CHAPTER - I

PROJECT SUMMARY

1
Name of the Company
:

2
Constitution
:

3
Director

4
Address

5
Size of Plot
:

800
sq.mts.
6
Location

7
Covered

4500
sq.ft.
8
Proposed Project to be set-up
:

Indian Sweets & Other food

products

9
Type of Industry
:

Food Processing
10
Major Raw Materials
:

Besan/Suji/Maida,SMP, Dry Fruits,

11

Power Load Required

:

20
KW
12
Employment
:

26
Persons
13
Total Cost of the Project
:

(Rs.Lakhs)

a.
Premises
:

0.00
Rented

b.

Plant & Machinery

:

26.34

c.
Misc.Fixed Assets
:

3.75

d.
Pre-liminary and Pre-

operative expenses
:

0.67

e.
Contingencies/Price

Escalation
:

0.60

f.
Margin Money for

Working Capital
:

3.14

____________________________

Total
:
Rs.
34.50
Lakhs

____________________________

14
Means of Finance

a.
Term Loan from Bank
:

22.00

b.
Share Capital +

Unsecured Loan from

}:

12.50

friends/relatives
}

____________________________

Total
:

Rs.
34.50
Lakhs

____________________________

Promoter's Share to Project Cost

36.24
Percent

Debt-Equity Ratio

1.76
:1
15
Annual Profitability (at
:

40
% efficiency)

a.
Annual Sales Revenues
:
Rs.
210.00
Lakhs

b.
Gross Profit
:
Rs.
8.82
Lakhs

c.
Percentage Profit on sales
:

4.20
%

d.
Annual Return on Investment
:

25.56
%

e.
Average Break-even-Point
:

67.81
%

CHAPTER - V

ECONOMICS OF THE PROJECT

a
BASIS
OF
PRESUMPTION
S
:

No.of Working
Days per Annum

300
:

No.of Working
Shift(s) per day

Singl
e
:

No.of Working
Hours per shift

PRODUCT(S) MIX, CAPACITY

& ITS UTILISATION:

Finished Product (s)

:

Indian Sweets & Other food

products

Annual Installed Capacity

:

300000
Kgs.

Average Selling Price

:
Rs.
175.00
per Kg.

Capacity Utilisation
:

First Year of operation

:

40
%

Second Year of operation

:

50
%

Third Year of operation

:

60
%

Fourth Year of operation

70
%

Fifth Year & onwards years

of operation
:

75
%

PREMISES

a
Plot Size
:
800
sq.mts.
b
Location
:

c
Covered
:
4500
sq.ft

The rent of the premises is :

Rs.

200000 per month

An increment @10% every year is proposed in the rent amount.

0.00

MACHINERY AND EQUIPMENT:

_________________________________________________________________________

S.No.
Description
Qty.
Rate
Amount

Nos.
(Rslac)
(Rs.Lakhs)

1
Jacketed Tank with hot water circulation
1
1.36
1.36

Capacity - 150 litres

SS Kettle (Khoa) Semi-automatic 125 ltrs.

2
1.09
2.18
3
Cooling Kettle (Khoa) cap.-125 ltrs.
2
1.09
2.18
4
Racking System, 20 trays per rack
5
0.16
0.82

Tray Size : 2.5' x 2.5' x 0.75"

5
Kaju Musti Machine, Cap.-30 Kgs.
2
0.44
0.87
6
Syrup Kettle, Tiltable, 200 ltrs.capacity

2
1.36
2.73
7
Syrup Kettle, Tiltable, 150 ltrs.capacity
3
1.20
3.60
8
Jacketed Rasogulla Boiling Kettle, 42" dia.
2
0.98
1.96
9
Grinder Dal Pitthi Making Machine
2
0.11
0.22
10
Kheema Grinder SS Motorised
1
0.11
0.11
11
Ladhoo Dana Making Jacketed Karahi, 32"
2

0.49
0.98
12
Jacketed Gulab Jamun Frying Kettler, 32"
2
0.49
0.98
13
Automatic Tray Sealer
1
1.36
1.36
14
Hydro Machine
1
0.22
0.22
15
Tray Sealers
5
0.22
1.09
16
Fitting & Commissioning

1.25
17
Pipeline & Accessories

1.00

_________________________

22.91

The cost of Installation, Erection, Commissioning

Taxes, Freight, Insurance etc.

_________________________

Total Rs.

26.34 Lakhs

_________________________

15%

3.44

MISC. FIXED ASSETS

Additionally, following misc.fixed assets are also required for the proposed project:

(Rs.Lakhs)

a.

Standby Gen Set

22

Electrification Expenses and

Electrical Equipments
:
1.00
c.
Maintenance Tools & Equipments
:
0.25
d.
Office Furniture and Equipments
:
0.50

KVA

2.00

e.
Fire Fighting & Other Safety Equipments
:
1.25
f.
Material Handling Trolleys etc.
:
0.50
g.
Misc.
:
0.25

_________________________
Total

:
Rs.
3.75 Lakhs

_________________________

TOTAL COST OF THE PROJECT

:

(Rs.Lakhs)

a.
Premises
:
0.00
Rented
b.
Plant & Machinery
:
26.34

c.
Misc.Fixed Assets
:
3.75

d.

Pre-liminary and Pre-

operative expenses
:
0.67

Contingencies/Price

Escalation @2%(b+c)
:

0.60
f.
Margin Money for

Working Capital
:

3.14

____________________________

Total
:
Rs.
34.50 Lakhs

____________________________

MEANS OF FINANCE
:

It is proposed to finance the project as under:

(Rs.Lakhs)

a.

Term Loan from Bank

:
22.00
b.
Share Capital +

Unsecured Loan from

}:
12.50

friends/relatives
}

____________________________

Total :

Rs.

34.50 Lakhs

____________________________

Promoter's Share to Project Cost

36.24
Percent

Debt-Equity Ratio
1.76
:1

TERM LOAN

Rs. Lakhs

_________________________________________________________________________

S.No. Description

Value

Term Loan

_________________________________________________________________________

1).

Premises

2).

Machinery & Equipment

26.34 75 % 19.76

3).

Misc.Fixed Assets

75 % 2.81

Rented

3.75

4).
Contingencies/Price
0.60
75 %
0.45

Escalation

_________________________________________________________________________

Term Loan Eligibility26.34 Rs.

23.02 Lakhs

_________________________________________________________________________

Term Loan to be applied for

Rs.

22.00 Lakhs

TERM LOAN, ITS REPAYMENT AND INTEREST SCHEDULE

Term Loan
:
Rs.
22.00
Lakhs
Repayment Period

4
Years
Moratorium Period

12
Months
Annual Interest Rate

12.25
%

_________________________________________________________________________

Year/Month

Opening Installment Closing Interest Balance Balance

_________________________________________________________________________

Ist Year
1
2200000
0
2200000
22458

2
2200000
0
2200000
22458

3
2200000
0
2200000
22458

4
2200000
0

2200000
22458

5
2200000
0
2200000
22458

6
2200000
0
2200000
22458

7
2200000
0
2200000
22458

8
2200000
0
2200000
22458

9
2200000
0
2200000
22458

10
2200000
0
2200000
22458

11
2200000
0
2200000
22458

12
2200000
0
2200000
22458

269500
2nd Year
1
2200000
45833
2154167
22224

2
2154167
45833
2108333
21757

3
2108333
45833
2062500
21289

4
2062500
45833

2016667
20821

5
2016667
45833
1970833
20353

6
1970833
45833
1925000
19885

7
1925000
45833
1879167
19417

8
1879167
45833
1833333
18949

9
1833333
45833
1787500
18481

10
1787500
45833
1741667
18013

11
1741667
45833
1695833
17546

12
1695833
45833
1650000
17078

550000

235813

_________________________________________________________________________

TERM LOAN, ITS REPAYMENT AND INTEREST SCHEDULE (Contd.)

_________________________________________________________________________

Year/Month

Opening Installment Closing Interest Balance Balance

_________________________________________________________________________

3rd Year
1
1650000
45833
1604167
16610

2
1604167
45833
1558333
16142

3
1558333
45833
1512500
15674

4
1512500
45833
1466667
15206

5
1466667
45833
1420833
14738

6
1420833
45833
1375000
14270

7
1375000
45833
1329167
13803

1329167
45833
1283333
13335

9
1283333
45833
1237500
12867

10
1237500
45833
1191667
12399

11
1191667
45833
1145833
11931

12
1145833
45833

1100000
11463

550000

168438
4th Year
1
1100000
45833
1054167
10995

2
1054167
45833
1008333
10527

3
1008333
45833
962500
10059

4
962500
45833
916667
9592

5
916667
45833
870833
9124

6
870833
45833
825000
8656

7
825000
45833
779167
8188

779167
45833
733333
7720

9
733333
45833
687500
7252

10
687500
45833
641667
6784

11
641667
45833
595833
6316

12
595833
45833

550000
5849

550000

101063

_________________________________________________________________________

TERM LOAN, ITS REPAYMENT AND INTEREST SCHEDULE (Contd.)

_________________________________________________________________________

Year/Month

Opening Installment Closing Interest Balance Balance

_________________________________________________________________________

5th Year
1
550000
45833
504167
5381

2
504167
45833
458333
4913

3
458333
45833
412500

4445

4
412500
45833
366667
3977

5
366667
45833
320833
3509

6
320833
45833
275000
3041

7
275000
45833
229167
2573

8
229167
45833
183333
2105

9
183333
45833
137500
1638

10
137500
45833
91667
1170

11
91667
45833
45833
702

12
45833

45833
0
234

550000

33688

j
WORKING CAPITAL REQUIREMENTS

1st Year :
40
Percent Capacity Utilisation

a.
Raw Materials in stock

7
days
Rs.
3.19
Lakhs

b.
Work in progress

1
days
Rs.
0.51
Lakhs

c.
Finished Goods in Stock

2
days
Rs.
1.25
Lakhs

d.
Accounts Receivables

7
days
Rs.
4.90
Lakhs

e.

Misc.Expenses

30
days
Rs.
2.69
Lakhs

Total

Rs.
12.54
Lakhs

Working Capital Required

Rs.
12.54
Lakhs

Bank Finance
75%
Rs.
9.41
Lakhs
Margin Money

Rs.
3.14
Lakhs

STAFF & LABOUR REQUIREMENTS AND ANNUAL SALARIES/WAGES BILL

S.No.
Designation
Nos.
Rate p.m.
Amount

(Rs.)
(Rs.Lakhs)

Office Staff

1
Accounant/Cashier
2
12000
2.88

2
Sales & Marketing
2
15000

3.60

3
Peon/Watchman
2
7500
1.80
8.28

___________________________

Supervisory

1
Manager
1
25000
3.00

2
Supervisor
1
15000
1.80
4.80

Workers

1
Skilled Workers
3
10000
3.60

2
Semi-skilled Workers
9
8500

9.18

3
Unskilled Labour
6
7500
5.40
18.18

___________________________

18

31.26

25% benefits

7.82

___________________________

26
Rs.
39.08
Lakhs

___________________________

ANNUAL COST OF RAW MATERIALS, CONSUMABLES

& PACKAGING MATERIALS (at 100% efficiency)

Following Raw Materials, Consumables & Packaging materials are required for the proposed
project:

_________________________________________________________________________

S.No. Description

_________________________________________________________________________

SMP (Skimmed Milk Powder)

Sugar

Sooji

Maida

Besan

Pista

Kaju

Ellaichi

Vanaspati

Desi Ghee

Modified Starch

Silver Work

Chemicals

Misc.Consumables

Packing Materials

Box, Polythene, Master Carton, Tape etc.

Cost of raw materials, consumables and packing materials

is assumed at 65.00 % of annual sales revenues.

_________________________________________________________________________

Total Rs.

341.25 Lakhs

_________________________________________________________________________

Year-wise cost of Raw Materials, Consumables & Packing Materials:

1st Yr. 2nd Yr. 3rd Yr.

4th Yr. 5th Yr.

136.50 170.63 204.75 238.88 255.94

Rs.Lakhs

ANNUAL COST OF UTILITIES (POWER & WATER)

(at 100% efficiency)

a.
Power

Total Load

20
KW

Consumption

Load x 8 x 300 x 0.75

Hrs.x DaysxPower

Factor

Source:

36000
KWH

Govt.
75%
27000
KWH

Rate
Rs.
6.00
KWH
1.62
Lakhs

Generator
25%
9000
KWH

Rate
Rs.
10.00
KWH
0.90
Lakhs

Total Power Bill

Rs.
2.52
Lakhs

b.
Water

Water
600
KL

@ Rs.
15.00 per KL

Rs.
0.09

Lakh

Total Power & Water Bill

Rs.

2.61

Lakhs

DEPRECIATION CHART

Machinery & Equipment

:
Rs.
26.34
Lakhs
Misc.Fixed Assets
:
Rs.
3.75
Lakhs

_________________________________________________________________________

S.No. Description

1st Yr. 2nd Yr. 3rd Yr.

4th Yr. 5th Yr.

_________________________________________________________________________

Machinery & Equipment

26.34
22.39
19.03
16.18
13.75
Depreciation rate
15%
3.95
3.36
2.85
2.43
2.06

22.39
19.03
16.18
13.75
11.69
Misc.Fixed Assets

3.75
3.19
2.71
2.30
1.96
Depreciation rate
15%
0.56
0.48
0.41
0.35
0.29

3.19
2.71
2.30
1.96
1.66
_________________________________________________________________________

Total Depreciation

4.51
3.84
3.26

2.77
2.36

_________________________________________________________________________

REPAIRS & MAINTENANCE

_________________________________________________________________________

S.No.
Description
1st Yr.
2nd Yr. 3rd Yr.
4th Yr.
5th Yr.
_________________________________________________________________________

Machinery & Equipment

26.34
22.39
19.03
16.18

13.75
Repairs/Maintenance

Rate (%)
0.50
1.00
1.50
2.00
2.50
Amount (Rs.Lakh)
0.13
0.22
0.29
0.32
0.34
Misc.Fixed Assets
3.75
3.19
2.71
2.30
1.96
Repairs/Maintenance

Rate (%)
0.50
1.00
1.50
2.00
2.50
Amount (Rs.Lakh)
0.02
0.03
0.04
0.05
0.05
_________________________________________________________________________

Total
0.15
0.26
0.33
0.37
0.39

_________________________________________________________________________

INSURANCE

The fixed assets of the project will be insured for all types of risks. Annual insurance Charges payable
shall be as under:-

_________________________________________________________________________

S.No. Description

1st Yr. 2nd Yr. 3rd Yr.

4th Yr. 5th Yr.

_________________________________________________________________________

Machinery & Equipment

26.34
22.39
19.03
16.18
13.75

Misc.Fixed Assets
3.75
3.19
2.71
2.30

1.96

Total
30.09
25.58
21.74
18.48
15.71

Insurance Charges:

Rate (%)
1.00

1.50
2.00
2.50
3.00

Amount (Rs.Lakh)

0.30

0.38
0.43
0.46
0.47
q
SALES EXPENSES

Sales Expenses include brokerage, commission, discounts etc.

These are assumed at

2.00
percent of sales revenues

Rs.Lakhs

Year
1st Yr.

2nd Yr.
3rd Yr.
4th Yr.
5th Yr.

Sales
210.00
262.50
315.00
367.50
393.75

Selling Exps.
4.20
5.25
6.30
7.35
7.88

PROJECTIONS OF PERFORMANCE AND PROFITABILITY STATEMENT

(Rs.Lakhs)

1st
2nd
3rd
4th
5th

Year
Year
Year
Year
Year
Capacity Utilisation (%)
40

50
60
70
75
A. Annual Sales Revenues

Value
Rs.Lakh
210.00
262.50
315.00
367.50
393.75
B. Cost of Sales

a. Raw Materials,Consum-

ables & Packing Materials

136.50
170.63
204.75
238.88
255.94
b. Rent (Premises's)

24.00
26.40
29.04
31.94
35.14
b. Power/Water

1.04
1.31
1.57
1.83
1.96
c. Salaries & Wages*

Salaries

16.35
17.99
19.78
21.76
23.94
Wages

9.09
12.50
15.00
17.50
18.75
d. Repairs & Maintenance
0.15
0.26
0.33
0.37
0.39
e. Insurance

0.30
0.38
0.43
0.46
0.47
f. Depreciation

4.51
3.84
3.26
2.77
2.36

191.95
233.29
274.16
315.51
338.94

Cost of Sales
191.95
233.29
274.16
315.51
338.94

* 10% increase every year

PROJECTIONS OF PERFORMANCE AND PROFITABILITY STATEMENT

(Contd.)

(Rs.Lakhs)

1st
2nd
3rd
4th
5th

Year
Year
Year
Year
Year

Capacity Utilisation (%)

40
50
60
70
75
C. Gross Profit

18.05
29.21
40.84
51.99
54.81
Selling Expenses

4.20
5.25
6.30
7.35
7.88
Overheads@

1.05
1.31
1.58

1.84
1.97
Preliminary & Pre-operative

Expenses w/off

0.13
0.13
0.13
0.13
0.13
Financial Expenses:

a. Interest on term loan

2.70

2.36
1.68
1.01
0.34
b. Interest on Working Capital Loan

1.15
0.00
0.00
0.00
0.00
D. Profit (before taxes)

8.82
20.15
31.15
41.66
44.49
E. Provision for Taxes
30.90%
2.73
6.23
9.62
12.87
13.75
F. Profit (after taxes)

6.09
13.93
21.52
28.79
30.75
Depreciation, added back

4.51
3.84
3.26
2.77
2.36
G. Cash Accruals

10.61
17.76
24.78
31.56
33.10

@ Telephone Bills, Postage/Courier Exps., Travelling/Conveyance,

Bank Charges/Commissions, Publicity etc. considered at

0.50
percent of sales revenues.

0.00
5.50
5.50
5.50
5.50
0.00
5.50
5.50
5.50
5.50

3.23
4.51
5.74
6.02

s
BREAK-EVEN-EFFICIENCY ANALYSIS

(Rs.Lakhs)

1st
2nd
3rd
4th
5th

Year
Year
Year

Year
Year

Capacity Utilisation (%)

40
50
60
70
75

A. Sales
210.00
262.50
315.00
367.50
393.75

B. Variable Costs

a. Raw Materials,Consum-

ables & Packing Materials

136.50
170.63
204.75
238.88
255.94

c. Power/Water
1.04
1.31
1.57
1.83
1.96

d. Wages
9.09
12.50
15.00
17.50
18.75

e. Intt.on working capital loan

1.15
0.00
0.00
0.00
0.00

f. Sales Expenses
4.20
5.25
6.30
7.35
7.88

Total
151.99
189.68
227.61
265.55
284.52

C. Fixed Costs

Rent (Premises's)
24.00
26.40
29.04
31.94
35.14

a. Salaries
16.35
17.99
19.78
21.76
23.94

b. Admn. Overheads
1.05
1.31
1.58
1.84
1.97

c. Repairs & Maintenance

0.15
0.26

0.33
0.37
0.39

d. Insurance
0.30
0.38
0.43
0.46
0.47

e. Interest on term loan

2.70
2.36
1.68
1.01
0.34

f. Depreciation
4.51
3.84
3.26
2.77
2.36

Total

49.06
52.53
56.10
60.16
64.60

D. Contribution
58.01
72.82
87.39
101.95
109.23

E. Break-even-efficiency(%)
84.57
72.14
64.20
59.01
59.14

Average Break-even-efficiency

67.81

CONTENTS

_________________________________________________________________________

S.NO. DESCRIPTION

_________________________________________________________________________

Project Summary

Introduction

About the Promoter

Process Flow Chart

Economics of the Project covering:

Basis & Presumptions

Capacity & its utilisation

Land

Building & Structures

Plant, Machinery & Equipments f Misc.Fixed Assets

Total Cost of the Project

Means of Finance

Term Loan

Term Loans' repayment & interest schedule

k Working Capital & Margin Money Calculations l Staff & Labour

Raw Materials & Consumables

Power/Water

Depreciation

Repairs & Maintenance

Insurance

Sales Expenses

Projections of Performance & Profitabilitiy Analysis

Break-even-point Analysis