Materials 270,000 27,000 297,000 Working Process 2,454,276 1,143,323 3,597,598 Finished Goods 2,454,276 1,143,323 3,597,598 Debtors 245,428 114,332 359,760 Total working Capital Expenditure( c ) 5,423,979 2,427,978 7,851,957
Total Project Cost a + b + c 134,543,979 267,555,348 402,099,327
Client's Contribution (Existing) 44,543,979 44,543,979 Existing Loan 90,000,000 90,000,000 Client's Contribution (Proposed) 67,555,348 67,555,348 Proposed Loan - Step 1 200,000,000 200,000,000 - Total Investment Contribution by Client % 33.11% 25.25% 11.08% Total Investment Contribution by Loans % 66.89% 74.75% 72.12%
Use of Proposed Loan - Step 1 Repayment of Existing Loan Balance Rs. 90,000,000 4 Story Building Construction Rs. 110,000,000 Total Rs. 200,000,000
Loan Expected in Step 2 Rs. 50,000,000 Loan Expected in Step 3 Rs. 50,000,000
Total Loan Requirement for the Project in 3 steps Rs. 300,000,000
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8.2. Working Capital Existing Raw Materials Work in Finish Goods Debtors Process No of Days 30 30 30 3 Raw Materials 270,000 270,000 270,000 27,000 Labor Cost 1,721,476 1,721,476 172,148 Production Over Head 419,300 419,300 41,930 Marketing Expenses 17,500 17,500 1,750 Administration Expenses 26,000 26,000 2,600 Total 270,000 2,454,276 2,454,276 245,428
Total Working Capital Requirement in Currently 5,423,979
Proposed Raw Materials Work in Finish Goods Debtors Process No of Days 30 30 30 3 Raw Materials 297,000 297,000 297,000 29,700 Labor Cost 2,669,208 2,669,208 266,921 Production Over Head 545,090 545,090 54,509 Marketing Expenses 52,500 52,500 5,250 Administration Expenses 33,800 33,800 3,380 Total 297,000 3,597,598 3,597,598 359,760
Total Working Capital Requirement in proposed year 1 7,851,957
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8.3. Loans Repayment Schedule a Name of the loan b Loan Amount 200,000,000 c Period of Repayment in years 10 d Grace period e Interest Rate 9.50% f Guarantee Personal Assets Land
Loan Balance Annual Annual Interest Loan Balance in Year in start of the Installment of of loan (B) End of the Year Year loan (A) 1 200,000,000 20,000,000 18,050,000 180,000,000 2 180,000,000 20,000,000 16,150,000 160,000,000 3 160,000,000 20,000,000 14,250,000 140,000,000 4 140,000,000 20,000,000 12,350,000 120,000,000 5 120,000,000 20,000,000 10,450,000 100,000,000 6 100,000,000 20,000,000 8,550,000 80,000,000 7 80,000,000 20,000,000 6,650,000 60,000,000 8 60,000,000 20,000,000 4,750,000 40,000,000 9 40,000,000 20,000,000 2,850,000 20,000,000 10 20,000,000 20,000,000 1,900,000 - 200,000,000 95,950,000 Equal installment for 10 years 2,466,250
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8.4. Profitability forecast Description Existing Year Year 1 Year 2 Year 3 Sales 63,011,100 84,640,500 106,008,263 124,366,493 Less : Return Actual Sales 63,011,100 84,640,500 106,008,263 124,366,493 Less : BTT
Net Sales A 63,011,100 84,640,500 106,008,263 124,366,493
Material Stock at start of the year 148,500 1,188,000 1,306,800 Material Purchasing 2,700,000 2,970,000 3,267,000 3,757,050 2,700,000 3,118,500 4,455,000 5,063,850 Material Stock at End of the year 148,500 1,188,000 1,306,800 1,437,480 Cost of used Direct Materials B 2,551,500 1,930,500 3,148,200 3,626,370 Direct Labor Cost C 17,214,756 26,692,085 29,361,293 33,765,487
Primary Expenses (B+C) D 19,766,256 28,622,585 32,509,493 37,391,857 Production Overhead Cost E 4,193,000 5,450,900 5,995,990 6,895,389 (D+E) F 23,959,256 34,073,485 38,505,483 44,287,246 Working Process at Start of the year 818,092 6,295,797 6,925,377 23,959,256 34,891,577 44,801,280 51,212,623 Working Process at End of the year 818,092 6,295,797 6,925,377 7,617,915 Production Cost G 23,141,164 28,595,779 37,875,903 43,594,708 Finish Goods at start of the year 818,092 6,295,797 6,925,377 23,141,164 29,413,871 44,171,701 50,520,085 Finish Goods at End of the year 818,092 6,295,797 6,925,377 7,617,915 Cost of Sales Goods H 22,323,072 23,118,074 37,246,324 42,902,170 Gross Profit ( A - H ) I 40,688,028 61,522,426 68,761,939 81,464,323 Annual Marketing Expenses 175,000 525,000 551,250 606,375 Annual Administration & Management Expenses 260,000 338,000 354,900 372,645 Total Marketing and Admin. Expenses J 435,000 863,000 906,150 979,020 Profit Before Interest & Depreciation(I-J) K 40,253,028 60,659,426 67,855,789 80,485,303 Pre-Operation Expenses Annual Depreciation 4,540,000 13,682,619 13,682,619 13,682,619 Annual loan interest 10,800,000 18,050,000 16,150,000 14,250,000 Total Interest, Depreciation & Pre-operating Expenses L 15,340,000 31,732,619 29,832,619 27,932,619 Net Profit Before Tax(K-L) M 24,913,028 28,926,808 38,023,170 52,552,684 Income Tax 3,661,954 4,264,021 5,628,476 7,807,903 Net Profit after Tax N 21,251,074 24,662,787 32,394,695 44,744,781
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Description Year 4 Year 5 Year 6 Year 7 Net Sales A 136,803,142 150,483,456 165,531,802 182,084,982 Gross Profit ( A - H ) I 89,610,755 98,571,830 108,429,013 119,271,915 Profit Before Interest & Depreciation(I-J) K 88,533,833 97,387,216 107,125,938 117,838,531 Net Profit Before Tax(K-L) M 57,807,952 63,588,748 69,947,622 76,942,385 Net Profit after Tax N 49,219,260 54,141,186 59,555,304 65,510,834
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
- Net Sales Gross Profit Net Profit
Existing Year 1 Year 2 Year 3
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8.5. Cash Flow Statement Description Existing Year Year 1 Year 2 Year 3 Cash Inflow Client Contribution 134,543,979 67,555,348 Stock Loan 200,000,000 Sales Income (Net) 63,011,100 84,640,500 106,008,263 124,366,493 B / F 7,592,323 8,972,862 10,036,670
Total Cash Inflow 197,555,079 359,788,171 114,981,124 134,403,163
Cash Outflow Land 70,725,000 23,275,000 Building 40,000,000 136,352,370 Machineries and equipment 8,620,000 9,000,000 Vehicles 4,000,000 - Furniture 5,775,000 6,500,000 Other Fixed Assets - - Pre-Operating Expenses 90,000,000 Direct Material Expenses 2,700,000 2,970,000 3,267,000 3,757,050 Direct Labor Expenses 17,214,756 26,692,085 29,361,293 33,765,487 Production Overhead Expenses 4,193,000 5,450,900 5,995,990 6,895,389 Marketing Expenses 175,000 525,000 551,250 606,375 Management & Administration Expenses 260,000 338,000 354,900 372,645 Loan installment 20,000,000 20,000,000 20,000,000 Loan interest 10,800,000 18,050,000 16,150,000 14,250,000 Income Tax 3,661,954 4,264,021 5,628,476 Profit Withdrawal 25,500,000 8,000,000 25,000,000 33,500,000
Total Cash Outflow 189,962,756 350,815,309 104,944,454 118,775,421 Closing Cash Balance 7,592,323 8,972,862 10,036,670 15,627,742
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8.6. Balance Sheet Description Existing Year Year 1 Year 2 Year 3 Fixed Assets Land 70,725,000 94,000,000 94,000,000 94,000,000 40,000,000 Machines,Building Tools and 176,352,370 176,352,370 176,352,370 Equipment 8,620,000 17,620,000 17,620,000 17,620,000 Vehicles 4,000,000 4,000,000 4,000,000 4,000,000 Furniture 5,775,000 12,275,000 12,275,000 12,275,000 Total Fixed Assets 129,120,000 304,247,370 304,247,370 304,247,370 Total Depreciation 4,540,000 18,222,619 31,905,237 45,587,856 Fixed Assets Book Value A 124,580,000 286,024,752 272,342,133 258,659,515
Current Assets Cash and Bank 7,592,323 8,972,862 10,036,670 15,627,742 Pre-Operating Expenses Stocks 1,784,684 13,779,595 15,157,554 16,673,310 Account Receivable Other Current Assets Total Current Assets B 9,377,006 22,752,457 25,194,224 32,301,051
Total Assets (A+B) 133,957,006 308,777,208 297,536,357 290,960,566
Accumulated Fund Owner's Equity 17,043,979 76,399,327 52,649,327 17,799,327 Final net Profit of the Year 21,251,074 45,913,860 78,308,555 123,053,336 Total Accumulated Fund C 38,295,052 122,313,187 130,957,882 140,852,663
Long Term Liabilities Loan 90,000,000 180,000,000 160,000,000 140,000,000 Total Long Term Liabilities D 90,000,000 180,000,000 160,000,000 140,000,000
Short Term Liabilities Taxes 3,661,954 4,264,021 5,628,476 7,807,903 Account Payable 2,000,000 2,200,000 950,000 2,300,000 Total Short Term Liabilities E 5,661,954 6,464,021 6,578,476 10,107,903
Total Liabilities (C+ D + E) 133,957,006 308,777,208 297,536,357 290,960,566 - - - -
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8.7. Financial Analysis
Description Existing Year Year 1 Year 2 Year 3 Rate of Net profit before tax Net profit before tax X 100 40% 34% 36% 42% Net Sales Rate of Investment Net profit before tax X 100 19% 7% 9% 13% Total Project Cost Rate of Loan Repayment Net profit after tax + Depreciation 1.48 : 1 1.01 :1 1.27 :1 1.71 :1 Loan Installment + Loan interest Debt Equity Ratio Total Liabilities 7.86 : 1 4.04 :1 5.65 :1 16.3 :1 Owners equity Current Ratio Current Assets 1.66 : 1 3.52 :1 3.83 :1 3.20 :1 Current Liabilities Acid Ratio Current Assets 1.34 : 1 1.39 :1 1.53 :1 1.55 :1 Current Liabilities Break Even Point Permanent Cost X Net sales 6,766,592 9,720,390 9,971,166 11,276,692 Net sales - Variable Cost
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