Technical Appraisal Deepraj
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Transcript of Technical Appraisal Deepraj
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TECHNICAL APPRAISAL BY FINANCIAL INSTITUTION
Name of the Institution (HO) MEETING
TO BE HELD ON:18/11/10
MEMORANDUM NO: 45
IDBI
TO CONSIDER THE SANCTION OF TERM LOAN OF RS.73665.24
LACS TO SHRI MANOJ GAUR OF JP ASSOCITS LTD. REWA FOR SETTING-
UP A UNIT FOR MANUFACTURING OF CEMENT AT PLOT NO 254,BLOCK
NO.1_VILL-Bela (M.P.)
CIBIL STATUS : Name of the Concern/Promoters is notappearing on CIBIL defaulters list (Public Domain)
Factory Location : PLOT NO 254,BLOCK NO.1_VILL-Bela ,Rewa (M.P.)
Administrative Office: Platinum Plaza 8th flore JP Puram, sector 24 Noida
Residential Address : Yamuna Vihar JRP Rewa (M.P.)
Constitution : Public Company
(Rs. in lacs)Application
Received on
Date
Information
Completed
by
Promoters
on
BO/ZO
Appraisal
Completed
on
HO
Appraisal
Completed
on
Loan
Applied
Loan
Appraised
For
HO
Consideratio
n
21.9.10 12.10.10 19.10.10 73665.24
TL
73665.24 TL 73665.24
TL
Products Unit Capacity
being
installed
32 lakh Ton
Prodn.
(at 70%)
in 1st year
Utilization based on
One shift working 300
days in a year 70%
utilization in the 1st year,
78% in 2nd year & 80%
from 3rd year onwards
Selling
price
Cement Tons 32 lakh ton 2240000 2nd year
24000003rd year onwards 2560000
Rs.5200/
ton
THIS PROJECT IS:-
SSI unit
The promoter is third time loan to the Bank.
The promoter is having experience in this line.
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PROJECT COST
(Rs.in lacs)
Particulars Applied bythe party
Appraisedby
Bank
For HOconsideration
SecurityCover
Utilizationof Term
loan
Land 5000.00 5000.00 5000.00 5000.00
Building 19391.8 19391.8 19391.8 19391.8 14733.48
Plant & Machineryincl. Electric
instillation
82537.7 82537.7 82537.7 82537.7 58931.76
Misc. Fixed Assets 50 50.00 50.00 50.00
Margin Money for
Working Capital
2,339.32 2,339.32 2,339.32 2,339.32
Preoperative &
Preliminaryexpenses
45.00 45.00 45.00 45.00
Total 109,363.82 109,363.82 109,363.82 109,363.82 73665.24
FINANCIAL PARAMETERS
Promoters
Contribution
33.65% Appraised by Means of Finance
Debt-Equity ratio 2.00 Technical Financial (Rs. In lacs)
D.S.C.R. 2.26 Capital 35698.58
Security Margin(Project)
(Overall)
97250.00
VirendraSingh
Bajaj, ,
Mgr.(Tech.)
Mr.RamBahadur
Singh, CFO
Term Loan73665.24
Return on own capital 24%
R.O. Capital employed 8% Mr.Ravi
Shukla , DM
Repayment 8 years Mr.YS Pant,
Dy.G.M.Moratorium period 1.5 yrs..
Installments 13 half yrly
Interest Rate 12%
Rebate on timely
payment
1%
Penal Interest Rate on
default
2%
Employment (persons) 1000 Total 109363.82
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CONSULTANTS : Lal Bahadur & Sons co.
BANKERS FOR W.C. : CANARA___Bank, Noida
MAIN Machinery SUPPLIER(s) : 1. HEW Jaypee Himanchal Pradesh2. M/s. Jhon And Brothers Canada.
INTRODUCTORYJP Associats, Indore is a proprietary concern of Shri Manoj Gaur The promoter proposes
to set-up a unit for manufacturing Cement plant at Bela with an installed capacity of 3.2
MTPA. The proposed unit will be in SSI Sector. The promoter has acquired landadmeasuring 50 hectare. situated at Plot No. 254 Bela from Villegers. The promoter
proposes to construct a building admeasuring .10 hectare. and the estimated cost of
constructing the factory building and auxiliary building is Rs. 15000.00 and Rs. 500.00
lacs respectively.
1. PROPOSAL IN BRIEF
The promoter of the concern proposes to establish a unit in the name of Jaypee Associats,Limited for manufacturing cement. The main plant supplier is HEW Jaypee
HimanchalPradesh, Jhon And Brothers Canada.. The cost of project of the proposedproject is Rs. 109363.82 lacs and Shri X has approached the Bank for financial assistance
of Rs. 73665.24 lacs Term Loan for implementation of the project.
2. PROMOTERS AND MANAGEMENT
The promoter of the concern is Shri Mamoj Gaur S/o Jai Praaksh Gaur Brief details
about the promoters & management is as under:-
Shri Manoj Gaur S/o.Shri Jai Prakash Gaur Aged 55 years has great experience on
this field. He commenced more than 4 projects in various states of India. He is a qualified
person having degree of engineering and management.
2(b) Details about associate concerns
Not applicable.
2(c) The other details about the promoters be given in the following format.
(Rs. In lakh)Name of the
Promoter/
Guarantor
Age
[yr]
Fathers/
Husbands
Name
Qualifica
tion
Address Responsi-
bility
Financial
Worth
[F.A.]
I.T.
Payer
Shri Manoj
Gaur
55 Shri Jai
PrakashGaur
BE Noida Overall 190000 Yes
3. GUARANTORS
The Promoter shall provide personal guarantee for repayment of loan :i) Shri Manoj Gaur S/o Shri Jai prakash Gaur
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4. PAST PERFORMANCE AND FINANCIAL POSITION:
Have a great market share in cement industry, continuously profit margin
increases. Financially company is very strong.
5. DETAILS ABOUT THE PROJECT
Land Rs. 5000.00 lac:
The promoter has acquired land admeasuring 50 Hc. situated at Plot No 254 Bela
purchased from land lords who are villagers.
Building Rs. 15500.00 lac.
The promoter proposes to construct a building admeasuring 10 hc. and the estimated cost
of constructing the factory building and auxiliary building is Rs. 15000.00 and Rs. 500.00lacs respectively.
Plant and machineryRs. 75000.00 lac.
The Concern has proposed to purchase following machines costing Rs. 75000.00 lac .(Rs.in lac)
Sr.No. Particulars Make/Name of the
Supplier
Amount
01. Sewing Machine M/s Guru Teg Co.,Ludhiana.
9.29
02. Cutting Machine M/s Pareek Pvt.Ltd.,Indore.
10.25
03. Spare parts M/s Chhota Bhai & Co.Khandwa.
1.00
04. Labor Charges for fabrication. 0.50
Total 21.0405. Packing, Loading, Transport,
Insurance etc.1.00
06. Erecting & Installation 0.50
07. Electrification 1.50
TOTAL 58931.76
Misc. Fixed Assets: Rs. 5.00 lacs.
Misc. fixed assets is estimated at Rs. 5.00 lacs which includes fire fighting equipment,
safety equipment, office furniture and fixtures, etc.
06. PRODUCT & MARKET DETAILS:
The unit is proposed to be established at Indore for manufacturing of readymadegarments. Indore is a growing area of Madhya Pradesh where numbers of retail garment
units exist. There is a good market base in all over India. Looking to the present and
future market demand of the readymade garments, the concern is not anticipating anyproblem regarding market.
Madhya Pradesh has a prominent place as a leading textile centre of the Country. Thestate has a thriving textile cluster in the south west region (Malwa). Since the Malwa belt
has a large cotton growing area, large number of textile mills are clustered around Indore,
Ujjain, Burhanpur, etc.MANUFACTURING PROCESS:
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Pattern
First, a pattern maker draws a pattern based upon measurements (of
samples) that were supplied by the supplier or the buyer'smerchandiser
Cutting
The material is ready to be cut, and it is laid out in layers on a cutting
table.
The cutting machine makes the separate piece and then marked with
it's size, using a piece of chalk so it won't show after washing.
The Stitching
After cutting on the cutting table the garments are then send for
stitching.
Inspection
The garment is inspected for faults and loose threads are cut.
The Packing
After that it goes on to the garment packing room where final quality
inspection takes place and paper tags and labels are placed or
attached.
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Other Factory Snaps
MARKET DETAILS:
The Indian Garmentl industry undergoes major revolutions. It is gradually becoming thenext boom industry. In India, there will be the fastest growth in Garment manufacturing.The consumer buying patterns and behavior are changing steadily. The growth of India'sGarment sector is not only limited to urban areas but also growing in rural areas. In thenext five years, it is expected that, India's Garmentl industry will expand more than 80%.
EFFLUENTS:
The process of manufacturing of garments shall not discharge any harmful effluent. Itshall also not have any air/water pollution and no hazardous solids shall be produced.
However, a suitable condition is being stipulated to obtain NOC from competent
authority i.e. Pollution Control Board.
7. COST OF PRODUCTION :
- Average Cost of Production is Rs. 175/- per garment.
08. SELLING PRICE :
- Average selling price is Rs. 210/- per piece.
09. MARKETING ARRANGEMENTSThe readymade garments shall be sold through dealer net work.
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10. ARRANGEMENT OF UTILITIES
RAW MATERIAL:
RAW MATERIAL:
The main raw material required for the unit is Cloth, which is easily and locally available.The unit is being set-up at Indore & there is 15-20 cotton ginning factory are working in
and around Indore & they are producing cloth as finished product, so, no difficulty is
envisaged in procurement of Raw Material. The requirement of raw material at 100%capacity utilization has been estimated.
POWER:
Required Power connection shall be available from State Electricity Board from ST lineconnection. Since the unit is being set-up in Industrial Estate, getting power connection
shall not be a problem for the concern.
WATER:Water will be required for drinking and sanitation, which is already available in the
existing premises through, tube well.
MANPOWER:
The manpower requirement of the unit is 8 workers ( Skilled & Unskilled workers) & 4
administrative. Skilled and unskilled workers are locally available.
11. PROFITABILITY ESTIMATES:
The concern has estimated following turnover and profit for first five years of itsworking after providing interest depreciation and taxes:-
(Rs in lacs)
Particulars I II III IV V VI VII VIII
Capacity Utilization 60% 70% 80% 80% 80% 80% 80% 80%
Turnover 143.64 175.14 200.34 201.60 201.60 201.60 201.60 201.60
Profit before
Depreciation,
Interest and Tax 23.13 22.51 25.70 24.94 24.94 25.54 25.54 25.54
Interest 6.39 6.69 6.41 5.68 4.94 4.20 3.47 2.73
Depreciation 5.00 4.37 3.82 3.35 2.94 2.59 2.28 2.02
Profit before tax 11.75 11.45 15.47 15.91 17.05 18.74 19.79 20.79
Profit after tax 9.68 9.47 12.29 12.60 13.40 14.58 15.31 16.01Cash accruals 14.68 13.84 16.11 15.94 16.34 17.17 17.59 18.03
Detailed profitability estimates together with Fund flow statements are appendedherewith in CMA Data Form
12. REPAYMENT:
The loan is proposed to be repaid in 8 years in 13 half yearly installments with one and
half years off period. The details are as under:
[Rs. in lacs]
Particulars Amount
I No repayment in the first year 0.00
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II First half yearly installment 0.00
Second half yearly installment 3.08
III First half yearly installment 3.08
Second half yearly installment 3.08
IV First half yearly installment 3.08
Second half yearly installment 3.08
V First half yearly installment 3.08
Second half yearly installment 3.08
VI First half yearly installment 3.08
Second half yearly installment. 3.08
VII First half yearly installment 3.08
Second half yearly installment 3.08
VII First half yearly installment 3.08
Second half yearly installment 3.08
Total 40.00
13. DEBT EQUITY RATIO:-
(Rs.in lacs)
Particulars Amount ( I Year)
Term Loan 40.00
Total 40.00
Net worth 20.00
Total 20.00
DEBT-EQUITY RATIO 2:1
14. SECURITY SCENARIO:
The security scenario vis--vis debt exposure shall be as under:-
[Rs.in lacs]Particulars Amount Loan Amount
Prime Security
- Proposed Assets 51.95
Term Loan 40.00
Additional Security if any 00.00
Total 51.95 Total 40.00
The overall security margin available shall approx. 130%. (The additional security
is in form of freehold land admeasuring 8000 sq.ft. located at KH. No.78/2, 79/3
(Part) P.H. No.87, Industrial Area, Indore belonging to Shri X Proprietor ofM/s.XYZ, Indore)..
15. TECHNICAL FEASIBILITY
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The Manager (T) of the Corporation Shri A has examined the Technical
feasibility of the project and reported that the project is technically viable. His
report is on record.
16. IMPLEMENTATION SCHEDULE & PRESENT STATUS OF THE
PROJECTThe Building has been purchased and all the machinery has been identified. The
project is likely to be implemented within three months.
17. FINANCIAL INSTITUTIONS PRIOR EXPERIENCE
The Corporations experience of financing in this portfolio is satisfactory.
18. BROAD ASSUMPTIONS UNDERLYING PROFITABILITY ESTIMATES
19. RECOMMENDATIONS:
Bank's appraisal team has recommended sanctioning a Term Loan of Rs. 40.00 lacs
(Rupees Fourty Lacs) to Shri X, Prop. of M/s XYZ Industries, Indore, for setting up anew unit for manufacturing of readymade garments at Indore (MP).
MANAGER DY. MANAGER
Sr.No. Parameters Assumptions
01 Installed Capacity 120000 Garments
No. of working days 300
No. of shifts One
% Capacity Utilization Ist Year - 60%2nd Year - 70%
3rd Year onwards 80%
02. Raw Material Cloth Rs. 140 per Mts.
03. Sale Price Rs. 210 per garment
04. Salary & Wages 12 persons 20% benefits per year
05. Power & Fuel ST Connection which shall be proposed to
be availed from MPEB.
06. Depreciation WDV method
07. Interest on Term Loan @12% p.a.
08. Interest on Working Capital @12.50% p.a.
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SECURITY : FIRST LEGAL MORTGAGE/ LEGAL MORTGAGE
a) By way of Equitable mortgage of Land admeasuring 2000 sq.ft. and building, of
the concern. admeasuring 2400 sq.ft. situated at Indore (M.P.)
b) Land (freehold) admeasuring 8000 sq.ft. situated at No. 87, Industrial Area,
Indore, belongs to Shri X, Prop. of the unit as additional security.
c) By way of hypothecation of plant & machinery.
d) The firm shall lodge post dated cheques for repayment of entire principal and for
Five years of interest amount.
MARGIN: - More than 25%
UTILIZATION:
(Rs. in lacs)
Particulars AmountLand 5.00
Building 17.91
Plant & Machinery 24.04
Furniture 5.00
Preoperative and preliminary exp. 3.00
Margin Money for working capital 5.05
Total: 60.00
INTEREST:@ 12% p.a. payable yearly on term loan.A penalty of 2% will be charged in case ofdefault for the period of default and on the amount of default. A rebate of 1% shall be
allowed for timely repayment of principal and interest installments.
GUARANTEE:
Personal guarantee for repayment of loan along with interest shall be offered by:
1) Shri X S/o Shri Y
REPAYMENT:
The loan is proposed to be repaid in 8 years in 28 quarterly installments with one yearsoff period. The details are as under:
Particulars Amount
I No repayment in the first year 0.00
II First half yearly installment 0.00
Second half yearly installment 3.08
III First half yearly installment 3.08
Second half yearly installment 3.08
IV First half yearly installment 3.08Second half yearly installment 3.08
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V First half yearly installment 3.08
Second half yearly installment 3.08
VI First half yearly installment 3.08
Second half yearly installment. 3.08
VII First half yearly installment 3.08
Second half yearly installment 3.08
VII First half yearly installment 3.08
Second half yearly installment 3.08
Total 40.00
CAPITAL:
The firm shall invest capital of Rs. 20.00 lacs towards implementation of the projectbefore release of sanctioned loan.
PRE FIRST DISBURSEMENT CONDITIONS:
a) Copy of Registration papers of building is obtained from competent
authority.
b) Site plan/Map duly approved from competent authority
c) Sanction of power by MPEB.
d) Arrangement of required working capital is made with the Bank
e) Receipt of Air and Water Pollution Clearance from M.P. Pollution ControlBoard.
f) Receipt of C.A. certified Net worth Statement of the promoters.g) Receipt of favorable bank opinion about the concern, its promoters,
guarantors and associate concerns.h) Paper Publication of the mortgage of Prime Securities and Additional
security.
i) Necessary legal documents are executed as per legal advice of theCorporation.
OTHER CONDITIONS:
i) The sanctioned loan will be automatically cancelled, if documentation is not
done within nine months from the date of sanction. An extension of 3 months
can be given on deposit of additional fees @ 0.10% of the sanctioned loan.ii) In case the full amount of loan is not availed within a period of 15 months from
the date of sanction, the balance loan will automatically be cancelled. An
extension of 3 months can be given on deposit of additional fees @ 0.10% of
the balance unavailed loan.iii) The promoter/guarantors shall give undertakings stating that in case of the
Banks loan account goes out of order; the Bank shall have a right to publish the
name of the company and its promoters in the newspaper or through othermedia and may publish their names in the defaulter list of CIBIL.
iv) Fixed Assets shall be insured with assignment in favor of the Banks.
v) No assistance from other financial institution should be availed on assets under
consideration, without prior consent of the Bank.*****