Detailed Project Report
Paper Bag Making
—
Prepared on: 13 November 2026 · Prepared with Building Business DPR (buildingbusiness.in)
01 Project at a glance
- Total project cost
- ₹19.16 L
- Term loan from bank
- ₹12.46 L
- Promoter’s contribution
- ₹1.92 L
- Subsidy
- ₹4.79 L
- Sales · Year 3
- ₹0.00 L
- Profit after tax · Year 3
- ₹-6.39 L
- Average DSCR
- -1.36
- Break-even (% of capacity used)
- —
02 Promoter and unit
| Promoter name | — |
|---|---|
| Business / firm name | — |
| Legal form | Proprietorship |
| Address of the unit | — |
| Applicant category | General · Rural |
03 The project
Make kraft and brown paper bags on an automatic machine for shops, food outlets and brands.
| Main product or service | Paper Bag Making |
|---|---|
| Installed capacity per year (at 100%) | 10,000 units |
04 Market
- Retail and clothing stores
- Restaurants, bakeries and sweet shops
- Medical stores and jewellers
- Corporate and event buyers
- Direct supply to shops
- Packaging wholesalers
- Branded bag orders
05 Plant and machinery
| Item | Qty | ₹ | Total ₹ |
|---|---|---|---|
| Paper bag machine, large scale, without colour flexo printing (selected in the report) | 1 | 5,50,000 | 5,50,000 |
| Option: large scale with two-colour flexo printing | 1 | 8,50,000 | 8,50,000 |
| Option: small scale without printing | 1 | 4,25,000 | 4,25,000 |
| Total | 18,25,000 |
Pre-filled from: PMEGP sample project report — Paper Bag (prepared by Udyami/Samadhan); DGFT — ITC (HS) classification of export and import items. Prices in older reports will have gone up — enter today’s quotations.
06 Raw materials
- Kraft or brown paper roll — ₹30 a kg in year 1; 1,44,000 kg a year at full capacity
- Glue and consumables — ₹3 a kg of paper in year 1
07 Cost of project
| ₹ in lakh | |
|---|---|
| Plant and machinery | 18.25 |
| Contingency | 0.91 |
| Total fixed capital | 19.16 |
| Working capital margin | 0.00 |
| Total project cost | 19.16 |
08 Means of finance
| ₹ in lakh | % | |
|---|---|---|
| Promoter’s contribution | 1.92 | 10.0 |
| Subsidy | 4.79 | 25.0 |
| Term loan from bank | 12.46 | 65.0 |
| Total | 19.16 | 100.0 |
| Working capital loan (outside project cost) | 0.00 |
09 Key assumptions
| Selling price | ₹0 per units |
|---|---|
| Raw material & packing cost | ₹0 per units |
| Capacity used each year | 60% · 70% · 80% · 80% · 80% · 80% · 80% |
| Term loan interest rate (% a year) | 11% · 84 months (Moratorium 6) |
| Working capital method | Turnover method (RBI) · Working capital interest (% a year) 11% |
| Income tax rate | 25% |
| Yearly price and cost rise | 0% |
10 Production and sales
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capacity used | 60% | 70% | 80% | 80% | 80% | 80% | 80% |
| Production (units) | 6,000 | 7,000 | 8,000 | 8,000 | 8,000 | 8,000 | 8,000 |
| Sales | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
11 Projected profitability
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Sales | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Raw material and packing | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Power and fuel | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Salaries and wages | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 |
| Rent | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Administration | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Selling and distribution | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Repairs and maintenance | 0.38 | 0.38 | 0.38 | 0.38 | 0.38 | 0.38 | 0.38 |
| Insurance | 0.10 | 0.10 | 0.10 | 0.10 | 0.10 | 0.10 | 0.10 |
| Total cost of operations | 3.36 | 3.36 | 3.36 | 3.36 | 3.36 | 3.36 | 3.36 |
| Operating profit (EBITDA) | -3.36 | -3.36 | -3.36 | -3.36 | -3.36 | -3.36 | -3.36 |
| Depreciation | 2.87 | 2.44 | 2.08 | 1.77 | 1.50 | 1.28 | 1.08 |
| Preliminary expenses written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest on term loan | 1.35 | 1.17 | 0.96 | 0.75 | 0.54 | 0.32 | 0.11 |
| Interest on working capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit before tax | -7.58 | -6.97 | -6.39 | -5.87 | -5.40 | -4.96 | -4.56 |
| Income tax | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit after tax | -7.58 | -6.97 | -6.39 | -5.87 | -5.40 | -4.96 | -4.56 |
12 Cash flow
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Profit after tax | -7.58 | -6.97 | -6.39 | -5.87 | -5.40 | -4.96 | -4.56 |
| Depreciation | 2.87 | 2.44 | 2.08 | 1.77 | 1.50 | 1.28 | 1.08 |
| Cash accruals (PAT + depreciation) | -4.71 | -4.53 | -4.32 | -4.11 | -3.89 | -3.68 | -3.47 |
| Term loan repaid | 0.96 | 1.92 | 1.92 | 1.92 | 1.92 | 1.92 | 1.92 |
| Owner’s drawings | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Surplus after repayment | -5.67 | -6.44 | -6.23 | -6.02 | -5.81 | -5.60 | -5.39 |
| Cash and bank | -5.67 | -12.11 | -18.34 | -24.36 | -30.17 | -35.77 | -41.16 |
13 Projected balance sheet
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capital (own + subsidy) | 6.71 | 6.71 | 6.71 | 6.71 | 6.71 | 6.71 | 6.71 |
| Reserves and surplus | -7.58 | -14.55 | -20.95 | -26.82 | -32.21 | -37.17 | -41.73 |
| Term loan outstanding | 11.50 | 9.58 | 7.67 | 5.75 | 3.83 | 1.92 | 0.00 |
| Working capital loan | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities | 10.62 | 1.74 | -6.57 | -14.36 | -21.67 | -28.55 | -35.02 |
| Net fixed assets | 16.29 | 13.84 | 11.77 | 10.00 | 8.50 | 7.23 | 6.14 |
| Preliminary expenses not written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Current assets (stock and debtors) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Cash and bank | -5.67 | -12.11 | -18.34 | -24.36 | -30.17 | -35.77 | -41.16 |
| Total assets | 10.62 | 1.74 | -6.57 | -14.36 | -21.67 | -28.55 | -35.02 |
14 Ratios and break-even
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Debt service coverage ratio (DSCR) | -1.46 | -1.09 | -1.17 | -1.26 | -1.37 | -1.50 | -1.65 |
| Break-even (% of capacity used) | — | — | — | — | — | — | — |
| Cash break-even | — | — | — | — | — | — | — |
| Average DSCR | -1.36 |
|---|---|
| Lowest DSCR | -1.65 |
| Payback period | — |
15 Depreciation
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Depreciation | 2.87 | 2.44 | 2.08 | 1.77 | 1.50 | 1.28 | 1.08 |
Written-down value method at Income-tax Rules block rates (building 10%, plant & machinery 15%, furniture 10%, computers 40%). Change them if your CA uses other rates.
16 Term loan repayment
| Year | Opening | Interest | Term loan repaid | Closing |
|---|---|---|---|---|
| 1 | 12.46 | 1.35 | 0.96 | 11.50 |
| 2 | 11.50 | 1.17 | 1.92 | 9.58 |
| 3 | 9.58 | 0.96 | 1.92 | 7.67 |
| 4 | 7.67 | 0.75 | 1.92 | 5.75 |
| 5 | 5.75 | 0.54 | 1.92 | 3.83 |
| 6 | 3.83 | 0.32 | 1.92 | 1.92 |
| 7 | 1.92 | 0.11 | 1.92 | 0.00 |
17 Licences and registrations
- Udyam registration
- GST registration
- Fire and pollution registration as required
- Trademark for your brand if needed
18 Government schemes that may apply
- Prime Minister's Employment Generation Programme (PMEGP)
- Pradhan Mantri MUDRA Yojana (PMMY) – Shishu, Kishor, Tarun, Tarun Plus
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
19 Sources
- PMEGP sample project report — Paper Bag (prepared by Udyami/Samadhan) — https://pmegp.msme.gov.in/Home/DownloadDocument?fileName=Documents/ProjectSampleReport/PROJECT_PROFILE_FOR_PAPER_BAG_%28_HAND_MADE_PAPER_AND_FIBRE_INDUSTRY_%29.pdf
- DGFT — ITC (HS) classification of export and import items — https://www.dgft.gov.in/CP/?opt=itchs-import-export
This report is a projection from the figures entered by the promoter. It is not a bank appraisal or a guarantee of a loan or subsidy. Check every figure with current quotations and your chartered accountant before submitting it.