COST OF PRODUCTION & PROFITABILITY STATEMENT

S. Description 1st 2nd 3rd 4th 5th 6th

No.
1 No. of working days. 300 300 300 300 300 300
2 No. of Shifts 1 1 1 1 1 1
3 Installed Capacity (In Qtl.) 5040 5400 5760 6120 6480 6840
4 Capacity Utilisation 70% 75% 80% 85% 90% 95%

(A) INCOME 5.04 5.40 5.76 6.12 6.48 6.84

(B) COST OF PRODUCTION

Raw Material
(Oil Greas, Lubricant) 0.20 0.25 0.30 0.35 0.40 0.45
Power 0.05 0.06 0.07 0.08 0.09 0.10
Wages including benefits 1.20 1.30 1.40 1.50 1.60 1.70
Repairs & Maintanance &
Stores & Spars 0.10 0.12 0.14 0.16 0.18 0.20
Insurance 0.05 0.05 0.05 0.05 0.05 0.05 .
Depreciation 0.55 0.45 0.43 0.38 0.33 0.30
Total:- 2.15 2.23 2.39 2.52 2.65 2.80

(C) ADMINISTRATIVE EXPENSES

Salary including benefits 0.20 0.21 0.22 0.23 0.24 0.25
Other Expenses 0.20 0.25 0.30 0.35 0.40 0.45
Total:- 0.40 0.46 0.52 0.58 0.64 0.70

(D) FINANCIAL EXPENSES

Interest on Term Loan 0.59 0.50 0.38 0.26 0.14 0.03
Intersst on Working Captial 0.08 0.08 0.08 0.08 0.08 0.08
Total:- 0.67 0.58 0.46 0.34 0.22 0.11

(E) GRAND TOTAL (B+C+D) 3.22 3.27 3.37 3.44 0.22 0.11
(F) OPERATING PROFIT (A-E) 1.82 2.13 2.39 2.68 3.51 3.61
(G) TAXATION 0.02 0.05 0.06 0.07 0.08 3.23
(H) PROFIT AFTER TAX 1.80 2.08 2.33 2.61 2.89 3.14
(I) CUMULATIVE PROFIT 1.80 3.88 6.21 8.82 11.71 14.85
 MAN POWER AND ANNUAL WAGE BILL
(Figures in Lacs)

No. Amount Per Annum

(A) ADMINISTRATIVE STAFF

1 Account Clerk cum Supervisior Proprietor himself
2 Peon / Watchman 1 1500.00 0.00
1 0.00
Add: 10% towards social benefits 0.02
Total:- 0.02
Say Rs. 0.20 Lacs

(Rs. 1000/- increase in every year)

(B) FACTORY STAFF
1 Skilled Workers 2 2500.00 0.60
2 Semiskilled Works 2 200.00 0.48
Total:- 4 1.08
Add: 10% towards social benefits 0.12
Total:- 1.20 Lacs
(Rs. 10000/- incrase in every year)
 CALCULATION AND ASSESSMETN OF WORKING CAPITAL
(Figures in Lacs)
S.No.Particulars Days 1st year 2nd year 3rd year 4th year 5th year 6th year
1 2 3 4 5 6 7 8 9

1 Raw Material 18 3.60 3.90 4.20 4.50 4.80 5.10

2 Finished Goods 8 1.72 1.85 1.98 2.12 2.26 2.40
3 Receivable 3 0.68 0.70 0.74 0.80 0.85 0.90
Total:- 6.00 6.45 6.92 7.42 7.91 8.40
Less:Margin Money @ 5% 0.30 0.32 0.35 0.37 0.40 0.42
Working Capital from Bank @ 95% 5.70 6.13 6.57 7.05 7.51 7.98

WORKING CAPITAL INTEREST @13%

Ist year 5.70 0.74
IInd year 6.13 0.80
IIIrd Year 6.57 0.85
IVth year 7.05 0.92
Vth Year 7.51 0.98
VIth Year 7.98 1.04

ESTIMATE OF POWER
Power required = 20 H.P.
For 8 Hrs. Shift = 20 H.P. x 0.746 x 8 hours
For 300 days. = 119.36 Units x 300 days
= 35808 Units
Rate Unit = 35808 x 5.50
Total Amount/Annum. = 1.97 Lacs
As per 100% capacity utilisation = 1.97 Lacs
Ist year at 60% = 1.18 Lacs
IInd year at 65% = 1.29 Lacs
IIIrd Year at 70% = 1.39 Lacs
IVth year at 75% = 1.48 Lacs
Vth Year at 80% = 1.58 Lacs
VIth Year at 85% = 1.68 Lacs
 CALCULATION OF DEPRECIATION
(Figure in Lacs)

WRITTEN DOWN VALUE METHOD

S.No. Particulars Cost % age Ist IInd IIIrd IVth Vth

1 Land Nil - - - - - -

2 Factory Building 3.66 10% 0.37 0.33 0.30 0.27 0.24

3 Plant & Machinery &

Misc. Fixed Assets 1.20 15% 0.18 0.15 0.13 0.11 0.09

Total:- 4.86 0.55 0.48 0.43 0.38 0.33

 ADMINISTRATIVE EXPENSES
(Figure in Lacs)

Travelling 0.15

Rent Rates & Taxes 0.05

Printing & Stationery 0.05

Legal & Audit Fees 0.03

Postage & Telegramme 0.02

Bank Charges 0.15

Miscellaneous Expenses 0.10

Telephone Expenses 0.15

Total:- 0.70

Note :- Rs. 0.10 Lacs Increase in every two years.

 INTEREST ON LOAN
(Figures in Lacs)

Amount of Loan - 5.00 Lacs No. of Installment -20

Date of Interest - 12% Period of Installment 3 months
Metetorium Period - 6 Months Amount of Installments
All Installment Shall be of Rs. 25 Lacs each

PARTICULARS LOAN REPAYMENT INTEREST TOTAL INTEREST

Ist Year
Ist Year 5.00 - 0.15
IInd Year 5.00 - 0.15
IIIrd Year 5.00 0.25 0.15
IVth Year 4.75 0.25 0.14 0.59

IInd Year
Ist Year 4.50 0.25 0.14
IInd Year 4.25 0.25 0.13
IIIrd Year 4.00 0.25 0.12
IVth Year 3.75 0.25 0.11 0.50

IIIrd Year
Ist Year 3.50 0.25 0.11
IInd Year 3.25 0.25 0.10
IIIrd Year 3.00 0.25 0.09
IVth Year 2.75 0.25 0.08 0.38

IVth Year
Ist Year 2.50 0.25 0.08
IInd Year 2.25 0.25 0.07
IIIrd Year 2.00 0.25 0.06
IVth Year 1.75 0.25 0.05 0.26

Vth Year
Ist Year 1.50 0.25 0.05
IInd Year 1.25 0.25 0.04
IIIrd Year 1.00 0.25 0.03
IVth Year 0.75 0.25 0.02 0.14

VIth Year
Ist Year 0.50 0.25 0.02
IInd Year 0.25 0.25 0.01
IIIrd Year - - -
IVth Year - - - 0.03
Total:- 1.90

CALCULATION OF D.S.C.R.
(Figures in Lacs)

S.no. Description Ist IInd IIIrd IVth Vth VIth Total

1 Net Profit 1.80 2.08 2.33 2.61 2.89 3.14 14.85

2 Interest on Term Loan 0.59 0.50 0.38 0.26 0.14 0.03 1.90

3 Depreciation 0.55 0.45 0.43 0.38 0.33 0.33 0.30

Total:- 2.94 3.03 3.14 3.25 3.36 3.50 17.05

1 Repayment of Term Loan 0.50 1.00 1.00 1.00 1.00 0.50 5.00

2 Interest on Term Loan 0.59 0.50 0.38 0.26 0.14 0.03 1.90

Total:- 1.09 1.50 1.38 1.26 1.14 0.53 6.90

Average DSCR 17.05

6.90

= 2.47:1
 CASH FLOW STATEMENT

S.no. Description Ist IInd IIIrd IVth Vth VIth

1 Opening Balance - 0.85 0.88 0.89 0.98 1.10

2 Net Profit before tax

with interest added. 2.49 2.71 2.85 3.02 3.19 3.34

3 Subsidy 2.10 - - - - -

4 Enterprenuer Contribution - - - - - -

5 Long term borrowing - - - - - -

6 Working Capital - - - - - -

7 Depreciation provision

and P & P Expenses 0.55 0.45 0.43 0.38 0.33 0.30

Total:- 5.14 4.01 4.16 4.29 4.50 4.74

1 Fixed Assets and

Capital Expenses - - - - - -

2 Increase in current assets - - - - - -

3 Repayment of long term

borrowing 0.50 1.00 1.00 1.00 1.00 0.50

4 FDR (Under Lien) 2.10 - - - - -

5 Interest 0.67 0.58 0.46 0.34 0.22 0.11

6 Taxation 0.02 0.05 0.06 0.07 0.08 0.09

7 Advance to Raw material

suppliers 1.00 1.50 1.75 1.90 2.10 2.80

8 Investment in Govt. Securities - - - - - -

Total:- 4.29 3.13 3.27 3.31 3.40 3.50

Closing Balance 0.85 0.88 0.89 0.98 1.10 1.24

 PROJECTED BALANCE SHEET
(Figures in Lacs)

S.no. Description Cost Ist IInd IIIrd IVth Vth VIth

LIABILITIES

1 Enterprenuer Capital 0.30 0.30 0.30 0.30 0.30 0.30 0.30

2 Reserve & Surplus - 1.80 3.88 6.21 8.82 11.74 14.85

3 Subsidy - 2.10 2.10 2.10 2.10 2.10 2.10

4 Long Term Loan 5.00 4.50 3.50 2.50 1.50 0.50 -

5 Working Capital 0.70 0.70 0.70 0.70 0.70 0.70 0.70

Total:- 6.00 9.40 10.48 11.81 13.42 15.34 17.95

ASSETS

1 Gross Fixed Assets 5.26 5.26 5.26 5.26 5.26 5.26 5.26

Less: Depreciation & P&P Expenses - 0.55 1.00 1.81 1.43 2.14 2.44

2 Net Fixed Assets 5.26 5.26 4.26 3.45 3.83 3.12 2.82

3 Current Assets 0.74 0.74 0.74 0.74 0.74 0.74 0.74

4 FDR (Under Lien) - 2.10 2.10 2.10 2.10 2.10 2.10

5 Advances to Raw Material

6 Suppliers - 1.00 1.50 1.90 1.75 2.10 2.80

7 Investment in Govt. securities - - 1.00 2.50 2.50 6.18 8.25

8 Cash & Bank Balance - - - - - 1.10 1.24

6.00 9.10 9.60 10.69 10.92 15.34 17.95

 SECLECTED RATIO
(Figures in Lacs)

1 DEBT EQUITY RATIO EQUITY

DEBT 1 Enterprenuer

1 Term Loan 5.00 Contribution

2 Subsidy

Total:- 5.00 Total:-

DEBT 5.00 2.08 : 1

=
EQUITY 1.00

2 BREAK EVEN POINT ANALYSIS ON 4TH YEAR WORKING (AT 75% CAPACITY)

1 Depreciation on Plant & Machinery

and Amortisation Expenses 0.38

2 Interest on Term Loan 0.26

3 Repairs and Maintanance 0.16

4 Administrative Expenses (25%) 0.58

5 Insurance Charges 0.05

Total:- 1.43

B.E.P Fixed Cost x 100 1.43 x 100 1.43

=
Fixed Cost + Profit 1.43 + 2.68 4.11

= 34.79%

B.E.P. At 80% Capacity utilisation = 34.79 x 0.75 = 26.09%

3 ENTERPRENUER'S CONTRIBUTION AS A PERCENTAGE OF PROJECT COST

COST OF PROJECT

Term Loan 5.00

Working Capital 0.70

Enterprenuer Contribution 0.30

Total:- 6.00

0.30 x 100
=
6.00

= 5%
(Figure in Lacs)

VIth

0.22

0.08

0.30
(Figure in Lacs)

Lacs
 (Figures in Lacs)

Rs. 25 Lacs each

TOTAL INTEREST
 Lacs

(Figures in Lacs)
(Figures in Lacs)
(Figures in Lacs)

0.30

2.10

2.40