PREPARED BY

Name: - Ravi Pokar Class: - T.Y.B.B.A. Seat No.: Roll No.: - 32 Academic year: - 2007-2008

COLLEGE
R.P.Bhalodia College

SUBMITTED TO
Saurashtra University

GUIDED BY

Pro.Jay Patel

DECLARATION
I undersigned Mr.Ravi Pokar a student of T.Y.B.B.A. here by declare that the project work presented in this report is my own work and has been carried out under the supervision of Prof.Jay Patel of R.P.Bhalodia college,Rajkot. This report has not been submitted previously to another university for another examination. Date: Place: Rajkot. ------------(Ravi Pokar)

PREFACE
B.B.A. course is a special course, which prepares young entrepreneurs, & its very essential that they should have the basic knowledge about how the smallscale business can be started or which type of project is to be submitted to the banks and other financial institution for the purpose of loan. One of the subjects namely Entrepreneurship and Management of Small Scale Business has covered this aspect with a view to create and develop entrepreneurial skill among the students. Today in the growth rate of Indian Economy, S.S.I. plays a vital role by contribution of 40%, to the total national income. Hence, university has included preparation of such project within the preview of its syllabus.

ACKNOWLEDGEMENT
It is really a matter of great pleasure for me to present their creative and practical work. At this stage product every entrepreneur prepares report of learning and it before starting of actual production. I would like to express my deep gratitude to Prof. Jay Patel for his cooperation and guidance. Without his support my report would have been very difficult to complete. I am also thankful to all those who consisted me in preparation of the manuscript. I would like to thank my friends who helped me in this project. Date: Place: Rajkot. ------------(Ravi Pokar)

INDEX

SR. NO .
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31 32. 33. 34. 35. 36. 37. 38. 39.

PARTICULAR
Introduction Project at a glance Implementation Schedule Management Setup Organisation Structure Justification of Location Product Detail Market potential Raw Materials Machines Manufacturing Process Production Capacity Schedule Staff & Labour Financial Details Cost of Production Total Working Capital Requirement Total Project Fund Sources of Finance Interest on Capital Depreciation Annual Cost of Production Sales Forecast (5 years) Fixed & Variable Cost Schedule Break-Even Analysis Term Loan Repayment Cost of Capital Return on Investment Profitability Tax Schedule Projected Operating Statement Projected Trading A/c Projected Profit & Loss A/c Projected Balance Sheet Projected Cost Sheet Schedule of Raw Material Consumed Schedule of Finished Goods Schedule for Fixed assets Schedule for Factory Overheads Schedule for Selling & Administration Overheads 5

PAGE NO.
07 08 09 10 11 12-13 14 15 16 17 18 20 21 22-24 25 26 27 27 27 28 28 29 31 32 34 35 35 36 36 37 38 41 44 47 49 50 50 51 51

40. 41. 42. 43. 44. 45.

Risk Factors Name & Add. Of Machinery & Equipment Supplier Name & Add. Of Raw Material Supplier Disclosure of Significant Accounting Policies Conclusion Future Plans

52 53 54 55 56 57

INTRODUCTION
Unemployment is increasing in our country. The large-scale industries, which do not provide wide employment, because they are capital intensive. So, the small-scale industries must be developing in our country because they are labour intensive. So, they can provide more employment. The SSI ensures more equitable distribution of the national income and they facilitate an effective mobilization of resources of capital & skill. Small industries are desirable because it is responsible for dispersal of production units to small towns & villages.

PROJECT AT A GLANCE
7

Name of the Unit Registered Office

Location of the Unit

Form of Organisation Name of Owner Name of Product Size of the Unit SSI Registration Number Subsidy Registration No Cost of Project Means of Finance

Cost of Capital Return on Investment

Sav-E Paper Bags Plot No. 228, GIDC, Lodhika, Kalawad Road, Metoda, Rajkot-360 005. Plot No. 228, GIDC, Lodhika, Kalawad Road, Metoda, Rajkot-360 005. Sole proprietor Firm Ravi Pokar Sav-E Paper Bags Small Scale Applied for Applied for Rs. 75,00,000 HDFC Bank Shrinathji Investments Own Capital 9.8% 16.13%

Since R.O.I > C.O.C, so this project is viable.

IMPLEMENTATION SCHEDULE
8

The major activities in the implementation of the project have been listed and the average time for implementation is estimated at 8 months.

No.
1. 2. 3. 4. 5. 6. 7.

Particulars
Scheme Preparation & Approval SSI Provisional Registration Sanction of loan by financial institution Installation of Machinery Procurement of Raw material Recruitment of technical personnel Provision of other facilities like water, electricity etc. Trial & production will start from 8 t h month onwards

Months
1 1-2 2 2-3 1 1 1

MANAGEMENT SETUP
(Owners Background)

Name Age Address Academic Qualification Role in the Unit Financial Contribution Experience

Ravi Pokar 21 Years Gopal Krupa,Raghuvir Society, Rajkot. BBA (Marketing) Marketing 40% of Owned Capital Taken Training in units like: Gandhi Spices Pvt. Ltd

ORGANISATION STRUCTURE

10

Owner

Production Manager
Workers

Personnel Manager

Marketing Salesman

Finance Accountant

JUSTIFICATION OF LOCATION

11

Location plays an important role in starting industry. Before starting any industry entrepreneurs have to take a decision about the location of industry. They have to select that location where all the facilities must be available. They have to take right decision about the selection of location because once a location selected it cannot be changed in the near future. The following should be taken into consideration.

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.

Thus, all the above factors justify the selection of the location. So, the selection would definitely contribute to the profitability.

Metoda 12Highway

METODA G.I.D.C SAV E Paper bags

Atul Marbles Pvt Ltd.

Mani Dwip
Temple

PRODUCT DETAILS
13

 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.

PRODUCTS 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.

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.

This two are the main feature of paper bag.

Paper

PRODUCTS USES : bags are common packing material being used grocers, textile and cloth by bakers and sweet

confectioners,

merchant, dry cleaner,

shopkeeper etc. Due to lower price, paper bags be used even by hawkers and vendors on the footpath for packing fruits and vegetables etc.

BRAND NAME:Brand also plays an important role in marketing. Good brand has to face less competition in the increasing market. 14

MARKET POTENTIAL
The introduction of shopping complexes & consumer stores in the semi-urban & rural areas are creating additional demand for paper bags, paper bags manufacturer, therefore, may be taken up as a profitable manufacturing activity in selected areas. Before some time people are using plastic bags. But now a days people are realize that plastic bags are harmful to the nature. Because we can produce plastic bags but we cannot destroy it. So, now a day people are moving toward to use a paper bags rather than plastic bags. So it is highly demanded and profitable product.

RAW MATERIALS
15

The raw material is the base for the production. The required raw material is paper in roll, gum, printing ink, string and misc. chemicals. The raw material of this unit is easily obtained from the market and from the paper mills. The raw materials required in this unit are: Paper in roll Gum Printing ink Misc. chemical String

MACHINES
16

Automatic paper bag machine - 3 Nos. Stereo Press - 2 Nos. Stereo Grinder - 2 Nos. Roll Slitter motorized with 2 HP packing machine - 2 Nos. Testing equipment - 1 No. Punching Machine - 1 No.

MANUFACTURING PROCESS
17

Raw Material (Paper Roll) Cutting through Automatic Machine Stereo pressing with the help of gum & chemical Grinding Printing through ink Punching Packing Testing

MANUFACTURING PROCESS IN DETAIL

18

The required raw material is in the form of roll, the cutting of roll is done through the automatic paper bag machine according to the size, and then pressing of required size is done through stereo pressing machine with the help of gum & chemical. Then side grinding of paper bag is done. Then the process of printing is done and after that punching is done and after this string is tied in these holes and at last they are tested for bursting pressure and packing is done.

PRODUCTION CAPACITY SCHEDULE

19

Production Capacity
No. of Working Days in a month No. of Working Days in a Year No. of Shifts per day No. of Working hours per shift Production Capacity per month

1,06,20,000 Units
25 300 1 8 8,85,000 Units

STAFF & LABOUR

No. Staff & Labour
20

No.

1.

2. 3. 4. 5. 6. 7. 8.

Factory Staff Skilled Unskilled Technical Supervisor Clerk cum typist Accountant Peon cum Watchman Salesman Manager Peon cum watchman

4 6 1 1 1 1 2 1 1

21

FIXED ASSETS
Land
Particulars Land Sq.mts. 400 Rate(Rs.) 1100 22 Total Cost 4,40,000

Building
Particulars Building Sq.mts. 275 Rate(Rs.) 1800 Total Cost 4,95,000

Plant & Machinery

Name Automatic machine Stereo Press Stereo Grinder Roll Slitter Testing Equipment Punching Machine 2 2 1 1 1 2,50,000 3,50,000 2,50,000 80,000 50,000 5,00,000 7,00,000 2,50,000 80,000 50,000 Qty. 3 Rate 5,00,000 Total Cost 15,00,000

Paper

bag

Other Assets
Particulars Qty. Rate Total Cost

23

Furniture & Fixtures Electrification Charges Computer Telephone Fax machine Boundary wall & Gate Installation

1 2 2 1

1,50,000 75,000 40,000 15,000 15,000 35,000

1,50,000 75,000 40,000 30,000 30,000 35,000

Total Fixed Assets

NO.
1. 2. 3. 4.

PARTICULAR
Land (400 Sqm @ Rs.1100) Building (275 Sqm @ Rs.1800) Boundary Wall & Gate Plant & Machinery Automatic Paper Bag Stereo Press Stereo Grinder Roll Slitter Testing Equipment Punching Machine Furniture & Fixtures Electrification & Installation Charges Computer, Telephones & Fax Machine Total

AMOUNT
4,40,000 4,95,000 35,000 15,00,000 5,00,000 7,00,000 2,50,000 80,000 50,000 1,50,000 75,000 1,00,000 43,65,000

5. 6. 7.

COST OF PRODUCTION
24

Raw Material Rate Per kg.

10 8 65 4 7 Net Total

Particulars
Paper in roll Total (Rs.) Gum Total (Rs.) Printing Ink Total (Rs.) Misc. Chemical Total (Rs.) String Total (Rs.)

Req. per day

2,950 29,500 35 280 20 1,300 40 160 50 350

Req. per month

73,750 7,37,500 875 7,000 500 32,500 1,000 4,000 1,250 8,750 7,89,750

Req. per year

8,85,000 88,50,000 10,500 84,000 6,000 3,90,000 12,000 48,000 15,000 1,05,000 94,77,000

Staff & Labour Particulars

Factory Staff Skilled Unskilled Technical Supervisor Salesman Manager Clerk cum typist Accountant Peon cum Watchman Total

No.
4 6 1 2 1 1 1 1

Rate
2,000 1,800 5,000 3,000 7,000 2,500 3,500 2,000

P.M.
8,000 10,800 5,000 6,000 7,000 2,500 3,500 2,000 44,800

P.A.
96,000 1,29,600 60,000 72,000 84,000 30,000 42,000 24,000 5,37,600

Other Expenses & Utilities

25

Sr.
1. 2. 3. 4. 5. 6. 7.

Particulars
Electricity Water Charges Postage & Telegram Stationery Repairs Telephone Expense Transport inward outward Packing Miscellaneous Exp. Audit Fees Professional Tax Legal Fees Insurance Selling Exp. Total

P.M.
17,000 1,500 2,000 1,200 2,000 1,800 2,000 2,000 3,000 2,000

P.A.
2,04,000 18,000 24,000 14,400 24,000 21,600 24,000 24,000 36,000 24,000 21,500 1,000 15,500 1,02,000 2,01,000 7,55,000

8. 9. 10. 11. 12. 13. 14.

16,750 51,250

COST OF PRODUCTION
Sr.
1. 2. 3.

Particulars
Raw Material Staff & Labour Other Expenses Total

P.M.
7,89,750 44,800 51,250 8,85,800

P.A.
94,77,000 5,37,600 7,55,000 1,07,69,600

TOTAL WORKING CAPITAL REQUIREMENT

Sr.
1. 2. 3.

Particulars
Raw Material Staff & Labour Other Expenses Total

P.M.
7,89,750 44,800 51,250 8,85,800

P.A.
94,77,000 5,37,600 7,55,000 1,07,69,600

TOTAL PROJECT FUND

26

Sr.
1. 2.

Particulars
Fixed Cost Working Capital (2 months) Total

Amount
43,65,000 16,75,550 60,40,550

SOURCES OF FINANCE
Sr.
1. 2.

Particulars
Own Capital (40%) Borrowed Capital (60%) HDFC Shrinathji Investments Total

Rate
8% 12% 10%

Amount
30,00,050 22,50,000 22,50,000 75,00,000

INTEREST ON CAPITAL
Sr.
1. 2.

Particulars
Own Capital (40%) Borrowed Capital (50%) HDFC Shrinathji Investments Total

Rate
8% 12% 10%

Amount
2,40,000 2,70,000 2,25,000 7,35,000

DEPRECIATION
Sr. Particulars
27

Value

Amount

1. 2. 3. 4.

Building (10%) Plant & Machinery (25%) Other Fixed Assets (15%) Computer (40%) Total

4,50,000 30,80,000 3,10,000 40,000

49,500 7,70,000 46,500 16,000 8,82,000

ANNUAL COST OF PRODUCTION

Sr. 1. 2. 3. 4. Particulars Raw Material Recurring Expenses Depreciation Interest on Investment Total Amount 94,77,000 12,92,600 8,82,000 7,35,000 1,23,86,600

Sales Forecast
28

Year
1 2 3 4 5

Units/annum
1,04,50,000 1,18,40,000 1,39,50,000 1,42,00,000 1,45,50,000

Rate/unit
1.25 1.25 1.25 1.50 1.50

Amt.(Rs.)
1,30,62,500 1,48,00,000 1,74,37,500 2,13,00,000 2,18,25,000

Schedule of fixed & variable cost

Variable cost Amount
3,22,560 4,53,000 94,77,000 1,02,52,560

Particulars
Depreciation Int. on capital Salary Other expenses Raw Materials TOTAL

Fixed cost Amount

8,82,000 7,35,000 2,15,000 3,02,000 21,34,000

29

FIXED COST
Particulars
Depreciation Interest on capital Salary (40%) Other Expenses (40%) Total

Amount
8,82,000 7,35,000 2,15,040 3,02,000 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
Raw Materials Salary (60%) Other Expenses (60%) Total

Amount
94,77,000 3,22,560 4,53,000 I,02,52,560

Variable cost/unit
= Total Variable Cost/ Total no. of units = 1,02,52,560/1,06,20,000 = 0.96ps. /unit

30

Contribution/unit
= S.P./unit-V.C./unit = 1.25-0.96 = 0.29 ps. /unit

BREAK EVEN ANALYSIS

31

Break-even point is that point of achieving, where total revenue and total expenses are equal. It is the point of zero profit. If the sales exceed BEP the business will earn profit and if it decreases from BEP the business will incur loss. Thus, BEP may take, as the minimum level of production and sales and company must attain in order to be economically 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 = 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

32

= 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

= Fixed Assets/ Sales X 100 = 43,65,000/1,28,61,500 X100 = 33.94%

LOAN REPAYMENT SCHEDULE

HDFC
33

Period
1st Year 2nd Year 3rd Year 4th Year 5th Year 6th Year 7th Year 8th Year 9th Year 10thYear

Opening Balance
22,50,000 20,25,000 18,00,000 15,75,000 13,50,000 11,25,000 9,00,000 6,75,000 4,50,000 2,25,000

Installment
2,25,000 2,25,000 2,25,000 2,25,000 2,25,000 2,25,000 2,25,000 2,25,000 2,25,000 2,25,000

Closing Balance
20,25,000 18,00,000 15,75,000 13,50,000 11,25,000 9,00,000 6,75,000 4,50,000 2,25,000 0

Interest
2,70,000 2,43,000 2,16,000 1,89,000 1,62,000 1,35,000 1,08,000 81,000 54,000 27,000

SHRINATHJI INVESTMENTS Period

1st Year 2nd Year 3rd Year 4th Year 5th Year 6th Year 7th Year 8th Year 9th Year 10thYear 11thYear 12thYear 13thYear 14thYear 15thYear

Opening Balance
22,50,000 21,00,000 19,50,000 18,00,000 16,50,000 15,00,000 13,50,000 12,00,000 10,50,000 9,00,000 7,50,000 6,00,000 4,50,000 3,00,000 1,50,000

Installment
1,50,000 1,50,000 1,50,000 1,50,000 1,50,000 1,50,000 1,50,000 1,50,000 1,50,000 1,50,000 1,50,000 1,50,000 1,50,000 1,50,000 1,50,000

Closing Balance
21,00,000 19,50,000 18,00,000 16,50,000 15,00,000 13,50,000 12,00,000 10,50,000 9,00,000 7,50,000 6,00,000 4,50,000 3,00,000 1,50,000 0

Interest
2,25,000 2,10,000 1,95,000 1,80,000 1,65,000 1,50,000 1,35,000 1,20,000 1,05,000 90,000 75,000 60,000 45,000 30,000 15,000

Cost of Capital
Cost of owners capital (A) = Int. rate x ownership capital/100 34

= 8 x 30,02,000/100 = Rs. 2,40,000 Cost of borrowed capital (B) = Int. rate x borrowed capital (S.I.)/100 = 10 x 22,50,000/100 = Rs. 2,25,000 Cost of borrowed capital (C) = Int. rate x borrowed capital (bank)/100 = 12 x 22,50,000/100 = Rs. 2,70,000

Total Weighted Cost of Capital

= A+B+C x 100/ Total capital =2,40,000+2,25,000+2,70,000 x100/ 75,00,000 C.O.C. = 9.8%

Return on Investment
= Profit (EBIT)/Total Capital Investment X100 = 12,09,900 / 75,00,000 X 100 = 16.13%

PROFITABILITY ANALYSIS
Particulars
Sales 35

Amount
1,28,61,500

Less: Cost of Production E.B.I.T. Less: Interest on Capital E.B.T. Less: Tax Net Profit after tax

1,61,51,600 12,09,900 7,35,000 4,74,900 88,970 3,85,930

Tax Slab (Used for Calculating Tax) Actual Tax 1,500 20,00 0 67,47 0 88,97 0

Income Up to Rs. 1,35,000 From 1,35,001 to 150000 From 150001 to 250000 Above 250001

Applicable Tax Rate (%) Nil 10 20 30 Total Actual Tax:

PROJECTED OPERATING STATEMENT

Particulars SALES: [A] 1st Year Amount (Rs.) 1,28,61,500 2nd Year Amount (Rs.) 1,45,99,000 3rd Year Amount (Rs.) 1,72,36,500

36

Cost Of Operation: Raw Materials Direct Wages to Workers: Skilled Unskilled Direct expenses & utilities: Electricity Freight inward Water charges Add: Less: Opening stock of R/M Opening stock of F/G Closing stock of R/M Closing stock of F/G [B]

94,77,000 96,000 1,29,600 2,04,000 18,000 24,000 99,48,600 1,97,200 97,51,400 31,10,100

1,07,40,600 96,000 1,29,600 2,31,200 20,400 27,200 1,12,45,000 1,97,200 4,24,560 1,10,17,640 35,81,360

1,26,36,000 96,000 1,29,600 2,72,000 24,000 32,000 1,31,89,600 4,24,560 6,68,1608 1,29,46,000 42,90,500

Total Cost Of Operation: GROSS PROFIT:

[A - B]

Indirect Expenses: Total factory cost Total office & admn. cost Total selling & dist. cost Total Indirect Expenses: Earning Before Interest & Tax (Gross profit - Total indirect expenses) Less: Interest on Borrowed Capital Earning Before Tax (E.B.I.T - Interest) Less: Tax

9,03,500 7,06,500 3,33,000 19,43,000

9,06,700 7,21,200 3,67,800 19,95,700

9,11,500 7,15,000 4,20,000 20,46,500

11,67,100

15,85,660

22,44,000

4,95,000

4,53,000

4,11,000

6,72,100 1,58,930

11,32,660 2,86,298

18,33,000 4,96,400

NET PROFIT AFTER TAX: (Earning Before Tax - Tax)

5,49,170

8,46,362

13,36,600

Projected Trading A/c (1st Year)

Amount (Rs.)
37

Particulars
To Purchase

Particulars

Amount (Rs.)
1,28,61,500

94,77,000 By Sales A/c

A/c To Electricity III Phase A/c To Freight Inward A/c To Water charges A/c To Salary A/c: Skilled Labour Unskilled Labour To Gross Profit 96,000 1,29,600

By Closing stock 2,04,000 A/c 24,000 18,000

1,97,200

2,25,600 31,10,100 1,30,58,700 1,30,58,700

Projected Trading A/c (2nd Year)

38

Particulars
To opening stock

Amount (Rs.)

Particulars

Amount (Rs.)

1,97,200 To Purchase A/c To Electricity III Phase A/c To Freight Inward A/c To Water charges A/c To Salary A/c: Skilled Labour Unskilled Labour To Gross Profit 1,29,600 96,000 2,25,600 35,81,360 1,50,23,560 1,50,23,560 1,07,40,600 By Sales A/c By Closing stock 2,31,200 A/c 27,200 20,400 1,45,99,000

4,24,560

Projected Trading A/c (3rd Year)

39

Particulars
To opening stock

Amount (Rs.)

Particulars

Amount (Rs.)

4,24,560 To Purchase A/c To Electricity III Phase A/c To Freight Inward A/c To Water charges A/c To Salary A/c: Skilled Labour Unskilled Labour To Gross Profit 1,29,600 96,000 2,25,600 42,90,550 1,79,04,710 1,79,04,710 1,26,36,000 By Sales A/c 1,72,36,550

2,72,000 By Closing stock A/c 32,000 24,000

6,68,160

Projected Profit & Loss A/c (1st Year)

40

Particulars
To Salary A/c: General Mgr 84,000 Tech. Supervisor 60,000 Accountants 42,000 Salesman 72,000 Peon 24,000 Clerk 30,000 Depreciation: Building 49,500 Plant & Mach. 7,70,000 Other fixed asset 46,500 Computers 16,000 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 & Courier 24,000 Professional Tax 1,000 Rep. & Other exp 24,000 Statio & Print. 14,400 Telephone Bill 21,600 Interest on borrowed capital Loan Installment A/c Income Tax

Amount (Rs.)
To Gross profit

Particulars

Amount (Rs.)
31,25,400

3,12,000

To

8,82,000

To

To To To

5,09,000 4,95,000 3,75,000 1,07,630 4,44,770 31,25,400 31,25,400

TO NET PROFIT

Projected Profit & Loss A/c (2nd Year)

Particulars
To Salary A/c:

Amount (Rs.)
To Gross 41

Particulars

Amount (Rs.)
35,81,360

profit General Mgr 84,000 Tech. Supervisor 60,000 Accountants 42,000 Salesman 72,000 Peon 24,000 Clerk 30,000 Depreciation: Building 49,500 Plant & Mach. 7,70,000 Other fixed asset 46,500 Computers 16,000 Indirect Exp.: Audit Fees 22,500 Selling Exp. 2,27,800 Misc. Exp. 27,200 Freight Outward 27,200 Insurance Exp. 1,02,000 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 Interest on borrowed capital Loan Installment A/c Income Tax NET PROFIT

3,12,000

To

8,82,000

To

5,61,700 4,53,000 3,75,000 2,49,848 7,47,812

To To To T O

35,81,360 Projected Profit & Loss A/c (3rd Year)

35,81,360

Particulars
To Salary A/c: General Mgr

Amount (Rs.)
To Gross profit 84,000 42

Particulars

Amount (Rs.)
35,81,360

To

To

To To To T O

Tech. Supervisor 60,000 Accountants 42,000 Salesman 72,000 Peon 24,000 Clerk 30,000 Depreciation: Building 49,500 Plant & Mach. 7,70,000 Other fixed asset 46,500 Computers 12,000 Indirect Exp.: Audit Fees 23,500 Selling Exp. 2,68,000 Misc. Exp. 32,000 Freight Outward 32,000 Insurance Exp. 1,02,000 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 Interest on borrowed capital Loan Installment A/c Income Tax NET PROFIT

3,12,000

8,74,000

6,38,500 4,11,000 3,75,000 4,50,515 12,29,535 42,90,550 42,90,550

Projected BALANCE SHEET (1st Year)

43

Liabilities
Capital Accounts: Ekta Ghodasara

Amount (Rs.)
FIXED ASSETS: Land Building - dep. 20,25,000

Assets

Amount (Rs.)

30,00,000

4,40,000 4,95,000 49,500

4,40,000 4,45,500

Secured Loans: H.D.F.C Bank Loan

Plant & Machinery: Total 30,80,000 - dep. 7,70,000 Furniture & Fixture: Computers:

23,10,000 1,27,500 24,000

Unsecured Loans: Shrinathji invest. 21,00,000

Other Fixed Assets: 2,10,000 Accounts Payable Net Profit 1,75,000 4,44,770 Total -dep. Accounts Receivables: Bank Balance: H.D.F.C Bank A/c Cash - in hand: Cash Balance Stock - in hand: Closing Stock 77,44,770 31,500 1,78,500 20,76,730 13,59,450

6,09,890

1,97,200 77,44,770

44

Projected BALANCE SHEET (2nd Year)

Liabilities Capital Accounts: Ekta Ghodasara Amount (Rs.) 30,00,000 Assets FIXED ASSETS: Land Building - dep. Secured Loans: H.D.F.C Bank Loan Plant & Machinery: 17,75,000 Total - dep. 23,10,00 0 7,70,000 15,40,000 1,05,000 4,40,000 4,45,500 49,500 Amount (Rs.) 4,40,000 3,96,000

Furniture & Fixture: Unsecured Loans: Shrinathji invest. Accounts Payable 19,50,000 2,50,000 Other Fixed Assets: Total -dep. 1,44,500 31,500

1,13,000

Computer: Net Profit 7,47,812 Accounts Receivables: Bank Balance: H.D.F.C Bank A/c Cash - in - hand: Cash Balance Stock - in hand: Closing Stock 77,22,812

12,000 20,50,000 14,42,250 12,00,002

4,24,560 77,22,812

45

Projected BALANCE SHEET (3rd Year)

Liabilities
Capital Accounts: Ekta Ghodasara

Amount (Rs.)
FIXED ASSETS: Land Building - dep.

Assets

Amount (Rs.)

30,00,000

4,40,000 3,96,000 49,500

4,40,000 3,46,500

Secured Loans: H.D.F.C Bank Loan

15,50,000

Plant & Machinery: Total 15,40,000 - dep. 7,70,000 Furniture & Fixture:

7,70,000 82,500 -

Unsecured Loans: Shrinathji invest. Accounts Payable Net Profit 18,00,000 3,10,000 12,29,535

Computers: Other Fixed Assets: Total -dep. 1,13,000 31,500

81,500 21,50,250 18,10,125 15,40,500

Accounts Receivables: Bank Balance: H.D.F.C Bank A/c Cash - in hand: Cash Balance Stock - in hand: Closing Stock

6,68,160 78,89,535

78,89,535

46

PROJECTED COST SHEET

Particulars Raw Materials Consumed: Purchases Add: Opening Stock Direct Wages to Add: Workers: Skilled Unskilled Add: Direct expenses: Electricity (III Phase) Freight inward Water charges PRIME COST: [A] 1st Year Amount (Rs.) 2nd Year Amount (Rs.) 3rd Year Amount (Rs.)

94,77,000 -

1,07,40,000

1,26,36,000

1,29,600 96,000 2,04,000 24,000 18,000 99,48,600 60,000 24,000 49,500 7,70,000 9,03,500

1,29,600 96,000 2,31,200 27,200 20,400 1,12,45,000 60,000 27,200 49,500 7,70,000 9,06,700 9,11,500

1,29,600 96,000 2,72,000 32,000 24,000 1,31,89,600 60,000 32,000 49,500 7,70,000

Salary to tech. supervisor Repairs Depreciation: Building Plant & Machinery FACTORY COST: [B]

Salary to Office Staff: General Manager Accountants Peon Clerk Audit fees expenses Insurance expenses Legal fees expenses Postage & Courier expenses Professional tax Misc. Expenses Stationary & printing expenses Telephone bill expenses Depreciation: Computer Other fixed assets Interest on own capital OFFICE & ADMN. COST: [C]

84,000 42,000 24,000 30,000 21,500 1,02,000 15,500 24,000 1,000 24,000 14,400 21,600 16,000 46,500 2,40,000 7,06,500

84,000 42,000 24,000 30,000 22,500 1,02,000 18,000 27,200 1,000 27,200 16,320 24,480 16,000 46,500 2,40,000 7,21,200

84,000 42,000 24,000 30,000 23,500 1,02,000 20,000 32,000 1,000 32,000 19,200 28,800 12,000 46,500 2,40,000 7,33,000

47

COST OF PRODUCTION: [A] + [B] + [C] Add: Opening Stock of F/G Less: Closing Stock of F/G COST OF GOODS SOLD: Add: Salary to salesman Selling expenses Packing expenses Freight outward SELLING & DISTRIBUTUON COST: COST OF SALES: (COGS + S&D COST)

1,15,58,600 1,97,200 1,13,61,400 72,000 2,01,000 36,000 24,000 3,33,000 1,16,94,400

1,28,72,900 1,97,200 4,24,560 1,26,45,540 72,000 2,27,800 40,800 27,200 3,67,800 1,32,40,700

1,48,34,100 4,24,560 6,68,160 1,45,90,500 72,000 2,68,000 48,000 32,000 4,20,000 1,50,10,500

SALES 1,28,61,500 1,45,99,000 PROFIT 1,72,36,500

11,67,100

13,58,300

22,26,000

48

Schedule of Raw material consumed

Particulars PAPER IN ROLL Opening Balance Add: Purchase during the year Less: Closing Stock GUM Opening Balance Add: Purchase during the year Less: Closing Stock PRINTING INK Opening Balance Add: Purchase during the year Less: Closing Stock MISC. CHEMICAL Opening Balance Add: Purchase during the year Less: Closing Stock STRING Opening Balance Add: Purchase during the year Less: Closing Stock TOTAL R.M. CONSUMED 15,000 1,05,000 94,77,000 17,000 1,19,000 1,07,40,600 1,26,36,000 1,40,000 12,000 48,000 13,600 54,400 64,000 6,000 3,90,000 6,800 4,42,000 5,20,000 10,500 84,000 11,900 95,200 1,12,000 8,85,000 88,50,000 10,03,000 1,00,30,000 1,18,00,000 Year 1 Quantity Amount Quantity Year 2 Amount Amount

Schedule of finished goods

Particulars Year 1 Quantity Amount Quantity Year 2 Amount

Opening Balance Add: Goods manufactured Less: Sales during the year Closing Stock (Units):

1,06,20,000 1,04,50,000

1,32,75,000 1,30,62,500

1,70,000 1,20,36,000 1,18,40,000 3,66,000

1,97,200 1,50,45,000 1,48,00,000

1,70,000

49

Schedule of fixed assets

Gross Block
Particulars Opening =+++++ +++++ Addition 4,95,000 35,000 30,80,000 75,000 1,50,000 40,000 1,00,000 39,75,000 Total

Depreciation
Total Accumulat ed 49,500 5,250 7,70,000 11,250 22,500 16,000 15,000 8,82,000 During the Year 49,500 5,250 7,70,000 11,250 22,500 16,000 15,000 8,82,000

Net Block
Written Down Value 4,45,000 29,750 23,10,000 63,750 1,27,500 24,000 51,000 30,51,500

Building Boundry wall & gate Plant & Machinery Electricity inst. & fittings Furniture Computers Telephone & Fax Machines Total:

4,95,000 35,000 30,80,000 75,000 1,50,000 40,000 1,00,000 39,75,000

50

Schedule of factory Overheads

Particulars
Salary to technical supervisor Repairs Dep: Building Plant & Machinery Total

YEAR YEAR 1 YEAR 2 3 Amount Amount Amount

60,000 24,000 60,000 27,200 60,000 32,000

49,500 49,500 49,500 7,70,000 7,70,000 7,70,000 9,03,500 9,06,700 9,11,500

Schedule of selling overheads

Particulars
Salary to salesman Freight outward Selling expenses Packing expenses Total

YEAR 1 Amount
72,000 24,000 2,01,000 36,000 3,33,000

YEAR 2 Amount

YEAR 3 Amount

72,000 72,000 27,200 32,000 2,27,800 2,68,000 40,800 48,000 3,67,800 4,20,000

51

RISK FACTORS
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. Another risk is that if any new material comes into market other than paper, then it will be hard to maintain the market.

52

NAME & ADDRESS OF MACHINERY & EQUIPMENT SUPPLIERS

1. M/S Industrial paper M/C (P) Ltd. A-32, phase-1, Naraina Indl. Area, New Delhi. 2. M/S Sandhu Mechnical 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.

53

NAME & ADDRESS OF RAW MATERIAL SUPPIERS

1. 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).

54

DISCLODURE OF A/cing POLICIES

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.

55

CONCLUSION

In the product project report on Sav-E paper bags I have discussed all financial data and other relevant information The market of Sav-E paper bags is expanding; demand for the product is increasing day by day. The return on this business is also satisfactory. At last it can be said that future of this product is very bright. With the expectation of high profitability it is assumed that it would be the perfect product to be manufactured in todays environment. AFTER ALL ITS AN ENVIRONMENTAL FRIENDLY PRODUCT!!! Its Sav-E paper bags.

56

Future Plans

To use totally eco-friendly papers, which are made out of baggage and not tree. To make the product popular in every place of Gujarat and gradually cover all
near by states.

To make the firm a medium scale industry and then a large scale. 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!!!

57

58