pp tr bd dudley

TRANSPORT BUSINESS AT BANGLADESH

Asking US$60 million from any overseas lender / financial consultant firm, with very low interest rate (including

consultancy fees and interest/service charge, not over than 2% P.A.)

Potential project transportation business at Bangladesh

This project is very suitable for Joint Venture with any Muslim

Investor against Profit and Loss sharing basis

Page 1 of 32


PRE-INVESTMENT FEASIBILITY REPORT

on

TRANSPORT BUSINESS AT BANGLADESHfor

XXXXX BD LIMITEDat

Madanpur, Gazipur and BograCorporate Office:

Suite 03/3rd floor, 3/3B Purana Paltan, Dhaka-1000Tel: 88-02-7976307, 88-01710-962792Email: [email protected]

Page 2 of 32

TRANSPORT BUSINESS AT BANGLADESHTABLE OF CONTENTS

Items PageIntroduction 1Project Summary 2Management & Organization 5Technical Aspect 7Market Aspect 11Cost of the project 14Cost Estimate of Building & Civil Works 15Local Machinery 17Imported Machinery 19Working Capital 21Earning forecast 22Sales Revenue 23Sensitivity Analysis 24Operating Expenses 27Wages & Salaries 28Estimate of general, admin & other expenses 30Financial expenses 32Break-even Analysis 33Cash Flow Statement 34Debit Services Coverage Ratio 35Pay Back Period 36FIRR 37Benefit of the project 38Contribution to GDP 39Balance sheet 40

Page 3 of 32

TRANSPORT BUSINESS AT BANGLADESHINTRODUCTION

Xxxxxx Ltd is a private limited company. The company has taken up a program to set up a transport business for inter district luxury bus services. The project has been designed to equip with imported 100 / (200+ for JV) luxury bus from China. Local machinery and equipments will be procured locally. The project workshop will be located at Madanpur, Gazipur and Bogra.

The proposed project will be equipped with most modern and sophisticated luxury bus and equipment to be collected from reputed supplier at competitive price. The project will be run by highly trained and skilled manpower. The project will be self-sufficient continuous free operation of the daily bus services.

Xxxxxx Ltd has appropriate technical and management resource persons to run the bus services, expecting to earn huge revenue and create employment opportunity thus contribute socio-economic development of the country.

The Managing Director and other Director of the Project have dynamic leadership in various Business sector and they have sufficient means and wealth in the country to provide equity of the proposed project. So, the proposal for sanctioning loan from bank/financial institution may be accepted to all concern authorities with great pleasure.

Marketing Aspect

IntroductionBangladesh tends to be thought of as poverty-stricken and disaster-prone - a pity for a fascinating and beautiful country with a friendly, welcoming population. The transport sector of Bangladesh consists of a variety of modes. The country being a flat plain, all three modes of surface transport, i.e. road, railway and water are widely used in carrying both passengers and cargo.

More than half of Bangladesh has access to an all-weather hard surface road within 3 miles distance. There has been a dramatic expansion of road network in recent years. In 1947 there were only 461.8 kilometers of carpeting / metallic roads. In 1997, the total length of paved road under the Roads and Highways Department stood at more than 20,000 kilometers. It is estimated that mechanized road transport carry about 70% of the country's total passenger and cargo volume.

Local Bangladeshi buses are generally crowded, often to the extent of people riding on the bus steps (entrance) and sometimes even the roof. The state run Bangladesh Road Transport Corporation www.brtc.gov.bd (BRTC) buses usually fall into this category. However, there are luxurious air-conditioned bus services connecting major cities and popular tourist destinations. Green Line, Shyamoli shyamoli.paribahan.com, Silk Line but these are still not sufficient for our prime need.

Financial plan: Figure in "000"

Page 4 of 32

TRANSPORT BUSINESS AT BANGLADESHForeign Loan/Fund: FDI / US$60,000K, where Sponsor's Equity (0%)Total debt and equity: 100:0Percentage Sharing: Negotiable with JV Capitalist/ Private Investor

Cost of production and profitability:A statement showing forecast of earning which enter all includes cost of production, sales estimates, financial, admin incentive & selling expenses is given in Annexure. The main assumptions underlying the earning forecast are as under:

I. The capacity utilization of the project will be 70%, 80% & 90% from the first year to 3rd year and so no respectively.

II. The cost of raw materials as well as sales will be the same throughout the projected years on the assumptions price, incase raw materials be up set the proportionate price increase in sales.

III. There will be 5% increase in salaries & wages and a bonus equal to 2(two) months basic will be given each year.

IV. Depreciation has been charged @ 20% on Machinery @ 5% in building and 20% in furniture and fixture & pre-operating expenses on straight -line method.

PROJECT SUMMERY1 Name of the project: Xxxxxx Ltd.2 Location of the project: Office: Suite 03 / 3rd Floor, 3/3B, Purana

Paltan, Dhaka-1000.Tel: 88-02-7976307, 8801710962792Email: [email protected] to: Md. Hafizul Haque

3 The Project:The project envisages setting up of a transport business for inter district luxury bus services. The project has been designed and equipped with imported 100 luxury buses from China. Local machineries and equipments to be procured locally.

4 Proposal:Request for issuance Bank Comfort Letter for issuance Bank Guarantee against foreign loan of US$ 60.00 million, where US$ 30 million will be deposited to the bank and US$ 30 million to meet the cost of imported luxury bus and a part of civil construction cost and other related costs. Instead of this JV will increase more transportation vehicle will higher profit from the estimated one.

5 Industrial classification:The project is covered under Transport Sub Sector and since its total fixed cost is above Tk.30 crore (US$ 4.286 M) it will be treated as

Page 5 of 32

mailto:[email protected]

TRANSPORT BUSINESS AT BANGLADESHa large scale industry as per industrial policy 1999.

6 Promoters: The project is being promoted by a group of directors in the company and formed a private limited company and registered with the Joint Stock Company.

7 Land and Location: The project workshop will be located at Gazipur, Madangonj and Bogra.

8 Building and other civil works: The proposed cost of building and civil works has been estimated at US$ 4.559 M.

9 Plant and Machinery:A. Imported Machinery: The cost of the proposed imported machinery

including the related expenses works out at US$ 14.695 M.

B. Local Machinery: The project requires some local machinery. The proposed cost of which works out at US$ 0.683 M.

10 Technical service & quality control: The suppliers of luxury bus will depute four foreign experts for three years to undertake the job of operational works and quality control. They will be treated as in service experts of the project and will be responsible for operation performance and maintenance of the luxury bus. They will also trend up the drivers and local technicians.

11 Erection and installation: Erection, installation, trial run operation and commissioning will be carried out by local erectors under the overall guidance & supervision of the experts to be deputed by the company cost estimated US$ 0.05 M.

12 Corporate set up: Private Limited Company / JV / FDI13 Product capacity of the project: The annual rated luxury bus services of the project

based on three shifts of eight hours each per day and three hundred sixty working days in a year. (Political unrest, may decrease maximum 30 working days)

15 Market aspect Road transport in Bangladesh is a private sector affair operating predominantly in domestic routes. The project is being established inter district bus services by Luxury Bus. The maintenance of its appropriate quality with other similar types of Luxury Bus service, it is expected that appropriate measures will be under taken. The project has captive market and entire Luxury bus will be in operation.

16 Economic aspect The project after implementation will create new job opportunity for 657 persons of different categories.

17 Machinery The project will require both imported and local machinery.

Page 6 of 32


Means of Finance: Foreign Fund (100%) US$ 60.00 Million

18 Debt- Equity ratio 100: 0

19 Financial Performance: Yr-1 Yr-2 Yr-3 Yr-4 Yr-5Sales 13,961 15,949 17,949 17,949 17,949Gross Profit 8,123 9,750 11,376 11,126 10,897Operating profit 7,305 8,876 10,446 10,137 9,878Net profit after tax 4,167 4,210 5,152 4,966 4,811

20 Ratio % Yr-1 Yr-2 Yr-3 Yr-4 Yr-5Gross Profit to Sales 58 61 63 62 61Operating profit to sales 52 56 58 56 55Net profit after tax 30 26 29 28 27

21 Debt service coverage: 3.01 3.70 4.08 4.02 3.98

22 Break Even Point Break even sales 34.82% of the assumed capacity

23 Employment Generation 657 Nos

24 Contribution to GDP US$ 14.913 million

25 FIRR 36.34%

Page 7 of 32

TRANSPORT BUSINESS AT BANGLADESHConclusion and Recommendation:

It reveals from the financial analysis that the project will be a profitable concern. The ratio analysis is satisfactory and acceptable. The project will have sufficient liquidity to pay all its liabilities. The BEP analysis shows sound position. The IRR indicate higher rate of return. The project will contribute to National Economy. In view of the above facts, it is found that the project is commercially, technically viable, Socially acceptable and financially rewarding. So investment from JV Capitalist / personal lender / Bank/Financial Institutions may be highly recommended. Joint Venture will get an extraordinary rate of return against the projected profit/IRR.

INTRODUCTION, PROMOTERS & MANAGEMENT

IntroductionThe promoters of Xxxxxx Ltd. is being applied for financial assistance for setting up a Transport Project at Madanganj, Gazipur and Bogra, Corporate Office: Room 03, 3rd floor, Soleman plaza, 3/3B Purana Paltan, Dhaka-1000 Tel: 7976307, Fax: XXXXXXXXXXXX. The total cost of the project' has been estimated at USD. 60 million..

Corporate set up: FDI / JV / Private Limited Company.

Promoters and Management.SI. No. Name of the Person Position in the Company No. of Shares

1 JV Capitalist Chairman XXXXX2 Md. Hafizul Haque Managing Director XXXXX3 XXXXX XXXXXXX Director XXXXX4 XXXXX XXXXXXX Director XXXXX5 XXXXX XXXXXXX Director XXXXX

Management and Organization:The overall affair of the company is vested with the Managing Director who will formulate the company's day to day policy with the help of the other Director/s. Experienced and skilled personnel will be deputed from the manufacturer of the luxury bus and recruited locally for smooth running of the project.

Page 8 of 32

TRANSPORT BUSINESS AT BANGLADESHThe proposed project will be equipped with most modern and sophisticated luxury bus and equipment. The workshop will be operated by highly trained and skilled manpower. The project will be self-sufficient continuous trouble free operation of daily bus services. The Managing Director and other Director/s of the project have dynamic leadership in various businesses and sector. So, the proposal for financial assistance may be accepted to all concern authorities with great pleasure.

Details of the promoters:

A)Name: XXXXXXXXXFather's Name : XXXXXXXXXXXX.Mother's Name : XXXXXXXXXXXXX.Present Address : XXXXXXXXXXXXree, Dhaka -1217Permanent Address: XXXXXXXXXXXXXXXXXXXXXDOB: 23/09/1967Education: M Sc. In Marine Biology.

B)Name: XXXXXXXX.Father's Name : XXXXXXXXXXXXXXX.Mother's Name : XXXXXXXXXXXXXXXPresent Address : XXXXXXXXXXXXXXXXXXXXPermanent Address: XXXXXXXXXXXXXXDOB:Education:National Id No :

Land and locationThe selected location is cheaper than other areas. Tariff structure can be availed. Transport facilities to run the project will not be problem. Manpower availability is enough.

TECHNICAL ASPECTINTRODUCTIONThe project will be set up at Xxxxxx Ltd, Madanganj, Gazipur and Bogra, Corporate Office: Suite 03/3rd floor 3/3B Purana Paltan, Dhaka-1000. Tel: 7976307, Fax: XXXXXX on the area of 20-acre land to carry on transport business. The project land is well communicated by road. All the infrastructure facilities like Wide Road, Wide Channel, Gas, Electricity etc. are available in the project area.For the selection of proposed luxury bus have been procured on the basis of performance considering versatility durability, cost benefit and improved operational performance. The required selected luxury bus is useful and balanced for the project and the prices of the luxury bus are competitive.GUARANTEE AND WARRANTY:All the items of the project offered by the suppliers a complete/ balance unit, guaranteed and trouble free performance/operation of all luxury buses, equipments and materials of the project for a period of three years from the date of operation of the bus services and also shall undertake the warranty of replacement free of cost of any part of the entire project as the case may be due to manufacturing defects. Suppliers shall be responsible for the efficiency and capacity of the luxury bus and other equipments on the trial production period.TECHNICAL SERVICE AND SUPERVISION:

Page 9 of 32

TRANSPORT BUSINESS AT BANGLADESHManufacturer shall depute four engineer to the BUYER'S work site to supervise the bus services, will also continue their services for the project for three years.

PRODUCT MIX AND PRODUCTION CAPACITYThe annual capacity of daily bus services of the project has been calculated on the basis of rated capacity the working days considered 360 days in year.

Items Quantity (At 100%Capacity) USD IN 000Production Passanger Daily Service Unit sales Total Value

price in USD.(a) Dhaka to Chittagong 40 20 7 2,044(b) Chittagong to Dhaka 40 20 7 2,044(c) Dhaka to Cox's Bazar 40 6 11 964(d) Cox's Bazar to Dhaka 40 6 11 964(e) Dhaka to Sylhet 40 10 9 1,241(f) Sylhet to Dhaka 40 10 9 1,241(g) Dhaka to Jessore, Khulana 40 6 9 788(h) Khulana, Jessore to Dhaka 40 6 9 788(i) Dhaka to Rajshahi 40 6 9 788(j) Rajshahi to Dhaka 40 6 9 788(k) Dhaka to Rangpur, Dinajpur 40 20 9 2,628(l)Dinajpur,Rangpur to Dhaka 40 20 9 2,628(m) Dhaka to Bogra, Noagaon 40 6 9 788(n) Noagaon, Bogra to Dhaka 40 6 9 788(o) Dhaka to Barishal 40 5 10 730(p) Barishal to Dhaka 40 5 10 730

19,944Note: Transport will be double+, if this project will be Joint Venture……

Land and locationThe project will be located at Madanganj, Gazipur and Bogra. The place is very suitable for setting up Transport Project. All infrastructure facilities like road, channel, power, water and commercial facilities are available at the project site and also flood free zone.

Building and other civil worksThe civil construction of the proposed project for main Factory' Building, raw materials go-down, finished goods go-down, generator room, sub-station room, workshop and maintenance room, boiler house, workers shed, security barrack, office building etc. Cost of the building & other civil works has been estimated at USD 4.559 million.

Machinery and EquipmentsImported MachineryThe project will be equipped with brand new most modern and sophisticated luxury bus with all auxiliaries and equipment. The luxury bus for the project will be imported from China.

Machinery: CNG Luxury Bus, CNG Station complete, Petrol Pump.

Local Machinery: In addition to the importable machinery, the project will also require some local machinery and equipment these are Generator, Transformer, Electric control panel, Electrical cables, Pipes, etc.

Erection and Installation: The machinery and equipment of the project will be installed, commissioned and put under trial run under the direct supervision of the foreign erectors to be deputed by the suppliers in this regard.

Page 10 of 32

TRANSPORT BUSINESS AT BANGLADESHUtilities:Power: The connected load of the project has been estimated at 440 KVA. The maximum requirement of power will be 400 KVA. The required will be available fromREB/DESA/PDB besides there will be a standby Generator of 330 KVA. For emergency purpose.Connected 440 KVAMaximum load 400 KVASource: PDB

Fuel and Lubricant:Item QuantityGrease 2500 kgsLubricating Oil 10000ItrsDiesel 620000 ItrsPetrol 120000 Itrs

Water: The total requirement of water for the project, llift up with the help of a Submersible pump.

Furniture Fixture and office Equipment: The project has office furniture fixture, computer, fax, telephone etc for which and amount of USD 50 thousand has been estimated.

Safety Provision: Precaution against fire, necessary fire fighting equipment and first aid box has been required for which an amount of USD 50 thousand has been estimated.

Environmental impact: Changes of environmental pollution are nil. Therefore, there will be no impact on environment because of erection and operation of the plant. No change of ecological imbalance is there.Stores and Spare: Store and Spare for the project has been estimated 1%, 1.55 & 2% for the 1 st, 2nd

and subsequent Years for total machinery cost.

Repair and Maintenance: The total manpower requirement of repair and maintenance for the machinery has been established at it 1%, 1.55 & 2% of its cost for 1st, 2nd and 3rd year operation respectively.

Manpower Requirement: The total manpower requirement for the project during commercial operation has been shown below and will be recruited locally.

A) Administrative:General Manager 1Manager (Admin) 1Admin Officer 2Accounts officer 2Commercial Officer/Asstt. Com. Of 6Stores Officer 2Medical Officer 2Medical Asstt. 6Security Officer 1Labour Officer 1Asstt. Accountant 2Wage Clerks 2Compter/telex/fax operator 2Time Keeper 2Clerk-cum-Typist 3Compounder 2Driver 6Bus Supervisor 100

Page 11 of 32

China CNG Bus

TRANSPORT BUSINESS AT BANGLADESHSecurity Guard 4Peon 4Sweeper 2MarketingTicket Sales Man 100Ticket sales Asstt. 100

B) Technical personnel:Workshop Manager 3Supervisors 6Automobile Engineer 3Automobile Mechanic 6Welder 3Driver 100Helper 100Skilled labour 12Semi-skilled labour 6Labour 6Generator operator 2CNG Station Manager 6CNG Mechanic operator 12Electrical Mechanic 3Security Officer 3Security Guard 12Store Officer 2Asstt Store Officer 3Computer Operator 2Computer Operator Asstt 3Office Asstt. 3Sweeper 8

Total Manpower will be (A+B) = 657 persons

Rents, Tax & Insurance: The rents and insurance`s have been estimated @ 1% of the Fixed Assets of the project.Depreciation and Amortization: The following basis has been used for calculation of depreciation on Fixed Assets of the project:

Fixed Assets Depreciation RateFactory Sheds/ Building 5% P.A.Machinery/ Equipment 20% P.A.

Cost of Installation: The expense is composed of the cost of expatriate and local manpower necessary for erection of the plant. The erection cost is estimated of USD 50 thousand.

Foreign Direct Investment (FID) has played a key role a key in the modernization of the Bangladesh economy for the last 15 years.

Inflows of foreign direct investment

There was an inflow of $666m foreign direct investment in 2007, which increased significantly in 2008 to $1086m. As of June 2009, inflows of foreign direct investment recorded to $358m.

Page 12 of 32


Inflows of foreign direct investment during 2001-2009*

As of June, 2009Source: Bangladesh Economic Review-2010 (Bangla version), Ministry of Finance

Private investment statistics:

YearProposed local investment

Proposed foreign investment

Total proposed investment Growth %

Project US$ m Project US$ m Project US$ m2005-2006 1,754 2,662.31 135 3,621.15 1,889 6,283.46 125%

2006-2007 1,930 2,848.98 191 1,728.26 2,121 4,577.24 (-27%)

2007-2008 1,615 2,833.76 143 787.39 1,758 3,621.15 (-21%)

2008-2009 1,336 2,480.72 132 2,137.53 1,468 4,618.25 27%

2009-2010 876 1,831.44 92 617.68 968 2,449.12 -

* February, 2010

Source: Bangladesh Economic Review-2010 (Bangla version), Ministry of Finance

13.1 TRANSPORT AND COMMUNICATION BY TYPE .

ClassificationUnits

2002-03 2003-04 2004-05Airway (Nos) 17 17 14DC-10 (Nos) 12 12 10Fokker/ATP (Nos) 5 5 4

Passengers Carried (Nos) '000' 1529000 1647000 1639000

Goods Carried '000' MT 39000 38000 40000 Revenue (Tk in Crore) -Income 1901.53(P) 2179.59(E) -Expenditure 1954.71(p) 2162.02(E) -Railway -Railway Track Operated (Km) - 2880.07 -Goods Traffic Ton Km (Million) 951.99 922.3 -Passengers (Million) Traffic Km 4024.21 4392 -Rail Engine (Nos) 275 275 -Freight Wagons (Nos) 10605 10605 -Passengers Coaches 1273 1273 -

Page 13 of 32

TRANSPORT BUSINESS AT BANGLADESHOther Coaches 137 137 -Unorganized Road Transports (000) Rickshaw 1820 1919 1980Push Cart 21 22 23Bullock Cart 56 55 54Organized Road Transports (000) -Bus/Minibus 32 33 34Microbus 16 17 19Truck 51 53 55Motor Car/Taxi/Jeep 84 90 94Auto Rickshaw 85 94 100Tractors/Tailor/Others 18 21 Organized Water Transports (000) Vessel owned by BSC (Nos) 13 13 13Vessel owned by BIWTC (Nos) 208 194 194Unorganized Water Transports (Nos) Country Boat for Motorize 67 68 69Country Boat for Cargo 68 65 66Country Boat for Passenger 118 110 111Communication Facilities 3783 3914 3937Post Office (Nos) 9859 10007 9886Telegraph Office (Nos) 657 - -Telephone Sets '000' (Nos) 707 967 1010Source : Economic Revue 2004, BBS and statistical Pocketbook 2005

Foreign and joint venture investmentIn the year 2009-10 (February), three were 89 new foreign and joint venture investment project registered to BOI which amount to $590m. The project was invested to mainly in the service engineering clothing and auricular sectors.

Sector wise foreign and joint venture investment during 2009-2010*

* As of February, 2010Source Bangladesh Economic Review-2010 (Bangla version), Ministry of Finance Country wise foreign and joint venture investment during 2009-2010*

Country No. of project Proposed investment (US$ M)Saudi Arabia 3 478,652.17Australia 4 2,036.23

Page 14 of 32

TRANSPORT BUSINESS AT BANGLADESHUSA 5 2,990.33Finland 2 3,023.89India 9 8,451.53South Korea 12 33,768.91Malaysia 3 3,056.52Netherlands 5 8,544.76China 12 21,000.36United Kingdom 5 3,507.85Pakistan 2 990.91Japan 8 2,624.85Denmaek 1 1,217.39Sir Lanka 2 646.23Canada 2 1,017.23Taiwan 1 502.97Singapore 4 1,929.62Turkey 1 150.94Greece 1 156.81Italy 2 1,039.95Hong Kong 5 14,805.94Total 89 590,114.91

As February, 2010

Page 15 of 32

TRANSPORT BUSINESS AT BANGLADESHCOST OF THE PROJECT

SL. No. Item Existing

WealthProposed Investment Total

2 Building & civil Works 4,559 4,559

3 Imported Machinery

Duty (38%)

Marine Insurance (1%)

Clearing & Forwarding (1%)

L/C Commission (1%)

Pre-shipment inspection charge (0.5%)

14,670

5,584

147

147

147

73

14,670

5,584

147

147

147

73

4 Local Machinery 683 683

5 Cost of Installation 50 50

6 Vehicles 93 93

7 Office equipment, furniture & Fixtures 50 50

8 Salary equipments 10 10

9 Contingencies

On Machinery`s (5%) 735 735

10 Per-operating and start up expenses 3,000 3,000

11 Working capital 52 52

Fixed cost - 30,000 30,000

Means of Finance:Foreign Fund 30,000

COST OF BUILDING & OTHER CIVIL WORKS FOR XXXXXX LTD.:

(Existing)Sl No. Items Specification Covered Rate of Estimated costarea sq.m. const. (BDT) (BDT 000)

Page 16 of 32


11 Surface Drain Surface drain

12 Internal road Road Size: 167368mx 7.62m

13 Water tank Water tank over the root of

Factory building Size: (ht-2.0) 8.7mx5.48m

14 Electrical Meter Size: ½ 10-768.531/2 room

15 Spare parts Size: 125.91ms 45.12m Store (First Floor)

16 Air compressor Size: 1 10.97m 17.37m Store (First Floor)

Total 4559

LOCAL MACHINERYUSD in “000”

Page 17 of 32

1 Main workshopAt Gazipur

5m ht. R.C.C frame structure factory building godowns, generators building with to storied foundation (without under ground duct)

2 WorkshopMadangonj

At 6m ht R.C.C. frame godowns building (ground floor) size:25.91m 27.43m

3 Workshop atBogra

A/C plant room over the factory building. As per machine suppliers drawing.

4 Ducthumidification

For Under ground duct with R.C.C wall with net Cement finishing (water tight) Size: 1m 1.5m

5 ResidentialBuilding

6(six) Storied R.C.C. frame structure residential building size:68.8m34.4m = 1829.30,62.18m34.45mc = 1070.70

6 AdministrativeBuilding

3 (Three storied R.C.C. frame structure administrative building/security & labour office

7 Workshop &Quarter

4 storied R.C.C. frame workshop building and quarter, (Ground Floor to 3rd Floor) size: 4 x 10.97m x 5.46m

8 Scrap Yard Scarp yard Size : 18.84m 12.19m

9 Raw Material Store R.M.S. Size: 1/2 1.076m 8.53m1/2

10 Boundary wall Boundary wall with R.C.C. column @ 8`c/c with 5 thick wall plaster Both side & snowcem (ht-8-0)

TRANSPORT BUSINESS AT BANGLADESHSl No. Item Quantity Unit Price Total Price1 Way bill2 Ticket printing3 Different size leather machine & ancillary equip.4 Ticket counter and office5 Generator6 Transformer7 Electric control panel

683

Per- Operating ExpensesUSD in “000”

Sl No Item Total Price1 Service Charge & 1st year interest, Total 2% on USD 60 million 1200

1200

IMPORTED MACHINERY (Proposed)USD in “000”

Sl No. Particulars Quantity Unit Price Total Price

1

23

CNG Luxury Bus, ChinaYUTONG HONGKONG LIMITEDCNG Station CompletePetrol pump

100

66

122200

30000075000

12220

180067514,695

LIST OF VECHICLESUSD in “000”

Items Quantity Unit Price Total Price (USD)i) Hino Ranger Covered Van Capacity 7000KG

iv) Toyota LiteageTotal

1

2

36

57

US$ “000” 93

Page 18 of 32

TRANSPORT BUSINESS AT BANGLADESHWORKING CAPITAL REQUIREMENT

USD in ‘000’A) Current Assets:Stores & SparesFuel & LubricantWagesTotal current assets

Tied up period15 Days15 Days15 Days

Yr-13202952

Yr-26223058

Yr-310233264

Yr-413243370

Yr-516263577

B) Current Liabilities:Working capital (100%) loan 52 58 64 70 77Net working capital requirement(%) Sponsors Equity - - - - -Net Working Capital 52 58 64 70 77

EARNING FORECASTUSD in ‘000’

Sales revenueCost of goof soldGross ProfitAdmin & selling expNet Operating ProfitFinancial expenseNet profit before Tax

Yr-113,9615,8388,1238187,3053606,645

Yr-215,9556,2059,7508748,8761,8607,016

Yr-317,949657311,37692910,4461,8608,586

Yr-417,9496,82411,12698810,1371,8608,277

Yr-517,9497,05210,8971,0209,8781,8608,018

Tax 40%Net profit after tax

27784,167

28064,210

34355,152

33114,966

32074,811

Reserve fund for currencyFluctuation (2%)Profit after reserve fundReturn on fixed deposit of currencyFluctuation amount (9%)

Profit after return on fixed deposit

Share Holder Dividend (10%)

Retained earning

Ratios:Gross profit to salesOperation profit to salesNet Profit to sales

600

3,567

-

3567

812

2755

585220

557

3,652

54

3706

975

2731

615617

514

4,638

50

4688

1138

3550

635820

471

4,495

46

4541

1113

3429

625619

429

4,382

42

4425

1090

3335

615519

SALES REVENUEUSD in ‘000’

Page 19 of 32


Rated capacityCapacity utilization`sNet Sales

Yr-119,94470%13,961

Yr-219,94480%15,955

Yr-319,94490%17,949

Yr-419,94490%17,949

Yr-519,94490%17,949

Assumptions Sales EstimateAssumptions:1. Operating Time and Production period: 330-360 working days in year.2. Assumed capacity Utilization : 70%, 75%, 80%, 85%, for the 1st, 2nd, 3rd, 4th years respectively and 90% for the 5th and subsequent years:

USD in ‘000’

Production Passenger Daly service Unit salesPiece in USD Total Value

(a) Dhaka to Chittagong(b) Chittagong to Dhaka© Dhaka to Cox`s Bazar(d) Cox`s Bazar to Dhaka(e) Dhaka to Sylhet(f) Sylhet to Dhaka(g) Dhaka to Jessore, Khulana(h) Dhaka to essore, Khulana(i) Rajshahi to Dhaka(j) Dhaka to Rajshahi(k) Dhaka to Rangpur, Dinajpur(l) Rangpur, Dinajpur to Dhaka(m) Dhaka to Bogra, Noagaon(n) Bogra, Noagaon to Dhaka(o) Dhaka to Barishal(p) Barishal to Dhaka

40404040404040404040404040404040

2020661010666620206655

77111199999999991010

2,0442,0449649641,2411,2417887887887882,6282,62878878873073019,944

SENSITIVITY ANALYSIS-I

(On the basis of 10% decrease in the sales price)USD in ‘000’


Yr-112,5645,8386,7278185,9093605,549

Yr-214,3596,2058,1558747,2811,8605,421

Yr-316,1546,5739,5819298,6511,8606,791

Yr-416,1546,8249,3319888,3421,8606,482

Yr-516,1547,0529,1031,0209,8781,8606,223


2,2193,329

2,1683,252

2,7174,075

2,5933,889

2,4893,734

Reserve fund for currencyFluctuation (2%)Profit after reserve fund

6002,729

5572,695

5143,561

4713,418

4293,305

Page 20 of 32

TRANSPORT BUSINESS AT BANGLADESHReturn on fixed deposit of currencyFluctuation amount(9%)

Profit after return on fixeddeposit

Dividend (10%)

Retained earning

Retained earning :

-

2729

673

2057

54

2749

815

1734

50

3611

958

2653

46

3464

933

2531

42

3,348

910

2437

SENSITIVITY ANALYSIS-II

(On the basis of 10% increase in production cost)USD in ‘000’


Yr-113,9615,8388,1238187,3053606,945

Yr-215,9556,2059,7508748,8761,8607,016

Yr-317,9496,57311,37692910,4461,8608,586

Yr-417,9496,82411,12698810, 1371,8608,277

Yr-517,9497,05210,8971,0209,8781,8608,018


2,7784,167

2,8064,210

3,4355,152

3,3114,966

3,2074,811

Reserve fund for currencyFluctuation (2%)Profit after reserve fundReturn on fixed deposit of currencyFluctuation amount(9%)


Dividend (10%)

Retained earning

Retained earning :

6003,657

-

3567

812

2755

5573,652

54

3706

975

2731

5144,638

50

4688

1138

3550

4714,495

46

4541

1113

3429

4294,382

42

4,425

1090

3335

SENSITIVITY ANALYSIS-III

Page 21 of 32

TRANSPORT BUSINESS AT BANGLADESH(On the basis of 10% increase in production cost And 5% decrease in the sales price)

USD in ‘000’


Yr-113,2626,1307,1338186,3153605,955

Yr-21,1576,5158,6428747,7681,8605,908

Yr-317,0526,90210,1509299,2201,8607,360

Yr-417,0527,1659,8879888,8991,8607,039

Yr-517,0527,4049,6471,0208,6281,8606,768


2,3823,573

2,3633,545

2,9444,416

2,8154,223

2,7074,061

Reserve fund for currencyFluctuation (2%)Profit after reserve fundReturn on fixed deposit of currencyFluctuation amount(9%)


Dividend (10%)

Retained earning

Retained earning :

6002,973

-

2,973

713

2260

5572,988

54

3042

864

2177

5143,902

50

3,952

1015

2937

4713,752

46

3,798

989

2809

4293,632

42

3,675

965

2710

Page 22 of 32

TRANSPORT BUSINESS AT BANGLADESHOPERATING EXPENSES

USD in ‘000’

Raw materials at rated capacityCapacity utilization `sRaw materials at capacityWages & SalariesStorages & SparesRepairs and maintenanceRent, Tax & InsurancePower, Fuel & LubricantDepreciationMisc. Overhead expensesCost of goods sold

Yr-11,20270%84168977233004383,329965,838

Yr-21,20280%9627241541003005173,3291206,205

Yr-31,20290%1,0827602311773005513,3291446,573

Yr-41,20290%1,0827983082533005863,3291686,824

Yr-51,20290%1,0828383843303006203,3291687,052

ASSUMPTIONS COST OF RAW MATERIALS

Equipment of raw materials USD in ‘000’

Qty Unit Price TotalCNG for 100 bus 100CuM 0.22 803Per bus per day other expense 100 10 365Ticket Counter per month rent 100 20 24Ticket yearly 10

1202

Factory wages and salaries:USD in ‘000’

Technical Nos. Salary Annual salary

Workshop ManagerSupervisorsAuto Mobile EngineerAuto Mobile MachanicWelderDriverHelperSkilled labourSemi-skilled labourLabourGenerator operatorCNG Station ManagerCNG Machine operatorElectrical MachanicSecurity officerSecurity GuardStore officer

3 1000 36

6 500 363 700 256 300 223 200 7100 200 240100 100 12012 100 146 80 66 70 52 100 26 150 1112 100 143 150 53 150 512 120 172 150 4

Page 23 of 32

TRANSPORT BUSINESS AT BANGLADESHAsstt Store officerComputer operatorComputer operator Asstt.Office Asstt.Sweeper

3 100 42 100 23 100 43 80 38 80 8304 591

Benefits:

BasicIncrement (5%)

Bonus (2 months pay) Total

Yr-1591-59198689

Yr-259130620103724

Yr-362031651109760

Yr-465133684114798

Yr-568434718120838

Requirment of Water. Power. Fuel & Lubricants:Water:Sources of water: Project's own water supply system.Power:a) Source of power for operation: Projects own generator.b) Power development Board: For domestic use and general lighting. Theconsumption of power for this purpose has been estimated as under:Total Consumption: 400KW X 16 Hrs. X 360 = 2304000 KWHCost: 2304000 KWH X 4 = Tk. 9216000Govt. duty 2304000 KWH X 0.15 = Tk. 345600Total Tk in "000" 9562USD in "000" 137

Fuel and Lubricant:Item Quantity Rate in US Total Cost in USDGrease 2500kgs 2.3 6Lubricant Oil 10000 Itrs 0.6 6Diesel 620000 Itrs 0.65 403Petrol 120000 Itrs 1.15 138Total 553

Total power & Fuel consumption:

CapacityWaterPowerFuel & LubricantTotal

Yr-170%-96387483

Yr-275%-102415517

Yr-380%-109442551

Yr-485%-116470586

Yr-590%-123497620

Stores and SparesOn Vehicle machinery 0.5%,1%1.5%,2% and 2.5%

Yr-177

Yr-2154

Yr-3231

Yr-4308

Yr-5384

Page 24 of 32

TRANSPORT BUSINESS AT BANGLADESHRepair & MaintenanceMachinery 0.5%, 1%,1.5%,2% and 2.5%Building cost (0.5%)

Yr-1-

2323

Yr-277

23100

Yr-3154

23177

Yr-4231

23253

Yr-5308

23330

Rent. Tax, Insurance(1% of fixed cost) 300

DepreciationItem Amount Rate Amount

a) Building 4,559 5% 228b) Machinery 15,378 20% 3076

3304

Misc. Overhead expenses Yr-196

Yr-2120

Yr-3144

Yr-4168

Yr-5168

General Administrative and Selling ExpensesUSD in ‘000’

Yr-1 Yr-2 Yr-3 Yr-4 Yr-5Salaries (Admin) 541 568 597 627 658Directors Remunerations 137 137 137 137 137Postage, Telephone.E-mail, etc. 5 7 8 10 10Stationery & Printing 5 7 8 10 10Traveling & Conveyance 7 8 9 10 10Depreciation & Write off 26 26 26 26 26Audit fee 1 1 1 1 1Misc. expenses 96 120 144 168 168

818 874 929 988 1,020Assumptions:Admin. Salary

No. of ProposedDesignation Salary Annualsalary1 General Manager 1 1500 182 Manager (Admin) 1 500 63 Admin. Officer 2 300 74 Accounts officer 2 300 75 Commercial Officer/Asstt.com.Of 6 200 146 Stores Officer 2 150 47 Medical Officer 2 300 78 Medical Asstt. 6 150 119 Security Officer 1 150 210 Labour Officer 1 150 211 Asstt. Accountant 2 100 212 Wage Clerks 2 100 213 Computer/telex/fax operator 2 100 2

Page 25 of 32

TRANSPORT BUSINESS AT BANGLADESH14 Time Keeper 2 100 215 Clerk-cum-Typist 3 100 416 Compounder 2 100 217 Driver 6 150 118 Bus Superviser 100 120 14419 Security Guard 4 100 520 Peon 4 100 521 Sweeper 2 80 2

260Marketing22 Ticket Sales Man 100 100 12023 Ticket Sales Asstt. 100 70 84Total 353 464

Yr-1 Yr-2 Yr-3 Yr-4 Yr-5Basic 464 464 487 511 537Increment @ 5% - 23 24 26 27

464 487 511 537 564Bonus (2 months basic) 77 81 85 90 94Total 541 568 597 627 658

Depreciation % write offItem Cost Rate Total2. Vehicles 93 20% 193. Safety equipments 10 20% 24. Office equipment, furniture & fixtures 25 20% 5Total - 26

Postage, Telephone & E-mail: 1st yr. US$ 5000, 2nd yr, US$ 7000, 3rd yr, US$ 8000,4th yr. US$ 10000 and 5th yr. US$ 10000 has been considered each year.

Stationary & Printing: 1st yr. US$ 5000, 2nd yr, US$ 7000, 3rd yr, US$ 8000,4th yr. US$ 1000 and 5th yr. US$ 1000 has been considered each year.

Traveling & Conveyance: 1st yr. US$ 7000, 2nd yr, US$ 8000, 3rd yr, US$ 9000,4th yr. US$ 1000 and 5th yr. US$ 1000 has been considered for each year.

FINANCIAL EXPENSESUSD in ‘000’

Financial ExpensesLocal BG Fee 1.20%Interest 2%Total

Yr-1360-360

Yr-236012001560

Yr-336012001560

Yr-436012001560

Yr-536012001560

Assumptions:

Page 26 of 32

TRANSPORT BUSINESS AT BANGLADESHThough the principal Amount is US$ 60,000,000, so the principal amount will be return back, after completion of 11 (including 1 year grace period) years (at a time as US$60,000,000 + last installment of interest as 1,200,000=61,200,000US$)Service charge & 0%Interest = @ 2% on USD 60 million = US$1200000 X 9 installment (started from the 1st day of the first month of the third year) = US$10,800,000

BREAK EVEN ANALYSIS

1. Revenue excluding other income (10th year): 35,8982. Total cost of operation, Admin. 9,728 for the first five year X 2 = 19,456

Selling, Financial expenses

Analysis of total cost Total cost Fixed cost Variable costRaw MaterialsWages & SalariesPower, Fuel & LubricantStores & SparesRepair & MaintenanceDepreciation & Write offRent, Tax & InsuranceSalaries (admin.)Postage, Telephone & TelegramPrinting & StationeryTraveling & ConveyanceMisc. overheadAudit FeeFinanancial exp.

1,2028386203843303,3293006581010101681360

-1686277663,3293006583331681360

1,202670558308264---888---

8,221 5,196 3,025

I) PA/ Ratio S-V 17949-3038 14,9240.83S 17,949 17,949

II) Breakeven sales F 5,1966,249P/V Ratio 0.83

Note: This estimation is based only for the five years. So, it needs to multiply with 2 unit. Borrower has right to return Lenders amount, within 5th year and or the end of the 10th year.

Break even sales is 34.82% of the assumed capacity

Page 27 of 32

TRANSPORT BUSINESS AT BANGLADESHCASH FLOW STATEMENT

USD in ‘000’A. Source of fund Cont. Yr. Yr-1 Yr-2 Yr-3 Yr-4 Yr-5Paid up capitalOperating profitIncrease in current liabilitiesDeprecation & write offLoan from Foreign LenderTotal

--

-60,00060,000

7305523329-10,686

-887663329-12,211

-1044663329-13,782

-1013763329-13,473

-987863329-13,213

B. Utilization of fundFixed capital expenseIncrease in current assetsRepayment of principal amountTaxDividendCurrency fluctuation factorPayment of interestTotal

60000--

--60,000

-520

2,778812600360

4,602

-60

2,806975557

1,8606,304

-60

3,4351,138

5141,8606,953

-60

3,3111,113

4711,8606,761

-60

3,2071,090

4291,8606,592

Cash Surplus (A-B)Opening balance of cashClosing balance of cash

---

3,941-3,941

38643,9417,805

4,6867,80512,491

4,56912,49117,060

4,47917,06021,538

DEBT SERVICE COVERAGE RATIO

USD in ‘000’Income Yr-1 Yr-2 Yr-3 Yr-4 Yr-5Profit after dividendDepreciation and write offInterest on term loanTotal

2,7553,3293606,444

2,7313,3291,8607,921

3,5503,3291,8608,739

3,4293,3291,8608,618

3,3353,3291,8608,524

LiabilitiesInstallment of term loan

Debt service coverage ratio (Time)

2,1432,143

3.01

2,1432,143

3.70

2,1432,143

4.08

2,1432,143

4.02

2,1432,143

3.98

PAY BACK PERIOD

1. Amount to be paid back (project Cost) US$ 72,000,000

2. Amount to be available for interest for the lender from the income:- USD in ‘000’Item Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6

Net Interest

P. amount

- 1200 1200 1200 1200 1200

- - - - - -

Page 28 of 32

TRANSPORT BUSINESS AT BANGLADESHTotal 1200 1200 1200 1200 1200

Item Yr 7 Yr 8 Yr 93 Yr 10 Grand totalNet Interest

P. amount

1200 1200 1200 1200 12,000- - - 60,000 60,000

Total 1200 1200 1200 61,200 72,000

Pay Back Period = end of the 10th year.

FINANCIAL INTERNAL RATE OF RETURN

Year Cost Benefit Net cash flow NPV discounting35%

NPV discounting40%

012335-9 year10 Salvage Value

30,0005266666

-10,63412,20513,77613,46613,2071,302

(30,000)10,58212,19913,76913,46013,3011,302

(30,000)7,8416,6975,5904,0526,64065

(30,000)7,5556,2225,0123,5005,24146

885 (2,425)

Though the principal Amount is US$ 60,000,000, so the principal amount will be return back, after completion of 10 years (at a time as US$60,000,000 + last installment of interest as 1,200,000=61,200,000US$)Service charge & Interest @ 2% on USD 60 million = US$1200000 X 9 installment (started from the 1st day of the second year) = US$10,800,000

Gross amount to be paid to the Lender will be: US$ (61,200,000 + 10,800.000) = US$ 72,000,000

FIRE = 36.34%

Assumptionsb) The project life (economic) is considered to be 10 years without any major replacement.c) The fixed cost of the project is estimated at US$ 30 Mln.

BENEFIT OF THE PROJECT

Year Operating Profit Depreciation Total1234

730588761044610137

3329332933293329

10,63412,20513,77613,466

Page 29 of 32

TRANSPORT BUSINESS AT BANGLADESH5 9878 3329 13,207

Salvage valueLandBuildingMachineryInventory Cost

100%10%5%100%

-456769771,302

Inventory Calculation Yr 1 Yr 2 Yr 3 Yr 4 Yr 5WagesFLS & S

2920352

3022658

32231064

33241370

35261677

Incremental Inventory 6 6 6 6 6

1. Contribution to GDP:The project will contribute an amount of US$ 14.913 M to the gross domestic products of the country which is shown as under:

US$ in '000' A. Net Sales (5th year) 17,949

B. Inter-farm Transaction:Raw materials 1,202Repair & maintenance 330Rent, Tax & Insurance 300Water, Power & Fuel 620Stores & Spares 384Postage, Telephone & Telegram 10Printing & Stationery 10Traveling & Conveyance 10Audit fee 1Misc. overhead 168

3,036

C. Contribution to GDP( A-B) 14,913

2. Directs employment generation 657 persons. Most of employees will be skilled and unskilled labour. From this point of view the project will help to improve distribution of income. Besides, additional employment opportunities will be created for production, supply and distribution of materials and products.

PROJECTS BALANCE SHEET

Page 30 of 32

TRANSPORT BUSINESS AT BANGLADESHConst.ASSETS Year Yr-1 Yr-2 Yr-3 Yr-4 Yr-5Current assetsCash & Bank balanceOther current assetsTotal current assets

- 3,941523,993

7,805587,863

12,4916412,555

17,0607017,130

21,5387721,615

Fixed assetsFixed assets NetReturn on Fixed DepositTotal Fixed assetsTotal assets

30,00030,00030,00060,000

26,6713,000

29,67159,671

23,3423,000

26,34256,342

20,0133,000

23,01353,013

16,6843,000

19,68459,684

13,3543,000

16,35446,354

LIABILITIES & OWNERS EQUITYLiabilitiesTerm loanShort term loanTotal liabilities

60,000060,000

60,000060,000

60,000060,000

60,000060,000

60,000060,000

60,000060,000

Page 31 of 32


EquityPaid up capitalRetained earningsTotal equityTotal liabilities & equity

---60,000

-2,7552,75560,664

-5,4865,48661,259

-9,0369,03662,672

-12,46512,46563,964

-15,80015,80065,162

Page 32 of 32

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