PROJECT REPORT

ON

PROPOSED INDUSTRIAL ESTABLISHMENT PLAN

OF

MR. DEEPAK RAJ

FOR ALLOTMENT PLOT AT

(SECTOR- 15/13, , GIDA, GORAKHPUR-273209, UTTAR PRADESH)

PREPARED BY:

VIJAY PAREEK & CO.

(Chartered Accountants)

1st Floor, Quazi-Katra Ismailpur, Sahebganj Gorakhpur -273005 (U.P.)

Contacts: 0551-2290011, +91-9621193185,+91-8318893021, +91-9532508582, Fax: 0551-2292402
Mail at: gsttaxprocess@gmail.com (GST), incometaxprocess@gmail.com(Income Tax),
ngosansar@gmail.com(NGO), cavijaypareek@gmail.com ( others)
For more details on GST visit on : www.vijaypareeknco.com
1. CONCERN DETAILS:
 Concern (Unit) Name
 Address
 Statue
 Proprietor’s Name
 Father’s Name
 Residential Address
 Qualifications
 Experience
 PAN
 Aadhar
 Proposed Business Type
 Proposed Business Activity : Manufacturing of Wooden Furnirure
 Unit Area
 Land Cost
 Machinery Cost
 Construction cost
: Mr. Deepak Raj
: Sector-13/15, GIDA, Gorakhpur-273209 (U.P.)
: Proprietorship
: Mr. Deepak Raj
: Mr. Bajrang Raj
: HN 52 Tivran Police Statiion Sahjanwa Tehsil
Sahjanwa Gorakhpur 273209
: High School
: 15 Years in the said line of activity
: BUGPR4753Q
: 210518619174
: Manufacturing Unit
: Approx 470 Sq Mtrs, (376 Sq Mtr covered, 94 Uncovered)
: 470 Sq Mtr @ 3600 Appx 31.96 Lacs ( Ch. Not Considerd)
: Approx 7.50 Lacs
: Approx 8.50 Lacs
2. INTRODUCTION ( PROJECT VIABILITY & FISIBILITY):

Popularity of traditional furniture has strengthened the demand for wood in the
manufacturing of furniture in India. Over the past few years, the utilization of wooden
goods in home has increased as people have started using wood for furnishing
cupboards, decorating and for other purposes. Apart from this, the demand for
engineered wood furniture is rising in metro cities such as Delhi, Mumbai, Bangalore
and other major cities. The reason behind this is the rising popularity of ready to
assemble home furniture in these cities.

The availability of engineered wood furniture through various distribution channels

provides ease to the customer to buy furniture products. Moreover, the demand for
modular and elegant furniture is growing in urban cities of India. The development in
housing sector and rapid growth of metro cities is changing the living standards and
lifestyle of the population. The rising trend of home décor and home furnishing with
modular and stylish furniture is the major reason behind the growth of furniture
industry in India.

Further, there are few number of market players in furniture industry, compared to
the unorganized market players. The big players include Godrej, Zuari, Durian,
Nilkamal, Featherlite and others have their good market presence in furniture industry
in India.
Wooden furniture’s are a symbol of Kerala tradition. They were used in kerala from
100s of years ago. This project is meant to setup a manufacturing unit of wooden
furniture such as Chair, Coat, windows and door etc .The unit will undertake the job
work also. The unit envisages manufacturing of wooden furniture on different designs
out of quality wood like Teak, Anjili, Rose wood etc. But mainly on teak wood.

3. KEYS TO SUCCESS/FEASIBILITY
he market is expected to expand at a CAGR of 12.91% during the forecast period of
2016-2023. India furniture market growth is driven by various attributes such as
rising trend for modular and state of the art furniture among the population living in
urban cities, growing urbanization in Indian states, rising demand for durable and
hybrid seating furniture. Moreover, the rising growth of wood industry in India
further compensates the price of furniture. On the back of these factors the furniture
industry is expected to propel in India. Further, the rising trend of online and mobile
shopping in India is envisioned to bolster the demand for furniture through online
channels.

Various furniture companies such as Pepperfry, Urban ladder and others are
creating huge demand from these online channels. Apart from this, the demand for
low cost plastic furniture is also increasing in commercial sector. The ease of
 business doing policies in India gives rise to new businesses across the country. In
addition, these increasing numbers of small and medium businesses further boost
the demand for low cost plastic furniture products. This factor is believed to foster
the growth of India furniture market over the forecast period.

Rapid urbanization in India and growing demand for modular and compact
furniture is expected to positively impact the growth of furniture market in near
future. Further, growing urbanization in Indian states such as Gujarat, Maharashtra,
Tamil Nadu and others is supporting the culture of housing societies. Moreover, the
corporate sector in India is uplifting on the back of ease of doing business reforms
introduced by the government. These factors are believed to bolster the growth of
India furniture market.

Further, growth of real estate sector in India is anticipated to boost the demand for
modular furniture in urban areas in India. Apart from this, rising investment in
retail sector by various national and international entities is anticipated to foster the
growth of furniture market in India. Moreover, the technological advancements such
as availability of high speed internet networks such as 4G and spiked absorption of
smart gadgets is boosting the e-retail sector in India. These advancements further
provide ease to the customers to buy furniture through online channels. In addition,
the rising number of smartphone users across the country and online shopping is
encouraging the furniture industry players to introduce their products through
online channels. The players such as Pepperfry, Urban ladder and others are
generating significant revenue through online platforms.

Apart from this, 100 percent FDI policy for townships and settlements development
project is attracting more foreign investors in the real estate sector which increase
the quality of residential apartments. Further, rising demand for high-end and
western style furniture is envisioned to bolster the growth of India furniture market
by the end of 2024.

However, the low cost furniture products offering by unorganized players further
decrease the revenues of major market players in India. Further, the unorganized
players sell their product through local shops which decreases the cost of branded
furniture. The high cost of quality and durable furniture in India is the major
restraint for furniture industry. The high cost of wood and leather further increase
the cost of overall furniture product.

4. MARKET:
As the furniture would not have any fixed brand or company name, therefore, there
would be less competition. The demand of wooden furniture and wooden building
materials is increasing as construction and housing industry expand. Attractive and
 genuine wooden furniture have good access in market. The demand for the
furniture made up of woods is growing due to the increased standard of living of
people and outlook. On occasions like wedding, it has become customary to gift
wooden furniture like double bed, sofa, dressing table, dining table to the daughter.
The finished products can also be sold through furniture marts

5. LAND , BUILDING, MACHINERIES ( LAND UTILIZATIONN/LAYOUT PLAN):

 LAND :
The location of the proposed business with its production unit is under estate of
Sector 13/15 of Gorakhpur Industrial Development Authority (GIDA). Total Area
Approx 470 Sq Mtr @ 3600 , within initial payment @ 25%

 BUILDING(LAYOUT PALAN):
Built up area for the plant and Machinery including, Storage s ,Raw material store, Finished
goods store, Processing section, Machinery spares store room, Panel board room , mtrs. For
other construction for office, Toilets, Security office, Tin Sheding in front of Procession and
storage, Miscellaneous space etc. 396 sq.. mtr.

Total Ares Approx: 470 Sq mtrs, Out of Which Covered Approx 396 Sq Mtrs and Uncovered
area Approx: 94 Sq Mtrs.
Construction of Industrial Building Would Cost Rs. 8.50 Lacs, Including Production
work shed , Godown and Tin shed front area.

 MACHINE:

The Proposed machine would cost Approx Rs 7.50 Laces, is easily available.
Normally it Includes 15’’combi max planner, 3 HP Single phase Motor, Blade Grinder
with motor, Hand drill machine, Sander machine, Stand type drilling machine with
motor, 12’’ planner, Rixo(mini), Leith, Cutter, Hand Tools & other small, equipments

The main items of the machinery required for the manufacture of Corrugated
Boxes are given below:
1. One 4-Bar Rotary Cutting & Creasing Machine, 75” Size
2. One Eccentric Slotter Machine, 75” Size
3. Two Stitching Machines
i) One 36” arm, Angular head
ii) One 36” arm, Straight head.
4. One Partition Slotter, Automatic Machine
5. One Single Slotting Machine, 12” Size
6. One Vertical Bending Machine, 62” Size
Total Cost of Project would cost Approx Rs. 7.50 Lacs

SL Particular Quantity Rate Amount

No 1 15’’combi max planner 2 75000 150000
2 3 HP Single Phase Motor 2 12000 24000
3 Blade Grinder with motor 2 21000 42000
4 Hand drill machine 2 24000 48000
5 Sander machine 2 28000 56000
6 Stand type drilling machine with motor 2 2000 4000
7 12’’ planner 2 40000 80000
8 Rixo(mini) 2 85000 170000
9 Leith 2 38000 76000
10 Cutter 2 15000 30000
11 Hand Tools & other small equipments etc 70000 70000

750000

 INPLEMENTATION SHEDULE:

The machines are available from supplier within one month’s period. The project can be
implemented within four month period. Subject to construction.

6. MATERIAL, PPROCESS, FINSHED GOODS:

 RAW MATERIALS :
The major raw materials required for production are Woods of different type , Plane
glass , Plane glass , Plane glass , Sun mica etc. indigenous, their availability and costs
and other inputs such as water, fuel, power etc.
 7. WORKING CAPITAL
a. Raw material required for one month

Sl.No Items Qty Rate Amount

1 Woods of different type 5Cum 50000 250000
2 Plane glass 3 No 12000 36000
3 Fevicol 25Kg 550 13750
4 Ply 200 sq ft 35 150000
5 Sun mica 200 sq ft 42 160000
Total 609750

b. wages and salaries

Sl No Designation No Rate Amount

1 Skilled Workers 10 10000 100000
2 Unkilled Workers 12 8500 102000
Total 202000

c. Utilities and Contingencies/Month

1 Power charges - Rs.24000/-

2. Miscellaneous -
Rs.5000/- Total - Rs
29000/-

Total Working Capital Requirement

1. Raw materials for one month - Rs. 609750/-

2. Wages and salaries for one month -Rs 202000
3. Utilities and contingencies for one -Rs. /-29000/-
month
Total working capital requirement of the unit -Rs 8,40,750/-

6. TOTAL CAPITAL

1. Fixed Capital - Rs. 750000

2. Working Capital( 3 months) - Rs. 840750/-
 Total capital investment - Rs 15,90,750/-

7.SOURCES OF FUNDS

1. Own Capital(20% of project cost) -Rs 490750

2. composite Loan from bank -Rs 1100000

8.COST OF PRODUCTION PER ANNUM

1. Total recurring expenditure per annum

a) Raw materials - Rs. 54,09,000/-
b) Wages and Salaries -Rs. 12,96,000/-
c) Utilities and contingencies -Rs. 1,44,000/-
2. Depreciation of machinery @15% -Rs 1,12,500/-
3. Interest on bank loan @12% -Rs
1,32,000 Total -
Rs. 70,93,500/-

9. TURNOVER PER ANNUM

Sl.No Items Qty Rate Amount

1 Furniture: Coat 350 12000 4200000
2 Building material:1. Windows 200 7000 1400000
2.Doors 180 10000 1800000
3. Chairs 150 7000 1050000

Total 8450000

1.PROFITABILITY

11 a. NET PROFIT (BEFORE TAXATION)

1 TURNOVER 8450000
2 COST OF PRODUCTION 70,93,500
Total (1-2) 706500

11.b NET PROFIT RATIO

NET PROFIT *100/TURN OVER PER

YEAR = 1356500*100/7800000
= 16.05 %

11.c RATE OF RETURN ON TOTAL INVESTMENT

NET PROFIT*100/TOTAL
INVESTMENT = 1356500*100/490750= 62.24%

12.a FIXED COST

Total Depreciation[ Machinery & furniture] Rs: 1,12,500/-

Interest on Total Investment Rs: 1,32,000/-
40 % of Salary & Wages[12,96,000*12/ 40%] Rs: 5,18,400
40% of utilities & other contingent Rs: 57,600/-
expenses[1,44,000*12/ 40%]
Total: Rs: 8,20,500

12 b BREAK- EVEN ANALYSIS

Fixed cost x 100 = 35.60%

Fixed cost + Net Profit

  PRODUCTION PROCESS:

The line of process is used for wooden furniture is made as per the measurements;
shaping, bending & chiseling as per design; finishing touch with sand paper; finally
apply varnish/paint/lamination; and furniture can be laminated using laminated
sheet.
1 The production is based on a single shift basis of 8 hours per day and working
days in a month
2 Laborer will be engaged on monthly basis keeping in view the present rate
prevailing in the market
3 Land and buildings are rented.
4 The unit will get subsidy for the power requirement as it will get registered under
MSME Act

 MANPOER/STAFFINGS:

The business enterprise needs to recruit 18 people in the various capacities for
specific roles. The enterprise will (which is inevitable and the most important)
further train and orient the recruits in their areas of work for the smooth
operations.

Category No. of person Salary per person Monthly

per month(Rs) Requirement
(Rs )
Supervisor 1 10000 10,000
Operator Skilled 9 10000 36,000
Worker
Unskilled Workers 11 8500 40,000
Accountant 1 850000 5000

 FINISHED PRODUCT:

The Finished Goods is Corrugated Kraft Paper Boxes.

Finished Furniture and Household Durables: Furniture and other household items that are
used over a long period of time that will Not undergo further processing and are ready for
sale to the final demand user, either an individual consumer or business firm. This includes
products such as lawn furniture, bedding, office furniture, carpeting, major appliances, and
home electronic equipment
Corrugated board can be classified as under :
 INSTALLED CAPACITY:
The installed capacity of the unit is about 300 MT per annum.
 UTILITIES:
Power: The power requirement is 15 KW.
Water : Water is required for human consumption only.
Manpower: Labour requirement stated above

8. POWER AND ELECTRICTY REQUIRNEMNTS:

The Proposed Machinery as mentioned in are fully electricity power supported machine
and requires electricity in operating the same having power requirement of 15 KW.

The proposed location is under the Estate of GIDA Gorakhpur, Uttar Pradesh, where
industrial electricity is available mostly.

9. WATER REQUIRMENTS :

The Proposed unit does not have much water requirements for production Apart from this
Unit want to plant trees and other beautiful greenery in front are of unit keeping in mind
the other rules and regulation provided by the authority for the same it requires water.
Unit also had requirement of water connection inside in order to supply for labors and
other personnel working in the proposed unit along with RO system.

10. POLLUTION AND ENVIROMENTL IMPACTS:

Propose Manufacturing plan total electricity consumption plant not producing any type of
Bye Products , Gases , Liquids or other Form which can harm , damage the environment in
any manner except three on details of which are as follows.

11. MEANS OF FINANCING:

The total projected cost of the business consists of startup cost and working capital.
For Machinery, Building, and other Installation a term Loan and Own Contribution
is Proposed. For the Purpose of Working Capital Requirement Cash Credit would be
proposed along with additional contribution from proprietor if required so.

Working Capital Requirements includes cost of Inventory purchases, Power, fuel,

other Utilities, freight, Delivery expenses, Payroll, Taxes, licenses, and
Administrative Cost.

12. CONCLUSION
Furniture Manufacturing Unit is a commercial production unit to be established at
Industrial Estate under Industrial Estate of GIDA Gorakhpur, Uttar Pradesh which
requires a financial investment worth of Rs. 47.96 Lacs .

Propose Manufacturing plan total electricity consumption plant not producing any type of
Bye Products , Gases , Liquids or other Form which can harm , damage the environment in
any manner except a DG set which would be latest sound proof and less carbon emission
machine.

As a forward-looking concern unit is a socially responsible firm, we would bring about

benefits to the local community and our customers. We will create employment to around
22 people and contribute to the nation’s economy in the form of taxes.

The enterprise will give satisfaction salary and allowances with commission to the
employees as they are bedrock of our business and our success depends on the level of
satisfaction they derive working in the business house.

The business house will accord top priority to our customers and deliver high quality and
timely services, and products. Through an expansive marketing strategy unit will create a
unique brand for itself. The enterprise would earn profit of 20% on an average. It is
assured and guaranteed that the enterprise would make more profit once it starts
production and marketing than as it is aforementioned. The proposed business is feasible
due to its strategic investment and operational plans.