Science and Technology Entrepreneurship Project …unpan1.un.org/intradoc/groups/public/documents/UNPAN/...STED P R O J E C T 5 akshayakendra 2.0 Akshaya ‘Bridging the Digital Divide’

1.0 Background

2.0 ‘Bridging the Digital Divide’ Project

3.0 Integrated Strategy for Entrepreneurship

Development

3.1 Campaign

3.2 The e-Literacy Program

3.3 Continued e-Literacy Programs

3.4 Entrepreneurship Development

4.0 Model M-CTC

Marketing, Technical, Financial Aspects

5.0 Conclusion

6.0 Annexures

C O N T E N TC O N T E N T

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ENTREPRENEURSHIP DEVELOPMENT&

MASS EMPLOYMENT GENERATIONIN IT SECTOR IN KERALA

(Linked with e-Literacy Program)

1.0 Background

Kerala is galloping towards a revolution in Information Technology,

which envisages a massive change in a l l spheres of l i fe . The

introduction of e-Governance would make administration better,

speedier and more transparent. Entrepreneurs-big and small- would

spurt all over the State, catering to the demands at national and

international levels. Specialized IT education would help in developing

IT professionals of international standards. Incorporation of IT in

education from the primary level would result in applications of IT

in every profession and day-to-day activities of the next generation.

Thus Kerala would become one of the major IT destination. All these

would augment the quality of life in Kerala.

It is still a dream to make Kerala a major destination of IT. The

masses do not even have the basic knowledge and skills to operate a

computer. So the whole venture should start from the grass roots

and to be implemented on integrated level. The people are to be

prepared to be part of the revolution by making them e-literate, to

begin with. More importantly, a long term plan is needed to ensure

sustainability of e-literacy and its real-life applications.

In this backdrop, an integrated project ‘Bridging the Digital Divide

(Culminating into Sustained e-Literacy and Mass Employment Generation)

has been conceived and initiated by the Kerala State IT Mission,

which is the nodal agency for IT development in Kerala. In tune with

this , STED proposed a concrete p lan for Entrepreneurship

Development & Mass employment Generation in IT sector that also

ensure e-Literacy on a sustained manner.

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2.0 Akshaya ‘Bridging the Digital Divide’ Project

Akshaya - or perpetuating prosperity - marks the beginning of a drive

to ‘Bridge the Digital Divide’ by enabling thousands of ordinary citizens

access relevant information in Malayalam over the Internet. Starting

at the grass-roots level in panchayats, the project will nucleate a

robust digital network in Kerala, which will lower the information

access barrier faced by the common man. The Akshaya Centres will

equip at least one member in each of the 64 lakh families to handle

computers and the basics o f informat ion and communicat ion

technology. Akshaya Centres will also have a set of contents relevant

to the common man in Malayalam. Addressing the issues of access,

skill sets and content, Akshaya will help develop Kerala into India’s

foremost knowledge society.

Akshaya - Salient Features

X 9000 Multipurpose Communicy Technology Centres (AkshayaCentres) throughout Kerala - one centre within 2km of anyhousehold, even in the remotest of areas.

X 64 lakh families to benefit - one computer literate member in

each familyX The common man to have instant access to relevant e-content

in Malayalam

X Public service information now at every citizen’s fingertips

X Faster, more accurate, cheaper communication technologies.

3.0 Integrated Strategy for Entrepreneurship Development

‘Bridge the Digital Divide’ project will be firstly implemented in

Malappuram district, replicated in all districts of Kerala. About

6,00,000 people, one member from each family, will be literated for

basic use to cyber fluency. This will be implemented through 600

Multi-purpose Community Technology Centres (M-CTCs), called

‘Akshayakendram’ having a direct employment potential to the tune

of 3 numbers in each unit.

The project will have mainly four inter-related activities accorded to

the development of sustained entrepreneurship along with sustained

e-literacy in IT sector.

i ) The campaign (3 Months)ii ) Training for complete e-literacy (3 Months)

ii i ) Continued e-literacy program (Follow-up phase)iv) Entrepreneurship Development (Follow-up phase)

Duration : The duration of the campaign and e-Literacy training willbe 100 days. The continued e-Literacy & Entrepreneurship Developmentactivities will be considered as follow-up phase activities that envisagedfor three years.

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Govt. Approach : The approach of the Government towards the

entrepreneur would be to reward him on activities/result instead of

providing unconditional financial support.

3.1 The Awareness & Promotional Campaign

The campaign aimed at popularization of the programme and creation

of awareness among the entrepreneurs and also the people at large.

It will also create global attention to the movement. The events

include articles on the need of the integrated programe by eminent/

accepted personalities in leading dailies and other publications,

advertisements/publicity through both print and electronic medias,

brochures and postures highligting the benefits, IT yatras, road shows,

seminars, discussions, exhibitions, entertainment programs etc.

3.2 Training for Complete e-Literacy

One person from each family in Malappuram district having no

computer trained members wil l be selected and provided with

specially designed training for e-literacy.

About 6 lakh persons will be trained accordingly, through the Multi

purpose Community Technology Centres (M-CTCs) established at their

walkable reach. A specially designed 5-day package will be used for

training. The trainee will be selected by the families itself through

the authorities of concerned LSGB. The age limit preferred is 20-30

years.

The e-literacy training fee for the M-CTC will be Rs.120 per head.

An average number of 1000 persons are to be trained by the M-CTC

within a span of 100 days.

From the M-CTCs point of view, the centre will have benefit of assured

activity during its initial period of operations.

Achiever’s Incentive :

An entrepreneur- performance incentive of Rs. 20,000 will be offered

to the M-CTC, on achieving training of 100% of trainees allocated to

them within the specified time.

This is a measure that not only ensure stake of M-CTCs in achieving

the objectives of 100% literacy but also lead them to an entrepreneurial

environment that demands their own promotional e f forts and

customer-orientation.

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3.3 Continued e-Literacy Programme

The benefits of the initial task of spreading e-literacy among the

masses would be augmented by providing

¨ need-based trainings to the beneficiaries

¨ e-literacy training to other members of the family with a view

of developing 100% e-literate people in the district.

These would ensure continuity of the programme with the involvement

of the people.

After completing the initial training in the I phase, the beneficiaries

would be grouped into di f ferent categor ies such as students,

housewives, professionals etc. and will be allowed to undergo need-

based trainings at the respective centres. The continued e-learning

programme would he lp the benef ic iar ies to at ta in suf f ic ient

knowledge and practical skills in special packages/areas.

Spoken English, personality development, career development, job-

oriented training programs in E-secretaryship and Office assistants,

Accounting etc. are some of the areas which training would be needed

for common man massively . Specific packages are to be designed in

a way to impart such trainings using CDs and IT based tools through

M-CTCs. The IT Mission, under the ‘content generation’ initiatives

may create suitable tools and distribute to the M-CTCs at free of

cost.The M-CTCs can offer these exclusive training to the public.

M-CTCs would be able to offer these trainings at a concessional rate,

if a subsidy component to the training fee is being introduced by the

Govt. Modalities in this regard are to be worked out in consultation

with the LSGBs.

Such a measure of rewarding M-CTCs in the continued e-Literacy

program (proposed as part of follow-up phase) will also provide a

cushion to the M-CTCs in the long process of developing sustainable

entrepreneurship in the State. The project is envisaged to implement

in such a way that the stake of generat ing customers by the

entrepreneurs themselves is increasing gradually during the period

of teething problems and ultimately stabilise on their own feet.

3.4 Entrepreneurship Development

At the end of the campaign, nearly 600 training centres, with

sufficient infrastructure will be available in the district. These

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centres would cater to the needs of the local people. Sustainability of e-

literacy largely depends on existence and growth of these centres.

Some of the key aspects and suggested measures with regarded to

the viability and sustainability of M-CTCs are discussed below

Entrepreneur & Selection of Entrepreneurer:

Identification of right entrepreneur is one of the important aspect in the

success of the venture. Pr imary le lve l screening/se lect ion o f

entrepreneurs by the LSGBs is suggested. The guidelines regarding

criteria and mode of selection is being formulated seperately.

Entrepreneurial Orientation Program (EOP) :

The EOP, proposed to be implemented in the pre-operational stage is

meant for the person who engage with day-to-day management and

activities of the M-CTC. He can be either the investor or the Manager.

Two persons from each M-CTC will be participate in the EOP. The

objectives of the EOP are to provide a right direction/orientation to

the participants who are to implement the e-literacy program and

also lead the proposed entrepreneurial ventures.

The coverage of the EOP that focus on specific business model will

inc lude concept o f M-CTC, or ientat ion towards a success ful

entrepreneurial career, marketing of services, exposure to the e-

literacy courseware & training skill etc. The 2 participants from each

M-CTCs attending EOP are to impart training to other faculties in

the ir M-CTC for impart ing e- l i teracy t ra in ing wi th spec i f ied

courseware. The duration of the program will be 2 days.

Infrastructure :

The entrepreneur may identify and make suitable premise available

for the M-CTC. The minimum area required is 400 sq.ft.

Entrepreneurship Development Program :

The Entrepreneurs of M-CTCs will have to be provided with refresher/

motivational packages from time to time to make them successful in

the changing environment. The package would be designed in modules

of 2 days and imparted periodically once in two to three months,

based on a brick-cement-brick approach.

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The proposed EDPs are addressing practising entrepreneurs. The

training modules will be designed with business/management games,

role-plays, motivational laboratories etc. The main promoter/manager

from each of the 600 M-CTCs will participate. The group size may be

limited to 25 trainees to ensure effectiveness of the inter-active

sessions.

Unlike conventional EDPs, the brick-cement-brick approach will

provide more rooms for re-inforcement of training inputs among

entrepreneurs in the learning process. The entrepreneurs will have

enough opportunities to link the inputs (what they learn in the

training) to the practical entrepreneurial environment. Learning from

feed-back is more effective.

It is a generally accepted truth that the success rate of conventional

EDPs in the state, which usually replicating the well-known EDII

model, is very low.

The proposed program directly target solid outcome of 600 sustainable

entrepreneurial ventures in the district.

Entrepreneur Support Cell (ESC) :

The small entrepreneurs who are venturing in the most dynamic

sector, ie IT, will need a support system to provide them professional

guidance and overall managerial directions.

Hence, a District level Entrepreneur Support Cell(ESC)is proposed

to be set up under jo int ini t iat ive of the IT Mission, Distr ict

Panchayath and STED Project. The support will be necessary for

atleast 3 years. The ESC will be able to assist the M-CTCs by way of

❏ Marketing Guidance/Support

❏ Technical guidance for continous improvements

❏ Content generation related support

❏ Overall Management Support etc.

Professionals from the stream of Marketing, Accounting etc are to be

engaged in the same district under the ESC who can closely interact

and assess performance of M-CTCs, streamline marketing functions,

formulate statergies for improvements by considering potential

changes and developments in the IT scenario.

The ESC will also be able to assist the M-CTCs by tapping bulk orders

from the market.

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4.0 Model M-CTC

The marketing, technical and financial aspects of a model M-CTC

are discussed in the following paragraphs.

4.1 Market, Marketing

The Multi-purpose Community Technology Centre (M-CTC) would be

positioned as a ‘local node’ engaged in various IT based activities in

the locality of around 1000 families. It would cater the need of the

local people and also function as a direct link between the people

and the Government/ Pr ivate organisat ions in the areas o f

Information, Communication, IT penetration services etc.

The post-literacy market environment would be drastrically

different from the present situation that e-literacy level is a meagre

1.3% of population in the district. Further, the specific product/

serv ice mix o f an M-CTC would vary f rom entrepreneur to

entrepreneur or location to location. Hence, a specific marketing

analysis is beyond the scope; however the marketing aspects of a

model M-CTC in general is briefly highlighted below.

The M-CTCs will function under unique banner-‘Akshaya Kendram’.

There is a wide spectrum of opportunities that tappable by the centre.

For analytical purposes, the services of M-CTCs are categorised into

six groups as follows

X Data Collection/Management

X Training/Education

X Web Based consultancy Services

X Printing & Publishing

X Information Sales

X Other General Services

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4.1.1 Data Collection & Management:

The unique strength of network of around 10,000 M-CTCs through

out the state opens up a distinct marketing opportunity in data

collection, updating and management. The target groups are state/

central govt. departments, international orgns. such as UNDP,WHO;

industries, researchers etc. Some of the activities proposed are

Census ( Govt.)

Resource Data ( GOI, GOK, UN …)

Market Data (Industry)

Research Data

Grameen Call centre

Blood Bank

Eye Bank ....

4.1.2 Training & Education:

There is always scope for marketing of training and education in

the state which records a high literacy rate in the country and

where parents have higher level of inclination towards education of

their children. Instead of offering conventional training packages,

the M-CTCs wil l launch unique packages uti l ising its distinct

strengths as well as advancement in web technologies. Exclusive

packages would be designed by experts and different levels of digital

content would also be provided at free of cost by the Govt. for specific

trainings in selected areas identified. Some of the unique activities

proposed are

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i) e-literacy and Continued e-literacy programs

X e-literacy training

M-CTCS will be engaged in imparting e-literacy to one member

from each families in the district during the initial period of 100

days. Each centre will gain an assured income of Rs. 1,40,000

by successfully train 1000 persons in their catchment area under

this sponsored program

X E-literacy Program extended to 2nd or 3rd members inthe

family

On completion of the the above sponsored program for e-

literacy, the centre will have right to extend training to

other members of the families under their catchment area.

X Continued second level E-programs to the beneficiary of 1st

program

ii) Other Structured Training

X Spoken English

X Personality Development

X Career Development

X Other job-oriented training

iii) E-learning Node

iv) E-Tuition Centre

v) Entrance Coaching

vi) Competitive Exams (PSC, UPSC …..)

vii) On-line Exams

4.1.3 Web Based consultancy Services:

eg: Marriage Consultancy

Real Estate

Motor Vehicle

Placement services

Telemedicine etc.

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4.1.4 Printing & Publishing:

X Digital Albums

X DTP

X Internet Printouts

X Identity Cards

X Directories – Print & Digital

(Industry, Business, Professionals, LSGBs, NRIs)

4.1.5 Information Sales:

X Govt. Information Sales

Application Forms

X Univesities, Exams- Application forms

X CD Rom

X Related Print Medium

4.1.6 Other General Services:

X Kids Corner

X E-courier

X Internet Telephony

X Chat & Voice Chat

X Web Browsing

X E-mail

Product Mix & Sales realisation :

The sales turnover of a model M-CTC during ‘normal year’ is projected as Annexure-

1. An amount of Rs. 5.43 lakh is arrived on the basis of following calculations.

i) There is immense scope for Akshaya Kendras in offering data collection &

updates services. The M-CTC would generate tie-up for providing a specific

data regularly updated. Such services are required for various departments

under the state Govt., Central Govt., UN organisations etc.

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akshayakendraillustrative eg:

(Resource data collection & updating)

Fixed monthly fees/M-CTC from Agri Ministry

Land:cultivated/hectares of each crops,

production other agro data

Fixed monthly fees from Industry Ministry

Industry:Production, employment

Households data…..

….List such focus areas/Resource mapping of each Ministry

Pachayat level NRI database

Health indicators of citizens

Human Resources and their Skillsets,

Unemployment, and other data

Pay monthly fees

Say 30 Focus areas @ Fees of Rs 100.00 per month

(during normal year)

Assuring 50% direct expenses, the annual income from 30

focus areas is Rs.18,000.

ii) There is further scope for data collection & management services

for Industries, marketers, development agencies, research

organisations etc. representing Government, Quasi-Govt. or Private

sectors. Such requirements may be one-time or frequent.

Assumming a data collection personnel is appointed at a cost of

Rs.200 per day covering cost of travelling, manpower etc. who

would visit and collect data from 10 households in a day; the

average cost would be Rs. 20 per day. According to informations

from experts in the field, the expenditure per questionnaire in

the present mode of data collection is Rs. 15 on a conservative

end and it goes upto Rs.200 based on the type of data, respondent,

study etc.

For calculation purposes, it is assumed that the M-CTC will offer

these services, regarding 1000 households under his catchment

area, at a price of Rs. 5 per questionare and there is a minimum

of two orders in a month, the unit will generate an amount of

Rs. 1,20,000 per annum.

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iii) The unit will also have immense opportunities in tapping the

market of ‘Training & Education’ by designing exclusive packages

as indicated earlier (Refer 4.1.2) The details on the mode of

revenue is given in Annexure - 1.

The first level content provided to the M-CTCs on free of cost

during the compaign (first 100 days imparts training to one

member in each family) will be used to extend e-literacy to other

members of the families. Taking an average of 5 persons in a

family, there are 5000 persons in the catchment area of an M-

CTC including 1000 persons trained initially. For calculation

purposes, it is assumed that 500 persons out of the above (10%)

at a rate of Rs.150 per trainee is tappable at the minimum level;

that accounts for Rs.75000 annual during normal year. Similarly,

second level programes will be offered to those who undergone

the initial e-literacy programe (1000 persons) by which 150

persons (15%) is expected to be turned up. Rs. 75000 will generate

in normal year at a rate of Rs. 500/trainee. Other digital content

based training for spoken english, personality development,

Typing Tutor etc will be unique in Akshaya Kendras. During

normal year of operations, 200 participants (4% of population) is

estimated as tappable on a conservative mode, which amounts

for Rs.1,50,000.

iv) There is also scope for rental services of computers which would

also augment the objectives of computer penetration in the society.

Considering the post e-literacy environment, there will be 1000

literates in the catchment area of an unit. Some of them will be

in need of own a computer their own for personal use at their

home or office. If the M-CTC can offer a computer on rental at a

monthly rental rate of Rs. 750 to 1000 it is assumed that atleast

5 persons (0.5%) will easily be tappable; which amounts Rs.45,000

per annum.

v) There are many other activities the unit would render which are

indicated earlier in paras 4.1.3, 4.1.4, 4.1.5 and 4.1.6 out of all

these an average income of Rs.200 is assumed that earmarked to

an annual revenue of Rs.60,000 in the normal year.

The revenue during the 1st year is estimated at 50% of the above.

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4.2 Technical Aspects

4.2.1 Requirement of computers & capacity utilisation

The unit is proposed to be set up with 10 numbers of Multi-

media computers along with a web camera, UPS, battery,

printer and other accessories. This is meant for the activities

already mentioned including rental services.

The M-CTCs are to function for 12 hrs; 7 AM to 7 PM especially

during the period of f irst 3 months which the units are

supposed to concentrate only on implementing e-literacy

project.

Using 10 computers, the installed capacity of the unit will be

10,800 computer hours for the periods of 3 months. Assuming

85% i.e; 9180 computer hours as practical ly achievable

capacity; the unit can impart e-literacy training for 650

participants with the 14-hr package specified.

Miscellaneous fixed assets required are office furniture and

computer tables & chairs.

4.2.2Requirement of Utilities

Power is required for working of computers and l ighting

purposes. Water is required only for drinking purpose.

4.2.3Requirement of Manpower

During the initial period of 3 months, five persons will be

engaged for e-literacy training.

4.2.4Requirement of materials

This head refers to computer consumables, paper etc.

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4.3 Financial analysis

Cost of the Project

a . Computer & accessories - 3,08,000

b. Miscellaneous fixed assets - 25,000

c. Contingency @ 5.0% - 15,000

d. Preliminary & preoperative expenses - 1,000

e . Working capital - 34,000

Total - 3,83,000

Computer & accessories : The cost of Computer & accessories

proposed to be purchased are given in annexure-2. The cost

estimate of miscellaneous items are also given in Annexure-2.

Prel iminary & Preoperative expenses : This is estimated as

Rs.1000/- . This perta ins to the expenses o f pro ject report

preparation, printing, stationary etc.

Contingency : Contingency is taken at 5% of the equipments. This

is estimated as Rs.15,000/-.

Working capital : Detailed working capital projections are given

in Annexure - V. For calculating the cost of the project, the total

requirement in the first year is taken.

Means of Finance : Details are shown in Annexure - VII.

Based on the norms for special schemes for Akshaya Kendras

initiated by the SLBC that implements through various banks, the

unit expects an amount of Rs. 2.0 lakhs as loan from bank. The

total project cost is Rs. 3.83 lakhs. The gap in the project cost ie

Rs. 1.83 lakhs will be brought in by the promoter as equity.

Profitability Projection : A detailed working results & profitability

statement are shown in Annexure - X.

Following are the major assumptions taken for calculations.

i ) Being a unit of ‘service’ in nature, the maximum achievable

capacity of the unit is considered as 80% of the installed

capacity. The unit is expected to operate at 50%, 65% and

80% of the installed capacity during the first, second and

third years respectively.

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i i ) Depreciation is calculated at 25% on equipments such as

Computers, Printers, Scanner etc. and 15% on MFA.

ii i ) Insurance is taken at 1% on equipment cost.

iv) The wages and salaries are assumed to be increased by 5%

annum to provide annual increment and benefits.

v) Repairs & Maintenance prov is ion is taken at 2% on

equipments. The scenario of large number of M-CTCs in the

district and scope of collective service contract is considered

in this.

vi) The interest on term loan is taken at 12.5% per annum.

Moratorium period of 3 months is considered.

vii) The provision for income tax is considered as applicable.

Cash Flow : A detailed cash flow statement for 5 years of operation

is attached as Annexure - XI.

Debt Service coverage ratio : The detailed computation of DSCR

is shown in Annexure - XIII. The average DSCR is 2.8.

Break-even analysis : The unit will break-even at 42% of the

achievable capacity. Further it will generate cash surplus at any

level above 29% of capacity. The detailed computation is shown in

Annexure - XIV.

5.0 Conclusion & Recommendations

From the marketing, technical & financial analysis, it can be seen

that the proposed network of ‘Akshaya Kendram’ is technically

feasible and financially viable.

sd/-

T.K. Manzoor

Project Director

STED Project

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[Rs]PRODUCT MIX AND SALES TURNOVER [ ANNUAL]

Sl. Product Description Unit Quantity Rate AmountNo.

1 Regular Data collection & updating-Rs100/month/ focus area- 30 focus Nos. 30 600.00 18000areas of GOI, GOK, UN…assume50% direct expenses

2 Research Data collection & Manage-ment for marketers, researchers etc. Nos. 24 5000.00 120000- Rs 5/family* 2 orders/ month

3 Digital albums, Directories,DTP workInformation Printouts, Kids corner,Internet Browsing services,VoIP calls,Health cards, web based consultancyin Marriage, Real estate, placement Nos. 60000etc; and other data/news/networkedservices from among those detailedin write-up 4.1.3 to 4.1.6 Rs 200/day

Continued E- Trainings:4 Continued E-program to the

beneficiary of 1st program [15%] Nos. 150 500.00 75000

5 E-literacy Program extended to 2nd Nos. 500 150.00 75000or more members in the family-10% of population

6 Other exclusive trainings using digitalcontent- like spoken English, Malay- Nos. 200 750 150000alam/English Typing Tutor, Persona-lity Dev. etc. [4% of population/year]

7 Rental of computers- 5 Nos.@ Rs 750/month (per hr Rs 10 or so) 5 9000 45000

Total Rs. 543,000

Say Rs. 5.43 Lakhs

8 Add: in 1st year (e-literacy program)Training fee from LSGB (GP+BP)[1000 Nos.* Rs.100/-] Nos. 1000 100 100000Achiever’s Incentive from LSGB (DP) 20000Trainee Regn. Fee @Rs 20 Nos. 1000 20.00 20000

140000Say Rs. 1.40 Lakhs

Capacity Utilisation:Ist Year- 50% (1to6)+7+8 Rs. 4.34 lakhs

IInd Year- 65% (1to6)+7 Rs. 3.69 lakhsIIIrd Year- 80% (1to6)+7 Rs. 4.43 lakhs

Annexure - 1

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[Rs]LIST OF EQUIPMENTS & MISC. FIXED ASSETS: PROPOSED

Sl. Description Unit Nos Rate AmountNo.

Equipments:

1 P4 Computers with LAN Cardincluding softwares Nos 10 24000 240000

2 Web camera, Printer, Scanner,Modem, CD writer Nos 1 15000 15000

3 UPS + battery 1 40000 40000

6 Cable, Networking components Nos 1 10000 10000

7 Telephone connection Nos 1 3000 3000

Subtotal 308000

Misc. Fixed Assets:Computer Tables, chairs,office furnitures 25000

Total 333000

Say Rs 3.33 Lakhs

Note: The above estimate subject to collective bargaining

Annexure - 2

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[Rs]REQUIREMENT OF CONSUMABLES & STATIONARY [ANNUAL]

Sl. Raw materials Unit Quantity Rate AmountNo.

1 Computer stationeries & Consumables(paper, ribbon, ink, floppy) L.S 9000

Total 9000

Say Rs.0.09 Lakhs

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[Rs]MANPOWER REQUIREMENT

Sl. Category Unit No. Wages AmountNo.

1 Skilled Personnel Nos 3 2500 7500

2 Support staff Nos 2 1000 2000

Sub Total 5 Rs. 9500

Add benefits @10.00% Rs. 950

Total Rs. 10450

Annual salaries & wages Rs. 1.25 Lakhs

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[Rs in Lakhs]PROJECTED WORKING CAPITAL REQUIREMENTS

Sl. Item HoldingNo. (Weeks) Year 1 Year 2 Year 3 Year 4 Year 5

1 Stock of consumables/stationaries 8.0 0.01 0.01 0.01 0.01 0.01

2 Stock of Packg./OtherMaterials 0.0 0.00 0.00 0.00 0.00 0.00

3 Work-in-Process 0.0 0.00 0.00 0.00 0.00 0.00

4 Finished Goods 0.0 0.00 0.00 0.00 0.00 0.00

5 Sundry Debtors 0.0 0.00 0.00 0.00 0.00 0.00

6 Working Expenses 9.0 0.33 0.36 0.40 0.41 0.43

Total Working Capital (TWC) 0.34 0.37 0.41 0.42 0.44

Less: Working Capital Loan 52% 0.18

Margin Money for WorkingCapital 48% 0.16

Increase in Working Capital 0.34 0.03 0.04 0.01 0.02

Increase in Working Capital Loan 0.18

Interest on Working Capital Loan 12.50% 0.02

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[Rs in Lakhs]COST OF PROJECT

Sl. already to beNo. incurred incurred Total

1 Land 0.00

2 Building 0.00

3 Equipments 3.08

4 Misc. Fixed Assets 0.25

5 Contingency @ 5.0% of 3 0.15

6 Prel. & Pre-operative exp. 0.01

Net Fixed Assets 0.00 3.49 3.49

7 Total Working Capital {TWC} 0.00 0.34 0.34

Total Cost of the Project 0.00 3.83 3.83

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[Rs in Lakhs]

MEANS OF FINANCE

Already Proposed Totalrised to be rised Rs.

1 Term Loan 1.82 1.82

2 Working Capital Loan [WCL] 0.18 0.18

Sub-Total 0.00 2.00 2.00

3 Promoter’s Contribution 0.00 1.83 1.83

Total 0.00 3.83 3.83

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COMPUTATION OF DEPRECIATION(Depreciation Written Down Value Method)

Existing ProposedM/C. Misc.Fixed

& Eqpt. Assets Total

25% 15% YEAR 1

Opening Balance 3.23 0.26 3.49Depreciation 0.81 0.04 0.85Closing Balance 2.42 0.22 2.64

YEAR 2


YEAR 3


YEAR 4


YEAR 5


YEAR 6


YEAR 7


YEAR 8


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REPAYMENT OF PROPOSED CAPITAL EXPENDITURE LOAN UNDER CBC SCHEME

Loan Amount : Rs. 1.820 Repayment Period of CEL (Years) : 5.0Quarterly Instalment : Rs. 0.097 Moratorium (Years : 0.3Interest Rate : 12.50%

Year 1 2 3 4 5

Opening Balance 1.820 1.529 1.141 0.753 0.365

1 st Quarter Repayment 0.000 0.097 0.097 0.097 0.097

Balance 1.820 1.432 1.044 0.656 0.268

2nd Quarter Repayment 0.097 0.097 0.097 0.097 0.097

Balance 1.723 1.335 0.947 0.559 0.171

3rd Quarter Repayment 0.097 0.097 0.097 0.097 0.097

Balance 1.626 1.238 0.850 0.462 0.074

4th Quarter Repayment 0.097 0.097 0.097 0.097 0.074

Closing Balance 1.529 1.141 0.753 0.365 0.000

Interest:1st Quarter 0.057 0.048 0.036 0.024 0.0112nd Quarter 0.057 0.045 0.033 0.021 0.0083rd Quarter 0.054 0.042 0.030 0.017 0.0054th Quarter 0.051 0.039 0.027 0.014 0.002

Principal Repayment1st Quarter 0.000 0.097 0.097 0.097 0.0972nd Quarter 0.097 0.097 0.097 0.097 0.0973rd Quarter 0.097 0.097 0.097 0.097 0.0974th Quarter 0.097 0.097 0.097 0.097 0.074

Summary :

Interest 0.219 0.174 0.126 0.076 0.026Loan Repayment 0.291 0.388 0.388 0.388 0.365

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PROJECTED PROFITABILITY STATEMENT[Rs in Lakhs]

Years 1 2 3 4 5

5.43 5.43 5.43 5.43 5.43 5.43 5.43 5.430.50 0.65 0.80 0.90 0.90 0.90 0.90 0.90

1. Sales 4.340 3.690 4.430 4.4304.430

2. Cost of ProductionConsumables & Stationary 0.045 0.059 0.072 0.0810.081packaging/Other Materials 0.000 0.000 0.000 0.0000.000Wages 1.250 1.313 1.379 1.4481.520Repairs & Maintenance 0.062 0.068 0.075 0.0830.091Insurance 0.031 0.031 0.031 0.0310.031Depreciation 0.850 0.640 0.480 0.3600.280Power charges 0.180 0.234 0.288 0.3240.324Rent 0.180 0.198 0.218 0.2400.264Telephone & Internet 0.180 0.234 0.288 0.3240.324charges

Sub Total 2 2.778 2.777 2.831 2.8912.915

3. Selling & Administrative ExpensesSelling expenses 0.109 0.092 0.111 0.1110.111Administrative exp. 0.087 0.074 0.089 0.0890.089

Sub Total 3 0.196 0.166 0.200 0.2000.200

4. Financial ExpensesInterest on

Term Loan 0.219 0.174 0.126 0.0760.026Interest on

Working Capital Loan 0.040 0.040 0.040 0.0400.040Interest on

Alreay indebted Loan 0.000 0.000 0.000 0.0000.000

Sub Total 4 0.259 0.214 0.166 0.1160.066

GRAND TOTAL (2+3+4) 3.233 3.157 3.197 3.2073.181

Operating Profit 1.11 0.53 1.233 1.2231.249Preliminary expenses Written off 0.002 0.002 0.002 0.0020.002Income Tax 0.277 0.132 0.308 0.3050.312

NET PROFIT 0.831 0.396 0.923 0.9160.935

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[Rs in Lakhs]

PROJECTED CASHFLOW STATEMENT

Years Constn. 1 2 3 4 5Period

A. SOURCE :

0.259 0.214 0.166 0.116 0.066

0.277 0.132 0.308 0.305 0.3120.831 0.396 0.923 0.916 0.935

1 Profit Before Interest & tax 1.367 0.742 1.397 1.337 1.3132 Depreciation 0.850 0.640 0.480 0.360 0.2803 Promoter’s capital 1.8304 Term loan 1.8205 Working capital loan 0.1808 Prel. & Pre-op. exp. W/off 0.002 0.002 0.002 0.002 0.002

Sub Total 3.650 2.399 1.384 1.879 1.699 1.595

APPLICATION :

1 Fixed Assets 3.4902 Pre. & Pre-opr. exp. 0.0103 Current Assets 0.340 0.03 0.040 0.010 0.0204 Repayment of Term loan 0.291 0.388 0.388 0.388 0.3655 Term Loan Interest 0.219 0.174 0.126 0.076 0.0266 Repayment of W/C 0.000 0.000 0.000 0.000 0.0007 Working Capital Interest 0.040 0.040 0.040 0.040 0.0408 Repayment of Availed loan 0.000 0.000 0.000 0.000 0.0009 Interest on availed loan 0.000 0.000 0.000 0.000 0.000

Income Tax 0.277 0.132 0.308 0.305 0.312

Sub Total 3.500 1.167 0.764 0.902 0.819 0.763

Opening Balance 0.000 0.150 1.382 2.002 2.979 3.859

Net Surplus 0.150 1.232 0.620 0.977 0.880 0.832

Closing Balance 0.150 1.382 2.002 2.979 3.859 4.691

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[Rs in Lakhs]PROJECTED BALANCE SHEETS

YEARS 1 2 3 4 5

LIABILITIES :

1 Promoter’s Capital 1.830 1.830 1.830 1.830 1.830

2 Reserves & Surplus 0.831 1.227 2.150 3.066 4.001

3 Term Loan O/S 1.529 1.141 0.753 0.365 0.000

4 Working Capital Loan O/S 0.180 0.180 0.180 0.180 0.180

5 Already Indebted Loan O/S 0.000 0.000 0.000 0.000 0.000

6 Margin Money Loan O/S 0.000 0.000 0.000 0.000 0.000

7 Grant & Miscellaneous 0.000 0.000 0.000 0.000 0.000

4.370 4.378 4.913 5.441 6.011

ASSETS :

1 Fixed Assets [wdv] 2.640 2.000 1.520 1.160 0.880

2 Current Assets 0.340 0.370 0.410 0.420 0.440

3 Cash 1.382 2.002 2.979 3.859 4.691

4 Prelim. & Pre-opr. 0.008 0.006 0.004 0.002 0.000

4.370 4.378 4.913 5.441 6.011

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[Rs in Lakhs]

DEBT SERVICIE COVERAGE RATIO

Years 1 2 3 4 5

1 Profit 0.83 0.40 0.92 0.92 0.942 Depreciation 0.85 0.64 0.48 0.36 0.283 Preliminary expenses W/O 0.00 0.00 0.00 0.00 0.004 Interest on Term loan 0.22 0.17 0.13 0.08 0.035 Interest on W/C loan 0.04 0.04 0.04 0.04 0.046 Interest on Existing loan 0.00 0.00 0.00 0.00 0.00

Total A 1.94 1.25 1.57 1.40 1.29

1 Int. on Term loan 0.22 0.17 0.13 0.08 0.032 Int. on W/C loan 0.04 0.04 0.04 0.04 0.043 Int. on Existing loan 0.00 0.00 0.00 0.00 0.004 Repayment of Term loan 0.29 0.39 0.39 0.39 0.375 Repayment of W/C loan 0.00 0.00 0.00 0.00 0.006 Repayment of Existing loan 0.00 0.00 0.00 0.00 0.00

Total B 0.55 0.60 0.56 0.51 0.44

Debt Service Coverage Ratio 3.53 2.08 2.80 2.75 2.93

Weighted Average D S C R 2.80

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BREAKEVEN ANALYSIS ( III YEAR OF OPERATION)

A. SALES 4.43

B. VARIABLE COSTRawmaterials 0.07Other Materials 0.00Salary & Wages- 50% 0.69Power 0.29Repairs & Maintenance 0.08Selling expenses 0.11Admn. Expenses- 40% 0.04

SUB-TOTAL (B) 1.28

C. FIXED COSTInsurance 0.03Depreciation 0.48Admn. expenses 60% 0.05Salary & Wages- 50% 0.69Int. on Term Loan 0.13Int. on W/C Loan 0.04Int. on Availed Loan 0.00Rent 0.22

SUB-TOTAL (C) 1.64

BREAK-EVEN POINT 42%

BREAK-EVEN SALES Rs 1.86

Cash Break-even at 29%

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2.0 About STED

Science and Technology Entrepreneurship Development (STED) Project

is a self reliant project under the Department of Science and Technology,

Govt. of India, functioning with dual objectives of Entrepreneurship

Development and Employment Generation.

STED offers a variety of services- Entrepreneurial Development, Mass

Employment Generation, job-oriented Skill Development and Executive/

Management Development Programmes, dissemination of industrial

in format ion, Pro ject consul tancy, Pro ject ideas and Pro f i les ,

Preparation of Detailed Project Reports, conducting industrial surveys

& studies etc.

At STED, the importance and scope of the IT sector was recognised

long back. A number of computer-based training programmes are being

designed and conducted for individuals and staff for Government

and private sector organisations.

In tune to the thrust given by the Government policy, STED has

identified Information Technology (IT) as one of the key areas to

focus its activities. Realising the potential, we are concentrated on

chalk ing out programs/pro jects under which the IT sector

developments are linked and benefited for employment generation

in a big way.

We are also associating with the Local Self Government bodies from

the very start of the Peoples’ Plan Programme. All the District

Panchayaths, Corporations, Municipalities and a big chunk of the

Block and Grama Panchayaths and various departments/ agencies

like Kundumbasree, UPAD, Women’s Welfare, SC/ST Development

etc. have utilised STED services massively.

It is also distinct advantage that STED has a state- wide network of

district level offices called STED Sub centres at every District head quarters

and 130 Authorised Computer Training centres spread over Kerala.

Documents

Science and Technology Entrepreneurship Project …unpan1.un.org/intradoc/groups/public/documents/UNPAN/...STED P R O J E C T 5 akshayakendra 2.0 Akshaya ‘Bridging the Digital Divide’