PROJECT REPORT

ON
SPICE MILL

Directorate of Industries, Uttarakhand

Industrial Area Patel Nagar, Dehradun.
Tele No: 0135-2728227 | Fax No : 2728226
Website- www.doiuk.org | Email- [email protected]
 PROJECT HIGHLIGHTS

PROPRIETOR : XXXXX
ADDRESS OF THE PROPRIETOR : YYYYY
DIST............ STATE.................
CONSTITUTION : PROPRIETORSHIP
CATEGORY OF UNIT : MICRO UNIT
FATHER NAME : XXXXXX
DATE OF BIRTH : XX-YY-ZZZZ
CATEGORY OF THE PROPRIE TOR : XXXXXX
QUALIFICATION : XXXXXX
LOCATION OF UNIT : XXXXXX

PROPOSED PROJECT : SPICE MILL

NAME OF SCHEME : PRIME MINISTER’S EMPLOYMENT
GENERATION PROGRAMME
UNIT (OWN/RENTED) : OWNED/RENTED

(A) TOTAL COST OF PROJECT : Rs.6,50,000.00

(1) Fixed Capital Rs. 4,50,000.00
(2) Working Capital Limit Rs . 2,00,000.00

(B) MEANS OF FINANCE : Rs. 6,50,000.00

(1) Term Loan for Machinery Rs. 4,17,500.00
(2) Working Capital Limit Rs. 2,20,000,00
(3) Promoter’s Contribution Rs. 32,500.00
SUBSIDY UNDER PMEGP : Rs. 2,27,500.00
EMPLOYMENT POTENTIAL : 5
NORMAL WORKING HOUR : 8 HOUR
INTRODUCTION

Spices are very important and essential for adding and enhancing flavor, taste and
scent in preparation of food. They are also useful in preparation of certain medicine.
India is the largest producer, consumer and exporter of spices Andhra Pradesh,
Gujarat, Orissa, Rajasthan are major states producing varieties of spices. Spices are
heavily used in Indian household for preparing food. They give aroma, taste and
flavor to food. Curry powder, extensively used in Indian recipes, contains some time
more than 20 different spices. Even in foreign countries, Indian spices are
extensively used in preparation of food. Some of spices have medicinal properties
and can be used in preparation of medicines and ayurvedic & cosmetic products.

PROMOTER & MANAGEMENT

The promoter is reported to have good financial standing presently. The Promoters is
actively associated with the implementation of the project. Promoter is over all in
charge of the working of the unit.

MARKET AND DEMAND

India is largest consumer of spices and with the growth of population; there will be
huge demand of spices which is increasing. Moreover, the varied tastes and habits
of the people, there is even increasing demand for high quality spice and
curry/masala powder. Even there is a good scope for exporting spices to other
countries. There is a growing demand of pure/unadulterated grounded spices from
the customers who are increasingly informed these days. With various food
standards such as FSSAI, FSMS, ISI and ISO standards implementation, there can
be huge market growth for manufacturer for packed spice and curry powder. Raw
materials are easily available from the local market anywhere in India. Marketing of
spices is not complicated. Umpteen number of retail shops in and around the unit
would be the prospective buyers of spices in bulk.

MAJOR BENEFITS OF THE PROJECT

I. Easy availability of material.

II. Job opportunity for local people.

FURNITURE, FIXTURES ETC.

The total estimated cost of required Furniture & Fixtures including electrical fittings
would be Rs.- 10,000.00/-.

PREOPERATIVE EXPENSES

The total estimated cost of required Preoperative Expenses would be Rs.- 10,000/-.
PLANT, MACHINERY AND EQUIPMENTS

Plant, Machinery, Tools, Shed and other equipment’s required for the proposed unit
are available indigenously. The various items required for installation of
Rs. 4,30,000/- details as per quotation attached herewith.

QUALITY CONTROL

The concern proposed to set up above unit for which provision testing equipment
have been proposed in the project report.

TECHNICAL KNOW- HOW

The process for sale of products is simple and no sophisticated technology is

involved. There is no requirement of any type of technical knowhow.

TRANSPORTATION

The proposed location is connected by road and near to the city. Thus the unit is not
likely to face difficulty on account of transportation.

UTILITIES

a) Power:
The total connected load for the smooth operations of the unit has been
estimated and Electricity connection will be obtained as per required load
including lighting load if required.
b) Water:
 The water will be available. Necessary provision for storage of water and water
supply has been made in the project cost.

MANPOWER

The unit would require total manpower of person of different category. The details of
salary/wages proposed to be paid together with annual Salary/wages bill is given in
separate annexure.

DEPRECIATION

The depreciation on fixed assets has been computed in annexure of this project
report in accordance with the admissibility of the same under the Income Tax Act,
1961.

TRAINING

Applicant has to complete two week EDP training specially designed for the purpose,
which will be organized by KVIC/KVIB/DIC or the institution organized by or under
the administration control of Minister of MSME or any other training ce nter of repute
before disbursement of loan by the bank. After the successfully completion of EDP
training arranged by the KVIC/KVIB/DIC, the beneficiary will deposit his own
contribution in the bank as per the guideline of scheme.

CAPITAL SUBSIDY UNDER PMEGP

Unit is eligible to get capital subsidy under Prime Minister Employment Generation
Programme 35% of the total cost of the project (except cost of land). Total subsidy to
be received Rs. 2,27,500/-
TERM LOAN AND WORKING CAPITAL LOAN PMEGP SCHEME

The unit proposed to have Term loan UNDER PMEGP of Rs. 4,17,500/- & working
capital limit of Rs. 2,00,000/- Own contribution of unit will be Rs. 32,500/-, which is
five percent of total cost of project. The total project cost will be Rs.6,50,000/-.

LOAN REPAYMENT SCHDULE

Total Term Loan : Rs. 417,500/-

Total Duration : 5 Years
From the next year
Each yearly instalment : Rs. 83,500/-
Total instalments : Rs. 83,500*5 = Rs. 417,500/-

Total Rs. 417,500/--

INTEREST COMPUTATION

Interest computation is given in Annexure 6.

PROJECTED INCOME/PROFITABILITY

The projected Income & profitability statement has been shown in the attached profit
& loss account. Projected Balance sheet for the next five years is also enclosed as
here for the reference.
ECONOMIC VIABILITY

Based on the projections attached it is observed that sufficient revenue shall be

generated through operations served & it indicates the economic viability of the
proposal. Hence the project can be considered as economically favourable and
viable.

CONCLUSION

Based on the grounds discussed aforesaid it is concluded that project is

economically & feasibly viable and should be considered favourably.
 M/S SPICE MILL
ADDRESS: ZZZZZZZ
FINANCIAL ASPECTS OF THE PROJECT
A. FIXED CAPITAL
I-Plant & Machineries:
S. No. Particulars No. Rate (Rs.) Amount(Rs.)
1 SGM 1 50000 50000
2 PPM 1 300000 300000
For Hall & Shed construction ( Like angle, cement, corsand,
3 80000
sariya, bricks etc.)
TOTAL 430000

II-Other Fixed Assets:

S. No. Particulars Amount (Rs.)
1 Furniture for unit like racks, chair etc. 5000
2 Other equipments like fan, electrification etc. 5000
TOTAL 10000

III-Preliminary & Pre-operative expenses:

S. No. Particulars Amount (Rs.)
1 Transportation of Machinery / Equipments 9000
2 Misc. Expenses ( Electric fitting , Board etc) 1000
TOTAL 10000

TOTAL FIXED CAPITAL

S. No. Particulars Amount (Rs.)
1 Machinery and Equipments 430000
2 Other Fixed Assets 10000
3 Preliminary and Pre Operative Expenses 10000
TOTAL 450000
 B. WORKING CAPITAL
I- Raw Material (Per Month):

S. No. Particulars Qty. kg Rate (Rs.) Amount (Rs.)

Spices (like-coriander, Turmeric, Red
1 147000
Chili, Garam Masala, etc.)
TOTAL 147000

II- Man power (Per Month):

S. No. Particulars Nos. Salary Amount (Rs.)

1 Skill worker 2 9000 18000

2 Semi skill worker 2 7000 14000
3 Marketing Sales 1 10000 10000
TOTAL 42000

III- Utilities (Per Month):

S. No. Particulars Amount (Rs.)

1 Electricity 5000
2 Phone bill 500
3 Packing material 3000
TOTAL 8500

IV- Misc. or other expenses: (Per Month)

S. No. Particulars Amount (Rs.)

1 Repair & Renewal 2000

2 Other 500
TOTAL 2500
 TOTAL WORKING CAPITAL (Per Month)
S. No. Particulars Amount (Rs.)
1 Raw Material 147000
2 Manpower 42000
3 Utilities 8500
4 Misc. expenses 2500
TOTAL 200000

C-ANNUAL SALES REALISATION

S. No. Particulars Amount (Rs.)
1 Amount per year may be realized 3000000

D-BREAK EVEN POINT

(BASED ON FIRST YEAR OF OPERATION)
S. No. FIXED COST Amount (Rs.)
1 Interest on loan 44559
2 Depreciation 66000
3 Man power expenses (30%) 151200
4 Operating expenses (30%) 568800
Total 830559
BEP = Fixed Cost * 100 83055943
72.68
Fixed Cost + Net Profit 1142778
 M/S SPICE MILL
ADDRESS: ZZZZZZZ
Annexture-1
PROJECTED BALANCE SHEET
(Rs. In '000)
Operating Years
PARTICULARS
1st 2nd 3rd 4th 5th
A-SOURCES:-
I ) CAPITAL / OWN CONTRIBUTION 33 345 701 1094 1523
ADD:- PROFIT 312 357 393 429 462
TOTAL 345 701 1094 1523 1986
II) LOAN FUNDS
SECURED LOANS
Term Loan from Bank 334 251 167 84 0
C/C Limit from Bank 200 200 200 200 200
TOTAL (I+II) 879 1152 1461 1807 2186
B- APPLICATION:-
I) FIXED ASSETS
GROSS BLOCK 440 440 440 440 440
LESS: ACC.DEPRICIATION 66 122 170 210 245
TOTAL 374 318 270 230 195
II) CURRENT ASSETS LOANS & ADVANCES
PRELIMINERY EXPENSES 10 10 10 10 10
INVENTORIES 147 154 162 169 176
SUNDERY RECEIVABLES 250 263 275 288 300
CASH & BANK BALANCES 307 633 985 1365 1774
LOANS & ADVANCES 10 10 10 10 10
TOTAL 724 1069 1442 1842 2270
III) CURRENT LIABILITIES & PROVISIONS
SUNDERY CREDITOR 147 154 162 169 176
PROVISION FOR TAXATAION 7 12 17 21 25
EXPENSES PAYABLE 66 69 72 75 79
TOTAL 220 236 250 265 280

IV) NET CUREENT ASSETS (II-III) 505 834 1191 1577 1991

TOTAL 879 1152 1461 1807 2186

Margin Money under PMEGP 228 228 228 - -

M/S SPICE MILL

ADDRESS: ZZZZZZZ Annexture-2
PROJECTED COST OF PRODCUTION AND PROFITABILITY
(Rs. In '000)
Operating Years
Particulars st
1 2nd 3rd 4th 5th
Capacity Utilization 50% 55% 60% 65% 70%
A- INCOMES :
GROSS RECEIPTS 3000 3150 3300 3450 3600
CLSOING STOCK 147 154 162 169 176
TOTAL (A) 3147 3304 3462 3619 3776
B- EXPENSES
OPENING STCOK 0 147 154 162 169
PURCHASES AND CONSUMPTION 1911 1852 1940 2029 2117
SALARY & WAGES 504 529 554 580 605
UTILITIES EXPENSES 102 107 112 117 122
Total (B) 2517 2636 2761 2887 3013
C- GROSS PROFIT ( A-B ) 630 669 700 732 763
ADMINISTRATIVE COST 30 32 33 35 36
SELLING & DISTRIBUTION EXPENSES 150 158 165 173 180
DEPRICIATION 66 56 48 40 35
FINANCIAL CHARGES
Interest on Term Loan @11.75% 45 35 25 15 5
Interest on CC Limit @10% 20 20 20 20 20
D-TOTAL 311 300 291 282 276

E- PROFIT BEFORE TAX ( C - D ) 319 369 409 450 487

F- PROVISION FOR TAXATION 7 12 17 21 25

G- NET PROFIT AFTER TAX 312 357 393 429 462

Note :-Above statement prepared & compiled by us as per the information provided by
proprietor
 M/S SPICE MILL
ADDRESS: ZZZZZZZ
Annexture-3
PROJECTED CASH FLOW STATEMENT
(Rs. In '000)
Operating Years
PARTICULARS st
1 2nd 3rd 4th 5th
A-SOURCE OF FUND
1. Increase in Capital 33 - - - -
2. Increase in Term Loan 418 - - - -
3. Increase in C/C Limit 200 - - - -
4. Profit / (Loss) 312 357 393 429 462
5. Depreciation added back 66 56 48 40 35
6. Increase in Creditors 220 16 15 15 15
TOTAL ( A ) 1248 429 456 484 512

B-DISPOSAL OF FUND
I) FIXED ASSETS PURCHASED
1. Furniture & Fixtures 10 - - - -
2. Plant & Machinery 430 - - - -
II) CURRENT ASSETS
3. Increase in Stock 147 7 7 7 7
4. Increase in Debtors 250 13 13 12 13
5. Increase in Preliminary Exp. 10
6. Increase in Loans & Advances 10 - - - -
III) OTHERS
7. Payment of Term Loan 83 83 84 84 84
8. Decrease in Creditors 0
TOTAL ( B ) 941 103 103 103 103

Opening Cash & Bank Balance 0 307 633 985 1365

Surplus/(Deficit) ( A - B ) 307 325 352 380 409
Closing Cash & Bank Balance 307 633 985 1365 1774
Note :-Above statement prepared & compiled by us as per the information pro vided by
proprietor
 M/S SPICE MILL
ADDRESS: ZZZZZZZ
Annexture-4
COMPUTATION OF DEPRECIATION
Depreciation under WDV Method: (Rs. in '000')
Furniture & Plant &
Particulars Total
Fixture Machinery
Rate as per I. Tax Act 10% 15%
Value of Assets at beginning 10 430 440
1st year Dep. 1 65 66

Balance at the end of1st year 9 365 374

2nd year Dep. 1 55 56

Balance at the end of2nd year 8 310 318

3rd year Dep. 1 47 48

balance at the end of 3rd year 7 263 270

4th year Dep. 1 39 40

balance at the end of 4th year 6 224 230

5th year Dep. 1 34 35
 M/S SPICE MILL
ADDRESS: ZZZZZZZ

Annexture-5
PROJECTED FINANCIAL RATIOS
(Rs. In '000)
Operating Years
PARTICULARS
1st 2nd 3rd 4th 5th
CURRENT ASSETS 724 1069 1442 1842 2270
1. CURRENT
RATIO CURRENT
420 436 450 465 480
LIABILITIES
1.73 2.46 3.20 3.96 4.73
=
TIMES TIMES TIMES TIMES TIMES

2. GROSS PROFIT GROSS PROFIT 630 669 700 732 763

RATIO SALES 3000 3150 3300 3450 3600
= 21.00% 21.23% 21.22% 21.21% 21.20%

3. NET PROFIT NET PROFIT 319 369 409 450 487

RATIO SALES 3000 3150 3300 3450 3600
= 10.65% 11.72% 12.41% 13.04% 13.53%

PAT+DEP.+INTT.
430 460 482 505 527
ON TERM LOAN
4. DSCR
INTEREST+LOAN
128 118 108 99 46
INSTALMENT
3.36 3.89 4.45 5.12 11.56
=
TIMES TIMES TIMES TIMES TIMES

5. INTT. PAT+DEP.+INTT. 450 480 502 525 547

COVERAGE
RATIO INTEREST 65 55 45 35 25
6.97 8.76 11.18 14.94 21.62
=
TIMES TIMES TIMES TIMES TIMES
 M/S SPICE MILL
ADDRESS: ZZZZZZZ

Loan Amount Rs. 4,17,000 Annexture-6

Rate of Interest: 11.75%

Tenure: 5 Years (Rs. In '000)

Sl. No. Installment Interest Principal Balance Loan

1st Year 128 45 84 334

2nd Year 118 35 84 251

3rd Year 108 25 84 167

4th Year 99 15 84 84

5th Year 89 5 84 0
 DISCLAIMER

This project report is only for the purpose of reference and will give an idea and
guidance to budding and existing entrepreneurs on how to prepare a project Report.
The readers will come to know about the key components of a project. Every
earnest-effort has been made in collecting the data and information available on the
subject from different offline and online sources. This report (including any
enclosures and attachments) has been prepared solely for the purpose for which it is
provided.

Department suggest entrepreneurs to survey the market properly to find the actual
cost of fixed assets and working capital. The actual cost of the project or industry will
vary according to different elements like location, local regulation, financial
requirements of industry, capacity, type of industry, cost of resources and other
direct and indirect costs related to the project.

Department hereby disclaims any and all liability to any party for any direct, indirect,
implied, punitive, special, incidental or other consequential damages arising directly
or indirectly from any use of the Project Report Content which is provided “as is” and
“as available” basis without any warranties of any kind.

In no event shall Department will be liable for any damages whatsoever resulting from
the use or inability to use the project report content.

Prepared by

THE NATIONAL INSTITUTE FOR ENTREPRENEURSHIP AND

SMALL BUSINESS DEVELOPMENT (NIESBUD)
(Ministry of Skill Development and Entrepreneurship, Govt. of India)
HEAD OFFICE : A-23, Sector-62, NOIDA-201309 (U.P.)
Web. : www.niesbud.nic.in
REGIONAL OFFICE : NSTI Campus, Green Park Colony, Niranjanpur,
PO - Majra, Dehradun - 248171 (Uttarakhand)