Professional Documents
Culture Documents
Anum Khan
Kiran Idrees
Maha Farooq
Muhammad Zain Ul Abideen
Zoiya Hafeez
Introduction
Business name: Pak Thermal Power Plant
Total project cost: Rs. 5,391,932,391
(approximately)
Proposed business venture for the thermal power
plant capacity : 60 MW
Project Location: Wazirabad, district Gurjranwala,
Punjab, Pakistan
Labor
Availability
Water Supply
Industrial
Hub
Energy Crisis
Producers
There are four major power producers in
country:
WAPDA
KESC
IPPs
PAEC
Cost of engines
Dollars
Rate
Rs
Caterpillar
6,500,000 108
Engines
10MW power
7,020,000,000 6
4,212,000,000
Import
duty(approx.
6%)
108
42,120,000
252,720,000
108
2,106,000
12, 636,000
Insurance(app
rox. 0.3 %
Total cost
390,000
Rs.4,477,356,000
4,212,000,000
252,720,000
10,000,000.00
Electricity connection
1,000,000.00
Telephone License
Environmental License
IPP License
10,000,000.00
9,808,354.00
Rs. 5,391,932,391
Capital Structure
Debt
Equity
Total
60
40
100%
amount
3,235,159,434
2,156,772,956
Rs.5,391,932,391
Year 2 (Rs.)
Year 3 (Rs.)
Year 4 (Rs.)
Year 5 (Rs.)
6,912,270,720 7,188,761,549
7,476,312,011
7,775,364,491
8,086,379,071
5,977,080
6,216,163
1,000,000
1,040,000
1,256,250
1,256,250
900,000
900,000
30,000
30,000
13,649,448
13,649,448
4,550,000
4,550,000
500,000
500,000
490,418
490,418
103,684,061
107,831,423
34,561,354
35,943,808
279,731,406
290,920,662
1,462,809,027 1,529,313,504
404,394,929
341,368,322
1,058,414,097 1,187,945,182
317,524,229
356,383,555
740,889,868
831,561,628
6,464,810
1,081,600
1,256,250
900,000
30,000
13,649,448
4,550,000
500,000
490,418
112,144,680
37,381,560
302,557,489
1,598,478,161
270,463,388
1,328,014,773
398,404,432
929,610,341
6,723,402
1,124,864
1,256,250
900,000
30,000
13,649,448
4,550,000
500,000
490,418
116,630,467
38,876,822
314,659,788
1,670,409,404
190,695,338
1,479,714,066
443,914,220
1,035,799,846
6,992,338
1,169,859
1,256,250
900,000
30,000
13,649,448
4,550,000
500,000
490,418
121,295,686
40,431,895
327,246,180
1,745,217,896
100,956,281
1,644,261,615
493,278,484
1,150,983,130
Depreciation of engines
Depreciation of storage containers
4,688,247,653
21,600,846
8,208,321
165,114,296
187,500
4,896,483,616
Direct Labour:
mechanics
414,000
shift engineers
648,000
420,000
plant workers
432,000
supervisor
960,000
lift driver
90,000
Total COGS
2,964,000
103,684,060
5,003,131,676
Depreciation Schedule
Scrap Value
(25% of value)
Years
Depreciation
Engines
0.25
20
157,950,000
Installations
0.25
20
13,125,000
Storage Containers
0.25
20
187,500
Building
0.25
20
900,000
Company Vehicles
0.25
20
1,256,250
Furniture
0.25
20
30,000
Amortization Schedule
Cost of Asset
(Rs.)
Number of
Years
Ammortization (Rs.
Import Duty
252,720,000
20
12,636,000
Insurance
12,636,000
2,527,200
Gas Connection
80,000,000
20
4,000,000
Electricity Connection
10,000,000
20
500,000
Telephone Connection
1,000,000
20
50,000
Environmental License
10,000,000
20
500,000
IPP License
9,808,354
20
490,418
Asset
Payment (Rs.)
Principal Decreased
(Rs.)
Principal Amount
(Rs.)
908,607,790
404,394,929.29
504,212,860.71
2,730,946,573.59
908,607,790
341,368,321.70
567,239,468.30
2,163,707,105.29
908,607,790
270,463,388.16
638,144,401.84
1,525,562,703.45
908,607,790
190,695,337.93
717,912,452.07
807,650,251.38
908,607,790
100,956,281.42
807,651,508.58
(7.20)
DEPRECIATION
Scrap Value (25% of value)
Years
Depreciation
Engines
0.25
20.00
157,950,000.00
Installations
0.25
20.00
13,125,000.00
Storage Containers
0.25
20.00
187,500.00
Building
0.25
20.00
900,000.00
Company Vehicles
0.25
20.00
1,256,250.00
Furniture
0.25
20.00
30,000.00
Balance Sheet
year 1
year 2
year 3
year 4
year 5
current assets
cash
410,847,112.99
fuel inv
291,251,407.50
302,901,463.80
315,017,522.35
327,618,223.25
340,722,952.18
1,800,071.00
1,872,073.84
1,946,956.79
2,024,835.07
2,105,828.47
7,200,282.00
7,488,293.28
7,787,825.01
8,099,338.01
8,423,311.53
chemcials inv
accounts rec (10% of
sales)
2,052,081.00
2,134,164.24
2,219,530.81
2,308,312.04
2,400,644.52
691,227,072.00
718,876,154.88
747,631,201.08
777,536,449.12
808,637,907.08
993,530,913.50
total current assets
2,540,608,688.22
1,162,290,643.78
3,702,899,332.00
fixed assets
caterpillar engines and turbines
4,237,933,600.00
4,079,983,600.00
3,922,033,600.00
3,764,083,600.00
3,606,133,600.00
land
80,000,000.00
80,000,000.00
80,000,000.00
80,000,000.00
80,000,000.00
building
51,208,364.00
50,308,364.00
49,408,364.00
48,508,364.00
47,608,364.00
furniture
770,000.00
740,000.00
710,000.00
680,000.00
650,000.00
company vehicles
20,693,750.00
19,437,500.00
18,181,250.00
16,925,000.00
15,668,750.00
installations
423,793,360.00
410,668,360.00
397,543,360.00
384,418,360.00
371,293,360.00
storage containers
4,812,500.00
5,005,000.00
5,205,200.00
5,413,408.00
5,629,944.32
environmental license
9,500,000.00
9,000,000.00
8,500,000.00
8,000,000.00
7,500,000.00
ipp license
9,317,936.30
8,827,518.60
8,337,100.90
7,846,683.20
7,356,265.50
utilities connections
85,500,000.00
80,950,000.00
76,400,000.00
71,850,000.00
67,300,000.00
insurance
10,108,800.00
7,581,600.00
5,054,400.00
2,527,200.00
import duty
202,176,000.00
189,540,000.00
176,904,000.00
164,268,000.00
151,632,000.00
5,135,814,310.30
4,744,920,342.60
4,566,318,874.90
4,387,725,415.20
4,209,140,283.82
TOTAL Assets
6,129,345,223.80
PKR
6,540,192,336.79
5,778,192,492.64
PKR
6,840,977,813.62
5,640,921,910.94
PKR
7,170,365,602.74
5,505,312,572.68
PKR
7,527,691,720.85
5,371,430,927.60
PKR
7,912,039,615.82
CURRENT LIABILITIES
190,913,904.31
198,550,460.48
206,492,478.90
214,752,178.06
223,342,265.18
720,669,030.77
749,495,792.00
779,475,623.68
810,654,648.63
843,080,834.57
911,582,935.08
948,046,252.48
985,968,102.58
1,025,406,826.68
1,066,423,099.75
2,730,946,573.59
2,163,707,105.29
1,525,562,703.45
807,650,251.38
(1,257.20)
2,730,946,573.59
2,163,707,105.29
1,525,562,703.45
807,650,251.38
(1,257.20)
total liabilities
3,642,529,508.67
3,111,753,357.77
2,511,530,806.03
1,833,057,078.06
1,066,421,842.55
2,156,772,960.00
2,156,772,960.00
2,156,772,960.00
2,156,772,960.00
2,156,772,960.00
retained earnings
740,889,868.13
1,572,451,495.85
2,502,061,836.72
3,537,861,682.79
4,688,844,813.27
total
PKR
6,540,192,336.79
PKR
6,840,977,813.62
PKR
7,170,365,602.74
PKR
7,527,691,720.85
PKR
7,912,039,615.82
Liquidity
Year 1
Year 2
Year 3
Year 4
Year 5
Current
1.54
2.21
2.64
3.06
3.47
Quick
1.21
1.88
2.31
2.73
3.14
Profitability
Year 1
Year 2
Year 3
Year 4
Year 5
GP margin
0.28
0.28
0.28
0.28
0.28
Net profit
margin
0.11
0.12
0.12
0.13
0.14
Operating
Profit
margin
0.21
0.21
0.21
0.21
0.22
ROA
0.11
0.12
0.13
0.14
0.15
ROE
0.26
0.22
0.20
0.18
0.17
EPS
3.44
3.86
4.31
4.80
5.34
Assets productivity
Year 1
Year 2
Year 3
Year 4
Year 5
Total Asset
turnover
1.06
1.05
1.04
1.03
1.02
Fixed Assets
Turnover
1.35
1.52
1.64
1.77
1.92
Leverage
Year 1
Debt to
total
Assets
ratio
Debt to
Equity
Times
interest
earned
Year 2
Year3
Year 4
Year 5
0.42
0.32
0.21
0.11
0.94
0.58
0.33
0.14
3.62
4.48
5.91
8.76
17.29
Return on Capital
ROIC
Year 1
Year 2
Year 3
Year 4
Year 5
0.19
0.20
0.21
0.22
0.23
WACC
% change in Kohinoor Stock Prices
% change in KSE-100
prices
24%
19%
-13.6%
13%
1.1%
Average 19%
34%
8.17%
Rm
19%
Covariance
0.00621889
Variance
0.00303333
Beta (levered)
2.05018315
Beta(levered)= bul(1+(1-T)D/OE)
WACC = wc*kc + wd*kd(1-T)
D/OE of Kohinoor= 55/45%
D/OE of Pak Thermal= 60/40%
Beta (unlevered)
1.105
Beta (levered)
2.27
Kc = Rf + (Rm-Rf)bL
kc
31.07%
Kd
12.50%
WACC
17.68%