COLONIAL ELECTRICAL

(PVT) LTD

Funding Proposal
545 D, SRI SANGARAJA MAWATHA ,Colombo 10 Tel:+94-112-431950
 Statement of Confidentiality and Non-Disclosure

This Document contains proprietary and confidential information. All data Submitted to the
recipient, provided in reliance upon its consent not to use or disclose any information
contained herein except in the context of its business dealings with Colonial Electrical Private
Limited. The recipient of this document agrees to inform present and future employees of his
or her respective organization who view or have access to its content of its confidential
nature.

The recipient agrees to instruct each employee that they must not disclose any information
concerning this document to others except to the extent those matters are generally known
to and are available for use by the public. The recipient also agrees not to duplicate or
distribute or permit others to duplicate or distribute any material contained herein without
Colonial Electrical Private Limited’s written consent. Colonial Electrical Private Limited retains
all title, ownership, intellectual property rights to the material and trademarks contained
herein, including all supporting documentation, files, marketing material and multimedia.

Colonial Electrical (Pvt) Ltd 2

 Purpose of Document

“To gain working capital financing to the amount of LKR 200 Million”

Prepared by

Colonial Electrical (Pvt) Ltd,

545 D, Sri Sangaraja Mawatha,
Colombo 10.

Colonial Electrical (Pvt) Ltd 3

 Contents

Funding Rational 5

Company Background 6

Financials Analysis 8

Product Portfolio 12

Colonial Electrical (Pvt) Ltd 4

 Funding Rational

Colonial Electrical Pvt Ltd, a subsidiary of Colonial Hardware Group established in 1974, is a
primary importer and distributor of all types of Industrial and Domestic electrical
equipment’s. The company is a key supplier to most of the infrastructure projects that take
place in Sri Lanka.

Currently, Sri Lanka is undertaking key infrastructure projects throughout the country and out
of which the Port city project and the Hambantota harbor & industrial zone are of special
significance. We as a leading industrial electrical equipment distributor, intend to capitalize
on this opportunity to supply our products to these projects.

The specific purpose of this proposal is to provide a compelling case for a working capital loan
of LKR 200 million from an established institutional lender. The company intends to use the
working capital infusion to fulfill the following objectives:

 To procure or import goods to supply for the above-mentioned infrastructure projects

 To expand storage facilities
 To have a positive cash flow for daily operations

Colonial Electrical (Pvt) Ltd 5

 Company Background

Colonial Electrical Equipment’s was incorporated under the Companies Act No 07 of 2007 and
subsequently was converted into a Limited Liability Company incorporated under the
Companies Act No. 07 of 2007and registered as Colonial Electrical (Pvt) Ltd. We are a
subsidiary of colonial hardware Group which has been in business for the past 42 years.

Since 2001, the company has been successfully active in the distribution of industrial and
domestic electrical equipment and other electrical items & accessories. We are Island wide
suppliers to leading infrastructure Projects, Government Departments, Hotels, Hospitals and
Etc. The company stores are situated at No. 545D, Sri Sangarajah Mawatha, Colombo 10,
which is at the heart of the Steel-Hardware Bazaar in the city.

Our wide ranges of electrical products are imported from Malaysia, China, India and Europe.
To name a few, Axial Fans Centrifugal Fans, Exhaust Fans, Cooling Fans, Pedestal Fans,
Decorative Ceiling Fans Etc. Pumps, Mini Circuit Breakers, AC Contactor, Starters, Surge,
Protective Divide (SDP) Timer Relays, Cable Lugs – Wiring Accessories, Etc., Light Fittings,
Pumps, Crimping Tools, G I PVC Conduit Fittings, etc. and many more, for both the Industrial
and Domestic Markets.

Colonial Electrical (Pvt) Ltd 6

Colonial Electrical (Pvt) Ltd 7
 Financials Analysis

Forecasted Income Stmnt. Sales Forecast (7) Years

Dec-18 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25

Sales 840,000,000 882,000,000 926,100,000 972,405,000 1,021,025,250 1,072,076,513 1,125,680,338

Cost of Sales 672,000,000 705,600,000 740,880,000 777,924,000 816,820,200 857,661,210 900,544,271

Gross Profit (GP) 168,000,000 176,400,000 185,220,000 194,481,000 204,205,050 214,415,303 225,136,068

less Expenses

Directors Remuneration 1,200,000 1,260,000 1,323,000 1,389,150 1,458,608 1,531,538 1,608,115

Administration 13,000,000 13,650,000 14,332,500 15,049,125 15,801,581 16,591,660 17,421,243

Selling & Distribution 10,000,000 10,500,000 11,025,000 11,576,250 12,155,063 12,762,816 13,400,956

General 150,000 157,500 165,375 173,644 182,326 191,442 201,014

Total Expenses 24,350,000 25,567,500 26,845,875 28,188,169 29,597,577 31,077,456 32,631,329

Net Profit Before Interest & Taxes 143,650,000 150,832,500 158,374,125 166,292,831 174,607,473 183,337,846 192,504,739

Finance Charges -10,500,000 -10,500,000 -10,500,000 - - -

Loan Interest -36,000,000 -36,000,000 -36,000,000 -27,750,000 -9,750,000

Capital Repayment 0 0 0 (100,000,000) (100,000,000)

Annual Debt Service -46,500,000 -46,500,000 -46,500,000 -127,750,000 -109,750,000

Net Profit Before Tax 97,150,000 104,332,500 111,874,125 38,542,831 64,857,473 183,337,846 192,504,739

Tax (28%) 27,202,000 29,213,100 31,324,755 10,791,993 18,160,092 51,334,597 53,901,327

Net Profit After Tax 69,948,000 75,119,400 80,549,370 27,750,838 46,697,380 132,003,249 138,603,412

Colonial Electrical (Pvt) Ltd 8

 Sales
1,200,000,000

1,000,000,000

800,000,000

600,000,000

400,000,000

200,000,000

-
2019 2020 2021 2022 2023 2024 2025

Sales Gross Profit Net Profit

Earnings
250,000,000

200,000,000

150,000,000

100,000,000

50,000,000

-
2019 2020 2021 2022 2023 2024 2025

Gross Profit Operating Income EBT EAT

Operating Ratios
Sales 100% 100% 100% 100% 100% 100% 100%
Gross Profit 20% 20% 20% 20% 20% 20% 20%

Expenses 2.90% 3.04% 3.20% 3.36% 3.52% 3.70% 3.88%

Net Profit Before Interest & Tax 17.10% 17.96% 18.85% 19.80% 20.79% 21.83% 22.92%
Debt Service 5.54% 5.54% 5.54% 15.21% 13.07% 0.00% 0.00%

Net Profit Before Tax 11.57% 12.42% 13.32% 4.59% 7.72% 21.83% 22.92%
Income Tax 3.24% 3.48% 3.73% 1.28% 2.16% 6.11% 6.42%
Net Profit After Tax 8.33% 8.94% 9.59% 3.30% 5.56% 15.71% 16.50%
Debt Coverage Ratio 3.09 3.24 3.41 1.30 1.59

Colonial Electrical (Pvt) Ltd 9

Loan Repayment Schedule
Loan Amount 200,000,000
Interest Rate 18%
Term (Yrs.) 5
Interest Only Period (months) 36
Capital repayment Period (months) 24

Annual Interest Payment (1-3) Yrs. 36,000,000

Monthly Interest Payment (1-3) Yrs. 3,000,000
Total Interest Paid (1-3) Yrs. 108,000,000

Interest Payment 1st month (4-5) Yrs. 3,000,000

Capital Repayment (4-5) Yrs. 8,333,333.33
Monthly Installment 1st Month (4-5) Yrs. 11,333,333.33
Total Interest Paid (4-5) Yrs. 37,500,000

Income Tax Rate 28%

Loan Interest Repayment Schedule

Year 1 Yearr 2 Year 3 Yearr 4 Year 5
Loan B/F 200,000,000 200,000,000 200,000,000 200,000,000 100,000,000
Interest B/F 108,000,000 72,000,000 36,000,000 37,500,000 9,750,000

Annual Interest Payment (27,750,000) (9,750,000)

(36,000,000) (36,000,000) (36,000,000)
Annual Capital 0 0 0
Repayment (100,000,000) (100,000,000)

Interest C/F 72,000,000 36,000,000 - 9,750,000 -

Loan C/F 200,000,000 200,000,000 200,000,000 100,000,000 -

Colonial Electrical (Pvt) Ltd 10

Cash flow Chart

Rs.1,500,000,000

Rs.1,000,000,000

Rs.500,000,000
Cashflow

Rs.-

Rs.(500,000,000)

Rs.(1,000,000,000)

Rs.(1,500,000,000)

Date 2019 2020 2021 2022 2023 2024 2025

Cash In 840,000,000 882,000,000 926,100,000 972,405,000 1,021,025,250 1,072,076,513 1,125,680,338
Cash Out (770,052,000) (806,880,600) (845,550,630) (944,654,162) (974,327,870) (940,073,263) (987,076,926)
Net Cash Flow 69,948,000 75,119,400 80,549,370 27,750,838 46,697,380 132,003,249 138,603,412
Product Portfolio
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