PROJECT REPORT

Of

PANEER

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Paneer.

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 xxxxxxxxxx

2 Constitution (legal Status) xxxxxxxxxx

3 Father / Spouse Name xxxxxxxxxxxx

4 Unit Address : xxxxxxxxxxxxxxxxxxxxxxx

District : xxxxxxx
Pin: xxxxxxx State: xxxxxxxxxx
Mobile xxxxxxx

5 Product and By Product : PANEER

6 Name of the project / business activity proposed : PANEER PRODUCTION UNIT

7 Cost of Project : Rs.17.77 Lakhs

8 Means of Finance
Term Loan Rs.12 Lakhs
Own Capital Rs.1.78 Lakhs
Working capital Rs.4 Lakhs

9 Debt Service Coverage Ratio : 2.80

10 Pay Back Period : 5 Years

11 Project Implementation Period : 5-6 Months

12 Break Even Point : 25%

13 Employment : 8 Persons

14 Power Requirement : 30.00 HP

15 Major Raw materials : Milk, Citric Acid and Packing Material

16 Estimated Annual Sales Turnover (Max Capacity) : 109.06 Lakhs

17 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lakhs)

Particulars Amount
Land Own/Rented
Building /Shed 1000 Sq ft 5.00
Plant & Machinery 7.33
Furniture & Fixtures 1.00
Working Capital 4.44
Total 17.77

MEANS OF FINANCE
Particulars Amount
Own Contribution 1.78

Working Capital(Finance) 4.00

Term Loan 12.00

Total 17.77
 PANEER PRODUCTION

Introduction: Paneer is a South Asian variety of soft cheese obtained by

acid and heat coagulation of milk. It is a popular indigenous dairy product of
India, is similar to an unripened variety of soft cheese which is used in the
preparation of a variety of culinary dishes and snacks. It is obtained by heat
and acid coagulation of milk, entrapping almost all the fat, casein complexed
with denatured whey proteins and a portion of salts and lactose. It is a rich
source of high quality animal protein, fat, minerals and vitamins. The
production of paneer has been largely confined to the unorganized dairy
sector which employs traditional, inefficient methods of manufacture.

Uses & Market Potential: Paneer is a staple ingredient in many Indian

dishes and can be used fresh or deep fried. Paneer is commonly used in
sweets, snacks or with vegetables. Various other uses are follows:

 Paneer can be included in curries, particularly with tomatoes, potatoes

or peas.
  Cubes of paneer can be added to soup to provide texture.
 Fresh paneer can be boiled in sugar syrup and served as a sweet.
 Paneer itself has a rather bland flavour but it can act as a flavour carrier.
Therefore it is excellent marinated or used in a curry or sauce.

The paneer market in India grew at a CAGR of 12.5% during 2014-2019. As a

considerable part of population consists of vegetarians, paneer emerges as a
viable option. Apart from this, factors such as increasing population,
urbanisation rates, improved cold supply chain and growing deep freezer
penetration are also influencing the market growth. We can expect the market
to exhibit strong growth during 2020-2025.

Machinery Requirement: Basic machinery & equipments required are as

follows:

S No. Machine Unit Price

1. Milk Pasteurizer 1 125000
2. IBT Type Chilling Machine 1 145000
3. Pumps 1 18000
4. Paneer Press 1 65000
5. Weighing machine 1 15000
6. Milk Storage Tank 1 35000
7. Paneer Coagulation tank 2 70000
8. Balance Tank 1 15000
9. Boiler 1 165000
10. Other machinery & equipments 1 80000
Total Amount 733000

Raw Material: Basic raw material requirement are as follows:

1. Milk
2. Citric Acid
3. Packing Material
Manufacturing Process: The milk is procured from vendors and stored in
storage tanks prior to primary processing of milk, boiler is utilized to generate
steam which is utilized in various process of plant which generally includes
heating of milk in this case.

This steam is utilized in pasteurizer to heat the milk for pasteurization at

temperature ranging from 80 to 90 degree Celsius, after appropriate holding
time which is 5 minutes at high temperature steady state, milk is sent to
another holding tank which stores the milk so as to cool it to 80 to 75 degree
Celsius. As cooling curve for milk is exponential, it does not require any
significant cooling time even without any addition cooling arrangement. If a
faster cooling is to be achieved ambient water circulation through jackets of
holding tank s sufficient.

After this temperature is achieved, the milk is pumped into coagulation tank,
which has steam jackets to maintain temperature of milk, once steady state
temperature is achieved which is 70 degree Celsius for buffalo milk and 80
degree Celsius for cow milk, coagulant is added citric acid, lactic acid etc. The
milk is stirred gently and manually till whey separates out.

The mixture is allowed to settle and excess whey is drained out, till it reaches
close to top surface of coagulated mass. This coagulated mass is fed to paneer
press, which essential press the paneer in order to drain out most of water
within coagulated mass, in order to obtain a large block of paneer.

This paneer block is manually cut in required sizes, checked for required
weight, packed and stored in IBT Chilling Machine prior to dispatch, which is
essential in order to reduce bacterial growth as well as allows paneer to be
stored till dispatch.

Area:

The industrial setup requires space for Inventory, workshop or manufacturing

area, space for power supply utilities and auxiliary like Generator setup. Also
some of the area of building is required for office staff facilities,
documentation, office furniture, etc. Thus, the approximate total area required
for complete industrial setup is 1000 to 1400Sqft. Civil work cost will be
around 5 Lac Rs. (Approx.)

Power Requirement: The power consumption required to run all the

machinery could be approximated as 30hp.

Manpower Requirement: There are requirement of skilled machine

operators to run the machine set. Experience quality engineers are required
for desired quality control. Some helpers are also required to transfer the
material from one work station to other. Office staffs are required to maintain
the documentation. The approximate manpower required is 8 including 1
Supervisor, 1 Plant operator, 1 unskilled worker, 1 Helper and 1 Security
guard. 3 Skilled worker including Accountant, Manager and Sales person.

Bank Term Loan: Rate of Interest is assumed to be at 11%

Depreciation: Depreciation has been calculated as per the Provisions of

Income Tax Act, 1961

Approvals & Registration Requirement:

Basic registration required in this project:

 GST Registration
 Udyog Aadhar Registration (Optional)
 Choice of a Brand Name of the product and secure the name with
Trademark if require
 FSSAI Registration
Implementation Schedule:
S No. Activity Time required
1. Acquisition of premises 1-2 Months
2. Procurement & installation of Plant & Machinery 1-2 Months
3. Arrangement of Finance 1.5-2 Months
4. Requirement of required Manpower 1 Month
5. Commercial Trial Runs 1 Month
Total time Required (some activities shall run 5-6 Months
concurrently)

FINANCIALS
PROJECTED CASH FLOW STATEMENT

PARTICULARS I II III IV V

SOURCES OF FUND

Own Contribution 1.78 -

Reserve & Surplus 4.20 6.11 8.16 10.76 13.95
Depriciation & Exp. W/off 1.70 1.47 1.28 1.11 0.97
Increase In Cash Credit 4.00
Increase In Term Loan 12.00 - - - -
Increase in Creditors 0.70 0.12 0.08 0.08 0.08

TOTAL : 24.37 7.71 9.52 11.96 15.00

APPLICATION OF FUND

Increase in Fixed Assets 13.33 - - - -

Increase in Stock 1.20 0.19 0.19 0.19 0.20
Increase in Debtors 4.25 0.74 0.72 0.76 0.80
Repayment of Term Loan 1.33 2.67 2.67 2.67 2.67
Taxation - 0.61 1.22 3.23 4.18
Drawings 2.50 3.00 4.00 5.00 7.00

TOTAL : 22.61 7.21 8.80 11.85 14.85

Opening Cash & Bank Balance - 1.76 2.26 2.98 3.09

Add : Surplus 1.76 0.49 0.73 0.11 0.14

Closing Cash & Bank Balance 1.76 2.26 2.98 3.09 3.24
PROJECTED BALANCE SHEET

PARTICULARS I II III IV V

SOURCES OF FUND
Capital Account
Opening Balance - 3.48 5.98 8.92 11.45
Add: Additions 1.78 - - - -
Add: Net Profit 4.20 5.50 6.94 7.54 9.76
Less: Drawings 2.50 3.00 4.00 5.00 7.00
Closing Balance 3.48 5.98 8.92 11.45 14.21
CC Limit 4.00 4.00 4.00 4.00 4.00
Term Loan 10.66 8.00 5.33 2.66 - 0.00
Sundry Creditors 0.70 0.82 0.90 0.98 1.06

TOTAL : 18.84 18.79 19.15 19.10 19.28

APPLICATION OF FUND

Fixed Assets ( Gross) 13.33 13.33 13.33 13.33 13.33

Gross Dep. 1.70 3.17 4.45 5.57 6.53
Net Fixed Assets 11.63 10.16 8.88 7.76 6.80

Current Assets
Sundry Debtors 4.25 4.99 5.71 6.47 7.27
Stock in Hand 1.20 1.39 1.58 1.77 1.97
Cash and Bank 1.76 2.26 2.98 3.09 3.24

18.84 18.79 19.15 19.10 19.28

TOTAL :

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS I II III IV V

A) SALES
Gross Sale 63.72 74.88 85.67 97.07 109.06

Total (A) 63.72 74.88 85.67 97.07 109.06

B) COST OF SALES

Raw Material Consumed 42.08 49.09 54.00 58.91 63.81

Elecricity Expenses 2.05 2.28 2.51 2.74 2.97
Repair & Maintenance 3.19 4.49 6.00 7.57 8.72
Labour & Wages 4.79 5.08 5.53 6.09 6.69
Depreciation 1.70 1.47 1.28 1.11 0.97

Cost of Production 53.80 62.41 69.32 76.41 83.17

Add: Opening Stock /WIP - 0.44 1.06 1.22 1.38

Less: Closing Stock /WIP 0.44 1.06 1.22 1.38 1.55

Cost of Sales (B) 53.36 61.79 69.16 76.25 83.00

C) GROSS PROFIT (A-B) 10.36 13.08 16.51 20.81 26.06

16.25% 17.47% 19.27% 21.44% 23.90%

D) Bank Interest (Term Loan ) 1.30 1.06 0.77 0.48 0.18

ii) Interest On Working Capital 0.44 0.44 0.44 0.44 0.44
E) Salary to Staff 3.78 3.97 4.56 5.25 6.04
F) Selling & Adm Expenses Exp. 0.64 1.50 2.57 3.88 5.45

TOTAL (D+E) 6.16 6.97 8.34 10.05 12.11

H) NET PROFIT 4.20 6.11 8.16 10.76 13.95

6.6% 8.2% 9.5% 11.1% 12.8%
I) Taxation - 0.61 1.22 3.23 4.18

J) PROFIT (After Tax) 4.20 5.50 6.94 7.54 9.76

COMPUTATION OF MAKING OF PANEER

Item to be Manufactured Paneer

Manufacturing Capacity per day 200 kg

No. of Working Hour 8

No of Working Days per month 25

No. of Working Day per annum 300

Total Production per Annum 60,000 kg

Total Production per Annum 1,20,000 Packet of 500gm each
Year Capacity PANEER
Utilisation

I 45% 54,000.00

II 50% 60,000.00
III 55% 66,000.00
IV 60% 72,000.00
V 65% 78,000.00

COMPUTATION OF RAW MATERIAL

Quantity of Raw Total CostPer
Unit Unit Rate of
Item Name Material Annum (100%)
Milk 3,00,000.00 Ltr. 30 90,00,000.00
Packing material and Citric Acid Lumsum 3,50,000.00

Total 93,50,000.00

Total Raw material in Rs lacs 93.50

Raw Material Consumed Capacity Amount (Rs.)

Utilisation

I 45% 42.08
II 50% 49.09 5% Increase in Cost
III 55% 54.00 5% Increase in Cost
IV 60% 58.91 5% Increase in Cost
V 65% 63.81 5% Increase in Cost
COMPUTATION OF SALE
Particulars I II III IV V

Op Stock - 900.00 1,000.00 1,100.00 1,200.00

Production 54,000.00 60,000.00 66,000.00 72,000.00 78,000.00

54,000.00 60,900.00 67,000.00 73,100.00 79,200.00

Less : Closing Stock(5 Days) 900.00 1,000.00 1,100.00 1,200.00 1,300.00

Net Sale 53,100.00 59,900.00 65,900.00 71,900.00 77,900.00

Sale Price per packet of 500 gm 120.00 125.00 130.00 135.00 140.00

Sale (in Lacs) 63.72 74.88 85.67 97.07 109.06

COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS I II III IV V

Finished Goods
(5 Days requirement) 0.92 1.06 1.22 1.38 1.55
Raw Material
(2 Days requirement) 0.28 0.33 0.36 0.39 0.43

Closing Stock 1.20 1.39 1.58 1.77 1.97

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Amount Margin(10%) Net

Amount
Stock in Hand 1.20
Less:
Sundry Creditors 0.70
Paid Stock 0.50 0.05 0.45

Sundry Debtors 4.25 0.42 3.82

Working Capital Requirement 4.27

Margin 0.47

MPBF 4.27
Working Capital Demand 4.00
BREAK UP OF LABOUR

Particulars Wages No of Total

Per Month Employees Salary
Supervisor 12,000.00 1 12,000.00
Plant Operator 10,000.00 1 10,000.00
Unskilled Worker 6,000.00 1 6,000.00
Helper 4,000.00 1 4,000.00
Security Guard 6,000.00 1 6,000.00

38,000.00
Add: 5% Fringe Benefit 1,900.00
Total Labour Cost Per Month 39,900.00
Total Labour Cost for the year ( In Rs. Lakhs) 5 4.79

BREAK UP OF SALARY

Particulars Salary No of Total

Per Month Employees Salary
Manager 12,000.00 1 12,000.00
Accountant cum store keeper 10,000.00 1 10,000.00
Sales 8,000.00 1 8,000.00
Total Salary Per Month 30,000.00

Add: 5% Fringe Benefit 1,500.00

Total Salary for the month 31,500.00

Total Salary for the year ( In Rs. Lakhs) 3 3.78

COMPUTATION OF DEPRECIATION

Plant &
Description Land Building/shed Machinery Furniture TOTAL

Rate of Depreciation 10.00% 15.00% 10.00%

Opening Balance Leased - - -
Addition - 5.00 7.33 1.00 13.33
- 5.00 7.33 1.00 13.33
- - -
TOTAL 5.00 7.33 1.00 13.33
Less : Depreciation - 0.50 1.10 0.10 1.70
WDV at end of Ist year - 4.50 6.23 0.90 11.63
Additions During The Year - - - - -
- 4.50 6.23 0.90 11.63
Less : Depreciation - 0.45 0.93 0.09 1.47

WDV at end of IInd Year - 4.05 5.30 0.81 10.16

Additions During The Year - - - - -
- 4.05 5.30 0.81 10.16
Less : Depreciation - 0.41 0.79 0.08 1.28
WDV at end of IIIrd year - 3.65 4.50 0.73 8.88
Additions During The Year - - - - -
- 3.65 4.50 0.73 8.88
Less : Depreciation - 0.36 0.68 0.07 1.11
WDV at end of IV year - 3.28 3.83 0.66 7.76

Additions During The Year - - - - -

- 3.28 3.83 0.66 7.76
Less : Depreciation - 0.33 0.57 0.07 0.97
WDV at end of Vth year - 2.95 3.25 0.59 6.80
 REPAYMENT SCHEDULE OF TERM LOAN 11.0%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

I Opening Balance
Ist Quarter - 12.00 12.00 0.33 - 12.00
Iind Quarter 12.00 - 12.00 0.33 - 12.00
IIIrd Quarter 12.00 - 12.00 0.33 0.67 11.33
Ivth Quarter 11.33 - 11.33 0.31 0.67 10.67
1.30 1.33
II Opening Balance
Ist Quarter 10.67 - 10.67 0.29 0.67 10.00
Iind Quarter 10.00 - 10.00 0.28 0.67 9.33
IIIrd Quarter 9.33 - 9.33 0.26 0.67 8.67
Ivth Quarter 8.67 8.67 0.24 0.67 8.00
1.06 2.67
III Opening Balance
Ist Quarter 8.00 - 8.00 0.22 0.67 7.33

Iind Quarter 7.33 - 7.33 0.20 0.67 6.67

IIIrd Quarter 6.67 - 6.67 0.18 0.67 6.00
Ivth Quarter 6.00 6.00 0.17 0.67 5.33
0.77 2.67
IV Opening Balance
Ist Quarter 5.33 - 5.33 0.15 0.67 4.67
Iind Quarter 4.67 - 4.67 0.13 0.67 4.00
IIIrd Quarter 4.00 - 4.00 0.11 0.67 3.33
Ivth Quarter 3.33 3.33 0.09 0.67 2.67

0.48 2.67
V Opening Balance
Ist Quarter 2.67 - 2.67 0.07 0.67 2.00
Iind Quarter 2.00 - 2.00 0.06 0.67 1.33
IIIrd Quarter 1.33 - 1.33 0.04 0.67 0.67
Ivth Quarter 0.67 0.67 0.02 0.67 0.00

0.18 2.67

Door to Door Period 60 Months

Moratorium Period 6 Months
Repayment Period 54 Months
CALCULATION OF D.S.C.R

PARTICULARS I II III IV V

CASH ACCRUALS 5.90 6.98 8.22 8.65 10.73

Interest on Term Loan 1.30 1.06 0.77 0.48 0.18

Total 7.20 8.04 8.99 9.12 10.92

REPAYMENT
Repayment of Term Loan 1.33 2.67 2.67 2.67 2.67
Interest on Term Loan 1.30 1.06 0.77 0.48 0.18

Total 2.64 3.73 3.44 3.14 2.85

DEBT SERVICE COVERAGE RATIO 2.73 2.16 2.62 2.90 3.83

AVERAGE D.S.C.R. 2.80

COMPUTATION OF ELECTRICITY
(A) POWER CONNECTION

Total Working Hour per day Hours 8

Electric Load Required HP 30
Load Factor 0.7460
Electricity Charges per unit 7.50
Total Working Days 300
Electricity Charges 4,02,840.00

Add : Minimim Charges (@ 10%)

(B) DG set
No. of Working Days 300 days
No of Working Hours 0.3 Hour per day
Total no of Hour 90
Diesel Consumption per Hour 8
Total Consumption of Diesel 720
Cost of Diesel 65.00 Rs. /Ltr
Total cost of Diesel 0.47
Add : Lube Cost @15% 0.07
Total 0.54

Total cost of Power & Fuel at 100% 4.57

Year Capacity Amount

(in Lacs)

I 45% 2.05
II 50% 2.28
III 55% 2.51
IV 60% 2.74
V 65% 2.97
 DISCLAIMER

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