Project Report for a Chappathi Making Business.

GN

For submission to Federal Bank for Mudra Loan.

Reviewed and
Geetha Nair
submitted by :

April-2018

Jose Tomy Pius M.Com

Prepared by : Business Consultant
V4U Business Services, Kollam
 INTRODUCTION

GN food Products is a Chappatti making Industry with the help of highly sophisicated digital
macheneries. Today we are suffering from lot of health problems and most of them are because
of non-hygenic and food adulteration practices. So Keeping this in mind, we have started this
business for serving the public with hygenic food stuff for a better & healthy new generation. We
promise that we have no compromise on quality.

BUSINESS PROFILE
The proposed project is unique in this type of industry, because we have selected the
macheneries with high potential and most hygenic in nature.The proprietor has decided to meet
the entire demands with in a short period, without compromising on qualities.This facility will
gain momentum and has significant commercial prospects in the years to come. Since similar
facilities with unique ideas are missing in Adoor area, this project is expected to provide more
social convenience for the residents, and has potential of becoming a commercial success. This is
the compelling reason behind planning this project.

ENTREPRENEUR PROFILE
This project is promoted by Ms Geetha Nair, who had few years of work exposure to the small
scale industries. She has already acquired sufficient skills to run and manage this type of
Industries and since she is a Nurse, she knows the value of Public health and how to be hygenic
in all the aspects. Besides being a profitable Industry, It is expected to provide employment
opportunity to a few competent people struggling for employment. Now that the staff have been
hired and the infrastructure is being set up, the only limiting factor is money; there is a shortage
of cash to an extent of almost INR 3.7 lakhs, out of the total project cost of approximately INR
4.5 lakhs (including working capital).

MARKET PROFILE
Adoor is a Big Town in Pathanamthitta district with a multi-cultural population of around
Seventy thousand residents. Most of the people are educated and busy with work or agriculture.
Since almost all are depending on outside food( at least once in a week) and this need has
created a demand, in the locality, which is being exploited commercially be the promoter of this
venture.

Project Report 28-04-2018 Page 2

 PROJECT AT A GLANCE

Business Name : GN Food Products

Entreprenuer Name : Ms.Geetha Nair
Legal Constitution : Propreitorship Location : Adoor, Pathanamthitta
Contact Number: 9497075736 Email : Anupshb@gmail.com
Business Premises : Shop Ownership : Owned Area(Sq.Ft): 250
Business Type Service Provider Activity : Chappatti Manufacturing
Business Address : Adoor, Pathanamthitta. PIN.691551.
Products / Services :
Chappatti / Distribution

Cost of Project Means of Financing

Cost of Landed Property - Owned Capital 20% 1,20,000
Cost of Building Construction/Rennovation - Borrowed Capital 80% 4,75,000
Cost of Plant & Machinery 4,10,640 Total 100% 5,95,000
Cost of Furnishing 29,000 Monthly Instalment 10,614.26
Cost of Office Equipments 30,000 Gestation Period (M) 3 Months
Cost of Motor Vehicles - Borrowings
Cost of Intangible Assets - Particulars Tenure Int. Rate Amount
Pre-operative Expenses - Term Loan 60 11.00% 4,75,000
Security Deposits & Prepayments - WC Loan 60 10.00% -
Working Capital 1,25,010 Auto Loan 60 9.00% -
Total Cost of Project 5,94,650 Total Borrowed Capital 4,75,000
20,00,000 Financial Analysis (Average Values)
Profitability Chart
Net Profit Ratio 9.32%
15,00,000
Return on Investment 25.26%
10,00,000 Current Ratio 7.30
Liquid Ratio 122.23
5,00,000 Cash Reserve Ratio 5.69
Debt to Equity Ratio 0.77
-
Y1 Y2 Y3 Y4 Y5 Debt Service Coverage Ratio 2.15
Total Revenue Operating Expenses Operating Profit Payback Period (Years) 3.64
Internal Rate of Return 10.35%
4,00,000
Net Cash / Fund Flow
3,00,000

2,00,000
Location Map
1,00,000

-
Y1 Y2 Y3 Y4 Y5
Net Cashflows Net change in Working Capital

Project Report 28-04-2018 Page 3

 DETAILED PROJECT COST & MEANS OF FINANCING

Particulars of Plant & Machinery Quantity Unit Rate Total Cost

Cost of Plant & Machinery

Dough mixer machine 10 kg 1.00 44,840.00 44,840.00

Ball cutting mechine MS powder coating, 2200/hour 1.00 1,41,600.00 1,41,600.00
Chapathi making machine SS 1.00 2,00,600.00 2,00,600.00
Continuos Sealing machine, Digital 1.00 23,600.00 23,600.00
- - -
Total Cost of Plant & Machinery 4.00 4,10,640.00

Particulars of Furnishing Quantity Unit Rate Total Cost

Front Counter 1.00 5,000.00 5,000.00
Furnishing Cost

Chairs and Desk 1.00 5,000.00 5,000.00

Signboard 1.00 4,000.00 4,000.00
Decoration and Electrical / Plumbing Installations 1.00 15,000.00 15,000.00
- - -
- - -
Total Cost of Furnishing 4.00 29,000.00

Particulars of Office Equipment Quantity Unit Rate Total Cost

Computer system 1.00 18,000.00 18,000.00
Office Equipment

Printers 1.00 12,000.00 12,000.00

- - -
- - -
- - -
Total Cost of Office Equipment 2.00 30,000.00

Particulars of Intangible Assets Quantity Unit Rate Total Cost

Intangible Assets

- - -

- - -

- - -

Total Cost of Intangible Assets - -

Particulars of Security Deposits/Guarantee Margins Quantity Unit Rate Total Cost

Security Deposits

- - -

- - -

- - -

- - -

Total Security Deposits/Guarantee Margins -

Total Capital Expenditure 4,69,640.00

Project Report 28-04-2018 Page 4

 Particulars of Working Capital Requirement Per Month Months Total Cost

Working Capital Inventory of Assorted items 1,07,010.00 1.00 1,07,010.00

Sundry Debtors 18,000.00 1.00 18,000.00

Other Current Assets - 1.00 -

- - -

Total Working Capital 1,25,010.00

Total Project Cost 5,94,650.00

% Amount Terms of Borrowing

Owned Capial 20% 1,20,000 Terms Term Loan WC Loan Auto Loan
Means of Financing

Borrowed Capital 80% 4,75,000 Scheme Mudra

Term Loan 100% 4,75,000 Tenure (M) 60

WC Loan 0% - Interest (%) 11%

Auto Loan 0% - Gestation(M) 3

Total 100% 4,75,000 5,95,000 Subsidy (%) Nil

Year Op. Bal Disbursal Total Loan Interest Due Principal due Repayment Cl. Balance

Year 1 - 4,75,000 4,75,000 51,388 44,140 95,528 4,30,860

Year 2 4,30,860 - 4,30,860 43,237 84,134 1,27,371 3,46,726

Year 3 3,46,726 - 3,46,726 33,500 93,871 1,27,371 2,52,854

Term Loan Schedule

Year 4 2,52,854 - 2,52,854 22,640 1,04,731 1,27,371 1,48,123

Year 5 1,48,123 - 1,48,123 10,519 1,16,852 1,27,371 31,271

Year 6 31,271 - 31,271 575 31,271 31,846 0

Year 7 0 - 0 - - - 0

Year 8 0 - 0 - - - 0

Year 9 0 - 0 - - - 0

Year 10 0 - 0 - - - 0

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Summary

Total Interest Expense 51,388 43,237 33,500 22,640 10,519

Total Principal Repaid 44,140 84,134 93,871 1,04,731 1,16,852

Project Report 28-04-2018 Page 5

 Fixed Assets and Depreciation Schedule

Depr Rate : 10% Method : WDV Life (Yrs) : 30 Salvage(%): 5.00%

Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Buildings

Opening Balance - - - - -
Depreciation - - - - -
Closing Balance - - - - -

Depr Rate : 26% Method : WDV Life (Yrs) : 10 Salvage(%): 5.00%

Plant & Machinery

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Opening Balance 4,10,640 3,04,339 2,25,556 1,67,168 1,23,894
Depreciation 1,06,301 78,783 58,389 43,274 32,072
Closing Balance 3,04,339 2,25,556 1,67,168 1,23,894 91,822

Depr Rate : 31% Method : WDV Life (Yrs) : 8 Salvage(%): 5.00%

Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Furnishings

Opening Balance 29,000 19,942 13,713 9,430 6,485

Depreciation 9,057.98 6,229 4,283 2,945 2,025
Closing Balance 19,942 13,713 9,430 6,485 4,459

Depr Rate : 31% Method : WDV Life (Yrs) : 8 Salvage(%): 5.00%

Office Equipment

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Opening Balance 30,000 20,630 14,186 9,755 6,708
Depreciation 9,370.32 6,443.56 4,430.95 3,046.97 2,095.27
Closing Balance 20,630 14,186 9,755 6,708 4,613

Depr Rate : 31% Method : WDV Life (Yrs) : 8 Salvage(%): 5.00%

Motor Vehicles

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Opening Balance - - - - -
Depreciation - - - - -
Closing Balance - - - - -

Depr Rate : 44% Method : WDV Life (Yrs) : 8 Salvage(%): 1.00%

Intangible Assets

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Opening Balance - - - - -
Depreciation - - - - -
Closing Balance - - - - -

Total Cost of Fixed Assets 4,69,640 4,69,640 4,69,640 4,69,640 4,69,640

Total Depreciation Expense 1,24,729 91,455 67,103 49,266 36,193

Project Report 28-04-2018 Page 6

 PROJECTED REVENUE
Annual Sales Revenue at Full Particulars Unit Rate Quantity Annual Sales
Chappathi 3.00 7,00,000.00 21,00,000.00
- - -
Capacity

- - -
Total Sales Revenue (at Full Capacity) 3.00 7,00,000 21,00,000.00

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Expected Annual Sales 14,70,000 15,29,241 15,90,869 16,54,981 17,21,677

PROJECTED OPERATING EXPENSES

Position / Designation Nos. Start year Rate/month Total Annual Salaries

Machine operator 2 1 8,000 1,92,000.00
Staff Salaries

- - - -
Total Salaries Per Year 2 1,92,000.00

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Expected Annual Staff Salaries 1,92,000 1,95,840 1,99,757 2,03,752 2,07,827

Particulars of Expenses Basis (P/M) % Sales(P) Rate pm(M) Annual Expenses

Communication Expenses M 0.10% 1,000 12,000.00
Administration Expenses

Printing & Stationery M 0.10% 1,000 12,000.00

Rent of Premises M 0.00% - -
Advertisement & Publicity M 0.15% 500 6,000.00
Other Misc. Expenses M 0.13% 250 3,000.00
Total Expenses Per Year 33,000.00

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Expected Annual Admin Expenses 33,000 33,660 34,333 35,020 35,720
PROJECTED COST OF SALES / PRODUCTION

Particulars Rate / Unit Input Unit Turnover Annual Amount

wheat flour 100.00 1,000.00 30.00 12,16,666.67

Cooking Gas 1,400.00 4.00 30.00 68,133.33

Initial / Annual Matrials Consumed

Cleaning material 50.00 2.00 30.00 1,216.67

Water 50.00 15.00 30.00 9,125.00

Sugar 32.00 7.00 30.00 2,725.33

Salt 12.00 3.00 30.00 438.00

Oil 100.00 3.00 30.00 3,650.00

- - - -

Total Purchase Cost (at full capacity) 1,034.00 210.00 13,01,955.00

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Expected Annual Purchase Cost 9,11,369 9,57,484 10,05,932 10,56,833 11,10,308

Project Report 28-04-2018 Page 7

 Position / Designation Nos. Start year Rate/month Annual Wages

- - - -

- - - -
Labour Wages

- - - -

- - - -

Total Wages Per Year - -

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Expected Annual Labour Wages - - - - -

Particulars of Overheads Basis (P/M) % Sales(P) Rate pm(M) Total Overheads

Repairs & Maintenance M 0.60% 1,000.00 12,000.00

Electricity Charges M 0.80% 1,000.00 12,000.00

Direct Overheads

Consumables M 0.30% 500.00 6,000.00

Other Direct Overheads M 0.45% 250.00 3,000.00

Transportation & Delivery M 0.70% 500.00 6,000.00

Total Direct Overheads 39,000.00

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Expected Annual Direct Overheads 27,300 28,681 30,133 31,657 33,259

Total Cost of Sales / Production 9,38,669 9,86,165 10,36,065 10,88,490 11,43,568

Project Report 28-04-2018 Page 8

 PROJECTED FINANCIAL STATEMENTS

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

ASSETS :
Current Assets
Cash and Equivalents 2,31,507 3,75,291 5,11,516 6,42,271 7,69,046
Trade Receivables 12,250 12,744 13,257 13,792 14,347
Inventory 1,12,425 1,15,797 1,19,271 1,22,850 1,26,535
Other Current Assets - - - - -
Total Current Assets 3,56,182 5,03,832 6,44,045 7,78,912 9,09,929
Non-Current Assets
Cost of Fixed Assets 4,69,640 4,69,640 4,69,640 4,69,640 4,69,640
Less Accummulated Depreciation -1,24,729 -2,16,184 -2,83,287 -3,32,553 -3,68,746
Balance Sheet (Projection)

Total Non-Current Assets 3,44,911 2,53,456 1,86,353 1,37,087 1,00,894

TOTAL ASSETS 7,01,093 7,57,288 8,30,398 9,15,998 10,10,823
LIABILITIES :
Current Liabilities :
Trade Payable 3,768 3,949 4,148 4,358 4,578
Other Current Liabilities 55,316 70,245 82,948 94,001 1,03,962
Total Current Liabilities 59,083 74,194 87,097 98,359 1,08,540
Non-Current Liabilities
Loans from Financial Institutions 4,30,860 3,46,726 2,52,854 1,48,123 31,271
Total Non-current Liabilities 4,30,860 3,46,726 2,52,854 1,48,123 31,271
TOTAL LIABILITIES 4,89,943 4,20,919 3,39,951 2,46,482 1,39,811
NET ASSETS (Assets -Liabilities) 2,11,150 3,36,369 4,90,447 6,69,516 8,71,012
EQUITY:
Share Capital / Owner's Contribution 1,20,000 1,20,000 1,20,000 1,20,000 1,20,000
Retained Earnings 91,150 2,16,369 3,70,447 5,49,516 7,51,012
TOTAL EQUITY 2,11,150 3,36,369 4,90,447 6,69,516 8,71,012

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Changes in Current Assets :
Statement of Changes in Working Capital

Cash and Equivalents 2,31,507 1,43,784 1,36,225 1,30,755 1,26,775

Trade Receivables 12,250 494 514 534 556
Inventory 1,12,425 3,373 3,474 3,578 3,685
Other Current Assets - - - - -
Subtotal : 3,56,182 1,47,650 1,40,213 1,34,867 1,31,017
Changes in Current Liabilities :
Trade Payables 3,768 181 200 210 220
Other Current Liabilities 55,316 14,929 12,704 11,053 9,960
Subtotal : 59,083 15,110 12,903 11,262 10,181
Net Changes in Working Capital 2,97,099 1,32,540 1,27,310 1,23,605 1,20,836

Project Report 28-04-2018 Page 9

 Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Total Sales Revenue 14,70,000 15,29,241 15,90,869 16,54,981 17,21,677
Cost of Sales / Production :
Statement of Income and Expenditure for the year

Cost of Raw materials / Purchases 9,11,369 9,57,484 10,05,932 10,56,833 11,10,308

Direct Wages - - - - -
Other Direct Costs 27,300 28,681 30,133 31,657 33,259
Operating Expenses :

Staff Salaries 1,92,000 1,95,840 1,99,757 2,03,752 2,07,827

Administration Expenses 33,000 33,660 34,333 35,020 35,720
Earnings before Interest, Tax & Depn
3,06,332 3,13,576 3,20,714 3,27,720 3,34,562
(EBITD)
Depreciation 1,24,729 91,455 67,103 49,266 36,193
Interest 51,388 43,237 33,500 22,640 10,519
Net Profit (Before Taxation) 1,30,215 1,78,884 2,20,111 2,55,813 2,87,851
Income Tax 39,064 53,665 66,033 76,744 86,355
Net Profit (After Taxation) 91,150 1,25,218 1,54,078 1,79,069 2,01,496

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

A. Net Operating Income

Net Profit After Taxes 91,150 1,25,218 1,54,078 1,79,069 2,01,496

Debt Service Coverage Ratio

Depreciation 1,24,729 91,455 67,103 49,266 36,193

Interest on Bank Loan 51,388 43,237 33,500 22,640 10,519
Total Sources of Fund Available : 2,67,267 2,59,911 2,54,681 2,50,976 2,48,207
B. Debt Services

Loan Instalment Payable (Principal) 44,140 84,134 93,871 1,04,731 1,16,852

Interest on Bank Loans 51,388 43,237 33,500 22,640 10,519
Total Debt Liability Payable : 95,528 1,27,371 1,27,371 1,27,371 1,27,371
C. Debt Service Coverage Ratio (A/B) 2.80 2.04 2.00 1.97 1.95

Project Report 28-04-2018 Page 10

 Particulars Year 1 Year 2 Year 3 Year 4 Year 5
A. Operating Revenue 14,70,000 15,29,241 15,90,869 16,54,981 17,21,677
B. Variable Cost 9,38,669 9,86,165 10,36,065 10,88,490 11,43,568
C. Contribution (A-B) 5,31,332 5,43,076 5,54,804 5,66,491 5,78,110
Break Even Point Analysis

D. Fixed Cost

Depreciation 1,24,729 91,455 67,103 49,266 36,193

Bank Interest 51,388 43,237 33,500 22,640 10,519
Admin Expenses 2,25,000 2,29,500 2,34,090 2,38,772 2,43,547
D. Total Fixed Costs 4,01,117 3,64,192 3,34,693 3,10,678 2,90,259
E. PV Ratio ( C / A x 100) 36.15 35.51 34.87 34.23 33.58
F. Break Even Value (D/E x 100) 11,09,744 10,25,525 9,59,713 9,07,633 8,64,424
G. Cash Break Even (Without Depn) 7,647 7,680 7,673 7,637 7,566
H. Break Even without Interest 10,58,356 9,82,288 9,26,213 8,84,993 8,53,905

Particulars Year 1 Year 2 Year 3 Year 4 Year 5

A. Cashflow from Operating Activities

Net Profit after Tax 91,150 1,25,218 1,54,078 1,79,069 2,01,496

Add : Depreciation 1,24,729 91,455 67,103 49,266 36,193
Add : Interest on Loans 51,388 43,237 33,500 22,640 10,519
Changes in Working Capital

Changes in Current Assets -1,24,675 -3,866 -3,987 -4,112 -4,241

Changes in Current Liabilities 59,083 15,110 12,903 11,262 10,181
Sub total : 2,01,676 2,71,155 2,63,597 2,58,126 2,54,146
B. Cashflow from Investing Activities
Statement of Cashflows

Purchase of Fixed Assets -4,69,640 - - - -

Other Investment Income - - - - -
Sub total : -4,69,640 - - - -
C. Cashflow from Financing Activities

Proceeds from raising Capital 1,20,000 - - - -

Proceeds from Longterm borrowings 4,75,000
Repayment of Longterm borrowings -44,140 -84,134 -93,871 -1,04,731 -1,16,852
Interest on borrowing paid -51,388 -43,237 -33,500 -22,640 -10,519
Longterm Liabilities/Provisions paid

Owners' drawings / Dividend paid

Sub total : 4,99,472 -1,27,371 -1,27,371 -1,27,371 -1,27,371

D. Net Cashflows 2,31,507 1,43,784 1,36,225 1,30,755 1,26,775
E. Cash & Equivalents - Opening - 2,31,507 3,75,291 5,11,516 6,42,271
F. Cash & Equivalents - Closing 2,31,507 3,75,291 5,11,516 6,42,271 7,69,046

Project Report 28-04-2018 Page 11

 Particulars Year 1 Year 2 Year 3 Year 4 Year 5
SOURCES OF FUNDS :

A. Funds Generated from Operations:

Net Profit after Tax 91,150 1,25,218 1,54,078 1,79,069 2,01,496

Add : Depreciation 1,24,729 91,455 67,103 49,266 36,193
Add : Interest on Loans 51,388 43,237 33,500 22,640 10,519
Less : Non Operating Incomes

Funds from Operations : 2,67,267 2,59,911 2,54,681 2,50,976 2,48,207

B. Funds Contributed by Owner(s):

Capital Contribution
Fund Flow Statement

1,20,000 - - - -
Owner(s)' Drawings - - - - -
Funds from Owners : 1,20,000 - - - -
C. Funds from NonOperating Activities :

D: Funds from Long term Borrowings : 4,75,000

E. Funds from Other Sources

Total Sources of Fund ( A+B+C+D+E) 8,62,267 2,59,911 2,54,681 2,50,976 2,48,207

APPLICATIONS OF FUNDS :

F. Funds spent for Capital Expenditure: 4,69,640 - - - -

G. Funds spent on Investments :

H. Funds spent for Repayment of Borrowings 95,528 1,27,371 1,27,371 1,27,371 1,27,371
I. Funds spent on Other Activities

Total Applications of Funds : 5,65,168 1,27,371 1,27,371 1,27,371 1,27,371

Net Changes in Working Capital 2,97,099 1,32,540 1,27,310 1,23,605 1,20,836

Particulars Average Year 1 Year 2 Year 3 Year 4 Year 5

A. Profitability

Operating Profit Ratio 20.15% 20.84% 20.51% 20.16% 19.80% 19.43%

Net Profit Ratio 9.32% 6.20% 8.19% 9.69% 10.82% 11.70%

Return on Investment 25.26% 15.33% 21.06% 25.91% 30.11% 33.88%

Financial Ratios

B. Short Term Solvency - - - - -

Current Ratio 7.30 6.03 6.79 7.39 7.92 8.38

Liquid Ratio 122.23 64.70 98.27 126.50 150.55 171.12

Cash Reserve Ratio 5.69 3.92 5.06 5.87 6.53 7.09

C. Long Term Solvency

Debt to Equity Ratio 0.77 2.04 1.03 0.52 0.22 0.04

Debt Service Coverage Ratio 2.15 2.80 2.04 2.00 1.97 1.95

Project Report 28-04-2018 Page 12

 Concluding Remarks

The project has high potentials of achieving targeted revenue, due to the genuine intention of selling quality products at
reasonable price and the favorable location aspect.

Total cost of the project is INR 5.95 lakhs, out of which the proprietor is contributing INR 1.2 lakhs, and the remaining INR
4.75 lakhs is being requested from the bank as a loan under the Mudra loan of Indian Government at competitive interest rate,
repayable within 5 years. Besides 35% is expected from Government as subsidy

The Proprietor Ms.Geetha Nair has acquired sufficient experience in similar businesses during the past years.

The project, based on the financial projections, is expected to maintain an average net profit ratio of 9.32%, average return on
investment of 25.26% and average DSCR of 2.15, which are positive signs of the project's repayment capacity and profitability.
The project is expected to Payback the initial investments within a period of 3.64 years with an internal rate of return of
10.35%..

The loan is proposed to be paid off with interest in 60 equal monthly instalments, with a gestation of 3 months. There is
sufficient cashflow for meeting the obligation of the business regarding payment of interest, instalment of loan and all other
operational expenses.

On the basis of the above facts and observations, the proposed project (GN Food Products) is considered financially
feasible and the loan amount is sufficiently secured with assurance of promt repayment.

Place : Adoor

Date : 28-04-2018 Prepared by Submitted by

V4U Business Services (Geetha Nair)

ASSUMPTIONS & WORKING NOTES

1 This project report has been prepared based on the data and information provided by the Proprietor and his representative.
2 Depreciation has been computed on Written Down Value method, starting from the date the asset is put to operational use.
3 Other Assumptions and considerations used for calculations in this Project Report are mentioned below:

Values are displayed, rounding off to 1 Depreciation Rates

% of Operational Cost that is Variable 10.00% Assets Life (Yrs) Salvage %
Bank Interest Rate for Term Loan 11.00% Buildings 30 5.00%
Bank Interest Rate for WC Loan 10.00% Plant & Machinery 10 5.00%
Bank Interest Rate for Auto Loan 0.09 Furniture & Fittings 8 5.00%
Bank Interest Rate of Deposit 7.00% Motor Vehicles 8 5.00%
% of Term Loan to be requested 100% Office Equipment 8 5.00%
% of WC Loan to be requested 0% Intangible assets 8 1.00%
% of Vehicle Loan to be requested 0% Income Tax Rate 30.00%
Accounting Year Starts from January Method of Depreciation WDV
% of Customers who avails Credit 10.00% Loan Tenure (Months) 60
% of Suppliers who gives Credit 5.00% Capacity utilization during 1st year 70%
Average Credit Days to Debtors 30 Capacity utilization growth rate per annum 3%

Average Credit Days from Creditors 30 Revenue growth rate per annum 1%
Inventory Turnover (days) 0 Expense growth rate per annum 2%

Project Report 28-04-2018 Page 13