FINANCIAL PROJECTIONS

Cost of Project and Means of Finance

(Rs. In million)
Land and site development 0

Building 15
Plant and machinery 5
Miscellaneous fixed assets 0.2
Preliminary expenses 0.5
Pre-operative expenses ( including
interest during construction) 0.5
Contingency margin 0.4
Working capital margin 0.4
TOTAL 22

The proposed means of finance (Rs. In million)

Owner's fund (Equity) 12
Term loans 10
State government's special incentive
loan ( Repayable in 6 instalments after
12 years) 0
22

No.of equal term loan instalments 12

Period of each instalment in years 5
First instalment falling due at the end of
operating year 0
Interest rate on the outsanding term
loan amount 11%

Current asset/liability requirements Months

Raw materials(including consumables)

Stock-in- process
Finished goods
Book debt
Trade credit
No. of equal annual instalments in
which preliminary expenses will be
written off 5
Applicable income tax rate 25%
Deduction allowed on Gross total
income

Exhibit 6A.1 : Interest on Term Loans

Loan o/s at
the end of
Loan o/s at the the first
Year beginning half year
1 10 10
2 10 10
3 10 10
4 10 10
5 10 10
6 10 10
7 10 10
8 10 10
9 10 10
10 10 10
Exhibit 6A.4 : Sales realisati
Year 1 2
Installed capacity(TPA) 691200 691200
Production(TPA) 276480 449280
Capacity utilisation 40% 65%
Sales realisation(Rs.million) 27.04 43.94

Exhibit 6A.2 : Working Capital Requirements (Rs.in million)

Years
Item Norms in months 1
Raw materials(including consumables) 0.23 0.16

Sock-in-process 0 0.00

Finished goods 0 0.00

Book debts 0 0.00
Total current assets 0.16
Less: Debtors 0.23 0.00
Less: Trade credit for raw materials and
consumable stores 0.00 0.00

Required working capital 0.16

Depreciation schedule for income tax purposes ( Written down

Year 1 2
Building 1.567 1.410

Plant & machinery & misc. fixed assets 0.815 0.693

Total 2.382 2.103

Exhibit 6A.5 Profitability Estimates (Estimates of W

Year 1 2
A. Sales realisation 27.04 48.33
B.Cost of production
Raw materials 8.11 14.50
Power 0.54 0.97
Wages and salaries 2.32 2.55
Factory overheads 0.00 0.00
C. Administration & selling expenses
Administration expenses 0.50 0.50
Selling expenses 0.27 0.00
D. Gross profit before interest 15.30 29.82
E. Total financial expenses
Interest on term loans
Inerest on bank borrowing 0.61 0.61
F.Depreciation 0.93 0.93
G. Operating profit 13.76 28.28
H. Preliminary expenses written off 0.05 0.05
I. Profit/Loss before tax 13.71 28.23
J. Provision for tax 3.06 6.76
K. Profit after tax 10.65 21.47
L. Less: Dividend 0 0
M. Retained profit 10.65 21.47
N. Add: Depreciation 0.93 0.93
Preliminary expenses written off 0.1 0.1
O. Net cash accruals (Cash Flow) 11.68 22.50

Exhibit 6A.6 : Tax Calculation

Year 1 2
Profit/loss before tax 13.71 28.23
Add: depreciation for company law
purposes 0.93 0.93
14.64 29.16
Less: depreciation for tax purposes 2.38 2.10
12.26 27.06
Less: unabsorbed depreciation of earlier
years
Gross total income 12.26 27.06
Less deduction u/s 80 I at 30% from
gross total income for 10 years
Total income 12.26 27.06
Income tax @ 25% 3.06 6.76

Exhibit 6A.7 : Projected Cash Flow Statements

Construction
Year period 1
Sources of Funds
Share issue 12
Profit before taxation with interest
added back 14.32
Depreciation 0.93
Preliminary expenses written off 0.1
Increase in secured medium and long-
term borrowings 10
Increase in bank borrowings for working
capital 0.16
Increase in the State Govt's Special
Incentive Loan 0
Total ( A) 22.00 15.51
Disposition of Funds
Capital expenditure for the project 21.10
Increase in working capital 0.16
Preliminary expenses 0.50
Decrease in secured medium & long
term borrowings
Interest on term loans 1.10
Interest on bank borrowings for
working capital 0.00
Taxation 3.06
Dividend 0.00
Total (B) 21.60 4.32
Opening balance of cash in hand and at
bank 0.40
Net surplus/deficit(A-B) 0.40 11.19
Closing balance of cash in hand and at
bank 0.40 11.59

Exhibit 6A.8 : Projected Balance Sheets

At the end of the
construction
period
1
Liabilities
Share capital 12 12
Reserves and surplus 10.65
Secured loans
Term loans 10 10.00
Working capital advance 0.16
Unsecured loans
State Govt. loan 0 0
Current liabilities & Provisions
Trade credit 0.00
Total 22.00 32.81
Assets
Fixed assets
Gross block 21.10 21.10
Less: Accumulated depreciation 0.93
Net fixed assets 21.10 20.17
Investments
Current assets, loans and advances
Raw materials 0.16
Stock-in-process 0.00
Finished goods 0.00
Book debts 0.00
Cash & bank balances 0.40 11.59
Misc. expenditure & losses
Preliminary expenses 0.50 0.40
Total 22.00 32.32
 FINANCIAL PROJECTIONS

Basic Assumptions
Installed capacity in Customer per yr. 691200 360 Days, 10 Hours, 32 Tables and 6 seater
Capacity
Year utilisation
1 40%
2 65%
3 90%

onwards 100%
Price 97.80
Material Cost 30%
Power 2%
Wages & salaries during operating
year (Rs. in million)
1 2.3160
2 2.5476

3 2.8024
th
Increment per year from 4 year 3.0826

Factory overhead expenses in year (Rs. in million)

1 0.0
Increment per year from 2nd year 0%
Administrative expenses per year in
Rs.million 0.5
Selling expenses per year in Rs.as a
percentage of sales 1%

Interest rate on working finance

Company law For income

purposes- tax purposes
under straight under WDV
Depreciation rates for line method method
Building 3.34% 10%
Plant and machinery 7.42% 15.00%
 Miscellaneous fixed assets 7.42% 15.00%

Dividends
Planned to be paid from the year
Rate of dividend planned for the
second year
Increase proposed thereafter once in
years
Percentage of increase

( Rs.in million)

Total
Interest for interest for
Loan o/s at the end of the second Interest for the the second the term
half year first half year half year loan
10 0.55 0.55 1.10
10 0.55 0.55 1.10
10 0.55 0.55 1.10
10 0.55 0.55 1.10
10 0.55 0.55 1.10
10 0.55 0.55 1.10
10 0.55 0.55 1.10
10 0.55 0.55 1.10
10 0.55 0.55 1.10
10 0.55 0.55 1.10
Exhibit 6A.4 : Sales realisation
3 4 5 6 7
691200 691200 691200 691200 691200
622080 691200 691200 691200 691200
90% 100% 100% 100% 100%
60.84 67.60 67.60 67.60 67.60

Exhibit 6A.3: Depreciation Schedules (Rs.in

tal Requirements (Rs.in million) Asset valuation for depreciation p

Asset
Years expenses Basic cost
2 3 Land 0
 0.26 0.35 Building 15
Plant &
0.00 0.00 machinery 5
Misc.fixed
0.00 0.00 assets 0.2
0.00 0.00
0.26 0.35 Depreciation schedule for Company La
0.00 0.00 Building 3.34%
Plant &
0.00 0.00 machinery 7.42%
Misc.fixed
0.26 0.35 assets 7.42%
Annual
depreciatio
n

n schedule for income tax purposes ( Written down value method)

3 4 5 6 7
1.269 1.142 1.028 0.925 0.833

0.589 0.500 0.425 0.362 0.307

1.858 1.643 1.453 1.287 1.140

Exhibit 6A.5 Profitability Estimates (Estimates of Working Results) ( Rs. In millions)

3 4 5 6 7
66.92 74.36 74.36 74.36 74.36

20.08 22.31 22.31 22.31 22.31

1.34 1.49 1.49 1.49 1.49
2.80 11.44 12.58 13.84 15.23
0.00 0.00 0.00 0.00 0.00

0.50 0.50 0.50 0.50 0.50

0.00 0.00 0.00 0.00 0.00
42.21 38.62 37.48 36.22 34.84

0.61 0.61 0.61 0.00 0.00

0.93 0.93 0.93 0.93 0.93
40.67 37.09 35.94 35.29 33.91
 0.05 0.05 0.05 0.05 0.05
40.62 37.04 35.89 35.24 33.86
9.92 9.08 8.84 8.72 8.41
30.70 27.96 27.05 26.52 25.45
0 0 0 0 0
30.70 27.96 27.05 26.52 25.45
0.93 0.93 0.93 0.93 0.93
0.1 0.1 0.1 0.1 0.1
31.72 28.98 28.08 27.55 26.47

Exhibit 6A.6 : Tax Calculation ( Rs. In million)

3 4 5 6 7
40.62 37.04 35.89 35.24 33.86

0.93 0.93 0.93 0.93 0.93

41.55 37.96 36.82 36.17 34.79
1.86 1.64 1.45 1.29 1.14
39.69 36.32 35.37 34.88 33.65

39.69 36.32 35.37 34.88 33.65

39.69 36.32 35.37 34.88 33.65

9.92 9.08 8.84 8.72 8.41

6A.7 : Projected Cash Flow Statements ( Rs. In million)

2 3 4 5 6

28.84 41.23 37.65 36.50 35.24

0.93 0.93 0.93 0.93 0.93
0.1 0.1 0.1 0.1 0.1

0.10 0.10
 29.97 42.35 38.67 37.53 36.27

0.10 0.10

0.83 1.67 1.67 1.67 1.67

1.10 1.10 1.10 1.10 1.10

0.00 0.00 0.00 0.00 0.00

6.76 9.92 9.08 8.84 8.72
0.00 0.00 0.00 0.00 0.00
8.80 12.79 11.85 11.61 11.49

11.59 32.76 62.32 89.15 115.07

21.17 29.57 26.83 25.92 24.78

32.76 62.32 89.15 115.07 139.86

xhibit 6A.8 : Projected Balance Sheets ( Rs.in million)

Years
2 3 4 5 6

12 12 12 12 12
32.12 62.82 90.77 117.82 144.35

9.17 7.50 5.83 4.17 2.50

0.26 0.35 0.35 0.35 0.35

0 0 0 0 0

0.00 0.00 0.00 0.00 0.00

53.54 82.67 108.96 134.35 159.20

21.10 21.10 21.10 21.10 21.10

1.85 2.78 3.71 4.63 5.56
19.25 18.32 17.39 16.47 15.54

0.26 0.35 0.35 0.35 0.35

0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00
32.76 62.32 89.15 115.07 139.86

0.30 0.20 0.10 0.00 -0.10

52.56 81.20 107.00 131.90 155.65
les and 6 seater
 8 9 10
691200 691200 691200
691200 691200 691200
100% 100% 100%
67.60 67.60 67.60

Depreciation Schedules (Rs.in million)

et valuation for depreciation purposes
Share of Share of
preoperati contingen
ve cost cy margin Total
0.00 0.00 0.00
 0.37 0.30 15.67

0.12 0.10 5.22

0.00 0.00 0.21

ation schedule for Company Law purposes

0.52 (Rs.in millions)

0.39

0.02

0.93

(Rs.in millions)
8 9 10
0.749 0.674 0.607

0.261 0.222 0.189

1.011 0.896 0.796

s)
8 9 10
74.36 74.36 74.36

22.31 22.31 22.31

1.49 1.49 1.49
16.75 18.43 20.27
0.00 0.00 0.00

0.50 0.50 0.50

0.00 0.00 0.00
33.31 31.64 29.80

0.00 0.00 0.00

0.93 0.93 0.93
32.39 30.71 28.87
 0.05 0.05 0.05
32.34 30.66 28.82
8.06 7.67 7.24
24.27 22.99 21.58
0 0 0
24.27 22.99 21.58
0.93 0.93 0.93
0.1 0.1 0.1
25.30 24.02 22.61

8 9 10
32.34 30.66 28.82

0.93 0.93 0.93

33.26 31.59 29.75
1.01 0.90 0.80
32.25 30.69 28.95

32.25 30.69 28.95

32.25 30.69 28.95

8.06 7.67 7.24

7 8 9 10

33.86 32.34 30.66 28.82

0.93 0.93 0.93 0.93
0.1 0.1 0.1 0.1
34.89 33.36 31.69 29.85

1.67 1.67 1.67 0.83

1.10 1.10 1.10 1.10

0.00 0.00 0.00 0.00

8.41 8.06 7.67 7.24
0.00 0.00 0.00 0.00
11.18 10.83 10.44 9.17

139.86 163.56 186.10 207.35

23.71 22.53 21.25 20.68

163.56 186.10 207.35 228.02

7 8 9 10

12 12 12 12
169.80 194.07 217.06 238.64

0.83 (0.83) (2.50) (3.33)

0.35 0.35 0.35 0.35

0 0 0 0

0.00 0.00 0.00 0.00

182.98 205.59 226.91 247.66

21.10 21.10 21.10 21.10

6.48 7.41 8.34 9.26
14.62 13.69 12.76 11.84

0.35 0.35 0.35 0.35

0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
163.56 186.10 207.35 228.02

-0.20 -0.30 -0.40 -0.50

178.33 199.84 220.06 239.71
(Rs.in millions)
Designation Number Salary per month Salary annual
Cook 4 15000 720000
Sweaper 1 8000 96000
Manager 1 35000 420000
Helpers 6 15000 1080000
2316000
2.316