PRESENTATIONON

RAINBOW PAINTS PVT LTD

GROUP: - GK.S. SCHOOL OF BUSINESS

MANAGEMENT

Assumption to FinancialFeasibility• Secured loan taken from IDBI @14% is taken against

the security of land document and repaid in 5 yearly equal installments.

• There will be 300 working days in a year.• Installed Machine capacity is up to 5,00,000 liter p.a.

and Normal Production capacity is 3,00,000 liter p.a.• We manufacture on Job work basis & so whatever is

produced is sold to concerned party, so there will be no opening & closing stock.

• Credit sales will be 80% of total sales and Credit purchase will be 60% of Total Purchase.

• Creditors will give 45 days credit period and credit allowed to debtors will be 70 days.

• Working capital is estimated on the basis of our production plan & sales estimation.

• Fixed assets are valued at historical cost less depreciation, as calculated as per SLM. Useful life is to be assumed-

• Plant & Machines - 5 Years• Building – 15 Years• Furniture – 10 Years

• Production capacity will increase as per the demand increase, it is estimated that demand is based on the order given by company.

• There are no by products or work in progress at the end of the year.

• Wastage and obsolesce of raw material is negligible.• It is estimated that Expenses will increase by 5% every

year.• It is estimated that demand will enhanced by 10% in

comparison of previous year.• Fraction of Rupee is transferred in to nearer rupee value.• We have not followed AS – 22 “Accounting for Taxes” in

our calculation.• Figures shown in project is in Rupees.

A statement showing Cost of Project

Particulars Amount (Rs)

Land Purchase 11090100

Building 4800000

Plant and machineries 2000000

Furniture and equipments 1000000

(office & factory)

Preliminary expenses 150000

Working capital (Rs. 2459816) (Round off) 2459900

Total Rs. 21500000

A statement showing Means of Finance

Particular Amount

Share capital (2000000 share of Rs.10 each fully paid)

20000000

Loan from IDBI (@14%) 1500000

TOTAL 21500000

Year Opening Balance

Interest Installment Closing Balance

1 1500000 210000 300000 1200000

2 1200000 168000 300000 900000

3 900000 126000 300000 600000

4 600000 84000 300000 300000

5 300000 42000 300000 0

Total   630000 1500000  

A statement showing Loan repayment schedule

A statement showing Sales & Production Budget ( In Ltrs)

 Particulars\ Years

Year 1 Year 2 Year 3 Year 4 Year 5

Op. stock 0 0 0 0 0

ADD: production

300000 330000 363000 399300 439230

LESS: clo. Stock

0 0 0 0 0

Sales 300000 330000 363000 399300 439230

Astatement showing Raw Material Consumed & RequieredYEAR 1 2 3 4 5

Particular Qty. Rs. Qty. Rs. Qty. Rs. Qty. Rs. Qty. Rs.Pigment

Op. stock 0 0 0 0 0 0 0 0 0 0Add: Purchase

20000 1200000 22000 1386000 24200 1597200 26620 1836780 29282 2108304

Less: Clo. Stock

0 0 0 0 0 0 0 0 0 0

R.M. Consumed

20000 1200000 22000 1386000 24200 1597200 26620 1836780 29282 2108304

ResinsOp. stock 0 0 0 0 0 0 0 0 0 0Add: Purchase

14400 432000 15840 498960 17424 574992 19166 670824 21083 780072.5

Less: Clo. Stock

0 0 0 0 0 0 0 0 0 0

R.M. Consumed

14400 432000 15840 498960 17424 574992 19166 670824 21083 780072.5

SolventsOp. stock 0 0 0 0 0 0 0 0 0 0Add: Purchase

12500 250000 13750 288750 15125 332750 16638 382662.5 18301 439230

Less: Clo. Stock

0 0 0 0 0 0 0 0 0 0

R.M. Consumed

12500 250000 13750 288750 15125 332750 16638 382662.5 18301 439230

AdditivesOp. stock 0 0 0 0 0 0 0 0 0 0Add: Purchase

5000 385000 5500 445500 6050 514250 6655 592295 7320.5 680806.5

Less: Clo. Stock

0 0 0 0 0 0 0 0 0 0

R.M. Consumed

5000 385000 5500 445500 6050 514250 6655 592295 7320.5 680806.5

 Total Cost

2267000 2619210 3019192 3482562 4008413

A statement showing Labour CostYEAR No. of

LabourWages/ day Days Labour Cost

(in Rs.)Total Cost

1 20 200 300 1200000 1200000

2 22 210 300 1386000 1386000

3 25 221 300 1653750 1653750

4 25 232 300 1736438 1736438

5 27 243 300 1969120 1969120

A statement showing Overhead Cost

Particular\ Year

1 2 3 4 5

Deprication632000 632000 632000 632000 632000

Power & Fuel Exps. 215000 248325 286815 331270 382615Repair & maintenance 75000 78750 82688 86822 91163Transportation Cost 25000 26250 27563 28941 30388Insurace (Factory) 70000 73500 77175 81034 85085Other Manufacturing 45000 51975 60030 69335 80080Packing Exps.

400000 462000 533610 616320 711850Technical Staff Salary 600000 630000 661500 694575 729304

Total Cost 2062000 2202800 2361380 2540296 2742485

A statement showing Manufacturing Overhead

Particular\ Year

1 2 3 4 5

Direct Material Cost 2267000 2619210 3019192 3482562 4008413Direct Labour Cost 1200000 1386000 1653750 1736438 1969120Overhead Cost 2062000 2202800 2361380 2540296 2742485

Total Cost 5529000 6208010 7034322 7759295 8720018

A statement showing Admin. O/HParticular\ Year

1 2 3 4 5

Interest on Loan [14%] 210000 168000 126000 84000 42000

Staff Salary 840000 882000 926100 972405 1021025

Staff Welfare Exps. 105000 110250 115763 121551 127628

Depreciation on Furnniture & Fixtures [office] & Office build. 188000 188000 188000 188000 188000

Telephone, Computer and Printing Cost 125000 131250 137813 144703 151938Electricity cost [office] 85000 89250 93713 98398 103318Insurance (office)

50000 52500 55125 57881 60775Audit Fees & Legal Charges 45000 47250 49613 52093 54698Tax Expenses

125000 131250 137813 144703 151938Miscellaneous Epxense 200000 210000 220500 231525 243101

Total Cost 1973000 2009750 2050438 2095259 2144422

A statement showing Selling & Dist. O/H

Particular\ Year

1 2 3 4 5

Advertising Cost 350000 367500 385875 405169 425427Salesmen Commission 220000 241758 282051 327985 380285

Discount 115000 126324 147378 171380 198708Distribution Exp. 45000 47250 49613 52093 54698Other S & D Cost 101500 106575 111904 117499 123374

Total Cost 730000 782832 864917 956626 1059118

A statement showing of COST SHEETParticular\ Year

1 2 3 4 5

Direct Material Cost

2267000 2619210 3019192 3482562 4008413

Direct labour Cost 1200000 1386000 1653750 1736438 1969120

PRIME COST 3467000 4005210 4672942 5218999 5977533

Factory O/H 2062000 2202800 2361380 2540296 2742485

WORK COST 5529000 6208010 7034322 7759295 8720018

Admin. O/H 1973000 2009750 2050438 2095259 2144422

COST OF PRODUCTION

7502000 8217760 9084760 9854555 10864440

ADD: op. stock of F.G.

0 0 0 0 0

LESS: closing stock of F.G.

0 0 0 0 0

COST OF SALE 7502000 8217760 9084760 9854555 10864440

Selling & Distribution O/H

730000 782832 864917 956626 1059118

COST OF GOOD SOLD

8232000 9000592 9949676 10811181 11923558

PROFIT 1668000 1889408 2755324 3962919 5206412

SALES 9900000 10890000 12705000 14774100 17129970

Cost per liter 27.4 27.3 27.4 27.1 27.1

A statement showing Working Capital Requirement

Particular \Year 1 2 3 4 5

Current assets         

 Cash 115000 132250 152088 174901 201136

Bank Balance 350000 402500 462875 532306 612152

Debtors 1848000 2032800 2371600 2757832 3197594

Prepaid Exps. 90000 94500 99225 104186 109396

Deposits (Elecricity, Telephone, VAT etc.)

100000 100000 100000 100000 100000

Total Current assets

2503000 2762050 3185787.5 3669225 4220278

LESS: Current liability

         

Creditors(R/M) 204030 235729 271727 313431 360757

O/s Wages 100000 115500 137812.5 144703 164093

O/s Salary 60000 63000 66150 69458 72930

Total Current Liability

364030 414229 475690 527591 597781

Working Capital Requirement

2138970 2347821 2710098 3141634 3622497

Margin of Safety 320846 352173 406515 471245 543375

Net Working Capital Requirement

2459816 2699994 3116612 3612879 4165872

A statement Showing Profit & Loss of Rainbow paints Pvt. Ltd.

Particular\ Year 1 2 3 4 5INCOMESSales 9900000 10890000 12705000 14774100 17129970ADD: Closing. Stock 0 0 0 0 0

LESS: Op .stock 0 0 0 0 0Other Income 0 0 0 0 0TOTAL INCOMES (A)

9900000 10890000 12705000 14774100 17129970

EXPENDITURES:R/M Cost 2267000 2619210 3019192 3482562 4008413Labour cost 1200000 1386000 1653750 1736438 1969120Factory overhead 1360000 1497300 1652205 1827263 2025399Admin. O/H 1480000 1554000 1631700 1713285 1798949S & D Overhead 730000 782832 864917 956626 1059118Insurance(Factory) 70000 73500 77175 81034 85085Insurance(Office) 50000 52500 55125 57881 60775Audit fees 45000 47250 49613 52093 54698preliminary exp. w/off 30000 30000 30000 30000 30000

TOTAL EXPENDITURES (B)

7232000 8042592 9033676 9937181 11091558

P.B.D.I.T. 2668000 2847408 3671324 4836919 6038412Less: 632000 632000 632000 632000 632000Depn. (Factory)Depn. (Office) 188000 188000 188000 188000 188000P.B.I.T 1848000 2027408 2851324 4016919 5218412Less: 210000 168000 126000 84000 42000InterestP.B.T 1638000 1859408 2725324 3932919 5176412Less: 491400 557822 817597 1179876 1552924TAX @ 30%Profit after tax 1146600 1301586 1907727 2753043 3623488

APPROPRIATIONtransferred to general reserve

458640 520634 763091 1101217 1449395

balance carried to balance sheet

687960 780951 1144636 1651826 2174093

Balance Sheet Statement of Rainbow Paints Pvt. Ltd.Particulars Year 1 Year 2 Year 3 Year 4 Year 5

I. EQUITY AND LIABILITIES

(1) Shareholders’ funds(a) Share capital 20000000 20000000 20000000 20000000 20000000(b) Reserves and surplus 1146600 1301586 1907727 2753043 3623488

21146600 21301586 21907727 22753043 23623488(2) Share application

money pending allotment

(3) Non-current liabilities(a) Long-term borrowings 1200000 900000 600000 300000 0 1200000 900000 600000 300000 0

(4) Current liabilities(a) Trade payables 204030 235729 271727 313431 360757(b) Other current liabilities 160000 178500 203963 214161 237024

364030 414229 475690 527591 597781TOTAL 22710630 22615815 22983417 23580634 24221269

II. ASSETS(1) Non-current

assets(a) Fixed assets

(i)Tangible assets 18070100 17250100 16430100 15610100 14790100(b) Non-current investments 1696600 2161492 2901015 3800064 4667517(c) Other non-current assets 120000 90000 60000 30000 0

19886700 19501592 19391115 19440164 19457617

(2) Current assets(a) Trade receivables 1848000 2032800 2371600 2757832 3197594(b) Cash and cash equivalents 785930 886923 1021477 1178452 1356662(c) Other current assets 190000 194500 199225 204186 209396

2823930 3114223 3592302 4140470 4763652TOTAL 22710630 22615815 22983417 23580634 24221269

Cash Flow Statement of Rainbow Paints Pvt. Ltd. Year 1 Year 2 Year 3 Year 4 Year 5

Particulars          Profit / (Loss) for the year 1146600 154986 606141 845316 870445Interest 210000 168000 126000 84000 300000Taxation 491400 557822 817597 817597 817597Adjustment for non-cash expenses:          Preliminary expense write off 30000 30000 30000 30000 30000Depreciation 820000 820000 820000 820000 820000Changes in operating assets & liabilities          Inventory 0 0 0 0 0Other current assets 190000 4500 4725 4961 5209Other current liabilities 160000 18500 25463 10198 22863Receivables 1848000 184800 338800 386232 439762Payables 204030 31699 35998 41703 47327Cash generated from operations 1024030 1591707 2117674 2257622 2463260Taxation paid 491400 557822 817597 817597 817597Net cash from operating activities 532630 1033885 1300077 1440025 1645663           Cash flows from investing activities          Purchase of Furniture 1000000 0 0 0 0Purchase of building 4800000 0 0 0 0Purchases of Land 11090100 0 0 0 0

Purchase of Investments 1696600 464892 739523 899049 867453Purchases of plant & equipment 2000000 0 0 0 0Net cash used in investing activities -20586700 -464892 -739523 -899049 -867453           Cash flows from financing activities          Proceeds from shareholders' contributions 20000000 0 0 0 0Interest Paid 210000 168000 126000 84000 300000preliminary expense paid 150000 0 0 0 0Proceeds from loans 1500000 0 0 0 0Repayment of loans 300000 300000 300000 300000 300000Net cash from financing activities 20840000 -468000 -426000 -384000 -600000           

Increase / (Decrease) in cash equivalents 785930 100993 134554 156976 178210

Cash & cash equivalents at beginning of year 0 785930 886923 1021477 1178452Cash & cash equivalents at end of year 785930 886923 1021477 1178452 1356662

Evaluation Of ProjectPayback Period:

Year PAT depreciation

Prelim. w/off

CFAT C.CFAT

1 1146600 820000 30000 1364600 1364600

2 1301586 188000 30000 1519586 2884186

3 1907727 188000 30000 2125727 5009913

4 2753043 188000 30000 2971043 7980956

5 3623488 188000 30000 3841488 11822444

NPV (Net Present Value):

Year Cash Flow PV @ 12% PV 0f CFAT

1 1364600 0.893 1218588

2 1519586 0.797 1211110

3 2125727 0.711 1511392

4 2971043 0.635 1886612

5 3841488 0.567 2178124

PV of Inflow 8005826

Less cost of project  21500000

NPV -13494174

IRR (Internal Rate Return):Year Cash flow PV @ 14% P.V. of cash flow

1 1996600 0.8772 1751403.509

2 2151586 0.7695 1655575.562

3 2757727 0.6750 1861387.174

4 3603043 0.5921 2133290.699

5 4473488 0.5194 2323389.488

Total 9725046.431

Year Cash flow PV @ 5% P.V. of cash flow

1 1996600 0.9901 1976831.683

2 2151586 0.9803 2109191.256

3 2757727 0.9706 2676622.657

4 3603043 0.9610 3462453.503

5 4473488 0.9515 4256370.336

Total 14481469.44

Ratio Analysis:CURRENT RATIO:

Year Current Asset Current Liability Ratio

12823930 364030 7.76

23114223 414229 7.52

33592302 475690 7.55

44140470 527591 7.85

54763652 597781 7.97

RETURN ON CAPITAL EMPLOYEDYear Net operating

profitCapital employed Ratio

1 1848000 22226600 8.31

2 2027408 22111586 9.17

3 2851324 22447727 12.70

4 4016919 23023043 17.45

5 5218412 23623488 22.08

NET PROFIT RATIO

Year NP Net Sales Ratio

1 1146600 9900000 11.58

2 1301586 10890000 11.95

3 1907727 12705000 15

4 2753043 14774100 18

5 3623488 17129970 21

RETURN ON SHAREHOLDERS FUND

Year EAT Share hold fund Ratio

11146600 21146600 5.42

21301586 21301586 6.11

31907727 21907727 8.71

42753043 22753043 12

53623488 23623488 15