PROJECT REPORT

Of

PAPER NAPKIN

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Paper Napkin Manufacturing Unit.

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in project
identification for investment and in order to serve his objective; the document covers various aspects
of the project concept development, start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can also prepare
project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak Building ,

27/1/B, Gokhlley Marg, Lucknow-226001

Delhi Office : Multi Disciplinary Training

Centre, Gandhi Darshan Rajghat,
New Delhi 110002

Email : [email protected]
Contact : +91 7526000333, 444, 555
 Paper Napkin Manufacturing

Paper Napki e

1. Introduction
Paper napkin is a small piece of tissue paper used for hand or face cleaning. These are
becoming popular with the catering industry due to manifold usages. Now a days they
are being more and more used in households, institutions etc. These are absorbent,
hygienic, light and can be had with attractive printing.

2. Market Demand
Urbanization has made a profound impact on our dining habits. One of the notable
change is the increased use of paper napkins now a days, which was otherwise could
be seen only in western countries. Plain paper napkins are now being widely used in
restaurants, households, vehicles, industries, institutions etc. Paper napkins with
colorful layout and attractive designs are having bright prospects with our restaurants
focusing on tidiness and adornment.
PROCESS FLOW CHART:

Selection of Raw
Material

Loading of Jumbo
Roll on Machine

Flexo Printing

Embossing on
Plain Napkin

Folding

Cutting

Counting

Bunch of Napkins
for Easy Packing

B.O.P Packaging(of
50pcs & 100 pcs)

Carton Packaging

Dispatch of Goods
Basic Information about the project:

1. The space required for setting up a manufacturing unit of Paper Napkin requires a

minimum area of 600‐700 sq.ft(for single machine)

2. There are five types of general width that are available in such machines. The sizes

are 22cm, 27cm, 30cm, 33cm & 40cm (or customized as per customer requirement).

3. Minimum number of Skilled and Unskilled labor required of operation of Machinery

are 1 operator & 2 helper on single machine.

4. Raw Materials come in the form of Jumbo roll of 80‐90 kg each. Available raw

materials in the market are soft & hard with 1 ply or 2 ply.

5. Not Much civil work is required to start the napkin manufacturing business.

6. The Minimum electricity load of 3.5 kw is required for the unit.

7. Basic Statutory registrations required for setting up the manufacturing unit includes

Goods & Service Tax registration, Udyog aadhar Registration.

 NAME OF COMPANY

XXXX
NATURE OF ORGANIZATION

XXXX
MANAGEMENT

XXXX
REGISTERED OFFICE

XXXX
FINANCIAL ASSISTANCE REQUIRED

Term loan of Rs. 8.00 lacs and Working Capital limit of Rs. 5.00 lacs

Particulars Amount Margin Finance

Land Owned/Rented
Building & Civil work 3.00 1.20 1.80
Plant & Machinery 7.08 1.77 5.31
Other Assets(equipments & fixtures) 1.25 0.36 0.89
Working Capital Margin 1.50 1.50 ‐
Grand Total 12.83 4.83 8.00

SOURCES OF FUND

PARTICULARS TOTAL

Capital/Internal Accrual 4.83

Term Loan 8.00

Grand Total 12.83

PROJECTED BALANCE SHEET

PARTICULARS I II III IV V
Proj Proj Proj Proj Proj

SOURCES OF FUND

Capital A/c
Opening Balance - 6.99 9.18 11.69 14.45
Add: Addition 4.83 - - -
Add: Net Profit after tax 3.66 4.19 5.01 5.77 6.50
Less : Drawings 1.50 2.00 2.50 3.00 3.50
6.99 9.18 11.69 14.45 17.45

Term Loan 7.10 5.30 3.50 1.70 -

Current Liabilities

Working Capital Limit 5.00 5.00 5.00 5.00 5.00

Sundry Creditors 3.50 3.80 4.92 6.75 8.00
Other Current Liabilities 1.00 1.10 1.21 1.33 1.46

TOTAL : 23.59 24.38 26.32 29.23 31.91

APPLICATION OF FUND

Fixed Assets ( Gross) 11.77 11.77 11.77 11.77 11.77

Gross Dep. 1.61 2.99 4.18 5.21 6.09
Net Fixed Assets 10.16 8.78 7.59 6.56 5.68

Stock 5.42 8.02 10.52 14.00 17.35

Sundry Debtors 3.57 3.92 3.66 3.96 4.26
Cash and Bank 4.45 3.67 4.55 4.71 4.62

TOTAL : 23.59 24.38 26.32 29.23 31.92

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS I II III IV V
Proj Proj Proj Proj Proj

Production Capacity 50% 55% 60% 65% 70%

SALES
Revenue from Operations 51.00 56.00 61.00 66.00 71.00

Total (A) 51.00 56.00 61.00 66.00 71.00

Raw Material Purchase 35.00 38.00 41.00 45.00 48.00

Salary & Wages 3.00 3.30 3.63 3.99 4.39
Power 2.50 2.75 3.03 3.33 3.66
Other Direct Expenses 1.28 1.40 1.53 1.65 1.78
41.78 45.45 49.18 53.97 57.83

Add: Opening Stock - 2.50 4.85 7.10 10.25

Less: Closing Stock 2.50 4.85 7.10 10.25 13.35
39.28 43.10 46.93 50.82 54.73

GROSS PROFIT 11.73 12.90 14.07 15.18 16.27

23.0% 23.0% 23.1% 23.0% 22.9%

Selling & Administrative Expenses 3.83 4.20 4.58 4.95 5.33

Depreciation 1.61 1.38 1.19 1.02 0.88
Interest on Term loan 0.44 0.71 0.51 0.31 0.11
Interest on Working Capital limit 0.55 0.55 0.55 0.55 0.55
6.42 6.84 6.82 6.84 6.87

NET PROFIT BEFORE TAX 5.30 6.06 7.25 8.34 9.40

TAX 1.64 1.87 2.24 2.58 2.91

NET PROFIT AFTER TAX 3.66 4.19 5.01 5.77 6.50

ADD : DEPRECIATION 1.61 1.38 1.19 1.02 0.88

CASH ACCRUALS 5.27 5.57 6.20 6.79 7.38

PROJECTED CASH FLOW STATEMENT

PARTICULARS I II III IV V
Proj Proj Proj Proj Proj

SOURCES OF FUND
Incr. in Capital 4.83 - - - -
Net Profit after tax 3.66 4.19 5.01 5.77 6.50
Depriciation & Exp. W/off 1.61 1.38 1.19 1.02 0.88
Incr. in Term loan 8.00 - - - -
Incr. in working Capital limit 5.00 - - - -
Incr. in Creditors 3.50 0.30 1.12 1.83 1.25
Incr. in Provisions 1.00 0.10 0.11 0.12 0.13

TOTAL : 27.60 5.97 7.43 8.74 8.76

APPLICATION OF FUND
Incr. in Fixed Assets 11.77 - - - -
Incr. in Debtors 3.57 0.35 (0.26) 0.30 0.30
Incr. in Stock 5.42 2.60 2.50 3.48 3.35
Repayment of Term loan 0.90 1.80 1.80 1.80 1.70
Drawings 1.50 2.00 2.50 3.00 3.50

TOTAL : 23.16 6.75 6.54 8.58 8.85

Opening Cash & Bank Balance - 4.45 3.67 4.55 4.71

Add : Surplus 4.45 (0.78) 0.89 0.16 (0.09)

Closing Cash & Bank Balance 4.45 3.67 4.55 4.71 4.62
CALCULATION OF SALE AND PRODUCTION

Project details

Size of Napkin 30 cm *30 cm Napkin in 17 GSM

Production Capacity/day 2,500 packets per day(100 napkin sheet per packet)
No. of working days per year 300 days
Annual Production 750,000.00 Packets

Consumption of Raw Material i.e. Paper

Specification of Paper used in Manufacturing 17 GSM

No. of Packets manufactured in 1 kg of Paper 6.50 Packets
Cost of 1 kg of Paper 60.00 Rs/kg
Cost of Raw Material for each packet
(Raw material/no. of packet in 1 kg) i.e. 60/6.5 9.20 Rs./Packet

Total Raw Material Cost 6,900,000.00

69.00 Lacs 34.50

Selling Price of each packet 13.50 Rs/Packet

Total Sales Realized 10,125,000.00
101.25 Lacs
 CALCULATION OF CLOSING STOCK

PARTICULARS I II III IV V

Raw Material (15Days) 2.92 3.17 3.42 3.75 4.00

Finished Goods(20 Days) 2.50 4.85 7.10 10.25 13.35

5.42 8.02 10.52 14.00 17.35

CALCULATION OF WORKING CAPITAL REQUIREMENT

(i) Projected Sales(Ist Year) 51.00 Lacs

(ii) Working Capital requirement

25% of Projected Sales 12.75 Lacs

(iii) Margin 2.55 Lacs

5% of projected Sales

(iv) MPBF 10.2 Lacs

Working Capital Limit Required 5.00 Lacs

REPAYMENT SCHEDULE OF TERM LOAN 11%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

I Opening Balance
Ist Quarter - 8.00 8.00 0.22 - 8.00
IInd Quarter 8.00 - 8.00 0.22 - 8.00
IIIrd Quarter 8.00 - 8.00 0.22 0.45 7.55
IVth Quarter 7.55 - 7.55 0.21 0.45 7.10
8.00 0.44 0.90

II Opening Balance
Ist Quarter 7.10 - 7.10 0.20 0.45 6.65
IInd Quarter 6.65 - 6.65 0.18 0.45 6.20
IIIrd Quarter 6.20 - 6.20 0.17 0.45 5.75
IVth Quarter 5.75 - 5.75 0.16 0.45 5.30
0.71 1.80

III Opening Balance

Ist Quarter 5.30 - 5.30 0.15 0.45 4.85
IInd Quarter 4.85 - 4.85 0.13 0.45 4.40
IIIrd Quarter 4.40 - 4.40 0.12 0.45 3.95
IVth Quarter 3.95 - 3.95 0.11 0.45 3.50
0.51 1.80

IV Opening Balance
Ist Quarter 3.50 - 3.50 0.10 0.45 3.05
IInd Quarter 3.05 - 3.05 0.08 0.45 2.60
IIIrd Quarter 2.60 - 2.60 0.07 0.45 2.15
IVth Quarter 2.15 - 2.15 0.06 0.45 1.70
0.31 1.80

V Opening Balance
Ist Quarter 1.70 - 1.70 0.05 0.45 1.25
IInd Quarter 1.25 - 1.25 0.03 0.45 0.80
IIIrd Quarter 0.80 - 0.80 0.02 0.45 0.35
IVth Quarter 0.35 - 0.35 0.01 0.35 (0.00)
0.11 1.70

Door to Door Period 60 months

Moratorium period 6 months
Repayment Period 54 months
DEPRECIATION SCHEDULE

Description Land & Building Plant & Machinery Total

10.00% 15.00%

Opening Balance 0.00 0.00 0.00

Addition 3.00 8.33 11.33
Add: IDCP 0.12 0.32 0.44
3.12 8.65 11.77
Less : Depreciation 0.31 1.30 1.61

WDV at the end of 1st year 2.80 7.36 10.16

Addition 0.00 0.00 0.00
2.80 7.36 10.16
Less : Depreciation 0.28 1.10 1.38
WDV at the end of 2nd year 2.52 6.25 8.78
Addition 0.00 0.00 0.00
2.52 6.25 8.78
Less : Depreciation 0.25 0.94 1.19
WDV at the end of 3rd year 2.27 5.31 7.59
Addition 0.00 0.00 0.00
2.27 5.31 7.59
Less : Depreciation 0.23 0.80 1.02
WDV at the end of 4th year 2.04 4.52 6.56
Addition 0.00 0.00 0.00
2.04 4.52 6.56
Less : Depreciation 0.20 0.68 0.88
WDV at the end of 5th year 1.84 3.84 5.68
 DEBT SERVICE COVERAGE RATIO

Particulars I II III IV V

NET PROFIT AFTER TAX 3.66 4.19 5.01 5.77 6.50

Add : Depreciation 1.61 1.38 1.19 1.02 0.88

CASH ACCRUALS 5.27 5.57 6.20 6.79 7.38

ADD: INTEREST ON LOAN 0.44 0.71 0.51 0.31 0.11
TOTAL (A) 5.71 6.28 6.71 7.10 7.49

REPAYMENT OBLIGATIONS

REPAYMENT OF LOAN 0.90 1.80 1.80 1.80 1.70

INTT. ON LOAN 0.44 0.71 0.51 0.31 0.11
TOTAL (B) 1.34 2.51 2.31 2.11 1.81

D.S.C.R.(A/B) 4.26 2.50 2.90 3.36 4.13

AVG. D.S.C.R. 3.30

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