Q.1 Will LIFE Educare Pvt. Ltd. has a tie-up with Bank / Financial Institutions for financing the project?
Yes, LIFE Educare would assist in preparing a Bankable project report and obtaining bank finance as it has a team of professionally qualified team of Chartered Accountants. The detailed business plan prepared by LIFE EDUCARE PVT. LTD., required to be submitted to the Bank for the financing proposal, would be made available to the Trust after signing up of a separate project finance agreement to facilitate the financing of the project, as mutually agreed. However, finance would be available solely on the operational merits of the trust/society.
Q.2 How much investment will be required for LIFE Educare Pvt. Ltd. Project?
The Investment plan will vary according to the model of the school the Trust opts for and the location it chooses. LIFE EDUCARE PVT. LTD. would prepare a separate Project Financial Statements and present before the Trust / Society. Such figures are as per standard business plan and may vary 10% – 15% depending upon architectural design & building layout plans quality and quantity of infrastructure.
Q.3 How much income will be generated in the school project?
With key drives and the parameters remaining as planned in the financial projections (which excludes the cost of land), the school can be expected to have positive cash flow from the end of the third year. Since the capital outlay is spread over a number of years, available surplus thereafter is projected to meet the part of annual capital expenditure in the future years. The actual results may vary depending upon variation in key business parameters viz. school expansion plans, capacity utilization etc. The individual model-wise financial plans are available with LIFE EDUCARE PVT. LTD.
Q.4 Whatever income accrues in the school, will it be tax-free?
The income generated by the non-proprietary and Charitable Trusts, managing the school, is tax-free up to one crore as per prevailing CBDT directives.
Q.5 What would be the cost of the project if we include the land?
The cost of land would vary substantially with location and size of the plot, which could be added to the cost indicated above.
Q.6 What is the time frame to achieve the break-even point?
Under ideal condition, operational expenses are expected to break even in the middle of the second year. These projections are based on the key parameters; the level of activity projected and fee structure. Actual performance and resultant achievement will modify these projections to that extent.