Assumptions for financial model to find out IRR with 10 years of operation,

DSCR and Breakeven capacity on Cash basis and Profit basis.

1. Installed capacity 1 million tonnes
2. Capacity utilization 1st year 60%, 2nd year 80% and 90% from 3rd year onwards.
3. Selling price Rs.15,500/- per tonnne
4. Raw material consumption 1.10 ton per tonne
5. Cost of raw material Rs.3,500/per tonne
6. Stores consumed 0.4 ton per tonnne
7. Cost of stores Rs.1125 per tonnne
8. Power charges 200 MVA Fixed charges @ Rs.0.3 million / MVA
9. Power consumption per ton 1200 Units, Cost per KWH Rs.3.30
10. Fuel consumption Minimum requirement 40 million litres at Rs.10000/kilo litre
11. Fuel consumption 100 litres per tonnne
12. Water charges Rs.20 crore per annum
13. Salaries and wages Fixed Rs.30 crore per annum and Rs.120 per man hour. Four
man-hours required for production of 1 tonne
14. Administrative overheads Rs.47 crore, Rs.53 crore and Rs.56 crore for first 3
years respectively and remain at that level thereafter.
15. Repairs and maintenance would be Rs.18 crore, Rs.19 crore and Rs.20 crore for
first 3 years and remain at that level thereafter.
16. Selling expenses Rs.10 crore plus 2% of gross sales.
17. Assume Other expenses as 0.25 crore, 0.67 crore and 0.88 crore for first 3 years
and remain at that level thereafter.
18. Total capital cost Rs.900 crore.
19. Term loans Rs.650 crores repayable in 5 equal instalment commencing from 2nd
year with interest at 12% p.a.
20. Working capital requirements
a) 2 months raw material with 25% margin
b) 15 days of work-in-process with 50% margin
c) 1.5 months receivables (110% of sales) with 25% margin
d) 2 months finished goods with 30% margin
e) 1 months expenses (0% bank finance)
f) 1 year stores with 50% margin
21. Working capital interest at 12.5% p.a.
22. WDV Depreciation at 25% and 8.5% on straight line method.
23. Tax Rate at 33%
Note on Depreciation:
Use Straight Line Method for calculation of cash flow and WDV method for Income Tax purposes.