PUNE METRO RAIL PROJECT

Construction Period I

OUTLAYSPreliminary and Preoperative Expenses total MAINTENANCE cost including taxes 1889construction cost 7984

Share Capital 3194from PD upfront 600Short Term Bank Borrowing 2383

project cost has 2 component namely capital cost and maintenance cost.construction cost include land, station building cost,depot etc.maintenance cost include maintenance of tracks,signalling,labour cost.

Financing

(rs cr)

Construction Period II Construction Period III

1801 18017984 7984

project cost has 2 component namely capital cost and maintenance cost.construction cost include land, station building cost,depot etc.maintenance cost include maintenance of tracks,signalling,labour cost.

Projected Revenues and interest1st Operational year

Sales Interest 256.17 Depreciation

ALL FIGURES IN Rs Cr2nd Operational year 3rd operational year 4th year 5th year 6th year 7th year

1.02 1.071 1.12455 1.18077231 205 179 154 128 103

ALL FIGURES IN Rs Cr8th 9th 10th

1.23981 1.3018 1.3668977 51 26

Projected P&L Statement of Pune Metro 2011-12 2012-131st Operating Year 2nd Operating Year

Sales variable cost 1889 1801Interest 256.17 231Depreciation 290.62 290.62PBT -2435.79 -2322.62add back depreciation and interest 546.79 521.62cash inflow -1889 -1801less amortized principle amount 238 238final casflow(all negative) -2127 -2039

NPV=-INITIAL CASH INVESTMENT +11YEARS CASH FLOW DISCOUNTED AT 12%

ASSUMTIONassumed the 1st 4 years will be construction period and then from the fifth year the proceeds from the sale of tickets will be enjoyedassumed interest rate as the bank rate which is prevailing currently(10.75)assumed depreciation at 10%AS our cash flow are all negative and as we cannot apply tax on negative cash flow so we don't calculate tax rate.as metro projects are long term projects whose gestation period is atleast 25 year so no tax.

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-213rd operating year 4th 5th 6th 7th 8th 9th 10t

1.02 1.071 1.12455 1.18077 1.23981 1.30181801 1513 1513 1513 1456 1324 1034 1034

205 179 154 128 103 77 51 26290.62 290.62 290.62 290.62 290.62 290.62 290.62 290.62

-2296.62 -1982.63 -1956.6 -1930.5 -1848.49 -1690.43 -1374.38 -1349.3495.62 469.62 444.62 418.62 393.62 367.62 341.62 316.62

-1801 -1513.01 -1511.98 -1511.8 -1454.87 -1322.81 -1032.76 -1032.68238 238 238 238 238 238 238 238

-2039 -1751.01 -1749.98 -1749.8 -1454.87 -1560.81 -1270.76 -1270.68NPV=-INITIAL CASH INVESTMENT +11YEARS CASH FLOW DISCOUNTED AT 12%

assumed the 1st 4 years will be construction period and then from the fifth year the proceeds from the sale of tickets will be enjoyedassumed interest rate as the bank rate which is prevailing currently(10.75)

AS our cash flow are all negative and as we cannot apply tax on negative cash flow so we don't calculate tax rate.as metro projects are long term projects whose gestation period is atleast 25 year so no tax.

2021-2211th

1.366891034

290.62-1323.25

290.62-1032.63

238-1270.63

NPV TABLE WITH 12% DISCOUNT RATEperiod discounted cash flow IRR

1 -1899.1 1 -1642.62 -1625.47 2 -1361.83 -1451.31 3 -1184.184 -1295.82 4 -8655 -993.56 5 -751.26 -737.14 6 -653.247 -657.7 7 -546.68 -513.23 8 -432.169 -458 9 -293.35

10 -408.9 10 -255.0911 -365.09 11 -221.82

-10405.32 -8207.04at 15%

NPV=(23952)+(10405.3) NPV=(23952)+(10405.3)-34357.3 -34357.3

now,irr=12%+(10405.3)/(10405.0.1432

PAYBACK PERIODas we are taking only 11 years of cash flowwe donot have any payback period….but inproject which has high gestation period its supposed to have a payback period of about 26 years.

3)+8207.04 (15%-12%)