TECHNO ECONOMIC FEASIBILITY REPORT

M/S SHAH PULP AND PAPER MILLS LTD

AT VAPI, TALUKA PARDI
DISTRICT VALSAD

PREPARED FOR

STATE BANK OF INDIA

MID CORPORATE BRANCH
VAPI

GUJARAT INDUSTRIAL AND TECHNICAL

CONSULTANCY ORGANISATION LIMITED
"GITCO HOUSE", OPP. SARDAR PATEL STADIUM
NAVRANGPURA, AHMEDABAD 380 009

MARCH 2013

INDEX
SR.
I
II
III
IV
V
VI
VII
VIII
I
II
III
IV
V
VI
VII
VIII
IX
X
XI
XII
XIII
XIV
XV

CONTENTS
CHAPTERS
INTRODUCTION
BACKGROUND OF M/S SPPML
PRODUCTS OVER VIEW
MARKET ASPECTS
TECHNICAL FEASIBILITY
PROJECT COST AND MEANS OF FINANCE
ECONOMIC VIABILITY
OBSERVATIONS AND CONCLUSIONS
ANNEXURES
COMPARATIVE PROFIT AND LOSS ACCOUNTS
COMPARATIVE INCOME/EXPENDITURE PER MT OUTPUT
COMPARATIVE SALES REALISATION, RMC PER UNIT
COMPARATIVE BALANCE SHEETS
LIST OF PROPOSED PLANT AND MACHINERY
PROJECTED WORKING CAPITAL REQUIREMENTS
PROJECTED PROFITABILITY
BREAK EVEN ANALYSIS
PROJECTED CASH FLOW STATEMENT
PROJECTED BALANCE SHEET
SENSITIVITY ANALYSIS
BASIS OF PROJECTED PERFORMANCE
INTEREST CALCULATIONS AND REPAYMENT OF LOANS
DEPRECIATION PROVIIONS
TAXATION PROVISION

PAGE
1
3
12
14
22
42
45
51
8
9
10
11
40
54
56
58
60
62
64
68
72
75
78

ABBREVIATIONS
MD
CD
CAGR
CPPRI
MT
MTPA
WC
WF
HC
HD
SR
OCC
NDK
WP
ETP
MW
TPH
GEB
KWH
VFD
KVA
CETP
ESP
ACB

Machine Direction
Cross Direction
Compound Annual Growth Rate
Central Pulp & Paper Research Institute
Metric Tonne
Metric Tonne Per Annum
Wood Containing Papers
Wood Free Papers
High Consistency
High Density
Side Reel
Old Corrugated Containers Waste Paper
Non-Deinking
Waste Paper
Effluent Treatment Plant
Mega Watt
Tonne Per Hour
Gujarat Electricity Board
Kilo-Watt Hour
Visco Fluid Disc
Kilo Volt Ampere
Central Effluent Treatment Plant
Electrostatic Precipitator
Air Circuit Breaker

I - INTRODUCTION

1.1

Background
M/s Shah Pulp and Paper Mill Ltd. (SPPML) is manufacturing B Grade News
Print from Waste Paper. SPPML manufacturing unit is located at GIDC, Vapi,
District Valsad. The State Bank of India (SBI), Mid Corporate Branch, Vapi
has extended financial assistance in the form of Term Loan and Working
Capital Loan to SPPML.

1.2

The Proposal of SPPML

In view of the market potentials, SPPML has planned expansion

project to enhance the production capacity of Newsprint-A Grade by
150 TPD or Writing and Printing Paper by 180 TPD. SPPML has
proposed mix of both the products.

The project cost of proposed expansion of SPPML is appraised at Rs.

17.42 Crs. in Phase-I and Rs. 18.51 Crs. in Phase-II. SPPML has
already received financial assistance in the form of Term Loan of Rs.
11.00 Crs. for Phase-I, and sought financial assistance in the form of
Term Loan Rs. 13.00 Crs. in Phase-II.
SPPML has planned to complete Phase-I by April 2013 and Phase-II by
June 2013.
1.3

Scope of Work
The unit has referred this proposal to GITCO for Techno-Economic Viability
appraisal of the project. GITCO has appraised the techno-economic viability
of the project in terms of product overview, market aspects, technical
feasibility, financial viability and other related aspects.

1.3

Methodology of Study

2
The report has been prepared on the basis of the relevant details and
information of the expansion project furnished by the unit management,
GITCO data base including internet surfing.
GITCO has studied background of SPPML, its past performance for the years
2008-09, 2009-10, 2010-11, 2011-12 and looked at operating performance
during date 01-04-2012 to date 31-12-2012. GITCO has studied industry
outlook Newsprint, and Writing and Printing Paper on the basis of published
data. GITCO studied the technical aspects and financial aspects of proposal by
SPPML.
GITCO team visited SPPML during Dt. 02nd to 06th March 2013 for look at the
manufacturing facilities and carried out discussions regarding market,
technical and financial aspects pertaining to the proposal and projected
operations with the technical and management team of SPPML.
The report presents analysis of background of SPPML, market aspects of
Newsprint and Writing & Printing Paper industry, market prospects of
SPPML, technical feasibility, proposed project cost and means of finance,
financial viability, observations and conclusions in view of proposed
expansion Project.

II - BACKGROUND OF M/S SPPML

2.1

Introduction

2.1.1

M/s Shah Pulp & Paper Mills Ltd. (SPPML)

SPPML is a Public Limited Company first incorporated as a private limited
Company in November 1993, vide certificate of incorporation number 1174945 of 1993 dated 5th November 1993 issued by the Registrar of
Companies, Maharashtra. The company was subsequently converted into a
public limited company vide certificate of change of name dated 15th March,
1995 issued by ROC, Maharashtra. The company is formed with an object to
carry on the business of manufacturers and dealers of Newsprint. SPPML is
having its registered office at B/202, Angeline Apartment, Sarojini Road, Ville
Parle (W), Mumbai 400056.
SPPML set up B Grade Newsprint manufacturing unit initially with an
installed capacity of 16500 MTPA. In view of market potentials, in due course
of time, SPPML has increased installed capacity up to 46500 MTPA at present.

2.1.2

M/s Shah Paper Mills Ltd. (SPML)

The promoters of SPPML are associated with SPML. SPML is a closely held
public limited company having its registered office at B/202, Angeline
Apartment, Sarojini Road, Ville Parle (W), Mumbai 400056. The company
was incorporated on 27th July 1990 in the name of M/s Shah Paper Mills Pvt.
Ltd, which was converted from private limited company to public limited
company on 26th September 1994. SPML has its Works, consisting of three
units, at GIDC industrial Estate, Vapi.

SPML is currently engaged in

manufacturing of Kraft Paper, Writing and Printing Paper, Newsprint and of

various specifications.

4
2.2

Performance of SPPML
Performance of SPPML is analysed in terms of Capacity Utilisation,
Comparative Profit and Loss Accounts, Comparative Income and Expenditure
per MT of Output, Comparative Sales Realisation and RMC Per unit and
Comparative Balance Sheets are given at Annexure I, II, III and IV. Capacity
utilisation and summarised performance of SPPML is given in Table 2.1 and
2.2.
Table 2.1
Capacity Utilisation of SPPML
Sr.
1
2
3
*

Particulars
2008-09 2009-10 2010-11 2011-12 2012-13
46500
Installed Capacity (MT)
36000
36000
36000
36000
37000
Production (MT)
32749
28707
35581 * 33875
80
Capacity Utilisation (%)
91
80
99
94
Inclusive of Job Work: 4101 MT

Table 2.2
Summarised Performance of SPPML
Particulars

Profit & Loss Accounts

Income
Gross Profit
EBDIT
Cash Profit
Net Profit/(Loss)
NP Transferred to B/S

2008-09

2009-10

Rs. Crs

93.23
14.30
8.30
4.45
2.35
1.71

100
15.34
8.90
4.77
2.52
1.83
31
1.68
0.32
3.23
5.15
1.31
1.96

Rs. Crs

2010-11
%

Rs. Crs

2011-12
%

Rs. Crs

82.26
100
13.19 16.03
7.93 9.64
3.99 4.85
1.81 2.20
1.37 1.67

92.52
100
13.25 14.32
8.36 9.04
4.37 4.72
2.10 2.27
1.51 1.63

99.01
14.20
9.76
4.89
2.73
1.82

100
14.34
9.86
4.94
2.76
1.84

32
1.59
0.33
3.25
5.40
1.31
1.93

33
1.70
0.23
4.48
10.09
1.22
1.87

Balance Sheets
Net Worth (Rs. Crs.) *
Total Debts/Net Worth*
Debt/Equity *
FA/Total Debts
FA/Term Loans
CA/CL
Net CA/WC Loan
* Without Revaluation Reserve

35
1.40
0.15
6.50
106.81
1.22
1.67

5
It can be seen from the summary of profit and loss accounts, the turnover and
profitability of SPPML has been increasing and operations are consistently
profitable. The summary of balance sheets of SPPML reveals that the financial
ratios are satisfactory.
2.3

The Promoters and The Management

SPML is promoted by Shri Amritlal Khimji Shah, Shri Mahendra Hirji Shah,
and their family members and relatives, as Shah Group, with an intention of
establishing business in paper and paper related products. Shah Group has vast
and rich experience of more than 30 years in field of paper and its trade.
Shri AK Shah has the vision behind the Groups venture while Shri MH Shah
has been vastly instrumental in the commercial development and effective
management of the Groups business.
The following is the list of directors and key personnel of SPPML with their
qualification and experience, job profile and association in other companies.
List of Directors and Key Personnel of SPPML
Name/
Designation

Age

Qualification
/Experience

Job Profile

Director
-ship

AK Shah
Chairman
MH Shah
Mg. Director
AZ Shah
Exe. Director
MK Maru
Exe. Director
Hemant Modi
Exe. Director
Girish Shetty
Exe. Director
HT Shah
Exe. Director
Bhanu Pratap
Sing

69

B.Com
/29 Years
B. Com.
/27 Years
B. Com.
/23 Years
B. Com.
/21 Years
B. Com. MBA,
EMBA /23 Years
B.Com. Inter
CA/14 Years
B.Com
/45 Years
BE-Mech.
/35 years

Govt. Liaison and

Overall Management
Overall Finance, Marketing
Purchase, Administration
Production, Purchase, Dispatch,
Marketing of Unit I & II
Payment Collection, Back
Office Administration
Handling Finance, Commercial
and Projects of Shah Group
Handling Accounts
and Taxation of all units
Looking after Administration

SPML
SCPL
SPML
SCPL
SPML
SFSL
SPML

54
49
47
49
41
78
57

SPML
SPML

Looking after Production and

Plant entire Group

The promoters are well experienced and conversant with paper industry. They
are capable of managing implementation of proposed modification project.

6
Brief information of associate companies, where in the promoters have
directorship, is given as follows.
Name of the Unit/
Company
Constitution
Name of Directors/
Partners
Activity
Date of establishment
Financial Indicator
Sales/Income (Rs. Crs)
PBT
PBT/Sales %
PUC
TNW
TOL/TNW
Current Ratio
Banking Arrangement
Name of the Bank
FBL
NFBL
Total

2.4

Shah Paper Mills

Ltd. (SPML)
Ltd. Company
Mahendra H Shah
Amritlal K Shah
Ashok Z Shah
Shailendra R. Shah
Mfg. of Kraft paper,
Writing & Printing
Paper, Newsprint
27-07-1990
2010 2011 2012
288
335
373
16.46 19.60 19.04
5.7% 5.8% 5.1%
16.25 16.25 16.25
84
98
112
2.04 1.074
1.73
1.45
1.49
1.32

Shah Containers
Pvt. Ltd. (SCPL)
Pvt. Ltd. Company
Mahendra H Shah
Amritlal K Shah
Deepen K Gosrani
Divyesh A Shah
Mfg. of Corrugated
Boxes

SBI, Vapi IT Branch

64.96
54.00
118.96

SBI, Vapi IT Branch

1.60
0.00
1.60

2010
10.68
0.66
6%
0.32
2.65
1.18
1.43

18.03.2004
2011
2012
12.30 12.27
0.64
0.57
5.2%
4.6%
0.32
0.32
3.17
3.43
0.97
0.77
1.60
1.75

Shah Financial
Services Ltd. (SFSL)
NBFC- Ltd. Company
Mahendra H Shah
Amritlal K Shah
Ashok Z Shah
Shailendra R. Shah
Financial Services/
Investment
05-08-1996
2010
2011
0.43
0.31
0.07
0.03
--5.51
5.51
9.46
9.49
0.28
0.32
1.23
1.21
---------

Government Registrations/Consent/Approvals
SPPML has obtained necessary government registrations/consent/approvals as
listed below.
Company Registration
SIA Registration
Central Excise Registration
Importer Exporter Code
VAT Registration
CST Registration
Factory License Registration
GPCB Consent Order
Agreement with DGVCL

No. 11-74945, Dt. 05-11-1993

No. 653/SIA/IMO/2012/21-03-2012
No. AAACS6820KXMODI
No. 0395058627, Dt. 01-02-1996
No. 24507013740, Dt. 01-07-2002
No. 24750701374, Dt. 15-11-1995
No. 841/2103/1997, Dt. 15-11-1995
No. 30859/24-09-2008
For 300 KVA additional Power

2012
NA
NA
NA
NA
NA
NA
NA

7
2.5

Observations
The turnover and profitability of SPPML has been increasing and
operations are consistently profitable. The balance sheets of SPPML reveal
that the financial ratios are satisfactory.
The promoters of SPPML are well experienced and conversant with paper
industry Viz Newsprint/Writing & Printing Paper. They are capable of
managing implementation of expansion project and successful operations
thereafter.

8
ANNEXURE I
SPPML: COMPARATIVE PROFIT AND LOSS ACCOUNTS
Particulars

2008-09
Rs. Crs

Income
Gross Sales
Other Income
Stock of FG
Total
Expenditure
Raw Materials
Stores & Spares
Packing Material
Power and Fuel
Employees Cost
Repairs and Maint.
Labour Charges
Other Mfg. Expenses
Excise Duty & Cess
Resold Goods Cost
Total
Gross Profit
Directors Remuneration
Administrative Exps.
Selling and Distn. Exps.
ST/CST
EBDIT
Financial Charges
Cash Profit
Depreciation
Net Profit/(Loss)
Tax Adjustments
NP Transferred to B/S

2009-10
%

Rs. Crs

2010-11
%

Rs. Crs

2011-12
%

Rs. Crs

92.21 98.91
0.35 0.38
0.67 0.72
93.23 100

82.41 100.2
0.82 1.00
-0.97 -1.18
82.26 100

91.56 98.96
0.98 1.06
-0.03 -0.03
92.52 100

98.51
0.52
-0.02
99.01

99.50
0.53
-0.02
100

58.42
1.47
0.68
9.56
1.65
0.58
0.29
0.81
0.12
5.35
78.93
14.30
0.27
1.15
2.28
2.30
8.30
3.85
4.45
2.10
2.35
0.64
1.71

42.40
2.28
0.79
11.12
1.86
0.57
0.26
1.05
0.08
8.66
69.07
13.19
0.28
1.07
2.40
1.51
7.93
3.94
3.99
2.18
1.81
0.44
1.37

60.09
1.35
0.94
11.74
2.15
0.47
0.26
1.72
0.11
0.44
79.27
13.25
0.30
1.27
1.33
1.99
8.36
3.99
4.37
2.27
2.10
0.59
1.51

56.87
2.26
1.00
12.45
2.22
0.34
0.41
2.06
0.16
7.04
84.81
14.20
0.34
1.11
1.06
1.93
9.76
4.87
4.89
2.16
2.73
0.91
1.82

57.44
2.28
1.01
12.57
2.24
0.34
0.41
2.08
0.16
7.11
85.66
14.34
0.34
1.12
1.07
1.95
9.86
4.92
4.94
2.18
2.76
0.92
1.84

62.66
1.577
0.73
10.25
1.77
0.62
0.31
0.87
0.13
0.00
84.66
15.34
0.29
1.23
2.45
2.47
8.90
4.13
4.77
2.25
2.52
0.69
1.83

51.54
2.77
0.96
13.52
2.26
0.69
0.32
1.28
0.10
0.00
83.97
16.03
0.34
1.30
2.92
1.84
9.64
4.79
4.85
2.65
2.20
0.53
1.67

64.95
1.46
1.02
12.69
2.32
0.51
0.28
1.86
0.12
0.48
85.68
14.32
0.32
1.37
1.44
2.15
9.04
4.31
4.72
2.45
2.27
0.64
1.63

9
ANNEXURE II
SPPML: COMPARATIVE INCOME/EXPENDITURE PER MT OF OUTPUT

Particulars
Income
Expenditure
Raw Materials
Stores & Spares
Packing Material
Power and Fuel
Employees Cost
Repairs and Maint.
Labour Charges
Other Mfg. Expenses
Excise Duty & Cess
Resold Goods Cost
Total
Gross Profit
Directors Remuneration
Administrative Exps.
Selling and Distn. Exps.
ST/CST
EBDIT
Financial Charges
Cash Profit
Depreciation
Net Profit/(Loss)
Adjustments
NP Transferred to B/S

(Fig. in Rs.)
2008-09 2009-10 2010-11 2011-12
28468
34835
23119
33254
17839
449
208
2919
504
177
89
247
37
1634
24101
4367
82
351
696
702
2534
1176
1359
641
718
195
522

21828
549
254
3572
617
217
108
303
45
0
29492
5343
101
430
852
859
3101
1439
1663
785
878
239
639

11916
641
222
3125
523
160
73
295
22
2434
19412
3707
79
301
675
424
2229
1107
1121
613
509
124
385

19101
759
336
4182
746
114
138
692
54
2364
28485
4769
114
373
356
648
3278
1636
1642
725
917
306
611

10
ANNEXURE III
SPPML: COMPARATIVE SALES REALISATION, RMC PER UNIT
Particulars
2008-09 2009-10 2010-11
Installed Capacity (MT)
36000
36000
36000
Production (MT)
32749
28707
35581
Capacity Utilisation
90.97
79.74
98.84
Sales Turnover
Rs.in Lacs
8640
6624
9109
MT
32506
29094
35628
Rs./MT
26580
22768
25567
Raw Materials
Waste Paper
Rs.in Lacs
4833
3536
5386
MT
55311
37465
45241
Rs./MT
8738
9438
11905
Chemicals
Rs.in Lacs
182
154
201
Rs./ MT Output
556
536
565
Steam Coal
Rs.in Lacs
826
521
422
MT
25150
16730
13164
Rs./MT
3284
2072
3206
Rs./ MT Output
2522
1815
1186
Input/Output
Waste Paper
1.69
1.31
1.27
Steam Coal
0.77
0.58
0.37
Sales Realisation/MT
26580
22768
25567
Excise Duty/MT
0
0
0
ST-CST/MT
7
5
6
Net Sales Realisation/MT
26572
22762
25561
RMC/MT
17836
14669
16888
RMC/SR (%)
67
64
66
RMC/NSR (%)
67
64
66
* Inclusive of Job Work: 4101 MT

2011-12
36000
* 33875
94.10
9849
33910
29045

4879
38436
12694
235
694
573
13974
4100
1692
1.29
0.41
29045
54
569
28422
19101
66
67

11
ANNEXURE IV
SPPML: COMPARATIVE BALANCE SHEETS
Particulars
Liabilities
Share Capital
Reserves & Surplus
Revaluation Reserve
Long Term Loans
WC Loans
Unsecured Loans
Current Liabilities
Def. Tax Liabilities
Total
Assets
Net Block
Capital WIP
Investments
Current Assets
Miscellaneous Exp.
Contingent Liabilities
Total
Financial Ratios
Net Worth (Rs. Crs.) *
Total Debts/Net Worth*
Debt/Equity *
FA/Total Debts
FA/Term Loans
CA/CL
Net CA/WC Loan

2008-09

2009-10

2010-11

2011-12

Rs. Crs

Rs. Crs

Rs. Crs

Rs. Crs

11.00
14.61
4.23
6.18
13.19
3.68
28.07
5.27
86.23

12.76
16.94
4.905
7.17
15.3
4.27
32.55
6.11
100

11.00
16.00
3.98
6.28
13.25
4.14
27.01
5.30
86.96

12.65
18.40
4.58
7.22
15.24
4.76
31.06
6.09
100

11.00
17.50
3.74
3.36
12.34
4.21
36.96
5.24
94.35

11.66
18.55
3.96
3.56
13.08
4.46
39.17
5.55
100

11.00
19.41
3.25
0.32
14.16
4.94
29.86
5.15
88.09

12.49
22.03
3.69
0.36
16.07
5.61
33.90
5.85
100

31.82
37
0.00 0.00
0.05 0.06
53.98 62.60
0.38 0.44
0.00 0.00
86.23 100

33.91 38.99
0.00 0.00
0.05 0.06
52.62 60.51
0.38 0.44
0.00 0.00
86.96 100

33.91 35.94
0.00 0.00
0.05 0.05
60.02 63.61
0.37 0.39
0.00 0.00
94.35 100

33.47 38.00
0.71 0.81
0.04 0.05
53.51 60.74
0.36 0.41
88.09 100
11.00 12.49

31
1.68
0.32
3.23
5.15
1.31
1.96

32
1.59
0.33
3.25
5.40
1.31
1.93

33
1.70
0.23
4.48
10.09
1.22
1.87

35
1.40
0.15
6.50
106.81
1.22
1.67

12

III

3.1

PRODUCTS OVERVIEW

Proposed Product
The Shah Group is well established in paper industry for more than 25 years
now. SPPML is presently manufacturing B Grade Newsprint. SPPML has
proposed expansion in its existing set up to manufacture Newsprint-A Grade
and Writing and Printing Paper. The specifications of Newsprint and Writing
and Printing Paper are given in Table 3.1 and Table 3.2

Table3.1
SPPML Newsprint-A Grade: Specifications
Sr.
1
2
3
4
5
6
7
8
9

Particulars
Grammage
Thickness
Bulk
Brightness
Opacity
Breaking Length (meter)
Tear Factor
Porosity
Ash

Specification Range
45 G/m2
70 micron
1.53 cc/gm
62+ % ISO
93 % ISO
4500 MD / 2300 CD
56 MD / 67 CD
350 MI/min
4%

Table 3.2
SPPML Writing & Printing Paper: Specifications
Sr.
1
2
3
4
5
6
7
8
9
10
11

Writing & Printing Paper

Cobb
Smoothness
GSM
Breaking Length (MD in Min)
Breaking Length (CD in Min)
Tear Factor
Ash
Opacity %
Brightness (IS)
Moisture Content %
Caliper mm. Max.
Bulk cm3/g max

Specification Range
22/25 GMS
150/200 MI/Min
55 +/- (55 to 70 GSM)
4000
1600
40 MD/45 CD
16%
More than 80%
> 72%
6%
88/112
1.6

13
The proposed Writing & Printing Paper would have to fulfill superior
brightness, and less moisture content comparable to the best paper available in
domestic market.
3.2

Product Applications
Newsprints are used in printing of Newspapers and Magazines. The Writing
and Printing paper is used in printing of Books, Note Books, Periodicals and
Magazines, Photocopy paper Computer and Office Stationary and as base
paper for coated papers. The quality requirement of writing and printing paper
would depend on its applications. Superior paper with good opacity and
brightness would find application in all the office stationary and in paper used
for high quality printing.

3.3

Proposed Product Mix

After expansion project SPPML would be manufacturing the Newsprint-A
Grade by 150 TPD Or Writing and Printing Paper by 180 TPD. The proposed
product mix is given in Table 3.3.
Table 3.3
Proposed Product Mix
Products/ Year
News Print-A Grade
Writing & Printing Paper
Total

3.4

13-14 14-15 15-16 16-17

36750 36750 36750 36750
18900 18900 18900 18900
55650 55650 55650 55650

Observations

SPPML is manufacturing Newsprint-B Grade targeted to cater to the

demand from publication segment viz. News paper and Magazines.
Now, SPPML has proposed to manufacture Newsprint-A Grade and
Writing and Printing Paper after expansion.

Newsprint and Writing & Printing Paper manufacturing, the

parameters to be maintained are more or less stable as its
application/usage is specific.

14

IV

4.1
4.1.1

MARKET ASPECTS

Indian Paper Industry

Overview
The Indian Paper Industry accounts for about 1.6% of the world production of
paper and paperboard. The estimated turnover of the industry is Rs 25,000
crore in 2011-12. Indian paper industry reached 11.5 million tones from 9.18
million tones to 2011-12 from 2009-10 at the rate of 8% per annum, according
to ASSOCHAM. The industry provides employment to more than 0.12 million
people directly and 0.34 million people indirectly.
The demand of paper has been hovering around 8% for some time. During the
period 2002-07, newsprint registered a growth of 13%, Writing & Printing,
Containerboard, Carton board and others registered growth of 5%, 11%, 9%
and 1% respectively. So far, the growth in paper industry has mirrored the
growth in GDP and has grown on an average 6% to 7% over the last few
years.
India is the fastest growing market for paper globally and it presents an
exciting scenario; paper consumption is poised for a big leap forward in sync
with the economic growth and is estimated to touch 13.95 million tons by
2015-16. The futuristic view is that growth in paper consumption would be in
multiples of GDP and hence an increase in consumption by one kg per capita
would lead to an increase in demand of 1 million tons. As per industry
estimates paper production is likely to grow at a CAGR of 8.4% while paper
consumption will grow at a CAGR of 9% till 2012-13.
The per capita paper consumption increased to 9.18 kg on 2009-10 as
compared to 8.3 kg during 2008-09. Still, the figure is low (9.2 kg) compared
to 42 kg in China and 350 kg in developed countries.

15
India produces many varieties of papers, namely, printing and writing paper,
packaging paper, coated paper and some speciality paper. Varieties under
printing and writing paper are creame wove paper, super printing paper,
maplitho paper (non-surface and surface size), copier paper, bond paper and
coating base paper and others. The varieties under packaging paper are kraft
paper, boards, poster paper and others. The other varieties under coated paper
are art paper/board, chromo paper/board and others. There are approximately
600 paper mills in India, of which twelve are major players.
4.1.2

Key Factors affecting Indian Paper Industry

External Driving Force

GDP growth and increased standard of living

Development of export-led industry

Growth potential in India and South-East Asia

Development of human capital

Legislation and government regulations

Access to capital

Technology and process innovations driving efficiency and scale of

production equipment
Change in Industry Structure

Industry size, consolidation and investment capacity

access to raw material, recycled fibre, non-wood fibre and

wood resources

Minimum efficient scale and asset quality

Quality improvements and standards

Environmental considerations and standards

Trade of fibre, pulp and paper products

Change in Competitive Conduct

Foreign investments and the attractiveness of Indian markets

Modernization of existing assets and capital needs

Development of pulp and paper industry in South East Asia

Consolidation and acquisitions as growth vehicle

Partnerships and alliances

Management of scale and scope through networked production

Change in Industry Performance

Global competitiveness

Improvement of profitability

Increased capital intensity

Tax incentives

Shareholder returns

16

4.1.3

Job creation opportunities

Improvement of paper and related products trade balance

Current Situation and Future Goal
Current Situation
Enormous growth potential of Indian market
Industry structure - with small and medium size mills
Type and availability of fibre raw materials
Infrastructural problems
High costs of financing the projects
Productivity and efficiency of the mills need to be

improved
Future Goal

4.1.4

Market potential in India and potential export markets

Raw materials available for paper industry in India
Competitiveness of the industry
Utilisation of global and proprietary technologies
Management practices
Government regulations and guidance

SWOT Analysis of Indian paper Industry

Competitive Strengths

Large and growing domestic paper market

Some competitive PMs in newsprint, carton board and coated wood
free
Relatively low personnel and fuel costs (although personnel
productivity is lower than in many competing countries and the quality
of coal varies)
Up to date research institute (CPPRI)
Know how in non wood pulping and applications
Well developed printing industry
Local market knowledge
English language

Competitive Weaknesses
Fibre shortage, especially virgin wood fibre
Small and fragmented industry structure, many non competitive
mills/machines (both quality and cost wise) + fragmented market
Highly skilled and job specific manpower is not available
Quality and availability of some of the domestic pigments and chemicals
Environmental problems of most of the small pulp mills and also some big
mills
Low level of internationalisation of the industry
Low standard of converting industry

17
Infrastructure, transportation
High cost of raw material including wood, non wood and waste paper
High energy costs (from grid)
High cost of financing
Lack of local capability for design and development and machinery
manufacture + process control systems
Obsolence of technology, quality targets are not met by many mills (eg.
newsprint produced by small mills)
Impact of high local taxes (sales tax, entry tax, etc.) on inputs of paper
Low input into mill level R&D

Competitive Opportunities
Enormous domestic market potential
Modern, world scale paper machine would be cost competitive in most
grades
Forest plantation potential
Development of the industry cluster on broader basis (including paper
industry and related industries: machinery+chemicals) based on FDI
and use of local personnel
Integrates of combined wood and agro based papermaking
Market DIP mill
Increasing use of carbonates and fillers
Government literacy program increasing demand for printing/writing
papers
WTO: foreign participation/FDI would speed up restructuring
Low labor costs (allow eg. cost effective sorting of imported mixed waste)
Back haul possibilities for containers to lower waste paper transport costs
Export potential
Competitive Threats

Unprepared mills for international competition (WTO entry) both on

price and quality

Decline in capacity due to environmental pressures

Decline in capacity as some of the segments/group of mills are unable

to compete at national and international levels with respect to quality
and cost of products.

Short term planning for raw material

Fragmented market makes entry for a world scale unit difficult

Delayed forest plantations, deficit of wood fibres

Lack of international perspective in project development and

implementation

Capacity of announced projects is small considering market growth

will speed up import growth

Weakening competitiveness of domestic industry due to shortage and

cost of basic inputs

Perceived difficulty of operating environment reduces the speed of FDI

4.2

Demand-Supply Scenario Indian Paper Industry

18
Total demand growth in 2000-2015 is expected to reach 6.3 million tons by
2015 and supply is estimated to increase by about 5.6 million during the same
period.
Table 4.1
Demand & Supply Scenario
(Fig. in 1000 Tones)
Types of Papers/Years
Newsprint
WC Printing/Writing
WF Printing/Writing
Tissue
Containerboard
Carton boards
Others
Total Base Scenario
Total Conservative
4.3

2010 2015 P
1552E 1937
1040 1390
-512 -547
80
99

2020 P

Demand
2380
Supply
1800
Net trade
-580
Demand
110
Supply
Net trade
-80
-99
-110
Demand
2870 3880
5215
Supply
2580 3600
4600
Net trade
-290 -280
-615
Demand
130
185
235
Supply Net
100
170
225
Net trade
-30
-15
-10
Demand
1942 2773
3900
Supply Net 1840 2650
3600
Net trade
-102 -123
-300
Demand
1468 1895
2430
Supply
1300 1800
2200
Net trade
-168
-95
-230
Demand
249
276
315
Supply
245
265
300
Net trade
-4
-11
-15
Demand
8291 11045 14585
Supply
7105 9875 12725
Net Trade -1186 -1170
-1860
Demand
7430 9435
11870

Factors affecting SPPML Paper Products Demand in India

SPPML is producing B Grade Newsprint. Post modification, it would also be
possible to manufacture better quality Newsprint and also Writing and Printing
Paper in the same manufacturing facility. The various factors affecting demand
of SPPML products are as follows.

4.3.1

Newsprint

Rapidly increasing newspaper circulations driven by increasing

disposable income and literacy

19

Increasing pagination supported by favourable advertising trends due

to economic growth
Increasing literacy rate and newspaper readership
Growth in urban population
Increasing affluence of the literate classes which will foster new titles
Relatively low prices of newspapers enabling subscriptions for a
second/third main newspaper along with one or two economic
newspapers. This effect is reinforced by the increasing disposable
income of the middle class
There are several major language areas, each of which requires its own
provincial/local dailies and economic newspapers. The largest
newspapers have their own editions for major areas
Increase in business activity compared with dominating role of press
advertising in India boosts newspaper consumption

The major factors limiting newsprint demand growth are:

Increasing newsprint prices due to escalating labour costs in India and

a depreciating Rupee

Fluctuations in international market prices

Keen competition in the newspaper markets, consequent low

subscription prices and thus limited editorial contents of newspapers

Competition from other advertising media (TV, for example) where

spending on advertising is growing much faster. Internet advertising in
the long term.
4.3.2

Writing and Printing Papers

Increasing literacy rate and government allocation for the educational

sector.
Increasing school enrolment, number of primary/secondary schools
and educational institutes at college level
Emerging new magazine titles
Increasing business activity boosting the demand for cut-size copy and
stationery grades. Copiers and computers are becoming increasingly
common and high-speed copiers are also being introduced
Mounting needs for colour printing are expected to boost the demand
for coated papers, and encourage the industry to quality upgrading

The major uncertainties for continued growth are:

Supply-driven market where actual demand levels partly depend on
available local/domestic supply
Import dependency on coated mechanical grades
4.4

Market Status of Shah Group

Shah Group promoters are engaged manufacture paper industry since the last
25 years. The Products of the Company have been well recognised in the

20
market. Over the years, SPPML has developed strong marketing and
distribution network in the region of Gujarat, Madhya Pradesh, Uttar Pradesh,
Maharashtra, Delhi and other states of India. Sales are being made partly
through agents and partly to customers directly. The company is supplying
Newsprint to all major and leader newspapers in India.
SPPML is getting repeat orders from its existing customers, as they are
considered a dependable supplier of good quality paper at competitive price.
Major Customers of SPPML are given in Table 4.2. The sales turnover of
SPPML since the year 1999-2000 is consistently growing as given in Table
4.3. The projected sales turnover is given in Table 4.4.
Table 4.2
Major Customers of News Print
Sr.
1
2
3
4
5
6
7

Name of the Client

Lokmat Media Limited
Rajasthan Patrika
D.B. Corp. Ltd.
Dainik Jagran
The Bombay Samachar Pvt. Ltd.
Deccan Chronicle Holdings Ltd.
Employment News (Publication Div.)

Place
Nagpur
Jaipur
Bhopal
Kanpur
Mumbai
Secunderabad
New Delhi

Table 4.3
Sales Turnover of SPPML
Year
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13*

Capacity
19800
24750
26400
29700
29700
33250
33250
36000
36000
36000
36000
36000
36000
36000

Fig. in MT
Production
19935
22049
25232
27679
30390
30903
30338
31188
32189
32703
35380
35580
33875
23927

Rs. Crs.
Sales
19974
34.62
21982
50.05
25189
50.82
27826
47.36
30009
55.77
30866
64.46
30500
68.09
30840
73.72
32251
76.62
32506
92.21
30600
82.41
35628
91.60
33910
98.49
23715
76.50
*Up to 31-12-2012

21
Table 4.4
Projected Sales Turnover of SPPML
Sr. Particulars/Yr. End March
1) Installed Capacity (MT)
News Print A Grade
Wr. & Pr. Paper
Total
3) Sales (MT)
News Print B/A Grade
Wr. & Pr. Paper
Total
4) Sales
i)
Selling Price Rs./MT
News Print B/A Grade
Wr. & Pr. Paper
ii) Net Sales
News Print B/A Grade
Wr. & Pr. Paper
Total Rs. Lacs
4.5
4.5.1

2014

2015

2016

2017

36750
18900
55650
45000
29750
12750
42500

36750
18900
55650
45000
33040
14160
47200

36750
18900
55650
45000
33950
14550
48500

36750
18900
55650
45000
34650
14850
49500

32350 32350 32350

40700 40700 40700

32350
40700

9624 10688 10983

5189 5763 5922
14813 16452 16905

11209
6044
17253

Observations and Conclusion

Observations

Shah Group promoters are engaged with paper industry since the last
25 years. The products of SPPML have been well recognised in the
market. Over the years, the Group has developed strong marketing and
distribution network.

The sales turnover of SPPML since the year 1999-2000 is consistently

growing.

There is positive gap in demand and supply, and also growth potentials
for SPPML proposed products.

4.5.2

Conclusion
Looking to present standing of Shah Group in the market and overall market
prospects of SPPML products, it can be concluded that it will be possible for
SPPML to achieve projected turnover.

22

V - TECHNICAL FEASIBILITY

5.1

Introduction
SPPML is manufacturing B Grade Newsprint with installed capacity of 36000
MTPA in its existing unit located at Silvassa Road, GIDC, Vapi, District
Valsad. SPPML has undertaken capacity expansion project to enhance the
production capacity of Newsprint upto 150 TPD or Writing and Printing Paper
by 180 TPD. The technical feasibility of expansion project is appraised in
view of the following aspects:
i)
ii)
iii)
iv)
v)
vi)

5.2

Manufacturing Process
Requirement of Raw Material, Cost and Availability
Plant & Machinery , Proposed Modification
Installed Capacity/ Capacity Utilization
Infrastructure facilities & Utility
Other relevant aspect

Manufacturing Process
The manufacturing of newsprint paper is mainly a physical and partly
chemical process. The waste paper is continuously fed by means of a belt
conveyor to the pulper. The water is fed continuously to the pulper and the
waste paper is slushed into pulp. The pulp is collected in a pit and it is
transferred to the High Density (H.D.) cleaner by means of a pump. The H.D.
cleaner removes metals and other impurities.
The pulp is then fed to the turbo separator, which separates plastic impurities
from the pulp. the Recovered Fibre has been collected from various sources
(both pres & post consumed) and most of the time is found as uncleaned &
contains lot of unwanted materials like pins, plastic, ropes, thread & etc. This
is the main criteria to get cleaned fibre for which various equipment are being
used in processing the uncleaned recovered paper. First the process is coming
under the name proper sorting i.e. segregation of cleaned and uncleaned
material. The accepted pulp then goes to De-inking process, Second stage is
involved is removing the printed ink & washing system and main equipment

23
are involved Flotation cells & Poly Disc Filter (PDF) where the
enhancement of brightness of fibre takes place and fibre value get increased.
This is called as the 1st loop of the deinking process. To get more brightness
of the pulp, it has to be further processed to remove the embedded ink
particles again with a 2nd stage of Floatation Cell and the gain is equivalent
to virgin fibre brightness level.
The accepted pulp then goes to the thickener. The rejected pulp goes to the
smaller turbo separator for recovery of pulp from slurry. In this, the accepted
pulp goes to the thickener, while the rejected slurry goes to Johnsons screen
for recovery of fibrous pulp.
The thickener reduces the water level of pulp and the mixture has a solid
consistency of 4 to 5%. The thickened pulp is collected in the first chest. The
second chest takes the pulp for refining through the Disc Refiners. The
refiners hydrate the fiber and the stock is transferred to the third chest. The
third chest is where rosin and dyes are mixed and the resultant mixture is
transferred to the fourth chest for addition of alum. The mixing of rosin and
alum imparts resistance to absorption of water to the paper. The optical
bleaching, tinting with dyes and mineral addition is carried out to impart
certain properties for better printing effect. The fifth chest collects the stock to
be sent to the paper machine.
The pulp is now ready to be supplied to the paper machine section. The pulp is
passed through S. R. Box via first stage centri-cleaner, consisting of six centricleaner bottles. The sand particles are removed in this stage. The accepted
pulp is taken to the wire part, while rejected part goes to the second stage
centri-cleaner consisting of two centri-cleaner bottles. The accepted part goes
back to the wire part while the rejected part goes to the third stage consisting
of one centri-cleaner bottle. In this, the accepted part goes to the second stage
centri-cleaners while the sand particles are separated.
In the wire section wet sheet is formed consisting of about 18% solid and 82%
water. The formed sheet is carried to the press where the water content is

24
further reduced to 60%. The sheet is then taken on to the pre dryer to partly
evaporate water from sheet. The partially dried sheet is fed to size press where
surface sizing is carried out to improve smoothness of paper by application of
starch spread on both surfaces of paper under pressure between two rolls.
Finally the paper sheet is transferred to post dryer section to achieve 6%
moisture. In order to improve better printability, paper is passed between
chilled cast iron rolls stack called calendar stack. The paper is fed to the pope
reeler, where the paper is wound in the form of jumbo rolls. The rolls are then
rewound on the re-winder where they are cut to required width and the
trimming formed here goes back as waste paper to pulper. The cut rolls are
then packed in hessian cloth, weighed and dispatched.

5.3

Raw Material Waste Paper

Basically the different quality waste paper is consumed for Newsprint, Writing
& Printing Paper. The waste papers for Newsprint are Old newspaper (75%)
and office waste paper (25%). The waste paper for Writing & Printing Paper is
sorted from imported waster paper (chemical fibre-white grade-70%) and
office waste (30%).
The waste paper is available from domestic as well as overseas market. The
import of waste paper is sourced from USA, Europe and Middle East. The
waste paper required is easily available from domestic as well as overseas
market. The newsprint is manufactured from domestic paper waste. Writing
and Printing paper is manufactured from mix of domestic and imported waste
paper. The waste paper import has no constraint in its availability as India is
considered to be one of the largest waste paper to furnished paper converting
centres. The waste paper consumption and cost for finish paper after
expansion are given in Table 5.1.

25
Table 5.1
Waste Paper Consumption and Cost
Particulars/Years
WP MT/Output MT
News Print B/A Grade
Wr. & Pr. Paper
WP Consumption MT
News Print B/A Grade
Wr. & Pr. Paper
WP Cost Rs./MT
News Print B/A Grade
Wr. & Pr. Paper
WP Cost Rs. Lacs
News Print B/A Grade
Wr. & Pr. Paper
Total Cost Rs. Lacs

5.3.1

12-13

13-14

14-15

15-16

16-17

1.29
0

1.25
1.20

1.25
1.20

1.25
1.20

1.25
1.20

47764 37188 41300 42438 43313

0 15300 16992 17460 17820
12850 12900 13000 13000 13000
0 16500 16500 16500 16500
6138
0
6138

4797
2525
7322

5369
2804
8173

5517
2881
8398

5631
2940
8571

Other Raw Materials - Chemicals

Besides Waste Paper, various chemicals and other materials are consumed as
additives in manufacture of paper. All these materials are easily available. The
quantum of chemicals consumed in production of paper and in effluent
treatment is given in Table 5.2, Table 5.3, Table 5.4, Table 5.5 and cost
incurred during last four years is given in Table 5.6.
Table 5.2
Chemicals Consumption for A-Grade Newsprint Paper
Sr.
1
2
3
4
5
6
7
8
9
10
11
12
13
14

Particulars
Kemco DK
Kemco Sop
Coustic SF
Sodium - Silicate
Bioenzyme
NazS2O4
Difoamer
Fenor
Diesel
Sticky Chemical
Bispersal 125
DSR 100
Cusol ST 2050
Cusol 2672

Kg / MT
0.870
0.870
3.713
6.533
0.133
2.500
0.300
0.250
1.250
0.250
0.250
4.00
1.20
0.800

26
Table 5.3
Chemicals Consumption for Writing & Printing Paper
Sr.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

Particulars
A.K.D.
N.T.P. Fix
Fenor
Difoamer
Diesel
Kemco DK
Kemco Sop
Coustic SF
Sodium - Silicate
Bioenzyme
Sodium H.S.
Cusol ST. 2672
Cusol ST. 2050
D.S.R. 100
Voilet Dye
Red Dye
O.B.A.
Sticky chemical
Bispersal 125

Kg / MT
25.500
1.500
0.250
0.400
1.250
0.750
0.523
5.238
9.523
0.133
2.476
1.380
1.200
4.000
0.345
0.035
1.500
0.250
0.250

Table 5.4
Chemicals Consumption for Boiler
Sr.
1
2
3
4

Particulars
Thermistic
Eloguard
Coustic
HCL.

Kg / MT
0.020
0.020
30.00
60.00

Table 5.5
Chemicals Consumption for Effluent Treatment
Sr.
1
2
3
4

Particulars
Magnaflock
Liquid Alum
Bleaching Powder
P.A.C.

Kg / MT
0.099
3.137
0.225
0.165

Table 5.6
Cost of Other Raw Materials (Chemicals)
Particulars/Years
Cost Rs./MT
News Print B/A Grade
Wr. & Pr. Paper

12-13

13-14

14-15

15-16

16-17

694
0

2500
4000

2500
4000

2500
4000

2500
4000

27

Cost Rs. Lacs

News Print B/A Grade
Wr. & Pr. Paper
Total Cost Rs. Lacs
5.3.2

257
0
257

1125
510
1635

1125
566
1691

1125
582
1707

1125
594
1719

Steam Coal Requirement

Steam Coal would be required for generating steam to be used in power
generation as well as in paper manufacturing. Steam requirement and coal
consumption and cost per ton of finished paper are given in Table 5.7.
Table 5.7
Coal Requirement and Cost
Consumption
Kg./MT
385

5.4

Plant & Machinery

5.4.1

Existing

Price
Rs./KG
4.60

Cost
Rs./MT
1750

SPPML has installed manufacturing machinery for B Grade Newsprint,

Writing & Printing Paper. List of existing plant and machinery is shown in
Table 5.8.
Table 5.8
List of Existing Machinery
Sr.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Pulp Mill
Hydro Pulper
SS Poir
High Density cleaner
Hole Screen
Deinking unit
GL & V Centricleaner
Thickner
Pressure Screen
Pressuried Head box
Wire part
Suction Couch Roll
Press part
Dryer section
Calendar Machine
Pope reeler
Rewinder

Nos.
02
02
02
01
01
01
04
01
01
01
01
03
01
01
01
01

28
17
18
19
20
21
22
23
24
5.4.2

Boiler
Efflent Treatment Plant
Air Compressor
Transformer
EOT Crane
DG Set
Vacuum Pump
Panel Boards and Electrical Installation

01
01
07
03
03
02
08

Plant & Machinery Expansion Project

SPPML has undertaken expansion project. The expansion is undertaken in two
phases. The phase wise detail is presented in the subsequent points.

(I)

Phase-I
SPPML has almost implemented the Phase-I of expansion project. Most of the
machinery have been received at the site and are under installation. The plant
and machinery under Phase-I are as follows:

A)

Pulp Mill
De-inking Cell, Poly Disc Filter washer, Bleach Tower Decanter and storage
chest:
i.)

De-inking Cell

The purpose of de-inking is to remove the printing inks and other substance
that can affect the paper making process or final properties of paper. In deinking cell, pulp and air flows through nozzles and generates micro
turbulence. This results in wide range of bubble size to efficiently remove ink
from the pulp. This enhances brightness of pulp to a higher degree. The
existing de-inking cell of Pulp mill is suitable for 100 tons/day production
capacity, thus to achieve a production capacity of 150 tons/day a new deinking cell is being installed.
ii.)

Poly Disc Filter (PDF):

The filtering/washing of fibrous material is an important process in the pulp

mill. It reduces the dissolve matters in the pulp and increases the dryness of
pulp.

29
The pulp slurry enters in the PDF through integral flow distributors and
distributes pulp across the entire mat length. The pulp mat starts to flow under
gravity ensuring optimum dewatering characteristics. The PDF gives higher
dryness pulp (from 0.8-1.5% to 10-15%) with minimum dissolve impurities in
pressed pulp. The digest water passes through channels and diverted into
cloudy and super clear filter separately.
The PDF will improve pulp dryness with minimum loss of fiber. It will give
low percentage of suspended solid in digest water which reduces solid load at
ETP plant and increase the pulp yield.
The existing pulp thickening and pulp washing line is not able to produce
quality washed pulp and also there is higher percentage of fiber loss which
results in low fiber yield and increased waste paper consumption. A new PDF
has arrived at the site.
iii.)

Decanter (Solid Bowl Centrifuge):

The decanter is operated by principle of counter current. The slurry is

transferred from the cylindrical setting section to conical dewatering section.
The effluent flows to the liquid discharge and withdrawn in clarifier stack via
a duct. The solid are transported to the solid outlet via a conical dewatering
section. The decanter at ETP section would separate dissolve solid from sludge
very efficiently and high percentage of solid discharge. The existing ETP
section has 2 nos. of decanters with 20 m3 /hr capacity. The decanter would be
able to handle the generated solid waste from pulp mill. This will help in
recycling the waste water and would be used for processing again.
iv.)

Chemical preparation, Service Tank and Dosing Pump

During the paper making process different additives dye and filler are charge
in stock preparation at different stage of manufacturing process. The purpose
of adding chemicals and filler is to develop different properties like strength,
optical and water resistance properties and other specific character of the final
paper. A number of tanks and dosing pump with various capacities are being
installed for chemical preparation and services

30
B)

Paper Machine
SPPML is increasing the paper machine capacity by installing Bi-Nip Press,
Consistency Regulator, Ceramic Hydrofoils, Dandy Rolls, Dryer Section,
Vacuum Pump, Steam and Condensate Section.
The present configuration of paper machine is four drainer, open draw
machine with conventional three stage pressing and three groups of drying
cylinder (6 dryers in each group) for evaporation and single nip calendaring
which is suitable for maximum 450 meter/min per machine speed. SPPML is
to increase the speed to 600-700 meter/min by installing the following
machinery:
i.)

Ceramic Hydrofoils:

A set of hydrofoil in paper machine wire part is to remove much water shortly
after the head box. The advantage of hydrofoil is rapid and uniform drainage
on paper machine wire without damaging the initial sheet formation and
helpful to maintain a homogeneous dry line before section boxes which is
helpful to control the cross direction moisture profile of paper.
In the existing set up, SPPML is having existing ceramic hydrofoil sets on
wire part of paper machine. Another set of ceramic hydrofoil is needed to
increase the speed of machine from existing 450 meter/ minute to 600-700
meter/ minute.
ii.)

Dandy Roll:

The dandy roll is a hollow, light wire covered roll that rides on the top of
paper machine wire part just ahead of the section boxes. The purpose of the
dandy roll is to impart a water mark to the sheet, to improve the top surface of
paper for printing, to improve the formation of the sheet and also increase the
drainage capacity on the wire part.
iii.)

Bi-Nip Press:

The paper web formed on the wire part passes on the press section. The
pressing of wet web through the nip of press rolls under pressure removes

31
water from paper and increases its strength. The pressing operation is critical
for the capacity, economy of paper machine and paper quality.
The existing paper machine is an open draw sheet transfer system with
conventional 3 press nip which is suitable for a machine having speed of 400
to 450 meter/min. The new Bi-Nip Press is suitable for high speed paper
machine with range of 600-700 meter/min as it is equipped with close draw
sheet transfer system called suction pick-up.
The advantage of Bi-Nip Press with suction pick-up roll is higher dryness and
compactness of sheet. The Bi-nip pressing minimize the difference between
both side smoothness of paper, improve the bulk of paper and increase the
tensile strength and also reduces steam consumption of per ton of paper in
dryer section.
iv.)

Dryer Section:

The dryers are hollow, revolving steam filled drums 1.5 meter in diameter to
heat the web by direct contact and remove water by evaporation. The saturated
steam is used to heat the dryer cylinder. The web is dried on both the sides
alternatively between the dryers.
The existing dryer section of the paper machine is having 3 groups of dryers
and each group with 6 dryers. The present drying capacity is not sufficient to
dry 150 TPD paper. Thus, SPPML is installing 6 dryers to increase the drying
capacity.
v.)

Steam and Condensate System:

The heat energy for paper drying comes from steam as it condenses inside the
dryer cylinder. The condensate that forms in dryer cylinders is removed
continuously by a rotary siphon. The present condensate collection system of
paper machine is called blow through trap base system. This system provides
each dryer individual ball float trap, air vent and a bypass arrangement. This
system is suitable for machine speed of 450 meter/min. A new cascade system
is being installed for high speed paper machine condensate handling. In

32
cascade system the steam is separated from the condensate and reused in low
pressure dryer section.
vi.)

Hot Disperser System:

Hot Disperser System is useful in giving higher quality of output with lower
quality of input. With expansion in capacity, existing Hot Disperser System
would be upgraded.
vii.)

Couch Shell

The existing couch shell is not suitable to produce 150 tons/day, thus a new
couch shell is being installed. It would increase the dryness of the paper.
viii.)

Floatation Clarifier

The existing clarifier would not be able to treat the water produced from 150
tons of processed paper. Thus, a higher capacity floatation clarifier is being
installed.
ix)

Hard Nip Calendar

The existing simple calendar is designed for 100 tons of production, thus a
higher capacity calendar is being installed.
(II)

Phase-II
SPPML has proposed addition of following plant and machinery as a part of
expansion project under phase-II.

A)

Pulp Machine
i)

Coarse Screens( Pressure Screen Hole)

A multiple stage coarse screening system is propose to be install after the high
density cleaner. The screens equipped with baskets will have perforated holes
of about 1.8 mm diameter. The screens would operate at a consistency of 3%
and it would remove large size contaminants. A multiple stage system
minimizes the rejection of good fibre and protects the pulp cleaners
downstream against excessive erosion.

33
ii)

Fine Screening ( Pressure Screen Slot)

It is a three stage screen, which would increase the screening efficiency and
reduce fibre loss. The fine screens will have baskets with slots of 0.15 mm.
iii)

Centricleaner

After coarse cleaning and flotation, the remaining contaminants in the pulp are
very fine foreign material (sand, crushed glass), lighter than water (such as
plastics, styrofoam, pulp flakes, stickies and glues), bundles of un-separated
fibres and fine ink particles. These each type of contaminant requires a different
removal process adapted to the particular contaminant.
The pulp is pumped from the primary flotation cell to two stages of reverse
cleaners to remove the lightweight contaminants. All cleaners operate at very
low consistency (0.5 - 1.0%).
iv)

Polcol Tower For Pulp Bleaching

The bleaching chemicals (hydrogen peroxide, caustic soda and other chemicals)
are mixed at the inlet to the kneader and it starts reacting with newly exposed
fibre surface. The high consistency of the pulp in this unit ensures that the
chemicals are not too diluted and higher temperature accelerates the reaction.
The pulp, at high consistency drops from the kneader into a peroxide bleaching
tower where the bleaching reaction is given sufficient time (about 2 hours) to
take place. The bleached pulp is then diluted at the bottom of the tower and is
pumped to a latency tank where it is diluted to 5% consistency.
v)

MAC Cell De Inking -2 (Post Flotation)

The stock after fine screening is diluted further before feeding to the primary
MAC cell in the post flotation system where further removal of left over ink
particles is done.
The flotation cells use air and a surfactant (soap) as a means of separating ink
particles, which adhere to the soap-air bubble and rise to the surface. They are
more efficient than washers in removing ink and stickies. Flotation is
performed in multiple steps to maximize ink removal. The collected ink and

34
fine particles are removed with the foam produced in the flotation cell and
discharged. The liquid falls into a sludge tank which receives rejects from other
unit operations and feeds a sludge dewatering press.
vi)

Poly disk Filter For Pulp Thickener

After cleaning and screening, contaminants contained in the pulp are mainly
very fine ink particles dispersed in the slurry. A few of these particles can be
removed by squeezing or displacing the water out of the pulp on a thickener.
The pulp thickener is preferentially a disk filter which uses its own filtrate, as
well as mill water to wash off ink particles and clean the filter disks.

The

accepted pulp from the primary fine screen is piped to the filter where it is
washed and thickened to about 12% consistency. The re-pulper discharges it to
the dispersion system.
The washer filtrate is extracted in two steps. The first step removes a stream
richer in fibre fines and particulates. It is called the "cloudy" filtrate. As the
mat forms on the disks, the water that is filtered out entrains fewer fines, which
are retained on the thicker fibre mat. This water is called "clear" filtrate.
Clear filtrate is filtered on a sidehill screen to separate as much fibre as possible
and the filtrate is used as shower water on the washer. A second source of
shower water is clear filtrate from the second bleaching stage thickener. The
cloudy filtrate is pumped to a clarifier to remove entrained ink and ash particles
and is then reused for pulp dilution upstream of the washer
vii)

Heating Screw

The thickened pulp discharged at 12% from the disk filter is heated in heating
screw to increase the pulp temperature required before reductive bleaching.
viii)

Screw Pump

The thickened pulp discharged at 12% from the heating screw is conveyed to
screw pump which feeds the heated pulp to chemical mixture & bleaching
tube.

35
ix)

Bleaching Tube

The stock thickening is processed through a heating screw before entering the
reaction tube for reductive bleaching.

Chemicals like FAS/Sodium Hydro

Sulphide are used as bleaching agents in this stage

x)

Closed Hood

The hood captures and removes the vapour from the Dryer Section. It prevents
condensation on paper and thereby eliminates loss of production & quality
problems. It preserves building trusses and machine equipment like felt rolls,
dryer frames, structural members etc. It reduces painting cost and avoids
overheating due to non-uniform moisture profile across paper width and
thereby saves energy.
xi)

Quality Control System

It is a measuring and controlling system for quality of the paper. It improves the
quality of production such as basis weight, moisture, ash etc.
xii.)

Chemical preparation, Service Tank and Dosing Pump

During the paper making process different additives dye and filler are charge
in stock preparation at different stage of manufacturing process. The purpose
of adding chemicals and filler is to develop different properties like strength,
optical and water resistance properties and other specific character of the final
paper. A number of tanks and dosing pump with various capacities is to be
installed for chemical preparation and services
5.4.2

Cost of Plant and Machinery under expansion project

The list of plant & machinery for Phase-I and Phase-II is given in the
Annexure-V. The phase wise cost of plant and machinery is given in the Table
5.10
Table 5.10
Cost of Plant and Machinery- Phase-wise
Sr.
1
2

Particular
Phase-I
Phase-II

Rs. Crs
17.42
18.51

36
The cost of plant and machinery under Phase-I is already incurred. The cost of
plant and machinery under Phase-II is estimated. The suppliers of plant and
machinery under Phase-II are yet to be finalized.
5.5

Installed Capacity
The installed capacity of the unit after expansion of the plant would be 55650
MTPA on 24HRs/350 Days working basis. The installed capacity and capacity
utilization proposed is shown in the Table 5.11.
Table 5.11
Installed Capacity and Capacity Utilisation
Particulars/ March End
Installed Capacity (MT)
News Print B/A Grade
Wr. & Pr. Paper
Total
Capacity Utilisation (%)
News Print B/A Grade
Wr. & Pr. Paper
Total
Production (MT)
News Print B/A Grade
Wr. & Pr. Paper
Total

5.6

Infrastructure Facilities

5.6.1

Land

2013

2014

2015

2016

2017

46500 36750 36750 36750 36750

0 18900 18900 18900 18900
46500 55650 55650 55650 55650
80
0
80

81
67
76

90
75
85

92
77
87

94
79
89

37000 29750 33040 33950 34650

0 12750 14160 14550 14850
37000 42500 47200 48500 49500

SPPML has land admeasuring 39113 Sq mtr. at Plot no. 97, Silvassa Road,
GIDC, Vapi. The existing land is adequate for total requirement after
expansion project.
5.6.2

Building
The total existing built up area of the unit is 22523.00 Sq mtr. The existing
built up area is adequate for total requirements after expansion. The civil
works under Phase-I is almost over. The civil works for under Phase-II will be
carried out in due course of time.

37
5.7

Utilities

5.7.1

Power
The total power requirement would be 4500 KVA (4050 KW), of which 3600
KW is sourced from GEB and 500 KW from own generation. Table 5.12
shows the unit requirement per MT of product and generation.
Table 5.12
Power Requirement
Particular
News Print-A Grade
Writing & Printing Paper
Total
GEB (KW)
Turbine (KW)
Total

Units/MT Production
(MTPA)
675
36750
575
18900
55650
3600
500

KWH
(in Lacs)
248
109
357
302
42
344

The power units per ton of Newsprint-A Grade and Writing and Printing paper
comes at 640 and 540 units respectively after considering own generation
from Turbine as shown in Table 5.13.
Table 5.13
Power Cost
Product
NP A-Grade
WP
5.7.2

Units/MT

Rs./Unit

640
540

7.20
7.20

Cost
Rs./MT
4608
3888

Pollution
The most significant environmental issues are the discharge of chlorine-based
organic compounds (from bleaching) and of other toxic organics. The unchlorinated material is essentially black liquor that has escaped the mill
recovery process. Effluent Treatment arrangement by SPPML is as follows:
Liquid

SPPML has made arrangements for treatment of effluent water so

that the discharged quantum is less than 10% of total quantum of
effluent water. The discharged effluent is sent to Central Effluent
Treatment Plant of Vapi. SPPML is member of CETP, Vapi. The
cost of treatment is small and is included in the manufacturing
expenses.

38
Solid
Waste
Air

Sludge, plastics, etc. is only 1.5% of total production. The

decanter will reduce the solid waste content from the slurry.
Air cleaning system like ESP, bag filter has been installed.

SPPML has primary and secondary effluent treatment plant in their premises.
SPPML has ETP capacity under Phase-I at 160 m3/hr savall (floatation
clarifier). The ETP capacity is adequate to meet requirement after expansion
project. SPPML has applied for necessary GPCB consent for expansion
project.
5.8

Manpower Requirement
SPPML has in-house team of technical manpower to take care of the existing
as well as expansion project. SPPML has employed 152 persons on regular
basis and additional 80 persons on contractual basis. There will be no
additional man power requirement. The manpower employed in various
categories is given in the Table 5.14.
Table 5.14
Details of Man Power
Sr.
1
2
3
4
5
6
7

5.9

Category
Director
Manager
Clerical staff
Skilled Worker
Semi skilled worker
Helper
Total
Contractual
Total Manpower

Nos.
03
07
40
20
35
47
152
80
232

Implementation Schedule
The expansion project under Phase-I is under implementation and will be fully
implemented by April, 2013 and phase-II is planned to be completed by June,
2013.

39
5.10

Observations and Conclusion

Observations
Shah Group has long experience in paper industry and in-house technical
capability to manufacture Kraft Paper, Writing & Printing Paper and
Newsprint. The Group has proven track record of Paper Plant
operations.
SPPML has established set up to manufacture B Grade Newsprint.
SPPML has undertaken expansion project for enhanced capacity of
Newsprint-A Grade, and Writing and Printing Paper.
SPPML has

several times

successfully under taken

expansion/

modernization/up-gradation of the plant. It would be possible for

SPPML to implement proposed expansion project success fully.
Looking to the present status of expansion project, it would be possible for
SPPML to complete the Phase-I by April, 2013 and Phase-II by June,
2013 and start commercial operations.

Conclusion
SPPML has established set up of plants and machinery, and infrastructures for
manufacturing of Newsprint and Writing and Printing Paper. SPPML has
proven track record of efficient plant operations. In view of these, it would be
possible to implement proposed expansion project and operate it successfully.
The proposed expansion project is technically feasible.

40
ANNEXURE-V (A)
LIST OF PLANT AND MACHINERY PHASE I

Sr.
(A)
(B)
1
2
3
4
5
6
7
8
9
10
11
12
(C )
(D)
(E)

Particulars
Civil Work
Civil Work for Machinery
Plant & Machinery
Bi- Nip Press System
Drive, Sectional Paper Machine
Steam Condensate System
Vacuum Circuit Breaker
Poly Disk Filter (PDF)
De-Inking Cell
Dandy Roll
Decanter
Couch Shell
Floatation Clarifier
Hard Nip Calendar
Disperser
Electrical Installation & Fittings
Other Misc Assets
Erection & Commissioning
Total Cost

Rs. Crs
Total Cost
1.31
3.69
0.66
0.33
0.17
0.83
0.93
0.29
0.22
0.40
0.45
2.63
1.72
1.57
1.94
0.28
17.42

41
ANNEXURE-V (B)
LIST OF PROPOSE PLANT AND MACHINERY PHASE II
Sr.
(A)
1
(B)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Particulars
Civil Work
Civil Work for Boiler House
Plant & Machinery
Pressure Screen Hole
Pressure Screen Slot
Polcol Tower
Poly Disk Filter (PDF)
MAC Cell De Inking Cell
Quality Control System- QCS
Hood
Pipes/Pumps /Motors
Instruments ( Cables, Valves)
Centri Cleaner
Compressor
Basket
Screw Pump
Bleaching Tube
Rewinder
Chemical Tank/ Pump
Craine
Electrical Instalation & Fittings
Other Misc Assets
Erection & Commissioning
Total

Cost
2.73

2.29
1.29
1.92
1.72
1.72
1.38
0.23
0.11
0.12
0.17
0.18
0.29
0.29
0.29
0.57
3.04
0.17
18.51

42

VI - PROJECT COST AND MEANS OF FINANCE

6.1

Project Cost
The project cost of proposed expansion of SPPML is appraised at Rs. 17.42
Crs. in Phase-I and Rs. 18.51 Crs. in Phase-II, as given in Table 6.1.
Table 6.1
Project Cost

Sr. Particulars
1
2
3
4
5
6
7
8
9
10
11

Land
Buildings
Plant & Machinery
Furniture & Fixtures
Computer & Office Equips.
Vehicles
CWIP
Total Gross Block
Investments
Net Working Capital
Miscellaneous Assets
Advances for Capital Goods
Total

Existing
31-03-12
2.78
18.09
35.26
0.18
0.37
1.11
0.71
58.50
0.04
23.65
0.36
0.00
82.55

Phase-I
Addition
0.00
0.00
17.42
0.00
0.00
0.00
-0.71
16.71
0.00
0.00
0.00
0.00
16.71

Total on
31-03-13
2.78
18.09
52.68
0.18
0.37
1.11
0.00
75.21
0.04
23.65
0.36
0.00
99.26

Phase-II
Addition
0.00
2.73
15.78
0.00
0.00
0.00
0.00
18.51
0.00
0.00
0.00
0.00
18.51

The capital expenditure for Phase-I is almost incurred. The proposed cost of
Phase-II of the expansion project is on the basis of estimates given by SPPML.
6.2

Projected Working Capital Requirement

The projected working capital requirement is appraised in view of the working
capital employed as on 31-03-2012. The detailed projected working capital as
appraised is given at Annexure VI. The summary of projected working capital
is given in Table 6.2. SPPML has not sought for enhancement in Working
Capital Loan.

(Rs. in Crs)
Total on
30-06-13
2.78
20.82
68.46
0.18
0.37
1.11
0.00
93.72
0.04
23.65
0.36
0.00
117.77

43
Table 6.2
Summary of Projected Working Capital Requirement
(Rs. in Lacs)
Sr.
A)

B)

C)
D)
E)

6.3

Particulars/ March End

Total Current Assets
Non Current Assets
Total
Total Current Liabilities
Creditors for Capital Goods
Total
Working Capital Gap (A-B)
Working Capital Loans
Net Working Capital

2012

2013

2014

2015

2016

2017

2018

5231
120
5351
2964
22
2986
2267
1416
851

6025
120
6145
3022
25
3047
3003
1600
1403

6765
120
6885
4111
50
4161
2654
1600
1054

7440
120
7560
4598
50
4648
2843
1600
1243

7651
120
7771
4799
50
4849
2852
1600
1252

7793
120
7913
4874
50
4924
2919
1600
1319

7988
120
8108
4627
50
4677
3362
1600
1762

Means of Finance
The means of finance for proposed modification project of SPPML is
appraised as given in Table 6.3. The financial ratios based on proposed means
of finance works out to be satisfactory.
Table 6.3
Means of Finance

Sr. Particulars
1
2
3
4
5
6
7
8

Existing on
31-03-12
11.00
19.41
3.25
24.32
0.32
14.16
4.94
5.15
82.55

Share Capital
Reserves & Surplus
Revaluation Reserve
Depreciation Provision
Long Term Loans
WC Bank Loans
Unsecured Loans
Def. Tax Liabilities
Total
Financial Ratios
Net Worth (Rs. Crs.) *
Total Debts/Net Worth*
Debt/Equity *
FA/Total Debts
FA/Term Loans
* Without Revaluation Reserve

35.20
0.15
0.15
6.50
106.81

Phase-I
Addition
0.00
0.00
0.00
0.00
11.00
0.00
5.71
0.00
16.71

Total on Phase-II
31-03-13 Addition
11.00
0.00
19.41
3.25
0.00
24.32
11.32
13.00
14.16
10.65
5.51
5.15
99.26
18.51
35.20
0.62
0.62
2.32
4.50

(Rs. in Crs)
Total on
30-06-13
11.00
19.41
3.25
24.32
24.32
14.16
16.16
5.15
117.77
35.20
140.43
1.15
48.64
73.68

44
6.4

Observations

The capital expenditure for Phase-I is almost incurred. The proposed cost
of Phase-II of the expansion project is on the basis of estimates.

Term loan against CAPEX of Phase-I has been already sanctioned and
almost disbursed.

45

VII - ECONOMIC VIABILITY

7.1

General
The economic viability of SPPML after expansion project is appraised on the
basis of projected profitability, debt service coverage ratio (DSCR), internal
rate of return (IRR), break even analysis, projected cash flow, projected
balance sheet, and sensitivity of selling price as well as raw material cost on
profitability. While appraising economic viability of modification project, past
performance of SPPML and prevailing operating parameters are considered as
bases. The expansion project will be fully implemented by June 2013 and will
start operations on commercial scale. The economic viability of SPPML after
modification project of is appraised as follows.

7.2

Projected Profitability
The detailed projected profitability is given in Annexure VII. The summary of
projected profitability is given below in Table 7.1.
Table 7.1
Summary of Projected Profitability
(Rs. in Lacs)

Particulars/March End

Total Income
Cost of Production
Gross Profit
EBDIT
Profit Before Tax
Profit After Tax
Dividend
Retained Profit
Cash Accruals

2013
10807
9281
1525
1153
318
207
0
207
447

2014
14933
12686
2247
1702
440
352
0
352
661

2015
16572
14024
2548
1853
499
439
0
439
864

2016
17025
14409
2616
1898
590
392
0
392
816

2017
17373
14721
2652
1914
665
424
0
424
849

2018
17373
14740
2633
1885
701
433
0
433
857

2019
17373
14761
2613
1857
672
400
0
400
825

It can be seen from the above that the operations of SPPML will earn
increasing profits. Profit before tax will increase from Rs. 318 Lacs in the year
2012-13 to Rs. 675 Lacs in the year 2019-20.

2020
17373
14782
2591
1828
675
391
0
391
816

46
The bases of various operating parameters are based on actual operations
of SPPML in the year 2012-13, up to December, 2012, as given at
Annexure XII.
Interest on existing loans considered as per existing rates and repayment is
considered as per current schedule. Interest on new term loan of Rs 24.00
Crs. considered at 13% Per Annum. The repayment of new term loan is
considered from the year 2013-14 up to the year 2019-20 years after initial
moratorium of six months. Interest calculations and repayment schedule of
loans are given in Annexure XIII.
SLM Depreciation is considered for the purpose of profitability, while
WDV Depreciation is considered for the purpose of taxation provisions.
SLM and WDV Depreciation provisions are given at Annexure XIV.
Taxation provision is considered as per the Income Tax act as applicable to
closely held company. Tax provision working is given at Annexure XV.

7.3

DSCR Analysis
The DSCR is analysed and gross DSCR as well as net DSCR have been
worked out as given in Table 7.2.
Table 7.2
DSCR analysis
(Rs. Lacs)

Particulars/March End
Cash Accruals
Interest on TL
Total
TL Repayment
Interest on TL
Total
Gross DSCR
Net DSCR

2013
447
88
535
172
88
260
2.06
2.60

2014
661
302
963
212
302
514
1.87
3.12

2015
864
269
1133
307
269
576
1.97
2.81

2016
816
222
1038
408
222
630
1.65
2.00

2017
849
163
1012
506
163
669
1.51
1.68

2018
857
98
955
500
98
598
1.60
1.71

2019
825
49
874
250
49
299
2.92
3.30

2020
816
16
832
250
16
266
3.13
3.26

It can be seen from the DSCR analysis that the cumulative gross DSCR of
1.93 as well as Net DSCR of 2.36 are satisfactory.

Cum.
6136
1206
7341
2605
1206
3811
1.93
2.36

47
7.4

IRR Analysis
The IRR is analysed as given in Table 7.3. The IRR of 26%, indicates good
returns over investment.
Table 7.3
IRR Analysis

Particulars/ March End

Net Fixed Assets (NFA)
Net Current Assets
EBDI After Tax
Total
Terminal Value of NFA
Net Current Assets
Total
IRR
7.5

2013
-5089
-851
1042
-4898
0
0
-4898

2014
-1851
0
1614
-237
0
0
-237

2015
0
0
1794
1794
0
0
1794

2016
0
0
1700
1700
0
0
1700

2017
0
0
1673
1673
0
0
1673

2018
0
0
1617
1617
0
0
1617

(Rs. in Lacs)
2019 2020
0
0
0
0
1585 1544
1585 1544
0 3842
0 2432
1585 7818
26%

Break Even Analysis

The analysis of break even point is given at Annexure VIII. The summary of
break even analysis is given in Table 7.4.
Table 7.4
Break Even Analysis
(Rs. in Lacs)

Particulars/March End

Total Income
Total Variable Cost
Contribution
Total Fixed Cost
BEP (%)
Average BEP (%)

2013
10809
9454
1355
1036
77

2014
14943
13029
1914
1474
77

2015
16582
14450
2132
1633
77

2016
17035
14827
2208
1618
73

2017
17378
15124
2254
1589
70

2018
17378
15129
2250
1549
69

2019
17378
15183
2195
1523
69

It can be seen from the above that the BEP reduces from 77% in the year
2012-13 year to 68% in the year 2017-18. The average BEP works out to be
73%
7.6

Projected Cash Flow

The analysis of projected cash flow is given at Annexure IX. The summary of
projected cash flow is given in Table 7.5.

2020
17378
15188
2191
1515
69
72

48
Table 7.5
Summary of Projected Cash Flow
(Rs. in Lacs)

Particulars/March End
Sources of Funds
Application of Funds
Surplus
Opening Balance
Closing Balance

2012
11241
10827

2013
2433
2601

2014
3522
2774

2015
1249
842

2016
920
559

2017
930
578

2018
860
505

2019
827
255

2020
818
255

414
0
414

-168
414
246

748
246
994

407
994
1402

361
1402
1763

351
1763
2114

355
2114
2469

572
2469
3041

563
3041
3605

It can be seen from the projected cash flow analysis that there will be enough
positive cash surplus after all applications of funds. The cash surplus at the
end of the year 2019-20 will be Rs. 3605 Lacs.
7.7

Analysis of Projected Balance Sheets

The analysis of projected balance sheet is given at Annexure X. The analysis
of projected balance sheet is given in Table 7.6.
Table 7.6
Summary of Projected Balance Sheet
(Rs. Lacs)

2012
Particulars/March End
Net Worth (Rs. Crs) *
3520
Total Debts/Net Worth*
1.40
Debt/Equity *
0.20
Net FA/Total Debts
4.90
Net FA/Term Loans
16.75
CA/CL
1.27
Net CA/WC Loan
1.79
* Without Revaluation Reserves

2013
3727
1.81
0.59
2.20
4.25
1.31
1.83

2014
4079
2.30
0.94
1.67
2.88
1.33
2.09

2015
4518
2.10
0.78
1.69
3.12
1.40
2.41

2016
4910
1.87
0.64
1.78
3.68
1.47
2.65

2017
5334
1.64
0.49
1.96
5.12
1.52
2.86

2018
5767
1.43
0.37
2.22
9.38
1.57
3.07

2019
6167
1.30
0.30
2.29
17.07
1.67
3.40

It can be seen from the summary of projected balance sheet that the liabilities
and assets are well balanced. The financial ratios are satisfactory.
7.8

Sensitivity Analysis
The sensitivity analysis has been carried out considering adverse change in
selling price and raw materials cost as given at Annexure XI. The profitability
of SPPML is highly sensitive to the selling prices and raw materials cost.

2020
6558
1.18
0.25
2.38
NA
1.76
3.74

49
It can be seen from the sensitivity analysis that the profitability of SPPML can
absorb 2% reduction in selling price and 3% increase in raw materials cost to
remain in satisfactory level.
Due to negative change in selling and raw material prices the break-even point
goes up and DSCR as well as IRR declines. However, the DSCR and IRR
remain within the range of normal standards. The summary of sensitivity
analysis is given in Table 7.7 and Table 7.8.
Table 7.7
Summary of Sensitivity Analysis (Selling Price Low by 2%)
(Rs. in Lacs)

Particulars/March End
Total Income
Gross Profit
EBDIT
Profit Before Tax
Profit After Tax
Cash Accruals
Average BEP
Cumulative Gross DSCR
Cumulative Net DSCR
IRR

2013 2014 2015 2016 2017 2018 2019 2020

10807 14637 16243 16687 17028 17028 17028 17028
1525 1951 2219 2278 2307 2288 2268 2246
1153 1414 1535 1571 1580 1550 1523 1494
318
152
180
262
331
367
338
341
207
121
166
170
198
207
174
165
447
430
591
595
623
632
599
590
84%
1.50
1.73
22%

Table 7.8
Summary of Sensitivity Analysis (Raw Material Price High by 3%)
(Rs. in Lacs)

Particulars/March End
Total Income
Gross Profit
EBDIT
Profit Before Tax
Profit After Tax
Cash Accruals
Average BEP
Cumulative Gross DSCR
Cumulative Net DSCR
IRR

2013 2014
10807 14933
1525 1956
1153 1411
318
149
207
119
447
429

2015 2016 2017 2018 2019 2020

16572 17025 17373 17373 17373 17373
2227 2287 2318 2298 2278 2257
1533 1570 1580 1550 1522 1493
178
261
330
366
337
341
164
170
198
207
174
165
589
594
623
631
599
590
84%
1.50
1.73
22%

50
7.9

Observations and Conclusion

Observations

The operations of SPPML after expansion project will be profitable.

The cumulative Gross DSCR will be 1.93 and cumulative Net DSCR
will be 2.36, which are satisfactory.

IRR works out to be 26 %, which is satisfactory.

There will be enough positive cash surplus after all applications of

funds. The cash surplus at the end of the year 2019-20 will be Rs. 3605
Lacs.

The liabilities and assets will be well balanced. The financial ratios are
will be satisfactory.

The break-even point during the year 2012-13 will be 77%, which will
reduce by year up to 69% till the year 2019-20. The average BEP will
be 72%.

It would be possible to repay new term loan as per repayment schedule

proposed after moratorium period of initial six months.

Conclusion
From the various financial aspects appraised as above, it can be concluded that
after modification project, the operations of SPPML will be economically
viable. Looking to the returns, the proposed investment is justified.

51

VIII - OBSERVATIONS AND CONCLUSIONS

8.1

Observations

8.1.1

Proposal of SPPML
In view of the market potentials, SPPML has planned expansion project to
enhance the production capacity of Newsprint-A Grade by 150 TPD or
Writing and Printing Paper by 180 TPD. SPPML has proposed mix of
both the products.
The project cost of proposed expansion of SPPML is appraised at Rs.
17.42 Crs. in Phase-I and Rs. 18.51 Crs. in Phase-II. SPPML has
already received financial assistance in the form of Term Loan of Rs.
11.00 Crs. for Phase-I, and sought financial assistance in the form of
Term Loan Rs. 13.00 Crs. in Phase-II.
SPPML has planned to complete Phase-I by April 2013 and Phase-II by
June 2013.

8.1.2

Back Ground of SPPML

The turnover and profitability of SPPML has been increasing and

operations are consistently profitable. The balance sheets of SPPML
reveal that the financial ratios are satisfactory.

The promoters of SPPML are well experienced and conversant with

paper industry Viz Newsprint and Writing & Printing Paper. They are
capable of managing implementation of expansion project and
successful operations thereafter.

8.1.3

Product Overview

SPPML is manufacturing Newsprint-B Grade targeted to cater to the

demand from publication segment viz. News paper and Magazines.
Now, SPPML has proposed to manufacture Newsprint-A Grade and
Writing and Printing Paper after expansion.

Newsprint and Writing & Printing Paper manufacturing, the parameters

to be maintained are more or less stable as its application/usage is
specific.

52
8.1.4

Market Aspects
Shah Group promoters are engaged with paper industry since the last 25
years. The products of SPPML have been well recognised in the
market. Over the years, the Group has developed strong marketing and
distribution network.
The sales turnover of SPPML since the year 1999-2000 is consistently
growing.
There is positive gap in demand and supply, and also growth potentials for
SPPML products Viz. Newsprint and Writing & Printing Paper.

8.1.5

Technical Feasibility Aspects

Shah Group has long experience in paper industry and in-house technical
capability to manufacture Kraft Paper, Writing & Printing Paper and
Newsprint. The Group has proven track record of Paper Plant
operations.

SPPML has established set up to manufacture B Grade Newsprint.

SPPML has undertaken expansion project for enhanced capacity of

Newsprint-A Grade, and Writing and Printing Paper.

SPPML has several times successfully under taken expansion/

modernization/up-gradation of the plant. It would be possible for
SPPML to implement proposed expansion project success fully.

Looking to the present status of expansion project, it would be possible

for SPPML to complete the Phase-I by April, 2013 and Phase-II by
June, 2013 and start commercial operations.

8.1.6

Economic Aspects

The capital expenditure for Phase-I is almost incurred. The proposed

cost of

Phase-II of the expansion project is on the basis of estimates.

Term loan against CAPEX of Phase-I has been already sanctioned and
almost disbursed.

The operations of SPPML after expansion project will be profitable.

53

The cumulative Gross DSCR will be 1.93 and cumulative Net DSCR
will be 2.36, which are satisfactory.

IRR works out to be 26 %, which is satisfactory.

There will be enough positive cash surplus after all applications of

funds. The cash surplus at the end of the year 2019-20 will be Rs. 3605
Lacs.

The liabilities and assets will be well balanced. The financial ratios are
will be satisfactory.

The break-even point during the year 2012-13 will be 77%, which will
reduce by year up to 69% till the year 2019-20. The average BEP will
be 72%.

It would be possible to repay new term loan as per repayment schedule

proposed after moratorium period of initial six months.

8.2

Conclusions

Looking to present standing of Shah Group in the market and overall

market prospects of SPPML products, it can be concluded that it will
be possible for SPPML to achieve projected turnover.

SPPML has established set up of plants and machinery, and

infrastructures for manufacturing of Newsprint and Writing and
Printing Paper. SPPML has proven track record of efficient plant
operations. In view of these, it would be possible to implement
proposed expansion project and operate it successfully. The proposed
expansion project is technically feasible.

From the various financial aspects appraised as above, it can be

concluded that after modification project, the operations of SPPML
will be economically viable. Looking to the returns, the proposed
investment is justified.

The operations of SPPML after expansion project will be TechnoEconomically viable.

54

55

ANNEXURE - VI
PROJECTED WORKING CAPITAL REQUIREMENTS

Sr. Particulars/ March End

A) Current Assets
Inventories
Indigenous WP (4 Months)
Imported WP(2 Months)

Steam Coal (4 Months)

Chemicals (4 Months)
Stores and Spares (10 Months)
Packing Material (2 Month)
Work in Process
Stock of FG

Total
A/Cs Receivables (2 Months)
Loans & Advances
Cash & Bank Balance

B)

Total Current Assets

Non Current Assets
Total
Current Liabilities
Creditors for Goods (4 Months)
Creditors for Expenses (1 Months)

2012

2013

2014

2015

2016

2017

2018

(Rs. in Lacs)
2019 2020

1416
436
244
37
183
17
16
38
2387
1197
1233
414
5231
120
5351

1739
153
205
86
234
21
16
40
2494
1831
1250
450
6025
120
6145

1359
120
248
375
274
28
25
50
2480
2556
1250
480
6765
120
6885

1521
134
275
375
305
31
30
60
2732
2838
1250
620
7440
120
7560

1563
138
283
375
313
32
30
70
2805
2916
1250
680
7651
120
7771

1563
138
283
375
320
33
30
75
2817
2977
1250
750
7793
120
7913

1563
138
283
375
320
33
30
80
2822
2977
1250
940
7988
120
8108

1563
138
283
375
320
33
30
85
2827
2977
1250
1120
8173
120
8293

1563
138
283
375
320
33
30
90
2832
2977
1250
1355
8413
120
8533

2064
184

2472
187

3400
253

3748
290

3841
301

3913
311

3913
313

3913
315

3913
318

56

C)
D)
E)

Other Current Liabilities

TL Instalments
Unsecured Loans
Short Term Provisions
Total Current Liabilities
Creditors for Capital Goods
Total

131
172
395
18
2964
22
2986

131
212
0
20
3022
25
3047

131
307
0
20
4111
50
4161

131
408
0
20
4598
50
4648

131
506
0
20
4799
50
4849

131
500
0
20
4874
50
4924

131
250
0
20
4627
50
4677

131
250
0
20
4629
50
4679

131
0
0
20
4381
50
4431

Working Capital Gap (A-B)

Working Capital Loans
Net Working Capital

2267
1416
851

3003
1600
1403

2654
1600
1054

2843
1600
1243

2852
1600
1252

2919
1600
1319

3362
1600
1762

3544
1600
1944

4032
1600
2432

57

ANNEXURE - VII
PROJECTED PROFITABILITY

Sr. Particulars/March End

1) Income
Gross Sales
Less: Duty &Taxes
Net Sales
Add: Other Income
Total Income
2) Operating Cost
Raw Materials
Stores and Spares
Packing Material
Power & Fuel
Labour Charges
Other Factory Overheads
Repairs & Maintenance
Employees Cost
Resold Goods Cost
Total
Add: Opening Stock of FG
Less: Closing Stock of FG
Cost of Production

2012

2013

2014

2015

2016

2017

2018

(Rs. in Lacs)
2019 2020

9851 10984 15334 17030 17499 17859 17859 17859 17859

209
237
520
578
594
606
606
606
606
9642 10747 14813 16452 16905 17253 17253 17253 17253
52
60
120
120
120
120
120
120
120
9694 10807 14933 16572 17025 17373 17373 17373 17373
5687
226
100
1245
41
206
34
222
704
8465
40
38
8467

7011 9700 10690 10954 11156 11156 11156 11156

281
329
366
376
384
384
384
384
124
170
189
194
198
198
198
198
1314 1867 2094 2174 2241 2241 2241 2241
45
51
57
59
60
60
60
60
225
258
287
295
301
301
301
301
51
75
94
98
103
108
114
120
233
245
257
270
283
298
312
328
0
0
0
0
0
0
0
0
9283 12696 14034 14419 14726 14745 14766 14787
38
40
50
60
70
75
80
85
40
50
60
70
75
80
85
90
9281 12686 14024 14409 14721 14740 14761 14782

58

4)

6)
8)

9)

Gross Profit
Directors Remuneration
Admn. & Gen. Expenses
Selling & Dist. Expenses
EBDIT
Interest Loans
Other Fin. Charges
Total Financial Charges
Depreciation
Profit Before Tax
Taxation Provision
Profit After Tax
Dividend/Adjustments
Retained Profit
Cash Accruals

1227
34
111
106
976
203
284
487
216
273
91
182
0
182
398

1525
36
117
220
1153
370
225
595
240
318
112
207
0
207
447

2247
39
122
383
1702
703
250
953
309
440
88
352
0
352
661

2548
55
128
511
1853
680
250
930
425
499
59
439
0
439
864

2616
58
135
525
1898
634
250
884
425
590
198
392
0
392
816

2652
61
142
536
1914
575
250
825
425
665
241
424
0
424
849

2633
64
149
536
1885
509
250
759
425
701
268
433
0
433
857

2613
64
156
536
1857
460
300
760
425
672
272
400
0
400
825

2591
64
164
536
1828
428
300
728
425
675
284
391
0
391
816

59

ANNEXURE - VIII
BREAK EVEN ANALYSIS

Sr.
1)

2)

3)

Particulars/March End
Sales Realisation
FG Stock: Increase
Total
Variable Costs
Raw Materials
Stores and Spares
Packing Material
Power & Fuel
Labour Charges
Repairs & Maintenance (80%)
Selling & Dist Expenses
Interest on WC Loans
Other Fin. Charges
Total
Contribution

2013
10807
2
10809

2014
14933
10
14943

2015
16572
10
16582

2016
17025
10
17035

2017
17373
5
17378

2018
17373
5
17378

(Rs. in Lacs)
2019
2020
17373
17373
5
5
17378
17378

7011
281
124
1314
45
41
220
194
225
9454
1355

9700
329
170
1867
51
60
383
218
250
13029
1914

10690
366
189
2094
57
75
511
218
250
14450
2132

10954
376
194
2174
59
79
525
218
250
14827
2208

11156
384
198
2241
60
83
536
218
250
15124
2254

11156
384
198
2241
60
87
536
218
250
15129
2250

11156
384
198
2241
60
91
536
218
300
15183
2195

11156
384
198
2241
60
96
536
218
300
15188
2191

60

4) Fixed Costs
Employees Cost
Repairs & Maint. (20%)
Other Factory Overheads
Directors Remuneration
Admn. & Gen. Expenses
Interest on Loans
Depreciation
Total

5) Break Even Point (%)

Average BEP (%)

233
10
225
36
117
175
240
1036

245
15
258
39
122
485
309
1474

257
19
287
55
128
462
425
1633

270
20
295
58
135
416
425
1618

283
21
301
61
142
357
425
1589

298
22
301
64
149
291
425
1549

312
23
301
64
156
243
425
1523

328
24
301
64
164
210
425
1515

77

77

77

73

70

69

69

69
72

61

ANNEXURE - IX
PROJECTED CASH FLOW ANALYSIS

Sr.
I

II

Particulars/March End
Sources of Funds
Share Capital
Reserves & Surplus
Revaluation Reserve
Depreciation Provision
Long Term Loans
WC Loans
Unsecured Loans
Current Liabilities
Def. Tax Liabilities
Total
Application of Funds
Gross Fixed Assets
Capital Goods in Process
Investments
Current Assets
Miscellaneous Expenses
Term Loan Repayment
Unsecured Loan Repayment
Total

(Rs. in Lacs)
2019
2020

2012

2013

2014

2015

2016

2017

2018

1100
1941
325
2432
204
1416
494
2814
515
11241

0
207
0
240
1110
284
571
21
0
2433

0
352
0
309
1290
0
551
1020
0
3522

0
439
0
425
0
0
0
385
0
1249

0
392
0
425
0
0
0
104
0
920

0
424
0
425
0
0
0
81
0
930

0
433
0
425
0
0
0
2
0
860

0
400
0
425
0
0
0
2
0
827

0
391
0
425
0
0
0
2
0
818

5850
0
4
4937
36
0
0
10827

1671
0
0
758
0
172
0
2601

1851
0
0
711
0
212
0
2774

0
0
0
535
0
307
0
842

0
0
0
151
0
408
0
559

0
0
0
72
0
506
0
578

0
0
0
5
0
500
0
505

0
0
0
5
0
250
0
255

0
0
0
5
0
250
0
255

62

III
IV
V

Surplus
Opening Balance
Closing Balance

414
0
414

-168
414
246

748
246
994

407
994
1402

361
1402
1763

351
1763
2114

355
2114
2469

572
2469
3041

563
3041
3605

63

ANNEXURE - X
PROJECTED BALANCE SHEET

Sr. Particulars/ March End

I
Liabilities
Share Capital
Reserves & Surplus
Revaluation Reserve
Long Term Loans
WC Loans
Unsecured Loans
Current Liabilities
Def. Tax Liabilities
Total
II Assets
Gross Block
Less: Depreciation
Net Block
Investments
Current Assets
Cash & Bank Balance
Miscellaneous Expenses
Total

2012

2013

2014

2015

2016

2017

2018

(Rs. in Lacs)
2019
2020

1100
1941
325
204
1416
494
2814
515
8809

1100
2148
325
1142
1700
1065
2835
515
10829

1100
2500
325
2220
1700
1616
3854
515
13830

1100
2939
325
1913
1700
1616
4240
515
14348

1100
3331
325
1505
1700
1616
4343
515
14435

1100
3755
325
1000
1700
1616
4423
515
14434

1100
4188
325
500
1700
1616
4426
515
14369

1100
4588
325
250
1700
1616
4428
515
14521

1100
4979
325
0
1700
1616
4430
515
14665

5850
2432
3418
4
4937
414
36
8809

7521
2672
4849
4
5695
246
36
10829

9372
2982
6390
4
6405
994
36
13830

9372
3406
5966
4
6940
1402
36
14348

9372
3831
5541
4
7091
1763
36
14435

9372
4256
5116
4
7163
2114
36
14434

9372
4680
4692
4
7168
2469
36
14369

9372
5105
4267
4
7173
3041
36
14521

9372
5530
3842
4
7178
3605
36
14665

64

III

Financial Ratios
Net Worth (Rs. Crs) *
Total Debts/Net Worth*
Debt/Equity *
Net FA/Total Debts
Net FA/Term Loans
CA/CL
Net CA/WC Loan

3520
1.40
0.20
4.90
16.75
1.27
1.79

3727
1.81
0.59
2.20
4.25
1.31
1.83

4079
2.30
0.94
1.67
2.88
1.33
2.09

4518
2.10
0.78
1.69
3.12
1.40
2.41

4910
5334
5767
6167
1.87
1.64
1.43
1.30
0.64
0.49
0.37
0.30
1.78
1.96
2.22
2.29
3.68
5.12
9.38
17.07
1.47
1.52
1.57
1.67
2.65
2.86
3.07
3.40
*Without Revaluation Reserve

6558
1.18
0.25
2.38
NA
1.76
3.74

65

ANNEXURE - XI
SENSITIVITY ANALYSIS
A) Projected Profitability at Selling Price Low by 2%

Sr. Particulars/March End

1) Income
Gross Sales
Less: Duty &Taxes
Net Sales
Add: Other Income
Total Income
2) Operating Cost
Raw Materials
Stores and Spares
Packing Material
Power & Fuel
Labour Charges
Other Factory Overheads
Repairs & Maintenance
Employees Cost
Resold Goods Cost
Total
Add: Opening Stock of FG
Less: Closing Stock of FG
Cost of Production

2012

2013

2014

2015

2016

2017

2018

(Rs. in Lacs)
2019
2020

9851 10984 15027 16689 17149 17502 17502 17502

209
237
510
566
582
594
594
594
9642 10747 14517 16123 16567 16908 16908 16908
52
60
120
120
120
120
120
120
9694 10807 14637 16243 16687 17028 17028 17028

17502
594
16908
120
17028

5687
226
100
1245
41
206
34
222
704
8465
40
38
8467

11156
384
198
2241
60
301
120
328
0
14787
85
90
14782

7011 9700 10690 10954 11156 11156 11156

281
329
366
376
384
384
384
124
170
189
194
198
198
198
1314 1867 2094 2174 2241 2241 2241
45
51
57
59
60
60
60
225
258
287
295
301
301
301
51
75
94
98
103
108
114
233
245
257
270
283
298
312
0
0
0
0
0
0
0
9283 12696 14034 14419 14726 14745 14766
38
40
50
60
70
75
80
40
50
60
70
75
80
85
9281 12686 14024 14409 14721 14740 14761

66

4)

6)
8)

9)
10)
11)
12)
13)

Gross Profit
Directors Remuneration
Admn. & Gen. Expenses
Selling & Dist. Expenses
EBDIT
Interest Loans
Other Fin. Charges
Total Financial Charges
Depreciation
Profit Before Tax
Taxation Provision
Profit After Tax
Dividend/Adjustments
Retained Profit
Cash Accruals
Average BEP
Cumulative Gross DSCR
Cumulative Net DSCR
IRR

1227
34
111
106
976
203
284
487
216
273
91
182
0
182
398

1525
36
117
220
1153
370
225
595
240
318
112
207
0
207
447

1951
39
122
376
1414
703
250
953
309
152
30
121
0
121
430

2219
55
128
501
1535
680
250
930
425
180
14
166
0
166
591

2278
58
135
514
1571
634
250
884
425
262
92
170
0
170
595

2307
61
142
525
1580
575
250
825
425
331
132
198
0
198
623

2288
64
149
525
1550
509
250
759
425
367
160
207
0
207
632

2268
64
156
525
1523
460
300
760
425
338
163
174
0
174
599

2246
64
164
525
1494
428
300
728
425
341
176
165
0
165
590
84%
1.50
1.73
22%

67

ANNEXURE - XI
SENSITIVITY ANALYSIS
B)

Sr. Particulars/March End

1) Income
Gross Sales
Less: Duty &Taxes
Net Sales
Add: Other Income
Total Income
2) Operating Cost
Raw Materials
Stores and Spares
Packing Material
Power & Fuel
Labour Charges
Other Factory Overheads
Repairs & Maintenance
Employees Cost
Resold Goods Cost
Total
Add: Opening Stock of FG
Less: Closing Stock of FG
Cost of Production

Projected Profitability at Raw material Price High by 3%

2012

2013

2014

2015

2016

2017

2018

(Rs. in Lacs)
2019
2020

9851 10984 15334 17030 17499 17859 17859 17859

209
237
520
578
594
606
606
606
9642 10747 14813 16452 16905 17253 17253 17253
52
60
120
120
120
120
120
120
9694 10807 14933 16572 17025 17373 17373 17373

17859
606
17253
120
17373

5687
226
100
1245
41
206
34
222
704
8465
40
38
8467

11491
384
198
2241
60
301
120
328
0
15122
85
90
15117

7011 9991 11011 11282 11491 11491 11491

281
329
366
376
384
384
384
124
170
189
194
198
198
198
1314 1867 2094 2174 2241 2241 2241
45
51
57
59
60
60
60
225
258
287
295
301
301
301
51
75
94
98
103
108
114
233
245
257
270
283
298
312
0
0
0
0
0
0
0
9283 12987 14354 14747 15061 15080 15100
38
40
50
60
70
75
80
40
50
60
70
75
80
85
9281 12977 14344 14737 15056 15075 15095

68

4)

6)
8)

9)
10)
11)
12)
13)

Gross Profit
Directors Remuneration
Admn. & Gen. Expenses
Selling & Dist. Expenses
EBDIT
Interest Loans
Other Fin. Charges
Total Financial Charges
Depreciation
Profit Before Tax
Taxation Provision
Profit After Tax
Dividend/Adjustments
Retained Profit
Cash Accruals
Average BEP
Cumulative Gross DSCR
Cumulative Net DSCR
IRR

1227
34
111
106
976
203
284
487
216
273
91
182
0
182
398

1525
36
117
220
1153
370
225
595
240
318
112
207
0
207
447

1956
39
122
383
1411
703
250
953
309
149
30
119
0
119
429

2227
55
128
511
1533
680
250
930
425
178
13
164
0
164
589

2287
58
135
525
1570
634
250
884
425
261
92
170
0
170
594

2318
61
142
536
1580
575
250
825
425
330
132
198
0
198
623

2298
64
149
536
1550
509
250
759
425
366
160
207
0
207
631

2278
64
156
536
1522
460
300
760
425
337
163
174
0
174
599

2257
64
164
536
1493
428
300
728
425
341
176
165
0
165
590
84%
1.50
1.73
22%

69

ANNEXURE - XII
BASIS OF PROJECTED PROFITABILITY

Sr.
1)

2)

3)

4)
i)

ii)

Particulars/March End
Installed Capacity (MT)
News Print B/A Grade
Wr. & Pr. Paper
Total
Capacity Utilisation (%)
News Print B/A Grade
Wr. & Pr. Paper
Total
Production (MT)
News Print B/A Grade
Wr. & Pr. Paper
Total
Sales
Selling Price Rs./MT
News Print B/A Grade
Wr. & Pr. Paper
Net Sales
News Print B/A Grade
Wr. & Pr. Paper
Total Rs. Lacs

2013

2014

2015

(Rs. in Lacs)
2016
2017

46500 36750 36750 36750

0 18900 18900 18900
46500 55650 55650 55650

36750
18900
55650

79.57
0
79.57

92.38
76.98
87.15

94.29
78.57
88.95

37000 29750 33040 33950

0 12750 14160 14550
37000 42500 47200 48500

34650
14850
49500

29045 32350 32350 32350

0 40700 40700 40700

32350
40700

10747 9624 10688 10983

0 5189 5763 5922
10747 14813 16452 16905

11209
6044
17253

80.95
67.46
76.37

89.90
74.92
84.82

70

iii)

5)
i)

Duties & Taxes

News Print Edn Cess (0.129%)
Wr. & Pr. Paper ED (Average 4%)
News Print-A Grade ST (2%)
Wr. & Pr. Paper ST (2%)
Total
Gross Sales
Raw Materials Cost
Waste Paper
WP MT/Output MT
News Print B/A Grade
Wr. & Pr. Paper
WP Consumption MT
News Print B/A Grade
Wr. & Pr. Paper
WP Cost Rs./MT
News Print B/A Grade
Wr. & Pr. Paper
WP Cost Rs. Lacs
News Print B/A Grade
Wr. & Pr. Paper
Total WP Cost Rs. Lacs

22
0
215
0
237
10984

12
208
192
108
520
15334

14
231
214
120
578
17030

14
237
220
123
594
17499

14
242
224
125.71
606
17859

1.29
0

1.25
1.20

1.25
1.20

1.25
1.20

1.25
1.20

47764
0

37188
15300

41300
16992

42438
17460

43313
17820

12850
0

12900
16500

13000
16500

13000
16500

13000
16500

6138
0
6138

4797
2525
7322

5369
2804
8173

5517
2881
8398

5631
2940
8571

71

ii)

iv)

6)

7)

8)

Chemicals Cost
Cost Rs./MT
News Print B/A Grade
Wr. & Pr. Paper
Cost Rs. Lacs
News Print B/A Grade
Wr. & Pr. Paper
Total Cost Rs. Lacs
Steam Coal Cost
Cost Rs./MT
Total Cost Rs. Lacs
Tota RM Cost Rs. Lacs
Stores & Spares
Rs./MT FG
Cost Rs. Lacs
Packing Material
Rs./MT Output
Cost Rs. Lacs
Power & Fuel Cost
Cost Rs./MT
News Print B/A Grade
Wr & Pr Paper
Cost Rs. Lacs
News Print B/A Grade
Wr & Pr Paper
Total Cost Rs. Lacs

694
0

2500
4000

2500
4000

2500
4000

2500
4000

257
0
257

1125
510
1635

1125
566
1691

1125
582
1707

1125
594
1719

1692
616
7011

1750
744
9991

1750
826
11011

1750
849
11282

1750
866
11491

759
281

775
329

775
366

775
376

775
384

336
124

400
170

400
189

400
194

400
198

3502
0

4608
3888

4672
3888

4736
3888

4800
3888

1314
0
1314

1371
496
1867

1544
551
2094

1608
566
2174

1663
577
2241

72

9)

10)

11)
12)
13)
14)
15)

Labour Charges
Rs./Mt Output
Total Labour Charges
Other Factory Overheads
Rs./Mt Output
Total Cost
Repairs & Maintenance
Employees Cost (5% Increase)
Directors Remuneration (5% Inc.)
Admn. Exps (5% Increase)
Selling & Distn. Exps (2%)

121
45

121
51

121
57

121
59

121
60

608
225
51
233
36
117
220

608
258
75
245
39
122
383

608
287
94
257
55
128
511

608
295
98
270
58
135
525

608
301
103
283
61
142
536

73

ANNEXURE -XIII
INTEREST AND REPAYMENT OF LOANS
Sr. Particulars/March End
1) SBI TL-1
OP. Balance
Repayment
CL. Balance
Average Balance
Interest @ 13.25 %
2) SBI TL-2
OP. Balance
Repayment
CL. Balance
Average Balance
Interest @ 13.25 %
3) SBI Vehicle Loan-1
OP. Balance
Repayment
CL. Balance
Average Balance
Interest @ 11.50 %

(Rs. Lacs)
2019 2020

2013

2014

2015

2016

2017

2018

40
40
0
20
3

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

130
125
5
68
9

5
5
0
3
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

18
3
15
17
2

15
4
11
13
1

11
4
7
9
1

7
5
2
5
1

2
2
0
1
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

74

4)

5)

6)

7)

SBI Vehicle Loan-2

OP. Balance
Repayment
CL. Balance
Average Balance
Interest @ 11.50 %
Mahindra & Mahindra
OP. Balance
Repayment
CL. Balance
Average Balance
Interest @ 11.50%
New TL-1
OP. Balance
Repayment
CL. Balance
Average Balance
Interest @ 13%
New TL-2
OP. Balance
Repayment
CL. Balance
Average Balance
Interest @ 13 %

14
2
12
13
1

12
2
10
11
1

10
3
7
9
1

7
3
4
6
1

4
4
0
2
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

2
1
1
0
0

1
1
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

1100
0
1100
1100
72

1100
100
1000
1050
137

1000
200
800
900
117

800
200
600
700
91

600
300
300
450
59

300
300
0
150
20

0
0
0
0
0

0
0
0
0
0

210
0
210
210
1

1300
100
1200
1250
163

1200
100
1100
1150
150

1100
200
900
1000
130

900
200
700
800
104

700
200
500
600
78

500
250
250
375
49

250
250
0
125
16

75

Term Loan Opening Balance

Term Loan Repayment
Term Loan Closing Balance
Total Term Loans Interest
7)

8)

9)

Working Capital Loan

Outstanding
Interest @ 12.75 %
Unsecured Loans
Outstanding
Interest @ 12%
Other Financial Charges

1515
172
1344
88

2433
212
2221
302

2221
307
1914
269

1914
408
1506
222

1506
506
1000
163

1000
500
500
98

500
250
250
49

250
250
0
16

2200
194

1600
218

1600
218

1600
218

1600
218

1600
218

1600
218

1600
218

1065
88

1616
183

1616
194

1616
194

1616
194

1616
194

1616
194

1616
194

225

250

250

250

250

250

300

300

76

ANNEXURE -XIV
DEPRECIATION PROVISIONS
A)

Sr. Particulars/March End

1)
2)
3)
4)
5)
6)
7)
8)
9)

Land
Buildings (3.34%)
Office, Godown, Site Dev
(1.63%)
Plant & Machinery (5.28)
Office Equipments (4.75%)
Computers (16.21%)
Furniture & Fixtures (6.33%)
Vehicles (9.5%)
Total
CWIP
Total

Depreciation Provision (SLM)

2012
Value Depr'n
278
0
541
18
1268
3526
20
17
18
111
5779
71
5850

21
186
1
3
1
11
240
0
240

2013
Value Depr'n
278
0
541
18
1268
5268
20
17
18
111
7521
0
7521

21
186
1
3
1
11
240
0
240

2014
Value Depr'n
278
0
814
25
1268
6846
20
17
18
111
9372
0
9372

21
248
1
3
1
11
309
0
309

(Rs. in Lacs)
2015
Value Depr'n
278
0
814
27
1268
6846
20
17
18
111
9372
0
9372

21
361
1
3
1
11
425
0
425

77

B)
Sr. Particulars/March End
1) Land
Value
Depreciation (0%)
2) Buildings
Value
Depreciation (10%)
3) Office Block Site Dev
Value
Depreciation (10%)
4) Plant & Machinery
Value
Depreciation (15%)
4) Plant & Machinery New
Value
Depreciation (35%/15%)
5) Computers
Value
Depreciation (60%)
6) Furniture & Fixtures
Value
Depreciation (10%)

7)

Vehicles

Depreciation Provision (WDV)

2013

2014

2015

2016

2017

2018

2019

2020

267
0

267
0

267
0

267
0

267
0

267
0

267
0

267
0

884
88

1069
107

962
96

866
87

779
78

701
70

631
63

568
57

11
1

10
1

9
1

8
1

7
1

6
1

6
1

5
1

442
66

376
56

319
48

271
41

231
35

196
29

167
25

142
21

0
0

3249
1137

2112
317

1795
269

1526
229

1297
195

1102
165

937
141

1
1

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

78

8)

9)

Value
Depreciation (15%)
ETP
Value
Depreciation (100%)
WIP
Value
Depreciation (15%)
Total Net Block
Total Depreciation

69
10

59
9

50
7

42
6

36
5

31
5

26
4

22
3

48
48

0
0

0
0

0
0

0
0

0
0

0
1

0
2

1671
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

3393
215

5029
1310

3719
469

3250
404

2846
348

2498
299

2199
259

1941
224

79

ANNEXURE - XV
TAXATION PROVISION
(Rs. Lacs)
Sr. Particulars/March End
1) Taxable Profit
Profit Before Tax
Add Depreciation SLM
Total
Less Depreciation WDV
2) Taxable Profit
3) Taxation Provision
Tax @ 32.45%
MAT Credit availed
MAT @ 20%
Tax Payable

2013

2014

2015

2016

2017

2018

2019

2020

318
240
559
215
344

440
309
749
1310
-561

499
425
923
469
454

590
425
1014
404
611

665
425
1090
348
742

701
425
1126
299
826

672
425
1097
259
838

675
425
1100
224
876

112
0
64
112

-182
0
88
88

147
88
100
59

198
0
118
198

241
0
133
241

268
0
140
268

272
0
134
272

284
0
135
284