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Supported by India's natural strengths. therefore. Name 2. Course Title - Jay Prakash 29-08-31-7529-2111 PGPPM Construction Formulation and Appraisal 5. Assignment No. - Seven Question: Any company that has to survive in a competitive environment can not remain complacent with the present. Projects have a long term impact on the character of the organization. It has to continuously bring about change in order to adapt to the altered environment. that are endeavours to create unique products and services. Investment opportunities in India are today perhaps at a peak. the country offers investment opportunities in excess of $500 billion in diverse sectors over the next five years. Projects create wealth not only for the organization but also for the nation. 3. are basically the instruments leading to organizational growth.ASSIGNMENT 1. the most of the pragmatic organizations . Course No. Projects. Realising the tremendous opportunities. No. form a very important part of the organization's strategy for survival & growth and therefore are the main concern of the corporate management. Projects. Reg. 4.

Technical Analysis 3. This is one of the most urbanized states in India. The better this is characterised. The market is mainly consisting small-scale retail outlets. importance of capital place. However. Sizeable percentage of population works in the Middle East and western countries and brings home not only valuable foreign exchange kitty but also a new consumer test of those places. the easier it will be to judge the levels of expenditure and risk that are justified. The tourists from India and all over the world are spending much on leisure while on holidays in Goa. measured by socio-economic indicators and ranks among the leading union territory states of India. 1) INTRODUCTION: ABC Company is focusing on investments in emerging retail sector throughout India. Goa State has established itself among the fastest growing industrial & commercial centers in India. The market also lacks presence of strong cooperative sector. virtually monopolized by the sellers. In the light of your studies prepare an assignment on project formulation. Market Analysis 2. excellent infrastructure. It has proposed to develop a commercial space in Panaji-Goa. 2) MARKET ANALYSIS: a) Situational analysis Company proposes to develop a Shopping Mall in Panaji-Goa. Due to scattered and satellite patterns of development. This gives an opportunity to enter a market not tested so far by the big players in retail sector and reap benefits of the first footer.are planning to invest in new projects. large base of floating . evaluation and appraisal of a hypothetical project by covering the following: 1. Identifying the patterns by which technology treates new products & services and exploiting them early gives the company a significant competitive advantage. Every project starts with the perception of an opportunity. It has made impressive progress in all round development. the city lacks cohesive and homogenous volume of population compared to other Indian cities. Financial Analysis. This brings us a good opportunity to invest in retail sector. Tourism and mining are the main sectors of the state economy.

87. 16.60.746 1. cosmetics.70.530 Census of India has projected population by Sex i.76.64.28. • • • • • • • Hyper market dealing in grocery.31.05.41.4 4. and household items Branded clothes.349 1.30.41. Beverages and restaurant. The contribution of FDI to the state’s economy has increased ten fold in the past years.420 49.032 75. Processed agriculture.864 1. high purchasing power of consumers and higher level of consumer spending gives a solid base for investment decision. Hence.095 2.64.828 Male 3.population.47.790 2.28. we decided to develop a commercial space It consisting mainly of following facilities.58.248 6.502 2.719 District North Goa North Goa North Goa South Goa South Goa South Goa Total/Rural/Urban Total Rural Urban Total Rural Urban Persons 7.964 73.000 for Goa as on 1st March – 2008 Sr.002 1. No. 1 2 3 4 5 6 No. 2000 ranked Goa as the premier state in terms of social and economic infrastructure. floriculture products.265 75.88. Handicrafts and antiques Processed Fish products b) Secondary Information:  Economic Profile of Goa: The Eleventh Finance commission Report.749 5.16.89. of Households 1. textile products. horticulture.959 2.084 .59.60. Goa is an attractive destination for foreign Direct Investment ( FDI) .98.683 56.47 82 88.69.281 1.4 5. Consumer durable goods etc.543 1.267 3.744 Females 3.11.129 88.668 6.071 2.90.e.265 1.29.573 4.44. POPULATION (2001 census) MALES FEMALES URBAN POPULATION % LITERACY RATE ( census 2001 ) in % MALE LITERACY in % MALE LITERACY in numbers FEMALE LITERACY in % FEMALE LITERACY in numbers 13.824 3.

Annexure) a) Total population as per 2001 census: 13.990. annexure no.Source of information: Census of India All India pattern of consumption in 2006-07: (Ref.580 (column 2 of Table P1) compared to only 17. spending a smaller portion of the rupee than the rural Indian on every food group except the category "beverages. 39 paise were spent on food. refreshments and processed food.000 for Goa c) Growth rate per year: (1628000-1347668) x100 134766 8 x 8yrs.3%) of the rural population of India had MPCE less than RS.lll & VI) In 2006-07.6)2 = 9831106 . Average MPCE on groups of items of consumption: (Ref.000 x (1 +2. 28. including bedding and footwear (7% for rural. Average MPCE for urban area applicable to Goa may be considered as 1944.88 for food and non-food group of expenditure c) DEMAND FORECASTING: Demand forecast was done using casual method of forecasting.6)2 = 21100734 e) Projected population for north Goa in the Year 2010: 7.lII) Out of every rupee spent in 2006-07 by the average urban Indian on consumption. Estimate based on income and price elasticity of demand: (Ref.IV) for urban area applicable to Group of union territories shall be applicable to Goa. annexure no. 7 paise on education and 5 paise on rent. roughly one-half (50. There was little difference between rural and urban households in the share of the budget allocated to fuel and light (10% for rural.28.668 for Goa b) Projected population for the Year 2008: 16. 7 paisa on milk and milk products.4% of the urban population column 6). The average urban Indian differed noticeably from the rural mainly by spending only 9 paise out of one rupee on cereals.573 x (1+2.47. Of this. 9 paisa was spent on cereals and cereal substitutes. annexure no. annexure no. 6 paise on beverages. d) Projected population for the Year 2010: 16. but as much as 14 paise on consumer services. 6% for urban).Aggregate demand f) Rise in level of disposable income: . For urban India. and 4 paise on vegetables. Percentage of population below specific MPCE: (Ref. I & IV) Aggregate demand can be worked out from secondary information available with us (ref. As the project involves products of direct consumption.58. Consumption Level Method suits best to forecast demand of the products. 9% for urban) and clothing. refreshments and processed food". In fact the urban Indian devoted only 39 paise of the rupee on food. the median level of MPCE was Rs.

1 Rise in level of supply i. d)TECHNICAL ANALYSIS:   DETAILS OF FACILITIES: The proposed shopping mall may have outlets as detailed below Departmental Store .40% in the year-1992 =5.e.7times h) Supply of edible oil (All India fig. (+) 20.30kg Rise in level of supply i.Rise in level of income = (+) 17.74% in the year-1992 =24. (+) 8.25 Change in MPCE = 2. (+) 2. we can project. 58184 Rise in level of disposable income =17% g) Supply of primary articles of consumption in the year-2001 =156.16% in the year-1992 =709.) = (+) 15. we project sufficient demand exists that needs to be fulfilled.Aggregate demand =.e.e.Rise in MPCE = (+) 2.00% 3) From above study. (+) 24.50metre In the year-2005 =31.e.67% I) MPCE for urban area (all India) in the year-1987 =139.e.13% in the year-1992 =13.75% 4) From above study.) j) Supply of cloth (All India fig. we can project.) i) Supply of sugar (All India fig.00gm In the year-2005 =690.60% 2) From above study.Per capita income in the year-2000-01 =Rs. 49693 Per capita income in the year-200405 =Rs. we can project.73 In the year-2007 =517.60%  Conclusion : (Ref. (+) 2.20kg Rise in level of supply i.) i. (-) 2.80kg In the year-2005 =7.) k) Supply of tea & coffee (All India fig.9 (All India fig. we can project.40metre Rise in level of supply i.70 times Hence.e. (+) 28.Rise in Aggregate supply (avg. annexure no.50kg In the year-2005 =16.lI) 1) From above study.) In the year-2005 =170.00gm Fall in level of supply i.

political and economic centre attracts sizeable population from all over the state and huge flow of domestic and worldwide tourist ready to spend. capsule lifts. lounge. Various systems such as crowd control. material packaging. Escalators.P. The city is being an important cultural. • Proximity to markets Geographically. air-conditioning. we should adopt 'CHASING' strategy.         Fashion and Shoes Health and Beauty Food Sports and outdoor Electrical and phones Jewellerys Gifts and Music Children Miscellaneous  Arrangements for process &technical know how: • • • The project work may be taken up on E. information • •  CAPACITY STRATEGY: • The only limiting factor from aggregate demand point of view discussed in the last chapter is population growth rate.  LOCATION OF SITE: • The project site is located in the capital city of Panaji. waste disposal etc required to be planned complying all the regulations. • Proximity to Raw material sources: The neighboring districts of . • The projected demand and existing demand to be diverted may take longer time span.C Contract basis in a time bound manner. Plants and Machineries for processing. This is lesser than other Indian states. labeling. for shops parking areas. Sound arrangements for Power back up. hence. is required. the place is centrally located between the two districts of the state. passages are to be provided. The proposed site is situated in the EDC Plaza behind central bus stand and hence a very convenient and crowd pulling location. display and systems. Technical collaboration may be made for commissioning and training of personnel.

The total area required as per break up tabulated here.  • PROPOSED SITE: The site is completely developed by the EDC (Economic Development Corporation) of Goa. advanced telecommunication facilities. The work schedules shall be thoroughly prepared and correlated to activities and time estimates. Supply of beverages is locally available and further can be strengthened through tie up with local producers.Sindhudurg Kolhapur and Belgaon offers cheap sources of commodities agriculture produce and dairy products. proper urban facilities are available such as housing schooling hospitals. Supply of power. climate is moderate and hardly disrupts economic activities taking place. Road network with better quality riding surface. This is quite significant considering size of the state and economy. FDI Equity inflows (from April 2000 to September 2008) in Goa are RS. • Govt. .33% of total FDI inflows in India and ranks ninth in attracting investment. • Industrial infrastructure: Goa has one of the best infrastructures in place. The site is a leveled plot with flat topography. heterogeneous mix of labour force from different geography etc.  Work schedule planning:  BUILDINGS AND STRUCTURES: following activities required with distinct and meticulous planning of the interior and exterior. which is 0. Urban infrastructure: Apart from industrial infrastructure. It is located near the city entry point and emerging fast as a central business zone. • etc.1 047crore. water is available in the vicinity and a waste disposal system available in the area. Uninterrupted power supply at reasonable tariff. It dose not pose any significant challenge to our proposed business. banks • Labour situation & Availability: The city boasts better quality and educated labour force suitable for trading activities. A foundation stratum is marshy soil due to reclamation of backwater area and hence needs extra cost. Convenient Railway network. • Many of the business activities are concentrated in this area due to its suitability. Supply of Consumer durables Garments and textile products can be directly arranged through supply agreements with the manufacturers. The place has become popular and very convenient to the people all over Goa due to location near the main bus stand. proximity to port and inland navigation are available. The level of labour union activism is low due to migration. policies: As per data published by RBI. • Climatic condition: Except two months of active heavy monsoon.

00 500.00 5000.00 1000. Ventilation and air conditioning system 13 (HVAC) Total 14 Parking 500.00 10500.00 500. No.00 500.00 1500.00 500. No.00 Administration and 11 Security Processing & 12 Packaging Health. Component of Project Quantity in Sqmt Unit rate / Cost percentage of development Cost . Sections 1 Departmental stores 2 Fashion and stores 3 4 5 6 7 8 9 10 Health and Beauty Food Sports and Outdoor Electrical and phones jwellery Gifts and usic Children Miscellaneous Built up area Requirement in ( Sqmt) 3000.Sr.00 500.00 500.00 500.00 500.00 E) FINANCIAL ANALYSIS:  COST OF PROJECT Sr.00 500.

420.00 2 50.000.00 10.700 .53.000.000.00.00 2.00 61.50.00.69.2& 3)3 34.000.37.000.14.02.000. Fixed assets Preliminary and capital issue expenses As per quotation As per quotation As per quotation As per quotation As per quotation Total 5 6 Pre Operative Expenses Provision for Contingencies @2% @3% Total Cost of the Project 2.00 21.Land and Building 1 2 Land cost Buildings ( with area @ 2100.00.00 3000.53.00 / sqmt 7.00.00.14.37.00.00.000.00 10500.00 7.00 sqmt per floor Keeping @ 0.00 3 4 50.00 3 7900.00/sqmt 2.00 20.00. Architect / Consultants 10000.00.00 41.51.00 4 @ 2% of (1.000 Other Expenses 1 Plants & Machineries Plant utilities Technical Know .00/ sqmt 15000.000.000.280.20.00 5000.00/sqmt 3000.2 FSI permissible for future needs) Parking and Landscape Development etc.how fee Misc.

34 / 100 = 2.34 0.60.27.62 1940 7.41 15.7668/2) x 19.49 21.142 + 3.88 for urban india in the year 2007.34 14. 216.08 2001 15.34.34 4.752 + 21.412 = 243.05 1950 1.59 2.783.71 5.132 + 4.83 Sum of square error (three months) = 0.77 1981 26.83 2.00 nos x 1974.75 21. MPCE for Goa = Rs.35. population growth rate applicable to year – 2011 i. ( 1.57. (Ref.55) 1931 7. 50 percentage of North Goa district plus 50% of south Goa district. CALCULATION OF REVENUE Population forecast for the year 2011: Year Population Growth Rate Three Months Moving Average Two Months Moving Average 1910 2.272 + 30.88/2 = 2.13 4.492 + 21.292 + 5.712 + 5.72/Hence .29 5.648.36 1921 (3.77 1971 34.e. we can assume.00 Nos. we assume 10% of the population uses this mail mall to fulfill their needs Hence = 10% 260638 = 26063.04 7.) Expected sales per month = 26063.21 2011 2.74 1991 16. expected sales per annum Rs.342 + 14. 19. Expected sales per Month ( Revenue) Here.60 Assuming total cost @ 80% of expected sales per annum . which will serve as a consumer base.  CALCULATION OF COSTS 30. group of UTs as per ANNEXURE NO.21 1960 7.88.e.34% due to lower average square error i.99 1. 1974.592 + 2.342 + 4.86 19.27 30. Projected population in the year 2011 i.14 3.638 3.58 23.042 + 7.e. Hence.862 = 216.09 25.64 Sum of square error ( three months) = 2.582 + 25.

10. No.23.53.111.009.00 Period of completion of Project.00 1.23.00 1.00 1.06.336.47.00 24.62.23. 1 2 3 4 5 6 7 8 9 Item Description Total Material cost @ 60% Total utilities cost @ 5% Total Labour cost @ 10% Total Overheads @5% Total service cost @ 5% Total Administrative cost @ 5% Total Sales Expenses @ 5% Total Royalty payable @55 Gross Total Estimated Amount 14. 21.Sr.77 21. 30.82.23.55  Operating cost with yearly breakup:Cost of the project Rs.37.111.23.00 1.00 Rs.111.111.70.53.111.53. In Cr.99.69.00 .23.53.53.00 2.00  FINANCIAL STRUCTURE Mode of Finance Equity Term Loan Total Percentage @ 50% @ 50% 100% Amount Rs.2 Year For the year ending December 2011 Opening Balance – Rs.53.88.700.225.23.60 + 11.53.78 10. 30.111.784.51.00 1.00 1.222.227.27.

88.00 Rs.73.784.00 NIL Rs. ( 56.91. 11.73.455..60 AddCash – Interest earned LessCash for purchase of material.87.23. 30. 1.498.88. wages and other expenses Cash.70. 3.Add Cash – Interest earned @ 9. (56.013) + Rs.62.06. 24.27.01.62.91.98.227. 30.23.046.26.24. wages and other expenses Cash – Release of security deposit ( defect liability ) @ 15% of Rs 21.98.00 Rs.225 Less – Cash – for Purchase of material. 3. 1.00 Rs.498.62.27.00 Cash – for repayment of loan @ 11% and 05 years term Closing Balance Rs.700.00 +Rs.00 For the year ending December 2012 Opening Balance – Rs.05. 1.69.046.00 .53.5% on Rs.00 Rs.01.00 Rs.for repayment of loan @ 11% and 05 years term Closing Balance Rs.784.60 Add- Rs.771.706.00 For the year ending December 2013 Opening balance – Rs. 32.227.32.013) Rs.62. 30.01. 3.282.70.

991.43) PV4 = Rs. period required to recover above amount Rs.62.227. (56.00 Cash returned in 2012 is Rs.50 / ( 1+ 0. investment of rs.72.59 Sum of PVs = 14.98.498.73.782.982.05.30.28.00 PV3 = Rs. investment is advisable for the project.35.498. 10.225. Here.261.35.00 / ( 1+ 0.013) / ( 1+ 0.800.91.00 – 1.90.00 Cash to be returned at the end of 5th year = 10.76.75.11.00 / ( 1+ 0.11)2 = 9.11) = 11.72. 24.76.70 PV5 = Rs.00 – Rs.13.850.35. wages and other Expenses Cash – for repayment of loan @ 11% and 05 years term Closing Balance Rs. 12.50 PV2 = Rs.Cash – Interest earned @9. Pay back period for the project is 05 years and 10 Months.05.991. 10.75.72.42. – References: .498.00 Rs.84.00 / (1+0. 19873498.00)/12 = 10.361.3 .782.72.009. 1. Say 3 Months Hence. 4.00 per annum Cash returned in 2012 is Rs.00 Assuming earnings remain same in the sixth year.23.00 Rs. 4.73.046.98.00 = 4.43.634.00 = Rs.991.32.70.01.91.28. 11. 18.98.84.361.10.991.76.00 Hence NPV = 14.931.5% on Rs. 4.35.991.  NET PRESENT VALUE METHOD: NPV = [ CF1 / (1+K) ] + [ CF2 / ( 1+K) ] + [CF3 / ( 1+K) ]+…up to CF5 INVEST.288.96 As the value of NPV is Positive.35.72.33.11) = 2.00 4.11) = 1.84.3.62.00 LessCash – for purchase of material. 4.850.00 / 4.89. ( 4.08.90.00 EVALUATION OF FINANCIAL VIABILITY  Pay Back Method: Pay back period = cash investment / cash returned per year For Cash.87.11)3 = (40.850.80.73.95. 1. PV1 = Rs.00 Rs.

in 5.nic. Project formulation and Appraisal ( PGPM – 21) By NICMAR 4. NSS 63rd Round ( July 2006 – June 2007) . Website: Census of india 6. Construction Finance management ( NCP 29 ) by NICMAR 3.1. Project financing in corporate sector by C. Karandikar / G.M Dave 2.G. Website: http:/indiabudget.

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