Delta System Limited

7/30/2019 Delta System Limited

1/81

APPLICATION FOR FINANCIAL ASSISTANCEFROM

EQUITY AND ENTREPRENEURSHIP FUND (EEF)

BANGLADESH BANK

DELTA SYSTEMS LIMITED

CORPORATE OFFICE :

8 Panthapath, Level-14

Unique Trade Center (UTC)

Tejgaon, Dhaka.


2/81

GENERAL CONTENTS

PART I : APPLICATION FOR FINANCIAL

ASSISTANCE FROM THE EEF UNIT,

BANGLADESH BANK

PART II : FEASIBILITY REPORT ON DELTASYSTEMS LIMITED

PART III : MEMORANDUM & ARTICLES OF

ASSOCIATION OF DELTA SYSTEMS

LIMITED


3/81

PART I

APPLICATION FOR FINANCIAL ASSISTANCEFROM

THE EQUITY & ENTREPRENEURSHIP FUND (EEF)BANGLADESH BANK


4/81

Bank/DFI/EEF Unit

Application Form For Financial Assistance For a New Project

1.0 Proposed Project :

1.1 Name of the Project : Delta Systems Limited

1.2 Address :

a. Corporate Office : 8 Panthapath, Level-14


Tejgaon, Dhaka.

b. Project Office : 153/1, Green Road.

Dhaka-1205.

2.0 Promoters :

2.1 Particulars of the Promoters :

Name Address Status

Engr. Bellal HossainShikder

House # 8, Road # 12Dhanmondi, Dhaka.

ManagingDirector

Engr. Faizul Hoque

Shikder

7D, House # 5/Kha, Shatmosjid

Road, Mohammadpur, Dhaka.Director


5/81

2.2 Bio-data of the Promoters

(Sponsors/Directors)

: Furnished as per

Form1 (enclosed)

2.3 Personal Networth Statement

of the Promoters

: Furnished as per

Form2 (enclosed)

2.4 Declaration of particulars of

sister/allied concern (s)

: Furnished as per

Form3 (enclosed)

2.5 Specimen of the letters addressed

to the bankers of the Promoters

: Enclosed.

3.0 TESTS OF PROJECTS VIABILITY:

In appraising the project, the viability tests have been made, as

follows, on the basis of the factors and/or aspects prescribed inForm5:

3.1 Appraisal of the Sponsors/Entrepreneurs :

The overall management and operation of the project will be under

the joint supervision and guidance of the promoters as mentionedearlier. A brief description of background and experience of all the

sponsors is furnished hereunder :


6/81

Engr. Bellal Hossain Shikder :

The Managing Director of the Company Engr. Bellal Hossain Shikder,

aged 39, is a B. Sc. in Civil Engineering from BUET and also an MBA

form the University of Dhaka.

He is a well experienced in Information Technology (both hardware &

software). He has been running business in this sector for more than

one year and has already achieved remarkable success. His success

in the relevant sector made him confident enough to take up a

venture in larger shape.

Engr. Bellal Hossain is a social worker and he is engaged in various

socio-cultural activities.

Engr. Faizul Hoque Shikder :

Engr. Faizul Hoque Shikder, aged 27 is a B. Sc. in Agricultural

Engineering and an M. Sc. in Food Technology. He is a Director of the

Company. He is an experienced businessman in IT sector, who has

been doing this business for more than one year.

Engr. Faizul Hoque is a young, dynamic person who is devoted to

business in IT sectors. He is very much enthusiastic and confident

about success in IT related businesses.

Engr. Faizul Hoque is a good organizer and social worker. He is a

popular person in his community and spends time to do social well

being.


7/81

3.2 Technical, Technological and Environment Tests :

The project has been designed mainly for developing computer

software and selling the same at both local and foreign

markets/buyers. The software have been getting an increasing

demand day by day, but the supply situation (production of software)

has not been at a level in relation to demand. For this reason, there

prevails a demand-supply gap (i.e. supply deficiency) in this sector,

especially in the western countries.

The main and the most valuable component of the software industry

is the IT professionals. Fortunately, Bangladesh is enriched with this

type of professionals who possess the highest brilliance and excellent

ideas/innovations. But this is yet to be focused in the international

arena. And if this can be highlighted before the world, it could be a

great source of foreign currency for the country.

The project is environment friendly. So, it will put no adverse effect

on the environment. Rather, it is likely to create employment for a

good number of educated people and thus will play a satisfactory

socio-economic role.

The project is of utmost priority set by the present Government with

a view to developing the software sector, which will ultimately

contribute significantly in the economic development of the country.


8/81

3.3 Financial Feasibility:

The project is financially feasible. This is indicated by the following

evaluating factors:

Breakeven point : 60% of

assumed capacity.

Internal Rate of Return (IRR) :

25 %

Payback period : 5 years

and 3 months.

Margin of safety : 40%

3.4 Projects Return :

The after-tax return of the project are shown as follows:

Return on sponsors

Paid-up capital : 10% (4th year)

Return on total

Capital outlay : 5% (4th year)

Return on assets : 6% (4th

year)

So the projects return can be considered to be satisfactory.

3.5 Ratio Analysis:

All financial ratios of the project show a comparatively better picture,

as follows, than the minimum standards set by the EEF Unit of

Bangladesh Bank :

FactorsProjects Ratios

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

Gross profitto sales (%)

51 40 39 38 38


9/81

Operating profitto sales (%)

18 10 10 12 14

Net Profitto sales (%)

13 07 08 09 10

Debt-service CoverageRatio (times) 2.95 2.57 2.65 2.81 2.99

Fixed Assets CoverageRatio (times)

1.83 1.81 1.77 1.72 1.64

3.6 SWOT Analysis:

Strengths:

The project location is an excellent one and it enjoys a good

communication network with all infrastructure facilities being

available.

All the promoters are financially sound and have the affordability

of equity participation against their respective shareholdings in

the company.

The promoters of the project are all highly educated with bright

academic records. So the project is enriched with the persons

who are quite sound and capable in business management and

operational aspects.

Weakness:

The software industry in Bangladesh is still at its infant stage.

People do not come forward to develop this sector mainly due

to financial incapability and some sort of confusion about its

prospect.


10/81

For competing in the international market, volume and quality

should be significantly high to achieve the acceptability.

Opportunities:

There is a vast market demand of the software, especially in

the western countries of the world, which is getting an

increasing shape day by day. So the software developingprojects of the country have a lot to exploit it.

Talented professionals required to run this type of venture can

be obtained locally. This will enable the project to have a cost-

benefit advantage.

The software project will be socially and economically wellaccepted and environment friendly having no adverse effect on

the surrounding areas.

Threats:

The resourceful brilliant professionals may leave the country forbetter prospect and living standard in absence of their desired

placement.

The software project may face struggle to survive in absence of

vigorous marketing efforts.


11/81

Political unrest may cause some problem in case of the

projects desired progression.


12/81

4.0 CORPORATE SET-UP/CONSTITUTION:

4.1 Corporate Set-up : Private Limited Company4.2 Date of incorporation : 27.01.01

4.3 Certificate of incorporation : Copy enclosed, duly certified by theManaging Director of the company.

4.4 Memorandum & Articles ofAssociation of the Company

: Copy enclosed, duly certified by theManaging Director of the Company.

4.5 TIN of Directors of theCompany and sister concerns

: Copy of certificates enclosed.

5.0 PARTICULARS OF THE PROJECT:

Feasibility Report on the project containing the particulars prescribed

in the Application Form of the EEF Unit of Bangladesh Bank has beenprepared and enclosed hereto.

We do hereby solemnly declare and affirm that the statement andinformation furnished in this Application and the Forms and the

Feasibility Report enclosed herewith are correct and true, and nothinghas been concealed therefrom, and if at any time it transpires that

we have suppressed any fact and/or supplied wrong information, weshall be held liable therefor. We agree to furnish you any further

information as may be required by the Bank/DFI.

Name and Designation Signature

1. Engr. Bellal Hossain Shikder ___________________

Managing Director

2. Engr. Faizul Haque Shikder ___________________

Director

Date :____________


13/81

Form-1(a)

Name of company:

BIO-DATA OF THE SPONSORS/DIRECTORS

01. Name : Engr. Bellal Hossain Shikder

02. Fathers Name : Late Shyad Ali Shikder

03. Mothers Name : Nurzahan Begum

04. Nationality : Bangladeshi

05. Age/Date of birth : 01.03.1964

06. Address :

a) Present : House # 8, Road # 12

Dhanmondi, Dhaka.

b) Permanent : House # 8, Road # 12

Dhanmondi, Dhaka.

07. Home district : Bagerhat.

08. Educational Qualification : B. Sc. in Civil Engineering from BUET.

MBA from the University of Dhaka.

PHOTO


14/81

Form-1(b)

09. Technical or any other qualifications :

(a) Information Technology enabled knowledge in both hardware and

software.(b) Teaching.10. Industrial/Business/Other experience :

Name ofCompany

Nature ofBusiness

Location/Address

MainProducts

Position/Jobs

Durationwith date

Delta SystemsLtd.

InformationTechnology

House # 83/A,Road # 11A,Dhanmondi, Dhaka

Brand PCi-friend &software

ManagingDirector

Since27.01.01

Delta School ofMathematics

PrivateEducation


Education Chairman 16 years

11. Whether associated with any projects financed by Bank/DFI : N/A.

12. Any other information :

(a) Earned wide reputation in teaching profession.

(b) Engaged in various other social & religious activities.

D E C L A R A T I O N

I do hereby declare that-

i) I am a bonafide national of Bangladesh;

ii) I am not a minor;iii) neither I am nor my spouse is serving with any Government/Semi-

Government/Autonomous Body; and

iv) the particulars furnished above are true and correct.

(Engr. Bellal Hossain Shikder)

Date :______________ Signature of the Sponsor/Director


15/81

Form-1(a)

Name of company :Delta Systems Limited

BIO-DATA OF THE SPONSORS/DIRECTORS

01. Name : Engr. Faizul Hoque Shikder

02. Fathers Name : Late Shyad Ali Shikder

03. Mothers Name : Nurzahan Begum

04. Nationality : Bangladeshi

05. Age/Date of birth : 01.01.1976

06. Address :

a) Present : 7D, House # 5/Kha, Satmasjid Road

Mohammadpur, Dhaka.

b) Permanent : Vill + PO: Barabaria

Chitalmari, Bagerhat.

07. Home district : Bagerhat.

08. Educational Qualification : B. Sc. in Agricultural Engineering.

M. Sc. in Food Technology.

PHOTO


16/81

Form-1(b)

09. Technical or any other qualifications :

(a) Diploma in Information Technology from Bhuiyan Academy, Dhaka.

(b) Information Technology enabled knowledge in both hardware andsoftware.

10. Industrial/Business/Other experience :

Name ofCompany

Nature ofBusiness

Location/Address

MainProducts

Position/Jobs

Durationwith date

Delta SystemsLtd.

InformationTechnology

House # 83/A,Road # 11A,

Dhanmondi, Dhaka

Brand PCi-friend &

software

Director Since27.01.01

Delta School ofMathematics

PrivateEducation


Education Partner 2 years

11. Whether associated with any projects financed by Bank/DFI : N/A.

12. Any other information :

a) A good social organizer.

b) Earned reputation in teaching profession.

c) Engaged in various other social and religious activities.

D E C L A R A T I O N

I do hereby declare that-

i) I am a bonafide national of Bangladesh;

ii) I am not a minor;

iii) neither I am nor my spouse is serving with any Government/Semi-

Government/Autonomous Body; and

iv) the particulars furnished above are true and correct.

(Engr. Faizul Hoque Shikder)

Date :______________ Signature of the Sponsor/Director


17/81

Form-2(a)

PERSONAL NETWORTH STATEMENT

Name : Engr. Bellal HossainShikder S/O : Late Shyad Ali Shikder

Address : House # 8, Road # 12Flat # B-5

Dhanmondi, Dhaka.

Age :

Profession :

Position :

Marital Status :

Children :

39 years

Business

Managing Director

Married

Male 01 Female --

For the purpose of obtaining financial assistance from time to time in any form

whatsoever from the Bank/DFI/EEF, the undersigned submits the following as

being a true and accurate statement of his financial condition on the date

mentioned herein and also agree that if any change occurs, the undersigned will

immediately notify the same to the Bank/DFI/EEF :

NETWORTH STATEMENT AS ON 10.04.2003

ASSETS Amount (Tk) LIABILITIES : Amount(Tk)

CASH :

a) In hand

b) With other Banks

INVESTMENT :

Government securities,

Shares, Debenture, Bonds,etc. (Private Investment)

Debtors

Real estate (encumbered)

(Schedule-B)

Real estate (unencumbered)

(Schedule-C)

Cash surrender value forLife Policy

Others

7,56,000

12,00,000

15,00,000

20,00,000

-

1,20,00,000

2,50,000

75,00,000

Loan from Banks/Financial

Institutions

(Schedule-A) :

SecuredUnsecured

Other Creditors

Unpaid Taxes

Other liabilities

5,00,000-

-

-

-

Total : 2,52,06,000 Total : 5,00,000

Net Worth (Total Assets Total Liabilities) :Tk. 2,47,06,000


18/81

Form-2(b)

Name of company :

SCHEDULEA : LIABILITIES TO BANKS/FINANCIAL INSTITUTIONS :

Name & address ofthe Bank/Financial

Institution

Date of availing ofthe loan

Limit with validity Present outstanding Secured with natureof security

Pubali BankSatmosjid Road,Dhaka

Dec-2001 Tk 8,00,000 Tk 5,00,00040% of SavingsCertificates held

SCHEDULEB : REAL ESTATES (ENCUMBERED) : N/A

Location and

tenure of

ownership

Area of land Description and

Schedule of the Property

and type of building

Mortgage and

mortgage amount

Market Price

Land Building Total

SCHEDULEC REAL ESTATES (UNENCUMBERED) :

Location and tenure of

ownership

Area

of land

Description and Schedule of the

Property and type of building

Market Price (Tk in 000)

Land Building TotalHouse # 8, Road # 12

Flat # B-5,Dhanmondi, Dhaka.

1400sft Apartment Building. - 3000 3000

8 Panthapath, Level-14Green Road, Dhaka.

2844sft Commercial Building - 8000 8000

9C, Concord CentreFramgate, Dhaka

550 sft Commercial Building - 1000 1000

Total : - - 12000 12000


19/81

Form2(c)

DECLARATION

(a) I do hereby declare that I do not have liabilities to any Banks/DFIs in

my name or in the name of any company/concern in which I hold

interests;

(b) I do hereby declare that the above named assets are owned by me; and

(c) I do hereby declare that my Income Tax (Payers) Identification Number

(TIN) is/are ________________________ and Income Tax liabilities is/are

cleared up to the assessment year ____________________ (photo copies

of tax payment documents is/are enclosed).

The undersigned certifies that the information furnished herein is true and correct.

(Engr. Bellal Hossain Shikder)Date :_____________ Signature of the Sponsor/Director


20/81

Form-2(a)

PERSONAL NETWORTH STATEMENT

Name : Engr. Faizul HoqueShikder S/O : Late Shyad Ali Shikder

Address : 7D, House # 5/KhaSatmasjid Road

Mohammadpur

Dhaka.

Age :

Profession :

Position :

Marital Status :

Children :

27 years

Business

Director

Unmarried

Male -- Female --

For the purpose of obtaining financial assistance from time to time in any form

whatsoever from the Bank/DFI/EEF, the undersigned submits the following as

being a true and accurate statement of his financial condition on the date

mentioned herein and also agree that if any change occurs, the undersigned will

immediately notify the same to the Bank/DFI/EEF :

NETWORTH STATEMENT AS ON 10.04.2003

ASSETS Amount (Tk) LIABILITIES : Amount(Tk)

CASH :

a) In hand

b) With other Banks

INVESTMENT :

Government securities,

Shares, Debenture, Bonds,etc. (Private Investment)

Debtors

Real estate (encumbered)

(Schedule-B)

Real estate (unencumbered)

(Schedule-C)

Cash surrender value forLife Policy

Others

5,00,000

3,00,000

5,00,000

5,00,000

-

-

10,00,000

Loan from Banks/Financial

Institutions

(Schedule-A) :

SecuredUnsecured

Other Creditors

Unpaid Taxes

Other liabilities

--

-

-

-

Total : 28,00,000 Total : -

Net Worth (Total Assets Total Liabilities) :Tk 28,00,000


21/81

Form-2(b)

Name of company : Delta Systems Limited

SCHEDULEA : LIABILITIES TO BANKS/FINANCIAL INSTITUTIONS : N/A

Name & address ofthe Bank/FinancialInstitution

Date of availing ofthe loan

Limit with validity Present outstanding Secured with natureof security

SCHEDULEB : REAL ESTATES (ENCUMBERED) : N/A

Location and

tenure ofownership

Area of land Description and

Schedule of the Propertyand type of building

Mortgage and

mortgage amount

Market Price

Land Building Total

SCHEDULEC REAL ESTATES (UNENCUMBERED) :

Location and tenure ofownership

Area ofland

Description and Schedule of theProperty and type of building

Market Price (000 Tk)

Land Building Total

Total : - -


22/81

Form2(c)

DECLARATION

(a) I do hereby declare that I do not have liabilities to any Banks/DFIs in

my name or in the name of any company/concern in which I hold

interests;

(b) I do hereby declare that the above named assets are owned by me; and

(c) I do hereby declare that my Income Tax (Payers) Identification Number

(TIN) is/are ________________________ and Income Tax liabilities is/are

cleared up to the assessment year ____________________ (photo copies

of tax payment documents is/are enclosed).

The undersigned certifies that the information furnished herein is true and correct.


Date :_____________ Signature of the Sponsor/Director


23/81

Form-3Name of the Company : Delta System LimitedBank/DFI/EEF

Sub : Declaration of particulars of my sister/allied concern(s).

Dear Sir,

I do hereby declare that the particulars of my sister/allied concern(s) is/are as

follows:

(1) Name of business concern(s) : Delta School of Mathematics

(2) Name, Fathers Name & Address :

of the proprietor/partners/Directors : Engr. Bellal Hossain ShikderS/O. Late Shyad Ali Shikder


Engr. Faizul Hoque ShikderS/O. Late Shyad Ali Shikder7D, House # 5/Kha

Satmasjid Road, MohammadpurDhaka.

(3) Business address : House # 83/A, Road # 11/A

Dhanmondi, Dhaka.

(4) Name of the Banker :

(5) Position of loans/liabilities : N/A

Name of loan Amount Present outstanding Security

- - - -

I confirm that I have no other sister/allied concern and liabilities beyond those as

declared herein.

(Engr. Bellal Hossain Shikder)Date : _____________________ Signature of the Sponsors/Director


24/81

Form-3Name of the Company : Delta System LimitedBank/DFI/EEF

Sub : Declaration of particulars of my sister/allied concern(s).

Dear Sir,

I do hereby declare that the particulars of my sister/allied concern(s) is/are as

follows:

(1) Name of business concern(s) : Delta School of Mathematics

(2) Name, Fathers Name & Address :

of the proprietor/partners/Directors : Engr. Bellal Hossain ShikderS/O. Late Shyad Ali Shikder


Engr. Faizul Hoque ShikderS/O. Late Shyad Ali Shikder7D, House # 5/Kha

Satmasjid Road, MohammadpurDhaka.

(3) Business address : House # 83/A, Road # 11/A

Dhanmondi, Dhaka.

(4) Name of the Banker :

(5) Position of loans/liabilities : N/A

Name of loan Amount Present outstanding Security

- - - -

I confirm that I have no other sister/allied concern and liabilities beyond those as

declared herein.

(Engr. Faizul Hoque Shikder)Date : _____________________ Signature of the Sponsors/Director


25/81

Form-4

The Manager

..................................

..................................

..................................

Dear Sir,

Account No.

I/We have applied to the EEF Unit, Bangladesh Bank, Dhaka, for financial

assistance.

In this connection, I/we hereby authorize you to furnish to them any

information they may request from you regarding the conduct of the

account and loans/facilities that have been extended to me/us by your

Bank.

(Engr. Bellal Hossain Shikder)

Signature of Account Holder


26/81

Form-4

The Manager

..................................

..................................

..................................

Dear Sir,

Account No.

I/We have applied to the EEF Unit, Bangladesh Bank, Dhaka, for financial

assistance.

In this connection, I/we hereby authorize you to furnish to them any

information they may request from you regarding the conduct of the

account and loans/facilities that have been extended to me/us by your

Bank.


Signature of Account Holder


27/81

PART II

FEASIBILITY REPORTON



28/81

CORPORATE OFFICE :

8, Panthapath, Level-14Unique Trade Center (UTC)

Tejgaon, Dhaka.

APRIL, 2003


29/81

FEASIBILITY REPORTON


TABLE OF CONTENTS PART-II

PROJECT SUMMERY iii

01. INTRODUCTION 1

02. ORGANIZATION & MANAGEMENT 3

03. TECHNICAL ASPECTS 6

04. MARKETING ASPECTS 12

05. SOCIO- ECONOMIC ASPECTS 15

06. FINANCIAL ASPECTS 17

ANNEXURE :

I. Cost of the Project 19

II. Cost of machinery & equipment 21

Iii. Cost of furniture, fixture & office equipment 22

IV. Preliminary expenses 23

V. Working capital 24

VI. Earning forecast 25

VII. Sales forecast 26

VIII. Cost of goods sold 27

IX. Administrative & selling expenses 30

X. Break- even analysis 32

XI. Cashflow statement 33

XII. Projected balance sheet 34

XIII. Internal rate of return (IRR) 35

XIV. Debt- service coverage ratio (DSCR) 36

XV. Pay- back period 37

XVI. Margin of Safety 38


30/81

PROJECT SUMMARY

01. Name of the Project : Delta Systems Limited

02. Location of the Project : The proposed project will be located at

153/1, Green Road, Dhaka-1205. The

project site is very much suitable from

different perspectives and enjoys all

infrastructure and very good

communication facilities.

03. Address : Corporate Office :

8, Panthapath, Level-14


Tejgaon, Dhaka.

Project :153/1 Green Road

Dhaka-1205.

04. Project brief : The project envisages setting up of a

software industry for the development

and marketing of computer software and

ICT enabled services, which are of high

demand both at home and abroad.

The implementation of the project will

increase national earnings, make

significant contribution to GDP and create

employment opportunity considerably.


31/81

05. Corporate setup / status : Private Limited Company.

06. Name & Address of the sponsors :

Name Address Status

Engr. Bellal HossainShikder

House # 8, Road # 12Dhanmondi, Dhaka

ManagingDirector

Engr. Faizul HoqueShikder

7D, House # 5/Kha, SatmasjidRoad, Mohammadpur, Dhaka

Director

07. Cost of the project & Means of finance :

(Tk. in 000)

Financing Cost incurred To be incurred Total

B. B. equity - 17961 17961

Sponsors equity 5620 13074 18694

Total capital outlay: 5620 31035 36655

08. Financial Performance :(Tk. in 000)


Sales revenue

Gross profit

Operating profit

Net profit

16500

8408

3015

2182

18150

7301

1830

1325

19800

7625

2075

1502

21450

8218

2585

1871

23100

8842

3124

2262


32/81

09. RATIO ANALYSIS :

FactorsProjects Ratios


Gross profitto sales (%)

51 40 39 38 38

Operating profit

to sales (%)18 10 10 12 14

Net Profit

to sales (%)13 07 08 09 10

Debt-service CoverageRatio (times)

2.95 2.57 2.65 2.81 2.99

Fixed Assets Coverage

Ratio (times)1.83 1.81 1.77 1.72 1.64

10. BREAK-EVEN POINT : 60 % of assumed capacity.

11. INTERNAL RATE OF

RETURN (IRR) : %

12. PAY-BACK PERIOD : 5 years and 3 months.

13. MARGIN OF SAFETY : 40 %

14. Market Outlook :

The computer software and other IT enabled services have got a vast

market worldwide. This is getting an increasing trend with the change

in livelihood and faster job requirements. But there prevails a huge

demand-supply gap (supply-deficiency) in this sector. So the

software projects have a lot to exploit this opportunity.

15. Conclusion :

From feasibility report of the project it appears that the project is

technically feasible, commercially viable, financially profitable and

acceptable from the marketing point of view. And as such it is found

to be worthwhile and desirable for investment.


33/81

FEASIBILITY REPORT

ONDELTA SYSTEMS LIMITED

1.0 INTRODUCTION

1.1 Background :

Bangladesh is a developing country which is facing numerous

problems. Among them, unemployment and poverty are the two

major ones. To solve these problems, we have to look for ways and

means and also to think of our strengths, weaknesses, opportunities

and threats.

If our strengths are first considered, it is evident that our human

resources, among all others, can be mentioned first. Again, if we talk

about the ICT Sector, we will be certainly boasted of our brilliant

professionals.

But these ICT Professionals and their capabilities are yet to be

focused in the international arena. If we can properly illuminate them

before the world, it could be a great source of foreign currency forthe country. To earn foreign currency, we must display the products

before the world, which our brilliant ICT Professionals can produce

and which will have worldwide demandofcourse, this is the Software

and ICT enabled services.


34/81

Bangladesh is enriched with so many ICT Professionals who possess

the highest level of brilliance and excellent ideas and innovations.

These professionals are certainly the wealth of the nation who have

the ability to produce different software of international standard to

suit the customers need and thus can contribute to the economic

development of the country to a great extent.

1.2 The Project :

The proposed project is an attempt to make use of some of these ICT

Professionals in producing Software for both local and foreign

markets. The project is also aimed at contributing to the economic

development of the country.


35/81

2.0 ORGANIZATION & MANAGEMENT

2.1 Name & Location of the Project :

The proposed project will be established under the name and style of

Delta Systems Limited to be located at 153/1, Green Road,

Dhaka-1215 having its corporate office at 8, Panthapath, Level-14,

Unique Trade Center (UTC), Tejgaon, Dhaka.

The location of the project is an excellent one from different

perspectives with all infrastructure and communication facilities being

available.

2.2 Nature of the Project :

The project, by nature, will be a software developing firm. However,

it will also go on with ICT enabled products/services.

The software and services to be developed will be sold in foreign as

well as local markets.

2.3 Organizational Setup :

The project is a Private Limited Company formed by the sponsors

having incorporation from the Registrar of Joint Stock Companies &

Firms, Government of Bangladesh.


36/81

2.4 Particulars of the Sponsors :

The project will be promoted by the following sponsors :

Name & Address Status

Engr. Bellal Hossain ShikerHouse # 8, Road # 12

Dhanmondi, Dhaka-1205

Managing Director

Engr. Faizul Hoque Shikder7D, House # 5/KhaSatmasjid Road, Mohammadpur, Dhaka.

Director

2.5 Background & experience of the promoters :

A brief description of education, technical knowhow & skills,

experience, etc. of all the promoters of the project are given

hereunder:

Engr. Bellal Hossain Shikder :

The Managing Director of the Company Engr. Bellal Hossain Shikder,

aged 39, is a B. Sc. in Civil Engineering.

He is a well experienced in Information Technology (both hardware &

software). He has been running business in this sector for more than

one year and has already achieved remarkable success. His success

in the relevant sector made him confident enough to take up a

venture in larger shape.

Engr. Bellal Hossain is a social worker and he is engaged in various

socio-cultural activities.


37/81

Engr. Faizul Hoque Shikder :

Engr. Faizul Hoque Shikder, aged 27 is a B. Sc. in Agricultural

Engineering and a Director of the Company. He is an experienced

businessman in IT sector, who has been doing this business for more

than one year.

Engr. Faizul Hoque is a young, dynamic person who is devoted to

business in IT sectors. He is very much enthusiastic and confident

about success in IT related businesses.

Engr. Faizul Hoque is a good organizer and social worker. He is a

popular person in his community and spends time to do social well

being.

2.6 Management :

The overall management and supervision of the project will be vested

with the Board of Directors. The Board of Directors will formulate

policies and will provide necessary guidelines for the day to day

operation of the project.

The managing Directors will be responsible to the Board of Directors.

He will look after the overall business affairs and administration of theproject and will provide all required logistic supports.

The Managing Director will be assisted by other directors of the

company. Besides, locally recruited managerial and technical

personnel will assist hi to run the management and operation of the

project.


38/81

3.0 TECHNICAL ASPECTS

3.1 Project Purpose and Design :

The project envisages for setting up of a Software Development

Industry producing and marketing computer software and ICT related

products/services.

The project will be equipped with machinery and equipments to be

procured from reputed suppliers/manufacturers.

While designing the project, the requirement of physical facilities has

been considered in such a manner so that the project can operate at

its optimum capacity.

The sales revenue of the project will include mainly the sales of

computer software. Besides, the project has the plan to make earning

by way of :

Software development training.

Software outsourcing.

Providing ICT services.

The fixed cost of the project has been estimated at Tk 332.55 lacs,

while the total cost thereof at Tk 366.55 lacs.


39/81

3.2 Product mix & Production Plan :

The production plan of the project is as under :

Products/Services Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

Capacity utilization 50% 55% 60% 65% 70%

Software :

a. Clinic management

b. Banking

c. Accounting

Web Solution :

a. Domain registration

b. Web page development &

designing

25

5

50

200

2000

28

6

55

220

2200

30

6

60

240

2400

33

7

65

260

2600

35

7

70

280

2800

3.3 Technology & Process :

The steps involved in developing software including different phases.

Every phase demands its own point of view and technology-based

insight into the matter. The execution begins with the study of the

requirement, which is also called the system study. After the initial

thoughts have been gathered, they are put on paper and a final

logical checkup is performed. Once the logical system is developed,the system is designed and created by programming language.

Comprehensive testing is done at the end of each subsection of the

procedure. Once the system is built, proper documentation support

and help file is provided with the system.


40/81

The following diagram shows the technical development steps of

software products :

Figure : Typical Development of Software

Initiation Use

Requirement

Specification

Acceptance

Tested System

V & V V & V

System Integration &System Tested

System

V & V V & V

Code


41/81

Since a software product has large number users, it must be properly

designed, carefully implemented and thoroughly tested. Also, a

software product consists not only of the program code but also of all

the associated documents such as requirement specification

document, design document, test document and user manuals, etc.

Further, software products are often too large to be developed by any

individual programmer. Therefore, software products are usually

developed by a Software Development Team.

The team consists of different types of personnel with different

responsibilities like Analyst, Designer, Programmer, ester and the

Project Manager. The team is led by a Tem Leader and he/she must

be an active member of the team. Typically the size of the team

depends on the versatility of the software and the deadline to be met

by the team. The team members must include a representative from

the customer side or a domain expert to guide the team in every

phase of development.

3.4 Machinery & Equipments :

A list of the machinery and equipment required for he project has

been provided in Annexure-II, the total value of which stands at

Tk 50.00 lacs.

3.5 Store & Spares :

The annual requirement of store and spares has been estimated @

0.5%, 1.0%, 1.5%, 2.0% and 2.5% of the cost of machinery &

equipment for 1st, 2nd, 3rd, 4th and 5th year of operation

respectively.


42/81

3.6 Repairs & Maintenance :

The annual cost of repairs and maintenance has been estimated

@ 0.5%, 1%, 1.5%, 2% & 2.5% from 1st to 5th year of operation,

respectively, on the value of buildings, machinery and transport/

vehicles.

3.7 Materials & Supplies :

The annual requirement of materials & supplies has been roughly

estimated at a lump sum of Tk 4.50 lacs per annum to be incurred

100% capacity level. The above cost includes some materials and

office supplies such as paper, pens, pencils, erasers, rubber stamps,

staples, stapler pins, envelopes, scotch-tapes, toners, cartridges,

printer ribbons, floppy diskettes, CD ROMs, etc.

3.8 Transport :

Provision has been kept for a sum of Tk 10.00 lacs of purchase a

microbus (9-seater) to facilitate transportation of the projects

personnel.

3.9 Furniture & Fixture :

A sum of Tk 35.00 lacs has been estimated to be incurred topurchase required furniture & fixture (setup cost), as shown in

Annesure-III

3.10 Erection & Installation :

The cost of erection & installation of the projects machinery has been

roughly estimated to be Tk. 10.00 lacs.


43/81

3.11 Utilities :

Water : There will be free supply of water at the project premises.

Power : A sum of Tk 3.00 lacs has been estimated to be incurred

annually for the electricity to be consume at 100% capacity

utilization.

Fuel & Lubricants : For this purpose, a roughly estimated amount of

Tk 1.20 lacs has been considered to be incurred.

3.12 Insurance Coverage :

The main assets of the project will have insurance coverage @ 1% of

the total cost thereof.

3.13 Manpower Requirements :

On implementation, the project will require the services of 41 hired

people and for them, a total of Tk 6.33 lacs has been estimated to be

incurred per month as shown in Annexure-VIII.

3.14 Preliminary Expenses :

A sum of Tk 152.40 lacs will need to be incurred to meet up the

primary and startup expenses as shown in Annexure-IV.

3.15 Environment & Pollution Control :

The project will have no polluting no polluting effect on the

environment. Being environment friendly in nature, it will not require

incurring any cost to have pollution control.


44/81

4.0 MARKETING ASPECTS

4.1 Product-mix:

The project has been designed to produce/develop mainly the

computer software. However, it will also produce and/or provide

some IT related products and services. A list of the product-mix of

the project is given below :

Software :


b. Banking

c. Accounting

Web Solution :


b. Web page development & designing.

4.2 Demand Analysis :

As stated earlier, the project is envisaged mainly to develop

computer software and market the same both at home and abroad.

Nowadays the computer software is becoming popular all over the

world and the demand for software is rapidly increasing day by day.

The people of the western countries are accustomed with Net

Shopping.

Software is also well known to and used by the non-resident

Bangladeshi buyers living in the western countries. The software to

be developed can be brought before these target people through Net.

In Bangladesh too, different target groups, especially the


45/81

Government Departments, Banks, Hospitals, Clinics, Departmental

Stores and other business organizations have been showing interests

and desires for relevant software. So the demand for software is

quite apparent which is showing a rapid growth as a whole.

4.3 Pricing :

The prices of the product-mix of the project are primarily determined

as follows :

Sl. Product-Mix Price (Tk)

01.

02.

Software :


b. Banking

c. Accounting

Web solution :


b. Web page development & designing

1,00,000

5,00,000

70,000

20,000

2,000

The prices of the products are changeable depending on the market

situation. The sponsors will put much emphasis on the competitive

market prices and take all possible measures to gain maximum

market share.


46/81

4.4 Sales Promotion :

To market the products/services of the project, the following

promotional activities will take place :

Introducing the products/services and their utilities through

seminar .

Aggressive marketing through talented trained and motivatedmarketing professionals.

Spread the word of ICT and its impact through expert and

renowned personalities of our country and abroad.

Advertisement through IT magazines, magazines, and daily

newspapers.

Corporate selling/direct marketing.

Word of mouth/personal selling.

4.5 Distribution Channel :

Distribution through web technology.

Direct implementation.

Distribution through software incubator BASIS/BCS.

Liaison office abroad.


47/81

5.0 SOCIO-ECONOMIC ASPECT

5.1 Employment Generation :

Upon implementation, the project will generate employment for 41

people of different categories. Thus, on the one hand, the project will

play a significant role to lessen the unemployment problem of the

country and improve the living standard of the employed people. On

the other hand, additional employment opportunity will be created for

production, supply and distribution of materials and supplies.

5.2 Contribution to GDP :

The project will contribute a sum of Tk 178.79 lacs of the Gross

Domestic Product (GDP) of the country as shown below :

(Tk in 000)

A. Net Sale revenue (4th year) : 21450

B. Inter-farm transactions :

Materials & Supplies : 293

Travelling & conveyance : 75

Repairs & maintenance : 1200

Stores & spares : 1000

Utilities : 273

Printing & stationery : 390

Postage, telephone : 75

Legal & audit fee : 65

Ad & sales promotion : 200 : 3571

C. Contribution to GDP (AB) : 17879


48/81

5.3 Foreign Exchange Earning :

The project, if implemented, will earn foreign exchange for the

country by way of developing software and exporting the same to

foreign countries, especially the USA and European countries. Thus

the project will contribute to the economic development of the

country.

5.4 Linkage Effects :

A considerable development of software & ICT services in the country

will certainly encourage some other groups to produce and supply

materials required to provide support services in this sector.


49/81

6.0 FINANCIAL ASPECTS

6.1 Assumptions for Financial Analysis :

The following assumptions have been made to conduct relevant

financial analyses :

1) The economic life of the project has been considered to be 10 years

without major replacement.

2) The software producing/developing unit will work throughout the

year.

3) The cost of inputs/materials as well as sales have been assumed

to remain constant throughout the project years on the

assumption that the increase in prices of inputs/materials will be

offset by the proportionate increase in the selling price of output.

4) There will be 5% increase in salary and wages per year and one

months salary will be given as bonus every year.

5) Deprecations are charged at the rate of 10% on machinery &

equipments and 20% on vehicles & other assets on straight-line

method.


50/81

6.2 Cost of the Project :

The total cost of the project has been estimated at Tk 366.55 lacs

which includes the projects fixed cost of Tk 332.55 lacs and total

working capital of Tk 34.00 lacs.

Out of the projects fixed cost, an amount of Tk 56.20 lacs has

already been incurred by the sponsors. The detailed description of the

project cost has been shown in AnnuxureI.

6.3 Means of finance :

(Tk. in 000)

Financing Cost incurred To be incurred Total

B. B. equity - 17961 17961

Sponsors equity 5620 13074 18694

Total capital outlay: 5620 31035 36655

6.4 Financial Performance :(Tk. in 000)


Sales revenue

Gross profit

Operating profit

Net profit

16500

8408

3015

2182

18150

7301

1830

1325

19800

7625

2075

1502

21450

8218

2585

1871

23100

8842

3124

2262


51/81

Annexure-I

COST OF THE PROJECT

&

MEANS OF FINANCE

(Tk. in "000")

A. COST OF THE PROJECT

Sl. ItemsCost already

incurred

Cost to beTotal

01.

02.

03.

04.

05.

06.

07.

08.

09.

Rent advance for 5 years (50%) :a) Corporate office (2844 sft)

b) Software laboratory (4500 sft)

Machinery & equipments

Freight & other charges (L.S)

Erection & installation (L.S)

Furniture & fixture

Transport/vehicles

Security deposits (Telephone)

Preliminary expenses(primary + startup expenses)

Contingencies

(5% on the costs to be incurred)

18000

1500

200

400

1500

-

20

200

-

3839

3500

300

600

2000

1000

40

15040

1316

5639

5000

500

1000

3500

1000

60

15240

1316

Fixed Cost of the Project: 5620 27635 33255

Total Working Capital : - 3400 3400

Total Cost of the Project : 5620 31035 36655


52/81

B. MEANS OF FINANCE / PLAN OF INVESTMENT (PROPOSED)

Sl. Cost items EEF EquitySponsors

EquityTotal

01.

02.

03.

04.

05.

06.

07.

08.

09.

10.

Rent advance for 5 years (50%) :

c) Corporate office (2844 sft)

d) Software laboratory (4500 sft)

Machinery & equipments

Freight & other charges (L.S)

Erection & installation (L.S)

Furniture & fixture

Transport/vehicles

Security deposits (Telephone)

Preliminary expenses

(primary + startup expenses)

Contingencies

(5% on the costs to be incurred)

Working Capital

-

5000

458

490

1715

490

29

7468

645

1666

5639

-

42

510

1785

510

31

7772

671

1734

5639

5000

500

1000

3500

1000

60

15240

1316

3400

Total 17961 18694 36655

Ratio of investment : 49% 51% 100%


53/81

Annexure-II

MACHINERY & EQUIPMENTS

Sl. Description of items Qty Rate (Tk.) Total (Tk.)

01. Server 03 3,75,000 11,25,000

02. Corporate office PC 12 62,500 7,50,000

03. Workstation PC 50 46,500 23,25,000

04. UPS 50 4,000 2,00,000

05. IPS 1 80,000 80,000

06. Generator 1 2,66,000 2,66,000

07. Printer 3

1,35,000

25,000

10,000

1,70,000

08. Scanner 3 10,000 30,000

09. Web camera 3 18,000 54,000

Total : - - 50,00,000


54/81

Annexure-III

FURNITURE, FIXTURE & OFFICE EQUIPMENT

Sl. Description of items Qty Rate (Tk.) Total (Tk.)

01. Corporate office :

a) Table (Computer)

b) Computer Chair

c) Table rack

d) Executive table

e) Executive chair

f) Managing director table

g) Managing director chair

h) Director table

i) Director chair

j) Thai partition with glass

k) Reception desk with sofa

l) Conference table with 20 chairs

12

12

12

10

10

1

1

1

1

-

-

Lot

8,000

6,000

3,000

15,000

10,000

50,000

20,000

30,000

15,000

L.S.

L.S.

L. S.

96,000

72,000

36,000

1,50,000

1,00,000

50,000

20,000

30,000

15,000

12,00,000

2,00,000

3,36,000

02. Laboratory :

a) Computer tables and chair

b) Reception with sofa

c) A. C

d) Telephone (mobile)

e) Fax

f) Photo copier

53

1 set

10

10

2

2

5,000

50,000

50,000

12,000

30,000

1,00,000

2,65,000

50,000

5,00,000

1,20,000

60,000

2,00,000

Total : - - 35,00,000


55/81

Annexure-IV

PRELIMINARY EXPENSES

(TK in ooo)

Sl. Particulars Total

01.

02.

03.

04.

a) Primary Expenses :

Company incorporation, trade license, consultancy,project appraisal /evaluation, documentation, etc.

b) Licensing :

Microsoft Development Network (MSDN) : 150

OracleDevelopment Suite : 800

Window

s 200 Operation System : 400(Server & Professional)

c) VSAT/Bandwidth/Radio Link

d) Membership with BASIS (Bangladesh Association ofSoftware Information Service)

Pre-operating & Startup Expenses :

a) Salary for 12 months (Ref: Annexure-VIII & IX)

b) Materials & Supplies for 12 months(Ref: Annexure-VIII)

c) Bandwidth charges for 12 months(128 kbps @ Tk 2,00,000/month)

Launching cost (L.S.)

Others (L.S.)

300

1350

400

20

9845

225

2400

500

200

Total : 15240


56/81


57/81

Annexure-V

WORKING CAPITAL

(Tk. in "000")

Items Tied-up period Amount

Materials & Supplies 30 days 19

Stores & Spares 180 days 125

Work in Process (WIP) 60 days 1765

Receivables 60 days 1349

Other expenses (L. S.) 30 days 142

Total Working Capital Required : 3400


58/81

Annexure-VI

EARNING FORECAST

(Tk. in "000")

Items Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

Sales Revenue 16500 18150 19800 21450 23100

Cost of Goods Sold 8092 10849 12175 13232 14258

Gross Profit 8408 7301 7625 8218 8842

Admin & Selling Expenses 5393 5471 5551 5633 5718

Operating Profit 3015 1830 2074 2585 3124

Financial Expenses - - - - -

Net Profit before Tax 3015 1830 2074 2585 3124

Income Tax - - - - -

Net Profit after Tax 3015 1830 2074 2585 3124

Bond Purchase (30%) 905 549 622 776 937

Net Profit after Bond Purchase 2110 1281 1452 1809 2187

Return on Bond (8%) 72 44 50 62 75

Net Profit after Return on Bond 2182 1325 1502 1871 2262

Ratios :

Gross Profit to Sales (%) 51 40 39 38 38

Operating Profit to Sales (%) 18 10 10 12 14

Net Profit to Sales (%) 13 07 08 09 10


59/81

Annexure-VII

SALES FORECAST

(Tk in 000)Items Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

Sales at 100% capacity 33000 33000 33000 33000 33000

Assumed capacity 50% 55% 60% 65% 70%

Sales at assumed capacity 16500 18150 19800 21450 23100

Assumption :

1) From 1st to 5th year of operation of the project, the capacities to

be utilized have been assumed to be 50%, 55%, 60%. 65% &

70% respectively.

2) Products/Services & Sales :

At 100% capacity, the sales achievement has been estimated as

follows :

Items Qty (nos) Rate(Tk) Total (Tk)

Softwares :

a. Clinic managementb. Bankingc. Accounting

Web solution :

a. Domain registrationb. Web page development &

designing

5010100

4004000

1,00,0005,00,000

70,000

20,0002,000

50,00,00050,00,00070,00,000

80,00,00080,00,000

Total : - - 3,30,00,000


60/81

Annexure-VIII

COST OF GOODS SOLD

(Tk. in "000")

Particulars Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

Materials & Supplies 220 248 270 293 315

Salary & Wages 7280 7644 8026 8427 8849

Stores & Spares 250 500 750 1000 1250

Water, Power, Fuel 210 231 252 273 294

Repairs & Maintenance 300 600 900 1200 1500

Rent, Tax, Insurance 333 333 333 333 333

Depreciation 1814 1814 1814 1814 1814

Other expenses (L.S.) 180 185 190 195 200

Total Cost of Production 10592 11555 12535 13535 14555

Add: Opening WIP (60 days) - 1765 2220 2459 2666

Total stock of WIP 10592 13320 14755 15994 17221

Less: Closing WIP (60 days) 1765 2220 2459 2666 2870

Cost of goods manufactured 8827 11100 12296 13328 14351

Add: Opening FG (30 days) - 735 986 1107 1203

Cost goods available for sales 8827 11835 13282 14435 15554

Less: Closing FG (30 days) 735 986 1107 1203 1296

Cost of Goods Sold 8092 10849 12175 13232 14258

ASSUMPTIONS :

1) A period of 60 days has been considered to determine the work

in process (WIP) based on the assumption that the development

of softwares would require 3090 days depending on their

sizes/types, thus 60 days on an average.

2) To determine the inventory of finished goods (FG), an average

period of 30 days has been considered on the assumption that

any softwares, regardless of their size or types, would require a

minimum of 30 days to market the same.


61/81

3) Capacity Utilization :

From 1st to 5th year of operation, the capacities to be utilized have

been assumed to be 50%, 55%, 60%, 65% & 70% respectively.

4) Cost of Materials and Supplies :

At 100 percent efficiency, a sum of Tk 4,50,000 has been

roughly estimated to be incurred annually in this head of

expenditure. Thus the annual cost of materials and supplies, at

the assumed capacities, would be Tk 2,25,000; Tk 2,47,500;

Tk 2,70,000; Tk 2,92,500 and Tk 3,15,000.

5) Stores and Spares :

The cost of stores and spares has been considered to be 0.5%, 1%,

1.5%, 2% & 2.5% on the value of machinery and equipments.

6) Repairs and Maintenance :

The costs for repairs and maintenance have been considered to

be 0.5%, 1%, 1.5%, 2% & 2.5% on the value of

transport/vehicles and machinery & equipments.

7) Rent, Tax, Insurance :

The cost involvement in this head of expenditure has been

considered to be 1% of the fixed cost of the project.

8) Depreciation :

Items Cost Rate Amount

Machinery & Equipments

Furniture & Fixture

Transport/Vehicles

Intangible assets

5000

3500

1000

2070

10%

20%

20%

20%

500

700

200

414

Total : - - 1814


62/81

9) Water, Power & Fuel :

a. Water : There will be free supply of water in the office/project

premises as the cost will be borne by the landlord.

b. Power : A lump sum of Tk 3,00,000 has been roughly

estimated to be incurred annual for the electricity to be

consumed at 100% capacity utilization.

c. Fuel : For this purpose, a roughly estimated amount of

Tk 1,20,000 has been considered to be incurred.

Total (a+b+c) : Tk 4,20,000 per annum at 100% capacity. Therefore

at the assumed capacities, the annual costs would be Tk 2,10,000;

Tk 2,31,000; Tk 2,52,000; Tk 2,73,000 and Tk 2,94,000 from 1st to

5th year of operation respectively.

10) Salary (Technical Personnel) :

Category/Designation No.Monthly

Salary (Tk)

Annual Salary

(Tk in 000)

Software Development :

Project Manager

Senior System AnalystSystem Administrator (network)System Analyst

Business AnalystSenior ProgrammerProgrammer

01

010501

031501

40,000

30,0001,00,000

30,000

60,0002,25,000

25,000

480

3601200360

7202700300

Sub-Total : 27 5,10,000 6120

Web Solution :Web administratorWe Page Designer

0102

20,00030,000

240360

Sub-Total : 03 50,000 600Total : 30 5,60,000 6720

(Tk in 000)

Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

SalaryIncrement (5%)Bonus (one months salary)

6720-

560

6720336588

7056353617

7409370684

7779

389681

Total : 7280 7644 8026 8427 8849


63/81

Annexure-IX

ADMINISTRATIVE & SELLING EXPENSES

(Tk. in 000)

Sl. Particulars Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

01. Directors remuneration 960 960 960 960 960

02. Administrative salary 949 997 1047 1099 1154

03. Depreciation & write-off 2634 2634 2634 2634 2634

04. Travelling & conveyance 60 65 70 75 80

05. Printing & stationery 360 370 380 390 400

06. Postage, telegram & telephone 60 65 70 75 80

07. Legal & audit fee 50 55 60 65 70

08. Ad & sales promotion (LS) 200 200 200 200 200

09. Miscellaneous expenses 120 125 130 135 140

Total : 5393 5471 5551 5633 5718

Assumptions :

01. Directors Remuneration :

An amount of Tk 80,000 per month has been considered to be

the Directors remuneration of 2 Directors. Thus, the annual

remuneration of Directors stands at Tk 12,00,000 annually.

02. Administrative Salary :

Category/Designation No.Monthly Salary

(Tk)Annual Salary

(Tk 000)

Administrative :Office Manager

AccountantReceptionistAttendant/Cleaner/SecurityDriver

01

01010401

10,000

8,0004,000

12,0004,000

120

9648

14448

Sub-Total : 04 38,000 456

Marketing :Marketing Manager

Marketing Executive

01

02

15,000

20,000

180

240

Sub-Total : 08 38,000 456

Total : 11 73,000 876


64/81

(Tk in 000)


Salary 876 876 920 966 1014

Increment (5%) - 44 46 49 51

Bonus (1 months salary) 73 77 81 85 89

Total : 949 997 1047 1099 1154

04. Depreciation and write-off :

(Tk. in 000)

Items Cost Rate Deprecation

Preliminary expenses 13170 20% 2634

Total : - - 2634


65/81

Annexure-X

BREAK-EVEN ANALYSIS

(Tk. in 000)

1.

2.

3.

Sales revenue (4th year)

Total cost of operation, admin & selling and financial expenses:

21450

Analysis of total cost Total cost Fixed cost Variable cost

Materials & SuppliesSalary and wages (Laboratory)Repairs & maintenanceTax, insurance, etc.

Water, power, fuelStores & spares

Administrative salaryPostage, telegram, tel.

Printing & stationeryConveyance & travellingDepreciation & write-off

Miscellaneous expensesLegal & audit feeAd & sales promotion

Financial expense

29384271200333

2731000

205975

39075

4448

33065200

-

---

333

--

107025

78-

4448

6665-

-

29384271200

-

2731000

98950

31275

-

264-200

-

Total : 19168 5015 13083

Break-even point (BEP) :

PV Ratio = (Sales Variable cost) / Sales

= (21450 13083)/21450 = 0.39

BEP (Sales) = Fixed cost / PV Ratio

= 5015 / 0.39

= Tk 12859 thousand i.e. 60% of assumed capacity.


66/81

Annexure-XI

CASHFLOW STATEMENT

(Tk. in 000)

A. Source of fund : Const. Yr Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

Sponsors equity

Depr. & write-off

Operating Profit

B.B. equity

Return on bond

16960

-

-

16295

-

1734

4448

3015

1666

72

-

4448

1830

-

44

-

4448

2074

-

50

-

4448

2585

-

62

-

4448

3124

-

75

Total : 33255 10935 6322 6572 7095 7647

B. Utilization of Fund :

Capital expenditure

(fixed assets)

Increase in current

assets

Buy-back of B.B. equity

Investment on bond

33255

-

-

-

-

3400

2245

905

-

-

2245

549

-

-

2245

622

-

-

2245

776

-

-

2245

937

Total : 33255 6550 2794 2867 3021 3182

Cash surplus (AB)

Opening cash balance

Closing cash balance

-

-

-

4385

-

4385

3528

4385

7913

3705

7913

11618

4074

11618

15692

4465

15692

20157


67/81

Annexure-XII

PROJECTED BALANCE SHEET

(Tk. in 000)

Items Const. Yr Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

Properties & Assets:

Current Assets :

Cash Balance

Investment On Bond

Other current assets

-

-

-

4385

905

3400

7913

1454

3400

11618

2076

3400

15692

2852

3400

20157

3789

3400Sub total : - 8690 12767 17094 21944 27346

Fixed assets :

Total Fixed Assets 33255 28807 23459 19911 15463 11015

Sub-total : 33255 28807 23459 19911 15463 11015

Total assets : 33255 37497 37126 37005 37407 38361

LIABILITIES AND

SPONSORS EQUITY :

Liabilities :

B.B. equity/share

Working capital loanOther current liabs

126295

--

15716

--

13471

--

11226

--

8981

--

6736

--

Total liabilities : 16295 15716 13471 11226 8981 6736

Sponsors equity :

Piad-up capital

Investment on bond

Retained earnings

16960

-

-

18694

905

2182

18694

1454

3507

18694

2076

5009

18694

2852

6880

18694

3789

9142

Total equity : 16960 21781 23655 25779 28426 31625

Total liabs & equity : 33255 37497 37126 37005 37407 38361


68/81

Annexure-XIII

INTERNAL RATE OF RETURN

(Tk. in 000)

Year Net Cash flow NPV disc. @ 15% NPV disc. @ 20%

0 (33255) (33255) (33255)

1 7463 6493 6217

2 6278 4746 4357

3 6522 4291 3776

4 7033 4023 3390

5-10 7572 16378 12153

11 500 108 68

Total : 2784 (3294)

IRR = 15 + (20-15) X 2784/(2784 + 3294)

= 15 + 5 X 0.4580 = 15 + 2.29

= 17.29, say 17%

Assumptions :

01. The economic life of the project has been considered to be 10 years

02. Benefit/Net Cash flow :

(Tk. in 000)

Year Operating profit Depr. & write-off Total

1 3015 4448 7463

2 1830 4448 6278

3 2074 4448 6522

4 2585 4448 7033

5 3124 4448 7572

03. Salvage Value :

(Tk. in 000)

Item Total value % of recovery Recoverable

Machinery 5000 10% 500

Total : - - 500


69/81

Annexure-XIV

DEBT-SERVICE COVERAGE RATIO

(Tk. in 000)

A. Income Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

Net profit after

return on bond2182 1325 1502 1871 2262

Depreciation &

write-off4448 4448 4448 4448 4448

Total : 6630 5773 5950 6319 6710

B. Liabilities :

Buy-back of B.B. equity 2245 2245 2245 2245 2245

Total : 2245 2245 2245 2245 2245

C. Debt-service coverage

ratio (times)

2.95 2.57 2.65 2.81 2.99


70/81

Annexure-XV

PAY-BACK PERIOD

(Tk. in 000)

1. Amount to be paid (excluding value of land) : 33255

2. Amount available for recovery of the value of assets as follows :


Net profit

Depr. & write-off

2182

4448

1325

4448

1502

4448

1871

4448

2262

4448

Total : 6630 5773 5950 6319 6710

3. Pay-back Period :

Year Amount to berecovered

Amount availablefor recovery

Balance

1

2

3

4

5

33255

26625

20852

14902

8583

6630

5773

5950

6319

6710

26625

20852

14902

8583

1873

The pay-back period will be 5 years and 3 months.


71/81

Annexure-XVI

MARGIN OF SAFETY

(Tk. in 000)

Margin of Safety =Sales

Point)BreakevenatSales(Sales

=21450

12859)-(21450

=21450

8591

= 0.4005, say 40%


72/81

Annexure-XVIII

CONSTRUCTION & CIVIL WORKS

Sl. Description Area/Qty Rate (Tk) Amount (Tk)

01. Office building (50 X 30 ) - Pucca 1500 sft 985/sft 14,77,500

02. Godown (60 X 30 ) Semi-Pucca 1800 sft 535/sft 9,63,000

03. Hatchery shed (110 X 30 ) 3300 sft 375/sft 12,37,500

04. Breeding Tank (20 dia) - L.S. 2,25,000

05. Overhead Tank (15 X 12 X 8 - 6 ) - L.S. 5,50,000

06. Pump house (20 X 10 ) - Pucca 200 sft 985/sft 1,97,000

07.Labour Shed (25 X 30 ) Semi-

750 sft 350/sft 2,62,500

08.Staff Quarter (54 X 30 )- Semi-

1620 sft 535/sft 8,66,700

09. Cistern (12 X 8 ) 10 Nos. 20,000 each 2,00,000

10. Cistern (8 X 6 ) 08 Nos. 15,000 each 1,20,000

11. Spawning Tank (10 dia) 02 Nos. 50,000/tank 1,00,000

12. Incubation Jar 2 - 3 dia (RCC) 06 Nos. 10,000 each 60,000

13. Incubation Jar 2 - 3 dia (MS sheet) 06 Nos. 8,000 each 48,000

14. Nursery pond (125 X 80 X 15 ) 04 Nos. 1.25/cft 7,50,000

15. Fishery Pond (150 X 80 ) 15 depth 16 Nos. 2,00,000 32,00,000

16. Deep tube-well 01 No. 9,50,000 9,50,000

17. Boundary with barbed fencing - L.S. 8,00,000

18. Guard/Reception Room (10 X 8 ) 80 sft 985/sft 78,800

19. Miscellaneous - - 2,55,000

Total : 1,23,41,000


73/81

PART III

MEMORANDUM & ARTICLES OF ASSOCIATIONOF



74/81


75/81

SALES ESTIMATE

(Tk. in "000")


Sales at rated capacity

Assumed capacity

Sales at assumed capacity

ASSUMPTIONS:

1. At 100% capacity, the projects annual production at different stages will be

as follows:

Production of fish spawn:

a) Crap fish (200 pcs X 0.50 kg / fish / year) = 100 kg

b) Sarputi (2,000 pcs X 0.050kg / fish / year) = 100 kg

Production of fish fry:

From fish spawn, 50% will be sold out directly to the fish farmers while 50% will be kept for fry

production as follows:

a) Crap fish (50 kg spawn X 1,00,000 pcs of fry per kg) = 50,00,000 pcs

b) Sarputi (50 kg spawn X 1,00,000 pcs of fry per kg) = 50,00,000 pcs

Production of fish:

From fish fry, the production of fish will be made as follows:

a) Crap fish (50,00,000 pcs less sale of 47,00,000 pcs) = 3,00,000 pcs of 0.750 kg body wt.

each.

c) Sarputi (50,00,000 pcs less sale of 40,00,000 pcs) = 10,00,000 pcs of 0.200 kg body wt. each.

The above production of fish will be made under the arrangement that there will be two production

cycles in a year- each having 3000 pcs of Crap fish per pond (thus 3,00,000 pcs of fish in 50


76/81

ponds), with which a joint cultivation of 10,000 pcs of Sarputi per pond (thus 10,00,000 ocs in 50

ponds) will also be made.

2. Estimate of sales:

At 100% capacity, the sales of different products of the project have been summarized and

estimated as follows:

Production unit Fish variety Product-mix Quality Rate (Tk) Ammount

Hatchery Crap

Sarputi

Fish spawn

Fish fry

Fish spawn

Fish fry

50 kg

47,00,000 pcs

50 kg

40,00,000 pcs

3500/kg

2.50/pc.

3500/kg

0.50/pc.

Sub-Total: - - - -Fishery Crap

Sarputi

Fish

Fish

2,25,000 kg

2,00,000 kg

55/kg

60/kg

Sub-Total: - - - -

Total: - - - -

3. From 1st to 5th year of operation, the production capacity to be achieved have been assumed to be

70%, 75%, 80%, 85% & 90% respectively.


77/81

Annexure-VIII

COST OF GOODS SOLD

(Tk. in "000")

Particulars Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

Raw Materials & Supplies

Wages and Salaries

Stores and Spares

Water, Power, Fuel

Repairs & Maintenance

Rent, Tax, Insurance

Depreciation

Other expenses

Cost of goods sold

ASSUMPTIONS:

1. At 100% capacity, the annual production is 2,70,000 kg of fish (Carp & Sarputi) and 52,00,000 pcs

of fish fry (Carp & Sarputi).

2. Cost of raw materials and supply:

a) Fish feed:

For fish = 2 kg feed/kg fish X 2,70,000 kg fish X Tk 17/kg feed

= Tk 91,80,000

For fish fry = 3 kg feed / 1000 pcs fish fry X 52,00,000 pcs fish fry X Tk 15/ kg feed


78/81

Total = Tk 94,14,000

b) Medicine & Supply:

For 50 Bigha = Tk 900 / bigha X 50 Bigha X 3 times / year

(Total pond area) = Tk 1,35,000

Total (a + b) = Tk 95,49,000

Therefore, at 70%, 75%, 80%, 85% & 90% capacity utilization from 1st to 5th year of operation,

the cost of raw materials & supplies would stand at Tk 66,84,300; Tk 71,61,750;

Tk 76,39,200; Tk 81,16,650 and Tk 85,94,100 respectively.

4. Salaries & Wages:

Designation No. Monthly Salary (Tk)Annual Salary

(Tk "000")

Hatchery Officer 01 10,000 120

Hatchery Assistant 02 8,000 96

Laboratory Assistant 02 8,000 96

Feed Assistant 02 8,000 96

Water Control Assistant 02 6,000 72

Machine operator 01 3,000 36

Unskilled worker 10 20,000 240

Total: 20 63,000 756

(Tk. "000")


Salary 756 756 794 834 876

Increment (5%) - 38 40 42 44

Bonus (1 Month's Salary) 63 66 70 73 77

Total: 819 860 904 949 997

5. Stores & Spares:


79/81

Cost considered @ 0.5%, 1%, 1.5%, 2% & 2.5% on value of Machinery form 1st to 5th year

respectively.

6. Repairs & Maintenance:

Cost for repair & maintenance of machinery and bldg. estimated at 0.5%, 1%, 1.5%, 2% &

2.5% in 1st, 2nd, 3rd, 4th & 5th yearrespectively as follows:


Buildings

Machinery

Total:

7. Rent, Tax & Insurance:

It has been estimated at 1% of the total Fixed Cost of the Project (excluding the value of land).

8. Depreciation:

(Tk. in "000")

Items Cost Rate Amount

Building 5%

Machinery 10%

Transport 20%

Total: - -

9. Water, Power & Fuel:

(a) Water: Supply will be met up by sinking a submersible pump and deep tube well.

(b) Power: Supply will be obtained from PDB/REB.


80/81

Cost:

For water pump : 12 kw X 8hrs X365 days X Tk 4.10 = Tk 1,43,644

For lighting : 10 kw X 8hrs X365 days X Tk 4.10 = Tk 1,19,720

Total power cost = Tk 2, 63, 384

(d) Fuel/Lubricant: Tk 1,20,000/ Year (L.S.)

Total (a+b+c) = Tk 3,83,384 annually at 100% capacity utilization.

Therefore, at 70%, 75%, 80%, 85% & 90% capacity utilization, the costs would take place as

follows:

1st Year

2nd Year

3rd Year

4th Year

5th Year


81/81

Annexure-X

BREAK-EVEN ANALYSIS

(Tk. in 000)

1.

2.

Sales revenue (4th year)

Total cost of operation, admin & selling and financial expenses

Analysis of total cost Total cost Fixed cost Variable cost

Raw materials

Salary and wages

Repairs & maintenance

Tax, insurance, etc.

Water, power, fuel

Stores & spares

Administrative salary

Postage, telegram, tel.

Printing & stationery

Conveyance & traveling

Depreciation & write-off

Miscellaneous expenses

Legal & audit fee

Ad & sales promotion

Financial expense -

-

-

-

-

-

-

-

-

-

-

-

-

Total:

Break-even point (BEP):PV Ratio = (Sales Variable cost) / Sales

Delta System Limited

Documents

Transcript of Delta System Limited