PROJECT REPORT

Of

PAPER CLIP

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Paper Clip 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 : info@udyami.org.in
Contact : +91 7526000333, 444, 555
 PROJECT AT A GLANCE
1 Name of the Entreprenuer xxxxxxxxxx

2 Constitution (legal Status) : xxxxxxxxxx

3 Father / Spouse Name xxxxxxxxxxxx

4 Unit Address : xxxxxxxxxxxxxxxxxxxxxx

District : xxxxxxx
Pin: xxxxxxx State: xxxxx
Mobile xxxxxxx

5 Product and By Product : PAPER CLIP

6 Name of the project / business activity proposed : PAPER CLIP MANUFACTURING UNIT

7 Cost of Project : Rs.14.79 Lakhs

8 Means of Finance
Term Loan Rs.8.28 Lakhs
Own Capital Rs.1.48 Lakhs
Working Capital Rs.5.03 Lakhs

9 Debt Service Coverage Ratio : 3.41

10 Pay Back Period : 5 Years

11 Project Implementation Period : 5-6 Months

12 Break Even Point : 37%

13 Employment : 9 Persons

14 Power Requirement : 20.00 HP

15 Major Raw materials : Galavanized Steel Wire

16 Estimated Annual Sales Turnover (Max Capacity) : 141.45 Lakhs

17 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lakhs)

Particulars Amount
Land Own/Rented
Plant & Machinery 7.70
Furniture & Fixtures 1.50
Working Capital 5.59
Total 14.79

MEANS OF FINANCE
Particulars Amount
Own Contribution 1.48
Working Capital(Finance) 5.03
Term Loan 8.28
Total 14.79
 PAPER CLIP MANUFACTURING UNIT

Introduction:

A paper clip is a curved piece of wire in a certain way that is used to temporarily or
permanently bond several paper sheets together. Paper clips usually have an oblong
shape with straight sides, but may also be triangular or circular, or have more
elaborate shapes. The most common material is steel or some other metal, but
molded plastic is also used. Some other kinds of paper clip use a two-piece clamping
system. Recent innovations include multi-colored plastic-coated paper clips and
spring-fastened binder clips. The advantage of this device over others is that it
practically leaves no traces and does not reliably damage the material being joined.
And the sale of this type of stationery in bulk in almost every country for a year is
tens of millions and billions. In the same offices, a paper clip is used not only as a
fastener, but also to cover the holes in the nose of the tube with glue (clerical or
PVA). This allows you to protect it from drying out, and the hole itself - from
blocking it with an adhesive mass. And if, however, the nose is clogged, then with
the same paper clip you can clean it and thereby avoid cutting off a fairly large part
of it. A paper clip also harmoniously fits into various sockets of various household
appliances and electronics.
Uses & Market Potential:

A paper clip is a curved piece of wire in a certain way that is used to temporarily or
permanently bond several paper sheets together. A paper clip also harmoniously fits
into various sockets of various household appliances and electronics. Temporarily it
can be used with a blown fuse, or as a plug for the antenna to the TV. The market
potential for paper clip is vast because of the still existing paper based needs of the
consumers. The global paper product market is expected to grow form INR 61,004
billion in 2020 to INR 64,502 billion in 2021 at a CAGR of about 5%. The industry
growth is mainly due to the companies rearranging their operations and recovering
from the COVID -19 impact, the market is expected to reach INR 78,690 billion in
2025 at a CAGR of 5%. In countries such as India for instance, e-commerce portals
have boosted the sales of paper products and paper pin manufactures by giving larger
exposure to producers who were confined to one geography.

Product:
Paper Clip

Raw Material:
The only raw materials required for the manufacture of the Paper Clip are galvanized
steel wire.
Manufacturing Process:

RAW MATERIAL PROCUREMENT

FORMING

BENDING

PACKAGING

Area:

The industrial setup requires space for Inventory, workshop or manufacturing area, space
for power supply utilities and polishing area. Also, some of the area of building is
required for office staff facilities, office furniture, etc. Thus, the approximate total area
required for complete industrial setup is 1200-1800Sqft.
Cost of Machines:

Machine Unit Rate Price

Paper Clip Making Machine 4 70000 280000
Conveyor 2 170000 340000

Air Compressor 1 150000 150000

Total Amount 770000

Power Requirement- The estimated Power requirement is taken at 20 HP.

Manpower Requirement– Following manpower is required:

 Machine operator-1
 Skilled/unskilled worker-2
 Helper-4
 Manager cum Accountant-1
 Sales Personnel-1

FINANCIALS
PROJECTED BALANCE SHEET

PARTICULARS I II III IV V

SOURCES OF FUND
Capital Account
Opening Balance - 2.49 4.07 5.89 8.22
Add: Additions 1.48 - - - -
Add: Net Profit 4.01 5.08 5.81 6.83 7.87
Less: Drawings 3.00 3.50 4.00 4.50 6.00
Closing Balance 2.49 4.07 5.89 8.22 10.09
CC Limit 5.03 5.03 5.03 5.03 5.03
Term Loan 7.36 5.52 3.68 1.84 -
Sundry Creditors 3.15 3.53 3.93 4.34 4.77

TOTAL : 18.04 18.16 18.53 19.44 19.90

APPLICATION OF FUND

Fixed Assets ( Gross) 9.20 9.20 9.20 9.20 9.20

Gross Dep. 1.31 2.42 3.38 4.20 4.90
Net Fixed Assets 7.90 6.78 5.82 5.00 4.30

Current Assets
Sundry Debtors 4.06 4.74 5.33 5.95 6.60
Stock in Hand 4.68 6.44 7.18 7.95 8.74
Cash and Bank 1.40 0.19 0.20 0.53 0.25

TOTAL : 18.04 18.16 18.53 19.44 19.90

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS I II III IV V

A) SALES
Gross Sale 87.00 101.66 114.23 127.51 141.45

Total (A) 87.00 101.66 114.23 127.51 141.45

B) COST OF SALES

Raw Material Consumed 63.00 70.69 78.62 86.89 95.42

Elecricity Expenses 2.24 2.46 2.69 2.91 3.13
Repair & Maintenance 2.18 2.54 2.86 3.19 3.54
Labour & Wages 8.69 10.43 12.31 14.28 16.28
Depreciation 1.31 1.12 0.96 0.82 0.70
Cost of Production 77.41 87.24 97.43 108.09 119.07

Add: Opening Stock /WIP - 2.58 2.91 3.25 3.60

Less: Closing Stock /WIP 2.58 2.91 3.25 3.60 3.97

Cost of Sales (B) 74.83 86.91 97.09 107.73 118.71

C) GROSS PROFIT (A-B) 12.17 14.75 17.14 19.78 22.75

13.99% 14.51% 15.01% 15.51% 16.08%
D) Bank Interest i) (Term Loan ) 0.90 0.73 0.53 0.33 0.13
ii) Interest On Working Capital 0.55 0.55 0.55 0.55 0.55
E) Salary to Staff 4.79 5.84 7.01 7.85 9.03
F) Selling & Adm Expenses Exp. 1.91 2.54 2.86 3.57 4.24

G) TOTAL (D+E+F) 8.15 9.67 10.95 12.30 13.95

H) NET PROFIT 4.01 5.08 6.19 7.48 8.79

4.6% 5.0% 5.4% 5.9% 6.2%
I) Taxation - - 0.38 0.65 0.92

J) PROFIT (After Tax) 4.01 5.08 5.81 6.83 7.87

PROJECTED CASH FLOW STATEMENT

PARTICULARS I II III IV V

SOURCES OF FUND

Own Contribution 1.48 - - - -

Reserve & Surplus 4.01 5.08 6.19 7.48 8.79
Depriciation & Exp. W/off 1.31 1.12 0.96 0.82 0.70
Increase In Cash Credit 5.03 - - - -
Increase In Term Loan 8.28 - - - -
Increase in Creditors 3.15 0.38 0.40 0.41 0.43

TOTAL : 23.26 6.58 7.54 8.71 9.92

APPLICATION OF FUND

Increase in Fixed Assets 9.20 - - - -

Increase in Stock 4.68 1.76 0.74 0.77 0.79
Increase in Debtors 4.06 0.68 0.59 0.62 0.65
Repayment of Term Loan 0.92 1.84 1.84 1.84 1.84
Taxation - - 0.38 0.65 0.92
Drawings 3.00 3.50 4.00 4.50 6.00
TOTAL : 21.86 7.79 7.54 8.37 10.20

Opening Cash & Bank Balance - 1.40 0.19 0.20 0.53

Add : Surplus 1.40 - 1.21 0.00 0.34 - 0.28

Closing Cash & Bank Balance 1.40 0.19 0.20 0.53 0.25
COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS I II III IV V

Finished Goods
(10 Days requirement) 2.58 2.91 3.25 3.60 3.97
Raw Material
(10 Days requirement) 2.10 3.53 3.93 4.34 4.77

Closing Stock 4.68 6.44 7.18 7.95 8.74

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Amount Margin(10%) Net

Amount
Stock in Hand 4.68
Less:
Sundry Creditors 3.15
Paid Stock 1.53 0.15 1.38

Sundry Debtors 4.06 0.41 3.65

Working Capital Requirement 5.03

Margin 0.56

MPBF 5.03
Working Capital Demand 5.03
REPAYMENT SCHEDULE OF TERM LOAN 11.0%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

I Opening Balance
Ist Quarter - 8.28 8.28 0.23 - 8.28
Iind Quarter 8.28 - 8.28 0.23 - 8.28
IIIrd Quarter 8.28 - 8.28 0.23 0.46 7.82
Ivth Quarter 7.82 - 7.82 0.22 0.46 7.36
0.90 0.92
II Opening Balance
Ist Quarter 7.36 - 7.36 0.20 0.46 6.90
Iind Quarter 6.90 - 6.90 0.19 0.46 6.44
IIIrd Quarter 6.44 - 6.44 0.18 0.46 5.98
Ivth Quarter 5.98 5.98 0.16 0.46 5.52
0.73 1.84
III Opening Balance
Ist Quarter 5.52 - 5.52 0.15 0.46 5.06
Iind Quarter 5.06 - 5.06 0.14 0.46 4.60
IIIrd Quarter 4.60 - 4.60 0.13 0.46 4.14
Ivth Quarter 4.14 4.14 0.11 0.46 3.68
0.53 1.84
IV Opening Balance
Ist Quarter 3.68 - 3.68 0.10 0.46 3.22
Iind Quarter 3.22 - 3.22 0.09 0.46 2.76
IIIrd Quarter 2.76 - 2.76 0.08 0.46 2.30
Ivth Quarter 2.30 2.30 0.06 0.46 1.84
0.33 1.84
V Opening Balance
Ist Quarter 1.84 - 1.84 0.05 0.46 1.38
Iind Quarter 1.38 - 1.38 0.04 0.46 0.92
IIIrd Quarter 0.92 - 0.92 0.03 0.46 0.46
Ivth Quarter 0.46 0.46 0.01 0.46 -
0.13 1.84

Door to Door Period 60 Months

Moratorium Period 6 Months
Repayment Period 54 Months
CALCULATION OF D.S.C.R
PARTICULARS I II III IV V

CASH ACCRUALS 5.32 6.20 6.77 7.65 8.58

Interest on Term Loan 0.90 0.73 0.53 0.33 0.13

Total 6.22 6.93 7.30 7.98 8.70

REPAYMENT
Repayment of Term Loan 0.92 1.84 1.84 1.84 1.84
Interest on Term Loan 0.90 0.73 0.53 0.33 0.13

Total 1.82 2.57 2.37 2.17 1.97

DEBT SERVICE COVERAGE RATIO 3.42 2.69 3.08 3.68 4.43

AVERAGE D.S.C.R. 3.41

Assumptions:
1. Production Capacity of Paper Clips Manufacturing unit is taken at 4000 Pcs per
day. First year, Capacity has been taken @ 50%.

2. Working shift of 10 hours per day has been considered.

3. Raw Material stock and Finished goods closing stock has been taken for 10
days.

4. Credit period to Sundry Debtors has been given for 14 days.

5. Credit period by the Sundry Creditors has been provided for 15 days.

6. Depreciation and Income tax has been taken as per the Income tax Act,1961.

7. Interest on working Capital Loan and Term loan has been taken at 11%.

8. Salary and wages rates are taken as per the Current Market Scenario.

9. Power Consumption has been taken at 20 HP.

10. Selling Prices & Raw material costing has been increased by 3% & 2%
respectively in the subsequent years.
 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN
assume no financial liability to anyone using the content for any purpose. All the
materials and content contained in Project report is for educational purpose and
reflect the views of the industry which are drawn from various research material
sources from internet, experts, suppliers and various other sources. The actual
cost of the project or industry will have to be taken on case to case basis
considering specific requirement of the project, capacity and type of plant and
other specific factors/cost directly related to the implementation of project. It is
intended for general guidance only and must not be considered a substitute for a
competent legal advice provided by a licensed industry professional. SAMADHAN
hereby disclaims any and all liability to any party for any direct, indirect, implied,
punitive, special, incidental or other consequential damages arising directly or
indirectly from any use of the Project Report Content, which is provided as is, and
without warranties.