PROJECT REPORT

2022

PENTAGON CYCLES PVT, LTD. pentagoncycles@info.com

 INDUSTRY OVERVIEW
India is the second-largest manufacturer of bicycles in the world. The industry is
classified into four segments: standard, premium, kids, and exports. Demand for
standard bicycles, which is the largest segment (accounting for half of all bicycles
sold in 2021) is driven by government purchases. Government departments procure
these bicycles through a tender process and distribute them under various welfare
schemes. Demand for premium and kids' bicycles (nearly 40%) is driven by fitness
and leisure needs. Exports and sales of other kinds of bicycles constitute the
remaining 10% demand. Having a CAGR of 8.2%.

PROJECT REPORT 2
EXECUTIVE SUMMARY
The company manufactures and sells bicycles. The company offers bicycles
and accessories for ladies, gents, girls, boys, and kids

Products & Services: bicycles and accessories for ladies, gents, girls, boys,
and kids, including smart cycles.
Category: Manufacturer & Distributer
The current status of Pentagon Cycles Pvt, Ltd. is active

OBJECTIVE OF THE PROJECT

Aims to draw government attention to the need for creating bicycle
friendly infrastructure on Indian roads to make cycling safe and
attractive to people. It also wants to educate people about the
environmental and health benefits of cycling.

PROMOTERS
NAME ADDRESS PHONE DESIGNATION E-MAIL
MD ABDUL HYDERABAD 9876554321 FOUNDER vifeha3284@musezoo.com
SALAM
VEDANTH HYDERABAD 5412356774 FOUNDER vifeha3284@musezoo.com
SHIVA HYDERABAD 128654323 FOUNDER vifeha3284@musezoo.com
DHANA HYDERABAD 6895324578 FOUNDER vifeha3284@musezoo.com
LAKSHMI
BADRINATH HYDERABAD 7799235321 FOUNDER vifeha3284@musezoo.com

PROJECT REPORT 3
CURRENT STATUS
MANUFACTURING:

• FRAMES
• RIMS
• FORKS
• CYCLE CHAIN
• MUDGUARD
• CRANKSET

WE ARE OPERATING ALL OVER THE INDIA AND ENGAGED IN MAKING AND
SELLING OF SPARES

Purchasing raw materials from suppliers:

• Breaks
• Tyers
• Handle bar
• Pedal
• Bearings

PROJECT REPORT 4
NATURE OF BUSINESS
We are engaged in the manufacturing and distribution of bicycles
mainly engaged in making the primary spares and buying ancillary spares from market,
and we make into finished good.

We maintain our own outlet franchise is a method of distributing products or services

involving a franchisor.

MANUFACTURING PROCESS
Manufacturing cycle time is the total time taken to convert raw materials into
finished goods. This includes loading time, machining and assembly time, inspection
time, material movement, idle waiting time, and the time taken for all other actions
during the manufacture of finished goods.

PROJECT REPORT 5
ESTIMATION OF PROJECT COST

ESTIMATIONS OF PROJECT COST

S.NO PARTICULAR AMOUNT
1 LAND AND BUILDING 50,00,000
2 MACHINERY 1,50,00,000
3 COMPUTERS 5,00,000
4 FUNITURE&FIXTURES 10,00,000
5 RACKS &STORAGE 10,00,000
6 ELECTRICFICATION&ELECTRICITY BACK UP 5,00,000
7 TRANSPORTATION-VANS 30,00,000
8 PRILIMINARY EXPENSES 2,00,000
9 PRODUCTION LICENSE FEE 2,50,000
10 POLLUTION CONTROL LICENSE FEE 2,00,000
11 SOFTWARES 10,00,000
TOTAL 2,76,50,000

Focus Preparation Growth

Creating a good ecosystem Producing productive Focusing on
With bicycles Bicycles Stable
Growth

PROJECT REPORT 6
Cost of the product

Particulars Basic Smart

Direct material 2000 5000

Direct wages 500 750

Chargeable expenses 250 500

PRIME COST 2750 6250

Overheads 2000 5400

WORK COST 4750 11650

SELLING EXPENSES 750 3350

TOTAL COST 5500 15000

PRICING STRATEGY
Price skimming is often used when a new type of product enters the market. The goal is to gather as
much revenue as possible while consumer demand is high

Particular Basic Smart

COST OF THE PRODUCT 5500 15000
Dealer’s commission
(Basic - 2.5%; Smart – 5%) 137.5 750
Add: Profit
(Basic – 20% ; Smart – 35%) 1100 5250
Add: Tax @18% 990 2700
Selling Price 7727.5 23700

PROJECT REPORT 7
Marketing Strategy:
• Sponsoring Bicycle races
• Made in India
• Social Media Promotion
• Go Green
• Trial Runs
• Conducting Health Awareness Programs

REGIONAL OPERATIONS:
We are operating all over India across 25 cities providing service centers through our authorized
service centers.

We are planning to spread our business all over the world after 10 years.

PROJECT REPORT 8
WORKING CAPITAL ESTIMATION
WORKING CAPITAL COMPUTION
PARTICLURS Column2
CLOSING STOCK OF RAW MATERIAL 30,00,000
CLOSING STOCK OF WORK IN PROGRESS 15,00,000
CLOSING STOCK OF FINISHED GOOD 20,00,000
WORKING EXPENSES 5,00,000
RECEIVABLES 32,00,000
TOTAL (A) 1,02,00,000
PAYABLES (B) (10,00,000)
WORKING CAPITAL ( A-B) 92,00,000

REPAYMENT OF TERM LOAN

Month Opening Balance Principal Interest Advance Payment closing Balance Total Payment
1 36850000 451207.8972 368500 36398792.10 819707.90
2 36398792 455719.9762 363987.92 35943072.13 819707.90
3 35943072 460277.1759 359430.72 35482794.95 819707.90
4 35482795 464879.9477 354827.95 35017915.00 819707.90
5 35017915 469528.7472 350179.15 34548386.26 819707.90
6 34548386 474224.0346 345483.86 34074162.22 819707.90
7 34074162 478966.275 340741.62 33595195.95 819707.90
8 33595196 483755.9377 335951.96 33111440.01 819707.90
9 33111440 488593.4971 331114.40 32622846.51 819707.90
10 32622847 493479.4321 326228.47 32129367.08 819707.90
11 32129367 498414.2264 321293.67 31630952.85 819707.90
12 31630953 503398.3687 316309.53 31127554.48 819707.90
13 31127554 508432.3523 311275.54 30619122.13 819707.90
14 30619122 513516.6759 306191.22 30105605.46 819707.90
15 30105605 518651.8426 301056.05 29586953.61 819707.90
16 29586954 523838.3611 295869.54 29063115.25 819707.90
17 29063115 529076.7447 290631.15 28534038.51 819707.90
18 28534039 534367.5121 285340.39 27999671.00 819707.90
19 27999671 539711.1872 279996.71 27459959.81 819707.90
20 27459960 545108.2991 274599.60 26914851.51 819707.90
21 26914852 550559.3821 269148.52 26364292.13 819707.90
22 26364292 556064.9759 263642.92 25808227.15 819707.90
23 25808227 561625.6257 258082.27 25246601.53 819707.90
24 25246602 567241.8819 252466.02 24679359.64 819707.90
25 24679360 572914.3008 246793.60 24106445.34 819707.90

PROJECT REPORT 9
 26 24106445 578643.4438 241064.45 23527801.90 819707.90
27 23527802 584429.8782 235278.02 22943372.02 819707.90
28 22943372 590274.177 229433.72 22353097.84 819707.90
29 22353098 596176.9187 223530.98 21756920.93 819707.90
30 21756921 602138.6879 217569.21 21154782.24 819707.90
31 21154782 608160.0748 211547.82 20546622.16 819707.90
32 20546622 614241.6756 205466.22 19932380.49 819707.90
33 19932380 620384.0923 199323.80 19311996.39 819707.90
34 19311996 626587.9332 193119.96 18685408.46 819707.90
35 18685408 632853.8126 186854.08 18052554.65 819707.90
36 18052555 639182.3507 180525.55 17413372.30 819707.90
37 17413372 645574.1742 174133.72 16767798.12 819707.90
38 16767798 652029.9159 167677.98 16115768.21 819707.90
39 16115768 658550.2151 161157.68 15457217.99 819707.90
40 15457218 665135.7173 154572.18 14792082.28 819707.90
41 14792082 671787.0744 147920.82 14120295.20 819707.90
42 14120295 678504.9452 141202.95 13441790.26 819707.90
43 13441790 685289.9946 134417.90 12756500.26 819707.90
44 12756500 692142.8946 127565.00 12064357.37 819707.90
45 12064357 699064.3235 120643.57 11365293.04 819707.90
46 11365293 706054.9668 113652.93 10659238.08 819707.90
47 10659238 713115.5164 106592.38 9946122.56 819707.90
48 9946123 720246.6716 99461.23 9225875.89 819707.90
49 9225876 727449.14 92258.76 8498426.75 819707.90
50 8498427 734723.63 84984.27 7763703.12 819707.90
51 7763703 742070.87 77637.03 7021632.25 819707.90
52 7021632 749491.57 70216.32 6272140.68 819707.90
53 6272141 756986.49 62721.41 5515154.19 819707.90
54 5515154 764556.36 55151.54 4750597.83 819707.90
55 4750598 772201.92 47505.98 3978395.92 819707.90
56 3978396 779923.94 39783.96 3198471.98 819707.90
57 3198472 787723.18 31984.72 2410748.80 819707.90
58 2410749 795600.41 24107.49 1615148.39 819707.90
59 1615148 803556.41 16151.48 811591.98 819707.90
60 811592 811591.98 8115.92 0.00 819707.90

PROJECT REPORT 10
 FINANCIAL STATEMENTS
PROFIT SATATEMENT (ESTIMETES FOR 5YEARS)

Particulars Mar '22 Mar '23 Mar '24 Mar '25 Mar '26
at 65% at 75% at 80% at 90% at95%
Plant utilization
Income
Sales Turnover 5,00,00,000 5,10,00,000 5,50,00,000 6,00,00,000 6,20,00,000
Net Sales 5,00,00,000 5,10,00,000 5,50,00,000 6,00,00,000 6,20,00,000
Other Income 10,00,000 20,00,000 25,00,000 30,00,000 35,00,000
Total Income 5,10,00,000 5,30,00,000 5,75,00,000 6,30,00,000 6,55,00,000
Expenditure
Raw Materials 80,00,000 88,00,000 92,40,000 97,02,000 1,01,87,100
Power & Fuel Cost 1,20,000 1,40,000 1,50,000 1,55,000 1,60,000
Employee Cost 20,00,000 22,00,000 24,20,000 26,62,000 29,28,200
Other Manufacturing
10,00,000 11,00,000 11,55,000 12,12,750 12,73,388
Expenses
Selling and Admin
5,00,000 5,50,000 6,25,000 6,80,000 7,20,000
Expenses
Miscellaneous
3,86,28,099 3,79,76,600 3,71,41,015 3,31,29,997 3,48,21,238
Expenses
Total Expenses 1,23,71,901 1,50,23,400 2,03,58,985 2,98,70,003 3,06,78,762

3,86,28,099 3,79,76,600 3,71,41,015 3,31,29,997 3,48,21,238

Operating Profit
PBDIT 1,93,14,049 1,89,88,300 1,85,70,507 1,65,64,998 1,74,10,619
Interest 41,14,049 33,88,300 25,70,507 1,64,998 6,10,619
PBDT 76,00,000 78,00,000 80,00,000 82,00,000 84,00,000
Depreciation 26,00,000 26,00,000 26,00,000 26,00,000 26,00,000
Profit Before Tax 50,00,000 52,00,000 54,00,000 56,00,000 58,00,000
Tax(30) 15,00,000 15,60,000 16,20,000 16,80,000 17,40,000
Net Profit 35,00,000 36,40,000 37,80,000 39,20,000 40,60,000

profit
4200000

4000000

3800000

3600000

3400000

3200000
2022 2023 2024 2025 2026

profit

PROJECT REPORT 11
 SALE PROFIT CHART
70000000

60000000

50000000

40000000

30000000

20000000

10000000

0
2022 2023 2024 2025 2026

sales profit

BALANCE SHEET (ESTIMATES FOR 5 YEARS)

Particulars Notes Mar-22 Mar-23 Mar-24 Mar-25 Mar-26

EQUITIES AND
LIABILITIES
SHAREHOLDER'S
FUNDS
Equity Share Capital 2,76,50,000 2,76,50,000 2,76,50,000 2,76,50,000 2,76,50,000
Preference Share Capital - - - - -
Total Share Capital 2,76,50,000 2,76,50,000 2,76,50,000 2,76,50,000 2,76,50,000
Reserves and Surplus 17,50,000 18,00,000 18,50,000 19,00,000 19,50,000
Total Reserves and
17,50,000 18,00,000 18,50,000 19,00,000 19,50,000
Surplus
Total Shareholders
2,94,00,000 2,94,50,000 2,95,00,000 2,95,50,000 2,96,00,000
Funds
Hybrid/Debt/Other
- - - - -
Securities

PROJECT REPORT 12
NON-CURRENT
LIABILITIES
Long Term Borrowings 3,11,27,554 2,46,79,359 1,74,13,372 92,25,875 -
Other Long Term
Liabilities
Long Term Provisions
Total Non-Current
3,11,27,554 2,46,79,359 1,74,13,372 92,25,875 -
Liabilities
CURRENT LIABILITIES
Short Term Borrowings - - - - -
Trade Payables 10,00,000 15,00,000 20,00,000 25,00,000 30,00,000
Other Current Liabilities - - - - -
Short Term Provisions - - - - -
Total Current Liabilities 10,00,000 15,00,000 20,00,000 25,00,000 30,00,000
Total Capital And
6,15,27,554 5,56,29,359 4,89,13,372 4,12,75,875 3,26,00,000
Liabilities
ASSETS
NON-CURRENT ASSETS
Property Plant &
Equipment
Land & Building 50,00,000 50,00,000 45,00,000 55,00,000 50,00,000
Machinery 1,50,00,000 1,35,00,000 1,21,50,000 1,30,00,000 1,15,00,000
Computers 5,00,000 4,50,000 4,00,000 3,50,000 5,00,000
Furniture & Fixtures 10,00,000 9,00,000 8,00,000 7,50,000 7,00,000
Racks & Stores 10,00,000 9,00,000 8,00,000 7,00,000 9,00,000
Electrification&Electricity
5,00,000 4,50,000 3,00,000 2,55,000 3,00,000
Backup
Transportation Vans 30,00,000 27,00,000 28,00,000 29,50,000 30,00,000
Other Non-Current Assets 57,00,000 67,70,000 75,50,000 88,15,000 1,01,05,000
Total Non-Current
5,58,27,554 4,88,59,359 4,13,63,372 3,24,60,875 2,24,95,000
Assets
CURRENT ASSETS
Inventories 20,00,000 22,50,000 25,00,000 27,50,000 30,00,000
Trade Receivables 32,00,000 40,00,000 45,00,000 55,00,000 65,00,000
Cash And Cash
5,00,000 5,20,000 5,50,000 5,65,000 6,05,000
Equivalents
Short Term Loans And
- - - - -
Advances
OtherCurrentAssets - - - - -
Total Current Assets 57,00,000 67,70,000 75,50,000 88,15,000 1,01,05,000
Total Assets 6,15,27,554 5,56,29,359 4,89,13,372 4,12,75,875 3,26,00,000

CASH FLOW (ESTIMATES FOR 5 YEARS)

Particulars Mar '22 Mar '23 Mar '24 Mar '25 Mar '26
54,00,000 56,00,000 58,00,000
Net Profit Before Tax 50,00,000 52,00,000
Net Cash From Operating
10,26,641 10,31,641 10,41,641
Activities 14,96,641 10,16,641

PROJECT REPORT 13
 Net Cash (used in)/from
- - -
Investing Activities - -
Net Cash (used in)/from - -
-9,96,641 -9,96,641 -9,96,641
Financing Activities 9,96,641 9,96,641

Net (decrease)/increase In
30,000 35,000 45,000
Cash and Cash Equivalents 5,00,000 20,000

Opening Cash & Cash

5,20,000 5,40,000 5,60,000
Equivalents - 5,00,000
Closing Cash & Cash
5,50,000 5,65,000 6,05,000
Equivalents 5,00,000 5,20,000

Key Financial Ratio (Estimates for 5 years)

Mar Mar Mar Mar Mar

Particulars '22 '23 '24 '25 '26
20 22.5 25 26 27
Gross Profit Margin(%)
6.04 7 7.5 9 12
Return On Capital Employed(%)
Liquidity And Solvency Ratios
Current Ratio 1.09 1.14 1.78 1.63 1.97
Quick Ratio 1.72 17:16 1.52 1.32 2.67
Debt Equity Ratio 2:1 2:1 2:1 1:2 1:1
Management Efficiency Ratios
Inventory Turnover Ratio 4 6 5.5 6.2 6.58
Debtors Turnover Ratio 4.21 1.72 2.08 6.79 15.2
Asset Turnover Ratio 1.2 1.2 1.4 1.6 2.1

ASSUMPTIONS
• The entire projection is based on the estimated sales for the five years.
• The variable expenses are increasing by 10% every year.
• The fixed overheads are stable over the estimated years.
• Assets are Depreciated on the basis of Straight-Line Method (SLM) at the rate of 10% per
annum.

SIGN SIGN SIGN SIGN SIGN

MD ABDUL SALAM VEDANTH SHIVA KRISHNA D.LAKSHMI BADRINATH
(FOUNDER) (FOUNDER) (FOUNDER) (FOUNDER) (FOUNDER)

PROJECT REPORT 14
 SWOT ANALYSIS

STRENGTS
FAIR PRICE WEAKNESS
ADVANCE TECHOLOGY LOW TECH PROFICIENCY
NO FUEL CONCUMPTION HIGH R&D COST
ECO FRIENDLY SAFETY ISSUE (VEHICLES & TRAFFIC)
STABLE GROWTH
MINIMAL SERVICE COST

SWOT

OPPORTUNITIES THREATS
EASY TO ADOPT
EXPENSIVE RAW MATERIAL
COMPATIBLE WITH URBAN
HIGH MARKET COMPETITION
LIFESTYLE
NO PUBLIC BICYCLE TRACKS

PROJECT REPORT 15
 CONCLUSION
The project as a whole describes the scope and viability of the manufacturing industry
and mainly of the financial, technical and its market potential. The project guarantee
sufficient fund to repay the loan and also give good return on capital investment,
analyzing the socio-economic impact. The project is also able to generate
employment.

It will create demand of the manufacturing of bicycles. So in all ways we conclude the
project is technically and socially viable and commercially sound too.

When we take the close look on Return on Capital Employed Ratio (ROCE), Gross
Profit Ratio, Debt Equity Ratio have a higher potential proposes a stable venture.

The profit and loss shows a stable growth in a profit throughout the estimated five
years and company has a higher Current Ratio which shows that the Current Assets
and Current Liabilities are managed and well balanced.

PROJECT REPORT 16
PROJECT REPORT 17