Pre-Feasibility Study CNG FILLING STATION Small and Medium Enterprise Development Authority Government of Pakistan www.smeda.org.pk HEAD OFFICE 6th Floor, LDA Plaza, Egerton Road, Lahore Tel: (042) 111-111-456, Fax: (042) 6304926, 6304927 [email protected] REGIONAL OFFICE PUNJAB 8th Floor, LDA Plaza, Egerton Road, Lahore. Tel: (042) 111-111-456 Fax: (042) 6370474 [email protected] REGIONAL OFFICE SINDH REGIONAL OFFICE NWFP REGIONAL OFFICE BALOCHISTAN 5TH Floor, Bahria Complex II, M.T. Khan Road, Karachi. Tel: (021) 111-111-456 Fax: (021) 5610572 [email protected] Ground Floor State Life Building The Mall, Peshawar. Tel: (091) 9213046-47 Fax: (091) 286908 [email protected] Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) 831623, 831702 Fax: (081) 831922 [email protected] May, 2005 Pre-Feasibility Study 1 2 3 4 5 6 7 CNG Filling Station INTRODUCTION TO SMEDA................................................................................. 2 Purpose of the document............................................................................................ 2 Crucial Factors & Steps in decision making for investment........................................ 3 3.1 Key Success Factors........................................................................................... 3 3.2 Opportunities ..................................................................................................... 3 3.3 Threats ............................................................................................................... 3 Project Profile............................................................................................................ 3 4.1 Opportunity Rationale ........................................................................................ 3 4.2 Project Brief....................................................................................................... 3 4.3 Introduction to CNG .......................................................................................... 4 4.4 Proposed Business Legal Status ......................................................................... 4 4.5 Project Cost........................................................................................................ 4 4.6 Viable Economic Size ........................................................................................ 5 4.7 Proposed Capacity.............................................................................................. 5 4.8 Proposed Location.............................................................................................. 5 4.9 CNG Policy........................................................................................................ 5 4.10 CNG Consultancy Services ................................................................................ 6 Market Analysis......................................................................................................... 6 5.1 Target Customers ............................................................................................... 6 5.2 Market Demand ................................................................................................. 6 5.3 Market Supply ................................................................................................... 6 5.4 Industry Growth................................................................................................. 6 REGULATIONS, Licenses and incentives................................................................. 7 6.1 License............................................................................................................... 7 6.2 Certificate (by HDIP) ......................................................................................... 7 6.3 NOCs................................................................................................................. 7 6.4 Incentives........................................................................................................... 8 6.4.1 Sales Tax.................................................................................................... 8 6.4.2 Custom Duty .............................................................................................. 8 6.5 Regulatory Requirements ................................................................................... 8 6.5.1 Quality Certificate ...................................................................................... 8 6.5.2 List of Equipment....................................................................................... 8 6.5.3 Income Tax on the Import of CNG Equipment ........................................... 8 6.6 Income Tax ........................................................................................................ 8 The Project CONCEPT.............................................................................................. 9 7.1 Project Cost........................................................................................................ 9 7.2 Project Financing ............................................................................................... 9 7.3 Project Details.................................................................................................... 9 7.3.1 Location ..................................................................................................... 9 7.3.2 Land........................................................................................................... 9 7.3.3 Building ................................................................................................... 10 7.3.4 Material Inputs ......................................................................................... 11 7.3.5 CNG Equipment....................................................................................... 11 7.3.6 Suppliers .................................................................................................. 12 7.3.7 Stores & Spares ........................................................................................ 13 7.3.8 Furniture and Fixtures .............................................................................. 13 1 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station 7.3.9 Office Equipment ..................................................................................... 13 7.4 Manpower Requirement ................................................................................... 13 8 Basis for Financial Projections................................................................................. 14 8.1 Inflation Rate ................................................................................................... 14 8.2 Revenue Assumptions ...................................................................................... 14 8.2.1 No. of Cars ............................................................................................... 14 8.2.2 Gas per Vehicle ........................................................................................ 14 8.3 Depreciation on Assets..................................................................................... 15 8.3.1 Accounting Profit ..................................................................................... 15 8.3.2 Taxable Profit........................................................................................... 15 8.4 First Year Allowance ....................................................................................... 15 8.5 Multiple Shift Allowance ................................................................................. 15 8.6 Amortization of Preliminary Expenses ............................................................. 16 8.7 Working Capital............................................................................................... 16 8.7.1 Accounts Receivables............................................................................... 16 8.7.2 Advances to Employees............................................................................ 16 8.7.3 Accrued Utilities and Power Expenses .................................................. 16 8.7.4 Accounts Payable ..................................................................................... 16 8.7.5 Sales Tax Payable..................................................................................... 16 8.8 Sales Tax ......................................................................................................... 16 8.9 Ratio/Financial Analysis .................................................................................. 16 8.10 Alternative Investment Opportunity ................................................................. 17 9 Financial Analysis ................................................................................................... 18 9.1 Project Costs .................................................................................................... 18 9.2 Projected Income Statement ............................................................................. 19 9.3 Projected Balance Sheet ................................................................................... 20 9.4 Projected Cash Flow Statement ........................................................................ 21 9.5 Revenues.......................................................................................................... 22 9.6 Cost of Sales .................................................................................................... 23 9.7 Working Capital............................................................................................... 24 9.8 Ratio Analysis.................................................................................................. 25 10 Requirement for the License ................................................................................ 26 2 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station DISCLAIMER The purpose and scope of this information memorandum is to introduce the subject matter and provide a general idea and information on the said area. All the material included in this document is based on data/information gathered from various sources and is based on certain assumptions. 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 does not assume any liability for any financial or other loss resulting from this memorandum in consequence of undertaking this activity. The prospective user of this memorandum is encouraged to carry out additional diligence and gather any information he/she feels necessary for making an informed decision. For more information on services offered by SMEDA, please contact our website: www.smeda.org.pk DOCUMENT CONTROL Document No. PREF-34 Revision 2 Prepared by SMEDA-Punjab Issue Date May, 2002 Revised on May, 2005 Issued by Library Officer 1 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study 1 CNG Filling Station INTRODUCTION TO SMEDA The Small and Medium Enterprise Development Authority (SMEDA) was established with the objective to provide fresh impetus to the economy through the launch of an aggressive SME support program. Since its inception in October 1998, SMEDA had adopted a sectoral SME development approach. A few priority sectors were selected on the criterion of SME presence. In depth research was conducted and comprehensive development plans were formulated after identification of impediments and retardants. The all-encompassing sectoral development strategy involved recommending changes in the regulatory environment by taking into consideration other important aspects including finance, marketing, technology and human resource development. SMEDA has so far successfully formulated strategies for sectors including, fruits and vegetables, marble and granite, gems and jewelry, marine fisheries, leather and footwear, textiles, surgical instruments, transport and dairy. Whereas the task of SME development at a broader scale still requires more coverage and enhanced reach in terms of SMEDA’s areas of operation. Along with the sectoral focus a broad spectrum of business development services is also offered to the SMEs by SMEDA. These services include identification of viable business opportunities for potential SME investors. In order to facilitate these investors, SMEDA provides business guidance through its help desk services as well as development of project specific documents. These documents consist of information required to make wellresearched investment decisions. Pre-feasibility studies and business plan development are some of the services provided to enhance the capacity of individual SMEs to exploit viable business opportunities in a better way. This document is in the continuation of this effort to enable potential investors to make well-informed investment decisions. 2 PURPOSE OF THE DOCUMENT The objective of the pre-feasibility study is primarily to facilitate potential entrepreneurs to facilitate investment and provide an overview about CNG Filling Station business. The project pre-feasibility may form the basis of an important investment decision and in order to serve this objective, the document covers various aspects of the business concept development, start-up, production, marketing, and finance and business management. The document also provides sectoral information, brief on government policies and international scenario, which have some bearing on the project itself. This particular pre-feasibility is regarding “CNG Filling Station” which comes under “Petroleum” sector. 2 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study 3 CNG Filling Station CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT 3.1 Key Success Factors Following factors are the key in making this project profitable: Location of the project will play a pivotal role in the successful running of the CNG station. The daily turnover of the cars largely depends on this important factor. Selection of proper equipment is another key for carrying out the successful operations of the proposed project. 3.2 Opportunities The proposed project would have a number of competitive advantages: The project will provide cheaper fuel to its customers compared to the petroleum products which are already on the higher side. Government has exempted the imposition of sales tax and custom duties on the import of CNG kits and CNG plant and equipment, HDIP, a non-profitable organization working under the umbrella of Ministry of Petroleum and Natural Resources, provides consultancy services to the interested parties for setting up the CNG filling stations. 3.3 Threats The proposed project will be facing the following threat: Market saturation over a longer period of time due to a large number of entrants Threat of increase in the prices of the natural gas by the government 4 PROJECT PROFILE 4.1 Opportunity Rationale Due to the environment friendly nature and low cost of natural gas, Hydrocarbon Development Institute of Pakistan (HDIP) has recognized the need and necessity to promote the use of CNG as a fuel in automobiles. HDIP has pioneered the use of environment friendly CNG in road transport as an economically viable fuel, which can substitute the imported petroleum products. 4.2 Project Brief 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. 3 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station 4.3 Introduction to CNG Natural Gas is one of the most valuable natural resources abundantly available in our country. The people of Pakistan have been using the petroleum products as a fuel in their automobiles, thus spending a huge amount of foreign exchange on import of petroleum products. Moreover, the Government of Pakistan has taken certain concrete steps in order to promote the use of natural gas as a fuel substitute in the automobiles. Due to the efforts made by the Government and comparatively low prices of gas, more than 600,000* vehicles have already been converted to operate on Compressed Natural Gas (CNG) fueling system all over Pakistan. Due to high cost of petroleum products, lots of vehicles are switching over to CNG. At present, there are more than 6701 CNG stations operating in the Country and this number is insufficient to meet the rising demand of CNG in the coming years. The total project cost for setting up the CNG filling stations has been estimated at Rs.31.13 million. It includes land, building, CNG equipment and machinery, spares, along with the preliminary expenses and working capital. Compressed Natural Gas (CNG) is produced when the natural gas is compressed into cylinders to be used as a fuel in the automobiles. The compressed natural gas has been used as an automobile fuel since 1940, and over the years, the technology has been modified and refined. In the recent years, the usage of CNG as an automobile fuel has significantly increased because of its low cost and environment friendly nature. 4.4 Proposed Business Legal Status The proposed legal structure of the business entity is either sole proprietorship or partnership. Although selection totally depends upon the choice of the entrepreneur but this financial feasibility is based on a Sole Proprietorship. 4.5 Project Cost The cost of project has been estimated as Rs.31.13 million including land, civil works, CNG equipment and office equipment. Preliminary expenses and gas security charges are estimated at Rs.0.82 million and Rs.1.8 million respectively. The CNG equipment comprises of gas compressor, dual hose dispenser, electric control panel, and storage cascades/cylinders. Table 4-1 Project Investment Fixed Investment Working Capital Total Investment Rs. 30,750,140 Rs. 377,390 Rs. 31,127,530 The proposed pre-feasibility is based on the assumption of 50% debt and 50% equity. However this composition of debt and equity can be changed as per the requirement of the investor. The project seems to be viable with the following returns on investment. 1 Source: International Association of Natural Gas Vehicles (IANGV) Feb, 2005 Statistics 4 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study Table 4-2 CNG Filling Station Project Returns Internal rate of return (project) Internal rate of return (equity) Net Present Value @ 20% Payback period – based on cash inflows 23.1% 45.1% Rs. 3,401,246 4 years 4.6 Viable Economic Size A minimum of 202 cars is required to be filled daily in order to operate at breakeven. Considering the market trends and number of vehicles being converted into CNG fueling system, initially the project would be able to attract and serve at-least 202 vehicles per day. 4.7 Proposed Capacity The equipment for CNG filling station that has been considered for preparing this prefeasibility study is of British origin. This equipment is relatively more efficient and effective of the all types of equipment available in the market. Various other types of equipment are also available at a lower price. The chosen equipment is capable of refueling 50 vehicles per hour. Twin hose dispenser accompanies this equipment and it handles refueling of two vehicles at a time. 4.8 Proposed Location The proposed locations for the CNG Filling stations in Lahore are as follows Multan Road, Lahore Wapda Town, Lahore Model Town, Link Road, Lahore Johar Town, PIA Colony The said project may also be established in commercial area of any other city. 4.9 CNG Policy The Government of Pakistan has offered number of incentives for encouraging the use of CNG in the country. Some of these are summarized below: Strong Government commitment to promote usage of CNG Liberal policy of providing license for CNG retailing Deregulated market price of CNG (for the consumers) Priority of providing natural gas connection to CNG stations Exemption of import duty and sales tax till June 2005 on import of machinery and equipment, CNG kits and cylinders 5 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station This has provided a boost to the industry, and so far, more than 600,000 vehicles have been converted to CNG and 6702 CNG stations are operational. According to International Association for Natural Gas Vehicles (IANGV) statistics, Pakistan is ranked third in the CNG-using countries after Argentina and Brazil. 4.10 CNG Consultancy Services HDIP is also offering consultancy services to the investors, which include the whole range of activities like formation of company, selection of site, legal formalities, design of station, specifications of the equipment, selection of equipment, selecting and appointing the contractor, training of manpower, commissioning and supervision, etc. 5 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 670 CNG stations in the country and converting 600,000 vehicles on CNG fueling system till February 2005. 5.1 Target Customers The target customers for the proposed project would be the vehicles running on CNG fuel. 5.2 Market Demand At present there are more than 600,000 vehicles, which have been converted to CNG fuel, and a large number of vehicles are further being converted. 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. 5.3 Market Supply Total number of CNG stations in Pakistan is only 670, which is quite low for meeting the growing demand of CNG. Apart from these 670 CNG stations, many new CNG stations are being setup across the country. 5.4 Industry Growth There has been a tremendous growth in the CNG sector over the yeas. The total number of vehicles on CNG was 100,000 and CNG filling stations was 150 at the end of year 2000. The number of CNG vehicles and CNG filling stations has increased to 210,000 vehicles 2 As on Feb, 2005 6 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station and 220 stations respectively and by the year 2005 they have tremendously grown up to 670 CNG Stations and 600,000 CNG fitted vehicles. The growth in terms of percentage is given in the following table: Table 5-1 Growth Percentage of Vehicles Year 2004 2005 Percentage Increase No. Of Vehicles on CNG 450,000 600,000 33% CNG Filling Stations 550 670 22% The above growth rates present an opportunity for the new entrants to earn profits by setting up new CNG filling stations to meet the growing demand. 6 REGULATIONS, LICENSES AND INCENTIVES 6.1 License Obtaining a license from Ministry of Petroleum and Natural Resources is a pre-requisite for setting-up the CNG station. The cost associated with this license is Rs.25,000. 6.2 Certificate (by HDIP) After the installation of the required equipment for CNG filling station, HDIP will inspect the working of the equipment, and once satisfied, will issue a certificate verifying that the installed equipment is up to the required standards. The cost associated with this certification is Rs. 35,000. 6.3 NOCs No Objection Certificate will be required from the following departments prior to the commencement of the business: Concerned development authority of the city (Lahore Development Authority in case of Lahore) 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) Irrigation Department Forest Department Explosives Department The cost associated for obtaining the above NOCs is estimated at Rs.100,000. 7 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station 6.4 Incentives 6.4.1 Sales Tax The import of CNG equipment is exempted from sales tax vide SRO No.38 (1)/98 dated 21st January 1998 till June, 2005. 6.4.2 Custom Duty The CNG equipment is also exempted from the custom duties as per the above-referred SRO. 6.5 Regulatory Requirements 6.5.1 Quality Certificate SRO.38 (1)/98 dated 21st January 1998 has been amended on April 11, 2002 and the “Quality Certificate” from original manufacturer has been made mandatory. This certificate should state that the equipment meets the safety standard as laid down in Pakistan CNG Rules 1992. The designated third party inspector witnesses this Quality Certificate. The cost of third party inspection is $500. 6.5.2 List of Equipment The list of equipment and their various manufacturers has also been mentioned in the same amended SRO whose import is exempted from custom duty and sales tax. 6.5.3 Income Tax on the Import of CNG Equipment Income Tax, at the rate of 6%, is payable by the importer on the import of CNG equipment. 6.6 Income Tax The income of the CNG filling station is not exempted from the income tax. The investor has to pay tax on his/her income according to the nature of the business entity. The current project is being operated as a private limited company, so the income tax is payable at the rate of 45%. 8 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study 7 CNG Filling Station THE PROJECT CONCEPT 7.1 Project Cost The details of the cost of project are as follows: Table 7-1 Project Costs Item Land (9,000 Sq. ft) Building – Civil Works CNG Equipment Stores & Spares Office Equipment Furniture & Fixtures Gas Security Preliminary Expenses Working Capital Total Rupees 17,000,000 1,700,000 8,732,100 513,040 100,000 85,000 1,800,000 820,000 377,390 31,127,530 7.2 Project Financing The total cost of the project is Rs.31.13 million including the working capital of Rs.0.377 million. The sponsors of the project will contribute Rs.15.56 million and the bank will finance the remaining amount of Rs.15.56 million. 7.3 Project Details 7.3.1 Location For setting up a CNG filling station, location is the prime factor. As per the requirements of the Government of Pakistan, the filling station must be situated in a commercial area. CNG filling stations are not allowed to be installed in the residential areas. 7. 3. 2 L and A minimum of nine thousand (9000) square feet of land with at least 75 feet front opening is required for installing CNG filling station. An amount of Rs.17 million has been allocated for the acquisition of nine thousand square feet of commercial land in Lahore in in the areas of Model Town Link Road or Multan Road. A comparison of costs of commercial land in various other areas of Lahore is given below for reference purpose. 9 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station Table 7-2 Approximate Cost of Land in the Proposed Areas Location Gulberg, M. M. Alam Road. Main Boulevard Main Ferozpur Raod Model Town Link Road Multan Road Johar Town, PIA Colony Price Range for 9,000 Sq.ft Rs.16,000,000–18,000,000 Rs. 30,000,000—32,000,000 Rs.10,000,000–12,000,000 Rs.7,000,000–9,000,000 Rs.2,000,000–10,000,000 Rs.18,000,000–35,000,000 In this report, prices of commercial land for Lahore city has been considered, however, prices may considerably vary in the other cities like Quetta, Karachi, Hyderabad, Multan, Faisalabad, Islamabad, Peshawar etc. 7. 3. 3 B ui l di ng There are certain civil works required to be carried out at the proposed location. The civil works would be carried out on an area of 2250 square feet. The rest of the area will be floored with tuff tiles. Civil work includes the following: Office Control Room Compressor and Cascade/Cylinder Storage Room Shed for Dispenser Toilet/washroom Underground Gas Piping and Power Cables Flooring The total cost of construction is estimated at Rs.1.7 million. Details for the said cost are as follows: Table 7-3 Construction Cost (Amount in Rupees) Description Cost per Sq. ft. Cost Office, control room, compressor and cylinder storage 500 1,125,000 room, shed and toilet/washroom (2,250 sq.ft) Underground gas piping 200,000 Flooring (6,750sq.ft) 45 303,750 Contingencies 71,250 1,700,000 Total Cost Explosives department has laid down certain specifications for the compressor and cascade/cylinders storage room, which are as follows: 1. Minimum one meter distance is required between walls and compressor. 2. Minimum distance of one meter should be kept between compressor and cascade/cylinders. 10 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station 3. Fire rated walls3 must be used in the compressor and cylinder storage room. 4. Roof of the compressor and storage room should not be of permanent nature4. 7.3.4 Material Inputs There are two main inputs required for the CNG filling station, one is the natural gas and the other is electricity. The sponsor of the project is required to obtain both the connections from the relevant authorities i.e. WAPDA and Sui Northern Gas Pipelines Limited (SNGPL) or Sui Southern Gas Pipelines Limited (SSGPL). The cost associated with obtaining the gas connection is Rs.75, 000/-. In addition to this, a minimum security deposit of Rs.1.8million is also required to be deposited with the concerned authority. Bank guarantee is also acceptable in case of gas security. An amount of Rs.0.35 million is required for obtaining electricity connection. There is no security deposit required for the electricity connection. 7.3.5 CNG Equipment The following equipment is required for a CNG filling station: Gas Compressor The purpose of compressor is to compress the gas enabling it to discharge the gas for refueling. This compressor requires an input pressure of 8 or 15 PSIG5 from the main gas supply with the outlet pressure of 3,625 PSIG. With this discharge pressure, the equipment can refuel 50 vehicles per hour. Electric Control Panel Electric control panel is required to operate the gas compressor. This panel will be mounted in the control room. Storage Cascade Storage cascades/cylinders are used to store the natural gas. Priority Panel for Vehicle Priority During rush hours, the compressor is directly connected to the dispenser, bypassing the storage cascades/cylinders with the help of priority panel, facilitating the refueling of vehicles at a faster rate. CNG Dispenser high flow dual hose Gas is filled into the vehicles with the help of dispenser. This dual hose dispenser is capable of handling two vehicles at a time. There are various foreign manufacturers providing the CNG filling station equipment. In this pre-feasibility report, a British origin compressor6 has been selected. This equipment is selected because of its low electricity consumption, higher outlet pressure, low maintenance, durable working, longer periods between overhauls and good market repute and presence. 3 with RCC (Reinforced cement concrete) structure Corrugated asbestos might be used as the roof for the compressor and cylinder storage room to prevent the compressor and cylinders from heat. 5 pounds per square inch gauge pressure 6 Ham worthy Compressor, Bellies & Marcum, UK, Model: H430H-WL Capacity: 400 m3/hr 4 11 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station Different gas pressures are available in different areas of Pakistan from the main gas supply line. The pressure of 15 PSIG is not easily available at every location. Where the gas pressure of 15 PSIG is not available, in that situation, the model with inlet pressure of 8 PSIG is used, which has been manufactured to operate at a lower gas pressure. However, the consumption of electricity increases. The total capacity of the selected equipment is 400M3/Hr with a total power load of 93 KW. All the CNG filling station equipment is foreign manufactured and imported on the specific requirement of the sponsor by the authorized agent. Usually, the equipment is delivered within 12 to 16 weeks from the receipt of purchase order and initial payment. The details of this equipment and accessories are available in Annexure # 1.1.1. 7.3.6 Suppliers The Central Board of Revenue (CBR) has specified the list of compressors, storage cylinders, CNG vehicle cylinders, CNG machinery & equipment and conversion kits in SRO 38(1)/98. For the convenience of investor, a list of some of the available equipment and machinery is given below: Table 7-4 Supplier’s Name Supplier’s Name Rix Services, New Zealand Compare UK Ltd, UK Norwalk Company Inc. USA Sulzer Burckhardt Engg. Works Switzerland Hamworthy, Bellis & Morcom UK Safe s.r.l Italy Hurricane, Grimmer Industries, USA Chengdu Jinxing Chemical Machinery and Equiment Factory, China Chonqing Air Gas Compressor Factory, China Intermech Ltd. NewZealand Unigas NewZealand Compare Mahle GmbH, Germany Sicom SRL , Italy 12 PREF-34/May, 2005/Rev 2 Available Models 2JJS3G-178, FX-150, 3KX3G-40, 6W5G-150 Gazpack 36, Gazpack37 C-75-3, C150-4, NQSV3 C40111S, C50214S H430H-WL, H280H-WL, V130H-WL SW75SE-F1-EM, SW110SE-F1-EM, SW110-F1-EM, SW132-F1-EM, SW90F0, 35-EM CNG90, CNG 125, CNG250 ZW-3.45/250JX, ZW-5.0/1-23, ZW5.52/0.5-250JX L-3.8/1-250, L-3/1-250, L-5/0.56-250, L-2.9/0.56-250, L-4.65/0.56-250, W3.8/0.56-250, W-3.8/1-250 RHINO PAR-75VE 4-8 RHINO PAR-1-DE 4-82 RHINO-PAR 150DE4-10 Apollo VR-550 5409.2NG.EU 650.250.20-IFDE-23SE Pre-Feasibility Study CNG Filling Station 7.3.7 Stores & Spares The whole equipment required for setting up a CNG filling station is imported. Therefore, it is required to build an inventory of necessary spare parts to meet the unforeseen circumstances such as breakdown or any other fault in any part or equipment. For this purpose, a stock of necessary spare parts worth $8,000 will be imported along with other equipment to maintain a minimum level of spare parts. 7.3.8 Furniture and Fixtures Furniture and fixtures mainly include tables, chairs, sofas, fans & lights, carpet, curtains and fire extinguishers. It is estimated that the furniture and fixtures of Rs.85,000 would be purchased. 7.3.9 Office Equipment Some office equipment is also required for the proposed project. A provision of Rs.100,000 ha been made for acquiring the required office equipment. The details of office equipment are annexed in Annexure # 1.1. 7.4 Manpower Requirement Manpower requirement for the CNG filling station includes manager, cashier, dispenser, operators, accountant, watchman and sweeper. The total staff strength would be 13 persons for the two shifts. The staff salaries for year one are as follows: Table 7-5 Human Resource Requirement Designation Manager Deputy Manager Accountant Cashier Dispenser Operator Watchmen Sweeper Total No. of Employees for two shifts 1 1 1 2 4 2 2 1 13 PREF-34/May, 2005/Rev 2 Salary per month 20,000 10,000 6,000 4,500 3,500 5,500 3,500 2,500 Total salary per month (Rupees) 240,000 120,000 72,000 108,000 168,000 132,000 84,000 30,000 954,000 Pre-Feasibility Study 8 CNG Filling Station BASIS FOR FINANCIAL PROJECTIONS 8.1 Inflation Rate 10% inflation rate has been considered while making the projections for cost of sales, operational expenses and salaries. The prices for gas, electricity, operational expenses and staff salaries are increased by 10% every year as a result of inflation. The selling price of gas has been increased by 5% every year. 8.2 Revenue Assumptions 8.2.1 No. of Cars Based on the survey of some CNG stations in Lahore, the number of cars assumed for revenue projections is as follows: Table 8-1 Detailed Projected Increase in Cars Years No. Of Cars 1 202 2 303 3 363 4 435 5 522 6 600 7 690 8 793 9 911 10 1,047 The average number of cars in the first years is estimated at 202 cars per day, starting from 120 cars per day in the first month and going up to 290 cars per day in the 12th month.. In the second year, it has increased to 303 cars per day. After second year, number of cars is increasing at a rate of 20% till fifth year because the project would be in its growth stage. An increase of 15% has been considered from sixth year, because at that time, the project would be at its maturity stage. 8.2.2 Gas per Vehicle Currently, the CNG cylinders with two different capacities are installed in the CNG fitted cars. One type of cylinder has a capacity of 40 kg and the other has a capacity of 50 kg. Gas of 6.6 and 11.12 cubic meter can be filled in the cylinders of 40kg and 50kg respectively. A weighted average of 9.31 cubic meters of gas per vehicle has been taken for the revenue calculations. 14 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study Table 8-2 CNG Filling Station Average Volume Cylinder Type 40 kg 50 kg Weighted Average Volume Volume (cubic meters) 6.6 11.12 Percentage Use 40% 60% 9.31 cubic meters 8.3 Depreciation on Assets 8.3.1 Accounting Profit Depreciation on the assets has been charged at the following rates for the calculation of accounting profits: Table 8-3 Depreciation Rates Building CNG Plant & Equipment Office Equipment Furniture & Fixture 5% 10% 20% 10% 8.3.2 Taxable Profit For the purpose of calculating taxable profit, depreciation is calculated on the rates as per the Income Tax Law, which is as follows: Table 8-4 Tax Adjustments Land Building CNG Plant & Equipment Office Equipment Furniture & Fixture 0% 5% 10% 10% 10% 8.4 First Year Allowance Other than the normal depreciation allowances, first year allowance is also provided on the newly installed CNG plant and equipment for the purpose of providing benefit to the entrepreneur. The first year allowance is calculated at 40% of written down value of CNG plant and equipment. 8. 5 Multiple Shift Allowance In addition to normal depreciation and first year allowances, multiple shift allowance is also provided for the plant and machinery, which operates on double or triple shift basis. In this proposed project, CNG plant will run on two-shift basis during the whole year. So multiple shift allowance is calculated and added to the depreciation of CNG plant and 15 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station equipment for all the ten years. Multiple shift allowance has been taken as 66.6% of the normal depreciation allowance. 8. 6 Amortization of Preliminary Expenses Preliminary expenses amounting to Rs.820, 000/- will be amortized at the rate of 20% per annum. 8.7 Working Capital Working capital is calculated on the basis of following assumptions: 8.7.1 Accounts Receivables Mostly, the sale of CNG is on cash basis. However, some CNG stations do offer a credit facility to reputable companies on agreed terms and conditions. Therefore, receivables are estimated at 6% of the total sales amount. 8.7.2 Advances to Employees Advances to employees are calculated on the basis of 30 days of both payroll and staff benefits. 8.7.3 Accrued Utilities and Power Expenses Normally, it would take 20 days to deposit the utilities (electricity, water and telephone) bills. Therefore, utility expenses for 20 days have been taken as the basis for working capital computation. 8.7.4 Accounts Payable Cost of gas and electricity for 20 days has been considered in calculating accounts payable. 8.7.5 Sales Tax Payable Every company is required to deposit the amount of sales tax collected from the consumers, within 14 days. The same has been taken as the basis for calculating the amount of sales tax payable. 8.8 Sales Tax The sales tax levied by Government of Pakistan is charged to the customers at the rate of 15% on the sale of gas. These funds are deposited after every 14 days in favor of Government of Pakistan. 8.9 Ratio/Financial Analysis The figures for the rate of return on investment and return on equity are averaged for the first five years to make it more reasonable. 16 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station 8.10 Alternative Investment Opportunity The cost of land is the major portion of investment in this project. If any investor does not have enough resources for the acquisition of land, he/she also has another alternative course of action to setup the CNG station without acquiring the land. The investor can make investments only in the purchase of CNG plant and equipment and install this equipment with any existing petrol pump. In this case, the investment for installing the CNG equipment will be made by the investor and the space will be provided by the dealer/owner of the existing petrol pump. The investor will pay 15% commission on the total revenue to the dealer/owner of the petrol pump. Moreover, the investor can also avail lease facility from any leasing company on the purchase of CNG plant and equipment. 17 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study 9 CNG Filling Station FINANCIAL ANALYSIS 9.1 Project Costs P ro je c t C o s t R s. A s s e ts Land B u ild in g - C iv il W o r k s C N G E q u ip m e n t $ 1 3 3 ,9 0 0 Sto re & Sp a re s $ 8 ,0 0 0 O ffic e E q u ip m e n t F u r n itu r e & F ix t u r e A d v a n c e s & S e c u r it ie s G a s S e c u r it y ( D e p e n d s o n t h e S N G P L a s s e s s m e n t ) P r e l i m in a r y E x p e n s e s G a s C o n n e c t io n s & I n s t a lla tio n C h a r g e s ( S N G P L ) E le c t r ic it y C o n n e c t io n s C h a r g e s Local E xpe nses L ic e n s e fr o m M O P R e g is tr a t io n o f C o m p a n y ( A u t h o r iz e d C a p ita l 1 0 m illio n ) I n s p e c t io n F e e ( H D I P ) O th e r A p p r o v a ls ( N O C s ) T r a v e llin g & C o n v e y a n c e O th e r E x p e n s e s W o r k in g C a p i t a l T o ta l A s s e ts T o t a l C a p i t a l E m p lo y e d B y : Bank Loan E q u ity T o t a l C a p it a l 1 7 ,0 0 0 , 0 0 0 1 ,7 0 0 ,0 0 0 8 ,7 3 2 ,1 0 0 5 1 3 ,0 4 0 1 0 0 ,0 0 0 8 5 ,0 0 0 2 8 ,1 3 0 ,1 4 0 1 ,8 0 0 ,0 0 0 7 5 ,0 0 0 3 5 0 ,0 0 0 1 0 0 ,0 0 0 2 5 ,0 0 0 8 5 ,0 0 0 3 5 ,0 0 0 1 0 0 ,0 0 0 2 0 ,0 0 0 3 0 ,0 0 0 8 2 0 ,0 0 0 3 7 7 ,3 9 0 R s . 3 1 ,1 2 7 ,5 3 0 50% 50% 1 US$ = Rs. P ro je c t R e tu rn s IR R NPV @ 20% P a y B a c k P e r io d 1 5 ,5 6 3 ,7 6 5 1 5 ,5 6 3 ,7 6 5 R s . 3 1 ,1 2 7 ,5 3 0 6 0 .5 0 % R s. Y rs. 18 PREF-34/May, 2005/Rev 2 R s. 2 3 .1 % 3 ,4 0 1 ,2 4 6 4 Pre-Feasibility Study CNG Filling Station 9.2 Projected Income Statement Statement Summaries Income Statement Gross Sales Less: Sales Tax Net Sales Cost of Sales Gross Profit Operating Expenses: Operating Expenses Depreciation Amortization of Preliminary Exp. Operating Profit Interest on Loan Interest on Lease Profit before Tax Taxation (See working) Profit after Tax Balance B/F Retained Earnings Balance C/F Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 202 Cars 303 Cars 363 Cars 435 Cars 522 Cars 600 Cars 690 Cars 793 Cars 911 Cars 1047 Cars 13,139,090 1,714,651 11,424,439 20,375,524 2,659,006 17,716,518 25,673,161 3,350,347 22,322,813 32,303,626 4,215,623 28,088,003 40,702,568 5,311,685 35,390,883 49,123,789 6,410,655 42,713,135 59,316,976 7,740,865 51,576,110 71,580,116 9,341,205 62,238,911 86,342,950 11,267,755 75,075,195 104,194,426 13,597,373 90,597,054 5,516,754 5,907,685 8,937,181 8,779,338 11,766,663 10,556,150 15,474,153 12,613,850 20,382,143 15,008,740 25,720,252 16,992,883 32,478,303 19,097,807 40,992,720 21,246,191 51,725,438 23,349,757 65,304,354 25,292,699 2,032,005 986,710 164,000 3,182,715 2,724,970 2,147,885 890,289 164,000 3,202,174 5,577,164 2,284,084 803,698 164,000 3,251,782 7,304,369 2,441,762 725,883 164,000 3,331,646 9,282,204 2,622,282 810,345 164,000 3,596,627 11,412,113 2,896,712 731,953 3,628,665 13,364,218 3,120,922 661,391 3,782,313 15,315,494 3,374,100 597,852 3,971,951 17,274,240 3,658,487 540,615 4,199,101 19,150,656 3,976,614 489,037 4,465,652 20,827,048 1,089,464 1,089,464 1,635,507 57,122 1,578,384 1,578,384 1,578,384 1,852,088 1,852,088 3,725,076 487,101 3,237,975 1,578,384 4,816,359 4,816,359 1,416,303 1,416,303 5,888,066 2,126,398 3,761,668 4,816,359 8,578,027 8,578,027 980,517 980,517 8,301,687 2,976,423 5,325,264 8,578,027 13,903,291 13,903,291 544,732 544,732 10,867,382 3,841,159 7,026,222 13,903,291 20,929,514 20,929,514 108,946 108,946 13,255,272 4,687,398 8,567,874 20,929,514 29,497,388 29,497,388 15,315,494 5,415,542 9,899,952 29,497,388 39,397,339 39,397,339 17,274,240 6,105,492 11,168,748 39,397,339 50,566,087 50,566,087 19,150,656 6,764,544 12,386,112 50,566,087 62,952,199 62,952,199 20,827,048 7,351,985 13,475,063 62,952,199 76,427,262 76,427,262 19 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station 9.3 Projected Balance Sheet Statement Summaries Balance Sheet YEAR Start up 1 2 3 4 5 6 7 8 9 10 27,617,100 27,617,100 26,630,390 26,630,390 25,740,101 25,740,101 24,936,403 24,936,403 24,210,520 24,210,520 24,944,476 24,944,476 24,212,523 24,212,523 23,551,132 23,551,132 22,953,280 22,953,280 22,412,665 22,412,665 21,923,628 21,923,628 820,000 28,437,100 656,000 27,286,390 492,000 26,232,101 328,000 25,264,403 164,000 24,374,520 24,944,476 24,212,523 23,551,132 22,953,280 22,412,665 21,923,628 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 513,040 377,390 890,430 TOTAL ASSETS 31,127,530 CAPITAL EMPLOYED REPRESENTED BY: 793,364 87,450 513,040 1,042,927 2,436,781 31,523,171 - 1,230,314 96,195 513,040 1,999,944 3,839,493 31,871,594 - 1,550,195 105,815 513,040 3,469,418 5,638,468 32,702,872 - 1,950,556 116,396 513,040 6,398,351 8,978,343 35,152,863 - 2,457,700 128,036 513,040 9,535,653 12,634,428 39,378,904 - 2,966,190 140,839 513,040 17,094,942 20,715,011 46,727,534 - 3,581,674 154,923 513,040 27,451,315 31,700,953 57,052,084 - 4,322,147 170,415 513,040 38,994,185 43,999,787 68,753,067 - 5,213,555 187,457 513,040 51,680,102 57,594,154 81,806,819 - 6,291,462 206,203 513,040 65,388,343 72,399,047 96,122,675 - 15,563,765 15,563,765 15,563,765 1,578,384 17,142,149 15,563,765 4,816,359 20,380,124 15,563,765 8,578,027 24,141,792 15,563,765 13,903,291 29,467,056 15,563,765 20,929,514 36,493,279 15,563,765 29,497,388 45,061,153 15,563,765 39,397,339 54,961,104 15,563,765 50,566,087 66,129,852 15,563,765 62,952,199 78,515,964 15,563,765 76,427,262 91,991,027 15,563,765 15,563,765 14,007,389 14,007,389 10,894,636 10,894,636 7,781,883 7,781,883 4,669,130 4,669,130 1,556,377 1,556,377 31,127,530 296,952 10,000 66,681 373,633 31,523,171 482,429 11,000 103,406 596,834 31,871,594 636,806 12,100 130,291 779,197 32,702,872 839,426 13,310 163,941 1,016,677 35,152,863 1,108,042 14,641 206,566 1,329,249 39,378,904 FIXED ASSETS Preliminary Expenses OTHER ASSETS Security CURRENT ASSETS Accounts Receivables Advances to Employees Stores & Spares Cash & Bank Balances SHARE CAPITAL 1,556,377 Shares @ Rs.10/- each UNAPP. PROFIT/(LOSS) LONG TERM LIABILITIES Finance Lease Long Term Loan CURRENT LIABILITIES Creditors Utility Bills Payable Sales Tax Payable TOTAL 20 PREF-34/May, 2005/Rev 2 1,400,973 16,105 249,303 1,666,381 46,727,534 1,772,231 17,716 301,034 2,090,980 57,052,084 2,240,459 19,487 363,269 2,623,215 68,753,067 2,831,228 21,436 438,190 3,290,855 81,806,819 3,579,282 23,579 528,787 4,131,648 96,122,675 Pre-Feasibility Study CNG Filling Station 9.4 Projected Cash Flow Statement Statement Summaries Cash Flow Statement YEAR SOURCES FROM OPERATION Profit Before Tax Add: Depreciation Amortization 1 2 3 1,635,507 986,710 164,000 3,725,076 890,289 164,000 5,888,066 803,698 164,000 1,150,710 2,786,217 1,054,289 4,779,365 2,786,217 4 5 6 7 8 9 10 8,301,687 725,883 164,000 10,867,382 810,345 164,000 13,255,272 731,953 - 15,315,494 661,391 - 17,274,240 597,852 - 19,150,656 540,615 - 20,827,048 489,037 - 967,698 6,855,764 889,883 9,191,570 974,345 11,841,727 731,953 13,987,225 661,391 15,976,885 597,852 17,872,091 540,615 19,691,271 489,037 21,316,085 4,779,365 6,855,764 9,191,570 11,841,727 13,987,225 15,976,885 17,872,091 19,691,271 21,316,085 1,556,377 57,122 3,112,753 487,101 3,112,753 2,126,398 3,112,753 2,976,423 3,112,753 3,841,159 1,556,377 4,687,398 5,415,542 6,105,492 6,764,544 7,351,985 1,613,499 1,172,718 3,599,854 1,179,511 5,239,151 1,616,612 6,089,176 3,102,395 8,498,213 3,343,514 6,243,774 7,743,450 5,415,542 10,561,343 6,105,492 11,766,599 6,764,544 12,926,727 7,351,985 13,964,100 507,181 665,537 377,390 222,493 957,017 1,042,927 147,138 1,469,474 1,999,944 173,462 2,928,933 3,469,418 206,212 3,137,302 6,398,351 184,161 7,559,290 9,535,653 204,970 10,356,373 17,094,942 223,729 11,542,870 27,451,315 240,811 12,685,916 38,994,185 255,859 13,708,241 51,680,102 1,042,927 1,999,944 3,469,418 6,398,351 9,535,653 17,094,942 27,451,315 38,994,185 51,680,102 65,388,343 507,181 729,674 876,813 1,050,275 1,256,487 1,440,648 1,645,617 1,869,346 2,110,157 2,366,017 507,181 222,493 147,138 173,462 206,212 184,161 204,970 223,729 240,811 255,859 OTHER SOURCES APPLICATION Repayments of Loan Tax Payment Dividend Paid - Cash SURPLUS / (DEFICIT) INCREASE/(DECREASE) IN WORKING CAPITAL NET INCREASE/(DECREASE) OPENING BANK BALANCES CLOSING CASH BALANCE WORKING CAPITAL Increase 21 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station 9.5 Revenues Revenues Quantity of Gas Sale per Vehicle Annual Increase in the Sale Price of Gas 9.31 Cubic Meter 5% Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 202 Cars 303 Cars 363 Cars 435 Cars 522 Cars 600 Cars 690 Cars 793 Cars 911 Cars 1047 Cars 255 No. of Cars / day Sale of Gas / day (in M3) 3 Sale of Gas / month (in M ) 3 Sale of Gas / anum (in M ) Selling Price of Gas / M 3 Rs. Total Revenue 1878 2816 3380 4050 4860 5586 6424 7383 8481 9748 57206 84488 101386 121496 145795 167580 192717 221485 254442 292427 686473 1013859 1216631 1457946 1749535 2010960 2312604 2657819 3053308 3509125 19.14 13,139,090 Sales Tax @ 15% Rs. 2.50 Sales Tax Amount Rs. 1,714,651 Rs. 20.10 20,375,524 Rs. 2.62 Rs. 2,659,006 Rs. 21.10 25,673,161 Rs. 2.75 Rs. 3,350,347 Rs. 22.16 32,303,626 Rs. 2.89 Rs. 4,215,623 Rs. Rs. 3.04 Rs. 5,311,685 22 PREF-34/May, 2005/Rev 2 23.26 40,702,568 Rs. 24.43 49,123,789 Rs. 3.19 Rs. 6,410,655 Rs. 25.65 59,316,976 Rs. 3.35 Rs. 7,740,865 Rs. 26.93 71,580,116 Rs. 3.51 Rs. 9,341,205 Rs. 28.28 86,342,950 Rs. 3.69 Rs. 11,267,755 Rs. 29.69 104,194,426 Rs. 3.87 Rs. 13,597,373 Pre-Feasibility Study CNG Filling Station 9.6 Cost of Sales Cost of Sales Rate of Gas Consumption of Electricity Rate of Electricity Maintenance Annual Increase Rs. 6.50 0.186 KW Rs. 6.92 Rs. 0.25 10% Year 1 No. of Cars / day 202 Cars Annual Gas Sold (in M3) 686,473 Electricity Consumed in KWH 127,684 Rate of Gas Rs. 6.50 Rate of Electricity Rs. 6.92 Cost of Sales Cost of Gas Sold 4,462,074 Cost of Electricity 883,062 Maintenance 171,618 Cost of Sales 5,516,754 /Cubic Meter /Cubic Meter /KWHr /Cubic Meter Year 2 303 Cars 1,013,859 188,578 Rs. 7.15 Rs. 7.61 Year 3 363 Cars 1,216,631 226,293 Rs. 7.87 Rs. 8.37 Year 4 435 Cars 1,457,946 271,178 Rs. 8.65 Rs. 9.21 Year 5 522 Cars 1,749,535 325,414 Rs. 9.52 Rs. 10.13 Year6 600 Cars 2,010,960 374,039 Rs. 10.47 Rs. 11.14 Year 7 690 Cars 2,312,604 430,144 Rs. 11.52 Rs. 12.25 Year 8 793 Cars 2,657,819 494,354 Rs. 12.67 Rs. 13.48 Year 9 911 Cars 3,053,308 567,915 Rs. 13.93 Rs. 14.83 Year 10 1047 Cars 3,509,125 652,697 Rs. 15.33 Rs. 16.31 7,249,092 1,434,624 253,465 9,568,801 1,893,704 304,158 12,613,420 2,496,246 364,487 16,649,714 3,295,045 437,384 21,051,363 4,166,149 502,740 26,629,974 5,270,178 578,151 33,665,690 6,662,575 664,455 42,542,734 8,419,377 763,327 53,783,169 10,643,904 877,281 8,937,181 11,766,663 15,474,153 20,382,143 25,720,252 32,478,303 40,992,720 51,725,438 65,304,354 23 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station 9.7 Working Capital Working Capital 1 Total No. of Days 360 Current Assets Basis Receivables Sales Advances to Employees Stores & Spares Stock Payroll+Benefits 2 3 4 5 6 7 8 9 10 Days 25 793,364 1,230,314 1,550,195 1,950,556 2,457,700 2,966,190 3,581,674 4,322,147 5,213,555 6,291,462 30 87,450 96,195 105,815 116,396 128,036 140,839 154,923 170,415 187,457 206,203 - - - TOTAL CURRENT ASSETS 880,814 1,326,509 1,656,010 2,066,952 2,585,736 3,107,029 3,736,597 4,492,562 5,401,012 6,497,665 Current Liabilities Accrued Utilities & Power Expenses Utilities Expenses 20 10,000 11,000 12,100 13,310 14,641 16,105 17,716 19,487 21,436 23,579 Accounts Payable Cost of Gas & Electricity 20 296,952 482,429 636,806 839,426 1,108,042 1,400,973 1,772,231 2,240,459 2,831,228 3,579,282 Sales Tax Payable Sales Tax 14 66,681 103,406 130,291 163,941 206,566 249,303 301,034 363,269 438,190 528,787 TOTAL CURRENT LIABILITIES 373,633 596,834 779,197 1,016,677 1,329,249 1,666,381 2,090,980 2,623,215 3,290,855 4,131,648 NET WORKING CAPITAL 507,181 729,674 876,813 1,050,275 1,256,487 1,440,648 1,645,617 1,869,346 2,110,157 2,366,017 24 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station 9.8 Ratio Analysis Ratio Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Profitability Ratios Gross Profit 51.71% 49.55% 47.29% 44.91% 42.41% 39.78% 37.03% 34.14% 31.10% 27.92% Operating Profit 23.85% 31.48% 32.72% 33.05% 32.25% 31.29% 29.69% 27.75% 25.51% 22.99% Net Profit before tax 14.32% 21.03% 26.38% 29.56% 30.71% 31.03% 29.69% 27.75% 25.51% 22.99% Profit after Tax 13.82% 18.28% 16.85% 18.96% 19.85% 20.06% 19.19% 17.94% 16.50% 14.87% 5.01% 10.16% 11.50% 15.15% 17.84% 18.34% 17.35% 16.24% 15.14% 14.02% Return on Investment (ROI) Return on Equity (ROE) Earning per Share (EPS) Dividend per Share 9.21% 15.89% Rs. 1.05 Rs. 2.39 Rs. - Rs. - 15.58% Rs. 3.78 Rs. - 18.07% Rs. 5.33 Rs. - 19.25% Rs. 6.98 Rs. - 19.01% Rs. 8.52 Rs. - 18.01% Rs. 9.84 Rs. - 16.89% Rs. 11.10 Rs. - 15.78% Rs. 12.30 Rs. - 14.65% Rs. 13.38 Rs. - Liquidity Ratios Current Ratio 6.52 6.43 7.24 8.83 9.50 12.43 15.16 16.77 17.50 17.52 Debt Ratios Debt Ratio (of total assets) Debt Equity Interest Coverage Ratio 44.44% 34.18% 23.80% 13.28% 3.95% 0.00% 0.00% 0.00% 0.00% 0.00% 81.7% 53.5% 32.2% 15.8% 4.3% 0.0% 0.0% 0.0% 0.0% 0.0% 2.50 3.01 5.16 9.47 20.95 122.67 0.00 0.00 0.00 0.00 25 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station 10 REQUIREMENT FOR THE LICENSE 26 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station 27 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study Annexure 10 CNG Filling Station Requirement for the License 28 PREF-34/May, 2005/Rev 2 Pre-Feasibility Study CNG Filling Station 29 PREF-34/May, 2005/Rev 2
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