Taj FurnitureInvestment Teaser

Dec 2014Bangalore

Deal Summary

• Has been in the business of furniture workshop since 10 years now• Consistent track record and predictable cash flows ensure lower risk • Monthly net profit is expected to jump from the current Rs. 8k to Rs. 20.5

after investment due to the high operating leverage i.e. fixed costs which is a high percentage of the total costs will have only a marginal increase• Investment requirement – Rs. 2 lakh• Investment tenure – 2 years• Expected annual return of 25%• Expected Monthly Payment – Rs. 4,100

Note – In the unlikely event of a business loss, it will be shared in the ratio of investment

Consistent and predictable cash flows

Predictable Cash Flows

Following were his financials for one month of his monitoring period:

INR First 10 days Middle 10 days Last 10 days

Sales 69,000 75,900 69,000

Gross Profit 6,000 6,400 5,900

Net Profit 2,500 2,900 2,400

Consistent and predictable cash flows ensure that there will be minimum risk of variability in returns

Before investment After investmentBulk sets produced per month 31 35 Price per set INR 6,900 6,900 Sales proceeds from bulk sets INR 2,13,900 2,41,500 Cost of wood INR 1,14,700 1,23,200 Carpenter labour INR 24,800 28,000 Polish labour INR 18,600 21,000 Polish material INR 18,600 21,000 Turning (shaping) INR 8,300 9,371 Carving INR 6,200 7,000 Accessories (nail etc) INR 1,600 1,806 Transportation (tempo) INR 2,800 3,161 Cutting labour INR - 1,050 Gross profit from bulk sets INR 18,300 25,911 Showroom sets - 5 Sales proceeds from showroom sets INR 47,500 Total Sales proceeds INR 2,13,900 2,89,000 Gross profit due to showroom sets 5,600 Total Gross profit 18,300 31,510 Gross profit margin % 8.6% 10.9%

Rent INR 9,000 9,000 Light bill INR 1,500 2,000

Net profit INR 7,800 20,510 Net profit margin % 3.6% 8.5%Investment required INR 2,00,000

Advance paid to the landlord INR 70,000 Labour advance (12 boys) INR 70,000 1,20,000 Working capital investment INR 1,00,000 1,50,000 Promoter's contribution INR 2,40,000

Profit sharing ratio % 20%Expected monthly profit share to investor INR 4,100 Expected investor's annualised ROI % 25%

Before investment After investmentBulk sets produced per month 31 35 Price per set INR 6,900 6,900 Sales proceeds from bulk sets INR 2,13,900 2,41,500 Cost of wood INR 1,14,700 1,23,200 Carpenter labour INR 24,800 28,000 Polish labour INR 18,600 21,000 Polish material INR 18,600 21,000 Turning (shaping) INR 8,300 9,371 Carving INR 6,200 7,000 Accessories (nail etc) INR 1,600 1,806 Transportation (tempo) INR 2,800 3,161 Cutting labour INR - 1,050 Gross profit from bulk sets INR 18,300 25,911 Showroom sets - 5 Sales proceeds from showroom sets INR 47,500 Total Sales proceeds INR 2,13,900 2,89,000 Gross profit due to showroom sets 5,600 Total Gross profit 18,300 31,510 Gross profit margin % 8.6% 10.9%

Rent INR 9,000 9,000 Light bill INR 1,500 2,000

Net profit INR 7,800 20,510 Net profit margin % 3.6% 8.5%Investment required INR 2,00,000

Advance paid to the landlord INR 70,000 Labour advance (12 boys) INR 70,000 1,20,000 Working capital investment INR 1,00,000 1,50,000 Promoter's contribution INR 2,40,000

Profit sharing ratio % 20%Expected monthly profit share to investor INR 4,100 Expected investor's annualised ROI % 25%

Use of investment

Cutting machine 50,000 Power permission 50,000 Advance to 5 boys 50,000 Working capital investment 50,000

Financial Summary

Investment Score

Criterion Score

Promoter Background 4

Business Profitability 4

Business Cash Flow Consistency 4

Financial Security of promoter 4

Upside probability in returns 4

Expected returns 4

Social impact rating 4

Overall investment rating 4

1 – Very Poor 2 – Poor 3 – Average 4 – Good 5 – Excellent

Rehbar Financial Consultants

• Our Mission – To enhance Sharia-compliant value creation for businesses and investors while bringing them together

• Our Approach – To utilize the best practices from the finance industry and leverage expertise and resources from across our network to create greater value for our stakeholders

• Our Strength – A professional team with over 100 years of experience in diverse industries like IT, Manufacturing, Banking, Private Equity and Asset Management

RFC’s Success so far…

•Analyzed and studied more than 120 deals so far across all industries and sectors•Successfully executed 23 deals with a total deal value of more than Rs. 2.35 crore•Average return on investment realized across all the deals executed so far is 21%

Disclaimer• We have exercised due diligence in checking the correctness and authenticity of the information contained herein, so far as it

relates to current and historical information, but do not guarantee its accuracy or completeness.

• The opinions expressed are our current opinions as of the date appearing in the material and may be subject to change from time to time. Prospective investors are cautioned that any forward looking statement are not predictions and are subject to change without prior notice.

• Recipients of this material should rely on their own investigations and take their own professional advice. RFC or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. RFC and/or its affiliates and/or employees may have interests/ positions, financial or otherwise in the company mentioned in this report.

For more information, contact Mr. Mudassar Baig, CEO, Rehbar Financial ConsultantsEmail: Mudassar@rehbar.co.in Mobile: +91-8105676677

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