PROJECT FEASIBILITY REPORT
FOR
M/s. Company Name
Address
OF
Names of CHEMICALS
AT
Location
Date of Preparation
INDEX
CHAPTER | CONTENTS | PAGE NO. |
1 | PROJECT HIGHLIGHTS | |
2 | INTRODUCTION | |
3 | PRODUCT DESCRIPTION AND USES | |
4 | MARKET SURVEY AND DEMAND SUPPLY POSITION | |
5 | RAW MATERIALS AND SUPPLIERS | |
6 | MANUFACTURING PROCESS DESCRIPTION | |
7 | PROJECT IMPLEMENTATION SCHEDULE | |
8 | UTILITIES REQUIREMENTS | |
9 | UTILITIES SPECIFICATIONS | |
10 | PRODUCTION CAPACITY AND TARGET | |
11 | MARKET AND SELLING ARRANGEMENTS | |
12 | SALIENT FEATURES AND PROJECT HIGHLIGHTS | |
13 | BASIS AND PRESUMPTION | |
14 | MANPOWER AND ORGANIZATION | |
15 | COST OF PROJECT AND MEANS OF FINANCE | |
16 | COST OF LAND AND BUILDING | |
17 | SUMMARY OF PLANT AND MACHINERY | |
18 | COST OF UTILITIES | |
19 | MISC. FIXED ASSETS | |
20 | SUMMARY OF PIPING AND FITTINGS | |
21 | LIST OF LABORATORY EQUIPMENT | |
22 | PRELIMINARY AND PREOPERATIVE EXPENSES | |
23 | CONTINGENCIES AND ESCALATION EXPENSES | |
24 | CALCULATION OF CAPITALIZATION SCHEDULE OF ASSETS | |
25 | COMPUTATION OF WORKING CAPITAL | |
26 | SALES REALIZATION | |
27 | COST OF PRODUCTION AND PROFITABILITY | |
28 | CASH AND FUNDS FLOW STATEMENT | |
29 | SUMMARY OF EXPENSES | |
30 | RAW MATERIAL AND PACKING EXPENSES | |
31 | REPAIRS, MAINTENANCE & CONSUMABLE STORES | |
32 | SALARIES AND WAGES | |
33 | COST OF UTILITIES | |
34 | ADMINISTRATIVE EXPENSES AND OVERHEADS | |
35 | CALCULATION OF DEPRECIATION | |
36 | INTEREST CALCULATION AND REPAYMENT SCHEDULE | |
CHAPTER I
PROJECT HIGHLIGHTS
- Name of the Unit: Company name
- Constitution: Closely Held Limited Company.
- Registered Office: Address
Works: Address
- Directors:
- Mr. - Chairman & Joint Managing Director
- Mr. - Managing Director
- Mr. - Director
- Key Executives:
- Mr. - General Manager
- Mr. - Manager (Marketing)
- Mr. - Manager (Technical)
- Mr. - Manager Diversification
- Mr. - Works Manager
- Bankers: Name of the Bank
- Auditors: Auditors & Co.
- Proposed Products : Names of Chemicals,
- Total Installed Capacity: Tons/year
- Location: Address of Factory location
- Plot Area: sq. meters. (approx. in Acres)
- Raw Materials: Names of raw materials.
- Utilities:
- Electricity: HP
- Water : Cu M/day
- Fuel Oil : Kilo Liter/year
- Direct Employment: No. of persons
- Technology: In house, Product wise partial foreign technical support.
CHAPTER II
INTRODUCTION
2.1 GENERAL : Company information : Details of new products and project, location of project
2.2 SCHEDULE OF PROJECT IMPLEMENTATION :A PERT Chart is given to indicate the schedule.
2.3 MANAGEMENT AND TECHNICAL EXPERTISE : The company is promoted by dynamic enthusiastic and enterprising persons consisting of professionals in various fields.
2.4 PAST PERFORMANCE :
Year | | | | |
Sales | | | | |
Net Profit | | | | |
Book Value | | | | |
Earning per share | | | | |
CHAPTER III
PRODUCT DESCRIPTION AND USES OF PRESENT PRODUCTS :
The present product range is as follows :
PROPOSED PRODUCTS
The product range after the proposed diversification will be as follows:
CHAPTER IV
MARKET SURVEY AND DEMAND SUPPLY POSITION
THE PRESENT SCENARIO
Names of companies presently manufacturing these products :
- Production and Demand pattern
- Applications:
- Classification:
- Consumption:
- Exports:
- Growth Rate:
- New Trends
- Demand for Products
- Demand for next 5 years
CONCLUSION : From the demand and supply position, it appears that there should be a good scope for a new venture with following capacity.
CHAPTER V RAW MATERIALS
Basic raw materials required are :
CHAPTER VI MANUFACTURING PROCESS DESCRIPTION
6.1 TECHNOLOGY :The technology used for the manufacture of this product is based on experience of the technical persons associated with the project. The technology is developed and tested in-house. The project will be implemented by a team of engineers who have already installed similar plants and have a wide ranging experience in the project implementation and commercial production of the chemicals. The engineering work as well as turnkey services would be done in-house.
6.2 MANUFACTURE :
6.2.1 Raw Materials : The raw materials required are :
6.2.2 Product Mix : Based on Market Survey and Trends, the following product mix has been selected.
6.2.3 Brief Process Description : The Manufacturing process
6.2.4 Process Flow Diagram : Process flow diagram for the manufacture
6.3 TREATMENT OF LIQUID EFFLUENTS :
CHAPTER VII PROJECT IMPLEMENTATION SCHEDULE
7.1 IMPLEMENTATION SCHEDULE : The estimated implementation schedule for the complete unit is around 52 weeks. The schedule is after the land is fixed, land survey, soil survey and other land development work has been accomplished. The following services will further be required to implement the subject.
- Civil Work
- Procurement, Inspection and Expediting Services
- Installation
- Testing
- Actual Manufacture
7.1.1 Civil Work : This work will include the following:
- Basic Plot Plan Layout.
- Architectural and Structural Design.
- Equipment Layout
- Single Line Electrical Diagrams
7.1.2 Procurement, Inspection and Expediting Services
- List of Instruments and Specifications
- Utilities equipment specifications
- Other basic information
The time schedule for the same is as follows :
Services | Period Required (weeks) |
Architectural and Civil Design for non-plant building | |
Architectural and Civil Design for plant building | |
Mechanical Equipment Design | |
Equipment Layout | |
Electrical and Engineering Design | |
The architectural and civil design work for factory building work can start only after the equipment layout has been finalized. Thus this work will start from 8th week, when the mechanical design and the equipment layout is over. Electrical designs can be prepared immediately after mechanical design work is completed. The electrical design work will start from the 4th week and end in 14th week. The major amount of work will be completed by the 18th week. Some work in electrical engineering discipline will have to be done during the preliminary stage.
7.1.3 Procurement. Inspection and Expediting Services : All the machinery required for the factory will be procured indigenously. No equipment is required to be imported. This will reduce the delivery of the equipments to a great extent. the procurement of these equipments can be divided into two major groups.
- Long Delivery Items.
- Short Delivery Items.
A total period of 24 weeks has been estimated for the long delivery items at site after placement of orders. It is estimated that about six weeks will be required for inquiries and placement of orders for these items. Thus the work of procurement of long delivery equipments will start from the 4th week after mechanical design work is over and end in the 34th week, whence erection can start. The work for procurement of short delivery equipments will also start in the 4th week and end in the 28th week. It is estimated that delivery at site for these equipments will take around 14 weeks.
7.1.4 Construction and Installation Services :
7.1.4.1 Land Development : It is assumed that all the land development work will be over before start of detailed engineering work. Hence, no time period has been given in schedule for land development.
7.1.4.2 Factory Building, Foundation etc. construction work : The activity can start from the 16th week after the architectural and civil design work is over. It is estimated that this activity will take around 12 weeks and will be over by 28th week.
7.1.4.3 Equipment Erection : The equipment erection can start from the 34th week for long delivery equipments and from 28th week for short delivery items. The erection of equipments and instruments will be completed by the 40th week.
7.1.4.4 Electrical Installation : This activity will start from the end of 30th week and finish by 42nd week. It is estimated that the electrical equipment delivery at site will take around 14 weeks, i.e. the equipment delivery at site will be over by the 30th week.
7.1.4.5 Testing : After the installation of the equipments, mechanical testing of equipments can be started. This activity will start from the 46th week and end in 49th week.
7.1.4.6 Commissioning : This work can start after testing of the equipments and will require around 3 weeks period and should end by 52nd week.
CHAPTER VIII UTILITIES REQUIREMENT
The requirement of electrical power will be 203.25 KW of connected load. Details of power requirement for the equipments is given below :
Equipment | Quantity | Power HP |
| | |
| | |
| | |
TOTAL HP | |
Requirement of connected load = x 0.75 KW = KW
Requirement of Water = cu.m.
CHAPTER IX UTILITIES SPECIFICATIONS
Utilities Specifications:
5.1 Process Water : Process water should be free of mud and suspended particles. It should be available at a pressure of 3 Kg / cm2.
5.2 Electricity : It shall be available at 440 volts, A/C supply at 50 Hz. frequency and 3 phase supply.
5.3 Steam : About 300 kgs/hour of saturated steam at 10 Kg/cm2 supply pressure will be required.
5.4 Cooling Water : It should be available at 30o C and a return temperature of 37o C at a pressure of 4 kg /cm2.
5.5 LDO : Boiler grade LDO will be required, having calorific value of 10,250 Cal / Kg.
5.6 Compressed Air : Cold dry compressed air should be available at a pressure of 10 Kg / cm2.
CHAPTER X PRODUCTION CAPACITY AND TARGET
Year |
I |
II |
III |
IV |
V |
VI |
VII |
Capacity Utilization % |
40 |
50 |
60 |
70 |
80 |
90 |
100 |
Production |
|
|
|
|
|
|
|
CHAPTER XI
MARKET AND SELLING ARRANGEMENTS
CHAPTER XII
SALIENT FEATURES AND PROJECT HIGHLIGHTS
12.1 Product
12.2 Incentives for Industrially Backward Area :
12.3 Government Quota for Raw Material :
12.4 Other Raw Materials :
12.5 Market Potential :
12.6 Nearness to Market and Raw Materials :
12.7 Low Overheads :
12.8 Infrastructure Facilities :
12.9 Effluent Treatment:
12.10 Basis of Plant Design :
12.11 Plant Suppliers :
12.12 Labor :
12.13 By-products :
12.14 Employment Potential :
12.15 Quality Control :
CHAPTER XIII
BASIS AND PRESUMPTIONS
While deriving out various figures and projections in this Project Report, following Basis and Presumptions have been made :
- Capacity Utilization is based on 300 working days with 3 shifts of 8 hours each.
- Envisaged capacity utilization for the first year is planned at 70 % and thereafter 10 % increase every year. 100 % capacity utilization will be achieved in the 4th year of operations.
- The product will be sold in 225 kg standard drums or smaller packing. However, sales are calculated on per ton basis.
- Sale price of all the products is planned on the present market rates, based on the quotations of existing manufacturers and suppliers.
- Raw materials purchase price is also taken from the quotations received from the existing suppliers etc., and current market rates.
- The project cost and other projections etc. have been made on present market conditions and the sources available within our sources only and therefore it may vary on account of market fluctuations and with different supplies and qualities.
- Plant, machinery and equipment cost have been derived from the quotations received from the suppliers and manufacturers of such machinery, based on the specifications and drawings given by us. Quotations from more than one party have been called and those found more suitable have been referred for calculation and projections. Yet the suppliers can be changed at the time of making advance payment and placing orders with them.
- Power rate is assumed per unit including all charges.
- Water cost is considered at /m3.
- L.D.O. cost is considered at /KL.
- Fringe benefits are taken at 25 % of wages and salaries.
- Interest rate considered is 8.5 % on term loan and 10.5 % on working capital from bank
- For repayment, a period of six and half years is planned with moratorium period of 12 months.
- Investment allowance is taken @ 20 % of machinery installed for SSI units, for first year.
- Income tax availed of is as under :
- Sales shown are exclusive of any government levies, i.e., tax, excise, octroi, etc., and insurance charges will be charged extra.
- Repairs and maintenance have been calculated at 1 % on building and 2 % on plant, machinery and miscellaneous fixed assets.
- Depreciation shown in the projections have been calculated on Straight Line Method and for three shift working at the rates corresponding to Income Tax Rules.
CHAPTER XIV MANPOWER AND ORGANIZATION
14.1 AVAILABILITY OF LABOR :
The factory will be located, where availability of skilled and unskilled labor is not considered to be a problem. Skilled and unskilled labor can be recruited for running the factory. The area also offers trained and skilled personnel required for running the factory. Initially, training will be required for smooth and efficient operation of factory. It is felt that the skilled manpower available locally having some experience in operation of chemical plants manufacture can be recruited to satisfy the manpower needs.
14.2 PERSONNEL REQUIRED FOR THE PLANT :
The total manpower strength required for the plant is grouped under two headings:
- Factory Personnel
- Administrative Personnel.
The factory personnel will comprise of Senior Production Engineer and other qualified technical personnel involved in the production, maintenance and quality control departments and skilled and unskilled labor. The administrative personnel will comprise of the administrative and sales group.
14.3 EXPERIENCE REQUIREMENT :
Fairly experienced personnel will be required above the supervisory cadre. For the supervisory cadre one or two years experienced engineers or even science graduates having experience in production of chemicals can be recruited. These people can be trained to operate the plant independently. No special experience is required for workers in the production side, although skilled labor having some experience should be preferred. The sales representatives can be fresh graduates who are vigilant and dynamic.
14.4 MANPOWER REMUNERATION :
The manpower required for the two different groups discussed above are tabulated in Chapter XXXI along with their designations, salaries and number of persons required for each designation. Fringe benefits are also evaluated .Details of salary payment for the next 7 years given detail in Chapter XXXI.
CHAPTER XV
COST OF PROJECT AND MEANS OF FINANCE
A. COST OF FINANCE
1 | Land and site | |
2 | Building and Civil Work | |
3 | Plant And Machinery | |
4 | Utilities | |
5 | Engineering Fees | |
6 | Misc. Fixed Assets | |
7 | Prelim. & Preoperative expenses including cost of public issue | |
8 | Contingencies and Escalation | |
9 | Margin Money for working Capital | |
10 | Provision for Know How Fees | |
B. MEANS OF FINANCE
1 | Promoters' Capital | |
2 | Secured Term Loan | |
3 | Capital Incentive Subsidy | |
C. DEBT/EQUITY RATIO
Term Loan
D. E. Ratio = --------------------- =
Equity + Subsidy
D. SECURITY MARGIN
Tangible Assets - Term Loan
Security Margin = ------------------------------- x 100 %
Tangible Assets
Tangible Assets = Cost of Project - Working Capital Margin - Prelim. expenses + Interest during Construction
Hence, Security Margin =
CHAPTER XVI COST OF LAND AND BUILDING
16.1 LAND
Particulars | Rate | Cost |
Cost of 10800 sq.mt.(120x90) land | | |
Cost of Leveling and Land Development | | |
Cost of Construction of Internal Roads 300 mts | | |
Cost of Fencing | | |
Cost of Gates | | |
Total | |
16.2 BUILDING
Particulars | Rate | Cost |
Factory Building with Staircase and water Tank | | |
Office and Laboratory | | |
Store House | | |
Canteen | | |
Change Room | | |
Watch & Ward | | |
Equipment foundations, Sewers, drains etc. | | |
Effluent Tanks | | |
Misc. Civil Work | | |
Architect and structural Engineers' fee | | |
Total | |
Total of 16.1 and 16.2 | |
CHAPTER XVII SUMMARY OF PLANT AND MACHINERY
|
Equipment Specifications | HP | Price |
A | | | |
B | | | |
C | | | |
D | Utilities | | |
| Total Plant cost (A+B+C+D) | | |
| Add: C Excise @ | | |
| Add: Central Sales Tax @ | | |
| Add: Insurance @ | | |
| Add: Transportation, Freight, Packing, Loading, Forwarding, unloading Charges to Factory Site | | |
| Erection and Commissioning charges | | |
| Add: Painting/Coating Charges | | |
| Grand Total | |
CHAPTER XVIII
COST OF UTILITIES
| Equipment Specifications | HP | Price |
A | Boiler | | |
B | Cooling Tower for Cooling Water | | |
C | Vacuum Pump | | |
D | Fire fighting Equipment | | |
| Total Utilities cost (A+B+C+D) | | |
| Add: C Excise @ | | |
| Add: Central Sales Tax @ | | |
| Add: Insurance @ | | |
| Add: Transportation, Freight, Packing, Loading, Forwarding, Unloading Charges to Factory Site | | |
| Erection and Commissioning charges | | |
| Add: Painting/Coating Charges | | |
| Grand Total | |
CHAPTER XIX
MISCELLANEOUS FIXED ASSETS
| Description | Cost |
1 | Piping and Fitting for distribution of water, raw materials, and product, As per Schedule in Chapter XX | |
2 | Laboratory Furniture and Instruments | |
3 | Office Machinery | |
4 | Misc. Books | |
5 | Equipment Cabling for Factory and Office | |
6 | Spares for plant | |
7 | Other Misc. Fixed assets | |
Total | |
CHAPTER XX
SUMMARY OF PIPING AND FITTINGS
A. PIPING
Item | Size mm NB | Labor Rate | Unit Rate | Qty. | Total |
MS Pipe | | | | | |
SS Pipe | | | | | |
TOTAL (A) | |
B. VALVES
Item | Size mm NB | Labor Rate | Unit Rate | Qty. | Total |
CI Gate Valves | | | | | |
CI Globe Valves | | | | | |
SS 316 Ball Valve | | | | | |
GM Globe Valves | | | | | |
TOTAL (B) | |
C. SS FITTINGS
Item | Size mm NB | Labor Rate | Unit Rate | Qty. | Total |
Short Stub Ends | | | | | |
Elbows | | | | | |
Tee | | | | | |
Threaded Nipple | | | | | |
TOTAL (C) | |
D. MS FITTINGS
Item | Size mm NB | Labor Rate | Unit Rate | Qty. | Total |
Flanges | | | | | |
Elbows | | | | | |
Tee | | | | | |
Threaded Nipple | | | | | |
TOTAL (D) | |
E. MISC. FITTINGS
Item | Size mm NB | Labor Rate | Unit Rate | Qty. | Total |
Nuts, Bolts, Washers | | | | | |
Gaskets, Packing | | | | | |
U-bolts | | | | | |
Insulation | | | | | |
TOTAL (E) | |
F. INSTRUMENTS
Item | Size mm NB | Labor Rate | Unit Rate | Qty. | Total |
Safety Valves | | | | | |
Level Indicator | | | | | |
Pressure Gauge | | | | | |
Temp. Indicators | | | | | |
Vacuum Gauge | | | | | |
Sight Glass | | | | | |
Steam Trap, float type | | | | | |
Temp Indicator | | | | | |
TOTAL (F) | |
GRAND TOTAL (A+B+C+D+E+F) | |
CHAPTER XXI
LIST OF LABORATORY EQUIPMENT
Sl. No. | Item | Price |
1 | Portable pH meter | |
2 | Analytical Balance | |
3 | Oven for heat resistance test | |
4 | Water Distillation Unit | |
5 | Laboratory Stirrer | |
6 | Misc. Glassware | |
7 | Weight / Liter Cups | |
TOTAL | |
CHAPTER XXII
PRELIMINARY AND PREOPERATIVE EXPENSES SUMMARY
Sr. No. | Item | Period (Months) | Total |
| 0-3 | 3-6 | 6-9 | 9-12 | |
1 | Establishment charges | | | | | |
2 | Rents & Taxes | | | | | |
3 | Company Registration | | | | | |
4 | Promotional Expenses | | | | | |
5 | Insurance | | | | | |
6 | Traveling Expenses | | | | | |
7 | Postage, Telephones | | | | | |
8 | Printing & Stationary | | | | | |
9 | Advertising Expenses | | | | | |
10 | Guarantee, Commission | | | | | |
11 | Interest During Construction | | | | | |
12 | Issue expense | | | | | |
13 | Startup Expenses | | | | | |
Total | |
CHAPTER XXIII
CONTINGENCIES AND ESCALATION EXPENSES
Basic costs are as follows:
Sl.No. | Particulars | Cost |
1 | Land and site development | |
2 | Building & Civil Work | |
3 | Plant & Machinery | |
4 | Utilities | |
5 | Know how and engineering fee | |
6 | Misc. Fixed Assets | |
7 | Preliminary and Preoperative Expenses | |
Total | |
The escalation should be provided by segregating these elements into firm and non-firm elements
Sl. No. | Item | Firm cost | Non-firm cost | Escalation 20 % |
1 | Land & Site Development | | | |
2 | Building & Civil Work | | | |
3 | Plant & Machinery | | | |
4 | Utilities | | | |
5 | Engineering Fees | | | |
6 | Misc. Fixed Assets | | | |
7 | Preliminary & Pre operative Expenses | | | |
Total | |
Hence Contingencies Expenses =
CHAPTER XXIV
CALCULATION OF CAPITALIZATION SCHEDULE OF ASSETS
The capital expenditure in the project is as here under :
| Item | % of Capital Cost |
A | Land and site development | |
B | Building and Civil Work | |
C | Plant & Machinery | |
D | Utilities | |
E | Engineering Fees | |
F | Misc. Fixed Assets | |
G | Preliminary and preoperative expenses | |
H | Contingencies and escalation | |
Allocation of Contingencies of
Item | Contingencies | Expenses Provision | Total Amount |
Land & Site Development | | | |
Building and Civil Work | | | |
Plant and Machinery | | | |
Utilities | | | |
Engineering Fees | | | |
Misc. Fixed Assets | | | |
Preliminary and pre-operative expenses | | | |
ALLOCATION OF PRELIMINARY & PREOPERATIVE EXPENSES
This is allocated in following heads :
Item | Cost | % Amount Allocated | Total Cost |
Building and Civil Work | | | |
Plant & Machinery | | | |
Utilities | | | |
Misc. Fixed Assets | | | |
ALLOCATION OF ENGINEERING FEES : Engineering Services fees is a part of plant, hence it can be capitalized with the cost of plant and machinery.
Plant Cost =Engineering Fees + Plant & Machinery
VALUES OF ASSETS AFTER CAPITALIZATION :
Sl. No. | Item | Value |
1 | Land & Site Development | |
2 | Building and Civil Work | |
3 | Plant and Machinery | |
4 | Utilities | |
5 | Miscellaneous Fixed assets | |
CHAPTER XXV
COMPUTATION OF WORKING CAPITAL REQUIREMENTS
Item | Period / Stock | Basis % | Year I | Year II |
Amount | Margin | Amount | Margin |
Raw Materials | | | | | | |
Packing Materials | | | | | | |
Goods in Process | | | | | | |
Finished Goods | | | | | | |
Debtors | | | | | | |
Salary & Wages | | | | | | |
Other Utilities | | | | | | |
Admin Overhead | | | | | | |
Selling Overhead | | | | | | |
Total | |
Hence Total bank limits would be as under :
Sl. No. | Item | Year I | Year II |
| Total W.C. Requirement | | |
| Promoter's Margin | | |
| Permissible Bank Limits | | |
Item | Period / Stock | Basis % | Year III | Year IV |
Amount | Margin | Amount | Margin |
Raw Materials | | | | | | |
Packing Materials | | | | | | |
Goods in Process | | | | | | |
Finished Goods | | | | | | |
Debtors | | | | | | |
Salary & Wages | | | | | | |
Other Utilities | | | | | | |
Admin Overhead | | | | | | |
Selling Overhead | | | | | | |
Total | |
Hence Total bank limits would be as under :
Sl. No. | Item | Year III | Year IV |
| Total W.C. Requirement | | |
| Promoter's Margin | | |
| Permissible Bank Limits | | |
Item | Period / Stock | Basis % | Year V | Year VI |
Amount | Margin | Amount | Margin |
Raw Materials | | | | | | |
Packing Materials | | | | | | |
Goods in Process | | | | | | |
Finished Goods | | | | | | |
Debtors | | | | | | |
Salary & Wages | | | | | | |
Other Utilities | | | | | | |
Admin Overhead | | | | | | |
Selling Overhead | | | | | | |
Total | |
Hence Total bank limits would be as under :
Sl. No. | Item | Year V | Year VI |
| Total W. C. Requirement | | |
| Promoter's Margin | | |
| Permissible Bank Limits | | |
Item | Period / Stock | Basis % | Year VII |
Amount | Margin |
Raw Materials | | | | |
Packing Materials | | | | |
Goods in Process | | | | |
Finished Goods | | | | |
Debtors | | | | |
Salary & Wages | | | | |
Other Utilities | | | | |
Admin Overhead | | | | |
Selling Overhead | | | | |
Total | |
Hence Total bank limits would be as under :
Sl. No. | Item | Year VII |
| Total W. C. Requirement | |
| Promoter's Margin | |
| Permissible Bank Limits | |
CHAPTER XXVI
SALES REALIZATION TABLE Rs.'00,000
Year | I | II | III | IV | V | VI | VII |
% Capacity Utilization | | | | | | | |
Quantity Tons | | | | | | | |
Sales @Rs | | | | | | | |
Total Rs. | | | | | | | |
CHAPTER XXVII
COST OF PRODUCTION AND PROFITABILITY Rs.'000
Sl No | Item | Year |
I | II | III | IV | V | VI | VII |
1 | Production in tons | | | | | | | |
2 | Sales Rs.'000 | | | | | | | |
less 10 % discount Rs.'000 | | | | | | | |
Net Sales Rs.'000 | | | | | | | |
3 | Raw Material Cost Rs.'000 | | | | | | | |
4 | Packing Cost Rs.'000 | | | | | | | |
5 | Utilities Cost, Rs.'000 | | | | | | | |
6 | Salaries & Wages Rs.'000 | | | | | | | |
7 | Consumables, Stores, Rs.'000 | | | | | | | |
8 | Repairs & Maint. Rs.'000 | | | | | | | |
9 | Depreciation, Rs.'000 | | | | | | | |
10 | Total Cost of Production Rs.'000 | | | | | | | |
11 | Add : opening Stock Rs.'000 | | | | | | | |
12 | Less : closing Stock Rs.'000 | | | | | | | |
13 | Cost of Sales, Rs.'000 | | | | | | | |
14 | Gross Profit, Rs.'000 | | | | | | | |
15 | Interest, Rs.'000 | | | | | | | |
i. on Term Loan | | | | | | | |
ii. on W. C. Loan | | | | | | | |
16 | Admin. Overheads Rs.'000 | | | | | | | |
17 | Selling Overheads & Exp. Rs. '000 | | | | | | | |
18 | Total of 15,16,17, Rs.'000 | | | | | | | |
19 | Profit before tax (14-18) Rs.'000 | | | | | | | |
20 | Provision for Tax Rs. '000 | | | | | | | |
21 | Net Profit after tax Rs.'000 | | | | | | | |
22 | less ; Dividend, Rs.'000 | | | | | | | |
23 | Retained Profits, Rs.'000 | | | | | | | |
add: depreciation, Rs.'000 | | | | | | | |
24 | Net cash accruals,Rs.'000 | | | | | | | |
25 | Repayment to bank, Rs.'000 | | | | | | | |
CHAPTER XXVIII
CASH AND FUNDS FLOW STATEMENT Rs.'000
SOURCES OF FUNDS
Item | const. period | Year |
I | II | III | IV | V | VI | VII |
Promoters Share, Rs.'000 | | | | | | | | |
Profit after depreciation,
Prelim. exp. w/off, and
Investment allowance
reserves and
interest and taxation
Rs.'000 | | | | | | | | |
Investment allow. Reserves Rs.'000 |
| | | | | | | |
Depreciation Rs.'000 | | | | | | | | |
Capital Subsidy, Rs.'000 | | | | | | | | |
Term Loan, Rs.'000 | | | | | | | | |
Bank Borrowing, Rs.'000 | | | | | | | | |
Total Rs.'000 | | | | | | | | |
DISPOSITION OF FUNDS
Item | const. period | Year |
I | II | III | IV | V | VI | VII |
Capital Expenditure Rs.'000 | | | | | | | | |
Current assets Rs.'000 | | | | | | | | |
Preliminary Exp. Rs.'000 | | | | | | | | |
Decrease in term loan Rs.'000 | | | | | | | | |
Tax, Rs.'000 | | | | | | | | |
Interest, Rs.'000 | | | | | | | | |
Dividend, Rs.'000 | | | | | | | | |
Total Rs.'000 | | | | | | | | |
CHAPTER XXIX
SUMMARY OF EXPENSES
ANNUAL REQUIREMENTS OF VARIOUS ITEMS OF COST OF PRODUCTION Rs.'000
Item | Year |
I | II | III | IV | V | VI | VII |
Raw Materials | | | | | | | |
Packing Materials | | | | | | | |
Utilities : Power + Water | | | | | | | |
Stores | | | | | | | |
Repairs & Maintenance | | | | | | | |
Salary & Wages | | | | | | | |
Admin Overheads | | | | | | | |
Selling Overheads | | | | | | | |
Total Rs.'000 | | | | | | | |
CHAPTER XXX
RAW MATERIALS AND PACKING EXPENSES
Calculation of Raw Materials : The raw materials required are as follows:
Production, Tons/Year | RM required, Tons/Year | RM Price, Rs./Ton | RM Cost per year, Rs. '000 |
| | | |
| | | |
Hence requirement of raw materials per year on 100 % capacity utilization is Rs.
Thus, the requirement of raw materials will be as follows: Rs.'000
Item | Year |
I | II | III | IV | V | VI | VII |
% Capacity Utilization | 40 | 50 | 60 | 70 | 80 | 90 | 100 |
Raw Materials Cost | | | | | | | |
Calculation of packing expenses :
The materials will be packed in HDPE Carboys or drums of 50/100/200 liters, or 1/2/5/10/20 liters tins. For tons of product, expenses per Rs. per Kg. is Rs.
Therefore, packing expenses for next seven years are : Rs.'000
Item | Year |
ALIGN="CENTER">I | II | III | IV | V | VI | VII |
% Capacity Utilization | 40 | 50 | 60 | 70 | 80 | 90 | 100 |
Packing Expenses | | | | | | | |
CHAPTER XXXI
REPAIRS, MAINTENANCE & CONSUMABLE STORES
Calculation of Repairs & Maintenance : Repairs and maintenance charges are generally 1 % on building and 2 % on plant and machinery (including misc. fixed assets). Hence, maintenance on Building and civil work @ 1% of Rs. = Rs.
Maintenance on plant and machinery @ 2 % of Rs. = Rs. Hence Total expenses are Rs.
Assuming 15 % rise in the repairs and maintenance charges per year over the previous year, the expenses for the next 7 years are :
Item | Year |
I | II | III | IV | V | VI | VII |
Repairs and Maintenance Expenses | | | | | | | |
CHAPTER XXXII
SALARIES & WAGES
The salaries and wages of different types of Production /Administrative personnel is projected as follows :
A. LABOUR :
B. SUPERVISORY :
C. ADMINISTRATIVE :
CHAPTER XXXIII
COST OF UTILITIES
The requirements of Utilities and its cost per year is calculated as follows :
A. ELECTRICITY :
Supposing 60 % load factor for total connected load of KW, power requirement per shift is KWh. Therefore power required per annum, for three shift working and 300 working days in a year = KWh. Rate of Power = Rs. per KWh. Hence cost of power at 100 % capacity = Rs.
B. WATER :
Annual requirement at 100 % capacity cu.m. Cost of water Rs./cu.m. = . Therefore, cost water per annum = Rs.
C. FURNACE OIL / LDO :
The requirement of fuel oil is around liters per hour. Considering 24 hours a day and working of 300 days in a year fuel oil requirement is KL/year. Cost of Fuel oil at Rs. per KL, yearly cost is Rs. . Hence total cost of utilities per year is Rs. .
Projection for the next 7 years is as follows : Rs.'000
Item |
Year |
I | II | III | IV | V | VI | VII |
% Capacity Utilization | 40 | 50 | 60 | 70 | 80 | 90 | 100 |
Utilities Cost | | | | | | | |
CHAPTER XXXIV
ADMINISTRATIVE EXPENSES AND OVERHEAD Rs.'000
Item | Year |
I | II | III | IV | V | VI | VII |
Adviser's Remuneration | | | | | | | |
Utilities Cost | | | | | | | |
Telephone / Telex | | | | | | | |
Printing / Stationary | | | | | | | |
Audit Fee | | | | | | | |
Rent/tax | | | | | | | |
Conveyance | | | | | | | |
Insurance | | | | | | | |
SELLING EXPENSES OVERHEADS Rs.'000
Item | Year |
I | II | III | IV | V | VI | VII |
Traveling | | | | | | | |
Advertise / Publicity | | | | | | | |
Postage / Circulars | | | | | | | |
Transport | | | | | | | |
Overheads | | | | | | | |
Misc. Expenses | | | | | | | |
CHAPTER XXXV
DEPRECIATION CALCULATION
A. DEPRECIATION ON STRAIGHT LINE BASIS : Rs.'000
Item | % rate of Depreciation | Gross Value | Depreciation Amount |
Land & Site Development | | | |
Building and Civil Work | | | |
Office Building | | | |
Factory and other Bldg. | | | |
Plant & Machinery (3 Shift Basis) | | | |
Utilities | | | |
Misc. Fixed Assets | | | |
Total | | | |
Hence, Annual Depreciation = Rs.
B. DEPRECIATION ON W. D. V. Method (for I. T. Purpose)
Year | Building | Plant / Machinery | Other Assets | Boiler | Total |
Depreciation Factor % | 5.00 | 33.33 | 33.33 | 100.00 in first year | |
Opening Bal | | | | | |
Less: Depn | | | | | |
Opening Bal | | | | | |
Less: Depn | | | | | |
Opening Bal | | | | | |
Less: Depn | | | | | |
Opening Bal | | | | | |
Less: Depn | | | | | |
Opening Bal | | | | | |
Less: Depn | | | | | |
Opening Bal | | | | | |
Less: Depn | | | | | |
Opening Bal | | | | | |
Less: Depn | | | | | |
Balance | | | | | |
CHAPTER XXXVI
INTEREST CALCULATION AND REPAYMENT SCHEDULE
Term loan of Rs. is to be repaid within 6 and half years in 11 equal half yearly installments with initial moratorium period of 1 year. Interest 13.50 % for term loan and @ 16.50 % for
W. C. loan is considered including all bank charges for the unit.
TERM LOAN Rs.'000
Year | No. of Installment | Amount of Installment | Balance | Interest on Balance | Annual Total of Interest |
I | | | | | |
II | | | | | |
III | | | | | |
IV | | | | | |
V | | | | | |
VI | | | | | |
VII | | | | | |
INTEREST ON WORKING CAPITAL AND TERM LOAN :
Year | I | II | III | IV | V | VI | VII |
W. C. Loan | | | | | | | |
Annual Interest 16.50 % | | | | | | | |
Interest on Term Loan | | | | | | | |
Total | | | | | | | |
|
|