BUSINES

S PLAN
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 CRAFT
HDFC there is nearly 21, 11,000 tones of craft demand in the INDUSTRY
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.
 OWNERS -Tushar gupta, davneet chopra , Mayank Sharma, Rahul
kundalia,Gypsa

Your Business Name – Craft industry

Address Line 1- 24 plot no industrial area,
City- Bhilwara, Rajasthan

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
ANNUAL COST= 378000 x 12 =
MONTHLY COST= 13500 x 28 = RS 378000 4536000
I.
II. General company decription

1) Paper Mill manufactures paper that is required in

We will be making
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 – 5 acre ( 3 Cr )

Main bdg- 180 lg x 40’ wide a nd 35’ height

Shed- 180 lg. X40’ width x 35’ height suitable for 5 ton EOT
crane

Bore well with tank

Office- 30’ x 45’

Boiler house- 40’ x 40’

Godown- 40’ x 120’

Electrical room- 40’ x 50’

Work shop- 40’ x 30’

Labour quarters

Raw material godown

Crane
Construction – 2 Cr

Machinery- 9 Cr

Working Capital – 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:

 It costs nearly 5 crores to establish 20 tones of craft industry by the waste material
produced from the agricultural material.
 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
8,76,96,00 11,69,28,00 13,15,44,00 14,61,60,00
Sales 0 10,23,12,000 0 0 0
Other Income 0 0 0 0 0
8,76,96,00 11,69,28,00 13,15,44,00 14,61,60,00
0 10,23,12,000 0 0 0
Expenditure
5,38,05,20
Cost of production 0 6,30,15,950 6,82,77,950 7,32,47,450 6,94,19,450

3,19,23,50
Depriciation 0 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

13,18,091.
Net Profit After Tax 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

PV PV
Facto Facto
r r
Net Cash Flow @20 @25
After Tax PV Factor @ 15% PV of CFAT % PV of CFAT % PV of CFAT

0.833 0.800
3,32,41,591 0.8696 28905731 3 27701326 0 26593273
 0.694 0.640
3,51,73,261 0.7561 26596039 4 24425876 0 22510887
0.578 0.512
4,00,28,370 0.6575 26319303 7 23164566 0 20494525
0.482 0.409
4,53,10,650 0.5718 25906511 3 21851201 6 18559242
0.401 0.327
5,66,79,809 0.4972 28179882 9 22778344 7 18572840
0.401 0.327
1,40,00,000 0.4972 6960474 9 5626286 7 4587520
14,28,67,94
1 125547598 111318287

IRR 22
Projected Cost Sheet
Year
Year 1(60%) Year 2(70%) Year 3(80%) 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 1512000 1134000 756000 378000

goods
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

131544
Sales 87696000 102312000 116928000 0

sale price every year 29000 29000 29000 29000

104328
sp * production 69552000 81144000 92736000 0

output(tons) 3024 3528 4032 4536

131544
87696000 102312000 116928000 0

raw material input(tons) 3780 4410 5040 5670

CALCULATION OF DEPRICIATION

Particulars Land Building Plant & Furniture &

Machinery Fixture

Cost as per project 3,00,00,000.00 2,00,00,000.00 8,50,00,000.00 10,00,00

Total 30000000.00 20000000.00 85000000.00 1000000.0

Depreciation (%) - 10% 14% 18%

Depreciation-1st yr. 0.00 2000000.00 11823500.00 181000.0

W.D.V. 30000000.00 18000000.00 73176500.00 819000.0

Depreciation-2nd yr. 1800000.00 10178851.15 148239.0

W.D.V. 30000000.00 16200000.00 62997648.85 670761.0

Depreciation -3rd yr. 1620000.00 8762972.96 121407.7

W.D.V. 30000000.00 14580000.00 54234675.89 549353.2

Depreciation-4th yr. 1458000.00 7544043.42 99432.9

W.D.V. 30000000.00 13122000.00 46690632.48 449920.3

Depreciation- 5th yr. 1312200.00 6494666.98 81435.5

W.D.V. 30000000.00 11809800.00 40195965.50 368484.7

 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
Rs.
SALES Rs. 5,38,05,200.00 6,30,15,950.00 Rs. 6,82,77,950.00 Rs. 7,32,47,450

LESS OPERATION Rs. Rs. Rs.

EXPENCES Rs. 71,71,200.00 81,31,200.00 90,91,200.00 1,00,51,200.00
         
 Rs.
CONTRIBUTION COST Rs. 4,66,34,000.00 5,48,84,750.00 Rs. 5,91,86,750.00 Rs. 6,31,96,250

Rs.
LESS FIXED COST Rs. 4,36,23,500.00 3,79,17,751.00 Rs. 3,21,76,247.00 Rs. 2,68,42,837
         
Rs.
NET PROFIT Rs. 30,10,500.00 1,69,66,999.00 Rs. 2,70,10,503.00 Rs. 3,63,53,413

PV RATIO 0.866719202 0.870966001 0.866850132 0.8627774

BREAK EVEN POINT 50331756.71 43535282.59 37118581.17 31112120

BEP % 93.54% 69.09% 54.36% 42.4

sensitivity analysis

income original cost 5% increase in raw material inc

sales 87696000 87696000 sale

                   

expenditure exp

cost of sales 53805200 56495460 cos

depreciation 14004500 14004500 dep

                   

net profit before tax 19886300 17196040 net

tax 6562479 5674693 tax

                   

net profit after tax 13323821 11521347 net

difference in diff
profit 1802474 pro
decrease in profit margin 13.53% dec