Model Detailed Project Report

NOODLES MANUFACTURING UNIT

Prepared by

National Institute of Food Technology

Entrepreneurship and Management(NIFTEM)
Plot No. 97, Sector 56, HSIIDC, Industrial Estate, Kundli,
Sonipat, Haryana 131028
Ministry of Food Processing Industries, Government of India
1. INTRODUCTION

NOODLE MANUFACTURING UNIT

Noodles are a type of food, made from unleavened dough which is rolled flat
and cut, or extruded, into long strips or strings. Noodles can be refrigerated
for short-term storage or dried and stored for future use. Noodles are a form
of pasta that is becoming extremely popular in India even as Continental and
Italian delicacy. Ready to eat Noodles are prepared by means of an extrusion
machine that is basically made of an stainless steel make strips, either
flat(rolled and Cut ) or Oval round(Extruded). The process is quite simple
and requires not much skilled labour. The machine itself is high technology
and provides the manufacturers to produce noodles with several alternatives
materials (like Maida, Suji, Rava, Rice flour etc.) These products can be
described as Hard, Brittle pieces, formed into different shapes by extruding,
cutting and drying tough dough made from semolina or farina mixed with
water.
Noodles are unleavened dough which is stretched, rolled fat or extruded and
cut into one of variety of shapes. This is the perfect snacks for the young
generation.

2. MARKET POTENTIAL:

Ready to eat noodles are making a niche for itself based on its popularity for
being tasty, nutritious, and quick to make. Although many would differ with
the marketing strategy of noodles on the grounds of nutrition, the market has
never kept itself away from such promotional campaigns.

According to the report “Noodles Market Analysis & Forecast in India, 2018
to 2023: Projecting a CAGR of Approx. 5.6%”The noodles market in India
was valued at INR 93.66 Billion in 2017, Following this, most companies
focused on launching healthier versions of noodles using vegetables, atta,
and oats. A large part of the population comes from the middle or lower-
middle class. Therefore, price sensitivity plays a significant role in hindering
the growth of the noodles industry across the country. Most people in rural
areas are unaware of the various brands that are available unless they see
them at their local store. Hence, lack of a well-established distribution
network acts as a challenge for the noodles market in India.

3. PRODUCT DESCRIPTION

3.1 PRODUCT USES

Despite being relatively low in some nutrients like fiber and protein, noodles
contain several micronutrients, including iron, manganese, folate and B
vitamins. Some noodles are also fortified with additional nutrients.
  Nutrition content: Basically, noodles are made up of salt, wheat flour
and water. The micro nutrients differ according to various brands of
instant noodles. Withal, noodles have low calories, protein, fiber,
mineral and vitamins.
 Essential nutrients: Some noodles provide essential nutrients to the
body. The nutrients in noodles differ according to brands. Some brands
include manganese and Vitamin B complex such as thiamine and
riboflavin. Literally the study shows that more than 6000 instant noodle
consumers showed 31% and 16% greater intake of thiamine and
riboflavin respectively.
 Low carbs: Rice noodles offers 44 grams of carbs per cup. It has higher
glycemic index which means body breaks it down into sugar quickly.
 Full for longer: One bowl of noodles keeps one full for longer time
period as it takes time to get digested.

3.2 Raw Material

The main ingredients used in dried noodles are wheat flour, palm oil, and
salt. Common ingredients in the flavouring powder are salt, monosodium
glutamate, seasoning, and sugar.

Durum Wheat Semolina/wheat Flour (cost per KG) = Rs. 25

3.3 MANUFACTURING PROCESS

Noodles manufacturing attracts following steps.

Dry Mixing

The average moisture content of dry mixes is 10-11%. First of all, you must
blend the three ingredients maida, starch, and soda bicarbonate in a vertical
mixer. Additionally, you will need to mix the edible color.

Dough Formation

You can make satisfactory dough with the above blend only by using boiled
water. You will find a gelatine form of the starch here. Then mix the
ingredients in the dough mixer for about 12 to 15 minutes.

Extrusion

Then transfer the kneaded dough to the noodles making machine. From here
you can produce extruded material of desired shape and length. However,
you must use an appropriate type of die. Adjust the distance between the
dye surface and cutting blade. The moisture content of the product at this
stage is about 33%.

Pre-drying

Then the cut noodles go from the cutting machine fall on wooden trays. The
product undergoes surface drying and becomes sufficiently hard enough to
handle without sticking or being crushed. The moisture content of the pre-
dried product is about 29.5%.

Drying

Now the moisture content of the product is 17%. The final stage is steaming.
After proper steaming, you can get a quality product that has longer shelf-
life. The steamed and subsequently dried product has a
moisture content of about 10%.
Noodle is a consumer durable processed food product. Therefore, it
demands to establish proper distribution channel, brand awareness, and
sales promotion activity. Noodles manufacturing is highly profitable business
as far as revenue is concerned.

Technical Process Flow Chart

Step 2
• Pour raw • Maintain the
material into the temperature &
hopper. • Fed wheat Flour Mix The batter
into the online for 15-20
& add water minutes.
accordingly.
Step1 Step 3

Step 5
•Dry the Noodle with • Pour the mixture
the help of static dryer into Noodle
and packaging. • Shape the
•After that Noodle with the extruder &
transportation of help of moulds control its speed.
goods.

Step6 Step 4
4. PROJECT COMPONENTS

4.1 Land

Land required 1000-1200 square feet approx.

Approximate rent for the same is Rs.20000-25000 per month.

4.2 Plant & Machinery

Machine Item Description Image

Batch Mixer A vessel and mixing system

used to prepare treatment
fluids

Noodles Machine This machine is used for

(10 Roller) Noodle manufacturing
machine.
 Steamer Streamer is used for
partially cooking the
fresh noodles with either
saturated or
unsaturated steam before
they are marketed.

Static Dryer Used for drying the

steamed Noodles.

Note: cost of the machinery is approx. Rs. 7,50,000 excluding GST and other
transportation cost.

4.3 Misc. Assets

S.N. Item Description Rate

1 electricity connection 50,000

2 Storage tank, collection tank etc. 20,000

3 Furniture and equipment’s 50,000

4.4 Power Requirement

The borrower shall require power load of 20 KW which shall be applied with
Power Corporation. However, for standby power arrangement the borrower
shall also purchase DG Set.

4.5 Manpower Requirement

7-8 Manpower are required for the Noodles manufacturing unit.

Includes:

2 Skilled Labour

2-3 Unskilled Labour

2 Helper

1 Accountant
5. FINANCIALS

5.1 Cost of Project

COST OF PROJECT
(in Lacs)

Own Bank
PARTICULARS AMOUNT Contribution Finance

25.00% 75.00%
Land & Building Owned /rented
Plant & Machinery 7.50 1.88 5.63

Furniture & Fixtures and Other Assets 1.20 0.30 0.90

Working capital 4.00 1.00 3.00

Total 12.70 3.18 9.53

5.2 Means of Finance

MEANS OF FINANCE

PARTICULARS AMOUNT

Own Contribution 3.18

Bank Loan 6.53

Working capital Limit 3.00

Total 12.70
5.3 Projected Balance Sheet

(in Lacs)
PROJECTED BALANCE SHEET

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year

Liabilities

Capital

opening balance 3.89 5.15 6.44 7.52

Add:- Own Capital 3.18

Add:- Retained Profit 2.22 3.75 5.79 8.08 10.75

Less:- Drawings 1.50 2.50 4.50 7.00 9.00

Closing Balance 3.89 5.15 6.44 7.52 9.27

Term Loan 5.80 4.35 2.90 1.45 -

Working Capital Limit 3.00 3.00 3.00 3.00 3.00

Sundry Creditors 1.08 1.27 1.47 1.68 1.92

Provisions & Other Liab 0.50 0.63 0.75 0.90 1.08

TOTAL : 14.27 14.39 14.56 14.55 15.27

Assets

Fixed Assets ( Gross) 8.70 8.70 8.70 8.70 8.70

Gross Dep. 1.25 2.31 3.22 4.00 4.66

Net Fixed Assets 7.46 6.39 5.48 4.70 4.04

Current Assets

Sundry Debtors 2.13 2.54 2.92 3.32 3.74

Stock in Hand 3.57 4.16 4.77 5.41 6.07

Cash and Bank 1.12 1.29 1.39 1.13 1.41

TOTAL : 14.27 14.39 14.56 14.55 15.27

5.4 Projected Cash Flow
(in Lacs)
PROJECTED CASH FLOW STATEMENT

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year

SOURCES OF FUND

Own Margin 3.18

Net Profit 2.22 3.75 5.88 8.44 11.42

Depriciation & Exp. W/off 1.25 1.06 0.91 0.78 0.67

Increase in Cash Credit 3.00 - - - -

Increase In Term Loan 6.53 - - - -

Increase in Creditors 1.08 0.19 0.20 0.22 0.23

Increase in Provisions & Oth lib 0.50 0.13 0.13 0.15 0.18

TOTAL : 17.74 5.13 7.12 9.58 12.50

APPLICATION OF FUND

Increase in Fixed Assets 8.70

Increase in Stock 3.57 0.59 0.61 0.64 0.67

Increase in Debtors 2.13 0.42 0.38 0.40 0.42

Repayment of Term Loan 0.73 1.45 1.45 1.45 1.45

Drawings 1.50 2.50 4.50 7.00 9.00

Taxation - - 0.09 0.36 0.67

TOTAL : 16.62 4.96 7.02 9.84 12.21

Opening Cash & Bank Balance - 1.12 1.29 1.39 1.13

Add : Surplus 1.12 0.17 0.10 (0.26) 0.29

Closing Cash & Bank Balance 1.12 1.29 1.39 1.13 1.41
5.5 Projected Profitability
(in Lacs)
PROJECTED PROFITABILITY STATEMENT

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year

Capacity Utilisation % 50% 55% 60% 65% 70%

SALES

Gross Sale

Noodles 63.80 76.33 87.60 99.58 112.29

Total 63.80 76.33 87.60 99.58 112.29

COST OF SALES

Raw Material Consumed 36.00 42.24 48.96 56.16 63.84

Electricity Expenses 4.80 5.52 6.35 7.30 8.03

Depreciation 1.25 1.06 0.91 0.78 0.67

Wages & labour 5.64 6.20 6.82 7.51 8.26

Repair & maintenance 2.23 2.67 3.07 3.49 2.81

consumables 3.19 3.82 3.50 2.69 2.81

Cost of Production 53.11 61.52 69.61 77.92 86.41

Add: Opening Stock /WIP - 1.77 2.05 2.32 2.60

Less: Closing Stock /WIP 1.77 2.05 2.32 2.60 2.88

Cost of Sales 51.34 61.24 69.34 77.64 86.13

GROSS PROFIT 12.46 15.09 18.25 21.94 26.17

Salary to Staff 3.72 4.09 4.50 4.95 5.45

Interest on Term Loan 0.64 0.56 0.41 0.25 0.09

Interest on working Capital 0.33 0.33 0.33 0.33 0.33

Rent 3.00 3.30 3.63 3.99 4.39

selling & adm exp 2.55 3.05 3.50 3.98 4.49

TOTAL 10.24 11.34 12.37 13.50 14.75

NET PROFIT 2.22 3.75 5.88 8.44 11.42

Taxation 0.09 0.36 0.67

PROFIT (After Tax) 2.22 3.75 5.79 8.08 10.75

5.6 Production and Yield

COMPUTATION OF PRODUCTION OF NOODLES

Items to be Manufactured

Noodles

machine capacity 200 KG per Hour

Operational capacity Taken 100 KG per hour

Total working Hours 8

machine capacity per day 800 KG

working days in a month 25 Days

working days per annum 300

machine capacity per annum 240000 KG

Production of Noodles
Production Capacity KG
1st year 50% 120,000
2nd year 55% 132,000
3rd year 60% 144,000
4th year 65% 156,000
5th year 70% 168,000
Raw Material Cost
Year Capacity Rate Amount

Utilisation (per KG) (Rs. in lacs)

1st year 50% 30.00 36.00

2nd year 55% 32.00 42.24

3rd year 60% 34.00 48.96

4th year 65% 36.00 56.16

5th year 70% 38.00 63.84

5.7 Sales Revenue

COMPUTATION OF SALE

Particulars 1st year 2nd year 3rd year 4th year 5th year

Op Stock - 4,000 4,400 4,800 5,200

Production 120,000 132,000 144,000 156,000 168,000

Less : Closing Stock 4,000 4,400 4,800 5,200 5,600

Net Sale 116,000 131,600 143,600 155,600 167,600

sale price per KG 55.00 58.00 61.00 64.00 67.00

Sales (in Lacs) 63.80 76.33 87.60 99.58 112.29

5.8 Working Capital Assessment
(in Lacs)
COMPUTATION OF CLOSING STOCK & WORKING CAPITAL
PARTICULARS 1st year 2nd year 3rd year 4th year 5th year

Finished Goods

1.77 2.05 2.32 2.60 2.88

Raw Material

1.80 2.11 2.45 2.81 3.19

Closing Stock 3.57 4.16 4.77 5.41 6.07

COMPUTATION OF WORKING CAPITAL REQUIREMENT

TRADITIONAL METHOD (in Lacs)

Particulars Amount Own Margin Bank Finance

Finished Goods & Raw Material 3.57

Less : Creditors 1.08

Paid stock 2.49 25% 0.62 75% 1.87

Sundry Debtors 2.13 25% 0.53 75% 1.60

4.62 1.15 3.46

WORKING CAPITAL LIMIT DEMAND ( from Bank) 3.00

5.9 Power, Salary & Wages Calculation

Utility Charges (per month)

Particulars value Description
Power connection required 20 KWH
consumption per day 160 units
Consumption per month 4,000 units
Rate per Unit 10 Rs.
power Bill per month 40,000 Rs.

BREAK UP OF LABOUR CHARGES

Particulars Wages No of Total

Rs. per Month Employees Salary

Skilled (in thousand rupees) 14,000 2 28,000

Unskilled (in thousand rupees) 9,500 2 19,000

Total salary per month 47,000

Total annual labour charges (in lacs) 5.64

BREAK UP OF Staff Salary CHARGES

Particulars Salary No of Total

Rs. per Month Employees Salary

helper 7,000 2 14,000

Accountant 17,000 1 17,000

Total salary per month 31,000

Total annual Staff charges (in lacs) 3.72

5.10 Depreciation
(in Lacs)
COMPUTATION OF DEPRECIATION
Description Plant & Machinery Furniture TOTAL

Rate of Depreciation 15.00% 10.00%

Opening Balance - - -

Addition 7.50 1.20 8.70

Total 7.50 1.20 8.70

Less : Depreciation 1.13 0.12 1.25

WDV at end of Year 6.38 1.08 7.46

Additions During The Year - - -

Total 6.38 1.08 7.46

Less : Depreciation 0.96 0.11 1.06

WDV at end of Year 5.42 0.97 6.39

Additions During The Year - - -

Total 5.42 0.97 6.39

Less : Depreciation 0.81 0.10 0.91

WDV at end of Year 4.61 0.87 5.48

Additions During The Year - - -

Total 4.61 0.87 5.48

Less : Depreciation 0.69 0.09 0.78

WDV at end of Year 3.92 0.79 4.70

Additions During The Year - - -

Total 3.92 0.79 4.70

Less : Depreciation 0.59 0.08 0.67

WDV at end of Year 3.33 0.71 4.04

5.11 Repayment schedule

REPAYMENT SCHEDULE OF TERM LOAN

Interest 11.00%
Closing
Year Particulars Amount Addition Total Interest Repayment Balance
ist Opening Balance
1st month - 6.53 6.53 - - 6.53
2nd month 6.53 - 6.53 0.06 - 6.53
3rd month 6.53 - 6.53 0.06 - 6.53
4th month 6.53 - 6.53 0.06 6.53
5th month 6.53 - 6.53 0.06 6.53
6th month 6.53 - 6.53 0.06 6.53
7th month 6.53 - 6.53 0.06 0.12 6.40
8th month 6.40 - 6.40 0.06 0.12 6.28
9th month 6.28 - 6.28 0.06 0.12 6.16
10th month 6.16 - 6.16 0.06 0.12 6.04
11th month 6.04 - 6.04 0.06 0.12 5.92
12th month 5.92 - 5.92 0.05 0.12 5.80
0.64 0.73
2nd Opening Balance
1st month 5.80 - 5.80 0.05 0.12 5.68
2nd month 5.68 - 5.68 0.05 0.12 5.56
3rd month 5.56 - 5.56 0.05 0.12 5.44
4th month 5.44 - 5.44 0.05 0.12 5.32
5th month 5.32 - 5.32 0.05 0.12 5.20
6th month 5.20 - 5.20 0.05 0.12 5.08
7th month 5.08 - 5.08 0.05 0.12 4.95
8th month 4.95 - 4.95 0.05 0.12 4.83
9th month 4.83 - 4.83 0.04 0.12 4.71
10th month 4.71 - 4.71 0.04 0.12 4.59
11th month 4.59 - 4.59 0.04 0.12 4.47
12th month 4.47 - 4.47 0.04 0.12 4.35
0.56 1.45
3rd Opening Balance
1st month 4.35 - 4.35 0.04 0.12 4.23
2nd month 4.23 - 4.23 0.04 0.12 4.11
3rd month 4.11 - 4.11 0.04 0.12 3.99
4th month 3.99 - 3.99 0.04 0.12 3.87
 5th month 3.87 - 3.87 0.04 0.12 3.75
6th month 3.75 - 3.75 0.03 0.12 3.63
7th month 3.63 - 3.63 0.03 0.12 3.50
8th month 3.50 - 3.50 0.03 0.12 3.38
9th month 3.38 - 3.38 0.03 0.12 3.26
10th month 3.26 - 3.26 0.03 0.12 3.14
11th month 3.14 - 3.14 0.03 0.12 3.02
12th month 3.02 - 3.02 0.03 0.12 2.90
0.41 1.45
4th Opening Balance
1st month 2.90 - 2.90 0.03 0.12 2.78
2nd month 2.78 - 2.78 0.03 0.12 2.66
3rd month 2.66 - 2.66 0.02 0.12 2.54
4th month 2.54 - 2.54 0.02 0.12 2.42
5th month 2.42 - 2.42 0.02 0.12 2.30
6th month 2.30 - 2.30 0.02 0.12 2.18
7th month 2.18 - 2.18 0.02 0.12 2.05
8th month 2.05 - 2.05 0.02 0.12 1.93
9th month 1.93 - 1.93 0.02 0.12 1.81
10th month 1.81 - 1.81 0.02 0.12 1.69
11th month 1.69 - 1.69 0.02 0.12 1.57
12th month 1.57 - 1.57 0.01 0.12 1.45
0.25 1.45
5th Opening Balance
1st month 1.45 - 1.45 0.01 0.12 1.33
2nd month 1.33 - 1.33 0.01 0.12 1.21
3rd month 1.21 - 1.21 0.01 0.12 1.09
4th month 1.09 - 1.09 0.01 0.12 0.97
5th month 0.97 - 0.97 0.01 0.12 0.85
6th month 0.85 - 0.85 0.01 0.12 0.72
7th month 0.72 - 0.72 0.01 0.12 0.60
8th month 0.60 - 0.60 0.01 0.12 0.48
9th month 0.48 - 0.48 0.00 0.12 0.36
10th month 0.36 - 0.36 0.00 0.12 0.24
11th month 0.24 - 0.24 0.00 0.12 0.12
12th month 0.12 - 0.12 0.00 0.12 -
0.09 1.45
DOOR TO DOOR 60 MONTHS
MORATORIUM PERIOD 6 MONTHS
REPAYMENT PERIOD 54 MONTHS
5.12 Financial Indicators

FINANCIAL INDICATORS

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
TURNOVER 63.80 76.33 87.60 99.58 112.29
GROSS PROFIT 12.46 15.09 18.25 21.94 26.17
G.P. RATIO 19.53% 19.77% 20.84% 22.03% 23.30%

NET PROFIT 2.22 3.75 5.88 8.44 11.42

N.P. RATIO 3.48% 4.92% 6.72% 8.47% 10.17%

CURRENT ASSETS 6.82 8.00 9.08 9.85 11.23

CURRENT LIABILITIES 4.58 4.89 5.22 5.58 6.00
CURRENT RATIO 1.49 1.63 1.74 1.76 1.87

TERM LOAN 5.80 4.35 2.90 1.45 -

TOTAL NET WORTH 3.89 5.15 6.44 7.52 9.27
DEBT/EQUITY 1.49 0.85 0.45 0.19 -

TOTAL NET WORTH 3.89 5.15 6.44 7.52 9.27

TOTAL OUTSIDE LIABILITIES 10.38 9.24 8.12 7.03 6.00
TOL/TNW 2.67 1.80 1.26 0.94 0.65

PBDIT 4.44 5.71 7.53 9.79 12.50

INTEREST 0.97 0.89 0.74 0.58 0.42
INTEREST COVERAGE
RATIO 4.57 6.38 10.24 17.00 30.02

WDV 7.46 6.39 5.48 4.70 4.04

TERM LOAN 5.80 4.35 2.90 1.45 -
FACR 1.29 1.47 1.89 3.24 -
5.13 DSCR

CALCULATION OF D.S.C.R

1st 2nd 3rd 4th 5th

PARTICULARS year year year year year

CASH ACCRUALS 3.46 4.82 6.70 8.86 11.42

Interest on Term Loan 0.64 0.56 0.41 0.25 0.09

Total 4.11 5.38 7.11 9.10 11.50

REPAYMENT

Instalment of Term Loan 0.73 1.45 1.45 1.45 1.45

Interest on Term Loan 0.64 0.56 0.41 0.25 0.09

Total 1.37 2.01 1.86 1.70 1.54

DEBT SERVICE COVERAGE

RATIO 3.00 2.67 3.83 5.37 7.49
AVERAGE D.S.C.R. 4.47

5.14 Break Even Point Analysis

BREAK EVEN POINT ANALYSIS

Year I II III IV V

Net Sales & Other Income 63.80 76.33 87.60 99.58 112.29

Less : Op. WIP Goods - 1.77 2.05 2.32 2.60

Add : Cl. WIP Goods 1.77 2.05 2.32 2.60 2.88

Total Sales 65.57 76.61 87.87 99.86 112.57

Variable & Semi Variable Exp.

Raw Material Consumed 36.00 42.24 48.96 56.16 63.84

Electricity Exp/Coal Consumption at 85% 4.08 4.69 5.40 6.21 6.83

Wages & Salary at 60% 5.62 6.18 6.80 7.47 8.22

Selling & adminstrative Expenses 80% 2.04 2.44 2.80 3.19 3.59

Interest on working Capital 0.33 0.33 0.33 0.33 0.33

Repair & maintenance 2.23 2.67 3.07 3.49 2.81

Packaging 3.19 3.82 3.50 2.69 2.81

Total Variable & Semi Variable Exp 53.49 62.37 70.85 79.53 88.43

Contribution 12.08 14.24 17.01 20.33 24.15

Fixed & Semi Fixed Expenses

Electricity Exp/Coal Consumption at 15% 0.72 0.83 0.95 1.10 1.20

Wages & Salary at 40% 3.74 4.12 4.53 4.98 5.48

Interest on Term Loan 0.64 0.56 0.41 0.25 0.09

Depreciation 1.25 1.06 0.91 0.78 0.67

Selling & adminstrative Expenses 20% 0.51 0.61 0.70 0.80 0.90

Rent 3.00 3.30 3.63 3.99 4.39

Total Fixed Expenses 9.86 10.49 11.13 11.89 12.73

Capacity Utilization 50% 55% 60% 65% 70%

OPERATING PROFIT 2.22 3.75 5.88 8.44 11.42

BREAK EVEN POINT 41% 41% 39% 38% 37%

BREAK EVEN SALES 53.53 56.42 57.48 58.41 59.34

6. LICENSE & APPROVALS

 Obtain the GST registration.

 Additionally, obtain the UDYAM registration Number.
 Fire/pollution license as required.
 FSSAI License.
 Factory License
 Choice of a Brand Name of the product and secure the name with
Trademark if required.

Implementation Schedule

S.N. Activity Time Required

(in Months)

1 Acquisition Of premises 1-2

2 Procurement & installation of Plant & Machinery 1-2

3 Arrangement of Finance 1-2

4 Requirement of required Manpower 1

Total time Required (some activities shall run 5-6 Months

concurrently)
7. ASSUMPTIONS

1. Production Capacity of noodle is 800 Kgs per day. First year, Capacity has
been taken @ 50%.

2. Working shift of 8 hours per day has been considered.

3. Raw Material stock is for 15 days and Finished goods Closing Stock has

been taken for 10 days.

4. Credit period to Sundry Debtors has been given for 10 days.

5. Credit period by the Sundry Creditors has been provided for 9 days.

6. Depreciation and Income tax has been taken as per the Income tax Act,

1961.

7. Interest on working Capital Loan and Term loan has been taken at 11%.

8. Salary and wages rates are taken as per the Current Market Scenario.

9. Power Consumption has been taken at 20 KW.

10. Selling Prices & Raw material costing has been increased by 5% & 5%
respectively in the subsequent years.
 Limitations of the Model DPR and Guidelines for Entrepreneurs

Limitations of the Model DPR

i. This model DPR has provided only the basic standard components and methodology to be
adopted by an entrepreneur while submitting a proposal under the Formalization of Micro Food
Processing Enterprises Scheme of MoFPI.

ii. This is a model DPR made to provide general methodological structure not for specific
entrepreneur/crops/location. Therefore, information on the entrepreneur, forms and structure
(proprietorship/partnership/cooperative/ FPC/joint stock company) of his business, details of
proposed DPR, project location, raw material base/contract sourcing, entrepreneurs own SWOT
analysis, detailed market research, rationale of the project for specific location, community
advantage/benefit from the project, employment generation and many more detailed aspects not
included.

iii. The present DPR is based on certain assumptions on cost, prices, interest, capacity utilization,
output recovery rate and so on. However, these assumptions in reality may vary across places,
markets and situations; thus the resultant calculations will also change accordingly.