Oil and Ghee Mill

A Feasibility Of NAIMAT Oil & Ghee Mills (Pvt.) Ltd

By Islamian Business Executives 1


In the Name of Allah,

The Most Beneficent,

The Most Merciful.

Read:

In the Name of your Lord

Who Created, Created Man from a Clot.

Read:

And your Lord is the most Bounteous,

Who taught by the pen,

The man that which he did not Know

Al-Quran



“ALLAH DOES NOT LOOK AT

YOUR FORMS AND POSSESSIONS

BUT HE LOOKS AT YOUR

HEART AND DEEDS”

(MUSLIM)



DEDICATED TO ALLAH

The Almighty

The Omniscient

The Omnipotent

The Omnipresent

The creator of creative mind.



PREFACE


Submitted To:Mr. JAVED IQBAL

Submitted By: Group # 1 Roll no.

Mr. Sajjad Hussain 24

Mr. Zahid Ghafoor 36

Mr. Faisal Rashid 12


Department Of COMMERCE has always tried to make its students be familiar

with the different techniques in the field of Project Appraisal in order that they

can understand & present the concepts of Project Appraisal in the light of

present-day progress & development.

The importance of principal work almost exists in every professional field.

Practical knowledge makes man a technical person who enables to do every work

promptly regarding his profession. The very distinctive feature of the degree of

MASTER OF COMMERCE is that it stresses more on the practical aspects of

study. Our teachers have extremely realized this importance & they use all the

tact’s to expose us to the real field circumstances.

Project Appraisal has become a common phenomenon now-a-days. We have

also endeavored to consolidate in this assignment all the important features of

the topic. Every effort has been made to incorporate all the available means of

information to make this assignment exhaustive & comprehensive. We tried our

best to accomplish our work with honesty and diligence.

Mr. Sajjad Hussain

Mr. Zahid Ghafoor

Mr. Faisal Rashid



Acknowledgement

Special thanks to Almighty Allah, creator of the creative minds.

We pay abundant thanks to our encouraging teacher & instructor

Mr. Javed Iqbal Chairman Department of Commerce for enlightens

our minds with the rich information about the topic.

SPECIAL THANKS

Mr. Arshad Javed, Arshad Chudhary & Management of Asia Ghee

Mills Pvt. Ltd. Ahmed pur Road Bahawalpur.

Bahawalpur State Agency Bahawalpur.

District Govt. building department Saddar Pulli Bahawalpur.

MEPCO Office



OIL PLANT



Table OF Contents

Sr. No Particulars Page No.

1 Executive Summery 12

2

Introduction & Estimated Cost of the

Project 17

3Name of Machinery Supplier

18

4Implementation Schedule

19

5Management

20

6Sponsors

21

7Introduction to Industry

22

8Market Analysis

24

9Raw Material

26

10Technical Analysis

28

11SWOT Analysis & Financial Ratios

30

12Manufacturing Process

31

13Economic Analysis

45

14Financial Statements

46

15Visits Highlights

68

16Conclusion & recommendation

69




Sr. No ParticularsPage No.

1 Cost of Land 46

2Cost of Civil Work

47

3Cost of Plant & Machinery

48

4Estimated Cost of project

49

5Pre-Production expense

50

6Initial Working Capital

50

7Production at 100% capacity

51

8Raw Material Requirement

52

9Cost of Labor

53

10Manufacturing over head

55

11Admin, General and Selling Expense

56

12Depreciation

58

13Unit of Production and Sale

59

14Load Re payment schedule

61

15Estimated Income Statement

62

16 Estimated Balance Sheet

64

17 Estimated Cash flow statement

66

18 WACC & IRR & Payback Period

67


EXECUTIVE SUMMERY

1. The projectThe project

NAIMAT Oil & Ghee Mills is a manufacturing plant proposed to set up near Ahmad pur East,

Karachi road Bahawalpur. The proposed project site enjoys the benefits of easy availability of

raw material, quick access to the markets of Pakistan as it is located on the main road, source

of power and electricity & transportation. The project will be equipped with most locally

manufactured plant and machinery and rest of equipment will be imported from China.

2.2. LocationLocation

The proposed project contemplates to set up a new Oil & Ghee Mills 2 km from Ahmedpur

East. The proposed project site enjoys the benefits of 1) easy availability of raw material, 2)

quick access to main road, 3) sources of power, water, fuel etc., 4) availability of Transport

and modern Communication systems, 5) availability of Skilled and Un-Skilled labor, and 6)

free from environmental hazards like water logging and salinity and floods.

3. COMPANY ADDRESSCOMPANY ADDRESS

SITE EDDRESS

2 km from Ahmed pur East at National Highway.

4. Product’s Range

A. Cooking OIL

B. Vegetable Ghee

C. Laundry Soap

Cooking will be in the packaging of 1 kg, 2.5 kg and 5 kg and Vegetable Ghee will be in the

packaging of ½ kg, 1 kg, 2.5 kg, 5 kg, 10 kg and 16 kg.

5. MarketMarket



Our site is centrally located in Pakistan from where we can easily get access to the markets

of the country. We have some competitors but its success and profitability is very much

related to its low cost and high quality. Oil and Ghee is basic ingredient of every meal so it

has high demand locally and nationally. Oil and ghee are also exported to Afghanistan and

Central Asian countries.

6. PlantPlant capacitycapacity

The 100% capacity of plant is 150 Tons per day, of which 50 Tons would be the production

of cooking oil and 100 Tons of Vegetable Ghee. We will start production from 60% capacity

and will be increased 10% every year.

7. MaterialMaterial andand inputinput

The basic raw material required for producing cooking oil is Canola oil which will be

imported from Canada and Palm Olein oil for ghee will be imported from Malaysia. Other

inputs like Caustic Soda, Bleaching Earth, Common Salt, Antioxidant, Citric Acid, and

Nickel Catalyst are available in Pakistan.

8. ProjectProject EngineeringEngineering

The plant and machinery used for production consist of Storage Section, Pre-Refining

Section, Hydrogenation Section, Post-Refining Section, Ghee Filling Section, Refrigeration

Section, Steam Generation, Soap Section, Water Pump Section, Hydrogen Gas Generation &

Storage Section, Electric Section, Mechanical workshop.

9. ManMan PowerPower

Mainly three types of man power is required, production labor consist of 21 skilled, 24 semi

skilled and 32 unskilled and 25 Admin staff that includes skilled workers, chowkidar and

peon.

10. ImplementationImplementation :



The total time period for the installation & execution of output is estimated to be 6 months

from the date of approval of finance.

11. EstimatedEstimated CostCost : Rs.

Total fixed cost of project 327,602

+ Initial permanent working capital 790,091.18

Total cost of Project 1,117,693

12.12. Financial analysis/means of financing:Financial analysis/means of financing:

Sixty percent of estimated cost of the proposed project will be obtained through loan and

remaining 40% will be contributed by the owner.

Rs. (000)

Debt 670,615.95

Equity 447,077.30

Debt equity Ratio

60%: 40%

13.13. Financial Assistance:Financial Assistance:

Rs. 670,615.95 will be obtained from Muslim Commercial bank limited Bahawalpur at 16% per

annum

14.14. Estimated operating Results:Estimated operating Results:

ITEMS 2011 2012 2013



Rs.000 Rs.000 Rs.000

Sales 2,868,413 3,633,323 4,187,882Gross profit 1,114,181 2,156,535 2,441,263

Operating profit 1,046,095 2,072,078 2,344,536

Net profit 486,229 1,064,715 1,222,734

15.15. Financial Position: Financial Position:

(Rs.000)

ITEMS 2011 2012 2013

Current Assets 2,708,657 4,901,208 7,034,783

Fixed Assets 293,180 293,180 293,180

Intangibles 0 0 0

16.16. Financial Ratios: Financial Ratios:

(Rs.000)

ITEMS 2011 2012 2013

Current Ratio2.23 2.79 3.34

Quick Ratio1.95 2.50 3.03

Debt Ratio %58% 44% 35%

Gross Profit Ratio% 39% 34% 33%Operating profit % 39% 34% 33%Net Profit Ratio% 17% 15% 15%

Financial IndicatorsFinancial Indicators



Project costProject cost IFRRIFRR WACCWACC

56%56% 9.84%9.84%

Machinery Suppliers

New Chaudhary agricultural and mechanical engineers

Multan Pakistan

Company Name: New Chaudhary Agricultural Mechanical Engineers

Street Address: Chowk Bwp, Muzaffar Garh Road

City: Multan

Province/State: Punjab

Country/Region: Pakistan

Zip: 60000

Telephone: 092-061-6527607

Mobile Phone: 09203008737610

Fax: 092-061-6529693 & 092-061-4233706

Website: http://www.newcame.com


http://www.newcame.com/


THE PROJECT INTRODUCTION

The proposed project contemplates to set up a new Oil & Ghee Mill Unit at Karachi Road

near4 Ahmadpur East The annual rated production capacity of the plant is estimated about 150

ton of which 5o ton oil and 100 ton ghee working 350 days a year and tripled shift per day of 8

hours each. The project shall be equipped with latest locally manufacturing plant and

Machinery.

Estimated Cost of the Project (Rs. 000)

Total Fixed Cost 327,602

Initial Fixed Working Capital 790,091.18

Total 1,117,693

Means of Finance

The Cost of the Project is proposed to be financed by Debt and Equity in the ratios of

60: 40 respectively.

Equity 447,077.30 Debt 670,615.95

Total 1,117,693.25

TERMS AND CONDITIONS:

1. Proposed name of the project need to be mentioned.



2. Sponsors contribution will be 40% of the total cost of the project.

3. The amount of the loan will be deposited into the joint account with The

Muslim Commercial Bank.

4. Land will be purchased and transferred to the company name.

5. Land will be pledged with the Muslim Commercial bank as security.

6. Final Contract with material, machinery, suppliers and Civil Work need to

be disclosed to the Loan Sanctioning Bank. (MCB)

7. Loan is to be repaid in 10 equal annual installments to the Muslim

Commercial Bank.

8. For further financial assistance approval from Muslim Commercial bank is

necessary.

9. Accessories and utilities will be arranged as per the contract by the contract

of civil work himself.

Name of Machinery Supplier

New Chaudhary agricultural and mechanical engineers

Multan Pakistan

Company Name: New Chaudhary Agricultural Mechanical Engineers

Street Address: Chowk Bwp, Muzaffar Garh Road

City: Multan

Province/State: Punjab

Country/Region: Pakistan

Zip: 60000

Telephone: 092-061-6527607

Mobile Phone: 09203008737610

Fax: 092-061-6529693 & 092-061-4233706



Website: http://www.newcame.com

NAIMAT Oil & Ghee Mills

IMPLEMENTATION SCHEDULE

S.NO. ACTIVITIES MONTH YEAR

1 Acquiring of Land & leveling Start 1st Jan 2010

Complete 30th Jan 2010

2

Engineering studies and designing of civil work

Start 2nd Feb 2010

Complete 10th Mar 2010

4 Order for local machinery 15th Sep 2010

5 Construction of building and civil work Start 1st Apr 2010

Complete 30th Sep 2010

6 Arrival of local machinery at site 15th Oct 2010

7 Erection and installation of machinery Start 20th Oct 2010

Complete 30th Nov 2010

8 Order for raw materials 20th Nov 2010

9 Trial run Start 10th Dec 2010

Complete 25th Dec 2010

10 Start of commercial production 1st Jan 2011


http://www.newcame.com/


Management

The overall management and control of the firm will be actively managed by its active

partners who will actively participate in management decisions and control the affairs

of the firm.

Partners Name Designation

1. Mr. Javed Hussain Managing Director

2. Mr. Faisal Rashid General Manager

4. Mr. Zahid Ghafoor Production Manager

5. Mr. Sajjad Karim khan Finance Manager

The partners will contribute equally in the equity of the project and will equally participate in

the profit and loss of the firm's business.



Sponsors

The sponsors of the project are professionally qualified and have valuable and extensive

experience of business management in industrial fields. They have got good trading contacts

and market reputation in the industry... The sponsors experience would assist the firm in its

smooth and profitable operations.

The sponsors are financially sound and capable to contribute their part of equity in the

proposed project.

The Sponsors detail is as under:-

1. Name : Mr. JAVED HUSSAIN

Address : Bahawalpur.

Qualification : MBA

Experience : 10 years

2. Name : Mr. FAISAL RASHID

Address : Khair Pur Tamewali Bahawalpur

Qualification : M.COM (Finance)


3. Name : Mr. ZAHID GHAFOOR

Address : Alipur Distt. Muzaffar Garh



4. Name : Mr. SAJJAD KARIM KHAN



Address : Uch Sharif Tehsil Ahmedpur East Distt. Bahawalpur



Introduction to Industry

The manufacture of Vegetable Ghee/ Cooking Oil in the organized sector contributing around

Rs.30 billion annually to the government exchequer in the form of Custom Duty, Federal

Excise Duty and Income Tax etc. Ghee & Oil Units are not only catering to the needs of

Pakistan’s whole population, but also supplying this dietary item of daily use to the people of

neighboring countries. The export of the Vegetable Ghee to Afghanistan and the Central Asian

States via land route through Torkhum and Chamman borders is a good source to earn

precious foreign exchange for our country. In addition of boosting trade relations with these

countries that’s why the future of this industry is bright in Pakistan.

Industry Background and HistoryIndustry Background and History

Ghee industry was introduced in the sub continent in mid thirties, and since then it has grown

tremendously in face of all environmental hazards. It has been subjected to serious edible Oil

shortages, government inconsistent policies and severe variations between demand and supply

in the domestic market.

There are about 150 units of edible oil and oil extraction in Pakistan, involved in extraction

and production of various types of cooking oil and ghee. However, the number of ghee

manufacturer's registered with PVMA at present are 95.

The country which was self sufficient in edible Oil production (0.154 million MT), till 1960,

and paying not a single dollar against the import bill, is today importing well over 1.160

million MT against an import bill of no less that Rs.33000 million per year, being the third



largest edible Oil importing country of the world, after China and the European Union. All

these imports originated from Malaysia.

During the past 21 years of interrupted and partially half hearted efforts of successive

governments since 1979, the country has been able to procure only 0.5 million MT of edible

Oil from indigenous resources while the rest of the 1.1 million MT is procured from imports.

The share of ghee & cooking oil in large scale manufacturing is 7.4 percent. During the last

seven years (FY01-07) the average annual growth for ghee/edible oil production is about seven

percent

The structure of Ghee/Oil industry is just like all the other developing industries of Pakistan.

There are certain well-established companies working with good brand names, serving the

nation as a whole. Along with them there are certain units, which are working in limited areas,

meeting the requirements of these niche markets. Some of the vegetable Ghee mills are

working under the control of government and other are held privately.

The raw material required for the production of Ghee/Oil is imported from different countries

and this is the biggest imported item in food category. The prices of Ghee/Oil are very much

influenced by the duties on these imports and the international price fluctuations of these

items.

In early 1990’s there had been a serious crisis in the Ghee industry, and the main reason for

this was that production of Ghee was greater than the demand. In this period due to the heavy

looses on account of these units government privatize so many Ghee producing units.



Vegetable Ghee is the commercial term for vegetable Oil hardened by the process of

hydrogenation. Cottonseed, soybean Oil, Sun Flower Oil, corn Oil, is being mainly used in

Pakistan for the manufacturing of Oil/Ghee. Pakistan is importing Palm Oil and Soya bean Oil

from America, Indonesia and Malaysia. During 1999-2000 Pakistan imports of soya bean Oil

and palm Oil has drastically decreased both in quantity and value. Pakistan imported soya bean

Oil worth $75.8 million and Palm Oil $267.8 million in year 1999-2000.

Market AnalysisMarket AnalysisPakistan is the third largest importer of edible oil as only around 27.0 percent of its

requirement is met through domestic production. Pakistan: Per Kg Consumption of Vegetable

Ghee Per Annum Is Lower Than EU, USA and Russia But Is Above India and Bangladesh

(18.86 Kg per Annum per Person)

The remaining needs are met from imports of various edible oils. The ghee and cooking oil are

the basic food items of human diet all over the world. With the passage of time the overall

production as well as consumption of ghee & cooking oil has significantly increased in

Pakistan

CompetitorsCompetitors

In Pakistan ghee industry is flourished over the years. Today there are many Locals and

National companies as well as international companies engage in the production of ghee and

oil working in Pakistan.



Among multinational companies includes Lever Brothers (Pvt.) Ltd. They manufacture

DALDA and PLANTA cooking oil and ghee. Some other companies are as follows.

1) Al Hilal Vegetable Ghee Mills engages in the production of Sultan Banaspati Ghee. It is

situated in Multan.

2) Shahbaz Ghee Mills is engage in the production of Shahbaz Banaspati. It is situated in

Rahim Yar Khan.

3) Wazeer Ali Industries Ltd. engages in the production of Tallo Banaspati ghee and cooking

oil. It is situated in Hyderabad.

4) Fatima Enterprises Ltd.

5) Rafhan Maize Product Company involved in the production of Rafhan Corn Oil and it is

situated in Faislabad.

6) Ahmad Food Industries manufactures Ahmad Soya bean Oil.

7) Ghee Corporation of Pakistan (G.C.P) under which 26 units engaged in the production of

ghee is working all over the country.

Apart from these combines there are many other firms manufacturing ghee. Now Brothers

ghee and Oil Mill is entering in the market.



Raw material:

The basic raw material required for producing cooking oil and vegetable ghee is Canola oil,

Palm oil and Palm alien. These raw materials are not locally available; they would be imported

from Canada and Malaysia. There are some other input materials which are necessary for

production but they are available in Pakistan. List of raw materials and their prices are listed

below.

Cooking Oil

Raw Material

Quantity Price Rs (000)

Canola Oil (Tons) 17500 86000/Ton

Caustic Soda (Kg) 102000 25/kg

Fuller Earth (Kg) 204000 30/kg

Common Salt (Kg) 26000 3/kg

Antioxidants (Kg) 3400 160/kg

Vegetable Ghee

Raw Material

Quantity Price Rs (000)

RBD Palm Olein Oil (Tons) 32,000 75000/ton



Caustic Soda (Kg) 75,000 25/kg

Fuller Earth (Kg) 67,000 30/kg

Common Salt (Kg) 50,000 3/kg

Citric Acid (Kg) 7000 120/kg

Nickel Catalyst (Kg) 5000 1400/kg

Project demand, Products and product mix:

The main products of the company are cooking oil and vegetable ghee and by-products will be

laundry soap and carbon dioxide gas. At 100% capacity, annual production of cooking oil will

be 17500 Tons, vegetable ghee 32000 Tons and Laundry soap 1050 Tons.



TECHNICAL ANALYSIS

Location of the Project

The project is proposed to set up at Karachi Road near Ahmadpur East. The site enjoys the

following advantages:-

- Easy availability of raw material

- Access to the main road, Sources of Power, water, fuel etc.

- Availability of transport & communication like telephone, Internet etc.

- Availability of skilled and Un-Skilled manpower

- Free from other environmental hazards like water logging, floods, salinity etc.

Utilities

Main utilities required for project are gas, electricity, water, and transportation and disposal

arrangement.

Gas

Gas is very important for our project because our production process needs steam. And

hydrogen gas. So we have planned to get commercial connection of gas from Sui northern gas

pipelines limited, main line of gas is 1.5 km away from the proposed site

Electricity

Machinery can not work without power, so power is like blood for project; we have planned to

get connection of power from MEPCO.

Water



Water is needed during the process we will get water through water pumps.

Disposal

Safe Disposal arrangement is very important for a project which has wastage contains

chemicals that can harm. We will dispose off after some treatment. We have site near cannel

so it is very easy to dispose off treated wastage.

Transportation

Our proposed site is just 0.25 km away from national high way which gives us opportunities to

use road ways for carriage, besides road ways we have railway junction just 5 km away from

site, Dera Nawab. So we will enjoy a best infrastructure here.



SWOT ANALYSISStrength:

Raw material is easily available

Access to customers

Well technology is used

Demand is very high

Profit earning is high

Weakness:

Recourses are going to be end

Security problem

Government restriction

Load shedding of sui gas & electricity

ThreatThe proposed project will be facing the following threat:

Market saturation over a longer period of time due to a large number of entrants Threat of increase in the import duty by the government

Gross Profit Ratio 39% 34% 33%

Operating Profit Ratio 39% 34% 33%

Net Profit Ratio 17% 15% 15%

Ratios 1 2 3 4Current Ratio 1.43 2.23 2.79 3.34Quick Ratio 1.24 1.95 2.50 3.03Debt Ratio 84% 58% 44% 35%



Total Assets Turnover 0 25% 25% 20%Return on Equity 52% 37% 30%Return on Assets 4% 4% 3%

Manufacturing Process



In our proposed project we will produce three elements

1. Cooking Oil

2. Vegetable Ghee

3. Laundry Soap

Process has following stages:

A) Decantation

Decantation is a process of unloading of unprocessed oil from carriage into decanting tanks.

We will have proposed a 50 ton decanting tank.

B) Oil Storage

The next step is storage. Oil from decanting tanks is transformed from decanting to storage

tanks with the help of powerful pumps. Two storage tanks of 500 tons capacity are needed.

C) Refining

The oil in refined to remove free from acids and phosphatides and the gaining material and to

improve its color. The oil is refined with strong Caustic Soda. This result in two products one

is the refined oil and the other is it’s by product namely mud which is being used for



manufacturing soap but the firm sells the mud it does not manufacture soap. We will produce

soap.

After Refining Process is divided in to three independent processes

OIL REFINING PLANT

MANUFACTURING PROCESS OF COOKING OIL

1. Bleaching

In this step we decolorize the oil by using Fuller Earth, Caustic Soda and Activated Carbon at

high temperature.

2. Filtration

In this step we remove impurities (Fuller Earth) from oil through filtration medium. All

impurities that become part of oil in Bleaching process are removed in this step.



3. Deodorization

It is a process of purify the oil. Its odor is removed by using vacuum vessels. All those

impurities that are reason of odor in oil are removed in this section. The temperature of oil is

very much increase in this process.

4. Cooling

In the Deodorization Process temperature of oil much rises so it needs to cool again. In

Cooling Section oil is cooled to normal temperature by using coolers.

5. Filtration

To remove the impurities, oil is re filter through filtration process.

6. DE-Waxing

It is a complex process that is used to remove Wax from oil. It is necessary to remove wax for

further processing. For this purpose some organic compounds are used in chemical reaction.

These reaction are much complex in nature. Samples are taken and laboratory tests are applied.

7. Filtration & Vitamin Addition

De-waxed oil is passed through further filtration. Move over some essential Vitamins (A&D)

are added in this section. Nickel catalyst (Ni) is used in this process.



8. Storage

After final filtration and Vitamins addition oil is stored in storage tanks. In these tanks oil is

store at moderate temperature.

9. Packing

In packing section oil is packed in deferent weights plastic bags. These bags properly sealed

and again weigh before forward to store rooms.

10. Godown

After packing oil bags are forward to Godown. Ammonia section is there to control

temperature of Godown.

MANUFACTURING PROCESS OF VEGETABLE GHEE

1. Bleaching

In this step we decolorize the oil by using Fuller Earth, Caustic Soda and Activated Carbon at

high temperature.

2. Filtration

In this step we remove impurities (Fuller Earth) from oil through filtration medium. All

impurities that become part of oil in Bleaching process are removed in this step.

3. Hydrogenation

Hydrogenation is process of addition of hydrogen gas in oil. It is a complex organic process in

which unsaturated hydrocarbon are convert into saturated hydrocarbons. It is main process of

converting oil into ghee. At high temperature hydrogen gas is passed into the oil, chemical

reaction occurs in presence of Nickel (Ni) catalysts.

4. Filtration



In this step we remove impurities (Fuller Earth) from ghee through filtration medium. All

impurities that become part of oil in Bleaching process and Hydrogenation process are

removed in this step.

5. post Refining

After hydrogenation oil is once again refined by using caustic soda in order to remove the

entire harmful chemicals that become part of oil during process.

6. Post Bleaching

After refining, once again bleaching is done in order to decrease the color of oil.

7. Filtration

To remove the impurities, ghee is re filter through filtration medium.

8. Deodorization

It is a process of purify the ghee. Its odor is removed by using vacuum vessels. All those

impurities that are reason of odor in ghee are removed in this section. The temperature of ghee

is very much increase in this process.

9. Cooling

In the Deodorization Process temperature of ghee much rises so it needs to cool again. In

Cooling Section ghee is cool down by using coolers.

10. Filtration & Vitamin Addition

For further filtration ghee must re heated. Move over some essential Vitamins (A&D) and

ghee flavors are added in this section.

11. Storage

After final filtration and Vitamins addition ghee is stored in storage tanks. In these tanks ghee

is store at high temperature.

12. Packing



In packing section ghee is packed in deferent weights plastic bags. These bags properly sealed

and again weigh before forward to store rooms. 0.5kg, 1kg, 2kg, 2.5kh, 5kg, 10kg, 16kg

packing is available. Plastic bags and steel teens are used for packing.

13. Chilling

Packed ghee is in melted form and hot. It is passed through chiller to decrease its temperature.

14. Godown

After packing ghee bags and teen packs are forward to Godown. Ammonia section is there to

control temperature of Godown.

MANUFACTURING PROCESS OF LAUNDRY SOAP

1. Soap Stock

In the process of refining, dirt is separated and sent to soap section for making laundry soap.

2. Saopnification Cooking

This is process of making soap from soap stock. Soap stock is heated and treated by using

some techniques.

3. Setting

Liquid is treated and soap in liquid form is made

4. Filling in Frames

Liquid is filled in frames to makes blocks of soap

5. Cutting into Cakes

Solid soap blocks are divided in small cubes.

6. Packing

Soap is packed in packets and cartons

7. Godown

Finished soap is sent to Godown and from Godown it is delivered to market.



GHEE COOKING OIL SOAP


DECANTATION

OIL STORAGE

REFINING

Bleaching

Filtration

Hydrogenation

Filtration

Post Refining

Post Bleaching

Deodorization

Bleaching

Filtration

Cooling

Filtration

De- Waxing

Soap Stock

Saopnification Cooking

Setting

Filling in Frames

Cutting into cakes

Packing



Filtration

Deodorization

Cooling

Filtration & Vitamin Add.

Storage

Packing

Filtration & Vitamin Add.

Storage

Packing

Godown

Dispatch

Godown

Dispatch


‘

ECONOMIC ANALYSIS

Economic evaluation is considered prominent yardstick to measure the viability of a project.

This analysis is directed towards determining whether the project is likely to contribute

significantly to the development of the economy as a whole and the contribution of the project

would be great enough to justify the use of available resources. This aspect is reviewed under

the following:-

INITIAL IMPACT

In order to pursue a theory of balanced growth of the economy the current government is

putting an emphasis on industrialization of our inherently agrarian economy. Industrialization

of substantial dynamic benefits is important for changing the traditional structure of our less

developed economy, while providing employment for a rapidly increasing labor force, and

saving scarce foreign exchange by import substitution and creating export potentials.

A capital expenditure creates incomes for people engaged in the fabrication of capital goods,

who in turns spend their incomes on consumer goods. An initial original capital investment

creates a wave of income and spending which has multiplied effect on the national income,

increasing it by several times, the original investment. The initial original capital investment of

Rs. (000) 1,117,693.25 in local currencies would have a healthy impact on the GNP of the

country, the extent of which depends on the degree of multiplied effect.



EMPLOYMENT OPPORTUNITIES

The project would create employment opportunities for the following staff:

Detail Total Nos.

Skilled Labor 21

Semi-Skilled Labor 24

Unskilled Labor 32

Administrative Staff 25



NAIMAT OIL AND GHEE MILLS PVT. LTD.

Estimated Cost of the Land

Sr. no. Description

Area in Acers

Unit Cost Rs.

Total cost Rs. (000)

1 Land 5 2,000,000 10,000

2Registration and Legal Requirements 10% 5 1,000

3 Stamp Duty 2% 5 200

4 District Council Fee 1% 5 100

5 Development Charges of land 15% 5 1,500

Total Cost of Land 12,800



NAIMAT OIL & GHEE MILLS PVT LTD

Estimated Cost of Plant & Machinery

S.NO. DESCRIPTION Rs.

(000)

1 STORAGE SECTION 13,550

2 PRE-REFINING SECTION 6,110

3 HYDROGENATION SECTION 8,690

4 POST-REFINING SECTION 9,805

5 GHEE FILLING SECTION 8,650

6 REFRIGERATION SECTION 4,500

7 STEAM GENERATION 5,650

8 SOAP SECTION 1,595

9 WATER PUMP SECTION 1,150

10 HYDROGEN GAS GENERATION & STORAGE SECTION 9,950

11 CO2 GAS SECTION 2,800

12 ELECTRIC SECTION 10,700

13 MACHANICAL WORKSHOP 900

COST OF MACHINERY 84,050

14 ERECTION & INSTALLATION:15 % of machinery 15% 12,608

15 TRANSPORTATION (10% of Machinery) 10% 8,405

16 INSURANCE (5% of Machinery) 5% 4,203

17 Contingencies 2% of Building & Machinery 2% 1,681

TOTAL COST OF PLANT & MACHINERY 194,996



Estimated Cost of the Building and Civil Works

Sr. No.

Description Type of Buildin

g

Unit of Construction

Covered Area

Rate per Unit

Amount Rs.(000)

1 Refinery RCC Square Feet 7,500 700 5,250

2 Filling Section RCC Square Feet 11,000 700 7,700

3 Cold Room RCC Square Feet 12,000 675 8,100

4Pouch Filling RCC Square Feet 1,600 675 1,080

5 Electric Room RCC Square Feet 1,500 675 1,012.5

6 HQ Compressor RCC Square Feet 1000 675 675

7Ammonia Condenser

RCC Square Feet 900 675 607.5

8 Ammonia RCC Square Feet 900 675 607.5

9 Godown RCC Square Feet 4,500 650 2,925

10 Gas Plant RCC Square Feet 700 650 455

11 Mosque RCC Square Feet 450 700 315

12 Store RCC Square Feet 1200 700 840

13 Boiler Section RCC Square Feet 3,000 675 2,025

14 Soap Section RCC Square Feet 6,000 700 4,200

15Boundary Wall & Gate

Runing Feet 3,000 400 1200

16 Office Block RCC Square Feet 12,000 750 9,000

17Residential Quarters

RCC Square Feet 13,000 750 9,750

18 Guest Rooms RCC Square Feet 2,000 750 1,500

19 Uncovered Area Square Feet 132,000 25 3,300

20Contingency (2%)

2% 1,210.85

TOTAL COST 61,753.35


NAIMAT OIL AND GHEE MILLS PVT. LTD.Estimated Cost of the Project

Cost of the Project Local Foreign Total (Rs.000) (Rs.000) (Rs.000)

Project Land and it's Development 12,800 - 12,800 Building and Civil Works 61,753.35 - 61,753.35 Plant & Machinery 58,499 136,497 194,996 Furniture and Fixture 100 - 100 Utilities & Office Equipment 3,000 - 3,000 Vehicles 1,500 - 1,500 Markup during Construction 51,192 - 51,192 Pre Production Expenses 1,780 - 1,780 Contigencies 481 - 481

Total Fixed Cost 191,105 136,497.20 327,602

Initial Net Working Capital 790,091.18 - 790,091.18

Total Cost of the Project 981,196 136,497.20 1,117,693

Means of Finance

Debt

Loan from MCB 670,615.95 0 670,615.95

Total Debt 670,615.95 0 670,615.95

Equity Paid up Capital (Sponsors 447,077.30 0 447,077.30

Total Equity 447,077.30 0 447,077.30

Total Debt and Equity 1,117,693.25 - 1,117,693.25

Debt : Equity Ratio

Sponsors stake 40%

Debt 60%

Estimated Initial Net Working Capital



Currnet Assets

RS.(000)

Cash 12000

Account Receivable 3 % of Sales 86052.375

Imported raw material 1200000

Raw Material 763083.5

Stores and Spares 5000

Advances and deposits 6000

Finished Goods Inventory 10% of production 318712.5

Total 2390848

Current Liabilities

Account Payable 0

Accrued Expenses 0

Bank Borrowing 75% of inventory 1600757

Total current liabilities 1600757

Initial Net Working Capital 790091

Total 2390848


PRE OPERATING EXPENSES

Sr. No. Description Rs. ("000")

1 Registration Charges 500

2 Sales Tax Registration Charges 120

3 Consultancy & Report Preparation Charges 100

4 Printing & Stationary 30

5 Conveyance Charges 100

6 Telephone & Postage 30

7 Salaries and Wages during Construction 900

Total Pre Operating Expenses 1,780



NAIMAT OIL AND GHEE MILLS PVT. LTD.PRODUCTION AT 100%

COOKING OIL

Output% Quantiy (Tons)Production of oil 97%

16975Wastage 1%

175Soap Stock dirt 2%

350

Total 100 17500

VEGETABLE GHEE

Ghee 95%30400

Wastage 5%1600

Soap Stock dirt 3%960

Total 100 32000

LAUNDY SOAP

Soap 75%1050

Wastage 25%350

Total 100

1400



NAIMAT OIL AND GHEE MILLS PVT. LTD.COST OF PRODUCTION

Raw Materials Requirement at100%

Cooking OilCanola Oil (Tons) 17,500 Caustic Soda (Kg) 102,000 Fuller Earth (Kg) 204,000 Common Salt (Kg) 26,000 Antioxidant (Kg) 3,400 Raw Material Purchase

Years. 2011 2012 2013Capacity utilization 50% 60% 70%QUANTITIES SCHEDULE Canola Oil (Tons) 8,750 1,0500 1,2250Caustic Soda (Kg) 51,000 61,200 7,1400Fuller Earth (Kg) 102,000 122,400 142,800Common Salt (Kg) 13,000 15,600 18,200Antioxidant (Kg) 1,700 2,040 2,380COST OF RAW MATERIAL RS(000) RS(000) RS(000)Canola Oil per ton @RS. 86,000 752,500 903,000 1,053,500Caustic Soda per Kg. @Rs. 25 1,275 1,530 1,785Fuller Earth per Kg. @ Rs. 30 3,060 3,672 4,284Common Salt per Kg. @ Rs. 3 39 46.8 54.6Antioxidant per Kg. @Rs. 160 272 326.4 380.8

TOATL 757,146 908,575.2 106,0004.4

VEGETABLE GHEERaw Materials Requirement at100% Palm Olein Oil (Tons) 32,000 Caustic Soda (Kg) 75,000 Fuller Earth (Kg) 67,000 Common Salt (Kg) 50,000 Citric Acid (Kg) 7,000 Nickle Catalyst (Kg) 5,000

Years. 2011 2012 2013Capacity utilization 50% 60% 70%QUANTITIES SCHEDULE

Palm Olein Oil (Tons) 16,000 19,200 22,400Caustic Soda (Kg) 37,500 45,000 52,500Fuller Earth (Kg) 33,500 40,200 46,900Common Salt (Kg) 25,000 30,000 35,000Citric Acid (Kg) 3,500 4,200 4,900Nickle Catalyst (Kg) 2,500 3,000 3,500



COST OF RAW MATERIAL RS(000) RS(000) RS(000)Palm Olein Oil per Ton @Rs. 75,000 1,200,000 1,440,000 1,680,000Caustic Soda per Kg@ Rs. 25 937.5 1,125 1312.5Fuller Earth per Kg@ Rs. 30 1,005 1,206 1,407Common Salt per Kg@ Rs. 3 75 90 105Citric Acid per Kg @ Rs. 120 420 504 588Nickle Catalyst per Kg @Rs. 1400 3,500 4,200 4,900TOATL 1,205,937.5 1,447,125 1,688,312.5Total Cost of Raw Materials (Grand Total) 1,963,083.5 2,355,700.2 2,748,316.9 Imported Raw material 1,200,000 1,440,000 1,680,000Local Raw Material 763,083.5 915,700.2 1,068,316.9ASSUMPTIONS Production capacity per day 150 TONS Working schedule 3 shifts of 8 hours each working days in year 330 Bank Borrowing 70% of inventory 70%


Estimated Labor Cost

Year wise Wages of Labor RS.(000) RS.(000) RS.(000) Sr.No.

Description 2011 2012 2013 1 Production Labor 8,244 9,068 9,975

2 Add fringe benefits 3,298 3,627 3,990

TOTAL COST OF LABOUR

11,542 12,696 13,965

Labor Cost Sr.No. Production Labor No. of Salary/month/worker Annual Salary RS.



Employees (000)1 G.M Technical 1 50,000 600 2 Electrical Dept. - Forman 1 10,000 120 Electricians 6 6,000 432 3 Boiler Section - Boiler Engineer 1 25,000 300 Forman 3 10,000 360 Operator/Helper 9 6,000 648 4 Gas Plant - Forman 1 10,000 120 Operator/Helper 6 6,000 432 5 Mechanical Workshop - Forman 1 10,000 120 Fitter 3 6,000 216 Welder 1 8,000 96 Helper 3 6,000 216 6 Ghee Filling Section - Forman 1 10,000 120 Operator 3 8,000 288 Helper 3 6,000 216 7 Ammonia Section - Forman 1 10,000 120 Operator 3 8,000 288 Helper 3 6,000 216 8 Soap Section - Forman 1 10,000 120 Operator 2 8,000 192 Helper 2 6,000 144 9 Main Storage - Store In charge 1 10,000 120 Clerk 3 8,000 288

10 Laboratory - Chief Chemist 1 20,000 240 Shift Chemist 3 15,000 540 Lab.Attendent 3 6,000 216

11 Refinery Section - Supervisor 1 15,000 180 Forman 3 10,000 360 Operator 3 8,000 288 Helper 9 6,000 648



TOTAL EMPLOYEES 82 Total Cost Of Production Labor 8,244

Assumptions: Direct labor will increase every year @ 10%

FRINGE BENEFITS 40%


Manufacturing Overhead Cost

Description (Rs:000)

Fixed cost

Insurance @ 5% of Fixed assets 5% 16,380

Overhauling Expense @ 5% of Machinery 5% 9,750

Maintenance of Building @ 5% of Cost of Building 5% 3,088

Maintenance of Vehicles @ 5% of Cost of Vehicle 5% 75

Total Fixed Cost 29,293

Variable Manufacturing Expenses

Power:(450KV*24hrs*330days*Rs12) * 50% 21,384

Gas (at 50% capacity) 15,000

Total Variable Cost 36,384

Year ending Manufacturing Overheads as per Different Capacities

Rs(000)

Description 2011 2012 2013

50% 60% 70%

Fixed cost 29,293 29,293 29,293

Variable cost 36,384 40,022 44,025

Total Cost of Manufacturing Overheads 65,677 69,315 73,317

Capacity Increases yearly 10%




Year wise Administrative and General Expenses

Administrative Expenses RS.(000)

RS.(000)

RS.(000)

Sr. No. Designation No. of Employees

Salary/Month

2,011

2,012

2,013

1

GM Commercial 1 50,000 600

660

726

2

GM Accounts 1 50,000 600

660

726

3

Accountants 2 10,000 240

264

290

4

Clerks 10 8,000 960

1,056

1,162

5

Cashier 1 8,000 96

106

116

6

Assistants Cashier 2 6,000 144

158

174

7

Chowkidar/Gunman 6 6,000 432

475

523

8

Peon/Sweeper 2 6,000 144

158

174

Total 25 3,216

3,538

3,891

Add Fringe Benefits 0 1,286

1,415

1,557

Total 4,502

4,953

5,448

Assumption

Increase every year

0



General Expenses RS.(000) RS.(000) RS.(000) Sr.No Description

Per Month 2,011 2,012 2,013

1 Traveling Expenses 15,000 180 198 218

2 Printing & Stationary 20,000 240 264 290

3 Phone, Postage 15,000 180 198 218

4 Rent, Rate, & Taxes 100,000 1,200 1,320 1,452

5 Entertainment 10,000 120 132 145

6 Legal & Audit 200,000 2,400 2,640 2,904

7 Miscellaneous 10,000 120 132 145

Total 4,440 4,884 5,372

Add Fringe Benefits 0 1,776 1,954 2,149

Total 6,216 6,838 7,521

Assumption

Increase every year 0

Selling Expenses

Selling Expenses are assumed 2% of Sales Revenue 57,368 72,666 83,758

Sales

0

2,011 2,868,413

2,012 3,633,323

2,013 4,187,882




DEPRECIATION COST

Depreciation Schedule of Fixed Asset Rs. (000) Rs. (000)

Depreciable Cost

Rates

Depreciation

Plant & Machinery 194,996 15% 29,249

Building 61,753 5% 3,088

Furniture & Fixtures 100 5% 5

Vehicles 1,500 20% 300

TOTAL 32,642

Depreciation will be constant over the life of assets.

DEPRECIATION IS CALCULATED BY USING STRAIGHT LINE METHOD




Production capacity at100%

a) Cooking Oil 16,975 Tons

b) Vegetable Ghee 30,400 Tons

c) Laundry Soap 1,050 Tons

Working days p.a. 330

Capacity per day 150 Tons

No. of Shifts per day 3

SALES

Operating Years : 2,011 2,012 2,013

Production Efficiency Assumed : 60% 70% 80%

A. Cooking Oil 10,185 11,883 13,580

Add; Beginning inventory - 1,019 1,290

Available for Sale 10,185 12,901 14,870

Less: Ending inventory 10% 1,019 1,290 1,487

Quantity Sold 9,167 11,611 13,383

60% 70% 80%

B. Production of Vegetable Ghee 18,240 21,280 24,320

Add; Beginning inventory - 1,824 2,310

Available for Sale 18,240 23,104 26,630

Less: Ending inventory 10% 1,824 2,310 2,663

Quantity Sold 16,416 20,794 23,967

C. Laundry Soap 630 735 840

Add; Beginning inventory - 63 80

Add; Beginning inventory 630 798 920

Less: Ending inventory 10% 63 80 92

Quantity Sold 56

7 718 82

8

Sale Revenue Rupees (000)

Description Price/ Ton 60% 70% 80%



Cooking Oil 115 1,054,148 1,335,254 1,539,055

Vegetable Ghee 110 1,805,760 2,287,296 2,636,410

Laundry Soap 15 8,505 10,773 12,417

Total Sales (a+b+c) 2,868,413 3,633,323 4,187,882

Value of Ending Inventory Rs.(000)

a) Cooking Oil 117,128 148,362 171,006

b) Vegetable Ghee 200,640 254,144 292,934

c) Laundry Soap 945 1,197 1,380

Total Value of finished inventory 318,713 403,703 465,320

ACCOUNT RECEIVABLE % OF SALES 3% 86,052

Rs.(000)

2,011 2,012 2,013

60% 70% 80%

BEGINNING INVENTORY

a. Cooking Oil - 117,128 148,362

b. Vegetable Ghee - 200,640 254,144

c. Laundry Soap - 945 1,197

TOTAL - 318,713 403,703

ENDING INVENTORY

a. Cooking Oil 117,128 148,362 171,006

b. Vegetable Ghee 200,640 254,144 292,934

c. Laundry Soap 945 1,197 1,380

TOTAL 318,713 403,703 465,320

GRAND TOTAL 318,713 722,415 869,023




LOAN REPAYMENT SCHEDULE

Rs.(000)

Amount of Loan

670,616

Mark up rate 16%

Installment p.a 10

Years Opening Balance Interest Principle PMT Closing Balance

1 670,616 107,299 67,062 174,360 603,554

2 603,554 96,569 67,062 163,630 536,493

3 536,493 85,839 67,062 152,900 469,431

4 469,431 75,109 67,062 142,171 402,370

5 402,370 64,379 67,062 131,441 335,308

6 335,308 53,649 67,062 120,711 268,246

7 268,246 42,919 67,062 109,981 201,185

8 201,185 32,190 67,062 99,251 134,123

9 134,123 21,460 67,062 88,521 67,062

10 67,062 10,730 67,062 77,791 -

Markup during Construction 53,649



NAIMAT OIL AND GHEE MILLS PVT LTDEstimated Income Statement

Rs.(000)Years ending September 30 : 2011 2012 2013 50% 60% 70%Sales 2,868,413 3,633,323 4,187,882 Les: COST OF SALES Raw Material 1,963,084 2,355,700 2,748,317 Labor 11,542 12,696 13,965 Manufacturing Overheads 65,677 69,315 73,317 Depreciation 32,642 32,642 32,642 Total Cost of Goods Manufactured 2,072,944 2,470,353 2,868,242 Add: Beginning Inventory - 318,713 403,703 Less: Ending Inventory 10% 318,713 403,703 465,320 Cost of Sales 1,754,231 2,385,363 2,806,624 Gross Profit 1,114,181 1,247,960 1,381,258 OPERATING EXPENSES: Administrative Expenses 4,502 4,953 5,448 General Expenses 6,216 6,838 7,521 Seling Expenses 57,368 72,666 83,758 Total Operating Expenses 68,087 84,457 96,727 Operating Profit 1,046,095 1,163,503 1,284,532 OTHER EXPENSES: Financial Charges on: Long Term Loan 174,360 163,630 152,900 Amortization of Pre-Production Expenses 356 356 356 Total Other Expenses 174,716 163,986 153,256 Profit Before Tax and Worker's Fund 871,378 999,517 1,131,275 Worker's Fund 60,996 69,966 79,189 Profit/(Loss) Before Tax 810,382 929,550 1,052,086 Tax Provisions @ 40% 324,153 371,820 420,834 Net Profit 486,229 557,730 631,252 Dividend - - - Retained Earning 486,229 557,730 631,252 Ratios: Gross Profit Ratio 39% 34% 33%



Operating Profit Ratio 39% 34% 33%Net Profit Ratio 17% 15% 15%

ASSUMPTIONS Rs.(000) Preliminery Expenses Amortized in 5 years 1780 Workers funds

Profit Participation : 5%

Welfare : 2% TOTAL 7%ACCOUNTS RECEIVABLE OF SALES 10%

ACCURED EXPENSES OF SALES 5%

ACCOUNTS PAYABLES OF MATERIAL CONSUMED 10% Tax provision 40%



NAIMAT OIL AND GHEE MILLS PVT LTDBalance Sheet

End of Construction

Operating Years 2011 2012 2013ASSETS: CURRENT ASSETS: Cash and Bank Balance 12000 122769 2141577 4133803Short Term Investment 0 0 0 0Accounts Receivable 86052 286841 363332 418788Raw Material Inventory 1963084 1963084 1963084 1963084other assets 0 0 0 0Inventory of Finished Goods: Cooking Oil 117128 117128 148362 171006Vegetable Ghee 200640 200640 254144 292934Laundry Soap 945 945 1197 1380Advances, Deposits and Prepayments 6000 12000 24000 48000Stores & Spares 5000 5250 5512.5 5788.125Total Current Assets 2390848 2708657 4901208 7034783 FIXED ASSETS: Fixed Assets at Cost 325822 325822 325822 325822Accumulated Depreciation on Fixed Assets 0 32642 32642 32642

Fixed Assets Net 325822 293180 293180 293180

Preliminery Expenses 1780 1424 1068 712

Total Assets 2,718,450 3,003,261 5,195,456 7,328,675 LIABILITIES AND EQUITY: CURRENT LIABILITIES: Bank Borrowings 1600757 423888 536924 618876Acconts Payable 0 196308 144713 168831Accrued Expenses 0 143421 181666 209394Provision for Taxes 0 324153 709810 815156Dividend Payable 0 0 0 0Worker's Fund Payable 0 60996 133566 153390Current Maturity of Log Term Debt 67,062 67062 67062 67062Total Current Liabilities 1,667,819 1215827 1773741 2032708 LONG TERM DEBTS: Long Term Debt 603,554 536,493 469,431 402,370 Total long Term Debt 603,554 536,493 469,431 402,370 EQUITY: Paid-Up-capital 447,077 447,077 447,077 447,077 Retained Earnings - 486229 1550944 2773678Reserves for contigencies 317634 954262 1672841Total Equity 447,077 933,306 1,998,022 3,220,756



Total Liabilities and Equity 2,718,450 3,003,261 5,195,456 7,328,675


Cash Flow Statement

End ofConstruction

Operating Years

years ending 30th DECEMBER2011 2012 2013

SOURCES OF FUNDS:

Operating Profits 0 1,046,095 2,072,078

2,344,536

Amortization of preliminiry Expenses 0 356 356 356

Depreciation 0 32,642 32,642 32,642

Total Funds from Operation 0 1,079,093 2,105,076

2,377,534

Other Sources:

Long Term Loan 603,554 0 0 0

Bank Borrowings 1,600,757 423888 536924 618876

Paid-Up Capital 447,077 0 0 0

Increase in Liabilities - -451991 557914 258967

Total Sources of Funds 2,651,389 1,050,989 3,199,914

3,255,377

APPLICATION OF FUNDS:

Investment in Fixed Assets 325,822 - - -

Financial Charges 51,192 107,299 96,569 85,839

Pre-Production Expenses 1,780 356 356 356

Repayment of:

Long Term Loan 67,062 67,062 67,062 67,062

Bank Borrowings

PAYMENT OF:

Taxes - 324,153 709,810 815,156

Dividends - - - -

Worker's Fund - 60,996 133,566 153,390

Short Term Investment - - - -

Increase in Current Assets (Other than Cash) 2,378,848 195,039 173,744 141,349

Total Application of Funds 2,824,704 754,904 1,181,106

1,263,151

Cash Surplus/(Deficit) (173,315) 296,085 2,018,808

1,992,226

Cash at the Beginning of the Year - (173,315) 122,769

2,141,577

Cash at the end of the year (173,315) 122,769 2,141,577

4,133,803




Weighted Average cost of Capital

Nature Of Fund Amounts Interest Rate weight WACC

Long term Loan 670,616 0.14 0.60 56332

Paid up Capital 447,077 0.30 0.40 53649

1,117,693 100.00 109981

Weighted Cost of capital 9.84%

Calculation of IRR

Years Net Profit DepriciationAmortization Out/ Inflow of cash

0 (1,117,693)

1 486,229 32,642 356 519,227

2 557,730 32,642 356 590,728

3 631,252 32,642 356 664,250

IRR 26%

Pay back period

Total inflow 1,774,205

Outflow 1,117,693

pay back period 1.59

7.08

2.4



Pay back period

1 year 7 months and 3 days

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