Assignment

On

1. Financial Statement of 3 Companies (Summit Power, Baraka Power & Mobil

Jamuna Ltd.)
2. Industry Background of 3 Companies
3. Why and how choose these 3 companies
4. Porter Five-factor analysis
5. SWOT Analysis

Submitted To: Submitted By:

Dr. Gazi Mohammad Hasan Jamil Sl No. Name Student ID
Professor 1 Md. Al Momin Chowdhury 10-20-021
Department of Finance 2 Sheikh Ashraful Haque 10-20-018
University of Dhaka 3 Md. Omar Faruk 10-20-033
4 Md. Tauhidur Rahman 07-18-045
5 Md. Sohel Rana 07-18-002

Date of Submission: 23, November, 2021

 Financial Statements

Summit Power Limited Income Statement

Symbol : SUMITPOWER
Sector : Fuel & Power Board : Main

Particulars 2019 2018 2017

Net revenue 30,471,632,393.00 18,467,638,287.00 16,213,948,333.00
Less: Cost of revenue 22,477,882,735.00 13,062,978,853.00 11,849,136,720.00
Gross profit 7,993,749,658.00 5,404,659,434.00 4,364,811,613.00
Add: Other income 236,552,632.00 340,618,918.00 232,521,863.00
Less: Administrative and selling expenses 567,814,762.00 460,888,582.00 419,007,008.00
Income from operation 7,662,487,528.00 5,284,389,770.00 4,178,326,468.00
Share of profit of equity-accounted investees 401,661,173.00 450,755,528.00 910,023,786.00
Less: Financial charge 702,407,988.00 428,239,553.00 496,802,160.00
Profit before tax 7,361,740,713.00 5,306,905,745.00 4,591,548,094.00
Less: Provision for Income Tax 79,125,310.00 -32,533,280.00 3,985,150.00
Net profit after tax 7,282,615,403.00 5,274,372,465.00 4,595,533,244.00
Consolidated Earnings Per Share (EPS) - Basic 4.78 4.40 3.76

Baraka Power Limited Income Statement

Symbol : BARKAPOWER
Sector : Fuel & Power Board : Main

Particulars 2019 2018 2017

Net revenue 4,060,472,271.00 3,580,312,392.0 3,485,450,033.00
0
Less: Cost of revenue 2,977,850,552.00 2,480,147,595.00 2,369,987,862.00
Gross profit 1,082,621,719.00 1,100,164,797.0 1,115,462,171.00
0
Add: Other income 38,199,569.00 18,114,624.00 27,173,894.00
Less: Administrative and selling expenses 223,369,096.00 263,397,610.00 154,200,031.00
Income from operation 859,252,623.00 854,881,811.00 988,436,034.00
Less: Financial charge 388,822,087.00 320,645,118.00 288,405,141.00
Less: Contribution to Workers' Profit
Participation Funds (WPPF) 38,978,311.00 19,734,790.00 20,877,550.00

Profit before tax 469,651,794.00 514,501,903.00 679,153,343.00

Loss from Associates 15,143,887.00 (1,333,724.00) -
Over Provision in prior year's Income Tax - - 484,997.00
Expense
Less: Provision for Income Tax 70,304,258.00 (61,824,130.00) (69,083,031.00)
Net profit after tax 414,491,423.00 451,344,049.00 610,555,309.00
Consolidated Earnings Per Share (EPS) - Basic 1.71 1.75 2.63

MJL Bangladesh Limited

Symbol : MJLBD Sector : Fuel & Power Board :
Main
Income Statement

Particulars 2019 2018 2017

Revenue 21,454,612,720.00 18,659,743,619.0 15,051,557,730.0
0 0
Less: VAT 1,158,857,955.00 1,143,598,769.00 1,072,567,492.00
Net revenue 20,295,754,765.00 17,516,144,850.0 13,978,990,238.0
0 0
Less: Cost of revenue 15,408,665,445.00 12,922,011,243.00 9,421,283,769.00
Gross profit 4,887,089,320.00 4,594,133,607.00 4,557,706,469.00
Add: Other income 270,335,685.00 270,777,764.00 115,269,804.00
Less: Administrative and selling expenses 1,294,657,722.00 1,041,169,407.00 1,342,670,641.00
Income from operation 3,862,767,283.00 3,823,741,963.00 3,330,305,632.00
Less: Financial charge 804,547,398.00 670,145,025.00 424,274,772.00
Less: Contribution to Workers' Profit
- - -
Participation
Funds (WPPF)  
Profit before tax 3,058,219,885.00 3,153,596,938.00
2,906,030,860.00
Less: Provision for Income Tax 950,600,182.00 861,489,145.00
777,313,736.00
Current tax 507,069,096.00 552,689,811.00
701,415,662.00
Deferred tax 443,531,086.00 308,799,334.00
 75,898,074.00
Net profit after tax 2,107,619,703.00 2,292,107,794.00
2,128,717,124.00
Consolidated Earnings Per Share (EPS) - Basic 5.87 7.00 6.91

Consolidated Earnings Per Share (EPS) - Restated - 6.66 -

Summit Power Ltd. Balance

Sheet

Particulars 2019 2018 2017

Property, Plant and 40,153,454,293.00 39,052,567,510.00 21,329,114,729.00

Equipment

Intangible assets 47,863,446.00 47,959,653.00 37,947,094.00

Capital work-in progress - - -

Deferred tax asset 43,923,588.00 34,821,425.00 23,248,750.00

Investment in subsidiary 6,084,406,955.00 5,708,245,782.00 5,257,490,254.00

and Associate

Available-for-sale financial 3,955,793,693.00 4,320,803,275.00 3,786,733,686.00

assets

Total non-current assets 50,285,441,975.0 49,164,397,645.0 30,434,534,513.0

0 0 0

Inventories 684,430,782.00 616,243,162.00 527,357,519.00

Receivables/Trade and 11,856,589,210.00 9,177,390,005.00 6,563,528,734.00

other receivables

Other Receivables 118,564,559.00 60,253,599.00 100,760,659.00

Advances, deposits and 1,348,074,663.00 445,348,212.00 271,114,363.00

prepayments

Cash and cash equivalents 5,843,296,539.00 4,881,992,406.00 4,913,073,317.00

Total current assets 19,850,955,753.0 15,181,227,384.0 12,375,834,592.0

0 0 0

TOTAL ASSETS 70,136,397,728.0 64,345,625,029.0 42,810,369,105.0

 0 0 0

Share capital 10,678,772,390.00 10,678,772,390.00 10,678,772,390.00

Capital Reserve 1,668,093,205.00 1,668,093,205.00 1,668,093,205.00

Hedging reserve -333,801,733.00 - -

Share premium 6,479,097,639.00 6,479,097,639.00 6,479,097,639.00

Fair Value Reserve 323,509,578.00 686,641,624.00 152,572,035.00

Currency translation 62,494,928.00 33,270,616.00 -

reserve

Shares to be issued on - - -
amalgamation

Retained earnings 14,754,154,182.00 12,849,427,782.00 11,341,109,707.00

Revaluation Surplus and 963,843,005.00 982,964,725.00 1,002,086,449.00

Reserve

Non-controlling interest 7,251,258,808.00 3,521,273,883.00 1,755,013,645.00

Total equity 41,847,422,002.0 36,899,541,864.0 33,076,745,070.0

0 0 0

Redeemable preference 1,469,771,322.00 826,398,267.00 983,677,920.00

shares-non current

Deferred Liabilities 813,937,731.00 202,256,860.00 156,464,000.00

Long Term Loan- Net of - - -

Current Maturity

Long term loan 10,088,328,323.00 5,401,218,269.00 5,755,334,936.00

Total non-current 12,372,037,376.0 6,429,873,396.00 6,895,476,856.00

liabilities 0

Loans and borrowings 10,968,298,719.00 15,948,932,217.00 -

Current portion of long - - 467,924,889.00

term loan

Redeemable preference 157,509,885.00 157,279,653.00 -

shares-current

Other payables and 618,470,229.00 363,059,957.00 253,572,841.00

accruals

Project loan( short - - -

termbridge financing)

Trade creditors/Payables 3,896,255,273.00 3,610,508,096.00 2,073,268,567.00

L/C liabilities - - -

Due to affiliated company 200,929,205.00 878,000,000.00 -

Unpaid dividend 75,475,039.00 58,429,846.00 43,380,882.00

Total current liabilities 15,916,938,350.0 21,016,209,769.0 2,838,147,179.00

0 0

Total liabilities 28,288,975,726.0 27,446,083,165.0 9,733,624,035.00

0 0

TOTAL EQUITY AND 70,136,397,728.0 64,345,625,029.0 42,810,369,105.0

LIABILITIES 0 0 0

Baraka Power Limited

Symbol : BARKAPOWER
Sector : Fuel & Power Board :
Main

Particulars 2019 2018 2017

Property, Plant and 6,025,538,372.00 6,196,766,201.00 5,961,118,111.00

Equipment

Intangible assets 443,000.00 626,167.00 -

Capital work-in progress 6,325,741,009.00 23,476,058.00 612,000.00

Goodwill on Acquisition 31,969,000.00 31,969,000.00 30,147,495.00

Investment in subsidiary and - 66,378,776.00 -

Associate

Investment in Subsidiary 48,712,500.00 - -

Investment in Associate 217,810,163.00 - -

Investment in bonds and - 3,601,600.00 13,374,031.00

shares

IPO Expenses - - -

Pre-operating Expenses 15,576,329.00 18,496,891.00 21,417,453.00

Total non-current assets 12,665,790,373.00 6,337,713,093.00 6,013,295,059.00

Inventories 990,236,189.00 1,030,053,744.00 954,028,350.00

Account Receivable 1,112,077,207.00 - -

Receivables/Trade and other - 1,547,246,813.00 1,444,678,282.00

receivables

Other Receivables 752,746,756.00 - -

Investment in marketable 10,436,648.00 - -

securities

Inter company receivables - 301,823,891.00 -

Advances, deposits and 532,592,981.00 819,314,924.00 249,122,000.00

prepayments

Group current accounts 1,302,842,075.00 - -

Cash and cash equivalents 153,207,284.00 134,067,192.00 105,027,429.00

Total current assets 4,854,139,140.00 3,836,108,164.00 2,766,230,092.00

TOTAL ASSETS 17,519,929,513.00 10,173,821,257.00 8,779,525,151.00

Share capital 2,200,613,660.00 2,000,557,880.00 1,739,615,550.00

Share premium 970,000,000.00 970,000,000.00 970,000,000.00

Fair Value Reserve -1,580,684.00 -217,157.00 (59,057.00)

Retained earnings 885,376,323.00 789,802,008.00 790,296,274.00

Non-controlling interest 836,974,616.00 877,191,969.00 802,120,236.00

Total equity 4,891,383,915.00 4,637,334,700.00 4,301,973,003.00

Finance Lease Liability-Non 13,340,771.00 1,774,396.00 2,303,071.00

Current Maturity
Loan from other than Bank - - -

Long term loan 2,801,387,071.00 2,436,990,095.00 2,690,784,227.00

Asset requirement - - -
obligation(ARO)

Provision for Gratuity 28,889,428.00 18,276,803.00 10,704,767.00

Total non-current liabilities 2,843,617,270.00 2,457,041,294.00 2,703,792,065.00

Current portion of long term 616,865,369.00 502,670,464.00 464,171,016.00

loan

Finance Lease Liability- - - -

Current Maturity

Obligation under finance 3,327,833.00 528,676.00 2,379,373.00

lease

Short term loan 3,941,585,182.00 1,576,139,819.00 768,901,808.00

Trade creditors/Payables 912,125,773.00 859,623,277.00 466,615,589.00

Liabilities for Expenses 26,895,891.00 16,527,465.00 4,876,500.00

Provision for income tax 76,537,234.00 102,644,688.00 43,608,227.00

Deferred Liabilities 4,155,458,300.00 - -

-
-

Payable for WPPF 38,978,311.00 19,734,790.00 16,184,549.00

Other liabilities 13,154,435.00 1,576,084.00 52,906.00

Total current liabilities 9,784,928,328.00 3,079,445,263.00 1,505,186,678.00

Total liabilities 12,628,545,598.00 5,536,486,557.00 4,776,139,262.00

TOTAL EQUITY AND 17,519,929,513.00 10,173,821,257.00 8,382,670,318.00

LIABILITIES

Net Asset Value (NAV) 18.42 18.8 19.39

MJL Bangladesh Limited

Symbol : MJLBD Sector : Fuel
& Power Board : Main
 D

Particulars 2019 2018 2017

Property, Plant and 20,520,410,073.00 18,729,778,999.00 15,105,398,399.00

Equipment

Intangible assets 1,122,976.00 7,793,021.00 15,529,349.00

Capital work-in progress 1,032,937,987.00 1,576,191,855.00 1,051,877,448.00

Deferred tax asset - - 200,160,699.00

Investment in subsidiary and 181,376,963.00 180,968,641.00 167,450,000.00

Associate

Investment in bonds and 62,357,089.00 8,943,071.00 24,392,763.00

shares

Total non-current assets 21,735,847,999.00 20,503,675,587.00 16,564,808,658.00

Inventories 2,438,559,769.00 2,217,792,197.00 1,367,434,202.00

Receivables/Trade and other 1,471,284,323.00 1,283,148,674.00 1,315,027,930.00

receivables

Inter company receivables 1,559,689,795.00 1,510,757,526.00 1,815,954,367.00

Advances, deposits and 1,669,613,376.00 1,118,370,553.00 831,608,255.00

prepayments

Advance income tax 3,210,211,467.00 2,567,539,312.00 2,093,163,457.00

Investments in fixed deposits 195,502,343.00 302,336,023.00 706,997,471.00

Cash and cash equivalents 339,015,890.00 507,536,158.00 513,587,912.00

Total current assets 10,946,234,052.00 9,578,251,076.00 8,723,548,366.00

TOTAL ASSETS 32,682,082,051.00 30,081,926,664.00 25,288,357,024.00

Share capital 3,167,520,270.00 3,016,685,980.00 3,016,685,980.00

Share premium 4,074,000,000.00 4,074,000,000.00 4,589,200,000.00

Share Money Deposits - - -

Retained earnings 4,048,684,403.00 3,701,341,013.00 2,931,920,590.00

Non-controlling interest 2,038,259,982.00 1,637,459,306.00 612,362,953.00

Total equity 13,328,464,655.00 12,429,486,299.00 11,150,169,523.00

Deferred tax liabilities 907,827,255.00 464,296,170.00 355,657,536.00

Long term loan 2,173,212,314.00 808,893,908.00 1,048,233,375.00

Obligation under finance lease - 114,114,037.00 354,076,602.00

Advance lease rental against

cylinder -Net off current 1,878,771,133.00 2,581,416,014.00 -
maturity

Total non-current liabilities 4,959,810,702.00 3,968,720,129.00 1,757,967,513.00

Current portion of long term 975,738,067.00 488,855,729.00 609,870,007.00

loan

Short term loan 7,237,873,155.00 7,489,911,387.00 4,871,639,827.00

Bank overdraft 128,575,288.00 136,957,508.00 934,772.00

Trade creditors/Payables 665,247,323.00 1,116,242,673.00 593,183,828.00

Provision for income tax 3,834,396,844.00 3,327,327,748.00 2,781,882,183.00

Subscription money payable 15,189,649.00 15,173,185.00 15,023,185.00

Dividend Payable 44,264,896.00 39,021,759.00 34,110,217.00

Other liabilities 740,931,835.00 556,017,607.00 3,401,685,662.00

Total current liabilities 14,393,806,694.00 13,683,720,236.00 12,380,219,988.00

Total liabilities 19,353,617,396.00 17,652,440,365.00 14,138,187,501.00

TOTAL EQUITY AND 32,682,082,051.00 30,081,926,664.00 25,288,357,024.00

LIABILITIES

Net Asset Value (NAV) 35.64 41.20 34.93

Restated Net Asset Value - 34.07 -

Summit Power Limited

Symbol : SUMITPOWER
 Cash Flow Statement
Sector : Fuel & Power Board : Main

Particulars 2019 2018 2017

Cash received from trade and 27,808,398,801. 16,160,982,645. 15,615,362,913.0

other receivables 00 00 0

Payment to trade and other - - (11,349,859,365.

payables 21,722,259,858. 11,349,844,760. 00)
00 00

Finance expenses paid - - -

Cash received from other activities 43,926,173.00 59,252,272.00 12,166,712.00

Income tax paid -76,135,963.00 -19,630,517.00 (1,957,657.00)

Net cash flows from operating 6,053,929,153.0 4,850,759,640.0 4,275,712,603.00

activities 0 0

Payment against capital work in - - -

progress

Proceeds from sale of fixed assets 6,043,695.00 3,706,650.00 1,150,000.00

Interest received 296,185,805.00 278,853,755.00 109,290,993.00

Intangible assests addition -4,407,474.00 -10,345,895.00 -

Investment in Subsidiary - - -

Inter-company payment 200,397,901.00 - -

Share issuance cost - - -

Dividends received from AFS 191,437,348.00 - 223,071,548.00

financial assets

Acquisition of fixed assets - - (1,484,342,029.0

2,876,129,813.0 18,586,769,932. 0)
0 00

Dividends received from equity

25,500,000.00 350,917,048.00 300,000,000.00
accounted investees

Net cash used in investing - - (850,829,488.00)

activities: 2,352,409,886.0 17,963,638,374.
0 00

Interest paid -946,714,504.00 -498,733,846.00 (643,925,703.00)

Proceeds from issue of share 25,964,000.00 1,100,000,000.0 410,000,000.00

capital(NCI) 0

Receipt/(repayment) of project - - (218,953,125.00)

loan

(Payment)/ receipt of short term - - -

project loan

Share Money Deposits - - -

Repayment of loans and - -384,608,890.00 (3,821,999,778.0

borrowings 5,674,776,949.0 0)
0

Proceed from loans and 5,491,526,662.0 15,114,148,698. 4,113,586,460.00

borrowings 0 00

Transaction cost -104,728,205.00 -2,012,067.00 (9,984,789.00)

Dividend paid - - (141,670,423.00)

3,186,586,524.0 3,188,582,753.0
0 0

Short term loan - - -

Proceeds from/(repayment) of
820,311,158.00 903,798,030.00 -
intercompany financing

Net cash flows from financing - 13,044,009,172. (627,271,458.00)

activities 2,934,572,828.0 00
0

D. Net increase in cash and cash

766,946,439.00 -68,869,562.00 2,797,611,657.00
equivalent (A+B+C)

Effects of currency translation 2,920,346.00 37,788,651.00 -

E. Cash and cash equivalent at 4,881,992,406.0 4,913,073,317.0

1,896,508,535.00
beginning of the year 0 0

F. Cash and cash equivalent at end 5,651,859,191.0 4,881,992,406.0 4,694,120,192.00

of the year 0 0
Baraka Power Limited
Symbol : BARKAPOWER
Sector : Fuel & Power Board :
Main

Particulars 2019 2018 2017

Cash received from trade and 4,061,420,183.00 3,497,012,034.00 3,106,752,695.00

other receivables

Payment to trade and other - - (2,073,857,586.00)

payables 3,169,403,643.00 2,185,106,413.00

Finance expenses paid -349,683,452.00 -303,885,132.00 (338,738,850.00)

Income tax paid -108,071,853.00 -59,586,433.00 (81,740,106.00)

Other business income/(loss) - - -

Net cash flows from operating 434,261,235.00 948,434,056.00 612,416,153.00

activities

Payment against capital work in - -23,476,058.00 -

progress

Payment against PPE -415,427,301.00 -953,592,190.00 (35,512,624.00)

Disposal of PPE - - -

Intangible assests addition - -180,000.00 -

Investment in associate -185,000,000.00 -19,000,000.00 450,000.00

Investment in Subsidiary - -48,712,500.00 34,646,123.00

Investments in bond and shares -8,656,017.00 8,611,648.00 (14,187,479.00)

Dividend from investment 413,341.00 76,400.00 45,000.00

Loan received/(paid) from - -36,111,124.00 -

related party 1,480,916,201.00
Net cash used in investing - - (14,558,980.00)
activities: 2,089,586,178.0 1,072,383,824.00
0

Finance lease - -2,397,372.00 (2,928,520.00)

Payment of Lease Liability -2,303,065.00 - -

Share capital issued - 22,548,000.00 -

Long term debt - - -

Term Loan -70,952,852.00 - -

Received/(Repayment)

Share Money Deposits 2,500,000.00 - -

Dividend paid - -86,980,780.00 (248,516,514.00)

Dividend paid to MI -48,620,250.00 -48,620,250.00 (48,620,250.00)

Short term loan 1,793,841,202.00 789,572,563.00 257,301,714.00

Long term loan - -230,885,013.00 (589,997,071.00)

Transaction with subsidiary - -290,247,617.00 -

Net cash flows from financing 1,674,465,035.0 152,989,531.00 (632,760,641.00)

activities 0

D. Net increase in cash and cash 19,140,092.00 29,039,763.00 (34,903,468.00)

equivalent (A+B+C)

E. Cash and cash equivalent at

134,067,192.00 105,027,429.00 139,930,897.00
beginning of the

F. Cash and cash equivalent at 153,207,284.00 134,067,192.00 105,027,429.00

end of the year

Consolidated Net Operating

1.97 4.74 3.52
Cash Flow Per Share (NOCFPS)

MJL Bangladesh Limited

Symbol : MJLBD Sector : Fuel &
Power Board : Main

Particulars 2019 2018 2017

Cash received from trade and 20,371,273,936.0 18,779,549,595.0 15,900,649,848.0

other receivables 0 0 0

Payroll and other payments to -725,856,805.00 -622,599,626.00 (4,466,021,403.00

employees )

Payment to trade and other - - (5,529,903,270.00

payables 14,711,083,947.0 13,061,877,928.0 )
0 0

Payment for administrative and - -566,972,874.00 (384,638,670.00)

selling expenses 1,494,770,949.00

Finance expenses paid -754,189,044.00 -562,959,071.00 (407,701,048.00)

Income tax paid -642,724,325.00 -481,625,309.00 (397,992,511.00)

Other business income/(loss) 75,153,416.00 45,119,533.00 15,074,178.00

Net cash flows from operating 2,117,802,282.00 3,528,634,320.00 4,729,467,124.00

activities

Payment against capital work in - - (832,814,864.00)

progress 1,961,293,937.00 2,042,318,253.00

Proceeds from sale of fixed 2,511,959.00 189,199.00 3,482,584.00

assets

Advance against Land -511,041,078.00 -265,790,858.00 (125,734,390.00)

Investment in FDR 106,833,681.00 404,661,447.00 (718,044,322.00)

Encashment of FDR - - 512,810,000.00

Investment in Subsidiary 80,000.00 - (159,200,000.00)

Inter-company payment -63,100,287.00 -468,745,658.00 (376,861,824.00)

Investments in bond and shares 19,158,356.00 17,556,051.00 (41,527,713.00)

Investment income received 201,123,286.00 252,728,110.00 118,344,283.00

Acquisition of fixed assets -328,309,938.00 - (3,343,673,635.00
3,081,704,671.00 )

Net cash used in investing - - (4,963,219,881.00

activities: 2,534,037,958.00 5,183,424,633.00 )

Financial income received - - -

Finance lease -153,311,818.00 -272,655,090.00 -

Share capital issued - - 61,455,660.00

Long term debt 1,851,200,745.00 -360,353,745.00 (512,121,797.00)

Share Money Deposits 157,218,750.00 1,099,281,250.00 (91,326.00)

Share premium received - - (61,455,660.00)

Subscription money paid -7,480.00 -14,960.00 -

Dividend paid - - (1,083,065,041.00

1,352,265,562.00 1,352,597,149.00 )

Short term loan -188,208,126.00 2,466,789,328.00 1,416,046,011.00

Bank overdraft -8,382,220.00 136,022,737.00 (27,328,313.00)

Long term loan - - -

Net cash flows from financing 306,244,289.00 1,716,472,371.00 (206,560,466.00)

activities

D. Net increase in cash and (440,313,223.00)

-109,991,387.00 61,682,058.00
cash equivalent (A+B+C)

Effects of currency translation -58,528,880.00 -67,733,816.00 -

E. Cash and cash equivalent at 953,901,134.00

507,536,158.00 513,587,912.00
beginning of the year

F. Cash and cash equivalent at 339,015,890.00 507,536,158.00 513,587,912.00

end of the year
Industry background
Electricity is the main ingredients for socio-economic development of a country. Recognizing
the necessity of electricity, Government of Bangladeh (GoB) has declared vision to provide
electricity to all by 2021. In 2020, 93.5 percent of the population had access to electricity. It
may be mentioned that from 2013 to 2019 about 16 million new consumers are connected to
electricity. Per capita electricity generation has increased from 371KWh in 2015 to 426.23 KWh
in 2020. Considering the country’s future energy security and low-carbon emission strategy,
programs have been undertaken to promote use of renewable energy. Government has
formulated pro-investment policy to encourage private sector investment in Renewable Energy
(RE) sector as the country is experiencing rapid rise in energy consumption over the past two
decades. This trend will intensify further in the coming years as economic growth and
development efforts accelerate-Bangladesh strives to become a middle-income country by
2021. Energy supply thus has to be increased rapidly in order to sustain the country’s growth
momentum.

The increase of power generation capacity over the last few years stands witness to the
incredible growth of the sector. Rate of access to electricity has improved from approximately
74% in 2015 to 93.5% in 2020. The government targets to reach all people by 2021. Given the
gravity of the situation, the government's Master Plan 2010 has decided to use the quick rental
power plants (QRPPs) as its major strategic tool to reduce power shortage in the short-run.
Under the plan, a total of 20 QRPPs was commissioned by 2012 with a total capacity of more
than 1,000 MW. Per capita consumption of electricity remains low compared to peer countries
and far below that of the developed world. As a result, the rate of growth witnessed over the
years is likely to accelerate as electricity reaches more people and as people and industries
increase consumption. As of June 2020, the total power generation capacity of the country
including captive power plant was 23,500MW. This is an increment of 4,539MW from the total
generating capacity at the end of FY2019.

Data Sources:
http://www.bpdb.gov.bd
http://bids.org.bd/uploads/publication/Other_Publications/Discussion_Paper_01.pdf
https://en.wikipedia.org/wiki/Electricity_sector_in_Bangladesh
https://cpd.org.bd/wp-content/uploads/2019/03/The-Power-and-Energy-Sector-of-
Bangladesh.pdf
Why and how did you choose these three company
Explanation of similarities:
1. Companies having similar nature of business, associated return opportunities and
exposure of business risks are considered;
2. We have considered those companies as peer having yearly turnover between BDT
3,500 and 8,500 million.
3. We have considered peer firms with paid-up capital ranging from BDT 1,000 to 4,000
million.
4. Companies with total assets exceeding 10,000 million are selected as peers.
5. Companies that regularly publish audited financial statements are considered.
6. Companies regularly pay dividends are considered.
7. Companies having Market Category ‘A’ are considered.

Porter’s 5 factors Model Analysis

The Porter Five Forces analysis model first appeared in a Harvard Business School professor
Michael E Porter published in Harvard Business Review in 1979. A Five Forces analysis can
help companies assess industry attractiveness, how trends will affect industry competition,
which industries a company should compete in—and how companies can position themselves
for success.

Five Forces Analysis is a strategic tool designed to give a global overview, rather than a
detailed business analysis technique. It helps review the strengths of a market position, based
on five key forces.

The Porter Five Forces model brings together a large number of different factors in a simple
model to analyze the basic competitive landscape of an industry. The Potter Five Forces
model identified five main sources of competition, namely:
 Bargaining power of suppliers
 Bargaining power of Buyers
 Threats of New Entrants
 Threats of Substitutes
 Competition of existing competitors in the industry

According to Michael Porter’s five competitive forces industry analysis, there is an overall
attractive industry structure and an overall unattractive industry structure. Porter’s five forces
model is merely a framework.
Porter’s Analysis – Attractive Industry

The following indicates an attractive industry:

 Threat of entrants is low

 Threat of substitute products is low
 Bargaining power of buyers is low/weak
 Bargaining power of suppliers is low/weak
 Intensity of rivalry among existing firms is low

Porter’s Analysis – Unattractive Industry

The following indicates an unattractive industry:

 Threat of entrants is high

 Threat of substitute products is high
 Bargaining power of buyers is high/strong
 Bargaining power of suppliers is high/strong
 Intensity of rivalry among existing firms is high

We have selected Fuel & Power industry for Porter’s 5 factor’s analysis.

Threats of New Entrants:

The threat of new entrants refers to how easy it is to enter and leave the market. These are also
known as barriers to entry and exit. The easier it is for new companies to enter, the more likely
new entrants will come in and try to exploit a new part of the market.
It is an unfavorable position for any company to be in. However, it can help incumbent firms
ensure they are pro-active with new product offerings and designs. Yet no company would
choose to have low barriers to entry.
To explain, there are six main areas that reduce the threat of new entrants and create
significant barriers to entry. There are many more factors that contribute, but these are the
main ones:
1. Economies of Scale
Economies of scale allow businesses to reduce their unit prices as it grows bigger and achieves
efficiency gains. When there are already big players in the market with huge cost advantages, it
makes it difficult for new entrants to compete.
 For fuel & Power Industry, as it is growing rapidly that’s why sufficient fund is required
to meet the market demand. Summit power is strong in this regard.
New businesses don’t have the same resources of efficiencies to compete on price – thereby
presenting a huge barrier to entry.
2. Brand Image
Brand image is another difficult obstacle to overcome for new entrants. Once an image is
established, it is difficult to take business away from what is an extremely trusted business.
Summit power for instance universally popular – even Baraka Potenga Ltd. has had trouble
bringing Summit power down. Trying to compete against such a brand is almost impossible and
significantly deters new entrants.
3. Capital Requirements
In industries such as oil and gas extraction, or even banking – there are significant start-up
costs. Potential new entrants require millions just to get started. Even then, success is not
guaranteed – which makes it extremely difficult to obtain financial backing. New entrants are
therefore limited to an existing business that has significant levels of capital and is looking to
diversify into new industries. Hence this sector is creating more required capital to compete
the competitors. Mobil Jamuna Ltd. has more positive capital flow then Baraka power Ltd.
4. Technological Economies
Technology and specific industry expertise can prove invaluable to new entrants – but also
present them with a huge barrier to overcome. Creating a new fuel & power business for
instance involves a significant level of industry knowledge.
5. Government policies
Government policies can restrict competition in the marketplace – either by creating new
legislation, or, imposing tariffs or quotas on goods coming in from abroad. Both restrict
competition by making it more technically difficult and expensive to enter. Sometimes fuel cost
is increasing so that many companies can not effort it.
6. Strategic Barriers
In some industries, the first company to enter the market successfully obtains a favorable
position. It is the first to establish a brand presence and therefore obtain great power in the
market – Eastern Lubricants.
We also have the power of established firms that will look to swiftly out-compete new firms. It
may do so by artificially lowering prices – also known as ‘predatory pricing’. Alternatively, it may
vertically integrate so that it controls part of the supply chain and can, therefore, pass on lower
prices to the consumer.

Threats of Substitute products:

The threat of substitutes cannot be underestimated. There are firms that have a strong market
position with its own market – perhaps even a monopoly. The potential for new entrants is
high, bargaining power of buyers and suppliers is low and there is no competitive rivalry.
In fact, this is the epitome of a monopoly – it has unrivaled market power both up and down
the supply chain. Yet it can still face a significant threat of substitutes.

For businesses that have a strong market position, the threat of substitutes perhaps one of the
most important issues. This is because the other four forces tend to be less of a factor in
markets where there is a condense concentration of competition.

1. Number of substitute products available:

Oil substitute products are coal, gas, solar power, wind power, hydroelectricity and even
nuclear energy. But in now just developing.

2. Buyer propensity to substitute: Likelihood of buyer finding a substitute. Some

companies use mobil plus refueling services to cope up the market.
3. Relative price performance of substitute: Price of substitutes in comparison. Hence
eastern lubricants items are more demandable comparatively stock price.
 4. Perceived level of differentiation: Buyer understanding of quality differences. Generally
an industry with high rivalry or moderate rivalry will have the homogeneous kind of
product. Difference in the company’s product could not be seen. So, to gain an
advantage, a company may differentiate its product from that of the competitor. It will
help them gaining an advantage.
5. Switching costs: The cost to switch if a buyer is dissatisfied.  Buyers then have the
opportunity to make a performance/price trade-off. The cost of switching is also a
factor. If it is high, the threat of substitution is low. Baraka Power switching cost is
higher then the MJL.

Bargaining Power of Buyers:

Alongside bargaining power of suppliers, this is known as a vertical force. In other words, it is a
force that comes from a different stage of the supply chain. With reference to the bargaining
power of buyers, this is at the next stage of the supply chain. For instance, the bargaining
power of consumers over the retailer, or, the bargaining power of the retailer over its suppliers
–

Buyers have significant bargaining power if the seller of the good is one of many, yet there are
only a small handful of buyers.
The buyer can refuse to buy, yet the seller can’t afford to refuse the sale. As a result, the buyer
has significant power to dictate the price they are willing to pay – else they will take their
business elsewhere.
The power of buyers allows them to dictate price, supply, and quality. Some of the factors that
contribute to this are:

Buyer concentration: In the capital market there are 23 listed companies of fuel &
Power sector. It means the number of competitors. If it is low the competition with each
other will be minimized.
 Purchases are made in high volumes. In some industries, this means high fixed costs.
For example, a new factory may need to be built and run. This gives the buyer power to
 dictate prices as the supplier benefits from bulk orders and can, therefore, charge lower
prices. If the buyer leaves the supplier high and dry, they still have those fixed costs.
 The supplies are undifferentiated with many different suppliers – thereby leaving the
buyers with many options.
 Suppliers are reliant on the buyer’s business, but the suppliers are only a small
component for the buyer.
 The supplier’s goods are relatively unimportant in the production or distribution of the
final good.
 Price sensitivity: When the supplier’s goods are a luxury rather than a product that
creates efficiencies, the buyer is more price sensitive. This is because luxury good does
not necessarily produce an output.
Other’s matter includes;
* Size of each customer: Number of orders per buyer.
* Differences between competitors: How different competitors are from one another.
* Available substitutes: Number of alternatives or substitutes available.
* Buyer’s information availability: Buyer ability to gather information about companies.

Bargaining Power of Suppliers:

Bargaining power of suppliers is another vertical force, although this time, it refers backward in
the supply chain. For instance, how much power do retail stores have over consumers and how
much power do companies like Kellogg’s have over Walmart.
Suppliers can exert their power by raising prices, reducing quality, or restricting supply –
thereby extracting profitability from the buyer. They can become even more powerful if this
power extends down the supply chain. For instance, a manufacturer may have power over the
retailer who in turn has power over consumers. What we see as a result is the costs being
passed on through the chain.
There are a number of factors that can lead to such power by suppliers – they include:
 The suppling industry is concentrated with few companies, whilst the buying companies
are in a more competitive environment with a greater number of companies.
 It has a unique product offering that other supplies don’t offer. With other suppliers
unable to provide the same product, the buyer can be tied in through its product
specification or specialized equipment. To replicate these factors would require
significant cost and time.
 The supplier’s success is not dependent on one industry. If the supplier has many
customers from many industries, it has no specific incentive to ensure one industry is
kept alive. In turn, it is able to exert greater power and charge a higher rate.
  There are no substitute suppliers, so the buyer cannot simply move to another type of
supply. For instance, metal can manufacturers can choose between aluminum and steel
– thereby reducing the power of steel suppliers.

* Quantity of suppliers: Number of suppliers.

* Capacity of suppliers: Specific expertise or technology needed from suppliers.
* Supplier specialness: No other suppliers available.
* Contractual conditions: Any obligations to remain with suppliers.
* Switching costs: The cost to switch if a supplier is dissatisfied.

Rivalry among Existing Competitors:

Competitive rivalry is where the existing competition uses tactics such as price competition,
product introduction, and advertising campaigns. This intense rivalry puts pressure on new and
existing firms to reduce prices and compete more aggressively. As a result, existing firms will
start to see profitability fall as they jockey for position – trying to attract customers.
There are several factors that contribute to competitive rivalry, they include:
 Competition is rather homogenous with many sellers – similar to a perfect market.

 Slow industry growth – so existing firms have to compete more fiercely for what is
there.
 There are low switching costs between firms, which makes it easier for businesses to
compete and steal customers away from each other.
 When there are high fixed costs and the product has a short lifespan, there is a
temptation to reduce prices. Markets such as supermarkets and airlines tend to offer
discounts for this very reason – providing a strong competitive rivalry.
 Capacity tends to go up in large increments. For some manufacturing businesses, they
produce in large batches to improve efficiency. However, this can often lead to over-
supply, especially when demand slackens. This weak demand and over-supply
encourages suppliers to drop prices – thereby creating a competitive environment.
High exit barriers can mean few firms leave the market and instead are forced to compete even
though they are earning low returns. This creates additional competitive pressures on other
firms in the market.

There are some other factors we need to follow for analyzing the industry;

* Market saturation: Number of competitors.

* Market diversity: Diversity of competition.
* Industry concentration: Concentration ratio of an industry.
* Industry growth: Pace of growth of an industry.
* Quality differences: Key differences between companies.
* Brand loyalty: How loyal customers are.
* Barriers to exit: Companies can only stay within this market.
* Switching costs: If the competitor is weak in a financial side it is quite difficult to switch.

SWOT Analysis

Strengths


S
Experienced sponsor
Weaknesses


W
Expansion of project with same line largely
 Skilled human resources depends on Government decision.
 Brand new engine  Similar nature Company under common
 Adequate installed capacity management
 Guaranteed buyer and revenue stream
Opportunities O Threats T
 There is huge gap between supply and  Natural disaster
demand of electricity and has immense  Shortage of fuel supply
opportunities to expand its business in the
power sector.