DETAILED PROJECT REPORT

OF

SS INDUSTRIES
Prepared By GSK & CO.,
Chartered Accountants

INDEX OF THE REPORT

1.

COMPANY INTRODUCTION AND EXECUTIVE SUMMARY

2.

KEY MANAGEMENT PERSONELL

03

06

3.

PVC PRODUCTS AND ITS PROCESS

4.

RAWMATERLAS AND UTILITIES

08

15

5.

LAND AND SITE DEVELOPMENT LOCATIONS

16

6.

PROJECT MEANS AND FINANCE

17

7.

APPROVALS REQUIRED

19

8.

SCHEDULE OF IMPLEMENTATION

20

9.

FINANCIAL STATEMENTS AND VIABILITY

21

10.

PROJECT ECONOMIES

25

11.

SWOT ANALYSIS
28

12.

MARKETING AND WORKORDERS

29

32

13.

SUPPLIERS LIST

30

14.

CONCLUSION

31

1.COMPANY INTRODUTION AND THE EXECUTIVE SUMMARY

SS INDUSTRIES, is a partnership firm having registered under the partnership

act , on the date of 20th April 2015, having its register office at Flat no , 5 th Floor
, Bharani Classic Apartments, Hakeemabad Colony , Chintalakunta , L B Nagar ,.
HyderbadThe Company is promoted by a team of Successful business entrepreneurs.
1. Mr. Srinivas Reddy Yerikalreddy
2. Mr. Srinivasulu Duggi
The promoters have vast experience in manufacturing, trading of all types
plastic PVC pipes.
The Company is having manufacturing unit at plot no 90 sy no 63 of 120 sq
yards of1400 sft in pedda amberpet village, RR Dist, which is under the lease
premises for a period of 9 years from S Amaravathi ,
The total Plant and machinery is divided into 5 units one for Dradied hose
pipes , Garden tubing pipes, and one for LLdpe krishi pipes .
The existing manufacturing unit is plot no 90 sy no 63 of 120 sq yards of1400 sft in
pedda amberpet village, RR Dist, , which is under leased premises for a period of 9
years , with total project outlay of Rs 164.26 Lakhs, and in addition to this the

32

company has also requested for the working capital limits of Rs 65.00 lakhs and
Domestic L.C 50.00 Lakhs.
Project Cost:
The total estimated project cost of the proposed manufacturing unit is
164.26Lakhs and the details are given in the table below:

A. PROJECT COST
(Rs in Lakhs)
1.
2.
3.
4.

Description
Plant & Machinery
Electrical Equipment including transformer
Civil Works
IDC
Total

Amount
152.26
3.00
7.50
1.50
164.26

The current proposal is for the establishing a manufacturing unit at plot no 90 sy

no 63 of 120 sq yards of1400 sft in pedda amberpet village, RR Dist, with a total
built up area of 1400 sft ( which shall include the Machinery erection , Warehouse
for raw material and finished goods) and , the total project cost is 164.26 of which
the company has requested for the term loan of Rs 135.00 Lakhs for the
establishment of the unit which shall include the civil and the building cost and the
purchase of the machinery as detailed in, the company shall infuse the remaining S
65.00 Lakhs for the margin of electricity and other project essentials like working
capital margin and other necessaries including the machinery .
OPPURTUNITY TO LOCAL SMALL SCALE INDUSTRIES
The Telangana Government has provided ample opportunity for the the proposed
unit by enabling capital subsidy to the tune of 20 lacs and the power subsidy

32

and the refund of the Indirect taxes, as per the Telangana new Industrial
policy 2015.

Working Capital
The applicant has requested for the working capital limits of Rs 65.00 lacs and Rs
50.00 lakhs Letter of Credit for the purchase of the raw materials to meet the day
to day expenses of the company and to bridge the working capital gap.

32

2. KEY MANAGEMENT PROFILE

The Company is promoted by a team of Technically qualified and Successful business

entrepreneurs. The name & brief profile of the promoters are:
MR. SRINIVAS REDDY YERIKALREDDY
He is the managing partner of the firm he has been a successful and has a enrich
professionalism for its sustainability and financial discipline. He is currently the
director of MANJEERA PVC PRODUCTS PVT ;TD , KPR POLYMERS PVT LTD , KPR
PIPES PVT LTD , VARSHINI POLYMERS PVT LTD MR Sreenivas Reddy is a MBA
graaduate in the Marketing Management from Institute of Management and Research
( IMCR ) Belgaon, Karnataka. After completion of his management degree, he joined
Nandi group, Nandyal in Kurnool district one of the leading PVC manufacturers in South
India. He was inHe is on the Board of the Company as Whole-time Director designated
as Executive Director in Integrated Thermoplastics Limited, Hyderabad. Under his
leadership, group, in a span of 10 years since inception in the acquisition and
diversification which resulted achieving Rs. 800 crores turnover during FY 2009-2010.
Being a management graduate having rich experience of over 17 years of accomplished
career track record in PVC pipe industry spectrum for delivering and sustaining
revenue and profit gains. Presently founder director and will lead the KPR Pipes Pvt
Ltd, with capacity of Managing Director.A keen planner & strategist managing a wide

32

gamut of functions; leading in acceleration of business revenue. Expertise in managing

entire operations with key focus on bottom line profitability by ensuring optimal
utilization of resources.Proven abilities in swift ramp of projects with competent multi
functional teams. Aggressively identified opportunities, developed focus and provided
tactical business solution.Exceptional communicator with consultative sales style,
strong negotiation skills, exceptional problem solving abilities and possess needs
assessment analysis.

MR. SRINIVASULU DUGGI

He is the other director of the company, He holds Masters degrees in Marketing
Management from Osmania University, Hyderabad .He has been a Successful trader in
Nandyala pipe agencies and laxmi pipes agencies, being a major distributor for the
major leading brands for Prakasaham district . Instrumental in initiating the
Hyderabad branch & reaching 100 dealers mark in AP. Distinguished efforts towards
maintaining more than 50% sales growth each year from 1999-2003.
Formulate the contents of marketing mix and put forth an effective marketing plan,
Obtaining the management consensus to develop marketing strategies for new products
development. Keep an eye on the current state of the market and the details of the
competitors in the same class. Conducting an exhaustive market research that will
really help in the advertising and promotional campaigns of the product. Supervising the
daily work of sales, marketing, and product promotion executives.

32

3 .PVC PRODUCTS AND ITS PROCESS

Introduction.
Plastic extrusion of tube, hose and pipe is a steady-state process for converting a
thermoplastic raw material to a finished or near-finished annular product. The raw
material is usually in the form of plastic pellets or powder. The conversion takes
place by forming a homogeneous molten mass in the extruder and forcing it under
pressure through an extrusion die orifice that defines the shape of the product's
cross section. The formed material, or extrudate, is cooled and drawn away from
the die exit at a controlled rate. The extrudate can then be wound on a spool, cut
to a specified length, or directed into another in-line process. By contrast with
injection molding or blow molding, which are cyclic processes, extrusion is a steadystate process. This steady-state characteristic produces some unique benefits and
challenges as a manufacturing process. Extruded products are very long and
continuous, and have a cross section that is usually constant with respect to the
axis or direction of production. Injection-molded products are discrete items with
varying cross sections in each axis. The fact that the extrusion of tube, hose and
pipe is a steady-state process will be discussed in many areas of this article.
The terminology used for describing tube, hose and pipe varies from industry to
industry.

32

For the use in this article, tube products are 1 in outer diameter or less, and are
products that need to be flexible in their use. Examples of tubing include medical
catheters or flexible pneumatic tubing. Hose products are generally 1 in outer
diameter and greater, and are products that also are flexible in their use. Garden
or irrigation hose are good examples of hose products. Pipe products are generally
rigid in form when compared to tubing and hose, and can be any diameter in size.
Pipe products can range from diameter water pipe made from CPVC, up to 60
diameter corrugated drainage pipe made from HDPE. These naming conventions are
arbitrary and are used for convenience.
Equipment.
The major components of a tube, hose, or pipe extrusion system are often divided
into components that are upstream of the extruder, the extruder itself, and those
that are downstream of the extruder. Upstream components include resin handling
equipment for conveying the raw materials to the extruder, and resin conditioning
equipment that will pre-heat the resin, or control the moisture content of the resin
before it enters the extruder feed throat. The downstream components include a
molten resin filter or screen changer, the extrusion die assembly, the quench or
vacuum sizing tank, any product measurement instruments, the extrusion line speed
controller in the form of a belt puller or nip roll set, and finally a product cut-off
device or winding equipment. There are additional extrusion process methods that
will take the extruded product directly into another in-line process for the addition
of a reinforcement braiding or for the addition of other coatings or resin
layers.

32

Materials.
Extrusion techniques can be used to process most thermoplastics and some
thermoset plastics. The resins most commonly extruded for tube, hose and pipe
products include high and low density polyethylene, polypropylene, polyurethane,
polystyrene, fluoropolymers, nylon, polyester, ABS, and flexible and rigid PVC. A
characteristic that often differentiates extruded resins from injection-molded
resins is the melt viscosity of the plastic at normal processing temperatures.
Extruded plastics often have a higher melt viscosity, which allows the extrudate to
retain the shape imparted to it by the die while the extrudate is in the quenching
stages.
Combinations of various resins can be used to gain special physical, biological, or
chemical properties. Many additives can be used during the extrusion process to
enhance processing characteristics of the polymer or to alter product properties.
Such additives include lubricants, thermal stabilizers, antioxidants, radiopacifying
agents, and colorants.
Processing Parameters.
The parameters important to extrusion processing are similar to those of injection
molding processes. Resin temperature, resin pressure, resin moisture content,
screw speed, and screw motor amperage are usually controlled or monitored to

32

provide a homogeneous melt at a controlled volumetric rate. Quenching temperature

and the rate at which the extrudate is drawn are controlled or monitored to
provide a controlled product size. Dimension measurements, using a variety of
gauging methods, can be taken of the extrudate as it is produced. In contrast to
injection molding, extrusion can vary the size of the final product without changing
the die tooling. Common extrusion production tolerances or process consistency are
held to within 1% of the nominal measured value.
As these manufacturing processes involve steady state conditions, any action that
can stabilize any parameter or condition is beneficial to the process.

Product Design Considerations.

Extruded tube, hose and pipe products fall readily into two categories: those having
just one resin in the product cross section, and those having more than one. The
first category includes plain tubing and pipe, or a single layer overcoating. The
second category includes tubing or pipe with surface or encapsulated striping, and
multilayer extruded products. Various non-resin materials can also be encapsulated
within layers of the extrudate to provide additional properties. Fibers can be
braided over an extruded tube substrate in to increase burst strength. Stainlesssteel wires can be added to improve kink resistance or to provide electrical
conductivity. Fiber-optic bundles can carry images or illumination. Each of these
techniques has potential for use in tube, hose and pipe manufacturing.
Upstream Components.
Incoming raw material inspection.
As these product manufacturing processes are steady-state as mentioned before,
and will be mentioned again, the consistency of the resin and its processing
properties are absolutely critical to the stability and consistency of the

32

manufacturing process.Changing from one batch of resin to another can be like

completely changing the type of polymer altogether. Even within a batch of resin,
there can be significant characteristic changes that will alter the steady-state
nature of the process.
It is very beneficial to be able to measure and verify the physical and processing
characteristics of the resin being processed on a regular basis to make sure that
the control parameters that have been set for the extrusion line will continue to
produce the desired product. It is very unrealistic to make the gross assumption
that the processing characteristics of resin in one bag or Gaylord will be identical
to that of another. This type of inspection also makes good economic sense as the
regular inspection will insure that the resin used in the process will not be
converted into useless scrap on the extrusion line. If the extrusion line is not
producing good product, making money for the company, it is costing money in lost
material, lost wages, and available manufacturing time. Resin characteristics to be
measured and recorded include resin density, melt index, shear rate vs. viscosity
data, and tensile strength. Another important visual measurement method is the
pressing out of thin resin films on a heated, hydraulic press. This allows a preextrusion look at the resin after it has been melted and formed. This method allows
a look at clarity or color, the presence and amount of gels, unmelts, or particulate
contamination in the incoming resin batch.
The pressing our of resin films prior to extrusion is one of the single most valuable
evaluation opportunities that the extrusion line operator has. Every company that
does extrusion processing should invest in a small resin analysis lab area that has
the proper measurement tools. The resin measurements that are valuable to the
extrusion process do not require a high-level individual to make. An average
extrusion operator can be trainedto perform these basic resin property checks.
After all, the extrusion operator is the one that will be responsible at the end of
the day for making good extruded product at the end of the extrusion line.

32

The Extruder.
Selection criteria.
The performace requirements of the extruder are being successfully met when the
desired ouputs are being attained, with adequate resin melting and melt
homogeneity, at a constant discharge pressure and melt temperature. When an
extruder is selected for a process, the following extruder parameters need to be
considered:
Extruder diameter.
L/D raio.
Feedscrew design.
Feedscrew RPM range and interchangeability.
Available torque and horsepower.
Gearbox design and thrust capacity.
The distribution of barrel heating zones.
The type of barrel cooling.
The need for venting the barrel.
The need for feedscrew cooling. The design of the feedscrew and the hardfacing
of the barrel liner. The control instrumentation arrangement.
The extruder is discussed in other areas of this book in great detail. Suffice it to
say that for this article that the job of the extruder in the manufacturing of tube,
hose and pipe, is to deliver a homogeneous melt material, at a fixed and uniform
rate, at a fixed head pressure, and a fixed melt temperature. It is much easier
stated than accomplished. As many variables are in action together in this system,
as the variables interact, they will cause process variations of greater or lesser
magnitude that will manifest themselves in the extruded product quality.

32

COMMON TUBE, HOSE, AND PIPE PRODUCT USES.

Medical devices / Pharmaceutical products.
Electrical / conduit.
Plumbing.
Irrigation.
Natural gas distribution.
Municipal water and sewer / corrugated pipe.
Figure 14, photo courtesy of RDN Manufacturing

32

Page 24
Swimming pools and spas.
Writing instruments.
Lawn and garden.
Automotive.
Consumer products / packaging.
Appliances.
Marine.
Industrial hose.

USES OF THE PRODCUTS :

1. DRADIED HOSE PIPES : THE ABOVE PIPES ARE USED IN agricultural

purpose , industrial and domestic purposes
2. GARDEN TUBING PIPES, for the garden purpose , curing of the buildings
3. LLDPE KRISHI PIPES , used in the agricultural sector.

4. RAWMATERLAS AND UTILITIES

a)

RAWMATERIALS

32

The raw materials required for the production of the products are
PVC(POLY VINYL CHLORIDE) Resine , CPW (CHLORINATED PARAFIN
WAX) and DOP ( DI OCTYLE PSYLIDE)
b)

Water

The water consumption for the process is 1 Cubic Meters per day for doing
hydro test for Equipment for finding out leakages in welding. The total
requirement of water works out can be met out of the bore well.

c)

Effluents

The effluents are the tin stabilizers and the colors foe the coloring

d)

Manpower

The total manpower requirement is 30 persons, including skilled & semi

skilled . The persons required for security is about 3 and they are hired on
contract basis from various agencies.

e) Power
The power requirement is 100 hp and source of Power is drawn from
TCPDCL and 750 KVA Generator is purchasing to avoid Power cut
Problems.

5.LAND AND SITE DEVELOPMENT AND LOCATION:

The manufacturing unit is situated at plot no 90 sy no 63 of 120 sq yards

of1400 sft in pedda amberpet village, RR Dist

32

The land which is proposed to be used for establishment of manufacturing unit

is admeasuring about 120 Sq yards .
The unit is accessible for the transport facility
1. Transport facility to National highway.
2. The unit is Provided with Compound wall with solar fencing to avoid theft
of Materials, and with a very good internal controls in all the areas.

6.PROJECT COST AND MEANS OF FINANCE

Project Cost:

32

The total estimated project cost of the proposed manufacturing unit is Rs

164.26 lakhs and the details are given in the table below:
A. PROJECT COST
(Rs in Lakhs)
1.
2.
3.
4.

Description
Plant & Machinery
Electrical Equipment including transformer
Civil Works
IDC

Amount
152.26
3.00
7.50
1.50

Total

164.26

B. MEANS OF FINANCE
(Rs in Lakhs)
Description

Amount

1. Equity from Promoters

54.26

2. Term Loan from Bank

110.00

Total

164.26
Total

D/E Ratio

2.03

Debt component

66.97%

equity Component

33.03%

The current proposal is for the establishing manufacturing plant for Dradied Hose
Pipes , Garden Tubing Pipes, Lldpe Krishi Pipes , with a total built up area of 1400
sft ( which shall include the Machinery erection ,building, civil) and , the total
project cost is Rs 164.26 lakhs of which the company has requested for the term
loan of Rs 110.00 lakhs for the purchase of the machinery and the establishment of
the unit like the building and the machinery as detailed in, the company shall infuse

32

the remaining

Rs 54.26 lakhs

for plant and machinery ,electricity and other

project essentials like working capital margin and other necessaries.

Working Capital
The applicant has requested for the working capital limits of Rs 65.00 lacs and
50.00 lacs Letter of credit to meet the day to day expenses of the company and to
bridge the working capital gap.

7. APPROVALS REQUIRED & STATUS

In Tanzania all the approvals and the permissions are provide by a single
window approving authority called Tanzania Investment Centre ( TIC).

32

Authority
Registrar with
Partnership
TCPDCL
Department of
Commercial
Taxes
DIC
District Industries
Centre

Purpose
Certificate
of
Incorporation
Power

Status
Completed

Value
Added Tax &
CST
All Approvals
& SSI
Ssi
Registration

Completed

Completed

Completed
Completed

8.SCHEDULE OF IMPLEMENTATION

Particulars

Date of

Date of Completion

Commencement

32

`Land Acquisition
Civil Works
Plant & Machinery
-

Placement of Orders

- Delivery
Erection & Commissioning
Trail Runs
Commercial Production

01-05-2015
01-06-2015
Completed
1-07-2015
01-09-2015
15-09-2015
01-10-2015

31-05-2015
31-08-2015
Completed
31-08-2015
15-09-2015
30-09-2015

9.FINANCIAL STATEMENTS AND VIABILITY

The total commercial activity is being divided into 3 products

32

The company has started its expelling unit under leased premises at plot no
90 sy no 63 of 120 sq yards of1400 sft in pedda amberpet village, RR Dist
with a installed capacity of 75 TPD and the operating capacity at 60%, and
started its commercial activity from October 2015
REVENUE ASSUMPTIONS
The first full year of operation is for the FY 2016-17
1. The financial year is taken from 1st October 2015 to 31 st March 2016.
2. The total number the working days are taken at 300 days per annum.
Revenue projections
The total products are
1. Flexible garden Hose Pipe
2. Braded Hose pipe
The total installed capacity of the product is 600 MT per annum for both
the

product

and

the

operating

capacity

is

60%,60%,65%,70%,75%,75%,75% 1thereon for the years 2015-16, 17,

18,19,20,21 and 22 respectively.
2. AAnd the Selling prices are as follows.
Particulars

Capacity

Selling

price

in Rs per ton
Flexible

garden

Hose Pipe
Braded Hose pipe

100.00%

82,000/100.00%

1,10,000/-

EXPENDITURE ASSUMPTIONS
1.The purchase price of the rawmaterial is as follows for Flexible garden
pipe

Particulars

Percentage
of the
computation

Rs per ton

32

Pvc Resine for Flexible garden Hose

pipe

50.00%

84000

CPW

49.50%

57000

0.50%

300000

Utilities as Tin stabilizer and colours

The purchase price of the rawmaterial is as follows for Garden Hose pipe

Particulars
Pvc Resine for Flexible garden Hose
pipe

Percentage
of the
computation

Rs per ton

50.00%

84000

CPW

30.00%

57000

DOB ( Dioxy Butane)

19.75%

98000

0.25%

300000

Utilities as Tin stabilizer and colours

2. Other expenses
a. Power is taken at 20,000 units per month at 7.00 per unit.
b. The water consumption is 30000 iters per month @ 1 Rs per liter
Administrative and Selling expenditures are taken at 0.50% of the sales
Repairs and maintenance
Repairs & Maintenance
Buildings
Plant & Machinery
Electricals & Misc. Fixed Assests

0.50%
0.50%
0.50%

8. The total employees patter is given below

DETAILS OF MANPOWER REQUIRED

Particulars

No

Salary per
Month n Rs

Salary per
head per Annum

32

Direct Wages
Supervisor

35000

Accounts Officer

15000

Electrician

15000

20

8000

19

Peons

5000

Operators

15000

Marketing

15000

UnSkilled Labor

Total salaries (Rs. In Lakh)

38

Add: Fringe Benefits @ 5%

1.92

Total salaries (Rs. In Lakh)

40.32

Total Manpower Requirement

30

Grand Total man power costs (Rs. In

Lakh)

40.32

9. The bank interest rates are taken at 12.00 % for term loan and 13.00%
for working capital.
10. The depreciation rates are considered at the following rates as per
Income Tax act .
Particulars

Dep as per
Income
Tax

Dep
as per
com
act
3.34%

Factory
10%
Buildings
Plant
&
15%
5.28%
Machinery
Electricals &
25%
7.07%
Misc. Fixed
Assests
11.Income tax rates is taken at 32.5% as per Income tax including surcharge
of 5%
12. Mat is considered at 20.01 %

32

WORKING CAPITAL ASSUMPTIONS AND ITS HOLDING PERIOD

As per the general market survey and as per the industry analysis the
following is the holding periods
Particulars
Holding period in months
Raw material
1.00
Finished Goods
0.50
Bills Receivables
2.00
Sundry Creditors (CL)
0.25
13. The total repayment is taken at 6.5 years, with 0.5 year moratorium .
14. The moratorium is taken at 6 months and the remaining 78 months.
15. The total capital contribution is at Rs 54.26 lakhs is for the initial
project outlay contribution and the remaining is for the working capital
margin.

10. PROJECT ECONOMICS

Profits before Tax (PBT)

The project makes profit right from the first year of operations which is
only for 6 months . The PBT is estimated to be Rs 51.96 lacs

during the

first full year of operation which is 2017-18 increases to Rs 62.13 lakhs

during the third year of operation due to increase in capacity utilization. The

32

PBT figures are shown in the table below. The detailed calculations are
presented in Appendix 7.
Particulars

2015-

2016-

2017-

2018-

2019-

2020-

2021-

16

17

18

19

20

21

22

PBT (in
Rs )lakhs

22.68

51.96

62.13

70.72

77.73

82.24

84.72

Profit after Tax: (PAT)

The PAT is estimated to be Rs 39.19 lacs during the first full year of
operation which is 2017-18 increases to Rs 44.96 lakhs during the third
year of operation due to increase in capacity utilization. The PAT figures are
shown in the table below.
Particulars

2015-

2016-

2017-

2018-

2019-

2020-

2021-

16

17

18

19

20

21

22

PAT (in
Rs )lakhs

18.15

39.19

44.96

49.84

53.80

56.20

57.33

Equity:
The equity contribution by the promoters towards project facility is Rs
54.26 Lakhs which is 33.03% of the total project cost.
Debt:
The term loan proposed by the promoters is Rs 110.00 lakhs, which involves
only for the purchase of the machinery which is given as per the Annexure
Internal Rate of Return

32

The internal rate of return (IRR) of the project after adding up non-cash
expenditure items such as Depreciation, Preliminary and pre-operative
expenses written off during the years under consideration and interest on
Term Loan works out to 30.39%. This is significantly higher than the
benchmark considered for the industry.
Breakeven Analysis
The breakeven analysis indicates that the operations breakeven at about
53.92 % of capacity utilisation during the first year of operations and
49.49% in the second year of operation. The high breakeven during the first
year of operations is primarily due to reduced number of operating days.
From third year onwards, the breakeven is 44.95% and registers a declining
trend signifying the robustness of the project.
Debt Service Coverage Ratio
The average DSCR is projected to be 2.50, well above the norm of 1.5. This
indicates ability of the -project to service the debt. Hence considering the
scheme the DSCR will further strengthen.

Mode of Financing, Depreciation & Interest:

The total capital investment for the project is estimated Rs 54.26.
The debt to equity ratio for the project works out to 2.03:1. The
financing mix is presented below:
Sl.

Particulars

No.

Amount
(In.Rs
lakhs)

1.

Equity from promoters

54.26

32

2.

Term Loan

110.00

Total

164.26

11. SWOT Analysis

11.1

Strengths

Very strong promoters back ground

The unit is being setup in a place where there is an abundance
availability of raw material.
Operations department consists of experienced personnel.

32


11.2

Government is offering many ].

Weaknesses
Availability of skilled labour.

11.3

Opportunities
Government policy is in favor of the industries as per the new
industrial policy of Telangana .
VAT refund by the state government.
Capital subsidy and the power subsidy and the interest rebate.

11.4

Threats
Rapid industry growth attracts several competitors.

12. MARKETING AND THE WORKORDERS

Since the promoters are in this activity for the past 20 years , they have a very
good inland and the export market to execute , the company has already taken the
following steps for its marketing through

32

 Very strong clientele as the promoters are already in the field for the last
20 years .
One of the partners is already a reputed distributor in Andhra Pradesh and
Telangana.

13. MACHIENRY SUPPLIERS LIST

The company proposes to buy the machinery from .

1. Vijay Engineering works Kavadiguda ,Hyderabad
2. M/s Sagar Plast Machines New Delhi

32

3. M/s Sagar Machine tools - - Rampura, New Delhi

4. Hymax Industries- Hayathnagar Hyderabad.

14. CONCLUSIONS

S S INDUSTRIES proposes to set a manufacturing unit at plot no 90 sy

no 63 of 120 sq yards of1400 sft in pedda amberpet village, RR Dist

32

The following observations are made after a thorough assessment:

Promoters Strength

The promoter Mr. Srinivas Reddy Yerikalreddy , is already a director in

MANJEERA PVC PRODUCTS PVT ;TD , KPR POLYMERS PVT LTD , KPR
PIPES PVT LTD , VARSHINI POLYMERS PVT LTD , which are already in the
same kind of activity and so an established market
Raw Material Availability
The plant is located in the place where there is abundant reach of the
raw materials and utilities .

Other Financial Benefits:

Government policy is in favor of the industries as per the new industrial
policy of Telangana .
VAT refund by the state givernment.
Capital subsidy and the power subsidy and the interest rebate
It is considered that the process followed for the manufacturing
process for the project is feasible.

1. Capacity Utilization

Capacity utilization is assumed at 60% during first year of operation and

the same to go up by 60%, 65%,70%,75%,75%,75%,during the subsequent
year of operations. This assumption is justified in view of the fact that
there in an assured demand for the proposed products and the track

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record of the company shows that they could achieve 100% capacity
utilization in the past for manufacture of similar products.

7. Break Even Point (BEP)

The projects BEP for the project is at 49.49% level of installed capacity in
the second year. This factor stresses on the strength of the proposed
activity for financing the project.

8. Debt Service Coverage Ratio (DSCR)

The Average DSCR for the project is at 2.50 times, which is above the
benchmark.

9. Internal Rate of Return (IRR)

The Internal Rate of Return of the project is 30.39% and, the same is
considered reasonable, and above the benchmark level.

10. Debt Equity Ratio:

The debt equity ratio for the project is 2.03:1

11. Project Implementation

The Company proposes to complete the commissioning of the October
2015.

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Overall we are of the opinion that the proposed idea of establishing a

manufacturing unit at plot no 90 sy no 63 of 120 sq yards of1400 sft in
pedda amberpet village, RR Dist, , is technically feasible and financially
viable.

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