Petroleum Feasibility

Pre-Feasibility Study

CNG FILLING STATION

Small and Medium Enterprise Development AuthorityGovernment of Pakistan

www.smeda.org.pk

HEAD OFFICE

6th Floor, LDA Plaza, Egerton Road, LahoreTel: (042) 111-111-456, Fax: (042) 6304926, 6304927

[email protected]

REGIONAL OFFICE PUNJAB

REGIONAL OFFICE SINDH

REGIONAL OFFICENWFP

REGIONAL OFFICE BALOCHISTAN

8th Floor, LDA Plaza, Egerton Road, Lahore.

Tel: (042) 111-111-456Fax: (042) 6370474

[email protected]

5TH Floor, BahriaComplex II, M.T. Khan Road,

Karachi.Tel: (021) 111-111-456

Fax: (021) [email protected]

Ground FloorState Life Building

The Mall, Peshawar.Tel: (091) 9213046-47


Bungalow No. 15-AChaman Housing Scheme

Airport Road, Quetta.Tel: (081) 831623, 831702


May, 2005

Pre-Feasibility Study CNG Filling Station

PREF-34/May, 2005/Rev 2

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1 INTRODUCTION TO SMEDA.................................................................................22 Purpose of the document............................................................................................ 23 Crucial Factors & Steps in decision making for investment........................................3

3.1 Key Success Factors........................................................................................... 33.2 Opportunities ..................................................................................................... 33.3 Threats ............................................................................................................... 3

4 Project Profile............................................................................................................ 34.1 Opportunity Rationale ........................................................................................34.2 Project Brief.......................................................................................................34.3 Introduction to CNG .......................................................................................... 44.4 Proposed Business Legal Status .........................................................................44.5 Project Cost........................................................................................................ 44.6 Viable Economic Size ........................................................................................54.7 Proposed Capacity.............................................................................................. 54.8 Proposed Location.............................................................................................. 54.9 CNG Policy........................................................................................................54.10 CNG Consultancy Services ................................................................................ 6

5 Market Analysis......................................................................................................... 65.1 Target Customers ............................................................................................... 65.2 Market Demand .................................................................................................65.3 Market Supply ................................................................................................... 65.4 Industry Growth.................................................................................................6

6 REGULATIONS, Licenses and incentives................................................................. 76.1 License............................................................................................................... 76.2 Certificate (by HDIP) ......................................................................................... 76.3 NOCs................................................................................................................. 76.4 Incentives........................................................................................................... 8

6.4.1 Sales Tax....................................................................................................86.4.2 Custom Duty ..............................................................................................8

6.5 Regulatory Requirements ................................................................................... 86.5.1 Quality Certificate ...................................................................................... 86.5.2 List of Equipment....................................................................................... 86.5.3 Income Tax on the Import of CNG Equipment ...........................................8

6.6 Income Tax ........................................................................................................ 87 The Project CONCEPT..............................................................................................9

7.1 Project Cost........................................................................................................ 97.2 Project Financing ............................................................................................... 97.3 Project Details....................................................................................................9

7.3.1 Location ..................................................................................................... 97.3.2 Land........................................................................................................... 97.3.3 Building ................................................................................................... 107.3.4 Material Inputs ......................................................................................... 117.3.5 CNG Equipment ....................................................................................... 117.3.6 Suppliers .................................................................................................. 127.3.7 Stores & Spares ........................................................................................ 137.3.8 Furniture and Fixtures .............................................................................. 13



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7.3.9 Office Equipment ..................................................................................... 137.4 Manpower Requirement ................................................................................... 13

8 Basis for Financial Projections................................................................................. 148.1 Inflation Rate ................................................................................................... 148.2 Revenue Assumptions ...................................................................................... 14

8.2.1 No. of Cars ............................................................................................... 148.2.2 Gas per Vehicle ........................................................................................ 14

8.3 Depreciation on Assets..................................................................................... 158.3.1 Accounting Profit ..................................................................................... 158.3.2 Taxable Profit........................................................................................... 15

8.4 First Year Allowance ....................................................................................... 158.5 Multiple Shift Allowance ................................................................................. 158.6 Amortization of Preliminary Expenses ............................................................. 168.7 Working Capital............................................................................................... 16

8.7.1 Accounts Receivables............................................................................... 168.7.2 Advances to Employees............................................................................ 168.7.3 Accrued Utilities and Power Expenses .................................................. 168.7.4 Accounts Payable ..................................................................................... 168.7.5 Sales Tax Payable..................................................................................... 16

8.8 Sales Tax ......................................................................................................... 168.9 Ratio/Financial Analysis .................................................................................. 168.10 Alternative Investment Opportunity ................................................................. 17

9 Financial Analysis ................................................................................................... 189.1 Project Costs .................................................................................................... 189.2 Projected Income Statement ............................................................................. 199.3 Projected Balance Sheet ................................................................................... 209.4 Projected Cash Flow Statement ........................................................................ 219.5 Revenues.......................................................................................................... 229.6 Cost of Sales .................................................................................................... 239.7 Working Capital............................................................................................... 249.8 Ratio Analysis.................................................................................................. 25

10 Requirement for the License ................................................................................ 26



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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



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1 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 well-researched 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.



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3 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT

33..11 KKeeyy SSuucccceessss FFaaccttoorrss

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.

33..22 OOppppoorrttuunniittiieess

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.

33..33 TThhrreeaattss

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

44..11 OOppppoorrttuunniittyy RRaattiioonnaallee

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.

44..22 PPrroojjeecctt BBrriieeff

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.



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44..33 IInnttrroodduuccttiioonn ttoo CCNNGG

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.

44..44 PPrrooppoosseedd BBuussiinneessss LLeeggaall SSttaattuuss

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.

44..55 PPrroojjeecctt CCoosstt

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.

TTaabbllee 44--11 PPrroojjeecctt IInnvveessttmmeenntt

Fixed Investment Rs. 30,750,140Working Capital Rs. 377,390Total Investment 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.

1Source: International Association of Natural Gas Vehicles (IANGV) Feb, 2005 Statistics



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TTaabbllee 44--22 PPrroojjeecctt RReettuurrnnss

Internal rate of return (project) 23.1%Internal rate of return (equity) 45.1%Net Present Value @ 20% Rs. 3,401,246Payback period – based on cash inflows 4 years

44..66 VViiaabbllee EEccoonnoommiicc SSiizzee

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.

44..77 PPrrooppoosseedd CCaappaacciittyy

The equipment for CNG filling station that has been considered for preparing this pre-feasibility 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.

44..88 PPrrooppoosseedd LLooccaattiioonn

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.

44..99 CCNNGG PPoolliiccyy

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



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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.

44..1100 CCNNGG CCoonnssuullttaannccyy SSeerrvviicceess

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.

55..11 TTaarrggeett CCuussttoommeerrss

The target customers for the proposed project would be the vehicles running on CNG fuel.

55..22 MMaarrkkeett DDeemmaanndd

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.

55..33 MMaarrkkeett SSuuppppllyy

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.

55..44 IInndduussttrryy GGrroowwtthh

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



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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:

TTaabbllee 55--11 GGrroowwtthh PPeerrcceennttaaggee ooff VVeehhiicclleess

Year 2004 2005 Percentage IncreaseNo. 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

66..11 LLiicceennssee

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.

66..22 CCeerrttiiffiiccaattee ((bbyy HHDDIIPP))

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.

66..33 NNOOCCss

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 DepartmentThe cost associated for obtaining the above NOCs is estimated at Rs.100,000.



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66..44 IInncceennttiivveess

66..44..11 SSaalleess TTaaxx

The import of CNG equipment is exempted from sales tax vide SRO No.38 (1)/98 dated 21st January 1998 till June, 2005.

66..44..22 CCuussttoomm DDuuttyy

The CNG equipment is also exempted from the custom duties as per the above-referred SRO.

66..55 RReegguullaattoorryy RReeqquuiirreemmeennttss

66..55..11 QQuuaalliittyy CCeerrttiiffiiccaattee

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.

66..55..22 LLiisstt ooff EEqquuiippmmeenntt

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.

66..55..33 IInnccoommee TTaaxx oonn tthhee IImmppoorrtt ooff CCNNGG EEqquuiippmmeenntt

Income Tax, at the rate of 6%, is payable by the importer on the import of CNG equipment.

66..66 IInnccoommee TTaaxx

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%.



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7 THE PROJECT CONCEPT

77..11 PPrroojjeecctt CCoosstt

The details of the cost of project are as follows:

TTaabbllee 77--11 PPrroojjeecctt CCoossttss

Item RupeesLand (9,000 Sq. ft) 17,000,000Building – Civil Works 1,700,000CNG Equipment 8,732,100Stores & Spares 513,040Office Equipment 100,000Furniture & Fixtures 85,000Gas Security 1,800,000Preliminary Expenses 820,000Working Capital 377,390Total 31,127,530

77..22 PPrroojjeecctt FFiinnaanncciinngg

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.

77..33 PPrroojjeecctt DDeettaaiillss

77..33..11 LLooccaattiioonn

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.

77..33..22 LLaanndd

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.



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TTaabbllee 77--22 AApppprrooxxiimmaattee CCoosstt ooff LLaanndd iinn tthhee PPrrooppoosseedd AArreeaass

Location Price Range for 9,000 Sq.ftGulberg, M. M. Alam Road. Rs.16,000,000–18,000,000Main Boulevard Rs. 30,000,000—32,000,000Main Ferozpur Raod Rs.10,000,000–12,000,000Model Town Link Road Rs.7,000,000–9,000,000Multan Road Rs.2,000,000–10,000,000Johar Town, PIA Colony 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.

77..33..33 BBuuiillddiinngg

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:

TTaabbllee 77--33 CCoonnssttrruuccttiioonn CCoosstt ((AAmmoouunntt iinn RRuuppeeeess))

Description Cost per Sq. ft. CostOffice, control room, compressor and cylinder storage room, shed and toilet/washroom (2,250 sq.ft)

500 1,125,000

Underground gas piping - 200,000Flooring (6,750sq.ft) 45 303,750Contingencies - 71,250Total Cost - 1,700,000

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.



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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.

77..33..44 MMaatteerriiaall IInnppuuttss

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.

77..33..55 CCNNGG EEqquuiippmmeenntt

The following equipment is required for a CNG filling station:

Gas CompressorThe 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 PanelElectric control panel is required to operate the gas compressor. This panel will be mounted in the control room.

Storage CascadeStorage cascades/cylinders are used to store the natural gas.

Priority Panel for Vehicle PriorityDuring 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 hoseGas 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) structure4 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 pressure6 Ham worthy Compressor, Bellies & Marcum, UK, Model: H430H-WL Capacity: 400 m3/hr



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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.

77..33..66 SSuupppplliieerrss

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:

TTaabbllee 77--44 SSuupppplliieerr’’ss NNaammee

Supplier’s Name Available ModelsRix Services, New Zealand 2JJS3G-178, FX-150, 3KX3G-40,

6W5G-150Compare UK Ltd, UK Gazpack 36, Gazpack37Norwalk Company Inc. USA C-75-3, C150-4, NQSV3Sulzer Burckhardt Engg. Works Switzerland C40111S, C50214SHamworthy, Bellis & Morcom UK H430H-WL, H280H-WL, V130H-WLSafe s.r.l Italy SW75SE-F1-EM, SW110SE-F1-EM,

SW110-F1-EM, SW132-F1-EM, SW90F0, 35-EM

Hurricane, Grimmer Industries, USA CNG90, CNG 125, CNG250Chengdu Jinxing Chemical Machinery and Equiment Factory, China

ZW-3.45/250JX, ZW-5.0/1-23, ZW-5.52/0.5-250JX

Chonqing Air Gas Compressor Factory, China 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

Intermech Ltd. NewZealand RHINO PAR-75VE 4-8RHINO PAR-1-DE 4-82RHINO-PAR 150DE4-10

Unigas NewZealand Apollo VR-550Compare Mahle GmbH, Germany 5409.2NG.EUSicom SRL , Italy 650.250.20-IFDE-23SE



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77..33..77 SSttoorreess && SSppaarreess

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.

77..33..88 FFuurrnniittuurree aanndd FFiixxttuurreess

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.

77..33..99 OOffffiiccee EEqquuiippmmeenntt

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.

77..44 MMaannppoowweerr RReeqquuiirreemmeenntt

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:

TTaabbllee 77--55 HHuummaann RReessoouurrccee RReeqquuiirreemmeenntt

Designation No. of Employees for

two shifts

Salary per month

Total salaryper month(Rupees)

Manager 1 20,000 240,000 Deputy Manager 1 10,000 120,000 Accountant 1 6,000 72,000 Cashier 2 4,500 108,000 Dispenser 4 3,500 168,000 Operator 2 5,500 132,000 Watchmen 2 3,500 84,000 Sweeper 1 2,500 30,000 Total 954,000



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8 BASIS FOR FINANCIAL PROJECTIONS

88..11 IInnffllaattiioonn RRaattee

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.

88..22 RReevveennuuee AAssssuummppttiioonnss

88..22..11 NNoo.. ooff CCaarrss

Based on the survey of some CNG stations in Lahore, the number of cars assumed for revenue projections is as follows:

TTaabbllee 88--11 DDeettaaiilleedd PPrroojjeecctteedd IInnccrreeaassee iinn CCaarrss

Years No. Of Cars1 2022 3033 3634 4355 5226 6007 6908 7939 91110 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.

88..22..22 GGaass ppeerr VVeehhiiccllee

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.



15

TTaabbllee 88--22 AAvveerraaggee VVoolluummee

Cylinder Type Volume(cubic meters)

Percentage Use

40 kg 6.6 40%50 kg 11.12 60%Weighted Average Volume 9.31 cubic meters

88..33 DDeepprreecciiaattiioonn oonn AAsssseettss

88..33..11 AAccccoouunnttiinngg PPrrooffiitt

Depreciation on the assets has been charged at the following rates for the calculation of accounting profits:

TTaabbllee 88--33 DDeepprreecciiaattiioonn RRaatteess

Building 5%CNG Plant & Equipment 10%Office Equipment 20%Furniture & Fixture 10%

88..33..22 TTaaxxaabbllee PPrrooffiitt

For the purpose of calculating taxable profit, depreciation is calculated on the rates as per the Income Tax Law, which is as follows:

TTaabbllee 88--44 TTaaxx AAddjjuussttmmeennttss

Land 0%Building 5%CNG Plant & Equipment 10%Office Equipment 10%Furniture & Fixture 10%

88..44 FFiirrsstt YYeeaarr AAlllloowwaannccee

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.

88..55 MMuullttiippllee SShhiifftt AAlllloowwaannccee

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



16

equipment for all the ten years. Multiple shift allowance has been taken as 66.6% of the normal depreciation allowance.

88..66 AAmmoorrttiizzaattiioonn ooff PPrreelliimmiinnaarryy EExxppeennsseess

Preliminary expenses amounting to Rs.820, 000/- will be amortized at the rate of 20% per annum.

88..77 WWoorrkkiinngg CCaappiittaall

Working capital is calculated on the basis of following assumptions:

88..77..11 AAccccoouunnttss RReecceeiivvaabblleess

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.

88..77..22 AAddvvaanncceess ttoo EEmmppllooyyeeeess

Advances to employees are calculated on the basis of 30 days of both payroll and staff benefits.

88..77..33 AAccccrruueedd UUttiilliittiieess aanndd PPoowweerr EExxppeennsseess

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.

88..77..44 AAccccoouunnttss PPaayyaabbllee

Cost of gas and electricity for 20 days has been considered in calculating accounts payable.

88..77..55 SSaalleess TTaaxx PPaayyaabbllee

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.

88..88 SSaalleess TTaaxx

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.

88..99 RRaattiioo//FFiinnaanncciiaall AAnnaallyyssiiss

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.



17

88..1100 AAlltteerrnnaattiivvee IInnvveessttmmeenntt OOppppoorrttuunniittyy

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.



18

9 FINANCIAL ANALYSIS

99..11 PPrroojjeecctt CCoossttss

P ro je c t C o s tR s . R s .

A s s e tsL a n d 1 7 ,0 0 0 ,0 0 0 B u ild in g - C iv i l W o rk s 1 ,70 0 ,0 0 0 C N G E q u ip m e n t 1 3 3 ,9 0 0$ 8 ,73 2 ,1 0 0 S to re & S p a re s 8 ,0 0 0$ 5 1 3 ,0 4 0 O ffic e E q u ip m e n t 1 0 0 ,0 0 0 F u rn itu re & F ix tu re 8 5 ,0 0 0 2 8 ,1 3 0 ,1 4 0

A d v a n c e s & S e c u r it ie sG a s S e cu r it y (D e p e n d s o n th e S N G P L a ss e s sm e n t ) 1 ,8 0 0 ,0 0 0

P re lim in a ry E x p e n s e sG a s C o n n e c t io n s & In s ta l la t io n C h a rg e s (S N G P L ) 7 5 ,0 0 0 E le c t r ic it y C o n n e c t io n s C h a rg e s 3 5 0 ,0 0 0 L o ca l E x p e n s e s 1 0 0 ,0 0 0 L ic e n s e fro m M O P 2 5 ,0 0 0 R e g is tra t io n o f C o m p a n y (A u th o r ize d C a p ita l 1 0 m il l io n ) 8 5 ,0 0 0 In sp e c t io n F e e (H D IP ) 3 5 ,0 0 0 O th e r A p p ro va ls (N O C s ) 1 0 0 ,0 0 0 T ra ve ll in g & C o n ve ya n c e 2 0 ,0 0 0 O th e r E x p e n s e s 3 0 ,0 0 0 8 2 0 ,0 0 0

W o rk in g C a p ita l 3 7 7 ,3 9 0 T o ta l A s s e ts 3 1 ,1 2 7 ,5 3 0R s .

T o ta l C a p ita l E m p lo y e d B y :B a n k L o a n 5 0 % 1 5 ,5 6 3 ,7 6 5 E q u ity 5 0 % 1 5 ,5 6 3 ,7 6 5 T o ta l C a p ita l 3 1 ,1 2 7 ,5 3 0R s .

1 U S $ = 6 0 .5 0R s . P ro je c t R e tu rn s

IR R % 2 3 .1 %N P V @ 2 0 % R s . 3 ,4 0 1 ,2 4 6 P a y B a ck P e r io d Y rs . 4



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99..22 PPrroojjeecctteedd IInnccoommee SSttaatteemmeenntt

Statement SummariesIncome Statement

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

Gross Sales 13,139,090 20,375,524 25,673,161 32,303,626 40,702,568 49,123,789 59,316,976 71,580,116 86,342,950 104,194,426Less: Sales Tax 1,714,651 2,659,006 3,350,347 4,215,623 5,311,685 6,410,655 7,740,865 9,341,205 11,267,755 13,597,373 Net Sales 11,424,439 17,716,518 22,322,813 28,088,003 35,390,883 42,713,135 51,576,110 62,238,911 75,075,195 90,597,054

Cost of Sales 5,516,754 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 Gross Profit 5,907,685 8,779,338 10,556,150 12,613,850 15,008,740 16,992,883 19,097,807 21,246,191 23,349,757 25,292,699

Operating Expenses:Operating Expenses 2,032,005 2,147,885 2,284,084 2,441,762 2,622,282 2,896,712 3,120,922 3,374,100 3,658,487 3,976,614 Depreciation 986,710 890,289 803,698 725,883 810,345 731,953 661,391 597,852 540,615 489,037 Amortization of Preliminary Exp. 164,000 164,000 164,000 164,000 164,000 - - - - -

3,182,715 3,202,174 3,251,782 3,331,646 3,596,627 3,628,665 3,782,313 3,971,951 4,199,101 4,465,652 Operating Profit 2,724,970 5,577,164 7,304,369 9,282,204 11,412,113 13,364,218 15,315,494 17,274,240 19,150,656 20,827,048

Interest on Loan 1,089,464 1,852,088 1,416,303 980,517 544,732 108,946 - - - - Interest on Lease - - - - - - - - - -

1,089,464 1,852,088 1,416,303 980,517 544,732 108,946 - - - - Profit before Tax 1,635,507 3,725,076 5,888,066 8,301,687 10,867,382 13,255,272 15,315,494 17,274,240 19,150,656 20,827,048 Taxation (See working) 57,122 487,101 2,126,398 2,976,423 3,841,159 4,687,398 5,415,542 6,105,492 6,764,544 7,351,985 Profit after Tax 1,578,384 3,237,975 3,761,668 5,325,264 7,026,222 8,567,874 9,899,952 11,168,748 12,386,112 13,475,063 Balance B/F - 1,578,384 4,816,359 8,578,027 13,903,291 20,929,514 29,497,388 39,397,339 50,566,087 62,952,199 Retained Earnings 1,578,384 4,816,359 8,578,027 13,903,291 20,929,514 29,497,388 39,397,339 50,566,087 62,952,199 76,427,262

- - - - - - - - - - Balance C/F 1,578,384 4,816,359 8,578,027 13,903,291 20,929,514 29,497,388 39,397,339 50,566,087 62,952,199 76,427,262



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99..33 PPrroojjeecctteedd BBaallaannccee SShheeeett

Statement SummariesBalance Sheet

YEAR Start up 1 2 3 4 5 6 7 8 9 10

FIXED ASSETS 27,617,100 26,630,390 25,740,101 24,936,403 24,210,520 24,944,476 24,212,523 23,551,132 22,953,280 22,412,665 21,923,62827,617,100 26,630,390 25,740,101 24,936,403 24,210,520 24,944,476 24,212,523 23,551,132 22,953,280 22,412,665 21,923,628

Preliminary Expenses 820,000 656,000 492,000 328,000 164,000 - - - - - - 28,437,100 27,286,390 26,232,101 25,264,403 24,374,520 24,944,476 24,212,523 23,551,132 22,953,280 22,412,665 21,923,628

OTHER ASSETSSecurity 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

CURRENT ASSETSAccounts Receivables - 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 Advances to Employees - 87,450 96,195 105,815 116,396 128,036 140,839 154,923 170,415 187,457 206,203 Stores & Spares 513,040 513,040 513,040 513,040 513,040 513,040 513,040 513,040 513,040 513,040 513,040 Cash & Bank Balances 377,390 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

890,430 2,436,781 3,839,493 5,638,468 8,978,343 12,634,428 20,715,011 31,700,953 43,999,787 57,594,154 72,399,047TOTAL ASSETS 31,127,530 31,523,171 31,871,594 32,702,872 35,152,863 39,378,904 46,727,534 57,052,084 68,753,067 81,806,819 96,122,675

- - - - - - - - - - - CAPITAL EMPLOYED REPRESENTED BY:

SHARE CAPITAL1,556,377 Shares @ Rs.10/- each 15,563,765 15,563,765 15,563,765 15,563,765 15,563,765 15,563,765 15,563,765 15,563,765 15,563,765 15,563,765 15,563,765

UNAPP. PROFIT/(LOSS) - 1,578,384 4,816,359 8,578,027 13,903,291 20,929,514 29,497,388 39,397,339 50,566,087 62,952,199 76,427,26215,563,765 17,142,149 20,380,124 24,141,792 29,467,056 36,493,279 45,061,153 54,961,104 66,129,852 78,515,964 91,991,027

LONG TERM LIABILITIESFinance Lease - - - - - - - - - - - Long Term Loan 15,563,765 14,007,389 10,894,636 7,781,883 4,669,130 1,556,377 - - - - -

15,563,765 14,007,389 10,894,636 7,781,883 4,669,130 1,556,377 - - - - - CURRENT LIABILITIES

Creditors - 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 Utility Bills Payable - 10,000 11,000 12,100 13,310 14,641 16,105 17,716 19,487 21,436 23,579 Sales Tax Payable - 66,681 103,406 130,291 163,941 206,566 249,303 301,034 363,269 438,190 528,787

- 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 TOTAL 31,127,530 31,523,171 31,871,594 32,702,872 35,152,863 39,378,904 46,727,534 57,052,084 68,753,067 81,806,819 96,122,675



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99..44 PPrroojjeecctteedd CCaasshh FFllooww SSttaatteemmeenntt

Statement SummariesCash Flow Statement

YEAR 1 2 3 4 5 6 7 8 9 10SOURCESFROM OPERATIONProfit Before Tax 1,635,507 3,725,076 5,888,066 8,301,687 10,867,382 13,255,272 15,315,494 17,274,240 19,150,656 20,827,048Add: Depreciation 986,710 890,289 803,698 725,883 810,345 731,953 661,391 597,852 540,615 489,037 Amortization 164,000 164,000 164,000 164,000 164,000 - - - - -

1,150,710 1,054,289 967,698 889,883 974,345 731,953 661,391 597,852 540,615 489,0372,786,217 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

OTHER SOURCES- - - - - - - - - -

2,786,217 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

APPLICATIONRepayments of Loan 1,556,377 3,112,753 3,112,753 3,112,753 3,112,753 1,556,377 - - - - Tax Payment 57,122 487,101 2,126,398 2,976,423 3,841,159 4,687,398 5,415,542 6,105,492 6,764,544 7,351,985 Dividend Paid - Cash - - - - - - - - - - 1,613,499 3,599,854 5,239,151 6,089,176 8,498,213 6,243,774 5,415,542 6,105,492 6,764,544 7,351,985SURPLUS / (DEFICIT) 1,172,718 1,179,511 1,616,612 3,102,395 3,343,514 7,743,450 10,561,343 11,766,599 12,926,727 13,964,100

INCREASE/(DECREASE) IN WORKING CAPITAL 507,181 222,493 147,138 173,462 206,212 184,161 204,970 223,729 240,811 255,859NET INCREASE/(DECREASE) 665,537 957,017 1,469,474 2,928,933 3,137,302 7,559,290 10,356,373 11,542,870 12,685,916 13,708,241OPENING BANK BALANCES 377,390 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

CLOSING CASH BALANCE 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

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

Increase 507,181 222,493 147,138 173,462 206,212 184,161 204,970 223,729 240,811 255,859



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99..55 RReevveennuueess

Revenues

Quantity of Gas Sale per VehicleAnnual Increase in the Sale Price of Gas 5%


255

No. of Cars / day 202 Cars 303 Cars 363 Cars 435 Cars 522 Cars 600 Cars 690 Cars 793 Cars 911 Cars 1047 Cars

Sale of Gas / day (in M3) 1878 2816 3380 4050 4860 5586 6424 7383 8481 9748

Sale of Gas / month (in M3) 57206 84488 101386 121496 145795 167580 192717 221485 254442 292427

Sale of Gas / anum (in M3) 686473 1013859 1216631 1457946 1749535 2010960 2312604 2657819 3053308 3509125

Selling Price of Gas / M3 19.14Rs. 20.10Rs. 21.10Rs. 22.16Rs. 23.26Rs. 24.43Rs. 25.65Rs. 26.93Rs. 28.28Rs. 29.69Rs.

Total Revenue 13,139,090 20,375,524 25,673,161 32,303,626 40,702,568 49,123,789 59,316,976 71,580,116 86,342,950 104,194,426

Sales Tax @ 15% 2.50Rs. 2.62Rs. 2.75Rs. 2.89Rs. 3.04Rs. 3.19Rs. 3.35Rs. 3.51Rs. 3.69Rs. 3.87Rs.

Sales Tax Amount 1,714,651Rs. 2,659,006Rs. 3,350,347Rs. 4,215,623Rs. 5,311,685Rs. 6,410,655Rs. 7,740,865Rs. 9,341,205Rs. 11,267,755Rs. 13,597,373Rs.

9.31 Cubic Meter



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99..66 CCoosstt ooff SSaalleess

Cost of Sales

Rate of Gas 6.50Rs. /Cubic MeterConsumption of Electricity 0.186 KW /Cubic MeterRate of Electricity 6.92Rs. /KWHrMaintenance 0.25Rs. /Cubic MeterAnnual Increase 10%

Year 1 Year 2 Year 3 Year 4 Year 5 Year6 Year 7 Year 8 Year 9 Year 10No. of Cars / day 202 Cars 303 Cars 363 Cars 435 Cars 522 Cars 600 Cars 690 Cars 793 Cars 911 Cars 1047 Cars

Annual Gas Sold (in M3) 686,473 1,013,859 1,216,631 1,457,946 1,749,535 2,010,960 2,312,604 2,657,819 3,053,308 3,509,125 Electricity Consumed in KWH 127,684 188,578 226,293 271,178 325,414 374,039 430,144 494,354 567,915 652,697 Rate of Gas 6.50Rs. 7.15Rs. 7.87Rs. 8.65Rs. 9.52Rs. 10.47Rs. 11.52Rs. 12.67Rs. 13.93Rs. 15.33Rs. Rate of Electricity 6.92Rs. 7.61Rs. 8.37Rs. 9.21Rs. 10.13Rs. 11.14Rs. 12.25Rs. 13.48Rs. 14.83Rs. 16.31Rs. Cost of SalesCost of Gas Sold 4,462,074 7,249,092 9,568,801 12,613,420 16,649,714 21,051,363 26,629,974 33,665,690 42,542,734 53,783,169 Cost of Electricity 883,062 1,434,624 1,893,704 2,496,246 3,295,045 4,166,149 5,270,178 6,662,575 8,419,377 10,643,904 Maintenance 171,618 253,465 304,158 364,487 437,384 502,740 578,151 664,455 763,327 877,281

Cost of Sales 5,516,754 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



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99..77 WWoorrkkiinngg CCaappiittaall

Working Capital1 2 3 4 5 6 7 8 9 10

Total No. of Days 360 Days

Current Assets Basis

Receivables Sales 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

Advances to Employees Payroll+Benefits 30 87,450 96,195 105,815 116,396 128,036 140,839 154,923 170,415 187,457 206,203 Stores & Spares Stock - - - - - - - - - - -

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 LiabilitiesAccrued 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



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99..88 RRaattiioo AAnnaallyyssiiss

Ratio Analysis


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%

Return on Investment (ROI) 5.01% 10.16% 11.50% 15.15% 17.84% 18.34% 17.35% 16.24% 15.14% 14.02%

Return on Equity (ROE) 9.21% 15.89% 15.58% 18.07% 19.25% 19.01% 18.01% 16.89% 15.78% 14.65%

Earning per Share (EPS) 1.05Rs. 2.39Rs. 3.78Rs. 5.33Rs. 6.98Rs. 8.52Rs. 9.84Rs. 11.10Rs. 12.30Rs. 13.38Rs.

Dividend per Share -Rs. -Rs. -Rs. -Rs. -Rs. -Rs. -Rs. -Rs. -Rs. -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) 44.44% 34.18% 23.80% 13.28% 3.95% 0.00% 0.00% 0.00% 0.00% 0.00%

Debt Equity 81.7% 53.5% 32.2% 15.8% 4.3% 0.0% 0.0% 0.0% 0.0% 0.0%

Interest Coverage Ratio 2.50 3.01 5.16 9.47 20.95 122.67 0.00 0.00 0.00 0.00



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10 REQUIREMENT FOR THE LICENSE



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28

Annexure 10 Requirement for the License



29

Petroleum Feasibility

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Transcript of Petroleum Feasibility