APPLICATION FOR FINANCIAL ASSISTANCE FROM EQUITY AND ENTREPRENEURSHIP FUND (EEF) BANGLADESH BANK

DELTA SYSTEMS LIMITED

CORPORATE OFFICE : 8 Panthapath, Level-14 Unique Trade Center (UTC) Tejgaon, Dhaka.

GENERAL CONTENTS
PART I : APPLICATION FOR FINANCIAL ASSISTANCE FROM THE EEF UNIT, BANGLADESH BANK

PART II

FEASIBILITY REPORT ON DELTA SYSTEMS LIMITED

PART III

MEMORANDUM & ARTICLES OF ASSOCIATION OF DELTA SYSTEMS LIMITED

PART I APPLICATION FOR FINANCIAL ASSISTANCE FROM THE EQUITY & ENTREPRENEURSHIP FUND (EEF) BANGLADESH BANK

Bank/DFI/EEF Unit
Application Form For Financial Assistance For a New Project

1.0

Proposed Project :

1.1 1.2

Name of the Project Address : a. Corporate Office

Delta Systems Limited

8 Panthapath, Level-14 Unique Trade Center (UTC) Tejgaon, Dhaka.

b. Project Office

153/1, Green Road. Dhaka-1205.

2.0

Promoters : 2.1 Particulars of the Promoters :

Name Engr. Bellal Hossain Shikder Engr. Faizul Hoque Shikder

Address House # 8, Road # 12 Dhanmondi, Dhaka. 7D, House # 5/Kha, Shatmosjid Road, Mohammadpur, Dhaka.

Status Managing Director Director

2.2

Bio-data of the Promoters (Sponsors/Directors)

Furnished as per Form1 (enclosed)

2.3

Personal Networth Statement of the Promoters

Furnished as per Form2 (enclosed)

2.4

Declaration of particulars of sister/allied concern (s)

Furnished as per Form3 (enclosed)

2.5

Specimen of the letters addressed to the bankers of the Promoters

Enclosed.

3.0

TESTS OF PROJECTS VIABILITY: In appraising the project, the viability tests have been made, as follows, on the basis of the factors and/or aspects prescribed in Form5:

3.1

Appraisal of the Sponsors/Entrepreneurs : The overall management and operation of the project will be under the joint supervision and guidance of the promoters as mentioned earlier. A brief description of background and experience of all the sponsors is furnished hereunder :

Engr. Bellal Hossain Shikder : The Managing Director of the Company Engr. Bellal Hossain Shikder, aged 39, is a B. Sc. in Civil Engineering from BUET and also an MBA form the University of Dhaka. He is a well experienced in Information Technology (both hardware & software). He has been running business in this sector for more than one year and has already achieved remarkable success. His success in the relevant sector made him confident enough to take up a venture in larger shape. Engr. Bellal Hossain is a social worker and he is engaged in various socio-cultural activities. Engr. Faizul Hoque Shikder : Engr. Faizul Hoque Shikder, aged 27 is a B. Sc. in Agricultural Engineering and an M. Sc. in Food Technology. He is a Director of the Company. He is an experienced businessman in IT sector, who has been doing this business for more than one year. Engr. Faizul Hoque is a young, dynamic person who is devoted to business in IT sectors. He is very much enthusiastic and confident about success in IT related businesses. Engr. Faizul Hoque is a good organizer and social worker. He is a popular person in his community and spends time to do social well being.

3.2

Technical, Technological and Environment Tests :

The project has been designed mainly for developing computer software and selling the same at both local and foreign markets/buyers. The software have been getting an increasing

demand day by day, but the supply situation (production of software) has not been at a level in relation to demand. For this reason, there prevails a demand-supply gap (i.e. supply deficiency) in this sector, especially in the western countries. The main and the most valuable component of the software industry is the IT professionals. Fortunately, Bangladesh is enriched with this type of professionals who possess the highest brilliance and excellent ideas/innovations. But this is yet to be focused in the international arena. And if this can be highlighted before the world, it could be a great source of foreign currency for the country. The project is environment friendly. So, it will put no adverse effect on the environment. Rather, it is likely to create employment for a good number of educated people and thus will play a satisfactory socio-economic role. The project is of utmost priority set by the present Government with a view to developing the software sector, which will ultimately contribute significantly in the economic development of the country.

3.3

Financial Feasibility: The project is financially feasible. This is indicated by the following evaluating factors:

Breakeven point :

60% of :

assumed capacity.

Internal Rate of Return (IRR) Payback period Margin of safety : :

25 %

5 years 40%

and 3 months.

3.4

Projects Return : The after-tax return of the project are shown as follows:

Return on sponsors : 10% (4th year) Return on total : 5% (4th year) Return on assets : 6% (4th

Paid-up capital

Capital outlay

year) So the projects return can be considered to be satisfactory. 3.5 Ratio Analysis: All financial ratios of the project show a comparatively better picture, as follows, than the minimum standards set by the EEF Unit of Bangladesh Bank :
Factors Gross profit to sales (%) Projects Ratios
Year-1 51 Year-2 40 Year-3 39 Year-4 38 Year-5 38

Operating profit to sales (%) Net Profit to sales (%) Debt-service Coverage Ratio (times) Fixed Assets Coverage Ratio (times)

18 13 2.95 1.83

10 07 2.57 1.81

10 08 2.65 1.77

12 09 2.81 1.72

14 10 2.99 1.64

3.6

SWOT Analysis: Strengths: The project location is an excellent one and it enjoys a good communication network with all infrastructure facilities being available. All the promoters are financially sound and have the affordability of equity participation against their respective shareholdings in the company. The promoters of the project are all highly educated with bright academic records. So the project is enriched with the persons who are quite sound and capable in business management and operational aspects.

Weakness: The software industry in Bangladesh is still at its infant stage. People do not come forward to develop this sector mainly due to financial incapability and some sort of confusion about its prospect.

For competing in the international market, volume and quality should be significantly high to achieve the acceptability.

Opportunities: There is a vast market demand of the software, especially in the western countries of the world, which is getting an increasing shape day by day. So the software developing projects of the country have a lot to exploit it. Talented professionals required to run this type of venture can be obtained locally. This will enable the project to have a costbenefit advantage. The software project will be socially and economically well accepted and environment friendly having no adverse effect on the surrounding areas.

Threats: The resourceful brilliant professionals may leave the country for better prospect and living standard in absence of their desired placement. The software project may face struggle to survive in absence of vigorous marketing efforts.

Political unrest may cause some problem in case of the projects desired progression.

4.0 4.1 4.2 4.3 4.4 4.5

CORPORATE SET-UP/CONSTITUTION: Corporate Set-up Date of incorporation Certificate of incorporation Memorandum & Articles of Association of the Company TIN of Directors of the Company and sister concerns : : : : : Private Limited Company 27.01.01 Copy enclosed, duly certified by the Managing Director of the company. Copy enclosed, duly certified by the Managing Director of the Company. Copy of certificates enclosed.

5.0

PARTICULARS OF THE PROJECT:

Feasibility Report on the project containing the particulars prescribed in the Application Form of the EEF Unit of Bangladesh Bank has been prepared and enclosed hereto. We do hereby solemnly declare and affirm that the statement and information furnished in this Application and the Forms and the Feasibility Report enclosed herewith are correct and true, and nothing has been concealed therefrom, and if at any time it transpires that we have suppressed any fact and/or supplied wrong information, we shall be held liable therefor. We agree to furnish you any further information as may be required by the Bank/DFI.

Name and Designation

Signature

1.

Engr. Bellal Hossain Shikder Managing Director

___________________

2.

Engr. Faizul Haque Shikder Director

___________________

Date : ____________

Form-1(a)

Name of company:

PHOTO

BIO-DATA OF THE SPONSORS/DIRECTORS

01. 02. 03. 04. 05. 06.

Name Fathers Name Mothers Name Nationality Age/Date of birth Address : a) Present

: : : : :

Engr. Bellal Hossain Shikder Late Shyad Ali Shikder Nurzahan Begum Bangladeshi 01.03.1964

House # 8, Road # 12 Dhanmondi, Dhaka.

b)

Permanent

House # 8, Road # 12 Dhanmondi, Dhaka.

07. 08.

Home district Educational Qualification

: :

Bagerhat. B. Sc. in Civil Engineering from BUET. MBA from the University of Dhaka.

Form-1(b) 09. Technical or any other qualifications (a) (b) 10. : Information Technology enabled knowledge in both hardware and software. Teaching.

Industrial/Business/Other experience :
Name of Company Delta Systems Ltd. Nature of Business Information Technology Location/ Address House # 83/A, Road # 11A, Dhanmondi, Dhaka House # 83/A, Road # 11A, Dhanmondi, Dhaka Main Products Brand PC i-friend & software Education Position/ Jobs Managing Director Duration with date Since 27.01.01

Delta School of Mathematics

Private Education

Chairman

16 years

11. 12.

Whether associated with any projects financed by Bank/DFI : N/A. Any other information : (a) (b) Earned wide reputation in teaching profession. Engaged in various other social & religious activities.

D E C L A R A T I O N
I do hereby declare thati) ii) iii) iv) I am a bonafide national of Bangladesh; I am not a minor; neither I am nor my spouse is serving with any Government/SemiGovernment/Autonomous Body; and the particulars furnished above are true and correct.

(Engr. Bellal Hossain Shikder) Date :______________ Signature of the Sponsor/Director

Form-1(a)

Name of company : Delta Systems Limited

PHOTO

BIO-DATA OF THE SPONSORS/DIRECTORS

01. 02. 03. 04. 05. 06.

Name Fathers Name Mothers Name Nationality Age/Date of birth Address : a) Present

: : : : :

Engr. Faizul Hoque Shikder Late Shyad Ali Shikder Nurzahan Begum Bangladeshi 01.01.1976

7D, House # 5/Kha, Satmasjid Road Mohammadpur, Dhaka.

b)

Permanent

Vill + PO: Barabaria Chitalmari, Bagerhat.

07. 08.

Home district Educational Qualification

: :

Bagerhat. B. Sc. in Agricultural Engineering. M. Sc. in Food Technology.

Form-1(b)

09.

Technical or any other qualifications (a) (b)

Diploma in Information Technology from Bhuiyan Academy, Dhaka. Information Technology enabled knowledge in both hardware and software.

10.

Industrial/Business/Other experience :
Name of Company Delta Systems Ltd. Nature of Business Information Technology Location/ Address House # 83/A, Road # 11A, Dhanmondi, Dhaka House # 83/A, Road # 11A, Dhanmondi, Dhaka Main Products Brand PC i-friend & software Education Position/ Jobs Director Duration with date Since 27.01.01

Delta School of Mathematics

Private Education

Partner

2 years

11. 12. b) c)

Whether associated with any projects financed by Bank/DFI : N/A. Any other information : a) A good social organizer. Earned reputation in teaching profession. Engaged in various other social and religious activities.

D E C L A R A T I O N
I do hereby declare thati) ii) iii) iv) I am a bonafide national of Bangladesh; I am not a minor; neither I am nor my spouse is serving with any Government/SemiGovernment/Autonomous Body; and the particulars furnished above are true and correct.

(Engr. Faizul Hoque Shikder) Date :______________ Signature of the Sponsor/Director

Form-2(a)

PERSONAL NETWORTH STATEMENT

Name : Address : Engr. Bellal Hossain Shikder House # 8, Road # 12 Flat # B-5 Dhanmondi, Dhaka. S/O Age Profession Position Children : : : : : Late Shyad Ali Shikder 39 years Business Managing Director Married Male 01 Female --

Marital Status :

For the purpose of obtaining financial assistance from time to time in any form whatsoever from the Bank/DFI/EEF, the undersigned submits the following as being a true and accurate statement of his financial condition on the date mentioned herein and also agree that if any change occurs, the undersigned will immediately notify the same to the Bank/DFI/EEF : NETWORTH STATEMENT AS ON 10.04.2003
Amount(Tk)

ASSETS
CASH : a) In hand b) With other Banks INVESTMENT : Government securities, Shares, Debenture, Bonds, etc. (Private Investment) Debtors Real estate (encumbered) (Schedule-B) Real estate (unencumbered) (Schedule-C) Cash surrender value for Life Policy Others Total :

Amount (Tk) 7,56,000 12,00,000

LIABILITIES :
Loan from Banks/Financial Institutions (Schedule-A) : Secured Unsecured Other Creditors

15,00,000

5,00,000 -

20,00,000 1,20,00,000 2,50,000 75,00,000 2,52,06,000

Unpaid Taxes Other liabilities

Total :

5,00,000

Net Worth (Total Assets Total Liabilities) : Tk. 2,47,06,000

Form-2(b)

Name of company :

SCHEDULEA : LIABILITIES TO BANKS/FINANCIAL INSTITUTIONS :

Name & address of the Bank/Financial Institution Pubali Bank Satmosjid Road, Dhaka Date of availing of the loan Limit with validity Present outstanding Secured with nature of security 40% of Savings Certificates held

Dec-2001

Tk 8,00,000

Tk 5,00,000

SCHEDULEB : REAL ESTATES (ENCUMBERED) : N/A

Location and tenure of ownership Area of land Description and Schedule of the Property and type of building Mortgage and mortgage amount Land Market Price Building Total

SCHEDULEC REAL ESTATES (UNENCUMBERED) :

Location and tenure of ownership Area of land 1400sft Description and Schedule of the Property and type of building Apartment Building. Market Price (Tk in 000) Land Building Total 3000 3000

House # 8, Road # 12 Flat # B-5, Dhanmondi, Dhaka.

8 Panthapath, Level-14 Green Road, Dhaka. 9C, Concord Centre Framgate, Dhaka Total :

2844sft

Commercial Building

8000

8000

550 sft

Commercial Building

1000

1000

12000

12000

Form2(c)

DECLARATION

(a)

I do hereby declare that I do not have liabilities to any Banks/DFIs in my name or in the name of any company/concern in which I hold interests;

(b) (c)

I do hereby declare that the above named assets are owned by me; and I do hereby declare that my Income Tax (Payers) Identification Number (TIN) is/are ________________________ and Income Tax liabilities is/are cleared up to the assessment year ____________________ (photo copies of tax payment documents is/are enclosed).

The undersigned certifies that the information furnished herein is true and correct.

Date : _____________

(Engr. Bellal Hossain Shikder) Signature of the Sponsor/Director

Form-2(a)

PERSONAL NETWORTH STATEMENT

Name : Address : Engr. Faizul Hoque Shikder 7D, House # 5/Kha Satmasjid Road Mohammadpur Dhaka. S/O Age Profession Position Children : : : : : Late Shyad Ali Shikder 27 years Business Director Unmarried Male -Female --

Marital Status :

For the purpose of obtaining financial assistance from time to time in any form whatsoever from the Bank/DFI/EEF, the undersigned submits the following as being a true and accurate statement of his financial condition on the date mentioned herein and also agree that if any change occurs, the undersigned will immediately notify the same to the Bank/DFI/EEF : NETWORTH STATEMENT AS ON 10.04.2003
Amount(Tk)

ASSETS
CASH : a) In hand b) With other Banks INVESTMENT : Government securities, Shares, Debenture, Bonds, etc. (Private Investment) Debtors Real estate (encumbered) (Schedule-B) Real estate (unencumbered) (Schedule-C) Cash surrender value for Life Policy Others Total :

Amount (Tk) 5,00,000 3,00,000

LIABILITIES :
Loan from Banks/Financial Institutions (Schedule-A) : Secured Unsecured Other Creditors

5,00,000

5,00,000 -

Unpaid Taxes Other liabilities

10,00,000 28,00,000 Total : -

Net Worth (Total Assets Total Liabilities) : Tk 28,00,000

Form-2(b)

Name of company : Delta Systems Limited

SCHEDULEA : LIABILITIES TO BANKS/FINANCIAL INSTITUTIONS : N/A

Name & address of the Bank/Financial Institution Date of availing of the loan Limit with validity Present outstanding Secured with nature of security

SCHEDULEB : REAL ESTATES (ENCUMBERED) : N/A

Location and tenure of ownership Area of land Description and Schedule of the Property and type of building Mortgage and mortgage amount Land Market Price Building Total

SCHEDULEC REAL ESTATES (UNENCUMBERED) :

Location and tenure of ownership Area of land Description and Schedule of the Property and type of building Market Price (000 Tk) Land Building Total

Total :

Form2(c)

DECLARATION

(a)

I do hereby declare that I do not have liabilities to any Banks/DFIs in my name or in the name of any company/concern in which I hold interests;

(b) (c)

I do hereby declare that the above named assets are owned by me; and I do hereby declare that my Income Tax (Payers) Identification Number (TIN) is/are ________________________ and Income Tax liabilities is/are cleared up to the assessment year ____________________ (photo copies of tax payment documents is/are enclosed).

The undersigned certifies that the information furnished herein is true and correct.

Date : _____________

(Engr. Faizul Hoque Shikder) Signature of the Sponsor/Director

Form-3
Name of the Company : Delta System Limited Bank/DFI/EEF Sub : Declaration of particulars of my sister/allied concern(s). Dear Sir, I do hereby declare that the particulars of my sister/allied concern(s) is/are as follows: (1) (2) Name of business concern(s) Name, Fathers Name & Address of the proprietor/partners/Directors : : : Delta School of Mathematics Engr. Bellal Hossain Shikder S/O. Late Shyad Ali Shikder House # 8, Road # 12 Dhanmondi, Dhaka. Engr. Faizul Hoque Shikder S/O. Late Shyad Ali Shikder 7D, House # 5/Kha Satmasjid Road, Mohammadpur Dhaka. (3) (4) Business address Name of the Banker : : House # 83/A, Road # 11/A Dhanmondi, Dhaka.

(5)

Position of loans/liabilities Name of loan Amount -

N/A Security -

Present outstanding -

I confirm that I have no other sister/allied concern and liabilities beyond those as declared herein.

Date : _____________________

(Engr. Bellal Hossain Shikder) Signature of the Sponsors/Director

Form-3
Name of the Company : Delta System Limited Bank/DFI/EEF Sub : Declaration of particulars of my sister/allied concern(s). Dear Sir, I do hereby declare that the particulars of my sister/allied concern(s) is/are as follows: (1) (2) Name of business concern(s) Name, Fathers Name & Address of the proprietor/partners/Directors : : : Delta School of Mathematics Engr. Bellal Hossain Shikder S/O. Late Shyad Ali Shikder House # 8, Road # 12 Dhanmondi, Dhaka. Engr. Faizul Hoque Shikder S/O. Late Shyad Ali Shikder 7D, House # 5/Kha Satmasjid Road, Mohammadpur Dhaka. (3) (4) Business address Name of the Banker : : House # 83/A, Road # 11/A Dhanmondi, Dhaka.

(5)

Position of loans/liabilities Name of loan Amount -

N/A Security -

Present outstanding -

I confirm that I have no other sister/allied concern and liabilities beyond those as declared herein.

Date : _____________________

(Engr. Faizul Hoque Shikder) Signature of the Sponsors/Director

Form-4

The Manager .................................. .................................. ..................................

Dear Sir, Account No. I/We have applied to the EEF Unit, Bangladesh Bank, Dhaka, for financial assistance. In this connection, I/we hereby authorize you to furnish to them any information they may request from you regarding the conduct of the account and loans/facilities that have been extended to me/us by your Bank.

(Engr. Bellal Hossain Shikder) Signature of Account Holder

Form-4

The Manager .................................. .................................. ..................................

Dear Sir, Account No. I/We have applied to the EEF Unit, Bangladesh Bank, Dhaka, for financial assistance. In this connection, I/we hereby authorize you to furnish to them any information they may request from you regarding the conduct of the account and loans/facilities that have been extended to me/us by your Bank.

(Engr. Faizul Hoque Shikder) Signature of Account Holder

PART II FEASIBILITY REPORT ON DELTA SYSTEMS LIMITED

CORPORATE OFFICE : 8, Panthapath, Level-14 Unique Trade Center (UTC) Tejgaon, Dhaka.

APRIL, 2003

FEASIBILITY REPORT ON DELTA SYSTEMS LIMITED

TABLE OF CONTENTS
PROJECT SUMMERY 01. 02. 03. 04. 05. 06. INTRODUCTION ORGANIZATION & MANAGEMENT TECHNICAL ASPECTS MARKETING ASPECTS SOCIO- ECONOMIC ASPECTS FINANCIAL ASPECTS

PART-II
iii 1 3 6 12 15 17

ANNEXURE :

I. II. Iii. IV. V. VI. VII. IX. X. XI. XII.

Cost of the Project Cost of machinery & equipment Cost of furniture, fixture & office equipment Preliminary expenses Working capital Earning forecast Sales forecast Administrative & selling expenses Break- even analysis Cashflow statement Projected balance sheet

19 21 22 23 24 25 26 27 30 32 33 34 35 36 37 38

VIII. Cost of goods sold

XIII. Internal rate of return (IRR) XIV. XV. XVI. Debt- service coverage ratio (DSCR) Pay- back period Margin of Safety

PROJECT SUMMARY

01.

Name of the Project

Delta Systems Limited

02.

Location of the Project

The proposed project will be located at 153/1, Green Road, Dhaka-1205. The project site is very much suitable from different perspectives and and enjoys all infrastructure very good

communication facilities. 03. Address : Corporate Office : 8, Panthapath, Level-14 Unique Trade Center (UTC) Tejgaon, Dhaka.

Project : 153/1 Green Road Dhaka-1205. 04. Project brief : The project envisages setting up of a software industry for the development and marketing of computer software and ICT enabled services, which are of high demand both at home and abroad. The implementation of the project will increase national earnings, make significant contribution to GDP and create employment opportunity considerably.

05.

Corporate setup / status :

Private Limited Company.

06.

Name & Address of the sponsors :

Name Engr. Bellal Hossain Shikder Engr. Faizul Hoque Shikder

Address House # 8, Road # 12 Dhanmondi, Dhaka 7D, House # 5/Kha, Satmasjid Road, Mohammadpur, Dhaka

Status Managing Director Director

07.

Cost of the project & Means of finance :

(Tk. in 000) Financing B. B. equity Sponsors equity Total capital outlay: Cost incurred 5620 5620 To be incurred 17961 13074 31035 Total 17961 18694 36655

08.

Financial Performance

:
(Tk. in 000) Year-1 Year-2
Year-3

Year-4

Year-5

Sales revenue Gross profit Operating profit Net profit

16500 8408 3015 2182

18150 7301 1830 1325

19800 7625 2075 1502

21450 8218 2585 1871

23100 8842 3124 2262

09.

RATIO ANALYSIS : Projects Ratios

Year-1 51 18 13 2.95 1.83 Year-2 40 10 07 2.57 1.81 Year-3 39 10 08 2.65 1.77 Year-4 38 12 09 2.81 1.72 Year-5 38 14 10 2.99 1.64

Factors Gross profit to sales (%) Operating profit to sales (%) Net Profit to sales (%) Debt-service Coverage Ratio (times) Fixed Assets Coverage Ratio (times) 10. 11. BREAK-EVEN POINT INTERNAL RATE OF RETURN (IRR) 12. 13. PAY-BACK PERIOD MARGIN OF SAFETY : : : :

60 % of assumed capacity.

% 5 years and 3 months. 40 %

14.

Market Outlook :

The computer software and other IT enabled services have got a vast market worldwide. This is getting an increasing trend with the change in livelihood and faster job requirements. But there prevails a huge demand-supply gap (supply-deficiency) in this sector. So the software projects have a lot to exploit this opportunity. 15. Conclusion : From feasibility report of the project it appears that the project is technically feasible, commercially viable, financially profitable and acceptable from the marketing point of view. And as such it is found to be worthwhile and desirable for investment.

FEASIBILITY REPORT ON DELTA SYSTEMS LIMITED

1.0 INTRODUCTION

1.1

Background : Bangladesh is a developing country which is facing numerous problems. Among them, unemployment and poverty are the two major ones. To solve these problems, we have to look for ways and means and also to think of our strengths, weaknesses, opportunities and threats. If our strengths are first considered, it is evident that our human resources, among all others, can be mentioned first. Again, if we talk about the ICT Sector, we will be certainly boasted of our brilliant professionals. But these ICT Professionals and their capabilities are yet to be focused in the international arena. If we can properly illuminate them before the world, it could be a great source of foreign currency for the country. To earn foreign currency, we must display the products before the world, which our brilliant ICT Professionals can produce and which will have worldwide demandofcourse, this is the Software and ICT enabled services.

Bangladesh is enriched with so many ICT Professionals who possess the highest level of brilliance and excellent ideas and innovations. These professionals are certainly the wealth of the nation who have the ability to produce different software of international standard to suit the customers need and thus can contribute to the economic development of the country to a great extent.

1.2

The Project : The proposed project is an attempt to make use of some of these ICT Professionals in producing Software for both local and foreign markets. The project is also aimed at contributing to the economic development of the country.

2.0 ORGANIZATION & MANAGEMENT

2.1

Name & Location of the Project : The proposed project will be established under the name and style of Delta Systems Limited to be located at 153/1, Green Road, Dhaka-1215 having its corporate office at 8, Panthapath, Level-14, Unique Trade Center (UTC), Tejgaon, Dhaka. The location of the project is an excellent one from different perspectives with all infrastructure and communication facilities being available.

2.2

Nature of the Project : The project, by nature, will be a software developing firm. However, it will also go on with ICT enabled products/services. The software and services to be developed will be sold in foreign as well as local markets.

2.3

Organizational Setup : The project is a Private Limited Company formed by the sponsors having incorporation from the Registrar of Joint Stock Companies & Firms, Government of Bangladesh.

2.4

Particulars of the Sponsors : The project will be promoted by the following sponsors :
Name & Address Engr. Bellal Hossain Shiker House # 8, Road # 12 Dhanmondi, Dhaka-1205 Engr. Faizul Hoque Shikder 7D, House # 5/Kha Satmasjid Road, Mohammadpur, Dhaka. Status Managing Director

Director

2.5

Background & experience of the promoters : A brief description of education, technical knowhow & skills,

experience, etc. of all the promoters of the project are given hereunder:

Engr. Bellal Hossain Shikder : The Managing Director of the Company Engr. Bellal Hossain Shikder, aged 39, is a B. Sc. in Civil Engineering. He is a well experienced in Information Technology (both hardware & software). He has been running business in this sector for more than one year and has already achieved remarkable success. His success in the relevant sector made him confident enough to take up a venture in larger shape. Engr. Bellal Hossain is a social worker and he is engaged in various socio-cultural activities.

Engr. Faizul Hoque Shikder : Engr. Faizul Hoque Shikder, aged 27 is a B. Sc. in Agricultural Engineering and a Director of the Company. He is an experienced businessman in IT sector, who has been doing this business for more than one year. Engr. Faizul Hoque is a young, dynamic person who is devoted to business in IT sectors. He is very much enthusiastic and confident about success in IT related businesses. Engr. Faizul Hoque is a good organizer and social worker. He is a popular person in his community and spends time to do social well being.

2.6

Management : The overall management and supervision of the project will be vested with the Board of Directors. The Board of Directors will formulate policies and will provide necessary guidelines for the day to day operation of the project. The managing Directors will be responsible to the Board of Directors. He will look after the overall business affairs and administration of the project and will provide all required logistic supports. The Managing Director will be assisted by other directors of the company. project. Besides, locally recruited managerial and technical personnel will assist hi to run the management and operation of the

3.0 TECHNICAL ASPECTS

3.1

Project Purpose and Design : The project envisages for setting up of a Software Development Industry producing and marketing computer software and ICT related products/services. The project will be equipped with machinery and equipments to be procured from reputed suppliers/manufacturers. While designing the project, the requirement of physical facilities has been considered in such a manner so that the project can operate at its optimum capacity. The sales revenue of the project will include mainly the sales of computer software. Besides, the project has the plan to make earning by way of : Software development training. Software outsourcing. Providing ICT services.

The fixed cost of the project has been estimated at Tk 332.55 lacs, while the total cost thereof at Tk 366.55 lacs.

3.2

Product mix & Production Plan : The production plan of the project is as under :
Products/Services Capacity utilization Software : a. Clinic management b. Banking c. Accounting Web Solution : a. Domain registration b. Web page development & designing 200 2000 220 2200 240 2400 260 2600 280 2800 25 5 50 28 6 55 30 6 60 33 7 65 35 7 70 Yr-1 50% Yr-2 55% Yr-3 60% Yr-4 65% Yr-5 70%

3.3

Technology & Process : The steps involved in developing software including different phases. Every phase demands its own point of view and technology-based insight into the matter. The execution begins with the study of the requirement, which is also called the system study. After the initial thoughts have been gathered, they are put on paper and a final logical checkup is performed. Once the logical system is developed, the system is designed and created by programming language. Comprehensive testing is done at the end of each subsection of the procedure. Once the system is built, proper documentation support and help file is provided with the system.

The following diagram shows the technical development steps of software products :

Initiation

Use

Requirement Specification

Acceptance Tested System

V&V

V&V

System Design

Integration & System Tested System

V&V

V&V

Code

Figure : Typical Development of Software

Since a software product has large number users, it must be properly designed, carefully implemented and thoroughly tested. Also, a software product consists not only of the program code but also of all the associated documents such as requirement specification document, design document, test document and user manuals, etc. Further, software products are often too large to be developed by any individual programmer. Therefore, software products are usually developed by a Software Development Team. The team consists of different types of personnel with different responsibilities like Analyst, Designer, Programmer, ester and the Project Manager. The team is led by a Tem Leader and he/she must be an active member of the team. Typically the size of the team depends on the versatility of the software and the deadline to be met by the team. The team members must include a representative from the customer side or a domain expert to guide the team in every phase of development. 3.4 Machinery & Equipments : A list of the machinery and equipment required for he project has been provided in Annexure-II, the total value of which stands at Tk 50.00 lacs. 3.5 Store & Spares : The annual requirement of store and spares has been estimated @ 0.5%, 1.0%, 1.5%, 2.0% and 2.5% of the cost of machinery & equipment for 1st, 2nd, 3rd, 4th and 5th year of operation respectively.

3.6

Repairs & Maintenance : The annual cost of repairs and maintenance has been estimated @ 0.5%, 1%, 1.5%, 2% & 2.5% from 1st to 5th year of operation, respectively, on the value of buildings, machinery and transport/ vehicles.

3.7

Materials & Supplies : The annual requirement of materials & supplies has been roughly estimated at a lump sum of Tk 4.50 lacs per annum to be incurred 100% capacity level. The above cost includes some materials and office supplies such as paper, pens, pencils, erasers, rubber stamps, staples, stapler pins, envelopes, scotch-tapes, toners, cartridges, printer ribbons, floppy diskettes, CD ROMs, etc.

3.8

Transport : Provision has been kept for a sum of Tk 10.00 lacs of purchase a microbus (9-seater) to facilitate transportation of the projects personnel.

3.9

Furniture & Fixture : A sum of Tk 35.00 lacs has been estimated to be incurred to purchase required furniture & fixture (setup cost), as shown in Annesure-III

3.10 Erection & Installation : The cost of erection & installation of the projects machinery has been roughly estimated to be Tk. 10.00 lacs.

3.11 Utilities : Water : There will be free supply of water at the project premises. Power : A sum of Tk 3.00 lacs has been estimated to be incurred annually for the electricity to be consume at 100% capacity utilization. Fuel & Lubricants : For this purpose, a roughly estimated amount of Tk 1.20 lacs has been considered to be incurred. 3.12 Insurance Coverage : The main assets of the project will have insurance coverage @ 1% of the total cost thereof. 3.13 Manpower Requirements : On implementation, the project will require the services of 41 hired people and for them, a total of Tk 6.33 lacs has been estimated to be incurred per month as shown in Annexure-VIII. 3.14 Preliminary Expenses : A sum of Tk 152.40 lacs will need to be incurred to meet up the primary and startup expenses as shown in Annexure-IV. 3.15 Environment & Pollution Control : The project will have no polluting no polluting effect on the environment. Being environment friendly in nature, it will not require incurring any cost to have pollution control.

4.0 MARKETING ASPECTS

4.1 Product-mix: The project has been designed to produce/develop mainly the computer software. However, it will also produce and/or provide some IT related products and services. A list of the product-mix of the project is given below :
Software : a. b. c. Clinic management Banking Accounting

Web Solution : a. Domain registration b. Web page development & designing. 4.2 Demand Analysis :

As stated earlier, the project is envisaged mainly to develop computer software and market the same both at home and abroad. Nowadays the computer software is becoming popular all over the world and the demand for software is rapidly increasing day by day. The people of the western countries are accustomed with Net Shopping. Software is also well known to and used by the non-resident Bangladeshi buyers living in the western countries. The software to be developed can be brought before these target people through Net. In Bangladesh too, different target groups, especially the

Government Departments, Banks, Hospitals, Clinics, Departmental Stores and other business organizations have been showing interests and desires for relevant software. So the demand for software is quite apparent which is showing a rapid growth as a whole.

4.3

Pricing : The prices of the product-mix of the project are primarily determined as follows :

Sl.

Product-Mix

Price (Tk)

01.

Software : a. Clinic management b. Banking c. Accounting 1,00,000 5,00,000 70,000

02.

Web solution : a. Domain registration b. Web page development & designing 20,000 2,000

The prices of the products are changeable depending on the market situation. The sponsors will put much emphasis on the competitive market prices and take all possible measures to gain maximum market share.

4.4

Sales Promotion :

To market the products/services of the project, the following promotional activities will take place : Introducing the products/services and their utilities through seminar . Aggressive marketing through talented trained and motivated marketing professionals. Spread the word of ICT and its impact through expert and renowned personalities of our country and abroad. Advertisement through IT magazines, magazines, and daily newspapers. Corporate selling/direct marketing. Word of mouth/personal selling.

4.5

Distribution Channel :

Distribution through web technology. Direct implementation. Distribution through software incubator BASIS/BCS. Liaison office abroad.

5.0 SOCIO-ECONOMIC ASPECT

5.1

Employment Generation : Upon implementation, the project will generate employment for 41 people of different categories. Thus, on the one hand, the project will play a significant role to lessen the unemployment problem of the country and improve the living standard of the employed people. On the other hand, additional employment opportunity will be created for production, supply and distribution of materials and supplies.

5.2

Contribution to GDP : The project will contribute a sum of Tk 178.79 lacs of the Gross Domestic Product (GDP) of the country as shown below :
(Tk in 000)

A. B.

Net Sale revenue (4th year) Inter-farm transactions : Materials & Supplies Travelling & conveyance Repairs & maintenance Stores & spares Utilities Printing & stationery Postage, telephone Legal & audit fee Ad & sales promotion Contribution to GDP (AB) : : : : : : : : : 293 75 1200 1000 273 390 75 65 200

21450

C.

: :

3571 17879

5.3

Foreign Exchange Earning :

The project, if implemented, will earn foreign exchange for the country by way of developing software and exporting the same to foreign countries, especially the USA and European countries. Thus the project will contribute to the economic development of the country.

5.4

Linkage Effects :

A considerable development of software & ICT services in the country will certainly encourage some other groups to produce and supply materials required to provide support services in this sector.

6.0 FINANCIAL ASPECTS

6.1

Assumptions for Financial Analysis : The following assumptions have been made to conduct relevant financial analyses :
1) The economic life of the project has been considered to be 10 years without major replacement.

2)

The software producing/developing unit will work throughout the year.

3)

The cost of inputs/materials as well as sales have been assumed to remain constant throughout the project years on the assumption that the increase in prices of inputs/materials will be offset by the proportionate increase in the selling price of output.

4)

There will be 5% increase in salary and wages per year and one months salary will be given as bonus every year.

5)

Deprecations are charged at the rate of 10% on machinery & equipments and 20% on vehicles & other assets on straight-line method.

6.2

Cost of the Project : The total cost of the project has been estimated at Tk 366.55 lacs which includes the projects fixed cost of Tk 332.55 lacs and total working capital of Tk 34.00 lacs. Out of the projects fixed cost, an amount of Tk 56.20 lacs has already been incurred by the sponsors. The detailed description of the project cost has been shown in AnnuxureI.

6.3

Means of finance :
(Tk. in 000) Financing B. B. equity Sponsors equity Total capital outlay: Cost incurred 5620 5620 To be incurred 17961 13074 31035 Total 17961 18694 36655

6.4

Financial Performance :
(Tk. in 000) Year-1 Year-2
Year-3

Year-4

Year-5

Sales revenue Gross profit Operating profit Net profit

16500 8408 3015 2182

18150 7301 1830 1325

19800 7625 2075 1502

21450 8218 2585 1871

23100 8842 3124 2262

Annexure-I

COST OF THE PROJECT & MEANS OF FINANCE

(Tk. in "000") A. COST OF THE PROJECT Cost already incurred 18000 Cost to be

Sl.

Items

Total

01.

Rent advance for 5 years (50%) : a) Corporate office (2844 sft) b) Software laboratory (4500 sft) Machinery & equipments Freight & other charges (L.S) Erection & installation (L.S) Furniture & fixture Transport/vehicles Security deposits (Telephone) Preliminary expenses (primary + startup expenses) Contingencies (5% on the costs to be incurred) Fixed Cost of the Project: Total Working Capital : Total Cost of the Project :

3839

5639

02. 03. 04. 05. 06. 07. 08. 09.

1500 200 400 1500 20 200 -

3500 300 600 2000 1000 40 15040 1316

5000 500 1000 3500 1000 60 15240 1316

5620 5620

27635 3400 31035

33255 3400 36655

B. MEANS OF FINANCE / PLAN OF INVESTMENT (PROPOSED) Sponsors Equity 5639

Sl. 01.

Cost items Rent advance for 5 years (50%) : c) Corporate office (2844 sft) d) Software laboratory (4500 sft) Machinery & equipments Freight & other charges (L.S) Erection & installation (L.S) Furniture & fixture Transport/vehicles Security deposits (Telephone) Preliminary expenses (primary + startup expenses) Contingencies (5% on the costs to be incurred) Working Capital

EEF Equity -

Total 5639

02. 03. 04. 05. 06. 07. 08.

5000 458 490 1715 490 29 7468

42 510 1785 510 31 7772

5000 500 1000 3500 1000 60 15240

09.

645

671

1316

10.

1666

1734

3400

Total

17961

18694

36655

Ratio of investment :

49%

51%

100%

Annexure-II

MACHINERY & EQUIPMENTS

Sl. 01. 02. 03. 04. 05. 06.

Description of items Server Corporate office PC Workstation PC UPS IPS Generator

Qty 03 12 50 50 1 1

Rate (Tk.) 3,75,000 62,500 46,500 4,000 80,000 2,66,000 1,35,000

Total (Tk.) 11,25,000 7,50,000 23,25,000 2,00,000 80,000 2,66,000

07.

Printer

25,000 10,000

1,70,000

08. 09.

Scanner Web camera Total :

3 3 -

10,000 18,000 -

30,000 54,000 50,00,000

Annexure-III

FURNITURE, FIXTURE & OFFICE EQUIPMENT

Sl. 01.

Description of items Corporate office : a) Table (Computer) b) Computer Chair c) Table rack d) Executive table e) Executive chair f) Managing director table g) Managing director chair h) Director table i) Director chair j) Thai partition with glass k) Reception desk with sofa l) Conference table with 20 chairs

Qty

Rate (Tk.)

Total (Tk.)

12 12 12 10 10 1 1 1 1 Lot

8,000 6,000 3,000 15,000 10,000 50,000 20,000 30,000 15,000 L.S. L.S. L. S.

96,000 72,000 36,000 1,50,000 1,00,000 50,000 20,000 30,000 15,000 12,00,000 2,00,000 3,36,000

02.

Laboratory : a) Computer tables and chair b) Reception with sofa c) A. C d) Telephone (mobile) e) Fax f) Photo copier Total : 53 1 set 10 10 2 2 5,000 50,000 50,000 12,000 30,000 1,00,000 2,65,000 50,000 5,00,000 1,20,000 60,000 2,00,000 35,00,000

Annexure-IV

PRELIMINARY EXPENSES
(TK in ooo) Sl. 01. Particulars a) Primary Expenses : Company incorporation, trade license, consultancy, project appraisal /evaluation, documentation, etc. b) Licensing : t Development Network (MSDN) Development Suite Microsof : 150 Oracle : 800 Window : 400 1350 300 Total

s 200 Operation System (Server & Professional) c) VSAT/Bandwidth/Radio Link 02.

400 20

d) Membership with BASIS (Bangladesh Association of Software Information Service) 9845 Pre-operating & Startup Expenses : a) Salary for 12 months (Ref: Annexure-VIII & IX) b) Materials & Supplies for 12 months (Ref: Annexure-VIII) 2400 225

03. 04.

c) Bandwidth charges for 12 months (128 kbps @ Tk 2,00,000/month) Launching cost (L.S.) Others (L.S.) Total :

500 200

15240

Annexure-V

WORKING CAPITAL

(Tk. in "000")

Items

Tied-up period

Amount

Materials & Supplies

30 days

19

Stores & Spares

180 days

125

Work in Process (WIP)

60 days

1765

Receivables

60 days

1349

Other expenses (L. S.)

30 days

142

Total Working Capital Required :

3400

Annexure-VI

EARNING FORECAST

(Tk. in "000") Items Sales Revenue Cost of Goods Sold Gross Profit Admin & Selling Expenses Operating Profit Financial Expenses Net Profit before Tax Income Tax Net Profit after Tax Bond Purchase (30%) Net Profit after Bond Purchase Return on Bond (8%) Net Profit after Return on Bond Ratios : Gross Profit to Sales (%) Operating Profit to Sales (%) Net Profit to Sales (%) 51 18 13 40 10 07 39 10 08 38 12 09 38 14 10 Yr-1 16500 8092 8408 5393 3015 3015 3015 905 2110 72 2182 Yr-2 18150 10849 7301 5471 1830 1830 1830 549 1281 44 1325 Yr-3 19800 12175 7625 5551 2074 2074 2074 622 1452 50 1502 Yr-4 21450 13232 8218 5633 2585 2585 2585 776 1809 62 1871 Yr-5 23100 14258 8842 5718 3124 3124 3124 937 2187 75 2262

Annexure-VII

SALES FORECAST (Tk in 000)

Items Sales at 100% capacity Assumed capacity Sales at assumed capacity Yr-1 33000 50% 16500 Yr-2 33000 55% 18150 Yr-3 33000 60% 19800 Yr-4 33000 65% 21450 Yr-5 33000 70% 23100

Assumption : 1) From 1st to 5th year of operation of the project, the capacities to be utilized have been assumed to be 50%, 55%, 60%. 65% & 70% respectively. 2) Products/Services & Sales : At 100% capacity, the sales achievement has been estimated as follows :
Items Softwares : a. Clinic management b. Banking c. Accounting Web solution : a. Domain registration b. Web page development & designing Total : 400 4000 20,000 2,000 80,00,000 80,00,000 50 10 100 1,00,000 5,00,000 70,000 50,00,000 50,00,000 70,00,000 Qty (nos) Rate(Tk) Total (Tk)

3,30,00,000

Annexure-VIII

COST OF GOODS SOLD

(Tk. in "000") Particulars Materials & Supplies Salary & Wages Stores & Spares Water, Power, Fuel Repairs & Maintenance Rent, Tax, Insurance Depreciation Other expenses (L.S.) Total Cost of Production Add: Opening WIP (60 days) Total stock of WIP Less: Closing WIP (60 days) Cost of goods manufactured Add: Opening FG (30 days) Cost goods available for sales Less: Closing FG (30 days) Cost of Goods Sold
Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

220 7280 250 210 300 333 1814 180 10592 10592 1765 8827 8827 735 8092

248 7644 500 231 600 333 1814 185 11555 1765 13320 2220 11100 735 11835 986 10849

270 8026 750 252 900 333 1814 190 12535 2220 14755 2459 12296 986 13282 1107 12175

293 8427 1000 273 1200 333 1814 195 13535 2459 15994 2666 13328 1107 14435 1203 13232

315 8849 1250 294 1500 333 1814 200 14555 2666 17221 2870 14351 1203 15554 1296 14258

ASSUMPTIONS :

1)

A period of 60 days has been considered to determine the work in process (WIP) based on the assumption that the development of softwares would require 3090 days depending on their sizes/types, thus 60 days on an average.

2)

To determine the inventory of finished goods (FG), an average period of 30 days has been considered on the assumption that any softwares, regardless of their size or types, would require a minimum of 30 days to market the same.

3)

Capacity Utilization : From 1st to 5th year of operation, the capacities to be utilized have been assumed to be 50%, 55%, 60%, 65% & 70% respectively.

4)

Cost of Materials and Supplies : At 100 percent efficiency, a sum of Tk 4,50,000 has been roughly estimated to be incurred annually in this head of expenditure. Thus the annual cost of materials and supplies, at the assumed capacities, would be Tk 2,25,000; Tk 2,47,500; Tk 2,70,000; Tk 2,92,500 and Tk 3,15,000.

5)

Stores and Spares : The cost of stores and spares has been considered to be 0.5%, 1%, 1.5%, 2% & 2.5% on the value of machinery and equipments.

6)

Repairs and Maintenance : The costs for repairs and maintenance have been considered to be 0.5%, 1%, 1.5%, 2% & 2.5% on the value of transport/vehicles and machinery & equipments.

7)

Rent, Tax, Insurance : The cost involvement in this head of expenditure has been considered to be 1% of the fixed cost of the project.

8)

Depreciation :
Cost 5000 3500 1000 2070 Rate 10% 20% 20% 20% Amount 500 700 200 414 1814

Items Machinery & Equipments Furniture & Fixture Transport/Vehicles Intangible assets Total :

9) a. b.

Water, Power & Fuel : Water : There will be free supply of water in the office/project premises as the cost will be borne by the landlord. Power : A lump sum of Tk 3,00,000 has been roughly estimated to be incurred annual for the electricity to be consumed at 100% capacity utilization.

c.

Fuel : For this purpose, a roughly estimated amount of Tk 1,20,000 has been considered to be incurred.

Total (a+b+c) : Tk 4,20,000 per annum at 100% capacity. Therefore at the assumed capacities, the annual costs would be Tk 2,10,000; Tk 2,31,000; Tk 2,52,000; Tk 2,73,000 and Tk 2,94,000 from 1st to 5th year of operation respectively. 10) Salary (Technical Personnel) :
Category/Designation Software Development : Project Manager Senior System Analyst System Administrator (network) System Analyst Business Analyst Senior Programmer Programmer Sub-Total : Web Solution : Web administrator We Page Designer Sub-Total : Total : No. Monthly Salary (Tk) 40,000 30,000 1,00,000 30,000 60,000 2,25,000 25,000 5,10,000 20,000 30,000 50,000 5,60,000 Yr-2 6720 336 588 7644 Yr-3 7056 353 617 8026 Yr-4 7409 370 684 8427 Annual Salary (Tk in 000) 480 360 1200 360 720 2700 300 6120 240 360 600 6720
(Tk in 000)

01 01 05 01 03 15 01 27 01 02 03 30 Yr-1

Yr-5 7779 389 681 8849

Salary Increment (5%) Bonus (one months salary) Total :

6720 560 7280

Annexure-IX

ADMINISTRATIVE & SELLING EXPENSES

(Tk. in 000)

Sl.
01. 02. 03. 04. 05. 06. 07. 08. 09.

Particulars Directors remuneration Administrative salary Depreciation & write-off Travelling & conveyance Printing & stationery Postage, telegram & telephone Legal & audit fee Ad & sales promotion (LS) Miscellaneous expenses Total :

Yr-1
960 949 2634 60 360 60 50 200 120 5393

Yr-2
960 997 2634 65 370 65 55 200 125 5471

Yr-3
960 1047 2634 70 380 70 60 200 130 5551

Yr-4
960 1099 2634 75 390 75 65 200 135 5633

Yr-5
960 1154 2634 80 400 80 70 200 140 5718

Assumptions : 01. Directors Remuneration : An amount of Tk 80,000 per month has been considered to be the Directors remuneration of 2 Directors. Thus, the annual remuneration of Directors stands at Tk 12,00,000 annually. 02. Administrative Salary :
Category/Designation Administrative : Office Manager Accountant Receptionist Attendant/Cleaner/Security Driver Sub-Total : Marketing : Marketing Manager Marketing Executive Sub-Total : Total : No. Monthly Salary (Tk) 10,000 8,000 4,000 12,000 4,000 38,000 15,000 20,000 38,000 73,000 Annual Salary
(Tk 000)

01 01 01 04 01 04 01 02 08 11

120 96 48 144 48 456 180 240 456 876

(Tk in 000)

Yr-1 Salary Increment (5%) Bonus (1 months salary) Total : 876 73 949

Yr-2 876 44 77 997

Yr-3 920 46 81 1047

Yr-4 966 49 85 1099

Yr-5 1014 51 89 1154

04.

Depreciation and write-off :

(Tk. in 000)

Items

Cost

Rate

Deprecation

Preliminary expenses Total :

13170 -

20% -

2634 2634

Annexure-X

BREAK-EVEN ANALYSIS
(Tk. in 000)

1. 2.

Sales revenue (4th year) Total cost of operation, admin & selling and financial expenses:
Analysis of total cost Total cost Fixed cost

21450

Variable cost

Materials & Supplies Salary and wages (Laboratory) Repairs & maintenance Tax, insurance, etc. Water, power, fuel Stores & spares Administrative salary Postage, telegram, tel. Printing & stationery Conveyance & travelling Depreciation & write-off Miscellaneous expenses Legal & audit fee Ad & sales promotion Financial expense Total : 3. Break-even point (BEP) : PV Ratio BEP (Sales)

293 8427 1200 333 273 1000 2059 75 390 75 4448 330 65 200 19168

333 1070 25 78 4448 66 65 5015

293 8427 1200 273 1000 989 50 312 75 264 200 13083

= (Sales Variable cost) / Sales = (21450 13083)/21450 = 0.39 = Fixed cost / PV Ratio = 5015 / 0.39 = Tk 12859 thousand i.e. 60% of assumed capacity.

Annexure-XI

CASHFLOW STATEMENT

(Tk. in 000)

A. Source of fund : Sponsors equity Depr. & write-off Operating Profit B.B. equity Return on bond Total : B. Utilization of Fund : Capital expenditure (fixed assets) Increase in current assets Buy-back of B.B. equity Investment on bond Total : Cash surplus (AB) Opening cash balance Closing cash balance

Const. Yr 16960 16295 33255

Yr-1 1734 4448 3015 1666 72 10935

Yr-2 4448 1830 44 6322

Yr-3 4448 2074 50 6572

Yr-4 4448 2585 62 7095

Yr-5 4448 3124 75 7647

33255 33255 -

3400 2245 905 6550 4385 4385

2245 549 2794 3528 4385 7913

2245 622 2867 3705 7913 11618

2245 776 3021 4074 11618 15692

2245 937 3182 4465 15692 20157

Annexure-XII

PROJECTED BALANCE SHEET

(Tk. in 000)

Items Properties & Assets: Current Assets : Cash Balance Investment On Bond Other current assets Sub total : Fixed assets : Total Fixed Assets Sub-total : Total assets : LIABILITIES AND SPONSORS EQUITY : Liabilities : B.B. equity/share Working capital loan Other current liabs Total liabilities : Sponsors equity : Piad-up capital Investment on bond Retained earnings Total equity : Total liabs & equity :

Const. Yr

Yr-1

Yr-2

Yr-3

Yr-4

Yr-5

33255 33255 33255

4385 905 3400 8690 28807 28807 37497

7913 1454 3400 12767 23459 23459 37126

11618 2076 3400 17094 19911 19911 37005

15692 2852 3400 21944 15463 15463 37407

20157 3789 3400 27346 11015 11015 38361

126295 16295 16960 16960 33255

15716 15716 18694 905 2182 21781 37497

13471 13471 18694 1454 3507 23655 37126

11226 11226 18694 2076 5009 25779 37005

8981 8981 18694 2852 6880 28426 37407

6736 6736 18694 3789 9142 31625 38361

Annexure-XIII

INTERNAL RATE OF RETURN

(Tk. in 000)

Year 0 1 2 3 4 5-10 11

Net Cash flow (33255) 7463 6278 6522 7033 7572 500 Total :

NPV disc. @ 15% (33255) 6493 4746 4291 4023 16378 108 2784

NPV disc. @ 20% (33255) 6217 4357 3776 3390 12153 68 (3294)

IRR

= = =

15 + (20-15) X 2784/(2784 + 3294) 15 + 5 X 0.4580 = 15 + 2.29 17.29, say 17%

Assumptions : 01. 02. The economic life of the project has been considered to be 10 years Benefit/Net Cash flow :
(Tk. in 000)

Year 1 2 3 4 5

Operating profit 3015 1830 2074 2585 3124

Depr. & write-off 4448 4448 4448 4448 4448

Total 7463 6278 6522 7033 7572

03.

Salvage Value :
(Tk. in 000)

Item Machinery Total :

Total value 5000 -

% of recovery 10% -

Recoverable 500 500

Annexure-XIV

DEBT-SERVICE COVERAGE RATIO

(Tk. in 000)

A.

Income Net profit after return on bond Depreciation & write-off Total :

Yr-1 2182 4448 6630

Yr-2 1325 4448 5773

Yr-3 1502 4448 5950

Yr-4 1871 4448 6319

Yr-5 2262 4448 6710

B.

Liabilities : Buy-back of B.B. equity 2245 2245 2245 2245 2245

Total :

2245

2245

2245

2245

2245

C.

Debt-service coverage ratio (times)

2.95

2.57

2.65

2.81

2.99

Annexure-XV

PAY-BACK PERIOD

(Tk. in 000)

1. 2.

Amount to be paid (excluding value of land)

33255

Amount available for recovery of the value of assets as follows :

Items

Yr-1

Yr-2

Yr-3

Yr-4

Yr-5

Net profit Depr. & write-off Total :

2182 4448 6630

1325 4448 5773

1502 4448 5950

1871 4448 6319

2262 4448 6710

3. Pay-back Period :

Year

Amount to be recovered 33255 26625 20852 14902 8583

Amount available for recovery 6630 5773 5950 6319 6710

Balance

1 2 3 4 5

26625 20852 14902 8583 1873

The pay-back period will be 5 years and 3 months.

Annexure-XVI

MARGIN OF SAFETY

(Tk. in 000)

Margin of Safety

(Sales Sales at Breakeven Point) Sales

(21450 - 12859) 21450

8591 21450
0.4005, say 40%

Annexure-XVIII

CONSTRUCTION & CIVIL WORKS

Sl. 01. 02. 03. 04. 05. 06. 07. 08. 09. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

Description Office building (50 X 30 ) - Pucca Godown (60 X 30 ) Semi-Pucca Hatchery shed (110 X 30 ) Breeding Tank (20 dia) Overhead Tank (15 X 12 X 8 - 6 ) Pump house (20 X 10 ) - Pucca Labour Shed (25 Pucca Staff Quarter (54 Pucca Cistern (12 X 8 ) Cistern (8 X 6 ) Spawning Tank (10 dia) Incubation Jar 2 - 3 dia (RCC) Incubation Jar 2 - 3 dia (MS sheet) Nursery pond (125 X 80 X 15 ) Fishery Pond (150 X 80 ) 15 depth Deep tube-well Boundary with barbed fencing Guard/Reception Room (10 X 8 ) Miscellaneous Total : X 30 ) SemiX 30 )- Semi-

Area/Qty 1500 sft 1800 sft 3300 sft 200 sft 750 sft 1620 sft 10 Nos. 08 Nos. 02 Nos. 06 Nos. 06 Nos. 04 Nos. 16 Nos. 01 No. 80 sft -

Rate (Tk) 985/sft 535/sft 375/sft L.S. L.S. 985/sft 350/sft 535/sft 20,000 each 15,000 each 50,000/tank 10,000 each 8,000 each 1.25/cft 2,00,000 9,50,000 L.S. 985/sft -

Amount (Tk) 14,77,500 9,63,000 12,37,500 2,25,000 5,50,000 1,97,000 2,62,500 8,66,700 2,00,000 1,20,000 1,00,000 60,000 48,000 7,50,000 32,00,000 9,50,000 8,00,000 78,800 2,55,000 1,23,41,000

PART III MEMORANDUM & ARTICLES OF ASSOCIATION OF DELTA SYSTEMS LIMITED

SALES ESTIMATE
(Tk. in "000") Items Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

Sales at rated capacity

Assumed capacity

Sales at assumed capacity

ASSUMPTIONS:

1.

At 100% capacity, the projects annual production at different stages will be as follows:
Production of fish spawn: a) Crap fish (200 pcs X 0.50 kg / fish / year) = 100 kg b) Sarputi (2,000 pcs X 0.050kg / fish / year) = 100 kg Production of fish fry: From fish spawn, 50% will be sold out directly to the fish farmers while 50% will be kept for fry production as follows: a) Crap fish (50 kg spawn X 1,00,000 pcs of fry per kg) = 50,00,000 pcs b) Sarputi (50 kg spawn X 1,00,000 pcs of fry per kg) = 50,00,000 pcs Production of fish: From fish fry, the production of fish will be made as follows: a) c) Crap fish (50,00,000 pcs less sale of 47,00,000 pcs) = 3,00,000 pcs of 0.750 kg body wt. each. Sarputi (50,00,000 pcs less sale of 40,00,000 pcs) = 10,00,000 pcs of 0.200 kg body wt. each.

The above production of fish will be made under the arrangement that there will be two production cycles in a year- each having 3000 pcs of Crap fish per pond (thus 3,00,000 pcs of fish in 50

ponds), with which a joint cultivation of 10,000 pcs of Sarputi per pond (thus 10,00,000 ocs in 50 ponds) will also be made.

2.

Estimate of sales: At 100% capacity, the sales of different products of the project have been summarized and estimated as follows: Production unit Hatchery Fish variety Crap Sarputi Sub-Total: Fishery Sub-Total: Total: Crap Sarputi Product-mix Fish spawn Fish fry Fish spawn Fish fry Fish Fish Quality 50 kg 47,00,000 pcs 50 kg 40,00,000 pcs 2,25,000 kg 2,00,000 kg Rate (Tk) 3500/kg 2.50/pc. 3500/kg 0.50/pc. 55/kg 60/kg Ammount

3.

From 1st to 5th year of operation, the production capacity to be achieved have been assumed to be 70%, 75%, 80%, 85% & 90% respectively.

Annexure-VIII

COST OF GOODS SOLD

(Tk. in "000") Particulars Raw Materials & Supplies Wages and Salaries Stores and Spares Water, Power, Fuel Repairs & Maintenance Rent, Tax, Insurance Depreciation Other expenses Cost of goods sold
Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

ASSUMPTIONS:
1. At 100% capacity, the annual production is 2,70,000 kg of fish (Carp & Sarputi) and 52,00,000 pcs of fish fry (Carp & Sarputi). 2. Cost of raw materials and supply: a) Fish feed: For fish = 2 kg feed/kg fish X 2,70,000 kg fish X Tk 17/kg feed = Tk 91,80,000 For fish fry = 3 kg feed / 1000 pcs fish fry X 52,00,000 pcs fish fry X Tk 15/ kg feed

Total = Tk 94,14,000 b) Medicine & Supply: For 50 Bigha (Total pond area) Total (a + b) = Tk 900 / bigha X 50 Bigha X 3 times / year = Tk 1,35,000 = Tk 95,49,000

Therefore, at 70%, 75%, 80%, 85% & 90% capacity utilization from 1st to 5th year of operation, the cost of raw materials & supplies would stand at Tk 66,84,300; Tk 71,61,750; Tk 76,39,200; Tk 81,16,650 and Tk 85,94,100 respectively.

4. Salaries & Wages:

Designation Hatchery Officer Hatchery Assistant Laboratory Assistant Feed Assistant Water Control Assistant Machine operator Unskilled worker Total:

No. 01 02 02 02 02 01 10 20

Monthly Salary (Tk) 10,000 8,000 8,000 8,000 6,000 3,000 20,000 63,000

Annual Salary
(Tk "000")

120 96 96 96 72 36 240 756

(Tk. "000")

Yr-1 Salary Increment (5%) Bonus (1 Month's Salary) Total: 63 819 756

Yr-2 756 38 66 860

Yr-3 794 40 70 904

Yr-4 834 42 73 949

Yr-5 876 44 77 997

5. Stores & Spares:

Cost considered @ 0.5%, 1%, 1.5%, 2% & 2.5% on value of Machinery form 1st to 5th year respectively. 6. Repairs & Maintenance: Cost for repair & maintenance of machinery and bldg. estimated at 0.5%, 1%, 1.5%, 2% & 2.5% in 1st, 2nd, 3rd, 4th & 5th year respectively as follows:

Items

Yr-1

Yr-2

Yr-3

Yr-4

Yr-5

Buildings Machinery Total:

7. Rent, Tax & Insurance:

It has been estimated at 1% of the total Fixed Cost of the Project (excluding the value of land).

8. Depreciation:
(Tk. in "000")

Items
Building Machinery Transport Total:

Cost

Rate
5% 10% 20%

Amount

9. Water, Power & Fuel:

(a) (b) Water: Supply will be met up by sinking a submersible pump and deep tube well. Power: Supply will be obtained from PDB/REB.

Cost: For water pump For lighting : 12 kw X 8hrs X365 days X Tk 4.10 : 10 kw X 8hrs X365 days X Tk 4.10 = Tk 1,43,644 = Tk 1,19,720

Total power cost = Tk 2, 63, 384 (d) Fuel/Lubricant: Tk 1,20,000/ Year (L.S.)

Total (a+b+c) = Tk 3,83,384 annually at 100% capacity utilization. Therefore, at 70%, 75%, 80%, 85% & 90% capacity utilization, the costs would take place as follows:

1st Year 2nd Year 3rd Year 4th Year 5th Year

Annexure-X BREAK-EVEN ANALYSIS

(Tk. in 000) 1. 2. Sales revenue (4th year) Total cost of operation, admin & selling and financial expenses Analysis of total cost Raw materials Salary and wages Repairs & maintenance Tax, insurance, etc. Water, power, fuel Stores & spares Administrative salary Postage, telegram, tel. Printing & stationery Conveyance & traveling Depreciation & write-off Miscellaneous expenses Legal & audit fee Ad & sales promotion Financial expense Total: Break-even point (BEP): PV Ratio 3. BEP (Sales) = = = = = Tk thousand i.e. % of assumed capacity. Fixed cost / PV Ratio (Sales Variable cost) / Sales Total cost Fixed cost Variable cost