Financial Analysis of ABC Complex, Navi Mumbai

Assumptions
A
Land, Constructed area & Cost related

First Year of the Project 2011

Project Completion Period Years 5
Land Area Sq.meter 25000
Permissible FSI No. of times 1
Permissible Built-up Area Sq.meter 25000
Add: Free of FSI Area 30% of BUA 7500
Constructed Area * Sq.meter 32500
* Area which we need to construct
Constructed Area * Sq.feet 349830

Construction Schedule
2010-11 As Per Construction Schedule 30.52%
2011-12 69.48%
2012-13 0.00%
2013-14 0.00%
2014-15 0.00%
Total 100.00%

B
Cost Assumptions

Direct Cost
Land & Existing Structure Cost Rs. In Crs 46.00

Constructed Area * Sq.feet 3765570

Construction Cost per (No Suggestions) As per Company Schedule 794.27
Total Construction Cost Rs. In Crs. 27.79

Architectural & Engineering design cost Rs. In Crs 0.75

Planning & Feasibility studies cost Rs. In Crs 0.50
Consultancy Charges Rs. In Crs 0.40
Contingency % of total Cost 10%

Indirect Cost
Administration expenses Rs in cars 0.6
Depreciation (SLM) for 9 years 11.31% As per Company Act
yearly depreciation Rs in crs 0.9

Finance Cost
Rate of Interest on term Loan 12%
Loan Repayment Year % Repayment
No of Payments per year 4
Moratorium Period 0 0
Repayment Period 5 100%
Total 5 100%
C
Cost of Project
Construction Equipments 8.00
Working Capital 42.00
Total Amt/Rs. In Crs 50.00

D
Sales & Revenue Assumptions

Calculation of salable area

Carpet Area 61.00% of BUA 249674
Add : Loading 39.00% of BUA 159627
Total Area for Sale Sq feet 409301

Selling rates
2010-11 Per sqft of BUA 3000
Increase over
2011-12 10% previous year 3300
2012-13 10% 3630
2013-14 10% 3993
2013-15 10% 4392

Area Sold
2010-11 35%
2011-12 25%
2012-13 20%
2013-14 10%
2014-15 10%
Total 100%

Rs Per
Sqft of
salable
Development Charges area 200
Total Development charges 8.19
Total Parking 532
Per parking chrarges 0.03
Total parking income 15.96
E
General Assumptions

Tax related assumption

Inflation per annum % 10%
Income tax charged 33.22%
(30%(tax) + 7.50% surcharge + 3% education cess
MAT 18%
Dividend Distribution Tax 16.609%
Income tax WDV Depreciation 30%
Analysis related assumption
Reinvestment rate 6.00%
In calculation of cost of capital the market
price as on 2nd june 2010 1015

In calculation of Payout Ratio the dividend payout is considered.

Growth rate is calculated by taking the average of last 5 years.
And even the expected dividend is considered to be the average of last 5 years

Rate of Dividend In Percentage

2010-11 0%
2011-12 0%
2012-13 0%
2013-14 5%
2014-15 5%

Means of Finance
Equity 40% 20.00
Term Loan 60% 30.00
Total 50.00
Wt avg Pre tax Post tax WACC
0.40 16.56% 16.56% 6.63%
0.60 12.00% 8.01% 4.81%
Weighted Average Cost of Capital 11.43%
Financial Analysis of ABC Complex, Navi Mumbai
Engineering & Professional Consultancy & Services Rs in Crs

Particulars 2011

Architects

Architect - Design : Concept / Detail Design Fees & Reimbursement

Architect - Municipal Fees & Reimbursement

Consultants

Consultant - RCC & Structural Fees & Reimbursement

0.1
Consultant - Electricals Fees & Reimbursement 0.1
Consultant - Plumbing & Firefighting Fees & Reimbursement 0
Consultant - Sewerage Treatment Plant Fees & Reimbursement 0
Consultant - Health Club Fees & Reimbursement
Consultant - Swimming Pool Fees & Reimbursement
Consultant - Horticulture Fees & Reimbursement
Consultant - Land Scaping Fees & Reimbursement
Consultant - Labor Fees & Reimbursement
Consultant - Vertical Transportation Fees & Reimbursement
Consultant - Kitchen & Bakery Fees & Reimbursement
Consultant - Multiplex Fees & Reimbursement
Consultant - Survey Fees & Reimbursement
Consultant - Construction Management Fees & Reimbursement 0.1
Consultant - Project Management Fees & Reimbursement 0
Consultant - Heritage Bldgs Fees & Reimbursement
Consultant - HVAC Fees & Reimbursement 0.1
Consultant - Others Fees & Reimbursement
Consultant - Water proofing Fees & Reimbursement
Consultant - Lighting & Acoustic Fees & Reimbursement
Vaastu Consultant Fees & Reimbursement
Consultant - Safety & Security Fees & Reimbursement
Interior Designer Fees & Reimbursement
Consultant - Soil & Investigation Fees & Reimbursement

Total cost 0.4

Financial Analysis of ABC Complex, Navi Mumbai

Construction Cost In Crs

Particulars 2011 2012 2013 2014 2015

Land , Land Development & 1.16 0.00 0.00 0.00 0.00

Site Infrastructure
Sub structure 0.00
Super structure 3.00 9.00 0.00
Finishing work 1.70 5.10 0.00
Electricals 0.25 0.75 0.00 0.00 0.00
Utilities 0.10 0.30 0.00 0.00 0.00
Escalators & Elevators 0.30 0.90 0.00 0.00 0.00
Fire & Safety 0.10 0.30 0.00 0.00 0.00
IT & Automation 0.05 0.15 0.00 0.00 0.00
Landscaping & Horticulture 0.30 0.00 0.00 0.00 0.00
Roads 0.60 0.60 0.00 0.00 0.00
Miscellaneous Assets 0.05 0.15 0.00 0.00 0.00
Furniture & Fixtures 0.10 0.30 0.00 0.00 0.00
P&M and Equipment for Retail
Supply Chain Infrastructure
0.00 0.00 0.00 0.00

Sub total cost 7.71 17.55 0.00 0.00 0.00

Contingency 10% 10% 10% 10% 10%

Total 8.48 19.31 0.00 0.00 0.00

Grand total 27.79

Constructed Area (sq ft) 349830

Renovation Cost per (No Suggestions) 794.27

Construction schedule % 30.52 69.48 0.00 0.00 0.00

Financial Analysis of ABC Complex, Navi Mumbai

Cost of Equity

Cost of equity (ke) = (D/P) + g

where
D = Expected dividend per share
P = net proceeds per share or the market price per share
g = growth rate

g = ploughback ratio/ return on equity

Particulars of last 5 Yrs 2010 2009 2008 2007 2006 Average Value

Payout Ratio 14.97 14.49 9.8 13.75 17.52 0.14

Return on Equity 12.64 13.36 24.66 19.49 20.08 0.18

Growth Rate (g) 0.16

Dividend paid (D) 7 13 13 11 10 10.8

Cost of equity (ke) = (D/P) + g 0.17

Financial Analysis of ABC Complex, Navi Mumbai

Interest Calculation Schedule

Interest rate 12%

Quarterly interest rate 3%
Term loans 30.00 EQI = 2.02
Repayment years 5.00
Per year repayment 4.00
Moratorium period 0.00

Particulars 2011 2012 2013 2014 2015

1 st quarter

Initial principal amount 30.00 25.33 20.07 14.16 7.50

Interest payment 0.90 0.76 0.60 0.42 0.22
Principal Amount paid 1.12 1.26 1.41 1.59 1.79
Unpaid principal 28.88 24.07 18.66 12.56 5.70

2 nd quarter

Initial principal amount 28.88 24.07 18.66 12.56 5.70

Interest payment 0.87 0.72 0.56 0.38 0.17
Principal Amount paid 1.15 1.29 1.46 1.64 1.85
Unpaid principal 27.73 22.78 17.20 10.92 3.86

3 rd quarter

Initial principal amount 27.73 22.78 17.20 10.92 3.86

Interest payment 0.83 0.68 0.52 0.33 0.12
Principal Amount paid 1.18 1.33 1.50 1.69 1.90
Unpaid principal 26.55 21.45 15.70 9.23 1.96

4 th quarter

Initial principal amount 26.55 21.45 15.70 9.23 1.96

Interest payment 0.80 0.64 0.47 0.28 0.06
Principal Amount paid 1.22 1.37 1.55 1.74 1.96
Unpaid principal 25.33 20.07 14.16 7.50 0.00

Total Interest payment 3.39 2.81 2.15 1.41 0.57

Total principal paid 4.67 5.26 5.92 6.66 7.50
Financial Analysis of ABC Complex, Navi Mumbai

Cost Calculation

Sales Revenue Total 2011 2012 2013 2014 2015 Total

Construction Schedule 30.52% 69.48% 0.00% 0.00% 0.00% 100%

Total Construction Cost 27.79

Inflation 10%

Inflation factor 1.00 1.10 1.21 1.33 1.46

Total inflated construction Cost 8.48 21.24 0.00 0.00 0.00 29.72

Area sold during a year 35% 25% 20% 10% 10%

Particulars 2011 2012 2013 2014 2015 Total

Cost of area sold 2.97 2.12 1.70 0.85 0.85 8.48

Cost of area sold 0.00 12.74 4.25 2.12 2.12 21.24
Cost of area sold 0.00 0.00 0.00 0.00 0.00 0.00
Cost of area sold 0.00 0.00 0.00 0.00 0.00 0.00
Cost of area sold 0.00 0.00 0.00 0.00 0.00 0.00
Total Cost of area sold 29.72 2.97 14.86 5.94 2.97 2.97 29.72

Land & Existing Structure Cost 9.20 9.20 9.20 9.20 9.20 46.00

Planning & feasibility studies cost 0.10 0.10 0.10 0.10 0.10 0.50

Architectural & engineering design cost 0.15 0.15 0.15 0.15 0.15 0.75

Consultancy charges 0.08 0.08 0.08 0.08 0.08 0.40

Total cost of construction for P&L A/c 12.50 24.39 15.47 12.50 12.50 77.37

Closing Stock 5.51 11.89 5.94 2.97 0.00

Financial Analysis of ABC Complex, Navi Mumbai

Cost of Project & Means of Finance

Cost of Project Amt/Rs. In Crs

Construction Equipments 8.00
Working Capital 42.00
Total 50.00

Means of Finance
Equity 20.00
Term Loan 30.00
Total 50.00
Financial Analysis of ABC Complex, Navi Mumbai

Calculation of other income

In Cores
Total parking income 15.96

Particulars 2011 2012 2013 2014 2015

Sales Schedule 35% 25% 20% 10% 10%

Parking charges 5.59 3.99 3.19 1.6 1.6 15.96

Development charges 2.87 2.05 1.64 0.82 0.82 8.19

Total Other Income 8.45 6.04 4.83 2.41 2.41

Financial Analysis of ABC Complex, Navi Mumbai

Sales Revenue

Particulars 2011 2012 2013 2014 2015 Total

% total build up area sold 35.00% 25.00% 20.00% 10.00% 10.00%

Total Salable area 409301.10 409301.10 409301.10 409301.10 409301.10

Area sold (ft2) 143255.39 102325.28 81860.22 40930.11 40930.11 409301.10

Selling Rate(Rs/ft2) 3000.00 3300.00 3630.00 3993.00 4392.00

Total Income 42.98 33.77 29.72 16.34 17.98 140.78

Construction Schedule 30.52% 69.48% 0.00% 0.00% 0.00% 100%

Cash Receipt/sales revenue

Particulars 2011 2012 2013 2014 2015

13.12 29.86 0.00 0.00 0.00 42.98

Distribution of Revenue As 0.00 33.77 0.00 0.00 0.00 33.77
per Construction Schedule 0.00 0.00 29.72 0.00 0.00 29.72
0.00 0.00 0.00 16.34 0.00 16.34
0.00 0.00 0.00 0.00 17.98 17.98

Total sales revenue 13.12 63.63 29.72 16.34 17.98

Total cash receipt 13.12 63.63 29.72 16.34 17.98 1.00

Financial Analysis of ABC Complex, Navi Mumbai

Income Statement In Crs

Sr.No. Particulars/Years 2011 2012 2013 2014 2015 Total

A INCOME
Sales Revenue 13.12 63.63 29.72 16.34 17.98 140.78

Other Income 8.45 6.04 4.83 2.41 2.41 24.15

Total (A) 21.57 69.66 34.54 18.76 20.39 164.93

B Expense

Construction cost 12.50 24.39 15.47 12.50 12.50 77.37

Administration expense 0.60 0.66 0.73 0.80 0.88 3.66
Depreciation 0.90 0.90 0.90 0.90 0.90 4.52
Interest on term loans 3.39 2.81 2.15 1.41 0.57 10.33

Total (B) 17.40 28.77 19.25 15.61 14.86 95.88

Net Profit Before Tax 4.17 40.90 15.29 3.15 5.54 69.04

Less : Income Tax 0.89 13.33 4.99 1.07 2.14 22.42

Net Profit After Tax 3.28 27.57 10.30 2.07 3.40 46.62

Less : Dividend paid 0.00 0.00 0.00 1.00 1.00 2.00

Less: Dividend Distribution Tax 0.00 0.00 0.00 0.17 0.17 0.33
To Reserves & surplus 3.28 27.57 10.30 0.91 2.23 44.29

Net Profit Before Tax 4.17 40.90 15.29 3.15 5.54 69.04
Less:WDV depreciation 2.40 1.68 1.18 0.82 0.00 6.08
Add:SLM depreciation 0.90 0.90 0.90 0.90 0.90 4.52
Net Taxable Income 2.68 40.12 15.02 3.23 6.44 67.49
Financial Analysis of ABC Complex, Navi Mumbai

Income Tax Calculation

Particulars 2011 2012 2013 2014 2015

Profit before tax 4.17 40.90 15.29 3.15 5.54

less: WDV Depreciation 2.40 1.68 1.18 0.82 0.00
Add: SLM Depreciation 0.90 0.90 0.90 0.90 0.90
Net Taxable Income 2.68 40.12 15.02 3.23 6.44
Opening bal of CF loss 0 0 0 0 0
Loss CF 0 0 0 0 0
Max CF Loss 0 0 0 0 0

Taxable profit 2.68 40.12 15.02 3.23 6.44

Tax 33.22% 0.89 13.33 4.99 1.07 2.14
Less:MAT Credit paid 0.75 7.36 2.75 0.57 1.00
Balance Tax to be paid 0.14 5.97 2.24 0.51 1.14
Add:MAT payable 0.75 7.36 2.75 0.57 1.00
Total Tax Paid during the year 0.89 13.33 4.99 1.07 2.14

MAT Calculation
Net Profit Before Tax/ Book Profit 4.17 40.90 15.29 3.15 5.54
MAT Payable 18.00% 0.75 7.36 2.75 0.57 1.00

MAT Credit
Opening Balance of MAT Paid 0 0.00 0.00 0.00 0.00
Add: MAT Paid During the year 0.75 7.36 2.75 0.57 1.00
Amount available for Credit against Tax payable 0.75 7.36 2.75 0.57 1.00
Less : Amount used for payment of Tax 0.75 7.36 2.75 0.57 1.00
Closing balance of MAT 0.00 0.00 0.00 0.00 0.00
Financial Analysis of ABC Complex, Navi Mumbai

Balance sheet in Crs

Liabilities 2011 2012 2013 2014 2015

Capital
Equity 23.28 50.85 61.15 62.06 64.29

Loans 25.33 20.07 14.16 7.50 0.00

Total liabilities 48.61 70.92 75.31 69.56 64.29

Asset 2011 2012 2013 2014 2015

Gross Fixed Assets 8.00 8.00 8.00 8.00 8.00

less: depreciation reserves 0.90 1.81 2.71 3.62 4.52
Net Block 7.10 6.19 5.29 4.38 3.48

Add: Current Asset

Cash & bank balance 36.00 52.85 64.08 62.21 60.82
Inventories 5.51 11.89 5.94 2.97 0.00

Total asset 48.61 70.92 75.31 69.56 64.29

Financial Analysis of ABC Complex, Navi Mumbai

Cash Flow Statement

Particulars 2011 2012 2013 2014 2015

(A) Sources of Funds

PBITDA 8.47 44.61 18.35 5.46 7.01

Increase in Equity 20.00 0.00 0.00 0.00 0.00

Increase in Term Loan 30.00 0.00 0.00 0.00 0.00

Total (A) 58.47 44.61 18.35 5.46 7.01

(B) Application of Funds

Increase in Fixed Assets 8.00 0.00 0.00 0.00 0.00

Interest on Term Loan 3.39 2.81 2.15 1.41 0.57

Repayment of Term Loan 4.67 5.26 5.92 6.66 7.50

Dividend paid 0.00 0.00 0.00 1.17 1.17

Income Tax 0.89 13.33 4.99 1.07 2.14

Increase in Current assets (Closing Stock) 5.51 6.37 -5.94 -2.97 -2.97

Total (B) 22.47 27.77 7.11 7.33 8.40

Opening balance 0.00 36.00 52.85 64.08 62.21

Surplus/Deficit for the year 36.00 16.84 11.23 -1.87 -1.39
Closing balance 36.00 52.85 64.08 62.21 60.82
Financial Analysis of ABC Complex, Navi Mumbai

Net Present Value and Internal rate of Return Calculation

Tax rate 33.22%

Year 2011 2012 2013 2014 2015 Total

Cash inflow Increase / Decrease in Cash
Flow Statement 4.19 28.47 11.21 2.98 7.78
Cash out flow 8.00 0.00 0.00 0.00 0.00 8.00
Cost of capital 11.43%
Cash flow @ cost of capital 6.46 28.47 11.21 2.98 7.78
Terminal value 56.89
MIRR @ cost of capital 51.29% Accept
Discounted cash outflow 7.18 0.00 0.00 0.00 0.00
PVC 7.18

Discounted cash inflow 3.76 22.93 8.10 1.93 4.53 41.25

NPV 34.07
Financial Analysis of ABC Complex, Navi Mumbai

Ratio Analysis

Particulars 2011 2012 2013 2014 2015

Construction cost 12.50 24.39 15.47 12.50 12.50

Administration cost 0.60 0.66 0.73 0.80 0.88

A Total Cost 13.10 25.05 16.20 13.30 13.38

Sales 13.12 63.63 29.72 16.34 17.98

Other income 5.59 3.99 3.19 1.6 1.6

B Total Revenue 18.70 67.62 32.91 17.94 19.57

Ratio analysis 2011 2012 2013 2014 2015

1 Net Profit Ratio

Net Profit Ratio=(Net Profit / Net sales)

Net profit 3.28 27.57 10.30 2.07 3.40

Net sales 18.70 67.62 32.91 17.94 19.57
Net profit ratio 0.18 0.41 0.31 0.12 0.17
Overall Net profit Ratio 29.75%

2 Gross Profit Ratio

Gross Profit Ratio=(Gross Profit / Net Sales)

Gross profit 8.47 44.61 18.35 5.46 7.01

Net Sales 18.70 67.62 32.91 17.94 19.57
Gross profit ratio 0.45 0.66 0.56 0.30 0.36
Overall Gross profit ratio 53.53%

3 Debt to Equity Ratio

Debt to Equity Ratio = ( Debt/ Equity)

Debt 25.33 20.07 14.16 7.50 0.00

Equity 23.28 50.85 61.15 62.06 64.29
Debt to equity ratio 1.09 0.39 0.23 0.12 0.00
Average Debt to equity ratio 0.37
 Particulars 2011 2012 2013 2014 2015

4 Return on Equity

Return on Equity= (NPAT/EQUITY)*100

Net Profit after Tax 3.28 27.57 10.30 2.07 3.40

Equity Capital 23.28 50.85 61.15 62.06 64.29
Return on Equity 14.10 54.22 16.85 3.34 5.28
Avg Return on Equity 18.76

5 Return on Capital Employed

ROCE=(PBIT/CE)*100

Adjusted PBIT 7.57 43.71 17.44 4.55 6.11

Capital employed (CE) 48.61 70.92 75.31 69.56 64.29
Return on Capital Employed 15.56 61.62 23.16 6.55 9.50
Average Return on Capital Employed 23.28

6 Debt Service Coverage Ratio (DSCR)

DSCR = (PAT + Depreciation + interest on long

term loans) / ( interest+ repayment Amount)

PAT + Dep + Interest on long term debt 7.58 31.28 13.36 4.39 4.87
Interest + Repayment amount 8.07 8.07 8.07 8.07 8.07
DSCR 0.94 3.88 1.66 0.54 0.60
Avg DSCR ratio 1.52
Financial Analysis of ABC Complex, Navi Mumbai

Sales Maximizing

No. of units 250

Each unit 1500 per month
If the life time is 60 years
Each unit life time maintenance 10.8 lakhs
from 500 units 27 Crs
Sales Schedule 35% 25% 20% 10% 10%
2011 2012 2013 2014 2015
9.45 6.75 5.4 2.7 2.7

Reinvestment Rate 12.00%

0 1.13 2.05 2.93 3.60

Total Returns 9.71

0.00 0.91 1.48 1.90 2.10

NPV @ cost of capital 6.39 in Crs