Cost of Project (in millions)

Land 1.5
Building 2.5
Euipment 1
Misc Fixed Assets 0.5
Preliminary Exp 0.2
Preoperative Exp 1
Contingency Margin 0
Working Capital Margin 0
6.7

Means of Finance

Share Capital 4.2

Long Term Loans 2.5
Short Term Loans 0
6.7
 INTEREST ON TERM LOANS

Loan O/s at Beginning of the year Interest Rate Interest to be paid

Construction Period 2.5 13.00% 0

Year 1 2.5 13.00% 0.325
Year 2 2.25 13.00% 0.2925
Year 3 2 13.00% 0.26
Year 4 1.75 13.00% 0.2275
Year 5 1.5 13.00% 0.195
Year 6 1.25 13.00% 0.1625
Year 7 1 13.00% 0.13
Year 8 0.75 13.00% 0.0975
Year 9 0.5 13.00% 0.065
Year 10 0.25 13.00% 0.0325
Principal Paid Total Amount paid Loan O/s at the end

0 0 2.5
0.25 0.575 2.25
0.25 0.5425 2
0.25 0.51 1.75
0.25 0.4775 1.5
0.25 0.445 1.25
0.25 0.4125 1
0.25 0.38 0.75
0.25 0.3475 0.5
0.25 0.315 0.25
0.25 0.2825 0
DEPRECIATION

Basic Cost Preoperative Total

Building 2.5 0.70 3.20 0.11
Equipment 1 0.20 1.20 0.10
Misc Fixed Assets 0.5 0.10 0.60 0.03
4 1.00 5.00 0.23

Year 1 Year 2 Year 3 Year 4 Year 5

Building 10% 0.32 0.32 0.32 0.32 0.32
Equipment & Fixed Assets 10% 0.18 0.18 0.18 0.18 0.18
0.50 0.50 0.50 0.50 0.50

Deparication Schedule for Company Law Purpose(Straight Line Method)

Building(3.34%) 0.11
Plant & Machinery(8.09%) 0.10
Miscellaneous fixed Assets(5.15%)
0.03
Annual deprication 0.23

Depriciation Schedule for Income Tax Purpose (Written Down Value Method)
I II III IV V
Building(10%) 0.32 0.29 0.26 0.23 0.21
Plant & Machiney and 0.6 0.40 0.27 0.18 0.12
Misc. Fixed Assets (33 1/3%)
Total 0.92 0.69 0.53 0.41 0.33

0.92 0.69 0.53 0.41 0.33

Year 6 Year 7 Year 8 Year 9 Year 10
0.32 0.32 0.32 0.32 0.32
0.18 0.18 0.18 0.18 0.18
0.50 0.50 0.50 0.50 0.50

VI VII VIII IX X
0.19 0.17 0.15 0.14 0.12
0.08 0.05 0.04 0.02 0.02

0.27 0.22 0.19 0.16 0.14

0.27 0.22 0.19 0.16 0.14

Tax Calculations

Year 1 Year 2 Year 3 Year 4 Year 5

PBT 0.29 0.47 0.76 1.03 1.32
Add : Depreciation for Company Law 0.23 0.23 0.23 0.23 0.23
Total 0.52 0.70 0.99 1.26 1.55
Less: Depriciation for Tax Purposes 0.92 0.69 0.53 0.41 0.33
-0.40 0.01 0.46 0.85 1.22
Less: Unabsorbed depreciation of
earlier year - - 0.39 - -
Gross Total Income - - 0.07 0.85 1.22

Less deductions for newly set up

industrial undertaking under section
80I for 10 years from the initial year
@30% of gross total income - - 0.02 0.26 0.37
Total Income - - 0.05 0.60 0.86
Tax @40% of total income - - 0.02 0.24 0.34

0.00 0.00 0.02 0.24 0.34

Year 6 Year 7 Year 8 Year 9 Year 10
1.66 2.02 2.49 2.85 3.33
0.23 0.23 0.23 0.23 0.23
1.89 2.25 2.72 3.08 3.56
0.27 0.22 0.19 0.16 0.14
1.62 2.03 2.53 2.92 3.42

- - - - -
1.62 2.03 2.53 2.92 3.42

0.49 0.61 0.76 0.88 1.03

1.13 1.42 1.77 2.04 2.39
0.45 0.57 0.71 0.82 0.96

0.45 0.57 0.71 0.82 0.96

Profit and Loss Statement
Year 1 Year 2 Year 3

Installed Capacity (MT) 7500 7500 7500

Production in the year (MT) 3000 3300 3630
Capacity Utilization % 0.40 0.44 0.48
Sales Realization 12.45 13.70 15.06
Cost of Sales
Raw Materials (Coal, Limestone) 8.78 9.66 10.63
Power 0.50 0.55 0.50
Wages & salaries 1.20 1.32 1.45
Overheads 0.50 0.53 0.55
Selling Expenses
Administration Expenses 0.10 0.11 0.11
Selling Expenses 0.50 0.53 0.55
Total Expenditure 11.58 12.69 13.79
Gross Profit Before Depriciation,
Interest and Tax 0.87 1.01 1.27
Interest on Financial Expenses
Interest on Term Loans 0.33 0.29 0.26
Depriciation 0.23 0.23 0.23
Operating Profit 0.31 0.49 0.78
Preliminary Exp Written off 0.02 0.02 0.02
Profit Before Tax 0.29 0.47 0.76
Tax 0.00 0.00 0.02
Profit After Tax 0.29 0.47 0.74
Less Dividend 0.00 0.00 0.00
Retained Profit 0.29 0.47 0.74
Add Depriciation 0.23 0.23 0.23
Add Preliminary expenses 0.02 0.02 0.02
Net Cash Accrual 0.54 0.72 0.99
Present Value (@13%) 0.48 0.56 0.69

Net NPV 0.05

BENEFIT COST RATIO 1.01

NBCR=BCR-1 0.01

Sales 12.45
Fixed Cost 2.32
Variable Cost 9.26
Depreciation 0.23

Fixed Expenses 2.55

Contribution Ratio 0.26
Accounting BEP 9.95

Payback Period 8 years

IRR 13.15%
 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

7500 7500 7500 7500 7500 7500 7500

3993 4393 4833 5317 5848 6433 7076
0.53 0.59 0.64 0.71 0.78 0.86 0.94
16.57 18.23 20.06 22.07 24.27 26.70 29.37

11.69 12.86 14.15 15.57 17.12 18.84 20.72

0.50 0.50 0.50 0.50 0.50 0.50 0.50
1.60 1.76 1.93 2.13 2.34 2.57 2.83
0.58 0.61 0.64 0.67 0.70 0.74 0.78

0.12 0.12 0.13 0.13 0.14 0.15 0.16

0.58 0.61 0.64 0.67 0.70 0.74 0.78
15.06 16.46 17.99 19.67 21.51 23.53 25.76

1.51 1.77 2.07 2.40 2.76 3.16 3.61

0.23 0.20 0.16 0.13 0.02 0.07 0.03

0.23 0.23 0.23 0.23 0.23 0.23 0.23
1.05 1.34 1.68 2.04 2.51 2.87 3.35
0.02 0.02 0.02 0.02 0.02 0.02 0.02
1.03 1.32 1.66 2.02 2.49 2.85 3.33
0.24 0.34 0.45 0.57 0.71 0.82 0.96
0.79 0.98 1.21 1.45 1.78 2.03 2.37
0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.79 0.98 1.21 1.45 1.78 2.03 2.37
0.23 0.23 0.23 0.23 0.23 0.23 0.23
0.02 0.02 0.02 0.02 0.02 0.02 0.02
1.04 1.23 1.46 1.70 2.03 2.28 2.62
0.64 0.67 0.70 0.72 0.76 0.76 0.77 6.75

Since BCR>1 & NBCR>0 therefore project is accepted

Balance Sheet
CP Year 1 Year 2 Year 3 Year 4
Liabilities
Share Capital 4.2 4.2 4.2 4.2 4.2
Reserves and Surpluses 0.29 0.76 1.50 2.29
Secured Loans 2.5 2.25 2 1.75 1.5
Total Liabilities 6.70 6.74 6.96 7.45 7.99
Assets
Fixed Assets
Gross Block 6.5 6.5 6.5 6.5 6.5
Less Accumulated Depriciation 0 0.23 0.46 0.69 0.92
Net Fixed Assets 6.5 6.27 6.04 5.81 5.58
Investment 0 0 0 0 0
Cash In Bank 0.00 0.29 0.76 1.50 2.29
Misc Expnditure and Losses
Preliminary Expenses 0.2 0.18 0.16 0.14 0.12
Total Asset 6.70 6.74 6.96 7.45 7.99
Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

4.2 4.2 4.2 4.2 4.2 4.2

3.27 4.48 5.93 7.71 9.74 12.11
1.25 1 0.75 0.5 0.25 0
8.72 9.68 10.88 12.41 14.19 16.31

6.5 6.5 6.5 6.5 6.5 6.5

1.15 1.38 1.61 1.84 2.07 2.3
5.35 5.12 4.89 4.66 4.43 4.2
0 0 0 0 0 0
3.27 4.48 5.93 7.71 9.74 12.11

0.1 0.08 0.06 0.04 0.02 0

8.72 9.68 10.88 12.41 14.19 16.31
Projected Cash Flow
Construction Period Year 1 Year 2 Year 3
Sources of Funds

Share Issue 4.2

Profit before taxation with Interest Added Back 0.62 0.76 1.02
PBT 0.291 0.47 0.76
Interest 0.325 0.2925 0.26
Depreciation 0.23 0.23 0.23
Preliminary Expenses Written Off 0.02 0.02 0.02
Increase in Secured Long Term Borrowing 2.5 0 0 0
Total 6.7 0.866 1.0076 1.27111

Disposition of Funds
Capital Expenditure for the Project 5.5
Preliminary Expenses 0.2 0 0 0
Decrease in Long Term Borrowing 0.25 0.25 0.25
Interest on Long Term Borrowings 0 0.325 0.2925 0.26
Taxation 0.00 0.00 0.02
Preoperative Expense 1
Dividend 0 0 0
Total 6.70 0.58 0.54 0.53
Opening Balance 0.00 0.29 0.76
Net Surplus/Deficit 0.00 0.29 0.47 0.74
Closing Balance 0.00 0.29 0.76 1.50
Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

1.26 1.52 1.82 2.15 2.51 2.91 3.36

1.03 1.32 1.66 2.02 2.49 2.85 3.33
0.2275 0.2 0.16 0.13 0.0208 0.065 0.0325
0.23 0.23 0.23 0.23 0.23 0.23 0.23
0.02 0.02 0.02 0.02 0.02 0.02 0.02
0 0 0 0 0 0 0
1.508859 1.773989 2.068816 2.396469 2.759246 3.162725 3.610011

0 0 0 0 0 0 0
0.25 0.25 0.25 0.25 0.25 0.25 0.25
0.2275 0.2 0.16 0.13 0.0208 0.065 0.0325
0.24 0.34 0.45 0.57 0.71 0.82 0.96

0 0 0 0 0 0 0
0.72 0.79 0.86 0.95 0.98 1.13 1.24
1.50 2.29 3.27 4.48 5.93 7.71 9.74
0.79 0.98 1.21 1.45 1.78 2.03 2.37
2.29 3.27 4.48 5.93 7.71 9.74 12.11