OF AN EDUCATIONAL COMPLEX

BURHAN AHMAD SHAHENSHAH ALVI MUHAMMAD KASHIF

IM-63/2010-11 IM-72/2010-11 IM-77/2010-11

Project is about aperture of a high school in Pakistan's largest city Karachi. School will cater Nursery to matriculation

Students from middle to upper middle economy range community.

Qualified and experienced faculty state-of-art infrastructural facilities

spacious classrooms, well-equipped science computer laboratories, resourceful library

Karachi is the largest and financial center of Pakistan. Estimated population was 18 million in 2011 and according to the statistics of Population Census Organization Government of Pakistan 39.25% population of sindh urban area is less than 15 years of age that is about 7,065,000.

The total project cost for setting up this school is estimated at Rs. 6.367 million. The project is financed through 50% debt and 50% equity. The project NPV is around Rs. 36 Million, with an IRR of 15% and payback period of 1.64 years. The overall proposed capacity of the school is 735 students. Each class level from Nursery Matriculation has two sections. The maximum number of enrollments per class is limited to 30 students The proposed building will be acquired on rent, covering an area of 3-Kanals to accommodate the proposed student strength.

Three categories of schools ; I. High income group schools II. Middle income group schools III. Low income group schools

Literacy and participation rates are below those in other South Asian countries with similar level of economic development. Due to financial constraints and requirement of managerial capacity, education targets have remained unaccomplished. Programs approved by the Government were not completed because of inadequate resource allocation. The slow implementation of programs/projects undermined the efficiency of the system at all levels, significantly in terms of qualitative improvement.

Education System in Pakistan Literacy rate in pakistan Total primary schools and enrollment Total secondary schools and enrollment Total high schools and enrollment

Strengths Low student-teacher ratio English as a medium of instruction Affordable to middle income group Accessible location Well-trained and qualified teaching staff Up-to-date and extensive curriculum Well maintained order and discipline

Weakness Time required for gaining recognition in the society Higher rental cost for accessible locations Insufficient area for playing fields to practice sports such as cricket, hockey etc.

Opportunities

Overall increase in demand, linked with the growing population. Gap between number of school going age children and actual enrolments in schools Growing general public awareness (especially in urban areas) about importance of quality education Limited access to affordable, quality education. Minimal budget allocation by government to education sector Limited number of government/public schools Poor facilities in government schools

Threats New entrants can easily share the business Difficulty in retaining qualified teachers Revival of public/government schools in the future through effective government policies and regulations

T-4 INITIAL INVESTMENT SUMMERY Capital Investement Office school equipment &Library Books Furniture & fixtures Computers & equipment Pre-operating costs Total Capital Costs Working Capital Building rent Insurance payment Cash Total Working Capital Total Investment Initial Financing Debt Equity Project Returns
Debt PROJECT

Rs. in Actuals 1,098,365 2,505,600 750,000 396,093 4,750,058 Rs. in Actuals 900,000 54,918 625,542 1,580,460 6,330,518 Rs. In Actuals 3,165,259 3,165,259

50% 50%

Present Worth MARR Payback Period (Yrs)

15% <1 year

563,554,957 15% 1 year

T-4B CASH FLOW SUMMERY Year Gross Profit Present Worth Net Profit Annuity 0 -6,330,518 (PKR 6,330,518) (PKR 6,330,518) 1 6,249,000 5,433,913 (PKR 896,605) 2 10,092,450 16,407,386 PKR 21,841,299 3 13,318,425 30,408,962 PKR 46,816,348 4 15,614,519 44,579,113 PKR 74,988,075 5 18,130,924 60,777,671 PKR 105,356,784 6 17,899,687 67,741,057 PKR 128,518,727 7 18,132,752 75,439,859 PKR 143,180,916 8 18,311,278 82,168,592 PKR 157,608,451 9 18,425,919 87,920,820 PKR 170,089,411 10 18,466,200 92,677,586 PKR 180,598,405 Total 154,641,155 $563,554,957 $112,289,488