product project report

A

PRODUCT PROJECT REPORT

On

PAPER NAPKIN

Submitted By

Meghna V. Vadariya

T.Y.B.B.A. (A)

Roll No. 56

Guided By

Prof. Ajay Jayswal

Submitted To

Saurashtra University

Rajkot

Shri Patel Kelvani Mandal College of

Technology

College Road, Junagadh.

Academic year

2016-2017

DECLARATION

I, undersigned, Meghna V. Vadariya the student of T.Y.B.B.A.,

Here by declared that this Project work is my own work and it has been

carried out under the guidance of Prof. Ajay jayswal of Shri P.K.M.

College of Technology & B.Ed. This work has not been previously

submitted to any other University or institution for any examination.

Place: Junagadh

Date: 26th Sept, 2016

(Signature)

(Meghna V. Vadariya)

PREFACE

Being a student of TYBBA I am extremely happy to submit this

project report on small scale industry under the prescribed syllabus of

Saurashtra University for particularly introducing a subject

“Entrepreneurship”. Entrepreneurship is management of SSI with a view

to create and develop such skill and attitude among the student in

practical and professional education faculty.

The goal or object of this report is to make student learn about

various factors that should be a kept in mind before starting up and

industry in other words, it is purely entrepreneurship development and

training for establishment of SSI.

The contribution of SSI is 45% in the economic growth of the

country. So it becomes essential to study the management and working

of SSIs as a student of management.

ACKNOWLEDGEMENT

It is really the matter of a great pleasure for me to undertake and

presents this creative and practical work, a product project report of

TYBBA on Paper cup.

This report has been prepared by keep in mind various aspects

relating to financial capacity of the plant which is to be an established,

the fast growth and development in the field of paper cup industry.

I sincerely thank Prof. Ajay jayswal for their guidance and

encouragement in carrying out this project work. I would also like to

express my gratitude to SSIs and all those who have assisted me during

the period of my project work.

Finally yet importantly, the help & support of my friends and

professors have made this venture successful. Therefore, I would like to

thank them all from care of my heart.

- Meghna V. Vadariya

INDEX

Sr. No Particulars Pg.

No.

1 Project At Glance 1

2 Owners & Promoters Bio-Data 2

3 Paper Napkin Varieties 4

4 Project Location’s Justification 5

5 Introduction of Product 9

6 History of Product 10

7 Market Potential 11

8 Production Schedule 12

9 Financial Aspects 14

10 Means of Finance 17

11 Financial Analysis 18

12 Profitability of project 19

13 Project summary 20

14 Balance sheet for 5 years 21

15 B.E.P. statement for 5 years 26

16 Project Advancement and Future

Planning

29

17 Bibliography 30

PROJECT AT GLANCE

Name of the Unit: Rima paper napkins

Address for communication: 366, GIDC-1,

Dolatpara,

Junagadh - 362001

Type of Unit: Small Scale Industry

Name of product: Paper napkin

SSI Registration No.: Apply for registration

Subsidy Registration No.: Apply for registration

Details of the Location & Unit: 365, GIDC-1,

Dolatpara,

Junagadh - 362001

Partner’s Name & Address: Megha V. Vadariya

Ta.- Junagadh

Dis.- Junagadh

Mo.-

Denisha A. Ladani

Ta.- Keshod

Dis.- Junagadh

Mo.-

OWNERS & PROMOTERS BIO-DATA

(PARTNER’S DETAILS)

There are mainly two partners:

A. Meghna V. Vadariya

B. Denisha A. Ladani

(A) Megha V. Vadariya

Name : Megha V. Vadariya

Age : 20 years

Religion : Hindu

Address for Communication :

Financial Contribution : 50%

Responsibility : finance manager

Education : undergoing BBA from

Saurashtra University

Share in profit : 50%

(B) Denisha A. Ladani

Name : Denisha A. Ladani

Age : 23 years

Address for communication :

Financial Contribution : 50%

Responsibility : Marketing manager

Education : MBA from Gujarat

University

Share in profit : 50%

PAPER NAPKINS VARITY

PROJECT LOCATION’S JUSTIFICATION

Location is the prime factor which has to be considering for

starting a new business. The location should be decided by considering all

factors and making independent analysis of each variable separately

through cost benefit analysis and the location should either be near to the

market (i.e. customers) or where the raw material is easily available in

adequate quantity.

Availability of raw material :

The raw material is an important and initial part of

Production process. It should be easily available at reasonable price and

time because it is first step of production process for any industry.

In case of this industry the basic raw material is paper which

are available from nearby districts. Our Raw material supplier is

Luxurious Paper Products, Metoda GIDC, Rajkot.

Labour resources:

Labour resources are the second important thing for any

industry for effectively running and achieve maximum production.

Labour should be available at least cost.

In this case skilled and unskilled labour required which is

available from nearby villages.

Electricity supply:

The continuous electricity supply is very important for

manufacturing process of this unit to run the machines. And due to

residential area the electricity company provides electricity continuous

and at a current rate.

Transportation facilities:

Transport the raw material and finished products from one

place to another place each industry should required of good transport

facility. There are many transport companies situated in nearby area.

Market facilities:

The demand of paper napkins is increasing at a very high

rate because it is easy to use, hygienic and eco-friendly. As paper napkins

are a product of daily consumption and necessity, their marketing will not

be a problem as the consumers are aware of the advantages of using paper

napkins. The raw materials are indigenously available and the

manufacturing process is also simple.

Paper napkins find potential market in IT companies,

Educational Institutions Canteens, Industrial Canteens, Restaurants, Fast

Foods, Catering People, Tea Shops, Paper Product Dealers and Super

Markets.

Miscellaneous Factors:

We have selected our location on the basis of following

factors.

a) Availability of infrastructural facility.

b) Availability of Banks or financial institution.

c) Availability of bodies such as Hospitals,

dispensaries, post office, etc… enjoyed by the

communities.

Location

Registered office:

366, GIDC-1,

Dolatpara,

Junagadh – 362001

Production Location:

“RIMA PAPER NAPKINS”

365, GIDC-1,

Dolatpara,

Junagadh - 362001

INTRODUCTION OF PRODUCT

Paper napkin is a small piece of tissue paper used for hand or face

cleaning. These are becoming popular with the catering more and more

used in households, restaurant, institutions etc. These are absorbent,

hygienic, and light can be had with attractive printing.

Paper napkin also became popular with expense-conscious

restaurateurs, and not simply for their lower initial cost; they were found

to be more convenient and to eliminate the costs of, day in and day out,

sending cloth napkins out to be laundered and receiving them back into

inventory. Equally important, with paper napkins there is never the

possibility of giving a guest a napkin with a residual stain on it or, sin of

all restaurant sins, giving a dinner a used napkin.

Paper napkins come in a broad range of sizes, patterns, and quality.

There are paper napkins with every kind of holiday design printed on

them, colorful napkins for colorful parties, and even paper napkins that

closely resemble cloth. You may order custom-designed paper napkins

with the names and dates of the commemorative occasions you specify

printed on them.

HISTORY OF PAPER NAPKIN

Conventionally, the napkin is often folded and placed to the

left of the place setting, outside the outermost fork. In a restaurant setting

or a caterer’s hall, it may be folded into more elaborate shapes and

displayed on the empty plate. Origami techniques can be use to create a

three-dimensional design. A napkin may also be held together in a bundle

with cutlery by a napkin ring. Alternatively, paper napkin may be

contained with a napkin holder.

Napkins were used in ancient Roman times. One of the

earliest references to table napkins in English date to 1384-85.

Summaries of napkin history often say that the ancient

Greeks used bread to wipe their hands. This is suggested by a passage in

one of Alciphron’s letters (3:44), and some remarks by the sausage seller

in Aristophanes’ play, the knights. The bread in both texts is referred to

as apomagdalia, which simply means bread from inside the crust known

as the crumb, and not special “napkin bread”. The use of paper napkins is

documented in ancient china, where paper was invented in the 2nd

century

BC. Paper napkins were known as chih pha, folded in squares, and used

for the serving of tea. Textual evidence of paper napkins appears in a

description of the possessions of the yu family, from the city of

Hangzhou.

MARKET POTENTIAL

Tissue paper is a lightweight paper and has become one of

the most essential commodities of daily life. The tissue paper come into

use in 1920’s and since then the consumption of tissue paper has been

consistently increasing. The continuous developments in the tissue paper

industry have enabled individuals to lead a more sterile and hygienic life.

The habit of having a paper napkin or a face tissue or hand

tissue in a handbag or a travel kit has become a regular practice among

the middle-class in the rural regions of emerging countries. Most

interestingly, the middle-class-especially women believe that they are

people from the elite stratum of society through these practices.

Urbanization has made a profound impact on our dining

habits. One of the notable changes is the increased use of paper napkins

now a days, which was otherwise could be seen only in western countries.

Plain paper napkins are now being widely used in restaurants,

households, vehicles, industries, institutions etc. Paper napkins with

colorful layout and attractive designs are having bright prospects with our

restaurants focusing on tidiness and adornment.

PRODUCTION SCHEDULE

A. Production Process

Tissue paper roll are fed to the flexographic printing

machine with attachment for the manufacturing of paper napkins wherein,

these are printed and cut to the size with the device already fixed with the

machine. These are then packed in numbers or as desired.

B. Production capacity

Installed 100%:

The production capacity of this established plant will be

12,000 sheets per day.

Utilized 50%:

The production capacity of this established plant will be

6,000 sheets per day.

The schedule for production would be as follows:

9 a.m. to 1 p.m.

&

3 p.m. to 7 p.m.

The whole production process would be carried out

simultaneously and the post production will also be speedily.

FINANCIAL ASPECTS

A. Fixed capital

i. Land and Building:

Sr. No. Particulars Sq. m. Price (Per

Sq. m.)

Total value

(Rs.)

1 land 100 15,000 15,00,000

2 Building 80 10,000 8,00,000

Total 23,00,000

ii. Machinery and Equipments

Sr. No. Description Quantity Value

1 2 color flexographic machine with

attachment of paper napkin

1 4,00,000

2 Testing equipment L.S.

3 Edge sealing and cutting machine L.S.

4 Hand tools L.S.

5 Sales tax, freight & insurance Etc. 20,000

Total 4,20,000

iii. preliminary expenses 10,000

Total Fixed capital (i + ii + iii) 27,30,000

B. Working capital

i. Staff and Labour (Per Month):

Sr. No. Description No. Salary Total

1 Sale Cum Production supervisor 1 12,000 12,000

2 Skilled Worker 1 8,000 8,000

3 Unskilled Worker 1 5,000 5,000

Total 25,000

ii. Raw Materials Requirements (Per Month):

Sr. No. Description Quantity Value

1 Tissue Paper 21 GSM 6.25 Kg 1,87,500

2 Inks & other consumables L.S. 5,000

3 Packing Material L.S. 500

Total 1,93,000

iii. Other Expenses (Per Month):

Sr. No. Description Amount

1 Electricity Charges 1,300

2 Advertisement & travelling 1,000

3 Transport 1,500

4 Consumable and stores etc. 500

5 Postage Exp. / telephones 500

6 Stationary 500

7 Repairs and maintenances 1,000

Total 6,300

iv. Total Working Capital for 3 months:


(Per Month)

1 Raw material (1,93,000 x 3) 5,79,000

2 Salary (25,000 x 3) 75,000

3 Other expenses (6,300 x 3) 18,900

Total 6,72,900

TOTAL CAPITAL INVESTMENT:

Fixed Capital : 27,30,000

(+) Working Capital for 3 months : 6,72,900

Total : 34,02,900

MEANS OF FINANCE

(1) Vadariya Megha V. 17,01,450

(2) Ladani Denisha A. 17,01,450

Total Capital Investment 34,02,900

Financial Analysis

A. Cost of Production (Per Year):


1 Total Recurring Cost 26,91,600

2 Depreciation on Land @ 10% 1,50,000

3 Depreciation on Building @ 5% 4,000

4 Depreciation on Machine @ 10% 42,000

Total 28,87,600

B. Turnover (Per Year):

Sr. No. Description Qty Rate(Rs.) Value(Rs.)

1 Paper Napkins 18,00,000 2 36,00,000

Total 36,00,000

C. Net Profit (Before Taxation)(Per Year):

Turn Over : 36,00,000

(-)Cost of Production : 28,87,600

Total : 7,12,400

PROFITABILITY OF PROJECT

Particulars Amount

Sales and production 36,00,000

Raw materials 23,16,000

Salary & wages 3,00,000

Electricity Consumed 75,600

Taxes – Insurance 2,40,000

Depreciation 1,96,000

PROJECT SUMMARY

Particular Amount

Sales 36,00,000

(-) Variable cost 23,31,600

Contribution 12,68,400

(-) Fixed cost 3,60,000

PBIT 9,08,400

(-) Tax (33.33%) 3,02,770

PAT 6,05,630

BALANCE SHEET FOR 5 YEARS

For 2016-17

Liabilities Amount Assets Amount

Capital (1:1) Land – 15,00,000

Meghna - 17,01,450 (-) Dep. -1,50,000 13,50,000

Denisha -17,01,450 34,02,900

Building -8,00,000

(-) Dep. -4,000 7,96,000

Net Profit (1:1)

Meghna – 3,02,815 Machine -4,00,000

Denisha – 3,02,815 6,05,630 (-) Dep. -42,000 3,58,000

Cash & Bank Bal. 15,04,530

40,08,530 40,08,530

For 2017-18


Capital (1:1) Land – 13,50,000

Meghna – 17,01,450 (-) Dep. -1,50,000 12,00,000

Denisha -17,01,450 34,02,900

Building -7,96,000

(-) Dep. -4,000 7,92,000

Net Profit (1:1)

Meghna – 3,87,379 Machine -3,58,000

Denisha – 3,87,379 7,74,759 (-) Dep. -42,000 3,16,000


41,77,659 41,77,659

For 2018-19


Capital (1:1) Land – 12,00,000

Meghna – 17,01,450 (-) Dep. -1,50,000 10,50,000

Denisha -17,01,450 34,02,900

Building -7,92,000

(-) Dep. -4,000 7,88,000

Net Profit (1:1)

Meghna – 4,71,943 Machine -3,16,000

Denisha – 4,71,943 9,43,887 (-) Dep. -42,000 2,74,000


43,46,787 43,46,787

For 2019-20


Capital (1:1) Land – 10,50,000

Meghna – 17,01,450 (-) Dep. -1,50,000 9,00,000

Denisha -17,01,450 34,02,900

Building -7,88,000

(-) Dep. -4,000 7,84,000

Net Profit (1:1)

Meghna – 5,56,508 Machine -2,74,000

Denisha – 5,56,508 11,13,016 (-) Dep. -42,000 2,32,000


45,15,916 45,15,916

For 2020-21


Capital (1:1) Land – 9,00,000

Meghna – 17,01,450 (-) Dep. -1,50,000 7,50,000

Denisha -17,01,450 34,02,900

Building -7,84,000

(-) Dep. -4,000 7,80,000

Net Profit (1:1)

Meghna – 6,41,072 Machine -2,32,000

Denisha – 6,41,072 12,82,144 (-) Dep. -42,000 1,90,000


46,85,044 46,85,044

B.E.P. Statement for 5 years

Particulars 1st year 2

nd year 3

rd year 4

th year 5

th year

50% 60% 70% 80% 90%

Sales 36,00,000 43,20,000 50,40,000 57,60,000 64,80,000

Less

Variable

Exps.

Raw

materials

23,16,000 27,79,200 32,42,400 37,05,600 41,68,800

Electricity

charges

15,600 18,720 21,840 24,960 28080

Total

Variable

Exps.

23,31,600 27,97,920 32,64,240 37,30,560 41,96,880

=

Contribution

12,68,400 15,22,080 17,75,760 20,29,440 22,83,120

Less Fixed

Cost

Salary & 3,00,000 3,00,000 3,00,000 3,00,000 3,00,000

wages

Advertisem

ent &

travelling

12,000 12,000 12,000 12,000 12,000

Transport 18,000 18,000 18,000 18,000 18,000

Consumable

and stores

etc.

6,000 6,000 6,000 6,000 6,000

Postage

Exp. /

telephones

6,000 6,000 6,000 6,000 6,000

Stationary 6,000 6,000 6,000 6,000 6,000

Repairs and

maintenance

12,000 12,000 12,000 12,000 12,000

Total fixed

cost

3,60,000 3,60,000 3,60,000 3,60,000 3,60,000

Net Profit 9,08,400 11,62,080 14,15,760 16,69,440 19,23,120

B.E.P. 28.38% 23.65% 20.27% 17.74% 15.77%

P.V. Ratio:

Contribution

= x 100

Sales

12,68,400

= x 100

36,00,000

= 35.23%

Break Even Point (in Rs.):

Fixed Cost

= x 100

P.V. Ratio

3,60,000

= x 100

35.23

= 10,21,856.37

PROJECT ADVANCEMENT AND FUTURE

PROSPECTS

Paper napkin is used in all hotels and restaurants, it is used

by human being as a substitute if handkerchief. In homes at the time of

dinner, lunch or breakfast it is extensively used. Paper napkin is a costlier

affair and cannot be afforded by all categories of persons. Therefore, high

or medium class family uses it. Paper napkin age becoming popular with

catering industry due to its manifold uses. These are absorbent, hygienic

light and can be had with attractive printing.

From a market survey Indian paper industry has a huge

potentials and prospects in coming future. In our country, demand for

paper is rapidly increasing.

BIBLIOGRAPHY

Books:

Production Management

- By: Himalaya Publishing House

Marketing Management

- By: Tapan K. Panda

Financial Management

- By: B.S. Shah

Human Resource Management

- By: K. Aswathappa

Websites:

www.google.com

Wikipedia