Flour mill feasibility report

Estimated Cost of Land

( Rs. In '000' )

Sr. no Description

1 Land (16 Kanals) 320 70,000 22,400

2 Land Development ( 3% ) 320 1,500 480

3 Registration Charges (7.1428) 320 5,000 1,600

Total 24,480

Farooq Flour Mill Shahbaz Pur Road, Rahim Yar Khan

Area in Marla

Cost/Marla (Rs)

Total Cost (Rs)

Estimated cost of Factory Building

( Rs. In '000' )

Sr. no Description Area / sq. ft Total cost (Rs)

Main Building

1 Ground Flour ( 80 * 25 ) 2,000 800 1,600

2 First Flour ( 80 * 25 ) 2,000 800 1,600

3 Second Flour ( 80 * 25 ) 2,000 800 1,600

4 Third Flour ( 80 * 25 ) 350 800 280

Wheat Plant Forms ( 40 * 100 ) 4,000 75 300

Flour Godown 1,000 300 300

Office Block

1 Main Office 1,100 700 770

2 Boudary Wall 800 300 240

3 Office Gate 300 400 120

4 Labour Quarter 1,500 400 600

Total 7,410


Rate / sq.ft (Rs)

Estimated Costof Local Machinery

( Rs. In '000' )

Sr. no Name of Machiney Quantity

18 375 3,000

2 Purifier 2.4 tons construction 2 150 300

3 Penumatic Fan High Pressure 2 60 120

4 Reduction Gear 10 6.5 65

5 Bran Fisher Machine 1 30 30

6 Air Lock 30 8 240

7 Washing Machine Big Size 1 250 250

8

6,500

Workshop Equipment

1 Electric Weldingset 2 10 20

2 Table Drill with Motor 1 10 10

3 Hand Tools 150

4 Scale Weight 4 3 120

Total 10,805

Intallation Charges( 5% of Plant & Machinery Cost) 592

Total cost of Plant & Machinery 11,397


Rate / unit (Rs)

Total cost (Rs)

Roller flour mill ( 100*250) mm steel construction

Other Machinery such as. Elecric generator. Low pressure fans, grain cleansing, pipes, nut bolts etc.

Estimated Cost of Imported Machinery

( Rs. In '000' )

Sr. no Name of Machiney Quantity

NIL

Total NIL


Units in Currency

Rate / unit (Rs)

Total cost (Rs)

Estimated Cost of Furnture and Fixture

( Rs. In '000' )

Sr.no Description Quantity Rate (Rs) Total Cost (Rs)

Furniture and Fixture

1 Chairs 10 2,000 20

2 Tables 5 6,000 30

3 Stools 4 500 2,000

Required Office equipment

1 Computers 2 20,000 40

2 Computer printer 2 12,000 24

3 Telephones 4 2,000 8

4 Carpets 1 15,000 15

5 Electrical Fittings 25,000 25

Total 2,162

Farooq Four Mill Shahbaz Pur Road, Rahim Yar Khan

Estimated Cost of vehicles

( Rs. In '000' )

Sr. no Description Units Total Cost (Rs)

1 Tractor 1 600 600

2 Shahzor Mazda 2 1,200 2,400

Total 3,000

Farooq Flour Mill Shahbaz Pur Road,Rahim Yar Khan

Per Unit Cost (Rs)

SCHEDULE OF PRE-PRODUCTION EXPENCES

( Rs. In '000' )

DESCRIPTION TOTAL AMOUNT

INCORPORATION FEES 400

CONSULTENCY FEES 120

LEGAL DOCUMENTATION 50

TRAVELLING EXPENCES 330

OTHER PRE- PRODUCTION EXPENCES 200

TOTAL 1,100


Initial Net Working Capital

( Rs. In '000' )

A. Current Assets

1 Inventories

43,355

-

342

TOTAL COST OF INVENTORIES 43,697

2 Advances and Deposits, & Prepayments 8003 Accounts Receivables (0.05% of Sales) 25,1264 Cash 1,000

Total Current Assets 70,623

B. Possible Current Liabilities:

30,588

Initial Net Working Capital 40,035


a) Raw Material (5% of raw material 20 days req)

b) Finished Goods

c) Spares & Stores

Less: Bank Borrowing 70% of Inventories

Estimated Detailed Cost of Project

( Rs. In '000' )

Sr. no Description Total Cost (Rs)

1 Land 24,480

2 Building 7,410

3 Plant & Machinery 11,397

4 Furniture & Fixture 2,162

5 Vehicles 3,000

6 Pre-production Expences 1,100

Estimated Fixed Cost 49,549

Add Net Initial Net Working Capital 40,035

Total 89,584

Means of financing Rs(000)Debt (50%) 44,792

Equity (50%) 44,792


Production

Shifts / Day 3

Hours / Shift 8

Working Days / Annum 300

Flour 72% TONS 21,600

Meda / Suji 15% TONS 4,500

Bran 13% TONS 3,900

Total 30,000

SALES PRICE

Flour 72% RATE / KG 26Meda / Suji 15% RATE / KG 34Bran 13% RATE / KG 15


PRODUCTION CAPACITY (ANNUM) AT 100% CAPACITY Total

YEAR 2010 2011 2012

CAPACITY UTILIZATION 65% 70% 80%

PRODUCTION IN M. TONS

Flour (72%) 14,040 15,120 17,280MEDA / SUJI (15%) 2,925 3,150 3,600BRAN (13%) 2,535 2,730 3,120TOTAL 19,500 21,000 24,000

ADD: STOCK (OPENNING)

Flour (72%) 0 0 0MEDA / SUJI (15%) 0 0 0BRAN (13%) 0 0 0TOTAL 0 0 0

AVAILABLE FOR SALE


LESS STOCK (CLOSING)

Flour (72%) 0 0 0MEDA / SUJI (15%) 0 0 0BRAN (13%) 0 0 0TOTAL 0 0 0

SALES IN METRIC TON


SALES VALUE



RAW MATERIAL BUDGET AT 100% CAPACITY

( Rs. In '000' )

DESCRIPTION UNITS QUANTITIY RATE TOTAL

WHEAT TONS 29,000 23 667,000

TOTAL 667,000

YEAR 2010 2011 2012

CAPACITY UTILIZATION 65% 70% 80%

RAW MATERIAL 433,550 466,900 533,600

ADD: OPENING STOCKS 0 201 216

MATERIAL AVAILBLE FOR USE 433,550 467,101 533,816

86,710 93,380 106,720

RAW MATERIAL USED 346,840 373,721 427,096


LESS: CLOSING STOCK (20% OF RAW MAT USED) 20 DAYS REQ.

( Rs. In '000' )

FACTORY WAGES AND SALARIES

CETAGORY NO.

DIRECT LABOUR

SKILLED LABOUR 6 8,000 576

UN-SKILLED LABOUR 10 6,000 720

TOTAL 1,296

INDIRECT LABOUR

FACTORY MANAGER 1 25,000 300

MILLER 1 15,000 180

STORE KEEPER 2 6,000 144

PEONS/SWEEPERS/WATCHMAN 2 5,000 120

FITTERS 1 8,000 96

ELECTRICIAN 2 9,000 216

TOTAL 1,056

25 2,352DIRECT LABOUR

Year 2,010 2,011 2,012Basic Salary 1,296 1,335 1,375Increment (3%) - 39 40Fringe Benefits (25%) 324 334 344

Total 1,620 1,669 1,719

INDIRECT LABOUR

Year 2,010 2,011 2,012Basic Salary 1,056 1,088 1,120Increment (3%) - 32 33Fringe Benefits (25%) 264 272 280

Total 1,320 1,360 1,400

Total 2,940 3,028 3,119


WAGES/ SALARIES

PER MONTH

WAGES/ SALARIES

PER ANNUM

Factory Overheads

Electricity Required 450KW

YEAR 2010 2011 2012

Capacity Utililaztion 65% 70% 80%

Variable Charges on Electricity 4,212 4,536 5,184

Fixed Charges on Electricity 450 450 450

STORES & SPARES

Plant & Machinery 3% 342 342 342

REPAIR & MAINTENANCCE

Building & Machinery 3% 564 564 564

INSURANCE

Building & Machinery 2% 376 376 376

YEAR 2010 2011 2012

Capacity Utililaztion 65% 70% 80%

Variable OH 4,212 4,536 5,184

Fixed OH 3,240 3,240 3,240

Total OH 7,452 7,776 8,424


Depriciation

FIXED ASSETS COST TOTAL

Building 7,410 5% 371

Plant & Machinery 12,428 5% 621

.

Furnitre & Fixture 2,162 10% 216

Vhehic,es 3,000 10% 300

Total 1,508

AMORTIZATION

Pre-Production Expences 1350


RATE (%)

Office Payroll

ADMINISTRATIVE STAFF NO.

MANAGING PARTNER 1 30,000 360

ACCOUNTANT 3 15,000 540

CLERICAL STAFF 1 8,000 96

PEON/MALI/SWEEPER 1 5,000 60

TOTAL 1,056

ADMINISTRATIVE EXPENCES 2010 2011 2012

ADMINISTRATIVE SALARIES 1056 1109 1164

ADD: INCREASE @ 5% PER ANNUM 53 55

317 333 349

TOTAL 1373 1495 1568


SALARY / MONTH

SALARY / ANNUM

ADD: FRINGE BENEFITS @ 30 % PER ANNUM

ADMINISTRATIVE EXPENCES

( Rs. In '000' )

YEAR 2010 2011 2012

ADMINISTRATIVE SALARIES 1,373 1,495 1,568

TELEPHONE & TELEX 50 65 80

POSTAGE & STAMPS 10 15 20

PRINTING & STATIONARY 40 45 50

TRAVELING & CONVEYANCE 200 210 220

ENTERTAINMENT 100 110 120

OFFICE MAINTENANCE 40 45 50

OTHER EXPENCES 15 20 25

TOTAL 1,828 2,005 2,133


MARKETING STAFF

( Rs. In '000' )

MARKETING STAFF NO.

MARKETING MANAGER 1 30,000 360

SALES MAN 3 7,000 252

TOTAL 612

MAKETING STAFF EXPENCES 2010 2011 2012

SELLING SALARIES 612 643 675

ADD: INCREASE @ 5% PER ANNUM ---- 31 32

184 193 203

TOTAL 796 867 910


SALARY / MONTH

SALARY / ANNUM

ADD: FRINGE BENEFITS @ 30 % PER ANNUM

Selling & Marketing Expences

( Rs. In '000' )

YEAR 2010 2011 2012

Selling Salaries 796 867 910

Transportaion Expences 1,200 1,320 1,452Advertising Expences 30 32 34Promotional Expences 25 30 35Other 10 11 12

Total 2,061 2,260 2,443

Farooq Flour Mill Shahbaz Pur Road, Rahim Yar

Khan

Loan Repayment Schdule

( Rs. In '000' )

Year Principal Interest Amount0 44,7921 4,479 8,063 40,3132 4,479 7,256 35,8343 4,479 6,450 31,3544 4,479 5,644 26,8755 4,479 4,838 22,3966 4,479 4,031 17,9177 4,479 3,225 13,4388 4,479 2,419 8,9589 4,479 1,613 4,479

10 4,479 806 0


Income Statement ( Rs. In '000' )

Years ending September 30 : 2010 2011 2012

Sales 502,515 541,170 618,480Less: COST OF SALES

Raw Material 433,550 466,900 533,600Labor 2,940 3,028 3,119Manufacturing Overheads 7,452 7,776 8,424Total Cost of Goods Manufactured 443,942 477,705 545,143opening inventory of finished goods - - -Cost of goods available for sale 443,942 477,705 545,143ending inventory of finished goods - - -Cost of Sales 443,942 477,705 545,143

Gross Profit 58,573 63,465 73,337

OPERATING EXPENSES:Administrative Expenses 1,828 2,005 2,133 Seling Expenses 2,061 2,260 2,443

Total Operating Expenses 3,889 4,265 4,576

Operating Profit 54,684 59,200 68,761

OTHER EXPENSES:

Financial Charges on:Long Term Loan 8,063 7,256 6,450 Bank Borrowings - Amortization of Pre-Production Expenses 450 450 450

Total Other Expenses 8,513 7,706 6,900

Profit Before Tax and Worker's Fund 46,171 51,494 61,861

Worker's Fund (5%) 2,309 2,575 3,093

Profit/(Loss) Before Tax 43,863 48,919 58,768

Tax @ 30% 13,159 14,676 17,630

Net Profit 30,704 34,244 41,137


Cash Flow Statement ( Rs. In '000' )

Years ending 30th September:

End ofOperating Years

Construction

2009 2010 2011 2012

SOURCES OF FUNDS:

Operating Profits - 54,684 59,200 68,761

Add: Depreciation - 1,508 1,508 1,508

Total Funds from Operation - 56,192 60,709 70,269

Other Sources:

Long Term Loan 44,792 - - -

Bank Borrowings - - - -

Paid-Up Capital 44,792 - - -

Total Sources of Funds 89,584 56,192 60,709 70,269

APPLICATION OF FUNDS:

Investment in Fixed Assets 48,449 - - -

Financial Charges during Construction - - - -

Pre-Production Expenses 1,100 - - -

Repayment of:

Long Term Loan - - 4,479 4,479


Financial Charges On:

Long Term Loan - 8,063 7,256 6,450


PAYMENT OF:

Taxes - - 13,159 14,676

Dividends - - - -

Worker's Fund - - 2,309 2,575

Short Term Investment - 1,000 10000 30000

Increase in Current Assets (Other than Cash) 22,819 46,853 5,318 10,586

Total Application of Funds 72,368 55,916 42,521 68,765Cash Surplus/(Deficit) 17,215 276 18,188 1,503

Cash at the Beginning of the Year - 17,215 17,491 35,679


Cash at the end of the year 17,215 17,491 35,679 37,183

Balance Sheet ( Rs. In '000' )

End of Operating Years

Year ending 31st October Construction2009 2010 2011 2012

ASSETS:

CURRENT ASSETS:

Cash and Bank Balance 17,215 17,491 35,679 37,183

Short Term Investment - 1,000 10,000 30,000

Accounts Receivable (10% of sales) - 25,126 27,059 30,924

Inventories:

Raw Material 21,678 43,355 46,690 53,360

Finished Goods - - - - Stores & Spares 342 342 342 342

Advances, Deposits and Prepayments 800 850 900 950

Total Current Assets 40,035 88,164 120,670 152,759

FIXED ASSETS:

Fixed Assets at Cost 48,449 48,449 48,449 48,449Accumulated Depreciation on Fixed Assets - 1,508 3,016 4,524Fixed Assets Net 48,449 46,941 45,433 43,925Intangibles 1,100 733 367 -

Total Assets 89,584 135,838 166,470 196,683

LIABILITIES AND EQUITY:

CURRENT LIABILITIES:


Taxes Payable - 13,159 14,676 17,630

Dividend Payable - - - -

Worker's Fund Payable - 2,309 2,575 3,093

Current Maturity of Long Term Debt - 4,479 4,479 4,479

Total Current Liabilities - 19,947 21,730 25,202

LONG TERM DEBTS:

Long Term Debt 44,792 40,313 35,834 31,354

Total Liabilites 44,792 80,206 79,293 81,759

EQUITY:

Paid-Up-capital 44,792 44,792 44,792 44,792

Retained Earnings - 10,840 42,385 70,132

Total Equity 44,792 55,632 87,177 114,924

Total Liabilities and Equity 89,584 135,838 166,470 196,683

Ratios

Year 2010 2011 2012

Current Ratio 4.42 5.55 6.06

Quick Ratio 2.19 3.35 3.89

Debt Equity Ratio 3.72 0.85 0.45

Oprating Profit Ratio 10.88% 10.94% 11.12%

Gross Profit Ratio 11.66% 11.73% 11.86%

Net Profit Ratio 6.11% 6.33% 6.65%


Cash Breakeven

Sales from operations( At 80% Capacity )

( Rs. In '000' )

Items Fixed Cost Total cost

Raw Material 533,600 533,600Labour 1,719 1,400 3,119Manufacturing Overheads 5,184 3,240 8,424Administrative Expenses 2,133 2,133Selling Expenses 2,443 2,443Interest / Mark-Up Expenses 6,450 6,450Worker's Participation Fund 3,093 3,093Debt Payment 4,479 4,479Tax 17,630 17,630

Total: 546,039 35,333 581,372

Sales from Operation 618,480

Break-Even Point: =

Break-Even Point: =35,333 x 80%

618,480-546,039

Break-Even Point: = 39%


Variable Cost

Fixed cost Sales from Operation-Variable

cost

x Operatin Capacity

Commercial Break Even

( At 65% Capacity ) ( Rs. In '000' )

ItemsFixed Cost Total Cost

Raw Material 433,550 - 433,550Labor 2,940 2,940Manufacturing Overheads 4,212 3,240 7,452

1,828 1,828Selling Expenses 2,061 2,061

Interest / Mark-Up Expenses 8,063 8,063

367 367

Total: 442,763 13,498 456,261

Sales from Operation 502,515

Break-Even Point: =

Break-Even Point: = 13,498 x 65%502,515-442,763

Break-Even Point: = 15%


Variable Cost

Administrative & General Expenses

Amortization of Pre-Production Expenses

Fixed cost Sales from Operation-Variable

cost

x Operatin Capacity

Weighted Average Cost of Capital

("000") ("000")

Nature of Fund Amount Total Interest

Long Term Loan 44,792 18 11 4,838

Paid - Up Capital 44,792 18 18 8,063

Total 89,584 12,900

Weighted Average Cost of Capital: 14%

Farooq Flour Mill Shahbaz Pur Road, Rahim Yar

Khan

Interest Rate %

After Tax Rate %

Internal Financial Rate Of Return

( Rs. In '000' )

YearsCapital Operating

DepreciationWorker's

TaxesNet Cash Net Cash Inflow

Outlay Profit Fund Return (Outflow) - 72,368 - - - - - (72,368)

1 46,853 54,684 1,508 - - 56,192 9,338 2 5,318 59,200 1,508 2,309 13,159 60,709 39,923 3 10,586 68,761 1,508 2,575 14,676 70,269 42,433 4 - 68,761 1,508 3,093 17,630 70,269 49,545 5 - 68,761 1,508 3,093 17,630 70,269 49,545 6 - 68,761 1,508 3,093 17,630 70,269 49,545 7 - 68,761 1,508 3,093 17,630 70,269 49,545 8 - 68,761 1,508 3,093 17,630 70,269 49,545 9 - 68,761 1,508 3,093 17,630 70,269 49,545

10 - 68,761 1,508 3,093 17,630 70,269 49,545 11 516 69,277 992 3,093 17,630 70,269 49,029 12 - 69,277 992 3,093 17,630 70,269 49,545 13 - 69,277 992 3,093 17,630 70,269 49,545 14 - 69,277 992 3,093 17,630 70,269 49,545 15 (20,000) 69,277 992 6,186 35,261 28,822 7,376

115,641 35,699

PVIFA =Initial Investment

Average cash inflows

PVIFA =115,64135,699

PVIFA = 3.24

IRR = 30%


Flour mill feasibility report

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Transcript of Flour mill feasibility report