United Advertisers2

8/2/2019 United Advertisers2

1/29


2/29

EXECUTIVE SUMMARY

UNITED ADVERTISERS will offer advertisement services to companies that are

looking to employ effective advertisement as the cornerstone of their marketing program of their productor services . In this modern era, advertisement is quickly becoming a cost-effective method to reach a

target audience. According to Jupiter Communication research, ad-response rates currently averages

between five to 15 percent with email advertisement alone all business companies and entrepreneurs

who need a vital support in publicity for their product or service

UNITED ADVERTISERS specializes in successful advertisement campaigns indifferent fields . The proposed business plan is of an advertisement agency which intends to help the

needed sprouting up business organizations and companies with well needed public awareness through a

large number of wide variety of ways which ensure the customer the required publicity for their product

or service which no other agency can assure. The intention of the company is to provide certain essentialservices at a very noble rate or even to the extent of free service in order to provide the necessary

publicity for the firm which has approached the enterprise

UNITED ADVERTISERS will design, build, test and deploy campaign. It will

also report the progress of the campaign in real-time to provide our customers maximum flexibility. At

the end of the campaign, we will analyze its success in order to improve the company's futurecampaigns.

MISSION


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OBJECTIVES

Customer Satisfaction

UNITED advertising agency is, in itself, a business entity and must aspire to maximize profits as itawaits new business. It needs funds for its daily operations, enabling it to serve its clients as it tries to

maintain a smooth cash flow. The objective of the agency must not only be to reap profits but to justify

its earnings through providing customer satisfaction.

Positive Image

The agency must portray a sense of professionalism reflected in how its staff handles clients and the

overall job. Its employees, from the lowest to the top management, should portray a professional image

of the company by, for example, communicating and acting courteously, and bringing results. This

objective is crucial for the agencys continuity which may suffer in the event custom ers give negative

assessments of its work to other potential clients.

Social Responsibility

Agencies must do business in a respectful manner that considers the sensitivities of every member ofsociety.. Some agencies may tend to disregard the objections of sections of the society that may find the

content of certain advertisements offensive and may withdraw them only after a court order. For

example, the broadcast of sexually explicit images which advertisers may use to advertise products is

illegal,l according to the Federal Communications Commission (FCC).

Continuous Improvement


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TYPES OF ADVERTISEMENT

1. INFORMATIVE ADVERTISING,

This type of advertisement seeks to tell the market about the product, explain how the product works,provide information on pricing, and build awareness of both the product and the company. Such

objectives are normally pursued at the launch of a new product, orre-launch / up-date of an existing

product

2. PERSUADE ADVERTISING :

Persuading type of advertisement encourage the target audience to switch brands, make the purchase,

and create a preference in the market for the product as opposed to its competition

3. COMPARISON ADVERTISING

This type of advertisement is done either directly or indirectly comparing its product to that of its

competitors

4. REMINDER ADVERTISING,

Remainder advertising is used to maintain interest and awareness of a well established product in themarket, often in the latter stages of its product life cycle. It is often used at the Point-of-Purchase toremind consumers of the Brand


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BUSINESS DESCRIPTION

The proposed business plan is of an advertisement agency which intends to help the

needed sprouting up business organizations and companies with well needed public awareness through a

large number of wide variety of ways which ensure the customer the required publicity for their product

or service which no other agency can assure. The intention of the company is to provide certain essentialservices at a very noble rate or even to the extent of free service in order to provide the necessary

publicity for the firm which has approached the enterprise

COMPANY SUMMARY

UNITED ADVERTISERS will design, build, test and deploy the campaign. It will also report the

progress of the campaign in real-time to provide our customers maximum flexibility. At the end of the

campaign, company will analyze its success in order to improve the company's future campaigns.

SERVICES

Services offered by UNITED ADVERTISERS covers in its entirety, from original concept

to post-campaign evaluation. The service includes the following The major emphasis of our company is

the the advanced stages of advertisements thought essential services either very cheap or even free

Our services include

1. Offers students photocopying for a minimum (profit free) rate and advertisement on the

Backside

2. A service to connect with relevant people and help them get their queries solved over a phonecall in real time


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10. Provides an online service for free education for students and preparation for competitive

exams and use it for advertisements

11. A mobile platform which enables the user to stay connected 24x7 and use the service forAdvertisements

12.A portal for individuals and cooperates to send customized physical greeting cards which can

indirectly add to advertisement requirements

13.A service that enables hotel reservation, ticket reservation, best price comparisons Includingthe availability of rooms, Food menu, Services etc

14. A service in collaboration with industries concerned with packing materials, bags etc in field

of advertisements

15. Offer its customers the best methods and tools in planning and implementing a successful email

campaign

MARKETING PLAN

The market intended is the business enterprises and entrepreneurs .As a it can be seen

the market is very vast in the new era. With growing business and industries, this market can beconsidered the largest growing market in the world. The online services and mobile services will be

made available to all such that all the required will be provided with the necessary marketing on

consultation. Viral marketing, word of mouth, catches up because of its nature, directly reaching out toadvertisers in the youth space, social media like face book or twitter

CRITICAL SUCCESS FACTORS


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FUNCTIONS OF UNITED ADVERTISERS

PLANNING :

It plans the advertising campaign after getting the feedback from the client . The agency must

have a fair knowledge of the company and its products.It should be aware of the market conditions,the

target market , distribution method,price level and their conditions

CREATION AND EXECUTION:

To create a copy , to decide the illustration, photographs , colour scheme, story if any these

should be chosen accordingly to the suitability of the media

COORDINATION:

Firstly, there should be coordination between the agency and the client . Then there shouldbe coordination with the internal and external departments. Internal coordination can be with finance ,

human relations, production and research departments. The external coordination is with the sales ,

distribution , retailers, media etc and these are coordinated

TYPES OF DEPARTMENTS1. ACCOUNTING SERVICE DEPARTMENT

It is a link between the agency and the client .The account officer looks after the

market promotion and understands the promotional programme and the amount of resourcesneeded to execute these programmes

2. MARKETING SERVICES :

Under this heading we have a lot of services and accordingly departments are formed

3. RESEARCH DEPARTMENT:It gathers , analyse,tabulate and interprets information . All this is done by primary


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6. MANAGEMENT AND FINANCELike all other organizations, Management and finance ia a part of the advertising

Agency. All functions of planning , organizing staffing , directing and control and the functionalareas of accounting , HR and finance are lokked after in a proper manner

7. AGENCY COMPENSATIONThis is a commission system which has been responsible for the discount provided

to the bulk costumers

FEATURES OF UNITED ADVERTISERS

1. Provide specialist service to companies which are interested in promoting their goods

2. We serve the needs of Advertisers by coordinating the advertiser with the availableopportunities

3. Agency team is competent , experienced and able to deliver goods which consists of marketresource copy writers , media experts , production managers and other members whoseattitude and thinking synchronizes to provide the desired result

4. Availability of skilled personal with good track record

5. .Best quality services at a very optimal price ensuring the customer satisfaction

6. The impressive creative services of the agency with its impact on style, clarity,memorablevalues in the advertisement produced by the company

7 Problem solving ideology enhanced performance ensuring active participation of client and


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FINANCIAL

ANALYSISThe following data , tables and charts represent the financial analysis of the proposed business plan

done with the help of Business Plan Pro version 11.14.0002


10/29

UNITED ADVERTISERS

Table: Start-up

Start-upRequirements

Start-up ExpensesLegal Rs40,000Stationery etc. Rs50,000Insurance Rs100,000Rent Rs50,000C R 75 000


11/29

UNITED ADVERTISERS

Table: Market Analysis

Market Analysis2012 2013 2014 2015 2016

Potential Customers Growth CAGRLOW COST 25% 500 625 781 976 1,220 24.98%MEDIUM COST 45% 250 363 526 763 1,106 45.03%HIGH COST 65% 105 173 285 470 776 64.88%Total 38.01% 855 1,161 1,592 2,209 3,102 38.01%


12/29

UNITED ADVERTISERS

Sales ForecastFY 2013 FY 2014 FY 2015

Salesphotocopying Rs952,943 Rs1,200,000 Rs2,200,000QUERIES CONNECTION Rs1,102,183 Rs1,550,000 Rs2,800,000advertising on vehicles and posters Rs1,042,323 Rs1,600,000 Rs3,000,000sms services Rs1,112,487 Rs1,850,000 Rs3,352,000online web based advertisement Rs1,169,197 Rs1,925,000 Rs3,600,000Online market place Rs1,140,786 Rs1,940,000 Rs3,546,000news papers, channels Rs1,117,047 Rs1,840,000 Rs3,450,000online service for free education Rs1,060,032 Rs1,640,000 Rs3,043,000EMAIL CAMPAIGN Rs1,058,380 Rs1,600,000 Rs3,000,000Total Sales Rs9,755,378 Rs15,145,000 Rs27,991,000

Direct Cost of Sales FY 2013 FY 2014 FY 2015SMS SERVICE Rs68,175 Rs77,000 Rs78,000EMAIL SERVICE Rs87,910 Rs160,000 Rs169,000ONLINE SERVICE Rs44,677 Rs85,000 Rs141,000MEDIA SERVICE Rs58,641 Rs78,000 Rs97,000POSTER PHOTOSTAT SERVICE Rs50,134 Rs77,000 Rs96,000Subtotal Direct Cost of Sales Rs309,538 Rs477,000 Rs581,000


13/29

UNITED ADVERTISERS

Table: Milestones

MilestonesMilestone Start Date End Date Budget Manager DepartmentCARDS 4/10/2012 5/10/2012 Rs50,000 A MEDIAPACKING MATERIALS 4/10/2012 5/10/2012 Rs35,000 B MEDIAONLINE QUERY 4/10/2012 5/10/2012 Rs40,000 C ONLINESMS SERVICE 4/10/2012 5/10/2012 Rs100,000 ABC SMSONLINE MARKET 4/10/2012 6/9/2012 Rs150,000 D ONLINEONLINE ADVERTISEMENT 4/10/2012 6/9/2012 Rs150,000 E ONLINEEMAIL CAMPAIGN 4/10/2012 7/9/2012 Rs150,000 F ONLINEPOSTER&PHOTOSTAT 4/10/2012 5/10/2012 Rs30,000 G MEDIAMEDIA 4/10/2012 5/10/2012 Rs25,000 H MEDIAQUERY SERVICE 4/10/2012 5/10/2012 Rs25,000 I TELEPHONET t l R 755 000


14/29

UNITED ADVERTISERS

Table: Personnel

Personnel PlanFY 2013 FY 2014 FY 2015

Production PersonnelPeople 10 20 25Average per Person Rs124,699 Rs140,000 Rs160,000Subtotal Rs1,198,828 Rs2,800,000 Rs4,000,000

Sales and Marketing PersonnelPeople 15 20 25Average per Person Rs155,855 Rs160,500 Rs170,000Subtotal Rs2,337,819 Rs3,210,000 Rs4,250,000


15/29

UNITED ADVERTISERS

Additional Cash Raised Rs0Cash Balance on Starting Date Rs1,000,000Total Assets Rs2,605,000

Liabilities and Capital

LiabilitiesCurrent Borrowing Rs0Long-term Liabilities Rs0Accounts Payable (Outstanding Bills) Rs50,000Other Current Liabilities (interest-free) Rs0Total Liabilities Rs50,000

Capital

Planned InvestmentOwner Rs900,000Investor Rs2,000,000Additional Investment Requirement Rs0Total Planned Investment Rs2,900,000

Loss at Start-up (Start-up Expenses) (Rs345,000)Total Capital Rs2,555,000

Total Capital and Liabilities Rs2,605,000

Total Funding Rs2,950,000


16/29

UNITED ADVERTISERS

Assumptions:Average Percent Variable Cost 3%Estimated Monthly Fixed Cost Rs502,988

Table: Profit and Loss

Pro Forma Profit and LossFY 2013 FY 2014 FY 2015

Sales Rs9,755,378 Rs15,145,000 Rs27,991,000Direct Cost of Sales Rs309 538 Rs477 000 Rs581 000


17/29

UNITED ADVERTISERS

General and Administrative % 28.35% 25.09% 37.21%

Other Expenses:

Other Payroll Rs616,334 Rs1,601,000 Rs2,425,000Consultants Rs168,482 Rs200,000 Rs220,000Other Expenses Rs94,684 Rs250,000 Rs27,000Total Other Expenses Rs879,500 Rs2,051,000 Rs2,672,000Other % 9.02% 13.54% 9.55%

Total Operating Expenses Rs6,035,861 Rs9,150,170 Rs17,480,250

Profit Before Interest and Taxes Rs1,809,545 Rs2,167,830 Rs5,174,750EBITDA Rs1,869,963 Rs2,297,830 Rs5,324,750Interest Expense Rs0 Rs0 Rs0Taxes Incurred

Rs542,864 Rs650,349 Rs1,552,425

Net Profit Rs1,266,682 Rs1,517,481 Rs3,622,325Net Profit/Sales 12.98% 10.02% 12.94%


18/29

UNITED ADVERTISERS


19/29

UNITED ADVERTISERS


20/29

UNITED ADVERTISERS

Additional Cash ReceivedSales Tax, VAT, HST/GST Received Rs1,219,422 Rs1,893,125 Rs3,498,875New Current Borrowing Rs0 Rs0 Rs0

New Other Liabilities (interest-free) Rs0 Rs0 Rs0New Long-term Liabilities Rs0 Rs0 Rs0Sales of Other Current Assets Rs0 Rs0 Rs0Sales of Long-term Assets Rs0 Rs0 Rs0New Investment Received Rs0 Rs0 Rs0Subtotal Cash Received Rs10,974,800 Rs17,038,125 Rs31,489,875

Expenditures FY 2013 FY 2014 FY 2015

Expenditures from OperationsCash Spending Rs6,204,719 Rs10,611,000 Rs14,925,000Bill Payments Rs1,962,654 Rs2,960,177 Rs8,767,059Subtotal Spent on Operations Rs8,167,372 Rs13,571,177 Rs23,692,059

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out Rs0 Rs0 Rs0Principal Repayment of Current Borrowing Rs0 Rs0 Rs0Other Liabilities Principal Repayment Rs0 Rs0 Rs0Long-term Liabilities Principal Repayment Rs0 Rs0 Rs0Purchase Other Current Assets Rs0 Rs0 Rs0Purchase Long-term Assets Rs0 Rs0 Rs0Dividends Rs0 Rs0 Rs0Subtotal Cash Spent Rs8,167,372 Rs13,571,177 Rs23,692,059

Net Cash Flow Rs2,807,428 Rs3,466,948 Rs7,797,816Cash Balance Rs3,807,428 Rs7,274,376 Rs15,072,191

Table: Balance Sheet

Pro Forma Balance SheetFY 2013 FY 2014 FY 2015

Assets

Current AssetsCash Rs3,807,428 Rs7,274,376 Rs15,072,191Other Current Assets Rs50,000 Rs50,000 Rs50,000Total Current Assets Rs3,857,428 Rs7,324,376 Rs15,122,191


21/29

UNITED ADVERTISERS

Table: Ratios

Ratio AnalysisFY 2013 FY 2014 FY 2015 Industry Profile

Sales Growth 0.00% 55.25% 84.82% 0.00%

Percent of Total Assets

Other Current Assets 0.93% 0.58% 0.31% 100.00%Total Current Assets 72.07% 84.30% 92.57% 100.00%Long-term Assets 27.93% 15.70% 7.43% 0.00%Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 28.59% 38.55% 45.15% 0.00%Long-term Liabilities 0.00% 0.00% 0.00% 0.00%Total Liabilities 28.59% 38.55% 45.15% 0.00%Net Worth 71.41% 61.45% 54.85% 100.00%

Percent of SalesSales 100.00% 100.00% 100.00% 100.00%Gross Margin 80.42% 74.73% 80.94% 0.00%Selling, General & Administrative Expenses 67.44% 64.71% 68.00% 0.00%Advertising Expenses 0.17% 0.35% 0.30% 0.00%Profit Before Interest and Taxes 18.55% 14.31% 18.49% 0.00%

Main RatiosCurrent 2.52 2.19 2.05 0.00Quick 2.52 2.19 2.05 0.00Total Debt to Total Assets 28.59% 38.55% 45.15% 0.00%Pre-tax Return on Net Worth 47.35% 40.60% 57.74% 0.00%Pre-tax Return on Assets 33.81% 24.95% 31.68% 0.00%

Additional Ratios FY 2013 FY 2014 FY 2015Net Profit Margin 12.98% 10.02% 12.94% n.aReturn on Equity 33.14% 28.42% 40.42% n.a

Activity RatiosAccounts Payable Turnover 7.15 12.17 12.17 n.aPayment Days 28 35 20 n.aTotal Asset Turnover 1.82 1.74 1.71 n.a


22/29

UNITED ADVERTISERS

Equity Share Offering Percentage 50.00% 0.00% 0.00%Valuation Rs300,000 Rs0 Rs0 Rs0Investor Exit Payout Rs0 Rs0 Rs0

Investor Years Until Exit 6 5 4Investor IRR 0.00% 0.00% 0.00%

Share Ownership Year 1 Year 2 Year 3 Year 7Founders' Shares 10,000 10,000 10,000 10,000

Stock Split Multiple 0 0 0Stock Options Issued 0 0 0 0

Investor Shares Issued 10,000 0 0

Price per share Rs15.00 Rs0.00 Rs0.00 Rs0.00Options Holders' Shares 0 0 0 0Year 1 Investors' Shares 10,000 10,000 10,000 10,000

Year 2 Investors' Shares 0 0 0

Year 3 Investors' Shares 0 0

Total Shares Outstanding 20,000 20,000 20,000 20,000

Equity Ownership Percentage Year 1 Year 2 Year 3 Year 7

Founders' Equity 50.00% 50.00% 50.00% 50.00%

Option Holders' Equity 0.00% 0.00% 0.00% 0.00%Year 1 Investors' Equity 50.00% 50.00% 50.00% 50.00%

Year 2 Investors' Equity 0.00% 0.00% 0.00%Year 3 Investors' Equity 0.00% 0.00%

Total Equity 100.00% 100.00% 100.00% 100.00%Investors' Equity 50.00% 50.00% 50.00% 50.00%

Founders' & Employees' Equity 50.00% 50.00% 50.00% 50.00%

Table: Investment Analysis

Investment AnalysisStart FY 2013 FY 2014 FY 2015

Initial Investment


23/29

UNITED ADVERTISERS

Use of FundsUse AmountName Rs0Name Rs0Name Rs0Name Rs0Total Rs0

Table: Payback

Payback

Projected Payback Calculation

Investment FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Investment Rs500,000Cash Returns by Year Rs100,000 Rs100,000 Rs100,000 Rs100,000 Rs100,000

Combination as Income Stream (Rs500,000) Rs100,000 Rs100,000 Rs100,000 Rs100,000 Rs100,000Cumulative Net Cash Flow to Investors (Rs500,000) (Rs400,000) (Rs300,000) (Rs200,000) (Rs100,000) Rs0Payback Period 5 years


24/29

Appendix

Page 1

Table: Sales Forecast

Sales ForecastMay Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Sales

photocopying Rs62,212 Rs63,776 Rs71,429 Rs62,381 Rs89,078 Rs62,762 Rs68,522 Rs40,251 Rs97,563 Rs89,675 Rs115,922 Rs129,373QUERIES CONNECTION Rs64,274 Rs64,285 Rs52,918 Rs65,346 Rs126,597 Rs82,667 Rs89,621 Rs86,914 Rs128,648 Rs94,150 Rs118,097 Rs128,666

advertising on vehicles and posters Rs64,737 Rs61,420 Rs52,226 Rs58,476 Rs123,595 Rs67,959 Rs87,143 Rs86,667 Rs107,129 Rs83,201 Rs117,682 Rs132,087sms services Rs63,741 Rs55,308 Rs83,909 Rs66,252 Rs120,422 Rs66,429 Rs85,216 Rs79,689 Rs131,436 Rs109,050 Rs112,687 Rs138,349online web based advertisement Rs77,838 Rs89,572 Rs92,641 Rs62,672 Rs96,277 Rs77,142 Rs85,794 Rs107,254 Rs109,902 Rs114,531 Rs113,478 Rs142,096Online market place Rs67,966 Rs77,214 Rs74,979 Rs71,619 Rs126,651 Rs64,286 Rs85,216 Rs91,840 Rs120,096 Rs107,291 Rs115,381 Rs138,247news papers, channels Rs59,509 Rs64,374 Rs80,765 Rs63,095 Rs120,639 Rs75,927 Rs87,381 Rs100,276 Rs106,976 Rs102,395 Rs118,395 Rs137,315

online service for free education Rs64,841 Rs68,799 Rs63,820 Rs69,633 Rs94,588 Rs77,787 Rs68,720 Rs74,654 Rs118,588 Rs99,437 Rs120,177 Rs138,988EMAIL CAMPAIGN Rs63,805 Rs74,697 Rs76,296 Rs72,524 Rs104,580 Rs62,096 Rs62,122 Rs68,977 Rs124,439 Rs104,674 Rs111,327 Rs132,844Total Sales Rs588,925 Rs619,445 Rs648,984 Rs591,999 Rs1,002,427 Rs637,055 Rs719,735 Rs736,521 Rs1,044,777 Rs904,402 Rs1,043,144 Rs1,217,965

Direct Cost of Sales May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar AprSMS SERVICE Rs1,952 Rs3,008 Rs1,214 Rs2,933 Rs5,254 Rs4,988 Rs4,809 Rs6,742 Rs13,337 Rs5,174 Rs8,485 Rs10,279EMAIL SERVICE Rs2,883 Rs3,186 Rs1,149 Rs3,026 Rs6,935 Rs7,499 Rs7,364 Rs8,205 Rs9,351 Rs7,418 Rs15,206 Rs15,688

ONLINE SERVICE Rs3,701 Rs3,403 Rs1,674 Rs2,956 Rs3,389 Rs3,758 Rs3,060 Rs6,334 Rs2,855 Rs3,405 Rs5,039 Rs5,103MEDIA SERVICE Rs3,486 Rs3,011 Rs2,265 Rs2,982 Rs5,235 Rs3,487 Rs4,540 Rs9,524 Rs9,864 Rs4,278 Rs5,682 Rs4,289POSTER PHOTOSTAT SERVICE Rs2,744 Rs3,595 Rs1,756 Rs2,911 Rs5,681 Rs6,129 Rs5,065 Rs4,348 Rs2,063 Rs6,225 Rs6,716 Rs2,902

Subtotal Direct Cost of Sales Rs14,766 Rs16,204 Rs8,058 Rs14,807 Rs26,493 Rs25,861 Rs24,837 Rs35,153 Rs37,470 Rs26,499 Rs41,128 Rs38,261


25/29

Appendix

Page 2

Table: Personnel

Personnel PlanMay Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Production Personnel

People 6 5 6 7 8 9 10 11 12 13 14 10Average per Person Rs9,793 Rs9,989 Rs10,189 Rs10,393 Rs10,601 Rs10,813 Rs11,029 Rs11,250 Rs11,475 Rs11,704 Rs11,938 Rs12,177Subtotal

Rs60,320 Rs46,700 Rs57,824 Rs69,374 Rs81,364 Rs93,804 Rs106,707 Rs120,095 Rs133,972 Rs148,349 Rs163,253 Rs117,067

Sales and Marketing PersonnelPeople 13 13 57 16 14 15 14 14 14 15 15 15Average per Person Rs10,362 Rs10,466 Rs10,571 Rs10,677 Rs10,784 Rs10,892 Rs11,001 Rs11,111 Rs11,222 Rs11,334 Rs11,447 Rs11,561

Subtotal Rs135,369 Rs136,058 Rs599,398 Rs170,832 Rs150,976 Rs163,380 Rs154,014 Rs155,554 Rs157,108 Rs170,010 Rs171,705 Rs173,415

General and Administrative Personnel

People 10 10 10 11 12 12 13 14 14 15 15 15Average per Person Rs12,791 Rs12,919 Rs13,048 Rs13,178 Rs13,310 Rs13,443 Rs13,577 Rs13,713 Rs13,850 Rs13,988 Rs14,128 Rs14,269Subtotal Rs127,915 Rs129,190 Rs130,480 Rs144,958 Rs159,720 Rs161,316 Rs176,501 Rs191,982 Rs193,900 Rs209,820 Rs211,920 Rs214,035

Other PersonnelPeople 5 6 7 8 9 10 11 12 10 10 0 10Average per Person Rs5,286 Rs5,444 Rs5,607 Rs5,775 Rs5,948 Rs6,126 Rs6,310 Rs6,499 Rs6,694 Rs6,895 Rs7,102 Rs7,315

Subtotal Rs26,991 Rs32,664 Rs39,249 Rs46,200 Rs53,532 Rs61,260 Rs69,410 Rs77,988 Rs66,940 Rs68,950 Rs0 Rs73,150

Total People 34 34 79 42 43 46 48 51 50 53 44 50

Total Payroll Expenditures Rs350,595 Rs344,612 Rs826,951 Rs431,364 Rs445,592 Rs479,760 Rs506,632 Rs545,619 Rs551,920 Rs597,129 Rs546,878 Rs577,667


26/29

Appendix

Page 3

Table: Profit and Loss

Pro Forma Profit and LossMay Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Sales Rs588,925 Rs619,445 Rs648,984 Rs591,999 Rs1,002,427 Rs637,055 Rs719,735 Rs736,521 Rs1,044,777 Rs904,402 Rs1,043,144 Rs1,217,965Direct Cost of Sales Rs14,766 Rs16,204 Rs8,058 Rs14,807 Rs26,493 Rs25,861 Rs24,837 Rs35,153 Rs37,470 Rs26,499 Rs41,128 Rs38,261Production Payroll Rs60,320 Rs46,700 Rs57,824 Rs69,374 Rs81,364 Rs93,804 Rs106,707 Rs120,095 Rs133,972 Rs148,349 Rs163,253 Rs117,067Other Costs of Sales

Rs34,195 Rs22,214 Rs24,435 Rs26,879 Rs29,567 Rs32,524 Rs39,318 Rs57,812 Rs34,539 Rs34,368 Rs36,880 Rs28,875

Total Cost of Sales Rs109,281 Rs85,118 Rs90,317 Rs111,061 Rs137,424 Rs152,188 Rs170,861 Rs213,061 Rs205,980 Rs209,216 Rs241,261 Rs184,203

Gross Margin Rs479,644 Rs534,327 Rs558,668 Rs480,938 Rs865,003 Rs484,866 Rs548,873 Rs523,460 Rs838,796 Rs695,185 Rs801,883 Rs1,033,761Gross Margin % 81.44% 86.26% 86.08% 81.24% 86.29% 76.11% 76.26% 71.07% 80.28% 76.87% 76.87% 84.88%

Operating Expenses

Sales and Marketing ExpensesSales and Marketing Payroll Rs135,369 Rs136,058 Rs599,398 Rs170,832 Rs150,976 Rs163,380 Rs154,014 Rs155,554 Rs157,108 Rs170,010 Rs171,705 Rs173,415Advertising/Promotion Rs3,749 Rs1,486 Rs2,980 Rs739 Rs595 Rs654 Rs1,220 Rs791 Rs870 Rs957 Rs1,053 Rs1,158Other Sales and Marketing Expenses Rs4,074 Rs1,875 Rs3,549 Rs3,068 Rs2,955 Rs3,902 Rs2,173 Rs4,137 Rs2,305 Rs3,197 Rs2,445 Rs2,518

Total Sales and Marketing Expenses Rs143,192 Rs139,419 Rs605,928 Rs174,639 Rs154,526 Rs167,936 Rs157,407 Rs160,482 Rs160,283 Rs174,164 Rs175,203 Rs177,091Sales and Marketing % 24.31% 22.51% 93.37% 29.50% 15.42% 26.36% 21.87% 21.79% 15.34% 19.26% 16.80% 14.54%

General and Administrative Expenses

General and Administrative Payroll Rs127,915 Rs129,190 Rs130,480 Rs144,958 Rs159,720 Rs161,316 Rs176,501 Rs191,982 Rs193,900 Rs209,820 Rs211,920 Rs214,035Marketing/Promotion Rs2,867 Rs3,211 Rs3,596 Rs4,028 Rs4,511 Rs5,052 Rs5,658 Rs6,337 Rs7,097 Rs7,949 Rs8,903 Rs9,971Depreciation Rs2,825 Rs3,107 Rs3,418 Rs3,760 Rs4,136 Rs4,550 Rs5,005 Rs5,506 Rs6,057 Rs6,663 Rs7,329 Rs8,062Rent Rs6,860 Rs7,546 Rs8,301 Rs9,131 Rs10,044 Rs11,048 Rs12,153 Rs13,368 Rs14,705 Rs16,176 Rs17,794 Rs19,573Utilities Rs6,202 Rs6,512 Rs6,838 Rs7,180 Rs7,539 Rs7,916 Rs8,312 Rs8,728 Rs9,164 Rs9,622 Rs10,103 Rs10,608Insurance Rs6,520 Rs7,396 Rs7,766 Rs8,154 Rs8,562 Rs8,990 Rs9,440 Rs9,912 Rs10,408 Rs10,928 Rs11,474 Rs12,048Payroll Taxes 15% Rs5,585 Rs6,144 Rs6,758 Rs7,434 Rs8,177 Rs8,995 Rs9,894 Rs10,883 Rs11,971 Rs13,168 Rs14,485 Rs15,934Other General and Administrative Expenses Rs5,064 Rs5,571 Rs6,128 Rs6,741 Rs7,415 Rs8,157 Rs8,973 Rs9,870 Rs10,857 Rs11,943 Rs13,137 Rs14,451

Total General and Administrative Expenses Rs163,839 Rs168,677 Rs173,285 Rs191,386 Rs210,104 Rs216,024 Rs235,936 Rs256,586 Rs264,159 Rs286,269 Rs295,145 Rs304,682General and Administrative % 27.82% 27.23% 26.70% 32.33% 20.96% 33.91% 32.78% 34.84% 25.28% 31.65% 28.29% 25.02%

Other Expenses:

Other Payroll Rs26,991 Rs32,664 Rs39,249 Rs46,200 Rs53,532 Rs61,260 Rs69,410 Rs77,988 Rs66,940 Rs68,950 Rs0 Rs73,150Consultants Rs7,878 Rs8,666 Rs9,533 Rs10,486 Rs11,535 Rs12,689 Rs13,958 Rs15,354 Rs16,889 Rs18,578 Rs20,436 Rs22,480Other Expenses Rs4,428 Rs4,871 Rs5,358 Rs5,894 Rs6,483 Rs7,131 Rs7,844 Rs8,628 Rs9,491 Rs10,440 Rs11,484 Rs12,632

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