JAL Pvt. Ltd.

Group No 8

by

JAL is to set up a venture plan for building a manufacturing unit of ceramic water filters in or around some area of Azadpur. The company will procure land for the facility. Promoters are technically qualified, well experienced, financially capable and enjoy good reputation in the industry The proposed project will be an initiative to combat the health issues related to water consumption (primarily in rural areas). The complete detail regarding the core product manufacturing process and various associated stages are given later in the report. The Ceramic Water Filter System consists of four components: a lid, the ceramic water filter (upper piece), water storage vessel (lower piece), and a built-in spigot. The various components and their subsequent manufacturing process and usability aspect is mentioned in the report.

1. The Problem 2. Value proposition

The most pressing problem for the residents of slums and rural people is the lack of clean drinking water.

JAL will mitigate disease and illness in the urban slums of Delhi and other rural areas by selling an affordable and proven water treatment technology. The technology they will be using is ceramic water filtration.

3. Business description
JAL will manufacture Ceramic Water Filters. JAL will provide inventory management and engage in community outreach to educate customers about water quality and how to properly use the Ceramic Water Filter.

1.

Branch Name: SOL ID:

Rajiv Chowk, New Delhi 010 18.08.2011 3. ARN No. 000901461210

2.

Date of Receipt of Completed Application

4.
5.

Name of the Borrower/ Company

Address: Office:

JAL Pvt. Ltd.

Registered Office: Plot No. 10, Survey No. 160, Azadpur, New Delhi- 110009

6. 7. 8.

Nature of Business/ Products Constitution Promoters/ Directors (Names)

Ceramic Water Filter System Private Limited Company Directors: 1) 2) 3) Mr. Reetam Sinha Mr. Sumit Sharma Mr. Arvind Rathi

4)
5) 6) 9. Shareholding as on (Latest %):

Mr. Ritesh Garg

Mr. Mani Goyal Mr. Akansha Bhatnagar Holding (%)

Constituents

Directors Total

100% 100 %

10. 11.

Company/ Customer ID Internal Rating (Risk Dept.)

Fresh case Rating to be validated by the Risk Department. Branch level rating has been done and obtained

12.

External Rating

Not Applicable

(Agency name:)
13. 14. 16. Banks RM Date of Visit/Call: Status: Mr. Anshul Sachdev 12.08.2011 15. Name of the bank officials visited: Mr Rishabh Mehra (DGM)

17. 18.

Exposure to Group companies (Outstanding in Rs. Lakh): not valid Proposed Security for the Assistance:

Security

Proposed (nature, seniority, value, expected time for creation)

Asset Cover

Guarantees

Personal Guarantee of the directors of the company: 1). Mr. Reetam Singh having networth of Rs.67.72 lakh as on 31st Mar 2011 2). Mr. Sumit Sharma having networth of Rs.63.82 lakh as on 31st Mar 2011 3). Mr. Arvind Rathi having networth of Rs.60.58 lakh as on 31st Mar 2011. 4) Mr. Ritesh Garg having networth of Rs. 56.34 lakh as on 31st Mar 2011

338.25%

5) Mr. Mani Goyal having networth of Rs. 45.34 lakh as on 31st Mar 2011 6) Mr. Akansha Bhatnagar having networth of Rs. 44.45 lakh as on 31st Mar 2011

A condition is being stipulated that all the security charged to the bank will be comprehensively insured against Insurance theft, fire, earthquake, riots & other natural and non-natural calamities with agreed banks clause. The cost of insurance will be borne by the company.

Yes/No 19. Check List of enclosures 1) Analysis of Audited Financial Statements 2) Profitability & cash flow projections 3) Rating Report along with clarifications 4) Others, if any N.A.

Yes, attached

N.A. Nil

Share Holding Pattern

Name of the Shareholder Mr. Reetam Sinha Mr. Sumit Sharma Mr. Arvind Rathi Mr. Ritesh Garg Mr. Mani Goyal Mr. Akansha Bhatnagar Number of Equity Shares 6,670 6,666 6,666 6,666 6,666 6,666 Total Amount Rs.6,67000 Rs.6,66600 Rs.6,66600 Rs.6,66600 Rs.6,66600 Rs.6,66600

15 famous brands operating in water purifier industry in India

TATA (Swach) Usha Brita Kent

Orpat

Competition

Philips

Hindustan Unilever (Pure it) Kenstar

Eureka Forbes

Target market :
fourth and third tier population of the country, people living in rural areas and urban slums in and around the cities.

Market will be targeted in three different phases.

Phase 1: local markets in and around the city of Delhi. Phase 2: spread to neighboring states such as Uttar Pradesh, Bihar, Rajasthan, Haryana and Punjab. Phase 3: south India along with covering the whole country.

Phase 1: Marketing the Idea

Phase 2: Marketing the Product

organize health camps for people with the help of NGOs to organize these camps. NGOs and doctors will also demonstrate to people the benefits of drinking filtered water. pamphlets may also be added, which will help to create mass awareness. Wholesalers and retailers sell this product directly to the customers. Company plans to give these retailers and whole sellers some monetary incentives if achieve targets. A little more below the line activities might be done, engaging in offers and prizes. Also initially the product might be made available at lower prices

Particulars Land and Building

Amount 8,000,000

Plant and machinery

Furniture and interior Tempos Licensing Cost Preliminary Expenses Total

1,872,250
400,000 160,000 964,750 603,000 12,000,00 0

Setting up a manufacturing unit for manufacturing ceramic water filters at a total project cost of Rs. 120.00 lacs. Term loan of Rs. 80.00 lacs Promoters contribution of Rs. 40.00 lacs.

Particulars

Units/ Amount Days

Expert Doctors & people 3 days Posters & Banners Samples Miscellaneous Total 20

300,000 100,000 3,000 200,000 603,000

Preliminary expenses of Rs. 6.03 lacs are in the form of marketing campaign which shall be written-off in future with 10% write-off every year on written down value basis. We suggest a increase in preliminary expenses by 1.00%of loan amt. that is Rs.80000

Particulars Promoters Equity (A) Term Loans (B) Total (A+B)

Estimates (in Rs. Lacs) 40.00 80.00 120.00

% 33.33 66.77 100.00

Year

intrest 1 960,000

principle

amt O/S at the start 650,423 8,000,000

amt at the end 7,349,577

2
3 4 5 6 7 8

881,949
794,532 696,626 586,970 464,156 326,604 172,545

728,473
815,890 913,797 1,023,453 1,146,267 1,283,819 1,437,877

7,349,577
6,621,104 5,805,214 4,891,416 3,867,964 2,721,697 1,437,877

6,621,104
5,805,214 4,891,416 3,867,964 2,721,697 1,437,877 0

Annual Capacity = 42000 piece

Year Operational capacity (%) Operational capacity Utilization
1

2 85% 35700 90%

3 85% 35700 90%

4 85% 35700 90%

5 85% 35700 90%

80% 33600 90%

Production
Sales (percentage of units produced) Unit sold Selling Price/unit (inclusive of sales tax)* Sales (amount incl. of taxes) Cost price per unit** Inventory (amount) Operating expenses PBDIT

30240
80% 24192 281
6,804,000

32130
80% 30542 364
11,113,377

32130
90% 30346 418
12,698,134

32130
90% 30523 481
14,687,983

32130
90% 30364 553
16,803,072

173
1,046,016 5,230,080 2,619,936

190
274,579 5,892,381 5,495,575

209
308,575 6,481,619 6,525,089

230
277,979 7,129,781 7,836,180

253
305,515 7,842,759 9,265,828

*an increase of 15% in selling price every year and sales tax=12.5% **an increase of 10% in cost price year on year

For the year 1:

Operating Expenses Delhi Warehouse Office Electricity Labour Factory labourer Foreman Office Staff Office Manager Warehouse Caretaker Porter Carry out boys Fuel Fixed op expenses Total labour cost labour cost per unit 1,704,000 56.349206 5,000 11,000 11,000 20,000 12,000 5,000 5,000 10,000 194,000 12 12 12 12 12 12 12 12 6 2 3 1 1 2 3 360,000 264,000 396,000 240,000 144,000 120,000 180,000 120,000 3,204,000 Cost/Month 10,000 15,000 90,000 Months Required 12 12 12 1 1 TOTAL 120,000 180,000 1,080,000

Particulars sales

2012-13 6,804,000

2013-14 11,113,377

2014-15 12,698,134

2015-16 14,687,983

2016-17 16,803,072

closing stock
raw material gross profit

1,046,016
2026080 5,823,936

274,579
2367981 9,019,975

308,575
2604779.1 10,401,929

277,979
2865257.01 12,100,704

305,515
3151782.7 13,956,804

operating expenses
sales tax depreiation marketing exp write off interest on WC loan interest on term loan profit corporate tax net profit

3,204,000
756,000 243,225 60,300 86,847 960,000 513,564 154069.3486 359,495

3,524,400
1,234,820 218,903 54,270 129,841 881,949 2,975,792 892737.73 2,083,055

3,876,840
1,410,904 197,012 48,843 147,582 794,532 3,926,216 1177864.66 2,748,351

4,264,524
1,631,998 177,311 43,959 169,329 696,626 5,116,958 1535087.417 3,581,871

4,690,976
1,867,008 159,580 39,563 192,724 586,970 6,419,983 1925995 4,493,988

PBDIT/Sales % net profit/sales deb /equity ratio

38.51% 5.28% 1.84

49.45% 18.74% 1.66

51.39% 21.64% 1.45

53.35% 24.39% 1.22

55.14% 26.75% 0.97

net profit
5,000,000

4,500,000
4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 net profit

1,000,000
500,000 0 1 2 3 4 5

deb /equity ratio

2.00

1.80
1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 1 2 3 4 5 deb /equity ratio

PBDIT/Sales %
60.00% 50.00%

40.00%
30.00% 20.00% 10.00% 0.00% PBDIT/Sales %

net profit/sales
30.00% 25.00%
20.00% 15.00% 10.00% 5.00% 0.00% net profit/sales

25000000

20000000

15000000

TOL TOL TNW tol/tnw

10000000

5000000

0 1 2 3 4 5

TOL/TNW
1.6 1.4 1.2

1
0.8 0.6 0.4 0.2 0 1 2 3 4 5 tol/tnw

Particulars Net Profit Interest TL Total A

1 420,288 on 960,000

2 218,903 881,949

3 197,012 794,532

4 3,700,401 177,311 696,626 4,574,337 696,626 913797.11

5 4,628,895 159,580 586,970 5,375,445 586,970 1023452.7 6 1,610,422. 73 3.34

2,173,944 2,851,659

Depreciation 243,225

1,623,513 3,274,796 3,843,203

Interest on 960,000 881,949 794,532 TL Repayment 650422.73 728473.46 815890.27 of TL Total B DSCR Avg. DSCR

1,610,422. 1,610,422. 1,610,422.7 1,610,422.73 73 73 3 1.01 2.03 2.39 2.84 2.32

Particulars
Net Profit Interest TL Total A

1
399,273 on 960,000

Scenario 1: Net Profit is reduced by 5% 2 3 4 2,065,247 2,709,076 218,903 881,949 197,012 794,532 3,515,381 177,311 696,626 4,389,317 696,626 913797.11

5
4,397,450 159,580 586,970 5,144,000 586,970 1023452.7 6 1,610,422. 73 3.19

Depreciation 243,225

1,602,498 3,166,098 3,700,620

Interest on 960,000 881,949 794,532 TL Repayment 650422.73 728473.46 815890.27 of TL Total B DSCR Avg. DSCR

1,610,422. 1,610,422. 1,610,422.7 1,610,422.73 73 73 3 1.00 1.97 2.30 2.73 2.24

Particulars Net Profit Depreciation Interest on TL Total A Interest on TL Repayment of TL

1 65,355 243,225 1,040,000 1,348,580 1,040,000 197,934

2 1,601,463 218,903 1,014,269 2,834,634 1,014,269 223,666

3 2,170,455 197,012 985,192 3,352,659 985,192 252,742

4 2,888,794 177,311 952,336 4,018,441 952,336 285,599

5 3,676,114 159,580 915,208 4,750,902 915,208 322,727

Total B
DSCR Avg. DSCR

1,237,934
1.09

1,237,934
2.29

1,237,934
2.71 2.25

1,237,934
3.25

1,237,934
3.84

1.

Amount

RTL: Rs 80.00 lakh. (Rupees Seventy Five lakh only)

2.
3. 4. 5. 6.

Purpose
Margin Tenor Validity Rate of Interest (net of interest tax, other levies / duties)

Project finance
33.33% i.e. Rs. 40 lakh to be brought by the borrower. Tenor: 8 years 3 months from the date of sanction. 12% p.a. (BPLR presently at 13.5% p.a) subject to change in BPLR announced by Syndicate Bank Ltd. from time to time. The interest shall be payable on monthly basis on the last day of the month.

7.

Interest Reset option

After expiry of 1 year from the date of first disbursement of loan, and thereafter every year by

giving forty five (45) days prior notice to the company.

8. Up - front fee 1.00% of the financial assistance (plus applicable service tax and educational cess thereon) shall be payable by the company. The up-front fee shall be non-refundable. 9. 10. Repayment Put/ Call option 8 Annual installments N.A.

Term sheet common for Term Loan

1. Further Interest In the event of default in payment of interest on the financial assistance and all other monies on respective due dates, such defaulted amount shall carry interest / further interest at the rate of interest as mentioned at Rate of Interest para above, computed from the respective due dates and shall become payable upon the footing of compound interest with monthly rests.

2.

Additional Interest

Disbursements made pending creation of final security as stipulated herein below, shall carry additional interest @1% per annum (plus interest tax, if applicable) from the date of first disbursement of the financial assistance till creation of such security.

3.

Liquidated Damages

In case of default in payment of any instalment of principal amount of the financial assistance, interest thereon or other monies (except liquidated damages) becoming due on their respective due dates, you shall pay on such defaulted amounts, liquidated damages at the rate of 2% per annum for the period of default. Liquidated damages shall be payable on demand and in the absence of any such demand on the next interest payment date falling after the date of default.

4.

Legal Fees and other Charges

Legal fee (as may be advised by Legal Department of IDBI Bank Ltd.) plus other charges (net of taxes, other levies / duties if any) on actual basis shall be paid/reimbursed.

5.

Primary Security

1. Exclusive first charge in the form of equitable mortgage on Plot No. 10, Survey No. 160, Azadpur on which the project is proposed. 2. Exclusive first charge on all the current assets, fixed assets of the company, movable and immovable both present and future having value of the personal assets of promoter having Rs. 150 lakhs as per the project cost given.

6.

Collateral security

1st mortgage charge on commercial Land situated at Plot No. 13, Survey No. Shantidham Road, G.T.Karnal Road, New Delhi- 110009 having value of Rs. 85.00 lakh (as indicated by Directors).

7.

Personal Guarantee

Personal Guarantee of the directors of the company: 1). Mr. Reetam Singh having networth of Rs.67.72 lakh as on 31st Mar 2011 2). Mr. Sumit Sharma having networth of Rs.63.82 lakh as on 31st Mar 2011 3). Mr. Arvind Rathi having networth of Rs.60.58 lakh as on 31st Mar 2011. 4) Mr. Ritesh Garg having networth of Rs. 56.34 lakh as on 31st Mar 2011 5) Mr. Mani Goyal having networth of Rs. 45.34 lakh as on 31st Mar 2011 6) Mr. Akansha Bhatnagar having networth of Rs. 44.45 lakh as on 31st Mar 2011

8.

Pre payment

In case the rate of interest levied on reset is not acceptable to the company, the financial assistance may be prepaid, without payment of any prepayment premium, on the Reset Dates. However, the outstanding principal amount of the financial assistance shall not be prepaid on any other date other than Reset Dates, except after obtaining the prior approval of Syndicate Bank Ltd. (which may be granted subject to such conditions as Syndicate Bank Ltd. may deem fit) including payment of premia @ 1% for such prepayment.

9. 10. 11. 12.

Financial covenants Documents Other Conditions Insurance Asset to be insured All movables and Immovable asset of the company

The company shall accept Banks standard financial covenants. As per Banks Norm/ Guidelines. As mentioned below.

Risks to be covered Comprehensive Insurance- Standard risks including fire, natural calamities, civil commotion, burglary etc. with suitable bank clause

Any Other Loan or Debenture issued by the company stands subordinated to the payment of this loan.

Inspection Frequency Location of unit/s Proposed frequency

Registered Office: Plot No. 10, Survey No. 160, Annually Azadpur, New Delhi- 110009.

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