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2004 2005 2006 2007 Worst Case

Sales 0.05 4 30 250 Best Case


PAT 0 -5 1 15

Duratio Amount @ the


n ( in IRR time of
yrs) Investment (expected) IPO/liquidation
Round I 4.5 3,000,000.00 100% 67,882,250.99
Round II 4 6,000,000.00 70% 50,112,600.00
Round III 3 ### 45% 36,583,500.00

Worst Case Initial Round I Round II Round III


Promoter 100% 81.32% 71.46% 65.65%
Round I 18.68% 16.42% 15.08%
Round II 12.12% 11.14%
Round III 8.13%
### 100.00% 100.00% 100.00%

Best Case Initial Round I Round II Round III


Promoter 100% 86.78% 79.06% 74.24%
Round I 13.22% 12.05% 11.31%
Round II 8.89% 8.35%
Round III 6.10%
100% 100% 100% 100%

Starting # of shares
###
Face value ps 0.01
Paid up cap 10000
Worst Case Initial Round I Round II Round III
Promoter 10000 10000 10000 10000
Round I 2297.81 2297.81 2297.81
Round II 1696.31 1696.31
Round III 1238.35
Total 10000 12297.81 13994.12 15232.47
Price per share 13.06 35.37 96.90
Best Case Initial Round I Round II Round III
Promoter 10000 10000 10000 10000
Round I 1524 1524 1524
Round II 1125.06 1125.06
Round III 821.32
Total 10000 11524 12649.06 13470.38
19.69 53.33 146.11
Earnings Company
Multiplier Valuation @ IPO
30 450,000,000.00

40 600,000,000.00

Undiluted equity - Valuation @


Worst Case WC each round
15.08% 18.48% 16,235,962.21
11.14% 12.12% 49,498,509.36
8.13% 8.13% 147,607,527.98
Undiluted equity - Valuation @
Best Case BC each round
11.31% 13.15% 22,820,076.66
8.35% 8.89% 67,458,064.44
6.10% 6.10% 196,810,037.31
Valuation - worse caseInitial Round I Round II
Promoter ### ###
Round I 3,000,000.00 8,127,566.84
Round II 6,000,000.00
Round III
Total ### ###
Validation totals ### 49,498,509.36
Exit Multiples 28.03 9.09

Valuation - best case


Initial Round I Round II
Promoter ### ###
Round I 3,000,000.00 8,127,566.84
Round II 6,000,000.00
Round III
Total 0 ### ###
Validation Totals 22,685,041.78 67,458,064.44
Exit Multiples 26.45 8.89
Doubts
15 is 150 mn?
Why is the best case taken
as 40 instead of 45(avg)?
Price per share not matching

Round III
96,903,242.94
22,266,513.92
16,437,771.13
12,000,000.00
###
###
3.05

Round III
###
22,266,513.92
16,437,771.13
12,000,000.00
###
196,810,037.31
3.05
0 1 2 3 4 5
Equity 25
Reserves + surplus 100
Networth 125 400 490 900 1125 1905
PAT (projected) 75 90 110 225 280
RoCE 23.10% 22.50% 22.50% 25% 24.90%
Valuation 900 1080 1320 2700 3360
Investment Required 200 300 500
Target RoR 40% 30% 20%
Expected Returns 2108.27 856.83 720
% of final valuation 31.94% 12.98% 10.91%
% at the time of rounds 41.20% 14.57% 10.91%
6 7 12

2355 2905
450 550 PAT for yr 7
23.60% 23.40% Upside 120.00%
5400 6600 Downside 60.00%

Promoter Share
55.83% 44.17%
0 1 2 3 4 5
Equity 25
Reserves + surplus 100
Networth 125 400 490 900 1125 1905
PAT (projected) 75 90 110 225 280
RoCE 23.10% 22.50% 22.50% 25% 24.90%
Valuation 900 1080 1320 2700 3360
Investment Required 200 300 500
Target RoR 40% 30% 20%
Expected Returns 2108.27 856.83 720
% of final valuation 26.62% 10.82% 9.09%
% at the time of rounds 32.83% 11.90% 9.09%
6 7 12

2355 2905
450 550 PAT for yr 7
23.60% 23.40% Upside 120.00%
5400 7920 Downside 60.00%

Investor Share
Promoter Share
46.53% 53.47%
0 1 2 3 4
Equity 25
Reserves + surplus 100
Networth 125 400 490 900 1125
PAT (projected) 75 90 110 225
PAT actuals 45 54 66 135
RoCE 23.10% 22.50% 22.50% 25%
Valuation (Projected) 900 1080 1320 2700
Valuations Actuals 540 648 792 1620
Investment Required 200 300
Target RoR 40% 30%
Expected Returns 2108.27 856.83
% of final valuation (Expected) 31.94% 12.98%
% at the time of rounds (Expected)41.20% 14.57%

% of final valuation (Actuals) 53.24% 21.64%


% at the time of rounds (Actuals) 83.04% 26.45%

Refined % of actuals 39.40% 16.01%


5 6 7 12

1905 2355 2905


280 450 550 PAT for yr 7
168 270 330
24.90% 23.60% 23.40% Upside 120.00%
3360 5400 6600 Downside 60.00%
2016 3240 3960
500
20%
720 Investor Share
Promoter Share
10.91% 55.83% 44.17%
10.91%
Investor Share
Promoter Share
18.18% 93.06% 6.94%
18.18%

13.45% 68.86% 26%


Interest
Interest on Term Loans Loan @ Loan @ Interest @ 0.4 Total14%
First Half Second @ First Second Interest
Year Loan @ BOT EOT Half EOT Half Half per year
1 6.40 6.40 6.40 0.45 0.45 0.90
2 6.40 6.40 6.00 0.45 0.45 0.90
3 6.00 5.60 5.20 0.42 0.39 0.81
4 5.20 4.80 4.40 0.36 0.34 0.70
5 4.40 4.00 3.60 0.31 0.28 0.59
6 3.60 3.20 2.80 0.25 0.22 0.48
7 2.80 2.40 2.00 0.20 0.17 0.36
8 2.00 1.60 1.20 0.14 0.11 0.25
9 1.20 0.80 0.40 0.08 0.06 0.14
10 0.40 0.00 0.00 0.03 0.00 0.03
Working Capital Requirements
Year 1 Year 2 Year 3 Year 4 onwards same as 3
Raw Materials 1.5 1.40 1.68 1.97
Stock in progress 0.03 0.03 0.03 0.04
Finished Goods 0.5 0.52 0.62 0.75
Book Debt 1 1.44 1.73 2.02
Total 3.39 4.07 4.77
Margin 25% 0.85 1.02 1.19
Less Margin 2.54 3.05 3.58
Trade Credit 0.5 0.47 0.56 0.66
Finance Reqd for working Capital 2.08 2.49 2.92
Interest on Bank Borrowings
18% 0.37 0.45 0.53
Depreciation Calculations
Preoperative Exp 1.15 Contingency Margin
0.75
Law IT Preopt ExpConting Exp
Total Cost
Land 0.39 0.05 0.03 0.48
Building 1.5 3.34% 10% 0.20 0.13 1.84
Plant & m/c 6.2 8.09% 33.34% 0.84 0.55 7.59
Misc Fixed Assets 0.4 5.15% 33.34% 0.05 0.04 0.49
Total 8.49
Law Depreciations - Straight Line Method
Building 0.06
Plant & m/c 0.61
Misc Fixed Assets 0.03
Total per anum 0.70
Depr for IT purposes - Written down method
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Building 0.184 0.165 0.149 0.134 0.120 0.108
Plant & m/c 2.530 1.686 1.124 0.749 0.499 0.333
Misc Fixed Assets 0.163 0.109 0.073 0.048 0.032 0.021
Total 2.876 1.960 1.345 0.931 0.652 0.463
Income Tax
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Profit before income tax
0.59 1.14 1.67 1.71 1.76 1.80
Add Depr - St Line 1.29 1.84 2.37 2.41 2.46 2.50
Reduce Depr - written down
-1.59 -0.12 1.02 1.48 1.81 2.04
Unabsorbed depr 1.02 0.69
Taxable income 0.00 0.79 1.81 2.04
Deduction 30% of gross income 0.24 0.54 0.61
Net taxable income 0.56 1.27 1.43
Tax @ 45% 0.00 0.00 0.00 0.25 0.57 0.64
Profitability Extimates

Installed Capacity
Capacity Utilization
Capacity Util Actuals

(a) Sales Realizations


(b) Cost of Production
RawM (% of sales)
Raw Materials
Power (% os sales)
Power
Wages & salary (% Inc)
rds same as 3 Wages & salary
Factory Overhead (% Inc)
Factory Overhead
(c) Admin & selling exp
Admin Expenses
Selling Expenses (% of Sales)
Selling Expenses
(d) Gross Profit before int
(e) Total Fin Expenses
Interest on term loans
Interest on Bank Borr
Total Interest
(f) Depreciation
otal Cost
(g) Operating Profit
Preliminary Expenses
PE % written off every year
(h) Exp written off
(i) Profit/loss before tax
(j) Provision for Tax
(k) PAT
Dividend in %
(l) Less: Dividend
(m) Retained Profit
(n) Add: Depreciation
Year 7 Year 8 Year 9 Year 10 Prelim exp written off
0.098 0.088 0.079 0.071 (o) Net Cash Accruals
0.222 0.148 0.099 0.066
0.014 0.010 0.006 0.004
0.334 0.245 0.184 0.141

Year 7 Year 8 Year 9 Year 10


1.84 1.88 1.91 1.93
2.54 2.58 2.61 2.63
2.21 2.33 2.42 2.49

2.21 2.33 2.42 2.49


0.66 0.70 0.73 0.75
1.54 1.63 1.70 1.74
0.70 0.73 0.76 0.79
Price for TVP12
Year
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 10
2880 2880 2880 2880 2880 2880 2880 2880 2880 2880
50% 60% 70% 70% 70% 70% 70% 70% 70% 70%
1440 1728 2016 2016 2016 2016 2016 2016 2016 2016

17.28 20.74 24.19 24.19 24.19 24.19 24.19 24.19 24.19 24.19

65% 65% 65% 65% 65% 65% 65% 65% 65% 65%
11.23 13.48 15.72 15.72 15.72 15.72 15.72 15.72 15.72 15.72
4% 4% 4% 4% 4% 4% 4% 4% 4% 4%
0.69 0.83 0.97 0.97 0.97 0.97 0.97 0.97 0.97 0.97
5% 5% 5% 5% 5% 5% 5%
0.90 1.00 1.20 1.26 1.32 1.39 1.46 1.53 1.61 1.69
6% 6% 6% 6% 6% 6% 6% 6% 6%
0.05 0.05 0.06 0.06 0.06 0.07 0.07 0.08 0.08 0.08

0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
10% 10% 10% 10% 10% 10% 10% 10% 10% 10%
1.73 2.07 2.42 2.42 2.42 2.42 2.42 2.42 2.42 2.42
2.58 3.20 3.72 3.66 3.59 3.52 3.45 3.37 3.29 3.21

0.90 0.90 0.81 0.70 0.59 0.48 0.36 0.25 0.14 0.03
0.37 0.45 0.53 0.53 0.53 0.53 0.53 0.53 0.53 0.53
1.27 1.34 1.34 1.23 1.11 1.00 0.89 0.78 0.67 0.55
0.70 0.70 0.70 0.70 0.70 0.70 0.70 0.70 0.70 0.70

0.61 1.16 1.69 1.73 1.78 1.82 1.86 1.90 1.93 1.95
0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
10% 10% 10% 10% 10% 10% 10% 10% 10% 10%
0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02
0.59 1.14 1.67 1.71 1.76 1.80 1.84 1.88 1.91 1.93
0.00 0.00 0.00 0.25 0.57 0.64 0.70 0.73 0.76 0.79
0.59 1.14 1.67 1.46 1.19 1.16 1.15 1.14 1.14 1.15
0 12% 12% 14% 14% 16% 16% 18% 18% 20%
0.00 0.14 0.20 0.20 0.17 0.19 0.18 0.21 0.21 0.23
0.59 1.00 1.47 1.26 1.02 0.97 0.96 0.94 0.94 0.92
1.29 1.70 2.17 1.96 1.72 1.67 1.66 1.64 1.64 1.62
1.31 1.72 2.19 1.98 1.74 1.69 1.68 1.66 1.66 1.64
1.31 1.72 2.19 1.98 1.74 1.69 1.68 1.66 1.66 1.64
1 2 3 4
# of albums 6 30 48 60
# Cum 6 36 84 144
PY 0 6 36 84
Sales from current year 50% 50% 50% 50%
Sales from previous year 100% 100% 100% 100%
Sales # CY 30000 150000 240000 300000
Sales # PY 0 60000 360000 840000
Total Sales 30000 210000 600000 1140000
Revenue
Sales $ 1800 12600 36000 68400
Costs
Royalty cost 270 1890 5400 10260
Replication Cost 300 2100 6000 11400
Selling & GA 850 1000 1200 1500
Marketing & selling Cost 720 5040 14400 27360
Total Costs 2140 10030 27000 50520
Fixed Cost 1200 7200 16800 28800 In depreciation sheet.
PBDIT -340 2570 9000 17880
Interest 0 0 0 0
Depr/Ammr - Album 300 1800 4200 7200
Depr/Ammr - Inv 0 0 0 0
Taxable Income -640 770 4800 10680
Net Acc Loss
Tax at 40% 0 308 1920 4272
PAT -640 462 2880 6408
Sales PY 10000
Price PU 60

Fixed cost PA 200000


Royalty % 15%
M&S % 40% Exclude royalty
Replication Cost PU 10
Div number 1000
Tax % 40%

n depreciation sheet.