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SUBMITTED
BY
PROF.
PREFACE
This project report is based on "Projected financial statement to be submitted to the bank for the loan purposes".
It was taken care during the entire project that there is no false information wrong map or manipulated data is included at any point. This report is based on the information provided by authority & personal observation.
It was really a best project to work on which gave me an inestimable chance to learn.
ACKNOWLEDGMENT
I wish to express my sincere thanks and gratitude to all of them who have helped me to complete my project report. First of all I would like to thank the supreme power, the almighty GOD, who has always guided me to work on right track & always blessed me with his blessing by giving me the best.
I am sincerely thankful to the all concern authorities & employees from Production, HR, Personnel Department & worker of the concern industry and the SBI BANK for providing me valuable information & their precious time.
This project report could not have been completed without the guidance of Our Principal and Our Project Guide Prof.
Rakesh mittal
Once again I would like to thank to everyone who had directly & indirectly helped me for completing this Project Report.
INDEX
Sr. no 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Particulars ABOUT PROJECT REPORT OBJECTIVE OF THE PROJECT COMPANY PROFILE ABOUT COMPANY PLANT LOCATION PRODUCTION INTRODUCTION PRICING POLICY COMPETITION FINANCE DEPARTMENT SOURCE OF FINANCE CAPITAL STRUCTURE FUTURE PLANS REASON FOR TAKING LOAN ASSUMPTION FINANCIAL STATEMENT BANK REPAYMENT SCHEDULE PROJECTED DEPRECIATION PROFITABILITY STATEMENT PROJECTED CASHFLOW PROJECTED BALANCE SHEET PROJECTED RATIO ANALYSIS ANNEXURE Page no.
INTRODUCTION
We are thankful to PUNE UNIVERSITY for having Project Report on "Projected Financial statement to be submitted to the bank for loan proposals" in BBA course. It was really a good experience to make a report with the company and the Bank.
In
BBA course the Project report is the really very helpful to learn
the practical knowledge about the companies. Project report was completed in a food industry, i.e. RANJAN FLOUR PVT. LTD. This report help me to learn about how the company manage there financial & marketing strategies' manufacturing process of goods, working environment, there plant location & plant layout was observed & studied.
The information was noted during the industry visits by own observation about the unit & there running production & other process. Which lead to enough emphasis on development of us.
At over all experience, it can be said that the project report in BBA will greatly benefit the future of the student.
Primary objectives:
To watch how the production & operation work take place in a factory. Which policies and strategy they adopt to expand there business and keep a valuable position in market or customers mind. To study the inter relationship of Finance Department with other departments. To study the working capital and way of get the loan from the bank.
Secondary objectives:
To understand the marketing strategy of a company to maintain their working capital. To understand the different loan schemes and process of loan in a bank.
Company Profile
2. Year of Establishment
2011
3. Business Type
Manufacturer
4. Type of Ownership
5. Corporate Office
6. Factory
020-66496622
020-27700169
info@ ranjanflour.com 10. Website 11. Total no of Employees 12. Types of Product 30-40 People www.ranjanflour.com
Flour
"To attain and maintain a position of leadership and market dominance in "Food Products" while leveraging our core strengths of Sourcing & Logistics."
"To achieve national leadership in Food Product business by providing best wheat Product like Aata, which is useful in making various foods and food products".
Company s Belief:
We endeavour to reach the leadership position in each Segment / Sector of our Product /Service. We are committed to satisfy our customers by providing such Quality Product / Service. Which gives highest value for money.
We believe that employees are most important asset through which we can reach the top in each category of our Product /Service. Therefore, we will emphasize on their continuous improvement through up-gradation of relevant knowledge and training.
We commit ourselves to continuous growth, so as to fulfill the aspirations of our customers, Employees and Shareholders.
Before setting a unit, entrepreneur has to keep in mind the various location factors such as availability of land, power, water such infrastructure facilities availability of labour etc... It is quite known that ALANDI.PUNE is an industrial area and we can obtain any facility as a convenient way. Surrounding area is containing a big market for the Food Products. There are many other facilities of factors, which inspired to choose proposal location.
LABOURS:Generally all types of man power are available at reasonable cost. As for as this manufacturing firm is concerned with semiskilled labour and also get labour in adequate number and at cheap rate
RAW-MATERIALS:There is more transportation facility because of center point of Baramati, Pune. From this we can easily get the raw materials like wheat, bags etc., RANJAN FLOUR PVT.LTD. Purchase raw materials from various villages and cities. TRANSOPRTATION & COMMUNICATION:As we have seen that PUNE is a center point of ALANDI. So transportation facilities are available in PUNE. It is situated on National High Way. So, road transport is easily available. INDUSTRIAL ATMOSPHERE:There is better industrial atmosphere in ALANDI (PUNE) as so many other industrial. Like Textile, Steel, Cotton, Chemical, oil Industrial & Forging Industries etc., are located there. Hance we could easily develop jour industry through inspiration of other industries. FINANCIAL FACILITIES:There is availability of national bank IN ALANDI and this companys headquarter is nearer to Pune city. OTHER FACTORS:There are so many other factors, like electric connection maintenance of machine, technical knowledge, which are responsible for the set up of our industry in this area. Thus, location is suitable in every aspect.
Production Introduction
Production is a very integral part of the business system "production means a bundle of utilities by the company to its customer continues process to convert raw materials into final product is called a manufacturing process".
Production involves the steps-by-steps conversion of one from of materials into another chemical processing to create or enhance the utility of product or services.
The production or manufacturing department holds the most important and basic position in any industry or a unit.
The RANJAN FLOUR PVT.LTD. is production some of the item listed below.
Aata
Biscuit, Bread.etc.
Pricing Policy
Price is money value of the product that is agreed upon the transaction. Price plays very important role in marketing because price decides profit & financial position of the business firm.
Price is the exchange value of the product or services always expressed in money. Pricing concept plays a vital role in marketing management. The decision regarding pricing must be taken after considering every aspect of business & while fixing the price not only profit but social responsibilities should also be taken into consideration.
Competition
Any type of organization faces the competition in market. When in market competition is on more so any industry has a monopoly so competition is play vital role in the market. Competitor "RANJAN FLOUR PVT.LTD" Is not only in PUNE but all in MAHARASHTRA that is given below.
Shyam Roller Flour Mill Coloration Flour Mill Ambuja Roller Flour Mill Etc.
Shyam Roller Flour Mill is situated at KHADKI. Coloration Flour Mil is situated at THANE. Ambuja Roller Flour Mill is situated at KALYAN.
Introduction
Finance is regarded as the life block at business enterprises. This is because modern business is money oriented economy finance is one of the basic foundations of all kinds of activities.
Financial Management is an appendage of the finance function. Financial Management involvers the application of general management that part of mgt. Which is concerned mainly with raising funds as profitably as possible planning future operation & through finance according cost, accounting badgering statistics & other means? It is continuously concerned with achieving as adequate rate of return on investment, as this is necessary for survival & attracting new capital. It is the various projects depending upon their importance & pay off capacities.
Financial Function, center rounds the mgt. of fund raising & using the effectively financial mgt. is important because it has impact on all the activities of firm its primary responsibly is to discharge the finance function successfully in touches of all the other business function.
Source of Finance
Source of finance means where to collect funds. And in which manner it collects the funds which are used in day to day operations of the company. Generally there are two source of finance.
Internal External
In "RANJAN FLOUR PVT.LTD". industry, the source of funds is both internal & external. The company collect the funds by OWNED, personal loans and some Business loans and also take a some loan for machinery.
Capital Structure
Capital Structure refers to combination of ownership capital preference capital, capital loans, etc. "RANJAN FLOUR PVT.LTD". Capital structure Comprises of both owners, capitals as well as borrowed capital.
Owners capital: Share capital of the company is owner's capital. Which is contributed by the OWNER of the company.
Borrowed capital: At "RANJAN FLOUR PVT.LTD". the available capital is perfectly utilized. The company borrowed money from the State Bank of India.
Future Plans
As the changing in market, the Managing Director of the "RANJAN FLOUR PVT.LTD". Plan to maximum their sales, as much as possible by more hard work; they also plan to take complete Automatic Machine to cover newer technology in flour industry. So company planning to increase the production to cover the national market in future.
So due to fluctuation in market and the competitors, the board of the "RANJAN FLOUR PVT.LTD". is deciding to install more automatic machine in their premises.
Financial Planning
A firm needs to manage its resources effectively and effective manner is possible only when the management works out the future courses of action in advance and takes decision on professional manner, utilizing the individual and group efforts in co-ordinate and rational manner planning should estimate the resources required to carry out the operations and determine how far these resources can be generated internally by the form itself and how far they will have to obtained externally. Generally "RANJAN FLOUR PVT.LTD". Prepare financial planning as follows:
Company decides its long-term and short-term objective: Requirement of long-term and short-term capital. The Management of the company believes that to develop the procedure is most the end of the financing activities or planning but must control over that. For this purpose company review the short-term objective policies procedures in the light of changed economic. Social and business situation from time to time in orde to keep the changing environment.
About the loan to be taken:The loan is taken for purchase of premises, to furnish it and buy other automatic machine. For this purpose, the purchased premises will be hypothecated to the bank as security .The term loan would be taken at 12% p.a.
Total lnvestment-60 Lakhs. Owned Capital-18 Lakhs. Bank loan-42 Lakhs. Loan from-State bank of India (Alandi, pune)
ASSUMPTION
1. Interest on term loan is calculated at 12%. 2. The term loan is required in 10 years and the installments are paid yearly. 3. The rate of depreciation are considered as mentioned in the income tax act. The rates of depreciation are as follows:Land& building-12% Machinery Furniture -10% -10%
4. Working of F.B.T. (Fringe Benefit Tax) should be considered a per present rates and should be debited to profit and loss account, but it is not allowable expenditure as per income tax a so it can be shown after tax payment thus it has been ignored. 5. The company maintains a conservative dividend policy. The companies plough back all the profits for the operations in the company. 6. It is being assumed that all transactions are being done through crossed only so applicability of banking cash transaction tax (B.C.C.T) is not considered. 7. The land & machine is to be hypothecated to the bank.
Financial Statement
33.25,000.00
11,85,000.00 25,000.00
Total Equipment Cost 3 4 Furniture Security deposit Deposit with MSEB 5 6 Computer & printer Working capital (3 months)
12,10,000.00 50,000.00
Total cost of the project Own contribution (30%) Bank finance (70%)
SR.NO. Weight
Rates/Bag
Total revenue
5 KG
140
20000.00
28,00,000.00
10KG
250 Total
13600.00
34,00,000.00 62,00,000.00
Total annual revenue from sale of Flour is (28, 00,000.00+34, 00,000.00) 62, 00,000.00 I have assumed that the annual growth in sales of Flour will increase by 10% from next year onwards.
Personnel
(a).Administrative Staff 1. Factory Manager 2. Accountant 3. Salesman 4. Store-keeper 5. Clerks 6. Watchman Peon (b)Technical Staff 1. Production Chemist 2 2. Labour Total2 R.S.-6000 R.S.-6000 63,000 1 1 2 1 2 2 R.S.-10,000 R.S.-5000 R.S.-12000 R.S.-4000 R.S.-12000 R.S.-8000
1. Repairs Maintenance 2. Consumable stores 3. Transport Travelling 4. Publicity 5. Postage stationery 6. Telephone 7. Insurance 8. Miscellaneous Total-
R.S.-1,000 R.S.-1,000 R.S.-5,000 R.S.-5,000 R.S. - 500 R.S.-1,500 R.S.-500 R.S.-500 15,000
Total Working Capital =R.S. 400000 Total Working Capital = (3months) R.S. 12, 00,000 1. It is assumed that cost of raw material will increased at rate of 10 % in the 2nd years and onwards. 2. It is assumed that revenue expenditures will increased at the rate of 7 % in the 2nd years and onwards.
INTEREST
INSTALLMENT
CLOSING BALANCE
40,06,800.00 3763200.00 3469200.00 3124800.00 2730000.00 2284800.00 1789200.00 1243200.00 646800.00 000
Years
W.D.V. of the Asset 33,25,000.00 29,26,000.00 25,74,880.00 22,65,894.00 19,93,986.72 17,54,708.31 15,44,139.31 13,58,842.59 11,95,781.48 10,52,287.70
Total(depre-ciable) Depreciation @ Amount 12% 33,25,000.00 29,26,000.00 25,74,880.00 22,65,894.00 19,93,986.72 17,54,708.31 15,44,139.31 13,58,842.59 11,95,781.48 10,52,287.70
1 2 3 4 5 6 7 8 9 10
Closing Balance of the Asset 3,99,000.00 29,26,000.00 3,51,120.00 3,08,985.00 2,71,907.00 25,74,880.00 22,65,894.00 19,93,986.72 17,54,708.31 15,44,139.31 13,58,842.59 11,95,781.48 10,52,287.70 9,26,013.17
1 2 3 4 5 6 7 8 9 10
Depreciation on Furniture
Years W.D.V. of the Asset
50,000.00 45,000.00 40,500.00 36,450.00 32,805.00 29,524.50 26,572.05 23,914.85 21,523.36 19,371.02
Total(depreciable) Amount
50,000.00 45,000.00 40,500.00 36,450.00 32,805.00 29,524.50 26,572.05 23,914.85 21,523.36 19,371.02
l 2 3 4 5 6 7 8 9 10
Total Depreciation
Years
1 2 3 4 5 6 7 8 9 10
value
5,25,000.00 5,05,020.00 4,11,045.00 3,63,761.00 3,21,947.00 2,84,966.73 2,52,258.27 2,23,326.51 1,97,732.64 1,75,089.49
In Thousands
525.00 505.02 411.04 363.76 321.94 284.96 252.25 223.32 197.73 175.08
Profitability Statement
Particulars
Revenue for the projected period (As per statement A) Less: Revenue Expenditures (As per statement B)
Yearl
6200.00
Year 2
6820.00
Year 3
7502.00
Year 4
8252.20
Year5
9077.42
4800.00
5136.00
5495.52
5880.20
6291.82
Profit before Interest, Depreciation & Income Tax Less: Bank loan Interest (statement "C") Depreciation (statement "D") Profit before Tax (PBT) Less: Income Tax (Existing Slab-Rates@S0%)
1400.00
1684.00
2006.48
2372.00
2785.60
504.00
453.60
403.20
352.80
302.40
525.00
505.02
411.04
363.76
321.94
371.00
725.38
1192.24
1655.44
2161.26
185.50
362.69
596.12
827.72
1080.63
Net Profit/(loss)
185.50
362.69
596.12
827.72
1080.63
CONTINUED..
Particulars
Revenue for the projected period (As per statement A) Less Ravenue Expenditures (As per statement B) Profit before Interest, Depreciation & Income Tax Less: Bank loan Interest (statement "C") Depreciation (statement "D") Profit before Tax (PBT) Less: Income Tax (Existing Stab-Rates@50%) Net Profit/(loss)
Year 6
9985.16
Year 7
10983.67
Year 8
12082.04
Year 9
13290.25
Year 10
14619.27
6732.24
7203.50
7707.75
8247.29
8824.60
3252.92
3780.17
4374.29
5042.96
5794.67
252.00
201.60
151.20
100.80
50.40
284.96
252.25
223.32
197.73
175.08
2715.96
3326.32
3999.77
4744.43
5569.19
1357.98
1663.16
1999.89
2372.22
2784.60
1357.98
1663.16
1999.89
2372.22
2784.60
Particulars
Opening balance of cash Net Profit as per Profitability Statement Add: Depreciation and Interest Add: Amount of Loan disbursement Add: Initial Own Contribution
Year1
Year 2
1617.30
Year 3
2041.41
Year 4
2454.57
Year 5
2901.65
185.50
362.69
596.12
827.72
1080.63
1029.00
958.62
814.24
716.56
624.34
4200.00
1800.00 Therefore, Cash Inflow Less:l.Bank Installment with Interest 2.Capital Expenditure (As per Statement of Capital Investment) 3.Drawings of Proprietor 4800.00 100.00 200.00 300.00 400.00 500.00 7214.50 697.20 2938.61 697.20 3451.77 697.20 3998.85 697.20 4606.62 697.20
1617.30
2041.41
2454.57
2901.65
3409.42
CONTINUED
Particulars
Opening balance of cash Net Profit as per Profitability Statement Add: Depreciation and Interest Add: Amount of Loan disbursement Add: Initial Own Contribution
Year 6
3409.42 1357.98
Year 7
4007.17 1663.16
Year 8
4726.99 1999.89
Year 9
5604.21 2372.22
Year 10
6677.76 2784.60
536.97 -
453.86 -
374.53 -
298.53 -
225.49 -
Therefore, Cash Inflow Less:l.Bank Installment with Interest 2.Capital Expenditure (As per Statement of Capital Investment) 3.Drawings of Proprietor
5304.37 697.20 -
6124.19 697.20 -
7101.41 697.20 -
8274.96 697.20 -
9687.85 697.20 -
600.00
700.00
800.00
900.00
1000.00
4007.17
4726.99
5604.21
6677.76
7990.65
Year 1
Year 2
Year 3
Year 4
Year 5
TOTAL
5892.30
5811.39
5813.50 5896.82
CONTINUED
6082.65
Particulars l.Liablities A. Proprietor's Contribution B.Net Profit C.Drawings Proprietor's Capital (A+B-C) Bank Loan TOTAL
Year 6
Year 7
Year 8
Year 9
Year 10
6395.43
6862.99
7516.99
8392.70
9530.50
2.Assets Fixed Assets Advances Deposit Current Assets (cash) 4007.17 4726.99 5604.21 6677.76 7990.65 2363.26 25.00 2111.00 25.00 1887.67 25.00 1689.94 25.00 1514.85 25.00
TOTAL
6395.43
6862.99
7516.99
8392.70
9530.50
Years
1 2 3 4 5 6 7 8 9 10
697.20 697.20 697.20 697.20 697.20 697.20 697.20 697.20 697.20 697.20
1.74 1.89 2.02 2.21 2.44 2.71 3.03 3.41 3.83 4.32
Total
DSCR
1
4.32 3.83 3.41 3.03 2.71 2.44 2.21 1.74 1.89 2.02
10
Profitability ratios: 1. Gross Profit Ratio =Sales-Cost of goods sold Sales 2. Net Profit Ratio=Before Interest & Tax x 100 Sales x 100
1 2 3 4 5 6 7 8 9 10
10%
10%
10%
10%
Years
Sales
6200.00 6820.00 7502.00 8252.20 9077.42 9985.16 10983.67 12082.04 13290.25 14619.27
NPBIT 1400.00 1684.00 2006.48 2372.00 2785.60 3252.92 3780.17 4374.29 5042.96 5794.67
N.P. Ratio 22.58 24.69 26.74 28.74 30.68 32.57 34.41 36.20 37.94 39.63
1 2 3 4 5 6 7 8 9 10
39.63 37.94 36.2 34.41 32.57 30.68 28.74 26.74 24.69 22.58
10
Turn Over Ratio 1. Total Asset Turnover Ratio = Sales Total Assets. 2. Fixed Asset Turnover Ratio =Sales Fixed Assets.
1.56
1.6
1.61
1.58
1.53
10
Years l 2 3 4 5 6 7 8 9 10
Fixed Assets 4250.00 3744.98 3333.93 2970.17 2648.23 2363.26 2111.00 1887.67 1689.94 1514.85
Sales 6200.00 6820.00 7502.00 8252.20 9077.42 9985.16 10983.67 12082.04 13290.25 14619.27
Times 1.46 1.82 2.25 2.77 3.42 4.22 5.20 6.40 7.86 9.65
8 7 5.2
9 8 6.4
10 9 7.86 10 9.65
1 Series2 Series3
1 1.46
2 1.82
3 2.25
4 2.77
5 3.42
6 4.22
OWNER S PROFILE NAME of the Chairman Date Address About the Chairman Mr. Vijay Kumar is a resident of Madhubani (Bihar) and completed his schooling from there and then his family shifted to Pune and he completed his graduation and post graduation from Pune University. Holds a Bachelor Degree in Agriculture and A Master Degree in Agricultural meterology from the college Merits scholarship and the university topper award for the subject of Agricultural. Extension during his graduation. He completed his post graduate diploma in cooperative business management currently he is working as a Chairman of RANJAN FLOUR PVT.LTD. Mr. Vijay Kurnar 11th October 1958 Shree apartment friend colony near M.G. Road. Pune. Maharashtra
Educational Qualification : Bachelor Degree in Agriculture. Master Degree in Agricultural meterology. Post graduate diploma in cooperative business management
Experience Details
Farm Corporation and currently number of the food and industry management of Maharashtra government.
MANAGERS PROFILE
: Mr. Arvind Kumar : 12th June 1978. : Shanti Nivas 103, opposite Bund Garden Pune, Maharashtra.
About The Director : He is a resident of Madhubani (Bihar) and completed his schooling from there and then his family shifted to Pune and he completed his graduation and post graduation from Pune University in the management fields. He had worked with and now he is working with RANJAN FLOUR PVT.LTD.
Educational Qualification
Experience details
: 10 year of working with Britannia. : 2 year of working with John deere. : 1990-awarded the best employee Award by Britannia.