stone cutting n polishing

INTRODUCTION

Monarch Rocks Pvt Ltd.(MRPL) is incorporated on 5th August 1998 with the object to carry on the business of granite products. The company is promoted by Mrs K.Lakshmi and P. Satish.

The company proposed to set up a granite processing unit to manufacture polished granite panels with an installed capacity of 158400 Sq.ft. per annum. The project envisages to manufacture polished granite panels in different colours .The panel are used for flooring, kitchen Tops, Table Tops, wall panelleling and other ornamental purpose. The principal users are owners of Residential house, Hotels, Showrooms and other commercial establishments.

The promoters propose to market granite panels initially in domestic market. They have already established contacts in Northern India, mainly Rajasthan, Gujarat & Delhi States apart from Andhra Pradesh. The company has also plans to enter into the international market after establishing in the domestic market. The proposed project is located in industrial area of Khazipally village , Jinnaram Mandal, Medak District, 20 Kms away from Hyderabad on Hyderabad – Narsapur road. The location is having transportation and other infrastructure facilities to set up the unit.

The cost of the project is estimated at Rs.76 lacs and the detail of the project is indicated below.

Rs in LakhsLand and Site DevelopmentBuilding and Civil WorksPlant & MachineryMisc. Fixed AssetsDepositsPreliminary ExpensesPre-Operative ExpensesWorking capital Margin

Total Cost of Project

5.7319.2039.951.002.750.303.81.3.26

76.00

The project envisages to be financed by way of term loan of Rs. 45.00 Lakhs State subsidiary amounting to Rs 13.18 Lakhs and promoter’s continuation by way of equity share capital of Rs 17.82 Lakhs. The promoter’s contributation works out to 23.46% of Project Cost. The debt Equity Ratio works out to 2:52:1. The projected profitability statements indicate that the project makes profit right from the first year onwards. The average return on capital employed works out to 33% and the Internal Rate of Return is 27.90% after tax. The Break Even point is 35.59% of installed capacity and Cash Break even point 22,78%. Thus the project is technically feasible and economically viable proposition.

2. THE PRODUCT

During the past few decades, it has been well established that there is a vast scope for cut5 and polished granite product in India and in the inverses market. Nature has endowed India with vast resources of multi colored granite deposits. The demand for the granite products has been staidly incr4easing. The increase in granite products consumption can be attributed to the preference for aesthetics in growing housing sector. The granite product also has vast potential in the international market.With the vast potential in both domestic and international market , Monarch Rock Pvt (MRPL) is setting up a granite processing unit to manufacture polished granite panels with an installed capacity of 1,58,400 Sqft per annum. These panels are used for kitchen and table tops, flooring , internal and external cladding to the walls and stair ways . since granite panels are maintenance free, durable and unaffected by pollution and provides the building structure and flooring with natural grace and beauty, the products have increasing applications in the construction and decorative fields in India and abroad.

At present, India granite is one of the most sought after commodities in the overseas market since India possesses huge granite wealth of different colors. It is ideally placed to explore and capitalize this opportunity.

The promoters propose to market granite panels initially in domestic market. They have already established contacts in Northern India, mainly Rajasthan, Gujarat and Delhi states apart from Andhra Pradesh. The company has also plans to enter into the international market after establishing in the domestic market.

3. THE PROMOTERS

Monarch Rock Pvt Ltd is promoted by Mrs. K.Lakshmi Mani and Mr. P. Satish with the object to manufacture polished granite panels.

Mrs. K. Lakhsmi Mani director, aged 32 years is graduate having mmore than 8 years experience in granite industry. She is also a director in East Coast Granites Pvt. Ltd which is promoted with the financial assistance of APSFC. East Coast Granites Pvt. Ltd is running successfully and entire term loan is re-paid promptly to APSFC.

The performance of the East5 Cost Granite Pvt. Ltd is as follows:1997-98 1996-97 1995-96

Sales 79.58 67.20. 57.58Gross Profit 11.16 13.75 121.08Depreciation 3.46 3.43 3.30Net Profit 1.15 3.65 1.07Net Cash Accruals 4.62 7.09 4.38Net Worth 25.98 23.05 19.97

With the successful background of East Cost Granites Pvt. Ltd. Mrs. K. Lakshmi Mani propose to establish another unit with the association of Mr P.Satish. Mr. P.Satish, Managing Director, aged 34 years is a graduate in Mechnical Engineering with more than 10 experience in granite industry. He is working in East Coast Granite Pvt. Ltd as administrative manager.

MANAGEMENT:

The management of the company vests withs the board of directors. The board comprises of Mr.P,Satish, Managing Director and Mrs. K. Lakshmi Mani, Director . Day to day affairs of the company will be administered by Mr.P.Satich, Managing Director withs the assistance of Plant Manager and sales executives.

4 TECHNICAL DETAILS OF THE PROJECT

monarch Rocks Pvt. Ltd (MRPL) is proposed to manufacture poliched granite panels at Khazipally village, Jinnaram Mandal, Medak District.

The various technical aspects of the project are as below

LOCATION;

The proposed unit as stated earlier is being located in industrial area at Khazipally village, Medak District and it is 20 Km away from Hyderabad on Hyderabad- Narsapur Road. The location is having good transportation and other infrastructure facilities. Since the unit is located outside the municipal area, it is eligible for investment subsidy from State Government.

CAPACITY

The major sections of the plant are cutting section and polishing section\. The com-pany is installing two granite slicing machines with 12 Sqft/hr capacity along with two radial polishing machines. The installed capacity of the granite slicing machinery is estimated at 1, 58,400 Sqft per annum based on 20 working hours per day for 330 days.

LANDS & BUILDINGS

MRPL has already acquired 1.5 acres of free hold land in survey No. 180/15 of Khazipally village , Jinnaram Mandal, Medak district and propose to construct building to an extent of 5300 Sqft. For housing cutting and polishing machines , generator and electrical room , security room, toilet blook water tank and sump etc,

PLANT & MACHINERY

The entire equipment required for the project is being procured from indigenous sources . the main plant & machinery consisting of two no.s granite slicing machines with motors and electrical, two no.s radial polishing machines with electrical , circular saw blades , 15 ton gantry crane, 160 KVA transformer, 150 KVA D.G.set etc, . The equipment is being procured from reputed machinery suppliers who are known for their quality and delivery schedules. The cost of plant & machinery is estimated to cost Rs. 39, 95 lacs. Provision also made errection and installation, duties, taxes and freight.

MISC, FIXED, ASSETS

Under this head the company has provided furniture and fixtures, office equipment. The total cost of miscellaneous fixed assets is estimated at Rs. 1 lacs.

TECHNICAL ARRANGEMENT

The company does not envisage any technical arrangement manufacturing process is simple and mechanical. However, machine suppliers will impart the necessary training for the company personnel. The company is also appointing experienced production manager.

MANUFACTURING PROCESS

The raw granite blocks arrived from the quarry are unloaded using 15 ton gantry crane and the block selected for cutting are loaded on to a trolley. The trolley loaded with granite block is pulled on to the main frame to the circular saw. The granite blocks are then sliced into required sizes. After wards these are passed through the lime polisher for surface finishing. The finished panels are then properly packed and dispatched, the process as stated above is being followed by all the existing units.

The process mentioned above is the only process being adopted by the granite polisher all over the world including India. As such process is giving the desired result and is widely accepted.

RAW MATERIAL

The basic raw material required for the project is raw granite blocks. These are procured from the quarries located both within and outside the state. Beside granite blocks, the process also requires certain consumables like steel blades diamond saws felts and abrasives. All these consumables are available locally.

WATER

Water requirement of 5000 gallons/day for manufacturing process and domestic uses is met from the existing bore well in factory site.

POWER

The total requirement of power is estimated at 160 KVA. The same will be procured from A.P. Trans co. the power lines passing adjacent to the factory site. Hence it will not be problem to draw power from A.P. Trans co. the company also proposed to install 150 KVA stand by D.G.SET to meet the power cuts.

LABOUR

The company require 16 skilled and 6 unskilled labour from administrative staff. As the site located near industrial area, the company does not foresee any problem in sourcing the required man power.

TRANSPORT

The granite blocks will be transported from the quarry to the site through hired lorries by road. The finished products namely, panels will be transported to domestic market and inland container depot by hiring the services of transport operators.

EFFLUENT DISPOSAL

The manufacturing process does not envisage and toxic effluents. However, the water used in cutting and polishing of granite blocks contains fine particles of granite. The water will be stored in a sedimentation tank. The clear water from sedimentation tank will be re-circulated in the process. The sediment will be periodically cleared from the tanks. However, the company will would obtain no objection certificate from pollution control board.

SHEDULE OF IMPLEMENTATION

The company has already taken effective steps for speedy implementation of the project. The company has already accured the land and completed the site development. Civil works for building are also commenced. The company identified the suppliers for plant and machinery and placed orders for the equipments. The promoters are already mobilized share capital of rupees 10 lacs. The detailed schedule of implementation is as below.

Commencement Completion

1. Land & cite development completed

2. Building & civil works Sep 1999 Dec 1999

3. Plant & machinery -placement of orders completed - Delivery of site Dec 1999 Feb 1999

4. Arrangement of water completed

5. Arrangement of power Oct 1999 Jan 2000

6. Erection of equipments Dec 1999 Feb 2000

7. Commissioning --- Feb 2000

8. Procurement of raw material --- Feb 2000

9. Trial runs --- mar 2000

10. Commercial production --- Apr 2000

6. COST OF PROJECT

The cost of project for establishing unit to manufacture 1, 58,400 Sqft. Polished granite panels is estimated at Rs. 76 lacs is as follows.

Rs. Lakhs1. Land & Site Development 5.732. Building & Civil works 19.203. Plant & Machinery 39.954. Misc .Fixed Assets 1.005. Deposits 2.756. Preliminary Expenses 0.307. Pre- Operative Expenses 3.818. Working capital Margin 3.26 Total 76.00LAND & STATE DEVELOPMENT The company acquired 1.5 acres of freehold land at a cost of Rs. 4.23 lakhs including registration and conveyance charges and made provision of Rs.1.50 Lakhs for site development.

BUILDING & CIVIL WORKS

The of 5300Sqft building and civil works consisting of water tank, sumps and foundations for machinery is estimated at Rs. 19.20 Lakhs.

PLANT & MACHINERY

The company propose to purchase machinery from indigenous sources only . the estimated cost of plant & machinery including provision for taxes, packing and transportation charges is Rs. 39.95 lacs.

MISC. FIXED ASSETS

Cost of furniture & fitting, office equipment is included in misc.fixed Assets. The total cost misc.fixed Assets is estimated at Rs. 1.00 lac.

DEPOSITS

The provision of Rs. 2.75 lacs is made for A.P.TRANSCO power deposit, APGST, telephone and other misc deposits.

PRELIMINARY EXPENSES

Expenses for company incorporation, per feasibility studies and other pre incorporation expenses are estimated at Rs. 0.30 lacs.

PRE-OPERATIVE EXPENSES

Establishment expenses , rent ,rates & taxes interest during construction and other administrative expenses are estimated at Rs. 3.81 lacs.

WORKING CAPTIAL MARGIN

Working capital requirement of the project has been based on the following norms. Raw Materials 2 Weeks Finished Goods 1 Week Receivables 1.0 Month Wages and other expenses 2 WeeksThe working capital margin @ 25% of total current assets is estimated at Rs. 3.26 lacs, working capital borrowing from bank/institution is estimated at Rs. 10 lakhs.

MEANS OF FINANCE

The project cost of Rs. 76 lacs is proposed to be financed as under: Rs. Lakhs1. Equity share capital 17.822. Subsidy 13.183. Term Loan 45.00 Total 76.00In the above financing pattern the debt equity ratio works out to 2.52:1. The company has envisaged a subsidy amount of Rs. 13.18 lakhs from state government on eligible items. The promoter contribution to the project cost is works out to 23%. The promoters propose to raise unsecured loans to the extent of subsidy amount till the sanction of subsidy from the government. The term loan is proposed to repay in 13 half yearly installments with moratorium period of 18 months.

7. PROFITABILITY AND CASH FLOW

The enclosed projection of cost of production and working results shows that the company will earn profit from the first year on wards. The average return on the capital employed works out to 33%. The

company estimated to generate Rs.143 lacs during the first 8 years of operations and which are sufficient to meet the loan obligation , payment of dividends, building – up of current assets.

As per the projected balance sheet for the period of Eight years shows that the net worth of the company will increase from Rs. 39.69 lakhs at the end first year of operation to Rs 103.06 lakhs by the end of eight year. The book value of share will go up to Rs.57.80 by the end of 8th year. The debt equity ratio will come down from 2.52:1 to nil by the end of 8th year.

The project will break even at a sales turnover of Rs.56.37 lacs which works to 35.59% of installed capacity. The cash break even point work out to 22.78% of installed capacity. The average debt service coverage ratio works out to 2.26 times .the after tax internal rate of return of the project is out 27.90%. thus the project is financially viable. COST OF THE PROJECT Rs.LacsSl.No. DETAILS AMOUNT1. Land & Site Development 5.732. Building & Civil works 19.203. Plant & Machinery 39.954. Miscellaneous Fixed Assets 1.005. Deposits 2.756. Preliminary Expenses 0.307. Pre- Operative Expenses 3.818. Working capital Margin 3.26 Total 76.00 MEANS OF FINANCE Rs.Lacs Sl.No. DETAILS AMOUNT 1. Share Capital 17.83 2. Subsidy 13.18 3. Term Loan 45.00 Total 76.00

LAND AND SITE DEVELOPMENT Rs.Lacs

Sl.No. DETAILS AMOUNT

1. Cost of land including registration conveyance charges 4.23 2. Cost of clearing and leveling of site 1.50 Total 5.73

BUILDING AND CIVIL WORKS

Rs.Lacs

Sl.No. DETAILS AREA(Sqfts) AMOUNT

1. Cutting and Polishing Shed 3285.57 7.97 2. Administrative Block 517.99 2.183. D.G & L.T. Room 1120.76 3.004. Security Room 157.25 1.155. Toilet Room 226.93 1.546. Water Tank L.s 0.727. Sump L.s 1.558. Cutting machine foundation L.s 0.749. Polishing machine foundation L.s 0.35 Total 5308 19.20

MISCELLANEOUS FIXED ASSETS Rs.Lacs Sl.No. PARTICULARS QTY. AMOUNT

1. Furniture & Fitting Ls 0.50 2. Office Equipment Ls 0.50 Total 1.00

DEPOSITS

Rs.Lacs

Sl.No. DETAILS AMOUNT

1. Electricity 2.50 2. Telephone 0.10 3. Misc.Deposits 0.15

Total 2.75

PRELININARY EXPENSES Rs.Lacs

Sl.No. PARTICULARS AMOUNT

1. Company Incorporation 0.30 Total 0.30

PRE – OPERATIVE EXPENSES

Rs.Lacs

Sl.No. PARTICULARS AMOUNT

1. Establishment 0.5 2. Rents, rates and taxes 0.36 3. Traveling and conveyance 0.45 4. Misc.expenses, postage, telephone, consultancy Fee and other administrative expenses 0.50 5. Interest during Construction 2.00

Total 3.81

ESTIMATION OF CAPITAL MARGIN

Rs.Lacs

Sl.No. PARTICULARS STOCKING 1.YEAR 2YEAR 3YEAR PERIOD(MONTHS)

1. Raw Material & consumable 0.50 2.36 2.72 3.09 2. Stock of Finished Goods 0.25 1.59 1.80 2.02 3. Debtors 1.00 8.58 9.90 11.22 4. Wages & other expenses 0.50 0.73 0.81 0.90 Total Current Assets 13.26 15.24 17.22 Permissible bank borrowings 10.00 11.00 13.00 Margin for working capital 3.26 4.24 4.22

Interest on working capital 1.65 1.82 2.15

PROJECTED PROFITABILITY STATMENT Rs.Lacs Sl.No. PARTICULARS 2000 2001 2002 2003 2004 2005 2006 2007

1. Installed capacity (Sqft) 158400 158400 158400 158400 158400 158400 158400 158400

2. Operating capacity (%) 65.00% 75.00% 85.00% 85.00% 85.00% 85.00% 85.00% 85.00%

3. Sales (Sqft) 102960 118800 134640 134640 134640 134640 134640 134640

4. Income from sales 102.96 118.80 134.64 134.64 134.64 134.64 134.64 134.64

5. Manufacturing Expenses - Cost of raw material 41.18 47.52 53.86 53.86 53.86 53.86 53.86 53.86 - Consumables 15.44 17.82 20.20 20.20 20.20 20.20 20.20 20.20 - Power 5.15 5.94 6.73 6.73 6.73 6.73 6.73 6.73 - Salaries and wages 5.46 6.01 6.61 7.27 7.99 8.79 9.67 10.64 - Repairs and maintenance 1.12 1.23 1.35 1.49 1.64 1.80 1.98 2.18 - Insurance 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.45 - Rent, rates & Taxes 1.20 1.26 1.32 1.39 1.46 1.53 1.61 1.69 - Misc.Factory Exp 0.60 0.63 0.66 0.69 0.73 0.77 0.80 0.84 - Depreciation 5.72 5.72 5.72 5.72 5.72 5.72 5.72 5.72

6. Cost of Production 76.32 86.57 96.89 97.79 98.77 99.84 101.02 102.30

7. Gross Profit 26.32 32.23 37.75 36.85 35.85 34.80 33.62 32.34

8. Administrative Expenses 3.60 3.96 4.36 4.79 5.27 5.80 6.38 3.37

9. Selling Expenses 2.57 2.97 3.37 3.37 3.37 3.37 3.37 3.37

10. Financial Expenses -Int on tern loan 7.20 6.92 5.82 4.70 3.60 2.49 1.39 0.28 -Int on working capital 1.65 1.82 2.15 2.15 2.15 2.15 2.15 2.15 Sub Total 8.85 8.74 7.96 6.84 5.75 4.64 3.53 2.42

11. Prel.Expenses 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03

12. Profit before tax 11.59 16.53 22.03 21.82 21.46 20.96 20.32 19.50

13. Provision for tax 2.01 4.61 7.59 8.18 8.55 8.75 8.80 8.72

14. Profit after tax 9.57 11.92 14.44 13.64 12.91 12.22 11.52 10.78

15. Dividends 0.89 2.67 3.57 3.57 3.57 3.57 3.57 3.57

16. Retained Profit 8.68 9.25 10.87 10.08 9.35 8.65 7.95 7.22 17. Add.Dreprection & Prl.Exp 5.75 5.75 5.75 5.75 5.75 5.75 5.75 5.75

18. Net cash Accruals 14.43 15.00 16.62 15.83 15.09 14.40 13.70 12.96

PROJECTED CASH FLOW STATEMENT Rs.Lacs Sl.No. DETAILS / CONSTN 2000 2001 2002 2003 2004 2005 2006 2007 YEAR ENDING 31ST MARCH PERIOD

A. SOURCES

1. Net cash accruals 0.00 14.43 15.00 16.62 15.83 15.09 14.40 13.70 12.96

2. Equity share capital 17.83 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

3. Term Loan 45.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

4. Subsidy 13.18 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

5. Bank Borrowings 0.00 10.00 1.00 2.00 0.00 0.00 0.00 0.00 0.00

Total Sources 76.00 24.43 16.00 18.62 15.83 15.09 14.40 13.70 12.96

B. APPLICATION

1. Capital Expenditure 72.44 0.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 2. Preliminary Expenses 0.30 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

3. Increase in current assets 3.26 10.00 1.98 1.98 0.00 0.00 0.00 0.00 0.00 4. Repayment of term loan 0.00 0.00 6.92 6.92 6.92 6.92 6.92 6.92 3.48 Total Disposition 76.00 10.00 13.90 13.90 11.92 11.92 11.92 11.92 8.48 Net surplus 0.00 14.43 2.10 4.72 3.91 3.17 2.48 1.78 4.48 Add. Open. Balance 0.00 0.00 14.43 16.53 21.25 25.15 28.33 30.81 32.59 Closing Balance 0.00 14.43 16.53 21.25 25.15 28.33 30.81 32.59 37.07

PROJECED BALANCE SHEET Rs.Lacs

Sl.No. DETAILS 2000 2001 2002 2003 2004 2005 2006 2007

LIAILITIES

1. Share Capital 17.38 17.83 17.83 17.83 17.83 17.83 17.83 17.83 2. Reserves & Capital 21.86 31.11 41.98 52.06 61.40 70.06 78.01 85.23 3. Term Loan 45.00 38.08 31.16 24.24 17.32 10.40 3.48 0.00 4. Short term bank borrowing 10.00 11.00 13.00 13.00 13.00 13.00 13.00 13.00 Total Liabilities 94.69 98.01 103.97 107.12 109.55 111.28 112.32 116.05 ASSETS 1. Gross fixed assets 72.44 77.44 82.44 87.44 92.44 97.44 102.44 107.44 2. Less accumulated deprec. 5.72 11.43 17.15 22.87 28.59 34.30 40.02 45.74 3. Net fixed assets 66.73 66.01 65.29 64.57 63.86 63.14 62.42 61.70 4. Current assets 13.26 15.24 17.22 17.22 17.22 17.22 17.22 17.22 5. Cash & Bank balance 14.43 16.53 21.25 25.15 28.33 30.81 32.59 37.07 6. Preliminary expenses 0.27 0.24 0.21 0.18 0.15 0.12 0.09 0.06 Total Assets 94.69 98.01 103.97 107.12 109.55 111.28 112.32 116.05

BREAK EVEN POINT Rs.Lacs

Sl.No. DETAILS FIXED VARIABLE TOTAL COST COST COST

1. Operating Expenses 0.00 37.32 37.22

2. Admn. Expenses 4.36 0.00 4.36

3. Selling Expenses 0.00 3.37 3.37

4. Interest 5.82 2.15 7.96

5. Depreciation 5.72 0.00 5.72 6. Raw Material 0.00 53.86 53.86

Total 15.89 96.69 112.58

SALES TURNOVER 134.64

CONTRIBUTION 37.95

BREAK-EVEN POINT 35.59%

CASH, BREAK-EVEN POINT 22.78%

BREAK-EVEN LEVEL OF SALES (Rs. Lakhs) 56.37

DEBT SERVICE COVERAGE RATIO Rs.Lacs

Sl.No. DETAILS 2000 2001 2002 2003 2004 2005 2006 2007 Total

CASH FLOW 1. Profit after tax 9.57 11.92 14.44 13.64 12.91 12.22 11.52 10.78 97.01 2. Deprecation 5.72 5.72 5.72 5.72 5.72 5.72 5.72 5.72 45.74 3. Interest on term loan 7.20 6.92 5.87 4.70 3.60 2.49 1.39 0.28 32.40 Total 22.49 24.56 25.97 24.06 22.23 20.43 18.62 16.78 175.15

DEBT 1. Interest on term loan 7.20 6.92 5.82 4.70 3.60 2.49 1.39 0.28 32.40 2. Repayment of term 0.00 6.92 6.92 6.92 6.92 6.92 6.92 3.48 45.00 loan Total 7.20 13.84 12.74 11.62 10.52 9.41 8.31 3.76 11.40

DEBT SERVICE COVERAGE RATIO 3.12 1.77 2.04 2.07 2.11 2.17 2.24 4.46 2.26

INTERNAL RATE OF RETURN Rs.Lacs

2000 2001 2002 2003 2004 2005 2006

Capital Investment -76.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Working Capital Borrowing -10.00 -1.00 -2.00 0.00 0.00 0.00 0.00

Profit after tax 9.57 11.92 14.44 13.64 12.91 12.22 11.52

Add Deprection and non cash expenses 5.78 5.78 5.78 5.78 5.78 5.78 5.78

Add Interest 8.85 8.74 7.96 6.84 5.75 4.84 3.53

Salvage value 61.51

Net cash flow -76.00 14.20 25.44 26.18 26.26 24.44 22.63 82.34

Post Tax IRR 27.90%

SENSITIVITY ANALYSIS

PARTICULAR IRR BREAK-EVEN DSCR (%) (%)

Normal 27.90% 35.59% 2.26 5% decrease in sales 21.45% 42.80% 1.87 5% inc. in cost of raw material 25.15% 38.30% 2.10

ASSUMPTION SUPPORTING PROJECTED PROFITABILITY STATEMENT

1. INSTALLED CAPACITY

No. of granite slicing machine 2 No.s Capacity per hour 12 Sqft No. of working hours per day 20 hours No. of working days per year 330 days Total Capacity 1, 58,400 Sqft.

Capacity Utilization:

1st year 65% 2nd year 75% 3rd year 85%2. SELLING PRICE The selling price of panels is estimated at Rs. 100 per Sqft Conservatively.

3. RAW MATERIALS

The cost of raw material is estimated at Rs. 40 per Sqft.

4. CONSUMABLES

The costs of the consumables such as blades, abrasives are estimated at Rs. 15/- per Sqft.

5. POWER

The power consumption is estimated at Rs. 5 per Sqft..

6. WAGES

The salaries and wages are estimated at Rs. 5.46 lakhs with an yearly increase of 10% per annum.

7. REPARIESS & MAINTEANANCE

Repairs & maintenance is provided at 2.5% pf cost of fixed assets with an yearly increase of 10%.

8. OTHER FACTORY OVERHEADS Insurance is provided @ 1% of cost of fixed assets, rent, rates, and taxes are estimated at Rs.5, 000 Per month with an yearly increase of 10%, misc. factory expenses are estimated at Rs. 5,000 per Month with an yearly increase of 10%.

9. ADMINISTRATIVE EXPENSES

Administrative expenses are provided at Rs. 3.60 lakes per annum and expected to increase by 10% per annum.

10. SELLING EXPENSES

Selling expenses are provided at 2.5%of sales.

11. I NTEREST

Interest on term lown is estimated @ 16% and term loan is repayed in 28 quarterly installments with a moratorium period of one year.

Interest on working capital is estimated @ 16.5% p.a.

12. INCOME TAX Provision for income tax is made as per income tax act @ 38.5%.

APPPORTIONMENT OF PER-OPEATIVE EXPENSES

Rs.Lacs Sl.No PARTICULARS ACTUAL PRE-OD. TOTAL COST EXPENSES COST

1. Land & site developments 5.73 0.53 6.26 2. Building & civil works 19.20 1.79 20.99

3. Plant and machinery 39.95 3.72 43.67 4. Misc.fixed assets 1.00 0.09 1.09

Total 40.95 3.81 44.76

ESTIMATION OF DEPRECIATION – SLM METHOD

Rs.Lacs Sl.No PARTICULARS TOTAL DEPRECTION AMOUNT COST RATIO(%)

1. Land & site developments 6.26 0.00 0.00 2. Building & civil works 20.99 3.34 0.70

3. Plant and machinery 43.67 11.31 4.94 4. Misc.fixed assets 1.09 7.07 0.08

Total 44.76 5.72

ESTIMATION OF DEPRECIATION – VDV BASIS

Rs.Lacs PARTICULARS BUILDINGS PLANT & MISC. TOTAL MACHINERY F. ASSETS

RATE OF DEPRECIATION (%) 10.00 25.00 10.00

1ST YEAR - Cost 20.99 43.67 1.09 65.75- Depreciation 1.05 10.92 0.11 12.08

2nd YEAR - VDV 19.94 32.75 0.98 53.67 - Depreciation 1.99 8.19 0.10 10.28 3rd YEAR - VDV 17.94 24.56 0.89 43.39 - Depreciation 1.79 6.14 0.09 8.02

4th YEAR - VDV 16.15 18.42 0.80 35.37- Depreciation 1.61 4.61 0.08 6.30

5th YEAR - VDV 14.53 13.82 0.72 29.07 - Depreciation 1.45 3.45 0.07 4.98




COMPUTATION OF INTERST ON TERM LOAN

Rs.Lacs DETAILS OPENING INSTAL. CLOSING INTERSET TOTAL BALANCE BLANCE 16.00%

1990-00 – 1st Quarter 45.00 0.00 45.00 1.80 2nd Quarter 45.00 0.00 45.00 1.80 3rd Quarter 45.00 0.00 45.00 1.80

4th Quarter 45.00 0.00 45.00 1.80 7.20 Repayment 0.00

2000-01– 1st Quarter 45.00 0.00 45.00 1.80 2nd Quarter 45.00 3.46 41.54 1.80 3rd Quarter 41.54 0.00 41.54 1.66














No.of Installments 13.00

COMPUTATION OF INCOME TAX R.s Lacs

As on March 31st 2000 2001 2002 2003 2004 2005 2006 2007

1. Profit before taxation 11.59. 16.53 22.03 21.82 21.46 20.96 20.32 19.502. Add.St. Line Depreciation 5.72 5.72 5.72 5.72 5.72 5.72 5.72 5.723. Less: VDV Deprecation 12.08 10.28 8.02 6.30 4.98 3.96 3.18 2.574. Profit subject to taxation 5.23 11.97 19.73 21.24 22.20 22.72 22.86 22.655. Balance/ (loss) carried forward 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6. Nat at 10.5% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.007. Tax at 38.5% 2.01 4.61 7.59 8.81 8.55 8.75 8.80 8.72

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