Working capital requirements

Item Yr-1 Yr-2 Yr-3

Raw material incl. consumables 1.5 14.04 16.85 19.66Stock-in-process 0.03 0.32 0.38 0.45finished goods 0.5 5.34 6.38 7.46book depots 1 14.4 17.28 20.16tot. current assets 34.1 40.89 47.73

8.525 10.2225 11.9325Less: trade deficit for raw materials & consumables 0.5 4.68 5.62 6.55Bank finance for working capital 0.5 20.895 25.0475 29.2475

Norms in months

less: margin for working capital from long term sources ( 25% of total current assets)

Working capital requirements

Asset Valuation for Depreciation Purposes (Rs in Millions)

Asset Basic Cost TotalLand 10 1.26 0.88 12.14Building 15 1.9 1.32 18.22

62 7.84 5.45 75.29

4 0.51 0.35 4.86

Depreciation schedule for company law purposes (Rs in Millions)

Building 3.34% 0.61

7.42% 5.59

Misc fixed assets 7.42% 0.36

6.55

Deprecitaion schedule for income tax purposes (written down value method-Rs in millions)Year 1 2 3 4Building 1.822 1.640 1.476 1.328

12.021 10.218 8.685 7.383Total 13.843 11.8578 10.161 8.711

Sales realizationYear 1 2 3 4

2880 2880 2880 2880

Capacity utilization 50% 60% 70% 70%Production (TPA) 1440 1728 2016 2016Sales realization 172.8 207.36 241.92 241.92

Share of Preoperative cost

Share of Contigency margin

Plant and Machinery

Miscellaneous fixed assets

Plant and machinery

Annual depreciation

Plant and machinery and misc fixed assets

InstalledCapacity (TPA)

5 6 7 8 91.195 1.076 0.968 0.871 0.784

6.275 5.334 4.534 3.854 3.2767.470 6.410 5.502 4.725 4.060

5 6 7 8 9

2880 2880 2880 2880 2880

70% 70% 70% 70% 70%2016 2016 2016 2016 2016

241.92 241.92 241.92 241.92 241.92

100.706

2.7843.490

10

2880

70%2016

241.92

Profitability Estimates (Estimates of working results) in Rs. Million1 2 3 4 5

A sales realisation 172.8 207.36 241.92 241.92 241.92

B Cost of Production

Raw Materials 112.32 134.78 157.25 157.25 157.25

Power 6.91 8.29 9.68 9.68 9.68

wages & salaries 9 10 12 12.6 13.23

Factory overheads 0.5 0.53 0.56 0.60 0.63

C Administration & selling expenses

Administration expenses 1 1 1 1 1

Selling expenses (10% of A) 17.28 20.736 24.192 24.192 24.192

D Gross profit before interest (A-B-C) 25.788 32.0156 37.2414 36.60769 35.94196

E Tot. financial expenses

interest on term loans 7.2 7.2 6.53 5.63 4.73

interest on bank borrowing 2.72 3.26 3.8 3.8 3.8

F Depreciation 6.55 6.55 6.55 6.55 6.55

G Operating profit(D-E-F) 9.318 15.0056 20.3614 20.62769 20.86196

H Preliminary expenses written off 0.2 0.2 0.2 0.2 0.2

I Profit/loss before tax 9.118 14.8056 20.1614 20.42769 20.66196

J Provision for tax 0.55 2.85 4.97 5.48 5.92

K Profit after tax (I-J) 8.568 11.9556 15.1914 14.94769 14.74196

L Less: dividend 6 6 7 7

M Retained profit (K-L) 8.568 5.9556 9.1914 7.947692 7.741962

N Add:Depreciation 6.55 6.55 6.55 6.55 6.55

Preliminary expenses written off 0.2 0.2 0.2 0.2 0.2

O Net cash accruals 15.318 12.7056 15.9414 14.69769 14.49196

interest on term loans 7.2 7.2 6.53 5.63 4.73

DSCR 2.402203Range of DSCR >1.75-2.5%

6 7 8 9 10

241.92 241.92 241.92 241.92 241.92

157.25 157.25 157.25 157.25 157.25

9.68 9.68 9.68 9.68 9.68

13.89 14.59 15.32 16.08 16.89

0.67 0.71 0.75 0.80 0.84

1 1 1 1 1

24.192 24.192 24.192 24.192 24.192

35.24259 34.50787 33.73601 32.92513 32.07326

3.83 2.93 2.03 1.13 0.23 41.44

3.8 3.8 3.8 3.8 3.8

6.55 6.55 6.55 6.55 6.55 65.5

21.06259 21.22787 21.35601 21.44513 21.49326

0.2 0.2 0.2 0.2 0.2

20.86259 21.02787 21.15601 21.24513 21.29326

6.3 6.62 6.9 7.12 7.31

14.56259 14.40787 14.25601 14.12513 13.98326 136.7395

8 8 9 9 10

6.562587 6.407865 5.256006 5.125128 3.983255

6.55 6.55 6.55 6.55 6.55

0.2 0.2 0.2 0.2 0.2

13.31259 13.15787 12.00601 11.87513 10.73326

3.83 2.93 2.03 1.13 0.23

Tax Calculation

Year 1 2 3 4 5 6 7Profit/loss before tax 9.12 14.8 20.16 20.43 20.66 20.86 21.03

6.55 6.55 6.55 6.55 6.55 6.55 6.5515.67 21.35 26.71 26.98 27.21 27.41 27.58

13.84 11.86 10.16 8.71 7.47 6.41 5.501.83 9.49 16.55 18.27 19.74 21.00 22.08

- - - - - - -Gross total income 1.83 9.49 16.55 18.27 19.74 21.00 22.08Total income 1.83 9.49 16.55 18.27 19.74 21.00 22.08Income tax @ 30% 0.55 2.85 4.96 5.48 5.92 6.30 6.62

Add: depreciation for company law purposes

Less: Depreciation for company law purposes

Less:unabsorbed depreciation of earlier years

8 9 1021.16 21.24 21.29

6.55 6.55 6.5527.71 27.79 27.84

4.73 4.06 3.4922.98 23.73 24.35

- - -22.98 23.73 24.3522.98 23.73 24.35

6.90 7.12 7.31

Projected cashflow statements in Rs. MillionConstruction Period 1 2 3

A Source of funds

Share issue

19.03 25.26 30.49

Depreciation 6.55 6.55 6.55

Preliminary expenses written off 0.2 0.2 0.2

increase in borrowings

increase in borrowings for working cap 20.9 4.15 4.19

Increase in Govt. incentive loan

Total of A 0 46.68 36.16 41.43

B Disposition of funds

Capital expenditure for project 110.5

Increase in working capital 8.5 29.42 5.85 5.89

preliminary expenses 2

Decrease in secured borrowingsinterest on term loans

2.72 3.26 3.8

Taxation 0.55 2.85 4.97

Dividend

Total of B 121 32.69 11.96 14.66

Opening balance of cash in hand & bank 8.5 15.3 22.56

Net surplus/ deficit (A-B) -121 13.99 24.2 26.77

Closing balance of cash in hand & bank -121 22.49 39.5 49.33

NPV Rs. 121.23

Profit before taxation with interest added back

interest on bank borrowings for working capital

4 5 6 7 8 9 10

29.85 29.19 28.49 27.75 26.98 26.17 25.32

6.55 6.55 6.55 6.55 6.55 6.55 6.55

0.2 0.2 0.2 0.2 0.2 0.2 0.2

29.24

36.6 35.94 35.24 34.5 33.73 32.92 32.07

-48

49.66

20.42

3.8 3.8 3.8 3.8 3.8 3.8 3.8

5.48 5.92 6.3 6.62 6.9 7.12 7.31

9.28 9.72 10.1 10.42 10.7 10.92 -36.89

29.3 36.5 43.49 49.31 54.97 59.48 63.86

27.32 26.22 25.14 24.08 23.03 22 89.38 Rs. 0.19

56.62 62.72 68.63 73.39 78 81.48 153.24 17%

Projected Balance sheets

At the end of the contsruction period Years (Rs in Millions)

1 2 3 4 5LiabilitiesShare capital 50 50 50 50 50 50Reserves and surplus 8.57 14.53 23.72 31.66 39.40Secured LoansTerm Loans 60 60 56.25 48.75 41.25 33.75Working capital advance 20.9 25.05 29.24 29.24 29.24Unsecured LoansState Gov loan 11 11 11 11 11 11

4.68 5.62 6.55 6.55 6.55Total 121 155.15 162.45 169.26 169.70 169.94

AssetsFixed assets 110.5 110.5 110.5 110.5 110.5 110.5Less:Accumulated depreciation 6.55 13.11 19.66 26.22 32.77Net fixed assets 110.5 103.95 97.39 90.84 84.28 77.73InvestmentsCurrent assets,loans and advancesRaw materials 14.04 16.85 19.66 19.66 19.66Stock-in process 0.32 0.38 0.45 0.45 0.45Finished goods 5.34 6.38 7.46 7.46 7.46Book debts 14.4 17.28 20.16 20.16 20.16Cash and bank balances 8.5 15.3 22.56 29.3 36.5 43.49Misc expenditure and lossesPreliminary expenses 2 1.8 1.6 1.4 1.2 1Total 121 155.15 162.44 169.27 169.71 169.95

Current liabilities and provisions trade credit

At the end of the contsruction period Years (Rs in Millions)

6 7 8 9 10

50 50 50 50 5045.96 52.35 57.60 62.72 66.70

26.25 18.75 11.25 3.75 029.24 29.24 29.24 29.24 29.24

11 11 11 11 11

6.55 6.55 6.55 6.55 6.55169.00 167.89 165.64 163.26 163.49

110.5 110.5 110.5 110.5 110.539.33 45.88 52.44 58.99 65.5571.17 64.62 58.06 51.51 44.95

19.66 19.66 19.66 19.66 19.660.45 0.45 0.45 0.45 0.457.46 7.46 7.46 7.46 7.46

20.16 20.16 20.16 20.16 20.1649.31 54.97 59.48 63.86 70.85

0.8 0.6 0.4 0.2 0169.01 167.92 165.67 163.3 163.53

D/E term loan/(share capital+ incentive loan)

D/E Norm: 2:13:1'

Debt service coverage ratio- Servicebility of only one source of capital debt.

Cash flow statement

quantity of surplus

Cash flow: Operational and investment