Sip Project Amrita

8/4/2019 Sip Project Amrita

1/73

Inkwest

Management Consultants (P) Ltd.

1

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)


2/73

Inkwest


2

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.


3/73

Inkwest


3

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)


4/73

Inkwest


4

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.


5/73

Inkwest


5

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.


6/73

Inkwest


6

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:


7/73

Inkwest


7

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


8/73

Inkwest


8

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


9/73

Inkwest


9

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.


10/73

Inkwest


10

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.


11/73

Inkwest


11

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.


12/73

Inkwest


12

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.


13/73

Inkwest


13

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.


14/73

Inkwest


14

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.


15/73

Inkwest


15

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.


16/73

Inkwest


16

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.


17/73

Inkwest


17

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


18/73

Inkwest


18

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.


19/73

Inkwest


19

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.


20/73

Inkwest


20

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:


21/73

Inkwest


21

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.


22/73

Inkwest


22

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


23/73


24/73

Inkwest


24

6.6Process Flow Chart for Reclaim Rubber

6.7Plant Capacity

AUTO

CLAVE

PRE-

REFINER

EXTRUDER

REFINER

FINAL

PRODUCT

PROCESSOIL

&

RECLAIMING

AGENT

RUBBERCRUMB


25/73

Inkwest


25

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


26/73

Inkwest


26

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


27/73

Inkwest


27

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


28/73

Inkwest


28

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.


29/73

Inkwest


29

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 -


30/73

Inkwest


30

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


31/73

Inkwest


31

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


32/73

Inkwest


32

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


33/73

Inkwest


33

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.


34/73

Inkwest


34

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


35/73

Inkwest


35

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


36/73

Inkwest


36

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.


37/73

Inkwest


37

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.


38/73

Inkwest


38

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


39/73

Inkwest


39

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


40/73

Inkwest


40

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


41/73

Inkwest


41

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


42/73

Inkwest


42

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




43/73

Inkwest


43

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(%)


44/73

Inkwest


44

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.


45/73

Inkwest


45

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.


46/73

Inkwest


46

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.


47/73

Inkwest


47

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.


48/73

Inkwest


48

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.


49/73

Inkwest


49

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


50/73

Inkwest


50

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


51/73

Inkwest


51

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


52/73

Inkwest


52

TABLE- 11.2

ANALYSIS OF BALANCE SHEET

Rs. in Lacs


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


53/73

Inkwest


53

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


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


54/73

Inkwest


54

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


55/73

Inkwest


55

TABLE-11.3

RATIO ANALYSIS

CALCULATION OF DSCR (NET)(DEBT SERVICE COVERAGE RATIO)


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


56/73

Inkwest


56

CALCULATION OF CURRENT RATIO &DEBT EQUITY RATIO


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


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


57/73

Inkwest


57

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


58/73

Inkwest


58

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


59/73

Inkwest


59

TABLE11.6

SENSITIVITY ANALYSIS

REDUCTION IN SALES/INCOME PRICE

BY 5%

Rs./Lacs


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


Sub total 11.12 84.13 89.13 93.76 98.02 94.9



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


60/73

Inkwest


60

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



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


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



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


61/73

Inkwest


61

UTILIZATION BY 5%

Rs/lacs


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



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


Cash Accruals 12.36 68.25 77.95 88.05 98.54 100.


Sub total 18.74 91.65 97.15 102.30 107.09 103.6



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


62/73

Inkwest


62

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


63/73

Inkwest


63

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


64/73

Inkwest


64

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


65/73

Inkwest


65

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


66/73

Inkwest


66

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

Documents

Sip Project Amrita