Table of Content

1. Introduction
2. Background Experience Of promoter
3. Currently working or Functioning project
4. Detail of Proposed project
5. Plant Capability
6. Production Capability
7. Technology (Technical Knowhow)
8. Management
9. Land/Building/ Machinery
10.Infrastructure
11. Raw Material (supply Chain)
12. Pollution (Air, water, smell and dust) Treatment
13. Labor
14. Schedule of Implementation
15. Project cost
16. Sources of Finance
17. Working Capital
18. Marketing and selling arrangement
19. Profitability and Cashflow Statement
20. Government Approval (Registration)
21. Loan Security
22. Collateral Security
23. Summary
Introduction – Electric Fans

A mechanical fan is an electrically powered device used to produce an airflow for

the purpose of creature comfort (particularly in the heat), ventilation,
exhaust, cooling or any other gaseous transport.

Mechanically, a fan can be any revolving vane or vanes used for producing
currents of air . F an s p ro d u c e a i r f l o w s wi t h h i g h v o l u m e an d l o w
p re s s ur e , as o p p o s ed t o a gas compressor which produces high pressures
at a comparatively low volume. A fan blade will often rotate when exposed
to an air stream, and devices that take advantage of this, such as anemometers
and wind turbines often have designs similar to that of a fan.

Typical applications include climate control, cooling systems, personal comfort

(e.g., an electric table fan), ventilation (e.g., an exhaust fan), winnowing (e.g.,
separating chaff of cereal grains), removing dust (e.g. sucking as in a vacuum cleaner
), drying (usually in addition to heat) and to provide draft for afire. It is also common
to use electric fans as air fresheners, by attaching fabric softener sheets to the
protective housing. This causes the fragrance to be carried into the surrounding air.

Background History
Punkah-type ceiling fans date back to 500 BC, and are native to India. Unlike
modern rotary fans, these punkah fans move air by moving to and from, and were
operated manually by cord.
The first rotary ceiling fans appeared in the early 1860s and 1870s in the United
States. At that time, they were not powered by any form of electric motor. Instead,
a stream of running water was used, in conjunction with a turbine, to drive a system
of belts which would turn the blades of two-blade fan units. These systems could
accommodate several fan units, and so became popular in stores, restaurants, and
offices. Some of these systems survive today, and can be seen in parts of the southern
United States where they originally proved useful.
The electrically powered ceiling fan was invented in 1882 by Philip Diehl. He had
engineered the electric motor used in the first electrically powered Singer sewing
machines, and in 1882 he adapted that motor for use in a ceiling-mounted fan. Each
fan had its own self-contained motor unit, with no need for belt drive.
Almost immediately he faced fierce competition due to the commercial success of
the ceiling fan. He continued to make improvements to his invention and created a
light kit fitted to the ceiling fan to combine both functions in one unit. By World
War I most ceiling fans were made with four blades instead of the original two,
which made fans quieter and allowed them to circulate more air. The early turn-of-
the-century companies who successfully commercialized the sale of ceiling fans in
the United States were the Hunter Brothers division of Robbins & Myers,
Westinghouse Corporation and Emerson Electric.
By the 1920s, ceiling fans were commonplace in the United States, and had started
to take hold internationally. From the Great Depression of the 1930s, until the
introduction of electric air conditioning in the 1950s, ceiling fans slowly faded out
of vogue in the U.S., almost falling into total disuse in the U.S. by the 1960s; those
that remained were considered items of nostalgia.
Meanwhile, electric ceiling fans became very popular in other countries, particularly
those with hot climates, such as India and the Middle East, where a lack of
infrastructure and/or financial resources made energy-hungry and complex freon-
based air conditioning equipment impractical. In 1973, Texas entrepreneur H. W.
(Hub) Markwardt began importing highly efficient ceiling fans to the United
States that were manufactured in India by Crompton Greaves, Ltd. Crompton
Greaves had been manufacturing ceiling fans since 1937 through a joint venture
formed by Greaves Cotton of India and Crompton Parkinson of England, and had
perfected the world's most energy efficient ceiling fans thanks to its patented 20
pole induction motor with a highly efficient heat-dissipating cast aluminum rotor.
These Indian manufactured ceiling fans caught on slowly at first, but Markwardt's
Encon Industries branded ceiling fans (which stood for energy conservation)
eventually found great success during the energy crisis of the late 1970s and early
1980s, since they consumed far less energy (under 70 watts of electricity) than the
antiquated shaded pole motors used in most other American made fans. The fans
became very effective energy saving appliances for residential and commercial use
by supplementing expensive air conditioning with a cooling wind-chill effect. Fans
used for comfort create a wind chill by increasing the heat transfer coefficient, but
do not lower temperatures directly.
Due to this renewed commercial success using ceiling fans effectively as an energy
conservation application, many American manufacturers also started to produce, or
significantly increase production of, ceiling fans. In addition to the imported Encon
ceiling fans, the Casablanca Fan Company was founded in 1974. Other American
manufacturers of the time included the Hunter Fan Co. (which was then a division
of Robbins & Myers, Inc), FASCO (F. A. Smith Co.), and Emerson Electric; which
was often branded as Sears-Roebuck.
Through the 1980s and 1990s, ceiling fans remained popular in the United States.
Many small American importers, most of them rather short-lived, started importing
ceiling fans. Throughout the 1980s, the balance of sales between American-made
ceiling fans and those imported from manufacturers in India, Taiwan, Hong
Kong and eventually China changed dramatically with imported fans taking the
lion's share of the market by the late 1980s. Even the most basic U.S-made fans sold
for $200 to $500, while the most expensive imported fans rarely exceeded $150.

Overview of Pakistan

The state of the engineering industry describes the status of industrialization of a

country since it portrays the capability to add value to the primary products and of
indigenous production of plants and machinery. The developed countries have
assigned high priority to the engineering industry in their own country. The range of
light engineering goods covers electrical goods, transport equipment, domestic
appliances, telecommunication equipment etc. There are about 2,500 registered units
and a much larger number in the unorganized sector, with fixed assets of over Rs
100 billion. A number of small industrial units are operating in Karachi, Lahore,
Gujarat, Gujranwala and Sialkot. Engineering goods have already made a
breakthrough in the export market. In addition to exports of conventional surgical
instruments, cutlery goods and other light engineering product ,Pakistan still is far
behind in export of engineering goods as compared to Newly Industrialized Counties
i.e. Korea and Malaysia and thus offers huge potential for manufacture of
engineering products It is recognized that capital machinery, light engineering goods
and engineering consultancy services offer great opportunities for export mainly in
the Middle Eastern, African and neighboring countries. The country has a limited
capability to design, test and experiment on new machines. The small and medium-
sized units do not have the finances to risk innovative efforts, while the large ones
are preoccupied with their production and have no time to spare for testing
innovations. There are a number of large industrial units which have successfully
duplicated certain models of machines or adopted the patent or design of a few
products or have acquired the rights on permanent basis on expiry of the validity
period. These are the slow speed engines, sewing machines, cycles, electric fans and
motors, dry electrical cells and pumps, to name a few. These efforts have been
effective in import substitution of commodities.
Fan is a daily use item. Its utility increases, especially in the summer season. The
industry is producing about 5 to 6 million fans per annum and meeting successfully
the local as well as the export demand. Out of the total production, approximately
30 per cent fans consist of pedestals, 7 per cent brackets and the remaining 63 per
cent are ceiling fans. The industry belongs to the light engineering industry category,
and is one of the industries that existed at the time of independence. In the early
1950s, it was declared as cottage industry and its more than 50 per cent units still
fall in this category. Fan industry is mainly confined to Gujranwala and Gujrat cities
of the Punjab province. The reason for its remaining a cottage industry is that
majority of the units does not have full facilities of production under one roof. They
usually give orders to the units having machines for different parts like fan guards,
blade castings, core laminations etc. These units have lathes, shapers, milling
machines, and power pressers, die casting machine sand electroplating equipment.
Therefore, most of the units are simply assembling units .Thus, they do not give
brand names to their products.

Fan Industry Of Pakistan Besides small and medium units, a few units are quite large
and have integrated system i.e. from motor winding to high-pressure dies casting.
These companies have reputed brand names and the qualities of their products are
of international level. These units are the main players in the export field. The current
output (8 working hours per day) of the Gujrat cluster is about 70,000,00(Seven
million fans per annum). A rough estimate unveiled that the installed capacity of the
cluster was almost double. Hence, the fan manufacturers were operating under
capacity;
their existing setup could attain double output at the minimum provided exploration
of new markets, availability of finance and other variants as closely matched and
explained later in the report. The above mentioned yearly production could be
segregated on the basis of different kind of fans being produced in the following
manner:
Electric Fans Total Production Percentage (%)
Pedestal fan 21,000,00 30
Bracket fan 490,000 7
Ceiling fan 44,100,00 63

Fan Exports up to dates:

Fan production belongs to light engineering industry. Pakistan exported electric fans
worth US$ 38.046 million in 2016-2017. (FBS data) This shows an export growth
of 10.9% as compared to 2015-2016 export figure of US$ 34.311 million. Major
importing countries were Sudan, Yemen, UAE, Bangladesh, etc.

FAN INDUSTRY PROFILE

Characteristics Value
Number of units 450
Total Installed Capacity 9.5 - 10 Million Fans (annual)
Current Production 8 Million Fans
Contribution to National Exports 0.15%
Sector Employment 25-30,000
Capital Labor Ratio 6 workers/Million (Rs)
Total estimated Investment Rs. 5.0 Billion

Major Manufacturers
 BRAND NAME COMPANY

PAK FAN M/S Wahid Industries Limited, G.T. Road, Gujarat

G.F.C. FAN M /s General Fan Company(Pvt) Ltd, G.T. Road, Gujarat

YOUNUS FAN M/s Younas Metal Works , G.T.Road, Gujarat

ROYAL FAN M/s Rafiq Engineering Industries (Pvt) Ltd, , G.T. Road,
Gujarat

MATRO FAN M/s Hi Tech Industries (Pvt) Ltd, , G.T. Road, Gujarat

PARWAZ FAN Parwaz Engineering Co.(Pvt) Ltd.

GLOBAL FAN Global Electronics,G.T. Road Gujarat

STARCO FAN U.I. Industries G.T.Road Gujrat

Our Mission:
To develop and deliver the most innovative fan products, manage customer
experience, deliver quality service that contributes to brand strength, establishes a
competitive advantage and enhances profitability, thus providing value to the
stakeholders of the company.

BRIEF DESCRIPTION OF PROJECT & PRODUCT

Fan guards are primarily used to provide a physical barrier around revolving fan
blades of different types of pedestal and bracket fans to prevent accidental contact
with fingers or other objects. They are typically constructed using metal wire or
plastic. Fan guards are manufactured in a variety of configurations, which depend
upon the degree of accessibility required, and the shape of the fan blades themselves.
Fan guards are designed to maximize airflow while minimizing noise. Fan guards
manufacturing is a part of vendors industry for fan manufacturing sector.
This particular feasibility provides information for setting up a fan guards
manufacturing unit on a small-scale level that will operate as a vendor for fan
manufacturers. Fan guards are manufactured in different diametric sizes and
measured in terms of their weight depending upon the requirements of fan
manufacturers. The most common fan guard used in the local fan industry generally
weighs 3 kg on average, with a diameter of approximately 26-inch. Accordingly, the
proposed unit will mainly cater to 1.5 kg and 3 kg fans guards and will have an
installed capacity of producing around 101,250 guards annually on 8 hours single
shift basis.
Since, fan guard is an industrial product and, therefore, its target market cannot be
defined in terms of gender, age bracket, profession, etc. The factors involved in
defining the target market for fan guard would be the size of the fan manufacturing
unit, the quality of fan it produces, and the price the customer is willing to pay for
the product.
The proposed project would mainly cater to the fan manufacturer’s demand of fan
guards for following types of fans:
• Pedestal Fans
• Bracket Fans
• TCP (Table cum pedestal) Fans
• Baby Fans
• Railway Fans
• Air Coolers
Presently, fan-manufacturing units in Pakistan are predominantly concentrated in the
districts of Gujranwala, Gujrat and Sialkot. Therefore, the ideal location for
proposed fan guards manufacturing is the industrial estates / cluster of these two
cities mainly due to easy availability of customers and skilled labor force.
The Fan Guard manufacturing business is assumed to operate as a sole
proprietorship, however, partnership opportunities may be explored if further
investment is required.

Production Process Flow

The production process flow of proposed fan guards manufacturing units mainly
entails the following key process:

Installed and Operational Capacities

This pre-feasibility is based on a combination of different types of machines related

to above stated production operations. Accordingly to the capacity of installed
machines the proposed unit can manufacture 450 guards per day on 8 hours single
shift basis. The details of overall installed, operational and maximum capacity
utilization of the proposed unit is provided below:
 Installed and Operational Capacities
Total Maximum
Percentage Operational
Description / Production Operational
of Capacity 75
Product Mix Capacity Capacity 90%
Production % (Year 1)
(Annually) (Year 03-10)
Fan Guard 1.5 Kg 10% 13,500 10,125 12,150
Fan Guard 3 Kg 90% 121,500 91,125 109,350
Total 135,000 101,250 121,500

CRITICAL FACTORS
The commercial viability of the proposed fan guards manufacturing unit depends on
the following critical factors:
 Availability of skilled labour having technical knowledge.
 Ability to generate work orders through industrial networking, direct
marketing and negotiating long term contracts.
 Selection of appropriate machinery, technology and human resources would
be required to run project successfully.
 Stringent supervision of the production process at every level; utilization of
job costing and job card with technical specifications sheet
 The most important factor for the success of the project would be the quality
products and customer satisfaction in order to get a comparative advantage.

POTENTIAL TARGET MARKETS / CITIES

Major target market for proposed unit includes manufacturers of different types of
fans, especially Pedestal, Bracket, Railway Fans and Room Coolers etc.,
predominantly based in Gujranwala and Gujrat districts. However, there is also a
growing demand for the product in Sialkot, Lahore and Karachi.
The production of 3 kg weight fan guards is the highest, as they are used in the
pedestal and bracket fans, which have the highest, market demands in terms of their
usage.
Additionally, fan guards manufactured from Pakistan have huge export potential in
Malaysia, Middle Eastern, African and Korean markets.
PROJECT COST SUMMARY
A detailed financial model has been developed to analyze the commercial viability
of Fan Guard Manufacturing Unit. Various cost and revenue related assumptions
along with results of the analysis are outlined in this section.
The projected Income Statement, Cash Flow Statement and Balance Sheet are also
attached as annexure.

Project Economics

All the figures in this financial model have been calculated for estimated sales of
Rs. 42.45 million in the year one. The capacity utilization during year one is
worked out at 75% with 10% increase in subsequent years up to the maximum
capacity utilization of 90%.
The following table shows internal rate of return, payback period and net present
value of the proposed venture:
Project Economics

Description Details
Internal Rate of Return (IRR) 27%
Payback Period (yrs.) 4.11
Net Present Value (Rs.) 17,099,347

Project Financing
Following table provides details of the equity required and variables related to bank
loan:
Project Financing
Description Details

Total Equity (50%) Rs. 14,822,667

Bank Loan (50%) Rs. 14,822,667
Markup to the Borrower (%age / annum) 14%
 Tenure of the Loan (Years) 5

Project Cost
Following fixed and working capital requirements have been identified for
operations of the proposed business:
Project Cost

Description Amount Rs.

Capital Cost
Land 13,000,000
Building / Infrastructure 5,760,368
Machinery and Equipment 7,860,000
Furniture and Fixture 151,500
Office Equipment 97,000
Pre-operating Cost 1,250,421
Total Capital Cost 28,119,289
Working Capital
Raw Material Inventory 1,202,005
Cash 300,000
Equipment Spare Part Inventory 24,040
Total Working Capital 1,526,045
Total Project Cost 29,645,334

Space Requirement

Approximately 4 Kanal of land would be required for establishment of proposed

unit, it is recommended that required land should be procured in the industrial estates
of identified potential cities. The total cost of land is estimated at Rs. 13.00 million.
The infrastructural requirements of the project mainly comprises of the construction
of management office, production area, store and open area.
Machinery & Equipment Requirement
Machinery and equipment for the proposed project are stated below:
Machinery & Equipment Requirement

Unit Cost Total Cost

Description Quantity
(Rs.) (Rs.)
Flower Making Machine 3 250,000 750,000
Hydraulic Press, capacity 40 ton 2 35,000 70,000
Roller Machine to make rings 2 225,000 450,000
Spot welding with fixtures 8 150,000 1,200,000
Welding Transformer 2 35,000 70,000
Strip Cutting Machine 2 25,000 50,000
Power Press (15 Ton) 2 65,000 130,000
Ring Welding Machine 2 200,000 400,000
Grinder 1 15,000 15,000
Cutting Press 2 20,000 40,000
Miscellaneous 1 1,500,000 1,500,000
Polishing Section
Polishing Machine Bench Type Double 2 40,000 80,000
Flexible Lead Type Polishing Machine 1 55,000 55,000
Pickling Section
Acid tank with rubber lining 2 150,000 300,000
Electro Plating Tank with Stirring
System, Temperature Control and 1 500,000 500,000
Heating System
Nickel Plating Tank Temperature
Control and Stirring System (3000 Amp 1 500,000 500,000
Rectifier)
Chrome Plating Tank Inside Lead
Lining Stirring System With Rectifier 1 500,000 500,000
(1000 Amp)
Powder Coating 1 500,000 500,000
Generator (100 KVA) 1 750,000 750,000
Total 7,860,000
Proposed Machinery:

Dying Machine Motor Winding Machine

Drilling Machine Sheet Cutting & Molding

 Dicasting Machine

Furniture & Fixtures Requirement

Details of the furniture and fixture required for the project are given below:
Furniture & Fixture Requirement
Unit Cost Total Cost
Description Quantity
(Rs.) (Rs.)
Table for Manager 1 12,000 12,000
Chair for Manager 1 7,000 7,000
Table 6 3,500 21,000
Chair 12 2,500 30,000
File Cabinet 1 6,500 6,500
Sofa Set 1 15,000 15,000
Air Conditioners (1.5 Ton Split) 1 60,000 60,000
Total 151,500

Office Equipment Requirement

Following office equipment will be required for the proposed project:
Office Equipment Requirement
Unit Cost Total Cost
Description Quantity
(Rs.) (Rs.)
 Laptop 1 50,000 50,000
Computer Printer 1 15,000 15,000
Telephone Sets 2 1,000 2,000
Fax Machine 1 15,000 15,000
Scanner 1 15,000 15,000
Total 97,000

“Individual Growth and Development”

We strongly believe in the dignity and value of people. We must consistently treat
each other with respect and strive to create an organizational environment in which
individuals are encouraged and empowered to contribute, grow and develop them
and help to develop each other.

Raw Materials
Most of the raw materials used by the fan industry are directly or indirectly imported
from different countries. Irregular and constrained supplies of some basic input are
the main bottlenecks. Some of the raw materials used in the manufacturing of a fan
are: electric steel sheets, Aluminium, enameled copper wire, ball bearing, steel rod
and PVC. Major fan producing countries are Japan, Korea, Taiwan, Hong Kong,
India and China. Japan is covering high quality market segment of fan market. Korea
and Hong Kong are in middle segment of market while Pakistan, India, Taiwan and
China are supplying comparatively low quality products at cheaper prices. The
current average consumption of the main materials according to the mentioned
percentages for fan manufacturing is as follows:

S.NO. Name of material Quantity

1 Copper enameled 39,739,50 kg
wire
2 Aluminium 10,790,000
kg
3 Ball bearings 13,400,000
 4 Aluminium 41,176,25 kg
blades
5 Iron guards 29,000,00 kg
6 Capacitors 70,000,00
7 Raw pug iron 15,440,000
kg
8 Electrical steel 23,118,450
sheets kg

Human Resource Requirement

Following table provides details of human resource required for the proposed
venture:

Human Resource Requirement

Description No. of Employees Monthly Salary per person (Rs.)

Owner / Manager 1 60,000
Plant Manager 1 35,000
Purchaser 1 28,000
Accountant 1 22,000
Office Boy 1 14,000
Gate keeper 1 14,000
Sweeper 1 14,000
Total 07 187,000

Utilities and Other Costs

An essential cost to be borne by the project is the direct electricity expenses, which
are estimated to be around Rs. 2,735,655 in year one. The other electricity expenses
are assumed as Rs. 102,960 in year one, with 10% increase in subsequent years.
Furthermore, promotional expense being essential for marketing of the proposed unit
is estimated as 2% of revenues.

Revenue Generation
Based on the capacity utilization of 75%, sales revenue during the first year of
operations is estimated as under:

Revenue Generation – Year 1

1st Year Total Revenue (Rs.)

Product Unit Sale Price
Capacity
Fan Guards
90% 450 87,328 39,297,555
(3kg)
Fan Guards
10% 325 9,703 3,153,507
(1.5kg)
Total 97,031 42,451,062

Manufacturing process of Medium sized

Manufacturers
PRODUCTS OF THE COMPANY
The project involves purchase of minor parts, manufacturing the main parts (motor
winding) and then packing and marketing the product under a brand. The branded product
will be positioned in competition with other branded and unbranded products. It is
suggested that the company should initially introduce its products in the rural or small
town markets where brand awareness is easy to make and heavy advertisement budget
is not required.

The proposed product mix of the company is as under;

Pedestal
fan Ceiling
fan
Exhaust
fan
PROPOSED PRODUCTS OF THE COMPANY
Distribution Channel
In big cities like Karachi, Lahore, Peshawar, Hyderabad, large manufacturers used
to sell their products either through their own outlets or through distributors. The
distributors in-turn used to engage and distribute fans amongst other clients
including dealers, sub dealers and retailers. On the other hand, medium & small
manufacturers used to sell their products only through several intermediary agents
and small retailers. In far flung rural towns and villages, the sales business was
usually conducted by small retailers. The typical distribution channel model used by
the entrepreneurs is depicted in the diagram below
Calculations
Income Statement

Year 1 Year 2 Year 3 Year 4 Year 5

Revenue 42,451,172 54,952,734 64,170,176 70,750,969 77,826,066

Cost of sales
Raw Material Cost 28,848,118 37,343,680 43,607,485 48,079,528 52,887,481
Cost of goods sold 2 - - - - -
Operation costs 1 (direct labor) 724,500 827,524 912,643 1,006,236 1,106,860
Operating costs 2 (machinery maintenance) 144,241 186,718 218,037 240,398 264,437
Operating costs 3 (direct electricity) 2,735,655 3,541,286 4,135,280 4,559,362 5,015,298
Operating costs 4 (direct water) 180,000 198,000 217,800 239,580 263,538
Operating costs 5 (direct gas) - - - - -
Total cost of sales 32,632,514 42,097,208 49,091,244 54,125,104 59,537,614
Gross Profit 9,818,658 12,855,527 15,078,932 16,625,865 18,288,452

General administration & selling expenses

Administration expense 1,488,000 1,636,800 1,800,480 1,980,528 2,178,581
Administration benefits expense 74,400 81,840 90,024 99,026 108,929
Electricity expense 102,960 113,256 124,582 137,040 150,744
Travelling expense 74,400 81,840 90,024 99,026 108,929
Communications expense (phone, fax, mail, internet, etc.) 74,400 81,840 90,024 99,026 108,929
Office vehicles running expense - - - - -
Office expenses (stationary, entertainment, janitorial services, etc 74,400 81,840 90,024 99,026 108,929
Promotional expense 849,023 1,099,055 1,283,404 1,415,019 1,556,521
Insurance expense - - - - -
Professional fees (legal, audit, consultants, Medical etc.) 424,512 549,527 641,702 707,510 778,261
Depreciation expense 1,108,568 1,108,568 1,108,568 1,108,568 1,108,568
Amortization of pre-operating costs 250,084 250,084 250,084 250,084 250,084
Amortization of legal, licensing, and training costs - - - - -
Property tax expense
Bad debt expense - - - - -
Miscellaneous expense 1
Subtotal 4,520,748 5,084,651 5,568,915 5,994,855 6,458,475
Operating Income 5,297,910 7,770,876 9,510,016 10,631,010 11,829,976
Gain / (loss) on sale of office equipment - - - - 38,800
Earnings Before Interest & Taxes 5,297,910 7,770,876 9,510,016 10,631,010 11,868,776
Interest expense on long term debt (Project Loan) 1,968,350 1,670,571 1,331,103 944,110 502,937
Interest expense on long term debt (Working Capital Loan) 99,735 82,812 63,362 41,007 15,314
Subtotal 2,068,085 1,753,383 1,394,465 985,117 518,251
Earnings Before Tax 3,229,825 6,017,493 8,115,551 9,645,893 11,350,526

Tax 529,956 1,328,622 2,062,942 2,598,562 3,195,183

NET PROFIT/(LOSS) AFTER TAX 2,699,869 4,688,871 6,052,609 7,047,331 8,155,342

Calculations
Balance Sheet
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Assets
Current assets
Cash & Bank 300,000 480,137 3,732,175 7,407,146 11,688,987 16,459,740
Accounts receivable 3,489,137 4,002,900 4,895,462 5,544,705 6,105,906
Finished goods inventory 1,418,805 1,762,691 2,050,214 2,255,213 2,480,734
Equipment spare part inventory 24,040 34,232 43,971 53,328 64,527 78,078
Raw material inventory 1,202,005 1,711,585 2,198,544 2,666,411 3,226,357 3,903,892
Pre-paid annual land lease - - - - - -
Pre-paid building rent - - - - - -
Pre-paid machinery & equipment lease interest - - - - - -
Pre-paid office equipment lease interest - - - - - -
Pre-paid office vehicles lease interest - - - - - -
Pre-paid insurance - - - - - -
Total Current Assets 1,526,045 7,133,896 11,740,281 17,072,561 22,779,788 29,028,348

Fixed assets
Land 13,000,000 13,000,000 13,000,000 13,000,000 13,000,000 13,000,000
Building/Infrastructure 5,760,368 5,472,350 5,184,331 4,896,313 4,608,294 4,320,276
Machinery & equipment 7,860,000 7,074,000 6,288,000 5,502,000 4,716,000 3,930,000
Furniture & fixtures 151,500 136,350 121,200 106,050 90,900 75,750
Office vehicles - - - - - -
Office equipment 97,000 77,600 58,200 38,800 19,400 156,219
Total Fixed Assets 26,868,868 25,760,300 24,651,731 23,543,163 22,434,594 21,482,246

Intangible assets
Pre-operation costs 1,250,421 1,000,337 750,252 500,168 250,084 -
Legal, licensing, & training costs - - - - - -
Total Intangible Assets 1,250,421 1,000,337 750,252 500,168 250,084 -
TOTAL ASSETS 29,645,334 33,894,533 37,142,265 41,115,892 45,464,467 50,510,594

Liabilities & Shareholders' Equity

Current liabilities
Accounts payable 3,789,638 4,903,510 5,738,457 6,362,977 7,043,904
Export re-finance facility - - - - - -
Short term debt - - - - - -
Other liabilities
Total Current Liabilities - 3,789,638 4,903,510 5,738,457 6,362,977 7,043,904

Other liabilities
Machinery & equipment lease payable - - - - - -
Office equipment lease payable - - - - - -
Office vehicle lease payable - - - - - -
Deferred tax - - - - -
Long term debt (Project Loan) 14,059,644 11,932,652 9,507,880 6,743,640 3,592,406 -
Long term debt (Working Capital Loan) 763,023 649,707 519,468 369,780 197,737 -
Total Long Term Liabilities 14,822,667 12,582,358 10,027,348 7,113,420 3,790,143 -

Shareholders' equity
Paid-up capital 14,822,667 14,822,667 14,822,667 14,822,667 14,822,667 14,822,667
Retained earnings 2,699,869 7,388,740 13,441,349 20,488,681 28,644,023
Total Equity 14,822,667 17,522,536 22,211,407 28,264,016 35,311,347 43,466,690
TOTAL CAPITAL AND LIABILITIES 29,645,334 33,894,533 37,142,265 41,115,892 45,464,467 50,510,594
Calculations
Cash Flow Statement

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Operating activities
Net profit 2,699,869 4,688,871 6,052,609 7,047,331 8,155,342
Add: depreciation expense 1,108,568 1,108,568 1,108,568 1,108,568 1,108,568
amortization of pre-operating costs 250,084 250,084 250,084 250,084 250,084
amortization of training costs - - - - -
Equipment inventory (24,040) (10,192) (9,739) (9,357) (11,199) (13,551)
Raw material inventory (1,202,005) (509,580) (486,959) (467,866) (559,946) (677,535)
Pre-paid building rent - - - - - -
Accounts payable 3,789,638 1,113,872 834,947 624,520 680,927
Cash provided by operations (1,226,045) 2,420,445 5,807,049 6,588,899 7,605,118 8,717,115

Financing activities
Project Loan - principal repayment (2,126,993) (2,424,772) (2,764,240) (3,151,234) (3,592,406)
Working Capital Loan - principal repayment (113,316) (130,238) (149,689) (172,043) (197,737)
Additions to Project Loan 14,059,644 - - - - -
Additions to Working Capital Loan 763,023 - - - - -
Issuance of shares 14,822,667 - - - - -
Purchase of (treasury) shares
Cash provided by / (used for) financing activities 29,645,334 (2,240,309) (2,555,010) (2,913,928) (3,323,277) (3,790,143)

Investing activities
Capital expenditure (28,119,289) - - - - (156,219)
Acquisitions
Cash (used for) / provided by investing activities (28,119,289) - - - - (156,219)
NET CASH 300,000 180,137 3,252,038 3,674,971 4,281,841 4,770,752