Dokumen - Tips Flour Mill Feasibility Report

Farooq Flour Mill
Shahbaz Pur Road, Rahim Yar Khan
Estimated Cost of Land
( Rs. In '000' )
Area in Cost/Marla Total Cost

Sr. no Description
Marla (Rs) (Rs)
1 Land (16 Kanals) 320 70,000 22,400
2 Land Development ( 3% ) 320 1,500 480
3 Registration Charges (7.1428) 320 5,000 1,600
Total 24,480
Farooq Flour Mill
Estimated cost of Factory Building
( Rs. In '000' )
Rate / sq.ft
Sr. no Description Area / sq. ft Total cost (Rs)
(Rs)
Main Building
1 Ground Flour ( 80 * 25 ) 2,000 800 1,600
2 First Flour ( 80 * 25 ) 2,000 800 1,600
3 Second Flour ( 80 * 25 ) 2,000 800 1,600
4 Third Flour ( 80 * 25 ) 350 800 280
Wheat Plant Forms ( 40 * 100 ) 4,000 75 300
Flour Godown 1,000 300 300
Office Block
1 Main Office 1,100 700 770
2 Boudary Wall 800 300 240
3 Office Gate 300 400 120
4 Labour Quarter 1,500 400 600
Total 7,410
Farooq Flour Mill
Estimated Costof Local Machinery
( Rs. In '000' )
Rate / unit Total cost
Sr. no Name of Machiney Quantity
(Rs) (Rs)
Roller flour mill ( 100*250) mm steel
1
construction 8 375 3,000
2 Purifier 2.4 tons construction 2 150 300
3 Penumatic Fan High Pressure 2 60 120
4 Reduction Gear 10 6.5 65
5 Bran Fisher Machine 1 30 30
6 Air Lock 30 8 240
7 Washing Machine Big Size 1 250 250
Other Machinery such as. Elecric
8 generator. Low pressure fans, grain
cleansing, pipes, nut bolts etc. 6,500
Workshop Equipment
1 Electric Weldingset 2 10 20
2 Table Drill with Motor 1 10 10
3 Hand Tools 150
4 Scale Weight 4 3 120
Total 10,805
Intallation Charges( 5% of Plant & Machinery Cost) 592
Total cost of Plant & Machinery 11,397

Farooq Flour Mill
Estimated Cost of Imported Machinery
( Rs. In '000' )
Units in Rate / unit Total cost
Sr. no Name of Machiney Quantity
Currency (Rs) (Rs)
NIL
Total NIL
Farooq Four Mill
Estimated Cost of Furnture and Fixture
( Rs. In '000' )
Sr.no Description Quantity Rate (Rs) Total Cost (Rs)
Furniture and Fixture

1 Chairs 10 2,000 20
2 Tables 5 6,000 30
3 Stools 4 500 2,000
Required Office equipment

1 Computers 2 20,000 40
2 Computer printer 2 12,000 24
3 Telephones 4 2,000 8
4 Carpets 1 15,000 15
5 Electrical Fittings 25,000 25
Total
2,162
Farooq Flour Mill
Shahbaz Pur Road,Rahim Yar Khan
Estimated Cost of vehicles

( Rs. In '000' )
Per Unit Cost
Sr. no Description Units Total Cost (Rs)
(Rs)
1 Tractor 1 600 600
2 Shahzor Mazda 2 1,200 2,400
Total 3,000
Farooq Flour Mill
SCHEDULE OF PRE-PRODUCTION EXPENCES
( Rs. In '000' )
DESCRIPTION TOTAL AMOUNT

INCORPORATION FEES 400
CONSULTENCY FEES 120
LEGAL DOCUMENTATION 50
TRAVELLING EXPENCES 330
OTHER PRE- PRODUCTION EXPENCES 200
TOTAL 1,100
Farooq Flour Mill
Initial Net Working Capital
( Rs. In '000' )
A. Current Assets
1 Inventories
a) Raw Material (5% of raw material 20 days req) 43,355
b) Finished Goods -
c) Spares & Stores 342
TOTAL COST OF INVENTORIES 43,697

2 Advances and Deposits, & Prepayments 800
3 Accounts Receivables (0.05% of Sales) 25,126
4 Cash 1,000
Total Current Assets 70,623
B. Possible Current Liabilities:
Less: Bank Borrowing 70% of Inventories 30,588
Initial Net Working Capital 40,035

Farooq Flour Mill
Estimated Detailed Cost of Project
( Rs. In '000' )
Sr. no Description Total Cost (Rs)
1 Land 24,480
2 Building 7,410
3 Plant & Machinery 11,397
4 Furniture & Fixture 2,162
5 Vehicles 3,000
6 Pre-production Expences 1,100
Estimated Fixed Cost 49,549
Add Net Initial Net Working Capital 40,035
Total
89,584
Means of financing Rs(000)

Debt (50%) 44,792
Equity (50%) 44,792
Farooq Flour Mill
Production
Shifts / Day 3
Hours / Shift 8
Working Days / Annum 300
PRODUCTION CAPACITY (ANNUM) AT 100% CAPACITY Total
Flour 72% TONS 21,600

Meda / Suji 15% TONS 4,500
Bran 13% TONS 3,900
Total 30,000
SALES PRICE
Flour 72% RATE / KG 26
Meda / Suji 15% RATE / KG 34
Bran 13% RATE / KG 15
Farooq Flour Mill
YEAR 2010 2011 2012

CAPACITY UTILIZATION 65% 70% 80%
PRODUCTION IN M. TONS
Flour (72%) 14,040 15,120 17,280
MEDA / SUJI (15%) 2,925 3,150 3,600
BRAN (13%) 2,535 2,730 3,120
TOTAL 19,500 21,000 24,000
ADD: STOCK (OPENNING)
Flour (72%) 0 0 0
MEDA / SUJI (15%) 0 0 0
BRAN (13%) 0 0 0
TOTAL 0 0 0
AVAILABLE FOR SALE
Flour (72%) 14,040 15,120 17,280
MEDA / SUJI (15%) 2,925 3,150 3,600
BRAN (13%) 2,535 2,730 3,120
TOTAL 19,500 21,000 24,000
LESS STOCK (CLOSING)
Flour (72%) 0 0 0
MEDA / SUJI (15%) 0 0 0
BRAN (13%) 0 0 0
TOTAL 0 0 0
SALES IN METRIC TON
Flour (72%) 14,040 15,120 17,280
MEDA / SUJI (15%) 2,925 3,150 3,600
BRAN (13%) 2,535 2,730 3,120
TOTAL 19,500 21,000 24,000
SALES VALUE
Flour (72%) 365,040 393,120 449,280
MEDA / SUJI (15%) 99,450 107,100 122,400
BRAN (13%) 38,025 40,950 46,800
TOTAL 502,515 541,170 618,480
Farooq Flour Mill
RAW MATERIAL BUDGET AT 100% CAPACITY
( Rs. In '000' )
DESCRIPTION UNITS QUANTITIY RATE TOTAL

WHEAT TONS 29,000 23 667,000
TOTAL 667,000
YEAR 2010 2011 2012
CAPACITY UTILIZATION 65% 70% 80%

RAW MATERIAL 433,550 466,900 533,600
ADD: OPENING STOCKS 0 201 216
MATERIAL AVAILBLE FOR USE 433,550 467,101 533,816
LESS: CLOSING STOCK (20% OF

RAW MAT USED) 20 DAYS REQ.
86,710 93,380 106,720
RAW MATERIAL USED 346,840 373,721 427,096
Farooq Flour Mill
( Rs. In '000' )
FACTORY WAGES AND SALARIES

WAGES/ WAGES/
CETAGORY NO. SALARIES SALARIES
PER MONTH PER ANNUM
DIRECT LABOUR
SKILLED LABOUR 6 8,000 576
UN-SKILLED LABOUR 10 6,000 720
TOTAL 1,296
INDIRECT LABOUR
FACTORY MANAGER 1 25,000 300
MILLER 1 15,000 180
STORE KEEPER 2 6,000 144
PEONS/SWEEPERS/WATCHMAN 2 5,000 120
FITTERS 1 8,000 96
ELECTRICIAN 2 9,000 216
TOTAL 1,056
25 2,352
DIRECT LABOUR
Year 2,010 2,011 2,012

Basic Salary 1,296 1,335 1,375
Increment (3%) - 39 40
Fringe Benefits (25%) 324 334 344
Total 1,620 1,669 1,719
INDIRECT LABOUR
Year 2,010 2,011 2,012

Basic Salary 1,056 1,088 1,120
Increment (3%) - 32 33
Fringe Benefits (25%) 264 272 280
Total 1,320 1,360 1,400
Total 2,940 3,028 3,119

Farooq Flour Mill
Factory Overheads
Electricity Required 450KW
YEAR 2010 2011 2012

Capacity Utililaztion 65% 70% 80%
Variable Charges on Electricity 4,212 4,536 5,184
Fixed Charges on Electricity 450 450 450
STORES & SPARES
Plant & Machinery 3% 342 342 342
REPAIR & MAINTENANCCE
Building & Machinery 3% 564 564 564
INSURANCE
Building & Machinery 2% 376 376 376
YEAR 2010 2011 2012
Capacity Utililaztion 65% 70% 80%
Variable OH 4,212 4,536 5,184

Fixed OH 3,240 3,240 3,240
Total OH 7,452 7,776 8,424

Farooq Flour Mill
Depriciation
RATE
FIXED ASSETS COST TOTAL
(%)
Building 7,410 5% 371
Plant & Machinery 12,428 5% 621

.
Furnitre & Fixture 2,162 10% 216
Vhehic,es 3,000 10% 300
Total 1,508
AMORTIZATION
Pre-Production Expences 1350

Farooq Flour Mill
Office Payroll
SALARY / SALARY /
ADMINISTRATIVE STAFF NO.
MONTH ANNUM
MANAGING PARTNER 1 30,000 360

ACCOUNTANT 3 15,000 540
CLERICAL STAFF 1 8,000 96
PEON/MALI/SWEEPER 1 5,000 60
TOTAL 1,056
ADMINISTRATIVE EXPENCES 2010 2011 2012
ADMINISTRATIVE SALARIES 1056 1109 1164

ADD: INCREASE @ 5% PER ANNUM 53 55
ADD: FRINGE BENEFITS @ 30 % PER
ANNUM 317 333 349
TOTAL 1373 1495 1568

Farooq Flour Mill
ADMINISTRATIVE EXPENCES
( Rs. In '000' )
YEAR 2010 2011 2012
ADMINISTRATIVE SALARIES 1,373 1,495 1,568

TELEPHONE & TELEX 50 65 80
POSTAGE & STAMPS 10 15 20
PRINTING & STATIONARY 40 45 50
TRAVELING & CONVEYANCE 200 210 220
ENTERTAINMENT 100 110 120
OFFICE MAINTENANCE 40 45 50
OTHER EXPENCES 15 20 25
TOTAL 1,828 2,005 2,133

Farooq Flour Mill
MARKETING STAFF
( Rs. In '000' )
SALARY / SALARY /
MARKETING STAFF NO.
MONTH ANNUM
MARKETING MANAGER 1 30,000 360

SALES MAN 3 7,000 252
TOTAL 612
MAKETING STAFF EXPENCES 2010 2011 2012
SELLING SALARIES 612 643 675

ADD: INCREASE @ 5% PER ANNUM ---- 31 32
ADD: FRINGE BENEFITS @ 30 %
PER ANNUM 184 193 203
TOTAL 796 867 910

Farooq Flour Mill
Selling & Marketing Expences

( Rs. In '000' )
YEAR 2010 2011 2012

Selling Salaries 796 867 910
Transportaion Expences 1,200 1,320 1,452
Advertising Expences 30 32 34
Promotional Expences 25 30 35
Other 10 11 12
Total 2,061 2,260 2,443

Farooq Flour Mill
Loan Repayment Schdule
( Rs. In '000' )
Year Principal Interest Amount

0 44,792
1 4,479 8,063 40,313
2 4,479 7,256 35,834
3 4,479 6,450 31,354
4 4,479 5,644 26,875
5 4,479 4,838 22,396
6 4,479 4,031 17,917
7 4,479 3,225 13,438
8 4,479 2,419 8,958
9 4,479 1,613 4,479
10 4,479 806 0
Farooq Flour Mill
Income Statement
( Rs. In '000' )
Years ending September 30 : 2010 2011 2012
Sales 502,515 541,170 618,480

Less: COST OF SALES
Raw Material 433,550 466,900 533,600
Labor 2,940 3,028 3,119
Manufacturing Overheads 7,452 7,776 8,424
Total Cost of Goods Manufactured 443,942 477,705 545,143
opening inventory of finished goods - - -
Cost of goods available for sale 443,942 477,705 545,143
ending inventory of finished goods - - -
Cost of Sales 443,942 477,705 545,143
Gross Profit 58,573 63,465 73,337
OPERATING EXPENSES:
Administrative Expenses 1,828 2,005 2,133
Seling Expenses 2,061 2,260 2,443
Total Operating Expenses 3,889 4,265 4,576
Operating Profit 54,684 59,200 68,761
OTHER EXPENSES:
Financial Charges on:
Long Term Loan 8,063 7,256 6,450
Bank Borrowings -
Amortization of Pre-Production Expenses 450 450 450
Total Other Expenses 8,513 7,706 6,900
Profit Before Tax and Worker's Fund 46,171 51,494 61,861
Worker's Fund (5%) 2,309 2,575 3,093
Profit/(Loss) Before Tax 43,863 48,919 58,768
Tax @ 30% 13,159 14,676 17,630
Net Profit 30,704 34,244 41,137

Farooq Flour Mill
Cash Flow Statement

( Rs. In '000' )
End of
Operating Years
Construction
Years ending 30th September:
2009 2010 2011 2012
SOURCES OF FUNDS:
Operating Profits - 54,684 59,200 68,761

Add: Depreciation - 1,508 1,508 1,508
Total Funds from Operation - 56,192 60,709 70,269
Other Sources:
Long Term Loan 44,792 - - -
Bank Borrowings - - - -
Paid-Up Capital 44,792 - - -
Total Sources of Funds 89,584 56,192 60,709 70,269

APPLICATION OF FUNDS:
Investment in Fixed Assets 48,449 - - -
Financial Charges during Construction - - - -
Pre-Production Expenses 1,100 - - -
Repayment of:
Long Term Loan - - 4,479 4,479
Financial Charges On:
Long Term Loan - 8,063 7,256 6,450
PAYMENT OF:
Taxes - - 13,159 14,676
Dividends - - - -
Worker's Fund - - 2,309 2,575
Short Term Investment - 1,000 10000 30000
Increase in Current Assets (Other than Cash) 22,819 46,853 5,318 10,586
Total Application of Funds 72,368 55,916 42,521 68,765

Cash Surplus/(Deficit) 17,215 276 18,188 1,503
Cash at the Beginning of the Year - 17,215 17,491 35,679
Cash at the end of the year 17,215 17,491 35,679 37,183
Balance Sheet
( Rs. In '000' )
End of
Operating Years
Year ending 31st October Construction
2009 2010 2011 2012
ASSETS:
CURRENT ASSETS:
Cash and Bank Balance 17,215 17,491 35,679 37,183
Short Term Investment - 1,000 10,000 30,000
Accounts Receivable (10% of sales) - 25,126 27,059 30,924
Inventories:
Raw Material 21,678 43,355 46,690 53,360
Finished Goods - - - -
Stores & Spares 342 342 342 342
Advances, Deposits and Prepayments 800 850 900 950
Total Current Assets 40,035 88,164 120,670 152,759
FIXED ASSETS:
Fixed Assets at Cost 48,449 48,449 48,449 48,449
Accumulated Depreciation on Fixed Assets - 1,508 3,016 4,524
Fixed Assets Net 48,449 46,941 45,433 43,925
Intangibles 1,100 733 367 -
Total Assets 89,584 135,838 166,470 196,683
LIABILITIES AND EQUITY:
CURRENT LIABILITIES:
Taxes Payable - 13,159 14,676 17,630
Dividend Payable - - - -
Worker's Fund Payable - 2,309 2,575 3,093
Current Maturity of Long Term Debt - 4,479 4,479 4,479
Total Current Liabilities - 19,947 21,730 25,202
LONG TERM DEBTS:

Long Term Debt 44,792 40,313 35,834 31,354
Total Liabilites 44,792 80,206 79,293 81,759
EQUITY:
Paid-Up-capital 44,792 44,792 44,792 44,792
Retained Earnings - 10,840 42,385 70,132
Total Equity 44,792 55,632 87,177 114,924
Total Liabilities and Equity 89,584 135,838 166,470 196,683

Farooq Flour Mill
Ratios
Year 2010 2011 2012
Current Ratio 4.42 5.55 6.06
Quick Ratio 2.19 3.35 3.89

Debt Equity Ratio 3.72 0.85 0.45
Oprating Profit Ratio 10.88% 10.94% 11.12%
Gross Profit Ratio 11.66% 11.73% 11.86%
Net Profit Ratio 6.11% 6.33% 6.65%

Farooq Flour Mill
Shahbaz Pur Road, Rahim Yar
Khan
Cash Breakeven
Sales from operations

( At 80% Capacity )
( Rs. In '000' )
Variable
Items Fixed Cost Total cost
Cost
Raw Material 533,600 533,600
Labour 1,719 1,400 3,119
Administrative Expenses 2,133 2,133
Selling Expenses 2,443 2,443
Interest / Mark-Up Expenses 6,450 6,450
Worker's Participation Fund 3,093 3,093
Debt Payment 4,479 4,479
Tax 17,630 17,630
Total: 546,039 35,333 581,372
Sales from Operation 618,480
Fixed cost x Operatin

Break-Even Point: = Sales from Operation-Variable
cost Capacity
35,333 x 80%
Break-Even Point: =
618,480-546,039
Break-Even Point: = 39%

Farooq Flour Mill
Commercial Break Even
( At 65% Capacity )
( Rs. In '000' )
Variable
Fixed Cost Total Cost
Items Cost
Raw Material 433,550 - 433,550

Labor 2,940 2,940
Administrative & General
Expenses 1,828 1,828
Selling Expenses 2,061 2,061
Interest / Mark-Up Expenses 8,063 8,063
Amortization of Pre-
Production Expenses 367 367
Total: 442,763 13,498 456,261
Sales from Operation 502,515
Fixed cost x Operatin

Break-Even Point: = Sales from Operation-Variable
cost Capacity
Break-Even Point: = 13,498 x 65%

502,515-442,763
Break-Even Point: = 15%

Farooq Flour Mill Shahbaz
Pur Road, Rahim Yar Khan
Weighted Average Cost of Capital
("000") ("000")
Interest Rate After Tax

Nature of Fund Amount Total Interest
% Rate %
Long Term Loan 44,792 18 11 4,838
Paid - Up Capital 44,792 18 18 8,063
Total 89,584 12,900
Weighted Average Cost of Capital: 14%

Farooq Flour Mill
Internal Financial Rate Of Return
( Rs. In '000' )
Capital Operating Worker's Net Cash Net Cash Inflow
Years Depreciation Taxes
Outlay Profit Fund Return (Outflow)
- 72,368 - - - - - (72,368)
1 46,853 54,684 1,508 - - 56,192 9,338
2 5,318 59,200 1,508 2,309 13,159 60,709 39,923
3 10,586 68,761 1,508 2,575 14,676 70,269 42,433
4 - 68,761 1,508 3,093 17,630 70,269 49,545
5 - 68,761 1,508 3,093 17,630 70,269 49,545
6 - 68,761 1,508 3,093 17,630 70,269 49,545
7 - 68,761 1,508 3,093 17,630 70,269 49,545
8 - 68,761 1,508 3,093 17,630 70,269 49,545
9 - 68,761 1,508 3,093 17,630 70,269 49,545
10 - 68,761 1,508 3,093 17,630 70,269 49,545
11 516 69,277 992 3,093 17,630 70,269 49,029
12 - 69,277 992 3,093 17,630 70,269 49,545
13 - 69,277 992 3,093 17,630 70,269 49,545
14 - 69,277 992 3,093 17,630 70,269 49,545
15 (20,000) 69,277 992 6,186 35,261 28,822 7,376
115,641 35,699
Initial Investment
PVIFA =
Average cash inflows
115,641
PVIFA =
35,699
PVIFA = 3.24
IRR = 30%

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Farooq Flour Mill

Shahbaz Pur Road, Rahim Yar Khan

Estimated Cost of Land

Area in Cost/Marla Total Cost

2 Land Development ( 3% ) 320 1,500 480

3 Registration Charges (7.1428) 320 5,000 1,600

Estimated cost of Factory Building

2 First Flour ( 80 * 25 ) 2,000 800 1,600

3 Second Flour ( 80 * 25 ) 2,000 800 1,600

4 Third Flour ( 80 * 25 ) 350 800 280

Wheat Plant Forms ( 40 * 100 ) 4,000 75 300

Flour Godown 1,000 300 300

2 Boudary Wall 800 300 240

3 Office Gate 300 400 120

4 Labour Quarter 1,500 400 600

Estimated Costof Local Machinery

Total cost of Plant & Machinery 11,397

Estimated Cost of Imported Machinery

Estimated Cost of Furnture and Fixture

Sr.no Description Quantity Rate (Rs) Total Cost (Rs)

Furniture and Fixture

Required Office equipment

Estimated Cost of vehicles

2 Shahzor Mazda 2 1,200 2,400

SCHEDULE OF PRE-PRODUCTION EXPENCES

DESCRIPTION TOTAL AMOUNT

Initial Net Working Capital

a) Raw Material (5% of raw material 20 days req) 43,355

c) Spares & Stores 342

TOTAL COST OF INVENTORIES 43,697

B. Possible Current Liabilities:

Less: Bank Borrowing 70% of Inventories 30,588

Initial Net Working Capital 40,035

Estimated Detailed Cost of Project

Sr. no Description Total Cost (Rs)

Means of financing Rs(000)

PRODUCTION CAPACITY (ANNUM) AT 100% CAPACITY Total

Flour 72% TONS 21,600

YEAR 2010 2011 2012

RAW MATERIAL BUDGET AT 100% CAPACITY

DESCRIPTION UNITS QUANTITIY RATE TOTAL

YEAR 2010 2011 2012

CAPACITY UTILIZATION 65% 70% 80%

LESS: CLOSING STOCK (20% OF

FACTORY WAGES AND SALARIES

Year 2,010 2,011 2,012

Year 2,010 2,011 2,012

Total 2,940 3,028 3,119

YEAR 2010 2011 2012

Variable Charges on Electricity 4,212 4,536 5,184

Fixed Charges on Electricity 450 450 450

STORES & SPARES

Plant & Machinery 3% 342 342 342

REPAIR & MAINTENANCCE

Building & Machinery 3% 564 564 564

Building & Machinery 2% 376 376 376

YEAR 2010 2011 2012

Capacity Utililaztion 65% 70% 80%

Variable OH 4,212 4,536 5,184

Total OH 7,452 7,776 8,424

Building 7,410 5% 371

Plant & Machinery 12,428 5% 621

Vhehic,es 3,000 10% 300