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Dress material ppr8.doc(bhatu mansi) Dress material ppr8.doc(bhatu mansi) Document Transcript

  • Business planning Report OnPrinted Dress Materials Prepared By Name : MANSIB.BHATU Class : MBA SEM 3rd Enroll No. : 2012 Academic Year : 2012-13 College : N. R. VEKARIA JUNAGAHD Submitted To : DR.RAJENDRA PATEL 1
  • DECLARATION I undersigned MANSI B. BHATU , a student ofMBA SEM 3rd. here by declare that the project workpresented in this report is my own work and which issubmitted to Dr Rajendra Patel from N R VEKARIA. This report has not been submitted previously toanother university for another examination.Date:Place: Junagadh------------- (Mansi b.bhatu) 2
  • P REFACE M.B.A. course is a special course, which preparesyoung entrepreneurs, & it’s very essential that theyshould have the knowledge about how the small-scalebusiness can be started or which type of project is to besubmitted to the banks and other financial institution forthe purpose of loan.One of the subject namely entrepreneurship andmanagement of small-scale business has covered thisaspect with a view to create and develop entrepreneurialskill among the students.Today in the growth rate of Indian Economy, S.S.I. playsa vital role by contribution 40%, to the total nationalincome.Hence, university has included preparation of such projectwithin the preview of its syllabus. 3
  • A CKNOWLEDGEMENT It is really a matter of great pleasure for me topresent their creative and practical work. At this stageproduct every entrepreneur prepares report of learningand it before starting of actual production. I would like to express my deep gratitude to Dr.Rajendr Patel for his co-operation and guidance. Withouthis support my report would have been very difficult tocomplete. I am also thankful to all those who consisted me inpreparation of the manuscript. I would like to thank myfriends and family member who helped me in this project.DatePlace: Junagadh ------------- (mansi b.bhatu) 4
  • I NDEXSR. PAGENO. PARTICULAR NO.1. Introduction2. Project at a glance3. Management Setup4. Organization Structure5. Justification of Location6. Product Detail7. Market potential8. Raw Materials9. Machines10. Manufacturing Process11. Production Capacity Schedule12. Staff & Labour13. Financial Details14. Cost of Production15. Total Working Capital Requirement16. Total Project Fund17. Sources of Finance18. Interest on Borrowed Capital19. Depreciation20. Annual Cost of Production21. Sales Forecast (5 years)22. Fixed & Variable Cost Schedule23. Break-Even Analysis24. Term Loan Repayment25. Cost of Capital26. Return on Investment 5
  • 27. Profitability28. Risk Factors29. Name & Address of Raw Material Supplier30. Name & Address of Machine Supplier31. Projected Operating Statement32. Projected Balance Sheet33. Projected Cost Sheet34. Particulars of Raw Material Consumed35. Particulars of Finished Goods36. Schedule for Fixed assets37. Schedule for Factory Overheads38. Schedule for Selling & Administration Overheads39. Disclosure of Significant Accounting Policies40. Conclusion 6
  • Introduction In today’s era where global competition exists, thereis a need for professional management in every sector.Hence, the economists always say that the S.S.I. is theonly base or pillar of the Indian Economy. Most of thebusinesses carried out in India are on a small scale. The S.S.I. is enjoying the success of departmenteconomy because it is the main part of the economy. Italso provides the platform and opportunity to the newentrepreneur. It provides the employment opportunities,raw material or inputs to large scale and middle scaleindustries. S.S.I. is the base for the middle and large scaleindustries. It also gives a chance to new entrepreneurs tostart an unit with a limited capital and it would ultimatelyplay a major role in sharing the development of thecompany. The S.S.I. makes the perfect entrepreneurs throughexperience and provide high quality of developmenttowards personality, skill and sense. 7
  • Definition According to the Government of India – “Theindustries whose investment in the plant and machinery isupto Rs. 1 crore is termed as Small Scale Industry.” - Budget of A.D. 2001. The definition of S.S.I. does not remain certain andconstant because with the passing of time their parameterskeep changing. In India, the literacy and education is nowincreasing at a faster rate than before and so now morepeople have now started moving towards the industryfrom agriculture. These people can get self-developmentand self-esteem with the help of S.S.I. only. In India, before 1991, great importance was given tothe large-scale industries and there was hazardousavoidance of small-scale sector, but after 1991,Government realized that only S.S.I. can lead to thedevelopment of the Indian Economy. Hence, more emphasis is laid towards the S.S.I. 8
  • P ROJECT A T G LANCEName of the Unit Sandhya PrintsRegistered Office Plot No. 205, GIDC, Lodhika, Kalawad Road, Metoda, Rajkot-360 005.Location of the Unit Plot No. 205, GIDC, Lodhika, Kalawad Road, Metoda, Rajkot-360 005.Form of Organization Ownership FirmName of Owner Mansi bhatuName of Product Sandhya SareesSize of the Unit Small ScaleSSI Registration Number Applied forSubsidy Registration No Applied forCost of Project Rs. 60,40,550Means of Finance HDFC Bank Own Capital 9
  • I MPLEMENTATION S CHEDULE The major activities in the implementation of the project have been listed and the average time for implementation is estimated at 8 monthsNo. Particulars Months1. Scheme Preparation & Approval 12. SSI Provisional Registration 1-23. Sanction of loan by financial institution 24. Installation of Machinery 2-35. Procurement of Raw material 16. Recruitment of technical personnel 1 Provision of other facilities like water,7. 1 electricity etc. Trial and Production will start from 6 t h month. 10
  • M ANAGEMENT S ET – U PName Mansi bhatuAge 21 YearsAddress 19 t h B kamnathnagar madhuram junagadh.Academic Qualification MBARole in the Unit MarketingFinancial Contribution 60 % of Owned CapitalExperience Taken Training in units like: Arvind Mills Bombay Dyeing 11
  • O RGANIZATIONAL S TRUCTURE OwnerProduction Personnel Marketing Finance Worker Manager Salesman Accountant 12
  • J USTIFICATION OF L OCATION Location plays an important role in starting industry.Before starting any industry entrepreneurs have to take adecision about the location of industry. They have toselect that location where all the facilities must beavailable. They have to take right decision about theselection of location because once a location selected itcannot be changed in the near future. The followingshould be taken into consideration . 1. Availability of Raw Materials Raw Material is the most basic and one of the key element of production. So raw material of right quality, right quantitiy, on right time and at right price and time is very important. There are more than 100 factories located in Rajkot for printing dress materials, printing sarees and ranges. Generally raw material in the form of the cloth is the most important element and that is easily available at Shapar . 13
  • 2. Availability of Transport Facility Shapar is a big Industrial area, so transport facility in the form of Road Transport and Railway Transport is easily available. So there is no question of difficulty in transportation. 3. Availability of Labour Both Skilled and unskilled labour is easily and cheaply available in the city. 4. Availability of Market Demand is ever increasing not only in the major cities like Ahmedabad, Baroda, Surat etc. but also in other states like Tamil Nadu, Bihar etc. 5. Availability of Financial Facilities There are many Nationalized and Co-operative Banks and many money – lenders who can satisfy the financial requirements. Moreover, GSFC provides loans to help the Industries. The remaining shall be met with our own contribution.Availability of Power and Water Electricity and Water are must for each and every process in any industry. Power and water are provided at concessional rates in Shapar. 14
  • P RODUCT D ETAILSIntroduction Sarees are popular attire in almost all the parts ofIndia. Infact, saree can be said to be National Dress of theladies in India. Since decades, saree has added beauty tothe ladies of India and it has perhaps, became the ofIndia. Cotton sarees are very comfortable to wear and areaffordable too. Cotton Sarees cost near about 100 to 130Rs. and so its affordable to the ordinary housewife ofIndia. Among the wide variety of cotton sarees on offer inthe market place, the printed cotton sarees are hot cakes,and so, manufacturing of printed cotton sarees is alucrative business today.Uses of the Product Cotton Sarees have always been a hot item. This isbecause they are comfortable and affordable. Besides, itskeeps one in line with the fashion trends. Cotton Sarees are a rage amongst housewives inIndia, as they are most comfortable and suits the dailyhousehold chores. Besides, the people wear Cotton Sarees outside aswell. Cotton Sarees are also favourite with collegians onparticular celebration days. They are best to wear in thescorching summers of Rajkot.B RAND N AME 15
  • Brand also plays an important role in marketing.Good brand has to face less competition in the increasingmarket. The brand name for cotton sarees is SANDHYASAREES. M ARKET P OTENTIAL Printed Sarees practically has a market in whole ofIndia. Rajkot in Gujarat is nationally renowned for thequality and variety of its Printed Cotton Sarees. So, thisfactor makes it meet with the changing trends seeping intothe market very quickly and so helps it making up to dateand in line with current trend in fashion. Due to the above mentioned reasons, the market forPrinted Cotton Sarees is an ever-expanding one. 16
  • R AW M ATERIALSFor Printing Gum Rasist Salt Soda Bicarbonate Emulsion Dyes WaxFor Screen Designs Screen Frames Terelance PVC Resin Kodak PapersFor Silicate Process & Washing Cride Oil Silicate Lisapol Liquid Softner, Starch and Tinopal 17
  • P RODUCTION P ROCESS R ECEIVING OF R AW M ATERIALS C UTTING P RINTING S ILICATE P ROCESS W ASHING D RYING F OLDING I RONING 18
  • M ANUFACTURING P ROCESS IN D ETAIL1. Receiving of Bales The first step in the process of making sarees is receiving of bales, generally of sizes 1800 meters to 2000 meters of white-grey cotton cloth.2. Cutting The next step is to cut the lump of cloth into pieces of 6.25 meters so that it can be sent to be print.3. Printing For printing sarees, the pieces so cut are placed on a wax table. Wax table is table on which wax is applied so that the cloth can stick on to the layer of wax which provides the base for printing. The printing is then started on the sarees by selecting the designs and blocks. Required color is poured on to the screen frames and the stepper is passed on from one side to another by two persons simultaneously.4. Drying Stage 19
  • After the printing process, the next step is to dry the printed sarees. They are generally dried in sunlight or under the fans.5. Silicate Washing After drying, the printed sarees are sent forsilicate washing. This is mainly done by silicateprocess to fix the color. For making the color brightand fast, silicate washing is necessary. After silicate washing, the printed sarees are washed with fresh water to make them soft. These processes are done for the purpose of improving the quality and brightness of the cloth.6. Folding & Ironing After washing the cloth and drying it,the next step is to take the printed sarees for folding and ironing. Folds are made to remove any crease and then the saree is ironed and the final product is ready. 20
  • P RODUCTION C APACITY S CHEDULE Production Capacity 115000 Units No. of Working Days in a 25 month No. of Working Days in a 300 Year No. of Shifts per day 1No. of Working hours per shift 8 Production Capacity per 7500 Units month 21
  • S TAFF & L ABOURNo. Staff & Labour No. 1. Factory Staff  Unskilled 8 2. Supervisor 1 3. Accountant 1 4. Peon cum Watchman 1 5. Manager 1 6. Dyer 1 Total 13 22
  • 23
  • Total Fixed Assets Sq. Rate Particulars Feet (Rs.) Amount TotalLand 1500 600 900000 900000Building 1000 1000 1000000 1000000Printing Tables 8 30000 240000 240000Furniture & Fixtures 1 50000 50000 50000Electrification and Installation 1 25000 25000 25000Computers & Telephones 1 50000 50000 50000Electric Motors 1 20000 20000 20000Preliminary & PreoperativeExpenses 1 50000 50000 50000 Total 2335000 24
  • Raw Materials Requirements Name Rate Reqd./ Day Reqd./ Month Reqd./ Year of perMaterial Saree Quantity Amount Quantity Amount Quantity Amount Cotton 71.5 300 21450 7500 536250 90000 6435000 Cloth Colour 6 300 1800 7500 45000 90000 540000 Gum 0.8 300 240 7500 6000 90000 72000 Wax 0.25 300 75 7500 1875 90000 22500Washing 300 300 7500 7500 90000 90000Expenses 1Silicate 1.5 300 450 7500 11250 90000 135000 Center 300 1050 7500 26250 90000 315000Finishing 3.5 Total 84.55 25365 634125 7609500 25
  • Staff & Labour Salary Amount No.of Particulars Rate per Amount Persons month Workers 8 2500 20000 240000 Dyer 1 1500 1500 18000 General Manager 1 7000 7000 84000 Supervisor 1 1500 1500 18000 Accountant 1 2500 2500 30000Peon Cum Watchman 1 2000 2000 24000 Total 13 34500 414000 26
  • Utilities & Other Expenses Amt Per Amt Per Particulars Month Annum Electricity 5000 60000 Water Expenses 400 4800Postage & Courier Expenses 500 6000 Stationery & Printing 800 9600Repairing & Other Expenses 400 4800 Telephone Bill Expenses 1200 14400 Transportation Expenses 300 3600 Packaging 22500 270000 Miscellaneous Expenses 500 6000 Total Expenses 31600 379200 27
  • Total Working Capital Requirement Particulars Monthly (Rs.) Yearly (Rs.) Raw Materials 634125 7609500 Staff & Labour Salary 34500 414000Other Expenses & Utilities 31600 379200 Total Capital Invested: 700225 8402700 Total Project Fund Particulars Amount (Rs.) Fixed Capital 2335000 Working Capital 700225 Total Capital Invested: 3035225 28
  • Sources of Finance Particulars % Of Total Capital Amount Own Capital: 50 1821135 HDFC Bank Loan 50 1214090 Total Capital: 3035225 Interest on Borrowed Capital Interest Rs. Details Amount Rate (%) (p.a)IDBI Bank 1250000 13 162500 Total Interest On Capital: 900000 Interest on Own Capital Interest Rs. Details Amount Rate (%) (p.a)Anshu Bhatia 1825000 9 164250 Total Interest On Capital: 164250 29
  • DepreciationParticulars Amount Rate (%) Depreciation Building 1000000 10 100000Printing Tables 240000 5 12000 Computers 50000 40 20000 Other Assets 70000 15 10500 Total Depreciation: 142500 Annual Cost Of Production Particulars Amount (Rs.) Raw Materials 7609500 Recurring Expenses 379200 Depreciation 142500 Interest on Capital: Own Capital 164250 Borrowed Capital 162500 Total Capital Invested: 8457950 30
  • Sales ForecastYear Units Per Annum Rate (S.P) Amount (Rs.) 1 90000 100 9000000 2 95000 100 9500000 3 100000 100 10000000.5 4 110000 103 11330000.5 5 115000 105 12075000 Fixed Cost Particulars Amount (Rs.) Depreciation 142500 Interest on Capital 326750 Salary (40%) 174000 Other expenses & Utilities (40%) 151680 Total Fixed Cost 794930 Variable Cost Particulars Amount (Rs.) Raw Materials 7609500 Salary (60%) 240000 Other expenses & Utilities (60%) 227520 Total Variable Cost: 8077020 31
  • Loan Re-Payment Schedule Opening Closing Period Balance Installment Balance Interest 1st Year 1250000 250000 1000000 162500 2nd Year 1000000 250000 750000 162500 3rd Year 750000 250000 500000 162500 4th Year 500000 250000 250000 162500 5th Year 250000 250000 0 162500 Profitability & Ratio Analysis Particulars Amount (Rs.) Sales 9000000Less: Cost Of Production 8131200 Earning Before Interest & Tax 868800Less: Interest on Capital 326750 Earning Before Tax 215300Less: Tax 18060 Net Profit After Tax 197240 32
  • Schedule of Written Down Value of Fixed Assets Net Gross Block Depreciation Block Particulars Opening During Written Total + Total the Down Accumulated Addition Year ValueLand 900000 900000 - - 900000Building 1000000 1000000 - 100000 900000Printing Tables 240000 240000 - 12000 228000Computers 50000 50000 - 20000 30000Other FixedAssets 70000 70000 - 10500 59500 Total: 2260000 2260000 - 142500 2117500 33
  • Cost Sheet for the year Amount Particulars (Rs.)Raw Materials Consumed Purchases 7609500Add: Opening Stock - Direct Wages toAdd: Workers: Unskilled 240000Add: Direct expenses: Electricit 60000 Water Expenses 4800 PRIME COST: [A] 7914300 Salary to Dyer 18000 Salary to Supervisor 18000Repairs & other expenses 4800Depreciation: Building 100000 Plant & Machinery 12000 FACTORY COST: [B] 152800Salary to Office & Admn.Staff General Manager 84000 Accountants 30000 Peon 24000Stationery Expenses 9600Telephone Expenses 14600Miscellaneous Expenses 6000Depreciation: Computer 20000 34
  • Other fixed assets 10500Interest on own capital 164250 OFFICE & ADMN. COST: [C] 362950 COST OF PRODUCTION: 8430050 [A] + [B] + [C]Add: Opening Stock of F/G -Less: Closing Stock of F/G 0 COST OF GOODS SOLD: 8430050Add:Transporatation Expenses 3600Packaging 270000 SELLING & DISTRIBUTUON COST: 273600 COST OF SALES: 8703650 (COGS + S&D COST) SALES 9000000 PROFIT 296350 35
  • Operating Statement for the year Amount Particulars (Rs.) SALES: [A] 9000000 Cost Of Operation: Raw Materials 7609500Direct Wages to Workers: Unskilled 240000Direct expenses & utilities: Electricity Expenses 60000 Water Expenses 4800 7914300 Opening stock of Add: R/M - Opening stock of F/G Closing stock of Less: R/M - Closing stock of F/G Total Cost Of Operation: [B] 7914300 GROSS PROFIT: [A - B] 1085700 Indirect Expenses: Total factory cost 152800 Total office & admn. cost 198700 Total selling & dist. cost 273600 Total Indirect Expenses: 625100 36
  • Earning Before Interest & Tax(Gross profit - Total indirect 460600 expenses) Less: Interest Borrowed Capital 162500 Earning Before Tax 298100 (E.B.I.T - Interest) Less: Tax 595768 NET PROFIT AFTER TAX: -297668 (Earning Before Tax - Tax) 37
  • Trading Account Amount Amount Particulars (Rs.) Particulars (Rs.) By SalesTo Purchase A/c 7609500 A/c 9000000To Electricity III ElectricityPhase A/c Expenses 60000To Freight Inward WaterA/c Expenses 4800To Salary A/c: Unskilled Labour 240000 240000To Gross Profit 1085700 9000000 9000000 38
  • 1st year Profit and Loss Account Amount Amount Particulars (Rs.) Particulars (Rs.)To Salary A/c: 174000 General Mgr 84000 By Gross Profit 1085700 Accountants 30000 Dyer 18000 Peon 24000 Supervisor 18000To Depreciation: 142500 Building 100000 Plant & Mach. 12000 Other fixed asset 10500 Computers 20000To Stationery Exp 9600 Telephone Exp 14600 Misc Exp 6000 Interest On Loan 162500 Trasnport Exp 3600 Packaging Exp 36000 Loan Installment 250000 NET PROFIT 286900 1085700 1085700 39
  • 1st year Balance Sheet Amount Amount Liabilities (Rs.) Assets (Rs.) Capital FIXED Accounts: ASSETS:Anshu Bhatia 1825000 Land 900000 900000Secured 100000Loans: Building 0H.D.F.C Bank Less:Loan 1250000 Depreciation 100000 900000 Printing Tables 240000 Less: Depreciation 12000 228000 Other Assets Furniture 50000 Less: Depreciation 7500 42500 Computer 50000 Less: Depreciation 20000 30000 Motors 20000 Less: Depreciation 3000 17000 Bank Balance: 40
  • IDBI Bank A/c 400000 Cash - in - hand: Cash Balance 5000041
  • 2nd year Trading Account Amount Amount Particulars (Rs.) Particulars (Rs.) By SalesTo Purchase A/c 7609500 A/c 9000000To Electricity III ElectricityPhase A/c Expenses 60000To Freight WaterInward A/c Expenses 4800To Salary A/c: Unskilled Labour 240000 240000To Gross Profit 1085700 9000000 9000000 42
  • 2ndYear Profit and Loss Account Amount Amount Particulars (Rs.) Particulars (Rs.)To Salary A/c: 174000 Gross General Mgr 84000 By Profit 1085700 Accountants 30000 Dyer 18000 Peon 24000 Supervisor 18000 DepreciationTo : 142500 10000 Building 0 Plant & Mach. 12000 Other fixed asset 10500 Computers 20000 StationeryTo Exp 9600 Telephone Exp 14600 Misc Exp 6000 Interest On 16250 Loan 0 Trasnport Exp 3600 Packaging Exp 36000 Loan 25000 Installment 0 NET PROFIT 286900 43
  • 44
  • 2nd year Balance Sheet Amount Amount Liabilities (Rs.) Assets (Rs.) Capital FIXED Accounts: ASSETS:Anshu Bhatia 1825000 Land 900000 900000Secured 100000Loans: Building 0H.D.F.C Less:Bank Loan 1250000 Depreciation 100000 900000 Printing Tables 240000 Less: Depreciation 12000 228000 Other Assets Furniture 50000 Less: Depreciation 7500 42500 Computer 50000 Less: Depreciation 20000 30000 Motors 20000 Less: Depreciation 3000 17000 Bank 45
  • Balance: IDBI Bank A/c 400000 Cash - in - hand: Cash Balance 5000046
  • 3rd Year Trading Account Amount Amount Particulars (Rs.) Particulars (Rs.) By SalesTo Purchase A/c 7609500 A/c 9000000To Electricity III ElectricityPhase A/c Expenses 60000To Freight WaterInward A/c Expenses 4800To Salary A/c: Unskilled Labour 240000 240000To Gross Profit 1085700 9000000 9000000 47
  • 3rdYear Profit and Loss Account Amount Amount Particulars (Rs.) Particulars (Rs.)To Salary A/c: 174000 Gross General Mgr 84000 By Profit 1085700 Accountants 30000 Dyer 18000 Peon 24000 Supervisor 18000 DepreciationTo : 142500 10000 Building 0 Plant & Mach. 12000 Other fixed asset 10500 Computers 20000 StationeryTo Exp 9600 Telephone Exp 14600 Misc Exp 6000 Interest On 16250 Loan 0 Trasnport Exp 3600 Packaging Exp 36000 Loan 25000 Installment 0 NET PROFIT 286900 48
  • 3rd Year Balance Sheet Amount Amount Liabilities (Rs.) Assets (Rs.) Capital FIXED Accounts: ASSETS:Anshu Bhatia 1825000 Land 900000 900000Secured 100000Loans: Building 0H.D.F.C Less:Bank Loan 1250000 Depreciation 100000 900000 Printing Tables 240000 Less: Depreciation 12000 228000 Other Assets Furniture 50000 Less: Depreciation 7500 42500 Computer 50000 Less: Depreciation 20000 30000 Motors 20000 Less: Depreciation 3000 17000 Bank 49
  • Balance: IDBI Bank A/c 400000 Cash - in - hand: Cash Balance 5000050
  • C ONCLUSION In the business planning report on Printed CottonSarees I have discussed all financial data and otherrelevant information. The market of Printed Cotton Sarees is expandingand demand for the product is increasing day by day. Thereturn in this business is also satisfactory. At last it can be said that future of this product isvery bright.With the expectation of high profitability and goodcompleting of high is assumed that it would be the perfectproduct to be manufactured in today’s environment. 51