BUSINESS PLAN

COLLECTIVE PAPER PRODUCTS

PARTNERSHIP FIRM

11-111 TELECOM COLONY SINIVASAPURAM TIRUPATHI

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S.NO DESCRIPTION PAGE NO.
1 INTRODUCTION 3
2 MISSION 3
3 VISION 3
4 WHY PAPER BAG 4
5 MARKET POTENTIAL 4
6 PRODUCTION PROCESS 7
7 PROMOTERS DETAILS 8
BASIC AND PRESUMPTION OF THE
8 PROJECT 9
9 INSPECTION AND QUALITY CONTROL 9
10 PRODUCTION CAPACITY PER ANNUM 10
11 POLLUTION CONTROL. 10
12 PLANT AND MACHINERY 11
13 COST OF THE PROJECT 12
14 MEANS OF FINANCE 12
15 REVENUE PER ANNUM 12
16 EXPENSES 13
17 GRAPHS 14
18 DEPRECIATION 15
19 INTEREST ON LOAN 16
20 PROFITABILITY STATEMENT 18
21 CASHFLOW STATEMENT 19
22 BALANCE SHEET 20

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 1. INTRODUCTION
Paper bags are common packaging materials being used by textiles
and cloth merchants, dry cleaners, bakers, grocers, stationeries, sweet
sellers etc.

The demand for paper bags has increased because the use of
polythene bags is harmful to environment.

2. MISSION
Our Mission is to create completely eco-friendly paper products and
emerge as Eco-saviors.
We strive to maintain ecological balance on this beautiful planet, by
manufacturing user friendly, biodegradable, quality products.

3. VISSION

Our Vision is to be an Eco friendly company. We aspire to be one of

the major Global Players in the manufacturing of biodegradable paper
products to serve the mankind by saving the environment.

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 4. WHY PAPER BAG
Using of Plastic bag is resulting in fertile land becoming
barren and turning into desert. From manufacture to disposal,
plastic bags are a major environmental hazard.

On the other hand, the trees needed to make paper bags are
considered renewable resources.

Bags made from paper are bio-degradable and

hence highly environment friendly than plastic bags.

5. MARKET POTENTIAL
It is necessary to recognize that in a globalized economic
environment the business outlook for any paper product will depend
on the global demand supply balance for that product. For Paper
bags there is production less capacity at a global level which was
built up over the last decade or so in response to a boom in global
growth and increased levels of awareness of eco friendly products.
The growth of the manufacturing sector will be largely influenced by
the growth consumption. A wide range of paper bags are now
produced and marketed in India. The paper bags are reckoned to be
a high potential business for India.

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Manufacturing Paper bags is the purpose of satisfying needs and wants of
Consumers is the market place.

The prospects of paper bags depend on the value of customers who utilize
it. But in our country paper bags are used by all the people as it is easy to
use, hygienic and eco-friendly. Hence, the per capita consumption has
increased and the demand for it is recognized. While the demand for paper
bags has shown a good growth, the company will be successful in
strategizing its market operations.

As paper bags are a product of daily consumption and necessity, their

marketing will not be a problem as the consumers are aware of the
advantages of using paper bags. The raw materials are indigenously
available and the manufacturing process is also simple.

“COLLECTIVE PAPER PRODUCTS” has decided to market their

PAPER BAGS to textiles and cloth merchants, dry cleaners, bakers, grocers,
stationeries, sweet sellers, Shops, Paper Product Dealers, Super Markets
etc.

“COLLECTIVE PAPER PRODUCTS” has made marketing survey and

potential for our product and had very good responses. We have the
regular market for our manufacturing capacity. In future “COLLECTIVE
PAPER PRODUCTS” will increase the capacity to meet the demand of our
product. So it will not be a difficult to find market for paper bags in this
growing paper product industry.

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The increasing demand is being vast, thrust for the development of this industry
is very big. “COLLECTIVE PAPER PRODUCTS” will assimilate novel and
innovative methods to improve its competitiveness for its growth and contribute
to the country. In conclusion, I would like to stress that present status of the
industry is in very good scope and this industry will provide ample employment
opportunities to the underprivileged of our society. Therefore to sum up the
setting up of “PAPER BAG” manufacturing unit is predictable and feasible for its
marketing aspect

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 6. PRODUCTION PROCESS
 Place the paper roll in input & set the size of paper as per the requirement
with the help of gears and plates.
 Paper bag of Set size will produce, Print the object in same Machine And
came out at output place.
 Paste both size of paper bag through Gum.
 Cutting of handle/ Punching the paper bag
 Eyelet fitting
 Lace fitting

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 7. PROMOTERS DETAILS
NAME AND ADDRESS OF PROMOTER(S):
1. Name : B VENKATA MOHAN
Address : 19-14-172, 6TH Cross, Raghavendra Nagar,
Kesavayanagunta,
Tirupati-517501
Phone : 9849988679
Designation : PARTNER
Category : OBC
E-mail : s vecon@gmail.com
EDUCATIONAL QUALIFIACTIONS: B.TECH civil engineer
Work Experience: Contractor for 13years
2. Name: P SIVA KUMAR
Address :1-8-10/1A, Mahadevapuram, Kandukur, Prakasam
District, Andhra Pradesh - 523105 Phone : 7997967366
Designation : PARTNER
Category : OBC
E-mail: panitapushiva@gmail.com
Educational Qualifications: B.com

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 Work Experience: Accounts Manager for 10years

8. BASIS AND PRESUMPTION OF THE

PROJECT :

 The process of manufacture is on the basis of double shift of eight + eight

hours per day with three hundred working days in a year.
 Labor and wages mentioned in profile are as per prevailing local rates.
 Interest rate at 12% considered in the project
 The Promoter contribution will be 30% of the total project cost. However it
may be vary for women entrepreneurs.
 The capacity of the plant 500 nos. of paper bags per day on the double shift
basis.

9. INSPECTION AND QUALITY CONTROL:

“COLLECTIVE PAPER PRODUCTS” will strictly adhere to the
International FDA standards and Indian BIS standards in the process of
manufacturing Paper Bags from procuring high quality food grade raw
materials to hygienic methods of packaging, as we know that the
satisfaction of the customers is the foundation of any business.

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 10. PRODUCTION CAPACITY PER
ANNUM:

Quantity: 500 kgs. of paper bags per day, 150000 kgs. of paper
bags per annum (300 days)

11. POLLUTION CONTROL

The technology adopted for making paper bags is eco-friendly.

Bag forming process is totally automatically done by the machine,
only feeding and packaging involves manual work. The scrap papers
created out of this manufacturing process also can be sold for
recycled paper converters. Hence there is no chance of any pollution
out of this industry.

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12. PLANT AND MACHINERY:
o Automatic Paper bag making machine
o Punching machine
o Cut handle machine
o Electronic Weighting Machine
o Office Equipment table
o Computers & Laptops

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 COLLECTIVE PAPER PRODUCTS
PARTNERSHIP FIRM
11-111 TELECOM COLONY, SRINIVASAPURAM
TIRUPATI 517501

PROJECT REPORT FOR MANUFACTURING OF PAPER PRODUCTS

S.NO COST OF THE PROJECT: TOTAL

Rs.
1 LAND 35,00,000
2 BUILDING 10,00,000
3 MACHINERY 40,00,000
4 INSTALATION OF MACHINERY 2,00,000
5 COMPUTERS/LAPTOPS 1,00,000
6 FURNITURE&FIXTURES 1,00,000
7 WORKING CAPITAL 15,00,000
TOTAL : 10400000.00

S.NO MEANS OF FINANCE: TOTAL

1 Partners Contribution (each 50%) 3120000.00

2 Term Loan 7280000.00

TOTAL : 10400000.00

I REVENUE PER ANNUM : Rate Qty Units Per Annum

Rs.
(a) Gross Sales per annum estimated at Rs. 100 150000 kg 15000000

TOTAL SALES PER ANNUM Rs. 15000000

 II DIRECT EXPENSES : Per Annum
Rs.
(a) Raw Materials 6000000
(b) Salaries & Wages 720000
(c) Electricity Charges 168000
(d)Repairs & Maintenance 175500
(e) Freight Charges 534000
(f) Stores & Consumables etc., 225000

TOTAL DIRECT EXPENSES PER ANNUM Rs. 7822500

III ADMINISTRATIVE EXPENSES : Per Annum

Rs.
(a) Salaries 600000
(b) Audit fees 200000
(c) Transport Charges 100000
(d) Printing & Stationery 10000
(e) Rates & Taxes 75000
(f) Vehicle Maintenance 50000
(g) Miscellaneous Expenses 50000

TOTAL ADMN. EXPENSES PER ANNUM Rs. 1085000

Notes :
1. Adminstration Expenses are increased at 10% every year.
2. Interest on Bank Loan is taken @12% P.A. for projected profitablity statement.
NET PROFIT TO SALES
 DEPRECIATION SCHEDULE FOR FIVE YEARS

Rs.In '000
NAME OF THE Furnitures Computers TOTAL
& Fixtures & Plant &
ASSETS land Building laptops Machinery

RATE OF DEP. 0% 10% 10% 40% 15%

3500.00 1000.00 100.00 100.00 4200.00
Cost of the Asset :
Total Cost : 3500.00 1000.00 100.00 100.00 4200.00
First Year:
Depreciation 0.00 100.00 10.00 40.00 630.00 780.00
W.D.V. 3500.00 900.00 90.00 60.00 3570.00
Second Year:
Depreciation 0.00 90.00 9.00 24.00 535.50 658.50
W.D.V. 3500.00 810.00 81.00 36.00 3034.50
Third Year:
Depreciation 0.00 81.00 8.10 14.40 455.18 558.68
W.D.V. 3500.00 729.00 72.90 21.60 2579.33
Fourth Year:
Depreciation 0.00 72.90 7.29 8.64 386.90 475.73
W.D.V. 3500.00 656.10 65.61 12.96 2192.43
Fifth Year:
Depreciation 0.00 65.61 6.56 5.18 328.86 406.22
W.D.V. 3500.00 590.49 59.05 7.78 1863.56
 // 2 //
DETAILS OF INTEREST ON BANK TERM LOAN AND REPAYMENT
SCHEDULE FOR FIVE YEARS (EMI)
(Rs. in 000's)
NO.OF MONTHS / LOAN CUMULATIVE INTEREST PRINCIPLE AMOUNT
MON YEAR RELEASE BALANCE 12.00% PAID PAID

1 1st Month 7280.00 7280.00 72.80 89.14 161.94

2 2nd Month 7190.86 71.91 90.03 161.94
3 3rd Month 7100.83 71.01 90.93 161.94
4 4th Month 7009.90 70.10 91.84 161.94
5 5th Month 6918.06 69.18 92.76 161.94
6 6th Month 6825.30 68.25 93.69 161.94
7 7th Month 6731.61 67.32 94.62 161.94
8 8th Month 6636.99 66.37 95.57 161.94
9 9th Month 6541.42 65.41 96.53 161.94
10 10th Month 6444.89 64.45 97.49 161.94
11 11th Month 6347.40 63.47 98.47 161.94
12 12th Month 6248.93 62.49 99.45 161.94
Ist YEAR TOTAL : 812.76 1130.52 1943.28
13 1st Month 6149.48 61.49 100.45 161.94
14 2nd Month 6049.04 60.49 101.45 161.94
15 3rd Month 5947.59 59.48 102.46 161.94
16 4th Month 5845.12 58.45 103.49 161.94
17 5th Month 5741.63 57.42 104.52 161.94
18 6th Month 5637.11 56.37 105.57 161.94
19 7th Month 5531.54 55.32 106.62 161.94
20 8th Month 5424.92 54.25 107.69 161.94
21 9th Month 5317.23 53.17 108.77 161.94
22 10th Month 5208.46 52.08 109.86 161.94
23 11th Month 5098.60 50.99 110.95 161.94
24 12th Month 4987.65 49.88 112.06 161.94
2nd Year TOTAL : 669.38 1273.90 1943.28
25 1st Month 4875.59 48.76 113.18 161.94
26 2nd Month 4762.40 47.62 114.32 161.94
27 3rd Month 4648.09 46.48 115.46 161.94
28 4th Month 4532.63 45.33 116.61 161.94
29 5th Month 4416.01 44.16 117.78 161.94
30 6th Month 4298.23 42.98 118.96 161.94
31 7th Month 4179.27 41.79 120.15 161.94
32 8th Month 4059.13 40.59 121.35 161.94
33 9th Month 3937.78 39.38 122.56 161.94
34 10th Month 3815.22 38.15 123.79 161.94
35 11th Month 3691.43 36.91 125.03 161.94
36 12th Month 3566.40 35.66 126.28 161.94
3rd Year TOTAL : 507.97 1435.46 1943.28
37 1st Month 3440.13 34.40 127.54 161.94
38 2nd Month 3312.59 33.13 128.81 161.94
39 3rd Month 3183.77 31.84 130.10 161.94
40 4th Month 3053.67 30.54 131.40 161.94
41 5th Month 2922.27 29.22 132.72 161.94
42 6th Month 2789.55 27.90 134.04 161.94
43 7th Month 2655.51 26.56 135.38 161.94
44 8th Month 2520.12 25.20 136.74 161.94
45 9th Month 2383.38 23.83 138.11 161.94
46 10th Month 2245.28 22.45 139.49 161.94
47 11th Month 2105.79 21.06 140.88 161.94
48 12th Month 1964.91 19.65 142.29 161.94
4th Year TOTAL : 325.77 1617.51 1943.28
49 1st Month 1822.62 18.23 143.71 161.94
50 2nd Month 1678.90 16.79 145.15 161.94
51 3rd Month 1533.75 15.34 146.60 161.94
52 4th Month 1387.15 13.87 148.07 161.94
53 5th Month 1239.08 12.39 149.55 161.94
54 6th Month 1089.53 10.90 151.04 161.94
55 7th Month 938.49 9.38 152.56 161.94
56 8th Month 785.93 7.86 154.08 161.94
57 9th Month 631.85 6.32 155.62 161.94
58 10th Month 476.23 4.76 157.18 161.94
59 11th Month 319.05 3.19 158.75 161.94
60 12th Month 160.30 1.60 160.30 161.91

5th Year TOTAL : 120.74 1822.62 1943.25

 PROJECTED PROFITABILITY STATEMENT FOR FIVE YEARS.
Rs.In' 000
PARTICULARS 31.03.2021 31.03.2022 31.03.2023 31.03.2024 31.03.2025
Utilisation of Capacity 70% 80% 85% 90% 95%
1. GROSS RECEIPTS :
1) Gross Sales Per Annum 10500.00 12000.00 12750.00 13500.00 14250.00

TOTAL RECEIPTS ( A ) : 10500.00 12000.00 12750.00 13500.00 14250.00

II. EXPENSES :
1 Direct Expenses
(a) Raw Materials 4200.00 4800.00 5100.00 5400.00 5700.00
(b) Salaries & Wages 504.00 576.00 612.00 648.00 684.00
(c) Electricity Charges 117.60 134.40 142.80 151.20 159.60
(d)Repairs & Maintenance 122.85 140.40 149.18 157.95 166.73
(e) Freight Charges 373.80 427.20 453.90 480.60 507.30
(f) Stores & Consumables etc., 157.50 180.00 191.25 202.50 213.75
2) Admn. Expenses 1085.00 1139.25 1196.21 1256.02 1318.82
3) Interest on term loan 812.76 669.38 507.97 325.77 120.74
3) Depreciation 780.00 658.50 558.68 475.73 406.22

TOTAL EXP. : ( B ) : 8153.51 8725.13 8911.98 9097.77 9277.16

III. Net Profit ( A - B ) 2346.49 3274.87 3838.02 4402.23 4972.84

IV. Income Tax 703.95 982.46 1151.41 1320.67 1491.85

V. Net Profit after Tax 1642.54 2292.41 2686.61 3081.56 3480.99

 PROJECTED CASHFLOW STATEMENT FOR FIVE YEARS
Rs.In' 000
PARTICULARS 31.03.2021 31.03.2022 31.03.2023 31.03.2024 31.03.2025

1. CASH IN FLOW:
1) Proprietor's Capital 3120.00 - - - -
2) Term loan 7280.00
3) Net Profit After Tax 1642.54 2292.41 2686.61 3081.56 3480.99
Add:Back
Interest on term Loan 812.76 669.38 507.97 325.77 120.74
Depreciation 780.00 658.50 558.68 475.73 406.22
Income tax 703.95 982.46 1151.41 1320.67 1491.85
TOTAL ( A ) : 14339.25 4602.75 4904.66 5203.73 5499.80

II. CASH OUT FLOW:

1) Plant & Machinery 10400.00 - - - -
2) Income tax 703.95 982.46 1151.41 1320.67 1491.85
3) Drawings 50.00 100.00 150.00 200.00 250.00
4) Term loan repayment
Interest 812.76 669.38 507.97 325.77 120.74
Principal 1130.52 1,273.90 1,435.46 1,617.51 1,822.62

TOTAL( B ) : 13097.23 3025.74 3244.83 3463.95 3685.21

Opening Balance 0.00 1242.02 2819.03 4478.86 6218.64

Surplus ( A - B ) 1242.02 1577.01 1659.83 1739.78 1814.59

CLOSING BALANCE : 1242.02 2819.03 4478.86 6218.64 8033.23

 PROJECTED BALANCE SHEET AS ON FOR FIVE YEARS
Rs.In' 000
PARTICULARS 31-03-2021 31-03-2022 31-03-2023 31-03-2024 31-03-2025

I. CASH IN FLOW:
a. Proprietor's Capital 3120.00 4712.54 6904.95 9441.56 12323.12
d. Net Profit after Tax 1642.54 2292.41 2686.61 3081.56 3480.99
Less : Drawings 50.00 100.00 150.00 200.00 250.00
4712.54 6904.95 9441.56 12323.12 15554.11
b. Bank Term Loan 6149.48 4875.59 3440.13 1822.62 - - -

TOTAL ( A ) : 10862.02 11780.53 12881.69 14145.74 15554.11

II. CASH OUT FLOW:

Fixed Assets:
Plant & Machinery 3570.00 3034.50 2579.33 2192.43 1863.56
Land 3500.00 3500.00 3500.00 3500.00 3500.00
Building 900.00 810.00 729.00 656.10 590.49
Furniture and fixtures 90.00 81.00 72.90 65.61 59.05
Computers&Laptop 60.00 36.00 21.60 12.96 7.78
Current Assets:
Cash & cash equivalence 2742.02 4319.03 5978.86 7718.64 9533.23
TOTAL( B ) : 10862.02 11780.53 12881.69 14145.74 15554.11