Flour Mill Business Plan

S B A P_ Business plan_V.01

M/s Shri * Food Products

WHEAT FLOUR MILL  PROPOSAL                      FOR  TERM LOAN & WORKING  CAPITAL ASSISTANCE 

Business Plan

 

                                                            M/s Shri * P.Ltd Survey No, , Andhra Pradesh.

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S B A P_ Business plan_V.01

Business Plan  COMPANY INFORMATION S.No

Particulars

Details

01. 02.

Company Status

M/s Shri * P.Ltd Private limited company incorporated on * ROC, AP, vide CIN No. *

03.

Corporate Office

04. 05.

Factory Web Site Management

06.

Statutory Auditors

07.

Finance Consultants

08.

Bankers

09.

Business

10. 11. 12.

Industry Status Highlights

13 14.

Cost of the Project Means of Finance

15. 16. 17. 18. 19. 20 21.

Debt Equity ratio DSCR Payback period Direct Employment Indirect Employment Marketing Relationships Break Even Capacity

Setting up a 120 TPD Wheat Roller Flour Mill & 30 TPD Chakki Atta Project Food Processing SSI Unit in the field of Food Processing Belongs to existing profit making Group in the business of Flour trading and marketing. Project Cost: Rs 578.00 lakhs Term Loan Rs 350.00 lakhs Equity Capital Rs 228.00 lakhs Working Capital Rs 240.00 lakhs 1.54 : 1 3.08 3 years 49 Personnel 50 Firm Commission agents net work in places 35%

20.

Technology

Proven technology, promoters having experience

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S B A P_ Business plan_V.01  The

Project

M/s Shri * Pvt Ltd is a private limited company incorporated in Andhra Pradesh, India promoted by Mr. *2010. The promoters who have extensive experience in the Trading of Oil and Food Products have conceived the idea of encashing their trading experience and going in for Food Processing industry. The company is proposing to setup a Wheat Flour Mill of 120 Tons per day capacity along with a Atta Chakki Plant of 30 Tons per day processing unit at Survey No, * just about 10 Kms from Hyderabad. The unit proposes to produce Wheat Products such as Atta, Maida, Chakki Atta, Ravva and Bran ( By product ) of 150 Tons per day ( 120 + 30 ) to cater to the needs of Whole Sale and Retail needs of South Indian Wheat Market. The required raw material is basically Wheat which is available in plenty from various parts of northern and western parts of India. Processed wheat products are staple food items in India .Consumption and Demand for the products proposed for manufacturing by the company, is ever on increase due to increase in population, increase in per capita consumption owing to various factors such as rise in disposable income, increasing value of time, increasing demand for improved quality standard and hygiene of the products and non-economics of small-scale chakkis in wheat segment. The Company has obtained on long lease, 2_Acres of industrial land in Nadigama Village, Patancheru Mandal, Medak district, for implementation of the Project. The land has been converted from agricultural area and is to be developed for setting up the production facilities The total Investment of the project is estimated at Rs 578.00 Lacs which is proposed to be financed by the promoters as well as term loan from Banks in 1 : 1.54 ratio.

P r o m o t er s M/S Shri * Agro Products Foods Products has been promoted by Mr. * . • Mr.Kamal Kumar Mundada (Director)- S/o Late Sri Kishan Mundada started his career in the year 1991 after his school education. He entered the family business run by his father viz., M/s Mundada brokers who are commission agents for supply of crude edible oil to oil refineries till 2006. Currently the business is handled by his cousins. For a couple of years he assisted his young nephew who owns a proprietary concern ‘Anand Agencies’, distributors of wheat products viz., Atta, Chikki Atta, Maida etc. He gained rich experience assisting his nephew in the wheat products business. With this background, he started his own business in 2007viz., ‘Shubham Agro Industries’, a partnership firm to manufacture Chakki Atta at Kattedan industrial area. Presently the firm is clocking a turnover of Rs 6.00 Cr to Rs. 7.00 Cr per annum. •

Ashish Mundada S/o Sri Kamal Kumar Mundada after completing his graduation (B Tech in Electrical Engg) in the year 2006, started his career as a channel partner to market the products of Idea Cellular. He did this business for a period of 2 years and achieved a turnover of Rs 12 Cr each per year. He gave up this business and joined as a partner of ‘Shubham Agro Industries’.

•

Share Holding Pattern:   Matrix Consulting_ 101, Durga apartments, Rajbhavan Road, Hyderabad 0 9989 040404               3  

S B A P_ Business plan_V.01 S.No. 01. 02. 03. 04. 05. 06. 07.

% equity contribution into the Project

Name of each Partner Mr. Ashish Kumar Mundada Mr.Radha Kirshna Bajaj Mr. Ashish Kumar Bung Mrs. Chandrakala Bung Mr.Rohit Agarwal Mrs.Indra Mundada Mr. Kamal Kishore Mundada

15.00% 25.00% 12.50% 5.00% 17.50% 10.00% 15.00% 100.00%

total

Role Director Investor Director Investor Investor Director Director

Details of the Associate Concerns: Name of Concern

the

Activity

Nature of Association

Annual Turnover

Shubham Agro Industries

Food Processing

Rs Crores.

(Partnership firm)

Chakki Atta Mill

Sri Kamal Kumar MundadaDirector is a partner

Financing Arrangements 7.00

Nil

Status of Account Standard

The Products & The Process: The Products proposed for manufacture are the different forms of Wheat grain and as such are different forms in which Wheat is consumed. Roller Flour Mill Maida Atta Ravva Bran Wastage-loss

52% 15% 8% 23% 2% 100%

processed

Chakki Mill Chakki Atta

92%

Bran Wastage-loss

6% 2% 100%

(a) What is Maida? Maida flour is finely-milled wheat flour variety which is used to make Indian breads such as paratha and naan. It is also used in Central Asian and Southeast Asian cuisine. Maida is a refined product of wheat. It is extracted from the inner white portion of the wheat after the outer brownish layer is removed. After the flour is ground in a flour mill, it is passed through a fine mesh (600 mesh per square inch) to obtain maida. Though sometimes referred to as "all-purpose flour" by Indian chefs, it more closely resembles cake flour or even pure starch. In India, maida flour is used to make pastries and other bakery items such as bread, biscuits and toast. Pastry flours available in United States may be used as a substitute for maida.

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S B A P_ Business plan_V.01 (b) What is Atta Atta is the main ingredient of most varieties of Indian, Bangladeshi and Pakistani bread. It is a whole wheat-flour made from hard wheat grown across the Indian subcontinent. Flatbread made from atta, such as chapati, roti, naan and puri, are an integral part of Indian cuisine. Hard wheats have a high content of gluten (a protein composite that gives elasticity), as such, doughs made out of atta flour are strong and can be rolled out very thin. Atta is obtained from grinding complete wheat grains. It is creamy brown in colour and quite coarse compared to other types of flour. Since nothing is removed from true whole meal atta, all the constituents of the wheat grain are preserved. Atta available in market varies in its fibre content from very low to whole of natural fiber in wheat, around 12%. (c) What is Ravva ? Husk removed wheat is ground to form rava, and used extensively in south Indian cuisine, such as in Karnataka and Tamilnadu, to make Rava dosa, Rava idli, upma, khichdi, and also sweets like Rava Ladoo and Rava halwa also known as Rava Kesari. There is another form of rava known as Chamba Rava, which is an extract of wheat flour. As this "Rava" is an extract of maida flour it is much finer. Rava may be described as the residues of milled material, after the flour is ground in a flour mill (Chakki). It is passed through a fine mesh till flour and rava are separated. Bombay Rava is used in Southern parts of India to make delicious dish called upma. It is also used as an additive in some Dosa items, especially the Rava Dosa. (d) What is Chakki atta ? Atta is obtained from grinding complete wheat grains. It is creamy brown in color and quite coarse compared to other types of flour. Since nothing is removed from true whole meal atta, all the constituents of the wheat grain are preserved. Atta available in market varies in its fibre content from very low to whole of natural fibre in wheat, around 12%. Traditionally, atta is made by stone grinding, a process that imparts a characteristic aroma and taste to the bread. High bran content of true whole meal atta makes it a fiber-rich food. This may help to regulate blood sugar as well have other health benefits. The temperatures attained in a chakki produced by friction, are of the order of 110-125 deg C. At such high temperatures, the carotenes present in the bran tend to exude the characteristic roasty smell, and contribute to the sweetness of the atta. The various quality control parameters for the atta industry are Ash Content, Moisture Content, (f) What is Bran? Bran is the hard outer layer of grain and consists of combined aleurone and pericarp. Along with germ, it is an integral part of whole grains, and is often produced as a by-product of milling in the production of refined grains. When bran is removed from grains, the latter lose a portion of their nutritional value. Bran is present in and may be milled from any cereal grain, including rice, corn (maize), wheat, oats, barley and millet. Bran should not be confused with chaff, which is coarser scaly material surrounding the grain, but not forming part of the grain itself. Wheat bran is fed to horses in the form of a warm porridge or mash. Bran mash is considered an excellent way to get the horse to drink more water. It is also indicated for its laxative qualities. Bran is widely used as a major component in foods for cows, buffaloes, goats, rabbits, guinea pigs, etc. Bran is particularly rich in dietary fiber and essential fatty acids and contains significant quantities of starch, protein, vitamins and dietary minerals. Bran is often used to enrich breads (notably muffins) and breakfast cereals, especially for the benefit of those wishing to increase their intake of dietary fiber. Bran may also be used for pickling (nukazuke) as in the tsukemono of Japan. In Romania, fermented wheat bran is usually used when preparing sour soups, called borscht.   Matrix Consulting_ 101, Durga apartments, Rajbhavan Road, Hyderabad 0 9989 040404               5  

S B A P_ Business plan_V.01

Wheat & Wheat Products– The Staple Food: •

Wheat (Triticum spp) is a grass, originally from the Fertile Crescent region of the Near East, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize (784 million tons) and rice (651 million tons).

•

Globally, wheat is the leading source of vegetable protein in human food, having a higher protein content than either maize (corn) or rice, the other major cereals. In terms of total production tonnages used for food, it is currently second to rice as the main human food crop, and ahead of maize, after allowing for maize's more extensive use in animal feeds.

•

Wheat was a key factor enabling the emergence of city-based societies at the start of civilization because it was one of the first crops that could be easily cultivated on a large scale, and had the additional advantage of yielding a harvest that provides long-term storage of food.

•

Wheat grain is a staple food used to make flour for leavened, flat and steamed breads, biscuits, cookies, cakes, breakfast cereal, pasta, noodles, and couscous and for fermentation to make beer, other alcoholic beverages, or bio fuel. Wheat is planted to a limited extent as a forage crop for livestock, and its straw can be used as a construction material for roofing thatch. The husk of the grain, separated when milling white flour, is bran.

•

Wheat germ is the embryo portion of the wheat kernel. It is a concentrated source of vitamins, minerals, and protein, and is sustained by the larger, starch storage region of the kernel—the endosperm.

•

Raw wheat can be ground into flour or - using hard durum wheat only, can be ground into semolina; germinated and dried creating malt; crushed or cut into cracked wheat; parboiled (or steamed), dried, crushed and de-branned into bulgur also known as groats.

•

If the raw wheat is broken into parts at the mill, as is usually done, the outer husk or bran can be used several ways. Wheat is a major ingredient in such foods as bread, porridge, crackers, biscuits, Muesli, pancakes, pies, pastries, cakes, cookies, muffins, rolls, doughnuts, gravy, boza (a fermented beverage), and breakfast cereals (e.g., Wheatena, Cream of Wheat, Shredded Wheat, and Wheaties).

Nutrition •

100 grams of hard red winter wheat contain about 12.6 grams of protein, 1.5 grams of total fat, 71 grams of carbohydrate (by difference), 12.2 grams of dietary fiber, and 3.2 mg of iron (17% of the daily requirement); the same weight of hard red spring wheat contains about 15.4 grams of protein, 1.9 grams of total fat, 68 grams of carbohydrate (by difference), 12.2 grams of dietary fiber, and 3.6 mg of iron (20% of the daily requirement).

•

Much of the carbohydrate fraction of wheat is starch. Wheat starch is an important commercial product of wheat, but second in economic value to wheat gluten. The principal parts of wheat flour are gluten and starch. These can be separated in a kind of home experiment, by mixing flour and water to form a small ball of dough, and kneading it gently   Matrix Consulting_ 101, Durga apartments, Rajbhavan Road, Hyderabad 0 9989 040404               6  

S B A P_ Business plan_V.01 while rinsing it in a bowl of water. The starch falls out of the dough and sinks to the bottom of the bowl, leaving behind a ball of gluten.

Background of Wheat in India Wheat is a major food staple in India, and is crucial to India’s food economy and security. With wheat production of 75 to 85 million tons annually and a large demand, India’s wheat economy is now the second largest in the world. The marketed surplus from the production has also been rising and it is estimated that about 60-70 percent of the production now comes to the market (India, Directorate of Economic and Statistics 2010). • • •

•

Maida and Atta are required for daily human consumption directly, or indirectly by way of bread, biscuits, sweets, cakes, confectioneries etc. However bran is the byproduct produced in the process of manufacturing wheat products is used for making cattle feed. Major portion of atta is used for making Roti, part of daily staple diet in India. A part of atta is also used for biscuits. Maida is mainly used for bread, biscuit, cakes, cookies sweets, confectionaries etc. and Bread is popular snack food for lower middle-income group name as ‘Pav’. Premium range of the bread is popular breakfast item among middle and upper income group in urban areas Suji is used for daily human consumption in various forms and specially used for infant foods

The Production Process: Technology The processing of Wheat is done through running wheat in a roller system and the technology is very conventional and time tested. Details of the processing together with a flow chart are available else where in this report.   Market for Wheat Products: The Food Processing Industry: India is the world's second largest producer of food next to China, and has the potential of being the biggest with the food and agricultural sector. The processing food segment accounts for USD 29.4 billion, in a total estimated food market of about USD 91.7 billion. The food processing industry is one of the largest industries in India. It currently ranks fifth in terms of production, consumption, export and growth prospects. The Government of India has identified the Food Processing Industry sector as a high priority area. It has given a number of fiscal reliefs and incentives to encourage commercialization and value addition to agricultural produce. As per a study conducted by McKinsey and Confederation of Indian Industry (CII), the turnover of the total food market is approximately USD 69.4 billion out of which value-added food products comprise USD 22.2 billion. The total food production in India is likely to double in the next ten years and there is an opportunity for large investments in food and food processing technologies, skills and equipment. Godrej Foods, Reliance, Namdhari, ITC, Nestle, Ruchi Soya Industries, Tata Coffee, Tata Tea, RPG group, Subhiksha are major players. The Indian food processing industry is primarily export oriented. India’s geographical situation gives it the unique advantage of connectivity to Europe, the Middle East, Japan, Singapore, Thailand, Malaysia and Korea. One such example indicating India’s location advantage is the value of trade in agriculture and processed food between India and Gulf region.   Matrix Consulting_ 101, Durga apartments, Rajbhavan Road, Hyderabad 0 9989 040404               7  

S B A P_ Business plan_V.01 Macro-Scene- Wheat Products: Wheat is a cereal grain grown and consumed worldwide. Wheat is more popular than any other cereal grain use in baked goods. Its popularity stems from the gluten that forms when flour is mixed with water. Without gluten, raised bread is hard to imagine. Wheat is also preferred because of its mild, nutty flavor. Both the factors account for wheat being the most widely grown cereal grain in the world. Today, thousands of varieties of wheat are grown throughout the world, most requiring fertile soil and a temperate climate. Major wheat growing countries include China, India, France, and Russia. Recent projections by the International Food Policy research Institute (IFPRI) indicate that, by 2020, two-thirds of the world’s wheat consumption will occur in developing countries, where wheat imports are estimated to double by 2020. As noted earlier in this report, wheat demand worldwide is calculated to rise by 40% from 1993 to 2020 to reach 775 million tons. The expected increase in demand is partly motivated by population growth but also results from substitution out of rice and coarse grain cereals as incomes rise and populations become increasingly based in urban areas. (Source: Multi Commodity Exchange of India Limited) . Growth in packaged Atta industry is driven by four factors viz. (i) Rise in disposable income, (ii) Value of Time, (iii) Demand for improved quality and hygiene and (iv) Economic / Non Economy of small scale Chakkis. However, the current position of wheat availability is very comfortable and this is reflected by overflowing wheat stocks with the Food Corporation of India Therefore, with the easy availability of wheat for the next few years, increasing urbanization, and rising income levels, the demand for the flour milling industry is expected to grow rapidly in the future. •

The size of the Indian urban food market is estimated at Rs 350,000 Crore. The domestic market for processed food is huge and fast growing. The retail boom will create a huge demand for the food-processing sector in the coming years. Little wonder that 2007 has been designated the Year of Food Technology.

•

The private sector is yet to realize its full potential in the food-retailing sector, as the market is still to explore. Though, it has now started discovering the money there is to be made in the urban food retailing market. Urban centers have the potential of development process. But they do not produce food as they lack agricultural land; on contrary the rural areas do. In that sense, the urban areas provide an assured market for the food produced by farmers. The urban food marketing system thus assumes considerable importance for both feeding the urban population and helping farmers.

•

There are certain distinct characteristics of urban food demand. The urban population generally has a higher purchasing power. The rising average income is leading to greater demand for high-value processed food. A considerable number of urban women work, creating a demand for heat-and-serve foods.

•

The urban population density is high and this demands a chain or a network of retail outlets. Indian food retailing is poised for a quantum leap. Not only are newer names set to dot the retail landscape but also such new formats, as hyper-and super-markets are to emerge. The key drivers for increased demand in value-added processed food products are: a) growth in consumer class; b) change in lifestyle characterized by expanding urban population, increased number of nuclear and dual-income families; c) change in attitudes and tastes with increasing modernization and to a lesser extent westernization of tastes,particularly, of the youth; d) low penetration rates; and e) ability to offset seasonal supply-and-demand effects in fresh products.

•

Technical Feasibility:

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S B A P_ Business plan_V.01

DETAILS OF THE PROJECT / INFRASTRUCTURE / CAPASITIES & PRODUCTION A. Product Capacities / Raw materials The 8 Body Roller Flour Mill & 4 Chakki Atta Plant, Machinery, Buildings and other Infrastructure designed (as per details given below) to produce the following capacities. Wheat Roller Flour Mill & Atta Chakki Plant capacities & proposed utilized capacities: Particulars

2011-12

2012-13

2013-14

2014-15

2015-16

MT/ PA

MT/ PA

MT/ PA

MT/ PA

MT/ PA

39600

39600

39600

39600

39600

Capacity of Chakki Atta Plant ( 30 TPD )

9900

9900

9900

9900

9900

Operating Capacity %

50%

55%

60%

65%

70%

14850

21780

23760

25740

27720

3713

5445

5940

6435

6930

Capacity of Roller Flour Mill Plant ( 120 TPD )

Production Roller flour Mill products *

Production Atta Chakki

B. Land & Location of the project The 120 TPD Roller Flour Mill plant along with 30 TPD Chakki Atta Plant is proposed to be located in 2_Acres of leased land ( long term registered lease for a period of 12 years) at Survey No,31/A, Nadigama Village, Patancheru Mandal, Medak district, Andhra Pradesh just about 10 Kms from Hyderabad. Patancheru also known as Patan Choru, is a census town and mandal headquarters in Medak district located about 10 km from Hyderabad on the Hyderabad-Sholapur highway. The location has excellent approach roads, water resource and proximity to Power. The area being on the State highway logistically is ideal to locate the unit. The area has all the infrastructure facilities such as adequate power, skilled labor, transportation facilities for locating the plant. Thus the unit is located in a ideal location. The land development include leveling of 2 acres, providing 20 and 12 feet roads in the eastern and southern sides respectively for bulk movement of cargo and staff vehicles and building a Compound wall. The total cost of development is estimated at Rs 1.94 lakhs. (C) Factory buildings The Company is proposing to build 24356 sq feet of factory RCC buildings to host plant machinery and other facilities as per the food grade standards and to host the utilities such as power / water / security / steam etc. The drawings and building outlay are ready for execution. The factory consists of processing and storage facilities. Processing is carried out in three stages – Storage, Cleaning, Milling, Grinding, packaging, hosting of utilities, Administration and general structure. All these facilities are provided in two buildings constructed as per FPO norms, the second building would have central partition dividing the storage space and processing space. Administrative, security, toilets and rest rooms are provided as per the requirement. The total cost of buildings is estimated at Rs 92.64 lakhs

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S B A P_ Business plan_V.01

(G) Plant and Machinery & Process Technology: Total cost of machinery is estimated, at Rs.232 lac’s based on quotations received from various vendors, details of which are as under: a) Cleaning (Preparatory) Section: Wheat procured, contains many impurities like sand, metal pieces, dirt and gunny pieces. The process of the cleaning is primary sieving for the removal of large size impurities, brushing for removal of dust attached to the surface of grain, removal of metal impurities. The machinery required for the cleaning section mainly consist of drum sieve, classifier, magnets separator etc. Cleaned wheat is stored in silos for conditioning before milling. b) Milling Section: The three major parts of wheat are Bran, Germ and the Endosperm. The bran and germ is separated as it affects the baking quality of the flour. The Roller Mill Process is a gradual reduction process where bran and its parts are broken down in succession of relatively gentle grinding stage. Grinding is done in Roller Mill with a pair of rolls mounted in parallel alignment that can be adjusted to do precision grinding. At each grinding stage products consist of mixture of coarse, medium and fine particles including the portion of the flour that are separated by sifting of material following each grinding stage. The produce is then sieved in plan shifters. Pneumatic lifts are used to feed in at the top and passes from the sieves to sieves by gravity flow. The machines required in Milling Section mainly consist of Roller Mills, Plan Shifters, Bran Finishers, Reverse Jet Filters, Dampener, Pneumatic lifts etc. c) Others: Roller Flour Mill will be fully automated and will have various other equipments such as Elevators, Cyclones, Air lock, Conveying System, Screening System, Dust Collection equipments etc. d)The miscellaneous fixed assets include furniture, jeep, weigh bridge office machines & equipment, fire-fighting equipment, testing equipment, & transformer including HT (High Tension) line. Manufacturing Process & Technology: The technology for food processing industry is not complicated and mostly related to engineering. Good qualified and experienced team of management exposed to running hi-tech plants, is sure to have an edge over the competitors. The machinery suppliers extend all the necessary technical supports such as installation and upkeep. Cleaning (preparatory) Section: The wheat contains many impurities like sand, metal pieces, dirt and gunny pieces. Wheat is cleaned before In take & pre  processing to remove coarse impurities like stones, chafe, stitching threads, cleaning woods, straws, dust etc. Conveyors, Elevator, Drum Sieve, Reel Machine, Separator with aspirators, magnet, etc. are used in pre-cleaning which improves the storability of the wheat. . Storage Silos: Cleaned wheat is stored in silos for the continuous process and Storage Silo making a proper blend of wheat according to the requirement as needed for the end product mix.  First Cleaning 

First Cleaning: pre cleaned wheat is further processed to remove foreign ingredients that not only reduces the yield but also affects the taste and colour of the finished goods. Auto weigher, flow balancer, Dry de-stoner, intensive dampener, magnets are used in process and wheat is tempered at this stage.  

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S B A P_ Business plan_V.01

Second Cleaning 

Grinding 

Purification 

Bran Finisher 

Second Cleaning: By absorption of water at 1st cleaning stage cellulose layer of wheat expand, crack and get partly loose which is further tempered to have constant moisture using Intensive Dampner, Flow Balancer, Scourer, Volumetric Measure, Automatic Water Doser for smooth milling. Grinding: For getting good extraction Gradual Reduction System of break is used to separate the bran and endosperm. This breaking of wheat separating bran and endosperm is a mechanical process done by passing the wheat through Rolls running at different speed to produce a cutting and shearing action. Apart from Rolls Disc, Beat and impact Detachers are used besides the elevators to move the product from one roll to another Purification: Semolina and Middling produced at grinding stage are separated from bran by air in Purifier Machines whereby a composite fractions composed of endosperm with adhering bran are also separated. Bran Finisher: Whatever flour remain in bran is cleaned using bran finisher and the remaining bran is packed. 

,

Packaging 

Packaging: Since the process is of Gradual Reduction therefore at each stage end products are produced and sent pneumatically after sieving using Bolting Cloth in service Machines and the finished product are packed for delivery in market

(H) Environmental Impact This project is environmental friendly. Government of India has classified this in Green Category of industries. The factory is situated adjacent to main road leading to National High Way and there is no threat to traffic congestion. There is no dwelling close to the factory. The noise from the factory is very minimal. The factory has a potential to employ the locals as the process involves huge man power. The expertise of the locals can also be used to the benefit of the unit as most of the villagers are farmers. The presence of this environmental friendly unit would certainly help improve the locality as service oriented facilities are bound to come up because of the manpower employed.

(I) POLLUTION ABATEMENT Solid Wastes: The solid waste generated is only bran which is saleable and has commercial applications. Liquid effluent: Nil, Air Pollution: There is no production of any obnoxious gases any where in the process.

Licenses & Regulatory permissions:

The Company has obtained the necessary approvals/permissions/licenses from the various authorities as listed hereunder: S.No. Item of Approval/License Status /Permission

01 02 03 04 05 06 07

SSI Registration Power Feasibility Environment VAT Registration Factory Inspector Panchayat License Estimates / Quotations

Received Under process Under process Received Under process Received Received

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S B A P_ Business plan_V.01

Resources

Raw Material: The basic raw material is Wheat and it is the largest produced grain in India next to Rice. International Scenario of Wheat Producing Regions  

Major wheat growing countries include China, India, France, and Russia. Worldwide wheat is grown in Asia, Africa, Europe and America. On basis of area maximum acreage comes from India that accounts for 13% of total world average, followed by EU, Russia, China, USA, Australia, Canada and Kazhakastan. Total average is around 217 million hectare, which keeps fluctuating between 210 million hectare to 230 million hectare in general.

(Source: Multi Commodity Exchange of India Limited)  World Wheat Production  

World production of wheat hovers around 585 million tons. Maximum contribution comes from European Union, which comprises 25 countries followed, by China, India, and United states.  (000 Tonnes)

Countries  EU-25 China India United States Russia Australia Canada World Total

2000-01

2001-02

124,197 99,640 76,369 60,641 34,450 22,18 26,519 581,377

113,553 93,873 69,680 53,001 46,900 24,299 20,568 580,930

2002-03 2003-04 124,483 90,290 71,810 43,705 50,550 10,132 16,198 566,963

106,615 86,490 65,100 63,814 34,100 26,231 23,552 552,828

(Source: USDA)

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S B A P_ Business plan_V.01 World wheat consumption is consistently growing. Long-term trend supports the fact that is evident from above chart. Wheat being one of the major staple foods all across the world demand seems to remain strong owing to increasing population. Two major consuming countries of wheat are EU, China, India, Russia, USA and Pakistan. Wheat has made the largest contribution to the growth of food grain production in India. This is shown by the growth rates: wheat production has grown at a much faster pace compared to other food grains. During 1974 – 2010, when total food grain production grew at an annual rate of 3.68 per cent, wheat production grew at 5.36 per cent. Even in the last decade, wheat production is showing the fastest growth. The growth in wheat production has come from increase in yield as well as expansion of area. The increase in area sown has come at the expense of coarse cereals and pulses area, and from an increase in cropping intensity through multiple cropping. WHEAT ALL INDIA PRODUCTION IN MILLION TONS – 1974 - 2010 WHEAT - ALL INDIA PRODUCTION MILLION TONNES

90 80

PRODUCTION

70 60 50 40 30 20

1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10*

1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98

0

1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85

10

ACTUAL PRODUCTION PRODUCTION TREND

YEAR

Nationally about 18 per cent of the net cropped area is planted to wheat. Figure 1 shows the shares of different states in the national wheat production. Uttar Pradesh (U.P.) contributes the largest share with 36 per cent of production, followed by Punjab with 19 per cent and Haryana with 11 per cent. These three northern states together contribute two-thirds of the production of wheat. These are followed by Madhya Pradesh (M.P.) 11 per cent, Rajasthan 10 per cent, Bihar 6 per cent and Gujarat 3 per cent. All the rest contribute only 4 per cent. As expected, the major wheat growing states are all in the north.   Matrix Consulting_ 101, Durga apartments, Rajbhavan Road, Hyderabad 0 9989 040404               13  

S B A P_ Business plan_V.01 Figure 1: Distribution of Wheat Production across States Gujarat 3%

Rest of India 4%

Bihar 6%

Rajasthan 10%

UP 36%

MP 11%

Punjab 19% Haryana 11% Source: Based on data from India, Directorate of Economics and Statistics 2010

Another feature of wheat production is that the wheat yields vary substantially across the states, as shown above. Punjab and Haryana show the highest yields of 3853 and 3660 kg/ha, respectively. These are followed, after a significant gap, by Rajasthan, U.P. and Gujarat with 2500, 2498 and 2373 kg/ha respectively – which are close to the national average of 2583 kg/ha. Bihar and M.P. follow with much lower yields of 1999 and 1625 kg/ha, respectively. These yields can be compared with 2907 kg/ha in USA, 1907 kg/ha in Australia, 1029 kg/ha in Russia, 3667 kg/ha in China and 7603 kg/ha in France (FAO 1998). CROP CALENDER OF WHEAT IN INDIAN MAJOR WHEAR GROWING STATES State Assam Bihar Gujarat Haryana Himachal Pradesh Jammu & Kashmir Karnataka Madhya Pradesh Maharashtra Orissa Punjab Rajasthan Uttar Pradesh West Bengal All India

Sowing Nov(B) - Dec(M) Nov(M)-Dec(E) Oct(B)-Nov(E) Oct(E)-Dec(B) Oct(B)-Nov(E) Oct(B)-Dec(E) Oct(B)-Dec(E) Oct(M)-Dec(E) Oct(B)-Dec(E Oct-Nov Oct(B)-Nov(E) Nov(B)-Dec(E) Oct(B)-Jan(M) Nov(B)-Dec(E) Oct-Dec

Harvesting Mar(B)-Apr(E) Mar(M)-Apr(E) Feb(B)-Mar(E) Apr(M)-Apr(E) Apr(M)-Jun(E) May(B)-May(E) Jan(B)-Feb(E) Feb(M)-Apr(E Feb(B)-Mar(E) Mar-Apr Apr(B)-May(E Mar(B)-May(E) Apr(B)-Apr(M) Mar(B)-Apr(E Feb-Jun

  Matrix Consulting_ 101, Durga apartments, Rajbhavan Road, Hyderabad 0 9989 040404               14  

S B A P_ Business plan_V.01 Procurement of Wheat will be made from Western and Northern parts of India through use of Commission agents and commission net work. With abundant availability through production and a well oiled distribution system, the procurement of the Raw Material does not pose any problem. Simplified Outline of the Marketing System of Wheat in India Farmers - SOURCE

Primary Market Commission Agents

Whole Sellers

Processors / Flour Mills

Flour Mills

Urban Whole Sellers

FCI

Retail Shops

State Civil Supply

Fair Price Shops Consumers – END CONSUMPTION

(D) Power & Fuel Power requirement of the Roller Flour Mill plant is estimated at 500 KVA and is proposed to be obtained from the local Power grid. The Power received at 33 KV would be stepped down to 415 volts by means of transformer located in the main step-down sub-station (MSDS) and would be fed into the low tension switch board located in MSDS. One diesel-generating power set of 250 KVA rating at 430V, 50 Hz is proposed as a standby to meet the emergency power requirement of vital units of the plant requiring uninterrupted power supply in case of power cuts. The total cost of Power from APCPDCL is estimated at Rs 15.00 lakhs along with HT cabling, internal wiring, switches and internal lighting is estimated at Rs 16.74 lakhs.

(E) Water Requirements The Flour mill Plant would require water for cleaning, washing of about 10,000 liters of water on a continuous basis. The unit has a 3” bore well along with storage tanks above the ground in the supply network to take care of the make up water requirement. In addition to the above around 1000 liters of water is required for human consumption and sanitation.

(F) Project Implementation Schedule: The unit is proposing to complete the entire implementation of the project in 6 months time. The company has already purchased required land, completed all the legal formalities, identified and ordered equipment, and have completed finalizing commission agent network all over India to sell the entire production on a continuous basis.   Matrix Consulting_ 101, Durga apartments, Rajbhavan Road, Hyderabad 0 9989 040404               15  

S B A P_ Business plan_V.01 The project implementation is proposed to be as per the following chart. ACTIVITY

DEC

JAN

FEB 11

MAR 11 APRIL 11

MAY !!

JUNE 11

YEAR Land Purchase Land Development Civil Works Machinery Order Receipt of machinery Electrical works & Power Erection of machinery Trial Production Commercial Production • • • •

The project is proposed to be executed for commercial production by June 2011 The company had already started construction of the factory The machineries are being finalized. Thus for the projected FY 2011 the results comprise of 6 months operation only.

  Matrix Consulting_ 101, Durga apartments, Rajbhavan Road, Hyderabad 0 9989 040404               16  

S B A P_ Business plan_V.01

CAPEX & PROJECT FINANCIALS The total CAPEX, Means of finance & the projected repayment capabilities of the company are depicted below for having an understanding about the company’s potential for implementing the project and repayment of the loans. Project Cost

Rs lacs

Loan %

Loan

(a) Land (b) Land, Development (c ) Buildings and construction (d) Plant, Machinery & Utilities (e) Electricity Deposit (f) Power Connectivity / Cables / Pole's

on lease 1.94 132.37 309.29 15.00

0.00% 70.00% 75.00% 0.00%

0.00 92.64 231.97 0.00

10.00

75.00%

7.50

Anex 3 Anex 4 3.00%

14.14 2.00 13.25

50.00% 75.00% 75.00%

7.07 1.50 9.94

25%

80.00

0.00%

0.00

Anex1 Anex 1 Anex 2

(g) Preop Exp) (h) Office and other misc equipment (i) Contingencies (j) Working Capital Margin Total Project Cost

578.00

350.62

Projected Performance/Financial Indicators:   S.No

Particulars

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

1

Domestic Sales(Gross)

2992.75

4513.46

4917.32

5327.75

5738.19

5746.08

2

Export Sales

0.00

0.00

0.00

0.00

0.00

0.00

3

Net Sales % rise/fall (-) in net sales

2992.75

4513.46

4917.32

5327.75

5738.19

5746.08

50.81

8.95

8.35

7.70

7.85

4

Operating Profit

184.92

294.65

324.60

354.74

388.79

387.24

5

Profit Before tax

124.38

219.40

259.15

299.09

342.94

349.96

6

PBT/ Sales (%)

4.16%

4.86%

5.27%

5.61%

5.98%

6.09%

7

Profit After Tax

90.70

154.32

179.81

205.89

235.03

238.68

8

Cash Accrual

137.39

201.01

226.50

252.58

281.73

285.37

9

Paid Up Capital

228.00

228.00

228.00

228.00

228.00

228.00

10

TNW

318.70

473.02

652.83

858.71

1093.74

1332.43

11

Adjusted TNW

304.56

458.88

638.69

844.57

1079.60

1318.29

12

TOL/TNW (times)

1.89

1.13

0.71

0.47

0.30

0.21

13

Adjusted TOL/TNW

14

NWC

15

Current Ratio

1.97

1.16

0.73

0.47

0.31

0.21

110.75

241.75

398.26

580.84

1095.44

1095.44

1.33

1.71

2.16

2.67

3.44

4.92

              Matrix Consulting_ 101, Durga apartments, Rajbhavan Road, Hyderabad 0 9989 040404               17  

S B A P_ Business plan_V.01       Other Ratios

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

6.18%

6.53%

6.60%

6.66%

6.78%

6.74%

1

Operating Cost/ sales %

2

Net Sales /TTA (times)

3.30

4.55

4.45

4.28

4.06

3.60

3

PBDIT

8.03

21.68

48.07

66.35

66.35

66.35

EFFICIENCY RATIOS

As on 31st March

Particulars

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

3.30

4.55

4.45

4.28

4.06

3.60

PBT/ Total Tangible Assets (%) Operating Cost to sales (%)

13.73% 6.18%

22.10% 6.53%

23.45% 6.60%

24.04% 6.66%

24.29% 6.78%

21.90% 6.74%

Bank Finance/ Ct. Assets (%) Inventory+ Receivables to net PBDIT

53.39% 53 231.61

41.17% 45 341.34

32.33% 47 371.29

25.87% 47 401.43

17.45% 47 435.48

17.45% 47 433.93

1

Net Sales/ Total Tangible ( times )

2 3 4 5 6

RISK RATING RELATED RATIOS S.No

Particulars

2012-13

2013-14

2014-15

1

Current Ratio

2011-12

1.33

1.71

2.16

2.67

3.44

4.92

2

TOL/TNW (times)

1.89

1.13

0.71

0.47

0.30

0.21

3

PBDIT/Interest (times)

4

PAT/Net Sales (%)

5

ROCE (%) (PBDIT/TA)

6

INV+REC./Sales (days)

2015-16

2016-17

3.83

4.54

5.67

7.21

9.50

11.64

3.03%

3.42%

3.66%

3.86%

4.10%

4.15%

25.18%

33.91%

33.17%

31.91%

30.54%

26.92%

53

45

47

47

47

47

2012-13

2013-14

2014-15

2015-16

SECURITY MARGIN % S.No

Particulars

2011-12

2016-17

1

Written Down Value

441.30

394.61

347.92

301.23

254.54

207.85

2

Loan Outstanding

332.50

262.50

192.50

122.50

52.50

0.00

3

Margin

108.80

132.11

155.42

178.73

202.04

207.85

4

Security Margin %

24.66%

33.48%

44.67%

59.33%

79.37%

100.00%

2011

2012

2013

2014

2015

0.00

304.56

458.88

638.69

844.58

1079.61

90.70

154.32

179.81

205.89

235.03

238.68

458.88

638.69

844.58

1079.61

1318.29

  Movement of TNW Particulars Opening balance

2015

Add. i Profit/(-)Loss after Tax ii Increase in Capital

228.00

iii Dec./(-) Inc.in Intangible Assets

-14.14

iv Inc../(-) \ Dec.in Reserves

0.00

v. Increase in Quasi Equity

0.00

Less : Dividend

0.00 TNW

304.56

  Matrix Consulting_ 101, Durga apartments, Rajbhavan Road, Hyderabad 0 9989 040404               18  

S B A P_ Business plan_V.01  

Credit Limits – Existing and Proposed Credit Limits (Proposed): (Rs. in lacs) State Bank of Hyderabad

Limits

%

Total Cons/ MBA

CC

240.00

100%

Nil

TL Total FB Limits

350.00 590.00

100% 100%

Nil Nil

Assessment of WC facilities: Particulars

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

71.92

73.02

79.66

86.30

92.94

92.94

0.25

0.23

0.23

0.23

0.23

0.23

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

76.37

77.27

84.17

91.08

97.98

98.03

0.26

0.23

0.23

0.23

0.23

0.23

7.00

8.00

9.00

10.00

10.00

10.00

Raw Material : a) Indigenous Months Stock in Process Finished Goods Months Other Spares : a) Indigenous Months

12

13

13

13

12

12

277.11

403.67

455.31

493.31

531.31

532.04

0.83

1.07

1.11

1.11

1.11

1.11

277.11

403.67

455.31

493.31

531.31

532.04

0.83

1.07

1.11

1.11

1.11

1.11

28.77

31.21

34.05

36.89

39.72

39.72

0.10

0.10

0.10

0.10

0.10

0.10

Other Creditors

70.00

70.00

70.00

70.00

52.50

0.00

Other Current Assets

17.12

21.00

114.17

247.03

410.05

642.15

Receivables : a) Domestic Months Receivables Months S. Creditors Months

Assessed Bank Finance: Particulars

2011-12

2012-13

2013-14

Total CA

449.52

582.96

742.31

927.72

1142.29

1375.16

Other CL

98.77

101.21

104.05

106.88

92.22

39.72

Working Capital Gap

350.75

481.75

638.26

820.84

1050.07

1335.44

Net Working Capital

110.75

241.75

398.26

580.84

810.07

1095.44

Assessed Bank Finance

240.00

240.00

240.00

240.00

240.00

240.00

NWC to TCA (%)

24.64%

41.47%

53.65%

62.61%

70.92%

79.66%

Bank Finance to TCA %

53.39%

41.17%

32.33%

25.87%

21.01%

17.45%

6.40%

5.35%

4.59%

3.98%

3.48%

2.89%

15.57%

12.01%

9.43%

7.55%

4.60%

0.00%

Inv. To Net sales (days)

14

13

13

13

13

13

Rec. to gross sales (days)

25

33

34

34

34

34

3

3

3

3

3

3

S. Cr. To TCA (%) Other CL to TCA (%)

S. Cr. To purchases (days)

2014-15

2015-16

2016-17

  Matrix Consulting_ 101, Durga apartments, Rajbhavan Road, Hyderabad 0 9989 040404               19  

S B A P_ Business plan_V.01

Present Proposal with State Bank of Hyderabad Facility

Present Limit

Proposed Limit

CC limit (Hypothecation of Receivables)

Nil

Rs 240.00 Lacs

Term Loan

Nii

Rs 350.00 Lacs

Securities

40% collateral security apart from primary assets

Repayment of Term loans. •

The Project implementation has commenced and is proposed to be completed for commercial production by June 2011.

•

The term loan is thus proposed to be repayable in 5 years i.e 60 monthly installments along with interest with a initial holiday of 12 months. i.e first 6 months for project implementation and the balance 6 months for stabilizing the cash flows.

PROJECTED OPERATIONAL RESULTS Detailed data on operational expenses and profits for the forthcoming 6 years of projected operations have been worked out and given in the statement annexed. While working out estimates, prices of inputs and selling prices of outputs have been kept at constant rates assuming that any increase in inputs cost would be effect by proportionate increase in the selling price. Marginal increase has been provided in other operational cost to cover effects of possible inflation. CASH GENERATION & REPAYMENT SCHEDULE Based on the estimates of cash generation from the operations and considerations the need to retain certain funds for meeting any other contingent situations, plans for repayment of the loan has been worked out and enclosed as annexes. By the end of the third year the company shall be self sufficient to meet the enhanced working capital limits /or /for expansion or diversification PROJECTED CASH FLOWS A projected cash flow statement of the company at the end of the projected 6 years of working has been drawn up and given in the statement enclosed. The pictures emerges from a glance of the date, spread for the 6 years i.e. Increasing levels of reserve accumulation and decreasing borrowings on the one hand and increasing levels of current assets on the other with comparatively very less amount blocked in fixed capital. The data also reveals a comparatively high ratio of equity to debt depicting a growing strong capital base of the unit over loan funds in the business.

  Matrix Consulting_ 101, Durga apartments, Rajbhavan Road, Hyderabad 0 9989 040404               20  

S B A P_ Business plan_V.01

CONCLUDING REMARKS GENERAL From the foregoing detailed analysis of the proposal towards Term loan and working capital finance for Shri * Pvt Ltd it can be concluded that the Company has been extremely careful and selective in preparing its business program. It has drawn up the scheme after adequately studying Wheat and Wheal products market in india. The plans have been made in such a way that the salability of the market could be almost assured with least marketing cost. The firm has already made a committed commission agents network in place thus the sale is firmly committed. TECHNO ECONOMICAL ASPECTS The Group are well experienced in procuring Wheat and trading in Wheat based products for the last 5 years. The core founders are qualified and experienced persons and posses all required technical know-how in selling their products and commercial expertise to run the business of a day to day basis.. The founders would be on full time occupation with the company. A suitable and broad based marketing network is already available which could be taken expanded further if found necessary to achieve for proposed sales targets. FINANCIAL ASPECTS The Capital investment proposed is comparatively low and the founders have necessary resources to bring in and organize the proposed capital. The financial assistance sought from Bank is well within normal of lending. The projected operational results show reasonable profit generation by the unit to enable it to meet its debt servicing obligations. A considerable part of cash generation is also proposed to be ploughed back every year to supplement future working capital requirement. Thus the venture is a thoroughly well planned organization and is a sound and viable proposition.

  Matrix Consulting_ 101, Durga apartments, Rajbhavan Road, Hyderabad 0 9989 040404               21