Project preparation

1. Presentation on
Project Preparation
Project cost Rs. 48lakh
Presented By
AjitMajumder
ABMFT 1601
DEPTT OF ABMFT

2. Product and Applications
• Shapes of Chicken
• By products
• Processed Varieties
Market Potential
Market Potential is very good as the consumption is
increasing day by day.

3. Basis and Presumption
a. The unit will work for 365 days per annum on single basis.
b. The unit can achieve its full capacity utilization during the 4th year of
operation.
c. Wages for skilled workers are taken as per prevailing rates in this type of
industry.
d. Interest rate for total capital investment is calculated @12 per cent
annum.
e. The entrepreneur is expected to raise 10 per cent of the capital as margin
money.
f. Processing unit is expected to set up partnership.

4. Implementation Schedule
Project implementation will take a period of 12 months. Break-
up of the activities and relative time for each activity is each
activity is shown below:
Scheme preparation and approval 01month
Provisional registration 02 months
Sanction of financial supports etc 04-06 months
Installation of machinery and power connection 10-12 months
Trial run and production 02 months

5. Technical Aspects
1. Location
2. Process Technology
3. Local Authority
4. Energy Conservation

6. Production Capacity
Quantity 7,000 Birds
Installed Capacity 10,000 Birds
Optimum Capacity Utilization 70%
Working Days 365
Manpower 25

7. Financial Aspects
Financial Aspects
I. Fixed Capital
a. Land and Building Amount(Rs. Lakh)
Particulars Amount
Land 13000 sq. ft. and land development 09
Built up area 12000 sq. Ft. 13
Total Cost of land and building 22

8. b. Machinery and Equipment Amount (Rs. Lakh)
Description Amount
Plant and instruments 2.5
Electrification And water Facility 1.7
others 0.7
Total 3.9

9. c. Pre-operation Expenses Amount (Rs. Lakh)
Consultancy fee, project report, deposits with
electricity department etc. 1.6
d. Total Fixed Capital Amount (Rs. Lakh)
(a+b+c) 27.5

10. II. Recurring Expenses per Annum
a. Personnel Amount (Rs. Lakh)
Designation No Salary Amount
Factory Manager 1 30,000 3.6
Supervisory staff 1 15,000 1.8
Skilled worker 10 5,000 6.0
Unskilled Workers 13 3,500 5.46
Total 25 16.86

11. b. Raw Material (Rs. Lakh)
Raw Material 12.50
Feed 37.72
Miscellaneous 8.80
Total 59.02
c. Utilities Amount (Rs. Lakh)
Power and Water 5.60

12. d. Total Recurring Amount (Rs. Lakh)
(a+b+c) 81.48
III. Working Capital Amount (Rs. Lakh)
Recurring Expenses for 3 months 20.37
IV. Total Capital Investment Amount (Rs. Lakh)
Particulars Amount
Fixed Capital 27.50
Working Capital 20.37
Total 47.87

13. V. Financial Analysis
1. Cost of Production (per annum) Amount ( Rs. Lakh)
Particulars Amount
Recurring expenses 81.48
Depreciation on building @3.33 per cent) 0.429
Depreciation on machinery@10 per cent 0.25
Interest on Capital Investment @12 percent 5.744
Total 93.6474

14. 2. Sale Proceeds (Turnover) per year Amount (Rs. Lakh)
Item Qty (Nos) Rate/kg(Rs.) Amount
Sale of birds 4000 40 24.64
Sale of manure 6300 1.5 0.20
Processed products 2300 400 121.44
Total 6300 441.5 146.28

15. 2. Net Profit (per year)
= Sales- Cost of production
= Rs.146.28 lakh- Rs.93.6474 lakh
= Rs.52.6326 lakh
3. Net Profit Ratio = Net Profit / Sales X 100
= Rs.52.6326 lakh/Rs.146.28 lakh X 100
=35.96 per cent

16. 4.Break Even Point in units
=Annual Fixed Cost /Annual Fixed Cost +Profit
=Rs. 27.5 lakh/(Rs. 27.5lakh+ Rs.52.6326 lakh)
=Rs. 27.5 lakh/ Rs. 80.13lakh
=Rs. 0.34 lakh
=34,000 birds
Cycle needed to reach break even
=34000/6300
=5 (approx)
Interpretation :
As the value is positive I expect the project is feasible and adding to this, looking of the total
net profit it can be interpreted that before completion of one year, the firm may achieve
break even and from next year the firm may think for retailer and export expansion.