Assumptions

Milk handling litres per day

Year 1 Year 2 Year 3
Milk Sales per day 1500 1700 2000
Sales per year Sales per year (lakh litres) 5.25 5.95 7.0
Feed Feed sales (Tons) 50 75 100
Vaccines Vacicine sales (Number in lakh) 1000 1000 1000
Mineral mixture MM Sales (qunitals) 10 15 20
Deworming 3000 3500 4000
 Capital costs for 2000 LPD BMCU
Items Cost (Lakh Rs)
BMCU 8
DG set 2
AMCU 1.25
Cans- 75 1.5
Testing equipmnet 0.5
Furniture 0.25
Civil works 0.5
Total 14
DEPRECIATION CALCULATIONS
1st Year 2nd Year 3rd Year 4th Year 5th Year

machinary 60% 60% 60% 60% 60%

Opening balance 11.75 4.70 1.88 0.75 0.30

Depreciation 7.05 2.82 1.13 0.45 0.18

Closing balance 4.70 1.88 0.75 0.30 0.12

Furniture & cans 10% 10% 10% 10% 10%

Opening balance 1.75 1.58 1.42 1.28 1.15

Depreciation 0.175 0.16 0.14 0.13 0.11

Closing balance 1.58 1.42 1.28 1.15 1.03

TOTAL DEPRECIAT 7.23 2.98 1.27 0.58 0.30

INTEREST CALCULATIONS

TERM LOAN 7.00 Rupees in Lakhs

Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year 6th year 7th year
Interest rate 10% 10% 10% 10% 10% 10% 10%
Opening balance 7.00 5.61 7.00 5.61 4.22 2.83 1.44
Interest 0.70 0.56 0.70 0.56 0.42 0.28 0.14
Instalment 1.39 1.39 1.39 1.39 1.39 1.39 1.39 9.73
Closing balance 5.61 4.22 5.61 4.22 2.83 1.44 0.05

BAIF loan 6.00 Rupees in Lakhs

Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year 6th year 7th year
Interest rate 0% 1% 1% 1% 1% 1% 1%
Opening balance 0.00 6.00 4.94 3.89 2.85 1.82 0.80
Interest 0.00 0.06 0.05 0.04 0.03 0.02 0.01
Instalment 0.00 1.06 1.05 1.04 1.03 1.02 1.01 6.21
Closing balance 0.00 4.94 3.89 2.85 1.82 0.80 -0.21
2.73 Total interest

0.21 Total interest

Training cost Units No. of units
Livestock management Farmer numb 1000 400 300 300 1000
Clean Milk production Farmer numb 1000 400 300 300 1000
Exposure visits for farmers Farmer numb 100 100 100 100 300
Master trainers Trainers num 10 10 10
Paid Secretary training PS Numb ers 125 50 50 25 125
Presidents training Presidents n 125 50 50 25 125
Training materail for PS Numbers 200 200 200
Extension material - farmers Numbers 10000 5000 5000 0 10000
Costs Unit Rate
Livestock management Rs 100 0.4 0.3 0.3 1
Clean Milk production Rs 50 0.2 0.15 0.15 0.5
Exposure visits Rs 1000 1 1 1 3
Master trainers Rs 5000 0.5 0.5
Paid Secretary training Rs 3000 1.5 1.5
Presidents training Rs 2000 1 1 0.5 2.5
Training materail for PS Rs 2000 4 0 0 4
Extension material - farmers 50 2.5 2.5 0 5
Total training cost 11.1 4.95 1.95 18
 Business operations Total
Assumptions Units Year 1 Year 2 Year 3
Sales per day Litres 1500 1700 2000
Sales per year Lakh Litres 5.25 5.95 7 18.2
Feed sales per year Tons 50 75 100 225
Vacicine sales Numbers 1000 1000 1000 3000
MM Sales Quintal 10 15 20 45
Deworming doses Numbers 3000 3500 4000 10500
Income Units Unit Rate
Milk sales Litres 36 189 214.20 252 655.2
Feed sales Tons 17500 8.75 13.13 17.5 39.375
Vacicine sales Dose 12 0.12 0.12 0.12 0.36
MM Sales Quintal 8000 0.8 1.2 1.6 3.6
Dewormer Sales Dose 20 0.6 0.7 0.8 2.1
Total income 199.27 229.35 272.02 700.635
Expenses
Raw milk price Litres 30 157.5 178.50 210 546
Collection centre cost Rs 1 5.25 5.95 7 18.2
Primary transportation Rs 1.5 7.875 8.93 10.5 27.3
Chilling cost Rs 0.75 3.94 4.46 5.25 13.65
Labour charges Rs 0.005 0.03 0.03 0.04 0.091
Dairy transportation cost Rs 0.75 3.94 4.46 5.25 13.65
Feed purchase cost Tons 16000 8 12 16 36
Transportaion cost Rs 0.5 0.25 0.375 0.5 1.125
Vaccine purchase cost Dose 10 0.1 0.1 0.1 0.3
Mineral mixture purchase cost Quintal 7500 0.75 1.125 1.5 3.375
Dewormin Purchase Rs 18 0.54 0.63 0.72 1.89
interest 0.70 0.56 0.70 1.96
Office running costs 1.00 1.00 1.00 3.00
Total cost 189.86625 218.12 258.555 666.542
Surplus/Deficit 9.40 11.22 13.47 34.09
Staff cost
Manager Rs 20000 2.4 2.4 2.4 7.2
Supervisor Rs 10000 1.2 1.2 1.2 3.6
Workers Rs 5000 0.6 0.6 0.6 1.8
Total Staff cost 4.2 4.2 4.2 12.6
Net profit before Depreciation 5.2 7.0 9.3 21.5
Depreciation 7.2 3.0 1.3 0.6
Net profit before tax -2.0 4.0 8.0 20.9
Taxation 0.0 0.0 0.0 0.0
Net profit after taxation -2.0 4.0 8.0 20.9

CASH FLOW STATEMENT

SOURCES OF FUNDS
Particulars Year 1 Year 2 Year 3

Share Capital 1.00

BAIF Loan 6.00 -
Grants 11.10 4.95 1.95
Term loans 7.00
Net profit before depreaciation & taxes 5.20 7.02 9.27

Total 30.30 11.97 11.22 - -

DISPOSITION OF FUNDS
Capital expenditure 14.00 - - - -
Training costs 11.10 4.95 1.95
Loan repayment 1.39 1.39 1.39
Total 26.49 6.34 3.34

Opening balance 0.00 3.81 9.45

Surplus/Deficit 3.81 5.63 7.88
Closing balance 3.81 9.45 17.32
Break-Even Analysis
(Rs.in Lacs)

Particulars Variable Variable Variable % Fixed Fixed Fixed %

1st year 2nd year 3rd eyar 1st year 2nd year 3rd eyar

Raw Milk 157.50 178.50 210.00 100

Collection centre cost 5.25 5.95 7.00 100
Primary transportation 7.88 8.93 10.50 100
Chilling cost 3.94 4.46 5.25 100
Labour charges 0.03 0.03 0.04 100
Dairy transportation cost 3.94 4.46 5.25 100
Feed purchase cost 8.00 12.00 16.00 100
Transportaion cost 0.25 0.38 0.50 100
Vaccine purchase cost 0.10 0.10 0.10 100
Mineral mixture purchase cost 0.75 1.13 1.50 100
Dewormin Purchase 0.54 0.63 0.72 100
Salaries & Wages 3.15 3.15 3.15 75 1.05 1.05 1.05 25
Interest on Term Loan 0.70 0.56 0.70 100
Selling, Admn & Geenral Expenses 0.75 0.75 0.75 75 0.25 0.25 0.25 25
Depreciation 7.23 2.98 1.27 100

Total 192.07 220.46 260.76 9.23 4.84 3.27

Total Income 199.27 229.35 272.02

Less:Variable Expenses 192.07 220.46 260.76

Contribution 7.20 8.89 11.27

P/V Ratio 27.66 25.80 24.15

Fixed Expenses 9.23 4.84 3.27

Break-Even Income 0.33 0.19 0.14

Break Even Percentage (%) 0.17 0.08 0.05

`
 Total Budget required for implementing the dairy value chain (lakh Rs)
1 Fixed costs
1.1 Manager salary (@ Rs.20,000 PM) 2.4 2.4
1.2 Supervisor (@Rs.10,000 PM) 1.2 1.2
1.3 Workers (@Rs.5000 PM) 0.6 0.6
2 Office Running cost
2.1 Rent 0.4 0.4
2.2 Printing 0.1 0.1
2.3 Stationary 0.1 0.1

2.4 Preliminary expenses 0.1

2.5 Other costs 0.3 0.4
Sub- Total 5.2 5.2
Variable costs
3 Variable costs
3.1 Training costs 11.1 5.0
3.2 Raw Milk procurment cost 157.5 178.5
3.3 Collection centre cost 5.3 6.0
3.4 Primary transportation 7.9 8.9
3.5 Chilling cost 3.9 4.5
3.6 Dairy transportation cost 3.9 4.5
3.7 Feed purchase cost 8.0 12.0
3.8 Transportaion cost 0.3 0.4
3.9 Vaccine purchase cost 0.2 0.3
3.10 Mineral mixture purchase cost 0.8 1.1
3.11 Dewormin Purchase 0.5 0.6
Sub- total 199.3 221.6
4 Fixed assests
4.1 BMCU 8
4.2 DG Set 2
4.3 Furniture 0.25
4.4 AMCU 1.25
4.5 Testing equipment 0.5
4.6 Cans 1.5
4.7 Buildings 0.5
Sub- Total 14
Grand total 218.5 226.8
Break Even point without training costs:

Break Even point with training costs:

Break Even Point
value chain (lakh Rs)

2.4 7.2
1.2 3.6
0.6 1.8
0
0.4 1.2
0.1 0.3
0.1 0.3

0.1
0.4 1.1
5.2 15.6

2.0 18.0
210.0 546.0
7.0 18.2
10.5 27.3
5.3 13.7
5.3 13.7
16.0 36.0
0.5 1.1
0.3 0.8
1.5 3.4
0.7 1.9
259.0 679.9

14
264.2 709.5