Year --> 0 1 2 3 4

figures in Rs million unless stated

Description Cost
Land 8
Building & civil 10
Plant & Machinery 12
Misc Fixed Assets 1.5
Preliminary & Preoperative Expens 1
CAPEX 32.50

70% Debt 22.75

30% Equity 9.75

Capacity (MT) 22500 22500 22500 22500

Capacity Utilisation 75% 100% 100% 100%
Production (MT) 16875 22500 22500 22500
 5 6 7 8 9 10

22500 22500 22500 22500 22500 22500

100% 100% 100% 100% 100% 100%
22500 22500 22500 22500 22500 22500
 Year --> 0 1 2 3 4 5 6 7

PROFIT & LOSS

1650 Sales 27.84 37.13 37.13 37.13 37.13 37.13 37.13

220 Freight 3.71 4.95 4.95 4.95 4.95 4.95 4.95
Net Sales 24.13 32.18 32.18 32.18 32.18 32.18 32.18

Variable Cost
525 Var_cost_1 8.86 11.81 11.81 11.81 11.81 11.81 11.81
110 Var_cost_2 1.86 2.48 2.48 2.48 2.48 2.48 2.48
Total 10.72 14.29 14.29 14.29 14.29 14.29 14.29

Gross Margin 13.42 17.89 17.89 17.89 17.89 17.89 17.89

56% 56% 56% 56% 56% 56% 56%

10 Fixed Cost 10 10 10 10 10 10 10

EBITDA 3.42 7.89 7.89 7.89 7.89 7.89 7.89

14% 25% 25% 25% 25% 25% 25%

Depreciation 1.63 1.63 1.63 1.63 1.63 1.63 1.63

EBIT 1.79 6.26 6.26 6.26 6.26 6.26 6.26

Interest 3.19 3.34 3.17 2.83 2.49 2.14 1.80

PBT -1.40 2.92 3.09 3.44 3.78 4.12 4.46

Income Tax 0.00 0.53 0.56 0.73 1.20 1.37 1.53

PAT -1.40 2.40 2.54 2.70 2.57 2.75 2.93

-6% 7% 8% 8% 8% 9% 9%
 8 9 10

37.13 37.13 37.13

4.95 4.95 4.95
32.18 32.18 32.18

11.81 11.81 11.81

2.48 2.48 2.48
14.29 14.29 14.29

17.89 17.89 17.89

56% 56% 56%

10 10 10

7.89 7.89 7.89

25% 25% 25%

1.63 1.63 1.63

6.26 6.26 6.26

1.46 1.12 0.78

4.80 5.14 5.48

1.69 1.85 2.00

3.11 3.30 3.48

10% 10% 11%
Year --> 0 1 2 3 4 5 6 7

BALANCE SHEET

Sources of Funds
Shareholders Fund
Capital 9.75 9.75 9.75 9.75 9.75 9.75 9.75
Reserve and Surplus -1.40 1.00 3.54 6.24 8.82 11.57 14.49
Total Shareholders Fu 8.35 10.75 13.29 15.99 18.57 21.32 24.24

DTL/(A) 0.33 0.59 0.79 0.92 1.00 1.03 1.02

Loan Funds
Term Loan 22.75 22.75 19.91 17.06 14.22 11.38 8.53
Working Capital Loan 3.80 5.07 5.07 5.07 5.07 5.07 5.07
Total Loan Funds 26.55 27.82 24.98 22.13 19.29 16.44 13.60

Current Liabilities
Creditors 2.64 3.52 3.52 3.52 3.52 3.52 3.52

Total Liabilities 37.88 42.69 42.58 42.57 42.38 42.32 42.39

Uses of Funds
Fixed Assets
Gross Block 32.50 32.50 32.50 32.50 32.50 32.50 32.50
Less: Cumulative Depre 1.63 3.25 4.88 6.50 8.13 9.75 11.38
Net Fixed Asset 30.88 29.25 27.63 26.00 24.38 22.75 21.13

Current Assets
Inventories 2.64 3.52 3.52 3.52 3.52 3.52 3.52
Debtors 5.95 7.93 7.93 7.93 7.93 7.93 7.93
Total 8.59 11.46 11.46 11.46 11.46 11.46 11.46

Cash & Bank -1.59 1.98 3.49 5.12 6.55 8.11 9.80

Total Assets 37.88 42.69 42.58 42.57 42.38 42.32 42.39

BS Check 0.00 0.00 0.00 0.00 0.00 0.00 0.00

 8 9 10

9.75 9.75 9.75

17.60 20.90 24.38
27.35 30.65 34.13

0.96 0.86 0.72

5.69 2.84 0.00

5.07 5.07 5.07
10.76 7.91 5.07

3.52 3.52 3.52

42.59 42.95 43.45

32.50 32.50 32.50

13.00 14.63 16.25
19.50 17.88 16.25

3.52 3.52 3.52

7.93 7.93 7.93
11.46 11.46 11.46

11.64 13.61 15.74

42.59 42.95 43.45

0.00 0.00 0.00

Year --> 0 1 2 3 4 5 6 7

CASH FLOW STATEMENT

Cashflow from operating activities

Profit before taxation -1.40 2.92 3.09 3.44 3.78 4.12 4.46

Add / (Deduct):
Depreciation 1.63 1.63 1.63 1.63 1.63 1.63 1.63
Interest paid 3.19 3.34 3.17 2.83 2.49 2.14 1.80
DTL/(A) 0.33 0.26 0.20 0.14 0.08 0.03 -0.02

Operating Cash Profit 3.75 8.15 8.08 8.02 7.97 7.92 7.87

Add / (Deduct)

Decrease/(Increase) in -8.59 -2.86 0.00 0.00 0.00 0.00 0.00

Increase/(Decrease) in 2.64 0.88 0.00 0.00 0.00 0.00 0.00
Total

Deduct : Direct taxes p 0.00 -0.53 -0.56 -0.73 -1.20 -1.37 -1.53

Cashflow from operatin -2.20 5.64 7.53 7.29 6.77 6.55 6.34

Cash flow from Investing activities

Purchase of fixed asset -32.50 0.00 0.00 0.00 0.00 0.00 0.00
Proceeds from sale of f 0 0 0 0 0 0 0
Cash flow from Investin -32.5 0 0 0 0 0 0

Cash flow from financing activities

Equity Capital receive 9.75 0 0 0 0 0 0

TL Borrowings during t 22.75 0 0 0 0 0 0
WC Borrowings during 3.80 1.27 0.00 0.00 0.00 0.00 0.00
Borrowings repaid duri 0.00 0.00 -2.84 -2.84 -2.84 -2.84 -2.84
Interest paid -3.19 -3.34 -3.17 -2.83 -2.49 -2.14 -1.80
Miscellaneous Expendit 0 0 0 0 0 0 0
Cash flow from financin 33.12 -2.07 -6.01 -5.67 -5.33 -4.99 -4.65

Net Increase / (Decreas -1.59 3.57 1.51 1.62 1.44 1.56 1.69
Add : Balance at the be 0.00 -1.59 1.98 3.49 5.12 6.55 8.11
Cash / Cash Equivalents -1.59 1.98 3.49 5.12 6.55 8.11 9.80
 8 9 10

4.80 5.14 5.48

1.63 1.63 1.63

1.46 1.12 0.78
-0.06 -0.10 -0.14

7.83 7.79 7.75

0.00 0.00 0.00

0.00 0.00 0.00

-1.69 -1.85 -2.00

6.14 5.94 5.75

0.00 0.00 0.00

0 0 0
0 0 0

0 0 0
0 0 0
0.00 0.00 0.00
-2.84 -2.84 -2.84
-1.46 -1.12 -0.78
0 0 0
-4.31 -3.96 -3.62

1.83 1.98 2.13

9.80 11.64 13.61
11.64 13.61 15.74
 Year --> 0 1 2 3 4 5 6 7

Tax Schedule
PBT -1.40 2.92 3.09 3.44 3.78 4.12 4.46
add SLM 1.63 1.63 1.63 1.63 1.63 1.63 1.63
less WDV 2.60 2.39 2.20 2.02 1.86 1.71 1.58
PBT for IT -2.37 2.16 2.52 3.04 3.54 4.03 4.51

18% MAT 0.00 0.53 0.56 0.62 0.68 0.74 0.80

Carry forward losses

opening 0 -2.37 -0.21 0.00 0.00 0.00 0.00
addition -2.37 0.00 0.00 0.00 0.00 0.00 0.00
utilised 0.00 -2.16 -0.21 0.00 0.00 0.00 0.00
closing -2.37 -0.21 0.00 0.00 0.00 0.00 0.00

Net PBT of tax 0.00 0.00 2.31 3.04 3.54 4.03 4.51
34% Taxes 0.00 0.00 0.78 1.03 1.20 1.37 1.53

Current tax 0.00 0.53 0.56 0.73 1.20 1.37 1.53

34% DTL/(A) 0.33 0.26 0.20 0.14 0.08 0.03 -0.02

MAT credit
opening 0.00 0.00 0.53 0.30 0.00 0.00 0.00
addition 0.00 0.53 0.00 0.00 0.00 0.00 0.00
utilised 0.00 0.00 0.23 0.30 0.00 0.00 0.00
closing 0.00 0.53 0.30 0.00 0.00 0.00 0.00
 8 9 10

4.80 5.14 5.48

1.63 1.63 1.63
1.45 1.33 1.23
4.98 5.43 5.88

0.86 0.93 0.99

0.00 0.00 0.00

0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00

4.98 5.43 5.88

1.69 1.85 2.00

1.69 1.85 2.00

-0.06 -0.10 -0.14

0.00 0.00 0.00

0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
 Year --> 0 1 2 3 4 5 6 7

365 Working Capital

Current Assets
90 Inventory 2.64 3.52 3.52 3.52 3.52 3.52 3.52
90 Debtors 5.95 7.93 7.93 7.93 7.93 7.93 7.93

Current Liabilities
90 Creditors 2.64 3.52 3.52 3.52 3.52 3.52 3.52

Working Capital Gap 5.95 7.93 7.93 7.93 7.93 7.93 7.93
25% Margin Money 2.15 2.86 2.86 2.86 2.86 2.86 2.86
WC loan 3.80 5.07 5.07 5.07 5.07 5.07 5.07

12% Interest 0.46 0.61 0.61 0.61 0.61 0.61 0.61

 8 9 10

3.52 3.52 3.52

7.93 7.93 7.93

3.52 3.52 3.52

7.93 7.93 7.93

2.86 2.86 2.86
5.07 5.07 5.07

0.61 0.61 0.61

 Year --> 0 1 2 3 4 5 6 7

8 Term Loan
Opening 22.75 22.75 22.75 19.91 17.06 14.22 11.38
Addition 0 0 0 0 0 0 0
Repayment 0 0 2.84 2.84 2.84 2.84 2.84
Closing 22.75 22.75 19.91 17.06 14.22 11.38 8.53
12% Interest 2.73 2.73 2.56 2.22 1.88 1.54 1.19
 8 9 10

8.53 5.69 2.84

0 0 0
2.84 2.84 2.84
5.69 2.84 0.00
0.85 0.51 0.17
 Year --> 0 1 2 3 4 5 6 7

Depreciation SLM
Gross block 32.50 32.50 32.50 32.50 32.50 32.50 32.50
5% Depreciation 1.63 1.63 1.63 1.63 1.63 1.63 1.63
Cumm Depreciation 1.63 3.25 4.88 6.50 8.13 9.75 11.38
Net Block 30.88 29.25 27.63 26.00 24.38 22.75 21.13

Depreciation WDV
Gross block 32.50 32.50 32.50 32.50 32.50 32.50 32.50
8% Depreciation 2.6 2.39 2.20 2.02 1.86 1.71 1.58
Cumm Depreciation 2.6 4.99 7.19 9.22 11.08 12.79 14.37
Net Block 29.90 27.51 25.31 23.28 21.42 19.71 18.13
 8 9 10

32.50 32.50 32.50

1.63 1.63 1.63
13.00 14.63 16.25
19.50 17.88 16.25

32.50 32.50 32.50

1.45 1.33 1.23
15.82 17.15 18.38
16.68 15.35 14.12
Year --> 0 1 2 3 4 5 6 7

Valuation

Risk free rate 5%

Beta 0.80
Expected return from 15%
Cost of equity 13% >> by CAPM Ke = Rfr + beta*(Rm-Rfr)
Cost of debt 8%
Tax Rate 34%
Debt% 70%
Equity% 30%
WACC 8% >>(% of equity x Cost of Equity) + (% of debt x Cost of Debt) x (1 - Tax R
Terminal Growth Rate 2%
No. of Equity Shares(# 1

DCF Valuation using FCFF

Net Income -1.40 2.40 2.54 2.70 2.57 2.75 2.93
Add: Depreciation 1.63 1.63 1.63 1.63 1.63 1.63 1.63
Add: Interest*(1-tax ra 2.10 2.20 2.09 1.87 1.64 1.42 1.19
Less: Capex -32.50 0.00 0.00 0.00 0.00 0.00 0.00
Less: Increase in Worki -5.95 -1.98 0.00 0.00 0.00 0.00 0.00
Free Cashflow to the F -36.12 4.24 6.25 6.19 5.84 5.79 5.74
Terminal Value

FCFF+TV -36.12 4.24 6.25 6.19 5.84 5.79 5.74

Enterprise 49.05

Less: Debt -26.55

Add: Cash -1.59
Equity Valu 20.91

No. of Equi 1
Share Price 20.91
 8 9 10

x Cost of Debt) x (1 - Tax Rate)

3.11 3.30 3.48

1.63 1.63 1.63
0.96 0.74 0.51
0.00 0.00 0.00
0.00 0.00 0.00
5.70 5.66 5.62
102.50

5.70 5.66 108.12