Pre-Feasibility Study

Raisin Production Unit

Small and Medium Enterprises Development Authority

Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road,
Lahore
Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7
[email protected]

REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE

PUNJAB SINDH KPK BALOCHISTAN

3rd Floor, Building No. 3, 5TH Floor, Bahria Ground Floor Bungalow No. 15-A
Aiwan-e-Iqbal Complex, Complex II, M.T. Khan Road, State Life Building Chaman Housing Scheme
Egerton Road Lahore, Karachi. The Mall, Peshawar. Airport Road, Quetta.
Tel: (042) 111-111-456 Tel: (021) 111-111-456 Tel: (091) 9213046-47 Tel: (081) 831623, 831702
Fax: (042) 36304926-7 Fax: (021) 5610572 Fax: (091) 286908 Fax: (081) 831922
[email protected] [email protected] [email protected] [email protected]

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Table of Contents
1 DISCLAIMER.......................................................................................................................................... 3
2 EXECUTIVE SUMMARY ...................................................................................................................... 4
3 INTRODUCTION TO SMEDA ............................................................................................................. 5
4 PURPOSE OF THE DOCUMENT........................................................................................................ 5
5 BRIEF DESCRIPTION OF PROJECT & PRODUCT........................................................................ 6
5.1 PRODUCTION PROCESS FLOW ................................................................................................................... 6
5.1.1 Harvesting ................................................................................................................................................... 6
5.1.2 Drying ............................................................................................................................................................. 6
5.1.3 Inspection..................................................................................................................................................... 6
5.1.4 Storage .......................................................................................................................................................... 6
5.1.5 Mechanical Processing ....................................................................................................................... 7
5.1.6 Packaging .................................................................................................................................................... 7
5.1.7 Production Process Flow ................................................................................................................... 7
5.2 INSTALLED AND OPERATIONAL CAPACITIES .......................................................................................... 8
5.3 CRITICAL FACTORS ............................................................................................................................... 8
5.3.1 Opportunities ............................................................................................................................................. 8
5.3.2 Threats .......................................................................................................................................................... 8
6 GEOGRAPHICAL POTENTIAL FOR INVESTMENT ..................................................................... 8
7 POTENTIAL TARGET CUSTOMERS / MARKETS ........................................................................ 8
8 PROJECT COST SUMMARY................................................................................................................ 9
8.1 PROJECT ECONOMICS ................................................................................................................................. 9
8.2 PROJECT FINANCING................................................................................................................................ 10
8.3 PROJECT COST .......................................................................................................................................... 11
8.4 SPACE REQUIREMENT ............................................................................................................................. 11
8.5 MACHINERY & EQUIPMENT REQUIREMENT ....................................................................................... 12
8.6 FURNITURE & FIXTURES REQUIREMENT ............................................................................................. 13
8.7 OFFICE EQUIPMENT REQUIREMENT ..................................................................................................... 13
8.8 HUMAN RESOURCE REQUIREMENT ...................................................................................................... 13
8.9 REVENUE GENERATION .......................................................................................................................... 14
9 USEFUL WEB LINKS .......................................................................................................................... 14
10 ANNEXURES ........................................................................................................................................ 16
10.1 INCOME STATEMENT ............................................................................................................................... 16
10.2 BALANCE SHEET....................................................................................................................................... 17
10.3 CASH FLOW STATEMENT ........................................................................................................................ 18
11 KEY ASSUMPTIONS........................................................................................................................... 19
11.1 CASH FLOW ASSUMPTIONS .................................................................................................................... 19
11.2 REVENUE ASSUMPTIONS ........................................................................................................................ 19
11.3 FINANCIAL ASSUMPTIONS ...................................................................................................................... 19

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1 DISCLAIMER
This information memorandum is to introduce the subject matter and provide a
general idea and information on the said matter. Although, the material included in
this document is based on data/information gathered from various reliable
sources; however, it is based upon certain assumptions, which may differ from
case to case. The information has been provided on as is where is basis without
any warranties or assertions as to the correctness or soundness thereof. Although,
due care and diligence has been taken to compile this document, the contained
information may vary due to any change in any of the concerned factors, and the
actual results may differ substantially from the presented information. SMEDA, its
employees or agents do not assume any liability for any financial or other loss
resulting from this memorandum in consequence of undertaking this activity. The
contained information does not preclude any further professional advice. The
prospective user of this memorandum is encouraged to carry out additional
diligence and gather any information which is necessary for making an informed
decision, including taking professional advice from a qualified consultant/technical
expert before taking any decision to act upon the information.
For more information on services offered by SMEDA, please contact our website:
www.smeda.org.pk

Document Control

Document No. PREF-NO

Revision
Prepared by SMEDA-Balochistan
Revision Date August, 2020
For information [email protected]

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2 EXECUTIVE SUMMARY
The proposed project is about establishing a Raisin Production Unit in high
productivity areas of grapes of Balochistan. The respective facility can create a
strong market in country. In addition, it can also be exported if produced according
to international standards and compliance. The project would serve as facility to
utilize abundant raw material existing in the country. On the other hand, it would
generate employment for the local inhabitants and more over would possibly
cause cash inflow for the country as well. Currently the project is being designed /
proposed for adjoining areas of major cities but the same can be proposed for
several other cities which can fulfill input and logistic requirements of the project.

Initially the project is proposed to attract domestic customers but after its maturity,
international customers could also be easily targeted. The main feature of the
project would include hygienically produced raisins (dehydrated grapes up to 80-
85%) according to international quality standards. Whereas value addition will be
done is shape of quality processing, standardize packaging & final product with
proper preservation ability.

The Proposed product mix for the project will be standardized raisin, processed in
accordance with internationally accepted quality standards. Whereas value
addition will be done is shape of quality processing, standardize packaging and
flavor adding in shape of Victoria oil etc.

The project is highly dependent upon the availability of Grapes. So keeping in view
the seasonal production of grapes, it is suggested that the project may be initiated
between July and September. However, commercial production can process
through this facility by utilizing round their production of other varieties of grapes.
In addition, the semi processed raisin coming from neighboring countries can be a
vital input for further processing / value addition in order to exploit its commercial
importance.

Product include Dried and Packaged Raisins. The capacity of the unit is to
produce Raisins in the first year is 390,000 Kg and the maximum production it will
produce 570,000 kg at 95% capital utilization. Total Cost Estimates is Rs.
24,963,842 with fixed investment Rs. 22,206,046 and working capital Rs.
2,757,796. Given the cost assumptions IRR and payback are 53% and 3.42 years
respectively.

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3 INTRODUCTION TO SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was
established in October 1998 with an objective to provide fresh impetus to the
economy through development of Small and Medium Enterprises (SMEs).
With a mission "to assist in employment generation and value addition to the
national income, through development of the SME sector, by helping increase the
number, scale and competitiveness of SMEs", SMEDA has carried out ‘sectoral
research’ to identify policy, access to finance, business development services,
strategic initiatives and institutional collaboration and networking initiatives.
Preparation and dissemination of prefeasibility studies in key areas of investment
has been a successful hallmark of SME facilitation by SMEDA.
Concurrent to the prefeasibility studies, a broad spectrum of business
development services is also offered to the SMEs by SMEDA. These services
include identification of experts and consultants and delivery of need based
capacity building programs of different types in addition to business guidance
through help desk services.

4 PURPOSE OF THE DOCUMENT

The objective of the pre-feasibility study is primarily to facilitate potential
entrepreneurs in project identification for investment. The project pre-feasibility
may form the basis of an important investment decision and in order to serve this
objective, the document/study covers various aspects of project concept
development, start-up, and production, marketing, finance and business
management.
The purpose of this document is to facilitate potential investors in Raisin
Production Unit by providing them with a general understanding of the business
with the intention of supporting potential investors in crucial investment decisions.
The need to come up with pre-feasibility reports for undocumented or minimally
documented sectors attains greater imminence as the research that precedes
such reports reveal certain thumb rules; best practices developed by existing
enterprises by trial and error, and certain industrial norms that become a guiding
source regarding various aspects of business set-up and its successful
management.
Apart from carefully studying the whole document one must consider critical
aspects provided later on, which form basis of any Investment Decision.

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5 BRIEF DESCRIPTION OF PROJECT & PRODUCT

5.1 Production Process Flow

There are four primary methods for producing raisins including the natural,
dehydration, continuous tray, and dried-on-the-vine methods. The most popular
and economical of these is the natural method, while a small portion of raisins are
made by mechanically dehydrating grapes (Dehydration by Oven), while the
majority of them are produced by sun drying. The step by step process of grapes
dehydration by sun dried method for commercial purpose is illustrated below;

5.1.1 Harvesting
Starting in late June – July and continuing through September, the grapes are
harvested. At this point in the year they are at their optimum sweetness. Bunches
of grapes are handpicked by field workers and placed on paper trays, which are
laid out on the ground. To provide a good surface for the raisin trays the soil
between the rows is leveled.

5.1.2 Drying
Depending on the weather, the grapes are allowed to dry on the trays for two to
four weeks. During this time, the moisture content of the grape is reduced from
75% to under 15% and the color of the fruit changes to a brownish purple. At night,
the trays are rolled to minimize the accumulation of sand and protect against raisin
moth infestation. The paper trays are embedded with a certified compound, which
kills insects. After the fruit is dried, the paper trays are rolled up around the raisins
to form a package. The rolls are gathered and stored in boxes or bins before being
transported by truck to a processing plant.

5.1.3 Inspection
When the rolls of fruit arrive at the manufacturing plant, they are emptied out onto
wire screens and shaken to remove dirt and other unwanted debris. They are also
inspected to ensure that they meet previously determined specifications. Factors
such as moisture content, color, and taste are all used to evaluate the shipment.
Based on their quality, the raisins are graded as either standard or substandard.
Only the standard graded raisins can be immediately used.

5.1.4 Storage
After careful inspection the standard graded grapes are moved to the production
lines, while the substandard graded are forwarded for further drying. As the
substandard graded raisins are moved for storage, they are stacked outside the
plant in temporary storage enclosures. These enclosures are constructed with
polyethylene sheeting fastened to wooden frames. They are made tight enough to
hold the fumigation gasses, which are applied periodically to inhibit insect growth.

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5.1.5 Mechanical Processing

The dried grapes are moved from the storage bins to the processing plant. Here
they are emptied out onto a conveyor line and mechanically modified. The points
illustrated below explain the step by step mechanical processing in commercial
production of raisin;

1. The residual sand and other debris are first removed by running the raisins on
a fine mesh screen while air is blown on them.
2. Immature fruit is removed by suction devices.
3. Then the raisins are separated from the bunch stem by shaking.
4. The cap stems on each raisin are removed by being passed through two
rotating conical surfaces. If there are seeds in the raisins, they are
mechanically removed.
5. When all these processing steps are completed, the raisins are run through a
series of mesh screens to sort them according to size.
6. Hereby, value addition can be done in term of taste by processing through the
substances like Victoria oil for flavoring.

5.1.6 Packaging
After mechanical processing proper standardized packaging of final product is
done and forwarded for transportation at this point the raisins can be put into a
variety of packaging. These range in size from small 1, 2, and 5 kg cardboard
containers for individual consumption to 1,100 lb (499.4 kg) containers for
industrial use.

5.1.7 Production Process Flow

Production Process Flow

Harvesting Drying Inspection

Packaging Mechanical Storage

Processing

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5.2 Installed and Operational Capacities

The proposed raisin production unit would be located in 5,392 Sq.Ft. The Installed
Capacity of the plant is 600,000 kg but in the first year of operation working at a
capacity of 65% it will produce 390,000 kg that will increase at a rate of 5 percent
reaching its maximum operational capacity of 95% in the subsequent years.

5.3 CRITICAL FACTORS

Following are the key factors recommended for initiating a successful business.
The commercial viability of the proposed project depends on the following factors
 Selection of proper location, equipment and staff would be required to run
project successfully.
 Continuous efforts should be made for up-gradation of the processing
technique.
 To attract larger number of customers the product must be processed on
international quality standards.

5.3.1 Opportunities
 Diversified demand of the product from the medicine and food industry.
 Escalating demand based on rapidly growing population.
 Availability of raw material.
 Lack of certified producer.
 Established market & demand.

5.3.2 Threats
The proposed project will be facing the following threat:
 Price fluctuations and macroeconomic instability.
 Imports from neighboring countries.

6 GEOGRAPHICAL POTENTIAL FOR INVESTMENT

Suitable areas for establishing the plant are Quetta, Pishin, Killi Abdullah,
Mastung, Kalat, Loralai and Zhob districts. But mainly the famous grape producing
areas are Pishin, Killa Abdullah and Mastung.

7 POTENTIAL TARGET CUSTOMERS / MARKETS

The target customer for processed raisin would primarily be individuals, dry fruit
whole sellers & retailers and bakery business. Initially the project will have focused
on local customers as well as national level retailers and whole sellers, depending
upon its successful operation international market would also be targeted in future.

In relevance to data provided by USDA, raisin imports of world are around 708,566
tons in year 2017-18, respectively showing a 2-percent increase over the previous
year as compare to exports. Turkey is the key supplier to the EU market. Other

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major import markets include Kazakhstan and China is estimated around 42,000
tons and 34,800 tons, respectively. Over the last several years there is a gradual
increase in imports, opening a gate way of potential in respective industry.

Following countries could be the market for the Packaged Raisins produced:

Table 3: Major Importers of Raisins

Metric Tons (Dry Weight Basis)

Country 2015/2016 2016/2017

European Union 327,000 335,000
Kazakhstan 42,000 45,000
China 34,000 40,000
Japan 31,000 32,000
Brazil 25,800 27,000
Canada 25,500 26,000
Russia 26,600 26,000
Australia 24,000 25,000
United States 24,666 20,000
Iraq 16,000 18,000
Other 131,500 139,600

Total 708,566 733,600

Source: USDA 2018-2019

8 PROJECT COST SUMMARY

8.1 Project Economics

All the figures in this financial model have been calculated for estimated sales of
Rs. 99.28 million in the year one. The capacity utilization during year one is
worked out at 65% with 5 % increase in subsequent years up to the maximum
capacity utilization of 95%. Number of kg produced will be 390,000 in the first year.

The following table shows internal rate of return, payback period and net present
value of the proposed venture.

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Table 1: Project Economics

Description Details

Internal Rate of Return (IRR) 53%

Payback Period (yrs.) 3.42

Net Present Value (Rs.) Rs. 138,985,216

8.2 Project Financing

Following table provides details of the equity required and variables related to
bank loan;

Description Details
Total Equity (60%) Rs. 14,978,305
Bank Loan (40%) Rs. 9,985,537
Markup to the Borrower (%age / annum) 14%

Tenure of the Loan (Years) 5 Years

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8.3 Project Cost

Following fixed and working capital requirements have been identified for
operations of the proposed business.

Table 2: Project Cost

Capital Investment Rs. in actuals
Land 2,636,089
Building/Infrastructure 5,192,000
Machinery & equipment 11,170,000
Furniture & fixtures 100,000
Office Equipment 135,000
Office Vehicle 2,163,000
Pre-operating costs 809,958
Total Capital Costs 22,206,046
Working Capital Rs. in actuals
Equipment spare part inventory 318,229
Raw material inventory 1,272,917
Upfront insurance payment 666,650
Cash 500,000
Total Working Capital 2,757,796
Total Investment 24,963,842

8.4 Space Requirement

The proposed Raisin Production Unit will be spread on 5,392 sqft. For the purpose
of this pre-feasibility, average land cost is estimated at Rs. 488.8 sqft. The
infrastructural requirements of the project mainly comprise of the construction of
Management office, Warehouse and storage, processing hall shed, guard room
and store. The cost of construction for the proposed infrastructure requirement is
provided in the table below:

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Table 3: Space Requirment

Estimated Area Unit Cost Total Cost

Description
(Sq.Ft) (Rs.) (Rs.)
Management Office 504 1800 1,108,800
Ware House & Storage 1,000 1500 1,500,000
Processing Hall Shed 2,000 1200 2,400,000
Guard Room 194 300 58,200
Store 194 0 0
Payment 500 150 75,000
Ground 1000 50 50,000
Total 5,192,000

8.5 Machinery & Equipment Requirement

Plant, machinery and equipment for the proposed project are stated below

Table 4: Machinery & Equipment

Description Quantity Unit Cost Total Cost
(Rs.)
(Rs.)
Fruit Washer & Dryer 1 4,420,000 4,420,000
Sorting & Grading Machine 1 2,720,000 2,720,000

Packaging Machine 1 2,380,000 2,380,000

Generator & Installation 1 500,000 500,000
Transformer with Installation 1 500,000 500,000
Misc. 1 650,000 650,000
Total 11,170,000

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8.6 Furniture & Fixtures Requirement

Details of the furniture and fixture required for the project are given below;

Table 5: Furniture & Fixture

Description Quantity Cost per Unit Total
Furniture and 1 100,000 100,000
Carpeting
Total 100,000

8.7 Office Equipment Requirement

Following office equipment will be required for Raisin Production Unit.

Table 6: Office Equipment

Description Quantity Cost per Unit Total
Laptop 1 70,000 70,000
Printer 1 35,000 35,000
Telephones 2 2,500 5,000
Fax machines 1 25,000 25,000
Total 135,000

8.8 Human Resource Requirement

In order to run operations of Raisin Production Unit smoothly, details of human
resources required along with number of employees and monthly salary are
recommended as under;

Table 7: Human Resource Requirment

Description – HR Requirements No Salary per month/
Employee
Manager 1 65,000

Plant operator 1 45,000

Skilled Labor 4 25,000

Technician 1 35,000

Admin and Accounts Officer 1 25,000

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Office Boy 1 17,500

Security Guards 2 17,500

Helpers 4 17,500

Total 15

8.9 Revenue Generation

Based on the capacity utilization of 65%, sales revenue during the first year of
operations is estimated as under;

Table 8: Revenue Generation – Year 1

Description No. of units No. of Sale Price / Sales
Produced in Finished unit (Rs.) Revenue
Y1 (kg) Goods (Rs.)
(kg)
Packaged Raisins 390,000 8,125 260 99,287,500
Total 99,287,500

9 USEFUL WEB LINKS

Small & Medium Enterprises Development www.smeda.org.pk

Authority (SMEDA)
Government of Pakistan www.pakistan.gov.pk
Ministry of Industries & Production www.moip.gov.pk
Ministry of Education, Training & Standards http://moptt.gov.pk
in Higher Education
Government of Punjab www.punjab.gov.pk
Government of Sindh www.sindh.gov.pk
Government of Khyber Pakhtunkhwa www.khyberpakhtunkhwa.gov.pk
Government of Balochistan www.balochistan.gov.pk
Government of Gilgit Baltistan www.gilgitbaltistan.gov.pk
Government of Azad Jamu Kashmir www.ajk.gov.pk

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Trade Development Authority of Pakistan www.tdap.gov.pk

(TDAP)
Security Commission of Pakistan (SECP) www.secp.gov.pk
Federation of Pakistan Chambers of www.fpcci.com.pk
Commerce and Industry (FPCCI)
State Bank of Pakistan (SBP) www.sbp.org.pk
Punjab Small Industries Corporation www.psic.gop.pk
Sindh Small Industries Corporation www.ssic.gos.pk
Pakistan Horticulture Development and www.phdec.org.pk
Export Company (PHDEC)
Punjab Vocational Training Council (PVTC) www.pvtc.gop.pk
Technical Education and Vocational www.tevta.org
Training Authority (TEVTA)
Pakistan Readymade Garment Technical www.prgmea.org/prgtti/
Training Institute
Livestock & Dairy Development Department, www.livestockpunjab.gov.pk
Government of Punjab.
Punjab Industrial Estates (PIE) www.pie.com.pk
Faisalabad Industrial Estate Development www.fiedmc.com.pk
and Management Company (FIEDMC)

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10 ANNEXURES

10.1 Income Statement

Statement Summaries SMEDA

Income Statement
Rs. in actuals
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Revenue 99,287,500 119,941,250 141,373,375 165,892,513 193,901,744 225,853,896 262,257,462 288,799,874 317,679,862 349,447,848
Cost of goods sold 90,298,750 103,241,738 115,211,140 128,033,689 141,766,455 156,470,621 172,211,824 180,010,728 187,999,627 196,389,939
Gross Profit 8,988,750 16,699,513 26,162,235 37,858,824 52,135,289 69,383,275 90,045,638 108,789,146 129,680,235 153,057,909

General administration & selling expenses

Administration expense 2,255,700 2,436,156 2,631,048 2,841,532 6,137,710 6,628,727 7,159,025 7,731,747 8,350,287 9,018,309
Rental expense - - - - - - - - - -
Utilities expense - - - - - - - - - -
Travelling & Comm. expense (phone, fax, etc.) 43,800 47,304 51,088 55,175 119,179 128,713 139,010 150,131 162,141 175,113
Office vehicles running expense 64,890 71,379 78,517 86,369 95,005 104,506 114,957 126,452 139,097 153,007
Office expenses (stationary, etc.) 21,900 23,652 25,544 27,588 59,589 64,357 69,505 75,066 81,071 87,556
Promotional expense 992,875 1,199,413 1,413,734 1,658,925 1,939,017 2,258,539 2,622,575 2,887,999 3,176,799 3,494,478
Insurance expense 666,650 589,170 511,690 434,210 356,730 279,250 376,675 282,507 188,338 94,169
Professional fees (legal, audit, etc.) 496,438 599,706 706,867 829,463 969,509 1,129,269 1,311,287 1,443,999 1,588,399 1,747,239
Depreciation expense 2,105,800 2,105,800 2,105,800 2,105,800 2,105,800 2,460,409 2,460,409 2,460,409 2,460,409 2,460,409
Amortization expense 161,992 161,992 161,992 161,992 161,992 - - - - -
Property tax expense - - - - - - - - - -
Miscellaneous expense 2,978,625 3,598,238 4,241,201 4,976,775 5,817,052 6,775,617 7,867,724 8,663,996 9,530,396 10,483,435
Subtotal 9,788,669 10,832,809 11,927,481 13,177,829 17,761,584 19,829,387 22,121,167 23,822,306 25,676,937 27,713,717
Operating Income (799,919) 5,866,704 14,234,754 24,680,995 34,373,706 49,553,888 67,924,470 84,966,840 104,003,298 125,344,192

Other income - - - - - - - - - -
Gain / (loss) on sale of assets - - - - - - - - - -
Earnings Before Interest & Taxes (799,919) 5,866,704 14,234,754 24,680,995 34,373,706 49,553,888 67,924,470 84,966,840 104,003,298 125,344,192

Interest expense 1,759,447 1,563,296 918,354 596,457 317,739 - - - - -

Earnings Before Tax (2,559,366) 4,303,408 13,316,400 24,084,538 34,055,967 49,553,888 67,924,470 84,966,840 104,003,298 125,344,192

Tax - - - - - - - - - -
NET PROFIT/(LOSS) AFTER TAX (2,559,366) 4,303,408 13,316,400 24,084,538 34,055,967 49,553,888 67,924,470 84,966,840 104,003,298 125,344,192

Balance brought forward (2,559,366) 1,744,041 15,060,441 39,144,979 73,200,946 122,754,834 190,679,304 275,646,144 379,649,442
Total profit available for appropriation (2,559,366) 1,744,041 15,060,441 39,144,979 73,200,946 122,754,834 190,679,304 275,646,144 379,649,442 504,993,634
Dividend - - - - - - - - - -
Balance carried forward (2,559,366) 1,744,041 15,060,441 39,144,979 73,200,946 122,754,834 190,679,304 275,646,144 379,649,442 504,993,634

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10.2 Balance Sheet

Statement Summaries SMEDA

Balance Sheet
Rs. in actuals
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Assets
Current assets
Cash & Bank 500,000 - - 11,492,685 34,399,304 66,740,573 112,502,390 180,736,002 265,800,128 370,194,310 499,724,315
Accounts receivable - 8,160,616 9,009,401 10,738,957 12,627,365 14,786,065 17,250,232 20,059,371 22,646,192 24,923,825 27,416,207
Finished goods inventory - 1,921,250 2,154,075 2,403,570 2,670,846 2,957,092 3,263,582 3,591,685 3,750,224 3,916,659 4,091,457
Equipment spare part inventory 318,229 374,292 429,543 490,753 558,489 633,369 716,068 767,750 822,260 880,641 -
Raw material inventory 1,272,917 1,482,910 1,685,601 1,907,457 2,150,059 2,415,111 2,704,445 2,872,025 3,046,644 3,231,880 -
Pre-paid annual land lease - - - - - - - - - - -
Pre-paid building rent - - - - - - - - - - -
Pre-paid lease interest - - - - - - - - - - -
Pre-paid insurance 666,650 589,170 511,690 434,210 356,730 279,250 376,675 282,507 188,338 94,169 -
Total Current Assets 2,757,796 12,528,239 13,790,309 27,467,632 52,762,794 87,811,460 136,813,392 208,309,339 296,253,786 403,241,483 531,231,980

Fixed assets
Land 2,636,089 2,636,089 2,636,089 2,636,089 2,636,089 2,636,089 2,636,089 2,636,089 2,636,089 2,636,089 2,636,089
Building/Infrastructure 5,192,000 4,672,800 4,153,600 3,634,400 3,115,200 2,596,000 2,076,800 1,557,600 1,038,400 519,200 -
Machinery & equipment 11,170,000 10,053,000 8,936,000 7,819,000 6,702,000 5,585,000 4,468,000 3,351,000 2,234,000 1,117,000 -
Furniture & fixtures 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 -
Office vehicles 2,163,000 1,730,400 1,297,800 865,200 432,600 - 3,065,509 2,299,132 1,532,755 766,377 -
Office equipment 135,000 108,000 81,000 54,000 27,000 - 191,329 143,496 95,664 47,832 -
Total Fixed Assets 21,396,089 19,290,289 17,184,489 15,078,689 12,972,889 10,867,089 12,477,726 10,017,317 7,556,907 5,096,498 2,636,089

Intangible assets
Pre-operation costs 809,958 647,966 485,975 323,983 161,992 - - - - - -
Legal, licensing, & training costs - - - - - - - - - - -
Total Intangible Assets 809,958 647,966 485,975 323,983 161,992 - - - - - -
TOTAL ASSETS 24,963,842 32,466,494 31,460,773 42,870,304 65,897,674 98,678,549 149,291,118 218,326,656 303,810,693 408,337,981 533,868,068

Liabilities & Shareholders' Equity

Current liabilities
Accounts payable - 6,743,914 7,695,022 8,571,148 9,504,826 10,499,298 11,557,979 12,669,046 13,186,244 13,710,234 13,896,129
Export re-finance facility - - - - - - - - - - -
Short term debt - 5,764,986 1,036,640 - - - - - - - -
Other liabilities - - - - - - - - - - -
Total Current Liabilities - 12,508,900 8,731,662 8,571,148 9,504,826 10,499,298 11,557,979 12,669,046 13,186,244 13,710,234 13,896,129

Other liabilities
Lease payable - - - - - - - - - - -
Deferred tax - - - - - - - - - - -
Long term debt 9,985,537 7,538,655 6,006,764 4,260,409 2,269,563 - - - - - -
Total Long Term Liabilities 9,985,537 7,538,655 6,006,764 4,260,409 2,269,563 - - - - - -

Shareholders' equity
Paid-up capital 14,978,305 14,978,305 14,978,305 14,978,305 14,978,305 14,978,305 14,978,305 14,978,305 14,978,305 14,978,305 14,978,305
Retained earnings - (2,559,366) 1,744,041 15,060,441 39,144,979 73,200,946 122,754,834 190,679,304 275,646,144 379,649,442 504,993,634
Total Equity 14,978,305 12,418,939 16,722,347 30,038,746 54,123,284 88,179,251 137,733,139 205,657,609 290,624,449 394,627,747 519,971,939
TOTAL CAPITAL AND LIABILITIES 24,963,842 32,466,494 31,460,773 42,870,304 65,897,674 98,678,549 149,291,118 218,326,656 303,810,693 408,337,981 533,868,068

Note: Total assets value will differ from project cost due to first installment of leases paid at the start of year 0

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Pre-Feasibility Study (Raisin Production Unit)

10.3 Cash Flow Statement

Statement Summaries SMEDA

Cash Flow Statement
Rs. in actuals
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Operating activities
Net profit - (2,559,366) 4,303,408 13,316,400 24,084,538 34,055,967 49,553,888 67,924,470 84,966,840 104,003,298 125,344,192
Add: depreciation expense - 2,105,800 2,105,800 2,105,800 2,105,800 2,105,800 2,460,409 2,460,409 2,460,409 2,460,409 2,460,409
amortization expense - 161,992 161,992 161,992 161,992 161,992 - - - - -
Deferred income tax - - - - - - - - - - -
Accounts receivable - (8,160,616) (848,784) (1,729,557) (1,888,408) (2,158,700) (2,464,166) (2,809,139) (2,586,821) (2,277,633) (2,492,382)
Finished good inventory - (1,921,250) (232,825) (249,495) (267,276) (286,246) (306,490) (328,103) (158,539) (166,435) (174,798)
Equipment inventory (318,229) (56,063) (55,251) (61,210) (67,736) (74,881) (82,698) (51,683) (54,510) (58,380) 880,641
Raw material inventory (1,272,917) (209,993) (202,691) (221,856) (242,603) (265,052) (289,334) (167,579) (174,619) (185,236) 3,231,880
Pre-paid building rent - - - - - - - - - - -
Pre-paid lease interest - - - - - - - - - - -
Advance insurance premium (666,650) 77,480 77,480 77,480 77,480 77,480 (97,425) 94,169 94,169 94,169 94,169
Accounts payable - 6,743,914 951,108 876,126 933,678 994,472 1,058,681 1,111,067 517,198 523,990 185,895
Other liabilities - - - - - - - - - - -
Cash provided by operations (2,257,796) (3,818,104) 6,260,237 14,275,680 24,897,464 34,610,832 49,832,864 68,233,612 85,064,127 104,394,182 129,530,005

Financing activities
Change in long term debt 9,985,537 (2,446,882) (1,531,891) (1,746,355) (1,990,845) (2,269,563) - - - - -
Change in short term debt - 5,764,986 (4,728,346) (1,036,640) - - - - - - -
Change in export re-finance facility - - - - - - - - - - -
Add: land lease expense - - - - - - - - - - -
Land lease payment - - - - - - - - - - -
Change in lease financing - - - - - - - - - - -
Issuance of shares 14,978,305 - - - - - - - - - -
Purchase of (treasury) shares - - - - - - - - - - -
Cash provided by / (used for) financing activities24,963,842 3,318,104 (6,260,237) (2,782,995) (1,990,845) (2,269,563) - - - - -

Investing activities
Capital expenditure (22,206,046) - - - - - (4,071,047) - - - -
Acquisitions - - - - - - - - - - -
Cash (used for) / provided by investing activities
(22,206,046) - - - - - (4,071,047) - - - -

NET CASH 500,000 (500,000) - 11,492,685 22,906,619 32,341,269 45,761,817 68,233,612 85,064,127 104,394,182 129,530,005

Cash balance brought forward 500,000 - - 11,492,685 34,399,304 66,740,573 112,502,390 180,736,002 265,800,128 370,194,310
Cash available for appropriation 500,000 - - 11,492,685 34,399,304 66,740,573 112,502,390 180,736,002 265,800,128 370,194,310 499,724,315
Dividend - - - - - - - - - - -
Cash carried forward 500,000 - - 11,492,685 34,399,304 66,740,573 112,502,390 180,736,002 265,800,128 370,194,310 499,724,315

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Pre-Feasibility Study (Raisin Production Unit)

11 KEY ASSUMPTIONS

11.1 Cash Flow Assumptions

Description Details

Accounts Receivable Cycle (In days) 30

Accounts Payable Cycle (In days) 30
Equipment Spare Parts Inventory Rs. 318,229

11.2 Revenue Assumptions

Description Details

Sale Price Per Kg Rs. 260

Growth in Sales Price 4%
Maximum units Produced in Year 1 (kg) 390,000

11.3 Financial Assumptions

Description Details

Debt 40%
Equity 60%
Interest Rate On Debt 14%
Debt Tenure 5

August 2020 19