PROJECT REPORT

ON
VERMI COMPOST

Directorate of Industries, Uttarakhand

Industrial Area Patel Nagar, Dehradun.
Tele No: 0135-2728227 | Fax No : 2728226
Website- www.doiuk.org | Email- mpr@doiuk.org
PROJECT HIGHLIGHTS
PROPRIETOR : XXXXX
ADDRESS OF THE PROPRIETOR : YYYYY
DIST............ STATE.................
CONSTITUTION : PROPRIETORSHIP
CATEGORY OF UNIT : MICRO UNIT
FATHER NAME : XXXXXX
DATE OF BIRTH : XX-YY-ZZZZ
CATEGORY OF THE PROPRIETOR : XXXXXX
QUALIFICATION : XXXXXX
LOCATION OF UNIT : XXXXXX

PROPOSED PROJECT : VARMI COMPOST

NAME OF SCHEME : PRIME MINISTER’S EMPLOYMENT
GENERATION PROGRAMME
UNIT (OWN/RENTED) : OWNED/RENTED

(A) TOTAL COST OF PROJECT : Rs.25,00,000.00

(1) Fixed Capital : Rs.15,00,000.00
(2) Working Capital Limit : Rs.10,00,000.00

(B) MEANS OF FINANCE : Rs. 25,00,000.00

(1) Term Loan for Machinery : Rs.13,75,000.00

(2) Working Capital Limit : Rs. 10,00,000.00
(3) Promotor’s Contribution : Rs. 1, 25,000.00

SUBSIDY UNDER PMEGP : Rs.8,75,000.00

EMPLOYMENT POTENTIAL : 15 PERSON
NORMAL WORKING HOUR : 8 HOUR

INTRODUCTION
Vermi compost is the product of the decomposition process using various species of
worms, usually red wigglers, white worms, and other earthworms, to create a mixture
of decomposing vegetable or food waste, bedding materials, and vermin cast. Vermi
cast is the end-product of the breakdown of organic matter by earthworms. Vermi
composting is a type of composting in which certain species of earthworms are used
to enhance the process of organic waste conversion and produce a better end-
product.

PROMOTER & MANAGEMENT

The promoter is reported to have good financial standing presently. The Promoters is
actively associated with the implementation of the project. Promoter is over all in
charge of the working of the unit.

MARKET AND DEMAND

Rising demand from agriculture farming for vermin compost is majorly driving the
overall growth of this market. However, high maintenance expense under study period
is limiting the growth of this market. High demand from several sectors such as home
gardening and horticultural industry is anticipated to boost growth of this market in
near future. Vermi compost, or vermi Culture, most often uses two species of worms:
Red Wigglers or Eudrilids Eugenie rarely found in soil and are adapted to the special
conditions in rotting vegetation, compost and manure piles. Vermi compost industry
has much fragmented, manufacturers are mostly in the India and Southeast Asia.
Among them, India Production value accounted for less than 9.50% of the total value
of global Vermi compost.
MAJOR BENEFITS OF THE PROJECT

I. Easy availability of material.

II. Job opportunity for local people.

FURNITURE, FIXTURES ETC.

The total estimated cost of required Furniture & Fixtures would be Rs.- 1,00,000.00/-.

PREOPERATIVE EXPENSES

The total estimated cost of required Preoperative Expenses would be Rs.- 25,000/-.

PLANT, MACHINERY AND EQUIPMENTS

Plant, Machinery, Tools, Shed and other equipment’s required for the proposed unit
are available indigenously. The various items required for installation of
Rs. 13,75,000/- details as per quotation attached herewith.

QUALITY CONTROL

The concern proposed to set up above unit for which provision testing equipment
have been proposed in the project report.

TECHNICAL KNOW- HOW

The process for sale of products is simple and no sophisticated technology is

involved. There is no requirement of any type of technical knowhow.
TRANSPORTATION

The proposed location is connected by road and near to the city. Thus the unit is not
likely to face difficulty on account of transportation.

UTILITIES

a) Power:
The total connected load for the smooth operations of the unit has been
estimated and Electricity connection will be obtained as per required load
including lighting load if required.
b) Water:
The water will be available. Necessary provision for storage of water and water
supply has been made in the project cost.

MANPOWER

The unit would require total manpower of person of different category. The details of
salary/wages proposed to be paid together with annual Salary/wages bill is given in
separate annexure.

DEPRECIATION

The depreciation on fixed assets has been computed in annexure of this project
report in accordance with the admissibility of the same under the Income Tax Act,
1961.
TRAINING

Applicant has to complete two week EDP training specially designed for the purpose,
which will be organized by KVIC/KVIB/DIC or the institution organized by or under
the administration control of Minister of MSME or any other training center of repute
before disbursement of loan by the bank. After the successfully completion of EDP
training arranged by the KVIC/KVIB/DIC, the beneficiary will deposit his own
contribution in the bank as per the guideline of scheme.
CAPITAL SUBSIDY UNDER PMEGP

Unit is eligible to get capital subsidy under Prime Minister Employment Generation
Programme 35% of the total cost of the project (except cost of land). Total subsidy to
be received Rs. 8,75,000/-

TERM LOAN AND WORKING CAPITAL LOAN PMEGP SCHEME

The unit proposed to have Term loan UNDER PMEGP of Rs. 13,75,000/- & working
capital limit of Rs. 1,00,000/- Own contribution of unit will be Rs. 1,25,000/-, which is
five percent of total cost of project. The total project cost will be Rs.25,00,000/-.

LOAN REPAYMENT SCHDULE

Total Term Loan : Rs. 13,75,000/-
Total Duration : 5 Years
From the next year
Each yearly instalment : Rs. 275,000/-
Total instalments : Rs. 275,000*5 = Rs. 13,75,000/-

Total Rs. 13,75,000/--

INTEREST COMPUTATION
Interest computation is given in Annexure 6.

PROJECTED INCOME/PROFITABILITY

The projected Income & profitability statement has been shown in the attached profit
& loss account. Projected Balance sheet for the next five years is also enclosed as
here for the reference.

ECONOMIC VIABILITY

Based on the projections attached it is observed that sufficient revenue shall be

generated through operations served & it indicates the economic viability of the
proposal. Hence the project can be considered as economically favourable and
viable.

CONCLUSION

Based on the grounds discussed aforesaid it is concluded that project is

economically & feasibly viable and should be considered favourably.
 M/S VERMI COMPOST
ADDRESS: XXXXX

FINANCIAL ASPECTS OF THE PROJECT

FIXED CAPITAL

Plant & Machineries:

S.No Particulars Rate (Rs.) Amount(Rs.)

No.
1 Shovels, spades, crowbars, iron baskets, 10000 100000
dung fork, buckets, bamboo baskets, 10
trowel,
2 Plumbing and fitting tools 4000 40000
10
3 Power operated shredder 40000 400000
10
4 ieving machine with 3 wire mesh sieves- 50000 250000
power operated with motor 5

5 Weighing scale 10 5000 50000

6 Weighing machine (platform type) 10000 100000

10

7 Bag sealing machine 5000 50000

10
8 Culture trays (plastic) 10000 100000
10
9 Wheel barrows - 12000 60000
5
10 Water provision – Borewell with hand 125000 125000
pump, pipe, 1
drippe
11 Electrical installation 100000 100000
1
TOTAL 1375000
 Other Fixed Assets:

S.No Particulars Amount (Rs.)

1 Furniture Counter Table, Godrej Almira, 90000
Chair & Table

2 Other equipments like Ceilling Fans, Exhaust Fans, RO System, 10000

racks for raw material & partition, electrification etc.

TOTAL 100000

Preliminary & Pre-operative

expenses:

S.No Particulars Amount (Rs.)

1 Transportation of Machinery 20000

2 Miscellaneous 5000
TOTAL 25000

TOTAL FIXED CAPITAL

Particulars Amount (Rs.)

S.No
Machinery and Equipments 1375000
1
Other Fixed Assets 100000
2
Preliminery and Pre Operative 25000
3 Expenses
TOTAL 1500000
 WORKING CAPITAL

A- Raw Material (Per Month):

S.No Particulars Qty. MT Rate /MT Amount (Rs.)

1 Agricultural wastes MT 500 550 275000

2 Cow dung-MT 1000 250 250000
3 Packing Material 100000
TOTAL 625000

B- Man power (Per Month):

S.No Particulars Qty. kg/ltr Salary Amount (Rs.)

1 Skill Manpower (Trainers) 10 15000 150000

2 Semi Skilled Manpower 10 10000 100000

TOTAL 250000

C- Utilities (Per Month):

S.No Particulars Amount (Rs.)

1 Electricity 5000
2 Phone bill 5000
3 Rent 30000
4 Transportation 50000
TOTAL 90000
 D- Misc. or other expenses: (Per Month)

Particulars Amount (Rs.)

S.No
Repair & Renewal 15000
1
Other 20000
2
TOTAL 35000

TOTAL WORKING CAPITAL (Per Month)

Particulars Amount (Rs.)

S.No
Raw Material 625000
1
Manpower 250000
2
Utilities 90000
3
Misc. Expenses 35000
4
TOTAL 1000000

ANNUAL SALES REALISATION

S.No Particulars UOM Qty. Rate Amount (Rs.)

1 Vermi Compost MT 2000 4500 9000000
Sale of Worms @ 5 Kg/MT of
kg
2 compost 10000 500 5000000

Total 14000000
 BREAK EVEN POINT
(BASED ON FIRST YEAR OF OPERATION)
FIXED COST Amount
(Rs.)
S.No
1 Interest on loan 308750
2 Depreciation 27050
3 Man power expenses (40% ) 1200000
4 Operating expenses (40% ) 750000
Total 2285800
BEP =Fixed Cost * 100 228580000 74.84
Fixed Cost + Net
Profit 3054401
 M/S VERMI COMPOST
ADDRESS: XXXXX Annexure-1
PROJECTED BALANCE SHEET
Operating
PARTICULARS
Years
1st 2nd 3rd 4th 5th
A-SOURCES:-
I ) CAPITAL / OWN CONTRIBUTION 125 894 1897 2996 4181
ADD:- PROFIT 769 903 1003 1099 1186
TOTAL 894 1797 2900 4094 5367
II) LOAN FUNDS
SECURED LOANS
Term Loan from Bank 1100 825 550 275 0
C/C Limit from Bank 1000 1000 1000 1000 1000
TOTAL (A+B) 2994 3622 4450 5369 6367
B- APPLICATION:-
I) FIXED ASSETS
GROSS BLOCK 1500 1500 1500 1500 1500
LESS: ACC.DEPRICIATION 220 408 568 704 821
TOTAL 1280 1092 932 796 679
II) CURRENT ASSETS LOANS &
ADVANCES
PRELIMINERY EXPENSES 25 25 25 25 25
INVENTORIES 625 656 688 719 750
SUNDERY RECEIVABLES 1167 1225 1283 1342 1400
CASH & BANK BALANCES 547 1305 2229 3231 4296
LOANS & ADVANCES 125 150 180 200 220
TOTAL 2488 3361 4405 5517 6691
III) CURRENT LIABILITIES &
PROVISIONS
Sundry Creditors 625 656 688 719 750
Provision for Taxation 50 75 99 124 153
Expenses Payable 100 100 100 100 100
TOTAL 775 831 887 943 1003
IV) NET CUREENT ASSETS (II-III) 1714 2530 3518 4573 5688
TOTAL 2994 3622 4450 5369 6367
Margin Money under PMEGP 875 875 875 - -
 M/S VERMI COMPOST
ADDRESS: XXXXX Annexture-2
PROJECTED COST OF PRODCUTION AND
PROFITABILITY
Particulars Operating Years
1st 2nd 3rd 4th 5th
Capacity Utilization 50% 55% 60% 65% 70%
A- INCOMES :
GROSS RECEIPTS 14000 14700 15400 16100 16800
CLSOING STOCK 625 656 688 719 750
TOTAL (A) 14625 15356 16088 16819 17550
B- EXPENSES
OPENING STCOK 0 625 656 688 719
PURCHASES AND CONSUMPTION 8125 7875 8250 8625 9000
SALARY & WAGES 3000 3150 3300 3450 3600
UTILITIES EXPENSES 1080 1134 1188 1242 1296
Total (B) 12205 12784 13394 14005 14615
C- GROSS PROFIT ( A-B ) 2420 2572 2693 2814 2935
ADMINISTRATIVE COST 420 441 462 483 504
SELLING & DISTRIBUTION EXPENSES 700 735 770 805 840
DEPRICIATION 220 188 160 136 117
FINANCIAL CHARGES
Interest on Term Loan @11.75% 147 114 82 50 18
Interest on CC Limit @10% 100 100 100 100 100
Bank Charges 15 16 17 17 18
D-TOTAL 1602 1594 1591 1591 1597
E- PROFIT BEFORE TAX ( C - D ) 818 978 1103 1223 1339
F- PROVISION FOR TAXATION 50 75 99 124 153
G- NET PROFIT AFTER TAX 769 903 1003 1099 1186
 M/S VERMI COMPOST
ADDRESS: XXXXX ANNEXURE-3
PROJECTED CASH FLOW STATEMENT
PARTICULARS Operating Years
1st 2nd 3rd 4th 5th
A-SOURCE OF FUND
1. Increase in Capital 894 903 1,103 1,194 1,273
2. Increase in Term Loan 1375 - - - -
3. Increase in C/C Limit 1000 - - - -
5. Depreciation added back 220 188 160 136 117
6. Increase in Creditors 775 56 56 56 60
TOTAL ( A ) 4263 1148 1319 1387 1449
B-DISPOSAL OF FUND
I) FIXED ASSETS PURCHASED
1. Furniture & Fixtures 100 - - - -
2. Plant & Machinery 1400 - - - -
II) CURRENT ASSETS
3. Increase in Stock 625 31 31 31 31
4. Increase in Debtors 1167 58 58 58 58
5. Increase in Prelimenery Exp. 25
6. Increase in Loans &
Advances 125 25 30 20 20
III) OTHERS
7. Payment of Term Loan 275 275 275 275 275
8. Decrease in Creditors 0
TOTAL ( B ) 3717 390 395 385 385
Opening Cash & Bank Balance 0 547 1305 2229 3231
Surplus/(Deficit) ( A - B ) 547 758 925 1002 1065
Closing Cash & Bank Balance 547 1305 2229 3231 4296
 M/S VERMI COMPOST
ADDRESS: XXXXX ANNEXURE-3
Annexure-
4
COMPUTATION OF
DEPRECIATION

(Amount in
Depreciation under WDV method: '000')
Furniture Plant &
Particulars & Fixture Machinery Total
Rate of Depreciation (as per I.Tax
Act) 10% 15%

Value of Assets at beginning 100.00 1400.00 1500.00

1st year Dep. 10.00 210.00 220.00

Balance at the end of1st year 90.00 1190.00 1280.00

2nd year Dep. 9.00 179.00 188.00

Balance at the end of2nd year 81.00 1011.00 1092.00

3rd year Dep. 8.00 152.00 160.00

balance at the end of 3rd year 73.00 859.00 932.00

4th year Dep. 7.00 129.00 136.00

balance at the end of 4th year 66.00 730.00 796.00

5th year Dep. 7.00 110.00 117.00
 M/S VERMI COMPOST
ADDRESS : XXXXX Annexture-
5
PROJECTED FINANCIAL RATIOS

PARTICULAR Operating
S Years
1st 2nd 3rd 4th 5th
1. CURRENT CURRENT
RATIO ASSETS 2488 3361 4405 5517 6691
CURRENT
LIABILITIES 1775 1831 1887 1943 2003
= 1.40 1.84 2.33 2.84 3.34
TIMES TIMES TIMES TIMES TIMES
2. GROSS
GROSS PROFIT
PROFIT RATIO 2420 2572 2693 2814 2935
SALES 14000 14700 15400 16100 16800

= 17.29% 17.50% 17.49% 17.48% 17.47%

3. NET PROFIT
NET PROFIT
RATIO 818 978 1103 1223 1339
SALES 14000 14700 15400 16100 16800

= 5.84% 6.65% 7.16% 7.60% 7.97%

PAT+DEP.+INTT. Avera
4. DSCR
ON TERM LOAN 1185 1281 1345 1409 1473 ge
INTEREST+LOA
N INSTALMENT 422 327 305 282 260

= 2.81 3.91 4.41 4.99 5.67 4.36

TIMES TIMES TIMES TIMES TIMES
5. INTT.
COVERAGE PAT+DEP.+INTT.
RATIO 1285 1381 1445 1509 1573
INTEREST 247 214 182 150 118

= 5.21 6.44 7.93 10.07 13.39

TIMES TIMES TIMES TIMES TIMES
 M/S VERMI COMPOST

ADDRESS: XXXXX

Loan Amount Rs. 1375000 Annexture-6

Rate of Interest 11.75%

Tenure 5 Years (Rs. In '000)

Sl.No. Instalment Interest Principal Balance Loan

1st Year 422 147 275 1100

2nd Year 389 114 275 825

3rd Year 357 82 275 550

4th Year 325 50 275 275

5th Year 293 18 275 0

 DISCLAIMER

This project report is only for the purpose of reference and will give an idea and
guidance to budding and existing entrepreneurs on how to prepare a project Report.
The readers will come to know about the key components of a project. Every
earnest-effort has been made in collecting the data and information available on the
subject from different offline and online sources. This report (including any
enclosures and attachments) has been prepared solely for the purpose for which it is
provided.

Department suggest entrepreneurs to survey the market properly to find the actual
cost of fixed assets and working capital. The actual cost of the project or industry will
vary according to different elements like location, local regulation, financial
requirements of industry, capacity, type of industry, cost of resources and other
direct and indirect costs related to the project.

Department hereby disclaims any and all liability to any party for any direct, indirect,
implied, punitive, special, incidental or other consequential damages arising directly
or indirectly from any use of the Project Report Content which is provided “as is” and
“as available” basis without any warranties of any kind.

In no event shall Department will be liable for any damages whatsoever resulting from
the use or inability to use the project report content.

Prepared by

THE NATIONAL INSTITUTE FOR ENTREPRENEURSHIP AND

SMALL BUSINESS DEVELOPMENT (NIESBUD)
(Ministry of Skill Development and Entrepreneurship, Govt. of India)
HEAD OFFICE : A-23, Sector-62, NOIDA-201309 (U.P.)
Web. : www.niesbud.nic.in
REGIONAL OFFICE : NSTI Campus, Green Park Colony, Niranjanpur,
PO - Majra, Dehradun - 248171 (Uttarakhand)