A project to establish a whole new venture in Pakistan and its A - Z management.

1.  
Presenters: S@jid Ali Arain
R@o M. Kamran
F@raz Ahmed
Sh@fqat Ali Goraho
Q@iser Ahsan Janjua
5th Dimension
MBA 4C
Entrepreneurial Finance
Sir Akbar Saeed Saturday, October 3, 2015

2. 
R@o M. Kamran

3.  Name: Solar Tech.
 Business Type Partnership
 Business: Manufacturing Solar Panels
 Location: Near Thar, Pakistan
 Business State Start-up

4.  Aggressively Capture Pakistani Market
 Compete All Unhealthy Power Generation Devices
 Achieve Positive Cash Flow By Year 3 Of Operations
 Operate In Profits In Year 3
 Utilize 100% Production Capacity By Year 5

5.  Making Solar Panels That Are…
o Efficient
o Cheap
o Above All GREEN
 Fulfill Electricity Requirements Of Pakistan

6.  Demand And Supply Gap Of Electricity Is Very Wide
in Pakistan
 Govt. Is Also Interested In Alternate Power
Generation Projects
 Pakistan Has A Very Good Sunshine Time
 There Is No Maintenance Cost
 Long Life (Around 25-30 Years)

7. -20,000
-10,000
0
10,000
20,000
30,000
40,000
50,000
-1,293 -758 -2,381 -3,621 -4,593
-8,023 -7,437
-10,426
-13,651
Total Existing/Committed Generation Expected Available Generation Demand (Summer Peak) Surplus/Deficit Generation
2012 2020

8.  Solar Tech. Is A Partnership
 Five Partners Are…
o R@o Muhammad Kamran 20% Of Equity
o S@jid Ali Arain 20% Of Equity
o Q@iser Ahsan Janjua 20% Of Equity
o F@raz Ahmed 20% Of Equity
o Sh@fqat Ali Goraho 20% Of Equity
5th Dimension

9. 
S@jid Ali Arain

10.  It’s The Flow Of Charged Particles
 There Are Two Electrodes Involved
o Positive (+) Electrode And Negative (-) Electrode
 In A Conventional Battery The Force That Move
Charged Particles Is Chemical Force
 In Solar Panels Sunlight Excite Electron To Move From
Negative (-) Electrode To Positive Electrode (+)

11.  Most Of Solar Cells Are Made Of Silicon And
Phosphorus
 Silicon Has 4 Valance Electron And Phosphorus Has 5
Valance Electrons
 If Atoms Of Both Elements Are Bound Together The
5th Electron Of Phosphorus Is Bound To The Structure
Weekly
 This Electron Can Fly-out In Presence Of Sunlight

12. P

13. 

14.  Purifying The Silicon Di Oxide (Sand) To Get Pure
Silicon
 This Process Is Carried Out In A Furnace
 The Silicon We Get In This Process Is In Slag Form
 By Product Are Impurities Which Are Used In Other
Industries

15.  Slag Silicon Is Then Processed In Czochralski Crystal
Growing Machine
 This Process Purifies Silicon Even Further
 We Get Big Pure Silicon Crystals After This Process

16.  Then Big Crystals of Silicon Are Sliced Into Any Shape
We Want

18.  Now Is Added To The Silicon Wafers By Using A
Particle Gun
 This Process Adds A Positive (+) Electrode In The
Silicon Wafers
 This Process Is Called “Doping”

19.  Now These Cells Are Linked Together In Serial So That
They Can Absorb Most Of Sun Light
 Linked Cells Are Then Placed In A Aluminum Frame
 Pure Silicon Can Reflect 35% Of Sun Light
 So We Cover It With A Very Thin Layer Of Titanium Di
Oxide

20. 
Qaiser Ahsan Janjua And Faraz Ahmed

21.  We Are Assuming That We Will Be Able To Sell Our
Product To 5,000 House Holds
 So The Project Capacity Will Be 45,000
Panels/Annum
 There Will Be 32 Cells In Each Panel (1,440,000
Cells/Annum)
 Each Panel Will Produce Around 200 Watts Of Power
(9,000,000 W/Annum)

22. Project Cost (PKR)
Land 20,000,000
Buildings 150,000,000
Foreign Machinery 50,000,000
Installation Cost 3,000,000
Vehicles 5,000,000
Interest During Construction 10,739,747
Preliminary Expenses 30,000,000
Contingencies 30,000,000
Fixed Cost 298,739,747
Initial Working Capital 150,000,000
Total Project Cost 448,739,747

23.  Purchasing 20 Kanal (108,000 Sq. Ft) Land For This
Project
 The Rate Of Land In Thar Is Around PKR
1,000,000/Kanal
 So Total Cost Of Land Is Around PKR 20,000,000
Back To Project Cost

24.  According To A Builder The Construction Cost Per Sq.
Ft. Is Around PKR 12000/Yard (PKR 7,200,000/Kanal)
 The Total Cost Of Office, Plant Building And Houses
Will Be Around PKR 150,000,000
Back To Project Cost

25.  All Machinery Will Be Imported From Germany
 The Cost Of Machinery Will Be…
Machine Qty Rate Cost (PKR)
Furnace 01 18,000,000 18,000,000
Crystal Growing Furnace 04 2,550,000 11,000,000
Doping Machine 03 4,250,000 13,000,000
Wafers Machine 02 3,825,000 8,000,000
Total 50,000,000
Back To Project Cost

26.  This Project Do Not Require Intensive Installation
Work
 The Installation Cost Will Be Around PKR 3,000,000
Back To Project Cost

27.  Vehicles Of Amount Around PKR 5,000,000 Will Be
Required
Back To Project Cost

28. Bank Loan Rate Months Int. Dur. Cons.
PICIC 50,000,000 15% 6 3,687,500
Orix Leasing 5,000,000 15% 3 187,500
MCB (W. Cap. Loan) 150,000,000 15% 2 3,825,000
205,000,000
UBL (Misc. Cap. Exp.) 64,243,848 14% 4 3,040,875
Total Debt 269,243,848 Total Interest 10,740,875
Back To Project Cost

29. Preliminary & Pre-production Expenses (PKR)
Project Examination Fee 1,346,219
Loan Commitment Fee 336,555
Loan Documentation 336,555
Feasibility Studies 300,000
Company Formation /Reg. 500,000
Legal Counsel Fee 500,000
Auditor's Fee 300,000
Salaries Wages 25,000,000
Trial Run Losses/Wastages 2,500,000
Total 31,119,329
Back To Project Cost

30. Initial Working Capital
Cash 30,000,000
Acc. Receivable 8,175,938
Inventory 95,224,517
Total Current Assets 133,400,455
Current Liabilities
Acc. Payable 17,482,500
Accruals 500,000
Total Current Liabilities 17,982,500
Initial Net Work Cap 115,417,955
Back To Project Cost

31. 

32. Total Output (Panels) 45,000
Cons. Year-1 Year-2 Year-3 Year-4
Capacity Utilization 5% 70% 80% 90% 95%
Output (Panel) 2,250 31,500 36,000 40,500 42,750
Opening Inventory 0 113 1,575 1,800 2,025
Ending Inventory (%) 5% 5% 5% 5% 5%
Ending Inventory 113 1,575 1,800 2,025 2,138
Output Sold 2,138 30,038 35,775 40,275 42,638
Raw Material-Panel 2,813 39,375 45,000 50,625 53,438
Accounts Receivable (15%) 8,175,938 114,893,438 136,839,375 154,051,875 163,088,438
Accounts Payable (40%) 17,482,500 244,755,000 279,720,000 314,685,000 332,167,500
Wastage 25%

33. Manufacturing Cost (Per Panel) Cost/Panel (PKR)
Raw Material 15,500.00
Packing Material 50.00
Stores & Spares 1,000.00
Salaries & Wages 1,200.00
Fuel & Power 150.00
Insurance 65.00
Repair &Maint 100.00
Misc OH 100.00
Depreciation 528.38
Total 18,693.00

34. Item Required (KG) Rate (PKR)/KG Total Cost
Silicon 8.00 150.00 1,200.00
Aluminum 1.00 220.00 220.00
Copper 0.50 680.00 340.00
Titanium Di Oxide 0.10 8.50 0.85
Faro Silicon 1.00 132.00 132.00
Phosphorus 4.00 3,400.00 13,600.00
Total 14.60 4,590.50 15,492.85

35. Manufacturing Cost Construction Year-1 Year-2
Raw Material 43,593,750 610,312,500 697,500,000
Packing Material 112,500 1,575,000 1,800,000
Stores & Spares 2,250,000 31,500,000 36,000,000
Salaries & Wages 2,700,000 37,800,000 43,200,000
Fuel & Power 337,500 4,725,000 5,400,000
Insurance 146,250 2,047,500 2,340,000
Repair &Maint 225,000 3,150,000 3,600,000
Misc. OH 225,000 3,150,000 3,600,000
Depreciation 3,962,841 23,777,044 23,777,044
Cost of Goods Mfg. 53,552,841 718,037,044 817,217,044

36. Manufacturing Cost Year-3 Year-4
Raw Material 784,687,500 828,281,250
Packing Material 2,025,000 2,137,500
Stores & Spares 40,500,000 42,750,000
Salaries & Wages 48,600,000 51,300,000
Fuel & Power 6,075,000 6,412,500
Insurance 2,632,500 2,778,750
Repair &Maint 4,050,000 4,275,000
Misc. OH 4,050,000 4,275,000
Depreciation 23,777,044 23,777,044
Cost of Goods Mfg. 916,397,044 965,987,044

37. COGS (PKR) Cons Year-1 Year-1 Year-1 Year-1
Add: Begin Inv. 2,677,642 35,901,852 40,860,852 45,819,852
CGS Avail for Sale 53,552,841720,714,686 853,118,896 957,257,896 1,011,806,896
Less: Ending Inv. 5.0% 2,677,642 35,901,852 40,860,852 45,819,852 48,299,352
COGS 50,875,199684,812,834 812,258,044 911,438,044 963,507,544

38. Selling & Admn. Expenses (PKR) Cost/Panel
Distribution Cost 600.00
Administrative Exp. 300.00
Other Operating Exp. 200.00
Total 1,100.00

39. Cons. Year-1 Year-2 Year-3 Year-4
Dist. Cost 1,350,000 18,900,000 21,600,000 24,300,000 25,650,000
Admn. Exp. 675,000 9,450,000 10,800,000 12,150,000 12,825,000
O. O. Exp. 450,000 6,300,000 7,200,000 8,100,000 8,550,000
Total 2,475,000 34,650,000 39,600,000 44,550,000 47,025,000

40. Financing Plan (PKR)
Debt (60%) 269,243,848
Equity (40%) 179,495,899
Total 448,739,747

41.  Selling Price/Panel Will Be PKR 25,500
 There Will Be 9 Panels/Home So Total Cost Will Be
PKR 229,500
 An Inverter And A Germanium Battery Cost Around
PKR 150,000
 Total Cost To The Customer Will Be Around PKR
400,000
 The Cost Will Be Around PKR 1,000/Month
 And Obviously Without Any Load Shedding 

42. 

43. Cons. Year-1 Year-2
Sales Revenue 54,506,250 765,956,250 912,262,500
Less: C O G S 50,875,199 684,812,834 812,258,044
Gross Profit 3,631,051 81,143,416 100,004,456
Admn. & Selling Exp. 2,475,000 34,650,000 39,600,000
Operating Profit 1,156,051 46,493,416 60,404,456
Less : Amortization 6,000,000 6,000,000
1,156,051 40,493,416 54,404,456
Less: Interest Expense 40,197,626 33,782,169
EBT 1,156,051 295,790 20,622,287
Taxes (35%) 404,617.99 103,526 7,217,800
Net Profit 751,433 192,263 13,404,486

44. Year-3 Year-4
Sales Revenue 1,027,012,500 1,087,256,250
Less: C O G S 911,438,044 963,507,544
Gross Profit 115,574,456 123,748,706
Admn. & Selling Exp. 44,550,000 47,025,000
Operating Profit 71,024,456 76,723,706
Less : Amortization 6,000,000 6,000,000
65,024,456 70,723,706
Less: Interest Expense27,366,712 20,951,255
EBT 37,657,744 49,772,451
Taxes (35%) 13,180,210 17,420,358
Net Profit 24,477,534 32,352,093

45. Inflows Cons. Year-1 Year-2 Year-3 Year-4
Operating Profit 46,493,416 60,404,456 71,024,456 76,723,706
Add: Dep. 200,000 200,000 200,000 200,000
C F From Op. Activities 46,693,416 60,604,456 71,224,456 76,923,706
Current Liabilities
Acc. Payable 17,482,500 227,272,500 34,965,000 34,965,000 17,482,500
Accruals 500,000 9,500,000 10,000,000 10,000,000 30,000,000
Financing
L. T. Debt 269,243,848
Equity 179,495,899
Total Inflows 466,722,247 283,465,916 105,569,456 116,189,456 124,406,206

46. Out-flows Cons. Year-1 Year-2 Year-3 Year-4
Acc. Rec. (8,175,938) (106,717,500)(21,945,938) (17,212,500) (9,036,563)
Inventory (95,224,517) (55,302,335) (18,537,125) (12,023,063) (9,242,859)
Other Cur Ast (500,000) (250,000) (375,000) (562,500) (843,750)
Fixed Assets (298,739,747)
Int. Payment (40,197,626) (33,782,169) (27,366,712) (20,951,255)
Repayment Debt (42,604,940) (42,604,940) (42,604,940) (42,604,940)
Total Outflow (402,640,201)(245,072,402)(117,245,172)(99,769,715) (82,679,367)
Difference 64,082,045 38,393,514 (11,675,716) 16,419,741 41,726,839
Op. Cash Bal. 0 30,000,000 68,393,514 56,717,798 73,137,540
End Cash Bal. 30,000,000 68,393,514 56,717,798 73,137,540 114,864,378

47. Cons. Year-1 Year-2 Year-3 Year-4
Current Assets
Cash 30,000,000 68,393,514 56,717,798 73,137,540 114,864,378
Acc. Rec. 8,175,938 114,893,438 136,839,375 154,051,875 163,088,438
Inventory 95,224,517 150,526,852 169,063,977 181,087,040 190,329,899
Store And Sp. 34,082,045 57,555,563 72,522,543 67,354,890 46,106,042
Other C. A. 500,000 750,000 1,125,000 1,687,500 2,531,250
Total C. A. 167,982,500 392,119,367 436,268,694 477,318,844 516,920,007
Fixed Assets
Total F. A. 268,739,747 268,739,747 268,739,747 268,739,747 268,739,747
Accu. Dep. 23,777,044 47,554,088 71,331,131 95,108,175
Net Fixed
Assets
268,739,747 244,962,703 221,185,659 197,408,615 173,631,572
Pre. Expenses 30,000,000 24,000,000 19,200,000 15,360,000 12,288,000
Total Assets 466,722,246 661,082,070 676,654,353 690,087,460 702,839,579

48. Cons. Year-1 Year-2 Year-3 Year-4
Current Liabilities
Accounts Payable 17,482,500 244,755,000279,720,000314,685,000332,167,500
Accruals 500,000 10,000,000 20,000,000 30,000,000 60,000,000
Curr Mat. Of L T Debt 42,604,940 42,604,940 42,604,940 42,604,940 42,604,940
Total Current Liabilities 60,587,440 297,359,940342,324,940387,289,940434,772,440
Long Term Debt 226,638,908 184,033,967141,429,02798,824,087 56,219,146
Equity
Owner's Equity 179,495,899 179,495,899179,495,899179,495,899179,495,899
Retained Earnings 192,263 13,404,486 24,477,534 32,352,093
Total Equity 179,495,899 179,688,162192,900,385203,973,432211,847,992
Total Debt & Equity 466,722,247 661,082,070676,654,352690,087,459702,839,578

49. 

50. Ratio
Gross Profit To Sales 10.59%
Cost Of Goods Sold To Sales 89.41%
Net Profit To Sales 0.03%
Return On Assets 0.04%
Return On Equity 0.11%
Current Ratio 2.77167
Quick Ratio 1.19998
Inventory Turnover 7.19156
Asset Turnover 1.64114
Debt Ratio 61.54%
Leverage Ratio 1.26264

51. 
Sh@fqat Ali Goraho

52. Target
Market
PlaceProduct
Price Promotion

53.  Users Of Outdoor Products And Services:
o Corporate Sector (Bill Boards & Hoardings)
o Retail Outlets
o Beauty Saloons
o Fast Food Chains
o Education Institutes
o Street Lights & Signals (Long Term Planning)

54.  House Hold Users
 Hostiles
 Party Decorators
 Hospitality Service Providers

55.  Public Relations
o Conduct Seminars On Corporate Level To Attract Clients Of
Advertising Agencies
 Above The Line
o Advertising On Bill Boards & News Papers
 Sales Discounts
o Giving Discounts On Bulk Buying Of Products

56.  Savings In Electricity & Generator Bills
 Over Coming The Energy Crises
 Save Replacements Cost Of Electronics Appliances
 Save Maintenance Cost And Repair Cost
 Cost Effectiveness
 Emerging Market