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ARTIFICIAL
JEWELLERY

Introduction
The glorious history of India has affected every aspect of the Indian lifestyle. Jewellery
has been an integral part of Indian lifestyle. Indian Jewellery is a very special piece of
jewellery which has a special niche for itself, and is liked by all over the world for its design
and craftsmanship. In fact, jewellery is considered as prestige of women in the country.
In addition to the traditional jewellery, artificial jewellery has received incredible love and
attention of Indian women since centuries. The popularity of imitation jewellery has
increased unimaginably with the nostalgia of the upper middle class people to adorn bold,
beautiful and affordable jewellery. With the Industrial Revolution and the introduction of
modern technology, designs improved drastically and thereby demands also surged. It is
loved by everyone for its beauty and pocket-friendly prices. This unique fashion accessory
is manufactured as a look-alike to real jewellery to complement the outfits and speak a
style statement. Recently, various designers have added their charm to artificial jewellery,
giving it a designer, modern-day touch. Gold plated, German silver, beaded brass, etc.
are some of the versions of imitation jewellery.

Market Potential
The artificial jewellery market is registering high growth rates in India. The main drivers
of growth being globalization of brands, rising prices of gold and other valuable stones
and pearls, and growing demand for male costume jewellery. India is the second largest
manufacturer of fashion jewellery after China and each year, the fashion jewellery market
is constantly growing due to increased demand domestically and in the export market
.Also, fast changing fashion trends is affecting the growth of the market.
According to reports, India's artificial jewellery business contributes GDP at 5.9 per cent
in the Indian economy. It is estimated to grow by leaps and bounds in the years to come
and therefore it appears to be a profitable business. However, growing fashion
consciousness among teens and cost effective fashionable jewellery is likely to boost the
overall market in the coming years.
Artificial Jewellery is expected to grow at a CAGR of roughly over the next five years, will
reach million USD in 2023, from million USD in 2017, according to a new study.

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Product Uses

Brass is one of the most popularly used metals for jewelry, partly due to its resemblance
to gold and also due to its affordability, workability and durability. Although people in
other parts of India usually wear a thick single bangle as protection usually in wars to
minimize injuries on hand caused by swords or other sharp weapons. In some dance
forms the bangles strike the tone of the music with each other.

Manufacturing Process

The process of forming an artificial bangle is characterized by following steps:-

Design Making

Brass Melting

Moulding

Casting

Filing and
Polishing

Engraving

Finishing

Plating

Quality checking

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Cost of Project

Amt. (Rs. In
Particulars
Lakhs)
Leasehold Land 2.80
Civil works and Buildings (3000 sq. ft. @1500/-) 45.00
Plant and machinery(Annexure) 80.74
Misc. Fixed Assets 2.70
D G Set 50 KV 2.50
Escalation & Contingencies 6.55
Preliminary &Pre-Operative Expenses 5.72
Sub-total (A) 146.01
Working Capital Margin @40% of Total WC Requirement 288.00
Total Project Cost 434.01
Total Working Capital Required (B) 25% of 1st Year Proj. Turnover 720.00
MEANS OF FINANCE
Total funds required (A+B) 866.01
Loan component -
Term loan (60% of A) 87.60
Working capital (60% of B) 432.00
TOTAL 519.60
Equity 346.40
TOTAL 866.01

Detailed Cost Element

SL Particulars Qty. Amt. (Rs. in

Lakhs)
1 Brass melting furnace 2 17.00
2 Jewellery casting machine 10 13.6
3 Bangle cutting machine 5 9.5
4 Jewellery engraving machine 15 33.75
5 Tool set for craftsmen 20 0.48
6 Polishing accessories 15 0.3
7 Hand tools (Hammer set) 20 0.1
8 Magnifying glass set+ Light + Lens 20 0.23
9 Casting rubber moulds (kg) 1500 5.775
Total 80.735

Contingencies and Escalations

It has been assumed at approximately 5% at cost of project.

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Preliminary Expenses

Amt. (Rs. In
Particulars
Lakhs)
Incorporation Expenses 0.15
Project Report Preparation and Consultation 0.35
Feasibility and Engineer’s/ Architect’s Reports and Plans 1.13
Legal Charges - Drafting for agreements, contracts, stamp paper, notary
and affidavit cost 0.05
Rent payments up to the start of commercial production 0.53
Other recurring expenses up to start of commercial production 1.65
Interest Cost for period before commercial operation 1.87
Guard & Others salary Total 5.72

Salary

Designation Manpower Amt. (Rs. In Lakhs)

Skilled 20 96.00
Unskilled 1
50 105.00

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Profitability Statement

Amount (Rs. In Lakhs)

Particulars Year- 1 Year- 2 Year- 3 Year- 4 Year- 5
A.INCOME
Maximum Capacity
60,00,000 60,00,000 60,00,000 60,00,000 60,00,000
(units/ annum)
Capacity for the
40% 45% 50% 55% 60%
year
Production per
annum at capacity 24,00,000 27,00,000 30,00,000 33,00,000 36,00,000
utilization
Annual Sales 2,880.00 3,240.00 3,600.00 3,960.00 4,320.00
TOTAL INCOME 2,880.00 3,240.00 3,600.00 3,960.00 4,320.00
B.OPERATING
EXPENSES
Raw material 2,268.00 2,551.50 2,835.00 3,118.50 3,402.00
Salary-
Skilled 96.00 105.60 116.16 127.78 140.55
Unskilled 105.00 115.50 127.05 139.76 153.73
Repair and
4.04 4.44 4.88 5.37 5.91
Maintenance
Power 2.10 2.10 2.10 2.10 2.10
Lease Rent 0.09 0.09 0.09 0.09 0.09
Depreciation 19.58 19.58 19.37 19.16 19.16
Total Operating
2,494.81 2,798.81 3,104.66 3,412.76 3,723.55
Expenses
Operating Profit
385.19 441.19 495.34 547.24 596.45
(A-B)
C.FINANCIAL
EXPENSES
Interest 45.24 40.13 32.73 25.33 17.32
D. Other
Expenses
Administrative and
144.00 162.00 180.00 198.00 216.00
General Expenses
Total Expenses 189.24 202.13 212.73 223.33 233.32
Profit Before Tax 195.95 239.06 282.61 323.91 363.14
Provision for Tax 48.99 59.76 70.65 80.98 90.78
Profit after Tax 146.97 179.29 211.96 242.93 272.35
Dividend
(PAT) Declared 0.00 0.00 0.00 0.00 0.00
Retained Profit 146.97 179.29 211.96 242.93 272.35

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Breakeven Point

Break Even Point (BEP) Amount (Rs. In Lakhs)

SL Particulars Year - 1 Year - 2 Year - 3 Year - 4 Year - 5
A. Net Sales 2,880.00 3,240.00 3,600.00 3,960.00 4,320.00
B. Variable Cost
Raw Material 2,268.00 2,551.50 2,835.00 3,118.50 3,402.00
Power and utility 0.09 0.09 0.09 0.09 0.09
Other Misc. Expense 144.00 162.00 180.00 198.00 216.00
Total Variable Cost 2,412.09 2,713.59 3,015.09 3,316.59 3,618.09
C. Contribution (A-B) 467.91 526.41 584.91 643.41 701.91
D. Fixed and Semi-Fixed
Salary
Cost 201.00 221.10 243.21 267.53 294.28
Lease Rent 45.24 40.13 32.73 25.33 17.32
Repair & Maintenance 4.04 4.44 4.88 5.37 5.91
Interest on term Loan 2.10 2.10 2.10 2.10 2.10
Depreciation 19.58 19.58 19.37 19.16 19.16
Total Fixed Cost 271.96 287.35 302.30 319.50 338.77
E. Breakeven Point 58% 55% 52% 50% 48%
F. Cash BEP 54% 51% 48% 47% 46%
712.80 831.60 950.40 1,069.20 1,188.00

Debt-Service Coverage Ratio

Amount (Rs. in lakhs)

SL Particulars Year - 1 Year - 2 Year - 3 Year - 4 Year – 5
i PAT 146.97 179.29 211.96 242.93 272.35
ii Depreciation 19.58 19.58 19.37 19.16 19.16
iii Interest 45.24 40.13 32.73 25.33 17.32
A Total (i + ii + iii) 211.78 239.01 264.06 287.43 308.83
I Interest 45.24 40.13 32.73 25.33 17.32
Ii Principal repayment 43.52 87.05 87.05 87.05 87.05
B Total (i + ii) 88.76 127.17 119.78 112.38 104.36
DSCR (A /B) 2.39 1.88 2.20 2.56 2.96

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Interest on Term Loan and Principal Repayment

Refer Annexure I.
We have assumed the repayment tenure of term loan for a period of 7 years, rate of
interest being @8.5% with the moratorium period being 9 months.

Address of Vendors

Name of the vendor Address and Contact Number

Name
Tecnovia Engineering
Dolphin Laser Technology
B/7, Kalpataru Industrial Estate, Beside Sarvoday
Hotel, Moraiya, Changodar Changodar Ahmedabad -
382213, Gujarat, India
Phone No.- 9843666660
Plot No. 75, Tribhuvan Industrial Estate Kathwada
GIDC, Road No.11, Opp Water Tank,
Ahmedabad-382415, Gujarat, India
Phone no.- 08048425888

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 ANNEXURE- I

ANNEXURE - I

Year Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Annually
O
Principal
Opening 78.37 78.93 79.49 - - - - - - - - - -
Repaid - - - - - - - - - - - - -
Closing 78.93 79.49 80.05 - - - - - - - - - -
Interest 0.56 0.56 0.56 - - - - - - - - - 1.68
- - - - - - - - - - - - -
I - - - - - - - - - - - - -
Principal - - - - - - - - - - - - -
Opening 186.97 188.30 189.63 190.97 192.33 193.69 195.06 193.84 192.61 191.38 188.78 186.17 -
Repaid - - - - - - 2.60 2.60 2.60 2.60 2.60 2.60 15.60
Closing 188.30 189.63 190.97 192.33 193.69 195.06 193.84 192.61 191.38 188.78 186.17 183.57 -
Interest 1.32 1.33 1.34 1.35 1.36 1.37 1.38 1.37 1.36 1.36 1.34 1.32 16.22
- - - - - - - - - - - - -
II - - - - - - - - - - - - -
Principal - - - - - - - - - - - - -
Opening 183.57 180.97 178.37 175.77 173.17 170.57 167.97 165.37 162.77 160.17 157.57 154.96 -
Repaid 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 31.21
Closing 180.97 178.37 175.77 173.17 170.57 167.97 165.37 162.77 160.17 157.57 154.96 152.36 -
Interest 1.30 1.28 1.26 1.25 1.23 1.21 1.19 1.17 1.15 1.13 1.12 1.10 14.39
- - - - - - - - - - - - -
III - - - - - - - - - - - - -
Principal - - - - - - - - - - - - -
Opening 152.36 149.76 147.16 144.56 141.96 139.36 136.76 134.16 131.56 128.96 126.36 123.76 -
Repaid 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 31.21
Closing 149.76 147.16 144.56 141.96 139.36 136.76 134.16 131.56 128.96 126.36 123.76 121.15 -
Interest 1.08 1.06 1.04 1.02 1.01 0.99 0.97 0.95 0.93 0.91 0.90 0.88 11.74
- - - - - - - - - - - - -
IV - - - - - - - - - - - - -
Principal - - - - - - - - - - - - -
Opening 121.15 118.55 115.95 113.35 110.75 108.15 105.55 102.95 100.35 97.75 95.15 92.55 -
Repaid 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 31.21
Closing 118.55 115.95 113.35 110.75 108.15 105.55 102.95 100.35 97.75 95.15 92.55 89.95 -
Interest 0.86 0.84 0.82 0.80 0.78 0.77 0.75 0.73 0.71 0.69 0.67 0.66 9.08
- - - - - - - - - - - - -
V - - - - - - - - - - - - -
Principal - - - - - - - - - - - - -
Opening 89.95 87.34 84.74 82.14 79.54 76.94 74.34 71.74 69.14 66.54 63.94 61.34 -
Repaid 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 31.21
Closing 87.34 84.74 82.14 79.54 76.94 74.34 71.74 69.14 66.54 63.94 61.34 58.74 -
Interest 0.62 0.60 0.58 0.56 0.55 0.53 0.51 0.49 0.47 0.45 0.43 0.42 6.21
- - - - - - - - - - - - -
VI - - - - - - - - - - - - -
Principal - - - - - - - - - - - - -
Opening 58.74 56.13 53.53 50.93 48.33 45.73 43.13 40.53 37.93 35.33 32.73 30.13 -
Repaid 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 31.21
Closing 56.13 53.53 50.93 48.33 45.73 43.13 40.53 37.93 35.33 32.73 30.13 27.53 -
Interest 0.42 0.40 0.38 0.36 0.34 0.32 0.31 0.29 0.27 0.25 0.23 0.21 3.78
- - - - - - - - - - - - -
VII - - - - - - - - - - - - -
Principal - - - - - - - - - - - - -
Opening 27.53 24.93 22.32 19.72 17.12 14.52 11.92 9.32 6.72 4.12 1.52 - -
Repaid 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 1.52 - -
Closing 24.93 22.32 19.72 17.12 14.52 11.92 9.32 6.72 4.12 1.52 - - -
Interest 0.19 0.18 0.16 0.14 0.12 0.10 0.08 0.07 0.05 0.03 0.01 - 1.13

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