PROJECT PROPOSAL OF

A UNIT OF MANUFACTURE AND PACKAGING OF FRUIT BEVERAGES AND ENERGY HEALTH DRINKS
 ABOUT THE PROJECT

A variety off soft drinks are being presently produced in the country such as Sweetened carbonated
(aerated) soft drinks, still beverages containing fruit juice/pulp and soda water falling under the
category of RTS (ready-to-serve) beverages. Among these the share of Fruit based energy beverages
are very small compared to synthetic carbonated drinks/soda waters. However, the trend is slowly
changing for the obvious advantages of nutritious beverages over the synthetic aerated drinks.
Manufacture of RTS Fruit beverages based on Fruit and minerals are they gives instant energy and
only considered here, as rehydrates .The market for energy drinks is expanding and is expected to
grow further.

LOCATION

MARKET DEMAND

Consumer demand for energy drinks are expected to increase, Energy drinks fall into the category of
functional beverages, fruit and food supplement drinks are designed to be consumed before or
during exercise to prevent dehydration, supply carbohydrates, provide electrolytes and typically do
not contain caffeine. It indicates that energy drinks will see their strongest growth in the ahead this
increased growth can be attributed to more private label initiatives, larger container sizes, multi-
pack options, sugar-free versions, and juice hybrids that have a more palatable flavour. The energy
drink industry has proven to be extremely profitable and is anticipated to continue with this same
success in the years to come with new and innovative product launches reaching a more expanded
market.

MANAGEMENT SET UP

INFRASTRUCTURE

Site :

Power :
The unit will apply for power connection OF 63 KVA transformer of own structure from CESCO.

Manpower :

Transportation :
The site is well located. The road transport facilities are available to the unit within minutes

BASIS OF PRESUMPTION:

 The scheme is based on 300 working days in a year and 8 hours per day on single shift basis.
 Minimum wages have been taken into consideration while preparing the scheme.
 The rate of interest both for working and fixed capital is taken @ 11.50% per annum.
 The unit would construct its own building on lease land
 Costs of machinery and equipment are based on average prices of machinery
manufacturers.
  Delay in implementation will attract price escalation.

IMPLEMENTATION SCHEDULE:

1. Preparation of project report Completed

2. Arrangement of Papers and Permissions 1 Month
3. Arrangement of Loan 3 Months
4. Construction of Building or shed 3 Months
5. Procurement and installation of Plant & Machinery 1 Months
6 Trial Run 1 Months
7. FSSAI Registration 2 Months

POLLUTION CONTROL
The Unit does not produce anything which will create pollution problem. Hence it is considered
pollution free unit.

ENERGY CONSERVATION
Suitable measures shall be taken to conserve electricity.

QUALITY CONTROL & STANDARD:

As per FSSAI Requirement and specification :

As per ISO Certification and its norms.

PROJECT SUMMARY
Name of the Enterprise
Location of the enterprise
Address of the Enterprise
Name of the Entrepreneur

Address of the entrepreneur

Contact Number
email:
Qualification
Constitution of the Enterprise Proprietorship
Activity of the Enterprise Fruit Juice and Allied Fruit Drinks
Nature of Activity Perinial
Employment to be generated 20
Direct Employment 20
Wage Employment 0
Taking in to consideration of
Project Cost margin money of working capital
Block Capital 149.94 149.94
Working Capital 19.44 4.86
Total Project Cost 169.38 154.80

Means of Finance
Term loan 110.00
Cash Credit 14.58
Own Contribution 44.80
Total 169.38

Equity
Contribution on Block Capital 39.94 26.64% 73.36%
Contribution on Cash Credit 4.86 25.00% 75.00%
Total Equity 44.80 26.45% 73.55%

Investment to be made Bank loan Own Capital Total

Block Capital 110.00 39.94 149.94
Working Capital 14.58 4.86 19.44
Total 124.58 44.80 169.38

Name of the Banker Bank of India, Press Chaka Khapuria, Cuttack

Pay Back period 60 Months

Average DSCR 2.02

Average BEP 38.13%
IRR before Tax 27.24%
IRR after Tax 23.76%

Net Worth of the Entrepreneurs:

Installed capacity
Manufacturing of Fruit Juice and Allied Fruit Drinks 8640000 Numbers
Rs. 37152000
Utilised Capacity
Manufacturing of Fruit Juice and Allied Fruit Drinks 7344000 Numbers
85% Rs. 31579200
Actual Production considering production waste
Manufacturing of Fruit Juice and Allied Fruit Drinks 6912000 Numbers
Rs. 29721600.00

Cost of Land
Land (Half Acre) (Rs. lakh)
on leased basis from 15.00
0.50 Acre of land AT

Total Cost of land 15.00

Buildings

Type of Area ( Rate in Rs. ( Total Cost (Rs.

S. No. Description of Building Construction sq. fts.) sq. fts.) lakh)
(a) Factory Building AC SHEET 8000 550 44.00
(b) Office Building RCC 2000 600 12.00
(c) Bore well 2.00
(d) Boundary wall 2.00
(e) Effluent Treatment Plant( Tank) RCC 2000 250 5.00
Total Cost of Building 65.00

COST OF PLANT & MACHINERY

Unit Cost in
S. Rupees (Incl. Total Cost
No. Name of Machinery and Specification Quantity taxes) (Rs. lakh)
1 RO with Pre Treatment and Post
Treatment 1 300,000 3.00
2 Stainless Steel Ozonator 1 35,000 0.35
3 SS Tank 1 35,000 0.35
4 UV 1 12,500 0.13
5 Effluent Treatment Plant 1 450,000 4.50
6 Sugar Syrup dissolving Tank 1 180,000 1.80
7 Sugar Syrup filtration and cooling 1 250,000 2.50
8 Ready Syrup Storage tank 1 126,000 1.26
9 Blending and Starage tank 2 215,000 4.30
10 Flash Pasteuriser 1 800,000 8.00
11 CIP System Single Tank semi-
Automatic 1 450,000 4.50
12 Pumps 4 40,000 1.60
13 Control Panels 1 280,000 2.80
LPG Water generator/Safety
14 Device/Water Tank/Piping 1 500,000 5.00
15 Automatic Filling and Sealing Machine 1 700,000 7.00
16 Fruit Juicer/ Extractor/Processor 1 300,000 3.00
17 Testing Laboratory 1 250,000 2.50
 18 Delivery Van 1 450,000 4.50
19 Water Treatment and conservation
equipment 1 250,000 2.50
20 Electrification and Transformers 1 500,000 5.00
Total Cost of Machinery 64.59

(Rs. lakh)
Unit Cost in
S. Rupees (Incl. Total Cost (Rs.
No. Name of MFA and Specification Quantity taxes) lakh)
1 Office Furniture/ Electrification 1 100000.00 1.00
2 Computers/printers 1 50000.00 0.50
Total 1.50

Preliminary & Pre-operative Expenses

(Rs. lakh)
(i) Preliminary Expenses
(a) Preparation of Project report and obtaining other 0.20
required permission and Papers
(b) Transportation of equipment/insurance 1.50
Total Preliminary Expenses 1.70

(ii) Pre-operative Expenses

(a) Traveling expenses 0.50
(b) Misc. expenses 0.50
(c) Upfront fee for sanction of term loan 1.12
Total Pre-operative Expenses 2.12

Installed Capacity
The enterprise proposes to manufacture Fruit Beverage Entergy Drinks: of 8640000 Numbers in a
Year in 300 working Days.

Revenue at Installed capacity

Considering 20% Production waste (6912000 numbers after considering 20% Production waste) and
at unit sale price @Rs.04.30 per Piece the enterprise can generate revenue of Rs. 297.22 lakhs in a
year at installed capacity.

Raw material to be required at installed capacity

Qty. of RM reqd Purchase rate Total Cost
Particulars of Raw Material (in Rs.) (Rs. lakh)

PP Cup 8640000 Nos. 1.25/ Piece 108.00

Sugar 30000 KG 45.00/KG 13.50
Flavour /fruit Pulp/Fruit/preservatives 2.40
Chemicals for water testing 0.84
Laminated Roll for cup sealing 6000KG 225.00/KG 13.50
 Corrugated Box 360000 Nos 10.00/Piece 36.00
174.24

Other Consumable Spares at Installed Capacity 1.00

Power & Fuel Expenses at Installed Capacity

(a) Power Cost Calculations
Total Power Load 63.00 KW
No. of working hours per day 8.00
No. of working days per annum 300.00
Load Factor 1.00
Total units consumption per annum 151200.00
Rate per unit (Rs.) 5.00
Total Cost (Rs. lakh) 7.56

Salaries & Wages

(a) Fixed & Semi-variable
No. Per month (Rs.) Amount (Rs.)
Manager 1 15000.00 15000.00
Lab Chemist 2 10000.00 20000.00
Operator cum production Manager 1 9000.00 9000.00
Marketing Executive 3 7000.00 21000.00
Unskilled workers 5 5500.00 27500.00
Helper 3 5000.00 15000.00
Accountant and Office executive 3 7000.00 21000.00
Security guide 2 5000.00 10000.00
Total 20 63500.00 138500.00

Insurance and Other benefits to the workers 0.03

Benefits Amount (Rs.) 4155.00

Monthly Salaries & Wages (Rs.) 142655.00
Annual Salaries & Wages (Rs. lakh) 17.12

(b) Variable
No. Per month (Rs.) Amount (Rs.)
Other Consumables 5000.00
Repair and Maintenance 5000.00
Travel/Phone 5000.00
Total 15000.00
Total Variable 15000.00
Annual variable 1.80
Total Annual Variable 18.92
 Upfront Fee for sanction of Term Loan
Amount of Term Loan (Rs. lakh) 110.00
Upfront fee (%) 0.01
Amount of Upfront Fee 1.10
Service Tax (%) 0.02
Education Cess (%) 0.01
Amount of Upfront Fee (incl. ST & Edu. Cess) 1.12
(Rs. lakh)

Production Capacity Utilisation (Percentage)

FY2020 85.00%
FY2021 85.00%
FY2022 85.00%
FY2023 90.00%
FY2024 90.00%

SALES/ TOTAL INCOME Amount at 100% Installed Capacity

Annual Gross Domestic Sales (Rs. lakh) 297.22
Sales expenses as percentage of Net Sales (%) 2.00

COST OF PRODUCTION/ SALES Amount at 100% Installed Capacity

Raw Material Consumed (Rs. lakh) 174.24
Consumable Stores & Spares (Rs. lakh) 1.00
Power, Fuel & Other Utilities (Rs. lakh) 7.56
Factory Salaries & Wages (Rs. lakh) 18.92 Annual Incre@ 5.00%
Repairs & Maintenance On Assets Annual Incre@ 2.00%
(a) Percentage on Building 2.00%
(a) Percentage on Plant & Machinery 4.00%
(a) Percentage on Misc. Fixed Assets 2.00%
Inventory holding periods No. of Months
Raw Material 1.00
Consumable Stores & Spares 1.00
Stock in Process 0.04( 1 day)
Finished Goods 0.08(2 days)
Receivables other than Exports 0.25(One week)

Rate of Interest on Bank Borrowing for Working Capital 11.50%

Depreciation on Depreciation Rates as per Income Tax Act (WDV Method)

Building 10.00%
Plant & machinery 15.00%
MFA 10.00%

Guess Rate for IRR Calculation 20.00%

Discount rate for NPV calculation 11.50%
No. of Employees 20

OUTPUT
FINANCIAL PARAMETERS
Promoters' Contribution (%) 28.94%
Promoters' Contribution by Equity (%) 100.00%
Debt-Equity Ratio (DER) 2.46
Debt-Equity Ratio (Considering Interest Free Unsecured Loans as 2.46
Quasi Equity)
Maximum DSCR 2.49
Minimum DSCR 1.76
Avg. DSCR 2.02
BEP 38.13%
Cash BEP 33.71%
ROCE % 41.30%
Cost of capital 11.63%
IRR (Before Tax) 27.24%
IRR (After Tax) 23.26%
NPV (before tax) 230.26(12 Yrs.)
NPV (after tax) 199.92(12 Yrs.)
Profitability Index (before tax) 2.55
Profitability Index (after tax) 2.35
Capital Cost 148.21
No. of Employees 20
Capital Cost per Employee 7.41

About the Project FY2020 FY2021 FY2022 FY2023 FY2024

Production Capacity Utilisation 85.00% 85.00% 85.00% 90.00% 90.00%
Total Income 250.11 252.64 252.64 267.35 267.50
Gross Sales 250.11 252.64 252.64 267.35 267.50
Net Sales 250.11 252.64 252.64 267.35 267.50
Gross Profit 63.64 63.26 62.18 66.11 65.02
Operating Profit 45.23 47.65 49.31 55.88 57.51
Interest 12.98 10.42 7.90 5.47 2.94
Depreciation 5.43 5.19 4.97 4.76 4.57
Profit after Tax (PAT) 41.42 43.38 44.71 50.46 51.80
Gross Cash Accruals 47.19 48.91 50.02 55.56 56.71
Net Worth 80.38 119.62 160.19 206.51 254.17

COST OF PROJECT
 Already incurred Total Cost

Land 0.00 15.00

Buildings 0.00 65.00
Plant and Machinery 0.00 64.59
Misc. Fixed Assets 0.00 1.50
Preliminary Expenses 0.00 1.70
Pre-operative Expenses 0.00 2.12
Margin Money for Working Capital 0.00 4.86
TOTAL COST 0.00 154.77

TOTAL COST (Rounded off) 154.80

MEANS OF FINANCE
Already raised Total
Equity
Promoters Capital 0.00 44.80
Quasi-Equity 0.00 0.00
Total Equity/ Quasi-Equity 0.00 44.80

Debt
Term Loan from Bank 0.00 110.00
Total Debt 0.00 110.00

TOTAL FINANCE 0.00 154.80

Debt-Equity Ratio (DER) 2.46

Promoters' Contribution (%) 28.94%
Promoters' Contribution by Equity (%) 100.00%
CALCULATION OF MARGIN MONEY FOR WORKING CAPITAL & ASSESSMENT OF WC
No. of FY2020 FY2021 FY2022 FY2023 FY2024
Months
Current Assets
Raw Material 1.00 12.34 12.34 12.34 13.07 13.07
Consumable Stores & Spares 1.00 0.07 0.07 0.07 0.08 0.08
Stock in Process 0.04 0.61 0.62 0.62 0.65 0.65
Finished Goods 0.08 1.21 1.23 1.24 1.30 1.31
Receivables other than Exports 0.25 5.21 5.26 5.26 5.57 5.57

Total Current Assets (A) 19.44 19.52 19.53 20.67 20.68

Current Liabilities
Working Capital Gap (A-B) 19.44 19.52 19.53 20.67 20.68
Margin Money on Working 4.86 4.88 4.88 5.17 5.17
Capital
Bank Borrowing for Working 14.58 14.64 14.65 15.50 15.51
Capital

CALCULATION OF DEPRECIATION ON WDV METHOD

Building Plant & Machinery Misc. Fixed Assets Total

Original Cost 65.00 64.59 1.50 131.09

Contingencies 0.00 0.00 0.00 0.00

Allocation of Pre-operative 1.05 1.05 0.02 2.12

Expenses

Total Value 66.05 65.64 1.52 133.21

Depreciation Rate 3.34% 4.75% 6.33%

Depreciation for FY2020 2.21 3.12 0.10 5.43

WDV 63.84 62.52 1.42 127.78
Depreciation for FY2021 2.13 2.97 0.09 5.19
WDV 61.71 59.55 1.33 122.59
Depreciation for FY2022 2.06 2.83 0.08 4.97
WDV 59.65 56.72 1.25 117.62
Depreciation for FY2023 1.99 2.69 0.08 4.76
WDV 57.66 54.03 1.17 112.86
Depreciation for FY2024 1.93 2.57 0.07 4.57
WDV 55.73 51.46 1.10 108.29

PROJECTIONS OF PERFORMANCE & PROFITABILITY

FY2020 FY2021 FY2022 FY2023 FY2024

Production Capacity Utilisation 85% 85% 85% 90% 90%
Sales as percentage of Installed Capacity 84.15% 85.00% 85.00% 89.95% 90.00%
SALES/ TOTAL INCOME
Gross Domestic Sales 250.11 252.64 252.64 267.35 267.50
Net Domestic Sales 250.11 252.64 252.64 267.35 267.50
Net Sales 250.11 252.64 252.64 267.35 267.50
Total Income 250.11 252.64 252.64 267.35 267.50

COST OF PRODUCTION/ SALES

Raw Material Consumed 148.10 148.10 148.10 156.82 156.82
Consumable Stores & Spares 0.85 0.85 0.85 0.90 0.90
Power, Fuel & Other Utilities (Fixed) 1.89 1.89 1.89 1.89 1.89
Power, Fuel & Other Utilities (Variable) 4.82 4.82 4.82 5.10 5.10
Factory Salaries & Wages (Fixed) 17.12 17.98 18.88 19.82 20.81
Factory Salaries & Wages (Variable) 1.53 1.61 1.69 1.88 1.97
Repairs & Maintenance 3.98 4.06 4.14 4.22 4.30
Depreciation 5.43 5.19 4.97 4.76 4.57
Sub-total 183.72 184.50 185.34 195.39 196.36
Add: Opening Stock in Process 0.00 0.61 0.62 0.62 0.65
Less: Closing Stock in Process 0.61 0.62 0.62 0.65 0.65
Cost of Production 183.11 184.49 185.34 195.36 196.36
Add: Opening Stock of Finished Goods 0.00 1.21 1.23 1.24 1.30
Less: Closing Stock of Finished Goods 1.21 1.23 1.24 1.30 1.31
Cost of Sales 181.90 184.47 185.33 195.30 196.35
Selling, Packing & Distr. Expenses (Fixed) 1.25 1.26 1.26 1.34 1.34
Selling, Packing & Distr. Expenses 3.75 3.79 3.79 4.01 4.01
(Variable)
Administrative & Misc. Expenses 5.00 5.05 5.05 5.35 5.35
Sub-total 191.90 194.57 195.43 206.00 207.05
Profit before Interest, Lease Rentals 58.21 58.07 57.21 61.35 60.45
(PBIT)
Interest on Term Loan from Bank 11.30 8.74 6.22 3.69 1.16
Interest on Bank Borrowing 1.68 1.68 1.68 1.78 1.78
Operating Profit 45.23 47.65 49.31 55.88 57.51
Preliminary Expenses written off 0.34 0.34 0.34 0.34 0.34
Profit before Tax (PBT) 44.89 47.31 48.97 55.54 57.17
Provision for Taxation 3.47 3.93 4.26 5.08 5.37
Profit after Tax (PAT) 41.42 43.38 44.71 50.46 51.80
Drawings 4.48 4.48 4.48 4.48 4.48
Retained Earnings 36.94 38.90 40.23 45.98 47.32
Gross Cash Accruals 47.19 48.91 50.02 55.56 56.71
Net Cash Accruals 42.71 44.43 45.54 51.08 52.23
PBDIT/ Total Income (%) 25.44% 25.04% 24.61% 24.73% 24.31%
Operating Profit/ Total Income (%) 18.08% 18.86% 19.52% 20.90% 21.50%
Net Profit/ Total income (%) 16.56% 17.17% 17.70% 18.87% 19.36%
Raw Material Cost/ Cost of Production 80.88% 80.28% 79.91% 80.27% 79.86%
(%)
Cost of Production/ Net Sales (%) 73.21% 73.02% 73.36% 73.07% 73.41%
Cost of Sales/ Net Sales (%) 72.73% 73.02% 73.36% 73.05% 73.40%
Interest Coverage Ratio 4.48 5.57 7.24 11.22 20.56
Return on Capital Employed (ROCE) (%) 35.88% 36.96% 37.60% 41.30% 41.99%
CALCULATION OF TAX PROVISION
FY2020 FY2021 FY2022 FY2023 FY2024
PBT 44.89 47.31 48.97 55.54 57.17
Add: Depreciation (as per books) 5.43 5.19 4.97 4.76 4.57
Less: Depreciation as per Income Tax 16.61 14.45 12.58 10.98 9.57
 Gross Taxable Income 33.71 38.05 41.36 49.32 52.17
Less: Loss brought forward 0.00 0.00 0.00 0.00 0.00
Taxable Income 33.71 38.05 41.36 49.32 52.17
Income after deduction u/s 80HHC 33.71 38.05 41.36 49.32 52.17
Net Taxable Income 33.71 38.05 41.36 49.32 52.17
Income Tax @ 10% 3.37 3.81 4.14 4.93 5.22
Surcharge @ 2% 0.07 0.08 0.08 0.10 0.10
Total Income Tax (including Surcharge) 3.44 3.89 4.22 5.03 5.32
Education Cess @ 1% 0.03 0.04 0.04 0.05 0.05
Total Income Tax (including Surcharge & 3.47 3.93 4.26 5.08 5.37
Education Cess)

PROJECTED CASH FLOW STATEMENT

Const. Period FY2020 FY2021 FY2022 FY2023 FY2024

SOURCES OF FUNDS
PBT with interest & lease rental 0.00 57.87 57.73 56.87 61.01 60.11
added back
Depreciation 0.00 5.43 5.19 4.97 4.76 4.57
Increase in Partners Capital 44.80 0.00 0.00 0.00 0.00 0.00
Increase in Term Loan from Bank 110.00 0.00 0.00 0.00 0.00 0.00
Increase in Bank Borrowings for WC 0.00 14.58 0.06 0.01 0.85 0.01
Preliminary Expenses written off 0.00 0.34 0.34 0.34 0.34 0.34
TOTAL 154.80 78.22 63.32 62.19 66.96 65.03

DISPOSITION OF FUNDS
Increase in Capital expenditure 148.21 0.00 0.00 0.00 0.00 0.00
Preliminary Expenses 1.70 0.00 0.00 0.00 0.00 0.00
Increase in Current Assets 0.00 19.44 0.08 0.01 1.14 0.01
Decrease in Term Loan from Bank 0.00 22.00 22.00 23.83 22.00 20.17
Interest on Term Loan from Bank 0.00 11.30 8.74 6.22 3.69 1.16
Interest on Working Capital Limit 0.00 1.68 1.68 1.68 1.78 1.78
Taxation 0.00 3.47 3.93 4.26 5.08 5.37
Drawings 0.00 4.48 4.48 4.48 4.48 4.48
TOTAL 149.91 62.37 40.91 40.48 38.17 32.97
Opening Cash & Bank Balance 0.00 4.89 20.74 43.15 64.86 93.65
Net Surplus/ Deficit 4.89 15.85 22.41 21.71 28.79 32.06
Closing Cash & Bank Balance 4.89 20.74 43.15 64.86 93.65 125.71

PROJECTED BALANCE SHEET

Const.Period FY2020 FY2021 FY2022 FY2023 FY2024

A. LIABILITIES
Promoters Capital 44.80 44.80 44.80 44.80 44.80 44.80
Reserves & Surplus 0.00 36.94 75.84 116.07 162.05 209.37
Term Loan from Bank 110.00 88.00 66.00 42.17 20.17 0.00
Bank Borrowings for WC 0.00 14.58 14.64 14.65 15.50 15.51
TOTAL LIABILITIES 154.80 184.32 201.28 217.69 242.52 269.68
B. ASSETS
WDV of Fixed assets 148.21 148.21 142.78 137.59 132.62 127.86
Less : Depreciation 0.00 5.43 5.19 4.97 4.76 4.57
Net Fixed Assets 148.21 142.78 137.59 132.62 127.86 123.29
Current Assets 0.00 19.44 19.52 19.53 20.67 20.68
Cash & Bank Balance 4.89 20.74 43.15 64.86 93.65 125.71
Preliminary Expenses not 1.70 1.36 1.02 0.68 0.34 0.00
written off

TOTAL ASSETS 154.80 184.32 201.28 217.69 242.52 269.68

Current Ratio (not considering 2.76 4.28 5.76 7.38 9.44

instalments of T/L)
Current Ratio (considering 1.10 1.63 2.30 3.20 9.44
instalments of T/L )
Debt Equity Ratio 2.46 1.09 0.55 0.26 0.10 0.00
TOL/ TNW 2.46 1.28 0.67 0.35 0.17 0.06

BREAK EVEN POINT

FY2020 FY2021 FY2022 FY2023 FY2024
Production Capacity Utilisation 85% 85% 85% 90% 90%

Total Income (incl. increase in SIP & FG) 251.93 252.67 252.65 267.44 267.51

Variable Cost
Raw Material Consumed 148.10 148.10 148.10 156.82 156.82
Consumable Spares 0.85 0.85 0.85 0.90 0.90
Power, Fuel & Other Utilities (Variable) 4.82 4.82 4.82 5.10 5.10
Factory Salaries & Wages (Variable) 1.53 1.61 1.69 1.88 1.97
Selling, Packing & Distribution Expenses 3.75 3.79 3.79 4.01 4.01
(Variable)
Interest on Bank Borrowing 1.68 1.68 1.68 1.78 1.78

Total Variable Cost 160.73 160.85 160.93 170.49 170.58

Contribution 91.20 91.82 91.72 96.95 96.93

Fixed Cost
Power, Fuel & Other Utilities (Fixed) 1.89 1.89 1.89 1.89 1.89
Factory Salaries & Wages (Fixed) 17.12 17.98 18.88 19.82 20.81
Repairs & Maintenance 3.98 4.06 4.14 4.22 4.30
Selling, Packing & Distribution Expenses 1.25 1.26 1.26 1.34 1.34
(Fixed)
Depreciation 5.43 5.19 4.97 4.76 4.57
Administrative & Misc. Expenses 5.00 5.05 5.05 5.35 5.35
Interest on Term Loan from Bank 11.30 8.74 6.22 3.69 1.16

Total Fixed Cost 45.97 44.17 42.41 41.07 39.42

Break Even Point (% of Installed Capacity) 42.84% 40.89% 39.30% 38.13% 36.60%

Cash Break Even Point (% of Installed 37.78% 36.08% 34.70% 33.71% 32.36%
Capacity)
BEP in the Optimum Year (%) 38.13%
Cash BEP in the Optimum Year (%) 33.71%

CALCULATION OF DEBT SERVICE COVERAGE RATIO

FY2020 FY2021 FY2022 FY2023 FY2024
Net Profit After Tax 41.42 43.38 44.71 50.46 47.48
Non-cash Charges 5.77 5.53 5.31 5.10 4.50
Interest on Term Loan from Bank 11.30 8.74 6.22 3.69 1.16
TOTAL A 58.49 57.65 56.24 59.25 53.14

Interest on Term Loan from Bank 11.30 8.74 6.22 3.69 1.16
Repayment of Term Loan from Bank 22.00 22.00 23.83 22.00 20.17
TOTAL B 33.30 30.74 30.05 25.69 21.33
DSCR 1.76 1.88 1.87 2.31 2.49
Average DSCR 2.02

CALCULATION OF INTERNAL RATE OF RETURN & NPV

IRR BEFORE TAX
Const. FY2020 FY2021 FY2022 FY2023 FY2024
Period
OUTFLOWS
Capital Expenditure 148.21
Increase in WC Gap 19.44 0.08 0.01 1.14 0.01
TOTAL OUTFLOWS 148.21 19.44 0.08 0.01 1.14 0.01

INFLOWS
Profit before Tax 44.89 47.31 48.97 55.54 57.17
Depreciation/ Write offs 5.77 5.53 5.31 5.10 4.91
Interest 12.98 10.42 7.90 5.47 2.94
Lease Rentals 0.00 0.00 0.00 0.00 0.00
TOTAL INFLOWS 63.64 63.26 62.18 66.11 65.02
NET FLOWS -148.21 44.20 63.18 62.17 64.97 65.01

IRR BEFORE TAX 27.24%

NPV (before tax) 66.86 Discount Rate 11.50%
taken
Profitability Index (before tax) 1.45

IRR AFTER TAX

Const. FY2020 FY2021 FY2022 FY2023 FY2024
Period
OUTFLOWS
Capital Expenditure 148.21
Increase in WC Gap 19.44 0.08 0.01 1.14 0.01
TOTAL OUTFLOWS 148.21 19.44 0.08 0.01 1.14 0.01

INFLOWS
Profit after Tax 41.42 43.38 44.71 50.46 51.80
Depreciation/ Write offs 5.77 5.53 5.31 5.10 4.91
Interest 12.98 10.42 7.90 5.47 2.94
Lease Rentals 0.00 0.00 0.00 0.00 0.00
TOTAL INFLOWS 60.17 59.33 57.92 61.03 59.65

NET FLOWS -148.21 40.73 59.25 57.91 59.89 59.64

IRR AFTER TAX 23.76%

NPV (after tax) 51.11 Discount Rate 11.50%
taken
Profitability Index (after tax) 1.34
 CALCULATION OF RETURN ON CAPITAL EMPLOYED
FY2020 FY2021 FY2022 FY2023 FY2024
RETURN
Operating Profit 45.23 47.65 49.31 55.88 57.51
Interest 12.98 10.42 7.90 5.47 2.94
TOTAL 58.21 58.07 57.21 61.35 60.45

Net Fixed Assets 142.78 137.59 132.62 127.86 123.29

Current Assets less Creditors 19.44 19.52 19.53 20.67 20.68

TOTAL B 162.22 157.11 152.15 148.53 143.97

ROCE 35.88% 36.96% 37.60% 41.30% 41.99%

ROCE in the Optimum Year 41.30%

CALCULATION OF COST OF CAPITAL (Optimum Year)

Amount Cost of Tax Cost of Total
Funds Rate Funds Cost
(%) (Post- (Post
Tax) Tax)
Partners Capital 44.80 15.00% 1.00 15.00% 6.72
Share Premium 0.00 15.00% 1.00 15.00% 0.00
Preference Share Capital 0.00 15.00% 1.00 15.00% 0.00
Equity Contribution by Bank 0.00 15.00% 1.00 15.00% 0.00
Interest free Unsecured Loans 0.00 15.00% 1.00 15.00% 0.00
Subsidy 0.00 15.00% 1.00 15.00% 0.00
Quasi-Equity Others (Pl Specify) 0.00 15.00% 1.00 15.00% 0.00
Term Loan from Bank 110.00 11.50% 0.91 10.42% 11.46
Interest Bearing Unsecured Loans 0.00 11.50% 0.91 10.42% 0.00

Internal Accruals (Optimum Year) 0.31 15.00% 1.00 15.00% 0.05

Bank Borrowing for WC (Optimum 15.50 11.50% 0.91 10.42% 1.61
Year)

Total 170.61 19.84

Cost of Capital 11.63%

Effective Tax Rate 9.42%
Term Loan from Bank (Rs. Lakh) 110.00
No. of Monthly Instalments 60.00
Rate of Interest 11.50%

Instalment Opening Balance Repayment Closing Interest on Annual Annual

No. Balance Closing Interest Instalment
Balance
1 110.00 1.83 108.17 0.99
2 108.17 1.83 106.33 1.04
3 106.33 1.83 104.50 0.99
4 104.50 1.83 102.67 1.00
5 102.67 1.83 100.83 0.98
6 100.83 1.83 99.00 0.94
7 99.00 1.83 97.17 0.95
8 97.17 1.83 95.33 0.90
9 95.33 1.83 93.50 0.91
10 93.50 1.83 91.67 0.90
11 91.67 1.83 89.83 0.82
12 89.83 1.83 88.00 0.86 11.30
13 88.00 1.83 86.17 0.81 22.00
14 86.17 1.83 84.33 0.82
15 84.33 1.83 82.50 0.78
16 82.50 1.83 80.67 0.79
17 80.67 1.83 78.83 0.77
18 78.83 1.83 77.00 0.73
19 77.00 1.83 75.17 0.73
20 75.17 1.83 73.33 0.69
21 73.33 1.83 71.50 0.70
22 71.50 1.83 69.67 0.68
23 69.67 1.83 67.83 0.60
24 67.83 1.83 66.00 0.64 8.75
25 66.00 1.83 64.17 0.61 22.00
26 64.17 1.83 62.33 0.61
27 62.33 1.83 60.50 0.57
28 60.50 1.83 58.67 0.57
29 58.67 1.83 56.83 0.56
30 56.83 1.83 55.00 0.52
31 55.00 1.83 53.17 0.52
32 53.17 1.83 51.33 0.49
33 51.33 1.83 49.50 0.48
34 49.50 1.83 47.67 0.47
35 47.67 1.83 45.83 0.40
36 45.83 1.83 44.00 0.43 6.22
37 44.00 1.83 42.17 0.40 22.00
38 42.17 1.83 40.33 0.39
39 40.33 1.83 38.50 0.36
40 38.50 1.83 36.67 0.36
41 36.67 1.83 34.83 0.34
42 34.83 1.83 33.00 0.31
43 33.00 1.83 31.17 0.30
44 31.17 1.83 29.33 0.28
45 29.33 1.83 27.50 0.27
46 27.50 1.83 25.67 0.25
47 25.67 1.83 23.83 0.21
48 23.83 1.83 22.00 0.21 3.69
49 22.00 1.83 20.17 0.19 22.00
50 20.17 1.83 18.33 0.18
51 18.33 1.83 16.50 0.16
52 16.50 1.83 14.67 0.14
53 14.67 1.83 12.83 0.13
54 12.83 1.83 11.00 0.10
55 11.00 1.83 9.17 0.09
56 9.17 1.83 7.33 0.07
57 7.33 1.83 5.50 0.05
58 5.50 1.83 3.67 0.04
59 3.67 1.83 1.83 0.02
60 1.83 1.83 0.00 0.00 1.16
0.00 0.00 0.00 0.00 20.17
Total 110.00 31.11 31.11 108.17