Get our free book (in Spanish or English) on rainwater now - To Catch the Rain.

Difference between revisions of "Original:Small Scale Production of Lime for Building 4"

From Appropedia
Jump to: navigation, search
m (1 revision(s))
m (Robot: Automated text replacement (-clothing +clothing))
Line 367: Line 367:
 
|- valign="TOP"
 
|- valign="TOP"
 
| rowspan="1" colspan="2" valign="TOP" |
 
| rowspan="1" colspan="2" valign="TOP" |
safety clothing and equipment-replaced every 2 years
+
safety [[clothing]] and equipment-replaced every 2 years
 
| rowspan="1" colspan="1" valign="TOP" |
 
| rowspan="1" colspan="1" valign="TOP" |
 
1000
 
1000

Revision as of 10:30, 29 June 2008

Cover

Small Scale Production of Lime for Building (GTZ, 1985, 80 p.)

2. Project Investigation and Implementation

2.1 Schematic representation

Phase I:

conception of idea and project initiation
Socio-Economic Study

Phase II:

mineral resource investigation
site survey
market study
decision on technology and location of production site
production plan

Phase III:

economic feasibility calculation
manpower plan
financing
marketing plan
project implementation plan
project implementation

2.2 Socio-economic study

At the outset of the project, before anything else is done, a well thought out study must be executed to direct the actions that follow. The proposed project should be viewed from an economic, social and an environmental point of view. The study should collect information on, and evaluate such matters as:

- population distribution and its composition,
- local productive activities and income generation distribution,
- employment patterns and limitations, e.g. such as would apply in a subsistence agricultural environment,
- traditional building methods and building materials utilization,
- availability and general level of quality of limestone deposits in the region,
- environmental constraints (legal and otherwise),
- national and regional development plans and legal matters affecting the proposed project.

A project which is not planned and implemented with this wide perspective runs the risk of either being economically unviable or not satisfying the social and environmental needs of the region, or both. The objectives of the study are to identify the socio-economic priorities and constraints of the region and hence establish provisionally: a) the type and form of the lime products demanded and the prices that can be paid, b) a sufficiently accurate estimate of the extent of distribution and nature of the demand, i.e. qualities, where required, consistency and certainty of demand, expected changes in the market and potential for development, c) the preferred geographic location of the production site, d) the limestone deposits that could possibly by exploited, e) the type of technological level that is suitable.

It should be noted that although the nature and the extent of the study will vary in each situation, it should be kept to a minimum. Only information which is very clearly of value must be collected. Therefore, to make sure that extra and unnecessary work which, in addition to being a waste of time also costs money, is avoided, a clear statement of objectives must be prepared before commencing and adherred to as far as possible. Since the study will form a basis for project planning special note must be taken of national and regional plans and care taken not to conflict with their objectives. Most of the information will be available at the different ministries or other local institutions. Detailed studies are unlikely to be necessary.

2.3 Mineral resource investigations

To avoid the duplication of unnecessary investigative effort, all available geological surveys, mineralogical investigations, feasibility studies and other reports pertaining to the proposed project should be gathered for consideration. The following public and private organizations may have conducted studies which have been "fled forever", but which may be relevant: the Geological Survey Department, Roads and Rural Roads Dept., Building Dept., Dept. of Agriculture, Dept. of Mining, Dept. of Industries, as well as private organizations which either use lime in some form or have thought of under. taking this line of production.

Although the available documentation may be substantial, in most cases additional investigations will have to be conducted, to provide adequate information. The questions to be answered are:

1. What types of carbonates are available in the region of interest and where?
2. What qualities of carbonates are available and what is the consistency of the qualities of each deposit?
3. What quantities of acceptable, consistent quality carbonates are available?
4. What are the quarrying implications in each case?

The personnel and facilities for geological surveying and mineralogical testing of representative samples of material from the different deposits will normally be available in the local Geological Survey. If not, samples could be sent for testing outside of the country or simple field testing as described in section 4 may be sufficient.

2.4 Site surveys

The purpose of the site surveys is initially to provide sufficient information for the selection of the most suitable production site and subsequently to provide the information required for planning production. The extent of the survey will depend on the particular requirements but should provide the following information:

- physical conditions to ascertain the most favourable position from a technical and economic point of view, for the quarry and then the rest of the production site. Quarrying is the most expensive operation in the lime production process and therefore it should take priority;

- fuels available for firing the kiln;

- availability of machinery and equipment, materials for plant construction (e.g. fire bricks), spares and repairs and maintenance facilities;

- condition of transport and communication systems;

- availability of labour at the required skills levels;

- availability of water, electricity and fuels. The site surveys should follow examination of the results of the geological, mineralogical and chemical tests of the various deposits prior to selecting the production location.

2.5 Market study

The objective of the market study is to test the producible lime product in the market to determine with sufficient accuracy:

a) saleable quantities,
b) prices (at least a price range),
c) continuity of demand,
d) extent of future developments.

This research will require a thorough door to door survey of major potential buyers such as the Building Dept., Rural Roads Dept., Dept. of Agriculture and Dept. of Mines and corresponding private sector users. It is almost certain that the quality of lime that can be produced using the methods to be proposed (mixed feed method), is not adequate for metallurgical and chemical purposes.

2.6 Location of production site and decision on technological level

The socio-economic study, the geological and mineralogical investigations, the site surveys, and the market studies will enable a decision to be made on the level of technology most suited to the circumstances and also on the most suitable production site location.

The choice of technological level will be made primarily on the basis of the quantities and qualities of the lime products required and the implications of the infrastructural and service conditions as described under Site surveys (2.4). Other factors affecting the choice of technology are the skills levels of the labour available, the distribution of the market and the local development policies relating to import substitution, employment creation and energy utilization.

The production location will be selected by carefully considering the physical, infrastructural and service constraints of the various potential production locations so as to:

a) minimize the distance of the site from the market,
b) maximize the economic effectiveness of the operation.

The site survey activities, the selection of production site and the choice of the most suitable technology overlap to a considerable extent and often during the investigations a strict step by step following of the process is not only difficult but a waste of time.

2.7 Production plan

The production plan must be formulated with the following criteria in mind:

- energy saving options take priority;

-limitation of low efficiency production methods and hence wasted labour time;

- limitation of the use of plant and equipment which could cause maintenance and repair problems. It is in the nature of machinery to break down at the most inopportune moments, and breakdowns, particularly if in remote areas often bring the operations to a standstill for long periods due to the long distances involved and possibly inadequate repair facilities. In short, if machinery cannot be easily and reliably maintained and repaired it should be avoided;

- limitation of the use of plant and machinery which requires highly skilled manpower for adequate operation. Skilled manpower is often hard to recruit and then to keep in the rural areas. Projects can become over-dependent on these highly skilled people.

In general, the guiding principle throughout the production planning stage is to design the operations to be as simple and cost effective as possible and further, to avoid conditions which would endanger the long term continuity of the project.

Besides designing the technical aspects of the project the following aspects of the production plan must also be formulated:

- site and plant layouts,
- flow of materials and manpower on site, stock sizes,
- labour content,
- industrial safety measures.


Decisions to be made

Factors to consider

hydration process design

- method of slaking

- sales level and required stock levels

- product bagging or preparation for market

- quality of lime required


- form of the product (i.e. putty, powder, slurry)


- slaking time


- constraints imposed by physical conditions


- machinery and equipment available


- maintenance and other services available


- labour constraint

Kiln design

- choice of fuel and firing technique

- output to correspond with rate of slaking and stock levels of slaked lime required

- type of kiln


- size of kiln

- quality required (what variances are tolerable)

- quality control methods

- physical constraints


- types of material available for construction


- machinery and equipment available


- repair and maintenance facilities


- labour constraint


- fuels available for fining

Feed preparation

- preparation method

- rate and type of feeding method to be used


- type of carbonate to be used


- machinery and equipment available


- maintenance facilities available


- physical constraints


- labour constraints

Quarry design

- quarry plan

- physical conditions of quarry site

- quarry method

- quantities of feed required


- waste factor of feed preparation


- type of carbonate of deposit


- expected project life, alternative quarry methods and environmental considerations


- machinery available


- maintenance and repair facilities


- labour constraint

Handling and transport

- methods and equipment to be used

- physical conditions of terrain


- cost of labour, productivity levels and employment creation policy


- machinery and equipment available


- repair and maintenance facilities


- fuels available


- labour constraint

2.8 Financing

Once the feasibility calculations are completed, and a decision has been made to proceed, formal application for project funding must be made. However, it is strongly recommended that the means of financing are investigated long before reaching this stage. The possible sources of finance should be identified and approached, firstly to determine their interest to invest in the type of industrial development planned and secondly, to establish the terms and conditions.

The type of financing organizations that may be approached, depending on the specific conditions are:

- central or local government development funds,
- banks and other local financial institutions,
- international or national development agencies,
- local private institutions.

There may be a considerable period between making an application for finance and it being received. Therefore, if the continuity of proceedings is important, that is, if a break between completing the feasibility study and commencing project implementation is undesirable, application for short term "bridging" finance may have to be made. A commitment of investment from the funding organization or another form of surety may be required to obtain this loan. The financing organization will require most of the following documents depending on the size of the capital outlay, the nature of the project and the associated risk:

- market study and plan;
- production plan,
- plant and equipment schedule including specifications and prices,
- schedule of buildings and other structures,
- capital cost schedule,
- production costs, cost of sales and overhead costs schedule,
- budgeted income statements (first year and five year),
- cost-volume-profit analysis,
- project implementation programme,
- manpower plan,
- cashftow, project breakeven date and working capital requirement,
- return on investment (ROI),
- payback period,
- discounted rate of return, social cost-benefit analysis, value-added, and perhaps some others.

Lime P16.GIF
Figure

2.9 Marketing plan

The purpose of the marketing plan is to define a course of action which will minimize the sales distribution and management effort and hence cost, whilst at the same time maximizing the satisfaction of the needs of the region. It should maximize the socioeconomic benefit resulting from the undertaking, and ensure long term continuity and stability of the project.

The decisions that have to be made are:

- prices,
- areas of distribution,
- products of distribution, i.e. quantities and qualities,
- preparation of budget which indicates the amounts to be spent on advertising and promotional activities, selling, and distribution effort,
- project future developments.

2.10 Example economic feasibility calculation

The purpose of the example is to provide the project worker with an idea of the types of costs that could be incurred, calculations that may need to be carried out and a format to use to determine economic feasibility. The unit of currency has been omitted deliberately since this will vary from project to project. The figures are based on a specific case study of a small works in a "Third world" rural environment.

The example includes the calculations that are most likely to be required.

The capital cost schedule will be based on information collected in preparing the plant and equipment schedule, including their specifications and prices, and the schedule of buildings and other structures.

Capital cost schedule

plant and machinery


kiln-depreciated over 10 years

8000

loading hoist-depreciated over 5 years

1500

hydration plant -depreciated over 10 years

6000

water handpump and piping depreciated over 10 years

4000

lime putty loading mechanism depreciated over 5 years

2500

5 tonne tipper truck -depreciated over 5 years

20000

wheelbarrows, shovels, breaking hammers and buckets -replaced every 3 years

20000

safety clothing and equipment-replaced every 2 years

1000

office equipment and furnishings depreciated over 5 years

3000


47800

buildings


office, store and equipment building

12000

storage shed

150

fencing

800

-all depreciated over 25 years

14300


+ 47800


62100

add 10 % contingency

6210

Total capital cost

673310

Implementation cost


(all costs to be incurred in the 6 month implementation period are included)


quarrying and dressing cost

3600

fuel cost

900

transport cost

400

labour cost

7460

superviser salaries

1920

rents and royalties

320


14600

Total investment cost


total investment

= total capital cost + project implementation cost


= 68310 + 14600


= 82910

Calculation of depreciation cost

For the purpose of this example let us assume that the capital costs are depreciated on a straight line basis, i.e. an equal amount each year for a number of years. Also, that the items after their period of use, will have no scrap value. (This is not always the case.) The formula to use is:

Depreciation = (capital cost -scrap value)/number of years over which depreciated

Example:

Depreciation of kiln = (8000 - 0)/10= 800 per annum

The calculation is carried out for each item on the capital cost schedule and the results are added to establish the final figure.

In this example the depreciation amount is 8812 per annum.

Production cost, cost of sales and overhead costs schedule

Production costs (per month)


cost of raw materials:


- quarry and dressing cost

1200

- fuel costs

450

labour cost

1120

overhead cost:


- supervisors salary

320

- indirect materials

50

- repairs and maintenance

120

- replacement cost

80

- rents and royalties

100

- depreciation cost

740

- transport cost - administration

100

- blasting cost

200

- site administration costs (post, telephone, stationery etc.)

50

- water and electricity

30

- fuel oil

40


4600

Cost of sales (per month)


marketing cost:


-promotional work

130

-transport

150

-advertising

80

distribution cost (charged separately to buyer per load)

-


360

Overhead cost (per month)


head office staff salaries

1240

loan repayment -paid over 10 years

642

office expenses

100

rent for offices

100

transport cost -administration

50

water and electricity

15


2147

Notes:

- In the instance the production cost, cost of sales and overhead cost are calculated per month of normal production. However, it is not necessary for them to be calculated on a monthly basis. They should be calculated as is most convenient in the particular circumstances.

- These costs are calculated for purposes of preparing the annual and 5-year budget and are the result of careful compilation of information and costs for each item under each type of cost.

Budgets

Budgeted income statement - (year 1)


sales (1400 tonnes at 75 per tonne)


Less


cost of sales

4320

production cost

55200

overhead cost

25764

profit before tax

19716

less 40% tax

7886

profit after tax

11830

Note:

- The first year's budget applies for the period commencing from after the implementation period, i.e. 7th month onwards.

- 40 % tax assumed

Projected income statement (5 years)


year 1

year 2

year 3

year 4

year 5

sales forecast

1400

1470

1545

1620

1700

volumes available for sale

1400

1470

1485

1485

1485

sales price

75

82

90

100

110

sales

105000

120540

133650

148500

163350

less






cost of sales

4350

4752

5227

5750

6325

production cost

55200

60720

66792

73471

80818

overhead cost

9180

10098

11108

12219

13441

depreciation

8880

8880

8880

8880

8880

loan repayment

7704

7704

7704

7704

7704

profit before tax

19716

28286

33939

40476

46182

less 40 % tax

7886

11314

13576

16190

18473

profit after tax

11830

16972

20363

24286

27709

Notes:

- Demand for lime is estimated, from the market study, at 1400 tonnes for year 1 with an increase of 5 % per annum for the first 5 years.

- Output is planned at 1485 tonnes per year.

- The inflation rate is 10 % per annum with a corresponding increase in costs.

- Costs which do not alter from one year to the next such as in this case the loan repayment and depreciation, have been separated from the production and overhead costs.

- From the third year onwards it is estimated that the demand will exceed output. If these projections prove correct it is recommended that an extension of production be planned around the end of year 4.

Cost - volume - profit analysis

sales price (year 1)

75 per tonne

sales volume per month (year 1)

116 tonnes per month

variable cost - per month


quarrying and dressing costs

1200

fuel costs

450

labour costs

1120

royalties

60

fuel oil

40

blasting cost

200

water and electricity

30


3100

unit variable cost

3100/116 = 2672

fixed costs - per month


- supervisor's salary

320

- indirect materials

50

- repairs and maintenance

120

- replacement cost

80

- rents

20

- transport cost - production

100

- depreciation cost

740

- site administration costs

50


1480

cost of sales

360

overhead cost

2147

total fixed cost

3987

Notes:

- The objective of this analysis is to determine the volume of sales necessary to cover fixed costs. It can be considered the minimum sales target and termed the Breakeven Sales Volume.

- The criterion for separating variable costs from fixed is that variable costs vary with changes in the level of production whereas fixed costs remain the same regardless of changes in level.

Sales price

75.00

Less: unit variable cost

26.72

contribution margin

48.28 per tonne of lime sold

(Each tonne of lime contributes 48.28 towards fixed costs.)

Fixed cost

3987 per month

Breakeven sales volume:

fixed cost/contribution margin per tonne sold = 3987/48.28 = 82.58 tonnes lime per month

Return On Investment (ROI):

Return (year 1) (i.e. profit after tax, year 1)/total investment cost = 11830/82910 = 14.27%

Note:

The return to be used in the calculation is that which would be earned in a normal year, i.e. from the year commencing after the implementation period.

Payback period

year

Investment to recover
(beginning of year)

Income after tax

Investment to recover
(end of year)

1

82910

11830

71080

2

71080

16972

54108

3

54108

20363

33745

4

33745

24286

9459

5

9459

27709


Other calculations such as discounted rate of return, value-added and social cost-benefit analysis may be required, in which case specialist personnel may be consulted or the financing institution itself may be asked for assistance if the project manager is unable to calculate these figures.

Lime P21.GIF
Project Implementation Programme

2.11 Project implementation programme and resource plans

The implementation programme may be required by the financing organization but even if it is not, it is an essential management tool. It is not only used to plan the progress of the work, the use of resources and the procurement of machines, equipment and materials, but also to monitor progress during the course of implementation. The degree and form of its use can obviously best be judged by the project manager but it must be stressed that the programme's real value lies in its practical use. Particularly for this size and type of project a neat, "pretty" drawing stuck to the wall has limited value in that at best it describes past events only. It should be a sheet of paper on which notes are written, changes made and it should be figuratively, kept in the back pocket of the manager. It should serve to remind him or her about when to order materials, recruit personnel and also to clarify and concentrate his/her thoughts on the progress of the project (see example).

The progress of the work is planned by plotting the duration of each activity along the time scale of the bar-chart. The sequence and duration of these activities will be finalized after a process of shifting them backwards and forwards along the time scale, increasing or decreasing the use of labour or any other resource so as to adjust the duration of the activities or, if necessary changing the method or process used in the activities. The resource plans necessary are the manpower and cashflow plans.

a) Manpower plan - The objective of the manpower plan is to smoothen the use of manpower thus minimizing the amount of hiring and firing and the associated cost and cashflow implications, as well as to set recruitment dates allowing suitable periods for induction and training.

The "smoothing" effort should be concentrated on unskilled labour since this portion of the manpower is the least costly and easiest to transfer from one activity to another.

The procedure for manpower smoothing is as follows:

1. Assign to each activity ' the number of labourers required per week of its duration.

2. Add up the number of labourers on each activity in each week of the project.

3. Draw the manpower curve.

4. Shift the activities backward or forward in time, so as to maintain as consistent manpower numbers as possible and to incur expenses when financially convenient.

b) Cashflow -The purpose of the cashflow is to plan the flow of cash into the project, i.e. grants, loans, earnings etc., and out i.e. expenses and capital purchases in such a way that cash is always available throughout the project implementation, interest payments are minimized and interest earnings maximized. By adjusting the sequence of the activities, shifting them along the time scale and, more important, by making suitable financing arrangements, the flow of money in and out of the project can be managed to the best economic advantage and with minimum risk (see example p. 23).

2.12 Project implementation

Once the implementation programme has been completed, feasibility assured and financing secured, it must be extended into a workable plan of action. The major activities on the bar-chart, such as the construction of the kiln or the quarry preparation, should be planned individually and broken down further into tasks which can be allocated to the various project staff. In a small project the manager and possibly an assistant may carry out all the tasks. The process of breaking down the activities into tasks can in any event be recommended as this will assist in clarifying the implications and consequences of a certain course of action. Task completion dates must be set and, if other project staff are involved, the project manager must arrange matters so that he remains informed on progress. Most important and something which should be prepared at the outset of implementation, are order and delivery dates of purchases critical to the progress of the work. Similiarly, the dates of request for' and arrival of, specialized personnel, contractors and subcontractors should be established.

Lime P23.GIF
Figure

Project cashflow - Year 1

Sales commende at 40 % of full demand expected for the year in the 7th month and increase at rate of 20 % per month reaching the forecast level by the 10th month. Sales are given in tonnes. /Sales price is 75 per tonne for the 1st year commercing from the end of the 6 month implementation period. / The project is to be financed by debt (loan) and equity (own finance). A short term “bridging” loan will be arranged with the bank received in full at the beginning of the project and repaid fully at the end of the 8th month./ The loan repayment will commence 3 months after its receipt from the financial institution, i.e. from the 10th month. Interest on the loan is included in the amount repaid. / Blasting cost is incurred every 6 months. / Replacement cost estimated at 80 per month and is incurred every 4 months on average. / Fuel oil is bought in bulk every 6 months. / Capital expenses are incurred in the implementation period and normally payment will be made for a time after this period. In this example, however, it is assumed that payments are made immediately. / Cashflow for each month is calculated as follows: Previous monthÂ’s cashflow, inflow, outflow. / The working Capital Requirement is equal to the highest negative cashflow shown, i.e. the highest figure in brackets in the Cashflow line. The working capital is required at the end of the 5th month to cover all the negative cashflows of the folloing months. The amount required is 11 345 (see month 8). / The total financing required is therefore part of the capital expense and the implementation cost (52 910), and the working capital required (11 345), i.e. in total 64 255. / Paid over 10 years, the amount to be repayed annually is 6 425 - 50 with say, a payment of 1285 annually for interest on loan, totalling 7 710 - 50. The monthly loan repayment will be 642. / The bridging finance amount, bridging finance repayment, loan amount to be received in the 8th months, and loan repayment should be adjusted in the above cashflow to establish the cashflow plan which can be used to monitor the cash situation on a monthly basis.

The detailed engineering design and specifications could either be prepared by the project manager or specialized contract personnel. There are various organizations which might be of help for this activity (see Appendix).

Procurement is the work involved in bringing a piece of machinery, equipment or material to the site. It involves the following work:

- Identifying suppliers, requesting quotations and an approximate date of delivery. For major items quotations will have been received during the stage when the capital cost was being determined.

- Selecting suppliers,

- Ordering, including the arrangement of import licences and customs clearance if necessary, and transport,

- Agreeing on place and date of delivery, and handling to place plant in position ready for installation.

The project manager must arrange the contracting out of building and construction work, and plant installation. It may be necessary under certain circumstances to hire labour on contract and do the supervision personally. If this is the case it will probably be necessary to hire project administrative staff, e.g. bookkeepers and clerks, at this early stage of the project. The work involved in contracting is as follows:

- preparing tendering documents, i.e. drawings and specifications,
- putting work out to tender,
- selecting tender,
- preparing contract documents and setting starting and completion dates.

If one is managing the construction work personally, preparation must be made for this work. It is recommended that a competent supervisor be selected who will concentrate on recruitment of tradesmen and labourers, liaise with the project manager on material requirements and technical matters, and supervise the work. If this supervisor proves suitable, he can be retained as supervisor of the limeyard after implementation. This should be borne in mind when selection is carried out.

The tasks involved in site establishment and plant erection are:

- clearing of access roads,
- clearing of site in preparation for construction and erection work,
- clearing of access to quarry site and clearing ground cover at quarry'
- arranging for installation of services at production site, i.e. water, electricity, telephone and toilets,
- constructing buildings,
- installing machinery and equipment for quarry, kiln and hydration plant.

Production trials must be carried out to determine necessary adjustments; see section 5 on production trials in Botswana. Labour must be recruited and trained.

A review of economic calculations should be prepared so as to make certain of the project viability and to review possible effects of adjustments resulting from the production trials before the project goes into full production.

Lime P23.GIF
Project Cashflow -Year 1

Sales commence at 40% of full demand expected for the year in the 7th month and increase at a rate of 20% per month reaching the forecast level by the 10th month. Sales are given in tonnes. / Sales price is 75 per tonne for the 1st year commencing from the end of the 6 month implementation period. / The project is to be financed by debt (loan) and equity (own finance). A short term "bridging" loan will be arranged with the bank received in full at the beginning of the project and repaid fully at the end of the 8th month. / The loan repayment will commence 3 months after its receipt from the financial institution, i.e. from the 10th month. Interest on the loan is included in the amount repaid. / Blasting cost is incurred every 6 months. / Replacement cost estimated at 80 per month and is incurred every 4 months on average. / Fuel oil is bought in bulk every 6 months. / Capital expenses are incurred in the implementation period and normally payment will be made for a time after this period. In this example, however, it is assumed that payments are made immediately. / Cashflow for each month is calculated as follows: Previous month's cashflow, inflow, outflow. / The Working Capital Requirement is equal to the highest negative cashflow shown, i.e. the highest figure in brackets in the Cashflow line. The working capital is required at the end of the 5th month to cover all the negative cashflows of the following months. The amount required is 11 345 (see month 8). / The total financing required is therefore part of the capital expenses and the implementation cost (52 910), and the working capital required (l 1 345), i.e. in total 64 255. / Paid over 10 years, the amount to be repayed annually is 6 425 -50 with say, a payment of 1285 annually for interest on loan, totaling 7 710-50. The monthly loan repayment will be 642. / The bridging finance amount, bridging finance repayment, loam amount to be received in the 8th month, and loan repayment should be adjusted in the above cashflow to establish the cashflow plan which can be used to monitor the cash situation on a monthly basis.