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PRESENTATION

ON
RAINBOW PAINTS PVT LTD
GROUP: - G
K.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)
Loan from IDBI (@14%)
TOTAL

20000000
1500000
21500000

A statement showing Loan


repayment schedule
Year
1

Opening
Interest
Installment
Closing
Balance
Balance
1500000
210000
300000
1200000

1200000

168000

300000

900000

900000

126000

300000

600000

600000

84000

300000

300000

300000

42000

300000

630000

1500000

Total

A statement showing Sales &


Production Budget ( In Ltrs)
Particulars
\ Years
Op. stock

Year 1

Year 2

Year 3

Year 4

Year 5

ADD:
production
LESS: clo.
Stock
Sales

300000

330000

363000

399300

439230

300000

330000

363000

399300

439230

Astatement showing Raw Material Consumed


& Requiered
YEAR
Particula
r

Qty.

Rs.

Qty.

Rs.

Qty.
Pigment
0

20000

1200000

22000

1386000

20000

1200000

Op. stock
Add:
Purchase
Less: Clo.
Stock

0
14400

Rs.

Qty.

Rs.

Qty.

Rs.

24200

1597200

26620

1836780

29282

2108304

22000

1386000

24200

1597200

26620

1836780

29282

2108304

0
432000

0
15840

0
498960

0
17424

0
574992

0
19166

0
670824

0
21083

0
780072.5

R.M.
Consume
d

14400

432000

15840

498960

17424

574992

19166

670824

21083

780072.5

Op. stock
Add:
Purchase
Less: Clo.
Stock

0
12500

0
250000

0
13750

0
288750

Solvents
0
15125

0
332750

0
16638

0
382662.5

0
18301

0
439230

R.M.
Consume
d

12500

250000

13750

288750

15125

332750

16638

382662.5

18301

439230

Op. stock
Add:
Purchase
Less: Clo.
Stock

0
5000

0
385000

0
5500

0
445500

Additives
0
6050

0
514250

0
6655

0
592295

0
7320.5

0
680806.5

R.M.
Consume
d

5000

385000

5500

445500

6050

514250

6655

592295

7320.5

680806.5

Op.
stock
Add:
Purchas
e
Less:
Clo.
Stock
R.M.
Consume
d

Resins

Total Cost

2267000

2619210

3019192

3482562

4008413

A statement showing
Labour Cost
YEAR

No. of
Labour

Wages/ day Days

20

200

Labour Cost Total Cost


(in Rs.)
300
1200000
1200000

22

210

300

1386000

1386000

25

221

300

1653750

1653750

25

232

300

1736438

1736438

27

243

300

1969120

1969120

A statement showing Overhead


Cost
Particular\
Year
Deprication

632000

632000

632000

632000

632000

215000

248325

286815

331270

382615

75000

78750

82688

86822

91163

25000

26250

27563

28941

30388

70000

73500

77175

81034

85085

45000

51975

60030

69335

80080

400000

462000

533610

616320

711850

Technical
Staff Salary

600000

630000

661500

694575

729304

Total Cost

2062000

2202800

2361380

2540296

2742485

Power & Fuel


Exps.
Repair &
maintenance
Transportatio
n Cost
Insurace
(Factory)
Other
Manufacturin
g
Packing Exps.

A statement showing
Manufacturing Overhead
Particular\
Year
Direct
Material Cost
Direct Labour
Cost
Overhead
Cost
Total Cost

2267000

2619210

3019192

3482562

4008413

1200000

1386000

1653750

1736438

1969120

2062000

2202800

2361380

2540296

2742485

5529000

6208010

7034322

7759295

8720018

A statement showing
Admin. O/H

Particular\
Year

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

125000

131250

137813

144703

151938

Telephone,
Computer and
Printing Cost
Electricity cost
[office]

85000

89250

93713

98398

103318

Insurance
(office)

50000

52500

55125

57881

60775

Audit Fees &


Legal Charges

45000

47250

49613

52093

54698

125000

131250

137813

144703

151938

200000

210000

220500

231525

243101

1973000

2009750

2050438

2095259

2144422

Tax Expenses
Miscellaneous
Epxense
Total Cost

A statement showing Selling &


Dist. O/H
Particular\
Year
Advertising
Cost
Salesmen
Commission
Discount
Distribution
Exp.
Other S & D
Cost
Total Cost

350000

367500

385875

405169

425427

220000

241758

282051

327985

380285

115000

126324

147378

171380

198708

45000

47250

49613

52093

54698

101500

106575

111904

117499

123374

730000

782832

864917

956626

1059118

A statement showing of COST


SHEET

Particular\ Year
Direct Material
Cost
Direct labour Cost
PRIME COST
Factory O/H
WORK COST
Admin. O/H
COST OF
PRODUCTION
ADD: op. stock of
F.G.
LESS: closing
stock of F.G.
COST OF SALE
Selling &
Distribution O/H
COST OF GOOD
SOLD
PROFIT
SALES
Cost per liter

2267000

2619210

3019192

3482562

4008413

1200000

1386000

1653750

1736438

1969120

3467000

4005210

4672942

5218999

5977533

2062000

2202800

2361380

2540296

2742485

5529000

6208010

7034322

7759295

8720018

1973000

2009750

2050438

2095259

2144422

7502000

8217760

9084760

9854555

10864440

7502000

8217760

9084760

9854555

10864440

730000

782832

864917

956626

1059118

8232000

9000592

9949676

10811181

11923558

1668000

1889408

2755324

3962919

5206412

9900000

10890000

12705000

14774100

17129970

27.4

27.3

27.4

27.1

27.1

A statement showing Working


Capital Requirement
Particular \Year

Current assets
Cash

115000

132250

152088

174901

201136

350000

402500

462875

532306

612152

1848000

2032800

2371600

2757832

3197594

90000

94500

99225

104186

109396

100000

100000

100000

100000

100000

2503000

2762050

3185787.5

3669225

4220278

204030

235729

271727

313431

360757

O/s Wages

100000

115500

137812.5

144703

164093

O/s Salary

60000

63000

66150

69458

72930

364030

414229

475690

527591

597781

2138970

2347821

2710098

3141634

3622497

320846

352173

406515

471245

543375

2459816

2699994

3116612

3612879

4165872

Bank Balance
Debtors
Prepaid Exps.
Deposits
(Elecricity,
Telephone, VAT
etc.)
Total Current
assets
LESS: Current
liability
Creditors(R/M)

Total Current
Liability
Working Capital
Requirement
Margin of Safety
Net Working
Capital
Requirement

A statement Showing Profit &


Loss of Rainbow paints Pvt. Ltd.
Particular\ Year
INCOMES
Sales
ADD: Closing. Stock
LESS: Op .stock
Other Income
TOTAL INCOMES
(A)
EXPENDITURES:
R/M Cost
Labour cost
Factory overhead
Admin. O/H
S & D Overhead
Insurance(Factory)
Insurance(Office)
Audit fees
preliminary exp.
w/off
TOTAL
EXPENDITURES (B)
P.B.D.I.T.
Less:
Depn. (Factory)
Depn. (Office)
P.B.I.T
Less:
Interest
P.B.T
Less:
TAX @ 30%
Profit after tax
transferred to
general reserve

9900000
0

10890000
0

12705000
0

14774100
0

17129970
0

0
0
9900000

0
0
10890000

0
0
12705000

0
0
14774100

0
0
17129970

2267000
1200000
1360000
1480000
730000
70000
50000
45000
30000

2619210
1386000
1497300
1554000
782832
73500
52500
47250
30000

3019192
1653750
1652205
1631700
864917
77175
55125
49613
30000

3482562
1736438
1827263
1713285
956626
81034
57881
52093
30000

4008413
1969120
2025399
1798949
1059118
85085
60775
54698
30000

7232000

8042592

9033676

9937181

11091558

2668000
632000

2847408
632000

3671324
632000

4836919
632000

6038412
632000

188000
1848000
210000

188000
2027408
168000

188000
2851324
126000

188000
4016919
84000

188000
5218412
42000

1638000
491400

1859408
557822

2725324
817597

3932919
1179876

5176412
1552924

1907727

2753043

3623488

763091

1101217

1449395

1146600
458640

1301586
APPROPRIATION
520634

Balance Sheet Statement of Rainbow Paints


Pvt. Ltd.
Particulars

I.

EQUITY AND
LIABILITIES

(1)

Shareholders
funds

Year 1

Year 2

Year 3

Year 4

Year 5

(a) Share capital


(b) Reserves and
surplus

(2)

(3)

20000000

20000000

20000000

20000000

1146600

1301586

1907727

2753043

3623488

21146600

21301586

21907727

22753043

23623488

1200000

900000

600000

300000

1200000

900000

600000

300000

204030

235729

271727

313431

360757

160000

178500

203963

214161

237024

364030

414229

475690

527591

597781

22710630

22615815

22983417

23580634

24221269

Share application
money pending
allotment
Non-current
liabilities
(a) Long-term
borrowings

(4)

20000000

Current liabilities
(a) Trade payables
(b) Other current
liabilities

TOTAL
II.

ASSETS

(1)

Non-current
assets
(a) Fixed assets

Cash Flow Statement of Rainbow Paints Pvt.


Year 1
Particulars
Profit / (Loss) for the
year
Interest
Taxation
Adjustment for non-cash
expenses:
Preliminary expense
write off
Depreciation
Changes in operating
assets & liabilities
Inventory
Other current assets
Other current liabilities
Receivables
Payables
Cash generated from
operations
Taxation paid
Net cash from
operating activities
Cash flows from
investing activities
Purchase of Furniture
Purchase of building
Purchases of Land
Purchase of Investments
Purchases of plant &
equipment
Net cash used in
investing activities
Cash flows from
financing activities
Proceeds from
shareholders'
contributions
Interest Paid
preliminary expense
paid

Year 2

Ltd.

Year 3

Year 4

Year 5

1146600
210000
491400

154986
168000
557822

606141
126000
817597

845316
84000
817597

870445
300000
817597

30000
820000

30000
820000

30000
820000

30000
820000

30000
820000

0
190000
160000
1848000
204030

0
4500
18500
184800
31699

0
4725
25463
338800
35998

0
4961
10198
386232
41703

0
5209
22863
439762
47327

1024030
491400

1591707
557822

2117674
817597

2257622
817597

2463260
817597

532630

1033885

1300077

1440025

1645663

1000000
4800000
11090100

0
0
0

0
0
0

0
0
0

0
0
0

1696600

464892

739523

899049

867453

2000000

-20586700

-464892

-739523

-899049

-867453

20000000
210000

0
168000

0
126000

0
84000

0
300000

150000

Evaluation Of Project
Payback Period:
Year

PAT

Prelim.
w/off
30000

CFAT

C.CFAT

1146600

depreciatio
n
820000

1364600

1364600

1301586

188000

30000

1519586

2884186

1907727

188000

30000

2125727

5009913

2753043

188000

30000

2971043

7980956

3623488

188000

30000

3841488

11822444

NPV (Net Present Value):


Year

Cash Flow

PV @ 12%

PV 0f CFAT

1364600

0.893

1218588

1519586

0.797

1211110

2125727

0.711

1511392

2971043

0.635

1886612

3841488

0.567

2178124

PV of Inflow
Less cost of project
NPV

8005826
21500000
-13494174

IRR (Internal Rate


Return):
Year

Cash flow

PV @ 14%

P.V. of cash flow

1996600

0.8772

1751403.509

2151586

0.7695

1655575.562

2757727

0.6750

1861387.174

3603043

0.5921

2133290.699

4473488

0.5194

2323389.488
Total

9725046.431

Year

Cash flow

PV @ 5%

P.V. of cash flow

1996600

0.9901

1976831.683

2151586

0.9803

2109191.256

2757727

0.9706

2676622.657

3603043

0.9610

3462453.503

4473488

0.9515

4256370.336
Total

14481469.44

Ratio Analysis:
CURRENT RATIO:
Year
1
2
3
4
5

Current Asset

Current Liability

Ratio

2823930

364030

7.76

3114223

414229

7.52

3592302

475690

7.55

4140470

527591

7.85

4763652

597781

7.97

RETURN ON CAPITAL EMPLOYED


Year

Capital employed

Ratio

Net operating
profit
1848000

22226600

8.31

2027408

22111586

9.17

2851324

22447727

12.70

4016919

23023043

17.45

5218412

23623488

22.08

NET PROFIT RATIO


Year

NP

Net Sales

Ratio

1146600

9900000

11.58

1301586

10890000

11.95

1907727

12705000

15

2753043

14774100

18

3623488

17129970

21

RETURN ON SHAREHOLDERS FUND


Year
1
2
3
4
5

EAT

Share hold fund

Ratio

1146600

21146600

5.42

1301586

21301586

6.11

1907727

21907727

8.71

2753043

22753043

12

3623488

23623488

15