PROJECT REPORT

Of

ANIMATION PRODUCTION UNIT

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Animation Production Unit.

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in project
identification for investment and in order to serve his objective; the document covers various aspects
of the project concept development, start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can also prepare
project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak Building ,

27/1/B, Gokhlley Marg, Lucknow-226001

Delhi Office : Multi Disciplinary Training

Centre, Gandhi Darshan Rajghat,
New Delhi 110002

Email : [email protected]
Contact : +91 7526000333, 444, 555
 PROJECT AT A GLANCE

1 Name of the Entreprenuer XXXXXXX

2 Constitution (legal Status) : XXXXXXX

3 Father's/Spouce's Name XXXXXXXX

4 Unit Address : XXXXXXXX

Taluk/Block:
District : XXXXX
Pin: XXXXX State:
E-Mail : XXXXX
Mobile XXXXX

Post Processing Animation Video Content,Audio Editing (Adding

Looping And Sound Effects), Adding Closed Captioning,Creating And
5 Services Provided : Inserting Graphics, Animation Or Special Effects Etc

6 Name of the project / business activity proposed : Animation Production Unit

7 Cost of Project : Rs 9.44 lacs

8 Means of Finance
Term Loan Rs.4.5 Lacs
KVIC Margin Money - As per Project Eligibility
Own Capital Rs.0.94 Lacs
Working Capital Rs.4 Lacs

9 Debt Service Coverage Ratio : 2.76

10 Pay Back Period : 5 Years

11 Project Implementation Period : 6 Months

12 Break Even Point : 65%

13 Employment : 11 Persons

14 Power Requirement : 8.00 HP

15 Estimated Annual Sales Turnover : 36.00 Lacs

16 Detailed Cost of Project & Means of Finance

17 COST OF PROJECT (Rs. In Lacs)

Particulars Amount
Land Rented/Owned
Building /shed 1000 Sq Ft) Rented/Owned
Plant & Machinery 4.00
Furniture & Fixtures 1.00
Working Capital Requirement 4.44
Total 9.44

MEANS OF FINANCE
Particulars Amount
Own Contribution @10% 0.94
Term Loan 4.50
Working Capital Finance 4.00

Total 9.44

General Special
Beneficiary's Margin Money 10% 5%
(% of Project Cost)
 ANIMATION PRODUCTION UNIT

INDUSTRY OVERVIEW
Animation studio business falls under the Video Postproduction Services
industry and the industry includes companies that prepare motion pictures
for public distribution by performing editing, subtitling, closed captioning,
animation and other special effects services. It is important to state that
companies that are involved in movie or television production and perform
post – production activities in-house are not part of this industry.
In recent time, following consumer disinterest in 3D film and shifting
interest from TV to online content, many animation studios have re –
strategized and repositioned their client base towards the increasing
number of online streaming services and advertisers that require editing
services for their productions, boosting revenue for the Video
Postproduction Services industry.
MARKET RESEARCH AND FEASIBILITY STUDIES

The demographic and psychographic composition of those who patronize

productions from animation studios cut across people of all genders and age
groups, and also TV stations, cinemas, video production cum online
streaming sites, and branding and advertising agencies, hence the
demographic composition of an animation studio business is all
encompassing.
The truth is that when it comes to productions from animation studios, there
is indeed a wide range of available customers. In essence, your target market
can’t be restricted to just a group of people or media houses, but all those
that have access to both terrestrial TV stations and satellite/cable TV
stations and even the online community.
So, if you are thinking of opening your own animation studio, then you
should make target demographics all encompassing; it should include
everyone.

List of Niche ideas Within the Animation Studio Business That You Can
Specialize in

It is the norm for animation studios to be creative and come up with

productions that will catch the fancy of their target audience; it could be
cartoons for children or animation advertisement for adults. That is why it
seems that there are no niche areas in the industry.
But on the other hand, some animation studio may decide to major in some
key areas such as;

 Post processing animation video content

 Audio editing (adding looping and sound effects)
 Adding closed captioning, subtitles or dubbing
 Creating and inserting graphics, animation or special effects
 Creating credits
 Formatting animation content for various media
 Receiving and incorporating feedback from test audiences
 Promotional activities
 Operating animation film libraries (preserving and storing finished
videos and stock footage).
The Level of Competition in the Animation Studio Line of Business

The bottom line is that no matter the level of competition in an industry, if

you have done your due diligence and you brand and promote your services
or business properly, you will always make headway in the industry. Just
ensure you are good and creative at producing animation contents or films,
you can deliver excellent customer care services and you know how to
attract and reach out to your target market.
But over and above, there are several animation studios, complimentary
businesses such as graphics studios, video production studios and any other
businesses that also produce animation content for media scattered all
around the United States and in the cyberspace.

Starting Your Animation Studio Business from Scratch vs Buying a

Franchise

When it comes to starting a business of this nature, it will pay you to buy the
franchise of a successful and well – established animation studio brand if you
have the funds as against starting from the scratch. Even though it is
relatively expensive buying the franchise of an established animation studio
brand, but it will definitely pay you in the long run.
Besides starting an animation studio business from the scratch is less
stressful when compared to other small-scale businesses. With an animation
studio business, you should just try as much as possible to get the right
employees, animation and graphic skills, tools and equipment, build
business relationship and network with key stakeholders and then leverage
on every marketing tool within your disposal especially the internet to
market your services.
Please note that most of the big and successful animation studios around
started from the scratch and they were able to build a solid business brand.
PROJECTED BALANCE SHEET

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

SOURCES OF FUND

Capital Account 0.94 0.94 0.94 0.94 0.94

Retained Profit 0.45 1.68 4.20 8.27 14.43

Term Loan 4.50 3.38 2.25 1.13 -

Cash Credit 4.00 4.00 4.00 4.00 4.00
Sundry Creditors 0.36 0.44 0.53 0.63 0.73

TOTAL : 10.25 10.44 11.92 14.96 20.10

APPLICATION OF FUND

Fixed Assets ( Gross) 5.00 5.00 5.00 5.00 5.00

Gross Dep. 0.65 1.26 1.77 2.22 2.60
Net Fixed Assets 4.35 3.75 3.23 2.78 2.40

Current Assets
Sundry Debtors 3.60 4.41 5.29 6.25 7.29
Stock in Hand 1.20 1.47 1.76 2.08 2.43
Cash and Bank 1.10 0.81 1.64 3.85 7.98

TOTAL : 10.25 10.44 11.92 14.96 20.10

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

A) SALES
Gross Sale 36.00 44.10 52.92 62.51 72.93

Total (A) 36.00 44.10 52.92 62.51 72.93

B) COST OF SALES

Raw Mateiral Consumed 9.00 11.03 13.23 15.63 18.23

Elecricity Expenses 0.69 0.74 0.80 0.86 0.92
Repair & Maintenance 0.50 0.44 0.53 0.63 0.73
Labour & Wages 3.30 3.63 3.99 4.39 4.83
Depreciation 0.65 0.61 0.52 0.45 0.38

Other Expenses 1.80 2.21 2.65 3.13 3.65

Cost of Production 15.94 18.65 21.72 25.08 28.74

Add: Opening Stock /WIP - - - - -

Less: Closing Stock /WIP - - - - -

Cost of Sales (B) 15.94 18.65 21.72 25.08 28.74

C) GROSS PROFIT (A-B) 20.06 25.45 31.20 37.44 44.19

55.73% 57.71% 58.96% 59.89% 60.59%
D) Bank Interest (Term Loan ) 0.37 0.45 0.32 0.20 0.08
Bank Interest ( C.C. Limit ) 0.46 0.46 0.46 0.46 0.46
E) Salary to Staff 15.18 16.70 18.37 20.20 22.23
F) Selling & Adm Expenses Exp. 3.60 6.62 9.53 12.50 14.59

TOTAL (D+E) 19.61 24.22 28.68 33.37 37.35

H) NET PROFIT 0.45 1.23 2.52 4.07 6.84

1.3% 2.8% 4.8% 6.5% 9.4%
I) Taxation - - - - 0.68

J) PROFIT (After Tax) 0.45 1.23 2.52 4.07 6.16

PROJECTED CASH FLOW STATEMENT

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

SOURCES OF FUND

Share Capital 0.94 -

Reserve & Surplus 0.45 1.23 2.52 4.07 6.84
Depriciation & Exp. W/off 0.65 0.61 0.52 0.45 0.38
Increase in Cash Credit 4.00 - - - -
Increase In Term Loan 4.50 - - - -
Increase in Creditors 0.36 0.08 0.09 0.10 0.10

TOTAL : 10.90 1.91 3.13 4.61 7.33

APPLICATION OF FUND

Increase in Fixed Assets 5.00 - - - -

Increase in Stock 1.20 0.27 0.29 0.32 0.35
Increase in Debtors 3.60 0.81 0.88 0.96 1.04
Repayment of Term Loan - 1.13 1.13 1.13 1.13
Taxation - - - - 0.68

TOTAL : 9.80 2.21 2.30 2.40 3.20

Opening Cash & Bank Balance - 1.10 0.81 1.64 3.85

Add : Surplus 1.10 - 0.29 0.83 2.21 4.13

Closing Cash & Bank Balance 1.10 0.81 1.64 3.85 7.98
COMPUTATION OF ANIMATION PRODUCTION UNIT

Services Provided Animation Production Unit

Animation Production unit per day 5 Animations

No. of Working Hour 8

No of Working Days per month 25

No. of Working Day per annum 300

Total Servicing per Annum 1,500 Animations

Animation
Year Capacity Production Unit
Utilisation

IST YEAR 60% 900.00

IIND YEAR 70% 1,050.00
IIIRD YEAR 80% 1,200.00
IVTH YEAR 90% 1,350.00
VTH YEAR 100% 1,500.00

COMPUTATION OF SERVICE

Particulars IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

Op Stock - - - - -

Servicing rendered 900.00 1,050.00 1,200.00 1,350.00 1,500.00

900.00 1,050.00 1,200.00 1,350.00 1,500.00

- - - - -

Net Serviced Vehicles 900.00 1,050.00 1,200.00 1,350.00 1,500.00

Average Rate per Animation 4,000.00 4,200.00 4,410.00 4,630.50 4,862.03

Sale (in Lacs) 36.00 44.10 52.92 62.51 72.93

COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

Consumables
(40 Days requirement) 1.20 1.47 1.76 2.08 2.43

Closing Stock 1.20 1.47 1.76 2.08 2.43

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Total
Amount
Stock in Hand 1.20

Sundry Debtors 3.60

Total 4.80
Sundry Creditors 0.36

Working Capital Requirement 4.44

Margin 0.44

Working Capital Finance 4.00

BREAK UP OF LABOUR

Particulars Wages No of Total

Per Month Employees Salary

Skilled Worker 7,500.00 2 15,000.00

Unskilled Worker 5,000.00 2 10,000.00

25,000.00
Add: 10% Fringe Benefit 2,500.00
Total Labour Cost Per Month 27,500.00
Total Labour Cost for the year ( In Rs. Lakhs) 4 3.30

BREAK UP OF SALARY

Particulars Salary No of Total

Per Month Employees Salary
Production Manager 30,000.00 1 30,000.00
Production Assistant Manager 25,000.00 1 25,000.00
Administrative Staffs 12,000.00 5 60,000.00
Total Salary Per Month 115,000.00

Add: 10% Fringe Benefit 11,500.00

Total Salary for the month 126,500.00

Total Salary for the year ( In Rs. Lakhs) 7 15.18

COMPUTATION OF DEPRECIATION

Description Land Building/shed Plant & Machinery Furniture TOTAL

Rate of Depreciation 15.00% 10.00%

Opening Balance Rented/Owned Rented/Owned - - -
Addition - - 4.00 1.00 5.00
- - 4.00 1.00 5.00
Less : Depreciation - - 0.60 0.05 0.65
WDV at end of Ist year - - 3.40 0.95 4.35
Additions During The Year - - - - -
- - 3.40 0.95 4.35
Less : Depreciation - - 0.51 0.10 0.61
WDV at end of IInd Year - - 2.89 0.86 3.75
Additions During The Year - - - - -

- - 2.89 0.86 3.75

Less : Depreciation - - 0.43 0.09 0.52
WDV at end of IIIrd year - - 2.46 0.77 3.23
Additions During The Year - - - - -
- - 2.46 0.77 3.23
Less : Depreciation - - 0.37 0.08 0.45
WDV at end of IV year - - 2.09 0.69 2.78
Additions During The Year - - - - -
- - 2.09 0.69 2.78
Less : Depreciation - - 0.31 0.07 0.38
WDV at end of Vth year - - 1.77 0.62 2.40
REPAYMENT SCHEDULE OF TERM LOAN 11.0%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

IST YEAR Opening Balance

Ist Quarter - 4.50 4.50 - - 4.50
Iind Quarter 4.50 - 4.50 0.12 - 4.50
IIIrd Quarter 4.50 - 4.50 0.12 - 4.50
Ivth Quarter 4.50 - 4.50 0.12 - 4.50
0.37 -
IIND YEAR Opening Balance
Ist Quarter 4.50 - 4.50 0.12 0.28 4.22
Iind Quarter 4.22 - 4.22 0.12 0.28 3.94
IIIrd Quarter 3.94 - 3.94 0.11 0.28 3.66
Ivth Quarter 3.66 3.66 0.10 0.28 3.38
0.45 1.13
IIIRD YEAR Opening Balance
Ist Quarter 3.38 - 3.38 0.09 0.28 3.09

Iind Quarter 3.09 - 3.09 0.09 0.28 2.81

IIIrd Quarter 2.81 - 2.81 0.08 0.28 2.53
Ivth Quarter 2.53 2.53 0.07 0.28 2.25
0.32 1.13
IVTH YEAR Opening Balance
Ist Quarter 2.25 - 2.25 0.06 0.28 1.97
Iind Quarter 1.97 - 1.97 0.05 0.28 1.69
IIIrd Quarter 1.69 - 1.69 0.05 0.28 1.41
Ivth Quarter 1.41 1.41 0.04 0.28 1.13
0.20 1.13
VTH YEAR Opening Balance
Ist Quarter 1.13 - 1.13 0.03 0.28 0.84
Iind Quarter 0.84 - 0.84 0.02 0.28 0.56
IIIrd Quarter 0.56 - 0.56 0.02 0.28 0.28

Ivth Quarter 0.28 0.28 0.01 0.28 -

0.08 1.13
CALCULATION OF D.S.C.R

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

CASH ACCRUALS 1.10 1.83 3.04 4.51 6.54

Interest on Term Loan 0.37 0.45 0.32 0.20 0.08

Total 1.47 2.28 3.37 4.71 6.62

REPAYMENT
Instalment of Term Loan 1.13 1.13 1.13 1.13 1.13
Interest on Term Loan 0.37 0.45 0.32 0.20 0.08

Total 1.50 1.57 1.45 1.33 1.20

DEBT SERVICE COVERAGE RATIO 0.98 1.45 2.32 3.56 5.50

AVERAGE D.S.C.R. 2.76

COMPUTATION OF ELECTRICITY
(A) POWER CONNECTION

Total Working Hour per day Hours 8

Electric Load Required HP 8
Load Factor 0.7460
Electricity Charges per unit 8.00
Total Working Days 300
Electricity Charges ( 8 Hrs Per day ) 114,585.60

Add : Minimim Charges (@ 10%)

(B) DG set
No. of Working Days 300 days
No of Working Hours - Hour per day
Total no of Hour -
Diesel Consumption per Hour 8
Total Consumption of Diesel -
Cost of Diesel 65.00 Rs. /Ltr
Total cost of Diesel -
Add : Lube Cost @15% -
Total -

Total cost of Power & Fuel at 100% 1.15

Year Capacity Amount

(in Lacs)

I 60% 0.69
II 65% 0.74
III 70% 0.80
IV 75% 0.86
V 80% 0.92
 DISCLAIMER

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