INTRODUCTION

It is needless to mention that water; a compound of Hydrogen and Oxygen is a precious natural gift which is very essential for survival of mankind including animals. The water used for potable purposes should be free from undesirable impurities. The water available from untreated sources such as Well, Boreholes and spring is generally not hygienic and safe for drinking. Thus it is desirable and necessary to purify the water and supply under hygienic conditions for human drinking purpose.As the name implies, the mineral water is the purified water fortified with requisite amounts of minerals such as Barium, Iron, Manganese, etc. which can be absorbed by human body. It is either obtained from natural resources like spring and drilled wells or it is fortified artificially by blending and treating with mineral salts. The mineral water shall be manufactured and packed under hygienic conditions in properly washed and cleaned bottles in sterilized conditions.

The global packaged water industry consist the sale of flavored and unflavored. In India there is sale of only still unflavored water. The industry in Asia-pacific region is growing at rate of 13.2% generating annual revenues of $15 billion in 2009. In India the packaged water sector is the fastest growing sector and the total market size is around Rs 2000 crores. There are more than 500 brands present in the industry and the market is mainly controlled by organized sector. The health consciousness among the people, improper water supplies and unpredictable municipal water supply are the various factors, which have caused the growth of the sector. The strong growth rate and lower entry barriers have attracted many players. The major players in the market include Parle Bisleri, Kinley, Aquafina, Oxyrich and Bailley. With the growing competition the established players are undergoing a makeover. The major players have introduced new bottle shapes, labels and communication campaign. The off-trade channel, which consists of distribution of bulk-packaged water, is growing on the grounds of unreliable supply of water in many cities during summer. The unorganized players have major presence in the off trade business. The flavored water segment is a niche category and has presence in North India and major cities in India. As the consumer base increases the growth rate for packaged water is expected to increase. The market operates on lower margins, the unit prices are expected to increase on account of high costs in packaging and transportation. The major players after the rebranding exercise are now concentrating on expansion of their manufacturing and distribution capacities. The major players are trying to establish themselves in bulk water business through brand equity whereas the unorganized players are resisting them through differentiation.

BACKGROUND

It must be appreciated that all successive governments since the birth of Mineral Water industry in India have been encouraging the Organizations to penetrate into new markets. There also a need to broaden the base of serviceable commodities by including value added mineral water products so that reliance on undersurface water, swimming pool and spa equipment and water treatment systems can cater the market segments to have more expansion. Reflecting on the affairs, many organizations have appreciated government’s efforts to encourage new organization and finding new markets, which need aggressive advertising and marketing. The steps taken on the monetary front, such as the frequent devaluation of rupee in terms of dollar could not improve the cost competitiveness of serviceable products due to increase in prices of the local and imported inputs of the local mineral water industry, and also due to inelastic demand for the India’s markets. It has been rightly mentioned in the latest stage Reserve bank of India’s annual report (FY01) that, “Over the years India’s mineral water receipts have been vulnerable on account of the narrow base of serviceable items, concentrated markets and low value addition this Industry. It is indicating that the growth in the co tented to build up in the Mineral Water sector. During the period 1980 to December 2000, some 11 Mineral water Companies with 11.36 8 purifiers, 660 filters and 732 units were stated. In 1992, a foreign consultant form was hired by the government to look into the expansion conditions in the local Mineral water industry. The Mineral water sector, traditionally the core of the industry, is already in the expansion with many coming into the market. Further still, this sector will be hit by the projected expansion and try overall services, including mineral water products which contributed more than 60% of total mineral water receipts each year, could to be related some cosmetic and ad hoc measure like devaluation of rupee and concession import credits.

PROJECT AREA

PESTLE ANALYSIS

We have considered Indian mineral water industry for the analysis. The key points are given below followed by the analysis.

Political

There are various political parties protesting against the pricing of mineral water.

There is stable government at the centre with liberal policies. The government has imposed price ceiling on packaged water.

Economical

There is an increase in per capita income. Most of the people are from middle and upper middle class. Expansion of multinationals, IT and BPO companies in Tier 1 and 2 cities. There is no licensing policy adopted in this sector. There is availability of cheap labor.

The government is promoting new bottling plants through public-private partnership.

Social

Packaged water was earlier considered as a status symbol. Packaged water is now the only source of pure drinking water in areas where

there is scarcity of water. The packaged water is considered to be safe as compared to ordinary tap

water. There is an increase in health consciousness of people.

Technological

The bundling of technologies like distillation, reverse osmosis, activated carbon filter, etc helps in better quality of water.

There has been a shift in packaging from bottles made of glass to bottles made of PET. This helps in recycling and reducing environmental pollution.

Legal

Governed by PFA and BIS standard. BIS has provided standards for mineral and drinking water. The BIS approval

was made mandatory from 1999. Mineral water should be packed in clean, colorless, transparent, odorless,

tamper proof bottles made up of polyethylene. PFA and BIS lays standard for metals like lead, mercury, arsenic, aluminum

and barium. Environmental

The use of Plastic for packaged water increases environmental pollution.

The increase in consumption of packaged water causes depletion of valuable fossil fuels.

PROJECT RATIONALE

Redhakhol and its surrounding areas is a land of many streams of water, there is ample opportunity to bottle this water locally and for export. As the awareness of water born diseases is increasing coupled with modern trends of living the market of packaged mineral water is growing faster than the supply. There is thus the opportunity for investment in this sector. The market for purified packaged / mineral water is a growing market. Usually the top target market for packaged mineral water follows the perception. The stronger the distribution the more successful will be the new brand. While exports are very lucrative there will be implementation of WTO, for open and competitive commodity pricing and tough market competition.

VISION Our vision is to be the dominant player in the branded water business where the second player is less than 20% of our business.

MISSION We are in the business to serve the customer. He is the most important person. He is the only one who pays. He deserves the best quality and presentation at a worth of the price. We must have world-class quality, at the lowest production & distribution cost. This will make us an unbeatable leader, and will have satisfied loyal customers.´

VALUES

“Integrity, Leadership, Teamwork, Co-operation, Quality, Passion, Openness and Transparency.”

PROJECT BRIEF

Basically the idea on which we are about to work is to produce mineral water in affordable range.The basic concept of our campaign is to develop and launch such mineral water, which should be healthy, safe drinking water at very low price as compared to others. Majority people in our country don’t have high purchasing power and they cannot afford the high price for drinking water.

Human capital always plays an important role in the success of any organization and gives an edge to organization over others. We have the best management and administrating executives, which have brains full of innovations and creativity to start and keep this campaign successful.

This proposed project presents an investment opportunity for establishing packaged drinking water plant for providing pure drinking water. The proposed product line will consist of bottles of 500 ml bottle and 1.5 liters bottle. After successful introduction of the new brand of packaged water the product line may be extended to 20 liters jar and 1.5 liters cans. The market for mineral water has been showing a mushroom growth trend over the last few years. The country’s market is very small on a global scale and was estimated at 33 million liters a year by the end of 1992. The last three years have shown more growth and the market have been estimated to grow 70 million liters and the per capita consumption is 0.5 liter. The annual growth rate for packaged water is 40%. According to a study conducted in 2001, India registered the highest growth of 140% in 2000 amongst the countries in Asia and Middle East region. The potential markets for packaged / mineral water consist of foreign tourists and foreigners working in India, hotel industry, patients (bottle water is also used to avoid the possible consumption of contaminated water) and travelers. Moreover, the packaged / mineral water has been emerging as a daily preference of the elite class.The project can bottle 30,000 Ltr of water per day, the size of bottles will be 1.5 Ltr and 500 ml to make the water convenient and attractive to end users. The project would be set up in Redhakhol where all the required infrastructure and amenities are available.

OBJECTIVE

To earn a reputation for being an innovative, trend setting brand. To be positioned as a lifestyle oriented, vibrant and contemporary

product. Build strong relationships with our suppliers to secure a preferential

supply of the best quality products. Insisting on customer satisfaction in all areas of our organization to

attribute the retention of an ever-increasing customer base. Establish the position of market leader in 5 years A bottled water plant for providing pure and portable drinking water to

society. The purposed product line will consist of 500 ml & 1.5 ltr bottle in local

market of Orissa at the initial stages and then move to 20 ltr jar and 1.5 ltr cans water.

SCOPE

Water Shortage and Health Awareness Driving Bottled Water Consumption in India.

The Indian market is estimated at about Rs 1,000 Crore and is growing at whopping rate of 40 per cent. By 2012, it will reach Rs 4,000 -5,000 Crore with 33 per cent market for natural mineral water. 

According to a national-level study, there are more than 200 bottled water brands in India and among them nearly 80 per cent are local brands.

While India ranks in the top 10 largest bottled water consumers in the world, its per capita per annum consumption of bottled water is estimated to be five liters which is comparatively lower than the global average of 24 liters. Today it is one of India's fastest growing industrial sectors. Between 1999 and 2004, the Indian bottled water market grew at a compound annual growth rate (CAGR) of 25 per cent - the highest in the world. 

The total annual bottled water consumption in India had tripled to 5 billion liters in 2004 from 1.5 billion liters in 1999. Global consumption of bottled water was nearing 200 billion liters in 2006.

LIMITATION

PROJECT STAKEHOLDERS

MARKTS AND MARKETING ANALYSIS

Unfortunately sufficient safe potable water is not available everywhere in the country, either harmful chemical substances are found in the layers of earth which enter into water or it may be contaminated due to pathogenic micro-organisms. If such water is consumed, the body suffers from water born diseases. Due to this, it has become imperative to process and bottle safe potable water for the mankind in prevailing conditions.The demand for purified water becomes more during summer season.

Although some companies have already entered in the bottling of safe potable water and mineralised water, but still huge gap is there in between demand and supply at all metropolitan-cities and towns. The product is widely accepted in offices, restaurants, railway stations, airport, bus stands, hospitals and to some extent even in rich house-holds. So there is good scope for establishing the units for processing and bottling plain and mineralised drinking water in different parts of the country.

Target Market

The most important decision about the product will decide what people we want to attract, i.e. our target audience. Our product has equal benefit for everybody.  We’ll have to focus on the all group of ages. Everything about our product is designed to bring those people to our site. The reason of choosing full market coverage is to be a market leader in future. We want to provide pure Mineral Water. The lifestyle of our target audience is different because they belong to different age groups. They are adaptable to change and like change in their lives. The Mineral Water completes the both objectives. They also influence the decision making of their parents to buy the product.

CONSUMER ANALYSIS

GEOGRAPHICAL AREA: At the initial stage we have target the market of three district of Orissa i.e Angul, Sambalpur & Dhenkanal and subsequently we will capture entire Orissa market.

POPULATION:

Geographical Area

Total Population % Population Growth

Litracy % Litracy Rate

Orissa 36,804,660 16.25 19,837,055 63.08Angul 1,140,003 18.62 671433 68.79Dhenkanal 1,066,878 12.56 639363 69.42Sambalpur 935,613 15 544861 67.25

* As per the Census data of 2001

The above data shows that there is approximately total 30 lakh population in those three districts as pure drinking water is a basic need so there is a huge demand for packaged drinking water.

TIME DIMENSION:

As water is a basic need it has it’s demand in all the seasons but in summer season due to increase in temperature the demand of chilled packaged drinking water is high and also due to more number of industries in those district the temperature remains high through out the year than other districts of Orissa.

DEMOGRPHIC FACTOR:

Target all age groups

Lower and Middle-income class

SOCIAL DIMENSION:

Water is consumed by every living being irrespective of the age, gender or cast.

ECONOMIC DIMENSION:

Class:

According to our economic system we divided class into three tires that are described under a table and also the number of people belongs to it.

Class High class Middle class Lower class

% Population 30 40 30

Income:

According to the class we distributed the income. That show under table:

COMPETITOR ANALYSIS:

The bottled packaged water industry is a part of beverage industry that again comes under fast moving consumer goods. According to American agency the world’s bottled packed water is expected to reach $65.9bn by 2012. The cause behind this is population rising, consumer buying pattern, life style trends and growing level of health consciousness.

The existing brand in beverage industry is paying attention and moving into bottled packed water, as they have good brand image and the opportunity is very huge in this industry. Eg. Pepiso coca cola According to industry life cycle the bottled packed industry is at mature state and the most of the market is covered by the Bisleri, Aquafina, Kinley and Ozone.

But when it comes to the pouch packaged drinking water there are very few local players i.e Bubbles & Mahanadi. In the district Angul, Sambalpur & Dhenkanal due to high temperature and more medium income group people there is a huge demand for pouch drinking water. As the competitor’s manufacturing units are far from the target market their transportation cost is more and distribution channel is weak for which there is a gap between actual demand and supply in the market.

Class Higher class Middle class Lower class

Monthly Income 30,000- Above 5,000 – 30,000 Bellow 5,000

PORTERS FIVE FORCES ANALYSIS

Threat of entry:

As the number of Bottled packaged water consumption is increasing in all over the world, the opportunity for other players in increasing rapidly. In the bottled packaged industry the entry barrier is low. The entry barrier is low due to local low production cost, less amount of capital, easy to access government and legal law, local production law, less legal and government barrier and low switching cost. The existing brand in beverage industry is paying attention and moving into bottled packed water, as they have good brand image and the opportunity is very huge in this industry. Eg. Pepiso coca cola According to industry life cycle the bottled packed industry is at mature state and the most of the market is covered by the Bisleri, Aquafina, Kinley and Ozone. So the pressure for new entrants to capture the market is very high. But according to still there are many local player that covered the 26% of the market. But when we observe the product on differentiation the different among product is very less or equal lent to nil. According to product differentiation the threats of entrants is high. But the overall threat of new entrants is medium.

Bargaining power of suppliers:

The bargaining power of supplier is low, as the suppliers include municipal water system, bottles and plastic cap, label printer filtration and deionization equipment, plastic grains and etc. Sometimes the bargaining power of suppliers is depends on geographical location and the technology adopted by the organization. The recyclable bottle used by the company needs advanced technology or some dependant, like other packaging industry as the packaging cost is high. But the large availability of suppliers leads to less bargaining power. The bargaining power of supplier may include the inventory stock of bottles. Overall bargaining power of supplier is less.

Bargaining power of buyer:

As the bottled packed water industry comes in oligopoly industry. The no of producer is less thus the bargaining power of suppliers is less. The bargaining power of buyer is depends on the price and product. The availability of product also affects the bargaining power of buyers. Availability of substitute is also affects the bargaining power. As the competition is not much high, there are mainly five to ten producer like Bisleri, Aquafina, Kinley, Oxyrich and Pure life so the customers do not have any advantage moving from one brand to other brand. The product differentiation is almost zero, so the bargaining power of customer is low. Sometimes it depend upon the geographical location, segment of consumers both rural and urban population, consumer buying behavior and consumer preferences.

Substitute product:

The availability of substitute is coffee, soft drink, juice and tea. The substitute of product affects the price and market. The availability of substitute provides the option to customer and customer can switch from one product to other. Every country always appreciates the beverage industry. The availability of various health drinks, juice, carbonic and no carbonic drinks and availability of taste changed the consumer preferences. Consumer is using various health drinks, carbonic and non carbonic drinks to quench the thirst. The total size of food industry in India is almost $ 65.6 billion and soft drinks (juices and carbonated beverage) contain $ 1 billion. Indian soft drink market consumption in a year is 284 million crates. Soft drink market is highly seasonal in nature, consumption in during offseason is 15 million crates and in peak season is around 25 million crates per month. In urban area Consumption of soft drinks is 75% of whole Indian market. Multinational companies Coca-Cola and PepsiCo dominate Indian soft drink market. In India mineral water market is $50 million and 65 million in crates. The monthly average consumption of mineral water is 4.9 million crates that increase in peak season to 5.2 million (Non-alcoholic beverage market in India, 2009). So we can draw that the bottled packed water consumption in India is one third of the total beverage industry.

Rivalry:

The degree of rivalry and the competition affects the price, quality, profit and revenue in an industry. As the market is almost on saturation state, and the industry refers the oligopoly competition so there is a high competition to increase the market share. The market is dominated by the very few players like Bisleri(%), Aquafina(%), Kinley(%) and Oxyrich, and they are trying to increase their market share by product introduction, price, packaging and volume of water. As there is no much difference among the product by different competitor, the rivalry is only in terms of service and of marketing strategy. The intensity of rivalry is low as there is limited player and the product is not price sensitive. According to Indian beverage association the market will grow by in 2012, the market shows the high growth rate so the competition is less.

SITUATIONAL ANALYSIS

Aqua safe is a new company in the market. Aqua Safe for the first time is launching its mineral water due to great demand of mineral water at cheaper price.

DEMAND ANALYSIS:

The potential markets for bottled / mineral water consist of foreign tourists and foreigners working in Pakistan, hotel industry, patients (bottle water is also used to avoid the possible consumption of contaminated water for the patients) and travelers.

Moreover the bottled / mineral water has been emerging as a daily preference of the elite class. Indiahas been facing the problem of drinking water shortage. This further integrates the demand for pure drinking water in all cities.There are around 26 players in the bottled water sector. According to the industry sources, the number of bottlers scales up well above 70 during summer season due to increased demand for drinking water.

PROJECTED DEMAND

The weather is the main dynamic that may bring changes in the market size of the purified drinking water as the daily water requirement increases in summer. When launching a new brand of purified water for market, weather is the main dynamic, which should be given proper consideration. The advertisement including TV and print media is expected to bring changes in the demand. However, it is suggested that the new brand of purifies bottled water is launched in the start of summer season. The entrepreneur have to match the brand launching time with the advertisement and weather that would drive the demand of bottles water and willingness of consumers to switch towards new brands.

DEMAND SUPPLY GAP:

In the first phase of the launch of the new brand, availability will also play the key role in attracting the customers. Since, the perception of the product is also directly related with is availability so it is suggested that the strategy for the availability of the product be designed according to the target market.

MARKET TRENDS

Market trend is headed toward a more sophisticated and aware customer.The preference for high-quality and low product is increasing as customers are learning to appreciate the qualitative differences.

SWOT ANALYSIS

STRENGTHS

We are providing high quality Mineral Water The price per quality is very attractive We have effective advertising plan Weakness Week financial position New brand in the market

OPPORTUNITIES

Low & a bit high income groupTHREATS

Strong distribution channel of competitors Strong Positioning of competitors

MARKETING STRATEGIES

PRICING STRATEGIES

Every marketing task including pricing should be directed towards a goal, Management should decide on its pricing objective before determining the price itself. The pricing objectives are as follows

Profit oriented: To achieve a target return To maximize profit

Sales oriented: To increase sale volume To maintain or increase market share

Penetration PRICING:The Company is currently relying on market penetration pricing e.g.

Lower price as compared to its competitors. This strategy also works well to attract those classes that relate lower prices with higher quality. Thus, in somewhat manner the company has tried to become distinctive.

DISTRIBUTION STRATEGY

DISTRIBUTION CHANNEL

Pricing Strategies

Promotional strategy

Distribution strategy

Communication strategy

The company's distribution channel is not very difficult because of the nature of the product. The company has the efficient distribution system that is earning a lot through mass sales.

NATURE OF DISTRIBUTION

The company believes in interim distribution of its product through all possible outlets to encourage more sales, greater consumers and maneuver due to the nature of the product. The company's distribution exits in the following two levels:

DISTRIBUTION LEVEL

The company uses the “Two Levels Distribution”.

The level of distribution which we are using here is two levels of distribution we have our own distributors which bring our product towards retailers to consumer. Our product is distributed for sale through all the major growing stores, departmental stores and even small retail outlets. The reason for adopting all the channels is because of the nature of the product.

ADVERTISING & PROMOTION

Several different methods would be used for the advertising effort e.g.

Newspapers Television Adds Advertising hoardings billboards Attractive pamphlets Celebrity endorsement

COMPARISON WITH THE COMPETITORS PRICING STRATEGY

BRAND, PRICE & SIZE

Price for 250ml pouch water:

• Aqua Safe Mineral Waters, Rs. 1 (More Profit for the dealer)• Bubbles Mineral Waters, Rs. 1

Price for 1.5 Liters:

• Aqua Safe Mineral Waters, Rs. 15

Produc Distribut Retailer Consume

• Bisleri Mineral Waters, Rs. 15 ( 1 ltr)

Price for 20 Liters:

• Aqua Safe Mineral Waters, Rs. 40 • Bisleri Mineral Waters, Rs. 80

PROMOTION

Direct consumer is usually expensive because it covers thousands of individual consumers. So we give advertisement in newspaper, commercial break in television, fm radio, advertising behind vehicle, sign board.

TECHNICAL ANALYSIS

PLANT AND MACHINERY:

Most of the water purification plants being installed in the country are reverse osmosis based. Government also recommends the RO based technology. This feasibility study is based on the reverse osmosis plant.

Major machinery for the Company will be brought from Chennai. The details of the machinery & equipment are as following.

SL. NO Name of Machinery Qty

1 Pump 02

2 Storage tank 02

3 Sand filter 01

4 Jumbo filter 02

5 Carbon filter 01

6 Reverse Osmosis 01

7 Mineralization 01

8 Ozonation 01

9 Filtration (0.2mq) 01

10 Ultra violet rays 01

11 Filling Machine 02

12 Generator 01

PRODUCT RANGE:

This feasibility has been developed for a water purification plant with a capacity of 30000 liters per day. The product mix consists of 250 ml pouch, water bottles of 1.5 liters and 20 liter in the ratio of 40%, 40% and 20% respectively.

RECOMMENDED PROJECT PARAMETERS

Capacity Human Resource Machinery Location30000 liters/day 14 Local + imported

(Chennai)Redhakhol

It had very simple process consisting of physical operations of filtration and Ultra Violet radiation treatment. But today there are more than 26 brands of drinking water available in the market thus showing a substantial growth by the industry.

INSTALLED CAPACITY:

Installed capacity of our processing unit is 100 percent, which is 30000 liter per day.

CAPACITY ACHIEVED:Currently the unit is achieving the capacity of 70 percent, which is 21000 liter per day.

THE PROCESS FLOW:

The first step for setting up a water purification plant is the analysis of source of water. After the chemical analysis, the specifications of the purification plant are set.

In the purification plant, source water is stored in the feed water tank, passes through the sand filter for preliminary water filtration. Water then passes through the dosing pump-I where chlorine is added to kill the germs in the water. After the chlorination, water passes through carbon filter. It helps in the maintenance of proper odour and taste of the water. It also removes chlorine from water. Water is then passes from dosing pump-II, where Sodium Meta Bisulphate is added. It helps in dechlorination of water. Water is filtered next and passes through dosing pump-III, where anti scallant is added. It prevents scaling of membrane from calcium, magnesium and biological growth. Water then passes through reverse osmosis module. This stage of the process makes water clear from all the contaminations and minute particles. Water then passes through dosing pump-IV, where minerals are added for taste development. After this stage, water undergoes Ultra Violet treatment to avoid any contamination from bacteria and other microorganisms. Water then passes through automatic washing, filling and capping plant. Here water is filled into bottles. After filling bottles are taken into the warehouse or shipped to the retailers. The complete process flow diagram is as under.

FLOW DIAGRAM:

PRODUCT PACKIGING:

It is suggested that the bottles of 1.5 liter and 20 liter jars capacity should be used. Bottles should be clear. The bottle should give a reflection of light sky blue color, which is considered a natural symbol of the water. This color also adds a tinge of purity. The water should give a shiny and a glossy reflection. The opening of the bottle should be large enough to accommodate outflow and inflow of water.

The color and the design will create a positive perception for the new brand. The wrapper of the bottle is suggested to be on four-color printing and should have the following information in addition to the logo of the company.

A brief introduction of the company with the address Website address of the company Brand Name Net volume in System International / Metric system

Expiry Date (Best Before Date)

PERSONNEL ANALYSIS:

Sl.No  Types of Staff Numbers Required  Basic Salary Per Month

 Total Salaries for the Year

1Admin & Account Manager 1 30000 360000

2 Supervisor 1 15000 180000

3 Shift In-charge 2 12000 288000

4 Machine Operator 2 10000 240000

5 Lab assistant 1 10000 120000

6 Filler 2 6000 144000

7 Electrician 1 6000 72000

8 Driver 2 5000 120000

9 Sweeper 1 4000 48000

10 Security Guard 2 6000 144000

  TOTAL 14 1716000

Administrative and General Staff

Sl No. Designation Basic Salary Per MonthTotal Salaries for the Year

1Quality control manager 1 35000 420000

2 Accountant 1 15000 180000

3 Office Boy 1 4000 48000

Sl No. Sales Staff

1 Sales Representative 2 10000 240000

2 Advertising     100000

3 Helper 2 6000 144000

FINANCIAL ANALYSIS:

Estimated Financial Statements

AQUA SAFE MINERAL WATERIncome Statement

For the Year ended 2012 2013 2014Operating efficiency assumed     Rs. Rs. Rs.

Sales 100,018,800 127,008,000 157,172,400Cost of good Sold:Raw material consumed 81,648,000 103,680,000 128,304,000Labour 2,574,000 2,831,400 3,114,540Manufacturing expense 966,000 1,062,600 1,168,860Depreciation 1,913,400 1,913,400 1,913,400

Cost of good Sold 87,101,400 109,487,400 134,500,800Gross Profit 12,917,400 17,520,600 22,671,600Operating ExpensesGeneral and Admin. Expenses 972,000 1,069,200 1,176,120

Selling Expenses 726,000 798,600 878,460Total Operating Expenses 1,698,000 1,867,800 2,054,580Operating Profit 11,219,400 15,652,800 20,617,020Non-Operating ExpensesFinancial Exp. 734,067 2,510,347 1,915,027Amortization of preproduction exp. 180,675 180,675 180,675Workers Welfare Fund (2%) 224,388 313,056 412,340Total Non-operating Exp. 1,139,130 3,004,078 2,508,042Profit before Tax 10,080,270 12,648,722 18,108,978Tax 4,032,108 5,059,489 7,243,591Net Profit after Tax 6,048,162 7,589,233 10,865,387Retained Earning 3,628,897.32 4,553,540.04 6,519,232.06

Calculation of Ratios

- Gross Margin (%)   12.91% 13.79% 14.42%- Operating Margin (%) 11.22% 12.32% 13.12%- Net Margin (%)   6.05% 5.98% 6.91%

AQUA SAFE MINERAL WATERPROJECTED CASH FLOW

For the Year Ended 2011 2012 2013 2014Rs. Rs. Rs, Rs.

SourcesOperating Profit 0 11,219,400 15,652,800 20,617,020

Add: Dep. & Amort. 0 2,094,075 2,094,075 2,094,075Equity 14,850,000

Other SourcesLong Term Loans 18,150,000

Total 33,000,000 13,313,475 17,746,875 22,711,095Uses

Fixed Asset 27,112,279Pre-Production Exp. 903,375Long Term Loans 0 1,815,000 3,630,000 3,630,000Re-Payment of:.Financial Exp. 0 734,067 2,510,347 1,915,027

Tax Paid 0 4032108 5059488.933 7243591.173Profit Distribute 0 2,419,265 6,830,310 9,778,848Inc/(dec) in Current asset 0 0 0 0

Total 28,015,654 9,000,440 18,030,146 22,567,466Net Cash Inflow/(Outflow) 4,984,346 4,313,035 (283,271) 143,629Balance Opening 0 4,984,346 9,297,381 9,014,111Balance Closing 4,984,346 9,297,381 9,014,111 9,157,740

COST OF SALES SCHEDULE Sale Year 1 Year 2 Year 3

Total production capacity100%

production 70% 80% 90%

Total production capacity 10,800,000 7,560,000 8,640,000 9,720,000(At 70%) Production 1.5 Lit 5,292,000 6,912,000 8,748,000

Sale price per bottle @Rs.13 15 79,380,000 103,680,000 131,220,00030% Production 0.5 Lit 2,268,000 2,592,000 2,916,000

Sale price per bottle @Rs.10 10 22,680,000 25,920,000 29,160,000Total Sales 102,060,000 129,600,000 160,380,000

Less Sale Bonus 2.00% 2,041,200 2,592,000 3,207,600Net Sale 100,018,800 127,008,000 157,172,400

ASSUMPTIONS:

KEY ASSUMPTION

Land   4 Working Days in year     360 Shift Operational     2 Hours per Shift     8 Initial Year capacity utilization     70% Cost of registration   6.00% Cost of land per canal   1200000 Legal expense   50000 Rate per Square ft building Rs. 900 Depreciation rate   10% Tax annually   40% Increase in sale annually   10% Increase in direct cost & expenses   110% Debt portion   55% Equity portion   44% Distributable profit to all partners   90% Retained earning   10.0% Total production per day lit     30000 100.0% Our total production per day lit     21000 70.0% Price per 1.5 liter  Rs. 12 Price per 0.5 liter    Rs. 08 Months in a year   12 Days in a month   30 Fuel utilization   Liter per hr 20 Daily fuel used   Liter 600 Monthly fuel consumption   Liter 18000 Yearly fuel consumption   216000 Fuel per liter   65

ESTIMATED COST OF PROJECT

Fixed Cost Rs. 28,015,654 Initial Working Capital Rs. 4984346

Financial Plan

Cost of the Project Local Foreign Total  Rs. Rs. Rs.

Land and its Development 5,732,000   5,732,000 Building and Civil Work 6,242,000   6,242,000 Machinery and Equipment 7,035,000   7,035,000 Engineering and Technical Fee 100,000   100,000 Furniture and Fixture 100,000   100,000 Vehicles 4,400,000   4,400,000 Preproduction Expense 903,375   903,375 Office Equipment 78,000   78,000 Contingencies 400,000   400,000 Others 182,543   182,543 Interest During Construction 2,944,333   2,944,333 Total Fixed Cost 28,015,654   28,015,654 Initial Working Capital 4,984,346   4,984,346 Total Cost of the Project 33,000,000   33,000,000

Net Fixed Assets 27,112,279

Means of FinanceDebt 55% 18,150,000 Bank Name (Punjab National Bank)  Total Debt 18,150,000

 Equity 45% 14,850,000 Total Equity and Debt 33,000,000

MEANS OF FINANCE:

Equity 45%Debt 55% Punjab National Bank

Name of Financier:

Name of Bank Punjab National BankAmount of loan 18,150,000 Rate Of Interest 16% Per AnnumPeriod Of Loan 5 Years 360Repayment of Interest Quarterly InstallmentRepayment of Installment Half YearlyDate of Disbursement of Loan 3/31/2011Completion of the Project 31/12/2011Date of Commercial Production 31/3/2012Date of Repayment of principle 30/6/2012 6 Installment  No of Principle Amount Total OutstandingDue Dates Days Installment of Interest Installment Principle

3/31/2011 0 0 0 - 18,150,000 6/30/2011 91 0 734,067 734,067 18,150,000 9/30/2011 92 0 742,133 742,133 18,150,000 12/31/2011 92 0 742,133 742,133 18,150,000

3/31/2012 90 0 726,000 726,000 18,150,000 6/30/2012 91 1,815,000 734,067 2,549,067 16,335,000 9/30/2012 92   667,920 667,920 16,335,000 12/31/2012 92 1,815,000 667,920 2,482,920 14,520,000 3/31/2013 91 - 587,253 587,253 14,520,000 6/30/2013 91 1,815,000 587,253 2,402,253 12,705,000 9/30/2013 92 - 519,493 519,493 12,705,000 12/31/2013 92 1,815,000 519,493 2,334,493 10,890,000 3/31/2014 90 - 435,600 435,600 10,890,000 6/30/2014 91 1,815,000 440,440 2,255,440 9,075,000 9/30/2014 92 - 371,067 371,067 9,075,000 12/31/2014 92 1,815,000 371,067 2,186,067 7,260,000 3/31/2015 90 - 290,400 290,400 7,260,000 6/30/2015 91 1,815,000 293,627 2,108,627 5,445,000 9/30/2015 92 - 222,640 222,640 5,445,000 12/31/2015 92 1,815,000 222,640 2,037,640 3,630,000 3/31/2016 90 - 145,200 145,200 3,630,000 6/30/2016 91 1,815,000 146,813 1,961,813 1,815,000 9/30/2016 92 - 74,213 74,213 1,815,000 12/31/2016 92 1,815,000 74,213 1,889,213

 Total 18,150,000 10,315,653 28,465,653

Interest during ConstructionFrom 3/31/2011 To 3/31/2012 2,944,333

2012 2013 2014 2015 2016Interest 734,067 2,510,347 1,915,027 1,326,160 737,293 Installments 1,815,000 3,630,000 3,630,000 3,630,000 3,630,000

Name of Civil Contractor:ALLIED ENGINEERING & SERVICES LIMITEDT-23 Vhanja Nagar, Sambalpur- 380052,Orissa, INDIA

Cost of building and civil works

Factory Building Area Sq ft Rate per Sq ft Cost

Office 1,088 900 979,200

Bottle storage room 816 900 734,400

Washing and mineral filter room 2,176 900 1,958,400

Packaging and labeling 300 900 270,000

Finished Product Storage Room 1,456 900 1,310,400

Labs 544 900 489,600

Total 6,380 5,742,000

Furnishing 500,000

Total 6,380 6,242,000 

NAME OF MACHINERY SUPPLIER:

BALAJI ION EXCHANGE & CHEMICAL LTDG-14 Balaji Centre, Opp. Gurukul,Drive-In-Road, Memnagar, CHENNAI - 568053, INDIA

IMPLEMENTATION SCHEDULE:

Implementation Schedule

SL.No. Activities Month Year

1 Engineering studies and designing of civil works: 2011

2 Start January 2011

3 Complete February 2012

4 Construction of building and civil works: 2011

5 Start February 2011

6 Order for machinery March 2011

7 Order for local machinery Jun 2011

8 Arrival of local machinery at site September 2011

9 Order for raw material November 2011

10 Trial Runs: 2011

11 Start December 2011

12 Complete January 2012

13 Start Commercial production January 2012