VCCM COLLEGE, RAJKOT

PRODUCT PROJECT
REPORT ON
PAPER BAGS

PREPARE BY

Name
Class

Roll no.
Academic
Year

Guided by
College

Submited to

:- Parmar

Dinesh .K.

:- T.Y. B.B.A
:- 18
:- 2015 16
:- Prof. Jatin Sheth
:- Vivekananda
College of
Computer science & Mgt.
:a
Saur
Univer
astr
sity

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 )

PREFACE
B.B.A. course is a special course, which prepares young
entrepreneurs, & its v ery 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 th e 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.

ACKNOWLEDGEMENT
It is really a matter of great pleasure for me to present their creative
and practical work. At this stag e 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 )

INDEX
SR.
NO.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.

PARTICULAR
Introduction
Project at a glance
Implementation Schedule
Management Setup
Organisation Structure
Justification of Location
Product Detail
Market potential
Raw Materials
Machines
Manufacturing Process
Photos
Production Capacity Schedule
Staff & Labour
Financial Details
Cost of Production
Total Working Capital Requirement
Total Project Fund
Sources of Finance
Interest on Capital
Depreciation
Annual Cost of Production
Sales Forecast (5 years)
Fixed & Variable Cost Schedule
Break-Even Analysis
Term Loan Repayment
Cost of Capital
Return on Investment
Profitability
Tax Schedule
Projected Operating Statement
Projected Trading A/c
Projected Profit & Loss A/c
Projected Balance Sheet
Projected Cost Sheet
Schedule of Raw Material Consumed

PAGE
NO.
07
08
09
10
11
12
15
17
18
19
20
21
23
23
24
27
28
29

30

31
33
35
36

37

38
39
42
45
48
50

36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.

Schedule of Finished Goods

Schedule for Fixed assets
Schedule for Factory Overheads
Schedule
for
Selling
Administration Overheads
Risk Factors
Name & Add. Of Machinery &
Equipment Supplier
Name & Add. Of Raw Material
Supplier
Disclosure of Significant Accounting
Policies
Future Plans
Conclusion
Photos

&

51
52

53
54
55
56
57
58
59

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.

PROJECT AT A GLANCE
Name of the Unit
Slogun

Green Paper Bags

LETS BEGINNING

LOGO
Plot
No.
228,
GIDC,

Registered Office

8, at
GID na
C, ga
r
H ro
i
ad
m ,
Means of Finance
nI
p ble.
Form of Organisation
c>
r
Name of Owner
eC.
oj
e
Name of Product Cost of CapitalO.
RC,
ct
Size of the Unit Return on Investment
. so
is
SSI Registration Number
Oth
vi
Subsidy Registration
S No
. is
a
Cost of Project
i

Location of the Unit

Pl
ot
No
.
22

Himat
nagar
road,
Ahme
dabad
.
A
h
m
ed
ab
ad
.

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.
1.
2.
3.
4.
5.
6.
7.

Particulars
Scheme Preparation & Approval
SSI Provisional Registration
Sanction of loan by financial
institution
Installation of Machinery
Procurement of Raw material
Recruitment of technical personnel
Provision of other facilities like water,
electricity etc.
Trial & production will start from
1 Year onwards

Months
1
2-3
2
2-3
1
1
1

MANAGEMENT SETUP
(Partners Background)

Partner: - 1
Name
Age
Address
Academic Qualification
Role in the Unit
Financial Contribution
Experience

Parmar Dinesh .K.

28 Years
Maninagar society,
Street no. 5, opp. SBI Bank.
Ahmedabad.
MBA (Marketing)
Marketing, Chairmen
66% of Owned Capital
Nirma company
Welspoun company

Partner:-2
Na me

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

10

ORGANISATION STRUCTURE
Owner

Production
Manager
Workers

Personnel
Manager

Marketing
Salesman

Finance
Accountant

11

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.

12

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.

13

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.

2 PRODUCTS 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.

14

PRODUCTS 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.

15

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.

16

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:

1
2
3
4

Paper in roll

Gum
Printing ink
Misc. chemical

5 String

17

MACHINES

1
2
3

Automatic paper bag machine - 3 Nos.

Stereo Press - 2 Nos.

4
5

Stereo Grinder - 2 Nos.

Punching Machine - 1 No.

Roll Slitter motorized with 2 HP packing machine - 2 Nos.

Testing equipment - 1 No.

18

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

19

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.

20

21

22

PRODUCTION CAPACITY SCHEDULE

Production Capacity
No. of Working Days in a
month
No. of Working Days in a
Year

1,06,20,000 Units
25
300
1

No. of Shifts per day

No. of Working hours per shift

Production Capacity per month

LABOUR

f
f

8,85,0
00
Units
6. Salesman
7. Manager
8. Peon cum watchman

No. Staff & Labour

Facto
STAF ry
Sta

F&

23

24

FIXED ASSETS
Land

Particulars

Sq.mts.

Land

Rate(Rs.)

400

1100

Total Cost
4,40,000

Building
Particulars

Sq.mts.

Building

Rate(Rs.)

275

1800

Total Cost
4,95,000

Plant & Machinery

Name

Qty.

Rate

5,00,000

15,00,000

Stereo Press

2,50,000

5,00,000

Stereo Grinder

3,50,000

7,00,000

Roll Slitter

2,50,000

2,50,000

Testing Equipment

80,000

80,000

Punching Machine

50,000

50,000

Automatic Paper bag

Total Cost

machine

25

Other Assets
Particulars

Qty.

Rate

1,50,000

1,50,000

Installation Charges

75,000

75,000

Computer

40,000

40,000

Telephone

15,000

30,000

Fax machine

15,000

30,000

Boundarywall&

35,000

35,000

Furniture & Fixtures

Total Cost

Electrification

Gate

Total Fixed Assets

NO.
1.
2.
3.
4.

5.
6.
7.

PARTICULAR
Land (400 Sqm @ Rs.1100)
Building (275 Sqm @ Rs.1800)
Boundary Wall & Gate
Plant & Machinery
Automatic Paper Bag

Stereo Press

Stereo Grinder

Roll Slitter

Testing Equipment

Punching Machine

Furniture & Fixtures

Electrification & Installation
Charges
Computer, Telephones & Fax
Machine
Total

AMOUNT
4,40,000
4,95,000
35,000
15,00,000
5,00,000
7,00,000
2,50,000
80,000
50,000
1,50,000
75,000
1,00,000
43,65,000

26

COST OF PRODUCTION
Raw Material

Particulars

Rate
Per kg.
10

Paper in roll
Total (Rs.)
Gum
8
Total (Rs.)
Printing Ink
65
Total (Rs.)
Misc. Chemical
4
Total (Rs.)
String
7
Total (Rs.)
Net Total

Req. per
day
2,950
29,500
35
280
20
1,300
40
160
50
350

Req. per
month
73,750
7,37,500
875
7,000
500
32,500
1,000
4,000
1,250
8,750
7,89,750

Req. per
year
8,85,000
88,50,000
10,500
84,000
6,000
3,90,000
12,000
48,000
15,000
1,05,000
94,77,000

Staff & Labour

Particulars
Factory Staff

No.

Skilled
Unskilled

Technical
Supervisor
Salesman
Manager
Clerk cum typist
Accountant
Peon cum
Watchman

Total

Rate

P.M.

P.A.

4
6

2,000
1,800

8,000
10,800

96,000
1,29,600

1
2
1
1
1

5,000
3,000
7,000
2,500
3,500

5,000
6,000
7,000
2,500
3,500

60,000
72,000
84,000
30,000
42,000

2,000

2,000
44,800

24,000
5,37,600

27

Other Expenses & Utilities

Sr.
1.
2.
3.
4.
5.
6.
7.

Particulars
Electricity
Water Charges
Postage & Telegram
Stationery
Repairs
Telephone Expense
Transport

8.
9.
10.
11.
12.
13.
14.

P.M.
17,000
1,500
2,000
1,200
2,000
1,800

P.A.
2,04,000
18,000
24,000
14,400
24,000
21,600

2,000
2,000
3,000
2,000

24,000
24,000
36,000
24,000
21,500
1,000
15,500
1,02,000
2,01,000
7,55,000

inward
outward

Packing
Miscellaneous Exp.
Audit Fees
Professional Tax
Legal Fees
Insurance
Selling Exp.
Total

16,750
51,250

COST OF PRODUCTION
Sr.
1.
2.
3.

Particulars
Raw Material
Staff & Labour
Other Expenses
Total

P.M.
7,89,750
44,800
51,250
8,85,800

P.A.
94,77,000
5,37,600
7,55,000
1,07,69,600

TOTAL WORKING CAPITAL REQUIREMENT

Sr.
1.
2.
3.

Particulars
Raw Material
Staff & Labour
Other Expenses
Total

P.M.
7,89,750
44,800
51,250
8,85,800

P.A.
94,77,000
5,37,600
7,55,000
1,07,69,600

28

TOTAL PROJECT FUND

Sr.
1.
2.

Particulars

Amount
43,65,000
16,75,550
60,40,550

Fixed Cost
Working Capital (2 months)
Total

SOURCES OF FINANCE
Sr.
1.

Particulars
Dinesh Capital
Dharmesh Capital

2.

Borrowed Capital
HDFC

Shriji Investments

Total

Rate
8%
8%

Amount
20,00,000
10,00,000

12%

22,50,000

10%

22,50,000
75,00,000

INTEREST ON CAPITAL
Sr.
1.
2.

Particulars
Own Capital
Borrowed Capital
HDFC

Shriji Investments

Total

Rate
8%

Amount
2,40,000

12%

2,70,000

10%

2,25,000
7,35,000

29

DEPRECIATION
Sr.
1.
2.
3.
4.

Particulars
Building (10%)
Plant & Machinery (25%)
Other Fixed Assets (15%)
Computer (40%)
Total

Value
4,50,000
30,80,000
3,10,000
40,000

Amount
49,500
7,70,000
46,500
16,000
8,82,000

ANNUAL COST OF PRODUCTION

Sr.
1.
2.
3.
4.

Particulars

Amount
94,77,000
12,92,600
8,82,000
7,35,000
1,23,86,600

Raw Material
Recurring Expenses
Depreciation
Interest on Investment
Total

Sales Forecast
Year

Units/annum

Rate/unit

Amt.(Rs.)

1,04,50,000

1.25

1,30,62,500

1,18,40,000

1.25

1,48,00,000

1,39,50,000

1.25

1,74,37,500

1,42,00,000

1.50

2,13,00,000

1,45,50,000

1.50

2,18,25,000

30

5th year
4th year
3rd year
2nd year
1st year
0 10000000 20000000 30000000 40000000 50000000

Schedule of fixed & variable cost

Variable
cost
Amount
3,22,560
4,53,000
94,77,000
1,02,52,560

Particulars
Depreciation
Int. on capital
Salary
Other expenses
Raw Materials
TOTAL

Fixed
cost
Amount
8,82,000
7,35,000
2,15,000
3,02,000
21,34,000

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
Fixed cost/unit
1=

Total Fixed Cost/Total no. of units

2=

21,34,040/1,06,20,000

3=

0.20 ps. /unit

21,34,040

31

VARIABLE COST
Particulars
Raw Materials

Amount
94,77,000

Salary (60%)

3,22,560

Other Expenses (60%)

4,53,000

Total

Variable cost/unit
1= Total Variable Cost/ Total no. of units
2= 1,02,52,560/1,06,20,000
3= 0.96ps. /unit

Contribution/unit
1= S.P./unit-V.C./unit
2= 1.25-0.96
3= 0.29 ps. /unit

I,02,52,560

32

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. (%)
1= {Fixed Cost / (Fixed Cost + Profit)} X 75
2= 21,34,040/ (21,34,040 + 12,09,900) X 75
3= 47.86%

B.E.P. (units)
1= Fixed Cost/ (Contribution/unit)
2= 21,34,040/0.29
3= 73,58,759 bags

B.E.P. (Rs.)
1= B.E.P. x S.P./unit
2= 73,58,759 x 1.25

3= Rs.91,98,449

33

P. V. Ratio

1= Contribution per unit / Sales X 100

2= 0.29 / 1.25 X 100
3= 23.2%

Gross Profit Ratio

1= Profit / Sales X 100
2= 31,25,400/ 1,28,61,500 X 100
3= 24.18%

Net Profit Ratio

1= Profit after Tax / Sales X 100
2= 4,44,770 /1,28,61,500 X 100
3= 3.46 %

Fixed Assets Ratio

1= Fixed Assets/ Sales X 100
2= 43,65,000/1,28,61,500 X100
3= 33.94%

34

LOAN REPAYMENT SCHEDULE

HDFC
Period
1st Year
2nd Year
3rd Year
4th Year
5th Year
6th Year
7th Year
8th Year
9th Year
10thYear

Opening
Balance
Installment
22,50,000
2,25,000
20,25,000
2,25,000
18,00,000
2,25,000
15,75,000
2,25,000
13,50,000
2,25,000
11,25,000
2,25,000
9,00,000
2,25,000
6,75,000
2,25,000
4,50,000
2,25,000
2,25,000
2,25,000

Closing
Balance
20,25,000
18,00,000
15,75,000
13,50,000
11,25,000
9,00,000
6,75,000
4,50,000
2,25,000
0

Interest
2,70,000
2,43,000
2,16,000
1,89,000
1,62,000
1,35,000
1,08,000
81,000
54,000
27,000

Closing
Balance
21,00,000
19,50,000
18,00,000
16,50,000
15,00,000
13,50,000
12,00,000
10,50,000
9,00,000
7,50,000
6,00,000
4,50,000
3,00,000
1,50,000
0

Interest
2,25,000
2,10,000
1,95,000
1,80,000
1,65,000
1,50,000
1,35,000
1,20,000
1,05,000
90,000
75,000
60,000
45,000
30,000
15,000

SHRIJI
INVESTMENTS
Period
1st Year
2nd Year
3rd Year
4th Year
5th Year
6th Year
7th Year
8th Year
9th Year
10thYear
11thYear
12thYear
13thYear
14thYear
15thYear

Opening
Balance
Installment
22,50,000
1,50,000
21,00,000
1,50,000
19,50,000
1,50,000
18,00,000
1,50,000
16,50,000
1,50,000
15,00,000
1,50,000
13,50,000
1,50,000
12,00,000
1,50,000
10,50,000
1,50,000
9,00,000
1,50,000
7,50,000
1,50,000
6,00,000
1,50,000
4,50,000
1,50,000
3,00,000
1,50,000
1,50,000
1,50,000

35

Cost of Capital

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

capital/100
1= 8 x 20,00,000/100
2= Rs. 1,60,000
2= 8 x 10,00,000/100
1= Rs. 80,000

Cost of borrowed capital (B) = Int. rate x borrowed capital

(S.I.)/100
1= 10 x 22,50,000/100
2= Rs. 2,25,000

Cost of borrowed capital (C) = Int. rate x borrowed capital

(bank)/100
1= 12 x 22,50,000/100
2= 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%

36

Return on Investment
1= Profit (EBIT)/Total Capital Investment X100
2= 12,09,900 / 75,00,000 X 100
3= 16.13%

PROFITABILITY ANALYSIS

Particulars

Amount
1,28,61,500
1,61,51,600
12,09,900
7,35,000
4,74,900
88,970
3,85,930

Sales
Less: Cost of Production
EB.I.T.
Less: Interest on Capital
EB.T.
Less: Tax
Net Profit after tax

Tax Slab (Used for Calculating Tax)

Income
Up to Rs.
1,35,000
From 1,35,001
to 150000
From 150001
to 250000
Above 250001

Applicable Tax Rate (%)

Actual
Tax

Nil

10

1,500

20
30
Total Actual Tax:

20,000
67,470
88,970

37

PROJECTED OPERATING STATEMENT

1st Year
Amount (Rs.)

Particulars
SALES:

[A]

1,28,61,500

Cost Of Operation:
Raw Materials
Direct Wages to Workers:
Skilled

Less:

1,45,99,000

1,72,36,500

1,07,40,600

1,26,36,000

96,000

96,000

96,000

1,29,600

1,29,600

1,29,600

2,04,000
18,000
24,000
99,48,600
1,97,200

2,31,200
20,400
27,200
1,12,45,000
1,97,200
4,24,560

2,72,000
24,000
32,000
1,31,89,600
4,24,560
6,68,1608

Total Cost Of Operation:[B]

97,51,400

1,10,17,640

1,29,46,000

GROSS PROFIT:

31,25,400

35,81,360

42,90,500

9,03,500

9,06,700

9,11,500

7,06,500

7,21,200

7,15,000

3,33,000

3,67,800

4,20,000

19,43,000

19,95,700

20,46,500

11,67,100

15,85,660

22,44,000

4,95,000

4,53,000

4,11,000

(E.B.I.T - Interest)

6,72,100

11,32,660

18,33,000

Tax

1,07,630

2,49,848

4,50,515

4,44,770

7,47,812

12,29,535

Opening stock of R/M

Opening stock of F/G
Closing stock of R/M
Closing stock of F/G

[A - B]

Indirect Expenses:
Total factory cost
Total office & admn.
cost
Total selling & dist.
cost
Total Indirect Expenses:
Earning Before Interest & Tax
(Gross profit - Total indirect
expenses)
Less:

3rd Year
Amount (Rs.)

94,77,000

Unskilled
Direct expenses & utilities:
Electricity
Freight inward
Water charges
Add:

2nd Year
Amount (Rs.)

Interest
on
Borrowed Capital
Earning Before Tax

Less:

NET PROFIT AFTER TAX:

(Earning Before Tax - Tax)

38

Projected Trading A/c (1st Year)

Particulars
To
Purchase
A/c
To
Electricity
III Phase
A/c
To
Freight
Inward
A/c
To Water
charges
A/c
To Salary
A/c:

Skilled
Labour
96,000
Unskilled
Labour
1,29,600
To Gross Profit

Amount
(Rs.)

Particulars

94,77,000 By Sales A/c

2,04,000 By Closing stock A/c

Amount (Rs.)

1,28,61,500

1,97,200

24,000
18,000

2,25,600
31,25,400
1,30,58,700

1,30,58,700

39

Projected Trading A/c (2nd Year)

Particulars

Amount (Rs.)

To
opening
stock

Amount (Rs.)

1,97,200

To
Purchase
A/c
To
Electricity
III Phase
A/c
To
Freight
Inward
A/c
To Water
charges
A/c
To Salary
A/c:

Skilled
Labour
Unskilled
Labour
To Gross Profit

Particulars

1,07,40,600 By Sales A/c

By Closing stock
2,31,200 A/c

1,45,99,000

4,24,560

27,200
20,400

1,29,600
96,000

2,25,600
35,81,360
1,50,23,560

1,50,23,560

40

Projected Trading A/c (3rd Year)

Particulars

Amount (Rs.)

To
opening
stock

Amount (Rs.)

4,24,560

To
Purchase
A/c
To
Electricity
III Phase
A/c
To
Freight
Inward
A/c
To Water
charges
A/c
To Salary
A/c:

Skilled
Labour
Unskilled
Labour
To Gross Profit

Particulars

1,26,36,000 By Sales A/c

2,72,000 By Closing stock A/c

1,72,36,550

6,68,160

32,000
24,000

1,29,600
96,000

2,25,600
42,90,550
1,79,04,710

1,79,04,710

41

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

Particulars
To

To
To
To

Salary A/c:
General Mgr
84,000
Tech.
Supervisor
60,000
Accountants
42,000
Salesman
72,000
Peon
24,000
Clerk
30,000
Depreciation:
Building
49,500
Plant &
Mach.
7,70,000
Other fixed
asset
46,500
Computers
16,000
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
Interest on borrowed
capital
Loan Installment A/c
Income Tax

TO

NET PROFIT

To

To

Amount
(Rs.)

To
Gross
profit

Particulars

Amount
(Rs.)
31,25,400

3,12,000

8,82,000

5,09,000
4,95,000
3,75,000
1,07,630
4,44,770
31,25,400

31,25,400

42

Projected Profit & Loss A/c (2

Particulars
To

To

To

To
To
To

Salary A/c:
General Mgr
84,000
Tech.
Supervisor
60,000
Accountants
42,000
Salesman
72,000
Peon
24,000
Clerk
30,000
Depreciation:
Building
49,500
Plant &
Mach.
7,70,000
Other fixed
asset
46,500
Computers
16,000
Indirect Exp.:
Audit Fees
22,500
Selling Exp.
2,27,800
Misc. Exp.
27,200
Freight
Outward
27,200
Insurance
Exp.
1,02,000
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
Interest on borrowed
capital
Loan Installment A/c
Income Tax

TO NET PROFIT

Amount
(Rs.)

To
Gross
profit

nd

Year)

Particulars

Amount
(Rs.)
35,81,360

3,12,000

8,82,000

5,61,700
4,53,000
3,75,000
2,49,848
7,47,812
35,81,360

35,81,360

43

Projected Profit & Loss A/c (3

Particulars
To

To

To

To
To
To

Salary A/c:
General Mgr
84,000
Tech.
Supervisor
60,000
Accountants
42,000
Salesman
72,000
Peon
24,000
Clerk
30,000
Depreciation:
Building
49,500
Plant &
Mach.
7,70,000
Other fixed
asset
46,500
Computers
12,000
Indirect Exp.:
Audit Fees
23,500
Selling Exp.
2,68,000
Misc. Exp.
32,000
Freight
Outward
32,000
Insurance
Exp.
1,02,000
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
Interest on borrowed
capital
Loan Installment A/c
Income Tax

TO NET PROFIT

Amount
(Rs.)

3,12,000

8,74,000

6,38,500
4,11,000
3,75,000
4,50,515
12,29,535

To
Gross
profit

rd

Year)

Particulars

Amount
(Rs.)
42,90,550

42,90,550

44

42,90,550

Projected BALANCE SHEET (1st Year)

Liabilities

Amount
(Rs.)

Amount
(Rs.)

Assets

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
- dep.
49,500

4,45,500

Secured Loans:
H.D.F.C Bank
Loan

Plant & Machinery:

20,25,000

Total
- dep.

30,80,000
7,70,000

Furniture & Fixture:

Unsecured Loans:
Shriji invest.
Accounts Payable
Net Profit

Computers:
21,00,000
1,75,000
4,44,770

1,27,500
24,000

Other Fixed Assets:

Total
-dep.

2,10,000
31,500

Accounts Receivables:
Bank Balance:
H.D.F.C Bank
A/c
Cash - in hand:
Cash Balance
Stock - in hand:
Closing Stock

77,44,770

23,10,000

1,78,500
20,76,730

13,59,450
6,09,890

1,97,200
77,44,770

45

Projected BALANCE SHEET (2

Liabilities

Amount
(Rs.)

Capital Accounts:

nd

Year)
Amount
(Rs.)

Assets
FIXED ASSETS:

Parmar Dinesh

20,00,000

Land

4,40,000

4,40,000

Jadav Dharmesh

10,00,000

Building
- dep.

4,45,500
49,500

3,96,000

Secured Loans:
H.D.F.C Bank
Loan

Unsecured Loans:
Shriji invest.
Accounts Payable

Plant & Machinery:

17,75,000

Total
- dep.
Furniture & Fixture:

19,50,000
2,50,000

7,47,812

Total
-dep.

Accounts Receivables:
Bank Balance:
H.D.F.C Bank A/c
Cash - in - hand:
Cash Balance
Stock - in - hand:
Closing Stock

77,22,812

15,40,000
1,05,000

Other Fixed Assets:

Computer:
Net Profit

23,10,000
7,70,000

1,44,500
31,500

1,13,000

12,000
20,50,000
14,42,250
12,00,002
4,24,560
77,22,812

46

Projected BALANCE SHEET (3

Liabilities
Capital Accounts:
Parmar Dinesh
Jadav Dharmesh

Secured Loans:
H.D.F.C Bank
Loan

Amount
(Rs.)

20,00,000
10,00,000

rd

Year)
Amount
(Rs.)

Assets
FIXED
ASSETS:
Land
Building

4,40,000

4,40,000

3,96,000
- dep.
49,500

3,46,500

Plant & Machinery:

15,50,000

Total
- dep.

15,40,000
7,70,000

Furniture & Fixture:

Unsecured Loans:
Shriji invest.
Accounts Payable
Net Profit

Computers:
18,00,000
3,10,000
12,29,535

82,500
-

Other Fixed Assets:

Total
-dep.

1,13,000
31,500

Accounts Receivables:
Bank Balance:
H.D.F.C Bank
A/c
Cash - in hand:
Cash Balance
Stock - in hand:
Closing Stock

78,89,535

7,70,000

81,500
21,50,250

18,10,125

15,40,500

6,68,160
78,89,535

47

PROJECTED COST SHEET

1st Year
Amount (Rs.)

Particulars
Raw Materials Consumed:
Purchases
Add:
Opening Stock
Add:
Direct Wages to Workers:
Skilled
Unskilled
Add:
Direct expenses:
Electricity (III Phase)
Water charges
Freight inward
PRIME COST:

[A]

Salary to tech. supervisor Repairs

Depreciation:
Building
Plant & Machinery
FACTORY COST:

[B]

Salary to Office Staff: General Manager

Accountants Peon
Clerk Audit fees expenses
Insurance expenses

Legal fees expenses Postage & Courier

expenses Professional tax
Misc. Expenses
Stationary & printing expenses Telephone bill
expenses Depreciation:
Computer
Other fixed assets
Interest on own capital
OFFICE & ADMN. COST:

[C]

2nd Year
Amount (Rs.)

3rd Year
Amount (Rs.)

94,77,000
-

1,07,40,000

1,26,36,000

1,29,600
96,000

1,29,600
96,000

1,29,600
96,000

2,04,000
24,000
18,000

2,31,200
27,200
20,400

2,72,000
32,000
24,000

99,48,600

1,12,45,000

1,31,89,600

60,000

60,000

60,000

24,000

27,200

32,000

49,500
7,70,000

49,500
7,70,000

49,500
7,70,000

9,03,500

48

9,06,700

9,11,500

84,000
42,000
24,000
30,000
21,500
1,02,000

84,000
42,000
24,000
30,000
22,500
1,02,000

84,000
42,000
24,000
30,000
23,500
1,02,000

15,500
24,000
1,000
24,000

18,000
27,200
1,000
27,200

20,000
32,000
1,000
32,000

14,400
21,600

16,320
24,480

19,200
28,800

16,000
46,500
2,40,000

16,000
46,500
2,40,000

12,000
46,500
2,40,000

7,06,500

7,21,200

7,33,000

COST OF
PRODUCTION:
[A] + [B] + [C]
Opening Stock
Add: of F/G
Closing Stock of
Less: F/G
COST OF GOODS
SOLD:
Add:
Salary to salesman
Selling expenses
Packing expenses
Freight outward
SELLING &
DISTRIBUTUON COST:
COST OF SALES:
(COGS + S&D COST)

1,15,58,600 1,28,72,900 1,48,34,100

-

1,97,200

4,24,560

4,24,560

6,68,160

1,13,61,400 1,26,45,540

1,45,90,500

1,97,200

72,000
2,01,000
36,000
24,000

72,000
2,27,800
40,800
27,200

72,000
2,68,000
48,000
32,000

3,33,000

3,67,800

4,20,000

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

15,58,660

22,26,000

49

Schedule of Raw material consumed

Year 1
Quantity
Amount

Particulars
PAPER IN ROLL
Opening Balance
Add: Purchase during
the year
Less: Closing Stock
GUM
Opening Balance
Add: Purchase during
the year
Less: Closing Stock
PRINTING INK
Opening Balance
Add: Purchase during
the year
Less: Closing Stock
MISC. CHEMICAL
Opening Balance
Add: Purchase during
the year
Less: Closing Stock
STRING
Opening Balance
Add: Purchase during
the year
Less: Closing Stock
TOTAL R.M.
CONSUMED

Year 2
Quantity
Amount

8,85,000 88,50,000 10,03,000

-

10,500
-

84,000
-

13,600
-

15,000
-

4,42,000
-

48,000
-

6,800
-

12,000
-

95,200
-

3,90,000
-

11,900
-

6,000
-

1,00,30,000
-

54,400
-

1,05,000
-

17,000
-

1,19,000
-

94,77,000

Year 3
Quantity

Amount

11,80,000
-

1,18,00,000
-

14,000
-

1,12,000
-

8,000
-

5,20,000
-

16,000
-

64,000
-

20,000
-

1,07,40,600

1,40,000
1,26,36,000

Schedule of finished goods

Particulars
Opening
Balance
Add: Goods
manufactured
Less: Sales
during the
year
Closing Stock
(Units):

Year 1

Year 2

Quantity

Amount

1,06,20,000
1,04,50,000

Quantity

Year 3
Amount

Quantity

Amount

1,70,000

1,97,200

3,66,000

4,24,560

1,32,75,000

1,20,36,000

1,50,45,000

1,41,60,000

1,77,00,000

1,30,62,500

1,18,40,000

1,48,00,000

1,39,50,000

1,74,37,500

1,70,000

3,66,000

5,76,000

50

Schedule of fixed assets

Particulars

Gross Block
Openin
g
=++++
+++++
Total
+
Additio
n

Depreciation
Total
Accum
ulated

During
the
Year

Net
Block

Written
Down
Value

Computers
Telephone & Fax
Machines

4,95,0 4,95,0
4,45,0
00
00 49,500 49,500
00
35,00
0 35,000
5,250
5,250 29,750
30,80, 30,80, 7,70,0 7,70,0 23,10,
000
000
00
00
000
75,00
0 75,000 11,250 11,250 63,750
1,50,0 1,50,0
1,27,5
00
00 22,500 22,500
00
40,00
0 40,000 16,000 16,000 24,000
1,00,0 1,00,0
00
00 15,000 15,000 51,000

Total:

39,75, 39,75,0 8,82,00 8,82,00 30,51,5

000
00
0
0
00

Building
Boundry wall &
gate
Plant &
Machinery
Electricity inst.
& fittings
Furniture

51

Schedule of factory Overheads

Particulars
Salary to
technical
supervisor
Repairs
Dep:
Building
Plant &
Machinery
Total

YEAR 1
Amount

YEAR 2
Amount

YEAR 3
Amount

60,000
24,000

60,000
27,200

60,000
32,000

49,500

49,500

49,500

7,70,000 7,70,000 7,70,000

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

Schedule of selling overheads

Particulars
Salary to salesman
Freight outward
Selling expenses
Packing expenses
Total

YEAR 1
Amount

YEAR 2
Amount

YEAR 3
Amount

72,000
72,000
72,000
24,000
27,200
32,000
2,01,000 2,27,800 2,68,000
36,000
40,800
48,000
3,33,000 3,67,800 4,20,000

52

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.

53

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.

54

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.

55

DISCLODURE OF A/CING POLICIES

1
on straight line methods.
2 Depreciation is calculated
st
Salary is given within 1

4
5

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

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
4 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!!!

57

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 todays
environment. AFTER ALL ITS AN EN VIRONMENTAL FRIENDLY
PRODUCT!!! Its Green paper bags.

58

59

60

61