CNG Station

“AL-KHALIQUE” CNG Filling Station Project Appraisal

Feasibility Reporton

AL-KHALIQUE CNG Filling Station

Course Instructor: Mr. Javaid Iqbal

Group Members:Jawad Junaid (15)Abdul Samad (13)

Muhammad Bilal (41)

Program: MSC A&F (Afternoon)Session: 2008-2010

Department of CommerceThe Islamia University Bahawalpur

Department Of Commerce IUB1


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

BAHAWALPUR



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.



PrefaceDepartment 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-a-

days. We have tried our level best to fulfill the requirements of the

topic. Every effort has been made to incorporate all the available

means of information to make this assignment comprehensive. We

tried our best to accomplish our work.



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).



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.


TABLE OF CONTENTS

SERIAL #. DESCRIPTION PAGE #.

1. Executive Summary 09

2. Implementation 03

3. The Project Introduction 14

4. The Project Site & Location 15

5. NOCs16 16

6. Market Analysis 17

7. Technical Analysis 19

8. Local Equipment 20

9. Flow Diagram 28

10. Personal Analysis 30

11. Assumptions 32

12. Annexure 33

13. Swot Analysis 46

14. Recommendation 48Department Of Commerce IUB7


15. Conclusion 49

“AL-KHALIQUE”CNG Filling StationNear Sutlej Toll Plaza Multan Road

Bahawalpur



EXECUTIVE SUMMARY

NAME OF THE PROJECT: AL-KHALIQUE CNG STATION

NATURE OF INDUSTRY: CNG STATIONA NEW PROJECT

CORPORATE STATUS: PARTNERSHIP FIRM

LOCATION OF PROJECT BAHAWALPUR

ADDRESS NEAR SATLEJ TOLL PLAZA MULTAN ROAD BAHAWALPUR

We are the fresh and energetic students of MSC A&F. We are going to start a new

business. We have selected the business of CNG Station. We have selected this

business because there is so much potential in this business. Especially today’s there

is increasing number of cars. This is also a challenging project. This will be the test of

our hidden qualities.

AL-KHALIQUE CNG STATION registered firm established with the objective of

installing a CNG Re-Fuelling Station at Sutlej Toll Plaza, district Bahawalpur. The firm

is intending to start its operations initially with one station in Bahawalpur. The firm has

plans to expand its network later to in other cities.

CNG is environmentally friendly fuel since it unleaded and releases less than 10%

carbon mono oxide as compared to petrol and is an indigenous fuel commonly known Department Of Commerce IUB9


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 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 45408

Initial Working Capital 5859

Total Cost 51260

Means of Finance:

There are two types of means of finance. One is from our own resources and other

is from taking debt from Bank. The ratio is of debt and equity is of 60:40

MEANS OF FINANCED e b tHabib Bank Ltd 30760 30760

TOTAL DEBT: 30760

E q u i t y



- Paid-up Capital (Sponsors) 20507 TOTAL EQUITY 20507

TOTAL DEBT & EQUITY 51260

DEBT : EQUITY RATIO 60 : 40 SPONSORS' STAKE 40%

Name of lender:

Our name of lender is Habib Bank Ltd which will provide us the entire

loan which we need for the completion of our project. The interest rate of

the Bank is 18%.

Name of sponsors:

The sponsors of the project are professionally qualified and have

valuable and extensive experience of business management regarding. They have got

petrol pump & CNG and good trading contacts and market reputations in the city.

The project faces not problems in terms of marketing its product. The sponsor’s

experience would assist the firm in its smooth and profitable operation.

The sponsors are financially sound and capable to contribute their part of

the equity in the proposed scheme. The managing partner of the firm has vast

experience in the managing of this industrial organization

SR.NO. NAME DESIGNATION

1. Jawad Junaid Managing partner

2. Abd-Ul- Samad Partner

3. M. Bilal Partner



The detail of machinery is given below:

Compressor model skid Mounted

Water Cooled W-Type Compressor

High pressure Piping 3-line

Priority fill Panel Spares

Dispenser

Storage Cylinder

Name of civil contractor :

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

Name of Machinery Supplier:

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



IMPLEMENTAION PERIOD

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

TASK MONTHS

Bank approval February 2010

Purchase of land March 2010

Construction of building October 2010

Arrival of machinery at site November 2010

Installation completed December 2010

Trial run December 2010

Commercial operation started January 2011



INTRODUCTION OF COMPANY

The company is doing partnership business. There are three sponsors of the company which are the partners of the company also. The company is doing legal business. Profit earned by the company is distributed among the members of the company.

We are going to produce only one product i.e. CNG. We are not producing any other product. We are following the single product approach. Growth of sale does not matter. At initial stage we will be producing at 75% capacity.

We purchased our plant from abroad and as well as from local. Plant reached at site at January 1, 2010. Our plant installed on March 1st 2010. It started its trial run on March 2010. It started its commercial operation on January 1st 2011.

CNG stands for Compressed Natural Gas. It is one of the most viable alternatives to traditional fuel energy resources for the automotive industry. CNG is low in pollutants, high in calorific value and heat yield, economical and available in abundance globally

The business of CNG filling station has marked its place in the country through growth during the last few years. This growth has opened up new opportunities and more CNG filling stations are being setup all over Pakistan. The prime reason for this is the low cost of the fuel. Along with that, CNG fuel is less hazardous to the environment as compared to the traditional petroleum fuel



LOCATION OF THE PROJECTThe project is proposed to be setup near the Sutlej Toll

Plaza Multan Road Bahawal Pur. The site enjoys the following advantages:

Easy availability of raw material

Availability of communication facilities like telephone, telex, etc

Access to main road, sources of power, water, fuel, etc.

Availability of skilled and unskilled manpower.

Free from other environmental hazards like water-logging, floods salinity,

etc.



NOCs Required For CNG Station

No Objection Certificate will be required from the following departments prior to theCommencement 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 .



MARKET ANALYSIS

The commercial application of CNG technology now forms an important element ofGovernment’s petroleum policy, which is reflected in the efforts made by the governmentFor 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).

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.



TECHNICAL ANALYSIS

The main machinery at CNG station is compressor. The technology involved in machinery is very advance and technical. Pakistan is not to advance to produce or manufacture the compressor because Pakistan has no technology to manufacture it so the whole technology involved is imported from the Canada because Canada is very advance in technology and manufacturing high standard of compressor. Dispensing machine also imported from Canada. Compressor imported from Canada is very good in its function. It contains two generators one is run by the natural gas and other is run by electricity. So that in case of absence of electricity or Sui gas other generated can be used. This compressor converts the Sui gas into CNG with the help of 3 way pipelines and cooling tower then this compressed natural gas is transferred to Dispensing machine to vehicles and system is control by Control panel.

CNG has now become a major area of investment and is being actively promoted as alternative fuel across the entirety of the automotive industry in Pakistan. As a cheaper and environmentally friendly alternative, the shift to CNG has proved immensely popular, especially in light of the spiraling price of oil. With an exponentially growing market, there are growing challenges and potentials for growth arising as well. Being one of the pioneers of CNG sector in Pakistan.



EQUIPMENTS AND FACILITIES

The proposed CNG station will comprise of following main facilities;

Compressors

Storage cascade

Dispensing point

Building & other civil works

Gas receiving & electricity connection.

List of LOCAL EQUIPMENTS

CNG stations the major component of equipment used is imported. But some locally available components are also used.

Below is given a list of some such equipments and consumables. Lo CNG station

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

6-Water pump with motor

7-Cooling Tower

8-Air Compressor

9-Soft pipes (tubes) for air flow

10-Electric Cables for Main Compressor motor, Oil pump motor, Water pump Motor, Cooling Tower fan motor, Automation devices, Bare Panel emergency buttons, Earth plate copper strip

11-GI flexible pipes for insulation of cables

12-Pressure Gas Regulator to be installed between Buffer and Blow down vessel

13-NRV to be fitted between Buffer and Blow down vessel

14-Flexible Pipe for Gas Inlet

15-Ball valve for Gas Inlet



Compressor: Two compressors of 530 Nm/hr will be installed with appropriate storage cascades.

Sequential and three ways penal priority installed in separate room will be operated from

a control panel outside the compressor room.



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



Electric Control Panel

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..



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..



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.



.

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.



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

For Purificatio

n

Micro Filters(Further Purification)

Enters the Compressor Machine Room

Manually Operators

Auto Operators

STAGE 1 Cooling Process

STAGE 2 More Compressed

STAGE 4Comes In the Cooler

STAGE 3Further Compressed

Priority PanelBanks Distributors

Regulators Used for the Adjustments

Dispenser MachinesVehicles


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.



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 DESIGNATION



1. Jawad Junaid Managing partner

2. Abdul Samad Partner

4. M. Bilal 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 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.



Assumptions

We are taking 360 days a year

There will be no load shedding problem from august and we are starting from 1 st

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.



ANNEXURE COST OF LAND

Sr. No. Description

Area in

Unit Cost

Rs ("000")

Marlas Rate in percentages

Total Cost

1 Land 50 100,000 5,000

2 Registration 1% of cost of Land 50 1% 1,000 50

3 Stamp Duty 2% of Cost of Land 50 2% 2,000 100

4District Council corporation Fee 1% of Cost of Land 50 1% 1,000 50

5Development Charges 5% of Cost of Land 50 5% 5,000 250

6 CVT and TMO Fee 2% cost of Land 50 2% 2,000 100

Total Cost of Land 111,000 5,550



Cost of civil works

AL-KHALIQUE CNG Filling Station Estimated Cost of Civil Works

1marla = 272 Sq feet

50marlas = 136000 Sq feet

Sr. No. Description

Type of Unit of Covered Rate Per

Rs ("000")

Building Construction area UnitTotal Cost

1 Compresser Room RCC Square feet 1500 1200 18002 Tire Shop RCC Square feet 200 1200 2403 Wash Rooms RCC Square feet 100 1200 1204 Electric panel room RCC Square feet 500 1200 6005 Mosque RCC Square feet 800 1200 9606 Manager room RCC Square feet 600 1200 7207 Account section RCC Square feet 400 1200 480

8Cost of Jumbo Lawn

Open area Square feet 2,500 800 2000

9 Generator Room RCC Square feet 500 1200 60010 Tuc shop RCC Square feet 400 1200 48011 Cyledrical room RCC Square feet 1000 1200 120012 Store RCC Square feet 300 1200 36013 Fire section room RCC Square feet 300 1200 36014 Workshop area RCC Square feet 1000 1200 120015 Main Canopy RCC Square feet 2000 1200 2400

16 Front areaOpen area Square feet 1500 800 1200

Total Cost of Civil Works 13600 14,720



Annexure - IIIAL-KHALIQUE CNG FILling Station

Estimated Cost of Machinery ("000")

Sr.No. Description Qty Unit Cost LCY FCY Total cost1 Compressor Machine 1 4,500,000 4,500,000 4,5002 Dispensors 3 1,200,000 3,600,000 3,6003 Storage Cascade 40 50,000 2,000,000 2,0004 3 Way High pressure Lines 3 200,000 600,000 600

5 Control meter system 1 2,000,000 2,000,000 2,0006 Priority panel 1 200,000 200,000 2007 Cooling tower 1 100,000 100,000 1008 Oil filter + stainer 2 55,000 110,000 110

10 Control panel 1 450,000 450,000 45011 Generator 2 500,000 1,000,000 1,00012 Water pump with motor (7.5 KW) 2 25,000 50,000 5013 Chemicals + oil 1 50,000 50,000 5014 MSV 3 15,000 45,000 4515 Fire extinguisher 6 10,000 60,000 6016 Contingency 5% - 738000 738

Total Cost of Machinery 4,953,000 10,550,000 15,503



AL-KHALIQUE CNG Filling StationEstimated cost of the Project

("000")Sr.No. Description LCY FCY Total cost

1 Land 5,550 - 5,550

2 Building 14,720 - 14,720

3 Machinery 4,95310,55

0 15,5034 Installation & Erection 15% of Machinery 2,325 2,3255 Insurance 5% of Cost of Machinery 775 775

6 Intrust during Construction 5,614 5,614

8 Furniture and Fixture 150 1509 Office Equipment 100 10010 Pre-operating expenses 671 671

Estimated fixed cost 45,408

Add: Net Initial Net Working Capital 5,859

Total Estimated Cost of Project 51,266

MEANS OF FINANCED e b t

Habib Bank Ltd 30,760

30,760

TOTAL DEBT: 30,760

E q u i t y

- Paid-up Capital (Sponsors) 20,507

20,507

TOTAL EQUITY 20,507

TOTAL DEBT & EQUITY 51,266

DEBT : EQUITY RATIO 60 : 40 SPONSORS' STAKE 40%



AL-KHALIQUE CNG Filling Station Initial Net Working Capital Requirement

Descriptions Rs. "000"

A. Current Assets:

1 Advances, & Prepayments 200 2 Stores & Spares 300 3 Accounts Receivable is 2% of sakes 2% 859 4 Cash 4,500

Total Current Assets 5,859

B. Current liabilities -

Initial Net Working Capital 5,859

Years 2011 2012 2013Production Capacity 80% 85% 90%

Consumption of Raw Material

Description Quanity ("000")

3000 Kg of Sui Gas/day/Compressor 864 918 972Total Quantity Consumed 864 918 972

Cost of Raw material: Rs.30/Kg

Description Rs. ("000")

Sui Gas @ 30/kg 25920 27540 29160Total Cost 25920 27540 29160



Sales Revenue:

DescriptionUnit

Price(Rs.)Rupees ("000")

75% 80% 85% 90% CNG 53 0 45,792 48,654 51516

Total Sales 42,930 45,792 48,654 51516

General Expenses:

Sr. No. Description Year Exp. ("000")

1 Printing & Stationary 752 Telephone, Telex, Postage 403 Rents, Rates and Taxes 1004 Entertainment 605 Miscellaneous 50

Total 325

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

Department Of Commerce IUB

Administrative And General Expenses Rs “000”1 Year = 12 months

Sr. No. Designation No. of Salary/ Annual

Employees Month Salary1 Manager 1 20,000 2402 Cashier 2 16,000 1923 Accountant 1 10,000 1204 Operator 1 8,000 965 Gas Fillers 12 72,000 8646 Peon/Sweeper 1 6,000 727 Security Guard 2 12,000 144

Total cost 20 144,000 1728

39


Year Wise Administrative Salaries:Note: Salaris will be increase 15% each year

No. of Rupees ("000") Sr. No. Designation Employees 2010 2011 2012 2013

1 Manager 1 240 276 317 365 2 Cashier 2 192 221 254 292 3 Accountant 1 120 138 159 183 4 Operator 1 96 110 127 146 5 Gas Fillers 12 864 994 1,143 1,314 6 Peon/Sweeper 1 72 83 95 110 7 Security Guard 2 144 166 190 219

Total 20 1728 1,987 2,285 2,628

General Expenses : Sr. No. Description Rupees ("000")

1 Printing & Stationary 75 83 91 1002 Telephone, Telex, Postage 40 44 48 533 Rents, Rates and Taxes 100 110 121 1334 Entertainment 60 66 73 80s5 Miscellaneous 50 55 61 67

Total general expenses 325 358 393 433

4- DEPRECIATION COST

DEPRECIATION COST HAS BEEN CALCULATED ON STRAIGHTLINE PRINCIPLE APPLYING USUAL RATES AS UNDER;-

Rupees("000")Amt. of

depreciation

Plant & Machinery 15,503 10% 1,550Building 14,720 5% 736Furniture & Fixtures 150 10% 15Office equipment 100 20% 20

2,321

Note; The amount of depreciation will be same each year



Manufacturing Overhead Cost:

AL-KHALIQUE FILLING STATION

PriceKW OR

Unitsmonth

Electricity fixed cost 315 160 12Electricity variable cost 10 2000 12

Description Rs ("000")

Fixed Cost:

Power: @ 315/160/KW/Month 605 Insurance: @ 5% of machinery 775

Fix charges of gas 14,40

0

Maintenance and Depreciation:

Overhauling Expenses of Compressor 30 Maintenance of Building @ 5% of Cost of Building 736 Maintenance of Dispensors 50

Total Fixed Cost 16,59

6 Variable Manufacturing Expenses:

Power:@ 10/unit of 2000 units/Month 240 cost of gas 24,300

Total Variable Cost 24,54

0

Description 2010 2011 2012 2013 Rupees ("000")

75% 80% 85% 90%Fixed Cost 16,596 16,596 16,596 16,596

Add: Variable Cost 24,300 33,567 27,540 29160Total Overheads Cost 40,896 50,163 44,136 45,756



AMORTIZATION TABLENmae of Bank Habib Bank LimitedAmount of loan

30,760,000

Rate Of Intrest 18%

per Annuam

Period Of Loan 5 Years 360

Repayment of Intrest Quartely Instalment

Repayment of Instalment Half YearlyDate of Disbursement of Loan 3/31/2010

Completion of the Project 31/12/2010Date of Commercial Production 31/3/2011Date of Repayment of principle 30/6/2011 6 Instalment

No of Principle Amount Total Outstanding

Due Dates Days Instalment of Intrest Instalment Principle

3/31/2010 0 0 0

- 30,760,0

00

6/30/2010 9

1 0 1,399,58

0 1,399,5

80 30,760,0

00

9/30/2010 92 0

1,414,960

1,414,960

30,760,000

12/31/2010 92 0

1,414,960

1,414,960

30,760,000

3/31/2011 90 0

1,384,200

1,384,200

30,760,000

6/30/2011 91

3,076,000

1,399,580

4,475,580

27,684,000

9/30/2011 92

1,273,464

1,273,464

27,684,000

12/31/2011 92

3,076,000

1,273,464

4,349,464

24,608,000

3/31/2012 91

1,119,664

1,119,664

24,608,000

6/30/2012 91

3,076,000

1,119,664

4,195,664

21,532,000

9/30/2012 92 990,472

990,472

21,532,000

12/31/2012 92

3,076,000 990,472

4,066,472

18,456,000

3/31/2013 90 830,520

830,520

18,456,000

6/30/2013 91

3,076,000 839,748

3,915,748

15,380,000

9/30/2013 92 707,480

707,480

15,380,000



12/31/2013 92

3,076,000 707,480

3,783,480

12,304,000

3/31/2014 90 553,680

553,680

12,304,000

6/30/2014 91

3,076,000 559,832

3,635,832

9,228,000

9/30/2014 92 424,488

424,488

9,228,000

12/31/2014 92

3,076,000 424,488

3,500,488

6,152,000

3/31/2015 90 276,840

276,840

6,152,000

6/30/2015 91

3,076,000 279,916

3,355,916

3,076,000

9/30/2015 92 141,496

141,496

3,076,000

12/31/2015 92

3,076,000 141,496

3,217,496

Total 30,760,00

0 19,667,944

50,427,944

Intrest during Construction

from 3/31/2010 to 3/31/2011 5,613,7

00 2011 2012 2013 2014 2015 2016

Interest 3,946,508

4,220,272

3,085,228

1,962,488

839,748

Instalments 3,076,000

6,152,000

6,152,000

6,152,000

6,152,000

3,076,000

Estimated Income StatementFor the year ending Sept. 30, I II III IVEfficiency Assumed : 75% 80% 85% 90%

SALESConstruction year 45,792 48,654

51,516

COST OF GOODS SOLD :

- Raw Materials 25,920 27,540 29,160

Depreciation Exp 2,32

1 2,32

1 2,321

G R O S S P R O F I T 17,551 18,793 20,035

OPERATING EXPENSES

- Admin & General Expenses

1,987

2,285

2,628

Total Operating Expenses

1,987

2,285

2,628

OPERATING PROFIT 15,56

4 16,50

7 17,40

7 NON OPERATING EXPENSES



- Financial Expenses 5,33

1 4,22

0 3,08

5

- Amortzn. of Prelim. Exp 134.2 134

134

- Workers Welfare Fund 5% 815

865

14,192,873

Sub-Total 6,280

5,219

912

P R E - T A X P R O F I T

9,283

11,288

16,495

Income Tax35%

3,249

3,951

5,773

N E T P R O F I T 6,034

7,337

10,722

Dividend - - -

RETAINED EARNINGS 6,034

7,337

10,722

13,371

24,093

Estimated Balance SheetAs on Sept. 30, Constructn. I II IIIASSETS

Cash 5,85

9

9,375 12,141 13,393

Accounts Receivables

916 973 1,030

Stores & Spares

1,000 1,100 4,600

Advances & Depostis

500 700 2,915



Total Current Assets

5,859

11,791 14,914

21,938

Fixed Assets at cost 44,7

37

44,737 44,737 44,737 Less: Accumulated Dprcn.

-

2,321 4,643 6,964

Net Fixed Assets: 44,7

37

42,415 40,094 37,7

73 Preliminary Expenses:

671

537 403

268

Total Assets: 51,

266

54,743 55,410 59,9

79

LIABILITIES & EQUITYCurrent Liabilities

Account Payable

518

-Workers Welfare Fund

-

- Dividends Payable

- -

- Cur. Mat. of L T Debt

-

3,076 3,076 3,076 Total Current Liabilities:

-

3,594 3,076

3,076

Long-term Liabilities

HABIB BAMK LIMITED

30,760

24,608 18,456

12,304 Total Long-term Liab.:

30,760

24,608 18,456

12,304

EQUITY

Paid up Capital 20,5

07

20,507 20,507 20,507

- Un-appropriated Profit

6,034 13,371 24,093

Total Equity: 20,5

07

26,541 33,878

44,599 Total Liab. & Equity:

51,266

54,743 55,410

59,979

CASH FLOW STATEMENT

For the year ending Sept. 30, Const. Yr. I II III

SOURCESOperating Profit - 6,034 7,33 10,72



7 2

Add Back: Depreciation - 2,321 2,32

1 2,32

1

Amortization - 134 13

4 13

4 Funds from Operations - 8,490

9,793

13,177

- Other Income - -

HABIB BANK LTD. 30,76

0 518

Increase in Current Liab. - - 3,07

6 Increase in Bank Borrowings - -

Paid up Capital 20,50

7 -

TOTAL SOURCES 51,26

6

9,008 12,86

9 13,17

7

APPLICATION OF FUNDS

Investment in Fixed Assets: 44,73

7 -Preliminary Exp 671 - - Financial Expenses - - Repayment of : - - Custom Debentures - - social security

- Bank Borrowings - 3,076 6,15

2 6,15

2

Taxes 3,95

1 5,77

3 Increase in current Assets: 2,416 TOTAL

45,40

8 5,492 10,10

3 11,92

5

Surplus/(Deficit) 5,859

3,516

2,766

1,252

Cash Balance - Opening -

5,859

9,375

12,141

Cash Balance - Ending 5,859

9,375

12,141

13,393



Calculation Of Payback

Years Net Profit Depreciation Amortization

0 0

1 6,034 2,321 134 8,489

2 7,337 2,321 134 9,793

3 10,722 2,321

134 13,177

Inflows 31,459 outflow 51,266

Pay back period 1

Department Of Commerce IUB

Calculation Of IRR Years Net Profit Depreciation Amortization Cash Outflow/ Inflow

0 - (51260)1 6,504 2,321 145 24562 7,643 2,321 145 2456 3 8,737 2,321 145 2456

IRR 21%

R A T I O S:Current Ratio

3

5

7

Liquidity ratio

- Gross Margin (%)38.3

%38.6

%38.9

%- Operating Margin (%) 34%

33.9%

33.8%

- Net Margin (%)13.9

%15.6

%20.8

%

47


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.



SWOT ANALYSISStrength:

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:

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.Department Of Commerce IUB49


c) CNG has to mix with air in a small range 4 to 14% by volume, for combustion to take place. This is a lower range, as compared to petrol.

d) CNG is a substitute for gasoline (petrol) or diesel fuel. It is considered to be an environmentally "clean" alternative to those fuels. It is made by compressing methane (CH4) extracted from natural gas. It is stored and distributed in hard containers, usually cylinders.



RECOMMENDATION

On the behalf of my feasibility report I would like to recommend that this business is very profitable business. If the resources of natural gas increased and some precaution are followed then we can easily start a new CNG station.

Government should also make such type of strategies and rules and regulations that a new investor can easily enter in such type of business. There should be no barred for entering in this type of business. OGRA and SNGPL should also be helping.

To finance such type of project the banks also provide loan on low interest rate. So that the investors arrange the finance easily.



CONCLUSION:

The project is technically and financially sounds with ample market justification. The sponsors are experienced businessmen and enjoy high credit worthiness. Based on this analysis it may be conducted that the project is financially and economically viable and suitable proposition for DEMAND\LEASE FINANCING BY THE BANK.

The business of the company will flourish in the future because now-a-days CNG has a high demand. We have good expectations from our Project.

OGRA (oil and gas regulatory authority ) also giving same type of facility when new CNG station is started banks also provide loan with low interest rate. And machine is also imported easily. So this is concluded that this type of business is profitable business.




Documents

CNG Station