Pak Recycling Pvt(Ltd)

PakRecyclingPvt (Ltd)
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Never refuse to reuse
University of the Punjab Gujranwala Campus,
Gujranwala
Academic Year
2012-2016

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Pak Recycling Pvt (ltd)
Never refuse to reuse
By
Ayesha Mushtaq BB12007
Tahira Ayub BB12015
Fazeela Mushtaq BB12020
Farwa Yousaf BB12027
Zubaida Abaidullah BB12061
Submission Date: 8-12-2015
Supervisor: Mr. Naveed Iqbal Chudhary
Copyrights 2015
All rights reserved, no part of this report documentation may be
reproduce, stored in retrieval system, or transmitted in any form or by
any means without prior permission of University of Punjab Gujranwala
Campus.

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Executive Summary
Pak recycling Pvt (Ltd), Head office at Industrial estate no 2. It is a startup
company that will collect all used goods like plastic bottles, old jeans, used tires,
wood, plastic bags etc for household solutions. Converting the waste into useful
products, expanding business in the local and regional communities. It is owned by
5 members, and is in the process ofchoosing a legal business form.
The Pak Recycling Pvt (Ltd), will producejewellary box, coin collection box,
kitchen wearing products, home decoration, bags by using the plastic bottles, nuts,
a metal rod and old jeans. Company involves the process ofcollection of raw
material, cleaning, molding & shaping, coloring and painting, packaging and
delivering. The Company needs skilled, semi-skilled and un-skilled workers to
perform the different activities of the business. The company’s marketing strategy
is designed carefully to develop a strong relationship with customers and
reputation of the company.
We are committed to provide the innovative products by reusing the used waste
material that is consistent with the environmental safety and public health. We
strive to achieve the highest stander of “Stylish Design” by perfecting the concept
of style, interface, and finishing of each of our product. We are committed to
contributes to national and social development through job creation, tax payment,
and promotion of cultural and welfare programs. We strive to prevent
environmental pollution and imply all measures necessary to conserve precious
natural resources.

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Table of contents
Pak Recycling Pvt (Ltd)…………………………………………………..2
Executive Summary……………………………………………………....3
Business Description……………………………………………………..5
Company Description……………………………………………………7
Environmental Analysis………………………………………………....8
Marketing Strategy……………………………………………………...9
Management…………………………………………………………...13
Financial projection……………………………………………………17
Appendices……………………………………………………………29

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Business Description
The name of company is Pak recycling Pvt(Ltd).It will collect all used goods like
plastic bottles, old jeans, used tires, wood, plastic bags etc for household solutions.
kangni wala road is the place where we collect all used materials and other
operations will be taken there.
We will collect all these materials and then recycle it until our recycling unit
converts them in to the very useful things, which can be used for various purposes.
We will establish a facility outlay, from where our customers will purchase our
products ororder us to recycle the products accordingto their specifications,
whatever they want .Our target customer is the general public.
Objectives
Create a company that provides the customer satisfaction
Create a company that provides customers not only the productbut also the
benefits that customers valued
Develop the company that grows on its own assets
Expand the business in Gujranwala division in first 3 years, and then to whole
Punjab
Do not waste the used goods, recycle them into the valuable products
Reasons forsetting up
Everyone should know the importance of used goods. There are many ways to
recycle/reuse them into multiple products formany purposes, suchas decorate the
homes, for kitchen purpose, for wearing, for lawn sitting etc. One of our friends
was going to a morning walk, when he noticed that people were throwing their
garbage, there was a huge amount of plastic bottles may be they were beverage
lovers. But they don’t know how they can use these bottles for various purposes.
From there we get the idea of recycling and reuse them. When we were working on
that thing, suddenly an idea come into our mind we should recycle/reuse all the
used things.
So we start searching the people, market, internet and the media. We noticed that
many people love to decorate their homes, for kitchen purposes, lawn sittings,

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hanging clothes etc.so an idea come into our mind that we should target that group
of people, who are much founded of decorating their homes.
Products and services
Our company will use the plastic bottles, plastic rappers, old jeans, wood, used
tires etc. And process them into various stages until they convert into the final
form. By recycling that material, we will producethe following products
1. Jewellary boxes
2. Jeans bags & shoes
3. Roped tyre table
4. Coin collection boxes
5. Home decoreproducts
6. Kitchen wears products
7. Wood hanging racks
Vision:
Being the largest firm to provide the best solution of used waste material.
Mission:
To provide the innovative products byreusing the used waste material that are
consistent with the environmental safety and public health

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Company description
We will form the private limited company. Initial investment required is 1 million.
The total number of members will be 5.All the members will equally invest into
the company. The name of company will be Pak Recycling Pvt (Ltd).The head
office will be located at GT road near Chand Da Qila. The production unit will be
located at kangni wala road. There will be 5 units in the factory.
1. Cleaning
2. Cutting
3. Molding
4. Painting
5. Packaging
There will be 5 departments in the Pak Recycling Pvt (Ltd).
1. Productiondepartment
2. Sales department
3. Finance department
4. Research & development department
5. Human resource department
The company will provide a wide range of products forhousehold solutions. We
will producethe jewelry box, coin collection box, kitchen wearing products, home
decoration, by using the plastic bottles, nuts and a metal rod. We will producethe
jeans bags and shoes by using old jeans. Many people love their jeans but when the
trend changes, and the jeans becomeold they want to go along the new trend. But
they don’twant to throw their old jeans. So it’s a chance for those jeans lovers that
they can use their jeans for many purposes.
We will producetyred table, by using the used tyres.

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Environmental Analysis
PoliticalFactors
Rules and regulations of Government of Pakistan can affect the recycling business.
Average 50% of the total solid waste is collected from different cities of the
Pakistan and in the comparatively clean cities that ratio is 75%. Govt. imposes the
condition on locally collection of the used waste material for the sake of the export
of waste material and only the govt. representatives are allowed to collect the
waste material so that condition affect the availability of the used waste material or
any law pass by the legislation that affect the recycling business in a negative way.
To protect the environment from the used waste govt. starts the waste material
management projects under its own supervision then it can also affect the recycling
business.
Economic Factors:
Economic factors such as inflation rate, interest rate and income level can also
affect the business. An increase in the inflation rate can also cause the increase in
prices and decrease in the purchasing power of the customers. An increase in
interest rate can also cause the increase in the costthat can lead to increase in
prices. Income level of the localities also affects their purchasing power and their
attitude toward the product.
SocialFactors
Social factors define the taste, culture, values, norms social status and the attitude
of the society. When launch the productthese factors are studied carefully to target
the particular segment. When selecting the segment we must need to identify the
segment specific people attitude and interest toward the art and décor. People
concern for environmental protection and attitude toward the green products also
matters a lot.
TechnologicalFactors
Use the modern technology for the cleaning, cutting and molding of the waste
material to convert it into the new productand use the technology that can not
harm the environment. Use the electronic media, print media (newspaper,
magazines, pamphlets etc) for the advertisement of the product. Social media can
also use for the advertisement and online selling of the products.

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Marketing Strategies
OverallMarketing Strategy:
The company has chosen to focus on recycling of plastic bottle, old jeans and used
tyres etc and their packaging. We have identified a significant available market in
Gujranwala Pakistan. All of our initial marketing
strategy will be to secure contracts in that segment, and after reaching
full planned capacity, we look to grow in concertwith that segment and related
markets. We see little need at present for further market research and development,
and will focus on continually updating our production technology in an effort to
remaining the forefront of our chosenmarketplace.
Product and Service Strategy:
For a small business to succeed, it must offer products and services that provide
superior benefits when customers compare them side-by-side to the benefits
provided by competitors’ products or services.
By adopting recycling program we can protectthe environment by using waste
material into final products and it is having valued for those people who do not
want to throw their old or used things into the bucket.
The company will require plastic bottles, wood, old jeans, used tyre. The products
will be offer in different colors and different sizes with high quality.
The products we are producing are:
1. Jewelry boxes in multi colors and different sizes
2. Jeans bags & shoes in different sizes
3. Roped tyre table for household & office use
4. Coin collection boxes for kids
5. Home decorproducts
6. Kitchen wears products
7. Wood hanging racks

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We will offer free home delivery in case of online purchase.
Pricing Strategy:
Pricing strategy is combined with other marketing principals such as product,
price, place, promotion. Pricing strategy is the most important componentof
marketing mix because through this strategy company can generate revenues.
Plastic products or recycling of waste material products do not carry any brand
name. So, pricing strategies will works to achieve competitive advantage. Pak
Recycling Company will adopt the penetration strategy to increase sales and
market share. The prices of all products we will sell will be lower than the market
price. Pak-Recycling Co. will set the prices lower than the market. A lower price
will enable our company to attract the customers. By adopting penetration strategy
we can generate greater sales and can establish our products in the market more
quickly.
Distribution Strategy:
Distribution means how you will transfer their products to the end users.
Distribution strategies depend on the type of product.
Distribution options include:
 Manufacturer to consumer
 Manufacturer Agent consumer
 Manufacturer retailer consumer
 Manufacturer whole seller retailer consumer etc
 Pak Recycling Company will distribute their products through retail channel
and these stores will sell it to the end consumers. We will sell our products
to the stores where everything is available like kitchen ware products,
decoration pieces etc.
Retail store’s owner will directly contact to our company and can place their orders
according to the customer’s specifications.

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Advertising and PromotionalStrategy:
Promotion is the method you use to spread the word about your productor service
to customers. Advertising is a form of communication designs to persuade
potential customers to chooseyour products orservice over that of a competitor.
The objectives of advertisement are:
 Make your business and productname familiar to the public
 Create goodwill and build a favorable image
 Educate and inform the public
 Offer specific products orservices
 Attract customers to find out more about your productor service
We will use two different strategies to promote our products. Firstly we will use
bill boards, magazines and newspapers to advertise our products. Secondlywe will
promote our products through online social media and we will also develop our
website through which enable us to widely spread our contact among various
customers.
Sales Strategy:
The strategy of sales effort will be to convert potential and first time customers
into long term customers. Our sales strategy is totally based upon the distribution
channel and the pricing strategies. To market the products, the Company will use a
number of sales agents/brokers. They have strong relations with owners of retail
stores to sell the company products overthe years. The purposeof having brokers
or wholesalers is to know about the needs of customers through retail stores. They
will expand that to new customers when productis available.
If our company grows faster then we will increase our productioncapacity. We
will identify additional prospective customers who can be attracted for our
products.
DevelopmentStrategy:
In future we are looking for a variety of products made by waste material. Our
strategy will focus not only the current production acquisition of customer as fast

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as we can, but we will also look for the future expansion plan and execution
strategy.
Our future development strategy will focus on to chart out a careful plan for the
future expansion and growth of our business. The development strategy will
address following issue:
 How will we expand our products and services
 Which are the new areas we will include to provide our products
 What will be the format of the business
Our development strategy will address all those above-mentioned point. As we will
grow and our earning will increase, we will producemore products as well as
expand in new area. We have a development strategy to expand our facility size in
order to meet the productionsize and we will recycle products according to
customer’s need.
Competitor Analysis:
A competitive analysis is a critical part of the company marketing plan.
The ultimate objective of competitor analysis is to know enough about a
competitor to be able to think like that competitor so the firm's competitive strategy
can be formulated to take into account the competitors' likely actions and
responses.
In recyclable products manufacturing market there is no specific brand name exist
so small companies that are in this business flood the market. So they are our
biggest direct competitors. As we are also not alone in manufacturing products by
waste material there may be many companies in this region that are doing the same
business so they are our competitors.
MarketSegmentation:
Market segmentation is one of the oldest marketing tricks in the books. With the
customer population and preferences becoming wider, and the competitive options
becoming more available, market segmentation has become critical in any business
or marketing plan. In fact, people launch products keeping the market
segmentation in mind.

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There are three ways to classify what the customer wants. It is known as needs
wants and demands. However, to decide the needs, wants and demands, you need
to carry out segmentation first. And in segmentation, the first step is to define your
target audience. Who would want your productand whether it falls in the needs
segment, the wants segment or the demands segment. Once you decide the product
you are going to make, then you decide on the market segmentation. The target
customer of the Pak-recycling company is the general public. We will target the
customers who do not want to purchase expensive things but want to buy things
which are reasonable and looking perfect for home decoration and for kitchen use.
And also those people who want to purchase online products orprefer to go in
retail stores for shopping.
Management
Five Promoters will manage the Recycling Company. There will be five Managers
and directors of recycling company who will manage the company and will
brought capital to start a company.
All the promoters are expert in making Marketing strategies, negotiating with
different people, having different sale skills that will be good for recycling
business to run the business in the long way and in making prosperous health of the
business.
Thus having these potential skills, and other qualities like efficient interpersonal
skills, leadership skills and decision making quality, make them the best promoters
and eligible founders and owners of Recycling Company.
We will manage the business in a good and better way to produceour goodwill
among the customers so in this way our sales will increase day by day and
company will make more progress in Recycling market.
Job description:
In operational department there will be 5 employees, who will be skilled and semi-
skilled in their field. In that department, there will be various functions like
cleaning, molding, shaping, coloring and packaging. In sales department, there will
be 2 employees. Who will be skilled in marketing skills they will supply the
products in different areas. They will collect all the information related to sales
department from outsources. In research & development department there will be 1

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employee, who will be skilled. They will search the market trends and the
customer needs. They will also provide different strategies and ideas about the
productand the company development.
In Finance department, there will be 2 employees. Who will be skilled and will
provide different finance strategies time to time. They will maintain the different
records and accounts. They will also perform the analysis of the financial
statements of the company. In Human resource department, there will be 1
employee. They will be involved in hiring & firing of the employees. They will
also review the company’s current mission statement. They will also develop the
strategies for the satisfaction and motivation of employees. They will also play an
important role in the formulation and implementation of the strategies.
Figure #1
Work No of employees Proficiency
Operational department 5 Skilled & Semi-skilled
Sales department 2 Skilled
Research &
Development
1 Skilled
Finance department 2 Skilled
HR department 1 Skilled
All the 5 departments will have their own single manager who will supervise all
the department related activities and involved in planning, organizing, leading and
controlling. For the security purposes two gate keepers will be hired.
Operations:
The operation is defined as the process used to deliver your products and services
to the customer market also include manufacturing transportation logistics after
sales services.

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The facility is located at outside the city. Facility is divided in two parts
 Recycling and Production unit
 Warehouse
Apart from these two units there will be an office that will look for the perpetual
supply of required raw material and also take care about the required material.
The operations will be based upon JIT i.e. just in time. We will have contracted
with the suppliers who can supply the raw material as quickly as we want. The raw
material contains post-consumerbeverage bottles and other plastic and wood
materials. The bottles and other plastic material that can be recycled have a
specific sign from which it can be identified that it can be recycled or not.
After receiving raw material from the supplier we will producedifferent innovative
and recycling products that will attract the customers to use those innovative,
creative and new looking things that are prepared by using different types of waste
material. After introducing new things to the customers we will introduce that
things which demand will be high by the users and customers. There will be
different products that will be produced ondifferent day according to the demand
in market.
Stages ofRecycling and Production:
The process ofrecycling of waste plastics, woods and other waste materials into
products ofvarying usefulness involves the following essential steps:
 Collection of raw material
 Cleaning
 Molding & shaping
 Coloring and painting
 Packaging
 Delivery

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These are the stages of our production and recycling business. There is also given a
detail in the following paragraphs about our production and recycling system that
we will use in our recycling business.
 Collectionof raw material:
In this stage of recycling and production we will collect the raw material from the
suppliers who will provide us empty and wasted plastic bottles and other things
that will be required for making innovative and new things in our recycling
business.
 Cleaning of raw material:
The second stage in our recycling and productionbusiness is the cleaning of that
raw material that we have collected from our suppliers. Then after cleaning that
material we will use that material in making new, pioneering and attracting things
for those who are fond of decorating their houses, for kitchen purposes and also for
many other purposes.
 Molding and Shaping:
After collection and cleaning of raw material, the next stage that comes in our
recycling and productionsystem is to mold and give an innovative and attractive
shape that is most wanted by the people for beautification of their houses, for
kitchen purposes and also for many house hold purposes we will mold and shape
that raw material which is wasted by the people.
Such as, different shapes of plastic bottles which are wasted by the people after
using them so we will make bestuse of that squandered bottles with using different
types of machinery and tools then after molding and shaping them into an
innovative and attractive things we will provide that things to the people for
decoration and different household purposes necessitated by the people.
Then after molding and shaping we will produceand make different types of
products suchas jewelry boxes, jeans bags & shoes, roped tier table, coin
collection boxes, home decor products, kitchen wears products, wood hanging
racks and also many other things that will be demanded by the people to décor
their houses and also for many other purposes.
 Packaging:

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The next stage after collecting, cleaning and shaping the material is packaging that
new making innovative and eye-catching things. This stage is also very important
in our business becausemost of the people are attracted by the packing of the
products not only by the products. So, we will make packaging of our products in a
better and in an attractive way to attract the warmhearted people of that things.
 Delivering:
Firstly we will collect the raw material then after cleaning and molding and
shaping of that material we will deliver that products to different retailers or at
different retail stores that have the accessories of decorating the houses or which
have decoration pieces for beautify the houses and for many other purposes. This is
also a very important stage in our productionand operation system becauseif
delivery of the products is not on time and is not in a good way or manner then it
will definitely affect the sales or revenues of the business.
Therefore after collecting, cleaning, shaping and molding, packing the delivering
stage is very important for the continuing and making progress of any business.
These are the five stages in our recycling and productionsystem that will be
managed by the managers and their under working different types of employees
having different types of skills for making, flourishing progress in our recycling
business.
Financial plan and projections
Variety of products is formed by using plastic bottles, wood, jeans, and tyres.
Plastic bottles:
Waste plastic bottles are required to producethe different products. Plastic bottles
will be collected from scrap stores in huge quantity monthly.
Tyres:
Tyres will be purchased from workshops to producethe different tables and chairs.
Wood:
Wood will be required for using in tyre products and to producethe racks.
Raw material costprojection(monthly):

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Description Amount (Rs.)
Plastic bottles 50,000
Tyres 150,000
Wood 100.000
Others 50,000
Total 350,000
Labor requirement:
Pak Recycling Pvt. Ltd will be needed skilled, semi-skilled and unskilled labor to
perform different kind of activities. Skilled and semi-skilled labor will be required
to carry the productionprocess properly. Unskilled labor will be required to
perform other activities like raw material collection gate keeping and for other
security needs. Company will be formed in Gujranwala so the hiring of local labor
will be preferred if required then we will hire new people from other cities
Company will give a properwork schedule to the labor. Labor will have to work 7
hours daily. After hiring of the labor one week training program will be offered to
the labor. If anyone wants to quit the job then he will be required to inform the
company management one week in advance before quitting the job.
Labor costprojection
Description Amount (Rs.) Amount (Rs.)
Directlabor
a) Skilled
b) Semi skilled
c) Unskilled
90,000
16,000
10,000
116,000
Indirect labor 75,000
Total 191,000

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Indirect factory overhead(monthly)
Indirect labor 75,000
Electricity & water 30,000
Repair & maintenance 10,000
Transportation 20,000
Stationary 2,000
Warehouse expenses 5,000
Advertisement 10,000
Rent 30,000
Depreciation 3,500
Total 185,500
Per unit costof production
Monthly raw material cost 350,000
Monthly direct labor cost 116,000
Monthly factory overhead 185,500
Totalproduction cost 651,500
TotalNo. of units 5,000
Per unit cost 130.3
Pre-operating activities
Pre-operating activities involves

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 Registration of the company
 Applying for the loan and approval
 Constructing the factory
 Contacting equipment supplier
 Hiring the labor
 Installing the equipment
 Purchasing the raw material
 Conducting market survey
 Trial production
Market survey will be conducted to know the market trends and customer
demands. After conducting the market survey small no. of units will be produced
and offer to the customer in the market to know the customer response.
Pre-operating cost:
Description Rs.
Registration cost 5,000
Trial production 30,000
Market survey 10,000
Transportation cost 5,000
Telephone registration
cost
2,000
Others 10,000
Total 62,000
Administrative expenses:

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Administrative expenses include telephone bill charges, refreshment charges,
accountant salary and depreciation.
Depreciation involves the following assets depreciation
 Office building
 Computers
 Telephone sets
 Tables
 Chairs
 Sofa
 Cupboard
Administrative cost(monthly):
Telephone bill 3,000
Refreshment 5,000
Accountant salary 15,000
Depreciation 3441.67
Stationary 2,000
Others 1,000
Total 29441.67
Fixed assetrequirement:
Fixed asset will be required to carry the business operation. Company will
purchase its own office building, plant and machinery and furniture. Plant and
machinery involves the production plant and machinery, 3 computer sets, 2
telephone sets and one generator. Furniture includes 3 tables, 9 chairs, sofa and
cupboard.

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Fixed assetcost:
Description Rs.
Office building 300,000 300,000
Plant & machinery
o Computer
o Telephone
o Generator
o Production plant
and equipment
60,000
4,000
60,000
150,000
274,000
Furniture
o Tables
o Chair
o Sofa
o Cupboard
30,000
30,000
30,000
10,000
100,000
Total 674,000
Life of asset:
Description Rs. Depreciation
%
Annually monthly
Office building 300,000 15% 45,000 375
Plant & machinery
o Computer
o Telephone
o Generator
o Production
60,000
4,000
60,000
20
20
20
12,000
800
12,000
1,000
66.67
1,000

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plant and
equipment
150,000 20 30,000 2,500
Furniture
o Tables
o Chair
o Sofa
o cupboard
30,000
50,000
30,000
10,000
20
20
20
20
6,000
10,000
6,000
2,000
500
833.33
500
166.67
Total 123,800 6,941.67
Totalcapital requirement:
Fixed capital:
Fixed asset requirement 674,000
Working capital requirement:
Raw material stockfor 1 month 350,000
Cash management
116,000+(185,500-3500)+(29,441.67-
3441.67)+40,000
364,000
Totalworking capital required 714,000

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Cash management involves factory overhead, administrative expenses and
marketing expenses.
Pre-operating capitalrequirement:
Description Rs.
Registration cost 5,000
Trial production 30,000
Market survey 10,000
Transportation cost 5,000
Telephone registration
cost
2,000
Others 10,000
Totalcapital required 62,000
Totalcapital requirement:
Fixed capital 674,000
Working capital 714,000
Pre-operating capital 62,000
Totalcapital required 1,450,000
Capital structure:
We have planned to take loan of Rs. 507,500 from the bank. That is the 35% of
total capital requirement. Rest of the 65% will be invested by the five partners in
equal proportion (that is Rs. 188,500 each).

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Owner’s equity 942,500
Bank loan 507,500
Total 1,450,000
Loan repayment structure:
Loan will be paid over the period of 5 years at 15% interest rate per annum. To
secure the bank loan, Owners have the land and building of Rs. 600,000 which will
be kept as collateral security with the bank.
year Loan amount
payable
Interest
(15%)
Principle Total
payment
1 507,500 76,125 101,500 177,625
2 406,000 60,900 101,500 162,400
3 304,500 45,675 101,500 147,175
4 203,000 30,450 101,500 131,950
5 101,500 15,225 101,500 116,725
Selling price:
Per unit costof
production
130.3
Monthly administrative
expense
29,441.67
Monthly marketing
expense
40,000

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Monthly interest on loan 6,343.75
Total 75,785.42
Per unit cost 15.16
Final cost 145.46
30 % mark-up 43.638
Selling price per unit 189.098
~190
Income statement
Income from sale
(190*60,000units)
11,400,000
Less : Raw material Cost
(350,000 *12)
4,200,000
Direct labor cost
(116,000*12)
1,392,000
Factory overhead
(182,000*12)+42,000
2,226,000
Total 7,818,000 (7,818,000)
Gross profit 3,582,000
Less: Marketing expenses 40,000
Administrative expenses 393,800

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(26,000*12)+81,800
Total 433,800 (433,800)
Earnings before interest
and tax
3,148,200
Less:interest (15%) (76,125)
Earnings before tax 3,072,075
Less:tax (34%) 1,044,505.5
Earnings after tax 2,027,569.5
Cashflow statement:
Description Pre-operating (Rs.) Ist year (Rs.)
Cashinflow
Equity 942,500
Loan 507,500
Cash sales 10,830,000
Totalcashinflow 1,450,000 10,830,000
Cashoutflow
Pre-operating expenses 62,000
Purchase of fixed asset 674,000
Raw material cost 4,200,000
Direct labor cost 1,392,000
Factory overhead 2,178,000
Marketing expense 40,000
Administrative expense 312,000

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Increased in inventory 200,000
Interest 76,125
Repayment of loan 101,500
Tax 1,044,505.5
Total cash outflow 736,000 9,544,130.5
Net cashflow 714,000 1,285,869.5
Cash balance in the
beginning
- 714,000
Cashbalance at the end 1,999,869.5
Balance sheet
Assets
Current assets
Cash 714,000 1,999,869.5
Account receivables - 564,000
Inventory - 200,000
Totalcurrent assets 714,000 2,763,869.5
Fixed asset 674,000 674,000
Less:Depreciation - (123,800)
Net fixed assets 550,200
Operating expenses 62,000 62,000
Totalassets 1,450,000 3,376,069.5

29
Capital and liabilities
Long-term loan 507,500 406,000
Owner’s equity 942,500 942,500
Accumulated profit 2,027,569.5
Total owner’s equity 2,970,069.5
Totalcapital &
liabilities
1,450,000 3,376,069.5

30
Appendices
Figure 1
JewellaryBoxes
Figure 2
Kitchen wears

31
Figure 3
Figure 4
DecorationPieces

32
Figure 5
Figure 6
Coin collectionbox

33
Figure 6
Tyre Products
Figure 7
Jeans Products

34
Figure 8
Management
Work No of employees Proficiency
Operational department 5 Skilled & Semi-skilled
Sales department 2 Skilled
Research &
Development
1 Skilled
Finance department 2 Skilled
HR department 1 Skilled
Figure 9
Income statement
Income from sale
(190*60,000units)
11,400,000
Less : Raw material
Cost
(350,000*12)
4,200,000
Directlabor cost
(116,000*12)
1,392,000
Factoryoverhead
(182,000*12)+42,000
2,226,000
Total 7,818,000 (7,818,000)
Gross profit 3,582,000

35
Less:Marketing
expenses
40,000
Administrative expenses
(26,000*12)+81,800
393,800
Total 433,800 (433,800)
Earnings before interest
and tax
3,148,200
Less:interest (15%) (76,125)
Earnings before tax 3,072,075
Less:tax (34%) 1,044,505.5
Earnings after tax 2,027,569.5
Cashflow statement:
Cashinflow
Equity 942,500
Loan 507,500
Cashsales 10,830,000
Totalcashinflow 1,450,000 10,830,000
Cashoutflow
Pre-operating expenses 62,000
Purchase of fixed asset 674,000
Raw material cost 4,200,000
Directlabor cost 1,392,000

36
Factoryoverhead 2,178,000
Marketing expense 40,000
Administrative expense 312,000
Increasedin inventory 200,000
Interest 76,125
Repayment of loan 101,500
Tax 1,044,505.5
Totalcashoutflow 736,000 9,544,130.5
Net cashflow 714,000 1,285,869.5
Cashbalance in the
beginning
- 714,000
Cashbalance at the end 1,999,869.5
Balance sheet
Assets
Current assets
Cash 714,000 1,999,869.5
Account receivables - 564,000
Inventory - 200,000
Totalcurrent assets 714,000 2,763,869.5
Fixed asset 674,000 674,000
Less:Depreciation - (123,800)
Net fixed assets 550,200

37
Operating expenses 62,000 62,000
Totalassets 1,450,000 3,376,069.5
Capital and liabilities
Long-term loan 507,500 406,000
Owner’s equity 942,500 942,500
Accumulated profit 2,027,569.5
Totalowner’s equity 2,970,069.5
Totalcapital &
liabilities
1,450,000 3,376,069.5

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