Bhalla Sir Final Proposal

8/8/2019 Bhalla Sir Final Proposal

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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.

Documents

Bhalla Sir Final Proposal