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A REPORT ON

PROJECT FINANCE SERVICES FOR HEALTH


CARE INDUSTRIES

BY

SARTHAK RAYCHOUDHURY
18BSP1056

AT
ASTHA CONSULTANTS
A REPORT ON
“PROJECT FINANCE SERVICES FOR HEALTH CARE INDUSTRIES
(ON BEHALF OF ASTHA CONSULTANTS)”

Dissertation Submitted to the ICFAI Business School

Mumbai, Maharashtra

In partial fulfilment of the requirement for the certificate of

Post-Graduation Program in Management

Submitted by:

Sarthak Raychoudhury

Enrollment No. 18BSP1056

Prof. Dr. Vipin Khurana CA Ashish Jain


(Faculty Guide) (Company Guide)
Authorisation

I, sarthak Raychoudhury hereby declare that the project entitled “PROJECT FINANCE
SERVICES FOR HEALTH CARE INDUSTRIES” submitted to the college IBS Mumbai,
is a record of a bona fide work done by me under the guidance of Mr CA Ashish Jain,
Company Guide, Astha Consultants. I agree in principle not to share any vital
information with any person outside the organization.

Date: 29th May 2019 Place: Mumbai


Acknowledgement

I would like to take this opportunity to extend my gratitude to Astha Consultants for offering
me a powerful stage to earn experience and exposure in the field of Finance. I would also
like to express my sincere emotions to all who have helped me in this course and will
continue to do so in the future for the project titled “Project finance service for health care
industries”

I wish to extend my sincere and heartfelt gratitude to my company guide Mr. CA Ashish Jain
who guided, supported and encouraged me during the entire tenure of the project. I am able
to say with conviction that I have immensely benefited from auspicious and prestigious
association as a summer intern with Astha Consultants. I also thank Prof. Dr. Vipin Khurana,
my faculty guide, who inspired me by his discussions and showed me the right course to
pursue.

I also wish to thank all people in the Head Office for their constant support and help in
accomplishing the objectives of the project. There are many who I may have left out in the
acknowledgement, but whose co-operation no doubt went a long way in the project
completion.

Sarthak Raychoudhury
18BSP1056
1) Company Background:

Astha Consultants, a leading financial consultancy firm offering valuable financing


solutions and advisory services to its corporate and institutional clients since 1982. With a
successful track in evaluating value maximization strategies and implementing them to
client’s advantage, They have carved a niche for ourselves in the finance sector.

They have extensive practical experience of the financial, commercial and legal issues
driving various projects. We believe in providing the best quality services to our valuable
clients & often customize our solution depending on the needs & requirements of our clients.

Companies aim is to provide a team of professionals having experience across corporate


finance like project finance, working capital finance, debt syndication, Private Equity,
Strategic Investments, partnerships, business consultancy & taxation to take care of
diversified needs of today’s corporate sector. The core team also has extensive experience
in sourcing capital for new project, capacity expansion, corporate restructuring and
insolvency turn-around through refinancing, recapitalizations, debt renegotiations and
merger & acquisition transactions. They have successful track record and established
position as the premier capital services firm having vast experience in steel sector. They
deal with Public Financial Institutions such as RIICO, RFC, REC, PFC & other FL’s such as
lDBI, IClCI& SIDBI as well as Other Nationalized & Private sector banks.

Astha Consultant’s not only serve client by own team but they have networking with various
financial consultancy/chartered accountants firms in order to arrange funds at most
reasonable source for any amount of project. The firm also provides its services in matters
relating to registration of Companies, obtaining export-import license & matters related to
formation of Capital, Taxation, Internal Audit Work, Sales Tax & Incentive Work etc. Sale &
Purchase of Industrial Sick units, Procurement of Industrial Plots and all the Work related to
development of industries in Rajasthan, Haryana, UP, Uttranchal and other states near to
Delhi.

Service Line

Project Financing Projects Related Company Law


Tax compliance &
& Financing Approvals & compliance &
Advisory
Advisory Services Regestrations Advisory
2) Healthcare Industry Background :

Introductions:

Healthcare has become one of India’s largest sectors - both in terms of revenue and
employment. Healthcare comprises hospitals, medical devices, clinical trials, outsourcing,
telemedicine, medical tourism, health insurance and medical equipment. The Indian
healthcare sector is growing at a brisk pace due to its strengthening coverage, services and
increasing expenditure by public as well private players.

Indian healthcare delivery system is categorised into two major components - public and
private. The Government, i.e. public healthcare system comprises limited secondary and
tertiary care institutions in key cities and focuses on providing basic healthcare facilities in the
form of primary healthcare centres (PHCs) in rural areas. The private sector provides majority
of secondary, tertiary and quaternary care institutions with a major concentration in metros,
tier I and tier II cities.

Market Size:

The healthcare market can increase three fold to Rs 8.6 trillion (US$ 133.44 billion) by 2022.
India is experiencing 22-25 per cent growth in medical tourism

There is a significant scope for enhancing healthcare services considering that healthcare
spending as a percentage of Gross Domestic Product (GDP) is rising. The government’s
expenditure on the health sector has grown to 1.4 per cent in FY18E from 1.2 per cent in
FY14. The Government of India is planning to increase public health spending to 2.5 per cent
of the country's GDP by 2025.

• Health care market in India is expected to reach US$372 billion


Strong
Demand
by 2022 , driven by rising income ,greater health awarness

• The hospital industry in India is expected to growth CAGR of 16


Attractive
Oppurtinutie to 17 % to reach Rs 8.6 trillion (US$ 132.84 billion) by 2022
s

• The number of doctors increased to 841,104 in 2017 from


Rising
Manpower
827,006 in 2010.

• The world's largest government funded health care


Policy
Support
scheme,Ayushman Bharat was launched on september 23, 2018.
3) Introduction

PROJECT FINANCE:

Project finance is the financing of long-term infrastructure and industrial projects based upon
a complex financial structure where project debt and equity are used to finance the project.
The debt is repaid using the cash flow generated by operation of the project, rather than the
general assets or creditworthiness of the project sponsors. Because of this structure, the debt
is said to be "nonrecourse" to the project sponsors.

Generally, a special purpose entity is created for each project, thereby shielding other assets
owned by a project sponsor from the detrimental effects of a project failure. As a special
purpose entity, the project company has no assets other than the project. Capital contribution
commitments by the owners of the project company are sometimes necessary to ensure that
the project is financially sound.
Project finance is often more complicated, and more expensive, than alternative financing
methods. It is most commonly used in the mining, transportation, telecommunication and
public utility industries.

Risk identification and allocation is a key component of project finance. A project may be
subject to a number of technical, environmental, economic and political risks, particularly in
developing countries and emerging markets.

The financing of these projects must also be distributed among multiple parties, so as to
distribute the risk associated with the project while simultaneously ensuring profits for each
party involved. Usually, a project financing scheme involves a number of equity investors,
known as sponsors, as well as a syndicate of banks which provide loans to the operation.
The loans are most commonly non-recourse loans, which are secured by the project itself
and paid entirely from its cash flow. A riskier or more expensive project may require limited
recourse financing secured by a surety from sponsors.
3.1)Process flow followed for PROJECT FINANCE:
a) Procurement of clients:

Procurement of clients is the first step of the project financing which involving in
identifying the potential customers or borrowers, who are interested in getting loans to
set a projects or to carry its existing business operations.

b) Appraisal & Sanctioning:

Appraisal & sanctioning is the second steps of project financing where the whole
project financing process undergo a review and analyzing the process with
consultancy and make the final deal approved and help in the process of
sanctioning the loan from the respective banks.

c) Legal Documentations :

Legal Documentations is the third stage of project financing techniques where the
whole process of appraisal and sanctioning of the loan approval process take
place under legal documentation to maintaining a proper law and compliance of
the whole process of the consultancy firm.

d) Disbursement :

Disbursement of the final loan amount from bank to the borrower is the final stage
of project financing process, disbursement process (partly) take place generally
by the financial institutions by analyzing the actual progress of the project that has
been undertaken by the promoters.

Procurement
of clients

Disbursement
PROJECT Appraisal &
FINANCE Sanctioning

Legal
Documentations
3.2) Advantages & Disadvantages of PROJECT FINANCE:

Advantages:

1) Allows the promoters to undertake projects without exhausting their


ability to borrow amount for traditional projects:
- Project finance technique always help borrowers to take fund
from different financial institutions to mobilize the process of
funding.
2) Enables raising more debts as lenders are sure that cash flows from the
project will not be drain off for other corporate uses:
- As the amount generated in the project undertaking will be stay
back at the project itself and not be use for any other corporate
use as the repayment of loan is fully depend on the viability of
the project.

3) Facilitates the projects to undergo careful technical and economic


review:
- Project financing methods always follow a systematic and
impressive way to finance both Short –term & Long –Term
project undertaking in an economic manner by channelize the
whole finance appraisal process.
4) Eliminates the dependency on alternative nature of funding a project:
- Promoters always feel safe when they follow the approach of
project finance methodology. So promoters don’t depend on
any other source of external finance.
5) Enables to have prolonged credit opportunities:
- Credit facilities always play an important role in set up a new
business or to carry forward the existing business to expand,
so it will be easy for the promoters to repay the loan amount by
utilizing the full credit limit.
6) Project finance help to distinguish a project structure as an separate
entity, apart from the sponsors:
- For an single production plant it is important to assess the
accounting and financial terms separately from the sponsors.
Generally cost involved is high because of time and
transactional cost involve in structuring the capital equipment
that need long term financing.
Disadvantages:

1) Complexity of the process due to the increase in the number of parties


and the transaction cost:
- Project finance process is considered to be a complex one as
it involves huge amount of transaction cost along with large
number of parties involved along with financial institutions and
promoters.
2) Expensive as the project development and diligence process is a costly
affair:
- Project finance process is generally considered to be an
expensive as it involves a long process of approaching
financial consultants for loan along with following all the
process to get the loan amount for disbursement from bank or
NBFC’S by following a rigour process of approval.
3) Litigious with regard to negotiations:
- Legal documentation form a very important stepping in the
Project financing process, as it consider to be one of the most
compliance factor for getting the loan amount approved.
Sometimes legal documentations may bridge a gap between
financial institutions and Project Promoters.
4) Complexity due to lengthy documentation:
- It is typically considered to be one of the most rigorous process
of getting the whole process done as it follows the lengthy
documentations of each and every steps of financing
5) Requires broad risk analysis and evaluation to be performed:
- Project finance process always requires a broad risk analysis
factor to be in a process flow of evaluating the project viability
to repay back the debt with in stipulated period of time to
financial institutions and consultants.
6) Requires qualified people for performing the complicated procedures of
project finance:
- One of the most important part of Project finance is to prepare
a Detail Project Report (DPR) which form an important part of
financials projections to understand the capability of the
promoters for the loan process.
4) Concept of TERM LOAN (TL) and CASH CREDIT (CC) :

Term Loan:

Term loan is a long term secured debt extended or provided by banks or


financial institutions along with financial consultants to the corporate sector for
carrying out their long-term projects maturing between 5 to 15 Years which is
normally repaid in monthly or quarterly equal installment. They are an external
source of finance paid in installments governed by loan agreement and legal
agreements.

All the capital requirements of the organizations cannot be fulfilled by the


promoters or equity share issues and that is where the term loans come into the
picture. Term loan or project finance is a long-term source of finance for a
company normally extended by financial institutions or banks for a period of
more than 5 years to a maximum of around 15 years. One common and
interesting feature of term loan is to substitute equity by term loan which is a
long term sources of finance for the promoters as well as the organizations.

Generally term loan is most suitable for heavy types of industries which is not
possible for the promoters to contribute the huge amount of funding for initial
setting up of business. Big projects cannot be concluded in a year or two so to
get maximum return from the business the long term perspective is required.so
such big venture are normally financed by banks, financial institutions and
financial consultants. Suppose if the investment is too large then several banks
come together for the purpose of financing , such type of term loan funding is
also called as CONSORTIUM LOAN.

FINANCIAL LEVERAGE AND TERM LOAN:

One of the important factor of the promoter for choosing the long term financing
i.e. term loan is to maintain the FINANCIAL LEVERAGE of the organizations, by
not taking any amount from its existing equity shareholders which in turns help
in proper wealth maximization of the organizations by maintaining a control over
equity shareholders.

4.1) FEATURES OF A TERM LOAN:

I. Loan in any currency:


- Term loan can be provided both in terms of foreign currency.
Home currency are offered for a purchase of fixed assets such
as land & building , plant & machinery , along with preliminary
and pre-operative expenses which can be term as WORKING
CAPITAL. On the other hand foreign currency loan are offered
by import of certain plant & machinery, payment of foreign
consulting fee.

II. Secured Loan:


- Generally term loan comes under secured category of loan.
Two kinds of securities are there – primary and collateral.
Primary security is the asset which is purchased using the loan
amount and collateral is the charges on other assets of the
borrower.
III. Loan Instalments:
- Repayment of loan is done by installments, these installments
basically cover both principal and interest, normally amount of
loan installments are decided by banks based on borrower’s
cash flow capacity in business. Generally installments are paid
in monthly, quarterly, bio-annually or even annually.
Installment amount are normally equal but may be structured
based on borrower’s business because of this Moratorium or
grace period is also given by bank in which low installment or
very low installment is asked from the borrower.

IV. Maturity:
- Normally a term loan is ranging between 5 to 15 years.
Forecasting for more than 15 years in the current changing
business scenario is very hard to find.
V. Loan Agreement:
- An agreement is drafted by following the legal compliances
between the borrower and the bank regarding the terms and
conditions of the loans which are signed by the borrower and is
preserved with a bank.
VI. Loan Covenant:
- Debt covenant is a part of loan agreement , which follows
certain do’s and don’ts for the company, they are normally
related to use of assets , creation of liabilities , cash flow and
control of management.
4.2) CASH CREDIT:

Cash credit is a short-term source of financing for a company for working capital
requirement, or we can say a cash credit is the short term loan extended to a
company by bank. Company can withdraw money from bank account without
keeping a credit balance. The account is limited to only one borrower to a
particular borrowing limit and the interest is charged on the amount borrowed
and not the borrowing limit.

Important Features of Cash Credit:

A. Borrowing Limit :
- A cash credit comes with a borrowing limit determined by the
credit worthiness of the borrower. A company can withdraw
funds up to its established borrowing limit to initiate the
process fund arrangements.
B. Interest on running balance:
- In comparison with other traditional debt financing methods
such as loans, the interest charged is only on the running
balance of the cash credit account and not on the total
borrowing limit of the promoter.
C. Minimum commitment charge :
- The short term cash credit comes with minimum charge for
establishing loan account nevertheless of weather the
borrower utilizes the available credit.
D. Collateral security:
- Cash credit is often secured using stocks, fixed assets, or
property as collateral , it also form an important part in
consideration for bank securities.
E. Credit period:
- Cash credit is given for the maximum of 12 months after which
the drawing power is re-evaluated by bank or financial
institutions.

Advantages of CASH CREDIT:

a) Sources of working capital finance :


- A cash credit is a sources of working capital finance as
company need not worry about the liquidity issue of the
organizations.

b) Easy arrangement:
- Arrangement of cash credit is quite easy from bank or financial
institutions by providing collateral security is available to be
pledged and realizable value can be easily determined.
c) Flexibility:
- Borrowers can withdraw from a cash credit account for many
times, up to the borrowing limit, and deposits of excess cash
into the account which lowers the burden of interest that a
company faces.
d) Tax-deductible:
- Interest payments made are tax-deductible and, thus help in
reducing the overall tax burden on the company.
e) Interest charged:
- A cash credit reduces the financing cost of the borrower as the
interest charged is only on the utilized amount or minimum
commitment charge.

Disadvantages of Cash Credit:

f) High rate of interest:


- The interest rate charged by a loan on cash credit is very high
as compared to traditional loans.
g) Minimum commitment charges:
- A minimum commitment charge is imposed on the borrower
regardless of whether the company utilizes its cash credit or
not for the business purpose.
h) Difficulty in securing:
- The short-term loan is extended to the borrower depending on
the borrower’s turnover, accounts receivable balance,
expected performance, and collateral security offered.
Therefore, it can be difficult for new companies to obtain.
i) Temporary source of finance:
- Cash Credit loan is a short-term source of financing. A
company cannot rely on it for an extended period of time. After
the expiration of a cash credit loan, it must be renewed under
new terms and conditions.
Now we are discussing about the two initial process flow of PROJECT
FINANCE:
- Procurement of clients
- Appraisal and Sanctioning

5) Procurement of client:
Procurement of client played an very important role for the financial consultants
firm to provide all kinds of Financial Service along with Project Finance. so one
of the best way to procure healthy client is to build a proper marketing plan and
provide a strong assurance of delivering the work on right time with accuracy.
Now in the process of procurement Astha Consultants received a client
acquisition of JACKSON Care Product(Health Care Industries) for theTerm
Loan of Rs 150 Lakhs along with a project cost of Rs 210 Lakhs. The project
was related to Expansion of a manufacturing unit for Sanitary Napkin.

JACKSON Care Products:

• Company Background:

JACKSON Care Products has been incorporated on 1997, at Rishi Galav


Nagar, Jaipur, Rajasthan. They are into manufacturing and trading of wide
gamut of products primarily catering to the varied needs of medical sector. The
list of offered products is huge and includes Medical Disposable Apron, Baby
Diaper ,HIV Kit , adult diaper , baby care kit , bedsheet, bio hazard bag, cap
surgeon, care leak guard ( sanitary napkin), care surgical gloves , cleaning
cloth, disposable delivery kit, disposable gown, elegant blade, face mask ,hot
water bottle , knee cap, mackintosh roll, mediline cord clam, veterinary gloves,
surgical blades, shoe caps, mask and cap box, packing polybag,O-T dress,
digital thermometer, crepe bandage, hospital dress and many more products.

Mr. Sunil Ramchandani, holds the important position of Manager in our


organization and he is performing his duties with great perfection. He is a highly
qualified individual who understands his position and works in the best interest
of the firm. Owing to his efforts Jackson Care Product is able to maintain its
legacy of offering quality approved range.

• About The Project:

With a view to capitalize on the long experience of the promoter in the field of
manufacturing of sanitary napkins. The proposed project is set up with an
objective of expansion and tapping the market of women in the state of
Rajasthan and all over INDIA. JACKSON is capable of offering durable and

effective range has found huge support from world class infrastructure which
spreads through a vast area. Since, inception JACKSON has witnessed many
changes and has grown into manifold times. The manufacturing unit is well
facilitated with all tools and equipment which are essential for carrying out
manufacturing work with great pace. JACKSON provide disposable medical
products .The firm proposes to establish another manufacturing unit in relation
to the existing unit keeping in mind to increase more productivity in near future ,
which directly help JACKSON to achieve growth. This project cost is Rs. 210
lacs (which includes 150 lacs- term loan and 60 lacs- promoters’
contribution).

Now the main role assigned to me by Astha Consultants was to study and
analyze the project viability and project feasibility for the purpose of Loan
Approval through SIDBI (Small Industries Development Bank of India).
So to start my analysis I need to follow certain approach for the same:

1. DOCUMENT CHECK LIST PROVIDED BY JACKSON Care Products


TO ASTHA CONSULTANTS FOR THE PURPOSE OF ANALYSIS:

About the concern:

• Last three years audited balance sheet and Income tax returns of the
concern.
• Provisional Balance Sheet as on date.

• Audited Balance sheet of sister concerns belonging to the promoters and company for last
3 years.
• Brief profile about existing business activities.

About the Directors/Promoters:

• Promoters Bio-Data (which includes their qualification, experience of


work, etc.)
• Two Photographs, PAN card copies of each director/promoter of the
company.
• Income tax returns of all the directors/partners for last 3 years.
• Net worth statement of the all the directors/promoters.
• Photocopies of all the documents of immovable assets shown in Net
worth Statement.
• Promoters experience in Health care industry or any marketing/ brand tie
up.
• Banker’s name & address of the promoters

About the Project :.

• Photocopy of all papers of Land along with site plan e.g. Land Allotment
letter, Lease deed, Sale deed, Conversion letter etc.
• Approved Map of Manufacturing unit to be constructed.
• RSPCB Consent to Establish/CGWA permission.
• Other necessary approvals and clearances for a manufacturing industry
if any obtained.
• Architect’s Bio-data/profile.
• Quotations of Misc. fixed assets (such as, PLANT & EQUIPMENT,
Sanitary Napkin Machine, Sanitary Pad packing Machine, Air
Compressor, Stacker etc.) required for the project.
• Details of services to be provided, brief description, Rate per unit etc.
• Cost sheet of all the services to be provided, which includes all the
variable components i.e. raw materials, consumables, labour, electrical
charges etc.
• Implementation Schedule for the proposed project.
• Market potential and locational advantage.
• Any other information helpful in the making of project report.
• Land Valuation papers.
• Land Title search documents.

6) Appraisal and Sanctioning:

Now the process of appraisal and sanctioning commence after analyzing the
feasibility of the project of repay back of Term Loan (TL) installments, where a
full project have to undergo a strict supervision of whole project financing &
Appraisal process by preparing DETAIL PROJECT REPORT (DPR) which I will
be providing on my final report to get ready for the process of sanctioning from
the respective banks.
For this we need to prepare a WRITE UP or PROJECT PROFILE for the
JACKSON Care Products which includes :

➢ Executive Summary :
- A detail information’s about the whole projects which includes:
- Project
- Proposal for
- Name of the firm
- Registered office
- Proposed unit
- Proprietor
- Promoter’s experience
- D.O.B
- PAN
- Aadhar No.
- Net Worth
- Key Financials Indicators

➢ Project Details:
- Project capacity
- Cost Of Project (COP)
- Means Of Finance (MOF)
- Major Assumptions
- Security
- Security Cover
- Project Land & Building
- Approvals
- Pollution consent
- MSME Registration Number (UAN)
- GST Registration Number
➢ Companies Background
➢ Promoters Profile
➢ Associate Concern
➢ About the Project
➢ Marketing & selling arrangement
➢ Manufacturing Process of Sanitary Napkin.
Now after the preparation of WRITE UP or PROJECT PROFILE for JACKSON
Care Product the next step is to prepare DETAIL PROJECT REPORT (DPR)
consisting of all Financial projections to check feasibility and viability of the
project and the whole DPR has been made by using MS-Excel 2016 as
application.
The steps to be followed for preparation of Detail Project Report are as follows:

Cost of project
(COP) & Means
of Finance
(MOF)
Plant &
Machinery
and
Miscellaneou
s Fixed Asset
(MFA)
Interest
and
Repaymen
t Schedule

Depreciati
on

Projection
of
profitability
(Existing)
Projection of
profitability
(Proposed)

Calculation of
production
capacity

Working
Capital
Requirement

As the proposed project JACKSON Care product has applied for Term Loan
(TL) for the purpose of expansion of existing business unit so we considered the
calculation of DEBT SERVICE COVERAGE RATIO (DSCR) not CREDIT
MONETARY ARRANGEMENT(CMA) which is calculated for Cash Credit (CC)
• Cost of Project (COP) & Means of Finance(MOF)

Cost of the project is the aggregated or the total cost that would require to bring
the project into existence. Establishing the cost of the project is considered to
be a critical step in project planning on the basis of which the Means of finance
is worked out. In JACKSON Care Product the cost of project is mainly
comprised of purchase of new Machinery (229.00) for expansion along with all
other cost like Misc. Fixed assets, pre-operative expenses along with
contingencies
For Means of Finance it is estimated that Promoters contribution will be 30
Percentage and Term Loan (TL) from SIDBI is 70 percentage which comprises
of total MOF.

Cost of Project & Means Of Finance (Rs. in Lacs)


Total
S.No. Particulars
Amount

Cost of Project

1 Building & Civil works 0.00

2 Plant & Machinery 229.00

3 Misc. Fixed Assets 4.00

4 Pre-Operative Expenses 14.00

5 Contingencies 3.00

Total 250.00

Means of finance

1 Promoters Contribution
Promoter's Capital 75.00

2 Term Loans
Term Loan from SIDBI 175.00

Total 250.00
• Plant & Machinery and Misc. Fixed Assets :

Now the next step for Project Report is to analyze the calculation of proposed
plant & Machinery utilization along with its quantity, Value and total amount
which help us to understand the actual cost of the machine can be prepared by
using Bills of Quantity (BOQ) provided by the client

DETAILS OF PLANT & MACHINERY (Rs. in Lacs)


Value in
S. No. Description Qty. Total Supplier's Name
Rs.

PLANT & EQUIPMENT

1 Sanitary Napkin Machine 1 125.00 125.00 PROSPER CHOICE IMPORT EXPORT


(PPR - 230MM /280 MM semi - servo )

2 Sanitary Pad packing Machine 2 2.40 4.80 Accurate Packing Machinery


Horizantal type sanitary type packing
machine, the contact part of the machine are
made of SS power 2020 volt singel phase motor
1.5 HP, T C.PID, MCB - SCHINEIDER

3 KGK Inkejet Printer model CSS - R Black 2 2.57 5.14 KGK JET INDIA

4 Air Compressor Frank Technologies Private Limited

Mute HD 30/7/Base 1 2.85 2.85

NIPPY DRY 150 1 1.02 1.02

ARV 1000/10 1 0.36 0.36

FOF 150 1 0.07 0.07

FPF 150 1 0.07 0.07

FMF 150 1 0.07 0.07

5 Stacker

HAND PALLET TRUCK (EM-103) 1 0.16 0.16 STACKER AND MOVERS'S (INDIA) MFG.CO.
(capacity : 3 ton )
MANUAL STACKER (EM-124) 1 0.44 0.44 STACKER AND MOVERS'S (INDIA) MFG.CO.
Capacity (1000 KG @600 mm load enter

6 Four Colour ROTO-Gravure Printing Machine 1 17.80 17.80 Krupa Engineering


Size-750 MM with Pnuematic System

7 Side Sealed Bag Making Machine 1 7.00 7.00 Mita Machinery

8 ABA Extrusion Blown Film Plant 1 20.00 20.00


Affluent Extrusion

184.79
Add: GST 18% 33.26
Total 218.05

Errection, Commissioning, P & F, Freight, 5%


11.25
Loading, unloading etc.
229.00
A details of Misc. fixed assets has been prepared along with Plant & Machinery
calculations to interpret the contribution of Misc. Fixed Assets

Value in
S. No. Description Qty. Total Supplier's Name
Rs.

1 Servo Voltage stabilizer 1 3.40 3.40

Total 3.40

Add: GST 18% 0.60

Total 4.00

• Interest & Repayment Schedule:

Interest & Repayment Schedule

AMOUNT 175.00 Lacs


(Rs. in Lacs)
Particulars 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2025-27

Ist Quarter

Opening Balance 0.00 175.00 150.00 125.00 100.00 75.00 50.00 25.00
Recd. during the Period 87.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Less: Quarterly Installment 0.00 6.25 6.25 6.25 6.25 6.25 6.25 6.25
Closing Balance 87.50 168.75 143.75 118.75 93.75 68.75 43.75 18.75
Quarterly Interest 2.63 5.25 4.50 3.75 3.00 2.25 1.50 0.75

IInd quarter

Opening Balance 87.50 168.75 143.75 118.75 93.75 68.75 43.75 18.75
Recd. during the Period 87.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Less: Quarterly Installment 0.00 6.25 6.25 6.25 6.25 6.25 6.25 6.25
Closing Balance 175.00 162.50 137.50 112.50 87.50 62.50 37.50 12.50
Quarterly Interest 5.25 5.06 4.31 3.56 2.81 2.06 1.31 0.56

IIIrd quarter

Opening Balance 175.00 162.50 137.50 112.50 87.50 62.50 37.50 12.50
Recd. during the Period 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Less: Quarterly Installment 0.00 6.25 6.25 6.25 6.25 6.25 6.25 6.25
Closing Balance 175.00 156.25 131.25 106.25 81.25 56.25 31.25 6.25
Quarterly Interest 5.25 4.88 4.13 3.38 2.63 1.88 1.13 0.38

IVth quarter

Opening Balance 175.00 156.25 131.25 106.25 81.25 56.25 31.25 6.25
Recd. during the Period 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Less: Quarterly Installment 0.00 6.25 6.25 6.25 6.25 6.25 6.25 6.25
Closing Balance 175.00 150.00 125.00 100.00 75.00 50.00 25.00 0.00
Quarterly Interest 5.25 4.69 3.94 3.19 2.44 1.69 0.94 0.19

Total Disb. during the yr. 175.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total Repayment during the yr. 0.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00

Total Interest during the year 18.38 19.88 16.88 13.88 10.88 7.88 4.88 1.88

Less:Int. during Cons. period 7.88

NET INTEREST 10.50 19.88 16.88 13.88 10.88 7.88 4.88 1.88

No. of Installments
Rate of Interest 12.00 % p.a.
Interest and repayment schedule of (175.00) is considered to be an important
calculations for Project Report, the schedule tell us about the repayment of loan
amount along with interest by JACKSON Care product to SIDBI (Financial
institutions) over the four consecutive quarter, it also shows the Total amount
disbursement during the year, total repayment during the year along with net
interest and Rate of interest.
- Interest of loan during construction period will not be
considered as it falls under the moratorium period of the
project construction, the interest on loan repayment will start
from the second consecutive year.
• Deprecation:
Deprecation is calculated to determine the value of fixed assets as declared by
JACKSON Care Products, Deprecation has been calculated by using Straight
Line Method (SLM) and Written down Value Method (WDV) on Land, Building,
Plant & Machinery and Miscellaneous Fixed assets

Calculation of S.L.M. Depreciation


(Rs. in Lacs)
Items Land Building Plant Misc. Total
& Fixed
Machinery Assets

Estimated Cost 0.00 0.00 229.00 4.00 233.01

Pre-operative Expenses 0.00 0.00 16.71 0.29 17.00

Gross Block 0.00 0.00 245.71 4.29 250.00

Written Down Depreciation For Tax Purposes


(Rs. in Lacs)
Gross Blk.Deprn. Ist IInd IIIrd IVth Vth VIth VIIth VIIIth IXth Xth
rate

Land 0.00 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Building 0.00 10% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Plant & Machinery 245.71 15% 36.86 31.33 26.63 22.63 19.24 16.35 13.90 11.82 10.04 8.54

Miscellaneous Fixed Assets 4.29 10% 0.43 0.39 0.35 0.31 0.28 0.25 0.23 0.21 0.18 0.17

250.00 37.29 31.72 26.98 22.94 19.52 16.60 14.13 12.03 10.22 8.71
• Projection of profitability (Existing):
Profitability projections for the existing unit of the JACKSON Care Product are
calculated by using Profit & Loss Statement, Cash Flow Statement and Balance
Sheet which is actually use by the bank to check financial feasibility of the firm.
- Profit & Loss Statement

Projection Of Profitability (Existing) (Rs. in Lacs)


2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28
Particulars
Audited Estd. I II III IV V VI VII VIII IX
SALES
Turnover including
1
Increase/decrease in Stock 1824.35 3648.71 4196.02 4196.02 4196.02 4196.02 4196.02 4196.02 4196.02 4196.02 4196.02
2 Other Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1824.35 3648.71 4196.02 4196.02 4196.02 4196.02 4196.02 4196.02 4196.02 4196.02 4196.02
Less Excise Duty 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1824.35 3648.71 4196.02 4196.02 4196.02 4196.02 4196.02 4196.02 4196.02 4196.02 4196.02
COST OF PRODUCTION
1 Raw Material Consumption 1527.23 3054.46 3512.63 3512.63 3512.63 3512.63 3512.63 3512.63 3512.63 3512.63 3512.63
2 Consumables Stores 6.53 13.06 15.02 15.02 15.02 15.02 15.02 15.02 15.02 15.02 15.02
3 Power and fuel Expenses 15.10 30.19 34.72 34.72 34.72 34.72 34.72 34.72 34.72 34.72 34.72
4 Direct labour & Wages 11.13 22.26 25.60 25.60 25.60 25.60 25.60 25.60 25.60 25.60 25.60
5 Depreciation 22.11 22.36 19.00 16.15 13.73 11.67 9.92 8.43 7.17 6.09 5.18
6 Other Manufacturing Exp. 15.97 31.93 36.73 36.73 36.73 36.73 36.73 36.73 36.73 36.73 36.73
Total (Cost of Production) 1598.07 3174.26 3643.70 3640.85 3638.42 3636.36 3634.61 3633.13 3631.86 3630.79 3629.87
Gross Profit 226.29 474.44 552.32 555.17 557.59 559.65 561.40 562.89 564.15 565.23 566.14
Interest :
(i) On Term Loan 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(ii) On Working Capital 6.46 8.80 8.40 8.40 8.40 8.40 8.40 8.40 8.40 8.40 8.40
(ii) Others 0.83 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
General and Admins. Expenses 96.17 163.48 171.66 180.24 180.24 180.24 180.24 180.24 180.24 180.24 180.24
Selling and Distribution Exp. 101.50 203.01 233.46 233.46 233.46 233.46 233.46 233.46 233.46 233.46 233.46
Profit before taxation 21.32 99.15 138.80 133.07 135.49 137.55 139.30 140.79 142.06 143.13 144.04
Provision for taxes 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net Profit After Tax 21.32 99.15 138.80 133.07 135.49 137.55 139.30 140.79 142.06 143.13 144.04
Add/Less: Prior Period Adjustment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Profit For The Year 21.32 99.15 138.80 133.07 135.49 137.55 139.30 140.79 142.06 143.13 144.04
Expenses added back
- Depreciation 22.11 22.36 19.00 16.15 13.73 11.67 9.92 8.43 7.17 6.09 5.18
- Preliminary Expenses written off 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net Cash accurals 43.44 121.51 157.81 149.22 149.22 149.22 149.22 149.22 149.22 149.22 149.22

Profit & loss statements help us to determine the firm’s Revenue and expenses
for a given period of time and it shows the ability of the firm to generate sales,
manage expenses and create profits, so if we analyze the P/L Statement we
can say that the profit for the year is increasing for the successive year starting
From (2017-18 to 2027-28) and all the expenses are properly managed along
with sales turnover and profit generation.

- Cash Flow Statement

Cash - Flow Statement (Existing)


2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28
Particulars
I II III IV V VI VII VIII IX X

A. Source of Funds
1 Profit before Interest and Tax 107.95 147.20 141.47 143.89 145.95 147.70 149.19 150.46 151.53 152.44
2 Increase in share capital 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3 Depreciation 22.36 19.00 16.15 13.73 11.67 9.92 8.43 7.17 6.09 5.18
4 Increase in bank borrowing for 2.08 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
5 working capital
6 Increase in Current Liabilities 296.76 178.06 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total sources (A) 429.15 344.26 157.62 157.62 157.62 157.62 157.62 157.62 157.62 157.62
B. Disposition of Funds
1 Preliminary and pre-operative exps. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2 Increase in capital expenditure 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3 Increase in Net Current Assets 286.13 343.36 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
4 Decrease in long-term loans
- RIICO 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
- Others 7.48 7.48 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
5 Interest 8.80 8.40 8.40 8.40 8.40 8.40 8.40 8.40 8.40 8.40

Total Disposition (B) 302.41 359.24 8.40 8.40 8.40 8.40 8.40 8.40 8.40 8.40
C. Opening balance 9.34 136.08 121.10 270.32 419.54 568.77 717.99 867.21 1016.43 1165.66
D. Net surplus (A-B) 126.74 (14.98) 149.22 149.22 149.22 149.22 149.22 149.22 149.22 149.22
E. Closing balance 136.08 121.10 270.32 419.54 568.77 717.99 867.21 1016.43 1165.66 1314.88

A cash flow statement shows how much cash is generated and used during a
given period of time, in this existing cash flow statement sources of fund i.e.
cash flow in the business is remarkable along with Total Disposition, and the
firm is earning a Net Surplus for all the consecutive years.
In 2nd year i.e. (2019-20) deficit is showing because of the increase in Net
Current Assets.
- Balance sheet

Projected Balance Sheet (Existing) (Rs. in Lacs)


2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28
Particulars
Audited I II III IV V VI VII VIII IX X

A. L I A B I L I T I E S :

1 Proprietor's Capital 34.41 34.41 34.41 34.41 34.41 34.41 34.41 34.41 34.41 34.41 34.41
2 Share Application Money 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3 Reserves & Surplus 0.00 99.15 237.95 371.02 506.52 644.07 783.37 924.16 1066.21 1209.34 1353.39
4 Term Loans
- RIICO 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
- Bank 14.97 7.48 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
5 Current Liabilities 1483.79 1780.55 1958.61 1958.61 1958.61 1958.61 1958.61 1958.61 1958.61 1958.61 1958.61
6 Bank Working Capital 77.92 80.00 80.00 80.00 80.00 80.00 80.00 80.00 80.00 80.00 80.00
7 Unsecured Loans 77.09 77.09 77.09 77.09 77.09 77.09 77.09 77.09 77.09 77.09 77.09
8 Deffered Tax Liability 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL: 1688.18 2078.68 2388.06 2521.12 2656.62 2794.17 2933.47 3074.26 3216.32 3359.45 3503.49
B. A S S E T S :

1 Gross Block 171.16 171.16 171.16 171.16 171.16 171.16 171.16 171.16 171.16 171.16 171.16
2 Less: Depreciation 22.11 44.47 63.47 79.63 93.36 105.03 114.95 123.38 130.55 136.64 141.82
3 Net Block 149.05 126.69 107.69 91.54 77.81 66.13 56.21 47.78 40.62 34.52 29.34
4 Capital Work In Progress 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
5 Investment 53.30 53.30 53.30 53.30 53.30 53.30 53.30 53.30 53.30 53.30 53.30
6 Loans & Advances 45.83 45.83 45.83 45.83 45.83 45.83 45.83 45.83 45.83 45.83 45.83
7 Short Term Loans & Advances 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
8 Net Current Assets 1430.65 1716.78 2060.13 2060.13 2060.13 2060.13 2060.13 2060.13 2060.13 2060.13 2060.13
9 Cash & Bank Balance 9.34 136.08 121.10 270.32 419.54 568.77 717.99 867.21 1016.43 1165.66 1314.88
10 Preliminary Expenses not W/O 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL: 1688.18 2078.68 2388.06 2521.12 2656.62 2794.17 2933.47 3074.26 3216.32 3359.45 3503.49
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

If we analyze the balance sheet and see that Net current liability is more than
the net current assets for the 1st year i.e. 2017-18 this implies that company is
not sufficient enough to pay its current obligations but from the 2 nd year onwards
the firm is recovering more and this results to increase in net current asset over
current liability.
If we analyze the current ratio then for the first year it is coming around 0.96
because of increase in current liability than net current assets but apart from the
next consecutive year, current ratio is showing as 1.05 as the firm is sufficient
enough to pay the current Debt obligations.
• Projection of Profitability (Proposed)

Profitability projections for the proposed unit of the JACKSON Care Product are
calculated by using Profit & Loss Statement, Cash Flow Statement and Balance
Sheet and from that the DEBT SERVICE COVERAGE RATIO (DSCR) for term
loan (TL) calculation has been done.

- Profit & Loss Statement(Proposed)


Projection Of Profitability (Rs. In lacs)
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2027-28
Particulars
S.No. I II III IV V VI VII VIII IX X
Capacity Utilisation 40% 50% 60% 60% 60% 60% 60% 60% 60% 60%
A. SALES
1 Sales Including all misc. receipts 832.00 2080.00 2496.00 2496.00 2496.00 2496.00 2496.00 2496.00 2496.00 2496.00
832.00 2080.00 2496.00 2496.00 2496.00 2496.00 2496.00 2496.00 2496.00 2496.00
B. COST OF PRODUCTION
1 Raw Material Consumption 453.07 1132.68 1359.21 1359.21 1359.21 1359.21 1359.21 1359.21 1359.21 1359.21
2 Packing Material 144.44 361.11 433.33 433.33 433.33 433.33 433.33 433.33 433.33 433.33
3 Consumables Stores 42.48 106.21 127.45 127.45 127.45 127.45 127.45 127.45 127.45 127.45
4 Power and Fuel Expenses 33.60 84.00 100.80 100.80 100.80 100.80 100.80 100.80 100.80 100.80
5 Direct labour & Wages 9.33 25.66 33.87 37.25 40.98 45.08 49.59 54.54 60.00 66.00
6 Depreciation 37.29 31.72 26.98 22.94 19.52 16.60 14.13 12.03 10.22 8.71
7 Other Manufacturing Exp. 16.64 41.60 49.92 49.92 49.92 49.92 49.92 49.92 49.92 49.92

Total (Cost of Production) 736.86 1782.98 2131.57 2130.91 2131.22 2132.40 2134.43 2137.29 2140.94 2145.43

D. Gross Profit 95.14 297.02 364.43 365.09 364.78 363.60 361.57 358.71 355.06 350.57

E. Interest :
(i) On Term Loan 10.50 19.88 16.88 13.88 10.88 7.88 4.88 1.88 0.00 0.00
(ii) On Working Capital 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
10.50 19.88 16.88 13.88 10.88 7.88 4.88 1.88 0.00 0.00
F. General and Admins. Expenses 41.60 104.00 124.80 124.80 124.80 124.80 124.80 124.80 124.80 124.80
Selling and Distribution Exp. 41.60 104.00 124.80 124.80 124.80 124.80 124.80 124.80 124.80 124.80
G. Preliminary Expenses written off 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
H. Profit before taxation 1.44 69.14 97.95 101.61 104.30 106.12 107.09 107.23 105.46 100.97
I. Provision for taxes 0.44 21.16 29.97 31.09 31.92 32.47 32.77 32.81 32.27 30.90
J. Net Profit 1.00 47.99 67.98 70.52 72.39 73.65 74.32 74.42 73.19 70.08
K. Expenses added back
- Depreciation 37.29 31.72 26.98 22.94 19.52 16.60 14.13 12.03 10.22 8.71
- Preliminary Expenses written off 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
L. Net Cash accurals 38.29 79.71 94.96 93.46 91.91 90.25 88.45 86.45 83.41 78.79
M. Repayment obligations
If we analyze the profit and loss statement for the proposed project then it can
be seen that different type of capacity utilization had been taken based on the
type of project at 40 %, 50% and 60 %. The cost of production is increasing
along with a good increase in sales which impacted a positive growth in Net
Profit starting from 2019-20 to 2027 -28 at different capacity utilization.

- Cash Flow Statement (Proposed)


Cash - Flow Statement (Rs. in lacs)
Const. 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2027-28
Particulars
Period I II III IV V VI VII VIII IX X

A. SOURCE OF FUNDS
1 Profit before Taxation & Interest 11.94 89.02 114.83 115.49 115.18 114.00 111.97 109.11 105.46 100.97
2 Increase in share capital 75.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3 Depreciation 37.29 31.72 26.98 22.94 19.52 16.60 14.13 12.03 10.22 8.71
4 Preliminary Expenses written off 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
5 Increase in long-term loans
- Bank 175.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
- Others 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
6 Increase in deferred payment facilities -- -- -- -- -- -- -- -- -- --
7 Unsecured Loans 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
8 Increase in bank borrowing for 118.82 176.15 58.72 0.00 0.00 0.00 0.00 0.00 0.00 0.00
working capital
9 Sales of fixed assets/investment -- -- -- -- -- -- -- -- -- --
# Internal Accruals 0.00 -- -- -- -- -- -- -- -- --

Total sources (A) 418.05 296.89 200.54 138.43 134.70 130.60 126.10 121.14 115.68 109.68
B. DISPOSITION OF FUNDS
1 Preliminary exps. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2 Increase in capital expenditure 250.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3 Increase in current assets 154.92 226.42 75.47 0.00 0.00 0.00 0.00 0.00 0.00 0.00
4 Decrease in long-term loans
- RIICO 0.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 0.00 0.00
- Others 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
5 Decrease in unsecured loans -- -- -- -- -- -- -- -- -- --
6 Increase in investments -- -- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
7 Interest 10.50 19.88 16.88 13.88 10.88 7.88 4.88 1.88 0.00 0.00
8 Taxation 0.44 21.16 29.97 31.09 31.92 32.47 32.77 32.81 32.27 30.90
9 Dividend
-Equity -- -- -- -- -- -- -- -- -- --
-Preference -- -- -- -- -- -- -- -- -- --
# Other expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total Disposition (B) 415.87 292.46 147.32 69.97 67.80 65.35 62.65 59.69 32.27 30.90
C. Opening balance 0.00 2.18 6.62 59.83 128.28 195.19 260.44 323.89 385.33 468.74
D. Net surplus (A-B) 2.18 4.43 53.21 68.46 66.91 65.25 63.45 61.45 83.41 78.79
E. Closing balance 2.18 6.62 59.83 128.28 195.19 260.44 323.89 385.33 468.74 547.53
If we analyze the proposed cash flow statement, it can be said that total sources
of the fund are more than total disposition and the net surplus is increasing from
a tentative year up to 2027-28, so the firm has enough cash flow for the
operation.

- Balance Sheet (Proposed)

Projected Balance Sheet (Rs. in lacs)


2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2027-28
Particulars
I II III IV V VI VII VIII IX X

A. LIABILITIES
1 Equity Share Capital 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00
2 Reserves & Surplus 1.00 48.99 116.97 187.48 259.87 333.52 407.84 482.25 555.44 625.52
3 Term Loans
- RIICO 175.00 150.00 125.00 100.00 75.00 50.00 25.00 0.00 0.00 0.00
5 Bank Working Capital 118.82 294.96 353.68 353.68 353.68 353.68 353.68 353.68 353.68 353.68
6 Unsecured Loans 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL: 369.82 568.95 670.66 716.17 763.56 812.21 861.52 910.94 984.13 1054.21
B. ASSETS

1 Gross Block 250.00 250.00 250.00 250.00 250.00 250.00 250.00 250.00 250.00 250.00
2 Less: Depreciation 37.29 69.01 95.99 118.93 138.45 155.05 169.18 181.21 191.43 200.14
3 Net Block 212.71 180.99 154.01 131.07 111.55 94.95 80.82 68.79 58.57 49.86
4 Investment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
5 Net Current Assets 154.92 381.34 456.81 456.81 456.81 456.81 456.81 456.81 456.81 456.81
6 Security Deposit 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
7 Cash & Bank Balance 2.18 6.62 59.83 128.28 195.19 260.44 323.89 385.33 468.74 547.53
8 Preliminary Expenses not W/O 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL: 369.82 568.95 670.66 716.17 763.56 812.21 861.52 910.94 984.13 1054.21

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

After analyzing the balance sheet for the proposed project for JACKSON Care
Products, it can be concluded that net current assets is much more than current
liabilities so the companies can able to pay its current debt obligations. The
above three projection i.e.
- Profit & Loss Statement (Proposed)
- Cash Flow statement (Proposed)
- Balance Sheet (Proposed)
Has been made mainly in purpose for the Preparation of DEBT SERVICE
COVERAGE RATIO (DSCR) for Term Loan (TL) and financial institutions
considered this ratio calculation for feasibility check and analysis purpose.
- Debt service coverage ratio (DSCR)

2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27


Particulars
I II III IV V VI VII VIII

Profit after Tax 1.00 47.99 67.98 70.52 72.39 73.65 74.32 74.42

Depreciation 37.29 31.72 26.98 22.94 19.52 16.60 14.13 12.03

Preliminary Expenses w/o 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Interest on Term Loan 10.50 19.88 16.88 13.88 10.88 7.88 4.88 1.88

TOTAL: 48.79 99.59 111.84 107.34 102.79 98.13 93.33 88.33

Interest on Term Loan 10.50 19.88 16.88 13.88 10.88 7.88 4.88 1.88

Installment of Term Loan 0.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00

TOTAL: 10.50 44.88 41.88 38.88 35.88 32.88 29.88 26.88

D.S.C.R. 4.65 2.22 2.67 2.76 2.86 2.98 3.12 3.29

Average D.S.C.R. 2.87

Debt service coverage ratio (DSCR) indicates that the capacity of the borrower
to repay back the Debt for the business , generally DSCR lesser than 1
suggests that the firm’s inability to serve its debt.so if we analyze the DSCR for
JACKSON , it can be said that the company is earning a good amount of profit
starting from 2019 -20 to 2026-27 , this existing profit is sufficient enough to
repay back the debt , so the DSCR for all the estimated year is greater than 1
and the average DSCR is 2.87 (Calculated) so it can be concluded that
JACKON Care Product has good financials to repay back all kind of debt
obligations.

PAT + INTEREST + NON-CASH EXPENSES


DSCR =
INSTALLEMENT (INTEREST + PRINCIPLES)
Next process for the preparation of Project Report was the Calculation sheet,
calculation sheet is mainly prepared by taking assumptions as proposed by the
project JACKSON Care Product.

• Calculation of production capacity


Installed capacity of the proposed expansion project = 2600 Lakhs

Calculation of Sales Realisation at 100% Capacity (Expansion)


(Rs. in lac)
Item Qty. (in Lacs) Rate/Lac Amount

Sanitary Napkin 2600 160000 4160.00

Sales Realisation at 100% Capacity (Expansion) 4160.00

The calculation has been made by assuming 100 % capacity for sales for
expansion

• Calculation of sales realizations (Year wise)

Calculation of Sales Realisation (Year wise)


(Rs. in lac)
Capacity
Year Amount
Utilisation

2019-20 40% 832.00

2020-21 50% 2080.00

2021-22 60% 2496.00

2022-23 60% 2496.00

2023-24 60% 2496.00

Calculation of sales realization has been made by assuming 40 %, 50 % and 60


% for different consecutive years.
• Raw Material calculations:
Calculation of Raw material required at 100 % capacity (Expansion)

Reqd. per
Total Qty.
Item Pcs (In Rate per Kg. Amount
Reqd
Grams)

Non Woven Fabric 0.68 176800 153.00 270.50

Back Film 0.85 221000 135.00 298.35

Release Paper-Back 0.28 72800 100.00 72.80

Release Paper-Front 0.09 23400 100.00 23.40

Fluff-Pulp 5.45 1417000 90.00 1275.30

Granuels 1 260000 125.00 325.00

Raw Material required at 100% Capacity (Expansion) 2265.35

This above calculation shows the different types of Raw material use for
manufacturing of sanitary napkin for the firm for 100 % capacity expansion

• Cost of Raw material (year wise)

Cost of Raw Material (Year wise)


(Rs. in lac)
Capacity
Year Amount
Utilisation

2019-20 40% 453.07

2020-21 50% 1132.68

2021-22 60% 1359.21

2022-23 60% 1359.21

2023-24 60% 1359.21

This table shows the actual cost of Raw material by assuming the production
capacity for the different years
• In the same process cost of consumables for 100 % Capacity expansion
and cost of consumables year wise consumptions has been calculated
• Cost of packing material for 100 % capacity expansion and cost of
packing material year wise has been calculated

- Cost of consumables:
Cost of Consumables required at 100% Capacity (Expansion)
(Rs. in lac)
Reqd. per
Total Qty.
Item Pcs (In Rate per Kg. Amount
Reqd
Grams)

Hot Melt Construction Glue 0.25 65000 250.00 162.50

Hot Melt Position Glue 0.08 20800 240.00 49.92

Consumables required at 100% Capacity (Expansion) 212.42

Cost of Consumables (Year wise)


(Rs. in lac)
Capacity
Year Amount
Utilisation

2019-20 40% 42.48

2020-21 50% 106.21

2021-22 60% 127.45

2022-23 60% 127.45

2023-24 60% 127.45

- Cost of packing

Cost of Packing Material required at 100% Capacity (Expansion)


(Rs. in lac)
Reqd. per
Total Qty.
Item Pcs (In Rate per Kg. Amount
Reqd
Grams)

Carton (1 Carton for 36 packets) 1203704 60.00 722.22

Consumables required at 100% Capacity (Expansion) 722.22


Cost of Packing Material (Year wise)
(Rs. in lac)
Capacity
Year Amount
Utilisation

2019-20 40% 144.44

2020-21 50% 361.11

2021-22 60% 433.33

2022-23 60% 433.33

2023-24 60% 433.33

• Cost of power consumption at installed capacity :


Cost of Power Consumption at Installed Capacity
(Rs. in lac)
Power Load 250 KW
Power Cost =
(Connected Load X Working days X Working hours per Day ) 168.00
250*350*24*9/100000
TOTAL POWER 168.00
REQUIREMENT

• Cost of power (year wise)


Cost of Power (Year wise)
(Rs. in lac)
Capacity
Year Amount
Utilisation
2019-20 40% 33.60

2020-21 50% 84.00

2021-22 60% 100.80

2022-23 60% 100.80

2023-24 60% 100.80


• Salaries and wages along with year wise calculation has been made to
understand the expenses for the firm.

Salary & Wages


Direct Labour & Wages (Rs. in Lacs)
Salary per Monthly Annual
Particulars No.
Month (Rs.) Salary Bill Salary Bill

Senior Operator 2 12000 24000 2.88

Junior Operator 4 10000 40000 4.80

Assistant Operator 4 8000 32000 3.84

Helper 10 6500 65000 7.80

Packing Workers 30 5000 150000 18.00

Total 50 311000 37.32

• Salary & wages (year wise)


Salary & Wages (Year wise)
(Rs. in lac)
Capacity Labour & Fringe
Year Amount
Utilisation Wages Benefits
2019-20 40% 7.46 1.87 9.33

2020-21 50% 20.53 5.13 25.66

2021-22 60% 27.09 6.77 33.87

2022-23 60% 29.80 7.45 37.25

2023-24 60% 32.78 8.20 40.98

Now the final process for predation of project report was to calculate the
working capital requirement for the expanded project. Generally working capital
is a part of the total asset of the company, it is the difference between current
assets and current liabilities. Working capital is the daily, weekly and monthly
cash requirement for the operation of the business.
Working Capital Requirments
(Rs. in lacs)
Period Margi 2019-20 2020-21 2021-22
S. No. Particulars
in n% Total Own Bank Total Own Bank Total Own Bank
A. Current Assets Days
1. Raw Material 30 20% 41.19 8.24 32.95 102.97 20.59 82.38 123.56 24.71 98.85
2. WIP 15 25% 33.49 8.37 25.12 81.04 20.26 60.78 96.89 24.22 72.67
3. Finished Goods 15 20% 37.82 7.56 30.25 94.55 18.91 75.64 113.45 22.69 90.76
4. Consumables 45 20% 5.79 1.16 4.63 14.48 2.90 11.59 17.38 3.48 13.90
5. Receivbles 30 25% 75.64 18.91 56.73 189.09 47.27 141.82 226.91 56.73 170.18
6. Other Current Assets 2.18 2.18 0.00 2.18 2.18 0.00 2.18 2.18 0.00
Total Current Assets 196.11 46.42 149.69 484.31 112.11 372.20 580.38 134.01 446.37
B. Current Liabilities
1. Creditors 30 25% 41.19 10.32 30.87 102.97 25.73 77.24 123.56 30.88 92.68

Net Current Assets 154.92 36.11 118.82 381.34 86.38 294.96 456.81 103.13 353.68

If we analyze the working capital requirement of JACKSON it can be concluded


that different type of current assets have been used for working capital along
with current liabilities and the working capital cycle is also defined in the period
section in number of days, so promoters will contribute 20 % to 25 % and
depending upon the type of current assets the remaining money will be the
Banker’s contributions for working capital.

Then come the process for -


- Legal Documentation
- Disbursement
To complete the whole process of project Finance

7 ) Learnings:

➢ Understanding the basic concept of PROJECT FINANCE &


APPRAISAL
➢ Understanding the basic and in detail concept of Working Capital
Management
➢ Understanding the basic and in detail concept of Term Loan (TL)&
Cash Credit (CC)
➢ Learn to analyze the project feasibility for PROJECT FINANCE
➢ Learn to identify and analyze the different sectors under PROJECT
FINANCE
➢ Learn to identify the different type of financial services that the
financial institutions or consultants provides
➢ Understanding the process to analyze the Physical file for the
project.
➢ Learn to analyze different type of Ratios
This are the above mention topic are coming under the whole process of project
finance
➢ Apart from that Learn the whole process of CONCURRENT AUDIT of
Punjab National Bank & UCO Bank

8) CONCURRENT AUDIT:
Concurrent audit is a systematic and timely examination of financial
transactions on a regular basis to ensure accuracy, authenticity, compliance
with procedures and guidelines. The emphasis under concurrent audit is not on
test checking but on substantial checking of transactions.

It is an ongoing appraisal of the financial health of an entity to determine


whether the financial management arrangements (including internal control
mechanisms) are effectively working and identify areas of improvement to
enhance efficiency.

OBJECTIVES OF CONCURRENT AUDIT:

✓ Ensure voucher/ evidence based payments to improve transparency


✓ Ensure accuracy and timeliness in maintenance of books of accounts
✓ Ensure timeliness and accuracy of periodical financial statements
✓ Improve accuracy and timeliness of financial reporting
✓ Ensure compliance with laid down systems, procedures and policies
✓ Regularly track, follow up and settle advances on a priority basis
✓ Assess & improve overall internal control systems

Need for Concurrent audit:

Lack of timely and periodical clouser of books of accounts

Low quality of book /account keeping a lack of accuracy of financial report

High Amount of unadjusted advances and lack of periodical followup

Focus on statutory audit mainly on finalyzing the financial starement


Learn to analyze the physical file of different kind of loan from UCO and PNB.
Bellow list show the glimpse of a CC File analysis:

Serial No
Account No
Date of sanction
Interest Rate
Sanction limit
CGTMSE Charges
Stock regularity
Insurance date
Drawing Power
Transaction
Interest Serve
Renewal Date
Renewal Period
GST Return
Overdraft Charges
CIBIL Charges
Valuation Charges
CC Fees
Processing charges
Inspection Charges

➢ Learn the whole process of CONCURRENT AUDIT of Punjab


National Bank & UCO Bank
➢ A complete hands on experience on FINACLE (Core Banking
Software) both in PNB & UCO Bank
➢ Study of DMS (Detail Monitory Operation) Report.
➢ Learn the General Banking Process & Operations

9) Conclusion :
• The main motive during the internship period was to lean the whole
process of project finance and appraisal along with the understanding
and analyzing the financial data.
• Learn the whole process of concurrent audit of two banks
10) Other Learnings:
➢ Help in acquisition of different client for ASTHA CONSULTANTS
➢ Prepared companies profile (Broacher , Flyer , One Pager) for
Marketing Purpose.
➢ Prepares (Broacher , Flyer , One Pager) for Ratandeep Cricket
Academy (RCA)
➢ Communicate with different Event Management teams for
promoting events for RCA
➢ Learn the process of Email Marketing & Broacher Marketing for
RCA