BVG-3.

17

INSTRUCTIONS BEFORE STARTING THE SIMULATION

To: All Participants

Your team has been placed in charge as Directors on the Board of a company. The rules for
managing your business are explained in the Participant Manual. These rules would be clarified,
amplified and may be modified by other documents and instructions by the Simulation Administrator
from time to time. He will also inform you the tenure of your team’s appointment. Please be guided
by the following, too:

1. The winning Criterion for evaluation of the performance of your Team is the Cumulative Profit
after Tax (Cum PAT) at the end of the last quarter of this event.

2. Your team will be given a unique Team ID and Group ID. These would identify your team in all
Decision Form. The responsibility of keeping the login id and password safe rests entirely on the
team. In case of loss, new login id and password WILL NOT BE PROVIDED.

3. You will also receive login id and password for downloading and uploading information as well as
Decision Form. The safety of login and password will be the sole responsibility of the team. In
case of loss, these will not be changed. However, the same login password will be provided to
your team.

4. Your team will be given a Standard Decision Form in Excel Format for each Quarter. You will
submit the same on time through the method explained by the Games Administrator at the end of
every Quarter. Once the time deadline is reached, this form will not be available for revision,
modification of entries or for any other reason. If your team submits a blank form, the previous
Qtr decisions will be incorporated automatically. Requests for resubmission of the form will NOT
be entertained. Please maintain a backup of the Form for your record.
5. Chairperson must authorize the decisions of his Team for each quarter.
6. The length of each Quarter may range from 30 minutes to 75 minutes. Please submit the
Decision Form within the stipulated deadline as announced. You will not be allowed to get any
extension in time limit for submission of the Decision Form.
7. The Sector Analysis Report (SAR) gives you an overview of the industry. Cost and other
constraints for the case are shown in the Starting Conditions. The financial position of your
Company at the beginning of the Game (Quarter zero) is given in the Management Report
(MR). A comparative statement of the Teams competing in your Group is given in the Sector
Update (SU). More information would be made available to you at prices mentioned in the
Information Packages section of the Starting Conditions will be made available to you by the
Simulation Administrator.
8. Changes in the external environment and some managerial proposal may be communicated
through the quarterly Gazettes. Please note that it is your responsibility to ensure that you
received a set of Decision Forms and copies of the Gazette for every Quarter.
9. On receipt of the Management Report and Sector Update of any Quarter, you must verify
their contents against the Decisions taken by you. If you do not report any unexplainable
discrepancy between your decision data and your results within 20 minutes thereafter, the
data used for the process will be considered good and binding on the Team. No change
will be accepted, thereafter. However, the SIMULATION ADMINISTRATOR RESERVES THE RIGHT
TO REPROCESS THE RESULT OF ANY QUARTER. HIS DECISIONS ARE FINAL AND BINDING ON
ALL PARTICIPANTS, THEIR TEAMS AND SPONSORING BODIES.
 SECTOR ANALYSIS REPORT – BEVERAGE INDUSTRY

Purified Water, Fruit juices, pulp and concentrates, and energy drinks are doing very well in the
beverage market for the past few years. Various juices, milk products, health beverages have also
been contributing largely in the rising demand of beverages. The leading beverage companies are
exporting various products to the international markets every year.

Publicity happens through media and also through supply at remote places having strong Dealer
networking, the beverage products are liked by mass and utility is increasing. People are health
conscious and spending money on hygienic drinking products.

BVG – HEALTH & WELLNESS SECTOR (H&W)

A variety of illness are affecting sections of the Affluent
Urban Population (AUP) today. High levels of stress at
workplace, and sudden change in lifestyles due to the
evolution of nuclear families and working couples, has
results in increased intake of outside food. All these factors
have caused increased obesity levels among affluent urban
Chanakyans, making them highly susceptible to disorders
such as diabetes and hypertension. Doctor’s prescription
for such patients is avoid foods with a high sugar, salt,
calorie and cholesterol content and to increase intake of
foods rich in fibre, water and minerals. Given higher levels
of awareness, large sections of the AUP also resort to
consuming health and wellness products.

BVG is a generic name or short for a set of beverages mainly targeted at the AUP within the
health and wellness sector and classified under the Food and Beverages industry.
The Products (1)MinAqua: MinAqua is defined as natural and flavored
water fortified with minerals, vitamins etc. The
product shall be packed in sealed retail containers
suitable for preventing the possible adulteration or
contamination of water and shall be in accordance with
the applicable sections of the Code of Hygienic Practice
for Packaged Drinking water.
The fortified water is differentiated based on the source of
the water and the assistive contents. Water taken for
drinking from minerals wells, artesian wells, springs,
glaciers etc are typically categorized as MinAqua
because of their high natural minerals content and their
health and wellness properties. Misbranding, inability to
comply with any microbiological criteria established in
accordance with the law can lead heavy penalties.
Page 2
Growth rate is nearly 40% per annum. However, MinAqua which is a niche premium product
within this category is expected to grow by a lower rate.

About 20% of the requirement is supplied by the players

selling unbranded water in unorganized sector. There are
consumers who are sometimes not aware about brand and
on some occasion, the need compels buyers to buy
unbranded products.

(2) ZeroCal: is a light carbonated soft drink directed at

weight loss for consumers on-the-go lifestyle. It is low in ZeroCal
calories and caters to a health conscious audience. These
products serve their primary purpose of quenching thirst
without adding calories. Target consumers are the Affluent
Urban Population (AUP) that is affected by threat of diabetes
and obesity. ZeroCal sales are helped by the media focus
on health, affordability and availability. However, a closer
examination of the ZeroCal beverage reveals that consumer
interest in high protein / low-carbohydrate diets, particularly
in more developed markets is at times a fad. For example,
in the U.S., where the low-carb claims is losing steam. Product innovation can drive excitement
and trial, but only enhancement that meet more sustainable needs of health and convenience of
consumer will enjoy long-term success. This segment is registering a strong growth.
(3) Juicy beverages have fruits juice as its base and pulp concentrate of various fruits are added.
The target consumer is a health conscious family unit looking for a refurbishment of one’s health.
These beverages are low in sugar, calories, cholesterol, and diabetic impact.
They also leave a refreshing feeling and therefore, visual
impact as well as packaging must address all these
requirements. The visual must communicate the presence of
fruits as fruits are seen as elixirs of good health. The
consumers in this segment are more health savvy than they
are taste conscious. They are more serious about health
issues and therefore are less impulsive, more price
conscious in their purchases unlike those in the ZeroCal
segment. They also prefer fruit juice with different flavor. Some of the customers keep such
variety in their home and also use them on daily basis as a part of their diet. The children at
home also like such beverage and hence, parents are less worried about its cost.
(4) Spark, a niche product, is a heavily fortified drink with
natural herbs and ingredients and is supposed to energize
you to do the higher level of activity. Spark beverage
companies are formulating products using an array of
energy boosting additives and ingredients such as green
tea, yerba mate and ginkgo biloba, and cranberry extracts.
The base could be plain juice, water, milk etc. Although
Asia Pacific remained the leading region, its market share
is expected to gradually decline as other markets evolve.
The North American region is the second largest and has
seen impressive volume grains.

Spark drinks are a niche segment within the BVG category. Its sustained growth rate is the
testament of its strength. However, an undisputed brand leader has recently seen its market
share getting eroded because of the broadening and proliferation of brands. Spark beverage
formulations are also encroaching on the Page
other3
H&W beverage segments, such as a MinAquq,
ZeroCal and Juicy.
Raw Materials and Packaging
All the four products are a combination of two basic ingredients. Water, milk or fruits juices
provide the base in which the additives, ingredients, preservatives and color etc dissolved to
“pack the punch” for these beverages. Packaging is another major input whose appearance, feel,
safety and hygienic condition can make or break the product. All the beverages are packed in
various sizes to suit different customer needs. However, for the purpose of this exercise all the
pack sizes are converted into one equivalent size of packaging. The required raw material and
packaging input costs are mentioned in the starting conditions. Additives are naturally subject to
the vagaries of nature. There are no expected shortages and uncertainties in the case of the
base. Packaging costs are susceptible to price and volume variations.

Pricing
There are several beverages similar to fruits BVG, carbonated water etc available in the market
but the H7W customer is invariably willing to pay a higher “health premium” over that of several
other regular offerings. Most of these products are niche with a specific customer category in
mind. Brand promotions, appropriate positioning, distribution, product innovations etc could also
play an important role in the eventual volume as well as revenue sales of the products. Unmet
demand might automatically go to the competitors.

The agency has also cited their research to indicate price points beyond which sales could be a
non event. For example, consumers of MinAqua are not willing to buy at price point less than
Cu.150 and higher than Cu.240. ZeroCal is to sell between price points of Cu.240 and Cu.300.
The market research report highlights a ZeroCal consumer is more conscious of the product and
promotion than the other P’s. Juicy is to sell between Cu.600 to Cu.1001 and Spark is likely to
sell between price points of Cu.1200 and Cu.1800. Consumers of Spark are not very price
sensitive and are willing to pay extra for exclusivity while those for Juicey are price and health
conscious.

Market research on consumer behavior for the ZeroCal and Spark sector indicate that there is a
snob factor to the sales for these products. Certain exclusivity is what the customers expect from
the product.

Demand Drivers
Market researchers have mainly predicted that demand originates from (i) the urban segment
within Chanakya and (ii) population which is mobile and visible on road, rail and airports. They
have collected data which could form the basis of predicting demand for the various H&W
beverage products.

Total Industry
Demand for 10 Q1 Q2 Q3 Q4
teams* in Q0
MinAqua 61,426 69,389 78,386 88,550
ZeroCal 35,450 39,906 44,923 50,573
Juicy 41,820 47,140 53,143
Spark 5,126 5,786 6,530

The demand shown in the above table is in units and also given at the bottom-left of Management
Report (MR)

These segments do not take into consideration any additional demand that may arise from
exports and foreign departmental stores like DS Mart, Discount Value Stores (DVC) looking to
outsource and the overall growth in the economy. The rise in economy indexes like GDP and
Index of Industrial Production (IIP) may increase the demand by around 4-8%. Overall demand in
the industry is also affected by the concerted price and product development efforts of the
industry. If overall prices are tending downward, the industry demand will get a boost. If average
Page 4
prices are tending up there could be a negative impact for some product segments.
*If number of teams are 8 then total demand will be apportioned accordingly for all quarters i.e.
Q1 MinAqua total Industry demand will be (61,426/10 teams) x 8 teams = 49,138

The Health and Wellness Consumer

The H&W consumer is not driven by a common theme across the world. Country specific factors
play an important role in this sector. Low cholesterol drinks, for example, have been well received
in some countries but have been greeted with skepticism in others due to their significantly higher
price as compared to traditional products. Further, the huge popularity of amino acid drinks in
Japan has not been repeated in other markets such as Europe or the US .in Chanakya, health
and wellness drinks around the theme of heart and cardiac problems are expected to sell.

One universal trend that has driven sales of health and wellness products is increased consumer
concern and awareness for personal health. Media attention has amplified consumer health
awareness. This has created a more educated, but often more confused, consumer. This may
explain the high level of product innovation, but relatively short life span of the product in the
market.

Disbandment of Plant and Machinery (P & M)

There are possibilities to sell off your Plant and Machinery on a given Book Value. An example of
disbandment is given below:

In Case you disband Plant and Machinery in Quarter 1 of the game (This is not possible in 1st Qtr.
However, for the purpose of understanding the disbandment, an example is given)

Suppose the disbandment is to be made at a Book Value of 103% of Quarter 0 (Zero)

1. The Capital gain or loss (over 100% is gain and below 100% is loss) will be shown under
extraordinary items and premium will be taxed.
2. The P&M can be sold as per Asset number (#) shown in the Sector Update. In this case, in
Quarter 0, Your Machinery having capacity to produce 10000 units per Quarter is shown as
Asset No. 1. If you are deciding to sell it off the conditions are:
a. The entire block of 10,000 units will be sold and not part of it
b. It is sold at the beginning of the Quarter. Hence, you cannot use it for production in Q1
c. It should have run for a minimum of One Quarter. Since it has run in Q0, it qualifies for
disbandment.
d. You receive only Cash and that is not your profit.
e. The Cash will come in the same Quarter.
3. The realization @ 103% will be as follows:
a. Cash Realized 103% *Book value i.e. (Cu. 100 – Cu 10 accumulated depreciation)
b. The Depreciated value = Cu. 90 per unit i.e. 10,000 units x 90 = Cu 900,000
c. The Disbandment value will be 103% of Cu 900,000 = Cu 927,000
d. Cu 900,000 shown under capital expenditure (inflow)
e. On the income statement under extraordinary gains of Cu 27,000
f. On the Balance Sheet, the value of machinery would be lower by Cu 900,000
4. Likewise the plant # 1 has a capacity of 15,000 units. The entire lot can be sold at 103% of its
book value of Cu. 200. It will be reflected on the financial statements as depicted for
machinery.
5. You cannot buy and sell the same plant and machinery in the same quarter.

The report and references to company names and situations is only for academic and game simulation
purposes. The situations are contrived without any prejudice or bias to any company or its products and
do not in any way actual business situations or company activities.

Page 5
 FRX2Any v.12.14.01 DEMO

                MANAGEMENT
CHANAKYA
           
Cash Statement
THE BUSINESS DECISION GAME
Ltd.
                             REPORT DESCRIPTION CU

Operation Cash  Inflows 1,860,000
Income Statement
Sales Revenue Collection
Results of Quarter

B0 Current Quarter 1,860,000
Previous Quarter 0
DESCRIPTION CU
0 Operation Cash Outflows
RM & Contract Mfg payment 
1,239,000

    Current Quarter 550,000
INCOME
    Previous Quarter 0
Balance Sheet Net Sales Revenue 1,860,000 Packaging (Manpower)
Other Income 0     Current Quarter 60,000
DESCRIPTION CU    Previous Quarter 0
Total Income 1,860,000
Warehousing Charges 36,000
Share Holders' Funds EXPENSES
Production Overheads 300,000
Equity Share Capital (FV=10) 4,500,000 FG Op Inv (incl Contract Mfg) 0
Selling, Dist  and Admin costs 293,000
Res & Surplus or Ret Earnings 105,750 630,000
Raw Materials Consumed 0
(Eq share prem: 0.00 ) Information Package
+Packaging (Manpower) 60,000 0
Preference Share capital Product Design & Certification
0 =Total Direct Costs 690,000 Interest Flows 0
( )
(Pr. share prem: 0.00 ) +Warehousing Charges 36,000 Net Interest Paid
0
Loan Funds +Production Overheads 300,000 Interest on Bank OD
0 0
Two Year Term Loan =Cost of Production (CoP) 1,026,000 Interest on Term loans
0 Interest on Bonds 0
Three Year Term Loan Goods Available for Sale (Op+CoP) 1,026,000
Bonds 0 Shark Loan Interest 0
Less FG Closing Inventory 0
Total Sources 4,605,750 1,026,000 Income from Investments (+) 0
=Cost of Goods Sold
Fixed Assets 834,000 Corporate Tax 35,250
Gross Profits
3,000,000 293,000 Ext item,inv writeoff, disband(+/-) 0
Assembly Plant (incl Plant under inst) Selling, Dist  & Admin Expenses
  less Accumulated Depreciation 300,000 0
Bad Debts Net Operational Flows 585,750
Machinery (incl Mach under instal) 1,000,000 Cash Discount+Bill Disc Chges 0 Appropriations
  less Accumulated Depreciation 100,000 0 Preference Dividend 0
Information Package
Total Fixed Assets 3,600,000 0 Equity Dividend 0
Product  Design & Certification
Investments & Vendor Deposits 0 EBITDA 541,000 Capital Inflows
Depreciation & GW amortization   Overdraft and Loans Taken 0
1,555,750 400,000
Current Assets Capital Raised
EBIT 141,000
RM+FG Inv 470,000 Pref Shares Issued 0
Bank Overdraft Interest 0
Accounts Receivables 0 Equity Shares Issued 0
Shark Loan Interest 0
Cash on Hand 1,085,750 Capital Outflows
2/3 year Term Loan Interest 0 0
Less Current Liabilities 550,000 Investments
Bond Interest 0 Principal Repayments 0
Accounts Payables 550,000 Misc Exp, Royalty, TM etc 0 LC Amount Repayed 0
Maturing Term Loans 0 Total Financial Expenses 0 Cap Expenditure 0
Bonds maturing 0 Corporate Tax 35,250 Net Capital Flows 0
Bank Overdraft 0 Ext item,Inv write off, disband 0
Shark Loans 0 Profit After Tax (PAT)
Appropriations
105,750 0
Total Net Current Assets Misc Exp, Royalty, TM etc
1,005,750
Dividend on Preference Shares 0 Opening Balance Cash 500,000
Total Application of Funds
4,605,750 0 0
Dividend on Equity Shares Shark Loans Raised
Net Income to Retained Earnings 105,750 Closing Balance 1,085,750

SUMMARY OF OUTSTANDING  TERM LOANS  & BONDS (PLR +  %) Inventory Data (ID)
# AMOUNT INTRATE DURATION ENDS IN AMOUNT DUE EQI Finished Goods MinAqu ZCal Juicy Spark

Order Enq Recd  Dom(units) 6,000 3,000

Opening Inventory (units)
Actual Production (units) 6,000 3,000
Equivalent Capacity Used 6,000 3,000
Proc from Contract Mfg (units)
Sale Dom + Export+Var (units) 6,000 3,000
FG Closing Inventory (units)
Material Consumed   / unit
Water 9.00 8.00
Add 1.00 2.00
Material Consumed (units)
Water 54,000 24,000
Add 6,000 6,000
Report  on the Market submitted by : Your Corporate Planning Dept
Packaging Cost/Unit 5.00 10.00 10.00 10.00
Forecast of General Economic Environment Your Direct Cost pu 70.00 90.00
Avg Ind  Selling Price CU 190.00 240.00
Qrtr-> 0 1 Your Market Share (%)(units) 10.00 10.00
2 3 4
Index (Base )
Raw Material Numbers Value Cu.
GDP   102 104 105 106 109 Water Add Water Add
STK IDX  12900 13000 13500 13650 13750 Opening Inventory
CPI  100 101 104 105 106 Fresh Purchases 100,000 30,000 500,000 600,000
IIP 100 102 104 106 108 Consumption 78,000 12,000 390,000 240,000
10.0 10.0 10.0 10.0 10.0 Closing Inventory 22,000 18,000 110,000 360,000
PLR (%pa)
WtAvg Proc Price pu 5.00 20.00
WAvg Cons Price pu 5.00 20.00
Actual Or Forecasted Demand for the Domestic Sector; Export, Tenders etc is extra and as given in Gz, emails  (in Units)

Qrtr-> 0 1 2 3 4
Product Messages
MinAqu 0 61,426 69,389 78,386 88,550
ZCal 0 35,450 39,906 44,923 50,573
Juicy 0 41,820 47,140 53,143
Spark 0 5,126 5,786 6,530

Page 6
 0
Sector
Update Issued at the end of Quarter No: Team No:
0
Company Name Team00 Team01 Team02 Team03 Team04 Team05 Team06 Team07 Team08 Team09
Plant Capacity (for next qtr) 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000
Machine Capacity (for next qtr) 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000
Plant Capacity thru Productivity Gains
Machine Capacity thru Productivity Gains
Equity Share Price on Stk Exc 7.53 7.53 7.53 7.53 7.53 7.53 7.53 7.53 7.53 7.53

1.057 1.057 1.057 1.057 1.057 1.057 1.057 1.057 1.057 1.057
Winning Criterion (CUMPAT(000
00)
)

Key Performance Data (Information Package # 6 - Price Cu.50,000)

Average Packaging Cost 6.67 6.67 6.67 6.67 6.67 6.67 6.67 6.67 6.67 6.67
Net Income Margin 0.0569 0.0569 0.0569 0.0569 0.0569 0.0569 0.0569 0.0569 0.0569 0.0569
Debt to Equity Ratio
Current Ratio 2.83 2.83 2.83 2.83 2.83 2.83 2.83 2.83 2.83 2.83
Earnings Per Share 0.2350 0.2350 0.2350 0.2350 0.2350 0.2350 0.2350 0.2350 0.2350 0.2350
Return on Equity 0.0230 0.0230 0.0230 0.0230 0.0230 0.0230 0.0230 0.0230 0.0230 0.0230
Return on Investment 0.0205 0.0205 0.0205 0.0205 0.0205 0.0205 0.0205 0.0205 0.0205 0.0205
Collection in Curr Qtr/Sales 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

Efficiency and Activity Ratios ((Information Package # 7 - Price Cu.40,000)

Prod Dev /Sales
S & D & Info Pack Cost/Sales 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15
Material Cost/Sales 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33 0.33
Financial Cost/Sales
Days Sales Outstanding
FG Inventory Holding Days
Sales/Total Assets 0.36 0.36 0.36 0.36 0.36 0.36 0.36 0.36 0.36 0.36

Market Share Data (Information Package # 8 - Price Cu.125,000)

MinAqu Mkt Share % units 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10
Avg Price / Unit 190 190 190 190 190 190 190 190 190 190
Sale/Ord Enq 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

ZCal Mkt Share % units 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10
Avg Price / Unit 240 240 240 240 240 240 240 240 240 240
Sale/Ord Enq 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

Juicy
Avg Price / Unit
Sale/Ord Enq

Spark
Avg Price / Unit
Sale/Ord Enq

Market Share (Rs Sales) 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10

Contract Sales (no charge)

Price Quotation
MinAqu
Qty Awarded
Price Quotation
ZCal Qty Awarded
Price Quotation
Juicy Qty Awarded
Price Quotation
Spark Qty Awarded

Industry Wide Inventory Levels (Information Package # 9

MinAqu - Price Cu.25,000)

ZCal
Juicy Water 220,000
Spark Add 180,000

Asset List (no Charge)

Plant # 1
Capacity (units) 15000
Remaining Life (qtrs) 9

Machine # 1
Capacity (units) 10000
Remaining Life (qtrs) 9

Page 7
Abridged Balance Sheet and Income Statement at the end of Quarter 0
(Information Package # 10 Price Cu.125,000) TEAM00 TEAM01 TEAM02 TEAM03 TEAM07 TEAM08 TEAM09
TEAM04 TEAM05 TEAM06
Balance Sheet All Figures are in Cu 000)
Equity Share Capital 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500
Preference Share Cap
Reserves and Surplus 106 106 106 106 106 106 106 106 106 106
Total Long Term Liab
Total Sources 4,606 4,606 4,606 4,606 4,606 4,606 4,606 4,606 4,606 4,606
Total Fixed Assets 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600 3,600
Total Investments
Receivables
RM+FG Inventory 470 470 470 470 470 470 470 470 470 470
Cash In Hand 1,086 1,086 1,086 1,086 1,086 1,086 1,086 1,086 1,086 1,086
Account Payables 550 550 550 550 550 550 550 550 550 550
Bank Overdraft
Maturing Term Loans
Maturing Bonds
Shark Loans
Net Current Assets 1,006 1,006 1,006 1,006 1,006 1,006 1,006 1,006 1,006 1,006
Total Application 4,606 4,606 4,606 4,606 4,606 4,606 4,606 4,606 4,606 4,606

Income Statement All Figures are in Cu 000)

Sales 1,860 1,860 1,860 1,860 1,860 1,860 1,860 1,860 1,860 1,860
Other Income
Opening Inventory
Production Cost 1,026 1,026 1,026 1,026 1,026 1,026 1,026 1,026 1,026 1,026
Goods Available for 1,026 1,026 1,026 1,026 1,026 1,026 1,026 1,026 1,026 1,026
FG Closing Inventory
Gross Profit 834 834 834 834 834 834 834 834 834 834
Bad Debts
S & D Expenses 293 293 293 293 293 293 293 293 293 293
R & D Expenses
MR Expenses
Total Financial Expe
Income Tax 35 35 35 35 35 35 35 35 35 35
Equity Dividend
Preference Dividend
Transfer to R & S 106 106 106 106 106 106 106 106 106 106

Page 8
Starting Conditions 1 - BVG
Raw Material
Consumption of Raw Material for one unit of Product Water Add
MinAqua 9 1
ZeroCal 8 2
Juicey 6 4
Spark 6 5
Raw Material Cost per unit (Cu.) 5 20
Constraints on Purchase as % increase or decrease over previous quarter NA 60%
Spot Rates NA 30
Cash Outflow on the Raw Material Purchases
in current quarter 50% 50%

Warehousing Costs on Quarter End Inventory of (Cu.) Cost (Cu.) per unit
Finished Goods ( MinAqua, ZeroCal, Juicey, Spark) 6
Raw Material ( Water in NIL) , Add 2
Payment Terms in current Quarter 100%

Direct Packaging Cost pu of FG Cost (cu.)

MinAqua (Base Rate BR) 5 per unit
ZeroCal, Juicey, Spark (2 x BR) 10 per unit
Payment Terms in current Quarter 100%

Production Overheads per qtr Cu. Cost

Fixed Per Quarter 3,00,000
Payment Terms in current Quarter 100%

Plant & Machine Capacities per quarter Plant Machine

Present Capacity per Qtr 15,000 10,000
Life in Quarters 10 10
Cost per unit for adding capacity 200 100
Lead time for Acquiring capacity in Qtrs 1 1
Potential Capacity utilization of Plant & Machine 100%
Option to disband Plant & Machine at present N.A
Payment in current Quarter for capital expenditure 100%

Page 9
Starting Conditions 2 - BVG
Marketing Data
Fixed Branding, Distribution & Marketing Costs per qtr in Cu. 200,000
Dealer Margins, Incentives, Marketing costs per qtr as % of retail sales 5%
Payment terms for the marketing expenditure in current Qtr 100%
Organized Sector share for MinAqua 80%
Organized Sector share for ZeroCal, Juicey & Spark 100%
Collections in Current Quarter for all products 100%

Information Package Costs (Cu.)

6 Key Performance Ratios 50,000
7 Efficiency and Activity Ratios 40,000
8 Market Share data 125,000
9 Industry wide Inventory Levels 25,000
10 Comparative Abridged Financial Statements 125,000
Payment Terms in current Qtr 100%

Financial Costs and Data

Maximum Permissible Debt to Equity Ratio 1
Minimum Cash Balance to be maintained at the Quarter end 500,000
Rate of Interest for 3 yr loans are between 13% to 15%
Bank OD interest % p.a. approximately 17% to 19%
Short term rate of interest% on investments approx p.a. 8%
Sharkloan Interest (annual):Number of times CIBOR 4
3 yr term loan processing charges in Cu. 15,000
3 yr term loan foreclosure charges (% on prepayment amount excl EQI) 1%
Maximum Bank OD Limit as % of Total Current Assets at Q0 388,000
Face value of Equity Share 10
Corporate Tax Rate % 25%

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CHANAKYA TRIAL

Business Decision Game Quarter No. 1

Submission @
BVG - HEALTH & WELLNESS INDUSTRY
Decisions Name of Finished Products
MinAqua ZeroCal
Total Production including Contract if any

Domestic Selling Price (Cu)
Procure PC from CM (Max = 1000 units @cu.500; 100% payment)

Fresh Purchase of Water (Units)

Fresh Purchase of Add (Units)

0 A 9

1 B 10

2 C

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CEO's Signature____________

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