PROJECT REPORT

ON

H.D.P.E. DHELA

OF

M/S -----------------------
-----------------------------------
-------------------
 INDEX

CHAPTER DESCRIPTION

I PROJECT AT A GLANCE

II INTRODUCTION

III BRIEF HISTORY OF THE COMPANY

AND PROMOTERS

IV MANUFACTURING PROCESS

V PRODUCT AND ITS USES

VI INFRASTRUCTURE AND PLANT LOCATION

VII PLANT ORGANISATION AND

MANPOWER REQUIREMENT
REQUIREMENT

VIII FINANCIAL ESTIMATES

IX COST OF PRODUCTION AND PROFITABILITY

X SALES REALISATION

XI FINANCIAL ANALYSIS
 ANNEXURES

I PROJECT COST AND MEANS OF FINANCE

II LAND AND SITE DEVELOPMENT COST

III FACTORY SHED AND OTHER CIVIL WORKS

IV PLANT AND MACHINERY

V MISC. FIXED ASSETS, ELECTRIFICATION AND

PRELIMINERY & PRE-OPERATIVE EXPENSES

VI INSTALLED CAPACITY AND CAPACITY UTILISATION

VII SALES REALISATION

VIII RAW MATERIALS COST

IX WORKING CAPITAL REQUIREMENT

X PROJECTED PROFIT AND LOSS ACCOUNT

XI PROJECTED CASH FLOW STATEMENT

XII PROJECTED BALANCE SHEET

XIII DEPRECIATION SCHEDULE

XIV INCOME TAX CALCULATION

XV BREAK EVEN ANALYSIS

 CHAPTER – I

PROJECT AT A GLANCE

PROJECT Manufacturing of H.D.P.E. Dhela

RAW MATERIALS
INDIGENOUS Waste Cement Bags & Other HDPE waste
Low Density waste sheet, Plastic and HM plastic
waste

IMPORTED Nil

PLANT AREA 3000 Sq. Ft.

PLANT AND MACHINERY

1. Indigenous For Dhela

a) Grinder
b) Reprocessing Machine
c) Washing & Drying Machine
d) Cutting Machine

2. Imported Nil

EMPLOYMENT POTENTIAL 31 Nos.

Contd… 2
 Page…2
LOCATION -----------------------

INSTALLED CAPACITY 300000 kgs.p.a.

ON 100% CAPACITY

PROJECT COST Amount in Rs. (in Lkahs)

Land Owned
Land Development 1.00
Civil Works 4.00
Plant & Machinery 8.65
Misc. Fixed Assets 1.45
Electrification 1.50
Preliminary & Pre-operative Expenses 0.25
Margin Money for Working Capital 2.41
------------
Total 19.26

MEANS OF FINANCE
1. Promoter’s Contribution 5.26
2. Term Loan from Commercial Bank 14.00.
----------
Total 19.26
======

WORKING CAPITAL REQUIREMENT 7.21

DEBT EQUITY RATIO 1: 3

BREAK EVEN POINT 32.72%

Contd…3

Page…3
 CHAPTER – II

INTRODUCTION:

1 M/s --------------- proposes to set up a industrial unit plant for production of H.D.P.E.
Dhela at BalipasI, P.O. Ranigoda, Dist.Jajpur, Orissa. The Installed capacity of the plant
will be 1000 kgs per day and it will run for 300 days in a year with triple shift per day.

The finished materials i.e Dhela is used in production of Black & coloured Polythene
pipes,Rope & Newar etc. have got tremendous demand in India and also having a bright
future scope. Now days it has been used by so many small-scale industries, construction,
Transportation, packing water supply,coals & mines and mainly domestic uses..

In India, at present there are number of small-scale units engaged in the manufacture of
polythene bags. There are cottage scale units also who manufacture polythene bags from
polythene sheets.

In India, at present there are number of small-scale units engaged in the manufacture of
polythene pipes. Rope etc. The quantity of production is not known.

The land is owned and site development has already been commenced. The promoter has
considerable first hand experience in the same line of production, which will be a
distinctive advantage in setting up the unit.

Contd…4
 Page…4

CHAPTER – III

BRIEF HISTORY OF THE PROMOTER

2. The Techno-Economic Feasibility Report inter alia includes the followings:

a) Assessment of actual requirements of Utilities and Manpower.

b) Assessment of actual Raw Materials.

c) Suitability of the site selected vis-à-vis requirement of infrastructure facilities.

d) Detailed estimation of the Project Cost taking into the account the initial
Margin Money for Working Capital.

e) Suggesting a suitable Financing Pattern.

f) Estimate of Cost of Production and Profitability.

Contd..5

Page..5
 CHAPTER - IV

MANUFACTURING PROCESS

Plastic Pipes are gradually replacing the conventional iron other allied ropes.. Two types of
plastic material in the thermoplastic category found useful in the manufacture is High
Density Poly Ethylene known as H.D.P.E as well as polypropylene. The materials could be
utilized by extrusion process of manufacture & Moulding. Plastic pipes are preferred to
conventional pipes owing to their being cheaper, resistant to water and moisture, and are
easy to handle. These pipes are also made available in variety of colour..They have
gained so much appreciation that the PP/HDPE ropes have replaced more than 80% of the
use of the conventional materials. Further due to indigenous availability of raw- materials
the number of new units in the line is on increase in other districts showing increasing
trend and as such have further scope for the introduction of new entrepreneurs.

First the waste raw materials are put into Jhatpat machine and then washed with water..
After washing, it is again put into drying machine so that no water content is left behind.
After drying, the raw materials are put into aglo machine to convert into hard lump. The
hard lump are put into reprocessing machine for melting with heat .The melted materials
are cutted into smaller pieces with the help of cutter attached with the outlet of the
reprocessing machine.

Contd…6

Page…6
 CHAPTER –V

PRODUCT & ITS USES

The raw materials i.e Dhela is used in production of Black & coloured Polythene pipes
have got tremendous demand in India and also having a bright future scope. Now days it
has been used by so many small-scale industries, construction, water supply, coals & mines
and mainly domestic uses..

In India, at present there are number of small-scale units engaged in the manufacture of
polythene pipes. The quantity of production is not known.

They are preferred in view of the following characteristics.

1. Resistance to corrosion and chemicals.

2. Light weight.
3. High tensile strength.
4. High rigidity.
5. Attractive colour
. 6 Readily mouldable into various shapes and forms.
7 Good mechanical properties combining together, strength,
Flexibility and toughness.
8. Excellent electrical resistances.
9 Low moisture vapor transmission.
10. High resistance to most solvents and chemicals.
11. Tasteless and odourless.
12. Good water resistances.

Contd…7

Page…7
 CHAPTER - VI

INFRASTRUCTURE AND PLANT LOCATION

The location of Plant is considered and based on availability of infrastructure facilities and
careful evaluations of other interrelated factors. That location is supposed to be the most
favorable where the following facilities are already available or can be developed further at
minimum cost.

1. Source of Raw Materials.

2. Power.

3. Roads and Transportation facilities.

4. Manpower availability.

5. Marketing facilities.

RAW MATERIALS.

1. Waste Cement Bags & Other

HDPE waste
Low Density waste sheet,
Plastic and HM plastic waste

These materials are available : Locally

Contd.. 8

Page…8
POWER SUPPLY

At present 3 phases line is available near the proposed site. Transformer is to be

Installed.

ROADS AND TRANSPORTATION FACILITIES

The unit site is located in a place, which is 15 km. away from Jajpur Road and well linked
by surface transportation from different parts of the District and state.

MAN POWER AVAILABILITY

Skilled, semi-skilled and unskilled workers are available in the district amply.

Contd…9

Page…9
 CHAPTER – VII

PLANT ORGANISATION AND MANPOWER REQUIREMENT

MAN POWER REQUIREMENT

The manpower requirement of the factory and its various departments are estimated purely
on technical and management grounds. Efficient management of the unit requires qualified
and experienced personnel and appropriate organization structure clearly defining the
functions and responsibilities of the managerial and supervisory staff and other employees.

The manpower requirement of the unit is based on the estimated production level, which is
achievable with the proposed plant and machineries and other utilities.

ORGANISATION STRUCTURE

The unit will be governed by the promoter, who will formulate policies and exercise
overall management control, They will lead the organization and will be assisted by works
supervisor..
Works supervisor will be responsible for manufacturing activities and operation control of
the factory. Production and maintenance supervisors will assist him. They will co-ordinate
the activities of operators, skilled and unskilled workers. Promoters will look after the
administration of office, coordinate sales and purchases, help the accountant in financial
planning, cost control etc.

MANPOWER

The process is such that exceptionally high skill is not warranted. The required manpower
with desired level of skill is abundantly available in the District.. The unit will require 16
employees on permanent rolls and 15 unskilled workers on contract basis. The unskilled
workers required for picking, shorting, feeding and all other works related to production
activities are proposed to be given on labour contract basis, which is the system being
followed by other units in and around the proposed unit.

MANAGERIAL - 1
SUPERVISORY - 2
ACCOUNTANT - 1
STOREKEEPER - 1
SKILLED LABOUR - 5
SECURITY GUARD - 1
OTHERS - 15
-------
TOTAL - 31
====
Contd…10
 Page…10
CHAPTER –VIII

FINANCIAL ESTIMATES

LAND AND LAND DEVELOPMENT

The proposed site for the unit has already been owned at Balipasa, Khata No. 545, Mouza:
Balipasi, P.O.Ranigoda, Dist: Jajpur, Orissa. The area of the land is 0.40 Decimile. and is
well connected to Jajpur Road and other Districts of the state.

Land requires some amount of leveling and development and a boundary wall is to be
erected which is estimated at Rs. 1.00 lakhs. Good approachable road roads as well as
transport facility are available.

CIVIL WORKS

A factory shed including Office & Godown of approximately 3000 sq. ft. is proposed to be
built with tabular truss & sidewalls costing Rs. 3.20 lakhs.. Also labour shed & latrines
etc.of approximately 1000 sq. ft. is to built in at the costing Rs. 0.80 lakhs for providing
convenience to labourers.

PLANT AND MACHINERY

The main plant and machinery for the proposed unit is as follows:

Particulars Quantity Cost ( in Lakhs)

Grinder - 20 HP 2 Nos. 1.80
Re-processing Machine - 15 HP 1 No. 4.00
Cleaning Machine(Jhatpat) - 15 HP 1 No. 0.85
Washing & Drying - 15 HP 2 Nos. 1.20
Tools & Implements - 0.50
Installation Charges - 0.30
-------
Total 8.65
====

Contd…11
 Page…11

MISC. FIXED ASSTES

a) Furniture and Fixtures Rs. 0.20 Lakhs
b) Computers, Printers etc. Rs. 0.25 Lakhs
c) Water supply equipment:
Tube well & boring, Pump, GI line & Fittings,
Overhead tanks etc. Rs. 1.00 Lakhs
-----------------
Total Rs. 1.45 Lakhs
==========

ELECTRICAL FITTINGS

The proposed unit has to draw OSEB power connection from nearest point for which
overhead line has to be drawn. Also a transformer is to be installed for connected load of
50 KV

1. Overhead line, Polls and other materials as per OSEB for which
to be obtain, Security Deposit to OSEB (approximately) Rs. 0.25 Lakhs
2. Transformer of 50 KV (Local made) including base
Construction Rs. 1.00 Lakhs
3. Internal wiring & electrification etc. Rs. 0.25 Lakhs
-----------------
Total Rs. 1.50 Lakhs
==========

PRELIMINEWRY AND PRE-OPERATIVE EXPENSES

The details of preliminary & pre-operative expenses are estimated as follows:

1. Firm Registration fees & expenses Rs. 0.10 Lakhs

2. Fees for Pollution Control Board Registration Rs. 0.10 Lakhs
3. Fees for Project Report preparation, financial consultancy etc. Rs. 0.05 Lakhs
-----------------
Total Rs. 0.25 Lakhs
==========

Contd…12

Page…12
WORKING CAPITAL ESTIMATES AND THE MARGIN MONEY

The working Capital requirements of the proposed unit envisaged to be met by short-term
borrowings from Commercial Bank. The requirement of various items of inventories has
been computed on the basis of usual norms. Provision for two month’s stock of Raw
Materials has been kept. The provision for utilities etc. has been made for one month. The
estimates for Working Capital has been shown in Annexure- IX

The Bank finance is envisaged to the tune of 75% of the requirement of acceptable items of
Working Capital.

Based on 80% capacity utilisation of the proposed project, the working capital
requirements has been estimated as around of Rs. 9.62 Lakhs. The Margin Money needed
for Working Capital has been estimated at Rs. 2.41 Lakhs.

MEANS OF FINANCE

Suitable Financing pattern has been suggested. Out of the total Capital cost of the Project
of Rs. 19.26 lakhs and Rs..5.26 lakhs will be the promoter’s contribution. The details of
which is shown in Annexure – I .

Contd…13
 Page…13

CHAPTER – IX

COST OF PRODUCTION AND PROFITABILITY

COST OF PRODUCTION.

Cost of production has been estimated annually for the first five years of operation. The
total number of 300 working days on the basis of one shift per day (1 shift of 8 hours)
operations has been taken into account from the First year onwards. The various cost
components taken into account are raw materials required, wages and salaries, utilities,
administrative overheads, repairs and maintenance, stores and consumables, taxes and
duties, transportation, depreciation on fixed assets and financial charges (Interest on Bank
Finance for working Capital). The break up and details of COST OF PRODUCTION
shown in Annexure – I..

WAGES AND SALARIES

The number of personnel required for the unit operations has been estimated at 31 and the
annual wages and salaries bill works out to Rs. 1056000.00. An increase of 10% in the
total amount of wages and salaries has been assumed for each subsequent year of operation
from third year onwards. The details of wages & salaries are given below:
No. of Salary Total Salary
Employees P.M. Per Month
(in Rs.) (in Rs.)
MANAGERIAL - 1 5000.00 5000.00
SUPERVISORY - 2 3500.00 7000.00
ACCOUNTANT - 1 3000.00 3000.00
STOREKEEPER - 1 3000.00 3000.00
SKILLED LABOUR - 10 3000.00 30000.00
SECURITY GUARD - 1 2500.00 2500.00
OTHERS - 15 2500.00 37500.00
------- ------------
TOTAL - 31 88000.00
==== =======

Total Salary Per Annum: Rs. 1056000.00

Contd…14
 Page…14

ADMINISTRATIVE OVERHEADS
The expenditure under this includes Insurance, Printing and stationery materials, Postage,
Telephone, Traveling and operating cost etc. The annual cost under this head works out to
Rs. 36000.00 in first year..

REPAIRS AND RENEWALS

Based on the experience of existing units, a provision for repairs and maintenance has been
estimated at Rs. 0.36 lakhs per annum. in first year..

CONSUMABLE SPARES
The expenditure under this head includes for replaceable items, which need for process
compulsory and estimated at Rs. 0.24 lakhs in first year..

POWER
The Power has been calculated as follows:
Plant & Machinery - 95 HP
Water Pump - 2 HP
General Lighting - 1 HP
Total - 98 HP at 100 Capacity Utilisation

98 HP X 0.795 = 77.91 KW i.e. 78 KW

Year Utilisation KW Unit/ month Rate per Unit Amount/P.M

1st Year 80% 62.40 12480 3.25 40560.00
2nd Year 85% 66.30 13260 3.25 43095.00
3rd Year 90% 70.20 14040 3.25 45630.00
4th Year 90% 70.20 14040 3.25 45630.00
5th Year 90% 70.20 14040 3.25 45630.00
6th Year 90% 70.20 14040 3.25 45630.00
7th Year 90% 70.20 14040 3.25 45630.00

DEPRECIATION
The depreciation has been calculated on straight line method.. Cost of Fixed Assets include
cost towards Building and civil works, erected cost of Plant and Machinery and
Miscellaneous Fixed Assets. The annual amount allocated for depreciation on additions
works out to Rs.3.23 lakhs.

FINANCIAL CHARGES
The total Working Capital Requirement of the Unit has been estimated at Rs. 9.62 lakhs
(details shown in Annexure IX of this report) of which Rs. 7.21 lakhs has been assumed to
be covered by Commercial Bank finance. The current rate of Interest @ 13.5% (per
annum) has been considered for bank finance. The interest charges on bank finance for
working capital figures out to be of Rs. 0.97 lakhs per year.

Contd…15
 Page..15

CHAPTER – X

SALES REALISATION

A significant feature of this plant that the price of the product is directly related to the
price of Raw materials, which varies frequently. Also the quality of raw materials that are
required by different unit are varies. Hence the cost of production also varies from unit to
unit. At present the market price of H.D.P.E. waste etc. varies from Rs. 20.00 to Rs. 22.00
per kg. Hence, being a new unit, the selling price of Dhela has been considered at Rs.
20.00 per kg..

The unit will produce 300000 kgs of Dhela at 100% capacity utilization. At 100% capacity
utilization, the total sales revenue that may be generated by the unit at present selling price
would be Rs. 72.00 lakhs. .

Almost 100% of the sales revenue would be on credit to the customers. Therefore, it is
assumed that at least one month’s credit would have be given to the customers as the same
is practice of other such units.

Contd..16
 Page…16

CHAPTER – XI

FINANCIAL ANALYSIS

The techno economic feasibility study highlights the following points:

1. The Debt Equity Ratio is taken sufficiently lower than the generally accepted
norms.
2. The Break Even point is 32.72 % of installed capacity based on calculation made at
1st year of operation at 80% capacity utilization. Although this is slightly higher,
the same is due to consideration of the whole amount of selling, general and
administrative expenses of fixed cost.
3. The current ratio is within the acceptable parameters although the same is slightly
lower in the initial year. However, the calculations show increasing trends in
subsequent years.
4 The following important factors having considerable impact on the viability of the
project have not been taken in to consideration in the viability study for the
present.

a) Capital investment subsidy receivable from Govt. unto maximum amount of Rs.
14.00 lakhs have not been considered as source of finance, although the unit
eligible for the same.

b) The unit is also eligible for interest subsidy / power subsidy etc. which are not
considered for viability study.

Contd…17
 Page…17

ANNEXURE -I

PROJECT COST AND MEANS OF FINANCE

SL. No. Items Amount ( Rs.in Lakhs )

1. Land ` Owned

2. Land Development 1.00

3. Factory Shed 4.00

4. Plant & Machinery 8.65

5. Miscellaneous Fixed Assets 1.45

6. Electrification 1.50

7. Preliminary & Pre-operative Expenses 0.25

8. Margin Money for Working Capital 2.41

----------
TOTAL : 19.26
======

MEANS OF FINANCE

SL. No. Items Amount ( Rs.in Lakhs )

1. Promoter’s Contribution 5.26

2. Term Loans from Commercial Bank 14.00
---------
TOTAL : 19.26
=====

2. Working Capital Loan from Bank 7.21

3. Debt Equity Ratio 1 :3

Contd…18
 Page….18

A N N E X U R E – II

LAND AND SITE DEVELOPMENT

Site Development Cost Basis of Cost Amount

( Rs.in Lakhs )

Earth filling, lavelling, and dressing

& Disposing is to be done. Boundary
wall, Internal Road, Drainage system,
Gates etc. are to be done. On estimate basis 1.00
------------
TOTAL : 1.00
=======

Contd…19
 Page…19

A N N E X U R E – III

FACTORY SHED AND OTHER CIVIL WORKS

SL. No. Description Type of Construction Amount

( Rs.in Lakhs )

1. Working Shed Iron Tabular truss, corrugated

sheet with side brick wall.
40’ X 25= 1000 sq.ft
@ Rs. 160/- per sq.ft. 1.60

2. Office & Godown Iron Tabular truss, corrugated

sheet with side brick wall.
40’X25’= 1000 sq.ft.
@ Rs. 160.00 per sq.ft. 1.60

3. Labour Shed Iron Tabular truss, corrugated

sheet with side brick wall.
40’X25’= 500 sq.ft.
@ Rs. 160.00 per sq.ft. 0.80
-----------
TOTAL : 4.00
=======

Contd…20
 Page…20

A N N E X U R E – IV

PLANT AND MACHINERY

SL. No.Description Quantity Cost per Unit Total cost/

( Rs.in Lakhs ) value incl.
installation
Cost ( in Lakhs)
1. Grinder - 15 HP 2 Nos. 1.80
2. Re-processing Machine - 10 HP 2 Nos. 4.00
3. Cleaning Machine(Jhatpat) - 15 HP 1 No. 0.85
4. Washing & Drying - 15 HP 2 Nos. 1.20
5. Tools & Implements - 0.50
6. Installation Charges - 0.30

--------
TOTAL: 8.65
=====

Contd…21
 Page..21

ANNEXURE–V

MISC FIXED ASSTES, ELECTRIFICATION AND PRELIMINERY & PRE

OPERATIVE EXPENSES

Sl. No. Items Amount

( Rs.in Lakhs )
1. Furniture and Fixtures 0.25
2. Computers, Printers etc. 0.20
3. Water supply equipment,
Tube well & boring, Pump, GI line
& Fittings, Overhead tanks etc. 1.00
---------
TOTAL: 1.45
======
ELECTRIFICATION

SL. No. Items Amount

( Rs.in Lakhs )
1. Overhead line, Polls and other materials
as per OSEB for which estimates is to be
obtain, Security Deposit to OSEB
(Approximately) 0.25
2. Transformer of 50 KV (Local made)
including base Construction 1.00

3. Internal wiring & electrification etc. 0.25

---------
1.50
======

PRELIMINEWRY AND PRE-OPERATIVE EXPENSES

SL. No. Items Amount

( Rs.in Lakhs )
1. Firm Registration fees & expenses 0.10

2. Fees for Pollution Control Board Registration 0.10

.
3. Fees for Project Report preparation, financial
Consultancy etc. 0.05
--------
.0.25
=====
Contd..22
 Page…22

A N N E X U R E – VI

INSTALLED CAPACITY AND CAPACITY UTILISATION

The installed capacity of the proposed plant has been worked on the basis of capacity of
Extruder machine alongwith other plant and machineries.

Deails of Dhela making machines installed in the unit:

----------------------------------------------------------------------------------------------------
Particulars Horse Power Quantity Loading
Capacity
----------------------------------------------------------------------------------------------------
a) Plant & Machineriess - 95 HP 7 Nos. 1000 kgs per day

Materials in 300 working days in a year 1000X300 300000 kgs p.a.

CAPACITY UTILISATION & PRODUCTION AT DIFFERENT YEARS

---------------------------------------------------------------------------------------------------
Year Capacity Total
Utilisation Production
(kgs.)
---------------------------------------------------------------------------------------------------
1st Year 80% 240000
nd
2 Year 85% 255000
3rd Year 90% 270000
4th Year 90% 270000
5th Year 90% 270000
6th Year 90% 270000
7th Year 90% 270000

Contd…23
 Page…23

A N N E X U R E – VII

SALES REALISATION

The sales prices have been based on the present prevailing market price. The selling price
of Dhela has been taken as under. Sales realization is calculated on the present market
rates.

Dhela Rs. 20.00 per kg.

Sales realization during different years of production will be as under

--------------------------------------------------------------------------------------------------
Year Capacity Quantity Rate of selling Price Total Sales
Dhela Dhela Revenue
(%) (kgs.) (Rs.) (in Lakh)
---------------------------------------------------------------------------------------------------
Ist Year 80% 240000 20.00 48.00

2nd Year 85% 255000 20.00 51.00

3rd Year 90% 270000 20.00 54.00

4th Year 90% 270000 20.00 54.00

5th Year 90% 270000 20.00 54.00

6th Year 90% 270000 20.00 54.00

7th Year 90% 270000 20.00 54.00

Contd…24
 Page…24

A N N E X U R E – VIII

RAW MATERIALS COST

RAW MATERIALS
The raw materials for the proposed product. For every 1 kg of finished goods , 1.18 kg of
raw materials is needed taking wastage @ 15% into account The raw materials i.e. waste
Cement Bags & Other HDPE waste , low-density waste sheet, plastic and HM plastic
waste for manufacturing of Dhela. The proposed factory site is 15 km away from District
town Japur where numerous vendors/ depots who are dealing plastic waste materials.
There will be no constraint of getting raw materials, which are abundantly available.

Quantity of Raw Materials required at 100% capacity

Utilization will be as under taking wastage @ 15%
1176 kgs X 300 days 352800 kgs

Cost of Raw Materials at 100% Capacity

Utilization will be as under ( Rs. in Lakhs)
352800 kgs @ Rs. 12.00 per kg. 42.34

---------
TOTAL : 42.34
=====

RAW MATERIALS REQUIREMENT AND CLOSING STOCK

Year Capacity Raw Materials Landed Total Cost Closing Total

Utilization requirement cost per of Raw Stock of Purchase
in quantity kg Materials Raw value of
(Average) Materials Raw
Materials
(%) (kgs.) (Rs in Lakhs) Qty. Value ( in Lakh)
-------------------------------------------------------------------------------------------------
Ist Year 80% 282240 12.00 33.86 47040 5.64 39.50
2nd Year 85% 299880 12.00 35.98 49980 6.00 41.98
rd
3 Year 90% 317520 12.00 38.10 52920 6.35 44.45
4th Year 90% 317520 12.00 38.10 52920 6.35 44.45
5th Year 90% 317520 12.00 38.10 52920 6.35 44.45
6th Year 90% 317520 12.00 38.10 52920 6.35 44.45
7th Year 90% 317520 12.00 38.10 52920 6.35 44.45

Contd…25
 Page…25

A N N E X U R E – IX

WOKING CAPITAL REQUIREMENT

--------------------------------------------------------------------------------------------------------------------
Particulars 1st year 2nd year 3rd year 4th year 5th year 6th year 7th year
--------------------------------------------------------------------------------------------------------------------
(A) Current Assets
1. Stock in Trade 5.64 6.00 6.35 6.35 6.35 6.35 6.35
(For 60 days)
2. Receivables 6.00 6.37 6.75 6.75 6.75 6.75 6.75
(For 45 days)
--------------------------------------------------------------------------------------------------------------------
Total Current Assets 11.64 12.37 13.10 13.10 13.10 13.10 13.10
--------------------------------------------------------------------------------------------------------------------

(B) Current Liabilities

1. Sundry Creditors
Raw Materials 0.65 0.69 0.73 0.73 0.73 0.73 0.73
(For 7 days)
2. Other Creditors
for expenses
( for 30 days) 1.37 1.37 1.37 1.37 1.37 1.37 1.37
--------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 2.82 2.10 2.10 2.10 2.10 2.10 2.10
--------------------------------------------------------------------------------------------------------------------
(C) Working Capital Gap 9.62 11.00 11.00 11.00 11.00 11.00 11.00

(D) Margin Money

for Working
Capital 2.41 2.75 2.75 2.75 2.75 2.75 2.75

(E) Working Capital

requirement (C-D) 7.21 8.25 8.25 8.25 8.25 8.25 8.25

Contd..26
 Page…26

ANNEXURE–X

PROJECTED PROFIT AND LOSS ACCOUNT

A. SALES TURNOVER ( Rs. in Lakh)

---------------------------------------------------------------------------------------------------------------------
Particulars 1st year 2nd year 3rd year 4th year 5th year 6th year 7th year
---------------------------------------------------------------------------------------------------------------------
Sales 48.00 51.00 54.00 54.00 54.00 54.00 54.00
---------------------------------------------------------------------------------------------------------------------

B. COST OF PRODUCTION
----------------------------------------------------------------------------------------------------------------------
Particulars 1st year 2nd year 3rd year 4th year 5th year 6th year 7th year
----------------------------------------------------------------------------------------------------------------------
1.Raw Materials 33.87 36.00 38.10 38.10 38.10 38.10 38.10
2.Power 0.41 0.43 0.45 0.45 0.45 0.45 0.45
3.Labour Charges 0.88 0.97 1.07 1.18 1.30 1.43 1.57
4.Stores & Spares 0.02 0.02 0.02 0.02 0.02 0.02 0.02
5.Other manufacturing
expenses 0.03 0.03 0.03 0.03 0.03 0.03 0.03
6.Repairs & Renewals 0.03 0.03 0.03 0.03 0.03 0.03 0.03
7.Depreciation 1.04 1.04 1.04 1.04 1.04 1.04 1.04
-------------------------------------------------------------------------------------------------------------------
TOTAL : 36.28 38.52 40.74 40.85 40.97 41.10 41.24
-------------------------------------------------------------------------------------------------------------------
C. Gross Profit 11.72 12.48 13.26 13.15 13.03 12.90 12.76
D. Selling,General &
Admin. Expenses 0.05 0.06 0.08 0.10 0.10 0.10 0.10
E. Net Profit before
Interest and Tax 11.67 12.42 13.18 13.05 12.93 12.80 12.66

F. Interest
Interest on Working
Capital @ 13.50% 0.97 0.97 0.97 0.97 0.97 0.97 0.97
Interest on Term
Loan @ 11% 1.54 1.32 1.10 0.88 0.66 0.44 0.22
G. Net Profit after
Interest 9.16 10.13 11.11 11.20 11.30 11.39 11.47
H. Income Tax 2.65 2.97 3.29 3.47 3.53 3.58 3.63
I. Net Profit after
Income Tax 6.51 7.16 7.82 7.73 7.77 7.81 7.84

Contd..27
 Page..27

A N N E X U R E – XI

PROJECTED CASH FLOW STATEMENT

--------------------------------------------------------------------------------------------------------------------
Sources of Fund Construction 1st year 2nd year 3rd year 4th year 5th year 6th year 7th year
-------------------------------------------------------------------------------------------------------------------------------
Promoters
Contribution 5.26

Increase In Term
Loan 14.00

Increase in
Working Capital
Loan 7.41

Profit before Interest

and Tax 11.67 12.42 13.18 13.05 12.93 12.80 12.66

Depreciation 1.04 1.04 1.04 1.04 1.04 1.04 1.04

Increase in
Current Liabilities 1.37 0.11 0.12 0.11 0.12 0.13 0.14
-------------------------------------------------------------------------------------------------------------------------------
TOTAL: 19.26 21.49 13.57 14.34 14.20 14.09 13.97 13.84
===========================================================================
-------------------------------------------------------------------------------------------------------------------------------
Utilisation of Fund
-------------------------------------------------------------------------------------------------------------------------------
Capital Expenditure 16.75

Decrease in Term Loan 2.00 2.00 2.00 2.00 2.00 2.00 2.00

Interest on Working
Capital & Term Loan 2.51 2.29 2.07 1.85 1.63 1.41 1.19

Income Tax 2.65 2.97 3.29 3.47 3.53 3.58 3.63

Increase in Current
Assets
Stocks 5.64 0.36 0.35 0.00 0.00 0.00 0.00
Sundry Debtors 6.00 0.37 0.38 0.00 0.00 0.00 0.00
------------------------------------------------------------------------------------------------------------------------------
TOTAL: 16.75 18.80 7.99 8.09 7.32 7.16 6.99 6.82
==========================================================================
Net Surplus 2.51 2.69 5.58 6.25 6.88 6.93 6.98 7.02

Add: Opening Fund 0.00 2.51 2.69 5.58 6.25 6.88 6.93 6.98
------------------------------------------------------------------------------------------------------------------------------
Closing Fund 2.51 5.20 8.27 11.83 13.13 13.81 13.91 14.00
===========================================================================
Contd..28
 Page..28

A N N E X U R E – XII

PROJECTED BALANCE SHEET

-------------------------------------------------------------------------------------------------------------
1st year 2nd year 3rd year 4th year 5th year 6th year 7th year
----------------------------------------------------------------------------------------------------------------------
SOURCES OF FUND

Capital 5.26 11.77 18.93 26.75 34.48 42.45 50.06

Profit during the year 6.51 7.16 7.82 7.73 7.77 7.81 7.84
---------------------------------------------------------------------------------------------------------------------
11.77 18.93 26.75 34.48 42.45 50.06 57.90
Secured Loan
Working Capital Loan
From Bank 7.41 8.34 9.26 9.26 9.26 9.26 9.26
Term Loan from Bank 12.00 10.00 8.00 6.00 4.00 2.00 0.00

Current Liabilities 1.37 1.48 1.60 1.71 1.83 1.96 2.10

----------------------------------------------------------------------------------------------------------------------
TOTAL : 32.55 38.75 45.61 51.45 57.34 63.28 69.26
======================================================================

----------------------------------------------------------------------------------------------------------------------
APPLICATION OF FUND

Fixed Assets 12.75 8.94 8.14 6.58 5.35 4.30 3.66

Current Assets Loans and

Advances
Stock in Trade 5.64 6.00 6.35 6.35 6.35 6.35 6.35
Receivables 6.00 6.37 6.75 6.75 6.75 6.75 6.75
Cash and Bank Balances 8.16 17.44 24.37 31.77 38.89 45.88 52.50
----------------------------------------------------------------------------------------------------------------------
TOTAL : 32.55 38.75 45.61 51.45 57.34 63.28 69.26
======================================================================

Contd..29
 Page..29

A N N E X U R E – XIII

DEPRECIATION SCHEDULE

ON STARIGHT LINE METHOD

(Rs. in Lakhs)
---------------------------------------------------------------------------------------------------------------------------------------------
Sl. No. Description of Assets Cost Depreciation
1st year 2nd year 3rd year 4th year 5th year 6th year 7th year
---------------------------------------------------------------------------------------------------------------------------------------------
1. Factory Shed and other
Civil works 4.00 0.27 0.27 0.27 0.27 0.27 0.27 0.27

2. Plant & Machinery 8.65 0.57 0.57 0.57 0.57 0.57 0.57 0.57

3. Misc. Fixed Assets 1.45 0.10 0.10 0.10 0.10 0.10 0.10 0.10

4. Electrical Installation 1.50 0.10 0.10 0.10 0.10 0.10 0.10 0.10
-----------------------------------------------------------------------------------------------------------------------------------------
TOTAL : 15.60 1.04 1.04 1.04 1.04 1.04 1.04 1.04
==========================================================================

1.Installed Cost of Assets Rs 15.60 Lakhs

2. Estimated Life 15 years

3. Average Depreciation Rs.1.04 Lakhs

Depreciation per year = Rs. 104000.00

ON STARIGHT LINE METHOD

(Rs. in Lakhs)
------------------------------------------------------------------------------------------------------------------------------------------------------------
Sl. No.Description of Assets Cost Rate of
Depre- 1st year 2nd year 3rd year 4th year 5th year 6th year 7th year
ciation Dep wdv Dep wdv Dep wdv Dep wdv Dep wdv Dep wdv Dep wdv

-----------------------------------------------------------------------------------------------------------------------------------------------------------

1. Factory Shed and other

Civil works 4.00 10% 0.40 3.60 0.36 3.24 0.32 2.91 0.29 2.62 0.26 2.36 0 .24 2.13 0.21 1.91

2. Plant & Machinery 8.65 25% 2.16 6.49 1.62 3.65 1.22 3.65 0.91 2.74 0.68 2.05 0.51 1.43 0.38 1.15

3. Misc. Fixed Assets 1.45 20% 0.29 1.16 0.23 0.93 0.19 0.74 0.15 0.59 0.12 0.47 0.10 0.38 0.08 0.32

4. Electrical Installation 1.50 25% 0.38 1.12 0.28 0.84 0.21 0.63 0.16 0.47 0.12 0.35 0.09 0.27 0.07 0.20

----------------------------------------------------------------------------------------------------------------------------------------------------------
TOTAL : 15.60 3.23 12.37 2.49 8.66 1.94 7.93 1.51 6.42 1.18 5.23 0.94 4.21 0.74 3.58
==========================================================================
Contd..30
 Page..30

A N N E X U R E – XIV

INCOME TAX CALCULATION

-----------------------------------------------------------------------------------------------------------------------
Sl. No Description 1st year 2nd year 3rd year 4th year 5th year 6th year 7th year
-----------------------------------------------------------------------------------------------------------------------
A. Net Profit before Tax 9.16 10.13 11.11 11.20 11.30 11.39 11.47
B. Add: Depreciation on
Straight line method 1.04 1.04 1.04 1.04 1.04 1.04 1.04
-----------------------------------------------------------------------------------------------------------------------
TOTAL : 10.20 11.17 12.15 12.24 12.34 12.43 12.51
-----------------------------------------------------------------------------------------------------------------------

C. Less: Depreciation on
Written Down method 3.23 2.49 1.94 1.51 1.18 0.94 0.74

D. Taxable Income 7.08 9.03 10.43 10.81 11.12 11.18 12.70

E. Income Tax 2.65 2.97 3.29 3.47 3.53 3.58 3.63

Contd..31
 Page..31

A N N E X U R E – XVI

BREAKEVEN ANALYSIS

( Rs. in Lakhs)
A. VARIABLE COST
1. Raw Materials 33.87

2. Administrative Overheads 0.08

3. Consumable Spares 0.02

4. Utilities 0.41

5. Repair, Maintenance & Stores (50%) 0.02

----------
34.40
----------

B. SEMI-VARIABLE & FIXED COST

1. Wages and Salaries 0.88

2. Depreciation (Straight Line) 1.04

3. Financial Charges 2.51

4. Repair, Maintenance & Stores ( 50%) 0.02

--------
4.45
--------

C. CONTRIBUTION 48.00

B. SURPLUS ( C – A ) 13.60

B 4.45
BREAK-EVEN POINT = -- X 100 = ------ X 100 = 32.72%
D 13.60

*******