PROJECT REPORT ON A DAIRY UNIT PROMOTED BY
A.RASHEED OF NEDUMANGAD TALUK IN TRIVANDRUM
DISTRICT
INTRODUCTION
Dairy has widely been recognised as the most important subsidiary occupation of rural
majority in India. The scheme envisaged here is the advancement of existing diary business by
purchasing additional cows to ensure a reasonable regular income to the promoter. This diligent,
earnest, hard, working person possessing 2 acres of land that is well suited for dairying can be
expected to run the proposed dairy economically. Their agrarian background & experience in farming
will add to the profitability of the scheme. Provision has been made in the scheme to produce
sufficient quantity of green fodder in the above 2 acres in order to minimize the cost of milk
production in the proposed unit. Construction of scientifically designed farm building (cattle shed) has
also been incorporated in the scheme.
STRENGTH OF THE HERD & PURCHASE OF MILCH ANIMALS
The strength of the proposed dairy farm shall be 60 milch animals consisting of 50 cows & 10
buffaloes. Each of which will produce an average of 12 litres of milk per day. The lactation period is
estimated to 270 days in a year. The estimated average cost of each milch animal is expected to be Rs
14,000. The purchase of Jersey cows & buffaloes will be made from Matttupetty, Theny & Nagercoil.
BANK LOAN
Company proposes to close the Loan account with Palode Co-operative agricultural bank (balance
……….)and to avail a loan of Rs ------------- from State bank of India Vallimala Br.
LOCATION OF THE FARM – THE INFRASTRUCTURE
Two acres of land possessed by A. RASHEED is using for the farm. Adequate transportation
facility, availability of good drenching water, uninterrupted power supply of electricity, proximity to
the veterinary institution & nearness of the Atttukal milk society & Kurupuzha milk society makes the
site well suited for the farm.
The details of expenditure regarding cattle shed, godown & office room are as follows :
I. CATTLE SHED
Abstract estimate of the proposed cattle shed in survey no. 22/1:2 of Anadu village of Nedumangad
taluk in Trivandrum district.
n------------------------------------------------------------------------------------------------------------
Area of cattle shed = 2,400 sq ft
1. Clearing the site : 3,000.00
2.Earthwork excavation in all classes of soil except rock
& filling it inside the basement, including all leads & lifts
involved . [ QTY 44 m3 @ Rs.700 / 10 m3 ] : 3,080.00
3. Random rubble masonry work in cement mortar 1:8 for
foundation & basement including all costs.
(foundation + basement ) [QTY 68 m3 @ Rs.600 / m3] : 40,800.00
4. Brick work in cement mortar 1:6 using Ist class burnt bricks
including cost & conveyance materials & labour charges for
scaffolding, watering, curing, etc.
[ Say 34 m3 @ Rs.1229 / m3 ] : 41,786.00
5. (a) Supplying & fixing the iron sheet roof with Anjili wood
already fixed including all labour charges including wall
plate ridge piece, common rafter & reaper. : 22,000.00
(b) Supplying & fixing the iron sheet roof already fixed
including all labour charges, fixing all fittings, etc completed : 18,000.00
6. Supplying & fixing a wire mesh to suit the side of the cattle
shed already fixed inclusive of all labour charges, fixing all
fittings, etc completed : 12,000.00
7. Plastering with cement mortar 1:6 12mm thick one coat
towards floated hard & trowel smooth including scaffolding
watering, curing , etc complete.
[QTY 238 m2 @ Rs 500/10 m2 ] : 11,900.00
8. Flooring with cement concrete 1:4:8 using 40mm broken stone
plastered above 12mm thick cement plastering in 1:4 floated
hard [ QTY 240 m2 @ Rs 1457 /10 m2 ] : 34,968.00
9. White washing the walls inside & outside
[ QTY 238 m2 @ Rs 20 / m2 ] : 4,760.00
10. Providing electrification of 8 % of total : 18,400.00
11. For sanitary arrangements of 7% of total LS : 16,100.00
12. Unforeseen items LS : 3,206.00
--------------------
TOTAL : Rs 2,30,000.00
( Rs TWO LAKH THIRTY THOUSAND ONLY) ============
II. STORAGE BUILDING FOR STORING PADDY STRAW, CATTLE FEED,
VESSELS, ETC.
Abstract estimate of the proposed storage building.
-------------------------------------------------------------
1. Clearing the site : 1,000.00
2.Earthwork excavation in all classes of soil except rock
& filling it inside the basement, including all leads & lifts
involved . [QTY 7 m3 @ Rs.700 / 10 m3 ] : 490.00
3. Random rubble masonry work in cement mortar 1:8 for
foundation & basement including all costs.
(foundation + basement ) 7 m3 + 6 m3
[QTY 13 m3 @ Rs.600 / m3] : 7,800.00
4. Brick work in cement mortar 1:6 using Ist class burnt bricks
including cost & conveyance materials & labour charges for
scaffolding, watering, curing, etc.
[ QTY 20 m3 @ Rs.1229 / m3 ] : 24,580.00
5. Reinforced cement concrete work in 1:2:4 using 20 mm
nominal size broken stone for slabs, lintels, sun shade,
including all forms of work, watering, curing, completed
[ QTY 4,290 dm3 @ Rs.40 / 10 dm3 ] : 17,160.00
6. Providing for steel reinforcement concrete work bent, tied
placed in position
[ QTY 4.50 qtl @ Rs 1700 / qtl ] : 7,650.00
7. Plastering with cement mortar 1:6 12mm thick one coat
towards floated hard & trowled smooth including scaffolding
watering, curing , etc complete.
[QTY 225 m2 @ Rs 500/10 m2 ] : 11,250.00
8. Flooring with plain cement concrete 1:4:8 using 40mm broken
stone plastered above 12mm thick cement plastering in 1:4
floated hard
[ QTY 42 m2 @ Rs 1460 /10 m2 ] : 6,132.00
9. Supplying & fixing doors & windows with Jack wood including
2 panel window shutter & door shutters LS : 7,000.00
10. Supplying & fixing iron clamp of size 60mm x 25 mm x 350 mm
long 2 doors & windows including window bars LS : 2,500.00
11. Painting with enamel paint 2 coats for wood work for 2 doors
& windows & ventilators LS : 5,000.00
12. Plastering with cement mortar 1:3, 9 mm thick 2 coats plaster
to underside of roof slab, sunshade floated hard & trowled
smooth.
[ QTY 42 m2 @ Rs 600 /10 m2 ] : 2,520.00
13. White washing on walls inside & outside LS : 2,000.00
14. Providing electrification of 8 % of total : 8,000.00
15. For sanitary arrangements : 3,000.00
16. Unforeseen items : 3,918.00
--------------------
TOTAL : Rs 3,10,000.00
( Rs THREE LAKH TEN THOUSAND ONLY) ============
III. OFFICE BUILDING
Abstract estimate of the proposed office building.
-------------------------------------------------------------
1. Clearing the site : 500.00
2. Earthwork excavation in all classes of soil except rock
& filling it inside the basement, including all leads & lifts
involved . [QTY 6 m3 @ Rs.700 / 10 m3 ] : 420.00
3. Random rubble masonry work in cement mortar 1:8 for
foundation & basement including all costs.
(foundation + basement )
[QTY (6+3 ) 9m3 @ Rs.600 / m3 ] : 5,400.00
4. Brick work in cement mortar 1:6 using Ist class burnt bricks
including cost & conveyance materials & labour charges for
scaffolding, watering, curing, etc.
[ QTY 8 m3 @ Rs.1229 / m3 ] : 9,832.00
5. Reinforced cement concrete work in 1:2:4 using 20 mm
nominal size broken stone for slabs, lintels, sun shade,
including all forms of work, watering, curing, completed
[ QTY 1,560 dm3 @ Rs.40 / 10 dm3 ] : 6,240.00
6. Providing for steel reinforcement concrete work bent, tied
placed in position
[ QTY 1.56 qtl @ Rs 1700 / qtl ] : 2,652.00
7. Plastering with cement mortar 1:6 12mm thick one coat
towards floated hard & trowled smooth including scaffolding
watering, curing , etc complete.
[QTY 110 m2 @ Rs 500/10 m2 ] : 5,500.00
8. Flooring with plain cement concrete 1:4:8 using 40mm broken
stone plastered above 12mm thick cement plastering in 1:4
floated hard
[ QTY 12 m2 @ Rs 1460 /10 m2 ] : 1,752.00
9. Supplying & fixing doors & windows with Jack wood including
2 panel window shutter & door shutters LS : 5,000.00
10. Supplying & fixing iron clamp of size 60mm x 25 mm x 350 mm
long 2 doors & windows including window bars LS : 1,500.00
11. Painting with enamel paint 2 coats for wood work for 2 doors
& windows & ventilators LS : 2,000.00
12. Plastering with cement mortar 1:3, 9 mm thick 2 coats plaster
to underside of roof slab, sunshade floated hard & trowled
smooth.
[ QTY 12 m2 @ Rs 600 /10 m2 ] : 720.00
13. White washing on walls inside & outside LS : 1,000.00
14. Providing electrification of 8 % of total : 4,000.00
15. For sanitary arrangements 7% of total : 3,500.00
16. Unforeseen items : 2,484.00
--------------------
TOTAL : Rs 52,500.00
( Rs FIFTY TWO THOUSAND & FIVE HUNDRED ONLY) ============
WATER, ELECTRICITY & UTENSILS
An overhead tank & water pumping system (with electric motor of 1.5 hz power) shall be
provided in the farm in order to ensure a regular water supply sufficient for cattle as well as the fodder
crops.
Abstract estimate of the proposed water tank.
-------------------------------------------------------------
1. Earthwork excavation in all classes of soil except rock
[QTY 6 m3 @ Rs.600 / 10 m3 ] : 360.00
2. Random rubble masonry work in cement mortar 1:10 for
foundation & basement
[QTY 11 m3 @ Rs.500 / m3 ] : 5,500.00
3. Reinforced cement concrete work in 1:2:4 using 20 mm
nominal size broken stone for side wall of the tank,
including all form of work, watering, curing, completed
[ QTY 1,120 dm3 @ Rs.5 dm3 ] : 5,600.00
4. Providing for steel reinforcement concrete work bent, tied
placed in position
[ QTY 1.50 qtl @ Rs 1700 / qtl ] : 2,250.00
5. Plastering with cement mortar 1:6 12mm thick one coat
towards floated hard & trowled smooth including scaffolding
watering, curing , etc complete.
[QTY 125 m2 @ Rs 600/10 m2 ] : 7,500.00
6. Flooring with plain cement concrete 1:4:8 using 40mm broken
stone plastered above 12mm thick cement plastering in 1:4
floated hard
[ QTY 24 m2 @ Rs 1500 /10 m2 ] : 3,600.00
7. Unforeseen items : 190.00
--------------------
TOTAL : Rs 25,000.00
( Rs TWENTY FIVE THOUSAND ONLY) ============
Estimated cost of renewal of existing pond by laying bricks
in all the side. = Rs.25,000.00
Cost of electric motor (1.5 hp) & installation cost = Rs.10,000.00
Electric connection charges (3 phase ) =Rs.5,000.00
Cost of vessels, utensils required for handling milk, feeding
Of cattle fodder, cattle feed =Rs.15,000.00
--------------------
TOTAL Rs 80,000.00
============
ARRANGEMENT FOR PROCURING GREEN GRASS & DRY FODDER
The beneficiaries of the scheme propose to set apart 2 acres of land for fodder cultivation with
an average yield of 225 tons per year, which will be sufficient to feed the 60 milch animals. All the
facilities for fodder cultivation shall be provided by the milk cooperative society.
Average green fodder required by a milch animal per day = 10 kg
Total green fodder required for 60 milch animal for the year (10 x 60 x 365) = 2,19,000 kg
To meet the dry matter requirements of the herd, to supplement the green fodder the
beneficiaries of the scheme will have to purchase paddy straw from Tamil Nadu .
The average dry fodder required by a milch animal per day = 10 kg
Cost per kg of dry fodder = 70 paise
Total quantity required per year (60 x 10 x 365) = 2,19,000kg
Total cost (2,19,000 x 0.70) = Rs 1,53,300
===========
The balanced & highly nutritious Milma cattle feed can be purchased from the nearby milk society.
The average daily cattle feed required by a milch cattle = 7 kg
Cost per kg of cattle feed = 7 kg
Total quantity required (1,53,300 x 7) = Rs 10,73,100
===========
VETERINARY CARE & GENERAL MANAGEMENT OF CATTLE
The beneficiary can avail veterinary service extended by Milma at subsidised cost or on nominal
charge. They can also make use of all technical inputs provided to the society by different state
agencies that promote dairying so as to produce maximum milk at minimum cost.
SALE OF MILK & INCOME FROM THE FARM
The greatest advantage for the beneficiary of this scheme is that there are milk societies nearby
under the control of Milma, thus providing them a safe & complete market for the entire milk
produced in the farm & ensuring steady remuneration price for it. The mixed milk of cow & buffaloes
is expected to get a price of Rs 10.50/ litre on an average. The income towards sale of cow dung &
sale of male calves ( 20 no.s per year) shall be sufficient to feed & manage the growing cows.
BANK LOAN
It is expected that Rs 10 lakhs for fixed expenditure can be taken as a term loan & Rs.75,000
for working capital as a working capital loan from the State Bank of Travancore. Term loan shall have
to be repaid in monthly installments with interest. The beneficiary shall be in a position to offer
collateral security as decided by the bank & shall comply with other terms & conditions if any, as laid
down by the bank in this regard. The beneficiary will finance the balance amount required for the cost
of fixed asset & working capital requirements.
The economics is worked out for a period of 5 years within which the repayment of the bank loan
shall be completed. The depreciation of animals has not been accounted for in view of the appreciation
of newly born calves (25 no.s per year) that shall become productive within 3 years after their birth
provided they are well fed & managed.
LOAN REQUIREMENT
TOTAL PROJECT EQUITY TERM WORKING CAPITAL
COST AMOUNT LOAN LOAN
14,43,300.00 3,68,300.00 10,00,000.00 75,000.00
PROJECTED COST & MEANS OF FINANCE
Investment in fixed asset
1) Cost of 60 milch animals @ Rs 14,000 = Rs 8,40,000.00
Add : Transportation cost of animals from other state = Rs 30,000.00
--------------------- 8,70,000.00
2) Expenditure towards construction of
(a) cattle shed = Rs 2,30,000.00
(b) godown = Rs 1,10,000.00
(c) office building = Rs 52,500.00
----------------------- 3,92,500.00
3) Cost of water supply system
(a) Cost of construction of overheads tank = Rs 25,000.00
(b) Estimated cost of renewal of existing pond
by laying bricks on all sides = Rs 25,000.00
-------------------- 50,000.00
4) Cost of electric motor (1.5 hp) & installation cost 10,000.00
5) Cost of electricity connection charges 5,000.00
6) Cost of vessels, utensils required for handling of
milk, feeding cattle fodder, etc. 15,000.00
--------------------
TOTAL 13,42,500.00
WORKING CAPITAL REQUIREMENTS
PARTICULARS HOLDING AMOUNT
PERIOD
1. Stock of cattle feed & dry 1 month 1,00,800.00
fodder (see note below)
2. Sundry debtors Nil Nil
3. Sundry Debtors Nil Nil
TOTAL 1,00,800.00
--------------------
TOTAL COST OF PROJECT = 14,43,300.00
==========
MEANS OF FINANCE
Term loan from SBT Nedumangad - 10,00,000.00
Working capital capital loan from from SBT - 75,000.00
Promoter’s contribution - 3,68,300.00
-----------------
Total 14,43,300.00
==========
NOTE:
Details of cattle feed & dry fodder required for a month.
(a) Dry fodder required per day = 10 kg
cost per kg of dry fodder = 70 paise
Total cost of dry fodder required for a month = 60 x 10 x 30 x 0.70 = 12,600
(b) Cattle feed required per cattle = 7 kg
cost per kg of cattle feed = Rs. 7
Total cost of cattle feed required for a month = 60 x 7 x 30 x 7 = Rs 88,200
Total cost of dry fodder & cattle feed required for a month = (a) + (b) = Rs.100,800.00
===========
PREPARED BY :
SANTHOSH ALEXANDER & ASSOCIATES
CHARTERED ACCOUNTANTS.
LIST OF SCHEDULES & ANNEXURES TO THE SCHEDULES
1. SCHEDULE- I : PROJECTED BALANCE SHEET
2. SCHEDULE- II : PROJECTED PROFITABILITY STATEMENT
3. SCHEDULE- III: PROJECTED CASH FLOW STATEMENT
4. SCHEDULE- IV: COMPUTATION OF DEBT COVERAGE RATIO
5. ANNEXURE - 1: DETAILS OF REVENUE FROM SALE OF MILK
6. ANNEXURE – 2: DETALIS OF PURCHASE
7. ANNEXURE – 3: MANPOWER & SALARY DISBURSEMENT
8. ANNEXURE – 4: STATEMENT OF TERM LOAN REPAYMENT & INTEREST
9. ANNEXURE – 5: STATEMENT OF DEPRECIATION
10. ANNEXURE – 6: CALCULATION OF INCOME TAX
11. ANNEXURE – 7: ASSUMPTIONS MADE FOR THE PREPARATION OF
FINANCIAL STATEMENTS.
