PB

ANNEXURE -4
Financial Aspects Chapter
Financial Aspects of estimated cost of the project
 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

DETAILS MEANS OF FINANCE

Executive Summary of the Project Cost
Taka in 000
Total Fixed Term
Item Incurred To be Incurred cost Loan Equity
F/C L/C
Foreign Local
Currency Currency
USD BD Taka
01. Land :
-----------
Cost of 108.00 decimal land 32400 0 0 32400 0 32400
Cost of land development & Boundary 4860 0 0 4860 0 4860

02. Building & other civil works :

i. Office, Labor Shed other civil works 38778 38778 23267 15511

03. Machinery & Equipment :

Imported
-------------------------------------------
Cost of machinery (Annex) in USD 2171300 176527
Pre-Shipment Inspection Cost (1% of C&F) 0 1765
Marine Insurance (1% of C&F Cost) 0 1765
Clearing & Forwarding (1% of C&F
cost) 0 1765
Import Licence Fee (0.10% of C&F) 0 177
L/C commission (0.40% of C&F) 0 706
Duty & Tax (4%) 7061 189766 170790 18977
04. Local Machinery :
--------------------------------
2OOO KVA Complete Sub.Station 8025 8025 6420 1605

05. Silo Project:

--------------------------------
3x5000 MT Flat Bottom Silo Project 66652 66652 53321 13330

06. Utility Cost :

-----------------------
Security deposit 0.00 882 882 0.00 882
Installation Cost 0.00 1,589 1,589 0.00 1589
07. Office Equipment/Other Assets :
-----------------------------------------------
--------
Office Equipment/Other Assets 0.00 500 500 0.00 500
Safety & Fire fighting equipment 0.00 200 200 0.00 200

08. Pre-operating Expenses :

--------------------------------------------
Legal, documentation, consultant fee. etc. 0.00 200 200 0.00 200
---------------
----------------- -- -----------------
Sub Total Cost of the Project 343852 253798 90054
Net Margin of Working Capital 227642
Total Cost of the Project 571494
Equity 74 26

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

Estimated Financial Expenses

Tk in 000
1st Year 2nd Year 3rd Year 4th Year 5th Year
Profit on Term Investment@ 12% 30456 26105 21754 17403 13052
Profit on working capital @ 12% 245853 246500 246606 246712 246823
Total+PDCP 280660 276955 272711 268466 264227
Calculation of profit of Term Inv. 1st Year 2nd Year 3rd Year 4th Year 5th Year
(7 years Project Life)
Principal 253798 217541 181284 145027 108771
Installment 36257 36257 36257 36257 36257
Balance 217541 181284 145027 108771 72514
Profit @ 12% P.A 30456 26105 21754 17403 13052

Total Working Capital 2276421 2282404 2283389 2284368 2285402

90% Investment from Bank 2048779 2054164 2055051 2055931 2056862
Equity Participation 10% 227642 228240 228339 228437 228540
12% Profit on Working Capital 245853 246500 246606 246712 246823

Profit During the Construction

Period (PDCP) 4351 4351 4351 4351 4351

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

Purchase Estimate

Raw Material Required for Feed, Soy & Silo Project:

For Cow Cattle Feed Plant: 72720 MT/Yr
For Fish & Poultry Feed Plant: 48480 MT/Yr
For Floating Fish Feed Plant: 24240 MT/Yr 240 72720 72000 720 72720
For Soy Extruder Plant: 24240 MT/Yr 160 48480 48000 480 48480
Soy required For Silo-1: 21000 MT/Yr 80 24240 24000 240 24240
Maize required For Silo-2: 31500 MT/Yr 80 24240 24000 240 24240
Maize required For Silo-3: 31500 MT/Yr 168000 169680

1 Commodity % MT Average Value of

2 Price/MT Purchase
3 Tk in 000
4 Raw Materials required For Cow Cattle Feed Plant: 100% 72720 23000 1672560
Raw Materials For Fish & Poultry Feed Plant: 100% 48480 28000 1357440
Raw Materials For Floating Fish Feed Plant: 100% 24240 32000 775680
5 Raw Materials For Soy Extruder Plant: 100% 24240 30000 727200
Sub Total 169680 4532880
Less: Storage in Silo Project 84000 2121000
Mode Total 85680 2411880
For Storage in Silo Project Raw Materials Required:
Soy required for Silo-1 100% 21000 35000 735000
Maize required for Silo-2 100% 31500 22000 693000
Maize required for Silo-3 100% 31500 22000 693000
Mode Total 84000 2121000

Grand Total 169680 4532880

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

Assessment of Working Capital

Tk in 000
A. Current Assets Tied up 1st year 2nd year 3rd year 4th year 5th year
Period
Raw Materials 30 Days 453288 453288 453288 453288 453288
Stores & Spares 90 Days 377 415 452 490 528
Work in process 10 Days 151096 151096 151096 151096 151096
Finished Goods 10 Days 187016 187016 187016 187016 187016
Receivables 60 Days 1122096 1122096 1122096 1122096 1122096
Salary expenses 30 Days 7648 13594 14541 15482 16478

Assessment of Working Capital for Silo Project

Soy of 5000 MT for Silo-1 60 Days 147000 147000 147000 147000 147000
Maize of 5000 MT for Silo-2 45 Days 103950 103950 103950 103950 103950
Maize of 5000 MT for Silo-3 45 Days 103950 103950 103950 103950 103950

2276421 2282404 2283389 2284368 2285402

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

Cost of Goods sold

Item 1st Year 2nd Year 3rd Year 4th Year 5th Year
Raw Materials 3173016 3399660 3626304 3852948 4079592
Wages & Salaries 33320 34986 36735 38572 40501
Stores & Spares 1257 1383 1508 1634 1760
Repairs & Maintenance 1934 2186 2563 2814 3065
Depreciation 28453 28453 28453 28453 28453
Electric Power, Fuel & Lubricants 74103 78666 83229 87792 92355

Cost of Production 3312083 3545333 3778792 4012213 4245726

Goods available for sale 3312083 3545333 3778792 4012213 4245726

Less Closing stock of finished goods 187016 187016 187016 187016 187016
Cost of goods sold 3125067 3358317 3591776 3825197 4058710

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

Sales Estimate
Tk in 000
Item 1st year 2nd year 3rd year 4th year 5th Year
Revenue at rated capacity 5610480 5610480 5610480 5610480 5610480
Capacity utilization 70% 75% 80% 85% 90%
Revenue at rated capacity Utilization 3927336 4207860 4488384 4768908 5049432

Opening Stock of Finished Goods 187016 187016 187016 187016

Sales Revenue 3927336 4207860 4488384 4768908 5049432
Closing Stock fo finished goods 187016 187016 187016 187016 187016
Total Sales Revenue 3740320 4020844 4301368 4581892 4862416
Net sales 3740320 4020844 4301368 4581892 4862416

Assumptions:
Total Capacity
02. Sales revenue at 100% capacity utilization
Item Unit Quantity Unit price Total Sales
in Tk. Tk. in 000
Finished Goods (Local Sale)
Cow Cattle Feed Sales MT 69840 26000 1815840
Fish & Poultry Feed Sales MT 46560 40000 1862400
Floating Fish Feed Sales MT 23280 43000 1001040
Soy (SBM) Extruder Sales MT 23280 40000 931200

Sales after wastage utilization

Less: 3% wastage in operation

Total 162960 5610480

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

Forecast of Earning

TK. in 000
Item 1st year 2nd year 3rd year 4th year 5th Year
Sales Revenue 3740320 4020844 4301368 4581892 4862416
Cost of Goods Sold 3125067 3358317 3591776 3825197 4058710
Gross Profit 615253 662527 709592 756695 803706
Administrative, Operating & Marketing Expenses 43160 46576 50511 54319 58367
Profit before tax & Interest/Operating profit 572093 615951 659081 702376 745339
Financial Expenses 280660 276955 272711 268466 264227
Net Operating Profit 291433 338995 386370 433910 481112

Income Tax-Tax Holiday for 5 Years 0 0 0 0 0

Net Profit 291433 338995 386370 433910 481112

Retained earnings 291433 338995 386370 433910 481112

Cumulative retained earnings 291433 630428 1016798 1450708 1931820

Ratios:
Gross Profit to sales 16.45% 16.48% 16.50% 16.51% 16.53%
Operating Profit to sales 15.30% 15.32% 15.32% 15.33% 15.33%
Net Profit to sales 7.79% 8.43% 8.98% 9.47% 9.89%

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

Other Manufacturing Overhead

Water, Power & Fuel Requirements
Taka in 000
Water:
Sources of Water : Own Shallow Tube well

Power:
Sources of Power PDB/Pally Bidyut Samity & Generator
:
Maximum Demand : 21532 Unit/Day
Flat Rate : 12
Operation Hour : 300 Day/Average
Requirement of power : 77515
:
:
:
:

:
:
VAT 15% 11627
Total : 89142

Fuel Lubricants:
Item Quantity Unita Price Total Tk
in Tk in 000
Diesel 100*300/Year 480000 75 18000
Rice Husk 500*300/Year 2400000 5 72000
Mobil Oil 1*300/Year 4800 120 2400
Total 92400
Unit/Day
Requirements 1st Year 2nd Year 3rd Year 4th Year 5th Year

Power (35% of total consumptions) 31200 31200 31200 31200 31200

Fuel (65% of total consumptions) 60060 60060 60060 60060 60060
Total 91260 91260 91260 91260 91260

Capacity Utilization 80% 85% 90% 95% 100%

Requirement at attainable capacity 73008 77571 82134 86697 91260

Demand Charge 913 913 913 913 913
Service Charge 183 183 183 183 183

Total Cost of Fuel & Lubricants 74103 78666 83229 87792 92355

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

TK. in 000
Stores & Spares 1st Year 2nd Year 3rd Year 4th Year 5th Year

On Machinery Cost 1257 1383 1508 1634 1760

Repairs & Maintenance

On Machinery Cost 1885 2137 2514 2765 3016

On Building Cost 49 49 49 49 49

Total 1934 2186 2563 2814 3065

Depreciation: Amount Depreciation Depreciated

Rate Amount

Building 38778 5% 1939

Machinery 264443 10% 26444
Furniture, Fixture & others 700 10% 70

Total 28453

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

General, Administrative & Selling Expenses

Tk. in 000
Item 1st Year 2nd Year 3rd Year 4th Year 5th Year
Director's remuneration 2400 2400 2400 2400 2400
Salary 19838 21822 24004 26404 29045
Postage, Telephone & Telegram 400 425 450 450 450
Stationary & Printing 240 240 240 240 240
Travelling & Conveyance 280 280 300 300 300
Yearly Dealer Incentive & Commission 18702 20104 21507 22909 24312
Advertisement & Marketting 1200 1200 1500 1500 1500
Audit Fee 20 20 20 20 20
Miscellaneous Expenses 80 85 90 95 100
Total 43160 46576 50511 54319 58367

Assumption
1. Salary & Allowances
Name of the post No. of Salary Monthly Annual
Post Per Post Salary Tk in 000
01. General Manager (Plant) 2 100000 200000 2400
02. Production Officer 2 30000 60000 720
03. Production Supervisor 4 18000 72000 864
04. Electrical Engineer 2 30000 60000 720
05. Mechanical Engineer 2 20000 40000 480
06. Chief Accountant 2 50000 100000 1200
07. Accountant Assistant 4 25000 100000 1200
08. Store Office Staff 4 25000 100000 1200
09. Office Staff 7 15000 105000 1260
10. AGM Marketting 2 50000 100000 1200
11. Marketting Officer & Vaterinary doctor 18 20000 360000 4320
12. MLSS Peon 4 8000 32000 384
13. Security Guard 10 8000 80000 960
14. Cleaner 2 4000 8000 96

Total 65 1417000 17004

Item 1st Year 2nd Year 3rd Year 4th Year 5th Year
Salaries 17004 17004 18704 20575 22632
Increment 10% 0 1700 1870 2057 2263
Total 17004 18704 20575 22632 24896
Bonus=2 Months basic 2834 3117 3429 3772 4149
Total Salary 19838 21822 24004 26404 29045

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

** Factory Worker Wages & Salaries

i) Salary: TK. in 000

Item 1st Year 2nd Year 3rd Year 4th Year 5th Year
Wages & Salaries 28560 28560 29988 31487 33062
Increment 5% 1428 1499 1574 1653
Total 28560 29988 31487 33062 34715
Bonus= 2 months basic 4760 4998 5248 5510 5786
Total Wages & Salaries 33320 34986 36735 38572 40501

Assumption of wages & salaries

Name of the post No. of Monthly Yearly
Wages &
Salaries
Post Salary Tk in 000
Foreman 10 10000 1200
Skilled Worker & Daily Labor 60 8000 5760
Un Skilled Worker & Daily Labor 300 6000 21600

Total 370 24000 28560

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

Sensitivity analysis
Based on 5% increase in Production Cost
TK. in 000
Item 1st year 2nd year 3rd year 4th year 5th Year
Sales Revenue 3740320 4020844 4301368 4581892 4862416
Cost of Goods Sold 3281321 3526233 3771365 4016457 4261645
Gross Profit 458999 494611 530003 565435 600771
Administrative & Marketing Expenses 43160 46576 50511 54319 58367
Profit before tax & Interest/Operating profit 415840 448035 479492 511116 542404
Financial Expenses 280660 276955 272711 268466 264227
Net Operating Profit 135180 171079 206781 242650 278177

Tax Holiday for 5 Years 0 0 0 0 0

Net Profit after Tax 135180 171079 206781 242650 278177

Retained Earnings 135180 171079 206781 242650 278177

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

Sensitivity analysis
Based on 5% decrease in Sales
TK. in 000
Item 1st year 2nd year 3rd year 4th year 5th Year
Sales Revenue 3553304 3819802 4086300 4352797 4619295
Cost of Goods Sold 3125067 3358317 3591776 3825197 4058710
Gross Profit 428237 461484 494523 527600 560585
Administrative & Marketing Expenses 43160 46576 50511 54319 58367
Profit before tax & st/Operating profit 385077 414908 444012 473281 502218
Financial Expenses 280660 276955 272711 268466 264227
Net Operating Profit 104417 137953 171301 204815 237992

Tax Holiday for 5 years 0 0 0 0 0

Net Profit after Tax 104417 137953 171301 204815 237992

Retained Earnings 104417 137953 171301 204815 237992

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

Break Even Analysis

TK. in 000
At the fourth year

01. Sales & Service revenue at 85% Capacity 4581892

02. Total cost: Operational, Administrative and Financial

Item Total Cost Fixed Cost Varieable

Cost
Raw Materials 3852948 0 3852948
Wages & Salaries 38572 7714 30858
Stores & Spares 1634 1257 377
Repairs & Maintenance 2814 1835 979
Depreciation & Write Off 28453 22766 5687
Water, Power & Fuel 87792 19473 68319
Salary (Administrative) 28804 19444 9360
Postage, Telephone & Telegraph 450 200 250
Stationery & Printing 240 100 140
Travelling & Conveyance 300 118 182
Audit Fee 20 20 0
Financial Expenses 268466 21754 246712
Total 4310494 94682 4215812

P/V Ratio: Sales-Variable Cost/Sales 0.079897

Break Even Point (Sales)=Fixed Cost/PV Ratio 1185043 26% of capacity utilization
21% of rated capacity

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

Projected Cash Flow Statement

TK. in 000
Const. 1st Year 2nd Year 3rd Year 4th Year 5th Year
Year
Paid-up Capital 317696 227642 228240 228339 228437 228540
Operating Profit 572093 615951 659081 702376 745339
Depreciation & Write off 28453 28453 28453 28453 28453
Bank's Term Loan 253798 2048779 2054164 2055051 2055931 2056862
Total 571494 2876967 2926808 2970923 3015197 3059194

Utilisation of Fund

Capital Expenditure 343652

Preliminary Expenses 200
Increase in Current Assets 2276421 2282404 2283389 2284368 2285402
Repayment of Term Loan 36257 36257 36257 36257 36257
Repayment of profit 280660 276955 272711 268466 264227
Investment in Govt. bond 0 0 0 0 0
Dividend
Total 343852 2593338 2595617 2592357 2589091 2585885

Cash Surplus/deficit 227642 283629 331191 378566 426106 473309

Opening Balance of Cash 227642 511271 842463 1221029 1647135
Closing Balance of Cash 227642 511271 842463 1221029 1647135 2120444

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

Projected Balance Sheet

TK. in 000
Properties & Assets Const. 1st Year 2nd Year 3rd Year 4th Year 5th Year
Year
Current Assets

Cash & Bank Balance 227642 511271 842463 1221029 1647135 2120444
Other Current Assets 0 2048779 2054164 2055051 2055931 2056862

227642 2560050 2896627 3276079 3703067 4177306

Fixed Assets

Income Tax Payment

Preliminary & Pre-operating Expenses 200 200 200 200 200 200
Fixed Assets (Net) 343652 315199 286746 258293 229839 201386
343852 315399 286946 258493 230039 201586

Total Assets 571494 2875449 3183573 3534572 3933106 4378892

Capital & Liabilities

Term Loan

Bank's Term Loan 253798 217541 181284 145027 108771 72514

Short Term Loan 2048779 2054164 2055051 2055931 2056862

Owner's Equity
Paid up Capital 317696 317696 609129 948124 1334494 1768404
Provision for income tax
Retained Earnings 291433 338995 386370 433910 481112
317696 609129 948124 1334494 1768404 2249517

Total Capital & Liabilities 571494 2875449 3183573 3534572 3933106 4378892

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

Debt-Service Coverage Ratio

TK. in 000
Income: 1st Year 2nd Year 3rd Year 4th Year 5th Year

Net Operating Profit 291433 338995 386370 433910 481112

Depreciation & Write off 28453 28453 28453 28453 28453

Total 319886 367448 414823 462363 509566

Obligation:

Financial Expenses 280660 276955 272711 268466 264227

Installment of Term Loan 36257 36257 36257 36257 36257

Total 316917 313212 308968 304723 300484

Debt-Service Coverage Ratio (Time) 1.01 1.17 1.34 1.52 1.70

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

NPV-PBP-BC Ratio

Year Items Amount PVF @ 12% PV PVF @20% PV

0 Initial Investment -571494 1.000 -571494 1.000 -571494
Cash Inflow
1 319886 0.893 285658 0.833 266465
2 367448 0.797 292856 0.694 255009
3 414823 0.712 295354 0.579 240182
4 462363 0.636 294063 0.482 222859
5 509566 0.567 288924 0.402 204845

Cumulative Present Value= 1456855 1189361

Net Present Value= 885361 617867
Average Cash Inflow= 276545
Pay Back Period= Initial Investment/Average Cash Inflow

571494/276545= 2.10 Year

BC Ratio= PV/Initial Investment= 1456855/571494

2.55

IRR=LR+{NPV at LR/(NPV at LR-NPV at HR)}x(HR-LR)

12+{885361/(885361-617867)}x(20-12)
12+(885361/267494)x8
12+3.30x8
12+26.47
38.47

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

SWOT Analysis:

Experienced Director(s) having capability to well-labor management.

The industry has been engaged on production of Poultry & Fish Feed which
has highly demand in Bangladesh.
Strength : Well and established marketing network, which is ensuring the proper and
prompt selling of the manufactured products in all over the Bangladesh.

Availability of the Raw Material as well as labour at cheaper cost.

The Industry is dealing with such kind of products, which are not the basic

Weakness : need of the people. Production may be hampered for scarcity of Raw
Materials, because the raw materials become rotted easily.

The industry is an environment friendly. The raw material may be substituted

Opportunity : by locally which will be cheaper than imports.

Threat : Increasing of the competition day-by-day.

View After feasibility study it reveals that the project is expected to generate
adequate earning to pay the Banks profit, pay back the capital
Investment and retain a substantial amount of profit. On
implementation the project will add Taka 615253 to the Gross Domestic
Product (GDP) per annum. Besides, the project if implemented is
expected to generate employment opportunity of 500 persons in
: different categories. From the detailed analysis, it seems that the
project is commercially rewarding, technically feasible, financially
viable, socially desirable and economically beneficial. So, the project
may be under taken for bank financing. All the above measures of
investment feasibility of the project indicate that it will be able to
generate sufficient cash from its operations to pay back debt
obligation. So, the project may be undertaken for bank financing.

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 Feasibility Study Report of Alal Poultry & Fish Feed Ltd.

ANNEXURE -5
OTHER NECESSARY PAPERS

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