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5,00,000

Zulqarnain Haider

5,00,000

Zubair Abdullah

5,00,000

Mohsin Ilyas

5,00,000

Najeeb Kazim

2,00,000

INCOME STATEMENT

HCC
Income Statements
For the year ended 31 December.

Note 1.

Note 2.

Note 3.

Note 4.

Sales Revenue:
Annual subscription revenue
Monthly visits revenue
Total sales
less: Cost paid ( for generating the revenue )
Gross profit
less: Operating Expenses:
Administrating Expenses:
Staff salaries
Employees salaries ( excluding wages )
Rent
Petty cash expenses
Stationery
Miscellaneous Expenses
Repair and maintenance
Utility bills:
Electricity
Telephone
Gas

2011
Amount Rs.
700,000
6,000,000
6,700,000
3,600,000
3,100,000

2012
Amount Rs.
905,625
7,762,500
8,668,125
4,657,500
4,010,625

2013
Amount Rs.
1,171,652
10,042,735
11,214,387
6,025,640
5,188,747

792,000
712,800
480,000
180,000
18,000
24,000
50,000

891,000
801,900
540,000
202,500
20,250
27,000
56,250

1,002,375
902,138
607,500
227,813
22,781
30,375
63,281

116,000
94,200
14,400

130,500
105,975
16,200

146,813
119,222
18,225

HCC
Income Statements
For the year ended 31 December.

Note 5.

Note 6.

Note 7.

Depreciation:
Office equipment
Furniture
Tools
Vehicle
Generator
Amortization of deferred costs:
Uniform
Renovation cost
Registration fee
Initial advertisement
Marketing Expenses:
Advertisement
Profit Before Tax
Less: Tax on Profit (5%, 17.5%, 25%)
Profit after Tax or Net profit

60,000
26,000
10,000
11,000
30,000

60,000
26,000
15,400
11,000
30,000

60,000
26,000
20,800
11,000
30,000

3,600
20,000
1,000
22,030

5,100
20,000
1,000
22,030

6,600
20,000
1,000
22,030

196,780
238,190
11,910
226,280

221,378
807,142
141,250
665,892

249,050
1,601,744
400,436
1,201,308

Note:
Particulars

2011

2012

2013

Net Profit

226,280

665,892

1,201,308

Less: Reserve

100,000

200,000

400,000

Total Profit

126,280

465,892

801,308

Profit and Loss Appropriation Account is made in partnership firm to


better identify the share of profit and loss of each partner earned and
also the necessary appropriations made from the profit (if any). Because
all the partners have equal share in the capital of firm so all the profits
and losses shall be equally distribute between partners.

HCC
Profit and Loss Appropriation Account
For the year ended 31 December.

Distribution of profit

2011

2012

2013

Total profit

126280

465892

801308

Zulqarnain's share

31570

116473

200327

Zubair's share

31570

116473

200327

Mohsin's share

31570

116473

200327

Najeeb's share

31570

116473

200327

HCC
Partners Capital Account
For the year ended 31 December 2011.

Particulars
Cash Drawings
Balance c/d

Amount Rs.
500,000
1,500,000

Particulars
Cash/Bank

Amount Rs.
2,000,000

Total

2,000,000

Total

2,000,000

Partners Current Accounts

Particulars
Cash/Bank
Add: Share of profit
Total Cash/Bank
Less: Cash Drawings
Total Equity

2011
Amount Rs.
5,00,000
31570
531570
125000
406570

2012
Amount Rs.
406570
116473
523043
125000
398043

2013
Amount Rs.
398043
200327
598370
125000
473370

HCC
Balance Sheet
For the year ended 31 December.

HCC
Balance Sheet
For the year ended 31 December.

Note 8.
Note 9.
Note
10.

2011
Amount Rs.

2012
Amount Rs.

2013
Amount Rs.

Assets
Current Assets
Advance payment of building on rent
Cash in hand/Bank
Total Current Assets

90,000
878,760
968,760

90,000
1,173,682
1,263,682

90,000
2,010,920
2,100,920

Fixed Assets
Furniture
Generator
Office equipment
Tools

150,000
160,000
233,000
100,000

124,000
130,000
173,000
144,000

98,000
100,000
113,000
182,600

65,000
137,000

54,000
142,400

43,000
147,800

571,000

482,600

388,800

Other Assets
Deferred Costs
Initial advertisement
Renovation cost

110,150
100,000

88,120
80,000

66,090
60,000

Registration fee
Uniform
Less: Amortization of deferred costs
Total Other Assets

5,000
18,000
46,630
186,520

4,000
21,900
48,130
145,890

3,000
24,300
49,630
103,760

Total Assets

1,726,280

1,892,172

2,593,480

Vehicle
Less: Accumulated depreciation on fixed
assets
Total Fixed Assets (net of depreciation)

Note
11.

HCC
Balance Sheet
For the year ended 31 December.

Liabilities and Equity


Long Term Liabilities
Reserve

100,000

200,000

400,000

Add: transfer from last year

100,000

300,000

Total Reserve

300,000

700,000

Owners Equity
Zulqarnain's share

406570

398043

473370

Zubair's share

406570

398043

473370

Mohsin's share

406570

398043

473370

Najeeb's share

406570

398043

473370

Total Equity

1,626,280

1,592,172

1,893,480

Total Liabilities and Equity

1,726,280

1,892,172

2,593,480

HCC
Cash Flow Statements
For the year ended 31 December.
2011

2012

2013

Amount Rs.

Amount Rs.

Amount Rs.

Operating Profits

226,280

665,892

1,201,308

Add: Depreciation

137,000

142,400

147,800

Add: Amortization of deferred costs

46,630

48,130

49,630

409,910

856,422

1,398,738

(54,000)

(54,000)

(7,500)

(7,500)

(500,000)

(500,000)

878,760

1,173,682

1,173,682

2,010,920

Cash flow from Operating Activities:


Advance payment of building on rent

(90,0000)

Net Cash inflow from operating activities

319,910

Cash Flow From Investing Activities:


Capital Expenditures:
Furniture

(150,000)

Generator

(160,000)

Office equipment

(233,000)

Tools

(100,000)

Vehicles

(65,000)

Deferred Costs:
Initial advertisement

(110,150)

Registration fee

(5,000)

Renovation cost

(100,000)

Uniform

(18,000)

Cash flow from Financing activities:


Capital invested

2,000,000

Drawings

(500,000)

Net cash inflows from previous years


Net Cash Inflows

878,760

Pay Back Period


For the year ended 31 December 2011.

Number of Years
0
1.
2.
3.

Net Cash Flows


(2,000,000)
878,760
1,173,682
2,010,920

Cumulative Cash Flows


(2,000,000)
(1,121,240)
52,442

Pay Back Period = year before fully recovery + (unrecovered cost at the start of year/cash flow
during the year)
= 1 + 52,442/1,173,682
= 1.4 years

STATISTICAL ANALYSIS
Sr.
1.
2.
3.
4.
5.
6.
7.
8.
9.

Services
Electronics
Electrician
Plumbing & sanitary fittings
Carpenter
Mechanics
Computer (software & hardware)
Interior decoration & maintenance
White wash
Structural
Total

Percentage %
20%
20%
15%
10%
10%
10%
5%
5%
5%
100%

Months
1
1
1
1
1
1
1
1
1

No. of Employees
2
2
2
2
2
2
2
2
2
18

Visits
96
96
72
48
48
48
24
24
24
480

The visits included in above statistics are made for 200 members with 9 employees in first
month only but the percentages (members need firm services in a month) used in it will also be
followed for rest of the year. Because as per need analysis such percentages show how many
members out of 1, 000 need our services in a month and for each service two (2) employees are
hired from 2nd month. For every 200 members there are 480 visits considered monthly and for
1,000 members 24,000 visits are considered annually.

Subscription Fee Annually Rs.

Subscription Revenue

Monthly Visits Revenue


1st
2nd
3rd
4th
5th
6th 12th

Total Annual Visits &Sales


Per visits charges:
Profit margin
Employees wages
Fuel
Total

700

No. of members
200
400
600
800
1,000
1,000

Total visits in month


480
960
1,440
1,920
2,400
2,400

Total
Members
1,000

Total

Visits charges
250
250
250
250
250
250

Total
120,000
240,000
360,000
480,000
600,000
4,200,000
6,000,000

24,000

700,000

6,700,000
Amounts Rs.
100
80
70
250

Per visits cost:


Employees wages
Fuel
Total

Amounts Rs.
80
70
150

Monthly Visits Costs

No. of members

Total visits in month

1st
2nd
3rd
4th
5th
6th 12th
Total Annual Visits &Cost

200
400
600
800
1,000
1,000

480
960
1,440
1,920
2,400
2,400
24,000

Visits
costs
150
150
150
150
150
150

Total
72,000
144,000
216,000
288,000
360,000
2,520,000
3,600,000

No. of Staff
1-CEO
1-Accountant
2-Operators
Total
18-Employees (including daily wages)

Monthly Salary Rs.


25,000
25,000
16,000 (8,000 each)

12,000 each

Annual Salary Rs.


300,000
300,000
192,000
792,000
2,484,000

Workers salary commission based:

Total salary=12,000
Per visit Commission paid = Rs.80
if 2 visits are conducted by the employee then,
1st month = 2 visits*wages80*30days = Rs.4800
12, 000-4800 = Rs.7, 200 so this extra amount over wages will be paid by the firm in the
form of salary in order to make it Rs.12, 000.
From the 2nd month 9 more employees will be hired in order to meet visits burden of
increasing customers. So up to first five months salary paid by firm to 18 employees is Rs.
410, 400. Up to next seven months salary paid by firm to 18 employees is Rs.302, 400.
Total salary paid by firm (excluding daily wages) = Rs. 712, 800

Sr.
1.
2.
Note 4.
4.
5.
6.

Expenses
Rent
Petty cash
Utility Bills:
Electricity

(summer)
(winter)
Telephone (land line7,000+ net charges850)
Gas

Monthly Rs.
40,000
15,000 (Rs.500 daily)

Annually Rs.
480,000
180,000

13,000*7months= 91,000
5,000*5months = 25,000
7,850
1,200

116,000
94,200
14,400

(By Straight Line Method)


Depreciation= (Cost Price Scrap Value)/ Estimated Life
Depreciation for different years:

Fixed Assets Depreciations

Estimated
life(years)

2011

2012

2013

Furniture

26,000

26,000

26,000

Generator

30,000

30,000

30,000

Office equipment

60,000

60,000

60,000

Tools

10

10,000

15,400

20,800

Vehicle

11,000

11,000

11,000

Total

137,000 142,400 147,800

Companies Ordinance 1984 recommends deferred costs should be amortize at 20% rate through
straight line method. It is also the general practice of business organizations. Amortized amount
would be charge to income statement annually.
Deferred cost Amortizations
Initial advertisement
Renovation cost
Registration fee
Uniform
Total

Rate
20%
20%
20%
20%

2011
22,030
20,000
1,000
3,600
46,630

2012
22,030
20,000
1,000
5,100
48,130

2013
22,030
20,000
1,000
6,600
49,630

Note:
Uniforms are purchased for employees of equal amount Rs.7,500 in next years and also
amortized for 5 years with 20% rate for following two years.

Initial Advertisement Channels:


10, 000 Visiting cards
6, 000 Pamphlets (size 5*7.5)
Radio ads Rs.8, 500/month*2 (8 times a day)
30 Banners (size 2.5*10 feet
3 Digital sign boards rent (10*8 feet) = 15, 000*3
Printing charges for 3 digital sign boards Rs.70/ft (70*240)
HCC board Rs.170/ft (size 20*3)
TV cable ads Rs.3, 000/month*2
Total initial cost
During Year Advertisement Channels:
Radio ads annually Rs.7, 000/month (6 times a day)
1 Digital sign board rent at different places (size 10*8) accordingly: (14,
000+17, 000+15, 000)
Printing charges for digital board Rs.70/ft*240
TV cable ads annually (Rs.3000*12)
1000 Eid Birthday cards Rs.6/p (size 9*11.5)
1000 Door bell stickers Rs.3.5/p (size 7.5*10)
2000 Performance letter issued bi-annually Rs.2.24/letter
Total during year cost

Costs Rs.
3, 500
4,000
17, 000
7,650
45,000
16,800
10,200
6,000
110,150

Total Advertisement Annually

306,930

84,000
46,000
16,800
36,000
6,000
3,500
4,480
196,780

Furniture

Costs Rs.

1 Reception Table + 2 chairs (30, 000+5,000*2)

40,000

2 Office Tables (3.5 feet) + 4 chairs= (20, 000*2+3, 000*4)

52,000

4 chairs (for visitors) + 20 chairs (for workers) = (20, 000+650*20)

33,000

1 Cupboard (for workers uniform 4*6 feet)

10, 000

1 Fixture (for office use)

8, 000

1 Fixture (for kitchen goods)

7, 000

Total cost

150,000

Office Equipments

Costs Rs.

4 computers & 1 printer

100, 000

1 Water cooler

30, 000

Electric lights, Energy savers (26 watt+500watt), 4 Wall fans

23,000

2 Split units (1.5 ton)

80, 000

Total cost

233,000

Services
1.
Electronics
2.
Electrician
3.
Plumbing & sanitary fittings
4.
Carpenter
5.
Mechanics
6.
Computer (software & hardware)
7.
Interior decoration & maintenance
8.
White wash
9.
Structural
10. Other tools
Total cost

No. of Employees
2
2
2
2
2
2
2
2
2

Tool cost Rs.


6,000
6,000
5,000
7,000
5,000
4,000
4,000
2,000
5,000

Total Rs.
12,000
12,000
10,000
14,000
10,000
8,000
8,000
4,000
10,000
12,000
100,000

Fixed Assets Costs:


Assets
Vehicle
Generator
Uniform (employees)
Total cost

Specifications
1 Honda 70cc
Power 20kw, Company Nekata
25 uniforms (Rs.720 each)

Costs Rs.
65,000
160,000
18,000
243,000

Renovations
Ceiling
REL tag on reception wall
Paint
Decoration material
Curtains
Total cost

Costs Rs.
20, 000
20, 000
50, 000
7, 000
3, 000
100,000

Key Assumptions
Customers increase annually
Subscription fee increase with
inflation
Sales increase with growth &
inflation
Cost increase with growth &
inflation
Expenses increase with inflation
Advertisement increase with
inflation
Tax Rate
Depreciation method (annually)
Salaries
Amortization (annually)
Employees increased
Uniform cost (1)
Capital Accounts Method
Drawings
Reserve

Year 2012
15%
12.5%

Year 2013
15%
12.5%

15% + 12.5%

15% + 12.5%

15% + 12.5%

15% + 12.5%

12.5%
12.5%

12.5%
12.5%

17.5% on profit
Straight line method
12.5%
20% Straight line method
9
Rs.750
Fixed Capital Method
Rs. 250,000
Rs. 200,000

25% on profit
Straight line method
12.5%
20% Straight line method
9
Rs.750
Fixed Capital Method
Rs. 250,000
Rs. 400,000

Management Risks

Marketing Risks

Consumer demand risks

Social and environmental risks

Natural risks

Macroeconomic risks

Financial risk

Credit risks

liquidity risks

Operating risk

Services quality risks

Services design and development risks

Personnel risks