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BUSINESS
PLAN
August 30
2010
The manufacturing of the cargated boxes in the country had great
demand and nearly 8% of it is produced every year. There is almost 10-
20% of development in the industry according to the survey conducted.
But there is no such craft markets equal to that demand. According to
the statistics of HDFC there is nearly 21, 11,000 tones of craft demand
in the market. And there are chances even to increase it for 28, 37,000
for the year 2010-11 and 30, 63,000 for the year 2011-12. The craft
paper is prepared from the waste material and from the waste craft.
CRAFT
INDUSTRY









OWNERS -Tushar gupta, davneet chopra , Mayank Sharma, Rahul
kundalia,Gypsa

Your Buslness Nume գ Cruft lndustry
Address Llne 1- 24 plot no lndustrlul ureu,
Clty- Bhllwuru, Ru|usthun


TOTAL PROJECT COST IN TERMS OF CAPITAL,INFRASTRUCTURE AND WORKING CAPITAL:

COMPONENTS SIZE COST

LAND 5 ACRE 3,00,00,000

CONSTRUCTION 2,00,00,000

MACHINERY 8,60,00000

WORKING CAPITAL 1,40,00000


MEANS OF FINANCE:

DEBT 9,00,00,000

EQUITY 6,00,00000

TOTAL COST 15,00,00,000


LABOUR COST DETAILS:


CATEGORY NUMBER PER COST FINAL ANNUAL COST

OPERATORS 5 2,40,000 12,00,000

ELECTRICIANS 2 2,00,000 4,00,000

GENERAL MANAGER 1 10,00,000 10,00,000

ACCOUNTANT 1 2,40,000 2,40,000

LABOURS 21 67,200 14,11,200

TOTAL 30 19,87,200 42,51,200



CONSTRUCTION COST DETAILS:

MAIN BUILDING 45 lakhs

SHED 5 lakhs

BORE WELL 15 lakhs

OFFICE 10 lakhs

BOILER HOUSE 5 lakhs

GODOWN 15 lakhs

ELECTRICAL ROOM 10 lakhs

WORK SHOP 20 lakhs

LABOUR QUARTERS 15 lakhs

RAW MATERIAL GODOWN 20 lakhs

CRANE 15 lakhs

WEIGH BRIDGE 10 lakhs

FOUNDATION 25 lakhs

TOTAL
COST 2,00,00,000

MACHINERY:

1) MOULD SECTION

2) PRESS SECTION

The press section shall be consisting of 2 nos. straight press and will be having bottom felts only.
3) DRYER SECTION (PRE+POST)

4) DUPLEX SHEET CUTTER

5) PAPER MACHINE MECHANICAL DRIVE 1 UNIT
6) BOILER 3 TON/ HOUR CAPICITY
7)COMPRESS0R

8) PIPE LINES: Steam line. Pulpline, back water & fresh water line, etc.
9)ELECTRICAL


WORKING CAPITAL DETAILS:

RAW MATERIALS 50,40,000

FINISHED GOODS 37,12,050

RECEIVABLES 52,47,950

TOTAL 1,40,00,000


RAW MATERIAL DETAILS:

MILL BOARD/CRAFT WASTAGE/PAPER WASTAGE 9 RS/ KG
PER DAY REQUIREMENT= 1500 KG
PER DAY COST= 1500 x 9 = RS 13500
MONTHLY COST= 13500 x 28 = RS 378000
ANNUAL COST= 378000 x 12 =
4536000
,








,, *enerul compuny decrlptlon
1) We will be making Paper Mill manufactures paper that is required in
manufacturing of paper cones, tubes, cartons, boxes etc.
2) Capital investment: 15 CRORES
3) Product: Craft Board
4 Requirments of project-
RAW MATERIAL: mill board, craft wastage, paper wastage
LABOUR: 30
POWER: 600 hp
1) Land ʹ 5 acre ( 3 Cr )
0uln bdg- 180 lg x 40ը wlde u nd 35ը helght
Shed- 180 lg X40ը wldth x 35ը helght sultuble for 5 ton EOT crune
Bore well wlth tunk
Offlce- 30ը x 45ը
Boller house- 40ը x 40ը
*odown- 40ը x 120ը
Electrlcul room- 40ը x 50ը
Work shop- 40ը x 30ը
Lubour quurters
Ruw muterlul godown
Crune

Constructlon գ 2 Cr
0uchlnery- 9 Cr
Worklng Cupltul գ 1 Cr

We can divide Paper industries into two categories. One is the Paper from Paper board
industries and another one is News print Industries.
Paper board industries are of three types. One type of paper which is used for Writing and
Printing purpose which is a type of unit. Second one is the craft paper, Duplex, Grey, White
board manufacturing unit. And the last one is the Tissue paper, Fine arts paper, Greeting card
paper is another kind of manufacturing industry.
Another division of Paper industry is the manufacturing of Newsprint which is used in
printing of News papers and Magazines.
About Craft Paper
Craft paper is very important for the industrial usage papers. This is manufactured with Old
paper pulp and a stick which is prepared from Bleaching. Even they will laminate this paper
depends on the requirement of this paper to a particular industry. The craft paper usage in the
Indian industrial paper usage is around 55%.
Usage of Craft Paper
Out of total Craft Paper manufactured by the industry, 85% of the craft paper is used for the
Packing of Goods. For the packing different items like Refrigerators, Televisions, Air
conditioners, Washing machines and fruits they uses Corgated Box which is manufactured
with Craft Papers. They are even using this craft paper in the manufacturing of Cone tubes
which are used in Paper mills, plastic or poly film packing tubes and Textiles tubes. In the
packing of Paper bags, carry bags, Meals plates, Tiffin plates, laminated goods they are using
craft papers.
Demand:
The manufacturing of the cargated boxes in the country had great demand and nearly 8% of it
is produced every year. There is almost 10-20% of development in the industry according to
the survey conducted. But there is no such craft markets equal to that demand. According to
the statistics of HDFC there is nearly 21, 11,000 tones of craft demand in the market. And
there are chances even to increase it for 28, 37,000 for the year 2010-11 and 30, 63,000 for
the year 2011-12. The craft paper is prepared from the waste material and from the waste
craft.
Preparation method:
The waste material and the craft are made into a pulp and bleaching is added to it according
to the necessity. By the usage of bleaching the colors can be changed. Later this pulp s made
into a paper by using a machine and then dried and are rolled into paper bundles and are
finally packed. The cost of the craft paper is decided based on its quality, breakage capacity
and on its weight.
Industry:
y It costs nearly 5 crores to establish 20 tones of craft industry by the waste material
produced from the agricultural material.
y The craft recycling industry which had the capacity of producing 15 tones project
costs 5.35 crores.

Year 1 Year 2 Year 3 Year 4 Year 5
Income
Sales 8,76,96,000 10,23,12,000 11,69,28,000 13,15,44,000 14,61,60,000
Other Income 0 0 0 0 0
8,76,96,000 10,23,12,000 11,69,28,000 13,15,44,000 14,61,60,000
Expenditure
Cost of production 5,38,05,200 6,30,15,950 6,82,77,950 7,32,47,450 6,94,19,450
Depriciation 3,19,23,500 2,68,02,751 2,25,23,747 1,89,45,337 1,59,50,425
Net Profit Before Tax 19,67,300 1,24,93,299 2,61,26,303 3,93,51,213 6,07,90,125
Less: Taxation (33%) 6,49,209 41,22,789 86,21,680 1,29,85,900 2,00,60,741
Net Profit After Tax 13,18,091.0 83,70,510 1,75,04,623 2,63,65,312 4,07,29,384
Add: opening
balance 13,18,091 96,88,601 2,71,93,224 5,35,58,537
Balance c/f 13,18,091 96,88,601 2,71,93,224 5,35,58,537 9,42,87,921
Net Cash Flow
After Tax PV Factor @ 15% PV of CFAT
PV
Factor
@20% PV of CFAT
PV
Factor
@25% PV of CFAT
3,32,41,591 0.8696 28905731 0.8333 27701326 0.8000 26593273
3,51,73,261 0.7561 26596039 0.6944 24425876 0.6400 22510887
4,00,28,370 0.6575 26319303 0.5787 23164566 0.5120 20494525
4,53,10,650 0.5718 25906511 0.4823 21851201 0.4096 18559242
5,66,79,809 0.4972 28179882 0.4019 22778344 0.3277 18572840
1,40,00,000 0.4972 6960474 0.4019 5626286 0.3277 4587520
14,28,67,941 125547598 111318287
IRR 22
Projected Cost Sheet
Year 1(60%) Year 2(70%) Year 3(80%) Year
4(90%)
Particulars Amount Amount Amount Amoun
Direct Material consumed
Opening stock of raw material 0 1134000 992250 756000
Add: Purchases 34020000 39690000 45360000 510300

34020000 40824000 46352250 517860
Less: Closing Stock 1134000 992250 756000 425250
32886000 39831750 45596250 513607
Direct Wages 1411200 1411200 1411200 141120
Power Consumption and fuel
charges 5760000 6720000 7680000 864000
Prime Cost 40057200 47962950 54687450 614119
Factory Overheads 6,00,000 6,00,000 6,00,000 6,00,00
Factory Cost 40657200 48562950 55287450 620119
Office and Administrative Cost 2840000 2840000 2840000 284000
Total cost of Production 43497200 51402950 58127450 648519
Add: Opening Stock of finished
goods 0 1512000 1134000 756000
Cost of goods available for sale 43497200 52914950 59261450 656079
Less: Closing Stock of finished
goods 1512000 1134000 756000 378000
Cost of goods sold 41985200 51780950 58505450 652299
Selling and Distribution Expenses 11820000 11235000 9772500 801750
Total Cost = cost of sales 53805200 63015950 68277950 732474
Profit 33890800 39296050 48650050 582965
Sales 87696000 102312000 116928000 131544
sale price every year 29000 29000 29000 29000
sp * production 69552000 81144000 92736000 104328
output(tons) 3024 3528 4032 4536
87696000 102312000 116928000 131544
raw material input(tons) 3780 4410 5040 5670



CALCULATION OF DEPRICIATION
Particulars

Land Building Plant & Furniture & Tota

Machinery Fixture
Cost as per project 3,00,00,000.00 2,00,00,000.00 8,50,00,000.00 10,00,000 13
Total

30000000.00 20000000.00 85000000.00 1000000.00 13
Depreciation (%) - 10% 14% 18%
Depreciation-1st yr. 0.00 2000000.00 11823500.00 181000.00 1
W.D.V.

30000000.00 18000000.00 73176500.00 819000.00 12
Depreciation-2nd yr.

1800000.00 10178851.15 148239.00 1
W.D.V.

30000000.00 16200000.00 62997648.85 670761.00 10
Depreciation -3rd yr.

1620000.00 8762972.96 121407.74 1
W.D.V.

30000000.00 14580000.00 54234675.89 549353.26 9
Depreciation-4th yr.

1458000.00 7544043.42 99432.94
W.D.V.

30000000.00 13122000.00 46690632.48 449920.32 9
Depreciation- 5th yr.

1312200.00 6494666.98 81435.58
W.D.V.

30000000.00 11809800.00 40195965.50 368484.74 8

DEBT SERVICE COVERAGE
RATIO:
YEAR CFAT DEBT OBLIGATION DSCR
1 Rs. 3,32,41,591.00 Rs. 1,17,00,000.00 Rs. 2.84
2 Rs. 3,51,73,261.00 Rs. 2,01,15,000.00 Rs. 1.75
3 Rs. 4,00,28,370.00 Rs. 2,31,52,500.00 Rs. 1.73
4 Rs. 4,53,10,649.00 Rs. 2,13,97,500.00 Rs. 2.12
5 Rs. 5,66,79,809.00 Rs. 2,38,50,000.00 Rs. 2.38
Rs.
10.81
DSCR==
Rs. 2.16
BREAK EVEN POINT
1 2 3 4
SALES Rs. 5,38,05,200.00
Rs.
6,30,15,950.00 Rs. 6,82,77,950.00 Rs. 7,32,47,450.00 6
LESS OPERATION
EXPENCES Rs. 71,71,200.00
Rs.
81,31,200.00
Rs.
90,91,200.00
Rs.
1,00,51,200.00
Rs
1,1

CONTRIBUTION COST Rs. 4,66,34,000.00
Rs.
5,48,84,750.00 Rs. 5,91,86,750.00 Rs. 6,31,96,250.00 5
LESS FIXED COST Rs. 4,36,23,500.00 Rs. Rs. 3,21,76,247.00 Rs. 2,68,42,837.00
3,79,17,751.00 2

NET PROFIT Rs. 30,10,500.00
Rs.
1,69,66,999.00 Rs. 2,70,10,503.00 Rs. 3,63,53,413.00 3
PV RATIO 0.866719202 0.870966001 0.866850132 0.862777476
BREAK EVEN POINT 50331756.71 43535282.59 37118581.17 31112120.75
BEP % 93.54% 69.09% 54.36% 42.48%

sensitivity analysis
income original cost 5% increase in raw material income
sales 87696000 87696000 sales

expenditure expenditure
cost of sales 53805200 56495460 cost of sale
depreciation 14004500 14004500 depreciatio

net profit before tax 19886300 17196040 net profit b
tax 6562479 5674693 tax

net profit after tax 13323821 11521347 net profit a
difference in
profit 1802474
difference i
profit
decrease in profit margin 13.53% decrease in


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