Project Appraisal and Management

Financial Analysis
 Financial Assessment
Important aspects
Cost of the Project
Expected Expenses and Revenues
Project Financing Plan
Sources/Means of Finance (Debt- Equity)
Duration and Interest rate
Concept of Profit and Loss Account
Depreciation
Tax
Cash Flows
Viability
NPV,IRR, Financial Ratios (Operating Ratio, DSCR etc.)
Project Finance- Snapshot
Project Dev. Period Construction Period Operation Period

Intellectual land and site Depreciation

Expenditure:
investments development, O&M Tax
technical and
engineering fees, Plant and Periodic spare
foreign experts machinery Replacements, Cash Flow
training
Royalty in case of Repairs
Preliminary technology transfer Repayment of loans
Expenses
Feasibility studies, Building and civil Revenues:
MoUs, works Revenue from sale
of products,
Incorporation of
company etc Collection of user
fees
Capital Issue From sale of land.
Expenses
Legal, stationary, Renting facilities
created
publicity etc for
issue of shares Profit and Loss
 Profit and loss Account
P & L account should give clear idea about the
operations of the project and show specific
information required for the same.
Basically gives revenues and expenditure
Prepared for the operations period
 Profit and loss Account
OPERATING REVENUE
Fare Revenue
Advertisement Revenue
Property Development Revenue
A. Total Revenue
OPERATING EXPENSES
Manpower Cost
Energy Cost
Maintenance Cost
Administrative Expenses
B. Total Expenses

NET OPERATING INCOME (A-B)

 Profit and loss Account
NON-OPERATING REVENUES
Interest on Cash Balance
Interest on Debt Service Reserve
Interest Subsidy from Government
C. Total Non-operating Revenues
NON-OPERATING EXPENSES
Interest Expenses on Debts
Commission on Debt Service Reserve LC
D. Total Non-Operating Expenses
NET Non-Operating Income (C-D)
PROFIT BEFORE DEPRE & TAX (A-B)+(C-D)
 Profit and loss Account
Depreciation as per CO Act (Assets land)

PROFIT BEFORE TAX

Corporate Tax

PROFIT AFTER TAX

(Rs. in million)
Financial Year Begins 1-Apr-10 1-Apr-11 1-Apr-12 1-Apr-13 1-Apr-14 1-Ap
Financial Year Ends 31-Mar-11 31-Mar-12 31-Mar-13 31-Mar-14 31-Mar-15 31-Ma
Year 1 2 3 4 5 6
No. of Months 12 12 12 12 12 12

OPERATING REVENUE
Fare Revenue 346 379 413 452 491
Advertisement Revenue 17 19 21 23 25
Property Development Revenue 17 19 21 23 25
Total Revenue A 380 417 454 497 540
OPERATING EXPENSES
Manpower Cost 57 63 69 76 83
Energy Cost 31 51 53 55 57
Maintenance Cost 31 51 53 55 57
Insurance Charges 14 15 15 15 15
Administrative Expenses 4 4 4 5 5
Total Expenses B 137 184 194 206 218
NET OPERATING INCOME A-B 243 233 260 292 322
NON-OPERATING REVENUES
Interest on Cash Balance - - - - -
Interest on Debt Service - - 0 0 0
Interest Subsidy from Government 27 74 82 72 31
Forex Fluctuation absorbed by GoI - - - - -
Total Non-operating RevenuesC 27 74 82 72 31
NON-OPERATING EXPENSES
Interest Expenses on Debts 258 259 253 245 235
Commision on Debt Service Reserve LC - - - - -
Forex Losses on Debt Servicing - - - - -
Total Non-Operating Expenses D 258 259 253 245 235
PROFIT BEFORE DEPRE & TAX (A-B)+(C-D) 11 48 89 119 119
Depreciation as per CO Act 167 178 178 178 178
PROFIT BEFORE TAX (155) (130) (89) (59) (59)
Corporate Tax - - - - -
PROFIT AFTER TAX (155) (130) (89) (59) (59)
 Depreciation
A regular reduction in asset value over time.
As per IT act and Co. Act
WDV for IT purpose
SLM for Companys internal P & L