PROJECT FEASIBILITY REPORT

Satish Lele
satish.lele@gmail.com

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Process Evaluation

New Product

PROJECT FEASIBILITY REPORT

FOR

M/s. Company Name

Address

OF

Names of CHEMICALS

AT

Location

Date of Preparation

INDEX

CHAPTER	CONTENTS	PAGE NO.
1	PROJECT HIGHLIGHTS
2	INTRODUCTION
3	PRODUCT DESCRIPTION AND USES
4	MARKET SURVEY AND DEMAND SUPPLY POSITION
5	RAW MATERIALS AND SUPPLIERS
6	MANUFACTURING PROCESS DESCRIPTION
7	PROJECT IMPLEMENTATION SCHEDULE
8	UTILITIES REQUIREMENTS
9	UTILITIES SPECIFICATIONS
10	PRODUCTION CAPACITY AND TARGET
11	MARKET AND SELLING ARRANGEMENTS
12	SALIENT FEATURES AND PROJECT HIGHLIGHTS
13	BASIS AND PRESUMPTION
14	MANPOWER AND ORGANIZATION
15	COST OF PROJECT AND MEANS OF FINANCE
16	COST OF LAND AND BUILDING
17	SUMMARY OF PLANT AND MACHINERY
18	COST OF UTILITIES
19	MISC. FIXED ASSETS
20	SUMMARY OF PIPING AND FITTINGS
21	LIST OF LABORATORY EQUIPMENT
22	PRELIMINARY AND PREOPERATIVE EXPENSES
23	CONTINGENCIES AND ESCALATION EXPENSES
24	CALCULATION OF CAPITALIZATION SCHEDULE OF ASSETS
25	COMPUTATION OF WORKING CAPITAL
26	SALES REALIZATION
27	COST OF PRODUCTION AND PROFITABILITY
28	CASH AND FUNDS FLOW STATEMENT
29	SUMMARY OF EXPENSES
30	RAW MATERIAL AND PACKING EXPENSES
31	REPAIRS, MAINTENANCE & CONSUMABLE STORES
32	SALARIES AND WAGES
33	COST OF UTILITIES
34	ADMINISTRATIVE EXPENSES AND OVERHEADS
35	CALCULATION OF DEPRECIATION
36	INTEREST CALCULATION AND REPAYMENT SCHEDULE

CHAPTER I
PROJECT HIGHLIGHTS

Name of the Unit: Company name
Constitution: Closely Held Limited Company.
Registered Office: Address
Works: Address
Directors:
- Mr. - Chairman & Joint Managing Director
- Mr. - Managing Director
- Mr. - Director
Key Executives:
1. Mr. - General Manager
2. Mr. - Manager (Marketing)
3. Mr. - Manager (Technical)
4. Mr. - Manager Diversification
5. Mr. - Works Manager
Bankers: Name of the Bank
Auditors: Auditors & Co.
Proposed Products : Names of Chemicals,
Total Installed Capacity: Tons/year
Location: Address of Factory location
Plot Area: sq. meters. (approx. in Acres)
Raw Materials: Names of raw materials.
Utilities:
- Electricity: HP
- Water : Cu M/day
- Fuel Oil : Kilo Liter/year
Direct Employment: No. of persons
Technology: In house, Product wise partial foreign technical support.

CHAPTER II

INTRODUCTION
2.1 GENERAL : Company information : Details of new products and project, location of project

2.2 SCHEDULE OF PROJECT IMPLEMENTATION :A PERT Chart is given to indicate the schedule.

2.3 MANAGEMENT AND TECHNICAL EXPERTISE : The company is promoted by dynamic enthusiastic and enterprising persons consisting of professionals in various fields.

2.4 PAST PERFORMANCE :

Year
Sales
Net Profit
Book Value
Earning per share

CHAPTER III
PRODUCT DESCRIPTION AND USESPRESENT PRODUCTS :

The present product range is as follows :

PROPOSED PRODUCTS
The product range after the proposed diversification will be as follows:

CHAPTER IV
MARKET SURVEY AND DEMAND SUPPLY POSITION

THE PRESENT SCENARIO Names of companies presently manufacturing these products :

Production and Demand pattern
Applications:
Classification:
Consumption:
Exports:
Growth Rate:
New Trends
Demand for Products
Demand for next 5 years

CONCLUSION : From the demand and supply position, it appears that there should be a good scope for a new venture with following capacity.

CHAPTER V
RAW MATERIALS
Basic raw materials required are :

CHAPTER VI
MANUFACTURING PROCESS DESCRIPTION

6.1 TECHNOLOGY :The technology used for the manufacture of this product is based on experience of the technical persons associated with the project. The technology is developed and tested in-house. The project will be implemented by a team of engineers who have already installed similar plants and have a wide ranging experience in the project implementation and commercial production of the chemicals. The engineering work as well as turnkey services would be done in-house.

6.2 MANUFACTURE :

6.2.1 Raw Materials : The raw materials required are :

6.2.2 Product Mix : Based on Market Survey and Trends, the following product mix has been selected.

6.2.3 Brief Process Description : The Manufacturing process

6.2.4 Process Flow Diagram : Process flow diagram for the manufacture

6.3 TREATMENT OF LIQUID EFFLUENTS :

CHAPTER VII
PROJECT IMPLEMENTATION SCHEDULE
7.1 IMPLEMENTATION SCHEDULE : The estimated implementation schedule for the complete unit is around 52 weeks. The schedule is after the land is fixed, land survey, soil survey and other land development work has been accomplished. The following services will further be required to implement the subject.

Civil Work
Procurement, Inspection and Expediting Services
Installation
Testing
Actual Manufacture

7.1.1 Civil Work : This work will include the following:

Basic Plot Plan Layout.
Architectural and Structural Design.
Equipment Layout
Single Line Electrical Diagrams

7.1.2 Procurement, Inspection and Expediting Services

List of Instruments and Specifications
Utilities equipment specifications
Other basic information

The time schedule for the same is as follows :

Services	Period Required (weeks)
Architectural and Civil Design for non-plant building
Architectural and Civil Design for plant building
Mechanical Equipment Design
Equipment Layout
Electrical and Engineering Design

The architectural and civil design work for factory building work can start only after the equipment layout has been finalized. Thus this work will start from 8th week, when the mechanical design and the equipment layout is over. Electrical designs can be prepared immediately after mechanical design work is completed. The electrical design work will start from the 4th week and end in 14th week. The major amount of work will be completed by the 18th week. Some work in electrical engineering discipline will have to be done during the preliminary stage.

7.1.3 Procurement. Inspection and Expediting Services : All the machinery required for the factory will be procured indigenously. No equipment is required to be imported. This will reduce the delivery of the equipments to a great extent. the procurement of these equipments can be divided into two major groups.

Long Delivery Items.
Short Delivery Items.

A total period of 24 weeks has been estimated for the long delivery items at site after placement of orders. It is estimated that about six weeks will be required for inquiries and placement of orders for these items. Thus the work of procurement of long delivery equipments will start from the 4th week after mechanical design work is over and end in the 34th week, whence erection can start.
The work for procurement of short delivery equipments will also start in the 4th week and end in the 28th week. It is estimated that delivery at site for these equipments will take around 14 weeks.

7.1.4 Construction and Installation Services :
7.1.4.1 Land Development : It is assumed that all the land development work will be over before start of detailed engineering work. Hence, no time period has been given in schedule for land development.
7.1.4.2 Factory Building, Foundation etc. construction work : The activity can start from the 16th week after the architectural and civil design work is over. It is estimated that this activity will take around 12 weeks and will be over by 28th week.
7.1.4.3 Equipment Erection : The equipment erection can start from the 34th week for long delivery equipments and from 28th week for short delivery items. The erection of equipments and instruments will be completed by the 40th week.
7.1.4.4 Electrical Installation : This activity will start from the end of 30th week and finish by 42nd week. It is estimated that the electrical equipment delivery at site will take around 14 weeks, i.e. the equipment delivery at site will be over by the 30th week.
7.1.4.5 Testing : After the installation of the equipments, mechanical testing of equipments can be started. This activity will start from the 46th week and end in 49th week.
7.1.4.6 Commissioning : This work can start after testing of the equipments and will require around 3 weeks period and should end by 52nd week.

CHAPTER VIII
UTILITIES REQUIREMENT
The requirement of electrical power will be 203.25 KW of connected load. Details of power requirement for the equipments is given below :

Equipment	Quantity	Power HP



TOTAL HP

Requirement of connected load = x 0.75 KW = KW
Requirement of Water = cu.m.

CHAPTER IX
UTILITIES SPECIFICATIONS

Utilities Specifications:

5.1 Process Water : Process water should be free of mud and suspended particles. It should be available at a pressure of 3 Kg / cm².
5.2 Electricity : It shall be available at 440 volts, A/C supply at 50 Hz. frequency and 3 phase supply.
5.3 Steam : About 300 kgs/hour of saturated steam at 10 Kg/cm² supply pressure will be required.
5.4 Cooling Water : It should be available at 30o C and a return temperature of 37^o C at a pressure of 4 kg /cm².
5.5 LDO : Boiler grade LDO will be required, having calorific value of 10,250 Cal / Kg.
5.6 Compressed Air : Cold dry compressed air should be available at a pressure of 10 Kg / cm².

CHAPTER X
PRODUCTION CAPACITY AND TARGET

Year	I	II	III	IV	V	VI	VII
Capacity Utilization %	40	50	60	70	80	90	100
Production

CHAPTER XI

MARKET AND SELLING ARRANGEMENTS

CHAPTER XII

SALIENT FEATURES AND PROJECT HIGHLIGHTS

12.1 Product

12.2 Incentives for Industrially Backward Area :

12.3 Government Quota for Raw Material :

12.4 Other Raw Materials :

12.5 Market Potential :

12.6 Nearness to Market and Raw Materials :

12.7 Low Overheads :

12.8 Infrastructure Facilities :

12.9 Effluent Treatment:

12.10 Basis of Plant Design :

12.11 Plant Suppliers :

12.12 Labour :

12.13 By-products :

12.14 Employment Potential :

12.15 Quality Control :

CHAPTER XIII

BASIS AND PRESUMPTIONS
While deriving out various figures and projections in this Project Report, following Basis and Presumptions have been made :

Capacity Utilization is based on 300 working days with 3 shifts of 8 hours each.
Envisaged capacity utilization for the first year is planned at 70 % and thereafter 10 % increase every year. 100 % capacity utilization will be achieved in the 4th year of operations.
The product will be sold in 225 kg standard drums or smaller packing. However, sales are calculated on per ton basis.
Sale price of all the products is planned on the present market rates, based on the quotations of existing manufacturers and suppliers.
Raw materials purchase price is also taken from the quotations received from the existing suppliers etc., and current market rates.
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 supplies and qualities.
Plant, machinery and equipment cost have been derived from the quotations received from the suppliers and manufacturers of such machinery, based on the specifications and drawings given by us. Quotations from more than one party have been called and those found more suitable have been referred for calculation and projections. Yet the suppliers can be changed at the time of making advance payment and placing orders with them.
Power rate is assumed per unit including all charges.
Water cost is considered at /m3.
L.D.O. cost is considered at /KL.
Fringe benefits are taken at 25 % of wages and salaries.
Interest rate considered is 8.5 % on term loan and 10.5 % on working capital from bank
For repayment, a period of six and half years is planned with moratorium period of 12 months.
Investment allowance is taken @ 20 % of machinery installed for SSI units, for first year.
Income tax availed of is as under :
Sales shown are exclusive of any government levies, i.e., tax, excise, octroi, etc., and insurance charges will be charged extra.
Repairs and maintenance have been calculated at 1 % on building and 2 % on plant, machinery and miscellaneous fixed assets.
Depreciation shown in the projections have been calculated on Straight Line Method and for three shift working at the rates corresponding to Income Tax Rules.

CHAPTER XIV
MANPOWER AND ORGANIZATION
14.1 AVAILABILITY OF LABOUR :
The factory will be located, where availability of skilled and unskilled labor is not considered to be a problem. Skilled and unskilled labor can be recruited for running the factory. The area also offers trained and skilled personnel required for running the factory. Initially, training will be required for smooth and efficient operation of factory. It is felt that the skilled manpower available locally having some experience in operation of chemical plants manufacture can be recruited to satisfy the manpower needs.
14.2 PERSONNEL REQUIRED FOR THE PLANT :
The total manpower strength required for the plant is grouped under two headings:

Factory Personnel
Administrative Personnel.

The factory personnel will comprise of Senior Production Engineer and other qualified technical personnel involved in the production, maintenance and quality control departments and skilled and unskilled labor. The administrative personnel will comprise of the administrative and sales group.
14.3 EXPERIENCE REQUIREMENT :
Fairly experienced personnel will be required above the supervisory cadre. For the supervisory cadre one or two years experienced engineers or even science graduates having experience in production of chemicals can be recruited. These people can be trained to operate the plant independently. No special experience is required for workers in the production side, although skilled labor having some experience should be preferred. The sales representatives can be fresh graduates who are vigilant and dynamic.
14.4 MANPOWER REMUNERATION :
The manpower required for the two different groups discussed above are tabulated in Chapter XXXI along with their designations, salaries and number of persons required for each designation. Fringe benefits are also evaluated .Details of salary payment for the next 7 years given detail in Chapter XXXI.

CHAPTER XV
COST OF PROJECT AND MEANS OF FINANCE
A. COST OF FINANCE

1	Land and site
2	Building and Civil Work
3	Plant And Machinery
4	Utilities
5	Engineering Fees
6	Misc. Fixed Assets
7	Prelim. & Preoperative expenses including cost of public issue
8	Contingencies and Escalation
9	Margin Money for working Capital
10	Provision for Know How Fees

B. MEANS OF FINANCE

1	Promoters' Capital
2	Secured Term Loan
3	Capital Incentive Subsidy

C. DEBT/EQUITY RATIO

                    Term Loan
D. E.  Ratio  = ---------------------  = 
                    Equity + Subsidy

D. SECURITY MARGIN
                        Tangible Assets - Term Loan
Security Margin = ----------------------------------------- x 100 %
                           Tangible Assets

Tangible Assets = Cost of Project - Working Capital Margin 
- Prelim. expenses + Interest during Construction

Hence, Security Margin =

CHAPTER XVI
COST OF LAND AND BUILDING
16.1 LAND

Particulars	Rate	Cost
Cost of 10800 sq.mt.(120x90) land
Cost of Leveling and Land Development
Cost of Construction of Internal Roads 300 mts
Cost of Fencing
Cost of Gates
Total

16.2 BUILDING

Particulars	Rate	Cost
Factory Building with Staircase and water Tank
Office and Laboratory
Store House
Canteen
Change Room
Watch & Ward
Equipment foundations, Sewers, drains etc.
Effluent Tanks
Misc. Civil Work
Architect and structural Engineers' fee
Total
Total of 16.1 and 16.2

CHAPTER XVII
SUMMARY OF PLANT AND MACHINERY

	Equipment Specifications	HP	Price
A
B
C
D	Utilities
	Total Plant cost (A+B+C+D)
	Add: C Excise @
	Add: Central Sales Tax @
	Add: Insurance @
	Add: Transportation, Freight, Packing, Loading, Forwarding, unloading Charges to Factory Site
	Erection and Commissioning charges
	Add: Painting/Coating Charges
	Grand Total

CHAPTER XVIII
COST OF UTILITIES

	Equipment Specifications	HP	Price
A	Boiler
B	Cooling Tower for Cooling Water
C	Vacuum Pump
D	Fire fighting Equipment
	Total Utilities cost (A+B+C+D)
	Add: C Excise @
	Add: Central Sales Tax @
	Add: Insurance @
	Add: Transportation, Freight, Packing, Loading, Forwarding, Unloading Charges to Factory Site
	Erection and Commissioning charges
	Add: Painting/Coating Charges
	Grand Total

CHAPTER XIX
MISCELLANEOUS FIXED ASSETS

	Description	Cost
1	Piping and Fitting for distribution of water, raw materials, and product, As per Schedule in Chapter XX
2	Laboratory Furniture and Instruments
3	Office Machinery
4	Misc. Books
5	Equipment Cabling for Factory and Office
6	Spares for plant
7	Other Misc. Fixed assets
Total

CHAPTER XX
SUMMARY OF PIPING AND FITTINGS
A. PIPING

Item	Size mm NB	Labor Rate	Unit Rate	Qty.	Total
MS Pipe
SS Pipe
TOTAL (A)

B. VALVES

Item	Size mm NB	Labor Rate	Unit Rate	Qty.	Total
CI Gate Valves
CI Globe Valves
SS 316 Ball Valve
GM Globe Valves
TOTAL (B)

C. SS FITTINGS

Item	Size mm NB	Labor Rate	Unit Rate	Qty.	Total
Short Stub Ends
Elbows
Tee
Threaded Nipple
TOTAL (C)

D. MS FITTINGS

Item	Size mm NB	Labor Rate	Unit Rate	Qty.	Total
Flanges
Elbows
Tee
Threaded Nipple
TOTAL (D)

E. MISC. FITTINGS

Item	Size mm NB	Labor Rate	Unit Rate	Qty.	Total
Nuts, Bolts, Washers
Gaskets, Packing
U-bolts
Insulation
TOTAL (E)

F. INSTRUMENTS

Item	Size mm NB	Labor Rate	Unit Rate	Qty.	Total
Safety Valves
Level Indicator
Pressure Gauge
Temp. Indicators
Vacuum Gauge
Sight Glass
Steam Trap, float type
Temp Indicator
TOTAL (F)
GRAND TOTAL (A+B+C+D+E+F)

CHAPTER XXI
LIST OF LABORATORY EQUIPMENT

Sl. No.	Item	Price
1	Portable pH meter
2	Analytical Balance
3	Oven for heat resistance test
4	Water Distillation Unit
5	Laboratory Stirrer
6	Misc. Glassware
7	Weight / Liter Cups
TOTAL

CHAPTER XXII
PRELIMINARY AND PREOPERATIVE EXPENSES SUMMARY

Sr. No.	Item	Period (Months)				Total
		0-3	3-6	6-9	9-12
1	Establishment charges
2	Rents & Taxes
3	Company Registration
4	Promotional Expenses
5	Insurance
6	Traveling Expenses
7	Postage, Telephones
8	Printing & Stationary
9	Advertising Expenses
10	Guarantee, Commission
11	Interest During Construction
12	Issue expense
13	Startup Expenses
Total

CHAPTER XXIII
CONTINGENCIES AND ESCALATION EXPENSES
Basic costs are as follows:

Sl.No.	Particulars	Cost
1	Land and site development
2	Building & Civil Work
3	Plant & Machinery
4	Utilities
5	Know how and engineering fee
6	Misc. Fixed Assets
7	Preliminary and Preoperative Expenses
Total

The escalation should be provided by segregating these elements into firm and non-firm elements

Sl. No.	Item	Firm cost	Non-firm cost	Escalation 20 %
1	Land & Site Development
2	Building & Civil Work
3	Plant & Machinery
4	Utilities
5	Engineering Fees
6	Misc. Fixed Assets
7	Preliminary & Pre operative Expenses
Total

Hence Contingencies Expenses =

CHAPTER XXIV
CALCULATION OF CAPITALIZATION SCHEDULE OF ASSETS
The capital expenditure in the project is as here under :

	Item	% of Capital Cost
A	Land and site development
B	Building and Civil Work
C	Plant & Machinery
D	Utilities
E	Engineering Fees
F	Misc. Fixed Assets
G	Preliminary and preoperative expenses
H	Contingencies and escalation

Allocation of Contingencies of

Item	Contingencies	Expenses Provision	Total Amount
Land & Site Development
Building and Civil Work
Plant and Machinery
Utilities
Engineering Fees
Misc. Fixed Assets
Preliminary and pre-operative expenses

ALLOCATION OF PRELIMINARY & PREOPERATIVE EXPENSES
This is allocated in following heads :

Item	Cost	% Amount Allocated	Total Cost
Building and Civil Work
Plant & Machinery
Utilities
Misc. Fixed Assets

ALLOCATION OF ENGINEERING FEES : Engineering Services fees is a part of plant, hence it can be capitalized with the cost of plant and machinery.
Plant Cost =Engineering Fees + Plant & Machinery

VALUES OF ASSETS AFTER CAPITALIZATION :

Sl. No.	Item	Value
1	Land & Site Development
2	Building and Civil Work
3	Plant and Machinery
4	Utilities
5	Miscellaneous Fixed assets

CHAPTER XXV
COMPUTATION OF WORKING CAPITAL REQUIREMENTS

Item	Period / Stock	Basis %	Year I		Year II
Item	Period / Stock	Basis %	Amount	Margin	Amount	Margin
Raw Materials
Packing Materials
Goods in Process
Finished Goods
Debtors
Salary & Wages
Other Utilities
Admin Overhead
Selling Overhead
Total

Hence Total bank limits would be as under :

Sl. No.	Item	Year I	Year II
	Total W.C. Requirement
	Promoter's Margin
	Permissible Bank Limits

Item	Period / Stock	Basis %	Year III		Year IV
Item	Period / Stock	Basis %	Amount	Margin	Amount	Margin
Raw Materials
Packing Materials
Goods in Process
Finished Goods
Debtors
Salary & Wages
Other Utilities
Admin Overhead
Selling Overhead
Total

Hence Total bank limits would be as under :

Sl. No.	Item	Year III	Year IV
	Total W.C. Requirement
	Promoter's Margin
	Permissible Bank Limits

Item	Period / Stock	Basis %	Year V		Year VI
Item	Period / Stock	Basis %	Amount	Margin	Amount	Margin
Raw Materials
Packing Materials
Goods in Process
Finished Goods
Debtors
Salary & Wages
Other Utilities
Admin Overhead
Selling Overhead
Total

Hence Total bank limits would be as under :

Sl. No.	Item	Year V	Year VI
	Total W.C. Requirement
	Promoter's Margin
	Permissible Bank Limits

Item	Period / Stock	Basis %	Year VII
Item	Period / Stock	Basis %	Amount	Margin
Raw Materials
Packing Materials
Goods in Process
Finished Goods
Debtors
Salary & Wages
Other Utilities
Admin Overhead
Selling Overhead
Total

Hence Total bank limits would be as under :

Sl. No.	Item	Year VII
	Total W.C. Requirement
	Promoter's Margin
	Permissible Bank Limits

CHAPTER XXVI
SALES REALIZATION TABLE Rs.'00,000

Year	I	II	III	IV	V	VI	VII
% Capacity Utilization
Quantity Tons
Sales @Rs
Total Rs.

CHAPTER XXVII
COST OF PRODUCTION AND PROFITABILITY Rs.'000

Sl No	Item	Year
Sl No	Item	I	II	III	IV	V	VI	VII
1	Production in tons
2	Sales Rs.'000
	less 10 % discount Rs.'000
	Net Sales Rs.'000
3	Raw Material Cost Rs.'000
4	Packing Cost Rs.'000
5	Utilities Cost, Rs.'000
6	Salaries & Wages Rs.'000
7	Consumables, Stores,Rs.'000
8	Repairs & Maint. Rs.'000
9	Depreciation, Rs.'000
10	Total Cost of Production Rs.'000
11	Add : opening Stock Rs.'000
12	Less : closing Stock Rs.'000
13	Cost of Sales,Rs.'000
14	Gross Profit, Rs.'000
15	Interest, Rs.'000
	i. on Term Loan
	ii. on W.C.Loan
16	Admin. Overheads Rs.'000
17	Selling Overheads & Exp. Rs. '000
18	Total of 15,16,17, Rs.'000
19	Profit before tax (14-18) Rs.'000
20	Provision for Tax Rs. '000
21	Net Profit after tax Rs.'000
22	less ; Dividend,Rs.'000
23	Retained Profits,Rs.'000
23	add:depreciation,Rs.'000
24	Net cash accruals,Rs.'000
25	Repayment to bank, Rs.'000

CHAPTER XXVIII
CASH AND FUNDS FLOW STATEMENT Rs.'000

SOURCES OF FUNDS

Item	const. period	Year
Item	const. period	I	II	III	IV	V	VI	VII
Promoters Share, Rs.'000
Profit after depreciation, Prelim. exp. w/off, and Investment allowance reserves and interest and taxation Rs.'000
Investment allow. Reserves Rs.'000
Depreciation Rs.'000
Capital Subsidy, Rs.'000
Term Loan, Rs.'000
Bank Borrowing, Rs.'000
Total Rs.'000

DISPOSITION OF FUNDS

Item	const. period	Year
Item	const. period	I	II	III	IV	V	VI	VII
Capital Expenditure Rs.'000
Current assets Rs.'000
Preliminary Exp. Rs.'000
Decrease in term loan Rs.'000
Tax, Rs.'000
Interest, Rs.'000
Dividend, Rs.'000
Total Rs.'000

CHAPTER XXIX
SUMMARY OF EXPENSES
ANNUAL REQUIREMENTS OF VARIOUS ITEMS OF COST OF PRODUCTION Rs.'000

Item	Year
Item	I	II	III	IV	V	VI	VII
Raw Materials
Packing Materials
Utilities : Power + Water
Stores
Repairs & Maintenance
Salary & Wages
Admin Overheads
Selling Overheads
Total Rs.'000

CHAPTER XXX
RAW MATERIALS AND PACKING EXPENSES

Calculation of Raw Materials : The raw materials required are as follows:

Production, Tons/Year	RM required, Tons/Year	RM Price, Rs./Ton	RM Cost per year, Rs. '000

Hence requirement of raw materials per year on 100 % capacity utilization is Rs.
Thus, the requirement of raw materials will be as follows: Rs.'000

Item	Year
Item	I	II	III	IV	V	VI	VII
% Capacity Utilization	40	50	60	70	80	90	100
Raw Materials Cost

Calculation of packing expenses :
The materials will be packed in HDPE Carbouys or drums of 50/100/200 liters, or 1/2/5/10/20 liters tins. For tons of product, expenses per Rs. per Kg. is Rs.
Therefore, packing expenses for next seven years are : Rs.'000

Item	Year
Item	ALIGN="CENTER">I	II	III	IV	V	VI	VII
% Capacity Utilization	40	50	60	70	80	90	100
Packing Expenses

CHAPTER XXXI
REPAIRS, MAINTENANCE & CONSUMABLE STORES
Calculation of Repairs & Maintenance : Repairs and maintenance charges are generally 1 % on building and 2 % on plant and machinery (including misc. fixed assets). Hence, maintenance on Building and civil work @ 1% of Rs. = Rs.

Maintenance on plant and machinery @ 2 % of Rs. = Rs. Hence Total expenses are Rs.

Assuming 15 % rise in the repairs and maintenance charges per year over the previous year, the expenses for the next 7 years are :

Item	Year
Item	I	II	III	IV	V	VI	VII
Repairs and Maintenance Expenses

CHAPTER XXXII
SALARIES & WAGES
The salaries and wages of different types of Production /Administrative personnel is projected as follows :
A. LABOUR :

Staff		I Year			II Year
		No.	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
		No.	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
Skilled	Fixed
Skilled	Casual
Unskilled	Fixed
Unskilled	Casual
SUB TOTAL
add @25 % perks
TOTAL A

B. SUPERVISORY :

Staff	I Year			II Year
	No	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
	No	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
General Manager
Production Manager
Chemist
Supervisor
Electrician
SUB TOTAL
add @25 % perks
TOTAL B

C. ADMINISTRATIVE :

Staff	I Year			II Year
	No	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
	No	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
Typist
Administrative Assistant
Watchmen
SUB TOTAL
add @25 % perks
TOTAL C

GRAND TOTAL (A+B+C)

A. LABOUR :

Staff		III Year			IV Year
		No.	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
		No.	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
Skilled	Fixed
Skilled	Casual
Unskilled	Fixed
Unskilled	Casual
SUB TOTAL
add @25 % perks
TOTAL A

B. SUPERVISORY :

Staff	III Year			IV Year
	No	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
	No	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
General Manager
Production Manager
Chemist
Supervisor
Electrician
SUB TOTAL
add @25 % perks
TOTAL B

C. ADMINISTRATIVE :

Staff	III Year			IV Year
	No	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
	No	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
Typist
Administrative Assistant
Watchmen
SUB TOTAL
add @25 % perks
TOTAL C

GRAND TOTAL (A+B+C)

A. LABOUR :

Staff		V Year			VI Year
		No.	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
		No.	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
Skilled	Fixed
Skilled	Casual
Unskilled	Fixed
Unskilled	Casual
SUB TOTAL
add @25 % perks
TOTAL A

B. SUPERVISORY :

Staff	V Year			VI Year
	No	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
	No	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
General Manager
Production Manager
Chemist
Supervisor
Electrician
SUB TOTAL
add @25 % perks
TOTAL B

C. ADMINISTRATIVE :

Staff	V Year			VI Year
	No	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
	No	Salary / month	Amount Rs.	No	Salary / month	Amount Rs.
Typist
Administrative Assistant
Watchmen
SUB TOTAL
add @25 % perks
TOTAL C

GRAND TOTAL (A+B+C)

A. LABOUR :

Staff		VII Year
		No.	Salary / month	Amount Rs.
		No.	Salary / month	Amount Rs.
Skilled	Fixed
Skilled	Casual
Unskilled	Fixed
Unskilled	Casual
SUB TOTAL
add @25 % perks
TOTAL A

B. SUPERVISORY :

Staff	VII Year
	No	Salary / month	Amount Rs.
	No	Salary / month	Amount Rs.
General Manager
Production Manager
Chemist
Supervisor
Electrician
SUB TOTAL
add @25 % perks
TOTAL B

C. ADMINISTRATIVE :

Staff	VII Year
	No	Salary / month	Amount Rs.
	No	Salary / month	Amount Rs.
Typist
Administrative Assistant
Watchmen
SUB TOTAL
add @25 % perks
TOTAL C

GRAND TOTAL (A+B+C)

CHAPTER XXXIII
COST OF UTILITIES
The requirements of Utilities and its cost per year is calculated as follows :
A. ELECTRICITY :
Supposing 60 % load factor for total connected load of KW, power requirement per shift is KWh. Therefore power required per annum, for three shift working and 300 working days in a year = KWh. Rate of Power = Rs. per KWh. Hence cost of power at 100 % capacity = Rs.
B. WATER :
Annual requirement at 100 % capacity cu.m. Cost of water Rs./cu.m. = . Therefore, cost water per annum = Rs.
C. FURNACE OIL / LDO :
The requirement of fuel oil is around liters per hour. Considering 24 hours a day and working of 300 days in a year fuel oil requirement is KL/year. Cost of Fuel oil at Rs. per KL, yearly cost is Rs. . Hence total cost of utilities per year is Rs. .
Projection for the next 7 years is as follows : Rs.'000

Item	Year
Item	I	II	III	IV	V	VI	VII
% Capacity Utilization	40	50	60	70	80	90	100
Utilities Cost

CHAPTER XXXIV
ADMINISTRATIVE EXPENSES AND OVERHEAD
Rs.'000

Item	Year
Item	I	II	III	IV	V	VI	VII
Adviser's Remuneration
Utilities Cost
Telephone / Telex
Printing / Stationary
Audit Fee
Rent/tax
Conveyance
Insurance

SELLING EXPENSES OVERHEADS Rs.'000

Item	Year
Item	I	II	III	IV	V	VI	VII
Traveling
Advertise / Publicity
Postage / Circulars
Transport
Overheads
Misc. Expenses

CHAPTER XXXV
DEPRECIATION CALCULATION
A. DEPRECIATION ON STRAIGHT LINE BASIS : Rs.'000

Item % rate of Depreciation Gross Value Depreciation Amount

Land & Site Development

Building and Civil Work

Office Building

Factory and other Bldg.

Plant & Machinery
(3 Shift Basis)

Utilities

Misc. Fixed Assets

Total

Hence, Annual Depreciation = Rs.

B. DEPRECIATION ON W.D.V. Method (for I.T.Purpose)

Year
Building
Plant / Machinery
Other Assets
Boiler
Total

Depreciation Factor % 5.00 33.33 33.33 100.00 in first year

Opening Bal

Less: Depn

Opening Bal

Less: Depn

Opening Bal

Less: Depn

Opening Bal

Less: Depn

Opening Bal

Less: Depn

Opening Bal

Less: Depn

Opening Bal

Less: Depn

Balance

CHAPTER XXXVI
INTEREST CALCULATION AND REPAYMENT SCHEDULE
Term loan of Rs. is to be repaid within 6 and half years in 11 equal half yearly installments with initial moratorium period of 1 year. Interest 13.50 % for term loan and @ 16.50 % for W.C. loan is considered including all bank charges for the unit.
TERM LOAN Rs.'000

Year No. of Installment
Amount of Installment
Balance
Interest on Balance
Annual Total of Interest

I

II

III

IV

V

VI

VII

INTEREST ON WORKING CAPITAL AND TERM LOAN :

Year I II III IV V VI VII

W. C. Loan

Annual Interest 16.50 %

Interest on Term Loan

Total

Item	% rate of Depreciation	Gross Value	Depreciation Amount
Land & Site Development
Building and Civil Work
Office Building
Factory and other Bldg.
Plant & Machinery (3 Shift Basis)
Utilities
Misc. Fixed Assets
Total

Year	Building	Plant / Machinery	Other Assets	Boiler	Total
Depreciation Factor %	5.00	33.33	33.33	100.00 in first year
Opening Bal
Less: Depn
Opening Bal
Less: Depn
Opening Bal
Less: Depn
Opening Bal
Less: Depn
Opening Bal
Less: Depn
Opening Bal
Less: Depn
Opening Bal
Less: Depn
Balance

Year	No. of Installment	Amount of Installment	Balance	Interest on Balance	Annual Total of Interest
I
II
III
IV
V
VI
VII

Year	I	II	III	IV	V	VI	VII
W. C. Loan
Annual Interest 16.50 %
Interest on Term Loan
Total