PROJECT REPORT

Of

ANIMAL FEED MAKING UNIT

PURPOSE OF THE DOCUMENT

 ANIMAL FEED MAKING UNIT

Introduction:

Animal feed is the food given to animals which are domestic often refers to fodder in
course of care and management of farm animals by humans for profit. Supply of quality
feed ensures the health of animals. Animal feed is the food given to animals which are
domestic often refers to fodder in course of care and management of farm animals by
humans for profit. Supply of quality feed ensures the health of animals. Various feeds
include poultry feed, sheep husbandry, cat food, pet food, pig farming, cattle feeding,
dog food, equine nutrition and bird food.

Compound cattle feed is an important constituent of ration, considering the

fact that dairy animals in India have limited access to cultivated green fodder and
grasses. Most of the macro and micronutrients to meet animals’ requirements are
provided by compound feed, especially on crop residue-based diets. It is possible to
formulate balanced rations for growing and lactating animals only if the feed used
conforms to the laid down specifications, for energy, protein, minerals, vitamins, etc.

In order to provide animals with necessary nutrients to meet their requirements for
maintenance, growth, pregnancy, and production of milk, to reduce the risks of animal
health and to minimize excretions and emissions into the environment, the chemical
composition of cattle feed used in the diet has to be precisely known.
Uses & Market Potential:

Worldwide demand for dairy products is rapidly growing and is projected to increase
by 58 % by 2050 compared to 2010, due to the strong demand from an emerging global
middle class. The Indian animal feed market is driven by the rising dairy industry,
backed by the White Revolution 2.0, which has resulted in the rapid growth of the cattle
population. Currently, India has the largest cattle population in the world, thereby
becoming a significant market for cattle feed. The demand for commercial cattle feed is
projected to increase in India, as the dairy industry structure is becoming more
organized and which are aimed at improving the overall status of the animal feed
industry to provide for future demand. The Indian animal feed market size reached a
value of almost INR 403.5 billion in the year 2023. The market is further expected to
grow at a CAGR of 15% between 2023 and 2028 to reach a value of almost INR

933.3 billion by 2028. The Indian animal feed market is driven by increasing
government support in the country. After the liberalization of the Indian economy in the
early 2000s, the animal feed industry was presented with new opportunities. The
industry continues to have substantial growth potential owing to increasing domestic
consumption of animal-based products, rising livestock population, and growing
dependence on imports.

Product:

ANIMAL FEED
Raw Material:

Major raw materials are as follows:

Grains: Wheat, Maize, oats, sorghum, rice, barley, millets, ragi, etc. Brans:

rice polish, De-oiled rice bran, wheat bran, maize bran, etc.

Protein meals/cakes: Rapeseed meal/cake, soybean meal, cottonseed meal/cake

(decorticated and un-decorticated), groundnut meal/cake, coconut meal/cake,
palm kernel, meal/cake, sesame cake, linseed cake, maize germ oil cake, maize gluten
meal, sunflower meal, safflower meal, guar meal, etc.

Chunnies: Guar, tur, urad, moong gram &chunnies of other locally available pulses.

Agro-industrial by-products: Molasses, babul chunni, tamarind seed powder, mango kernel
extraction, tapioca waste, etc.

Minerals and vitamins: Mineral mixture, calcite powder, common salt, di-calcium
phosphate, vitamins A, D & E.
Manufacturing Process:
Raw material are procured from market and stored in storage

Raw material testing for toxicity and other

parameters Raw materials are mixed in a

definite proportion Grinding of raw material

in 1 mm size

Grounded Raw material are mixed with minerals in a definite

proportion

Now the feed are mixed with molasses @ 10-12 %

Treat the feed with steam before pelleting at 70-80o c

Pelleting the feed at size of 8 mm

Testing the feed for (temperature and binding

of Pellets) Filling and packaging

Area:
The industrial setup requires space for Inventory, workshop or manufacturing area,
space for power supply utilities and polishing area. Also, some of the area of building is
required for office staff facilities, office furniture, etc. Thus, the approximate total area
required for complete industrial setup is 4000Sqmtrs
Power Requirement- - The estimated Power requirement is taken at 100 KVA

Manpower Requirement– Following manpower is required:22

 Machine operator-2
 Skilled/unskilled worker-4
 Helpers-10
 Manager cum Accountant-2
 Sales Personnel -4

Assumptions:
1. Production Capacity of a Animal Feed making unit is taken at 5200 KG per
day. First year, Capacity has been taken @ 70%.
2. Working shift of 8 hours per day has been considered.
3. Raw Material stock and Finished goods closing stock has been taken for 15
days.
4. Credit period to Sundry Debtors has been given for 25-30 days.
5. Credit period by the Sundry Creditors has been provided for 15 days.
6. Depreciation and Income tax has been taken as per the Income tax Act,1961.
7. Interest on working Capital Loan and Term loan has been taken at 11%.
8. Salary and wages rates are taken as per the Current Market Scenario.
9. Power Consumption has been taken at 10 KW.
10. Selling Prices & Raw material costing has been increased by 5% & 3%
respectively in the subsequent years.
FINANCIALS
DETAILS OF DEPRECIATION ON FIXED ASSETS
Items of Fixed Assets Amount (Rs.)

Land 9,700,000.00

SHED 20,100,000.00

MACHINERY & EQUIPMENTS 8,500,000.00

TRANSFORMER 500,000.00

ELECTRICAL INSTALLATIONS 500,000.00

OFFICE EQUIPMENTS 1,000,000.00

FURNITURE & FIXTURES 500,000.00

Cost of acquisition during the year 40,800,000.00

Depreciation @ 15 % p.a. on an average 6,120,000.00

W.D.V. as at the end of 1st year 34,680,000.00

Depreciation @ 15 % p.a. on an average 5,202,000.00

W.D.V. as at the end of 2nd year 29,478,000.00

Depreciation @ 15 % p.a. on an average 4,421,700.00

W.D.V. as at the end of 3rd year 25,056,300.00

Depreciation @ 15 % p.a. on an average 3,758,445.00

W.D.V. as at the end of 4th year 21,297,855.00

Depreciation @ 15 % p.a. on an average 3,194,678.25

W.D.V. as at the end of 5th year 18,103,176.75

Depreciation @ 15 % p.a. on an average 2,715,476.51

W.D.V. as at the end of 6th year 15,387,700.24

Depreciation @ 15 % p.a. on an average 2,308,155.04

W.D.V. as at the end of 7th year 13,079,545.20

SUMMARY OF PROJECT COST

LAND 9,700,000.00

SHED 20,100,000.00

MACHINERY & EQUIPMENTS 8,500,000.00

TRANSFORMER 500,000.00

ELECTRICAL INSTALLATIONS 500,000.00

SECURITY DEPOSIT ( D.P.S.C. Ltd) 500,000.00

OFFICE EQUIPMENTS 500,000.00

FURNITURE & FIXTURES 500,000.00

40,800,000.00
UTILIZATION OF FUND

FIXED CAPITAL COST 40,800,000.00

MARGIN FOR WORKING CAPITAL 600,000.00

41,400,000.00
WORKING CAPITAL COST 3,000,000.00
44,400,000.00
MEANS OF FINANCE
BANK LOAN

TERM LOAN FINANCE 30,000,000.00

WORKING CAPITAL FINANCE 2,225,000.00 32,225,000.00

PROMOTER'S CONTRIBUTION 11,075,000.00

43,300,000.00

Note: Promoter's contribution works out to be 25 % of Total Project cost.

 PROJECTED PROFITABILITY STATEMENT

YEARS YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7
CAPACITY UTILIZATION 70% 80% 85% 90% 95% 96% 98%

INCOME

1 Sale of Animal Feeds 44,100.00 50,400.00 53,550.00 56,700.00 59,850.00 60,480.00 61,740.00
(6m.t p/Day @ 36000/- m.t 100% capacity 300 days)

TOTAL (A) 44,100.00 50,400.00 53,550.00 56,700.00 59,850.00 60,480.00 61,740.00

EXPENDITURE

1 Raw Material (6mm rod) 37,170.00 42,480.00 45,135.00 47,790.00 50,445.00 50,976.00 52,038.00

2 Labour 945.00 1,080.00 1,194.00 1,215.00 1,282.50 1,296.00 1,323.00

3 Electricity 2,831.00 2,890.00 2,900.00 2,970.00 3,135.00 3,168.00 3,234.00

4 Interest on Term Loan 712.96 598.89 646.42 370.74 256.67 142.59 28.52

5 Interest on CC Loan 408.00 408.00 408.00 408.00 408.00 408.00 408.00

6 Stores 346.50 396.00 420.25 445.50 470.25 475.20 485.10

7 Wastage (Less: Recovery) 346.50 396.00 420.75 445.50 470.25 475.20 485.10

8 Misc Expenses 252.00 254.00 258.00 265.00 270.00 275.00 280.00

9 Office Expenses 150.00 155.00 160.00 165.00 170.00 175.00 180.00

10 Security
 80.00 80.00 80.00 80.00 80.00 82.00 84.00

11 Transport & Convenyance 504.00 576.00 612.00 648.00 684.00 705.60 720.00

12 Sales Tax (4%) 352.80 403.20 428.40 453.60 478.80 485.00 492.60

13 Depreciation 1,098.00 934.00 794.00 675.00 573.00 487.00 414.00

TOTAL (B) 45,196.76 50,651.09 53,456.82 55,931.34 58,723.47 59,150.59 60,172.32

NET CREDIT [A-B] (1,096.76) (251.09) 93.18 768.66 1,126.53 1,329.41 1,567.68

Opening stock - 1,500.00 2,500.00 3,500.00 4,000.00 4,500.00 5,000.00

Closing stock 1,500.00 2,500.00 3,500.00 4,000.00 4,500.00 5,000.00 5,500.00

Stock adjustment 1,500.00 1,000.00 1,000.00 500.00 500.00 500.00 500.00

Profit before Taxation 403.24 748.91 1,093.18 1,268.66 1,626.53 1,829.41 2,067.68

Provision for Taxation 120.97 224.67 327.95 380.60 487.96 548.82 620.30

Profit after Taxation 282.27 524.24 765.23 888.06 1,138.57 1,280.59 1,447.38
Bal carried over to Balance
Sheet 282.27 806.51 1,571.73 2,459.79 3,598.37 4,878.95 6,326.33
 PROJECTED CASH FLOW STATEMENT
(Rs. In '000)
YEARS YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7

SOURCES

PBIT 1,524.20 1,755.80 2,147.60 2,047.40 2,291.20 2,380.00 2,504.20

Depreciation 1,098.00 934.00 794.00 675.00 573.00 487.00 414.00
Increase in Capital 3,359.00 - - - - - -
Increase in Term Loan 5,703.69 (950.62) (950.62) (950.62) (950.62) (950.62) (950.62)
Increase in Cash Credit 3,400.00 - - - - - -
Decrease in Current Assets (3,600.00) 100.00 100.00 300.00 - (400.00) (450.00)
Decrease in Advance & Deposits (1,400.00) 200.00 200.00 (500.00) (300.00) - -
Provisions 120.97 224.67 327.95 380.60 487.96 548.82 620.30
Decrease in Stock (1,500.00) (1,000.00) (1,000.00) (500.00) (500.00) (500.00) (500.00)

TOTAL [A] 8,705.86 1,263.86 1,618.94 1,452.38 1,601.54 1,565.21 1,637.89

APPLICATION

Increase in Fixed Assets 7,323.00 - - - - - -

Interest on Bank Loan 1,120.96 1,006.89 1,054.42 778.74 664.67 550.59 436.52
Income Tax 120.97 345.65 552.63 708.55 868.56 1,036.78 1,169.13
Dividend - - - - - - -

TOTAL [B] 8,564.93 1,352.53 1,607.05 1,487.29 1,533.22 1,587.37 1,605.65

Opening Cash Balance - 140.93 52.26 64.15 29.24 97.56 75.39

Net Surplus / Deficit [A-B] 140.93 (88.67) 11.89 (34.91) 68.32 (22.17) 32.24
Closing Cash Balance 140.93 52.26 64.15 29.24 97.56 75.39 107.63
 YEARS YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7

LIABILITIES

Capital 3,359.00 3,359.00 3,359.00 3,359.00 3,359.00 3,359.00 3,359.00

282.2 806.5 1,571.7 2,459.7 3,598.3 4,878.9 6,326.3
Reseve & Surplus 7 1 3 9 7 5 3

Term Loan 5,703.69 4,753.08 3,802.46 2,851.85 1,901.23 950.62 -

Cash Credit 3,400.00 3,400.00 3,400.00 3,400.00 3,400.00 3,400.00 3,400.00

Tax Provision 120.97 224.67 327.95 380.60 487.96 548.82 620.30

TOTAL 12,865.93 12,543.26 12,461.15 12,451.24 12,746.56 13,137.39 13,705.63

ASSETS

Net Fixed Assets (W.D.V.) 6,225.00 5,291.00 4,497.00 3,822.00 3,249.00 2,762.00 2,348.00

Stock of W.I.P. & Finished Product 1,500.00 2,500.00 3,500.00 4,000.00 4,500.00 5,000.00 5,500.00

Advance & Deposits 1,400.00 1,200.00 1,000.00 1,500.00 1,800.00 1,800.00 1,800.00

Net Current Assets (Debt &Others) 3,600.00 3,500.00 3,400.00 3,100.00 3,100.00 3,500.00 3,950.00

Cash & Bank Bal. 140.93 52.26 64.15 29.24 97.56 75.39 107.63

TOTAL 12,865.93 12,543.26 12,461.15 12,451.24 12,746.56 13,137.39 13,705.63

CALCULATION OF INTEREST ON TERM LOAN
 First Half Year Second Half Year Consolidated Payout (Rs. In '000)
YEAR OPENING PAYMENT CLOSING INTEREST OPENING PAYMENT CLOSING INTEREST TOTAL TOTAL TOTAL

BALANCE BALANCE BALANCE BALANCE INTEREST PRINCIPAL REPAYMENT

6,179.0 6,179.0 370.7 6,179.0 475.3 712.9 475.3 1,188.2
1 0 - 0 4 0 1 5,703.69 342.22 6 1 7
5,703.6 475.3 5,228.3 313.7 5,228.3 475.3 598.8 950.6 1,549.5
2 9 1 8 0 8 1 4,753.08 285.18 9 2 0
4,753.0 475.3 4,277.7 256.6 4,277.7 475.3 484.8 950.6 1,435.4
3 8 1 7 7 7 1 3,802.46 228.15 1 2 3
3,802.4 475.3 3,327.1 199.6 3,327.1 475.3 370.7 950.6 1,321.3
4 6 1 5 3 5 1 2,851.85 171.11 4 2 6
2,851.8 475.3 2,376.5 142.5 2,376.5 475.3 256.6 950.6 1,207.2
5 5 1 4 9 4 1 1,901.23 114.07 7 2 8
1,901.2 475.3 1,425.9 85.5 1,425.9 475.3 142.5 950.6 1,093.2
6 3 1 2 6 2 1 950.62 57.04 9 2 1
950.6 475.3 475.3 28.5 475.3 475.3 (0.00 (0.00 28.5 950.6 979.1
7 2 1 1 2 1 1 ) ) 2 2 3

TOTAL 2,851.85 1,397.40 3,327.15 1,197.78 2,595.18 6,179.00 8,774.18

YEAR YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7
712.9 598.8 484.8 142.5 28.5
TERM LOAN INTEREST 6 9 1 370.74 256.67 9 2
408.0 408.0 408.0 408.0 408.0
CASH CREDIT INTEREST 0 0 0 408.00 408.00 0 0
1,120.9 1,006.8 892.8 550.5 436.5
TOTAL INTEREST 6 9 1 778.74 664.67 9 2

Note: 1 Repayment term has been considered to be in 13 equal half yearly instalments.
2 Term Loan Interest has been considered @ 12.00 % p.a.
3 Cash Credit Interest has been considered @ 12.00 % p.a.
 CALCULATION OF SOME IMPORTANT RATIOS
PARTICULARS YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7

NET PROFIT (PAT) 282.27 524.24 765.23 888.06 1,138.57 1,280.59 1,447.38

INTEREST ON TERM LOAN 712.96 598.89 646.42 370.74 256.67 142.59 28.52

INTEREST ON CASH CREDIT 408.00 408.00 408.00 408.00 408.00 408.00 408.00

PROVISION OF TAXATION 120.97 224.67 327.95 380.60 487.96 548.82 620.30

TOTAL (X) (PBIT) 1,524.20 1,755.80 2,147.60 2,047.40 2,291.20 2,380.00 2,504.20

INTREST ON TERM LOAN 712.96 598.89 646.42 370.74 256.67 142.59 28.52

INTREST ON CASH CREDIT 408.00 408.00 408.00 408.00 408.00 408.00 408.00

TOTAL (Y) 1,120.96 1,006.89 1,054.42 778.74 664.67 550.59 436.52

INTREST SERIVCE
COVERAGE 1.36 1.74 2.04 2.63 3.45 4.32 5.74
RATIO ( X/Y)

NET PROFIT 282.27 524.24 765.23 888.06 1,138.57 1,280.59 1,447.38

SALES 44,100 50,400 53,550 56,700 59,850 60,480 61,740

NET PROFIT/ SALES 0.01 0.01 0.01 0.02 0.02 0.02 0.02
PBIT 1,524.20 1,755.80 2,147.60 2,047.40 2,291.20 2,380.00 2,504.20

DEPRECIATION 1,098.00 934.00 794.00 675.00 573.00 487.00 414.00

PBDIT 2,622.20 2,689.80 2,941.60 2,722.40 2,864.20 2,867.00 2,918.20

TOTAL ASSETS 12,866 12,543 12,461 12,451 12,747 13,137 13,706

I.S.C.R. 0.20 0.21 0.24 0.22 0.22 0.22 0.21

NET SALES (O) 44,100 50,400 53,550 56,700 59,850 60,480 61,740

TERM LOAN 6,179 6,000 5,000 4,000 3,000 2,000 1,000

CASH CREDIT 3,400 3,400 3,400 3,400 3,400 3,400 3,400

TOTAL BANK BORROWING

( P) 9,579 9,400 8,400 7,400 6,400 5,400 4,400
NET SALES/ BANK
BORROWING 4.60 5.4 6.4 7.7 9.4 11.2 14.0

BRAKE EVEN POINT 23.08 22.77 23.98 23.65 26.28 26.68 22.27

DEBT/EQUITY RATIO 1.84:1

 CALCULATION OF DSCR
YEARS YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7

A. Net Profit after Tax 282.27 524.24 765.23 888.06 1,138.57 1,280.59 1,447.38

B. Depreciation 1,098.00 934.00 794.00 675.00 573.00 487.00 414.00

C. Interest on Term Loan 712.96 598.89 646.42 370.74 256.67 142.59 28.52

D. Interest on Cash Credit 408.00 408.00 408.00 408.00 408.00 408.00 408.00

TOTAL [X] 2,501.23 2,465.13 2,613.65 2,341.80 2,376.24 2,318.18 2,297.90

E. Instalment of Term Loan 475.31 950.62 950.62 950.62 950.62 950.62 950.62

F. Interest on Term Loan 712.96 598.89 646.42 370.74 256.67 142.59 28.52

G. Interest on Cash Credit 408.00 408.00 408.00 408.00 408.00 408.00 408.00

TOTAL [Y] 1,596.27 1,957.50 2,005.04 1,729.36 1,615.28 1,501.21 1,387.13

DSCR = [X] / [Y] 1.57 1.26 1.30 1.35 1.47 1.54 1.66

AVERAGE DSCR = 1.45

Date:

Place: Signature of the Promoter