PROJECT REPORT

FOR
M/S BALAJI INDUSTRIES
OF
MR.Sanket vijay sagane
AMRAVATI
 APPLICANT PROFILE

NAME OF THE SANKET VIJAY SAGANE

APPLICANT
NATURE OF PROPOSED PLASTIC GRANULES PRODUCTION UNIT
BUSINESS
PROPOSED LOCATION OF ADDRESS : NANDGAON PETH MIDC,
BUSINESS AMRAVATI
OWNER DETAILS PROPRIETOR – SANKET VIJAY SAGANE
 ASSUMPTIONS
 Rate of Interest on term loan is 12.50 %p.a.
 Rate of Interest on Working Capital Loan is 12 %p.a.
 Term loan is to be repaid in 5 years (60 Installments)
in Equated Monthly Installments with principal being repaid
along with interest thereupon.
 Depreciation is charged on WDV basis
 Income Tax rate is assumed at 30%
 Prices are market driven
 Almost all the receipts and payments are done on cash basis
 This project report is for Plastic Granules Production Unit.
 40 % Of the Investment is Financed is in the form of Loan
 These Financial Projections are prepared based on
the estimations made on the basis of information
given & documents produced before us.
 PROJECT REPORT
M/S balaji industries
AMRAVATI

PROPRIETOR’S DETAILS: -

M/s. Balaji Industries is a Proprietory concern of Mr. Sanket Vijay

Sagane and will be engaged in the manufacturing and Trading of Plastic
Granules.

INTRODUCTION : -

The disposal of plastic waste is an environmental concern as the use of

plastic polymers in consumer goods and packaging has increased
dramatically. In addition to the creation of new biodegradable plastic
materials, the recycling of plastic waste is an alternative to reduce
waste, as well as an economically viable option in the production of new
goods. The recycling of plastics involves sorting, pretreatment,
extrusion, pelleting and manufacture processes, such as injection
molding.

SORTING : -

After collection, plastic waste is sorted according to different types,

observing the resin identification code, which ranges from number 1 to
7. Although most types of plastic can be recycled today, the most
commonly recycled is polyethylene terephthalate (PET -1),used to make
water bottles, and high density polyethylene (HDPE-2). Other types of
plastics include low density polyethylene (LDPE-4) polypropylene (PP-5),
polystyrene (PS-6) and polyvinyl chloride (PVC-3). Acrylic, fiberglass,
nylon and other plastic polymers are difficult to recycle, and are
classified under the number 7.
PRETREATMENT : -

After the sorting process, the different types of plastic are separately
shredded and washed, to remove contaminant substances such as
paper labels, glue and other residues. Alternatively, a process called
agglomeration is used during the pretreatment stage. It consists of
heating the plastic waste just below its melting point to reduce size,
before cutting it into small pieces. The product is an irregular grain,
often called crumbs or granules.

ADMINISTRATION AND MARKETING: -

The owner will contribute towards the working capital for

running the activities of the Firm. To cut down the running costs,
there will be need to outsource accounting and legal services to
independent professionals.

CASH MANAGEMENT: -

It is predicted that Firm will have a positive cash flow due to the
quick turnover of the inventory. Plastic Granules are quick
moving items that will not remain stocked for long.

Firm expect highest sales during all seasons and There will be
steady sales from our contracted outlets.

The company will incur substantial costs in procuring and

processing the waste. However, these costs will be justified by the
premium costing structure that we will adopt for the final
product to give healthy returns.
COMPETITIVE ANALYSIS : -

The Plastic Granules market in Amravati has relatively small

number of established players. This makes it easy to enter the
market with a differentiated product. Many small players can
find their niche in the local market since it is still a growing
market. Since plastic Granules are very elastic in terms of
pricing, it is easy for consumers to switch between brands when
they feel they are getting a deal from the pricing angle. This
makes it necessary to contract large buyers to ensure brand
loyalty. Firm’s approach to dominating the market is via
providing a differentiated product and targeting profitable
establishments. Most of the patrons who frequent their target
clients’ business premises have moderate to high purchasing
power.

PRICING POLICY : -

Firm uses a bulk market approach to set the price of the

product. Selling in volumes will help the company capitalize on
the economies of scale production to shave off unitary costs of
the product. Since their Plastic Granules is of premium quality,
the buyers can still make excellent profits out of the bulk
purchases.

SALES AND MARKETING POLICY : -

Firm has a very strategic approach to sales and marketing. They

are avoiding having large inventory for speculative purposes due
to the nature of the product they are dealing with. They will
heavily rely on personal sales because it gives us the advantage of
explaining all the inquiries that the customer may have. They will
also create a website for the company and optimize it for the
search engine so that we can be found.
CONCLUSION : -

Given the numbers and the projections contained in this

business plan, Production of Plastic Granules is a feasible
project. Careful management of costs will be prudential in
making a profitable venture out of this business plan. The
strategy must be adhered to and quality maintained at
exceptional levels to beat competition and claim a profitable
market share.

Customization of products is a new concept in the region and

will be the greatest strength to make the business successful
since the customers will be given an experience they cannot get
anywhere else. This is bound to create loyalty among the
customers and build a strong local brand.
 M/S BALAJI INDUSTRIES
PROJECTED BALANCE SHEET

Particulars Years
1 2 3 4 5

LIABILITIES

CAPITAL ACCOUNT

Opening Balance 35.00 41.96 49.59 57.89 66.82

0.00
Add Net Profit Dr. Year 11.96 12.63 13.30 13.94 14.55
46.96 54.59 62.89 71.82 81.37
Less Drawings 5.00 5.00 5.00 5.00 5.00

41.96 49.59 57.89 66.82 76.37

LOANS & ADVANCES

Subsidy Amount - - - - -

Term Loan From Bank 6.77 5.38 3.80 2.03 0.00

Working Capial Loan 7.00 7.00 7.00 7.00 7.00

13.76 12.37 10.79 9.02 6.99

Grand Total 55.72 61.96 68.68 75.84 83.36

ASSETS

FIXED ASSETS

Gross block 40.00 35.75 31.97 28.60 25.58

40.00 35.75 31.97 28.60 25.58

Less Depreciation 4.25 3.79 3.38 3.01 2.69

Net Block 35.75 31.97 28.60 25.58 22.90

Current Assets 15.00 20.00 25.00 30.00 35.00

Bank Fixed Deposits 2.00 4.00 6.00 8.00 10.00
Cash & Bank Balance 2.97 5.99 9.10 12.28 15.49

19.97 29.99 40.09 50.27 60.49

Grand Total 55.72 61.96 68.68 75.84 83.36

 M/S BALAJI INDUSTRIES

Funds Flow Analysis

Particulars Years
1 2 3 4 5

A. Sources of Funds

Net Profit Before Tax 11.96 12.63 13.30 13.94 14.55

Depreciation 4.25 3.79 3.38 3.01 2.69
Bank Term Loan 8.00 - - - -
Owners Capital 35.00 - - - -
Subsidy Amount - - - - -
Working Capial Loan 7.00 - - - -

Total Sources 66.20 16.42 16.68 16.95 17.24

B. Disposition of Funds

Increase in Fixed Assets 40.00 - - - -

Preliminery & Preoperative -
Decrease in Term Loan 1.23 1.39 1.58 1.78 2.03
Drawings 5.00 5.00 5.00 5.00 5.00
Investment 2.00 2.00 2.00 2.00 2.00
Increase in current assets 15.00 5.00 5.00 5.00 5.00

Total Disposition 63.23 13.39 13.58 13.78 14.03

Surplus / Deficit 2.97 3.03 3.10 3.17 3.21

Opening Balance - 2.97 5.99 9.10 12.28

Closing Balance 2.97 5.99 9.10 12.28 15.49

 M/S BALAJI INDUSTRIES
PROJECTED PROFITABILITY FOR NEXT 5 YEARS

PARTICULARS 1 2 3 4 5
Sales 110.00 115.00 120.00 125.00 130.00
Total - A 110.00 115.00 120.00 125.00 130.00
Purchase 97.00 91.00 95.00 99.00 103.00

Insurance 0.20 0.20 0.20 0.20 0.20

Labour Charges 0.60 0.70 0.80 0.90 1.00

Electricity & Water Charges 0.60 0.65 0.70 0.75 0.85

Other Direct Expences 0.50 0.50 0.50 0.50 0.50
Salaries 2.50 3.00 3.50 4.00 4.50
Telephone 0.10 0.10 0.10 0.10 0.10
Office Exps. 0.20 0.20 0.20 0.20 0.20
Travelling Expences 0.15 0.15 0.15 0.15 0.15
Printing & Stationery 0.05 0.05 0.05 0.05 0.05
Depreciation 4.25 3.79 3.38 3.01 2.69
Interest on Term Loan 0.93 0.77 0.58 0.38 0.14
Interest on CC 0.84 0.84 0.84 0.84 0.84

Total - 107.92 101.96 106.00 110.08 114.22

Add. Opening Stock - 15.00 20.00 25.00 30.00
Less : Closing Stock 15.00 20.00 25.00 30.00 35.00
Total - B 92.92 96.96 101.00 105.09 109.22
Profit Before Tax 17.08 18.04 19.00 19.91 20.78

Less : Income Tax 5.12 5.41 5.70 5.97 6.23

Net Profit Ratio 10.87 10.98 11.09 11.15 11.19

Net Profit After Tax 11.96 12.63 13.30 13.94 14.55

Calculation of D.S.C.R.
Net Profit After Tax 11.96 12.63 13.30 13.94 14.55
Add : - Interest 1.77 1.61 1.42 1.22 0.98
Add : - Depreciation 4.25 3.79 3.38 3.01 2.69
Total Funds Available for 17.98 18.03 18.10 18.17 18.22
Repayment
Repayment Obligation
Interest on Loan 1.77 1.61 1.42 1.22 0.98
Repayment of Loan 1.23 1.39 1.58 1.78 2.03
Total 3.00 3.00 3.00 3.00 3.01
D.S.C.R 5.99 6.01 6.03 6.06 6.05
Average D.S.C.R 6.03
 M/S BALAJI INDUSTRIES

Chart of Depreciation
( Rs. In Lakhs )

Year Cost Furniture & Electrify Building P&M Total

10% 10% 15%

1 Opening Cost 10.00 25.00 5.00 40.00

Add : Preliminery 0.00 0.00 0.00 0.00
10.00 25.00 5.00 40.00
Less Depreciation 1.00 2.50 0.75 4.25

2 W.D.Value 9.00 22.50 4.25 35.75

Less Depreciation 0.90 2.25 0.64 3.79

3 W.D.Value 8.10 20.25 3.61 31.95

Less Depreciation 0.81 2.03 0.54 3.38

4 W.D.Value 7.29 18.23 3.07 28.59

Less Depreciation 0.73 1.82 0.46 3.01

5 W.D.Value 6.56 16.40 2.61 25.58

Less Depreciation 0.66 1.64 0.39 2.69

W.D.Value 5.90 14.76 2.22 22.90

 M/S BALAJI INDUSTRIES

INTEREST ON TERM LOAN & REPAYMENT OF TERM LOAN

1) Term loan of Rs. 8.00 Lakhs would be paid in 5 Years in equal monthly

instalment of Rs 18000/- each for 60 Months.

2) Interest on Term Loan is assumed @ 12.50% annum.

3) Thus interest on term loan & repayment would be as below : (Rs in Lacs)

Year Opening Bal Repayment Interest Closing Bal.

1) 8.00 1.23 0.93 6.77

2) 6.77 1.39 0.77 5.38

3) 5.38 1.58 0.58 3.80

4) 3.80 1.78 0.38 2.03

5) 2.03 2.03 0.14 0.00

 M/S BALAJI INDUSTRIES

PROJECT COST AND MEANS OF FINANCE

A] Cost of Project

Particulars (Rs in lakhs)

Building and Sheds 25.00

Machinery & Equipments 5.00

Furniture and Electrification 10.00

Working Capital 10.00

TOTAL 50.00

B] Means of Finance

Particulars (Rs in lakhs)

Proprietors Capital 35.00

Term Loan from Bank 8.00

Working Capital Loan 7.00

.
Total 50.00