PROJECT REPORT

ON
OIL EXPELLER UDYOG

Mr. Vikas Patel

(Proprietor)

AT

Bhadawachh, Patti, Pratapgarh (U.P.), 230135.

Compiled By:-
Soyeb Ahmad Khan
Chartered Accountant
334, Katra Road, Karanpur
Pratapgarh, (U.P.)
Mob. +91-8188882850
E-mail: casoyebkhan@gmail.com
 Project at a glance
Name of Scheme : PRIME MINISTER’S EMPLOYMENT GENERATION PROGRAMME

Name of Proprietor : Mr. Vikas Patel

Father’s Name : Mr. Ram Jeet Patel

Mobile Number : +91- 9354037458

Constitution : Individual

Location (Factory) : Bhadawachh, Patti, Pratapgarh (U.P.), 230135.

Nature of Business : Manufacturing and Service

Name of Project : Oil Expeller Udyog

Nature of Industry : Small Scale Industry

Employment : 10 Person

Project Cost : Rs. 10,00,000.00

Proposed Loan : Rs 9,50,000.00

Government Subsidy : Rs. 3,50,000.00 (35% of Total Project Cost)

Proposed Term Loan : Rs. 5,70,000.00 (57.00% of Total Project Cost)

Proposed W/C Loan : Rs. 3,80,000.00 (38.00% of Total Project Cost)

Owner’s Contribution : Rs. 50,000.00 (5.00% of Total Project Cost)

Purpose of Loan : Purchase of Fixed Assets and Working Capital Requirements.

Repayment of Term Loan : Five Years

 Mr. Vikas Patel
(Proprietor)
Bhadawachh, Patti, Pratapgarh (U.P.), 230135.

Introduction:

The project relates to setting up a business of extraction of edible oil at Bhadawachh, Patti,
Pratapgarh (U.P.), 230135. The total cost of project is Rs. 10.00 lacs out of which a sum of Rs. 5.70
lacs as Term loan and Rs. 3.80 lacs as working capital loan from bank and The balance Amount of
Rs. 0.50 Lacs shall be met by the Proprietor’s own resources.

Product / Services & Process :

Services to be provided are extraction of edible oil from oil seeds. Consumption of edible oil is
substantial throughout the country. All Indian household use it every day. Various types of edible oils
are available in the country such as groundnut, sunflower, mustard oil etc. Edible oils are made from
respective oil seeds by extraction process and there are some national as well as regional brands.
The Northern region of the country consumes mustard oil in large quantity. Therefore, Utter Pradesh
is the preferred location..

About the Proprietor & Management :

Mr. Vikas Patel is the promoter of the proposed activity. The promoter, after being satisfied about the
scope of the proposed activity, decided to pool his resources to promote the proposed unit. As far as
the management of the unit is concerned, it will be managed by the promoter himself who has vast
experience in this field of activity and to manage the day to day activities. The firm will be employing
experienced staff which will be available locally. Considering, the vast scope and potential of the
promoter, it can be safely concluded that the firm will be a success under his able management.

Name of the Proprietor : Mr. Vikas Patel

Address : Bhadawachh, Patti, Pratapgarh (U.P.), 230135.

Market Potential :

Due to the peculiar food habits and preparation methods, Indians use large quantities of edible oils
every day. With growing population, demand is increasing every year. The country is importing semi
–processed edible oils since long. Mustard oil is preferred as a cooking medium by the people of
Northern Region. Bran separated on milling is used as cattle feed. There are many oil mills in Utter
Pradesh producing mustard oil but even then, mustard seeds are sold to other states and mustard oil
produced in other states is sold in Utter Pradesh in ample quantity. Thus, good quality mustard oil
produced locally can be sold in the market.

Basic Assumptions For The Report

➢ Report has been compiled on the basis of records produced, estimates and information and
explanations provided to us.

➢ Interest on Term Loan and Cash Credit Loan has been assumed to be 10.00%.

➢ Depreciation has been charges as per the Income Tax Act, 1961.

➢ The Promoters are well experienced and will get the business as per need.

➢ Government subsidy of Rs. 3,50,000 is to be received which will be kept with bank as fixed deposit for
three years. Thereafter it could be adjusted against the loan amount.

➢ Fixed Assets and Current Assets have been hypothecated for the purpose of security of Term
Loan & Cash Credit Loan
Total cost of the Project

Sl. no Particulars Amount (In INR)

1 Land & Building Self

2 Furniture 1,00,000.00

3 Plant & Machinery 5,00,000.00

4 Working Capital 4,00,000.00

Total Cost 10,00,000.00

Description of Fixed Assets

Item Sl. Description of Fixed Assets

no
Furniture 1. Furniture & Fixtures

Plant & Machinery 1. Oil Expeller Machine.

2. Other Equipments ( Tools, weighing scale, Motor Etc.).

3. Invertor, Battery, Stabilizer , Generator.

Means of Finance

Sl. no Particulars Amount (In INR)

1 Term Loan from Bank 5,70,000.00

2 Cash Credit Loan from Bank 3,80,000.00

3 Promoters Contribution 50,000.00

Total 10,00,000.00
Break-up of Element of Cost of Project Implementation :-

A. Wages & Salary :

The detail break-up is given below:-

Sl. no Particulars No. Rate Per Month Amount Rs

1 Full Time Skilled Labour 5 6,000.00 3,60,000.00

2 Part Time Skilled & Unskilled Labour 5 Lump-Sum 1,90,000.00

Total 5,50,000.00

In the Ist year of Operation Rs 5,50,000.00 thereafter 10% increase per year has been considered

B. Repairs & Maintenance:-

Repair & maintenance will be required of the machineries and Equipments for running the project
properly without interruption. This has been considered @ Rs 7,000/per month during the 1st year
of working thereafter 10% increase per year has been considered.

C. Administrative Expenses:-

This has been considered @ Rs 6,000/per month during the 1st year of working thereafter 10%
increase per year has been considered.

D. Motive Power requirement:

The Business of manufacturing & service of extraction of edible oil needs electricity and fuel for running.
Cost of which is considered on an average which is given as in the Projected Profitability statement.
Comments/Recommendation about the project:-
A. Location of the Project:
The place for the project is located at Bhadawachh, Patti, Pratapgarh (U.P.), 230135. The
location of the project is well connected from road & nearby urban & rural area, from where the
Business owner can procure essential goods to be used on in the services to be provided by him
on cheap & competitive prices which leads the projects to achieve the goal. So the location of the
project is looking to be very good.

B. Plant & Machinery and other Fixed Assets:-

The Plant & Machinery and other fixed assets for the project have been proposed to be
purchased from the reputed supplier/ Co. & will be of standard quality as well as at genuine
value.

C. Working Capital Requiremet:-

The requirement for working capital has been calculated at 50% capacity utilization level. Amount
of working capital loan will be used to pay for Purchase of raw materials, various direct and
indirect expenses such as wages & salary, Power and fuel, Repair & Maintenance exp,
Administrative exp etc.

D. Profitability of the Projects:-

The profitability of the project as shown in Annexure of Projected Profitability Statement is good
enough to pay back the loan as well as its interest & has been prepared for initial Five years
only.

Conclusion about the Project:-

As per the above analysis :-

* The project is technically feasible & economically viable.

** The cash accruals are enough of service the debts of financial institution.

*** The scope of the above Industries / Unit in near future is looking to be very good.

Note- We have compiled the above project report on the basis of information’s & explanation
provided to us by the proprietor of the said project.
 Mr. Vikas Patel
(Proprietor)
Bhadawachh, Patti, Pratapgarh (U.P.), 230135.

Profitability Analysis
50.00
43.92
45.00 39.93
40.00 36.30
35.00 33.00
30.00
30.00
25.00
20.00
15.00
10.00
2.90 3.52 3.53 4.06 4.20 4.65
5.00 1.73 2.58 2.30 3.03
0.00
1 2 3 4 5

Sale Net Profit Before Tax Net Cash Accrual

Working Capital Analysis

18.00 17.03
16.00 14.85
14.00
12.09
12.00
10.06
9.41
10.00
7.66
8.00
6.06
6.00 4.45 4.55 4.66 4.75 4.79 4.94
4.00 3.11
1.61
2.00
0.00
1 2 3 4 5

Current Assets Current Liabilities Working Capital Gap

Ratios Analysis
4.00
2.93 3.45
3.50 3.10 3.25
2.64
3.00
2.38
2.50 2.14
2.02
2.00
1.68
1.50
1.36
1.00

0.50
8.83% 9.56%
5.77% 6.97% 7.98%
0.00
1 2 3 4 5

DSCR Current Ratio Net Profit Ratio

 Mr. Vikas Patel
(Proprietor)
Bhadawachh, Patti, Pratapgarh (U.P.), 230135.
PROJECTED BALANCE SHEET AT THE END OF THE YEAR
Amount (In Rs.)
Liability Year 1 Year 2 Year 3 Year 4 Year 5
CAPITAL
Opening Balance - 1,98,163 3,78,161 5,92,710 11,95,248
Add: Capital Introduced 50,000 - - - -
Add: Subsidy - - - 3,50,000
Add: Profit 1,73,163 2,29,998 2,89,550 3,52,537 4,19,685
2,23,163 4,28,161 6,67,710 12,95,248 16,14,933
Less Drawing 25,000 50,000 75,000 1,00,000 1,25,000
Closing Balance 1,98,163 3,78,161 5,92,710 11,95,248 14,89,933

RESERVE & SURPLUS:

Capital Reserve ( Subsidy) 3,50,000 3,50,000 3,50,000 - -
(35% of Total Project Cost)

TERM LOAN
Opening Balance 4,77,507.17 3,75,329 2,62,452 1,37,755
Add: Taken During the Year 5,70,000 - - - -
Less: Repayment 92,493 1,02,178 1,12,877 1,24,697 1,37,755
Closing Balance 4,77,507 3,75,329 2,62,452 1,37,755 -

CASH CREDIT LOAN

Opening Balance - 3,80,000 3,80,000 3,80,000 3,80,000
Add: Taken During the Year 3,80,000 - - - -
Less: Repayment - - - - -
Closing Balance 3,80,000 3,80,000 3,80,000 3,80,000 3,80,000

CURRENT LIABILITIES
Sundry Creditors 65,000 74,750 85,963 98,857 1,13,686

Total 14,70,670 15,58,240 16,71,125 18,11,860 19,83,618

ASSETS
FIXED ASSETS
Opening Balance 5,15,000 4,42,250 3,79,962 3,26,613
Add: Purchases 6,00,000 - - - -
Less: Depreciation 85,000 72,750 62,288 53,349 45,711
5,15,000 4,42,250 3,79,962 3,26,613 2,80,902

MARGIN MONEY SUBSIDY:

Kept as Term Deposit 3,50,000 3,50,000 3,50,000 - -
(35% of Total Project Cost)

CURRENT ASSETS
Closing Stock 5,00,000 5,50,000 6,00,000 6,50,000 7,00,000
Debtors 75,000 90,000 1,08,000 1,29,600 1,55,520
Cash and Bank Balances 30,670 1,25,990 2,33,163 7,05,647 8,47,196

Total 14,70,670 15,58,240 16,71,125 18,11,860 19,83,618

 Mr. Vikas Patel
(Proprietor)
Bhadawachh, Patti, Pratapgarh (U.P.), 230135.
PROJECTED PROFITABILITY STATEMENT
Amount (In Rs.)
Particular Year 1 Year 2 Year 3 Year 4 Year 5
Production Capacity (%) 50% 60% 70% 80% 90%
Gross Reciepts 30,00,000 33,00,000 36,30,000 39,93,000 43,92,300
30,00,000 33,00,000 36,30,000 39,93,000 43,92,300
Less: Expenses
Raw Material Consumed 18,00,000 19,80,000 21,78,000 23,95,800 26,35,380
Wages & Salary 5,50,000 6,05,000 6,65,500 7,32,050 8,05,255
Power & Fuel Expense 85,000 93,500 1,02,850 1,13,135 1,24,449
Total Direct Expenses 24,35,000 26,78,500 29,46,350 32,40,985 35,65,084

Gross Profit 5,65,000 6,21,500 6,83,650 7,52,015 8,27,217

Staff Welfare Expenses 45,000 49,500 54,450 59,895 65,885
Repair & Maintenance 84,000 92,400 1,01,640 1,11,804 1,22,984
Administrative Expenses 72,000 79,200 87,120 95,832 1,05,415
Telephone Expense 15,000 16,500 18,150 19,965 21,962
Bank Interest on Term Loan 52,837 43,152 32,452 20,633 7,575
Bank Interest on CC Loan 38,000 38,000 38,000 38,000 38,000
Depreciation 85,000 72,750 62,288 53,349 45,711
Total Indirect Expenses 3,91,837 3,91,502 3,94,100 3,99,478 4,07,532

Net Profit Before Tax 1,73,163 2,29,998 2,89,550 3,52,537 4,19,685

Add :- Depreciation 85,000 72,750 62,288 53,349 45,711
Net Cash Accrual 2,58,163 3,02,748 3,51,838 4,05,886 4,65,396
Gross Profit Ratio 18.83% 18.83% 18.83% 18.83% 18.83%
Net Profit Ratio 5.77% 6.97% 7.98% 8.83% 9.56%
 Mr. Vikas Patel
(Proprietor)
Bhadawachh, Patti, Pratapgarh (U.P.), 230135.
PROJECTED CASH FLOW STATEMENT
Amount (In Rs.)
Particular Year 1 Year 2 Year 3 Year 4 Year 5

Operating Activities
Profit Before Taxes 1,73,163 2,29,998 2,89,550 3,52,537 4,19,685
Add:
Depreciation 85,000 72,750 62,288 53,349 45,711
Interest Expenses 90,837 81,152 70,452 58,633 45,575
Less :
Income Tax - - - - -
Adjustments:
Increase/(Decrease) in Creditors 65,000 9,750 11,213 12,895 14,828
(Increase)/Decrease in Inventories (5,00,000) (50,000) (50,000) (50,000) (50,000)
(Increase)/Decrease in Debtors (75,000) (15,000) (18,000) (21,600) (25,920)
(Increase)/Decrease in Other Current Assets - - - - -
Net cash accrual from operating Activities (A) -1,61,000 3,28,650 3,65,503 4,05,814 4,49,879

Investing Activities
(Purchase)/Sale of Fixed Assets (6,00,000) - - - -
Capital Increased/(Decreased) 50,000 - - - -
(Increase)/Decrease in Other Investments - - - - -
(Increase)/Decrease in Bank FDR - - - - -
(Drawings) (25,000) (50,000) (75,000) (1,00,000) (1,25,000)
Net cash accrual from Investing Activities (B) (5,75,000) (50,000) (75,000) (1,00,000) (1,25,000)

Financing Activities
Proceeds From Long Term Loans 5,70,000 - - - -
Proceeds From Cash Credit Loans 3,80,000 - - - -
Government Subsidy Received - - - 3,50,000 -
(Repayment) of Long Term Loans (92,493) (1,02,178) (1,12,877) (1,24,697) (1,37,755)
(Repayment) of Cash Credit Loans - - - - -
Interest Paid (90,837) (81,152) (70,452) (58,633) (45,575)
Net cash accrual from Financing Activities (C ) 7,66,670 (1,83,330) (1,83,330) 1,66,670 (1,83,330)
Total Cash Inflow / (Outflow) (A)+(B)+( C) 30,670 95,320 1,07,173 4,72,484 1,41,550

Opening Cash and Cash Equivalent - 30,670 1,25,990 2,33,163 7,05,647

Increase /(Decrease) in Cash and Cash Equivalent 30,670 95,320 1,07,173 4,72,484 1,41,550

Closing Cash and Cash Equivalent 30,670 1,25,990 2,33,163 7,05,647 8,47,197
 Mr. Vikas Patel
(Proprietor)
Bhadawachh, Patti, Pratapgarh (U.P.), 230135.

Bank Interest Schedule

Amount (In Rs.)
Particular Year 1 Year 2 Year 3 Year 4 Year 5

Term Loan (5 Years) 5,70,000

Interest Rate - 10.00%
1st year 2nd year 3rd year 4th year 5th year

Interest On Term Loan 52,837 43,152 32,452 20,633 7,575

(A) 52,837 43,152 32,452 20,633 7,575

Cash Credit Loan 3,80,000

Interest Rate - 10.00%
1st year 2nd year 3rd year 4th year 5th year

Interest On Cash Credit

38,000 38,000 38,000 38,000 38,000
Loan

(B) 38,000 38,000 38,000 38,000 38,000

Total Interest (A+B) 90,837 81,152 70,452 58,633 45,575

Depreciation Schedule
Amount (In Rs.)
Particular Year 1 Year 2 Year 3 Year 4 Year 5

Furniture
WDV B/F - 90,000 81,000 72,900 65,610
Addition 1,00,000 - - - -
Depreciation @10% 10,000 9,000 8,100 7,290 6,561
Closing WDV 90,000 81,000 72,900 65,610 59,049

Plant & Machinary

WDV B/F - 4,25,000 3,61,250 3,07,062 2,61,003
Addition 5,00,000 - - - -
Depreciation @15% 75,000 63,750 54,188 46,059 39,150
Closing WDV 4,25,000 3,61,250 3,07,062 2,61,003 2,21,853

Summury of Fixed Assets

WDV B/F - 5,15,000 4,42,250 3,79,962 3,26,613

Addition 6,00,000 - - - -
Total Depreciation 85,000 72,750 62,288 53,349 45,711
Closing WDV 5,15,000 4,42,250 3,79,962 3,26,613 2,80,902
 Mr. Vikas Patel
(Proprietor)
Bhadawachh, Patti, Pratapgarh (U.P.), 230135.

Ratio Analysis

Particular Year 1 Year 2 Year 3 Year 4 Year 5

Interest Coverage Ratio

Net Profit Before Tax+Interest 264000 311150 360002 411170 465260

Interest 90837 81152 70452 58633 45575

Interest Coverage Ratio 2.91 3.83 5.11 7.01 10.21

Average ICR for the whole term of 5 Year 5.81

Debt Service Coverage Ratio

Net Profit Before Tax+Depreciation+Interest 311000 345900 384290 426519 472971

Installment+Interest 145330 145330 145330 145330 145330

DSCR 2.14 2.38 2.64 2.93 3.25

Average DSCR for the whole term of 5 Year 2.67

Debt- Equity Ratio

Total Outside Liabilities 857507 755329 642452 517755 380000

Tangible Net Worth 548163 728161 942710 1195248 1489933

DER 1.56 1.04 0.68 0.43 0.26

Current Ratio 1.36 1.68 2.02 3.10 3.45

Current Assets 605670 765990 941163 1485247 1702716
Current Liabilities 445000 454750 465963 478857 493686

Gross Profit Ratio 18.83% 18.83% 18.83% 18.83% 18.83%

Gross Profit 565000 621500 683650 752015 827216.5
Sales/Gross Receipt 3000000 3300000 3630000 3993000 4392300

Net Profit Ratio 5.77% 6.97% 7.98% 8.83% 9.56%

Net Profit 173163 229998 289550 352537 419685
Sales/Gross Receipt 3000000 3300000 3630000 3993000 4392300
 Mr. Vikas Patel
(Proprietor)
Bhadawachh, Patti, Pratapgarh (U.P.), 230135.

REPAYMENT SCHEDULE

Amount of Term Loan Required : 5.70 Lacs

Repayment Period : 60 Monthly Installments
Loan Term 5 Years
Monthly Installments : Rs. 12110.82
Rate of Interest : % 10%
MONTHS OPENING BALANCE TOTAL REPAYMENT INTEREST PRINCIPAL INSTALLMENT CLOSING BALANCE
1 570000.00 12110.82 4750.00 7360.82 562639.18
2 562639.18 12110.82 4688.66 7422.16 555217.03
3 555217.03 12110.82 4626.81 7484.01 547733.02
4 547733.02 12110.82 4564.44 7546.37 540186.65
5 540186.65 12110.82 4501.56 7609.26 532577.39
6 532577.39 12110.82 4438.14 7672.67 524904.72
7 524904.72 12110.82 4374.21 7736.61 517168.11
8 517168.11 12110.82 4309.73 7801.08 509367.03
9 509367.03 12110.82 4244.73 7866.09 501500.94
10 501500.94 12110.82 4179.17 7931.64 493569.30
11 493569.30 12110.82 4113.08 7997.74 485571.56
12 485571.56 12110.82 4046.43 8064.39 477507.17
TOTAL 145329.79 52836.96 92492.83
13 477507.17 12110.82 3979.23 8131.59 469375.58
14 469375.58 12110.82 3911.46 8199.35 461176.23
15 461176.23 12110.82 3843.14 8267.68 452908.55
16 452908.55 12110.82 3774.24 8336.58 444571.97
17 444571.97 12110.82 3704.77 8406.05 436165.92
18 436165.92 12110.82 3634.72 8476.10 427689.82
19 427689.82 12110.82 3564.08 8546.73 419143.09
20 419143.09 12110.82 3492.86 8617.96 410525.13
21 410525.13 12110.82 3421.04 8689.77 401835.36
22 401835.36 12110.82 3348.63 8762.19 393073.17
23 393073.17 12110.82 3275.61 8835.21 384237.97
24 384237.97 12110.82 3201.98 8908.83 375329.14
TOTAL 145329.79 43151.75 102178.04
25 375329.14 12110.82 3127.74 8983.07 366346.06
26 366346.06 12110.82 3052.88 9057.93 357288.13
27 357288.13 12110.82 2977.40 9133.41 348154.72
28 348154.72 12110.82 2901.29 9209.53 338945.19
29 338945.19 12110.82 2824.54 9286.27 329658.92
30 329658.92 12110.82 2747.16 9363.66 320295.26
31 320295.26 12110.82 2669.13 9441.69 310853.57
32 310853.57 12110.82 2590.45 9520.37 301333.20
33 301333.20 12110.82 2511.11 9599.71 291733.50
34 291733.50 12110.82 2431.11 9679.70 282053.80
35 282053.80 12110.82 2350.45 9760.37 272293.43
36 272293.43 12110.82 2269.11 9841.70 262451.72
TOTAL 145329.79 32452.37 112877.41
37 262451.72 12110.82 2187.10 9923.72 252528.01
38 252528.01 12110.82 2104.40 10006.42 242521.59
39 242521.59 12110.82 2021.01 10089.80 232431.79
40 232431.79 12110.82 1936.93 10173.88 222257.90
41 222257.90 12110.82 1852.15 10258.67 211999.24
42 211999.24 12110.82 1766.66 10344.16 201655.08
43 201655.08 12110.82 1680.46 10430.36 191224.73
44 191224.73 12110.82 1593.54 10517.28 180707.45
45 180707.45 12110.82 1505.90 10604.92 170102.53
46 170102.53 12110.82 1417.52 10693.29 159409.24
47 159409.24 12110.82 1328.41 10782.41 148626.83
48 148626.83 12110.82 1238.56 10872.26 137754.57
TOTAL 145329.79 20632.63 124697.15
49 137754.57 12110.82 1147.95 10962.86 126791.71
50 126791.71 12110.82 1056.60 11054.22 115737.49
51 115737.49 12110.82 964.48 11146.34 104591.16
52 104591.16 12110.82 871.59 11239.22 93351.94
53 93351.94 12110.82 777.93 11332.88 82019.05
54 82019.05 12110.82 683.49 11427.32 70591.73
55 70591.73 12110.82 588.26 11522.55 59069.18
56 59069.18 12110.82 492.24 11618.57 47450.61
57 47450.61 12110.82 395.42 11715.39 35735.21
58 35735.21 12110.82 297.79 11813.02 23922.19
59 23922.19 12110.82 199.35 11911.46 12010.73
60 12010.73 12110.82 100.09 12010.73 0.00
TOTAL 145329.79 7575.21 137754.57
 Mr. Vikas Patel
(Proprietor)
Bhadawachh, Patti, Pratapgarh (U.P.), 230135.

PAY BACK PERIOD

Year Cash Accrual Cumulative Cash Accrual

I 258163 ₹ 2,58,163.04
II 302748 ₹ 5,60,911.29
III 351838 ₹ 9,12,748.92
IV 405886 ₹ 13,18,635.28
V 465396 ₹ 17,84,030.97

Cost of The Project = 10 Lacs

Pay back period of the project 3 Years 3 Months Approximate