A - Umng ED Proj.

TOPIC - MANUFACTURING OF PRESTRESSED CONCRETE POLES
USED FOR POWER TRANSMISSION AND TELECOMMUNICATION

LINES.

Submitted in partial fulfillment of the requirement for the award of degree of
Bachelor of Business Administration of Christ University, Bangalore-560029

Compiled By: -
Ms. Dilasha Sethi : 0911646
Mr. Umang Agarwal : 0911681

Under The Guidance of Professor :- Mrs. Bhama T.

DEPARTMENT OF MANAGEMENT STUDIES
CHRIST UNIVERSITY, BANGALORE
2010 2011

E.D. PROJECT

GUIDE CERTIFICATE

This is to certify that Dilasha Sethi (0911646) and Umang Agarwal (0911681), student of
BBA - B , IV
th
Semester at Christ University, Bangalore have completed their project on the
topic titled MANUFACTURING OF PRESTRESSED CONCRETE POLES USED
FOR POWER TRANSMISSION AND TELECOMMUNICATION LINES. under my
guidance and supervision.

This has not previously formed the basis of the award of any degree, diploma or other similar
title of recognition.

Place: Bengaluru
Date: 02
nd
February, 2011
Christ University, Bengaluru

Ms. Bhama T.
Class Coordinator, 4
th
BBA B

2010 2011

GUIDE CERTIFICATE

This is to certify that Dilasha Sethi (0911646) and Umang Agarwal (0911681), student of
BBA - B , IV
th
Semester at Christ University, Bangalore have completed their project on the
topic titled MANUFACTURING OF PRESTRESSED CONCRETE POLES USED
FOR POWER TRANSMISSION AND TELECOMMUNICATION LINES. under my
guidance and supervision.

This has not previously formed the basis of the award of any degree, diploma or other similar
title of recognition.

Place: Bengaluru
Date: 02
nd
February, 2011
Christ University, Bengaluru

Dr. Jain Matthew
Head of Department

2010 2011

TABLE OF CONTENTS
Declaration(PG 6)
Acknowledgement(PG 7)
Executive Summary(PG 8)
Chapter 1: Introduction(PG 9)
Profile of the entrepreneurs (name, education, background/experience , age,
gender)
Nature of Business (Manufacturing /Services/Trading/Agency/Franchise)
Size of Unit (Small Scale/Medium Scale/Large Scale)
Legal ownership pattern (Company/Partnership/Cooperative/Trust)
Organisation Structure/Hierarchy
Proposed Product information (product description)
Chapter 2: Industry Analysis (past 5 years) (PG 20)
Government Policy & Incentives regulating the industry
Expected Industry Growth Rate
SWOT Analysis of Industry
Competitors Analysis
Demand Forecasting and Estimation (Region wise & Product wise)
Chapter 3: Project Feasibility Study(PG 46)
Economic Viability (PG 46)
Market Potential & Demand Pattern
Domestic and International Market
Market- Segmentation(Basis of segmentation), Targeting, Positioning Marketing
Plan 7 Ps
Technical Viability(PG 51)
Nature of Technical know-how or manufacturing process
Source of Technology (Indigenous/Imported)
Cost of Acquisition of Technology (Development/Purchase/Licensing)
Actual Production
New capacities under considerations
Human Resource Requirements at different levels (Administrative /Technical
Staff)
Nature of Inputs/Raw Materials
Sources of Raw Materials /Suppliers
Financial Viability(PG 58)
Total investment (Working Capital & Fixed Capital) Analysis
Source of Finance (own & external -collateral , non collateral)
Cost of Capital & Repayment Period
Financial Analysis
- Break Even Analysis
- Profitability Statement for 10 years
- Projected Balance Sheet (10 years)
- Pay Back Period
Chapter 4: Implementation Schedule(PG 89)
Chapter 5: Conclusion(PG 91)
Chapter 6: Bibiliography(PG 92)

DECLARATION

We therefore declare that the Entrepreneurship Development Project is a record of a
research carried out by us under the guidance of Mrs. Bhama T. , Class Co-ordinator of
IVth Semester BBA B, Department of Management Studies, Christ University,
Bangalore.

We further declare that the project done by us is purely original and has not been
previously formed on the basis of the award of any degree, diploma or other similar title
of recognition.

This is a record of bona fide and original work submitted by us in partial fulfillment of
the requirements for the award of degree of Bachelor of Business Management.

Place :- Christ University, Bangalore

Date :- 02
nd
February, 2011

Project compiled and completed by:-

Dilasha Sethi - 0911646

Umang Agarwal - 0911681

We would like to express our sincere gratitude to all those who have been instrumental
in the preparation of our Entrepreneurship Development Project.

We wish to specially acknowledge our project mentor Mrs. Bhama T., a senior faculty
member of Department of Management Studies, Christ University for her constant
guidance and support throughout the project or else it wouldnt have been successful.

I would also like to extend our gratitude and heartfelt thanks to Mr. Jain Mathew, our
Head of the Department and Mrs. Jyothi Kumar, our Academic Coordinator for giving
me this opportunity to carry out the project. Our project would not have been a
complete one without their continued support and keen guidance.

We would like to thank Dr. (Fr). Thomas. C. Mathew, Vice Chancellor and Dr. Jain
Mathew, HOD, for their encouragement.

We would also like to thank Mr. Anurag Agarwal for sharing his experience with us in
this Industry as he possesses a good amount of knowledge in the construction of
Concrete Poles.

At last we would also like to thank our parents and friends for their moral support.

ACKNOWLEDGEMENT
Thank You,
Dilasha Sethi 0911646
Umang Agarwal 0911681

PLAN FOR MANUFACTURE

OF

PRESTRESSED CONCRETE POLE
BY

SAMARTHA TECHNOLOGIES PRIVATE
LIMITED

FACTORY ADITYAPUR, JAMSHEDPUR

REGISTERED OFFICE KADMA, JAMSHEDPUR

SAMARTHA TECHNOLOGIES PRIVATE LIMITED is setting up one
Prestressed Concrete Pole Unit of a Capacity of 1,00,000 Pcs. p.a. at Adityapur,
Jamshedpur-831006, District East Singhbum, State Jharkhand.

The Unit is being promoted by Mr. Umang Agarwal and Miss. Dilasha Sethi who are
well educated and are belonging from a well to do business family. The factory will
be established in Adityapur Industrial Area of Jamshedpur and its registered office
will be in Kadma, Jamshedpur which is located at a distance of 8 kms from factory.

The size of the business unit is a small scale and it will be a Partnership form of
Business in which there will be only two partners who will both invest equally to
some extent in the business itself and the remaining amount of money will be
sanctioned by the Bank who is keen to invest in our Project seeing the credit
worthiness of the partners and feasibility of the Project.

The main reason why we have chosen this sector to start our business is that the
Project is feasible. There is a lot of demand of Prestressed Concrete Poles in the
Eastern Part of India especially for the initiative of the Government to promote
electricity and communication lines in the vast rural sector of Jharkhand, Bihar and
Orissa States. The suppliers for these poles are very less in number throughout the
country and they are basically situated in states of West Bengal and Maharashtra
from which the Government, Public Sector Units like NTPC, BSNL etc. and Private
Sector Companies like Bajaj Electricals have to buy and also pay the transportation
cost which increases the cost of poles. Another reason is that there is limited number
of suppliers in the entire three states and there is no manufacturing unit of these poles
in the Industrial Hub of Jamshedpur. So, overall the project is very much feasible and
profitable in this upcoming Industry.

Executive Summary

Due to the advantage of P.C Pole against wooden and steel poles as they being
corrosion resistant, low in weights, low in price and having long durability, scope of
these poles has grown rapidly amplifying its demand.

Project At A Glance

1. NAME OF UNIT : SAMARTHA TECHNOLOGIES PRIVATE LIMITED

2. CONSTITUTION : PRIVATE LIMITED COMPANY (PARTNERSHIP)

3. PROMOTERS : Mr. Umang Agarwal
Miss. Dilasha Sethi

4. NATURE OF PROJECT : Prestressed Concrete Pole Unit

5. PROJECT COST :
Rs. In Lacs
Land & Land Development 51.00
Civil Construction 30.00
Plant & Machinery 44.00
Auxiliary Machinery 18.00
Laboratory Equipments 3.00
Furniture & Fixtures 3.00
Preliminary, preoperative and
Interest during Construction Period 3.00
---------
152.00
Margin for Working Capital 55.00
---------
207.00

6. MEANS OF FINANCE : Rs. In Lacs

Promoters Contribution (50:50) 129.00
Term Loan from Financial Institution 78.00
--------
T O T A L 207.00
---------

7. DEBT EQUITY RATIO (APPROX) : 0.604:1.000

51
30
44
18
3 3 3
55
0
10
20
30
40
50
60
Project Cost
Project Cost

Means of Finance
Promoter's Contribution
Term Loan from Financial
Institutions

About the Industrial Area(Adityapur, Jamshedpur)

Quick Facts:
AIADAADITYAPUR INDUSTRIAL AREA DEVELOPMENT AUTHORITY
Control Area-
33,970 acres
(53 sq. miles)
Total allotted land
2609.79 acres
Plots
1365
Sheds
142
Direct Employment
(includes 11,550 locals & tribals) 27,900

Average Annual Production
Rs.3,550 crores
Adityapur Industrial Area Development Authority (AIADA) caters to the needs of industries
setup in its controlled area in Adityapur (Jharkhand), and is striving to excel as a customer
focussed knowledge-based organization through its innovative practices.

CHAPTER-1INTRODUCTION

1) PROFILE OF THE ENTREPRENEURS :-

a) Mr. Umang Agarwal, S/o. Mr. Manoj Agarwal aged about 22 years, is a resident of
Kadma, Jamshedpur - 831005. He is having an excellent educational background of
B.A. (Honours) in Business Management from Sheffield Hallam University with
achievements like The Outgoing Best Student of 2008-2009 batch from his
school. His Father is doing business since more than 25 years and he got the
business experience from his father and other family members during his education
phase.

b) Miss. Dilasha Sethi, D/o. Mr. Binod Kumar Sethi aged about 19 years, is a resident
of Surat, Gujarat. She has completed her B.B.A. from Christ University, Bangalore.
Her father is also a businessman and also she has gained some experience in
business field from her father during the time of her education.

2) NATURE OF BUSINESS :-

The Nature of Business is Manufacturing of Prestressed Concrete Pole mainly Used for
Power Transmission and Telecommunication Lines. There are multiples uses for this product
as it is used for carrying electricity/power ditribution and plus in these poles one can fix up
halogen lightings lamp to provide lights and signals. But since there is a lot of demand of
Prestressed Concrete Poles in the Eastern Part of India especially for the initiative of the
Government to promote electricity and communication lines in the vast rural sector of
Jharkhand, Bihar and Orissa States, our main supply of the concrete poles are for these two
sole reasons. The suppliers for these poles are very less in number throughout the country and
they are basically situated in states of West Bengal and Maharashtra from which the
Government, Public Sector Units like NTPC, BSNL etc. and Private Sector Companies like
Bajaj Electricals have to buy and also pay the transportation cost which increases the cost of
poles. Also, there is limited number of suppliers in the entire three states and there is no
manufacturing unit of these poles in the Industrial Hub of Jamshedpur.

However, Prestressed Concrete Poles were developed to meet the expanding need of a
supporting structure for; street, highway and area lighting, athletic lighting, signs, overhead
power distribution and power transmission as well as power substations and traffic signals.
Prestressed Concrete Poles are safe for the environment, require no maintenance and have a
life of fifty or more years.

3) SIZE OF UNIT :-

The business is of a Small Scale in terms of Size of Unit.

4) LEGAL OWNERSHIP PATTERN :-

The legal ownership pattern to be followed is on an equally Partnership basis in the
form of a Private Limited Company.

Important elements of partnership are :

(1) Association of 2 or more persons
(2) Existence of contract
(3) Carrying on a business
(4) Sharing of Profits
(5) Mutual Agency

We are involved in actual/active type of partenership where the partners are actively
involved in the business and business relations and other aspects of the partnership
firms.

5) ORGANIZATION STRUCTURE :-

Since it is a small scale business unit, therefore no particular organization structure is
to be followed. If any structure has to be followed then it would be basically a line
structure.
This is the sort of structure that allows for easy decision making, and also very
informal in nature. They have fewer departments, which makes the entire organization
a much decentralized one therefore line structure is apt for Samartha Pvt. Ltd.

6) PROPOSED PRODUCT INFORMATION :-

Prestressed Concrete Poles were developed to meet the expanding need of a
supporting structure for; street, highway and area lighting, athletic lighting, signs,
overhead power distribution and power transmission as well as power substations and
traffic signals. Prestressed Concrete Poles are safe for the environment, require no
maintenance and have a life of fifty or more years. Every Prestressed Concrete Pole is
an engineered product designed for each specific application and produced under rigid
standards of quality. Prestressed Concrete Poles require no painting, will not rust, and
are impervious to sunlight (ultraviolet radiation), chemicals (fertilizers, oils, etc.),
animals and insects (woodpeckers, termites, etc.) and do not require ground line
treating. These Poles are classified by their ultimate capacity to sustain a horizontal
load applied at a point two feet below the tip.

Prestressed concrete poles were developed to offer a cost effective, permanent
solution for the pole industry. From lighting, surveillance and utility markets to
structural and specialty uses. Unlike wood and steel, we have the ability to color our
concrete without the use of paint therefore providing a permanent, maintenance free
solution. Combine our endless array of colors with an expansive selection of exposed
aggregate finishes, and Samartha Pvt. can provide you with a structurally sound,
architectural pole that will enhance your project.

Prestressed concrete is a method for overcoming concrete's natural weakness in
tension. It can be used to produce beams, floors or bridges with a longer span than is
practical with ordinary reinforced concrete. Prestressing tendons (generally of high
tensile steel cable or rods) are used to provide a clamping load which produces a
compressive stress that balances the tensile stress that the concrete compression
member would otherwise experience due to a bending load. Traditional reinforced
concrete is based on the use of steel reinforcement bars, rebars, inside poured
concrete.

CHAPTER 2

Industry Analysis (past 5 years)

SWOT ANALYSIS

Strenghts

Cost Effective

Permanent solution for the pole industry

Unlike wood and steel, we have the ability to color our concrete without the use of
paint therefore providing a permanent, maintenance free solution.

Require no painting, will not rust, and are impervious to sunlight (ultraviolet
radiation), chemicals (fertilizers, oils, etc.), animals and insects (woodpeckers,
termites, etc.) and do not require ground line treating.

These Poles are classified by their ultimate capacity to sustain a horizontal load
applied at a point two feet below the tip.

From lighting, surveillance and utility markets to structural and specialty uses.

No competitors nearby as this will be the only manufacturing firm producing
prestressed concrete poles for eastern states of India.

Also, high demand in these states for the product due to the initiative of the
Jharkhand, Bihar and Orissa States.

Promote rural development

Various uses and scope of the product.

Project is very feasible as concrete poles will be easily sold due to its varius use and
thus highly profitable.

Incentives and policies of the government to support the business as it is small scale
and novice.

The industry cannot have a negative profit or no demand, as the use of concrete poles
is kind of necessity.

Weakness

Novice promoters

No experience before

The promoters have no background with advanced science knowledge of physics or
mechanics which is needed for the prestressed concrete poles manufacturing.

High cost of setting up the business.

New business always involves risk at the start

Since the product will be used for the public areas and so any fault or defect will
doom the companys reputation.

First ever such business to open up in eastern India(Jamshedpur)

The area where the business is set up does not lie in SEZ.(specialized economic zone)

Oppprtunities

Since, high demand in East Indian states for the product due to the initiative of the
Jharkhand, Bihar and Orissa States.

First ever such business to open up in eastern India(Jamshedpur)

Opportunity of building up reputation in India for the sole manufacturer of product in
east India.

To expand business nationwide.

To trade nationally as well as internationally.

There is a vast scope for growth of the company in future fue to high demands

No nearby competitors located around Jamshedpur to manufacture these products

Threats

There can be no support from the government.

People not purchasing the poles due to the novice reputation of business

High risk as it is a new Industry.

New competitor moving into the area.

High corruption in Eastern India and lot of political influence.

There is no proper law and order in the state of Jharkhand.

Government Policy and Incentives

Special emphasis on the industrial development of backward, tribal and hilly areas has been
the concern of the Government of India expressed in all the Five Year Plans and industrial
policy statements. Realizing that backward areas development is a long-term process, several
committees were appointed to identify the criteria for identifying backward areas and also to
suggest schemes to take up the Herculean task of balanced regional development.
The implementation of integrated rural development programme is one such attempt made by
the government to develop backward areas. The rural industries project programme initiated
by the Government of India was meant to develop small business units in select rural areas.
Though the backward area development programmes varied from state to state, they
cumulatively represented a significant package of incentives to attract industries in backward
areas. Some of the common incentives offered to small scale industries in rural areas are:

Land Every state offers developed plots for setting up of industries. The terms and
conditions may vary. Some states dont charge rent in the initial years, while some
allow payment in installments.

Power - Electricity is supplied at a concessional rate of 50 per cent, while some states
exempt such units from payment in the initial years.

Water is supplied on a no-profit, no-loss basis or with 50 per cent concession or
exemption from water charges for a period of 5 years.

Sales Tax - In all union territories, industries are exempted from sales tax, while some
states extend exemption for 5 years period.

Raw materials - Units located in backward areas get preferential treatment in the
matter of allotment of scarce raw materials like cement, iron and steel etc.

Finance - Subsidy of 10-15 per cent is given for building capital assets. Loans are
also offered at concessional rates.

Industrial estates - Some states encourage setting up of industrial estates in
backward areas.

Tax holiday - Exemption from paying taxes for 5 or 10 years is given to industries
established in backward, hilly and tribal areas.

To sum up, it may be stated that the small business sector in India is getting the support of
government through various institutions in different forms for different purposes. Despite
special attention being given to backward areas, it is observed that imbalances in
development are still there. There is a need to develop infrastructural facilities in these areas,
as no amount of subsidies or concessions can overcome the natural handicaps caused by a
lack of such facilities.

SUPPORT MEASURES AND PROGRAMMES

Keeping in view the contribution of small business to employment generation, balanced
regional development of the country, and promotion of exports, the Government of Indias
policy thrust has been on establishing, promoting and developing the small business sector,
particularly the rural industries and the cottage and village industries in backward areas.
Governments both at the central and state level have been actively participating in promoting
self-employment opportunities in rural areas by providing assistance in respect of
infrastructure, finance, technology, training, raw-materials, and marketing. The various
policies and schemes of Government assistance for the development of rural industries insist
on the utilization of local resources and raw materials and locally available manpower. These
are translated into action through various agencies, departments, corporations, etc., all
coming under the purview of the industries department. All these are primarily concerned
with the promotion of small and rural industries.
Some of the support measures and programs meant for the promotion of small and rural
industries are discussed in the next pages.

National Bank for Agriculture and Rural Development (NABARD)

NABARD was setup in 1982 to promote integrated rural development. Since then, it has been
adopting a multi-pronged, multi-purpose strategy for the promotion of rural business
enterprises in the country. Apart from agriculture, it supports small industries, cottage and
village industries, and rural artisans using credit and non-credit approaches. It offers
counseling and consultancy services and organizes training and development programs for
rural entrepreneurs.

The Rural Small Business Development Centre (RSBDC)
It is the first of its kind set up by the world association for small and medium enterprises and
is sponsored by NABARD. It works for the benefit of socially and economically
disadvantaged individuals and groups. It aims at providing management and technical support
to current and prospective micro and small entrepreneurs in rural areas. Since its inception,
RSBDC has organized several programs on rural entrepreneurship, skill upgradation
workshops, mobile clinics and trainers training programs, awareness and counseling camps in
various villages of Noida, Greater Noida and Ghaziabad. Through these programs it covers a
large number of rural unemployed youth and women in several trades, which includes food
processing, soft toys making, ready-made garments, candle making, incense stick making,
two-wheeler repairing and servicing, vermicomposting, and non-conventional building
materials.

National Small Industries Corporation (NSIC)

This was set up in1955 with a view to promote aid and foster the growth of small business
units in the country. This focuses on the commercial aspects of these functions.
Supply indigenous and imported machines on easy hire-purchase terms.
Procure, supply and distribute indigenous and imported raw materials.
Export the products of small business units and develop export-worthiness.
Mentoring and advisory services. Serve as technology business incubators.
Creating awareness on technological upgradation.
Developing software technology parks and technology transfer centers.
A new scheme of performance and credit rating of small businesses is implemented through
National Small Industries Corporation (NSIC) with the twin objectives of (i) sensitizing the
small industries about the need for credit rating and (ii) encouraging the small business units
to maintain good financial track record. This is to ensure that they score higher rating for
their credit requirements as and when they approach the financial institutions for their
working capital and investment requirements.

Small Industries Development Bank of India (SIDBI)

Set up as an apex bank to provide direct/indirect financial assistance under different
schemes, to meet credit needs of small business organisations.

To coordinate the functions of other institutions in similar activities.

Contd:
The National Commission for Enterprises in the Unorganised Sector
(NCEUS)

The NCEUS was constituted in September, 2004, with the following objectives:
To recommend measures considered necessary for improving the productivity of
small enterprises in the informal sector.
To generate more employment opportunities on a sustainable basis, particularly in the
rural areas.
To enhance the competitiveness of the sector in the emerging global environment.
To develop linkages of the sector with other institutions in the areas of credit, raw
materials, infrastructure, technology upgradation, marketing and formulation of
suitable arrangements for skill development. The commission has identified the
following issues for detailed consideration:
o Growth poles for the informal sector in the form of clusters/ hubs, in order to
get external economic aid.
o Potential for public-private partnerships in imparting the skills required by the
informal sector.
o Provision of micro-finance and related services to the informal sector.
o Providing social security for the workers in the informal sector.

Rural and Women Entrepreneurship Development (RWED)

The Rural and Women Entrepreneurship Development programme aims at promoting a
conducive business environment and at building institutional and human capacities that will
encourage and support the entrepreneurial initiatives of rural people and women. RWE
provides the following services:
Creating a business environment that encourages initiatives of rural and women
entrepreneurs.
Enhancing the human and institutional capacities required to foster entrepreneurial
dynamism and enhance productivity.
Providing training manuals for women entrepreneurs and training them.
Rendering any other advisory services.

World Association for Small and Medium Enterprises (WASME)

It is the only International NonGovernmental Organisation of micro, small and medium
enterprises based in India, which set up an International Committee for Rural
Industrialisation. Its aim is to develop an action plan model for sustained growth of rural
enterprises.
Apart from these, there are several schemes to promote the non-farm sector, mostly initiated
by the Government of India. For instance, there are schemes for entrepreneurship through
subsidised loans like Integrated Rural Development Programme (IRDP), Prime Minister
Rojgar Yojana (PMRY), schemes to provide skills like Training of Rural Youth for Self
Employment (TRYSEM), and schemes to strengthen the gender component like
Development of Women and Children in Rural Areas (DWCRA).
There are schemes to provide wage employment like Jawahar Rojgar Yojana (JRY), food for
work etc., on rural works programmes to achieve the twin objectives of creation of rural
infrastructure and generation of additional income for the rural poor, particularly during the
lean agricultural season. Last, but not the least, there are schemes for specific groups of
industries such as khadi, handlooms and handicrafts.

Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
To make the traditional industries more productive and competitive and to facilitate their
sustainable development, the Central Government set up this fund with Rs. 100 crores
allocation to begin within the year 2005. This has to be implemented by the Ministry of Agro
and Rural Industries in collaboration with State Governments. The main objectives of the
scheme are as follows:
To develop clusters of traditional industries in various parts of the country;
To build innovative and traditional skills, improve technologies and encourage public-
private partnerships, develop market intelligence etc., to make them competitive,
profitable and sustainable; and
To create sustained employment opportunities in traditional industries.
The District Industries Centers Programme was launched on May 1, 1978, with a view to
providing an integrated administrative framework at the district level, which would look at
the problems of industrialization in the district, in a composite manner. In other words
District Industries Centers is the institution at the district level which provides all the services
and support facilities to the entrepreneurs for setting up small and village industries.
Identification of suitable schemes, preparation of feasibility reports, arranging for credit,
machinery and equipment, provision of raw materials and other extension services are the
main activities undertaken by these centers.
Broadly DICs are trying to bring change in the attitude of the rural entrepreneurs and all other
connected with economic development in the rural areas. Even within the narrow spectrum,
an attempt is being made to look at some of the neglected factors such as the rural artisan, the
skilled craftsman and the handloom operator and to tune up these activities with the general
process of rural development being taken up through other national programs. The DIC is
thus emerging as the focal point for economic and industrial growth at the district level.

INDUSTRIAL POLICY(AIADA):

The Industrial Policy aims at making Jharkhand one of the most preferred destinations for
investment, both from inside and outside the country and to ensure accelerated
implementation of infrastructure related projects, increasing employment opportunities,
improving productivity, ensuring homogeneous and balanced development of all
Geographical regions of the State with emphasis on development of small, tiny and cottage
industries.
The broad policy objectives are elaborated as below:
(i) Optimal utilization of agro-climatic, mineral and human resources of the State.

(ii) To promote economic activities to ensure maximum capital investment in the State
with the objectives of increasing employment opportunities, improving standard of
living of people at large, specially the deprived and the down trodden sections of the
society and to ensure all round development of the State.

(ii) Identification of thrust areas and thrust zones to prioritize the sectors and categorization
of backward regions with respect to industrialization.

(iii) To develop the state of art technology and infrastructure so as to ensure planned and
accelerated industrial development.

(iv) To ensure Balanced Regional Development so as to prevent socio-economic distortions
due to backwardness of any region.

(v) To encourage and involve private sector participation in the process of planned and
rapid industrialization of the State.

(vi) To promote export of such items, in which the State holds advantage vis-a-vis other
States.

Government of Jharkhand

Jharkhand Industrial Policy 2001

Incentives for Quality Certification
Small Scale / Ancillary Industries would be encouraged to seek ISI / ISO certification. The
State Government shall facilitate for reimbursement of charges for acquiring ISO 9000 (or its
equivalent) certification to the extent of 75% of the cost subject to a maximum of Rs. 75000/-
in each case from the Central Government.
Purchase of ISO/ISI certified products will be given preference.
(vii) Revival of viable sick units.

(viii) Simplification of procedures and to ensure administrative and legal reforms so as to
provide hassle free sensitive administration and time bound effective disposal of
matters in a transparent manner.

(ix) To take steps to protect and promote rural handicrafts so as to conserve and enrich
cultural heritage, traditions and customs of the regions.

(x) To provide better development opportunities to Scheduled Castes, Scheduled Tribes,
Handicapped, Weaker Sections and Women and to ensure their participation in the
development process.

(xi) To promote research and development, technological upgradation and qualitative
improvement and utilization of state of art technology to improve product, production
Jharkhand State Industrial Policy 2001

FISCAL INCENTIVES

There is a dire need for the new born State of Jharkhand to accelerate industrialization in the
back ground of lost opportunities and non-realization of its industrial potential.

The types of incentives which are being offered are given below. Such incentives shall be
admissible only once to a unit, which comes into commercial production during the period
this policy remains effective:
1. Capital Investment Incentive
2. Captive Power Generating Subsidy
3. Interest Subsidy
4. Stamp Duty and Registration
5. Employment Generation Based Incentives
6. Special Incentives for Thrust Areas/ EOU and SC/ ST/ Women/ Ex-Servicemen and
Handicapped Persons.
7. Feasibility Study-Project Report Cost Reimbursement Subsidy
8. Pollution Control Equipment Subsidy
9. Incentive for Quality Certification

C
o

: CAPITAL INVESTMENT INCENTIVE
The capital investment incentive shall be admissible to small and medium scale industries.
The details of such incentives are as follows:

Sl.
No
.
Incentive Category
Maximum
Incentive (%)
Financial
Limit (Lakhs)
Special
Benefits
1 Capital
Investment
Incentive
(For Small &
Medium
Scale
Industries)
A
B
C
15
20
25
15
20
25
Additional 5%
incentive over
and above with
a cap of Rs. 5
lakhs in thrust
areas, 100%
Export
Oriented Units,
SC/ST
Entrepreneurs,
Women
Entrepreneurs,
Handicapped
persons and
Ex-servicemen
shall be
admissible.

CAPTIVE POWER GENERATING SUBSIDY

The Captive Power Generating subsidy admissible to new industries in various categories of
districts are as follows:

Sl.
No. Incentive Category
Maximum
Incentive
(%)
Financial
Limit
(Lakhs)
Special Benefits
1 Captive
Power
Generating
Subsidy
A
B
C
15
20
25
2.25
3.00
3.75
Additional 5%
incentive over and
above with a cap of
Rs. 0.75 lakhs in
thrust areas, 100%
Export Oriented
Units, SC/ST
Entrepreneurs,
Women
Entrepreneurs,
Handicapped persons
and Ex-servicemen
shall be admissible.

INTEREST SUBSIDY

The objecting of providing this subsidy is to bring down interest cost of industry for the
period an industry is most hard pressed. This subsidy is aimed to encourage industry to
continuous growth rather than stagnate and contribute its share of prosperity to the state.

The interest subsidy admissible to new industries shall be admissible in the following
manner on the interest actually paid to be financial institution/ banks on loans taken by such
new industry:
Sl.
No.
Incentive Category Maximum
Incentive
(%)
Financial Limit (Lakhs)
1 Interest
subsidy
A
B
C
25
50
60
The subsidy shall be limited to a
sum of Rs. 100 lakhs per annum
provided the total interest subsidy
shall not exceed 2% of the total
sales amount made in the State of
Jharkhand and/ or in course of
interstate sales as supported by the
certificate/ document issued by the
competent commercial tax
authority. This subsidy shall be
admissible for a period of 5 Years
of all categories of industries from
the date of commercial production.

STAMP DUTY AND REGISTRATION

An eligible industrial unit irrespective of its location will be entitled to exemption from
payment of 50% of Stamp Duty and registration fee paid for registration of documents
within the State relating to purchase/ acquisition of land and buildings for setting up of a
new unit.

EMPLOYMENT GENERATION BASED INCENTIVES

This incentive would be admissible to following industries:
All Khadi and Village industries
All farm based industries such as horticulture, floriculture, sericulture, medicinal
& aromatic plants based industries etc.
Forest based industries such as Shellac, Bamboo etc.
All workers/ laborers employed in such industries would be covered under Contributory
Group Insurance Scheme (CGIS), in which the State would pay 50% of the premium paid
by the employer against each such worker/ laborers. This incentive shall be admissible to
only such industries employing a minimum of fifty workers/ laborers.

FEASIBILITY STUDY-PROJECT REPORT COST REIMBURSEMENT SUBSIDY

The Industrial Units will be provided feasibility study-project report cost reimbursement
subsidy @50% of the cost incurred in preparation of such report subject to a ceiling of Rs.
50,000/-. Such feasibility study- project report shall have to be prepared by a recognized
consultant drawn from duly approved panel by the Industries Department. This subsidy shall
be admissible after the commencement of commercial production.

POLLUTION CONTROL EQUIPMENT SUBSIDY

Capital investment subsidy for installation of Pollution Control and monitoring equipment
shall be allowed on the certificate of the State Pollution Control Board about the necessity
for such installation. This incentive shall be admissible to new and existing industrial units.
This subsidy will be 20% of the cost of the pollution control and monitoring equipment
subject to ceiling of Rs. 20 lakhs, in addition to the capital investment subsidy admissible to
such industrial unit. This would be in addition to any other incentive available from any
other source. This subsidy will be paid only after such unit produces supporting documents
for the expenses incurred along with the certificate of a Chartered accountant.

INCENTIVE FOR QUALITY CERTIFICATION

Small Scale/ Ancillary Industries would be encouraged to seek ISI/ ISO certification. The
State Government shall facilitate for reimbursement of charges for acquiring ISO-9000 (or
its equivalent) certification to the extent of 75% of the cost subject to a maximum of Rs.
75,000/- in each case from the Central Government.

MEGA UNITS:

Special Packages shall be formulated for the new projects with an investment of more than
Rs. 50 crores on case to case basis through direct negotiation with prospective investors.
Labor Policies
The Labor Policies for Small Scale Industries is governed by comprehensive laws. The
following laws and policies are applicable for Small Scale Industries in India:
Apprentices Act, 1961
The Bidi and Cigar Workers (Conditions of Employment) Act, 1966
Bonded Labor System (Abolition) Act, 1976
Child Labor (Prohibition & Regulation) Act, 1986
The Children (Pledging of Labor) Act, 1933
The Contract Labor (Regulation & Abolition) Act, 1970
The Employees Provident Funds and Misc. Provisions Act, 1952
Employees State Insurance Act, 1948
Employers Liability Act, 1938
Employment Exchange (Compulsory Notification of Vacancies) Act, 1959
Equal Remuneration Act, 1976
The Factories Act, 1948
The Industrial Disputes Act
The Industrial Employment (Standing Orders) Act,1946
The Inter-state Migrant Workmen (Regulation of Employment and Conditions of
Service) Act, 1979
Labor Laws (Exemption from Furnishing Returns & Maintaining Registers by Certain
Establishments) Act, 1988
Maternity Benefit Act, 1961
The Minimum Wages Act, 1948
The Payment of Bonus Act, 1965
The Payment of Gratuity Act, 1972
The Payment of Wages Act, 1936
The Sales Promotion Employees (Conditions of Service) Act, 1976, The Shops and
Establishments Act, 1953, The Trade Union Act, 1926, Workmens Compensation
Act, 1923 and The Weekly Holidays Act, 1942
Foreign Direct Investment Approval
NRI Investment Approval
Foreign Exchange Regulations
Environmental Regulations
Income Tax
Corporate Tax
Excise Duty
Sales Tax
Quality Standards
Land Use Regulations
The Industries Development and Regulation (IDR) Act, 1951
The Factories Act
The Industrial Establishment Act
The Minimum Wages Act
The Payment of Wages Act
Employees Provident Fund Act
Employees Stock Option Act
Workmen's Compensation Act
Employment of Women
Employment of Children

SSI Regulations
Payment of Gratuity Act
Employees State Insurance Act
The Payment of Bonus Act
The Shops and Establishments Act
The Trade Union Act, The Air and Water Pollution Act, Environmental Protection
Act, The Industrial Disputes Act, and Delayed Payment Act

NOTE: SINCE ADITYAPUR AREA IS NOT UNDER THE SEZ THAT
IS, SPECIALISED ECONOMIC ZONE, THE INCENTIVES ARE
MAINLY PROVIDED BY THE STATE GOVERNMENT TO THE
SMALL SCALE INDUSTRIES.

POWER OF THE STATE GOVERNMENT

Notwithstanding anything contained in the foregoing paragraphs of the industrial policy, the State
Government by issuance of notification in the official gazette may amend or withdraw any of the
provisions and/ or the schemes mentioned herein above.

If any difficulty arises in giving effect to provisions of the industrial policy and/ or if any dispute arises
about the interpretations of any provisions of the said policy, the same shall be referred to the Chief
Minister through Chief Secretary and thereon the decision taken shall be final.
Demand Forecasting and Estimation(Region wise and Product wise)

Region Wise

RURAL ELECTRIFICATION

Jharkhand, Bihar, Uttar Pradesh, Orissa, Uttaranchal, Madhya Pradesh etc. are some of the
states where significant number (more than 10%) of villages are yet to be electrified.
Number of Villages (1991 Census) - 593,732
Villages Electrified (30 May 2006) - 488,173
Village level Electrification % - 82.2%
Power Grid has been assigned the job for execution of rural electrification in 68 districts
covering 87,300 villages at an estimated cost of about Rs. 9,400 Crore. Cumulatively till
March 2008, Power Grid has established infrastructure for electrification of 22,082 villages
including 3 lakh BPL (Below Poverty Line) connections under rural electrification program.

As stated earlier due to the government initiative to develop the eastern Indian states by
actions such as to promote electricity and communication lines in the vast rural sector of
Jharkhand, Bihar and Orissa States, the prestressed concrete poles will be needed in huge
amounts by the states for such developments. The concrete poles manufacturers in India are
in states of Uttar Pradesh, Madhya Pradesh, New Delhi, Haryana, Karnataka, Gujarat,
Maharashtra, but such manufacturing industry has not been manufactured yet in the state of
Jharkhand.

And so for the governments initiative to promote electricity and communication lines the
eastern states needed the concrete poles which would have to be imported by the states that
have the concrete manufacturing industry which the state of Jharkhand would have to
purchase at a higher price than it really is. Therefore, starting a business of manufacturing
quality prestressed concrete poles in Adityapur industrial area in Jharkhand is advantageous
to both the business and the rural areas in eastern states for which the concrete poles would
be manufactured and sold in much less price than it would have got it from the other states.
Hence the demand for the prestressed concrete poles will be high in the region.

Product Wise

Since The Indian Power Sector has witnessed a strong all round revival in the last five years
with growth rate averaging at about 6 percent per year, these concrete poles will have a high
demand for need of a supporting structure for; street, highway and area lighting, athletic
lighting, signs, overhead power distribution and power transmission as well as power
substations and traffic signals. The construction possibilities of prestressed are as vast as
those of ordinary reinforced concrete. Typical applications of prestressing in building and
construction are:

Structural components for integration with ordinary reinforced concrete construction,
e.g. floor slabs, columns, beams.

Structural components for bridges

Water tanks and reservoirs where water tightness is of paramount importance

Construction components eg piles, wall panels, frames, window panels, power poles,
fence posts

Construction of relatively slender structural frames

Electrification prestressed concrete poles for transmission lines

Competitors Analysis

Though nearby the Samartha industry, there are no other competitors to create a threat for the
company by competition. However, seeing a lot of demand over this region and seeing the
feasibility of such project and its profitability, many entrepreneurs are likely to pool in those
areas and create competition and thus create a threat for the company.
Other than that the competitors will try to enhance the product better than ours and diversify
its product to attract customers therefore the quality, reasonability and the features and
variety of the product need to be kept in mind in order to survive with the competitors.
With this, the competitors will apply better pricing strategies to penetrate the market for its
profit and promote its product to the maxim. Therefore, there is a constant need to evaluate
the pricing and promotional strategies to stand up to the expectations of the customers with
respect to the competitors present in the external environment.
To identify the strengths and weaknesses of the competitors company is an important aspect
in developing a competitors analysis in order to enhance the company better than its
competitors.

Expected Industry Growth Rate

Every Indian believes that India would become a developed country by 2020.Thanks to our
beloved Ex-President of India Dr. Abdul Kalam Azad for cultivating his vision in our minds.
Amongst some of the core areas which we need to focus in the next decade to become a
developed nation is also the Infrastructure, this is one of the most discussed topic in the last
couple of years. Infrastructure means providing best environment like roadways, airports,
bridges, clean water, electricity, sewages etc. to the citizens of a country.
This not only improves the quality of living but also bring more foreign investments to the
country. Infrastructure is like fuel for the fast growing nation like India. According to
BusinessWeek "The infrastructure deficit in India is so critical that it could prevent India
from achieving the prosperity that finally seems to be within its grasp. Without reliable power
and water and a modern transportation network, the chasm between India's moneyed elite and
its 800 million poor will continue to widen, potentially destabilizing the country".
Since there will be a lot of building up of infrastructure like bridges, roadways and better
power transmission and provision of electricity, manufacturing of prestressed concrete poles
industry will boom in the future and will grow at a good rate because of its demand.

CHAPTER 3-Project Feasibility Study

Economic Viability:-

Market Potential & Demand Pattern

Prestressed Concrete Poles have totally replaced steel and wooden poles now. There are a
number of advantages of using Prestressed Concrete Poles as against its proxies. First of all
these poles are corrosion resistant, they are light weight, are economical and have long
durability.

Due to the advantages mentioned above, the market span for these poles has grown swiftly.
The major use of these poles is in the area of power distribution system. With central and
state government emphasis on rapid electrification of rural areas and with private sectors
indulging in expansion of telecommunication lines, the demand for Prestressed Concrete
Poles is found to increase substantially in the years to come. In addition, replacement of
existing steel and wooden poles, which is an ongoing process, will lead to a positive
increase in demand.

Domestic & International Project :-

The major demand for this Product is in the Domestic Market.

We dont plan to go into export business to sell the poles in the International Market
due to the availability of major competitors for these poles in the International
Market.

Therefore, we are basically targeting the Domestic Market only and the buyers of the
product are within the geographical boundary limits of our country.

In the Domestic Market, the major demand for these poles is in the Eastern part of
India so if we go into selecting a particular area then we would target only the states
of Eastern India.

The major buyers for the poles would be the Government, Public Sector Enterprises
and some Private Companies as well.

THE MAIN BUYERS OF P.C.POLES IN THE STATE AREA ARE:

i) Through NTPC, NHPC & PGCIL. Main sub-contractors are GETPL, Bajaj
Electricals, Tata Power, and Maytas Infrastructure.

ii) Distribution companies of state (CESU, WESCO, NESCO & JUSCO.).

iii) Various Central and State Government projects.

iv) Industrial Growth Centers and Complexes.

v) Large and Medium Scale Industries for the factory and colonies.

With rural electrification gaining momentum through Government sponsored RAJIV
GANDHI GRAMEEN VIDYUTIKARAN YOJANA Scheme and large new projects taken
up for implementation, there is huge demand for these poles within state. Since there are not
many units in the state manufacturing this item, there is certainly very good scope for
marketing this within the state. With adequate marketing efforts there is a simple scope to sell
Prestreseed Concrete Poles outside the state also.

The positioning for the manufacturing of the poles would be setup in an Industrial area of
Jamshedpur and the warehouse for it will be within the factory itself. The company will be in
a tie up with a transport company to deliver the poles to the desired area. Mainly these poles
will be delivered to rural areas both within and outside the state as per the requirements.

MARKETING PLANS 7 PS

1. PRODUCT PRESTRESSED CONCRETE POLES

2. PRICES RS. 1800 for 8 meter POLE
RS. 2600 for 9 meter POLE

3. PROMOTION The Government, Public Sector Enterprises and some Private
Companies will be the major buyers for this Product. Therefore there is no need for
advertising this product and spending huge money on it. Quotations for this can be mailed to
interested parties and Tenders regarding this can be acquired.

4. PLACE The main areas for setting up of the Poles would be for the rural areas as a
part of development initiative for distribution of electricity throughout the villages.

5. PACKAGING The product that is the concrete pole is not retail or a consumer good. It
is an Industrial form of product so no special packaging cost is to be incurred in the
manufacturing of concrete poles.

6. POSITIONING Our Company will benefit due to Economies Of Scale and we will
provide the concrete poles to the buyers at a reasonable price compared to manufacturers
from other states as they will sell the poles at higher prices by adding a huge amount of
Transportation cost to the poles. Moreover, Jamshedpur being a developed city has good
Transport facilities which are easily and locally available.

7. PEOPLE Labors which are required to work in the factory are available easily and
locally in a sufficient quantity so there is no need to call labors to work from outside area.

TECHNICAL VIABILITY :-

MANUFACTURING PROCESS

The steel moulds are properly cleaned, oiled and assembled and are kept in line. The 4 mm
diameter high tension steel wires are inserted through the moulds from the fix end to
tension end of anchor posts. The High Tension wires are then anchored at the fixed ends
and tension is applied at other end to all the wires. The steel stirrups, earthing wires & other
fixtures are fitted firmly as per specification. Then the concrete is prepared as per the
designed mix in a motorized mixing machine and poured into the moulds & vibrated by
high frequency vibrators to attain proper compaction in concrete. The moulds with concrete
are then kept for 72hrs and water cured. After green poles attain the desired strength the
prestressed is transferred to the pole by cutting the High Tension wire and demoulded. The
Prestressed Concrete Poles are transferred to the tanks by help of Gantry wheel and kept
under for deep water curing for 28 days and then transferred to the stock yard for delivery.

COURSE OF ACTION IN PRESTRESSED CONCRETE POLE
MANUFACTURE

FLOW DIAGRAM

Cleaning, Oiling and assembling of moulds.
Tensioning of wires and fitting up of stirrups, earthen wires
and other fixtures firmly.
Concrete is poured and vibrated by vibrators to attain
Proper compaction.
Mould with concrete left for water curing.

SOURCE OF TECHNOLOGY

The technology to be used in construction of prestressed concrete poles is indigenous in
nature. India has that type of technology to manufacture these poles as in other regions of
our country, these types of pole are being manufactured since a long back. Therefore there
is no particular need for importing the type of technology to manufacture the poles as
already the technology exists.

COST OF ACQUISITION OF TECHNOLOGY

There is a need to purchase the technology as steel moulds would be mainly required to
manufacture the concrete poles. The total estimated cost to purchase the entire technology
required in manufacturing process is around 65 lacs which includes the cost of plant and
machinery, auxiliary machinery as well as laboratory equipments. Later on as the year
progresses in manufacturing of poles, there would be more investment and expansion in the
cost of technology.

ACTUAL PRODUCTION

As for the beginning of the business production, we have decided to produce combined
1,00,000 units per annum. The number of units for 8 meter and 9 meter in length would be
produced as per the requirements of the market. In the early stages we would be producing
at 60% capacity level and at later stages we would be expanding our capacity levels to 70%
and 80% as well.

NEW CAPACITIES UNDER CONSIDERATION

The beginning capacity level would be at 60%. We are anticipating more demand for poles
in the next 5 year plans formulated by the Government. In this market in future, if the
number of manufacturers doesnt increase in the near future then it would be possible for us
to go under consideration for future expansion of poles at even greater capacity levels so
that the demand are consequently in match with the supply level.

HUMAN RESOURCE REQUIREMENTS AT DIFFERENT LEVEL

For efficient production, man power requirement, their qualifications and cost have been
determined as under :-

Designation Nos. Salary p.m. each Total Annual
Payment
Manager 2 20000 480000
Supervisor 5 6000 360000
Tensioning Worker 14 5000 840000
Demoulding Worker 20 5000 1200000
Rod Binding Worker 5 5000 300000
Casting Worker 35 5000 2100000
Numbering Staff &
Store Keeper
3 4000 144000
Other Unskilled
Labors
10 4000 480000
Watchman 3 4000 144000
Accountant 3 5000 180000
Office Staff 5 4000 240000
Total 105 6468000
Add :- Other Benefits and Staff Welfare @ 25% 1617000

Total Cost Rounded up to 8085000

ESTIMATION OF RAW MATERIALS REQUIREMENT :-

The total cost of raw material at 100% capacity utilization is estimated as under :-

Particulars Quantity Rate per Pcs
(In Rs. lacs)
Total Amount
Stone Chips
P.C.Pole (8mtrs) 60,000 0.0025 150.00
P.C.Pole (9mtrs) 40,000 0.00375 150.00
Cement
P.C.Pole (8mtrs) 60,000
0.0035
210.00
P.C.Pole (9mtrs) 40,000 0.00525 210.00
Sand
P.C.Pole (8mtrs) 60,000 0.0005 30.00
P.C.Pole (9mtrs) 40,000 0.00075 30.00
Wires
P.C.Pole (8mtrs) 60,000 0.007 420.00
P.C.Pole (9mtrs) 40,000 0.0105 420.00

SOURCES OF RAW MATERIALS :-

The basic raw materials required for manufacturing the poles are sand, cement, stone chips
and wires. All these raw materials are very well readily available in Jamshedpur as it is the
second largest Industrial city of India after Noida. The manufacturers or dealers of raw
materials are plenty in number itself in the Adityapur area where we are setting up the plant
for Prestressed Concrete Poles. We are also planning to have a tie up with the dealers or
manufacturers of raw materials after we send them the quotations regarding the quantity to
supplied for it and we will give order to those dealers or manufacturers who are willing to
supply the materials as and when required at the cheapest possibility rates so that we can
benefit because of low cost production and economies of scale.

FINANCIAL VIABILITY :-

Total Investment Analysis

This is the total breakup of the fixed as well as working capital analysis which is required by
our company to produce 1,00,000 units

PROJECT COST : Fixed Capital
Rs. In Lacs
Land & Land Development 51.00
Civil Construction 30.00
Plant & Machinery 44.00
Auxiliary Machinery 18.00
Laboratory Equipments 3.00
Furniture & Fixtures 3.00
Preliminary, preoperative and
Interest during Construction Period 3.00
---------
152.00
Margin for Working Capital 55.00
---------
207.00

51
30
44
18
3 3 3
55
0
10
20
30
40
50
60
Investment Analysis Cost Graph
Project Cost

Sources of Finance

As we have mentioned before that the total investment required for manufacturing of poles
estimated is 2 crores and 7 lacs of rupees. The cost for investment will be met in a 60:40 ratio
as 60% of the cost which comes up to near about 1 crore and 29 lacs will be met by the
partners. The partners have agreed to share the cost on an equal fifty-fifty basis. The
remaining 40% of the cost that is 78 lacs of rupees will be financed by the banks and
financial institutions at the rate of 11% p.a. . So, basically the source of finance is both owned
and external which means we are going for a collateral type of finance.

SOURCES OF FINANCE : Rs. In Lacs

Promoters Contribution (50:50) 129.00
Term Loan from Financial Institution 78.00
--------
T O T A L 207.00
---------

DEBT EQUITY RATIO (APPROX) : 0.604:1.000

Sources of Finance
Promoter's Contribution
Term Loan from Financial
Institutions

COST OF CAPITAL & REPAYMENT PERIOD

TERM LOAN - I
(Rs. in Lacs) Interest Rate 11%
2011 2012 2013 2014 2015 2016
FIRST QUARTER
Opening Balance 78.00 78.00 62.40 46.80 31.20 15.60
Repayment - 3.90 3.90 3.90 3.90 3.90
Closing Balance 78.00 74.10 58.50 42.90 27.30 11.70
Interest 2.15 2.15 1.72 1.29 0.86 0.47
SECOND QUARTER
Opening Balance 78.00 74.10 58.50 42.90 27.30 11.70
Repayment - 3.90 3.90 3.90 3.90 3.90
Closing Balance 78.00 70.20 54.60 39.00 23.40 7.80
Interest 2.15 2.04 1.61 1.18 0.75 0.35
THIRD QUARTER
Opening Balance 78.00 70.20 54.60 39.00 23.40 7.80
Repayment - 3.90 3.90 3.90 3.90 3.90
Closing Balance 78.00 66.30 50.70 35.10 19.50 3.90
Interest 2.15 1.93 1.50 1.07 0.70 0.25
FOURTH QUARTER
Opening Balance 78.00 66.30 50.70 35.10 19.50 3.90
Repayment - 3.90 3.90 3.90 3.90 3.90
Closing Balance 78.00 62.40 46.80 31.20 15.60 -
Interest 2.15 1.82 1.39 0.97 0.59 0.12
TOTAL REPAYMENT - 15.60 15.60 15.60 15.60 15.60
TOTAL INTEREST 8.58 7.94 6.22 4.50 2.90 1.19

2011 2012 2013 2014 2015 2016
Opening Balance
78.00 78.00 62.40 46.80 31.20 15.60
Total Repayment
- 15.60 15.60 15.60 15.60 15.60
Total Interest
8.58 7.94 6.22 4.50 2.90 1.19
Closing Balance
78.00 62.40 46.80 31.20 15.60 -

(Rs. In Lacs)
Name of the Assets
COST
Rate of
Depreciation
Depreciation
amount
Land & Land Development 51.00 0.00 0.00
Civil Works 30.00 0.10 3.00
Repayment
44.00 0.15 6.60
Interest
18.00 0.15 2.70
Opening Balance
3.00 0.15 0.45
Closing Balance 3.00 0.10 0.30
TOTAL 149.00 13.05
DEPRECIATION CHART AS PER COMPANIES ACT AS PER S. L. M.

FINANCIAL ANALYSIS :-

BREAK EVEN ANALYSIS

BREAK EVEN POINT

(Rs. In Lacs)

At 90%
Capacity
At 100%
Capacity
A) Income Receipt

1,524.39

2,136.92

B) Variable Cost

1,317.40

1,834.35

Interest on Working Capital Loan to Bank

13.20 13.20

1,330.60

1,847.55

c) Fixed Cost

Selling, Distribution and Office Expenses

48.00 52.00

Depreciation

13.05 13.05
Interest on Term Loan

4.50 -

65.55 65.05

D) CONTRIBUTION (A) - (B)

193.79 289.37

E) BREAK EVEN POINT (%) 33.83 22.48

PROFITABILITY STATEMENT FOR 10 YEARS

Year 2011

No.of months 12
Gross Sales

Domestic Sales 1020.00
(-) Excise Duty 77.65
Net Sales

942.35

Cost of Sales

i. Raw materials (indigenous) 874.80
ii. Misc Stores (indigenous) 13.50
iii. Diesel

13.50
iv. Direct Labour (Factory wages & salaries) 67.20
V Production overhead 14.20
Vi Depreciation 13.05
Vii Sub-total (i to vi) 996.25
Viii Add: Opening Stock-in-process 0.00

Sub-total (vii + viii) 996.25
x. Deduct: Closing Stock-in-process 0.00
xi. Cost of Production 996.25
xii. Add: Opening Stock of finished goods 0.00

Sub-total (xii + xi) 996.25
xiii. Deduct: Closing Stock of finished goods 90.00
xiv. Sub-total (Total Cost of Good Sold) 906.25

Selling, Distribution and Office Overhead 12.00
Cost Of Sales 918.25

Operating Profit before Interest 24.10
Interest @ 11% 8.58
Operating Profit after Interest 15.52
Profit before tax/loss 15.52
Provision for taxes @33.99% 5.28

Net Profit / Loss 10.24
Retained Profit 10.24

Year 2012

No.of months 12
Gross Sales

Net Sales

1319.29

Cost of Sales

iii. Diesel

15.75




Interest @ 11% 7.94


Year 2013

No.of months 12
Gross Sales

Net Sales

1507.76

Cost of Sales

iii. Diesel

18.00




Interest @ 11% 6.22


Year

2014

No.of months

12
Gross Sales

Domestic Sales

1650
(-) Excise Duty

125.61
Net Sales

1524.39

Cost of Sales

i. Raw materials (indigenous)

1166.4
ii. Misc Stores (indigenous)

18
iii. Diesel

18
iv. Direct Labour (Factory wages & salaries)

90
V Production overhead

25
Vi Depreciation

13.05
Vii Sub-total (i to vi)

1330.45
Viii Add: Opening Stock-in-process

0

Sub-total (vii + viii)

1330.45
x. Deduct: Closing Stock-in-process

0
xi. Cost of Production

1330.45
xii. Add: Opening Stock of finished goods

110

Sub-total (xii + xi)

1440.45
xiii. Deduct: Closing Stock of finished goods

110
xiv. Sub-total (Total Cost of Good Sold)

1330.45

Selling, Distribution and Office Overhead

48
Cost Of Sales

1378.45

Operating Profit before Interest

145.94
Interest @ 11%

4.50
Operating Profit after Interest

141.44
Profit before tax/loss

141.44
Provision for taxes @33.99%

48.07

Net Profit / Loss

93.36
Retained Profit

93.36

Year

2015

No.of months

12
Gross Sales

Domestic Sales

1650.00
(-) Excise Duty

125.61
Net Sales

1524.39

Cost of Sales


1166.40

18.00
iii. Diesel

18.00

90.00

25.00
Vi Depreciation

13.05

1330.45

0.00


1330.45

0.00

1330.45

110.00


1440.45

110.00

1330.45


48.00
Cost Of Sales

1378.45


145.94
Interest @ 11%

2.90

143.04

143.04

48.62

Net Profit / Loss

94.42
Retained Profit

94.42

Year

2016

No.of months

12
Gross Sales

Domestic Sales

2313.00
(-) Excise Duty

176.08
Net Sales

2136.92

Cost of Sales


1640.25

24.30
iii. Diesel

24.30

121.50

24.00
Vi Depreciation

13.05

1847.40

0.00


1847.40

0.00

1847.40

110.00


1957.40

156.00

1801.40


48.00
Cost Of Sales

1849.40


287.52
Interest @ 11%

1.19

286.33

286.33

97.32

Net Profit / Loss

189.00
Retained Profit

189.00

Year

2017

No.of
months

12
Gross Sales

Domestic Sales

2313.00
(-) Excise Duty

176.08
Net Sales

2136.92
Cost of Sales

i.
Raw materials
(indigenous)

1640.25

24.30
iii. Diesel

24.30
iv.
Direct Labour (Factory wages &
salaries)

121.50

24.00
Vi Depreciation

13.05

1847.40

0.00

Sub-total (vii +
viii)

1847.40

0.00

1847.40
xii.
Add: Opening Stock of finished
goods

156.00

Sub-total (xii +
xi)

2003.40
xiii.
Deduct: Closing Stock of finished
goods

156.00

1847.40
Selling, Distribution and Office
Overhead

52.00
Cost Of Sales

1899.40

237.52
Interest @ 11%

0.00

237.52
Profit before
tax/loss

237.52

80.73
Net Profit / Loss

156.79
Retained Profit

156.79

Year

2018

No.of months

12
Gross Sales

Domestic Sales

2313
(-) Excise Duty

176.08
Net Sales

2136.92

Cost of Sales


1640.25

24.3
iii. Diesel

24.3

121.5

24
Vi Depreciation

13.05

1847.4

0


1847.4

0

1847.4

156


2003.4

156

1847.4


52
Cost Of Sales

1899.4


237.51
Interest @ 11%

0

237.51

237.51

80.73

Net Profit / Loss

156.79
Retained Profit

156.79

Year

2019

No.of months

12
Gross Sales

Domestic Sales

2313
(-) Excise Duty

176.08
Net Sales

2136.92

Cost of Sales


1640.25

24.3
iii. Diesel

24.3

121.5

24
Vi Depreciation

13.05

1847.4

0


1847.4

0

1847.4

156


2003.4

156

1847.4


52
Cost Of Sales

1899.4


237.52
Interest @ 11%

0.00

237.52

237.52

80.73

Net Profit / Loss

156.79
Retained Profit

156.79

Year

2020

No.of months

12
Gross Sales

Domestic Sales

2313
(-) Excise Duty

176.08
Net Sales

2136.92

Cost of Sales


1640.25

24.3
iii. Diesel

24.3

121.5

24
Vi Depreciation

13.05

1847.4

0


1847.4

0

1847.4

156


2003.4

156

1847.4


52
Cost Of Sales

1899.4


237.52
Interest @ 11%

0.00

237.52

237.52

80.73

Net Profit / Loss

156.79
Retained Profit

156.79

0
20
40
60
80
100
120
140
160
180
200
1 2 3 4 5 6 7 8 9 10
10.24
73.97
93.36 94.42
189
156.79
156.79
156.79
156.79
156.79
Net Profits (In Lacs)
Net Profits (In Lacs)

942.35
1319.29
1507.76
1524.39
1524.39
2136.92
2136.92
2136.92
2136.92
2136.92
Net Sales (In Lacs)
1
2
3
4
5
6
7
8
9
10

PROJECTED BALANCE SHEET FOR 10 YEARS

2011
LIABILITIES

Share Capital 129.00
Profit & Loss Account 10.24
Secured loan : Term Loan 78.00
Working Capital Loan 120.00
Total Liabilities 337.24

ASSETS

Fixed Assets (Cost/WDV) 152.00
Less : Depreciation 13.05
Net Fixed assets 138.95
Current Assets

Inventories 177.90
Sundry Debtors 42.50
Other Current Assets 9.00
Cash & Bank Balance 139.29
Total current assets 368.69
Less : Current Liabilities 170.40
Net Current Assets 198.29
Total Assets 337.24

2012
LIABILITIES


ASSETS

Current Assets

Inventories 210.76
Total Assets 385.37

2013
LIABILITIES


ASSETS

Current Assets

Inventories 247.49
Total Assets 386.29

2014
LIABILITIES


ASSETS

Current Assets

Inventories 252.79
Total Assets 373.56

2015
LIABILITIES


ASSETS

Current Assets

Inventories 242.98
Total Assets 359.02

2016
LIABILITIES


ASSETS

Current Assets

Inventories 327.69
Total Assets 438.07

2017
LIABILITIES


ASSETS

Current Assets

Inventories 307.69
Total Assets 405.79

2018
LIABILITIES


ASSETS

Current Assets

Inventories 307.69
Total Assets 405.79

2019
LIABILITIES


ASSETS

Current Assets

Inventories 307.69
Total Assets 405.79

2020
LIABILITIES


ASSETS

Current Assets

Inventories 265.99
Total Assets 405.79

JK S

PAY BACK PERIOD
A) INVESTMENT = Rs 207 Lacs
B) CALCULATION OF PAY BACK PERIOD
YEAR ANNUAL PAY BACK CUMULATIVE
1st 31.87 31.87
2nd 94.95 126.83
3rd 109.76 236.59
4th 110.92 347.51
5th 110.37 457.88
6th 203.25 661.12
PAY BACK PERIOD = 3 (Three) YEARS
Implementation Schedule

Samartha Technologies Private Limited is planning to start its operations with effective from
the month of January 2011. The proposed investment for handling all the operations and cost
functions is estimated to be Rs. 2 crores and 7 lacs which has been divided in 60:40 ratio as
60% of the fund will be contributed by the partners and the remaining 40% to be financed by
bank at the rate of 11% per annum. The initial capacity production will be at 60% level and in
the later years, the capacity rate will be increased as the demand for the concrete poles will go
high in future. We have already begin with contacting our sources for selling of the poles as
our quotation will be less than the other suppliers from other states due to a vast reduction in
transport cost as the fuel prices are soaring at high rates these days. We are forecasting to
reach the break-even analysis at the end of third year so that our investments are ploughed
back and after the third year we will be able to gain surplus profits and expand our production
capacity level to 100% in the later upcoming years. The best advantage to start the factory is
that all the required raw materials are easily available nearby itself and we dont need to
contact suppliers from outside city or states. The labor is also available in sufficient quantity
and at an affordable rate which will lead to a decrease in the cost of production. With rural
electrification gaining momentum through Government sponsored RGGVY Scheme and
large new projects taken up for implementation, there is huge demand for these poles within
state. Since there are not many units in or nearby the states manufacturing this item, there is
certainly very good scope for marketing this within the state. With adequate marketing efforts
there is a simple scope to sell P.C.Poles outside the state also. As Jamshedpur is itself called
as the Steel City of India, there wont be any transport problem for delivering these poles
as they are large transporters company willing to take the order and get the poles delivered to
the required area. Considering the low power requirement for the industry, we have decided
to use our own Diesel Generator Set for power as the cost for a permanent electric connection
and the installation charges involved will be huge. The water requirement of the unit will be
met by own deep Bore well. During the 1
st
year the unit is expected to achieve a capacity
utilization of 60% and in 2
nd
year, 3rd year and 4
th
year onwards, the unit is expected to
utilize 70%, 80% and 80% respectively. The average sales price per Piece of Pole of 8 Meters
has been estimated at Rs.1800 and for Pole of 9 Meters Rs.2600/- per piece. (Excluding all
taxes and duties and delivered at its factory site). It has been estimated that the rates of sales
will remain same during projection period. Interest on Term Loan and Working Capital Loan
has been estimated @11% p.a. throughout the projection period. The depreciation has
been calculated in Straight Line Method as per Companies Act. Income-tax has been
presumed @33.99% on income. Considering the estimates Profitability and the Balance
Sheet, the Company is in a position to Pay Back the full Term Loan. Hence the Project is
very much viable financially.

CONCLUSION

Prestressed concrete can provide significant cost advantages over structural steel sections or
ordinary reinforced concrete.
The limitations of prestressed concrete are few and really depend upon the imagination of the
designer and the terms of his brief. The only real imagination where prestressing is a possible
solution may be the cost of proving moulds for runs of limited quality of small numbers of
non standard units.
All the materials used in manufacturing the prestressed concrete poles are provided by the
AIADA industrial area.
The project overall is very feasible especially due to the governments initiative to promote
electricity and power transmission in vast rural areas of east Indian states therefore giving the
business a major scope for profit as the demand for the product will be high.
As it will also promote rural development it will be supported by incentives given by state
governments.
The project is overall very profitable as well as feasible and has not much threats but has
more opportunities.

BIBILIOGRAPHY

Indianblogger.com
http://www.aiada.in
http://exim.indiamart.com/ssi-policies/
blogs.siliconindia.com
http://megandlo.tripod.com/Synopsis.pdf
www.lonestarprestress.com/

For the successful completion of the Entrepreneurship Development
Project for The Manufacturing of Prestressed Concrete Poles, we would
like to especially thank Mr. Anurag Agarwal who has a vast amount of
experience in this business and throughout the Project he has shared with
us a lot of information on how the Prestressed Concrete Poles are made
and what are the various Government Schemes to promote this Industry.
Without his information this project would have been hanging in the
middle.

A - Umng ED Proj.

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

A - Umng ED Proj.

Uploaded by

Copyright:

Available Formats

TOPIC - MANUFACTURING OF PRESTRESSED CONCRETE POLES

USED FOR POWER TRANSMISSION AND TELECOMMUNICATION

You might also like