M/S ROCK EXPORTS

PROJECT AT A GLANCE

1. Name of the Unit :: M/S ROCK EXPORTS

2. Address (Factory) :: Survey No. 48, M, Hosahalli Village, Malur

Taluk- 563139

3. Constitution :: Proprietorship

4. Names of the Proprietor :: Arun Kumar Shetty

5. Date of establishment :: New Unit (Proprietorship constituted

on 28/01/2016

6. SSI Registration No. :: Applied for

7. TIN No. :: 29911313134

8. Activity :: Mining & Cutting Granite Blocks

(Processing of Granite Blocks)

9. The Project / Purpose :: Setting up of new unit for minning cutting,

sizing, of Granite stone.

10. Cost of Project :: 92.18 Lacs

11. Means of Finance ::

Own contribution : Rs. 37.18 lacs

Term Loan : Rs. 50.00 lacs

Working Capital : Rs. 50.00 Lacs

12. Promoters contribution :: 40.33%

13. Project Debt Equity Ratio :: 0.68

14. Average DSCR :: 3.20

15. Credit limit required :: Term loan : Rs. 50.00 lacs

Working Capital : Rs. 50.00 lacs
Under CGTMS scheme
This project is approved for CLCS Subsidy
Schemes
xi) Dimensional Stone Industry (excluding
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M/S ROCK EXPORTS

Quarrying and Mining)

GOVERNMENT OF INDIA
Revised Guidelines on
Credit Linked Capital Subsidy Scheme
(CLCSS)
for
Technology Upgradation
of
Small Scale Industries (SSI)
(As on April 20, 2006)

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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.

2.) Granite is one of the emerging industries of India. According to estimates India
has over 350 billion tons of granite reserves and more than 100 types of colours
and verities of granite are available in India. This study aims at providing ample
information to the potential investors that would help them in preparing realistic
business plan for the selected quarry.

3.) 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. 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.

4.) Granite is a product for decorating walls or interior space of buildings. It is now
one of the most essential building materials for the decoration, durability and
protection of the buildings.

3.) Due to the attractiveness of the industry, M/s Rock Exports, a newly formed
Proprietorship minning firm is venturing into the field, with modern machinery and
infrastructure. The Promoter of the firm already has immense knowledge into this field and
market by which they planned to run this firm.

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4.) The firm has already been registered with Registrar of Firms, applied SSI registration
and obtained TIN No. The proposed minning unit comes up in industrially leased land at
Survey No. 48, M Hosahalli, Village Malur Taluk. This report examines the viability and
bankability of the proposal for setting up of the unit with installed capacity of 5000.00
CBM blocks per year, at a project cost of Rs. 92.18 lakhs (all inclusive).

A.1 PROPRIETOR’ S PROFILE

M/s ROCK EXPORTS has been promoted by Mr. ARUN KUMAR SHETTY.
The following is the brief profile of him.

1. Mr. Arun Kumar Shetty

 DETAILS OF THE
PROMOTOR/
DIRECTORS
I NAME OF THE Arun Kumar Shetty
PROMOTOR
DATE OF BIRTH
QUALIFICATION
PROFESSIONAL 10 YEARS
EXPERIENCE
BUSINESS 10 YEARS
KNOWLEDGE
PAN
EMAIL
MOBILE
ADDRESS:

Mr. Arun Kumar Shetty W/o Mr. ----------- is a young entrepreneur of 35 years age. He is
having 10 years experience in Granites Industries. The intention of his joining the granite
minning firm is to gain knowledge in the field and to understand the nuances of minning,
processing and trading granite including exports. He also has exposure in granite
manufacturing and trading activity. He is very hard working and a very optimistic person.
He has full-fledged knowledge of granite Business from last 10 years as he has one more
firm of chemicals named as “Wilber Chemicals” with full fledged goodwill in market. He is

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an experienced businessman with great experience in granite minning, manufacturing,

trading and exporting field. He has lots of knowledge about marketing, manufacturing as
well as exporting.

2. FAMILY BACKGROUND:-
The Granite industry in India is rapidly expanding. It is forecast that Granite production will
rise to high pick in 2020.
We are into the Granite industry for the past 10 years and established our concerns/ units of
chemicals in various states of India.
a.) Wilber Chemicals , Jigani, Bangalore
So the promoter has fully knowledge of variety of granites and he knows which
granite is going on in market and on which we can command our hand.

B: THE PROJECT

PRESENT FINANCIAL POSITION

1.1 Promoter of Firm has at present invested about Rs. 92.18 Lacs towards the following:
` in Lacs
1. Cost of Land Owned
2. Plant & Machinery 78.43
3. Building 0.00
4. Contingency 1.25
5. Working Capital Margin 12.50
Total 92.18

The project is to set up for Granite minning, cutting, sizing and polishing of granite blocks
of activity of capacity of 5000.00 CBM/Annum on two shifts. As already mentioned, the
firm has Applied for registration The leased land measuring 8 Acre is sufficient and ideally
located for the proposed processing activities. The registration of firm is in process and
firm has already obtained the TIN . The firm already has the general license along with
power sanction for 125 KVA supply.

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B.1.TECHNICAL FEASIBILITY

B.1.1 Nature of Activity

Because of its uniform texture and hardness, Granite is preferred for external use. It is
more durable as compared to Marble and is economical in maintenance. Granite does not
need re-polishing once it is polished and fixed at the desired place, while Marble needs
polishing every year or at least once in two years. The granular formation and
compactness of Granite makes it non-porous and non-absorbent hence more hygienic for
the use in laboratories, kitchen, washrooms and other water exposed areas. Uniformity in
texture gives better look to Granite and is thus convenient in its application at the desired
place

Granite Blocks are usually procured from quarries in the form of three dimensional blocks
measuring about 4 cubic meter 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 diffe rent kinds of polishing bricks.

B.1.2 Market:
Local Market:-
a.) Indian Local Market of Karnataka state has its own popularity of granite and its
granite industries & mining due to this it is called as one of granite hub of India.
b.) The Govt. has also implemented Single window clearance system, wherein all
the necessary clearance, approvals and registration can be obtained at once
which saves the time of promoters.
c.) As Karnataka is a supportive state for new entrepreneurships which supports

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Businessman in providing capital subsidy, Interest subsidy, power subsidy and

many tax benefits.

1.2 EXPORT AVENUES

 India has also emerged as a net exporter of Granite with an annual growth rate of 15% per
annum, which shows that Indian Granite is being increasingly accepted in the global market.

 There is a cautious international cost competitiveness of the Granite sector. It takes

assiduous effort to create and hold on to export markets. While the business decision to
export will depend on the prevailing relative prices, the Government would encourage
strategic alliances with buyback arrangements and dedicated export production through
100% export-oriented units. A growth rate of around 18 percent per annum is envisaged up
to 2019-20.

 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.

 India, with a growing industrial economy and rising infrastructure investment where demand
and price of Granite are likely to remain firm for some more time to come, projection of
exports will be determined largely by the capacities in place and realized domestic demand
at any point in time.

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. 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. It is emerging as a promising export-area with several corporate houses
entering the sector with sophisticated world-class machinery and infrastructure.

1.) In this market, variety of granite colors is available and colors demands expand its
market business not only in india but foreign markets also required these color.

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2.) As already mentioned the promoters have adequate exposure to granite industry.
Proprietor will explore the possibility of having business /trade associates in
Ahmedabad, Surat, Rajkot, Jaipur, Bhopal, Kolkatta, and as well as foreign market
etc, in addition to sales in his local market. The Proprietor and its senior managers
have an obsession to adherence to top quality standards and timely delivery, which
will ensure a brand identity to the firm.

B.1.3 Proposed Machineries:

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

M/S ROCK EXPORTS Rs. Lacs

LIST OF MACHINERIES
Total
Sl No Description Supplier / Make Cost
1 AIR COMPRESSOR Trade Visioninfra Ventures (I) Pvt.Ltd. 26.87
2 AIR COMPRESSOR KK Agencies 13.56
3 AIR COMPRESSOR KK Agencies 8.39
4 LUBRICANTS KK Agencies 3.54
5 HITACHI EXCAVATOR Sri Laxmi Granite Tiles 12.07
6 TIPPER Swathi material Handling Equip.Pvt.Ltd. 14.00
TOTAL 78.43

B.1.4 Utilities:

Land and Building

The firm has its leased Land measuring 8 acre bearing sy.no. 48, at Hosarhalli village
malur Taluk. on Long Term lease basis. The land owners have already running its
preliminary civil works like land leveling, compound wall, foundation labour quarters etc.
Hence, The Civil Works is ready to complete & occupy.

Power:
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The power requirement of the unit is estimated at 125 KVA. The unit has already
obtained necessary sanction from respective power corporation.

Water:

The activity requires water as a cooling agent for the cutting machines as also 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 ROCK EXPORTS

MANPOWER
REQUIREMENT
Rs. 000's
Salary
/ Monthly
Particulars Nos Month Salary
Manager 1 16 16
Accountant 1 15 15
Security 1 7 7
Crane Operators 2 13 26
Machine Operators 4 12 48
Helpers 6 8 48
Rs.
Total 15 160 1.6 Lakhs

2017 2018 2019 2020 2021 2022 2023 2024

No.of Months 12 12 12 12 12 12 12 12
Yearly Salary 19.20 19.15 20.11 21.12 22.17 23.28 24.44 25.67

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Consumables

The main consumable item is the blade segments, wiresaw, blasting equipments for the
cutting machine in minning. 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.

B 2. COST OF THE PROJECT AND MEANS OF FINANCE

The Cost of the project has been estimated at Rs.92.18 lakhs. The following table depicts the
details of Cost of Project.
M/S ROCK EXPORTS Annexure - 2
Rs. In
COST OF THE PROJECT
lacs

TL
No PARTICULARS Cost
(75%)
1 Plant and Machinery as per Annexure -1 78.43 58.82
2 Factory Buildinng 0.00 0.00
3 Land Lease Advance (Deposit) 0.00 0.00
4 Power & Eletricals 0.00 0.00
5 Provision for Contingency 1.25 0.00
6 Interest during implementation 0.00 0.00
7 Working Capital Margin 12.50 0.00
TOTAL 92.18 58.82

7 Term Loan -Eligible 58.82

8 Term Loan -Sought 55.00

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MEANS OF FINANCING
9 Promoter's Contribution 37.18
10 Term loan 55.00
TOTAL 92.18
11 PROMOTER'S CONTRIBUTION (%) 40.33%
12 DEBT EQUITY RATIO 0.68

The above project cost has been worked out based on the quotations for Machineries and
estimates for Civil Works and other expenses. These cost items have been capitalized .

The above Project Cost is proposed to be financed by way of promoter contribution of

Rs.37.18.00 lacs and Term Loan of Rs.55 lacs. The promoter contribution and project
Debt-Equity ratio works out to 40.33% and 0.68 respectively.

B 3. IMPLEMENTATION
The following is the detailed schedule of implementation:
M/S ROCK EXPORTS Annexure -3

SCHEDULE OF IMPLEMENTATION

Term loan (Rs.lakhs) 55.00

Rate of Interest assumed for projections 13.50%
Land Lease Agreement Completed
Availment of Term Loan 1st Apr 2016
Commencement of Civil Works Work in Progress
Completion of Civil Works Work in Progress
Electrical work 15th March 2016

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Receipt of Machinery 1st March 2016

Installation and Trail Run 15th March 2016
Commencement of commercial Production 1st April 2016
Total Implementation Period 2 months
Holiday Period required 4 months
Total Moratorium Period from first Disbs. 6 months
Repayment to Commence from 1st oct 2016
No. of Installments 84
Total Period of Advance 90 months
Installment Amount 0.65

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

D. FINANCIAL VIABILITY

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The present proposal entails capital expenditure of Rs. 92.18 Lacs for purchase of
machinery, miscellaneous assets, tools, jigs, office furniture, computers, electrification,
rent deposit etc. The promoter contribution works out to 40.33% and project Debt-Equity
stands at 0.68 The detailed Financial Analysis is enclosed. The following are the
assumptions on projections.

a. Sales:

Operating Expenses- First Six months operating expenses excluding depreciation have
been taken in working capital computation.
Administration Marketing and Other Expenses- First three months administration,
marketing and other expenses excluding depreciation and technical institute expenses,
have been taken.
Accrued Expenses- Normally it takes 30 days to deposit the utilities bills. One month
utilities, wages, salaries and benefits have been taken as accrued expenses in the
working capital computation.
Accounts Receivable Accounts- receivable are estimated at 60 days of net sales.
Stores spares and loose tools- The Plant will be maintained and spares and stores are
consumed for this @ 1.5% of plant and machinery with 5% increase in coming years
Carriage outwards- Carriage outwards is taken as Rs. 1,200 per ton.
Water charges- Water charges are assumed at a lump sum amount of 10,000 per
annum with
 The capacity of the plant has been assessed on the basis of two shifts of 8 hours
each.

 Other Consumable items are assumed at 1% 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.

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 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.

h. Borrowing Requirements
The firm desires to borrow Term Loan of Rs.50 lakhs . The following is the detailed schedule of
borrowing arrangement.
M/S ROCK EXPORTS Annexure -3

SCHEDULE OF IMPLEMENTATION

Term loan (Rs.lakhs) 55.00

Rate of Interest assumed for projections 13.50%
Land Lease Agreement Completed
Availment of Term Loan 1st Apr 2016
Commencement of Civil Works Work in Progress
Completion of Civil Works Work in Progress
Electrical work 15th March 2016
Receipt of Machinery 1st March 2016
Installation and Trail Run 15th March 2016

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Commencement of commercial Production 1st April 2016

Total Implementation Period 2 months
Holiday Period required 4 months
Total Moratorium Period from first Disbs. 6 months
Repayment to Commence from 1st oct 2016
No. of Installments 84
Total Period of Advance 90 months
Installment Amount 0.65

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

F STRENGHTS AND OPPORTUNITIES

 The Proprietor and his supporters are having adequate exposure in the line of
activity.
 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.
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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.

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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