Rice Mill

Capacity: 2 tph

Activity: Custom Milling of Rice

Key Person:Propreitor/Partner

Assessment of Term Loan:

1.Project Details

Rs.in lakhs.

Project cost Cost Margin (%) Margin amount Required Bank

Finance

Land &Buildings 28.00 30.00 8.40 19.60

Plant& Machinery 83.00 27.23 22.60 60.40

WC margin 5.00 100 5.00 -

Contingencies 4.00 100 4.00 -

Total project cost 120.00 40.00 80.00

Means of finance

Own funds 40

Borrowings from friends

and relatives

Bank finance 80

others

Total means of 120 Debt /Equity : 2:1

finance

3. Details of capital expenditure i.e land and factory building as well as machinery proposed to purchase:The unit will have to give
in detail about the land & building (whether own or rented), details of plant and machinery to be purchased (such as supplier of
the machinery, invoice of the machinery, expected date of supply of the machinery after placing the order, what will be the
position of after sales service, credibility of the supplier etc.)

4. Remarks on cost of project & means of finance (in brief): The unit will justify about the mode of infusion of own capital.

5. Commercial viability: Rs.in lakhs

Years 1 2 3 4 5 6

(E) (E) (E) (E) (E) (E)

Net Profit 12 15 20 25 30 35

Depreciation 20 20 20 20 15 15

Cash Accruals 32 35 40 45 45 50
Repayment obligations 25 24 22 20 18 16

(including Interest)

Gross DSCR 1.28 1.45 1.81 2.25 2.50 3.12

Average Gross DSCR 1.97

Average Gross DSCR of 1.97 is above the benchmark level of 1.75 and the project is commercially viable.

ASSESSMENT OF WORKING CAPITAL

Rs.in lakhs.

1.Projected Turnover Method (Nayak Committee Method) Estimated Projected

Ist year 2nd Year

a. Estimated Sales for the Current year 100.00 125.00

b. Working capital required (25% of ‘a’) 25.00 31.25

Eligible Bank Finance (80% of ‘b’) 20.00 25.00

Bank finance Required (A) 20.00 25.00

2.Assessment as per Traditional Method

Estimated Purchases in the current Year 90.00 112.00

Estimated Average Raw Material Holding at any time 20.00 25.00

(Calculated at cost of Purchases)

Estimated Average holding of Stock in process and Finished goods at any one 5.00 6.00
time

(calculated at cost of Production)

Estimated Average Receivable outstanding at any one time 2.00 3.00

Total Requirement 27.00 34.00

Less estimated average credit enjoyed on purchases 2.00 3.00

Less estimated average credit enjoyed on purchases

Less Other Sources like unsecured loans, plough back of profits etc 5.00 6.00

Bank Finance Required (B) 20.00 25.00

Working Capital Assessed/recommended 20.00 25.00

A or B above which ever is higher i.e