Ib on Granites

8/11/2019 Ib on Granites

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International usiness Plan

1. Aakash Jajodia (78)

2.

Aanchal Bhasin (79)

3. Abhishek Mimani (81)

4. Aditya Somani (82)

5. Mehul Bansal (114)

6. Rishi Verma (128)

International Stones Pvt. Ltd.

Sukher Industrial Area, Udaipur

Rajasthan-313001



I. Table of Contents

I. Table of Contents ............................. ................................ ................................ ................................. ...... 2

II. Executive Summary ................................ ............................... ................................. ................................ . 3

III. Business Description .............................. ............................... ................................. ................................. 4

IV. Market Research ................................ ................................ ................................ ................................ ....... 6

V. Marketing Decisions ............................... ............................... ................................. ................................. 9

VI. Legal Decisions ......................................................................................................................................11

VII. Manufacturing & Operations ............................... ................................. ................................ ...............15

VIII. Personnel Strategy..................................................................................................................................17

IX. Financial Decisions ................................................................................................................................19



II. Executive Summary

Key Elements & Objective of the Plan :

The main objective of this plan is to set up a successful 100% EOU which deals in the

manufacturing & exports of Granite.

Business Description & Target Markets :

We, International Stones Pvt. Ltd. are into exports of Granite which is found in the North

Western part of India, particularly in Devgarh, Rajasthan. The granite from this part of India is

famous for its color & strength & is in huge demand in the Gulf Countries.

Management Team :

1) Aakash Jajodia -

2) Aanchal Bhasin –

3) Abhishek Mimani –

4) Aditya Somani –

5) Mehul Bansal –

6) Rishi Verma -

Financial Summary : (INLAKHS)

- Initial Cost of the Project = 956.00

- Project Breakeven Sales = 40% CAPACITY UTILIZATION- The Internal Rate of return = for the first year itself it is 12.3%

- Gross Profit/(loss)

Year 1 Year 2 Year 3

213.24 268.93 314.06

- Net Profit/(loss) before tax

Year 1 Year 2 Year 3

29.45 92.08 144.14



III. Business Description

GRANITE – The Product & its advantages :

Granite technically refers to a light-coloured granulose plutonic rock composed of felspars,plagioclase, quartz (felsic minerals) and minor amounts of mafic minerals, such as biotite,

hornblende, pyroxene, iron oxides, etc. But, in the commercial parlance, the term granite hasbecome synonymous with all those crystalline rocks which have pleasing colours, strength tobear the processes of quarrying and cutting & polishing and are used commonly for decorativepurposes. Being more resistant to wear and tear as well as weathering, granite is most sought-after stone to be used as building as well as decorative stone. The fascination for granite is due toits taking mirror-like polish, high compressive strength, longevity and beauty.

Variety of colours in Granite is traded in the world market with different price tags. High price isfetched for the rare colours including Jet-Black, Pearl Blue and Deep Green. These colours arefound in South Africa, Brazil, Norway, India and Pakistan.

The specific gravity of Granite ranges from 2.63 to 3.30. Granite has greater strength thansandstone, limestone or Marble and is correspondingly more difficult to quarry. It is animportant building stone, and its maximum usage is in the external flooring and facing followedby internal flooring.

The Granite that we have chosen to start off with is called the Mystique Black & it is found in& around Devgarh, Rajasthan.

Sr.No.

Parameter Specification

1. Compressive Strength 1250 kg/cm2

2. After freezing 1090 kg/cm2 3. Ultimate Tensile Strength 140 kg/cm2 4. Water Absorption 0.70%5. Bulk Density 2610 kg/m3 6. Modulus of Rupture 150 kg/cm2 7. Abrasion 0.8 mm

Market Opportunity & Industry Structure:

From a global view point the natural stone industry is growing rapidly. Since the beginning of the1990’s, production has risen annually by an average 7.3% and international trade has evenincreased by an average 8.7%. Worldwide natural stone extraction is meanwhile estimated at 150million tons gross per year. Annual production after deduction of waste and cutting lossesamounts to about 820 million square-meters – referred to a slab thickness of 2 cm. The totalproduction value is estimated at 40 billion US $.

Italy, China and Spain are the major players in the international market and exported more than55% of the dimensional stone’s products (blocks and processed) by value. Other major exportersinclude Brazil, Spain, India, Turkey and Portugal.



Indian Granite Industry :

Size of the Industry : There are over 100 manufacturers in India for Granites & there arealso a few trading companies.

Geographical Reserves : Over 5000 million cubic meters

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 devgarh, 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.



IV. Market Research

India has one of the largest reserves of granite in the world and exported Rs 2,600 crore (Rs26 billion) worth of the stone in the past years. Granite exports this fiscal are expected totouch Rs 2,800 crore (Rs 28 billion) and nearly one-fourth of these exports is accounted forby monument stones.

About 85-90 % of the total granite production in the country is for exports. So after therecession period is over the industry will again regain its demand .This is the best time for anentrepreneur to venture into this sector.

Last fiscal, the total exports of granite and marble from India had crossed the Rs 4,000 croremarks with the US accounting for the bulk of the consumption (40%).

The All India Granite and Stones Association (AIGSA), which estimated a 10 % increase inoverseas sales for 2007-08, found the export market no more lucrative.

The granite industry in Rajasthan has been growing at 50% annually

Import of Granite : Total (By Countires)

Sr.No.

Country2009-10 2010-11

Qty (in tons) Value (Rs. ‘000) Qty (in tons) Value (Rs. ‘000) All Countries 51214 1016841 55554 1163349

1. Norway 23972 444656 17452 323873

2. China 5873 135699 12426 262965

3. Brazil 2557 46669 6562 127325

4. Italy 2027 43298 3457 121606

5. Finland 3428 59171 4098 54203

6. Saudi Arabia 2877 79523 1762 53813

7. South Africa 3850 63523 2815 42873

8. Ukraine 2136 34260 1177 23615

9. Angola 1177 30052 1183 21606

11. Madagascar 618 20182 897 28411

10. Other Countries 2699 59808 3725 103059

We are going to export in gulf because gulf is now becoming a huge marketfor granites because the construction and development is on a high now.Looking at the exports of last few years & the demand tread of various countries, we haveidentified the following target markets



Target Markets :

Primary – DUBAI - GULF CountriesSecondary – ITALY

Tertiary - VIETNAM

Market Conditions in the Target Market :

1. Existing Demand : The granite going to be exported by us is mainly going to be used for Commercial purpose& the exiting demand for Granite is extremely good in the Dubai & the Gulf countries sincethe construction industry is booming over there & demand for exotic Granites, stones etc. isalways there.

2. Competition : The competition is pretty stiff especially from China since they offer a wider range of

varieties at a very cost effective price. China also has far higher reserves of Granite that arespread throughout the county so the abundance makes it possible for them to give a betterprice.

However, people in Dubai still prefer to work with us because of the following reasons

- Higher durability of the product- Better finishing.- Less variations in a particular granite.- Better stocking &- Faster supplies.

3. Strength & weaknesses of the economy :

Strength – Huge cash surplus so they have the capacity to splurge. Also, the import Duty inDubai is only 5% which makes it easier to export to Dubai & from there on to other gulfcountries.

Weakness – Due to the recent recession, the payment schedule had been affected, therebyincreasing the WC turnaround time. However, after the Dubai 2020 Expo, things havestarted to improve.



V. Marketing Decisions

Distribution Strategies :

We will be following the Indirect Exports Strategy & we will appoint a Sole agent for distribution

over with a Go-down area of atleast 10000 sq. ft there who will sell it to End Customers over

there as per the Cut sizes required by them. He will be the authorized person who will be looking

after the entire Gulf region.

Pricing Strategy :

Our Buying prices is based on per cmt (cubic meter) & the selling price is on Square mtr. Rest of

the costing are being explained in the financials.

Promotion Strategy :

WELL AS DISCUSSED FIRSTLY WE ARE PLANNING TO EXPORT IT TO DUBAI FOR

OBVIOUS REASONS, WE ARE GOING TO MAKE AN AGENT OR A EXISTING

REPRESENTATIVE THERE WHICH HOLDS APPROXIMATELY 10000 SQ FT. GO-

DOWN AREA, THAT’S A NECESSITY BECAUSE THAT WAY HE WILL BE ABLE TO

DISPLAY OUR GRANITE SLABS.

IN GULF GRANITE IS USUSALLY USED FOR THREE THINGS:-

1)

COUNTER TOPS2) FLOORING

3) PROJECTS

OUR MAIN IS TO ACQUIRE BIG PROJECTS THAT WAYS THE MARGIN IS ALSO A

BIT MUCH WITH THE HELP OF THE REPRESENTATIVE AND IF EVERYTHING

GOES WELL, WE HAVE A PLAN 0F OPENING OUR OFFICE ONLY IN FEW YEARS

FROM NOW.

WE WILL TRY AND USE BOTH PUSH AND PULL STRATEGIES.



Product Strategy :

IN TERMS OF THE PRODUCT STRATEGY THE PRODUCT WHICH WE ARE GOING

TO SELL (MYSTIQUE BLACK GRANITE) HAS VARIATIONS IN ITSELF SO FIRST WE

WILL START WITH THE CHEAPEST AVAILABLE GRADE AND THEN WE WILL SEE

IF IT GETS APPROVAL IN THE GULF MARKET WE WILL STICK TO IT AND IF NOT

THEN WE WILL SHIFT TO BETTER GRADE

Sales

COUNTER TOPS

FLOORING

PROJECTS



VI. Legal Decisions

Agent/Distributor Agreements As mentioned above we will be appointing a Sole Distributing Agent for our exports to Dubai &hence it is absolutely necessary for us to make sure that we have an agreement with the Agent.

Our agreement is as given below:

SOLE Selling Agent Agreement

An Agreement made on this 1st day of January 2014 between International Stones Pvt. Ltd., manufacturers ofGranite slabs & Tiles hereinafter called the “Manufacturers” of the one part AND Stoners, hereinafter called the“Sole Agent” of the other part.

Whereas the manufacturers are engaged in the manufacture of Granite Slabs , Tiles & counters and are desirousof appointing a Sole Selling Agent for the sale of the same.

And Whereas the sole agent has approached the manufacturers for appointment as the sole selling agent forGranite products of the Manufacturer and is willing to perform the duties as such.

Now This Agreement Witnesses as follows:

1. The manufacturers appoint ------ as the sole selling agent for the goods manufactured by them for the gulfcountries(UAE, OMAN, SAUDI, Muscat, Qatar). The sole agent shall have exclusive right to sellthe goods of the manufacturers in the afore-mentioned area.

2. This appointment is being made by the Board of Directors subject to the condition that the appointmentshall cease to be valid if it is not approved by the company in the first general meeting held after the date

of this appointment (Approval by the company in the first general meeting held after the date ofappointment is mandatory under section 294 (2) of the Companies Act, 1956.

3. This appointment shall last for a period of five years computed from the date of this agreement. It may,however, be extended for further periods not exceeding five years on each occasion. (Under section 294 (1)of the Companies Act, 1956, no company shall appoint a sole selling agent for a term exceeding five yearsat a time)

4. The manufacturers undertake not to sell their goods in retail below the prices as per price list ofmanufacturers..

5.

For the first year the prices mentioned in CI.4 shall be binding on the parties. Thereafter the prices shallbe liable to increase or decrease according to fluctuation in market quotations.

6. The sole agent shall be entitled to a commission of 5 per cent. On the sale price of the goods.

7. The sole agent shall have 20 days credit for payment of price of goods after receipt of goods.

8. The manufacturers shall not effect direct sales of goods within the area mentioned in CI. (1). Allinquiries, orders and correspondence which the manufacturers receive in relation to that area shall be

forwarded to the sole agent to be dealt with.

9.

The sole agent may appoint sub-agents and representatives for the area covered by the sole agency. Themanufacturers shall not enter into any correspondence or dealings, direct or indirect, with them.



10. The manufacturers agree to execute the orders placed by the sole agent so far as the goods available withthem permit. Neither do the manufacturers guarantee minimum supply of goods to the sole agent nor isthe latter bound to place order for any minimum quantity of goods.

11. In case, the terms of this appointment are varied by the Central Government in exercise of its powerunder section 294 (5), Companies Act, 1956, this appointment shall, as from the date as may bespecified by the Central Government in its order of variation of terms, be regulated by the terms andconditions as varied by the Central Government.

In Witness Whereof the parties hereto have signed this agreement on the day and year first written above.

…………………… ………………..

Why 100% EOU : We want to create a 100% EOU as there are quite a lot of Incentives for EOU’s provided by thegovernment. Some of them are given below.

Some incentives given to EOUs

No import licences are required by the EOU units and import of all industrial inputs exemptfrom customs duty.

Supplies from the DTA to EOUs are regarded as deemed exports and are hence exempt frompayment of excise duty which means that high quality inputs are available at lower costs.

On fulfillment of certain conditions, EOUs are exempted from payment of corporate income tax

for a block of 5 years in the first 8 years of operation. Export earnings continue to be exemptfrom tax even after the tax holiday is over. Industrial plots and standard design factories are available to EOUs at concessional rates. Single window clearance for EOU. For example, the State Government of Kerala as well of

Karnataka has constituted single window clearance mechanisms such as District Single WindowClearance Board (in Kerala) and Karnataka Udyog Mitra (in Karnataka) for the purpose of speedyissue of various licences, clearances.

Private bonded warehouses in the 7 EPZs can be set up foro Import and sale of goods including in the DTA, subject to payment of applicable duties

at the time of sale.o Trading including re-export after repacking/labeling.o Re-export after repair, reconditioning or re-engineering

EOUs and EPZs are permitted to sub-contract part of their production processes for job work tounits in the DTA on a case by case basis.



Supplies to the DTA under international competitive bidding against payment in foreignexchange to other EOUs and EPZ units and against import licenses are considered towardsfulfilment at the export obligation.

The FOB value of exports of EOUs and EPZ units can be clubbed with that of parentcompanies located in the DTA for the purpose of obtaining a Trading or Export House status.

EOUs and EPZ units may export goods through Trading and Export Houses or other EOU andEPZ Units.

Attractive Policy Provisions for EOUs :

EOU can also import second hand capital goods without any age limit. 50% of physical exports can be sold in domestic market on payment of concessional duty. EOUs can process and export rice (Basmati & Non-Basmati). EOUs including Gem & Jewellery units are permitted to sub-contract upto 50% of their

production (or) production process in DTA / other EOUs. EOUs are allowed to utilize plant and machinery for job work DTA units provided the goods are

exported directly from the EOU premises. EOUs in Agriculture and allied sectors and in granite sector may transfer the capital goods and

the inputs to the Farms/field/quarries for usage relating to the production in the EOU. In case of new EOUs, Advance DTA sale will be allowed not exceeding 50% of its estimated

exports for the first year except the pharmaceutical units where this will be based on its estimatedexports for the first two years.

Simultaneous Advance DTA sale permission is given on quarterly basis for perishable goods likemushrooms, cut flowers etc.

Exports through third party is permitted Exports from the job workers premises is allowed 100% FDI investment permitted through Automatic Route similar to SEZ units EOUs can obtain Foreign currency loans from OBUs situated in the SEZs EOUs have to achieve only positive Net Foreign Exchange (NFE) within 5 years i.e., A - B > 0

where (A) is the FOB value of Exports and (B) is CIF value of imports

Fiscal Incentives available to 100% EOUs :

Exemption from Customs and Central Exciuse duties on import/local procurement of Capitalgoods, raw materials, consumables, spares, packing material etc.

Reiumbursement of Central Sales Tax (CST) on purchases made from Domestic Tariff Area(DTA)

CENVAT credit on Service Tax paid Re-iumbursement of duty paid on fuels procured from domestic oil companies as per the rate of

Drawback notified by the DGFT from time to time.

Special Package of Incentives for Star Export House EOUs (Fast Track Clearance):

Permissions and Customs clearances for both Imports and Exports on self declaration basis. Fixation of Input-Output norms on priority within 60 days. Exemption from compulsory negotiation of documents through Banks. 100% retention of foreign exchange in EEFC account. Enhancement of normal repatriation period from 180 days to 360 days. Exemption from furnishing of Bank Guarantee in Schemes under this policy. Exemption from examination of Import Cargo Install one Fax machine & Two computers in their Administrative/Registered Office on prior

intiation only. Procurement of DG set intimation to the Development Commissioner/Jurisdictional

Customs/Central Excise authority Remove their Capital goods (or) part thereof for repairs under prior intimation to the

jurisdictional Asst./Deputy Commissioner of Customs & Central Excise authority DTA clearance of rejects on priority basis Personal carriage of samples of Gems & Jewellery without a need for prior permission



DTA sale of finished products on prior intimation only Participation in exhibition for export promotion on prior intimation only.

Certifications :

We will be going for an ISO 9001 : 2008 certification.

Dispute Resolution :

Subject To Devgarh Jurisdiction, Rajasthan. All the issues or disputes related to our sales shall

have to be resolved in the courts of Devgarh or Rajasthan, India exclusively. No cases or

disputes will be accepted outside the country boundary.

The dispute settlement shall be carried out via. Arbitration.



VII. Manufacturing & Operations

Location of production facilities for Exports:

Rajasthan is richly endowed with large reserves of different varieties of granite spread over in 23

districts of the state. More than 200 localities of granite have been identified so far. The

important district wise locations are given above.

We have chosen DEVGARH as our base.

CAPACITY OF EXISTING FACILITIES:

Together they have a total capacity of around 1,00,000 sq. ft. which is way too much for our

business.

They can easily fulfill all our production needs

FUTURE EXPANSIONS:

We have plans for expansion, and keeping this in mind, we have these two facilities, which can

fulfill our rising demand.

PRODUCT MODIFICATION NECESSARY TO ADAPT TO LOCAL

ENVIRONMENT:



Our products are tailor made to our customer’s need. There are no modifications that are needed

to adapt to local environment.



VIII. Personnel Strategy

PERSONNEL NEEDED TO MANAGE EXPORTS :-

Firstly in terms of Export, the person handling the Govt. affairs should be well

aware of the updates regarding the export of Granite to a particular country &

from India he should ne always good with marking of the Blocks as well

Experience & Expertise of existing Personnel

The personnel in the manufacturing unit should be good with Gantary &

Gangshaw cutting. He should be able to manage his team of Polishing machineries,the making before packing should be done properly.

Training needs of Exiting Personnel

WITH ADVANCEMENT IN THE MACHINERIES THE TRANING (TIME TO TIME)

SHOULD BE GIVEN TO THE EXISTING EMPLOYEES ALSO SUCH THAT THEY

WONT MISUSE OR UNDER USE THE MACHINE AND GIVE THE DESIRED REULTSON TIME BECAUSE IN TODAYS WORLD, TIME IS MONEY PLUS NEW ADVANCED

MACHINE COST A LOT SO TO FULFIL THERE FULL UTILIZATION THEY NEED

TO BE TRAINED PROPERLY.



Hiring needs in the Short term & Long term

IN TERM OF HIRING REQUIRED, WELL FIRST OF ALL IT DEPENDS ON THE

GROWTH OF THE UNIT AS IN IF WE HAVE ORDERS IN OUR HAND WITH GOOD

FUTURE MARKET THAN EVENTUALLY THE NO. OF MACHINERIES ARE

SUPPOSE TO INCREASE AND FOR THAT NEW EMPLOYEES ARE TO BE HIRED.

NEW MARKETING REPRESENTATIVES ARE NEEDED TO BE KEPT PLUS MORE

ADMIN PEOPLE ARE REQUIRED TO MANAGE STOCKINGS, ACCOUNTS,

TRANSPORTS AND OTHER IMPORTANT THINGS.



IX. Financial Decisions

Pro forma financial statements and projected cash flows assuming export activity

Inflow: Year - 1 Year - 2 Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8

Opening Cash & Bank - 55.00 41.09 116.06 179.94 268.60 381.95 497.62

Promoters' Capital 239.00

Current Year Profi t before Interes t & Tax - 130.38 179.17 217.38 253.28 287.19 294.46 300.25

Non Cash Expenditure Charged to P/L - 130.68 105.07 89.91 76.96 65.90 56.46 48.38

Secured Loan:

Term Loan from Bank 679.50

Working Capital Loan 37.50 - 6.39 6.41 6.41 6.42 0.14 0.15

Total 956.00 316.06 331.72 429.76 516.59 628.11 733.01 846.40

Outflow:

Fixed Assets 851.00 Additions to Working Capital 50.00 54.00 8.53 8.54 8.55 8.56 0.19 0.20

Interest on Loans

- Term Loan - 94.20 79.80 65.40 51.00 36.60 22.20 7.80

- WC Loan - 6.73 7.29 7.84 8.40 8.96 8.97 8.98

Repayment of Term Loan - 120.04 120.04 120.04 120.04 120.04 120.04 120.04

Dividend / Drawings - - - 48.00 60.00 72.00 84.00 96.00

Income Tax (Nil) - - - - - - - -

Closing Cash & Bank 55.00 41.09 116.06 179.94 268.60 381.95 497.62 613.38

Total 956.00 316.06 331.72 429.76 516.59 628.11 733.01 846.40

Note: The Closing Cash and Bank Balance may vary depending upon the investment/expansion decisions ma de by the Firm

Cash Flow Statement:



Particulars Year - 1 Year - 2 Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8

Capacity Utilisation 60% 60% 65% 70% 75% 80% 80% 80%

Opening Stock of Raw Material - 31.50 31.50 34.13 36.75 39.38 42.00 42.00

Add: Purchase of Raw materials 94.50 378.00 412.13 443.63 475.13 506.63 504.00 504.00

94.50 409.50 443.63 477.75 511.88 546.00 546.00 546.00

Less: Closing stock of Raw Materials 31.50 31.50 34.13 36.75 39.38 42.00 42.00 42.00

Raw Materials Consumed 63.00 378.00 409.50 441.00 472.50 504.00 504.00 504.00

Direct Wages (Labour) - 24.48 25.70 26.99 28.34 29.76 31.24 32.81

Prime cost (1) 63.00 402.48 435.20 467.99 500.84 533.76 535.24 536.81

Add :- Factory Over Heads:

Factory Fuel & Power 3.90 23.40 25.35 27.30 29.25 31.20 31.20 31.20

Indirect Material 6.00 36.00 39.00 42.00 45.00 48.00 48.00 48.00

Indirect Wages 2.04 12.24 12.85 13.49 14.17 14.88 15.62 16.40

Factory Insurance & Maintenance (1% of Assets) 0.15 0.87 0.74 0.64 0.55 0.47 0.40 0.35

Depreciation on Assets - 130.68 105.07 89.91 76.96 65.90 56.46 48.38

Packing & Packaging 1.62 9.72 10.53 11.34 12.15 12.96 12.96 12.96Works cost (2) 76.71 615.39 628.75 652.67 678.92 707.16 699.89 694.10

Add:- Administration Over Heads:-

General Charges and Administration 6.91 41.43 44.88 48.34 51.79 55.24 55.24 55.24

(Assumed at 5% on Sales)

Interest on Term Loan - 94.20 79.80 65.40 51.00 36.60 22.20 7.80

Interest on Working Capital 1.68 6.73 7.29 7.84 8.40 8.96 8.97 8.98

Cost of Production (3) 85.29 757.75 760.72 774.25 790.11 807.96 786.30 766.12

Cost of Goods Sold (4) 85.29 757.75 760.72 774.25 790.11 807.96 786.30 766.12

Add:- Sell ing and Distribution OH:- 6.91 41.43 44.88 48.34 51.79 55.24 55.24 55.24

(Assumed at 5% on Sales)

Cost of Sales (5) 92.20 799.18 805.60 822.59 841.90 863.20 841.54 821.36

Profit - 29.45 92.08 144.14 193.88 241.63 263.29 283.47Sales 92.20 828.63 897.68 966.73 1,035.78 1,104.83 1,104.83 1,104.83

Debt Service Coverage Ratio

Profit - 29.45 92.08 144.14 193.88 241.63 263.29 283.47

Add: Non Cash Expenditure - Depreciation - 130.68 105.07 89.91 76.96 65.90 56.46 48.38

Disposable Cash - 160.13 197.15 234.05 270.84 307.53 319.75 331.85

Debt Service

- Principal - 120.04 120.04 120.04 120.04 120.04 120.04 120.04

- Interest 1.68 100.93 87.09 73.24 59.40 45.56 31.17 16.78

Total 1.68 220.97 207.13 193.28 179.44 165.60 151.21 136.82

DSCR 1.18 1.37 1.59 1.84 2.13 2.32 2.55

Assumed to Break even during the fi rst two months which includes trial run and initial stages of commercial production.

Projected Profitability Statement (Cost Sheet Based)` in Lakhs



Key Assumptions

OF GRANITE SLABS AND TILES

Months Working Feed Per day Total Feed Cost Per CMT Total Cost

Days CMT Slabs tiles Slabs tiles (Present) Slabs tiles Slabs tiles

` ` in lakhs ` `

Granite Blocks 12 300 300 90000 45.00% 45.00% 40500 40500 700 630.00 1550 1860 627.75 753.3

12 300 300 90000 40500 40500 630.00 627.75 753.3

Capacity Utilisation 100% 60% 65% 70% 75% 80%

Cost of Raw Materials 630.00 378 409.5 441 472.5 504

Sales Revenue 1381.05 828.63 897.68 966.73 1035.78 1104.83

Cost of Segments

Total Hours 6000 3600 3900 4200 4500 4800

Requirement per CMT 1 1 1 1 1 1

Annual Requirement 90000 3600 3900 4200 4500 4800

Cost per CMT 50 50 50 50 50 50 (No inflation Considered )

Annual Fuel Cost 4500000 180000 195000 210000 225000 240000

Cost of Power

Requirement per hour (KW) 100 100 100 100 100 100


Cost Per KW 6 6 6 6 6 6

Annual Power Cost 3600000 2160000 2340000 2520000 2700000 2880000

Cost of POLISHING

Requirement Per Batch 60 60 60 60 60 60

Average Hours per Batch 3 3 3 3 3 3

No of Batches pa 2000 1200 1300 1400 1500 1600


Cost per Kg 50 50 50 50 50 50

Annual pOLISHING Cost 6000000 3600000 3900000 4200000 4500000 4800000

Cost of Packing Materials

Cost 20 20 20 20 20 20

Yeild Pa (Kg) 81000 48600 52650 56700 60750 64800

Annual PM Cost 1620000 972000 1053000 1134000 1215000 1296000

` in lakhs

Process, Yield, Cost & Revenue Estimates at 100% Capacity Utilisation

Yield Yield Sq mtr SP Per SQ MT Gross Sales

Current Sources of Funding :

Source of Funds:

` in Lakhs

Promoters' Contribution 239.00

Financial Assistance 717.00

- Term Loan 679.50

- Working Capital Limit 37.50

Total 956.00

Financial Needs & future sources of fund :

Tax consequences of export activity

As we are a 100% EOU, we will be getting Tax benefits/incentives from the govt. mentioned earlier.

Potential risk and sources of protection :

Commercial Risks



Insolvency of the buyer. Buyer's failure to accept the goods, subject to certain conditions.

Political Risks

Imposition of restriction by the Government of the Dubai or any Government action,

which may block or delay the transfer of payment made by the buyer. New import restrictions or cancellation of a valid import license in the Bangladesh.

Interruption or diversion of voyage outside India resulting in payment of additional

freight or insurance charges which cannot be recovered from the buyer.

Any other cause of loss occurring outside India not normally insured by general insurers,

and beyond the control of both the exporter and the buyer.

c. Sources of Protection:

ECGC can be a very good source of protection; it offers various covers as follows.

Provides a range of credit risk insurance covers to exporters against loss in export of

goods and services

Offers guarantees to banks and financial institutions to enable exporters to obtain better

facilities from them

Provides Overseas Investment Insurance to Indian companies investing in joint ventures

abroad in the form of equity or loan

d. Exchange rate fluctuation

We are assuming an exchange rate of 62 INR for USD. But if the rate drops and it falls to INR

55, then we will have major problem so we will be going for forwards contracts to cover the risk.



IMPLEMENTATION SCHEME :-

Cash Budget` in Lakhs

1 2 3 4 5 6 7 8 9 10 11

Machinery Procurement 266.00 399.00 665.00

Installation 12.50 12.50 25.00

Building, Furniture, Etc. 10.00 10.00 34.00 34.00 35.00 123.00

Licenses & Contingencies 43.00

Staffing -

Land 50.00 50.00

Trial Run50.00

50.00

Commercial Production

Total 330.30 14.30 38.30 38.30 39.30 4.30 403.30 16.80 21.10 50.00 956.00

Bank Assistance 280.76 12.16 32.56 32.56 33.41 3.66 342.81 14.28 17.94 37.50 807.60

Promoters' Contribution 49.55 2.15 5.75 5.75 5.90 0.65 60.50 2.52 3.17 12.50 148.40

956.00

MonthParticulars Cost

8.60 4.30 4.30 4.30 4.30 4.30 4.30 4.30 4.30

THEREFORE ACCORDING OUR CALCULATIONS OUR PLANT WILL BECOMMISSIOINED IN ALMOST 11 MONTHS.

Ib on Granites

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