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TRANSPORT BUSINESS AT BANGLADESH
Asking US$60 million from any overseas lender / financial
consultant firm, with very low ...
TRANSPORT BUSINESS AT BANGLADESH
PRE-INVESTMENT FEASIBILITY
REPORT
on
TRANSPORT BUSINESS AT BANGLADESH
for
XXXXX BD LIMITE...
TRANSPORT BUSINESS AT BANGLADESH
Page 3 of 34
TRANSPORT BUSINESS AT BANGLADESH
TABLE OF CONTENTS
Items Page
Introduction 1
Project Summary 2
Management & Organization 5...
TRANSPORT BUSINESS AT BANGLADESH
INTRODUCTION
Xxxxxx Ltd is a private limited company. The company has taken up a program ...
TRANSPORT BUSINESS AT BANGLADESH
Green Line, Shyamoli shyamoli.paribahan.com, Silk Line but these are still not sufficient...
TRANSPORT BUSINESS AT BANGLADESH
other related costs. Instead of this JV will
increase more transportation vehicle will
hi...
TRANSPORT BUSINESS AT BANGLADESH
services by Luxury Bus. The maintenance of its
appropriate quality with other similar typ...
TRANSPORT BUSINESS AT BANGLADESH
Conclusion and Recommendation:
It reveals from the financial analysis that the project
wi...
TRANSPORT BUSINESS AT BANGLADESH
personnel will be deputed from the manufacturer of the luxury bus and recruited locally f...
TRANSPORT BUSINESS AT BANGLADESH
All the items of the project offered by the suppliers a complete/ balance unit, guarantee...
TRANSPORT BUSINESS AT BANGLADESH
Local Machinery: In addition to the importable machinery, the project will also require s...
TRANSPORT BUSINESS AT BANGLADESH
Stores Officer 2
Medical Officer 2
Medical Asstt. 6
Security Officer 1
Labour Officer 1
A...
TRANSPORT BUSINESS AT BANGLADESH
Depreciation and Amortization: The following basis has been used for calculation of depre...
TRANSPORT BUSINESS AT BANGLADESH
Fokker/ATP (Nos) 5 5 4
Passengers Carried (Nos) '000' 1529000 1647000 1639000
Goods Carri...
TRANSPORT BUSINESS AT BANGLADESH
Source : Economic Revue 2004, BBS and statistical Pocketbook 2005
Foreign and joint ventu...
TRANSPORT BUSINESS AT BANGLADESH
COST OF THE PROJECT
SL.
No.
Item
Existing
Wealth
Proposed
Investment
Total
2 Building & c...
TRANSPORT BUSINESS AT BANGLADESH
Means of Finance:
Foreign Fund 30,000
COST OF BUILDING & OTHER CIVIL WORKS FOR XXXXXX LTD...
TRANSPORT BUSINESS AT BANGLADESH
13 Water tank Water tank over the root of
Factory building Size: (ht-2.0) 8.7mx5.48m
14 E...
TRANSPORT BUSINESS AT BANGLADESH
iv) Toyota Liteage
Total
2 57
US$ “000” 93
Page 20 of 34
TRANSPORT BUSINESS AT BANGLADESH
WORKING CAPITAL REQUIREMENT
USD in ‘000’
A) Current Assets:
Stores & Spares
Fuel & Lubric...
TRANSPORT BUSINESS AT BANGLADESH
SALES REVENUE
USD in ‘000’
Rated capacity
Capacity utilization`s
Net Sales
Yr-1
19,944
70...
TRANSPORT BUSINESS AT BANGLADESH
Tax 40%
Net profit after tax
2,219
3,329
2,168
3,252
2,717
4,075
2,593
3,889
2,489
3,734
...
TRANSPORT BUSINESS AT BANGLADESH
deposit
Dividend (10%)
Retained earning
Retained earning :
812
2755
975
2731
1138
3550
11...
TRANSPORT BUSINESS AT BANGLADESH
OPERATING EXPENSES
USD in ‘000’
Raw materials at rated capacity
Capacity utilization `s
R...
TRANSPORT BUSINESS AT BANGLADESH
Security officer
Security Guard
Store officer
Asstt Store officer
Computer operator
Compu...
TRANSPORT BUSINESS AT BANGLADESH
483 517 551 586 620
Stores and Spares
On Vehicle machinery 0.5%,1%
1.5%,2% and 2.5%
Yr-1
...
TRANSPORT BUSINESS AT BANGLADESH
3 Admin. Officer 2 300 7
4 Accounts officer 2 300 7
5 Commercial Officer/Asstt.com.Of 6 2...
TRANSPORT BUSINESS AT BANGLADESH
FINANCIAL EXPENSES
USD in ‘000’
Financial Expenses
Local BG Fee 1.20%
Interest 2%
Total
Y...
TRANSPORT BUSINESS AT BANGLADESH
II) Breakeven sales F 5,196
6,249
P/V Ratio 0.83
Note: This estimation is based only for ...
TRANSPORT BUSINESS AT BANGLADESH
Liabilities
Installment of term loan
Debt service coverage ratio (Time)
2,143
2,143
3.01
...
TRANSPORT BUSINESS AT BANGLADESH
Service charge & Interest @ 2% on USD 60 million = US$1200000 X 9 installment
(started fr...
TRANSPORT BUSINESS AT BANGLADESH
Raw materials 1,202
Repair & maintenance 330
Rent, Tax & Insurance 300
Water, Power & Fue...
TRANSPORT BUSINESS AT BANGLADESH
Equity
Paid up capital
Retained earnings
Total equity
Total liabilities & equity
-
-
-
60...
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  1. 1. 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 34
  2. 2. TRANSPORT BUSINESS AT BANGLADESH PRE-INVESTMENT FEASIBILITY REPORT on TRANSPORT BUSINESS AT BANGLADESH for XXXXX BD LIMITED at Madanpur, Gazipur and Bogra Corporate Office: Suite 03/3rd floor, 3/3B Purana Paltan, Dhaka-1000 Tel: 88-02-7976307, 88-01710-962792 Email: seekinvestor2007@yahoo.com Page 2 of 34
  3. 3. TRANSPORT BUSINESS AT BANGLADESH Page 3 of 34
  4. 4. TRANSPORT BUSINESS AT BANGLADESH TABLE OF CONTENTS Items Page Introduction 1 Project Summary 2 Management & Organization 5 Technical Aspect 7 Market Aspect 11 Cost of the project 14 Cost Estimate of Building & Civil Works 15 Local Machinery 17 Imported Machinery 19 Working Capital 21 Earning forecast 22 Sales Revenue 23 Sensitivity Analysis 24 Operating Expenses 27 Wages & Salaries 28 Estimate of general, admin & other expenses 30 Financial expenses 32 Break-even Analysis 33 Cash Flow Statement 34 Debit Services Coverage Ratio 35 Pay Back Period 36 FIRR 37 Benefit of the project 38 Contribution to GDP 39 Balance sheet 40 Page 4 of 34
  5. 5. TRANSPORT BUSINESS AT BANGLADESH INTRODUCTION 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 Introduction Bangladesh 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. Page 5 of 34
  6. 6. TRANSPORT BUSINESS AT BANGLADESH Green Line, Shyamoli shyamoli.paribahan.com, Silk Line but these are still not sufficient for our prime need. Financial plan: Figure in "000" Foreign Loan/Fund: FDI / US$60,000K, where Sponsor's Equity (0%) Total debt and equity: 100:0 Percentage Sharing: Negotiable with JV Capitalist/ Private Investor Cost of production and profitability: A statement showing forecast of earning which enter all includes cost of production, sales estimates, financial, admin incentive & selling expenses is given in Annexure. The main assumptions underlying the earning forecast are as under: I. The capacity utilization of the project will be 70%, 80% & 90% from the first year to 3rd year and so no respectively. II. The cost of raw materials as well as sales will be the same throughout the projected years on the assumptions price, incase raw materials be up set the proportionate price increase in sales. III. There will be 5% increase in salaries & wages and a bonus equal to 2(two) months basic will be given each year. IV. Depreciation has been charged @ 20% on Machinery @ 5% in building and 20% in furniture and fixture & pre-operating expenses on straight -line method. PROJECT SUMMERY 1 Name of the project: Xxxxxx Ltd. 2 Location of the project: Office: Suite 03 / 3rd Floor, 3/3B, Purana Paltan, Dhaka-1000. Tel: 88-02-7976307, 8801710962792 Email: seekinvestor2007@yahoo.com Attention to: Md. Hafizul Haque 3 The Project: The project envisages setting up of a transport business for inter district luxury bus services. The project has been designed and equipped with imported 100 luxury buses from China. Local machineries and equipments to be procured locally. 4 Proposal: Request for issuance Bank Comfort Letter for issuance Bank Guarantee against foreign loan of US$ 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 Page 6 of 34
  7. 7. TRANSPORT BUSINESS AT BANGLADESH 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 a 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 / FDI 13 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 Page 7 of 34
  8. 8. TRANSPORT BUSINESS AT BANGLADESH 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. 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-5 Sales 13,961 15,949 17,949 17,949 17,949 Gross Profit 8,123 9,750 11,376 11,126 10,897 Operating profit 7,305 8,876 10,446 10,137 9,878 Net profit after tax 4,167 4,210 5,152 4,966 4,811 20 Ratio % Yr-1 Yr-2 Yr-3 Yr-4 Yr-5 Gross Profit to Sales 58 61 63 62 61 Operating profit to sales 52 56 58 56 55 Net 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 8 of 34
  9. 9. TRANSPORT BUSINESS AT BANGLADESH Conclusion 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 Introduction The 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 XXXXX 2 Md. Hafizul Haque Managing Director XXXXX 3 XXXXX XXXXXXX Director XXXXX 4 XXXXX XXXXXXX Director XXXXX 5 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 Page 9 of 34
  10. 10. TRANSPORT BUSINESS AT BANGLADESH personnel will be deputed from the manufacturer of the luxury bus and recruited locally for smooth running of the project. The 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: XXXXXXXXX Father's Name : XXXXXXXXXXXX. Mother's Name : XXXXXXXXXXXXX. Present Address : XXXXXXXXXXXXree, Dhaka -1217 Permanent Address: XXXXXXXXXXXXXXXXXXXXX DOB: 23/09/1967 Education: M Sc. In Marine Biology. B) Name: XXXXXXXX. Father's Name : XXXXXXXXXXXXXXX. Mother's Name : XXXXXXXXXXXXXXX Present Address : XXXXXXXXXXXXXXXXXXXX Permanent Address: XXXXXXXXXXXXXX DOB: Education: National Id No : Land and location The 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 ASPECT INTRODUCTION The 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: Page 10 of 34
  11. 11. TRANSPORT BUSINESS AT BANGLADESH 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: Manufacturer 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 CAPACITY The 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 000 Production 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 19,944 Note: Transport will be double+, if this project will be Joint Venture…… Land and location The 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 works The 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 Equipments Imported Machinery The 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. Page 11 of 34
  12. 12. TRANSPORT BUSINESS AT BANGLADESH 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. Utilities: 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 from REB/DESA/PDB besides there will be a standby Generator of 330 KVA. For emergency purpose. Connected 440 KVA Maximum load 400 KVA Source: PDB Fuel and Lubricant: Item Quantity Grease 2500 kgs Lubricating Oil 10000Itrs Diesel 620000 Itrs Petrol 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 1st , 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 1 Manager (Admin) 1 Admin Officer 2 Accounts officer 2 Commercial Officer/Asstt. Com. Of 6 Page 12 of 34 China CNG Bus
  13. 13. TRANSPORT BUSINESS AT BANGLADESH Stores Officer 2 Medical Officer 2 Medical Asstt. 6 Security Officer 1 Labour Officer 1 Asstt. Accountant 2 Wage Clerks 2 Compter/telex/fax operator 2 Time Keeper 2 Clerk-cum-Typist 3 Compounder 2 Driver 6 Bus Supervisor 100 Security Guard 4 Peon 4 Sweeper 2 Marketing Ticket Sales Man 100 Ticket sales Asstt. 100 B) Technical personnel: Workshop Manager 3 Supervisors 6 Automobile Engineer 3 Automobile Mechanic 6 Welder 3 Driver 100 Helper 100 Skilled labour 12 Semi-skilled labour 6 Labour 6 Generator operator 2 CNG Station Manager 6 CNG Mechanic operator 12 Electrical Mechanic 3 Security Officer 3 Security Guard 12 Store Officer 2 Asstt Store Officer 3 Computer Operator 2 Computer Operator Asstt 3 Office Asstt. 3 Sweeper 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. Page 13 of 34
  14. 14. TRANSPORT BUSINESS AT BANGLADESH Depreciation and Amortization: The following basis has been used for calculation of depreciation on Fixed Assets of the project: Fixed Assets Depreciation Rate Factory 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 $358m. Inflows of foreign direct investment during 2001-2009* As of June, 2009 Source: Bangladesh Economic Review-2010 (Bangla version), Ministry of Finance Private investment statistics: Year Proposed local investment Proposed foreign investment Total proposed investment Growth % Project US$ m Project US$ m Project US$ m 2005- 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 . Classification Units 2002-03 2003-04 2004-05 Airway (Nos) 17 17 14 DC-10 (Nos) 12 12 10 Page 14 of 34
  15. 15. TRANSPORT BUSINESS AT BANGLADESH Fokker/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 - Other Coaches 137 137 - Unorganized Road Transports (000) Rickshaw 1820 1919 1980 Push Cart 21 22 23 Bullock Cart 56 55 54 Organized Road Transports (000) - Bus/Minibus 32 33 34 Microbus 16 17 19 Truck 51 53 55 Motor Car/Taxi/Jeep 84 90 94 Auto Rickshaw 85 94 100 Tractors/Tailor/Others 18 21 Organized Water Transports (000) Vessel owned by BSC (Nos) 13 13 13 Vessel owned by BIWTC (Nos) 208 194 194 Unorganized Water Transports (Nos) Country Boat for Motorize 67 68 69 Country Boat for Cargo 68 65 66 Country Boat for Passenger 118 110 111 Communication Facilities 3783 3914 3937 Post Office (Nos) 9859 10007 9886 Telegraph Office (Nos) 657 - - Telephone Sets '000' (Nos) 707 967 1010 Page 15 of 34
  16. 16. TRANSPORT BUSINESS AT BANGLADESH Source : Economic Revue 2004, BBS and statistical Pocketbook 2005 Foreign and joint venture investment In the year 2009-10 (February), three were 89 new foreign and joint venture investment project registered to BOI which amount to $590m. The project was invested to mainly in the service engineering clothing and auricular sectors. Sector wise foreign and joint venture investment during 2009-2010* * As of February, 2010 Source Bangladesh Economic Review-2010 (Bangla version), Ministry of Finance Country wise foreign and joint venture investment during 2009-2010* Country No. of project Proposed investment (US$ M) Saudi Arabia 3 478,652.17 Australia 4 2,036.23 USA 5 2,990.33 Finland 2 3,023.89 India 9 8,451.53 South Korea 12 33,768.91 Malaysia 3 3,056.52 Netherlands 5 8,544.76 China 12 21,000.36 United Kingdom 5 3,507.85 Pakistan 2 990.91 Japan 8 2,624.85 Denmaek 1 1,217.39 Sir Lanka 2 646.23 Canada 2 1,017.23 Taiwan 1 502.97 Singapore 4 1,929.62 Turkey 1 150.94 Greece 1 156.81 Italy 2 1,039.95 Hong Kong 5 14,805.94 Total 89 590,114.91 As February, 2010 Page 16 of 34
  17. 17. TRANSPORT BUSINESS AT BANGLADESH COST OF THE PROJECT SL. No. Item Existing Wealth Proposed 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 Page 17 of 34
  18. 18. TRANSPORT BUSINESS AT BANGLADESH 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 cost area sq.m. const. (BDT) (BDT 000) 11 Surface Drain Surface drain 12 Internal road Road Size: 167368mx 7.62m Page 18 of 34 1 Main workshop At Gazipur 5m ht. R.C.C frame structure factory building godowns, generators building with to storied foundation (without under ground duct) 2 Workshop Madangonj At 6m ht R.C.C. frame godowns building (ground floor) size: 25.91m ×27.43m 3 Workshop at Bogra A/C plant room over the factory building. As per machine suppliers drawing. 4 Duct humidification For Under ground duct with R.C.C wall with net Cement finishing (water tight) Size: 1m× 1.5m 5 Residential Building 6(six) Storied R.C.C. frame structure residential building size: 6×8.8m×34.4m = 1829.30, 6×2.18m×34.45mc = 1070.70 6 Administrative Building 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 : 1×8.84m× 12.19m 9 Raw Material Store R.M.S. Size: 1/2× 1.076m × 8.53m×1 /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″)
  19. 19. TRANSPORT BUSINESS AT BANGLADESH 13 Water tank Water tank over the root of Factory building Size: (ht-2.0) 8.7mx5.48m 14 Electrical Meter Size: ½ ×10-76×8.53×1 /2 room 15 Spare parts Size: 1×25.91ms ×45.12m Store (First Floor) 16 Air compressor Size: 1× 10.97m × 17.37m Store (First Floor) Total 4559 LOCAL MACHINERY USD in “000” Sl No. Item Quantity Unit Price Total Price 1 Way bill 2 Ticket printing 3 Different size leather machine & ancillary equip. 4 Ticket counter and office 5 Generator 6 Transformer 7 Electric control panel 683 Per- Operating Expenses USD in “000” Sl No Item Total Price 1 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 2 3 CNG Luxury Bus, China YUTONG HONGKONG LIMITED CNG Station Complete Petrol pump 100 6 6 122200 300000 75000 12220 1800 675 14,695 LIST OF VECHICLES USD in “000” Items Quantity Unit Price Total Price (USD) i) Hino Ranger Covered Van Capacity 7000KG 1 36 Page 19 of 34
  20. 20. TRANSPORT BUSINESS AT BANGLADESH iv) Toyota Liteage Total 2 57 US$ “000” 93 Page 20 of 34
  21. 21. TRANSPORT BUSINESS AT BANGLADESH WORKING CAPITAL REQUIREMENT USD in ‘000’ A) Current Assets: Stores & Spares Fuel & Lubricant Wages Totalcurrent assets Tied up period 15 Days 15 Days 15 Days Yr-1 3 20 29 52 Yr-2 6 22 30 58 Yr-3 10 23 32 64 Yr-4 13 24 33 70 Yr-5 16 26 35 77 B) Current Liabilities: Working capital (100%) loan 52 58 64 70 77 Net working capital requirement (%) Sponsors Equity - - - - - Net Working Capital 52 58 64 70 77 EARNING FORECAST USD in ‘000’ Sales revenue Cost of goof sold Gross Profit Admin & selling exp Net Operating Profit Financial expense Net profit before Tax Yr-1 13,961 5,838 8,123 818 7,305 360 6,645 Yr-2 15,955 6,205 9,750 874 8,876 1,860 7,016 Yr-3 17,949 6573 11,376 929 10,446 1,860 8,586 Yr-4 17,949 6,824 11,126 988 10,137 1,860 8,277 Yr-5 17,949 7,052 10,897 1,020 9,878 1,860 8,018 Tax 40% Net profit after tax 2778 4,167 2806 4,210 3435 5,152 3311 4,966 3207 4,811 Reserve fund for currency Fluctuation (2%) Profit after reserve fund Return on fixed deposit of currency Fluctuation amount (9%) Profit after return on fixed deposit Share Holder Dividend (10%) Retained earning Ratios: Gross profit to sales Operation profit to sales Net Profit to sales 600 3,567 - 3567 812 2755 58 52 20 557 3,652 54 3706 975 2731 61 56 17 514 4,638 50 4688 1138 3550 63 58 20 471 4,495 46 4541 1113 3429 62 56 19 429 4,382 42 4425 1090 3335 61 55 19 Page 21 of 34
  22. 22. TRANSPORT BUSINESS AT BANGLADESH SALES REVENUE USD in ‘000’ Rated capacity Capacity utilization`s Net Sales Yr-1 19,944 70% 13,961 Yr-2 19,944 80% 15,955 Yr-3 19,944 90% 17,949 Yr-4 19,944 90% 17,949 Yr-5 19,944 90% 17,949 Assumptions Sales Estimate Assumptions: 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 sales Piece 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 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 20 20 6 6 10 10 6 6 6 6 20 20 6 6 5 5 7 7 11 11 9 9 9 9 9 9 9 9 9 9 10 10 2,044 2,044 964 964 1,241 1,241 788 788 788 788 2,628 2,628 788 788 730 730 19,944 SENSITIVITY ANALYSIS-I (On the basis of 10% decrease in the sales price) USD in ‘000’ Sales revenue Cost of goof sold Gross Profit Admin & selling exp Net Operating Profit Financial expense Net profit before Tax Yr-1 12,564 5,838 6,727 818 5,909 360 5,549 Yr-2 14,359 6,205 8,155 874 7,281 1,860 5,421 Yr-3 16,154 6,573 9,581 929 8,651 1,860 6,791 Yr-4 16,154 6,824 9,331 988 8,342 1,860 6,482 Yr-5 16,154 7,052 9,103 1,020 9,878 1,860 6,223 Page 22 of 34
  23. 23. TRANSPORT BUSINESS AT BANGLADESH Tax 40% Net profit after tax 2,219 3,329 2,168 3,252 2,717 4,075 2,593 3,889 2,489 3,734 Reserve fund for currency Fluctuation (2%) Profit after reserve fund Return on fixed deposit of currency Fluctuation amount (9%) Profit after return on fixed deposit Dividend (10%) Retained earning Retained earning : 600 2,729 - 2729 673 2057 557 2,695 54 2749 815 1734 514 3,561 50 3611 958 2653 471 3,418 46 3464 933 2531 429 3,305 42 3,348 910 2437 SENSITIVITY ANALYSIS-II (On the basis of 10% increase in production cost) USD in ‘000’ Sales revenue Cost of goof sold Gross Profit Admin & selling exp Net Operating Profit Financial expense Net profit before Tax Yr-1 13,961 5,838 8,123 818 7,305 360 6,945 Yr-2 15,955 6,205 9,750 874 8,876 1,860 7,016 Yr-3 17,949 6,573 11,376 929 10,446 1,860 8,586 Yr-4 17,949 6,824 11,126 988 10, 137 1,860 8,277 Yr-5 17,949 7,052 10,897 1,020 9,878 1,860 8,018 Tax 40% Net profit after tax 2,778 4,167 2,806 4,210 3,435 5,152 3,311 4,966 3,207 4,811 Reserve fund for currency Fluctuation (2%) Profit after reserve fund Return on fixed deposit of currency Fluctuation amount (9%) Profit after return on fixed 600 3,657 - 3567 557 3,652 54 3706 514 4,638 50 4688 471 4,495 46 4541 429 4,382 42 4,425 Page 23 of 34
  24. 24. TRANSPORT BUSINESS AT BANGLADESH deposit Dividend (10%) Retained earning Retained earning : 812 2755 975 2731 1138 3550 1113 3429 1090 3335 SENSITIVITY ANALYSIS-III (On the basis of 10% increase in production cost And 5% decrease in the sales price) USD in ‘000’ Sales revenue Cost of goof sold Gross Profit Admin & selling exp Net Operating Profit Financial expense Net profit before Tax Yr-1 13,262 6,130 7,133 818 6,315 360 5,955 Yr-2 1,157 6,515 8,642 874 7,768 1,860 5,908 Yr-3 17,052 6,902 10,150 929 9,220 1,860 7,360 Yr-4 17,052 7,165 9,887 988 8,899 1,860 7,039 Yr-5 17,052 7,404 9,647 1,020 8,628 1,860 6,768 Tax 40% Net profit after tax 2,382 3,573 2,363 3,545 2,944 4,416 2,815 4,223 2,707 4,061 Reserve fund for currency Fluctuation (2%) Profit after reserve fund Return on fixed deposit of currency Fluctuation amount (9%) Profit after return on fixed deposit Dividend (10%) Retained earning Retained earning : 600 2,973 - 2,973 713 2260 557 2,988 54 3042 864 2177 514 3,902 50 3,952 1015 2937 471 3,752 46 3,798 989 2809 429 3,632 42 3,675 965 2710 Page 24 of 34
  25. 25. TRANSPORT BUSINESS AT BANGLADESH OPERATING EXPENSES USD in ‘000’ Raw materials at rated capacity Capacity utilization `s Raw materials at capacity Wages & Salaries Storages & Spares Repairs and maintenance Rent, Tax & Insurance Power, Fuel & Lubricant Depreciation Misc. Overhead expenses Cost of goods sold Yr-1 1,202 70% 841 689 77 23 300 438 3,329 96 5,838 Yr-2 1,202 80% 962 724 154 100 300 517 3,329 120 6,205 Yr-3 1,202 90% 1,082 760 231 177 300 551 3,329 144 6,573 Yr-4 1,202 90% 1,082 798 308 253 300 586 3,329 168 6,824 Yr-5 1,202 90% 1,082 838 384 330 300 620 3,329 168 7,052 ASSUMPTIONS COST OF RAW MATERIALS Equipment of raw materials USD in ‘000’ Qty Unit Price Total CNG for 100 bus 100CuM 0.22 803 Per bus per day other expense 100 10 365 Ticket Counter per month rent 100 20 24 Ticket yearly 10 1202 Factory wages and salaries: USD in ‘000’ Technical Nos. Salary Annual salary Workshop Manager Supervisors Auto Mobile Engineer Auto Mobile Machanic Welder Driver Helper Skilled labour Semi-skilled labour Labour Generator operator CNG Station Manager CNG Machine operator Electrical Machanic 3 1000 36 6 500 36 3 700 25 6 300 22 3 200 7 100 200 240 100 100 120 12 100 14 6 80 6 6 70 5 2 100 2 6 150 11 12 100 14 3 150 5 Page 25 of 34
  26. 26. TRANSPORT BUSINESS AT BANGLADESH Security officer Security Guard Store officer Asstt Store officer Computer operator Computer operator Asstt. Office Asstt. Sweeper 3 150 5 12 120 17 2 150 4 3 100 4 2 100 2 3 100 4 3 80 3 8 80 8 304 591 Benefits: Basic Increment (5%) Bonus (2 months pay) Total Yr-1 591 - 591 98 689 Yr-2 591 30 620 103 724 Yr-3 620 31 651 109 760 Yr-4 651 33 684 114 798 Yr-5 684 34 718 120 838 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. The consumption of power for this purpose has been estimated as under: Total Consumption: 400KW X 16 Hrs. X 360 = 2304000 KWH Cost: 2304000 KWH X 4 = Tk. 9216000 Govt. duty 2304000 KWH X 0.15 = Tk. 345600 Total Tk in "000" 9562 USD in "000" 137 Fuel and Lubricant: Item Quantity Rate in US Total Cost in USD Grease 2500kgs 2.3 6 Lubricant Oil 10000 Itrs 0.6 6 Diesel 620000 Itrs 0.65 403 Petrol 120000 Itrs 1.15 138 Total 553 Total power & Fuel consumption: Capacity Water Power Fuel & Lubricant Total Yr-1 70% - 96 387 Yr-2 75% - 102 415 Yr-3 80% - 109 442 Yr-4 85% - 116 470 Yr-5 90% - 123 497 Page 26 of 34
  27. 27. TRANSPORT BUSINESS AT BANGLADESH 483 517 551 586 620 Stores and Spares On Vehicle machinery 0.5%,1% 1.5%,2% and 2.5% Yr-1 77 Yr-2 154 Yr-3 231 Yr-4 308 Yr-5 384 Repair & Maintenance Machinery 0.5%, 1%, 1.5%,2% and 2.5% Building cost (0.5%) Yr-1 - 23 23 Yr-2 77 23 100 Yr-3 154 23 177 Yr-4 231 23 253 Yr-5 308 23 330 Rent. Tax, Insurance (1% of fixed cost) 300 Depreciation Item Amount Rate Amount a) Building 4,559 5% 228 b) Machinery 15,378 20% 3076 3304 Misc. Overhead expenses Yr-1 96 Yr-2 120 Yr-3 144 Yr-4 168 Yr-5 168 General Administrative and Selling Expenses USD in ‘000’ Yr-1 Yr-2 Yr-3 Yr-4 Yr-5 Salaries (Admin) 541 568 597 627 658 Directors Remunerations 137 137 137 137 137 Postage, Telephone.E-mail, etc. 5 7 8 10 10 Stationery & Printing 5 7 8 10 10 Traveling & Conveyance 7 8 9 10 10 Depreciation & Write off 26 26 26 26 26 Audit fee 1 1 1 1 1 Misc. expenses 96 120 144 168 168 818 874 929 988 1,020 Assumptions: Admin. Salary No. of Proposed Designation Salary Annualsalary 1 General Manager 1 1500 18 2 Manager (Admin) 1 500 6 Page 27 of 34
  28. 28. TRANSPORT BUSINESS AT BANGLADESH 3 Admin. Officer 2 300 7 4 Accounts officer 2 300 7 5 Commercial Officer/Asstt.com.Of 6 200 14 6 Stores Officer 2 150 4 7 Medical Officer 2 300 7 8 Medical Asstt. 6 150 11 9 Security Officer 1 150 2 10 Labour Officer 1 150 2 11 Asstt. Accountant 2 100 2 12 Wage Clerks 2 100 2 13 Computer/telex/fax operator 2 100 2 14 Time Keeper 2 100 2 15 Clerk-cum-Typist 3 100 4 16 Compounder 2 100 2 17 Driver 6 150 1 18 Bus Superviser 100 120 144 19 Security Guard 4 100 5 20 Peon 4 100 5 21 Sweeper 2 80 2 260 Marketing 22 Ticket Sales Man 100 100 120 23 Ticket Sales Asstt. 100 70 84 Total 353 464 Yr-1 Yr-2 Yr-3 Yr-4 Yr-5 Basic 464 464 487 511 537 Increment @ 5% - 23 24 26 27 464 487 511 537 564 Bonus (2 months basic) 77 81 85 90 94 Total 541 568 597 627 658 Depreciation % write off Item Cost Rate Total 2. Vehicles 93 20% 19 3. Safety equipments 10 20% 2 4. Office equipment, furniture & fixtures 25 20% 5 Total - 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. Page 28 of 34
  29. 29. TRANSPORT BUSINESS AT BANGLADESH FINANCIAL EXPENSES USD in ‘000’ Financial Expenses Local BG Fee 1.20% Interest 2% Total Yr-1 360 - 360 Yr-2 360 1200 1560 Yr-3 360 1200 1560 Yr-4 360 1200 1560 Yr-5 360 1200 1560 Assumptions: Though 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): 35,898 2. 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 cost Raw Materials Wages & Salaries Power, Fuel & Lubricant Stores & Spares Repair & Maintenance Depreciation & Write off Rent, Tax & Insurance Salaries (admin.) Postage, Telephone & Telegram Printing & Stationery Traveling & Conveyance Misc. overhead Audit Fee Finanancial exp. 1,202 838 620 384 330 3,329 300 658 10 10 10 168 1 360 - 168 62 77 66 3,329 300 658 3 3 3 168 1 360 1,202 670 558 308 264 - - - 8 8 8 - - - 8,221 5,196 3,025 I) PA/ Ratio S-V 17949-3038 14,924 0.83S 17,949 17,949 Page 29 of 34
  30. 30. TRANSPORT BUSINESS AT BANGLADESH II) Breakeven sales F 5,196 6,249 P/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 CASH FLOW STATEMENT USD in ‘000’ A. Source of fund Cont. Yr. Yr-1 Yr-2 Yr-3 Yr-4 Yr-5 Paid up capital Operating profit Increase in current liabilities Deprecation & write off Loan from Foreign Lender Total - - - 60,000 60,000 7305 52 3329 - 10,686 - 8876 6 3329 - 12,211 - 10446 6 3329 - 13,782 - 10137 6 3329 - 13,473 - 9878 6 3329 - 13,213 B. Utilization of fund Fixed capital expense Increase in current assets Repayment of principal amount Tax Dividend Currency fluctuation factor Payment of interest Total 60000 - - - - 60,000 - 52 0 2,778 812 600 360 4,602 - 6 0 2,806 975 557 1,860 6,304 - 6 0 3,435 1,138 514 1,860 6,953 - 6 0 3,311 1,113 471 1,860 6,761 - 6 0 3,207 1,090 429 1,860 6,592 Cash Surplus (A-B) Opening balance of cash Closing balance of cash - - - 3,941 - 3,941 3864 3,941 7,805 4,686 7,805 12,491 4,569 12,491 17,060 4,479 17,060 21,538 DEBT SERVICE COVERAGE RATIO USD in ‘000’ Income Yr-1 Yr-2 Yr-3 Yr-4 Yr-5 Profit after dividend Depreciation and write off Interest on term loan Total 2,755 3,329 360 6,444 2,731 3,329 1,860 7,921 3,550 3,329 1,860 8,739 3,429 3,329 1,860 8,618 3,335 3,329 1,860 8,524 Page 30 of 34
  31. 31. TRANSPORT BUSINESS AT BANGLADESH Liabilities Installment of term loan Debt service coverage ratio (Time) 2,143 2,143 3.01 2,143 2,143 3.70 2,143 2,143 4.08 2,143 2,143 4.02 2,143 2,143 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 - - - - - - Total 1200 1200 1200 1200 1200 Item Yr 7 Yr 8 Yr 93 Yr 10 Grand total Net 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 discounting 35% NPV discounting 40% 0 1 2 3 3 5-9 year 10 Salvage Value 30,000 52 6 6 6 6 6 - 10,634 12,205 13,776 13,466 13,207 1,302 (30,000) 10,582 12,199 13,769 13,460 13,301 1,302 (30,000) 7,841 6,697 5,590 4,052 6,640 65 (30,000) 7,555 6,222 5,012 3,500 5,241 46 885 (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$60,000,000 + last installment of interest as 1,200,000=61,200,000US$) Page 31 of 34
  32. 32. TRANSPORT BUSINESS AT BANGLADESH 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% Assumptions b) 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 Total 1 2 3 4 5 7305 8876 10446 10137 9878 3329 3329 3329 3329 3329 10,634 12,205 13,776 13,466 13,207 Salvage value Land Building Machinery Inventory Cost 100% 10% 5% 100% - 456 769 77 1,302 Inventory Calculation Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Wages FL S & S 29 20 3 52 30 22 6 58 32 23 10 64 33 24 13 70 35 26 16 77 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: Page 32 of 34
  33. 33. TRANSPORT BUSINESS AT BANGLADESH Raw materials 1,202 Repair & maintenance 330 Rent, Tax & Insurance 300 Water, Power & Fuel 620 Stores & Spares 384 Postage, Telephone & Telegram 10 Printing & Stationery 10 Traveling & Conveyance 10 Audit fee 1 Misc. 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 Const. ASSETS Year Yr-1 Yr-2 Yr-3 Yr-4 Yr-5 Current assets Cash & Bank balance Other current assets Total current assets - 3,941 52 3,993 7,805 58 7,863 12,491 64 12,555 17,060 70 17,130 21,538 77 21,615 Fixed assets Fixed assets Net Return on Fixed Deposit Total Fixed assets Total assets 30,000 30,000 30,000 60,000 26,671 3,000 29,671 59,671 23,342 3,000 26,342 56,342 20,013 3,000 23,013 53,013 16,684 3,000 19,684 59,684 13,354 3,000 16,354 46,354 LIABILITIES & OWNERS EQUITY Liabilities Term loan Short term loan Total liabilities 60,000 0 60,000 60,000 0 60,000 60,000 0 60,000 60,000 0 60,000 60,000 0 60,000 60,000 0 60,000 Page 33 of 34
  34. 34. TRANSPORT BUSINESS AT BANGLADESH Equity Paid up capital Retained earnings Total equity Total liabilities & equity - - - 60,000 - 2,755 2,755 60,664 - 5,486 5,486 61,259 - 9,036 9,036 62,672 - 12,465 12,465 63,964 - 15,800 15,800 65,162 Page 34 of 34

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