Business proposal document

1) Executive Summary:

The project is aimed to generate and store electricity from the sun, by
installing solar photo voltaic power plants. With in-house manufacturing of
Solar Modules and battery packs we will achieve lower costs. Also we will
have the ability to make customizable products for specific needs. With
increasing rates of electricity and awareness of individuals backed by
government policies the market for solar power plants and other systems
powered by solar PV is increasing. Also as the prices of solar powered
products are becoming affordable its penetration in the market is even
more increasing.

The company Levant Solar private limited is located in Raipur, State of

Chhattisgarh India. We have planned to implement the project in two
phases. In the first phase we are installing solar power plants both grid and
off grid connected. Also we have built a factory on the rented land of
10000 sq feet. The annual production capacity of the factory is 12 MW,
production of which is started in the month of April 2018. In the second
phase we will procure land in Electronic Manufacturing Cluster (EMC),
Raipur for production of Lithium battery packs and Portable solar power
packs. Our project has got approval from the Chhattisgarh State infotech
promotion Society (ChiPS) for incentives on fixed capital, land and
interest.

The promoters of the company have invested 260577 USD till date in the
company and have obtained debit of 275000 USD from Dena Bank. The
company now requires 1000000 USD for procurement of land, plant and
machinery for its phase two of operations. The working capital for which
will be raised from the bank. Out of the raised amount of 1000000 USD
half will be treated as equity and the remaining half will be returned in the
form of EMI in 6 years along with interest. The exit strategies we have are,
the state gives subsidies on fixed capital and interest once they are
disbursed into the account of company it will be paid to the investors. The
profits earned can be used to pay off the investors, If needed we are open
for third party investment which can help the existing investor to exit.
The calculated IRR of the project is 37.81. The other financial assumptions
are in the annexures.

With access to clean energy to remotest areas, schools and hospitals can be
maintained and operated where there is no access to grid. With our
portable storage device banks and ATMS can operate seamlessly in areas
where there is lack of quality power supply. This gives an opportunity for
local women to get education and an employment in banks, hospitals and
schools. There by giving them financial independence.

2) Value proposition and business model.

Levant solar private limited was established in 15th of Feb 2017 in Raipur
Chhattissgarh India, with an aim to provide clean energy and energy
saving options with solar photovoltaic (PV) to businesses and households.
Soon after that the team have installed many roof top solar photovoltaic
projects. Seeing the current demand of solar products the team has decided
to manufacture solar modules with the brand name “LEVANT”, and
portable solar power energy storage devices with brand name “HeLi”.
In the first phase we have installed 12MW solar module manufacturing
facility on a rented place of 10000 sq feet located on the Great Eastern
Road, Tatiband. Raipur. All the approvals from the local bodies have been
obtained. And the factory is operational from 3rd of April 2018. The
company was commercially selling solar modules since April 2018. We
have received quality certification in the month of august 2018 as per IEC
/IS standards. In the month of October 2018 the brand of LEVANT solar
modules are registered with Bureau Of Indian Standards (BIS) with R-
59000094.
The location of the project is pre-urban area of Raipur City. Man power
availability is abundant. We give preference to house wives near our
factory to come and work with us. Women as best for handling solar cells
and are best for the solar module manufacturing process. Raipur is in
central India, it is closer to the markets in Uttarpradesh and Bihar. It even
is border to 7 other states and all the states are implementing solar power
projects in a good scale. Raw materials are sourced from Hyderabad,
Gujarat, and Bangalore. Raipur is also located close to 2 sea ports on the
eastern coast of India. So if raw material has to be imported it will cost less
for transportation and clearance. Transportation of finished goods will be
by road or by rail. For Raipur being in the central part of the country, it has
very good connectivity either by road or by train.

Marketing arrangements and agreements:

- Levant Solar private limited has tied up with M/s Jaganlite Systems for
distribution and sales of solar panels in the states of UP, Bihar, Manipur,
Nagaland, Jammu Kashmir and Meghalay.

- We have agreements with Eleodoro Energy Private Limited for being

their sole manufacturer for production of solar modules under the Brand
name “Eleodoro”. Eleodoro energy has huge market in Delhi NCR and
other northen states of Himachal, Punjab and Haryana.

- We are a registered vendor with Chhattisgarh state renewable

development authority. And we have good market presence in the state of
Chattisgarh.

- Our other product ‘HeLi’ is ready and we have sold 2 units as of now. We
shall be manufacturing this product in decent volumes in our phase two.
We are discussing with Xtra living private limited to take up marketing
activities for distribution and sales of ‘HeLi’ initially in the states of UP
and Bihar.

- We have been in discussion with Dr. Dinanath Singh for his appointment
in our company as a technical advisor. His wide experience in the field of
semiconductors and Solar cell manufacturing will help us produce a
quality product. Also his association with our company will open us new
markets.

All our efforts are towards production of quality goods. We have targets of
20kW of average monthly solar installations both on grid and off grid and
an average of 900kW of monthly solar panel sales. After we start
production in our phase two EMC, which has outputs of Li battery packs
and Solar powered portable energy storage devices we are targeting to sell
300kWh of the product.

Project development and implementation:

The first phase of the project i.e installation of solar power plants and
manufacturing of solar modules is already implemented. We have all the
machinery in place and have a team of 35 technicians to bring out quality
solar modules. Our General Mangaer Mr. Ramesh ranganna is taking care
of daily production activities and quality of incomming and finished
product.
The second phase of the project which is manufacturing of Li battery
packs and ‘HeLi’ packs. We have applied for an acre of land in the
Electronic Manufacturing cluster (EMC) Raipur. We have to get allotment
of the land and approvals for building construction before the fianances are
arranged.

Development phase:

For the phase two of development i.e., building of factory for

manufacturing Lithium iron phosphate battery pack and portable solar
storage packs for house holds and offices. After the allotment of land.
Following activities need to be done.

- Approvals from the department of town and country planning.

-Approvals from the pollution control department.
- Sanction of power supply.
- Application for factory licence.
Construction/ Implementation phase.

- Compound wall, Security office, Staff rooms.

- Two separate workshops covering 50% of allotted land.
- obtain power supply to the premises. Provision for water supply.
- Get best quotes for machines and building.
-Install machines.
- Man power placements and training.
Expansion growth strategy:

Solar module manufacturing – current capacity is 12MW, we are

anticipating expanding it to 50MW capacity.
Solar modules are a commodity and there are many players in this field. A
huge factory with mass production will reduce the costs of solar modules.
But for that we have to turn up to open markets for sale of our produce.
Our strategy of growth is for in-house consumption. We shall be utilizing
the solar module for our own projects and power plants. There by limiting
the size of the factory to 50MW.

Lithium phosphate battery packs- 300kWh anticipated to expand it up to

1000kWh. Lithium battery packs will be made initially with manual
welding process and testing. Soon after our brand is recognized in the
market we shall have an automated machine for welding. We shall have a
well equipped lab for testing the battery packs for safety and robustness.

Exit Strategy:

- The state government of Chhattisgarh gives incentives for manufacturing

electronic goods. It has 50 % subsidy on plant and machinery. 70%
subsidy on the interest paid on cash credit limit. These are some along with
the other incentives for manufacturing. These when released can be used to
pay off the investors allowing them to exit.
- A part of the profit can be sparred to repay the investors to exit.
3) Management and Manpower Structure.
Organisational Structure:

The Company has three Directors:

- Dhiraj Vedula: He is an electrical engineer. Has a very versatile

experience in the feilds of electronics for automobiles, IC design, High
voltage electrical Engineering, And Solar Photovoltaic applications. He is
resposible for identifying right people for business development. Finding
key partners for product marketing and sales. Identifying right suppliers
for machinery and spares. He is also responsible to bring business for the
company.

- Ashok Tripathi: He is a Post Graduate in Arts 53 years of age. He is

responsible for production and logistic activities.

- T.D. Tripathi: He is a graduate with degree in law. He has experience as a

vice president for a steel plant (Allied Steels ) he is a very good
administrator. He is responsible for managing the man power. Manage
receipts of payments and purchases.

-Dr. Dinanath Singh (Advisor): He holds a doctorate in the field of

electronics. He earlier worked as a Director with Semiconductor labs. And
is the senior member of the management team of Indo-solar Noida. He is
the advisor to our company. He guides us with the latest technological
updates in the field of solar and renewable. He advices us about the
production practices to attain highest yield with minimum rejections in
quality.

- Ramesh Ranganna (General Manager ). He is a graduate in electronics.

Has 25 years of experience in the field of solar module manufacturing. He
is responsible for quality of the product and he is also responsible for
quality of incoming raw materials. His responsibilities also include man
power training, machine calibration, and housekeeping.
- Manish Mungutwar (Manager Accounts): He maintains the books of
accounts of the company. Manages the stores and spares.

Partnerships:

As mentioned above we have tie-up and agreements made for marketing

and sale of our produce. Apart for that we have following partnerships

With Zenbi Energy : Zenbi Energy has a team of engineers and technicians
with experience in solar roof top power-plant installations and other solar
PV projects like water pumps, street lights. We have tied up with them for
installing solar power-plants for us.
Aster Tech Bangalore and Indy Green Delhi: We have tie ups with these
two companies for supply, installation and commissioning of Li battery
assembly Line. These two companies are also responsible for manpower
supply and training.

Partnership with Mr. Shekhar Reddy: We have yet to enter into an

agreement with Shekhar reddy for development of solar portable energy
storage device (HeLi).
4) Technology:
Solar Powered portable backup system.

We have developed a portable wall mounted home/Office back-up system

(HeLi). It has Lithium Iron Phosphate batteries, A solar charge controller,
inverter modules. The battery is charged by the solar power produced from
the solar panels. And that energy is utilized by various appliances in home
and offices.
We have decided to manufacture all the components of it in-house to make
it customisable for a solution and at the same time reduce the cost. For
which in phase 1 we have started manufacturing solar modules. In phase 2
we will be manufacturing ‘ HeLi’ packs with in-house Li battery assembly
unit.
We choose Lithium Iron phosphate battery pack for its Low Cost, Low
toxicity, well defined performance and long term stability. Lithium Iron
Phosphate (LFP) chemistry offers a longer cycle life than other lithium-ion
approaches. Like nickel-based rechargeable batteries (and unlike other
lithium ion batteries) LFP batteries have a very constant discharge voltage.
Voltage stays close to 3.2V during discharge until the cell is exhausted.
This allows the cell to deliver virtually full power until it is discharged,
and it can greatly simplify or even eliminate the need for voltage
regulation circuitry. Because of the nominal 3.2V output, four cells can be
placed in series for a nominal voltage of 12.8V. This comes close to the
nominal voltage of six-cell lead acid batteries. Along with the good safety
characteristics of LFP batteries, this makes LFP a good potential
replacement for lead-acid batteries in applications such as automotive and
solar applications, provided the charging systems are adapted not to
damage the LFP cells through excessive charging voltages (beyond 3.6
volts DC per cell while under charge), temperature-based voltage
compensation, equalisation attempts or continuous trickle charging. The
LFP cells must be at least balanced initially before the pack is assembled
and a protection system also needs to be implemented to ensure no cell can
be discharged below a voltage of 2.5V. So in house assembly of batteries
allows us to implement battery protection system inside the battery pack.
There by ensuring safety and robustness for the wall mounted battery pack.

One important advantage over other lithium-ion chemistries is thermal and

chemical stability, which improves battery safety. LFP is an intrinsically
safer cathode material than Lithium Cobalt and manganese spinel, The Fe-
P-O bond is stronger than the Co-O bond, so that when abused, (short-
circuited, overheated, etc.) the oxygen atoms are much harder to remove.
This stabilization of the redox energies also helps fast ion migration. As
lithium migrates out of the cathode in a Lithium Cobalt cell, the CoO2
undergoes non-linear expansion that affects the structural integrity of the
cell. The fully lithiated and unlithiated states of LFP are structurally
similar which means that LFP4 cells are more structurally stable than
LiCoO2 cells. No lithium remains in the cathode of a fully charged LFP
cell and in Lithium Cobalt cell, approximately 50% remains in the
cathode. LFP is highly resilient during oxygen loss, which typically results
in an exothermic reaction in other lithium cells. As a result, lithium iron
phosphate cells are much harder to ignite in the event of mishandling
(especially during charge) although any fully charged battery can only
dissipate overcharge energy as heat.

Aster technologies Bangalore, will deliver us the technology for assembly

of LFP battery assembly. They are also responsible for man power training
and installation and commissioning of machines. We shall source LFP cells
from Lithium Valley China. They have BIS certified LFP cells. Which are
best in quality. We shall develop in house the battery management systems
for safety of LFP cells. We shall incorporate the individual cell voltage
measuring system inside the battery pack.
Future upgrades to the product ‘HeLi’

As the Device ‘Heli’ is powered both by Solar panels and also by the grid.
We shall have remote monitoring system inbuilt in the device. This gives
us complete data how much power is generated and consumed from
Renewable (Solar) and how much by grid. Doing do we will have a data of
the individual sites so that we can give them more appropriate solution.
BLOCK DIAGRAM OF HELI

5) Market Analysis:

The National Solar Mission was launched on the 11th January, 2010 by the
Prime Minister. The Mission has set the ambitious target of deploying
20,000 MW of grid connected solar power by 2022 is aimed at reducing
the cost of solar power generation in the country through (i) long term
policy; (ii) large scale deployment goals; (iii) aggressive R&D; and (iv)
domestic production of critical raw materials, components and products, as
a result to achieve grid tariff parity by 2022. Mission will create an
enabling policy framework to achieve this objective and make India a
global leader in solar energy.
Further, Government has revised the target of Grid Connected Solar Power
Projects from 20,000 MW by the year 2021-22 to 100,000 MW by the year
2021-22 under the National Solar Mission and it was approved by Cabinet
on 17th June 2015.
Following which, there is a huge demand for the solar panels and allied
systems. In majority of the cases solar modules are being imported from
other countries. We can cater to local markets with production of solar
modules in raipur. In line with the national solar mission the nodal agency
in the state of chhattisgarh i.e Chhattisgarh state renewable development
authority (CREDA) procure more than 100MW of solar modules annually.
Out of which our production of 12MW can be easily sold locally. Due to
very high space required for Lead acid battery storage ad its maintenance
the department of CREDA has already started procuring Li Iron Phosphate
batteries for the solar roof top installations in the state government
buildings. The department of CREDA has started implementing the use of
Lithium Iron Phosphate battery for solar street lights and solar high mast
lights. As LFP batteries requires no maintenance they can be places high
on the mast there by avoiding any chance of theft.
Indian railways has started procuring LFP batteries for its signalling
stations and for battery banks to start the diesel engines. With our partners
located in lucknow we are trying to sell the battery packs to Indian
railways in UP.

Market for ‘HeLi’ Portable solar power pack:

Our innovative product HeLi is a combination of solar power and LFP

batteries for storage. This device gives the consumers access to clean and
uninterrupted supply of electricity. Our target market for this product is the
Banks. Banks have huge power back up rooms occupying a lot of place
and not so tidy just because of the existing lead acid batteries. Lead acid
batteries also have a life of 3 years after which they have to be replaced
adding to the cost.

Our target is to supply the ‘HeLi’ packs of various sizes to the banks in the
states of Chhattisgarh, Uttarpradesh and Bihar. We have our presence in
these states and can develop distributors in these states, and these states
also being vast and lack continuous supply of power. With the help of our
distributor network we can market the HeLi packs to schools, colleges,
Offices and small hotels in the areas targeted.

Almost all middle income households in India nowadays a Lead acid

battery for power storage and back up. They have a limited life span of 3
years. We can now give them a upgrade option which allows them to
switch to more cleaner energy generation and storage device. ’HeLi’ which
generates power from the sun and stores in the wall mounted LFP battery
pack. Our target is the above mentioned three states where we have the
presence.

More detailed analysis of the market is not done and we will need your
help in getting the number of TAM,SAM,SOM, and Willingness to pay.

Social Environment:

Customer attitudes towards installing solar power plants is that the

government should give subsidy for the amount they spend on the solar
power plant. But this attitude is changing towards installations of larger
power plants for commercial use as the cost of installation is coming
down. Increasing population and urbanization is making more people
being accommodated in smaller places. And households are looking for
alternatives for more compact energy storage device. As a common notion
the operation of fridge and washing machine are well understood by the
lady of the house in a similar way if this device ‘HeLi’ if installed in a
house the lady will also get more insight into how this operates and what it
can do driving them towards adopting them to places of work. Allowing
them to do more complex works which otherwise could not have been
possible without power.

Competition Analysis:

There are many existing solar module manufacturers in the market, and at
the same time there are many EPC companies that are working in the solar
space. Our advantage over the others is that they are not many companies
who do both and we have advantage of in house solar module
manufacturing facility. We have location advantage, the place where man
power and electricity is cheaper. There are very companies in India who
product is BIS registered. We are one of them. Our overhead costs are less
so we always have cost advantage through which we can over com e the
competition till the time our brand is not established.

Strengths: Weakness:
-In-house manufacturing of Solar - Yet to establish the brand in the
modules and batteries. market.
-BIS Registration of the product. - No in house marketing team.
-Low overheads. -
-Diversified products reducing risks.
Opportunities: Threats:
- Government promoting the solar - Sudden Policy changes by the
roof top power plant installations. government.
-Lower cost of LFP batteries, could
be a possible replacement of Lead
acid counterparts.
- Not many players in this region of
he country.
Supporting Initiatives:

State and central governments giving subsidies for installation of solar roof
top power plants.
State government of Chhattisgarh providing incentives for manufacturing.
Many societies and trusts coming forward for solar installations in their
premises.

Proposed Investment financing structure.

The project is in two phases:

Phase 1 is already financed and is executed. We shall provide you with the
means of finance of the phase 1. Attached in the annexure
Phase 2 needs finance. The amount of funding needed is as under.

- total Investment cost of the whole project.

79900000 in Rs = 1125352USD
-The investment amount being sought from the investor ‘ask’ amount
66799000 Rs = 940831 USD

- The investment is targeted a part as equity and a part as debt.

Equity – 38299000 Rs = 539422 USD
Debt – 28500000Rs = 401408.45 USD
We are seeking both Local and foreign currency.

- The project developer has already invested the following amount in the
project.
18501000 rs = 260577.46 USD.
Apart from that the project developer has implemented the project and is
now making revenue. He has got all the approvals and certifications for the
product to be sold in the market.
- Other Sources of fund that will be made available.

The project developer has already got the finance for working capital from
Dena Bank Raipur. Working capital for the phase 2 of operation will also
be arranged from he same bank.

- Rate of Interest for the debt amount asked from the investor is assumed
to be 11 % per annum
- Projected return for the investors is shown in the annexures attached.
- Payback period is assumed to be 6 years
- Execution time line are also mentioned it the working of the financial
model attached with the annexures.

- Legal Entity of the investment borrowing vehicle:

Is a Private Limited Company: Registered under the Ministry of Corporate
affairs of Govt Of India
The Company Identification Number is: U31909CT2017PTC007793.
Levant Solar Private Limited.

EQUITY ASK:

Corporate Structure – Private limited company.

Investment ask amount id as mentioned earlier: Equity – 38299000 Rs =

539422 USD
Developers contribution: 18501000 rs = 260577.46 USD.
Share in Business : 49% for the new investor.
As the business is already generating revenues and apart from the
investment in cash we have invested our sweat and time so we consider
haviing 51% of the share.

Exit Strategy:

As was mentioned above the investment needed is in two forms some in

the form of equity and some in the form of Debt. The Debt will be serviced
with equal monthly instalments up to a period of 6 years along with
interest rate of 11 %. Equity part can be taken back (can be exited) using
following options.
- using the subsidy granted from the state government for the fixed capital
expenditure. which is 15000000 Rs = 211267 USD. His will be released
after the project is executed and operational.
- Using the Interest subsidy granted from the government for the working
capital loan.
We have planned a working capital of 50000000 Rs for which the interest
is calculated per year to be 3700000 Rs 75 % of which will be payed by
the govt of Chhattisgarh which is 39084 USD which can also be paid back
to investor allowing him to exit.
- Third party investment is always an option for the investor to exit.
- If comfortable the company will also consider paying from the profit for
the investor to exit.

7) Financial analysis:
The assumptions of the capital expenditure are based on the discussions
with the suppliers of the machinery.
Operating expense assumptions are according to the estimates of man
power required and prevailing charges. Also the Electricity expenses are
based on prevailing per unit electricity charge and an estimate of monthly
consumption of electricity depending on the rating of the machinery.

All other details on the financial analysis is attached with the annexures.
8) Risk analysis.
The Risk of project execution on time due to delay of approvals from State
government bodies.

This will threat the complete project and only regular follow ups with the
sanctioning authority we can mitigate this risk. As the management is
based in Raipur very close for the place where the project is being
executed, this can be achieved.

Financial Risk: The cost of plant and machinery and the technology are all
assumed based on the current quotations, which are likely to go down and
will be certainly lower that our assumed costs.

Market Risks: The demand of our product may go down or people may not
adopt what we offer. In such cases as we have three different outputs or
diversified products, we can earn revenue from any one of our products if
the demand for other goes down. All the products are commodities and can
earn us revenue.

Political Risks:
Sudden changes in the policy can affect the market for our products.
Again having a diversified products will mitigate this risk.
9) Non financial Impacts:
GHG Mitigation: We are having a solar module manufacturing plant
capacity of 12 MW per annum. If we could install the systems up to 10
MW per annum. And considering the area India where we operate and
where there are more than 4 hours of sun light per day. The reduction in
CO2 emmissions will be 14600 Tons.

Environmental Impacts:
Our locality Raipur and the state of chhattisgarh is highly mineral rich.
State has coal mines and is also surplus water. 55% of the state is covered
in forests. Mining , Steel and thermal power production are the major
activities in the state. The state also earns most of the revenue through
these. Many workers both male and female earn their living working in
these factories.

Our factory will be one of a kind in this region will change the way people
here will think of business and environment. Our success will change the
mindset of the government and the locals that there are industries that can
provide adequate employment and at the same time earn revenue for the
state without harming the climate. Our industry will provide a clean and
conducive working atmosphere for the workers. Female workers which
earlier were working in mines will be employed in our factory.
10) Conclusion:
Ours is a revenue generating project. Which needs finance for its phase 2
of its operations. Our strengths are the locality where operating cost are
low, proximity to market, proximity to ports, and governments promotion
for industry. We also have tested innovative products ready for the market.
Considering all the above we believe an investment to the quantum
mentioned above, at the right time will enable the team to grow fast and
benefit the society.