Template Project PDF

Jammu and Kashmir Entrepreneurship Development Institute (JKEDI),
Seed Capital Fund Scheme (SCFS)
DETAILED PROJECT REPORT

On
TECHNo-ECONOMIC FEASIBILITY
OF
M/S.Model DPR
S/O: D/O: W/O: Parentage:
UNDER
seed capital fund scheme
(scfs)
Legal Status: Sole propreitership
Activity: Dairy Farming
Sector: Agri-Allied
Name of the Entreprenuer: Mr/Ms. AH Jammu

Name of Father /Spouse: Mr/Ms. Dr.Shafat Kakroo
Residential address: Talab Tillo

Unit Address: Talab Tillo
District: Jammu
Tehsil: Jammu
Constituency: Jammu
Qualification: Graduate
Cell.No: 0
Date: Jan,2017
Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

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Jammu and Kashmir Entreprenuership Development Institute
PROJECT PROFILE
1 Name Of Unit: M/S. Model DPR
2 Name of the Entreprenuer: Mr./Ms. AH Jammu
3 Name of Father /Spouse Mr./Ms. Dr.Shafat Kakroo
4 Residence: Talab Tillo
5 Unit Address : Talab Tillo

District : Jammu
Tehsil: Jammu
Constituency: Jammu
Cell:
6 Legal Status: Sole Propreitorship
7 Activity: Dairy Farming
8 Sector: Agri-Allied
9 Total Cost of Project :

S.No. Particulars Percentage Amount
A. Fixed Capital Investment 93% 766,742
B. Working Capital 7% 57,258
Total 100% 824,000
10 Means of Financing:
Particulars Percentage Amount
Bank Finance 65% 535,600
Seed Capital 288,400
35%
Promoters Contribution 0
Total 824,000
11 Unit Size (No. of Bovines): 6
13 Moratorium Period: 6 Months
14 Break Even Point: 44.76%
15 Projected Sales : 1,265,019
16 Debt Service Coverage Ratio: 3

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Financial Structure
The Total Project Cost for the proposed venture is estimated at 824,000
Investment Plan
S.No. Particulars %age Amounts
A Fixed Investments 93% 766,742
i Land for Growing Fodder Avg.2 Kanal/Animal Rent
ii Civil Works 240000
iii Livestock 480000
iv Plant & Machinery 12000.00
v Preliminary Expenses 34742.00
B Working Capital Requirement 7% 57,257.5
Total Project Cost (A+B) 824,000
The amount if needed to make 35% Margin money, for availing Bank Finance of 65% of Total Project Cost
may be contributed by Entreprenuer himself,the said venture has funding pattern as:
S.No Particulars Percentage Amount (Rs.)

1 Seed Capital 288,400
35%
2 Promoters Contributers 0
3 Bank Finance 65% 535,600
Total 100% 824,000
Likewise,the project will be financed under two accounts viz.
Term Loan A/c For Fixed Capital Investment
Cash Credit A/c for Working Capital Investment
S.No Financing Pattern
A Long Term Investment Amount (Lkhs)
i. Margin 268,359.70
ii. Term Loan 498,382.30
Total (A) 766,742
B Working Cap Finance Amount (Lkhs)

i. Margin 20,040.13
ii. Cash Credit A/c 37,217.38
Total (B) 57,257.50
Total Project Cost (A+B) 824,000

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Background of Entreprenuer & Project

M/S.Model DPR Is a sole propreitorship concern of Mr./Ms.AH Jammu
S,D/o Mr./Ms.Dr.Shafat Kakroo R/o Talab Tillo
The promoter is a young person with all necessary qualifications, enthusiasm and energy to excel. The
opportunity for this venture exists for two reasons:
1. Growing Demand.
2. There are few providers of Pure Milk and Milk Products in the Catchment Areas.
There is rapid growth in the market and increasing demand. In addition, more niche markets are evolving.
Initially, it will be difficult to compete with experienced providers, especially the market leaders. However,
the units target market is an exploitable niche. The ventures target market members will have similar
activity interests, more disposable income and less sensitivity to price.Product will be priced based upon
Market prices and the value added of offering.
The unit is proposed to be located at on Owned/Rented land. Where all the basic infrastructural facilities viz:
Water connection, Power connection road connectivity is available as per the requirement. The proposed
project as such would not face any difficulty for its smooth operation. The requirement of land for the
project has been worked out on the basis of covered area for civil works, marginal area for future expansion.
The Subsidy amount under Seed Capital Fund Scheme depends upon the educational
qualification of the borrower and is as:
S.No Qualification Amount (Lkhs) Loan Repayment Period
1 10+2 & Graduate 300,000.00 5.5 Years
2 Post Graduate 500,000.00 6.5 Years
3 Technical Graduate 750,000.00 6.5 Years
The Contents of DPR are given under following heading:
i Introduction about Various Aspects of Project
ii Assumptions of Project
iii Fixed Capital Estimate
iv Working Capital Estimate
v Recurring Expenses
vi Depreciation Schedule
vii Projected Sales
viii Projected Profit & Loss Account for Seven Years

ix Projected Cash Flow Statement for Seven Years
x Projected Balance Sheet for Seven Years
xi Repayment Schedule for Seven Years
xii Payback Period
xiii Break-Even Analysis
xiv Debt Service Coverage Ratio

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Jammu and Kashmir Entreprenuership Development Institute (JKEDI)
Introduction
The Detailed project report is for establishment of Dairy Cattle Farm. Dairy farming is
recognized as an instrument for social and economic development. The States overall fresh milk
supply comes from small producers, dispersed throughout the rural and semi-urban areas. These
farmers maintain an average herd of 5 or 8 cows. The cows feed and fodder requirements are
largely met by nearby grazing land and agricultural waste in rural areas, in semi-urban areas it is
largely met by organic waste of households on streets, a small portion of nutritional requirement
in both the cases is met by procured feed and feed supplement from market with erratic supply,
which makes dairy farming a costly affair. Availability of ample labor and a small land base
encourage farmers to practice dairy farming as an occupation subsidiary to agriculture or other
allied activities. While income from agriculture or allied activities is seasonal, dairying provides
a stable, year-round income, which is an important economic incentive for the small farmer
to take to dairy farming. Presently, dairy sector in the State is experiencing problems like
unhygienic and adulterated final product for consumption due to low productivity, weak market
organization, insufficient policy support, high operation cost, instable prices, low margins for
farmers, decreasing effectiveness of departmental support due to its limited resources and
multilayered structure etc.all of which hamper the development of the sector possessing a huge
growth potential.
The trained Entrepreneurs in commercial dairy farming is being sponsored by JKEDI under
SCFS for availing loan essential for setting up of the unit. The items of finance would include
capital asset items such as purchase of Milch animals, construction of sheds, purchase of
equipments etc. The feeding cost during the initial period of three months is capitalized and
given as term loan. Facilities such as cost of land development, fencing, digging of well, etc. can
be considered for loan. Cost of land is not considered for loan. However, if land is purchased for
setting up a dairy farm, its cost can be treated as party's margin upto 35% of the total cost of
project. The project include livestock markets, availability of water, feeds, fodders, veterinary
aid, breeding facilities, marketing aspects, training facilities, experience of the farmer and the
type of assistance available from State Government.
Based on this, the total cost of the project, margin money to be provided by the beneficiary,
requirement of bank loan, estimated annual expenditure, income, profit and loss statement,
repayment period, etc. can be worked out and shown in the Project report.Other documents such
as loan application forms, security aspects, margin money requirements etc. are also examined. A
field visit to the scheme area is undertaken for conducting a techno-economic feasibility study
for appraisal of the scheme. The loans will be repaid in suitable monthly/quarterly instalments
usually within a period of about 5 years. In case of commercial schemes it may be extended upto
6-7 years depending on cash flow analysis.

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Common Management Practices Recommended for Dairy Farmers

Modern and well established scientific principles, practices and skills should be used to obtain
maximum economic benefits from dairy farming. Some of the major norms and recommended
practices are as follows :
Housing:
Construct shed on dry, properly raised ground.

Avoid water-logging, marshy and heavy rainfall areas.
The walls of the sheds should be 1.5 to 2 meters high.
The walls should be plastered to make them damp proof.
The roof should be 3-4 metres high.
The cattle shed should be well ventilated.
The floor should be pucca/hard, even non-slippery impervious, well sloped (3 cm per metre)
andproperly drained to remain dry and clean.
Provide 0.25 metre broad, pucca drain at the rear of the standing space.
A standing space of 2 x 1.05 metre for each animal is needed.
The manger space should be 1.05 metre with front height of 0.5 metre and depth of 0.25
metre.
The corners in mangers, troughs, drains and walls should be rounded for easy cleaning.
Provide 5-10 sq. metre loaf space for each animal.
Provide proper shade and cool drinking water in summer.
In winter keep animals indoor during night and rain.
Provide individual bedding daily.
Maintain sanitary condition around shed.
Control external parasites (ticks, flies etc.) by spraying the pens, sheds with Malathion or
Copper sulphate solution.
Drain urine into collection pits and then to the field through irrigation channels.
Dispose of dung and urine properly. A go bar gas plant will be an ideal way. Where Bio-gas
plant is not constructed, convert the dung along with bedding material and other farm wastes
into compost.
Give adequate space for the animals.
Selection of Animal :
The procurement of high yeilding livestock may be facilitated by Directorate of Animal

Husbandry Jammu by organizing a buyers -sellers meet (mandi) at lakhanpur,Jammu.

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Milk Marketing:
Milk is among the most important consumable and marketable commodities of the world with
enormous demand in domestic and international market. Timing the demand of milk in
summer is high as compared to winter. Thats why the animals in summer are sold at a bit
higher prices as compared to winter. So the proposed business can be started before the onset
of summer season. At the commencement of the proposed business, it is important that the
entrepreneur must have good knowledge of the production and have contacts with the
livestock breeders and farmers. The ability to work with people and animals, and efficient use
of resources are important aspects in modern and commercial dairy farming. In the State, milk
trade practices are not established and milk marketing network is not much developed and
milk is produced mostly for household consumption and local marketing. There is scope for
cooperative development and milk distribution development through institutional
arrangements with milk processing plant, of the daily production of 95,00000 lit/day in the
State only 212,500 lit./day i.e (5.4%) is marketed in an organized way by local dairy
processing plant owners, rest is sold in loose and unhygienic way. The small and landless
dairy farmers account for 100 % of marketed milk, with increasing population, urbanization,
income and diversification of diet towards high nutritive value products, per capita milk
consumption is increasing.
The information collected through meetings with farmers indicated that yield levels varied
from farm to farm. The majority farmers with average management of farm on scientific
terms were able to get yield at 7-8 liters per day/cow, however very few farmers who applied
improved practices including feed, fodder, health checkups etc. were able to obtain good
yields ranging from 10-12 liters per day/cow. The seasonal fluctuations in milk production
occur due to lower water and fodder availability in winters when the production of milk
decreases. The milk market in Jammu & Kashmir is characterized by the presence of number
of different kinds of mediators in milk marketing system, such as milk producers, Milk
collectors, Milk retailers operating at different stages of milk collection and distribution.
However, there is a serious problem of displaying the share in quantitative terms due to the
incompleteness of statistical data through these channels.
The major players in Milk marketing:
Milk producers: They are sole point of milk production and include rural subsistence and
semi-subsistence farmers, rural market oriented farmers, city and semi-urban landless
producers constituting majority of dairy farmers and are responsible for 100% of the milk
produced. They normally keep 1-3 milk producing cows.
The milkman or are the main and traditional and well established intermediaries in linking
farmers in rural and semi-urban areas with consumers. They have more social and family
links with the farmers and enjoy more trust and family bonds with them. They collect milk in
small quantities from farmers at their doorstep and milk is sold to consumers at their door
step. The marketing cost involved is mainly labor and transportation charges.The milk is
handled in crude way. A milkman owns a few metallic containers/cans to collect,transport
and distribute milk without chilling and care for hygiene of milk.
Street Milk retailers may produce his own milk and sell or buy the milk form milkmen or
collectors.

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profitable unit. Dairy farming is highly complex as it includes breeding, management, feeding,
housing, disease control and hygienic production of milk on farm. The judicial use of means
and resources to achieve clearly defined goals is the key success factor in modern dairy farming
i.e. the art of maximization and optimal utilization of resources and means for maximizing
productivity and profits. The low yielder animals are uneconomical to keep, hence these should
be culled. The over all genetic improvement of all the dairy animals is necessary for improved
milk production. It involves milking records at equal intervals, selection of bull from high
producing mothers, progeny testing of breeding bull and then making extensive use of these
bulls by well-organized Artificial Insemination (AI) program. Feeding dairy animals on
nutritious and high yielding hybrid varieties of forages can be adopted. The surplus forage
should be preserved as silage or hay. Other farm management practices include feeding for
growth, lactation, pregnancy or maintenance, hygienic milk production, comfortable and
ventilated barns, spraying/ wallowing of animals in summer, timely detection of heated, mating,
with selected bull or AI service. If animals are bred within the 60-90 days of calving provided
with clean surroundings, drinking water and feed according to the requirements, the overall
performance of herd can be improved. Timely vaccination against Foot and Mouth Disease,
Brucellosis along with the prevention of mastitis and parasitic control will also improve the
overall performance of dairy herd. Hygienic milk production depends upon healthy animals,
clean surroundings, clean hands of milkman and clean utensils.
Market Potential
Raw milk is used for drinking and tea making purpose. In rural areas, milk is used to make Desi
ghee, yogurt, whey (lasi) and butter. Rural as well as the urban households are the major
consumers of milk. The demand for milk increases during summers as the consumption of
whey (lassi) rises due to hot weather. Ghee is obtained by heating the milk to evaporate water
and removing the curd. Liquid butter oil with 93% fat content and a much smaller volume
results. It is easy to store and resists spoilage even at tropical temperatures. Milk processing
companies use milk as a raw material to formulate different types of milk i.e. pasteurized milk,
UHT treated milk, condensed milk, skim milk & milk powder, etc. Different value added
products like yogurt, ice cream, butter and cheese are also prepared from the raw milk. The
processed milk market has increased its share in quality.
Conditions that favor dairy farming
The following conditions are required to enable a good environment for dairy farming:
Nearness to Veterinary Assitance.
A good water supply from rivers, streams, dams, boreholes, etc. Water is essential for the
animals to drink and to maintain a good hygienic standard at farms.
A nearby market for the milk within reach,for sale of Milk and Milk products in Catchment
Areas due to its perishible Nature. Either informally direct to consumers or formally through
Cooperative Societies and milk processors.
Availability of inputs, like stock feeds and veterinary drugs.
Access to technical information and support of a dairy extension service and to breeding
facilities, like Artificial Insemination (A.I.) or Cow camps.
Access to an infrastructure with all-weather roads.
Knowledge of good crop husbandry; like maize, fodder crops and legumes.

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A cultural background with a tradition of cattle keeping and milk consumption.

Essentials of successful dairy farming
To make dairy farming a successful enterprise at the farm the following factors are essential:
Availability of good quality feeds, fodder, water and grazing throughout the year.
Suitable breeding animals with potential for milk production.
Good animal husbandry practices.
Effective disease and parasite control.
Title deed land settlement.
Favorable good government policy towards smallholder dairy farmers.
Dairy Cattle Breed Selection For Milk Production
Selection of Cattle breed for farm is extremely important due to the following reasons:
Lactation Period: Lactation period for various breeds differ that will have direct impact on
farm revenues.
Size of Cow: Large cows generally produce more milk than small cows, but milk yield does
not vary in direct proportion to body weight. Rather, it varies by the 0.7 power of body weight,
which is an approximation of the surface area of the cow (metabolic body size). A cow which
is twice as large as another usually produces only about 70% instead of 100% more milk.
Milk Production Capacity: Certain breeds produce more milk than others; however,
different breeds produce within a range of around 2,000 to over 10,000 kg of milk per annum.
Comparative analysis of milk production capacity for various cattle breeds is given below:
Breed Milk Yield (Kg/Y) Lactation Period
1.Jersey 5,000 310
Guernsey 5,500 305
Brown Swiss 6,180 -
Shorthorns 6,700 305
Australian Friesian Sahiwal 3,000-5000 280
Sahiwal 2,270 300
2. Holestein-Friesian 9000 to 15,385 365
Red Sindhi 1900 265
Cholistani 1,188 165
Tharparkar/White Sindhi 1,660 305

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Techno-economic Parameters
S.No Discription Remarks
1 Economic Life of Bovine 6 to 7 Lactatations
2 Rearing System Shed rearing

Cost of Cow, (Rs.4000 Per Lit.with yeild of 20 Lit/Day/Cow,Including
3
Transportation Rs.80,000
4 Area Required for each Animal Including Storage Area.(Sq.ft) 80 Sft.
5 Space for Labour Quarter (Sft) 100
6 Bathroom (Sft) 36
Cost of Construction of livestock Shed Rs./Sft (Incl.Soakage Pit,Electric &
7 Water Fittings) Rs.500/Sq.ft
8 Cost of Construction of Labour room (Incl.Electric & Water Fittings)

450
9 Cost of Construction of Bathroom (Rs./Sft)

500
10 Cost of Equipment as 5% of Shed Value
11 Rented/Leased/Owned Land for Seasonal Growing of Fodder 2 Kanal Per livestock
12 Green Fodder Consumption (Lactation) 25 Kg
13 Dry Fodder Consumption (Lactation) 5 Kg
14 Concentrate Consumption (Lactation) 5 Kg
15 Green Fodder Consumption (Dry Period) 10 Kg
16 Dry Fodder Consumption (Dry Period) 7 Kg
17 Concentrate Consumption (Dry Period) 2 Kg
18 Cost of Green Fodder Rs.3/Kg
19 Cost of Dry Fodder Rs.12/Kg
20 Cost of Concentrate Rs.22/Kg
21 Cost of Veterinary Aid per Animal/Year (Rs.) 2400
22 Cost of Electricity & Water per Animal/Year 200
23 Labour Charges per Day/Animal (Rs.) 30
24 Labour to Animal Ratio 1.8
25 Rate of livestock Insurance Premium 6%
26 Avg.Daily Milk Yield of each Cow (Lt/Kg) 20
27 Sale Price of Milk Rs.30/Kg
28 Lactation Days/Year 300
29 Dry Days/Year 65
30 Procurement of Livestock in 2 batchs
31 Working days/Year 365

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32 Price of empty livestock feed gunny bags of 50 Kg Rs.10

33 Expenditure on Rearing of Calves will be offset form the income reaslized form their Sale
34 Heifers will be retained on the farm as replacement stock
35 Farmyard manure shall be used for fertilizing the fodder plots
36 Place of Procurement of Animals Jammu (Lakhanpur)
37 Depreciation of Shed 5%
38 Depreciation of Equipment 10%
39 Working Capital to be provided for one Month

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Project Financials
The Total Project Cost for the proposed venture is estimated at 824,000.00
The subsidy amount depends upon the educational qualification of the borrower and is as:
S.No Qualification Amount (Lkhs)
1 10+2 & Graduate 300,000.00
2 Post Graduate 500,000.00
3 Technical Graduate 750,000.00
The amount if needed to make 35% Margin money, for availing bank loan of 65% of Total Project Cost may be
contributed by Entreprenuer himself,the said venture has funding pattern as:
S.No Particulars Percentage Amount (Rs.)
1 Seed Capital 288,400
35%
2 Promoters Contributers 0
3 Term Loan 65% 535,600
Likewise,the project will be financed under two accounts viz.
Term Loan A/c For Fixed Capital Investment
Cash Credit A/c for Working Capital Investment
The projected Financials are given under following heading:
I Fixed Capital Estimate
II Working Capital Estimate
III Recurring Expenses
IV Depreciation Schedule
V Projected Sales
VI Projected Profit & Loss Account for Six Years
VII Projected Cash Flow Statement for Six Years
VIII Projected Balance Sheet for Six Years
IX Repayment Schedule for Six Years
X Payback Period
XI Break-Even Analysis
XII Debt Service Coverage Ratio
XIII Benefit Cost Ratio Estimate

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Fixed Capital Investment
1 Rented/Leased/Owned Land for Seasonal Growing of Fodder 12

2 Civil Work Dimensions Area Sq.ft Rate/Sq.ft Rate in Rs.
Shed (Incl.Electric & Water
Fittings,Soakage Pit) 480 500.00 240000.00
Sub-Total 240,000.00
3 Livestock Quantity Rate
Cross breed Bovine of (HF Type Or as
Made Available by Department of AH.)
Incl.Transportation 6 80000.00 480000.00
Sub-Total 480,000.00
4 Equipement: Quantity Rate
Utensils
Chains
Cans
5% of Shed Value
Fire Extinguisher
Office Furniture
Cheff Cutter
Sub-Total 12,000.00
5 Preliminary Expenses
Advertisement 1,742
Legal Expenses 5,000
Intererst during Moratorium 28,000
Sub-Total 34,742
Grand Total 766,742

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Working Capital Estimate

The working capital requirement is calculated on the basis of Operating Cycle Expenses and is provided for Six
Months in order to carry on its functions in a normal manner.Besides,the working capital requirements for the
unit include cost of Feed & Concentrate ,General Expenses,Wages & Salaries and Utilities & Upkeep.
S.No Particulars Amount
1 Feeding during lactation 42875

2 Feeding during dry period 5991
3 Cost of Electricity & Water 100
4 Labour Charges 417
5 Insurance Expenses 5475
6 Veterinary Expenses 2400
Total 57,258
Feeding Schedule
Quantity
S.No Particulars Herd Size Days
(Kg)/Cow/Day
Rate Amount
Lactating Cows
1 Green Fodder 7 300 25 3 157500
2 Dry Fodder 7 300 5 12 126000
3 Concentrate 7 300 5 22 231000
Dry Cows
1 Green Fodder 7 65 10 3 13650
2 Dry Fodder 7 65 7 12 38220
3 Concentrate 7 65 2 22 20020
Total 586,390.00
Total Dry Fodder Consumpton 13685 Kg

Total Concentrate Consumpton 11410 Kg
Unit Cost of Production

Average Consumption Kg Rate Amount
Green Fodder 25 3 75
Dry Fodder 5 12 60
Concentrate 5 22 110
Labour/Day 30
Cost 275
Yeild Per Day 20.00 30 600
Profit 325

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Annual Recurring Expenses
A Purchases
S.No Particulars Per Annum
1 Feeding during lactation 514500.00
2 Feeding during dry period 71890.00
3 Cost of Electricity & Water 1200.00
4 Rent/Lease for growing fodder 5000.00
5 Labour Charges 65700.00
6 Insurance Expenses 28800.00
7 Veterinary Expenses 14400.00
Total 701490.00
B Salary & Wages

S.No Particulars Ist 2nd 3rd 4th 5th 6th 7th
Manager 120000 120000 120000 120000 120000 120000 120000
C Repairs & Maintenance:

S.No Particulars Amount %age Ist 2nd 3rd 4th 5th 6th 7th
1 Building 240000 10% 24000 24000 24000 24000 24000 24000 24000
2 Equipement 12000 5% 600 600 600 600 600 600 600
Total 24600 24600 24600 24600 24600 24600 24600
D Selling & Distribution Expenses:

S.No Particulars %age Ist 2nd 3rd 4th 5th 6th 7th
1 Sales 676365 676365 676365 676365 676365 676365 676365
2 Marketing 5% 33818 33818 33818 33818 33818 33818 33818
3 Hauling 15% 101455 101455 101455 101455 101455 101455 101455
Total 135273 135273 135273 135273 135273 135273 135273
E General Expenses
S.No Particulars Ist 2nd 3rd 4th 5th 6th 7th
Telephone & Stationary 10000 10000 10000 10000 10000 10000 10000

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STATEMENT SHOWING THE DEPRECIATION ON FIXED ASSETS

The Depreciation is calculated under Written-Down Value Method (WDV) with preliminary expenses amortized in 5
years.
BUILDING @ 5.00%
Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year 6th Year 7th Year
Opening Balance 240000 228000 216600 205770 195482 185707 176422
Depreciation 12000 11400 10830 10289 9774 9285 8821
Closing Balance 228000 216600 205770 195482 185707 176422 167601
EQUIPMENT @ 10.00%
Opening Balance 12000 10800 9720 8748 7873 7086 6377
Depreciation 1200 1080 972 875 787 709 638
Closing Balance 10800 9720 8748 7873 7086 6377 5740
PRELIMNERY EXPENSES
Opening Balance 34742 27794 20845 13897 6948 0 0
Less: 6948 6948 6948 6948 6948 0 0
Closing Balance 27794 20845 13897 6948 0 0 0
Assets Net of Depreciation

Particulars 1st 2nd 3rd 4th 5th 6th 7th
Building 228000 216600 205770 195482 185707 176422 167601
Equipment 10800 9720 8748 7873 7086 6377 5740
Net Block 238800 226320 214518 203355 192793 182799 173341
Total Depreciation 13200 12480 11802 11163 10561 9994 9459

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Sales Realization
This is assumed that the sale of Milk is a every day business whereas the sale of Manure,gunny bags and calves will
be held seasonally
Quantity
S.No Particulars Rate/Unit No.of Cows Days Amount
(Kg/No.)
1 Sale of Milk 20 30 7 300 1260000
2 Sale of Gunny Bags 502 10 5019
Total 1,265,019

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Projected Profitability statement for Seven years of operation of unit

The projected income staement gives a snapshot of yearly performance of project and ins presented below:
S.No. Particulars Operating Years
A Year of Operation 1st 2nd 3rd 4th 5th 6th 7th
B Capacity Utilization (%) 100 100 100 100 100 100 100
C Sales/Revenue 1265019 1265019 1265019 1265019 1265019 1265019 1265019
Less : Cost of Sales
Purchases 701490 701490 701490 701490 701490 701490 701490
Salary & Wages 120000 120000 120000 120000 120000 120000 120000
Sub-Total 821490 821490 821490 821490 821490 821490 821490
D Gross Profit on Sales 443529 443529 443529 443529 443529 443529 443529
Less: Operating
Overhead Expenses
Repairs & Maintenance 24600 24600 24600 24600 24600 24600 24600
General Expenses 10000 10000 10000 10000 10000 10000 10000
Depreciation 13200 12480 11802 11163 10561 9994 9459
Sub-Total 47800 47080 46402 45763 45161 44594 44059
Less: Operating
Selling & Distribution
Expenses
Marketing 33818 33818 33818 33818 33818 33818 33818
Hauling 101455 101455 101455 101455 101455 101455 101455
Sub-Total 135273 135273 135273 135273 135273 135273 135273
E Gross Expenses 183073 182353 181675 181036 180434 179867 179332

F Operating Profit 260456 261176 261854 262493 263095 263662 264197
Less: Financial Expenses
Interest on Term Loan 28141 50114 41102 31047 19828 7311 0
Interest on Working Capital 4001 4001 4001 4001 4001 4001 4001
Less: Other Expenses
Preliminary expenses 0 6948 6948 6948 6948 6948 0
Sub-Total 32142 61063 52051 41996 30777 18260 4001
G Total Cost of Sales (COS) 1036705 1064906 1055216 1044522 1032702 1019617 1004823
Profit Before Tax 228314 200113 209803 220497 232317 245402 260196
Less: Taxation 0 0 0 0 0 0
H Profit After Tax 228314 200113 209803 220497 232317 245402 260196
Reserves & surpluses 228314 428427 638230 858727 1091044 1336446 1596642
Appropriations
Less: Drawings 0 0 0 0 0 0
Term Loan Repayments 7810 77881 86893 96948 108167 120684 0
Sub-Total 7810 77881 86893 96948 108167 120684 0
I Profit After Appropriations 220505 122232 122910 123549 124151 124718 260196

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Projected Cash Flow Statement for Seven years
S.NO. Particulars YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7
A Cash flow from operating activities
Receipts from customers 1207762 1265019 1265019 1265019 1265019 1265019 1265019
Payments to suppliers 701490 701490 701490 701490 701490 701490 701490
Salary & Wages 120000 120000 120000 120000 120000 120000 120000
Selling & Distribution 135273 135273 135273 135273 135273 135273 135273
Total 995364 995364 995364 995364 995364 995364 995364

Net cash flow from operating activities 212398 269655 269655 269655 269655 269655 269655
B Cash flow from investing activities
Establishment 286742
Livestock 480000
Net cash flow from investing activities -766742 0 0 0 0 0 0
C Cash flow from financing activities
Promoters Contribution 0
Seed Capital 288400
Term Loan 498382
Working Capital Finance 37217 0 0 0 0 0 0
Re-Payments of Borrowings -7810 -77881 -86893 -96948 -108167 -120684 0
Payment of Interest -28141 -50114 -41102 -31047 -19828 -7311 0
Net cash flow from Financing activities 788049 -127995 -127995 -127995 -127995 -127995 0
Net increase (decrease) in cash held 233705 141660 141660 141660 141660 141660 269655
Cash at beginning of period 0 233705 375365 517025 658686 800346 942006
D Cash at end of period 233705 375365 517025 658686 800346 942006 1211662

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Projected Balance Sheet for Seven years
Liabilities 1st Year 2nd Year 3rd Year 4th Year 5th Year 6th Year 7th Year
Promoters Contribution 0 0 0 0 0 0 0
Seed Capital 288400 288400 288400 288400 288400 288400 288400
Term loan 498382 490572 412692 325799 228851 120684 0
Repayments of Principal 7810 77881 86893 96948 108167 120684 0
Net Term Loan Balance 490572 412692 325799 228851 120684 0 0
Reserves & surpluses 228314 428427 638230 858727 1091044 1336446 1596642
Working Capital Liability 37217 37217 37217 37217 37217 37217 37217
Total 1,044,504 1,166,736 1,289,646 1,413,195 1,537,345 1,662,063 1,922,260

Assets 1st Year 2nd Year 3rd Year 4th Year 5th Year 6th Year 7th Year
Livestock 480000 480000 480000 480000 480000 480000 480000
Gross Block 252000 238800 226320 214518 203355 192793 182799
Depreciation 13200 12480 11802 11163 10561 9994 9459
Net Block 238800 226320 214518 203355 192793 182799 173341
Preliminary Expenses 34742 27794 20845 13897 6948 0 0
Current Assets 57258 57258 57258 57258 57258 57258 57258
Cash & Bank Balance 233705 375365 517025 658686 800346 942006 1211662
Total 1,044,504 1,166,736 1,289,646 1,413,195 1,537,345 1,662,063 1,922,260

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Repayment Schedule Yearly
Repayment of Principle amount along with Interest payments is calculated at the rate of 11% per annum,the
repayment period of Seven years and the moratorium period is of two quarters,in which an enterprenuer is going
to pay an interest amount only.
Term Loan Repayment
S.No. Particulars 0 1st Year 2nd Year 3rd Year 4th Year 5th Year 6th Year 7th Year
1 Balance 498,382 490572 412692 325799 228851 120684 0 0
2 Principle 0 -7810 -77881 -86893 -96948 -108167 -120684 0
3 Interest 0 -28141 -50114 -41102 -31047 -19828 -7311 0
4 Cash Outflow 35,950 127,995 127,995 127,995 127,995 127,995 0
Working Capital Finance

S.No. Particulars 0 1st Year 2nd Year 3rd Year 4th Year 5th Year 6th Year 7th Year
1 Margin 20040.13 20040.13 20040.13 20040.13 20040.13 20040.13 20040.13 20040.13
2 CC Limit 37,217 37217 37217 37217 37217 37217 37217 37217
3 Interest 0 -4001 -4001 -4001 -4001 -4001 -4001 -4001
4 Cash Outflow 4,001 4,001 4,001 4,001 4,001 4,001 4,001

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Detailed Debt Service Coverage

The debt service coverage ratio shows the ability of the unit to repay interest and principal amount of
composite loans.
S.no Particulars 1st 2nd 3rd 4th 5th 6th 7th
A Source of funds
1 Profit after tax 228314 200113 209803 220497 232317 245402 260196
2 Depreciation 13200 12480 11802 11163 10561 9994 9459
3 Interest 32142 54115 45103 35048 23829 11312 4001
Total A 273656 266708 266708 266708 266708 266708 273656
B Disposition of funds
4 Repayment of term loan 7810 77881 86893 96948 108167 120684 0
Total B (3+4) 39951 131996 131996 131996 131996 131996 4001
C Debt service coverage ratio 6.85 2.02 2.02 2.02 2.02 2.02 68.40
D Average DSCR 2.83

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Break-Even Analysis
It suggests the level of capacity utilization,which the unit must attain in order to avoid any loss.
Particulars Ist 2nd 3rd 4th 5th 6th 7th
A) Sales 1265019 1265019 1265019 1265019 1265019 1265019 1265019
B) Variable cost 840764 840764 840764 840764 840764 840764 840764
Raw material/Purchases 701490 701490 701490 701490 701490 701490 701490
Selling & Distribution 135273 135273 135273 135273 135273 135273 135273
C) Contribution 424255 424255 424255 424255 424255 424255 424255
D) Fixed costs 189689 218611 209599 199543 188325 168859 154600
Interest Payments 28141 50114 41102 31047 19828 7311 0
Salary & Wages 120000 120000 120000 120000 120000 120000 120000
Ammortization of Expenses 6948 6948 6948 6948 6948 0 0
Preliminary expenses 0 6948 6948 6948 6948 6948 0
E) B-E Point (%) 44.71% 51.53% 49.40% 47.03% 44.39% 39.80% 36.44%
F) Avg.B-E Point (%) 44.76%

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Jammu and Kashmir Entrepreneurship Development Institute (JKEDI),

Seed Capital Fund Scheme (SCFS)

DETAILED PROJECT REPORT

Activity: Dairy Farming

Name of the Entreprenuer: Mr/Ms. AH Jammu

Residential address: Talab Tillo

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

1 Name Of Unit: M/S. Model DPR

2 Name of the Entreprenuer: Mr./Ms. AH Jammu

3 Name of Father /Spouse Mr./Ms. Dr.Shafat Kakroo

4 Residence: Talab Tillo

5 Unit Address : Talab Tillo

6 Legal Status: Sole Propreitorship

7 Activity: Dairy Farming

9 Total Cost of Project :

11 Unit Size (No. of Bovines): 6

13 Moratorium Period: 6 Months

14 Break Even Point: 44.76%

15 Projected Sales : 1,265,019

16 Debt Service Coverage Ratio: 3

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Total Project Cost (A+B) 824,000

S.No Particulars Percentage Amount (Rs.)

B Working Cap Finance Amount (Lkhs)

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Background of Entreprenuer & Project

vii Projected Sales

viii Projected Profit & Loss Account for Seven Years

xiv Debt Service Coverage Ratio

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Common Management Practices Recommended for Dairy Farmers

Construct shed on dry, properly raised ground.

The procurement of high yeilding livestock may be facilitated by Directorate of Animal

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

A cultural background with a tradition of cattle keeping and milk consumption.

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

S.No Discription Remarks

1 Economic Life of Bovine 6 to 7 Lactatations

2 Rearing System Shed rearing

8 Cost of Construction of Labour room (Incl.Electric & Water Fittings)

9 Cost of Construction of Bathroom (Rs./Sft)

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

32 Price of empty livestock feed gunny bags of 50 Kg Rs.10

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

I Fixed Capital Estimate

II Working Capital Estimate

III Recurring Expenses

VI Projected Profit & Loss Account for Six Years

VII Projected Cash Flow Statement for Six Years

VIII Projected Balance Sheet for Six Years

IX Repayment Schedule for Six Years

XII Debt Service Coverage Ratio

XIII Benefit Cost Ratio Estimate

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Fixed Capital Investment

1 Rented/Leased/Owned Land for Seasonal Growing of Fodder 12

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Working Capital Estimate

1 Feeding during lactation 42875

Total Dry Fodder Consumpton 13685 Kg