“AL-KHALIQUE” CNG Filling Station

Project Appraisal

AL-KHALIQUE CNG Filling Station

Feasibility Report on

Course Instructor:

Mr. Javaid Iqbal

Group Members:

Jawad Junaid (15) Abdul Samad (13) Muhammad Bilal (41)

Program: Session:

MSC A&F (Afternoon) 2008-2010 Department of Commerce The Islamia University Bahawalpur

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“AL-KHALIQUE” CNG Filling Station

Project Appraisal

“AL-KHALIQUE” CNG Filling Station Near Sutlej Toll Plaza Multan Road BAHAWALPUR

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Dedication
We dedicate this report to that personality to whom every Muslim wants to idealize. That personality is HAZRAT MUHAMMAD MUSTAFA (PBUH). He (PBUH) was a role model in every field of life. He (PBUH) tells us how to work hard to achieve something.

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Preface
Department Of Commerce has always tried to make its students be familiar with the different techniques in the field of Project Appraisal so that they can understand & present the concepts of Project Appraisal in the today’s world of progress & development. The importance of principal work almost exists in every professional field. Practical knowledge makes man a technical person who enables to do every work efficiently regarding his profession. The very distributive feature of the degree of Business Administration is that it stresses more on the practical aspects of study especially the 3rd semester. Our teachers have extremely realized this importance & they use all the tact’s to expose us to the real field circumstances. Project Appraisal has become a common phenomenon now-adays. We have tried our level best to fulfill the requirements of the topic. Every effort has been made to incorporate all the available means of information to make this assignment comprehensive. We tried our best to accomplish our work.

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ACKNOWLEDGEMENT
 Special thanks to Almighty Allah, creator of the creative minds.

We pay abundant thanks to our encouraging teacher & instructor Mr. JAVAID IQBAL for enlightens our minds with the rich information about the topic. Special thanks are extended for those who help us in printing & composing the research.

We are especially thankful to Mr. Tayyab Bashir (M.D Sultan

Bahoo CNG Station) and Mr. Saeed Ahmed (Manager Sultan Bahoo CNG Station) Who provided us the necessary information and show us the process of conversion of natural gas into compressed natural gas (CNG).

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Our Mission Statement

Our mission is to provide the purify compressed natural gas (CNG). We will provide 24 hours service to our customers so that we can facilitate them according to their requirement. We have also tuc shop and also tire service shop at our CNG station.

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TABLE OF CONTENTS
SERIAL #. PAGE #. DESCRIPTION
09 03 14 15 16 17 19 20 28 30 32 33 46 48 49

1. Executive Summary 2. Implementation 3. The Project Introduction 4. The Project Site & Location 5. NOCs16

6. Market Analysis 7. Technical Analysis 8. 9. Local Equipment Flow Diagram

10. Personal Analysis 11. Assumptions 12. Annexure 13. 14. 15. Swot Analysis Recommendation Conclusion

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“AL-KHALIQUE”CNG Filling Station Near Sutlej Toll Plaza Multan Road Bahawalpur

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EXECUTIVE SUMMARY
NAME OF THE PROJECT: NATURE OF INDUSTRY: CORPORATE STATUS: LOCATION OF PROJECT ADDRESS AL-KHALIQUE CNG STATION CNG STATION A NEW PROJECT PARTNERSHIP FIRM BAHAWALPUR NEAR SATLEJ TOLL PLAZA MULTAN ROAD BAHAWALPUR

We are the fresh and energetic students of MSC A&F. We are going to start a new business. We have selected the business of CNG Station. We have selected this business because there is so much potential in this business. Especially today’s there is increasing number of cars. This is also a challenging project. This will be the test of our hidden qualities. AL-KHALIQUE CNG STATION registered firm established with the objective of installing a CNG Re-Fuelling Station at Sutlej Toll Plaza, district Bahawalpur. The firm is intending to start its operations initially with one station in Bahawalpur. The firm has plans to expand its network later to in other cities. CNG is environmentally friendly fuel since it unleaded and releases less than 10% carbon mono oxide as compared to petrol and is an indigenous fuel commonly known as natural gas and Sui gas. Natural gas is compared to high pressure for storage, for this purpose, a compressor and storage facility is installed, the vehicle to run on CNG, it is suitably modified to have a vehicle storage cylinder, high pressure has Department Of Commerce 10 IUB

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piping and filling system and other items like pressure regulator, pressure has relief value, solenoid switch etc.

We are going to produce only one product i.e. CNG. We are not producing any other product. We are following the single product approach. So the only problem we have to face is the production problem. Growth of sale does not matter. At initial stage we will be producing at 75% capacity. We purchased our plant from abroad and as well as from local. Plant reached at site at January 1, 2010. Our plant installed on March 1st 2010. It started its trial run on March 2010. It started its commercial operation on January 1st 2011. The financial ratios of our company are increasing. Its means that our company is prosper day by day. So the company is doing very well business and there is no chance of loss.

Estimated cost of project (Rs in “000”) = Fixed cost Initial Working Capital Total Cost Means of Finance: There are two types of means of finance. One is from our own resources and other is from taking debt from Bank. The ratio is of debt and equity is of 60:40
MEANS OF FINANCE Debt Habib Bank Ltd TOTAL DEBT: Equity - Paid-up Capital (Sponsors) TOTAL EQUITY TOTAL DEBT & EQUITY

45408 5859 51260

30760

30760 30760

20507 20507 51260

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DEBT : EQUITY RATIO SPONSORS' STAKE

60 : 40 40%

Name of lender: Our name of lender is Habib Bank Ltd which will provide us the entire loan which we need for the completion of our project. The interest rate of the Bank is 18%. Name of sponsors:
The sponsors of the project are professionally qualified and have valuable and extensive experience of business management regarding. They have got petrol pump & CNG and good trading contacts and market reputations in the city. The project faces not problems in terms of marketing its product. The sponsor’s experience would assist the firm in its smooth and profitable operation. The sponsors are financially sound and capable to contribute their part of the equity in the proposed scheme. The managing partner of the firm has vast experience in the managing of this industrial organization

SR.NO. 1. 2. 3.

NAME Jawad Junaid Abd-Ul- Samad M. Bilal

DESIGNATION Managing partner Partner Partner

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The detail of machinery is given below:
• • • • • • Compressor model skid Mounted Water Cooled W-Type Compressor High pressure Piping 3-line Priority fill Panel Spares Dispenser Storage Cylinder

Name of civil contractor :
The name of civil contractor is Mr. Naeem Ashraf Uppul. We hire the services of that contractor for constructing our building and pay him fee for his services.

Name of Machinery Supplier:
The name of machinery supplier is Mr. Matloob Ahmed. He arranged the machinery from the foreign and get his commission for his services. Address: 21 Bird wood road of jail road Lahore Punjab Pakistan

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IMPLEMENTAION PERIOD
The project is expected to be implemented within 6 months from the date of the submission of the proposal to the bank. The details of the activities along with time required are given as under:

TASK
Bank approval Purchase of land Construction of building Arrival of machinery at site Installation completed Trial run Commercial operation started

MONTHS
February March October November December December January 2010 2010 2010 2010 2010 2010 2011

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INTRODUCTION OF COMPANY
The company is doing partnership business. There are three sponsors of the company which are the partners of the company also. The company is doing legal business. Profit earned by the company is distributed among the members of the company. We are going to produce only one product i.e. CNG. We are not producing any other product. We are following the single product approach. Growth of sale does not matter. At initial stage we will be producing at 75% capacity. We purchased our plant from abroad and as well as from local. Plant reached at site at January 1, 2010. Our plant installed on March 1st 2010. It started its trial run on March 2010. It started its commercial operation on January 1st 2011. CNG stands for Compressed Natural Gas. It is one of the most viable alternatives to traditional fuel energy resources for the automotive industry. CNG is low in pollutants, high in calorific value and heat yield, economical and available in abundance globally The business of CNG filling station has marked its place in the country through growth during the last few years. This growth has opened up new opportunities and more CNG filling stations are being setup all over Pakistan. The prime reason for this is the low cost of the fuel. Along with that, CNG fuel is less hazardous to the environment as compared to the traditional petroleum fuel

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LOCATION OF THE PROJECT
The project is proposed to be setup near the Sutlej Toll Plaza Multan Road Bahawal Pur. The site enjoys the following advantages: • • • • • Easy availability of raw material Availability of communication facilities like telephone, telex, etc Access to main road, sources of power, water, fuel, etc. Availability of skilled and unskilled manpower. Free from other environmental hazards like water-logging, floods salinity, etc.

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NOCs Required For CNG Station
No Objection Certificate will be required from the following departments prior to the Commencement of the business: • • • • • • • • Concerned development authority of the city (Bahawalpur Development Authority) Traffic Engineering and Planning Authority (TEPA) Traffic Police (SSP) Department of Civil Defense National Highway Authority (NHA) Central Board of Revenue (CBR) Civil Administration-Tehsil Municipal Administration (TMA) Oil and Gas Regulatory Authority (OGRA)

No person can set up CNG station without first obtaining license from the Authority i.e. Oil and Gas Regulatory Authority Islamabad under Rule 6 of CNG (Production & Marketing) Rules, 1992. Initially OGRA issues provisional license for a period of 2 years for setting up CNG station. After obtaining provisional license from the authority, the licensee is supposed to start construction of the station and also obtain NOCs from the local authorities and a license from DEPARTMENT OF EXPLOSIVES on form B .

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MARKET ANALYSIS
The commercial application of CNG technology now forms an important element of Government’s petroleum policy, which is reflected in the efforts made by the government For installing so many CNG stations in the country and converting 600000 vehicles on CNG fueling system till February 2005.

Market Demand:
At present there are more than too many vehicles, which have been converted to CNG fuel. Due to the increasing prices of petroleum products, the trend of converting cars to CNG fueling system has been on a rise. However, there exist a large number of people who were reluctant to convert their vehicles from petrol to gas due to safety concerns. Recently, many car manufacturers have started manufacturing the cars with built-in CNG fueling system. This change has led to enhancing the confidence in the minds of the general public regarding the safety concerns, and now, more people are inclined towards purchasing these factory-fitted CNG fueling system cars.

Present Demand:
The present demand of CNG is very high because the cost of CNG is very cheep as compared to petroleum, diesel and LPG. This is also beneficial for the life of engine of vehicles so the people prefer the CNG. Now the transporters also converting their vehicles in to CNG vehicles because cost of CNG is very low and in this way they can earn high profits and engine of their vehicles also saves so the demand of CNG is increasing day by day. Now a day the demand of CNG is so high that there is supply and demand gap generated for CNG. The use of CNG in vehicles brings an added blessing that it is much less polluting than regular gasoline (petrol). The emissions coming out of CNG vehicles consist of water vapors and carbon monoxide (CO).

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With Pakistan going full ahead with making CNG as the primary fuel source for transport, one concern is that Pakistan is depleting its Natural Gas reserves faster than ever before.

Estimated demand during next five years:
It is estimated that the demand of CNG in next five years will be so high. The only reason is that now a days all vehicles are converted into CNG vehicles. The millions of vehicles are converted into CNG vehicles. So it is impossible that the demand of CNG I going to be end in next years.

Distribution channel:
No distribution channel is required for CNG. The customers come at CNG station and fill their cars with CNG. So no distribution channel is required.

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TECHNICAL ANALYSIS
The main machinery at CNG station is compressor. The technology involved in machinery is very advance and technical. Pakistan is not to advance to produce or manufacture the compressor because Pakistan has no technology to manufacture it so the whole technology involved is imported from the Canada because Canada is very advance in technology and manufacturing high standard of compressor. Dispensing machine also imported from Canada. Compressor imported from Canada is very good in its function. It contains two generators one is run by the natural gas and other is run by electricity. So that in case of absence of electricity or Sui gas other generated can be used. This compressor converts the Sui gas into CNG with the help of 3 way pipelines and cooling tower then this compressed natural gas is transferred to Dispensing machine to vehicles and system is control by Control panel. CNG has now become a major area of investment and is being actively promoted as alternative fuel across the entirety of the automotive industry in Pakistan. As a cheaper and environmentally friendly alternative, the shift to CNG has proved immensely popular, especially in light of the spiraling price of oil. With an exponentially growing market, there are growing challenges and potentials for growth arising as well. Being one of the pioneers of CNG sector in Pakistan.

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EQUIPMENTS AND FACILITIES
The proposed CNG station will comprise of following main facilities;  Compressors  Storage cascade  Dispensing point  Building & other civil works  Gas receiving & electricity connection.

List of LOCAL EQUIPMENTS
CNG stations the major component of equipment used is imported. But some locally available components are also used. Below is given a list of some such equipments and consumables. Lo CNG station

1-Buffer Suction vessel with Pressure gage and Safety relief valve 2-Blowdown Recovery with Pressure gage and Safety relief valve 3-MS pipes and fittings for Gas Inlet, Bleed gas and safety relief vent lines 4-Clamps for supporting low pressure, high pressure gas pipes 5-GI pipes with fittings for Water IN and OUT lines Department Of Commerce 21 IUB

“AL-KHALIQUE” CNG Filling Station 6-Water pump with motor 7-Cooling Tower 8-Air Compressor 9-Soft pipes (tubes) for air flow

Project Appraisal

10-Electric Cables for Main Compressor motor, Oil pump motor, Water pump Motor, Cooling Tower fan motor, Automation devices, Bare Panel emergency buttons, Earth plate copper strip 11-GI flexible pipes for insulation of cables 12-Pressure Gas Regulator to be installed between Buffer and Blow down vessel 13-NRV to be fitted between Buffer and Blow down vessel 14-Flexible Pipe for Gas Inlet 15-Ball valve for Gas Inlet

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Compressor:
Two compressors of 530 Nm/hr will be installed with appropriate storage cascades. Sequential and three ways penal priority installed in separate room will be operated from a control panel outside the compressor room.

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COLLING TOWER:
When the compressor run it produces heat which should be minimize. For this purpose we used cooling tower. Now the question arises how it work. Its working is very simple it rotate the water in this way heat evolve out and temperature minimize

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Electric Control Panel
Electric control panel is required to operate the gas compressor. This panel will be mounted in the control room. If there is any problem is occur in compressor and cooling tower then the electric control panel locate the error and in this way easily remove. .

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Storage Cascade
Storage cascades/cylinders are used to store the natural gas. In absence of light we can use the gas from the storage cascade. .

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Priority Panel
Priority Panel for Vehicle Priority During rush hours, the compressor is directly connected to the dispenser, bypassing then 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. Department Of Commerce 27 IUB

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Input Required
The main input for CNG is natural gas which is obtained from SNGPL. This is the main input for the CNG then electricity is also required to run the compressor. In the case when there is no electricity the diesel is also required to run generator , so that the supply of CNG in the vehicles will not stop. Department Of Commerce 28 IUB

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Some chemicals also used these chemicals include one type of acid and one type of base. These two used in the cooling tower to purify the gas.

Flow Diagram
Sui Gas Yellow Pipe Goes to the Filters TANK

Micro Filters For (Further Purification) Purificatio Regulators n Used for the Department Of Commerce 29 IUB STAGE 1 STAGE 2 STAGE 3 STAGE 4 Panel Priority Auto Adjustments Manually Banks Distributors the Cooler Enters the In Machines Cooling Process More Compressed Further CompressedDispenserComesCompressor Operators Vehicles Machine Room

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EXPLANATION:
The above is the chart that shows the brief process how GAS (SUI) moves from different processes and finally reaches the ultimate vehicle in the shape of compresses GAS. S First of all it enters into the FILTERS for purification purpose and this consists of two filters. And then it enters into a TANK and then again enters into the MICRO FILTER for further purification and finally enters into the main compressor room. Here it is operated in a two ways, manually and Auto control.

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After these it enters into the FOUR STAGE compressor machine for the purpose of COOLING. This is a complex stage and the main purpose of this machine is to just only compress the gas in order to make high pressure. In the next step, it moves to the Priority PANEL. From where it is filled into the GAS CYLINDERS and finally reaches the VEHICLES through the help of DISPENSORS.

PERSONAL Analysis
Management
The overall management and control of the firm will be entrusted with partners. The partnership will comprise of following partners. SR.NO. NAME 31 DESIGNATION IUB

Department Of Commerce

“AL-KHALIQUE” CNG Filling Station 1. 2. 4. Jawad Junaid Abdul Samad M. Bilal

Project Appraisal Managing partner Partner Partner

All of the promoters are the fresh Student of MSC A&F . The day to day running and operation of the project will be carried out by sponsoring partners with the help of team of professional. The team of professional will be hired for managing financial and technical aspect of the project. The team will consist of qualified and experienced personnel.

Requirement of Staff
Technical staff
For the well check and running of compressor a person is required which should have done the diploma in Electrical engineering. So that he can Department Of Commerce 32 IUB

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understand the working and function of compressor, and one helper is also required having diploma in the electrical engineering.

Non Technical Staff
There are ten or more persons required which should be metric. These staff required to operate the dispensing machine for fulfilling the gas into vehicles. Gas filling is so simple process and it is not a technical process so there is not need for a special staff, which should have some specific kind of diploma. One sweeper is also needed for the cleanness of the CNG station. And one security guard is also needed for security purpose.

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Assumptions
 We are taking 360 days a year  There will be no load shedding problem from august and we are starting from 1st July, 2010 and the load shedding will be for 3 hrs a day.  After 1 year there will be no load shedding in the year 2011  We are assuming a 15 % increase in wages every year.  Overheads are .5% of sales  Erection for improved machinery is 15%  Prices of the machinery will increase in the future  It is also assumed that the need of CNG will be increased in the future  Imported machinery will be purchased on loan from Habib Bank @18%.  We are using straight line method for depreciation.  Income tax will be charged at 35%.  The Debt to equity ratio will be 60:40respectively  There will be the business of CNG filling.  Other income is generated from the tuck shop, tire service shop and also from the oil exchange and vehicle service shop.  The company is earning most of its revenue from other income resource.  The cost and sale of CNG will be increase 5% each year.

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ANNEXURE
COST OF LAND
Area in Sr. No. 1 2 3 4 5 6 Land Registration 1% of cost of Land Stamp Duty 2% of Cost of Land District Council corporation Fee 1% of Cost of Land Development Charges 5% of Cost of Land CVT and TMO Fee 2% cost of Land Total Cost of Land Description Marlas 50 50 50 50 50 50 1% 2% 1% 5% 2% Rate in percentages Unit Cost 100,000 1,000 2,000 1,000 5,000 2,000 111,000 Rs ("000") Total Cost 5,000 50 100 50 250 100 5,550

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Cost of civil works
AL-KHALIQUE CNG Filling Station Estimated Cost of Civil Works 1marla = 272 Sq feet 50marlas = 136000 Sq feet

Type of Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Description Compresser Room Tire Shop Wash Rooms Electric panel room Mosque Manager room Account section Cost of Jumbo Lawn Generator Room Tuc shop Cyledrical room Store Fire section room Workshop area Main Canopy Front area Total Cost of Civil Works Building RCC RCC RCC RCC RCC RCC RCC Open area RCC RCC RCC RCC RCC RCC RCC Open area

Unit of Construction Square feet Square feet Square feet Square feet Square feet Square feet Square feet Square feet Square feet Square feet Square feet Square feet Square feet Square feet Square feet Square feet

Covered area 1500 200 100 500 800 600 400 2,500 500 400 1000 300 300 1000 2000 1500 13600

Rate Per Unit 1200 1200 1200 1200 1200 1200 1200 800 1200 1200 1200 1200 1200 1200 1200 800

Rs ("000") Total Cost 1800 240 120 600 960 720 480 2000 600 480 1200 360 360 1200 2400 1200 14,720

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Annexure - III AL-KHALIQUE CNG FILling Station Estimated Cost of Machinery Sr.No. 1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 Description Compressor Machine Dispensors Storage Cascade 3 Way High pressure Lines Control meter system Priority panel Cooling tower Oil filter + stainer Control panel Generator Water pump with motor (7.5 KW) Chemicals + oil MSV Fire extinguisher Contingency 5% Total Cost of Machinery Qty 1 3 40 3 1 1 1 2 1 2 2 1 3 6 Unit Cost 4,500,000 1,200,000 50,000 200,000 2,000,000 200,000 100,000 55,000 450,000 500,000 25,000 50,000 15,000 10,000 LCY FCY 4,500,000 3,600,000 ("000") Total cost 4,500 3,600 2,000 600 2,000 200 100 110 450 1,000 50 50 45 60 738 15,503

2,000,000 600,000 2,000,000 200,000 100,000 110,000 450,000 1,000,000 50,000 50,000 45,000 60,000 738000 4,953,000

10,550,000

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AL-KHALIQUE CNG Filling Station Estimated cost of the Project Sr.No. 1 2 3 4 5 6 8 9 10 Add: Description Land Building Machinery Installation & Erection 15% of Machinery Insurance 5% of Cost of Machinery Intrust during Construction Furniture and Fixture Office Equipment Pre-operating expenses Estimated fixed cost Net Initial Net Working Capital Total Estimated Cost of Project LCY 5,550 14,720 4,953 2,325 775 5,614 150 100 671 FCY 10,550 ("000") Total cost 5,550 14,720 15,503 2,325 775 5,614 150 100 671 45,408 5,859 51,266

MEANS OF FINANCE Debt Habib Bank Ltd TOTAL DEBT: Equity - Paid-up Capital (Sponsors) TOTAL EQUITY TOTAL DEBT & EQUITY

30,760

30,760 30,760

20,507

20,507 20,507 51,266

DEBT : EQUITY RATIO SPONSORS' STAKE

60 : 40 40%

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“AL-KHALIQUE” CNG Filling Station AL-KHALIQUE CNG Filling Station Initial Net Working Capital Requirement

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Descriptions A.
1 2 3 4

Rs. "000"

Current Assets:
Advances, & Prepayments Stores & Spares Accounts Receivable is 2% of sakes Cash Total Current Assets 200 300 859 4,500 5,859 5,859

2%

B.
Initial Net Working Capital

Current liabilities

Years Production Capacity

2011 80% Consumption of Raw Material Quanity ("000") 864 864

2012 85%

2013 90%

Description 3000 Kg of Sui Gas/day/Compressor Total Quantity Consumed

918 918

972 972

Cost of Raw material: Description Sui Gas @ 30/kg Total Cost

Rs.30/Kg Rs. ("000") 25920 25920 27540 27540 29160 29160

Sales Revenue: Description Unit Price(Rs.) Rupees ("000")

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75% 0 42,930 80% 45,792 45,792

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85% 48,654 48,654 90% 51516 51516

CNG Total Sales

53

Administrative And General Expenses 1 Year =

Rs “000” 12 months

Sr. No. 1 2 3 4 5 6 7

Designation Manager Cashier Accountant Operator Gas Fillers Peon/Sweeper Security Guard Total cost

No. of Employees 1 2 1 1 12 1 2 20

Salary/ Month 20,000 16,000 10,000 8,000 72,000 6,000 12,000 144,000

Annual Salary 240 192 120 96 864 72 144 1728

General Expenses:

Sr. No. 1 2 3 4 5

Description Printing & Stationary Telephone, Telex, Postage Rents, Rates and Taxes Entertainment Miscellaneous Total

Year Exp. ("000") 75 40 100 60 50 325

Assumptions: Administrative Salaries will increase @ 15% every year.

Year Wise Administrative Salaries: Note: Salaris will be increase 15% each year No. of Rupees ("000") Sr. No. Designation Employees 2010 2011

2012

2013

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1 2 3 4 5 6 7

Manager Cashier Accountant Operator Gas Fillers Peon/Sweeper Security Guard Total

1 2 1 1 12 1 2 20

240 192 120 96 864 72 144 1728

276 221 138 110 994 83 166 1,987

317 254 159 127 1,143 95 190 2,285

365 292 183 146 1,314 110 219 2,628

Sr. No. 1 2 3 4 s5

Description Printing & Stationary Telephone, Telex, Postage Rents, Rates and Taxes Entertainment Miscellaneous Total general expenses

General Expenses: Rupees ("000") 75 83 40 44 100 110 60 66 50 55 325 358

91 48 121 73 61 393

100 53 133 80 67 433

4-

DEPRECIATION COST

DEPRECIATION COST HAS BEEN CALCULATED ON STRAIGHT LINE PRINCIPLE APPLYING USUAL RATES AS UNDER;Rupees("000") Amt. of depreciatio n 1,550 736 15 20 2,321

Plant & Machinery Building Furniture & Fixtures Office equipment

15,503 14,720 150 100

10% 5% 10% 20%

Note; The amount of depreciation will be same each year

Manufacturing Overhead Cost:

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AL-KHALIQUE FILLING STATION Price 315 10 KW OR Units 160 2000

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Electricity fixed cost Electricity variable cost

mon th 12 12

Description Fixed Cost: Power: @ 315/160/KW/Month Insurance: @ 5% of machinery Fix charges of gas Maintenance and Depreciation: Overhauling Expenses of Compressor Maintenance of Building @ 5% of Cost of Building Maintenance of Dispensors Total Fixed Cost Variable Manufacturing Expenses: Power:@ 10/unit of 2000 units/Month cost of gas Total Variable Cost

Rs ("000")

605 775 14,40 0

30 736 50 16,59 6

240 24,300 24,54 0

Description

Add:

Fixed Cost Variable Cost Total Overheads Cost

2010 Rupees ("000") 75% 16,596 24,300 40,896

2011 80% 16,596 33,567 50,163

2012 85% 16,596 27,540 44,136

2013 90% 16,596 29160 45,756

AMORTIZATION TABLE
Nmae of Bank Habib Bank Limited

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30,760,00 Amount of loan Rate Of Intrest Period Of Loan Repayment of Intrest Repayment of Instalment Date of Disbursement of Loan Completion of the Project Date of Commercial Production Date of Repayment of principle No of Due Dates Days 3/31/2010 0 6/30/2010 91 9/30/2010 92 12/31/2010 92 3/31/2011 90 6/30/2011 9/30/2011 12/31/2011 3/31/2012 6/30/2012 9/30/2012 12/31/2012 3/31/2013 6/30/2013 9/30/2013 12/31/2013 3/31/2014 6/30/2014 9/30/2014 12/31/2014 3/31/2015 6/30/2015 9/30/2015 12/31/2015 91 92 92 91 91 92 92 90 91 92 92 90 91 92 92 90 91 92 92 0 18% per Annuam 5 Years Quartely Instalment Half Yearly 3/31/2010 31/12/2010 31/3/2011 30/6/2011 6 Amount Total of Intrest Instalment 0 1,399,580 1,399,580 1,414,960 1,414,960 1,414,960 1,414,960 1,384,200 1,384,200 1,399,580 1,273,464 1,273,464 1,119,664 3,076,00 0 3,076,00 0 3,076,00 0 3,076,00 0 3,076,00 0 3,076,00 0 3,076,00 0 3,076,00 0 30,760,000 to 2012 Total Intrest during Construction from 3/31/2010 2011 141,496 19,667,944 3/31/2011 2013 3,217,496 50,427,944 5,613,700 2014 279,916 141,496 3,355,916 141,496 424,488 276,840 3,500,488 276,840 559,832 424,488 3,635,832 424,488 707,480 553,680 3,783,480 553,680 839,748 707,480 3,915,748 707,480 990,472 830,520 4,066,472 830,520 1,119,664 990,472 4,195,664 990,472 4,475,580 1,273,464 4,349,464 1,119,664

Project Appraisal

360

Principle Instalment 0 0 0 0 0 3,076,00 0 3,076,00 0

Instalment Outstanding Principle 30,760,000 30,760,000 30,760,000 30,760,000 30,760,000 27,684,000 27,684,000 24,608,000 24,608,000 21,532,000 21,532,000 18,456,000 18,456,000 15,380,000 15,380,000 12,304,000 12,304,000 9,228,000 9,228,000 6,152,000 6,152,000 3,076,000 3,076,000

2015

2016

Department Of Commerce

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“AL-KHALIQUE” CNG Filling Station
Interest Instalments 3,946,508 3,076,000 4,220,272 6,152,000 I 75% Construction year 3,085,228 6,152,000 II 80% 45,792 1,962,488 6,152,000

Project Appraisal
839,748 6,152,000 III 85% 48,654

3,076,000 IV 90% 51,516

Estimated Income Statement
For the year ending Sept. 30, Efficiency Assumed : SALES COST OF GOODS SOLD : - Raw Materials Depreciation Exp GROSS PROFIT OPERATING EXPENSES - Admin & General Expenses Total Operating Expenses OPERATING PROFIT NON OPERATING EXPENSES - Financial Expenses - Amortzn. of Prelim. Exp - Workers Welfare Fund Sub-Total PRE-TAX PROFI T Income Tax NET PROFIT Dividend RETAINED EARNINGS 1,987 1,987 15,564 5,331 134.2 815 6,280 9,283 3,249 6,034 6,034 2,285 2,285 16,507 4,220 134 865 5,219 11,288 3,951 7,337 7,337 13,371 2,628 2,628 17,407 3,085 134 14,192,873 912 16,495 5,773 10,722 10,722 24,093

25,920 2,321 17,551

27,540 2,321 18,793

29,160 2,321 20,035

5%

35%

Department Of Commerce

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“AL-KHALIQUE” CNG Filling Station

Project Appraisal

Estimated Balance Sheet
As on Sept. 30, ASSETS Cash Accounts Receivables Stores & Spares Advances & Depostis Total Current Assets 5,85 9 44,73 7 44,73 7 67 1 51, 266 Constructn. 5,85 9 I II III 9,375 916 1,000 500 11,791 12,141 973 1,100 700 14,914 13,393 1,030 4,600 2,915 2 1,938

Fixed Assets at cost Less: Accumulated Dprcn. Net Fixed Assets: Preliminary Expenses:

44,737 2,321 42,415 537

44,737 4,643 40,094 403

44,737 6,964 37,7 73 268 59,9 79

Total Assets: LIABILITIES & EQUITY Current Liabilities Account Payable -Workers Welfare Fund - Dividends Payable - Cur. Mat. of L T Debt Total Current Liabilities: Long-term Liabilities HABIB BAMK LIMITED Total Long-term Liab.: EQUITY

54,743

55,410

518 3,076 3,594 3,076 3,076 3,076 3,076

30,760 30,76 0

24,608 24,608

18,456 18,456

1 2,304 1 2,304

Paid up Capital - Un-appropriated Profit

20,50 7

20,507 6,034

20,507 13,371

20,507 24,093

Department Of Commerce

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IUB

“AL-KHALIQUE” CNG Filling Station
20,50 7 51, 266

Project Appraisal
4 4,599 59,9 79

Total Equity: Total Liab. & Equity:

26,541 54,743

33,878 55,410

CASH FLOW STATEMENT
For the year ending Sept. 30, SOURCES Operating Profit Add Back: Depreciation Amortization Funds from Operations - Other Income HABIB BANK LTD. Increase in Current Liab. Increase in Bank Borrowings Paid up Capital TOTAL SOURCES Const. Yr. I II III

30,76 0 20,50 7 51,26 6

6,034 2,321 134 8,490 518 9 ,008

7,337 2,321 134 9,7 93

10,722 2,321 134 13, 177

3,076

12,869

13,177

APPLICATION FUNDS

OF 44,73 7 671 -

Investment in Fixed Assets: -Preliminary Exp Financial Expenses Repayment of : - Custom Debentures social security - Bank Borrowings Taxes Increase in current Assets: TOTAL

3,076 2,416 6,152 3,951

-

6,152 5,773

45,40 8

5,492

10,103

11,925

3, Surplus/(Deficit) Cash Balance - Opening Cash Balance - Ending 5,859 5,859 516 5, 859 9, 375 2,141 9,375 1 13,393 12,141 2,766 1,252

Department Of Commerce

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“AL-KHALIQUE” CNG Filling Station

Project Appraisal

Years 0 1 2 3

Net Profit 6,504 7,643 8,737

Calculation Of IRR Depreciation Amortization 2,321 2,321 2,321 IRR 145 145 145

Cash Outflow/ Inflow (51260) 2456 2456 2456 21%

R A T I O S: Current Ratio Liquidity ratio

3

5

7

- Gross Margin (%) - Operating Margin (%) - Net Margin (%)

38.3 % 34% 13.9 %

38.6 % 33.9 % 15.6 %

38.9 % 33.8 % 20.8 %

Calculation Of Payback

Department Of Commerce

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IUB

“AL-KHALIQUE” CNG Filling Station
Years 0 1 2 3 Net Profit 0 6,034 7,337 10,722 Depreciation 2,321 2,321 2,321 Amortization 134 134 134

Project Appraisal

8,489 9,793 13,177

Inflows outflow Pay back period

31,459 51,266 1

Interpretations
 Current ratio is continuously increasing it means that current assets of the company are increasing continuously or there is a decrease in the current liabilities. A good company has a good ratio of at least 1.25 The station has above this standard which shows a good financial position  There is a huge sales being earned on the assets which shows assets are being utilized in a good manner.  Gross profit margin ratio shows the increasing trend because cost and sale price of natural gas increase up to 5%.. So the gross profit margin ratio is increasing year wise.  The operating profit ratio is showing the increasing trend which shows that the business of company profitable and company is earning well profit.  The net profit margin shows that CNG industry has a good growth rate now-a-days hence it will good in the future.  The cash ratio of company is very good in all the years. It means the company has sufficient cash to discharge its liabilities.  IRR is 21% that is good for the company.

Department Of Commerce

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“AL-KHALIQUE” CNG Filling Station

Project Appraisal

SWOT ANALYSIS
Strength:
 Raw material is easily available  Access to customers  Well technology is used  Demand is very high  Profit earning is high

Weakness:
 Recourses are going to be end  Security problem  Government restriction  Load shedding of sui gas

Threats
The proposed project will be facing the following threat: Department Of Commerce 49 IUB

“AL-KHALIQUE” CNG Filling Station

Project Appraisal

 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

SAFETY FEATURES
CNG has four safety features that enable it to be inherently a safer fuel as compared to gasoline, diesel or LPG. a) CNG is lighter than air so if it first rises and dissipates into the atmosphere, on the other hand fuels will puddle on the grounds, should a leak occur. b) It has a self ignition temperature of 700-C against 455-C for gasoline. c) CNG has to mix with air in a small range 4 to 14% by volume, for combustion to take place. This is a lower range, as compared to petrol. d) CNG is a substitute for gasoline (petrol) or diesel fuel. It is considered to be an environmentally "clean" alternative to those fuels. It is made by compressing methane (CH4) extracted from natural gas. It is stored and distributed in hard containers, usually cylinders.

Department Of Commerce

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“AL-KHALIQUE” CNG Filling Station

Project Appraisal

RECOMMENDATION
On the behalf of my feasibility report I would like to recommend that this business is very profitable business. If the resources of natural gas increased and some precaution are followed then we can easily start a new CNG station. Government should also make such type of strategies and rules and regulations that a new investor can easily enter in such type of business. There should be no barred for entering in this type of business. OGRA and SNGPL should also be helping. To finance such type of project the banks also provide loan on low interest rate. So that the investors arrange the finance easily.

Department Of Commerce

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“AL-KHALIQUE” CNG Filling Station

Project Appraisal

CONCLUSION:

The project is technically and financially sounds with ample market justification. The sponsors are experienced businessmen and enjoy high credit worthiness. Based on this analysis it may be conducted that the project is financially and economically viable and suitable proposition for DEMAND\LEASE FINANCING BY THE BANK. The business of the company will flourish in the future because nowa-days CNG has a high demand. We have good expectations from our Project. OGRA (oil and gas regulatory authority ) also giving same type of facility when new CNG station is started banks also provide loan with low interest rate. And machine is also imported easily. So this is concluded that this type of business is profitable business.

Department Of Commerce

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“AL-KHALIQUE” CNG Filling Station

Project Appraisal

Department Of Commerce

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IUB

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