Working capital requirements

Item
Raw material incl. consumables
Stock-in-process
finished goods
book depots
tot. current assets
less: margin for working capital from long term sources
( 25% of total current assets)
Less: trade deficit for raw materials & consumables
Bank finance for working capital

Norms in
months
1.5
0.03
0.5
1

0.5
0.5

Yr-1
14.04
0.32
5.34
14.4
34.1

Yr-2
16.85
0.38
6.38
17.28
40.89

Yr-3
19.66
0.45
7.46
20.16
47.73

8.525
10.2225 11.9325
4.68
5.62
6.55
20.895 25.0475 29.2475

Asset Valuation for Depreciation Purposes (Rs in Millions)

Asset
Basic Cost
Land
Building
Plant and
Machinery
Miscellaneous fixed
assets

Share of
Share of
Preoperative cost Contigency margin Total
10
1.26
0.88
15
1.9
1.32

12.14
18.22

62

7.84

5.45

75.29

0.51

0.35

4.86

Depreciation schedule for company law purposes (Rs in Millions)

Building
Plant and
machinery

3.34%

0.61

7.42%

5.59

Misc fixed assets

Annual
depreciation

7.42%

0.36
6.55

Deprecitaion schedule for income tax purposes (written down value method-Rs in millions)
Year
1
2
3
4
Building
1.822
1.640
1.476
1.328
Plant and
machinery and
misc fixed assets
Total

12.021
13.843

10.218
11.8578

8.685
10.161

7.383
8.711

Sales realization
Year
InstalledCapacity
(TPA)

2880

2880

2880

2880

Capacity utilization
Production (TPA)
Sales realization

50%
1440
172.8

60%
1728
207.36

70%
2016
241.92

70%
2016
241.92

5
1.195

6
1.076

7
0.968

8
0.871

9
0.784

6.275
7.470

5.334
6.410

4.534
5.502

3.854
4.725

3.276
4.060

2880

2880

2880

2880

2880

70%
2016
241.92

70%
2016
241.92

70%
2016
241.92

70%
2016
241.92

70%
2016
241.92

10
0.706

2.784
3.490

10
2880
70%
2016
241.92

Profitability Estimates (Estimates of working results) in Rs. Million

1
2
3
A

sales realisation

Cost of Production

172.8

207.36

241.92

241.92

241.92

112.32

134.78

157.25

157.25

157.25

6.91

8.29

9.68

9.68

9.68

10

12

12.6

13.23

0.5

0.53

0.56

0.60

0.63

17.28

20.736

24.192

24.192

24.192

25.788

32.0156

7.2

7.2

6.53

5.63

4.73

interest on bank borrowing

2.72

3.26

3.8

3.8

3.8

Depreciation

6.55

6.55

6.55

6.55

6.55

Operating profit(D-E-F)

9.318

15.0056

Preliminary expenses written off

0.2

0.2

Profit/loss before tax

9.118

14.8056

Provision for tax

0.55

2.85

Profit after tax (I-J)

8.568

11.9556

Less: dividend

Retained profit (K-L)

Add:Depreciation

Raw Materials
Power
wages & salaries
Factory overheads
C

Administration & selling expenses

Administration expenses
Selling expenses (10% of A)

Gross profit before interest (A-B-C)

Tot. financial expenses

interest on term loans

Preliminary expenses written off

O

Net cash accruals

interest on term loans
DSCR
Range of DSCR

37.2414 36.60769 35.94196

20.3614 20.62769 20.86196

0.2

0.2

0.2

20.1614 20.42769 20.66196

4.97

5.48

5.92

15.1914 14.94769 14.74196

6

8.568

5.9556

6.55

6.55

6.55

6.55

6.55

0.2

0.2

0.2

0.2

0.2

15.318

12.7056

7.2

7.2

2.402203
>1.75-2.5%

9.1914 7.947692 7.741962

15.9414 14.69769 14.49196

6.53

5.63

4.73

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

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

3.8

3.8

3.8

3.8

3.8

6.55

6.55

6.55

6.55

6.55

41.44
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

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
Profit/loss before tax
Add: depreciation for
company law purposes
Less: Depreciation for
company law purposes

Less:unabsorbed
depreciation of earlier years Gross total income
Total income
Income tax @ 30%

1
9.12

2
14.8

3
20.16

4
20.43

5
20.66

6
20.86

7
21.03

6.55
15.67

6.55
21.35

6.55
26.71

6.55
26.98

6.55
27.21

6.55
27.41

6.55
27.58

13.84
1.83

11.86
9.49

10.16
16.55

8.71
18.27

7.47
19.74

6.41
21.00

5.50
22.08

1.83
1.83
0.55

9.49
9.49
2.85

16.55
16.55
4.96

18.27
18.27
5.48

19.74
19.74
5.92

21.00
21.00
6.30

22.08
22.08
6.62

8
21.16

9
21.24

10
21.29

6.55
27.71

6.55
27.79

6.55
27.84

4.73
22.98

4.06
23.73

3.49
24.35

22.98
22.98
6.90

23.73
23.73
7.12

24.35
24.35
7.31

Projected cashflow statements in Rs. Million

Construction Period
A

19.03

25.26

6.55

6.55

0.2

0.2

20.9

4.15

Source of funds
Share issue
Profit before taxation with interest added
back
Depreciation
Preliminary expenses written off
increase in borrowings
increase in borrowings for working cap
Increase in Govt. incentive loan
Total of A

46.68

36.16

Disposition of funds
Capital expenditure for project
Increase in working capital

110.5
29.42

5.85

Decrease in secured borrowings

interest on term loans
interest on bank borrowings for working
capital

2.72

3.26

Taxation

0.55

2.85

preliminary expenses

8.5
2

Dividend
Total of B

121

Opening balance of cash in hand & bank

32.69
8.5

11.96
15.3

Net surplus/ deficit (A-B)

-121

13.99

24.2

Closing balance of cash in hand & bank

-121

22.49

39.5

NPV

Rs. 121.23

10

30.49

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

6.55

0.2

0.2

0.2

0.2

0.2

0.2

0.2

0.2

4.19
41.43

29.24
36.6

35.94

35.24

34.5

33.73

32.92

32.07

-48
5.89

49.66
20.42

3.8

3.8

3.8

3.8

3.8

3.8

3.8

3.8

4.97

5.48

5.92

6.3

6.62

6.9

7.12

7.31

14.66
22.56

9.28
29.3

9.72
36.5

10.1
43.49

10.42
49.31

10.7
54.97

10.92
59.48

-36.89
63.86

26.77

27.32

26.22

25.14

24.08

23.03

22

89.38

Rs. 0.19

49.33

56.62

62.72

68.63

73.39

78

81.48

153.24

17%

Projected Balance sheets

At the end of the contsruction period

Liabilities
Share capital
Reserves and surplus
Secured Loans
Term Loans
Working capital advance
Unsecured Loans
State Gov loan
Current liabilities and provisions
trade credit
Total
Assets
Fixed assets
Less:Accumulated depreciation
Net fixed assets
Investments
Current assets,loans and advances
Raw materials
Stock-in process
Finished goods
Book debts
Cash and bank balances
Misc expenditure and losses
Preliminary expenses
Total

Years

(Rs in Millions)

50

50
8.57

50
14.53

50
23.72

50
31.66

50
39.40

60

60
20.9

56.25
25.05

48.75
29.24

41.25
29.24

33.75
29.24

11

11

11

11

11

11

121

4.68
155.15

5.62
162.45

6.55
169.26

6.55
169.70

6.55
169.94

110.5

110.5
6.55
103.95

110.5
13.11
97.39

110.5
19.66
90.84

110.5
26.22
84.28

110.5
32.77
77.73

8.5

14.04
0.32
5.34
14.4
15.3

16.85
0.38
6.38
17.28
22.56

19.66
0.45
7.46
20.16
29.3

19.66
0.45
7.46
20.16
36.5

19.66
0.45
7.46
20.16
43.49

2
121

1.8
155.15

1.6
162.44

1.4
169.27

1.2
169.71

1
169.95

110.5

10

50
45.96

50
52.35

50
57.60

50
62.72

50
66.70

26.25
29.24

18.75
29.24

11.25
29.24

3.75
29.24

0
29.24

11

11

11

11

11

6.55
169.00

6.55
167.89

6.55
165.64

6.55
163.26

6.55
163.49

110.5
39.33
71.17

110.5
45.88
64.62

110.5
52.44
58.06

110.5
58.99
51.51

110.5
65.55
44.95

19.66
0.45
7.46
20.16
49.31

19.66
0.45
7.46
20.16
54.97

19.66
0.45
7.46
20.16
59.48

19.66
0.45
7.46
20.16
63.86

19.66
0.45
7.46
20.16
70.85

0.8
169.01

0.6
167.92

0.4
165.67

0.2
163.3

0
163.53

D/E

term loan/(share capital+ incentive loan)

D/E Norm: 2:1

3:1'
Debt service coverage ratio- Servicebility of only one source of capital debt.
Cash flow statement
quantity of surplus
Cash flow: Operational and investment