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Shree Ashutosh Enterprises Oil Mill Unit

(Cotton Seed Oil Mill Project)

1. PROJECT AT A GLANCE

1. NAME OF THE UNIT : SHREE ASHUTOSH ENTERPRISES


OIL MILL UNIT

2. DISTRICT IN WHICH UNIT WILL : KHANDWA (MP)


BE SITUATED

3. WHETHER THIS IS A BACKWARD AREA : YES

4. PROPOSED LOCATION OF THE UNIT : GRAM SURGAON JOSHI


KHASRA NO 451/2 KHANDWA

5. SIZE OF THE UNIT : SMALL

6. CONSTITUTION : PROPRIETORSHIP

7. MANAGEMENT (PROPRIETOR) : MR. ASHUTOSH AGRAWAL

8. NATURE OF BUSINESS : COTTON SEED OIL MILL PLANT

9. COST OF PROJECT : Rs. 486.20 Lacs

10. REQUIREMENT OF LOAN : Term Loan - Rs. 130.00 Lacs


C C Limit - Rs. 170.00 Lacs
Total Exposure - Rs. 300.00 Lacs

11. PRODUCTION CAPACITY : Cotton Seed Crushing 15000 MT


(PER ANNUM)

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

2. INTRODUCTION

About the Firm :


Shree Ashutosh Enterprises is a successful Proprietorship Concern runned by Shri
Ashutosh Agrawal. He is well versed and has experience of more than 2 decades in
business of Cotton seed and Oil Mill. The Firm took on Lease a running oil mill unit of
Mangal Udyog and was running it successfully from last three years. The Proprietor on
looking at the prospects of Oil Mill business now proposes to establish a Manufacturing
Unit in name of Shree Ashutosh Enterprises Oil Mill Unit and to merge all its existing
business of Shree Ashutosh Enterprises in the new Unit.

The Promoters of the Firm are sons of learned, well known Businessman of Khandwa
(MP) Shri Ganesh Lal Ji Agrawal. The brother of the Proprietor Mr. Vicky Agrawal is also
doing oil mill business since many years. The Cotton Ginning & Pressing Business,
Cotton Merchants, Mill suppliers and Exporters--- is the business which is in the blood
as this business is looked after by their families from decades and from grandfather’s
time.

The Firm was established with the main object of Cotton Seed Crushing & Extraction of
Cotton Seed oil a modern plant for manufacturing of cotton bales, cotton seed oil and
de-oiled cake. The proprietor has Erstwhile firm Shree AShutosh Enterprise in Which
Cotton Seed crushing Mill was taken on lease & was runnning successfully. Now The
Promoter Proposes to establish a Oil Mill unit of 15000 MT annual crushing capacity
near Gram SurgaonJoshi Khasra no. 451/2, Khandwa and bring all his business in the
new Unit under the Proprietorship of Mr. Ashutosh Agrawal.

One of the most optimum vegetable oils, COTTONSEED OIL is highly popular for its
neutral, slightly nutty flavor and extensive applications. It is “naturally hydrogenated”
because of its levels of oleic, palmitic and stearic acids. This makes it stable frying oil
without the need for additional processing or formation of trans-fatty acids. When
grown for oil extraction, cotton is one of the key genetically modified crops grown
around the world, ranking high with soy, corn, and rapeseed (canola).

Edible oil is the major elements of our meals and every person uses of various edible
oils in food every day in one or the other form. Many regions of India are quite
prosperous in respect of the oils seeds - Specially MADHYA PRADESH, There are mainly
two methods of extracting oils from the seeds out of which the firm is adopting
Expelling method .

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

The Project :
In view of Setting up the new unit, the firm proposes to set up a 15000 MT annual
crushing capacity. The Proposed unit is being set up Near Gram SurgaonJoshi Khasra
no. 451/2, Khandwa
The unit will mainly extract Cotton seed oil which is derived from the seeds of various
species of cotton that are grown primarily for their fibers.
The total outlay for the project is estimated to be Rs. 486.20 lacs. Power requirement
for the project will be 115 KVA which would be sourced from MPPKVV. There is no
serious effluent in the industry, man Power requirement for the project is easily
procured as Khandwa and its surrounding areas are vastly populated hence there is no
problem of trained labour. The unit will provide direct & indirect employment to large
number of people.

Location :
The role of location of the unit is also one of the major factor for success of any
industry. The proposed project will be at Gram SurgaonJoshi Khasra no. 451/2,
Khandwa (M.P.)
The biggest advantage of this project is its location The Proposed unit is to be set up in
Khandwa. It is surrounded by Villages with Abundance of Cotton production . So
location is very suitable for the Cottonseed Oil Mill Plant as all the infrastructure
facilities like transportation, electricity and labours are easily available on the site.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

Brief Promoters background:-


Shree Ashutosh Enterprises is registered as a Proprietary firm for carrying the
business of manufacturing of Cotton Seed oil .The Erstwhile firm came into existence on
29th October 2004. The Proprietor of the firm is Shri Ashutosh Agrawal, has an ample of
experience from his Erstwhile Business Unit.

The Profile of the Proprietor is as follows:

Name Mr. Ashutosh Agrawal


Father's Name Mr. Ganeshlal Agrawal
PAN ADAPA0136G
Residential Address 82, Rajendra Bhawan,
Chowk bazar, Burhanpur
(M.P) 450331
Age 42 Years
Qualification B.COM Graduate
Net worth as on 31.03.2016 340.87 lacs
Experience 20 Years

The promoter is from reputed and renowned Family. The family had its interest in
Cotton Seed Oil Manufacturing Industry. Mr. Ashutosh Agrawal son of Mr. Ganeshlal Ji
Agrawal aged 42 years is a Bachelor of commerce graduate. He has shown an excellent
academic performance during the period of Studies.
Mr. Ashutosh Agrawal has more than two decades of experience in the business of
Cotton seed Ginning & oil mill. He is well aware of the Market of Khandwa & nearby
areas he has placed a tremendous contribution in placing the firm to higher
achievements and has been one of the most influential businessman. He Believes in
doing things differently & accepting new challenges. Since taking over his duties the
firm has made improvement for developing new markets & Finally Proposed to set up a
this unit. His Job is to tackle the purchases and maintain relations with Ginners and look
after the Accounts and Financial Management of the Company. He has well established
Networks in the market.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

3. Cotton seed oil products, Its By-Products, Uses & Characteristics:-


(COTTONSEED OIL: THE NEXT ALTERNATIVE EDIBLE OIL)

Cooking oil has a bland, neutral flavour. It is ideal for frying. Cottonseed oil is
recommended for cooking, salad dressings and medicinal Purpose. New refining
technology has made it possible to produce oil products "custom made" to satisfy
almost any commercial need. High quality Cottonseed Cooking oil meets the
requirements of almost any food application imaginable. Blended with other fats and
oils, Cottonseed oil will improve their quality and functionality. Since Cottonseed
cooking oil is naturally stable, hydrogenation is not necessary for most uses.

Inputs:
The Principal raw material for cotton seed oil industry is Cotton & Cotton seed.
Cottonseed Oil is a vegetable oil extracted from the seeds of the cotton plant after the
cotton lint has been removed. The Promoter, Mr Ashutosh Agrawal has a complete
Knowledge and rapport with the Ginners and suppliers of raw materials. Abundant of
cotton is grown in nearby villages of Khandwa district which will ensure sufficient
availability of raw material as and when required.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

Output from Manufacturing:-

Cotton Seed Raw material (Input)

Cotton seed Cotton Seed Cotton Seed


Oil Cake Gad

Main Product By- Products (output)

By- Products:-
 Cotton Seed Cake :
Cotton seed cake is made from cotton seeds after extracting oil from it. Cotton seed cake
is used for animal feedings. which is good source of nutrition .It has long been used as a
highly economic protein concentrated food for animal feeding. Being a great source of
protein, fiber and energy.

 Gad :
Gad is a semi Liquid form of extract from Manufacturing process it is produce as a By
product along with Cotton Seed cake. Generally the ratio of gad is ranges from
0.50-1.00 % .
It is used as a fodder for Animal feedings . The Villagers at outskirts of Khandwa doing
Farming hence there are large number of Buyers available for Gad.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

Uses:-
In India entire cottonseed oil produced is utilized for edible purposes, mostly for
vanaspati, only small quantity (5-10%) is used for manufacturing soaps. Cottonseed oil
can be used in all kinds of food manufacturing applications and can be customized to fit
unique needs. Following are the Uses of Cotton seed oil:-
 Cotton seed oil is use for Foods
 It is use for Cosmetics
 It is use for production of Soaps
 It is use for food products like chips & Salad dressing
 It is also use as Fuel Out of India.

Few Steps to prevent contamination:-


 Heap of cotton seed is under shed which is made up of RCC plant.
 Engage extra labours to remove contaminants from seed cotton.
 Provide all workers with cotton clothing to wear & cap to cover head (Reduces
hairiness problem)
 Handle all material such as seed, by Products and other related products used in
Manufacturing Process with care.
 Maintain proper setting of machine to avoid seed cut, fiber breakage.
 Adhesive label are used for labeling.

Our Extra Care


 Provide rubbish bin & spittoons in factory premises
 Quality awareness board displays at various places in compound and ginning
house.
 Disposal of Trash & Contamination regularly
 Awareness of quality culture among workers through training

Scientific and nutritional characteristics of cotton seed Oil -

 Cottonseed oil has a 2:1 ratio of polyunsaturated to saturated fatty acids. Its fatty
acid profile generally consists of ≈ 70% unsaturated fatty acids ( 18% mono,
52% polyunsaturated) and 26% saturated fats.
 Cottonseed oil's light, non-oily consistency and high smoke point make it most
desirable for cooking "stir fry" and other oriental dishes .

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

4. Market Scenario & Market Potential of the Product

There is evergreen demand for oil, Because every households and hotel uses the oil
every day in food items like curries and biryanies etc. Since it is a consumer product,
the market is growing at 10-15% per annum.

Marketing is deciding what to do to meet customers’ needs and how to make a product
more competitive. Selling is the action that results in a customer buying a product

Good marketing paves the way for successful selling by making a customer ready to buy
a product.

'Seeing your product as your customers see it and doing something about it to make
more money'

One of the first activities when planning an oil processing business is to decide who will
be the target customers. A Market segment is a term that describes an identifiable
group of customers. The different types of market segments for Cotton seed oils can be
described in five main groups :-

1. Retail

2. Institutional

3. Food service

4. Food businesses.

5. Wholesale Businesses.

Cottonseed crushing industry has made continuous progress in the country. The
growing shortage of other edible oils in the country during the Eighties and nineties
gave a greater impetus to increased use of cottonseed for oil extraction and since then
the demand for it has increased to a larger extent.

The by-product of the proposed plant is expeller cake which is used for animal feed.
Cotton plant is cultivated mainly for fiber and its seed are a rich source of protein and
edible oil. Cottonseed oil has many applications varying from medicinal to technical
purposes. The other uses are for cosmetic creams, glycerol, lubricants, soap stocks, etc.
The oil cake can be used as animal feed, filler for plastics & fertilizer ingredient. India is
one of the largest producer of oil seeds and oil bearing materials and both edible and
non-edible oil in the world.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

The firm Extracts Crude Oil from the seeds, which is not edible. Refining Industries
Purchase such Crude Oil, Refine such oil, make it edible.

A strategic Marketing process is depicted as below:-

1. Identify customer group(s)

2. Learn what they want and what you can make

3. Make the Product to meet their needs, 5. Keep Improving


better than competitors

4. Tell customers about it

The promoter has good relations with the Suppliers & Buyers and has already market
available with his contact network of last 20 years.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

5. Our Vision & Mission

Vision :

 To be the supplier of choice in every industry we serve.


 To be the most respected Firm around the Area.
 Setting industry standards for highest quality and most efficient Oil We
Provide.

Mission :

 To attract and attain customers through high quality, on time, competitively


priced Oil
 the most satisfying ownership experience, Develop and maintain a supplier /
customer relationship based on open communication, mutual trust and respect.
 To offer value to our customers by providing them with high quality products
through innovation and commitment.
 To develop a highly motivated team.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

6. Our Core Values

 Quality : Strive for Continuous quality improvements with the Products


produce by us. we are committed to providing superior service with highest
quality workmenship.

 Integrity : Honouring Commitments made to our costumers in our daily


activities. creating an environment where personal responsibility is achieved
in all aspects of the business through fairness and respects.

 Leadership : We will maintain overall leadership position by adopting top most


cotton seed oil producing industry with operational efficiency and continuous
efforts.

 Professionalism : We undertake to perform our duties and produce our outputs


to the best of our ability, with optimum utilization of available resources and
with a focus on continuously improving quality, productivity and professional
development.

 Accountability : we believe in accepting and the consequences, and taking


ownership while achieving common goals, teamwork and collaborative
decision making.

 Customer satisfaction : Being Proactive, Innovative and flexible in creating


processes and plans to meet or exceed customer expectations. Understanding
our customer's requirements and delivering it continuously.

 Responsiveness : We Endeavour to provide high quality information and


services to our stakeholders within reasonable time frame.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

7. MANUFACTURING PROCESS

The Unit Proposes to set up a Oil mill unit with a crushing capacity of 15000 MT
annually at 60% to 65% at Starting then Increasing upto full capacity Utilization. The
yield of which will be 9% of cotton seed oil, 88% of cotton seed oil cake & oil gad of 1%
(Appx.) The Brief of manufacturing Methods of the product is as under-

Expelling Method :

Expeller is used to extract oil out of Cotton seeds. Expellers of varying capacity are
available in markets with different extraction capacities. Filter press is used for filtering
the oil extracted out of oil seeds, the use of filter press would be very relevant during
the whole process.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

Salient features of Oil Expeller Machine:-


 Oil Expeller Chamber cage opens on hinges simply by tilting of chamber halves.
Ease of maintenance.

 Thickness of cake can be changed while running of oil expeller. This is unique
facility. It enable to find and adjust cone at the point of optimum.

 Oil pump is now integral part of the oil expeller


and hence no separate pump required.

 No foundation is require as foundation frame is


supplied. So installation of oil mill is quicker
and faster. Also you can shift the machine from
one place to another as and when required.

 6 tapper roller bearing make oil expeller very


sturdy and durable. No ball bearing fitted any
where.

 As oil expeller is very compact, it is economical to import by road freight.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

Following chart explains Process of Extracting Cotton seed oil with necessary
machinery presentation:

Raw Material
(Cotton Seed)

Seed
Cleaning

Cleaned Seeds Impurities

Process of Expelling

Crude Oil Cotton Seed


Cake

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

8. ATTRACTIVENESS OF THE PROJECT


 High Profitability
 Excellent Growth potentiality
 Ready Market.
 Short generation and quick returns
 Employment potentiality
 Government incentives
 Experience of Proprietor
 Already setup Group concern entity

9. IMPORTANCE OF COTTON SEED OIL

 Madhya Pradesh is the larger producer of required raw materials for the unit of
oil seeds.
 Presence of 11 out of 18 Agro Climatic zones of India, 5 crop zones and 4 soil
types will suit production of almost any crop.
 Established diversified crops - for cotton so that it will made sufficiency in
availability of Cotton seed.
 Wider combination of soil type, rainfall, sun light, and temperature to suit new
crops
 Competitive landscape of the major manufacturers of edible oil in Madhya
Pradesh region.
 Future outlook and projections of the India Edible Oil Industry- Cottonseed Oil on
the basis of revenues in the India.
 Public health advisories promote cottonseed oil as a "healthy".
 It is low in cholesterol which makes it a great choice for those who want to lower
their cholesterol levels.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

10. BENEFITS OF THE PROJECT

The Erstwhile Business experience benefits in setting up & Smoothly running the new
unit, along with it to set up a unit of oil producing has its own advantage due to its
location, Khandwa is a district surrounded by various villages where main business of
the people there is only farming and cattle feeding such environment and easy
availability of Raw material will enhance the capacity of the firm for Production. There
are various other Benefits of setting up a oil mill industry is depicted below:-

 It encourages rural development as wealth and self-employment jobs are


generated in villages.
 It saves transport expenses for carrying oilseeds to cities and bringing oil from
cities.
 Costly packing expenses can be saved because of refilling can be done.
 It gives pure, fresh natural oil available to villagers from their own oilseeds job
work basis so villagers get oil at most competitive rates. It minimizes the
incidence of tax and scope of adulteration.
 Selling directly to consumers eliminate maximizes profit to oil miller.
 It encourages animal husbandry by making oilcake available as best cattle feed.
It increases milk production considerably because of residual oil in cake.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

11. PROJECTS DYNAMICS AND TECHNICAL DETAILS

I. Scope of the project :


It is Proposed to set up a oil mill unit , which will be located in Khandwa District
of Madhya Pradesh.
The Project envisages:
Manufacturing of (1)Cotton seed Wash oil & (2) Cotton seed cake as a By-
product, of 50 Tons Crushing Capacity daily.
There are various Oil mill units in the state of Madhya Pradesh which will help in
good competitive environment.

II. Location and Site :

The Proposed project will be at Khasra No. 451/2 Gram Surgaon joshi, Khandwa
(M.P) and its office will be Situated at Kailash Gin Indore road, Khandwa (M.P)

Land Is taken on lease, covering an area of 5 Acre with Rs 150 lacs of cost.

III. Plant & Machinery :


The main Plant & Machinery required for the project will be Oil cake expeller &
Refinery which will help in Expelling pure Cotton seed from Impure cotton
seeds & Purifying the Crude oil so that it can become refined and sealable and
redlar chain which will carry the product & Tranfer from one location of Unit to
other.
There are various other Fixed assets which is forecasted at the factory site like:
1. Oil Tank Wash oil
2. Oil Tank Crude oil
3. Cotton seed feeding system
4. Cotton Seed redlar chain
5. Oil nutralieser
6. Oil Circulation Pipelines fitting

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

IV. Buildings :

Firm will have buildings at factory & At Office the description of them are
depicted below:-
Godown Building Will be build up in 1126.56Sqm. with a total cost of Rs
49,88,000

Office building will be build up in 42.75 Sqm. with a total cost of Rs 4,65,000

in this way firm will will be having other Buildings as well. i.e Cotton seed
platform covering a area of 2439.59 Sqm. consisting total cost of Rs 24,75,000.

In this way firm Proposes to Builtup up to Rs 110.99 Lacs.

firm has a plan of building the infrastructure with the help of other residue
structures Given below is the description :
1. Cotton Seed Drying Platform
2. Tin Shed
3. Stairs
4. Labour Room
5. Barbet Wire fencing with gate
6. WBM Road
7. Land levelling
8. Weigh bridge

V. Furniture & Fixtures :

Mr. Ashutosh Agrawal has projected the plan with full furnished facilities so that
it will increase the attractiveness of the building, there are various quotations
have been received by the firm for the Purchase of Various Furnitures like :

Office table, Chair, Almirah, Computer & printers.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

VI. Utilities :

 Power :

The Entity has applied to M.P.P.K.V.V. for a new H.T. Connection of 115
KVA . The Pre decided plan for the project regarding to the Electricity will
be as follows :

No. of Units per hour : 100 Unit

Rate per unit : Rs 6 per unit

N. of Shifts unit will work : 2 Shifts of 12 hours each

Total Capital cost of : Rs 26 Lacs (Appx.)


electrical installation

The Firm's power requirement will be with this connection, round the
clock without any disruption for the working shifts.

 Water Supply :

Water requirement is a major source for any project it will required


continuously therefore water is proposed to be met from a borewell
which will be dug in the area near factory premise.

 Raw material Availability :

Cotton seed is available through out India it is mainly available from


Maharashtra , Madhya Pradesh, South and other cotton producing states
of India

 Labour Supply :
labours are easily available in Khandwa and nearby areas. The Project
won't face any deficiency of manpower, the major part of the activity
mainly engages machinery, labour only required to operate the
machinery.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

 Transport Facility :
There are many transport firms in khandwa which will provide
convenient & Superior transport facilities. Transport is easily available in
Khandwa due to competition in this field. They provides very good
facilities from Khandwa to all over the world.

VII. Buyers & Suppliers for the product :


 Suppliers of Cotton Seeds :
 Ramdayal laduram khandwa
 Jagdamba bodwad
 RM industry mahora
 And many suppliers from maharashtra , south and all over india

 Buyers of Cotton seed Wash oil :


 Tirupati protiens Ahemdabad
 MG oils Fatepur
 And Various others.

 Buyers of Cotton seed Cake :


 Agrawal trading co. Malpura (Raj)
 Shiv trading co. Palsana
 Sanjay Nitin Niwai
 Shivariya Tok

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

12. STATUTORY REGISTRATION REQUIRED

 VAT & CST registration


 Factory License
 DTIC registration (MSME)
 NOC from Appropriate Authority
 Sanctioned plan of Building
 Diversion order of Land
 Registration with electricity Board

13. GOVERNMENT ASSISTANCE


Government is also encouraging the Oil Mill Industry by giving incentives to the
manufacturers. The Indian Government has offered various incentives for
implementation of the Oil Mill Plants to the entrepreneurs. Some of the highlights of the
incentives offered by the Indian Government for Oil Mill Plants are:

 Capital Subsidy :-

Capital Subsidy Scheme is available for Establishing new firm or Modernization


or Technical improvisation of Agrobased Industries. The project is eligible for
the capital subsidy. the subsidy scheme falls under M.P. Industrial Promotion
Policy, 2014.
The aforementioned subsidy is available on minimum Investment of Rs 25 cr in
Plant & Machinery and Buildings. Subsidy will be 25% of the Investment in Plant
& Machinery and Buildings subject to Rs 2.5 Cr.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

 VAT/CST (GST) Subsidy :-

Apart from SFAC Venture Capital assistance, the project is also eligible for
VAT/CST (GST) subsidy from Madhya Pradesh Government under MP Industrial
Promotion Policy, 2014 Subsidy Scheme.

Subsidy will be available for 10 years from the date of commencement of


business. It will be of 100% of VAT/CST amount deposited to government
subject to 200% of the Investment.

 Electricity Duty Exemption : -

Shree Ashutosh Enterprises is also exempt from paying electricity duty upto a
period of 5 years for taking a HT Connection by any DISCOM. Entity is also a HT
Connection consumer. Subsidy falls under MP Industrial Promotion Policy, 2014.

 State Interest Subsidy :-

Under the same M.P. Industrial promotion Policy, 2014. Subsidy on Interest of
Term loan is available @ 5% of Interest with an annual ceiling of Rs 4 Lacs for 7
years.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

14. Financing Activity


The Firm Proposes to Finance the project through a mix of equity debt. The Capital of
Rs. 150.00 Lacs will be brought by the Promoters, Firm will get a State Capital Subsidy
of Rs 15.00 Lacs. The other short term borrowings will be taken from the proprietor &
relatives.

The Firm Proposes the following credit facilities :

Present Term Loan : Sanction of Fresh Term Loan of Rs 130.00 lacs.


Proposal : Working Capital :working capital facility in form of CC (Hyp- Stock &
BD) to Rs. 170 Lacs.
Purpose : Term Loan : construction of Factory Shed and purchase of plant and
machinery
Cash Credit : Working Capital
Tenor : Term Loan : Repayable in 7 years
Working Capital : 12 Months
Repayment : Term Loan : 84 monthly Installments of Rs. 1.55 Las each (interest to
be served monthly as and when due)
Working Capital : on Demand

Key Performance Indicators of the Project :-

S
no. Particulars Ratio

1 Debt Service Coverage Ratio 2.90


DSCR Max 3.82
DSCR Min 2.22

2 PBIT Margin 5.49%

3 Operating Profit Margin 6.50%

4 Return on Capital Employed 5.50%

5 Project IRR 4.05%

6 Break Even Point 42.21%

7 Cash Break Even Point 951.22

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

Following is the forecasted Sources & Applications of the funds :-

I. Sources of Funds :

Amount to be Type of Repayment Moratoriu Repayment


Borrowed Borrowing period m Period MTLY/QTLY/H
LY

Rs 130.00 Lacs Term Loan 84 Monthly 1 Month Monthly


Installment

Rs. 170.00 Lacs C C Limit Repayable - Within 1 year


On demand

Rs. 36.20 Lacs Quasi Equity (Short term borrowings from relatives & Others)

Rs. 150.00 Lacs From Owners Capital & Reserves and State Capital Subsidy

II. Application of Funds :

 Investment in Fixed Assets :


Particular Amount in Lacs.

1. OIL MILL EXPELLER 25.02


2. OIL MILL PLANT AND OTHER ACCESSORIES 17.51
3. CONTROL PANEL 02.30
4. ELECTRICAL MOTORS 05.19
5. HT INSTALLATION CONNECTION 26.00

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

 Investment in Land & Buildings

Buildings :
S.No. Particular Built up Area Amount in Lacs
(Sqmt.)
1. GODOWNS 1126.56 49.88

2. OFFICE 42.75 04.65


3. LABOUR ROOM & LABOUR TOILET 75.04 04.66
4. TIN SHED 371.74 08.00
5. DRYING PLATFORM 2439.59 24.75
6. BARBET WIRE FENCING WITH GATE 1006.09 Rmt. 06.60
7. WBM ROAD 04.85
8. WEIGH BRIDGE 07.00
9. LAND LEVELLING 00.60

 Forecast of Employees Cost


Forecasted for year 2016-17

S.No. Designation Nos. Pay Per Month Amount yearly


In Lacs

(a) Factory Personnel (For Two Shifts of 8Hrs)

1 MANAGER 1 10000/- 01.20

2 PRODUCTION SUPERVISOR 1 8000/- 00.96

3 FEETAR 2 10000/- 02.40

4 OIL MAN 2 8000/- 01.92

(b) Administrative & Sales Personnel :-

1 ACCOUNTANT 1 8000/- 00.96

2 OFFICE INCHARGE 1 6000/- 00.72

3 OFFICE BOY 1 4000/- 00.48

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

 Forecast for Administrative Expenses


Forecasted for year 2016-17

Particulars Amount in Lacs

Postage, Telegram, Mobile, Telephone 00.12

Travelling & Conveyance Expenses 00.25

Printing & Stationary 00.10

Other Misc Expenses 00.25

Rent, Rates & Taxes 00.25

 Forecast for Selling Expenses


Forecasted for year 2016-17

Particulars Amount in Lacs

Commission & Discount 01.14

Other Sales Expense 01.39

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

15. Primary and collateral security & Guarantees


Primary  Hypothecation of Entire current assets of the firm Including Stock & Debtor.
 Hypothecation of Fixed Assets acquiring for the New Unit.
Collateral S.No. Property Owned by Estimated fair
Market Value
in Rs. (Lacs)
1. Land at Village Bawadiyakaji , Smt. Kirti Agrawal
Khasra no. 328, Rajasav W/o Shri varun
Nirikshak mandal-2, Dist. Agrawal
Khandwa.
2. Land at Village Bawadiyakaji , Smt. Kirti Agrawal
Rs.250.00 Lacs
Khasra no. 329/1, 330/1, W/o Shri varun
329/2, & 330/2 Rajasav Agrawal
Nirikshak mandal-2, Dist.
Khandwa.

3. Land at Village Surgaon Joshi , Smt. Geeta devi Rs.150.00 Lacs


Khasra no. 451/2, Dist. Agrawal W/o Shri
Khandwa. Ganeshlal Ji Agrawal

Total
Rs 400.00 Lacs
Guarantee Personal Guarantee of :
 Shree Ashutosh Agrawal (Proprietor)
 Smt. Kirti Agrawal (Guarantor)
 Smt. Geeta Devi Agrawal (Guarantor)

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

16. SWOT of the project


Strengths :

 Very strong entrepreneurial base. Promoters have vast experience in the


Cotton Seed Oil Manufacturing Industry; they have in- depth knowledge and
wider reach.
 Skilled & Semi-skilled Labour and the technicians are locally available as
Khandwa & its outerskirts is a known for Cotton Industry.
 Project has selected the best indigenous machines available to produce
quality products of international standards.
 Madhya Pradesh is large producer of required raw materials for the unit viz.
oilseeds. Khargone & Sendhwa region in southern Madhya Pradesh are large
producer of cottonseed.
 The Business group is a profit making concern since its inception.
 The unit has been set up with an adequate space and with all necessary
facilities including easy availability of raw materials and transport.
 The business group has good reputation in the market.
 Wide geographical reach mitigates geographical concentration risks.
 Management depth and ability to manage client relationship in domestic
market.

Weaknesses :

 The main risk is cotton, it is a agricultural product and its production is


completely dependent upon rainfall & weather conditions.
 Abnormal variations in the prices.
 Damage of Cotton seeds in Open area under sunlight for longer time.

Opportunities :

 The demand for the proposed products is increasing day by day because of
the improvement in the Standard of living of the people. This will push up
the prices which will ultimately have a positive impact on the profitability of
the company.
 Highly supportive government policy regime.

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Shree Ashutosh Enterprises Oil Mill Unit
(Cotton Seed Oil Mill Project)

Threats :

 Government’s policies of raw cotton export / import also affect its


availability and prices.
 Similarly various political and international factors have bearing on the
cotton prices. It may at time effect adversely the profitability of the firm.
 High cost of raw materials and decline in the purchasing power of people
due to high inflation.

Conclusion: Dealing with competitors -

The actions of competitors are critical to the success of an oil processing business. If a
new producer starts up in business, it is unlikely that the competitors will do nothing:
for example, they may react by offering loyalty bonuses to retailers who continue to
promote their products, or introducing special offers, reduced prices, or increased
promotion. An oil producer should therefore be constantly aware of the changes that
competitors make to their businesses in response to his or her actions and take steps to
deal with the changes as they occur. Oil processors should recognize that there are
different types of competitors: producers that make different kinds of oil are known as
type competitors, whereas different manufacturers of the same type of oil are brand
competitors. The strategy for dealing with competitors is different in each case.

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