Shree Chanakya Education Society’s

Indira Institute of Management, Pune

Assignment
Name: Akshay Gopinath Dabhade
Div: D Roll No: 08
Assignment Topic: “LOAN PROPOSAL”
Program Name: MBA
Semester II Batch: 2018-2020
Course Name: Financial Management

Date of Submission:

Submitted to: Prof. Smitha Pappachan

 BANK PROPOSAL FOR GD CABLES LTD

Applicant:
AkshayDabhade
GD Ltd
177 B, Aurangabad, India.
dabhade.akshay@gmail.com

Dear Manager,
ICICI bank

My organization has been in the electrical cables industry for more than five decades,
incorporated in1958. We are leading manufacturer of electrical cables in the country. We are
specialized in producing the power cables, multicore cables. We provide efficient and secure
wiring solution . We are planning for establishing a new production plant in DMIC area of
Aurangabad. This plant will provide employment to the local public and will contribute to the
development of the city. So hereby I am requesting you for a loan and sending you the loan
proposal with all the details of my organization.

Regards

Akshay Dabhade
 COMPANY PROFILE
GD Cables Ltd is an Indian manufacturer of electrical and telecommunication cables
based in Pune, Maharashtra. It is the flagship company of the GD Group, established in 1958.

The company also manufactures polyvinyl chloride (PVC) sheets for roofing, signage and
interiors. Its manufacturing facilities are locatedin chakan and Urse in Pune as well as at Goa and
Uttarakhand. The company's product range is used for electrical usage, transmission of voice,
data and images, for domestic, commercial and industrial applications, and for electrical
products. Its electrical cables products include 1100 volt PVC insulated cables, motor winding
PVC insulated cables and three core flat cables, automotive/battery cables, UPS cables, heavy
duty, underground, low voltage, power and control cables, and heavy duty, underground, high
voltage, power cables.

MANAGEMENT

Board of Directors
 Shri. Gopinath Baviskar- Chairman
He is a Executive Chairman of the company. He holds graduate degree from
Pune University, India. He joined management team in 1982 and was in charge of and
extension services in Maharashtra and other state. At present he also act as director in
charge of power cables.

 Shri Akshay Dabhade- Vice Chairman & Managing Director

 Shri Pravin Borkar- Joint Managing Director

 Shri Munjaji Ardad- Executive Director

 Smt Vitthal Malode- Independent

 PRODUCTS

 PVC insulated electrical cables

 FRLS cables
 PVC winding wires
 Jelly filled telephone cables
 PVC foam sheets
 CFL
 PVC single core flexible cables
 PVC corrugated sheets
 Auto and battery cables
 3 core flat cables
 CATV (trunk coaxial cables)
 Structured cabling system
 Switchboard cables
 Co-axial cables
 PVC multicore flexible cables
 PVC rigid sheets
 LT PVC/XLPE power and control cables
 Electrical switches

MARKET POTENTIAL
GD cables started its manufacturing process with production of PVC insulated electrical cables. It
prepared cable initially for the automobile industry. It has over the years increased its product range to
PVC insulated single core and multi-core industrial flexible cables, polythene insulated jelly filled
telephone cables, Auto and Battery cables, power and control cables, Flame Retardant Low Smoke
electrical wires, Switchboard cables, Co-axial and CATV cables, PVC insulated winding wires and 3 core
flat cables, LAN Cables, Fibre Optic cables and others.

GD Cables Limited has its manufacturing centers at chakan, Urse and Goa. Owing to the world
class quality, upgrading technology and services, it has become one of the leading companies of India.
This ISO 9002 certified company has a number of plants and factories spread at various locations of the
country. We are leading wire manufacturers in India. The future challenges of the industry are providing
efficient and safe wires which can also be used to flow the low amount of energy produced from non
conventional energy sources such as solar energy, wind energy.

COMPITITORS
Polycab cables Ltd Polycab Group
Finolex cables Ltd Finolex Group
Sterlite cables Ltd Sterlite Industries
Havells India Ltd Panasonic
 LOAN REQUEST
AMOUNT
The estimated total budgetary requirement for funds is Rs 600 Cr for setting a production
plant. We are seeking Rs 200 Cr from our investors. We need another Rs 400 Cr funds for
establishing this production plant. The plant will start its operation in 8 months.

The funds will be utilized in following manner-

 Production facility for cables production plant.- 260 Cr machineries are an important
factor of our production facility. It requires state of art technology to produce power
cables
 Land acquisition-80 Cr Power plant requires large mass of land. So there should be
considerable amount of funds provided for land acquisition.
 Research and development- 60Cr Research and development will ensure technological
expertise in early as well as later phase of operation.

REPAYMENT
 We are asking for a loan amount of Rs 400 Cr to be repaid over one and half year at a
rate of 12% interest, making payments of Rs 25 cr monthly.
 Our estimates for revenue are an average of Rs 4 Cr per day over 24 operational days per
month for a total revenue stream of a month Rs 100 Cr. After factoring in staff costs of
Rs 22 Cr per month and operational costs of Rs 40 Cr. we are left with enough money to
comfortably repay a loan under those terms.

COLLATERAL
 For as a mortgage loan we give you our some assets and some shares as a security to you.
The legal paper of land which is in Mumbai are can be given to you as a mortgage
security & the share certificate of shares (face value is Rs 40 and market value is Rs 72)
which are also we can give you as a mortgage security.
 FINANCIAL STATEMENTS
BALANCE SHEET

Balance Sheet of GD ------------------- in Rs. Cr. -------------------

Cables
Mar '18 Mar '17 Mar '16 Mar '15 Mar '14
12 mths 12 mths 12 mths 12 mths 12 mths
Sources Of Funds
Total Share Capital 30.59 30.59 30.59 30.59 30.59
Equity Share Capital 30.59 30.59 30.59 30.59 30.59
Reserves 2,163.31 1,846.85 1,437.04 1,234.22 1,072.78
Networth 2,193.90 1,877.44 1,467.63 1,264.81 1,103.37
Secured Loans 178.00 189.12 25.00 50.03 125.00
Unsecured Loans 0.00 0.00 0.75 1.21 1.69
Total Debt 178.00 189.12 25.75 51.24 126.69
Total Liabilities 2,371.90 2,066.56 1,493.38 1,316.05 1,230.06
Mar '18 Mar '17 Mar '16 Mar '15 Mar '14
12 mths 12 mths 12 mths 12 mths 12 mths
Application Of Funds
Gross Block 549.01 516.53 1,098.03 1,084.75 1,048.36
Less: Accum. Depreciation 140.02 101.66 673.20 620.96 552.52
Net Block 408.99 414.87 424.83 463.79 495.84
Capital Work in Progress 5.20 8.15 0.00 6.67 10.70
Investments 1,214.82 895.87 616.50 494.22 403.14
Inventories 499.06 462.01 336.81 318.62 352.40
Sundry Debtors 174.92 124.39 125.92 118.61 145.17
Cash and Bank Balance 103.61 175.84 218.82 138.37 64.86
Total Current Assets 777.59 762.24 681.55 575.60 562.43
Loans and Advances 69.45 95.02 92.25 93.48 91.86
Total CA, Loans & Advances 847.04 857.26 773.80 669.08 654.29
Current Liabilities 66.71 67.58 263.24 270.81 243.03
Provisions 37.44 42.01 61.65 46.90 90.88
Total CL & Provisions 104.15 109.59 324.89 317.71 333.91
Net Current Assets 742.89 747.67 448.91 351.37 320.38
Total Assets 2,371.90 2,066.56 1,490.24 1,316.05 1,230.06
Contingent Liabilities 248.18 154.33 324.02 344.60 413.90
Book Value (Rs) 143.45 122.76 95.96 82.70 72.14
PROFIT AND LOSS STATEMENT

Profit & Loss account ------------------- in Rs. Cr. -------------------

Mar '18 Mar '17 Mar '16 Mar '15 Mar '14
12 mths 12 mths 12 mths 12 mths 12 mths
Income
Sales Turnover 2,884.23 2,670.75 2,612.45 2,574.79 2,509.95
Excise Duty 69.11 225.91 151.36 125.70 150.91
Net Sales 2,815.12 2,444.84 2,461.09 2,449.09 2,359.04
Other Income 127.19 98.38 64.09 80.99 58.73
Stock Adjustments 31.91 118.33 17.32 -52.06 21.53
Total Income 2,974.22 2,661.55 2,542.50 2,478.02 2,439.30
Expenditure
Raw Materials 2,097.50 1,868.18 1,760.00 1,789.79 1,807.55
Power & Fuel Cost 47.47 43.48 21.25 30.84 37.07
Employee Cost 135.46 119.19 107.56 93.96 84.83
Selling and Admin Expenses 25.58 17.35 13.91 0.00 0.00
Miscellaneous Expenses 118.70 143.54 236.64 222.66 202.93
Total Expenses 2,424.71 2,191.74 2,139.36 2,137.25 2,132.38
Mar '18 Mar '17 Mar '16 Mar '15 Mar '14
12 mths 12 mths 12 mths 12 mths 12 mths
Operating Profit 422.32 371.43 339.05 259.78 248.19
PBDIT 549.51 469.81 403.14 340.77 306.92
Interest 1.44 4.29 9.53 13.65 14.48
PBDT 548.07 465.52 393.61 327.12 292.44
Depreciation 43.80 48.03 57.23 63.97 48.43
Profit Before Tax 504.27 417.49 336.38 263.15 244.01
PBT (Post Extra-ord Items) 504.27 417.49 336.38 263.15 244.01
Tax 146.28 103.44 87.54 64.49 36.33
Reported Net Profit 358.20 315.88 248.84 198.66 207.68
Total Value Addition 327.21 323.56 379.36 347.46 324.83
Equity Dividend 45.87 38.24 38.24 27.53 24.47
Corporate Dividend Tax 9.34 7.72 7.78 5.60 4.16
Per share data (annualised)
Shares in issue (lakhs) 1,529.39 1,529.39 1,529.39 1,529.39 1,529.39
Earning Per Share (Rs) 23.42 20.65 16.27 12.99 13.58
Equity Dividend (%) 200.00 150.00 125.00 90.00 80.00
Book Value (Rs) 143.45 122.76 95.96 82.70 72.14
 CASH FLOW STATEMENT
Cash Flow ------------------- in Rs. Cr. -------------------
Mar '18 Mar '17 Mar '16 Mar '15 Mar '14
12 mths 12 mths 12 mths 12 mths 12 mths
Net Profit Before Tax 504.48 419.32 336.38 263.14 244.01
Net Cash From Operating Activities 235.68 212.76 0.00 183.13 222.73
Net Cash (used in)/from
-134.46 -126.11 0.00 31.20 -67.17
Investing Activities
Net Cash (used in)/from Financing
-56.75 -75.38 0.00 -40.06 -61.05
Activities
Net (decrease)/increase In Cash and
44.47 11.27 -0.67 174.27 94.51
Cash Equivalents
Opening Cash & Cash Equivalents 32.40 21.13 21.88 231.17 136.66
Closing Cash & Cash Equivalents 76.87 32.40 21.21 405.44 231.17

KEY FINANCIAL RATIOS

Key Financial Ratios

Mar
Mar '17 Mar '16 Mar '15 Mar '14
'18
Investment Valuation Ratios
Face Value 2.00 2.00 2.00 2.00 2.00
Dividend Per Share 4.00 3.00 2.50 1.80 1.60
Operating Profit Per Share (Rs) 27.61 24.29 22.17 16.99 16.23
Net Operating Profit Per Share (Rs) 184.07 159.86 160.92 160.13 154.25
Free Reserves Per Share (Rs) -- -- -- -- --
Bonus in Equity Capital 95.49 95.49 95.49 95.49 95.49
Profitability Ratios
Operating Profit Margin(%) 15.00 15.19 13.77 10.60 10.52
Profit Before Interest And Tax
12.86 12.70 11.16 7.80 8.29
Margin(%)
Gross Profit Margin(%) 13.44 13.22 11.45 7.99 8.46
Cash Profit Margin(%) 13.66 14.29 12.12 9.57 10.20
Adjusted Cash Margin(%) 13.66 14.29 12.12 9.57 10.20
Net Profit Margin(%) 12.72 12.92 10.11 8.11 8.80
Adjusted Net Profit Margin(%) 12.17 12.41 9.85 7.92 8.62
Return On Capital Employed(%) 21.32 20.49 23.16 19.32 20.17
Return On Net Worth(%) 16.32 16.82 16.95 15.70 18.82
Adjusted Return on Net Worth(%) 16.32 16.82 16.95 13.92 17.88
Return on Assets Excluding 143.45 122.76 95.96 82.70 72.14
Revaluations
Return on Assets Including
143.45 122.76 95.96 82.70 72.14
Revaluations
Return on Long Term Funds(%) 23.05 22.55 23.16 19.32 20.17
Liquidity And Solvency Ratios
Current Ratio 1.85 1.76 2.38 2.11 1.96
Quick Ratio 3.34 3.61 1.35 1.10 0.90
Debt Equity Ratio 0.08 0.10 0.02 0.04 0.11
Long Term Debt Equity Ratio -- -- 0.02 0.04 0.11
Debt Coverage Ratios
Interest Cover 351.33 98.74 36.30 18.63 17.13
Total Debt to Owners Fund 0.08 0.10 0.02 0.04 0.11
Financial Charges Coverage Ratio 381.75 109.94 42.30 23.32 20.48
Financial Charges Coverage Ratio
280.17 85.83 33.12 20.24 18.69
Post Tax
Management Efficiency Ratios
Inventory Turnover Ratio 5.78 5.78 7.76 8.08 7.12
Debtors Turnover Ratio 18.81 19.53 20.13 18.57 16.00
Investments Turnover Ratio 5.78 5.78 7.76 8.08 7.12
Fixed Assets Turnover Ratio 5.14 4.74 2.24 2.26 2.25
Total Assets Turnover Ratio 1.19 1.18 1.65 1.86 1.92
Asset Turnover Ratio 1.27 1.37 1.75 1.92 2.04

Average Raw Material Holding -- -- -- -- --

Average Finished Goods Held -- -- -- -- --
Number of Days In Working Capital 92.31 100.78 69.97 53.95 50.01
Profit & Loss Account Ratios
Material Cost Composition 74.50 76.41 71.51 73.07 76.62
Imported Composition of Raw
-- -- 10.42 8.82 11.75
Materials Consumed
Selling Distribution Cost
0.90 0.70 0.56 -- --
Composition
Expenses as Composition of Total
0.97 -- 1.69 2.20 2.09
Sales
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit 12.80 12.10 15.36 13.85 11.78
Dividend Payout Ratio Cash Profit 11.41 10.50 12.49 10.48 9.55
Earning Retention Ratio 87.20 87.90 84.64 84.38 87.60
Cash Earning Retention Ratio 88.59 89.50 87.51 88.54 90.05
AdjustedCash Flow Times 0.44 0.52 0.08 0.21 0.52
Mar
Mar '17 Mar '16 Mar '15 Mar '14
'18
Earnings Per Share 23.42 20.65 16.27 12.99 13.58
Book Value 143.45 122.76 95.96 82.70 72.14