PROJECT REPORT

Of

BLACK PEPPER

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Black Pepper 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 xxxxxxxxxx

2 Constitution (legal Status) : xxxxxxxxxx

3 Father / Spouse Name xxxxxxxxxxxx

4 Unit Address : xxxxxxxxxxxxxxxxxxxxxx

District : xxxxxxx
Pin: xxxxxxx State: xxxxx
Mobile xxxxxxx

5 Product and By Product : BLACK PEPPER

6 Name of the project / business activity proposed : BLACK PEPPER UNIT

7 Cost of Project : Rs.12.65 Lakhs

8 Means of Finance
Term Loan Rs.7.2 Lakhs
Own Capital Rs.1.27 Lakhs
Working Capital Rs.4.19 Lakhs

9 Debt Service Coverage Ratio : 3.60

10 Pay Back Period : 5 Years

11 Project Implementation Period : 5-6 Months

12 Break Even Point : 32%

13 Employment : 11 Persons

14 Power Requirement : 12.00 HP

15 Major Raw materials : Whole Black Pepper

16 Estimated Annual Sales Turnover (Max Capacity) : 103.48 Lakhs

17 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lakhs)

Particulars Amount
Land Own/Rented
Plant & Machinery 7.20
Furniture & Fixtures 0.80
Working Capital 4.65
Total 12.65

MEANS OF FINANCE
Particulars Amount
Own Contribution 1.27
Working Capital(Finance) 4.19
Term Loan 7.20
Total 12.65
 BLACK PEPPER UNIT

Introduction:

A spice is a seed, fruit, root, bark, or other plant substance primarily used for flavoring,
coloring or preserving food. Spices are distinguished from herbs, which are the leaves,
flowers, or stems of plants used for flavoring or as a garnish. Spices are very important
and essential for adding and enhancing flavor, taste and scent in preparation of food. They
are also useful in preparation of certain medicine. India is the largest producer, consumer
and exporter of spices Andhra Pradesh, Gujarat, Orissa, Rajasthan are major states
producing varieties of spices. Black pepper is one of the most commonly used spices
worldwide. It's made by grinding peppercorns, which are dried berries from the vine Piper
nigrum. It has a sharp and mildly spicy flavor that goes well with many dishes. People
apply black pepper to the skin for measles, nerve pain, itchy skin caused by mites
(scabies), and to treat pain. People inhale black pepper oil to prevent falls, to help quit
smoking, and for trouble swallowing. In foods, black pepper and black pepper oil are
used as a spice.
Uses & Market Potential:

India, known as the home of spices, boasts a long history of trading with the ancient
civilizations of Rome and China. Today, Indian spices are the most sought-after globally,
given their exquisite aroma, texture, taste and medicinal value. India has the largest
domestic market for spices in the world. Traditionally, spices in India have been grown
in small land holdings, with organic farming gaining prominence in recent times. India is
the world's largest producer, consumer and exporter of spices; the country produces about
75 of the 109 varieties listed by the International Organization for Standardization (ISO)
and accounts for half of the global trading in spices.

The Spices Board of India works towards the development and worldwide promotion of
Indian spices. It provides quality control and certification, registers exporters, documents
trade information and provides inputs to the central government on policy matters. The
board participates in major international fairs and food exhibitions to promote Indian
spices, apart from organizing various domestic events. Total spices export from India
stood at 1.13 billion kg, valued at US $ 3.32 billion in the year 2018-19. In FY20 (till
December 2019), 857,400 tonnes of spices worth US$ 2.25 billion have been exported.

Product:
Black Pepper

Raw Material:
The only raw material for this industry is Whole Black Pepper.
Manufacturing Process:

Raw material Procurement

Cleaning & Drying

Grinding

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 1200-1500Sqft.
Cost of Machines:

Machine Unit Rate Price

Impact pulveriser without sieve 1 300000 300000

Packaging Machine 1 180000 180000

Material handling and other - 240000 240000

equipment’s (Bins, trolley, weighing
machine, kitchen tools etc.)

Total Amount 720000

Power Requirement- The estimated Power requirement is taken at 12 HP

Manpower Requirement– Following manpower is required:

 Machine operator-2
 Skilled/unskilled worker-3
 Helper-4
 Manager cum Accountant-1
 Sales Personnel-1

FINANCIALS
PROJECTED BALANCE SHEET

PARTICULARS I II III IV V

SOURCES OF FUND
Capital Account
Opening Balance - 1.56 2.70 4.27 6.22
Add: Additions 1.27 - - - -
Add: Net Profit 3.29 4.64 5.37 6.46 7.75
Less: Drawings 3.00 3.50 3.80 4.50 6.00
Closing Balance 1.56 2.70 4.27 6.22 7.98
CC Limit 4.19 4.19 4.19 4.19 4.19
Term Loan 6.40 4.80 3.20 1.60 -
Sundry Creditors 1.37 1.60 1.84 2.09 2.34

TOTAL : 13.51 13.28 13.49 14.10 14.51

APPLICATION OF FUND

Fixed Assets ( Gross) 8.00 8.00 8.00 8.00 8.00

Gross Dep. 1.16 2.15 3.00 3.72 4.33
Net Fixed Assets 6.84 5.85 5.00 4.28 3.67

Current Assets
Sundry Debtors 2.79 3.43 3.99 4.57 5.17
Stock in Hand 3.23 3.78 4.36 4.95 5.57
Cash and Bank 0.65 0.22 0.14 0.29 0.10

TOTAL : 13.51 13.28 13.49 14.10 14.51

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS I II III IV V

A) SALES
Gross Sale 55.86 68.69 79.74 91.34 103.48

Total (A) 55.86 68.69 79.74 91.34 103.48

B) COST OF SALES

Raw Material Consumed 27.30 31.92 36.72 41.70 46.86

Elecricity Expenses 0.94 1.07 1.21 1.34 1.48
Repair & Maintenance 1.68 1.72 1.99 2.28 2.59
Labour & Wages 15.25 18.60 21.95 25.24 28.52
Depreciation 1.16 0.99 0.85 0.72 0.62
Cost of Production 46.32 54.30 62.72 71.29 80.06

Add: Opening Stock /WIP - 2.32 2.72 3.14 3.56

Less: Closing Stock /WIP 2.32 2.72 3.14 3.56 4.00

Cost of Sales (B) 44.01 53.90 62.29 70.86 79.62

C) GROSS PROFIT (A-B) 11.85 14.79 17.45 20.48 23.85

21.22% 21.53% 21.88% 22.42% 23.05%
D) Bank Interest i) (Term Loan ) 0.78 0.64 0.46 0.29 0.11
ii) Interest On Working Capital 0.46 0.46 0.46 0.46 0.46
E) Salary to Staff 5.92 6.99 8.11 9.08 9.99
F) Selling & Adm Expenses Exp. 1.40 2.06 2.79 3.65 4.66

G) TOTAL (D+E+F) 8.56 10.15 11.82 13.48 15.21

H) NET PROFIT 3.29 4.64 5.63 7.00 8.64

5.9% 6.8% 7.1% 7.7% 8.4%
I) Taxation - - 0.26 0.55 0.89

J) PROFIT (After Tax) 3.29 4.64 5.37 6.46 7.75

PROJECTED CASH FLOW STATEMENT

PARTICULARS I II III IV V

SOURCES OF FUND

Own Contribution 1.27 - - - -

Reserve & Surplus 3.29 4.64 5.63 7.00 8.64
Depriciation & Exp. W/off 1.16 0.99 0.85 0.72 0.62
Increase In Cash Credit 4.19 - - - -
Increase In Term Loan 7.20 - - - -
Increase in Creditors 1.37 0.23 0.24 0.25 0.26

TOTAL : 18.47 5.86 6.72 7.97 9.51

APPLICATION OF FUND

Increase in Fixed Assets 8.00 - - - -

Increase in Stock 3.23 0.55 0.58 0.59 0.61
Increase in Debtors 2.79 0.64 0.55 0.58 0.61
Repayment of Term Loan 0.80 1.60 1.60 1.60 1.60
Taxation - - 0.26 0.55 0.89
Drawings 3.00 3.50 3.80 4.50 6.00
TOTAL : 17.82 6.29 6.79 7.82 9.70

Opening Cash & Bank Balance - 0.65 0.22 0.14 0.29

Add : Surplus 0.65 - 0.44 - 0.08 0.15 - 0.19

Closing Cash & Bank Balance 0.65 0.22 0.14 0.29 0.10
COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS I II III IV V

Finished Goods
(15 Days requirement) 2.32 2.72 3.14 3.56 4.00
Raw Material
(10 Days requirement) 0.91 1.06 1.22 1.39 1.56

Closing Stock 3.23 3.78 4.36 4.95 5.57

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Amount Margin(10%) Net

Amount
Stock in Hand 3.23
Less:
Sundry Creditors 1.37
Paid Stock 1.86 0.19 1.67

Sundry Debtors 2.79 0.28 2.51

Working Capital Requirement 4.19

Margin 0.47

MPBF 4.19
Working Capital Demand 4.19
REPAYMENT SCHEDULE OF TERM LOAN 11.0%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

I Opening Balance
Ist Quarter - 7.20 7.20 0.20 - 7.20
Iind Quarter 7.20 - 7.20 0.20 - 7.20
IIIrd Quarter 7.20 - 7.20 0.20 0.40 6.80
Ivth Quarter 6.80 - 6.80 0.19 0.40 6.40
0.78 0.80
II Opening Balance
Ist Quarter 6.40 - 6.40 0.18 0.40 6.00
Iind Quarter 6.00 - 6.00 0.17 0.40 5.60
IIIrd Quarter 5.60 - 5.60 0.15 0.40 5.20
Ivth Quarter 5.20 5.20 0.14 0.40 4.80
0.64 1.60
III Opening Balance
Ist Quarter 4.80 - 4.80 0.13 0.40 4.40
Iind Quarter 4.40 - 4.40 0.12 0.40 4.00
IIIrd Quarter 4.00 - 4.00 0.11 0.40 3.60
Ivth Quarter 3.60 3.60 0.10 0.40 3.20
0.46 1.60
IV Opening Balance
Ist Quarter 3.20 - 3.20 0.09 0.40 2.80
Iind Quarter 2.80 - 2.80 0.08 0.40 2.40
IIIrd Quarter 2.40 - 2.40 0.07 0.40 2.00
Ivth Quarter 2.00 2.00 0.06 0.40 1.60
0.29 1.60
V Opening Balance
Ist Quarter 1.60 - 1.60 0.04 0.40 1.20
Iind Quarter 1.20 - 1.20 0.03 0.40 0.80
IIIrd Quarter 0.80 - 0.80 0.02 0.40 0.40
Ivth Quarter 0.40 0.40 0.01 0.40 - 0.00
0.11 1.60

Door to Door Period 60 Months

Moratorium Period 6 Months
Repayment Period 54 Months
CALCULATION OF D.S.C.R
PARTICULARS I II III IV V

CASH ACCRUALS 4.45 5.63 6.21 7.18 8.37

Interest on Term Loan 0.78 0.64 0.46 0.29 0.11

Total 5.24 6.27 6.68 7.46 8.48

REPAYMENT
Repayment of Term Loan 0.80 1.60 1.60 1.60 1.60
Interest on Term Loan 0.78 0.64 0.46 0.29 0.11

Total 1.58 2.24 2.06 1.89 1.71

DEBT SERVICE COVERAGE RATIO 3.31 2.80 3.24 3.96 4.96

AVERAGE D.S.C.R. 3.60

Assumptions:
1. Production Capacity of Black Pepper unit is taken at 200 KG per day. First year,
Capacity has been taken @ 35%.

2. Working shift of 10 hours per day has been considered.

3. Raw Material stock and Finished goods closing stock has been taken for 10
days and 15 days respectively.

4. Credit period to Sundry Debtors has been given for 15 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 12 HP.

10. Selling Prices & Raw material costing has been increased by 3% & 2%
respectively in the subsequent years.
 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN
assume no financial liability to anyone using the content for any purpose. All the
materials and content contained in Project report is for educational purpose and
reflect the views of the industry which are drawn from various research material
sources from internet, experts, suppliers and various other sources. The actual
cost of the project or industry will have to be taken on case to case basis
considering specific requirement of the project, capacity and type of plant and
other specific factors/cost directly related to the implementation of project. It is
intended for general guidance only and must not be considered a substitute for a
competent legal advice provided by a licensed industry professional. SAMADHAN
hereby disclaims any and all liability to any party for any direct, indirect, implied,
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