M/S AKASH GRANITE

PROJECT AT A GLANCE

1. Name of the Unit :: M/S AKASH GRANITE

2. Address (Factory) :: SY No. 56,

Behind Jigani Weigh Bridge, Double Road,
PO-Harpanahalli, Village-Jigani, Anekal
Bangalore.
PIN- 560105
3. Constitution :: Proprietorship Firm

4. Names of the Proprietor :: 1.Mr. Arichit Kumar Talwaria

5. Date of establishment :: 20/10/2010

6. PAN :: AEAPT8310C

7. SSI Registration No. :: 290201118964

8. IEC No. :: 0715023004

9. TIN No. :: 29750587953

10. Proposed Industry :: Granite Industry (Manufacturing)

11. Activity :: Cutting and Polishing Granite Blocks

(Processing of Granite Blocks)
::
12. Technology & Installed Granite Block Cutting and polishing with
capacity installed Capacity of 360000 Sq. Ft Per
Annum.

13. The Project / Purpose :: Setting up of new Multi Cutter Machine for
cutting, sizing, and polishing of Granite
stone.

14. Cost of Project :: 43.84 Lacs

15. Means of Finance ::

Own contribution : Rs. 18.84 lacs

Term Loan : Rs. 25.00 lacs

16. Promoters contribution :: 42.97%

17. Project Debt Equity Ratio :: 0.75

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 M/S AKASH GRANITE

18. Average DSCR :: 2.81

19. Current Ratio :: Average 2.90

20. Payback Period :: 5 Years

21. Credit limit required :: Term loan : Rs. 25.00 lacs

Working Capital : Rs. 15.00 lacs
This project is approved for CLCS Subsidy
Schemes
xi) Dimensional Stone Industry (excluding
Quarrying and Mining)
GOVERNMENT OF INDIA
Revised Guidelines on
Credit Linked Capital Subsidy Scheme
(CLCSS)
for
Technology Up gradation
of
Small Scale Industries (SSI)
(As on April 20, 2006)

A. INTRODUCTION:

1.) From time immemorial, India is known for its Sculptures, Monuments and
Architectural heritage, thanks to the rich Granite reserves. Today, Granite does not
require any introduction to common man. The dimensional stone is gaining increased
acceptance in the civil construction industry all over the world.

Granite, in the form of slabs and tiles, has several attractive features, which, inter alia,
includes extra-fine mirror-polish, scratch-free glossy surface and durability. It compares
very well with other floor and wall application materials such as ceramics, vitrified tiles
and marble.

2.) India, one of the leading countries in mining and export of granite, is rich in granite
reserves. Geologically, the southern and eastern belts of the Nation are abundant in

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granite deposits. Different shades of granites are available in abundance in Tamil Nadu,
Andhra Pradesh, Karnataka, Maharashtra, Bihar, Rajasthan, and Madhya Pradesh. Granite
has become the most sought-after and extensively used stone material in building
construction and massive structural works throughout the world, and it is well known in
the International market, not only for its elegance and aesthetic quality, but also for its
durability.

3.) Due to the attractiveness of the industry, M/s Akash Granite, a Firm which is already
entered into the field from last 5 years. Now the firm is venturing into the field, with
modern machinery and infrastructure for more development.

4.) The Firm has already been registered with Registrar of Firms, obtained SSI
registration and TIN No. The proposed manufacturing unit has its leased land at Survey
No.56, Behind Jigani Weigh Bridge, Double Road, PO- Harpanahalli, Village- Jigani,
Bangalore-560105. This report examines the viability and bankability of the proposal for
installing & setting up of the unit with installed capacity of 360000.00 Sq Ft finished
granite slab per year, at a project cost of Rs. 43.84 lakhs (all inclusive).

A.1 PROMOTORS’ S PROFILE

M/s AKASH GRANITES has been promoted by Mr. Arichit Talwaria.

The following is the brief profile -:

1. Mr. Arichit Kumar Talwaria

 DETAILS OF THE
PROMOTOR/
DIRECTORS
I NAME OF THE ARICHIT KUMAR TALWARIA
PROMOTOR
DATE OF BIRTH 01/05/1985
FATHER’S NAME RAJENDRA KUMAR TALWARIA
QUALIFICATION B.COM
BUSINESS 5 YEARS EXPERIENCE
EXPERIENCE

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PAN AEAPT8310C
EMAIL
MOBILE 9590864702
CURRENT G-404, PURVA PANORAMA, KELANA AGRAHARA,
ADDRESS: BANNERGHATTA ROAD, BANGALORE-560076
PERMANENT HOUSE NO. 31, SECTOR-3, MAIN ROAD, BEHIND HOSPITAL,
ADDRESS: HANUMANGARH TOWN, RAJASTHAN-335512

Mr. ARICHIT KUMAR TALWARIA S/o Mr. RAJENDRA KUMAR TALWARIA is a young
entrepreneur of 30 years age. He is having 5 years experience in Granite market. He has
consistently showed interest in the business and has contributed value in a short span.
He is very promising and certain to take the business to greater dimensions. He is very
hard working and optimistic about running the venture in a profitable manner. The intention
of his setting the granite processing multicutter is to gain more knowledge in the field and
to understand the nuances of processing and trading granite including exports. He is good
at analyzing the market conditions and forecasting the effect on the business and also taking
precautionary measures to safeguard the business interest. In addition to this, he is also
engaged in trading and job-work of granite wherein he has established a good network.
At the back-end they have tied up with few processing units for processing. This has
given them immense confidence in not only understanding the complete modus-operandi
of this business but also analyzing the viability in terms of profitability.

In M/s AKASH GRANITE, Mr. ARICIT TALWARIA will be the Working proprietor overseeing
major functions like Purchasing, Selling Marketing, and Finance etc.

B: THE PROJECT

The project is to set up for Granite cutting, sizing and polishing of granite blocks of
activity of capacity of 360000.00 SqFt/Annum on two shifts. As already mentioned, the
firm has finalized the multi cutter machine. The leased land measuring 35000 Sft is
sufficient and ideally located for the proposed processing activities. The registration of
firm has been completed and obtained the SSI certificate. The firm also completed VAT
registration and obtained TIN number. The firm has also obtained the general license
along with power sanction for 150 KVA supply.

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 M/S AKASH GRANITE

B.1.TECHNICAL FEASIBILITY

B.1.1 Nature of Activity

1.) Granite is massive, hard and tough, and therefore it has gained widespread use as a
construction stone. The average density of granite is between 2.65 and 2.75 g/cm 3. The
word granite comes from the Latin granum, a grain, in reference to the coarse-grained
structure of the crystalline rock.

2.) Commercially, granite is classified according to the surface colour obtained on

polishing. According to the colour classification, granites found in southern states are
classified broadly as Sadarhally (locally available with white colour on polishing), Ruby
Red, Black, Jibron and Multicolor.

3.) Granite Blocks are usually procured from quarries in the form of three dimensional
blocks measuring about 4 cubic meters to 6 cubic meters. Generally, the mining company
/unit will dress the four sides of the blocks, using vertical cutting machines. The dressed
blocks of granite are loaded on trolley and placed in the Cutting Machine, using heavy
duty crane. The Cutting Machine cuts the blocks to desired sizes of slabs with varying
thickness as required. Cutting process generates heat and the blades of the cutter gets
heated up. Water is used as coolant to reduce the temperature. The rough slabs so
obtained from the cutter are transferred to polishing table where the same are polished
using pneumatic polishing machine with different kinds of polishing bricks.

B.1.2 Market:

1.) India, one of the leading countries in mining and export of granite, is rich in granite
reserves. Geologically, the southern and eastern belts of the Nation are abundant in
granite deposits. Different shades of granites are available in abundance in Tamil Nadu,
Andhra Pradesh, Karnataka, Maharashtra, Bihar, Rajasthan, and Madhya Pradesh.

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 M/S AKASH GRANITE

2.) As the firm is already involved into the field so it has wide range of market in south
like, its granite has gone to Tamil Nadu, Maharashtra, West Bengal etc. Along with this
the firm also emerged in the export area with its granite quality.

3.) Granite producers are free to determine the level of exports for maximization of
profits. The level of exports will be determined at the margin by relative realization of the
producers in the domestic market vis-à-vis realization in export destinations. Apart from
dedicated export capacities, a relatively strong domestic market and prices relative to
overseas markets would discourage exports and vice versa.

4.) India has also emerged as a net exporter of Granite with an annual growth rate of
10% per annum, which shows that Indian Granite is being increasingly accepted in the
global market.

B.1.2 Installed capacity

The firm proposes to purchase 1 Nos. Mulit cutter of latest technology cutting machines
and it has already 4 single cutter and 5 polish machines. Each cutting machine, under
standard conditions and 2 shift (of 8 hours each) working can cut 35000.00 sq.Ft in a
month having 25 working days. Assuming 325 working days in a year, the installed
capacity on 2 shift basis, works out to 360000.00 Sq.Ft.

B.1.3 Proposed Machineries:

The details of machineries and other assets proposed to be purchased are furnished in
Annexure -1.

M/S AKASH GRANITE Rs. Lacs

LIST OF MACHINERIES
Sl Total
No Description Supplier / Make Cost
HYDRAULIC BRIDGE SAW
1 MACHINE SHRI BHAGWATI MACHINES PVT.LTD. 31.01
2 MULTI SET BLADE 4.08
TOTAL 35.09

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B.1.4 Utilities:

Land and Building

The Firm has leased Land bearing Sy.no. 56,Behind Jigani Weigh Bridge, Double Road,
PO- Harpanahalli, Village- Jigani, Anekal, Bangalore.560105 The land owners have
already made preliminary civil works like land leveling, compound wall, foundation labour
quarters etc. Hence, The Civil Works is completed and ready to occupy.

Power:

The power requirement of the unit is estimated at 150 KVA. The unit has already
obtained necessary sanction from BESCOM.

Water:

The activity requires water as a cooling agent for the cutting machines as also for
polishing machines and for general drinking and washing purposes. The daily requirement
of water is estimated at around 4000 liters. The project site has a bore well with
adequate water yield. This will be sufficient for processing and other uses in the factory.

Manpower:

The unit requires the following contingent of manpower:-

M/S AKASH GRANITE

MANPOWER
REQUIREMENT
Rs. 000's
Salary
/ Monthly
Particulars Nos Month Salary
Manager 1 12 12
Machine Operators 5 9 45
Helpers 6 7.5 45

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 M/S AKASH GRANITE

Rs.
Total 12 102 1.02 Lakhs

2016 2017 2018 2019 2020 2021 2022

No.of Months 12 12 12 12 12 12 12
Yearly Salary 9.20 12.24 12.85 13.49 14.17 14.88 15.62

Jigani is also developing hub of granite processing, finding suitable and experienced
manpower will not pose any difficulty. Further, the Proprietor being pro-active and known
for their worker friendly attitudes, will be able to employ the best quality manpower in
the industry.

Raw Materials

The main Raw material for the unit is granite blocks of various dimensions ranging from 4
cubic meters to 6 cubic meters. The granite blocks will be sourced from various quarries
in Kanakapura (Karnataka), Hassan, Krishnagiri, Digni Kota etc (Tamil Nadu) and chitoor
(Andhra Pradesh). Adequate supplies are available in these areas. Promoter is having
adequate experience in purchase functions in granite unit.

Consumables

The main consumable item is the blade segments for the cutting machine. One set of
blade segment has a life of around 12500 to 15000 Sq.Ft cutting. These segments are
being supplied by local firms. The lead time required for supply of the segments is one to
two weeks from the date of confirmed purchase order. The segments are available locally
and there is no supply constraint. The miscellaneous consumables required are coolants,
cooling oils, grease, polishing bricks etc, which are locally available and can be procured
easily.

Effluent treatment

The process does not generate air, water or liquid effluents. However, the granite slurry
generated will be systematically disposed and dumped at the proposed dump sites as per

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 M/S AKASH GRANITE

the prevailing practice. The Firm has been admitted to ‘state Granite Industries Owners
Welfare Association®’ as a member.

M/S AKASH GRANITE has constructed advanced version of ‘settling tank’ with bigger
dimensions. The ‘Cutting machine’ cubicles are 16 in numbers and ‘Polish machine’
cubicles are 8 in numbers. Hence total cubicles are 24 in numbers, which will help in
making the slurry, settle in large quantities. This in turn will allow the slurry to dry and
than shifted to the associations’ common dumping yard.

As required by the rules and regulations, the company has applied to karnataka Pollution
Control Board for necessary approval and their acknowledgement in this regard is
enclosed.

B 2. COST OF THE PROJECT AND MEANS OF FINANCE

The Cost of the project has been estimated at Rs.43.84 lakhs. The following table depicts
the details of Cost of Project.

M/S AKASH GRANITE Annexure - 2

Rs. In
COST OF THE PROJECT
lacs

TL
No PARTICULARS Cost
(75%)
1 Plant and Machinery as per Annexure -1 35.09 22.81
2 Factory Buildinng 5.00 3.25
3 Land Lease Advance (Deposit) 0.00 0.00
4 Office Set up, Furnitures and Fixtures 0.00 0.00
5 Provision for Contingency 0.00 0.00
6 Interest during implementation 0.00 0.00
7 Working Capital Margin 3.75 0.00
TOTAL 43.84 26.06

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7 Term Loan -Eligible 26.06

8 Term Loan -Sought 25.00

MEANS OF FINANCING
9 Promoter's Contribution 18.84
10 Term loan 25.00
TOTAL 43.84
11 PROMOTER'S CONTRIBUTION (%) 42.97%
12 DEBT EQUITY RATIO 0.75

B 3. IMPLEMENTATION
Already, the construction activity has been commenced by engaging experienced civil
contractor. The machinery delivery time is around one month. Other accessories and
tools can be sourced within a short period. The electrification work can be undertaken at
short notice. The following is the detailed schedule of implementation:

As per the planned schedule, the Commercial Production can be started from 1 st April
2016.

C. ECONOMIC VIABILITY
Though the Indian economy presently is under pressure and witnessing reduced growth
rate, the fundamentals are strong and it is expected that the economy will resume higher
growth rate soon. Considering the last 5 years period, the Indian economy has been the
second fastest growing economy in the world after China. The higher growth expected in
the years ahead will be driven by manufacturing, construction and infrastructure. The
government is actively facilitating heavy investments in infrastructure sectors like Power,
Roads, etc. India requires huge investment of $ 485 bn in infrastructure sector. The
higher spending in these sectors will trigger another round of demand push for consumer
goods including housing. The young population, graduating from middle income segment

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to upper middle / higher income segment will push up the demand for housing. All these
factors indicate that there will be sustained demand for construction materials including
granite slabs and tiles.

Industry Outlook:

The prospect of granite industry is directly linked to the prospects of construction

industry. Bangalore being the technology capital of India will see brisk construction
activity in the next two /three year’s period. The investment in metro rail, formation of
BBMP, investment in private projects etc augurs well for construction industry and in turn
to granite industry. Further, granite processed in jigani are being supplied across the
country to other cities and states as well.

D. FINANCIAL VIABILITY

The present proposal entails capital expenditure of Rs. 43.84 Lacs for purchase of
machinery, miscellaneous assets, tools, jigs, office furniture, computers, electrification,
rent deposit etc. The promoter contribution works out to 42.97% and project Debt-Equity
stands at 0.75. The detailed Financial Analysis is enclosed. The following are the
assumptions on projections.

a. Sales:
 The capacity of the plant has been assessed on the basis of two shifts of 8 hours
each.
 The capacity utlisation has been assumed at 60% during the first year and scaled
up by 5% every year to reach the level of 80% by 2018-19 and thereafter
maintained at the same level.
 The unit is expected to process 4 types of granites namely Black, Paradise,
Multicolor and Kuppam Green on equal proportion.

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 M/S AKASH GRANITE

b. Expenses

 Raw Material requirement has been estimated based on a yield rate 12000 Sq.Ft.
of finished material per one Cubic Meter of Granite Block.

 The price per Cubic Meter of Granite Blocks has been assumed at Rs. 17000/- for
black, Rs.12000/ for all others. Annual increase of 2% in prices has been
assumed.

 Cutting Blade segments are assumed to be replaced every three months at a cost
of Rs. 50000/ per segment.

 Other Consumable items are assumed at 2% of Sales.

 Salary and Wages are calculated based on assumed salary levels as per Para on
manpower. An increase of 10% per year has been factored.

 Repair and Maintenance has been assumed on lump sum basis.

 Transportation and Freight has been assumed at 2% of sales.

 Other Manufacturing expenses, including waste disposal has been assumed at

1.5% of sales.

 Selling and Admin costs have been assumed on lump sum basis.

 Depreciation & Income Tax has been calculated at normal rates.

 Interest on Working Capital and Term Loan has been calculated at 13.5% per
annum.

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i. Borrowing Requirements
The firm desires to borrow Term Loan of Rs.25 lakhs. The following is the detailed
schedule of borrowing arrangement.
M/S AKASH GRANITE Annexure -3

SCHEDULE OF IMPLEMENTATION

Term loan (Rs.lakhs) 25.00

Rate of Interest assumed for projections 13.50%
Land Lease Agreement Completed
Availment of Term Loan 15th March 2016
UNDER
Commencement of Civil Works PROCESS
UNDER
Completion of Civil Works PROCESS
UNDER
Electrical work PROCESS
Receipt of Machinery 15th FEB 2016
Installation and Trail Run 15th MARCH 2016
Commencement of commercial Production 1ST APRIL 2016
Total Implementation Period 2 months
Holiday Period required 3 months
Total Moratorium Period from first Disbs. 5 months
Repayment to Commence from 1/10/2016
No. of Installments 60
Total Period of Advance 65 months
Installment Amount 0.42

E. MARKETING
As already mentioned the promoters have adequate exposure to granite industry. The
Promoter will explore the possibility of having business /trade associates in Ahmedabad,
Surat, Rajkot, Jaipur, Bhopal, Kolkatta, Bangalore etc, in addition to sales in Karnataka.

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The Promoter have an obsession to adherence to top quality standards and timely
delivery, which will ensure a brand identity to the Company.

F STRENGHTS AND OPPORTUNITIES

 The Promoter are having adequate exposure in the line of activity.
 Jigani being the hub of Granite Processing, finding experienced workers will not be
a constraint.
 The promoter contribution is well above the bench mark level.
 The projected financials of the firm are satisfactory and are within the norms.
 The user industry prospects are encouraging.
 The unit comes under thrust sector of SME

As long as the unit can keep up its quality and delivery schedules, there are no perceived
threats.

G RISK ANALYISIS

Industry Risk : Long-term prospects of Industry are stable.

Financial Risk : The DSCR, Debt equity, Liquidity ratio, Asset Cover &
Leverage Ratios are quite satisfactory.
Regulatory Risk : The granite industry sources Raw Material in the form of
Granite Blocks from licensed quarries. The quarry
industry is subject to licensing & leasing by the State
Governments. The present policies of state
Governments in this regard are industry friendly, and
there is no perceived threat /risk.
Technology and : The unit proposes to purchase and install state of the art
Quality Control machineries to ensure quality of the products.
User profile : The prospect of user industry i.e construction is
promising.
Input Profile : There is no difficulty in sourcing the required manpower
and other materials /stores.
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H. CONCLUSION

The unit’s business prospects in the current economic scenario look positive. The
promoters have got the required professional approach to business. Though, there are
many units in the field, the firm will overcome the competition due to sheer adherence
to quality standards, process optimization , timely delivery and competitive pricing. The
projected Financial Ratios like DSCR, Current Ratio, Debt-equity, Asset Cover and
Security margin are quite satisfactory. On the whole, the project is technically feasible
and financially viable.

*************************

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