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PROJECT REPORT

OF

MILK PASTEURIZATION
M/s. AJINKYA DOODH

-: Prepared by:-

SHREYANS TEJPAL SHAH


Chartered Accountants

127/2, Rockel Lane,

Vakharbhag, Sangli

Tel: (0233) 2623625, 2622536


PROJECT PROFILE (FINANCIAL)

# FIVE YEARS
Particulars Unit

1. Estimated W/C : Rs. in Lakhs 32.88


Requirements

2. Estimated Annual : Rs. in Lakhs 624


Turnover

3. Profit After Tax (PAT) : Rs. in Lakhs 7.43

4. ROI - EBIT to Capital : % 16.58


Employed

5. B.E.P. (% of Installed : % 60.77


Capacity)

6. Employment Potential : Nos. 15

7. Debt Service Coverage : Average 2.93


Ratio (DSCR)

9. Payback Period : Years 3.10


PROJECT REPORT
OF
MILK CHILLING PLANT
M/S AJINKYA DOODH
________________________________________________________________________

Introduction:
As we know, milk is perishable item which is to be used within short time. By
chilling and pasteurizing, its life is extended and it can be transported to longer
distances.
It is proposed that, the milk shall be collected at local level, and then will go
through chilling process. After that, it shall be supplied to the nearby Milk Dairy or
Milk Society for further processing.

This project is proposed by a partnership of two brothers, Mr. Suhas Malojirao


Shinde and Mr. Ajit Malojirao Shinde. They both are dynamic young person shall be equally
partner in the project.

Land & Building:

The required land is already been decided and to be purchased. Required building is
to be constructed as per specifications, which shall include the storage and a small office.

Plant & Machinery:

There are various machineries required in this plant. They will contain a chiller, and
others, along with a Generator, which is a necessity for the project.
Process of Production:

Pasteurization is a process of heating a food, usually liquid, to a specific temperature


for a definite length of time, and then cooling it immediately. This process slows microbial
growth in food. The process of heating wine to preserve it longer was known in China since
AD.1117, and is documented in Japan in 1568 in the diary Tamonin-nikki, but the modern
version was created by the French chemist and microbiologist Louis Pasteur, after whom it
is named. The first pasteurization test was completed by Louis Pasteur and Claude Bernard
on April 20, 1864. The process was originally conceived as a way of preventing wine and
beer from souring.

The process to be carried out is processing the milk. It is a dual process which
includes heating up the milk to a certain temperature and then chilling process is carried
out. While chilling, the heat radiated from the heated up milk is used for the next lot to heat
up. Thus running cost and need of power comes down drastically.

Effluent & Scrap:

The processes carried out are all physical processes. Thus, there is no effluent comes
out of it. Further, water is used as a carrier of heat and utilized for heating and cooling, thus
water is used at a minimum level and remains plain water.

*****
COST OF PROJECT : (Rs. In Lacs)

Land 2.00

Building 12.00

Machinery 45.00

Equipments & Electric Installation 4.00

Misc. Assets 1.00

64.00

MEANS OF FINANCE :

Promoters Contribution 25% 16.00

Bank Term Loan 75% 48.00

64.00

INTEREST :

Bank Loan 12% 5.76

Cash Credit 12%

5.76

REQUIREMENT OF WORKING CAPITAL :

1 Month Operating Expenses 3.07


15 Days Debtors 26.00
1 Day Stock in Process 1.84
1 Day Finished Goods 1.96

32.88

Proprietor's Margin 25% 8.22

Bank Funding (Cash Credit) 75% 24.66


SALARY /WAGES : No. of Person Salary Months Total Salary

Skilled 5 5000.00 12 3.00

Unskilled 10 3500.00 12 4.20

7.20

POWER :-

Load Required 60 HP
Total Consumption 60 HP
Total KW 44.70 KW
Consumption / Months in Units 26820 Units
Consumption in Year 321840 Units

Total Light Bill @ 4.00 Unit : Rs. 12.87

DEPRECIATION : (Rs. In Lacs)

Building 10% 1.20

Machinery 20% 9.80

11.00

PURCHASES : -
Milk per day No. of days Rate per Ltr. Total Rs. Lacs
Ltrs
Raw Milk 8000.00 300.00 23.00 552.00

SALES: -
Milk per day No. of days Rate per Ltr. Total Rs. Lacs
Ltrs
Profit from Chiiling Milk 8000.00 300.00 26.00 624.00

624.00
PROFITABILITY STATEMENTS : (Rs. In Lacs)

Sales 624.00

624.00

Less :
Raw Milk 552.00

Transportation (Both Way) 12.00

Labour 7.20

Other Expenses 4.80

Power 12.87

588.87 588.87

Gross Profit 35.13

Less : Interest T. L. 5.76

Interest on CC 2.96

Deperciation 11.00

Selling & Marketing Exps. 4.80

24.52 24.52

Net Profit Bef. Tax 10.61

Less :- Income Tax 30% 3.18

Net Profit After I. Tax Prov. 7.43

Add :- Depreciation 11.00

CASH ACCRUALS 18.43

Loan Repayment 6.86

D. S. C. R. 1.92
PROFITABLITY STATEMENT

PARTICUALRS I II III IV V VI VII


50% 55% 60% 65% 70% 75% 80%
Utilization %
Sales 624.00 686.40 748.80 811.20 873.60 936.00 998.40

Less :
Raw Milk 552.00 607.20 662.40 717.60 772.80 828.00 883.20

Labour 7.20 7.92 8.64 9.36 10.08 10.80 11.52

Power 12.87 14.16 15.45 16.74 18.02 19.31 20.60

Transportation 12.00 13.20 14.40 15.60 16.80 18.00 19.20

Other Expenses 4.80 5.28 5.76 6.24 6.72 7.20 7.68

588.87 647.76 706.65 765.54 824.42 883.31 942.20

Gross Profit 35.13 38.64 42.15 45.66 49.18 52.69 56.20

Less : Interest T. L. 5.76 4.94 4.11 3.29 2.47 1.65 0.82

Interest on CC 2.96 2.96 2.96 2.96 2.96 2.96 2.96

Deperciation 11.00 8.92 7.24 5.89 4.80 3.92 2.57

Admn. Exp. 4.80 5.28 5.76 6.24 6.72 7.20 7.68

24.52 22.10 20.08 18.38 16.95 15.72 14.03

Net Profit Before I. Tax 10.61 16.54 22.07 27.28 32.23 36.97 42.17

Less- I. Tax Provision 3.18 4.96 6.62 8.18 9.67 11.09 12.65

Net Profit After I. Tax prov. 7.43 11.58 15.45 19.10 22.56 25.88 29.52

Add- Depreciation 11.00 8.92 7.24 5.89 4.80 3.92 2.57

Cash Accruals 18.43 20.50 22.70 24.99 27.36 29.80 32.09

Loan Repayment 6.86 6.86 6.86 6.86 6.86 6.86 6.86

D.S.C.R. 1.92 2.16 2.44 2.79 3.20 3.70 4.29

D. S. C. R. 2.93
CASH FLOW & FUND FLOW STATEMENT

I II III IV V VI VII
Sources of Funds
Cash Accruals 18.43 20.50 22.70 24.99 27.36 29.80 32.09

Increas in Capital 48.88 0.00 0.00 0.00 0.00 0.00 0.00

Increase in Term Loan 48.00 0.00 0.00 0.00 0.00 0.00 0.00

Increase in Bank Borrowing 24.66 0.00 0.00 0.00 0.00 0.00 0.00

Increase in U/S Loan 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Others - Incentive 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total Application (A) 139.96 20.50 22.70 24.99 27.36 29.80 32.09

Dispossion of Funds
Pre-op Expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Increase in Capital Expenditure 64.00 0.00 0.00 0.00 0.00 0.00 0.00

Decrease in Term Loan 6.86 6.86 6.86 6.86 6.86 6.86 6.86

Decrease in Unsecured loan 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Interest 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Taxation 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Increase in Working Capital 32.88 5.00 5.00 5.00 5.00 5.00 5.00

Others (specify) 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total Dispossion (B) 103.73 11.86 11.86 11.86 11.86 11.86 11.86

Opening Balance 0.00 36.22 44.87 55.71 68.84 84.34 102.28

Net Surplus (A-B) 36.22 8.64 10.84 13.13 15.50 17.94 20.23

Closing Balance 36.22 44.87 55.71 68.84 84.34 102.28 122.51


PROJECTED BALANCE-SHEET

I II III IV V VI VII
Liabilities

share capital 48.88 48.88 48.88 48.88 48.88 48.88 48.88

Reserve & Surplus 7.43 19.01 34.46 53.55 76.11 101.99 131.51

Term Loans 41.14 34.29 27.43 20.57 13.71 6.86 0.00

Bank Borrowing for W.C. 24.66 24.66 24.66 24.66 24.66 24.66 24.66

Other Liabilities (specify) 0.00 0.00 0.00 0.00 0.00 0.00 0.00

- Deposit Fr.Relatives 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total 122.10 126.82 135.42 147.66 163.36 182.38 205.04

Assets :

Gross Block 64.00 64.00 64.00 64.00 64.00 64.00 64.00

Depreciation 11.00 19.92 27.16 33.06 37.86 41.78 44.35

Net Block 53.00 44.08 36.84 30.94 26.14 22.22 19.65

Pre-operative Exps 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Current Assets 32.88 37.88 42.88 47.88 52.88 57.88 62.88

Cash & Bank balance 36.22 44.87 55.71 68.84 84.34 102.28 122.51

122.10 126.82 135.42 147.66 163.36 182.38 205.04

0.00 0.00 0.00 0.00 0.00 0.00 0.00


INTEREST SCHEDULE :

PARTICULARS Term Loan INTEREST C. C. INTEREST


12% 12%
Opening Balance 48.00 24.66

[-] 1st Yr. Installment 6.86 5.76 0.00 2.96


BALANCE 41.14 24.66

[-] 2nd Yr. Installment 6.86 4.94 0.00 2.96


BALANCE 34.29 24.66

[-] 3rd Yr. Installment 6.86 4.11 0.00 2.96


BALANCE 27.43 24.66

[-] 4th Yr. Installment 6.86 3.29 0.00 2.96


BALANCE 20.57 24.66

[-] 5th Yr. Installment 6.86 2.47 0.00 2.96


BALANCE 13.71 24.66

[-] 6th Yr. Installment 6.86 1.65 0.00 2.96


BALANCE 6.86 24.66

[-] 7th Yr. Installment 6.86 0.82 0.00 2.96


BALANCE 0.00 24.66

DEPRECIATION SCHEDULE

PATICULARS Machinery Building Total Depr.


20% 10%

Opening Balance 49.00 12.00

[-] Ist YR. Depr. 9.80 1.20 11.00


W.D.V. 39.20 10.80

[-] IInd Yr. Depr. 7.84 1.08 8.92


W.D.V. 31.36 9.72

[-] IIIrd YR. Depr. 6.27 0.97 7.24


W.D.V. 25.09 8.75

[-] IVth Yr. Depr. 5.02 0.87 5.89


WDV 20.07 7.87

[-] Vth Yr. Depr. 4.01 0.79 4.80


WDV 16.06 7.09

[-] VIth Yr. Depr. 3.21 0.71 3.92


WDV 12.85 6.38

[-] VIIth Yr. Depr. 2.57 0.00 2.57


WDV 10.28 6.38
Break Even Point Analysis

I II III IV V VI VII

Fixed Costs

Depreciation 11.00 8.92 7.24 5.89 4.80 3.92 2.57

Interest on term loan 5.76 4.94 4.11 3.29 2.47 1.65 0.82

Wages / Salaries : Fixed : 80 % 5.76 6.34 6.91 7.49 8.06 8.64 9.22

Utilities : Fixed : 20 % 5.93 1.06 1.15 1.25 1.34 1.44 1.54

28.45 21.25 19.42 17.92 16.68 15.65 14.14


Variable Costs

Raw Material 552.00 607.20 662.40 717.60 772.80 828.00 883.20

Salaries & Wages : Variable : 20% 1.44 1.58 1.73 1.87 2.02 2.16 2.30

Utilities : Variable : 80% 23.74 4.22 4.61 4.99 5.38 5.76 6.14

577.18 613.01 668.74 724.46 780.19 835.92 891.65

Contribution 46.82 73.39 80.06 86.74 93.41 100.08 106.75

P/V ratio (contribution to sales) 0.08 0.11 0.11 0.11 0.11 0.11 0.11

Break even sales Rs.Lacs 379.23 198.73 181.65 167.60 155.98 146.33 132.28

Break Even % 60.77% 28.95% 24.26% 20.66% 17.85% 15.63% 13.25%