sugarcane biz - case study working file (pdf)
TRANSCRIPT
Legend Financial Numbers in Millions
Numbers in Percentage In Tons
Numbers in Actuals (As per Units) Days
Sr. No. Particulars
Production and Sales Related
0 1 2 3 4 5 Phase 2 6 7 8 9 10
1 Installed Capacity (Bottles) 2400000
2 Available capacity (Bottles) 1200000
3 Bagasse for 6 months (50% of 300 tonnes crushed) (in ton's) 900
4 Capacity Utilization in (%) 50% 55% 65% 75% 75% 80% 83% 90% 100% 100%
5 Capacity Utilization (Bottles) 600000 660000 780000 900000 900000 960000 996000 1080000 1200000 1200000
6 Sales Realization (Juice Bottles) 10 6 6.6 7.8 9 9 12 11.52 11.952 12.96 14.4 14.4
7 Sales Realization (Bagasse) (In Rs.) 1500 0.68 0.74 0.88 1.01 1.01 1.08 1.12 1.22 1.35 1.35
8 Cost Raw Material(Rs/bottle) 2 1.2 1.32 1.56 1.8 1.8 2 1.92 1.992 2.16 2.4 2.4
9 Wages&Salaries 1 1.1 1.21 1.31 1.31 1.5 1.5 1.5 1.5 1.5 1.5
10 Admin Expenses 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.5 0.5
11 Selling Expenses (% sales) 10% 0.6 0.66 0.78 0.9 0.9 1.152 1.1952 1.296 1.44 1.44
12 Annual Maintenance Expenditure 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5
13 Interest Rate(%) payable half yearly 5%
14 Loan Repayment 4 4 4 4 4
Assets Related
Fixed Assets Preoperative Contingency P + C Total Gross Value
Land & Site Dev. 10 0.75 0.63 1.38 11.38
Building 6 0.45 0.38 0.83 6.83
P&M 8 0.60 0.50 1.10 9.10
Total 24 1.8 1.5 3.3 27.30
Other Assets Rs. Millions
Preliminary Expenditure 0.2
WC margin and Cash Balance 2.5
Working Capital Related
Current Asset Requirement in Days
Raw material 1
FG 30
Depreciation & Miscellaneous Rates
Depreciation Rates (Company Law)
Building 4%
P & M 10%
Amortization Rate Prelimnary Expenditure 25%
Depreciation Rates (Income Tax)
Building 5%
P & M 20%
Income Tax Rate 30%
Dividends (1st phase) 2%
Dividends (2nd phase) 4%
Financing Related Rs in Millions
Equity Capital (A) 10
Debt Capital (B) 20
Debt Equity Ratio (B/A) 200%
Rs. in Millions
Rs. In Millions
Years
1 2 3 4 5 6
Loan O/S at beginning 20 20 16 12 8 4
Loan O/S at end of 1st half year 20 18 14 10 6 2
Loan O/S at end of 2nd half year 20 16 12 8 4 0
Interest for 1st half yr 1 1 0.8 0.6 0.4 0.2
Interest for 2nd half yr 1 0.9 0.7 0.5 0.3 0.1
Total interest 2 1.9 1.5 1.1 0.7 0.3
Years
Rs. In Millions
1 2 3 4 5 6 7 8 9 10
Raw Materials 0.00 0.00 0.00 0.00 0.00 0.01 0.01 0.01 0.01 0.01
Finished Goods 0.18 0.20 0.23 0.26 0.26 0.28 0.29 0.30 0.32 0.32
Total Current Assets 0.18 0.20 0.23 0.26 0.26 0.29 0.29 0.31 0.33 0.33
Years
Rs. In Millions
1 2 3 4 5 6 7 8 9 10
Land
Opening Balance 10 10 10 10 10 10 10 10 10 10
Additions (Preoperative + Margin) 1.38 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375
Adjusted Opening Balance 11.38 11.375 11.375 11.375 11.375 11.38 11.375 11.375 11.375 11.375
Closing Balance 11.38 11.375 11.375 11.375 11.375 11.38 11.375 11.375 11.375 11.375
Building
Opening Balance 6
Additions (Preoperative + Margin) 0.83
Adjusted Opening Bal 6.83 6.55 6.28 6.01 5.73 5.46 5.19 4.91 4.64 4.37
Depreciation 0.27 0.27 0.27 0.27 0.27 0.27 0.27 0.27 0.27 0.27
Closing Balance 6.55 6.28 6.01 5.73 5.46 5.19 4.91 4.64 4.37 4.10
P&M
Opening Balance 8
Additions (Preoperative + Margin) 1.10
Adjusted Opening Bal 9.10 8.19 7.28 6.37 5.46 4.55 3.64 2.73 1.82 0.91
Depreciation 0.91 0.91 0.91 0.91 0.91 0.91 0.91 0.91 0.91 0.91
Closing Balance 8.19 7.28 6.37 5.46 4.55 3.64 2.73 1.82 0.91 0.00
Total Assets
Opening Balance 24
Additions (Preoperative + Margin) 3.30
Adjusted Opening Bal 27.30 26.12 24.93 23.75 22.57 21.39 20.20 19.02 17.84 16.65
Depreciation 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18
Closing Balance 26.12 24.93 23.75 22.57 21.39 20.20 19.02 17.84 16.65 15.47
Years
Rs. In Millions
Particulars
1 2 3 4 5 6 7 8 9 10
Land
Opening Balance 10 10 10 10 10 10 10 10 10 10
Additions (Preoperative + Margin) 1.38 1.38 1.38 1.38 1.38 1.38 1.38 1.38 1.38 1.38
Adjusted Opening Balance 11.38 11.38 11.38 11.38 11.38 11.38 11.38 11.38 11.38 11.38
Closing Balance 11.38 11.38 11.38 11.38 11.38 11.38 11.38 11.38 11.38 11.38
Building
Opening Balance 6
Additions (Preoperative + Margin) 0.83
Adjusted Opening Bal 6.83 6.48 6.16 5.85 5.56 5.28 5.02 4.77 4.53 4.30
Depreciation 0.34 0.32 0.31 0.29 0.28 0.26 0.25 0.24 0.23 0.22
Closing Balance 6.48 6.16 5.85 5.56 5.28 5.02 4.77 4.53 4.30 4.09
P&M
Opening Balance 10
Additions (Preoperative + Margin) 0.96
Adjusted Opening Bal 10.96 8.77 7.01 5.61 4.49 3.59 2.87 2.30 1.84 1.47
Depreciation 2.19 1.75 1.40 1.12 0.90 0.72 0.57 0.46 0.37 0.29
Closing Balance 8.77 7.01 5.61 4.49 3.59 2.87 2.30 1.84 1.47 1.18
Total Assets
Opening Balance 26
Additions (Preoperative + Margin) 3.16
Adjusted Opening Bal 29.16 26.63 24.55 22.84 21.42 20.25 19.27 18.44 17.74 17.15
Depreciation 2.53 2.08 1.71 1.41 1.18 0.98 0.83 0.70 0.59 0.51
Closing Balance 26.63 24.55 22.84 21.42 20.25 19.27 18.44 17.74 17.15 16.64
All figures in Millions
Years
Particulars
1 2 3 4 5 6 7 8 9 10
Profit Before Taxes -0.26 0.23 1.49 2.77 3.22 5.55 6.20 7.04 8.23 8.23
Add: Depreciation for Company Law 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18
0.93 1.41 2.68 3.95 4.40 6.73 7.39 8.22 9.41 9.41
Less:Depreciation for tax purposes 2.53 2.08 1.71 1.41 1.18 0.98 0.83 0.70 0.59 0.51
Gross Total Income -1.61 -0.67 0.97 2.54 3.23 5.75 6.56 7.52 8.82 8.90
Less:Income Tax@30% 0.29 0.76 0.97 1.72 1.97 2.26 2.64 2.67
Total Income -1.61 -0.67 0.68 1.78 2.26 4.02 4.59 5.26 6.17 6.23
Years
Rs. In Millions
Particulars 1 2 3 4 5 6 7 8 9 10
Liabilities
Share Capital 10 10 10 10 10 10 10 10 10 10
Reserves&Surplus -0.26 -0.03 0.98 2.78 4.84 8.26 12.09 16.47 21.65 26.81
Term Loans 20 16 12 8 4 0 0 0 0 0
Total 29.74 25.97 22.98 20.78 18.84 18.26 22.09 26.47 31.65 36.81
Assets
Fixed Assets
Gross Block 27.30 27.30 27.30 27.30 27.30 27.30 27.30 27.30 27.30 27.30
Accumulated Depreciation 1.18 2.37 3.55 4.73 5.92 7.10 8.28 9.46 10.65 11.83
Net block 26.12 24.93 23.75 22.57 21.39 20.20 19.02 17.84 16.65 15.47
Current Assets
Stock of Raw Material 0.00 0.00 0.00 0.00 0.00 0.01 0.01 0.01 0.01 0.01
Finished Goods 0.18 0.20 0.23 0.26 0.26 0.28 0.29 0.30 0.32 0.32
Cash & Bank Balance (Bank OD) 3.29 0.73 -1.06 -2.04 -2.81 -2.23 2.78 8.33 14.67 21.01
Preliminary Expenses 0.2 0.15 0.1 0.05 0
Total 29.74 25.97 22.98 20.78 18.84 18.26 22.09 26.47 31.65 36.81
Years
Rs in Millions
1 2 3 4 5 6 7 8 9 10
Particulars
Sales (Juice) 6 6.6 7.8 9 9 11.52 11.95 12.96 14.4 14.4
Sales (Bagasse) 0.68 0.74 0.88 1.01 1.01 1.08 1.12 1.22 1.35 1.35
Cost of Raw Materials & Consumables 1.2 1.32 1.56 1.8 1.8 1.92 1.99 2.16 2.4 2.4
Wages & Salaries 1 1.1 1.21 1.31 1.31 1.5 1.5 1.5 1.5 1.5
Selling Expenditure 0.6 0.66 0.78 0.9 0.9 1.15 1.20 1.30 1.44 1.44
Administration Expenditure 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.5
Depreciation Expenditure 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18
Annual Maintenance Expenditure 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5
Prelimnary Expenditure 0.05 0.05 0.05 0.05 0
EBIT 1.74 2.13 2.99 3.87 3.92 5.85 6.20 7.04 8.23 8.23
Interest Expenditure 2 1.9 1.5 1.1 0.7 0.3
EBT -0.26 0.23 1.49 2.77 3.22 5.55 6.20 7.04 8.23 8.23
Tax Rate 0.29 0.76 0.97 1.72 1.97 2.26 2.64 2.67
PAT -0.26 0.23 1.20 2.01 2.25 3.82 4.23 4.78 5.58 5.56
Dividends 0 0 0.2 0.2 0.2 0.4 0.4 0.4 0.4 0.4
Retained Profits -0.26 0.23 1.00 1.81 2.05 3.42 3.83 4.38 5.18 5.16
Depreciation 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18
Prelimnary Expenses written off 0.05 0.05 0.05 0.05 0 0 0 0 0 0
Cashflows After Taxes 0.98 1.46 2.44 3.24 3.43 5.00 5.42 5.96 6.77 6.74
Rs. In Millions
Years
Particulars
Construction Period 1 2 3 4 5 6 7 8 9 10
Sources of Funds
Share issue 10
PBT with Interest added back 1.74 2.13 2.99 3.87 3.92 5.85 6.20 7.04 8.23 8.23
Depreciation 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18
Preliminary expenses written off 0.05 0.05 0.05 0.05
Term Loan 20
Total(A) 30 2.98 3.36 4.23 5.10 5.10 7.03 7.39 8.22 9.41 9.41
Disposition of Funds
Capital Expenditure for project 27.30
Preliminary expenses 0.2
Repayment of Long Term borrowings 4 4 4 4 4
Interest on Long Term loans 2 1.9 1.5 1.1 0.7 0.3
Investment in Working Capital 0.18 0.02 0.03 0.03 0.00 0.03 0.01 0.01 0.02 0.00
Taxation 0.00 0.29 0.76 0.97 1.72 1.97 2.26 2.64 2.67
Dividend 0.20 0.20 0.20 0.40 0.40 0.40 0.40 0.40
Total(B) 27.5 2.18 5.92 6.02 6.09 5.87 6.45 2.37 2.67 3.07 3.07
Opening balance of cash in hand & bank 2.5 2.5 3.29 0.73 -1.06 -2.04 -2.81 -2.23 2.78 8.33 14.67
Increase (Decrease)(A-B) 0.79 -2.56 -1.79 -0.99 -0.77 0.58 5.01 5.55 6.34 6.34
Closing Balance 2.5 3.29 0.73 -1.06 -2.04 -2.81 -2.23 2.78 8.33 14.67 21.01
Years
Rs in Millions
Year Cashflows
0 -30
1 0.98
2 1.46
3 2.44
4 3.24
5 3.43
6 5.00
7 5.42
8 5.96
9 6.77
10 6.74
IRR 5%
NPV @ 10% Rs. -7.16