TAMIL NADU RURAL TRANSFORMATION PROJECT

Category of Loan: Nano (INR 5 Lakhs)

Business Plan for establishing a Poultry Broiler farm
Introduction
 Ms.AAA of BB village in CC block of Tiruvallur district is an agriculturist, owning 1.50
acres land. She cultivates Maize, Groundnut and Sorghum

 She is a member of a SHG functioning in the village. The SHG has been banking with
ABC Bank since 2019.

 Bank has twice extended credit assistance to this SHG and Ms. AAA is one among the
beneficiary of the SHG loan. She has availed the loan two times and promptly repaid
the loan instalments

 She has been working in a Poultry farm near Tiruvallur for the past three years and
gained good knowledge and experience in poultry farming.

 Now she wish to start a broiler farm in her own land.

 The present request is for a term loan of Rs.2.79 lakhs under TNRTP matching grant
programme for establishing a broiler farm with 1000 birds’ capacity.

About the Product

The Broiler chicken production of our country is growing at the rate of 8 to 10% every year.
The consumption of chicken meat has increased significantly during the past two decades.
India is the third largest broiler chicken producer in the world, produces 3.8 million tons of
poultry meat in a year. The market is estimated to be worth about Rs.90000 Crore. The
per capita chicken consumption in India has been on the rise.
Enterprise and Entrepreneur Profile
1. Profile of the Entrepreneur:
Name Ms.AAA
Spouse Name
Age 40
Education 10th Standard
Aadhaar Card No 86XXXX111111
Address
Phone No +91 1111111111
Mobile NO +91 1111111111
Email ID [email protected]
Number of years of experience in business Three
Trainings attended (no. and hours) Attended 3 days training program on
backyard poultry rearing conducted by
KVK, Tiruvallur
Spouse’s occupation Agriculture
If Special category NA
2. Enterprise Profile:
Name of the Enterprise M/S AAA Poultry Farm
Legal Form of Enterprise Nil
Registration Number Nil
Registration Date Nil
Registered with Whom Nil
GST No ( If available ) Not Applied
Udyam Registration number Not Applied
3.Bank Linkage Details:
Whether the enterprise has separate bank Yes
account
If any bank credit availed Yes
Name of the bank and Branch ABC Bank
Nature of the bank facility -
Limit Sanctioned -
Balance outstanding as on date -
4. Enterprise Nature:
Type of Enterprise Farm Sector- Agri. Allied activity
Product to be produced Broiler birds production
Service to be offered:  Supply of disease free birds
Present Demand  The product is in good demand by Hotels,
Restaurants, Messes, Chicken stalls,
Mutton Stalls, Office & Company canteens
located in Tiruvallur, Kadambattur,
Mappedu area.

 The 10 poultry units (4900 birds) located in
and around Tiruvallur, Kadambattur,
Current Supply Tiruvelanagadu and Poondi are catering
the supply of the broiler birds.

5.Technical Feasibility:

a. Location
Brief on Location – Whether well connected 1. The village is easily approachable and
to market by road etc., well connected by road
b. Land
Extent of Land, sq.ft. Panchayat approval, 2. Own 1.50 acres agricultural land with
own/leased adequate water source
c. Building
Approved plan from local body, Sq,ft,  The floor space per bird is 1 Sq.ft. it is
whether sufficient for the proposed activity proposed to construct Poultry shed by
100’x10’ and Feed storeroom by 10’ x
10’ for which building plan and approval
will be obtained from the Village
Panchayat administration
d. Power 
Whether required power connection is
 SEB power supply is available.
available 
e. Water 
Whether adequate water is available.  Adequate water is available.
 f.Approval 
Pollution control Board/GST/FSSAI  “Poultry farms less than one lakh
approvals or any other approval is required. birds need not to obtain CTO” (As per
Present Status CPCB F.No. B-29012/IPC-VI/2017-18,
dated 19.07.2017)
g. Materials Needed Raw-materials
 Day old chicks will be procured from
Quantity / Cost / Availability / Delivery Time Venkateshwara Hatcheries Ltd, Hosur
to be discussed.  Litter material ( Paddy Husk) can be
a. sourced from rice mills in Tiruttani
b. Raw materials  Feed for chicks and birds can be
c. purchased from poultry feed dealers,
d. Equipment
traders in Chennai and Tiruvallur ,
Technology  Equipment’s – Nipple Drinkers, Turbo
Feeders, Vaccinators, HDPE
Tarpaulin Poultry curtains. Card board
sheets can be purchased from sellers
at Chennai
 Adequate water supply is ensured
from the bore well in use for
agriculture.
 Services of Seven Veterinary Health
care centres in the block can be
utilized for the farm
 Technology:
The applicant has adequate
experience in broiler farming,
undergone necessary training and
capable of adopting new technology
h. Cost of capital assets As per Annexure A.
i. Cost of working capital The assessment has been done as per
Annexure C
j. Skills Requirements 
skilled labour available / Not available  The promoter is well experienced in the
If not available: whether people can be line of activity for more than 3 years.
trained? If so, training period and training Skilled labourers are easily available
facility?
Production Process:
Production Plan/cycle 
/ The operating cycle is assumed at one
(operating cycle may be one-day / week 
month or one year as per the activity batch as detailed in Annexure C.
selected):
6.Commercial Feasibility:
a. Marketing strategy : :  Bulk supply to Hotels, Restaurants,
Messes, Chicken stalls, Mutton Stalls,
Office & Company canteens located in
Tiruvallur, Kadambattur, Mappedu area.
b. Market promotion strategies:  Contract farming is an effective institutional
alternative for promotion of broiler
production.
 Nearly 90 per cent of the poultry farming in
Tamil Nadu has come under the contract
farming concept
 Suguna Poultry Farm Ltd & Venkateshwara
Hatcheries Ltd has emerged the leading
integrated broiler producers in the country,
with contract farming.
 Suguna Poultry Farm Ltd, Corp Off: 5th
Floor, Jaya Enclave, 1057, Avinashi
Road, Coimbatore – 641018
 Venkateshwara Hatcheries Ltd, 1-5, Upper
Ground Floor, World Trade Centre, Babar
Road, Cannuaght Place, New Delhi- 11000
 Contract poultry farming managed to free
the small farmers from the worries of
production and market planning of the
poultry products.
d. Physical and digital connectivity:
e. Risks and risk mitigation planned: Risk assessment details as per Annexure E.

7.Environment Assessment:
Category of the enterprise proposed: White/Green / Orange / Red
“Poultry farms less than one lakh birds need not to obtain CTO” (As per CPCB F.No.
B-29012/IPC-VI/2017-18, dated 19.07.2017)
Environment Environment Greening Support needed
Issue Guidelines or Measures
identified mitigation identified
measures (for green, Implement Implement
Integrated orange and red the the greening
(Please tick) categories) mitigation measures
measures
 Water To ensure NA NA
Exploitation of  Wood adequate
local resources  Electricity measures for
(water and Proper disposal
energy) of Smoke and
waste water
 Dust/air pollutants To ensure NA NA
Waste  Disposal of waste adequate
generation and water measures for
disposal Proper disposal
of Smoke and
waste water
Worker and  Safety measures / Fire NA NA
Community gadgets extinguishers to
safety be fixed in
sensitive places
in the unit. Full
fire protection
dresses and
gloves for
workers

Whether the activity proposed is in the negative list: No

 8.Financial Viability
Cost of the project and Means of the project:
a. Cost of the Project: (Rs in lakhs)
I. Fixed capital-Cost of all the equipment’s /machinery 2.20
/construction(excluding land cost) As per Annexure-A
ii. Working capital As per Annexure- C 0.90
iii. Pre-operative expenses **From Own Source
Total cost of the project (i + ii + iii) 3.10

b. Means of the project:

Loan from financial Institution / Bank (90%): 2.79
Margin money -Borrower’s contribution (10%): 0.31
Total means of the project ( i + ii ) 3.10

c. Matching grant from the project** 0.93

** The preliminary expenses will be met by the borrower from his own source. Hence
not included in the project cost. The borrower has sufficient source to meet the
preliminary expenses.
Whether the entrepreneur has the sufficient means to Yes.
bring in the margin money and has enough buffer to
manage any cost escalations

**Matching Grant is @30% of the total cost of the project (excluding pre-operative
expenses, land cost, lease). As Matching Grant will be kept in a “Subsidy Reserve Fund”
account of the bank as a back-ended grant, it is not shown under the Means of the project.
The matching grant to be adjusted as below:
(Rs in Lakhs)
Loan initially disbursed by the Bank - 2.79
Less 30% matching grant - 0.93

Balance principal amount to be repaid by Borrower - 1.86

Upon completion of minimum period of 18 months and upon repayment of principal
amount of Rs.1.86 lakhs and the interest portion, the matching grant of Rs.0.93 lakh can
be adjusted to the loan account of the borrower and the loan account can be closed.
 Income & Expenses of the Enterprise
Particulars Amount in INR
a. Sales 1033050
b. Cost of Production 731964
i. Cost of Raw Material 644364
ii. Direct Wages
iii. Cost of utilities( Water, Power , Fuel, Repair) 87600
c. Gross Profit(a-b) 301086
d. Admin & Selling Exp 0
e. Operating Profit before Depreciation, Interest, Tax & 301086
Amortization (c-d)
f. Depreciation 14750
g. Interest on Term Loan 9961
h. Taxes 0
i. Profit After Tax {e-(f+g+h)} 276375
J. Cash Surplus (. Profit After Tax+ Depreciation)-Withdrawal 291125
k. Income from household members by way wages 180000
l. Total Income (j+k) 471125
m. Household Expenses 120000
n.Net Disposable income(l-m) 351125
o.50% of Net Disposable income 175562
Avg repayment obligation p.a ( Prin:58740 Interest: 10997) 69737

50% of net disposable income covers the loan instalment and interest.

Recommendation:
The proposal is viable and complies with the guidelines of Matching Grant Programme.
We may recommend to the concerned Bank.

ANNEXURE – A
Cost of the Capital Assets
Capital Nos Price per unit (Rs) Total Cost (Rs)
1.Poultry Shed 1000 Sq.ft 1 Rs.175/Sq.ft 175000
2. Store for feed 100 Sq.ft 1 Rs.200/Sq.ft 20000
3 Equipment 1000 Birds Rs.25 per Bird 25000
Total 220000
 ANNEXURE – B
Basis & Presumptions
 Birds purchased @1050 per batch
 Birds considered for recurring expenditure @ 1020
 Birds considered for selling 1000
 Floor space @ 1 Sq. ft per bird
 Size of the Poultry shed 100’x10’ = 1000 Sq.ft
 Size of the Feed storeroom 10 x ’10’ = 100 Sq.ft
 Cost of construction of Poultry Shed @ Rs.175 per Sq.ft
 Cost of construction of Feed storeroom @ Rs.200 per Sq.ft
 Cost of equipment @ Rs.25 per bird
 Cost of day old chick @ Rs.20 per bird
 Feed requirement per bird @ 3.3 Kg
 Cost of feed @ Rs. 22 per kg
 Medicines, Vaccines, Labour, Electricity and Misc. charges @ Rs.10 per bird
 Insurance per bird @ Re.1 per bird
 Insurance for sheds and equipment @ Rs.10 per Rs.1,000
 Live weight of bird @ 1.7 Kg per bird
 Sale price @ Rs.100 per kg
 Value of Manure sold @ Re.1 per bird
 Capacity of 1 gunny bag of feed- 50 Kg
 No. of gunny bags available per annum- 470
 Sale price of gunny bags(50 Kg capacity) @ Rs.15 per bag
 Margin @ 10 %
 Interest on bank loan @ 12%
 Rearing period - 6 weeks
 Cleaning period of shed - 2 week
 Depreciation @ 5% on Shed and Equipment
 Depreciation @ 20% on Equipment
 Cost of Litter @ Rs.2 per Bird
Flock Chart
SL.NO Details I YEAR II YEAR TO V YEAR
1 No. of Batches 7 7
2 Rearing Weeks 40 42
3 Batches Sold 6 7
PROFITABILITY PROJECTIONS
Particulars Yr 1 Yr 2 Yr3 Yr 4 Yr 5
(Amount in Rupees)
A. Sales
No. of Batches per year(a) 6 7 7 7 7
Birds per Batch (b) 1000 1000 1000 1000 1000
Live weight per bird( Kg) (c) 2 2 2 2 2
Price per Kg (d) 100 105 110 116 122
Income by sale of Birds (axbxcxd) 1020000 1071000 1124550 1180778 1239816
Sale of manure @ Re.1 per
Bird(axbx1) 6000 6300 6615 6946 7293
Sale of Gunny bags @ Rs.15 per
bag @ 470 bags per year 7050 7403 7773 8161 8569
Total Sales 1033050 1084703 1138938 1195885 1255679
B. Cost of Production
Raw Materials
No. of Batches per year 7 7 7 7 7
No. of Birds per batch 1020 1020 1020 1020 1020
Cost of DOC @ Rs.20/Chick @
1050 chicks per batch 126000 132300 138915 145861 153154
Cost of Feed @ 3.3 Kg/Bird @
Rs.22 per kg@ @1020 chicks per
batch 518364 544282 571496 600071 630075
Cost of Medicines, Vaccines,
Labour, Electricity and Misc.
charges @ Rs.10 per Bird 71400 74970 78719 82654 86787
Cost of Litter @ Rs.2 per bird 14000 14700 15435 16207 17017
Cost of insurance for shed and
equipment @ Rs.10 per Rs.1000 on
the capital cost 2200 2310 2426 2547 2674
Cost of Production(B) 731964 768562 806990 847340 889707
Gross Profit(A-B) =C 301086 316140 331947 348545 365972
Depreciation @ 5% on Shed 9750 9750 9750 9750 9750
Depreciation @ 20% on Equipment 5000 5000 5000 5000 5000
Interest 9961 15345 8883 2467 0
Tax on profit 0 0 0 0 0
Sub Total (D) 24711 30095 23633 17217 14750
Cost of Sales (B+D)= E 756675 798657 830623 864557 904457
Net Profit after tax (A-E) =F 276375 286046 308315 331328 351222
Cash Surplus(F + Depreciation) 291125 300796 323065 346078 365972
 ANNEXURE - C
Working Capital Assessment
1 Unit size (Nos) 1000 Birds
2 Unit cost( Rs)as per NABARD 224000
3 System of rearing Deep Litter System (DLS)
4 Cost of 1050 chicks @ Rs.20/chicks 21000
Cost of Feed for 1020 birds@ 3.3 Kg/bird @
5 74052
Rs.22/Kg of feed
Cost of Medicine Vaccine, Labour, Water,
6 10200
Electricity for 1020 birds @ Rs.10/bird
7 Insurance for 1020 birds@ Re.1/bird 1020
Insurance for sheds and equipment @
8 2200
Rs.10/ Rs.1000 on the capital cost
Cost of litter material for 1020 birds@ Rs.2
9 2040
per bird
Total Working Capital 89512
.,

 Working capital for One Batch of 1000 Birds= Rs.90000

 Working Capital is not prescribed for Broiler units under Contract Farming
arrangement. Only initial investments are required. All inputs and services are
supplied to the poultry farmer under contract farming

ANNEXURE – D
  Loan Amount – Rs.279000/-
 Interest Rate - 11%
 Repayment period – 60 months with a holiday period of 3 months
 Net repayment period – 57 months
Date Particulars Debit Credit Balance NetLoan Interest on Interest Per Principal
Net Loan annum repayment
01.09.2021 To loan 279000 279000 186000
1 By repayment 0 279000 186000 1705 0
2 0 279000 186000 1705 0
3 0 279000 186000 1705 0
4 4895 274105 181105 1660
5 4895 269210 176210 1615
6 4895 264315 171315 1570 9961 14685
7 4895 259420 166420 1526
8 4895 254525 161525 1481
9 4895 249630 156630 1436
10 4895 244735 151735 1391
11 4895 239840 146840 1346
12 4895 234945 141945 1301
13 4895 230050 137050 1256
14 4895 225155 132155 1211
15 4895 220260 127260 1167
16 4895 215365 122365 1122
17 4895 210470 117470 1077
18 4895 205575 112575 1032 15345 58740
19 4895 200680 107680 987
20 4895 195785 102785 942
21 4895 190890 97890 897
22 4895 185995 92995 852
23 4895 181100 88100 808
24 4895 176205 83205 763
25 4895 171310 78310 718
26 4895 166415 73415 673
27 4895 161520 68520 628
28 4895 156625 63625 583
29 4895 151730 58730 538
30 4895 146835 53835 493 8883 58740
31 4895 141940 48940 449
32 4895 137045 44045 404
33 4895 132150 39150 359
34 4895 127255 34255 314
35 4895 122360 29360 269
36 4895 117465 24465 224
37 4895 112570 19570 179
38 4895 107675 14675 135
39 4895 102780 9780 90
40 4895 97885 4885 45
41 4885 93000 0 0 2467 53835
Grant @30% 93000 0
279000 279000 36656 186000

ANNEXURE – E
 Risk assessment for the entrepreneur / enterprise
CREDIT RISK:
a. Whether the borrower is a permanent resident of the area as
per KYC Document Yes
b. No Negative references about the entrepreneur during oral
enquiry Yes
c. In case of SHG Members, the applicant should have
completed one-cycle of loan with full repayment Yes
d. No Previous record of overdue in the loans of the
entrepreneur Yes
OPERATIONAL RISK
e. No major risks for systems failure (e.g. IT servers kept in risk
areas like flood prone or earthquake prone areas) in the
proposed business Yes
f. No major risks for human failure (e.g. chances for monitoring
lapse due to remote or decentralized operations) resulting in
frauds Yes
BUSINESS RISK:
g. The entrepreneur has the adequate experience in the Line of
activity selected Yes
h. The selected activity has enough scope or market Yes
i. The entrepreneur has a plan to manage the Competition in the
industry /sector Yes
j. The business will be commenced on time as per the plan (Is
there any risk for time lapse due to construction or approval
from Govt.) Yes
FINANCIAL RISK:
k. The entrepreneur can maintain the profit margin assumed Yes
l. The payment terms of the clients (credit for 15 / 30 /60 days)
are manageable to the entrepreneur NA
ENVIRONMENT RISK
m. The selected activity is not in the Negative list Yes
i. I have reviewed all the risk factors and find “No major risk” in the proposal.
ii. I find the following risk as a significant risk and the entrepreneur has the following plan
to manage that risk. – No significant risk.

Date: Name and Signature of OSF