Thursday, 19 January 2012
Friday, 13 January 2012
PROJECT ON HOLLOW BRICKS
PROJECT REPORT
1.0 Introduction:
This proposal evaluates the technical
feasibility and financial viability in setting up of a small-scale enterprise
to do the activity on manufacturing and sale of Hollow bricks in Kottayam district
and all over Kerala. Unit has been filed memorandum Part-1 with the district
Industries center, Kottayam and also applied for permission from Local body for
the construction of building and for the installation of plant and machinery.
2.0 Promoter and Management:
The ownership of the unit is as a propetoership
concern by Smt. Rajalekshmi A.R, Indeevaram, M.L.A Road, Puthiyakavu,
Pin-682301. She has been associated with this business and trade related
activities for the past 5 years. The
experience and the market contact that she received will help her in
establishing the proposed activity of manufacturing and marketing of hollow bricks
in a successful manner.
3.0 Scope and Market Potential:
Hollow block industry
is one of the fastest growing segments of Industry in Kerala. The growth of the
tile industry has shown steep fluctuations. The increase in number of
households and the over the country created a great demand for hollow bricks.
Hollow concrete blocks are substitutes for conventional
bricks and stones in building construction. They are lighter than bricks,
easier to place and also confer economies in foundation cost and consumption of
cement. In comparison to conventional bricks, they offer the advantages
of uniform quality, faster speed of construction, lower labor involvement and
longer durability. In view of these advantages, hollow concrete
blocks are being increasingly used in construction activities.
4.0 Manufacturing process:
The ratio of
cement, sand and stone chips (metal) in the raw material mix determines the
properties of hollow concrete blocks. A ratio of 1:3:6 (cement : sand :
metal) confers higher strength, while a ratio of 1:5:6 can be employed for
normal load bearing construction. The water to cement ratio is usually
0:4:1.
5.0 Location, Land and
Building:
The unit is proposed to be
located at Manjoor Village in Vaikom
Taluk. An extent of 23 cents of land available and is leased by the promoter for establishing the unit.
Building required for establishing the unit has to be constructed. The amount
invested for civil work on construction of building for office, common amenity,
well etc is Rs 200000/-. The survey number assigned to the land is 125/23..
6.0
Machinery & equipment:
Details
are shown in the annexure. The plant and machinery proposed to be installed in
the unit are Indigenous. . Total cost of machinery and equipment to be
purchased is evaluated as Rs 372000/-
7.0 Installed capacity of production
The unit is
proposed to be operated in 300 days per annum ( 25 days in a month of single
shift operation of 8 hours duration in a day). As per the capacity of machinery
to be installed and by considering production wastage the monthly production is
worked out in the following table.
It
is proposed to utilize 70% of the installed capacity in the first year of
operation and 75%, 80%, 85%, 90% in the consecutive years of operation. The sales
realization for first month of operation is shown below.
CAPACITY UTILISATION PER MONTH ( for 70 %
capacity utilisation)
|
|||||
Sl.No.
|
Item
|
Qty
|
Unit
|
Sale Rate
|
Amount
|
1
|
Hollow
bricks
|
52500
|
Nos
|
11.00
|
577500
|
8.0 Raw material Requirement:
All
the raw materials required by the unit are available throughout the year. The
raw material can also be procured from the nearby districts and from other
states. The stock and procurement period proposed in this scheme is for a
period of 10 days. The details of requirement for 100% capacity utilisation in
the unit are tabulated as below. The raw material required by the unit is
proposed to be arranged through local distributors. The requirements of the
unit for the targeted production are as below.
Sl No
|
Raw material
|
Quantity per month
|
Price per load/sack
|
Total amount required per month
|
1
|
Rock powder
|
25 loads
|
7000
|
175000
|
2
|
Cement
|
750 sacks
|
300
|
225000
|
3
|
Chips (metal powder)
|
25
|
10000
|
250000
|
4
|
Total raw material required for 100% capacity utilization
|
650000
|
||
5
|
Raw material required for 70% capacity utilization
|
455000
|
9.0 Man power requirement and other expenses:
Total manpower
of the unit including the Workers is 10 numbers and the details of manpower
requirement, salary and other expenses per month are as follows.
Sl.No.
|
Designation / Category
|
No
|
Monthly salary
|
Amount Rs
|
|||
1
|
workers
|
5
|
7000
|
35000
|
|||
2
|
helpers
|
4
|
5000
|
20000
|
|||
3
|
Office
assistant
|
1
|
3500
|
3500
|
|||
Total
|
10
|
58500
|
|||||
OTHER EXPENSES PER MONTH
|
|||||||
Sl.No.
|
Item
|
Amount
|
|||||
1
|
Power
|
3500
|
|||||
2
|
Postage
& Telephone
|
500
|
|||||
3
|
Printing
& Stationery
|
1000
|
|||||
4
|
Travelling
expenses
|
10000
|
|||||
5
|
Miscellaneous
|
5000
|
|||||
Total
|
20000
|
||||||
10.0 Working capital requirement:
Total requirement of working
capital for the first Month (phase) of operation is 3 lakhs .
Sl.No.
|
particulars
|
Period
in Days
|
1
year
|
2
year
|
3
year
|
4
year
|
5
year
|
Capacity
utilisation(%)
|
300
|
70
|
75
|
80
|
85
|
90
|
|
Sales
|
300
|
6924000
|
7418571
|
7913143
|
8407714
|
8902286
|
|
Cost
of raw materials
|
300
|
5520000
|
5914286
|
6308571
|
6702857
|
7097143
|
|
Cost
of production
|
300
|
6322800
|
6765449
|
7208550
|
7652061
|
8095940
|
|
A
|
Current
Assets
|
||||||
1
|
Stock
of raw materials ( day's
consumption)
|
12
|
220800
|
236571
|
252343
|
268114
|
283886
|
2
|
Stock
in process
( day's cost of production)
|
2
|
42152
|
45103
|
48057
|
51014
|
53973
|
3
|
Stock
of finished goods ( day's cost
of production)
|
2
|
42152
|
45103
|
48057
|
51014
|
53973
|
4
|
Receivables(
day's cost of sales)
|
2
|
46160
|
49457
|
52754
|
56051
|
59349
|
Total(A)
|
351264
|
376235
|
401211
|
426193
|
451180
|
11.0 Total
Cost of the Project:
Sl.No.
|
Particulars
|
Amount RS
|
Existing
|
Proposed
|
Total
|
||
1
|
Building ( advances)
|
0
|
0
|
0
|
0
|
||
0
|
Building and ther civil
construction
|
200000
|
0
|
200000
|
200000
|
70000
|
|
3
|
Machinery &
Equipment(proposed )
|
372000
|
372000
|
372000
|
130200
|
||
4
|
Equipment(sales)
|
0
|
0
|
0
|
0
|
0
|
|
5
|
Electrification and
machinery installation cost
|
50000
|
0
|
50000
|
50000
|
17500
|
|
6
|
Office Furniture
|
6000
|
6000
|
6000
|
2100
|
||
7
|
Brochure, advt and web
site
|
2000
|
2000
|
2000
|
700
|
||
8
|
Prelim &
Pre-operative expenses
|
20000
|
0
|
20000
|
20000
|
7000
|
|
9
|
Working Capital
|
350000
|
0
|
350000
|
350000
|
122500
|
|
Total
|
1000000
|
0
|
1000000
|
1000000
|
350000
|
50000
|
12. Means of finance:
Sl.No.
|
Particulars
|
Amount
RS
|
O
|
Term
loan for building (interior decoration )
|
1000000
|
2
|
Term
loan for machinery&equipment, office furniture etc
|
|
3
|
Loan
for prelim&pre-operative including electrification ,brochure etc
|
|
5
|
MAGIN
FROM kvic
|
350000
|
6
|
MARGIN
OF THE PROMOTER
|
50000
|
13.0 Profitability analysis:
Detailed statement is given in annexure.
Assumptions made for the calculation are as follows:
(a) Unit will function for 200 days per annum in single
shift basis of 5 hours per day.
(b) Proposed to utilise 70% of the installed capacity in
the first year of operation ,75%, 80% ,85% and 90% are in the consecutive years
of operation.
(c) Interest on term loan and working capital loan is
assumed @ 12 % and repairing and maintenance as 5% of cost of fixed assets.
(d) Depreciation @ 5% of cost of building and 10% of the
cost of machinery.
(e) Selling expense is considered as 5 % of total sales
turn over. This includes the advertisement and publicity charges
(f) Insurance expenses of building and machinery is
calculated @ 1% of cost
(g) The cost of raw material and finished product is based
on the present market rate.
Depreciation: Depreciation on Building,
Machinery and Equipment are evaluated on WDV basis and is tabulated as below
sl No
|
Particulars
|
I year
|
2 year
|
43year
|
4 year
|
5 year
|
1
|
Building
|
300000
|
270750
|
257213
|
244352
|
232134
|
Depreciation
(A)
|
15000
|
13538
|
12861
|
12218
|
11607
|
|
WDV on Building
|
285000
|
257213
|
244352
|
232134
|
220528
|
|
2
|
Machinery and equipment
|
437500
|
354375
|
318938
|
287044
|
258339
|
Depreciation(B)
|
43750
|
35438
|
31894
|
28704
|
25834
|
|
WDV on Machinery and equipment
|
393750
|
318938
|
287044
|
258339
|
232505
|
|
Total depreciation(A+B)
|
58750
|
48975
|
44754
|
40922
|
37441
|
|
58750
|
48975
|
44754
|
40922
|
37441
|
SHEDULE OF IMPLIMENTATION
Acquisition of land
|
Agreement on lease
|
Construction of Building
|
Completed after availing the loan
|
Installation of plant and Machinery
|
Expected to be completed by
September 2010
|
Trial run
|
Expected to be completed by September 2010
|
Commercial Production
|
October 2010
|
14.0 Conclusion:
The net profits after taxation in the first year of operation is
estimated as RS 600917
/. The break-even point is 35 %
of installed capacity. The return on investment is obtained as 42 % in the 2nd
year of operation. The cost of production and profitability statement for the
first 5 years, break-even analysis, repayment schedule for term loan, cash flow
statement and the projected balance sheet are given in Annexure. Based on the
analysis made above it is found that the scheme is technically feasible and
economically viable.
Submitted by:
ASHA XAVIER
KARUKULATHEL
MANJOOR P.O
KURUPPANTHURA
KOTTAYAM
ANNEXURE
1
(as
per quotation)
|
|||||
PLANT &
MACHINERY
|
|||||
Sl.No.
|
Item
|
Nos
|
Rate Rs
|
Amount Rs
|
|
1
|
Egg laying type Concrete
block machine with die
|
01
|
130000
|
130000
|
|
2
|
Trolley for brick and mix handling
|
04
|
7500
|
30000
|
|
3
|
Solid die set 4”,6”
|
02
|
14000
|
28000
|
|
4
|
Hollow die set 4”,6”
|
02
|
18000
|
36000
|
|
5
|
Concrete mixer
|
01
|
130000
|
130000
|
|
6
|
Vat total @4%+ cess 1%
|
01
|
17700
|
17700
|
|
Total
|
372000
|
||||
ANNEXURE 2
Profitability statement for 5 years of operation
Particulars
|
1
YEAR
|
2
YEAR
|
3
YEAR
|
4
YEAR
|
5
YEAR
|
|
No.
of working days
|
300
|
300
|
300
|
300
|
300
|
|
No.
of shifts
|
1
|
1
|
1
|
1
|
1
|
|
Installed
capacity
|
9900000
|
9900000
|
9900000
|
9900000
|
9900000
|
|
Capacity
utilization
|
70
|
80
|
85
|
90
|
90
|
|
Production
|
6930000
|
7920000
|
8415000
|
8910000
|
8910000
|
|
A
|
Sales
|
6930000
|
7920000
|
8415000
|
8910000
|
8910000
|
B
|
Cost
of Production
|
|||||
Raw
materials
|
5460000
|
6240000
|
6630000
|
7020000
|
7020000
|
|
Wages
|
264000
|
301714
|
320571
|
339429
|
339429
|
|
Power, and Fuel charges
|
120000
|
137143
|
145714
|
154286
|
154286
|
|
Repair
& maintenance
|
5000
|
5000
|
5000
|
5000
|
5313
|
|
Insurance
|
5000
|
5000
|
5000
|
5000
|
1063
|
|
Depreciation
|
58750
|
48975
|
44754
|
40922
|
37441
|
|
Total
|
5912750
|
6737832
|
7151040
|
7564636
|
7557530
|
|
C
|
Gross
operating profit
|
1017250
|
1182168
|
1263960
|
1345364
|
1352470
|
D
|
Admn.
& Selling expenses
|
|||||
1.
Administrative expenses
|
204000
|
233143
|
247714
|
262286
|
262286
|
|
2.
Selling expenses
|
69300
|
79200
|
84150
|
89100
|
89100
|
|
E
|
Financial
expenses
|
|||||
1.
Interest on term loan
|
82834
|
47014
|
29104
|
11194
|
4478
|
|
2.
Interest on WC loan
|
36000
|
36000
|
36000
|
36000
|
36000
|
|
3.
Interest on MM loan
|
9038
|
9038
|
9038
|
9038
|
6778
|
|
F
|
Total
of D&E
|
401171
|
404394
|
406006
|
407617
|
398641
|
G
|
Net
operating profit
|
616079
|
777774
|
857954
|
937747
|
953829
|
H
|
Income
tax
|
73911
|
93315
|
102937
|
112512
|
114441
|
I
|
Net
profit
|
542167
|
684459
|
755018
|
825235
|
839387
|
J
|
Withdrawls
|
|||||
K
|
Depreciation
|
58750
|
48975
|
44754
|
40922
|
37441
|
L
|
Cash
surplus
|
600917
|
733434
|
799772
|
866157
|
876828
|
ANNEXURE-3
BREAK EVEN ANALYSIS
Particulars
|
1
YEAR
|
2
YEAR
|
3
YEAR
|
4
YEAR
|
5
YEAR
|
|
FIXED COST
|
||||||
Salaries
|
264000
|
301714
|
320571
|
339429
|
339429
|
|
Repair
& Maintenance
|
5000
|
5000
|
5000
|
5000
|
5313
|
|
Insurance
|
5000
|
5000
|
5000
|
5000
|
1063
|
|
Administrative
expenses
|
204000
|
233143
|
247714
|
262286
|
262286
|
|
Depreciation
|
58750
|
48975
|
44754
|
40922
|
37441
|
|
Interest
on MM loan
|
9038
|
9038
|
9038
|
9038
|
6778
|
|
Interest
on Term loan
|
82834
|
47014
|
29104
|
11194
|
4478
|
|
Total
|
628621
|
649883
|
661181
|
672868
|
656786
|
|
VARIABLE COST
|
||||||
Raw
Materials
|
5460000
|
6240000
|
6630000
|
7020000
|
7020000
|
|
Power
Charges
|
120000
|
137143
|
145714
|
154286
|
154286
|
|
Selling
expenses
|
69300
|
79200
|
84150
|
89100
|
89100
|
|
Interest
on WC loan
|
36000
|
36000
|
36000
|
36000
|
36000
|
|
Total
|
5685300
|
6492343
|
6895864
|
7299386
|
7299386
|
|
BEP
in % of installed capacity
|
35.35
|
36.42
|
36.99
|
37.60
|
36.70
|
|
BEP
in % of capacity utilization
|
50.50
|
45.52
|
43.52
|
41.78
|
40.78
|
|
Return
on Investment
|
42.11
|
53.16
|
58.64
|
64.10
|
65.20
|
ANNEXURE-4
DEBT SERVICE COVERAGE RATIO (DSCR)
Particulars
|
1
Year
|
2
Year
|
3
Year
|
4
Year
|
5
Year
|
|
A
|
Cash
generated
|
|||||
1
|
Net
Profit
|
616079
|
777774
|
857954
|
937747
|
953829
|
2
|
Depreciation
|
58750
|
48975
|
44754
|
40922
|
37441
|
3
|
Interest
on term loan
|
82834
|
47014
|
29104
|
11194
|
4478
|
4
|
Interest
on mm loan
|
9038
|
9038
|
9038
|
9038
|
6778
|
5
|
Interest
on wc loan
|
36000
|
36000
|
36000
|
36000
|
36000
|
Total
(A)
|
802700
|
918800
|
976850
|
1034900
|
1038525
|
|
B
|
Debt
Service Requirement
|
|||||
1
|
Repayment
of term loan
|
80000
|
80000
|
80000
|
80000
|
80000
|
2
|
Repayment
of interest on term loan
|
82834
|
47014
|
29104
|
11194
|
4478
|
3
|
Repayment
of interest on mm loan
|
9038
|
9038
|
9038
|
9038
|
6778
|
Repayment
of interest on wc loan
|
36000
|
36000
|
36000
|
36000
|
36000
|
|
Total
(B)
|
207871
|
172051
|
154141
|
136231
|
127256
|
|
C
|
Debt
service coverage ratio
|
3.86
|
5.34
|
6.34
|
7.60
|
8.16
|
Average
DSCR
|
7.03
|
ANNEXURE-5
REPAYMENT
OF TERM LOAN
Year
|
Instalment Number
|
Principal
|
Interest
|
Balance
|
repayment
per month
|
1
|
1
|
746250
|
22388
|
708938
|
19900
|
2
|
708938
|
21268
|
671625
|
19527
|
|
3
|
671625
|
20149
|
634313
|
19154
|
|
4
|
634313
|
19029
|
597000
|
18781
|
|
82834
|
54278
|
||||
2
|
5
|
597000
|
17910
|
559688
|
18408
|
6
|
559688
|
16791
|
522375
|
18034
|
|
7
|
522375
|
15671
|
485063
|
17661
|
|
8
|
485063
|
14552
|
447750
|
17288
|
|
64924
|
48308
|
||||
3
|
9
|
447750
|
13433
|
410438
|
16915
|
10
|
410438
|
12313
|
373125
|
16542
|
|
11
|
373125
|
11194
|
335813
|
16169
|
|
12
|
335813
|
10074
|
298500
|
15796
|
|
47014
|
42338
|
||||
4
|
13
|
298500
|
8955
|
261188
|
15423
|
14
|
261188
|
7836
|
223875
|
15049
|
|
15
|
223875
|
6716
|
186563
|
14676
|
|
16
|
186563
|
5597
|
149250
|
14303
|
|
29104
|
36368
|
||||
5
|
17
|
149250
|
4478
|
111938
|
13930
|
18
|
111938
|
3358
|
74625
|
13557
|
|
19
|
74625
|
2239
|
37313
|
13184
|
|
20
|
37313
|
1119
|
0
|
12811
|
REPAYMENT OF MARGIN MONEY
LOAN
Year
|
Principal
|
Interest
|
Balance
|
|
1
|
150625
|
9038
|
150625
|
|
2
|
150625
|
9038
|
150625
|
|
3
|
150625
|
9038
|
150625
|
|
4
|
150625
|
9038
|
150625
|
|
5
|
150625
|
9038
|
112969
|
|
6
|
112969
|
6778
|
75313
|
|
7
|
75313
|
4519
|
37656
|
|
8
|
37656
|
2259
|
0
|
REPAYMENT OF WORKING CAPITAL LOAN
1
Year
|
2
Year
|
3
Year
|
4
Year
|
5
Year
|
|
Total
Working capital required
|
300000
|
300000
|
300000
|
300000
|
300000
|
Loan
Amount
|
300000
|
300000
|
300000
|
300000
|
300000
|
Interest
@12%
|
36000
|
36000
|
36000
|
36000
|
36000
|
ANNEXURE- 6
CASH FLOW STATEMENT
A
|
Source
of Funds
|
Construction
period
|
2
year
|
3
year
|
4
year
|
5
year
|
1
|
Cash
accruals(profit before income tax)
|
0
|
807125
|
869825
|
932096
|
993978
|
2
|
Increase
in capital equity
|
150625
|
||||
3
|
Depreciation
|
53625
|
48975
|
44754
|
40922
|
|
4
|
Investment
allowance
|
|||||
5
|
Increase
in long term loan
|
746250
|
||||
6
|
Increase
in MM loan
|
150625
|
||||
7
|
Increase
in unsecured loans
|
|||||
8
|
Increase
in WC loan
|
0
|
-300000
|
300000
|
0
|
0
|
9
|
Sales
of fixed assets/invests
|
0
|
0
|
0
|
0
|
0
|
10
|
Others(
investment subsidy)
|
0
|
0
|
0
|
0
|
0
|
Total
|
1047500
|
560750
|
1218800
|
976850
|
1034900
|
|
B
|
Disposition
of Funds
|
|||||
Prelim
& Pre-op expenses
|
125000
|
0
|
0
|
0
|
0
|
|
Increase
in capital expenditure
|
862500
|
0
|
0
|
0
|
0
|
|
Increase
in current assets
|
21797
|
21804
|
21809
|
21815
|
||
Decrease
in long term loans
|
80000
|
80000
|
80000
|
80000
|
||
Decrease
in unsecured loans
|
||||||
Decrease
in MM loan
|
0
|
0
|
0
|
37656
|
||
Decrease
in WC loan
|
0
|
0
|
0
|
0
|
||
Interest
on term loan to bank
|
64924
|
47014
|
29104
|
11194
|
||
Interest
on WC loan
|
0
|
36000
|
36000
|
36000
|
||
Interest
on MM loan
|
9038
|
9038
|
9038
|
9038
|
||
Taxation
|
87962
|
93315
|
102937
|
112512
|
||
Divident on equity
|
0
|
0
|
0
|
0
|
||
Other
expenses
|
||||||
Total
|
987500
|
263720
|
287170
|
278887
|
308214
|
|
C
|
Opening
balance
|
0
|
573881
|
870910
|
1802541
|
2500503
|
D
|
Net
surplus
|
60000
|
297030
|
931630
|
697963
|
726686
|
E
|
Closing
balance
|
60000
|
870910
|
1802541
|
2500503
|
3227190
|
ANNEXURE-7
PROJECTED BALANCE SHEET
A
|
Liabilities
|
Construction
period
|
2
year
|
3
year
|
4
year
|
5
year
|
Equity
share capital
|
150625
|
150625
|
150625
|
150625
|
150625
|
|
Reserve
& Surplus
|
0
|
1187369
|
1871828
|
2626846
|
3452081
|
|
Term
loan
|
746250
|
586250
|
506250
|
426250
|
346250
|
|
Margin
Money loan
|
150625
|
150625
|
150625
|
150625
|
112969
|
|
Working
capital loan
|
0
|
300000
|
300000
|
300000
|
||
Other
liabilities(towards subsidy)
|
0
|
0
|
0
|
0
|
0
|
|
Total
Liabilities
|
1047500
|
2074869
|
2979328
|
3654346
|
4361925
|
|
B
|
Assets
|
Construction
period
|
2
year
|
3
year
|
4
year
|
5
year
|
Gross
block
|
862500
|
803750
|
750125
|
701150
|
656396
|
|
Depreciation
|
0
|
53625
|
48975
|
44754
|
40922
|
|
Net
block
|
862500
|
750125
|
701150
|
656396
|
615474
|
|
InvestmenT(Prilim.
Expences)
|
125000
|
125000
|
125000
|
125000
|
125000
|
|
Current
assets
|
328834
|
350638
|
372447
|
394262
|
||
Reserved Stock accumulated to be added to
current assets
|
||||||
Cash
and bank balance
|
60000
|
870910
|
1802541
|
2500503
|
3227190
|
|
Total
Assets
|
1047500
|
2074869
|
2979328
|
3654346
|
4361925
|
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