PREPARED BY Name: - Jaydeep Bhupatani Class: - T.Y.B.B.A. Seat No.: Roll No.: Academic year: - 2005-2006 COLLEGE G.K.

& C.K. Bosamiya College SUBMITTED TO

Saurashtra University

GUIDED BY Pro.Viral Silu

DECLARATION
I undersigned Mr.Jaydeep Bhupatani 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. Viral Silu of G.K. & C.K. Bosamiya colllege. Jetpur This report has not been submitted previously to

another university for another examination. Date: Place: Jetpur ------------(Jaydeep Bhupatani)

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 small-scale 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. Viral Silu for his co-operation 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 and family member who helped me in this project. Date Place: Jetpur ------------(Jaydeep Bhupatani)

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. 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
5

PAGE NO. 07 08 09 10 11 12-14 15-17 18 19 20 21-22 23 24 25 26-31 32 32 32 33 33 34 34 35-36 37 40 41 42 42 42 43-44

31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45.

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

45-47 48-50 51-53 54-55 56 57 57 58 58 59 60 61 62 63 64

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
Name of the Unit Registered Office 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 Jaydeep Bhupatani Sav-E Paper Bags Small Scale Applied for Applied for Rs. 75,00,000 HDFC Bank Shrinathji Investments Own Capital 9.8% 16.13%

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

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

Jaydeep Bhupatani 21 Years Mota chowk, Rajgor Street, Jetpur. BBA (Marketing) Marketing 40% of Owned Capital Taken Training in units like: Samay watch Vikas Stove

10

ORGANISATION STRUCTURE
Owner

Production Manager Workers

Personnel Manager

Marketing Salesman

Finance Accountant

11

JUSTIFICATION OF LOCATION
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.

12

3. Availability of transport: It is required of for assembling of raw So, material all type & of distribution finished product.

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.

13

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

Metoda Highway
Mani Dwip
Temple

Atul Marbles Pvt Ltd.

PRODUCT DETAILS
14

 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.

15

PRODUCTS USES : -

Paper bags are common packing material being used by bakers and confectioners, grocers, textile and cloth merchant, dry cleaner, sweet 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.

16

MARKET POTENTIAL
The introduction of shopping complexes & consumer stores in the semi-urban for & rural areas bags, are creating bags additional demand paper paper

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.

17

RAW MATERIALS
The raw material is the base for the production. 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 The

required raw material is paper in roll, gum, printing ink,

18

MACHINES

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.

19

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

20

MANUFACTURING PROCESS IN DETAIL

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

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

21

STAFF & LABOUR

No. Staff & Labour 1. Factory Staff Skilled Unskilled Technical Supervisor Clerk cum typist Accountant Peon cum Watchman Salesman Manager Peon cum watchman No. 4 6 1 1 1 1 2 1 1

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

22

23

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

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

Plant & Machinery Name Automatic bag machine Stereo Press Stereo Grinder Roll Slitter Testing Equipment Punching Machine 2 2 1 1 1 2,50,00 0 3,50,00 0 2,50,00 0 80,000
24

Paper

Qty. 3

Rate 5,00,00 0

Total Cost 15,00,000 5,00,000 7,00,000 2,50,000 80,000 50,000

50,000

Other Assets
Particulars Furniture Fixtures Electrification Installation Charges Computer Telephone Fax machine Boundary Gate wall & 1 2 2 1 75,000 40,000 15,000 15,000 35,000 & Qty. Rate 1,50,00 0 75,000 40,000 30,000 30,000 35,000 Total Cost 1,50,000

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
25

AMOUNT 4,40,000 4,95,000 35,000 15,00,000 5,00,000 7,00,000 2,50,000 80,000

5. 6. 7.

Punching Machine Furniture & Fixtures Electrification & Installation Charges Computer, Telephones & Fax Machine Total

50,000 1,50,000 75,000 1,00,000 43,65,000

COST OF PRODUCTION
Raw Material Rate Req. Per kg. per day Paper in roll 10 2,950 Total (Rs.) 29,500 Gum 8 35 Total (Rs.) 280 Printing Ink 65 20 Total (Rs.) 1,300 Misc. Chemical 4 40 Total (Rs.) 160 String 7 50 Total (Rs.) 350 Net Total Particulars 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 No. 4 6 1 Rate 2,000 1,800 5,000
26

P.M. 8,000 10,800 5,000

P.A. 96,000 1,29,600 60,000

Salesman Manager Clerk cum typist Accountant Peon cum Watchman Total

2 1 1 1 1

3,000 7,000 2,500 3,500 2,000

6,000 7,000 2,500 3,500 2,000 44,800

72,000 84,000 30,000 42,000 24,000 5,37,600

Other Expenses & Utilities 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
27

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 Sr. 1. 2. Particulars Fixed Cost Working Capital (2 months) Total 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 Amount 43,65,000 16,75,550 60,40,550

INTEREST ON CAPITAL Sr. 1. 2. Particulars Own Capital (40%) Borrowed Capital (50%) HDFC Shrinathji
28

Rate 8% 12%

Amount 2,40,000 2,70,000

Investments 10% Total 2,25,000 7,35,000

DEPRECIATION Sr. 1. 2. 3. 4. Particulars Building (10%) Plant & Machinery (25%) Other Fixed Assets (15%) Computer (40%) Total Value 4,50,000 30,80,000 3,10,000 40,000 Amount 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 Year 1 2 3 4 Units/annu m 1,04,50,000 1,18,40,000 1,39,50,000 1,42,00,000 Rate/unit 1.25 1.25 1.25 1.50
29

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

1,45,50,000

1.50

2,18,25,000

5th year 4th year 3rd year 2nd year 1st year
0 10000000 20000000 30000000 40000000 50000000

Schedule of fixed & variable cost

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

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

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

Particulars Depreciation Interest on capital Salary (40%) Other Expenses (40%) Total Fixed cost/unit
30

Amount 8,82,000 7,35,000 2,15,040 3,02,000 21,34,040

= = =

Total Fixed Cost/Total no. of units 21,34,040/1,06,20,000 0.20 ps. /unit VARIABLE COST Amount 94,77,000 3,22,560 4,53,000 I,02,52,560

Particulars Raw Materials Salary (60%) Other Expenses (60%) Total

Variable cost/unit = Total Variable Cost/ Total no. of units = 1,02,52,560/1,06,20,000 = 0.96ps. /unit Contribution/unit = S.P./unit-V.C./unit = 1.25-0.96 = 0.29 ps. /unit

31

BREAK EVEN ANALYSIS

Break-even point is that point of achieving, where total revenue and total expenses are equal. zero profit. loss. It is the point of If the sales exceed BEP the business will earn

profit and if it decreases from BEP the business will incur 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
32

P. V. Ratio = Contribution per unit / Sales X 100 = 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%

33

LOAN REPAYMENT SCHEDULE

HDFC Period 1st Year 2nd Year 3rd Year 4th Year 5th Year 6th Year 7th Year 8th Year 9th Year 10thYea r 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 Installmen t 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 2,70,00 0 2,43,00 0 2,16,00 0 1,89,00 0 1,62,00 0 1,35,00 0 1,08,00 0 81,000 54,000 27,000

SHRINATHJI INVESTMENTS Period 1st Year 2nd Year 3rd Year 4th Year 5th Opening Balance 22,50,000 21,00,000 19,50,000 18,00,000 16,50,000 Installmen t 1,50,000 1,50,000 1,50,000 1,50,000 1,50,000
34

Closing Balance 21,00,000 19,50,000 18,00,000 16,50,000 15,00,000

Interest 2,25,00 0 2,10,00 0 1,95,00 0 1,80,00 0 1,65,00

Year 6th Year 7th Year 8th Year 9th Year 10thYea r 11thYea r 12thYea r 13thYea r 14thYea r 15thYea r

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

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

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

0 1,50,00 0 1,35,00 0 1,20,00 0 1,05,00 0 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 = 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
35

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 Less: Cost of Production E.B.I.T. Less: Interest on Capital E.B.T. Less: Tax Net Profit after tax Tax Slab (Used for Calculating Tax)

Amount 1,28,61,500 1,61,51,600 12,09,900 7,35,000 4,74,900 88,970 3,85,930

36

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:

Actual Tax 1,500 20,00 0 67,47 0 88,97 0

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

Cost Of Operation: Raw Materials Direct Wages to Workers: Skilled Unskilled Direct expenses & utilities: Electricity Freight inward Water charges

94,77,000 96,000 1,29,600 2,04,000 18,000 24,000 99,48,600

1,07,40,600 96,000 1,29,600 2,31,200 20,400 27,200 1,12,45,000

1,26,36,000 96,000 1,29,600 2,72,000 24,000 32,000 1,31,89,600

37

Add: Less:

Opening stock of R/M Opening stock of F/G Closing stock of R/M Closing stock of F/G [B]

1,97,200 97,51,400 31,10,100

1,97,200 4,24,560 1,10,17,640 35,81,360

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.) Amount (Rs.) 1,28,61,50 0

Particulars To Purchase A/c To Electricit y III Phase A/c To Freight Inward A/c

Particulars

94,77,000 By Sales A/c

2,04,000 By Closing stock A/c

1,97,200

24,000 38

To Water charges A/c To Salary A/c: Skilled Labour Unskille d Labour To Gross Profit 96,00 0 1,29,60 0

18,000

2,25,600 31,10,100 1,30,58,70 0

1,30,58,700

Projected Trading A/c (2nd Year)

Amount (Rs.) Amount (Rs.)

Particulars To opening stock To

Particulars

1,97,200 1,07,40,60 By Sales A/c 39

1,45,99,00

Purchase A/c To Electricit y III Phase A/c To Freight Inward A/c To Water charges A/c To Salary A/c: Skilled Labour Unskille d Labour To Gross Profit 1,29,60 0 96,000

2,31,200 By Closing stock A/c

4,24,560

27,200 20,400

2,25,600 35,81,360 1,50,23,560 1,50,23,560

Projected Trading A/c (3rd Year)

Amount (Rs.) Amount (Rs.)

Particulars To opening stock

Particulars

4,24,560 40

To Purchase A/c To Electricit y III Phase A/c To Freight Inward A/c To Water charges A/c To Salary A/c: Skilled Labour Unskille d Labour To Gross Profit 1,29,60 0 96,000

1,26,36,00 0 By Sales A/c By Closing stock 2,72,000 A/c

1,72,36,55 0

6,68,160

32,000 24,000

2,25,600 42,90,550 1,79,04,710 1,79,04,710

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

Particulars To Salary A/c: General Mgr Tech. Amount (Rs.) To Gross profit 84,000 60,000 Particulars Amount (Rs.) 31,25,40 0

41

To

To

To To To T O

Supervisor 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 NET PROFIT

3,12,000

8,82,000

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

Projected Profit & Loss A/c (2 n d Year)

Particulars Amount (Rs.) To Gros s profit 84,000 Particulars Amount (Rs.) 35,81,36 0

To

Salary A/c: General

42

To

To

Mgr Tech. Supervisor Accountant s Salesman Peon Clerk Depreciation : Building Plant & Mach. Other fixed asset Computers Indirect Exp.: Audit Fees

60,000 42,000 72,000 24,000 30,000 3,12,000 49,500 7,70,00 0 46,500 16,000 8,82,000 22,500 2,27,80 0 27,200

To To To T O

Selling Exp. Misc. Exp. Freight Outward 27,200 Insurance 1,02,00 Exp. 0 Legal Fees Exp. 18,000 Packing Exp 40,800 Post & Courier 27,200 Professiona l 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

5,61,700 4,53,000 3,75,000 2,49,848 7,47,812 35,81,36 0 35,81,360

Projected Profit & Loss A/c (3 r d Year)

43

Particulars

Amount (Rs.) To Gros s profit 84,000 60,000 42,000 72,000 24,000 30,000 3,12,000 49,500 7,70,00 0 46,500 12,000 8,74,000 23,500 2,68,00 0 32,000

Particulars

Amount (Rs.) 35,81,36 0

To

To

To

Salary A/c: General Mgr Tech. Supervisor Accountant s Salesman Peon Clerk Depreciation : Building Plant & Mach. Other fixed asset Computers Indirect Exp.: Audit Fees

To To To

Selling Exp. Misc. Exp. Freight Outward 32,000 Insurance 1,02,00 Exp. 0 Legal Fees Exp. 20,000 Packing Exp 48,000 Post & Courier 32,000 Professiona l 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

6,38,500 4,11,000 3,75,000 4,50,515

44

T O

NET PROFIT

12,29,53 5 42,90,55 0 42,90,550

Projected BALANCE SHEET (1st Year)

Amount (Rs.) FIXED ASSETS: 30,00,00 0 Land Building 4,40,000 4,95,000 - dep. 49,500 4,40,000 4,45,500 Amount (Rs.)

Liabilities Capital Accounts: Ekta Ghodasara

Assets

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

20,25,00 0

Plant & Machinery: 30,80,00 Total 0 - dep. 7,70,000 Furniture & Fixture:

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

Unsecured Loans: Shrinathji invest. Accounts Payable

Computers: 21,00,00 0 Other Fixed Assets: Total 1,75,000 -dep. 2,10,000 31,500

1,78,500 20,76,73 0

Net Profit

4,44,770

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

13,59,450

6,09,890

1,97,200

45

Stock 77,44,770 77,44,770

Projected BALANCE SHEET (2 n d Year)

Liabilities Capital Accounts: Ekta Ghodasara Amount (Rs.) FIXED ASSETS: Land Building - dep. Secured Loans: H.D.F.C Bank Loan Assets Amount (Rs.)

30,00,000

4,40,000 4,45,500 49,500

4,40,000 3,96,000

Plant & Machinery: 17,75,000 Total - dep. 23,10,000 7,70,000 15,40,000 1,05,000

Furniture & Fixture: Unsecured Loans: Shrinathji invest. Accounts Payable

19,50,000

Other Fixed Assets: Total 1,44,500 31,500 1,13,000

2,50,000

-dep.

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

12,000 20,50,000

14,42,250

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Cash Balance Stock - in hand: Closing Stock 77,22,812

12,00,002

4,24,560 77,22,812

Projected BALANCE SHEET (3 r d Year)

Liabilities Capital Accounts: Ekta Ghodasara Amount (Rs.) FIXED ASSETS: Land Building Assets Amount (Rs.)

30,00,000

4,40,000 3,96,000 - dep. 49,500

4,40,000 3,46,500

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

15,50,000

Plant & Machinery: 15,40,00 Total 0 - dep. 7,70,000 Furniture & Fixture:

7,70,000 82,500 -

Unsecured Loans: Shrinathji invest. Accounts Payable

Computers: 18,00,000 Other Fixed Assets: Total 3,10,000 12,29,53 5 -dep. 1,13,000 31,500

81,500 21,50,25 0

Net Profit

Accounts Receivables: Bank Balance: H.D.F.C Bank A/c

18,10,125

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Cash - in hand: Cash Balance Stock - in hand: Closing Stock 78,89,535

15,40,500

6,68,160 78,89,535

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

84,000 42,000 24,000 30,000

84,000 42,000 24,000 30,000

84,000 42,000 24,000 30,000

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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]

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

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

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

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) SALES

1,15,58,60 1,28,72,90 0 0 1,48,34,100 1,97,200 1,13,61,40 0 72,000 2,01,000 36,000 24,000 3,33,000 1,97,200 4,24,560 1,26,45,54 0 72,000 2,27,800 40,800 27,200 3,67,800 4,24,560 6,68,160 1,45,90,50 0 72,000 2,68,000 48,000 32,000 4,20,000 1,50,10,50 0 1,72,36,500

1,16,94,40 1,32,40,70 0 0 1,45,99,00 0

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1,28,61,50 PROFIT 11,67,100

13,58,300

22,26,000

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 12,000 48,000 13,600 54,400 6,000 3,90,000 6,800 4,42,000 10,500 84,000 11,900 95,200 8,85,000 88,50,000 10,03,000 1,00,30,000 Year 1 Quantity Amount Quantity Year 2 Amount

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Schedule of finished goods

Particulars Year 1 Quantity Amount Year 2 Quantity Amount

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

1,06,20,00 0 1,04,50,00 0

1,32,75,00 0 1,30,62,50 0

1,70,000 1,20,36,00 0 1,18,40,00 0

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

1,70,000

3,66,000

Schedule of fixed assets

Gross Block Openi ng =+ ++++ ++++ Total + Additi on Depreciation Total Accum ulated Net Block

Particulars

During the Year

Writte n Down Value 4,45,0 00 29,75 0 23,10, 000 63,75 0 1,27,5 00 24,00 0

Building Boundry wall & gate Plant & Machinery Electricity inst. & fittings Furniture Computers

4,95,0 4,95,0 49,50 49,50 00 00 0 0 35,00 35,00 0 0 5,250 5,250 30,80, 30,80, 7,70,0 7,70,0 000 000 00 00 75,00 75,00 11,25 11,25 0 0 0 0 1,50,0 1,50,0 22,50 22,50 00 00 0 0 40,00 40,00 16,00 16,00 0 0 0 0
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Telephone & Fax Machines Total:

1,00,0 1,00,0 00 00 39,75, 000 39,75, 000

15,00 0 8,82,0 00

15,00 0 8,82,0 00

51,00 0 30,51, 500

Schedule of factory Overheads

Particulars Salary to technical supervisor Repairs Dep: Building Plant & Machinery Total YEAR 1 Amount YEAR 2 Amount YEAR 3 Amount

60,000 24,000

60,000 27,200

60,000 32,000

49,500 49,500 49,500 7,70,00 7,70,00 7,70,00 0 0 0 9,03,500 9,06,700 9,11,500

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Schedule of selling overheads

Particulars Salary to salesman Freight outward Selling expenses Packing expenses Total YEAR 1 Amount YEAR 2 Amount YEAR 3 Amount

72,000 72,000 72,000 24,000 27,200 32,000 2,01,00 2,27,80 2,68,00 0 0 0 36,000 40,800 48,000 3,33,000 3,67,800 4,20,000

RISK FACTORS
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 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.

NAME & ADDRESS OF MACHINERY & EQUIPMENT SUPPLIERS

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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.

NAME & ADDRESS OF RAW MATERIAL SUPPIERS

1. M/S Punalur Paper Mills, Punalur, Kerala.
55

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).

DISCLODURE OF A/cing POLICIES

Depreciation is calculated on straight line methods.
56


is

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 low.

year.

Interest on ownership capital is used for costing purpose and is reinvested in business again every

57

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.

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Future Plans

To use totally eco-friendly papers, which are made out of

baggage and not tree.

To To If

make the product popular in every place of Gujarat

and gradually cover all near by states. make the firm a medium scale industry and then a

large scale. 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!!!

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