Yufei Electronics PLC

TV Assembling Factory
Project Study

February 2019

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Contents

Executive Summery............................................................................................................................................1
1. Introduction...............................................................................................................................................2
1.1. General Company Description...........................................................................................................2
1.2. Objectives...........................................................................................................................................3
1.3. Product and Service...........................................................................................................................3
2. Market Study.............................................................................................................................................4
2.1. Market Size in Total............................................................................................................................4
2.2. Subdivision Product Sales Size...........................................................................................................4
2.3. Market Sales Status and Feature Analysis..........................................................................................4
2.4. Market Competition...........................................................................................................................5
2.5. Sales Environment..............................................................................................................................6
2.6. Comparative advantage.....................................................................................................................6
2.7. Marketing tactics and campaigns.......................................................................................................7
3. The project.................................................................................................................................................8
3.1. Raw material, Process flow and facility layout...................................................................................8
3.2. Quality management........................................................................................................................11
3.3. Implementation Schedule................................................................................................................12
3.4. Organization and Management........................................................................................................12
4. FINANCIAL ANALYSIS................................................................................................................................15
4.1. Fixed Investment..............................................................................................................................15
4.2. Important Assumptions....................................................................................................................16
4.3. Expenses..........................................................................................................................................17
4.4. Profitability.......................................................................................................................................18
4.5. Break-even Analysis.........................................................................................................................19
4.6. Internal Rate of Return.....................................................................................................................20
4.7. SENSITIVITY TEST..............................................................................................................................21
4.8. Net Present Value............................................................................................................................21
4.9. ECONOMIC BENEFITS.......................................................................................................................21

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List of Tables
Table 1Parts of LED TV and their functions......................................................................................................9
Table 2 Implementation Schedule....................................................................................................................12
Table 3 Human Resource Requirement...........................................................................................................14
Table 4 Total Fixed Capital...............................................................................................................................16
Table 5 Total Capital Investment.....................................................................................................................16
Table 6 Sales Projection...................................................................................................................................17
Table 7 Cost of Production (Per annum)..........................................................................................................18
Table 8 Projected Profit and Loss Account......................................................................................................18
Table 9 Computation of Financial Internal Rate of Return...............................................................................20

List of Figures

Figure 1 Marketing Goal.......................................................................................................................6

Figure 2 Assembling lay out..................................................................................................................7
Figure 3 Generic exploded view of a LED TV......................................................................................8
Figure 4 Interrelationship between the LED enterprise and its suppliers............................................10

List of Appendix

APPENDEX 1 Project Cash Flow.......................................................................................................21

APPENDEX 2 Projected Balance Sheet..............................................................................................22

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Executive Summery
1.Project Activity TV Assembling Factory

2.Project Owner Yufei Electronics PLC

3.Nationality Chinese

4.Project location Finfinee area Oromia Special zone, Sendafa

5.Primeses Required 2,000m2

6. Startup Capital For undertaking any activities. Hence for implementing this
project a total of 65,339,950 Eth birr is required which will
be covered by the promoter of the project

7.Employement This project deemed to employ a total of 42 permanent jobs

opportunities for Ethiopians

8. For The region/ Import Substitution, source of employment

country

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 1. Introduction

1.1. General Company Description

The owner of the company (Yufei Electronics PLC) has been engaged here in
Ethiopia in Energy saving lamp. So the promoter want to extend these business
reputation and experience on LED TV’s assembling which have huge demand in
the country.

TV assembling in Ethiopia has recent history and there is not more than 10
television assembling company. Most of the country (93 %) TV demand fulfilled
by importing from abroad. So the main aim of the company is to assemble the
TV here in Ethiopia in short term and start to produce TV parts by providing
employment opportunity for local people. The company is located in Oromia
Region around Sendafa town and the project will cost around 65,339,950.00 birr
or USD 2,253,101.72 (hence by taking 1usd=29 Birr) initial investment capital.

Vision
To become a deployment of technology and world-class manufacturer of
Televisions, that can be found in many household in Ethiopia. Further, the
company wants to establish economically viable and high quality with
affordable price.
Mission
The mission of the company is to become a profitable, self-sustainable, reliable
company that provides a television technology that has high quality pictures.
The company will maintain the highest level of quality, and ensure prompt
delivery and efficient client services at all times.

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Values
The core values of Yufei Electronics PLC are very important in order to ensure
product quality and reliable products:
Commitment: The staff is committed to their job and getting the work done.
Continuous improvement: The Company will strive to improve products in
terms of price, size and performance.

1.2. Objectives

The short-term objectives of the company are to manufacture the most cost-
effective Televisions, to promote the product effectively by applying aggressive
marketing, so that it reaches the target market, and thence to conduct the
business in an efficient and profitable way. The goal is to create a flexible
product that will be altered over time with new technology advancements.

1.3. Product and Service

Television productions are started in mid 20 th century from black and white TV,
Color TV, and Standard Definition (SDTV) and know High Definition (HDTV)
which provides a resolution that is substantially higher. Also the feature of TV
technology progressed Set-Box, CTR TV, TVT LCD and the consumer electronics
& home entertainment (TV) business leaning on LED and smart TV concepts
lately.
The promoter wants to assemble the recent model of TV which is LED TV which
uses Light Emitting Diode (LED) technology that providing more accurate color
fidelity. As the country’s population and economy increase, the demand and
preference of quality products tend to increase. So as Ethiopia’s has the 2 nd
highest population and the fastest economic growth in Africa, the promoter
wants to explore this advantage in home entertainment (TV) business by
assembling high quality and low price LED TV using the recent technology
available. The promoter wants to assemble from 24 inch up to 49 inch at
initially.

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 2. Market Study

2.1. Market Size in Total

It is provided by Ethiopian Central Statistical Agency that:

Year Population Status

2015 90,524,707 Increasing with 2.58%

2016 92,860,244 Increasing with 2.58%
2017 95,256,038 Increasing with 2.58%

This second largest population in Africa means not only too many crowded
people together, also a huge and potential market for many different industries
including home entertainment devices (TV). What’s more, this big market is still
increasing with about the rate of 2.58%. The people above 15 years old are
possibly our product users. Therefore this is a market full of chances and
challenges.

2.2. Subdivision Product Sales Size

There is around 20,000,000 household (assuming there is 5 person per

household) customer market in Ethiopia, at least 1 piece TV as per family; 80%
of them are LED/LCD new type of TV product.

2.3. Market Sales Status and Feature Analysis

Regional Feature

Except for some region which is deeply harmed and affected by contraband
product from Mid East through Kenya and Somalia every year, most region of
this market is controlled by international brand like LG, Samsung; also by local
Super Fine, Amaz, Coronet, Canca and Chinese brand like Skyworth, Haier and
KONKA. Honestly, this is a big market but already full of strong competitors.

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These brands have devoted into this market for many years and built up their
brand reputation. This is disadvantage for a new brand.

Customers Features

The survey done to check the demand of TV set shows that, consumer like to
have larger inch TV with reasonable price. So the promoter want to assemble 32
inch television and above. The current TV price range presented below

Brand LG, Samsung Hisense, Super Fine, Coronet

KONKA
32’’ 11500-13000 8000-10,500 8000-10,500
42’’ 14000-17000 12000-15000 12500-14,000
49 18000-20800 15000-17000 15000-17000

2.4. Market Competition

The following table is a market research table based on Customer Survey (may
be always changing):

Brand Quantity 20+ brands

Brand Name LG, Garad, GEC, KTV, Primo, Patters, KONKA,
Super Fine, Mewe, Amaz, TCL, Haier, Canca,
Skyworth, Hisense, Sony, Flat, T-plus, Coronet,
Samsung
Distributors 50+ main distributors
NO.1-NO.5 Brand 1. Super Fine 2. LG 3.Coronet
4. Amaz 5. Skyworth

2.5. Sales Environment

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Local assemblers only have the right to import raw materials and assembler in
local factory. It is known and worried that Ethiopia is always in foreign currency
especially US dollar shortage, which often brings difficulties to assemblers’
factory production and company operation.

Assemblers could sign distribution agreement with legal company for product
sales. That is the way assemblers sell. However, it is a risk that many local
employees cheat company and agents money to run away, hard for company to
report police and find out these local criminals.

This market is full of competitors and risks for a new manufacturer. It is not a
easy decision to invest here. The government must give enough support and
protect if it wishes investors stay here for long time even forever, meanwhile, to
do its best to reduce disadvantages and negative elements.

2.6. Comparative advantage

Pricing the product of the project under consideration is based on the following
fact
 Cost of raw material input
 Cost of skilled and unskilled labor
 Cost of indirect input
 Magnitude of different tax
 Profit margin of the company
Skilled and unskilled labor is available in comparatively cheap in Ethiopia. There
is also duty free privilege for capital goods and tax exemption given for new
investment. Above all effective and efficient management help to produce
quality and low cost product.

2.7. Marketing tactics and campaigns

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Figure 1 Marketing Goal
Time framed
Marketing phase is scheduled to last about 5years. This duration is long enough for the product to be known
Realistic
Create awareness campaigns in various African countries. Aim at selling the product in 20 % of rural
households in SADC within 10 years,
Achievable
Setting aside promotion budget for marketing for the first 5 years. The high growth rate and product
awareness can only be reached with adequate finances available.
Measurable
The units sold should increase by 100 % per annum in the first 5 years. After 5 years it's possible that the
product price might decreas
Create an aggressive product marketing awareness campaign Specific
Set up marketing goals and strategies
Create a brand image
was used as guide to reach the marketing goal,
SMART (Specific, Measurable, Achievable, Realistic and Time framed) objective
In order to have an effective marketing strategy for the Sterling system, a
 3. The project

3.1. Raw material, Process flow and facility layout

Almost all components are imported including the process and the technology.
Assembly line wil1 be established. The line will be operated both mechanically
and manually. Components will distributed to workers sitting or standing at
specific location and stage by stage components will be fitted in various parts of
the set until completed sets are assembled. After the set finished each product
thoroughly checked to have the quality needed.

Figure 2 Assembling lay out

The assembling process requires being very efficient and skillful due to the
sensitivity of the raw material. The assembled part is shown in the figure 3 and
table 1.

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 Figure 3 Generic exploded view of a LED TV
Table 1Parts of LED TV and their functions.

Plastic part that end-users perceive as outer box includes all components in.
1 Front cabinet ID creates the overall shape/application differences.
Panel Assembly part is called as LC (Liquid Crystal) Cell. It contains Bare
LC cell, COF (Chip on Board) and Driver Board. There are three main
technology type of LC cell which are TN (Twisted Nematic), VA (Vertical
2 Panel assembly Alignment) and IPS (In Plane Switching).
Plastic frame holding the layers of optical films in order and gathers them
3 Mold frame with panel assembly. It closes with the integration back cover
Optical films main purpose is to create uniform luminance distribution on
the BLU (Backlight Unit) with the help of Light sources according to target
4 Optical films specs.
Located at the back side of the optical pool, reflecting the light which has
the opposite direction of the active display side and which reflected back
from the top optical films.Its reflection ratio is around 98%. Different than
mirrors, reflector sheets diffuse (spectral- lambertian) the light to create a
4.1 Reflector Sheet: uniform light distribution.
Used in edge type BLU's. Directs the from its source light perpendicular to
4.2 Light Guide Plate display.
Supports the other films with its strong structure, has high light diffusing
4.3 Diffuser Plate capability, protects more fragile sheets from heat.
4.4 Diffuser Sheet Prevents the moire effects caused by BEF. Protects the BEF

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 Prism Sheet BEF
(Brightness Normalizes most of the light forthe audience. Refflects back the light
4.5 Enhancement Film) coming in wide angles and provides it to come in right angle.
Polarizer Film DBEF
(Dual Brightness
Enhancement Film Dual
4.6 Film) Controls the angle, reflection and polarization of the light.
The light source of the display/two types: at the edges or placed directly
5 Led Light Bars behind the films
8 Heat Sink  
9 Integration Back Cover BC that holds the module components together with the mold frame.
10 ESD Protection Electrostatatic Discharge protection shields to prevent electrocution.
Electronic boards with necessary integrated circuits to take appropriate
Power Board & Main electrivity in and make the display process the data and make the TV
11 Board & RF-IR Cards "work".
12 Back Cover Plastic covering whole product and assembled to the front cover's bosses.

The main raw material for the assembling is imported from China. The supplier
and the promoter relationship can be seen in fig 4

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Figure 4 Interrelationship between the LED enterprise and its suppliers

3.2. Quality management

The Promoter will develop, integrate and implement the following quality
management systems as Integrated Management System (IMS):
 The IPC-A-610D standard for “Acceptability of Electronic Assemblies”
focuses on two main principles of standardization namely: design for
manufacture (DFM) and design for the environment (DFE) and will be at
the core of the quality management of the enterprise. This document
gives guidance on the PCB orientation; inspection methodology; handling
of electrical overstress / electrostatic discharge and installation of
hardware.

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  ISO 9001:2008 - to assist the enterprise with the identification of gaps, to
measure, control and improve various core business processes that will
ultimately lead to the overall improved business performance
 OHSAS 18001 - all the required measures relating to occupational health
and safety, including safety signage; floor demarcations; training and
protective clothing

3.3. Implementation Schedule

The major activities in the implementation of the project has been listed and the
average time for implementation of the project is estimated at 12 months
Fe ma Ap Ma Ju Ju Au Se Oc No De Ja
    b r r y n l g p t v c n
Preparation of Project
1 Report                        
Registration & other
2 formalities                        
3 Plant & Machinery :-                        
3.
1 Placement of orders                        
3.
2 Procurement                        
3. Power Connection /
3 Electrification                        
3. Installation / Erection of
4 machinery/Test Equipment                        
Procurement of raw
4 materials                        
Recruitment of Technical
5 Personnel etc.                        
6 Trial Production                        
7 Commercial Production                        
Table 2 Implementation Schedule

3.4. Organization and Management

The management team plays a huge role in any company and will oversee all
the business transactions. The management team is the link between company
and customers. They also identify the risks of the business and, most

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importantly, guide the business on the route to success. In the initial phase of
the business, job positions will be limited, but, as the business starts to grow,
new management positions will be made available.
General Manager
The GM will be the general overseer of the business. The responsibilities of the
GM will be broad in the initial phase of the business until a point where the
relevant employees are hired, and they include maintaining the image of the
business, managing, training and employees, developing strategic plans for new
opportunities that can create wealth for the business, improving the product
and working conditions for employees.
Marketing Team
The marketing officer should have good communication skills and have
outstanding marketing skills. The marketing officer will be responsible for
identifying new markets and maintaining existing markets in the quest for
market domination. The other responsibilities are to create an aggressive
marketing strategy, increase market penetration, manage and control
marketing matters, be responsible for distribution and logistics of products, and
manage media relations.
Financial Team
The financial manager is a key player in the business, one requiring an excellent
financial understanding. The financial manager will be responsible for
budgeting, allocating funds, preparing financial projections, and collaborating
with other employees in setting up plans on how to allocate and manage assets.
Again, if the financial manager makes poor choices, these decisions may result
in considerable losses for the company.
Engineering Team
The Senior Engineers is responsible for producing the right quantity of the
product and to oversee production, making sure that there is neither shortage
nor overproduction. The production manager will be responsible for the senior
factory staff, factory supervisors and quality assurance officer.
Quality Assurance Team

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The duty of the quality assurance manager is to make sure that all quality
standards are followed in order to manufacture high-quality products. The
replacement of faulty and low quality products will result in losses for the
company. The quality assurance manager will set up quality-control
mechanisms to minimize faulty products and to create a chain from consumer
back to the factory, which allows faulty products to be brought back to factory
to be repaired.

Table 3 Human Resource Requirement

Human Monthly Total monthly

Resource Roles and responsibilities No of Staff Salary Cost
Management of the enterprise and its staff

Marketing of the products

Stakeholder interaction and management
Reporting (to all stakeholders)
Coordination of interest forums
General Compliance with applicable policies,
Manager legislative and regulatory frameworks 1 25000 25000
Finance Ultimate responsibility for financial
officers management 2 10000 20000
Planning, coordination and control of
manufacturing processes
Ensuring that products are produced
Senior efficiently and that the correct quantities are 1
engineer produced at the right cost and quality level 4 8,500.00 74,000.00
Administrato Setup and operation of the printer machine to 1
r print syringe barrels 1 2,500.00 12,500.00
Marketing Assess the market potential and distribute the 1
Manager product 4 0,200.00 40,800.00

Operators They will work as product assemblers. 20 7,000.00 140,000.00

Quality Provide the technical skills into each part of 1

assurance the assembly machines. 1 4,500.00 14,500.00

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officer

Driver Packing and delivering the TV 4 4,000.00 16,000.00

Store man Stock and supplies controls 1 4,000.00 4,000.00

Ensuring that areas are cleaned to the highest
standards at all times
Maintaining health and safety standards at all
times
Ensuring that equipment is cleaned,
Cleaner maintained and stored correctly 4 2,200.00 8,800.00
10
Total 42 7,900.00 355,600.00

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 4. FINANCIAL ANALYSIS

The whole business of Assembling and selling the LED TV was evaluated to
determine whether it is viable and worth investing in. The economic evaluation
covered a 5 year period. This was done by determining the NPV and IRR of the
expected cash-flow of the business.

4.1. Fixed Investment

The fixed investment cost required covering all the cost of machinery &
equipment, office furniture and other pre production cost is assumed to be
14,029,700.00 Birr and the total investment capital to start the project is
16,236,800.00 as it shown in table 4&5 respectively.

Table 4 Total Fixed Capital

S/N Description Value

13,590,000.00
1 Machinery and Equipment
439,700.00
2 Office Equipment
2,207,100.00
3 Pre Production Cost
16,236,800.00
Total

Table 5 Total Capital Investment

Description Total
16,236,800.00
Total Fixed Capital
32,103,150.00
Working Capital
48,339,950.00
Total

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 4.2. Important Assumptions

The financial analysis of the project is based on the data presented in the
previous chapters and the following assumptions:-

 Source of finance 100 % equity

 Discount cash flow 8.5%
 Accounts receivable 30 days
 Cash in hand 5 days
 Accounts payable 30 days
 Repair and maintenance 5% of machinery cost
 The basis for calculation of Production capacity has been taken on Single
Shift basis on 75% efficiency.
 The maximum capacity utilization on single shift basis for 300 days a
year. During first year of operations the capacity utilization is 80% and
the unit is expected to full capacity utilization from the second year
onwards.
 The Salaries and Wages Cost of Raw Materials, Utilities, Cost of Land and
Rents etc. are based on the survey made by the promoter in 2018.These
cost factors are likely to vary with time and location.
 The cost of Machinery and Equipment refer to a particular make/model
and the prices are approximate prices prevailing in 2018
 The breakeven point percentage indicated is of full capacity utilization.
 The project preparation cost etc., whenever required could be considered
under preoperative expenses.

Revenues
The company's revenue is derived primarily from the sale of the assembled TV.
The project plans to assemble 70,200 TV set for the first year and to assemble
on average 102,000 TV set starting from the second year.

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Table 6 Sales Projection

  2020 2021 2022 2023 2024

138,364,200.0
LED 24" 0 202,934,160.00 213,080,868.00 227,996,528.76 239,396,355.20

322,849,800.0
LED 22" 0 473,513,040.00 497,188,692.00 531,991,900.44 558,591,495.46

246,682,800.0
LED 42" 0 361,801,440.00 397,981,584.00 437,779,742.40 459,668,729.52

105,721,200.0
LED 49" 0 155,057,760.00 170,563,536.00 187,619,889.60 197,000,884.08

813,618,000.0 1,193,306,400.0 1,278,814,680.0 1,385,388,061.2

Total Sales 0 0 0 0 1,454,657,464.26

4.3. Expenses

The company's expenses are primarily those of salaries, utilities, and insurance
costs. Other expenses are based on management's estimates and service
industry averages. The total cost of production annually is 784,032,962 Birr.
Table 7 Cost of Production (Per annum)

Description Total
770,475,600.00
Total Recurring Expenditure
Depreciation on Plant & Machinery @ 1,359,000.00
10%
Depreciation on office equipment, 43,970.00
furniture @ 20%
Interest on total capital investment @ 7,734,392.00
16%
779,612,962.00
Total

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 4.4. Profitability

According to the projected income statement, the project will start generating
profit in the second year of operation. The income statement and other
profitability indicators show that the project is viable. Based on the project
break even analysis, profit and loss statement shows that it generates profit
throughout its operations life.

Table 8 Projected Profit and Loss Account

 
Year 1 Year 2 Year 3 Year 4 Year 5

Total Revenues or
Sales 813,618,000 1,193,306,400 1,278,814,680.00 1,385,388,061.20 1,454,657,464.26

Cost of Goods Sold 763,620,000 1,123,512,000 1,179,687,600.00 1,226,875,104.00 1,263,681,357.12

Operating Income 49,998,000 69,794,400 99,127,080.00 158,512,957.20 190,976,107.14

General &
Administrative 6,855,600 7,541,160.00 8,295,276.00 9,124,803.60 10,493,524.14

Net Interest Expense 7,734,392 6,960,953 6,264,857.52 5,638,371.77 5,074,534.59

Depreciation and
Amortization 1,402,970 1,543,267 1,697,593.70 1,867,353.07 2,054,088.38

Operating Expence 15,992,962 16,045,380 16,257,727.22 16,630,528.44 17,622,147.11

Net Income Before

Taxes (NIBT) 34,005,038 53,749,020 82,869,353 141,882,429 173,353,960

Income Tax Expense - - - 42,564,728.63 52,006,188.01

Net Income After
Taxes (NIAT) 34,005,038 53,749,020 82,869,352.78 99,317,700.13 121,347,772.02

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 Net Revenues
Income After Taxes

140,000,000
$1,600,000,000
120,000,000
$1,400,000,000
100,000,000
$1,200,000,000
80,000,000
$1,000,000,000
60,000,000
$800,000,000
40,000,000
$600,000,000
20,000,000
$400,000,000

$200,000,000 -

$- Year 1 Year 2 Year 3 Year 4 Year 5

Year 1 Year 2 Year 3 Year 4 Year 5

4.5. Break-even Analysis

The break-even analysis establishes a relationship between operation costs and

revenues. It indicates the level at which costs and revenue are in equilibrium.
To this end, the break-even point of the project including cost of finance when it
starts to operate at full capacity (year 2) is estimated by using income
statement projection.

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 Fixed Cost
BE (as % age of capacity) = ------------------------ *100%
Sales – Variable Cost

16,045,380
BE = ------------------------------------ = 23%
69,794,400 – 20,363,380

4.6. Internal Rate of Return

The internal rate of return (IRR) is the annualized effective compounded return
rate that can be earned on the invested capital, i.e., the yield on the
investment. Put another way, the internal rate of return for an investment is the
discount rate that makes the net present value of the investment's income
stream total to zero. It is an indicator of the efficiency or quality of an
investment. A project is a good investment proposition if its IRR is greater than
the rate of return that could be earned by alternate investments or putting the
money in a bank account. Accordingly, the IRR of this project is computed to be
104 % indicating the viability of the project.

Table 9 Computation of Financial Internal Rate of Return

Operating Initial Net Benefit Net Benefit

  Income Total benefit Investment Operating Cost Total Costs Income Tax Before Tax After Tax

48,339,95
  0   48,339,950.00   (48,339,950.00) (48,339,950.00)
0

49,998,000 49,998,000   15,992,962 15,992,962   34,005,038.00 34,005,038.00

1

69,794,400 69,794,400   16,045,380 16,045,380   53,749,020.20 53,749,020.20

2

99,127,080 99,127,080   16,257,727.22 16,257,727.22   82,869,352.78 82,869,352.78

3
4  

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 42,564,728.6
158,512,957 158,512,957 16,630,528.44 16,630,528.44 3 141,882,428.76 99,317,700.13

52,006,188.0
190,976,107 190,976,107   17,622,147.11 17,622,147.11 1 173,353,960.03 121,347,772.02
5
IRR 111% 104%

4.7. SENSITIVITY TEST

Sensitivity test is also carried out to test how the project is sensitive to adverse
effects revenue decrease, operating cost and investment cost increase. To this
end, a 10% reduction in sales yields an after tax IRR of 92%, whereas a 10%
increase in operating costs and investment cost results an after tax IRR of 90%.

4.8. Net Present Value

Net present value (NPV) is defined as the total present (discounted) value of a
time series of cash flows. NPV aggregates cash flows that occur during different
periods of time during the life of a project in to a common measuring unit i.e.
present value. It is a standard method for using the time value of money to
appraise long-term projects. NPV is an indicator of how much value an
investment or project adds to the capital invested. In principal a project is
accepted if the NPV is non-negative. Accordingly, the net present value of the
project at 8.5% discount rate is found to be Birr 427 billion which is acceptable.

4.9. ECONOMIC BENEFITS

The project can create employment for 42 persons on permanent bases. In

addition to supply of the domestic needs, the project will generate Birr 42
million per year in terms of tax revenue after tax holyday period. The
establishment of such farm will have a foreign exchange saving effect to the
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country by substituting the current imports. Beside this, the project will promote
entrepreneurship and curb poverty through income generation and skills
training of the employees’.

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 APPENDEX 1 Project Cash Flow

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

Cash Inflow  

Owner Equity 48,339,950.00          

Loan Fund            

Net Profit   34,005,038.00 53,749,020.20 82,869,352.78 99,317,700.13 121,347,772.02

Net Inflow 48,339,950.00 34,005,038.00 53,749,020.20 82,869,352.78 99,317,700.13 121,347,772.02

Cash Out Flow  

Current Asset 16,236,800.00          

Increase in W.   6,855,600.00 7,541,160.00 8,295,276.00 9,124,803.60 10,493,524.14

Dividend 15%         14,897,655.02 18,202,165.80

Total Cash Out
Flow 16,236,800.00 6,855,600.00 7,541,160.00 8,295,276.00 24,022,458.62 28,695,689.94

Net Cash Flow 32,103,150.00 27,149,438.00 46,207,860.20 74,574,076.78 75,295,241.51 92,652,082.08

120,781,936.9
Cum Cash Flow 32,103,150.00 59,252,588.00 73,357,298.20 8 149,869,318.29 167,947,323.59
Retained
Earning - 34,005,038.00 53,749,020.20 82,869,352.78 99,317,700.13 121,347,772.02

Cum Retained 170,623,410.9

Earning - 34,005,038.00 87,754,058.20 8 269,941,111.11 391,288,883.14

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 APPENDEX 2 Projected Balance Sheet

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

Current Asset  

Cash 32,103,150.00 59,252,588.00 73,357,298.20 120,781,936.98 149,869,318.29 167,947,323.59

Inventory   6,855,600.00 7,541,160.00 8,295,276.00 9,124,803.60 10,493,524.14

Account
Receivables            

Sub Total 32,103,150.00 66,108,188.00 80,898,458.20 129,077,212.98 158,994,121.89 178,440,847.73

   

Fixed Assets 16,236,800.00 16,236,800.00 16,236,800.00 16,236,800.00 16,236,800.00 16,236,800.00

Less Depreciation
Cumulative - 811,840.00 1,623,680.00 2,435,520.00 3,247,360.00 4,059,200.00

Net Fixed Asset 16,236,800.00 15,424,960.00 14,613,120.00 13,801,280.00 12,989,440.00 12,177,600.00

Total Asset 48,339,950.00 81,533,148.00 95,511,578.20 142,878,492.98 171,983,561.89 190,618,447.73

Liability and
Capital  
Liability            
Bank Loan            
Sub Total            
Income  

Owner Equity 48,339,950.00 48,339,950.00 48,339,950.00 48,339,950.00 48,339,950.00 48,339,950.00

Account payable            

Retain Earning - 34,005,038.00 87,754,058.20 170,623,410.98 269,941,111.11 391,288,883.14

Sub Total 48,339,950.00 82,344,988.00 136,094,008.20 218,963,360.98 318,281,061.11 439,628,833.14

Total Liablility
and Capital 48,339,950.00 82,344,988.00 136,094,008.20 218,963,360.98 318,281,061.11 439,628,833.14

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