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Feasibility Report of

MTS Solar power generation


plant (pvt) Ltd.

SUBMITTED TO: Mr. JAVEED IQBAL

SUBMITTED BY:
Sidra nor 11
Aysha sahar 25
Lubna malik 48

M.COM 4TH ( FINANCE)

SESSION (2008-10)

DEPARTMENT OF COMMERCE
THE ISLAMIA UNIVERSITY OF
BAHAWALPUR
We Dedicate our Project

To our

“BELOVED PARENTS

To our Honorable Teacher

“Mr.JAVEED IQBAL”
TABLE OF CONTENTS

Page
Serial No. Items No.
1 Executive Summary 5
2 Main Body 8
2.1 Project Idea & Background of project 8
2.2 Opportunity Rationale 9
2.3 Project Parameters 9
2.4 Plant Capacity 10
2.5 Implementation 10
2.6 Geographical Level 10
2.7 Project Promoters 11
2.8 Corporate Setup 11
2.9 Project Capacity and Rationale 11
2.10 Key Success Factors 11
2.11 Strategic Recommendations 11
2.12 Industry Analysis 12
2.13 Production Process 14
2.14 Machinery Requirement 17
2.15 Human Resource Requirement 18
2.16 Project Parameters 19

3 Annexure 19
4 Site layout 37
Executive Summary

1.1 The Project. ‘MTS’ Solar Power Generation Plant (Pvt) Ltd.

1.2 Location Bahawalpur District.

1.3 Sponsors
This project has been financed with the financial
assistance of BOP. The equity contribution is made
by MTS and Son’s.

1.4 Distance from District Headquarter 8 k-m

1.5 Access

By Road Bahawalpur – Hasilpur Road.

By Rail Baghdad Railway station.

By Air Bahawalpur Airport.

1.6 Telecommunication Telecommunication facility is available.

1.7 Land It is proposed to install 5MW on the land


admeasuring about 20 Acre.

1.8 Land Characteristics Barren Land - Non Agricultural Land.

1.9 Type of Module Mounting Structure Fixed Structures, Earth Mounted


Grid Connected.

1.10 Type of PV Modules Considered for the offer ‘Crystalline’

1.11 Proposed Capacity 5 MWp

1.12 Material Requirement


Sun light is the basic material for our project.
And the ideal range of temperature is from
25’C to 30

1.13 Project Engineering


All the machineries are purchased from China,
Like Solar panels and invertors and all the
remaining things are easily available at locally.

1.14 Manpower
For this project there is the requirement of
plant and administration staff which is easily
available at local.

1.15 Implementation Stage


The project will be completed in Six month. Its
start date is 1-7-2010 and would be completed
on 31-12-2010.And the commercial production
is started in January 2011.
1.16 Project Parameters

Cost of the project


Fixed cost Rs. 766,197,000
Net Working Capital 9 25,000
Total Cost 767, 122,000

Financial Plan
Bank loan 70% Rs: 536,985,400
Equity 30% 230,136,600
Total 767,122,000

Operating Results

2011 (in ,000) 2012(in ,000) 2013(in ,000)


Sales
219000 232688 246375

G. Profit
191159 204265 217283

Op. Profit
186355 198740 210927
PBT
109702 123661 137661
Net Profit
67100 75588 84101

Financial Position of the Company

2011 2012 2013


Current Assets
119727 196668 280425
Current Liabilities
55960 63287 70871
Fixed assets
757472 749847 742222
Long term debt 524735 510770 494850

1.9 Terms and Conditions


.

• Sponsor contribution will be 30%.

• Land will be transferred to company name.

• BOP will pledge land as security.

• Final contract with material, machinery


supplier and civil work need to show to BOP

• Loan is to be repaid in 10 Years.

2.1 Project Idea:

BACKGROUND OF THE PROJECT

The Government of Pakistan’s (GOP) Renewable Energy Policy 2006 emphasizes the
development of renewable and clean energy in the country. In fiscal year 2005-06,
Pakistan’s consumption of energy generated through renewable energy (RE) sources
stood at only 180-MW. Development of the power generation potential of existing RE
sources, solar, biogas, biomass, micro-hydel, and windmills, offers significant business
opportunities for American manufacturers and exporters. Due to in-country depletion of
conventional energy resources and an expanding gap between power demand and
supply, the development of RE sources in the country has gained force over the past 3-4
years. The GOP has decided to encourage and invest in the development of the
infrastructure necessary for power generation through RE sources through its Alternate
Energy Development Board (AEDB).

The goal is to have power generation from RE sources contribute approximately 10


percent of the country’s overall energy requirements by 2015. American companies
already dominate the foreign-owned portion of the local RE power generation market
with almost 25 percent of market share, followed by European and Chinese companies,
which have 10 percent and 5 percent of market share respectively. The remaining 60
percent of current RE power generation is in the hands of domestic companies. AEDB
and the Pakistan Council of Renewable Energy Technologies (PCRET) are playing a
major role in promoting the development of infrastructure for RE power generation in
Pakistan.
Large multi-megawatt PV plants, approximately to 50 MW, are now in operation in the
world. Solar Photovoltaic (PV) is known to be an important energy source for developing
countries like Pakistan. Its importance is now being realized even by developed
countries in view of its renewable and environment friendly character. In our country
also, optimum utilization of solar energy could not only lead to savings in conventional
energy but also result in many indirect benefits. But till now solar technology is
expensive compared to other technology and significant financial assistance from
government is needed to the developers and operators of new plants.

In view of this, the Ministry of New & Renewable Energy Sources has been promoting
electricity generation from Solar PV in Mega-Watt level. These projects are covered
under the Grid Interactive Solar PV Power Generation Projects of Ministry of New &
Renewable Energy Sources. The Ministry initiated the programme to establish as a
viable and environment friendly electricity generation option.

2.2 Opportunity Rationale:

Power generation from solar has many benefits which are as follows:

• Power from the sun is clean, silent, limitless and free.


• Photovoltaic process releases no CO2, SO2 or NO2 gases which are normally
associated with burning finite fossil fuel reserves and don’t contribute to global
warming.
• Photovoltaic are now a proven technology which is inherently safe as opposed to
other fossil fuel based electricity generating technologies.
• No fuel is required for generation, so fuel cost of power generation is zero.
• Increase the grid reliability i.e., voltage and frequency.
• Solar Powered Grid Connect Plants can act as tail end energizers, which in turn
reduces the transmission and distribution losses.
• Provides a potential revenue source in a diverse energy range.
• Assists in meeting renewable portfolio standards goal.
• Generation of electricity from Solar PV is totally free of Green House Gas
emission.
Market Entry Timing

This is the best time to enter in the market because there is a short fall of electricity in
the country, so presently it has a high demand.

2.3 Project Parameters

Initial Capacity 80%


Human Resource 28
Machinery Foreign (China) & Local (Advance electronics)
Location Bahawalpur.

2.4 Plant Capacity:

The proposed 5MWp solar power plant project will generate electricity from non-
conventional sources. The project will use “polycrystalline” technology for the first time
in the state for producing power by solar energy. This project will generate safe, reliable
electricity in an environmentally friendly way.

2.5 Implementation:

The project will be implemented as under:


Loan sanctioned in July 2010.
All formalities will be completed in July.
Civil work would be made in 5 months.
Machinery would be available and installed in 1 month.
Trail Production would be started in December 2010.
Commercial production would be started in January 2011.

2.6 Geographical Level:

We are operating in Southern Punjab distt. Bahawalpur. This is the perfect choice for our
project because here the weather conditions are good and ideal temperature for this
project is 25’c which is available whole the year. And this city is situated near the
Cholistan Desert.
Project Coverage:

The project will impact positively to our economy while contributing in production in
electricity industry which would increase our GDP. And it is beneficial for our city as well
as our country because due to this plant we meet the demand and short fall of electricity
in our city. It would provide employment opportunity to the people which ultimately
increase their living standard.

2.7 Project Promoters:

Muhammad Tufail Sukhera and Son’s are well known businessman of this city and also
they have a good knowledge of solar energy. And they are working on solar system for
last 5 years. They initially promoted this project.

2.8 Corporate Setup:

MTS solar power generation Pvt. Ltd will be a Private limited company. 30% of the cost
will be provided by sponsors. MTS solar power generation Pvt. Ltd have best rational
and technically equipped corporate managers which have the ability to run effectively
and efficiently.

2.9 Project Capacity

This plant is installed at 5MW. This solar power plant produces 18250000 Kwh
electricity in a year at its full capacity. It can be computed as follows:
(5000 Kw*10 hrs*365 days).

2.10 Key Success Factors

 There is a high demand of this project in this city.

 The use of solar energy is environment friendly.

 It gives long term benefit.


 Using solar energy is more beneficial for producing electricity as compare to
produce electricity from hydel resources, because it takes less time to produce
electricity

2.11 Strategic Recommendations

Initially, the electricity is supply to the near by areas. The company will later expand into
other cities through an agreement with WAPDA that we use their supply system or we
sell our electricity directly to the house holds.

2.12 INDUSTRY ANALYSIS:

As we analyze the industry, we see there is a huge demand of these kinds of projects at
present and in future to fulfill the demand and supply gap of electricity in the country.

2.12.1 World Scenario

It was estimated that in 2005, 86% of primary energy production in the world came from
burning fossil fuels, with the remaining non-fossil sources being hydroelectric 6.3%,
nuclear 6.0%, and renewable energy sources, i.e. geothermal, solar, wind, biomass and
wastes contributed only 0.9%.

Some Leading Countries which are working on solar energy:

• France
• China
• Greece
• America
• Italy
• European countries
• India

2.12.2 Scenario in Pakistan

For about a year now, Pakistan is facing the worst energy crisis of his history. If on one
hand, the increase in the oil prices at the world level is severely affecting the common
masses, on the other hand, the shortage of electricity is creating disorder in the country.
Beside others, one important reason that is advocated for this shortage is the rise in
electricity demand due to increase in production as well as rise in household income.
Pakistan covers 796,095 square kilometers of land between latitudes 24° and 36° north
and longitudes 61° and 76° east. At present, it faces serious energy problems:
95 per cent of its electricity generation comes from hydropower, which becomes less
productive during the driest, hottest months of the year and cannot keep pace with the
sharp rise in energy demand. Also, about 70 per cent of the populations live in some
50,000 villages dispersed around the country. Many of these villages are far from the
main transmission lines of the national grid and, because of their relatively small
populations; it is usually not economically viable to connect these villages to the grid.
Solar energy, on the other hand, has excellent potential in areas of Pakistan that
receive high levels of solar radiation throughout the year. Every day, for example, the
country receives an average of about 19 mega joules per square meter of solar
energy. Solar energy systems have already been developed and tested, and they
should now be adopted extensively as a way of supporting the economy of the country
and improving the living standards of its people. Not only can solar systems meet basic
needs of rural areas, but they can also reduce the pressure on conventional energy
sources in urban areas, leaving more of these valuable resources for other domestic and
industrial needs.
2.12.3 Current Industry Structure at Bahawalpur

In Bahawalpur division, a lot of work is being done on solar projects and at present,
there are two large projects are in pipe line that are,

1. Solar power generation plant in Islamia University BWP.


2. A solar light set up is going to be installed in the Garrison park cantt
BWP.
And now MTS & son’s are going to be started a 5MW solar power generation plant in
BWP city to meet the demand of electricity in this city. Due to this people are
encouraged to set up industries in this city and also government of Pakistan will do
something in this regards, because government support is needed in this kind of
projects.

2.13 PRODUCTION PROCESS


Production Process Flow
How a PV System Works

A PV array produces power when exposed to sunlight, a number of other components


are required to properly conduct, control, convert, distribute, and store the energy
produced by the array. Depending on the functional and operational requirements of the
system, the specific components required, and may include major components such as
a DC-AC power inverter, battery bank, system and battery controller, auxiliary energy
sources and sometimes the specified electrical load (appliances).

2.14 MACHINERY REQUIREMENT

Machinery Details,
• 2500 Solar panel (Poly crystalline) PV module of 200w each.
• 5000 Invertors (1 KVA)
• Cables and fixing structure and miscellaneous.

Solar system is purchased from China because we need it in bulk and China
manufactured high quality solar panels and all relevant material. And the other
remaining things are easily available at locally.

Reference:
• www.alibaba.com
• www.google.com
• Advance electronics ( Mr. Afzal )

Cleaning and maintenance of Solar Panels

In developed countries, Solar PV module Panels dust cleaning system is widely used in
solar photovoltaic power station. Trees leaves, bird poop and airborne particles (from dirt
and pollen) make solar panels dirty, dirty panels causes power loss. Dirt and waste
reduce the ability of the solar array to perform at full capacity. The potential energy loss
depends on the level of fifth accumulated on solar panels. Energy loss could reach 25
percent of generating power. Cleaning system for solar panels will improve the
photovoltaic conversion rate, keep the generation capacity steady all over the year
capacity. Panels can ve cleaned either manually or mechanically.

In Mechanical cleaning system mainly, water sprinkler system is used, but it needs lot of
power to spray water in wide module area, Manual system need manpower for cleaning.
Though mechanical dust cleaning system are efficient than manual system. This solar
PV plant manual cleaning is proposed because manual labor cost is less compared to
total supplementary power cost.

So, the maintenance and cleaning cost of solar panel is 1% of the cost of solar
panels that is Rs: 2500000

2.15 HUMAN RESOURCE REQUIREMENT


PLANT MANAGER
2 NO

OPERATION MANAGER MAINTENANCE & ADMINISTRATION


(5 NO.) MANAGER (5 NO.)

ADMIN. STAFF ADMIN. STAFF


(3 NOS.) (3 NOS.)

CONTROL ROOM TECHNICIAN ELECTRICAL


TECHNICIAN (3 NOS.) TECHNICIAN
(3 NOS. ) (4 NOS.)

TOTAL O&M STAFF = 28 NOS.

2.16 Estimated Cost of Project


Financial Plan
Bank loan 70% Rs: 536,985,400
Equity 30% 230,136,600
Total 767,122,000

All relevant Annexure of MTS


solar power generation plant
(pvt) Ltd

Annexure-1
MTS SOLAR POWER PLANT
Estimated cost of the Land

Area in Unit cost Rs:("000")


Sr.No. Description Acres (000) Total cost

1 Land 20 2500 50000


Registration & Legal Requirements 1% of cost of
2 land 20 25 500

3 Stamp Duty 2% of cost of land 20 50 1000

4 District council fee 1% of cost of land 20 25 500

5 Capital Value tax is 4% of cost of land 20 100 2000

Total cost of land 2700 54000


Annexure- 2

MTS SOLAR POWER PLANT


Estimated Cost of Civil Works
Plinth
Sr.No: Description Area B.P E.I P.H Total Amount (Rs:)
Officer Residence
1 1650 Sft 891 44 44 979/- 16,15,350/-
B/Wall
2 - - - -
1650x10/100 = 165
165 Rft - - - 883/- 1,45,695/-
5x990 = 4950 1020/
3 4950 932 44 44 - 50,49,000/
B/Wall
4 - - - -
4950x10/100 = 495
495 - - - 883/- 4,37,085/-
Solar Plant Room
5 - - - -
36x24 = 864 Sft
864 Sft 827 44 44 915 7,90,560/-
Control Buildings =
1800 Sft
6 1800 Sft 827 44 44 915 16,47,000/
Administration Buildings
= 900 Sft
7 900 Sft 827 44 44 915 8,23,500/-
Boundary Wall
8 - - - -
2054 Sft
2054 Sft 883 - - 883 18,13,682/
Gate and Gate Pillars
9 1No 54000/- - - - - 54,000/-
-
- - - - - 12,375,872/-
10 Add 15% External Development road Sewerage etc 99,25,413/- 14,88,812/-
11 Add Wapda Connection Transformer and Straw etc = 10,00,000/-
12 Contingency (5%) 743,234/-
Total cost of civil works 15,607,918/-
Annexure- 3
MTS SOLAR POWER PLANT
Estimated Cost of Plant and Machinery

Rs: Rs:
("000") ("000")
Total
Sr.No. Description Qty Unit Cost Cost
1 Solar panel (poly Crystaline-200w) 2500 100 250000
2 Invertors (1 KVA) 5000 60 300000
3 Cables/ Fixing structure 2500 40 100000
4 Contingency (1%) - - 6500
Installation & erection cost is included in it. - - -
Total Cost of Machinery 656500

Annexure- 4
MTS SOLAR POWER PLANT
Pre-Production expenses

Sr. No. Description Rs. ("000")


1 Registration Charges 500
2 Sales Tax Registration Charges 300
3 Consultancy & Report Preparation Charges 200
4 Printing & Stationary 30
5 Conveyance Charges 40
6 Telephone & Postage 30

Total Pre-prodction Expenses 1100


Annexure- 5
MTS SOLAR POWER PLANT
Estimated Cost of Project

Rs:("000")
LCY
Sr.No. Description (000) FCY Total cost
1 Land 54,000 - 54,000
2 Building 15,608 - 15,608
3 Machinery 656,500 - 656,500
4 Furniture and Fixture 230 - 230
5 Office Equipment 170 - 170
6 Pre-operating expenses 1,100 - 1,100
7 Vehicle 1,000 - 1,000
8 Interest during construction @ 7% - - 37,589
Estimated fixed cost - - 766,197
Add: Net Initial Net Working Capital - - 925
Total Estimated Cost of Project - - 767,122

Annexure- 5 (a)
MTS SOLAR POWER PLANT
Estimated cost of Furniture & Fixture

Rs: ("000") Rs: ("000")

Sr.No. Description Qty Unit Cost Total Cost

1 Almirah 5 20 100

2 Tables 10 10 100

3 Chairs 30 1 30

Total - - 230
Annexure- 5 (b)
MTS SOLAR POWER PLANT
Estimated cost of Vehicle

Rs: ("000") Rs: ("000")

Sr.No. Description Qty Unit Cost Total Cost

1 Sheroz Pick up 1 1000 1000

Total - - 1000

Annexure- 5 (c)
MTS SOLAR POWER PLANT
Estimated cost of office equipment

Rs: ("000") Rs: ("000")


Sr.No. Description Qty Unit Cost Total Cost
1 Computer 5 20 100
2 Printer 2 10 20
3 Type writer 2 10 20
4 Charger controller 2 15 30

Total - - 170

Annexure- 6
MTS SOLAR POWER PLANT
Initial Net Working Capital Requirement

Descriptions Rs. "000"

A. Current Assets:

1 Advances, & Prepayments 350


2 Stores & Spares 300
3 Cash and bank balance 500

Total Current Assets 1150

B. Current liabilities:

1 Less: Bank borrowing 75% of stores & spares 225

Initial Net Working Capital 925

Annexure- 7
MTS SOLAR POWER PLANT
Depreciation Schedule of Fixed Assets

Rs. ("000")
Sr. No. Description T.Cost Rs. Dep.
1 Plant & Machinery @1% 656,500 6565
2 Building @ 5% 15,608 780
3 Furniture & Fixture @ 20% 230 46
4 Office Equipment @ 20% 170 34
5 Vehicles @ 20% 1,000 200
Total 673,508 7,625

Note: - Depreciation will be constant over the life of assets.

Annexure- 8
MTS SOLAR POWER PLANT
Manufacturing Overhead Cost

Rs ("000")
Fixed Cost:

Depreciation 7,625
Insurance @ 2% of the solar system and spare parts 13006
650300*2%=13006
Maintenance :

Maintenance of solar pv module @ 1% of cost of solar panel 2500


Maintenance of Building @ 5% of Cost of Building 780
Maintenance of Vehicles @ 5% of Cost of Vehicles 50

Total Fixed Cost 23,961

Year ending Manufacturing Overheads as per Different Capacities:


Years
2011 2012 2013
Description Rupees ("000")
80% 85% 90%
Fixed Cost 23,961 23,961 23,961

Total Cost of Manufacturing


Overheads 23,961 23,961 23,961

Annexure- 9
MTS SOLAR POWER PLANT
Sales Revenue

Rupees (000)
Unit price per
Description Kwh 80% 85% 90%
2011 2012 2013
5 MW solar power plant produce 18250000
(A) Kwh RS: 15 219000 232688 246375
electricity in a year at its full capacity. - - - -
That is computed as (5000 Kw*10 hrs*365
days) - - - -
- - - -
Total Sales - 219000 232688 246375
Assumptions:
1. Tariff rate is fixed for 20 years.

Annexure- 10
MTS SOLAR POWER PLANT
Estimated income Statement

Rupees (000)

Year ending December 31: 80% 85% 90%

2011 2012 2012

sales 219000 232688 246375

Less: cost of sales:-

Raw material - - -

Labor 3880 4462 5131

Manufacturing Overhead 23,961 23,961 23,961

Cost of sales 27,841 28,423 29,092


Gross profit 191159 204265 217283

Operating expenses:

Administrative expenses 3209 3690 4245

General expenses 1595 1835 2111

Total operating expenses 4804 5525 6356

Operating profit 186355 198740 210927

Other expenses:

Financial charges on:

Long term loan @ 14% 75178 73463 71508

Bank borrowing - - -

Amortization of pre-production expenses 367 367 367

Total other expenses 75545 73830 71875

Profit Before Tax and Worker's Fund 110810 124910 139052

Worker's fund @ 1% 1108 1249 1391

Profit/(Loss) Before Tax 109702 123661 137661

Tax provision @ 40% 42602 48073 53560

Net Profit 67100 75588 84101

Annexure- 11
MTS SOLAR POWER PLANT
Balance Sheet
End of
Const. Operating Years
Year ending Dec 31 2,010 2,011 2,012 2,013
Assets: RS: (000)
Current Assets:
Cash and Bank Balance 275 71556 96729 126568
Short term investment - 47,521 99289 153207

Stores & Spares 300 300 300 300

Advances and Prepayments 350 350 350 350

Total current assets 925 119,727 196,668 280,425

Fixed Assets:
Fixed Assets at cost 765,097 765,097 765,097 765,097
Less: accumulated
Depriciation - 7625 15,250 22,875
Fixed Assets Net 765,097 757,472 749,847 742,222

Intangibles 1100 733 367 -


Total Assets 767,122 877,932 946,882 1,022,647
Current Liabilities:

Taxes payables - 42602 48073 53560

Worker's Fund payable - 1108 1249 1391


Current Maturity of Long term
debt - 12,250 13,965 15920

Total Current Liabilities - 55,960 63,287 70,871


Long Term Debts:
BOP Loan 536,985 524,735 510,770 494,850
Total Long Term Debt 536,985 524,735 510,770 494,850
Equity:
Capital 230,137 230,137 230,137 230,137

Retained Earnings - 67100 142688 226789


Total Equity 230,137 297,237 372,825 456,926

Total Debt and Equity 767,122 877,932 946,882 1,022,647

Annexure- 12
MTS SOLAR POWER PLANT
Cash Flow Statement
End of
Construction Operating Years
Years Ending Dec 31 2,010 2,011 2,012 2,013
Sources of Funds Rs 000 Rs 000 Rs 000

Operating profit - 186,355 198,740 210,927

Add: Depreciation - 7625 7625 7625

Total funds from operation - 193,980 206,365 218,552


Other sources:

BOP Loan 536,985 - - -

Paid-Up Capital 230,137 - - -


Total sources of funds 767,122 193,980 206,365 218,552
Application of funds

Investment in Fixed Assets 727,508 - - -

Preproduction expenses 1100 - - -

Interest During Const. 37,589 - - -


Repayment of :

BOP Loan - - 12,250 13,965


Financial Charges on:

Long Term loans - 75178 73463 71508


Payment of :

Taxes - - 42602 48073

Worker's Fund - - 1108 1249


Increase in current asset (other than
cash) 650 - - -
47, 51, 53,
Short term investments - 521 769 918
Total Applications 766,847 122,699 181,192 188,713
Cash Surplus 275 71,281 25,173 29,839

Cash at Beginning of Year - 275 71556 96729


Cash at end of Year 275 71,556 96,729 126,568
Annexure- 13
MTS SOLAR POWER PLANT
Administrative expenses
Rs: (000)
No. of
Sr.No Designation Employees Salary/Month Annual Salary
Rupees(''000'')
1 Managing Director 2 50 1200
2 Accountant 3 15 540
3 Clerk 2 12 288
4 Chowkider 2 6 144
5 Peon/sweeper 2 5 120
- - -
Total 11 88 2292
Add: Fringe Benefits @ 40% - - 917
Total Cost of Administrative Staff 3209

Year Wise Administrative Salaries:

Rupees(''000'')
No. of
Sr.No Description Employees 2011 2012 2013
1 Managing Director 2 1200 1380 1587
2 Accountant 3 540 621 714
3 Clerk 2 288 331 381
4 Chowkider 2 144 166 191
5 Peon/Sweeper 2 120 138 159
- - - -
Total 11 2292 2636 3032
Add: Fringe Benefits @ 40% - 917 1054 1213
Total Administrative Salaries per Year 3209 3690 4245

Assumptions:
Administrative salaries will increase 15% every year.

General Expenses
Sr.No Description Year Exp.(''000'')
1 Travelling Expenses 200
2 Printing &stationary 70
3 Telephone,Telex,Postage 500
4 Rent, Rates and Taxes 400
5 Entertainment 50
6 Legal & Audit 175
7 Miscellaneous 200
Total 1595

General Expenses:

Sr.No Description Rupees(''000'')


1 Travelling Expenses 200 230 265
2 Printing &stationary 70 81 93
3 Telephone,Telex,Postage 500 575 661
4 Rent, Rates and Taxes 400 460 529
5 Entertainment 50 58 67
6 Legal & Audit 175 201 231
7 Miscellaneous 200 230 265
Total 1595 1835 2111

Annexure- 14
MTS SOLAR POWER PLANT
Estimated labor cost
Assumptions:
1. Direct labor will increase every year @ 15%

Labor cost Rs: (000)


Total
No. of Annual
Sr.No Description Employees Salary/Month/Worker Salary
1 Plant Manager 2 20 480
2 Operation Manager 5 18 1080
3 Control room Technician 3 10 360
4 Electric Technicians 7 9 756
Total 17 57 2676
Add: Fringe
Benefit (45% of
basic salary) 1204
Total Cost of Plant
Labor 3880

Year wise wages of Labor:

Years

Sr.No Description 2011 2012 2013

Rs(''000'')

1 Plant labor 3880 4462 5131

Total cost of labor 3880 4462 5131

Annexure- 15
MTS SOLAR POWER PLANT
BREAK-EVEN ANALYSIS
Commercial Break-even in the first Operating
Year:

Sales from Operations: 219,000

( At 80% Capacity )
( Rs. In '000' )
Fixed
Items Variable Cost Cost Total Cost

Labor 3,880 - 3,880

Manufacturing Overheads - 23,961 23,961

Administrative & General Expenses - 4,804 4,804

Interest / Mark-Up Expenses - 75,178 75,178


Amortization of pre-production expenses 367 367
Total: 3,880 104,310 108,190

104,310

Break-Even Point: 219,000 - 3,880 X 80%

Break-Even Point: 39%


Commercial Break-even in the third Operating
Year:

( At 90% Capacity )
(Rs. In '000' )
Variable Fixed
Items Cost Cost Total Cost

Labor 5,131 - 5,131

Manufacturing Overheads - 23,961 23,961

Administrative & General Expenses - 6,356 6,356

Interest / Mark-Up Expenses - 71,508 71,508


Worker's Participation Fund 1,391 - 1,391
13,96
Debt Payment - 5 13,965

Tax - 53,560 53,560


Total: 6,522 169,350 175,872

Sales from Operations: 246,375

169,350

Break-Even Point: 246,375 - 6,522 X 90%

Break-Even Point: 63.54%


Annexure-16

MTS Solar Power plant (Pvt) Ltd.


Calculation of Internal Financial Rate of Return

Net Net Cash


Capital Operating Worker's Cash Inflow
Years Outlay Profit Depreciation Fund Taxes Return (Outflow)
(
766,847
- 766,847 - - - - - )
1 - 186,355 7,625 - - 193,980 193,980
2 - 198,740 7,625 1,108 42,602 162,655 162,655
3 - 210,927 7,625 1,249 48,073 169,230 169,230
4 - 210,927 7,625 1,391 53,560 163,601 163,601
5 - 210,927 7,625 1,391 53,560 163,601 163,601
6 1,400 210,927 7,625 1,391 53,560 163,601 162,201
7 - 210,927 7,625 1,391 53,560 163,601 163,601
8 - 210,927 7,625 1,391 53,560 163,601 163,601
9 - 210,927 7,625 1,391 53,560 163,601 163,601
10 - 210,927 7,625 1,391 53,560 163,601 163,601
11 1,400 210,927 7,625 1,391 53,560 163,601 162,201
12 - 210,927 7,625 1,391 53,560 163,601 163,601
13 - 210,927 7,625 1,391 53,560 163,601 163,601
14 - 210,927 7,625 1,391 53,560 163,601 163,601
15 - 210,927 7,625 1,391 53,560 163,601 163,601
16 1400 210,927 7,625 1,391 53,560 163,601 162201
17 - 210,927 7,625 1,391 53,560 163,601 163601
18 - 210,927 7,625 1,391 53,560 163,601 163601
19 - 210,927 7,625 1,391 53,560 163,601 163601
20 210,927 7,625 2,782 107,120

IFRR

Assumptions:-

Calculation of IFRR for the project has been carried out under the following
assumptions:-

1. The economic life of the project would be 20 years.


2. The entire capital outlay would be incurred one year prior to the Commencement of
commercial operations.

3. Motor Vehicles and operating equipment would be replaced after every five years.

4. Salvage value at the end of the life of the project represents recovery of working
capital, book value of buildings, office furniture and fixtures and original value of land.

Annexure - 17
MTS solar power plant
Loan Repayment Schedule

Opening (000) Closing


Years Balance Interest@14% Principle Payment Balance
1 536,985 75,178 12,250 87,428 524,735
2 524,735 73,463 13,965 87,428 510,770
3 510,770 71,508 15,920 87,428 494,850
4 494,850 69,279 18,149 87,428 476,701
5 476,701 66,738 20,690 87,428 456,011
6 456,011 63,842 23,586 87,428 432,425
7 432,425 60,540 26,888 87,428 405,537
8 405,537 56775 30,653 87,428 374,884
9 374,884 52484 34,944 87,428 339,940
10 339,940 47592 39,836 87,428 300,104
11 300,104 42015 45,413 87,428 254,691
12 254691 35657 51,771 87,428 202,920
13 202920 28409 59,019 87,428 143,901
14 143901 20146 67,282 87,428 76,619
15 76619 10727 76701 87,428 -