Projected financial statements incorporate current trends and expectations to arrive at a

financial picture that management believes it can attain as of a future date. At a minimum,
projected financial statements will show a summary-level income statement and balance
sheet. This information is typically derived from a revenue trend line, as well as expense
percentages that are based on the current proportions of expenses to revenues. A better
set of projected financial statements will incorporate the following features:

 A statement of cash flows

 Expense projections that include step costs for major points at which revenues increase or
decline
 Consideration of the pace at which the business can reasonably grow, based on its prior
history
 Consideration of the corporate bottleneck operation on the ability to grow
 The ability of the business to attract the funding needed in order to accomplish the
financial results stated in the plan


 Julius Berger Nigeria Plc (the Company) was incorporated as a private limited liability
company in 1970 and was converted to a public liability company in 1979 and the company's
shares are quoted on the Nigerian Stock Exchange. The principal activities of the Company
cover planning, design and construction of civil engineering and building works. The
subsidiaries, Abumet (Nigeria) Limited in which the Company owns 70%, is involved in the
manufacturing and installation of building aluminium components while Julius Berger Services
Nigeria Limited a wholly owned subsidiary, is involved in port management services. Other
subsidiaries include Julius Berger Medical Services Nigeria limited which is wholly owned and is
into the provision of medical services while Primetech Engineering and Design Nigeria limited
also wholly owned is into architectural and engineering design. Julius Berger Investments
Limited is a wholly owned subsidiary and was incorporated in June 2012 as an investment
company to acquire securites and act as investment managers. Julius Berger International
GmbH Wiesbaden - Germany was acquired in May 2012 with 60% shares as Procurement and
Supporting Unit of the JB Group

UNDERLYING ASSUMPTIONS FOR PROJECTED FINANCIAL STATEMENTS FOR TWELVE MONTHS

ENDING DECEMBER 31, 2012
1. BASIS OF ASSUMPTION
The preparation of this projection of Interim Financial Statements requires management to
make estimates and assumptions that affect the reported amounts of revenues, expenses,
assets, liabilities, and other disclosures considered significant at the date of the Interim
Financial Statements. If in the future such estimates and assumptions, which are based on
management’s best judgment at the date of the Interim Financial Statements, deviate from
the actual circumstances, the original estimates and assumptions will be modified as
appropriate in the period in which the circumstances change.
2. TURNOVER
Revenue is measured at the fair value of the consideration received or receivable. The
expected revenue for the period ending December 31, 2012 has been determined based on
the quantum of revenue booked and recognised as at August 31, 2012 and is dependent
upon the terms of the contract between the entity and its numerous clients.
3. COST OF SALES
The cost of materials has been ascertained based on the bill of quantities as per contract
agreements and the estimated level of work to be approved by the respective certificates
of valuation. Performance still to be executed, cost already booked and also the proportion
of cost still to be expected has been considered accordingly. The same procedure was
applied for the development of inventories, PPE and Work in Progress. The level of cash
flow has been estimated using the cash flow analysis
4. CASH AND BANK
The level of cash flow has been estimated using the cash flow analysis of expected cash receipts
and payments in line with the budgeted cash flow for the company. However, the Cash Flow
Planning and consequently the development of Bank and Cash Balances as at December 31,
2012 are based on expected fund releases of our clients. The Company invested in a foreign
subsidiary within the period. Consequently, this had been considered in the preparation of this
forecast.
4. RECEIVABLES
include contract receivables, which are amounts due from clients for construction, civil or
building works or services performed in the normal course of business. Efforts are geared
by management towards recovery of all outstanding debts and settlement of liabilities as at
when due. This had been incorporated in the preparation of this forecast.
6. PAYABLES
Trade and other payables represent advances from customer prepayments for performance of
services related construction contracts which are expected to be recovered and are classified as
current liabilities at the end of the period if they are to be recovered within one year or the
operating cycle; otherwise, they are calssified as noncurrent.
5. DIVIDENDS
The Directors propose that a dividend of 240k per ordinary share will be paid to the
shareholders. The dividend was approved at the Annual General Meeting and payment has
commenced with deduction of withholding tax at the appropriate rate and this had been
incorporated in the preparation of this forecast. The total amount of estimated dividend to
be paid is N2,880million in the year).
 SALES BUDGET

Sales budget The cornerstone of the budgeting process is the sales budget because
the usefulness of the entire operating budget depends on it. The sales budget involves
estimating or forecasting how much demand exists for a company’s goods and then
determining if a realistic, attainable profit can be achieved based on this demand. Sales
forecasting can involve either formal or informal techniques, or both. The video below
illustrates a sales budget (watch the first 4 minutes of the video only for the sales
budget).

To illustrate this step, assume that Leed’s management forecasts sales for the year at
100,000 units (each pair of shoes is one unit). Quarterly sales are expected to be
15,000, 40,000, 20,000, and 25,000 units, reflecting higher demand for shoes in the late
spring and again around Christmas. The selling price for each pair of shoes forecasted
at $40. Leed’s sales budget would be prepared as by showing the sales unit for each
quarter x budgeted sales price to get the sales in dollars. The totals for the year are
added from each quarter.
 The sales budget normally indicates for each product, 1) the quantity of estimated
sales and 2) the expected unit selling price. This information is frequently reported by
region or by sales representatives.
In estimating the amount of sales for each product, past sales volumes are often used
as a starting point. These amounts are revised for factors that are expected to affect
future sales, such as the factors listed below:

- Backlog of unfilled sales orders

- Planned advertising and promotion
- Expected industry and general economic conditions
- Productive Capacity
- Projected pricing policy
- Findings of market research studies

Once an estimate of the sales volume is obtained, the expected sales revenue can be
determined by multiplying the volume by the expected unit sales price. The example
below shows the budget sales for the company Colt Manufacturing, Inc.