| PARTICULARS | DETAILS |
| Industry | Packaged Drinking Water Manufacturing (BIS/FSSAI-certified) |
| Location | Industrial Area, Madhya Pradesh |
| Business Age | 3 Years (GST-registered and operational) |
| Annual Turnover | ₹68 Lakh (FY 2023-24, verified through GST records) |
| Loan Requirement | ₹55 Lakh Term Loan for RO plant upgrade and automated bottling line |
| Bank Applied | Nationalised Bank – Central India Branch |
| Previous Status | Project report rejected twice — distribution assumption unsubstantiated, working capital cycle not explained |
THE PROBLEM
The client’s packaged water unit was supplied to local retailers and a few institutional buyers, and needed ₹55 lakh to upgrade its RO plant capacity and add an automated bottling line to enter the larger 20-litre jar segment. Two prior project reports had been rejected:
Problem #1 – Distribution Assumption Unsubstantiated: The first report projected sales tripling in Year 1 by “expanding into new markets,” with no distributor agreements, no institutional buyer pipeline, and no explanation of how the additional volume would actually reach customers. The bank rejected it as speculative.
Problem #2 – Working Capital Cycle Not Explained: The second report fixed the sales projection but didn’t explain the bottle/jar deposit-refund cycle specific to this industry (jars are refundable-deposit assets, not one-time sale items), leading to an incorrect and understated working capital requirement that didn’t match how cash actually flows in this business model.
OUR APPROACH — Step-by-Step Project Report Preparation
Step 1 – Root Cause Analysis
Our senior CA reviewed both rejected reports line-by-line. Key issues identified: no distributor or institutional buyer documentation; jar deposit-refund cycle omitted from working capital calculation entirely; and machinery power cost for the new automated line was missing from operating expenses.
Step 2 – Financial Reconstruction
We collected 3 years of ITRs, audited P&L statements, 12 months of bank statements, GST returns, and machinery quotation. Actual turnover of ₹68 lakh was verified independently through GST data.
Step 3 – Realistic Projection Building
Instead of assuming market expansion with no basis, we built projections grounded in 2 signed institutional supply agreements (a local hospital chain and a corporate office park) plus organic retail growth at the sector’s typical 15% rate. Year 1: ₹92 Lakh | Year 2: ₹1.12 Cr | Year 3: ₹1.34 Cr.
Step 4 – DSCR Engineering
With correct power cost loading and full interest on the phased disbursement, Net Cash Accruals rose to ₹9.8L in Year 1, rising to ₹15.2L by Year 3. DSCR: 1.34 (Y1) → 1.76 (Y2) → 2.18 (Y3) — all comfortably above 1.25.
Step 5 – Working Capital Cycle Correction
Rebuilt the jar deposit-refund cycle into the working capital model — showing the number of jars in circulation, deposit float held, and refund liability — giving the bank an accurate, industry-appropriate working capital requirement instead of an understated figure.
Step 6 – Bank Submission Support
Our CA personally attended the pre-sanction meeting and responded to the credit officer’s 4 queries on institutional buyer credibility and the jar deposit cycle on the same day.
KEY FINANCIAL DATA — Project Report Summary
| METRIC | FY 2023-24 (ACTUAL) | YEAR 1 (PROJECTED) | YEAR 2 (PROJECTED) | YEAR 3 (PROJECTED) |
| Annual Sales Turnover | ₹68,00,000 | ₹92,00,000 | ₹1,12,00,000 | ₹1,34,00,000 |
| Gross Profit | ₹10,20,000 (15%) | ₹15,64,000 (17%) | ₹20,16,000 (18%) | ₹25,46,000 (19%) |
| Net Profit (PAT) | ₹4,08,000 (6%) | ₹6,44,000 (7%) | ₹8,96,000 (8%) | ₹12,06,000 (9%) |
| Net Cash Accruals | ₹4,80,000 | ₹9,80,000 | ₹12,40,000 | ₹15,20,000 |
| DSCR | – | 1.34 ✓ | 1.76 ✓ | 2.18 ✓ |
| Current Ratio | 1.4 | 1.7 ✓ | 1.9 ✓ | 2.2 ✓ |
| Debt-to-Equity Ratio | 0.8 | 1.6 ✓ | 1.2 ✓ | 0.9 ✓ |
| Term Loan Eligibility | – | ₹55,00,000 | ₹60,00,000 | ₹68,00,000 |
THE RESULT
LOAN SANCTIONED — Rs. 55 LAKH TERM LOAN APPROVED
| PARAMETER | DETAILS |
| Amount Sanctioned | ₹55 Lakh Term Loan – Full applied amount approved |
| Processing Time | 17 working days from document submission to sanction letter |
| Interest Rate | 11.10% p.a. (MCLR-linked) due to strong DSCR and institutional buyer documentation |
| Bank Queries | 4 queries raised, all resolved within 24 hours by our CA team |
| Previous Rejections | Two earlier rejections successfully overturned through distribution documentation and working capital correction |
| Client Impact | RO plant upgraded, 20-litre jar segment launched, institutional supply contracts worth ₹18 lakh/year secured |