PROJECT APPRAISAL

FINANCING AND CONTROL

TERM PROJECT
RECYCLABLE INDUSTRY

Submitted To: • PRATEEK – 155/2019

• AASTHA GOEL - 135/2019
• SAHIL DEWAN – 174/2019
Dr. Anuj Verma • HIMANSHI NARANG -
 INTRODUCTION
Recyclable industry has occupied a unique place in the industrial scenario of our country by
generating substantial earnings from the corporate and governmental agencies. Its relevance
with respect to the sustainable environment has increased immensely over the years with a
significant contribution from the CSR and rising carbon footprint restrictions. With the move
towards electric vehicles in the automotive segment, stringent restrictions towards plastic and
polythene, the future of this industry is going to be immense and it is going to impact the lives
of millions in the coming years. With innovative attempts combined with conventional products,
this project report is prepared in lieu of providing products that are fully recycled and makes an
attractive portfolio for organizations adopting the environmentally sustainable way of operations
with least exposure to waste.

The purpose of the project is to create a B-plan for ABC (recycled manufacturing company)
The purpose is to create number of products like plastic bricks and tiles from plastic like Low-
Density Polyethylene (LDPE)Polypropylene (PP) Polystyrene (PS) can be used. These
plastics are easily available in the market in the form of thrown bottles, discarded car parts and
others. The process from waste to product involves sorting and cleansing the material and
processing it via specialized machinery from shredder to injection mounding and color paver
machines to reach to a product which is commercial and long lasting. Other products such as
plantable pens designed to be made from sustainable wood and recycled cardboard
with a dissolvable end capsule containing seeds. Such innovation and attractive
products quickly catch up demand in the market and since these products are
exclusive to smaller markets in the US, having the first mover advantage in the domain
will reap great benefits.

We will set up our manufacturing unit in Noida as it is easily accessible to the landfills and
factories that produce immense plastic and other waste. We will also be able to benefit from
the government state since they operate SEZ’s especially for uplifting the recyclable industry
while providing essential subsidies. We have planned to create jute bags for daily purpose as
well as combined with pelletized carbon (especially famous for acting as an anti-pollution bag)
as a way to cross-sell to the clients especially offices and large co-working spaces. Our produce
is environment friendly and benefit the society in dealing with the wastages incurred during
immense wastage of parts in the form of plastic. We plan to employ physically disabled for
unskilled job work and for stitching. We are targeting 20-40 years of age group having a
disposable income of 25-35k per month.

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PROJECT FEASIBILITY STUDY

Market Analysis

The global market size of recycled plastic is projected to reach USD 72.6 billion by the end of
2026. The existence of several large-scale companies across the world will have a constructive
impact on the growth of the market in the coming years.
According to a report by Fortune Business Insights, the market was worth USD 37.8 billion in
2018 and will exhibit a CAGR of 8.5% during the forecast period, 2019-2026.
India’s rising urban population and consumption has resulted in the increase of waste generation
in the country. The recycling of plastic which is critical is struggling not only because Indian
entrepreneurs lack the technical capability to recycle waste, but because of an inability to create
investible ventures in this sector.
Therefore, the necessity of this sector is to find a way to shift away from grant and subsidy
support and develop scalable as well as profitable ventures. This would increase the confidence
among the investors and to scaling up of the sector recycling in India. In addition, there is also
an urgent need of latest R&D technologies which can recycle single-use plastics and Multi-
Layer-Plastics at low costs.

The use of plastic is growing at a rapid rate in India, but this rate does not match with the rate
at which plastic waste is managed, indicating improper collection and disposal of plastic waste.

In India, two cities have set a good example in managing the plastic waste.

Bhopal and Indore, are using plastic waste in building roads. In India, only 24% of plastic waste
is recycled and the rest is dumped into the landfills. In the city of Indore where the waste
generated 130 MT of plastic waste daily, considers waste management as one of its top
priorities. This has promoted a sustainable environment by means of reduced usage, reuse,
reduced production and hence less disposal of plastic.

With the help of local NGO, an integrated program for waste management has been set up by
Indian government. Indore and Bhopal both the cities are recycling and reusing plastic for the
construction of roads.

The plastic waste is collected, scanned and segregated by usage value. The processing of single
use plastic waste (which consists of almost half of the plastic waste) shredded and baled. These
bales are then co-processed at cement kilns or used in building roads.

This model has not only employed the rag-pickers but also build a livelihood for many
impoverished men and women working in construction of roads. Roads made with mixed plastic
are durable and has high resistance to water.

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India recycles 70% of waste at registered facilities, 20% by unorganized sector and 10% at
home. India recycles 38% more plastic than global average of 20%.

An alternatively, petrol-based plastic carry bags has been introduced in the market, which is
100% biodegradable. Under the Swachh Bharat Mission, the government of India has also
encouraged the use of compostable carry-bags.

India uses the policy of reducing the waste produced, reusing the material
repeatedly, recycling the material to make new products and recovering energy from plastic
waste. India is finding a sustainable solution to of the most pressing challenge of plastic waste
management through mix of motivation, technology and knowledge.

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 An Insight into the Indian Polymer Industry

Polymer (plastic) Scenario & Trend in India

Factors driving the use of polymers in India are:
Demand for better materials, greater functional utility, more economical and versatile and
durable all-weather products, increasing use of plastic etc., to the tune of 20mn tons from
12.4mn tons in 2015-20E (At a 10% CAGR).

Major Polymer based Raw Material

The production of a variety of plastic raw materials are able to meet the requirement of different
sectors. Two ways the polymeric materials can be categorized: Commodity, engineering and
specialty plastics.

Commodity plastics: Polyethylene (PE), Polypropylene (PP), Polyvinyl Chloride (PVC) and
Polystyrene.
Engineering exhibit: Mechanical and thermal properties, which includes styrene derivatives
(PS/EPS & SAN/ABS), polycarbonate, Polymethyl methacrylate and polycarbonates etc.

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 India – Key Raw Material imports
India is overall deficit in PE, PVC and engineering plastics, which are imported to cater the
unmet domestic demand. The major import source countries: Saudi Arabia, Qatar, UAE,
Korea, USA, Singapore, Thailand, Germany, Spain and Malaysia.

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 Technology Trends in the Indian Plastic Processing Industry

Downstream industry: Methods of plastic processing

Various techniques polymers can be processed are as:
Extrusion, Injection Molding, Blow Molding and Roto-Molding.

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 Market Growth Drivers

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 Challenges in the Indian Plastics Industry

Highly Fragmented Market

Small and micro-players constitute majority of the units. More dependence on labor intensive
equipment which has adversely impacted the productivity. Unreliable power and high energy
costs in India are the constraints which hampered the capacity utilization.

Addressing Environmental Issues

The categorization of plastic as polluting material despite of usage and benefits needs to be
addressed. The guidelines should be laid down to collect and dispose of the plastics. There is
a wide scope for industries based on re-cycling of plastics waste. This issue however,
represents an opportunity to explore substitutes which are environment friendly.

Technology needs
This industry has seen a shift from low output/low technology machines to high output, high
technology machines. There has been some major technological advancement of global
standards leading to achievements.

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 However, the technology needs in India are critical in areas like
high production and automatic blow molding machines, multilayer blow molding, Stretch/
Blow Molding Machines, specific projects involving high CAPEX like PVC calendaring,
multilayer film plants for barrier films, multilayer Cast lines, BOPP and Nonwoven depend
solely on imported technology/machinery.

Other technological needs are:

▪ Multilayer blown film line up to 9/11 layers
▪ Automatic Block bottom bags production line
▪ Higher tonnage Injection Molding machine >2000 T
▪ Higher tonnage >500 T all electric Injection Molding machines

Price pressure
Because of increased & volatile input prices facing tough times. Lower profits despite of higher
volume realization due to the increase in crude oil prices along with the continuous fall in rupee
value. Hike in import duty on raw materials affecting the manufacturers

Issues with Skilled Labor

Despite India having a huge population, plastics companies have reported problems with labor
shortages. This has led to increased investment in technology such as automation and conveyor
belt system.

Long term Opportunity

This industry has changed our lives in many aspects. It has the potential to continue to change
the way we build our roads, houses and the way we live everyday life. It has a significant
impact on our economy, generation of wealth and in job creation.

The current need of this industry is to invest in modern equipment to reduce costs and improve
performance and improve installed capacities in order to achieve economies of scale.

With Government's current campaign on 'Make in India' which has a special focus on the
turning the country into a global manufacturing hub, a tremendous growth in the plastic
processing sector is expected.

The government should also facilitate in providing better infrastructure and favorable policies
and also encourage penetration of plastic processing industry.

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 Porter’s 5 Forces Analysis

SWOT Analysis

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 Technical Analysis

A technical feasibility study tests the way you plan to provide the consumer with a product
or service. Think of the company's products, manpower, shipping, and the technologies
required to bring all of this together. It is the strategic or operational approach for
manufacturing, transporting, distributing, and monitoring the business' goods or services.

An excellent method to help troubleshoot and long-term preparation is a technical feasibility

report. It will act as an explanation of how your goods and services grow and pass through
your organization to enter the customers physically.

We have decided to set up our plant in Noida since it is geo-technically the most feasible
option for us. The state enjoys SEZ status by Government of India. The state is one of the
most feasible yet accessible for waste collection from different regions. The waste of plastic
would be then mostly generated in and around the state and thus we will save on
transportation cost of transporting the raw material needed for our manufacture.

We are bringing in a new concept of making bricks out of plastic that is durable and lasting as
compared to the normal ones and eventually cross-selling other complementary products with
a plan to expand the portfolio as per the demand of the industry. The concept of our products
originated from various ideas in different countries but are not well introduced in India. The
products are free from any licenses and open for production. By using the existing technology
required, we are saving on our R&D expenditure as well. Thus, also validating the fact that we
are technically sound to start production any day.

Our plan is technically viable also because we are employing both skilled and unskilled labor
and even disabled workforce thus promotes equality among the workforce. The labor
requirements are met by employing from the lower most strata of classes.

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 Financial Analysis

Basic Underlying Assumptions

1. Based on our secondary research, we have decided to set up plastic shredder machine, automatic plastic
injection moldings machine and a brick compressor machine to manufacture plastic bricks. While, for
jute bag and jute bag air purifier machines are required for cutting, pressing and stitching recycled Jute.
To support the capacity of these machines, we have decided to set up paver machines with conveyers
and containers. Total Est. Capex of these machines came out to be 67.3 lacs, which is comparable to the
cost of setting up a similar plant.
The Output per hour and individual cost has been shown below. The maximum output for
manufacturing cloth, is generated by the De Fabrication machine and hence its output has been set as
standard. All the other machines are adjusted in quantity to match the output of De Fabrication machine.

Cost in
Machinery Rs. Total
Plastic shredder machine 800000
Automatic Plastic Injection Moulding Machine 650000
Hydraulic Press Bricks compressor 1000000
Extruder machine for stationary 200000
Jute cutting and Hot fusing press machinery 300000
Waste paper recycling machine 950000
Fully automatic colour Paver machine with conveyors 1000000
Fully Automatic Fly Ash Bricks Making Machine 1500000
Stiching machine for Jute bags 30,000 6.43
Container 0.3
6.73

2. We are setting our plant in www because the city enjoys privileges especially for promoting our
products in corporate offices near buy. We will also be close to Delhi. The land is measured in the unit
of cents in the region.
1 cent = 40 sq. m

The cost of lease is estimated at 255814 per Cent of area. Power rate for our manufacturing plant is 7.5
kw/hr. The cost of Land and Power is estimated as below.
For Machines, the area has been doubled to take into account the area for operating these machines.

3. One shift is of 8 hours and we have two shifts in a day. We have assumed 300 working days in a year.
4. Annual production capacity of our manufacturing unit is 100 per kilograms
25 x 16 x 300
(Per hour output x total number of productive hours x total number of working days in a year)

5. We have assumed that in a kilogram’s plastic, we can make 4 bricks (250 grams each). The final output
expected per hour is 25 kilograms.

6. All other equipment is taken as per the requirements of our annual production capacity and the
processing capacity of our plant.

7. The costing for a kilogram’s output of corn husk is shown below. A kg of output produces 4 t-shirts
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 So, the SP of a single t-shirt comes out to be Rs. 683

8. We have started with a 50% capacity utilization as we are bringing in a new concept to
India and the conversion of waste into bricks and other stationary items will include wastages as well.
That is why we are starting with a low utilisation rate and as the years go by, the experience would help
us increase our efficiency and product variety to 75%

1 2 3 4 5 6 7 8 9 10
50% 54% 57% 61% 66% 70% 75% 75% 75% 75%

9. The project will be financed through on a ratio of Debt: Equity = 1.5:1. The state government is
providing an incentive/loan of 21 lacs for implementation of project in Andhra Pradesh

Interest
Proposed means of finance for the project are as follows: Amount rate
Share capital 3.296
Term loans 4.944 @ 14%
State Govt. Loan
8.24

The term loan is taken at the rate of 14% and the bank is Punjab national bank.

10. We have taxed at 26% according to the general trend of the textile industry.

11. Building cost comes out to be 18 lacs which include a pre-fabricated shed and the construction

12. Depreciation has been assumed as per the Income Tax Act and Companies Act for Tax Purposes and
Profit Calculation

13. Inventory Days, Creditor Days, Debtor Days and other Production Cycle relevant details are as follows:

Norms in months Months

R.M 1.5
S.I.P 2.5
F.G 0.5
B.D 1

Margin W.C from

long term Sources 25%
(25% of Total asset)

Raw Material credit 0.5

for half month

Interest 11.90%

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14. The breakup of Selling and Distribution expenses, Administration expenses, Salaries, Wages and
Overhead Costs are estimated on the basis of similar business cost

Number Rate Monthly Annual

Selling Expenses
Sales and
2 60000 120000
Marketing Head

Advertisement &
₹ 58,333
Marketing

Postage and
10000
Stationery

Transport 20000
₹ 2,08,333 ₹ 25,00,000.000
Administration
Expenses

Account Officer 1 20000 20000

Store Keeper 2 12000 24000

Repair and
10000
Maintenance

Telephone bill 500

Miscellaneous
₹ 4,667
Expenses
₹ 59,166.67 ₹ 7,10,000.000
Salaries & Wages
Security 2 6000 12000
Techicians 3 10000 30000
Plant Manager 1 25000 25000
Supervisors 1 15000 15000
Unkilled Workers 6 8000 48000
Cleaners 2 4000 8000
Accountant 1 7000 7000
Purchase Manager 1 35000 35000
180000 2160000

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 FINANCIAL PROJECTIONS
BASIC DETAILS
Installed Capacity (tpa) 100
1 2 3 4 5 6 7 8 9 10
capacity utilization 50% 54% 57% 61% 66% 70% 75% 75% 75% 75%

sales realization per ton 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

Raw material 60% 60% 60% 60% 60% 60% 60% 60% 60% 60% 60%
% of sales
Power % of sales 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

wages & salaries 2.16 2.16 2.18 2.23 2.27 2.32 2.36 2.41 2.46 2.51
Factory overheads 0.4 0.4 0.4 0.42 0.44 0.46 0.49 0.51 0.54 0.56

Administration expenses 0.71 0.71 0.71 0.71 0.71 0.71 0.71 0.71 0.71 0.71

selling expenses 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

Cost of Project is estimated at as follows:

Land and Site development
Building
Plant and Machinery 6.43
Miscellaneous Fixed assets 0.3
Preliminary expenses 0.5
Written off
Contingency Margin 0.66
Working capital margin 0.35
Capex 7.39

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 Working Capital

Items Norms in 1 2 3 4 5 6 7 8 9 10
Months
1. Raw Materials 1.5 1.88 2.01 2.15 2.30 2.46 2.63 2.81 2.81 2.81 2.81
(including consumables)
2. Stock-in-process 2.5 4.18 4.43 4.71 5.02 5.34 5.69 6.06 6.08 6.09 6.11
3. Finished Goods 0.5 0.87 0.92 0.97 1.03 1.10 1.17 1.24 1.24 1.25 1.25
4. Book debts 1 1.94 2.06 2.18 2.32 2.47 2.63 2.80 2.80 2.81 2.81

Total Current Assets 8.86 9.41 10.01 10.67 11.37 12.12 12.92 12.94 12.96 12.99

Less Margin W.C from

long term Sources 25% 2.21 2.35 2.50 2.67 2.84 3.03 3.23 3.23 3.24 3.25
( 25% of Total asset)
Less Trade Credit for
Raw Materials and 0.5 0.63 0.67 0.72 0.77 0.82 0.88 0.94 0.94 0.94 0.94
Consumables stores
Bank Finance for W.C. 6.02 6.39 6.79 7.24 7.71 8.21 8.75 8.77 8.78 8.80
Interest 12% 0.72 0.76 0.81 0.86 0.92 0.98 1.04 1.04 1.05 1.05
Increase
Bank borr 6.02 0.37 0.40 0.44 0.47 0.50 0.54 0.01 0.02 0.02

NWC 8.23 8.74 9.30 9.90 10.55 11.24 11.98 12.00 12.02 12.05

Increase 8.23 0.51 0.55 0.61 0.65 0.69 0.74 0.02 0.02 0.03

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 DEPRECIATION

Assets Basic Share of Total

Land Cost contigency
Building margin
Plant and Machinery 6.43 0.63 7.06
Miscellaneous fixed assets 0.3 0.03 0.33 7.39

B. Depriciation schedule for Company Law Purposes( SLM)

Years 1 2 3 4 5 6 7 8 9 10
Building
Plant and
Machinery 10.00% 0.71 0.71 0.71 0.71 0.71 0.71 0.71 0.71 0.71 0.71
Miscellaneous 9.50% 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03
fixed assets
Annual depreciation 0.74 0.74 0.74 0.74 0.74 0.74 0.74 0.74 0.74 0.74

C.Depriciation Schedule for income tax purpose (W.D.V)

1 2 3 4 5 6 7 8 9 10
Building

Plant Mach. 30.00% 2.12 1.48 1.04 0.73 0.51 0.36 0.25 0.17 0.12 0.09
& misc. 4.94 3.46 2.42 1.70 1.19 0.83 0.58 0.41 0.28 0.20
Fixed asset 10.00% 0.033 0.030 0.027 0.024 0.022 0.019 0.018 0.016 0.014 0.013
0.2965 0.267 0.240 0.216 0.195 0.175 0.158 0.142 0.128 0.115
CUMLATIVE
TOTAL DEP. 2.15 1.51 1.06 0.75 0.53 0.38 0.27 0.19 0.14 0.10

Tax
SLM
TOTAL 0.27 0.65 1.02 1.37 1.75 2.15 2.58 2.57 2.56 2.55
Less: Dep 2.15 1.51 1.06 0.75 0.53 0.38 0.27 0.19 0.14 0.10
Tax purpose
Profit/Loss -1.88 -0.87 -0.04 0.62 1.22 1.78 2.31 2.38 2.43 2.46
less Unabsorbed -1.88 -2.75 -2.79 -2.17 -0.94
Dep.
Gross total income 0 0 0 0 -0.94 1.78 2.31 2.38 2.43 2.46
Income tax @26
percent of 0.00 0.00 0.00 0.00 -0.25 0.46 0.60 0.62 0.63 0.64
total income

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Profitability
PROJECTED INCOME STATEMENT
Years 1 2 3 4 5 6 7 8 9 10
Profitability statement

Installed capacity(tpa) 100 100 100 100 100 100 100 100 100 100
Production(tpa) 50 53.5 57.25 61.25 65.54 70.13 75.04 75 75 75
Capacity Utilization 50% 54% 57% 61% 66% 70% 75% 75% 75% 75%

A Sales Realization 25.00 26.75 28.62 30.63 32.77 35.06 37.52 37.50 37.50 37.50

B Cost of Production
- Raw Materials 15.00 16.05 17.17 18.38 19.66 21.04 22.51 22.50 22.50 22.50
- Power 2.50 2.68 2.86 3.06 3.28 3.51 3.75 3.75 3.75 3.75
- Wages and Salries 2.16 2.16 2.18 2.23 2.27 2.32 2.36 2.41 2.46 2.51
- factory overheads 0.40 0.40 0.40 0.42 0.44 0.46 0.49 0.51 0.54 0.56
(S.I.P) 20.06 21.29 22.62 24.08 25.65 27.32 29.11 29.17 29.24 29.32

C Aministration and 1 2 3 4 5 6 7 8 9 10
selling Expenses
- Administration Expenses 0.71 0.71 0.71 0.71 0.71 0.71 0.71 0.71 0.71 0.71
Finished Goods 20.77 22.00 23.33 24.79 26.36 28.03 29.82 29.88 29.95 30.03
- Selling Expenses 2.50 2.68 2.86 3.06 3.28 3.51 3.75 3.75 3.75 3.75
Book Debts 23.27 24.67 26.19 27.86 29.64 31.54 33.57 33.63 33.70 33.78
D Gross Profit Before interest 1.73 2.08 2.43 2.77 3.13 3.52 3.95 3.87 3.80 3.72

E Total Financial Expenses

- Interest on term loans 0.69 0.62 0.55 0.48 0.42 0.35 0.28 0.21 0.14 0.07
- Interest on bank borrowings 0.72 0.76 0.81 0.86 0.92 0.98 1.04 1.04 1.05 1.05

F Depriciation 0.74 0.74 0.74 0.74 0.74 0.74 0.74 0.74 0.74 0.74

G Operating Profit -0.42 -0.04 0.33 0.69 1.06 1.46 1.89 1.88 1.88 1.87

H Preliminary Expenses Written Off 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05

I Profit/ Loss Before Tax -0.47 -0.09 0.28 0.64 1.01 1.41 1.84 1.83 1.83 1.82

J Provision For Tax 0.00 0.00 0.00 0.00 -0.25 0.46 0.60 0.62 0.63 0.64

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G Operating Profit -0.42 -0.04 0.33 0.69 1.06 1.46 1.89 1.88 1.88 1.87

H Preliminary Expenses Written Off 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05

I Profit/ Loss Before Tax -0.47 -0.09 0.28 0.64 1.01 1.41 1.84 1.83 1.83 1.82

J Provision For Tax 0.00 0.00 0.00 0.00 -0.25 0.46 0.60 0.62 0.63 0.64

K Profit After Tax -0.47 -0.09 0.28 0.64 1.26 0.95 1.24 1.21 1.20 1.18

L Less Dividend 0 0 0 0.06592 0.06592 0.06592 0.13184 0.13184 0.13184 0.13184

M Retained profit -0.47 -0.09 0.28 0.57 1.19 0.89 1.11 1.08 1.06 1.05

N Add: Depriciation 0.74 0.74 0.74 0.74 0.74 0.74 0.74 0.74 0.74 0.74
Preliminary Expenses Written Off
0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05

Interest on term loan 0.69 0.62 0.55 0.48 0.42 0.35 0.28 0.21 0.14 0.07
Terminal value of FA 0.02
Terminal value of CA 9.96
CFAT 1.01 1.32 1.62 1.91 2.46 2.09 2.30 2.21 2.12 2.04
pv @ 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270
PV of CFAT 0.889 1.015 1.096 1.130 1.279 0.950 0.921 0.774 0.652 3.239
NPV 3.706187

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 CASH FLOW STATEMENT
Years 0 1 2 3 4 5 6 7 8 9 10
Sources of Funds

- Share issue 3.296

- Profit before taxation
with interest add back 0.94 1.29 1.65 1.98 2.35 2.74 3.16 3.08 3.01 2.93
- Depriciation 0.74 0.74 0.74 0.74 0.74 0.74 0.74 0.74 0.74 0.74
- Preliminary expenses
written off 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05
- Increase in secured medium
and long term borrowings 4.944
- Increase in Bank borrowings
for working Capital 6.02 0.37 0.40 0.44 0.47 0.50 0.54 0.01 0.02 0.02
- Interest in the state Govt's
Special incentive loan

Disposition of Funds

- Capital expenditure of
for the project 7.39
- Increase in working capital 8.23 0.51 0.55 0.61 0.65 0.69 0.74 0.02 0.02 0.03
- Preliminary expenses 0.5
- Decrease in Secured medium
and long term borrowings 0.49 0.49 0.49 0.49 0.49 0.49 0.49 0.49 0.49 0.49
- Interest on term loans 0.69 0.62 0.55 0.48 0.42 0.35 0.28 0.21 0.14 0.07
- Interest on bank borrowings
for Working Capital 0.72 0.76 0.81 0.86 0.92 0.98 1.04 1.04 1.05 1.05
- Taxation 0.00 0.00 0.00 0.00 -0.25 0.46 0.60 0.62 0.63 0.64
- Dividend 0 0 0 0.066 0.066 0.066 0.132 0.13184 0.1318 0.132

TOTAL (B) 7.89 10.137 2.3883 2.40999 2.511 2.294 3.037 3.284 2.514239 2.4655 2.407

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Balance Sheet
PROJECTED BALANCE SHEET

Years 0 1 2 3 4 5 6 7 8 9 10
Liabilities
- Share Capital 3.30 3.30 3.30 3.30 3.30 3.30 3.30 3.30 3.30 3.30 3.30
- Reserve and Surplus -0.47 -0.56 -0.27 0.30 1.49 2.38 3.48 4.57 5.63 6.68
- Secured loans
:Term loans 4.94 4.45 3.96 3.46 2.97 2.47 1.98 1.48 0.99 0.49 0.00
: Working capital adv. 6.02 6.39 6.79 7.24 7.71 8.21 8.75 8.77 8.78 8.80
- Unsecured loans
: State Govt. loan
- Current liabilities and
Provisions
: Trade credit 0.63 0.67 0.72 0.77 0.82 0.88 0.94 0.94 0.94 0.94

TOTAL 8.24 13.92 13.75 13.99 14.56 15.79 16.74 17.95 18.55 19.14 19.71

Assets
- Fixed Assets
: Gross Block 7.39 7.39 7.39 7.39 7.39 7.39 7.39 7.39 7.39 7.39 7.39
: Less accumulated
Depriciation 0.74 1.5 2.2 2.9 3.7 4.4 5.2 5.9 6.6 7.4
: Net Fixed Assets 7.39 6.65 5.92 5.18 4.44 3.70 2.97 2.23 1.49 0.75 0.02
- Investments
- Current Assets, loans
and advances
: Raw Materials 1.88 2.01 2.15 2.30 2.46 2.63 2.81 2.81 2.81 2.81
: Stock-in-Process 4.18 4.43 4.71 5.02 5.34 5.69 6.06 6.08 6.09 6.11
: Finished Goods 0.87 0.92 0.97 1.03 1.10 1.17 1.24 1.24 1.25 1.25
: Book Debts 1.94 2.06 2.18 2.32 2.47 2.63 2.80 2.80 2.81 2.81
: Cash and bank balance 0.35 -2.04 -1.97 -1.55 -0.85 0.46 1.46 2.66 4.03 5.38 6.71
- Miscellaneous Expenditure
and Losses
: Preliminary expenses 0.5 0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00

TOTAL 8.24 13.92 13.75 13.99 14.56 15.79 16.74 17.95 18.55 19.14 19.71

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 Loan Schedule
Loan 4.944 @ 14%
(Rs\ in million)
Year loan O/S at loan O/S at Int. for the Total
beginning Repayment end year payment

I 4.94 0.49 4.45 0.69 1.19

II 4.45 0.49 3.96 0.62 1.12
III 3.96 0.49 3.46 0.55 1.05
IV 3.46 0.49 2.97 0.48 0.98
V 2.97 0.49 2.47 0.42 0.91
VI 2.47 0.49 1.98 0.35 0.84
VII 1.98 0.49 1.48 0.28 0.77
VIII 1.48 0.49 0.99 0.21 0.70
IX 0.99 0.49 0.49 0.14 0.63
X 0.49 0.49 0.00 0.07 0.56

Financial Break – Even

Financial break even VC 0.8

FC 3.476425
Sale 26.76 Dep 0.737353
VC 21.41 Tax 0.26
FC 3.48 Investment 8.24
PBDT 1.88 Terminal Value 0.016471
Dep 0.74 Cost of Capital 0.14
PBT 1.14 Term 10
Tax 0.30 Expected rate of return 0.07
Pat 0.84
CFAT 1.58
PVCFAT 5.22
PV OF TV 0.00 Accounting Breakeven 21.07
TPV 8.24
NPV 0.00 Cash Breakeven 17.38

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Scenario Analysis

TO BE DONE

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REFERENCES:

• S.S. Bhattacharya, A.A. Mandot, M.H Patel, 2018, “Maize Yarn Production from
fabricated equipment”, M.S. University of Baroda
• Study on “Garment Sector to understand their requirement for capacity Building”,
Ministry of Textiles, 2018
• “Project Profile on Gents Shirts and Trousers”, MSME Development Institute.
Ministry of MSMEs, 2011
• Care Ratings Research Report on Indian Textiles – Apparels
• IBEF
• Indiamart.com
• MagicBricks.com

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