PROJECT REPORT

Of

POPCORN MAKING UNIT

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Popcorn 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 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 : POPCORN

6 Name of the project / business activity proposed : POPCORN MAKING UNIT

7 Cost of Project : Rs.24.56 Lakhs

8 Means of Finance
Term Loan Rs.17.1 Lakhs
Own Capital Rs.2.46 Lakhs
Working Capital Rs.5 Lakhs

9 Debt Service Coverage Ratio : 2.33

10 Pay Back Period : 5 Years

11 Project Implementation Period : 5-6 Months

12 Break Even Point : 30%

13 Employment : 8 Persons

14 Power Requirement : 20.00 HP

15 Major Raw materials : Corn Kernels, oil, salt & spices

16 Estimated Annual Sales Turnover (Max Capacity) : 113.00 Lakhs

17 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lakhs)

Particulars Amount
Land Own/Rented
Building /Shed 800 Sq ft 3.00
Plant & Machinery 15.00
Furniture & Fixtures 1.00
Working Capital 5.56
Total 24.56

MEANS OF FINANCE
Particulars Amount
Own Contribution 2.46

Working Capital(Finance) 5.00

Term Loan 17.10

Total 24.56
 POPCORN MAKING UNIT

Introduction: Popcorn (popped corn, popcorns or pop-corn) is a variety of

corn kernel, which expands and puffs up when heated. A popcorn kernels
strong hull contains the seed's hard, starchy endosperm with 14–20%
moisture, which turns to steam as the kernel is heated. Pressure from the
steam continues to build until the hull ruptures, allowing the kernel to
forcefully expand from 20 to 50 times its original size—and finally, cool. Each
kernel of popcorn contains a certain amount of moisture and oil. Unlike most
other grains, the outer hull of the popcorn kernel is both strong and
impervious to moisture and the starch inside consists almost entirely of a
hard type.

Benefits & Market Potential:

1. It helps to lose weight.
2. It can keep blood sugar in check.
 3. It contains whole grains.
4. Popcorn are full of vitamins & minerals.
5. It prevent disease & boast eyesight.

The popularity of popcorn as a snack is growing across the country and can be
seen as more and more retail stores are increasing the number of ready-to-eat
popcorn packets kept in their shelves. The global popcorn market is projected
to reach $15billion by 2023, registering a CAGR of 7.6 percent from 2017 to
2023, with ready-to-eat leading the segment. While established FMCG
businesses have either launched a popcorn product or are looking to launch
one, startups too have built ready-to-eat or ready-to-cook popcorn brands in
the domain.

Description of Machinery & Equipment:

Following machines are required for Popcorn manufacturing unit

1. Popcorn popper
2. Conveyor
3. Cooling tumbler
4. Masala Seasoning machine
5. Online dryer with vibro dryer
6. Slurry kettle
7. Caramelizer
8. Z conveyor
9. Pouch packaging Machine
10. Other machines & equipments( Air compressor, weighing scale)

These Machines are used to produce popcorn from the raw material. With the
help of this machine the work of mixing, extruding & packaging completes in a
very short span. The price of all machines will be Rs 15 Lac (Approx.)
excluding transportation and set-up cost.
Raw material requirement: The major consumables required are Corn
Kernels, oil, salt &spices etc. Average raw material (cost per Kg: Rs 90-140)

Manufacturing Process: The product is produced by heating kernels until

the internal moisture expands and pops through the outer shell of the kernel,
allowing the starch within to expand and cool. The machine will do everything
to produce crispy popcorns. Finally, you will need to pack the product with
the moisture proof packaging materials. Generally, corrugated outer cartons
are used for the transportation and bulk handling of the items.

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 800 to 1200Sqft. Civil work
cost will be Rs 3 Lac (Approx.)

Power Requirement –The power consumption required to run all

the machinery could be approximated as 20hp

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
Plant operator, 1 unskilled worker, 2 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 2.46 -

Reserve & Surplus 4.26 6.88 8.71 12.03 15.53
Depriciation & Exp. W/off 2.65 2.27 1.95 1.67 1.44
Increase In Cash Credit 5.00
Increase In Term Loan 17.10 - - - -
Increase in Creditors 2.03 0.30 0.32 0.28 0.29

TOTAL : 33.49 9.45 10.98 13.98 17.26

APPLICATION OF FUND

Increase in Fixed Assets 19.00 - - - -

Increase in Stock 4.41 0.61 0.64 0.64 0.66
Increase in Debtors 3.42 0.65 0.51 0.53 0.55
Repayment of Term Loan 1.90 3.80 3.80 3.80 3.80
Taxation 0.43 1.03 1.31 3.01 4.66
Drawings 2.50 3.00 4.00 5.50 7.50
TOTAL : 31.66 9.09 10.26 13.47 17.17

Opening Cash & Bank Balance - 1.83 2.19 2.92 3.43

Add : Surplus 1.83 0.36 0.72 0.51 0.09

Closing Cash & Bank Balance 1.83 2.19 2.92 3.43 3.51
PROJECTED BALANCE SHEET

PARTICULARS I II III IV V

SOURCES OF FUND
Capital Account
Opening Balance - 3.79 6.63 10.03 13.56
Add: Additions 2.46 - - - -
Add: Net Profit 3.83 5.84 7.40 9.02 10.87
Less: Drawings 2.50 3.00 4.00 5.50 7.50
Closing Balance 3.79 6.63 10.03 13.56 16.93
CC Limit 5.00 5.00 5.00 5.00 5.00
Term Loan 15.20 11.40 7.60 3.80 -
Sundry Creditors 2.03 2.33 2.65 2.93 3.21

TOTAL : 26.01 25.36 25.28 25.28 25.14

APPLICATION OF FUND

Fixed Assets ( Gross) 19.00 19.00 19.00 19.00 19.00

Gross Dep. 2.65 4.92 6.87 8.55 9.98
Net Fixed Assets 16.35 14.08 12.13 10.45 9.02

Current Assets
Sundry Debtors 3.42 4.07 4.57 5.10 5.65
Stock in Hand 4.41 5.02 5.67 6.30 6.96
Cash and Bank 1.83 2.19 2.92 3.43 3.51

26.01 25.36 25.28 25.28 25.14

TOTAL :

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS I II III IV V

A) SALES
Gross Sale 68.40 81.30 91.42 101.98 113.00

Total (A) 68.40 81.30 91.42 101.98 113.00

B) COST OF SALES

Raw Material Consumed 40.50 46.53 52.92 58.50 64.26

Elecricity Expenses 1.61 1.77 1.93 2.10 2.26
Repair & Maintenance 6.84 7.40 8.23 8.67 8.93
Labour & Wages 6.68 7.01 7.36 7.73 8.08
Depreciation 2.65 2.27 1.95 1.67 1.44

Cost of Production 58.28 64.99 72.39 78.67 84.96

Add: Opening Stock /WIP - 3.06 3.47 3.90 4.35

Less: Closing Stock /WIP 3.06 3.47 3.90 4.35 4.82

Cost of Sales (B) 55.22 64.57 71.96 78.22 84.49

C) GROSS PROFIT (A-B) 13.18 16.73 19.45 23.76 28.50

19.27% 20.58% 21.28% 23.30% 25.23%
D) Bank Interest (Term Loan ) 1.85 1.52 1.10 0.68 0.26
ii) Interest On Working Capital 0.55 0.55 0.55 0.55 0.55
E) Salary to Staff 3.78 4.54 5.44 6.42 7.64
F) Selling & Adm Expenses Exp. 2.74 3.25 3.66 4.08 4.52

TOTAL (D+E) 8.92 9.85 10.75 11.73 12.97

H) NET PROFIT 4.26 6.88 8.71 12.03 15.53

6.2% 8.5% 9.5% 11.8% 13.7%
I) Taxation 0.43 1.03 1.31 3.01 4.66

J) PROFIT (After Tax) 3.83 5.84 7.40 9.02 10.87

COMPUTATION OF MAKING OF POPCORN

Item to be Manufactured Popcorn

Manufacturing Capacity per day 300 Kg

No. of Working Hour 8

No of Working Days per month 25

No. of Working Day per annum 300

Total Production per Annum 90,000 Kg

Total Production per Annum 90,000 Kg

Year Capacity POPCORN

Utilisation

I 50% 45,000.00
II 55% 49,500.00
III 60% 54,000.00
IV 65% 58,500.00
V 70% 63,000.00

Raw Material Consumed Capacity Rate per Kg Amount (Rs.)

Utilisation

I 50% 90.00 40.50

II 55% 94.00 46.53
III 60% 98.00 52.92
IV 65% 100.00 58.50
V 70% 102.00 64.26
COMPUTATION OF SALE
Particulars I II III IV V

Op Stock - 2,250.00 2,475.00 2,700.00 2,925.00

Production 45,000.00 49,500.00 54,000.00 58,500.00 63,000.00

45,000.00 51,750.00 56,475.00 61,200.00 65,925.00

Less : Closing Stock(15 Days) 2,250.00 2,475.00 2,700.00 2,925.00 3,150.00

Net Sale 42,750.00 49,275.00 53,775.00 58,275.00 62,775.00

Sale Price per Kg 160.00 165.00 170.00 175.00 180.00

Sale (in Lacs) 68.40 81.30 91.42 101.98 113.00

COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS I II III IV V

Finished Goods
(15 Days requirement) 3.06 3.47 3.90 4.35 4.82
Raw Material
(10 Days requirement) 1.35 1.55 1.76 1.95 2.14

Closing Stock 4.41 5.02 5.67 6.30 6.96

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Amount Margin(10%) Net

Amount
Stock in Hand 4.41
Less:
Sundry Creditors 2.03
Paid Stock 2.39 0.24 2.15

Sundry Debtors 3.42 0.34 3.08

Working Capital Requirement 5.22

Margin 0.58

MPBF 5.22
Working Capital Demand 5.00
BREAK UP OF LABOUR

Particulars Wages No of Total

Per Month Employees Salary

Plant Operator 15,000.00 1 15,000.00

Unskilled Worker 12,000.00 1 12,000.00
Helper 10,000.00 2 20,000.00
Security Guard 6,000.00 1 6,000.00

53,000.00
Add: 5% Fringe Benefit 2,650.00
Total Labour Cost Per Month 55,650.00
Total Labour Cost for the year ( In Rs. Lakhs) 5 6.68

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 - 3.00 15.00 1.00 19.00
- 3.00 15.00 1.00 19.00
- - -
TOTAL 3.00 15.00 1.00 19.00
Less : Depreciation - 0.30 2.25 0.10 2.65
WDV at end of Ist year - 2.70 12.75 0.90 16.35
Additions During The Year - - - - -
- 2.70 12.75 0.90 16.35
Less : Depreciation - 0.27 1.91 0.09 2.27

WDV at end of IInd Year - 2.43 10.84 0.81 14.08

Additions During The Year - - - - -
- 2.43 10.84 0.81 14.08
Less : Depreciation - 0.24 1.63 0.08 1.95
WDV at end of IIIrd year - 2.19 9.21 0.73 12.13
Additions During The Year - - - - -
- 2.19 9.21 0.73 12.13
Less : Depreciation - 0.22 1.38 0.07 1.67
WDV at end of IV year - 1.97 7.83 0.66 10.45
Additions During The Year - - - - -
- 1.97 7.83 0.66 10.45
Less : Depreciation - 0.20 1.17 0.07 1.44
WDV at end of Vth year - 1.77 6.66 0.59 9.02
 REPAYMENT SCHEDULE OF TERM LOAN 11.0%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

I Opening Balance
Ist Quarter - 17.10 17.10 0.47 - 17.10
Iind Quarter 17.10 - 17.10 0.47 - 17.10
IIIrd Quarter 17.10 - 17.10 0.47 0.95 16.15
Ivth Quarter 16.15 - 16.15 0.44 0.95 15.20
1.85 1.90
II Opening Balance
Ist Quarter 15.20 - 15.20 0.42 0.95 14.25
Iind Quarter 14.25 - 14.25 0.39 0.95 13.30
IIIrd Quarter 13.30 - 13.30 0.37 0.95 12.35
Ivth Quarter 12.35 12.35 0.34 0.95 11.40
1.52 3.80
III Opening Balance
Ist Quarter 11.40 - 11.40 0.31 0.95 10.45

Iind Quarter 10.45 - 10.45 0.29 0.95 9.50

IIIrd Quarter 9.50 - 9.50 0.26 0.95 8.55
Ivth Quarter 8.55 8.55 0.24 0.95 7.60
1.10 3.80
IV Opening Balance
Ist Quarter 7.60 - 7.60 0.21 0.95 6.65
Iind Quarter 6.65 - 6.65 0.18 0.95 5.70
IIIrd Quarter 5.70 - 5.70 0.16 0.95 4.75
Ivth Quarter 4.75 4.75 0.13 0.95 3.80
0.68 3.80
V Opening Balance
Ist Quarter 3.80 - 3.80 0.10 0.95 2.85
Iind Quarter 2.85 - 2.85 0.08 0.95 1.90
IIIrd Quarter 1.90 - 1.90 0.05 0.95 0.95

Ivth Quarter 0.95 0.95 0.03 0.95 0.00

0.26 3.80

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 6.48 8.12 9.35 10.70 12.31

Interest on Term Loan 1.85 1.52 1.10 0.68 0.26

Total 8.34 9.63 10.45 11.38 12.57

REPAYMENT
Repayment of Term Loan 1.90 3.80 3.80 3.80 3.80
Interest on Term Loan 1.85 1.52 1.10 0.68 0.26

Total 3.75 5.32 4.90 4.48 4.06

DEBT SERVICE COVERAGE RATIO 2.22 1.81 2.13 2.54 3.09

AVERAGE D.S.C.R. 2.33

COMPUTATION OF ELECTRICITY
(A) POWER CONNECTION

Total Working Hour per day Hours 8

Electric Load Required HP 20
Load Factor 0.7460
Electricity Charges per unit 7.50
Total Working Days 300
Electricity Charges 2,68,560.00

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% 3.22

Year Capacity Amount

(in Lacs)

I 50% 1.61
II 55% 1.77
III 60% 1.93
IV 65% 2.10
V 70% 2.26
 DISCLAIMER

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