SOLAR PLUS

BUSINESS PLAN

HOUSEHOLD, BUSINESS AND PRODUCTIVE USE SOLAR SYSTEMS

REGISTRATION # : NAME RESERVATION – TO BE REGISTERED AS A CLOSE

CORPORATION

TIPE OF BUSINESS : PRODUCT- SOLAR INSTALLATIONS / SERVICES- REPAIRS &

INSTALLATION

PROPONENT : MR. LEONARD N. SAKARIA

CELL : (+264-81) 280 9497

TEL : (+264-61) 236 168

POSTAL ADDRESS : P O BOX 449, OSHIKANGO

LOCATION ( CURRENT) : ONEKWAYA EAST, OHANGWENA, NAMIBIA

SPECIFIC OBJECTIVE OF BUSINESS PLAN

Solar Plus cc is seeking a loan funding of N$219 798-00. The company primarily needs
capital to fund four areas of growth in the company:

1. Main objective is to obtain a loan.

2. Implement a cost effective promotional strategy that will maximize awareness of

our business and renewable energy sector.

NON DISCLOSURE AGREEMENT

This application includes data that shall not be disclosed, not be duplicated or, used – in
whole or in part - for any purpose other than to evaluate this application. If, however an
agreement is awarded to this application because of – or in connection – with the
submission of this data, the funding institution shall have the right to duplicate or use the
data to the extent provided in the resulting agreement.

1
 P O Box 449
Oshikango
NAMIBIA
6 December 2005

The Manager
Micro Finance Division
Bank Windhoek

Dear Sir Madam:

Application for loan finance

Solar plus cc is an existing business that is owned and managed by Mr. Leonard N. Sakaria for
the last three years.

The objective of this business plan is to approach your institution for loan funding of
N$219 798-00 in order to buy equipment and stock as mentioned under heading 1.6 (page 5).
This loan is done in conjunction with the provision of a loan guarantee (N$250 000) by
Namibia Renewable Energy Project (NAMREP) under the Ministry of Mines and Energy.

I, Mr. Leonard N. Sakaria undertake to honor all monthly repayments during the loan period.
Should your approval be forthcoming, please be at liberty to contact the left undersigned at
your earliest convenience for matters concerning the loan agreements as well as conditions
and repayment procedures.

I hope that this business plan will form a basis for further negotiations.

Sincerely yours,

___________________
Mr. Leonard N. Sakaria
General Manager

2
 1. EXECUTIVE SUMMARY

1.1 INTRODUCTION

The core business of Solar plus cc is the installation and repairs of small and medium-scale
Solar Home Systems (SHS’s), for rural households and Small & Medium Enterprises (SME’s).
Mr. Leonard N. Sakaria (owner) is full time self employed in the renewable energy sector.
Solar Home systems are used to power lighting, entertainment and information electronics
(radio, television, CD players, etc.) and to a certain extent productive or environment
improvement appliances.
Mr. Sakaria is a qualified Solar Technician. He will like to expand the operations of his business
(both conventional electricity & solar energy) business called Solar plus cc within the current
area of operation. His target area is Oshana Region. His business is currently based at
Onekwaya East, Ohangwena.
The business is installing between 25 Watt and 300 Watt solar panels and hardware. These
photovoltaic panels are of the mono & polycrystalline types which are locally (Namibia)
supplied. Thus using sunlight available in sufficient quantities in the region

1.2 BACKGROUND OF RURAL ELECTRICITY DISTRIBUTION

The electricity supply industry in Namibia in the past has developed mainly in response to
demand in urban centres in the country. Shortly after Independence in 1990, the new
Namibian Government embarked on a national rural electrification programme that
commenced in the most densely populated northern regions and progressed clockwise around
the country. Most large rural centres as well as a multitude of smaller centres in all 13 regions
have so far been electrified.
The next phase of rural electrification in Namibia is to cater for substantially smaller and more
remote settlements and farms. Cost-effectiveness as well as financial and economic feasibility
are critical factors in allocating available funds in an equitable manner among the unelectrified
localities.

1.3 BASELINE STUDY ON OFF-GRID PLANNING

According to Rural Electrification Master Plan- October 2005,the integration of an off-grid

programme within a national rural electricity master plan is a new approach to rural
electrification. In the past, electrification meant grid electrification only. Any households, which
could not be served by the grid – or maybe a mini-grid – were excluded from electrification
programmes.
It is a credit to the Namibian master planning process that off-grid options for supplying high
value electricity services - such as communications, lighting, vaccine refrigeration and media -
are included.

1.3.1 The role for off-grid electrification

Off-grid electrification is the provision of basic electricity services to communities and potential
electricity customers who are located in remote parts of Namibia and which are unlikely to be
3
provided with conventional grid electricity distribution in the foreseeable future (say more than
5 years). Until now these communities were excluded from electrification projects and were
expected to look after their own energy and electricity needs.
Off-grid is viewed as a “pre-grid electrification” phase of electricity service provision, which
relies on electricity generated at the point of consumption. This avoids the high capital costs of
extending power lines over large distances to serve modest electricity demands that are typical
of rural consumers.

1.4 BACKGROUND OF OWNER

Mr. Leonard N. Sakaria has attached his CV for career background.

1.5 CURRENT FINANCIAL POSITION

The business is generating an average revenue p/month of N$ 58 000-00

Less expenses N$55 750-00

Material (1 x System D ) and conventional electricity appliances. 46 350-00
Rent (include rates & Taxes) 400-00
Promotions 150-00
Electricity 150-00
Salaries 6 000-00
Tel 300-00
Transport 2 000-00
Vehicle Maintenance 400-00
That keeps him with net Profit per month N$ 2’250-00

Remarks: The business is currently sustained by twofold business operations:

1. Solar plus cc’s current clients are households and businesses that need Solar Home
Systems and Solar Water Heaters.
2. Apart from the above, he involved himself in the installation of conventional
electricity.

1.6 THE UTILISATION OF THE LOAN WILL BE AS FOLLOWS

Mr. Leonard N. Sakaria is applying for financial assistance to the amount of N$219 798-00 in
order to expand the operations of his business. The applicant has the necessary technical and
entrepreneurial skills to run the proposed business successfully. The demand for his products
increases by the day and forced him to expand the business. Currently he has some clients
on his Revolving fund waiting list- Konga (List Attached). The envisaged loan is for his
potential clients that range from small to large electrical power consumers utilising solar
energy. Solar systems available are of different sizes depending on the households needs. That
is also complemented by commercial farmers that need solar water pumps.
The market is growing by the day and he cannot meet the demand because of the financial
constraints. It is against this background that he wants to expand his business.

4
 1.6.1 TOTAL PROJECT COST

SOLAR PLUS cc
ITEMS FINANCIAL OWN EQUITY TOTAL
INSTITUTION
INVESTMENTS
Business premises
• Construction or purchase of 0-00 0-00 0-00
building
• Conversion or reconstruction of 0-00 0-00 0-00
business premises
EQUIPMENT
• Fixtures ( shelves & counters) 0-00 0-00 0-00
2 x Complete Toolbox N$0-00 N$2 298-00 N$2 298-00
@ N$ 1 149-00 each
WORKING CAPITAL
5 x System C: Solar Home System @ N$58 718-00 N$17 682-00 N$76 400-00
N$15 280-00.See section 3.10 /page 15
5 x Solar Home System D @ N$27 610-00
See 3.10 on page 15 N$138 050-00 N$0-00 N$138 050-00
OPERATIONAL EXPENSES
Marketing : Phone calls to short listed N$0-00 500-00 500-00
clients
Marketing: House visits for promotion of N$1 050-00 N$700-00 N$1 750-00
Solar Home Systems. (Radius of 500 km
@ N$3-50 p/km
Wages: Casuals on marketing campaign. N$0-00 N$800-00 N$800-00
2 staff @N$10-00 p/hour x 40 hours
Total N$197 818-00 N$21 980-00 N$219 798-00

1.6.1 LOAN BREAKDOWN

ITEMS Suppliers AMOUNTS
5 x System C: Solar Home System @ Local Supplier N$76 400-00
N$15 280-00.See section 3.10 /page 15
5 x Solar Home System D @ N$27 610-00 Local Supplier
See 3.10 on page 15 N$138 050-00
OPERATIONAL EXPENSES
Marketing : Phone calls to short listed clients 500-00
Marketing: House visits for promotion of Solar Local Supplier N$1 750-00
Home Systems. (Radius of 500 km @ N$3-50
p/km
Wages: Casuals on marketing campaign. Local Supplier N$800-00
2 staff @N$10-00 p/hour x 40 hours
2 x Complete Toolbox Local Supplier
@ N$ 1 149-00 each N$2 298-00
N$219 798-00

5
1.7 VISION
Mr. Sakaria will conduct his business responsibly and profitably with the prime obligation being
to serve all customers in his region of operation (Ohangwena & Oshana Region), irrespective
of colour, race or ethnic origin with the best quality products and services.

1.8 MISSION
Our mission is that everybody in the rural off grid areas of Ohangwena & Oshana Region will
have solar energy supply in their homes and shops and commercial farms.

1.9 OBJECTIVES

• To ensure that his customers receive products/services on time.

• To grow the business into a large renewable energy supplier and service provider.

1.10 EXPERIENCE AND FINDINGS.

The business has gained confidence and trust of its target market. The target market is well
informed about the Revolving fund although there is room for improvement in terms of
awareness campaigns in order to reach maximum results in Ohangwena & Oshana Region

1.11 CHALLENGE
The business has to vigorously embark upon resource mobilization to cater the ever-increase
demand for support of the target market and sustaining of the business. Clients that qualified
and are approved by Konga Investments pose a threat since the business does have enough
cash flow to meet their demand.

1.12 REGULATORY ISSUES

Currently the business is using a Single Entry Book keeping System. Henceforth it will maintain
a system of performance measurement and evaluate performance (all areas) against original
plans and benchmarks. This business is expected to be given with support of Cradle
Investments & Technologies (pty) ltd.

1.13 SWOT ANALYSIS – Follows on next page

6
 1.13 SWOT ANALYSIS

Strengths Weaknesses

• Well established customer base (potential • Information gaps exist. Updated information
for business to expand). on technology and credit facilities (Revolving
• The team has sufficient experience and Fund) is not readily available to all potential
skills to operate business. clients.
• Owner is knowledgeable in business • Regular needs assessments are not done.
management • Delays in process application process
• Good customer relations. streamline cash flow.
• Systems are modular, proven technology • Systems have high capital & transaction cost.
with low operation and maintenance. • Photovoltaic modules produce direct current
(DC) electricity only: an inverter must be
added to the system to run alternating
current (AC) devices.
• Lack of immediate finance.

Threats Opportunities

• Someone who is financially strong may • Increasing demand for the services.
enter the industry. • Qualified consultants (e.g. Cradle
• Off-Peak Seasons (Rain) reduce cash flow. Investments & Technology ltd) are available
• Batteries can contain hazardous materials and have expressed interest in monitoring
and a means for careful recycling or and evaluation of business.
disposal should be included in the long- • Credit facilities (Revolving Fund) in
term plan & funding scenario. conjunction with Konga, UNDP & Min. of
Mines & Energy (Rural people to obtain Solar
Home Systems).
• Sunlight is available in predictable &
sufficient quantities.
• The sound political, commercial & social
setting of our country has and instilled a
confidence in suppliers, investors, lenders
and insurers.
• Other Solar Technicians in the area of
operation share their clients with our
business. This happens only when such a
client is more in our reach distance wise.

7
 2. MARKETING PLAN

2.1 MARKETING AREA

Solar plus cc proposes a solar electrification project in the Ohangwena & Oshana Region. This
project is targeting SME’s, households, health facilities and schools. It is envisaged for a
minimum period of 3 years. Please see breakdown of this localities under section 2.4.1 to 2.4.2

2.2 RESEARCH
The following information was extracted from the Regional Planning Report for Oshana &
Ohangwena Region,''According to Rural Electrification Master Plan 2005".

2.2.1 REGIONAL PROFILE

Ohangwena Region Oshana Region

According to the Baseline Report ( August 2000) the According to the Baseline Report ( August 2000)
region comprises 20 localities : the region comprises 20 localities :
• The Region consists of 20 localities: • 198 Cuca Shops
• No. of Cuca shops : 127 • 868 Schools
• School points : 1 529 • 120 Clinics
• Clinic points : 440
Viability test is done with figures of households as Viability test is done with figures of households
per Baseline Report dated October 2005. as per Baseline Report dated October 2005.
Attached see Schedule of off-grid & Pre-grid Attached see Schedule of off-grid & Pre-grid
households for more information. households for more information.

• Total no. of units = 15 729 ( 1 3677 + 15%) Total no. of units = 5 595 ( 4 865 + 15%)
.
Remarks: Please note that 15% of the current households will be electrified (grid) in the following five
years. This is a conservative calculation of households only.

2.3 TARGET MARKET

Solar Plus cc is providing its services and products to:
• Other Rural based civil servants.
• Commercial farmers for Solar Water pumps & Heaters
• Rural based households that are self employed.
• Rural based Small and medium size enterprises

2.4 MARKET VIABILITY TEST

This test is determining the overall viability of such services in the specific region.
2.4.1 MARKET VIABILITY TEST – Ohangwena Region
FORMULA FINDINGS
1. Determine how many unelectrified localities there are 15 729 units in off grid areas over five years.
in the target area.
See section 2.3.3 on page 7)
2. Using official sources, determine the average annual N900-00
income per household for the specific area.
8
 3. Multiply average income per household by residential N$14’155 695-00
units to obtain annual income per specific target area.
4. Determine the % each household spent on specific 10%
product/service category:

5. Multiply % by average income p/annum to obtain N$1’415 570-00 (N$14’155 695-00 x 10%)
annual expenditure on specific product/service category
6. Market share P/annum. Conservatively calculated, N$212 335-00
suppose the business gains 15% market share.
(N$1’415 570-00 x 15%)

2.4.2 MARKET VIABILITY TEST – Oshana Region

FORMULA FINDINGS
1. Determine how many unelectrified localities there are in the 5 595 units in off grid areas over five years.
target area.

2. Using official sources, determine the average annual N$900-00

income per household for the specific area.
3. Multiply average income per household by residential units N$5’035 500-00
to obtain annual income per specific target area.
4. Determine the % each household spent on specific 10%
product/service category:

5. Multiply % by average income p/annum to obtain annual N$503 550-00 (N$5’035 500- x 10%)
expenditure on specific product/service category
6. Market share P/annum. Conservatively calculated, suppose N$75 533-00
the business gains 15% market share.

2.4.3 Remarks:
a) Potential clients for Solar Home Systems are in two categories. a) The cash clients and b) those that
make use of the credit facilities (Solar Revolving Fund). It is estimated that almost 90% of the market
will be credit facilitated clients and 10 % will be cash clients like farmers that need solar water heaters.
b) MARKET SHARE
C) Average Total no. of households to be 21 324 (15 729-00 + 5 595 4 265 households 355
installed. )households to have SHS in 5 ) to have SHS households to have
years. p/anum SHS p/month
Market share P/month. Conservatively 53 (355 households x 15%) 10 SHS’s presents: (current capacity = 10
calculated, suppose the business gains households to have SHS p/month. households p/month).
15% market share Current capacity in terms of 5System C @ N$18 336-00 = N$91 680-00
working hours & staff is 10 SHS 5 System D @ N$ 33 132-00 = N$165 660-00
p/month. N$257 340-00
Items Year I ( 2006) Year II ( 2007) Year III (2008) Year IV (2009)
Market Share 15% 15% 18% 20%
(Growth)
A) Estimated Income P/anum
3’088 080-00 3’551 292-00 4’190 525-00 5’028 630-00
Remark: Sales figures are as in table 3.11 on page 15.
Source: National overview report - attached.

9
 2.5 MARKETING STRATEGY
The business will provide quality and superior service at a fair price to the customers on
time. Promotional measures therefore will be quality recreational activities availability at the
right place and time.
The most important marketing strategies will be:
a) Product strategy

In response to the customers’ needs the business shall strive to lead with innovations
both in product design and services which are unequalled in this specific market and
industry.

b) Pricing strategy

The business will have a mark-up policy of 20%-30% which will be affordable by the
target market. The market place dictates our pricing and the approval of loans for
customers is a proof that our pricing structure is acceptable in the market. It means a
fair price lead by demand and supply.

c) Promotion strategy

The business will be engaged in direct marketing. The products will be market by
means of word of mouth and house visits. The owner plans to mount a demonstration
model on his four wheel drive vehicle for promotion purposes.

d) Distribution strategy

Products (panels) will be distributed by technicians to the site.

2.6 PROFESSIONAL SUPPORT SERVICES

Cradle Investments & Consulting Services (pty) ltd: Advisory and mentoring services in
the rural areas are growing very fast and needs to be enhanced in terms of quality &
quantity. Cradle Investments & Technology ltd (duly appointed consultancy company), will
render only the best service to the technicians in terms of marketing strategies, Basic
Business Administration and Monitoring & Evaluation.

2.7 OFFICIAL SUPPORT SERVICES

Ministry of Mines and Energy draw up a new terms of reference for the Solar Electrification
Project through Tender F1/7-8/04. This was in order to administer the SRF. On 31 January
Konga Investments was appointed as the fund administrators for the next five years. Other
responsibilities included the promotion and maintenance of different solar energy systems as
well as SRF’s awareness campaigns among the off grid rural communities.

2.7.1 Solar Revolving Fund (SRF) – Procedures for issuing a loan (See table on next
page)

10
 2.7.1 Solar Revolving Fund (SRF) – Procedures for issuing a loan

Start
↓
pplication Assessment, Application Inform client. If deposit is
received with verification & Successful Advice to received,
all necessary recommendation ? Pay 5% issue
documents by Fund Manager deposit purchase
→ → → Yes → → order to
system
supplier.
Enter client
on SRF’s
database
↑ ↓ ↓
Applicant Inform Installation &
make applicant in Signing of
amendment writing or Installation
& resubmit ← tel.Advice ← No report
main
reasons for
no approval
↓
Supplier deliver
Installation report
& invoice to
Konga for
payment
↓
Konga’s Konga pay No Any faults Debit order 90 %
technical remaining 10% to from details send payment is
team to supplier beneficiary to bank for made. 10 %
provide 2 ← ← ← within 30 ← beneficiaries ← retention for
year days instalments system faults
maintenance
plan
↓ ↓
Stop Yes
↓
Supplier to
fix fault

11
2.8 MARKETING BUDGET

To promote and distribute the business, the following marketing budget will be required:

ITEMS COSTS
• Radio Oshiwambo (4 x p/month @ N$95-00 p/slot) 380-00
• Brouchers & Business cards 500-00
• Fuel cost on home visits in rural areas 600-00
TOTAL 1 480-00

12
 3. PRODUCTION PLAN
3.1 Service/Production Process
The following activities will be carried out.

Activity Responsible person Duration

Need assessment Manager/ staff Continuously
Suppliers identification Manager 1-day
Place Order Manager 1-day
Receiving Order Manager/Office Assistant 1-hours
Installation of Pannel/s Technicians x 3 20 days p/month
Quality Control Manager/ 2-hours
Discrepancies Manager/ 1-hour
Proper Housekeeping General worker Daily
3.2 STOCK/ MATERIALS NEEDED
Solar Home Systems, Solar Water Pumps and Solar Water Heaters from local suppliers.

3.3 CUSTOMERS
The main customers are the rural households, businesses and communal farmers.
3.4 FUTURE CAPACITY
At the moment the business has several customers fixed clients in both in Ohangwena &
Oshana region. In this regard expansion and improvements is inevitable in order to meet the
increasing demand. A list of these customers is attached for your perusal.
3.5 MAINTENANCE AND REPAIRS

Maintenance programme is currently administered by Konga Investments.

3.6 BUDGETED FIXED CAPITAL AND DEPRECIATION SCHEDULE

Cost Life Annual Monthly

Budgeted Item (N$) time savings payment
(Months) P/Anum P/Month
2 x Complete Toolbox @ N$1 149-00 each N$2 298-00 60 460-00 38-00

Total N$2 298-00 460-00 38-00

Remark: This table illustrate the devaluation of equipment over a certain period in order to
make provision for the replenishment of such tools and or equipment.

3.7 PRICING STRATEGY

The selling price for the business products will be cost plus method e.g. cost price of product
plus indirect cost charge % plus mark-up. (Materials + Indirect costs + mark-up %)

13
 3.8 LABOUR COST

DIRECT LABOUR INDIRECT LABOUR

1 2 3 4 5 6 7
Total Total Hours in Pay for time Hours NOT Pay for time
STAFF working Monthly pay production in production in NOT in
hrs p/month production production
p/month
Mr. L. N. Sakaria ( 160 N$8 500-00 80 N$4 250-00 80 N$4 250-00
Manager)
Mr. John 160 N$2 800-00 160 N$2 800-00 0 N$0-00
Senior Technician
Mr. L. Nghilidivali 80 N$1 300.00 80 N$800.00 0 N$0-00
Technician
TOTAL N$12 600-00 400 N$7 850-00 80 N$4 250-00

Remarks: Direct labour cost p/hour = N$ 20-00 (Total pay in production/ Total hrs in production)
Indirect Labour cost p/hour = N$ 53-00
Note: Cost of production will be adjusted according to income analysis table while taking in
consideration the indirect cost .

3.9 COSTING & PRICING

Solar Home Systems of 100 Watt DC and 200 Watt AC are used in the business plan, due to its
high demand. These systems are represented by SHS C & D respectively. Please see an outline
of the components and cost price of these systems under section 3.9.

ITEM QTY UNIT COST PRICE

PRICE
System C: Solar Home System
• Solar module, 50 Wpeak, shell,72 cells, multi 2 1 962 3 924
• Module bracket, sheet metal, roof/wall mounted, galv. ,fits 2 models. 2 320 640
• Battery, Willard,Solar 105,12 V, 105 Ah, Maintenance free 2 550 1100
• Board System C, complete with 8A-SR,PG,PP,12V-Terminal box 1 2 6 14 2 614
• Light fitting, bulkhead, rectangular, with 7W ESL, & Pull switch. 4 224 896
• Additional ESL lights, ESL incl. wiring 2 642 1 284
• Battery box, Large, fits one 105Ah battery 2 147 294
• Wiring: Array battery, lights 1 687 687
• Accessories: fasteners, cable clips, cable ties, glands etc. 1 500.50

Subtotal N$13 286.50

VAT:15% N$1 993-00

N$15 280-00

14
System D:
• Board System D, complete with 2OA Solar Regulator, Inverter 1 5 967 5 967
300VA, 12V-Terminal box
• 50 Watt Solar module 4 1 962 7 848
• 3m pole, fixed fits four SE50w panels 1 950 950
• Battery, Willard, Solar 105,12V,105Ah, maintenance free 3 550 1 650
• Battery box, large fits one 105Ah battery 3 150 450
• Light fitting, bulkhead, rectangular, with 11W ESL 8 250 2 000
• Wiring & Accessories 5 144 5 144
Plus VAT:15%
Subtotal N$24 009-00

VAT (15%) N$3 601-00

TOTAL
N$27 610-00

3.10 TOTAL DEMAND

Item Cost Mark up Price: Installations & Total

price Install & Services P/Month
Services P/Month (N$)

System C: Solar N$15 280-00 N$3 056-00 N$18 336-00 5 systems p/month N$91 680-00
Home System 60 systems p/year

System D: Solar N$27 610-00 N$5 522-00 N$33 132-00 5 systems p/month N$165 660-00
Home System 60 systems p/anum
TOTAL
N$257 340-00

Remarks: on Total Demand

• Mark up: include labour, transportation cost and maintenance cost. This markup is totaling
between 20 % and 30 % in this market.
• Total Cost Price is N$214 450-00.
• Price (Service& Installation): This is the amount which will be claimed by technician from (Konga
Investments). Above prices are as per Konga Investment’s Solar System Guide.

3.11 SALES FORECAST & MARKET SHARE

Total sales p/month = 257 340-00 x 12 = 3’088 080-00 p/annum (year 1)

Items Year I Year II Year III

Market Share 15% 15% 18%

Products 3’088 080-00 3’551 292-00 4’190 525-00

Remarks: Please refer section 2.4.3 on page 9 for more details about estimated households.

15
 4. MANAGEMENT & ORGANIZATIONAL PLAN

4.1 KEY MANAGEMENT

The management will only consist of one entrepreneur that has the vision of directing the
business to be a profitable enterprise.
He is:

Mr. Leonard Sakaria (Owner)

! Direct and lead operational standards leading to qualitative products.

! Responsible for all administration and bookkeeping and financial direction.

4.2 ORGANIZATIONAL STRUCTURE OF THE BUSINESS

Name Position Job Description Salary

Mr. L. N. Sakaria ( Owner/Manager Overall management of business,
Purchases, Marketing & N$8 500-00
Bookkeeping

Mr. N. John Senior Technician Field Supervision & Installation N$2 800.00

Mr. L. Nghilidivali Technician Responsible installations of Solar

Home Systems N$1 300-00

Total N$12 600-00

Remarks: Please refer to 3.8 (Labour cost) on page 14.

16
 5. FINANCIAL PLAN
The following assumptions and facts impact on the financial statements:

5.1 MONTHLY OVERHEADS

The business will have a very modest and cost effective strategy in handling its overheads
expenses.

ITEMS COSTS
Rent (New premise in Oshakati) 450-00
Water & Electricity 100-00
Material/Stock 214 450-00
Salaries 12 600-00
Transport 3 000-00
Maintenance on vehicle 500-00
Marketing & Promotion 1 480-00
Telephone/ Cell 500-00
Stationary & miscellaneous 150-00
Depreciation ( 3.6 / page 13) 38-00
Bank Charges 300-00
Loan Repayment 5 365-00
TOTAL 238 933-00

17
 ANNEXURE 1

OWNER’S BALANCE SHEET( SOLAR PLUS cc)

Capital employed Notes N$

Owners Equity 45 600-00

Employment of capital
Fixed Assets
Land & Buildings 1 9 000-00
Vehicle 2 20 000-00
Furniture & Equipment 3 6 000.00

Current Assets
Life-stock: Cattle (3 x N$2000-00) 4 6 000-00
Goats (5x N$200-00) 1 000-00
Cash 5 4 000-00
Less-Current Liabilities
Creditors 6 (4 00-00)

45 600-00

Notes to the personal balance sheet

1 Plot and house at Omarara Village in Oshana Region.

2 1.8 l, VW Jetta, 1996 model.
3. Furniture and work equipment is valued at net realisable value (Own valuation).
4 Total life stock at Omarara Village (Oshana Region).
5 Cash is a Fixed Investment (Bank Windhoek).
6. Money owed to Supreme Ellerines for household furniture.

18
 ANNEXURE 2
PROFIT & LOSS STATEMENT

SOLAR PLUS cc

Description Year 1 Year2 Year3

SALES
3’088 080-00 3’551 292-00 4’190 525-00
Less: Costs of goods sold
• Direct Material 2 573 400-00 2 753 538-00 2 946 286-00
• Labour 151 200.00 151 200.00 161 784.00
• Cash Overheads 54 600.00 58 422.00 62 512.00
Gross Profit 308 880.00 588 132.00 1 019 943.00

Less : Operating Expenses

• Selling expenses (promotions) 17 760.00 19 003.00 20 333.00
• Administrative expenses 1800.00 1 926.00 2 061.00
Operating Profit 289 320.00 567 203.00 997 549.00

Less : Depreciation 456-00 456-00 456-00

Less : Interest Expenses (loan) 64 380.00 68 887.00 73 709.00
Less: Bank charges 3 600-00 3 852-00 4 122-00
Net Profit prior TAX 220 884.00 494 008.00 919 262

19
 ANNEXURE 3
CASH FLOW STATEMENT

SOLAR PLUS cc

Pre-Oper. Jan ‘06 Feb ‘06 March April May June July Aug Sept Oct Nov Dec’06
Cash b/f - - 14 725 24 000 29 275 14 550 24 175 29 450 14 725 24 000 29 275 14 550 24 175
CASH INFLOWS
Cash Sales - 224 208 200208 244208 224 208 200208 244208 224 208 200208 244208 224 208 200208 244208
Loan & Equity 219 798 - - - - - - - - - - - -
Other Receipts - - - - - - - - - - - - -
Total Cash Inflows 219 798 224208 214 933 268 208 253 483 214 758 268 383 253 658 214 933 268 208 253 483 214 758 268 383
CASH OUTOW
Pre-operating exp. 219 798 - - - - - - - - -
Rent 450 450 450 450 450 450 450 450 450 450 450 450
Salaries 12 600 12 600 12 600 12 600 12 600 12 600 12 600 12 600 12 600 12 600 12 600 12 600
Stock. - 214 450 214 450 214 450 214 450 214 450 214 450 214 450 214 450 214 450 214 450 214 450 214 450
Water & Electricity - 100 100 100 100 100 100 100 100 100 100 100 100
Fuel Cost 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000
Maintenance (Vehicle) - 500 500 500 500 500 500 500 500 500 500 500 500
Marketing 1480 1480 1480 1480 1480 1480 1480 1480 1480 1480 1480 1480
Tel / Cell - 500 500 500 500 500 500 500 500 500 500 500 500
Stationery/ Miscellaneous - 150 150 150 150 150 150 150 150 150 150 150 150
Depreciation - 38 38 38 38 38 38 38 38 38 38 38 38
Bank fees - 300 300 300 300 300 300 300 300 300 300 300 300
Loan Repayment - 5365 5365 5365 5365 5365 5365 5365 5365 5365 5365 5365 5365
Total Cash Out 219 798 238 933 238 933 238 933 238 933 238 933 238 933 238 933 238 933 238 933 238 933 238 933 238 933

Balance c/f 0-00 14 725 24 000 29 275 14 550 24 175 29 450 14 725 24 000 29 275 14 550 24 175 29 450

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 ANNEXURE 4
NOTES ON CASH FLOW STATEMENT

SOLAR PLUS cc

No. Item Notes

3 Sales Monthly revenue from installations and maintenance of Solar Home Systems. See section 3.10, page 15.

4 Loan & Equity Total amount to be funded with breakdown of 10% collateral security from Share holders. Loan will be
guaranteed by Min. of Mines and Energy. See section 1.6.1 & 1.6.2 on page 5

9 Pre-operating exp. Expenses on all items and activities specified for funding. See section 1.6.1 & 1.6.2 on page 5

10 Salaries Total of Direct and Indirect Labour force. See section 3.8 on page 14

11 Stock. Total of Material ( panels, batteries, regulators, brackets,etc) See section 3.10 on page 14

15 Marketing Monthly Marketing budget. See section 2.8 on page 12

18 Depreciation Savings for replenishment of fixed assets and equipment See section 3.6 on page 13.

20 Loan Repayment Calculated over a period of 48 months (4 years) on 8% interest rate.

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