sip project amrita
TRANSCRIPT
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PROJECT REPORT ON
PROJECT FINANCING
OF
M/s A.S. RUBHTECH PVT. LTD
AT
INKWEST MANAGEMENT CONSULTANTS PVT.LTD
PROJECT REPORT SUBMITTED BY:
AMRITA BARDIA
PGPM
UNDER THE GUIDANCE
ORGANISATION GUIDEINTERNAL GUIDE
MR. ATUL $INGH, CFA PROF. KRISHNENDU GHOSH
CONSULTANT FACULTY (FINANCE)
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ACKNOWLEDGEMENT
I take this an opportunity to extend my sincere gratitude to Inkwest Management Consultants for offering me a unique platform to earn
exposure and earn knowledge in the field of finance and learn the day-
to-day activities that are carried out in the company.
I am thankful to Mr. SiddharthaDe (Vice-President),
Mr.KirtiChakraborty (Sr. Consultant)and Mr.N.Sadhukhan (Sr.
Consultant) of Inkwest Management Consultants for helpingand
guidingme to prepare this project report. The project would not have
been possible without constant and timely encouragement from all
concerned.
These 8 weeks have been truly a great learning for me. This project
could never have been completed without the guidance, support and
insights provided by SikhaKedia and Atul Singh. I hereby take this
opportunity to thanks them.
With immense pleasure, I express my deep sense of gratitude and thanks
to my project guide Prof. KrishnenduGhosh, Faculty-Finance, Globsyn
Business School, in addition, for his interest, encouragement and
valuable guidance during the project work.
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CERTIFICATE
This is to certify thatMiss.AmritaBardia , student ofGlobsyn Business
School , Post Graduate Programme in Management has successfully
completed the Project entitled Project Financing of M/s.
A.S.Rubhtechduring Summer Internship Program for the period May-
June 2010 at Inkwest Management Consultants under my proper
guidance.
External GuideInternal Guide
Mr. Atul Singh Prof. KrishnenduGhosh
(CFA)
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DECLARATION
I do hereby declare the project entitledPROJECT FINANCING OFM/S A.S. RUBTECHis submitted as a part of my summer internship
project as a part of the curriculum for Post Graduate Programme In
Management atGlobsyn Business School , Kolkata. I have completed
my Summer Internship Programme at Inkwest Management
Consultantsand all facts and figures provided by me in this project are
correct and true to the best of my knowledge.
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Executive Summary
The main purpose of the project is to understand the concept of Project Financing.To knowunder
what circumstances banks are providing loans i.e. financing term loan and working capitalloan to
small- scale as well as large-scale industries.
The company M/s A.S Rubtech intends to set up a Reclaim/Devulcanized Rubber in Birbhum
District which is promoted by Mr. Deepak Mukherjee and Mr. Anirban Mukherjee. The total
cost of the project is Rs.286 lacs (approx.). The company needs loan of Rs.170 Lacs from
financial institution. The production will start from January, 2012.
Whether the product i.e. Reclaim Rubber will sustain in the market or not for that I have found
out its market demand and future scope. The production process and details of Plant &
Machinery for manufacturing Reclaim Rubber is also included in the project. To understandthe
project capacity I have calculated Capacity Utilization, Power requirement, manpower etc. I have
to make some financial assumptions for companys profitability projections like calculation of
Assessment of Term Loan, Interest and Repayment of Term Loan, Assessment of Working
Capital Loan, Margin & Interest etc.To analyze the financial performance of the firm I have
calculated CMA (Credit Monitoring Analysis) which includes Operating Statement, Analysis of
Balance sheet, Fund FlowStatement, Break Even Analysis, Ratio Analysis, Pay Back Period,
Sensitivity Analysis etc.
On the basis of these analysis it can be said that the company will generate sufficient funds and
will run in profit.And also from the analysis made from thefinancial statements, it may be
concluded that the proposed project is technically feasible and financially viable. It appears to bea Fair Banking Risk.
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Table of Contents
S.L. Topic No.
Chapter-1 Company Profile 9-10
Chapter-2 Project Financing-
Introduction
Characteristics
Methods
Advantages
Disadvantages
11-13
Chapter-3 Introduction of the company(M/s. A.S. Rubtech) 14
Chapter-4 Reclaim Rubber-
DefinitionTypes
Usage
Advantages
15-17
Chapter-5 Products & its Marketability-
Market of Reclaimed Rubber
Demand
Future Scope
Evolving Trend
Marketing Plan
18-19
Chapter-6 Technical Know-how: Production process: Plant & Machinery &
Capacity Utilization-Tyre composition & stages in recycling
Manufacturing Process
Production Process
Sample of Reclaim Rubber Sheet
Process Flow Chart for Rubber Crumb
Process Flow Chart for Reclaim Rubber
Plant Capacity
Capacity Utilization
Plant & Machinery
20-27
Chapter-7 Location, Infrastructure & other Project Cost
Location, land & its advantagesCivil Construction
Plant & Machinery
Electrical Equipments
Miscellaneous Fixed Assets
Preliminary & Pre-operative Expense
28-30
Chapter-8 Cost & sources Of Raw Material: Consumables: Man Power:
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Other Direct Cost--
Raw Material
Consumables
Power & fuel
Manpower Cost
31-33
Chapter-9 Cost Of the Project: Means Of Finance: Implementation
Schedule-
Cost Of the Project
Means of Finance
Implementation Schedule
34-35
Chapter-10 Profitability Projections-
Sale Price
Packing & forwarding Charges
Repair & Maintenance
Other Selling, General & Administrative ExpensesAmortization of Preliminary Expenses
Interest Cost
Holding Period
Depreciation
36-38
Chapter-11 Financial Implications-
Interpretations-
Current Ratio
Debt Equity Ratio
Interest Coverage Ratio
DSCR(Net & Gross)
ROCEPay-Back
Internal Rate of Return
Sensitivity Analysis
39-45
Chapter-12 Swot analysis
Conclusion
Recommendation
Bibliography
46-50
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List of Worksheet & Tables
The other basic assumptions which are made during the Profitability projections are given in the
financial worksheets. The references of those projects are given under:
Item of Revenue & Expenses Reference
Assessment of Term Loan Worksheet I
Interest and Repayment of Term Loan Worksheet II
Assessment of Working Capital Loan, Margin & Interest Worksheet III
Depreciation Schedule & Calculation of Tax Worksheet IV
Other Financial Workings Worksheet V
Various other Projected Financial Statements and the statement showing Financial Implications
and Parameters are given in the following Tables:
FINANCIAL STATEMENT TABLE NO.
Operating Statement 11.1
Projected Balance Sheet 11.2
Ratio Analysis (calculation of DSCR (net & gross), Current Ratio, Debt
Equity Ratio, Return on Capital Employed)
11..3
Pay Back Period 11.3
Fund Flow Statement 11.4
Break Even Analysis 11.5
Sensitivity Analysis 11.6
Internal Rate of Return 11.7
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CHAPTER 1
INKWEST MANAGEMENT CONSULTANTS PVT LTD.
COMPANY PROFILE
Inkwest was established in 1991 by a group of professionals, from the corporate and financial
sectors with the objective of assisting Industrial and Business Enterprises to set up new projects,
develop value, manage risks, and improve performance by leveraging upon their expertise in
various fields. Project Reports, Debt Syndication, Private Equity, Project Advisory, IFRS
Solutions, Taxation etc.
Mr. ParthaSarathi De is the main driving force of the company. Mrs.SunandaSarathi, his wife is
the Director of the company. The other two Directors are Mr. ShekharRanjanBiswas, the former
AGM of Bank of India and Mr. AmitabhaBasu, one of the eminent consultants& Professor of
Calcutta Universityis the outstanding personality.
The present business domain of the Inkwest Management Consultants
Project and Financial Consultancy (like Project Validation, Project Feasibility Study,
End-Use Audit etc.)
Technical / Financial Appraisal (like Detail Project Report, Technical Audit, Pollution
Audit etc.) Tax Consultancy (Tax Review, Valve Added Tax, Service Tax )
Management Consultancy (Management Audit, Internal Audit)
Valuation Services (Valuation of building, Valuation of plant & machinery etc.)
Industrial Consultancy (Govt. Subsidy / Incentives).
The company has served many industries with our valuable services like Agro Based & Food
Processing Industry, Aluminum, Cement, Ceramics, Chemicals & Paints, Clubs, Cold Storage,
Consumables, Engineering & Electricals, Export House, Fertilizer and many more. The company
is working with the team of professionals who have years of experience in project finance &
consultancy which is perfectly tuned to meet the needs of the industries. They have established
long lasting relations with their clients by serving them with valuable services.
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COMPANYS STRENGTHS
Distinguished Board of Directors comprising experienced Bankers & other professionals.
Core Group of Professional Chartered Accountants, Bankers, Engineers, Valuers, CostAccountants.
Branches in Guwahati, Gangtok, & Jaipur.
Associates at Mumbai, Chennai.
The company is one of the famous management consultants which are offering financial and
project consultancy in Kolkata. Some of the clients of the company are Kohinoor Steel Pvt Ltd,
Ankur Group, Burnpur Cement Ltd, Vikash Metals &Ispat Power Pvt Ltd, Vikash Group, BabaIspat, Bengal Energy, Specialty Restaurant etc.
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CHAPTER - 2
PROJECT FINANCING
2.1Introduction
Project financing has become one of the core activities of banks in the recent years. With the
growth in the economy and the revival in the industrial sector coupled with the increasing role of
private players in the field of infrastructure, more and more banks are entering into the project
finance area.
Project financing is the long term financing of industrial projects.Project financing discipline
includes understanding the rationale for the project preparing the financial plan, assessing the
risks, designing the financing mix, and structuring mode of long term funds. Project finance is
different from traditional forms of finance because the financier principally looks to the assets
and revenue of the project in order to secure and service the loan. Usually, a project financing
structure involves a number of equity investors, as well as a syndicate of banks that provide
loans to the operation. The loans are most commonly secured by the project assets and paid
entirely from project cash flow, rather than from the general assets or creditworthiness of the
project sponsors, a decision in part supported by financial modeling.
The requirement of the project financing is depending upon the nature of the business. The
business may be small or large, but the requirement depends on the operating of the cycle of the
business. If the operating cycle is longer the requirement of finance would be longer of the
business.In project finance the important part is arrangement of funds, particularly
implementation of project in time. So that the funds blocked in assets can generate cash
flowwhich will help the company to repay debt on a period of time and march ahead.
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2.2CHARACTERISTICS OF PROJECT FINANCING
a) Large capital costs
b) Long gestation period
c) Assets are not easily transferable
d) Services provided are not tradable
e) Borrowing may be in foreign currency
f) Social aspects involved
g) Vulnerable to regulatory policies
2.3METHODS OF PROJECT FINANCING
There are three Methods in Financing a Project.
a) Cost Share financing or Low interest loan financing
b) Debts Financing
c) Equity Financing
a) Cost Share Financing or Low Interest Loans:Thepotential source of funding we can get is
from state program and public agency sources. Various state agencies in different
countries help industries, entrepreneurs to develop projects by granting subsidies, low
tariffs etc. The advantage to receiving funding is the reduced project cost. The
disadvantages are the time and effort it takes to apply for and receive funding.
b) Debt Financing: The other way to raise money is through debt financing, which is when
the company borrows money. The biggest advantage of debt financing is the ability to
use other peoples money without giving up ownership control. The biggest disadvantage
is the difficulty in obtaining funding for the project. Debt financing usually provides the
option of either a fixed rate loan or a floating rate loan. Floating rate loans are usually
tied to market conditions and interest rate which may rise and fall with economic
conditions whereas fixed rate is fixed over a period of time which is generally bit higher.
c) Equity Financing: The act of raising money for company activities by selling common
or preferred stock to individual or institutional investors. In return for the money paid,
shareholders receive ownership interests in the corporation. In equity financing the cost
of interest burden is not felt. However the promoters do not prefer equity financing in the
long run as because it is become permanent and to be served as the long as the company
survive.
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2.4ADVANTAGES OF PROJECT FINANCING
1. Loan: The typical project financing involves a loan to enable the sponsor to construct a
project where the loan is completely expected to be paid out of revenues generated by the
project. Though the loan is secured by project assets, the financial institutions and bank demandcollaterals by way of Corporate Guarantee or other securities. Each case is judged on its own
merits. In case of very high value loan the risk is shared by a syndicate of financiers.
2. Maximize Leverage: In a project financing, the sponsor typically seeks to finance the costs
of development and construction of the project on a highly leveraged basis. While the sponsor
wants to get as much loan as possible. Every financial institution has its own loan policy and
guide lines for financing a project. It is normally stipulated that Debt-Equity ratio should be 1:3.
However, financial institutions prefer a Debt-Equity ratio 1:2.
3. Off-Balance-Sheet Treatment: Depending upon the structure of a project financing, theproject sponsor may not be required to report any of the project debt on its balance sheet because
such debt is non-recourse or of limited recourse to the sponsor. Off-balance-sheet treatment can
have the added practical benefit of helping the sponsor comply with covenants and restrictions
relating to borrowing funds contained in other indentures and credit agreements to which the
sponsor is a party.
4. Maximize Tax Benefits: Project financings should be structured to maximize tax benefits
and to assure that all available tax benefits are used by the sponsor or transferred, to the extent
permissible, to another party through a partnership, lease or other vehicle.
2.5DISADVANTAGES OF PROJECT FINANCING
Project financings are extremely complex.
It may take a much longer period of time to structure, negotiate and document a project financing
than a traditional financing, and the legal fees and related costs associated with a project
financing can be very high. Because the risks assumed by lenders may be greater in a non-
recourse project financing than in a more traditional financing, the cost of capital may be greater
than with a traditional financing.
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CHAPTER-3
3.1INTRODUCTION OF THE COMPANY (A.S RUBTECH)M/sA.S Rubtech, a unit of A.S Rice Mill Pvt. Ltd. intends to set up a Reclaim/ De-vulcanized
rubber unit in Birbhum District. The company is promoted by Mr. Deepak Mukherjee and Mr.
Anirban Mukherjee who are having an experience of running SSI units for last two decades and
presently running a Rice Mill in the name of M/s A.S Rice Mill Pvt. Ltd., which was
incorporated on 2nd June, 2005 as a private limited company under the Companies Act 1956 to
manufacture Rice Products. The Company will start its production next year i.e. January, 2012.
M/S A.S Rubtech has been registered as SSI at DIC, Birbhum. The Company has also obtained
necessary approvals from Gram Panchayat and West Bengal Pollution Control Board for setting
up the Reclaim Unit.
The company intends to produce Reclaim/ Devulcanized Rubber which will be used as a
substitute of Natural & Synthetic Rubber. The Reclaimed Rubber is the recycled old tyre rubber.
It is used as a substitute of Natural & Synthetic Rubber.
The reclaim rubber industry in India is a heterogeneous mix of small and medium scale
manufacturers in the organized and unorganized sectors. Today through steady growth and a
strong vision,many organizations has emerged as the leading manufacturers of reclaim rubber in
the country. Some of the companies are namely Gujarat Reclaim, ELGI Group, Balaji Group,
and Swani Group etc.It will be the first unit in Bengal, till date Bengal is dependent on other
states and imports for Reclaim/Devulcanised Rubber, now it will produce its own. The easy
availability of material has promoted the promoters to take up reclaim production.
With more than 33 million vehicles added to the Indian roads in last three years. About 80
million tyres are a part of these 33 million vehicles, which pose a potential threat to the
environment. With the rapidly growing vehicles wastage is also increasing. Since tyres and tubes
have a limited life cycle, enormous quantities are generated all over the country. Being non-
perishable and non-bio-degradable, it remains in dumps for years unless removed or disposed
off. This can become a breeding paradise for insects and mosquitoes, spreading diseases in the
area. It becomes a constant source of fire and can be a big threat to human life. In fact, in
developed nations, the problem of disposing off scrap tyres is still largely an unsolved issue. The
most important recovery procedure is the process of recycling of scrapped tyres, tubes and other
such rubber products. However, the industry hasinnovated ways and means to curb this menace
by manufacturing reclaim rubber and using them in a variety of applications.
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CHAPTER- 4
RECLAIM RUBBER
4.1Definition
The Reclaimed Rubber is the recycled old tyre rubber. Increasing quantities of old used Tyres &
Scrap Tyres wastes are really a big problem for each & every country. These problems can be
addressed by recycling to produce new products
Reclaimed rubber is the product resulting from the treatment of ground vulcanized scrap rubber
tires, tubes and miscellaneous waste rubber articles by the application of heat and chemical
agents, followed by intense mechanical working. It is mixed with virgin rubber to further make
new tyres of automobiles, bicycles and other low cost products .Reclaimed rubber is mostly used
in making of tyres, rubber sheets, tiles, mats and tubeless tyres etc.It is used as a substitute of
Natural & Synthetic Rubber
As there is a severe rise in the price of natural rubber, Reclaim Rubber has become the most
viable alternative.(the cost of natural rubber is Rs 200-250/kg).But usage of Reclaim Rubber is
more economical (as it costs Rs 40/kg) which is very cheap in compared to natural rubber. So
Reclaim Rubber is very potential business-as it is both profitable and eco-friendly as well as
control pollution.
Companies like Gujarat Reclaim and Rubber Products Ltd, Swani Rubber Industriesetc.produces reclaim rubber from scrap of whole tyres; tread peelings, natural rubber tubes, butyl
tubes, and coloured rubber products etc. for different applications both for tyres and non tyres
rubber products. Since rubber content of tyres produced in India has almost 75% natural rubber,
reclaim from India has its own special characteristics. Raksha Reclamations Companyengaged in
manufacturing of Reclaim Rubber and Rubber Crumb based at Ludhiana, India.
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4.2TYPES OF RECLAIM RUBBER
Density
Mg/m3Approximate
RHC%
Whole Tyre 1.16-1.22 48
Whole Tyre Nonstaining
Grade1.16-1.21 45
Whole Tyre Modified 1.20-1.25 45
Inner Tube-Natural Black 1.18-1.20 58
Inner Tube Butyl 1.16 55
Neoprene 1.36 54
Natural Rubber (coloredreclaim)
1.30 55
Density Assumed RHC%
1.17 - 1.19 50
1.20 - 1.25 45
1.25 - 1.30 40
4.3MAJOR UASGE OF RECLAIM RUBBER
y It acts as an agent for savings in energy and compound cost.
y Fast and uniform processing at very low temperature which in turn reduces power
consumption.
y The raw material rubber scrap, is not dumped or burnt but re-used to form Reclaim
Rubber which makes it eco-friend
y Use in Passenger Tire Carcass.
y In extruded and calendared products.y In products such tiles for laying pedestrian concrete areas, Animal mats used in stables,
Insulation tiles used in metro railways for reducing the noise level etc.
y Inner Tubes: - A moderate proportion of butyl reclaim is used in butyl inner tubes.
y Tubeless Tire Liners: - Butyl reclaimed rubber is used widely because of its good air
retention property.
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4.4RELATIVE ADVANTAGES OF RECLAIM RUBBER
y The price of Reclaim Rubber is relatively cheap.y Low power consumption during breakdown and mixing.
y Fast uniform calendering and extrusion;
y Improved building tack
y Improved green strength and firming of uncured stocks
y Reduced swelling and shrinkage during extrusion
y Low mixing, calendering, and extrusion temperatures.
y Another advantage with Reclaim rubber use is its homogeneity of composition and very
important reduction and removal of wastes from the environment.
y Low Thermo plasticity. Due to the cross linked structure of reclaimed rubber, itscompounds are less thermoplastic than virgin rubber compounds and therefore when
extruded and cured in open stream, they tend to hold their shape better
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CHAPTER- 5
PRODUCT AND ITS MARKETABILITY
5.1MARKET OF RECLAIM RUBBER IN INDIA
India is the third largest producer, fourth largest consumer of natural rubber and fifth largest
consumer of natural rubber and synthetic rubber together in the world. Besides, India is the
world's largest manufacturer of reclaim rubber.In India Gujarat Reclaim & Rubber Products Pvt
Ltd Company is the largest producer of reclaim rubber. Out of the 86,390 metric tones of
reclaimed rubber produced in India in the year ended 2009, GRRPL produced 38,206 metric
tones of reclaimed rubber which suggests a market share of 44% making it the largest player in
this space. It is estimated that Consumption of reclaim rubber is - 63,095 tonnes .Some of the
leading manufacturers of reclaim rubber are like Raksha Reclamations, Swani Rubber Industries,
and MV Enterprises etc.Raksha Reclamations is known for his best quality of reclaim rubber and
rubber crumb.
There is no defined market in India as such; but any market can be targeted, for example: Play
Schools, Sports Grounds, Gyms, Shoe industries etc. all over India can be targeted for flooring
and mats. Cement industry uses rubber as a fuel. Recycled tyre rubber can also be used in road
construction and road furniture etc.
5.2DEMAND OF RECLAIM RUBBER IN INDIA
Demand for reclaimed rubber is directly proportionate to prices of natural and synthetic rubber.
Since rubber prices are at historical highs it has increased the industrys preference for alternate
sources thus reclaimed rubber. Any country with a big automobile market domestically will have
reclaim rubber units. Reclaim can be produce in greater quantities at lower cost as the labour cost
is cheap so it is in high demand in the market.Growing auto sales in India is driving investment
from tire manufacturers towards increasing capacity to service the additional demand. 50% of the
rubber consumption in India is from tyre manufacturers. Currently they are highly dependent on
natural and synthetic rubber which is set to change as their availability gets tighter and prices ofraw materials go higher.Beside, India is the largest manufacturer of Reclaim rubber.India is
standing in the fourth position in the production of rubber and 35 thousand varieties of rubber
products from 6 thousand industries. The usage of reclaimed rubber is 6-8%. The rubber
production is 86,390 tones for 2008-09. It is increasing from 8-10%.Shoe Industries and other
Rubber Industries has a high demand of reclaim rubber for manufacturing varieties of rubber
products.
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5.3Future Scope
As the price of natural rubber has been increasing reclaim rubber business will be very
profitable. The number of vehicles hitting the roads is increasing every day and so is the number
of tyres. There is a business opportunity up for grabs and its in recycling them (with more than
33 million vehicles added to the Indian roads in last three years) . With the right initiatives taken
by the government, there is a possibility of 50-100 percent growth of this industry including
export options (of the good quality reclaimed rubber. Statistics project a mammoth potential
increase upwards of Rs1.13 billion in the industry. Reclaimed rubber can be exported to
countries like America, Japan, Malaysia, Germany, France, Spain and Brazil.
5.4An evolving trend
In the early 50s, developednations mainly USA, Canada and few countries in Europe were the
leading manufacturers of rubber goods including tyres. Natural rubber was sourced from farEastern Countries. And these developed countries built extensive capacities of reclaim rubber to
meet requirements. Gradually, however, the trend reversed - developing Asian countries saw a
sharp growth in manufacturing of reclaim rubber and rubber products.
As the earth goes increasingly fragile, the need to counter potential hazards of environmental
degradation caused by waste tyres has risen more than ever. This is a perfect opportunity for the
reclaim process and rubber products to carve a niche for itself.
5.5Marketing plan of Reclaimed Rubber
The company has contacted with the local customers who are using these products in West
Bengal as well as to theparties outside West Bengal.
Presently the local companies are purchasing reclaim rubber from outside West Bengal mainly
from Gujarat, Punjab,Kerelaetc. Now these companies will buy Reclaim Rubber from M/S A.S
Rubtech for ease availability.
The landed cost of reclaim rubber procured from outside West Bengal goes up with the
transportation cost registering steep rise in petrol/diesel price. The user industry in West Bengal
will be benefited with the local manufacturer of reclaim rubber because of lower inventory cost
and lower purchase price. For this reason the demand will also increase day by day.
In view of growing demand of Reclaim rubber due to steep price hike of Natural rubber it is that
the company will not face any marketing problem of its proposed product.
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CHAPTER- 6
TECHNICAL KNOW-HOW: PRODUCTION PROCESS: PLANT &MACHINERY: CAPACITY OF THE UNIT & CAPACITY
UTILIZATION
6.1TYRE COMPOSITION AND STAGES IN RECYCLING
A tyre is made of natural rubber (also called virgin rubber), Styrene-Butadiene Rubber (SBR),
Polybutadiene Rubber (PBR), Carbon black, Nylon tyre cord, rubber chemicals, steel tyre cord
and Butyl rubber.
There are two stages in recycling:-
1. Crumb:Crumb rubber is a term usually applied to recycled rubber from automotive and
truck scrap tires.It is resulting from granulating scrap tyres into uniform rubber granules.
2. Reclaimed Rubber: It is the recycled old tyre rubber. It is used as a substitute of Natural
& Synthetic Rubber.
The reclaimed rubber products are made from scrap and waste tyres. Which is normally ground
and is then treated with the application of heat, chemical peptizers and is then intensely worked
mechanically to partially devulcanize (depolymerize) the rubber component. This partially
devulcanized product is commonly called reclaimed rubber.
During reclamation, the molecular weight of the elastomeric, component is substantially reduced
however the chemical unsaturation of finished reclaims is essentially unchanged from that of the
original vulcanized scrap.
6.2Manufacturing Process
The conventional rubber reclaiming process can be divided into three major parts, preparation,
breakdown, and refining. The preparation steps are: sorting of the scrap rubber articles, crackingor grinding, sifting, magnetic separation, and in-process storage. Breakdown is also called
devulcanization and depolymerization and is commonly accomplished by either the following
Processes:
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I. Pan Method
II. Wet Digestor Method
III. Reclamations Method
Pan or heaterMethod:It is the oldest and highly labor-intensive and causes huge water and airpollution. Any fiber present is separated mechanically and the ground fabric free scrap is blended
with reclaiming agents. The same is fed into large horizontal single-shell heater. After
devulcanisation, the heater cakes are removed, broken up, milled and refined. The temperature
range employed during reclamation is 170-210 degree C, for a period of 4-12 hours.
Wet DigestorMethod:The coarsely ground scrap mixed with reclaiming and defibering agents
and a large excess of water is heated in a digester. After discharge, the devulcanized rubber is
washed, dewatered, dried and blended with processing agents such as oil, refined, strained and
packed.
Reclamations Method:It is a very costly method and is only used for very large-scale
production. None of the Indian firms use this method. The minuterprocesses include mechanical
shredding, mixing, pressing, pyrolysis, etc. The temperature range employed during reclamation
is 204-260degree Celsius, for a period of 1-4 minutes.
Out of the above mentioned process the company will be using the Wet Digester Process. This
process is the oldest method but also at the same time this method is the easiest way of
manufacturing the Reclaimed Rubber. The Detailed Process of this method has been mentioned
as below:
6.3The production process as explained below:
Stage- I
In this stage the company will produce the Rubber Crumb for which the following levels are
required:
LEVEL 1
The starting point for material preparation is by cutting the tyre into small pieces of 6-12 inches
with the help of Tyre Cutting machine.
LEVEL 2
Shredding and chipping the tyre to produce material +-500mm that is irregularly shaped or
equidimensional in a CRACKER MILL.
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LEVEL 3
Ambient grinding takes place at or above normal room temperature. The +-50mm chips are
grinded to 20 mesh. The impurities and textiles/fibre are sequentially separated out, the metals
are magnetically separated out during the granulation process. The material passes through a
series of screens and shifting stations to remove the final vestiges of impurities and ensure
consistency of size. During the final phase, the textile residues are removed by air separators.
The above mentioned process would be done in 1st shifts, which will produce 80% Rubber
Crumb, 10% Fibers & 10% Unusable Wastages. The Rubber Crumb further will be processed for
the production of Reclaim Rubber.
Stage-2
The production of Reclaimed Rubber involves following steps:
STEP-1
The starting point for material preparation is by cutting the tyre in small pieces of 8-12 inches
with the help of Tyre Cutting machine.
STEP-2
The material is refined in the refiner mills and is finally made in to sheets.
The above mentioned process would be done in next 2 shifts, which would give Rubber Sheet.
6.4SAMPLE OF RECLAIM RUBBER SHEET
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6.6Process Flow Chart for Reclaim Rubber
6.7Plant Capacity
AUTO
CLAVE
PRE-
REFINER
EXTRUDER
REFINER
FINAL
PRODUCT
PROCESSOIL
&
RECLAIMING
AGENT
RUBBERCRUMB
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Calculation of capacity of First Stage Rubber Crumb
Operation Machine Type Activity Capacity
Cutting operation Tyre Cutter Rubber Cutting with
Manual Operation
1500Kgs/hr
Shredding andChipping Operation
Cracker(18*18*30) 1200Kg/hr
Grinding Operation Grinder
Mill(24*24*36)
1100Kg/hr
Out of the above mentioned machines the minimum input capacity of the rubber crumb section is
1100 kgs/hr.
6.8Capacity calculation of Rubber Crumb Section
Total processing time required per shift (hrs) 8 No. of shift per day 1
Total processing time required per day (hrs/day) 8
Maximum Section capacity of Rubber (kg/hr) 1100
Total Input (tons/day) 8.8
No of days per annum 300
Total input(tons/annum) 2640
With the help of Magnetic Separator and Air Classifier the output will be segregated in 80%Rubber Crumb, 10% Fiber and 10% Unusable Wastage.
Output Generated Tons/day
Rubber Crumb (80%) 2112
Fibre (10%) 264
Unusable wastage (10%) 264
Total Output 2640
6.9Calculation of the capacity of Second Stage Reclaimed Rubber
Capacity of Auto Calve MachineBatch Quantity (in tons) 2.5
Processing time per batch 5
Total available time for 2 shifts 15 No. of batches
Total quantity produced per day (tons/day) 7.5
No.of days p.a
Total quantity produced per day (tons/annum) 2250
Different Machines used in Capacity Total capacity
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Reclaimed Section (Tons/annum
Auto clave 2.5 tons/batch 2250
Pre-Refiner 1200 kg/hr 5760
Extruder 1200 kg/hr 5760
Refiners 1100 kg/hr 5280
Out of the above mentioned machines the minimum capacity of the Reclaimed section is 2250
tons per annum
6.10Total Production of Reclaimed Rubber
Rubber Crumb p.a. (in Ton) 2112
Rubber processing Oil (in Ton) 35.35
(18 Liters Per Ton)
(1 Liter = 0.93 Kg)
Chemicals (in Ton) 17.11
(8.1 Kg per Ton)
Total Input Available p.a 2164.46
Soluble Waste(2.5% of input) 54.11
Output (in Ton) Per Annum 2110.00
6.11Finished Goods
Reclaimed Rubber 2110 ton (Main product)Fibre 264 ton (Bi-Product)
6.12 Capacity Utilization
Projected
Year
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Months 3 12 12 12 12 12
Capacity
Utilization
60% 65% 70% 75% 80% 80%
6.13Plant & Machinery
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Theplant comprises different machineries by which finished goods can be prepared. The total
project Cost of the unit is Rs.286 lacs. The total cost of Plant & Machinery is Rs.175 Lacs
(approx). which is 61% of the total cost of the project. Since it holds the major cost of the project
the directors of the company has purchased those plant & machinery from reputed suppliers.
They hired technical consultants for selecting the most suitable machine suppliers as per their
requirement. The details of Plant & Machinery with their respective suppliers are given below:
Particulars Total Amt(Rs.in lacs) Suppliers nameRubber Crumb
RoratryTyre Cutter 2.56 Anant Engineering Works
Wheel Cutter 2.56 Anant Engineering Works
Cracker Mill 9.99 Anant Engineering Works
Grinder Mill 19.22 Anant Engineering Works
Air Separator 3.13 FosbergAgritech
Round Seive 2.61 DhananjoyDey& Co.Automation 12.40 Surya Metals
Magnatic Separator 4.23 Electro Magnetic Industies
Sub-Total 56.72
Reclaim Process
Auto Clave 18.81 Pionner Trans Trade Pvt. Ltd.
Thermic fluid heater 9.41 Sphulingo
Oil Pipeline & Furnace Work 0.97 Vivek Engineers
Pre-Refiner 26.14 Zorex Exim Pvt. Ltd.
Kneader 14.15 Ravi Engineering Works
Strainer/Extruder 6.41 Zorex Exim Pvt. Ltd.
Refiner 39.47 Zorex Exim Pvt. Ltd.Automation 3.14 DhananjoyDey& Co.
Sub-Total 118.49
Total Cost 175.21
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CHAPTER- 7
LOCATION, INFRASTRUCTURE& OTHER PROJECT COST
7.1Land, Location & its Advantages
The director is having around 5 acres of existing land out of which round about 2.5 to 3 Acres of
land have been used by them for their existing rice mill. The existing land is located at Birbhum
and the proposed unit is just adjacent to the rice mill. It is just beside NH-60 through a
connecting road, which is connecting the land from Panagarh to Moregram.
As a result the movement of raw material and distribution of finished products to the customerswill be easy and smooth. Required Manpower will be easily available. Raw materials can be
easily available from Panagarh, which is a hub for second hand automobile parts and is military
base where several heavy vehicles are auctioned and huge waste tyres are generated.
7.2Civil Construction
The civil construction of land includes land development cost, foundation work, shed etc. The
total cost of civil construction is Rs.25.84 Lacs of which the details are as follows:
Sl.
No.
Particulars Amount
(Rs./ Lacs)
1 G.I Shed & Toilet Block 21.61
2 Foundation Work 1.40
3 Land Development Cost 2.83
Total 25.84
7.3Plant & Machinery
Theplant comprises different machineries by which finished goods can be prepared. The total
estimated cost of Plant & Machinery is Rs.175 Lacs (approx) which holds the major cost of the
project. The detailed cost of Plant & Machinery has been mentioned before.
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7.4Electrical Equipments
Electrical Equipments relates to D.G Set of 320 KVA, Cabling, Starter, Capacitor Panel etc. Thetotal electrical cost is Rs.33.72 Lacs and the details of this cost has been shown below along with
the name of its suppliers:
Sl. Particulars Total Amount Suppliers
No. (Rs. in Lacs) Name
1 D.G.Set 320 KVA 17.78 Visalaxmi Mill Stores
2 Electrical Supply, Cabling, Starter 6.93 J K Electro Power
3 Electrical Supply, Cabling, Starter 0.14 SS Electrogrip
4 Electrical Supply, Cabling, Starter 7.45 SS Electrogrip
5 Capacitor Panel 1.94 Bengal Machinery Corp.Sub-Total 33.24
7.5Miscellaneous Fixed Assets
The Miscellaneous Fixed Assets relates to CCTV, Surveillance Camera, Water Boring, Pollution
Equipments, Mounting Pads, LaboratoryEquipments etc. A total sum of Rs.12.28 Lacs and the
details of it are as mentioned below:
Sl. Particulars Total Amount Suppliers
No. (Rs. in Lacs)
1 CC TV, Surveillance Camera 1.82 Comptronic Solutions
2 Mounting Pads 1.73 Dynemech Vibro Systems
3 Pollution Equipment 5.23 DhananjoyDey& Co.
4 Water Boring 0.50 -
5 Laboratory Equipment 3.00 -
Sub-Total 12.28 -
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7.6Preliminary and Pre-operative Expenses
Preliminary & preoperative expense relates to the interest of term loan during the
implementation period, legal and statutory fees including ROC fees and Other Miscellaneous
Expenses like traveling & conveyance, other Administration expenses during construction etc.
An amount of Rs.11.10Lacs has been considered under the head of preliminary & preoperative
expenses for this and the same will be written off in 5 annual equal installments, break up which
is shown below:
Particulars Amount
Bank Loan Processing Fees (0.5% of the loan amount) 1.10
Interest on Term Loan during Implementation Period 8.50(Rs.170.00 Lacs X 15% X 8 Months X 50%)
Legal & Consultancy Charges 0.50
Other Misc. Expenses 1.00
Total 11.10
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CHAPTER- 8
COST & SOURCES OF RAW MATERIAL CONSUMABLES:MANPOWER: OTHER DIRECT COST
8.1Raw Materials
The raw material required for the mill will be sourced from retenders of tyres and tyre scrap
dealers in and around the site. Other than these waste tyres can be easily available from 5 main
Black Stone Chips Crushers and Mining Belt i.e. Nalhati etc. Which is within 50 kmsfrom the
industry area. Raw materials can be easily available from Panagarh, which is a hub for second
hand automobile parts and is military base where several heavy vehicles are auctioned and huge
waste tyres are generated
The main raw material required for the production of the Reclaimed Rubber is waste tyres. The
cost of these waste tyres is on average Rs.6000 per Ton.
8.2Consumables
The consumables require for reclaim rubber are Chemicals, Rubber Processing Oil, Lubricating
Oil, Greece, Belt etc. All these items are locally available at a reasonable price.
Consumables Rate/ Ton
Rubber processing oil 65000.00
Chemicals 165000.00
Other Consumables like
Lubricating Oil, Greeceetc.
200.00
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8.3Power & Fuel
The total connected load of power required for the project is 320 KVA.
Cost of power has been computed on the basis of connected load and minimum demand chargeand energy rate.In case of load shedding or power failure the company will also keep 320 KVA
Generator as stand-by arrangement.Cost of Power & Fuel has been computed as follows:
Electricity (Power)
Connected Load (KVA) 310
Power Factor 0.80
Load Factor 0.60
No. of Shifts per Day 3
Total No. of Hours Run per Day 20
No. of Working Days per annum 300
No. of Units Consumed (kwh) 892800
Rate per Unit (Rs./kwh) 6.00
Total Unit Charge (Rs./ Lacs) 55.57
Minimum Demand Charge(Rs.180/Month/KVA) (Rs./Lacs)
6.70
Total Power Charge (Rs./ Lacs) 60.26
Fuel
Capacity (KVA) 320 KVA 320Fuel Consumption per Hour (Litres) 42
No of hours run on gen set(hrs) 4
Working days per annum 300
Total Fuel Consumptions per annum (Litres) 50400
Fuel cost (Rs. per Litre) 42.00
Total Fuel Cost (Rs./ Lacs) 21.17
Capacity Utilization 60% 65% 70% 75% 80% 80%
Energy Charges 8.04 32.82 37.50 40.18 42.85 42.85
Minimum Demand Charges 1.67 6.70 6.70 6.70 6.70 6.70
Fuel Charges 3.18 13.76 14.82 15.88 16.93 16.93
Total 12.88 55.27 50.01 62.75 66.48 66.48
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8.4Man power cost
The salary structure of the workers and employees will be decided by the management. The
detailed manpower requirement and their cost are given below:
PostNo. of Salary/ Month Salary/Annum
Employees (Rs.) (Rs. in Lacs)
Direct Labour
Skilled Labour 6 6,500.00 4.6
Un-Skilled Labour 15 3,500.00 6.3
Indirect labour
Factory Manager 1 10,000.00 1.20
Supervisor 3 5,500.00 1.98
Accountant 1 10,000.00 1.20
Office Assistant 1 5,500.00 0.66Sub-Total 27 16.02
Add: Benefits @20% 3.20
Total Salary 19.22
NOTE: 5% annual increase in the subsequent years.
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CHAPTER- 9
COST OF THE PROJECT: MEANS OF FINANCE:IMPLEMENTATION SCHEDULE
9.1Cost of the Project
The detailed cost of the proposed Reclaim Rubber Project has been assessed at Rs.287.00 Lacs
as shown below:
Cost of the Project
Sl. Particulars Amount
No (Rs./Lacs)
1 Land (Existing) (29 Decimal) 0.00
2 Civil Construction 25.84
3 Plant & Machinery 175.21
4 Electrical Equipments 34.24
5 Miscellaneous Fixed Assets 12.28
6 Provision for Contingency 7.43
7 Preliminary & Preoperative Expenses 11.10
Capital Cost of the Project 266.09
8 Margin for Working Capital & Bank Guarantee 19.46
Total Cost of the Project 285.55
Total Cost of the Project 286.00
9.2Means of Finance
The above project cost is proposed to be financed as under:
Items Amount
(Rs./ Lacs)
Equity/ Promoters' Contribution
For Term Loan 96.09
For WCL 19.46 155.55
Term Loan from Bank 170.00
Total 285.55
Debt Equity Ratio (Without WCL Margin) 1.77
Debt Equity Ratio (With WCL Margin) 1.47
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9.3Schedule of Implementation
The promoters have decided to implement the project as stated hereunder:
Sl.
No.
Date of
Commencement
Expected date
of Completion
1 Acquisition of Land Already Acquired
2 Development of Land Completed
3 Civil works for Factory Building,
Machinery foundation, Administrative
Building.
Started June, 2011
4 Plant & Machinery June, 2011 August, 2011
5 Arrangement of Power April, 2011 June, 2011
6 Erection of Equipment August, 2011 September, 2011
7 Commissioning October, 2011 November, 2011
8 Initial Procurement of Raw Materials November, 2011
9 Trial Runs December, 2011 December, 2011
10 Commercial Production January, 2012
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CHAPTER-10
DIFFERENT ASSUMPTIONS MADE DURING PROFITABILITYPROJECTIONS
The various assumptions are made for Profitability projections are given below:
10.1Sale Price
The selling price of Reclaimed Rubber and Fibre are given below:
Finished Goods Rate/ Ton (Rs.)
Reclaimed Rubber 27000.00
Fibre 2000.00
10.2Packing & Forwarding Charges
The company is considering 3% of total sales as packing & forwarding charges which appears to
be reasonable. They are required to sell their finished products to industrial consumers located in
far away places in West Bengal and other consuming industries located outside West Bengal as
such the packing & forwarding charges is considerably high. The company also considered
0.5%of Plant & Machinery cost price for packing charges.
10.3Repair & Maintenance
Repair & maintenance expenses have been considered @5% of the asset value. From the year
2013-14, annually 10% increase has been envisaged in order to account for the wear and tear of
the machinery for increased use.
10.4Other Selling, General & Administrative Expenses
Other selling, general & administrative expenses have been considered @7.5% of gross sales of
Reclaimed Rubber. The selling expenses include commission & brokerage on sales, traveling
expenses, salespromotion expenses, staff welfare expenses etc.
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10.5Amortization of Preliminary Expenses
It has been assumed that Preliminary & pre-operative expenses for the renovation of the factory
will be amortized equally in consecutive 5 years.
10.6Interest Cost
Interest on Term Loan has been computed @15.00% p.a. Interest on Fund-based Working
Capital Loan has been computed @15.00% p.a. and Bank Charges on Non Fund-based Working
Capital Loan i.e. on Bank Guarantee has been computed at the rate of 2% p.a.
10.7Holding Period
For ascertain the working capital requirement the following holding period has been considered:
Items Period
Stock of Raw Material 1.75 Months
Stock of Consumables 1.5 Months
Stocks of Finished Goods 0.5 Month
Debtors / Bills Receivables 1.25 Months
Creditors 0.25 Month
10.8Depreciation
Depreciation of the fixed assets has been considered as follows:
Items Depreciation Rate as
per Companies Act
Depreciation Rate as
per Income Tax Act
Factory Building & Civil Works 3.34% p.a. 10% p.a.
Plant & Machinery 7.42% p.a. 15% p.a.
Electrical Installations 7.07% p.a. 10% p.a.
Miscellaneous Fixed Assets 10% p.a. 15% p.a.
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The above assumptions and some other basic assumptions are made during the profitability
projection for the proposed project are given in the financial worksheet.
The references of those assumptions are as under: -
Item of Revenue & Expenses Reference
Assessment of Term Loan Worksheet I
Interest and Repayment of Term Loan Worksheet II
Assessment of Working Capital Loan, Margin & Interest Worksheet III
Depreciation Schedule & Calculation of Tax Worksheet IV
Other Financial Workings Worksheet V
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CHAPTER-11
FINANCIAL IMPLICATIONSAnalysis of financial statements helps to analyze the financial performance of a firm. It analyses
the short- term liquidity position of a firm to a comprehensive assessment of the strength and
weakness of the firm in various areas.
Various other Projected Financial Statement and the statement of showing Financial Implication
and Parameters are given in the following Tables: -
FINANCIAL STATEMENT TABLE NO.
Operating Statement 11.1
Projected Balance Sheet 11.2
Ratio Analysis (calculation of DSCR (net & gross), Interest Coverage
Ratio, Current Ratio. Debt Equity Ratio, Return on Capital Employed)
11..3
Pay Back Period 11.3
Fund Flow Statement 11.4
Break Even Analysis 11.5
Sensibility Analysis 11.6
Internal Rate of Return 11.7
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11.9 INTERPRETATIONS
Current Ratio
An ideal currrent ratio is 1.33:1 and is considered by the banks as minimum acceptable level for
providing woking capital fianace. Current Ratio measures the solvency of the company in short-
term.
In the year 2011-12 the current ratio is 1.11:1 indicates that company is not in solvent position as
the firms have not earned desirable profit. But in the year 2012-13 the current ratio of the firm is1.59:1 which is increased from previous year. It indicates the highly solvent position of the
company. The above chart shows an increasing trend of current ratio which indicates that the
companys solvency is growing and the companys profitability is encouraging.
1.11
1.51 1.591.74
1.92
2.88
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
current ratio
current ratio
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Debt-Equity Ratio
Ideal Debt Equity ratio is 2:1.Debt-Equity ratio indicates the relationship between outside
liabilities and net worth of the company. Here the above graph shows a decreasing trend of debt-
equity ratio of projected years. It shows that the proportion of debt to equity is low so the
company is said to be low-geared company. Higher the ratio greater is the risk to the creditors.
Here the creditors will not face any risk. The company has the ability to pay all its
debts.Thecompany has a small amount of loan capital compared to shareholders equity. It shows
highly solvent position of the company and the company will run profitably in the future.
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
1.12
0.61
0.3
0.110 0
Debt Equity Ratio
Debt Equity Ratio
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Debt Service Coverage Ratio (Net)
Debt Service Coverage ratio (DSCR), one of the leverage / coverage ratios, calculated in order to
know the cash profit availability to repay the debt including interest. The ideal DSCR ratio is
2:1.In the year 2011-12 companys DSCR has not been considered as there is no repayment
obligation. But in the projected year DSCR is seen to be increased which means company not
only serving the debt obligations but also has the ability to pay the dividends if it declares. It
shows the highly solvent position of the company.
Debt Service Coverage Ratio(Gross)
0.00
2.873.18
2.592.85 2.88
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Annual DSCR
Annual DSCR
3.33
2.022.30
2.16
2.512.75
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Debt Service Coverage Ratio(Gross)
Debt Service Coverage Ratio(Gross)
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Gross DSCR includes interest payment obligations also. It is taken both as a source of earning
and payment obligation. The ideal DSCR (Gross)is 1.75:1. The above graph indicates an increasing
trend of DSCR(Gross) which shows that the income generated by the company is sufficient to cover all its
debts.
Return on Capital Employed
Return on Capital Employed (ROCE) is a measuring tool that measures the efficiency and profitability of capital investments undertaken by a firm. Here the above graph shows an
increasing trend of ROCE which means that the company is earning sufficient revenues and
profits in order to make the best use of its capital assets.
Pay Back Period
The paybackperiod is another method to evaluate an investment project. The payback period is
the time taken to recover the initial investment. The company payback period is 36 months i.e. it
will take 3 years to recover its initial investment. The company will take short time to cover all
its initial cost i.e. more quickly the cost of an investment can be recovered, the more desirable is
the investment.
4
20.56 21.14 21.24 20.95
17.45
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Return on Capital Employed(%)
Return on Capital Employed(%)
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Internal Rate Of Return
Internal rate of return (IRR) is a rate of return on an investment. Higher a project's internal rate
of return, the more desirable it is to undertake the project. The IRR of the company is 24.75 say
25 % approx. which is greater than interest rate set at 15%. So it can be said that project is
acceptable and feasible.
Sensitivity Analysis
Sensitivity Analysis reflects the ability of the company to remain profitable despite market
fluctuations under 3 different circumstances namely:
y Reduction in Sale price
y Increase the cost of Raw Material
y Reduction of Capacity Utilization
These 3 states indicate the profitability and stability of the company under strains of market
conditions.
When the sale price is decrease by 5%, the income is also gets reduce. But the DSCR(average) is
1.93:1 which is above the acceptable benchmark of 1.5. Even the income is reduced the company
has the ability to pay all its debts which shows that company will run in profit. There will be no
adverse effect if the sale price of products will reduce by 5% in future.
When the in the price of raw material increases by 5% in the market, the cost of the company
also increases. But the DSCR (average) of the company is 2.20:1. The ideal DSCR ratio is 2:1.
Even if the price of raw material and cost of the company increases there will be no effect in
companys profitability. It indicates that company has enough funds to all pay all its debts.It
shows the highly solvent state of the company.
When the capacity is reduce by 5%, the production of goods is also reducing. Similarly the profit
will also reduce. But the average DSCR after reduction is 2.13:1 which is a very good ratio for
the company. It indicates the highly solvent position of the company.
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CHAPTER-12
SWOT ANALYSIS
Strength WeaknessThe Promoters of technocrats have experience
over two decades of running industrial units,though on a small scale.
As there are many competitive firms like
Gujarat Reclaim, RakshaReclaimations etc. itwill difficult for the industry to sustain in the
market.
Natural rubberwas used to make rubber andsynthetic rubber products. With the severe rise
in the price of Natural Rubber (i.e. Rs.250/kg)
Reclaim Rubber has become the most viablealternative.
The price reclaim rubber is sensitive to swingin price of natural rubber.
The raw material rubber scrap, is not dumped
or burnt but re-used to form Reclaim Rubberwhich makes it eco-friendly.
The growth of reclaim rubber is absolutely
linked with the growth of other rubberindustries.
Fast and uniform processing at very low
temperature which in turn reduces powerconsumption(i.e. save energy)
The price of Reclaim Rubber in market isRs.40/kg which is relatively cheap in compared
to Natural Rubber which is Rs.250/kg.
The raw material and labour cost is cheap.It will be the first unit in Bengal, till dateBengal is dependent on other states and
imports for Reclaim/Devulcanised Rubber,now it will produce its own and can supply to
different states.
The initial costs of recycled rubber products
are less expensive than traditional products.
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Opportunities ThreatsAs reclaim rubber is made up of scrap and
waste tyres, and number of vehicles are alsoincreasing day to day so sufficient volume of
scrap can be generated which can lead anopportunity to produce large quantity of
Reclaim Rubbers.
Many industries are now focusing on sales of
synthetic rubber which command higher valuecompared to reclaimed rubber. Customer
preference will determine the market.
As the company is intended to set up Reclaim
Rubber unit so there is an opportunity ofemployment.
The important challenge in marketing area that
reclaim rubber is facing is to improve the levelof quality performance of the products.
As the price of raw material is cheap is it cangrab the rubber market quickly.
As this is a new unit it has to compete withdominant, established players.
The Industry belongs to Organized Sector as itin a company form and registered.
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Conclusion
Increasing quantities of old used Tyres & Scrap Tyres wastes pose a potential threat to the
environment.. By manufacturing Reclaim Rubber the company has find a way to curb this
menace and making the environment pollution free.
On the basis of market research it can be said that M/S A.S.Rubhtech will be the first unit in
Bengal till date to produce Reclaim/De-vulcanized Rubber. It will very much beneficial for local
companies as they are purchasing reclaim rubber from outside West Bengal mainly from Gujarat,
Punjab,Keralaetc. Now these companies will buy Reclaim Rubber from M/S A.S Rubtech for
ease availability. And so on the demand of Reclaim Rubber will also rise.
On the basis of the analysis it can be said that the company will generate sufficient funds and
have the ability to pay all its debts, the product of the company has a good market and is in high
demand.So the companys performance outlook continues to be positive and optimistic.
Thecompany remains confident of delivering of strong operating and financial performance. It
appears to be a Fair Banking Risk.
On the basis of the analysis we made fromfinancial implications &financial parameters, it may
be concluded that the proposed project is technically feasible and financially viable. It appears to
be a Fair Banking Risk.
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Recommendations
Since the company is expected to generate more funds and is likely to repay all its debts in a
stipulated time frame, the company need to stabilize and should go ahead with further expansion
either by backward integration or forward integration based on market circumstances of
products. The company should maintain all its financial ratios to sustain in the market.
As the quality of Reclaim Rubber is not good, many industries are now focusing on synthetic
rubber which command higher value compared to reclaimed rubber for its good quality. So
company need to improve the quality level of its products.
As this is a new unit it has to compete with dominant, established players, the company should
concentrate on its marketing area to capture the market.
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Bibliography
y www.finance.indiamart.com/market/commodity/rubber.html
y
www.indiamarkets.com/imo/industry/rubber/rubberfea3.aspy http://www.plasticrubbermachines.com/reclaim-rubber-machinery.html
y http://rubberboard.org.in/ManageSRRR.asp?Id=1
y http://www.thefreelibrary.com/Reclaim+rubber+usage+and+trends.-a015410474
y www.en.wikipedia.org/wiki/Tire_recycling
y www.hubpages.com/hub/reclaim-rubber-uses-reclaimation-processes
y http://www.rakshareclaim.com/reclaim_rubber.htm
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TABLE 11.1
OPERATING STATEMENT
Rs. in Lacs
Projected Financial Years 2011-
12
2012-
13
2013-14 2014-15 2015-
16
2016-17
No. of Months 3 12 12 12 12 12
1.Sales of Reclaimed Rubber 71.21 369.12 397.60 426.09 454.57 455.76
Sales of Fibre 0.79 3.43 3.70 3.96 4.22 4.22
Total Sales 72.00 372.55 401.30 430.05 458.80 459.98
2. Cost of Production & Cost of
Sales
i) Raw Materials Consumed (Waste
Tyres)
18.99 82.29 88.62 94.95 101.28 101.28
ii) Consumables 8.31 36.03 38.80 41.57 44.34 44.34
iii) Power & Fuel Charges 12.88 55.27 59.01 62.75 66.48 66.48
iv) Salary & Wages 4.81 19.22 20.18 21.19 22.25 23.36
v) Packing & Forwarding Charges 2.16 11.18 12.04 12.90 13.76 13.80
vi) Repair & Maintenance 3.19 14.02 15.43 16.97 18.67 20.53
vii) Depreciation 4.51 18.04 18.04 18.04 18.04 18.04
viii) Bank Charges 0.03 0.12 0.12 0.12 0.12 0.12
Total cost of production 54.88 236.17 252.24 268.49 284.95 287.96
ix)Add: opening stock of Finishedgoods 0.00 9.15 9.84 10.51 11.19 11.87
x)less: closing stock of Finishedgoods
9.15 9.84 10.51 11.19 11.87 12.00
Total cost of Goods Sold 45.73 235.48 251.57 267.81 284.26 287.83
xi) other Selling,General &Administrative expenses
5.34 27.68 29.82 31.96 34.09 34.18
Total Cost of Sales 51.08 263.16 281.39 299.77 318.35 322.02
3.Profit before Interest &
Tax(PBIT)
20.93 109.39 119.91 130.28 140.44 137.97
4.Amortization of PreliminaryExpenses
0.00 2.22 2.22 2.22 2.22 2.22
5.Interest on loan
i)Interest on Term Loan 6.38 23.40 19.20 14.25 8.55 2.85
ii)Interest on Working Capital Loan 1.50 6.00 6.00 6.00 6.00 6.00
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6.Profit Before Tax 13.05 79.99 94.71 110.03 125.89 129.12
7.Provison for Taxation 2.71 19.81 25.84 31.84 37.83 39.75
8.Profit After Tax(PAT) 10.34 60.18 68.87 78.19 88.07 89.37
9. Dividend /Drawings 0.00 0.00 0.00 0.00 0.00 0.00
10.Retained Profit/Loss 10.34 60.18 68.87 78.19 88.07 89.37
11. Retained Profit/Profit (%) 100 100 100 100 100 100
13.Cash Flow 14.85 80.44 89.13 98.45 108.33 109.62
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TABLE- 11.2
ANALYSIS OF BALANCE SHEET
Rs. in Lacs
Projected Financial Years 2011-
12
2012-
13
2013-
14
2014-
15
2015-
16
2016-17
No. of Months 3 12 12 12 12 12
LIABILITIES
CURRENT LIABILITIES
1. Short term borrowing from banks 40.00 40.00 40.00 40.00 40.00 40.00
Sub Total (A) 40.00 40.00 40.00 40.00 40.00 40.00
2. Short-term borrowing from others 0.00 0.00 0.00 0.00 0.00 0.00
3. Sundry CreditorsCreditors for Others 1.04 0.76 0.82 0.87 0.93 0.92
4. Provision for Taxation 2.71 19.81 25.84 31.84 37.83 39.75
5. Deposits/Installments of term
loans/DPGs/Debentures etc
(due within one year)
Term Loan Installments 28.00 28.00 38.00 38.00 38.00 0.00
6. Other current liabilities and
Provision(due within one year)
specify major items 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal (B) 31.75 48.57 64.65 70.71 76.76 40.67
7. TOTAL CURRENT LIABILITIES 71.75 88.57 104.65 110.71 116.76 80.67
TERM LIABILITIES
8. Term loans (excldg. Instalmentspayable within 1 year)
142.00 114.00 76.00 38.00 0.00 0.00
9. Deferred Payment Credits 0.00 0.00 0.00 0.00 0.00 0.00
(Excitd.instalments due within one year)
10. TOTAL TERM LIABILITIES 142.00 114.00 76.00 38.00 0.00 0.00
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11. TOTAL OUTSIDE LIABILITIES 213.75 202.57 180.65 148.71 116.76 80.67
NET WORTH
Equity/ Share Capital 117.00 117.00 117.00 117.00 117.00 117.00
Surplus(+) or deficit (-) in Profit & Lossa/c
10.34 70.52 139.39 217.58 305.65 395.02
12. NET WORTH 127.34 187.52 256.39 334.58 422.65 512.02
13. TOTAL LIABILITIES 341.09 390.09 437.05 483.29 539.41 592.69
ANALYSIS OF BALANCE SHEET(cntd)
Rs. in Lacs
Projected Financial Years 2011-
12
2012-
13
2013-
14
2014-
15
2015-16 2016-
17
No. of Months 3 12 12 12 12 12
ASSETS
CURRENT ASSETS
14. Cash & Bank Balance 2.24 12.66 27.94 32.53 40.00 46.36
15. Investments(other than long term
Inv.)
i) Short Term Deposit 0.00 0.00 0.00 0.00 0.00 0.00
ii) Fixed deposits with Banks (Marginfor Electricity)
1.50 1.50 1.50 1.50 1.50 1.50
16.Sundry debtors 29.67 38.45 41.42 44.38 47.35 47.48
17. Inventory
i) Raw Materials 11.08 12.00 12.92 13.85 14.77 14.77
ii) Consumables 4.16 4.50 4.85 5.20 5.54 5.54
iii) Finished Goods 9.15 9.84 10.51 11.19 11.87 12.00
18 Advance to supplier of Raw Materials 5.00 20.00 25.00 35.00 45.00 45.00
19. Advance payament of Taxes 2.71 19.81 25.84 31.84 37.83 39.75
20. Other current assets 14.00 15.00 16.00 17.00 20.00 20.00
21. TOTAL CURRENT ASSETS 79.51 133.76 165.98 192.49 223.86 232.40
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FIXED ASSETS
22. Opening WDV 254.99 254.99 254.99 254.99 254.99 254.99
23. Depreciation till date 4.51 22.55 40.58 58.62 76.66 94.70
24. Closing WDV 250.48 232.44 214.41 196.37 178.33 160.29
OTHER NON CURRENT ASSETS
25. Investments/back debts/advances/ 0.00 0.00 0.00 0.00 0.00 0.00
deposits/which are not current assets
26. Security Deposits 0.00 0.00 0.00 0.00 0.00 0.00
27. Other non-current assets (Like fundfor renewal of fixed assets & fund for
future expansion
0.00 15.00 50.00 90.00 135 200
28. TOTAL OTHER NON CURRENT
ASSETS
0.00 15.00 50.00 90.00 135.00 200.00
29. Intangible Assets 11.10 8.88 6.66 4.44 2.22 0.00
30. TOTAL ASSETS 341.09 390.09 437.05 483.29 539.41 592.69
31. TANGIBLE NET WORTH 116.24 178.64 249.73 330.14 420.43 512.02
32. NET WORKING CAPITAL 7.76 45.19 61.33 81.77 107.10 151.73
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TABLE-11.3
RATIO ANALYSIS
CALCULATION OF DSCR (NET)(DEBT SERVICE COVERAGE RATIO)
Projected Financial Years 2011-
12
2012-13 2013-
14
2014-
15
2015-
16
2016-
17
No. of Months 3 12 12 12 12 12
CASH ACCRUALS
Net Profit after Tax 10.34 60.18 68.87 78.19 88.07 89.37
Depreciation & Amortization 4.51 20.26 20.26 20.26 20.26 20.26
Total 14.85 80.44 89.13 98.45 108.33 109.62
Repayment of Term Loan 0.00 28.00 28.00 38.00 38.00 38.00
D.S.C.R ( Net)
(PAT+DEP+AMORT)/REPAYMENT
OF LOAN)
0.00 2.87 3.18 2.59 2.85 2.88
Average DSCR (Net) 2.95
CALCULATION OF DSCR (GROSS)Projected Financial Years 2011-
12
2012-13 2013-
14
2014-
15
2015-
16
2016-
17
No. of Months 3 12 12 12 12 12
CASH ACCRUALS
Net Profit after Tax 10.34 60.18 68.87 78.19 88.07 89.37
Depreciation &Amortisation 4.51 20.26 20.26 20.26 20.26 20.26
Interest on Term Loan 6.38 23.40 19.20 14.25 8.55 2.85
Total 21.23 103.84 108.33 112.70 116.88 112.47
Interest on Term Loan 6.38 23.40 19.20 14.25 8.55 2.85Repayment of Term Loan 0.00 28.00 28.00 38.00 38.00 38.00
Total 6.38 51.40 47.20 52.25 46.55 40.85
D.S.C.R ( Gross) 3.33 2.02 2.30 2.16 2.51 2.75
Average DSCR (Gross) 2.35
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CALCULATION OF CURRENT RATIO &DEBT EQUITY RATIO
Projected Financial Years 2011-
12
2012-13 2013-
14
2014-
15
2015-
16
2016-
17
Current Ratio 1.11 1.51 1.59 1.74 1.92 2.88
Debt Equity Ratio 1.12 0.61 0.30 0.11 0.00 0.00
Calculation of Return of Capital
Employed
(PAT/CAPITAL EMPLOYED)*100
CALCULATION OF CAPITAL EMPLOYED
Projected Financial Years 2011-
12
2012-13 2013-
14
2014-
15
2015-
16
2016-
17
TangibleNet worth 116.24 178.64 249.73 330.14 420.43 512.02
Total Term Liabilities 142.00 114.00 76.00 38.00 0.00 0.00
Total 258.24 292.64 325.73 368.14 420.43 512.02
PAT 10.34 60.18 68.87 78.19 88.07 89.37
RETURN ON CAPITAL
EMPLOYED
4.00 20.56 21.14 21.24 20.95 17.45
CALCULATION OF PAY BACK PERIOD
Projected Financial Years 2011-12 2012-
13
2013-
14
2014-
15
2015-
16
2016-
17
Net Profit after Tax (PAT) 10.34 60.18 68.87 78.19 88.07 89.37
Interest on TL 6.38 23.40 19.20 14.25 8.55 2.85Depreciation & Amortization 4.51 20.26 20.26 20.26 20.26 20.26
Cash Inflow for the year 21.23 103.84 108.33 112.70 116.88 112.47
Cumulative Cash Flow 21.23 125.06 233.40 346.09 462.97 575.45
Capital Cost of the Project 266.09
PAY BACK PERIOD 36.29
SAY 36Months
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TABLE- 11.
FUND FLOW STATEMENT
Rs. in LacsProjected Financial Years 2011-12 2012-
13
2013-
14
2014-
15
2015-
16
201
No. of Months 3 12 12 12 12 12
1. SOURCES
a) Net profit (after tax) 10.34 60.18 68.87 78.19 88.07 89.3
b) Depreciation & Amortization 4.51 20.26 20.26 20.26 20.26
c) Increase in Capital & Quasi Capital 117.00 0.00 0.00 0.00 0.00 0.00
d) Increase in Term Loan 142.00 0.00 0.00 0.00 0.00 0.00
g) Decrease in :
I) Fixed Assets 0.00 0.00 0.00 0.00 0.00 0.00
ii) Other Non-current Assets 0.00 0.00 0.00 0.00 0.00 0.00
h) Others 0.00 0.00 0.00 0.00 0.00 0.00
f) TOTAL 273.85 80.44 89.13 98.45 108.33 109
2. USES
a) Net Loss 0.00 0.00 0.00 0.00 0.00 0.00
b) Decrease in Term Liabilities 0.00 28.00 38.00 38.00 38.00
c) Increase in :
I) Fixed Assets 254.99 0.00 0.00 0.00 0.00 0.00ii) Other Non-current Assets 0.00 15.00 35.00 40.00 45.00 65.0
d) Drawings 0.00 0.00 0.00 0.00
e) Others (Preliminary &Preop. Exp.) 11.10 0.00 0.00 0.00 0.00 0.00
f) TOTAL 266.09 43.00 73.00 78.00 83.00 65.0
3. LONG TERM SURPLUS 7.76 37.44 16.13 20.45 25.33 44.6
4. Increase/decrease in current assets 79.51 54.26 32.22 26.51 31.37 8.54
(as per details given )
5. Increase/decrease in current Liabilities 31.75 16.82 16.09 6.06 6.04 -36
other than Bank Borrowings
6. Increase/Decrease in working capital gap 47.76 37.44 16.13 20.45 25.33 44.6
7. Net Surplus (+) Deficit (-) -40.00 0.00 0.00 0.00 0.00 0.00
8. Increase/decrease in Bank borrowings 40.00 0.00 0.00 0.00 0.00 0.00
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Table11.5
BREAK EVEN SALES
Rs/lacs
Projected Financial Years 2011-12 2012-13
2013-14
2014-15 2015-16
20117
No. of Months 3 12 12 12 12 12
Sales 72.00 372.55 401.30 430.05 458.80 459
Add : Closing Stock of Finished Goods 9.15 9.84 10.51 11.19 11.87 12.0
Less : Opening Stock of Finished Goods 0.00 9.15 9.84 10.51 11.19 11.8
Sale Value of Production (SVP) 81.15 373.24 401.97 430.73 459.48 460
Variable Cost
Raw Materials (100%) 18.99 82.29 88.62 94.95 101.28 101
Consumables (100%) 8.31 36.03 38.80 41.57 44.34 44.3
Power & Fuel Charges (75%) 9.66 41.46 44.26 47.06 49.86 49.8
Salary & Wages (50%) 2.40 9.61 10.09 10.60 11.12 11.6
Packing Charges (75%) 1.62 8.38 9.03 9.68 10.32 10.3
Repair & Maintenance (50%) 1.59 7.01 7.71 8.48 9.33 10.2
Interest on Working Capital (100%) 1.50 6.00 6.00 6.00 6.00 6.00
Other Selling, General & Administrative
Expenses (50%)
2.67 13.84 14.91 15.98 17.05 17.0
Total 46.75 204.62 219.42 234.32 249.31 250
Contribution(sales-variable cost) 34.40 168.62 182.55 196.41 210.17 209PV Ratio (contribution/sales) 0.42 0.45 0.45 0.46 0.46 0.45
Fixed Cost
Power & Fuel Charges (25%) 3.22 13.82 14.75 15.69 16.62 16.6
Salary & Wages (50%) 2.40 9.61 10.09 10.60 11.12 11.6
Packing Charges (25%) 0.54 2.79 3.01 3.23 3.44 3.45
Repair & Maintenance (50%) 1.59 7.01 7.71 8.48 9.33 10.2
Other Selling, General & Administrative
Expenses (50%)
2.67 13.84 14.91 15.98 17.05 17.0
Depreciation (100%) 4.51 18.04 18.04 18.04 18.04 18.0
Interest on Term Loan (100%) 6.38 23.40 19.20 14.25 8.55 2.85
Amortisation of Preliminary Expenses(100%) 0.00 2.22 2.22 2.22 2.22 2.22
Total 21.32 90.73 89.93 88.48 86.37 82.2
Break Even Sales 50.29 200.84 198.04 194.03 188.84 180
(% of SVP) 61.98 53.81 49.27 45.05 41.10 39.2
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TABLE11.6
SENSITIVITY ANALYSIS
REDUCTION IN SALES/INCOME PRICE
BY 5%
Rs./Lacs
Projected Financial Years 2011-12 2012-
13
2013-
14
2014-15 2015-
16
201
17
No. of Months 3 12 12 12 12 12
Sales/Income 68.40 353.92 381.23 408.55 435.86 436
Total Cost & Interest Expenses 68.07 295.35 309.36 322.79 335.69 333
PROFIT BEFORE TAX 0.33 58.57 71.88 85.75 100.17 103
Provision for Taxation 0.10 18.10 22.21 26.50 30.95 32.1
NET PROFIT AFTER TAX 0.23 40.47 49.67 59.25 69.22
PROFIT AFTER TAX 0.23 40.47 49.67 59.25 69.22 71.7
Less : Dividend 0.00 0.00 0.00 0.00 0.00 0.00
Add: Depreciation & Amortization 4.51 20.26 20.26 20.26 20.26 20.2
Cash Accruals 4.74 60.73 69.93 79.51 89.47 92.0
Interest on Term Loan 6.38 23.40 19.20 14.25 8.55 2.85
Sub total 11.12 84.13 89.13 93.76 98.02 94.9
Interest on Term Loan 6.38 23.40 19.20 14.25 8.55 2.85
Repayment of Term Loan 0.00 28.00 28.00 38.00 38.00 38.0
Sub total 6.38 51.40 47.20 52.25 46.55 40.8
DSCR 1.74 1.64 1.89 1.79 2.11 2.32
Average DSCR 1.93
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INCREASE IN RAW MATERIAL COST
BY 5%
Rs/lacsProjected Financial Years 2011-12 2012-
13
2013-
14
2014-15 2015-
16
201
17
No. of Months 3 12 12 12 12 12
Sales Value of Production (A) 81.15 373.24 401.97 430.73 459.48 460
Raw Material Cost 19.94 86.40 93.05 99.70 106.34 106
Other Costs & Interest Costs 49.08 213.06 220.74 227.84 234.41 231
69.02 299.47 313.79 327.54 340.75 338
PROFIT BEFORE TAX 12.13 73.77 88.18 103.18 118.73 121
Provision for Taxation 3.75 22.80 27.25 31.88 36.69 37.6
NET PROFIT AFTER TAX 8.38 50.98 60.93 71.30 82.04
PROFIT AFTER TAX 8.38 50.98 60.93 71.30 82.04 84.2
Less : Dividend 0.00 0.00 0.00 0.00 0.00 0.00
Add: Depreciation & Amortization 4.51 20.26 20.26 20.26 20.26 20.2
Cash Accruals 12.89 71.24 81.19 91.56 102.30 104
Interest on Term Loan 6.38 23.40 19.20 14.25 8.55 2.85Sub total 19.27 94.64 100.39 105.81 110.85 107
Interest on Term Loan 6.38 23.40 19.20 14.25 8.55 2.85
Repayment of Term Loan 0.00 28.00 28.00 38.00 38.00 38.0
Sub total 6.38 51.40 47.20 52.25 46.55 40.8
DSCR 3.02 1.84 2.13 2.03 2.38 2.63
Average DSCR 2.20
REDUCTION IN CAPACITY OF
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UTILIZATION BY 5%
Rs/lacs
Projected Financial Years 2011-12 2012-
13
2013-
14
2014-15 2015-
16
201
1
No. of Months 3 12 12 12 12 1
Sales Value of Production (A) 77.09 354.58 381.87 409.19 436.51 437.
Expenses 65.73 285.12 298.38 311.08 323.22 320.5
11.36 69.46 83.49 98.11 113.29 116.5
PROFIT BEFORE TAX 11.36 69.46 83.49 98.11 113.29 116.5
Provision for Taxation 3.51 21.46 25.80 30.32 35.01 36.02
NET PROFIT AFTER TAX 7.85 48.00 57.69 67.79 78.28
PROFIT AFTER TAX 7.85 48.00 57.69 67.79 78.28 80.54
Less : Dividend 0.00 0.00 0.00 0.00 0.00 0.00
Add: Depreciation & Amortization 4.51 20.26 20.26 20.26 20.26 20.26
Cash Accruals 12.36 68.25 77.95 88.05 98.54 100.
Interest on Term Loan 6.38 23.40 19.20 14.25 8.55 2.85
Sub total 18.74 91.65 97.15 102.30 107.09 103.6
Repayment of Term Loan 0.00 28.00 28.00 38.00 38.00 38.00
Interest on Term Loan 6.38 23.40 19.20 14.25 8.55 2.85
Sub total 6.38 51.40 47.20 52.25 46.55 40.85
DSCR 2.94 1.78 2.06 1.96 2.30 2.54
Average DSCR 2.13
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TABLE- 11.7
PROJECTED INTERNAL RATE OF RETURN
Rs. in LacsYEA
R
CASH
OUTFLO
W
AMOU
NT
CASH
INFLO
W
AMOU
NT
NET
FLO
W
DISC. PRESE
NT
DISC. PRESE
NT
(PAT+
DEP.+
AMZ.)
FACT
OR @
VALUE FACTO
R@
VALUE
24% 23%
0 Cost ofProject
285.55
Less:
Margin
forWorkingCapital
19.46
266.09 -
266.09
-266.09 -266.09
1 Investmen
t inWorkingCapital
7.76 14.85 7.09 0.81 5.72 0.81 5.76
2 Increasein
WorkingCapital
37.44 80.44 43.00 0.65 27.97 0.66 28.42
3 Increase
in
WorkingCapital
16.13 89.13 73.00 0.52 38.29 0.54 39.23
4 Increase
inWorking
Capital
20.45 98.45 78.00 0.42 32.99 0.44 34.08
5 Increase
in
WorkingCapital
25.33 108.33 83.00 0.34 28.31 0.36 29.48
6
Increasein
working
capital
44.62 109.62 65.00 0.28 17.88 0.29 18.77
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Residua
l Valueof CivilWork
26.61 26.61 0.28 7.32 0.29 7.68
Residual Valueof Non
Current
Assets
200.00 200.00 0.28 55.02 0.29 57.76
Residual Value
of FixedAssets
68.51 68.51 0.28 18.85 0.29 19.79
Residual Valueof
Working
151.73 151.73 0.28 41.74 0.29 43.82
Capital
( Equalat par )
7.99 18.70
INTERN
AL
RATE
OFRETURN
24.75
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Worksheet-1
Assessment Of Term Loan
(Rs. in Lacs)
Items Cost incldg Margin
(%)
Margin
Amt.
Term
Loan
Contingenc
y
Land 0.00 0% 0.00 0.00
Civil Works 25.84 40% 10.33 15.50
Plant & Machinery 175.21 30% 52.56 122.64
Miscellaneous Fixed Assets 12.28 30% 3.68 8.60
Electrical Equipments 34.24 30% 10.27 23.97
Preliminary & Pre-operative Expenses 11.10 100% 11.10 0.00
Provision for Contingency 7.43 100% 7.43 0.00
Total 266.09 95.38 170.71
Term Loan sought from the Bank 170.00
Worksheet II
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TERM LOAN
COMPUTATION OF INTEREST % & REPAYMENT OF LOAN
Year Qtr Loan
Amount
Repayment Balance Interest Interest p.a.
2011-12 IV 170 0.00 170 6.38 6.38
2012-13 I 170 7.00 163 6.24
II 163 7.00 156 5.98
III 156 7.00 149 5.72
IV 149 7.00 142 5.46 23.40
2013-14 I 142 7.00 135 5.19
II 135 7.00 128 4.93
III 128 7.00 121 4.67
IV 121 7.00 114 4.41 19.20
2014-15 I 114 9.50 104.50 4.10II 104.50 9.50 95.00 3.74
III 95.00 9.50 85.50 3.38
IV 85.50 9.50 76 3.03 14.25
2015-16 I 76 9.50 66.50 2.67
II 66.50 9.50 57.00 2.32
III 57.00 9.50 47.50 1.96
IV 47.50 9.50 38 1.60 8.55
2016-17 I 38 9.50 28.50 1.25
II 28.50 9.50 19.00 0.89
III 19 9.50 9.50 0.53
IV 9.50 9.50 0.00 0.18 2.85
WORKSHEET II
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DETAILS OF WORKING CAPITAL AND MARGIN MONEY REQUIREMENT
(Rs./Lacs)
Particulars Holding 2011-12 2012-13 2013-14 2014-
15
2015-
16
201
17
Period
Stock of Raw Materials
(Waste Tyres)
1.75 months 11.08 12.00 12.92 13.85 14.77 14.7
Consumables 1.5 Months 4.16 4.50 4.85 5.20 5.54 5.54
Finished Goods 0.5 Month 9.15 9.84 10.51 11.19 11.87 12.0
Sundry Debtors 1.25 Months 29.67 38.45 41.42 44.38 47.35 47.4
TOTAL : 54.05 64.79 69.70 74.61 79.54 79.7
Less: Sundry Creditors forConsumables
0.25 Month 1.04 0.76 0.82 0.87 0.93 0.92
TOTAL 53.01 64.04