Course Instructor: Mr. Javaid Iqbal
Group Members:
Jawad Junaid (15)
Abdul Samad (13)
Muhammad Bilal (41)
Program:
MSC A&F (Afternoon)
Session
: 2008-2010
Department of Commerce
“AL-KHALIQUE” CNG Filling Station
Near Sutlej Toll Plaza Multan Road
Dedication
We dedicate this report to that personality to
whom every Muslim wants to idealize. That
personality is HAZRAT MUHAMMAD
MUSTAFA (PBUH). He (PBUH) was a role
model in every field of life. He (PBUH) tells us
how to work hard to achieve something.
familiar with the different techniques in the field of Project
Appraisal so that they can understand & present the concepts of
Project Appraisal in the today’s world of progress & development.
The importance of principal work almost exists in every
professional field. Practical knowledge makes man a technical
person who enables to do every work efficiently regarding his
profession. The very distributive feature of the degree of Business
Administration is that it stresses more on the practical aspects of
study especially the 3
rdsemester. Our teachers have extremely
realized this importance & they use all the tact’s to expose us to
the real field circumstances.
Project Appraisal has become a common phenomenon
now-a-days. We have tried our level best to fulfill the requirements of the
topic. Every effort has been made to incorporate all the available
means of information to make this assignment comprehensive. We
tried our best to accomplish our work.
Special thanks to Almighty Allah, creator of the creative
minds.
We pay abundant thanks to our encouraging teacher &
instructor Mr. JAVAID IQBAL for enlightens our minds
with the rich information about the topic.
Special thanks are extended for those who help us in printing
& composing the research.
We are especially thankful to Mr. Tayyab Bashir (M.D Sultan
Bahoo CNG Station) and Mr. Saeed Ahmed (Manager Sultan Bahoo
CNG Station) Who provided us the necessary information and show
us the process of conversion of natural gas into compressed natural
gas (CNG).
Our mission is to provide
the purify compressed
natural gas (CNG). We will
provide 24 hours service to
our customers so that we
can facilitate them
according to their
requirement. We have also
tuc shop and also tire
service shop at our CNG
station.
SERIAL #.
DESCRIPTION
PAGE #.
1. Executive Summary 09
2. Implementation 03
3. The Project Introduction 14
4. The Project Site & Location 15
5. NOCs16 16 6. Market Analysis 17 7. Technical Analysis 19 8. Local Equipment 20 9. Flow Diagram 28 10. Personal Analysis 30 11. Assumptions 32 12. Annexure 33 13. Swot Analysis 46 14. Recommendation 48 15. Conclusion 49
“AL-KHALIQUE”CNG Filling Station
Near Sutlej Toll Plaza Multan Road
EXECUTIVE SUMMARY
NAME OF THE PROJECT: AL-KHALIQUE CNG STATION
NATURE OF INDUSTRY: CNG STATION
A NEW PROJECT
CORPORATE STATUS: PARTNERSHIP FIRM
LOCATION OF PROJECT BAHAWALPUR
ADDRESS NEAR SATLEJ TOLL PLAZA
MULTAN ROAD BAHAWALPUR
We are the fresh and energetic students of MSC A&F. We are going to start a new business. We have selected the business of CNG Station. We have selected this business because there is so much potential in this business. Especially today’s there is increasing number of cars. This is also a challenging project. This will be the test of our hidden qualities.
AL-KHALIQUE CNG STATION registered firm established with the objective of installing a CNG Re-Fuelling Station at Sutlej Toll Plaza, district Bahawalpur. The firm is intending to start its operations initially with one station in Bahawalpur. The firm has plans to expand its network later to in other cities.
CNG is environmentally friendly fuel since it unleaded and releases less than 10% carbon mono oxide as compared to petrol and is an indigenous fuel commonly known as natural gas and Sui gas. Natural gas is compared to high pressure for storage, for this purpose, a compressor and storage facility is installed, the vehicle to run on
We are going to produce only one product i.e. CNG. We are not producing any other product. We are following the single product approach. So the only problem we have to face is the production problem. Growth of sale does not matter. At initial stage we will be producing at 75% capacity.
We purchased our plant from abroad and as well as from local. Plant reached at site at January 1, 2010. Our plant installed on March 1st 2010. It started its trial run on
March 2010. It started its commercial operation on January 1st 2011.
The financial ratios of our company are increasing. Its means that our company is prosper day by day. So the company is doing very well business and there is no chance of loss.
Estimated cost of project (Rs in “000”) =
Fixed cost
45408
Initial Working Capital
5859
Total Cost
51260
Means of Finance:
There are two types of means of finance. One is from our own
resources and other is from taking debt from Bank. The ratio is of debt
and equity is of 60:40
Name of lender:
Our name of lender is Habib Bank Ltd which will provide us the entire
loan which we need for the completion of our project. The interest rate of
the Bank is 18%.
Name of sponsors:
The sponsors of the project are professionally qualified and have valuable and extensive experience of business management regarding. They have got petrol pump & CNG and good trading contacts and market reputations in the city. The project faces not problems in terms of marketing its product. The sponsor’s experience would assist the firm in its smooth and profitable operation.
The sponsors are financially sound and capable to contribute their part of the equity in the proposed scheme. The managing partner of the firm has vast experience in the managing of this industrial organization
SR.NO. NAME DESIGNATION
1. Jawad Junaid Managing partner
2. Abd-Ul- Samad Partner
The detail of machinery is given below:
• Compressor model skid Mounted
• Water Cooled W-Type Compressor
• High pressure Piping 3-line
• Priority fill Panel Spares
• Dispenser
• Storage Cylinder
Name of civil contractor :
The name of civil contractor is Mr. Naeem Ashraf Uppul. We hire the services of that contractor for constructing our building and pay him fee for his services.
Name of Machinery Supplier:
The name of machinery supplier is Mr. Matloob Ahmed. He arranged the machinery from the foreign and get his commission for his services.
Address:
IMPLEMENTAION PERIOD
The project is expected to be implemented within 6 months from the date of the submission of the proposal to the bank. The details of the activities along with time required are given as under:
TASK
MONTHS
Bank approval February 2010 Purchase of land March 2010 Construction of building October 2010 Arrival of machinery at site November 2010 Installation completed December 2010
Trial run December 2010
INTRODUCTION OF COMPANY
The company is doing partnership business. There are three sponsors of the company which are the partners of the company also. The company is doing legal business. Profit earned by the company is distributed among the members of the company.We are going to produce only one product i.e. CNG. We are not producing any other product. We are following the single product approach. Growth of sale does not matter. At initial stage we will be producing at 75% capacity.
We purchased our plant from abroad and as well as from local. Plant reached at site at January 1, 2010. Our plant installed on March 1st 2010. It
started its trial run on March 2010. It started its commercial operation on January 1st 2011.
CNG stands for Compressed Natural Gas. It is one of the most viable alternatives to traditional fuel energy resources for the automotive industry. CNG is low in pollutants, high in calorific value and heat yield, economical and available in abundance globally
The business of CNG filling station has marked its place in the country through growth during the last few years. This growth has opened up new opportunities and more CNG filling stations are being setup all over Pakistan. The prime reason for this is the low cost of the fuel. Along with that, CNG fuel is less hazardous to the environment as compared to the traditional petroleum fuel
LOCATION OF THE PROJECT
The project is proposed to be setup near the Sutlej Toll Plaza Multan Road Bahawal Pur. The site enjoys the following advantages:
• Easy availability of raw material
• Availability of communication facilities like telephone, telex, etc
• Access to main road, sources of power, water, fuel, etc.
• Availability of skilled and unskilled manpower.
• Free from other environmental hazards like water-logging, floods salinity, etc.
NOCs Required For CNG Station
No Objection Certificate will be required from the following departments prior to the Commencement of the business:
• Concerned development authority of the city (Bahawalpur Development Authority)
• Traffic Engineering and Planning Authority (TEPA)
• Traffic Police (SSP)
• Department of Civil Defense
• National Highway Authority (NHA)
• Central Board of Revenue (CBR)
• Civil Administration-Tehsil Municipal Administration (TMA)
• Oil and Gas Regulatory Authority (OGRA)
No person can set up CNG station without first obtaining license from the Authority i.e. Oil and Gas Regulatory Authority Islamabad under Rule 6 of CNG (Production & Marketing) Rules, 1992. Initially OGRA issues provisional license for a period of 2 years for setting up CNG station. After obtaining provisional license from the authority, the licensee is supposed to start construction of the station and also obtain NOCs from the local authorities and a license from
MARKET ANALYSIS
The commercial application of CNG technology now forms an important element of
Government’s petroleum policy, which is reflected in the efforts made by the government For installing so many CNG stations in the country and converting 600000 vehicles on CNG fueling system till February 2005.
Market Demand:
At present there are more than too many vehicles, which have been converted to CNG fuel. Due to the increasing prices of petroleum products, the trend of converting cars to CNG fueling system has been on a rise. However, there exist a large number of people who were reluctant to convert their vehicles from petrol to gas due to safety concerns. Recently, many car manufacturers have started manufacturing the cars with built-in CNG fueling system. This change has led to enhancing the confidence in the minds of the general public regarding the safety concerns, and now, more people are inclined towards purchasing these factory-fitted CNG fueling system cars.
Present Demand:
The present demand of CNG is very high because the cost of CNG is very cheep as compared to petroleum, diesel and LPG. This is also beneficial for the life of engine of vehicles so the people prefer the CNG.
Now the transporters also converting their vehicles in to CNG vehicles because cost of CNG is very low and in this way they can earn high profits and engine of their vehicles also saves so the demand of CNG is increasing day by day. Now a day the demand of CNG is so high that there is supply and demand gap generated for CNG.
The use of CNG in vehicles brings an added blessing that it is much less polluting than regular gasoline (petrol). The emissions coming out of CNG vehicles consist of water vapors and carbon monoxide (CO).
Estimated demand during next five years:
It is estimated that the demand of CNG in next five years will be so high.
The only reason is that now a days all vehicles are converted into CNG vehicles. The millions of vehicles are converted into CNG vehicles. So it is impossible that the demand of CNG I going to be end in next years.Distribution channel:
No distribution channel is required for CNG. The customers come at CNG station and fill their cars with CNG. So no distribution channel is required.
TECHNICAL ANALYSIS
The main machinery at CNG station is compressor. The technology involved in machinery is very advance and technical. Pakistan is not to advance to
produce or manufacture the compressor because Pakistan has no technology to manufacture it so the whole technology involved is imported from the Canada because Canada is very advance in technology and manufacturing high standard of compressor. Dispensing machine also imported from Canada. Compressor imported from Canada is very good in its function. It contains two generators one is run by the natural gas and other is run by electricity. So that in case of
absence of electricity or Sui gas other generated can be used. This compressor converts the Sui gas into CNG with the help of 3 way pipelines and cooling tower then this compressed natural gas is transferred to Dispensing machine to
vehicles and system is control by Control panel.
CNG has now become a major area of investment and is being actively promoted as alternative fuel across the entirety of the automotive industry in Pakistan. As a cheaper and environmentally friendly alternative, the shift to CNG has proved immensely popular, especially in light of the spiraling price of oil. With an exponentially growing market, there are growing challenges and potentials for growth arising as well. Being one of the pioneers of CNG sector in Pakistan.
EQUIPMENTS AND FACILITIES
The proposed CNG station will comprise of following main facilities; Compressors Storage cascade Dispensing point
Building & other civil works
Gas receiving & electricity connection.
List of LOCAL EQUIPMENTS
CNG stations the major component of equipment used is imported. But some locally available components are also used. Below is given a list of some such equipments and consumables. Lo CNG station
9-Soft pipes (tubes) for air flow
10-Electric Cables for Main Compressor motor, Oil pump motor, Water pump Motor, Cooling Tower fan motor, Automation devices, Bare Panel emergency buttons, Earth plate copper strip
11-GI flexible pipes for insulation of cables
12-Pressure Gas Regulator to be installed between Buffer and Blow down vessel
13-NRV to be fitted between Buffer and Blow down vessel 14-Flexible Pipe for Gas Inlet
Compressor:
Two compressors of 530 Nm/hr will be installed with appropriate storage cascades. Sequential and three ways penal priority installed in separate room will be operated from a control panel outside the compressor room.
COLLING TOWER:
When the compressor run it produces heat which should be minimize. For this purpose we used cooling tower. Now the question arises how it work. Its working is very simple it rotate the water in this way heat evolve out and temperature minimize
Electric Control Panel
Storage Cascade
Storage cascades/cylinders are used to store the natural gas. In absence of light we can use the gas from the storage cascade.
Input Required
The main input for CNG is natural gas which is obtained from SNGPL. This is the main input for the CNG then electricity is also required to run the compressor.
EXPLANATION:
The above is the chart that shows the brief process how GAS (SUI) moves from different processes and finally reaches the ultimate vehicle in the shape of compresses GAS.
S
First of all it enters into the FILTERS for purification purpose and this consists of two filters. And then it enters into a TANK and then again enters into the MICRO FILTER for further purification and finally enters into the main
the GAS CYLINDERS and finally reaches the VEHICLES through the help of DISPENSORS.
All of the promoters are the fresh Student of MSC A&F .
The day to day running and operation of the project will be carried out by sponsoring partners with the help of team of professional. The team of professional will be hired for managing financial and technical aspect of the project. The team will consist of qualified and experienced personnel.
Requirement of Staff
Technical staff
There are ten or more persons required which should be metric. These staff
required to operate the dispensing machine for fulfilling the gas into vehicles. Gas filling is so simple process and it is not a technical process so there is not need for a special staff, which should have some specific kind of diploma. One sweeper is also needed for the cleanness of the CNG station. And one security guard is also needed for security purpose. There will be no load shedding problem from august and we are starting from 1st
July, 2010 and the load shedding will be for 3 hrs a day.
After 1 year there will be no load shedding in the year 2011 We are assuming a 15 % increase in wages every year. Overheads are .5% of sales
Erection for improved machinery is 15%
Prices of the machinery will increase in the future
It is also assumed that the need of CNG will be increased in the future Imported machinery will be purchased on loan from Habib Bank @18%. We are using straight line method for depreciation.
Income tax will be charged at 35%.
The Debt to equity ratio will be 60:40respectively There will be the business of CNG filling.
Other income is generated from the tuck shop, tire service shop and also from the oil exchange and vehicle service shop.
The company is earning most of its revenue from other income resource. The cost and sale of CNG will be increase 5% each year.
COST OF LAND
Sr. No. Description Area in Unit Cost Rs ("000") Marlas Rate in percentages Total Cost1 Land 50 100,000 5,000
2 Registration 1% of cost of Land 50 1% 1,000 50 3 Stamp Duty 2% of Cost of Land 50 2% 2,000 100 4
District Council corporation Fee 1% of
Cost of Land 50 1% 1,000 50
5 Development Charges 5% of Cost of Land 50 5% 5,000 250 6 CVT and TMO Fee 2% cost of Land 50 2% 2,000 100
AL-KHALIQUE CNG Filling Station Estimated Cost of Civil Works 1marla =
272 Sq feet 50marlas = 136000 Sq feet
Sr. No. Description
Type of Unit of Covered Rate Per Rs ("000") Building Construction area Unit Total Cost
1 Compresser Room RCC Square feet 1500 1200 1800 2 Tire Shop RCC Square feet 200 1200 240 3 Wash Rooms RCC Square feet 100 1200 120 4 Electric panel room RCC Square feet 500 1200 600 5 Mosque RCC Square feet 800 1200 960 6 Manager room RCC Square feet 600 1200 720 7 Account section RCC Square feet 400 1200 480 8 Cost of Jumbo Lawn Open area Square feet 2,500 800 2000 9 Generator Room RCC Square feet 500 1200 600 10 Tuc shop RCC Square feet 400 1200 480 11 Cyledrical room RCC Square feet 1000 1200 1200 12 Store RCC Square feet 300 1200 360 13 Fire section room RCC Square feet 300 1200 360 14 Workshop area RCC Square feet 1000 1200 1200 15 Main Canopy RCC Square feet 2000 1200 2400 16 Front area
Open
area Square feet 1500 800 1200
Total Cost of Civil
AL-KHALIQUE CNG FILling Station Estimated Cost of Machinery
("000")
Sr.No. Description Qty Unit Cost LCY FCY Total cost
1 Compressor Machine 1 4,500,000 4,500,000 4,500 2 Dispensors 3 1,200,000 3,600,000 3,600 3 Storage Cascade 40 50,000 2,000,000 2,000 4 3 Way High pressure Lines 3 200,000 600,000 600 5 Control meter system 1 2,000,000 2,000,000 2,000 6 Priority panel 1 200,000 200,000 200 7 Cooling tower 1 100,000 100,000 100 8 Oil filter + stainer 2 55,000 110,000 110 10 Control panel 1 450,000 450,000 450 11 Generator 2 500,000 1,000,000 1,000 12 Water pump with motor (7.5 KW) 2 25,000 50,000 50 13 Chemicals + oil 1 50,000 50,000 50
14 MSV 3 15,000 45,000 45
15 Fire extinguisher 6 10,000 60,000 60 16 Contingency 5% - 738000 738
("000")
Sr.No. Description LCY FCY Total cost
1 Land 5,550 - 5,550
2 Building 14,720 - 14,720
3 Machinery 4,953 10,550 15,503
4 Installation & Erection 15% of Machinery 2,325 2,325 5 Insurance 5% of Cost of Machinery 775 775 6 Intrust during Construction 5,614 5,614
8 Furniture and Fixture 150 150
9 Office Equipment 100 100
10 Pre-operating expenses 671 671
Estimated fixed cost 45,408
Add: Net Initial Net Working Capital 5,859
Total Estimated Cost of Project 51,266
MEANS OF FINANCE D e b t
Habib Bank Ltd 30,760 30,760
TOTAL DEBT: 30,760 E q u i t y
- Paid-up Capital (Sponsors) 20,507 20,507
TOTAL EQUITY 20,507
TOTAL DEBT & EQUITY 51,266
DEBT : EQUITY RATIO 60 : 40
Descriptions Rs. "000"
A. Current Assets:
1 Advances, & Prepayments 200
2 Stores & Spares 300
3 Accounts Receivable is 2% of sakes 2% 859
4 Cash 4,500
Total Current Assets 5,859
B. Current liabilities -
Initial Net Working Capital 5,859
Years 2011 2012 2013 Production Capacity 80% 85% 90% Consumption of Raw Material Description Quanity ("000") 3000 Kg of Sui Gas/day/Compressor 864 918 972 Total Quantity Consumed 864 918 972
Cost of Raw material: Rs.30/Kg
Description Rs. ("000")
Sui Gas @ 30/kg 25920 27540 29160
General Expenses:
Sr. No. Description Year Exp. ("000")
1 Printing & Stationary 75 2 Telephone, Telex, Postage 40 3 Rents, Rates and Taxes 100
4 Entertainment 60
5 Miscellaneous 50
Total 325
Assumptions: Administrative Salaries will increase @ 15% every year.
Year Wise Administrative Salaries:
Note: Salaris will be increase 15% each year
Administrative And General Expenses Rs “000”
1 Year = 12 months
Sr. No. Designation No. of Salary/ Annual
Employees Month Salary
1 Manager 1 20,000 240 2 Cashier 2 16,000 192 3 Accountant 1 10,000 120 4 Operator 1 8,000 96 5 Gas Fillers 12 72,000 864 6 Peon/Sweeper 1 6,000 72 7 Security Guard 2 12,000 144 Total cost 20 144,000 1728
5 Gas Fillers 12 864 994 1,143 1,314 6 Peon/Sweeper 1 72 83 95 110 7 Security Guard 2 144 166 190 219
Total 20 1728 1,987 2,285 2,628
General Expenses : Sr. No. Description Rupees ("000")
1 Printing & Stationary 75 83 91 100 2 Telephone, Telex, Postage 40 44 48 53 3 Rents, Rates and Taxes 100 110 121 133
4 Entertainment 60 66 73 80
s5 Miscellaneous 50 55 61 67
Total general expenses 325 358 393 433
4- DEPRECIATION COST
DEPRECIATION COST HAS BEEN CALCULATED ON STRAIGHT LINE PRINCIPLE APPLYING USUAL RATES AS
UNDER;-Rupees("000")
Amt. of depreciatio
n Plant & Machinery 15,503 10% 1,550
Building 14,720 5% 736
Furniture & Fixtures 150 10% 15
Office equipment 100 20% 20
2,321
Electricity variable cost 10 2000 12
Description Rs ("000")
Fixed Cost:
Power: @ 315/160/KW/Month 605 Insurance: @ 5% of machinery 775 Fix charges of gas
14,40 0
Maintenance and Depreciation:
Overhauling Expenses of Compressor 30 Maintenance of Building @ 5% of Cost of Building 736 Maintenance of Dispensors 50
Total Fixed Cost
16,59 6 Variable Manufacturing Expenses:
Power:@ 10/unit of 2000 units/Month 240
cost of gas 24,300
Total Variable Cost 24,540
Description 2010 2011 2012 2013
Rupees ("000")
75% 80% 85% 90%
Fixed Cost 16,596 16,596 16,596 16,596
Add: Variable Cost 24,300 33,567 27,540 29160
Total Overheads Cost 40,896 50,163 44,136 45,756
Repayment of Instalment Half Yearly Date of Disbursement of Loan 3/31/2010 Completion of the Project 31/12/2010 Date of Commercial Production 31/3/2011
Date of Repayment of principle 30/6/2011 6 Instalment
No of Principle Amount Total Outstanding Due Dates Days Instalment of Intrest Instalment Principle
3/31/2010 0 0 0 - 30,760,000 6/30/2010 91 0 1,399,580 1,399,580 30,760,000 9/30/2010 92 0 1,414,960 1,414,960 30,760,000 12/31/2010 92 0 1,414,960 1,414,960 30,760,000 3/31/2011 90 0 1,384,200 1,384,200 30,760,000 6/30/2011 91 3,076,000 1,399,580 4,475,580 27,684,000 9/30/2011 92 1,273,464 1,273,464 27,684,000 12/31/2011 92 3,076,000 1,273,464 4,349,464 24,608,000 3/31/2012 91 1,119,664 1,119,664 24,608,000 6/30/2012 91 3,076,00 0 1,119,664 4,195,664 21,532,000 9/30/2012 92 990,472 990,472 21,532,000 12/31/2012 92 3,076,000 990,472 4,066,472 18,456,000 3/31/2013 90 830,520 830,520 18,456,000 6/30/2013 91 3,076,000 839,748 3,915,748 15,380,000 9/30/2013 92 707,480 707,480 15,380,000 12/31/2013 92 3,076,00 0 707,480 3,783,480 12,304,000 3/31/2014 90 553,680 553,680 12,304,000 6/30/2014 91 3,076,000 559,832 3,635,832 9,228,000 9/30/2014 92 424,488 424,488 9,228,000 3,076,00
SALES Construction year 45,792 48,654 51,516 COST OF GOODS SOLD : - Raw Materials 25,920 27,540 29,160 Depreciation Exp 2,321 2,321 2,321 G R O S S P R O F I T 17,551 18,793 20,035 OPERATING EXPENSES
- Admin & General Expenses 1,987 2,285 2,628
Total Operating Expenses 1,987 2,285 2,628
OPERATING PROFIT 15,564 16,507 17,407 NON OPERATING EXPENSES
- Financial Expenses 5,331 4,220 3,085
- Amortzn. of Prelim. Exp 134.2 134 134 - Workers Welfare Fund 5% 815 865 14,192,873
Sub-Total 6,280 5,219 912 P R E - T A X P R O F I T 9,283 11,288 16,495 Income Tax 35% 3,249 3,951 5,773 N E T P R O F I T 6,034 7,337 10,722 Dividend - - - RETAINED EARNINGS 6,034 7,337 10,722 13,371 24,093
As on Sept. 30, Constructn. I II III ASSETS Cash 5,859 9,375 12,141 13,393 Accounts Receivables 916 973 1,030 Stores & Spares 1,000 1,100 4,600 Advances & Depostis 500 700 2,915
Total Current Assets 5,859
11,791 14,914 21,938
Fixed Assets at cost 44,737 44,737 44,737 44,737 Less: Accumulated
Dprcn. - 2,321 4,643 6,964
Net Fixed Assets: 44,737
42,415 40,094 37,773 Preliminary Expenses: 671 537 403 268 Total Assets: 51, 266 54,743 55,410 59,9 79 LIABILITIES & EQUITY Current Liabilities Account Payable 518 -Workers Welfare Fund -
- Dividends Payable - - - Cur. Mat. of L T Debt -
3,076 3,076 3,076
Total Current
Liabilities: - 3,594 3,076 3,076
CASH FLOW STATEMENT
For the year ending
Sept. 30, Const. Yr. I II III
SOURCES
Operating Profit - 6,034 7,337 10,722 Add Back: Depreciation - 2,321 2,321 2,321 Amortization - 134 134 134
Funds from
Operations - 8,490 9,793 13,177
- Other Income - - HABIB BANK LTD. 30,760 518
Increase in Current Liab. - - 3,076 Increase in Bank Borrowings - -
Paid up Capital 20,507 - TOTAL SOURCES 51,266 9 ,008 12,869 13,177 APPLICATION OF FUNDS
Investment in Fixed Assets: 44,737
-Preliminary Exp 671 - - Financial Expenses - - Repayment of : - - Custom Debentures - - social security - Bank Borrowings - 3,076 6,152 6,152 Taxes 3,951 5,773 Increase in current Assets: 2,416
TOTAL
45,40
8 5,492 10,103 11,925
Surplus/(Deficit) 5,859 3,516 2,766 1,252 Cash Balance - Opening - 5,859 9,375 12,141
Calculation Of IRR
Years Net Profit Depreciation Amortization Cash Outflow/ Inflow
0 - (51260) 1 6,504 2,321 145 2456 2 7,643 2,321 145 2456 3 8,737 2,321 145 2456 IRR 21% R A T I O S: Current
Inflows 31,459 outflow 51,266
Pay back period 1
Interpretations
Current ratio is continuously increasing it means that current assets of the company are increasing continuously or there is a decrease in the current liabilities. A good company has a good ratio of at least 1.25 The station has above this standard which shows a good financial position
There is a huge sales being earned on the assets which shows assets are being utilized in a good manner.
Gross profit margin ratio shows the increasing trend because cost and sale price of natural gas increase up to 5%.. So the gross profit margin ratio is increasing year wise.
The operating profit ratio is showing the increasing trend which shows that the business of company profitable and company is earning well profit.
The net profit margin shows that CNG industry has a good growth rate now-a-days hence it will good in the future.
The cash ratio of company is very good in all the years. It means the company has sufficient cash to discharge its liabilities.
SWOT ANALYSIS
Strength:
Raw material is easily available Access to customers
Well technology is used Demand is very high Profit earning is high
Weakness:
Recourses are going to be end Security problem
SAFETY FEATURES
CNG has four safety features that enable it to be inherently a safer fuel as compared to gasoline, diesel or LPG.
a) CNG is lighter than air so if it first rises and dissipates into the atmosphere, on the other hand fuels will puddle on the grounds, should a leak occur.
b) It has a self ignition temperature of 700-C against 455-C for gasoline. c) CNG has to mix with air in a small range 4 to 14% by volume, for
combustion to take place. This is a lower range, as compared to petrol. d) CNG is a substitute for gasoline (petrol) or diesel fuel. It is considered to be an environmentally "clean" alternative to those fuels. It is made by compressing methane (CH4) extracted from natural gas. It is stored and distributed in hard containers, usually cylinders.
RECOMMENDATION
On the behalf of my feasibility report I would like to recommend that this business is very profitable business. If the resources of natural gas increased and some precaution are followed then we can easily start a new CNG station.
Government should also make such type of strategies and rules and regulations that a new investor can easily enter in such type of business. There should be no barred for entering in this type of business. OGRA and SNGPL should also be helping.
To finance such type of project the banks also provide loan on low interest rate. So that the investors arrange the finance easily.
CONCLUSION:
The project is technically and financially sounds with ample market justification. The sponsors are experienced businessmen and enjoy high credit worthiness. Based on this analysis it may be conducted that the project is financially and economically viable and suitable proposition for DEMAND\LEASE FINANCING BY THE BANK.
The business of the company will flourish in the future because now-a-days CNG has a high demand. We have good expectations from our Project.
OGRA (oil and gas regulatory authority ) also giving same type of facility when new CNG station is started banks also provide loan with low interest rate. And machine is also imported easily. So this is concluded that this type of business is profitable business.
