Detergents India Limited 207Land and building –
Machinery Rs 15.3 lac
Net working capital Rs 2,943,291
Revenues @ Rs 450 per MT Rs 225,000
Expenses @Rs220 Rs 110,000
Interest Rs 23,500
Overheads Rs 50,000
Profit Rs 498,000
The ROI works out to 50 percent.THE CONSEQUENCES OF TAKING UP THE HLL INDENT
HLL pays a processing charge of Rs 1,125, providing the existing facility to HLL yields an EBIT of Rs
10,392,000. The break up of plant capacity (in MT) available to DIL is:
Existing factories
Kodur 1400
Coimbatore 750
Gulbarga 550 2700
Processing Arrangements
JDPL 450
Calcutta Chemicals 250 700
Existing third parties
NAMCO 200
VDPL 200 400
Total 3800
The profitability of the HLL indent is worked out as follows:Processing charges received: (in Rs)
Kodur 1400 × 1125 1,575,000
Coimbatore 750 × 1125 843,750
Gulbarga 550 × 850 467,500
JDPL 450 × 1125 506,250
CCC 250 × 850 212,500
Total 3,605,000
Less: Variable cost
Kodur 500 × 1400 700,000
Coimbatore 750 × 430 322,500
Gulbarga 550 × 430 236,500
JDPL 450 × 800 360,000
CCC 250 × 800 200,000 1,819,000
Less: Overheads
Factory overheads
Kodur 300000
Coimbatore 130000
Gulbarga 100000
Table contd.