10. Cosmos Ltd. sells its products on a gross profit of 20% on sales. The following information is extracted from its annual accounts for the current year ended 31st March, 2014.

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Sales at 3 months credit 40,00,000 Raw materials 12,00,000 Wages paid-average time lag 15 days 9,60,000 Manufacturing expenses paid- one month in arrears 12,00,000 Administration expenses paid-one month in arrears 4,80,000 Sales promotion expenses- payable half-yearly in advance 2,00,000 The company enjoys one month’s credit from the suppliers of raw materials and maintains a 2 month’s stock of raw materials and one-and-half month’s stock of finished goods.

The cash balance is maintained at `1,00,000 as precautionary measures. Assuming 10%

margin, find out the working capital requirement of Cosmos Ltd.