Satish Lele
lelepiping@gmail.com

PROJECT FEASIBILITY REPORT

 

FOR

M/s. Company Name

Address

OF

Names of CHEMICALS

AT

Location

Date of Preparation


INDEX

CHAPTERCONTENTSPAGE NO.
1PROJECT HIGHLIGHTS 
2INTRODUCTION 
3PRODUCT DESCRIPTION AND USES 
4MARKET SURVEY AND DEMAND SUPPLY POSITION 
5RAW MATERIALS AND SUPPLIERS 
6MANUFACTURING PROCESS DESCRIPTION 
7PROJECT IMPLEMENTATION SCHEDULE 
8UTILITIES REQUIREMENTS 
9UTILITIES SPECIFICATIONS 
10PRODUCTION CAPACITY AND TARGET 
11MARKET AND SELLING ARRANGEMENTS 
12SALIENT FEATURES AND PROJECT HIGHLIGHTS 
13BASIS AND PRESUMPTION 
14MANPOWER AND ORGANIZATION 
15COST OF PROJECT AND MEANS OF FINANCE 
16COST OF LAND AND BUILDING 
17SUMMARY OF PLANT AND MACHINERY 
18COST OF UTILITIES 
19MISC. FIXED ASSETS 
20SUMMARY OF PIPING AND FITTINGS 
21LIST OF LABORATORY EQUIPMENT 
22PRELIMINARY AND PREOPERATIVE EXPENSES 
23CONTINGENCIES AND ESCALATION EXPENSES 
24CALCULATION OF CAPITALIZATION SCHEDULE OF ASSETS 
25COMPUTATION OF WORKING CAPITAL 
26SALES REALIZATION 
27COST OF PRODUCTION AND PROFITABILITY 
28CASH AND FUNDS FLOW STATEMENT 
29SUMMARY OF EXPENSES 
30RAW MATERIAL AND PACKING EXPENSES 
31REPAIRS, MAINTENANCE & CONSUMABLE STORES 
32SALARIES AND WAGES 
33COST OF UTILITIES 
34ADMINISTRATIVE EXPENSES AND OVERHEADS 
35CALCULATION OF DEPRECIATION 
36INTEREST CALCULATION AND REPAYMENT SCHEDULE 

CHAPTER I
PROJECT HIGHLIGHTS

  1. Name of the Unit: Company name
  2. Constitution: Closely Held Limited Company.
  3. Registered Office: Address
    Works: Address
  4. Directors:
    • Mr. - Chairman & Joint Managing Director
    • Mr. - Managing Director
    • Mr. - Director
  5. Key Executives:
    1. Mr. - General Manager
    2. Mr. - Manager (Marketing)
    3. Mr. - Manager (Technical)
    4. Mr. - Manager Diversification
    5. Mr. - Works Manager
  6. Bankers: Name of the Bank
  7. Auditors: Auditors & Co.
  8. Proposed Products : Names of Chemicals,
  9. Total Installed Capacity: Tons/year
  10. Location: Address of Factory location
  11. Plot Area: sq. meters. (approx. in Acres)
  12. Raw Materials: Names of raw materials.
  13. Utilities:
    • Electricity: HP
    • Water : Cu M/day
    • Fuel Oil : Kilo Liter/year
  14. Direct Employment: No. of persons
  15. 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 :
  1. Production and Demand pattern
  2. Applications:
  3. Classification:
  4. Consumption:
  5. Exports:
  6. Growth Rate:
  7. New Trends
  8. Demand for Products
  9. 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.
  1. Civil Work
  2. Procurement, Inspection and Expediting Services
  3. Installation
  4. Testing
  5. Actual Manufacture
7.1.1 Civil Work : This work will include the following:
  1. Basic Plot Plan Layout.
  2. Architectural and Structural Design.
  3. Equipment Layout
  4. Single Line Electrical Diagrams
7.1.2 Procurement, Inspection and Expediting Services
  1. List of Instruments and Specifications
  2. Utilities equipment specifications
  3. Other basic information
The time schedule for the same is as follows :
ServicesPeriod 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.
  1. Long Delivery Items.
  2. 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 :
EquipmentQuantityPower 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 :
  1. Capacity Utilization is based on 300 working days with 3 shifts of 8 hours each.
  2. 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.
  3. The product will be sold in 225 kg standard drums or smaller packing. However, sales are calculated on per ton basis.
  4. Sale price of all the products is planned on the present market rates, based on the quotations of existing manufacturers and suppliers.
  5. Raw materials purchase price is also taken from the quotations received from the existing suppliers etc., and current market rates.
  6. 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.
  7. 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.
  8. Power rate is assumed per unit including all charges.
  9. Water cost is considered at /m3.
  10. L.D.O. cost is considered at /KL.
  11. Fringe benefits are taken at 25 % of wages and salaries.
  12. Interest rate considered is 8.5 % on term loan and 10.5 % on working capital from bank
  13. For repayment, a period of six and half years is planned with moratorium period of 12 months.
  14. Investment allowance is taken @ 20 % of machinery installed for SSI units, for first year.
  15. Income tax availed of is as under :
  16. Sales shown are exclusive of any government levies, i.e., tax, excise, octroi, etc., and insurance charges will be charged extra.
  17. Repairs and maintenance have been calculated at 1 % on building and 2 % on plant, machinery and miscellaneous fixed assets.
  18. 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:
  1. Factory Personnel
  2. 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
1Land and site 
2Building and Civil Work 
3Plant And Machinery 
4Utilities 
5Engineering Fees 
6Misc. Fixed Assets 
7Prelim. & Preoperative expenses including cost of public issue 
8Contingencies and Escalation 
9Margin Money for working Capital 
10Provision for Know How Fees 

B. MEANS OF FINANCE
1Promoters' Capital 
2Secured Term Loan 
3Capital 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
ParticularsRate 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
ParticularsRate 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 SpecificationsHPPrice
A   
B   
C   
DUtilities  
 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 SpecificationsHPPrice
ABoiler  
BCooling Tower for Cooling Water  
CVacuum Pump  
DFire 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

 DescriptionCost
1Piping and Fitting for distribution of water, raw materials, and product, As per Schedule in Chapter XX 
2Laboratory Furniture and Instruments 
3Office Machinery 
4Misc. Books 
5Equipment Cabling for Factory and Office 
6Spares for plant 
7Other Misc. Fixed assets 
Total 

CHAPTER XX
SUMMARY OF PIPING AND FITTINGS

A. PIPING
ItemSize mm NBLabor RateUnit RateQty.Total
MS Pipe     
SS Pipe     
TOTAL (A) 

B. VALVES
ItemSize mm NBLabor RateUnit RateQty.Total
CI Gate Valves     
CI Globe Valves     
SS 316 Ball Valve      
GM Globe Valves     
TOTAL (B) 

C. SS FITTINGS
ItemSize mm NBLabor RateUnit RateQty.Total
Short Stub Ends     
Elbows     
Tee      
Threaded Nipple     
TOTAL (C) 

D. MS FITTINGS
ItemSize mm NBLabor RateUnit RateQty.Total
Flanges     
Elbows     
Tee      
Threaded Nipple     
TOTAL (D) 

E. MISC. FITTINGS
ItemSize mm NBLabor RateUnit RateQty.Total
Nuts, Bolts, Washers     
Gaskets, Packing     
U-bolts      
Insulation     
TOTAL (E) 

F. INSTRUMENTS
ItemSize mm NBLabor RateUnit RateQty.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.ItemPrice
1Portable pH meter 
2Analytical Balance 
3Oven for heat resistance test 
4Water Distillation Unit 
5Laboratory Stirrer 
6Misc. Glassware 
7Weight / Liter Cups 
TOTAL 

CHAPTER XXII
PRELIMINARY AND PREOPERATIVE EXPENSES SUMMARY

Sr. No.ItemPeriod (Months)Total
 0-33-66-99-12 
1Establishment charges     
2Rents & Taxes     
3Company Registration     
4Promotional Expenses     
5Insurance     
6Traveling Expenses     
7Postage, Telephones     
8Printing & Stationary     
9Advertising Expenses     
10Guarantee, Commission     
11Interest During Construction     
12Issue expense     
13Startup Expenses     
Total 

CHAPTER XXIII
CONTINGENCIES AND ESCALATION EXPENSES

Basic costs are as follows:
Sl.No.ParticularsCost
1Land and site development 
2Building & Civil Work 
3Plant & Machinery 
4Utilities 
5Know how and engineering fee 
6Misc. Fixed Assets 
7Preliminary and Preoperative Expenses 
Total 

The escalation should be provided by segregating these elements into firm and non-firm elements
Sl. No.ItemFirm costNon-firm costEscalation 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
ItemContingenciesExpenses ProvisionTotal 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 AllocatedTotal 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.ItemValue
1Land & Site Development 
2Building and Civil Work 
3Plant and Machinery 
4Utilities 
5Miscellaneous Fixed assets 

CHAPTER XXV
COMPUTATION OF WORKING CAPITAL REQUIREMENTS

ItemPeriod / StockBasis %

Year I

Year II

AmountMarginAmountMargin
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.ItemYear I

Year II

 Total W.C. Requirement  
 Promoter's Margin  
 Permissible Bank Limits  

ItemPeriod / StockBasis %

Year III

Year IV

AmountMarginAmountMargin
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  

ItemPeriod / StockBasis %

Year V

Year VI

AmountMarginAmountMargin
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  

ItemPeriod / StockBasis %

Year VII

AmountMargin
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

IIIIIIIVVVIVII
% Capacity

Utilization
       
Quantity Tons       
Sales @Rs       
Total Rs.       

CHAPTER XXVII
COST OF PRODUCTION AND PROFITABILITY
Rs.'000

Sl NoItemYear
IIIIIIIVVVIVII
1Production in tons       
2Sales Rs.'000       
less 10 % discount Rs.'000       
Net Sales Rs.'000       
3Raw Material Cost Rs.'000       
4Packing Cost Rs.'000       
5Utilities Cost, Rs.'000       
6Salaries & Wages Rs.'000       
7Consumables, Stores, Rs.'000       
8Repairs & Maint. Rs.'000       
9Depreciation, Rs.'000       
10Total Cost of Production Rs.'000       
11Add : opening Stock Rs.'000       
12Less : closing Stock Rs.'000       
13Cost of Sales, Rs.'000       
14Gross Profit, Rs.'000       
15Interest, Rs.'000       
i. on Term Loan       
ii. on W. C. Loan        
16Admin. Overheads Rs.'000       
17Selling Overheads & Exp. Rs. '000       
18Total of 15,16,17, Rs.'000       
19Profit before tax (14-18) Rs.'000       
20Provision for Tax Rs. '000       
21Net Profit after tax Rs.'000       
22less ; Dividend, Rs.'000       
23Retained Profits, Rs.'000       
add: depreciation, Rs.'000       
24Net cash accruals,Rs.'000       
25Repayment to bank, Rs.'000       

CHAPTER XXVIII
CASH AND FUNDS FLOW STATEMENT
Rs.'000

SOURCES OF FUNDS
Itemconst. period

Year

IIIIIIIVVVIVII
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
Itemconst. period

Year

IIIIIIIVVVIVII
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

IIIIIIIVVVIVII
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/YearRM required, Tons/YearRM Price, Rs./TonRM 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

IIIIIIIVVVIVII
% Capacity Utilization405060708090100
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
ItemYear
ALIGN="CENTER">IIIIIIIVVVIVII
% Capacity Utilization405060708090100
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

IIIIIIIVVVIVII
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

IIIIIIIVVVIVII
% Capacity Utilization405060708090100
Utilities Cost       

CHAPTER XXXIV
ADMINISTRATIVE EXPENSES AND OVERHEAD

Rs.'000
Item

Year

IIIIIIIVVVIVII
Adviser's Remuneration       
Utilities Cost       
Telephone / Telex       
Printing / Stationary        
Audit Fee        
Rent/tax        
Conveyance        
Insurance       

SELLING EXPENSES OVERHEADS Rs.'000
ItemYear
IIIIIIIVVVIVII
Traveling       
Advertise / Publicity        
Postage / Circulars        
Transport        
Overheads        
Misc. Expenses        

CHAPTER XXXV
DEPRECIATION CALCULATION

A. DEPRECIATION ON STRAIGHT LINE BASIS : Rs.'000
Item% rate of DepreciationGross ValueDepreciation 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 %5.0033.3333.33100.00 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
YearNo. 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 :
YearIIIIIIIVVVIVII
W. C. Loan       
Annual Interest 16.50 %       
Interest on Term Loan       
Total       

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