PROJECT PROPOSAL FOR

WCTL
(TO SUPPORT WORKING CAPITAL
FOR BUSINESS DEVELOPMENT)

Prepared for :-

M/s. A. GROCERY SHOP

D. KHEL, BOTSA
DIST. KOHIMA : NAGALAND

Proprietor - A. TSEIO ZUMU

 PROJECT AT A GLANCE

1. Name of the Project/concern : M/s. A. GROCERY SHOP

Proposed for : Proposal for WCTL to Support Working
Capital for Business Development
at D. Khel, Botsa, Dist. Kohima : Nagaland

2. Constitution : Sole Proprietorship

3. Name of the Proprietor : MR. A. TSEIO ZUMU

Botsa, P.O. Chiephobozou, Dist. Kohima, Nagaland

4. Type of Business : Grocery Shop (Retail Trading)

5. Cost of the Project : Rs. in lacs

a) Furniture & Furnishing Existing
b) Equipment etc. Existing
c) Margin Money for WC 6.00
Total 6.00

6. Means of Finance : Rs. in lacs

a) Promoter's Contribution 1.50
b) Term Loan from Bank 4.50
Total 6.00

7. Financial Analysis :
Debt Equity Ratio 3.00
DSCR (Average) 2.48
BEP (Average) 14.27%

8. Project Consultant : Sukanta Dey & Associates (M.No.056743)

Chartered Accountants

9. Recommendation : On considering the various aspects of the project both

financially and technically, it can be seen that the
project will be a great success. Further, it is certified
that the project is technically feasible and economically
viable, hence is recommended for immediate
implementation.
COST OF THE PROJECT & MEANS OF FINANCE
A. COST OF THE PROJECT

Sl. No. Particulars Amount (Rs.)

1 Shop Furniture & Furnishing Existing

i) Counter with Showcase 25000.00
ii) Racks & other furniture 25000.00

2 Equipments Existing
i) Weighing Scale 7500.00
ii) Freeze with Stablizer - 1 (180 ltrs) 20000.00
iii) Miscellaneous assets 7500.00

3 Margin Money for Working Capital (3 months) 600000.00

Total 600000.00
Say, (in lacs) 6.00

B. MEANS OF FINANCE

Sl.No. Sources Amount (Rs.)

1 Promoter's Contribution 25% 150000.00
2 Bank Borrowing (WCTL) 75% 450000.00
Total 600000.00
STATEMENT OF OPERATIONAL EXPENSES (ANNUAL)
1 PURCHASE OF INVENTORIES
(three months)
S. No. Particulars Amount (Rs.)
i) Purchase of grocery items/daily needs (As per Quotation) 600000.00
Total 600000.00

2 MANPOWER (EMPLOYEES REMUNERATION)

S. No. Particulars of staff No. Scale of Pay Amount (Rs.)

i) Manager Will be managed by the promoter herself
ii) Salesman 1 4500.00 54000.00
Total 54000.00

3 ADMINISTRATIVE & OVERHEAD EXPENSES

Sl. No. Particulars Amount (Rs.

i) Packing materials & consumables 6000.00
ii) License fee & general expenses 3000.00
iii) Repairs & maintenance 3000.00
iv) Telephone 3000.00
v) Travelling & transportation 9000.00
vi) Refreshment 2000.00
vii) Water & electricity 3000.00
viii) Rent 24000.00
ix) Miscellaneous expenses 3000.00
Total 56000.00

TOTAL OPERATIONAL EXPENSES (PER ANNUM)

Amount (Rs.)
1 Purchase of inventories 2400000.00
2 Staff salaries 54000.00
3 Administrative & overhead expenses 56000.00
Total 2510000.00

MARGIN MONEY REQUIRED FOR WORKING CAPITAL

1 Stock of Grocery items/daily needs (3 Months) 600000.00
LOAN REPAYMENT SCHEDULE & AVG. CALCULATION OF INTEREST
1 Term Loan - Rs. 450000.00
2 Repayment period - 5 years
(Rs. in lacs)
Year Month Opening Principal Interest Interest Total Closing
Balance Repayment Repayment Monthly Balance
Repayment
Month I 4.500 0.000 0.045 0.045 0.0450 4.500
Month II 4.500 0.075 0.045 0.045 0.1200 4.425
Month III 4.425 0.076 0.044 0.044 0.1200 4.349
1st year Month IV 4.349 0.077 0.043 0.043 0.1200 4.273
Month V 4.273 0.077 0.043 0.043 0.1200 4.195
Month VI 4.195 0.078 0.042 0.042 0.1200 4.117
Month VII 4.117 0.079 0.041 0.041 0.1200 4.039
Month VIII 4.039 0.080 0.040 0.040 0.1200 3.959
Month IX 3.959 0.080 0.040 0.040 0.1200 3.879
Month X 3.879 0.081 0.039 0.039 0.1200 3.797
Month XI 3.797 0.082 0.038 0.038 0.1200 3.715
Month XII 3.715 0.083 0.037 0.037 0.1200 3.632
Total 0.8675 0.4975 0.4975 1.3650
Month I 3.632 0.084 0.036 0.036 0.1200 3.549
Month II 3.549 0.085 0.035 0.035 0.1200 3.464
Month III 3.464 0.085 0.035 0.035 0.1200 3.379
Month IV 3.379 0.086 0.034 0.034 0.1200 3.293
2nd year Month V 3.293 0.087 0.033 0.033 0.1200 3.206
Month VI 3.206 0.088 0.032 0.032 0.1200 3.118
Month VII 3.118 0.089 0.031 0.031 0.1200 3.029
Month VIII 3.029 0.090 0.030 0.030 0.1200 2.939
Month IX 2.939 0.091 0.029 0.029 0.1200 2.849
Month X 2.849 0.092 0.028 0.028 0.1200 2.757
Month XI 2.757 0.092 0.028 0.028 0.1200 2.665
Month XII 2.665 0.093 0.027 0.027 0.1200 2.571
Total 1.0612 0.3788 0.3788 1.4400
Month I 2.571 0.094 0.026 0.026 0.1200 2.477
Month II 2.477 0.095 0.025 0.025 0.1200 2.382
Month III 2.382 0.096 0.024 0.024 0.1200 2.286
Month IV 2.286 0.097 0.023 0.023 0.1200 2.188
3rd year Month V 2.188 0.098 0.022 0.022 0.1200 2.090
Month VI 2.090 0.099 0.021 0.021 0.1200 1.991
Month VII 1.991 0.100 0.020 0.020 0.1200 1.891
Month VIII 1.891 0.101 0.019 0.019 0.1200 1.790
Month IX 1.790 0.102 0.018 0.018 0.1200 1.688
Month X 1.688 0.103 0.017 0.017 0.1200 1.585
Month XI 1.585 0.104 0.016 0.016 0.1200 1.481
Month XII 1.481 0.105 0.015 0.015 0.1200 1.375
Total 1.1958 0.2442 0.2442 1.4400
 Month I 1.375 0.106 0.014 0.014 0.1200 1.269
Month II 1.269 0.107 0.013 0.013 0.1200 1.162
Month III 1.162 0.108 0.012 0.012 0.1200 1.054
Month IV 1.054 0.109 0.011 0.011 0.1200 0.944
4th year Month V 0.944 0.111 0.009 0.009 0.1200 0.834
Month VI 0.834 0.112 0.008 0.008 0.1200 0.722
Month VII 0.722 0.113 0.007 0.007 0.1200 0.609
Month VIII 0.609 0.114 0.006 0.006 0.1200 0.495
Month IX 0.495 0.115 0.005 0.005 0.1200 0.380
Month X 0.380 0.116 0.004 0.004 0.1200 0.264
Month XI 0.264 0.117 0.003 0.003 0.1200 0.147
Month XII 0.147 0.147 0.001 0.001 0.1480 0.000
Total 1.3755 0.0925 0.0925 1.4680
PROJECTED PROFIT & LOSS ACCOUNT
(Rs. in lacs)
Sl.No Particulars Financial projection
1st year 2nd year 3rd year 4th year

1 Sales 28.80 30.24 31.75 33.34

Total 28.80 30.24 31.75 33.34
2 Cost of operation
Purchase of grocery & daily needs 24.00 25.20 26.46 27.78
Additional purchase for inventory 4.50
Staff salaries 0.54 0.57 0.60 0.63
Packing materials & consumables 0.06 0.07 0.08 0.09
License fee & general exp 0.03 0.04 0.05 0.06
Repairs & maintenance 0.03 0.04 0.05 0.06
Telephone charges 0.03 0.04 0.05 0.06
Travelling expenses 0.06 0.07 0.08 0.09
Refreshment 0.02 0.02 0.03 0.03
Water & electricity 0.03 0.04 0.05 0.06
Rent 0.24 0.24 0.24 0.30
Miscellaneous expenses 0.03 0.04 0.05 0.06
29.57 26.37 27.74 29.22
Add. Opening stock 1.50 6.00 6.60 7.26
31.07 32.37 34.34 36.48
Less : Closing Stock 6.00 6.60 7.26 7.99
25.07 25.77 27.08 28.49
3 Gorss profit 3.73 4.47 4.67 4.85
Depreciation (WDV) 0.10 0.09 0.08 0.07
Interest on Term Loan 0.50 0.38 0.24 0.09
4 Net profit before tax 3.13 4.00 4.35 4.69
Less: Income Tax
5 Net profit c/f to B/Sheet 3.13 4.00 4.35 4.69
Add. Depreciation 0.10 0.09 0.08 0.07
6 Cash Accruals 3.23 4.09 4.43 4.76
PROJECTED BALANCE SHEET
(Rs. in lacs)
Financial projection
Particulars
1st year 2nd year 3rd year 4th year
LIABILITIES
CAPITAL A/c.
As per last A/c. 1.50 3.88 5.53 7.38
Add. Fresh capital 1.50
Add. Net Profit 3.13 4.00 4.35 4.69
6.13 7.88 9.88 12.07
Less : Drawings 2.25 2.35 2.50 2.60
3.88 5.53 7.38 9.47
SECURED LOAN
Term Loan from Bank 4.50 3.63 2.57 1.37
Add. Interest 0.50 0.38 0.24 0.09
5.00 4.01 2.81 1.46
Less : Repayment 1.37 1.44 1.44 1.46
3.63 2.57 1.37 0.00
CURRENT LIABILITIES
Sundry Creditors 0.10 0.15 0.20 0.25
TOTAL 7.61 8.25 8.95 9.72
ASSETS
Fixed Assets
Furniture & Furnishing
As per last A/c. 0.50 0.45 0.41 0.36
Addition for the year 0.00
0.50 0.45 0.41 0.36
Less : Depreciation @10% 0.05 0.05 0.04 0.04
0.45 0.41 0.36 0.33
Equipments
As per last A/c. 0.35 0.30 0.25 0.21
Addition for the year 0.00
0.35 0.30 0.25 0.21
Less : Depreciation @15% 0.05 0.04 0.04 0.03
0.30 0.25 0.21 0.18
CURRENT ASSETS
Inventories 6.00 6.60 7.26 7.99
Receivables 0.50 0.55 0.60 0.65
Loan & advances 0.10 0.12 0.15 0.17
Cash & Bank Balance 0.26 0.32 0.36 0.40
TOTAL 7.61 8.25 8.95 9.72
DEBT SERVICE COVERATE RATIO (DSCR)

Sl.No Particulars Financial projection

1st year 2nd year 3rd year 4th year

1 Net Profit 3.13 4.00 4.35 4.69

2 Depreciation 0.10 0.09 0.08 0.07
3 Interest on Term Loan 0.50 0.38 0.24 0.09

Total fund available for Debt Service 3.73 4.47 4.67 4.85

1 Interest on term loan 0.50 0.38 0.24 0.09

2 Installment due 0.87 1.06 1.20 1.38

Total installment & interest 1.37 1.44 1.44 1.47

DSCR 2.73 3.10 3.25 3.31

Average DSCR 2.48
CASH FLOW STATEMENT
(Rs. in lacs)
Particulars Financial projection
1st year 2nd year 3rd year 4th year

INFLOWS
Increase in capital 1.50
Net Profit 3.13 4.00 4.35 4.69
Depreciation 0.10 0.09 0.08 0.07
Increase in Bank Borrowings 4.50
Increase in current liabilities 0.10 0.05 0.05 0.05
TOTAL 9.33 4.14 4.48 4.81

OUT FLOWS
Increase in fixed assets 0.00
Increase in current assets 4.85 0.67 0.74 0.80
Drawings 2.25 2.35 2.50 2.60
Principal repayment 0.87 1.06 1.20 1.38
Decrease in current liabilities 1.50

TOTAL 9.47 4.08 4.44 4.78

Opening Balance 0.40 0.26 0.32 0.37

Surplus -0.14 0.06 0.04 0.03
Closing Balance 0.26 0.32 0.37 0.40
BREAK EVEN POINT

FIXED COST
[Rs.in lacs]
Particulars Financial projection
1st year 2nd year 3rd year 4th year

1 Salaries to staffs (40%) 0.22 0.23 0.24 0.25

2 Other Admn. Exp (40%) 0.19 0.21 0.24 0.29
3 Depreciation 0.10 0.09 0.08 0.07
4 Interest on Term Loan 0.50 0.38 0.24 0.09

Total 1.00 0.91 0.80 0.70

BEP Fixed Cost x 100 100.40 91.00 80.00 70.00

Fixed Cost + Net Profit 4.13 4.91 5.15 5.39

Break-Even Point 24.29% 18.53% 15.53% 12.99%

Average BEP 14.27%

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