Project management repoty MBA

8/10/2019 Project management repoty MBA

1/13

Bailur Milk Depot

Kousali Institute of Management Studies Page 1

What is a Project?

Series of actions to achieve a result

Single occurrencea unique, non-repetitive assignment

Time limitationswith a pre-defined date of delivery

Clear purposespecified from one or more goals (well defined, measurable and realistic), do not

mix project goals and effect goals

Unpredictable structure it consists of a number of complex activities with mutual

interdependencies

Own organisatione.g. Not in the original line of work

Procurerinternal or external acquirer that has expectations on the result.

Introduction to the industry:

Karnataka Milk Federation (KMF) sells products by the name of Nandini. They are famous for

taste and quality. Nandini sweets like pedha, jalebi, paneer, curds and milk are savored by

thousands of people in India. As the name suggests it is the federation of milk producers

association working on cooperative principles. Almost every district in state of Karnataka hasmilk producing co-operatives. The milk is collected from farmers who are its members,

processed and sold in the market by the brand of Nandini. It is the second largest milk co-

operative in India after AMUL.

KMF has 13 Milk Unions throughout the State which procure milk from Primary Dairy

Cooperative Societies (DCS) and distribute milk to the consumers in various urban and rural

markets in Karnataka State.

Managing Director: Dr. M.N.Venkataramu

Chairman: G. Somashekara Reddy


2/13

Bailur Milk Depot


BASIC INFORMATION:

Type of Business: Dealership for milk and milk products and local supply

Location for Business: Congress Road, Belgaum590006

Area of coverage: Channamma Nagar, Congress road, Maratha colony, Bhagyanagar and

Shahapur

Form of Organisation: Sole Proprietary

Name of Promoter: Mr. Prashant Bailur

Background of promoter:

Name: Prashant Bailur

Address: H.No. 2545/B

Meerapurgalli, shahapur,

Belgaum: 590003

Qualification: B.Com, MBA

Age: 24 Years

Experience: 3 Years

Products: Milk and milk products

Cost of the Project: 4,29,000

Financing Pattern:

The amount of 2.29L will be invested as equity money the remaining is of loan from the bank

Sources of Finance: Loan from the Bank

Life cycle: Minimum of 20 years and maximum of no limit

Implementation:1stApril 2014


3/13

Bailur Milk Depot


Objective:The main objective of this project is to maximize the profit and also to give the best

service to all the customers.

Assumptions:

TheWorking shift is of 4 hours a day and 365 days in a year

The rate of interest on total Term loan is taken as14%

The unit is located with ownedpremise

For this firm working capital includes all expenses

The firm has no tax

Payment of 50,000 to local vendor for transferring 210 customers

The amount including service charge will be accepted in the 1

st day of every

month.

The sales will increase at 5% on the total price

The salary will increase at 10% for 2styear and 15% there after

The service charges will rise at 10% every year

Petrol expenses will increase by 5% every year

Rate of depreciation is 10% at straight line method

Change the price of milk also leads to increase the margin hence it has taken with the

constant price


4/13

Bailur Milk Depot


Marketing Analysis

Market Potential

India is one of the leadings exporters of milk . India i s second l arges t

p ro d u ce r o f mi l k i n t he w or l d . I t h as co n t r i b u t i n g 1 3 3 m i l l i o n t o n s l i t e r s

o f m i l k . I n d i a i s a n a g r i c u l t u r e b a s e d c o u n t r y w h e r e i n t h e d e m a n d f o r t h e

p ro d u c t l i k e mi l k a nd o t h e r mi l k p r o d u c t s i s v e r y h i g h . S u s t a i n ab i l i t y i s

v e r y e a s y i n t h e b u s i n e s s o f m i l k .

Marketing Strategy:

Purchase of a customers from existing agent and supplier by paying some consideration.

The marketing will be done by taking individual attention once the business gets started.

ProductsApplications:

The milk and milk products are having an intense demand in the country. Likewise the

places like Karnataka also gained a lot of importance. The state Maharashtra is one of the

leading state to produce milk. The various products available with us:

Milk Butter milk

Curd Flavored milk

Butter Ghee

Lassi Basunde etc.

Business Objectives

The business objective is to increase the volume of sales at least 10% in every year and provide

a quality service to every customers.

1. Consumer satisfaction:

Consumer here refers to the customer to whom this products will be supplied for future

processing and making ready for final consumption.


5/13

Bailur Milk Depot


2. Profit earning:

The second objective is to earn profit through satisfying the customer as business cannot

survive without earning profit.

3.

Performing Social responsibility:

Performing the social responsibilities of business enterprise is also one of the basic

moral responsibilities. Social responsibility will be fulfilled by giving employment

opportunities, providing good quality product at reasonable rate.

Financial Analysis

Capital Investment:

S.No Description Amount Rs.

1 Fixed Capital 379000

2 Working Capital 311438

Total Project Cost 690438

Details of proposed project:

Capital investment includes physical assets like:

Building

Computer

Vehicles

Furniture

Refrigerator

Cooler


6/13

Bailur Milk Depot


Investment in fixed assets

Consumption and payment to supplies per annum(Material)

Sl.No Items Sales Litres/Packets/Kgs Rate Amount Rs.

1 Full cream milk 160 36 2102400

2 Standard milk 40 34.5 503700

3 Toned milk 80 30.5 890600

4 Curd 20 7.5 54750

5 Lassi 10 6.8 6800

6 Butter milk 5 4.75 2138

7 Ghee3 282 10152

8 Butter 5 280 16800

9 Basunde 10 340 3400

Total 3590740

Sl.No Description Qty. Rate Amount Rs.

1 Building (20*30) 300000

2 Vehicles (cycles) 3 3000 9000

3 Furniture 1 25000 25000

4 Refrigerator 1 19000 19000

5 Cooler 1 7000 7000

6 Computer 1 19000 19000

Total 3,79,000


7/13

Bailur Milk Depot


Calculation of sales

Sale of milk 280 liters per day (+/-10)

Particulars Total sale per day Rate per litresValue per

Annum

Full cream milk 160 litres Rs. 38 2219200

Standard milk 40 litres Rs. 36 525600

Toned milk 80 litres Rs. 32 934400

Curd 20 packets Rs. 10 73000

Lassi 10 packets Rs. 10 10000

Butter milk 5 packets Rs. 6 2700

Ghee 3 litres(a month) Rs. 314 11304

Butter 5 kgs (per month) Rs. 300 18000

Basunde 10 Packets Per year Rs. 380 3800

Service charge (210*40) 100800

Total 38,98,804

Note:

Total customers 210 and total 230 litres of door delivery rest are spot sales

Note:

Lassi will be sold in the seasons and for only 100 days

Butter milk will be sold for only 90 days(3 months)

Salaries (per month)

Sl.No Description Nos. Sal/mon. Amount Rs.

1 Supervisor 1 6000 6000

2 Unskilled workers 3 1050 3150

Total 9150


8/13

Bailur Milk Depot


Note: No need for skilled workers in supply of milk

Other Expenses (per month)

Sl.No Description Amount Rs.

1 Petrol Expenses 1500

2 Advertisement Expenses 100

3 Miscellaneous Expenses 800

4 Power 340

5 Water 90

6 Cable 230

Total 3060

Total Working Capital (per month)

S.NoAmount

Rs.

1 Salaries 9150

2 Payment towards supply 299228

3 Other Expenses 3060

Total 311438


9/13

Bailur Milk Depot


Projected expenditure of 5 years

Expenses: 1st Year2nd

Year

3rd

Year4th Year 5th Year

Salaries 109800 120780 126270 138897 145210.5

Payment towards supply 3590739 3770276 3958790 4156729 4364566

Petrol Expenses 18000 18900 19845 20837 21879

Advertisement Expenses 1200 1200 1200 1200 1200

Interest on Loan

(200000*0.14) 28000 23764 18935 13429 7162

Miscellaneous Expenses 9600 9600 9600 9600 9600

Power 4080 4080 4080 4080 4080

Water 1080 1080 1080 1080 1080

Cable 2760 2760 2760 2760 2760

Total 3765259 3952440 4142559 4348613 4557537


10/13

Bailur Milk Depot


Projected Income Statement for 5 years:

PARTICULARS AMOUNT

1st Year 2nd Year 3rd Year 4th Year 5th Year

Sales Revenue 3898804 4098784 4309267 4530829 4764079

Less: Expenses 3765259 3956676 4151625 4363183 4578375

EBDIT 133545 142108 157643 167646 185704

Less: Interest on Bank Loan 28000 23764 18935 13429 7162

EBDT 105545 118344 138708 154216 178542

Less: Depreciation 37900 37900 37900 37900 37900

PBT 67645 80444 100808 116316 140642

Less: Tax 0 0 0 0 0

PAT 67645 80444 100808 116316 140642

Add: Depreciation 37900 37900 37900 37900 37900

CFAT 105545 118344 138708 154216 178542

Add: WC requirements 174520 182164 183770 191884 192972

Total CFAT 280065 300508 322478 346100 371514

Estimated Sales for 5 years:

Income 1st Year 2nd Year3rd

Year4th Year 5th Year

Sale of milk & its products 3798004 3987904 4187299 4396664 4616498

Service Charge 100800 110880 121968 134165 147581.28

3898804 4098784 4309267 4530829 4764079


11/13

Bailur Milk Depot


Calculation of Depreciation on Straight Line Method

Depreciation = (Cost of Asset-Salvage Value)/Life of the Asset

S.No Description Qty. Rate Amount Rs. Depreciation

1 Building (20*30) 300000 30000

2 Vehicles (cycles) 3 3000 9000 900

3 Furniture 1 25000 25000 2500

4 Refrigerator 1 19000 19000 1900

5 Cooler 1 7000 7000 700

6 Computer 1 19000 19000 1900

Total 3,79,000 37900

Balance sheet for 5 years

Assets 1st Year 2nd Year 3rd Year 4th Year 5th Year

Fixed Assets

Building 300000 270000 243000 218700 196830

Vehicles (cycles) 9000 8100 7290 6561 5905

Furniture 25000 22500 20250 18225 16403

Refrigerator 19000 17100 15390 13851 12466

Cooler 7000 6300 5670 5103 4593

Computer 19000 17100 15390 13851 12466

Total 379000 341100 306990 276291 248662

less: Depreciation 37900 37900 37900 37900 37900

Net Value 341100 303200 269090 238391 210761.9

Closing balance of cash 97287 157373 237823 333782 454065

Total 438387 460573 506913 572173 664827

Liabilities 1st Year 2nd Year 3rd Year 4th Year 5th YearOwn Capital 229000 229000 229000 229000 229000

Bank Loan 169742 135248 95925 51096 0

PAT 67645 80444.37 100807.9593 116316.254 140641.5704

Total 466387 444692 425733 396412 369642


12/13

Bailur Milk Depot


Cash flow statement

PARTICULARSImplementatio

n Period1st Year 2nd Year 3rd Year 4th Year 5th Year

Sources Of Cash

Own Capital 229000 0 0 0 0 0

Term Loan 200000

PAT 0 67645 80444 100808 116316 140642

Depreciation 0 37900 37900 37900 37900 37900

TOTAL (A) 429000 105545 118344 138708 154216 178542

PARTICULARSImplementatio

n PeriodYear 1 Year 2 Year 3 Year 4 Year 5

Uses Of Cash

Fixed Assets 379000 0 0 0 0 0

Repayment of

loan 30258 34494.12

39323.296

8

44828.5583

5 51096Interest on term

loan0

28000 23764 18935 13429 7162

Tax paid 0 0 0 0 0 0

TOTAL (B) 379000 58258 58258 58258 58258 58258

Opening Balance 0 50000 97287 157373.37237823.329

3

333781.583

3

(A-B) 50000 47287 60086.3780449.959

3

95958.2539

8120284

Closing Balance 50000 97287 157373 237823 333782 454065


13/13

Bailur Milk Depot


Bank Loan Repayment Schedule:

Principal Amount = 200000

Rate of Interest = 14% per annum

Loan Period = 5 years

Calculation of EAI = Loan Amount / PVAF @ 14%, 5 years 58258

Year Installment InterestPrincipal

Repayment

Outstanding

Amount

0 0 0 0 200000

1 58258 28000 30258 169742

2 58258 23764 34494 135248

3 58258 18935 39323 95925

4 58258 13429 44829 510965 58258 7162 51096 0

Project management repoty MBA

Documents

Transcript of Project management repoty MBA