ECONOMIC FEASIBILITY REPORT ON

PROJECT BY

SAMARJEET SINGH S/O S. SUKHPAL SINGH

VILLAGE DARGAPUR
NABHA-147202
 ECONOMIC FEASIBILITY REPORT OF

SAMARJEET SINGH S/O S. SUKHPAL SINGH, VILLAGE DARGAPUR,

NABHA-147202

INTRODUCTION:

Samarjeet Singh S/o S. Sukhpal Singh carrying on the dairy business for last 7 years. No he
wishes to modernize his dairy and for that he requires new machinery and a new shed. For the
purpose of meeting the cost he wishes to avail a Term Loan from the Bank.

Brief Background of Dairy Project:

India is emerged as the largest milk production estimated as 94.50 Million Tonnes. It is most
important sector of the Indian economy particularly in poverty alleviation and employment
generation. This sector contributes close to one fourth of India's national income and total work
force engaged in agriculture is about 60 per cent. At global level, milk has been identified as an
integral part of food for centuries. The Success of white revolution in india has largely been
written by millions of small holders. About 70 Million dairy farmers produce more than 50 per
cent of the milk in the country. Milk and Milk products such as curd, cheese, butter, ghee etc. are
the important components of the Indian Food Industry. Consumption of Milk and Milk products
is deeply rooted in our tradition and it is an essential item during rituals, festivals and other
auspicious events. Hence dairy products have a good demand in domestic market in all seasons.
Concern proposes to avail credit facilities from your bank. Concern is expected to attain sales of
around Rs. 268.28 Lacs in the first year of its operations which will increase to around Rs.
475.27 Lacs at the end of the Seventh year.

This will be family run business involving the proprietor and his brother.
BIO DATA OF PROPRIETOR:-

NAME Samarjeet Singh

FATHER’S NAME S. Sukhpal Singh
EDUCATIONAL QUALIFICATION Post Graduation, Diploma Dairy Science
ADDRESS Village Dargapur, Nabha
EXPERIENCE:

Promoter Samarjeet Singh is resident of Village Dargapur, Tehsil Nabha since his birth. His
background is rural & milk is also produced by the local farmers of villages therefore the
promoter has started the unit in the village Dargapur, which is also native village. There is very
good demand of Milk and Milk products in the Bhadson, Nabha and Patiala. Currently he is
making sale to amul plant at Khamanou Samrala, but after increasing the capacity the promoter
is planning for expanding the local sale to small vendors also. Promoter has more than 7 years’
experience of this industry, his family has been in this business for more than 15 years. Promoter
and his family have good relations with the people of Bhadson and Nabha City and adjoining
area. Hence, he has wisely chosen this activity.

DEVELOPMENT SCOPE:

All the other infrastructure facilities like transport, communication, power is very easily
accessible.

Having a good experience of the promoters in the field there will be no obstacle preventing
applicant to procure material at very competitive rates. As far as marketing is concerned, there
won’t be any issue to sell the materials due to increasing demand of the products and marketing
competency of the promoter.
Keeping in mind all these factors the marketing and sales will not be any hurdle for the applicant.

PROPOSED BANK FINANCE:

Total Funds required are Rs. 43.50 Lacs for purchase of Plant & Machinery and construction of
Shed. Proposed bank finance shall be Term Loan of Rs. 39.15 Lacs.

DEPRECIATION ON FIXED ASSETS:

Year wise depreciation on fixed assets has been calculated in Depreciation Schedule forming
part of Project Report. Depreciation on fixed assets has been calculated at rates as prescribed
under Income Tax Act, 1961.
LOCATIONAL ADVANTAGES:

The concern is placed at an ideal site where all the infrastructure of facilities like power, water,
transportation facilities are readily available. So concern is possessing location advantage.

FINANCIAL INDICATORS:

Financial indicators have been calculated as under: -

SEVEN YEARS PROFITABLITY ANALYSIS.

SEVEN YEARS BALANCE SHEETS.

RECOMMENDATIONS:

Considering the entrepreneurship skills of partners, financial indicators, advantages accruing

from location, market and ample scope of development proposed project is viable and is
recommended strongly.

BASIS & ASSUMPTIONS: -

The profitability estimates for the next six years of concern are prepared and enclosed while
preparing the estimates the following assumptions have been made: -

i. All data information is as supplied by the Owner.

ii. Rate of Depreciation as per Income Tax Act, 1961.

iii. Rate of Interest on Term Loan at 9.00% p.a and Existing Term Loan @ 9.50%
 SAMARJEET SINGH S/O S. SUKHPAL SINGH, VILLAGE DARGAPUR, NABHA-147202
(Figures in Lacs)
PARTICULARS EXISTING PROPOSED
COST OF PROJECT
LAND [OWNED]
BUILDING AND SHED 14.66 26.66
PLANT AND MACHINERY [AS BELOW] 19.10 50.60
LIVE STOCK 42.00 49.00
CONSUMABLES STOCK 3.00 5.00
SUNDRY DEBTORS 3.50 22.36
TOTAL 82.26 153.62
MEANS OF FINANCE
PROPRIETOR'S CAPITAL 79.67 111.88
TERM LOAN 2.59 41.74
TOTAL 82.26 153.62
- - 0.00
PLANT AND MACHINERY EXISTING
1 SWARAJ 855 TRACTOR 5.50
2 CHARA MACHINE 5.00
MAKHAN GHAA MACHINE 2.00
MILKING MACHINE 1.80
FANS 4.80
19.10

PLANT AND MACHINERY PROPOSED

1 SWARAJ 855 TRACTOR 5.50
1 NEW HOLLAND 5620 4X4 14.50
1 TROLLY 7.25X18 6.00
1 LOADER 5.00
1 TMR 6.00
2 CHARA MACHINE 5.00
MAKHAN GHAA MACHINE 2.00
MILKING MACHINE 1.80
FANS 4.80
50.60

EXISTING SHED
SIZE 130*94 = 12220 SQ.FT. @ RS. 120 PER SQ. FT 14.66
14.66
PROPOSED SHED
SIZE 130*94 = 12220 SQ.FT. @ RS. 120 PER SQ. FT 14.66
STORAGE SHED 50X60= 3000 SQ.FT. @ RS. 200 PER SQ. FT. 6.00
PLANT AND MACHINERY SHED 50X60= 3000 SQ.FT. @ RS. 200 PER SQ. FT. 6.00

26.66
 SAMARJEET SINGH S/O S. SUKHPAL SINGH, VILLAGE DARGAPUR, NABHA-147202

PROJECTED BALANCE SHEET

Particulars 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30

LIABILITIES
Capital 117.23 124.27 132.62 142.47 153.13 165.27 179.36
Term Loan Existing 0.80 0.00 0.00 0.00 0.00 0.00 0.00
Term Loan 34.94 30.34 25.31 19.81 13.79 7.20 0.00
152.97 154.61 157.93 162.28 166.92 172.48 179.36
ASSETS
Fixed Assets (Live Stock) 49.00 49.00 49.00 49.00 49.00 49.00 49.00
Fixed Assets (Gross) 77.26 77.26 77.26 77.26 77.26 77.26 77.26
Less: Depreciation 10.26 19.11 26.75 33.35 39.07 44.01 48.29
116.00 107.15 99.51 92.91 87.19 82.25 77.97
CURRENT ASSETS
Consumable Stock 5.00 5.50 6.05 6.66 7.32 8.05 8.86
Sundry Debtors 22.36 24.59 27.05 29.76 32.73 36.00 39.61
Other Current Assets 9.00 12.00 15.00 18.00 21.00 24.00 27.00
Cash & Bank Balance 0.61 5.36 10.32 14.96 18.67 22.17 25.93
36.97 47.46 58.42 69.37 79.72 90.22 101.39
0.00 0.00 0.00 0.00 0.00 0.00 0.00
CURRENT ASSETS 36.97 47.46 58.42 69.37 79.72 90.22 101.39
CURRENT LIABILITIES 10.32 8.38 7.56 7.56 7.56 7.56 7.55
CURRENT RATIO 3.58 5.66 7.73 9.18 10.55 11.93 13.43
DEBT EQUITY RATIO 0.30 0.24 0.19 0.14 0.09 0.04 0.00
 SAMARJEET SINGH S/O S. SUKHPAL SINGH, VILLAGE DARGAPUR, NABHA-147202

PROFITABILITY ESTIMATES
Sr. Particulars 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30
No.
A Milk Sales 268.28 295.10 324.61 357.07 392.78 432.06 475.27
Total (A) 268.28 295.10 324.61 357.07 392.78 432.06 475.27
B Cattle Feed 143.08 157.39 173.13 190.44 209.48 230.43 253.47
Fodder Expenses 10.73 11.80 12.98 14.28 15.71 17.28 19.01
Electricity Expenses 4.83 5.31 5.84 6.43 7.07 7.78 8.55
Wages 7.20 7.92 8.71 9.58 10.54 11.60 12.76
Sailage 53.66 59.02 64.92 71.41 78.56 86.41 95.05
Vacination and Medicine 2.01 2.21 2.43 2.68 2.95 3.24 3.56
Tractor Diesel Expenses 1.34 1.48 1.62 1.79 1.96 2.16 2.38
Cost for WIP 222.85 245.13 269.65 296.61 326.27 358.90 394.79

Total (B) 222.85 245.13 269.65 296.61 326.27 358.90 394.79

Gross Profit (A-B) 45.43 49.97 54.97 60.46 66.51 73.16 80.48

Depreciation 10.26 8.85 7.64 6.60 5.71 4.94 4.28

Machinery Repairs 0.30 0.30 0.45 0.45 0.60 0.60 0.75
Admm. Expenses 9.00 10.80 12.00 13.50 15.00 16.50 18.00
Interest on Term Loan Existing 0.17 0.02 - - - - -
Interest on Term Loan 3.35 2.96 2.53 2.05 1.54 0.97 0.36
Net Profit before Tax 22.35 27.04 32.35 37.85 43.66 50.14 57.09
Income Tax
Net Profit after Tax 22.35 27.04 32.35 37.85 43.66 50.14 57.09
 SAMARJEET SINGH S/O S. SUKHPAL SINGH, VILLAGE DARGAPUR, NABHA-147202

(Figures in Lacs)
YEAR PARTICULARS PLANT & TOTAL (Rs.)
MACHINERY
COST 50.60 50.60
DEPRECIATION 7.59 7.59
Ist Year CLOSING 43.01 43.01
DEPRECIATION 6.45 6.45
2nd Year CLOSING 36.56 36.56
DEPRECIATION 5.48 5.48
3rd Year CLOSING 31.07 31.07
DEPRECIATION 4.66 4.66
4th Year CLOSING 26.41 26.41
DEPRECIATION 3.96 3.96
5th Year CLOSING 22.45 22.45
DEPRECIATION 3.37 3.37
6th Year CLOSING 19.08 19.08
DEPRECIATION 2.86 2.86
7th Year CLOSING 16.22 16.22
DEPRECIATION 2.43 2.43
8th Year CLOSING 13.79 13.79
 (Figures in Lacs)
YEAR PARTICULARS BUILDING TOTAL (Rs.)
COST 26.66 26.66
DEPRECIATION 2.67 2.67
Ist Year CLOSING 23.99 23.99
DEPRECIATION 2.40 2.40
2nd Year CLOSING 21.59 21.59
DEPRECIATION 2.16 2.16
3rd Year CLOSING 19.44 19.44
DEPRECIATION 1.94 1.94
4th Year CLOSING 17.49 17.49
DEPRECIATION 1.75 1.75
5th Year CLOSING 15.74 15.74
DEPRECIATION 1.57 1.57
6th Year CLOSING 14.17 14.17
DEPRECIATION 1.42 1.42
7th Year CLOSING 12.75 12.75
DEPRECIATION 1.28 1.28
8th Year CLOSING 11.48 11.48
 SAMARJEET SINGH S/O S. SUKHPAL SINGH, VILLAGE DARGAPUR, NABHA-147202

Calculation of Break Even Point

Particulars 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30
Receipts 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Variable Cost
Cattle Feed 53.33 53.33 53.33 53.33 53.33 53.33 53.33
Fodder Expenses 4.00 4.00 4.00 4.00 4.00 4.00 4.00
Electricity Expenses 1.80 1.80 1.80 1.80 1.80 1.80 1.80
Wages 2.68 2.68 2.68 2.68 2.68 2.68 2.68
Sailage 20.00 20.00 20.00 20.00 20.00 20.00 20.00
Vacination and Medicine 0.75 0.75 0.75 0.75 0.75 0.75 0.75
Tractor Diesel Expenses 0.50 0.50 0.50 0.50 0.50 0.50 0.50
Total 83.07 83.07 83.07 83.07 83.07 83.07 83.07
CONTRIBUTION 16.93 16.93 16.93 16.93 16.93 16.93 16.93

FIXED COST
Depreciation 10.26 8.85 7.64 6.60 5.71 4.94 4.28
Machinery Repairs 0.30 0.30 0.45 0.45 0.60 0.60 0.75
Admm. Expenses 9.00 10.80 12.00 13.50 15.00 16.50 18.00
Interest on Existing TL 0.17 0.02 - - - - -
Interest on Term Loan 3.35 2.96 2.53 2.05 1.54 0.97 0.36
23.08 22.93 22.62 22.61 22.85 23.02 23.39
Break Even Receipts 136.29 135.41 133.59 133.52 134.94 135.92 138.11
Break Even Point % 50.80 45.88 41.15 37.39 34.36 31.46 29.06
 SAMARJEET SINGH S/O S. SUKHPAL SINGH, VILLAGE DARGAPUR, NABHA-147202

PROJECTED CASH FLOW STATEMENT

Particulars 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30
SOURCES OF FUNDS
Net Profit before Tax 22.35 27.04 32.35 37.85 43.66 50.14 57.09
Increase in Capital 111.88 0.00 0.00 0.00 0.00 0.00 0.00
Increase in Bank's Term Loan 41.74 0.00 0.00 0.00 0.00 0.00 0.00
Depreciation 10.26 8.85 7.64 6.60 5.71 4.94 4.28
186.22 35.89 39.99 44.46 49.37 55.09 61.37
USES OF FUNDS
Increase in Fixed Assets 126.26 0.00 0.00 0.00 0.00 0.00 0.00
Repayment of Term Loan 6.00 5.40 5.03 5.51 6.02 6.59 7.19
Increase in Fodder 5.00 0.50 0.55 0.61 0.67 0.73 0.81
Increase in Debtors 22.36 2.24 2.46 2.71 2.98 3.27 3.60
Increase in Other Current Assets 9.00 3.00 3.00 3.00 3.00 3.00 3.00
Promoter Withdrawls 17.00 20.00 24.00 28.00 33.00 38.00 43.00
185.61 31.14 35.04 39.82 45.66 51.59 57.60
Opening Cash & Bank Balance 0.00 0.61 5.36 10.31 14.95 18.66 22.16
Accruals during the year 0.61 4.75 4.95 4.64 3.71 3.49 3.77
Closing Cash & Bank Balance 0.61 5.36 10.31 14.95 18.66 22.16 25.93
Capital 117.23 124.27 132.62 142.47 153.13 165.27 179.36
 SAMARJEET SINGH S/O S. SUKHPAL SINGH, VILLAGE DARGAPUR, NABHA-147202

PROJECTED DEBT SERVICE COVERAGE RATIO

Particulars 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30

FUNDS AVAILABLE
Net Profit before Tax 22.35 27.04 32.35 37.85 43.66 50.14 57.09
Depreciation 10.26 8.85 7.64 6.60 5.71 4.94 4.28
Interest on Term Loan 3.52 2.98 2.53 2.05 1.54 0.97 0.36
36.13 38.87 42.52 46.51 50.91 56.06 61.73
OBLIGATIONS
Instalment of Term Loan 9.52 8.38 7.56 7.56 7.56 7.56 7.55

9.52 8.38 7.56 7.56 7.56 7.56 7.55

DSCR (%) 3.79 4.64 5.62 6.15 6.73 7.42 8.18
DSCR (%) Annualised 3.79 4.64 5.62 6.15 6.73 7.42 8.18
AVERAGE DSCR (%) 6.08
 SAMARJEET SINGH S/O S. SUKHPAL SINGH, VILLAGE DARGAPUR, NABHA-147202

REPAYMENT OF TERM LOAN AND INTEREST CALCULATION

Particulars 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30

Opening Balnance 0.00 41.74 35.74 30.34 25.31 19.80 13.78 7.19
Disbursement 41.74 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total 41.74 41.74 35.74 30.34 25.31 19.80 13.78 7.19
Interest 0.00 3.52 2.98 2.53 2.05 1.54 0.97 0.36
Repayment 0.00 9.52 8.38 7.56 7.56 7.56 7.56 7.55
Closing Balance 41.74 35.74 30.34 25.31 19.80 13.78 7.19 0.00
Average Balance 41.74 56.61 48.21 40.48 32.45 23.68 14.08 3.60
 SAMARJEET SINGH S/O S. SUKHPAL SINGH, VILLAGE DARGAPUR, NABHA-147202
CALCULATION OF INTEREST ON EXISTING TERM LOAN

TERM LOAN RS. 259166.94

RATE OF INTEREST 9.50 %
INSTALLMENT RS. 16354.00

YEAR MONTH PRINCIPAL INSTALMENT INTEREST TOTAL

AMOUNT
YEAR I 1 259,167 16,354 2,052
2 244,865 16,354 1,939
3 230,449 16,354 1,824
4 215,920 16,354 1,709
5 201,275 16,354 1,593
6 186,514 16,354 1,477
7 171,637 16,354 1,359
8 156,642 16,354 1,240
9 141,528 16,354 1,120
10 126,294 16,354 1,000
11 110,940 16,354 878
12 95,464 16,354 756 16,947

YEAR II 1 79,866 16,354 632

2 64,144 16,354 508
3 48,298 16,354 382
4 32,327 16,354 256
5 16,228 16,357 128 1,907
 SAMARJEET SINGH S/O S. SUKHPAL SINGH, VILLAGE DARGAPUR, NABHA-147202
CALCULATION OF INTEREST ON TERM LOAN

TERM LOAN RS. 3915000.00

RATE OF INTEREST 9.00 %
INSTALLMENT RS. 62989.00

YEAR MONTH PRINCIPAL INSTALMENT INTEREST TOTAL

AMOUNT
YEAR I 1 3,915,000 62,989 29,363
2 3,881,374 62,989 29,110
3 3,847,495 62,989 28,856
4 3,813,362 62,989 28,600
5 3,778,973 62,989 28,342
6 3,744,327 62,989 28,082
7 3,709,420 62,989 27,821
8 3,674,252 62,989 27,557
9 3,638,820 62,989 27,291
10 3,603,122 62,989 27,023
11 3,567,156 62,989 26,754
12 3,530,921 62,989 26,482 335,282

YEAR II 1 3,494,414 62,989 26,208

2 3,457,633 62,989 25,932
3 3,420,576 62,989 25,654
4 3,383,241 62,989 25,374
5 3,345,627 62,989 25,092
6 3,307,730 62,989 24,808
7 3,269,549 62,989 24,522
8 3,231,081 62,989 24,233
9 3,192,326 62,989 23,942
10 3,153,279 62,989 23,650
11 3,113,940 62,989 23,355
12 3,074,305 62,989 23,057 295,828

YEAR III 1 3,034,373 62,989 22,758

2 2,994,142 62,989 22,456
3 2,953,609 62,989 22,152
4 2,912,772 62,989 21,846
5 2,871,629 62,989 21,537
6 2,830,177 62,989 21,226
7 2,788,415 62,989 20,913
8 2,746,339 62,989 20,598
9 2,703,947 62,989 20,280
10 2,661,238 62,989 19,959
11 2,618,208 62,989 19,637
12 2,574,856 62,989 19,311 252,673
YEAR IV 1 2,531,178 62,989 18,984
2 2,487,173 62,989 18,654
3 2,442,838 62,989 18,321
4 2,398,170 62,989 17,986
5 2,353,167 62,989 17,649
6 2,307,827 62,989 17,309
7 2,262,147 62,989 16,966
8 2,216,124 62,989 16,621
9 2,169,756 62,989 16,273
10 2,123,040 62,989 15,923
11 2,075,974 62,989 15,570
12 2,028,555 62,989 15,214 205,470

YEAR V 1 1,980,780 62,989 14,856

2 1,932,647 62,989 14,495
3 1,884,153 62,989 14,131
4 1,835,295 62,989 13,765
5 1,786,070 62,989 13,396
6 1,736,477 62,989 13,024
7 1,686,511 62,989 12,649
8 1,636,171 62,989 12,271
9 1,585,454 62,989 11,891
10 1,534,355 62,989 11,508
11 1,482,874 62,989 11,122
12 1,431,007 62,989 10,733 153,838

YEAR VI 1 1,378,750 62,989 10,341

2 1,326,102 62,989 9,946
3 1,273,059 62,989 9,548
4 1,219,618 62,989 9,147
5 1,165,776 62,989 8,743
6 1,111,530 62,989 8,336
7 1,056,878 62,989 7,927
8 1,001,815 62,989 7,514
9 946,340 62,989 7,098
10 890,448 62,989 6,678
11 834,138 62,989 6,256
12 777,405 62,989 5,831 97,364

YEAR VII 1 720,246 62,989 5,402

2 662,659 62,989 4,970
3 604,640 62,989 4,535
4 546,186 62,989 4,096
5 487,293 62,989 3,655
6 427,959 62,989 3,210
7 368,180 62,989 2,761
8 307,952 62,989 2,310
9 247,273 62,989 1,855
10 186,138 62,989 1,396
11 124,545 62,989 934
12 62,490 62,959 469 35,592
 SAMARJEET SINGH S/O S. SUKHPAL SINGH, VILLAGE DARGAPUR, NABHA-147202
(Figures in Lacs)
PARTICULARS
COST OF PROJECT
NO. OF MILCH ANIMALS [A] 70.00
DAILY MILK PRODUCTION PER MILCH ANIMAL IN KG [B] 25.00
RATE PER KG [C] 42.00
DAILY MILK SALE 73,500.00
ANNUAL SALE IN LACS 268.28

DIRECT EXPENSES WORKING NO OF MILCH PER ANIMAL RATE TOTAL

ANIMAL QTY
CONSUMPTI
ON

COST OF PROJECT
CATTLE FEED 70 14 KG 40.00 143.08
FODDER EXPENSES 70 6KG 7.00 10.73
SAILAGE 70 35KG 6.00 53.66
 SAMARJEET SINGH S/O S. SUKHPAL SINGH, VILLAGE DARGAPUR, NABHA-147202

CALCULATION OF INTERNAL RATE OF RETURN

Particulars 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30
CASH INFLOWS
Net Profit before Tax 22.35 27.04 32.35 37.85 43.66 50.14 57.09
Depreciation 10.26 8.85 7.64 6.60 5.71 4.94 4.28
32.60 35.89 39.99 44.46 49.37 55.09 61.37
DISCOUNTING FACTOR @ 10% 90.91 82.64 75.13 68.30 62.09 56.40 51.30

Net Present Value 29.64 29.66 30.04 30.37 30.66 31.07 31.48
29.64 29.66 30.04 30.37 30.66 31.07 31.48

CALCULATION OF IRR

TOTAL INCREMENTAL INVESTMENT -71.36

YEAR CASH INFLOWS
1st Year 29.64
2nd Year 29.66
3rd Year 30.04
4th Year 30.37
5th Year 30.66
6th Year 31.07
7th Year 31.48
INTERNAL RATE OF RETURN (IRR) 38%