Paper bag business proposal eco friendly

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Paper bag business proposal eco friendly

  1. 1. My business plan OnPREPARED BY: GUIDED BY:Lalji V. Vastarpara Dr. Rajesh PatelRoll No.: 100 Directors of NRVIBMSMBA Sem. III Junagadh .
  2. 2. INDEXSR. PARTICULAR PAGENO . NO.1. Introduction 042. Project at a glance 053. Implementation Schedule 064. Management Setup 075. Organization Structure 086. Justification of Location 097. Product Detail 118. Market potential 129. Raw Materials 1310. Machines 1411. Manufacturing Process 1512. Production Capacity Schedule 1713. Staff & Labour 1814. Financial Details 1915. Cost of Production 2216. Total Working Capital Requirement 2317. Total Project Fund 2418. Sources of Finance 2419. Interest on Capital 2420. Depreciation 2521. Annual Cost of Production 2522. Sales Forecast (5 years) 2623. Fixed & Variable Cost Schedule 2624. Break-Even Analysis 2825. Term Loan Repayment 3026. Cost of Capital 31 2
  3. 3. 27. Return on Investment 3128. Profitability 3229. Projected Operating Statement 3330 Projected Trading A/c 3531. Projected Profit & Loss A/c 3832 Projected Balance Sheet 4433 Projected Cost Sheet 4734 Schedule of Raw Material Consumed 4935. Schedule of Finished Goods 5036. Schedule for Fixed assets 5037. Schedule for Factory Overheads 5138. Schedule for Selling & Administration 51 Overheads39. Risk Factors 5240. Name & Add. Of Machinery & 53 Equipment Supplier41. Name & Add. Of Raw Material 54 Supplier42. Disclosure of Significant Accounting 55 Policies43. Conclusion 5644. Future Plans 57 3
  4. 4. INTRODUCTION Unemployment is increasing in our country. The large-scaleindustries, which do not provide wide employment, because they arecapital intensive. So, the small-scale industries must be developing inour country because they are labour intensive. So, they can provide moreemployment. The SSI ensures more equitable distribution of the national incomeand they facilitate an effective mobilization of resources of capital &skill. Small industries are desirable because it is responsible fordispersal of production units to small towns & villages. 4
  5. 5. PROJECT AT A GLANCEName of the Unit Sav-“E” Paper BagsRegistered Office Plot No. 228, GIDC, Lodhika, Kalawad Road, Metoda, Rajkot-360 005.Location of the Unit Plot No. 228, GIDC, Lodhika, Kalawad Road, Metoda, Rajkot-360 005.Form of Organization Partner’s firmsName of Owner Lalji Vastarpara Milan Dudani Dhanraj GediyaName of Product Sav-E Paper BagsSize of the Unit Small ScaleSSI Registration Number Applied forSubsidy Registration No Applied forCost of Project Rs. 75,00,000Means of Finance HDFC Bank Shrinathji Investments Own CapitalCost of Capital 9.8%Return on Investment 16.13% IMPLEMENTATION SCHEDULE 5
  6. 6. The major activities in the implementation of the project have beenlisted and the average time for implementation is estimated at 8 months. No. Particulars Months 1. Scheme Preparation & Approval 1 2. SSI Provisional Registration 1-2 3. Sanction of loan by financial institution 2 4. Installation of Machinery 2-3 5. Procurement of Raw material 1 6. Recruitment of technical personnel 1 Provision of other facilities like water, 7. 1 electricity etc. MANAGEMENT SETUP 6
  7. 7. (Partner’s Background)Name Lalji VastarparaAge 22 YearsAddress To: Veraval Ta: jasdan Dist: Rajkot Pin No.364490Academic Qualification MBA (Finance)Role in the Unit MarketingFinancial Contribution 40% of Owned CapitalName Milan DudaniAge 22 YearsAddress To: Gondal Ta: Gondal Dist: RajkotAcademic Qualification MBA (Marketing)Role in the Unit MarketingFinancial Contribution 30% of Owned CapitalName Dhanraj GediyaAge 22 YearsAddress To: Chalala Ta: Amareli Dist: AmareliAcademic Qualification MBA (Finance)Role in the Unit MarketingFinancial Contribution 30% of Owned Capital ORGANISATION STRUCTURE 7
  8. 8. OwnerProduction Personnel Marketing Finance Manager Manager Salesman AccountantWorkers Workers Workers Workers JUSTIFICATION OF LOCATION 8
  9. 9. Location plays an important role in starting industry. Beforestarting any industry entrepreneurs have to take a decision about thelocation of industry. They have to select that location where all thefacilities must be available. They have to take right decision about theselection of location because once a location selected it cannot bechanged in the near future. The following should be taken intoconsideration.1. Availability of market: - Market plays an important role in the selection of location. Market should be near to the industry so; the immediate sale of product is possible. It also help in reduction of cost by reducing storing of finished good, avoid the cost of transportation etc.2. Availability of Labour: - Without manpower no one can start his or her industry. If you have a machine but not manpower you cannot start your industry. So, Labour should be available at cheap rate.3. Availability of transport: - It is required for assembling of raw material & distribution of finished product. So, all type of transportation facility should be available.4. Availability of power & water: - Power & water is pre-requirement of an industry. So, the facility of power & water must be sufficiently available. 9
  10. 10. Thus, all the above factors justify the selection of the location. So, the selection would definitely contribute to the profitability. Metoda METODA Highway G.I.D.C Mani Dwip Temple“SAV – EPaper bags”AtulMarblesPvt Ltd. 10
  11. 11. PRODUCT DETAILSP PRODUCT :- The people regularly use paper bag now a days. If we go to the shopping center & purchase some goods the shopkeeper gives the good in the paper bag. The option is also to use a polythine or plastic bag but they are harmful to use because we can produce the plastic bag but we can not destroyed it.p PRODUCT’S FEATURS:- There are many features of paper bag are as follows. . It is very economical. :- Paper bags are very economic in nature. It is cheaply available in the market. a It is eco-friendly in nature. : - It is very easy to produce a paper bags and we can also easily destroyed it. So, it is less harmful to nature as compare to plastic bags. PRODUCT’S USES : - Paper bags are common packing material being used by bakers and confectioners, grocers, textile and cloth merchant, dry cleaner, sweet shopkeeper etc. Due to lower price, paper bags be used even by hawkers and vendors on the footpath for packing fruits and vegetables etc.v BRAND NAME:- 11
  12. 12. Brand also plays an important role in marketing. Good brand has to face less competition in the increasing market. MARKET POTENTIAL The introduction of shopping complexes & consumer stores in thesemi-urban & rural areas are creating additional demand for paper bags,paper bags manufacturer, therefore, may be taken up as a profitablemanufacturing activity in selected areas. Before some time people are using plastic bags. But now a dayspeople are realize that plastic bags are harmful to the nature. Becausewe can produce plastic bags but we cannot destroy it. So, now a daypeople are moving toward to use a paper bags rather than plastic bags.So it is highly demanded and profitable product. 12
  13. 13. RAW MATERIALS The raw material is the base for the production. The required rawmaterial is paper in roll, gum, printing ink, string and misc. chemicals. The raw material of this unit is easily obtained from the marketand from the paper mills. The raw materials required in this unit are: a Paper in roll P Gum G Printing ink P Misc. chemical M String 13
  14. 14. MACHINESM Automatic paper bag machine - 3 Nos.A Stereo Press - 2 Nos.S Stereo Grinder - 2 Nos.S Roll Slitter motorized with 2 HP packing machine - 2 Nos.R Testing equipment - 1 No.T Punching Machine - 1 No. 14
  15. 15. MANUFACTURING PROCESS Raw Material (Paper Roll) Cutting through Automatic MachineStereo pressing with the help of gum & chemical Grinding Printing through ink Punching Packing Testing 15
  16. 16. MANUFACTURING PROCESS IN DETAIL The required raw material is in the form of roll, the cutting of rollis done through the automatic paper bag machine according to the size,and then pressing of required size is done through stereo pressingmachine with the help of gum & chemical. Then side grinding of paperbag is done. Then the process of printing is done and after thatpunching is done and after this string is tied in these holes and at lastthey are tested for bursting pressure and packing is done. 16
  17. 17. PRODUCTION CAPACITY SCHEDULE Production Capacity 1,06,20,000 UnitsNo. of Working Days in a month 25No. of Working Days in a Year 300 No. of Shifts per day 1 No. of Working hours per shift 8Production Capacity per month 8,85,000 Units 17
  18. 18. STAFF & LABOURNo. Staff & Labour No. 1. Factory Staff  Skilled 4  Unskilled 6 2. Technical Supervisor 1 3. Clerk cum typist 1 4. Accountant 1 5. Peon cum Watchman 1 6. Salesman 2 7. Manager 1 8. Peon cum watchman 1 18
  19. 19. 19
  20. 20. FIXED ASSETS LandParticulars Sq.mts. Rate(Rs.) Total CostLand 400 1100 4,40,000 BuildingParticulars Sq.mts. Rate(Rs.) Total CostBuilding 275 1800 4,95,000 Plant & MachineryName Qty. Rate Total CostAutomatic Paper bag 3 5,00,000 15,00,000machineStereo Press 2 2,50,000 5,00,000Stereo Grinder 2 3,50,000 7,00,000Roll Slitter 1 2,50,000 2,50,000Testing Equipment 1 80,000 80,000Punching Machine 1 50,000 50,000 20
  21. 21. Other Assets Particulars Qty. Rate Total CostFurniture & Fixtures - 1,50,000 1,50,000ElectrificationInstallation Charges - 75,000 75,000Computer 1 40,000 40,000Telephone 2 15,000 30,000Fax machine 2 15,000 30,000Boundary wall & Gate 1 35,000 35,000 Total Fixed AssetsNO. PARTICULAR AMOUNT 1. Land (400 Sqm @ Rs.1100) 4,40,000 2. Building (275 Sqm @ Rs.1800) 4,95,000 3. Boundary Wall & Gate 35,000 4. Plant & Machinery  Automatic Paper Bag 15,00,000  Stereo Press 5,00,000  Stereo Grinder 7,00,000  Roll Slitter 2,50,000  Testing Equipment 80,000  Punching Machine 50,000 5. Furniture & Fixtures 1,50,000 6. Electrification & Installation Charges 75,000 7. Computer, Telephones & Fax Machine 1,00,000 Total 43,65,000 21
  22. 22. COST OF PRODUCTION Raw Material Rate Req. per Req. per Particulars Req. per year Per kg. day month Paper in roll 10 2,950 73,750 8,85,000Total (Rs.) 29,500 7,37,500 88,50,000 Gum 8 35 875 10,500Total (Rs.) 280 7,000 84,000 Printing Ink 65 20 500 6,000Total (Rs.) 1,300 32,500 3,90,000 Misc. Chemical 4 40 1,000 12,000Total (Rs.) 160 4,000 48,000 String 7 50 1,250 15,000Total (Rs.) 350 8,750 1,05,000 Net Total 7,89,750 94,77,000 Staff & LabourParticulars No. Rate P.M. P.A.Factory Staff Skilled 4 2,000 8,000 96,000 Unskilled 6 1,800 10,800 1,29,600Technical Supervisor 1 5,000 5,000 60,000Salesman 2 3,000 6,000 72,000Manager 1 7,000 7,000 84,000Clerk cum typist 1 2,500 2,500 30,000Accountant 1 3,500 3,500 42,000Peon cum Watchman 1 2,000 2,000 24,000 Total 44,800 5,37,600 22
  23. 23. Other Expenses & UtilitiesSr. Particulars P.M. P.A.1. Electricity 17,000 2,04,0002. Water Charges 1,500 18,0003. Postage & Telegram 2,000 24,0004. Stationery 1,200 14,4005. Repairs 2,000 24,0006. Telephone Expense 1,800 21,6007. Transport  inward 2,000 24,000  outward 2,000 24,000 8. Packing 3,000 36,000 9. Miscellaneous Exp. 2,000 24,00010. Audit Fees 21,50011. Professional Tax 1,00012. Legal Fees 15,50013. Insurance 1,02,00014. Selling Exp. 16,750 2,01,000 Total 51,250 7,55,000 COST OF PRODUCTIONSr. Particulars P.M. P.A.1. Raw Material 7,89,750 94,77,0002. Staff & Labour 44,800 5,37,6003. Other Expenses 51,250 7,55,000 Total 8,85,800 1,07,69,600 TOTAL WORKING CAPITAL REQUIREMENTSr. Particulars P.M. P.A.1. Raw Material 7,89,750 94,77,0002. Staff & Labour 44,800 5,37,6003. Other Expenses 51,250 7,55,000 Total 8,85,800 1,07,69,600 23
  24. 24. TOTAL PROJECT FUNDSr. Particulars Amount1. Fixed Cost 43,65,0002. Working Capital (2 months) 16,75,550 Total 60,40,550 SOURCES OF FINANCESr. Particulars Rate Amount1. Own Capital (40%) 8% 30,00,0502. Borrowed Capital (60%)  HDFC  Shrinathji Investments 12% 22,50,000 10% 22,50,000 Total 75,00,000 INTEREST ON CAPITALSr. Particulars Rate Amount1. Own Capital (40%) 8% 2,40,0002. Borrowed Capital (50%)  HDFC  Shrinathji Investments 12% 2,70,000 10% 2,25,000 Total 7,35,000 DEPRECIATION 24
  25. 25. Sr. Particulars Value Amount1. Building (10%) 4,50,000 49,5002. Plant & Machinery (25%) 30,80,000 7,70,0003. Other Fixed Assets (15%) 3,10,000 46,5004. Computer (40%) 40,000 16,000 Total 8,82,000 ANNUAL COST OF PRODUCTIONSr. Particulars Amount1. Raw Material 94,77,0002. Recurring Expenses 12,92,6003. Depreciation 8,82,0004. Interest on Investment 7,35,000 Total 1,23,86,600 Sales Forecast 25
  26. 26. Year Units/annum Rate/unit Amt.(Rs.) 1 1,04,50,000 1.25 1,30,62,500 2 1,18,40,000 1.25 1,48,00,000 3 1,39,50,000 1.25 1,74,37,500 4 1,42,00,000 1.50 2,13,00,000 5 1,45,50,000 1.50 2,18,25,000 Schedule of fixed & variable cost Variable Fixed Particulars cost cost Amount AmountDepreciation - 8,82,000Int. on capital - 7,35,000Salary 3,22,560 2,15,000Other expenses 4,53,000 3,02,000Raw Materials 94,77,000 - TOTAL 1,02,52,560 21,34,000 26
  27. 27. FIXED COST Particulars Amount Depreciation 8,82,000 Interest on capital 7,35,000 Salary (40%) 2,15,040 Other Expenses (40%) 3,02,000 Total 21,34,040 Fixed cost/unit= Total Fixed Cost/Total no. of units= 21,34,040/1,06,20,000= 0.20 ps. /unit VARIABLE COST Particulars Amount Raw Materials 94,77,000 Salary (60%) 3,22,560 Other Expenses (60%) 4,53,000 Total I,02,52,560 Variable cost/unit= Total Variable Cost/ Total no. of units 27
  28. 28. = 1,02,52,560/1,06,20,000 = 0.96ps. /unit Contribution/unit = S.P./unit-V.C./unit = 1.25-0.96 = 0.29 ps. /unit BREAK EVEN ANALYSIS Break-even point is that point of achieving, where total revenueand total expenses are equal. It is the point of zero profit. If the salesexceed BEP the business will earn profit and if it decreases from BEPthe business will incur loss. Thus, BEP may take, as the minimum levelof production and sales and company must attain in order to beeconomically viable. B.E.P. (%)= {Fixed Cost / (Fixed Cost + Profit)} X 75= 21,34,040/ (21,34,040 + 12,09,900) X 75= 47.86% B.E.P. (units)= Fixed Cost/ (Contribution/unit)= 21,34,040/0.29 28
  29. 29. = 73,58,759 bags B.E.P. (Rs.)= B.E.P. x S.P./unit= 73,58,759 x 1.25= Rs.91,98,449 P. V. Ratio= Contribution per unit / Sales X 100= 0.29 / 1.25 X 100= 23.2% Gross Profit Ratio= Profit (EBIT) / Sales X 100= 31,10,100/ 1,28,61,500 X 100= 4.18% Net Profit Ratio= Profit after Tax / Sales X 100= 4,44,770 /1,28,61,500 X 100= 3.46 % Fixed Assets Ratio 29
  30. 30. = Fixed Assets/ Sales X 100= 43,65,000/1,28,61,500 X100= 33.94% LOAN REPAYMENT SCHEDULE HDFC Installmen Period Opening Balance t Closing Balance Interest 1st Year 22,50,000 2,25,000 20,25,000 2,70,0002nd Year 20,25,000 2,25,000 18,00,000 2,43,000 3rd Year 18,00,000 2,25,000 15,75,000 2,16,000 4th Year 15,75,000 2,25,000 13,50,000 1,89,000 5th Year 13,50,000 2,25,000 11,25,000 1,62,000 6th Year 11,25,000 2,25,000 9,00,000 1,35,000 7th Year 9,00,000 2,25,000 6,75,000 1,08,000 8th Year 6,75,000 2,25,000 4,50,000 81,000 9th Year 4,50,000 2,25,000 2,25,000 54,00010thYear 2,25,000 2,25,000 0 27,000 SHRINATHJI INVESTMENTS Installmen Period Opening Balance t Closing Balance Interest 1st Year 22,50,000 1,50,000 21,00,000 2,25,0002nd Year 21,00,000 1,50,000 19,50,000 2,10,000 3rd Year 19,50,000 1,50,000 18,00,000 1,95,000 4th Year 18,00,000 1,50,000 16,50,000 1,80,000 5th Year 16,50,000 1,50,000 15,00,000 1,65,000 6th Year 15,00,000 1,50,000 13,50,000 1,50,000 7th Year 13,50,000 1,50,000 12,00,000 1,35,000 8th Year 12,00,000 1,50,000 10,50,000 1,20,000 9th Year 10,50,000 1,50,000 9,00,000 1,05,00010thYear 9,00,000 1,50,000 7,50,000 90,00011thYear 7,50,000 1,50,000 6,00,000 75,000 30
  31. 31. 12thYear 6,00,000 1,50,000 4,50,000 60,00013thYear 4,50,000 1,50,000 3,00,000 45,00014thYear 3,00,000 1,50,000 1,50,000 30,00015thYear 1,50,000 1,50,000 0 15,000 Cost of CapitalCost of owner’s capital (A) = Int. rate x ownership capital/100 = 8 x 30,02,000/100 = Rs. 2,40,000Cost of borrowed capital (B) = Int. rate x borrowed capital (S.I.)/100 = 10 x 22,50,000/100 = Rs. 2,25,000Cost of borrowed capital (C) = Int. rate x borrowed capital (bank)/100 = 12 x 22, 50,000/100 = Rs. 2, 70,000Total Weighted Cost of Capital= A+B+C x 100/ Total capital=2,40,000+2,25,000+2,70,000 x100/ 75,00,000C.O.C. = 9.8% Return on Investment= Profit (EBIT)/Total Capital Investment X100= 12,09,900 / 75,00,000 X 100= 16.13% 31
  32. 32. PROFITABILITY ANALYSIS Particulars AmountSales 1,28,61,500Less: Cost of Production 1,61,51,600E.B.I.T. 12,09,900Less: Interest on Capital 7,35,000E.B.T. 4,74,900Less: Tax 88,970Net Profit after tax 3,85,930 32
  33. 33. PROJECTED OPERATING STATEMENT 1st Year 2nd Year 3rd Year Amount Particulars (Rs.) Amount (Rs.) Amount (Rs.) 1,28,61,50 SALES: [A] 0 1,45,99,000 1,72,36,500Cost Of Operation:Raw Materials 94,77,000 1,07,40,600 1,26,36,000Direct Wages to Workers: Skilled 96,000 96,000 96,000 Unskilled 1,29,600 1,29,600 1,29,600Direct expenses &utilities: Electricity 2,04,000 2,31,200 2,72,000 Freight inward 18,000 20,400 24,000 Water charges 24,000 27,200 32,000 99,48,600 1,12,45,000 1,31,89,600 Opening stock ofAdd: R/M - - - Opening stock of F/G - 1,97,200 4,24,560Less Closing stock of: R/M - - - Closing stock of F/G 1,97,200 4,24,560 6,68,1608 Total Cost Of 1,10,17,64 1,29,46,00 Operation: [B] 97,51,400 0 0GROSS PROFIT: [A - B] 31,10,100 35,81,360 42,90,500 33
  34. 34. Indirect Expenses: Total factory cost 9,03,500 9,06,700 9,11,500 Total office & admn. cost 7,06,500 7,21,200 7,15,000 Total selling & dist. cost 3,33,000 3,67,800 4,20,000 Total Indirect Expenses: 19,43,000 19,95,700 20,46,500Earning Before Interest & Tax(Gross profit - Total 11,67,100indirect expenses) 15,85,660 22,44,000Less: Interest on Borrowed Capital 4,95,000 4,53,000 4,11,000 Earning Before Tax (E.B.I.T - Interest) 6,72,100 11,32,660 18,33,000Less: Tax 1,58,930 2,86,298 4,96,400 NET PROFIT AFTER TAX: (Earning Before Tax - 5,49,170 Tax) 8,46,362 13,36,600 34
  35. 35. Projected Trading A/c (1st Year) Amount Particulars (Rs.) Particulars Amount (Rs.)To PurchaseA/c 94,77,000 By Sales A/c 1,28,61,500ToElectricity III By Closing stockPhase A/c 2,04,000 A/c 1,97,200To FreightInward A/c 24,000To Watercharges A/c 18,000To Salary A/c: Skilled 96,0 Labour 00 Unskille 1,29,6 d Labour 00 2,25,600To Gross Profit 31,10,100 1,30,58,700 1,30,58,700 35
  36. 36. Projected Trading A/c (2nd Year) Amount Particulars (Rs.) Particulars Amount (Rs.)Toopeningstock 1,97,200ToPurchaseA/c 1,07,40,600 By Sales A/c 1,45,99,000ToElectricityIII Phase By Closing stockA/c 2,31,200 A/c 4,24,560To FreightInward A/c 27,200To Watercharges A/c 20,400To SalaryA/c: Skilled 1,29,6 Labour 00 Unskilled Labour 96,000 2,25,600To Gross Profit 35,81,360 1,50,23,560 36 1,50,23,560
  37. 37. Projected Trading A/c (3rd Year) Amount Amount Particulars (Rs.) Particulars (Rs.)Toopeningstock 4,24,560ToPurchase 1,26,36,00A/c 0 By Sales A/c 1,72,36,550ToElectricityIII PhaseA/c 2,72,000 By Closing stock A/c 6,68,160To FreightInward A/c 32,000To Watercharges A/c 24,000To SalaryA/c: Skilled 1,29,60 Labour 0 Unskille d Labour 96,000 2,25,600To Gross Profit 42,90,550 1,79,04,71 1,79,04,71 0 0 37
  38. 38. Projected Profit & Loss A/c (1st Year) Amount Amount Particulars (Rs.) Particulars (Rs.) ToT grosso Salary A/c: profit 31,25,400 General Mgr 84,000 Tech. Supervisor 60,000 Accountants 42,000 Salesman 72,000 Peon 24,000 Clerk 30,000 3,12,000T Depreciationo : Building 49,500 Plant & Mach. 7,70,000 Other fixed asset 46,500 Computers 16,000 8,82,000To Indirect Exp.: Audit Fees 21,500 Selling Exp. 2,01,000 Misc. Exp. 24,000 Freight Outward 24,000 Insurance Exp. 1,02,000 Legal Fees Exp. 15,500 Packing Exp 36,000 Post & 24,000 38
  39. 39. Courier Professional Tax 1,000 Rep. & Other exp 24,000 Statio & Print. 14,400 Telephone Bill 21,600 5,09,000T Interest on borrowedo capital 4,95,000To Loan Installment A/c 3,75,000To Income Tax 1,07,630T NETO PROFIT 4,44,770 31,25,400 31,25,400 39
  40. 40. Projected Profit & Loss A/c (2nd Year) Amount Amount Particulars (Rs.) Particulars (Rs.) To Gros sTo Salary A/c: profit 35,81,360 General Mgr 84,000 Tech. Supervisor 60,000 Accountants 42,000 Salesman 72,000 Peon 24,000 Clerk 30,000 3,12,000 DepreciationTo : Building 49,500 Plant & 7,70,00 Mach. 0 Other fixed asset 46,500 Computers 16,000 8,82,000To Indirect Exp.: Audit Fees 22,500 2,27,80 Selling Exp. 0 Misc. Exp. 27,200 Freight Outward 27,200 Insurance 1,02,00 Exp. 0 40
  41. 41. Legal Fees Exp. 18,000 Packing Exp 40,800 Post & Courier 27,200 Professional Tax 1,000 Rep. & Other exp 27,200 Statio & Print. 16,320 Telephone Bill 24,480 5,61,700 Interest on borrowedTo capital 4,53,000To Loan Installment A/c 3,75,000To Income Tax 2,49,848T NETO PROFIT 7,47,812 35,81,36 0 35,81,360 41
  42. 42. Projected Profit & Loss A/c (3rd Year) Amount Amount Particulars (Rs.) Particulars (Rs.) To Gros sTo Salary A/c: profit 35,81,360 General Mgr 84,000 Tech. Supervisor 60,000 Accountants 42,000 Salesman 72,000 Peon 24,000 Clerk 30,000 3,12,000 DepreciationTo : Building 49,500 Plant & 7,70,00 Mach. 0 Other fixed asset 46,500 Computers 12,000 8,74,000To Indirect Exp.: Audit Fees 23,500 2,68,00 Selling Exp. 0 Misc. Exp. 32,000 42
  43. 43. Freight Outward 32,000 Insurance 1,02,00 Exp. 0 Legal Fees Exp. 20,000 Packing Exp 48,000 Post & Courier 32,000 Professional Tax 1,000 Rep. & Other exp 32,000 Statio & Print. 19,200 Telephone Bill 28,800 6,38,500 Interest on borrowedTo capital 4,11,000To Loan Installment A/c 3,75,000To Income Tax 4,50,515T NET 12,29,53O PROFIT 5 42,90,55 0 42,90,550 43
  44. 44. 44
  45. 45. Projected BALANCE SHEET (1st Year) Amount Amount Liabilities (Rs.) Assets (Rs.)Capital FIXEDAccounts: ASSETS: 30,00,00Ekta Ghodasara 0 Land 4,40,000 4,40,000 Building 4,95,000 4,45,500 - dep. 49,500Secured Loans: Plant & Machinery:H.D.F.C Bank 20,25,00 30,80,00Loan 0 Total 0 - dep. 7,70,000 23,10,000 Furniture & Fixture: 1,27,500UnsecuredLoans: Computers: 24,000 Shrinathji 21,00,00invest. 0 Other Fixed Assets: Total 2,10,000AccountsPayable 1,75,000 -dep. 31,500 1,78,500Net Profit 4,44,770 Accounts Receivables: 20,76,730 Bank Balance: H.D.F.C Bank A/c 13,59,450 Cash - in - hand: Cash Balance 6,09,890 Stock - in - hand: Closing Stock 1,97,200 45 77,44,77 0 77,44,770
  46. 46. Projected BALANCE SHEET (2nd Year) Liabilities Amount (Rs.) Assets Amount (Rs.)Capital Accounts: FIXED ASSETS:Ekta Ghodasara 30,00,000 Land 4,40,000 4,40,000 Building 4,45,500 3,96,000 - dep. 49,500Secured Loans: Plant & Machinery: 23,10,00H.D.F.C Bank Loan 17,75,000 Total 0 - dep. 7,70,000 15,40,000 Furniture & Fixture: 1,05,000Unsecured Loans:Shrinathji invest. 19,50,000 Other Fixed Assets: Total 1,44,500Accounts Payable 2,50,000 -dep. 31,500 1,13,000 Computer: 12,000Net Profit 7,47,812 Accounts Receivables: 20,50,000 Bank Balance: H.D.F.C Bank A/c 14,42,250 Cash - in - hand: Cash Balance 12,00,002 Stock - in - hand: Closing Stock 4,24,560 77,22,812 77,22,812 46
  47. 47. Projected BALANCE SHEET (3rd Year) Amount Amount Liabilities (Rs.) Assets (Rs.) FIXEDCapital Accounts: ASSETS:Ekta Ghodasara 30,00,000 Land 4,40,000 4,40,000 Building 3,96,000 3,46,500 - dep. 49,500Secured Loans: Plant & Machinery:H.D.F.C Bank Loan 15,50,000 Total 15,40,000 - dep. 7,70,000 7,70,000 Furniture & Fixture: 82,500Unsecured Loans: Computers: -Shrinathji invest. 18,00,000 Other Fixed Assets: Total 1,13,000Accounts Payable 3,10,000 -dep. 31,500 81,500Net Profit 12,29,535 Accounts Receivables: 21,50,250 Bank Balance: H.D.F.C Bank A/c 18,10,125 Cash - in - hand: Cash Balance 15,40,500 Stock - in - hand: Closing Stock 6,68,160 78,89,535 78,89,535 47
  48. 48. PROJECTED COST SHEET 1st Year 2nd Year 3rd Year Particulars Amount (Rs.) Amount (Rs.) Amount (Rs.)Raw Materials Consumed: Purchases 94,77,000 1,07,40,000 1,26,36,000Add: Opening Stock - Direct Wages toAdd: Workers: Skilled 1,29,600 1,29,600 1,29,600 Unskilled 96,000 96,000 96,000Add: Direct expenses: Electricity (III Phase) 2,04,000 2,31,200 2,72,000 Freight inward 24,000 27,200 32,000 Water charges 18,000 20,400 24,000 PRIME COST: [A] 99,48,600 1,12,45,000 1,31,89,600Salary to tech. supervisor 60,000 60,000 60,000Repairs 24,000 27,200 32,000Depreciation: Building 49,500 49,500 49,500 Plant & Machinery 7,70,000 7,70,000 7,70,000 FACTORY COST: [B] 9,03,500 9,06,700 9,11,500Salary to Office Staff: General Manager 84,000 84,000 84,000 Accountants 42,000 42,000 42,000 Peon 24,000 24,000 24,000 Clerk 30,000 30,000 30,000Audit fees expenses 21,500 22,500 23,500Insurance expenses 1,02,000 1,02,000 1,02,000Legal fees expenses 15,500 18,000 20,000Postage & Courier expenses 24,000 27,200 32,000Professional tax 1,000 1,000 1,000Misc. Expenses 24,000 27,200 32,000Stationary & printingexpenses 14,400 16,320 19,200Telephone bill expenses 21,600 24,480 28,800Depreciation: Computer 16,000 16,000 12,000 Other fixed assets 46,500 46,500 46,500Interest on own capital 2,40,000 2,40,000 2,40,000 48
  49. 49. OFFICE & ADMN. COST: [C] 7,06,500 7,21,200 7,33,000 COST OF PRODUCTION: [A] + [B] + [C] 1,15,58,600 1,28,72,900 1,48,34,100Add: Opening Stock of F/G - 1,97,200 4,24,560Less: Closing Stock of F/G 1,97,200 4,24,560 6,68,160 COST OF GOODS SOLD: 1,13,61,400 1,26,45,540 1,45,90,500Add:Salary to salesman 72,000 72,000 72,000Selling expenses 2,01,000 2,27,800 2,68,000Packing expenses 36,000 40,800 48,000Freight outward 24,000 27,200 32,000SELLING & DISTRIBUTUON COST: 3,33,000 3,67,800 4,20,000 COST OF SALES: (COGS + S&D COST) 1,16,94,400 1,32,40,700 1,50,10,500 SALES 1,28,61,500 1,45,99,000 1,72,36,500 PROFIT 11,67,100 13,58,300 22,26,000 Schedule of Raw material consumed 49
  50. 50. Year 1 Year 2 Particulars Quantit y Amount Quantity Amount AmountPAPER IN ROLL Opening Balance - - - - -Add: Purchase duringthe year 8,85,000 88,50,000 10,03,000 1,00,30,000 1,18,00,000Less: Closing Stock - - - - -GUM Opening Balance - - - - -Add: Purchase duringthe year 10,500 84,000 11,900 95,200 1,12,000Less: Closing Stock - - - - -PRINTING INK Opening Balance - - - - -Add: Purchase duringthe year 6,000 3,90,000 6,800 4,42,000 5,20,000Less: Closing Stock - - - - -MISC. CHEMICAL Opening Balance - - - - -Add: Purchase duringthe year 12,000 48,000 13,600 54,400 64,000Less: Closing Stock - - - - -STRING Opening Balance - - - - -Add: Purchase duringthe year 15,000 1,05,000 17,000 1,19,000 1,40,000Less: Closing Stock - - - - -TOTAL R.M.CONSUMED 94,77,000 1,07,40,600 1,26,36,000 Schedule of finished goods 50
  51. 51. Year 1 Year 2 Particulars Quantity Amount Quantity Amount OpeningBalance - - 1,70,000 1,97,200Add: Goods 1,06,20,00 1,32,75,00 1,20,36,00manufactured 0 0 0 1,50,45,000Less: Sales during 1,04,50,00 1,30,62,50 1,18,40,00the year 0 0 0 1,48,00,000 Closing Stock (Units): 1,70,000 3,66,000 Schedule of fixed assets Net Gross Block Depreciation Block Opening Particulars Total =+++++++ During Written Total Accumul +++ the Down ated Addition Year ValueBuilding 4,95,000 4,95,000 49,500 49,500 4,45,000Boundry wall & gate 35,000 35,000 5,250 5,250 29,750Plant & Machinery 30,80,000 30,80,000 7,70,000 7,70,000 23,10,000Electricity inst. &fittings 75,000 75,000 11,250 11,250 63,750Furniture 1,50,000 1,50,000 22,500 22,500 1,27,500Computers 40,000 40,000 16,000 16,000 24,000Telephone & FaxMachines 1,00,000 1,00,000 15,000 15,000 51,000 Total: 39,75,000 39,75,000 8,82,000 8,82,000 30,51,500 Schedule of factory Overheads 51
  52. 52. YEAR 1 YEAR 2 YEAR 3 Particulars Amount Amount Amount Salary to technical supervisor 60,000 60,000 60,000 Repairs 24,000 27,200 32,000 Dep: Building 49,500 49,500 49,500 7,70,00 7,70,00 Plant & Machinery 0 0 7,70,000 Total 9,03,50 9,06,70 9,11,50 0 0 0 Schedule of selling overheads YEAR 1 YEAR 2 YEAR 3 Particulars Amount Amount AmountSalary to salesman 72,000 72,000 72,000Freight outward 24,000 27,200 32,000Selling expenses 2,01,000 2,27,800 2,68,000Packing expenses 36,000 40,800 48,000 4,20,00 Total 3,33,000 3,67,800 0 52
  53. 53. RISK FACTORSR As the product is new the main risk is that whether market will readily accept the product or not. It will prove success if it properly marketed.p Another risk is that if any new material comes into market other than paper, then it will be hard to maintain the market. 53
  54. 54. NAME & ADDRESS OF MACHINERY & EQUIPMENT SUPPLIERS1. M/S Industrial paper M/C (P) Ltd. A-32, phase-1, Naraina Indl. Area, New Delhi.2. M/S Sandhu Mechanical Engg. Work, Industrial Area-A, Plot No. – 32, Ludhiana.3. M/S Indo Europe Trading Co., 1980, Chandni Chowk, Delhi-6.4. M/S Irupal Industrial (Regd.), 728, Industrial Area-B, Ludhiana.5. M/S. Kohli Industries, 29, Sona Udyog Indl. Estate, Parsi panchyat Road, Anderi(E), Mumbai-68. 54
  55. 55. NAME & ADDRESS OF RAW MATERIAL SUPPIERS1. M/S Punalur Paper Mills, Punalur, Kerala.2. M/S Star Paper Mills Ltd. Saharanpur (UP).3. M/S Rohtas Industries Ltd. Dalminagar (Bihar).4. M/S paper & pulp conversion Ltd. 376, Shukrawar peth, Bihar.5. M/S Ballarpur paper Mills Ltd., Ballupur. Dist. Chanda, Maharastra.6. M/S. Sirpur paper mills Ltd., Sirpur, Kaghaznagar (AP). 55
  56. 56. DISCLODURE OF A/cing POLICIESD Depreciation is calculated on straight line methods. Salary is given within 1 s t week of every month. Raw material is purchased once in two months. Stock is calculated at cost or market price whichever is low. Interest on ownership capital is used for costing purpose and is reinvested in business again every year. 56
  57. 57. CONCLUSION In the product project report on Sav-“E” paper bags I havediscussed all financial data and other relevant information The market of Sav-“E” paper bags is expanding; demand for theproduct is increasing day by day. The return on this business is alsosatisfactory. At last it can be said that future of this product is very bright. With the expectation of high profitability it is assumed that itwould be the perfect product to be manufactured in today’s environment.AFTER ALL IT’S AN ENVIRONMENTAL FRIENDLY PRODUCT!!!Its Sav-“E” paper bags. 57
  58. 58. Future PlansF To use totally eco-friendly papers, which are made out of baggage and not tree.n To make the product popular in every place of Gujarat and gradually cover all near by states.c To make the firm a medium scale industry and then a large scale.T If possible I would export my product, as they are highly in demand in foreign countries. Lets hope for the best and work hard to make all future plans come true!!! 58
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