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BUSINESS PLAN REPORT

ON

Le Anglique Chocolate Pvt Ltd.





In Partial fulfilment of Requirements for the degree of
MASTER OF BUSINESS ADMINISTRATION (MBA)
From
Jankidevi Bajaj Institute of Management Studies



Submitted by
Nitali Vatsaraj
Roll No: 39
Le
Anglique


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DECLARATION

I, hereby declare that the Project Report on Entrepreneurship and Small
business Management. is an original and bonafide work done by me during
the academic year 2014. This is being submitted in the practical fulfilment
of degree of Masters of Management Studies (MMS) as per the
requirement of the MMS course in Jankidevi Bajaj Institute of Management
studies, SNDT University.

The matter submitted in this report has not been submitted for the award of
any other degree or diploma.





Place: Mumbai
Date: 19th Oct, 2014
Signature:



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Table of Contents


Executive Summary ........................................................................................... 4
Business Description ........................................................................................5-6
Scope ...............................................................................................................7-11
Operational Plan ............................................................................................. 11
Production Plan .......................................................................................... 12-16
Marketing Plan ...........................................................................................17-20
Financial Plan ...............................................................................................20-21
HR Plan ..................................................................................................... 22-24
Financial Statements .................................................................................25-29


















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Le Anglique Chocolate Pvt Ltd.
I. Executive Summary:
We are starting a business of manufacturing chocolates. The primary focus is locally
manufacturing premium dark and milk chocolate, multigrain chocolate bar, liquid filled
chocolate bar. The target market is whole Maharashtra and premium chocolates are
exported outside the country. The customers to whom the products will be supplied are
retailers, wholesaler, trader in metro cities and local market. The location of the
manufacturing plant is MIDC, Andheri East, Mumbai.
The target audience being Children, teenagers and adolescents and the range of premium
chocolates are only for adults.

Anglique dark chocolates
Anglique milk chocolates
Anglique nutritious chocolate bar
Anglique premium liquid filled chocolate bar
The core competencies on which the company would be competing are taste, quality
and uniqueness of the chocolates. The company would be partnership firm. The
marketing, Finance and Operational plans are shown in further business plan.
The marketing of the product will be based on product strategy, price strategy, and
promotion strategy. We also stated that who will be the target market, which kind of
strategic position and risk assessment we have to done, what will be the marketing and
sales planning in future and the competitor analysis. These all areas we try to cover in
the business plan.
For the Financial plan the sources of capital, partners contribution in capital,
investment decision for future, break even analysis of the business for future, and what
would be the taxation policies are specified further.
Human Resource Planning includes points like, the organization structure, employment,
required man power and their salary/wage structure; also the recruitment policies are
involved.
Finally in technical terms in operations department we describe about the plant location,
details of the land requirement, plant layout, machineries used, and production capacity
of plant, the supply chain and quality control department.
At last but not the list this business plan is talk about all legal requirements like
licensing, environmental clearances, and necessary laws.








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II. Description of Business

The company would be located at,













The corporate office would be located in MIDC, Andheri East, Mumbai, Maharashtra.
From the next two years of firm establishment we have the branches in Maharashtra and
then in future we are planning to open the branches in cities like Delhi, Kolkata, and
Chennai.


The Company would be a partnership firm. Establishment of the firm includes three
owner partners having equal participation and involvement in to the firm named as,


Miss. Nitali Vatsaraj (Managing Director, Human Resource)
Mr. ABC: Chief Executive Officer (C.E.O)
Mrs. GEF: Chief Financial Officer (C.E.O)




Le Anglique Chocolate Pvt Ltd, E-70/32, MIDC,
Mumbai, Maharashtra.
PIN Code -400069

Contact number- 9869601572
Email ID leangelique@gmail.com



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We introduce the various ranges of chocolates including,
Anglique dark chocolates
Anglique milk chocolates
Anglique nutritious chocolate bar
Anglique premium liquid filled chocolate bar
In the range of dark chocolate only rich cocoa and the percentage of the cocoa is more
than other one. The research proves that dark chocolate is good for the heart patients.
The next type of chocolate that is milk chocolate contains more percentage of milk
which contain nutritious and more percentage of Lactose in it.
Nutritious bar is for those peoples who are more conscious about health and choosy.
This chocolate bar contains almond, walnut, cashew which make this bar more
nutritious, tasty and healthy.
Liquid filled chocolate bar this is the premium range of chocolate bar which we are tends
to export outside the country.
The brand name would be Le Anglique Chocolate Pvt Ltd.

THE VISION IS to be the leading chocolate brand at international level.

THE MISSION IS We seek to produce high quality chocolate products at
competitive price by modern technology to provide high satisfaction to the customer




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III. Scope:
3.1. Industry analysis and trend

Chocolate Industry in 2014 at a Glance
The chocolate industry offers a wide variety of opportunities for the small business
owner weathers economic recession well and is growing despite increased health-
consciousness and calorie counting. Growth will be driven by population growth as well
as expansion into new markets, product innovation and rising disposable income levels
leading to greater purchasing of premium offerings.
Chocolate is wildly popular for individual consumption, gift giving and celebrating. Due
to the dominance of large-scale production dynasties, franchises and small businesses
tend to focus on unique or specialty items or services. Unique chocolates may be from a
region famous for a particular technique, baked on-site or offer a different take on
tradition, while specialty services tend to focus on gift-packaging or delivery.

There are a number of trends within the chocolate industry that are driving growth; and
product innovation in 2011 brought a 16% increase in new product releases over 2010.
Increasing disposable incomes as well as changing public sentiments regarding health
and the global community are the driving forces behind this growth in innovation.
Premium and specialty items have shown strong growth over the long-term. During the
recession, there had been a shift away from premium items, but as the economy has
continued to recover, sales of premium items have taken the lead again. High-end
varieties can be baked on the premises, come from a renowned region or have a hidden
secret recipe. Seasonal and boxed assorted chocolates have been experiencing the fastest
growth, and sales are expected to expand 13% between 2012 and 2015. Holidays,
birthdays, retirement parties and more, chocolate is a versatile gift for many occasions.
Over the last several decades there has been increased understanding of what constitutes
a healthy diet, and there has been a dramatic increase in sales of sugar free, reduced fat
and reduced calorie offerings. Dark chocolate is known to lower both blood pressure and
cholesterol, and has nearly 8 times the number of antioxidants as found in strawberries.
A recent survey found that 35% of respondents believe dark chocolate to be healthier,
and it shows: sales grew 9% in 2009 versus 3.6% for the chocolate industry as a whole.
Fair-trade certified chocolate is another fast growing segment of the market, where
consumers pay a premium to ensure goods are produced in an ethical manner. As the
global community grows smaller with the communication revolution, it becomes
glaringly obvious that goods produced in developing countries are often subject to
horrible lab the conditions are controlled by dominant industry participants. Fair Trade is
a social movement aimed to promote sustainability in developing countries, and
generally requires a higher price but conforms to higher social and environmental
standards.
There are a wide variety of chocolate industry opportunities available for the franchisee,
based on location, clientele, and affluence. Franchises exist in storefront or online
variety and for shipping or hand delivery; specialty stores provide high-end treats and
bulk candy stores offer large quantities of varying quality!


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Gift-Giving Like flower shops, these businesses often focus on
themed chocolates and delivery
Bulk Candy Offering a wide assortment of candies of all types
(including non-chocolate), these stores often charge
by the pound...or half pound!
Premium or
Unique
High-end, specialty items, imports from areas with
historical processes
On-Site
Baking
That smell....advertising in the air!
Ethical Free trade or other, quality products produced
process and delivered in a certifiably ethical and/or
environmental manner.

The chocolate industry has proven both resilient during the recession and innovative to
meet changing consumer tastes and criteria. Growth will remain strong as chocolate
gains in popularity in new markets and the global economy powers ahead. Healthier
varieties are gaining market share and discerning consumers are willing to pay a
premium for ethical production, but through it all, chocolate demand continues to grow.

THE CHOCOLATE INDUSTRY IN INDIA
The chocolate industry in India has a size of 20000 tones and is worth about Rs
400crores. The chocolate market has been growing by nearly 35 %. However there has
been some slowdown in the last two years. The chocolate market is predominantly urban
with coverage of 95 %. The sales volume has decreased by 5% in the last year and the
chocolate market had declined with the average consumption coming down by 25% from
16000 tonnes to the current level of125000 tonnes. Chocolate consumption in India is
extremely low. Per capita consumption is around160gms in the urban areas, compared to
8-10kg in the developed countries. In rural areas, it is even lower. Chocolates in India
are consumed as indulgence and not as a snack food. A strong volume growth was
witnessed in the early 90s when Cadbury repositioned chocolates from children to adult
consumption. The biggest opportunity is likely to stem from increasing the consumer
base. Leading players like Cadbury and Nestle have been attempting to do this by value
for money offerings, which are affordable to the masses. Cadbury, a subsidiary of
Cadbury Schweppes is a dominating player in the Indian chocolate market with strong
brands like Dairy Milk, Five Star, Perk, and Gems etc. Dairy milk is the largest
chocolate brand in India.







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Size of the chocolate industry:-

The Indian Chocolate Industry has come a long way since long years. Ever since 1947
the Cadbury is in India, Cadbury chocolates have ruled the hearts of Indians with their
fabulous taste.
The size of the market for chocolates in India was estimated at 30,000 tonnes in 2008.
Currently, the Indian chocolate market is worth around 4,500 crore. The Indian
chocolate industry is registering a compound annual growth rate of 25 per cent at
present. The demand for chocolates in India has clocked about 35% rise as against last
year primarily in urban areas due to the rising shift to chocolates from traditional mithai
around the festival season. Bars of moulded chocolates like Amul, milk chocolate, dairy
milk, truffle, nestle premium, and nestle milky bar comprise the largest segment,
accounting for 37% of the total market in terms of volume. The chocolate market in
India has a production volume of 30,800 tonnes. The chocolate segment is characterized
by high volumes, huge expenses on advertising, low margins, and price sensitivity. The
count segment is the next biggest segment, accounting for 30% of the total chocolate
market. The count segment has been growing at a faster pace during the last three years
driven by growth in perk and Kit-Kat volumes. Wafer chocolates such as Kit-Kat and
perk also belong to this segment. Panned chocolates accounts for 10% of the total
market. The chocolate market today is primarily dominated by Cadbury and Nestle,
together accounting for 90% of the market.
Growth:
The consumption is impulse led and driven largely by convenient price point. As
economic growth creates more disposable income with more people the consumption is
expected to increase. The Indian chocolate industry may surpass the 7,500 crore mark
by 2015 with the help of growing consumption in the urban and semi-urban areas,
according to the industry chamber Associated Chambers of Commerce and Industry of
India (ASSOCHAM).
Vulnerability:
To overcome the barrier and to explore new area for the market we are not start up with
huge amount of infrastructure, costs the machinery would be taken for lease for first few
years of business. Marketing of the products would be on the basis good quality and
healthy products to provide a competitive advantage. We also introduce new ranges of
chocolates in the company with the help of research and development department
probably in next two years of the establishment of firm.
Promotion of the product will be within a nation and outside a nation; because there is
high competition at international market to overcome the treat of promoting the brand at
international level we will use the outsourcing and overcome that barrier.
Seasonal Factors:
We produce a seasonal line of chocolates which changes each year for season and each
major holiday, thereby making the packaging collectable. The Premium range of
chocolate also have new flavours introduced primarily for major holidays and festivals
like Diwali, Rakshabandhan, Valentines day, Christmas. We can introduce the new
range of chocolates in stated holidays and festivals with fancy art packaging and
according to demand of the customers.


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Technical Factors:
Chocolate-lovers may soon find their chocolate dearer if the problems plaguing the
industry continue. Raw material costs have risen by more than 20 % in the last few
years. Although retail prices have not increased, a rise in input costs will force the
manufacturers to consider a price hike. The Bigger players in the country such as
Cadbury, which leads the 2,500 crore chocolate markets in India with a share of 72%,
will find it easier to absorb the surge in input costs as it has products at various price
points in the market, said industry experts. Cadbury may also opt for a price hike, albeit
marginal, if the current trend continues. The Indian Chocolate Industrys current Margin
range between 10 and 20%, depending on the price point at which the product is placed.
The input costs in India are under check owing to the 24% decline in the prices of sugar.

Supply and Distribution:
Chocolate needs to be distributed directly, unlike other FMCG products like soaps and
detergents, which can be sold through a wholesale network. 90% of chocolate products
are sold directly to retailers.
Distribution, in the case of chocolates, is a major deterrent to new entrants as the product
has to be kept cool in summer and also has to be adapted to suit local tropical conditions.
Channels of distribution:














Manufacturer
Retailers
Grocery/ Kirana stores
Medical stores
Gift Shops
Sweet marts/Mithai Shops
Supermarkets
Airport shops/Railway stations/Bus stands
Paan shops

Stockiest /C&F Agent
-Company owned

Wholesaler
Wholesaler


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Financial Consideration:

After economic liberalization in 1991, major changes have occurred in food habits,
partly on account of rise in gross domestic product (GDP) growth and higher purchasing
power in the hands of the middle-class representing a third of the total population.
Availability of chocolate products has also exploded. A study had projected that sales of
the Indian chocolate industry would rise from $125/$130million in 1998 to $175/$180
million by the year 2000 and to $450 million by the year 2005which actually happened
irrespective of various negative factors. By this we can see rising demand of the
chocolate product in Indian market.

Anticipated (expected) Changes:

1. To help chocolate industry consultants, chocolate manufacturers and dealers to align
their market-centric strategies.

2. To obtain research based business decision and add weight to presentations and
marketing materials.

3. To gain competitive knowledge of leading players.

4. To avail 10% customization in the report without any extra charges and get the
research data or trends added in the report as per the buyer's specific needs.

IV. Operational Plan

Plant Location
The manufacturing unit will be located at E-70/32, MIDC, Andheri-East, Mumbai-
400069.

Details of Land
Requirement
The land required for the
Chocolate manufacturing
company is 5,500 sq.ft. it
is on rental basis and the
rent would be 35,000
Rs./month.




Plant Layout



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V. Production

Details of machinery and sources of machineries
The product will be manufactured by Full Automatic Chocolate Production Line
(QH200), with this system, baking the moulds, depositing, forming etc. series procedure
can be achieved automatically. It's available to depositing all shape of chocolate. Such as
liquid filled-inside, nuts, grains etc. chocolate. Since the products are plain as well as
nutritional grains are added this machine is appropriate.
The machines are supplied by,














MANUFACTURING PROCESS

Ingredients Required
Pure chocolate comes from Cocoa beans. A typical chocolate bar will also have:
Sugar,
Milk (if it's milk chocolate, not if it's dark),
Cocoa Butter,
Lecithin,
Flavourings (like vanilla),
Sometimes, Vegetable Oil

Additional Ingredients:
Sugar
Cocoa Butter
Chocolate City, Fort, Mumbai.
Phone: 022 - 23459349
Mobile: 9323877672
Contact Person: Abdulm Aziz Ansai
Area: Fort

Email: chocolate-city4u2@yahoo.com
Address: No. 4, Shop No. 254, Line Inside, Crawford
Market, Fort, Mumbai - 400001
Landmark: Near Marine Lines
Working Hthes: Monday - Sunday: 10 AM - 7 PM


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Cocoa Solids
Peanuts
Milk Solids
Chocolate coated Raisins
Almonds
Vanillin
Honey
Boston Baked Beans

Hundreds of pounds of fermented and dried cacao beans bundled in burlap sacks arrive
at factories around the world every day, ready to be turned into fine bars and cocoa
powder. Over a period of about one to three days, the bean is transformed from tropical
seed into treasured chocolate.

Roasting After being cleaned, the cacao beans pass to the first critical step in flavour
development at the factory: roasting. There are two main approaches to roasting: roast
the beans for a short time at high heat, which produces a strong chocolate flavour but
eliminates any subtle, floral notes and risks the development of charred flavours from
over-roasting, or roast the beans for a long time at low heat, which allows the more
delicate flavours to come through but sacrifices the big, chocolate flavour.

Winnowing Getting Rid of the Shells After roasting, the beans are put through a
winnowing machine which removes the outer husks or shells, leaving behind the roasted
beans, now called nibs.

Milling Making Cocoa Liquor the nibs are then ground into a thick liquid called
chocolate liquor, which essentially is cocoa solids suspended in cocoa butter. Despite its
name, chocolate liquor contains no alcohol.

Pressing Cocoa Powder and Cocoa Butter. The processing now goes in a couple of
different directions. Some batches of chocolate liquor are pressed to extract the cocoa
butter, which leaves a solid mass behind that is pulverized into cocoa powder. The
remaining cocoa butter is reserved to help in chocolate-making. Other batches of
chocolate liquor are used directly to make chocolate.

The Beginnings of Chocolate To make dark chocolate, chocolate liquor, sugar and
other minor ingredients such as vanilla are mixed together and kneaded until well
blended. To make milk chocolate, milk and sugar are mixed together and then blended
with chocolate liquor. This sweet combination of ingredients is stirred until the flavours
are thoroughly combined.


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Refining Smoothing It All Out After being mixed, both dark and milk chocolates go
through the same process. The mixture travels through a series of heavy rollers which
press the ingredients until the mixture is refined to a dry flake. Additional cocoa butter
and a small amount of emulsifying agent are added to the flake and then mixed to make
a smooth paste ready for Conching.

Conching Kneading for Exquisite Flavour Conching further develops flavour by
putting chocolate through a kneading process. The conches, as the machines are known,
have heavy rollers that plow back and forth through the chocolate mass anywhere from a
few hours to up to seven days.

Tempering Temperature Magic for a Perfect Product The mixture is then tempered, or
passed through a heating, cooling and reheating process. Tempering allows you to
solidify chocolate in a way that keeps it glossy, causes it to break with a distinctive snap
and allows it to melt smoothly in your mouth.

Moulding the mixture is then poured into moulds and cooled in a cooling chamber.

Finally Something We Can Eat! Once cooled, the chocolate is de-moulded, packaged
for distribution and is ready for savouring.

The machineries which we have selected can produce 100-300 kg chocolates per hour. It
can produce chocolates in different shapes .It can help to reduce cost of chocolates
mould. By Producing Chocolates in different shapes we can attract all segments of
market.
The production capacity is fully automated as mentioned as follows, so the need of
personnel is comparative less than other semi-automatic machine. The detail description
of the machineries is as follows,

1. Chocolate Production Line:



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This machine Model NO.:QJZ-II especial for chocolate pouring and depositing including
mechanism, electrical controlling. The production flow including mould heating,
pouring, vibration, cooling, discharge, convey and so on with automatic operation. Suit
for producing pure chocolate, centre filled chocolate, double colour chocolate. Granule
mixing pouring chocolate, smoothly surface, weighing correctly is a good machine for
producing high quality chocolate. The capacity of the machine is producing 200kg per
day.
2. High-Speed Automatic Pillow Packing Machine:

Full-automatic packager is applicable for packing oblong, Quadrate, round, oval and
shaped candies. It functions rapid computer programming and photoelectric tracing,
frequency control for stable and free running, reversible outsize candy sorting disc
enables empty package rate to get optimal effect, excellent performance, simple
operation and high-speed package of the whole machine.
The packaging speed (granule /m) 800
The dimensions (length-width-height) 300013501450mm

Production capacity of the plant
The production capacity of the plant would be necessary to get the cost of equipment (bean
cleaner, roaster, cracker, grinder, refiner/conch - not including
(tempering/depositing/moulding/wrapping) down to 400 kg/day in order to really jumpstart
the growth of the small batch craft chocolate "industry" here in the India. Furthermore, we
think that at that price point it will be necessary to produce at least 1 ton per month of
finished chocolate in order to be able to break even.

Capacity utilization
The maximum production capacity of the plant would be 400 kg/day and we will try to
utilize optimize resources and the capacity of utilization is 300 kg/day.





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VI. Marketing Plan

A. Product Strategy:
India has more than 50% of its population below the age of 25 and more than 65% below
the age of 35.
Age Structure: -
Group- I 0-18 years: 38 % (0.48 billion)
Group-II 19-35 years: 27 % (0.34 billion)
Group-III 36-65 years: 30 % (0.38 billion)
Group-IV 66 above: 5.3% (0.06 billion)
We have made separate plan for separate age groups.
We will be targeting the first three groups covering 94.7 % of population.
The strategy is purely penetration into Indian chocolate market.
We would like to target the population with the same products. No new product.
In the marketing plan we have suggested collaboration with many institutions&
organization's. We are also outsourcing to prepare marketing plan for college students.

Marketing Plan for Age group 0 to 18
Total Population: 0.483 billion
Studying in school: 0.241 billion
We have traditions of distributing sweets to all school students after Flag hosting on 15th
August (Independence Day) & 26th January (Republic day).
We can tie up with the schools as a distribution chain. In future this can be extended to
Birthdays & Children's day.
Anglique has more nutritional value for children's than any other sweet. That we can
say because we added grain granules in the nutritious bar which childrens prefer not to
eat as whole.

Marketing Plan for Age group 19 to 35
Total Population: 0.343 billion
Best way to catch this population on internet (on Facebook or any other social website).
Most people wishes birthday to their friends & family member on Facebook.
We propose the company tie up with Facebook, So one week before birthday Facebook
will give the reminder.
Do you want to send chocolates on your friends birthday?
All the Cadbury chocolates options will appear.


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Select the Chocolate, Gift wrapping & Birthday message for your friend & place the
order online. The order will be received in district distributor system; same will be
packed & dispatched by Courier at the delivery address.

Marketing Plan for Age group 36 to 65
Total Population: 0.381 billion
This is majorly working population of India.
This population can be targeted on Birthday at office, for Gifting, on marriages (with
Marriage invitation card & after marriage), on festivals, special occasions & many more
occasions.

Indian Chocolate Industry is a unique mix with extreme consumption patterns, attitudes,
beliefs, income level and spending
Understanding the consumer demands and maintaining the quality will be essential
So we think that bringing online sales (through Facebook) & increasing the institutional
sales (in unique way) would bring prosperity and increase the sales of Anglique as a
whole again resulting in the goodwill of the company.

B. Price Strategy
Products & Segments Angliques Segments Product Pack size Rate Value
Anglique 9.2 Gram Rs. 5 Value
Anglique Shots 18.6 Gram Rs. 10 Value
Anglique17 Gram Rs. 10 Value
Anglique 38 Gram Rs. 22 Mid-Tier
Anglique Crackle 42 Gram Rs. 35 Mid-Tier
Anglique Roast Almond 42 Gram Rs. 35 Mid-Tier
Anglique Fruit & Nut 42 Gram Rs. 35 Premium
Anglique Silk 60 Gram Rs. 55 Premium
Anglique Silk Fruit & Nut 60 Gram Rs. 55 Premium
Anglique Alcoholic Chocolate 100 Gram Rs. 955 Super Premium
Anglique Silk 145 Gram Rs. 125 Super Premium
Anglique Silk Fruit & Nut 145 Gram Rs. 125 Super Premium
Anglique Orange Peel 145 Gram Rs. 125






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C. Promotion Strategy

After settlement of the business we will use following techniques for promotional
strategy,
Local news paper
Local TV channel
Local radio Station
Hoardings in crowded areas
Through pages and account on Social Networking Sites (Facebook & Twitter)
We can also use mouth to mouth promotion strategy.

D) Target Market
The target market will be divided into three parts that are,
Upper class
Middle class
Lower middle class
That mean all age groups are the target market and we will try to cover them all by
fulfilment of their requirements and demands.

E) Strategic Position & Risk Assessment
Marketing strategy for niche market
Niche "The niche market would be the children and young generation as chocolate is
mostly liked by children and youngsters."
Attractive packing: The Company will focus on packaging to attract children.
Good quality and healthy chocolates are the factors on which marketing will be done.

F) Company Strength
The core competencies on which the company will compete are:
Taste
By consuming the Anglique Chocolates flavour begins to fill your mouth the moment
the chocolate begins to melt on your tongue it feel like a rich dark or milk chocolate and
it tastes like pure chocolate rather than cocoa powder. At first there is so much pleasure
in tasting the chocolate, it may be difficult to focus on the specifics of flavour. First
perception the consumer would describe for the chocolate as chocolaty and Yummy.
Quality
The raw ingredients are of finest quality and also care is taken of the production process;
roasting and crushing the cocoa beans and mixing the cocoa paste with sugar and other
ingredients such as milk. Yummy chocolates are high quality chocolates as they are
shiny brown, break cleanly and are smooth. A yummy chocolate has the sufficient


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quantities of cocoa butter and vegetable fat so that it does not become greasy or sticky at
ambient room temperature.
G) Competitor Analysis
G:1) Competitor Analysis
COMPANY FOUNDED IN BRAND PORTFOLIO
(confectionery products)
Nestle 1860s Kit Kat, Smarties, Wonka
Ferrero 1940s Rocher, Raffaello, Kinder, Tic Tac, Mon
Cheri, Nutella
Mars 1911 Bounty, Galaxy, Mars, Snickers, Milky
Way, Wrigleys, M&Ms etc
Amul 1945 Milk chocolate, Fruit & Nut chocolate
Hersheys 1894 Hersheys milk chocolate, Kisses, Pot of
gold, Milk duds, Reeses, Icebreakers etc
Perfetti Van
Melle
2001, when
Perfetti and Van
melle merged
Alpenliebe, Chlormint, Centre fresh,
Happy dent, Mentos
ITC 2002(confectionery
segment)
Minto and Candyman
Parle 1929 Melody, mango bite, poppins, kismi
toffee, mazelo, xhale, clair, golgappa,
parlelites, orange candy
Cadbury 1948 (Indian
Market)
Dairy Milk, Dairy Milk fruit N nut,
Dairy Milk Shots, Dairy Milk Roasted
Almond, Dairy Milk Silk


G:5) Barriers to Entry
Barriers to entry
Huge start-up costs
Ensuring good quality products to the customers
High Level of competition from the well established brands
To keep price of the product low, as it is a price sensitive market

Overcoming the barriers to entry
To overcome the barrier of huge start-up costs the machinery would be taken for lease for
first few years of business.


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Marketing of the products would be on the basis good quality and healthy products to provide
a competitive advantage.


Distribution channels
The products would be distributed through channels like wholesalers, retailers and the
own sales force and the distribution channel shown in previous pages.

Proposed Location
For the business, the proposed location would be in MIDC, Andheri-East, Mumbai,
Maharashtra.


VII. Financial Plan

Financial Management is an operational activity of business i.e., responsibility for
obtaining the fund & effective utilizing the fund for effective operation that is called
financial management.

Objectives of Financial Management
Acquiring sufficient fund
Proper utilization of fund
Increasing profitability
Maximize the firms value

1. Raising of Capital:
2. Owned Fund :
Contribution of partners in Capital
Funds rose for the requirement of Large Capital investment by the Own by using
investment by the three partners as below.
Miss Nitali Vatsaraj - 12,00,000.00/-
Mr. ABC - 8,00,000.00/-
Mrs. GEF - 12,00,000.00/-

Borrowed Funds

We also raise fund by using borrowed fund from IDBI Bank and from by using the
Project Finance & Export Finance it is not sufficient fund for the establishment of
organization and we took Hand Loan from friends and relatives.
Bank IDBI Ltd.
IDBI bank is the development bank who provides loan to Industries development
purpose and they Create segment by using the type of industry like SME. MSME, Large
Industries etc.,
Loan provided under Industrial Finance and the schemes (Export Oriented Unit and
MSME)




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Sr.
No.
Party Name Amount Interest
Rate
Tenure
(in Month)
1 IDBI Ltd. (Secured Loan)
Export Finance (Rate certain
to fluctuated EXIM Policy)
3,000,000.00 11.00% 06 Months
(Max. 364 Days)
Term Finance 5,000,000.00 13.00% 48 Months
2 Hand Loan* (Unsecured
Loan)

1,650,000.00
- -
3 Owned Fund
3,200,000.00
- -
Total Fund 12,850,000.00

*Hand Loan Advance from customers taken from friends and relatives and suppliers.
We make them channel partners (Distributors) and export partners and bank assurance.


Getting subsidies, concessions by government

a) Foreign Trade Policy: According to Foreign Trade Policy for 2009-14 it includes
extension of zero duty
b) Exemption : Exemption from custom duty on import of capital goods raw
materials, consumable, spares etc.,
c) *Goods Manufacturing in SEZ are excluded excisable goods As per SEC. 3(1)
of Central Excise Act 1944. (It is no duty liveable)
d) Reimbursement of Central Sales Tax paid on domestic purchase.
e) Supplies from DTA to SEZ units treated as deemed to be export
f) Facilities to realise and repatriate export proceeds with in 12 month
g) Commodity hedging by SEZ unit permitted
h) No Separate documentation required for custom and EXIM policy.
i) Exemption on Stamp Duty.
Taxation
a) Partnership Deed As per Indian Partnership Act 1932.
b) Minimum alternate Tax: not applicable for domestic export
c) Registration of Central Excise
Market
Analysis
Potential
Market
Market
Share
Technical
Analysis
Technical
Viability
Sensible
Choice
Financial
Analysis
Risk
Return
Economic
Impact
Benefits &
Cost
Other
Impact


22

d) Registration of Sales Tax
e) Registration of The Income Tax Act 1961 (PAN No.)


VIII. Human Resource:
Organization structure (as per PVT LTD Structure)




Miss. Nitali
Vatsaraj
(MD)
Mr. ABC

(C EO)
Mrs. GEF

(C FO)


23


Total number of employees required at different levels:

Total numbers of skilled plus semi-skilled employees required in the establishment
would be 20 people. Who has knowledge, skill and ability to handle and supervise
technical work as well as helps in marketing. The person should handle the critical
situations and solve the problem on that level or to report to the immediate senior officer.
There is not more than 9-10 unskilled workers required on the field, because the
machineries are fully automated and there is less work to do manually on the production
line. Also the unskilled workers are to be trained to handle all machineries to avoid
defects and improve quality of the product.

Sources of recruitment-
The type of the recruitment here to be followed is external.
Because would be newly established firm and internal recruitment is not possible. So
that there are some ways to recruit people as per requirement of the organization,
AdvertisingAdvertising in newspapers and periodicals. The company needing
manpower advertises details about the job, requirements, salary perquisites, duties and
responsibilities etc. It will give appropriate candidate for the senior post.
Employment Agencies we can give the numbers of required man power to the
agencies or the consultancies to find the right candidate for the position.
Gate Hiring-For the sake of providing employment to the unskilled workers this method
can be used. This involved blue collar workers or daily wages workers.
Educational Institution direct recruitment from colleges and universities is prevalent
for the recruitment to higher staff. This can be beneficial to hunt new and fresh talent.
Leasing In seasonal production contract workers could be hire to adjust short term
fluctuations in personnel needs, the possibilities of leasing personnel for some specified
period may be considered.
Labour Contractors we can also recruited workers through contractors who are
themselves the employees of this organisation.








24


Salary of workers & employees: (Cost on HR estimation and its assessment w.r.t.
return is to be done)

The pay given to the skilled persons are on the basis of their level and for the position.
So we pay the semi-skilled as well as skilled employees 8,000 to 10,000 per month
salary respectively.
According to The Minimum Wages Act, 1948 the recent basic wage must be 6,500 Rs.
And we offered 7,000 Rs. Per person to the workers. We will place contract based
labours and we will make changes in the pay structure as per changes made by central or
state government.




25

PART 2: FINANCIA STATEMENTS

Sr.
No.
Party Name Amount Interest
Rate
Tenure
(in Month)
1 IDBI Ltd. (Secured Loan)
Export Finance (Rate certain
to fluctuated EXIM Policy)
3,000,000.00 11.00% 06 Months
(Max. 364 Days)
Term Finance 5,000,000.00 13.00% 48 Months
2 Hand Loan* (Unsecured
Loan)

1,650,000.00
- -
3 Owned Fund
3,200,000.00
- -
Total Fund 12,850,000.00
Working capital decisions (use of funds)
A business will incurs expenditure in undertaking production before recovering this-plus,
it will hope a surplus representing profit in sales revenue. Overhead expenses also have
to paid working capital is the finance available to a business to meet its day to operational
costs in pursuit of profitable activity
There are three working capital issue on a business would to need to make a decision
Whether to offer discounts to debtors for prompt settlement of accounts
Whether to dispose of slow moving stock at reduced prices, and by how much to
reduce them.
Whether to purchase by cash or credit, allowing for discount which might be on
offer.

Cash & Credit:
We provide discount and cash credit to the supplier. By giving them 2% discount on
the advance bill amount from suppliers in form of RTGS and 1 % discount on the date of
delivery we offer 30 day as the credit period to local supplier. And the term for foreign
customer the cash credit decision on the hand of export partners, and bank assurance.

Investment Decisions (Fund flow / Cash flow)
Investment decision related to the careful selection of asset in which fund will be
invested by the firm. Investment decision can be long term or short term.

Purpose: The purpose of investment decision is to investment is to invest financial
resources for setting up new business or expansion an existing business.

The following two type of decision are taken:
Capital budgeting decision i.e., how much amount to invest in long term asset.
Working capital decision i.e., how much amount invest in short term asset.

Capital Budgeting:

Capital budgeting is the technique of making decision for investment in long term
proposals. It is a process of deciding whether or not to invest the funds in a particular
proposal, the benefit of which will be available over a period of time longer than one
year.



26

Type of Capital Investments


Project Analysis:
If the project preliminary screening suggests that the business is suitable, a detailed analysis
of the project is done.

Break even analysis
Break even analysis is an important technique to trace the relationship between
cost, revenue and profit at the varying levels of output or sales.
In the break even analysis the break-even point is located at the level or output or sales at
which the net income or profit is zero. At this point, a total cost is equal to total revenue.
Hence the break-even point is the no-profit-no-loss zone.
Formula:

Break Even Point = Fixed Cost/Sales -Variable Cost*100
= 3757800/21539743-955260*100
= 0.18*100
= 18%

In Amount = 1591839*18/100
= 286531

Profitability Ratios-

Net Profit:
Net profit ratio is a popular profitability ratio that shows relationship between net
profit after tax and sales. It computed by dividing the net profit after tax by net sales.

Net Profit Ratio =
Net Profit after Tax/Net Sales*100

= 1591839/21539743*100
= 7.39%


ROI = Profit after Tax/Investment*100
= 1591839/12850000*100
= 12.39%

Type of Capital
Investment
Capital Investment in
Physical Assets
Rs 11,585,120.00)
Land , Building, Machinery,
Vehicle, Computer
Capital investment in
monetory Assets
(Rs. 1,150,000.00)
Cash, Bank.

Capital investment in Intangible
Assets (Rs. 127,200.00)
R&D, T&D,
MKT Development


27

Estimated Cost sheet of Le Anglique Chocolates Pvt. Ltd.
Total Output: 450000

Total Output = 4,50,000
units Particulars
Cost Per Unit Total Cost
Raw material
Sugar = 3,00,000
Cocoa Butter= 3,00,000
Cocoa Solids = 3,20,000
Peanuts = 2,00,000
Milk Solids = 2,00,000
Chocolate Coated
Rasins= 4,00,000
Almonds= 3,00,000
Vanillin= 1,00,000
Honey= 50,000
Boston Baked Bean=
1,50,000
5.16 23,20,000
Direct Labour= 7,00,000 1.56 7,00,000
Carriage on Material=
2,42,500
0.53 2,42,500
Prime Cost:-
7.25 32,62,500
Factory expenses:-
Fixed
Depreciation on Plant
and Machinery= 400,000
Power and Consumable
Stores= 2,50,000
Factory Insurance=
1,50,000
Supervisors Salary=
50,000
Variable
Electricity Charges=
50,000
1.77 800000
Power and Consumable Stores= 1,00,000
Running Expenses of Machine= 1,50,000
Factory Cost:- 9.02 40,62,500


28

Office and
Administration
Expenses
Office staff salary=
10,00,000
Rent= 80,000
Computer= 1,20,000
Furniture= 3,00,000
Telephone= 10,000
Carriage outward=
20,000
Depreciation on
furniture= 50,000
Salaries to administrative
staff= 3,70,000
Rent, rates, and taxes=
30,000
4.40 19,80,000
Office and
Administration
Cost:-
13.42 60,42,500
Selling &
Distribution
Expenses
Advertisement (Print and
by local T.V. channels)=
4,00,000
Petrol= 1,00,000
Delivery vehicles=
2,50,200
Maintenance of delivery
vehicles= 49,800
Packing rates= 50,000
Bad Debts written off=
1,00,000
2.00 9,00,000
Total cost 15.42 69,45,200
Net Profit (15% on
selling price)
4.00 18,00,000
Sales 19.42 87,45,200




29

Total Cost of Production
Cost of Raw Material 2320000
Depreciation on Plant and Machinery 4,00,000
Power and Consumable Stores 2,50,000
Factory Insurance 1,50,000
Supervisors Salary 50,000
Office and Admin expenses 19,80,000
Total 5150000

Total Recurring expenses

Cost of Raw Material 2320000
Depreciation on Plant and Machinery 4,00,000
Total 2720000




30



Thank
You