PROJECT PROPOSAL FOR

DROPLINE OD
(TO SUPPORT WORKING CAPITAL FOR BUSINESS
DEVELOPMENT)

Prepared for :-

M/s. S.H. GROCERY SHOP

NEW COLONY, ZUNHEBOTO - 798620
NAGALAND

Promoter/Applicant - MUGHAKALI G. ACHUMI

 PROJECT AT A GLANCE

1. Name of the Project/concern : M/s. S. H. GROCERY SHOP

Proposed for : Proposal for Dropline OD (to support
working capital for business development)
at New Colony, Zunheboto Town

2. Constitution : Sole Proprietorship

3. Name of the Proprietor : MUGHAKALI G. ACHUMI

H.NO140, NORTH POINT COLONY,
ZUNHEBOTO -798620, NAGALAND

4. Type of Business : Retail Trading (Grocery Shop)

5. Cost of the Project : Rs. in lacs

a) Furniture & Furnishing Already acquired out of own resources
b) Equipment etc. Already acquired out of own resources
c) Margin Money for WC 3.00
Total 3.00

6. Means of Finance : Rs. in lacs

a) Promoter's Contribution 1.00
b) Dropline OD from Bank 2.00
Total 3.00

7. Financial Analysis :
Debt Equity Ratio 2.00
DSCR (Average) 6.47
BEP (Average) 18.54%

8. Project Consultant : Sukanta Dey & Associates (M.No.056743)

Chartered Accountants [FRN324548E]

9. Recommendation : On considering the various aspects of the project

both financially and technically, it can be seen that
the project will be a great success. Further, it is
certified that the project is technically feasible and
economically viable, hence is recommended for
immediate implementation.
COST OF THE PROJECT & MEANS OF FINANCE
A. COST OF THE PROJECT

Sl. No. Particulars Amount (Rs.)

1 Shop Furniture & Furnishing Existing

i) Counter with Showcases 25000.00
ii) Wooden Racks 25000.00

2 Equipments Existing
i) Weighing Scale 5000.00
ii) Freeze with Stablizer - 1 15000.00

3 Margin Money for Working Capital 300000.00

Total 300000.00

B. MEANS OF FINANCE

Sl.No. Sources Amount (Rs.)

1 Promoter's Contribution 33% 100000.00
2 Dropline WC 67% 200000.00
Total 300000.00
STATEMENT OF OPERATIONAL EXPENSES (ANNUAL)
1 PURCHASE OF INVENTORIES

S. No. Particulars Amount (Rs.)

i) Purchase of grocery items (2 months) 300000.00
[As per Quotation]
Total 300000.00

2 MANPOWER (EMPLOYEES REMUNERATION)

S. No. Particulars of staff No. Scale of Pay Amount (Rs.)

i) Manager Will be managed by the promoter herself
ii) Salesman 1 3000.00 36000.00
Total 36000.00

3 ADMINISTRATIVE & OVERHEAD EXPENSES

Sl. No. Particulars Amount (Rs.

i) Packing materials & consumables 3000.00
ii) License fee & general expenses 3000.00
iii) Repairs & maintenance 1000.00
iv) Telephone 3000.00
v) Travelling & transportation 6000.00
vi) Refreshment 1000.00
vii) Water & electricity 3000.00
viii) Rent 60000.00
ix) Miscellaneous expenses 3000.00
Total 83000.00

TOTAL OPERATIONAL EXPENSES (PER ANNUM)

Amount (Rs.)
1 Purchase of inventories 1800000.00
2 Staff salaries 36000.00
3 Administrative & overhead expenses 83000.00
Total 1919000.00

MARGIN MONEY REQUIRED FOR WORKING CAPITAL

1 Stock of Grocery items (2 Months) 300000.00
LOAN REPAYMENT SCHEDULE & AVG. CALCULATION OF INTEREST
1 Term Loan 200000.00
2 Repayment period - 5 years
(Rs. in lacs)
Year Month Opening Principal Interest Interest Total Closing
Balance Repayment Repayment Monthly Balance
Repayment
Month I 2.000 0.000 0.021 0.021 0.021 2.000
Month II 2.000 0.024 0.021 0.021 0.045 1.976
Month III 1.976 0.025 0.020 0.020 0.045 1.951
Month IV 1.951 0.025 0.020 0.020 0.045 1.926
1st year Month V 1.926 0.025 0.020 0.020 0.045 1.901
Month VI 1.901 0.025 0.020 0.020 0.045 1.876
Month VII 1.876 0.026 0.019 0.019 0.045 1.850
Month VIII 1.850 0.026 0.019 0.019 0.045 1.824
Month IX 1.824 0.026 0.019 0.019 0.045 1.798
Month X 1.798 0.026 0.019 0.019 0.045 1.772
Month XI 1.772 0.027 0.018 0.018 0.045 1.745
Month XII 1.745 0.027 0.018 0.018 0.045 1.718
Total 0.2819 0.2337 0.2337 0.5157
Month I 1.718 0.027 0.018 0.018 0.045 1.691
Month II 1.691 0.028 0.017 0.017 0.045 1.663
Month III 1.663 0.028 0.017 0.017 0.045 1.635
Month IV 1.635 0.028 0.017 0.017 0.045 1.607
2nd year Month V 1.607 0.028 0.017 0.017 0.045 1.579
Month VI 1.579 0.029 0.016 0.016 0.045 1.550
Month VII 1.550 0.029 0.016 0.016 0.045 1.521
Month VIII 1.521 0.029 0.016 0.016 0.045 1.492
Month IX 1.492 0.030 0.015 0.015 0.045 1.462
Month X 1.462 0.030 0.015 0.015 0.045 1.433
Month XI 1.433 0.030 0.015 0.015 0.045 1.402
Month XII 1.402 0.031 0.014 0.014 0.045 1.372
Total 0.3462 0.1938 0.1938 0.540
Month I 1.372 0.031 0.014 0.014 0.045 1.341
Month II 1.341 0.031 0.014 0.014 0.045 1.310
Month III 1.310 0.031 0.014 0.014 0.045 1.278
Month IV 1.278 0.032 0.013 0.013 0.045 1.247
3rd year Month V 1.247 0.032 0.013 0.013 0.045 1.215
Month VI 1.215 0.032 0.013 0.013 0.045 1.182
Month VII 1.182 0.033 0.012 0.012 0.045 1.149
Month VIII 1.149 0.033 0.012 0.012 0.045 1.116
Month IX 1.116 0.033 0.012 0.012 0.045 1.083
Month X 1.083 0.034 0.011 0.011 0.045 1.049
Month XI 1.049 0.034 0.011 0.011 0.045 1.015
Month XII 1.015 0.035 0.010 0.010 0.045 0.980
Total 0.3917 0.1483 0.1483 0.540
 Month I 0.980 0.035 0.010 0.010 0.045 0.945
Month II 0.945 0.035 0.010 0.010 0.045 0.910
Month III 0.910 0.036 0.009 0.009 0.045 0.875
Month IV 0.875 0.036 0.009 0.009 0.045 0.839
4th year Month V 0.839 0.036 0.009 0.009 0.045 0.802
Month VI 0.802 0.037 0.008 0.008 0.045 0.766
Month VII 0.766 0.037 0.008 0.008 0.045 0.728
Month VIII 0.728 0.037 0.008 0.008 0.045 0.691
Month IX 0.691 0.038 0.007 0.007 0.045 0.653
Month X 0.653 0.038 0.007 0.007 0.045 0.615
Month XI 0.615 0.039 0.006 0.006 0.045 0.576
Month XII 0.576 0.039 0.006 0.006 0.045 0.537
Total 0.4431 0.0969 0.0969 0.540
Month I 0.537 0.039 0.006 0.006 0.045 0.498
Month II 0.498 0.040 0.005 0.005 0.045 0.458
Month III 0.458 0.040 0.005 0.005 0.045 0.418
Month IV 0.418 0.041 0.004 0.004 0.045 0.377
5th year Month V 0.377 0.041 0.004 0.004 0.045 0.336
Month VI 0.336 0.042 0.003 0.003 0.045 0.294
Month VII 0.294 0.042 0.003 0.003 0.045 0.252
Month VIII 0.252 0.042 0.003 0.003 0.045 0.210
Month IX 0.210 0.043 0.002 0.002 0.045 0.167
Month X 0.167 0.043 0.002 0.002 0.045 0.124
Month XI 0.124 0.044 0.001 0.001 0.045 0.080
Month XII 0.080 0.080 0.001 0.001 0.081 0.000
Total 0.5371 0.0388 0.0388 0.576
PROJECTED PROFIT & LOSS ACCOUNT
(Rs. in lacs)
Sl.No Particulars Financial projection
1st year 2nd year 3rd year 4th year 5th year
1 Sales 22.23 23.34 24.74 26.47 28.59
Total 22.23 23.34 24.74 26.47 28.59
2 Cost of operation
Purchase of grocery & daily needs 18.00 18.90 20.03 21.44 23.15
Additional purchase for inventory 2.00
Staff salaries 0.36 0.38 0.40 0.42 0.44
Packing materials & consumables 0.03 0.04 0.05 0.06 0.07
License fee & general exp 0.03 0.04 0.05 0.06 0.07
Repairs & maintenance 0.01 0.02 0.03 0.04 0.05
Telephone charges 0.03 0.04 0.05 0.06 0.07
Travelling expenses 0.06 0.07 0.08 0.09 0.10
Refreshment 0.01 0.02 0.03 0.04 0.05
Water & electricity 0.03 0.04 0.05 0.06 0.07
Rent 0.60 0.60 0.60 0.60 0.60
Miscellaneous expenses 0.03 0.04 0.05 0.06 0.07
21.19 20.19 21.42 22.92 24.74
Add. Opening stock 1.00 3.00 3.15 3.31 3.47
22.19 23.19 24.57 26.23 28.21
Less : Closing Stock 3.00 3.15 3.31 3.47 3.65
19.19 20.04 21.26 22.76 24.57
3 Gorss profit 3.04 3.30 3.48 3.72 4.03
Depreciation (WDV) 0.08 0.07 0.06 0.05 0.05
Interest on Term Loan 0.23 0.19 0.15 0.10 0.04
4 Net profit before tax 2.73 3.04 3.27 3.56 3.94
Less: Income Tax
5 Net profit c/f to B/Sheet 2.73 3.04 3.27 3.56 3.94
Add. Depreciation 0.08 0.07 0.06 0.05 0.05
6 Cash Accruals 2.81 3.11 3.33 3.62 3.99
PROJECTED BALANCE SHEET
(Rs. in lacs)
Financial projection
Particulars
1st year 2nd year 3rd year 4th year 5th year
LIABILITIES
CAPITAL A/c.
As per last A/c. 1.00 2.93 3.57 4.23 5.00
Add. Fresh capital 1.00
Add. Net Profit 2.73 3.04 3.27 3.56 3.94
4.73 5.97 6.83 7.80 8.94
Less : Drawings 1.80 2.40 2.60 2.80 3.00
2.93 3.57 4.23 5.00 5.94
SECURED LOAN
Term Loan from Bank 2.00 1.72 1.37 0.98 0.54
Add. Interest 0.23 0.19 0.15 0.10 0.04
2.23 1.91 1.52 1.08 0.58
Less : Repayment 0.52 0.54 0.54 0.54 0.58
1.72 1.37 0.98 0.54 0.00
CURRENT LIABILITIES
Sundry Creditors 0.10 0.12 0.15 0.17 0.20
TOTAL 4.74 5.06 5.36 5.71 6.14
ASSETS
Fixed Assets
Furniture & Furnishing
As per last A/c. 0.50 0.45 0.41 0.36 0.33
Addition for the year 0.00
0.50 0.45 0.41 0.36 0.33
Less : Depreciation @10% 0.05 0.05 0.04 0.04 0.03
0.45 0.41 0.36 0.33 0.30
Misc. Fixed Assets
As per last A/c. 0.20 0.17 0.14 0.12 0.10
Addition for the year 0.00
0.20 0.17 0.14 0.12 0.10
Less : Depreciation @15% 0.03 0.03 0.02 0.02 0.02
0.17 0.14 0.12 0.10 0.09
CURRENT ASSETS
Inventories 3.00 3.15 3.31 3.47 3.65
Receivables 0.50 0.60 0.70 0.80 0.90
Loan & advances 0.10 0.15 0.20 0.25 0.30
Cash & Bank Balance 0.52 0.61 0.67 0.75 0.91
TOTAL 4.74 5.06 5.36 5.71 6.14
DEBT SERVICE COVERATE RATIO (DSCR)

Sl.No Particulars Financial projection

1st year 2nd year 3rd year 4th year 5th year

1 Net Profit 2.73 3.04 3.27 3.56 3.94

2 Depreciation 0.08 0.07 0.06 0.05 0.05
3 Interest on Term Loan 0.23 0.19 0.15 0.10 0.04

Total fund available for Debt Service 3.04 3.30 3.48 3.72 4.03

1 Interest on term loan 0.23 0.19 0.15 0.10 0.04

2 Installment 0.28 0.35 0.39 0.44 0.54

Total installment & interest 0.52 0.54 0.54 0.54 0.58

DSCR 5.90 6.12 6.44 6.88 6.99

Average DSCR 6.47
CASH FLOW STATEMENT
(Rs. in lacs)
Particulars Financial projection
1st year 2nd year 3rd year 4th year 5th year

INFLOWS
Increase in capital 1.00
Net Profit 2.73 3.04 3.27 3.56 3.94
Depreciation 0.08 0.07 0.06 0.05 0.05
Increase in Bank Borrowings 2.00
Increase in current liabilities 0.10 0.02 0.03 0.02 0.03
TOTAL 5.91 3.13 3.36 3.64 4.02

OUT FLOWS
Increase in fixed assets 0.00
Increase in current assets 2.60 0.30 0.31 0.32 0.32
Drawings 1.80 2.40 2.60 2.80 3.00
Principal repayment 0.28 0.35 0.39 0.44 0.54
Decrease in current liabilities 1.00

TOTAL 5.68 3.05 3.30 3.56 3.86

Opening Balance 0.30 0.52 0.61 0.67 0.75

Surplus 0.22 0.08 0.06 0.08 0.16
Closing Balance 0.52 0.61 0.67 0.75 0.91
BREAK EVEN POINT

FIXED COST
[Rs.in lacs]
Particulars Financial projection
1st year 2nd year 3rd year 4th year 5th year

1 Salaries to staffs (40%) 0.14 0.15 0.16 0.17 0.18

2 Other Admn. Exp (40%) 0.32 0.35 0.38 0.40 0.43
3 Depreciation 0.08 0.07 0.06 0.05 0.05
4 Interest on Term Loan 0.23 0.19 0.15 0.10 0.04

Total 0.78 0.76 0.75 0.72 0.69

BEP Fixed Cost x 100 77.77 76.35 74.53 72.25 69.43

Fixed Cost + Net Profit 3.50 3.80 4.01 4.29 4.63

Break-Even Point 22.20% 20.08% 18.57% 16.85% 14.98%

Average BEP 18.54%