PROJECT REPORT

Of

SUGAR CANDY

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Sugar Candy Making Unit

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in project
identification for investment and in order to serve his objective; the document covers various aspects
of the project concept development, start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can also prepare
project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak Building ,

27/1/B, Gokhlley Marg, Lucknow-226001

Delhi Office : Multi Disciplinary Training

Centre, Gandhi Darshan Rajghat,
New Delhi 110002

Email : info@udyami.org.in
Contact : +91 7526000333, 444, 555
 PROJECT AT A GLANCE

1 Name of the Entreprenuer XXXXXXX

2 Constitution (legal Status) : XXXXXXX

3 Father's/Spouce's Name XXXXXXXX

4 Unit Address : XXXXXXXX

Taluk/Block:
District : XXXXX
Pin: XXXXX State: XXXXX
E-Mail : XXXXX
Mobile XXXXX

5 Product and By Product : Sugar Candy

6 Name of the project / business activity proposed : Sugar Candy Making Unit

7 Cost of Project : Rs. 29.74 Lacs

8 Means of Finance
Term Loan Rs. 15.75 Lacs
KVIC Margin Money As per Project Eligibility
Own Capital Rs. 2.97 Lacs

9 Debt Service Coverage Ratio : 2.10

10 Pay Back Period : 5 Years Years

11 Project Implementation Period : 6 Months Months

12 Break Even Point :

13 Employment : 12 Persons

14 Power Requirement : 6 KW

15 Major Raw materials : Sugar, chemicals Flavours

16 Estimated Annual Sales Turnover : Rs. 62.70 Lacs

16 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lacs)

Particulars Amount
Land Rented/Owned
Plant & Machinery 16.50
Furniture & Fixtures 1.00
Working Capital Requirement 6.50
Total 24.00

MEANS OF FINANCE
Particulars Amount
Own Contribution 10% 2.40
Term Loan 15.75
Working capital 5.85
Total 24.00
General Special
KVIC Subsidy Urban 15% 25%
KVIC Subsidy Rural 25% 35%
INTRODUCTION
Candy or Sweet is the most popular type of
confectionery over the world, and there is
certainly something about this unique product
that holds many mysterious qualities. Candy is
made by dissolving sugar in water or milk to
form a syrup, which is boiled until it reaches
the desired concentration or starts to
caramelize. Candy comes in a wide variety of
textures, from soft and chewy to hard and
brittle.
Hard candies, also known as lollipops follies, suckers, or boiled sweets, are generally made of
sucrose, glucose, water, colour and flavour. Hard candies have retained their market share,
especially with children, even with the proliferation of new candy varieties. Hard candy
formulated with functional ingredients represents a growth opportunity for the adult
consumer sector in products like lozenges and other nutraceuticals.
Candy is usually liked by all age groups of people as a confectionery. As a snack between meals
- particularly at special occasions like parties or Christmas. The candy are used after meal,
dinners as smooth refresher. It drives away bad smell from mouth and refreshes the breath.
Sometimes it causes good sensation while chewing. It is chewed by children, young people,
young girls, young ladies etc. But mostly it is consumed by children’s of age group below ten.

MARKET ANALYSIS
Candy market in India is anticipated to grow at a CAGR of over 9% during coming years. on
account of rising middle class households, coupled with increasing working as well as youth
population. The most dominant segment in the country's candy market is sugar candy.

Rapid modernization, continuously rising innovative and premium product launches, growing
e-commerce market coupled with expanding organized retail channels and synchronized
distribution networks are projected to drive candy market in India in the coming years.

Major cities in India, such as Delhi/NCR, Mumbai, Hyderabad, Bengaluru, Chandigarh, Chennai,
and Kolkata are among the leading demand generators of candies in the country. With
increasing economic development in the country, lifestyle and preference of consumers is also
significantly changing in Tier I and Tier II cities, which is driving candy consumption across
these cities. Moreover, demand for sugar-free and low calorie candy products is also growing
on account of increasing health awareness among consumers across the country.

The sugar candy segment is expected to maintain its dominance due to continuing launch of
innovative products as well as aggressive branding initiatives undertaken by leading market
players. Preference for premium chocolate candies as gifts on festivals and functions is also
growing considerably across the country due to increasing marketing initiatives to position
chocolate candies as a product of indulgence rather than impulse product. In 2015, organized
sector accounted for a majority share in India candy market; and the segment's dominance is
expected to further increase in coming years.
MANUFACTURING PROCESS

The process start with weighing of all ingredients like: sugar, liquid glucose, citric acid, food
additives, flavors, etc. which are mixed thoroughly and cooked in a vacuum cookers to process
at required temperature. The mass can transfer from mixer to cooker by pump and cooked
mass then pumped on depositor, molding machine or forming as applicable which are then
deposited, molded or formed in required shapes and sizes by making ropes or as per applicable
process with or without center filling. Thus prepared confections are cooled and packed either
in pillow packing machine or double twist wrapper machine as required.

LIST OF MACHINERY
Sr. No. Equipment Qtty
1 SS Sigma Mixer 2
2 Vacuum Cookers 2
3 Coating Pans with Hot Air Blower 3
4 Batch Roller 1
5 Automatic Sweet Forming Machine 1
6 Sugar Syrup Kettles 2
7 Rotary Molding Machine 1
8 Micro Pulverizer 1
9 Rope Sizer 1
10 Three Way Cooling Conveyors 1
11 Candy Pillow Packing Machine 2
12 Double Twist Wrapping Mac 2
13 Steam Boiler 1
14 Steam Pipelines & Fittings 1
15 Air Compressors 1
16 Lab Equipments 1
17 Material Handling Equipments 1
18 Electrification 1
PROJECTED BALANCE SHEET

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

SOURCES OF FUND

Capital Account 2.40 2.40 2.40 2.40 2.40

Retained Profit 2.74 6.85 12.06 18.70 27.20
Term Loan 12.60 9.45 6.30 3.15 -
Cash Credit 5.85 5.85 5.85 5.85 5.85
Sundry Creditors 0.83 1.04 1.21 1.38 1.56

TOTAL : 24.42 25.59 27.83 31.48 37.01

APPLICATION OF FUND

Fixed Assets ( Gross) 17.50 17.50 17.50 17.50 17.50

Gross Dep. 2.53 4.72 6.60 8.19 9.56
Net Fixed Assets 14.98 12.78 10.90 9.31 7.94

Current Assets
Sundry Debtors 2.86 3.58 4.18 4.78 5.38
Stock in Hand 4.47 5.46 6.37 7.28 8.19
Cash and Bank 2.11 3.78 6.38 10.12 15.50

TOTAL : 24.42 25.59 27.83 31.48 37.01

- - - - -
PROJECTED CASH FLOW STATEMENT

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

SOURCES OF FUND

Share Capital 2.40 -

Reserve & Surplus 3.04 4.57 5.79 8.29 10.63
Depriciation & Exp. W/off 2.53 2.20 1.87 1.60 1.36
Increase in Cash Credit 5.85 - - - -
Increase In Term Loan 15.75 - - - -
Increase in Creditors 0.83 0.21 0.17 0.17 0.17

TOTAL : 30.40 6.98 7.84 10.06 12.17

APPLICATION OF FUND

Increase in Fixed Assets 17.50 - - - -

Increase in Stock 4.47 0.99 0.91 0.91 0.91
Increase in Debtors 2.86 0.72 0.60 0.60 0.60
Repayment of Term Loan 3.15 3.15 3.15 3.15 3.15
Taxation 0.30 0.46 0.58 1.66 2.13

TOTAL : 28.28 5.31 5.24 6.32 6.79

Opening Cash & Bank Balance - 2.11 3.78 6.38 10.12

Add : Surplus 2.11 1.66 2.60 3.74 5.38

Closing Cash & Bank Balance 2.11 3.78 6.38 10.12 15.50
PROJECTED PROFITABILITY STATEMENT

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

Capacity Ulisation %
A) SALES

Gross Sale(Sugar Candy) 57.00 71.40 83.40 95.40 107.40

Other Income 0.15 0.15 0.15 0.15 0.15

Total (A) 57.15 71.55 83.55 95.55 107.55

B) COST OF SALES

Raw Mateiral Consumed 35.43 44.36 51.80 59.24 66.68

Elecricity Expenses 0.79 0.95 1.11 1.27 1.43
Repair & Maintenance 2.85 3.57 4.17 4.77 5.37
Labour & Wages 7.56 8.32 9.15 10.06 11.07
Depreciation 2.53 2.20 1.87 1.60 1.36
Cost of Production 49.16 59.40 68.10 76.94 85.91

Add: Opening Stock /WIP - 2.70 3.24 3.78 4.32

Less: Closing Stock /WIP 2.70 3.24 3.78 4.32 4.86

Cost of Sales (B) 46.46 58.86 67.56 76.40 85.37

C) GROSS PROFIT (A-B) 10.69 12.69 15.99 19.15 22.18

19% 18% 19% 20% 21%
D) Bank Interest (Term Loan ) 1.60 1.26 0.91 0.56 0.22
Bank Interest ( C.C. Limit ) 0.64 0.64 0.64 0.64 0.64
E) Salary to Staff 3.12 3.37 3.64 3.93 4.24
F) Selling & Adm Expenses Exp. 2.28 2.86 5.00 5.72 6.44

TOTAL (D+E) 7.65 8.13 10.20 10.86 11.55

H) NET PROFIT 3.04 4.57 5.79 8.29 10.63

I) Taxation 0.30 0.46 0.58 1.66 2.13

J) PROFIT (After Tax) 2.74 4.11 5.21 6.63 8.51

K) DIVIDEND - - - - -

L) RETAINED PROFIT 2.74 4.11 5.21 6.63 8.51

COMPUTATION OF MANUFACTURING OF SUGAR CANDY

Items to be Manufactured Sugar Candy

Manufacturing Capacity Sugar Candy 800.00 kgs Per Day

-

No. of Working Hour 10

No of Working Days per month 25

No. of Working Day per annum 300

Total Production per Annum Sugar Candy 240.00 Tonne per Annum
-
Year
Capacity Utilization

Sugar Candy
IST YEAR 50% 120.00
IIND YEAR 60% 144.00
IIIRD YEAR 70% 168.00
IVTH YEAR 80% 192.00
VTH YEAR 90% 216.00

COMPUTATION OF SALE

Sugar Candy
Particulars IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

Op Stock - 6.00 7.20 8.40 9.60

Production 120.00 144.00 168.00 192.00 216.00
120.00 150.00 175.20 200.40 225.60
Less : Closing Stock 6.00 7.20 8.40 9.60 10.80
Net Sale 114.00 142.80 166.80 190.80 214.80

Sale Price Per tonne 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00

Sale (in Lacs) 57.00 71.40 83.40 95.40 107.40

COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

Finished Goods
(15 Days requirement) 2.70 3.24 3.78 4.32 4.86
Raw Material
(15 Days requirement) 1.77 2.22 2.59 2.96 3.33

Closing Stock 4.47 5.46 6.37 7.28 8.19

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Total
Amount

Stock in Hand 4.47

Sundry Debtors 2.86

7.33

Sundry Creditors 0.83

Working Capital Requirement 6.50

Margin @10% 0.65

Working Capital Finance 5.85

BREAK UP OF LABOUR

Particulars Wages No of Total

Per Month Employees Salary

Plant Operator 15,000.00 1 15,000.00

Skilled Worker 10,000.00 1 10,000.00
Unskilled Worker 6,000.00 3 18,000.00
Casual Labour 5,000.00 4 20,000.00
63,000.00

Annual Cost ( in lacs) 7.56

BREAK UP OF SALARY

Particulars Salary No of Total

Per Month Employees Salary
Accountant 10,000.00 1 10,000.00
Marketing Executive 8,000.00 2 16,000.00

Total Salary Per Month 26,000.00

Annual Cost ( in lacs) 3.12

COMPUTATION OF ELECTRICITY
(A) POWER CONNECTION

Total Working Hour per day 10 Hrs

Electric Load Required 6 KW
Load Factor 0.08
Electricity Charges 8 per unit
Total Working Days 300
Electricity Charges ( 10 Hrs Per day )
=6*300 * 8 * 10 1,44,000.00
Add : Minimim Charges (@ 10%) 14,400.00
1,58,400.00

Total cost of Power & Fuel at 100% 1.58

Year Capacity Amount

(in Lacs)

IST YEAR 50% 0.79

IIND YEAR 60% 0.95
IIIRD YEAR 70% 1.11
IVTH YEAR 80% 1.27
VTH YEAR 90% 1.43
COMPUTATION OF DEPRECIATION

Description Land Plant & Furniture TOTAL

Machinery

Rate of Depreciation 15.00% 10.00%

Opening Balance Leased - - -
Addition - 16.50 1.00 17.50
- 16.50 1.00 17.50
Less : Depreciation - 2.48 0.05 2.53
WDV at end of Ist year - 14.03 0.95 14.98
Additions During The Year - - - -
- 14.03 0.95 14.98
Less : Depreciation - 2.10 0.10 2.20
WDV at end of IInd Year - 11.92 0.86 12.78
Additions During The Year - - - -
- 11.92 0.86 12.78
Less : Depreciation - 1.79 0.09 1.87
WDV at end of IIIrd year - 10.13 0.77 10.90
Additions During The Year - - - -
- 10.13 0.77 10.90
Less : Depreciation - 1.52 0.08 1.60
WDV at end of IV year - 8.61 0.69 9.31
Additions During The Year - - - -
- 8.61 0.69 9.31
Less : Depreciation - 1.29 0.07 1.36
WDV at end of Vth year - 7.32 0.62 7.94
REPAYMENT SCHEDULE OF TERM LOAN 11%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

IST YEAR Opening Balance
Ist Quarter 15.75 - 15.75 0.43 0.79 14.96
Iind Quarter 14.96 - 14.96 0.41 0.79 14.18
IIIrd Quarter 14.18 - 14.18 0.39 0.79 13.39
Ivth Quarter 13.39 - 13.39 0.37 0.79 12.60
1.60 3.15
IIND YEAR Opening Balance
Ist Quarter 12.60 - 12.60 0.35 0.79 11.81
Iind Quarter 11.81 - 11.81 0.32 0.79 11.03
IIIrd Quarter 11.03 - 11.03 0.30 0.79 10.24
Ivth Quarter 10.24 10.24 0.28 0.79 9.45
1.26 3.15
IIIRD YEAR Opening Balance
Ist Quarter 9.45 - 9.45 0.26 0.79 8.66
Iind Quarter 8.66 - 8.66 0.24 0.79 7.88
IIIrd Quarter 7.88 - 7.88 0.22 0.79 7.09
Ivth Quarter 7.09 7.09 0.19 0.79 6.30
0.91 3.15
IVTH YEAR Opening Balance
Ist Quarter 6.30 - 6.30 0.17 0.79 5.51
Iind Quarter 5.51 - 5.51 0.15 0.79 4.73
IIIrd Quarter 4.73 - 4.73 0.13 0.79 3.94
Ivth Quarter 3.94 3.94 0.11 0.79 3.15
0.56 3.15
VTH YEAR Opening Balance
Ist Quarter 3.15 - 3.15 0.09 0.79 2.36
Iind Quarter 2.36 - 2.36 0.06 0.79 1.58
IIIrd Quarter 1.58 - 1.58 0.04 0.79 0.79
Ivth Quarter 0.79 0.79 0.02 0.79 0.00
0.22 3.15
CALCULATION OF D.S.C.R

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

CASH ACCRUALS 5.26 6.31 7.09 8.23 9.87

Interest on Term Loan 1.60 1.26 0.91 0.56 0.22

Total 6.87 7.57 8.00 8.79 10.09

REPAYMENT
Instalment of Term Loan 3.15 3.15 3.15 3.15 3.15
Interest on Term Loan 1.60 1.26 0.91 0.56 0.22

Total 4.75 4.41 4.06 3.71 3.37

DEBT SERVICE COVERAGE RATIO 1.44 1.72 1.97 2.37 3.00

AVERAGE D.S.C.R. 2.10

BREAK EVEN POINT ANALYSIS

Year I II III IV V

Net Sales & Other Income 57.15 71.55 83.55 95.55 107.55
Less : Op. WIP Goods - 2.70 3.24 3.78 4.32
Add : Cl. WIP Goods 2.70 3.24 3.78 4.32 4.86

Total Sales 59.85 72.09 84.09 96.09 108.09

Variable & Semi Variable Exp.

Raw Material & Tax 35.43 44.36 51.80 59.24 66.68

Electricity Exp/Coal Consumption at 85% 0.67 0.81 0.94 1.08 1.21
Wages & Salary at 60% 6.41 7.01 7.67 8.40 9.19
Repair & Maintenance 2.85 3.57 4.17 4.77 5.37
Selling & adminstrative Expenses 80% 1.82 2.28 4.00 4.58 5.16
Intt. On Working Capital Loan 0.64 0.64 0.64 0.64 0.64
Total Variable & Semi Variable Exp 47.83 58.68 69.23 78.71 88.25

Contribution 12.02 13.41 14.86 17.38 19.84

Fixed & Semi Fixed Expenses

Electricity Exp/Coal Consumption at 15% 0.12 0.14 0.17 0.19 0.21

Wages & Salary at 40% 4.27 4.67 5.11 5.60 6.13
Interest on Term Loan 1.60 1.26 0.91 0.56 0.22
Depreciation 2.53 2.20 1.87 1.60 1.36
Selling & adminstrative Expenses 20% 0.46 0.57 1.00 1.14 1.29
Total Fixed Expenses 8.97 8.84 9.07 9.09 9.21

Capacity Utilization 50% 60% 70% 80% 90%

OPERATING PROFIT 3.04 4.57 5.79 8.29 10.63
BREAK EVEN POINT 37% 40% 43% 42% 42%
BREAK EVEN SALES 44.69 47.53 51.31 50.26 50.15
 DISCLAIMER

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