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.

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
5

PAGE
NO.
07
08
09
10
11
12-13
14
15
16
17
18
20
21
22-24
25
26

17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.

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

27
27
27
28
28
29
31
32
34
35
35
36
36
37
38
41
44
47
49
50
50
51
51
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
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
Ravi Pokar
Sav-E Paper Bags
Small Scale
Applied for
Applied for

Location of the Unit

Form of Organisation
Name of Ow ner
Name of Product
Size of the Unit
SSI Registration Number
Subsidy Registration No
8

Cost of Project
Means of Finance

Rs. 75,00,000
HDFC Bank
Shrinathji Investments
Own Capital
9.8%
16.13%

Cost of Capital
Return on Investment

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

IMPLEMENTATION SCHEDULE
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.

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

Trial & production will start from

8 t h month onwards

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

10

ORGANISATION STRUCTURE
Owner

Production

Personnel

Marketing

11

Finance

Manager

Manager

Salesman

Accountant

Workers

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
12

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 t he above factors justify t he selection of t he location.

So, t he selection would defi nitely contr ibute to t he profi tability.

METODA
G.I.D.C

Metoda
Highway
13

Mani
Dwip
Temple

SAV E
Paper bags
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.

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:-

15

Brand also plays an important role in marketing.

Good brand has to face

less competition in the increasing market.

MARKET POTENTIAL
The introduction of shopping complexes & consumer stores in the semiurban & 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.

16

RAW MATERIALS
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

17

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.

18

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

19

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.

20

PRODUCTION CAPACITY SCHEDULE

Production Capacity

1,06,20,000 Units

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

25
300
1
8
8,85,000 Units

21

STAFF & LABOUR

No.
1.

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

Staff & Labour

No.

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

22

23

FIXED ASSETS
Land

Particulars
Land

Sq.mts.
400

Rate(Rs.)
1100

Total Cost
4,40,000

Building

Particulars
Building

Sq.mts.
275

Rate(Rs.)
1800

24

Total Cost
4,95,000

Plant & Machinery

Name
Automatic

Qty.
3

Rate
5,00,000

Total Cost
15,00,000

Stereo Press

2,50,000

5,00,000

Stereo Grinder

3,50,000

7,00,000

Roll Slitter

2,50,000

2,50,000

Testing Equipment

80,000

80,000

Punching Machine

50,000

50,000

Paper

bag

machine

Other Assets
Particulars

Qty.

Rate

Total Cost

1,50,000

1,50,000

Charges

75,000

75,000

Computer

40,000

40,000

Telephone

15,000

30,000

Fax machine

15,000

30,000

Boundary w all & Gate

35,000

35,000

Furniture & Fixtures

Electrification

Installation

25

Total Fixed Assets

NO.
1.
2.
3.
4.

5.
6.
7.

PARTICULAR

AMOUNT

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

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

Computer, Telephones & Fax Machine

Total

COST OF PRODUCTION
Raw Material

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

Rate
Per kg.
10
8
65
4

Req. per
day
2,950
29,500
35
280
20
1,300
40
160
26

Req. per
month
73,750
7,37,500
875
7,000
500
32,500
1,000
4,000

Req. per year

8,85,000
88,50,000
10,500
84,000
6,000
3,90,000
12,000
48,000

String
Total (Rs.)

50
350

1,250
8,750
7,89,750

Net Total

15,000
1,05,000
94,77,000

Staff & Labour

Particulars

No.

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

Rate

P.M.

P.A.

4
6

2,000
1,800

8,000
10,800

96,000
1,29,600

1
2
1
1
1

5,000
3,000
7,000
2,500
3,500

5,000
6,000
7,000
2,500
3,500

60,000
72,000
84,000
30,000
42,000

2,000

2,000
44,800

24,000
5,37,600

Total

Other Expenses & Utilities

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

8.
9.

Particulars

P.M.

Electricity
Water Charges
Postage & Telegram
Stationery
Repairs
Telephone Expense
Transport
inward
outward
Packing
Miscellaneous Exp.
27

P.A.
17,000
1,500
2,000
1,200
2,000
1,800

2,04,000
18,000
24,000
14,400
24,000
21,600

2,000
2,000
3,000
2,000

24,000
24,000
36,000
24,000

10.
11.
12.
13.
14.

Audit Fees
Professional Tax
Legal Fees
Insurance
Selling Exp.
Total

21,500
1,000
15,500
1,02,000
2,01,000
7,55,000

16,750
51,250

COST OF PRODUCTION

Sr.
1.
2.
3.

Particulars

P.M.

Raw Material
Staff & Labour
Other Expenses
Total

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

P.M.

Raw Material
Staff & Labour
Other Expenses
Total

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

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

SOURCES OF FINANCE
28

Sr.
1.
2.

Particulars

Rate

Own Capital (40%)

Borrowed Capital (60%)

HDFC

Shrinathji Investments

Amount

8%

30,00,050

12%

22,50,000

10%

22,50,000
75,00,000

Total

INTEREST ON CAPITAL

Sr.
1.
2.

Particulars

Rate

Own Capital (40%)

Borrowed Capital (50%)

HDFC

Shrinathji Investments

Amount

8%

2,40,000

12%

2,70,000

10%

2,25,000
7,35,000

Total

DEPRECIATION

Sr.
1.
2.
3.
4.

Particulars

Value

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

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

29

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

ANNUAL COST OF PRODUCTION

Sr.
1.
2.
3.
4.

Particulars

Amount
94,77,000
12,92,600
8,82,000
7,35,000
1,23,86,600

Raw Material
Recurring Expenses
Depreciation
Interest on Investment
Total

Sales Forecast

Year

Units/annum

Rate/unit

Amt.(Rs.)

1,04,50,000

1.25

1,30,62,500

1,18,40,000

1.25

1,48,00,000

30

1,39,50,000

1.25

1,74,37,500

1,42,00,000

1.50

2,13,00,000

1,45,50,000

1.50

2,18,25,000

Schedule of fixed & variable cost

Variable
cost
Amount

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

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

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

FIXED COST

Particulars
Depreciation

Amount
8,82,000

31

Interest on capital

7,35,000

Salary (40%)

2,15,040

Other Expenses (40%)

3,02,000
21,34,040

Total

Fixed cost/unit
=

Total Fixed Cost/Total no. of units

21,34,040/1,06,20,000

0.20 ps. /unit

VARIABLE COST
Particulars

Amount

Raw Materials

94,77,000

Salary (60%)

3,22,560

Other Expenses (60%)

4,53,000
I,02,52,560

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
32

= 1.25-0.96
= 0.29 ps. /unit

33

BREAK EVEN ANALYSIS

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

34

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%

35

LOAN REPAYMENT SCHEDULE

HDFC
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

Closing Balance

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

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
36

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
= 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
37

= 12,09,900 / 75,00,000 X 100

= 16.13%

PROFITABILITY ANALYSIS
Particulars

Amount

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

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

Tax Slab (Used for Calculating Tax)

Income
Up to Rs.
1,35,000
From 1,35,001

Applicable Tax Rate (%)

Nil
10
38

Actual
Tax
1,500

to 150000
From 150001
to 250000
Above 250001

20
30
Total Actual Tax:

20,000
67,470
88,970

PROJECTED OPERATING STATEMENT

1st Year
Amount (Rs.)

Particulars
SALES:

[A]

1,28,61,500

Cost Of Operation:
Raw Materials
Direct Wages to Workers:
Skilled

1,45,99,000

1,72,36,500

1,07,40,600

1,26,36,000

96,000

96,000

96,000

1,29,600

1,29,600

1,29,600

2,04,000
18,000
24,000

2,31,200
20,400
27,200

2,72,000
24,000
32,000

Opening stock of R/M

Opening stock of F/G
Closing stock of R/M
Closing stock of F/G

99,48,600
1,97,200

1,12,45,000
1,97,200
4,24,560

1,31,89,600
4,24,560
6,68,1608

[B]

97,51,400

1,10,17,640

1,29,46,000

Direct expenses & utilities:

Electricity
Freight inward
Water charges

Less:

3rd Year
Amount (Rs.)

94,77,000

Unskilled

Add:

2nd Year
Amount (Rs.)

Total Cost Of Operation:

39

GROSS PROFIT:

[A - B]

Indirect Expenses:
Total factory cost
Total office & admn.
cost
Total selling & dist.
cost
Total Indirect Expenses:

31,10,100

35,81,360

42,90,500

9,03,500

9,06,700

9,11,500

7,06,500

7,21,200

7,15,000

3,33,000

3,67,800

4,20,000

19,43,000

19,95,700

20,46,500

11,67,100

15,85,660

22,44,000

4,95,000

4,53,000

4,11,000

6,72,100

11,32,660

18,33,000

Earning Before Interest & Tax

(Gross profit - Total indirect
expenses)
Less:

Interest
on
Borrowed Capital
Earning Before Tax
(E.B.I.T - Interest)

Less:

Tax

NET PROFIT AFTER TAX:

(Earning Before Tax - Tax)

1,58,930

2,86,298

5,49,170

8,46,362

4,96,400

13,36,600

Projected Trading A/c (1st Year)

Amount
(Rs.)

Particulars
To Purchase
A/c
To Electricity
III Phase A/c
To Freight
Inward A/c
To Water
charges A/c
To Salary A/c:

Particulars

94,77,000 By Sales A/c

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

96,000
1,29,600

2,25,600
40

Amount (Rs.)
1,28,61,500
1,97,200

Labour
To Gross Profit

31,10,100
1,30,58,700

Projected Trading A/c (2nd Year)

41

1,30,58,700

Amount
(Rs.)

Particulars

Particulars

Amount (Rs.)

To opening
stock
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

1,07,40,600 By Sales A/c

By Closing stock
2,31,200 A/c

1,45,99,000

4,24,560

27,200
20,400

1,29,600
96,000

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

42

1,50,23,560

Projected Trading A/c (3rd Year)

Amount
(Rs.)

Particulars

Particulars

Amount
(Rs.)

To opening
stock
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

1,26,36,000 By Sales A/c

2,72,000 By Closing stock A/c

1,72,36,550

6,68,160

32,000
24,000

1,29,600
96,000

2,25,600
42,90,550

1,79,04,710

43

1,79,04,71
0

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

Particulars
To

To

To

To
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

Amount
(Rs.)

Particulars
To
Gross
profit

3,12,000

8,82,000

5,09,000
4,95,000
3,75,000
44

Amount
(Rs.)
31,25,400

To

Income Tax

1,07,630

TO NET PROFIT

4,44,770
31,25,400

31,25,400

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

Particulars
To

To

To

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
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

Amount
(Rs.)

Particulars
To
Gross
profit

3,12,000

8,82,000

5,61,700
4,53,000
45

Amount
(Rs.)
35,81,360

To
To

Loan Installment A/c

Income Tax

3,75,000
2,49,848

T
O

NET PROFIT

7,47,812
35,81,36
0
Projected Profit & Loss A/c (3rd Year)

Amount
(Rs.)

Particulars
To

To

To

Salary A/c:
General Mgr
Tech.
Supervisor
Accountants
Salesman
Peon
Clerk
Depreciation:
Building
Plant &
Mach.
Other fixed
asset
Computers
Indirect Exp.:
Audit Fees
Selling Exp.
Misc. Exp.
Freight
Outward
Insurance
Exp.
Legal Fees
Exp.
Packing Exp
Post &
Courier
Professional
Tax
Rep. & Other
exp
Statio &
Print.
Telephone Bill

Particulars
To
Gross
profit

84,000
60,000
42,000
72,000
24,000
30,000

3,12,000

49,500
7,70,000
46,500
12,000

8,74,000

23,500
2,68,000
32,000
32,000
1,02,000
20,000
48,000
32,000
1,000
32,000
19,200
28,800

6,38,500
46

35,81,360

Amount
(Rs.)
35,81,360

To
To
To

Interest on borrowed
capital
Loan Installment A/c
Income Tax

4,11,000
3,75,000
4,50,515

T
O

NET PROFIT

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

42,90,550

Projected BALANCE SHEET (1st Year)

Liabilities
Capital Accounts:
Ekta Ghodasara

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

Amount
(Rs.)

Amount
(Rs.)

Assets

30,00,000

20,25,000

FIXED
ASSETS:
Land

4,40,000

4,40,000

Building
- dep.

4,95,000
49,500

4,45,500

Plant & Machinery:

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

Unsecured Loans:
Shrinathji invest.
Accounts Payable
Net Profit

Computers:
21,00,000

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

Other Fixed Assets:

1,75,000
4,44,770

Total
-dep.

2,10,000
31,500

Accounts Receivables:
Bank Balance:
H.D.F.C Bank
A/c
Cash - in hand:
Cash Balance
Stock - in hand:
Closing Stock
47

1,78,500
20,76,730
13,59,450
6,09,890

1,97,200

77,44,770

77,44,770

Projected BALANCE SHEET (2nd Year)

Liabilities
Capital Accounts:
Ekta Ghodasara

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

Amount (Rs.)

30,00,000

17,75,000

Assets

Amount (Rs.)

FIXED ASSETS:
Land

4,40,000

4,40,000

Building
- dep.

4,45,500
49,500

3,96,000

Plant & Machinery:

Total
23,10,000
- dep.
7,70,000
Furniture & Fixture:

Unsecured Loans:
Shrinathji invest.

Accounts Payable

19,50,000

2,50,000

1,05,000

Other Fixed Assets:

Total
-dep.

1,44,500
31,500

Computer:

Net Profit

7,47,812

15,40,000

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

48

1,13,000

12,000

20,50,000
14,42,250

Cash - in - hand:
Cash Balance

12,00,002

Stock - in - hand:
Closing Stock

4,24,560

77,22,812

77,22,812

Projected BALANCE SHEET (3rd Year)

Liabilities
Capital Accounts:
Ekta Ghodasara

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

Amount
(Rs.)

Assets

30,00,000

15,50,000

Unsecured Loans:
Shrinathji invest.
Accounts Payable
Net Profit

Amount
(Rs.)

18,00,000

FIXED
ASSETS:
Land

4,40,000

4,40,000

Building
- dep.

3,96,000
49,500

3,46,500

Plant & Machinery:

Total
15,40,000
- dep.
7,70,000

7,70,000

Furniture & Fixture:

82,500

Computers:

Other Fixed Assets:

3,10,000
12,29,535

Total
-dep.

1,13,000
31,500

Accounts Receivables:
49

81,500
21,50,250

Bank Balance:
H.D.F.C Bank
A/c
Cash - in hand:
Cash Balance

18,10,125
15,40,500

Stock - in hand:
Closing Stock

6,68,160

78,89,535

78,89,535

PROJECTED COST SHEET

Particulars
Raw Materials Consumed:
Purchases
Add:
Opening Stock
Add:
Direct Wages to Workers:
Skilled
Unskilled
Add:
Direct expenses:
Electricity (III Phase)
Freight inward
Water charges
PRIME COST:

[A]

Salary to tech. supervisor

Repairs
Depreciation:
Building
Plant & Machinery
FACTORY COST:
Salary to Office Staff:
General Manager
Accountants

[B]

1st Year

2nd Year

3rd Year

Amount (Rs.)

Amount (Rs.)

Amount (Rs.)

94,77,000
-

1,07,40,000

1,29,600
96,000

1,29,600
96,000

1,29,600
96,000

2,04,000
24,000
18,000

2,31,200
27,200
20,400

2,72,000
32,000
24,000

99,48,600

1,12,45,000

1,31,89,600

60,000
24,000

60,000
27,200

60,000
32,000

49,500
7,70,000

49,500
7,70,000

49,500
7,70,000

9,03,500

84,000
42,000

50

9,06,700

1,26,36,000

9,11,500

84,000
42,000

84,000
42,000

Peon
Clerk
Audit fees expenses
Insurance expenses

24,000
30,000
21,500
1,02,000

24,000
30,000
22,500
1,02,000

24,000
30,000
23,500
1,02,000

Legal fees expenses

Postage & Courier expenses
Professional tax
Misc. Expenses

15,500
24,000
1,000
24,000

18,000
27,200
1,000
27,200

20,000
32,000
1,000
32,000

Stationary & printing expenses

Telephone bill expenses
Depreciation:
Computer
Other fixed assets
Interest on own capital

14,400
21,600

16,320
24,480

19,200
28,800

16,000
46,500
2,40,000

16,000
46,500
2,40,000

12,000
46,500
2,40,000

OFFICE & ADMN. COST:

[C]

7,06,500

7,21,200

7,33,000

COST OF PRODUCTION:
[A] + [B] + [C]

1,15,58,600

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)

1,28,72,900

1,48,34,100

1,97,200
1,13,61,400

1,97,200
4,24,560
1,26,45,540

4,24,560
6,68,160
1,45,90,500

72,000
2,01,000
36,000
24,000

72,000
2,27,800
40,800
27,200

72,000
2,68,000
48,000
32,000

3,33,000

3,67,800

4,20,000

1,16,94,400

1,32,40,700

1,50,10,500

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

13,58,300
51

1,72,36,500
22,26,000

11,67,100

Schedule of Raw material consumed

Particulars

Year 1

Year 2

Quantity

Amount

Quantity

Amount

Amount

PAPER IN ROLL
Opening Balance
Add: Purchase during the
year
Less: Closing Stock

8,85,000

88,50,000

10,03,000

1,00,30,000

1,18,00,000

GUM
Opening Balance
Add: Purchase during the
year
Less: Closing Stock

10,500

84,000

11,900

95,200

1,12,000

PRINTING INK
Opening Balance
Add: Purchase during the
year

6,000

Less: Closing Stock

3,90,000

6,800

4,42,000

5,20,000

MISC. CHEMICAL
Opening Balance
Add: Purchase during the
year
Less: Closing Stock

12,000
-

48,000

13,600

52

54,400
-

64,000
-

STRING
Opening Balance
Add: Purchase during the
year
Less: Closing Stock

15,000

1,05,000

17,000

TOTAL R.M. CONSUMED

1,19,000

1,40,000

94,77,000

1,07,40,600

1,26,36,000

Schedule of finished goods

Particulars

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

Year 1

Year 2

Quantity

Amount

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

Quantity

Amount

1,70,000

1,97,200

1,32,75,000

1,20,36,000

1,50,45,000

1,30,62,500

1,18,40,000

1,48,00,000

1,70,000

3,66,000

Schedule of fixed assets

Gross Block
Particulars

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

Depreciation

Opening
=+++++
+++++
Addition

Total

4,95,000
35,000
30,80,000

4,95,000
35,000
30,80,000

75,000
1,50,000
40,000

Total
Accumula
ted

Net
Block

During
the
Year

Written
Down
Value

49,500
5,250
7,70,000

49,500
5,250
7,70,000

4,45,000
29,750
23,10,000

75,000
1,50,000
40,000

11,250
22,500
16,000

11,250
22,500
16,000

63,750
1,27,500
24,000

1,00,000

1,00,000

15,000

15,000

51,000

39,75,000

39,75,000

8,82,000

8,82,000

30,51,500

53

Schedule of factory Overheads

Particulars

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

YEAR
1
Amoun
t

YEAR
2
Amoun
t

YEAR
3
Amoun
t

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

54

Schedule of selling overheads

Particulars

Salary to salesman
Freight outward
Selling expenses
Packing expenses
Total

YEAR
3
Amoun
t

YEAR 1

YEAR 2

Amount

Amount

72,000
24,000
2,01,000
36,000
3,33,000

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

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.

55

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,
56

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.
2. M/S Star Paper Mills Ltd.
Saharanpur (UP).
57

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.

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.
58

Interest on ownership capital is used for costing

purpose and is reinvested in business again every year.

CONCLUSION

59

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.

Future Plans

To use totally eco-friendly papers, which are made out of baggage and not tree.
60

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!!!

61