BUSINESS PLAN

Commercial Layer Farming

MARCH 6, 2018

SUBMITTTED BY

Upakar Poultry & Breeding Farm

Madi Nagarpalika Ward No-7, Chitawan

Bagmati Province
Table of contents

1. Brief Summary
2. Objective, Business aspect and Major strategies
3. Past Work Implementation & Existing Business
4. Projected Plans
5. Market Aspect
6. Management Aspect
7. Environmental & Social Aspect
8. Financial Aspect
9. Existing government policy and rules in existing Business
10. Project area and infrastructure
11. Conclusion and recommendation

2
Annexes

Sources of Finance
Fixed Asset Investment
Annual Operatives
Sales Revenue
Estimated Working Capital
Annual Cost Estimate
Projected Profit & Loss Account
Cash Flow Statement
Projected Balance Sheet
Break Even Analysis
Payback Period

3
 Financial Summary
1. Name of Project : Upakar Poultry and Breeding Farm
a. Project Area : Madi Nagarpalika ward no-7 Chitawan Nepal

2. Type of Project : Layer Poultry Farm

3. Employment : 8
4`. Working Days : 365

1. Total Project Cost : 48,557,856

Fixed Capital : 24,967,500
Working Capital : 23,590,356

2. Bank Loan : 35,000,000

Fixed Capital : 16,127,715
Working Capital : 18,872,285

3. Equity Finance : 13,557,856

Fixed Capital : 8,839,785
Working Capital : 4,718,071

4. Sales Revenue : 50,662,500

5. Operating Cost :(initial Year) 19,564,946
6. Net Profit (1st year) : (866,225)
7. Break Even Point(%): 27%
8. NPV 17,477,728
9. IRR 26%
10. ROI (Average) 13%
11. ROE (Average) 45%
12. Payback Period (Years) 4.23 Year
13. BCR ( Average) 1.49

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1. Brief Summary

Objective, Business aspect and Major strategies

In Nepal, more than 65% of people depend upon agriculture. Contribution of agricultural sector
in Gross Domestic product (GDP) of Nepal is 33%. Among them contribution of livestock sector
in total GDP is 26.8% and poultry sub sector within livestock contributes 8% of Agriculture Gross
Domestic product (AGDP) and Indigenous poultry is widely prevalent which contributes almost
55% of total poultry population. POULTRY INDUSTRY is one of the most dynamic and fastest
expanding sectors in Nepalese Agricultural Economy.

Poultry birds are raised for two major purposes - production of eggs and chicken meat. Egg laying
birds are called Layers and Broilers are those reared for meat production. Nepal Commercial
Poultry Survey conducted by CBS recently disclosed that there are 60826880 commercially
grown poultry birds (broiler, layers, parents and others) in the country. From these birds the
country produces some 114058 mt of meat and 1,20,21,66 thousand eggs.

Thus, the per person chicken meat production is about 4.1kg per annum and egg production 43.7
units per annum. The growth of poultry sector has increased employment opportunities
contributing in revenue to National Economy. Investments are being done in raising commercial
layers for eggs.

Importance of Poultry

Poultry products like eggs & chicken are being widely consumed food items in Nepal, after the
introduction of improved breeds of layer and broiler birds in the 50s. There is no precise information
of the history of raising chicken as a commercial entity. It is, however, believed to be in practice for
centuries. Raising birds in the backyards of a house is a traditional occupation common in Nepal
since time unknown.

Lately, chicken and egg occupy major shares among meat products in Nepal. And, these
commodities are becoming popular both in cities and villages, and are preferred by peoples of all
ages, ethnic groups and religion. Poultry rising has become a commercial entity with the soaring
demand for its meat and eggs in urban, semi-urban and industrial areas giving more opportunities
for its promoters. Poultry product is one of the major sources of protein in Nepalese diet. However,
meat and egg consumption in Nepal appears to be one of the lowest in world standards due to low
purchasing power of the consumers. Despite meat is being an expensive food item its demand has
been increasing constantly in the areas where rapid economic activities are taking place.

Lately, chicken is becoming very popular, because of low cholesterol contents and is delicious in
taste. It is of high nutritional value and is easily digestible. The protein-content, in general, is higher
and fat-content less than in most of the other red meat. During last few years, the price of mutton is
soaring up, as these animals are difficult to maintain in the vicinity of the urban areas, due to absence
of grazing, importance of the poultry farming is also reflected by the fact that a sizeable number of
families are directly involved in commercial poultry production in varying scales and sizes. The
commercial poultry are contributing over 80% in total egg & poultry meat production in the country.

5
 Keeping up with above facts and reality, the proprietor of the firm decided to purchase a well
establish Layer poultry with an objective of producing commercial eggs. The company is rearing
layers in its farm Madi Nagarpalika, Chitawan. Strict bio-security measures have been
employed at each and every level to produce quality eggs. This has resulted in good reputation
of firm’s eggs among the consumers.

Existing business and experience of past work implementation

This project has been owned by Mr. Keshav Prasad Duwadi and team with an objective to
enhance this project from current capacity. The demand of poultry products in local community
and nearby areas is ever growing. The supply to meet the demand is not fulfilled by local level.
Production of poultry products in large scale is negligible. The growing restaurant and restaurant
culture, growing population and awareness for use of poultry products for nutrition are major
factors to support the expansion of project.

The poultry farm currently built in the areas of around one 15 Kattha 9 Dhur land at Madi. With
the well-built structure and its location, the farm is already one of the best in the area. Currently
running with the capacity of 12000 birds, Production in large scale and efficient supply, the sales
price has been kept reasonable, that have raised the demand of product.

Currently, the firm plans to expand its capacity from 18000 birds, through converting the
existing firm to modern poultry firm.

The purpose of the business plan is to serve as a motivation document to source the required
funding for Poultry farm.

The business plan shall also be instrumental in the following ways:

• To further understand the project

• To understand the macroeconomic factors affecting the project
• To understand the microeconomic factors affecting the project
• To understand the industry that the project will operate in
• To understand the dynamics of the market
• To draw up a SWOT analysis and devise a vision and mission for the project
• To develop strategic objectives and strategies for the project
• To improve the performance of the project
• To focus on a profitable activities and customers

Future Planning

Mr. Duwadi has been involving in poultry rising since two decade and aims to sell eggs in locally and
Madi bazar with affordable price in the coming days. In view of its primary being an agrarian society and
of its urgency of catching up the nation in industrial development, poultry is essential business for the
economic growth of the country. Selling eggs in mentioned markets is the main target of different
entrepreneur involved in this field. The launch such items is feasible as required precondition such as
client network; financial sector development and other necessities already exist. Currently the firm has
raising 13000 layers birds and wants to increase its numbers up to 18000.
6
The firm aims to increase its egg selling capacity up to Rs. 30398 thousand in 1st year to 70465
thousand 5th year. However, after gaining expertise in poultry unit it will start to sell such items in the
adjoining market also. For the purpose it has to purchase more chicks from reputed suppliers and
producers. So to achieve this goal, it is looking forward for investment in the project. It is expected that
the project needs Rs. 35000 thousand loans from the financial institution. Rest of the total project cost
will be equity participation. The firm is located in the prime location of the district. It has already permitted
license to perform its transaction.

The total Project cost will be Rs. thousand 48,558 thousand including fixed assets investment of
Rs. 24,968 thousand and working capital of Rs. 23,590 thousand at 100% sales utilization. It is
expecting the loan of Rs. 35000 thousand (Rs. 16,128 & Rs. 18,872 as fixed and working capital)
from financial institution. Rest will be the equity participation.

7
2.0 Objective, Business aspect and Major strategies

The goals in the business plan are the specific, measurable “things” the project will achieve with its small
farm. Short-term goals are defined as those that the firm will complete within one year. Long-term goals
are those that take longer than one year to complete.

SMART Goals are:

• Specific
• Measurable
• Attainable
• Rewarding, and have a Timeline

This is where the business plan gets to looking forward. The project is going to formulate its farm strategy
from now into the next five years or so.

• The project is sure that its farm plan fits into the general market in terms of supply and
demand. Investigate and analyse trends, identify competitors, and define buyers.
• SWOT Analysis: This is an analytical tool that can be used in making decisions. As a
business, analyse its internal strengths and weaknesses. Then look externally at what
opportunities and threats exist - competitors, new markets, government regulations,
economic conditions, and so forth.
• It will create alternative strategies. Looking at the information it has gleaned and the analysis
it just did, think through options for farm strategy. The project will not rely on price alone.
• Economies of scale are challenging on the small farm level and will not jump to one
conclusion immediately. Really spend some time fleshing out the specifics of some of the
strategies and looking at their advantages and disadvantages. Try to find options that
combine internal strengths with opportunities in the external environment. It will look at all
our strategies, and then reread its mission statement. The ideal farm plan will fit project
mission best.
• The project will write an implementation plan. This is where we write the plans that will make
its new strategy happen.

The main strategy of this firm is to sell quality eggs in competitive price. It is looking forward to implement
such a strategy that the product could be selling with low margin in initial year of production and then
after accelerate the sales continuously.

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3. Work Implementation & Existing Business

Currently, the firm is involved in layer chicken raising and producing eggs however the proprietor of this
firm has a long experience to deal with all aspect of the poultry such as layer rising and egg distribution.
This firm has registered in 2079 and the entrepreneur of this project is familiar and experienced with such
type of project due to his attachment with poultry business in the past.

This Business is registered in concern authority. The firm has been selling eggs and culling birds and
planning to increase laying birds up to 18000 numbers. The project is not newer one in market of the
district.

Current ownership & business control

Mr. Keshav Prasad Duwadi is the one of the owner and shareholder of this firm. The project has been
running in his leadership. A qualified team members headed by Mr. Duwadi has been successfully
running the business from its establishment. The project has been haring indirect & direct labor on
contract basis.

Current status of related Industry & Business

Chicken and eggs are the main food items of the people of all ages. Due to trust of the people and the
person from related field, the products of this project are easily sales in the market.

Existing Products & Sales

The main existing product is eggs and birds. These are selling in Madi bazaar as well as in locally.

Current Status of Business Operation

The business is running successfully and there is no problem to operate this business due to experience
owner and qualified staffs and workers.

9
4. Projected Plans

Technical Aspect

The project is located in Madi-7 Chitawan. The site has all infrastructures such as black toped road,
regular water supply, transportation facilities, and accessible market for purchasing material related with
the poultry firm. The project is located in the heart of the bazar. The purchasing material such as chicks,
feeds, are easily available in local market.

Technical Feasibility: This would briefly include:-

• Suitability of climate and potentiality of the area
• Availability of inputs such as chicks, feed, medicines etc.
• Technical norms
• Infrastructure available for veterinary aid, marketing, training and experience of the beneficiary.

Poultry Housing
• Well raised land for poultry sheds should be selected. Land with hard rock is more suitable.
Provide separate sheds for growers and layers.
• Ensure adequate facility for water, electricity, approach road, supply of chicks, feed, veterinary
aid and nearness to market for sale of cull birds and eggs.
• Obtain training/experience in layer farming before starting a farm. You should be prepared to
stay on the farm and have constant supervision.
• Provide adequate floor space per bird.
• Construct sheds in such a way that the end walls face East-West direction and the side walls
face North South direction, so that rain water will not enter the sheds.
• Provide strong roof and hard flooring. Raise plinth of the shed at least one feet above the outside
ground level.
• Provide 3 to 4 feet overhang of the roof to avoid entry of rainwater inside the shed.
• Provide at least 50 feet distance between two sheds in the same sector and about 150 ft between
growing and laying sector.
• Provide adequate light and ventilation and comfortable housing conditions during all seasons
(cool in summer and warm in winter).
• Construct sheds in such a way that predators (cats/dogs/snakes) will not enter the shed. Avoid
entry of rats by constructing rat proof civil structures.
• Keep the shed clean and free from flies/mosquitoes etc.
• After every batch of growers/culled birds is disposed of, the dirty litter material and manure should
be removed, walls and floors should be cleaned, white washed with lime and disinfected with
0.5% Malathion or DDT insecticide spray.
• If deep litter system is followed, always use dry and clean litter material (sawdust, paddy husk,
etc.). Spread 4" layer of litter on the floor, keep clean/disinfect brooding, feeding and watering
equipment and then introduce chicks in the house.

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Poultry Equipment

Use scientifically designed cages and equipment for brooding, feeding and watering purposes. BI
specifications for equipment are available. A good design can be shown and manufactured locally, so
that cost can be reduced.

Chicks

• Purchase improved strain of one day old healthy egger type chicks from a reputed hatchery.
Usually 2- 5% extra chicks are supplied.
• If cages are used for housing of birds ensure proper cage space i.e. half of the recommended
floor space on deep litter.
• Clean, wash and disinfect all equipment with 0.5% Malathion spray after every batch of birds is
disposed of.
Feeding

• Use high quality balanced feeds. Starter feed, grower feed formulae and specifications are
available. With proper knowledge/ experience, the feed can be prepared on the farm.
• Store the feed in clean, dry, well ventilated room. A wet feed may bring fungus infection.
• Use properly designed feeders and control the rats to avoid feed wastage. Provide adequate
feeding space per bird. More space is required as the bird grows in age.

Watering of Bird

• Always give fresh and clean drinking water. Water should be always available at birds.
• Use properly designed watering equipment. Provide adequate watering space per bird
• Always keep water-pots clean. Avoid birds entering inside pots.
• Provide cool water during summer. Store the water in tanks that are not exposed to hot sun in
summer.
•
Disease Prevention/Control

• Clean sanitary conditions of poultry sheds and equipment, balanced feed, fresh clean water,
healthy chicks are essential to prevent diseases.
• Avoid entry of visitors to farm, especially inside the sheds. If visitors come, ask them to dip their
feet in a disinfectant solution, wash and clean hands and to wear apron/boots provided by the
farm.
• Use proper vaccination schedule

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5. Strategies

Long Term

• Expansion and diversification through the formation of strategic relationships and

strengthening relationships with strategic alliances. This will be aimed at increasing
the existing targeted production. Diversification will focus at moving into the broiler and
day old chick industry
• Enter new markets such as the export market
• Focus on competitiveness by striving to achieve the desired positioning in the market
• Focus on customer intimacy and process efficiency
• Focus on niche markets
• Focus on quality
• Grow the market share of the project by understanding the needs and expectations
of the customers better than the competitors

Short Term

• Formalize the organizational structure

• Standardization of processes and procedures
• Training and development of staff

Financial

• Enhance the profitability of the business by setting a sales mix that results in the most
profitable contribution margin
• Minimize operating expenses by monitoring against the budget on a weekly and
monthly basis
• Minimize the bad debts by having a strict debt issue and collection policy

Marketing

• Improve the competitiveness of the project by implementing market intelligence

initiatives such as improving the competitive advantages of the business,
studying the competition, conducting market surveys and being more customer
intimate
• Improve the image of the business by branding the business and its products as
well as provide excellent customer service and delivering promptly.

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Operational

• Improve the efficiency of operations by ensuring that tasks are completed

timely and that process and procedures are evaluated so as to eliminate
redundancies in workflow
• Improve operations by standardizing processes
• Employ technology
• Regular audits in processes
• Improve health and safety for the customers and employees by conducting
regular audits to ensure that all health and safety related regulations and
standards are being met

Human Resource

• Improve the skills, knowledge and competencies of the members and

employees of the project and eliminate the risks associated with the
loss of key man in the project by providing on going skills
development and training.
• Employ a performance management system
• Align the values of the individuals to team values

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6. Market Aspect

Market and marketing strategy

Marketing is one of the major aspects in determining the success of any project. Daily uses items such
as eggs and meat are widely acceptable food verities in all over World for all age of people. It can be
confidently said that selling of such items of the reputed farming without their limited production capacity,
can be sold in zero inventory. Until a few years back, there are very limited numbers of commercial layer
farms in the country. The scenario has been changed during last few years, with the establishment of a score
of commercial farms in different parts of the country. Today, it has become one of the major components of
commercial poultry production that has been supplying eggs.

Marketing Strategies

• Improve the competitiveness of the project by implementing market intelligence initiatives

such as improving the competitive advantages of the business, studying the competition,
conducting market surveys and being more customer intimate
• Improve the image of the business by branding the business and its products as well as
provide excellent customer service and delivering promptly.
• The marketing efforts will focus on identifying and understanding the ever-changing needs
and preferences of the customers in order to satisfy them. The marketing mix will drive the
customer value proposition of the project. The following is an account on the product,
promotion, place and packaging that will be applied to the selected market segment.

Marketing Plans

The marketing efforts will focus on identifying and understanding the ever changing needs and
preferences of the customers in order to satisfy them. The marketing mix will drive the customer value
proposition of the project. The following is an account on the product, promotion, place and packaging
that will be applied to the selected market segment.

Products

The main products of the project shall be the eggs produced by the layer birds. The project will strive to
improve the quality of the eggs produced and sold by providing the right nutrition and environment
condition for the layers. Other products to be sold by the project will include the manure resulting from
chicken droppings.

Manure is a desirable fertilizer that is highly sought after by farmers and flower growers. Additionally, the
project will sell layers (cull hens) that become unproductive (around 70 -110 weeks). Cull hens are
considered to be a delicacy for most consumers and as such, the business will be in position to sell these
at lucrative prices.

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Promotion
Farm will use a combination of push and pull strategies to create awareness for the business and appraise
leads and sales. Communication will essentially be directed to small and medium sized entities such as
lodges, bed and breakfasts and lodges. The target consumers will ideally pull the product through the
distribution channel forcing the wholesalers and retailers to stock the products of the project. The
marketing efforts of the business will be designed such that they create attention, interest, desire and
ultimately cause the target audience to take action by purchasing the products of the business. The
project will make use of the marketing and distribution officer so as to ensure that the promotion efforts
are well executed. Branding will also assist in terms of positioning or creating a picture in the minds of
the consumers about the project and the products it provides.

Appropriate and effective forms of advertising will include word-of-mouth, hand-delivered flyer promotion
– to promote any specials that the project might have. This can be extremely effective if coupled with client
referrals as a base with constant monitoring and follow-ups

Publicity and public relations:

Publicity and public relations will encompass the stimulation of demand by interacting with the community
via articles in local releases as well as making the community informed about the project and the value it
adds to society. This will be done at public gatherings and other appropriate places.

Advertising:
This will encompass non-personal presentation and promotion of the products through media channels
such as flyers and local radio stations. The advertising will be in such a way that it educates the target
audience about the nutritional benefits of eating eggs.

Sales promotion:
This will be coverage of impersonal and short term or occasional offering of incentives such as small
discounts on bulk purchases of eggs or ‘buy one get one free’ campaigns

Personal selling:
The project will make use of dedicated sales and marketing personnel that will be responsible for
communicating the benefits or value of the products of the project to potential customers.

Pricing:
The business will make use of accounting and costing systems to determine the unit cost of the eggs.
This way of pricing is justified as the business needs to sell at a price higher than the cost per unit and
essentially cover other related costs and expenses. It will be important for the project to monitor the costs
such as feed, vaccines, labor and other direct cost.

Packaging:
The egg products of the project will be packaged in paper egg trays and neatly sealed with a protective
plastic covering. The plastic covering will bear the name of the project or brand name as well as a catchy
phrase. Information regarding the weight and nutritional value of the products will also be provided.

15
7. Management Aspect

Expansion of facilities

The project has been running successfully due to the facility provided by management team. Every work
is assigned to the staffs and workers as per their capabilities. There is enough logistic support system to
accelerate the business. Considering the high value of hygienic atmosphere, supportive accessories such
as medicine and vaccines are storage abundantly. The internal control is effective and supportive.

Proposed Structure

The project environment is cordial and friendly. The proprietor of the project has been handling the firm
with his subordinates and helping personnel. Technical part is managed by skilled personnel. Necessary
human resource will be arranged as per needs of the project.

Human Resource Development

Practical training program relating with poultry and its management will be attained regularly to boost up
knowledge of the personnel. The project itself will arrange talk program, seminar and training for its staffs.
To motivate the staffs and workers visiting of other poultries and hatcheries of the country will conduct
regularly.

Organization

Promoter Profile:

Mr. Keshav Prasad Duwadi is the main promoter of this company. The promoter and his experience
team has been monitoring the selling product executing as per originally planned cost estimate with
necessary controls and co-coordinator with other skilled people in valued in this business. He will promote
the all Products in the markets. The project has been running effectively because of his long outstanding
association with management and operational executives of poultry business of Nepal.

Management:

This farm will be advertised in local and national newspaper with attractive exposition and information of
the meat items. The promoter is well known among all business circles with the reputed and premier
businessman. He will promote the business through the medium of their present associations and
relations with them.

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8. Environmental and Social Aspect

Environmental

Over recent decades the poultry industry has made tremendous adjustments to meet the increasing
demand for inexpensive and safe supply of meat and eggs and this growth has been accompanied by
structural changes within the sector, characterized by the emergence and growth of “land-independent”
(industrial) farming establishments, and the intensification and concentration of poultry operations. The
driving forces behind structural change in poultry production are no different than those that affect other
livestock commodities: market pull, innovation and economies of scale. This article adopts the analyzing
the environmental impacts arising from poultry production, and evaluating such impacts all the way from
feed production to animal production and slaughtering. It considers impacts on all environmental media
– air, water and land, at local, regional and global scales.

Commercial farmers are pushed to use antibiotics and other chemicals mainly because of low quality
feed. Although there are no analysis of the meat or the egg for the content of antibiotics but it may be
expected which could disqualify the produce for export. Another socio-cultural constraint to poultry
development is the value placed upon poultry for use at ceremonies and festivals or even as a source of
income in times of need but neither as a source of daily food nor as regular source of income. Some
regard chickens as their pets or part of the family, thus it is only the arrival of an important unexpected
visitor that could allow their use as food, although they can be sold without regret and the money utilized.
Health impacts of citizens, waste collectors/street vendors, results from unsafe disposal of chemicals in
the environment and lab is considerable factor.

Socio-Economic

In Nepal, more than 65% of people depend upon agriculture. Contribution of agricultural sector in Gross
Domestic product (GDP) of Nepal is 33%. Among them contribution of livestock sector in total GDP is
26.8% and poultry sub sector within livestock contributes 8% of Agriculture Gross Domestic product
(AGDP) and Indigenous poultry is widely prevalent which contributes 55% of total poultry population.
Poultry can convert feed efficiently in short period of time and give income in short time of period. But
Nepal, Village farmers lack knowledge about poultry health and Poor husbandry practices limit production
as well as income generation. Indigenous breeds of Nepal are Shakini, Ghanti khuile and Pwankh Ulte.
If we are able to do Genetic improvement through selection as well as improve health husbandry, we can
significantly increase the production. So for the improvement of the indigenous breed of poultry, we need
to identify some economically important traits of indigenous breed which can be improved. Some
important traits of indigenous breeds of poultry are Total eggs per clutch and good mothering ability.

17
9. Financial Aspect

Assumptions
Financial projections are based on the total project cost, Annual operating cost and sales Revenue. In
these projections, it has been assumed that the proposed project will attain its full selling target.

Investment Pattern:
The total Project cost will be of Rs. 48,558 thousand including fixed assets investment at Rs. 24,968
thousand and working capital of Rs. 23,590 thousand. It is expecting loan Rs. 35,000 thousand (Rs.
16,128 & Rs. 18,872 as fixed and working capital loan) from financial institution. Rest will be the
equity participation.

Financing Pattern
Amount in Rs.

23,590,356
48,557,856
24,967,500

Total Project Cost: Fixed Capital : Working Capital :

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 Loan Pattern
40,000,000
35,000,000
35,000,000

30,000,000
AMOUNT IN RS.

25,000,000

20,000,000

15,000,000

10,000,000 18,872,285
16,127,715
5,000,000

- -
2. Bank Loan : Fixed Capital : Working Capital :

Building/sheds and other civil construction contains the major portion of the required Fixed Asset, which is
Rs. 23800 thousand over Total Fixed Asset Investment of Rs. 24,968 thousand.
The requirement of working capital has been worked out based on stock of raw material, work in progress,
finished goods, Account Receivable, Cash and Account payable. Out of the working capital requirements
of Rs. 23,590 thousand, Rs. 18,872 thousand is anticipated to receive from financial institution as short-
term loan.

Operating Cost & Expenses

The project, based on its production planning, involves an operating cost & expenses amounting Rs.
19,565 thousand annually. It comprises fixed and variable cost of Rs. 4,002 thousand and Rs. 15,563
thousand respectively.

19
 Annual Operating Cost

TOTAL ANNUAL OPERATING COST 19,564,946

TOTAL FIXED COST 4,002,409

TOTAL VARIABLE COST 15,562,537

- 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000

The sales revenue from the sales of eggs, culling birds and by products items will amount of Rs. 30398
thousand first year operating in 60% capacity utilization.

ANNUAL SALES REVENUE ESTIM ATION

100000000 100%
78294881

CU PERCENTAGE
69906144
RS. IN AMOUNT

80000000 80%
62416200
50662500 55728750
60000000 60%
40000000 40%
20000000 20%
0 0%
2080/81 2081/82 2082/83 2083/84 2084/85
Years
AXIS TITLE

TOTAL SALES SALES AS CAPACITY UTILIZATION CAPACITY UTILIZATION PERCENTAGE

Cash Flow
Cash flow projections indicate favorable positions of accumulated cash balance of Rs. thousand 12,519
and in the first year to Rs. 6,082 thousand in the 5th year.

Break-even-point (BEP)
The operating cost & expenses and sales revenue at its full capacity indicates a break-even point (BEP)
at 27 percent operation beyond this capacity level is desired to run the project profitably.

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 BEP = 27%
BEP in Sales, in Rs. = 8201114

Pay-back period:
Initial investment made on fixed assets of the project is estimated to recover with in the period of 4.23
year from the date of commencement of operation.

BCR:
Average Benefit Cost Ratio for 5-year period will be 1:1.49, which seems quite satisfactory.

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10. Existing government policy and rules in existing Business

Nepal's government has introduced a poultry policy that aims to triple the per-capita consumption and
availability of chicken and eggs in the next 15 years by encouraging the commercialization of poultry in
areas where necessary infrastructures are already in place, according to reports.

Current average per-capita consumption of poultry meat and eggs stands at 9 kg and 120 pieces. The
long-awaited poultry policy has envisaged strategies including prioritizing the poultry sector for
government support programs so as to encourage massive commercialization of this emerging sector
that has already seen an investment of over Rs 30 billion (US$385.8 million).

The policy focuses on incentives such as interest subsidies, exceptions on customs duties and import
taxes related to poultry equipment, and simplification of registration. Research and development of new
breeds of chicken, promotion of local breeds in areas where infrastructure is still not in place and
encouraging insurance against natural disasters are also part of the new policy.

Nepal has also envisioned the grading, labeling and standardization of poultry meat and eggs. The
government would extend financial and technical support to establish market centers and an Export
Processing Zone for market promotion of poultry products. The policy has also underlined the need to
encourage the private sector to set up slaughter houses and meat processing facilities. The policy
provides for the establishment of a directive committee to develop the poultry sector on public private
partnership and cooperative model.

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11. Project Area and Infrastructure

Madi Municipality,was established in 2014 (2071 Manshir, 16) as a local level government of Nepal. The
headquarters of this municipality is located in Basantapur, Chitwan, Nepal. This municipality was
incorporated by merging four VDC's Such as Gardi, Baghauda, Kalyanpur, and Ayodhdyapuri. The total
area of this municipality 84.2 Square Kilometers and the total population is 37,683.

The Madi region on the southern border of Chitwan district starts at a distance of about 38 km from
Bharatpur. It is surrounded by the Chure Hills, a national park to the east, west and north, and the
Someshwar Range to the south. There are various legends about the name of this Madi region.

There is a legend that Madabya sage guided the people of this land by doing penance in this land and it
is called Madi because it is the abode of Mandabya sage. There are statements of old people and
intellectuals of the indigenous Tharu caste.

The then Gardi, Baghauda, Kalyanpur, and Ayodhyapuri VDCs were called Madi Area and the
Government of Nepal has formed Madi Municipality by merging all the 4 VDCs on 2071 Manshir 16.
Although there are major settlements in 2, 3, 4, 5, and 6, other castes include Brahmin, Chhetri, Magar,
Gurung, Tamang, Bishwakarma, Pariyar, Bote, Darai, Rai, Chepang, Gandharb, Madhesi, Muslim, and
other castes.

Geographical Map of Madi Municipality:

23
Land area

The project has been established in about 15 Kattha of land located in ward no-7, Madi Municipality
Chitawan. The land is owned by the owner of the farm itself.

Accessibility

The area of the project area is linked by permanent road networks and is accessible round the year
making it easier to transfer inputs to the project and the outputs from it to major cities in the country and
outside.

Communications

The project area is located in the area where all kinds of communication services – telephones, facsimiles
and internet are available.

Supply of Water

There is no scarcity of water in the project area. The company has own source of water in the project
premise.

Source of raw materials and inputs

The main raw materials for project are day-old layer chicks, feed & feed materials, litters and medicines.
The firm has been using day-old chicks from Avinash and other hatcheries from Chitwan. They are readily
available and are good in quality. The feed required for the project is available in local markets.

Building and Civil Works

The project has been in operation for over couple of years. In fact, it has been started with a small entity
of 5000 birds. Today, the project has grown into a full-scale enterprise with 13000-layer birds and
planning to accelerate it up to 18000 birds with financial aids. At present, there are 4 fully operational
sheds of different size and capacities. The project is currently being operated with all necessary civil
structures.

24
12. Conclusion and Recommendation

The output of this research showed that poultry business is one of the major agricultural practices in
Nepal, however it has major constraints that lower the optimum productivity of the egg and cause higher
mortality in the birds. Technical knowledge of the housing system, disease control and husbandry in
general is lacking in poultry farming farmers. Government and concerned agencies need to take active
part for the extension service to strengthen the health of chicken. Also it is recommended that well based
and organized marketing channel is essential for selling of poultry products. Farmers are advised to
consult veterinary doctors for the health issue of the birds and advised further to avoid the excessive use
of antibiotics. Since ND and CRD were prevalent in all the study area as major health issue, an in-depth
analysis of these two diseases should be carried out in future to explore the cause of morbidity and
mortality. This would considerably reduce the losses and maximize the returns to the farmers.

The Project has been selling eggs to local and adjoining district. So in this context it will help to generate
economic activities to some extent.

Demand & Supply

It has been observed that there is good local market for the eggs. However, there are others firms selling
are products in the area, but the hygienic terms in raising livestock are very few. So in this state, there
will still a demand and supply gap of standard hygienic eggs.

Location:

This project has been established in Ward no 7, Madi Nagarpalika Chitawan. This area is well equipped
with all the needful infrastructures such as transportation, electricity, water supply, telephone etc.

Human Resource:

The project provides the employment to the 8 people. The number of direct and administrative manpower
is 3 and 5 respectively.

Financial Estimation

The total Project cost will be Rs.91281 thousand including fixed assets investment at Rs.55559 thousand
and working capital of Rs.35722 thousand at 100% sales utilization. It is expecting loan Rs.67469
thousand (Rs.38891 & Rs.28577 as fixed and working capital loan) from financial institution. Rest
will be the equity participation.

Conclusion:

On the basis of market, technical, financial aspects to invest in project in Madi have been found feasible
and viable. So to invest in this venture is attractive and viable with low risk factor.

25
Financial Annexes

26
 Projected Balance Sheet
Amount in Rs.
Projected
Particulars Sch. 2084/85 2083/84 2082/83 2081/82 2080/81
Sources Of Fund
Paid up Capital 2 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000
Accumulated Profit/(Loss) 38,741,232 24,888,446 15,579,521 10,225,796 7,305,114
Properietor Investment - - - - -
Long Term Loan 0 3,611,945 7,019,440 10,234,058 13,266,716
Total Sources of Fund 43,741,232 33,500,391 27,598,961 25,459,854 25,571,830

Uses Of Fund
Fixed Assets (less Dep.) 1 19,172,833 20,195,306 21,280,310 22,433,144 23,659,875

Current Assets
Closing Inventory 5 75,000 75,000 145,000 750,000 125,000
Advance & Deposit 6 3,707,321 3,370,292 3,063,902 2,785,365 2,532,150
Sundry Debtors 8 42,160,916 28,107,277 18,738,185 12,492,123 8,328,082
Cash & Bank Bal. 3 6,082,301 7,337,375 8,312,878 9,833,935 12,519,160
Total Current Assets 52,025,538 38,889,944 30,259,965 25,861,423 23,504,392
Total Assets 71,198,372 59,085,250 51,540,274 48,294,567 47,164,267

Current Liabilities & Provisions

Short Trem loan 9 18,872,285 18,872,285 18,872,285 18,872,285 18,872,285
Sundry Creditors & Payable 10 3,455,499 3,141,363 2,855,784 2,596,167 2,360,152
Other Payable 10 511,761 468,237 428,670 392,700 360,000
Provision for Income Tax 10 4,617,595 3,102,975 1,784,575 973,561 -
Total Current Liabilities 27,457,140 25,584,860 23,941,314 22,834,713 21,592,437
Net Current Assets 24,568,399 13,305,084 6,318,651 3,026,710 1,911,955
Total Uses of Fund 71,198,372 59,085,250 51,540,274 48,294,567 47,164,267

27
 Income Statement
Amount in Rs.
Projected Projected
2084/85 2083/84 2082/83 2081/82 2080/812078/79
Particulars Sch.

Sales Reveneue/ Income 70,465,393 62,915,530 56,174,580 50,155,875 30,397,500

Less:
Cost of Sales 4 45,926,500 44,501,500 43,076,500 40,321,500 25,321,500
Gross Profit 24,538,893 18,414,030 13,098,080 9,834,375 5,076,000
Less:
Administrative exp. 7 3,696,985 3,363,623 3,060,566 2,785,060 2,534,600
Operating profit 20,841,908 15,050,407 10,037,514 7,049,315 2,541,400
Less Depreciation 1 1,022,473 1,085,003 1,152,834 1,226,731 1,307,625
Net Profit Before Interest & Tax 19,819,435 13,965,404 8,884,680 5,822,584 1,233,775
Less: Interest Expenses 7 1,349,054 1,553,503 1,746,381 1,928,340 2,100,000
Net profit (loss) before tax 18,470,381 12,411,900 7,138,299 3,894,244 (866,225)
Provision for Tax 4,617,595 3,102,975 1,784,575 973,561 -
Net profit after tax 13,852,786 9,308,925 5,353,725 2,920,683 (866,225)
Up to previous year profit /(Loss) 24,888,446 15,579,521 10,225,796 7,305,114 8,171,339
Total Profit Available 38,741,232 24,888,446 15,579,521 10,225,796 7,305,114
Less : Profit Withdrawn
Balance Transfer to B/S 38,741,232 24,888,446 15,579,521 10,225,796 7,305,114

28
 Projected Cash Flow Statement
Amount in Rs.
Projected Audited
S.no. Particular 2084/85 2083/84 2082/83 2081/82 2080/81 2077/78
1 CASH FLOW FROM OPERATION ACTIVITIES 2,356,872 2,431,991 1,693,561 347,434 (7,823,680)
Net profit (loss) 18,470,381 12,411,900 7,138,299 3,894,244 (866,225)
Add
Depreciation 1,022,473 1,085,003 1,152,834 1,226,731 1,307,625

Decrease(Increase) in current assets (14,390,668) (9,605,483) (5,919,598) (5,042,256) (10,985,232)

Increase (decrease) in current liabilities 1,872,280 1,643,546 1,106,601 1,242,276 2,720,152
Income tax paid (4,617,595) (3,102,975) (1,784,575) (973,561) -

2 CASH FLOW FORM INVESTING ACTIVITIES - - - - (24,967,500)

Fixed assets Sales (Purchase) - - - - (24,967,500)
3 CASH FLOW FROM FINANCING ACTIVITIES (3,611,945) (3,407,495) (3,214,618) (3,032,659) 44,986,885
Increase in share capital - - - - (32,500,000)
Properietor's Investment - - - - -
Bank Loan Disbursement/(Payment) (3,611,945) (3,407,495) (3,214,618) (3,032,659) 77,486,885
Dividend Distributed - - - - -
Net cash increse(decrease) from 1+2+3 (1,255,073) (975,504) (1,521,057) (2,685,224) 12,195,705
Opening balance of Cash & Bank 7,337,375 8,312,878 9,833,935 12,519,160 323,455
Cash & Bank Bal. End of the year 6,082,301 7,337,375 8,312,878 9,833,935 12,519,160

29
 Schedule-1

Amount in Rs.
Name of Assets Opn.Bls 2080/81 Total Bal Dep. Rate Dep. Amt. Clo. Balance
Furniture, Fixture 50,000 50,000 25% 12,500 37,500
Civil Construction 23,800,000 23,800,000 5% 1,190,000 22,610,000
Plants and Machinery 367,500 367,500 15% 55,125 312,375
Other Fixed Asset 500,000 500,000 0% - 500,000
Vehicles 250,000 250,000 20% 50,000 200,000
Total - 24,967,500 24,967,500 1,307,625 23,659,875

Amount in Rs.
Name of Assets Opn.Bls 2081/82 Total Bal Dep. Rate Dep. Amt. Clo. Balance
Other Fixed Asset 37,500 37,500 25% 9,375 28,125
Civil Construction 22,610,000 22,610,000 5% 1,130,500 21,479,500
Plants and Machinery 312,375 312,375 15% 46,856 265,519
Other Fixed Asset 500,000 500,000 0% - 500,000
Vehicles 200,000 200,000 20% 40,000 160,000
Total 23,659,875 - 23,659,875 1,226,731 22,433,144

Name of Assets Opn.Bls 2082/83 Total Bal Dep. Rate Dep. Amt. Clo. Balance
Plants and Machinery 28,125 28,125 25% 7,031 21,094
Civil Construction 21,479,500 21,479,500 5% 1,073,975 20,405,525
Plants and Machinery 265,519 265,519 15% 39,828 225,691
Other Fixed Asset 500,000 500,000 0% - 500,000
Vehicles 160,000 160,000 20% 32,000 128,000
Total 22,433,144 - 22,433,144 1,152,834 21,280,310

Name of Assets Opn.Bls 2083/84 Total Bal Dep. Rate Dep. Amt. Clo. Balance
Plants and Machinery 21,094 21,094 25% 5,273 15,820
Civil Construction 20,405,525 20,405,525 5% 1,020,276 19,385,249
Plants and Machinery 225,691 225,691 15% 33,854 191,837
Other Fixed Asset 500,000 500,000 0% - 500,000
Vehicles 128,000 128,000 20% 25,600 102,400
Total 21,280,310 - 21,280,310 1,085,003 20,195,306

Name of Assets Opn.Bls 2084/85 Total Bal Dep. Rate Dep. Amt. Clo. Balance
Plants and Machinery 15,820 15,820 25% 3,955 11,865
Civil Construction 19,385,249 19,385,249 5% 969,262 18,415,986
Plants and Machinery 191,837 191,837 15% 28,776 163,062
Other Fixed Asset 500,000 500,000 0% - 500,000
Vehicles 102,400 102,400 20% 20,480 81,920
Total 20,195,306 - 20,195,306 1,022,473 19,172,833

30
 Schedule Forming Parts of Financial Statement (Schedule)

Amount in Rs.
Capital Projected
Particulars 2084/85 2083/84 2082/83 2081/82 2080/81
Authorised Capital 5000000 5000000 5000000 5000000 5000000
Issued Capital 5000000 5000000 5000000 5000000 5000000
Paid Up Share Capital 5000000 5000000 5000000 5000000 5000000
Total 5000000 5000000 5000000 5000000 5000000
Cash Bank Balance Schedule-3
Particulars 2084/85 2083/84 2082/83 2081/82 2080/81
Cash in Hand/ Bank 7337375 7337375 8312878 9833935 12519160
Foreign Currency 0 0 0 0 0
Total 7337375 7337375 8312878 9833935 12519160

Cost of Sales Schedule-4

Particulars 2084/85 2083/84 2082/83 2081/82 2080/81
Opening Stock 44501500 43076500 40321500 25321500 12946500
Add: Purchase 1500000 1500000 2900000 15000000 12500000
Less: Closing Stock 75000 75000 145000 750000 125000
COGS 45926500 44501500 43076500 40321500 25321500
Closing Stocks Schedule-5
Particulars 2084/85 2083/84 2082/83 2081/82 2080/81

Total Colsing Stocks 75000 75000 145000 750000 125000

Prepaid Advance and Deposit Schedule-6

Particulars 2084/85 2083/84 2082/83 2081/82 2080/81
Advance and deposit for Raw Materials 3707321 3370292 3063902 2785365 2532150
Total 3707321 3370292 3063902 2785365 2532150

31
 Schedule Forming Parts of Financial Statement (Schedule)
Amount in Rs.
Projected
Administrative Expenses Schedule-7
Particulars 2084/85 2083/84 2082/83 2081/82 2080/81
Salary & Allowance 2,898,918 2,635,380 2,395,800 2,178,000 1,980,000
Water & Electricity expenses 145,824 132,568 120,516 109,560 99,600
Priting & Stationary 58,564 53,240 48,400 44,000 40,000
Telephone and communication 73,205 66,550 60,500 55,000 50,000
Travel & Tours 87,846 79,860 72,600 66,000 60,000
Others 292,820 266,200 242,000 220,000 200,000
Office expenses 73,205 66,550 60,500 55,000 50,000
Registration and Renewal - - - - -
Audit fee 30,000 30,000 30,000 30,000 30,000
Miscellenous Expenses 36,603 33,275 30,250 27,500 25,000
Fringe Benefit - - - - -
Total 3,696,985 3,363,623 3,060,566 2,785,060 2,534,600
Interest Expenses 1,349,054 1,553,503 1,746,381 1,928,340 2,100,000
Debtors and Receivables Schedule-8
Particulars 2084/85 2083/84 2082/83 2081/82 2080/81
Trade Receivables 42,160,916 28,107,277 18,738,185 12,492,123 8,328,082
Other receivables - - - - -
Total 42,160,916 28,107,277 18,738,185 12,492,123 8,328,082

Borrowings Schedule-9
Particulars 2084/85 2083/84 2082/83 2081/82 2080/81
Short Term Loan 18,872,285 18,872,285 18,872,285 18,872,285 18,872,285
Long term Loan 0 3,611,945 7,019,440 10,234,058 13,266,716
Total 18,872,285 22,484,230 25,891,725 29,106,343 32,139,001

Commercial and Other Payables Schedule-10

Particulars 2084/85 2083/84 2082/83 2081/82 2080/81
Sundry Creditors 3,455,499 3,141,363 2,855,784 2,596,167 2,360,152
Income Tax Payable 4,617,595 3,102,975 1,784,575 973,561 -
TDS payable 483,261 439,737 400,170 364,200 331,500
Other Payable 28,500 28,500 28,500 28,500 28,500
Total 8,584,855 6,712,575 5,069,029 3,962,428 2,720,152

32
 Working Capital Estimation

S.N. Particulars Basis Rs. (Projected)

a. Sales/Total Revenue Annual 50662500

b. Cost of Goods Sold (CoGS) Annual 25321500

c. Stock/Inventory (CoGS/365)* Average Stock 17343493

Holding Period

d. Debtors/Account Receivable (Sales/365)* Average 8328082

Account Receivable Period

e. Creditors/Account Payable (CoGS/365)* Average 2081219

Account Payable Period

f. Total Requirement of Working Capital f = (c + d - e) 23590356

g. Bank Financing 80% 18872285

h. Working Capital Requested by Customer 0

Ratios

Discription Days (Input Days)

Average Stock Holding Period: ....... Days

250
Average Account Receivable Period: .......
Days
60
Average Account Payable Period: ...........
Days
30
Required days

280

33
 Annex-1
Fixed Assets Investment
Amount in Rs.
Particulars Unit Qnt. Rate Amt. Total
1 Building & Civil Construction 23800000
Poultry Shed Sqft 22500 1000 22500000
Office Building Sqft 100 1000 100000
Labour quarter Sqft 100 1000 100000
Store Sqft 100 1000 100000
Fencing LS 1000000

2 Machinery,Tools & Equipments 367500

-Brooder Nos 50 5500 275000
-Feeder Nos 50 500 25000
-Drinker Set 50 1150 57500
-Partition tools Nos 10 1000 10000

3 Furniture & Office Equipments 50000

Office Set 1 50000 50000

4 Vehicles 250000
Motorcycle Nos 1 250000 250000

5 Pre Operating Cost 500000

Project Enginnering and Report 500000

Total Fixed Asset Investment 24967500

34
 Annex-2A
ANNUAL OPERATING COST ESTIMATION
(Fixed Cost Estimation)
Amount in Rs.
SN Particulars Unit Quantity Rate/ Unit Sub Total Total Amt
1 Depreciation: 1307625

2 Ammortization of Pre Operating Expenses 500000 10% 50000 50000

3 Insurance, @1% of fixed asset (excludingP/O cost) 244675 1.0% 2447 2447
4 Office Overhead 430000
- Printing and Stationery LS 40000
- Office Materials LS 50000
- Communication LS 50000
- Travel and Tours LS 60000
- Auditing and Legal Consultancy LS 30000
- Others 200000

5 Indirect Labor 1080000

- Manager, @Rs.40000/month Nos. 1 40000 480000
- Watchmen/Guards, @Rs.20000/month Nos. 2 25000 600000

6 Interest on Term Loan 18872285 6.0% 1132337 1132337

Total Fixed Costs 4002409
contd.,

Annex 2 B
ANNUAL OPERATING COST ESTIMATION
(Variable Cost Estimation)

SN Particulars Unit Quantity Rate / Unit Sub Total Total Amt

1 Purchasing Materials (Detail in RM sheet) 12946500
2 Direct Labour 900000
@Rs.15000/month No. 5 15000 900000
3 Utilities 3 99600
- Electricity @20units/day Units 7300 12 87600
- Water Months 12 1000 12000
4 Repair & Maintenance: 484100
- Buildings & Civil Works 23800000 2% 476000
- Machinery & Equipment 367500 2% 7350
- Furniture & Office Equipment 50000 2% 750

5 Interest on Working Capital Loan 18872285 6.0% 1132337 1132337

TOTAL VARIABLE COST 15562537
TOTAL FIXED COST 4002409
TOTAL ANNUAL OPERATING COST 19564946

35
 Annex 2C
Inputs & Materials
Amount in Rs.
SN Particulars Unit Quantity Rate Sub Total Total Amt
12946500
Day old chicks (local) Nos. 19800 150 2970000
Feed, @7kg per bird Kg 126000 78 9828000
Vaccinens & medicines, etc. 148500

Annex-4
ANNUAL SALES REVENUE ESTIMATION
(At 100 % Capacity Utilisation)

Amount in Rs.
Years
SN Particulars Unit QTY Rate
2080/81 2081/82 2082/83 2083/84 2084/85

Egg Sales Nos 3000000 14 40500000 44550000 49896000 55883520 62589542

Litters, @0.050kg/bird/day KG 273750 20 5475000 6022500 6745200 7554624 8461179
Sales of Aged Unproductive layers KG 18750 250 4687500 5156250 5775000 6468000 7244160
TOTAL@ 100% Sales Utilization 50662500 55728750 62416200 69906144 78294881
TOTAL@ Capacity Sales Utilization 30397500 50155875 56174580 62915530 70465393
Capacity Utilization 60% 90% 90% 90% 90%

Annex-5
REPAYMENT SCHEDULE OF TERM LOAN

Term Loan : 16127715

Interest Rate : 6.0%
Capital Recovery Factor : 0.2374
Installment : 3828661
Repayment Time: 5 Year

SN Year of Operation 0 2080/81 2081/82 2082/83 2083/84 2084/85

1 Installment 3828661 3828661 3828661 3828661 3828661
2 Principal 2860999 3032659 3214618 3407495 3611945
3 Interest 967663 796003 614043 421166 216717
4 Loan Outstanding 16127715 13266716 10234058 7019440 3611945 0

36
 Annex-6 Sensitivity Analysis
CALCULATION BREAK EVEN POINT
If Fixed cost increase by 5%
Amount in Rs. 4202529
15562537
1. Total Fixed Cost 4002409 30397500
BEP = 28%
2. Total Variable Cost 15562537

3. Annual Sales Revenue 30397500 If Variable cost increase by 5%

4002409
Fixed Cost 16340664
BEP in Percentage = --------------------------------------------- 30397500
Sales - Variable Cost BEP = 28%

= 4002409 If Sales Revenue increase by 5%

14834963 4002409
15562537
= 27% 31917375
BEP = 24%
BEP in Sales, in Rs. = 8201114
If Sales Revenue decrease by 5%
4002409
15562537
28877625
BEP = 30%

37
 Annex-7
FINANCIAL RATIOS
Amount in Rs.
Year of Operation 2080/81 2081/82 2082/83 2083/84 2084/85
1. Return on Investment: -2% 6% 11% 19% 29%
A. Net Profit -866225 2920683 5353725 9308925 13852786
B. Total Investment 48557856 48557856 48557856 48557856 48557856
2. Return on Equity: -6% 22% 39% 69% 102%
A. Net Profit -866225 2920683 5353725 9308925 13852786
B. Total Equity 13557856 13557856 13557856 13557856 13557856

BENEFIT COST RATIO

Amount in Rs.
Particulars 2080/81 2081/82 2082/83 2083/84 2084/85
Cost 45,926,500 44,501,500 43,076,500 40,321,500 25,321,500
Benefit 30,397,500 50,155,875 56,174,580 62,915,530 70,465,393
DF@6% 0.943 0.89 0.84 0.792 0.747
Discounte Cost 43,308,690 39,606,335 36,184,260 31,934,628 18,915,161
Discounte Benefit 28,664,843 44,638,729 47,186,647 49,829,099 52,637,649
BCR 0.66 1.13 1.30 1.56 2.78
Total
Discounte Cost 43,308,690
Discounte Benefit 28,664,843
BCR (Avg) 1.49

38
 Annex-8
CALCULATION of Internal Rate of Return (IRR) & Net Present Value (NPV)

SN Year of Operation 0 2080/81 2081/82 2082/83 2083/84 2084/85

Cashflow -24967500 12519160 9833935 8312878 7337375 6082301

Internal Rate of Return 26% Derived by Excel

Net Present Value 17,477,728 Derived by Excel

Annex-9
SIMPLE PAY BACK PERIOD
Amount in Rs.
SN Year of Operation 0 2080/81 2081/82 2082/83 2083/84 2084/85
1 Net Profit -24967500 -866225 2920683 5353725 9308925 13852786
2 Depreciation 1307625 1226731 1152834 1085003 1022473
3 Profit before Depre. 441400 4147414 6506559 10393928 14875259
4 Cumulative Profit -24967500 441400 4588814 11095373 21489301 36364560
Simple Pay Back Period = 4.00 Years
3 month
0.233824426 4.23 Years

39
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