Capital Budgeing

Summer Internship
Project Report
On
Capital Budgeting
At
Evershine Decor Private Limited
Submitted to
Institute Code: 725
KALOL INSTITUTE OF MANAGEMENT
Under the Guidance of

Prof. Jignesh Patel
In partial Fulfillment of the Requirement of the award of the degree of Master of

Business Administration (MBA)
Gujarat Technological University Ahmadabad
Submitted by:
Patel Disha Harshadbhai
187250592087
MBA (Semester III)

June-2019

STUDENT'S DECLARATION
I hereby declare that the Summer Internship Project Report titled "Capital Budget" in Evershine
Decor Private Limited is a result of my own work and my indebtedness to other work
publications, references, if any, have been duly acknowledged. If I am found guilty of copying
from any other report or published information and showing as my original work, or extending
plagiarism limit, I understand that I shall be liable and punishable by the university, which may
include 'Fail' in examination or any other punishment that university may decide.
Enrollment no Name Signature

187250592087 Patel Disha Harshadbhai

EXECUTIVE SUMMARY
I PATEL DISHA HARSHADBHAI, hereby state that the work that has been done in this project
is up to my potential with respect to the scope of the study as well as the time frame. Capital
budget is one of the most trending concepts as well as fast growing segment in the industry.
Industries are capital intensive; hence a lot of money is invested in it. So before investing in
companies one has to carefully study its financial condition and worthiness. An attempt has
been carried out in this project to analyze and interpret the financial statements of a company.
Analysis and Interpretation of financial statements help in determining the liquidity position,
long term solvency, financial viability and profitability of a firm. Ratio analysis shows
whether the company is improving or deteriorating in past years. Moreover, comparison of
different aspects of all the firms can be done effectively with this. It helps the clients to
decide in which firm the risk is less or in which one they should invest so that maximum
benefit can be earned.

PREFACE
“The knowledge of an individual is incomplete without the practical aspect of that knowledge. To
satisfy the same every individual must press to derive the practical knowledge of his field and try
to blend it with the theoretical exposure which he has got into the academic institutions.
During my summer internship program with company “EVERSHINE LTD”, I was able to expose
myself in management field. I heartily enjoy various experience of real life business condition.
In this project, I have tried to analyze Capital Budget situation in context of ratio and different
organization process of “EVERSHINE LTD”.
As a part of 3rd semester MBA, students have to undergo a Summer Internship Program Project,
which is designed keeping the prerogative & preferences of practical aspects in mind. This
particular project allows a student to implement what one has learned within the four walls of
classroom. It is here that the caliber of student is tested to find flexibility for rigorous tasks
assigned in future.
This report submitting intends to highlight my versatility in sustaining the pulls and pressure of
day to day professional life put to perspective the fact that I capable enough to deliver whenever a
challenge is thrown to me.
DISHA PATEL
KIM

ACKNOWLEDGEMENT
I wish to acknowledge the help of all these who have provided me with the
information, guidance and other help during my research without their help it would
have been impossible for me to complete my research report.
In this project report I have drawn on thoughts from a variety of discipline that has
bearing on the different facts of the topics. I own a profound intellectual debt to
numerous authors whose authors have shaped my thinking on this subject.
I am also thankful to GUJARAT TECHNOLOGICAL UNIVERSITY who has
given me this chance of research.
It is the matter of great privilege for me to take the opportunity to thank the KALOL
INSTITUTE OF MANAGEMENT that has given me the opportunity to make the
financial analysis report.
I would also like to thank our Head of Department- Mr. Prakash Raj Kumavat for
allowing and supporting us for the project work.
It is matter of great privilege to express my sincere feeling towards Prof. JIGNESH
PATEL for their valuable advice.
I would also like to thank Manager- Mr. Kantibhai patel as well the whole staff co-
operate for their valuable time, advice and support for the project.
I would also like to acknowledge all those who have directly or indirectly helped me
in completing this project.

CONTENTS
CHAPTER -1 INDUSTRY PROFILE ........................................................................................................................................................... 8
NEED OF THE PROJECT AND ITS IMPORTANCE IN THE COUNTRY ............................................................................................... 9
SCOPE OF THE WORK .......................................................................................................................................................................... 17
IMPACT ASSESSMENT METHODOLOGIES ...................................................................................................................................... 18
SITE VISIT PHOTOGRAPHS ................................................................................................................................................................. 21
CHAPTER – 2 TECHNICAL DESCRIPTION OF THE PROCESS.............................................................................................................................. 2
Reaction Chemistry .................................................................................................................................................................................... 5
Our Vision ................................................................................................................................................................................................. 26
Our Mission .............................................................................................................................................................................................. 26
Product...................................................................................................................................................................................................... 26
Factory Address ........................................................................................................................................................................................ 26
Contact Info .............................................................................................................................................................................................. 26
CHAPTER -3 CAPITAL BUDGEING: ....................................................................................................................................................... 28
CHAPTER-4 COLLECTION OF DATA:- ................................................................................................................................................. 42
CHAPTER NO 5 FINDING ......................................................................................................................................................................... 56
CHAPTER:6 SUGGESTIONS ............................................................................................................................................................................ 58
CHAPTER NO: 7 CONCLUSION .............................................................................................................................................................. 61
REFERENCES ............................................................................................................................................................................................. 62

CHAPTER -1
INDUSTRY PROFILE

CHAPTER -1 INDUSTRY PROFILE
M /s . Ev e r Shine Dé c or Pvt. L td . is proposed to manufacture Resins (Phenol

Formaldehyde, Melamine Formaldehyde & Urea Formaldehyde) at Survey No. : 40, Village
Indrad, Taluka Kadi, District Mehsana, Gujarat for their own consumption and sale purpose.
Production details are given below:
Table: 1.1 Product Details
No. Product Total Quantity ( MT/month)
1. Phenol Formaldehyde Resin 200 MT/month
2. Melamine Formaldehyde Resin 200 MT/month
3. Urea Formaldehyde Resin 240 MT/month
4. Laminated Sheets 1,60,000 Sheets/Month
PURPOSE OF THE REPORT

The proposed final products like Phenol Formaldehyde Resin, Urea Formaldehyde Resin and
Melamine Formaldehyde Resin (being synthetic organic chemicals) falls under Category 5(f)
as stated in Environment Impact Assessment Notification Published on 14th September, 2006.

Further, the location of the proposed project is outside the notified industrial estate and not falls
in small industrial unit criteria. Hence, the project proponent has to obtain the EC from the
Ministry of Environment & Forests, New Delhi. As per the requirements of the notification, an
application was submitted to Ministry of Environment and Forest in 15th March, 2015 along with
Form- 1 and Draft Terms of Reference (TOR). The proposal was considered by Reconstituted
Expert Appraisal Committee (Industry 2) held on 21th July, 2015. Subsequently the Committee
has issued the TOR wide no. J-11011/79/2015-IA II (I) dated 31-8-2015.
Based on the TOR points issued by MoEF, a Draft Environmental Impact Assessment (EIA) report
has been prepared covering all aspects of the TOR.

The purpose of the preparation of Environment Impact Assessment (EIA) report is not
only to obtain Environment Clearance from Ministry of Environment & Forests, Govt. of
India, New Delhi and State Pollution Control Board, but also to understand the likely
impacts and to take Environment Protection measures during and after commissioning
of the project.
NEED OF THE PROJECT AND ITS IMPORTANCE IN THE COUNTRY
Phenol Formaldehyde Resins are found in extremely great number of industrial

products. Phenolic laminates are made by impregnating one or more layers of a base
material such as paper, fiberglass or cotton with phenolic resin and laminating the
resin-saturated base material under heat and pressure.
Melamine Formaldehyde Resin is a hard, thermosetting plastic material made from

melamine and formaldehyde by polymerization. It is then used to cross-link with alkyd,
epoxy, acrylic, and polyester resins, used in surface coatings. Melamine resin is often
used to saturate decorative paper that is laminated under heat and pressure and then
pasted onto particle board; the resulting panel is often called melamine and commonly
used in ready-to-assemble furniture and kitchen cabinets
Urea Formaldehyde Resin is everywhere and used in many manufacturing processes

due to its useful properties. Examples include decorative laminates, textiles, paper,
foundry sand molds, wrinkle resistant fabrics, cotton blends, rayon, corduroy, etc. It is
also used to glue wood together. Urea formaldehyde was commonly used when
producing electrical appliances casing.
In India, good quality raw materials are available at cheap rates, enabling the
manufacturing at low cost. This increases the profit margin as compared to other
players in the world. To meet the current and future market demand, the project
proponent intends to start a new unit.

PROMOTERS AND THEIR BACK GROUND
Sr. Name of Address Contact Age Experience

No. Director Number in
Laminated
Sheet Plant
1 Bhupeshbhai P. C-2/A, M Sterling City, Bopal- 9898186603 47 yrs. 1 yr. in
Gopani Ahmedabad Laminated
sheets plant
2 Kantibhai B. Patel C-303, Sopan Residential-1, 9825701676 45 yrs. 5 yrs. in
Near Gayatri Mandir, Kalol, Laminated
Dist:- Gandhinagar sheets plant
3 Lala kiya A/27, Abhishek Society , 9925055190 46 yrs. 1 yr. in
Sureshbhai Near.India Colony, Bopal, Laminated
Ahmedabad sheets plant
4 Patel Maulik B/14, Tarunnagar Part-1, Near 9638399909 22 yrs. 6 months in
Bharatkumar Subhash chowk, Gurukul Laminated
Road,memnagar,Ahmedabad sheets plant
PROJECT LOCATION
The proposed site is located at Survey No. 40, Village : Indrad, Taluka : Kadi, District:
Mehsana, Gujarat. Proposed site is located 33.6 km from Mehsana, NH 8C is located 20
km and SH 133 is located 0.95 km away from the project site.
The index map is given in Fig. 1.1

Fig. 1.1 Index Map

SITING CRITERIA
The proposed site is selected because of its proximity to availability of raw materials,
consumer centers and infrastructure facilities like land, power, water, communication
etc. The sitting criterion as per the guidelines is given in the following table:
Details Requirement
Forest No forest land shall be converted into No forest land is involved the
non-forest activity for the sustenance proposed site
of the industry (Ref: Forest
Conservation Act, 1980).
Agricultural No prime agricultural land shall be N.A. permission letter is
Land converted into industrial site. attached as Annexure – D.
Odour plants For industry having odour problem it There will be minor odour
shall be a kilometre wide. problem due to Formaldehyde,
but proper ventilation system will
be provided within the
industry.
Layout Storage area, plant area, green belt The total acquired land is 7588 m2
area & utilities should be provided in which is enough for storage, plant,
lay-out plan green belt & utilities. Plant lay-out
is shown in figure
2.4 in chapter – 2 of this EIA.
Residential Major habitation (>3,00,000 Nearest Major habitation is
area population) shall be atleast 1 km found Ahmedabad at a distance
Distance of 29 Km
Ecologically / Shall be at least 1 km distance No ecological sensitive zone
Sensitive found within 1 km distance
Zones
Recreation Distance shall be 2 km from the plant None within 2 km distance

Details Requirement
Other similar Radial distance of two similar plants Nearby industry Amar Décor at
plants should be 5 km distance a distance of 2.72 Km
High way The distance from the NH shall be 0.5 National Highway No. 8 C is at
Km 20 km distance
State High The distance from the SH shall be 0.5 State highway no. 133 is 0.95
way Km km distance
The salient features of the plant surrounding are listed in Table 1.1. The
topographical feature (Topo map no. F43A7, F43A8, F43A12 & F43A11) within 10
km radius distance is shown in Fig 1.2.

Fig. 1.2 Map of 10 km radius showing around plant site

Proposed Project
site M/s. Ever Shine
Décor Pvt. Ltd.
Fig 1.3 Road map showing proposed project site
Fig 1.4 Google image showing proposed project site

Table 1.3 Salient Features with in 10 km radius surroundings
Sr. Important Features Description

No
1 Location Survey No. Survey No. 40,
Village Indrad
Tehsil/Taluka Kadi
District Mehsana
State Gujarat
2 Topomap F43A7, F43A8, F43A12 & F43A11
3 Longitude/Latitude Node Latitude Longitude
A 23°17'22.73"N 72°25'7.13"E
B 23°17'22.61"N 72°25'2.88"E
C 23°17'19.64"N 72°25'4.28"E
4 MSL 70.4 M.
5 Nearest power station UGVCL (Uttar Gujarat Vij Corporation
Limited)
6. Proponent Name Mr. Bhupeshbhai Patel – Director
7 Corporate office address 9898186603.
8 Temperature range 8 oC to 36 oC
9 Annual Rain fall 845 mm
10 Nearest Road SH: 133 (0.95 Km)
11 Nearest National HW NO NH: 8C – 20 Km
12 Nearest State HW No SH: 133 – 0.95 Km
13 Nearest Railway station Pansar (6.67 Km)
14 Nearest Bus stop Indrad (1.37 Km)
15 Nearest city Chhatral (2.6 Km)
16 Nearest village Dhanot (1.0 km)
17 Seismic Zone Zone-III (Less Active)
18 National Parks / Sanctuary None with in 10 km radius

SCOPE OF THE WORK
The EIA study includes determination of baseline conditions, assessment of the

Impacts on the environment due to the construction and operation of the project and
making recommendations on the preventive measures to be taken, to minimize the
impact on the environment to acceptable levels. A suitable post-study monitoring
program will be outlined. Preparation of Environment Management Plan will be given
based on the emissions and feasibility report. The scope of work is prepared based on
MoEF / CPCB guidelines and tabulated below.
Environmental No of
Observations
Attributes Locations
Meteorology 1 Hourly observations for Temperature, Relative
Humidity, Wind direction, wind speed & Rain fall
during 3 month study period using Automatic
Weather Station
AAQ 08 PM10, PM2.5, SO2, NOx, CO & VOC for 24 hours
duration, 2 times in each week during 12-week study
Water 10 2 Surface water Locations
Parameters to be analyzed as per IS: 10500
8 Ground water locations (including the place near to
the plant site)
Parameters that are analyzed are as per Analysis of
Drinking Water Quality had been carried out as per
IS: 10500
Noise 08 Day and night noise levels (Lday, Lnight and Ldn)
once in every location
Soil samples at selected locations will be analysed for
Soil 08 pH, EC, heavy metal, texture to understand nutrient
status and possibility of ground water contamination

Ecology Flora-Fauna & Major flora will be eneumerated and the possibility
Ecosystem habitation for important species in the site. Fauna
will be listed based on the secondary information.
Socio- Demography Secondary data for demography, Occupation, literacy
economic data & and amenities will be tabulation to the villages falling
Occupational in the study area (Census 2011 & Census 2001)
details
As per the guidelines, the Generic structure of EIA is given in EIA notification dated
14th September, 2006 is maintained.
IMPACT ASSESSMENT METHODOLOGIES

The baseline data generated were analyzed and compared with applicable standards for
each environmental attribute so that the critical environmental areas and also
attributes of concern were identified. The short-term and long-term impacts
particularly on sensitive targets such as endangered species, crops and historically
important monuments were identified.
A qualitative and quantitative assessment of pollution aspects of proposed projects (air,

water, noise, soil and socio-economic structure) was done to identify the adequacy of the
proposed control measures as well as the likely impact on existing critical areas.
Mitigation measures to reduce adverse impacts were suggested.
Air Quality Modeling
Lakes Environment AERMOD – 8.5 is used for prediction of air quality impacts. This
model requires hourly meteorological data which were collected from the site and was
used for running the model.

ENVIRONMENT MANAGEMENT PLAN
Baseline data generated (based on three months study during March 2015 - May 2015)
in the field and proposed project process studies are used to predict impacts. These
impacts are evaluated and final impact assessment is carried out. Environmental
Management Plan covers both during construction and operation are given in detail in
chapter 4.
Green Belt Development Plan
Green belt development plan for the proposed project site is shown in the EIA report
in chapter- 4.
DISASTER MANAGEMENT PLAN AND OCCUPATIONAL SAFETY

A Disaster Management Plan (DMP) is prepared for solving emergency situation
arising due to explosion, fire, leakages of hazardous substances, etc. in the proposed
plant site. This Disaster Management Plan includes storage, handling, transportation
etc. for the hazardous materials to be used in the proposed project. It also assesses the
occupational risk involved during construction and operation phase of the plant.
Necessary safety and protective measures are spelt out in this plan. The DMP include
both on - site and off - site emergency plans.
POST STUDY MONITORING PLAN
The Post Project Monitoring (PPM) plan is prepared considering the following:
i. The proposed pollution control measures for air, wastewater, noise and solid
waste (hazardous/non-hazardous) disposal;
ii. Waste minimization; wastewater management, waste reuse and resource
recovery; waste segregation to make the treatment and disposal cost-
effective;

REGULATORY FRAME WORK
The proposed project will abide and function under the purview of the following
Rules, Acts & Regulations which are formulated by the governments to save and
maintain good environmental conditions
• The Water (prevention & Control of Pollution) Act, 1974, Amendment 1988
• The Water (Prevention & Control of Pollution) Cess, Act, 1977
• The Air (Prevention & Control of Pollution) Act, 1981
• The Environmental (Protection)Act, 1986
• Environmental Impact Assessment Notification dated 14th September 2006 and
amendments.
• The Hazardous Waste (MH & TM) Rules, 2009 and its amendments
• The Manufacture, Storage and Import of Hazardous Chemicals (Amendment)
Rules, 2000
• Chemical Accident (Emergency Planning, Preparedness and Response) Rules,
1996
• Noise Pollution (Regulation and Control) Rules, 2000 and its amendments
• The public Liability Insurance Act, 1991
• The Batteries (Management and Handling) Rules, 2001
• The Explosive Act, 1884

SITE VISIT PHOTOGRAPHS

CHAPTER - 2
TECHNICAL DESCRIPTION OF THE PROCESS

CHAPTER – 2 TECHNICAL DESCRIPTION OF THE PROCESS
Type and Importance of the project

Laminated Sheets are having huge demand in the country along with growing population.
It has got several advantages as listed below in our daily life.
➢ These Sheets find application in making magnetic slots and other electrical appliances
➢ The white marker grade laminates are used to make white writing boards
➢ These Sheets are used for packing clothes
➢ Cladding of Main Gates of the Bungalows
➢ Cut out sequins and design items
Location
The proposed plant is located at Survey No. 40, Village: Indrad, Taluka : Kadi, District :
Mehsana, Gujarat. The topo map showing features around 10 km radius from plant site is
showing Fig. 1.2.
The total land area is 7588 Sq. Mt. of which 2480 Sq. Mt. is for greenbelt area
development.
Proposed Product Details

The unit intends to produce Phenol Formaldehyde Resin, Melamine Formaldehyde Resin
and Urea Formaldehyde Resin. The details of proposed products are shown in Table 2.1.

Table 2.1 Proposed Product Details
Sr. No. Name of Product Quantity
1 Phenol Formaldehyde Resin (P. F. Resin) 200 MT/M
2 Melamine Formaldehyde Resin (M. F. 200 MT/M

Resin)
3 Urea Formaldehyde Resin (U. F. Resin) 240 MT/M
4. Laminated Sheets 1,60,000

Sheets/Month
Products and Manufacturing Process
Phenol Formaldehyde Resin
Manufacturing Process
➢ All the raw materials like Phenol, Formaldehyde & Caustic flakes will be added into
Limped reaction vessel.
➢ Stirring & heating will be done up to 60 C.
➢ Reflux is done for 30 minutes up to 98 C.
➢ Vacuum distillation will be started.
➢ Water will be removed from the vessel as per the batch size.
➢ Cooling down to 40 C.
➢ Phenol Formaldehyde Resin will be ready for use in laminated sheets as well as sale
purpose.

Reaction Chemistry
OH OH
CH2OH
+ H – CHO
Fast
Phenol Formaldehyde Phenol Formaldehyde Resin Fig.
2.1 Process Flow Diagram of Phenol Formaldehyde resin
Phenol Formaldehyde
Caustic Flakes Limped Reaction
Vessel
Stirring and heating

up to 60 C
Reflux for 30 Minutes
Water
Vacuum Distillation
Cooling
Dilution
Product: Phenol
Formaldehyde Resin

Table 2.2 Mass Balance of Phenol Formaldehyde Resin per Batch
Input Quantity Output Quantity

Raw material Product
(Kg) (Kg)
Phenol 0.943 Phenol Formaldehyde 1.000
resin
Formaldehyde (37%) 0.372 Aqueous
A)Water 0.306
B) Phenol 0.0078
C) Formaldehyde 0.0012
Total 1.315 Total 1.315
Melamine Formaldehyde Resin

❖ All the raw materials melamine and formaldehyde will be added in Limped reaction vessel.
❖ Stirring & heating will be done up to 95 C for 1 Hr.
❖ Cooling down to 40 C.
❖ Melamine Formaldehyde Resin will be ready for use in laminated sheets as well as sale
purpose.
REACTION CHEMISTRY
N N
H2N NH2 H2 fast
N + C O N N
N
NH N CH2
2
H2
C
melamine
formaldehyd
OH HO
e
melamine formaldehyde res

Fig. 2.2 Process Flow Diagram of Melamine formaldehyde resin
Melamine Formaldehyde
Limped Reaction
Vessel
Stirring and Heating

up to 95C for 1
hr
Cooling down to 40C
Product: Melamine
Formaldehyde
Resin
Table 2.3 Mass Balance of Melamine Formaldehyde Resin per batch (1 batch = 1
MT)
No. Raw Materials Qty in kg

1 Formaldehyde (37 %) 600
2 Melamine 400
Final Total 1000
Urea Formaldehyde Resin
❖ All the raw materials Urea & Formaldehyde will be added in Limped reaction vessel.
❖ pH will be adjusted to pH 9.0.
❖ Stirring & heating will be done upto 95 C for 50 Minutes.
❖ Acetic Acid will be added in mixture to achieve pH 5.5 to 6.0.
❖ Heating will be continued.
❖ pH will be adjusted to 9 by adding Caustic.

❖ Cooling will start
❖ Urea Formaldehyde Resin will be ready for use in laminated sheets as well as sale
purpose.
Reaction Chemistry
Fig. 2.3 Process Flow Diagram of Urea formaldehyde resin
Limped Reaction
Vessel
Urea
Formaldehyde
Acetic Acid
pH adjusted to 9
Stirring and Heating up

Caustic to 95C for 50 Minutes
pH adjusted to 9
Cooling
Product : Urea
Formaldehyde Resin

Table: 2.4 Mass Balance of Urea Formaldehyde Resin per Batch (1 batch= 1 MT)
No. Raw Materials Qty In KG

1 Formaldehyde (37 %) 600
2 Urea 400
3 Acetic acid 5
4 Caustic 5
Final Total 1010
List of raw materials

List of raw materials are given in the Table 2.5.
Table 2.5 Raw materials required for Resin Manufacturing in MT/Month
Sr. Name of the product Name of Raw Quantity in

No. Materials MT/Month
1 Phenol Formaldehyde Phenol 188
Resin
Formaldehyde 74
Caustic 1
2 Melamine Formaldehyde Formaldehyde (37%) 120
Resin
Melamine 80
3 Urea Formaldehyde Resin Urea 96
Formaldehyde (37%) 144
Caustic 1.2
Acetic Acid 1.2
Note: Methanol consumption – 0.5 kg/sheet
Thus, Methanol consumption : 80 MT/Month

Material Storage, Handling And Transportation
Requirement and storage of raw material
For the manufacturing of proposed products Phenol Formaldehyde resin, Melamine Formaldehyde resin
and Urea Formaldehyde resin, various raw materials will be
required. Industry will provide adequate and proper storage facilities for all the raw materials
and the finished product. The quantity of raw material consumption for proposed
manufacturing is shown in the Table 2.5. A detail regarding product and raw material storage,
packing & transportation is shown in Table 2.6.
Table 2.6 Packing, Storage & Transportation details of Raw Material and Product
Type of Transportation Source (purchase

Physical Packing/ Capacity from)
No. Description Form Storage/ of
mode of storage
storage
➢ Raw Materials
1 Melamine Solid Plastic bag Road/ Railway 20 MT GSFC
2 Formaldehyde (37 Liquid M.S. Road/Railway 1 x 30 KL Simalin industries
%) 1 x 20 KL P. Ltd.
3 Phenol Liquid M.S. Road/Railway 1 x 30 KL Jay overseas P.
1 x 20 KL Ltd. &
Yog
International
4 Methanol Liquid M.S. Road/Railway 1 x 30 KL Sagar Chemicals
1 x 20 KL
5 Caustic Soda Solid Woven sack Road/Railway 0.5 MT V. J. Industries
Bag
6 Urea Solid Industrial Road/Railway 20 MT Sagar Chemicals
Plastic Bag
7 Acetic acid Liquid Plastic Road/Railway 0.5 MT V. J. Industries
carboy
➢ Products
Captive
P. F. Resin, Semi solid Stored in consumption 7.5 MT
1 M.F. Resin & MS tank & rest --------
U.F. Resin will be 5 MT
transported by
road, rail & ship

Solvent Consumption and Recovery
The unit will use Methanol, as a solvent, to manufacture Laminate sheet. It will help to let
down the viscosity of resin so it can float on the laminated sheet while drying. The overall
requirements of solvent consumption has been worked out which is given in Table 2.4.
• Methanol flash point is 12 ˚C. And while the dry temperature will remain 160 – 180
˚C. So, it will evaporate from drying process.
• Methanol is not toxic but it is highly explosive so it is necessary to recover methanol.
• As shown in Fig 2.4 methanol will transfer in water scrubber though ID fan.
• The methanol vapor will pass into water scrubber and recollect into water collection
tank and it will circulate till the water become concentrate. After this it will be sold to
authorised recycler.
• So, Methanol will be recovered and reused.
Fig. 2.4 Methanol Recovery System for process gas emission
Packing column for methanol recovery
2 Ft.
Methanol
gas
Pipe
10 ft
diameter:
Packing 1 inch
ID Fan
(5 HP)
Methanol +
water
Duct
Dryer Collection of
methanol
Pump
(1.5 HP)

Table 2.7 Solvent recovery from Scrubber
%
Name of Solvent Fresh Recovered
Recovery
Methanol 80 MT/ Month 72 MT/Month 90 %
* % of recovery will be calculated as per methanol solubility and Ideal

Assumption.
* Recovered Methanol will be sold out to authorized recycler as a byproduct in domestic

market.
Storage of Raw Materials & Products
Industry will provide adequate and proper storage facilities for all the raw materials
and finished products. Corrosive substances will be stored away from the moisture.
Solid raw material will be stored in covered area and liquid raw material will be
stored in closed horizontal tank. Hazardous chemicals and solid wastes will be stored
away from other plant activities. The storage yard of chemicals will be isolated and it
will be equipped with all necessary safety measures. In cover-shed area provide
natural ventilation system, which consider as 15 % open area of all covered area.
Handling of Raw Materials & Products

All the raw materials and finished products will be handled as per the standard
practice. For proper handling, company will adapt good housekeeping technology to
entire shed. To avoid any leakage or spillage of chemicals from all storage tanks, third
party will inspect transfer lines, valves, fittings and every joint periodically.
Transportation of Raw Materials & Products

All the necessary precautions will be taken while carrying out transport of the above
materials as per the Hazardous Rules of transportation. The vehicles for

transportation of raw materials and products will be parked at specified loading
facilities where there will be a provision of fire extinguishers. The finished product
(Laminate Sheets) will be transported by road, rail and ship route.
Infrastructural Facilities
The total available area for proposed project is 7588 m2 and unit proposes to develop
Green Belt area 2480 m2 of total area of plot.
Power requirement for the proposed project will be taken from Uttar Gujarat Vij
Corporation Ltd. in tune of 240 HP.
Industry is nearer to State Highway – 133 (0.95 Km)
The detailed Area break up for proposed unit

The detailed Area break up for proposed unit is shown in Table 2.8
Table 2.8 Area Break up for proposed unit
No. Particulars Area Sq. Mt. %

1 Built Up Area 3427 45.16
2 Green belt area 2480 32.69
3 Open/ Road area 1681 22.15
Total Area 7588 100

Fig. 2.5 Plant Lay-Out

Details of Plant and Machineries
For Resin production, various plants and machineries will be required. The details of
equipments are as mentioned in table 2.9.
Table 2.9 Equipments required for resin plant
No. Equipment No. of Units Capacity

1 Steam Boiler 1 3 MT
2 Thermic Fluid Heater 1 12 Lac Kcal/hr
3 D. G. Set 1 275 HP
4 Cooling Tower 1 100 TR
5 P. F. Reaction Vessel 1 5 MT
6 M. F. Reaction Vessel 1 5 MT
7 U. F. Reaction Vessel 1 5 MT
Requirement of Resources
Fuel Requirement
The unit proposes to use Coal / Briquettes as a fuel for Steam Boiler & Thermic Fluid
Heater. The requirement shall be 6 MT/Day.
Energy Requirement
Total Energy requirement for the proposed project will be estimated as 240 HP, which
will be fulfilled from the Uttar Gujarat Vij Corporation Ltd. (UGVCL).
Manpower Requirement
Table 2.10 Employment Detail
Particulars Local persons

Skilled Workers 10
Unskilled workers 23
Total 33

Environmental Pollution and Control Measures
Water Pollution
Water Consumption
Total fresh water requirement (26 KL/Day) of the unit will be satisfied through Bore
well. The Industrial water consumption for proposed Resin plant will be 20 KL/Day
which will be used for Cooling (make up), steam boiler (make-up), scrubbing &
washing purpose. Domestic water consumption for proposed unit will be 1.6 KL/Day.
The unit will develop Green Belt Area within the industrial premises hence the water
requirement for gardening purpose will be 4.4 KL/day. So, total water requirement will
be 26 KL/Day.
Waste Water Generation

Water will not be consumed in the manufacturing process of resin plant, but water will
release about 2.5 KL/day from resin manufacturing process. Total generated
wastewater from resin process (2.5 KL/D), cooling blow-down (0.2 KL/D), Boiler
blow-down (0.3 KL/D) and washing (0.2 KL/D) will be 6.4 KL/Day which will be treated
in the ETP. Treated effluent will be evaporated & reused for cooling.
Thus industry will maintain ZERO DISCHARGE.
The Domestic Effluent will be generated 1.5 KL/day and it will be disposed off into
soak pit via septic tank. The Category wise details of water consumption and wastewater
generation are shown in Fig. 2.6.

Fig. 2.6 Water Balance Diagram
Source of Water Supply: Borewell

Total : 26 KL/day
Domestic Greenbelt Industrial

Development 20 KL/day
1.6 KL/day
4.4 KL/day
Soak pit via
septic tank
1.5 KL/day Process Washing Scrubbing purpose RO Plant

10 KL/day
Nil 0.2 KL/day 9.8 KL/day
2.5 0.2 Scrubbed

Methanol sold Permeate Reject
KL/day KL/day to
Reprocessors 6.6 KL/day 3.2 KL/day
0.6 KL/day
5.8 KL/day Boiler (Make-up)
Cooling
6 KL/day
6.4 KL/day 0.3
KL/day
0.2 and condenser system
Effluent Treatment Plant followed by Evaporator 6.4 KL/day
KL/day
ZERO DISCHARGE
Effluent characteristics before & after treatment

1. Effluent collected in collection tank
BEFORE
TREATMENT
Effluent Quantity in After Photo
Composite
KL/Day Process Washing Fenton
Effluent
Treatment
2.5 0.2 2.7 2.7
pH 3.0 - 5.0 6.0 - 7.0 3.0 - 5.0 6.0 - 7.0
Total Suspended Solids (mg/l) 100 - 200 200 - 300 100 - 200 40 - 50
Total Dissolved Solids (mg/l) 5000 - 6000 800 - 900 5000 - 6000 5500 -
6500
Chemical Oxygen Demand 25000 - 100 - 150 25000 - 100 - 200
(mg/l) 30000 30000

2. Effluent collected in treated water collection tank
After Photo
Fenton Cooling Boiler RO Reject Composite Mode of
Effluent Quantity in
Treatment Effluent Disposal
KL/Day
2.7 0.2 0.3 3.2 6.4 Treated
pH 6.0 - 7.0 6.5 - 7.5 6.5 - 7.5 6.5 - 7.5 6.5 - 7.5 Effluent
Total Suspended (5.8 KL/D)
Solids (mg/l) 40 – 50 70 - 80 70 - 80 70 - 80 < 100 will be
Total Dissolved evaporated
5500 – 2000 - 2000 - 4000 - 5000 5000 - 6000
Solids and
(mg/l) 6500 2500 2500
condensate
will be
Chemical 100 – 200 40 - 50 40 - 50 5.0 - 10.0 < 100 reused in
Oxygen coolin
Demand g
(mg/l) proces
s
Note: The final parameters will comply with the Regulatory Norms
Waste Water Management System (Proposed Effluent Treatment Plant)

Details of Effluent Treatment Plant
Industrial wastewater will be generated from process, boiler, cooling and washing activities.
In addition to this, reject water will be generated from raw water (Borewell water) RO plant.
• Wastewater from process and washing activities will be collected in collection tank.
• Then wastewater will be given Photo Fenton treatment.
• After completion of chemical treatment, wastewater will be taken to Nutch Filter / Filter
Press for chemical sludge separation.
• Dried sludge will be stored in bags and ultimately disposed of at TSDF site.
• Chemically treated water will be collected in treated water collection tank along the
R.O reject water and Boiler and cooling tower blow down.
• This will be evaporated in Steam based evaporation system followed by condenser.
• Bottom sludge from evaporator will be handled with ETP sludge.
• Condensate water from condenser will be reused in cooling tower.
• Thus, unit will maintain Zero Effluent Discharge. Volumes of proposed ETP units are given
below;

Table 2.11 ETP Unit details
Name of the units Volume (m3) No. of Unit

Collection Tank 7.0 1
Photo Fenton Treatment Tank 7.0 1
Nutch Filter 4.0 2
Treated Water Collection Tank 15.0 1
Steam based Evaporator followed by 1 m3/hr 1
Condenser
Fig 2.7 ETP Flow Diagram
R.O reject and

Boiler &
cooling
Water Blowdown
from
Process & Condensate
Washing to be used
Steam Based for Cooling
Evaporation Activities
System with
Condenser
1.0 m3/Hr. ZERO DISCHARGE
Photo Fenton
Treatment
Tank 7 KL
Nutch Filter
/Filter Press 4
KL X 2
Treated Water
Collection Tank
Collection 15 KL
Tank 7 KL
ETP Sludge to be
sent to TSDF site

Air Pollution
The main source of gaseous emission is flue gas emission from stack attached to Steam boiler,
Thermic Fluid Boiler, D. G. Set & process gas emission from dryer. There will be negligible
chance of fugitive emission due to handling and storage of raw material.
Flue Gas Emission

The main source of flue gas emission will be stack attached to Steam boiler and thermic fluid
heater & D. G. Set. The details of the same are given here in Table 2.12.
Table 2.12 Flue Gas stacks details
Sr. Stack Height Fuel Type APC Expected GPCB

No. attached of the System Pollutant Limit
to stack
In meter
1 Steam
Boiler
3 MT 30 Cyclone PM
Coal / Briquettes 6 PM ≤ 150
2 Thermic (Common separator SO2
Stack) MT/Day followed by NO mg/Nm3
Fluid
Bag Filter X SO2 ≤ 100
Heater
ppm
(12,00,000
NOX ≤
Kcal/Hr)
50
3 D. G. Set 6.5 Diesel : 45 lit/hr Adequate PM
ppm
275 HP stack SO2
height NO
X
Note: D.G. Set will be only used when power failure.
Stack height will be provided as per GPCB guidelines for the proper dispersion of
pollutants into the atmosphere. The unit will provide Cyclone Separator & Bag Filter with
Steam Boiler & Thermic Fluid Heater as an air pollution control measures to control the
emission of particulate matter & the flue gas emission will remain well within gaseous
emission norms prescribed by the GPCB/CPCB. The technical specifications of proposed
Bag Filter are given in Table – 2.13.

Table 2.13 (A) Technical Details of cyclone separator
Type of Source Steam Boiler (package wet back) & Thermic

Fluid Heater
Heating Capacity 3 MT & 12,00,000 K Cal./Hr.
Fuel used in steam boiler Coal / Briquettes – 6 MT/Day
Temperature at Inlet 180 oC
Specific Gravity of Dust 1.29

Input Dust Load 1726 mg/m3
Efficiency 60 %
Pressure Drop 115 mm WC
No/Size of Cylinder 1 nos.
No. of Ash Discharge Cone 1 nos.
Ash Discharge Air Lock Rotary Valve
Table 2.13 (B) Technical Details of Bag Filter
Steam Boiler (package wet back) &

Type of Source
Thermic Fluid Heater
Heating Capacity 3 MT & 12,00,000 K Cal./Hr.
Fuel used in steam boiler Coal / Briquettes – 6 MT/D
Temperature at Inlet 165 oC
Specific Gravity of Dust 1.29
Input Dust Load 690.70 mg / m3
Efficiency 90 %
Pressure Drop 110 mm WC
Type of Cleaning Mechanism Solenoid Operated Pulsing Valve
Ash Discharge Air Lock Rotary Valve
Air to Cloth ratio 1.02 m3/min/m2
Type of Bags Woven Needle Felt
Filter Fabrics Imported Woven Fiber Glass Water Repellent

Process Gas Emission
There will be process gas emission from the stack attached with dryer. The details of the same
are given here in Table 2.14.
Table 2.14 Process gas stack details
No. Stack attached Stack Expected Quality of APC System

To Height pollutant pollutant
1 Melamine 11 m Methanol As per GPCB Water
Formaldehyde Norms Scrubber
Dryer & Phenol
Formaldehyde
Dryer
Fugitive Emission
The fugitive pollutants such as SPM are likely to emit from process area. However it will be at
acceptable level. The chance of fugitive emission within premises is mainly due to storage,
handling and loading, unloading of raw materials.
Special care will also be taken while material handling & storage. To reduce the pollutant
emission during transportation, the unit has adopted the practice of regular check up and
maintenance of vehicular engines for complete combustion of the fuel. Pucca road make to
reduce the fugitive emission. Water sprinkler will be provided to reduce the dusting from road
transportation. To minimize fugitive emission the unit will adopt the practice of carrying out
entire manufacturing process into closed vessel. Green Belt area will be provided to suppress
fugitive emission. Proper ventilation will be provided in process area to minimize fugitive
emission as well odour.
2.9.3 Hazardous/ solid waste Generation
The main source of solid waste generation from the project; shall be edge cutting waste from
the manufacturing process. The other source of hazardous waste generation; shall be discarded
bags, used oil and ETP sludge. The details of hazardous waste generation and handling /
Management are given in Table-2.15.

Table 2.15 Solid Waste/Hazardous Waste details
Sr. Quantity Per

Description Category Mode of Disposal
No. Year
ETP Sludge +
Collection, storage and Disposal at
1 Evaporator 34.3 38.4 MT
TSDF Site
Residue
Collection, storage and used
2 Used Oil 5.1 0.1 MT within premises as a lubricant /
sold to registered recycler.
Discarded Collection, storage & sell to
3 33.3 2.4 MT
Plastic bags authorized vendor
Edge Cutting Collection, storage & disposal at
4 23.1 7.7 MT
Waste common Incineration facility
Fly Ash Management:
Proposed fuel for Boiler & Thermic Fluid Heater: Coal /Briquettes Fuel
requirement: 6 MT/Day
Fly ash generation has been calculated considering maximum ash generation scenario
considering use of coal.
Ash content in Coal : 38 %

Total Ash generation = 0.38 x 6 MT/day
= 2.28 MT/day
Considering 50% Ash to be collected from bottom,
Bottom Ash = 0.5 x 2.28 MT/day
= 1.14 MT/day [A]
Considering 50 % Ash to be carried away with flue gas as fly ash which will be further
trapped in dust collector (Efficiency: 60 %) and bag filter (Efficiency: 90 %)
Fly ash trapped in Air = 0.6 x (0.5 x 2.28) + 0.9 x {0.4 x (0.5 x 2.28)}
pollution control units
= 1.094 MT/day [B]
Total Maximum Ash to be = 2.234 MT/day [A + B]
generated using coal

However, total Ash generation will be quite less in case of using briquettes. The same is around
0.588 MT/day based on the above calculation.
Total Ash to be generated will be stored into silo with proper care and sold to bricks manufacturer.
Noise Pollution
One of the potential pollutants Noise is an unwanted and excessive sound, which is harmful
to health and diminishes the quality of life.
The major source of noise pollution will be DG Set and the ancillary sources will be manufacturing process within
premises and transportation within and outside the premises

Cleaner Production

Energy Balance for all the components of the plant
Product details :
PF Resin : 200
MT/Month = 8 MT/Day
MF Resin : 200
MT/Month = 8 MT/Day
UF Resin : 240
MT/Month = 9.6 MT/Day
Laminated Sheets :
1,60,000 Nos./Month
Laminated sheet weight : 4.5 Kg/sheet, so laminated sheets production : 720 MT/Month
= 28.8 MT/Day
Total production per day = 54.4 MT/Day
THERMIC FLUID HEATER
Particular Unit Thermic Fluid Heater

Installed Capacity Kcal/hr 1200000 Kcal/hr
Rated Fuel (Briquettes / Coal) Kg/day 2000
Gross Calorific Value per kg of Fuel Kcal 4000
Moisture content % 10
Efficiency on Gross Calorific Value % 75
Energy Produced Kcal/day 60,00,000
Moisture content Kcal/day 6,00,000
Losses through Flue gas 0.4% Kcal/day 24,000
Net Energy output Kcal/day 5376000
Production TPD 54.4
Energy consumption per MT production Kcal/MT 98824
STEAM BOILER
Particular Unit Steam Boiler

Installed Capacity TPH 3
Rated Fuel (Briquettes / Coal) Kg/day 4000
Gross Calorific Value per kg of Fuel Kcal 4000
Moisture content % 10
Efficiency on Gross Calorific Value % 75
Energy Produced Kcal/day 12000000
Moisture content less 25% Kcal/day 1200000
Losses through Flue gas 0.4% Kcal/day 48000

Net Energy output Kcal/day 10752000
Production TPD 54.4
Energy consumption per MT production Kcal/MT 197647
OUR VISION
At Evershine Decor Private Limited, our vision is to earn reputation in the domestic and
global market as a reliable manufacturer and exporter of high quality Decorative, Industrial
& Linear Laminates having the global standards. Affordable product prices and unsurpassed
and stunning product range, we aim to build ever-lasting business relationship with our
customers.
OUR MISSION
Our mission is to consistently improve the quality with novel design innovations and
adopting the modern technology to stay ahead in the global competition. We want to defeat
our rivals by offering our customers much better products; best services and supports in order
to deliver them complete ROI and satisfaction in our services.
PRODUCT
Decorative Laminates
Industrial Laminates
Decorative Linear Laminates
FACTORY ADDRESS
Ever Shine Decor Pvt. Ltd.

Survey 40, Village Indrad,
B/H. Virat Alloys, Chhatral-kadi Road,
Chhatral - 382715,
Gujarat, India
CONTACT INFO
+91 99250 55190

+91 98257 01676
+91 98253 05198
evershinedecor@gmail.com
www.evershinedecor.com

CHAPTER -4
CAPITAL
BUDGEING:

CHAPTER -3 CAPITAL BUDGEING:
An efficient allocation of capital is the most important finance function in modern times.
It involves decisions to commit firm’s funds to long-term assets. Such decisions are tend to
determine the value of company/firm by influencing its growth, profitability & risk.
Investment decisions are generally known as capital budgeting or capital expenditure decisions.
It is clever decisions to invest current in long term assets expecting long-term benefits firm’s
investment decisions would generally include expansion, acquisition, modernization and
replacement of long-term assets.
Such decisions can be investment decisions, financing decisions or operating decisions.

Investment decisions deal with investment of organization’s resources in Long tern (fixed)
Assets and / or Short term (Current) Assets. Decisions pertaining to investment in Short term
Assets fall under “Working Capital Management”. Decisions pertaining to investment in Long
term Assets are classified as “Capital Budgeting” decisions.
Capital budgeting decisions are related to allocation of investible funds to different long-term
assets. They have long-term implications and affect the future growth and profitability of the
firm.
In evaluating such investment proposals, it is important to carefully consider the expected

benefits of investment against the expenses associated with it.
Organizations are frequently faced with Capital Budgeting decisions. Any decision that requires
the use of resources is a capital budgeting decisions. Capital budgeting is more or less a
continuous process in any growing concern.
NEED FOR THE STUDY
• The Project study is undertaken to analyze and understand the Capital Budgeting process
in cement manufacturing sector, which gives mean exposure to practical implication of
theory knowledge.
• To know about the company’s operation of using various Capital Budgeting techniques.
• To know how the company gets funds from various resources.
OBJECTIVES OF THE STUDY

• To study the relevance of capital budgeting in evaluating the project for project finance
• To study the technique of capital budgeting for decision- making.
• To measure the present value of rupee invested.
• To understand an item wise study of the company financial performance of the company.
• To make suggestion if any for improving the financial position if the company.
• To understand the practical usage of capital budgeting techniques
• To understand the nature of risk and uncertainty
METHODOLOGY
To achieve aforesaid objective the following methodology has been adopted. The
information for this report has been collected through the primary and secondary sources.
Primary sources
It is also called as first handed information; the data is collected through the
observation in the organization and interview with officials. By asking question with the
accounts and other persons in the financial department. A part from these some information is
collected through the seminars, which were held by EVER SHINE DECOR PVT. LTD.
Secondary sources
The secondary data have been collected through the various books, magazines,
brouchers & websites
LIMITATION OF THE STUDY :
• Lack of time is another limiting factor, ie., the schedule period of 8 weeks are not
sufficient to make the study independently regarding Capital Budgeting in EVER SHINE
DECOR PVT. LTD..
• The busy schedule of the officials in the EVER SHINE DECOR PVT. LTD. is another
limiting factor. Due to the busy schedule officials restricted me to collect the complete
information about organization.
• Non-availability of confidential financial data.
• The study is conducted in a short period, which was not detailed in all aspects.

• All the techniques of capital budgeting are not used in EVER SHINE DECOR PVT.
LTD.. Therefore it was possible to explain only few methods of capital budgeting.
An efficient allocation of capital is the most important finance function in modern times.
It involves decisions to commit firm’s funds to long-term assets. Such decisions are tend to
determine the value of company/firm by influencing its growth, profitability & risk.
Investment decisions are generally known as capital budgeting or capital expenditure decisions.
It is clever decisions to invest current in long term assets expecting long-term benefits firm’s
investment decisions would generally include expansion, acquisition, modernization and
replacement of long-term assets.
Such decisions can be investment decisions, financing decisions or operating decisions.

Investment decisions deal with investment of organization’s resources in Long tern (fixed)
Assets and / or Short term (Current) Assets. Decisions pertaining to investment in Short term
Assets fall under “Working Capital Management”. Decisions pertaining to investment in Long
term Assets are classified as “Capital Budgeting” decisions.
Capital budgeting decisions are related to allocation of investible funds to different long-term
assets. They have long-term implications and affect the future growth and profitability of the
firm.
In evaluating such investment proposals, it is important to carefully consider the expected

benefits of investment against the expenses associated with it.Organizations are frequently faced
with Capital Budgeting decisions. Any decision that requires the use of resources is a capital
budgeting decisions. Capital budgeting is more or less a continuous process in any growing
concern.
For Example: Purchase of Land is an example of Capital Budgeting decision. Similarly

replacement of outdated equipment with modern machines, purchase of a brand or business,
computerization and networking the organization, investment in research and development of a
product launch of a major promotional campaign etc are all examples of Capital Budgeting
decisions.
However, in all cases, the decisions have a long-term impact on the performance of the
organization. Even a single wrong decision may in danger the existence of the firm as a
profitable entity.

IMPORTANCE OF CAPITAL BUDGETING:
There are several factors that make capital budgeting decisions among the critical decisions to be
taken by the management. The importance of capital budgeting can be understood from the
following aspects of capital budgeting decisions.
1. Long Term Implications: Capital Budgeting decisions have long term effects on the risk
and return composition of the firm. These decisions affect the future position of the firm
to a considerable extent. The finance manger is also committing to the future needs for
funds of that project.
2. Substantial Commitments: The capital budgeting decisions generally involve large

commitment of funds. As a result, substantial portion of capital funds is blocked.
3. Irreversible Decisions: Most of the capital budgeting decisions are irreversible

decisions. Once taken the firm may not be in a position to revert back unless it is ready to
absorb heavy losses which may result due to abandoning a project midway.
4. After the Capacity and Strength to Compete: Capital budgeting decisions affect the
capacity and strength of a firm to face competition. A firm may lose competitiveness if
the decision to modernize is delayed.
PROBLEMS & DIFFICULTIES IN CAPITAL BUDGETING:
• Future uncertainty: Capital Budgeting decisions involve long-term commitments. There

is lot of uncertainty in the long term. The uncertainty may be with reference to cost of the
project, future expected returns, future competition, legal provisions, political situation
etc.
• Time Element: The implications of a Capital Budgeting decision are scattered over a long
period. The cost and benefits of a decision may occur at different point of time. The cost
of a project is incurred immediately. However, the investment is recovered over a number
of years. The future benefits have to be adjusted to make them comparable with the cost.
Longer the time period involved, greater would be the uncertainty.
• Difficulty in Quantification of Impact: The finance manger may face difficulties in

measuring the cost and benefits of projects in quantitative terms.
Example: The new product proposed to be launched by a firm may result in increase or decrease
in sales of other products already being sold by the same firm. It is very difficult to ascertain the

extent of impact as the sales of other products may also be influenced by factors other than the
launch of the new product.
ASSUMPTIONS IN CAPITAL BUDGETING:

The Capital Budgeting decision process is a multi-faceted and analytical process. A number of
assumptions are required to be made.
1. Certainty with respect to cost & Benefits: It is very difficult to estimate the cost and
benefits of a proposal beyond 2-3 years in future.
2. Profit Motive : Another assumption is that the capital budgeting decisions are taken with
a primary motive of increasing the profit of the firm.
The activities can be listed as follows:
• Dis-investments i.e., sale of division or business.

• Change in methods of sales distribution.
• Undertakings an advertisement campaign.
• Research & Development programs.
• Launching new projects.
• Diversification.
• Cost reduction.
FEATURES OF INVESTMENT DECISIONS:
• The exchange of current funds for future benefits.

• The funds are invested in long-term assets.
• The future benefits will occur to the firm over a series of years.
IMPORTANT OF INVESTMENT DECISIONS:
• They influence the firm’s growth in long run.

• They effect the risk of the firm.
• They involve commitment of large amount of funds.
• They are irreversible, or reversible at substantial loss.
• They are among the most difficult decisions to make.
TYPE OF INVESTMENT DECISIONS:
• Expansion of existing business.

• Expansion of new business.
• Replacement & Modernization.
INVESTMENT EVALUATION CRITERIA:
• Estimation of cash flows.

• Estimation of the required rate of return.
• Application of a decision rule for making the choice.
Consideration of cash flows is to determine true profitability of the project and it is an

unambiguous way of identifying good projects from the pool. Ranking is possible it should
recognize the fact that bigger cash flows are preferable to smaller ones & early cash flows are
referable to later ones I should help to choose among mutually exclusive projects that which
maximizes the shareholders wealth. It should be a criterion which is applicable to any
considerable investment project independent of other.There are number of techniques that are
in use in practice. The chart of techniques can be outlined as follows:
NET PRESENT VALUE :

The Net Present value method is a classic economic method of evaluating the investment
proposals. It is one of the methods of discounted cash flow. It recognizes the importance of
time value of money”.
It correctly postulates that cash flows arising of different time period, differ in value and
are comparable only when their equivalent i.e., present values are found out.
The following steps are involved in the calculation of NPV:
• Cash flows of the investment project should be forecasted based on realistic

assumptions.
• An appropriate rate of interest should be selected to discount the cash flows, generally
this will be the “Cost of capital rate” of the company.
• The present value of inflows and out flows of an investment proposal, has to be
computed by discounting them with an appropriate cost of capital rate.
• The Net Present value is the difference between the “Present Value of Cash inflows”
and the present value of cash outflows.
• Net present value should be found out by subtracting present value of cash outflows
from present value of cash inflows. The project should be accepted if NPV is positive.
NPV = Present Value of Cash inflow – Present value of the cash outflow
Acceptance Rule:
Accept if NPV > 0
Reject if NPV < 0
May accept if NPV = 0
One with higher NPV is selected
INTERNAL RATE OF RETURN METHOD:

The internal rate of return (IRR) method is another discounted cash flow technique .This
method is based on the principle of present value. It takes into account of the magnitude &
timing of cash flows.
IRR nothing but the rate of interest that equates the present value of future periodic net
cash flows, with the present value of the capital investment expenditure required to undertake a
project.
The concept of internal rate of return is quite simple to understand in the case of one-
period project.
Acceptance Rule:
Accept if r > k
Reject if r < k
May accept if r = k
where r = rate return
k = opportunity cost of capital
PROFITABILITY INDEX (OR) BENEFIT COST RATIO:

Yet another time-adjusted method of evaluating the investment proposals is the benefit-
cost (B/C) ratio of profitability index PI). It is benefit cost ratio. It is ratio of present value of
future net cash inflows at the required rate of return, to the initial cash outflow of the
investment.
Present Value of Cash inflows

PI = -----------------------------------------

Present Value of Cash outflows
Acceptance Rule:
Accept if PI > 1
Reject if PI < 1
May accept if PI = 1
Profitability Index is a relative measure of projects profitability.
PAY BACK PERIODE METHOD:

One of the top concerns of any person or organization investing a large amount of money
would be the time by which the money will come back. The concern making the investment
would want that at least the capital invested is recovered as early as possible. The pay back
period is defined as the period required for the proposal’s cumulative cash flows to be equal to
its cash outflows. In other words, the payback period is the length of time required to recover
the initial cost of the project. The payback period is usually stated in terms of number of years.
It can also be stated as the period required for a proposal to ‘break even’ on its net investment.
The payback period is the number of years it takes the firm to recover its original investment
by net returns before depreciation, but after taxes.
If project generates constant annual cash inflows, the payback period is completed as follows:
Initial Investment
Pay Back = ------------------------
Annual cash inflow
In case of unequal cash inflows, the payback period can be found out by adding up the
cash inflows until the total is equal to initial cash outlay.
Acceptance Rule:
• Accept if calculated value is less than standard fixed by management otherwise reject
it.
• If the payback period calculated for a project is less than the maximum payback
period set up by the company it can be accepted.
• As a ranking method it gives highest rank to a project which has lowest pay back
period, and lowest rank to a project with highest pay back period.
DISCOUNTED PAY BACK PERIOD:
One of the serious objections to pay back method is that it does not discount the cash flows.
Hence discounted payback period has come into existence. The number of periods taken in
recovering the investment outlay on the present value basis is called the discounted payback
period.
Discounted Pay Back rule is better as it does discount the cash flows until the outlay is
recovered.
ACCOUNTING RATE OF RETURN (OR)

AVERAGE RATE OF RETURN (ARR) :
It is also known as return on investment (ROI). It is an accounting method, which uses the
accounting information revealed by the financial statements to measure the profitability of an
investment proposal. According to Solomon, ARR on an investment can be calculated as “ the
ratio of accounting net income to the initial investment i.e.” .
Average Net Income
ARR = ---------------------------
Average Investment
Average Income = Average of after tax profit
Average Investment = Half of Original Investment
Acceptance Rule:
• Accept if calculated rate is higher than minimum rate established by the management.
• It can reject the projects with an ARR lower than the expected rate of return.
• This method can also help, the management to rank the proposals on the basis of
ARR.
 A highest rank will be given to a project with highest ARR, whereas a lowest rank to a
project with lowest ARR.
CAPITAL BUDGETING METHODS IN PRACTICE
• In a study of the capital budgeting practices of fourteen medium to large size

companies in India, it was found tat almost all companies used by back.
• With pay back and/or other techniques, about 2/3rd of companies used IRR and about
2/5th NPV. IRR s found to be second most popular method.
• Pay back gained significance because of is simplicity to use & understand, its
emphasis on the early recovery of investment & focus on risk.
• It was found that 1/3rd of companies always insisted on computation of pay back for
all projects, 1/3rd for majority of projects & remaining for some of the projects.
• One large manufacturing Reasons for secondary of DCF techniques in India included
difficulty in understanding & using threes techniques, lack of qualified professionals
& unwillingness of top management to use DCF techniques.
• and marketing organization mentioned that conditions of its business were such that
DCF techniques were not needed.
• Yet another company stated that replacement projects were very frequent in the
company, and it was not considered necessary to use DCF techniques for evaluating
such projects. techniques in India included difficulty in understanding & using threes
techniques, lack of qualified professionals & unwillingness of top management to use
DCF techniques.
CAPITAL BUDGETING PROCESS:

Atleast five phases of capital expenditure planning & control can be identified:
• Identification ( or Organization ) of investment opportunities.

• Development of forecasts of benefits and costs.
• Evaluation of the net benefits.
• Authorization for progressing and spending capital expenditure.
• Control of capital projects.
INVESTMENT IDEAS:
Investment opportunities have to be identified or created investment proposals arise at
different levels within a firm.
Nature of Idea Level
Cost reduction ----
Replacement Plant Level

Process/Product Development ( 50% in India cover this level)
Expansion Top management
Diversification In India, it is insignificant
New Product Marketing Dept., ( or) Plant Manager
Replacing an old
Machine ( or)
Improving the Factory Level Production techniques. Investment proposals should be generated to
employ the firm’s funds fully well & efficiently.
FORECASTING:
Cash flow estimates should be development by operating managers with the help of finance
executives. Risk associated should be properly handled. Estimation of cash flows requires
collection and analysis of all qualitative and quantitative data, both financial and non-financial
in nature. MIS provide such data.
Correct treatment should be given to :
• Additional working capital
• Sale proceeds of existing assets.
• Depreciation
• Financial flows (to be distinguished from operation flows)
EVALUATION:
Group of experts who have no ake to grind should be taken in selecting the methods of
evaluation as NPV, IRR, PI, Pay Back, ARR & Discounted Pay Back.
Pay Back period is used as “Primary” method & IRR/NPV as “Secondary” method in
India. The following are to be given due importance.
• For evaluation, minimum rate of return or cut-off is necessary.
• Usually if is computed by means of weighted Average cost of Capital (WACC)

• Opportunity cost of capital should be based on risky ness of cash flow of investment
proposals.
• Assessment of risk is an important aspect. Sensitivity Analysis & Conservative for

costs are two important methods used in India.
AUTHORIZATION:
Screening and selecting may differ from one company to another. When large sums are
involved usually final approval rests with top management. Delegation of approval authority
may be effected subject to the amount of outlay. Budgetary control should be rigidly exercised.
CONTROL AND MONITORY:

A Capital projects reporting system is required to review and monitor the performance of
investment projects after completion and during their life. Follow up comparison of the actual
performance with original estimates to ensure better forecasting besides sharpening the
techniques for improving future forecasts. As a result company may re-praise its projects and
take necessary action.
Indian Companies use regular project reports for controlling capital expenditure reports may be
quarterly, half-yearly, monthly, bi-monthly continuous reporting..
• Expenditure to date
• Stage and physical completion
• Approved total cost
• Revised total cost
DECISION MAKING LEVEL:

For planning and control purpose three levels of Decision making have been identified :
• Operating
• Administrative
• Strategic
OPERATING CAPITAL BUDGETING:

Includes routine minor expenditure, as office equipment handled by lower level
management.
ADMINISTRATIVE CAPITAL BUDGETING:

Falls in between these two levels involves medium size investments such as business
handled by middle level management.
STRATEGIC CAPITAL BUDGETING:

Involves large investment as acquisition of new business or expansion in a new time of
business, handled by top management unique nature.

CHAPTER NO 4
COLLECTION OF DATA

CHAPTER-4 COLLECTION OF DATA:-
The task of data collection begins after a research problem has been defined and research
design/plan chalked out. The collection of data is done to support tour findings and interest
the result whether the result you have found in according to your hypothesis or not. The data
can be collected by various methods. These are broadly classified into two ways, as follows:
PRIMARY DATA
SECONDARY DATA
PRIMARY DATA:-
The primary data are those which are collected a fresh and for the first time and thus happen
to be original in character. We collect primary data during the course of doing experiments in
an experimental research. It is the first hand data and nobody else has collected this before.
There are various ways of collecting primary data, these are as follows:
1). Observation method

3). Questionnaires
4). other methods
SECONDARY DATA:
1. From Internet
2 Government Publications
DATA ANALYSIS & INTERPRETATION

It is also known as “working capital ratio” .It is a measures of short-term financial strength of
the business and shows whether the business will be able to meet it’ s current liabilities as
when they mature.
Current Assets including assets which can be converted in to cash easily and itself like
market securities debtors, inventory, prepaid expenses etc.
Current Liabilities included creditors, bills payable, accrual expenses, short term bank loan,
income tax liabilities and long term debt maturity in current year. In short it can be said as all
obligations within a year are included in current liabilities.
Current ratio is a measure of the firm’s short term solvency. It indicates the availability of
current assets in rupee of current liabilities. As a conventional rule, a current ratio should be
or slightly more. It focuses the strong of weak position of the company.

Table No. 1: capital position analysis in Evershine Decor Private Limited
YEAR 2019 2018 2017 2016 2015
Current Assets 56.32 65.32 50.26 39.25 38.64
Inventories 43.54 42.11 39.97 33.15 26.29
cash and bank balance 6.89 5.59 4.7 4.51 11.21
loan and advances 18.44 28.35 20.66 21.61 12.13
Total current Assets 125.19 141.37 115.59 98.52 88.27
Less
Current Liabilities
Provision 1.25 1.27 1.89 1.47 1.91
short term borrowing 24.84 69.58 19.79 14.61 18.46
sundry creditors 62.28 23.19 59.36 43.81 55.38
Total current liabilities 88.37 94.04 81.04 59.89 75.75
Net working capital 36.82 47.33 34.55 38.63 12.52
(Source: By Researcher)
Interpretation: The above table shows that total resource and liabilities of the organization
from 2011 to 2015. It demonstrates that organization has adequate working funding to meet
its fleeting risk, it is a great pointer for the organization however in 2014, and working capital
is expanded by 47.33 cr. which demonstrates that an adequate sum has been hindered in

Table No. 2: Components of Current asset and liabilities Analysis of Evershine Decor
Private Limited
Year 2019 2018 2017 2016 2015
Inventories 56.32 65.32 50.26 39.25 38.64
Sundry debtors 43.54 42.11 39.97 33.15 26.29
Cash and Bank Balance 6.89 5.59 4.7 4.51 11.21
Loan and Advances 18.44 28.35 20.66 21.61 12.13
Current liabilities 88.37 94.04 81.04 59.89 75.75
Sundry Creditors 62.28 23.19 59.36 43.81 55.38
Provision 1.25 1.27 1.89 1.47 1.91
Interpretation
Inventories: The stock is expanded from 2015 to 2019 on the grounds that the organization
is purchasing crude material in more numbers and remembers of 65.32 and in the year 2019,
it diminished by 56.32.
Sundry Debtors: Account holders increment just when deals increment and decline if deals
diminish. Thusly, sundry indebted individuals expanded from 2015 to 2019 by 43.54 shows
that offers of the organization are additionally expanded.
Cash and Bank Balance: In the year 2015, money and bank parity are high which not a
decent sign is for the organization since it demonstrates that organization is not utilizing its
money for gainful exercises. Be that as it may, in the year 2018 to 2019 money has expanded
from 5.59 to 6.89 cr. that is not a decent sign for the organization.
Credit and Advances: In credit and advances demonstrates an uneven example which shows
that organization is giving advances for the extension of plants and hardware and
modernization. The organization concentrates on expanding inflow.
Current Liabilities: Current liabilities expanded due to credit and sundry indebted
individuals. In the year 2017 to 2018, it is expanded from 81.04 to 94.04. Thusly the
company is giving advances for the development of plants and hardware. Furthermore, in the
following year 2019, it is diminished by 88.37 when company has least liabilities it makes a
superior goodwill in the business sector.
Sundry Creditors: From 2015 to 2019, loan bosses are expanded by 54.38 to 62.28
demonstrates that creditors increment just when buys expanded.
Provision: The above table it demonstrates that arrangement is an uneven pattern. In the year
2015 to 2016 that are diminished by 1.91 to 1.47 and in the year 2017 that are expanded by
1.89 and then in the following two-year arrangement are diminished by 1.27 to 1.25.
Table No. 3: Position of capital ratio in Evershine Decor Private Limited
Year Inventory Receivable Payable Sales Capital Ratio
2019 56.32 43.54 62.28 295.97 0.13
2018 65.32 42.11 23.19 255.67 0.33
2017 50.26 39.97 59.36 192 0.16
2016 39.25 33.15 43.81 160.65 0.18
2015 38.64 26.29 55.38 128.56 0.07
160
140
120
Total Current
100
Inventories
80
Total Current
60 Quick Ratio
40
20
0
2019 2018 2017 2016

Interpretation: This proportion demonstrates whether the interests in current resources or
net current resources (i.e., working capital) have been appropriately used. All together words,
it demonstrates the relationship amongst deals and working capital. Higher the proportion
lower is the interest in working capital and higher is the gainfulness. In any case, too high
proportion shows over exchanging.
This proportion is an essential pointer of the working capital position. Presently from the
above table and graph, it demonstrates the five-year information, that it takes after the
expanding pattern which implies that its interest in working capital is higher and the
organization is using less of its benefit.
Table No. 4: Position of current ratio in Evershine Decor Private Limited .
Year Total current assets Total current liabilities Current ratio
2019 125.19 88.37 1.42
2018 141.37 94.04 1.50
2017 115.59 81.04 1.43
2016 98.52 59.89 1.65
2015 88.27 75.75 1.17
160
140
120
100
Total current assets
80
Total current liabilities
60 Current ratio
40
20
0
2019 2018 2017 2016 2015

Interpretation: This proportion reflects financial stability of the enterprise. The standard of
the ordinary proportion is 2:1 yet in a large portion of organization's standard is taken by
Tendon Committee which is taken as 1.33:1.By break down from the above table five years
information it can be anticipated that it holds a steady position all through period however it
is observed that it holds a low position than the standard one and the organization is required
to enhance its position.
Table No. 5: Position of Quick ratio in Evershine Decor Private Limited
Year Total Current Inventories Total Current Quick Ratio
Assets Liabilities
2019 125.19 56.32 88.37 0.78
2018 141.37 65.32 94.04 0.81
2017 115.59 50.26 81.04 0.81
2016 98.52 39.25 59.89 0.99
2015 88.27 38.64 75.75 0.66
160
140
120
100 Total Current
80 Inventories
60 Total Current
Quick Ratio
40
20
0
2019 2018 2017 2016 2015

Interpretation: This ratio shows relationship between quick liquid assets and quick
liabilities. The ordinary worth for such proportion is taken to be 1:1. This is working as an
assessment tool for liquidating situation testing of the firm. It shows the relationship between
strictly liquid whose feasible worth is verging on sure on one hand and strictly liquid
liabilities then again. Liquid assets involve every present resource short stock.
By analyzing five years information it can be said that its position feeble in the year 2015 yet
it enhanced essentially in the following year and again it is declined in the year 2017 to 2019.
It is to be said that it doesn't meet the standard however in the year 2016. It was near the
standard and it can be said that its liquidity position is not up to the mark but holding a stable
position.

Table No. 6: Position of receivable ratio in Evershine Decor Private Limited
Year Debtors Sales Receivable Ratio
2019 43.54 295.97 54
2018 42.11 255.67 60
2017 39.97 192 76
2016 33.15 160.65 75
2015 26.29 128.56 75
350
300
250
200 Debtors
Sales
150
Receivable Ratio
100
50
0
2019 2018 2017 2016 2015
Interpretation: By and large, a low debtor’s turnover ratio implies that it considered amicable
for the business as it infers better income. The proportion shows the time at which the
obligations are gathered on an average during the year. Obviously that a high Debtors Turnover
Ratio infers a shorter Collection period, this shows brief installment made by the client.

Table No. 7: Position of payable ratio in Evershine Decor Private Limited .
Year Receivable Sales Payable Ratio
2015 62.28 295.97 76
2014 23.19 255.67 33
2013 59.36 192 113
2012 43.81 160.65 99
2011 55.38 128.56 157
Interpretation: It shows the ability of the firm to benefit the credit facility from the suppliers
consistently. By and large a low loan boss' turnover proportion infers ideal since the firm
appreciates extensive credit period.
INVENTORY TURNOVER RATIO

This ratio is also known as “stock turnover ratio”. The number of times the average stock is
turnover during the year is known as stock turnover. It is computed by deciding the sales by the
Inventory. The ratio is important in joining the ability of management which it can move the
stock.
For the year:
2018 - 19 = Rs. 151224.01 = 7.51 times
Rs. 20109.61
2017 - 18 = Rs. 137146.66 = 7.17 times
Rs. 19126.14
2016 - 17 = Rs. 111692.72 = 9.20 times
Rs. 12136.51

YEAR INVENTORY TURNOVER RATIO
2018-19 7.51 times
2017-18 7.17 times
2016-17 9.20 times
DEBTORS TURNOVER RATIO

35
30
25
20
15 DEBTORS TURNOVER RATIO
10
5
0
2018-19 2017-18 2016-17
INTERPRETATION:
Higher the ratio more profitability the business would be. The ratio is joining the ability of
management with which it can move the stock. Inventory turnover ratio is highest in the year
2016-17 is 9.20 as compare to the other year but in current year it is 7.51 which is little lower
than previous year but it is obvious that in heavy industries like Evershine Decor Private Limited
have lower ration as compare to FMCG.
NET CAPITAL TURNOVER RATIO
Net capital turnover ratio is obtained by net working capital joining to sales. The excess of
current assets over current liabilities is called working capital. It is found for measuring firm
liquidity. It also measures the firm potential reserve of funds.

For the year:
2018 - 19 = Rs. 151224.01 = 5.83 times
Rs. 19874.06
2017 - 18 = Rs. 137146.66 = 5.57 times
Rs. 24622.18
2016 - 17 = Rs. 111692.72 = 9.85 times
Rs. 11334.95
YEAR CAPITAL TURNOVER RATIO

2018-19 7.60 times
2017-18 5.57 times
2016-17 9.85 times
CAPITAL TURNOVER RATIO

12
10
8
6
4
2
0
2018-19 2017-18 2016-17
INTERPETATION:
As per the balance sheet data of the creditor the working capital turnover ratio is different for the
different years. The ratio is 7.60 in 2018 – 19 and 5.57 in 2017 – 18 but the best favorable ratio is in
2016-17 which is 9.85 times. So it means that higher the ratio better the working capital condition of
the company.

DEBTOR COLLECTION PERIOD
The Debt Collection shows the number of days taken to collect the debts of credit sales. It shows
the efficiency and collection policy of the company. The ratio is computed by dividing the Debtor’s
turnover ratio in to 365 days.= ′
For the year:
2018 – 19 = 365 days = 11 days
31.21
2017 - 18 = 365 days = 16.15 days
22.60
2016 - 17 = 365 days = 12.20 days
29.92
YEAR CAPITAL TURNOVER RATIO

2018-19 11 Days
2017-18 16.15 days
2016-17 12.20 days
CAPITAL TURNOVER RATIO

20
15
10
5
0
2018-19 2017-18 2016-17
INTERPRETATION:
The collection period is highest in 2018–19 is 11 days as compare to very low in 2017-18 is only
16.15 days. This shows the improvement in collection policy of the Evershine Decor Private
Limited . So it is very important for any company to collect the debs which this company does
very well.

STATEMENT OF RATIO ANALYSIS
RATIOS 20018-19 2017-18 2016-17
Current ratio 1.64 2.19 1.77
Debtor’s turnover ratio 31.21 22.60 29.92
Creditor’s turnover ratio 3.33 4.62 5.47
Inventory turnover ratio 7.51 7.17 9.20
Net-working capital turnover ratio 7.60 5.57 9.85
Debt collection period 11 16.15 12.20

CHAPTER NO: 5 FINDING

CHAPTER NO 5 FINDING
MAJOR FINDINGS
Findings of capital management of Evershine Decor Private Limited
The company having comfortable capital position. The absolute liquidity of the Evershine Decor
Private Limited is in favour.
The collection policy of the company is very good.
The creditors turnover ratio is 3.33 in 2018-19 as compare to 2017-18 the ratio is 4.62 which is
higher than the other years.
Inventory turnover ratio is highest in the year 2016-17 is 9.85 as compare to the other year but in
current year it is 7.60 which is little bit lower than previous year but it is obvious that in heavy
industries like Evershine Decor Private Limited have lower ratio as compared to Others.
This is an improvement in collection policy of the Evershine Decor Private Limited.

CHAPTER NO: 6 SUGGESTIONS

CHAPTER:6 SUGGESTIONS
The recommendation & suggestion for effective management of working capital at Evershine
Decor Private Limited are given bellow:
1) For inventory, in order to improve the position, Evershine Decor Private Limited can reduce
the level of stocks by resorting to phased production i.e. producing according to requirement and
disposing off or recycling the unserviceable inventories.
However, the low turnover of stock may also be due to problems with generation of sales.
Inventory management is a great concern for Evershine Decor Private Limited especially stores
and spares. The purchase manager should take proper steps for procurement of inventories.
2) The company must take certain steps to decrease the working capital cycle. One way can be
better management of inventories.
3) Evershine Decor Private Limited is suggested to maintain a balance in capacities,

synchronization of various inputs availability of some materials or parts which are not easily
available.
4.) Short term credit period availed must be reduced and sundry creditors should be paid faster.
5.) It should maintain inventory at an optimum level rather than a very optimistic level.
6.) The procurement for materials requisition processing should be reduced so as to minimize the
lead time.
7.) Freedom should be there in deciding the credit policies, cash discount or credit ratings.
8). Evershine Decor Private Limited can also consider negotiating its creditors for relaxing the
debt repayment period and repaying only on or just before the expiry of the credit period.
CONCLUSION OF FINDING
In the present study I have analyzed the capital management of Evershine Decor Private Limited
. The study involves practical and conceptual over view of decisions concerning current assets
like cash and bank balance ,inventories( like raw materials ,w-i-p,finished goods ),sundry
debtors, loans and advances, other current assets and current liabilities like sundry creditors,
securities and other deposits, other current liabilities and provisions of Evershine Decor Private
Limited . Was with the objective of maximizing the overall net profit of the bank. And complete
synchronization and co ordination among the working capital components which shall contribute
to optimum level of operations. Mismanagement of each or any of these components shall be

detrimental to the objectives of efficient operation, profitability and maximization of overall
value of the bank.
The capital limits would be considered only after the project nearing completion and after
ensuring control over the inventory. The inventory is a great concern for Evershine Decor Private
Limited and it need proper procurement and management.
Eligible capital limits would be assessed by cash Budget method And Projected production
method depending the market condition, scale of operation, nature of activity/enterprise and
duration/length of operating cycle etc.

CHAPTER NO: 7 CONCLUSION

CHAPTER NO: 7 CONCLUSION
The study implies to analyze the determinants of firm’s financial soundness connected with
the management of capital with organization's financial related information of the period
2015-2019. On working capital ratio, it follows the increasing trend which shows its higher
investment in capital and the company is utilizing less of its profit. But beside of this quick
ratio is very close to the standard and also said that its liquidity position is not good & stable.
Clinched alongside any case, adjacent should for this smart extent is close to the standard and
it could make said that its liquidity position will be awful and stable. It is Needless to say that
a high Debtors turnover ratio infers a shorter collection period which exhibits short portion
settled on by the customer. Eventually, a low creditor's turnover ratio extent proposes
incredible since the firm appreciates in length credit period.
In relation to the main objective, it shows that the capital management of Evershine Decor
Private Limited . is satisfactory during all the years under study additionally; the company
has shown an immense progress. Previously, liquidity position all around the considerable
length of time under study.

REFERENCES
[1] Joshi L, Ghosh S. Working Capital Management of Cipla Limited: An Empirical Study.
International Journal of Marketing, Financial Services & Management Research 2012; 1(8).
[2] Srinivas KT. A study on working capital management through ratio analysis with
reference to karnataka power corporation limited. National monthly refereed Journal of
research in Commerce & Management.
[3] Madhavi K. Working Capital Management of Paper Mills. International Journal of

Research in Business Management.
[4] Arshad Z, Muhammad YG. Impact of Working Capital Management on Profitability: A

Case of The Pakistan Cement Industry. Interdisciplinary Journal of Contemporary Research
In Business.
[5] Chandra P. Financial Management. New Delhi: Tata Mcgraw- Hill Publishing company,
1984.
[6] Pandey IM. Financial Management. New Delhi: Vikas Publishing House Ltd, 1978.
[7] Zikmund BC. Business research method. New Delhi: Cengage learning India Pvt. Ltd,
1978.
[8] Kothari CR. Research Methodology Methods & Techniques, New age International
Publishers, 2nd Revised Edition, 2004.
[9] Bhattacharya DK. Research Methodology, Excel Books, 2nd edition.

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Summer Internship

Institute Code: 725

KALOL INSTITUTE OF MANAGEMENT

Under the Guidance of

In partial Fulfillment of the Requirement of the award of the degree of Master of

MBA (Semester III)

KALOL INSTITUTE OF MANAGEMENT

Enrollment no Name Signature

KALOL INSTITUTE OF MANAGEMENT

KALOL INSTITUTE OF MANAGEMENT

KALOL INSTITUTE OF MANAGEMENT

KALOL INSTITUTE OF MANAGEMENT

CHAPTER -1 INDUSTRY PROFILE ........................................................................................................................................................... 8

NEED OF THE PROJECT AND ITS IMPORTANCE IN THE COUNTRY ............................................................................................... 9

SCOPE OF THE WORK .......................................................................................................................................................................... 17

IMPACT ASSESSMENT METHODOLOGIES ...................................................................................................................................... 18

SITE VISIT PHOTOGRAPHS ................................................................................................................................................................. 21

CHAPTER – 2 TECHNICAL DESCRIPTION OF THE PROCESS.............................................................................................................................. 2

Reaction Chemistry .................................................................................................................................................................................... 5

Our Vision ................................................................................................................................................................................................. 26

Our Mission .............................................................................................................................................................................................. 26

Factory Address ........................................................................................................................................................................................ 26

Contact Info .............................................................................................................................................................................................. 26

CHAPTER -3 CAPITAL BUDGEING: ....................................................................................................................................................... 28

CHAPTER-4 COLLECTION OF DATA:- ................................................................................................................................................. 42

CHAPTER NO 5 FINDING ......................................................................................................................................................................... 56

CHAPTER:6 SUGGESTIONS ............................................................................................................................................................................ 58

CHAPTER NO: 7 CONCLUSION .............................................................................................................................................................. 61

KALOL INSTITUTE OF MANAGEMENT

KALOL INSTITUTE OF MANAGEMENT

M /s . Ev e r Shine Dé c or Pvt. L td . is proposed to manufacture Resins (Phenol

Table: 1.1 Product Details

No. Product Total Quantity ( MT/month)

1. Phenol Formaldehyde Resin 200 MT/month

2. Melamine Formaldehyde Resin 200 MT/month

3. Urea Formaldehyde Resin 240 MT/month

4. Laminated Sheets 1,60,000 Sheets/Month

PURPOSE OF THE REPORT

as stated in Environment Impact Assessment Notification Published on 14th September, 2006.

KALOL INSTITUTE OF MANAGEMENT

NEED OF THE PROJECT AND ITS IMPORTANCE IN THE COUNTRY

Phenol Formaldehyde Resins are found in extremely great number of industrial

Melamine Formaldehyde Resin is a hard, thermosetting plastic material made from

Urea Formaldehyde Resin is everywhere and used in many manufacturing processes

KALOL INSTITUTE OF MANAGEMENT

Sr. Name of Address Contact Age Experience

The index map is given in Fig. 1.1

KALOL INSTITUTE OF MANAGEMENT

KALOL INSTITUTE OF MANAGEMENT

KALOL INSTITUTE OF MANAGEMENT

KALOL INSTITUTE OF MANAGEMENT

KALOL INSTITUTE OF MANAGEMENT

Fig 1.3 Road map showing proposed project site

Fig 1.4 Google image showing proposed project site

Sr. Important Features Description

KALOL INSTITUTE OF MANAGEMENT

The EIA study includes determination of baseline conditions, assessment of the