Project Title : Technology Upgrading of RCM Audio and Led Wall Through

the Acquisition of Equipments

Beneficiary : RCM Audio and Led Wall Provider

Location : Banlas, Agoho, Mambajao, Camiguin

Project Cost : Proponent- Php 3,112,168.33

DOST-SETUP- Php 2,918,674.00
Total- Php 6,030,842.33

QUANTITY ITEMS OF EXPENDITURES AMOUNT (Php)

EQUIPMENT
Robotic and Lights Controller

- Complete set of lights

1 2,551,324
- 10 static playbacks
- 100% brighter, 15.6” screen
- 10 programmable executor buttons
Digital Audio Mixer

1 - 24 channels 367,350
- Software remote control, iOS, android, windows
and Linux

TOTAL 2,918,674.00
Project Title : Technology Upgrading of RCM Audio and Led Wall Through
the Acquisition of Equipments

Beneficiary : RCM Audio and Led Wall Provider

Location : Banlas, Agoho, Mambajao, Camiguin

Project Cost : Proponent- Php 3,112,168.33

DOST-SETUP- Php 2,918,674.00
Total- Php 6,030,842.33

TAB ITEM
A FRONT PAGE LIB
B PROJECT PROPOSAL WITH ATTACHMENTS
C LETTER OF INTENT
D TNA 01
E TNA 04
F DOCUMENTARY REQUIREMENT
G QUOTATIONS FROM SUPPLIERS
H RTEC REPORT

SETUP Form 001 Page 2 of 21

 Department of Science and Technology Region 10
SMALL ENTERPRISE TECHNOLOGY UPGRADING PROGRAM (SETUP)

PROJECT PROPOSAL

PROJECT TITLE : Technology Upgrading of RCM Audio and Led Wall Through
the Acquisition of Equipment

PROPONENT : Rufy De la Cruz Madarieta

Banlas, Agoho, Mambajao, Camiguin

PROJECT COST : PhP 6,030,842.33

AMOUNT REQUESTED: PhP 2,918,674.00

OBJECTIVES:

General Objectives:

To upgrade the existing process and services of RCM Audio and Led Wall through
acquisition of S&T Equipment.

Specific Objectives:

More specifically, it aims to:

1. Create quality sound, lighting, video systems.
2. Provide installation excellence.
3. Provide complete professionally lights and sound system
4. Upgrade from analog to digital components

SETUP Form 001 Page 3 of 21

PROJECT BACKGROUND:
A. Company Profile

Name of Firm RCM Audio

Address Banlas, Agoho, Mambajao, Camiguin
Contact Person Ruffy de la Cruz Madarieta
Contact No. 0935-244-2147
e-mail Address
Year Established 2004

√ Single Partnership Cooperative Corporation

Type of Organization Proprietorship
(Please check √ Profit Non-Profit
appropriate box in Micro √ Small Medium
each row) (P3M Total (P3,000-P1.5M (P15,000 – P100M Total Asset
Asset Total Asset Value)
Value or less) Value)
Type of Male Female Total
Employment
Number of Employee Direct Workers
(Please indicate Production 18
number Non-
of employees) Production
Indirect/Contract
Workers
Total 18
Office Registration Date of Registration
Number
DTI 05149124 January 25, 2018
Registration SEC
CDA
Others, please
specify
Business Permit 2019-1522 January 28, 2019

Food Processing Furniture

Business Activity/ies: Metals and Engineering Agriculture/Marine/Aquaculture
(please appropriate Gifts, Decors and Handicraft √ Others, please specify: CREATIVE
box) ARTS

Products/Services Audio and LED Wall Rental

Brief Enterprise The business started since 2004. His uncle gave him a sound system from Davao. Mr.
Background Madarieta then started to tie up with a bar for a disco. He started with 3 workers. Year
2007, the market demand started to grow and Mr. Madarieta started to research for
other equipment. Year 2011, they started Professional Sound System.

SETUP Form 001 Page 4 of 21

 B. Management/Administrative Aspect
1. Organizational chart
RCM Audio and Led Wall Provider is a sole proprietorship type of business
owned and operated by Mr. Rufy De la Cruz Madarieta. The enterprise is duly
registered with the Department of Trade and Industry (DTI) bearing the
registration number 05149124 dated January 25, 2018 renewable for 5 years. The
business is also registered with the Local Government Unit of Mambajao under
Business Permit no. 2019-1522

The owner of the business as well as the manager is responsible in

organizing, controlling, staff hiring and final signatories of all documentary
requirements related to the operation of the business. The production workers are
assigned to maintain cleanliness and conduct safety procedures during operation
to enable high quality products.

General Manager

Sound Technician Sound Technician

Sound Technician LED Wall
(UNIT 1: Lights (UNIT 2: Lights
(Live Band Setup) Technician
and Sound) and Sound)

Figure1. Organizational Chart

SETUP Form 001 Page 5 of 21

 C. Plant Site or location (including Vicinity Map)
The plant site is located at Banlas, Agoho, Mambajao, Camiguin. It is along
the national hi-way which is accessible to all kinds of vehicles to facilitate
deliveries of raw materials, equipment, including finished goods deliveries and all
other needs of operations.

RCM Audio and

LED Wall Provider

Figure 2. Vicinity Map

D. Capacity, Volume and Cost of production

Table 3. Actual Annual Cost of Production by Material
LED Wall Material:
Particulars Unit Cost Unit of Measurement Volume used per Total Cost per
year Year
Led Panels 14,500.00 pc 10 145,000.00
Video processor 3,000.00 pc 20 60,000.00
Wall Mount Brackets 250.00 pc 150 37,500.00
Main power cables 150.00 pc 125 18,750.00
power jumper cables 350.00 pc 125 43,750.00
data jumper cables 115.00 pc 125 14,375.00
front service tools 500.00 pc 120 60,000.00
Sound System Material
spare power supplies 500.00 pc 120 60,000.00

SETUP Form 001 Page 6 of 21

 spare modules 500.00 pc 180 90,000.00
signal processors 350.00 pc 181 63,225.00
Amplifiers 4,500.00 pc 20 90,000.00
Direct Labor 1,050,000
Overhead Expenses 2,854,440
TOTAL 4,587,040

Table 3a. Projected Annual Cost of Production by Material

LED Wall Material
Particular Year 1 Year 2 Year 3 Year 4 Year 5
Led Panels 174,000.00 208,800.00 250,560.00 300,672.00 360,806.40
Video processor 72,000.00 86,400.00 103,680.00 124,416.00 149,299.20
Wall Mount Brackets 45,000.00 54,000.00 64,800.00 77,760.00 93,312.00
Main power cables 22,500.00 27,000.00 32,400.00 38,880.00 46,656.00
power jumper cables 52,500.00 63,000.00 75,600.00 90,720.00 108,864.00
data jumper cables 17,250.00 20,700.00 24,840.00 29,808.00 35,769.60
front service tools 72,000.00 86,400.00 103,680.00 124,416.00 149,299.20
Sound System Material:
spare power supplies 72,000.00 86,400.00 103,680.00 124,416.00 149,299.20
spare modules 108,000.00 129,600.00 155,520.00 186,624.00 223,948.80
signal processors 75,870.01 91,044.01 109,252.81 131,103.37 157,324.04
amplifiers 108,000.00 129,600.00 155,520.00 186,624.00 223,948.80
Direct Labor 1,140,000.00 1,368,000.00 1,641,600.00 1,969,920.00 2,363,904.00
Overhead Expenses 3,425,328.00 4,110,393.60 4,932,472.32 5,918,966.78 7,102,760.14
Total 5,384,448.01 6,461,337.61 7,753,605.13 9,304,326.15 11,165,191.38

Table 4. Actual Direct /Variable Cost of Production by Product

Product/Services Quantity Per Unit Average Unit Total Cost
Annum Cost
Lights & Sound System Rentals 26 set 32,000.00 828,800.00
LED Wall Rental 13 pc 35,000.00 455,000.00
Sound Box Manufacturing 35 pc 45,000.00 1,576,700.00
LED Wall Provider 5 pc 600,000.00 2,968,000.00
Other Income 320,600.00
Total 6,149,100.00

Table 4a. Projected Y1 Annual Cost of Production by Product

Product/Services Quantity Per Unit Average Unit Total Cost
Annum Cost
Lights & Sound System Rentals 30 set 32,000 960,000.00
LED Wall Rental 15 pc 35,000 525,000.00
Sound Box Manufacturing 40 pc 45,000 1,800,000.00

SETUP Form 001 Page 7 of 21

 LED Wall Provider 7 pc 600,000 4,200,000.00
Total 7,485,000.00

E. Raw material/s used and sources of raw material

With the firm’s present location, raw materials are not easily procured. The proprietor
procures the supply imported from China to Cebu City. Table 5 shows the raw materials
used and its main source.

Table 5. Raw Materials and Sources

Raw Material Main source
LED Panels China
Video Processor Cebu City
Wall Mount Brackets Cebu City
Main Power Cables Cebu City
Power Jumper Cables Cebu City
Data Jumper Cables Cebu City
Front service Tools Cebu City
Spare Power Supplies Cebu City
Spare Modules Cebu City
Signal Processors Cebu City
Amplifiers Cebu City

MARKETING ASPECTS
Market Demand

There are a lot of celebrations and events are being held in the different places in the
Philippines, most of these are festivals, concert, live band, parties and even production events.
With this above mentioned, projects are engage with a huge and massive live audience. In
very particular manner, this project couldn’t be possible done without the lights and sound
system. There are different lights and speakers, accessories clinched along an assortment of
sizes. There are large scales of rental services here in the Philippines. For Camiguin and
Region 10, RCM offers the complete services for lights and sound system compare to what
the other local rental services. In all aspects RCM Audio and Led Wall Provider is accurately
in detailed and competitive in terms of performance and reliability in high-profile. Equipment
rental industry revenues have been growing at a rate of about four times more than the general
economy over the past years. Now, this only showed positive projection towards rental of
audio and lighting equipment. As long as community used to handle and conduct many
different occasions and events, the demand for lights and audio installation will remain vibrant
and strong.

LED Lights are significantly more efficient than conventional lighting products and produce
more light per watt. Moreover, LED have a significantly longer lifespan compared to
conventional light with estimates suggesting that LEDs have 35,000 to 50,000 hours of useful
life, though time to complete failure may be longer. Some of the other advantages of LEDs
include low maintenance costs, sturdiness, safety, non-toxicity, etc.

The total demand for loudspeakers in the Philippines in 2019 is estimated at 163,200 units,
with the market forecast to grow at an average yearly rate of 20%. With the continuous efforts
from the manufacturing firms of light, audio-video products are likely to boost the market
growth in the forthcoming years.

SETUP Form 001 Page 8 of 21

RCM Audio and Led Wall Provider engaged in the business of specializing pro-audio, stage
lighting, and video projection system installations in Region 10. For 15 years, RCM has been
dedicated to provide an innovative look to the services and products they offer and introduce
new technologies and solutions with the rising demand for advanced light, audio-video
experience. Currently, RCM caters 80 % of all the 58 Barangays in Camiguin Province
celebrating all year round fiestas and other events for lights and sound system.

Shown below is the projected market size for five years of RCM Audio and Led Wall Provider
that they will be able to provide to the market after the intervention.

Total Existing
Services Specifications Year 1 Year 2 Year 3 Year 4 Year 5
Volume/Year
Lights&Sound System Rentals Basic lights and sound system 26 30 36 43 52 62
LED Wall Rental Standard size of 9.8ft x 13.12ft/ 8 hrs 13 15 18 22 26 31
Sound Box Manufacturing 1800 watts, 18" sub woofer 35 40 48 58 69 83
Led Wall Provider Standard size of 9.8ft x 13.12ft 5 7 8 10 12 15

Customers

Company Unit Revenue

Brgy. Soro-Soro, Mambajao Fiesta 1 Basic Lights and Sound Rental P 24,000
Brgy. Sto Niño, Catarman Fiesta 2 Basic Lights and Sound Rental P 24,000
Brgy. Cabuan, Guinsiliban Fiesta Basic Lights and Sound with LED Wall P 67,000
Rental
Brgy. Cabuan, Guinsiliban Basic Lights and Sound Rental P 24,000
(Barangay Day)
Brgy. Baylao Fiesta Basic Lights and Sound with 2 sets LED P 94,000
Wall Rental
Brgy. Magting, Mambajao Fiesta Basic Lights and Sound Rental P 24,000
Brgy. Anito, Mambajao Fiesta Basic Lights and Sound Rental P 24,000
Brgy. Catahugon, Mahinog Fiesta 2 Basic Lights and Sound Rental P 24,000
Sitio Mapa, Tupsan Basic Lights and Sound Rental P 24,000
Brgy. Lawigan, Catarman Basic Lights and Sound Rental P 24,000
LGU-Mahinog Lights, Sounds and LED Wall Rental P 70,000
Brgy. Tubod, Mahinog Fiesta Basic Lights and Sound Rental P 24,000
Brgy. Kuguita, Mambajao Fiesta Lights, Sounds and LED Wall Rental P 59,000
Sitio Abbu, Mambajao Basic Lights and Sound Rental P 32,000
Camiguin Province Tourism Stage and Full Set-Up Led Wall P 120,000
Brgy. Manduwaw, Catarman 2 Basic Lights and Sound Rental P 24,000
Mambajao, Camiguin Charter Day Lighhts, Sound, LED Wall Rental P 250,000
Catarman, Camiguin Lights, Sound, LED Wall Rental P 200,000
Brgy. Liong, Guinsiliban Basic Lights and Sound Rental P 24,000
Brgy. San Roque, Mahinog Basic Lights and Sound Rental P 24,000
Brgy. Maac, Guinsiliban Basic Lights and Sound P 32,000
Local Government of Mambajao Lights, Sound and LED Wall Rental P 280,000
Lanzones Festival Lights, Sound and LED Wall Rental P 850,000
CBA Lights and Sound P 1,350,000
ROLAND Lights and Sound P 1,200,000
K&L Pro Audio P 1,300,000
CSA Pro Audio P 1,200,000
C-ONE Marketing LED Wall P 1,150,000
Sovereign Angel P 1,450,000
Marino Lights N LED Wall P 1,000,000
MORESCO 1 P 4,000,000
MARVIN LED Wall P 2,000,000

Note: For outside Camiguin clients, the term of payment is 50% down payment and
the remaining 50% is for installment payable for 24 months.

SETUP Form 001 Page 9 of 21

 Market Share
Market share refers to the market served by the firm.
A. Product specifications and product price
RCM Audio & LED Wall Provider products, whether addressing to the electronics industry or
creative, arts and entertainment activities, all share a common goal: production flexibility and
cost reduction for end users.
Table 7. Product Specification and Product Price
Product/Services Specification Price/Unit (Php)
LED Wall Standard size: 9.8ft x 13.12ft / P 35,000/ 8 hours
RENTAL
Lights and Sound System Basic lights and sound P 32,000 – P 180,000
system/ RENTAL
Loudspeakers 1800 watts, 18” subwoofer P 45,000

B. Distribution Channel

RCM Audio & LED

Endorsers End-user
Wall Provider

Figure 3. Channels of Distribution

C. Competitors
The identified competitor in Camiguin Island noted of the audio rental service is
Cutab Sound Machine and for the LED Wall the identified competitors are in
Cagayan de Oro City and Cebu City. Due to the confidentiality of the data, their
capacity to supply will not be quantified.

D. Existing problems (if any)

The firm used analog equipments which changes over a time period. Therefore,
the firm needs upgrading to meet the demands of the fast changing technology
and the clients

E. Market plans/strategies
RCM Audio and LED Wall Provider have determined their market and linkages.
Through social media accounts and the proposals of RCM to other places they
can promote their products and services.

TECHNOLOGICAL ASPECTS
A. Process Flow of LED Wall Provider
Time Existing Equipment Production Process Proposed Time
Equipment
60 minutes Order 60 minutes
30 minutes Programming 30 minutes
120 minutes Assembly 30 minutes

SETUP Form 001 Page 10 of 21

180 minutes Led Panels, Lights and Sound Installation  Digital 30 minutes
180 minutes System Testing Audio 30 minutes
Mixer
 Robotics
and Light
Controller

60 minutes Delivery 30 minutes

690 minutes 270 minutes
Total Time difference : 375 minutes
Figure 3. Existing and Proposed Process Flow and Rates, Equipment with
time motion

Process Flow of Loud Speaker

The bottleneck of the process is the initial and final testing in which the manufactured
speaker with the lights controller and audio mixer will be executed and tested according
to the demand of the customer.

The LED lights use the same current (direct current) as the speaker wire does to transmit
the sound, you can tap the lights into the speaker output so they will flash in time with the
music. It also depends on the demand of the customer, so a separate lights controller will
also be needed to test the initial flash of the lights with the loudspeaker.
Time Equipment Production Process

60 minutes Sketching
30 minutes Table Saw Cutting of box woofer and plywood
Jigsaw materials
120 minutes Assembly of the materials
60 minutes Painting of the sound box
120 minutes 1800 watts’ sub speaker
1800 watts’ sub-woofer engine
Speaker terminal plate
Speak on
Metal holder Installation of the components
Soldering Iron
Speaker wire
Wire cutters/ strippers
The speaker will undergo initial testing for the flash
of lights (based on the demand of the customer) so
a lights controller will be used to finalize the
brightness and the programming of execution of
lights. Initial Testing
The audio mixer is also used to test the sound
intensity (Gain) and the amplification of the
speakers.

120 minutes Test the terminals Polarity Check and Adjustments

120 minutes Lights Controller and Audio Mixer Final Testing
690 minutes

SETUP Form 001 Page 11 of 21

 Material balance

As for the material balance offered by RCM, the quantitative amount of the inputs and outputs
of the process cannot be defined since the products are already assembled according to the
demands of the client. The quality offered is the top most priority of the firm.

B. Existing Production Equipment

Shown below is the existing production equipment. The equipment already depreciated and
has higher cost for maintenance.
Table 8. Existing Equipment
Equipment Specifications No. of Year Status / Extent of Utilization*
Units Acquired

LED Wall Screen 2 2015 Good Condition/ 90% extent of utilization

Robotic Lights 10 2015 Good Condition/ 90% extent of utilization
PAR Leds 40 2014 Good Condition/ 90% extent of utilization
Line Arrays 8 2013 Good Condition/ 90% extent of utilization
Sub Speakers 20 2015 Good Condition/ 90% extent of utilization
Drum Set 1 2014 Good Condition/ 90% extent of utilization
Mid Speakers 12 2013 Good Condition/ 90% extent of utilization
Iron Trusses 20 2014 Good Condition/ 90% extent of utilization
Scaffolding 10 2013 Good Condition/ 90% extent of utilization
Projector 1 2015 Good Condition/ 90% extent of utilization
Power Amplifiers 12 2014 Good Condition/ 90% extent of utilization
Light Controller 8 2015 Good Condition/ 90% extent of utilization
Audio Mixer 4 2015 Good Condition/ 90% extent of utilization

C. Technical constraints on the production line and proposed S&T intervention

Table 9. Technical Constraints and Proposed S&T Intervention
Process/Existing Proposed S & T Proposed S & T related equipment- Impact
Practice/ Intervention skills upgrading
Problem

 High-
1. Existing quality light
Equipment to
equipment are Digital Audio Mixer and sound
upgrade the
manual/analog Robotic and Lights Controller  Enhance/
quality of the
and depreciated alter the
demands
sound of
the sources

SETUP Form 001 Page 12 of 21

D. Proposed Plant Lay-out
Proposed plant lay-out is arranged according to the process operation, including the
production process, equipment, storage, dispatch and administration.

Figure 5. Plant Lay-out

E. Cost and Specification of S & T Intervention-Related Equipment
S & T Intervention-related Qty Unit Cost Total Cost
Equipment/specification (Php) (Php)
Digital Audio Mixer 1 unit 367,350 367,350
Robotic and Lights Controller 1 set 2,551,324 2,551,324

Total 2,918,674

F. List of Equipment fabricators (name and address)

Company Name
Company Name
Company Name Address and
Address and
Equipment and Address and Contact Contact Numbers
Contact Numbers of
Minimum Specifications Numbers of of
Supplier/Fabricator
Supplier/Fabricator 2 Supplier/Fabricator
1
3

SETUP Form 001 Page 13 of 21

 1-set Robotic Lights and Name of Supplier: Sign Name of Supplier: Name of Supplier:
Controllers Audio Enterprises DreamCircuits Electronics Techno Core Trading
 100 % brighter, Address: Tagum City Supplies & Allied Services Address: Ilustre St.,
15.6’’ screen Contact Person: Address: 94-Norey Galindo Davao City
Contact No. 0907- Bldg. Roxas Ave. Davao Contact Person:
1-unit Digital Audio Mixer 1790-912/ 0936-4636- City, Philippines Kristine C. Cornel
 Digital remote mixer 694 Contact Person: Contact No.:
 Inputs or line: 1x Contact Number: (082)
stereo RCA 222-5954

G. Schedule of Activities for the proposed project

2019 2020 2021 2022
ACTIVITIES 2N 3R 4T 1S 2N 3R 4T 1S 2N 3R 4T 1S 2N 3R 4T
D D H T D D H T D D H T D D H

Release of funds

Building
construction or
renovation
Issuance of
purchase orders

Installation of
lines for utilities

Delivery and
commissioning

Training of
workers
Submission of
official receipts,
audited financial
report,
Acquisition
Receipt of
Equipment
(ARE), Inventory
of Equipment,
and Liquidation
Report of funds
MPEX
Consultancy
Packaging &
labeling training
& adaptation
Promotions
Marketing &
Market
Networking

SETUP Form 001 Page 14 of 21

 Quarterly status
report
Completion/Ter
minal Report

H. Expected Output/Impact (measured results)

Impact Indicators
1.Percentage Increase in
the production capability
2.Percentage increase in
production volume
3.Percentage decrease in
Rejects
Estimated additional volume
of products that will be
produced after DOST’s
intervention
= R2- R1 x 100
R1
Quantitative/Qualitative
Impact
The quality of the products are expected to
increase with the intervention
Significant increase in production volume from 79
per year to 92 per year volume

Where:
R1- rejects before DOST Minimize spoilage
intervention
R2 – Rejects after DOST
intervention
4.Expansion of product Estimated number of Increase of market and linkages.
outlets clients/customers that will be
served
5.Generate additional No additional worker.
employment
6.Improved Quality/ There will be a great impact on quality with the
appearance of the product infusion of proposed equipment after the project
(s) will be realized. It will improve the
product/services quality in terms of the output of
the product

WASTE MANAGEMENT/DISPOSAL
A. Volume of waste generated monthly
Waste Volume per month
Empty Oil Cans 3 Gallon every 3 months
Plastic Bags 50 Grams
Paint Cans 10 Cans (Gallon)
Lacquer Thinner Cans 7 Cans (Gallon)
Smoke Fluid Cans 7 Cans (Gallon)
Aluminum Residues ½ Kilogram

B. Kinds of wastes (plastics, paper, metals, chemicals, pollutants, etc.)

The kinds of waste produce are:

 Empty Oil Cans

SETUP Form 001 Page 15 of 21

  Plastic Bags
 Paint Cans
 Lacquer Thinner Cans
 Smoke Fluid Cans
 Aluminum Residues

C. Methods of Disposal
Empty cans are collected by their neighbors and sold to junkshop.

FINANCIAL ASPECT
A. Financial capacity
Result from Projected Financial Statements Optimal Criteria
Financial Indicator Year 1 Year 2 Year 3 Year 4 Year 5

LIQUIDITY
Net Working Capital 2,218,977.63 3,602,710.36 5,813,482.68 9,447,746.52 15,169,105.57 Positive NWC
Net Liquid Capital 2,218,977.63 3,602,710.36 5,813,482.68 9,447,746.52 15,169,105.57 Positive NLC
Current Ratio 2.27 2.23 2.61 3.26 4.24 2.0 or higher
Acid Test Ratio 2.27 2.23 2.61 3.26 4.24 1.0 or higher

LEVERAGE/CAPITAL POSITION
Debt to Total Assets 44.16% 38.83% 30.60% 23.97% 20.38% 50% or lower
Equity to Total Assets 55.84% 61.17% 69.40% 76.03% 79.62% 50% or higher
Debt to Equity 0.79 0.63 0.44 0.32 0.26 1.0 or lower

PROFITABILITY
Gross Profit Margin 75.05% 76.00% 76.96% 77.90% 78.82%
Net Profit Margin 15.93% 19.04% 21.89% 24.50% 26.91%
Return on Assets (ROA) 18.74% 23.82% 29.06% 32.72% 34.32%
Return on Equity (ROE) 33.56% 38.94% 41.87% 43.04% 43.10%
Return on Investment (ROI) 21.61% 32.28% 46.45% 65.18% 89.82% > opportunity cost of capital

Partial Budget Analysis

Positive Effects and cost Negative Effects and cost

Additional Income Additional Cost

2,030,750.00 695,335.41
Total positive effect Total negative effect
P2,030,750 P695,335.41
Net Effect---------- P 1,335,414.59

Net Income Ratio

Net Income Ratio was computed by dividing the Net Income over Net Sales which means
for every peso sale, contributes 0.19% (before intervention) and 0.23% (after intervention)
towards the net income which shows that the project has an impact to the business but
still on the adjustment period. For the next 4 years, the trend is increasing and shows that
the business or project is profitable.

Liquidity Ratio

Liquidity Ratio was computed by dividing the Current Assets over Current Liabilities.
The proponent has a current liability of 1.30 (before intervention) and on the next year
after intervention the liability increases.

SETUP Form 001 Page 16 of 21

Return on Investment, ROI

Return on Investment or ROI was computed by computing the Total Net Income divided
by the investment cost which is 22% on the first year of operation and increasing over the
years.

B. Financial Constraints
Basis for data and figures is an In-house Financial Statement. The financial constraint of
the firm is they don’t have enough funds to upgrade its equipment. The available current
asset and working capital of the company is used for the purchase of raw materials and
other maintenance thus, it is the reason for the proponent in seeking assistance to
upgrade its equipment and attain better services and improved production to ensure
quality in its products.

C. Cash Flow Financial Statement/Balance Sheet

The projected financial statement shows that there is a significant increase in income,
enough cash to sustain the operation and the firm can go to a higher level after the first
year of operation.

Refer to the attachments for the detailed projected Cash Flow, Financial Statement and
Balance Sheet.

D. Budgetary Requirement for the Proposed Project

S & T Intervention-related Qty Unit Cost Total Cost

Equipment/specification (Php) (Php)
Digital Audio Mixer 1 367,350 367,350
Robotic and Lights Controller 1 2,551,324 2,551,324
Total 2,918,674

E. Proposed Refund Schedule

Total Financial Assistance Php 2,918,674.00

Monthly Amortization 81,074.28
Year Year 1 Year 2 Year 3 Year 4
Months -
January 81,074.28 81,074.28 81,074.28
February 81,074.28 81,074.28 81,074.28
March 81,074.28 81,074.28 81,074.28
April 81,074.28 81,074.28 81,074.28
May 81,074.28 81,074.28 81,074.28
June 81,074.28 81,074.28 81,074.28
July 81,074.28 81,074.28 81,074.28
August 81,074.28 81,074.28 81,074.28
September 81,074.28 81,074.28 81,074.28
October - 81,074.28 81,074.28 81,074.28
November - 81,074.28 81,074.28 81,074.28
December 81,074.28 81,074.28 81,074.28
Total 81,074.28 972,891.33 972,891.33 891,817.06

SETUP Form 001 Page 17 of 21

Prepared by:

Christine S. Jardin
Project Assistant I

Submitted by:

RUFY D. MADARIETA
Proprietor, RCM AUDIO AND LEDWALL PROVIDER

Reviewed and Recommending Approval:

Miriam A. De La Plaza
PSTD-Camiguin

Date of submission: November 26, 2019

SETUP Form 001 Page 18 of 21

ATTACHMENTS:

RCM Audio and LED Wall Provider

TOTAL PROJECT COST
EXISTING TO BE ACQUIRED
Total
PROPONENT DOST
Particulars
Existing Assets
Building and Improvement 170,000.00 170,000.00
Sound system and Audio Equipment 1,700,000.00 1,700,000.00
Led Wall Provider Equipment 1,000,000.00 1,000,000.00
Transportation Equipment 500,000.00 500,000.00
Office Equipment 120,000.00 120,000.00
Other Equipment 80,000.00 80,000.00
Sub-total 3,570,000.00 3,570,000.00
To be Acquired
Robotic and Lights Controller 2,551,324.00 2,551,324.00
Digital Audio Mixer 367,350.00 367,350.00
Sub-total 2,918,674.00 6,488,674.00
Proponent's Counterpart
Freight and Electrical Installation 10,000.00 10,000.00
Building Improvement 50,000.00 50,000.00
Sub-total 3,510,000.00 2,918,674.00 6,428,674.00

Working Capital (1 month) -

Direct Materials 56,883.33 56,883.33
Direct Labor 87,500.00 87,500.00
Overhead Expenses 237,870.00 237,870.00
Selling and Administrative Expenses 15,578.33 15,578.33
Sub-total 397,831.67 397,831.67
Total Project Cost 3,112,168.33 2,918,674.00 6,030,842.33

RCM AUDIO AND LEDWALL PROVIDER

Projected Cash Flow

Particulars Pre-Operation Year 1 Year 2 Year 3 Year 4 Year 5

Cash Inflows
Cash Income 7,770,857.50 9,712,092.25 12,158,048.04 15,239,952.32 19,123,151.73
Output Tax from Sales 981,582.00 1,226,790.60 1,535,753.44 1,925,046.61 2,415,556.01
Accounts Receivables 130,900.00 408,992.50 511,162.75 639,897.27 802,102.75
Unused Supplies 128,600.00
Additional Investment -
Proceeds from DOST 2,918,674.00
Total Cash Inflows 3,047,274.00 8,883,339.50 11,347,875.35 14,204,964.22 17,804,896.20 22,340,810.49

Cash Outflows
Robotic and Lights Controller 2,551,324.00
Digital Audio Mixer 367,350.00
Freight and Electrical Installation 10,000.00
Building Improvement 50,000.00
Purchase of Direct Materials (includes input VAT) 917,414.41 1,100,897.29 1,321,076.74 1,585,292.09 1,902,350.51
Payment for Direct Labor 1,140,000.00 1,368,000.00 1,641,600.00 1,969,920.00 2,363,904.00
Payment for Factory Overhead 3,425,328.00 4,110,393.60 4,932,472.32 5,918,966.78 7,102,760.14
Sales returns and allowances 81,798.50 102,232.55 127,979.45 160,420.55 201,296.33
Refundable to DOST - - - -
Payment of Transfer of Ownership 14,593.37
Payment for VAT 883,287.60 1,108,837.32 1,394,209.50 1,755,193.89
Payment of Income Tax 538,374.75 841,120.78 1,243,257.06 1,774,760.31
Withdrawals of Owner 250,000.00 275,000.00 302,500.00 332,750.00 366,025.00
Payment for Selling and Administrative Expenses 186,940.00 186,940.00 186,940.00 186,940.00 186,940.00
Total Cash Outflows 2,978,674.00 6,001,480.91 8,565,125.79 10,462,526.62 12,791,755.99 15,667,823.56

NET CASH FLOWS 68,600.00 2,881,858.59 2,782,749.56 3,742,437.60 5,013,140.21 6,672,986.93

Add: Cash balance beginning 605,486.00 674,086.00 3,555,944.59 6,338,694.15 10,081,131.75 15,094,271.96
CASH BALANCE END 674,086.00 3,555,944.59 6,338,694.15 10,081,131.75 15,094,271.96 21,767,258.89

SETUP Form 001 Page 19 of 21

 RCM Audio and LED Wall Provider
PROJECTED INCOME STATEMENT
For the years ended
Year 1 Year 2 Year 3 Year 4 Year 5
Sales 8,179,850.00 10,223,255.00 12,797,945.30 16,042,055.08 20,129,633.40
Less: Sales Returns and Allowances 81,798.50 102,232.55 127,979.45 160,420.55 201,296.33
Net Sales 8,098,051.50 10,121,022.45 12,669,965.85 15,881,634.53 19,928,337.06
Less: Cost of Goods Sold 1,959,120.01 2,350,944.01 2,821,132.81 3,385,359.37 4,062,431.24
Gross Profit 6,138,931.49 7,770,078.44 9,848,833.04 12,496,275.16 15,865,905.82
Less: Selling and Administrative Expenses 186,940.00 186,940.00 186,940.00 186,940.00 186,940.00
Operating Expenses 3,425,328.00 4,110,393.60 4,932,472.32 5,918,966.78 7,102,760.14
Depreciation Expense 684,867.40 684,867.40 684,867.40 684,867.40 684,867.40
Net Income Before Tax 1,841,796.09 2,787,877.44 4,044,553.32 5,705,500.97 7,891,338.28
Income Tax Expense 538,374.75 841,120.78 1,243,257.06 1,774,760.31 2,474,228.25
Net Income After Tax 1,303,421.34 1,946,756.66 2,801,296.25 3,930,740.66 5,417,110.03

Income Tax Computation Year 1 Year 2 Year 3 Year 4 Year 5

Income before tax 1,841,796.09 2,787,877.44 4,044,553.32 5,705,500.97 7,891,338.28
Less: Basic Deduction 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00
other deduction - - - -
Taxable Income 1,791,796.09 2,737,877.44 3,994,553.32 5,655,500.97 7,841,338.28
Basic Tax 125,000.00 125,000.00 125,000.00 125,000.00 125,000.00
Add: Tax of Excess 413,374.75 716,120.78 1,118,257.06 1,649,760.31 2,349,228.25
Total Income Tax 538,374.75 841,120.78 1,243,257.06 1,774,760.31 2,474,228.25

RCM AUDIO AND LEDWALL PROVIDER

PROJECTED BALANCE SHEET
As the years ended

Pre-Operation Year 1 Year 2 Year 3 Year 4 Year 5

ASSETS
Current Assets
Cash 674,086.00 3,555,944.59 6,338,694.15 10,081,131.75 15,094,271.96 21,767,258.89
Accounts Receivables 130,900.00 408,992.50 511,162.75 639,897.27 802,102.75 1,006,481.67
Total Current Assets 804,986.00 3,964,937.09 6,849,856.90 10,721,029.02 15,896,374.71 22,773,740.56

Non-Current Assets
Existing Facilities and Equipment 3,570,000.00 3,570,000.00 3,570,000.00 3,570,000.00 3,570,000.00 3,570,000.00
Robotic and Lights Controller 2,551,324.00 2,551,324.00 2,551,324.00 2,551,324.00 2,551,324.00 2,551,324.00
Digital Audio Mixer 367,350.00 367,350.00 367,350.00 367,350.00 367,350.00 367,350.00
Interest to Own 14,593.37
Proponent's Counterpart
Freight and Electrical Installation 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00
Building Improvement 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00
Total 6,548,674.00 6,548,674.00 6,548,674.00 6,548,674.00 6,548,674.00 6,563,267.37
Less: Accumulated Depreciation 684,867.40 1,369,734.80 2,054,602.20 2,739,469.60 3,424,337.00
Sub-total 6,548,674.00 5,863,806.60 5,178,939.20 4,494,071.80 3,809,204.40 3,138,930.37
Total Non-Current Assets 6,548,674.00 5,863,806.60 5,178,939.20 4,494,071.80 3,809,204.40 3,138,930.37
TOTAL ASSETS 7,353,660.00 9,828,743.69 12,028,796.10 15,215,100.82 19,705,579.11 25,912,670.93

Liabilities and Owner's Equity

Refundable to DOST - - - - -
Payment of Income Tax 538,374.75 841,120.78 1,243,257.06 1,774,760.31 2,474,228.25
VAT Payable 883,287.60 1,108,837.32 1,394,209.50 1,755,193.89 2,211,732.74
Total Current Liabilities - 1,421,662.35 1,949,958.10 2,637,466.56 3,529,954.20 4,685,960.99

Non-Current Liabilities
Refundable to DOST 2,918,674.00 2,918,674.00 2,918,674.00 2,918,674.00 2,918,674.00 2,918,674.00
Total Non-Current Liabilities 2,918,674.00 2,918,674.00 2,918,674.00 2,918,674.00 2,918,674.00 2,918,674.00
Total Liabilities 2,918,674.00 4,340,336.35 4,868,632.10 5,556,140.56 6,448,628.20 7,604,634.99

Owner's Equity
Proponent's, Capital Beginning 4,434,986.00 4,434,986.00 5,488,407.34 7,160,164.00 9,658,960.26 13,256,950.92

Add: Net Income 1,303,421.34 1,946,756.66 2,801,296.25 3,930,740.66 5,417,110.03

TOTAL 4,434,986.00 5,738,407.34 7,435,164.00 9,961,460.26 13,589,700.92 18,674,060.95
Less: Drawings 250,000.00 275,000.00 302,500.00 332,750.00 366,025.00
Proponent's, Capital Ending 4,434,986.00 5,488,407.34 7,160,164.00 9,658,960.26 13,256,950.92 18,308,035.95
TOTAL LIABILITIES & OWNER'S EQUITY 7,353,660.00 9,828,743.69 12,028,796.10 15,215,100.82 19,705,579.11 25,912,670.93

SETUP Form 001 Page 20 of 21

Direct Materials
Particular Existing Year 1 Year 2 Year 3 Year 4 Year 5
Led Panels 145,000.00 174,000.00 208,800.00 250,560.00 300,672.00 360,806.40
Video processor 60,000.00 72,000.00 86,400.00 103,680.00 124,416.00 149,299.20
Wall Mount Brackets 37,500.00 45,000.00 54,000.00 64,800.00 77,760.00 93,312.00
Main power cables 18,750.00 22,500.00 27,000.00 32,400.00 38,880.00 46,656.00
power jumper cables 43,750.00 52,500.00 63,000.00 75,600.00 90,720.00 108,864.00
data jumper cables 14,375.00 17,250.00 20,700.00 24,840.00 29,808.00 35,769.60
front service tools 60,000.00 72,000.00 86,400.00 103,680.00 124,416.00 149,299.20
spare power supplies 60,000.00 72,000.00 86,400.00 103,680.00 124,416.00 149,299.20
spare modules 90,000.00 108,000.00 129,600.00 155,520.00 186,624.00 223,948.80
signal processors 63,225.00 75,870.01 91,044.01 109,252.81 131,103.37 157,324.04
amplifiers 90,000.00 108,000.00 129,600.00 155,520.00 186,624.00 223,948.80
Total 682,600.00 819,120.01 982,944.01 1,179,532.81 1,415,439.37 1,698,527.24

Direct Labor
Particular Existing Year 1 Year 2 Year 3 Year 4 Year 5
Sound Technician (Unit 1) 275,400.00 330,480.00 396,576.00 475,891.20 571,069.44 685,283.33
Assistant 129,600.00 155,520.00 186,624.00 223,948.80 268,738.56 322,486.27
Sound Technician (Unit 2) 275,400.00 330,480.00 396,576.00 475,891.20 571,069.44 685,283.33
Assistant 129,600.00 155,520.00 186,624.00 223,948.80 268,738.56 322,486.27
Honorarium 140,000.00 168,000.00 201,600.00 241,920.00 290,304.00 348,364.80
Allowances 100,000.00 120,000.00 144,000.00 172,800.00 207,360.00 248,832.00
Total 1,050,000.00 1,140,000.00 1,368,000.00 1,641,600.00 1,969,920.00 2,363,904.00

Overhead Expenses
Particular Existing Year 1 Year 2 Year 3 Year 4 Year 5
fuel and oil 364,520.00 437,424.00 524,908.80 629,890.56 755,868.67 907,042.41
Repair and Maintenance 374,460.00 449,352.00 539,222.40 647,066.88 776,480.26 931,776.31
Transportation and Travel 264,800.00 317,760.00 381,312.00 457,574.40 549,089.28 658,907.14
Utilities 536,400.00 643,680.00 772,416.00 926,899.20 1,112,279.04 1,334,734.85
Miscellaneous 359,820.00 431,784.00 518,140.80 621,768.96 746,122.75 895,347.30
Taxes and Licenses 294,600.00 353,520.00 424,224.00 509,068.80 610,882.56 733,059.07
Representation 98,600.00 118,320.00 141,984.00 170,380.80 204,456.96 245,348.35
Charitable Contribution 85,600.00 102,720.00 123,264.00 147,916.80 177,500.16 213,000.19
Communication 65,000.00 78,000.00 93,600.00 112,320.00 134,784.00 161,740.80
Freight and Handling 410,640.00 492,768.00 591,321.60 709,585.92 851,503.10 1,021,803.72
Total Overhead Expenses 2,854,440.00 3,425,328.00 4,110,393.60 4,932,472.32 5,918,966.78 7,102,760.14

Selling and Administrative Cost

Particular Existing Year 1 Year 2 Year 3 Year 4 Year 5
Add: Fringe Benefits 186,940.00 186,940.00 186,940.00 186,940.00 186,940.00 186,940.00
Total 186,940.00 186,940.00 186,940.00 186,940.00 186,940.00 186,940.00

Production Cost
Particulars Existing Year 1 Year 2 Year 3 Year 4 Year 5
Direct Labor 1,050,000.00 1,140,000.00 1,368,000.00 1,641,600.00 1,969,920.00 2,363,904.00
Direct Materials 682,600.00 819,120.01 982,944.01 1,179,532.81 1,415,439.37 1,698,527.24
Overhead Expenses 3,425,328.00 4,110,393.60 4,932,472.32 5,918,966.78 7,102,760.14
TOTAL 1,732,600.00 5,384,448.01 6,461,337.61 7,753,605.13 9,304,326.15 11,165,191.38

Note 1: Cost of Goods Sold

Particulars Existing Year 1 Year 2 Year 3 Year 4 Year 5
Direct Materials Inventory, Beg. 682,600.00 819,120.01 982,944.01 1,179,532.81 1,415,439.37 1,698,527.24
Direct Labor 1,050,000.00 1,140,000.00 1,368,000.00 1,641,600.00 1,969,920.00 2,363,904.00
Total Manufacturing Cost 1,732,600.00 1,959,120.01 2,350,944.01 2,821,132.81 3,385,359.37 4,062,431.24
Cost of Goods Sold 1,732,600.00 1,959,120.01 2,350,944.01 2,821,132.81 3,385,359.37 4,062,431.24

SETUP Form 001 Page 21 of 21