ITEM

INITIAL INVESTMENT
RELEASE OF BLOCKED FUNDS
PV OF OPERATING CASH FLOWS
PV OF LOST SALES
PV OF DEPN. TAX SHLDS.
ADVTG. ON SUBSIDISED LOAN
TAX SHIELDS ON ROYALTIES
INC. ROYALTY INCOME
TRANSFER PRICING ADVANTAGE
ADJ. PRESENT VALUE

(300.00) (300.00)
14.40
14.40
316.08 316.08
(18.79) (18.79)
60.44
60.44
3.02
3.02
100.89
179.37
302.47
657.88

75.15

ITEM
INITIAL INVESTMENT in Z$
WORKING CAPITAL INVESTMENT in Z$
RELEASE OF WORKING CAPITAL
DEPRECIATION (ST. LINE METHOD) (Z$)
NET SALVAGE VALUE
PLANNING HORIZON IN YEARS

50000000
5000000
0
5000000
0
10

BLOCKED FUNDS IN Z$
REPATRIATION TAX ON BLOCKED FUNDS

5000000
0.48

CONSTRUCTION PERIOD IN YEARS

3RD YEAR PRODUCTION
PRODUCTION FROM 4TH TO 10TH YEARS

2
600000
750000

SELLING PRICE IN ZIMBABWE(Z$)/WATCH

MATERIAL COST PER WATCH (Z$)
LABOUR COST PER WATCH (Z$)
SEL & DIST COST PER WATCH (Z$)
CONTRIBUTION PER WATCH IN ZIMB (Z$)
VAR. COST OF COMPONENT IN INDIA (Z$)
Var. Cost of component in Rs.
COST OF COMPONENT IN ZIMB (Z$)
CURRENT EXPORTS IN WATHCES
EXPECTED ANNUAL DECLINE IN EXPORTS
Current Export Contribution in Rs.
SUBSIDISED LOAN
TERM OF THE LOAN IN YEARS
ANNUAL INSTALMENT OF THE LOAN
INTEREST RATE ON THE LOAN
MARKET INTEREST RATE FOR TITUS

180
120
25
5
30
45
270
70
50000
0.05
150
5000000
5
0
0.12
0.15

AGREED ROYALTY AS % OF SALES

PREFERENTIAL TAX ON ROYALTY INC.

0.05
0.2

CORPORATE TAX IN ZIMB

CORPORATE TAX IN INDIA
DIVIDEND REPATRIATION TAX IN ZIMB
INFLATION IN ZIMB
INFLATION IN INDIA
CURRENT SPOT EX RATE Rs/Z$

0.45
0.40
0.05
0.12
0.10
6.00

RISKY EQUITY RATE APPLIED FOR ZIMB

RISKLESS RATE APPLIED FOR ZIMB
RISKY EQUITY RATE APPLIED FOR INDIA
RISKLESS RATE APPLIED FOR INDIA

0.25
0.21
0.20
0.16

YEAR
INITIAL INVESTMENT
WORKING CAPITAL
PRODN.IN UNITS
CONTRIB PER WATCH
CONTRIB IN Z$
DEPRECIATION
EBIT
INTEREST
EBT
TAX
EAT
OP. CASHFLOW
TERMINAL CASHFLOW
TOTAL CASHFLOW
PV FACTORS @20%
PV OF CASHFLOWS
NPV

0
(50000000.00)

1
0.00

(50000000.00)
1.0000
(50000000.00)
3730902.21

2
0.00

3
(5000000.00)

4
0.00

0
33.60
0.00
5000000.00
(5000000.00)
0.00
(5000000.00)
(2250000.00)
(2750000.00)
2250000.00

0
37.63
0.00
5000000.00
(5000000.00)
0.00
(5000000.00)
(2250000.00)
(2750000.00)
2250000.00

600000
42.15
25288704.00
5000000.00
20288704.00
0.00
20288704.00
9129916.80
11158787.20
16158787.20

750000
47.21
35404185.60
5000000.00
30404185.60
0.00
30404185.60
13681883.52
16722302.08
21722302.08

2250000.00
0.8000
1800000.00

2250000.00
0.6400
1440000.00

11158787.20
0.5120
5713299.05

21722302.08
0.4096
8897454.93

5
0.00
750000
52.87
39652687.87
5000000.00
34652687.87
0.00
34652687.87
15593709.54
19058978.33
24058978.33

6
0.00
750000
59.21
44411010.42
5000000.00
39411010.42
0.00
39411010.42
17734954.69
21676055.73
26676055.73

24058978.33 26676055.73
0.3277
0.2621
7883646.02 6992967.95

7
0.00

8
0.00

750000
66.32
49740331.67
5000000.00
44740331.67
0.00
44740331.67
20133149.25
24607182.42
29607182.42

750000
74.28
55709171.47
5000000.00
50709171.47
0.00
50709171.47
22819127.16
27890044.31
32890044.31

29607182.42
0.2097
6209076.18

32890044.31
0.1678
5518033.78

9
0.00
750000
83.19
62394272.04
5000000.00
57394272.04
0.00
57394272.04
25827422.42
31566849.62
36566849.62

10
0.00

750000
93.18
69881584.69
5000000.00
64881584.69
0.00
64881584.69
29196713.11
35684871.58
40684871.58
0.00
36566849.62 40684871.58
0.1342
0.1074
4907919.48 4368504.82

YEAR
0
EX RATE
6.0000
IN.INVEST
(50000000.00)
WCM
PRODN.IN UNITS
CONTRIB PER WATCH
CONTRIB IN Z$
TAX
POST TAX OCF in Z$
POST TAX OCF in Rs.
REPATRIATED OCF in Rs.
PV FACTOR @ 16%
1.0000
PV OF OCF in Rs.
SUM OF PV OF OCFs in Rs.
316082901.15

1
5.8929

2
5.7876

0
33.60
0.00
0.00
0.00
0.00
0.00
0.8333
0.00

0
37.63
0.00
0.00
0.00
0.00
0.00
0.6944
0.00

47500
0
165.00
0.00
0.00
0.00
0.8621
0.00

45125
0
181.50
0.00
0.00
0.00
0.7432
0.00

42869
42869
199.65
8558745.94
3423498.38
5135247.56
0.6407
3289935.76

40725
40725
219.62
8943889.50
3577555.80
5366333.70
0.5523
2963778.33

DEPRECIATION TAX SHIELDS

DEPRECIATION TAX SHIELDS
5000000.00
5000000.00
TAX SHIELDS IN Z$
2250000.00
2250000.00
TAX SHIELDS IN Rs.
13258928.57 13022161.99
PV FACTOR @ 12%
1.0000
0.8621
0.7432
PV DTS
11430110.84
9677587.69

5000000.00
2250000.00
12789623.38
0.6407
8193770.36

5000000.00
2250000.00
12561237.25
0.5523
6937459.51

LOST OF SALES
EXPORTS
LOST OF SALES
CON. PER WATCH
CONTRIBU LOST
TAX ON CON.
PO TAX CON. LOS
PV FACTOR @ 12%
PV OF LOST SALES

50000
0
150.00
0.00
0.00
0.00
1.0000
0.00

3
5.6843

4
5.5828

(5000000.00)
600000
750000
42.15
47.21
25288704.00
35404185.60
11379916.80
15931883.52
13908787.20
19472302.08
79061400.00 108709425.00
75108330.00 103273953.75
0.5787
0.4823
43465468.75
49804182.94

SUM OF PV OF LOST SALES IN Rs.

18790362.47

SUM OF PV OF DEP.TAX.SHDS.
60435696.11
SUBSIDISED LOAN ADVANTAGE
PRINCIPAL
5000000.00
INTEREST
PRINCIPAL
LOAN CFS IN Z$
5000000.00
PV FACTOR @ 15%
1.0000
PV OF SLCFS
5000000.00

(600000.00)

(600000.00)

(600000.00)

(600000.00)

(600000.00)
0.8696
(521739.13)

(600000.00)
0.7561
(453686.20)

(600000.00)
0.6575
(394509.74)

(600000.00)
0.5718
(343051.95)

600000

750000

SUM OF PV OF SLCFS
502823.26
3016939.588
TAX SHIELDS ON ROYALTIES
SALES
0

S.P. IN Z$
SAL. REV. IN Z$
ROYALTY IN Z$
RTS IN Z$
RTS IN Rs
PV FACTOR @ 12%
PV RTS IN RS

180.00
0.00
0
0.00
0.00
1.0000
0.00

201.60
0.00
0
0.00
0.00
0.8621
0.00

225.79
0.00
0
0.00
0.00
0.7432
0.00

0.00
0.00
0.00
0.00
0.8621
0

0.00
0.00
0.00
0.00
0.7432
0

252.89
283.23
151732224.00 212425113.60
7586611.2
10621255.68
3413975.04
4779565.06
19405980.00
26683222.50
0.6407
0.5523
12432590.00
14736906.25

SUM OF PV OF RTS IN Rs.

100894347.61
POST TAX ROYALTY INCOME
ROYALTY IN Z$
0.00
ROYALTY IN Rs.
0.00
TAX ON ROYALTY
0.00
POT ROYALTY
0.00
PV FACTOR @ 12%
1.0000
PV ROYALTY
0

7586611.20
43124400.00
8624880.00
34499520.00
0.6407
22102382.22

10621255.68
59296050.00
11859210.00
47436840.00
0.5523
26198944.44

SUM OF PV OF ROYALTY INCOME IN Rs.

179367729.1
TRANSFER PRICING ADVANTAGE
EXPORTS
0
EXPORT PRICE PER UNIT70.00
EXPORT RELSN in Z$
0.00
EXPORT RELSN IN Rs.
0.00
MAN COST IN RS.
270.00
TOTAL COST OF EXPORTS0.00
INC.REV. FROM TP
0.00
TAX @ 40%
0.00
POTAX REV. FROM TP
0.00
PV FACTOR @ 16%
1.0000
PV OF TP ADVTG
0

0
78.40
0.00
0.00
297.00
0.00
0.00
0.00
0.00
0.8333
0

SUM OF PV OF TRANSFER PRICING ADVTG.

302471675.7
INITIAL INVESTMENT IN Rs.
(300000000.00)
RELEASE OF BLOCKED FUNDS IN RS.
14400000

0
87.81
0.00
0.00
326.70
0.00
0.00
0.00
0.00
0.6944
0

600000
750000
98.34
110.15
59006976.00
82609766.40
335412000.00 461191500.00
359.37
395.31
215622000.00 296480250.00
119790000.00 164711250.00
47916000.00
65884500.00
71874000.00
98826750.00
0.5787
0.4823
41593750
47659505.21

5
5.4831

6
5.3852

7
5.2890

8
5.1946

9
5.1018

10
5.0107

750000
52.87
39652687.87
17843709.54
21808978.33
119580367.50
113601349.13
0.4019
45653834.36

750000
59.21
44411010.42
19984954.69
24426055.73
131538404.25
124961484.04
0.3349
41849348.17

750000
750000
750000
66.32
74.28
83.19
49740331.67
55709171.47 62394272.04
22383149.25
25069127.16 28077422.42
27357182.42
30640044.31 34316849.62
144692244.68 159161469.14 175077616.06
137457632.44 151203395.69 166323735.25
0.2791
0.2326
0.1938
38361902.49
35165077.28 32234654.17

750000
93.18
69881584.69
31446713.11
38434871.58
192585377.66
182956108.78
0.1615
29548432.99

38689
38689
241.58
9346364.53
3738545.81
5607818.72
0.4761
2669955.48

36755
36755
265.73
9766950.94
3906780.37
5860170.56
0.4104
2405261.62

34917
34917
292.31
10206463.73
4082585.49
6123878.24
0.3538
2166808.96

33171
31512
33171
31512
321.54
353.69
10665754.60 11145713.55
4266301.84
4458285.42
6399452.76
6687428.13
0.3050
0.2630
1951996.00
1758479.16

29937
29937
389.06
11647270.66
4658908.27
6988362.40
0.2267
1584147.17

5000000.00
2250000.00
12336929.44
0.4761
5873772.68

5000000.00
2250000.00
12116627.13
0.4104
4973175.76

5000000.00
2250000.00
11900258.79
0.3538
4210662.97

5000000.00
5000000.00
2250000.00
2250000.00
11687754.17 11479044.27
0.3050
0.2630
3565062.55
3018448.90

5000000.00
2250000.00
11274061.34
0.2267
2555644.85

750000

750000

(600000.00)
(5000000.00)
(5600000.00)
0.4972
(2784189.72)

750000

750000

750000

750000

317.22
237916127.23
11895806.36
5353112.86
29351544.75
0.4761
13974652.48

355.29
266466062.50
13323303.12
5995486.41
32286699.23
0.4104
13251825.63

397.92
445.67
499.15
298441990.00 334255028.80 374365632.26
14922099.5
16712751.44 18718281.61
6714944.77
7520738.15
8423226.73
35515369.15
39066906.06 42973596.67
0.3538
0.3050
0.2630
12566386.37
11916400.87 11300035.31

559.05
419289508.13
20964475.41
9434013.93
47270956.34
0.2267
10715550.72

11895806.36
65225655.00
13045131.00
52180524.00
0.4761
24843826.63

13323303.12
71748220.50
14349644.10
57398576.40
0.4104
23558801.11

14922099.50
78923042.55
15784608.51
63138434.04
0.3538
22340242.43

16712751.44
86815346.81
17363069.36
69452277.44
0.3050
21184712.65

18718281.61
95496881.49
19099376.30
76397505.19
0.2630
20088951.65

20964475.41
105046569.63
21009313.93
84037255.71
0.2267
19049867.95

750000
123.36
92522938.37
507310650.00
434.84
326128275.00
181182375.00
72472950.00
108709425.00
0.4019
43687879.77

750000
138.17
103625690.97
558041715.00
478.32
358741102.50
199300612.50
79720245.00
119580367.50
0.3349
40047223.13

750000
154.75
116060773.89
613845886.50
526.15
394615212.75
219230673.75
87692269.50
131538404.25
0.2791
36709954.53

750000
173.32
129988066.76
675230475.15
578.77
434076734.03
241153741.13
96461496.45
144692244.68
0.2326
33650791.65

750000
194.12
145586634.77
742753522.67
636.65
477484407.43
265269115.24
106107646.10
159161469.14
0.1938
30846559.02

750000
217.41
163057030.94
817028874.93
700.31
525232848.17
291796026.76
116718410.70
175077616.06
0.1615
28276012.43