A PROJECT REPORT

ON
PROJECTED FINANCIAL STATEMENTS TO BE SUBMITTED TO THE BANK FOR
LOAN PURPOSES

BY
(RAHUL DAMA)
(T.Y.B.B.A) (2011 2012)

IN PARTIAL FULFILLMENT OF
Bachelor of Business Administration
UNIVERSITY OF PUNE

MITSOM College
PUNE: 411038
1

CERTIFICATE

This is to certify that Mr. / Miss

RAHUL DAMA

of MAEERs MITSOM College has successfully completed the project work

titled

BANK LOAN PROPOSAL

in partial fulfillment of requirement for the award of Bachelor of Business Administration

prescribed by the University of Pune

This project is the record of authentic work carried out during the academic year

Ms. Renu Kulkarni

Project Guide

2011 2012.

Dr.R.M.Chitnis
Principal

DECLARATION

I, Mr / Ms_________RAHUL DAMA______ hereby declare that this project is the record of

authentic work carried out by me during the academic year 2011 2012 and has not been
submitted to any other University or Institute towards the award of any degree.

Signature of the student

(RAHUL DAMA)

ACKNOWLEDGEMENT

I would like to thank Mrs.Anjali Sane, co-ordinator of BBA Department, for her
judicious Guidance and Encouragement during the project work.
It is my privilege to express my Gratitude to my project Guide Ms Renu Kulkarni,for
her Guidance,Inspiration, keen Interest,Help and Efforts during this project work.
Last but not the least,I would like to thank all the faculty members of MITSOM College
for their kind support and cooperation during the conduction of the project work.

(RAHUL DAMA)

INDEX
Sr.no
1
i.
ii.
iii.
2
3
4
5
6
7
8
9

Particulars
Introduction
About the company
Market potential
Assumptions & List of Financial Documents to be
Submitted
Cost of production & means of finance
Schedule for calculation of depreciation
Loan repayment schedule
Profitability statement
Cash flow statement
Balance sheet
Debt Service Ratio
Bibliography

Introduction And Market Potential

Size of the Industry Today India has around 78 Jute Mills.

Geographical Distribution - West Bengal, Andhra Pradesh, Assam, Odisha, Uttar Pradesh,
Bihar, Tripura and Chhattisgarh
Output Per Annum - The Indian Jute Industry today accounts for a turnover of Rs 6,500 crore
annually, contributing to exports to the tune of nearly Rs.1000 crore.

Jute is also known as the 'Golden Fiber' a plant that produces a fiber mainly used for sacking and
cordage. This raw material is used for sacks globally which is a most versatile fiber of nature.
Jute is cheap and important among all textile fibers next to cotton.
The Indian Jute industry has been expanding really fast spanning from a wide range of life style
consumer products, with courtesy to the versatility of Jute. Innovative ways of bleaching, dyeing
and finished goods processes - the jute industry now provides finished jute products that are
softer, have a lustre with aesthetic appeal. Today Jute has been defined as eco-friendly natural
fiber with utmost versatility ranging from low value geo-textiles to high value carpets,
decoratives, apparels, composites, upholstery furnishings, etc.
The Indian Jute Industry plays a key role in the Indian economy, providing direct employment to
about 0.26 million workers, and supporting the lives of around 4.0 million farm families. Around
0.14 million people are engaged in the tertiary sector, that supports the jute industry. Currently it
contributes to exports about Rs. 1000 crore.
Government of India has included the Jute Production for special attention in its National
Common Minimum Programme. For this mission, it has approved a sum of Rs.355.55 crore. And
also in the year 2006-07 the approved allocations for Mini Mission -I and Mini Mission-II under
the JTM for the remaining year of X Plan was at Rs.2.46 crore. The Ministry of Agriculture
allocated 9.75 crore subject to the condition that the Department of Expenditure will find savings
7

from the existing allocation of Ministry of Agriculture. The remaining years allocations for Mini
Mission-III and Mini Mission-IV of the X Plan at Rs.7.95 crore and Rs.30.85 crore respectively
have been approved, which would be funded from the Plan savings of Ministry of Textiles
The India Jute Industry consistitutes total mills from central government which owns 6 jute
mills, the state government owns 4, 2 are under cooperatives, and 64 jute mills are under private
ownerships. India today has around 78 jute mills and the state of West Bengal alone has around
61 jute mills. Andhra Pradesh has 7 jute mills, 3 Utter Pradesh has 3 jute mills and Bihar,
Odisha, Assam, Tripura, and Madhya Pradesh has 1 Jute Mill each.
In the exports in the financial year 2006-07 total jute goods was at 104.3 thousand M.T valued at
Rs. 583.55 crore. The exports of jute goods were between Rs. 1100-1200 crores. The production
of raw jute varies between 90-180 lakh. In the year 2005-06 the Domestic consumption is 13.514.5 lakh MT and the production was 85 bales. While the estimated production was 105 lakh
bales for jute season 2007. In the year 2008-09 the Import of Raw Jute was 66% in quantity and
by 55% in value terms, whereas import of jute products saw a surge by 23% in quantity and by
47% in value terms when compared with the figures of 2007-08.
Import of jute and jute products
Period

2008 - 2009 2007 - 2008

2006
2007

Qty.

Value

Qty.

Value

Qty.

Raw Jute

59,042

8,900.31

1,71,800

19,672.39 94,363 15,031.15

20,299.48

57,688

13,809.41 60,932 17,162.87

Jute Products 70,935

Value

Indian Exports of jute-diversified products (JDP) has gone up from Rs.93.4 crores in 1998-99 to
Rs.257.3 crores in 2004-05, constituting 22 % of India's total jute goods export. Floor coverings
and shopping bags together account for about 97 % of all lifestyle JDP exports. The U.S. is the
biggest market for Indian JDP, followed by a few European countries such as the United
Kingdom, Germany, Italy and Spain. The government aims to increase the exports of jute and
jute products to nearly Rs.5,000 crores in the years to come.

COMPANY PROFILE

NAME OF THE FIRM

Dama Trading Co.

CONSTITUTION OF THE FIRM

PROPRIETARY

NAME OF THE PROPRIETOR

Mr.Pratap Dama

OFFICE ADDRESS

Plot No.2,
Sakri Road,
Bilaspur (Chhattisgarh)-495001

NATURE OF BUSINESS

FINANCIAL REQUIREMENT

Manufacturing of Jute Bags

Term Loan Rs.24 Lakh.

About the loan to be taken:The loan is taken for introducing a small scale jute industry. The total fixed assets thus purchased
from the loan amount will be hypothecated to the bank as security. The term loan would be taken
at 11% p.a. The interest rate for cash credit is taken at 15% p.a.

ASSUMPTIONS

Interest on the term loan is calculated at 11% p.a.

The term loan is repaid in 7 years and the instalments are paid monthly.

The utilization capacity is 60% in the 1st year, 65% in 2nd year, 70% in 3rd year,75%
in 4th year, 80%in 5th year, and 85%in 6th&7th year.

Income tax is calculated at 33.66%

Depreciation is taken as per the provision of income tax act 1961.

The depreciation rates are:a. plant & machinery @ 15%

b. computer @ 60%
c. furniture & fixtures @ 10%
d. land & building @ 10%

Depreciation of fixed assets is calculated on W.D.V (written down value) method.

The variable overheads are expected to increase at an average of 7.5%

Stock of raw material is maintained at a stock of 7 days.

Cash credit has been granted at an interest of 15%

The closing stock of finished goods is maintained at 7 days stock.

10

The credit period for debtors is 20 days and through creditors is 15 days.

3/4th of the sales are on credit basis.

Raw Material of Rs.231/Kg is used in the manufacturing process.

Sales increase by 10.37%,7.70%,7.15%,6.67%,6.25% and 5.88% respectively.

Each Unit of Jute Bag Costs Rs 100 and 11528 Units are Sold in the 1st year.

10 Labors are hired @ Rs.6860/Month.

List of financial statements to be submitted

1. Cost of project and means of finance.
2. Profitability statement for the loan tenure.
3. Previous balance sheets of the company if existing; projected balance sheet if the
company is a startup project.
4. Calculation of interest and loan repayment schedule
5. Schedule of depreciation of fixed assets.
6. Ratio analysis.
7. Projected cash flow statement of the company

11

COST OF PROJECT
AND MEANS OF FINANCE

12

[1] Cost of Project :

Particulars
Machinery (20 machinery of 100000 each)
Land and building

AMOUNT(RS.)
20,00,000
7,25,000

Computer

60,000

Working Capital

3,55,000

C.S.E.B Deposit

1,00,000

Furniture and Fixtures

1,50,000

Total Cost of Project

33,90,000

[2] Means of Finance

Particulars
Owners Contribution (Approx 20.65% of total cost of project)
Bank Term Loan (Approx 70.80% of total cost of project)
cash credit (81.69% of working capital)

Total

Bank Term Loan Interest

Amount(Rs.)
7,00,000
24,00,000
2,90,000

33,90,000

11%

13

DEPRECIATION SCHEDULE

14

Assets

Plant and Machinery

Dep. @ 15%

Computer
Dep. @ 60%

2012-2013
Op. Bal
Dep.
Clo. Bal

2000000

2013-2014
Op. Bal
Dep.
Clo. Bal

300000 1700000 1700000

255000

1445000

60000

36000

24000

24000

14400

9600

Furniture and
Fixtures
Dep.
@ 10%

150000

15000

135000

135000

13500

121500

Land and Building

Dep. @ 10%

725000

72500

652500

652500

65250

587250

Total Op. Bal.

Total Dep.
Total Clo. Bal

2935000

2511500
423500

348150
2511500

2163350

15

2014-2015
Op. Bal
Dep.
Clo. Bal

Assets

Plant and Machinery

Dep. @ 15%

2015-2016
Op. Bal
Dep.
Clo. Bal

1445000

216750

9600

5760

3840

3840

2304

1536

Furniture and Fixtures

Dep. @ 10%

121500

12150

109350

109350

10935

98415

Land and Building

Dep. @ 10%

587250

58725

528525

528525

52852.5

475673

Computer
@ 60%

Total Op. Bal.

1044013

Dep.

2163350

Total Dep.
Total Clo. Bal

Assets

1228250 1228250 184237.5

1869965
293385

250329
1869965

2016-2017

2017-2018

1619636

2018-2019
16

Op. Bal

Plant and
Machinery
Dep. @ 15%

Computer
Dep. @ 60%

Dep.

1044013 156602

Clo. Bal

887411

Op. Bal

Dep.

887411 133112

Clo. Bal

754299

Op. Bal

Dep.

754299 113145

Clo. Bal

641154

1536

922

614

614

369

246

246

147

98

Furniture and
Fixtures
Dep. @ 10%

98415

9842

88574

88574

8857

79716

79716

7972

71745

Land and
Building
Dep. @ 10%

475673

47567

428105

428105

42811

385295

385295

38529

346765

Total Op. Bal.

1619636

Total Dep.
Total Clo. Bal

1404704
214932

1219556
185148

1404704

159793
1219556

1059762

17

LOAN REPAYMENT
SCHEDULE

Loan Amount
Interest rate
Loan Tenure
EMI

Year

Months
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00

Opening
balance
2400000.00
2380906.15
2361637.28
2342191.77
2322568.02
2302764.38
2282779.20
2262610.83
2242257.58
2221717.76
2200989.66
2180071.55

13.00
14.00
15.00
16.00
17.00
18.00
19.00
20.00
21.00
22.00
23.00
24.00

2158961.69
2137658.33
2116159.68
2094463.97
2072569.37
2050474.08
2028176.24
2005674.01
1982965.51
1960048.84
1936922.11
1913583.38

20122013

20132014

Rs. 24,00,000
11%
84
Rs. 41,093.85

0.00917

EMI

Interest
22000.00
21824.97
21648.34
21470.09
21290.21
21108.67
20925.48
20740.60
20554.03
20365.75
20175.74
19983.99

Principal
repayement
19093.85
19268.87
19445.51
19623.76
19803.64
19985.17
20168.37
20353.25
20539.82
20728.10
20918.11
21109.86

Closing
Balance
2380906.15
2361637.28
2342191.77
2322568.02
2302764.38
2282779.20
2262610.83
2242257.58
2221717.76
2200989.66
2180071.55
2158961.69

41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85

493126.17 252087.86
41093.85 19790.48
41093.85 19595.20
41093.85 19398.13
41093.85 19199.25
41093.85 18998.55
41093.85 18796.01
41093.85 18591.62
41093.85 18385.35
41093.85 18177.18
41093.85 17967.11
41093.85 17755.12
41093.85 17541.18

241038.31
21303.37
21498.65
21695.72
21894.59
22095.29
22297.84
22502.23
22708.50
22916.66
23126.73
23338.73
23552.67

2137658.33
2116159.68
2094463.97
2072569.37
2050474.08
2028176.24
2005674.01
1982965.51
1960048.84
1936922.11
1913583.38
1890030.72

493126.17 224195.19

268930.98
18

25.00
26.00
27.00
28.00
29.00
30.00
31.00
32.00
33.00
34.00
35.00
36.00

1890030.72
1866262.15
1842275.71
1818069.39
1793641.17
1768989.04
1744110.92
1719004.76
1693668.45
1668099.90
1642296.97
1616257.51

20142015
Year

Months
37.00
38.00
39.00
40.00
41.00
42.00
43.00
44.00
45.00
46.00
47.00
48.00

Opening
balance
1589979.36
1563460.32
1536698.19
1509690.75
1482435.73
1454930.88
1427173.90
1399162.48
1370894.28
1342366.97
1313578.15
1284525.44

20152016
49.00
50.00
51.00
52.00
53.00
54.00
55.00
56.00
57.00
58.00
59.00
60.00
20162017

1255206.41
1225618.62
1195759.61
1165626.89
1135217.95
1104530.27
1073561.29
1042308.42
1010769.06
978940.60
946820.37
914405.71

41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85

17325.28
17107.40
16887.53
16665.64
16441.71
16215.73
15987.68
15757.54
15525.29
15290.92
15054.39
14815.69

23768.57
23986.44
24206.32
24428.21
24652.14
24878.11
25106.16
25336.30
25568.55
25802.93
26039.46
26278.15

493126.17 193074.81

300051.36

EMI

Interest

41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85

1866262.15
1842275.71
1818069.39
1793641.17
1768989.04
1744110.92
1719004.76
1693668.45
1668099.90
1642296.97
1616257.51
1589979.36

14574.81
14331.72
14086.40
13838.83
13588.99
13336.87
13082.43
12825.66
12566.53
12305.03
12041.13
11774.82

Principal
repayement
26519.04
26762.13
27007.45
27255.02
27504.85
27756.98
28011.42
28268.19
28527.32
28788.82
29052.71
29319.03

Closing
Balance
1563460.32
1536698.19
1509690.75
1482435.73
1454930.88
1427173.90
1399162.48
1370894.28
1342366.97
1313578.15
1284525.44
1255206.41

493126.17 158353.22
41093.85 11506.06
41093.85 11234.84
41093.85 10961.13
41093.85 10684.91
41093.85 10406.16
41093.85 10124.86
41093.85
9840.98
41093.85
9554.49
41093.85
9265.38
41093.85
8973.62
41093.85
8679.19
41093.85
8382.05

334772.95
29587.79
29859.01
30132.72
30408.93
30687.68
30968.99
31252.87
31539.35
31828.46
32120.23
32414.66
32711.80

1225618.62
1195759.61
1165626.89
1135217.95
1104530.27
1073561.29
1042308.42
1010769.06
978940.60
946820.37
914405.71
881693.92

493126.17 119613.68

373512.49
19

61.00
62.00
63.00
64.00
65.00
66.00
67.00
68.00
69.00
70.00
71.00
72.00

881693.92
848682.26
815368.00
781748.36
747820.54
713581.72
679029.04
644159.62
608970.57
573458.95
537621.81
501456.16

41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85

8082.19
7779.59
7474.21
7166.03
6855.02
6541.17
6224.43
5904.80
5582.23
5256.71
4928.20
4596.68

33011.65
33314.26
33619.64
33927.82
34238.83
34552.68
34869.41
35189.05
35511.62
35837.14
36165.65
36497.17

848682.26
815368.00
781748.36
747820.54
713581.72
679029.04
644159.62
608970.57
573458.95
537621.81
501456.16
464959.00

73.00
74.00
75.00
76.00
77.00
78.00
79.00
80.00
81.00
82.00
83.00
84.00

464959.00
428127.28
390957.93
353447.86
315593.95
277393.05
238841.97
199937.51
160676.42
121055.44
81071.27
40720.58

493126.17
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85
41093.85

76391.25
4262.12
3924.50
3583.78
3239.94
2892.94
2542.77
2189.38
1832.76
1472.87
1109.67
743.15
373.27

416734.92
36831.72
37169.35
37510.07
37853.91
38200.90
38551.08
38904.46
39261.09
39620.98
39984.17
40350.69
40720.58

428127.28
390957.93
353447.86
315593.95
277393.05
238841.97
199937.51
160676.42
121055.44
81071.27
40720.58
0.00

493126.17

28167.17

464959.00

20172018

20182019

20

PROJECTED TRADING, PROFIT AND LOSS

ACCOUNT

21

Particulars

2012-2013
AMOUNT(R
S)

2013-2014
AMOUNT(R
S)

2014-2015
AMOUNT(R
S)

2015-2016
AMOUNT(R
S)

11524800
416188

12720400
448626

13700400
481496

14680400
514625

Total (A)

11940988.4

13169025.6

14181896.33

15195024.69

To Opening Stock
To Purchases
To Labor Charges
To Power
To Other Expenses

0
9764092.8
823200
223440
90000

416188
10386314.4
891800
242060
96750.00

448626
11184034.4
960400
260680
104006.25

481496
11981754.4
1029000
279300
111806.72

Total (B)

10900732.8

12033112.8

12957746.25

13883357.44

To Gross Profit (A-B)

C

1040255.6

1135912.8

1224150.075

1311667.248

To Salaries
To Telephone Expenses
To Printing and Stationary
To Electricity
To Depreciation
To Interest on Term Loan
To Interest on Cash Credit

50000
18000
24000
12000
423500
252087.86
43500

53750
19350.00
25800.00
12900.00
348150
224195
43500

57781.25
20801.25
27735.00
13867.50
293385
193074.81
43500

62114.84
22361.34
29815.13
14907.56
250329
158353.22
43500

Total Expenses
D

823087.86

727645.19

650144.81

581381.09

Net Profit (C-D)

Less: Income Tax

217167.74
73,098.66

408267.61
137,422.88

574005.26
193,210.17

730286.16
245,814.32

Profit After Tax

144,069

270,845

380,795

484,472

By Sales
By Closing Stock

22

Particulars

2016-2017
2017-2018
2018-2019
AMOUNT(RS) AMOUNT(RS) AMOUNT(RS)

By Sales
By Closing Stock

15660400
547931

16640400
581378

16660000
581288

16208331.46

17221777.6

17241288.28

514625
12779474.4
1097600
297920
120192.22

547931
13577194.4
1166200
316540
129206.64

581378
13561240
1166200
316540
138897.14

14809811.31

15737072.5

15764254.74

1398520.15

1484705.1

1477033.537

66773.46
24038.44
32051.26
16025.63
214932
119613.68
43500

71781.47
25841.33
34455.10
17227.55
185148.11
76391.25
43500

77165.08
27779.43
37039.24
18519.62
159793
28167.17
43500

516934.70

454344.81

391963.93

Net Profit (C-D)

Less: Income Tax

881585.45
296,741.66

1030360.29
346,819.27

1085069.61
365,234.43

Profit After Tax

584,844

683,541

719,835

Total (A)
To Opening Stock
To Purchases
To Labour Charges
To Power
To Other Expenses
Total (B)
To Gross Profit (A-B)

To Salaries
To Telephone Expenses
To Printing and Stationary
To Electricity
To Depreciation
To Interest on Term Loan
To Interest on Cash Credit
Total Expenses

23

Projected Cash Flow Statement

24

Particulars

2012-2013
AMOUNT(RS)

2013-2014
AMOUNT(RS)

2014-2015
2015-2016
AMOUNT(RS) AMOUNT(RS)

Sources of Funds
Opening Balance

189883

482937

816383

700000

2400000

290000

cash sales
RECEIPT FROM DEBTORS

11030880
0

12175240
493920

13113240
545160

14051240
587160

Total(A)

14420880

12859043

14141337

15454783

2000000

725000

60000

150000

M.S.E.B Deposit
Purchases
Labour Charges
Power
Other Expenses
Salaries
Telephone Expenses
Printing and Stationary
Electricity
PAYMENT TO CREDITORS
Interest Paid on Term Loan

100000
9345632
823200
223440
90000
50000
18000
24000
12000
0
252088

0
9941187
891800
242060
96750
53750
19350
25800
12900
418461
224195

0
10704719
960400
260680
104006
57781
20801
27735
13868
445128
193075

0
11468251
1029000
279300
111807
62115
22361
29815
14908
479316
158353

Repayment of Term Loan

Interest on Working Cap. Loan

241038
43500

268931
43500

300051
43500

334773
43500

73099

137423

193210

245814

14230997
189883

12376107
482937

13324954
816383

14279312
1175470

Owners Contribution
Bank Term Loan
Cash Credit

APPLICATION OF FUNDS
Machinery
Land and Building
Computer
Furniture and Fixtures

Tax paid for the year

TOTAL(B)
CLOSING BALANCE(A-B)

Particulars

2016-2017
2017-2018
2018-2019
AMOUNT(RS) AMOUNT(RS) AMOUNT(RS)
25

Sources of Funds
Opening Balance

1175470

1560615

1971311

Owners Contribution

Bank Term Loan

Cash Credit

Cash Sales
RECEIPT FROM DEBTORS

14989240
629160

15927240
671160

15946000
713160

Total(A)

16793870

18159015

18630471

Machinery

Land and Building

Computer

Furniture and Fixtures

0
12231783
1097600
297920
120192
66773
24038
32051
16026
513504
119614

0
12995315
1166200
316540
129207
71781
25841
34455
17228
547692
76391

0
12980044
1166200
316540
138897
77165
27779
37039
18520
581880
28167

Repayment of Term Loan

Interest on Working Cap. Loan

373512
43500

416735
43500

464959
43500

Tax paid for the year

296742

346819

365234

15233255
1560615

16187704
1971311

16245925
2384546

APPLICATION OF FUNDS

C.S.E.B Deposit
Purchases
Labor Charges
Power
Other Expenses
Salaries
Telephone Expenses
Printing and Stationary
Electricity
PAYMENT TO CREDITORS
Interest Paid on Term Loan

TOTAL(B)
CLOSING BALANCE(A-B)

26

PROJECTED BALANCE SHEET FOR 7 YEARS

27

LIABILITIES

CAPITAL ACCOUNT
Opening Balance
Add : Capital Introduction
Add : Net Profit ( PAT )
SECURED&UNSECURED LOAN
Bank term loan
Bank cash credit

2012-2013
2013-2014
2014-2015
2015-2016
AMOUNT(RS.) AMOUNT(RS.) AMOUNT(RS.) AMOUNT(RS.)

0
700000
144069

844069.08

1114913.81

1495708.90

270845

380795

484472

2158962
290000

1890030.72
290000

1589979.36
290000

1255206.41
290000

418461.12

445127.76

479315.76

513503.76

3711492

3740072

3855004

4038891

CURRENT LIABILITIES &

PROVISIONS
Creditors
TOTAL

ASSETS

FIXED ASSETS (less depreciation)

Deposits
Deposit to MSEB
CURRENT ASSETS,LOANS &
ADVANCES
Finished Goods
Raw Material
Debtors
Other Current Assets
TOTAL

LIABILITIES

2009-2010
2010-2011
2011-2012
2012-2013
AMOUNT(RS.) AMOUNT(RS.) AMOUNT(RS.) AMOUNT(RS.)
2511500

2163350

1869965

1619636

100000

100000

100000

100000

224735.6
191452.8
493920.00
189883

241218.4
207407.2
545160.00
482937

258134.73
223361.6
587160.00
816383

275308.69
239316
629160.00
1175470

3711492

3740072

3855004

4038891

2016-2017

2017-2018

2018-2019
28

AMOUNT(RS.
)

AMOUNT(RS.
)

AMOUNT(RS.
)

1980180.74

2565024.53

3248565.54

584844

683541

719835

881693.92
290000

464959.00
290000

0.00
290000

547691.76

581879.76

581196.00

TOTAL

4284410

4585404

4839597

ASSETS

2013-2014
AMOUNT(RS.
)

2014-2015
AMOUNT(RS.
)

2015-2016
AMOUNT(RS.
)

1404704

1219556

1059762

100000

100000

100000

292661.06
255270.4
671160.00
1560615

310152.80
271224.8
713160.00
1971311

310063.48
271224.8
714000.00
2384546

4284410

4585404

4839597

CAPITAL ACCOUNT
Opening Balance
Add : Capital Introduction
Add : Net Profit ( PAT )
SECURED&UNSECURED LOAN
Bank term loan
Bank cash credit
CURRENT LIABILITIES &
PROVISIONS
Creditors

FIXED ASSETS(less depreciation)

Deposits
Deposit to MSEB
CURRENT ASSETS,LOANS &
ADVANCES
Finished Goods
Raw Material
Debtors
Other Current Assets
TOTAL

29

Debt service coverage ratio

The debt service coverage ratio (DSCR), also known as "debt coverage ratio," is the ratio
of cash available for debt servicing to interest, principal and lease payments. It is a
popular benchmark used in the measurement of an entity's (person or corporation) ability to
produce enough cash to cover its debt (including lease) payments. The higher this ratio is,
the easier it is to obtain a loan. The phrase is also used in commercial banking and may be
expressed as a minimum ratio that is acceptable to a lender; it may be a loan condition or
covenant. Breaching a DSCR covenant can, in some circumstances, be an act of default.

In corporate finance, DSCR refers to the amount of cash flow available to meet annual
interest and principal payments on debt, including sinking fund payments. [1]
In personal finance, DSCR refers to a ratio used by bank loan officers in determining debt
servicing ability.
In commercial real estate finance, DSCR is the primary measure to determine if a property
will be able to sustain its debt based on cash flow. In the late 1990s and early 2000s banks
typically required a DSCR of at least 1.2,[citation needed] but more aggressive banks would
accept lower ratios, a risky practice that contributed to the Financial crisis of 20072010. A
DSCR over 1 means that (in theory, as calculated to bank standards and assumptions) the
entity generates sufficient cash flow to pay its debt obligations. A DSCR below 1.0 indicates
that there is not enough cash flow to cover loan payments.

Typically, most commercial banks require the ratio of 1.15 - 1.35 times (net operating
income or NOI / annual debt service) to ensure cash flow sufficient to cover loan payments
is available on an ongoing basis.

DSCR = (Annual Net Income + Amortization/Depreciation + Interest Expense + other

non-cash and discretionary items (such as non-contractual management bonuses)) /
(Principal Repayment + Interest payments + Lease payments [1])

30

DEBT SERVICE COVERAGE RATIO(DSCR)

Debt Service Ratio =

PAT +
Depriciation + Interest onTerm Loan
Principal + Interest

Particulars

20092010

20102011

20112012

20122013

Profit AfterTax(PAT)

144,069

270,845

380,795

484,472

Add: Depriciation

423500.
00

348150.
00

293385.
00

250329.
00

252087.
86

224195.
19

193074.
81

158353.
22

819656.
94

843189.
92

867254.
90

893154.
05

Interest in Term Loan

252087.
86

224195.
19

193074.
81

158353.
22

Term Loan Installment

241038.
31

268930.
98

300051.
36

334772.
95

Total Principal + Interest(B)

493126.
17

493126.
17

493126.
17

493126.
17

1.66

1.71

1.76

1.81

Add:Interest on Loan
Net Cash Flow(A)

Debt Service Coverage Ratio

31

BIBLIOGRAPHY

Websites
o www.icicibank.com
o www.google.com
o www.indianmirror.com/indian-industries/jute
o www.indiantextilejournal.com/articles/FAdetails

32