PROJECT REPORT

BRICKES MACHINERY TERM LOAN

Prepared for:

MAA VAISHNO BRICK FIELD (PROP. YASHVIR SINGH)

Registered Address: KH. NO 188/1, VILL-BIJROL DIST-BAGHPAT, UP -250611.

Prepared by:

CA KUSHAL SINGH
M.NO.:-532150
FOR: Hemant Shah & Associates LLP
Chartered Accountants

Reg. Office:- Office No-321, Metroplex East Mall, Old Radhu Place, Laxmi Nagar,
New Delhi- 110092.

1
1. Introduction

The construction sector is an important part of the Indian economy with the
contribution of 10% in the GDPand is registering an annual growth of 9%. Clay fired
bricks are the backbone of this sector. The Indian brick industry is the second largest
producer of bricks in the world after China. India is estimated to produce more than
14000 crores of bricks annually, mainly by adopting age-old manual traditional
processes. The brick sector consumes more than 24 million tonnes of coals annual
along with huge quantity of biomass fuels. The per annum CO2 emissions from Indian
brick industry are estimated to be 42 million tonnes. Due to large scale construction
activities in major towns and cities, a number of brick plants have been set up on the
outskirts of these cities. These clusters are the source of local air pollution affecting
local population, agriculture and vegetation.

For the production of clay bricks, top soil to the extent of 350 million tonnes is
used every year, which is a reason for concern. Since this brick sector is labour
intensive, it limits its capacity to produce any other type of bricks. With the introduction
of NREGA scheme in various states, these labour intensive industries are facing the
shortage of manpower. Thus the brick industry has started exploring other options like
introduction of partial/full-scale mechanization in this sector.

While studying the market in the developed countries, it has been observed that
they have completely switched over from solid brick to other resource efficient products
like perforated bricks and hollow bricks. These products consume less fuel(coal,
biomass etc.) and raw material (fertile top soil) for their production and have better
insulation properties during its usage.

A number of legislations/ legal obligations have been passed by the Indian

Government such as “Energy Conservation and Building Code (ECBC)”, which
encourages construction sector to adopt energy efficient and energy saving products,
leading to green building design. The use of “Resource Efficient Bricks” (REB), would
also lead to the compliance of such legislations. In view of the scarcity of raw material
such as top soil and coal as fuel, the production of REBs is the better option.

About UNDP-GEF Project

With an objective of reduction in energy consumption and restrict Green House

Gases (GHG) emissions by creating appropriate infrastructure for sustained adoption of
new and improved technologies for production and use of REBs in India, the United
Nations Development Programme has sanctioned a project “Energy Efficiency
Improvement in Indian Brick Industry”. Under this project, 5 Local Resource Centres
(LRCs) in different regions covering North, South, East, West and North East have been
set up. The LRCs would facilitate adoption of REB technologies, disseminate
promotional material for REBs, create awareness amongst architects, builders and
other end-users including government departments for uptake of REBs and prepare
DPRs for availing loans from financial institutions and banks.
Why REBs are important?

The present day constructions have RCC (Reinforced Concrete Cement)

columns and mainly bricks are used as partition walls. They are no longer being used
as load bearing walls in majority of the buildings. A shift towards REBs would help
saving fuel and reducing pollution in brick production process. There is also significant
reduction in the consumption of top (agricultural) soil which is the main raw material in
brick making. Increased use of REBs in building construction would also help in
reducing the energy consumption of buildings due to their better insulation properties.

Advantage of REBs

 Uniform product size and better finish

 Improving crushing strength of extruded products (200 to 300 kg/cm2)
 Resource savings – Energy (up to 20%) and top soil (up to 30%)
 Reduction in masonry costs and plaster requirements
 Reduced cooling/heating load requirements.

Present Scenario

As mentioned in the introduction, most of the brick kiln entrepreneurs use

traditional methods of green brick production, brick firing and its sale. In North India,
solid clay fired bricks are available in the market. There are only a few mechanized
plants involving clay preparation by machine, with limited production capacity (about 20-
30% of its daily production). Due to shortage of trained manpower and labour, the
quality of moulding of green brick has deteriorated with the result, percentage of first
quality of fired bricks has decreased. Recently, the Delhi Administration under the
Scheme Jawaharlal Nehru Low Cost Housing Scheme, has been promoting the use of
energy efficient bricks such as perforated bricks. The production of REB involves
mechanization in the moulding process. As a result, two mechanized plants have been
set up on the outskirts of Delhi catering to the demand to certain extent. As regards the
general public, the level of awareness for the use of perforated/hollow bricks is very low.
Hence, they prefer to use solid bricks.

Over the years, the level of curiosity for identification of appropriate technology,
suitable for their soils and requirements, has increased amongst the brick
entrepreneurs. Now they are more receptive to the new ideas for improving the quality
of their bricks subject to the criterion that the cost of fired brick should not be that high,
which may lead them into marketing problems.

With the rise in global temperature and high electricity cost, the architects and
the builders have now started catching the idea of use of resource efficient bricks.
However, the level of awareness needs to be strengthened amongst them also by
creating awareness through workshops/meetings.
Opportunities for the Brick Entrepreneurs

A brick kiln owner in North India, on an average, produces about 50,000-60,000

bricks a day. In the process, it engages more than 250 workers. Bsides reducing the
labour force by 40-45%,the introduction of mechanization in the brick making would give
a leading edge to the brick entrepreneur over other manufacturers by giving him an
opportunity to produce varied designs of products. The machine made bricks/blocks,
definitely have better finish and strengths in comparison to hand moulded bricks. This
would give him another chance to fetch better prices in comparison the fellow
manufacturers.

2. Promoter’s Profile

To be submitted by individual entrepreneurs.

3. Basis of Project Concept

 Market potential and industry scenario

The demand for bricks has been increasing with the ever increasing activities in
the construction sector. In the last 10 years the demand for bricks has increased
specially in the major towns and cities. As a result number of new brick plants have
been set up around these cities, which are catering to the local demands. As such
there is a huge market potential.

However, with the introduction of new ECBC code and concept of Green Building
Act (GRIHA rating), the leading architects and builders have now started looking for
options for replacing solid clay fired bricks with more energy efficient products (REBs),
which will not only bring in savings to the brick manufacturers but also will benefit
builders in terms of savings in steel due to lesser deadload of walls, faster pace of
construction, less consumption of mortar etc. which can account for 5-7% savings in
construction cost. In addition, the residents would also save in terms energy bills due to
insulating properties of REBs.

The REBs are already in vogue in the State of Kerala and a no. of units are
coming up around Delhi. The entrepreneur in Punjab are very likely to pickup this
activity in near future in a big way.
4. Project Description

 Objective

The primary objective of this report is to facilitate ______________________

with required technical as well as financial know-how for setting up of unit for the
production of resource efficient bricks. With the introduction of Green Building Act and
energy efficient products in the construction sector, the requirement of REBs is likely to
replace the conventional solid clay fired bricks. The report addresses all the information
regarding setting of project, the technology selection, project requirements for
machinery and equipment, technology, finance, project implementation, process
operation, skill selection etc. This report will serve as a complete guide on starting up
such a new project that all necessary feasibility criteria are looked into and are self-
sustainable entity, giving reasonably handsome returns on the capital as well as
investment with ample scope for scaling up the operations.

 Output

The total installed production capacity of the unit is about 100 lakhs REBs per
annum. In the beginning of the project cycle, the throughput has been assumed as 70%
for REBs.

 Proposed Products

The project proposes to produce perforated bricks/blocks with perforations varied

from 10-20%, modular bricks and tiles.

 Know-how and Compliances

The technical know-how for machinery would be provided by the supplier who
will ensure the successful commissioning of the plant, supply its spare parts for the first
year and help in troubleshooting, if any. Further, any support for production and
marketing would be provided by the Local Resource Centre set up under UNDP-GEF
project. If needed, LRC can arrange an expert of national/international repute through
implementing agency for technical know-how. All the aspects relating to pollution
control will be taken care of during construction and production process.

 Project Profile – REBs

 Raw material availability

 Market opportunities

 Manufacturing process

DIGGING & EXCAVATION

CLAY PREPARATION

BRICK MOULDING

DRYING

LOADING

FIRING

UNLOADING
 MAA VAISHNO BRICK FIELD

PROJECT COST AND SOURCE OF FINANCE Amount (Rs.)

(A) Capital Investment TOTAL

Machinery and Equipments 830000.00

Total Project Cost 830000.00

SOURCES : TOTAL

Bank Loan ( on Machinery) (75%) 622500.00

Own Capital
1. Margin Money for Machinery (25%) 207500.00

Total 830000.00
 MAA VAISHNO BRICK FIELD
KH. NO 188/1, BIJROL DIST-BAGHPAT, UP -250611.

PROJECTED PROFITABILITY STATEMENT

YEARS Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26

No of Brickes 3750000 4500000 5400000 5400000 5400000 5400000
Capicity Used 70% 90% 90% 90% 90% 90%
MAIN PRODUCT SALE
Avg. Sale price per brickes 3.00 3.00 3.00 3.00 3.00 3.00
1 Total Sale of Brickes 11,250,000.00 13,500,000.00 16,200,000.00 16,200,000.00 16,200,000.00 16,200,000.00
2 Transporatation Charges Rec. 562,500.00 675,000.00 810,000.00 810,000.00 810,000.00 810,000.00

TOTAL 11,812,500.00 14,175,000.00 17,010,000.00 17,010,000.00 17,010,000.00 17,010,000.00

PURCHASE (A)
Fire Wood & Uppla 5,062,500.00 6,075,000.00 7,290,000.00 7,290,000.00 7,290,000.00 7,290,000.00

DIRECT EXPENDITURE (B)

1 Rent Land 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00
2 Royalty Paid 300,000.00 350,000.00 350,000.00 350,000.00 350,000.00 350,000.00
3 Rent MITTI Khudai 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00
4 Pathai Exp. 1,771,875.00 2,126,250.00 2,551,500.00 2,551,500.00 2,551,500.00 2,551,500.00
5 Bharai Exp. 472,500.00 567,000.00 680,400.00 680,400.00 680,400.00 680,400.00
6 Niakasi Exp. 383,906.25 460,687.50 552,825.00 552,825.00 552,825.00 552,825.00
7 Baildari Exp. 413,437.50 496,125.00 595,350.00 595,350.00 595,350.00 595,350.00
8 Rabbish Exp. 413,437.50 496,125.00 595,350.00 595,350.00 595,350.00 595,350.00
9 Jalai Exp. 425,250.00 510,300.00 612,360.00 612,360.00 612,360.00 612,360.00
10 Sand Exp. 10,000.00 11,000.00 11,000.00 11,000.00 11,000.00 11,000.00
TOTAL (B) 5,490,406.25 6,317,487.50 7,248,785.00 7,248,785.00 7,248,785.00 7,248,785.00

C TOTAL (A+B) 10,552,906.25 12,392,487.50 14,538,785.00 14,538,785.00 14,538,785.00 14,538,785.00

D Gross Profit (A-B) 1,259,593.75 1,782,512.50 2,471,215.00 2,471,215.00 2,471,215.00 2,471,215.00

INDIRECT EXPENDITURE €
1 Salary to Admin. Staff 240,000.00 240,000.00 240,000.00 240,000.00 240,000.00 240,000.00
2 Freight Outward Exp. 2% 236,250.00 283,500.00 340,200.00 340,200.00 340,200.00 340,200.00
3 Depreciation (As per Annexure) 62,250.00 115,162.50 97,888.13 83,204.91 70,724.17 60,115.54

TOTAL (E) 538,500.00 638,662.50 678,088.13 663,404.91 650,924.17 640,315.54

NET Profit Before Interst & Tax [D-E] 721,093.75 1,143,850.00 1,793,126.88 1,807,810.09 1,820,290.83 1,830,899.46
Interest on Machinery Loan@12% P.A. 36,191.00 63,551.00 50,537.00 35,872.00 19,347.00 2,832.00
Profit before Taxation 684,902.75 1,080,299.00 1,742,589.88 1,771,938.09 1,800,943.83 1,828,067.46
Provision for Taxation@ 30% 205,470.83 324,089.70 522,776.96 531,581.43 540,283.15 548,420.24
Profit after Taxation 479,431.93 756,209.30 1,219,812.91 1,240,356.67 1,260,660.68 1,279,647.22
 MAA VAISHNO BRICK FIELD

Principal Amount 622,500.00 EMI 13,847.17

Interest Rate (%) 12.00 Total Interest 208,330.12
Tenure (in Months) 60 Total Amount Paid 830,830.12
EMI Start Date 24 Sept 2020 EMI End Date 24 Aug 2025

EMI Number EMI Monthly Principal Monthly Interest Outstanding Balance ANNUAL INT. YEAR
622,500.00
1 13,847.17 7,622.17 6,225.00 614,877.83
2 13,847.17 7,698.39 6,148.78 607,179.44
3 13,847.17 7,775.37 6,071.79 599,404.07
4 13,847.17 7,853.13 5,994.04 591,550.94
5 13,847.17 7,931.66 5,915.51 583,619.28
6 13,847.17 8,010.98 5,836.19 575,608.30 36,191.00 2020-21
7 13,847.17 8,091.09 5,756.08 567,517.22
8 13,847.17 8,172.00 5,675.17 559,345.22
9 13,847.17 8,253.72 5,593.45 551,091.50
10 13,847.17 8,336.25 5,510.92 542,755.25
11 13,847.17 8,419.62 5,427.55 534,335.64
12 13,847.17 8,503.81 5,343.36 525,831.82
13 13,847.17 8,588.85 5,258.32 517,242.97
14 13,847.17 8,674.74 5,172.43 508,568.23
15 13,847.17 8,761.49 5,085.68 499,806.75
16 13,847.17 8,849.10 4,998.07 490,957.65
17 13,847.17 8,937.59 4,909.58 482,020.05
18 13,847.17 9,026.97 4,820.20 472,993.09 63,551.00 2021-22
19 13,847.17 9,117.24 4,729.93 463,875.85
20 13,847.17 9,208.41 4,638.76 454,667.44
21 13,847.17 9,300.49 4,546.67 445,366.94
22 13,847.17 9,393.50 4,453.67 435,973.44
23 13,847.17 9,487.43 4,359.73 426,486.01
24 13,847.17 9,582.31 4,264.86 416,903.70
25 13,847.17 9,678.13 4,169.04 407,225.57
26 13,847.17 9,774.91 4,072.26 397,450.66
27 13,847.17 9,872.66 3,974.51 387,577.99
28 13,847.17 9,971.39 3,875.78 377,606.61
29 13,847.17 10,071.10 3,776.07 367,535.50
30 13,847.17 10,171.81 3,675.36 357,363.69 50,537.00 2022-23
31 13,847.17 10,273.53 3,573.64 347,090.16
32 13,847.17 10,376.27 3,470.90 336,713.89
33 13,847.17 10,480.03 3,367.14 326,233.86
34 13,847.17 10,584.83 3,262.34 315,649.03
35 13,847.17 10,690.68 3,156.49 304,958.35
36 13,847.17 10,797.59 3,049.58 294,160.77
37 13,847.17 10,905.56 2,941.61 283,255.21
38 13,847.17 11,014.62 2,832.55 272,240.59
39 13,847.17 11,124.76 2,722.41 261,115.83
40 13,847.17 11,236.01 2,611.16 249,879.82
41 13,847.17 11,348.37 2,498.80 238,531.45
42 13,847.17 11,461.85 2,385.31 227,069.59 35,872.00 2023-24
43 13,847.17 11,576.47 2,270.70 215,493.12
44 13,847.17 11,692.24 2,154.93 203,800.88
45 13,847.17 11,809.16 2,038.01 191,991.72
46 13,847.17 11,927.25 1,919.92 180,064.47
47 13,847.17 12,046.52 1,800.64 168,017.95
48 13,847.17 12,166.99 1,680.18 155,850.96
49 13,847.17 12,288.66 1,558.51 143,562.30
50 13,847.17 12,411.55 1,435.62 131,150.75
51 13,847.17 12,535.66 1,311.51 118,615.09
52 13,847.17 12,661.02 1,186.15 105,954.07
53 13,847.17 12,787.63 1,059.54 93,166.44
54 13,847.17 12,915.50 931.66 80,250.94 19,347.00 2024-25
55 13,847.17 13,044.66 802.51 67,206.28
56 13,847.17 13,175.11 672.06 54,031.18
57 13,847.17 13,306.86 540.31 40,724.32
58 13,847.17 13,439.93 407.24 27,284.39
59 13,847.17 13,574.32 272.84 13,710.07
60 13,847.17 13,710.07 137.10 0.00 2,832.00 2025-26
MAA VAISHNO BRICK FIELD
DEPRECEATION CHART
S.NO PARTICULARS Dep. Rate
Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26

1 New Machine
Gross Block 15% 830000 767750 652588 554699 471494 400770
Less: Depreceation 62250 115163 97888 83205 70724 60116
Net Block 767750 652588 554699 471494 400770 340655
 MAA VAISHNO BRICK FIELD
KH. NO 188/1, BIJROL DIST-BAGHPAT, UP -250611.

PROJECTED BALANCE SHEET

S.NO PARTICULARS Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26

Opening Capital 1290000 1276932 1183141 1502954 1743311 2003971

Add: Capital Addition 207500 0 0 0 0 0
Add: Profit & Loss A/c 479432 756209 1219813 1240357 1260661 1279647
Less: Drawings 700000 850000 900000 1000000 1000000 1000000
1 Closing Capital 1276932 1183141 1502954 1743311 2003971 2283619

2 Machine Term Loan 575608 472993 357364 227070 80251 0

3 Current Liability
Sundry Creditors (15 days) 208048 249658 299589 299589 299589 299589
Provision & Exp.Payable(15 day) 225633 259623 297895 297895 297895 297895
Total Current Liabilities (3) 433681 509280 597484 597484 597484 597484

Total Liabilities (1 +2+ 3) 2286221 2165415 2457802 2567865 2681707 2881103

4. Fixed Assets:- Net

Machinery 767750 652588 554699 471494 400770 340655
Total 767750 652588 554699 471494 400770 340655

5. Current Assets:-
Cash & Bank Balance 547581 347759 505021 698288 882854 1142366
Sundry Debetors (30 days) 970890 1165068 1398082 1398082 1398082 1398082
Total 1518471 1512827 1903103 2096370 2280936 2540448

Total Assets (4+5) 2286221 2165415 2457803 2567865 2681706 2881103

 MAA VAISHNO BRICK FIELD

CALCULATION OF SOME IMPORTANT RATIOS

PARTICULARS Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26

NET PROFIT (PAT) 479,431.93 756,209.30 1,219,812.91 1,240,356.67 1,260,660.68 1,279,647.22

INTEREST ON TERM LOAN 36,191.00 63,551.00 50,537.00 35,872.00 19,347.00 2,832.00
PROVISION OF TAXATION 205,470.83 324,089.70 522,776.96 531,581.43 540,283.15 548,420.24

TOTAL (X) (PBIT) 721,093.75 1,143,850.00 1,793,126.88 1,807,810.09 1,820,290.83 1,830,899.46

INTREST ON TERM LOAN 36,191.00 63,551.00 50,537.00 35,872.00 19,347.00 -

TOTAL (Y) 36,191.00 63,551.00 50,537.00 35,872.00 19,347.00 -

INTREST SERIVCE COVERAGE 19.92 18.00 35.48 50.40 94.09

RATIO ( X/Y)

NET PROFIT 479,431.93 756,209.30 1,219,812.91 1,240,356.67 1,260,660.68 1,279,647.22

SALES 11,812,500 14,175,000 17,010,000 17,010,000 17,010,000 17,010,000

NET PROFIT/ SALES 0.04 0.053 0.072 0.073 0.074 0.075

PBIT 721,093.75 1,143,850.00 1,793,126.88 1,807,810.09 1,820,290.83 1,830,899.46

DEPRECIATION 62,250.00 115,162.50 97,888.13 83,204.91 70,724.17 60,115.54
PBDIT 783,343.75 1,259,012.50 1,891,015.00 1,891,015.00 1,891,015.00 1,891,015.00

TOTAL ASSETS 2,286,221 2,165,415 2,457,803 2,567,865 2,681,706 2,881,103

I.S.C.R. 0.34 0.58 0.77 0.74 0.71 0.66

NET SALES (O) 11,812,500 14,175,000 17,010,000 17,010,000 17,010,000 17,010,000

TERM LOAN 575,608.30 472,993.09 357,363.69 227,069.59 80,250.94 -

NET SALES/ BANK BORROWING 20.52 29.97 47.60 74.91 211.96 -

MAA VAISHNO BRICK FIELD
D.S.C.R OF PROPOSED PROJECT
CALCULATION OF D.S.C.R Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26
Profit After Tax 479432 756209 1219813 1240357 1260661 1279647

Depreciation 62,250 115,163 97,888 83,205 70,724 60,116

Interest on Loan 36191 63551 50537 35872 19347 322

A) Total of Cash Accrual before Interest 577873 934923 1368238 1359434 1350732 1340085

B) Repayment Obligation

Term Loan Installment (including Interest) 83083 166166 166166 166166 166166 83083

Debt Service Coverage Ratio = A/B 6.96 5.63 8.23 8.18 8.13 16.13

Average DSC:- 8.88