Detailed Project Report
Biodegradable / Compostable Bag Unit
—
Prepared on: 13 November 2026 · Prepared with Building Business DPR (buildingbusiness.in)
01 Project at a glance
- Total project cost
- ₹47.78 L
- Term loan from bank
- ₹31.05 L
- Promoter’s contribution
- ₹4.78 L
- Subsidy
- ₹11.94 L
- Sales · Year 3
- ₹0.00 L
- Profit after tax · Year 3
- ₹-11.64 L
- Average DSCR
- -0.66
- Break-even (% of capacity used)
- —
02 Promoter and unit
| Promoter name | — |
|---|---|
| Business / firm name | — |
| Legal form | Proprietorship |
| Address of the unit | — |
| Applicant category | General · Rural |
03 The project
Blow-film and cut compostable carry bags from starch-based or PLA material.
| Main product or service | Biodegradable / Compostable Bag Unit |
|---|---|
| Installed capacity per year (at 100%) | 10,000 units |
04 Market
- Retail shops and supermarkets
- Fruit and vegetable sellers
- Brands needing compostable packaging
- Packaging distributors
- Direct supply to retail chains
- Municipal and institutional orders
05 Plant and machinery
| Item | Qty | ₹ | Total ₹ |
|---|---|---|---|
| Starch-bag line (total plant & machinery) (× —) | 1 | 33,00,000 | 33,00,000 |
| Vertical mixing (blending) machine | 1 | 0 | 0 |
| Plastic extruder and blown-film machine | 1 | 0 | 0 |
| Bag printing machine | 1 | 0 | 0 |
| Bag cutting and sealing machine | 1 | 0 | 0 |
| PLA-bag line (total plant & machinery) (× —) | 1 | 12,50,000 | 12,50,000 |
| Total | 45,50,000 |
Pre-filled from: PMEGP sample project report — Biodegradable Bags (prepared by Udyami/Samadhan); PMEGP sample project report — Biodegradable Plastic Bags (prepared by Udyami/Samadhan). Prices in older reports will have gone up — enter today’s quotations.
06 Raw materials
- Starch (corn starch based compound) — 105,882 kg a year at full use, ₹225/kg in the starch report
- Polylactic acid (PLA) granules and additives — main raw material in the PLA report
07 Cost of project
| ₹ in lakh | |
|---|---|
| Plant and machinery | 45.50 |
| Contingency | 2.28 |
| Total fixed capital | 47.78 |
| Working capital margin | 0.00 |
| Total project cost | 47.78 |
08 Means of finance
| ₹ in lakh | % | |
|---|---|---|
| Promoter’s contribution | 4.78 | 10.0 |
| Subsidy | 11.94 | 25.0 |
| Term loan from bank | 31.05 | 65.0 |
| Total | 47.78 | 100.0 |
| Working capital loan (outside project cost) | 0.00 |
09 Key assumptions
| Selling price | ₹0 per units |
|---|---|
| Raw material & packing cost | ₹0 per units |
| Capacity used each year | 60% · 70% · 80% · 80% · 80% · 80% · 80% |
| Term loan interest rate (% a year) | 11% · 84 months (Moratorium 6) |
| Working capital method | Turnover method (RBI) · Working capital interest (% a year) 11% |
| Income tax rate | 25% |
| Yearly price and cost rise | 0% |
10 Production and sales
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capacity used | 60% | 70% | 80% | 80% | 80% | 80% | 80% |
| Production (units) | 6,000 | 7,000 | 8,000 | 8,000 | 8,000 | 8,000 | 8,000 |
| Sales | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
11 Projected profitability
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Sales | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Raw material and packing | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Power and fuel | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Salaries and wages | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 |
| Rent | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Administration | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Selling and distribution | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Repairs and maintenance | 0.96 | 0.96 | 0.96 | 0.96 | 0.96 | 0.96 | 0.96 |
| Insurance | 0.24 | 0.24 | 0.24 | 0.24 | 0.24 | 0.24 | 0.24 |
| Total cost of operations | 4.07 | 4.07 | 4.07 | 4.07 | 4.07 | 4.07 | 4.07 |
| Operating profit (EBITDA) | -4.07 | -4.07 | -4.07 | -4.07 | -4.07 | -4.07 | -4.07 |
| Depreciation | 7.17 | 6.09 | 5.18 | 4.40 | 3.74 | 3.18 | 2.70 |
| Preliminary expenses written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest on term loan | 3.36 | 2.91 | 2.39 | 1.86 | 1.34 | 0.81 | 0.28 |
| Interest on working capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit before tax | -14.60 | -13.08 | -11.64 | -10.34 | -9.15 | -8.06 | -7.06 |
| Income tax | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit after tax | -14.60 | -13.08 | -11.64 | -10.34 | -9.15 | -8.06 | -7.06 |
12 Cash flow
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Profit after tax | -14.60 | -13.08 | -11.64 | -10.34 | -9.15 | -8.06 | -7.06 |
| Depreciation | 7.17 | 6.09 | 5.18 | 4.40 | 3.74 | 3.18 | 2.70 |
| Cash accruals (PAT + depreciation) | -7.44 | -6.99 | -6.46 | -5.94 | -5.41 | -4.88 | -4.36 |
| Term loan repaid | 2.39 | 4.78 | 4.78 | 4.78 | 4.78 | 4.78 | 4.78 |
| Owner’s drawings | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Surplus after repayment | -9.82 | -11.76 | -11.24 | -10.71 | -10.19 | -9.66 | -9.14 |
| Cash and bank | -9.82 | -21.59 | -32.83 | -43.54 | -53.73 | -63.39 | -72.53 |
13 Projected balance sheet
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capital (own + subsidy) | 16.72 | 16.72 | 16.72 | 16.72 | 16.72 | 16.72 | 16.72 |
| Reserves and surplus | -14.60 | -27.68 | -39.32 | -49.66 | -58.81 | -66.87 | -73.93 |
| Term loan outstanding | 28.67 | 23.89 | 19.11 | 14.33 | 9.56 | 4.78 | 0.00 |
| Working capital loan | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities | 30.78 | 12.93 | -3.49 | -18.60 | -32.53 | -45.37 | -57.21 |
| Net fixed assets | 40.61 | 34.52 | 29.34 | 24.94 | 21.20 | 18.02 | 15.32 |
| Preliminary expenses not written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Current assets (stock and debtors) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Cash and bank | -9.82 | -21.59 | -32.83 | -43.54 | -53.73 | -63.39 | -72.53 |
| Total assets | 30.78 | 12.93 | -3.49 | -18.60 | -32.53 | -45.37 | -57.21 |
14 Ratios and break-even
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Debt service coverage ratio (DSCR) | -0.71 | -0.53 | -0.57 | -0.61 | -0.67 | -0.73 | -0.80 |
| Break-even (% of capacity used) | — | — | — | — | — | — | — |
| Cash break-even | — | — | — | — | — | — | — |
| Average DSCR | -0.66 |
|---|---|
| Lowest DSCR | -0.80 |
| Payback period | — |
15 Depreciation
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Depreciation | 7.17 | 6.09 | 5.18 | 4.40 | 3.74 | 3.18 | 2.70 |
Written-down value method at Income-tax Rules block rates (building 10%, plant & machinery 15%, furniture 10%, computers 40%). Change them if your CA uses other rates.
16 Term loan repayment
| Year | Opening | Interest | Term loan repaid | Closing |
|---|---|---|---|---|
| 1 | 31.05 | 3.36 | 2.39 | 28.67 |
| 2 | 28.67 | 2.91 | 4.78 | 23.89 |
| 3 | 23.89 | 2.39 | 4.78 | 19.11 |
| 4 | 19.11 | 1.86 | 4.78 | 14.33 |
| 5 | 14.33 | 1.34 | 4.78 | 9.56 |
| 6 | 9.56 | 0.81 | 4.78 | 4.78 |
| 7 | 4.78 | 0.28 | 4.78 | 0.00 |
17 Licences and registrations
- Udyam
- GST
- Trade licence
- Pollution control board NOC
- Fire NOC
- CPCB certificate for compostable plastic (Plastic Waste Management Rules)
18 Government schemes that may apply
- Prime Minister's Employment Generation Programme (PMEGP)
- Pradhan Mantri MUDRA Yojana (PMMY) – Shishu, Kishor, Tarun, Tarun Plus
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
19 Sources
- PMEGP sample project report — Biodegradable Bags (prepared by Udyami/Samadhan) — https://pmegp.msme.gov.in/Home/DownloadDocument?fileName=Documents/ProjectSampleReport/Biodegradable_Bags_%28_Samadhan_Projects_%29.pdf
- PMEGP sample project report — Biodegradable Plastic Bags (prepared by Udyami/Samadhan) — https://pmegp.msme.gov.in/Home/DownloadDocument?fileName=Documents/ProjectSampleReport/Biodegradable_Plastic_Bags_%28_Samadhan_Projects_%29.pdf
This report is a projection from the figures entered by the promoter. It is not a bank appraisal or a guarantee of a loan or subsidy. Check every figure with current quotations and your chartered accountant before submitting it.