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BUSINESS PROPOSAL REPORT
ON
TEA FORUM
A report submitted to IIMT, Greater Noida as a part fulfillment to full time
Post Graduate Diploma in Business Management.
Submitt ed To: Submitte d By:
Dr. D.K. Garg , Gourav Bhalla
Chair man sir, ENR NO.14090
IIMT, Greater Noida
Anita kumari
ENR NO.14110
Batch 14t h
Academic Year (2008-2010)
Ishan Instit ute of Management & Tec hnology
1A, Knowledge Park 1,Greater Noida , Dist.-G.B.Nagar(U.P)
Website : www.ishanfamiy.com E-Mail:[email protected]
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DECLE T
The Project on bus iness proposal been submit ted by Gourav Bha lla ENR
14090 & Anita kumari ENR 14110. As all Academic project is on ori ina l
work execut ed on dat e 03-09-09. Is the ori ina l work done by us. Th is is the
property of the Ins t it ute and use of this report withou t prior permiss ion of t he
Ins t itute will be cons idered illegal and act ionable.
Date
Siana ture Signa tur e
Gourav Bha lla An ita Kumari
ENR. NO- 14090 ENR NO. 14110
PGDBM PGDBM
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AC LEDGE E T
The successful complet ion of this dissertat ion would not have been
poss ible wi thou t the support and cooperat ion of others. We mus t fir st
thank God, who makes a ll things poss ible. We know tha t this project wa s
no t our individual ach ievement , but the result of many peop le to whom we
will be forever grat ef ul . It is not unt il you undertake a project like t his
on e tha t you rea lize how mass ive the effort it rea lly is, or how much you
mus t rely upon the selfless efforts and goodw ill of ot hers. We would be
fa il ing in my duty if we do not express our deep sense of grat it ude t othose who have been kind enough to help us in preparat ion of this report .
We are gratef ul to Dr. D.K. GARG, CHAIRMAN, ISHAN INSTITUTE OF
MANAGEMENT & TECH NOLOGY for his everlast ing support and
gu idance on the ground of which have acqu ired a new field of knowledge.
The course s tructure created for this curricu lum has been benefited wit h
inc lus ion of recent development in the organizat ion and the managerial
aspects.
Gourav Bha lla
ENR NO. 14090
An ita Kumari
EN R NO. 14110
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PREA
CE
All students learn theoret ical subjects in their classroom, but as we are t he
management students, apart from theoret ica l stud ies we need to get a deeper
ins ight into the pract ica l aspects of those theories by do ing research on
Bus iness proposa l during making of this bus iness project . This is a period in
which a student can apply his theoret ical knowledge in pract ica l field.
Bas ica lly pract ical knowledge and theoretical knowledge have a very broad
difference.
So this project has high importance as to know how bot h the aspects are
applied toget her.
During the curriculum of management programmers a s tudent ha s to attain a
pract ical exposure of a Bus iness Unit on live project in addit ion to theory
he/she studies .
This Project Report has been completed in Part ial fulfil lment of mymanagement Program, Post Graduate in Bus iness Management . The object ive
of our project was t o know about a product and to research abou t its
cu stomers.
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TABLE OF CONTENT
S.NO Part i lars Page No.
1 Preamble 6
2 Purpose of study 7
3 The Bus iness 8-9
4 The Locat ion 10-11
5 Manpower requirement 12-13
6 Mach inery requirement 14-16
7 Technica l knowledge 17
8 Plant Layout 18-19
9 Demand for the product 20-22
10 Supply for raw mat erial 23-24
11 Sources of raw mat eria l 25
12 Major compet itors 26
13 Fund flow statement for next three years 27
14 Break even analys is 28-29
15 Why I am interes ted in t his project 30
16 Tax app licat ion 31-34
17 Legal aspect 35-37
18 Conc lus ion 38
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PREAMBLE
TEA indus try in India is the larges t of the beverage indus tries with an annua l
turnover of about Rs. 4000 crores. India is the first larges t producer acrossthe India. The Tea industry in India comprises of organized and unorganised
sec t ors. The quant ity of product ion of tea is more or les s the same. The
industry has tradit iona lly been and largely cont inues to be in the unorganized
sec t or contribut ing over 70% of the tota l product ion.Tea is the bas ic need of
the human being , have now become an essen t ial it ems of the vast majorit y
of populat ion. Though Tea indus try in India has been in ex istence s inc e the
time of Brit ishers. The contributing factors were urbanization, resulting in increased
demand for ready to use the products at reasonable costs etc.
We are starting a business of tea house in . We will offer a full range of teas that is black,
green, herbal teas. The business partners of tea house are Anita kumari and Gaurav kumar
bhalla.we will make an investment of 50 lakhs. Each partner will make an contribution of
50% of the investment. The equipments improvement and inventory required 75% of the
investment and leasehold and other expenses will comprise remaining 25% ofthe investment.
We want to become one of the Indias largest and most reliable business house. We will
purchase the raw material from the suppliers and then manufactured. we will also make
supply of our products and services to whole parts of india as well. Tea is the most
consuming beverage in the world after water.
The t ea bus iness is ma inly concent ra ted in the Himachal Pradesh, Assam,
Darjeeling. Indus tria lly advanced S tates like Wes t Benga l have very Large
number of t ea units. The per capit a consumpt ion is very high in indus triali zed
States are like Himachal Pradesh Wes t Bengal. The tea is becoming quit e
popular in rural areas as well as urban area also. There is no marketing problem as
every shop is a market fortea. Tea products still remain the cheapest ofthe processed ready
to consumed in the country. The production of Tea has increased day by day. Over 60% of
the Tea are produced by small scale sector consisting of both factory and non-factory units.
The growth rate for Tea products is estimated at an average of 15% per annum. The demand
for Tea will continue to increase in future. Theestimated growth rate of 15% is on the lower
side considering the present potentiality of Tea products. Encouraging trends in consumption
of Tea products by population of lower and middle income groups . The tea products is
segmented on the basis of different age group like four young generation Ice tea, For old and
middle age people black Tea.
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PURPOSE OF STUDY
Why Prepare a Business-Proposal ?
The Business Plan is a written summary of what you hope to accomplish by being in business
and how you intend to organize your resources to meet your goals. It is the road map for
operating your business and measuring progress along the way.
1. The Business Plan identifies the amount of financing or outside investmentrequired and when itis needed.
2. Firstimpressions are important. A well-organized plan is essential for a lender orinvestor to assess your financing proposal and to assess you as a business
manager.
3. By committing your plans to paper, your overall ability to manage the businesswillimprove. You will be able to concentrate your efforts on the deviations from
plan before conditions become critical. You will also have time to look ahead
and avoid problems before they arise.
4. It encourages realism.5. It hel ps you to identify your customers, your market area, your pricing strategy
and the competitive conditions under which you must operate to succeed. This
process often leads to the discovery of a competitive advantage or newopportunity as well as deficiencies in your plan.
6. Three or four hours spent each month updating your plan will save you time andmoney in the long run and may even save your business. Resolve now to make
planning a part of your management style.
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THEBUSINESS
The Tea Business in India is nearly a 170 years old practice. This agro-based industry is avery important contributorto the economy of India. The main axis oftea business in India is
located along the rural hills and backward areas of Northeastern and southern states like
Assam, WestBengal, Tamil Nadu and Kerala. Further, the regions, which are associated with
small time tea business in India, are Karnataka, Tripura, Himachal Pradesh, Uttaranchal,
Arunachal Pradesh, Mani pur, Sikkim, Nagaland, Meghalaya, Mizoram, Bihar and Orissa.
Itis a partnership firm. A brief description ofthe proposed business is as follows:-
B si ess T e :- Manufacturer , Supplier
Capitali rupees:- 50 lakhs
Pri ary Competitive Advantages
Wide product range Excellent product quality Competitive rates Flexible production process Modern manufacturing facility Timely delivery Cutting edge technology
Monthly Production Capacity:- As per customerRequirement
Product Range :
GREEN TEA BLACK TEA HERBAL TEA
VISION
Be indias foremosttea beverage company.
MISION
Become an innovatorin tea and tea based beverages
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To provide finest premium in tea
Drive long term profitable growth
VALUES
Excellence ; strive to achieve the highest possible standards in day to day work and provide
the quality products / services.
Responsibility ; work forthe benefits of communities we serves, be sensitive and responsible
towards the people of the nation and the environment. We take many resources from the
society and its our duty provide full value to them.
Unity ; work cohesively in the group with our customers, employees and partners to build a
strong relationship.
Understanding ; show care towards our customers, employees and other stakeholders.
Integrity ; conduct business with honestly, fairly and with transparency.
Innovation ; creativity, experimentation and risktaking capability.
BRAND NAME OF THE COMPANY
TEA FORUM
LOGO OF THE COMPANY
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LOCATION
We are going to set up our manufacturing unit in KANGRA which is situated in
HIMACHAL PRADESH. Kangra district is situated in the North-West Indian state of
Himachal Pradesh. This is mountain country, very much part ofthe Himalayas with dramaticlandscapes ranging from pine tree-covered slopes to frozen high-altitude deserts and deep
gorges with bubbling streams that flow into the Ganges river of India, and the Indus riverin
Pakistan. The state shares a border with Punjab to the west, Kashmirto the north, and on the
east side has Tibet as a neighbour. The craggy Dhauladhar range towers over the Kangra
Valley, where in the foothills lies Indias smallest tea region with its own tea town of
Palampur. All Kangra tea is produced by orthodox manufacture, and given the traditional
manner of cultivation and frugal inputs, the region is by default organic. We have choosing
this location because we can easily getthe supply of raw materials from the valleys of kangra
and mandi. Lots of foreigners visit HIMACHAL every years, we can also promote our
product and services.
LOCATION STRATEGY
We know the 4Ps of marketing:
Product
Price
Place
Promotion
Place orlocation plays an important role for any business. Its a key factorto success. In any
business location is chosen according to theirtarget audience.
LEVEL OF LOCATION DECISION & ITS DETERMINING FACTORS
Typically, a location may be classified according to:
1.Selection of a city-First we go for selection of city which city will be best for us and in
which city there is an opportunity for business.
2.Area within a city-After determination of city in which area to open ,so that it can be
beneficial forthe target audience as well as businessman.
3.Site decision: Whetherthe site is adequate to attractthe target audience.
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In our business plan I have chosen the city Kangra is in Himachal Pradesh because in that
town the demand for Tea product is on demand. In this city there are more opportunities to
success . In this city it is easy to give advertisement because a lot of media channels are
working overthere .Competition is very much there butit also provides a great platform for
success. I have chosen the area is notin the centre oftown butitis nearto the agriculture and
nearto the market also, .because raw material used in manufacturing is available in cheaper
rate. We are taking 2400 sq.ft. land for manufacturing oftea.
Particulars Land buildings Proposed Area
Production
Raw material
Finished good
Office laboratory
workshop area
storage
storage
70x20
30x15
25x10
15x20
2400 sq ft.
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MAN POWER REQUIREMENT
Selection of employees is one of the important decisions to be taken. Selection should be
based on skills and qualification..Allthese recruitments will be done by us.
DIRECT LABOURAND WAGES
S1 Head Nos. Wages/salaries
per month Rs
Estimated per
month
Rs
Cost per year
Rs
1 Plant engineer 2 10,000 20000 2,40,000
2 Chemist 2 15,000 30000 3,60,000
3 Skilled worker 6 5000 30000 3,60,000
4 Semi skilled 10 3000 30000 3,60,000
5 TOTAL 20 110000 13,20,000
The annual requirement for salaries to production staffs for the firstthree years would be as
follows after 10% proposed increment:
Year of operation Salary/ amountin lakhs
1st
19.92
2nd
21.91
3rd
and onward 24.10
SALARIES FOROFFICE AND ADMINISTRATIVE STAFFS
S. No. Head Nos. Salary/month Estimated
per month
Cost in
Rs. Per
year
1. Manager/acountant 1 30000 30000 3,60,000
2. Salesman 4 8000 32000 3,84,000
3. Peon cum guard 2 5000 10000 1,20,000
Total 7 72000 8,64,000
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The annual requirement of salaries for the first three year would be as follows after 10%
proposed increment
Year of operation Salary/ amountin lakhs
1st
8.64
2n
9.50
3rd
and onward 10.45
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MACHINERY REQUIREMENT
These are the machines are required forthe manufacturing oftea:
Itis a procedure which brings about physical and chemical changes in the shoots to producequality, apart from conditioning the flush for rolling by reducing turgor, weight and volume.
Previously the flush used to be withered under the sun. Now this process is generally
achieved either by thinly spreading the flush on mats, or in thick layers in troughs for 8-18
hours depending on the condition ofthe leaves.
The object of rolling is to macerate the leaf so that the enzymes and their substrates get
intimately mixed up. This is achieved mechanically either by the use of an orthodox roller,
the rotorvane, or by CTC (crushing,tearing and curling) machines. Rolling ruptures the cell
wallthereby enabling the production of enzymes.
Itis the process of oxidation of leaves. The mechanical aspect involves spreading out ofthe
leaves macerated by rolling a layer 5-8 cms thick, for 45 minutes to 3 hours, depending onthe quality of the leaves. Fermenting machines make the process continuous, that is, every
unit of macerated leaf has to be spread out forindividualtreatment.
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It reduces the moisture content of rolled and fermented leaves from 45-50% level to a 3%
level in dried blacktea. It also allows development of blacktea aroma. Drying is physically
achieved by blowing hot air through fermented leaves as they are conveyed in chains. The
drying process lasts for about 20 minutes
Sorting may be defined as a procedure in which particles of bulktea are separated into grades
of different sizes. This sizing can be done either manually or by using different sizing
equipments. Sorting meshes of various sizes are used to grade the tea
Machinary Cost
Particulars Amount
Machinery 810,000
Plant structure and cost of installation + freight + tax @ 15%
approx.
120000
DG set 426,000
Installation charges 24000
Plant wiring, workshop wiring, and lighting and fanning fixtures 1,50000
Overhead tank and moisturized bore well 90,000
Furniture fixtures 60,000
Total 1680,000
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POWER & FUEL
A. POWER
a. Connected load : 60 HPb.
Load factor : 60 %
c. Maximum load : 36 HPd. Running hours / day : 12 hourse. Rate of powertariff Rs. 5.00/ KWH
(UNIT)
f. Power consumption /year(60 HP x 0.746 x 12 HRS x 300 DAYS x 0.6 ): 96681.60 KWH
g. Cost of power/annum 4,83,400.00h. Misc power charges and rental 16600.00
B. FUEL FOR DG SET
Capacity of DG set : 60 KVA
Running Considered/ day : 3 hours
Diesel consumption /hour : 4 lit
Rate of diesel : Rs. 36 /lit
approx.
Consumption of oil/year 3x4x300 : 3600 lit
Cost of fuel / year : 1,29,600.00
Misc lubricant etc : 20,400.00
Rs. 1, 50,000.00
Total cost of power & fuel = Rs. 6, 50,000 / annum
Requirement of power & fuel on efficiencies
Year of oprn Capacity Per Year (Rs.)
Zero yr 100 % 6, 50,0001 st yr 60 % 3, 90, 000
2nd
yr 70 % 4,55, 000
3rd
yr & onward 80 % 6,50,000 5,20,000
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TECHNICAL KNOWLEDGE
Tea Forum team provides solid competencies within the following major areas:
y Witheringy Rollingy Dryinf or firingy Oxidation
Besides core application competencies, the team has strong industry focus and knows how to
absorb and use marketinformation and trends.
a) Withering Newly picked leaves are thinly spread to dry during this process. Heated air is
forced overthe leaves ifthe climate is not suitable. The main goal ofthis process is to reduce thewater content. By the end ofthis process, the leaves should be pliable enough to be rolled.
b) Rolling From the withering racks, the leaves are now twisted and rolled so thatthe leaf cells
are broken up. Sometimes shaking is done as well. Oils are released with this rolling process that
give the tea its distinctive aroma. The leaves can be rolled with machinery or by hand. The juices
that are released remain on the leaf; a chemical change will occur shortly.
c) Oxidation This is the chemical process where oxygen is absorbed. This process began once
the leaf membranes were broken during the rolling process.Oxidation causes the leaves to turn
bright copperin color. This process is the main deciding factor whether we have green, Oolong or
Blacktea.
Application expertise
We have an extensive knowledge of raw materials, processes and production to a deep
understanding of how different ingredients interact with each other, raw materials and Tea
components.
This toolbox allows us to
y choose the optimal solution and ingredients that fitthe specific formulation and processy design formulations and conceptsy suggest alternative processes and process parameters
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PLANT LAY OUT
The efficiency of production depends on how wellthe various machines; production facilities
and employees amenities are located in a plant. Only the properly laid out plant can ensurethe smooth and rapid movement of material, from the raw material stage to the end product
stage. Plantlayout encompasses new layout as well as improvementin the existing layout.
It may be defined as a technique oflocating machines, processes and plant services within the
factory so as to achieve the right quantity and quality of output atthe lowest possible cost of
manufacturing. It involves a judicious arrangement of production facilities so that workflow
is direct.
Plant layout refers to the arrangement of physical facilities such as machinery, equipment,
furniture etc. with in the factory building in such a manner so as to have quickest flow of
material at the lowest cost and with the least amount of handling in processing the product
from the receipt of materialto the shipment ofthe finished product.
Plant layout is an important decision as it represents long-term commitment. An ideal plant
layout should provide the optimum relationship among output, floor area and manufacturing
process. It facilitates the production process, minimizes material handling, time and cost, andallows flexibility of operations, easy production flow, makes economic use of the building,
promotes effective utilization of manpower, and provides for employees convenience,safety, comfort at work, maximum exposure to natural light and ventilation. It is also 99
important because it affects the flow of material and processes, labour efficiency, supervisionand control, use of space and expansion possibilities etc.
Plant Lay Out
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Using lean manufacturing techniques, Advent Design reviewed the operations atthe facility
and developed a value stream map ofthe current operations. The value stream map detailed
the production operations and equipment cycle times and change over times along with the
flow of order and production information. Using the information gathered, Advent Design
developed a desired future state value stream map, which identified recommended process
changes. New equipment, work area changes, and workflow were all considered in the
desired future state map. Some ofthe major changes proposed were as follows:
y Convert DOS-based production planning and shipping programs to an integratedsystem using Windows-based software.
y Go to Product Family production when an adjacent building becomes available forexpansion.
y Improve oven reliability.y Increase the area available for designated product staging and truckloading
Impact
Advents report provided the customer with a blue print for future expansion and for the
consolidation of operations from other Tea Businesses that they have purchased. Work to
date has been limited to equipment and layout improvements within the current facility.
Expansion is planned once product demand returns to the higherlevels seen previously.
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DEMAND FOR PRODUCT
The demand for Tea in India is very high from the time of britishers. Nor is demand future
sales. In fact, demand can be eitherlower or higherthan actual sales if a marketis inefficient
(i.e., not representative of relatively competitive levels). Inefficiencies arise from a number of
factors, including the lack of international openness, cultural barriers to consumption,
regulations, and cartel-like behavior on the part of firms. In general, however, demand is
typically largerthan actual sales in a market. For reasons discussed later, this report does not
considerthe notion of unit quantities, only total revenues (i.e., a calculation of price times
quantity is never made, though one is implied).
THE METHODOLOGYIn order to estimate the demand for Tea products across the states or union territories and
cites of India, we used a multi-stage approach. Before applying the approach, one needs a
basic theory from which such estimates are created. In this case, we heavily rely on the use of
certain basic economic assumptions. In particular, there is an assumption governing the shape
and type of aggregate demand functions. Demand functions relate the income of a state or
union territory, city, household, orindividualto realized consumption.demand (often realized
as consumption when an industry is efficient), at any level ofthe value chain, takes place if
an equilibrium is realized. For firms to serve a market, they must perceive a demand and be
able to serve that demand at a minimal return. The single most important variable
determining consumption, assuming demand exists, is income (or other financial resources at
higherlevels ofthe value chain). Other factors that can pivot or shape demand curves include
external or exogenous shocks (i.e., business cycles), and or changes in utility forthe product
in question.
The average propensity to consume is constant. Is it declining oris it constant? A number of
other economists, notably Franco Modigliani and Milton Friedman, in the 1950s (and Irving
Fisher earlier), explained why the two functions were different using various assumptions on
intertemporal budget constraints, savings, and wealth. The shorterthe time horizon, the more
consumption can depend on wealth (earned in previous years) and business cycles. In the
long-run, however, the propensity to consume is more constant. In particular, we are
considering the demand for Tea products across the states or union territories and cities of
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India. The smallest cities have few inhabitants. we assume that all ofthese cities fall along a
"long-run" aggregate consumption function. This long-run function applies despite some of
these states or union territories having wealth; currentincome dominates the demand for Tea
products. So, demand in the long-run has a zero intercept.
Filling in Missing Values
In some cases, data are available on a sporadic basis. In other cases, data may be available for
only one year. From a Bayesian perspective, these observations should be given greatest
weightin estimating missing years. Assuming that other factors are held constant, the missing
years are extrapolated using changes and growth in aggregate national, state or union territory
and city-levelincome.
Varying Parameter, Non-linear Estimation
Given the data available from the firstthree steps, the demand is estimated using a varying
-parameter cross-sectionally pooled time series model. Simply stated, the effect ofincome
on demand is assumed to be constant unless there is empirical evidence to suggestthatthis
effect varies (i.e., . the slope of the income effect is not necessarily same for all states or
union territories or cities). This assumption applies along the aggregate consumption
function, but also over time (i.e., not all states or union territories or cities in India are
perceived to have the same income growth prospects over time). Another way of looking at
this is to say that demand for bakery products is more likely to be similar across states or
union territories or cities that have similar characteristics in terms of economic development.
This approach is useful across geographic regions for which some notion of non-linearity
exists in the aggregate cross-region consumption function. For some categories, however, the
reader must realize that the numbers will reflect a states, union territorys or citys
contribution to demand in India and may never be realized in the form oflocal sales.
Fixed-Parameter Linear Estimation
Nonlinearities are assumed in cases where filtered data exist along the aggregate consumption
function. Because India has more than 5,000 cities, there will always be those cities,
especially toward the bottom of the consumption function, where non-linear estimation is
simply not possible. For these cities, equilibrium demand is assumed to be perfectly
parametric and not a function of wealth (i.e., a citys stock of income), but a function of
currentincome (a citys flow ofincome).
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In the long run, if a state or union territory has no currentincome, the demand for Tea
products is assumed to approach zero. The assumption is that wealth stocks fall rapidly to
zero if flow income falls to zero (i.e., cities which earn low levels ofincome will not use their
savings, in the long run, to demand bakery products).
Aggregation andBenchmarking
Based on the models described above, demand figures are estimated for all major cities in
India. These are then aggregated to get state or union territory totals. This report considers a
city as a part ofthe regional and national market. The purpose is to understand the density of
demand within a state or union territory and the extent to which a city might be used as a
point of distribution within its state or union territory. From an economic perspective,
however, a city does not represent a population within rigid geographical boundaries.
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SUPPLY FOR RAW MATERIAL
There are many suppliers in India who supply the raw material for manufacturing the Tea
products. Some names are as follows.
1. Sharda group ofindustries
Offering a variety of Tea Ingredients like green Tea.
Location:
Sharda Compound, Murbad Road, Ner Sony Hotel, Mharal Village, Post: Varap, Dist.:Thane,
Kalyan, Assam, India.
2. Navkar Bevrages, Guwahati
Deals in manufacturing and exporting of Tea like CTC Tea, Orthodox Tea , Green Tea, White
Tea, Organic Tea, KashmiriMogra Saffron ,Dry Foods.(Dry fruits), Garlic, Fresh Ginger , Turmeric
Location:
No.23, SGN Layout, II Cross, Lalbagh Road,
Guwahati, Assam, India.
3. Green tea India limited, Himachal
Tea Board of india, Tea Research of India, Tea Auction and IHBT Himachal also have
accepted the claim that GREEN TEA AND WHITE TEA ARE "HEALTH DRINK". TheseTEAs are helps in all the major deseases like:- Low blood triglyceride, blood cholesterol,
reduces incidence of Cancer, srengthen blood vassel wall, regulates blood sugar and blood
pressure, Prevents Heart blocked, prevent dental caries and aging etc. What are in our cup oftea:-
Catechins, Flavonoids, Fluoride, Vitamin E, Salicylates, Polysaccharides, Essential
Amino Acids and Theanine etc.
Location:
"Badari" 111/1, Raghavendra Colony
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Kangra, Himachal pradesh India.
4. Arunima beverages ltd.
We are a suppliers of Assam Tea in bulk and small packing. OEM welcome, Orthodox and
CTC
Location:
2, Rowland Road, Assam ,India
5. Jasmine Tea Private Limited, Assam
Leading manufacturer and supplier of Indian tea. we have Assam tea, Darjeeling Tea,
Nilgiri tea and Herbal tea. India is one of the largest producers of tea and we are
proud exporters ofthe same. Our sourcing is from the vast farms ofthe northeast making sure
we keep up to the specifications and quality of our buyers.We provide our buyers with the
facility of customized & standardized packaging.
Location:
13/21, Mapla House Nilgiri, H.P. India.
6. RoyalTea Pvt. Ltd. Assam
Exporters and manufacturers of All kind of generaltea, Tea blacktea, Green tea,
Location:
3/86 Vileparle East, Assam, India
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SOURCES OF RAW MATERIAL
Tea manufacturers must have knowledge of ingredients used for Tea products .Properties of
these raw materials are distinct and quantity to be used are critical for good and tasty product.
We will make an purchase of tea leafs from KANGRA valley and MANDI, HIMACHAL
PRADESH INDIA. The 2rd largest orthodox leaftea and green tea growing area in India and
dealing in tea trade directly from Kangra valley and Mandi.Himachal Pradesh tea is grown in
the Mandi and the Kangra districts over 2063 In hectare area.
Kangra renowned ads the valley of gods is famous forits distinct flavoured tea. Below the
towering and exquisitely beautiful snow clad DhauladharMountain, tea has been grown on
the gentle slopes ofthe outerHimalayas since 1949.Tea in Himachal Pradesh is grown at an
elevation ranging from 3500- 5500 meters above mean sea level, having a temperature range
of 13- 35 degree Celsius during march through October, the cropping season, and yearlyprecipitation around 250-230 cms of well distributed rains.
RAW MATERIAL USED FORTEA
Quality of tea depends to a large extent on the standard of plucking because, while the
quantity of essential chemical constituents gradually decrease in the older leaf, fi bre and
other insoluble materials increase. Thus, the manufacture starts with heterogeneous raw
materials having different levels of chemical constituents and physical characteristics. When
such materials are subjected to subsequent steps of processing each category responds
differently resulting in some over-processed and some under-processed mass. The large
volume of harvested shoot limits the technology to separate two and a bud and three and a
bud, otherwise it would be idealto separate them to different bays and perform manufacture
separately.
The shoots oftea plants contain large range of chemicals of which the catechins are the most
important characteristics for manufacture of black tea. The leaves also contain polyphenol
oxidase (PPO) and peroxidase (PO), which are enzymes capable of oxidizing catechins. The
overall constituents ofthe tealeaf as located in different cell compartments are as under
Catechins Flavonoids
Fluoride Vitamin E
Salicylates Polysaccharides
Essential Amino Acids Theanine
The membranes separate the chemical constituents in different components in a normal leafand therefore these constituents cannot come in contact and react. During processing the
increase in cell permeability facilitates the intermixing of the constituents, which intensifiesduring later part of processing through cell disruption. When the cells are macerated the
chemical constituents come in contact and instant oxidation reaction takes place leading to
formation of larger phenolic compounds called theaflavins (TF) and polymeric thearubigin
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(TR). Depending upon the extent ofthe reaction of the phenolic compounds in presence ofenzymes Blacktea, Oolong tea or Green tea are produced.
MAJORCOMPETITORS
In the gourmetteahouse industry, competition depends on quality ofteas, knowledgeable tea
tenders, and cultivation and education of a loyal customer base. Consumers used to Liptonteabags and otherlow-quality, tea-dust offerings in grocery stores are amazed atthe range of
tastes, textures, and fragrances from real, high quality tea. Offer them a good cup, and they
will usually return forthe rest oftheirlives. However, getting them to enter your store in the
first place can be a major challenge.
Our potential customers vary in knowledge of tea, and are seeking a wide range of
experiences and products.
Tea drinkers are looking for a pleasant, relaxing place in which to indulge their love of tea,
share it with friends, and learn more about tea varieties, cultivation, and health properties.
Committed tea drinkers will always choose quality over price or convenience, seeking outthe
freshest whole-leaf and ti ppy varietals in the area. Friends of ours have driven 50 miles to
buy quality loose teas to bring home with them. Our challenge with these consumers is
getting outthe word that we are here, and holding events to showcase our quality.
There are players in both organized and unorganized sectors, with the contribution of the
unorganized sectorin overall business being 45 percent, says Frost and Sullivan in its report.
Tata Tea, Taj Mehal, Brook Bond, and Lipton exchange are the major organized players.
These players are providing the best quality of product at fair rates with wide variety of
products.
Some ofthe major players are as follows:-
TATA TEA
TAJ MAHAL TEA BROOKBOND RED LABLE TEA GOODRIK TEA LIPTON TETLEY TEA
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FINANCIALASPECT
IN THEBOOKS OF TEA FORUM
RECEIPT & PAYMENTA/C
For the year ended 31-03 -2010
RECEIPT Amount
(Rs)
PAYMENT Amount
(Rs)
BANK LOAN
CAPITALA/C:
GOURAV
ANITA
INCOME FROM TEA
25,00,000
12,50,000
12,50,000
72,54,100
LAND
MACHINERY AND EQUIPMENT
CONSTRUCTION
ELECTRICITY EXPENSES
FURNITURES
STAFF EXPENSES
TRANSPORTATION EXPENSES
ELECTRICITY BILLS AND FUEL
MISCELLANEOUS+ADVERTISEMENT
RAW MATERIAL
PACKAGING EXPENSES
CASH IN HAND AT THE YEAR
ENDED
12,00,000
25,00,000
1,00,000
50,000
10,00,000
16,26,000
12 ,00, 000
1,50,000
20,000
17,48,100
21,60,000
5,00,000
12,254,100 12,254,100
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BREAK EVEN ANALYSES
Our break-even analysis is based on our cost and price structure for the first year. As we grow, thefixed costs will grow in proportion to the number of employees. We should surpass ourBreak-even
point early on.
BREAK EVEN ANALYSIS
ASSUMPTION
Capacity utilization : 80%
Sales earning : 30643
Variable cost in Thousand
Raw material 17481
Power and fuel 650
Salary and wages(var) 1992
Interest on cash creditlimit 72
Selling expences 478
Contribution 1980
Fixed cost 814
0
10000
20000
30000
40000
50000
60000
1 2 3 4 5 6 7 8 9 10
Series1
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Salary 320
Repair and maintenance 136
Adm expenses 116
Depreciation 78
Term loan intt 146
Insurance 18
Break even point = fixed cost / contribution x 100% = 814/ 1980 x 100% = 41.11%
Amount of break even = 15.960 lacs x 41.11% = 56.60 lakhs
profit before tax/ project cost = 11.66/30.00 x 100 = 38.86%
construction of shed, procurement of machinery and a cash creditlimit as working capital from bank
underthe KVICS Margin money scheme. Underthe circumstances, this reportis being prepared to
work out the performance and projection of profitability of the unit for the next five years and
accordingly to assess its technical and economical viabilities to availthe financial assistance by way
of Term Loan, Cash Credit Limit, and Bank Ened Subsidy underthe Rural Employment Generation
Programme of K.V.I.C.
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WHY I AM INTERESTED IN THIS PROJECT
We are interested in this project because after completing of our education either we looking
for our job or established our own business. It gives us a broader thinking in terms of huge
knowledge, creativity, responsibility, innovation and decision maker. we learned so many
things from the theoretical knowledge, butit gives us a practical aspect of reality. Greatideas
are always work, when we implementthatin our day to day life. It will provide a real picture
that we going to face in the coming years. Itis an good opportunity for us that how to cope up
with the strategies , what are the key factors that help us growing atthe tough times. Doing
the best at this moment puts me in the best place for the next moment. There are lots of
example of successful personalities, who first plan outthe thing and to the coming years, they
makes a lots of modifications according to their needs.
Apart from this there is no difference in quality between purifiers provided by big brands andunbranded ones are not much, as almost all players procure components used in the machines
from common suppliers. Prices depend on what qualities of products are actually used in
products.
Success of a productin the market, in fact, depends on two essential factors- advertising and
after sales service. Unbranded products lack on this front, but they try to outsmart the big
players through after sales service
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TAXAPPLICATION
Four important areas in starting a business are licenses and government regulations, taxes,
financial areas and managing risk and legal structures. This is notthat complicated, butis an
important step in starting yourtea business. You need to set up yourself professionally.
Heres what youll need to know about naming your business, getting a business license,obtaining a resale tax number, opening a business bank account and credit card, dealing with
the IRS, deciding on legal form of business, and managing risks.
If you havent already done all of this, it is not too late to do it now and protect yourself.
Please be advised that I am not a legal expert. If you have legal questions about your
business, I would suggest that you invest in a good attorney or CPA that can answer your
questions. It is money well spent. It generally is far less expensive to spend the money upfrontthan to try to fix a problem later on.
Excise Duty
Excise duty is levid on the production of goods or manufacturing of exciseable goods in
india. In orderto attractlevy of excise duty, three conditions must be fulfilled.
y The goods should be exciseable goodsy Goods must have been manufactured in indiay There should be goods
Goods can be non exciseable goods if any ofthe following situations
y Ifitis movabley Ifitis not marketabley Ifit has not be specified in the schedule to central excise and tariff Act.
There are three rates :
y 8% merit ratey 16% normal ratey 24% demerit rate
w.e.f.2001 there is only one rate i.e. ,16% Plus 3% education cess.
Central Sales Tax
The sales tax is levid atthe time of sale and purchase of goods takes place.
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Itis an indirecttax. In sales tax the formalincidence is on the dealer and effective incidence
is on the consumer. The central sales tax is levid by union govt. but administered and
collected by state govt.
The rate of sales tax is 10%
We covered the Value Added Tax underthe sale tax. The standard rate of VAT is 12.5%
Wealth Tax
Wealth tax is levied on non-productive assets whose value exceeds Rs.1.5 million. Productive
assets like shares, debentures, bank deposits and investments in mutual funds are exempt
from wealth tax. The non-productive assets include residential houses, jewelry, bullion,
motor cars, aircraft, urban land, etc. Foreign nationals are exempt from wealth tax on non-
Indian assets. In arriving atthe nettaxable wealth, any debt incurred in acquiring specified
assets is deductible.
Income Tax
The taxes applicable on earnings ofindividuals and companies in india are as follows:-
Individual Income Tax Rates
Taxable Income Tax Rate
Over Not Over
0Rs. 160,0001
0
Rs. 160,001 Rs. 300,000 10%
Rs. 300,001 Rs. 500,000 20%
Rs. 500,001 above 30%2
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Property Tax
If applicable divide the annual property tax amount by 12. This figure will equalthe average
monthly tax amount.
Labour Tax
This is the tax amount the employee is required to contribute to the state and federal
government. A separate tax account should be set up with your bankto keep all the tax
money separate. Labour taxes include social security federal unemployment tax and state
unemploymenttax.
Other Tax
This includes allthe miscellaneous taxes , such as localtaxes, sales taxes , paid on purchases
etc. This coloum for any tax the backery pays goods and services. It is not for sales tax or
othertaxes. The backery collects as they are not expenditures . Federalincome tax is not our
dedictable expenditure and should not be listed here either.
Step 1:Choosing your business name
This is one of the fun parts of starting a business is you naming your business. If youreopening a tea room, you can either use your own name or come up with something cute and
unique. Find a name that will encompass all areas that you are interested in yourtea business.
I was going to name my tea room Tea Fourm I originally wanted to name it the Tea
Fourm my friends talked me into adding my name so they could say, Lets go to Tea
Forums Vally. However, I never did open the tea business.
Changing a business name after you have used it can be a real hassle. If you already have
stationery, business cards, etc. printed with a name, you have to redo all ofit and that can be
expensive. If you are on the internet, you have to forward everything to your new site and
that can be a hassle. You may not know allthe links to your old site to have them forwarded
to your new one.
Step 2:Registering your business name
Firstthing you have to do is to make sure no one is using the name you have picked out. Itsimportantto register your business name because if you dont, someone else could registerit
and you would lose the rightto use that name. First, checkthe web to see if someone else has
registered your chosen business name in your state. You can find your state's Secretary of
State office and locate the business name registration area on your state's website. Most
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LEGALASPECTS
The following is an outline of some ofthe areas which may be relevantto your business. The
listis notintended to be exhaustive.
Food safety
There must be comply with strict beverage safety legislation. Before you open, you must
register your business with the local authority environmental health department. Your local
environmental health officer will be able to give you advice and guidance as to what you
should installin your premises to make sure your operating areas are hygienic. You can find
out more about all aspects of beverage safety legislation on the Food Standards Agency
website.
Consumer protection
The Consumer Protection Act and Regulations made under it protect consumers from unfair
business practices. You can find out more on the Trading Standards Central website.
Clean Neighbourhoods andEnvironment Act
This legislation makes businesses responsible for clearing up any litter around their site that
has originated from their retail activities. For example, this would include take-away food or
drink packaging, empty crisp packets, sandwich wrappers and so on.
Employment matters
Anyone employing staff must comply with employment legislation. Major pieces of
legislation which you must be aware ofinclude:
y The NationalMinimum Wage Acty The Working Time Regulationsy The EmploymentRights Act
The Department forBusiness, Innovation & Skills (BIS) and Invest Northern Ireland offer a
range of guidance publications on many different aspects of employment legislation. These
include The no-nonsense guide to government rules and regulations for setting up your
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Furtherinformation and guidance leaflets on all aspects of health and safety are available on
the Health and Safety Executive (HSE) website and from yourlocal authority environmental
health department.
Fire safety
All employers must comply with fire safety regulations this means carrying out a fire risk
assessment at your premises and putting in place fire precaution measures. These could
include fire alarm systems and extinguishers as well as clearly signed escape routes. If you
have five or more employees your fire risk assessment must be written down. You're
responsible not only for the safety of your staff but also of anyone who might be on your
premises, like customers or suppliers. The Department for Communities and Local
Government (DCLG) has produced several helpful guides for businesses. You can download
these from the DCLG website. Information about fire regulations in Northern Ireland is
available on the Northern Ireland Fire and Rescue Service website.
The Law Society operates the Lawyers for yourBusiness Scheme which offers a free initial
consultation with a participating legal firm.
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CONCLUSION
Far from the commercialtea growing and marketing centers in the rest of India, the Kangra
tea region has a certain rustic charm. With its unique planting heritage and distinct cup
character, Kangra tea has great potential and yearns to be rediscovered and suitably valued.
The very pristine nature and limited production could yet be an advantage as tea buyers seekout this hidden treasure in the Himalayas. Speciality tea buyers in particular will revel in
exploring what may be termed the final frontier ofthe tea world: Kangra, one ofthe oldest,
yet newest of tea origins.The cause of Kangra tea has received strong support from theInstitute ofHimalayan Bioresource Technology (IHBT) at Palampur, a unit ofthe Council of
Scientific & Industrial Research (CSIR) of the Government of India. It provides R&Dservices to aid rejuvenation of neglected tea gardens in the region, tea husbandry, breeding of
high-yielding tea varieties, biotechnology for quality improvement and comprehensiveadvisory services to tea growers. IHBT research efforts have backed up the application for
Geographical Indication (GI) status for Kangra tea, and the institute has developed specifictechnologies for ready-to-drinkteas including tea concentrates for black and green tea.
When the cutomers and the consuners buy your product, they first see the quality thatit willsuitto my health or not. We are targeting the whole masses, HIMACHAL is also known for
its beauty. Every years many foreigners visitHIMACHAL, we will also focus upon them. To
open a business is the most crucial activity. Most of the people think that they have thecapability to take a better decision. Great ideas are always work rather than knowledge. Its
true until we dont face any such type of conditions, we cantlearn. Itis very difficultto read
the psychology ofthe people. No one born with special skills, it can be learnt by doing only.