business proposal

1. My business plan
On
PREPARED BY: GUIDED BY:
Lalji V. Vastarpara Dr. Rajesh Patel
Roll No.: 100 Directors of NRVIBMS
MBA Sem. III Junagadh
.

2. INDEX
SR. PARTICULAR PAGE
NO . NO.
1. Introduction 04
2. Project at a glance 05
3. Implementation Schedule 06
4. Management Setup 07
5. Organization Structure 08
6. Justification of Location 09
7. Product Detail 11
8. Market potential 12
9. Raw Materials 13
10. Machines 14
11. Manufacturing Process 15
12. Production Capacity Schedule 17
13. Staff & Labour 18
14. Financial Details 19
15. Cost of Production 22
16. Total Working Capital Requirement 23
17. Total Project Fund 24
18. Sources of Finance 24
19. Interest on Capital 24
20. Depreciation 25
21. Annual Cost of Production 25
22. Sales Forecast (5 years) 26
23. Fixed & Variable Cost Schedule 26
24. Break-Even Analysis 28
25. Term Loan Repayment 30
26. Cost of Capital 31
2

3. 27. Return on Investment 31
28. Profitability 32
29. Projected Operating Statement 33
30 Projected Trading A/c 35
31. Projected Profit & Loss A/c 38
32 Projected Balance Sheet 44
33 Projected Cost Sheet 47
34 Schedule of Raw Material Consumed 49
35. Schedule of Finished Goods 50
36. Schedule for Fixed assets 50
37. Schedule for Factory Overheads 51
38. Schedule for Selling & Administration 51
Overheads
39. Risk Factors 52
40. Name & Add. Of Machinery & 53
Equipment Supplier
41. Name & Add. Of Raw Material 54
Supplier
42. Disclosure of Significant Accounting 55
Policies
43. Conclusion 56
44. Future Plans 57
3

4. 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.
4

5. PROJECT AT A GLANCE
Name of the Unit Sav-“E” Paper Bags
Registered Office Plot No. 228, GIDC,
Lodhika,
Kalawad Road,
Metoda,
Rajkot-360 005.
Location of the Unit Plot No. 228, GIDC,
Lodhika,
Kalawad Road,
Metoda,
Rajkot-360 005.
Form of Organization Partner’s firms
Name of Owner Lalji Vastarpara
Milan Dudani
Dhanraj Gediya
Name of Product Sav-E Paper Bags
Size of the Unit Small Scale
SSI Registration Number Applied for
Subsidy Registration No Applied for
Cost of Project Rs. 75,00,000
Means of Finance HDFC Bank
Shrinathji Investments
Own Capital
Cost of Capital 9.8%
Return on Investment 16.13%
IMPLEMENTATION SCHEDULE
5

6. The major activities in the implementation of the project have been
listed and the average time for implementation is estimated at 8 months.
No. Particulars Months
1. Scheme Preparation & Approval 1
2. SSI Provisional Registration 1-2
3. Sanction of loan by financial institution 2
4. Installation of Machinery 2-3
5. Procurement of Raw material 1
6. Recruitment of technical personnel 1
Provision of other facilities like water,
7. 1
electricity etc.
MANAGEMENT SETUP
6

7. (Partner’s Background)
Name Lalji Vastarpara
Age 22 Years
Address To: Veraval Ta: jasdan
Dist: Rajkot Pin No.364490
Academic Qualification MBA (Finance)
Role in the Unit Marketing
Financial Contribution 40% of Owned Capital
Name Milan Dudani
Age 22 Years
Address To: Gondal Ta: Gondal
Dist: Rajkot
Academic Qualification MBA (Marketing)
Role in the Unit Marketing
Financial Contribution 30% of Owned Capital
Name Dhanraj Gediya
Age 22 Years
Address To: Chalala Ta: Amareli
Dist: Amareli
Academic Qualification MBA (Finance)
Role in the Unit Marketing
Financial Contribution 30% of Owned Capital
ORGANISATION STRUCTURE
7

8. Owner
Production Personnel Marketing Finance
Manager Manager Salesman Accountant
Workers Workers Workers Workers
JUSTIFICATION OF LOCATION
8

9. Location plays an important role in starting industry. Before
starting any industry entrepreneurs have to take a decision about the
location of industry. They have to select that location where all the
facilities must be available. They have to take right decision about the
selection of location because once a location selected it cannot be
changed in the near future. The following should be taken into
consideration.
1. Availability of market: -
Market plays an important role in the selection of location. Market
should be near to the industry so; the immediate sale of product is
possible. It also help in reduction of cost by reducing storing of
finished good, avoid the cost of transportation etc.
2. Availability of Labour: -
Without manpower no one can start his or her industry. If you have
a machine but not manpower you cannot start your industry. So,
Labour should be available at cheap rate.
3. Availability of transport: -
It is required for assembling of raw material & distribution of
finished product. So, all type of transportation facility should be
available.
4. Availability of power & water: -
Power & water is pre-requirement of an industry. So, the facility of
power & water must be sufficiently available.
9

10. Thus, all the above factors justify the selection of the
location. So, the selection would definitely contribute to the
profitability.
Metoda
METODA Highway
G.I.D.C Mani
Dwip
Temple
“SAV – E
Paper bags”
Atul
Marbles
Pvt Ltd.
10

11. PRODUCT DETAILS
P 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.
p PRODUCT’S 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.
a 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.
PRODUCT’S 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.
v BRAND NAME:-
11

12. 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
semi-urban & rural areas are creating additional demand for paper bags,
paper bags manufacturer, therefore, may be taken up as a profitable
manufacturing activity in selected areas.
Before some time people are using plastic bags. But now a days
people are realize that plastic bags are harmful to the nature. Because
we can produce plastic bags but we cannot destroy it. So, now a day
people are moving toward to use a paper bags rather than plastic bags.
So it is highly demanded and profitable product.
12

13. 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:
a Paper in roll
P Gum
G Printing ink
P Misc. chemical
M String
13

14. MACHINES
M Automatic paper bag machine - 3 Nos.
A Stereo Press - 2 Nos.
S Stereo Grinder - 2 Nos.
S Roll Slitter motorized with 2 HP packing machine - 2 Nos.
R Testing equipment - 1 No.
T Punching Machine - 1 No.
14

15. 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
15

16. 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.
16

17. PRODUCTION CAPACITY SCHEDULE
Production Capacity 1,06,20,000 Units
No. of Working Days in a month 25
No. of Working Days in a Year 300
No. of Shifts per day 1
No. of Working hours per shift 8
Production Capacity per month 8,85,000 Units
17

18. STAFF & LABOUR
No. Staff & Labour No.
1. Factory Staff
 Skilled 4
 Unskilled 6
2. Technical Supervisor 1
3. Clerk cum typist 1
4. Accountant 1
5. Peon cum Watchman 1
6. Salesman 2
7. Manager 1
8. Peon cum watchman 1
18

19. 19

20. FIXED ASSETS
Land
Particulars Sq.mts. Rate(Rs.) Total Cost
Land 400 1100 4,40,000
Building
Particulars Sq.mts. Rate(Rs.) Total Cost
Building 275 1800 4,95,000
Plant & Machinery
Name Qty. Rate Total Cost
Automatic Paper bag 3 5,00,000 15,00,000
machine
Stereo Press 2 2,50,000 5,00,000
Stereo Grinder 2 3,50,000 7,00,000
Roll Slitter 1 2,50,000 2,50,000
Testing Equipment 1 80,000 80,000
Punching Machine 1 50,000 50,000
20

21. Other Assets
Particulars Qty. Rate Total Cost
Furniture & Fixtures - 1,50,000 1,50,000
Electrification
Installation Charges - 75,000 75,000
Computer 1 40,000 40,000
Telephone 2 15,000 30,000
Fax machine 2 15,000 30,000
Boundary wall & Gate 1 35,000 35,000
Total Fixed Assets
NO. PARTICULAR AMOUNT
1. Land (400 Sqm @ Rs.1100) 4,40,000
2. Building (275 Sqm @ Rs.1800) 4,95,000
3. Boundary Wall & Gate 35,000
4. Plant & Machinery
 Automatic Paper Bag 15,00,000
 Stereo Press 5,00,000
 Stereo Grinder 7,00,000
 Roll Slitter 2,50,000
 Testing Equipment 80,000
 Punching Machine 50,000
5. Furniture & Fixtures 1,50,000
6. Electrification & Installation Charges
75,000
7. Computer, Telephones & Fax Machine 1,00,000
Total 43,65,000
21

22. COST OF PRODUCTION
Raw Material
Rate Req. per Req. per
Particulars Req. per year
Per kg. day month
Paper in roll 10 2,950 73,750 8,85,000
Total (Rs.) 29,500 7,37,500 88,50,000
Gum 8 35 875 10,500
Total (Rs.) 280 7,000 84,000
Printing Ink 65 20 500 6,000
Total (Rs.) 1,300 32,500 3,90,000
Misc. Chemical 4 40 1,000 12,000
Total (Rs.) 160 4,000 48,000
String 7 50 1,250 15,000
Total (Rs.) 350 8,750 1,05,000
Net Total 7,89,750 94,77,000
Staff & Labour
Particulars No. Rate P.M. P.A.
Factory Staff
 Skilled 4 2,000 8,000 96,000
 Unskilled 6 1,800 10,800 1,29,600
Technical Supervisor
1 5,000 5,000 60,000
Salesman 2 3,000 6,000 72,000
Manager 1 7,000 7,000 84,000
Clerk cum typist 1 2,500 2,500 30,000
Accountant 1 3,500 3,500 42,000
Peon cum Watchman
1 2,000 2,000 24,000
Total 44,800 5,37,600
22

23. Other Expenses & Utilities
Sr. Particulars P.M. P.A.
1. Electricity 17,000 2,04,000
2. Water Charges 1,500 18,000
3. Postage & Telegram 2,000 24,000
4. Stationery 1,200 14,400
5. Repairs 2,000 24,000
6. Telephone Expense 1,800 21,600
7. Transport
 inward 2,000 24,000
 outward 2,000 24,000
8. Packing 3,000 36,000
9. Miscellaneous Exp. 2,000 24,000
10. Audit Fees 21,500
11. Professional Tax 1,000
12. Legal Fees 15,500
13. Insurance 1,02,000
14. Selling Exp. 16,750 2,01,000
Total 51,250 7,55,000
COST OF PRODUCTION
Sr. Particulars P.M. P.A.
1. Raw Material 7,89,750 94,77,000
2. Staff & Labour 44,800 5,37,600
3. Other Expenses 51,250 7,55,000
Total 8,85,800 1,07,69,600
TOTAL WORKING CAPITAL REQUIREMENT
Sr. Particulars P.M. P.A.
1. Raw Material 7,89,750 94,77,000
2. Staff & Labour 44,800 5,37,600
3. Other Expenses 51,250 7,55,000
Total 8,85,800 1,07,69,600
23

24. TOTAL PROJECT FUND
Sr. Particulars Amount
1. Fixed Cost 43,65,000
2. Working Capital (2 months) 16,75,550
Total 60,40,550
SOURCES OF FINANCE
Sr. Particulars Rate Amount
1. Own Capital (40%) 8% 30,00,050
2. Borrowed Capital (60%)
 HDFC
 Shrinathji Investments 12% 22,50,000
10% 22,50,000
Total 75,00,000
INTEREST ON CAPITAL
Sr. Particulars Rate Amount
1. Own Capital (40%) 8% 2,40,000
2. Borrowed Capital (50%)
 HDFC
 Shrinathji Investments 12% 2,70,000
10% 2,25,000
Total 7,35,000
DEPRECIATION
24

25. Sr. Particulars Value Amount
1. Building (10%) 4,50,000 49,500
2. Plant & Machinery (25%) 30,80,000 7,70,000
3. Other Fixed Assets (15%) 3,10,000 46,500
4. Computer (40%) 40,000 16,000
Total 8,82,000
ANNUAL COST OF PRODUCTION
Sr. Particulars Amount
1. Raw Material 94,77,000
2. Recurring Expenses 12,92,600
3. Depreciation 8,82,000
4. Interest on Investment 7,35,000
Total 1,23,86,600
Sales Forecast
25

26. Year Units/annum Rate/unit Amt.(Rs.)
1 1,04,50,000 1.25 1,30,62,500
2 1,18,40,000 1.25 1,48,00,000
3 1,39,50,000 1.25 1,74,37,500
4 1,42,00,000 1.50 2,13,00,000
5 1,45,50,000 1.50 2,18,25,000
Schedule of fixed & variable cost
Variable Fixed
Particulars cost cost
Amount Amount
Depreciation - 8,82,000
Int. on capital - 7,35,000
Salary 3,22,560 2,15,000
Other expenses 4,53,000 3,02,000
Raw Materials 94,77,000 -
TOTAL 1,02,52,560 21,34,000
26

27. FIXED COST
Particulars Amount
Depreciation 8,82,000
Interest on capital 7,35,000
Salary (40%) 2,15,040
Other Expenses (40%) 3,02,000
Total 21,34,040
Fixed cost/unit
= Total Fixed Cost/Total no. of units
= 21,34,040/1,06,20,000
= 0.20 ps. /unit
VARIABLE COST
Particulars Amount
Raw Materials 94,77,000
Salary (60%) 3,22,560
Other Expenses (60%) 4,53,000
Total I,02,52,560
Variable cost/unit
= Total Variable Cost/ Total no. of units
27

28. = 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
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
28

29. = 73,58,759 bags
B.E.P. (Rs.)
= B.E.P. x S.P./unit
= 73,58,759 x 1.25
= Rs.91,98,449
P. V. Ratio
= Contribution per unit / Sales X 100
= 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
29

30. = Fixed Assets/ Sales X 100
= 43,65,000/1,28,61,500 X100
= 33.94%
LOAN REPAYMENT SCHEDULE
HDFC
Installmen
Period Opening Balance t Closing Balance Interest
1st Year 22,50,000 2,25,000 20,25,000 2,70,000
2nd Year 20,25,000 2,25,000 18,00,000 2,43,000
3rd Year 18,00,000 2,25,000 15,75,000 2,16,000
4th Year 15,75,000 2,25,000 13,50,000 1,89,000
5th Year 13,50,000 2,25,000 11,25,000 1,62,000
6th Year 11,25,000 2,25,000 9,00,000 1,35,000
7th Year 9,00,000 2,25,000 6,75,000 1,08,000
8th Year 6,75,000 2,25,000 4,50,000 81,000
9th Year 4,50,000 2,25,000 2,25,000 54,000
10thYear 2,25,000 2,25,000 0 27,000
SHRINATHJI INVESTMENTS
Installmen
Period Opening Balance t Closing Balance Interest
1st Year 22,50,000 1,50,000 21,00,000 2,25,000
2nd Year 21,00,000 1,50,000 19,50,000 2,10,000
3rd Year 19,50,000 1,50,000 18,00,000 1,95,000
4th Year 18,00,000 1,50,000 16,50,000 1,80,000
5th Year 16,50,000 1,50,000 15,00,000 1,65,000
6th Year 15,00,000 1,50,000 13,50,000 1,50,000
7th Year 13,50,000 1,50,000 12,00,000 1,35,000
8th Year 12,00,000 1,50,000 10,50,000 1,20,000
9th Year 10,50,000 1,50,000 9,00,000 1,05,000
10thYear 9,00,000 1,50,000 7,50,000 90,000
11thYear 7,50,000 1,50,000 6,00,000 75,000
30

31. 12thYear 6,00,000 1,50,000 4,50,000 60,000
13thYear 4,50,000 1,50,000 3,00,000 45,000
14thYear 3,00,000 1,50,000 1,50,000 30,000
15thYear 1,50,000 1,50,000 0 15,000
Cost of Capital
Cost of owner’s 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
= 12,09,900 / 75,00,000 X 100
= 16.13%
31

32. PROFITABILITY ANALYSIS
Particulars Amount
Sales 1,28,61,500
Less: Cost of Production 1,61,51,600
E.B.I.T. 12,09,900
Less: Interest on Capital 7,35,000
E.B.T. 4,74,900
Less: Tax 88,970
Net Profit after tax 3,85,930
32

33. PROJECTED OPERATING STATEMENT
1st Year 2nd Year 3rd Year
Amount
Particulars (Rs.) Amount (Rs.) Amount (Rs.)
1,28,61,50
SALES: [A] 0 1,45,99,000 1,72,36,500
Cost Of Operation:
Raw Materials 94,77,000 1,07,40,600 1,26,36,000
Direct Wages to Workers:
Skilled 96,000 96,000 96,000
Unskilled 1,29,600 1,29,600 1,29,600
Direct expenses &
utilities:
Electricity 2,04,000 2,31,200 2,72,000
Freight inward 18,000 20,400 24,000
Water charges 24,000 27,200 32,000
99,48,600 1,12,45,000 1,31,89,600
Opening stock of
Add: R/M - - -
Opening stock of
F/G - 1,97,200 4,24,560
Less Closing stock of
: R/M - - -
Closing stock of
F/G 1,97,200 4,24,560 6,68,1608
Total Cost Of 1,10,17,64 1,29,46,00
Operation: [B] 97,51,400 0 0
GROSS PROFIT: [A - B] 31,10,100 35,81,360 42,90,500
33

34. Indirect Expenses:
Total factory cost 9,03,500 9,06,700 9,11,500
Total office &
admn. cost 7,06,500 7,21,200 7,15,000
Total selling &
dist. cost 3,33,000 3,67,800 4,20,000
Total Indirect
Expenses: 19,43,000 19,95,700 20,46,500
Earning Before Interest &
Tax
(Gross profit - Total
11,67,100
indirect expenses) 15,85,660 22,44,000
Less
: Interest
on
Borrowed Capital 4,95,000 4,53,000 4,11,000
Earning Before Tax
(E.B.I.T - Interest) 6,72,100 11,32,660 18,33,000
Less
: Tax 1,58,930 2,86,298 4,96,400
NET PROFIT AFTER
TAX:
(Earning Before Tax - 5,49,170
Tax) 8,46,362 13,36,600
34

35. Projected Trading A/c (1st Year)
Amount
Particulars (Rs.) Particulars Amount (Rs.)
To Purchase
A/c 94,77,000 By Sales A/c 1,28,61,500
To
Electricity III By Closing stock
Phase A/c 2,04,000 A/c 1,97,200
To Freight
Inward A/c 24,000
To Water
charges A/c 18,000
To Salary A/
c:
Skilled 96,0
Labour 00
Unskille 1,29,6
d Labour 00 2,25,600
To Gross Profit 31,10,100
1,30,58,700 1,30,58,700
35

36. Projected Trading A/c (2nd Year)
Amount
Particulars (Rs.) Particulars Amount (Rs.)
To
opening
stock
1,97,200
To
Purchase
A/c 1,07,40,600 By Sales A/c 1,45,99,000
To
Electricity
III Phase By Closing stock
A/c 2,31,200 A/c 4,24,560
To Freight
Inward A/
c 27,200
To Water
charges A/
c 20,400
To Salary
A/c:
Skilled 1,29,6
Labour 00
Unskilled
Labour 96,000 2,25,600
To Gross Profit 35,81,360
1,50,23,560
36 1,50,23,560

37. Projected Trading A/c (3rd Year)
Amount Amount
Particulars (Rs.) Particulars (Rs.)
To
opening
stock
4,24,560
To
Purchase 1,26,36,00
A/c 0 By Sales A/c 1,72,36,550
To
Electricity
III Phase
A/c 2,72,000 By Closing stock A/c 6,68,160
To Freight
Inward A/c 32,000
To Water
charges A/
c 24,000
To Salary
A/c:
Skilled 1,29,60
Labour 0
Unskille
d Labour 96,000 2,25,600
To Gross Profit 42,90,550
1,79,04,71 1,79,04,71
0 0
37

38. Projected Profit & Loss A/c (1st Year)
Amount Amount
Particulars (Rs.) Particulars (Rs.)
To
T gross
o Salary A/c: profit 31,25,400
General Mgr 84,000
Tech.
Supervisor 60,000
Accountants 42,000
Salesman 72,000
Peon 24,000
Clerk 30,000 3,12,000
T Depreciation
o :
Building 49,500
Plant &
Mach. 7,70,000
Other fixed
asset 46,500
Computers 16,000 8,82,000
T
o 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 & 24,000
38

39. Courier
Professional
Tax 1,000
Rep. & Other
exp 24,000
Statio &
Print. 14,400
Telephone
Bill 21,600 5,09,000
T Interest on borrowed
o capital 4,95,000
T
o Loan Installment A/c 3,75,000
T
o Income Tax 1,07,630
T NET
O PROFIT 4,44,770
31,25,400 31,25,400
39

40. Projected Profit & Loss A/c (2nd Year)
Amount Amount
Particulars (Rs.) Particulars (Rs.)
To
Gros
s
To Salary A/c: profit 35,81,360
General Mgr 84,000
Tech.
Supervisor 60,000
Accountants 42,000
Salesman 72,000
Peon 24,000
Clerk 30,000 3,12,000
Depreciation
To :
Building 49,500
Plant & 7,70,00
Mach. 0
Other fixed
asset 46,500
Computers 16,000 8,82,000
To Indirect Exp.:
Audit Fees 22,500
2,27,80
Selling Exp. 0
Misc. Exp. 27,200
Freight
Outward 27,200
Insurance 1,02,00
Exp. 0
40

41. 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 5,61,700
Interest on borrowed
To capital 4,53,000
To Loan Installment A/c 3,75,000
To Income Tax 2,49,848
T NET
O PROFIT 7,47,812
35,81,36
0 35,81,360
41

42. Projected Profit & Loss A/c (3rd Year)
Amount Amount
Particulars (Rs.) Particulars (Rs.)
To
Gros
s
To Salary A/c: profit 35,81,360
General Mgr 84,000
Tech.
Supervisor 60,000
Accountants 42,000
Salesman 72,000
Peon 24,000
Clerk 30,000 3,12,000
Depreciation
To :
Building 49,500
Plant & 7,70,00
Mach. 0
Other fixed
asset 46,500
Computers 12,000 8,74,000
To Indirect Exp.:
Audit Fees 23,500
2,68,00
Selling Exp. 0
Misc. Exp. 32,000
42

43. Freight
Outward 32,000
Insurance 1,02,00
Exp. 0
Legal Fees
Exp. 20,000
Packing Exp 48,000
Post &
Courier 32,000
Professional
Tax 1,000
Rep. & Other
exp 32,000
Statio &
Print. 19,200
Telephone
Bill 28,800 6,38,500
Interest on borrowed
To capital 4,11,000
To Loan Installment A/c 3,75,000
To Income Tax 4,50,515
T NET 12,29,53
O PROFIT 5
42,90,55
0 42,90,550
43

44. 44

45. Projected BALANCE SHEET (1st Year)
Amount Amount
Liabilities (Rs.) Assets (Rs.)
Capital FIXED
Accounts: ASSETS:
30,00,00
Ekta Ghodasara 0 Land 4,40,000 4,40,000
Building 4,95,000 4,45,500
- dep.
49,500
Secured Loans: Plant & Machinery:
H.D.F.C Bank 20,25,00 30,80,00
Loan 0 Total 0
- dep. 7,70,000 23,10,000
Furniture & Fixture: 1,27,500
Unsecured
Loans: Computers: 24,000
Shrinathji 21,00,00
invest. 0 Other Fixed Assets:
Total 2,10,000
Accounts
Payable 1,75,000 -dep. 31,500 1,78,500
Net Profit 4,44,770 Accounts Receivables: 20,76,730
Bank
Balance:
H.D.F.C
Bank A/c 13,59,450
Cash - in -
hand:
Cash Balance 6,09,890
Stock - in -
hand:
Closing
Stock 1,97,200
45
77,44,77
0 77,44,770

46. Projected BALANCE SHEET (2nd Year)
Liabilities Amount (Rs.) Assets Amount (Rs.)
Capital Accounts: FIXED ASSETS:
Ekta Ghodasara 30,00,000 Land 4,40,000 4,40,000
Building 4,45,500 3,96,000
- dep. 49,500
Secured Loans: Plant & Machinery:
23,10,00
H.D.F.C Bank Loan 17,75,000 Total 0
- dep. 7,70,000 15,40,000
Furniture & Fixture: 1,05,000
Unsecured Loans:
Shrinathji invest. 19,50,000 Other Fixed Assets:
Total 1,44,500
Accounts Payable 2,50,000 -dep. 31,500 1,13,000
Computer: 12,000
Net Profit 7,47,812 Accounts Receivables: 20,50,000
Bank Balance:
H.D.F.C Bank A/c 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
46

47. Projected BALANCE SHEET (3rd Year)
Amount Amount
Liabilities (Rs.) Assets (Rs.)
FIXED
Capital Accounts: ASSETS:
Ekta Ghodasara 30,00,000 Land 4,40,000 4,40,000
Building 3,96,000 3,46,500
- dep. 49,500
Secured Loans: Plant & Machinery:
H.D.F.C Bank Loan 15,50,000 Total 15,40,000
- dep. 7,70,000 7,70,000
Furniture & Fixture: 82,500
Unsecured Loans: Computers: -
Shrinathji invest. 18,00,000 Other Fixed Assets:
Total 1,13,000
Accounts Payable 3,10,000 -dep. 31,500 81,500
Net Profit 12,29,535 Accounts Receivables: 21,50,250
Bank Balance:
H.D.F.C Bank
A/c 18,10,125
Cash - in - hand:
Cash Balance 15,40,500
Stock - in -
hand:
Closing Stock 6,68,160
78,89,535 78,89,535
47

48. PROJECTED COST SHEET
1st Year 2nd Year 3rd Year
Particulars Amount (Rs.) Amount (Rs.) Amount (Rs.)
Raw Materials Consumed:
Purchases 94,77,000 1,07,40,000 1,26,36,000
Add: Opening Stock -
Direct Wages to
Add: Workers:
Skilled 1,29,600 1,29,600 1,29,600
Unskilled 96,000 96,000 96,000
Add: Direct expenses:
Electricity (III Phase) 2,04,000 2,31,200 2,72,000
Freight inward 24,000 27,200 32,000
Water charges 18,000 20,400 24,000
PRIME COST: [A] 99,48,600 1,12,45,000 1,31,89,600
Salary to tech. supervisor 60,000 60,000 60,000
Repairs 24,000 27,200 32,000
Depreciation:
Building 49,500 49,500 49,500
Plant & Machinery 7,70,000 7,70,000 7,70,000
FACTORY COST: [B] 9,03,500 9,06,700 9,11,500
Salary to Office Staff:
General Manager 84,000 84,000 84,000
Accountants 42,000 42,000 42,000
Peon 24,000 24,000 24,000
Clerk 30,000 30,000 30,000
Audit fees expenses 21,500 22,500 23,500
Insurance expenses 1,02,000 1,02,000 1,02,000
Legal fees expenses 15,500 18,000 20,000
Postage & Courier expenses 24,000 27,200 32,000
Professional tax 1,000 1,000 1,000
Misc. Expenses 24,000 27,200 32,000
Stationary & printing
expenses 14,400 16,320 19,200
Telephone bill expenses 21,600 24,480 28,800
Depreciation:
Computer 16,000 16,000 12,000
Other fixed assets 46,500 46,500 46,500
Interest on own capital 2,40,000 2,40,000 2,40,000
48

49. OFFICE & ADMN. COST:
[C] 7,06,500 7,21,200 7,33,000
COST OF PRODUCTION:
[A] + [B] + [C] 1,15,58,600 1,28,72,900 1,48,34,100
Add: Opening Stock of F/G - 1,97,200 4,24,560
Less: Closing Stock of F/G 1,97,200 4,24,560 6,68,160
COST OF GOODS SOLD: 1,13,61,400 1,26,45,540 1,45,90,500
Add:
Salary to salesman 72,000 72,000 72,000
Selling expenses 2,01,000 2,27,800 2,68,000
Packing expenses 36,000 40,800 48,000
Freight outward 24,000 27,200 32,000
SELLING & DISTRIBUTUON
COST: 3,33,000 3,67,800 4,20,000
COST OF SALES:
(COGS + S&D COST) 1,16,94,400 1,32,40,700 1,50,10,500
SALES
1,28,61,500 1,45,99,000 1,72,36,500
PROFIT
11,67,100 13,58,300 22,26,000
Schedule of Raw material consumed
49

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

51. Year 1 Year 2
Particulars
Quantity Amount Quantity Amount
Opening
Balance - - 1,70,000 1,97,200
Add: Goods 1,06,20,00 1,32,75,00 1,20,36,00
manufactured 0 0 0 1,50,45,000
Less: Sales during 1,04,50,00 1,30,62,50 1,18,40,00
the year 0 0 0 1,48,00,000
Closing Stock
(Units): 1,70,000 3,66,000
Schedule of fixed assets
Net
Gross Block Depreciation Block
Opening
Particulars Total
=+++++++ During Written
Total Accumul
+++ the Down
ated
Addition Year Value
Building 4,95,000 4,95,000 49,500 49,500 4,45,000
Boundry wall & gate 35,000 35,000 5,250 5,250 29,750
Plant & Machinery 30,80,000 30,80,000 7,70,000 7,70,000 23,10,000
Electricity inst. &
fittings 75,000 75,000 11,250 11,250 63,750
Furniture 1,50,000 1,50,000 22,500 22,500 1,27,500
Computers 40,000 40,000 16,000 16,000 24,000
Telephone & Fax
Machines 1,00,000 1,00,000 15,000 15,000 51,000
Total: 39,75,000 39,75,000 8,82,000 8,82,000 30,51,500
Schedule of factory Overheads
51

52. YEAR 1 YEAR 2 YEAR 3
Particulars
Amount Amount Amount
Salary to technical
supervisor 60,000 60,000 60,000
Repairs 24,000 27,200 32,000
Dep:
Building 49,500 49,500 49,500
7,70,00 7,70,00
Plant & Machinery 0 0 7,70,000
Total 9,03,50 9,06,70 9,11,50
0 0 0
Schedule
of selling overheads
YEAR 1 YEAR 2 YEAR 3
Particulars
Amount Amount Amount
Salary to salesman 72,000 72,000 72,000
Freight outward 24,000 27,200 32,000
Selling expenses 2,01,000 2,27,800 2,68,000
Packing expenses 36,000 40,800 48,000
4,20,00
Total 3,33,000 3,67,800 0
52

53. RISK FACTORS
R 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.
p Another risk is that if any new material comes into market other
than paper, then it will be hard to maintain the market.
53

54. 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 Mechanical 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.
54

55. NAME & ADDRESS OF RAW MATERIAL SUPPIERS
1. M/S Punalur Paper Mills,
Punalur, Kerala.
2. M/S Star Paper Mills Ltd.
Saharanpur (UP).
3. M/S Rohtas Industries Ltd.
Dalminagar (Bihar).
4. M/S paper & pulp conversion Ltd.
376, Shukrawar peth, Bihar.
5. M/S Ballarpur paper Mills Ltd.,
Ballupur. Dist. Chanda,
Maharastra.
6. M/S. Sirpur paper mills Ltd.,
Sirpur, Kaghaznagar (AP).
55

56. DISCLODURE OF A/cing POLICIES
D Depreciation is calculated on straight line methods.
Salary is given within 1 s t week of every month.
Raw material is purchased once in two months.
Stock is calculated at cost or market price whichever is
low.
Interest on ownership capital is used for costing
purpose and is reinvested in business again every year.
56

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 today’s environment.
AFTER ALL IT’S AN ENVIRONMENTAL FRIENDLY PRODUCT!!!
Its Sav-“E” paper bags.
57

58. Future Plans
F To use totally eco-friendly papers, which are made out of baggage and
not tree.
n To make the product popular in every place of Gujarat and gradually
cover all near by states.
c To make the firm a medium scale industry and then a large scale.
T 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!!!
58

59. 59

60. 60