MOHIT ENTERPRISES

DETAILED PROJECT REPORT

MUSTARD OIL UNIT

House No.AK – 816 Maharana Pratap Nagar Gwalior , MP - 474001

 TABLE OF CONTENTS

S No. Topic Page

Number
1. Project Summary 3
2. About the Product 4-5
3. Process Flow Chart 6-7
4. Economics of the Project 8-25
4.1. Basis & Presumptions 8-9
4.2. Premises/Infrastructure 9
4.3. Machinery & Equipment’s 10-11
4.4. Misc. Fixed Assets 12
4.5. Total Cost of Project 12
4.6. Means of Finance 12-13
4.7 Term Loan 13
4.8. Term Loan repayment & interest schedule 14
4.9. Salaries/Wages 14
4.10. Power Requirement 15
4.11. Depreciation Calculation 15
4.12. Repairs & Maintenance 15
4.13. Projections of Profitability Analysis 16
4.14. Projected Balance Sheet 17
4.15. Cash- Flow Statement 18
4.16. Key Ratio and Feasibility 19

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 1. PROJECT SUMMARY
1. Name of the proposed project : Mustard Oil Unit
2. Nature of proposed project : Partnership Firm
3. Proposed project capacity : 1,80,000 MT /annum

4. Raw material : Mustard Seed

5. Major product outputs : Mustard Oil
6. Total project cost : Rs. 314.00 Lakh
 Land development, building & : 110.00 Lakh
Civil Construction
 Machinery and equipment’s : Rs. 100.00 Lakh
 Miscellaneous Fixed Assets : Rs. 4.00 Lakh
 Working capital : Rs. 100 Lakh
8. Means of Finance
 Subsidy :

 Promoter’s contribution (min10%) : Rs. 58.00 Lakh

 Term loan : Rs. 156.0 Lakh

 Working Capital Requirement : Rs. 100.00 Lakh
9. Profit after Depreciation, Interest & Tax

 1styear : Rs. 28.82 Lakh

 2ndyear : Rs. 58.86 Lakh
 3rd year : Rs. 63.14 Lakh
 4th year : Rs. 74.34 Lakh
 5th year : Rs. 76.35 Lakh
 6th year : Rs. 85.48 Lakh
 7th year : Rs. 89.40 Lakh
 8th year : Rs. 91.49 Lakh
11. Average DSCR : 4.09
12. Term loan repayment : 7 Years

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2. ABOUT THE PRODUCT

PRODUCT INTRODUCTION:

Mustard oil is made from pressing the seeds of a mustard plant to produce spicy oil.
Mustard oil is popular in Eastern cooking, although some American chefs have begun
experimenting with the oil, which has a heat and distinctive flavour to it. Mustard
essential oil has been found to be a powerful antibacterial agent. Source found that
mustard essential oil effectively killed off common and harmful bacteria such as
salmonella, staph, listeria,

and even a certain type of yeast. It can also be used as an antifungal. Mustard oil
contains a compound that could be useful for reducing inflammation. Mustard Oil uses
are:

 As cooking Oil
 Treat Arthritis
 Soothe aches & Pains
 Relieves body pain

Benefits of Mustard Oil

1. Mustard essential oil has been found to be a powerful antibacterial agent. Source found
that mustard essential oil effectively killed off common and harmful bacteria such as
salmonella, staph, listeria, and even a certain type of yeast. It can also be used as an
antifungal.
2. Mustard oil is rich in monounsaturated fatty acids. Researchers have consistently
found that including monounsaturated fatty acids in the diet can reduce the risk of

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 cardiovascular disease.
3. Mustard oil contains a compound that could be useful for reducing inflammation: allyl
isothiocyanate.

MARKET POTENTIAL:

On the record, production of mustard seeds, a winter crop cultivated in the northern States was
very high as compared to last year. Rajasthan is the major producer contributing up to 47 per
cent of the domestic production, followed by Madhya Pradesh (11.44 per cent), Haryana (12
per cent) and Uttar Pradesh (10.41 per cent).
Consumption of mustard oil has grown about 5 percent per year for the past 40 years and
currently stands at approximately 2.3 million metric tons annually. Although consumption of
mustard oil is typically more prevalent in rural areas, total consumption is usually higher in
urban areas. Most mustard oil (around 90 percent) is used for cooking, and the rest is used for
pickling and consumption as raw oil (sareson-ka-thal, “oil of mustard”) directly on foods.

RAW MATERIAL DESCRIPTION:

Mustard seeds are required as raw material for the production of Mustard oil. Mustard seeds are
the small round seeds of various mustard plants. Mostly Black seeds are used for the production
of mustard oil.

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 BASIS AND PRESUMPTIONS

Assumptions Used

Capacity Utilization

It is assumed that post investment of loan funds into business, the business would reach its optimum
capacity in the following manner

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Sales Capacity of Business 40% 70% 75% 85% 90% 100% 100% 100%

Expenses Capacity
(Variable & Semi Variable) 80% 85% 90% 100% 100%

Estimated Sales

Particulars Current Year

Capacity Utilization 40%

Average Sales per Day Rs.81.13

In Projected Years, Sales are considered at the operational capacity tabulated above. Over the years the
current selling price is increased marginally as it is assumed that after our product is established in
the market, we will be able to command premium in the market

Estimated Expenses
Based on the working experience and market study, the Promoters have assumed that at 100%
operational capacity, following expenses would have to be incurred

Particulars Monthly Cost at current prices Rs.(In Lakhs)

Purchases (Stock, Raw Material, etc.)* Rs.1810.75
Building Rent Rs.0.06
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 Salary & Wages* Rs.2.40
Electricity, Fuel & Water* Rs.1.183
Repair & Maintenance Rs.0.067
Telephone/postage & Internet costs Rs.0.05
Advertising & Marketing Rs.0.067
Consumables, Spares, Stores, etc.* Rs.0.05
Other expenses Rs.0.033
Total Rs.1814.66
*These Expenses (50% of Salary) are considered to calculate Gross Profit margin

Current Year Period

For the Current Period, the projections worked out are for the balance period of 5 month(s)

Adjustment for Inflation

In Sales & Expenses, both, nominal adjustment for price increase due to inflation is made

PREMISES/INFRASTRUCTURE

The approximate total area required for complete factory setup is 3663 Sq. ft. for smooth
production including storage area. It is expected that the premises will be on lease taken from
Madhya Pradesh Industrial Development Corporation (MPIDC).

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MACHINERY & EQUIPMENTS

Machine Name Description Machine Image.

Heavy duty Oil Oil Expeller machine which is specially
Expeller designed to be used for Edible oil plant.
This machine can extract oil from the
most of seeds/nuts. Moreover it can
crush ground nut, linseeds, mustard
seeds, palm kernels, seeds, castor,
neem, sun flower seeds etc.
Heavy duty round It is used to cook the mustard seeds
cooking/feeding initially prior to oil extraction in order
kettle to enhance oil yield.

Filter press It’s an array of filtration membrane

18"×18" - 18 taps which are arranged such that when the
with Filter cloth, oil is forced through this array via a
oil collection tray, pump it gets filtered.
complete

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with all
accessories oil
pump.
Material These Equipment’s are used for
handling and material handling. Other equipment’s
other like water pumps, weighing machine,
Equipments pipelines, belts, other spare parts etc
are also used.

Machine Unit Rate Price

Heavy duty Oil Expeller chamber size 30"× 5.5" 6 8,00,000 48,00,000
crushing capacity Up to
250*kg/hr with oil collection tank
Heavy duty round cooking/feeding kettle 80 55000 44,00,000
Filter press 18"×18" - 18 taps with Filtercloth, 2 140000 280000
oil collection tray, complete
With all accessories oil pump.
Essential spare parts worm set cage set filter 1 60000 60000
Cloth
Crompton electric motor 3 phase 20HP with 1 90000 90000
L&T starter
Acce. pulley, v belts, pipelines, pipe - 120000 120000
fittings,valves,etc.
Material handling and other equipment’s (Bins, - 250000 250000
Trolley, weighing machine, etc.)

Note: Total Machinery cost shall be Rs. 100.00 lakh including equipment’s but excluding
GST and Transportation Cost.

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MISCELLANEOUS FIXED ASSETS
 Water Supply Arrangements
 Computers & Printers

TOTAL COST OF PROJECT

COST OF PROJECT
(in Lacs)

PARTICULARS Amount

Land & Building 110.00

Plant & Machinery 100.00
Miscellaneous Assets 4.00
Working capital 100.00
Total 314.00

MEANS OF FINANCE

MEANS OF FINANCE

PARTICULARS AMOUNT
Own Contribution 58.00
Term Loan 156.00
Working Capital (Own Fund) 100.00
Total 169.00

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TERM LOAN: Term loan of Rs. 156.00 Lakh is required for project cost
of Rs. 314.00 Lakh

TERM LOAN REPAYMENT& INTEREST SCHEDULE Term

Loan Amount Rs.1,56,00,000.00

Year Interest Charged Total Payment to Principal Repaid Closing Loans O/s
bank
1st Year 12,87,325 18,87,325 6,00,000 1,50,00,000
2nd Year 15,35,950 39,35,950 24,00,000 1,26,00,000
3rd Year 12,70,750 36,70,750 24,00,000 1,02,00,000
4th Year 10,05,550 34,05,550 24,00,000 78,00,000
5th Year 7,40,350 31,40,350 24,00,000 54,00,000
6th Year 4,75,150 28,75,150 24,00,000 30,00,000
7th Year 2,09,950 26,09,950 24,00,000 6,00,000
8th Year 11,050 6,11,050 6,00,000 0.00

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SALARY & WAGES

BREAK UP OF LABOUR CHARGES

Particulars Wages No of Total

Rs. per Month Employees Salary
Plant Manager 30,000 1 30,000
Accountant 18,000 1 18,000
Supporting Staff 12,000 2 24,000
Peon 9,000 1 9,000
Supervisor 20,000 1 20,000
Skilled Worker 15,000 4 60,000
Unskilled Worker 12,000 6 72,000
Total salary per month 2,33,000
Total annual labour charges (in lacs) 27.96

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 POWER REQUIREMENT - 150KW

DEPRECIATION SCHEDULE

Assets to be purchased Depreciation Rate

Land 0%
Building and Infrastructure 10%
Machinery and Equipment 15%
Computers, Printers etc 40%
Other Initial Expenditure 15%

REPAIR & MAINTENANCE: Repair & Maintenance is 0.05% of Gross Sale.

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