Documente Academic
Documente Profesional
Documente Cultură
APPRAISAL REPORT
PREPARED FOR
BITUMODE INTERNATIONAL PRIVATE LIMTED
(Modern Group of Companies)
VADODARA, GUJARAT, INDIA
PREPARED BY
GUJARAT INDUSTRIAL AND TECHNICAL
CONSULTANCY ORGANISATION LIMITED
"GITCO HOUSE", SP STADIUM ROAD,
NAVRANGPURA AHMEDABAD-380 009
SEPTEMBER 2012
INDEX
SR CONTENTS PAGE
CHAPTERS
I INTRODUCTION 1
II BACKGROUND OF THE FIRM 2
III PRODUCT OVER VIEW 9
IV MARKET ASPECTS 13
V TECHNICAL FEASIBILITY 32
VI PROJECT COST AND MEANS OF FINANCE 43
VII ECONOMIC VIABILITY 49
VIII SWOT ANALYSIS 55
IX RISK ANALYSIS AND MITIGATION 57
X OBSERVATIONS AND CONCLUSION 59
ANNEXURES
I PROCESS FLOW CHART 65
II PROJECTED WORKING CAPITAL REQUIREMENT 66
III PROJECTED PERFORMANCE 67
IV BREAK EVEN ANALYSIS 68
V PROJECTED CASH FLOW 69
VI PROJECTED BALANCE SHEET 70
VII SENSITIVITY ANALYSIS 71
VIII BASES OF PROJECTED PERFORMANCE 77
IX INTEREST CALCULATIONS 83
X DEPRECIATION CALCULATIONS 84
1
I – INTRODUCTION
1.1 Background
M/s. Modern Waterproofing Company (MWC), incorporated in the year 1999 in
Egypt envisages upon setting up of a manufacturing facility in India at Dahej SEZ
in Bharuch District of Gujarat State with an aggregate capacity of 21.02 Million
m2 in the name of M/s Bitumode International Pvt. Ltd (BIPL). BIPL will
produce 8 varieties of Bitumen based Waterproofing Products to be distributed in
India and abroad. The aggregate cost of the project is estimated at Rs. 57.20 Crs
and is proposed to be financed by a Term Loan of Rs. 29.00 Crs and promoter’s
equity participation of Rs. 28.20 Crs. The promoter’s equity contribution will be
made through the internal accruals from the parent company. BIPL has proposed
to avail financial assistance in the form of Term Loan and Working Capital Loan
from Bank.
The report has been prepared on the basis of the relevant details and information
of the project furnished by the BIPL management, GITCO data base including
internet surfing, and discussion with the BIPL personnel.
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II – BACKGROUND OF BIPL
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3) Mrs. Dina Syad Ahmed (Director) holds a B.A. in Economics from the
American University in Cairo, M.S. in Environmental Development from
the University of Sussex in the United Kingdom.
4) Mr. Hassan Kamel (Technical Director) holds a B.S. in Chemistry from
Cairo University. Most recently Chem. Hassan held the position of Plant
Manager at MWC before being promoted to Group Technical Director.
Chem. Hassan has been with the Group since October 2002. Previously
Chem. Hassan was a Quality Control Manager at Insumat, where he held
the position from 1995 to 2002.
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MWC became the market leader in Egypt in its sector within a few short years.
The Company has 150 employees and is ISO 9001:2000 certified. Currently,
Modern is a listed company in the Cairo stock exchange, and it is part of EGX 70
stock index.
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Table 2.1
Group Shareholding Pattern
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Table 2.2
Product Lines of the MWC Group
Company Products Production Capacity Expansion
Line Per Year
MWC Bituminous 3 15 mn m2 30 mn m2
Membranes
Spuntex Non-Woven Fabrics 1 10000 tons NA
and Geo Textiles
Modern XPS Foam and 1 100,000m3 NA
Plastics Recycled Plastics and 10000 tons
The plant would produce Bitumen based waterproofing products, shingles, and
adhesive products at installed production capacity of 21.02 million m2 bituminous
of membranes. The aggregate cost of the project is estimated at Rs.57.20 Crs and
is proposed to be financed by a Term Loan of Rs. 29.00 Crs and promoter’s
equity participation of Rs. 28.20 Crs. The promoter’s equity contribution will be
made through the internal accruals from the parent company. BIPL has proposed
to avail financial assistance in the form of Term Loan and Working Capital Loan
from Bank.
The Company plans to leverage upon the large infrastructure demand of the
country and simultaneously utilize its low cost structure. Additionally it will also
help the Company in improving its global market share by optimal distribution of
its products in the Asia Pacific region. The existing market presence of the
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Dahej SEZ has taken up the responsibility to facilitate the necessary regulatory
and statutory clearances and approvals for any manufacturing plant proposed to
be set up in the SEZ. Dahej SEZ will utilize single window clearance approach to
facilitate all regulatory and statutory clearances for the proposed project from
various government departments resulting in granting speedy approvals to the
units.
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2.10 Observations
M/s. Modern Waterproofing Company (MWC), incorporated Egypt
envisages upon setting up of a manufacturing facility at Dahej SEZ with
installed production capacity of 21.02 Million m2 in the name of M/s
Bitumode International Pvt. Ltd (BIPL).
BIPL plant is being set up in India Dahej SEZ in Bharuch District of
Gujarat State with the main objective of manufacturing waterproofing
products in India and will operate as the subsidiary to MWC.
The management of the BIPL has been involved in the Water Proofing
business for about 12 years and has an Indian market presence for nearly 5
years.
The aggregate cost of the proposed project is estimated at Rs.57.20 Crs
and is proposed to be financed by a Term Loan of Rs. 29.00 Crs and
promoter’s equity participation of Rs. 28.20 Crs.
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The Company will have a single production line, with the combined capacity of
all the four production lines of MWC. The Company will produce 8 different
products and their nearly 360 plus variants to be distributed in India. These
products can be used to waterproof roofs, basements, swimming pools,
foundations, or any place in the structure that is subjected to water or moisture.
The main product classifications are as follows.
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Table 3.1
Proposed Product Mix
3.5 Observations
BIPL has proposed to produce eight varieties Bitumen based
waterproofing products, shingles, and adhesive products at installed
production capacity of 21.02 million m2 bituminous of membranes.
The waterproofing method currently prevalent in India is Brickbat Coba.
Bituminous method of waterproofing is much more advanced and long
lasting than the current brick bat coba method prevalent method in India.
BIPL has envisaged optimum projected sales turnover of Rs. 207.42 Crs.
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IV - MARKET ASPECTS
Market Segments
Roofing demand can be segmented into two major markets: residential buildings
and nonresidential buildings, and within each of these markets, roofing is used in
both new construction and maintenance/repair (reroofing) applications.
The residential reroofing market is the largest on a worldwide basis, accounting
for 37 % of all product sales in 2009. However, new residential construction
roofing demand is expected to register the strongest gains through 2014, bolstered
by a rebound in new housing starts in the US, Japan and other developed
countries.
Geographic Segments
In terms of geographical demand, China is expected to account for 35% of all
additional demand through 2014, strengthening its position as the largest roofing
market in the world in area terms. Growth is also expected to be healthy in lower-
volume developing world markets like Turkey, India, Hungary, Nigeria and
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Pakistan. The sales outlook for Eastern Europe is somewhat uneven, with some
countries expected to register above-average market gains, while roofing demand
will expand at a sub par rate in others. The US is the largest producer of roofing
products commanding 23.9% of total production, USD terms, followed by
Western Europe and China, which command c.18.4% and c.14.4% respectively.
Africa and the Middle East have a 9.5% market share, with Egypt, Iran, Nigeria,
Saudi Arabia, South Africa and Turkey having the largest manufacturing
capabilities.
Product Segment
Although the popularity of various roofing materials differs from area to area,
global sales are dominated by bituminous and tile (clay and concrete) products,
which together account for over 70 % of all roofing demand in area terms. The
World Roofing demand by product segment is given in Table 4.1. It is expected
that:
Concrete roofing tiles will post the fastest market increases of any major
product type through 2014, stimulated by above-average growth in
building construction in developing Asian nations.
Asphalt shingle and plate and modified bitumen roofing demand will
climb at the next fastest rates. Suppliers of asphalt shingles and plates will
benefit from renewed strength in new single family housing construction
in the US and Canada.
Sales of modified bitumen roofing will be spurred by competitive inroads
in markets now served by built-up and roll roofing, aided by new product
introductions.
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Table 4.1
World Roofing Demand by Product Segment
The large size of the bituminous roofing market is predominantly due to the
popularity of asphalt shingles for steep-slope roofing applications in the huge US
market and the smaller Canadian market. Use of bituminous materials in steep-
slope applications is less common elsewhere, although pockets of demand can be
found in Europe, Central and South America, and the Asia/Pacific region. Outside
of North America, demand for bituminous roofing is typically limited to low-
slope applications, where built-up roofing felts and modified bituminous
membranes are used.
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Table 4.2
World Roofing Demand (million square meters) 2004 – 2019
Concrete and clay roofing tiles are utilized on a more geographically widespread
basis. Products offered include everything from low-end, homemade items to tiles
mass-produced in modern manufacturing facilities to high-end, artisan-made
goods. Concrete accounts for a larger share of the tile market total than clay,
supported by strong demand in the large China market, Central and South
America, and Eastern Europe. Metal roofing is also commonly used throughout
the world, although it accounts for a larger share of total demand in the
Africa/Mideast region than it does in most other areas. Products offered range
from untreated, corrugated steel panels used in low-end housing to precoated
steel, aluminum and other metal panels and tiles installed on residential,
commercial and industrial buildings. Water Proofing Product Demand is shown in
the below:
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due to generally healthy economic and construction market climates in other parts
of the Asia/Pacific region. The most robust sales growth will be posted by
elastomeric, modified bitumen and plastic roofing, although tile products (and
clay tiles in particular) will remain the most commonly used roofing materials.
India’s strategic location also means that Modern could supply the rest of the
region with its products more effectively. In 2009, India represented only 10.9%
of the Asia/Pacific roofing materials consumption. Modern already has existing
customers all over Southeast Asia and the Persian Gulf market. Modern will serve
these customers from its Indian plant.
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India has a population of nearly 1.2 billion which require housing facilities, and
additional growth in annual roofing sales can result from the presence of strong
monsoons that generate demand for building repair and maintenance. Besides this,
the quality of construction in India is inferior as compared to international
standard. Per capita use of roofing materials in the country is extremely low, due
to both widespread poverty and the relatively small size of much of its housing
stock. This means that in effect, buildings need more repairs and maintenance
than their counterparts worldwide.
These factors present a huge latent demand for waterproofing products in India. In
recent years, roofing market gains in India have exceeded regional and global
norms, averaging 5.6% annually from 2004 to 2009. Roofing service suppliers
have benefited from economic reforms that have attracted investment capital into
the country, which has resulted in industrialization-related nonresidential and
residential construction activities.
In India clay and concrete tiles account for the largest single share of roofing
materials demand, while fiber cement roofing sheets are also popular. Both
asbestos fiber and non asbestos products are available, but the former
predominate.
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Table 4.3
Water Proofing Demand in India
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Due to the fact that Modified Bituminous membranes are relatively new products
in India, the total market for Modified bituminous membranes can be subdivided
and categorized under three categories:
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Table 4.4
Modified Bituminous Category Market Share
Egyptian Players
In the last two years, the Egyptian government has gradually started removing
subsidies on bitumen but kept an export incentive scheme. This has helped the
Egyptian dominate the India market and gain the largest market share.
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In terms of average volumes for the last three years, currently the largest two
players are Modern Waterproofing Company and Bitunil, both of them being
Egyptian manufacturers.
The two Egyptian companies alone account for over 50% of the supply into the
Indian market. They have grown by 90% since last year and are expected to grow
by a further 30% this year. Both these Companies utilize either their brand names
or utilize private label arrangements with major Indian companies, such as Pidilite
(Dr. Fixit), STP, and IWL to distribute their products in India.
Non-Egyptian Companies
Another foreign player, Texsa of Spain is also a big competitor in the modified
bitumen membrane market in India. It currently has a 10 % market share. Texsa
relies on its own company in India and does not use distributors and that has
restricted its growth. Further, it sells at high prices, so it only appeals to a limited
sector. Texsa is currently putting up a plant in Jaipur using an old production line it acquired
from a bankrupt Spanish company.
Domestic Companies
There are a few Indian companies manufacturing modified bitumen membranes
such as Tiki Tar, Swastik Tar, and Hydro Tech. Their plants are quite simple and
of low production capacity. The largest, Tiki Tar claims to have a production
capacity of 3000 square meters per day. To put things in perspective, the
Bitumode International plant can produce 45,000 square meters per day. The
economies of scale, the quality of the machinery, and the unique product know
how that Bitumode has developed over the years will enable Bitumode to produce
in India better quality, larger quantity, and at a cheaper price than its smaller
competitors.
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Market Expectation
The Egyptian government is now raising the price of bitumen aggressively and it
is expected that by early 2012, the cost of producing the membranes in Egypt will
be the same as or even more than in India. Thus, by 2012 the Indian market will
start to open for competition. Due to this it is expected that the market in the next
few years in India will be dominated by both Bitumode and Texsa. However the
Bitumode’s India entry strategy will help it in gaining market share over Texsa
due to the following factors:
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Currently Indian market players rely on imports for good quality waterproofing
products due to which the average price for waterproofing products in India is at a
slightly higher side. However, BIPL plans to utilize the same price structure
available in India while producing products at lower cost hence increasing its
margins.
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3) Get highest quality certification for its products. The company plans to
certify its product from the ISO 9001.
As per the initial plans of BIPL, it envisages a time period of 3-4 months for
setting up its own distribution network. For quick execution of these plans the
BIPL plans to appoint best talent from Indian industry. BIPL currently envisages
hiring a chairman who would be made responsible for growing distribution chain;
and would be supported by 4 regional managers for each zone.
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Due to the fact that Modified Bituminous membranes are relatively new
products in India, the total market for Modified bituminous membranes
can be subdivided and categorized under three categories:
i) Traditional non-membrane waterproofing and roofing
ii) Traditional membrane waterproofing and roofing
iii) Modified Bitumen membranes
Marketing Strategy
i) BIPL plans to differentiate its products from its competitors in
quality rather than price.
ii) BIPL plans to utilize the same price structure available in India
while producing products at lower cost hence increasing its
margins.
iii) BIPL plans selling its product under the brand name Bitumode and
to establish and expand its brand image.
iv) BIPL already has a strong presence in Indian market and has
gained enough market knowledge.
v) Currently BIPL only utilizes its direct sales channels to client like
large clients like Pidilite, STP Pvt. Ltd and IWL and has no other
distribution channel of its own in the country.
vi) BIPL plans to develop its own network of client and managers for
distributing its products in India. This distribution channel would
help the Company in expanding its upcoming lower priced version
of its products to smaller clients.
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vii) As per the initial plans of BIPL, it envisages a time period of 3-4
months for setting up its own distribution network. For quick
execution of these plans the BIPL plans to appoint best talent from
Indian industry.
Conclusion
In view of the market potential of Bitumen based waterproofing products, BIPL
management’s marketing experience and group set up as well as proposed
marketing strategy, it can be concluded that it will be possible for BIPL to achieve
targeted turn over.
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V – TECHNICAL FEASIBILITY
5.1 Background
BIPL envisages upon setting up of a manufacturing facility to produce eight
varieties of Bitumen based waterproofing products at Dahej SEZ in Bharuch
District of Gujarat State. The plant would produce Bitumen based waterproofing
products, shingles, and adhesive products at installed production capacity of 21.02
million m2 bituminous of membranes. Technical feasibility of the proposed
project is appraised in view of the following aspects.
1) Manufacturing Process
2) Raw Materials
3) Plant and Machineries
4) Installed Capacity
5) Infrastructure Facilities
6) Manpower Requirement
7) Project Implementation Schedule
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Table 5.1
Raw Materials Mix
The machinery for the project has already been tied up with the overseas supplier.
A brief description about the plant and its main segments is provided here below:
1) Nardini Production Line and Accessories: The production line is the key
component of the plant and is used in manufacturing bituminous membranes and
liquids. The Company will utilize the production line manufactured by Nardini
Company of Treviso, Italy which is considered as the world's top supplier of such
equipment. Generally the line is 100 meters long and 10 meters high. The line is
fully-automated and very flexible giving the user flexibility to switch from one
product variant to another very quickly and with minimum raw material losses.
The Production line will have additional by parts as listed below:
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Mixing and Preparation System: This part of the line is used to mix the
bitumen with the other components of the product such as the polymers,
fillers, and other chemical additives. There are two stages of mixing,
primary and secondary, after which the liquid bituminous compound is
pumped to the coating section of the line.
Coating Section: The coating section is where the reinforcement material
(non-woven polyester, fiberglass tissue, etc.) is unrolled, and then
impregnated and coated in two stages with the bituminous compound
which is pumped in from the mixing and preparation system. The final
finished material is then applied onto the surface of the membrane (sand,
slate, polyethylene film, etc.). Finally the membrane rolls are cooled
down, cut, rolled, and packaged.
Packaging Section: The packaging section is composed of a fully-
automated system whereby the rolls are removed from the rolling winder,
placed upright on a pallet and the pallet is then covered automatically with
a shrink bag. The pallet is then rolled into a shrinking oven, which heats
up the shrink bag, causing it to shrink and cling tightly to the membrane
rolls.
Auxiliaries Section: This section contains all the machinery and
equipment that is necessary for operating the plant. This section includes a
diathermic oil heating system, chillers, compressors, pumps, motors,
piping, etc.
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The total plant and machinery cost Rs. 36.90 Crs. is tied up with the overseas
suppliers as given in Table 5.2. The cost of CIF, installation, electrification, etc is
estimated.
Table 5.2
List of Proposed Plant and Machinery
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Table 5.3
Installed Capacity and Production
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Break up of building and civil construction with the cost is given in Table 5.4.
The building construction and civil works as above will be adequate for the
requirement of the project.
Table 5.4
Break Up of Building and Civil Works
5.5.3 Power
The total power requirement to carry out operations of the project will be 2000
KW. The required power connection will be available from Torrent Power and
will be arranged by the Company. The break up of power requirement is given in
Table 5.4. Power bill at optimum level of operations is worked out as follows.
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Table 5.4
Break Up of Power Requirement
5.5.4 Fuel
Gas will be used as fuel for heating Bitumen tanks for coating Bitumen on the
Membranes. The gas requirement will be 250 Cubic Meter per hour. The required
Gas supply will be available from GSPC and will be arranged by Dahej SEZ.
Gas cost at optimum level of operations is worked out as follows.
5.5.5 Water
Water requirement will be for cooling which is 150 cubic meter in closed circuit
and will be required to compensate only the evaporated part. The consumption
will only be for human usage and may be for green areas in the compound which
could be 5 cubic meter /day. The water supply will be arranged by Dahej SEZ.
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5.6 Manpower
BIPL will need manpower of 57 persons at the maximum to carry out operations
of the proposed project. The necessary manpower will be available. The
requirement of manpower in various categories is given in Table 5.4.
Table 5.4
Manpower Requirement
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Table 5.5
Project Implementation Schedule
Activity Date of
Start End
Land Acquisition Completed Completed
Signing of Construction Contract 1st July 2012 30th Sep 2012
Completion of Building structures 30th Sep 2012 30th Nov 2012
Financial Closure 31st July 2012 15th Oct 2012
Shipment of Machinery 15th Oct 2012 30th Nov 2012
Erection of Machinery 30th Nov 2012 28th Feb 2013
Trial Production 1st March 2013 st
31 March 2013
Commencement of Operations 1st April 2013
The strategic location of the project would help it in easy sourcing of raw
materials. As the main raw material is Bituminous which is supplied by oil
refineries, BIPL plans to source the raw material from Koyali and
Jamnagar refineries in Gujarat. Beside this Gujarat has a booming plastic
industry, hence polyester can be easily sourced from the adjoining regions.
Being situated nearer to Ahmedabad - Mumbai national highway the
company would have connectivity to road, port, and airway facilities.
The Dahej SEZ developer will help the company in availing the basic
facilities like water, connectivity, labor accommodation, power in most
efficient manner.
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Being setup in SEZ, the company would be able to avail the tax exemption
under the Income tax Act.
Being located in Gujarat, the Company will have good connectivity to
western, northern and southern regions in India. Hence BIPL would be
able to capture the western as well the local market of the country.
One of the prime benefits that BIPL would accrue from setting up its plant in the
Dahej SEZ is that almost all of the infrastructure facilities required in setting up
such a plant would be provided by the SEZ. A list of the facilities provided by the
SEZ is provided below:
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All the raw materials required to produce the proposed products are easily
available.
The proposed Plant and Machinery are appropriate for the propose project.
The plant will have installed capacity of 21.02 million m2 bituminous
membrane producing.
The plant availability factor will be at 80%. The optimum plant operating
capacity will be at 77%.
Land acquired for the proposed project is adequate for the requirements.
The building construction and civil works as above will be adequate for
the requirement of the project.
All the required infrastructure facilities are available at the project site.
Manpower of 57 persons at the maximum will be required to carry out
operations of the proposed project. The necessary manpower will be
available.
The proposed location is most suitable looking to various aspect
concerning to the proposed project.
The project will be fully implemented by March 2013 and start
commercial production from April 2013.
Conclusion
Looking to the appraisal of various technical aspects of project proposed by BIPL,
it can be concluded that the project is technically feasible. With the proposed
manufacturing and infrastructure facilities, it will be possible to achieve targeted
production.
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Table 6.1
Project Cost
6.1.1 Land
BIPL has already acquired lease hold land measuring 12,485 Sq. Mtrs at Dahej
SEZ at Bharuch in Gujarat for 30 years and extendable by another 30 years. The
land cost as per lease agreement is Rs. 1.52 Crs. The land area is adequate for the
requirements of the project.
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Table 6.2
Preliminary Expenses
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Table 6.3
Interest during Construction Period
(Rs. in Crs)
Particulars TL Payment Total TL 13% Interest
Jul-12 0.00 0.00 0.00
Aug-12 0.00 0.00 0.00
Sep-12 0.00 0.00 0.00
Oct-12 14.50 14.50 0.16
Nov-12 14.50 29.00 0.31
Dec-12 0.00 29.00 0.31
Jan-13 0.00 29.00 0.31
Feb-13 0.00 29.00 0.31
Mar-13 0.00 29.00 0.31
Total 29.00 1.73
6.1.7 Contingencies
The contingent expenses are considered at 5% of non-firm CAPEX as per
estimate of BIPL as given in Table 6.4.
Table 6.4
Contingent expenses on Non-firm CAPEX
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Table 6.5
Allocation of Pre Op Expenses, Contingencies and IDC
Table 6.5
Projected Working Capital Requirements
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The working capital allocation towards the “working expenses” has been
provided to represent the minimum amount of cash which is needed to maintain
smooth running of operations. It is a part of the total cash surplus available. It is
not separately shown in cash flow analysis as well as balance sheet. For all the
projected operating years, the cash surplus will be greater than this minimum
required cash balance to meet working expenses.
Working Capital Loan from bank is sought at Rs. 17.00 Crs. against net working
capital of Rs.32.17 Crs. and the balance Rs. 15.17 Crs will be margin money for
working capital during the year 2013-14. To start the operations, initial margin for
working requirement is estimated at Rs. 5.00 Crs. Interest rate on working capital
loan is considered at 13% per annum.
Table 6.6
Means of Finance
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Based on the proposed means of finance, Debt/Equity ratio and Asset Coverage
Ratio work out to be favorable as compared to the normal standard.
6.4 Observations
The cost of proposed project appraised at Rs. 57.20 Crs.
Bank Term Loan is sought for Rs. 29.00 Crs. and Balance Rs. 28.20 Crs.
will be equity. Term Loan amounts to 50.5% of the project cost.
The proposed Debt/Equity ratio and Asset Coverage ratio work out to be
1.03 and 1.80 respectively.
Net Working Capital is appraised at Rs. 32.17 Crs, out of which Bank
Working Capital Loan is sought for Rs. 17.00 Crs. and balance Rs. 15.17
Crs. is proposed Margin Money. To start the operations, initial margin for
working requirement is estimated at Rs. 5.00 Crs.
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7.1 Background
BIPL envisages upon setting up of a manufacturing facility to produce of Bitumen
based waterproofing products at Dahej SEZ in Bharuch District of Gujarat State.
The economic viability of proposed project is appraised on the basis of analysis of
projected profitability, projected cash flow, projected balance sheet, break even
analysis, debt service coverage ratio (DSCR), internal rate of return (IRR) and
sensitivity of selling price as well as raw material price on profitability. While
appraising economic viability of the project, the prevailing operating parameters
are considered as bases. The project will be fully implemented by March 2013
and will start operations on commercial scale from April 2013. The economic
viability is appraised as follows.
Table 7.1
Summary of Projected Profitability
(Rs. In Lacs)
Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Net Income 14736 17372 18722 20077 20664 20741
Operating Cost 12549 14810 16006 17214 17752 17870
EBDIT 2187 2562 2716 2863 2912 2872
PBT 848 1412 1746 2055 2254 2322
PAT 691 1151 1423 1675 1837 1893
Cash Accruals 1438 1776 1952 2125 2222 2221
It can be seen from the above that the operations of BIPL will earn increasing
profits and cash accruals. Profit after tax will increase from Rs. 691 Lacs in the
year 2013-014 to Rs. 1893 Lacs in the year 2018-19.
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Table 7.4
Break Even Analysis
(Rs. In Lacs)
Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Cap. Utilisation 55% 65% 70% 75% 77% 77%
Net Income 14736 17372 18722 20077 20664 20741
Variable Costs 12424 14598 15718 16844 17340 17419
Contribution 2312 2774 3004 3234 3325 3323
Fixed Costs 1464 1361 1258 1178 1070 1000
BEP 35% 32% 29% 27% 25% 23%
Avg. BEP 35%
It can be seen from the above that the BEP at 35% in the year 2013-14 reduces up
to 23% in the year 2018-19. It can be seen from the above that the average BEP
works out to 35 %.
Table 7.5
Summary of Projected Cash Flow
(Rs. in Lacs)
Particulars 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Sources of Funds 5220 6139 2875 2876 3024 2983 2882
Appln. of Funds 5220 5885 2290 1849 1824 1530 677
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It can be seen from the projected cash flow analysis that there will be adequate
cash surplus after all applications of funds. The cash surplus at the end of the year
2018-19 will be Rs. 6725 Lacs. The cash surplus is inclusive of working capital
allocation towards the “working expenses” needed to maintain for smooth
running of operations.
Table 7.6
Financial Ratios (Analysis of Projected Balance Sheet)
* Rs. in Lacs
Particulars 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Net Worth * 2320 3512 4663 6086 7761 9598 11491
Debt/Equity 1.25 0.73 0.41 0.21 0.08 0.00 0.00
Net FA/TL 1.80 1.74 1.99 2.57 NA NA NA
CA/CL NA 2.89 3.15 3.59 4.03 4.59 5.47
Net CA/WCL NA 1.95 2.62 3.39 4.26 5.18 6.49
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53
Due to negative change up to 4% in selling and raw material prices and additional
interest cost of 2% the BEP goes up and DSCR as well as IRR declines. However,
the DSCR and IRR remain with in the range of normal standards and the
operations will generate cash accruals. Table 7.7 and 7.8 shows profitability
considering 4% negative change in selling price and raw material cost and along
with additional 2% interest cost respectively.
Table 7.7
Summary of Sensitivity Analysis: Selling Price Low by 4%
Plus Raw Material Cost High by 4%
(Rs. in Crores)
Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Net Income 14147 16677 17973 19274 19838 19912
Operating Cost 12920 15248 16478 17720 18273 18393
EBDIT 1226 1429 1495 1554 1565 1519
Financial Exp. 1339 1150 970 808 658 549
PBT -113 280 525 746 907 969
PAT -113 228 428 608 739 790
Cash Accruals 634 853 957 1058 1123 1118
Cum Gr. DSCR 1.43
Cum Net DSCR 1.59
IRR 26%
Avg. BEP 58%
Table 7.8
Summary of Sensitivity Analysis: Selling Price Low by 4%
Plus Raw Material Cost High by 4% Plus Interest Cost High by 2%
(Rs. In Crores)
Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Net Income 14147 16677 17973 19274 19838 19912
Operating Cost 12920 15248 16478 17720 18273 18393
EBDIT 1226 1429 1495 1554 1565 1519
Financial Exps 1430 1230 1038 863 699 583
PBT -204 199 457 691 865 935
PAT -204 162 372 563 705 762
Cash Accruals 542 787 901 1014 1089 1091
Cum Gr. DSCR 1.35
Cum Net DSCR 1.49
IRR 26%
Avg. BEP 61%
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The cumulative Gross DSCR will be 2.66 and cumulative Net DSCR will
be 3.28, which are satisfactory.
The BEP at 35% in the year 2013-14 reduces up to 23% in the year 2018-
19. Average BEP works out to 35%.
There will be enough positive cash surplus after all applications of funds.
The cash surplus at the end of the year 2018-19 will be Rs. 6725 Lacs.
The liabilities and assets will be well balanced. The net worth remains
positive and financial ratios work out to be satisfactory.
Conclusion
Looking to the appraisal of various economic aspects of project proposed by
BIPL, it can be concluded that the operations of project proposed by BIPL will be
economically viable. Looking to the returns, the proposed investment is justified.
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Strengths
The experience and expertise of the parent company in manufacturing
waterproofing products is one of its greatest strength. Established in 1999, MWC
today is one of the largest producers of waterproofing products in Egypt.
The BIPL enjoys a strong brand reputation in the market due to its Indian market
presence since last 5 years.
The Strategic location of proposed project would help it in easy sourcing of raw
materials. The raw materials would be easily available from the Koyali and
Jamunagar in Gujarat. Beside this Gujarat has good plastic refinery industry, so
polyester can be easily sourced from the site.
BIPL has a competitive edge due to its strategy of sourcing bituminous from
India. This is because it will give the company a price advantage over its
competitors importing bituminous. The company may decide to transfer its price
advantage to its clients and hence may sell quality products at comparatively
cheaper price.
The Dahej SEZ will help company in availing basic infrastructure facilities like
water and connectivity, labor accommodation, power in most efficient manner.
Besides this, being situated on the Delhi- Mumbai Highway the company would
have great connectivity to road, port and airway facilities.
Being setup in the SEZ, BIPL would b able to avail the tax exemption under
Income Tax Act for 15 years.
Weakness
Finding trained labor in highly specialized but nascent industries like
waterproofing could be difficult. However, BIPL over time would develop in-
house training facilities for its employees which will help it in retaining and
improving efficiency of its labor.
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Opportunities
Increasing demand and supply gap in the waterproofing industry.
Demand for roofing materials is projected to advance to 2.6 % per year. Rising
living standards in India will foster demand for new housing construction as well
as re-roofing with more durable or aesthetically pleasing materials.
Indian water proofing industry still has not big indigenous players and most of the
players import the products and sell them in Indian markets post re-branding. This
poses first mover opportunity to the Company.
Threats
BIPL may face competition from the existing Indian players and foreign big
competitors. However the price and quality advantage as mentioned above will
outcome the competitor from the market.
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Market Risk BIPL has a good reputation and visibility among its Indian and South
Eastern country clients. The presence of BIPL products in these
regions and current expansion plans will help in not only capturing
Indian market but increasing its presence in other adjoining Asian and
south eastern countries. BIPL already has a good order book from
these clients.
Competition Risk BIPL products have been in Indian market for about 5 years and thus
company has established a good network of distributors and retailers.
Companies like Pidlite are some of the major customers.
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X.1 Observations
Background of BIPL
M/s. Modern Waterproofing Company (MWC), incorporated Egypt
envisages upon setting up of a manufacturing facility at Dahej SEZ with
installed production capacity of 21.02 Million m2 in the name of M/s
Bitumode International Pvt. Ltd (BIPL).
BIPL plant is being set up in India at Dahej SEZ in Bharuch District of
Gujarat with the main objective of manufacturing waterproofing products
in India and will operate as the subsidiary to MWC.
The management of the BIPL has been involved in the Water Proofing
business for about 12 years and has an Indian market presence for nearly 5
years.
The aggregate cost of the proposed project is estimated at Rs.57.20 Crs
and is proposed to be financed by a Term Loan of Rs. 29.00 Crs and
promoter’s equity participation of Rs. 28.20 Crs.
Products Overview
BIPL has proposed to produce eight varieties Bitumen based
waterproofing products, shingles, and adhesive products at installed
production capacity of 21.02 million m2 bituminous of membranes. The
waterproofing method currently prevalent in India is Brickbat Coba.
Bituminous method of waterproofing is much more advanced and long
lasting than the current brick bat coba method prevalent method in India.
BIPL has envisaged projected sales turnover of Rs. 207.41 Crs. at
optimum capacity.
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Market Aspects
Global demand for roofing materials is projected to grow 3.1% annually
through 2014 to 11.1 billion square meters.
The demand for the roofing products can be categorized into six major
product categories including: bituminous, metal, plastic, tile and fiber
cement. Bituminous products commanded the lion’s share, accounting for
38.0% of FY 2009 global roofing sales in m2.
Worldwide sales of modified bitumen roofing systems are forecast to
increase by 3.6% per year through FY 2014 to USD 810 million,
outpacing bituminous roofing as a whole.
Demand for roofing in India is expected to increase 4.8 percent annually
through 2014 to 570 million square meters, among the fastest growth rates
of any nation in the world.
The Indian water proofing industry is in its early growth stage. With the
emphasis now on building fast and building to last, there is lot for this
industry in the construction sector. In 2009, roofing demand in India
reached 450 million square meters, valued at $2.9 billion, representing the
second largest market in the Asia/Pacific region.
India is emerging as the leading manufacturing centre for number of
multinationals, the sector is growing fast and demand growth is moving
upwards by the emergence of new market.
According to the Freedonia International Roofing Study India’s demand
for bituminous membrane in 2010 is estimated to be 440 million square
meters, and is expected to increase to 563 million in 2015, and 613 million
by 2019.
With the increase in GDP over the years the demand for Modified
bituminous membrane, which only represents 5.78% of the different types
of waterproofing methods used in India, is expected to grow by 15% over
the next 3 years.
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Due to the fact that Modified Bituminous membranes are relatively new
products in India, the total market for Modified bituminous membranes
can be subdivided and categorized under three categories:
iv) Traditional non-membrane waterproofing and roofing
v) Traditional membrane waterproofing and roofing
vi) Modified Bitumen membranes
Modified Bitumen membranes category is the fastest growing and is
rapidly grabbing market share from the other two categories. This
category is dominated by imports from Egypt, Europe, and Saudi Arabia,
out of which Imports from Egypt are the most dominant.
Marketing Strategy
viii) BIPL plans to differentiate its products from its competitors in
quality rather than price.
ix) BIPL plans to utilize the same price structure available in India
while producing products at lower cost hence increasing its
margins.
x) BIPL plans selling its product under the brand name Bitumode and
to establish and expand its brand image.
xi) BIPL already has a strong presence in Indian market and has
gained enough market knowledge.
xii) Currently BIPL only utilizes its direct sales channels to client like
large clients like Pidilite, STP Pvt. Ltd and IWL and has no other
distribution channel of its own in the country.
xiii) BIPL plans to develop its own network of client and managers for
distributing its products in India. This distribution channel would
help the Company in expanding its upcoming lower priced version
of its products to smaller clients.
xiv) As per the initial plans of BIPL, it envisages a time period of 3-4
months for setting up its own distribution network. For quick
execution of these plans the BIPL plans to appoint best talent from
Indian industry.
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Technical Feasibility
BIPL envisages upon setting up of a manufacturing facility to produce
eight varieties of Bitumen based waterproofing products at Dahej SEZ at
Bharuch in Gujarat
The plant would produce Bitumen based waterproofing products, shingles,
and adhesive products.
Manufacturing process for the proposed products is well established.
All the raw materials required to produce the proposed products are easily
available.
The proposed Plant and Machinery are appropriate for the propose project.
The plant will have installed capacity of 21.02 million m2 bituminous
membrane producing.
The plant availability factor will be at 80%. The optimum plant operating
capacity will be at 77%.
Land acquired for the proposed project is adequate for the requirements.
The building construction and civil works as above will be adequate for
the requirement of the project.
All the required infrastructure facilities are available at the project site.
Manpower of 57 persons at the maximum will be required to carry out
operations of the proposed project. The necessary manpower will be
available.
The proposed location is most suitable looking to various aspect
concerning to the proposed project.
The project will be fully implemented by March 2013 and start
commercial production from April 2013.
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Economic Viability
The operations of BIPL will earn increasing profits and cash accruals.
Profit after tax will increase from Rs. 691 Lacs in the year 2013-014 to Rs.
1893 Lacs in the year 2018-19.
The cumulative Gross DSCR will be 2.66 and cumulative Net DSCR will
be 3.28, which are satisfactory.
The BEP at 35% in the year 2013-14 reduces up to 23% in the year 2018-
19. Average BEP works out to 35%.
There will be enough positive cash surplus after all applications of funds.
The cash surplus at the end of the year 2018-19 will be Rs. 6725 Lacs.
The liabilities and assets will be well balanced. The net worth remains
positive and financial ratios work out to be satisfactory.
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X.2 Conclusions
In view of the market potential of Bitumen based waterproofing products,
BIPL management’s marketing experience and group set up as well as
proposed marketing strategy, it can be concluded that it will be possible
for BIPL to achieve targeted turn over.
Looking to the appraisal of various technical aspects of project proposed
by BIPL, it can be concluded that the project is technically feasible. With
the proposed manufacturing and infrastructure facilities, it will be possible
to achieve targeted production.
Looking to the appraisal of various economic aspects of project proposed
by BIPL, it can be concluded that the operations of project proposed by
BIPL will be economically viable. Looking to the returns, the proposed
investment is justified.
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65
ANNEXURE – I
NARDINI PRODUCTION LINE : PROCESS FLOW CHART
Singles
Raw Bitumen Production
Mixing Section
Line
Other Auxiliary
chemical Machinery
additives
Motors
Oil heating
System
Recyclable Dry cleaning Plastic Plastic Recycling Chillers
Plastic Centrifugal Machine Densifier Extruder & Accessories
Compressors
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66
ANNEXURE – II
(Rs. in Lacs)
Sr 2013- 2014- 2015- 2016- 2017- 2018-
. Particulars 14 15 16 17 18 19
I Current Assets
Raw Materials (30 866 1021 1100 1180 1215 1220
1 Days)
Pack Materials (30 10 11 12 13 13 13
2 Days)
Finished Goods (30 909 1072 1155 1239 1275 1280
3 days)
4 Book Debts (75 Days) 3028 3570 3847 4125 4246 4262
Working Exps (30 155 185 203 221 230 235
5 Days)
Total 4969 5859 6318 6779 6980 7011
II Current Liabilities
Goods Creditors (60 1752 2065 2225 2387 2457 2468
Days)
Total 1752 2065 2225 2387 2457 2468
II 3217 3794 4092 4392 4523 4543
I Net Working Capital
IV Bank Loan 1700 1700 1700 1700 1700 1700
V Margin Money 1517 2094 2392 2692 2823 2843
Interest on WCL 221 221 221 221 221 221
VI (13%)
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67
ANNEXURE – III
PROJECTED PROFITABILITY
(Rs. in Lacs)
Sr. Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Capacity
I Utilisation 55% 65% 70% 75% 77% 77%
II Production (M2) 9250560 10932480 11773440 12614400 12950784 12950784
III Income
Domestic Sales 11772 13878 14956 16039 16508 16569
Exports 6037 7117 7670 8225 8465 8497
Commission 356 420 453 485 499 501
Custom Duty 2717 3203 3451 3701 3809 3824
Net Income 14736 17372 18722 20077 20664 20741
IV Operating Costs
1 Raw Materials 10542 12423 13389 14361 14786 14849
2 Packing Materials 117 138 148 159 163 163
3 Power and Fuel 301 355 383 410 421 421
Other Mfg.
4 Expenses 104 123 132 142 146 146
Repairs &
5 Maintenance 85 94 103 113 125 137
6 Salaries and Wages 148 201 259 323 355 391
Selling, Admn,
7 Gen, Exp 516 608 655 703 723 726
Marketing
8 Expenses 737 869 936 1004 1033 1037
Total 12549 14810 16006 17214 17752 17870
V EBDIT 2187 2562 2716 2863 2912 2872
Financial
VI Expenses
1 Interest on TL 372 304 220 136 53 0
2 Interest on WCTL 221 221 221 221 221 221
3 Depreciation WDV 746 625 529 450 384 328
Total - 1339 1150 970 808 658
VI
I Profit Before Tax 848 1412 1746 2055 2254 2322
Tax Provisions
(18.50%) 157 261 323 380 417 430
VI
II Profit After Tax 691 1151 1423 1675 1837 1893
IX Cash Accruals 1438 1776 1952 2125 2222 2221
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ANNEXURE – IV
(Rs. in Lacs)
Sr. Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Capacity
I Utilisation 55% 65% 70% 75% 77% 77%
II Net Sales 14736 17372 18722 20077 20664 20741
III Variable Costs
Materials Cost 10658 12561 13538 14520 14949 15012
Power (80%) 222 262 283 303 311 311
Fuel 23 27 29 32 32 32
Other Mfg Expenses 104 123 132 142 146 146
Repairs and
Maintenance (80%) 68 75 82 91 100 110
Selling, Mktg, Gen,
Admn.(90%) 1127 1329 1432 1536 1581 1587
Interest on WC Loan 221 221 221 221 221 221
Total 12424 14598 15718 16844 17340 17419
IV Contribution 2312 2774 3004 3234 3325 3323
V Fixed Costs
Power (20%) 56 66 71 76 78 78
Repairs and
Maintenance (20%) 17 19 21 23 25 27
Salaries and Wages 148 201 259 323 355 391
Selling, Mktg, Gen,
Admn.(10%) 125 148 159 171 176 176
Interest on Term
Loan 372 304 220 136 53 0
Depreciation 746 625 529 450 384 328
Total 1464 1361 1258 1178 1070 1000
VI Break Even Point 35 32 29 27 25 23
Average 35%
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ANNEXURE – V
(Rs. in Lacs)
Sr. Particulars 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
I Sources of Funds
Equity 2320 500 0 0 0 0 0
Bank Term Loans 2900 0 0 0 0 0 0
Bank WC Loans 0 1700 0 0 0 0 0
Current Liabilities 0 1752 313 161 161 71 10
PBIT 0 1441 1937 2187 2413 2528 2543
Depreciation 0 746 625 529 450 384 328
Total 5220 6139 2875 2876 3024 2983 2882
Applications of
II Funds
CAPEX 5220 0 0 0 0 0 0
Current Assets 0 4813 860 441 443 192 26
Repayment of TL 0 322 644 644 644 647 0
Interest Payment 0 593 525 441 357 274 221
Taxation 0 157 261 323 380 417 430
Total 5220 5885 2290 1849 1824 1530 677
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ANNEXURE – VI
(Rs. in Lacs)
Sr. Particulars 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
I Liabilities
Equity 2320 2820 2820 2820 2820 2820 2820
Reserves and Surplus 0 691 1843 3265 4940 6777 8670
Bank Term Loans 2900 2578 1934 1291 647 - 0
Bank WC Loans 0 1700 1700 1700 1700 1700 1700
Current Liabilities 0 1752 2065 2225 2387 2457 2468
Total 5220 9542 10362 11301 12494 13755 15658
II Assets
Gross Block 5220 5220 5220 5220 5220 5220 5220
Depreciation 0 746 1371 1900 2350 2735 3063
Net Block 5220 4474 3849 3320 2870 2485 2157
Current Assets
Inventories 0 1785 2104 2268 2432 2504 2514
Book Debts 0 3028 3570 3847 4125 4246 4262
Cash & Bank Balance 0 255 839 1867 3067 4520 6725
Total Current
Assets 0 5068 6513 7981 9624 11270 13501
Total 0 0 0 0 0 0 0
Financial Ratios 5220 9542 10362 11301 12494 13755 15658
III Net Worth (Rs. Lacs) 2320 3512 4663 6085 7760 9598 11490
IV Debt/Equity 1.25 0.73 0.41 0.21 0.08 0.00 0.00
V Net FA/Term Loan 1.80 1.74 1.99 2.57 NA NA NA
VI CA/CL NA 2.89 3.15 3.59 4.03 4.59 5.47
VII Net CA/WC Loans NA 1.95 2.62 3.39 4.26 5.18 6.49
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ANNEXURE – VII
SENSITIVITY ANALYSIS:
(Rs. in Lacs)
Sr. Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Capacity
I Utilisation 55% 65% 70% 75% 77% 77%
II Production (M2) 9250560 10932480 11773440 12614400 12950784 12950784
III Net Income 14147 16677 17973 19274 19838 19912
IV Operating Costs 12498 14751 15943 17146 17682 17799
V EBDIT 1648 1926 2030 2128 2156 2113
Financial
VI Expenses 1339 1150 970 808 658 549
VI Profit Before
I Tax 309 777 1060 1321 1498 1563
VI
II Profit After Tax 252 633 864 1076 1221 1274
IX Cash Accruals 998 1258 1393 1526 1605 1602
X DSCR
Gross DSCR 1.97 1.65 1.87 2.13 2.37
Average Gross
DSCR 1.97
Net DSCR 3.10 1.95 2.16 2.37 2.48
Average Net
DSCR 2.34
XI
V IRR 36%
X
V BEP 45 41 38 35 32 30
Average BEP 45%
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72
SENSITIVITY ANALYSIS:
(Rs. in Lacs)
Sr. Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Capacity
I Utilisation 55% 65% 70% 75% 77% 77%
II Production (M2) 9250560 10932480 11773440 12614400 12950784 12950784
III Net Income 14736 17372 18722 20077 20664 20741
IV Operating Costs 12970 15307 16542 17789 18343 18464
V EBDIT 1766 2065 2180 2289 2321 2278
Financial
VI Expenses 1339 1150 970 808 658 549
VII Profit Before Tax 427 915 1210 1481 1663 1728
VIII Profit After Tax 348 746 986 1207 1355 1409
IX Cash Accruals 1094 1371 1515 1657 1740 1737
X DSCR
Gross DSCR 2.11 1.77 2.01 2.30 2.56
Average Gross
DSCR 2.12
Net DSCR 3.40 2.13 2.35 2.57 2.69
Average Net
DSCR 2.54
XIV IRR 38%
XV BEP 43% 39% 36% 33% 30% 28%
Average BEP 42%
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SENSITIVITY ANALYSIS:
73
74
SENSITIVITY ANALYSIS:
(Rs. in Lacs)
Sr. Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
I Capacity Utilisation 55% 65% 70% 75% 77% 77%
Producti 1295078
II on (M2) 9250560 10932480 11773440 12614400 12950784 4
III Net Income 14147 16677 17973 19274 19838 19912
IV Operating Costs 12498 14751 15943 17146 17682 17799
V EBDIT 1648 1926 2030 2128 2156 2113
VI Financial Expenses 1430 1230 1038 863 699 583
VII Profit Before Tax 218 696 992 1266 1457 1529
VIII Profit After Tax 178 567 809 1031 1187 1246
IX Cash Accruals 924 1192 1338 1482 1572 1575
X DSCR
Gross DSCR 1.80 1.55 1.77 2.05 2.31
Average Gross
DSCR 1.87
Net DSCR 2.87 1.85 2.08 2.30 2.43
Average Net DSCR 2.24
XI
V IRR 36%
XV BEP 48% 44% 40% 36% 33% 30%
Average BEP 47%
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75
SENSITIVITY ANALYSIS:
(Rs. in Lacs)
Sr. Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Capacity
I Utilisation 55% 65% 70% 75% 77% 77%
II Production (M2) 9250560 10932480 11773440 12614400 12950784 12950784
III Net Income 14736 17372 18722 20077 20664 20741
IV Operating Costs 12970 15307 16542 17789 18343 18464
V EBDIT 1766 2065 2180 2289 2321 2278
Financial 1430 1230 1038 863 699 583
VI Expenses
VII Profit Before Tax 336 835 1142 1426 1622 1694
VIII Profit After Tax 273 680 931 1162 1322 1381
IX Cash Accruals 1020 1305 1460 1612 1706 1709
X DSCR
Gross DSCR 1.93 1.67 1.91 2.21 2.50
Average Gross
DSCR 2.01
Net DSCR 3.17 2.03 2.27 2.50 2.64
Average Net
DSCR 2.45
XIV IRR 38%
XV BEP 45% 41% 37% 34% 31% 29%
Average BEP 44%
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76
SENSITIVITY ANALYSIS:
(Rs. in Lacs)
Sr. Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Capacity
I Utilisation 55% 65% 70% 75% 77% 77%
II Production (M2) 9250560 10932480 11773440 12614400 12950784 12950784
III Net Income 14147 16677 17973 19274 19838 19912
IV Operating Costs 12920 15248 16478 17720 18273 18393
V EBDIT 1226 1429 1495 1554 1565 1519
Financial 1430 1230 1038 863 699 583
VI Expenses
VII Profit Before Tax -204 199 457 691 865 935
VIII Profit After Tax -204 162 372 563 705 762
IX Cash Accruals 542 787 901 1014 1089 1091
X DSCR
Gross DSCR 1.29 1.14 1.29 1.46 1.63
Average Gross
DSCR 1.35
Net DSCR 1.68 1.22 1.40 1.57 1.68
Average Net
DSCR 1.49
XI
V IRR 26%
XV BEP 64% 57% 52% 47% 43% 40%
Average BEP 61%
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77
ANNEXURE – VIII
BASES OF PROJECTED PROFITABILITY
Sr. Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
I Capacity and Production
1 Total Production Capacity (m/year) 21024000 21024000 21024000 21024000 21024000 21024000
2 Plant Availability Factor 80% 80% 80% 80% 80% 80%
3 Capacity Utilization 55% 65% 70% 75% 77% 77%
Production 9250560 10932480 11773440 12614400 12950784 12950784
II Product Mix
1 APP Membrane -Polyester(CB)-PE//PE 70.00% 70.00% 70.00% 70.00% 70.00% 70.00%
2 APP Membrane -Polyester-PE//SLATES 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
3 APP Membrane -Glassfibre-PE//PE 15.00% 15.00% 15.00% 15.00% 15.00% 15.00%
4 SBS Membrane -Polyester-PE//PE 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
5 SBS - Self adhesive -Polyester-PE//PE 2.70% 2.70% 2.70% 2.70% 2.70% 2.70%
6 Shiengles - Polyester-PE//PE 0.30% 0.30% 0.30% 0.30% 0.30% 0.30%
7 Protection Boards 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Total 100% 100% 100% 100% 100% 100%
III Production Mix
1 APP Membrane -Polyester( CB)-PE//PE 6475392 7652736 8241408 8830080 9065548.8 9065548.8
2 APP Membrane -Polyester-PE//SLATES 462528 546624 588672 630720 647539.2 647539.2
3 APP Membrane -Glassfibre-PE//PE 1387584 1639872 1766016 1892160 1942617.6 1942617.6
4 SBS Membrane -Polyester-PE//PE 462528 546624 588672 630720 647539.2 647539.2
5 SBS - Self adhesive -Polyester-PE//PE 249765 295177 317883 340589 349671 349671
6 Shiengles - Polyester-PE//PE 27752 32797 35320 37843 38852 38852
7 Protection Boards 185011.2 218649.6 235468.8 252288 259015.68 259015.68
Total 9250560 10932480 11773440 12614400 12950784 12950784
8 Recycled Poly Propylene/TON 2000 2200 2420 2662 2928 3221
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79
80
80
81
81
82
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ANNEXURE – IX
TERM LOAN INTEREST AND REPAYMENT
(Rs. in Lacs)
Particulars 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Bank Term Loan
Quarter 1
Opening Balance 0 2900 2578 1934 1291 647 0
Interest @ 13% 0 94 84 63 42 21 0
Repayment 0 0 161 161 161 161 0
Closing Balance 0 2900 2417 1773 1130 486 0
Quarter 2
Opening Balance 0 2900 2417 1773 1130 486 0
Interest @ 13% 0 94 79 58 37 16 0
Repayment 0 0 161 161 161 161 0
Closing Balance 0 2900 2256 1612 969 325 0
Quarter 3
Opening Balance 0 2900 2256 1612 969 325 0
Interest @ 13% 0 94 73 52 31 11 0
Repayment 0 161 161 161 161 161 0
Closing Balance 2900 2739 2095 1451 808 164 0
Quarter 4
Opening Balance 2900 2739 2095 1451 808 164 0
Interest @ 13% 0 89 68 47 26 5 0
Repayment 0 161 161 161 161 164 0
Closing Balance 2900 2578 1934 1291 647 0 0
Annual Interest 0 372 304 220 136 53 0
Annual Repayment 0 322 644 644 644 647 0
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84
ANNEXURE – X
DEPRECIATION (WDV)
(Rs. in Lacs)
Sr
. Particulars/March End 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
1) Land
Value 169 169 169 169 169 169 169
Depreciation (0%) 0 0 0 0 0 0 0
Building and Civil
2) Works
Value 603 603 542 488 439 395 356
Depreciation (10%) 0 60 54 49 44 40 36
3) Plant & Machinery
Value 4261 4261 3622 3078 2617 2224 1890
Depreciation (15%) 0 639 543 462 392 334 284
4) Misc. Fixed Assets
Value 46.91 46.91 42.21 37.99 34.19 30.77 27.70
Depreciation (10%) 0.00 4.69 4.22 3.80 3.42 3.08 2.77
5) Vehicles
Value 93.81 93.81 79.74 67.78 57.61 48.97 41.62
Depreciation (15%) 0.00 14.07 11.96 10.17 8.64 7.35 6.24
6) Computers
Value 46.91 46.91 18.76 7.50 3.00 1.20 0.48
Depreciation (60%) 0.00 28.14 11.26 4.50 1.80 0.72 0.29
84