MERGERS & ACQUISITIONS

VALUATION METHODS
1 NET ASSETS VALUATION METHOD
2 DIVIDEND VALUATION METHOD
3 BOOTSTRAPPING
4 ADD TOGETHER METHOD
5 CAPITALISATION METHOD
6 FREECASH FLOW METHOD

1 NET ASSETS VALUATION METHOD

TOTAL ASSETS X
LESS TOTAL LIABILITIES (X)
LESS INTANGIBLE ASSETS (X)
NET TANGIBLE ASSET X
DIVIDE BY NO OF ORD SHARES X
VALUE / SHARE X

2 DIVIDEND VALUATION METHOD

VALUE IS EQUAL TO PV OF ALL FUTURE DIVIDENDS DISCOUNTED AT Ke

3 BOOTSTRAPPING METHOD

LATEST PAT OF BUYER X

ADD LATEST PAT OF SELLER X
ADD POST TAX SYNERGY BENEFIT X
COMBINED PAT X
X PE RATIO OF BUYER X
 VALUE OF COMBINED CO

4 ADD TOGETHER METHOD

PRE ACQ VALUE OF BUYER X

ADD PRE ACQ VALUE OF SELLER X
ADD PV OF SYNERGY BENEFITS X
VALUE OF COMBINED CO X

5 CAPITALISATION METHOD
VALUE = NO OF SHARES X CURRENT SHARE PRICE

6 FREE CASH FLOW METHOD

THIS METHOD BELIEVES THAT VALUE IS EQUAL TO PV OF FUTURE FREE CASH FL

THERE ARE 2 APPROACHES
1 FCF CO
2 FCF EQUITY

FCF CO
SALES X
LESS CASH COSTS (X)
LESS TAX ALLOWABLE DEP (X)
OPERATING PROFIT OR PBIT X
INTEREST 0
TAXABLE PROFIT X
LESS TAX (X)
ADD BACK TAD X
LESS INVESTMENT IN NCA (X)
LESS INVESTMENT IN WC (X)
 TOTAL FCF CO
X DISCOUNT RATE X WACC
VALUE OF CO
(VALUE OF DEBT)
Ve

DIVIDEND CAPACITY
TELLS A COMPANY HOW MUCH MAXIMUM AMOUNT COMPANY CAN PAY AS DIVIDEND

FREE CASH FLOW TO EQUITY

ADD/LESS ANY OTHER INFLOWS OR OUTFLOWS
LIKE ADD TAX OR DIVIDEND / REMITANCE FROM SUBS
ISCOUNTED AT Ke
V OF FUTURE FREE CASH FLOWS

FCF EQUITY
X
(X)
(X)
X
(X)
X
(X)
X
(X)
(X)
 FCF EQUITY
X Ke INT ALREADY INCLUDED IN WACC
VALUE OF EQUITY
(-)
Ve

PANY CAN PAY AS DIVIDEND

X
X/ (X)

X
SIGRA CO LTD

Sigra Dentro
Share capital 4400 500
40c per share
No of shares 11000 1250

Sigra share price is 3.6/share

Dentro P/E ratio is 12,5% higher than Sigra P/E ratio 9

Sigra P/E ratio

Market price per share / EPS 8

EPS = PAT / No of shares

EPS = PAT - Pref Dividend / No of shares 0.45

Synerger savings 30% of Dentro equity value

Equity value of Dentro 4.5 Dentro Current share price
1250 No of shares
5625
Synerger savings 30% of Dentro equity value 1688

% Gain on Dentro Share

1. Under cash offer

Current Share Price

Cash offer 4.5
% Gain 5
11.11%

2. Under bond offer

Current share price 4.5

MV of bond 5.8 5.875
% Gain 29%
3. Share fro share exchange

Current Share Price 9 4.5x2

Combine Co share price 10.92 3.64 x 3 shares
% Gain 21%

Combine Co share price

Bootstrapping / add together / FCF

ADD TOGETHER METHOD

PRE ACQ VALUE OF BUYER 39600 (3,6 x 11000 shares)

ADD PRE ACQ VALUE OF SELLER 5625 (4.5 x 1250 shares)
ADD PV OF SYNERGY BENEFITS 1688
VALUE OF COMBINED CO 46913

Div combined no of shares 12875

(11000shares + 1250shares/2*3)

Combined co share price/share 3.64

share price

1 2 3 kd - Reedeemable debt through IRR

Int 2 2 2
Redem 100 0 1
NCF 2 2 102 MV -104
DF (kd) 0.962 0.925 0.889 Int 6
PV 1.924 1.85 90.678 Red
-104 6
MV of bond 94.5 DF 6% 1 0.943
PV -104 5.658

NPV -4.074

DF 4% 1 0.962
PV -104 5.772

NPV 1.556
e debt through IRR

2 3

6 6
 100
6 106
0.889 0.839
5.334 88.934

0.925 0.889
5.55 94.234
PURSUITS CO

FREE CASH FLOW TO FIRM METHOD SHALL BE USED TO ESTIMATE VALUE OF FOLDER & THE COMB

FCF CO 1
SALES X 17,115
LESS CASH COSTS (X)
LESS TAX ALLOWABLE DEP (X)
OPERATING PROFIT OR PBIT X 5,477
INTEREST 0
TAXABLE PROFIT X 5,477
LESS TAX (X) - 1,534
ADD BACK TAD X
LESS INVESTMENT IN NCA (X) - 213
LESS INVESTMENT IN WC (X)
TOTAL FCF CO 3,730
X DISCOUNT RATE X WACC 0.885
VALUE OF CO 3,301
(VALUE OF DEBT)
Ve

WACC OF FODDER 13%

ke x E/E+D + kd(1-t) x D / E+D

ke 4.5 + 6 x 1.53 13
kd(1-t) 9%- (1-.28) 7
E 90
D 10
LUE OF FOLDER & THE COMBINED CO

2 3 4 5-&
18,142 19,230 20,384

5,805 6,154 6,523

5,805 6,154 6,523

- 1,626 - 1,723 - 1,826

- 226 - 239 - 254

3,954 4,191 4,443 4,576

0.783 0.693 0.613 6.130 6.130
3,096 2,905 2,723 28,051

PV 40,076
Value of debt - 9,007
Value of equity 31,069
LAMRI CO LTD

EXPECT REVENUE TO INCREASE TO 80M - INCREASE OF 20% FROM CURRENT YR

CURRENT YEAR REVENUE =

STRYMON
PRODUCTION 3000units
VC 12 per unit 36000
FC 2.1M 21000
57000
SELL TO MANGOLIA -57000
PROFIT NIL

MANGOLIA
Cost 57000
FC 15000
Assemble 8 per unit 24000
TOTAL COST 96000
Selling price 50 per unit 150000
Profit 54000
Tax -11880
PAT 42120

DIVIDEND CAPACITY
FREE CASH FLOW TO EQUITY X
ADD/LESS ANY OTHER INFLOWS OR OUTFLOWS X/ (X)
LIKE ADD TAX OR DIVIDEND / REMITANCE FROM SUBS

FC TO EQUITY
 FCF EQUITY M
SALES X 80
LESS CASH COSTS (X)
LESS TAX ALLOWABLE DEP (X)
OPERATING PROFIT OR PBIT X 24
INTEREST (X) -2.8
TAXABLE PROFIT X 21.2
LESS TAX (X) -5.94
ADD BACK TAD X
LESS INVESTMENT IN NCA (X) -7.84
LESS INVESTMENT IN WC (X) -2.0
TOTAL FCF EQUITY 5.423
X DISCOUNT RATE X Ke
VALUE OF EQUITY
(-)
Ve
URRENT YR
66.666667

79800 22800 NP
Cost to Mangolia NP -9576 Tax
13224
9918 Remit

79800
15000
24000
118800
150000
31200
6864
24336

Prior TE After TE
5.43 wk1 5.43 No effect
3.159 Div from Mangolia 2.817 Add div from Mangolia &s
-0.324 Add tax (28%-22% * 54000) -0.1872 Add tax (28%-22% * 31200
-0.099 Withholding tax
8.265 7.9608
Dep Nil
Inc in Rev 3.34
4.5
7.84
 div from Mangolia &strymon
tax (28%-22% * 31200)
hholding tax
PROTEUS CO

CURRENT YR1 YR2

SALES 60,000 64,800 69,984
MATERIAL - 12,000 - 12,960 - 13,997
LABOUR - 22,000 - 23,760 - 25,661
OTHER COST - 4,000 - 4,320 - 4,666
OVERHEADS - 14,000 - -
INTEREST PAID - 2,000 - 5,850 - 5,580
MARKETING COSTS - 12,000 - 12,960
TAXABLE PROFIT 6,000 5,910 7,121
TAXATION - 1,500 - 1,478 - 1,780
RET EARNINGS 4,500 4,433 5,341

Distribution Divivend 1,108 1,335

Retained Profit 3,324 4,005

LOAN PRINCIPAL 65,000

Capital Rpmt - 3,000 - 3,000
62,000 59,000
INTEREST 9% 5,850 5,580

DEBT TO EQUITY RATIO

1 2 3
DEBT 62,000 59,000 56,000
EQUITY 19,324 23,330 28,059
DEBT / EQUITY 321% 253% 200%
NOT BREACHED BREACHED NOT BREACHED
YR3 YR4 YR5
75,583 81,629 88,160
- 15,117 - 16,326 - 17,632
- 27,714 - 29,931 - 32,325
- 5,039 - 5,442 - 5,877
- - - SUBS BEING SOLD THEREFORE NO OVERHEADS
- 5,310 - 5,040 - 4,770
- 13,997 - 15,117 - 16,326
8,407 9,774 11,229
- 2,102 - 2,444 - 2,807
6,305 7,331 8,422

1,576 1,833 2,106

4,729 5,498 6,317

- 3,000 - 3,000 - 3,000

56,000 53,000 50,000
5,310 5,040 4,770

4 5
53,000 50,000
33,557 39,873
158% 125%
BREACHED BREACHED
EFORE NO OVERHEADS WILL BE ALLOCATED
GOSLO

M
TOTAL LOAN 200M
TENOR 4 YR
INCOME 10.50% 21 9.50%
SERVICE CHARGE -0.24
NET INCOME 20.76

COLLATERAL / SECUTARISATION 190

TRANCHE A 152 15.048

TRANCHE B 19 2.09
UNRATED 19 3.622 BALANCING FIG

20.76 MAX CAN PAY

SENSITIVITY OF 1% WILL BRING A REDUCTION OF 55% IN UNRATED

MOONSTAR

COST OF PROJECT 200 180

RENTAL INCOME 22
ADMIN COST -0.2
21.8

TRANCHE A 108 11.88

TRANCHE B 27 3.24
TRANCHE C 27 3.51
UNRATED 18 3.17

21.8
 19
-0.24
18.76

15.048
2.09
1.62

18.76

LIBOR 9.5 COST OF PROJECT 200

1.5 RENTAL INCOME 20.9
11 ADMIN COST -0.2
20.7

TRANCHE A 108 11.88

TRANCHE B 27 3.24
TRANCHE C 27 3.51
UNRATED 18 2.07

20.7
CURRENCY RISK MANAGEMENT

HEDGING TECHNIQUES:
1 FORWARD EXCHANGE CONTRACTS
2 CURRENCY FUTURES
3 CURRENCY OPTIONS

FORWARD EXCHANGE CONTRACTS

FIX A RATE FOR A FUTURE TRANSACTION

CURRENCY FUTURES

1 FIND LOCK IN RATE (AVERAGE INC/DEC IN RATE)

2 64 (BORROW AMOUNT/CONT
(24000000/500000)*4/3 FIND NO OF CONTRACTS

CURRENCY OPTIONS (SPOT PRICE - LIBOR) LESS F

(100-5.1)-94.55 0.35

0.14 BASIS RISK * EXTRA MONTH

FUTURE CLOSE OUT PRICE - LIBOR IN 93.96 (SPOT-LIBOR) LESS UNUSE

12.5 CONTRACT SIZE * 1/10000

PLUS UNHEDGED RECEIPTS

504000 AMOUNT * INT RATE * TIM
47200 GAIN (DIFFERENCE IN FUTURES
456800
PAYMENTS EXPECTED PAYMENTS IN LOCAL CURRENCY
5.71%
PLUS UNHEDGED PAYMENTS
 PLUS PREMIUM PAYABLE

EXPECTED REC/PMT NO OF CONTRACTS X CONTRACT SIZE

NO OF CONTRACTS EXPECTED REC/PMT IN FC / EX PRICE / CONTRACT SIZE

UNHEDGED REC / PMTS EXPECTED REC/PMT IN FC - (NO OF CONTRACT X CONTRACT SI

PREMIUM PAYABLE NO OF CONTRACTS X CONTRACT SIZE X PREMIUM AMOUNT

BOULLAIN EURO TO US

1-Mar-20 WILL RECEIVED $18.6M ON 31 AUG 20

6 MONTHS

FWD EXC CONTRACT 16.2359

FUTURES TODAY IS 1 MARCH

30-Mar 1M 1.1476
30-Jun 4M 1.1449
30-Sep 7M 1.1422 0.0027 3M 0.0009

LOCK IN RATE 1.1431

1 FIND LOCK IN RATE (AVERAGE INC/DEC IN RATE)

2 FIND EXPECTED RECEIPTS/PAYMENTS USING THE LOCK IN RAT
3 FIND NO OF CONTRACTS

EXP REC 16.2715

NO OF CONTRACTS 81.36 WRITE DOWN TO 81 CONTRACTS

CURRENCY OPTIONS
WE ARE RECEIVING $ (SELLING $) BUT THE CONTRACT SIZE IN EURO (BUYING EURO), THEREFORE IT

EXERCISE PRICE 0.77

RECEIPTS EXPECTED RECEIPTS IN LOCAL CURRENCY

USING EX PRICE
PLUS UNHEDGED RECEIPTS
LESS PREMIUM PAYABLE

EXPECTED REC/PMT NO OF CONTRACTS X CONTRACT SIZE

16.2

NO OF CONTRACTS EXPECTED REC/PMT IN FC / EX PRICE / CONTRACT SIZE

81.4361
TAKE 81 CONTRACT

UNHEDGED REC / PMTS EXPECTED REC/PMT IN FC - (NO OF CONTRACT X CONTRACT SI

0.0996
SPOT RATE 6M BUYING 0.8729
0.08694

PREMIUM PAYABLE NO OF CONTRACTS X CONTRACT SIZE X PREMIUM AMOUNT

0.12474
0.10866

BRANDO CO LTD
$36M LOAN
TODAY 1-Nov
LOAN 31-Jan 3 MONTHS INT RATE INCREAS
REPAY 31-May 4 MONTHS LIBOR + 0.4

FRA 3-7 MONTHS 5.90%

FORWARD RATE AGREEMENT

ACTUAL COST OF BORROWING 0.84 (36*7%*4/12)
GAIN/LOSS DUE TO FRA -0.084
NET COST 0.756

EFFECTIVE ANNUAL INT RATE 6.3%

FUTURES

1. NO OF CONTRACTS 96 (36/0.5*4/3)
2. BASIS RISK 0.35 (SPOT - LIBOR) LESS FUTURE PRICE
3. UNUSED BASIS 0.14 BASIS RISK * EXTRA MONTH / TOTAL
4. FUTURE CLOSE OUT PRICE 93.26 INT RATE ARE INC BY 6.6%
5. TICK 12.5 CONTRACT SIZE * 1/10000*3/12
6. OUTCOME OF HEDGE

ACTUAL COST OF BORROWING 0.84 36*7%*4/12

ADD/LESS GAIN OR LOSS DUE TO FUTURES -0.0828 (DIFF OF FUTURE P
NET COST 0.7572

7. EFFECTIVE ANNUAL INT RATE 6.31%

OPTIONS

INC TO 6.6% PUT 0.087

EXERCISE PRICE OF OPTIONS 93.75 SELL NOW
FUTURE CLOSE OUT PRICE FROM FUTURES 93.26 BUY LATER
EXERCISE YES
GAIN IN BASIS POINTS IF YES 49
TOTAL GAIN 0.0588
ACTUAL COST OF BORROWING 0.84
PREMIUM PAYABLE 0.01044 PREMIUM * SPOT* NO OF CONTRAC
NET COST 0.79164
EFFECTIVE RATE 6.6%
 QUOTES

INDIRECT DIRECT

FC/LC LC/FC

DIVIDE TO CONVERT MULTIPLY TO CONVERT

LOWER RATE - BUYING LOWER RATE - SELLING
HIGHER RATE - SELLING HIGHER RATE - BUYING

W AMOUNT/CONTRACT SIZE)* TIME PERIOD OF BORROW/3

RICE - LIBOR) LESS FUTURE PRICE (GIVEN)

SK * EXTRA MONTHS / TOTAL MONTHS

IBOR) LESS UNUSEX PUT OPTION

ACT SIZE * 1/10000 * 3/12

X
NT * INT RATE * TIM
(X)
ENCE IN FUTURES X

X CALL OPTION

X
 X
X

NTRACT SIZE

ACT X CONTRACT SIZE X EX PRICE) UNHEDGED IS DEALT THROUGH FWD EXCHANGE CONTR

EMIUM AMOUNT PREMIUM HAS TO BE PAID NOW SO USE SPOT RATE FW

S 1 MARCH

PER MONTH

G THE LOCK IN RATE

O 81 CONTRACTS
 RO), THEREFORE IT IS A CALL OPTION

X 16.2

X 0.08694
(X) -0.1087
X 16.1783

NTRACT SIZE

ACT X CONTRACT SIZE X EX PRICE) UNHEDGED IS DEALT THROUGH FWD EXCHANGE CONTR

EMIUM AMOUNT PREMIUM HAS TO BE PAID NOW SO USE SPOT RATE

INT RATE INCREASE TO 6.6% SELL NOW BUY LATER - PUT OPETION
LIBOR + 0.4
 RATE IF BORROW 6.6%
WE HAVE DONE FRA @ 5.9%
THEREFORE IT’S A GAIN WE DEDUCT FROM BORROWING COST

ESS FUTURE PRICE SPOT ALWAYS 100

RA MONTH / TOTAL MONTH
C BY 6.6% SPOT - LIBOR - UNUSED BASIS
* 1/10000*3/12

(DIFF OF FUTURE PRICE & FUTURE CLOSE OUT PRICE) * SPOT * NO OF CONTRACTS * TICK

T* NO OF CONTRACT * TICK
WD EXCHANGE CONTRACT

SO USE SPOT RATE FWD EXCHANGE

WD EXCHANGE CONTRACT

SO USE SPOT RATE

SWAPS

2 CO ARE INVOLVED
EXCHANGE OR SWAP THEIR LOANS COMPRISING OF FIXED RATE & FLOATING RATE
BOTH Cos END UP GETTING LOAN AT LOWER RATE THAN THEY WOULD GET WIHTOUT

HOW TO MAKE A SWAP

STEP 1: FIND THE COMPARATIVE ADV DUE TO SWAP

MAIN CO ENTERING COUNTER PARTY (CO2)

INTO THE SWAP (CO1)
FIXED RATE X X
FLOATING RATE X X

YOU WILL D 64 (BORROW AMOUNT/CONTRACT SIZE)* TIME PERIOD

(24000000/500000)*4/3

(SPOT PRICE - LIBOR) LESS FUTURE PRICE (GIVEN)

(100-5.1)-9 0.35

0.14 MAIN CO ENTEBASIS RISK * E COUNTER PARTY (CO2)

FUTURE CLO 93.96 INTO THE SWAP(SPOT-LIBOR) LESS UNUSED BASIS

12.5 CONTRACT SIZE * 1/10000 * 3/12

LOAN RATE TAKEN (X) (X)

CANCEL FL 504000
CANCEL FIX 47200 GAIN
NET EFFECT456800
BANK FEE
EFFECTIVE 5.71%
AMOUNT * INT RATE * TIME PERIOD /12
(DIFFERENCE IN FUTURES CONTRACT PRICE & FUTU
X X
(X) (X)
X X

FITZHARRIS

STEP 1
MAIN CO ENTERING COUNTER PARTY (CO2)
INTO THE SWAP (CO1)
FITZHARRIS
FIXED RATE 4.60% 4.80%
FLOATING RATE L + 0.5% L+1.3%

IF FH TAKES FIXED & CP TAKES FLOATING

FIXED 0.2% GAIN
FLOATING 0.8% LOSS
0.6% LOSS

IF FH TAKES FLOATING & CP TAKES FIXED

FLOATING 0.8% GAIN
FIXED 0.2% LOSS
0.6% GAIN

THERFORE COMPARATIVE ADV IS IN SECOND OPTION, IE. FH TAKES FLOATING & CP TAK

STEP 2
 MAIN CO ENTERING COUNTER PARTY (CO2)
INTO THE SWAP (CO1)

LOAN RATE TAKEN (L+0.5%) -4.80%

CANCEL FLOATING RATE L+0.5% (L+0.5%)
CANCEL FIXED RATE -4.30% 4.30%
NET EFFECT -4.30% (L+1%)
BANK FEE -0.05% -0.05%
EFFECTIVE RATE OF SWAP -4.35% (L+1.05%)

BURYECS

STEP 1
MAIN CO ENTERING COUNTER PARTY (CO2)
INTO THE SWAP (CO1)
BURYECS
FIXED RATE 4.00% 5.80%
FLOATING RATE L + 0.6% L+0.4%

IF BURYEC TAKES FIXED & CP TAKES FLOATING

FIXED 1.8% GAIN
FLOATING 0.2% GAIN
2.0% GAIN

IF BURYEC TAKES FLOATING & CP TAKES FIXED

FLOATING 0.2% LOSS
FIXED 1.8% LOSS
2.0% LOSS
THERFORE COMPARATIVE ADV IS IN SECOND OPTION, IE. FH TAKES FLOATING & CP TAK

STEP 2

MAIN CO ENTERING COUNTER PARTY (CO2)

INTO THE SWAP (CO1)

LOAN RATE TAKEN -4.00% (L+0.4%)

CANCEL FLOATING RATE (L+0.4%) L+0.4%
CANCEL FIXED RATE 5.00% -5.00%
NET EFFECT L-0.6% -5%
BANK FEE -0.30% -0.20%
EFFECTIVE RATE OF SWAP L-0.9% -5.20%

LURGSHALL
 LOATING RATE
ULD GET WIHTOUT SWAP

NET BENEFIT

X
X
XX

SIZE)* TIME PERIOD OF BORROW/3

E PRICE (GIVEN)
ACT PRICE & FUTURE LOCK IN RATE) * (SPOT RATE * NO OF CONTRACTS * TICK SIZE)

NET BENEFIT

0.2% LOSS
0.8% GAIN
0.6% GAIN 0.3% TO FH & 0.3% TO CP

FLOATING & CP TAKES FIXED

BORROW @ 4.6% LESS BENEFIT OF 0.3%

NET BENEFIT

1.8% GAIN
0.2% GAIN
2.0% GAIN 60% TO BURYEC & 40% TO CP
1.2 : 0.8
FLOATING & CP TAKES FIXED

CP BORROW @ 5.8% LESS BENEFIT OF 0.8%

CK SIZE)
 ### 5.625 113.625 -Rs1.40

4.3%

-1.40

64 (BORROW AMOUNT/CONTRACT SIZE)* TIME

(24000000/500000)*4/3

(SPOT PRICE - LIBOR) LESS FUTURE PRICE (GI

(100-5. 0.35

0.14 BASIS RISK * EXTRA MONTHS / TOTAL MONT

FUTURE 93.96 (SPOT-LIBOR) LESS UNUSED BASIS

12.5 CONTRACT SIZE * 1/10000 * 3/12

5E+05 AMOUNT * INT RATE * TIME PERIOD /12
47200 GAIN (DIFFERENCE IN FUTURES CONTRACT PRICE &
5E+05

5.71%
ONTRACT SIZE)* TIME PERIOD OF BORROW/3

ESS FUTURE PRICE (GIVEN)

ONTHS / TOTAL MONTHS

USED BASIS

000 * 3/12
TIME PERIOD /12
ES CONTRACT PRICE & FUTURE LOCK IN RATE) * (SPOT RATE * NO OF CONTRACTS * T
F CONTRACTS * TICK SIZE)
US ($) INVEST IN ERAT (P)

p:$ 3.31
INDIRECT QUOTE = DIVIDE

P (M) 0 1 2 3
INVESTMENT -50
REVENUES 456800.00 #VALUE! 24.62
VC 0.00 0.00 -0.01
FC -0.75 -0.79 -0.83
TAXABLE PROFIT 456799.25 #VALUE! 23.79
TAX -91359.85 #VALUE! -4.76
365439.40 #VALUE! 19.03
TAD TS 0.9 0.9 0.9
WC -1.44 #VALUE! #VALUE! #VALUE!
WC RELEASE
SCRAP 64 (BORROW A
(24000000/500000)*4/3 -51.44 #VALUE! #VALUE! #VALUE!

(SPOT PRICE - LIBOR) LESS FUTU

(100-5.1)-94.55 0.35

0.14 BASIS RISK * EXTRA MONTHS /

FUTURE CLOSE OUT PRICE - LIBOR 93.96 2 3 (SPOT-LIBOR) LESS UNUSED BA

SALES 12.5 67000 82000 CONTRACT SIZE * 1/10000 * 3/

SP 275 288.75 300.3 312.312

INFLATION 504000 5% 4% AMOUNT * INT RATE * TIME PE
TOTAL REVENUES 47200 GAIN 24624600 (DIFFERENCE IN FUTURES CONT
456800 #VALUE! 24.6246 #VALUE!

VC 5.71% 0.059955 0.0623532 0.0648473

7.14E-07 0.004017 0.005113 #VALUE!
 0 1 2 3
NCF -51.44 7.5970625 9.6151575 12.442146
P/$ 3.31 3.2787736 3.2478418 3.1567808
REMITTED CF -15.54 2.32 2.96 3.94
ADDITIONAL TAX -6966.01 #VALUE! -0.38
AFTER TAX CONT ON IMPORTS 0.00 0.16 0.21
AFTER TAX ROYALTY
REDUNDANCY/LOST CONTR
NCF -15.54 -6963.69 #VALUE! 3.78
DF @ 14% 1 0.877193 0.7694675 0.6749715
PV -15.5408 -6108.501 #VALUE! 2.5495672

NPV #VALUE!
 CAP ALLOWANCE SCHEDULE
4

#VALUE! YR CA TS @ 20%
#VALUE! 1 4.5 0.9
-0.87
#VALUE! 2 4.5 0.9
#VALUE! 3 4.5 0.9
#VALUE! 4 4.5 0.9
0.9
WC 0 1 2
2.68 CONT ### #VALUE!
32 ### ### 3.69
#VALUE! ### #VALUE!

POT PRICE - LIBOR) LESS FUTURE PRICE (GIVEN) EXCHANGE RATE

ASIS RISK * EXTRA MONTHS / TOTAL MONTHS 0 1 2

POT-LIBOR) LESS UNUSED BASIS P/$ 3.31 3.27877 3.2478418

ONTRACT SIZE * 1/10000 * 3/12

MOUNT * INT RATE * TIME PERIOD /12

IFFERENCE IN FUTURES CONTRACT PRICE & FUTURE LOCK IN RATE) * (SPOT RATE * NO OF CONTRACTS * TIC
 1 2
TAXABLE PROFIT ### #VALUE!
4 CONV TO $ 139320 #VALUE!
49.194993
3.0682729
16.03
#VALUE! ON TAXABLE PROFIT
#VALUE!
1
CONT ON IMPORT /UNIT 10
#VALUE! UNITS 12.5
0.5920803 TOTAL CONT (P) 125
#VALUE! CONV 0.00
CONTR AFTER TAX 0.00
 3 4
24.62 #VALUE!
#VALUE!
#VALUE!

3 4

3.15678 3.06827

O OF CONTRACTS * TICK SIZE)

 3 4
23.79 #VALUE!
7.53699 #VALUE!

2 3 4
10.5 10.92 11.3568
67000 82000 CONTRACT SIZE * 1/10000 * 3/12
703500 895440 #VALUE!
0.22 0.28 #VALUE!
0.16 0.21 #VALUE!
TODAY 1.2.08
ST LOAN FROM 1.5.08 3 ST LOAN
TO 1.9.08 4 INV

BORROW @ 5,9+0.4 6.3

FRA & FUTURES

FRA
NET PMT 461600
EFF INT RATE 5.77%

FUTURES

NO OF CONTRACTS 64 (BORROW AMOUNT/CO

(24000000/500000)*4/3

BASIS RISK (SPOT PRICE - LIBOR) LE

(100-5.1)-94.55 0.35

UNUSED BASIS 0.14 BASIS RISK * EXTRA MO

FUTURE CLOSE OUT PRICE - LIBOR INC 93.96 (SPOT-LIBOR) LESS UNU

TICK SIZE 12.5 CONTRACT SIZE * 1/10

OUTCOME OF HEDGE IN CASE OF LIBOR INC

ACTUAL COST OF BORROWING 504000 AMOUNT * INT RATE *
GAIN/LOSS DUE TO FRA 47200 GAIN (DIFFERENCE IN FUTUR
NET COST 456800

EFF INT RATE 5.71%

HEDGING STRATEGY ON INV 18M

FRA 337500
NET RETURN 378750
EFF INT RATE 5.05%

OPTIONS IF LIBOR DEC TO 4.5%

EXERCISE PRICE OF OPTION 94.75

FUTURE CLOSE OUT PRICE 95.45

EXERCISE Y

GAIN IN BASISI POINT IF YES 70

TOTAL GAIN 52500 GAIN IN BASIS PTS * NO
ACTUAL RETURN ON INV FROM FUTURE 315000
PREMIUM PAYABLE 22350 COST (PREMIUM RATE * SPO
NET RETURN 345150
EFFECTIVE INT RATE 4.60%
 24M SELL NOW BUY LATER
18M 7 TO 5

(BORROW AMOUNT/CONTRACT SIZE)* TIME PERIOD OF BORROW/3

(SPOT PRICE - LIBOR) LESS FUTURE PRICE (GIVEN)

BASIS RISK * EXTRA MONTHS / TOTAL MONTHS

(SPOT-LIBOR) LESS UNUSED BASIS

CONTRACT SIZE * 1/10000 * 3/12

AMOUNT * INT RATE * TIME PERIOD /12

(DIFFERENCE IN FUTURES CONTRACT PRICE & FUTURE LOCK IN RATE) * (SPOT RATE * NO OF CONTRACTS * T
GAIN IN BASIS PTS * NO OF CONTRACTS * TICK SIZE

(PREMIUM RATE * SPOT * NO OF COST * TICK SIZE

NO OF CONTRACTS * TICK SIZE)
HOME TURKISH TL
INV URKISTAN D

RATE TL/D DIRECT QUOTE MULTIPLY

CAPITAL ALLOWANCE SCHEDULE

Y TAD TS @ 20%
1 55 11
2 55 11
3 55 11
4 55 11

FOREIGN EXCHANGE RATE

0 1 2 3 4
TL/D 3.82 4.15 4.51 4.9 5.33

NPV 0 1 2 3 4
INV -220
CONTRIBUTION 44 55.2 185.2 464
FC -74.00 -93.00 -116.00 -145.00
TAD -55.00 -55.00 -55.00 -55.00
ROYALTY -2.50 -2.63 -2.76 -2.89
TAXABLE PROFIT -220 -87.50 -95.43 11.44 261.11
TAX @ 20% 0.00 0.00 0.00 -17.92
WC -0.88 -0.224 -2.6 -5.576
WC REC 9.28
SCRAP 0
ADD BACK TAD 55 55 55 55
NCF -220.88 -32.72 -43.02 60.87 307.46
EXC RATE 3.82 4.15 4.51 4.9 5.33
REMITED CF TO TURKISH -843.76 -135.8 -194.04 298.252 1638.77
ADDITIONAL TAX 0 0.00 0.00 0.00 0.00
AFTER TAX CONT ON IMP 0 0.00 0.00 0.00 0.00
AFTER TAX ON ROYALTY 8.82 10.06 11.48 13.11
RED/LOST CONT AFTER TAX 0 0.00 0.00 0.00 0.00
REMITED CF TO TURKISH -843.76 -126.99 -183.98 309.7318 1651.88

Rs20.79
 WC 0 1 2 3
0.88 1.104 3.704 9.28
0.88 0.224 2.6 5.576

-171.48 89.62

1 2 3 4
ROYAL PAID (D) -2.50 -2.63 -2.76 -2.89
EXC RATE 4.15 4.51 4.9 5.33
ROYAL (TL) -10.375 -11.839 -13.506 -15.425
AFTER TAX 8.81875 10.0629 11.4798 13.1116
 4
0
-9.28