PROJECT HIGHLIGHT

1 Name of Project: Lumbini Agro Products and Research Centre Pvt. Ltd.
2 Location Tikuligirh-7, Rupandehi, Lumbini, Nepal
3 Type of Industry Livestock (Cattle farming)

4 Capacity #REF! Milch Animals

4 Production #REF! liters of milk & milk products

5 Total Project Cost : 15814
Fixed Capital: 11632
Working Capital: 4182

6 Bank Finance : 5014

Fixed Capital: 2505
Working Capital: 2509

7 Equity Finance : 10799

Fixed Capital: 9127
Working Capital: 1673
8 Annual Sales Revenue : 15732

9 Annual Operating Cost : 13221

10 Net Profit : 1628

11 Break Even Point : 29%

12 Return on Investment (1st yr) : 10%

13 Return on Equity (1st yr): 15%

14 Debt Service Coverage Ratio (1st yr) 4.2

15 Simple Pay Back Period: 4 Years

0 Months

16 Internal Rate Of return: 18%

17 Net Present Value:(Rs.'000): 4955

18 Benefit Cost Ratio 1.14

 PROJECT HIGHLIGHTS

1 Name of Project Ruma Poultry Farm

2 Major Promoters & Contact Person Shambhu Yadav
3 Address & Project Locations Majhaura, Bishanpur-7, Mahottari
4 Type of Project Unit)
5 Project Capacity 10000 Birds per lot
6 Breeds
8 Sources of chicks Local markets
8 Life cycle 8 weeks
10 Meat Production Live weight 2.5 Kg per bird
11 Markets:
- Inputs Local markets
- Outputs Local markets
12 Experience of the Promoters More than 6 years
13 Total Project Cost, (Rs. in '000) 15814
Fixed Capital 11632
Working Capital 4182
14 Equity Finance (Rs. in '000) 10799
Fixed Capital 9127
Working Capital 1673
15 Bank Finance (Rs. in '000) 5014
Fixed Capital 2505
Working Capital 2509
16 Annual Sales Revenue (Rs. in '000) 15732
17 Annual Operating Cost (Rs. in '000) 13221
18 Net Profit in first year (Rs. in '000) 1628
19 Break Even Point (in Percentage) (BEP) 29%
20 Return on Investment (ROI) (in first ye 10.3%
21 Return on Equity (ROE) (in first year) 15.1%
22 Simple Payback Period (in Years) 4.15
23 Debt Service Coverage Ratio (DSCR) 4.2
24 Internal Rate of Return (IRR) 18.2%
25 Net Present Value (NPV) (Rs. in '000) 4955
26 Benefit Cost Ratio (BCR) 1.14
 Annex-1

SOURCES OF FINANCE

(Rs.'000)
SN Items Total Equity Bank
Amount Finance Loan
A Fixed Asset Investment 11632 9127 2505
100% 78% 22%
1 Land & Land Development 3600 3600 0
3 Building & Civil Works 5104 3216 1888
4 Machineries & Equipments 849 339 509
5 Furniture & Office Equipments 145 58 87
6 Vehicle 1900 1900 0
7 Pre-operating Expenses 35 14 21

B Working Capital Investment 4182 1673 2509

100% 40% 60%
C Total Investment 15814 10799 5014
 Annex 2
FIXED ASSETS INVESTMENT
Annex-2

(Rs '000')
Rate/Un Sub Total
SN Particulars Unit Quantity
it Total Amt
1 Land & Land Development 3600
Land (Own) Katha 12 300.000 3600
Land Development % 0
2 Building & Civil Works 5104
a) Poultry shed Sqft 10000 0.500 5000
b) Office building Sqft 120 0.700 84
e) Electrification LS 1 10.000 10
f) Water supply and sanitation complete LS 1 10.000 10
3 Machinery and Equipment 849
a) Gas Brooder Set 8 7.500 60
b) Feeder 1 pcs per 20 chicken bird Set 800 0.425 340
c) Drinker 1 pcs per 20 chicken bird Set 800 0.425 340
d) Electric De-beaker Set 10.000 0
e) Cooling fan/ceiling fan for shed Set 25 2.500 63
f) Diesel generator Set 1 40.000 40
j) Other tools and equipment LS 1 6.000 6
h) Heater pcs 8 2.200 18
5 Furniture & Office Equipment 145
a) Office table Set 2 6.500 13
b) Office chair Set 3 3.500 11
c) Visitor chair Set 3 3.000 9
d) 112
6 Vehicle 1900
4- whealer Pick up Nos. 1 1900.000 1900
Motorbike Nos. 2 175.000
7 Pre-operating expenses 35
Feasibility Study and Report L.S. 1 10.000 10
Registration L.S. 1 15.000 15
Travelling L.S. 1 10.000 10

TOTAL FIXED ASSET INVESTMENT 11632

 Annex-3

ANNUAL OPERATING COST

Fixed Cost Estimation (Rs '000)

Rate/U Sub Total
SN Particulars Unit Quantity
nit Total Amt
1 Depreciation: 654
- Buildings & Civil works 5104 5% 255
- Machinary & Equipment 849 10% 85
- Furnitures & Office Equipment 144.5 20% 29
- Vehicle 1900 15% 285

2 Ammortization of Pre Operating

Expenses 35 10% 4 4

3 Insurance, @1% of fixed asset

(excluding land value & P/O cost) 7997 1% 80 80

4 Office Overhead 270

- Printing and Stationery 20 0
- Telephone charges 20 2 40
- Guest entertainment 25 2 50
- Travel and Tours 70 2 140
- Auditing and Legal Consultancy 20 2 40

5 Fixed Electricity Charge (DemandKVA

Charge) 2 1 24 24

6 Indirect Labor 0
- Manager cum accountant Nos. 0 10 0
- Technical consultant Nos. 0 1 0

7 Interest on Term Loan 0 10% 0 0

Total Fixed Costs 1031
contd.,
 Annex 4

ANNUAL OPERATING COST (Cont…)

Variable Cost Estimation (Rs '000)
Rate Sub Total
SN Particulars Unit Quantity
/Unit Total Amt
1 Raw Materials 10344
a) Broiler chicks (mortality rate 10%) Nos. 38000 0.07 2660 unit norm
b) BPS @ 0.5 kg/bird per lot Kg. 17100 0.058 992
b) B1 Feed Broiler starter @ 1 Kg/bird per lot) Kg. 34200 0.057 1949
d) B2 Feed Broiler Finisher @ 2 Kg/bird per lot) Kg. 68400 0.056 3830
e) Vaccination and medicine (@ Rs. 20/bird per lo Nos. 34200 0.025 855
b) Litter/bhusi/ kunni (@ Rs. 15/Bird per lot) Bags 3800 0.015 57
2 Direct Labour 1104
- Farm Supervisor Montlhy Basis Nos. 1 ### 240
- Poultry man/worker Montlhy basis Nos. 6 ### 864
3 Utilities 150
- Electricity (Energy Charge, @Rs.6.50/unit) Months 12 1.000 12
- Water Months 12 0.500 6
Poultry Shed Rent Months 12 ### 120
- Others (Fuel & lubricant) Months 12 1.000 12
4 Repair & Maintenance: 183
- Building & civil sttructue 5104 2% 102
- Machinery & eqipment 849 2% 17
- Furniture & office equipment 144.5 5% 7
- Vehicles 1900 3% 57
5 Interest on Short Term Loan 2509 10% 251 251
6 Promotional Expenses @1% sales 15732 1% 157 157
TOTAL VARIABLE COST: 12189
TOTAL FIXED COST: 1031
TOTAL ANNUAL OPERATING COST: 13221
 Annex-5

ANNUAL SALES REVENUE

(At 100 % Capacity Utilisation)

(Rs '000)
SN Particulars Unit QTY Rate Revenue

1 Meat Kg 85500 0.1800 15390

3 Litter/Manure Kg 68400 0.005 342

TOTAL 15732
 Annex-6
WORKING CAPITAL

Annual operating Days: 365 (Rs '000)

SN Year Of Operation MDR COT 1 2 3 4 5 6 7 8 9 10
Capacity Utilisation 80% 90% ### ### ### ### ### ### ### 100%
A CURRENT ASSETS:
1 Inventory:
Raw Material 60 6 1360 1530 1700 1700 1700 1700 1700 1700 1700 1700
Work in Process * 45 8 1165 1310 1455 1455 1455 1455 1455 1455 1455 1455
Finished Goods ** 11 33 295 331 366 366 366 366 366 366 366 366
2 Account Receivable 39 9 1345 1513 1681 1681 1681 1681 1681 1681 1681 1681
3 Cash in Hand 7 52 29 32 35 35 35 35 35 35 35 35
Total : 4194 4716 5238 5238 5238 5238 5238 5238 5238 5238

B CURRENT LIABILITIES:
1 Account Payable *** 30 9 13 14 16 16 16 16 16 16 16 16
2 WORKING CAPITAL REQUIREMENT: 4182 4702 5222 5222 5222 5222 5222 5222 5222 5222
- Increase in W/C 520 520 0 0 0 0 0 0 0
- Short Term Loan 2509 2821 3133 3133 3133 3133 3133 3133 3133 3133
- Equity in Working Capital 1673 1881 2089 2089 2089 2089 2089 2089 2089 2089
- Interest On STL @10.0% 10% 251 282 313 313 313 313 313 313 313 313

C CALCULATION OF CASH REQUIREMENT:

Operating Cost 9799 ### ### ### ### ### ### ### ### 12155
Less Raw Material 8275 9309 ### ### ### ### ### ### ### 10344
Required Cash Balance 1524 1668 1811 1811 1811 1811 1811 1811 1811 1811
* Valued at factory cost less raw materials
** Valued at sales revenue
*** Utility
MDR= Minimum Days Requirement
COT= Coefficient of Turnover
 Annex-7
ANNUAL PRODUCTION ESTIMATIONS
(Rs '000)
SN Year Of Operation 1 2 3 4 5 6 7 8 9 10
Capacity Utilisation 80% 90% 100% 100% 100% 100% 100% 100% 100% 100%
A Raw Materials
1 Main Raw Materials 8275 9309 10344 10344 10344 10344 10344 10344 10344 10344
2 Utility Charge 120 135 150 150 150 150 150 150 150 150
3 Direct Labour 883 994 1104 1104 1104 1104 1104 1104 1104 1104
3 Repair & Maintaince 147 165 183 183 183 183 183 183 183 183
4 Plant overhead 24 24 24 24 24 24 24 24 24 24

B Factory cost 9449 10627 11805 11805 11805 11805 11805 11805 11805 11805
C Administrative Overheads** 350 350 350 350 350 350 350 350 350 350

D Operating cost : 9,799 ### ### ### ### ### ### ### ### 12,155

E Financial Cost 501 492 478 428 373 313 313 313 313 313
- Interest on LTL 251 209 164 115 60 0 0 0 0 0
- Interest on STL 251 282 313 313 313 313 313 313 313 313
F Depreciation & Ammorti 657 657 657 657 657 657 657 657 657 657

Total Production Cost 10958 12126 13290 13240 13186 13126 13126 13126 13126 13126

* Indirect labour + electricity charge

** Office Overhead + insurance
 Annex-8

PROFIT & LOSS ESTIMATIONS

(Rs.'000)
SN Year Of Operation 1 2 3 4 5 6 7 8 9 10
Capacity Utilisation 80% 90% 100% 100% 100% 100% 100% 100% 100% 100%
1 Sales Revenue 12586 14159 15732 15732 15732 15732 15732 15732 15732 15732
2 Operating Cost 9799 10977 12155 12155 12155 12155 12155 12155 12155 12155
3 Gross Operating Profit 2787 3182 3577 3577 3577 3577 3577 3577 3577 3577

4 Depreciation & Ammmortisati 657 657 657 657 657 657 657 657 657 657

5 Profit Before Interest & Ta 2129 2525 2920 2920 2920 2920 2920 2920 2920 2920
6 Financial Cost 501 492 478 428 373 313 313 313 313 313

7 Profit Before Tax 1628 2033 2442 2492 2546 2606 2606 2606 2606 2606

8 Tax 0 0 0 0 0 0 0 0 0 0

9 Net Profit 1628 2033 2442 2492 2546 2606 2606 2606 2606 2606

10 Retained earning 1628 3661 6103 8595 11141 13748 16354 18960 21567 24173

11 Operating performances:
Gross profit / Sales 22% 22% 23% 23% 23% 23% 23% 23% 23% 23%
PBIT / Sales 17% 18% 19% 19% 19% 19% 19% 19% 19% 19%
Net profit / Sales 13% 14% 16% 16% 16% 17% 17% 17% 17% 17%
 Annex-9
REPAYMENT SCHEDULE OF LONG TERM LOAN

I. Repayment Schedule with Equal Installment

Long Term Loan : 2505

Interest Rate : 10.0%
Capital Recovery Factor 0.26380
Installment : 661
Repayment Time: 5 Year
(Rs '000)
SN Year 0 1 2 3 4 5
1 Installment 661 661 661 661 661
2 Principal 410 451 497 546 601
3 Interest 251 209 164 115 60
4 Loan Outstanding 2505 2095 1644 1147 601 0
 Annex-10
PROJECTED CASH FLOW

(Rs. '000)
SN Year Of Operation 0 1 2 3 4 5 6 7 8 9 10
Capacity Utilisation 80% 90% 100% 100% 100% 100% 100% 100% 100% 100%
I CASH INFLOW:
Equity In Fixed Assets 9127
Equity in Working Capital 1673 208 208 0 0 0 0 0 0 0
Long Term Loan 2505
Short Term Loan 2509 2821 3133 3133 3133 3133 3133 3133 3133 3133
Gross Operating Profit 2787 3182 3577 3577 3577 3577 3577 3577 3577 3577

Total Inflow: 11632 6969 6211 6918 6710 6710 6710 6710 6710 6710 6710

II CASH OUTFLOW:
Capital Expenditure 11632
Working Capital(increase/Invest.) 4182 520 520 0 0 0 0 0 0 0
LTL Installment 661 661 661 661 661 0 0 0 0 0
Repayment Of Working Capital 2509 2821 3133 3133 3133 3133 3133 3133 3133
Interest On STL 251 282 313 313 313 313 313 313 313 313
Corporate Tax 0 0 0 0 0 0 0 0 0 0

Total Outflow: 11632 5093 3972 4315 4107 4107 3446 3446 3446 3446 3446

III Net Surplus/Deficit -11632 1875 2239 2603 2603 2603 3264 3264 3264 3264 3264
IV Accumulated Cash Balance: -11632 1875 4114 6717 9320 11923 15187 18451 21715 24979 28242
 Annex-11

PROJECTED BALANCE SHHET

(Rs. '000)
Year Of Operation 1 2 3 4 5 6 7 8 9 10
Capacity Utilisation 80% 90% 100% 100% 100% 100% 100% 100% 100% 100%

A. ASSETS: 17044 19147 21615 23560 25506 28112 30718 33325 35931 38538
1.Accumulated Cash Balan 1875 4114 6717 9320 11923 15187 18451 21715 24979 28242

2.Current Assets 4194 4716 5238 5238 5238 5238 5238 5238 5238 5238

3.Fixed Assets net of Depre 10975 10317 9660 9002 8345 7687 7030 6372 5715 5058
& ammortisation

B.LIABILITIES: 17044 19147 21615 23560 25506 28112 30718 33325 35931 38538
1.Paid up Capital 10799 11007 11215 11215 11215 11215 11215 11215 11215 11215

2. Long Term Loan 2095 1644 1147 601 0 0 0 0 0 0

3.Current Liabilities 2522 2835 3149 3149 3149 3149 3149 3149 3149 3149

4.Accumulated Profit 1628 3661 6103 8595 11141 13748 16354 18960 21567 24173
 Annex-12

Break-Even Analysis

(Rs '000)

1. Total Fixed Cost 1031

2. Total Variable Cost 12189

3. Annual Sales Revenue 15732

Fixed Cost
BEP in Percentage = ---------------------------------------------
Sales - Variable Cost

= 1031
3543

= 29%

BEP in Sales, in Rs. = 4580

Annex 13

SIMPLE PAY BACK PERIOD

(Rs '000)
SN Year Of Operation 0 1 2 3 4 5

1 Net Profit -11632 1628 2033 2442 2492 2546

2 Depreciation & Ammortisation 657 657 657 657 657

3 Profit before Depre. & Ammor. 2286 2690 3100 3149 3204

4 Cumulative Profit -11632 -9346 -6656 -3557 -407 2796

Simple Pay Back Period = 4.15 Years

 Annex -14

FINANCIAL RATIOS

Year Of Operation 1 2 3 4 5
1. Return on Investmen 10% 13% 15% 16% 16%

A.Profit 1628 2033 2442 2492 2546

B.Total Investment 15814 15814 15814 15814 15814

2. Return on Equity: 15% 19% 23% 23% 24%

A.Net Profit 1628 2033 2442 2492 2546

B.Total Equity 10799 10799 10799 10799 10799

3. DSCR 4.22 4.81 5.41 5.41 5.41

A. Gross Oper. Profit 2787 3182 3577 3577 3577

B. Installment 661 661 661 661 661

 Annex15

CALCULATION of NPV & BCR

(Rs '000)
Year of D.F., @ Benefit PV of Cost PV of
Operation 10% Benefit Cost
0 1.0000 0 0 11632 11632
1 0.9091 6969 6335 5093 4630
2 0.8264 6211 5133 3972 3283
3 0.7513 6918 5198 4315 3242
4 0.6830 6710 4583 4107 2805
5 0.6209 6710 4166 4107 2550
6 0.5645 6710 3788 3446 1945
7 0.5132 6710 3443 3446 1768
8 0.4665 6710 3130 3446 1608
9 0.4241 6710 2846 3446 1462
10 0.3855 6710 2587 3446 1329
Total 41210 36254

NPV = PV of Benefit - PV of cost = 4955

BCR = PV of benefit/ PV of cost = 1.14

 Annex 16

CALCULATION OF INTERNAL RATE OF RETURN (IRR)

(Rs '000)
Year of Net Low DF, @ PV of High DF PV of
Operation Cash flow 40% Low DF 45% High DF
0 -11632 1.000 -11632 1.000 -11632
1 1875 0.714 1339 0.690 1293
2 2239 0.510 1142 0.476 1065
3 2603 0.364 949 0.328 854
4 2603 0.260 678 0.226 589
5 2603 0.186 484 0.156 406
6 3264 0.133 433 0.108 351
7 3264 0.095 310 0.074 242
8 3264 0.068 221 0.051 167
9 3264 0.048 158 0.035 115
10 3264 0.035 113 0.024 79
Total -5805 -6470

(PV of Low DF)

IRR =Low DF+Diff. between High and Low DF X
(PV of low DF - PV of high DF))

IRR = 18%
 Annex 17
SENSITIVITY ANALYSIS

A) If Fixed Cost increases by 10 %:

1. Total Fixed Cost = 1135

2. Total Variable Cost = 12189
3. Annual Sales Revenue = 15732

Fixed Cost
BEP In Percentage = Sales - Variable Cost

= 32%

B) If Variable cost increases by 10 %:

1. Total Fixed Cost 1031

2. Total Variable Cost 13408
3. Annual Sales Revenue 15732
Fixed Cost
BEP In Percentage = Sales - Variable Cost

= 44%
C) If Sales decreases by 10%

1. Total Fixed Cost 1031

2. Total Variable Cost 12189
3. Annual Sales Revenue 14159
Fixed Cost
BEP In Percentage = Sales - Variable Cost

= 52%
 Annex-10 A

CASH FLOW PROJECTION (New project)

(Rs. '000)
Year Of Operation 0 1 2 3 4 5 6 7 8 9 10
Capacity Utilisation 80% 90% 100% 100% 100% 100% 100% 100% 100% 100%

CASH INFLOW:
Sales Revenue 12586 14159 15732 15732 15732 15732 15732 15732 15732 15732
Salvage Value 1150

Total Inflow: 0 12586 14159 15732 15732 15732 15732 15732 15732 15732 16882

CASH OUTFLOW:
Capital Expenditure 11632 20 800
Operating cost 9799 10977 12155 12155 12155 12155 12155 12155 12155 12155

Total Outflow: 11632 9799 10977 12155 12155 12175 12155 12955 12155 12155 12155

Net Cash Flow ### 2787 3182 3577 3577 3557 3577 2777 3577 3577 4727

Internal Rate Of Return: 25.55 %

Net Present Value:(Rs.) 6356
 Annex-10 B

CASH FLOW PROJECTION (Ongoing project)

(Rs. '000)
Year Of Operation Existing 0 1 2 3 4 5 6 7 8 9 10
Capacity Utilisation (%) Project 60% 70% 80% 90% 90% 90% 90% 90% 90% 90%

I. CASH INFLOW:
Sales Revenue 2500 6342 7399 8456 9513 9513 9513 9513 9513 9513 9513
Salvage Value 1150

Total Inflow: 2500 0 6342 7399 8456 9513 9513 9513 9513 9513 9513 10663

II. CASH OUTFLOW:

Capital Expenditure 4345 20 800
Operating cost 1500 4946 5726 6506 7286 7286 7286 7286 7286 7286 7286

Total Outflow: 1500 4345 4946 5726 6506 7286 7306 7286 8086 7286 7286 7286

III.Net Cash Flow 1000 -4345 1396 1673 1950 2227 2207 2227 1427 2227 2227 3377
IV Net incremental Cash F 0 -5345 396 673 950 1227 1207 1227 427 1227 1227 2377