Description
final year project
EXECUTIVE SUMMARY
It has been a good learning experience to do the detailed project report on setting up of the Handicraft industry in the RIICO industrial area, Jhunjhunu as a part of my MB manufacturing plant is set up! $nder this, at first I generated the product idea of handicraft, matching #ith my profile! "he main objecti%e of the project is to the study the feasibility analysis of the handicraft manufacturing plant! fter the idea generation, the industry analysis at both the global and domestic le%el #as done to understand the mar&et trends and other factors! "hen the mar&et analysis #as done through the sur%ey in form of 'uestionnaires and inter%ie#s of the manufacturers! fter this using the statistical techni'ues did the demand analysis! (ith this the demand estimation, the technical analysis #as done! fter completing the technical analysis, the financial analysis #as done to chec& the financial feasibility of the project! It in%ol%ed the preparation of cash flo# statements, #or&ing capital re'uirement schedules, profitability statements and the balance sheets of ) years! "his pro%ided the data for using the performance indicators and other capital budgeting techni'ues! *astly, the ris& analysis #as done to estimate the ris& in%ol%ed in the project! On the #hole it #as a #onderful experience + a great learning opportunity! "he complete project #as an eye opener #hich added to my theoretical &no#ledge! "here #ere times #hen I #as disheartened + disappointed, but there #ere times #hen things #ent right + made me feel proud! ,uccess does not come at once- one has to start right from the scratch + struggle his #ay through all hardships #ith courage + determination! program! "he study has been made an attempt to gain better understanding about ho# actually the
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PROMOTER’S IDEA
"he idea of handicraft manufacturing #as concei%ed by loo&ing the aptitude + 'ualifications of the concei%er /myself0!
Qualifications:
1 MBA in Mar !tin" # $R % BCA long #ith the abo%e 'ualification belongingness to a Busin!ss& fa'il( #ill support my project! • "he idea #as generated as my $ncle is a manufacturer and exporter of #ooden handicraft! ,o this project #ould pro%ide me an in1depth &no#ledge to set up a handicraft1manufacturing mill in Jhunjhunu! • "he Indian Handicraft Industry is sho#ing continuous gro#th rate of .23 e%ery year! • "he profitability #ith #hich the current firms are running nationally as #ell as internationally is also one of the factors for concei%ing the idea of handicraft manufacturing mill! "hus, ta&ing all of the abo%e factors into account the idea of setting up a handicraft1 manufacturing mill #as established!
4
)IRM A*D PROMOTERS
)ir':
"he firm namely S+! +a,ati $an-icrafts& .+un/+unu #ill be a sole proprietorship firm and #ill function from Jhunjhunu under the concerned person5s name /myself0!
Pro'ot!r:
6ecision for entrepreneurship is promoted by 2 major reasons! "hese are7
P!rsonal C+aract!ristics
P!rsonal En1iron'!nt
P!rsonal 3oals
D!cision to B!+a1! Entr!2r!n!uriall( Busin!ss En1iron'!nt
I-!a
Moreo%er, it is an I-!a0Inno1ation that leads to#ards Entr!2r!n!urs+i2 i!e!- idea comes first and entrepreneurship follo#s after#ards!
)
$A*DICRA)T
Intro-uction
Handicrafts are uni'ue expressions and represent a culture, tradition and heritage of a country! "he Handicraft Industry is one of the important producti%e sectors! 8arious attempts ha%e been made to define this broad and di%ersified industry! "he follo#ing definition stri%es to co%er di%ersity and complexity of Handicraft Industry! D!finin" $an-icrafts: 6efinition ccording to $nited 9ations :ducational, ,cientific and Cultural "echnology Community /$9:,CO, Manila, P+ili22in!s& Octo4!r 5667: Handicrafts can be defined as products #hich are produced either completely by hand or #ith the help of tools! Mechanical tools may be used as long as the direct manual contribution of the artisan remains the most substantial component of the finished product! Handicrafts are made from ra# materials and can be produced in unlimited numbers! ,uch products can be utilitarian, aesthetic, artistic, creati%e, culturally attached, decorati%e, functional, traditional, religiously and socially symbolic and significant! D!finition accor-in" to 3o1t8 of In-ia: Handicraft can be defined, #hich is made by hand- should ha%e some artistic %alue- they may or may not ha%e functional utility!
I'2ortanc! of $an-icrafts:
•
T+! Cultural I'2ortanc!: Handicrafts play %ery important role in representing the culture and traditions of any country or region! Handicrafts are a substantial medium to preser%e of rich traditional art, heritage and culture, traditional s&ills and talents #hich are associated #ith people5s lifestyle and history!
•
T+! Econo'ic I'2ortanc!: Handicrafts are hugely important in terms of economic de%elopment! "hey pro%ide ample opportunities for employment e%en #ith lo# capital in%estments and become a prominent medium for foreign earnings! ?
2
In-ustr( Anal(sis
India is a country of rich culture, history and traditions! India is one of the major producer and supplier of Handicrafts products in the #orld! India has been major producer and supplier of handicrafts products since %ery long time! Before the industrial de%elopment, this art and industry #as a potential economic ad%antage for the country! 6uring recent years, the importance of handicrafts has been surged due to their cultural and financial %alues! "he small1scale industries including handicrafts can play a major role in the de%elopment of the economy of both de%eloped and the de%eloping countries e'ually! "he @A1@23 of the total industrial products of the #orld is produced in small #or&shops run by less than .AA people! Bor instance, Japan, #hich is at the pea& of the economic de%elopment, has considered C?3 of its industries as small and medium scale industries! In countries such as India and China, handicrafts are as high as the mechani;ed products in 'uality and %olume, and are a major source of their foreign earnings! "hese countries are focusing on the de%elopment of handicraft industry, in order to strengthen the economy! "he Indian handicrafts industry is highly labour intensi%e, cottage based and decentrali;ed industry! "he industry is spread all o%er the country mainly in rural and urban areas! Most of the manufacturing units are located in rural and small to#ns, and there is huge mar&et potential in all Indian cities and abroad! Handicraft industry is a major source of income for rural communities employing o%er six million artisans including a large number of #omen and people belonging to the #ea&er sections of the society! "he Handicraft sector is highly creati%e sector and produces large %ariety of crafts products! "his industry is locali;ed segment of the domestic and international mar&et! In India the production of craft products are done on both large and small scale! Because of lo# capital in%estment people can start their business on small scale! "hrough this flexibility the demand and supply can be managed Hough Indian Handicraft industry is considered a cottage industry, but it has e%ol%ed as one of the major re%enue generator o%er the years! "here has been consistent gro#th of .23 o%er
D
fe# years and the industry has e%ol%ed as one of the major contributor for export and foreign re%enue generation! "here is huge demand for the Indian Handicraft products in both national and international mar&et! "o match the demand and supply #ith 'uality, there is need to ha%e greater technological support and inno%ati%eness #ith the uni'ueness in industry!
9!( )acts of In-ian $an-icrafts In-ustr(
•
India5s rich cultural di%ersity and heritage pro%ides a uni'ue and huge resource for de%eloping craft products!
•
"he Indian Handicraft Industry is sho#ing continuous gro#th rate of .23 e%ery year!
•
Handicrafts industry is one of the important segments of decentrali;ed sector in India!
•
Major parts of industry operates in rural and semi urban areas throughout the country and has potential Indian and International mar&et #ith around DEAAA exporters to tap the mar&et!
•
ccording to the national census of handicrafts, underta&en by the 9ational Council for pplied :conomic Research the %alue of handicrafts produced last year #ere of Rs 4D, 4.) Crores!
•
"his Industry pro%ides huge employment opportunities to artisans that include #omen and people belonging to bac&#ard and #ea&er society! "his is one of the major sources of income there!
• • • •
India5s contribution in #orld mar&et is .!43 "he total exports of crafts items7 1 Rs! .)?.4@!4 millions! Industry5s share in IndiaFs exports71 .!2. 3 In spite of ha%ing di%ersified products, some part of Indian mar&et are still untapped and mar&et is price sensiti%e!
•
Groducts are high priced in big and metro cities, #hich are beyond, reach of people belonging middle and lo#er middle class! E
•
Craft producers ha%e to compete on price, 'uality and deli%ery for different segments!
• •
"here is poor promotion for craft products in national mar&et! "here is lac& of a#areness about ne# traditions and among craftsmen and there is need of technological support and training!
Classification:
Handicrafts industry comprises di%ersified products portfolio and there is large %ariety a%ailable in mar&et! Handicrafts products can be distinguished into follo#ing7 Metal #are, (ood #are, Hand printed textiles, :mbroidered and crocheted goods, ,ha#ls, Carpets, Bamboo products, Hari goods, Imitation je#ellery, Gaintings, :arthen#are, Jute products, Marble ,culpture, Bron;e ,culpture, *eather Groducts and other /are u going to produce all these 0 miscellaneous handicrafts!
S:OT Anal(sis Str!n"t+s:
• • • • • • • • • • • • •
*arge, di%ersified and potential mar&et! "here is large product %ariety and range is a%ailable because of di%ersified culture! It has strong, di%ersified and supporti%e retail infrastructure! 6i%ersified product range that ser%ice different mar&et! Cheap labour rates that result to competiti%e price! 9eed lo# capital in%estment! "here is flexible production flexibility! *o# barriers of ne# entry! :asy creation and de%elopment of production centres! "here is no need for macro1in%estment! Industry pro%ides potential sources of employment! Groducts are high %alue added, and handicrafts ha%e %arious applications! It is the potential source of foreign re%enue because of higher export!
:!a n!ss!s:
• •
*ac& of infrastructure and communication facilities! $na#areness about international re'uirements and mar&et! C
• • • • • • •
*ac& of co1ordination bet#een go%ernment bodies and pri%ate players! Inade'uate information of ne# technology! Inade'uate information of current mar&et trends! *ess interest of young people in craft industry! *ac& of s&illed labour! ,till confined to rural areas and small cities and untapped mar&et! *ac& of promotion of products!
O22ortuniti!s:
•
Rising demand for handicraft products in de%eloped countries such as $, , Canada, Britain, Brance, Iermany, Italy etc! 6e%eloping fashion industry re'uires handicrafts products! 6e%elopment of sectors li&e Retail, Real :state that offers great re'uirements of handicrafts products! 6e%elopment of domestic and international tourism sector! :1Commerce and Internet are emerged as promissory distribution channels to mar&et and sell the craft products!
• •
• •
T+r!ats:
• • • •
Competition in domestic mar&et! Juality products produced by competing countries li&e China, ,outh frica! Better "rade terms offered by competing countries! Increased and better technological support and R and 6 facility in competing countries!
;i'itations of $an-icraft In-ustr(
•
Inspite of ha%ing di%ersified products, some part of Indian mar&et is still untapped and mar&et is price sensiti%e! Groducts are high priced in big and metro cities, #hich are beyond the reach of people belonging middle and lo#er middle class! Craft producers ha%e to compete on price, 'uality and deli%ery for different segments! "here is poor promotion for craft products in national mar&et! @
•
•
•
• • •
"here is lac& of a#areness about ne# traditions and among craftsmen! It is difficult to balance the cultural and commercial %alue of handicraft products! Inade'uate supply chain management and distribution reduces the sector5s commercial %iability and economic sustainability! *ac& of "echnological support and training! *ac& of Research and de%elopment for &ey handicraft sectors li&e, ceramics, paper ma&ing etc! "here is shortage of s&illed craftsmen and labour to match the competition! *ac& of ability to produce in large scale and create economies of scale! Inade'uate material testing and performance measurement! Inappropriate energy supplies to rural and sub1urban areas! $ntapped and inaccessible mar&et due to poor transportation infrastructure! "here are inade'uate training centres to de%elop s&illed craftsmen!
• •
• • • • • •
Possi4l! Initiati1!s s+oul- 4! ta !n to o1!rco'! t+! li'itations of in-ustr(
•
"he primary objecti%e is to create an en%ironment that helps the industry to compete on the global basis! "o build the en%ironment that #ill focus on7 (ealth Creation, Infrastructure 6e%elopment, "raining, "echnological 6e%elopment, and Go%erty enhance the sector performance! lle%iation etc! to
•
•
#areness should be increased among craftsmen and customers through "rade :%ents, ,eminars, Craft Borums and ad%ertisements! More training centres should be opened to pro%ide proper training to craft persons! "here should be more trade sho#s to facilitate craft producers to access the mar&et! "ransportation infrastructure should be impro%ed to access the untapped mar&et that #ould be beneficial to reduce the transportation cost! Gromotion of cultural tradition and heritage! Gromotion of Indian "ourism to attract the foreign customers! 6e%eloping technologies to recycle natural resources to produce ne# products and ensure #aste minimi;ation, product durability and reliability! Gromoting Gartnership and collaboration #ith pri%ate sector!
• • •
• • •
•
.A
•
"here should be mar&et platform for craft producers belonging to rural areas to mar&et their products! 6e%elopment of electronic platform by using internet to pro%ide information, database, and mar&eting and distribution solution! Increased Gri%ate participation in industry! "here should be optimi;ed distribution net#or& and supply chain management! "hrough impro%ing labour producti%ity in a high labour intensi%e and price competiti%e mar&et! "here should be proper balance bet#een cultural and commercial %alue of craft products to sustain business opportunities! "hrough using lo# cost production methods the sustainability of small business can be impro%ed!
•
• • •
•
•
Valu! A--ition Mo-!l
"he performance of Handicraft Industry can be impro%ed and the greater %alue addition can be done by implementing follo#ing model7
• • • • •
Identify the Gotential Mar&et Ma&ing :ffecti%e Business Glan and Refinement in existing business "est Mar&eting to test the initial potential of ne# products in mar&et :ffecti%e Operational and "echnological $p gradation Hiring s&illed manpo#er, pro%ide training and a#areness about latest technology and mar&et trends and effecti%e management! Hiring s&illed manpo#er, pro%ide training and a#areness about latest technology and mar&et trends! Cost :ffecti%e Groduction- Maintain Juality ,tandards, and Gac&aging! ,et the Costing and Gricing #ith Juality ta&en to be consideration Cost :ffecti%e 6istribution 6e%elopment using both Ghysical and :lectronic 6istribution Channels /Internet, e1Commerce0 Both 9ational and International Mar&et 6e%elopment for better :xport and Boreign Re%enue!
•
• • •
•
..
o-!n $an-icraft In-ustrial O1!r1i!,
(ooden handicrafts are speciali;ed s&ills passed on from one generation to the next! "he term F#ooden handicraftsF refers to a #ide range of #ooden items carrying utilitarian and artistic %alue that are made by hand, or #ith the use of simple tools! Indian #ooden handicrafts reflect unmatched #or&manship, fine designs, and subtle elegance! "his ma&es India one of the chief exporters of #ooden handicrafts in the #orld mar&et! ccording to the classification of Indian industries, a small scale industry is defined as an industry that is7
• •
9ot registered under the Bactory ct! In%estment in fixed assets does not exceed Rs DA la&hs! Modern small scale industries li&e po#er looms etc! "raditional industries li&e handlooms, sericulture, &hadi, coir, and handicrafts!
,mall scale industries are classified into t#o categories7
• •
(ooden handicrafts fall in the category of small scale traditional industries! Rol! in In-ian Econo'( "he #ooden handicrafts industry plays an important role in the Indian economy! "his industry re'uires lo# capital in%estment and other resources! "he #ooden handicraft sector pro%ides a high ratio of %alue addition, and has emerged as one of the major sources of foreign exchange earnings for India! Indian #ooden handicrafts are much sought after the #orld o%er, and form an important export commodity of India! lthough IndiaFs handicraft exports sho# a consistent increase of fifteen percent e%ery year, its share in the international mar&et is not more than t#o percent! "he Indian #ooden handicraft sector is the second largest employment pro%ider /after agriculture0! It employs about six million artisans! (omen constitute a large section of the handicrafts industry, including people belonging to the #ea&er sections of society!
Conclusion: "he Indian Handicraft Industry stands a uni'ue place among all other industries! It represents the rich culture, tradition and heritage of India! India5s rich cultural di%ersity and .4
heritage pro%ides a uni'ue and huge resource for de%eloping craft products! "he Indian Handicraft Industry is sho#ing continuous gro#th rate of .23 e%ery year and it is one of the most important segment of decentrali;ed sector in India! Most of the part of industry operates in rural and semi urban areas throughout the country and ha%e large and potential in Indian + International mar&et! Indian Handicraft Industry pro%ides #ide range of products because of country5s di%ersified culture, traditions and heritage! "here is huge demand of Indian Handicraft products in international mar&et! Industry pro%ides ample opportunities for employment to people belonging to bac&#ard and #ea&er classes of society! Ho#e%er, Indian Handicraft Industry has the status of cottage industry in India, but it has sho#n promising gro#th and e%ol%ed as one of the major re%enue generator o%er the years! It has sho#n continuous gro#th at the rate of .21 4A3 o%er the years and contributes major role for export and foreign earnings! *o# capital in%estment, Cheap and s&illed labour, 6i%ersified product portfolio, Blexible Groduction are fe# important features of Indian Handicraft Industry! Ho#e%er, *ac& of Infrastructure + "echnological support, *ac& of a#areness of international and ne# trends and Goor Gromotional campaigns are a fe# dra#bac&s of industry #hich needs to be o%ercome! It is estimated that Handicraft Industry in India is all set to gro# #ith rapid rate in future and contribute its share to#ards economic de%elopment handsomely!
.)
MAR9ET A*A;YSIS
3!o"ra2+ical Ar!a
Jhunjhunu /RIICO Industrial rea0
O4/!cti1! of t+! sur1!(
• •
"o &no# about the mar&et potential for the handicraft "o analy;e the handicraft manufacturing, its competition, customer preferences and their satisfaction le%el!
•
"o find out the major players in the mar&et
Sourc! of Infor'ation
Grimary /Mar&et ,ur%ey0 and ,econdary data
M!t+o-olo"( A-o2t!-:
Research plan #as de%eloped through conclusi%e research design using descripti%e research analysis methods by sur%ey as detailed belo#7
R!s!arc+ A22roac+:
.! Grimary data for gathering information regarding manufacturing re'uirements and facilities a%ailable at ,he&ha#ati region #as collected by personal inter%ie# #ith different manufacturers selected on the basis of random sampling sur%ey method! 4! ,econdary data regarding #orld demand and supply positions, Indian Handicraft status and other rele%ant information #ere gathered from different #ebsites!
R!s!arc+ Instru'!nts: Juestionnaire /,ee nnexure I0 #as used to collect the data on
both the sensiti%ity of demand and supply, customer preferences and to &no# the mar&et potential and future gro#th! fter deciding the research approach and instruments, sampling plan #as prepared! .?
Sa'2lin" Proc!-ur!7 ,imple random sampling method #as used for sur%ey on
representati%e basis!
Sa'2l! Si& ??&??? units0(!ar 4E
Su22l
Ar!a Si ar .+un/+unu .ai2ur Mun-,a Manufactur!r . 2 .A ? "otal supply by these 4A manufacturer Su22l(@units0'ont+A ?AA 4,?.A 2,D2A 4,.AA .A,2DAunits Int!r!st T!r' ;oan
5K EIual Instal'!nts L 5>M 2!r annu' ;oan O0S ;oan O0S at ;oan O0S at at t+! t+! !n- of 5st t+! !n- of >nY!ar 4!"innin" +alf (!ar +alf (!ar . 42@A??2 4?A2?.) 444A)C. 4 444A)C. 4A)2)?@ .C2A).E ) .C2A).E .DD24C2 .?CA42) ? .?CA42) .4@244. ...A.C@ 2 ...A.C@ @42.2E E?A.42 D E?A.42 222A@) )EAAD. E )EAAD. .C2A4@ A *ot!: t!r' loan of >H& 6?&KKH ,ill 4! 2aiInt!r!st for t+! 5st +alf (!ar .22?4D .))444 ...A.@ CCC.2 DDD.. ???AC 444A? Int!r!st for t+! >n- +alf (!ar .??)4? .44.4A @@@.E EEE.) 222A@ )))AD ...A4 Total int!r!st for t+! t!r' loan 4@@E2A 422)?4 4.A@)D .DD24C .44.4A EEE.? )))AD
Ann!=ur!: B
r in" Ca2ital R!Iuir!'!nts It!'s Ra# materials ,toc& in process Binished goods Boo& debts "otal Current ssets *ess7 Margin for (C from long term sources /423 of RM C s0 *ess7 "rade credit for ra# materials Ban& finance for (C *or's in -a(s )A!AA .!AA ?!AA E!AA ?4!AA 5st (!ar D42AA .C)E .?D@C 42E44 .A?E2E >n- (!ar DEEAC .@@A .2@4) 4ECDD ..)?CE Br- (!ar [email protected] 4.?) .E.?C )AAA@ .444.D
4D.C@ D42AA .DADC .@4C
4C)E. DEEAC .E?AC 4ACC
)A22? [email protected] .CE?D 44?@
I9"R:," S .4 3
?)
Ann!=ur!: K D!2r!ciation
A8 Ass!t Valuation for -!2r!ciation 2ur2os! S+ar! of S+ar! of Pr!o2!rati1! Conti"!nc( Basic cost cost 'ar"in .AD)DAA @A?)2 D?2@D @)DCAA E@D22 2DC@D @DC2AA C4)?@ 2CC4. 4)AAAA ).@C@AA .@22D 4E.@@2 .)@D@ .@?4C4
Ass!t !=2!ns!s *and Building Glant + machinery Miscellaneous fixed assets "otal
Total .4.CD). .AE))2. 44@.@C4 4D)242 )DD2.EE
B8 D!2r!ciation sc+!-ul! for co'2an( la, 2ur2os!s @S;MA Building )!)?3 ?AEA4 Glant + machinery C3 C2CDC Miscellaneous fixed assets 23 ..?2@@ Annual -!2r!ciation 5D8BKM >K55D6
C8 D!2r!ciation sc+!-ul! for inco'! ta= 2ur2os!s @
VA Ass!ts 5st (r >n- (r Br- (r Building .AE))2 @DDA. CD@?. Glant + machinery + Miscellaneous fixed assets /))!)30 Total
C2.E2A 6H6?GH
2DECD4 DDKKDB
)EC2@) KDHHBK
??
Ann!=ur!: H
Profita4ilit( Esti'at!s @Esti'at!s ofr in" R!sultsA Installed Capacity Groduction Capacity $tili;ation A8 Sal!s R!alin- (r .4@24A) .DA@4)C .C2A).E .E?AC .222E)@ DEEAC DB>765G Br- (r .4@24A) [email protected] .?CA42) .CE?D .E?24E) [email protected] 7?B>??H
BGGHDD5
)DD2.EE
)DD2.EE 4?..D@ )?4?AAC D42AA .C)E .?D@C 42E44 >?H6>>H @E.?. HDGH5B5
)DD2.EE ?C4))C ).C4C)@ DEEAC .@@A .2@4) 4ECDD B?B5H6> @E.?. DB>765G
)DD2.EE E4)2AE 4@?.DEA [email protected] 4.?) .E.?C )AAA@ B6DG556 7?B>??H
)DD2.EE
>D5G6 .@?4C4 BGGHDKG
?D
Ann!=ur!: G Pro/!ct!- Cas+ )lo,
Construction P!rioSourc!s of )un-s ,hare Issue GB" #ith Interest dded Bac& 6epreciation Greliminary :xpenses (n- (r Br- (r
BGGHDKG
5K7K?K7
5HGG65>
5D>5BD>
)DD2.EE ?442E .@?4C4 )244 ?44E
.C2A)4 4@@E2A .@4C )AA44!2A HHG6G68H? 4D.C@ 4D.C@ 4D.C@ 4A))A)D 4A2@442
.C2A)4 422)?4 4ACC .EA2D.!?A D5DHKH8K? 4A2@442 @E4)DE )A).2@4
.C2A)4 4.A@)D 44?@ 4C4)@.!2A DGKGBH8H? )A).2@4 @)D24E )@DC..@
BGH6KH6
?E
Ann!=ur!: 6
O2!ratin" Cas+ flo,s "otal funds B Re%enues C Operating Costs 6 6epreciation Interest on #or&ing capital : ad%ance B Interest on term loan H Grofit before tax I "ax J Grofit after tax * 9et sal%age %alue of fixed assets M 9et sal%age %alue of current assets 9 Initial in%estment G J R Operating cash flo#s "erminal cash flo# 9et cash flo# )CC2D?C ? (r )CC2D?C 5st (r )4CCAAA .E)4CCA @2@AC2 .@4C 4@@E2A 4@?)2E )AA44!2A 4D?))?!2A >n- (r )2D4AAA .CEE4CE DD??D) 4ACC 422)?4 ED4C4A .EA2D.!?A 2@442C!DA Br- (r )C)DAAA 4A4.D@) ?D22)?!AAA 44?@ 4.A@)D ..)22CC 4C4)@.!2A C2).@D!2A
)CC2D?C .?)?2@? .?)D@44!D A .?)D@44!D A .?DE@DA
.?)?2@?
.?DE@DA
?C
Ann!=ur!: 5?
BREA9 EVE* POI*T )OR T$E PRO.ECT A Sal!s R!alisation B Varia4l! Costs Ra# Materials Interest On (or&ing Capital Go#er + (ater ,elling + 6istribution :xpenses Total C )i=!- Cost (ages nd ,alaries Repairs nd Maintainance 6epriciation dministrati%e :xpenses Interest On "erm *oan Total D Contri4ution@A%BA 201 ratio Br!a E1!n Point In T!r's Of Volu'!s Of Sal!s Br!a E1!n Point In T!r's Of Install!- Ca2acit( A'ount B>GG??? E2AAAA .@4C DAAAA 2AAAA GD56>G ?CAAAA .AAAA 4?..D@ )DAAAA 4@@E2A 5B6?656 >K>D?7> 7B87GHD K 5GGH?G5 H78BB>5 K A'ount A'ount BHD>??? BGBD??? C.42AA 4ACC D2AAA 2?.DE 6BB7HH CE2AAA 44?@ EAAAA 2C))) 5??HHG>
5B6?656 5B6?656 >D>G>KH >GB?K5G
?@
"1A3
200%
2010
2011
)i=!- cost total cost
Sales Realisation
Br!a E1!n Point In T!r's Of Volu'!s Of Sal!s
5B6?65 6 >>H>GK 7 B>GG?? ? 5GGH?G 5
5B6?65 6
232467 4
5B6?656
239650 1
BHD>?? ?
188508 1
BGBD???
188508 1
2A
2.
doc_348704569.doc
final year project
EXECUTIVE SUMMARY
It has been a good learning experience to do the detailed project report on setting up of the Handicraft industry in the RIICO industrial area, Jhunjhunu as a part of my MB manufacturing plant is set up! $nder this, at first I generated the product idea of handicraft, matching #ith my profile! "he main objecti%e of the project is to the study the feasibility analysis of the handicraft manufacturing plant! fter the idea generation, the industry analysis at both the global and domestic le%el #as done to understand the mar&et trends and other factors! "hen the mar&et analysis #as done through the sur%ey in form of 'uestionnaires and inter%ie#s of the manufacturers! fter this using the statistical techni'ues did the demand analysis! (ith this the demand estimation, the technical analysis #as done! fter completing the technical analysis, the financial analysis #as done to chec& the financial feasibility of the project! It in%ol%ed the preparation of cash flo# statements, #or&ing capital re'uirement schedules, profitability statements and the balance sheets of ) years! "his pro%ided the data for using the performance indicators and other capital budgeting techni'ues! *astly, the ris& analysis #as done to estimate the ris& in%ol%ed in the project! On the #hole it #as a #onderful experience + a great learning opportunity! "he complete project #as an eye opener #hich added to my theoretical &no#ledge! "here #ere times #hen I #as disheartened + disappointed, but there #ere times #hen things #ent right + made me feel proud! ,uccess does not come at once- one has to start right from the scratch + struggle his #ay through all hardships #ith courage + determination! program! "he study has been made an attempt to gain better understanding about ho# actually the
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PROMOTER’S IDEA
"he idea of handicraft manufacturing #as concei%ed by loo&ing the aptitude + 'ualifications of the concei%er /myself0!
Qualifications:
1 MBA in Mar !tin" # $R % BCA long #ith the abo%e 'ualification belongingness to a Busin!ss& fa'il( #ill support my project! • "he idea #as generated as my $ncle is a manufacturer and exporter of #ooden handicraft! ,o this project #ould pro%ide me an in1depth &no#ledge to set up a handicraft1manufacturing mill in Jhunjhunu! • "he Indian Handicraft Industry is sho#ing continuous gro#th rate of .23 e%ery year! • "he profitability #ith #hich the current firms are running nationally as #ell as internationally is also one of the factors for concei%ing the idea of handicraft manufacturing mill! "hus, ta&ing all of the abo%e factors into account the idea of setting up a handicraft1 manufacturing mill #as established!
4
)IRM A*D PROMOTERS
)ir':
"he firm namely S+! +a,ati $an-icrafts& .+un/+unu #ill be a sole proprietorship firm and #ill function from Jhunjhunu under the concerned person5s name /myself0!
Pro'ot!r:
6ecision for entrepreneurship is promoted by 2 major reasons! "hese are7
P!rsonal C+aract!ristics
P!rsonal En1iron'!nt
P!rsonal 3oals
D!cision to B!+a1! Entr!2r!n!uriall( Busin!ss En1iron'!nt
I-!a
Moreo%er, it is an I-!a0Inno1ation that leads to#ards Entr!2r!n!urs+i2 i!e!- idea comes first and entrepreneurship follo#s after#ards!
)
$A*DICRA)T
Intro-uction
Handicrafts are uni'ue expressions and represent a culture, tradition and heritage of a country! "he Handicraft Industry is one of the important producti%e sectors! 8arious attempts ha%e been made to define this broad and di%ersified industry! "he follo#ing definition stri%es to co%er di%ersity and complexity of Handicraft Industry! D!finin" $an-icrafts: 6efinition ccording to $nited 9ations :ducational, ,cientific and Cultural "echnology Community /$9:,CO, Manila, P+ili22in!s& Octo4!r 5667: Handicrafts can be defined as products #hich are produced either completely by hand or #ith the help of tools! Mechanical tools may be used as long as the direct manual contribution of the artisan remains the most substantial component of the finished product! Handicrafts are made from ra# materials and can be produced in unlimited numbers! ,uch products can be utilitarian, aesthetic, artistic, creati%e, culturally attached, decorati%e, functional, traditional, religiously and socially symbolic and significant! D!finition accor-in" to 3o1t8 of In-ia: Handicraft can be defined, #hich is made by hand- should ha%e some artistic %alue- they may or may not ha%e functional utility!
I'2ortanc! of $an-icrafts:
•
T+! Cultural I'2ortanc!: Handicrafts play %ery important role in representing the culture and traditions of any country or region! Handicrafts are a substantial medium to preser%e of rich traditional art, heritage and culture, traditional s&ills and talents #hich are associated #ith people5s lifestyle and history!
•
T+! Econo'ic I'2ortanc!: Handicrafts are hugely important in terms of economic de%elopment! "hey pro%ide ample opportunities for employment e%en #ith lo# capital in%estments and become a prominent medium for foreign earnings! ?
2
In-ustr( Anal(sis
India is a country of rich culture, history and traditions! India is one of the major producer and supplier of Handicrafts products in the #orld! India has been major producer and supplier of handicrafts products since %ery long time! Before the industrial de%elopment, this art and industry #as a potential economic ad%antage for the country! 6uring recent years, the importance of handicrafts has been surged due to their cultural and financial %alues! "he small1scale industries including handicrafts can play a major role in the de%elopment of the economy of both de%eloped and the de%eloping countries e'ually! "he @A1@23 of the total industrial products of the #orld is produced in small #or&shops run by less than .AA people! Bor instance, Japan, #hich is at the pea& of the economic de%elopment, has considered C?3 of its industries as small and medium scale industries! In countries such as India and China, handicrafts are as high as the mechani;ed products in 'uality and %olume, and are a major source of their foreign earnings! "hese countries are focusing on the de%elopment of handicraft industry, in order to strengthen the economy! "he Indian handicrafts industry is highly labour intensi%e, cottage based and decentrali;ed industry! "he industry is spread all o%er the country mainly in rural and urban areas! Most of the manufacturing units are located in rural and small to#ns, and there is huge mar&et potential in all Indian cities and abroad! Handicraft industry is a major source of income for rural communities employing o%er six million artisans including a large number of #omen and people belonging to the #ea&er sections of the society! "he Handicraft sector is highly creati%e sector and produces large %ariety of crafts products! "his industry is locali;ed segment of the domestic and international mar&et! In India the production of craft products are done on both large and small scale! Because of lo# capital in%estment people can start their business on small scale! "hrough this flexibility the demand and supply can be managed Hough Indian Handicraft industry is considered a cottage industry, but it has e%ol%ed as one of the major re%enue generator o%er the years! "here has been consistent gro#th of .23 o%er
D
fe# years and the industry has e%ol%ed as one of the major contributor for export and foreign re%enue generation! "here is huge demand for the Indian Handicraft products in both national and international mar&et! "o match the demand and supply #ith 'uality, there is need to ha%e greater technological support and inno%ati%eness #ith the uni'ueness in industry!
9!( )acts of In-ian $an-icrafts In-ustr(
•
India5s rich cultural di%ersity and heritage pro%ides a uni'ue and huge resource for de%eloping craft products!
•
"he Indian Handicraft Industry is sho#ing continuous gro#th rate of .23 e%ery year!
•
Handicrafts industry is one of the important segments of decentrali;ed sector in India!
•
Major parts of industry operates in rural and semi urban areas throughout the country and has potential Indian and International mar&et #ith around DEAAA exporters to tap the mar&et!
•
ccording to the national census of handicrafts, underta&en by the 9ational Council for pplied :conomic Research the %alue of handicrafts produced last year #ere of Rs 4D, 4.) Crores!
•
"his Industry pro%ides huge employment opportunities to artisans that include #omen and people belonging to bac&#ard and #ea&er society! "his is one of the major sources of income there!
• • • •
India5s contribution in #orld mar&et is .!43 "he total exports of crafts items7 1 Rs! .)?.4@!4 millions! Industry5s share in IndiaFs exports71 .!2. 3 In spite of ha%ing di%ersified products, some part of Indian mar&et are still untapped and mar&et is price sensiti%e!
•
Groducts are high priced in big and metro cities, #hich are beyond, reach of people belonging middle and lo#er middle class! E
•
Craft producers ha%e to compete on price, 'uality and deli%ery for different segments!
• •
"here is poor promotion for craft products in national mar&et! "here is lac& of a#areness about ne# traditions and among craftsmen and there is need of technological support and training!
Classification:
Handicrafts industry comprises di%ersified products portfolio and there is large %ariety a%ailable in mar&et! Handicrafts products can be distinguished into follo#ing7 Metal #are, (ood #are, Hand printed textiles, :mbroidered and crocheted goods, ,ha#ls, Carpets, Bamboo products, Hari goods, Imitation je#ellery, Gaintings, :arthen#are, Jute products, Marble ,culpture, Bron;e ,culpture, *eather Groducts and other /are u going to produce all these 0 miscellaneous handicrafts!
S:OT Anal(sis Str!n"t+s:
• • • • • • • • • • • • •
*arge, di%ersified and potential mar&et! "here is large product %ariety and range is a%ailable because of di%ersified culture! It has strong, di%ersified and supporti%e retail infrastructure! 6i%ersified product range that ser%ice different mar&et! Cheap labour rates that result to competiti%e price! 9eed lo# capital in%estment! "here is flexible production flexibility! *o# barriers of ne# entry! :asy creation and de%elopment of production centres! "here is no need for macro1in%estment! Industry pro%ides potential sources of employment! Groducts are high %alue added, and handicrafts ha%e %arious applications! It is the potential source of foreign re%enue because of higher export!
:!a n!ss!s:
• •
*ac& of infrastructure and communication facilities! $na#areness about international re'uirements and mar&et! C
• • • • • • •
*ac& of co1ordination bet#een go%ernment bodies and pri%ate players! Inade'uate information of ne# technology! Inade'uate information of current mar&et trends! *ess interest of young people in craft industry! *ac& of s&illed labour! ,till confined to rural areas and small cities and untapped mar&et! *ac& of promotion of products!
O22ortuniti!s:
•
Rising demand for handicraft products in de%eloped countries such as $, , Canada, Britain, Brance, Iermany, Italy etc! 6e%eloping fashion industry re'uires handicrafts products! 6e%elopment of sectors li&e Retail, Real :state that offers great re'uirements of handicrafts products! 6e%elopment of domestic and international tourism sector! :1Commerce and Internet are emerged as promissory distribution channels to mar&et and sell the craft products!
• •
• •
T+r!ats:
• • • •
Competition in domestic mar&et! Juality products produced by competing countries li&e China, ,outh frica! Better "rade terms offered by competing countries! Increased and better technological support and R and 6 facility in competing countries!
;i'itations of $an-icraft In-ustr(
•
Inspite of ha%ing di%ersified products, some part of Indian mar&et is still untapped and mar&et is price sensiti%e! Groducts are high priced in big and metro cities, #hich are beyond the reach of people belonging middle and lo#er middle class! Craft producers ha%e to compete on price, 'uality and deli%ery for different segments! "here is poor promotion for craft products in national mar&et! @
•
•
•
• • •
"here is lac& of a#areness about ne# traditions and among craftsmen! It is difficult to balance the cultural and commercial %alue of handicraft products! Inade'uate supply chain management and distribution reduces the sector5s commercial %iability and economic sustainability! *ac& of "echnological support and training! *ac& of Research and de%elopment for &ey handicraft sectors li&e, ceramics, paper ma&ing etc! "here is shortage of s&illed craftsmen and labour to match the competition! *ac& of ability to produce in large scale and create economies of scale! Inade'uate material testing and performance measurement! Inappropriate energy supplies to rural and sub1urban areas! $ntapped and inaccessible mar&et due to poor transportation infrastructure! "here are inade'uate training centres to de%elop s&illed craftsmen!
• •
• • • • • •
Possi4l! Initiati1!s s+oul- 4! ta !n to o1!rco'! t+! li'itations of in-ustr(
•
"he primary objecti%e is to create an en%ironment that helps the industry to compete on the global basis! "o build the en%ironment that #ill focus on7 (ealth Creation, Infrastructure 6e%elopment, "raining, "echnological 6e%elopment, and Go%erty enhance the sector performance! lle%iation etc! to
•
•
#areness should be increased among craftsmen and customers through "rade :%ents, ,eminars, Craft Borums and ad%ertisements! More training centres should be opened to pro%ide proper training to craft persons! "here should be more trade sho#s to facilitate craft producers to access the mar&et! "ransportation infrastructure should be impro%ed to access the untapped mar&et that #ould be beneficial to reduce the transportation cost! Gromotion of cultural tradition and heritage! Gromotion of Indian "ourism to attract the foreign customers! 6e%eloping technologies to recycle natural resources to produce ne# products and ensure #aste minimi;ation, product durability and reliability! Gromoting Gartnership and collaboration #ith pri%ate sector!
• • •
• • •
•
.A
•
"here should be mar&et platform for craft producers belonging to rural areas to mar&et their products! 6e%elopment of electronic platform by using internet to pro%ide information, database, and mar&eting and distribution solution! Increased Gri%ate participation in industry! "here should be optimi;ed distribution net#or& and supply chain management! "hrough impro%ing labour producti%ity in a high labour intensi%e and price competiti%e mar&et! "here should be proper balance bet#een cultural and commercial %alue of craft products to sustain business opportunities! "hrough using lo# cost production methods the sustainability of small business can be impro%ed!
•
• • •
•
•
Valu! A--ition Mo-!l
"he performance of Handicraft Industry can be impro%ed and the greater %alue addition can be done by implementing follo#ing model7
• • • • •
Identify the Gotential Mar&et Ma&ing :ffecti%e Business Glan and Refinement in existing business "est Mar&eting to test the initial potential of ne# products in mar&et :ffecti%e Operational and "echnological $p gradation Hiring s&illed manpo#er, pro%ide training and a#areness about latest technology and mar&et trends and effecti%e management! Hiring s&illed manpo#er, pro%ide training and a#areness about latest technology and mar&et trends! Cost :ffecti%e Groduction- Maintain Juality ,tandards, and Gac&aging! ,et the Costing and Gricing #ith Juality ta&en to be consideration Cost :ffecti%e 6istribution 6e%elopment using both Ghysical and :lectronic 6istribution Channels /Internet, e1Commerce0 Both 9ational and International Mar&et 6e%elopment for better :xport and Boreign Re%enue!
•
• • •
•
..
o-!n $an-icraft In-ustrial O1!r1i!,(ooden handicrafts are speciali;ed s&ills passed on from one generation to the next! "he term F#ooden handicraftsF refers to a #ide range of #ooden items carrying utilitarian and artistic %alue that are made by hand, or #ith the use of simple tools! Indian #ooden handicrafts reflect unmatched #or&manship, fine designs, and subtle elegance! "his ma&es India one of the chief exporters of #ooden handicrafts in the #orld mar&et! ccording to the classification of Indian industries, a small scale industry is defined as an industry that is7
• •
9ot registered under the Bactory ct! In%estment in fixed assets does not exceed Rs DA la&hs! Modern small scale industries li&e po#er looms etc! "raditional industries li&e handlooms, sericulture, &hadi, coir, and handicrafts!
,mall scale industries are classified into t#o categories7
• •
(ooden handicrafts fall in the category of small scale traditional industries! Rol! in In-ian Econo'( "he #ooden handicrafts industry plays an important role in the Indian economy! "his industry re'uires lo# capital in%estment and other resources! "he #ooden handicraft sector pro%ides a high ratio of %alue addition, and has emerged as one of the major sources of foreign exchange earnings for India! Indian #ooden handicrafts are much sought after the #orld o%er, and form an important export commodity of India! lthough IndiaFs handicraft exports sho# a consistent increase of fifteen percent e%ery year, its share in the international mar&et is not more than t#o percent! "he Indian #ooden handicraft sector is the second largest employment pro%ider /after agriculture0! It employs about six million artisans! (omen constitute a large section of the handicrafts industry, including people belonging to the #ea&er sections of society!
Conclusion: "he Indian Handicraft Industry stands a uni'ue place among all other industries! It represents the rich culture, tradition and heritage of India! India5s rich cultural di%ersity and .4
heritage pro%ides a uni'ue and huge resource for de%eloping craft products! "he Indian Handicraft Industry is sho#ing continuous gro#th rate of .23 e%ery year and it is one of the most important segment of decentrali;ed sector in India! Most of the part of industry operates in rural and semi urban areas throughout the country and ha%e large and potential in Indian + International mar&et! Indian Handicraft Industry pro%ides #ide range of products because of country5s di%ersified culture, traditions and heritage! "here is huge demand of Indian Handicraft products in international mar&et! Industry pro%ides ample opportunities for employment to people belonging to bac&#ard and #ea&er classes of society! Ho#e%er, Indian Handicraft Industry has the status of cottage industry in India, but it has sho#n promising gro#th and e%ol%ed as one of the major re%enue generator o%er the years! It has sho#n continuous gro#th at the rate of .21 4A3 o%er the years and contributes major role for export and foreign earnings! *o# capital in%estment, Cheap and s&illed labour, 6i%ersified product portfolio, Blexible Groduction are fe# important features of Indian Handicraft Industry! Ho#e%er, *ac& of Infrastructure + "echnological support, *ac& of a#areness of international and ne# trends and Goor Gromotional campaigns are a fe# dra#bac&s of industry #hich needs to be o%ercome! It is estimated that Handicraft Industry in India is all set to gro# #ith rapid rate in future and contribute its share to#ards economic de%elopment handsomely!
.)
MAR9ET A*A;YSIS
3!o"ra2+ical Ar!a
Jhunjhunu /RIICO Industrial rea0
O4/!cti1! of t+! sur1!(
• •
"o &no# about the mar&et potential for the handicraft "o analy;e the handicraft manufacturing, its competition, customer preferences and their satisfaction le%el!
•
"o find out the major players in the mar&et
Sourc! of Infor'ation
Grimary /Mar&et ,ur%ey0 and ,econdary data
M!t+o-olo"( A-o2t!-:
Research plan #as de%eloped through conclusi%e research design using descripti%e research analysis methods by sur%ey as detailed belo#7
R!s!arc+ A22roac+:
.! Grimary data for gathering information regarding manufacturing re'uirements and facilities a%ailable at ,he&ha#ati region #as collected by personal inter%ie# #ith different manufacturers selected on the basis of random sampling sur%ey method! 4! ,econdary data regarding #orld demand and supply positions, Indian Handicraft status and other rele%ant information #ere gathered from different #ebsites!
R!s!arc+ Instru'!nts: Juestionnaire /,ee nnexure I0 #as used to collect the data on
both the sensiti%ity of demand and supply, customer preferences and to &no# the mar&et potential and future gro#th! fter deciding the research approach and instruments, sampling plan #as prepared! .?
Sa'2lin" Proc!-ur!7 ,imple random sampling method #as used for sur%ey on
representati%e basis!
Sa'2l! Si& ??&??? units0(!ar 4E
Su22l
Ar!a Si ar .+un/+unu .ai2ur Mun-,a Manufactur!r . 2 .A ? "otal supply by these 4A manufacturer Su22l(@units0'ont+A ?AA 4,?.A 2,D2A 4,.AA .A,2DAunits Int!r!st T!r' ;oan
5K EIual Instal'!nts L 5>M 2!r annu' ;oan O0S ;oan O0S at ;oan O0S at at t+! t+! !n- of 5st t+! !n- of >nY!ar 4!"innin" +alf (!ar +alf (!ar . 42@A??2 4?A2?.) 444A)C. 4 444A)C. 4A)2)?@ .C2A).E ) .C2A).E .DD24C2 .?CA42) ? .?CA42) .4@244. ...A.C@ 2 ...A.C@ @42.2E E?A.42 D E?A.42 222A@) )EAAD. E )EAAD. .C2A4@ A *ot!: t!r' loan of >H& 6?&KKH ,ill 4! 2aiInt!r!st for t+! 5st +alf (!ar .22?4D .))444 ...A.@ CCC.2 DDD.. ???AC 444A? Int!r!st for t+! >n- +alf (!ar .??)4? .44.4A @@@.E EEE.) 222A@ )))AD ...A4 Total int!r!st for t+! t!r' loan 4@@E2A 422)?4 4.A@)D .DD24C .44.4A EEE.? )))AD
Ann!=ur!: B
r in" Ca2ital R!Iuir!'!nts It!'s Ra# materials ,toc& in process Binished goods Boo& debts "otal Current ssets *ess7 Margin for (C from long term sources /423 of RM C s0 *ess7 "rade credit for ra# materials Ban& finance for (C *or's in -a(s )A!AA .!AA ?!AA E!AA ?4!AA 5st (!ar D42AA .C)E .?D@C 42E44 .A?E2E >n- (!ar DEEAC .@@A .2@4) 4ECDD ..)?CE Br- (!ar [email protected] 4.?) .E.?C )AAA@ .444.D4D.C@ D42AA .DADC .@4C
4C)E. DEEAC .E?AC 4ACC
)A22? [email protected] .CE?D 44?@
I9"R:," S .4 3
?)
Ann!=ur!: K D!2r!ciation
A8 Ass!t Valuation for -!2r!ciation 2ur2os! S+ar! of S+ar! of Pr!o2!rati1! Conti"!nc( Basic cost cost 'ar"in .AD)DAA @A?)2 D?2@D @)DCAA E@D22 2DC@D @DC2AA C4)?@ 2CC4. 4)AAAA ).@C@AA .@22D 4E.@@2 .)@D@ .@?4C4
Ass!t !=2!ns!s *and Building Glant + machinery Miscellaneous fixed assets "otal
Total .4.CD). .AE))2. 44@.@C4 4D)242 )DD2.EE
B8 D!2r!ciation sc+!-ul! for co'2an( la, 2ur2os!s @S;MA Building )!)?3 ?AEA4 Glant + machinery C3 C2CDC Miscellaneous fixed assets 23 ..?2@@ Annual -!2r!ciation 5D8BKM >K55D6
C8 D!2r!ciation sc+!-ul! for inco'! ta= 2ur2os!s @
VA Ass!ts 5st (r >n- (r Br- (r Building .AE))2 @DDA. CD@?. Glant + machinery + Miscellaneous fixed assets /))!)30 TotalC2.E2A 6H6?GH
2DECD4 DDKKDB
)EC2@) KDHHBK
??
Ann!=ur!: H
Profita4ilit( Esti'at!s @Esti'at!s of
r in" R!sultsA Installed Capacity Groduction Capacity $tili;ation A8 Sal!s R!alin- (r .4@24A) .DA@4)C .C2A).E .E?AC .222E)@ DEEAC DB>765G Br- (r .4@24A) [email protected] .?CA42) .CE?D .E?24E) [email protected] 7?B>??HBGGHDD5
)DD2.EE
)DD2.EE 4?..D@ )?4?AAC D42AA .C)E .?D@C 42E44 >?H6>>H @E.?. HDGH5B5
)DD2.EE ?C4))C ).C4C)@ DEEAC .@@A .2@4) 4ECDD B?B5H6> @E.?. DB>765G
)DD2.EE E4)2AE 4@?.DEA [email protected] 4.?) .E.?C )AAA@ B6DG556 7?B>??H
)DD2.EE
>D5G6 .@?4C4 BGGHDKG
?D
Ann!=ur!: G Pro/!ct!- Cas+ )lo,
Construction P!rioSourc!s of )un-s ,hare Issue GB" #ith Interest dded Bac& 6epreciation Greliminary :xpenses (n- (r Br- (r
BGGHDKG
5K7K?K7
5HGG65>
5D>5BD>
)DD2.EE ?442E .@?4C4 )244 ?44E
.C2A)4 4@@E2A .@4C )AA44!2A HHG6G68H? 4D.C@ 4D.C@ 4D.C@ 4A))A)D 4A2@442
.C2A)4 422)?4 4ACC .EA2D.!?A D5DHKH8K? 4A2@442 @E4)DE )A).2@4
.C2A)4 4.A@)D 44?@ 4C4)@.!2A DGKGBH8H? )A).2@4 @)D24E )@DC..@
BGH6KH6
?E
Ann!=ur!: 6
O2!ratin" Cas+ flo,s "otal funds B Re%enues C Operating Costs 6 6epreciation Interest on #or&ing capital : ad%ance B Interest on term loan H Grofit before tax I "ax J Grofit after tax * 9et sal%age %alue of fixed assets M 9et sal%age %alue of current assets 9 Initial in%estment G J R Operating cash flo#s "erminal cash flo# 9et cash flo# )CC2D?C ? (r )CC2D?C 5st (r )4CCAAA .E)4CCA @2@AC2 .@4C 4@@E2A 4@?)2E )AA44!2A 4D?))?!2A >n- (r )2D4AAA .CEE4CE DD??D) 4ACC 422)?4 ED4C4A .EA2D.!?A 2@442C!DA Br- (r )C)DAAA 4A4.D@) ?D22)?!AAA 44?@ 4.A@)D ..)22CC 4C4)@.!2A C2).@D!2A
)CC2D?C .?)?2@? .?)D@44!D A .?)D@44!D A .?DE@DA
.?)?2@?
.?DE@DA
?C
Ann!=ur!: 5?
BREA9 EVE* POI*T )OR T$E PRO.ECT A Sal!s R!alisation B Varia4l! Costs Ra# Materials Interest On (or&ing Capital Go#er + (ater ,elling + 6istribution :xpenses Total C )i=!- Cost (ages nd ,alaries Repairs nd Maintainance 6epriciation dministrati%e :xpenses Interest On "erm *oan Total D Contri4ution@A%BA 201 ratio Br!a E1!n Point In T!r's Of Volu'!s Of Sal!s Br!a E1!n Point In T!r's Of Install!- Ca2acit( A'ount B>GG??? E2AAAA .@4C DAAAA 2AAAA GD56>G ?CAAAA .AAAA 4?..D@ )DAAAA 4@@E2A 5B6?656 >K>D?7> 7B87GHD K 5GGH?G5 H78BB>5 K A'ount A'ount BHD>??? BGBD??? C.42AA 4ACC D2AAA 2?.DE 6BB7HH CE2AAA 44?@ EAAAA 2C))) 5??HHG>
5B6?656 5B6?656 >D>G>KH >GB?K5G
?@
"1A3
200%
2010
2011
)i=!- cost total cost
Sales Realisation
Br!a E1!n Point In T!r's Of Volu'!s Of Sal!s
5B6?65 6 >>H>GK 7 B>GG?? ? 5GGH?G 5
5B6?65 6
232467 4
5B6?656
239650 1
BHD>?? ?
188508 1
BGBD???
188508 1
2A
2.
doc_348704569.doc