Dinesh paper bags

VCCM COLLEGE, RAJKOT

PRODUCT PROJECT REPORT ON PAPER BAGS

PREPARE BY

Name :- Parmar Dinesh .K.

Class :- T.Y. B.B.A

Roll no. :- 18

Academic Year :- 2015 – ‘16

Guided by :- Prof. Jatin Sheth

College :- Vivekananda College of

Computer science & Mgt.

Submited to :- Saurastra University

2

DECLARATION

I undersigned MR. DINESH K. PARMAR, 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. Jatin Sheth Vivekananda college, Rajkot.

This report has not been submitted previously to another

university for another examination.

Date:

Place: Rajkot. - - -

- - - - - - - - - -

(Dinesh Parmar )

3

PREFACE

B.B.A. course is a special course, which prepares young

entrepreneurs, & it’s very essential that they should have the

basic knowledge about how the small-scale business can be

started or which type of project is to be submitted to the banks

and other financial institution for the purpose of loan.

One of the subjects namely Entrepreneurship and

Management of Small Scale Business has covered this aspect

with a view to create and develop entrepreneurial skill among

the students.

Today in the growth rate of Indian Economy, S.S.I. plays a

vital role by contribution of 40%, to the total national income.

Hence, university has included preparation of such project

within the preview of its syllabus.

4

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. Jatin

Sheth for his co-operation and guidance. Without his support my

report would have been very difficult to complete.

I am also thankful to all those who consisted me in

preparation of the manuscript. I would like to thank my friends

and family member who helped me in this project.

Date

Place: Rajkot

-------------

( Dinesh Parmar )

5

INDEX

SR. NO.

PARTICULAR PAGE NO.

1. Introduction 07

2. Project at a glance 08

3. Implementation Schedule 09

4. Management Setup 10

5. Organisation Structure 11

6. Justification of Location 12

7. Product Detail 15

8. Market potential 17

9. Raw Materials 18

10. Machines 19

11. Manufacturing Process 20

11. Photos 21

12. Production Capacity Schedule 23

13. Staff & Labour 23

14. Financial Details 24

15. Cost of Production 27

16. Total Working Capital Requirement 28

17. Total Project Fund 29

18. Sources of Finance “

19. Interest on Capital “

20. Depreciation 30

21. Annual Cost of Production “

22. Sales Forecast (5 years) “

23. Fixed & Variable Cost Schedule 31

24. Break-Even Analysis 33

25. Term Loan Repayment 35

26. Cost of Capital 36

27. Return on Investment “

28. Profitability 37

29. Tax Schedule “

30. Projected Operating Statement 38

31. Projected Trading A/c 39

32. Projected Profit & Loss A/c 42

33. Projected Balance Sheet 45

34. Projected Cost Sheet 48

35. Schedule of Raw Material Consumed 50

6

36. Schedule of Finished Goods “

37. Schedule for Fixed assets 51

38. Schedule for Factory Overheads 52

39. Schedule for Selling & Administration Overheads

“

40. Risk Factors 53

41. Name & Add. Of Machinery & Equipment Supplier

54

42. Name & Add. Of Raw Material Supplier

55

43. Disclosure of Significant Accounting Policies

56

44. Future Plans 57

45. Conclusion 58

46. Photos 59

7

INTRODUCTION

Paper Bags find extensive use in day-to-day life

for packing of bakery products, grocery, medicine,

cosmetics and stationery items. Of late, the use has

increased due to ban of certain type of plastic carry

bags that create environmental pollution.

8

PROJECT AT A GLANCE

Name of the Unit “Green” Paper Bags

Slogun “ LET’S BEGINNING ”

LOGO

Registered Office Plot No. 228, GIDC, Himatnagar road, Ahmedabad.

Location of the Unit Plot No. 228, GIDC, Himatnagar road, Ahmedabad.

Form of Organisation Partnership Firm

Name of Owner Parmar Dinesh Jadav Dharmesh

Name of Product 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 Shriji Investments Own Capital

Cost of Capital 9.8%

Return on Investment 16.13%

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

9

IMPLEMENTATION SCHEDULE

The major activities in the implementation of the project

have been listed and the average time for implementation is

estimated at 1 Year.

No. Particulars Months

1. Scheme Preparation & Approval 1

2. SSI Provisional Registration 2-3

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

7. Provision of other facilities like water, electricity etc.

1

Trial & production will start from

1 Year onwards

10

MANAGEMENT SETUP

(Partner’s Background)

Partner: - 1

Name Parmar Dinesh .K.

Age 28 Years

Address Maninagar society, Street no. 5, opp. SBI Bank. Ahmedabad.

Academic Qualification MBA (Marketing)

Role in the Unit Marketing, Chairmen

Financial Contribution 66% of Owned Capital

Experience Nirma company Welspoun company

Partner:-2

Name Jadav Dharmesh G.

Age 26 Year

Address Bapunagar Soc., Street no. 5,

Near, Reliance Mall,

Ahmedabad.

Academic Qualification MBA (F.M.)

Role in the unit Finance manager

Financial Contribution 33% owned Capital

Experience Nirma company

11

ORGANISATION STRUCTURE

Owner

Production Personnel Marketing Finance

Manager Manager Salesman Accountant

Workers

12

JUSTIFICATION OF LOCATION

Location plays an important role in starting industry.

Before starting any industry entrepreneurs have to take a

decision about the location of industry. They have to select

that location where all the facilities must be available. They

have to take right decision about the selection of location

because once a location selected it cannot be changed in the

near future. The following should be taken into

consideration.

1. Availability of market: -

Market plays an important role in the selection of

location. Market should be near to the industry so; the

immediate sale of product is possible. It also help in

reduction of cost by reducing storing of finished good,

avoid the cost of transportation etc.

2. Availability of Labour: -

Without manpower no one can start his or her industry.

If you have a machine but not manpower you cannot

start your industry. So, Labour should be available at

cheap rate.

13

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 the above factors justify the selection of the

location. So, the selection would definitely contribute to the

profitability.

14

PRODUCT DETAILS

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.

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.

It is Eco-friendly in nature : -

It is very easy to produce a paper bags and we can

also easily destroyed it. So, it is less harmful to

nature as compare to plastic bags.

This two are the main feature of paper bag.

15

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.

BRAND NAME:-

Brand also plays an important role in marketing. Good

brand has to face less competition in the increasing

market.

16

MARKET POTENTIAL

The introduction of shopping complexes & consumer

stores in the semi-urban & 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.

17

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

18

MACHINES

Automatic paper bag machine - 3 Nos.

Stereo Press - 2 Nos.

Stereo Grinder - 2 Nos.

Roll Slitter motorized with 2 HP packing machine - 2

Nos.

Testing equipment - 1 No.

Punching Machine - 1 No.

19

MANUFACTURING PROCESS

Raw Material (Paper Roll)

Cutting through Automatic Machine

Stereo pressing with the help of gum & chemical

Grinding

Printing through ink

Punching

Packing

Testing

20

MANUFACTURING PROCESS IN DETAIL

The required raw material is in the form of roll, the

cutting of roll is done through the automatic paper bag

machine according to the size, and then pressing of required

size is done through stereo pressing machine with the help

of gum & chemical. Then side grinding of paper bag is done.

Then the process of printing is done and after that punching

is done and after this string is tied in these holes and at last

they are tested for bursting pressure and packing is done.

23

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

STAFF & LABOUR

No. Staff & Labour No.

1. Factory Staff Skilled Unskilled

4 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

25

FIXED ASSETS

Land

Particulars Sq.mts. Rate(Rs.) Total Cost

Land 400 1100 4,40,000

Building

Plant & Machinery

Name Qty. Rate Total Cost

Automatic Paper bag

machine

Stereo Press

Stereo Grinder

Roll Slitter

Testing Equipment

Punching Machine

3

2

2

1

1

1

5,00,000

2,50,000

3,50,000

2,50,000

80,000

50,000

15,00,000

5,00,000

7,00,000

2,50,000

80,000

50,000

Particulars Sq.mts. Rate(Rs.) Total Cost

Building 275 1800 4,95,000

26

Other Assets

Particulars Qty. Rate Total Cost

Furniture & Fixtures

Electrification

Installation Charges

Computer

Telephone

Fax machine

Boundary wall &

Gate

-

-

1

2

2

1

1,50,000

75,000

40,000

15,000

15,000

35,000

1,50,000

75,000

40,000

30,000

30,000

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 Stereo Press Stereo Grinder Roll Slitter Testing Equipment Punching Machine

15,00,000

5,00,000 7,00,000 2,50,000

80,000 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

27

COST OF PRODUCTION

Raw Material

Particulars Rate

Per kg. Req. per

day Req. per month

Req. per year

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 Unskilled

4 6

2,000 1,800

8,000

10,800

96,000

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

28

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 outward

2,000 2,000

24,000 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

TOTAL WORKING CAPITAL REQUIREMENT


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


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

29

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. Dinesh Capital Dharmesh Capital

8% 8%

20,00,000 10,00,000

2. Borrowed Capital HDFC Shriji Investments

12%

10%

22,50,000

22,50,000

Total 75,00,000

INTEREST ON CAPITAL

Sr. Particulars Rate Amount

1. Own Capital 8% 2,40,000

2. Borrowed Capital HDFC Shriji Investments

12%

10%

2,70,000

2,25,000

Total 7,35,000

30

DEPRECIATION

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

Year Units/annum Rate/unit Amt.(Rs.)

1

2

3

4

5

1,04,50,000

1,18,40,000

1,39,50,000

1,42,00,000

1,45,50,000

1.25

1.25

1.25

1.50

1.50

1,30,62,500

1,48,00,000

1,74,37,500

2,13,00,000

2,18,25,000

31

0 10000000 20000000 30000000 40000000 50000000

1st year

2nd year

3rd year

4th year

5th year

Schedule of fixed & variable cost

FIXED COST

Particulars Amount

Depreciation

Interest on capital

Salary (40%)

Other Expenses (40%)

8,82,000

7,35,000

2,15,040

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

Particulars

Variable cost

Fixed 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

32

VARIABLE COST

Particulars Amount

Raw Materials

Salary (60%)

Other Expenses (60%)

94,77,000

3,22,560

4,53,000

Total I,02,52,560

Variable cost/unit

= Total Variable Cost/ Total no. of units

= 1,02,52,560/1,06,20,000

= 0.96ps. /unit

Contribution/unit

= S.P./unit-V.C./unit

= 1.25-0.96

= 0.29 ps. /unit

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 / Sales X 100

= 31,25,400/ 1,28,61,500 X 100

= 24.18%

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 Opening Balance Installment

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

SHRIJI INVESTMENTS

Period Opening Balance Installment

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

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

36

Cost of Capital

Cost of Partners capital (A) = Int. rate x Partnership

capital/100

= 8 x 20,00,000/100

= Rs. 1,60,000

= 8 x 10,00,000/100

= Rs. 80,000

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%

37

Return on Investment

= Profit (EBIT)/Total Capital Investment X100

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

= 16.13%

PROFITABILITY ANALYSIS

Particulars Amount

Sales Less: Cost of Production

1,28,61,500 1,61,51,600

EB.I.T. Less: Interest on Capital

12,09,900 7,35,000

EB.T. Less: Tax

4,74,900 88,970

Net Profit after tax 3,85,930

Tax Slab (Used for Calculating Tax)

Income Applicable Tax Rate (%) Actual Tax

Up to Rs. 1,35,000 Nil -

From 1,35,001 to 150000 10 1,500

From 150001 to 250000 20 20,000

Above 250001 30 67,470

Total Actual Tax: 88,970

38

PROJECTED OPERATING STATEMENT

1st Year 2nd Year 3rd Year

Particulars Amount (Rs.) Amount (Rs.) Amount (Rs.)

SALES: [A] 1,28,61,500 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

Add: Opening stock of 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 Operation: [B] 97,51,400 1,10,17,640 1,29,46,000

GROSS PROFIT: [A - B] 31,25,400 35,81,360 42,90,500

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

11,67,100 15,85,660 22,44,000

(Gross profit - Total indirect

expenses)

Less: Interest

on

Borrowed Capital 4,95,000 4,53,000 4,11,000

Earning Before Tax 6,72,100 11,32,660

(E.B.I.T - Interest) 18,33,000

Less: Tax 1,07,630 2,49,848 4,50,515

NET PROFIT AFTER TAX:

4,44,770 7,47,812 12,29,535 (Earning Before Tax - Tax)

39

Projected Trading A/c (1st Year)

Particulars Amount

(Rs.) Particulars Amount (Rs.)

To

Purchase A/c 94,77,000 By Sales A/c 1,28,61,500

To Electricity III Phase

A/c 2,04,000 By Closing stock A/c 1,97,200 To Freight

Inward A/c 24,000

To Water charges A/c 18,000

To Salary A/c:

Skilled Labour

96,000

Unskilled

Labour 1,29,600 2,25,600

To Gross Profit 31,25,400

1,30,58,700 1,30,58,700

40

Projected Trading A/c (2nd Year)

Particulars Amount (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

A/c 2,31,200

By Closing stock

A/c 4,24,560 To Freight

Inward A/c 27,200

To Water charges A/c 20,400

To Salary A/c:

Skilled

Labour 1,29,600

Unskilled

Labour 96,000 2,25,600


1,50,23,560 1,50,23,560

41

Projected Trading A/c (3rd Year)

Particulars Amount (Rs.) Particulars Amount (Rs.)

To opening stock

4,24,560 To

Purchase A/c 1,26,36,000 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

Labour 1,29,600

Unskilled Labour 96,000 2,25,600


1,79,04,710 1,79,04,710

42

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

Particulars Amount (Rs.) Particulars

Amount (Rs.)

To Salary A/c:

To Gross 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

To Depreciation: Building 49,500

Plant & Mach. 7,70,000

Other fixed asset 46,500

Computers 16,000 8,82,000

To 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 5,09,000

To Interest on borrowed capital 4,95,000

To Loan Installment A/c 3,75,000 To Income Tax 1,07,630 TO NET PROFIT 4,44,770

31,25,400 31,25,400

43

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


Amount (Rs.)

To Salary A/c:


General Mgr 84,000


Accountants 42,000 Salesman 72,000 Peon 24,000

Clerk 30,000 3,12,000




Computers 16,000 8,82,000





Packing Exp 40,800








35,81,360 35,81,360

44

Projected Profit & Loss A/c (3 rd Year)


Amount (Rs.)

To Salary A/c:


General Mgr 84,000


Accountants 42,000

Salesman 72,000 Peon 24,000

Clerk 30,000 3,12,000




Computers 12,000 8,74,000





Packing Exp 48,000








42,90,550 42,90,550

45

Projected BALANCE SHEET (1st Year)

Liabilities Amount (Rs.) Assets

Amount (Rs.)

Capital Accounts: Parmar Dinesh 20,00,000

FIXED ASSETS:

Jadav Dharmesh 10,00,000 Land 4,40,000 4,40,000

Building 4,95,000

4,45,500

Secured Loans:

- dep. 49,500

Plant & Machinery:

H.D.F.C Bank Loan 20,25,000 Total 30,80,000 - dep. 7,70,000 23,10,000

Furniture & Fixture: 1,27,500

Unsecured Loans: Computers: 24,000

Shriji invest. 21,00,000 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

77,44,770 77,44,770

46

Projected BALANCE SHEET (2nd Year)


Amount (Rs.)

Capital Accounts: FIXED ASSETS:

Parmar Dinesh

20,00,000 Land 4,40,000 4,40,000

Jadav Dharmesh 10,00,000 Building 4,45,500

3,96,000

Secured Loans:

- dep. 49,500

Plant & Machinery: H.D.F.C Bank Loan 17,75,000 Total 23,10,000 - dep. 7,70,000 15,40,000

Furniture & Fixture: 1,05,000

Unsecured Loans: Shriji 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

47

Projected BALANCE SHEET (3rd Year)


Amount (Rs.)

Capital Accounts: FIXED ASSETS:

Parmar Dinesh 20,00,000 Land 4,40,000 4,40,000

Jadav Dharmesh 10,00,000 Building 3,96,000

3,46,500

Secured Loans:

- dep. 49,500

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: -

Shriji 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

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 -

Add: Direct Wages to 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

Water charges 24,000 27,200 32,000

Freight inward 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

OFFICE & ADMN. COST: [C] 7,06,500 7,21,200 7,33,000

49

COST OF PRODUCTION:

1,15,58,600

1,28,72,900 1,48,34,100 [A] + [B] + [C]

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: 1,16,94,400 1,32,40,700 1,50,10,500 (COGS + S&D COST)

SALES

1,28,61,500 1,45,99,000 1,72,36,500

PROFIT

11,67,100 15,58,660 22,26,000

50

Schedule of Raw material consumed

Particulars Year 1 Year 2 Year 3

Quantity Amount Quantity Amount Quantity Amount

PAPER IN ROLL

Opening Balance - - - - - -

Add: Purchase during the year 8,85,000 88,50,000 10,03,000 1,00,30,000 11,80,000 1,18,00,000

Less: Closing Stock - - - - - -

GUM


Add: Purchase during the year 10,500 84,000 11,900 95,200 14,000 1,12,000


PRINTING INK


Add: Purchase during the year 6,000 3,90,000 6,800 4,42,000 8,000 5,20,000


MISC. CHEMICAL


Add: Purchase during the year 12,000 48,000 13,600 54,400 16,000 64,000


STRING


Add: Purchase during the year 15,000 1,05,000 17,000 1,19,000 20,000 1,40,000


TOTAL R.M.

CONSUMED 94,77,000 1,07,40,600 1,26,36,000

Schedule of finished goods

Particulars Year 1 Year 2 Year 3

Quantity Amount Quantity Amount Quantity Amount

Opening Balance - - 1,70,000 1,97,200 3,66,000 4,24,560

Add: Goods manufactured 1,06,20,000 1,32,75,000 1,20,36,000 1,50,45,000 1,41,60,000 1,77,00,000

Less: Sales during the year 1,04,50,000 1,30,62,500 1,18,40,000 1,48,00,000 1,39,50,000 1,74,37,500

Closing Stock

(Units): 1,70,000 3,66,000 5,76,000

51

Schedule of fixed assets

Particulars

Gross Block Depreciation Net Block

Opening

=+++++++++

+ Additio

n

Total Total

Accumulated During

the Year

Written Down Value

Building 4,95,0

00 4,95,0

00 49,500 49,500 4,45,0

00

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 1,50,0

00 1,50,0

00 22,500 22,500 1,27,5

00

Computers 40,00

0 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 39,75,0

00 8,82,00

0 8,82,00

0 30,51,5

00

52

Schedule of factory Overheads

Schedule of selling overheads

Particulars YEAR 1 YEAR 2 YEAR 3

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 Plant & Machinery 7,70,000 7,70,000 7,70,000

Total 9,03,500 9,06,700 9,11,500

Particulars YEAR 1 YEAR 2 YEAR 3

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

Total 3,33,000 3,67,800 4,20,000

53

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.

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 Mechnical Engg. Work,

Industrial Area-A, Plot No. – 32,

Ludhiana.

3. M/S Indo Europe Trading Co.,

1980, Chandni Chowk, Delhi-6.

4. M/S Irupal Industrial (Regd.),

728, Industrial Area-B, Ludhiana.

5. M/S. Kohli Industries, 29,

Sona Udyog Indl. Estate,

Parsi panchyat Road,

Anderi(E), Mumbai-68.

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.

56

DISCLODURE OF A/CING POLICIES

Depreciation is calculated on straight line methods.

Salary is given within 1st 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.

57

Future Plans

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

baggage and not tree

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!!!

58

CONCLUSION

In the product project report on “Green” paper bags I

have discussed all financial data and other relevant

information

The market of “Green” 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 “Green” paper bags.

Dinesh paper bags

Business

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