PROJECT REPORT

ON
TEA PROCESSING (MINI TEA FACTORY)
 2018
Kalneshwar Agrotech Private Limited
 LIST OF CHAPTERS
SL. NO. ITEMS PAGE NO.

1. THE PROJECT AT A GLANCE 01

2. INTRODUCTION 02

3. PROJECT DESCRIPTION 03

4. MARKET PROSPECT 04

5. TECHNOLOGICAL PROCESS 05

6. QUALITY CONTROL AND STANDARDS 07

7. CONSUMABLES, POWER AND UTILITY 08

8. INSTALLED CAPACITY 09

9. BASIS AND PRESUMPTIONS 10

10. PROJECT COST ESTIMATES AND 11

MEANS OF FINANCE
11. ECONOMIC VIABILITY AND FINANCIAL 13

ANALYSIS
 LIST OF ANNEXURES

SL. NO. ITEMS PAGE NO.

A. ESTIMATED COST OF THE PROJECT 15

B. PROPOSED MEANS OF FINANCE 15

C. WORKING CAPITAL ESTIMATES 16

D COST AND PROFITABILITY ESTIMATES 16

E. PROJECTED BALANCE SHEET 17

F. PROJECTED CASH FLOW STATEMENT 18

G. DEBT-SERVICE COVERAGE RATIO 19

H. BREAK-EVEN ANALYSIS 19

I. INTERNAL RATE OF RETURN 20

J. TERM LOAN REPAYMENT SCHEDULE 21

 LIST OF APPENDICES

SL. NO. ITEMS PAGE NO.

A1. COST OF LAND & BUILDING 22

A2. COST OF PLANT & MACHINERY 23

A3. MISC. FIXED ASSETS 23

A4. PRELIMINARY & PRE-OPERATIVE 23

EXPENSES
C1. MANPOWER REQUIREMENT & COST 24

C2. POWER & UTILITY 24

D1. REPAIR AND MAINTENANCE COST 25

D2. ESTIMATES OF INCOME 25

D3. INTEREST ON WORKING CAPITAL 25

D4. DEPRECIATION SCHEDULE 25

 CHAPTER-1

THE PROJECT AT A GLANCE

Sl. No. Particulars Description

A. Project Description
1. Proposed Project Mini CTC Tea Factory Unit
2. Capacity of the Plant/Unit Processed CTC Tea : 100000 Kg
(At 100% Capacity)
3. Year-wise Capacity Utilisation Yr 01 Yr 02 Yr 03 Yr 04 Yr 05
50% 60% 70% 70% 70%
B. Project Cost
1. Land Rs. 4,00,000.00
2. Civil Works & Buildings Rs. 27,44,000.00
3. Plant & Machinery Rs. 26,40,000.00
4. Fixed Assets Rs. 3,39,000.00
5. Pre-operative Expenses Rs. 3,96,000.00
6. Contingency & Escalation Rs. 3,06,000.00
7. Margin for Working Capital Rs. 1,75,000.00
Total Rs. 70,00,000.00
C. Means of Finance
1. Equity @ 40% Rs. 28,00,000.00
2. Loan from Bank @ 60% Rs. 42,00,000.00
Total Rs. 70,00,000.00
D. Financial Benchmarks
1. Break Even Point (at Operating 42.50%
Capacity on Third Year)
2. Average DSCR 1: 1.80
3. Internal Rate of Return 18.00%
E. Basic Assumptions
1. Power Connection and Rate Per 40 HP: Rate: Rs. 6.00/- Per Unit
Unit
2. Interest Rate Term Loan: 8%; WC Loan: 12%
3. Repayment Period 6 Years including moratorium period of 1 Year.
1
 CHAPTER-2

INTRODUCTION

2.1. Tea Processing is a crucial industrial activity in India. This is so because the country is
one of the major producer, consumer and exporter of tea. Tea is a natural beverage
brewed from the young leaves of an evergreen plant Camellia sinensis.

2.2. Tea gardens and tea industries are largely scattered covering a major part of India. The
crop is grown in the certain districts located in Assam, West Bengal, Kerala,
Karnataka and Tamil Nadu and to some extent in Tripura, Uttar Pradesh and
Himachal Pradesh. Though, tea is commercially cultivated in 16 states in India, of
which, Assam (52.0%), West Bengal (21.9%), Tamil Nadu (14.6 %) and Kerala
(7.1%) are accounted for more than 95% of the total tea production. Other traditional
and non-traditional states where tea is produced in small extents are Tripura,
Karnataka, Uttaranchal, Himachal Pradesh, Arunachal Pradesh, Manipur, Meghalaya,
Mizoram, Nagaland, Sikkim, Odisha and Bihar. Tea production in smallholding has
been growing worldwide.

2.3. The Tea Board has recently decided to approve setting up of mini and micro factories
by the small tea growers within their plantation areas, with an aim to improve
plucking standards and retain garden freshness. This is expected to help improve the
quality of tea processed from green leaves of small tea gardens, as the time needed for
transporting green tea leaves from the gardens to factories will be reduced. It will also
help retain the garden freshness of the green leaves.

2.4. Considering the potential market opportunity of such units, the present detail project
report has been developed. The main objective of such initiative is to productively
utilize the abundantly available resources of the local area and to enable uninterrupted
supply of the products to market throughout the year.

2.5. A detailed analysis has been carried out considering mainly the aspects mentioned
below:

2.5.1. Market and demand of the products.

2.5.2. Requirements of miscellaneous assets for the project.

2.5.3. Estimation of installed capacity and operation pattern.

2.5.4. Consumables, power & utilities and manpower requirements etc.

2.5.5. Estimation of the cost of the project and working capital requirements.

2.5.6. Means of Finance

2.5.7. Estimation of cost of operation, profitability and fund flow statements etc.

2.5.8. Implementation Schedule.

2.5.9. The total Project cost is estimated at Rs. 70.00 Lakhs which includes margin money
for working capital @ 25%.

2.5.10. The various profitability estimates and other financial indicators worked out as given
in the following pages are up to the satisfaction level.
2
 CHAPTER-3

PROJECT DESCRIPTION

3.1. The proposed project is that of setting up of a Tea Processing unit at suitable location.

3.2. The key products of the proposed project are as follows:

Processed CTC Black Tea

3.3. Mini tea processing factories would reduce difficulty of marketing green tea leaf. The
mini and micro factories will open up a huge chain of employment opportunities at
the garden level.

3.4. The proposed project would procure the raw materials locally. After processing, the
products would be supplied to the market through distributors/ wholesalers/retailers.
3
 CHAPTER-4

MARKET PROSPECT

4.1. Tea is India’s primary beverage with almost 85% of total households in the country
consuming tea. Demand supply gap has been increasing in India in recent years.
While tea consumption has been growing at 3-3.5% every year, there has been no
significant increase in plantation land in the last few years as per the market survey
report. Tea trading in India is done in two ways - auction and private selling. Market
reports are obtained from six major auction centres in India - Kolkata, Guwahati,
Silguri, Cochin, Coonoor and Coimbatore where bulk trading is carried out through
the suctions held in these centres.

4.2. The Cottage made CTC Tea has great demand among the consumers due to its special
manufacturing process, which imparts its quality and aroma. Besides, cottage organic
Tea (CTC and Orthodox), Green-Tea also has great market potential. Therefore, few
cottage tea factory could be set up in concentrated tea growing areas that will have a
steady market for its products.

4.3. Market Promotion plays a vital role for the generation of the potential customers
therefore, application of marketing strategies are recommended. Marketing plan of the
proposed project may include good quality maintenance, promotional campaign like
offering special discounts, referrals, advertisement and tying up with buying houses.
4
 CHAPTER-5

TECHNOLOGICAL PROCESS

5.1. The process of manufacturing CTC tea comprises of the following different process.

5.1.1.Spreading the leaf on Withering Trough: The collected green Leaf is spread upon the
withering trough, while spreading due emphasis is laid upon to remove source and old
dried leaves so that it will help to minimize the presence of stalks and help in producing
fine tea.

5.1.2. Withering: The process of withering involves partial removal of moisture from fresh
leaf and is carried out in order to condition the leaf physically for subsequent
processing. Besides, some chemical changes also take place during withering and these
are independent of the physical process. Thus, withering involves (a) Physical wither
and (b) Chemical wither. While the physical wither can be completed even in 3-4 hours,
however for completion of the chemical wither, a period of 12-16 hours is required as
such the withering trough can’t normally be used more than once a day. Withering is
carried out either by Natural Withering or by Trough withering system. The green
leaves that are spread upon the wire mess of withering trough are charged with cold and
warm air through an axial flow fan so that the moisture content is reduced to the desired
level. Generally the level of reduction in moisture depends upon the grades and quality
of tea, which is to be manufactured.

5.1.3. Rolling/Rotorvane: The withered leaf are rolled to rupture the leaf cells and release
of enzymes and to give a twist to the leaf. It is achieved by processing withered leaf in
Rotorvane. During rolling operation chemical changes among the principal constituents
of leaf start as soon as the juice of leaf is squeezed out in contact with the air. The
chemical changes are caused by the enzyme present in the leaf. The enzyme brings
about chemical changes but it does not change itself. Generally, leaf is rolled in
Rotorvane before send to further processing.

5.1.4. Operating on C.T.C Machines: After the leaves are rolled, they are put into the
C.T.C machine (i.e. cutting, tearing and curling machine). This machine cuts the leaf
into uniform size with maximum cell distortion leading to quicker and more even
oxidation during fermentation. The C.T.C machine is comprised of two rollers rotating
in opposite directions at the arranged speed. The speed of the two rollers are different,
one of the roller is fast rotating at a speed of around 675 revolutions per minute,
whereas the slow roller rotates at a speed of 60 to 73 revolutions per minute. Generally,
a constant clearance between the rollers is maintained. The roller segment is in sharp
condition, which cut the leaves three times. During the process it is specifically seen
that leafs are not heated as it destroys briskness and quality.

5
5.1.5. Fermenting: After processing in the C.T.C machine the leaf are fermented.
Fermentation of the tea leaf is a very important process in Tea manufacture for
briskness, strength, colour and quality largely depend upon it. The duration of
fermentation varies according to rise and fall of temperature.

A temperature of 76’F to 78’F represents the ideal temperature of the fermenting room
and it takes roughly between 1 to 2 hours in the fermenting process. The leaf processed
in C.T.C is spread on the fermenting floor or fermenting bed of fermenting machine.
Generally, they are spread at a thickness of half an inch. Fermentation begins as soon as
the juice of the leaf come into contact with the air enzyme present in the leaf being
about chemical changes among the constituents of the leaf cell such as latechins
(polypheno’s) and caffeine. When the leaf become bright red in the fermenting room it
is the best time to transfer to the drying room for firing.

5.1.6. Drying: After the requisite level of fermentation CTC leaf is transferred to the drying
room where the leaf is fed on the trays of mechanical dryers and fermented leaf is fired
at an inlet temperature of 200’F to 220’F to arrest fermentation process and to remove
additional moisture present. The exhaust temperature being 120’F to 135’F. The
thickness of spreading of CTC leaf being one fourth of inch. The fair revolution of the
quality drying machine should be 350 and the tray speed is 200. The final moisture
contained of the tea is kept at around 3%.

5.1.7. Sorting: The sorting process of the CTC leaf is very simple. At first tea is allowed to
pass through the sorter for separation of grades, during this process tea is also made free
from any foreign material, fibre and other proper grading which depend largely on size
(granule) of tea. After grading tea is packed in tea chest/jute bags of standard size and
sent to the auction centre.
6
 CHAPTER-6

QUALITY CONTROL AND STANDARDS

6.1. The Tea being an agriculture product, it is necessary to clean it from

impurities/foreign or unwanted material such as dust, fiber, wooden particle, small
stones and sand including small glass pieces, ferrous and non ferrous particles, paper,
plastics shreds, dead insects etc that may come from field or processing factory. These
alien particles do often get mixed at various stages of production and owing to the
lack of modern facilities at Tea factories these impurities can go unnoticed in Tea.

6.2. NO OBJECTION CERTIFICATE: The No objection Certificate (NOC) must be

obtained to commence and complete the construction of the factory and installation of
all machinery items as prescribed by Tea Board of India. The rules and regulations
under Tea Act 1953, the Tea (Marketing) Control Order -2003, the specifications of
the FSSAI and other rules and regulations imposed by the other Departments of the
Local, State and Central Governments must be followed.

6.3. WASTE MANAGEMENT: Tea industry does not pose any threat to the
environment. The industry does not generate much waste. It has been seen that a
significant portion of the waste are being re-used in some way or the other. However,
the industry should take up certain measures/actions, which may be useful in
improving & maintain the environmental performance of the industry.The overall
measures/actions that the industry may take up with an aim to improve the
environmental performance of the industry are as follows:

Maximum re-circulation / re-use of the

wastes. Conservation of domestic water.

Quality control laboratory should monitor the residence of pesticides in

finished

tea.

Generally finished tea is packed in poly-bags and these poly-bags are placed in
jute bags for final delivery. It is suggested that the plastics used for such
packaging should be of food grade in nature.

Tea industries may try to use food grade jute bags instead of odourless jute
bags as are currently being used.

Attempts should be made to use organic fertilizers and pesticides in place of

chemical fertilizers and pesticides.

Attempt should also be made to optimize the use of fertilizers and pesticides
during tea production.

Periodic (once in six months) monitoring of a few selected water sources

around the tea garden should be made.

Periodic monitoring of health condition of workers both in garden and

factory should be made.

6.4. EFFLUENT DISPOSAL: Disposal of any effluent out of the project unit should be
treated with recycling facility or dumped in such a way that these does not cause
hazard in the vicinity of the site.
6.5. ENERGY CONSERVATION: Proper care should be taken in running the
machineries and equipment to avoid over run and high electricity consumption. The
machineries selected for the plant should be most energy efficient for economical
production.

7
 CHAPTER-7

CONSUMABLES, POWER AND UTILITY

7.1. The major consumables required are as follows;

Green Tea Leaves

Packaging Bags/ Boxes

7.2. POWER:

The total requirement of power for the project is 34.34 KW. The total power supply
would be distributed in the following way;

Plant & Machinery - 29.84 KW

General Lighting - 4.50 KW

The details requirement is shown in Appendix-C2.

7.3. UTILITY:

WATER: Constant flow of water would be necessary in the operation of the plant.
Water would be obtained from bore well and can be stored in an overhead tank, from
where it will be supplied to the required areas. Process water should be free of mud
and suspended particles. It should be available at a pressure of 3 Kg/sq.cm.

OTHER UTILITIES: Other utilities includes fuel etc. those should be locally
available. Detail expenditure against the head is shown in Appendix- C2.

8
 CHAPTER-8

INSTALLED CAPACITY

8.1. In assessing the proposed plant capacity, due consideration has been given to
technological and financial factors, marketing considerations, availability of
consumables, infrastructure facilities and economic viability. The detailed
requirement of the plant and machineries to achieve the plant capacity is assessed by
the unit technician. While arriving at the requirement of various type of equipment
and machinery required for the unit, due considerations has been given to the
following points.

Minimum Wastage
High Productivity
Maximum flexibility in operation
Adequate stock by provision wherever necessary

The installed production capacity of the unit per annum is as follows;

Processed CTC Tea - 100 Ton

For the purpose of carrying out this economic viability of the proposed project, it is
assumed that the plant will operate at following efficiencies during the first 5(Five)
years.

Year 01 02 03 04 05

Capacity 50% 60% 70% 70% 70%

Utilization

9
 CHAPTER-9

BASIS AND PRESUMPTIONS

While deriving figures and projections in this Project report, following Basis and
Presumptions have been made.

9.1. The project is based on a single shift basis and 200 days of working schedule in a
year, working for 8 hours a day, 25 days a month.

9.2. The project cost and other projections etc. have been made on present market
conditions and the sources available within our sources only and therefore it may vary
on account of market fluctuations and with different suppliers and qualities.

9.3. The cost of machinery and equipment/materials indicated refer to a particular make
and the prices are approximate to these prevailing at the time of preparation of this
report.

9.4. Power rate is assumed at Rs.6.00 per unit and monthly fixed rental charges.

9.5. Water would be made available through bore well facility at the project site.

9.6. Manpower requirement for the project has been planned considering the size of the
unit.

9.7. Interest rates considered is 8% on term loan and 12.00% on Working capital loan for
financial assistance.

9.8. For repayment, a period of 6 years is planned with moratorium period of one year.

9.9. Insurance charges have been considered Lump Sum.

9.10. Repair and maintenance have been calculated at reasonably.

9.11. Depreciation shown has been calculated on Straight Line Method.

9.12. Non-refundable deposits, Preparation of detailed project report fees, Architecture fees,
traveling & Convenience amount, Know-how & Engineering fees, Application
processing fees, trial production, fees etc are considered under pre-operative
expenses.

9.13. Break Even Point & Rate of Return is calculated on optimum production condition
findings.

9.14. At the plant site, availability of unskilled labour is not a problem. Skilled and
unskilled labourcan be recruited for operating the plant. Initial training will be
required for smooth and efficient running of the plant. It is felt that the skilled
manpower available locally having some experience in operation can be recruited to
satisfy the manpower need.

9.15. Project would be set up at a site that is well connected by road and there is adequate
supply of power and water.

10
 CHAPTER-10

PROJECT COST ESTIMATES AND MEANS OF FINANCE

10.1. TOTAL PROJECT COST:

The Capital cost of the project has been estimated on the basis of installed capacity
assuming 200 working days per annum. The total cost of the Project including margin
for working capital has been estimated at Rs.70,00,000.00 as detailed in Annexure-A.

10.2. LAND, BUILDING AND CIVIL WORKS:

The approximate cost of civil works including Leveling, Building, Electrification,

Water Supply, Sanitation and Drainage etc will be Rs. 31,44,000

10.3. PLANT & MACHINERY:

The total cost of Plant & Machinery has been estimated at Rs. 26,40,000 as detailed in
Appendix-A2.

10.4. PLANT EXPENDITURE:

The total cost on Plant expenditure includes admissible taxes, transportation,

insurance of the machineries and installation etc.has been included as detailed in
Appendix-A2.

10.5. FIXED ASSET:

The cost of Misc. Fixed Assets has been estimated at around Rs. 3, 39,000 as detailed
in Appendix-A3. These include cost of furniture and fixture’s and office equipment.

10.6. PRELIMINARY & PRE-OPERATIVE EXPENDITURE:

An expenditure of Rs. 3, 96,000.00 has been earmarked on this account, as detailed in

Appendix- A4.

10.7. CONTINGENCY AND ESCALATION:

This has been calculated @ 5% on Civil Work, Plant & Machinery and Misc. Fixed
Assets to provide safeguard against escalation of prices or any other unforeseen
expenditure. The total amount works out to Rs. 3,06,000

10.8. WORKING CAPITAL ESTIMATES:

The details of the Working Capital requirements of the proposed unit have been
shown in Annexure-C. In arriving at the working capital estimates, various
components vis Administrative Expenses/Consumables and Working Expenses have
been taken on the basis of usual norms. The Working Capital requirement is proposed
to be met from project margin money and cash credit loan borrowings from the
financial institution.

11
10.9. MEANS OF FINANCE:

The Proposed Project Cost of Rs. 70.00 Lakhs would be financed under MSME
development schemes of financial institutions/commercial banks, in the following
manner as shown below.

1. LOAN FROM BANK/FI @ 60% = 42.00 LAKHS

2. PROMOTERS CONSTRIBUTION @ 40% = 28.00 LAKHS

TOTAL = 70.00 LAKHS

10.10. DEBT-EQUITY RATIO:

Based on the above financing pattern, the Debt-Equity ratio of the Project is 1.5:1.
12
 CHAPTER-11

ECONOMIC VIABILITY
AND
FINANCIAL ANALYSIS

11.1. COST OF PRODUCTION:

The cost of production has been estimated annually for the first five years of operation.
The various cost components taken into account are cost of administrative expenses,
consumable stores, utilities, wages and salaries, repairs and maintenance, insurance,
interest rates, taxes etc. depreciation. The detailed cost of production has been shown in
Annexure-D.

11.2. REPAIR & MAINTENANCE:

Cost under Repair and Maintenance expenses have been assessed by charging 1% on
Land & Building, 2% on Machineries and 1.5% on Fixed Assets on first year with
increase of 2% on subsequent years as detailed in Appendix-D1.

11.3. ADMINISTRATIVE EXPENSES:

This has been considered in the cost and profitability statement under other expenses
etc.

11.4. SELLING EXPENSES:

This has been considered in the cost and profitability statement under other expenses
etc.

11.5. DEPRECIATION:

In calculating the cost of operation, depreciation has been calculated under straight line
method after absorbing the pre-operative and contingencies expenses as shown in
Appendix-D4.

11.6. FINANCIAL CHARGES:

The interest on proposed term loan amount of Rs. 42.00 Lakhshas been calculated@
8% being the rate of interest. The interest calculation for various years after considering
the repayments due in respective years has been shown in Appendix-D3.

11.7. SALES REALISATION:

The total annual income of the Project is shown in Appendix-D2. Based on 70%
capacity utilisation, total turnover is estimated at Rs. 91.00 Lakhs on third year, the
sale for other years are estimated at different capacity utilisation as shown in
Appendix-D2.

13
11.8. NET PROFIT:

The proposed project is expected to generate profit from the first year of operation itself
and will gradually increase with increase in capacity utilisation.

11.9. INTERNAL ACCRUALS:

The net profit after tax with depreciation added back would make up sufficient internal
accruals to meet the term loan, working capital loan repayment obligations without any
liquidity problems.

11.10. FINANCIAL ANALYSIS:

The break-even point of the proposed project is 42.50%at 70% operating capacity on
third year as shown in Annexure-F.

The DSCR of the project has been worked out in Annexure-H with an average of
1:1.80, which is considered quite satisfactory to meet the repayment and interest
obligations in respect of the term loan.

The internal rate of return of the project works out to 18.00 %, which is satisfactory.
14
 ANNEXURE-A

ESTIMATED COST OF THE PROJECT

Particulars Amount (Rs. lacs)

Land & Site development 4.00
Building & Civil Works 27.44
Plant & Machinery 26.40
Misc. Fixed Assets 3.39
Preliminary & Pre-operative Expenses 3.96
Contingencies & Escalation @ 5% 3.06
Working Capital 1.75
TOTAL 70.00

ANNEXURE-B

PROPOSED MEANS OF FINANCE

Particulars Percent Amount (Rs. lacs)

EQUITY
A. Equity from Promoters 40% 28.00
B. Subsidy from Central/ State Govt. -
DEBT
Term Loan from Banks/ FIs 60% 42.00
TOTAL 100% 70.00
15
 ANNEXURE-C

WORKING CAPITAL ESTIMATES

(Rs. in lacs)
Period Total Current Assets
(Days) Year 1 Year 2 Year 3
Raw Materials 7 0.72 0.86 1.01
Power & Utility 30 0.18 0.22 0.26
Salary 30 1.14 1.15 1.16
Finished Goods 15 2.27 2.61 2.94
Receivables 15 2.67 3.21 3.74
Total 6.99 8.04 9.10

Working Capital Margin in Year 1

25%) 1.75

ANNEXURE-D

COST AND PROFITABILITY ESTIMATES

(Rs. in lacs)
Particulars Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6
A. INCOME
Production Capacity (Ton/ annum) 100 100 100 100 100 100
Capacity utilisation 50% 60% 70% 70% 70% 70%
Production/ annum at capacity utilisation 50 60 70 70 70 70
Total income/ annum 65.00 78.00 91.00 91.00 91.00 91.00
B. OPERATING EXPENSES
Raw Materials 37.55 45.06 52.57 52.57 52.57 52.57
Power & Utility 2.22 2.67 3.11 3.11 3.11 3.11
Salary 13.92 13.99 14.06 14.13 14.20 14.27
Repair & Maintenance 0.90 0.92 0.94 0.95 0.97 0.99
Other Expenses 0.65 0.78 0.91 0.91 0.91 0.91
Total Operating Expenses 55.24 63.42 71.59 71.68 71.77 71.86
Operating profit 9.76 14.58 19.41 19.32 19.23 19.14

C. FINANCIAL EXPENSES
Depreciation 3.02 3.02 3.02 3.02 3.02 3.02
Interest on Term Loan 3.36 3.05 2.38 1.71 1.04 0.36
Interest on Working Capital Loan 0.63 0.72 0.82 0.82 0.82 0.82
Net Profit 2.75 7.79 13.20 13.78 14.36 14.94
Net Cash Accruals 5.77 10.81 16.21 16.80 17.38 17.96
Principal Repayment 0.00 8.40 8.40 8.40 8.40 8.40
16
 ANNEXURE-E

PROJECTED BALANCE SHEET

(Rs. in lacs)
Particulars Impl. Period Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6
LIABILITIES
Promoters Capital
Promoters capital 28.00 28.00 28.00 28.00 28.00 28.00 28.00
Profit from P&L 2.75 10.54 23.74 37.52 51.88 66.83
Sub Total 28.00 30.75 38.54 51.74 65.52 79.88 94.82
Secured Loan
Term loan 42.00 42.00 33.60 25.20 16.80 8.40 0.00
CC limit from Banks 5.24 6.03 6.83 6.83 6.83 6.83
Sub Total 42.00 47.24 39.63 32.02 23.62 15.23 6.83
Unsecured Loan
Current Liabilities
Total of Liabilities 70.00 77.99 78.17 83.76 89.14 95.11 101.65

ASSETS

Gross Fixed Block 64.29 64.29 64.29 64.29 64.29 64.29 64.29
Sub Total (a) 64.29 64.29 64.29 64.29 64.29 64.29 64.29
Depreciation
Cum. Depreciation 3.02 6.03 9.05 12.06 15.08 18.10
Sub Total (b) 0.00 3.02 6.03 9.05 12.06 15.08 18.10
Net Fixed Asset Block (a-b) 64.29 61.27 58.25 55.24 52.22 49.21 46.19
Current Asset Block
W.I.P.(Inventories)
Cash & Bank balance 1.75 6.16 8.71 16.65 25.44 34.82 44.77
Other Current Assets 6.99 8.04 9.10 9.10 9.10 9.10
Sub-Total 1.75 13.15 16.75 25.75 34.54 43.92 53.87
Preliminary expenses not written off 3.96 3.57 3.17 2.77 2.38 1.98 1.58
Total of Assets 70.00 77.99 78.17 83.76 89.14 95.11 101.65

17
 ANNEXURE-F

PROJECTED CASHFLOW STATEMENT

(Rs. in lacs)
Particulars Impl. Period Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6
SOURCES OF
FUND

Profit after tax with depreciation &

interest added back 9.76 14.58 19.41 19.32 19.23 19.14
Increase in Promoters capital 28.00
Increase in un-secured loan
Increase in Term Loan 42.00
Increase in Bank borrowing (WC) 5.24 0.79 0.79
Prelim. exp. W/off 0.40 0.40 0.40 0.40 0.40 0.40
Decrease in WIP(inventory)
Decrease in Other current assets
Sub Total 70.00 15.39 15.77 20.60 19.72 19.63 19.54

USES OF FUND
Preliminary expenses 3.96
Capital expenditure 64.29
Increase in WIP
Repayment of Term Loan 0.00 8.40 8.40 8.40 8.40 8.40
Decrease in unsecured loan
Interest payment
Term Loan 3.36 3.05 2.38 1.71 1.04 0.36
Other bank(W.C) 0.63 0.72 0.82 0.82 0.82 0.82
Increase in Working capital 6.99 1.06 1.06
Decrease in Other current liabilities
Sub Total 68.25 10.98 13.23 12.65 10.93 10.25 9.58

Opening cash/bank balance 0.00 1.75 6.16 8.71 16.65 25.44 34.82
Surplus/Deficit 1.75 4.42 2.54 7.94 8.79 9.37 9.96
Closing cash/bank balance 1.75 6.16 8.71 16.65 25.44 34.82 44.77
18
 ANNEXURE-G

DEBT-SERVICE COVERAGE RATIO

(Rs. in lacs)
Year 1 2 3 4 5 6
Profit After Tax (Net Profit) 2.75 7.79 13.20 13.78 14.36 14.94
Depreciation 3.02 3.02 3.02 3.02 3.02 3.02
Interest 3.36 3.05 2.38 1.71 1.04 0.36
Total 9.13 13.86 18.59 18.50 18.41 18.32
Interest 3.36 3.05 2.38 1.71 1.04 0.36
Loan Repayment 0.00 8.40 8.40 8.40 8.40 8.40
Total 3.36 11.45 10.78 10.11 9.44 8.76
DSCR 2.72 1.21 1.72 1.83 1.95 2.09

Average DSCR = 1.80

ANNEXURE-H

BREAK-EVEN ANALAYSIS

(Rs. in lacs)
Year 1 2 3

A. Net sales (Rs. lac) 65.00 78.00 91.00

B. Variable cost
Raw Materials 37.55 45.06 52.57
Power & Utility 2.22 2.67 3.11
Other Expenses 0.65 0.78 0.91
Interest on Working Capital Loan 0.63 0.72 0.82
Total variable cost 41.05 49.23 57.41
C. Contribution (A-B) 23.95 28.77 33.59
D. Fixed & Semi-fixed Costs
Salary 13.92 13.99 14.06
Repair & maintenance 0.90 0.92 0.94
Interest on Term Loan 3.36 3.05 2.38
Depreciation 3.02 3.02 3.02
Total fixed cost 21.19 20.97 20.39
E. BREAKEVEN POINT 88.51% 72.91% 60.71%
F. BEP at operating capacity 44.25% 43.75% 42.50%
G. Cash BEP 37.96% 37.46% 36.21%

19
 ANNEXURE-I

INTERNAL RATE OF RETURN

(Rs. in lacs)
Year 0 1 2 3 4 5 6
CASH OUTFLOW

Capital Expenditure 64.29 0.00 0.00 0.00 0.00 0.00 0.00

Working Capital 0.00 6.99 1.06 1.06 0.00 0.00 0.00
Total (A) 64.29 6.99 1.06 1.06 0.00 0.00 0.00

CASH INFLOW
Profit After Tax 2.75 7.79 13.20 13.78 14.36 14.94
Add: Depreciation 3.02 3.02 3.02 3.02 3.02 3.02
Add: Interest 3.36 3.05 2.38 1.71 1.04 0.36
Add: Salvage Value

Total (B) 0.00 9.13 13.86 18.59 18.50 18.41 18.32

NET FLOW (B-A) -64.29 2.14 12.80 17.54 18.50 18.41 18.32
IRR = 18%
20
 ANNEXURE-J

TERM LOAN REPAYMENT SCHEDULE

(Rs in lacs)
Month Year 1 2 3 4 5 6
Month 1 Opening balance 42.00 42.00 33.60 25.20 16.80 8.40
Repayment 0.00 0.70 0.70 0.70 0.70 0.70
Interest (8%) 0.28 0.28 0.22 0.17 0.11 0.06
Closing balance 42.00 41.30 32.90 24.50 16.10 7.70
Month 2 Opening balance 42.00 41.30 32.90 24.50 16.10 7.70
Repayment 0.00 0.70 0.70 0.70 0.70 0.70
Interest 0.28 0.28 0.22 0.16 0.11 0.05
Closing balance 42.00 40.60 32.20 23.80 15.40 7.00
Month 3 Opening balance 42.00 40.60 32.20 23.80 15.40 7.00
Repayment 0.00 0.70 0.70 0.70 0.70 0.70
Interest 0.28 0.27 0.21 0.16 0.10 0.05
Closing balance 42.00 39.90 31.50 23.10 14.70 6.30
Month 4 Opening balance 42.00 39.90 31.50 23.10 14.70 6.30
Repayment 0.00 0.70 0.70 0.70 0.70 0.70
Interest 0.28 0.27 0.21 0.15 0.10 0.04
Closing balance 42.00 39.20 30.80 22.40 14.00 5.60
Month 5 Opening balance 42.00 39.20 30.80 22.40 14.00 5.60
Repayment 0.00 0.70 0.70 0.70 0.70 0.70
Interest 0.28 0.26 0.21 0.15 0.09 0.04
Closing balance 42.00 38.50 30.10 21.70 13.30 4.90
Month 6 Opening balance 42.00 38.50 30.10 21.70 13.30 4.90
Repayment 0.00 0.70 0.70 0.70 0.70 0.70
Interest 0.28 0.26 0.20 0.14 0.09 0.03
Closing balance 42.00 37.80 29.40 21.00 12.60 4.20
Month 7 Opening balance 42.00 37.80 29.40 21.00 12.60 4.20
Repayment 0.00 0.70 0.70 0.70 0.70 0.70
Interest 0.28 0.25 0.20 0.14 0.08 0.03
Closing balance 42.00 37.10 28.70 20.30 11.90 3.50
Month 8 Opening balance 42.00 37.10 28.70 20.30 11.90 3.50
Repayment 0.00 0.70 0.70 0.70 0.70 0.70
Interest 0.28 0.25 0.19 0.14 0.08 0.02
Closing balance 42.00 36.40 28.00 19.60 11.20 2.80
Month 9 Opening balance 42.00 36.40 28.00 19.60 11.20 2.80
Repayment 0.00 0.70 0.70 0.70 0.70 0.70
Interest 0.28 0.24 0.19 0.13 0.07 0.02
Closing balance 42.00 35.70 27.30 18.90 10.50 2.10
Month 10 Opening balance 42.00 35.70 27.30 18.90 10.50 2.10
Repayment 0.00 0.70 0.70 0.70 0.70 0.70
Interest 0.28 0.24 0.18 0.13 0.07 0.01
Closing balance 42.00 35.00 26.60 18.20 9.80 1.40
Month 11 Opening balance 42.00 35.00 26.60 18.20 9.80 1.40
Repayment 0.00 0.70 0.70 0.70 0.70 0.70
Interest 0.28 0.23 0.18 0.12 0.07 0.01
Closing balance 42.00 34.30 25.90 17.50 9.10 0.70
Month 12 Opening balance 42.00 34.30 25.90 17.50 9.10 0.70
Repayment 0.00 0.70 0.70 0.70 0.70 0.70
Interest 0.28 0.23 0.17 0.12 0.06 0.00
Closing balance 42.00 33.60 25.20 16.80 8.40 0.00

Principal Repayment 0.00 8.40 8.40 8.40 8.40 8.40

Interest 3.36 3.05 2.38 1.71 1.04 0.36

21
 APPENDIX-A1

COST OF LAND AND BUILDING

Particulars Area (Sqft) Rate (Rs) Amount (Rs)

Site levelling, approach road, construction of LS -- 400000
boundary wall, etc.
Say (Rs. in lacs) 4.00

Covered Area – 5,100 Square Feet

Particulars Area (Sqft) Rate (Rs) Amount (Rs)

Factory Building 2000 400 800000
Office cum Store Building 1500 450 675000
Staff Quarter 1200 500 600000
Genset Room 400 300 120000
Sub total 2195000
Add: Electrification, Water supply, Sanitation and Drainage @ 25% 548750
TOTAL 2743750
Say (Rs. in lacs) 27.44

22
 APPENDIX-A2

COST OF PLANT AND MACHINERY

Particulars Qty Amount (Rs)

SS Rotorvane 8" 1 2400000
CTC Machine (3 CUT) 3 1
Pair 8" Roller (8-10-8 TPI) 1
DF Furnace 1
Drier (Conventional) 1
Humidifier 1
Mydelton Sorter 1
Fibre Sorter 1
Vibro Sorter 1
Miscellaneous Equipment --
Sub total 2400000
Add: Taxes, transportation and installation etc @ 10% 240000
TOTAL 2640000
Say (Rs. in lacs) 26.40

APPENDIX-A3

MISCELLANEOUS FIXED ASSETS

Particulars Qty Rate (Rs) Amount (Rs)

Electrical Load Security and Transformer LS -- 168000
Furniture’s and Fixtures LS -- 90000
Miscellaneous items LS -- 50000
Sub total 308000
Add: Taxes, transportation and installation etc @ 10% 30800
TOTAL 338800
Say (Rs. in lacs) 3.39

APPENDIX-A4

PRELIMINARY AND PRE-OPERATIVE EXPENSES

Particulars Amount (Rs. lacs)

Travelling Expenses 48000
Non Refundable Deposits and Professional Fees 72000
Interest during implementation 222126
Miscellaneous expenses 54000
TOTAL 396126
Say (Rs. in lacs) 3.96

23
 APPENDIX-C1

MANPOWER REQUIREMENT & COST

The salaries and wages of different types of manpower is projected as follows:

Salary/ Cost/
Particulars of Employee Numbers Month annum
(Rs) (Rs)
Production Manager 1 15000 180000
Administrative Officer cum Accountant 1 10000 120000
Marketing and Sales Personnel 4 10000 480000
Machine Operator/Skilled Workers 4 6000 288000
Unskilled Workers 6 4500 324000
Expenses on salary in the 1st year (Rs) 1392000

Increase of 0.50% has been considered every subsequent year.

APPENDIX-C2

POWER AND UTILITY

A. Expenses on Power
Particulars Quantity Power (Kw) Total (Kw)
Plant & Machinery (Total HP of 40) 1 29.84 29.84
General Lighting 40 0.10 4.00
Total power requirement/ day (Kw) 33.84

No. of hrs/ day 8

Nos. of days/annum 200
Annual power requirement (kwh) 54144
Rate per unit (Rs) 6
Expenses on power (Rs) 324864
B: Estimate of Utility
Expenses on Water/Fuel/Other Utilities (Rs) 120000
Expenses on Power & Utility at 100% capacity (Rs) 444864

24
 APPENDIX-D1

REPAIR AND MAINTENANCE COST

(Rs. in lacs)
Particulars Cost (Rs) Contingencies Total Rate Amount (Rs)

Building & Civil Works 27.44 1.47 28.91 1.00% 0.29

Plant & Machinery 26.4 1.41 27.81 2.00% 0.56
Misc. Fixed Assets 3.39 0.18 3.57 1.50% 0.05
Expenses on repair &
maintenance in year 1 57.23 3.06 60.29 0.90

APPENDIX-D2

ESTIMATES OF INCOME

(Basis-100% Capacity Utilisation)

Price
per
Unit
Particulars Qty (Rs.) Amount (Rs.)
Processed Tea 100 Ton 130000 13000000
Total Sales per annum at 100% capacity (Rs) 100 Ton 13000000

APPENDIX-D3

INTEREST ON WORKING CAPITAL

(Rs. in lacs)
Particulars Year 1 Year 2 Year 3
Total Current Assets 6.99 8.04 9.10
Bank Loan (75%) 5.24 6.03 6.83
Interest @ 12% 0.63 0.72 0.82

APPENDIX-D4

DEPRECIATION SCHEDULE
(Rs in lacs)
Amount/
Description Cost (Rs) Contingencies Total Rate annum
(Rs)
Land & Site development 4.00 0.00 4.00 0.00% 0.00
Building & Civil Works 27.44 1.47 28.91 3.17% 0.92
Plant & Machinery 26.40 1.41 27.81 6.33% 1.76
Misc. Fixed Assets 3.39 0.18 3.57 9.50% 0.34
TOTAL 61.23 3.06 64.29 3.02