PROJECT REPORT

OF

COLD STORAGE

MRS. JAYASHREE MAHESH SHANBHAG

-: PREPARED BY :-

SHREYANS TEJPAL SHAH

CHARTERED ACCOUNTANTS

“KSHITI”, 127/2, ROCKEL LANE,

VAKHARBHAG, SANGLI

TEL: (0233) 2623625, 2622536

 HIGHLIGHTS OF THE PROJECT

1. Name of the Entrepreneur : Mrs. Jayashree Mahesh Shanbhag

2. Address of unit : Proposed in MIDC Shalgaon - Bombalewadi,

Dist. Sangli.

3. Constitution : Proprietorship

4. Address : Sadanand Bhavan, Main Road, Vita

5. Status of the Project : Application for Land is made to MIDC

6. Nature of Activity : Cold Storage

7. Area of the Plot : 1240 Sq. Mtrs.

8. Cost of Project : ₹ 165.00 Lacs

9. Means of Finance : Capital Contribution ₹ 45.00 Lacs

Bank Term Loan ₹ 120.00 Lacs
Total ₹ 165.00 Lacs

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

 PROJECT REPORT
OF
COLD STORAGE

OBJECTIVE: -

The purpose of this study is to explore the feasibility for setting up cold storage units
for storing items like Raisins, Turmeric, Vegetables and Milk Products in Maharashtra.

PROSPECTS FOR COLD STORAGE: -

The preservation of perishable food stuff is a matter of vital importance in this

country, especially, when there is a problem of food storage and the loss of food is abnormally
high due to the lack of proper storage facilities, at many producing and consuming centers. It
has been observed that certain important nutritive foods like vegetables, fruits, eggs, etc. are
available in abundance in the production season and their process drop to un-remunerative
levels, thus causing a serious discouragement to increase production. Due to the lack of
facilities for proper preservation the commodity is scarce in the off season and the prices
shoot up considerably. The provision of cold storage facilities, as has been experienced, would
(1) prevent wastage of food stuffs,
(2) ensure remunerative prices to the producer which would, in it, provide the
incentive for increased production,
(3) ensure steady suppliers over a longer period of time,
(4) Stabilize prices.

It is therefore desirable to set up a chain of cold and frozen food storage, especially,
at the major producing and consuming centers, if feasible.

There are many kind of vegetables and fruits which can be stored in cold storage for
periods ranging from 2 weeks to over eight months. The present study has been conducted,
mainly to explore the feasibility of setting up of a cold storage plant for the storage of
commodities like fruits, vegetables and other products in Sangli District.

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

 The study of development of cold storage facilities in Maharashtra shows that the total
capacity available now is about 2,00,000 MT which is meager, as compared to the capacities
available in states like Uttar Pradesh, Bihar, West Bengal, Punjab, etc is therefore clear that a
good scope exists for establish additional cold storage facilities in Maharashtra.

GENERAL INFORMATION ON STORAGE OF VARIOUS COMMODITES: -

The refrigerated storage which is includes the cold storage and frozen storage is one
of the best known methods of preservation of food stuffs to retain the food value and flavor.
Although refrigeration is an expensive process, the cold storage units of properly selected
capacities can be economically viable. Te economic concept of the cold storage is that the
storage cost must be less than the difference n price of the commodity stored, between flush
and lean season. The information on the storage, temperature, storage life and the post cold
storage periods of some fruits, vegetables etc. is given in the enclosed annexure.

In case of fruits and vegetables, the post cold storage period is an important
consideration for deciding whether the cold storage be located at the producing or the
consuming centers. Items like potatoes. Raisins and tamarind have a good post cold storage
life and therefore, storage of these commodities can be set up both at the producing and the
consuming centers.

PROPOSED PROJECT:

After having considered the need for the project, it has been proposed a cold storage
of 1000 MT capacity. This unit will categorize as a Small Scale Industry.

In view of the flexibility desired for storage of various products of slightly varying
conditions and different quantities it would be necessary to have a multi chamber
construction with differentiated and designated area for storage.

INTRODUCTION OF THE PROPRIETOR:

This project is proposed as a proprietorship of Mrs. Jayashree Mahesh Shanbhag. She

is a commerce graduate and is have decided to start own entrepreneurship. She is an

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

educated woman entrepreneur and currently not engaged in any other full time business
elsewhere.

LOCATION & ITS SELECTION:

This project is proposed in MIDC Shalgaon - Bombalewadi. This proposed location is

located in a highly demanding area being a located on the border of 2 districts and in a small
distance from the National Highway NH4. Surrounding districts of Sangli and Satara area
famous for various agricultural goods like Turmeric, Raisins and Jaggery, and this is a very
useful for cold storage business as the transportation facilities are amply available.

CONSTITUTION AND UNIT REGISTRATION:

The project will be undertaken as a proprietorship of Mrs. Jayashree Mahesh

Shanbhag. As regards to the constitution of the firm, PAN card of the proprietor and a self-
declaration for bank purposes are the only documents required.

This project will be a micro scale enterprise as per GR of Govt. of Maharashtra and
MSME Act. Registration under MSME Act will be given by DIC after production. Other
registrations such as VAT, will be taken as and when required.

TECHNICAL KNOW-HOW:

The services of the consultants for designing the Plant and for monitoring during the
execution will be available. The staff for the operation of the plant also is available in the
region.

LOCATION, LAND AND BUILDING

Land required for the project is around 1250 Sq. Mtrs. This location is selected being
located just around the National highway and on the brinks of 2 districts which are prominent
in the agriculture.

The cold storage building will include the cold chambers with a three floor structure,
precooling room, loading / unloading and drying shed, machine room, office, toilet block etc.

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

the approximate total built up area with three floor structure in cold chamber as per the
guidelines. The cost of the building structure is estimated ₹ 80.00 lacs, which will include the
fabrication required for the project.

OPERATIONAL REQUIREMENT AND UTILITIES:

Cold Storage plants, mainly, being the units for preservation do not require any raw
material etc. for operation. The refrigeration plant works on a refrigerant medium which can
be Freon or ammonia. In India 95 % of the large sized cold storages designed for ammonia
refrigerant due to the simplicity or operation, maintenance and the lower cost of the
refrigerant which is needed only to make good to make good for the losses which may occur
during repairs and maintenance. Freon is, generally, used on smaller plants, which are
designed for automatic operation. Now that the freons have been identified as the gases
responsible for damaging ozone layer surrounding the earth’s atmosphere, the production of
Freon is being phased out gradually and as such the availability would pose a problem in the
coming years. The alternatives developed for certain Freons are still not available in many
parts of the world.

It would, therefore, be suggested that the refrigeration system be designed to work

on Ammonia refrigerant with proper technical specification. The main utilities for the
operation are the power and water and the estimated quantities are given below:-

Power: - 65 KVA, 3 Phase, 50C/S, 400/400 V, Ac supply,

Water: - 10000 Ltrs/day. For Plant & Other consumption. The Water will be potable
and reasonably soft.

PLANT & MACHINERY: -

Refrigeration System Required: -

Temperature in cold chambers will be maintained in the range of 2 de. C to B deg. C

suitable for storage of beans, raisins, potatoes, other fruits, milk products etc. The daily
products intake will be 3 % of the chamber capacity.

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

 The machinery will be of indigenous make. The controls will be provided for the
regulation of temperatures in different chambers. Adequate safety devices and alarms will be
provided as per standard cold storage practices. The plant will include a standby compressor
unit and water pump sets.

The cold chambers will be insulated wit fiberglass or expanded polystyrene or

polyurethane insulation. The thickness of the insulation will be so selected that the heat gains
by transmission are reduced to minimum and the temperatures are maintained at low level
for many hours.

The electrical installation involves provision of standby power supply system with the
help of D. G. Set and main power supply from MSEB. The cost of main power supply involves
service line charges, Elect. Cabling, Elect. Control panel etc. other misc. items includes fans
for drying, fire fighting equipment, weigh scales, office furniture etc.

EFFLUENT DISPOSAL: -

There is no objectionable effluent generated in a cold storage plant and hence the
problem of effluent disposal does not arise. The water disposed out from the cooling system
and the domestic waste water will be used for gardening and tree plantation purposes.

PROJECT COST DETAILS:

₹ In Lacs
A. Land & Development 06.00
B. Building 80.00
C. Plant & machinery 65.00
D. Electrification & Erection 06.00
E. Generator & Other Assets 08.00
Total 165.00

MEANS OF FINANCE:

This project will be financed in following manner:

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

 ₹ In Lacs
A. Capital Contribution 45.00
B. Bank Term Loan 120.00
Total 165.00

IMPLEMENTATION SCHEDULE:

This project will be implemented in following schedule:

Sr. No. Activity Period

1. Acquisition and Development of Land. 2 months

2. Civil Work and building construction 7-8 months.
3. Procurement of machinery and equipment 2-3 months
4. Arrangement for Power supply 1 month
5. Water Supply arrangement 2 weeks
6. Erection and installation of machinery 1 month
7. Initial Procurements and commissioning 1 month
8. Trial Runs 2 weeks
9. Commercial Production 1 Week.

All the above said activities will start after allotment of plot, and will be completed
within three years from allotment as the activities are overlapping and can be done parallely.

Financial Analysis:

Attached separately.

Basis & Assumptions:

i. It is assumed that the unit will operate on for 365 working days in a year as like the
industries.
ii. The salary and wages for staff and labour has been taken into consideration on the
basis of prevailing market rates.

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

 iii. Sales will be ever increasing along with the goodwill and the demand.
iv. Interest rate at 11.5 % is considered in the project profile for both recurring and
nonrecurring investment.
v. Margin money will vary depending upon the location and scheme adopted by the
entrepreneur.
vi. Operative period of project cannot be calculated for a trading business, but
repayment period of loan is assumed to be years.
vii. The costs of land, construction charges, machinery and equipment, raw materials,
and consumables, other contingent expenses etc. indicated in the scheme are based on the
prices, prevailing at the time of project preparation.
Therefore, these are subject to necessary changes from time to time based on the
local conditions.

*****

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

 PROJECT REPORT

OF

COLD STORAGE

MRS. JAYASHREE MAHESH SHANBHAG

COST OF PROJECT : ₹ in Lacs

Land & Development 6.00

Building (Including Fabrication) 80.00

Plant & Machinery 65.00

Electrification 6.00

Generator & Lift 8.00

165.00

MEANS OF FINANCE :

Promoters Contribution 45.00

Bank Term Loan 120.00

165.00

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

DEPRECIATION :
₹ Lacs

Building 10% 8.00

Plant & machinery 20% 13.00

Other Assets 15% 2.10

23.10

POWER & WATER :-

Load Connected 30.00 KW

Maximum Demand 30.00 KW

Consumption for 24 Hrs 720.00 Units

Consumption Per Year 223200.00 Units

Total Cost @ ₹ 4.10 9.15 ₹ Lacs

LABOUR Qty Salary P. M. Month ₹ in Lacs

Accountant / Office Staff 1 9000 12 1.08

Plant Operator 1 7500 12 0.90

Helpers 2 4000 12 0.96

Watchman 2 2500 12 0.60

3.54

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

OPERATING EXPENSES :- ₹ in Lacs

Travelling 1.20

Office Expenses 0.48

Printing & Stationery 0.24

Store & Spares 0.60

Advt. & Publicity 0.60

Misc. expenses 0.36

Postage & Telephone 0.24

3.72

SALES & REVENUE

₹ Lacs

Rental Income 81.00

(₹ 450 per MT per month, capacity 1000 MT)
81.00

INTEREST :

Bank Term Loan @ 11.5% 13.80

13.80

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

PROFITABILITY STATEMENTS : @ 80% Capacity
₹ Lacs

Sales / Revenue 81.00

Less:- Labour 3.54

Power 9.15

Repairs & Maintenance 0.50

13.19 13.19

67.81
Less : T. L. Interest 13.80

Deperciation 23.10

Operating Expenses 3.72

40.62 40.62

Net Profit Bef. Tax 27.19

Less :- Income Tax @ 30% 8.16

Net Profit After I. Tax Prov. 19.04

Add :Depreciation 23.10

CASH ACCRUALS 42.14

Loan Repayment 24.00

D.S.C.R. 1.48

Note: -
Income Tax exempt for first 5 years being infrastructure system.

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

 PROFITABLITY STATEMENT (FIVE YEARS)

₹ Lacs

PARTICUALRS I II III IV V
Utilization % 80% 88.00% 96.80% 106.48% 117.13%
Rental Income 81.00 89.10 98.99 108.89 120.98

Less- Direct Expenditures

- Labour 3.54 3.93 4.54 5.05 5.83

- Power 9.15 10.07 11.52 12.67 14.49

- Repairs & Maintenance 0.50 0.55 0.62 0.68 0.76

13.19 14.55 16.68 18.39 21.08

Gross Profit 67.81 74.55 82.31 90.50 99.89

Less- Indirect Expenditure :

- Interest on T.L. 13.80 11.04 8.28 5.52 2.76

- Operating Exps 3.72 4.09 4.50 4.95 5.45

- Depreciation 23.25 19.51 16.43 13.87 11.75

40.77 34.64 29.21 24.34 19.95

Net Profit Before I. Tax 27.04 39.91 53.11 66.15 79.94

Less- I. Tax Provision 8.11 11.97 15.93 19.85 23.98

Net Profit After I. Tax prov. 18.93 27.93 37.18 46.31 55.96

Add- Depreciation 23.25 19.51 16.43 13.87 11.75

Cash Accruals 42.18 47.45 53.60 60.18 67.71

Loan Repayment 24.00 24.00 24.00 24.00 24.00

D.S.C.R. 1.48 1.67 1.92 2.23 2.63

Average DSCR 1.99

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

 CASH FLOW & FUND FLOW STATEMENT

₹ Lacs

I II III IV V

Sources of Funds

Cash Accruals 42.18 47.45 53.60 60.18 67.71

Increas in Capital 45.00 0.00 0.00 0.00 0.00

Increase in Term Loan 120.00 0.00 0.00 0.00 0.00

Increase in Bank Borrowing 0.00 0.00 0.00 0.00 0.00

Increase in U/S Loan 0.00 0.00 0.00 0.00 0.00

Others -(GOVT. Subsidy) 0.00 0.00 0.00 0.00 0.00

Total Application (A) 207.18 47.45 53.60 60.18 67.71

Dispossion of Funds

Pre-op Expenses 0.00 0.00 0.00 0.00 0.00

Increase in Capital Expenditure 165.00 0.00 0.00 25.00 50.00

Decrease in Term Loan 24.00 24.00 24.00 24.00 24.00

Withdrawal 12.00 12.00 15.00 15.00 18.00

Increase in Working Capital 0.00 0.00 0.00 0.00 0.00

Others (specify) 0.00 0.00 0.00 0.00 0.00

Total Dispossion (B) 201.00 36.00 39.00 64.00 92.00

Opening Balance 0.00 6.18 17.62 32.23 28.40

Net Surplus (A-B) 6.18 11.45 14.60 -3.82 -24.29

Closing Balance 6.18 17.62 32.23 28.40 4.11

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

 PROJECTED BALANCE-SHEET

₹ Lacs

I II III IV V
Liabilities

Proprietor's Capital 45.00 51.93 67.86 90.04 121.35

Reserve & Surplus 18.93 27.93 37.18 46.31 55.96

Less Withdrawals 12.00 12.00 15.00 15.00 18.00

Capital in Business 51.93 67.86 90.04 121.35 159.30

Term Loans 96.00 72.00 48.00 24.00 0.00

Bank Borrowing for W.C. 0.00 0.00 0.00 0.00 0.00

Other - (Govt. Subsidy) 0.00 0.00 0.00 0.00 0.00

- Deposit Fr.Relatives 0.00 0.00 0.00 0.00 0.00

Total 147.93 139.86 138.04 145.35 159.30

Assets :

Gross Block 165.00 165.00 165.00 165.00 165.00

Depreciation 23.25 42.76 59.19 73.06 84.81

Net Block 141.75 122.24 105.81 91.94 80.19

Pre-operative Exps 0.00 0.00 0.00 0.00 0.00

Capital WIP 0.00 0.00 0.00 25.00 75.00

Cash & Bank balance 6.18 17.62 32.23 28.40 4.11

147.93 139.86 138.04 145.35 159.30

0.00 0.00 0.00 0.00 0.00

Note: -
Capital WIP denotes proposed Expansion in future. Digitally signed by CA
CA Shreyans Tejpal Shah
DN: cn=CA Shreyans

Shreyans Tejpal Shah, c=AU,

st=Some-State, o=Internet
Widgits Pty Ltd
Tejpal Shah Date: 2016.10.12 22:25:20
+05'30'

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

 INTEREST SCHEDULE

₹ Lacs

PARTICULARS T. LOAN INTEREST

11.50%
BALANCE 120.00

[-] Ist Yr. Installment 24.00 13.80

BALANCE 96.00

[-] IIst Yr. Installment 24.00 11.04

BALANCE 72.00

[-] IIIrd Yr. Installment 24.00 8.28

BALANCE 48.00

[-] IVth Yr. Installment 24.00 5.52

BALANCE 24.00

[-] Vth Yr. Installment 24.00 2.76

BALANCE 0.00

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

 DEPRECIATION SCHEDULE

₹ Lacs

PATICULARS Building Other Assets Machinery Total Depr.

10% 15% 20%

OP.BALANCE 80.00 15.00 65.00

[-] Ist YR. Depr. 8.00 2.25 13.00 23.25

W.D.V. 72.00 12.75 52.00

[-] IInd Yr. Depr. 7.20 1.91 10.40 19.51

W.D.V. 64.80 10.84 41.60

[-] IIIrd YR. Depr. 6.48 1.63 8.32 16.43

W.D.V. 58.32 9.21 33.28

[-] IVnd Yr. Depr. 5.83 1.38 6.66 13.87

WDV 52.49 7.83 26.62

[-] Vnd Yr. Depr. 5.25 1.17 5.32 11.75

WDV 47.24 6.66 21.30

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

 BREAK EVEN POINT ANALYSIS

₹ In Lacs

I II III IV V

Fixed Costs

Depreciation 23.25 19.51 16.43 13.87 11.75

Interest on term loan 13.80 11.04 8.28 5.52 2.76

Wages / Salaries : Fixed : 20 % 0.71 0.79 0.91 1.01 1.17

Utilities : Fixed : 20 % 0.84 0.93 1.02 1.13 1.24

38.60 32.27 26.64 21.53 16.92

Variable Costs

Raw Material & Consumables 0.00 0.00 0.00 0.00 0.00

Power & Fuel 9.15 10.07 11.52 12.67 14.49

Salaries & Wages : Variable : 80% 2.83 3.15 3.63 4.04 4.66

Utilities : Variable : 80% 3.38 3.71 4.09 4.50 4.97

15.36 16.93 19.24 21.21 24.12

Contribution 65.64 72.17 79.75 87.68 96.85

P/V ratio (contribution to sales) 0.81 0.81 0.81 0.81 0.80

Break even sales Rs.Lacs 47.63 39.83 33.07 26.73 21.13

Break Even % 58.81% 44.71% 33.40% 24.55% 17.46%

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah

 RATIO ANALYSIS

₹ In Lacs

Particulars I II III IV V
RATIOS
Sales 81.00 89.10 98.99 108.89 120.98
Growth in Sales 10% 11% 10% 11%
Gross profit Ratio 83.71% 83.67% 83.15% 83.11% 82.57%
PBDIT 64.09 70.46 77.81 85.54 94.45
PBDIT/sales 79.12% 79.08% 78.61% 78.56% 78.07%
Operating Profits/Sales 33.38% 44.79% 53.65% 60.75% 66.08%
PBT/Sales 33.38% 44.79% 53.65% 60.75% 66.08%
PAT/Sales 23.37% 31.35% 37.55% 42.53% 46.25%
Cash Accruals/ Sales 52.07% 53.25% 54.15% 55.27% 55.97%
Sales/Equity 1.56 1.31 1.10 0.90 0.76
Sales / TTA 0.55 0.64 0.72 0.75 0.76
21.53% 15.67% 10.64% 6.45% 2.92%
Interest Coverage (Interest/PBDIT)
PBDIT / Interest (Times) 4.64 6.38 9.40 15.50 34.22
TOL/Equity 1.85 1.06 0.53 0.20 0.00
Current Ratio (CA / CL) 0.26 0.73 1.34 1.18 #DIV/0!
Current Ratio excluding TL
NA NA NA NA NA
Instalments
CA / TTA (%) 4.18% 12.60% 23.35% 19.54% 2.58%
Inentory+Receivables as days of
NA NA NA NA NA
Net Sales
Bank Borrowings/Current Assets NA NA NA NA NA
RM content in sales NA NA NA NA NA
ROCE(PBDIT incl.Other
43.32% 50.38% 56.37% 58.86% 59.29%
income/TTA)

Project Report of Cold Storage, prepared by CA Shreyans Tejpal Shah