Project Report for Processing of Marble & Granite - Zumosun

Mangal Global Marbles Private Limited

Project Report for Processing of

Marble & Granite Deploy and Prepared by – Zumosun Group

The details and figures mentioned in the project report has been arrived on the basis of information provided by the company and the discussions with Management of the company. AVCS & Associates will not be responsible for any loss incurred to any bank/financial institution for the financial assistance granted on the basis of this project report.

Mangal Global Marbles Private Limited Project Report - Aug 2018

Private & Deploy and Prepared: - Zumosun Group

S.

No.

Particulars Page No

1. Preface

2. The Proposal

3. The Company and its management

4. Assessment of the Project and its Cost

5. Justification of Term Loan and its repayment

6. Products, Production Process, Production Capacity And Sales

7. Assessment Of Major Operational Costs

8. Market Outlook

9. Profitability Projections & Other Indicators Of Financial Health

10. DSCR (Debt Service Coverage Ratio)

11. Balance Sheet Analysis

12. Working Capital Assessment

13. Security Against Bank Finance

14. Schedule Of Implementation

15. Swot Analysis

16. Conclusion



1. PREFACE

Mangal Global Marbles Private Limited (the Company) formerly known as Mihir Tours And Travels Private Limited was incorporated under the Companies Act 1956 and had been originally issued a certificate of incorporation on 04th March 1988 by the ROC, Jaipur, Rajasthan with CIN - U14200RJ1998PTC014672. The Company’s name and object clause was changed and a revised Certificate of Incorporation was issued by ROC, Rajasthan on 01 February 2013. As per the fresh certificate issued, the company has the following main objectives:-

1. To manufacture, fabricate, design, engrave, assemble, refine, treat, cut, mine, crush, grind, saw, dress, finish, polish, glaze, process, wash, screen, acidise, wax and prepare for market, import, export, purchase, sell or act as agents, traders,' brokers, stockists, distributors, suppliers and dealers in all kinds, shapes, sizes, varieties of Marbles, stones, tiles, blocks and slabs of granite, agglomerated marble, all products of cultured marbles, quartz, precious and semi-precious stones (including artificial stones) laterities, lime stones, soap stones, sand stones, slate stones, silica stones, building stones and all mineral products and items- and any waste or by products thereof.

2. To procure, purchase, take on lease, sub-lease, contract or otherwise acquire and deal with any mines, mining rights and concessions and prospecting or development rights at any place and to acquire by purchase, lease, sub-lease, contract or otherwise land containing minerals of all descriptions including marble, granite, quartz, lignite, base metals, precious, semi-precious stones, decorative stones and rocks and minerals of economic industrial importance in any part of the world and any interest therein and to explore, work, develop and turn to account the same.

3. To carry on all or any of the business of prospecting, exploring, opening and working mines, drill and sink shafts or wells and to pump, refine, raise, dig and quarry for stones, coal, earth, limestone and other minerals and to fabricate or run gangsaw machines, cutting tools, machine tools and other allied materials.

4. To carry on business as importers, exporters, traders, buyers, sellers, producers, processors, makers, convertors, retailers, wholesalers, fabricators, repair, suppliers, packers, movers, preservers, stockists, agents, sub-agents, merchants, distributors, consignors, jobbers, brokers, concessionaries or otherwise deal in all kinds of machines, accessories, spare parts, cutter machines and other related items required and used in the Marble and mineral business.

The company at present is involved in trading of Marble and Granite Slabs and Tiles and has

planned to set up its own manufacturing unit of Processing of Marble and Granites at E-267,

Industrial Area, Kishangarh, Ajmer , Rajasthan with following capacities of Installed Machines :-

Particulars Multi Granite

Cutter - 9 blade Single Granite Cutter - 5 blade

Marble Cutting - Gangsaw

Granite Polisher

Installed Capacity (per month) - in sq ft 40,000 20,000 2,00,000 2,00,000

No of Working Hours in a Day Single Shift 10 10 10 10

No of Working days in Month 25 26 26 30

No of Machines 2 1.00 1.00 1.00

Max. Installed Production capacity (sq ft per month) 80,000 20,000 2,00,000 1,00,000



Max. Installed Production (capacity sq ft per annum) 9,60,000 2,40,000 24,00,000 12,00,000

The products the company are Processed Marble & Granite Slabs from Raw Blocks (used in

construction of homes, hotels, malls, industries etc.) to be sold in domestic as well as international

market.

At present, the land located at E-267, RIICO Industrial Area, Kishangarh, Ajmer, Rajasthan having

total area admeasuring 4515 Sq. Mtrs. is used as warehouse for the traded goods. The company

proposes to set up its manufacturing unit by installation of new machineries which has been

separately discussed in Annexure -I (Term loan). The factory location is about 30 km from the city of

Ajmer and Approx 100 Km from Jaipur. The site is ideally suited considering the following locational

advantages:

Regular availability of the raw material used

Availability of requisite area and dimensions of the Plots

Availability of Infrastructural facilities

All infrastructure facilities such as labour, water, power, transportation are easily available.

The site is well connected with State and National Highway and is in proximity to major markets like

Gujarat, Rajasthan, Madhya Pradesh, Maharashtra etc.

1. Borrower Profile

1. Borrower's Profile 1.1 Address of the Registered Office / Corporate office

Email Address:

21 C, BARWARA HOUSE COLONY, CIVIL LINES,

JAIPUR Jaipur RJ 302006 IN

Tel: 91-9829072941

Email: [email protected]

1.2. Constitution Pvt Ltd Company

Registration No: U14200RJ1998PTC014672 dated 04/03/1988 registered under ROC Jaipur, Rajasthan

1.3. Activity: Manufacturing & Trading of Marble Slabs, Tiles and

Granite

Group / Promoters S.

No.

Name of the

directors

DIN NO

1 Shri Sandeep Maloo 01145616

2 Shri Ashutosh Mantri 06386049

3 Shri Raghav

Muchhal

07904725

CEO Shri Sandeep Maloo

Date of incorporation 04/03/1998

1.4. Manufacturing units / Location E-267, Industrial Area, Kishangarh, Ajmer , Rajasthan

http://www.mca.gov.in/mcafoportal/companyLLPMasterData.do





Pricing (Requested) For Cash Credit Limit: Preferential Rate of Interest for SME unit ranging between 9.50% to 11.00% pa For Term Loan: Preferential Rate of Interest for SME unit ranging between 10.00% to 11.50% pa

2. THE PROPOSAL

The company is looking for financial assistance/funding from Bank/Financial Institution as per details

mentioned hereunder:-

[i] Fund Based Working Capital Limits by way of Cash Credit Limit at Rs. 310.00 Lacs against

hypothecation of stock/book debts under preferential Interest rate scheme for SME.

[ii] Term Loan of Rs. 220.00 Lacs to part finance the project of expansion of installed production

capacity of Granite and Marble with an estimated cost of project of Rs. 622 Lacs under preferential

Interest rate scheme for SME.

Fund Based Credit facility Required & Requested Amount (INR LACS)

TERM LOAN

The Term Loan is proposed for and against Land, Building & Plant &

Machinery (Imported & Indigenous) incl. Electrification.

TL to be repaid in 96 Monthly Instalments (MI) of Rs. 2.44 Lac (plus

interest thereon as and when applied) with about 6 months of

moratorium period. The Monotorium period to be from Oct 2017 to

March 2018.

The first instalment is projected to be paid from April 2018 the last

instalment would be paid in Sept 2025. The Interest is calculated

@11.00% p.a.

220.00

Working Capital

Against hypothecation of Stock and Book debts. Interest on the same is calculated @ 10.50% p.a.

310.00

TOTAL 530.00

Particulars No Value Amount (INR) Amount

(IN LACS)



COST OF PROJECT

I. FIXED ASSETS

Plant & Machinery

Multi Granite Cutter 1 54,00,000 54,00,000 54.00

Gangsaw 1 56,00,000 56,00,000 56.00

Single Granite Cutter 1 14,50,000 14,50,000 14.50

Raisin Plant 1 48,00,000 48,00,000 48.00

Line Polishing Machine 1 86,00,000 86,00,000 86.00

Double Grider Gantry Crane 1 18,50,000 18,50,000 18.50

Auto Slab Polishing Machine 1 7,00,000 7,00,000 7.00

Other Equipment & Machinery

17,00,000 17,00,000 17.00

Total Machinery Cost (A) 3,01,00,000.00

301.00

Other Fixed Assets Shed & Other Civil Work

Construction and value addition at factory 2,44,46,000.00 244.46

Total Other Fixed Assets (B) 2,44,46,000.00 244.46

TOTAL FIXED ASSETS (I=A+B) 5,45,46,000.00

545.46

25% of WC i.e 25% of Rs. 310.00 lacs 77,50,000.00

77.50

TOTAL MARGIN MONEY FOR WC (II) 77,50,000.00

77.50

TOTAL PROJECT COST (I+II) 622,96,000.00 622.96

SOURCE OF FINANCE

Term Loan @ 35% 35.31% 220,00,000.00

220.00

Promoter Contribution @ 65% 64.69% 402,96,000.00

402.96

3. THE COMPANY AND ITS MANAGEMENT

1) Mr. Sandeep Maloo - Director

Mr. Sandeep Maloo is aged about 42 years and is a Graduate from Rajasthan University. He is a

Chartered Accountant by qualification, who later explored his hands into business and is in the line of

finance and other business from last 20 years. He looks after the overall administration and financial

matters & will be key decision along with his co-directors for manufacturing and selling matters. He is

running several other Companies. The list of Companies in which he is a Director at present is as

follows:-

S. No.

CIN No. Company Name Directorship Since



1. U67200RJ2007PTC024893 Ally Insurance Broker Private Limited 24/08/2007

2. U37100MH2011PTC224733

Mangal Synnove Energies P. Limited 07/10/2013

3. U72900MH2011PTC216111

Mangal Compusolution Private Limited

21/06/2017

4. U27300MH2010PTC210540

Mangal Meta Forging Private Limited 07/10/2013

5. U72100MH2010PTC210275

Xploretech Global Solutions P. Limited 21/01/2017

6. L65990MH1961PLC012227 Mangal Credit And Fincorp Limited 07/02/2014

7. U55100MH2010PTC210589

Saahil Global Business Private Limited

24/12/2016

8. U74992MH2010PTC210007

E-Ally Commodities (India) P. Limited 07/10/2013

9. U72300MH2010PTC210514

Scarled Computech Private Limited 07/10/2013

10. U74900MH2010PTC208670

E-Ally Equities (India) Private Limited 07/10/2013

11. U45200RJ2010PTC032261 Standard Infra-Developers P. Limited 07/10/2013

12. U74140MH2006PTC230649

E-Ally Consulting (India) P. Limited 08/10/2013

13. U14200RJ1998PTC014672 Mangal Global Marbles Private Limited

01/06/2017

14. U45201RJ2004PTC019357 Bansiwala Real Estates Private Limited

03/06/2004

2) Mr. Ashutosh Mantri - Director

Mr. Ashutosh Mantri is aged about 45 years and has a High School Degree and is in the line of

manufacturing and processing of marble slabs, tiles and granites business from last 20 years. He

looks after the overall production and selling of the company. Mr. Ashutosh Mantri is also a promoter

director in the following Company:-

CIN No. Company Name Directorship Since

U14200MH2012PTC236269 VIBRANT GRANITE PRIVATE LIMITED 16/10/2012

3) Mr. Raghav Muchhal - Director

Apart from directors, the company operations are also supervised by Mr. Raghav Muchhal, aged 22

years is a B. Com Graduate, a young dynamic talent that has been associated with the Company for

past 3-4 years looking after Finance and Accounts and after gaining insight of the industry has been

recently nominated in the capacity of director by his uncle Mr. Ashutosh Mantri.

Names & Addresses of the Promoters / Directors / Partners / Proprietor: Director/GURANTORS Details



S. No. Name&

DOB

Designation Identi

fiers

DETAILS

DIN PAN Passport Others

1 Sandeep

Maloo

11/09/1975

DIRECTOR 01145

616

AFCPM

7905F

NA Aadhar –

8735234

53792

BUSINESS- Barwara House

21-C Civil Lines Jaipur

Rajasthan 302001

RESIDENCE Shree-Radhey

Barwara House 21-C Civil

Lines Jaipur Rajasthan 302001

2 Ashutosh

Mantri

28/06/1972

DIRECTOR 06386

049

ABBPM

5912F

H1884862 NA BUSINESS- Ambaji Marbles,

Opp. Oriental Bank Of

Commerce Lane, Near Bus

Stand Madanganj Kishangarh

Ajmer Rajasthan 305801

RESIDENCE- Nawadhar

Complex, Makarana Road,

Opp. Oriental Bank Of

Commerce Lane, Madanganj,

Kishangarh Rajasthan 305801

3 Raghav

Muchhal

12/11/1994

DIRECTOR 07904

725

CDAPM

2101D

NA Aadhar –

8500

9586

9005

BUSINESS- E-267, Industrial

Area, Kishangarh, Ajmer ,

Rajasthan

RESIDENCE- Ward No. 21,

House Number 17, Ahinsa

Path, Neemuch, Madhya

Pradesh – 458441 G50501352

[* Identifiers based on KYC guidelines]

Details of Share-holding pattern of Promoter Directors / Partners: Proposed [Rs.]

SR

NO

NAME OF

THE SHARE

HOLDER

NO OF

EQUITY

SHARE

Relation % of

Share

holding

NOMINAL

AMOUNT

PER

EQUITY

SHARE

PREMIUM

AMOUNT

PER

EQUITY

SHARE

TOTAL

AMOUNT

1 Mangal Credit

Fincorp Priavte

Limited

15000 Holding

Company

60 10.00 0 150,0000

2 Ashutosh

Mantri

6000 Promoter

Director

24 10.00 0 60,000

3 Raghav

Muchhal

4000 Promoter 16 10.00 0 40,000



TOTAL 25000 100 250,000

4. ASSESMENT OF THE PROJECT AND ITS COST

a. Proposal: Sanction of Term Loan of Rs. 220 Lacs and Working Capital Limit of Rs. 330 Lacs for

setup of unit for manufacture and processing of Marble Slabs and Granites with an estimated cost of

project of Rs. 622.00 lacs under SME Marble Plus.

b. Project / Purpose: The directors have ample experience in the trading line of activity and to cater

the emerging demand, the promoters of the company have decided to set-up a manufacturing and

processing unit.

i) Description : Various machines as per quotation sourced by the Company.

ii) Key Project Parameters

Project Cost 622.96 LC sub-limit within Debt ---

Debt 220.00 Bank Guarantee --

Equity 402.96 SBI share in Debt 100%

D/E Ratio 0.35:1 SBI share in LC --

Tenor of the loan 8 Years SBI share in BG --

Gross avg DSCR 4.90 Derivative Limit --

Min. Security Margin 4.01 SBI Share in Total exposure 100%

Promoter's contribution 65%

c) i) Appraised by : In house.

ii) Syndicated by : None

d) Details of TEV Study (if proposed for waiver, justifications to be given): The project involves

installation of machineries & Construction of factory building. Keeping in view with the size of the

project and promoters rich experience in the field, we propose that vetting of the Project by an outside

agency may not be insisted upon.

e. Cost of the project and means of finance:

COST OF PROJECT MEANS OF FINANCE

Particulars Amount Particulars Amount

Equity



Land and Site Development 0 (i) Equity Shares-Promoters 278.75

Building & Shed 232.46 (ii) Equity Shares-Others

Plant & Machinery (iii) Pref. Shares

- Imported (iv) Unsecured Loan 124.21

- Indigenous 301.00 Total Equity Contribution (a) 402.96

Misc. Fixed Assets

Interest during construction -- Debt :

Working Capital Margin 77.50 TL towards Purchase of Machinery 220.00

Others 12.00

Preliminary exp Total Debt Component (B) 220.00

Non current assets

Total 622.96 Total (A) 622.96

Debt: Equity: (B/A): 0.35:1 Promoter's contribution: a/A 65%

f. Remarks on cost of the Project & means of finance (in brief):

The Total cost of Project is Rs. 622.96 Lacs and the Promoters are going to contribute Rs. 278.75

Lacs @ 100% margin and request for Term Loan of Rs. 220.00 Lacs for a period of 8 years including

moratorium of 6 months. The Promoters stake in the project is around 65%. Consequently, project

debt – equity ratio would work to 0.35:1, which is well within the indicative level of 2:1.

The promoters of the company will infuse Rs. 400 lacs as Capital.

g. Project implementation & disbursement schedule:

Sr. No. Activity Commencement Completion

1 Land - Already acquired

2 Construction Already started Completion by 5th November

2017

3 Machinery Already Ordered 15th December 2017

4 Power Temporary Connection Received.

Final Connection after completion

---

5 Installation --- Last 2 weeks of December

2017

6 Commercial

Prod.

1st week of January 2018

(i) Deal Diagram: NA

(ii) Location: The factory shall be located at E-267, RIICO Industrial Area, Kishangarh, Ajmer ,

Rajasthan. The plot is of 4515 Sq. Mtrs. i.e. 5398 Sq Yards and the factory is in the Industrial Area.

(iii) Land: The Company has already acquired the above land.

Plant & Machinery: The company has already ordered various Plant & Machinery as per their requirement. Total cost of

plant & machineries based on quotations sourced by the company from various suppliers. Brief

particulars of the cost are as under:



S.No. Particulars Description Qty. Name of

Supplier

Price

(including

Taxes)

Total Amount

1 Gangsaw Gangsaw are used for

cutting stone block, like

granite and marble. It can

also cut through thick

concrete and slabs of other

quarried blocks of stone

such as soft stone

limestone, or travertine into

desired sizes.

1 Rosava 5600000 5600000

2

Multi Granite

Cutting Machine

Machine similar to gangsaw

that cuts granite raw block

into slabs.

2 Karam

Machine

Tools

2700000 5400000

3. Single Cutter The machine is reliable for

sawing of block into slab of

various thicknesses.

1 Jai Ganpati

Machine

Industries

1450000 1450000

4. Raisin Coating

Plant

The Raisin is a liquid and

applied on slabs and tiles for

shining of the cut slab/tile.

1 Rosava 4800000 4800000

5. Line Polishing

Machine

The cut slabs are polished

before raisining for

smoothening of surfaces.

1 Karm

Machine

Tools Pvt.

Ltd.

8600000 8600000

6. Double Grider

Gantry Crane

Crane that offers

outstanding load capacity at

minimum deadweight. For

movement of goods within

the factory premises

1 Sheikh

Engineering

1850000 1850000

7. Auto Slab

Polishing

Machine

Another automated polishing

machine

2 The Power

Mech

350000 700000

8. Other

Equipments &

Machinery

Other tools and equipments

to be used in running of

machines along with regular

spare parts

1 Miscellaneous

Vendors

1700000 1700000

TOTAL

3,01,00,000

Add provision towards cost escalation of machineries @ 5%** 15,05,000

TOTAL 3,16,05,000

** - to be funded by the company only

The company has confirmed that the quotations of machineries are still valid. Any cost overrun

due to time overrun will be borne by the company only. THE COMPANY UNDERTAKES THAT THE

TERM LOAN PROCEEDS WILL BE USED FOR PAYMENT OF MACHINEY VENDORS ONLY.

Construction: The company has already started the construction work of shed and shall be complete

by 5th October 2017.



S.

No

Particulars Supplier Amount (Rs. in lacs)

1 Factory Shed & Civil Construction Local Supplier &

Contractors

232.46

TOTAL 232.46

Miscellaneous Fixed Assets: - Inculding computers, software, furniture fixtures, office equipments,

etc upto INR 12 lacs to be self funded.

Other Non-Current Assets: Nil

Technical Assistance: One of the director, Mr. Ashutosh Mantri, has a sound background in this

field. It doesn’t require any lengthy & tedious process but requires technical knowledge how to

operate the machines which is very simple and one can handle it very easily without much technical

knowledge. There is no necessity of additional technical assistance; supervisors are fine for the same.

Also the company installing the machines would provide basic initial assistance to operate them.

Lender’s Independent engineer/ Insurance consultant/ Legal Consultant: Not applicable

Marketing & Selling Arrangements:

Since the company is already trading in this sector with a turnover 15.25 Crore (Approx) at March

2017, it has a ready market available with them. The Directors have wide business contacts in this

industry. There is a good market potential for the marble and granite products. Due to easy

marketability and existing set market, no special selling arrangements are required.

Another group company, Vibrant Granite Private Limited is also engaged in similar trading activity for

last several years and have an established marketing network in Domestic as well as

International market which would assist MGMPL to market the manufactured slabs and granites

further.

5. PRODUCTION PROCESS PRODDUCTION CAPACITY AND PRODUCTION COST

(a). Production Process

Purchase of Raw Block The Company purchases raw block from local players as well as imports from few African countries.

Gang Sawing Once the Raw Block is purchased it goes to fabrication shop, the piece is loaded onto a platform with

hydraulic lifts underneath. Above this platform is the "gang saw," a row of dozens of 10 to 15 feet long

steel saw blades connected to a crankshaft via pistons (Figure 2). A giant engine turns the flywheel,

which turns the crankshaft and moves the saw blade back and forth horizontally at an incredible rate.

Each saw blade is spaced according to the desired thickness of the resulting slabs, usually around 2

cm. As the blades saw back and forth, the hydraulic lifts push the block up into them, cutting the

slabs. Once complete, two workers will gently tilt out each slab, attach a special clamp to it and use a

ceiling-mounted winch to lift it into the finishing area.

Polishing and Sealing



The slab is laid face down and a machine with a finely-graded, diamond-encrusted abrasive pad

grinds down the surface of the slab until it is smooth and vaguely reflective. A worker (or machine,

depending on the shop) then sprays on a uniform coat of epoxy sealer onto the surface and leaves it

to dry for 48 hours. Heat lamps can expedite this process. Once dry, the slab is flipped over and the

process repeated for the opposite side. Polished and sealed, the finished slabs then ship out to

retailers and distributors.

Waterjet Cutting and Wet Sawing

(Figure – 2) (Figure – 3)

Selling: At the retailer's show room, slabs are displayed for customers to view. After choosing a slab(s), the

customer gives the dimensions of his project (kitchen counters, ballroom floor or bathroom) to the

retailer, who maps the shapes onto the slab itself.

To cut these pieces out, fabricators traditionally used a process called "wet sawing" where circular

saws coated with tungsten carbide cut through the slab while continuous streams of water spray on

the blades to keep them from overheating.

Manufacturing Process Flow Chart of Marbles / Granites:

Raw Block Purchased

↓

Gangsaw / Multiwire Cutting Wiresaw

↓

Resining & Polishing

↓

Packing



(b). Production Capacity and Annual production: As per the technical specification of proposed additional set of Plant and Machineries for manufacturing of Marble Slabs and Granites, the installed capacity along with capacity utilization and the production quantity, product wise, is tabulated below:-

Particulars 1. Multi Granite Cutter - 9 blade

2. Single Granite Cutter - 5 blade

Marble Cutting - GANGSAW

Granite Polisher

Installed Capacity (per month) - in sq ft 40,000.00 20,000.00 2,00,000.00 2,00,000

No of Working Hours in a Day Single Shift 10.00 10.00 10.00 10.00

No of Working days in Month 25.00 26.00 26.00 30.00

No of Machines 2.00 1.00 1.00 1.00

Max Intalled Production capacity (sq ft per month) 80,000.00 20,000.00 2,00,000.00 1,00,000

Max Intalled Production capacity sq ft per annum) 9,60,000.00 2,40,000.00 24,00,000.00

12,00,000

6. SALES, OPERATIONAL COST AND PROFITABILITY

The company proposes to operate the above mentioned machines using funds from own contribution

and proposed term loan from bank. Apart from the sales generating out of production from above

machines the company has also projected some business through job work as well, full details of

which are mentioned hereunder:-

As per the information made available by the company, the installed capacity of granite cutter

machines mentioned below at S. No. 1 & 2 are approx 1,00,000/- sq. ft per month. We have

considered the utilisation capacity level at 70%. Thereafter the sales projection comes as follows:-

No. Particulars 17-18 18-19 19-20 20-21 21-22 22-23

Granite Cutter

Machine

1 Installed Cutting

Capacity per month in

sq. ft

100000 100000 100000 100000 100000 100000

2 % of Operation 0.70 0.75 0.80 0.85 0.90 0.95

3 Production Quantity

Annual

(6=1*2)/100000

2.80

For 4

Months

9.00

9.60 10.20 10.80 11.40

4 Closing Stock of FG 0.70 0.75 0.80 0.85 0.90 0.95



5. Qty. Sold 2.10 8.95 9.55 10.15 10.75 11.35

6 Assumed Sales Price

per Sq. ft

100 105 110 115 121 126

7 Assumed Sales

Value (Lacs) (7=5*6)

210.00

939.75

1,050.50

1,167.25

1,300.75

1,430.10

Marble Cutter

Machine

8 Installed Cutting

Capacity per month in

sq. ft

200000 200000 200000 200000 200000 200000

9 % of Operation 0.70 0.75 0.80 0.85 0.90 0.95


Annual

(6=1*2)/100000

5.60

18.00

19.20

20.40

21.60 22.8

11 Closing Stock of FG 2.80 3.00 3.20 3.40 3.60 3.80

12 Qty. Sold

2.80

15.00

16.00

17.00

18.00

19.00

13 Assumed Sales Price

per Sq. ft @ 100 Rs.

180.00

186.00

193.00

199.00

206.00

214.00

14 Assumed Sales

Value (Lacs)

(14=12*13)

504.00

2,790.00

3,088.00

3,383.00

3,708.00

4,066.00

15 Granite Polishing

Job Work

16 % of Operation

0.70

0.75

0.80

0.85

0.90

0.95


Annual

(6=1*2)/100000

5.60

18.00

19.20

20.40

21.60

22.80

18 Utilised Towards Own

Production

2.80

9.00

9.60

10.20

10.80

11.40

19 Production Capacity

available for Job work

2.80

9.00

9.60

10.20

10.80

11.40

20 Job Work Price per sq

ft

26.00

27.00

28.00

29.00

30.00

31.00

21 Sales Price (INR) -

Granite Polish Job

Work

72.80

243.00

268.80

295.80

324.00

353.40

22 Sales Price (INR in

Lacs) 7 + 14 +21

786.80

3972.75

4407.30

4846.05

5332.75

5849.50

23 Trading Sales 1334.5 1160.25 1218.25 1280.5 1344.5 1411.8



24 TOTAL SALES

(10=22+23)

2486.80

5757.75

6281.55

6816.05

7401.25

8021.50

# The sales in Row 22 for the FY 2017-18 is only for 4 months after commencement of manufacturing

unit.

Sales : Manufacturing and Trading

The proposed products which the company will be manufacturing are Granite Slabs and Marble Slabs

to be sold in domestic as well as international market.

While arriving at projected sales, following assumptions have been taken:-

The company will commence commercial production from Nov 2017 as it is presumed that it will take 2-3 months in construction of factory and installations of machines.

The proposed products of the company are in huge demand and on basis of enquires made from promoters.

The company will operate at 70% of installed capacity in FY 2017-2018 and utilisation will increase steadily with 5% increase every year from 2018-2019 onwards (75% in F.Y. 18-19, 80% in F.Y. 19-20, 85% in F.Y. 20-21, 90% in F.Y. 21-22, 95% in F.Y. 22-23).

The company has submitted that the average sales price of Rs. 100 per ft of granite, Rs. 180 per sq ft of marble and Rs. 26 per sq ft of job work. The same has been used in projections of FY 2017-2018. The sale price is assumed to increase at average of 3-4% pa from base ASP in 2017-2018 in case of all products. Looking to the past experience of the promoters/directors, trading turnover of the company and sales assumption given by the company as above, the sales assume by the company may be considered reasonable and acceptable to us.

Profitability: The Company has assumed the cost of production and profitability which is as

under:

Cost of Production

Partic

ulars 17-18 18-19 19-20 20-21 21-22 22-23 23-24 24-25 25-26

Assu

med

Sales

Value

(Lacs)

–

Tradin

g

1,700.00

1,785.00

1,874.25

1,970.00

2,068.50

2,172.00

2,280.60

2,394.63

2,515.00

Manuf

acturi

ng

Sales

Granit

210.00

939.75

1,050.50

1,167.25

1,300.75

1,430.10

1,577.40

1,656.00

1,716.00



e

Manuf

acturi

ng

Sales

Marbl

e

50.40

279.00

308.80

338.30

370.80

406.60

444.00

462.00

482.00

Granit

e

Polish

Job

Work

Incom

e

72.80

243.00

268.80

295.80

324.00

353.40

384.00

396.00

408.00

TOTA

L

SALE

S

(A+B)

2,486.80

5,757.75

6,281.55

6,816.05

7,401.25

8,021.50

8,682.00

9,066.63

9,459.00

GP

Margin

on

Manuf

acturin

g

8.02%

5.62%

5.62%

5.42%

5.25%

5.63%

5.33%

5.42%

5.42%

Cost of

Produc

tion on

Manuf

acturin

g 91.98% 94.38% 94.38% 94.58% 94.75% 94.37% 94.67% 94.58% 94.58%

Cost

of

Produ

ction

(Rs. In

Lacs)

2,287.24

5,448.10

5,952.67

6,474.85

7,042.31

7,596.26

8,237.21

8,580.39

8,932.34

Alloca

tion

OF

COP

Materi

al

2107.685 4591.417 5005.326 5436.545 5904.979 6365.098 6904.327 7216.53 7510.935

Power

& Fuel 4.9 23.25 24.8 31.62 33.48 38.285 43.4 46.5 46.5

Direct 4.9 23.25 24.8 26.35 27.9 29.45 31 31 31

mailto:Wages@7%25

mailto:Wages@7%25

mailto:Material@85%25

mailto:Power@5%25



Labou

r

Other

Direct

Expen

ses

169.75 810.18 897.744 980.339 1075.95 1163.427 1258.48 1286.36 1343.9

Cost

of

Produ

ction

(Rs. In

Lacs)

2,287.24

5,448.10

5,952.67

6,474.85

7,042.31

7,596.26

8,237.21

8,580.39

8,932.34

The company has submitted that normal GP margin in the line is between 5%-10%. The same has been taken at 8.02% for 2017-18 and thereafter at 5.25% - 5.63 (as the GP will reduce because to achieve the higher sales the company has to lower its margin).

The company has submitted that the cost of production will be allocated in the following proportion in various expenses head of manufacturing:-

S. No.

Head of Cost of Production

COP % Allocation

Comments

1 Labour Charges and Wages

0.21% This head represent the cost to be incurred by the company towards factory labour charges, loading unloading charges, transportation charges of goods and expenses towards Job Work. The company has submitted that it will have following work force will be required in first full year of operation at factory for production:-

Labour Type Number

Machine Operator 6

Helper to Machine Operator 3

Maintenance Helper 2

Supervisor 2

Other labor for lifting the slabs 5

Security Officer 1

Total 19

2 Raw Material 92.15% The raw material for finished product is marble and granite blocks which are easily available from the local mines as well as the company imports blocks from Italy and Vietnam. As the unit is located in the industrial area and number of units supplying blocks in the surrounding area, hence they do not envisage any difficulty in procuring the required raw materials. It is estimated that a granite block of average 20-22 ton is required for a production of 100-110 sq ft granite slab per ton from granite cutter and assumed to Cost for the Granite is projected @ Rs. 55.00 per metre (including wastage) as per the prevailing market rate.

mailto:OtherDirectExpenses@3%25






It is estimated that a marble block of average 20-22 ton is required for a production of 200-210 sq ft marble slab per ton from Marble gangsaw and assumed to Cost for the marble is projected @ Rs. 120.00 per metre (including wastage) as per the prevailing market rate. Considering present market conditions and prevailing market rate, the raw material cost proposed and projected seems reasonable, rational and justifiable.

3 Power & Electricity 0.21% The power and electricity is proposed to be at 0.21%. The power and electricity cost includes electricity expenses and DG running expenses.

4 Other Direct Expenses

7.42% The Other Direct Expense is proposed to be at 7.42% of total cost of production. Other Direct Expenses (include Cutting, sawing, polishing, resin and misc expenses) as proposed & projected seems reasonable/ rational and justifiable looking at the general industry trend.

PBT/Sales estimated at 3.18% for 4 months in first year of manufacturing operation as on 31.03.2017 and 2.20% for 1st full year of operation as on 31.03.2018. The company will incur capital cost for installation of modern machinery in order to start production activity, quality maintenance and reduction in the operation cost. Therefore in the initial year of operation where the interest and other cost component is higher, the estimated PBT/sales may be considered acceptable.

The Company has further projected improvement in profitability from FY2018-19 onwards, which appears to be reasonable.

Raw Material:

The raw material for finished product is marble and granite blocks which are easily available from the local mines as well as the company imports blocks from Italy and Vietnam. As the unit is located in the industrial area and number of units supplying blocks in the surrounding area, hence they do not envisage any difficulty in procuring the required raw materials. It is estimated that a granite block of average 20-22 ton is required for a production of 100-110 sq ft granite slab per ton from granite cutter and assumed to Cost for the Granite is projected @ Rs. 55.00 per metre (including wastage) as per the prevailing market rate. It is estimated that a marble block of average 20-22 ton is required for a production of 200-210 sq ft marble slab per ton from Marble gangsaw and assumed to Cost for the marble is projected @ Rs. 120.00 per metre (including wastage) as per the prevailing market rate.

Considering present market conditions and prevailing market rate, the raw material cost proposed

and projected seems reasonable, rational and justifiable.

Power:

The power required by the company is available from the Rajasthan Electricity Board (AVVNL). The company has applied for the connection and temporary connection is already been done on site once the construction is completed the permanent connection will be given to company for starting the operations. The position of Power in this area is comfortable and there is durable balance between aggregate demand and supply of power. Barring Breakdown and other technical faults, the position of power is satisfactory.



Man Power:

The semiskilled & skilled manpower is required for operating the machines & technically qualified it would enable to train the work man to the requirement if necessary. Cost of the labour is very reasonable this will facilitate to minimize the cost of operation. Following staff will manage the operation efficiently and effectively.

This head represent the cost to be incurred by the company towards factory labour charges, loading unloading charges, transportation charges of goods and expenses towards Job Work. The company has submitted that it will have following work force will be required in first full year of operation at factory for production:-

Labour Type Number

Machine Operator 6

Helper to Machine Operator 3

Maintenance Helper 2

Supervisor 2

Other labor for lifting the slabs 5

Security Officer 1

Total 19

Other Manufacturing Expenses The Other Direct Expense include Cutting, sawing, polishing, resin and misc expenses. Cutting, sawing, polishing, resin and misc expenses are assumed to be at 7.42% of total cost of production. Depreciation Depreciation on fixed assets is worked out as under.

I

Interest:

Interest is assumed at 11.00% on Term Loan and 10.50%working capital facilities.

Particulars Rate

Land 0.00%

Building 5.00%

Civil Work and shed 5.00%

Plant & machinery 15.00%

Other Misc Fixed assets 15.00%



7. DEBT SERVICE COVERAGE RATIO (DSCR)

DSCR

CALCULATION #

2017-

18 2018-19

2019-

20

2020-

21 2021-22

2022-

23 2023-24

2024-

25

2025-

26

PROJ. PROJ. PROJ. PROJ. PROJ. PROJ. PROJ. PROJ. PROJ.

Income 2486.80 5772.75 6307.30 6846.05 7432.75 8049.50 8701.40 9072.00 9444.00

PAT 53.08 84.67 103.81 112.96 122.39 160.73 163.90 182.67 191.24

Cash Accrual (A) 142.19 154.67 157.34 161.21 196.15 196.40 211.28 216.50

TL Intt (B) 22.72 19.50 16.27 13.04 9.82 6.59 3.36 0.47

TOTAL (A+B) 164.91 174.17 173.61 174.26 205.97 202.99 214.64 216.97

TL Repay (C) 29.33 29.33 29.33 29.33 29.33 29.33 29.33 14.70

TOTAL (B+C) 52.05 48.82 45.60 42.37 39.15 35.92 32.69 15.17

DSCR (A+B / B+C) 3.17 3.57 3.81 4.11 5.26 5.65 6.57 14.30

AVG DSCR 4.90

NET DSCR

4.85 5.27 5.36 5.50 6.69 6.70 7.20 14.73

NET AVG DSCR 6.53

Comments on DSCR (in brief): Overall Average Gross DSCR at 4.90 & Net DSCR at 6.53 is well

above the minimum stipulated level [1.75(Gross) & 2(Net), as per Bank’s Loan Policy] may be

considered satisfactory.

8. REPAYMENT SCHEDULE AND SECURITY MARGIN

(a). REPAYMENT SCHEDULE

Pricing

for TL

11.00% p.a. (Fixed) for first one year thereafter normal rate of interest as per credit

rating and credit limit of the borrower under SME Marble Plus. Bank shall at any

time and from time to time be entitled to vary the margin based on the Credit Risk

Assessment of the borrower and the Base Rate at its discretion.

Tenure

for TL

8 years including moratorium of 6 months

Repayment

Schedule

for TL

The term loan shall be repayable in 90 monthly installments (89 installments of Rs

2.44 Lacs each from April 2018 after a moratorium of 6 months. Interest will be paid

as and when applied.

Disbursement Schedule for TL

Bank should ensure that the payment is made Direct to suppliers of machineries. Charges may be reimbursed to the Company on the basis of relative bills/invoices or proof evidencing payment of such expenses. Bank manager should ensure to pay the bills through Banker’s cheque / Demand Draft and also the related bills /invoices kept on record.



(b). SECURITY MARGIN

PARTICULARS

2017-

18

2018-

19

2019-

20

2020-

21

2021-

22

2022-

23

2023-

24

2024-

25

2025-

26

EST. PROJ. PROJ. PROJ. PROJ. PROJ. PROJ. PROJ. PROJ.

WDV OF FIXED ASSETS 765.40 717.88 667.03 622.64 583.82 573.40 540.90 512.29 487.03

ASSETS CHARGED TO

OTHERS

NET WDV OF FIXED

ASSETS 765.40 717.88 667.03 622.64 583.82 573.40 540.90 512.29 487.03

TL OUTSTANDING 190.67 161.33 132.00 102.67 73.33 44.00 14.67 0.00 0.00

SECURITY MARGIN 574.74 556.55 535.03 519.98 510.48 529.40 526.23 512.29 487.03

% MARGIN

75.09

%

77.53

%

80.21

%

83.51

%

87.44

%

92.33

%

97.29

%

100.00

%

100.00

%

FIXED ASSET

COVERAGE RATIO 4.01 4.45 5.05 6.06 7.96 13.03 36.88

Minimum Security Margin:4.01

Comments on security margin: The minimum security covers at 4.01 times in FY-18 which may be considered satisfactory for the proposed Term Loan and with the repayment of the TL in due course the coverage would

increase gradually.

9. Break EVEN ANALYSIS

BREAKEVE

N

ANALYSIS

2014-

15

2015-

16

2016-

17

2017-

18

2018-

19

2019-

20

2020-

21

2021-

22

2022-

23

2023-

24 2024-25

2025-

26

Breakeven-

Sales

(F/C*S)

205.

52

771.

55

1150

.32

1111

.56

3465

.63

3500

.22

3687

.78

3900

.96

3725

.03

4068

.68 3907.89 3990.45

Breakeven-

Sales (%)

19.0

6%

51.9

1%

58.0

5%

44.3

5%

59.5

6%

54.9

8%

53.3

8%

52.0

2%

45.8

9%

46.3

8% 42.93% 42.10%

Breakeven-

Installed

Capacity

(F/C*U)

0.00

%

0.00

%

0.00

%

31.0

5%

44.6

7%

43.9

8%

45.3

7%

46.8

2%

43.6

0%

46.3

8% 42.93% 42.10%

Cash

Breakeven-

Inst.

Capacity (F-

Dep/C*U)

0.00

%

0.00

%

0.00

%

20.8

1%

30.5

4%

31.8

5%

34.6

2%

37.3

8%

35.8

5%

39.1

0% 36.82% 36.88%



11. BALANCE SHEET ANALYSIS AND OTHER INDICATORS OF FINANCIAL HEALTH

(a) Synopsis of Balance Sheet: Rs. In Lacs

ASSETS 2016-17 2017-18 2018-19 2019-20

AUD. EST. PROJ. PROJ.

CURRENT Asset.

i. Cash & Bank Balance 65.37 1.82 2.08 4.55

ii. Receivables (< 6 months) 185.32 82.00 195.00 292.00

iii. Total Inventory 692.68 1079.62 1196.17 1277.06

iv Other current asset.- others includ adv payment made 76.59 27.00 42.00 54.00

TOTAL CURRENT Asset. (A) 1019.96 1190.44 1435.25 1627.61

FIXED Asset.

Gross Block 242.64 788.10 798.10 798.10

Less Cumulative Depreciation 2.40 22.70 80.22 131.07

2016-17 2017-18 2018-19 2019-20

LIABILITIES AUD. EST. PROJ. PROJ.

CURRENT LIABILITIES

Short Term Bank Finance (A) 310.00 450.00 550.00

Other Current Liabilities (B) (Total of i to iv) 785.92 484.48 486.44 453.47

i. Sundry Creditors 672.95 350.00 320.00 255.00

ii. Advance Payment Received 82.50 50.00 60.00 70.00

iii. TL Inst. Repayable in 12 Months

iv. All other current liab. includ. Advance payment recvd. 30.47 84.48 106.44 128.47

TOTAL CURRENT LIABILITIES (C)= (A+B) 785.92 794.48 936.44 1003.47

v. Term Loan- Funding Bank > 12 months 190.67 161.33 132.00

vi. Term Loan- Others > 12 months 502.57 475.00 475.00 475.00

x. DTL 0.76 1.77 4.65 7.19

TOTAL TERM LIABILITIES (D) (Total of v to x) 503.33 667.44 640.98 614.19

TOTAL OUTSIDE LIABILITY (E) = (C+D) 1289.25 1461.92 1577.42 1617.66

xi. PUC 2.50 438.00 438.00 438.00

xii.Reserv. & Surp. Incld. Share Prem. (excld Re-Val. Resv.) 13.86 65.93 147.72 248.99

xiii. Share Application Money

Net Worth (NW) (F) (Total of xi to xiii) 16.36 503.93 585.72 686.99

TOTAL LIABILITIES (G) (E+F) 1305.61 1965.84 2163.14 2304.65



Net Block [excluding Revaluation Reserves] (A) 240.24 765.40 717.88 667.03

a. Investments in Asso. & Sub.

b. Other Investments (> 12 months) 45.40

c. Receivables (> 6 months)

d. Others Non-current assets 10.00 10.00 10.00

Non Current Asset. (C) = (a to d) 45.40 10.00 10.00 10.00

Total Tangible Asset. (A+B+C = D) 1305.60 1965.84 2163.14 2304.64

a. DTA

b. Other Intangible Asset.

Intangible Asset. including DTA (E) = (a+b)

TOTAL Asset. (D+E) 1305.60 1965.84 2163.14 2304.64

(b) Movement in Total Net Worth: Rs. In Lacs

Movement of TNW:

2016-

17

2017-

18

2018-

19

2019-

20

2020-

21

2021-

22

2022-

23

2023-

24

2024-

25

2025-

26

AUD. EST.

PROJ

.

PROJ

.

PROJ

.

PROJ

.

PROJ

.

PROJ

.

PROJ

.

PROJ

.

Opening TNW (excluding Share

Application Money) 10.24 17.69 505.26 587.05 688.32 799.06 919.51

1078.4

7

1240.7

4

1421.9

8

Share Application Money

Add PAT (post DTL / DTA) 7.45 52.07 81.80 101.27 110.74 120.45 158.96 162.27 181.24 190.23

Add a) Increase in equity 67.00

b) Increase/Decrease in Share

Prem./Other Reserves 368.50

Add / Subtract change in intangible

Asset.

Deduct Prior year expenses

Deduct Dividend Payment

Subtract DTA

Closing TNW 17.69 505.26 587.05 688.32 799.06 919.51

1078.4

7

1240.7

4

1421.9

8

1612.2

1

Investment in Asso. & Subs.

Adjusted TNW 17.69 505.26 587.05 688.32 799.06 919.51

1078.4

7

1240.7

4

1421.9

8

1612.2

1

(c) Movement of Long Term Funds: Rs. In Lacs

LONG TERM

SOURCES

2016-

17 2017-18

2018-

19

2019-

20

2020-

21

2021-

22

2022-

23

2023-

24

2024-

25

2025-

26

AUD. EST. PROJ. PROJ. PROJ. PROJ. PROJ. PROJ. PROJ. PROJ.

Net Cash Accruals 8.45 73.38 142.19 154.67 157.34 161.21 196.15 196.40 211.28 216.75

Equity Funds (Net

Worth)

435.50

Term Loans > 1 YR -7.92 190.67 -29.33 -29.33 -29.33 -29.33 -29.33 -29.33 -14.67 0.00

All Other (other term

liab.) 408.97 -27.57 -20.00 -40.00 -55.00 -50.00

TOTAL 409.50 671.98 112.86 125.34 128.01 111.88 126.82 167.06 141.61 166.75



LONG TERM USES

Capex 545.46 10.00 0.00 25.00

All Others (Non

Current) -33.84 -35.40

TOTAL -33.84 510.06 10.00 0.00 0.00 0.00 25.00 0.00 0.00 0.00

LONG TERM

SURPLUS / 443.34 161.92 102.86 125.34 128.01 111.88 101.82 167.06 141.61 166.75

DEFICIT

Comments: Comments: There is no diversion of funds from short term source to long term uses.

The Company has envisaged surplus to strengthen the NWC. Hence considered reasonable and

may be accepted.

(d) Activity-wise cash flow analysis:

2016-17 2017-18 2018-19 2019-20


a. Net cash from operation -448.29 -389.85 2.77 35.06

b. Net cash from investment 37.89 -508.06 -7.00 4.00

c. Net cash from financing 359.72 834.36 4.50 -36.58

d. Net increase in cash -50.68 -63.56 0.27 2.47

(Rs. in Lacs)

CASH FLOW FROM OPERATING ACTIVITIES 2016-17

2017-

18

2018-

19

2019-

20


PBT 11.05 79.22 126.38 154.95

Add:

Interest & finance charges paid 41.33 74.24 106.17 107.25

Depreciation 0.79 20.30 57.52 50.86

Total of Non-operating exp. from investment / other

sources

Operating Profit before Working Capital Changes

(SUB TOTAL) 53.17 173.76 290.06 313.05

Add:

Decrease / Increase in Sundry Debtors -122.24 103.32 -113.00 -97.00

Decrease / Increase in Inventory -456.75 -386.94 -116.55 -80.89

Decrease / Increase in Loan & Advances -20.00 -10.00 -10.00

Decrease / Increase in Other Current Asset. -15.96 69.59 -5.00 -2.00

Increase / Decrease in Trade Creditors 124.46 -322.95 -30.00 -65.00

Increase / Decrease in Other payables -1.45 -1.05 28.56 22.43

Increase / Decrease in Other Current Liab -22.08 22.55 3.40 9.60

Less:

Total of Non-operating income from investment / other 4.05 2.00 3.00 4.00



sources

Provision for income tax 3.39 26.14 41.71 51.13

NET CASH FLOW FROM OPERATING ACTIVITIES (A) -448.29 -389.85 2.77 35.06

CASH FLOW FROM INVESTING ACTIVITIES

2016-

17

2017-

18

2018-

19

2019-

20

Sale / Purchase of fixed Asset <OR> Decrease / Increase in

CWIP

-

545.46 -10.00

Decrease / Increase in investment in Associates/Others 33.84 45.40

Decrease / Increase in Advance to suppliers of capital goods

Decrease / Increase in Other Non-Current Asset. -10.00

Decrease / Increase in intangibles incld. in pre-opr./Prel. Exp.

NOT Written Off

Total of Non-operating income from investment / other

sources 4.05 2.00 3.00 4.00

Less:

Total of Non-operating exp. from investment / other sources

NET CASH FLOW FROM INVESTING ACTIVITIES (B) 37.89

-

508.06 -7.00 4.00

CASH FLOW FROM FINANCING ACTIVITIES 2016-17 2017-18 2018-19 2019-20

Increase / Decrease in Secured Loans -7.92 190.67 -29.33 -29.33

Increase / Decrease in Other Long Term Borrowing 408.97 -27.57

Increase / Decrease in USL

Increase / Decrease in Secured WC limits

310.00 140.00 100.00

Increase / Decrease in Share Capital / Share Premium /

Share Application money

435.50

Less:

Payment of Dividend and Dividend Tax

Interest and finance changes paid 41.33 74.24 106.17 107.25

NET CASH FLOW FROM FINANCING ACTIVITIES © 359.72 834.36 4.50 -36.58

NET INCREASE / DECREASE IN CASH (A+B+C) -50.68 -63.56 0.27 2.47

Comments: None



Key Financial Indicators: (Rs in Lacs)

2016-17 2017-18 2018-19 2019-20


Net Sales 1524.99 2486.80 5772.75 6307.30

PBT 53.17 173.76 290.06 313.05

PAT 7.66 53.08 84.67 103.81

Cash Accruals 8.45 73.38 142.19 154.67

PUC 2.50 69.50 69.50 69.50

TNW 16.36 503.93 585.72 686.99

TOL/TNW 78.80 2.90 2.69 2.35

TOL/Adj. TNW 78.80 2.90 2.69 2.35

Current Ratio:

The company has estimated NWC at Rs. 395.83 lac as on 31.03.2018 & Rs. 499.08 Lacs as on 31.03.2018 which is 33.17% & 34.68% respectively of the TCA. Which is in line with the loan policy.

The company has estimated Current Ratio at 1.50 as on 31.03.2018 & 1.53 as on 31.03.2019 on account of Equity capital infusion to the tune of Rs. 435.50 lacs and proposed ploughing back of entire profit in the business which is in line with the minimum indicative level of 1.33.

The company has also estimated/projected ploughing back of entire profit in all projected years to strengthen the TNW consequently the current ratio will be improving in coming years.

TOL/TNW Ratio:

Despite of Proposed Cash Credit Limit of Rs. 310.00 Lacs and new Term Loan of Rs. 220 lacs, The company has estimated TOL/TNW at 2.91 as on 31.03.2018 on account of Equity capital infusion to the tune of Rs. 435.50 lacs and plough back of entire profit in the business as per CMA Data. It appears to be satisfactory and also the estimated TOL/TNW is well within the maximum indicative level of 3 as per loan policy guidelines.

With the plough back of profit and repayment of Term Loan instalment in due course, the TOL/TNW is supposed to improve in the coming years.

Further the company propose to stipulate that “the bank should ensure before release of the new term Loan facility and cash credit limit that the promoters/directors will raise the paid-up Capital at Rs. 67.00 Lacs along with share premium of Rs. 368.50 Lacs total Rs. 435.50 Lacs upfront. Further company would produce a certificate to this effect from a reputed firm of Chartered Accountants (statutory auditors of the Co), confirming increase in paid up share capital of the company to Rs.67.00 Lacs and share premium of Rs. 368.50 lacs total Rs. 435.50 Lacs in 2017-18 along with supporting papers/documents filed with ROC to this effect. This would be kept on record by the Bank.”



12. WORKING CAPITAL ASSESMENT

[A] Working Capital Limit by way of CC of INR 310.00 lacs

The company has estimated sales of Rs 2486.80 Lacs in four months of operation including the

existing trading sales for the first year and RS. 5772.75 lacs for the first full year of operation.

Therefore, the company requests for cash credit (hyp.) limit of Rs 310.00 Lacs for the current year

which may be considered reasonable.

a. Inventory & receivable levels: (Months*)

(Rs in Lacs)

PARTICULARS 2016-17 2017-18 2018-19 2019-20


SIP- Amount 367.62 438.68 460.24

SIP- Days 58 29 28

FG- Amount 692.68 712.00 757.49 816.82

FG- Days 174 113 50 50

Receivables- Dom.- Amt 185.32 82.00 195.00 292.00

Receivables- Dom.- Days 38 18 24

S. Cr- Amount 672.95 350.00 320.00 255.00

S. Cr- Days 129 51 25 18

OCA- Amount 141.96 28.82 44.08 58.55

Cash Cycle (days) 45 157 72 83

Comment on Holding Level

The raw material for finished product is marble and granite blocks which are easily available from the local mines as well as the company imports blocks from Italy and Vietnam. As the unit is located in the industrial area and number of units supplying blocks in the surrounding area, hence they do not envisage any difficulty in procuring the required raw materials. The company has to hold sufficient stock of raw material for smooth operation. The company has estimated its raw material holding level in the FY 2017-18 at 28 days and further estimated to improve at 13 days in the coming years which is adjusted in WIP holding level Which may be considered reasonable and acceptable to us.

Processing of raw material requires 1-2 days, therefore the company has estimated WIP holding

period of 1 days for the FY 2017-18. Which seems to be reasonable and may be acceptable to us.



To supply the goods in a very short period therefore, The company has estimated holdings of finished

goods at 39 days for the FY 2017-18.To maintain regular supply to buyers at envisaged level of

operation, it may be considered reasonable. To remain competitive in the business, the company

requires providing credit to buyers. Average realization period of receivables has been estimated at

38 days for the first year of operation therafter 18 days for the first full year of operation, it may be

considered reasonable.

The company has estimated and projected the creditor’s level at 51 days and 25 days, which may be consider in order. b. Assessed Bank finance

As the working capital requirement of the Company is above Rs 310.00 lacs, therefore, the working

capital requirement of the Company is to be assessed on PBS method only.

PBS Method (Rs in Lacs)

2016-17 2017-18 2018-19 2019-20


TCA 1019.96 1190.44 1435.25 1627.61

OCL 785.92 484.48 486.44 453.47

WC Gap 234.04 705.96 948.82 1174.15

NWC 234.04 395.96 498.82 624.15

ABF 0.00 310.00 450.00 550.00

NWC/TCA (%) 22.95% 33.26% 34.75% 38.35%

ABF/TCA (%) 65.98% 29.40% 22.30% 15.67%

OCL/TCA (%) 26.04% 31.35% 33.79%

OCA/TCA (%) 77.05% 40.70% 33.89% 27.86%

LC/SC (%)

LC LIMIT 0.00 0.00 0.00 0.00

Assessment of Domestic Book Debt sub-limit: Margin @ 40.00

2016-17 2017-18 2018-19 2019-20




Projected Turnover 1524.99 2486.80 5772.75 6307.30

Est./Proj. Book-debt level 185.32 82.00 195.00 292.00

Margin @50% 74.13 32.80 78.00 116.80

Min. eligibility for BD limit 111.19 49.20 117.00 175.20

Limit Recommended 0.00 310.00 450.00 550.00

Margin Details

Raw Material (Imported)

Raw Material (Domestic)

SIP

FG

Receivables (Exports)

Receivables (Domestic)

Drawing Power 878.00 1161.62 1391.17 1569.06

CC limit Recommended 0.00 310.00 450.00 550.00

Limit higher than DP (if any)

c. Assessment of EPC/PSC limits: Not Applicable d. Computation of LC limits for WC: Not Applicable e. Assessment of BG limit: Not Applicable f. Assessment of Credit Exposure Limit (Forward Contract Limit): Not Applicable g. Efficiency ratios:

2016-17 2017-18 2018-19 2019-20


Net Sales/TTA (times) 1.17 1.27 2.67 2.74

PBT/TTA (%) 0.85% 4.03% 5.84% 6.72%

Op Cost/Sales (%) 96.83% 93.91% 96.02% 95.91%

ABF/TCA (%) 26.04% 31.35% 33.79%

Inventory/Net Sales + Recv./Gross

Sales (days) 210 170 88 91

Interest / Cost of Sales (%) 2.84% 3.22% 1.93% 1.79%

ABF/Gross Sales (%) 12.47% 7.80% 8.72%

h. LFAR RATIOS:

2016-17 2017-18 2018-19 2019-20


Turnover 1524.99 2486.80 5772.75 6307.30



Increase in turnover % 1% 63% 132% 9%

PBDIT 53.17 173.76 290.06 313.05

Less : Interest 41.33 74.24 106.17 107.25

Net Cash Prft bf. tax & dep. 11.84 99.52 183.89 205.80

Less : Depreciation 0.79 20.30 57.52 50.86

Less : Tax 3.39 26.14 41.71 51.13

Profit after Dep & Tax(PAT) 7.66 53.08 84.67 103.81

Net Profit/Turnover (%) 0.50% 2.13% 1.47% 1.65%

Capital (Paid-up) 2.50 69.50 69.50 69.50

Reserves 13.86 434.43 516.22 617.49

Networth 16.36 503.93 585.72 686.99

Turnover / Capital Employd 93.21 4.93 9.86 9.18

Current Ratio 1.30 1.50 1.53 1.62

(Inventory/N.Sales)+

(Receivable/G.Sales)- days 210 170 88 91

TOL/TNW 78.80 2.90 2.69 2.35

[B] Sanction of Bank Guarantee (Financial) Limit: NA

13. SECURITY AGAINST BANK FINANCE

For Cash Credit Limit:

Primary: Exclusive charge by way of hypothecation of company’s entire current assets including raw material, stock in process, finished goods, store & spares, book debts, receivables including goods in transit along with documents of title to goods such as MTRs / RRs etc. Collateral: All primary & collateral security (present & future) which covers the Term Loan will also cover the CC Limit. Net Block of Rs. 765.40 Lacs as per Audited B/s as on 31.03.2018

For Term Loan Primary Security:

Exclusive charge by way of hypothication on Plant & Machinery, Electrical Installation, furniture & Office equipments

(present & future) Net Block of Rs. 765.40 Lacs as per Audited B/s as on 31.03.2018

Collateral: For Term Loan & Cash Credit Limit

[Rs. In Lacs]

Sr.

No

Particulars Owner Value

M.V R.V D.S.V /



1.

E-267, RIICO Industrial Area, Kishangarh, Ajmer ,

Rajasthan having total area admeasuring 4515 Sq.

Mtrs

In the name of the company M/s Mangal Global Marbles Pvt Ltd

252.84

(271.00)

214.91

(230.30)

176.99

(203.00)

(as per valuation dated 05.08.2017 by Purshottam Khandelwal and 2nd valuation is by B K Mathur)

Collateral: All primary & collateral security (present & future) which covers the Cash Credit Limit will also cover the

Term Loan Limit.

Guarantees: Personal guarantees of following having net worth of

[Rs. In Lacs]

Sr. Name Relation

Means

Immovable Movables Invest. in business

Borrowing Net Means

1. Sandeep Maloo

Dir

ect

ors

230.00 4.90 129.95 243.86 120.99

2. Ashutosh Mantri Xxx

3. Raghav Muchhal Xxx

Total Xxx

Security Coverage: To

[Rs.in Lacs] Security Coverage Existing Proposed

Including residual

value (%)

Excluding residual

value (%)

Including residual

value (%)

Excluding

residual value

(%)

Working Capital (%)

Primary: Stock & Book-debts -- -- 1164.44

(375.62%)

Term Loan- (%)

Primary: Net Block as on 31.03.18 -- --

765.40

[246.90%]



Collateral: for CC &Term Loan -- --

Comment on security creation, if

any

Total releasable value of the aforesaid properties is Rs. .00 Lac as per

the valuation report of Valuer (Overall Fund Based Credit exposure to the

Company will be Rs. 530.00 Lac. And this would be against total Securities,

both Primary & Collateral, worth Rs. ac.

Overall ACR would be in that context.



14. SCHEDULE OF IMPLEMENTATION

Sr. No. Activity Commencement Completion

1 Land - Already acquired

2 Construction Already started Completion by 5th November

2017

3 Machinery Already Ordered 15th December 2017

4 Power Temporary Connection Received.

Final Connection after completion

---

5 Installation --- Last 2 weeks of December

2017

6 Commercial

Prod.

1st week of January 2018

15. SWOT ANALYSIS

The marble industry of Rajasthan has a very old history, dating back to the time of Mughal Empire when the architectural marvel of the country - Taj Mahal - was built. Temples of Delwara in Mount Abu and Ranakpur are also testimonials of ancient marble industry of princely state of Rajasthan. In past, marble was sparingly used in temples, palaces and monuments. But now, it is widely used in hotels, high-rise buildings, shopping malls, residential flats, etc

The Indian marble industry is not only confined at production or supply of the marbles but export of highly acclaimed stones such as blocks, flooring, calibrated (ready to fix tiles), monuments, slabs, structural slabs, tomb stones, cobbles, cubes, sculptures, artifacts, pebbles, kerbs, and landscape garden stones has also been its important part, most of which are traded by the company.

The constant growth of Indian marble industry is because of the reason that they are highly acclaimed and possess characters like low cost, beautiful looks and longevity.

As the proposed new project is coming up at Kishangarh, requirement of all the infrastructural facilities including availability of Labour, Power, Roads and Transportation etc. would easily be satiated.

Satisfactory proposed organisational set-up with experienced and well- qualified personnel, details of which is already stated above under the title head ‘Key Personnel’. Involvement of the experienced key technical personnel gives an edge to the Company in terms of quality production and it negates the chances of error in continuous and qualitative production by the unit.

Try to know their weaknesses to work on them to convert it into their strengths.

Weakness (Managements’ views on mitigation of the same are included in brackets)

Training facilities not adequate.

Less Employee Participation.

Opportunities

Good demand for the proposed Product in Local & International Market.

Hotels and Hospitals etc. using products like Marbles & Granite

Enough scope of exporting the marble.

Threats

The use of ceramic tiles is increasing very much, thus substituting marble.



Import of Marble from various countries has been posing a threat for Marble Industry in India.

The manufacturing process of marble consume huge quantity of water, which is another problem in Rajasthan

The GST on marble has gone up to 28 % from the current tax incidence of 5% under the new indirect tax regime; this has upset the whole marble industry in Rajasthan.

Instability of National and International Govt. Policies, particularly related to Environment, Pollution, Safety and Hazards, Workers’ Welfare, etc., and any deviation from compliance & provisions related to any of the said concerned Act(s) or Law(s), including related to Environment, Factories Act, Labour Laws, Electricity, Excise, Customs, etc., may affect the operations of the Company. (Management has assured for total & timely compliance of all the relevant statutory requirements)

16. INDUSTRY SCENERIO

INTRODUCTION

India has major resources of marble, granite, sandstone, Kotahstone, quartzite & slate. Granite

resources are largely in South India and Marble deposits are largely in Western India (Rajasthan &

Gujarat).

Rajasthan is the dominant state, granite the dominant mineral, and marble is the leading raw material

export in the India marble & stone market

As of 2017, India is one of the fastest growing large economies in the world with ambitions to be a

global economic leader. India’s GDP is ranked as the sixth largest in nominal terms and the third

largest in terms of PPP (Purchasing Power Parity). Large youth population and corresponding low

dependency ratio, healthy savings and investment rates and increasing integration into the global

economy have all combined to provide India with an extremely favourable long-term growth

prospective. The Indian economy has the potential to become the world's third largest economy by

the next decade, and one of the two largest economies by mid-century.

Among the various high performing sectors in the Indian economy, the mining industry, of which the

India marble & stone market is an important part, is one such high performing sector. The Mining

industry in India is a major economic agent and contributes significantly to the economy of India. The

GDP contribution of the mining industry is in the 2.2% to 2.5% range but keeping in mind the various

end user industries that it supplies in the Indian industrial sector, the GDP of the total industrial sector

contributes around 10% to 11%. Mining done on small scale contributes around 6% to the entire cost

of mineral production. As per the Indian Labour Ministry, the Indian mining industry provides job

opportunities to around 700,000 individuals.

However, for an economy this size, India still relies heavily on a consumption based model, with net

exports being severely in the negative i.e. imports outstripping exports. India marble & stone market,

in this regard gains importance, as one of the few industries where India is not only a global leader,

but a huge net exporter. In this light, it becomes essential to examine the India marble & stone market

to try and glean what trends have led to the rise of the industry and what is set it guide it in the future.

The highest producer of stones

- Highest producer of dimensional stones in the world accounting for over 27% of the world stone

production.

- Over 2 million people are employed in stone sector.

Thus, the growth and all round development of this industry has a direct bearing on the improvement

of the economy of the nation.

MARBLE INDUSTRY

Indian marble is highly acclaimed in the international market. World famous Taj mahal is testimony of

exotic quality snow white marble from Makrana region.



Availability: In districts of Nagaur, Udaipur, Banswara, Jaipur Sirohi, Bhilwara, Ajmer, Bundi, Pali,

Dungarpur, Chittorgarh, Jaisalmer and Sikar, Rajsamand, Alwar .

Color & Pattern: Snow white, Creamish white, White with grayish/ black bands and Wavy patterns,

pink, pink with bluish bands, green, yellow, black, multi-color etc.

Export varieties: Snow white - very fine-grained, green and pink. Indian green is highly priced and

is the most desired marble in demand the world over.

Number of mining leases: About 3600

Marble Processing Capacity: Slabs - 1000 million sq.ft. p.a.

Tile - 300 million sq.ft. p.a.

Marble the pride of India

Practically inexhaustible marble deposits - over 1200 million tons.

Splendid varieties of white, green, black, grey, pink, yellow.

Physical and mechanical properties complying with international standards.

Amongst the top 5 countries in marble exports.

A Vibrant Industry

Total Investment - over Rs.40,000 million

About 4,000 mining leases

Block production 3.7 million tons in 1996-97

About 1,100 modern gangsaw units and 50 Automatic tiling plants

More than 5,000 trading companies

Employing about 1 million people

Fast developing modern mechanised quarries

Over 300 quarries using diamond wiresaw & chainsaw cutter quarrying technology

Modern & well equipped factories with advanced Italian technology for cutting, processing,

polishing and handling

Marble slab & tile production: 1300 million sq. ft per annum

Impressive Marble Export

Increase of over 300% from US $ 9 million in 1992-93 to US $ 27 million in 1996-97

Excellent quality export varieties - Green, Onyx, Indo Italian, White and Pink marble

High quality polished marble tiles & slabs and green & white marble blocks correspond to demand

in the foreign market

High export demand for marble handicrafts

Key marble export markets - USA, Canada, Japan, Singapore, UAE, EC countries

Major Marble Centres of Rajasthan:

Prominent marble quarrying and processing centres in Rajasthan are:

o Udaipur – Rajsamand-Chittorgarh region

o Makrana - Kishangarh region

o Banswara - Dungarpur region

o Abu region

o Andhi (Jaipur) – Jhiri (Alwar) region

o Jaisalmer region

http://www.cdos-india.com/marble0.htm



GRANITE INDUSTRY

Granite

Ranks 1st in Raw Siliceous Exports in the world.

Widespread availability - Karnataka, Andhra Pradesh, Tamilnadu, Orissa, Rajasthan, Utter

Pradesh, Bihar, West Bengal.

Estimated Geological Reserves - Over 5,000 million cubic metres.

Important Quarrying & Processing Centres - Bangalore, Bellary, Hospet, Chamrajnagar, Chennai,

Hyderabad, Warangal, Jhansi, Jalore, Pali, Barmer etc.

Magnificent Varieties - Merry Gold, Platinum White, Mokalsar Green, Rosy Pink, Nagina Green,

Tiger Skin, Royal Gold, Jhansi Red, Galaxy Black, Kashmir White, Paradiso, Cira Grey,

Juparana, Absolute Black, New Imperial Red, Raw Silk etc.

Availability: In districts of Barmer, Jalore, Pali, Sirohi, Alwar, Jaipur Jhunjhunu, Tonk, Ajmer,

Bhilwara, Sikar and Udaipur.

Color & Pattern: Pink, Grey, Green, Multi-color, Bluish white, Red, Golden Cream, Paradiso Black,

Banded with wavy pattern, white with spots etc.

Export varieties: Rosy Pink, Golden Pearl, Chima Pink, Anglo Grey, Royal Cream, Platinum white,

Snow white, Tiger black, Imperial Pink, Mokalsar Green, Nagina Green, Jalore Pink, Kharda Red,

Blue Pearl, Paradiso Red, Brownish Green, Jhunjhunu Red, Yellowish & Pink.

Number of mining leases: 665

Geological Reserves: 1128 million Cu. M.

Quality of Granite: Hardness 6 to 7 on Moh's scale

Granite Processing Capacity: Slabs - 1.5 million sq.m.

Tiles - 5.0 million sq.m. (data taken from www.piedrasb2b.com/encuentro/documentos/INDIAN%20STONE%20INDUSTRY.doc marble industry in

india)

.

1) India: A Premier Exporter

India ranks third in terms of global production of natural stones, and accounts for an 11% share of the

global market. Marble, Granite, Limestone, Slate and Sandstone are the chief materials that India

exports. Stone exports have gone up from around INR 300 crore to nearly 430 crore in the four years

between 2013-2016. And the trend looks set to continue in the future as well, making the India marble

& stone market one of the bright spots in an economy that is already looking to grow as aggressively

as is possible. In addition to exports, India natural marble production stood at some INR 2,925 crore



in 2016, implying that India marble & stone market may just provide the impetus to an economy which

wishes to emulate China’s export based growth model. The INR 2,925 crore figure in 2016 also

comes on the back of some stupendous growth in the sector, given that the market was less than half

of this not 6 years back, languishing at INR 1395 crore in 2011.

2) Rajasthan: Biggest Marble Producing State in India

In 2016, Rajasthan accounted for more than 80% production of marble in India. The capacity for

marble slab production in Rajasthan is around 1,000 million sq. ft. per annum. Gujarat, which is at

second place, is not even close, with only about 10% share in the total India engineered marble

production. Makrana, in the Nagaur district in Rajasthan, for example, is famous as a hub for

marble production. In fact, some of the most famous monuments in India have been built using

Makrana marble, including Taj Mahal, Victoria Memorial of Kolkata, Birla Temple of Jaipur, Haji Ali

Dargah of Mumbai, the Jain Temple of Mysore, the Ambedkar Park of Lucknow and Jain Temple

of Dilwara. Makrana has various mines in the Aravalli range, including among others, Doongri,

Devi, Ulodi, Saabwali, Gulabi, Kumari, Neharkhan, Matabhar, Matabhar Kumari, Chuck Doongri,

Chosira and Pahar Kua. Makrana is believed to provide a source of employment for more than

70,000 people in the region.

However, there has been some pushback by people working in the India marble & stone market,

post the government’s decision to implement the Goods and Services Tax (GST) rate of 28% on

marble. The earlier incidence of tax, marble industry leaders claim, was around 5%. Strikes are

continuing to this day, which has seriously impacted the marble trade in India. The issue remains

unresolved as of now though the government has been in serious negotiations with industry

leaders to try and assuage fears.

3) Italy: Biggest Natural Marble Exporter to India

Between 2012 and 2016, India imported around INR 1,400 crore per annum worth of natural

marble, 2015 being the significant exception when nearly INR 2,000 crore worth of natural marble

was imported. Italy has been responsible for just over half of the total imports of natural marble per

annum in the India marble & stone market. For example, in 2012, India imported over INR 736

crore worth of marble from Italy and over INR 1,300 crore overall. In 2015, around INR 1,000 crore

worth of marble was imported from Italy and around INR 1,900 crore overall. Suffice to say that

Italy is one of the most stable and exporter of natural marble to India in the India marble & stone

market. Carrara marble, for example, mined in Italy has been used in many famous Indian

monuments including the Prem Mandir in Vrindavan and Akshardham temple complex in Delhi.

Italy is also the world leader in marble export, cornering a 20% share in the natural marble

production market. China comes second with around 16%, India third with around 11% followed by

Spain with around 6%, and Portugal with around 5%. Together, these countries account for nearly

60% of global marble production enjoyed by the India marble & stone market. However, in term of

exporters, Turkey was the market leader with over 40% market share, followed by Italy, Greece

and Spain. Among Asian exporters, India stood third behind Turkey and Pakistan.

Conclusion: India enjoys a huge diversity of various stones and minerals and must leverage its

position to establish itself as a global exporter of the same, thus benefiting the India marble & stone

market. Rajasthan, especially, can develop into a global mining hub all by itself, enjoying a dominant

share in the marble and sandstones markets. Various globally recognised types of marbles, including

the Makrana marble, Rajnagar marble, Andhi marble etc. have already established Rajasthan as a

globally known region. In addition to marble, Rajasthan also enjoys significant reserves of sandstone,

granite slate etc. Over 90% of the deposits of sandstone are found Rajasthan, spread over the

districts of Bharatpur, Dholpur, Kota, Jodhpur, Sawai-Madhopur, Bundi, Chittorgarh, Bikaner,

Jhalawar, Pali, Shivpuri, etc. It will be interesting to see if the Rajasthan government can develop the



state into a full-fledged mining hub, rather than the small-scale operations that dot the state currently.

India has a history of optimally utilising its various reserves, with Khajuraho Temple, Elephanta

Caves, Taj Mahal, Konark Temple etc. all being produced from locally sourced raw materials, but for

further growth in the India marble & stone market, it is essential that exports to various countries be

enhanced.

There have been some positive reforms that the government has instituted to make the sector more

competitive, in order to streamline export models. For example, in the case of marble and travertine

blocks, Minimum Import Price (MIP) reduced from USD325 per metric ton to USD200 per metric ton

whereas customs duty on import of marble & travertine blocks has gone up from 10% to 40%. This is

done in a bid to have contractors and builders source more material locally, unless massive work is

being carried out requiring huge quantities of raw materials, in which case it would become cheaper to

import. Experts at TechSci Research suggest that such flexible policies will definitely be beneficial to

the India marble & stone market in the long run. While more systemization, better regulations, market

consolidation etc. are urgently needed in the sector, overall the prospects of India marble & stone

market look very bright.

Mangal Global Marbles Private Limited, which is aspiring to establish itself in the Processing

of Marble and Granite has a great potential and has a bright future considering the current

scenario of the Marble & Granite Industry in India particularly Rajasthan.

Project Report for Processing of Marble & Granite - Zumosun

Documents

Transcript of Project Report for Processing of Marble & Granite - Zumosun