a_Umng ED Proj

E.D. PROJECT

TOPIC - MANUFACTURING OF PRESTRESSED CONCRETE POLES USED FOR POWER TRANSMISSION AND TELECOMMUNICATION LINES.

Submitted in partial fulfillment of the requirement for the award of degree of Bachelor of Business Administration of Christ University, Bangalore-560029 Compiled By: - Ms. Dilasha Sethi : 0911646 Mr. Umang Agarwal : 0911681

Under The Guidance of Professor :- Mrs. Bhama T.

DEPARTMENT OF MANAGEMENT STUDIES CHRIST UNIVERSITY, BANGALORE 2010 2011

GUIDE CERTIFICATE

This is to certify that Dilasha Sethi (0911646) and Umang Agarwal (0911681), student of BBA - B , IVth Semester at Christ University, Bangalore have completed their project on the topic titled MANUFACTURING OF PRESTRESSED CONCRETE POLES USED FOR POWER TRANSMISSION AND TELECOMMUNICATION LINES. under my guidance and supervision.

This has not previously formed the basis of the award of any degree, diploma or other similar title of recognition.

Place: Bengaluru Date: 02nd February, 2011Christ University, Bengaluru

Ms. Bhama T.Class Coordinator, 4th BBA B


GUIDE CERTIFICATE

This is to certify that Dilasha Sethi (0911646) and Umang Agarwal (0911681), student of BBA - B , IVth Semester at Christ University, Bangalore have completed their project on the topic titled MANUFACTURING OF PRESTRESSED CONCRETE POLES USED FOR POWER TRANSMISSION AND TELECOMMUNICATION LINES. under my guidance and supervision.

This has not previously formed the basis of the award of any degree, diploma or other similar title of recognition.

Place: Bengaluru Date: 02nd February, 2011Christ University, Bengaluru

Dr. Jain Matthew Head of Department


TABLE OF CONTENTSDeclaration(PG 6)Acknowledgement(PG 7)Executive Summary(PG 8)Chapter 1: Introduction(PG 9) Profile of the entrepreneurs (name, education, background/experience , age, gender) Nature of Business (Manufacturing /Services/Trading/Agency/Franchise) Size of Unit (Small Scale/Medium Scale/Large Scale) Legal ownership pattern (Company/Partnership/Cooperative/Trust) Organisation Structure/Hierarchy Proposed Product information (product description)Chapter 2: Industry Analysis (past 5 years) (PG 20) Government Policy & Incentives regulating the industry Expected Industry Growth Rate SWOT Analysis of Industry Competitors Analysis Demand Forecasting and Estimation (Region wise & Product wise)Chapter 3: Project Feasibility Study(PG 46)Economic Viability (PG 46) Market Potential & Demand Pattern Domestic and International Market Market- Segmentation(Basis of segmentation), Targeting, Positioning Marketing Plan 7 PsTechnical Viability(PG 51) Nature of Technical know-how or manufacturing process Source of Technology (Indigenous/Imported) Cost of Acquisition of Technology (Development/Purchase/Licensing) Actual Production New capacities under considerations Human Resource Requirements at different levels (Administrative /Technical Staff) Nature of Inputs/Raw Materials Sources of Raw Materials /SuppliersFinancial Viability(PG 58) Total investment (Working Capital & Fixed Capital) Analysis Source of Finance (own & external -collateral , non collateral) Cost of Capital & Repayment Period Financial Analysis Break Even Analysis Profitability Statement for 10 years Projected Balance Sheet (10 years) Pay Back PeriodChapter 4: Implementation Schedule(PG 89)Chapter 5: Conclusion(PG 91)Chapter 6: Bibiliography(PG 92)

DECLARATION

We therefore declare that the Entrepreneurship Development Project is a record of a research carried out by us under the guidance of Mrs. Bhama T. , Class Co-ordinator of IVth Semester BBA B, Department of Management Studies, Christ University, Bangalore.

We further declare that the project done by us is purely original and has not been previously formed on the basis of the award of any degree, diploma or other similar title of recognition. This is a record of bona fide and original work submitted by us in partial fulfillment of the requirements for the award of degree of Bachelor of Business Management.

Place :- Christ University, Bangalore

Date :- 02nd February, 2011

Project compiled and completed by:-

Dilasha Sethi - 0911646

Umang Agarwal - 0911681

ACKNOWLEDGEMENT

We would like to express our sincere gratitude to all those who have been instrumental in the preparation of our Entrepreneurship Development Project.

We wish to specially acknowledge our project mentor Mrs. Bhama T., a senior faculty member of Department of Management Studies, Christ University for her constant guidance and support throughout the project or else it wouldnt have been successful.

I would also like to extend our gratitude and heartfelt thanks to Mr. Jain Mathew, our Head of the Department and Mrs. Jyothi Kumar, our Academic Coordinator for giving me this opportunity to carry out the project. Our project would not have been a complete one without their continued support and keen guidance.

We would like to thank Dr. (Fr). Thomas. C. Mathew, Vice Chancellor and Dr. Jain Mathew, HOD, for their encouragement.

We would also like to thank Mr. Anurag Agarwal for sharing his experience with us in this Industry as he possesses a good amount of knowledge in the construction of Concrete Poles.

At last we would also like to thank our parents and friends for their moral support.

Thank You,Dilasha Sethi 0911646 Umang Agarwal 0911681

PLAN FOR MANUFACTURE

OF

PRESTRESSED CONCRETE POLE

BY

SAMARTHA TECHNOLOGIES PRIVATE LIMITED

FACTORY ADITYAPUR, JAMSHEDPUR

REGISTERED OFFICE KADMA, JAMSHEDPUR

Executive Summary

SAMARTHA TECHNOLOGIES PRIVATE LIMITED is setting up one Prestressed Concrete Pole Unit of a Capacity of 1,00,000 Pcs. p.a. at Adityapur, Jamshedpur-831006, District East Singhbum, State Jharkhand.

The Unit is being promoted by Mr. Umang Agarwal and Miss. Dilasha Sethi who are well educated and are belonging from a well to do business family. The factory will be established in Adityapur Industrial Area of Jamshedpur and its registered office will be in Kadma, Jamshedpur which is located at a distance of 8 kms from factory.

The size of the business unit is a small scale and it will be a Partnership form of Business in which there will be only two partners who will both invest equally to some extent in the business itself and the remaining amount of money will be sanctioned by the Bank who is keen to invest in our Project seeing the credit worthiness of the partners and feasibility of the Project.

The main reason why we have chosen this sector to start our business is that the Project is feasible. There is a lot of demand of Prestressed Concrete Poles in the Eastern Part of India especially for the initiative of the Government to promote electricity and communication lines in the vast rural sector of Jharkhand, Bihar and Orissa States. The suppliers for these poles are very less in number throughout the country and they are basically situated in states of West Bengal and Maharashtra from which the Government, Public Sector Units like NTPC, BSNL etc. and Private Sector Companies like Bajaj Electricals have to buy and also pay the transportation cost which increases the cost of poles. Another reason is that there is limited number of suppliers in the entire three states and there is no manufacturing unit of these poles in the Industrial Hub of Jamshedpur. So, overall the project is very much feasible and profitable in this upcoming Industry.

Due to the advantage of P.C Pole against wooden and steel poles as they being corrosion resistant, low in weights, low in price and having long durability, scope of these poles has grown rapidly amplifying its demand.

Project At A Glance

1. NAME OF UNIT : SAMARTHA TECHNOLOGIES PRIVATE LIMITED 2. CONSTITUTION : PRIVATE LIMITED COMPANY (PARTNERSHIP)

3. PROMOTERS : Mr. Umang Agarwal Miss. Dilasha Sethi4. NATURE OF PROJECT : Prestressed Concrete Pole Unit

5. PROJECT COST : Rs. In Lacs Land & Land Development 51.00 Civil Construction 30.00 Plant & Machinery 44.00 Auxiliary Machinery 18.00 Laboratory Equipments 3.00 Furniture & Fixtures 3.00 Preliminary, preoperative and Interest during Construction Period 3.00 --------- 152.00 Margin for Working Capital 55.00 --------- 207.00

6. MEANS OF FINANCE : Rs. In Lacs Promoters Contribution (50:50) 129.00Term Loan from Financial Institution 78.00 -------- T O T A L 207.00 ---------

7. DEBT EQUITY RATIO (APPROX) : 0.604:1.000

About the Industrial Area(Adityapur, Jamshedpur)

Quick Facts:AIADAADITYAPUR INDUSTRIAL AREA DEVELOPMENT AUTHORITY Control Area-33,970 acres(53 sq. miles) Total allotted land2609.79 acres Plots1365 Sheds142 Direct Employment(includes 11,550 locals & tribals) 27,900

Average Annual ProductionRs.3,550 croresAdityapur Industrial Area Development Authority (AIADA) caters to the needs of industries setup in its controlled area in Adityapur (Jharkhand), and is striving to excel as a customer focussed knowledge-based organization through its innovative practices.

CHAPTER-1INTRODUCTION

1) PROFILE OF THE ENTREPRENEURS :-

a) Mr. Umang Agarwal, S/o. Mr. Manoj Agarwal aged about 22 years, is a resident of Kadma, Jamshedpur - 831005. He is having an excellent educational background of B.A. (Honours) in Business Management from Sheffield Hallam University with achievements like The Outgoing Best Student of 2008-2009 batch from his school. His Father is doing business since more than 25 years and he got the business experience from his father and other family members during his education phase.

b) Miss. Dilasha Sethi, D/o. Mr. Binod Kumar Sethi aged about 19 years, is a resident of Surat, Gujarat. She has completed her B.B.A. from Christ University, Bangalore. Her father is also a businessman and also she has gained some experience in business field from her father during the time of her education.

2) NATURE OF BUSINESS :-

The Nature of Business is Manufacturing of Prestressed Concrete Pole mainly Used for Power Transmission and Telecommunication Lines. There are multiples uses for this product as it is used for carrying electricity/power ditribution and plus in these poles one can fix up halogen lightings lamp to provide lights and signals. But since there is a lot of demand of Prestressed Concrete Poles in the Eastern Part of India especially for the initiative of the Government to promote electricity and communication lines in the vast rural sector of Jharkhand, Bihar and Orissa States, our main supply of the concrete poles are for these two sole reasons. The suppliers for these poles are very less in number throughout the country and they are basically situated in states of West Bengal and Maharashtra from which the Government, Public Sector Units like NTPC, BSNL etc. and Private Sector Companies like Bajaj Electricals have to buy and also pay the transportation cost which increases the cost of poles. Also, there is limited number of suppliers in the entire three states and there is no manufacturing unit of these poles in the Industrial Hub of Jamshedpur.

However, Prestressed Concrete Poles were developed to meet the expanding need of a supporting structure for; street, highway and area lighting, athletic lighting, signs, overhead power distribution and power transmission as well as power substations and traffic signals. Prestressed Concrete Poles are safe for the environment, require no maintenance and have a life of fifty or more years.

3) SIZE OF UNIT :-

The business is of a Small Scale in terms of Size of Unit.

4) LEGAL OWNERSHIP PATTERN :-

The legal ownership pattern to be followed is on an equally Partnership basis in the form of a Private Limited Company.

Important elements of partnership are :

(1) Association of 2 or more persons(2) Existence of contract(3) Carrying on a business(4) Sharing of Profits(5) Mutual Agency

We are involved in actual/active type of partenership where the partners are actively involved in the business and business relations and other aspects of the partnership firms.

5) ORGANIZATION STRUCTURE :-

Since it is a small scale business unit, therefore no particular organization structure is to be followed. If any structure has to be followed then it would be basically a line structure.This is the sort of structure that allows for easy decision making, and also very informal in nature. They have fewer departments, which makes the entire organization a much decentralized one therefore line structure is apt for Samartha Pvt. Ltd.

6) PROPOSED PRODUCT INFORMATION :-

Prestressed Concrete Poles were developed to meet the expanding need of a supporting structure for; street, highway and area lighting, athletic lighting, signs, overhead power distribution and power transmission as well as power substations and traffic signals. Prestressed Concrete Poles are safe for the environment, require no maintenance and have a life of fifty or more years. Every Prestressed Concrete Pole is an engineered product designed for each specific application and produced under rigid standards of quality. Prestressed Concrete Poles require no painting, will not rust, and are impervious to sunlight (ultraviolet radiation), chemicals (fertilizers, oils, etc.), animals and insects (woodpeckers, termites, etc.) and do not require ground line treating. These Poles are classified by their ultimate capacity to sustain a horizontal load applied at a point two feet below the tip.

Prestressed concrete poles were developed to offer a cost effective, permanent solution for the pole industry. From lighting, surveillance and utility markets to structural and specialty uses. Unlike wood and steel, we have the ability to color our concrete without the use of paint therefore providing a permanent, maintenance free solution. Combine our endless array of colors with an expansive selection of exposed aggregate finishes, and Samartha Pvt. can provide you with a structurally sound, architectural pole that will enhance your project.

Prestressed concrete is a method for overcoming concrete's natural weakness in tension. It can be used to produce beams, floors or bridges with a longer span than is practical with ordinary reinforced concrete. Prestressing tendons (generally of high tensile steel cable or rods) are used to provide a clamping load which produces a compressive stress that balances the tensile stress that the concrete compression member would otherwise experience due to a bending load. Traditional reinforced concrete is based on the use of steel reinforcement bars, rebars, inside poured concrete.

CHAPTER 2

Industry Analysis (past 5 years)

SWOT ANALYSIS

Strenghts

Cost Effective

Permanent solution for the pole industry

Unlike wood and steel, we have the ability to color our concrete without the use of paint therefore providing a permanent, maintenance free solution.

Require no painting, will not rust, and are impervious to sunlight (ultraviolet radiation), chemicals (fertilizers, oils, etc.), animals and insects (woodpeckers, termites, etc.) and do not require ground line treating.

These Poles are classified by their ultimate capacity to sustain a horizontal load applied at a point two feet below the tip.

From lighting, surveillance and utility markets to structural and specialty uses.

No competitors nearby as this will be the only manufacturing firm producing prestressed concrete poles for eastern states of India.

Also, high demand in these states for the product due to the initiative of the Government to promote electricity and communication lines in the vast rural sector of Jharkhand, Bihar and Orissa States.

Promote rural development

Various uses and scope of the product.

Project is very feasible as concrete poles will be easily sold due to its varius use and thus highly profitable.

Incentives and policies of the government to support the business as it is small scale and novice.

The industry cannot have a negative profit or no demand, as the use of concrete poles is kind of necessity.

Weakness

Novice promoters

No experience before

The promoters have no background with advanced science knowledge of physics or mechanics which is needed for the prestressed concrete poles manufacturing.

High cost of setting up the business.

New business always involves risk at the start

Since the product will be used for the public areas and so any fault or defect will doom the companys reputation.

First ever such business to open up in eastern India(Jamshedpur)

The area where the business is set up does not lie in SEZ.(specialized economic zone)

Oppprtunities

Since, high demand in East Indian states for the product due to the initiative of the Government to promote electricity and communication lines in the vast rural sector of Jharkhand, Bihar and Orissa States.

First ever such business to open up in eastern India(Jamshedpur)

Opportunity of building up reputation in India for the sole manufacturer of product in east India.

To expand business nationwide.

To trade nationally as well as internationally.

There is a vast scope for growth of the company in future fue to high demands

No nearby competitors located around Jamshedpur to manufacture these products

Threats

There can be no support from the government.

People not purchasing the poles due to the novice reputation of business

High risk as it is a new Industry.

New competitor moving into the area.

High corruption in Eastern India and lot of political influence.

There is no proper law and order in the state of Jharkhand.

Government Policy and Incentives

Special emphasis on the industrial development of backward, tribal and hilly areas has been the concern of the Government of India expressed in all the Five Year Plans and industrial policy statements. Realizing that backward areas development is a long-term process, several committees were appointed to identify the criteria for identifying backward areas and also to suggest schemes to take up the Herculean task of balanced regional development.The implementation of integrated rural development programme is one such attempt made by the government to develop backward areas. The rural industries project programme initiated by the Government of India was meant to develop small business units in select rural areas. Though the backward area development programmes varied from state to state, they cumulatively represented a significant package of incentives to attract industries in backward areas.Some of the common incentives offered to small scale industries in rural areas are:

Land Every state offers developed plots for setting up of industries. The terms and conditions may vary. Some states dont charge rent in the initial years, while some allow payment ininstallments.

Power - Electricity is supplied at a concessional rate of 50 per cent, while some states exempt such units from payment in the initial years.

Water is supplied on a no-profit, no-loss basis or with 50 per cent concession or exemption from water charges for a period of 5 years.

Sales Tax - In all union territories, industries are exempted from sales tax, while some states extend exemption for 5 years period.

Raw materials - Units located in backward areas get preferential treatment in the matter of allotment of scarce raw materials like cement, iron and steel etc.

Finance - Subsidy of 10-15 per cent is given for building capital assets. Loans are also offered at concessional rates.

Industrial estates - Some states encourage setting up of industrial estates in backward areas.

Tax holiday - Exemption from paying taxes for 5 or 10 years is given to industries established in backward, hilly and tribal areas.

To sum up, it may be stated that the small business sector in India is getting the support of government through various institutions in different forms for different purposes. Despite special attention being given to backward areas, it is observed that imbalances in development are still there. There is a need to develop infrastructural facilities in these areas, as no amount of subsidies or concessions can overcome the natural handicaps caused by a lack of such facilities.

SUPPORT MEASURES AND PROGRAMMES

Keeping in view the contribution of small business to employment generation, balanced regional development of the country, and promotion of exports, the Government of Indias policy thrust has been on establishing, promoting and developing the small business sector, particularly the rural industries and the cottage and village industries in backward areas. Governments both at the central and state level have been actively participating in promoting self-employment opportunities in rural areas by providing assistance in respect of infrastructure, finance, technology, training, raw-materials, and marketing. The various policies and schemes of Government assistance for the development of rural industries insist on the utilization of local resources and raw materials and locally available manpower. These are translated into action through various agencies, departments, corporations, etc., all coming under the purview of the industries department. All these are primarily concerned with the promotion of small and rural industries.Some of the support measures and programs meant for the promotion of small and rural industries are discussed in the next pages.

National Bank for Agriculture and Rural Development (NABARD)

NABARD was setup in 1982 to promote integrated rural development. Since then, it has been adopting a multi-pronged, multi-purpose strategy for the promotion of rural business enterprises in the country. Apart from agriculture, it supports small industries, cottage and village industries, and rural artisans using credit and non-credit approaches. It offers counseling and consultancy services and organizes training and development programs for rural entrepreneurs.

The Rural Small Business Development Centre (RSBDC)It is the first of its kind set up by the world association for small and medium enterprises and is sponsored by NABARD. It works for the benefit of socially and economically disadvantaged individuals and groups. It aims at providing management and technical support to current and prospective micro and small entrepreneurs in rural areas. Since its inception, RSBDC has organized several programs on rural entrepreneurship, skill upgradation workshops, mobile clinics and trainers training programs, awarenessand counseling camps in various villages of Noida, Greater Noida and Ghaziabad. Through these programs it covers a large number of rural unemployed youth and women in several trades, which includes food processing, soft toys making, ready-made garments, candle making, incense stick making, two-wheeler repairing and servicing, vermicomposting, and non-conventional building materials.

National Small Industries Corporation (NSIC)

This was set up in1955 with a view to promote aid and foster the growth of small business units in the country. This focuses on the commercial aspects of these functions. Supply indigenous and imported machines on easy hire-purchase terms. Procure, supply and distribute indigenous and imported raw materials. Export the products of small business units and develop export-worthiness. Mentoring and advisory services. Serve as technology businessincubators. Creating awareness on technological upgradation. Developing software technologyparks and technology transfer centers.A new scheme of performanceand credit rating of small businesses is implemented through National SmallIndustries Corporation (NSIC) with the twin objectives of (i) sensitizing the small industries about the need for credit rating and (ii) encouraging the small business units to maintain good financial track record. This is to ensure that they score higher rating for their credit requirements as and when they approach the financial institutions for their working capital and investment requirements.

Small Industries Development Bank of India (SIDBI)

Set up as an apex bank to provide direct/indirect financial assistance under different schemes, to meet credit needs of small business organisations.

To coordinate the functions of other institutions in similar activities.

Contd:The National Commission for Enterprises in the Unorganised Sector (NCEUS)

The NCEUS was constituted in September, 2004, with the following objectives: To recommend measures considered necessary for improving the productivity of small enterprises in the informal sector. To generate more employment opportunities on a sustainablebasis, particularly in the rural areas. To enhance the competitiveness of the sector in the emerging global environment. To develop linkages of the sector with other institutions in the areas of credit, raw materials, infrastructure, technology upgradation, marketing and formulation of suitable arrangements for skill development. The commission has identifiedthe following issues for detailed consideration: Growth poles for the informal sector in the form of clusters/ hubs, in order to get external economic aid. Potential for public-private partnerships in imparting the skills required by the informal sector. Provision of micro-finance and related services to the informal sector. Providing social security for the workers in the informal sector.

Rural and Women Entrepreneurship Development (RWED)

The Rural and Women Entrepreneurship Development programme aims at promoting a conducive business environment and at building institutional and human capacities that will encourage and support the entrepreneurial initiatives of rural people and women. RWE provides the following services: Creating a business environment that encourages initiatives of rural and women entrepreneurs. Enhancing the human and institutional capacities required to foster entrepreneurial dynamism and enhance productivity. Providing training manuals for women entrepreneurs and training them. Rendering any other advisory services.

World Association for Small and Medium Enterprises (WASME)

It is the only International NonGovernmental Organisation of micro, small and medium enterprises based in India, which set up an International Committee for Rural Industrialisation. Its aim is to develop an action plan model for sustained growth of rural enterprises.Apart from these, there are several schemes to promote the non-farm sector, mostly initiated by the Government of India. For instance, there are schemes for entrepreneurship through subsidised loans like Integrated Rural Development Programme (IRDP), Prime Minister Rojgar Yojana (PMRY), schemes to provide skills like Training of Rural Youth for Self Employment (TRYSEM), and schemes to strengthen the gender component like Development of Women and Children in Rural Areas (DWCRA).There are schemes to provide wageemployment like Jawahar Rojgar Yojana (JRY), food for work etc., on rural works programmes to achieve the twin objectives of creation of rural infrastructure and generation of additional income for the rural poor, particularly during the lean agricultural season. Last, but not the least, there are schemes for specific groups of industries such as khadi, handlooms and handicrafts.

Scheme of Fund for Regeneration of Traditional Industries (SFURTI)To make the traditional industries more productive and competitive and to facilitate their sustainable development, the Central Government set up this fund with Rs. 100 crores allocation to begin within the year 2005. This has to be implemented by the Ministry of Agro and Rural Industries in collaboration with State Governments. The main objectives of the scheme are as follows: To develop clusters of traditional industries in various parts of the country; To build innovative and traditional skills, improve technologies and encourage public-private partnerships, develop market intelligence etc., to make them competitive, profitable and sustainable; and To create sustained employment opportunities in traditional industries.The District Industries Centers Programme was launched on May 1, 1978, with a view to providing an integrated administrative framework at the district level, which would look at the problems of industrialization in the district, in a composite manner. In other words District Industries Centers is the institution at the district level which provides all the services and support facilities to the entrepreneurs for setting up small and village industries.Identification of suitable schemes, preparation of feasibility reports, arranging for credit, machinery and equipment, provision of raw materials and other extension services are the main activities undertaken by these centers.Broadly DICs are trying to bring change in the attitude of the rural entrepreneurs and all other connected with economic development in the rural areas. Even within the narrow spectrum, an attempt is being made to look at some of the neglected factors such as the rural artisan, the skilled craftsman and the handloom operator and to tune up these activities with the general process of rural development being taken up through other national programs. The DIC is thus emerging as the focal point for economic and industrial growth at the district level.

INDUSTRIAL POLICY(AIADA):

The Industrial Policy aims at making Jharkhand one of the most preferred destinations for investment, both from inside and outside the country and to ensure accelerated implementation of infrastructure related projects, increasing employment opportunities, improving productivity, ensuring homogeneous and balanced development of all Geographical regions of the State with emphasis on development of small, tiny and cottage industries.The broad policy objectives are elaborated as below:(i)Optimal utilization of agro-climatic, mineral and human resources of the State.

(ii)To promote economic activities to ensure maximum capital investment in the State with the objectives of increasing employment opportunities, improving standard of living of people at large, specially the deprived and the down trodden sections of the society and to ensure all round development of the State.

(ii)Identification of thrust areas and thrust zones to prioritize the sectors and categorization of backward regions with respect to industrialization.

(iii)To develop the state of art technology and infrastructure so as to ensure planned and accelerated industrial development.

(iv)To ensure Balanced Regional Development so as to prevent socio-economic distortions due to backwardness of any region.

(v)To encourage and involve private sector participation in the process of planned and rapid industrialization of the State.

(vi)To promote export of such items, in which the State holds advantage vis-a-vis other States.

(vii)Revival of viable sick units.

(viii)Simplification of procedures and to ensure administrative and legal reforms so as to provide hassle free sensitive administration and time bound effective disposal of matters in a transparent manner.

(ix)To take steps to protect and promote rural handicrafts so as to conserve and enrich cultural heritage, traditions and customs of the regions.

(x)To provide better development opportunities to Scheduled Castes, Scheduled Tribes, Handicapped, Weaker Sections and Women and to ensure their participation in the development process.

(xi)To promote research and development, technological upgradation and qualitative improvement and utilization of state of art technology to improve product, production

Government of Jharkhand

Jharkhand Industrial Policy 2001

Incentives for Quality CertificationSmall Scale / Ancillary Industries would be encouraged to seek ISI / ISO certification. The State Government shall facilitate for reimbursement of charges for acquiring ISO 9000 (or its equivalent) certification to the extent of 75% of the cost subject to a maximum of Rs. 75000/- in each case from the Central Government.Purchase of ISO/ISI certified products will be given preference.Jharkhand State Industrial Policy 2001

FISCAL INCENTIVES

There is a dire need for the new born State of Jharkhand to accelerate industrialization in the back ground of lost opportunities and non-realization of its industrial potential.

The types of incentives which are being offered are given below. Such incentives shall be admissible only once to a unit, which comes into commercial production during the period this policy remains effective:1. Capital Investment Incentive2. Captive Power Generating Subsidy3. Interest Subsidy4. Stamp Duty and Registration5. Employment Generation Based Incentives6. Special Incentives for Thrust Areas/ EOU and SC/ ST/ Women/ Ex-Servicemen and Handicapped Persons.7. Feasibility Study-Project Report Cost Reimbursement Subsidy8. Pollution Control Equipment Subsidy9. Incentive for Quality Certification

Co:

CAPITAL INVESTMENT INCENTIVE

The capital investment incentive shall be admissible to small and medium scale industries. The details of such incentives are as follows:Sl. No.Incentive Category Maximum Incentive (%) Financial Limit (Lakhs) Special Benefits

1Capital Investment Incentive (For Small & Medium Scale Industries) ABC 152025 152025 Additional 5% incentive over and above with a cap of Rs. 5 lakhs in thrust areas, 100% Export Oriented Units, SC/ST Entrepreneurs, Women Entrepreneurs, Handicapped persons and Ex-servicemen shall be admissible.

CAPTIVE POWER GENERATING SUBSIDY

The Captive Power Generating subsidy admissible to new industries in various categories of districts are as follows: Sl. No.Incentive Category Maximum Incentive (%) Financial Limit (Lakhs) Special Benefits

1Captive Power Generating Subsidy ABC 152025 2.253.003.75 Additional 5% incentive over and above with a cap of Rs. 0.75 lakhs in thrust areas, 100% Export Oriented Units, SC/ST Entrepreneurs, Women Entrepreneurs, Handicapped persons and Ex-servicemen shall be admissible.

INTEREST SUBSIDY

The objecting of providing this subsidy is to bring down interest cost of industry for the period an industry is most hard pressed. This subsidy is aimed to encourage industry to continuous growth rather than stagnate and contribute its share of prosperity to the state.

The interest subsidy admissible to new industries shall be admissible in the following manner on the interest actually paid to be financial institution/ banks on loans taken by such new industry: Sl. No.Incentive Category Maximum Incentive (%) Financial Limit (Lakhs)

1Interest subsidy ABC 255060 The subsidy shall be limited to a sum of Rs. 100 lakhs per annum provided the total interest subsidy shall not exceed 2% of the total sales amount made in the State of Jharkhand and/ or in course of interstate sales as supported by the certificate/ document issued by the competent commercial tax authority. This subsidy shall be admissible for a period of 5 Years of all categories of industries from the date of commercial production.

STAMP DUTY AND REGISTRATION

An eligible industrial unit irrespective of its location will be entitled to exemption from payment of 50% of Stamp Duty and registration fee paid for registration of documents within the State relating to purchase/ acquisition of land and buildings for setting up of a new unit.

EMPLOYMENT GENERATION BASED INCENTIVES This incentive would be admissible to following industries: All Khadi and Village industries All farm based industries such as horticulture, floriculture, sericulture, medicinal & aromatic plants based industries etc. Forest based industries such as Shellac, Bamboo etc.

All workers/ laborers employed in such industries would be covered under Contributory Group Insurance Scheme (CGIS), in which the State would pay 50% of the premium paid by the employer against each such worker/ laborers. This incentive shall be admissible to only such industries employing a minimum of fifty workers/ laborers.

FEASIBILITY STUDY-PROJECT REPORT COST REIMBURSEMENT SUBSIDY

The Industrial Units will be provided feasibility study-project report cost reimbursement subsidy @50% of the cost incurred in preparation of such report subject to a ceiling of Rs. 50,000/-. Such feasibility study- project report shall have to be prepared by a recognized consultant drawn from duly approved panel by the Industries Department. This subsidy shall be admissible after the commencement of commercial production.

POLLUTION CONTROL EQUIPMENT SUBSIDY

Capital investment subsidy for installation of Pollution Control and monitoring equipment shall be allowed on the certificate of the State Pollution Control Board about the necessity for such installation. This incentive shall be admissible to new and existing industrial units. This subsidy will be 20% of the cost of the pollution control and monitoring equipment subject to ceiling of Rs. 20 lakhs, in addition to the capital investment subsidy admissible to such industrial unit. This would be in addition to any other incentive available from any other source. This subsidy will be paid only after such unit produces supporting documents for the expenses incurred along with the certificate of a Chartered accountant.

INCENTIVE FOR QUALITY CERTIFICATION

Small Scale/ Ancillary Industries would be encouraged to seek ISI/ ISO certification. The State Government shall facilitate for reimbursement of charges for acquiring ISO-9000 (or its equivalent) certification to the extent of 75% of the cost subject to a maximum of Rs. 75,000/- in each case from the Central Government.

MEGA UNITS:

Special Packages shall be formulated for the new projects with an investment of more than Rs. 50 crores on case to case basis through direct negotiation with prospective investors.

Labor PoliciesThe Labor Policies for Small Scale Industries is governed by comprehensive laws. The following laws and policies are applicable for Small Scale Industries in India: Apprentices Act, 1961 The Bidi and Cigar Workers (Conditions of Employment) Act, 1966 Bonded Labor System (Abolition) Act, 1976 Child Labor (Prohibition & Regulation) Act, 1986 The Children (Pledging of Labor) Act, 1933 The Contract Labor (Regulation & Abolition) Act, 1970 The Employees Provident Funds and Misc. Provisions Act, 1952 Employees State Insurance Act, 1948 Employers Liability Act, 1938 Employment Exchange (Compulsory Notification of Vacancies) Act, 1959 Equal Remuneration Act, 1976 The Factories Act, 1948 The Industrial Disputes Act The Industrial Employment (Standing Orders) Act,1946 The Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 Labor Laws (Exemption from Furnishing Returns & Maintaining Registers by Certain Establishments) Act, 1988 Maternity Benefit Act, 1961 The Minimum Wages Act, 1948 The Payment of Bonus Act, 1965 The Payment of Gratuity Act, 1972 The Payment of Wages Act, 1936 The Sales Promotion Employees (Conditions of Service) Act, 1976, The Shops and Establishments Act, 1953, The Trade Union Act, 1926, Workmens Compensation Act, 1923 and The Weekly Holidays Act, 1942

SSI Regulations

Foreign Direct Investment Approval NRI Investment Approval Foreign Exchange Regulations Environmental Regulations Income Tax Corporate Tax Excise Duty Sales Tax Quality Standards Land Use Regulations The Industries Development and Regulation (IDR) Act, 1951 The Factories Act The Industrial Establishment Act The Minimum Wages Act The Payment of Wages Act Employees Provident Fund Act Employees Stock Option Act Workmen's Compensation Act Employment of Women Employment of Children Payment of Gratuity Act Employees State Insurance Act The Payment of Bonus Act The Shops and Establishments Act The Trade Union Act, The Air and Water Pollution Act, Environmental Protection Act, The Industrial Disputes Act, and Delayed Payment Act

POWER OF THE STATE GOVERNMENT

Notwithstanding anything contained in the foregoing paragraphs of the industrial policy, the State Government by issuance of notification in the official gazette may amend or withdraw any of the provisions and/ or the schemes mentioned herein above.

If any difficulty arises in giving effect to provisions of the industrial policy and/ or if any dispute arises about the interpretations of any provisions of the said policy, the same shall be referred to the Chief Minister through Chief Secretary and thereon the decision taken shall be final.

NOTE: SINCE ADITYAPUR AREA IS NOT UNDER THE SEZ THAT IS, SPECIALISED ECONOMIC ZONE, THE INCENTIVES ARE MAINLY PROVIDED BY THE STATE GOVERNMENT TO THE SMALL SCALE INDUSTRIES.

Demand Forecasting and Estimation(Region wise and Product wise)

Region Wise

RURAL ELECTRIFICATION

Jharkhand, Bihar, Uttar Pradesh, Orissa, Uttaranchal, Madhya Pradesh etc. are some of the states where significant number (more than 10%) of villages are yet to be electrified. Number of Villages (1991 Census) - 593,732 Villages Electrified (30 May 2006) - 488,173 Village level Electrification % - 82.2% Power Grid has been assigned the job for execution of rural electrification in 68 districts covering 87,300 villages at an estimated cost of about Rs. 9,400 Crore. Cumulatively till March 2008, Power Grid has established infrastructure for electrification of 22,082 villages including 3 lakh BPL (Below Poverty Line) connections under rural electrification program.

As stated earlier due to the government initiative to develop the eastern Indian states by actions such as to promote electricity and communication lines in the vast rural sector of Jharkhand, Bihar and Orissa States, the prestressed concrete poles will be needed in huge amounts by the states for such developments. The concrete poles manufacturers in India are in states of Uttar Pradesh, Madhya Pradesh, New Delhi, Haryana, Karnataka, Gujarat, Maharashtra, but such manufacturing industry has not been manufactured yet in the state of Jharkhand.

And so for the governments initiative to promote electricity and communication lines the eastern states needed the concrete poles which would have to be imported by the states that have the concrete manufacturing industry which the state of Jharkhand would have to purchase at a higher price than it really is. Therefore, starting a business of manufacturing quality prestressed concrete poles in Adityapur industrial area in Jharkhand is advantageous to both the business and the rural areas in eastern states for which the concrete poles would be manufactured and sold in much less price than it would have got it from the other states. Hence the demand for the prestressed concrete poles will be high in the region.

Product Wise

Since The Indian Power Sector has witnessed a strong all round revival in the last five years with growth rate averaging at about 6 percent per year, these concrete poles will have a high demand for need of a supporting structure for; street, highway and area lighting, athletic lighting, signs, overhead power distribution and power transmission as well as power substations and traffic signals. The construction possibilities of prestressed are as vast as those of ordinary reinforced concrete. Typical applications of prestressing in building and construction are:

Structural components for integration with ordinary reinforced concrete construction, e.g. floor slabs, columns, beams.

Structural components for bridges

Water tanks and reservoirs where water tightness is of paramount importance

Construction components eg piles, wall panels, frames, window panels, power poles, fence posts

Construction of relatively slender structural frames

Electrification prestressed concrete poles for transmission lines

Competitors Analysis

Though nearby the Samartha industry, there are no other competitors to create a threat for the company by competition. However, seeing a lot of demand over this region and seeing the feasibility of such project and its profitability, many entrepreneurs are likely to pool in those areas and create competition and thus create a threat for the company.Other than that the competitors will try to enhance the product better than ours and diversify its product to attract customers therefore the quality, reasonability and the features and variety of the product need to be kept in mind in order to survive with the competitors.With this, the competitors will apply better pricing strategies to penetrate the market for its profit and promote its product to the maxim. Therefore, there is a constant need to evaluate the pricing and promotional strategies to stand up to the expectations of the customers with respect to the competitors present in the external environment.To identify the strengths and weaknesses of the competitors company is an important aspect in developing a competitors analysis in order to enhance the company better than its competitors.

Expected Industry Growth Rate

Every Indian believes that India would become a developed country by 2020.Thanks to our beloved Ex-President of India Dr. Abdul Kalam Azad for cultivating his vision in our minds. Amongst some of the core areas which we need to focus in the next decade to become a developed nation is also the Infrastructure, this is one of the most discussed topic in the last couple of years. Infrastructure means providing best environment like roadways, airports, bridges, clean water, electricity, sewages etc. to the citizens of a country. This not only improves the quality of living but also bring more foreign investments to the country. Infrastructure is like fuel for the fast growing nation like India. According to BusinessWeek "The infrastructure deficit in India is so critical that it could prevent India from achieving the prosperity that finally seems to be within its grasp. Without reliable power and water and a modern transportation network, the chasm between India's moneyed elite and its 800 million poor will continue to widen, potentially destabilizing the country".Since there will be a lot of building up of infrastructure like bridges, roadways and better power transmission and provision of electricity, manufacturing of prestressed concrete poles industry will boom in the future and will grow at a good rate because of its demand.

CHAPTER 3-Project Feasibility Study

Economic Viability:-

Market Potential & Demand Pattern

Prestressed Concrete Poles have totally replaced steel and wooden poles now. There are a number of advantages of using Prestressed Concrete Poles as against its proxies. First of all these poles are corrosion resistant, they are light weight, are economical and have long durability.

Due to the advantages mentioned above, the market span for these poles has grown swiftly. The major use of these poles is in the area of power distribution system. With central and state government emphasis on rapid electrification of rural areas and with private sectors indulging in expansion of telecommunication lines, the demand for Prestressed Concrete Poles is found to increase substantially in the years to come. In addition, replacement of existing steel and wooden poles, which is an ongoing process, will lead to a positive increase in demand.

Domestic & International Project :-

The major demand for this Product is in the Domestic Market.

We dont plan to go into export business to sell the poles in the International Market due to the availability of major competitors for these poles in the International Market.

Therefore, we are basically targeting the Domestic Market only and the buyers of the product are within the geographical boundary limits of our country.

In the Domestic Market, the major demand for these poles is in the Eastern part of India so if we go into selecting a particular area then we would target only the states of Eastern India.

The major buyers for the poles would be the Government, Public Sector Enterprises and some Private Companies as well.

THE MAIN BUYERS OF P.C.POLES IN THE STATE AREA ARE:

i) Through NTPC, NHPC & PGCIL. Main sub-contractors are GETPL, Bajaj Electricals, Tata Power, and Maytas Infrastructure.

ii) Distribution companies of state (CESU, WESCO, NESCO & JUSCO.).

iii) Various Central and State Government projects.

iv) Industrial Growth Centers and Complexes.

v) Large and Medium Scale Industries for the factory and colonies.

With rural electrification gaining momentum through Government sponsored RAJIV GANDHI GRAMEEN VIDYUTIKARAN YOJANA Scheme and large new projects taken up for implementation, there is huge demand for these poles within state. Since there are not many units in the state manufacturing this item, there is certainly very good scope for marketing this within the state. With adequate marketing efforts there is a simple scope to sell Prestreseed Concrete Poles outside the state also.

The positioning for the manufacturing of the poles would be setup in an Industrial area of Jamshedpur and the warehouse for it will be within the factory itself. The company will be in a tie up with a transport company to deliver the poles to the desired area. Mainly these poles will be delivered to rural areas both within and outside the state as per the requirements.

MARKETING PLANS 7 PS

1. PRODUCT PRESTRESSED CONCRETE POLES 2. PRICES RS. 1800 for 8 meter POLE RS. 2600 for 9 meter POLE

3. PROMOTION The Government, Public Sector Enterprises and some Private Companies will be the major buyers for this Product. Therefore there is no need for advertising this product and spending huge money on it. Quotations for this can be mailed to interested parties and Tenders regarding this can be acquired.

4. PLACE The main areas for setting up of the Poles would be for the rural areas as a part of development initiative for distribution of electricity throughout the villages.

5. PACKAGING The product that is the concrete pole is not retail or a consumer good. It is an Industrial form of product so no special packaging cost is to be incurred in the manufacturing of concrete poles.

6. POSITIONING Our Company will benefit due to Economies Of Scale and we will provide the concrete poles to the buyers at a reasonable price compared to manufacturers from other states as they will sell the poles at higher prices by adding a huge amount of Transportation cost to the poles. Moreover, Jamshedpur being a developed city has good Transport facilities which are easily and locally available.

7. PEOPLE Labors which are required to work in the factory are available easily and locally in a sufficient quantity so there is no need to call labors to work from outside area.

TECHNICAL VIABILITY :-

MANUFACTURING PROCESS

The steel moulds are properly cleaned, oiled and assembled and are kept in line. The 4 mm diameter high tension steel wires are inserted through the moulds from the fix end to tension end of anchor posts. The High Tension wires are then anchored at the fixed ends and tension is applied at other end to all the wires. The steel stirrups, earthing wires & other fixtures are fitted firmly as per specification. Then the concrete is prepared as per the designed mix in a motorized mixing machine and poured into the moulds & vibrated by high frequency vibrators to attain proper compaction in concrete. The moulds with concrete are then kept for 72hrs and water cured. After green poles attain the desired strength the prestressed is transferred to the pole by cutting the High Tension wire and demoulded. The Prestressed Concrete Poles are transferred to the tanks by help of Gantry wheel and kept under for deep water curing for 28 days and then transferred to the stock yard for delivery.

COURSE OF ACTION IN PRESTRESSED CONCRETE POLE MANUFACTURE

FLOW DIAGRAM

Cleaning, Oiling and assembling of moulds.

Tensioning of wires and fitting up of stirrups, earthen wires and other fixtures firmly.

Concrete is poured and vibrated by vibrators to attain Proper compaction.

Mould with concrete left for water curing.

SOURCE OF TECHNOLOGY

The technology to be used in construction of prestressed concrete poles is indigenous in nature. India has that type of technology to manufacture these poles as in other regions of our country, these types of pole are being manufactured since a long back. Therefore there is no particular need for importing the type of technology to manufacture the poles as already the technology exists.

COST OF ACQUISITION OF TECHNOLOGY

There is a need to purchase the technology as steel moulds would be mainly required to manufacture the concrete poles. The total estimated cost to purchase the entire technology required in manufacturing process is around 65 lacs which includes the cost of plant and machinery, auxiliary machinery as well as laboratory equipments. Later on as the year progresses in manufacturing of poles, there would be more investment and expansion in the cost of technology.

ACTUAL PRODUCTION

As for the beginning of the business production, we have decided to produce combined 1,00,000 units per annum. The number of units for 8 meter and 9 meter in length would be produced as per the requirements of the market. In the early stages we would be producing at 60% capacity level and at later stages we would be expanding our capacity levels to 70% and 80% as well.

NEW CAPACITIES UNDER CONSIDERATION

The beginning capacity level would be at 60%. We are anticipating more demand for poles in the next 5 year plans formulated by the Government. In this market in future, if the number of manufacturers doesnt increase in the near future then it would be possible for us to go under consideration for future expansion of poles at even greater capacity levels so that the demand are consequently in match with the supply level.

HUMAN RESOURCE REQUIREMENTS AT DIFFERENT LEVEL

For efficient production, man power requirement, their qualifications and cost have been determined as under :-

DesignationNos.Salary p.m. eachTotal Annual Payment

Manager220000480000

Supervisor56000360000

Tensioning Worker 145000840000

Demoulding Worker2050001200000

Rod Binding Worker55000300000

Casting Worker3550002100000

Numbering Staff & Store Keeper34000144000

Other Unskilled Labors 104000480000

Watchman34000144000

Accountant35000180000

Office Staff54000240000

Total1056468000

Add :- Other Benefits and Staff Welfare @ 25% 1617000

Total Cost Rounded up to 8085000

ESTIMATION OF RAW MATERIALS REQUIREMENT :-

The total cost of raw material at 100% capacity utilization is estimated as under :-

ParticularsQuantityRate per Pcs (In Rs. lacs)Total Amount

Stone Chips

P.C.Pole (8mtrs)60,0000.0025150.00

P.C.Pole (9mtrs)40,0000.00375150.00

Cement

P.C.Pole (8mtrs)60,0000.0035210.00

P.C.Pole (9mtrs)40,0000.00525210.00

Sand

P.C.Pole (8mtrs)60,0000.000530.00

P.C.Pole (9mtrs)40,0000.0007530.00

Wires

P.C.Pole (8mtrs)60,0000.007420.00

P.C.Pole (9mtrs)40,0000.0105420.00

SOURCES OF RAW MATERIALS :-

The basic raw materials required for manufacturing the poles are sand, cement, stone chips and wires. All these raw materials are very well readily available in Jamshedpur as it is the second largest Industrial city of India after Noida. The manufacturers or dealers of raw materials are plenty in number itself in the Adityapur area where we are setting up the plant for Prestressed Concrete Poles. We are also planning to have a tie up with the dealers or manufacturers of raw materials after we send them the quotations regarding the quantity to supplied for it and we will give order to those dealers or manufacturers who are willing to supply the materials as and when required at the cheapest possibility rates so that we can benefit because of low cost production and economies of scale.

FINANCIAL VIABILITY :-

Total Investment Analysis

This is the total breakup of the fixed as well as working capital analysis which is required by our company to produce 1,00,000 units

PROJECT COST : Fixed Capital Rs. In Lacs Land & Land Development 51.00 Civil Construction 30.00 Plant & Machinery 44.00 Auxiliary Machinery 18.00 Laboratory Equipments 3.00 Furniture & Fixtures 3.00 Preliminary, preoperative and Interest during Construction Period 3.00 --------- 152.00 Margin for Working Capital 55.00 --------- 207.00

Sources of Finance

As we have mentioned before that the total investment required for manufacturing of poles estimated is 2 crores and 7 lacs of rupees. The cost for investment will be met in a 60:40 ratio as 60% of the cost which comes up to near about 1 crore and 29 lacs will be met by the partners. The partners have agreed to share the cost on an equal fifty-fifty basis. The remaining 40% of the cost that is 78 lacs of rupees will be financed by the banks and financial institutions at the rate of 11% p.a. . So, basically the source of finance is both owned and external which means we are going for a collateral type of finance.

SOURCES OF FINANCE : Rs. In Lacs Promoters Contribution (50:50) 129.00Term Loan from Financial Institution 78.00 -------- T O T A L 207.00 ---------

DEBT EQUITY RATIO (APPROX) : 0.604:1.000

COST OF CAPITAL & REPAYMENT PERIOD

201120122013201420152016

Opening Balance78.0078.0062.4046.8031.2015.60

Total Repayment -15.6015.6015.6015.6015.60

Total Interest8.587.946.224.502.901.19

Closing Balance78.0062.4046.8031.2015.60 -

FINANCIAL ANALYSIS :-

BREAK EVEN ANALYSIS

BREAK EVEN POINT

(Rs. In Lacs)

At 90% Capacity At 100% Capacity

A) Income Receipt 1,524.39 2,136.92

B) Variable Cost 1,317.40 1,834.35

Interest on Working Capital Loan to Bank 13.20 13.20

1,330.60 1,847.55

c) Fixed Cost

Selling, Distribution and Office Expenses 48.00 52.00

Depreciation 13.05 13.05

Interest on Term Loan 4.50 -

65.55 65.05

D) CONTRIBUTION (A) - (B) 193.79 289.37

E) BREAK EVEN POINT (%) 33.83 22.48

PROFITABILITY STATEMENT FOR 10 YEARS

Year2011

No.of months12

Gross Sales

Domestic Sales1020.00

(-)Excise Duty77.65

Net Sales 942.35

Cost of Sales

i.Raw materials (indigenous)874.80

ii.Misc Stores (indigenous)13.50

iii.Diesel13.50

iv.Direct Labour (Factory wages & salaries)67.20

VProduction overhead14.20

ViDepreciation13.05

ViiSub-total (i to vi)996.25

ViiiAdd: Opening Stock-in-process0.00

Sub-total (vii + viii)996.25

x.Deduct: Closing Stock-in-process0.00

xi.Cost of Production996.25

xii.Add: Opening Stock of finished goods0.00

Sub-total (xii + xi)996.25

xiii.Deduct: Closing Stock of finished goods90.00

xiv.Sub-total (Total Cost of Good Sold)906.25

Selling, Distribution and Office Overhead12.00

Cost Of Sales918.25

Operating Profit before Interest 24.10

Interest @ 11%8.58

Operating Profit after Interest 15.52

Profit before tax/loss 15.52

Provision for taxes @33.99%5.28

Net Profit / Loss 10.24

Retained Profit 10.24

Year2012

No.of months12

Gross Sales


(-)Excise Duty108.71

Net Sales 1319.29

Cost of Sales



iii.Diesel15.75



ViDepreciation13.05











Cost Of Sales1199.30


Interest @ 11%7.94






Year2013

No.of months12

Gross Sales



Net Sales 1507.76

Cost of Sales



iii.Diesel18.00



ViDepreciation13.05













Interest @ 11%6.22






Year2014

No.of months12

Gross Sales

Domestic Sales1650


Net Sales 1524.39

Cost of Sales


ii.Misc Stores (indigenous)18

iii.Diesel18

iv.Direct Labour (Factory wages & salaries)90

VProduction overhead25

ViDepreciation13.05


ViiiAdd: Opening Stock-in-process0


x.Deduct: Closing Stock-in-process0


xii.Add: Opening Stock of finished goods110


xiii.Deduct: Closing Stock of finished goods110


Selling, Distribution and Office Overhead48



Interest @ 11%4.50






Year2015

No.of months12

Gross Sales



Net Sales 1524.39

Cost of Sales



iii.Diesel18.00



ViDepreciation13.05













Interest @ 11%2.90






Year2016

No.of months12

Gross Sales



Net Sales 2136.92

Cost of Sales



iii.Diesel24.30



ViDepreciation13.05













Interest @ 11%1.19






Year2017

No.of months12

Gross Sales



Net Sales 2136.92

Cost of Sales



iii.Diesel24.30



ViDepreciation13.05













Interest @ 11%0.00






Year2018

No.of months12

Gross Sales

Domestic Sales2313


Net Sales 2136.92

Cost of Sales



iii.Diesel24.3



ViDepreciation13.05











Cost Of Sales1899.4


Interest @ 11%0






Year2019

No.of months12

Gross Sales

Domestic Sales2313


Net Sales 2136.92

Cost of Sales



iii.Diesel24.3



ViDepreciation13.05











Cost Of Sales1899.4


Interest @ 11%0.00






Year2020

No.of months12

Gross Sales

Domestic Sales2313


Net Sales 2136.92

Cost of Sales



iii.Diesel24.3



ViDepreciation13.05











Cost Of Sales1899.4


Interest @ 11%0.00






PROJECTED BALANCE SHEET FOR 10 YEARS

2011

LIABILITIES

Share Capital129.00

Profit & Loss Account10.24

Secured loan : Term Loan78.00

Working Capital Loan120.00

Total Liabilities337.24

ASSETS

Fixed Assets (Cost/WDV)152.00

Less : Depreciation13.05

Net Fixed assets138.95

Current Assets

Inventories177.90

Sundry Debtors42.50

Other Current Assets9.00

Cash & Bank Balance139.29

Total current assets368.69

Less : Current Liabilities170.40

Net Current Assets198.29

Total Assets337.24

2012

LIABILITIES

Share Capital129.00





ASSETS




Current Assets

Inventories210.76

Sundry Debtors79.50






Total Assets385.37

2013

LIABILITIES

Share Capital129.00





ASSETS




Current Assets

Inventories247.49

Sundry Debtors86.00






Total Assets386.29

2014

LIABILITIES

Share Capital129.00





ASSETS




Current Assets

Inventories252.79

Sundry Debtors88.75






Total Assets373.56

2015

LIABILITIES

Share Capital129.00





ASSETS




Current Assets

Inventories242.98

Sundry Debtors98.75






Total Assets359.02

2016

LIABILITIES

Share Capital129.00





ASSETS




Current Assets

Inventories327.69

Sundry Debtors106.38






Total Assets438.07

2017

LIABILITIES

Share Capital129.00





ASSETS




Current Assets

Inventories307.69

Sundry Debtors96.38






Total Assets405.79

2018

LIABILITIES

Share Capital129.00





ASSETS




Current Assets

Inventories307.69

Sundry Debtors96.38






Total Assets405.79

2019

LIABILITIES

Share Capital129.00





ASSETS




Current Assets

Inventories307.69

Sundry Debtors96.39






Total Assets405.79

2020

LIABILITIES

Share Capital129.00





ASSETS




Current Assets

Inventories265.99

Sundry Debtors76.38






Total Assets405.79

JK S

Implementation Schedule

Samartha Technologies Private Limited is planning to start its operations with effective from the month of January 2011. The proposed investment for handling all the operations and cost functions is estimated to be Rs. 2 crores and 7 lacs which has been divided in 60:40 ratio as 60% of the fund will be contributed by the partners and the remaining 40% to be financed by bank at the rate of 11% per annum. The initial capacity production will be at 60% level and in the later years, the capacity rate will be increased as the demand for the concrete poles will go high in future. We have already begin with contacting our sources for selling of the poles as our quotation will be less than the other suppliers from other states due to a vast reduction in transport cost as the fuel prices are soaring at high rates these days. We are forecasting to reach the break-even analysis at the end of third year so that our investments are ploughed back and after the third year we will be able to gain surplus profits and expand our production capacity level to 100% in the later upcoming years. The best advantage to start the factory is that all the required raw materials are easily available nearby itself and we dont need to contact suppliers from outside city or states. The labor is also available in sufficient quantity and at an affordable rate which will lead to a decrease in the cost of production. With rural electrification gaining momentum through Government sponsored RGGVY Scheme and large new projects taken up for implementation, there is huge demand for these poles within state. Since there are not many units in or nearby the states manufacturing this item, there is certainly very good scope for marketing this within the state. With adequate marketing efforts there is a simple scope to sell P.C.Poles outside the state also. As Jamshedpur is itself called as the Steel City of India, there wont be any transport problem for delivering these poles as they are large transporters company willing to take the order and get the poles delivered to the required area. Considering the low power requirement for the industry, we have decided to use our own Diesel Generator Set for power as the cost for a permanent electric connection and the installation charges involved will be huge. The water requirement of the unit will be met by own deep Bore well. During the 1st year the unit is expected to achieve a capacity utilization of 60% and in 2nd year, 3rd year and 4th year onwards, the unit is expected to utilize 70%, 80% and 80% respectively. The average sales price per Piece of Pole of 8 Meters has been estimated at Rs.1800 and for Pole of 9 Meters Rs.2600/- per piece. (Excluding all taxes and duties and delivered at its factory site). It has been estimated that the rates of sales will remain same during projection period. Interest on Term Loan and Working Capital Loan has been estimated @11% p.a. throughout the projection period. The depreciation has been calculated in Straight Line Method as per Companies Act. Income-tax has been presumed @33.99% on income. Considering the estimates Profitability and the Balance Sheet, the Company is in a position to Pay Back the full Term Loan. Hence the Project is very much viable financially.

CONCLUSION

Prestressed concrete can provide significant cost advantages over structural steel sections or ordinary reinforced concrete. The limitations of prestressed concrete are few and really depend upon the imagination of the designer and the terms of his brief. The only real imagination where prestressing is a possible solution may be the cost of proving moulds for runs of limited quality of small numbers of non standard units.All the materials used in manufacturing the prestressed concrete poles are provided by the AIADA industrial area. The project overall is very feasible especially due to the governments initiative to promote electricity and power transmission in vast rural areas of east Indian states therefore giving the business a major scope for profit as the demand for the product will be high. As it will also promote rural development it will be supported by incentives given by state governments. The project is overall very profitable as well as feasible and has not much threats but has more opportunities.

BIBILIOGRAPHY

Indianblogger.com http://www.aiada.in http://exim.indiamart.com/ssi-policies/ blogs.siliconindia.com http://megandlo.tripod.com/Synopsis.pdf www.lonestarprestress.com/

For the successful completion of the Entrepreneurship Development Project for The Manufacturing of Prestressed Concrete Poles, we would like to especially thank Mr. Anurag Agarwal who has a vast amount of experience in this business and throughout the Project he has shared with us a lot of information on how the Prestressed Concrete Poles are made and what are the various Government Schemes to promote this Industry. Without his information this project would have been hanging in the middle.

Sheet1TERM LOAN - I(Rs. in Lacs)Interest Rate11%201120122013201420152016FIRST QUARTEROpening Balance78.0078.0062.4046.8031.2015.60Repayment0.03.903.903.903.903.90Closing Balance78.0074.1058.5042.9027.3011.70Interest2.152.151.721.290.860.47SECOND QUARTEROpening Balance78.0074.1058.5042.9027.3011.70Repayment0.03.903.903.903.903.90Closing Balance78.0070.2054.6039.0023.407.80Interest2.152.041.611.180.750.35THIRD QUARTEROpening Balance78.0070.2054.6039.0023.407.80Repayment0.03.903.903.903.903.90Closing Balance78.0066.3050.7035.1019.503.90Interest2.151.931.501.070.700.25FOURTH QUARTEROpening Balance78.0066.3050.7035.1019.503.90Repayment0.03.903.903.903.903.90Closing Balance78.0062.4046.8031.2015.600.0Interest2.151.821.390.970.590.12TOTAL REPAYMENT0.015.6015.6015.6015.6015.60TOTAL INTEREST8.587.946.224.502.901.19

Sheet1DEPRECIATION CHART AS PER COMPANIES ACT AS PER S. L. M.(Rs. In Lacs)Name of the AssetsCOST Rate of DepreciationDepreciation amount

Land & Land Development51.000.000.00

Civil Works30.000.103.00

Repayment44.000.156.60

Interest18.000.152.70

Opening Balance3.000.150.45

Closing Balance3.000.100.30

TOTAL149.0013.05

Sheet1PAY BACK PERIOD

A) INVESTMENT = Rs 207 Lacs

B) CALCULATION OF PAY BACK PERIOD

YEARANNUAL PAY BACKCUMULATIVE1st31.8731.872nd94.95126.833rd109.76236.594th110.92347.515th110.37457.886th 203.25661.12PAY BACK PERIOD = 3 (Three) YEARS

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