Auto Switch Buss. Plan Anuj Sec-b

BUSINESS PLAN AUTOSAVE SWITCHES (PVT) LTD.

MADE BY ---

Anuj Kumar Sec-B

Table Of Contents Business Plan (A) TEXT PART

1.

Executive Summary

2.

Company

4.

Management

3.

Market Information

4.

Product

5.

Product Development

6.

Production Sales Forecast

7.

Market Size

8.

Sales forecast

9.

Sales Plan

(B)CALCULATION PART

10. Projected Financial statements A) Cost of project B) Statement of Working Capital C) Loan Repayment statement D) Schedule of fixed Assets E) P&L A/c F) Balance sheet G) Fund Flow Statement H) Break Even Analysis

TEXT PART 1. Executive Summary

This business plan has been prepared to obtain financing in the

amount of Rs 5888750 to complete the product development, set up manufacturing and implement an aggressive sales and marketing program. Autosave Switches Pvt Ltd. is a new company which has developed an automatic electronic light control product called Autosave Switch for consumer, commercial and industrial applications with a potential market of over ------ million over the next 5 years. The new product, which is called "Autosave Switch" will automatically turn lights on and off when the ambient light in a room reaches a predetermined level. The increasing concerns about security, personal safety, energy conservation and the general trend towards automation has created a market for devices which reduce or eliminate the problems associated with manual control of lighting systems. Homes, offices, factories, hospitals, schools, public buildings and construction sites are only a few of the more obvious applications. Autosave Switch will be particularly valuable in remote or unattended locations.

Competition in Market

There are some competitors in India for products that are in the

process to develop the product that are also working on the technology, similar to the proposed Autosave switches Pvt Ltd. product. Autosave switches Pvt Ltd. combines newidea, low cost, high reliability and adaptability to a wide range of applications. Autosave switches Pvt Ltd.will also be sold through an effective distributor and dealer network and will be adaptable to a wide range of industrial, commercial and consumer needs.

2.Company Autosave Switches Pvt

Ltd. was incorporated in Meerut, Industrial Area Partapur on March 1, 2009. The Company's business address is: 786,E block, Sadbhawna Building Delhi Road

Partapur Meerut Telephone (0121-2681450) Fax: (0121) 2681450 E-Mail: autosave @autosave.com Autosave Switches Pvt Ltd. was established to develop and manufacture a specialty electronic circuit control product. The product is still under development. At present, the Company does not have any full time employees. The Company is presently operating out of the residence of one of the principals. LOCATIONAL ADVANTAGE : Our manufacturing unit is located at industrial area of Partapur Meerut (UP),its 24 hr electricity zone, no problem for water supply, Near(around 50 km) to NOIDA from where we will purchase Raw material ,and the land is comparatively cheaper than the high profile industrial locations like NOIDA or Gurgaon The two principals of the Company are:

Mr. Anuj Kumar, President and original developer of the product. Mr.Arun Kumar, CEO of the Company, responsible for production. The two principals each own 50% of Autosave switches Pvt Ltd. Any questions relating to the business plan are to be directed to Mr. Anuj Kumar.

3. Management Team The current members of the management group are the principals of Autosave Switches Pvt Ltd. Mr. Anuj kumar is a Fresh Management graduate from the Master school of Management. He has also served with Army for 5 years. Mr. Arun Kumar is an engineer (Electronics and instrumentation) graduated from the Shobhit Institute of Technology (Shobhit university, Meerut) and completed his MBA in Operations Management from IIT Kharagpur and has over 3 years industrial experience in electrical components and electronics manufacturing. He is currently employed as the production manager with the same electronics firm as Mr. Anuj Kumar. Mr. Arun is responsible for technical development and Mr. Anuj kumar will be responsible project management. Mr. Anuj and Mr.Anuj each own 50% of Autosave Switches Pvt Ltd. The sales and marketing functions will be the responsibility of an individual who is having over 15 years sales and marketing experience in the home entertainment industry. Along with Mr Anuj kumar, Both individuals are prepared to resign their present positions and make a full

time commitment to Autosave Switches Pvt Ltd. when financing has been arranged. Initially, the accounting and financial control functions will be handled on a part-time basis by a senior member of a firm of chartered accountants. The CA is prepared to work for modest compensation until the product has been developed and is ready for manufacturing. Finance officer will also be there after production is started. Detailed resumes of the management team members are available to the financers.

4. The Market of Autosave switches

The primary markets for Autosave Switches Pvt Ltd.

at this time which provide the greatest sales potential in a relatively short period of time are in all over India where we can save a substantial amount of electricity by using these switches but company will initially target only north India. Consumer, commercial and industrial users are all prospective customers for the product. The major potential market in the consumer sector will be accessed through the large retailers of small appliances, brighting fixtures and electrical hardware such as: •

Major department stores

•

Hardware store chains

•

Retail brighting outlets

•

Government

The primary customers in the commercial and industrial sector will be electrical engineering firms, electrical contractors, industrial plant and commercial building maintenance departments, security companies and public buildings, municipal corporations etc. The target markets are easily accessible and identifiable.

5. The Product Information Autosave Switch is an automatic electronic switch for controlling electric lights. The complete assembly is the same size and shape as a standard walltype electric light switch and is designed to replace the wall switch using

the same standard mounting screws and electrical wiring. No modifications to the mounting or wiring is required. Autosave Switches Pvt Ltd. consists of an optical sensor which detects the amount of light in the room and an electronic circuit which operates a sensitive relay for turning the lights on and off. The sensitivity of the light detecting circuit can be set to one of three preset levels depending upon the type of application (i.e. to maintain a minimum acceptable light level for normal vision in an office; to turn the lights on under partially subdued ambient light conditions; or to switch the lights on only under extremely low light levels). The adjustment control is easily accessible on the face plate of Autosave Switch. A manually operated switch is also available on the face plate of Autosave Switch to disable the automatic control and enable Autosave Switch to be used as a standard manual on/off light switch. A unique feature in Autosave Switch is the extremely sensitive and reliable light sensing circuit. The Bright-Guard product is not patented. However, a detailed description of the product and design drawings have been witnessed and dated by a notary public and two independent electronic engineers.

6. Product Development

An engineering prototype model of Autosave Switch has been

developed to prove the concept and basic design of the product. The engineering prototype satisfactorily demonstrates the technical feasibility and basic operation of the product. The following is a list of additional engineering development work that is required before the product is ready for mass production.

S No

TASK

1.

Refine design to improve operation and to reduce costs.

2.

Build 2 engineering prototypes for tests and evaluation.

3.

Conduct performance and reliability tests on the engineering prototypes.

4.

Modify design and repeat performance tests as required.

5.

Prepare formal engineering drawings, design packaging and establish projected manufacturing costs.

Special engineering test equipment will be required to conduct performance and reliability tests. The test equipment will consist of special light-sensing and measuring equipment and controlled light

sources. There are no major or critical risks that are anticipated to be able to successfully complete the engineering development. The technical feasibility has already been proven on the engineering prototype. The balance of the engineering development program will consist primarily of refining the design to optimize the performance and reliability and to reduce manufacturing costs. No other special facilities except the special test equipment mentioned above will be required to complete the development. A technician will be required to assist Mr. Arun Kumar with the engineering development.

7. Production Process Autosave Switch will be manufactured using standard electronic assembly techniques and. All electronic circuitry will be mounted on a printed circuit board which will be installed in a plastic moulded case. The electronic printed circuit board will be manufactured under subcontract by a local electronics manufacturing company. All materials and components for the product are readily available "offthe-shelf" from at least three suppliers at NOIDA. Autosave switches Ltd. will assemble the electronic printed circuit board in the plastic case and test the product before shipping. A total of 7 assembly personnel, plus an assembly line supervisor, will be required to assemble the product. Two test technicians will be required to inspect and test the product before shipping. Approximately 500 square yards of space will be required to store inventory, assemble and test the product. Special semi-automated equipment will be required to test the product after assembly. Each unit will undergo 24 hours of continuous testing before shipping to a customer.

7. Market Size ✔ The existing market for the product in the market all over the India is about 2 ,60, 000 units. ✔ The market is expected to grow at an annual rate of 40% over the next 5 years. ✔ Estimated size of the total Indian market over the next 5 years: 20,00,000 units

8. Sales Forecast

The following sales forecast is considered to be an estimate based on the responses from the Market. Additional sales can be anticipated with increased market penetration and product recognition. Unit Sales

Average Unit

Total Sales (Rs)

Selling Price (Rs) Year 1

15,000

1500

Rs2,25,00,000

Year 2

28,000

1500

Rs4,20,00,000

Year 3

42,000

1500

Rs6,30,00,000

Note: Year 1 will commence approximately 5 months after financing has been arranged. The sales over the first 3 year will be divided approximately as follows: 60% to North India 30% to South India 10% to the East and West India The above estimate of sales are considered to be extremely conservative in view of the wide range of applications, the unique operating features and the low selling price of the product.

9. Sales Plan

The sales program for the first year will concentrate on developing the North Indian market. The North Indian sales program will commence within six months after the finance is available . The sales organization will be divided into two groups: •

Consumer sales

•

Commercial/Industrial sales

➢ The consumer sales group will concentrate on developing a dealer network (retailer) that will sell the product to the consumer. ➢ The initial sales efforts will concentrate on the national department store chains, national lighting outlets, hardware store chains. ➢ In general, each of the above retailers uses a central purchasing department for all outlets in India. ➢ The commercial/industrial sales group will also require two full time sales people to concentrate initially on developing a wholesale distributor network with a least 12 distributors in north India and 6 distributors in the south India. ➢ The distributors will have access to the major electrical contractors, engineering firms and electrical suppliers in their respective areas.

➢ A secretary and a sales order clerk will provide sales support for both the consumer sales group and the commercial/industrial sales group. ➢ A simple but effective advertising campaign will be implemented to support the sales efforts. Consumer advertising will consist of monthly advertisements in publications such as T.V. Guide, Business India and Economic Times. Half page advertisements will be placed in two monthly trade publications with a large circulation to the electrical contracting and plant maintenance markets in India.

CALCULATION PART 10. Financial Requirements The following is a summary of the projected first year financial statements. SALES

22500000 (15000*1500)

Cost of Raw Material 30 % of Sale

6700000

Manufacturing Exp. 5 % of Sale

11 25000

Salary and Wages President

48 0000

CEO

480000 Finance manager(1)

2 40000

Marketing Executives (2)

3 60000

Supervisors (2) 240000 Administrative Staff Accountant(1)

96000

Clerk(1)

84000

Technicalworker(10)

840000

Unskilled labour(5)

1 80000

Establishment cost 3% of sales 675000

A)COST OF PROJECT (Rs 000) EXPENSES

SOURCES OF FUND

LAND(500*5000)per sq yd

250 0

OWNER FUND

5202.917

BUILDING(400*3000)(per sq yd)

120 0

LONG TERM LOAN

3570.000

PLANT &MACHINERY

200 0

WORKING CAPITAL

2318.750

ELCTRICITY & INSTALLATION

50

CREDITORS

558.333

0

FURNITURE

70 0

PATENTS AND TRADEMARKS

50 0

OTHER FIXED ASSETS

20 0

WORKING CAPITAL REQD.

365 0

PRELIMINARY EXPENSES

40 0

TOTAL

116 50

11650

B)STATEMENT OF WORKING CAPITAL (Rs-000) CURRENT ASSETS

AMOUN HOLDIN T G PERIOD

MPBF (45%)

OWNER’S FUND (25%)

SUNDRY DEBTERS

1875.00 1 MONTH 0

1406.250

468.750

RAW MATERIAL

279.167 15 DAYS

209.375

69.791

WIP

558.333 1 MONTH

418.750

139.584

FINISHED GOODS

937.500 15 DAYS

703.125

234.375

TOTAL

3650.00 0

2737.500

912.500

STOCK

CURRENT LIABILITY

SUNDRY CREDITORS

558.333 1 MONTH

418.750

139.583

3091.6 67

2318.750

772.916

C)REPAYMENT OF LOAN (QUARTERLY12% INTEREST RATE)

QUART Principle ER 1

Intere st

3570000

2 127500/344 2500

142800

3 127500/331 5000

137700

4 127500/318 7500

132600

5 127500/306 000

127500

D)SCHEDULE OF FIXED ASSETS SCHEDULE OF FIXED ASSETS FIRST YEAR

GROSS

(RS in "000") RATE OF DEPRECIA NET

BLOCK

DEP

TION

PLANT& MACHINARY

2000

LAND

2500 -

BUILDING

1200

10%

120

1080

ELECRTICITY

500

10%

50

450

FURNITURE

700

10%

70

630

PATENTS & TRADEMARK

500

25%

120

380

OTHER FIXED ASSESTS

200

10%

20

180

685

6915

TOTAL

15%

BLOC K 300

-

2500

7600

E)PROFIT AND LOSS STATEMENT Profit and Loss First year

(V:F)

Particular Sales Revenue

22500000

Total

22500000

Less: Expenses Excise duty 100%exemption Cost of Raw Material

3150 -3150

1700

000 6700000

Establishment Expenses

675000

Manufacturing Expenses(80:40)

1125000

Administrative costs (F)

2052000

Wages

1020000

Insurance(F)

800000

Other administrative cost(F)

2 00000

Audit fee(F)

400000

Packaging

225000

R&D(F)

300000

Selling & Distribution costs(60:40) Preliminary expenses Written off(F)

1125000 80000

Depreciation

685000

Financing Cost(F)

540600

Total Cost PBT Less: Provision for Tax (34%) PAT

15927600 6572400 2234616 4337748

F)BALANCE SHEET BALANCE SHEET Liability Owner's Fund

5202917

Retained Profit

4337784

Long Term loan

3060000

Working capital Loan

2337500

Other current Liability Creditor

558333

Provision for Tax Total

2234616 17738150

Assets Net Fixed assets

6915000

working capital

3650000

cash

68 53150

Preliminary Exp Total

320000 17738150

G)FUND FLOW STATEMENT

FUND FLOW STATEMENT Sources of fund owner's fund working capital loan long term loan creditors fund from operation Total

5209917 2337500 3570000 558333 7337400

19013150

Application of fund fixed assets preliminary ex.

7600000 400000

working capital

3650000

Cash

6853150

Repayment of loan

510000

Total

19013150

H)FUND FROM OPERATION Profit After tax

4337784

+Depreciation

685000

Provision For Tax

2234616

Pre. Expenses (written off)

80000

TOTAL

7337400

I)BREAK EVEN ANALYSIS Break even Point=FIXED COST/CONTRIBUTION PER UNIT

=5642600/1500 - 450 =5373391 FIXED COSTS

1

Manufacturing cost

225000

2

Establishment cost

675000

3

Administrative cost

205200

4

Other administrative costs

200000

5

Selling and distribution

450000

6

Auditor fee

400000

7

R&D

300000

8

Insurance

800000

9

Financial cost

540600

Total

5642600