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    BUSINESS PLAN

    SUBMITTED TO: MS RADHIKA MEENAKSHI

    SUBMITTED BY: SECTION A

    SAURABH YADAV 41

    AMITY SCHOOL OF BUSINESS

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    CONTENT OF BUSINESS PLAN

    Introductory page

    Executive summary

    Industry analysis- SWOT, internal and external

    environment

    Description of the venture

    Production plan

    Market plan

    Risk assessment

    Financial plan

    Appendix

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    COMPANY INFORMATION

    NAME OF THE COMPANY: METALAX PVT. LTD.

    NAME OF THE INNOVATIVE PRODUCT: DETNO TRACKER

    MODEL NO. STS092733

    NATURE OF BUSINESS:

    Manufacturers of all kinds of detecting devices for security

    and surveillance. Camera, CCTV, metal detectors, x-ray

    machines

    VISION:

    Is to become 'a world-class innovative engineeringenterprise committed to enhancing stakeholder value'.

    MISSION:

    The purpose of Metalax is to honourably serve theneeds of the community by providing products andservices of superior quality and technology to our

    customers; to do this so as to earn an adequate profitwhich is required for the total enterprise to grow; and byso doing provide the opportunity for our employees andshareholders to achieve their reasonable personalobjectives.

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    Address : Opp. Goa Flour Mill, Devsuvaddo, Chicalim,

    City : Panji

    State : Goa

    Country : India

    Phone : 91-832-2541467

    Fax : 91-832-2541214

    Email Address : [email protected]

    Mobile : +919422059636

    Web Site : http://www.metalax.com

    ORGANISATIONAL STRUCTURE

    CEO: MR Saurabh Yadav

    Has a work experience of 10 years as the director of BAJAJ IRON

    STORE, a metal detector producing company in Delhi and 2 years as

    the Managing Director at METALAX OVT LTD.

    MANAGING DIRECTOR: MR Bharat Batra

    Has a work experience of 6 years as the director of SECURITYEQUIPPERS INDIA and 4 years as Managing Director of METALAX

    PVT LTD.

    DIRECTOR: MR Galib.

    Has a work experience of 8 years as the company secretary at

    METALAX PVT LTD.

    mailto:[email protected]://www.metalax.com/mailto:[email protected]://www.metalax.com/
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    BACKGROUND OF THE COMPANY

    The parent company name is METALAX PVT. LTD.

    We make all kinds of security and surveillance devices such as

    hand metal detectors, walk through metal detectors, CCTV, fire

    and gas detection devices etc.

    Our company was established in the year 2000, and today it is

    one of the most reputed and well known company with anestablished name and image.

    We saw an opportunity of making walkthrough metal detectors,

    with x-ray machines attached to it. It would be foldable, so that

    it can be easily carried by a person to any place.

    Hence we have decided to bank on this innovative product

    which we have named DETNO TRACKER. It would be

    available in various sizes and intensity depending on the needs

    of the customers,

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    Types of Metal Detector made by the company

    Pulse Induction (PI) metal detectors send pulses of

    electromagnetic fields into the ground. The interference, resulting

    from encountering a metal object, produces a change in the field

    emitted. This is detected by the device which alerts the user

    through tones.

    Very Low Frequency (VLF) metal detectors produce an

    electromagnetic field which is directed into the ground (sound

    familiar?). When this field makes contact with an object, the object

    produces its own field which is detected by the receiver. By tuning

    to specific frequencies, it can differentiate between different

    metals.

    Beat Frequency Oscillation (BFO) metal detectors produce an

    electromagnetic field which is directed into the ground (you get the

    idea). This field is composed of radio waves. The object interferes

    with the radio waves and changes the resulting pitch.

    All Purpose Metal Detectors - (Coins, Jewellery, etc)

    Beach/Surf/Water Metal Detectors

    Gold Metal Detectors

    Relic Metal Detectors

    2-Box Deep Searching Metal Detectors

    Professional land/Water Metal Detectors

    Commercial/Industrial Metal Detectors

    Used/Demo/Refurbished Metal Detectors

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    Metal detector

    X-Ray System

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    Pulse induction

    Micro Scan Metal Detector

    Micro Scan Metal Detector

    http://en.wikipedia.org/wiki/Image:SD2100.jpg
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    EXECUTIVE SUMMARY

    The company METALAX PVT LTD has come out with an innovative

    product, by the name of DETNO TRACKER, which is a walkthrough

    security device, combining the functioning of a metal detector as

    well as an x-ray machine.

    The production plant has been set up in Goa, Panaji on 10

    acres of land, with an investment of Rs 130 crores. The

    financing of the product includes loan from the Goa bank,

    entrepreneurs own capital, and the venture capitalist. 1ST

    YEAR: LOSS OF Rs 7, 90, 00,000

    SUBSEQUENT 2 YEARS : PROFIT OF Rs 6-20 CRORE

    EXPECTED.

    SOURCES OF FINANCE

    RS 30: PROVIDED BY ENTREPRENEURS THEMSELVES

    RS 40: Economic Development Corporation of Goa and GoaIndustrial Development Corporation (Interest rate 14% p.a)

    RS 60: VENTURE CAPITALIST. (Return of 25% on profits)

    Walk through and hand held metal detectors are the two

    principal devices used for metal detection. Last year sales of

    walk through and hand held metal detectors totalled about Rs

    25000000. Walk through accounted for 60% of the total

    market value while hand held metal detectors made up theremaining 40%. So it is evident that there is a great scope for

    development in this field in India and there is a lot of potential

    yet to be tapped in India.

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    INTRODUCTION

    In current scenario, where the travellers travel via airplanes and trains,the airports and railway stations pose a great threat to the security and

    convenience of the travellers, who are always under the gun point of

    terrorist attacks or other anti-social activities. Public places and areas for

    entertainment such as malls, theatre, hospitals, schools etc also fall

    under the category of being the prime targets for terrorist activities.

    Under such conditions, the industry for security devices has been on asteady rise in India, for the past many years. The demand for devices

    such as CC-Cameras, Metal Detectors, Fire and Gas Detection devices

    etc has been increasing at a fast pace, contributing to the need for more

    technologically advanced and efficient security devices.

    On one hand where these devices have proven efficient in answering to

    the various security threats, on the other hand it cannot be overruledthat the presence of such security checks at various terminals at the

    airports and other places cause a lot of inconvenience to the customers.

    At the time of security checks and boarding the flights, the travellers

    have to undergo a long and cumbersome process of getting themselves

    and their belongings scrutinized by security devices such as metal

    detectors and X-ray machines. Such process involves a great deal of

    time and effort , where the travellers have to remove their shoes, socks,

    watches and other belongings to be scrutinized by the X-ray machines,after they pass through the metal detectors.

    This inconvenience has been overlooked for many years and till today

    no devices has been formed to reduce such inconvenience keeping the

    safety aspects in mind. From the point of view of security officials, there

    is a need for metal detectors which are light weight and are capable of

    relatively easy disassembly, transportation, and re-assembly for use at a

    different location.

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    Previous scenario:

    As indicated above, walkthrough metal detectors are quite old and wellknown in the art. Obviously, at this point in our country's history, the

    importance of metal detectors has perhaps never been greater. Whilesuch metal detectors have been known and used for many years infacilities such as airports and government buildings, use of walkthroughmetal detectors has recently been expanded to a wide variety of publicfacilities, including, for example, office buildings and public schools.

    With regard to current state-of-the-art walkthrough metal detectors, theyare typically a relatively permanent installation. That is to say, the devicecomprises an inverted U-shaped configuration that is erected andinstalled in a substantially permanent manner at the entry point wherepersons and objects are to be screened.

    It is therefore apparent that there is a need in the art for an improvedmetal detector capable of relatively easy disassembly, transportation,and re-assembly for use at a different location. Such an improved metaldetector must be of relatively light weight, preferably capable of beingcarried by one person. Of course, such an improved metal detector mustalso provide for ease of re-assembly without damage to the detector'scircuitry, so that the reliability of its use is not compromised.

    Present:

    The present invention comprises an improvement in metal detectors ofthe type where persons and objects pass through a magnetic fieldcreated by circuitry in the detector whereby the presence of metal maybe determined. The improvement comprises a foldable enclosure for

    the detector's circuitry, that foldable enclosure comprising a plurality ofdetector panels and means for connecting each one of the panels to atleast one other of the panels, whereby the foldable enclosure may beerected to define a substantially inverted U-shaped configuration havinga closed top, opposing legs extending downwardly from the top, and anopen bottom defined by the space between the legs. The improvementfurther comprises a base dimensioned and configured to receive theerected enclosure, whereby the metal detector may be erected andsecured in an operative position.

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    Looking into the future

    Now, along with the magnetic field metal detectors, which are also

    foldable and easy to carry, we will be adding another dimension to it in

    the form ofx-ray machine attached to the metal detector.

    When a person passes through the metal detector, the sensors will

    sense all the harmful and harmless metal accessories worn and carried

    by the passenger and the tv will show the various accessories carried by

    the passenger, without him actually removing it and passing it through

    another machine, causing inconvenience and time.

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    INDUSTRYANALYSIS

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    SWOTSTRENGTHSThe innovation is in itself strength.

    This is one of its kind walkthrough metal detectors, which also has an x-

    ray machine providing convenience, ease to the travellers and also thesecurity at the airport and various agencies.

    Saves time

    Convenience enhancer

    Traveller satisfaction: as they dont have to remove all their metal

    accessories.

    Ease of use

    It is also foldable, which can be carried by a single person and

    shifted to anyplace where the need may be.

    The detector will be made to order and customised based on the

    following criterias.

    Intensity

    Size

    Purpose

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    No competition- as it is an innovative product, new of its kind, no

    company today is providing such a product, so currently, it is the

    strength that the our company would enjoy.

    The company would follow total quality management and will

    comply with the quality standards to produce the products, which

    would be safe to use.

    WEAKNESS

    Since it is a highly technical and complex product, it needs heavy

    investment in R&D.

    Technical, expert personnel have to be recruited who have theknowledge, competency and the requisite skills.

    Training and development programmes have to be organised for

    the employees, which would take much of time and cost.

    Long gestation period, as it is a capital intensive industry, with

    huge investment and the machines are made to order.

    OPPORTUNITIES

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    The importance of metal detectors in today's society is growing. With

    this growth one can only speculate that there will be great advances in

    metal detector technology within the coming years. Simply put as the

    demand for metal detectors grows the technology will also grow.

    Metal detectors for security and industry have also made some

    exceptional advances and will continue to in the coming years.

    Technologies will be developed to not only detect metals, but also

    identify them with a visual outline of the metals detected. These

    advances will make our lives much safer and more secure.

    In addition to Government organizations and embassies, end users

    of sensing and detection devices encompass a large number ofdiversified groups of organizations deemed to be under security threat

    either to lives or property.

    They include schools, prisons, malls, multiplexes, hospitals, banks

    and financial institutions, gold bullion/mint corporations, high

    security printing businesses, hotels, educational institutions, gem

    and diamond cutting enterprises, high rise office buildings, oilrefineries and petrochemical plants, large manufacturing plants,

    entertainment venues and condominiums, etc.

    There may be as many as 200 million guns in private possession.

    No doubt the country would be safer if there were none, but efforts

    now to reduce the flow of guns would have little effect. Those guns

    that are used for crime are often stolen or borrowed, so requiring

    licenses or training would make no difference. Owners could bemade liable if their guns were borrowed and then used in a crime.

    Such laws might be useful, but it is hard to imagine that they would

    have prevented the school shootings that occurred in the last few

    years.

    Put armed guards in schools. There was a sheriff's deputy

    assigned to Columbine High School in Littleton, and he exchanged

    shots with one of the gunmen. How many more guards are

    needed?

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    Put metal detectors at school entrances. This might do some

    good, but it would not have affected the murders last year in the

    school parking lot in Fayetteville, Tenn., or the lethal gunfire from

    the woods surrounding a school in Jonesboro, Ark

    This product can be used in the railway stations as they do not

    have any x-ray machines due to cost and time factor. With our

    detectors placed in the railway station, the passengers will just

    have to pass through them, which will also do the work of x-raying

    them and locatinn any guns or bombs which they might be

    carrying. This can be done with ease and in very less time.

    The overall market value of sensing and detection devices in India

    is estimated at more than $100 million per year. The market is

    expected to grow more than 30% in the next few years, mainly as

    a result of increasing spending for greater security and safety of

    life and property in both public and private sectors.

    The no. of malls and multiplexes in India is increasing every year.

    All the malls and multiplexes have regulated strict safety andsecurity norms after the terror attacks.

    We can also export out detectors to other countries as the prices

    would be lower when compared on an international basis.

    The overall market value of sensing and detection devices in India

    is estimated at more than $100 million per year. The market is

    expected to grow more than 30% in the next few years, mainly as

    a result of increasing spending for greater security and safety oflife and property in both public and private sectors.

    Demand for metal detectors and CCTV is on the rise as the Indian

    Government upgrades security measures and technologies and

    expands safety coverage areas in response to both global and

    domestic requirements.

    In addition, demand among business operators is also on the rise

    as their needs for better prevention for potential loss and damagesto lives and property increases.

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    American sensing and detection devices compete particularly

    well in the high-end market, which accounts for 70% of the

    market. Quality and technology that result in greater reliability are

    the key competitive advantage for American products in this

    market segment where cost of failure of the devices is formidable.

    Hence, India offers good export opportunities for American

    sensing and detection devices. However, American suppliers

    need to identify capable distributor(s) in the country to effectively

    explore opportunities and successfully market their products.

    In contrast, U.S. and European makes do not compete well in

    the lower end segment of the market where price is the

    markets prime consideration. Makes from Taiwan, Korea,China and India dominate this segment of the market, which

    accounts for 30% of the overall sensing and detection devices

    market value. Average price of a typical product in this segment is

    about one third of a U.S. one.

    THREAT

    A major threat is the threat of the innovation being copied by

    the competition. Though the innovation has been patented,

    but the competition may be quick enough to make a similar

    product.

    The technological environment is changing with new innovations

    and R&D taking place,hence there is threat of obsolescence.

    U.S. makes together with European ones are leaders in the

    high-end segment of the detection and sensing devices

    market because of their technology and product quality. Their

    prime target market is composed of Government organizations, hi-threat public areas, embassies, large corporations, large

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    manufacturing operations, of which cost of failure to prevent

    loss /damage of and/or to protect the intended property is

    formidable. As a result, reliability and capability of U.S. and

    European products are their prime competitive advantages.

    Furthermore, the use of American safety standards in high

    hazard industries gives U.S makes a distinct advantage in markets

    such as refineries and the petrochemicals industry. This is

    because safety standards for these industries are set according to

    that of the National Fire Protection Association (NFPA) where

    specifications of safety-related products and equipment are based

    on UL and ANSI standard codes. U.S. detection and sensing

    devices are qualified based on the same standards as those

    specified in the design and are at major advantage to dominate the

    segment.

    ENVIRONMENT SCANNING

    ECONOMIC ENVIRONMENT

    Inflation-

    Will affect maintenance cost, fuel, labour cost, personnel handling, T&D.

    SOCIAL ENVIRONMENT

    It will provide national safety, in schools, prisons, malls, multiplexes,

    hospitals, banks and financial institutions, gold bullion/mint

    corporations, high security printing businesses, hotels,

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    educational institutions, gem and diamond cutting enterprises,

    high rise office buildings, oil refineries and petrochemical plants,

    large manufacturing plants, entertainment venues and

    condominiums, etc.

    Crime rate will reduce

    Terror control

    Public security

    Efficiency

    Cost reduction- electricity consumption, 2 machines used together

    Convenience to security staff and also the travellers.

    Security check fastened saving time

    TECHNOLOGICAL ENVIRONMENT

    It is a great technological advancement beneficial for country, enhancing

    the security.

    A major technological impact may be in the form of continuous

    innovations and changes taking place, for which the company has to

    continuously upgrade and enhance itself to prevent obsolescence.

    LEGAL ENIVRONMENT-

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    Comply with the Indian and Goa government regulation, policy and

    regulations.

    Acquire Patenting rights through legally complying with the rules

    and regulations of the patenting agency,

    Acquire the ISO standards and quality marks and control from the

    issuing agency.

    DESCRIPTION OF THE VENTURE

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    The organisation will set up in Goa, (Panji) as it is a lucrative place

    to set up a capital intensive business unit.

    The Government is gearing up for accelerated industrialdevelopment and overall economic growth. While drafting thispolicy, proper environmental concern, social infrastructure, wellbeing of its people and needs of existing industries have beentaken into consideration.

    Over the years, these advantages have reflected in the socio-economic indicators of the State, which are simply among the very

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    best in the country. It has a high total literacy rate of 82.32%, withfemale literacy at an admirable 75.51% and male 88.88%. Thebirth rate (per thousand) is 17.85 and the death rate (perthousand) is at a low of 7.16. The infant mortality rate too is among

    the lowest in the country - at 13.99 (per thousand). The State hasa wide coverage of public health centres and educationalinstitutions.

    With a well-spread network of banking and financial institutions,the State is in an ideal position to attract investments. In fact, Goahas one of the best deposits to credit ratios, which means thatthere is ample money with the institutions to advance for economicdevelopment. The per capita deposit is around Rs. 70,915/- per

    annum, whereas the per capita income at current prices is aroundRs. 61,301/- per annum.

    Goa is the only State in the country which possesses thedistinction of achieving high level of both economic and socialdevelopment. Average economic growth of 10% per annum, thehighest per capita income (Rs. 61,301/- per annum) and high levelof Social Infrastructure Indicators are the testimony for the same.Thus, the State has extremely favourable climate to aim tobecome a Model State.

    Goa is strategically located with good infrastructure facilities with acentrally located airport, a seaport, connectivity by excellent roadnetwork as also other essential infrastructure like ContainerFreight Station etc. The State boasts of one of the countryshighest tele-densities. Fibre optic connectivity too has spread itsnetwork across the State, bringing state of art telecommunicationto the people. Every village in the State is electrified. As regardspower for the industry, there is sufficient power reserve and the

    tariff has been pegged at very reasonable rates.

    PROCEDURE FOR LAND ALLOTMENT/REGISTRATION

    (i) The existing industrial estates will be further improved and landallotment process will be expedited by simplifying the procedures. TheGovernment has substantially reduced the stamp duty payable by theindustrial units.

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    (a) It is also proposed to increase the FSI (Floor Space Index) inindustrial estates and non-urban areas for the benefit of the industries.

    (b) The computerization of registration formalities that is in the process

    will simplify and expedite the registration process.

    (c) The existing Industrial Estates have already been notified and keptoutside the purview of local authorities.

    INFRASTRUCTURE DEVELOPMENT(refer to page 16 of appendix)

    A sound infrastructure is the backbone of a healthy economy. The Statealready possesses excellent infrastructure which include the highestnetwork density of roads, connectivity by rail to all parts of the country,an international airport (with another international airport in the pipeline)and a natural port. The State is also power surplus and has a strongtransmission and distribution network which is being further modernized.The Government has already reduced the tariff by about 7%. There isample supply of water. Efforts will be made to ensure timely andperennial distribution of water throughout the year.

    GOVERNMENT INSTITUTIONS

    INDUSTRIAL TRAINING INSTITUTES ( refer to page 13 ofappendix)

    TRAINING CUM PRODUCTION UNITS ( refer to page 13) TECHNICAL INSTITUTIONS ( refer to page 14)

    LABOUR REFORMS(refer to page 18)

    INCENTIVES:

    (i) Goa offers innumerable advantages to investors in terms of socialandphysical infrastructure. In addition, various incentives/subsidy schemesare already in operation.

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    (ii) To further boost investment in industrial sector, it is proposed to offera host of incentives and investor friendly measures. These measureswould not only provide a competitive advantage to State as an attractiveinvestment destination but also sustain the long term presence of

    industries.

    The following incentives/subsidies and investor friendlymeasures are proposed:

    A. EMPLOYMENT SUBSIDY:

    B.CAPITAL CONTRIBUTION SCHEME:

    C.SHARE CAPITAL TO SELF EMPLOYED / LOCALENTREPRENEURS:

    D. INTEREST SUBSIDY SCHEME:

    E. CERTIFICATION/PATENTING INCENTIVE:

    G. MEDICLAIM FACILITIES:

    J. EXPORT MARKET DEVELOPMENT SCHEME:

    K. EARLY BIRD OFFER:

    ( refer to page 20 onwards for the detailed explanation)

    DESCRIPTION OF OUR PRODUCT

    A thought form of a Japanese author TOKUTSU HARUNORI (Ishida

    Co. Ltd.JPN)

    Journal Title: JPI Journal

    VOL.41: NO.5: PAGE: 420 24 (2003)

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    Figure & Table & Reference: FIG.4

    Abstract: More attention has been paid to foreign objects mingled in

    food in the last few years, which also increased the demand for metal

    detectors to be installed in food production lines. To be more specific,the demand for metal detectors includes inspection sensitivity,

    traceability as quality control devices as well as consideration for

    hygiene and safety.

    Since its principle defers from that of x-ray foreign object

    detectors, it can be predicted that both metal and x-ray detectors

    will co-exist in the future.

    Source: sciencelinks.jp

    In an attempt of carrying forward the vision of the Japanese author, and

    strive for creating newer and better security devices by the R&D

    department, the co. has innovated a product by merging the efficiencies

    and workings of the metal detectors and the X-ray machines. The

    innovation has been names as METALEX, a security testing device.

    About the Innovation

    At present the metal detectors and the X-ray machines function on two

    different platforms at the airports. The travellers first pass through the

    U-shaped metal detectors for any metal devices and later their

    belonging such as shoes, watch, mobile phones, laptop, spectacles etc

    are scrutinized for any sharp or harmful equipments or devices through

    the x- ray machines.

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    Metalex combines the functioning of both the metal detectors and the x-

    ray machines as it checks the travellers for any metal devices and other

    belongings at the same time, saving a lot of time, cost and efforts.

    Functioning of the Innovation

    The device Detno Tracker combines the pulse induction technology

    of the metal detectors and the dual-energy X-ray technology of the

    X-ray machines into a single security device.

    This technology sends powerful, short bursts (pulses) of currentthrough the coil of wire. Each pulse generates a brief magneticfield. When the pulse ends, the magnetic field reverses polarityand collapses very suddenly, resulting in a sharp electrical spike.

    This spike lasts a few microseconds (millionths of a second) and

    causes another current to run through the coil. This subsequentcurrent is called the reflected pulse and lasts only about 30microseconds. Another pulse is then sent and the process repeatsranging from about 25 pulses per second to over 1,000.

    A sampling circuit in the metal detector is set to monitor the lengthof the reflected pulse. By comparing it to the expected length, thecircuit can determine if another magnetic field has caused thereflected pulse to take longer to decay.

    If the decay of the reflected pulse takes more than a fewmicroseconds longer than normal, there is probably a metal objectinterfering with it.

    The sampling circuit sends the tiny, weak signals that it monitors toa device call an integrator.

    The integrator reads the signals and amplifying and convertingthem to direct current (DC).The DC's voltage is connected to an

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    audio circuit, where it is changed into a tone which acts as anindicator when metal is detected.

    While the above process is going on , the X-ray feature of the devicealso works simultaneously.

    As the travelers pass through Detno Tracker, electromagnetic waves fallon their body, which are capable of penetrating through the body and

    belongings of the travelers ranging 140 to 160 kilovolt peak (KVP). Thehigher the KVP, the further the X-ray penetrates.

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    After the X-rays pass through the item, they are picked up by adetector. This detector then passes the X-rays on to a filter,which blocks out the lower-energy X-rays.

    The remaining high-energy X-rays hit a second detector. Acomputer circuit compares the pick-ups of the two detectors tobetter represent low-energy objects, such as most organicmaterials.

    Since different materials absorb X-rays at different levels, theimage on the monitor lets the machine operator see distinct itemsinside your bag. Items are typically colored on the display monitor,

    based on the range of energy that passes through the object, torepresent one of three main categories:

    Organic Inorganic Metal

    While the colors used to signify "inorganic" and "metal" may varybetween manufacturers, all X-ray systems use shades of orange torepresent "organic." This is because most explosives are organic.

    Machine operators are trained to look for suspicious items -- and not justobviously suspicious items like guns or knives, but also anything thatcould be a component of an improvised explosive device (IED).

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    Key benefits of the Innovation:

    Reducing power consumption to the point where it would operatefor 9 months on a set of D cells, eliminating the necessity for anon/off switch thus preventing its alarm function from being easilydefeated.

    Design's ability to operate in an environment with a high degree ofambient magnetic noise

    Saves cost

    Increases security and provides acute supervision.

    PRODUCTION

    PLAN

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    Production Plan

    For the purpose of undertaking the production of the Innovation Detno

    Tracker, Metalax Pvt Ltd has decided to set up its production plant in

    Goa, in Panji, as it is already the hub metal detector manufacturing

    units.

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    Production plan specifications:

    Nearly 33 crs investment in acquiring land in Panji, Goa

    10 acres of land @ 6000-7000 (Commercial rates) per squareyards. This accounts for nearly 3.3 crore per acre.

    The machines shall be imported from Taiwan and China asEuropean and American imports dominate the high price high

    quality segment, while Taiwan, Korea and China dominate thelower end of the market.

    Production Quality:

    Quality is considered to be the most essential factor in the growth of the

    company. With us, quality is not only limited to the products but we

    believe in maintaining quality throughout the production process. All the

    processes at our unit conform to the international standards and arecarried out under the supervision of our quality managers.

    In order to deliver superior quality metal detectors & electronic

    instruments, we make sure that all the raw materials used are premium

    in quality. Procured from reliable vendors, they are first tested then used

    in the production process. Once the finished products are produced,

    they are tested using micrometer testing machines at our in house

    quality testing unit.

    The finished products are stringently tested on different parameters

    before being delivered to the clients. The parameters are:

    Amplifying rate Electricity consumption ability Durability Reliability Long working life

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    The in house & out house manufacturing unit has all the tools and

    machines to facilitate the different production processes easily. Capable

    of satisfying the bulk requirements of clients, our unit is fitted with best

    production machines that can work for long hours. For a hindrance-free

    and uninterrupted production, the machines are constantly upgraded

    and maintained at regular intervals.

    The co. has an in house R&D Lab and excellent Calibration Lab. All our

    facilities conform to NPL/ISO standard and have NABL traceability.

    Our team

    We have the support of an excellent team of engineers, electronic

    equipment designers and other professionals. Our team members are

    highly qualified and competent professionals who have an experience of

    12-15 years. Understanding the clients' needs and requirements, they

    design and develop products that are cost effective and operate

    effectively with minimum maintenance.

    Raw material

    The production process undergoes the processing of raw materials such

    as:

    Steel Ferro-Alloys

    Bras Mica

    Aluminium Zinc

    Copper Copper-Nickel Nickel

    Silica

    Suppliers:

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    The co. has an efficient and a wide spread distribution and suppliers

    network in Goa and near by states that provide the co. with the

    necessary raw parts and material to be processed. Some of such

    suppliers are:

    Unique Equipments, Goa

    Location:

    Opposite Goa Flour Mill, Devsuvaddo, Chicalim,

    Goa,

    Goa, India, 403 711.

    Super Safety Services, Mumbai

    Address: 5, Ground Floor, 349/353, Indu Chambers, Samuel

    Street, Masjid (W),

    Mumbai, Maharashtra - 400 003, India

    Phone: +(91)-(22)-23473300/23473311 Fax: +(91)-(22)-

    23473024

    Website: http://www.supersafety.in

    Hitech Transducers & Devices - Pune

    Address : A3/6,Dharamveer Park , Near Damodhar

    Soy.,Chintamani Nagar.

    Bibwewadi Pune 411037 India

    Others are:

    Subtronics (India) Pvt Ltd Technofour Electronics Pvt Ltd

    Jay Instruments & Systems Pvt Ltd Magnetics Corporation of India. and many others

    http://www.supersafety.in/http://www.supersafety.in/http://www.supersafety.in/http://www.supersafety.in/http://www.supersafety.in/
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    Production Process:

    The production process involves economical and reliable methods of

    protecting crushers and conveyers and other equipments from

    potentially costly damage. This helps reducing down town and ensures

    the production process stays operational.

    Microprocessor based continuous level measure indicators provide

    critical material feed and inventory levels required to keep the aggregateproduction process running- ensuring there is always product available

    for the crushing and screening process.

    Product Testing

    First stage: Under laboratory conditions, will run tests on awide range of metal detectors using the using micrometertesting machines. We will run the test campaigns together withother international partners in order to assess the capabilities

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    of off-the-shelf new detectors. In particular, we will monitor thefollowing:

    o The immunity and performance under environmentalstresses (vibration, temperature, moisture andelectromagnetic compatibility).o The logistics and ergonomics aspects (dimensions,weight (balance, moment of inertia), battery life, setup,alarms, transport case, etc.).o The detection capability with specific soils and mines.

    Second stage : Field tests are also conducted under realisticconditions using the using micrometer testing machines, usingthe same metal detectors as during the first stage as well asmetal detectors already in use in each region. This opportunityis used to collect environmental data influencing the suitabilityof metal detectors.

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    MARKET PLAN

    MARKET OVERVIEW

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    Based on their distributors clusters, the market of detection and sensing

    devices are largely classified into three basic segments that are 1) metal

    detectors, 2) CCTV, and 3) fire and gas detection devices.

    1) Metal Detectors: Walk through and hand held metal detectors arethe two principal devices used for metal detection. Last year sales ofwalk through and hand held metal detectors totaled about $25 Million(Baht 1000 Million). Walk through accounted for 60% of the total marketvalue while hand held metal detectors made up the remaining 40%.

    Government offices primarily of the military and police as well as airportshave traditionally been the major buyers of metal detection devices.However, the increasing security threat of both global and local sources

    induces demand for metal detectors among an increasing number oforganizations such as embassies, banks, and commercial offices.Moreover, new applications of metal detectors also expand their marketpossibilities. Hospitals and industrial plants are the additional groups ofbuyers who use hand held metal detectors beyond their traditional meanof weapon detection. Metal detectors are used to ensure that postsurgery patients are clear of metal objects like accidentally left operatingtools in their bodies. Manufacturing plants of jewelry, and high valuenuts and bolts use metal detectors to prevent their workers from stealingoff of the work floor.

    2) CCTV: Experts estimate the CCTV system to make up 70% of theoverall safety and security market. The segment has an estimatedannual value of $75 Million (Baht 2,000-3,000 Million). CCTV is themost popular detection devices in the market either as the only detectiondevice used or as one of the multiple devices used. This is becauseCCTV, in addition to detection, provides records that make trackingpossible if such a need ever arises.

    Government Institutions are the largest group of buyers with sales in thissector as high as 60% of the overall market. Sales made to airports is70% of government purchase, while all other government offices makesup the other 30% of the market. Sales to commercial institutions makeup the remaining 40% of the overall sales of CCTV systems in India.Commercial buildings including commercial banks, shopping complexes,residential buildings, manufacturing plants and warehouses,

    3) Fire and Gas Detection Devices: Gas detectors, with their higherunit price, make up the largest portion of the fire protection system. The

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    market is estimated to be worth about $500,000 (Baht 20 million), andaccounted for about 40% of the $1.25 Million market of the overall fireprotection systems.

    Major buyers are plants in high hazard and special risk industries suchas petrochemical, oil refinery gas. Gas detection devices are sold aspart of the overall system. The complete system includes gas detectionequipment, flame, smoke and heat detectors, plant sirens and explosionproof electrical fittings amongst many others

    Companies in the business normally offer the devices along with systemdesign, engineering, supply of equipment, installation, testing andcommissioning. For example, one of the leading safety companies for

    the high hazard industries offers comprehensive lines of products thatinclude: ultraviolet and infrared (IR/IR and UV/IR) flame detection,smoke, thermal and linear heat detection, aspirating smoke detectionsystems, conventional and addressable control systems with interactiveconnection capabilities to central control and monitoring facilities, carbondioxide (CO2) and water mist extinguishing systems.

    MARKET TRENDS

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    The increasing security threat to lives and property has brought about a

    major increase in demand for sensing and detection devices. Upgrades

    of security measures and relevant technology, particularly detection

    devices at international airports and seaports, are a direct result of

    the global calls for preventive measures against possible terrorist

    threats. Thus, marked growth of the detection devices market in recent

    years following 9-11 has been a result of the Governments increase in

    investment for security standards that meet with global requirements.

    In addition, the subsequent domestic unrest further increases demand

    for detection devices. The unrest in Thailands three southernmost

    provinces that caused a bomb attack at one of the provincial airports,

    and a shopping mall in the South, despite their limited damage, urged

    the Government to improve security measures at Government office

    buildings, public areas and especially airports of both domestic and

    international. Increasing sales of CCTV and metal detection devices

    has been a direct result of this.

    For the same reason, industry experts expect the market for metal

    detection devices to expand further at a projected rate of 30-40%

    over the next few years. Purchase of detection devices are expected

    to come from both the Government and private sectors. The

    Government is expected to invest further for better security and

    preventive measures at additional premises deemed as potential hi-

    threat areas.

    Moreover, application of detection devices for theft prevention

    purposes creates an important demand trend in the market.

    Furthermore, industry experts project a continuing increase in sales of

    hand held metal detectors to business operators for the purpose of theft

    prevention. CCTVs are installed at warehouses to prevent possible theft

    of their inventory. Similarly, industrial plants using precious metal and

    jewelry factories employ hand held metal detector as a preventive

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    measure against theft of their raw materials and or finished products

    from their production sites.

    Unlike metal detectors and CCTV, demand growth in the gas and fire

    detection devices market tends to correspond more with economic

    growth and expansion of relevant industries. In addition, routine

    replacements of existing gas and fire detection devices at industries also

    make up a substantial amount of sales in this market. Hence, demand

    growth in this segment is relatively stable. Local experts estimated

    growth in this market segment to average at 10% per year for the next

    few years.

    THE FUTURE OF METAL DETECTORS

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    The importance of metal detectors in today's society is growing. With

    this growth one can only speculate that there will be great advances in

    metal detector technology within the coming years. Simply put as the

    demand for metal detectors grows the technology will also grow.

    Hobby metal detectors have only recently been able to accurately

    discriminate, identify and locate targets in the earth at over several

    inches. One can expect advances in hobby type metal detectors to

    levels that are now un-imaginable.

    Metal detectors for security and industry have also made some

    exceptional advances and will continue to in the coming years.

    Technologies will be developed to not only detect metals, but alsoidentify them with a visual outline of the metals detected. These

    advances will make our lives much safer and more secure.

    Some of the most notable advances in metal detector technology are

    those made by Minelab Metal Detectors. Minelab has shocked hobbyists

    with its BBS and FBS metal detecting technologies. These new

    technologies improve upon VLF technology. Most metal detectors use

    one frequency while in operation. Minelabs FBS and BBS metal

    detectors use multiple frequencies, 17 frequencies in their BBS

    technology and 28 frequencies in their FBS technology. These

    technologies have improved upon many aspects that limited other metal

    detectors.

    THE 7 PS OF MARKETING

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    PRODUCT:

    This is a walk-through metal detector, with an x-ray machine, performingthe 2-in-1 function.

    The present invention relates to an improvement of metal detectorssuch as those typically found in office buildings and airports. Such metaldetectors are the type where persons and objects pass through amagnetic field created by circuitry in the detector whereby the presenceof metal may be determined. Most such metal detectors are based onpulse induction technology, and while the improvement of this invention

    may be used with virtually any type of walkthrough metal detector, it isbelieved that the improvement will be utilized primarily in combinationwith pulse induction detectors.

    It also has an x-ray machine, which can detect and differentiate between

    harmful metal devices and harmless ones, as and when a person

    passes through the detector. This save the travelers the time and

    provides ease and comfort, as they dont have to remove anything from

    their pockets and clothes.

    PRICE:

    The metal detector is a highly advanced machine, comprising of an x-ray

    machine also, and hence has been made with a lot of R&D and testing,

    using world-class technology.

    This is one of its kind in the world, with no other company providing with

    such an innovative product, hence it has been priced at Rs 1.5 crore.

    PLACE:

    The company would be set-up in Goa, where the production would be

    done. From Goa, the metal detectors would be transported to various

    airports of the country through a safe and reliable transport system.

    MARKET ENTRY

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    For metal detectors market, a sole distributorship is a commonarrangement. Because reliability and quality are primary featuressought after by the market, brand recognition and distributors quality areessential elements.

    Exclusive arrangement prevents competition among multipledistributors of the same product makes which often can lead to pricecutting and lower the overall standard of marketing and support servicesof the local distributors.

    Metal detection require a certain level of continuity over the project lifeand accountability on the system and products performance.

    PROMOTION:

    Since this is a technical product, which needs to be sold to government

    only, it needs more of a one-to-one interaction, demonstration and

    selling to the officials.

    No such promotion strategy is needed.

    PEOPLE:

    We would be hiring expert personnel with highly technical knowledge

    about the metal detectors, who would look after the plant, operations,

    interaction with the government officials and various agencies who are

    interested in purchasing it.

    We would roughly employ 100 employees in the Goa plant, to look after

    the operations and R&D.

    Some of the employees would be doing fieldwork, who would visit

    various agencies in India and sharing information about the product.

    PHYSICAL EVIDENCE:

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    A state of an art technology and infrastructure would be made in Goa,

    which would be highly securitised.

    Since the employees need to work with chemicals and radiations, a lot

    of safety measures would be taken in the plant.

    A medical section would be made to keep the employees safe and

    healthy.

    There would an office in Goa, to entertain visitors who would like to

    interact with the company officials and directors.

    PROCESS :

    The machines would be imported from Taiwan, to the production unit at

    Goa.

    In Goa, the R&D would take place and the walk-through metal detectors

    having an x-ray would be manufactured.

    From Goa, it the metal detectors would be transported and installed in

    the various domestic and international airports in the country, and alsothe malls and cinemas if the demand is generated.

    SEGMENTATION:

    Benefit based segmentation:

    The walkthrough metal detector cum x-ray would be benefial to the

    airport authorities in the following way:

    Saves time

    Convenience enhancer

    Traveller satisftaction: as they dont have to remove all their metal

    accessories.

    Ease of use

    TARGET MARKET:

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    It would be sold at all domestic and international airports of the country

    The scope can be further expanded by selling in the malls and

    multiplexes, as they have started taking safety measures.

    It is a complicated technical product hence would require direct selling

    with a lot of clarification regarding its functioning.

    End Users

    In addition to Government organizations and embassies, end users

    of sensing and detection devices encompass a large number of

    diversified groups of organizations deemed to be under security threateither to lives or property. They include banks and financial

    institutions, gold bullion/mint corporations, high security printing

    businesses, hotels, educational institutions, gem and diamond

    cutting enterprises, high rise office buildings, oil refineries and

    petrochemical plants, large manufacturing plants, entertainment

    venues and condominiums, etc. Regardless of their diversified

    nature, end users can largely be classified into two groups; the

    government, requiring a formal bidding in their purchase and privatesector requiring no formal bidding process.

    Selling procedure

    Selling through a bidding process in most cases involves a longer time

    and more people in the decision making process. Potential suppliers for

    projects are required to work on the process since the beginning whenactual users of the subjected device prepare their requirements

    proposal, and where the desired specifications are stated which in turn

    the criteria of qualified supplier are. Once becoming qualified, these

    suppliers need to follow up on the project till the time the budget

    becomes available and eventually the purchasing committee makes the

    decision to award the contract. Because most bidding projects are of

    high monetary value where most people involved have certain degree of

    influence, success in the bidding process requires more than having aproduct with the right feature / quality at the most competitive price.

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    Right strategy and relationship are needed. In general, having a local

    representative is key to these essential competitive elements, and hence

    it is recommended if not required that U.S. exporter(s) of detection

    devices have a capable local representative.

    Similarly, selling to the market with no formal bidding process, generally

    to private sector customers also requires a capable local representative.

    Product features responding to the buyers requirements and

    competitive price are key to the buying decision. However, local

    representatives good reputation in the market enhances the products

    quality & reliability in the buyers perception. Meanwhile, their market

    coverage and good rapport with potential buyers increases their market

    possibilities.

    MARKET ACCESS

    Intense competition in the market is the major barrier to a successful

    entryofdetection devices in India. Imported detection devices are not

    subject to any non-tariff barrier in India. Consequently, local companiesbring in and market such devices as market opportunities arise. The

    ease of market entry increases the number of players and products that

    result in increased competitive pressure in the market.

    MARKET SIZE-

    India has 31 states, with atleast 2 airports in almost all states.

    If we sell our product to all the states, we can sell up to minimum

    of 62 detectors.

    The no. of malls and multiplexes in India is increasing every year.

    All the malls and multiplexes have regulated strict safety and

    security norms after the terror attacks.

    We can also export out detectors to other countries as the prices

    would be lower when compared on an international basis.

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    The overall market value of sensing and detection devices in India

    is estimated at more than $100 million per year. The market is

    expected to grow more than 30% in the next few years, mainly as

    a result of increasing spending for greater security and safety of

    life and property in both public and private sectors.

    Demand for metal detectors and CCTV is on the rise as the Indian

    Government upgrades security measures and technologies and

    expands safety coverage areas in response to both global and

    domestic requirements.

    In addition, demand among business operators is also on the rise

    as their needs for better prevention for potential loss and damages

    to lives and property increases.

    American sensing and detection devices compete particularly

    well in the high-end market, which accounts for 70% of the

    market. Quality and technology that result in greater reliability are

    the key competitive advantage for American products in this

    market segment where cost of failure of the devices is formidable.

    Hence, India offers good export opportunities for American

    sensing and detection devices. However, American suppliersneed to identify capable distributor(s) in the country to effectively

    explore opportunities and successfully market their products.

    IMPORT MARKET

    Imports encompass all sensing and detection devices in the Indianmarket. European and American imports dominate the highprice high quality segment, while Taiwan, Korea, China andIndia dominate the lower end of the market.

    U.S. makes have about 70-80% share of the CCTV market, 30-40% of the metal detection market, and close to half of the fireand gas detection devices for industries.Similarly, European makes, principally Italian ones, dominate themetal detection market with 30-40% share, while U.K. ones are inthe fire and gas detection devices. Makes from Taiwan, Korea

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    and China are popular in the lower end market segment, mostprominently the CCTV market, accounting for about 20%.

    Local content of the detection devices market is minimal and

    limited to simple devices such as sprinklers, assembling work inthe CCTV market and some engineering and design work on the

    industrial gas and fire detection systems.

    COMPETITION:

    U.S. makes together with European ones are leaders in the high-

    end segment of the detection and sensing devices market because

    of their technology and product quality. Their prime target market is

    composed of Government organizations, hi-threat public areas,

    embassies, large corporations, large manufacturing operations, of which

    cost of failure to prevent loss /damage of and/or to protect the intended

    property is formidable. As a result, reliability and capability of U.S.

    and European products are their prime competitive advantages.

    Furthermore, the use of American safety standards in high hazard

    industries gives U.S makes a distinct advantage in markets such as

    refineries and the petrochemicals industry. This is because safety

    standards for these industries are set according to that of the National

    Fire Protection Association (NFPA) where specifications of safety-

    related products and equipment are based on UL and ANSI standard

    codes. U.S. detection and sensing devices are qualified based on the

    same standards as those specified in the design and are at major

    advantage to dominate the segment.

    In contrast, U.S. and European makes do not compete well in the

    lower end segment of the market where price is the markets prime

    consideration. Makes from Taiwan, Korea, China and India

    dominate this segment of the market, which accounts for 30% of

    the overall sensing and detection devices market value. Average priceof a typical product in this segment is about one third of a U.S. one.

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    But, the walkthrough metal detector is one of its kind with an x-ray

    machine attached to it. Nowhere in the world both these features

    have been integrated into a single product, which not only savestime and money, but also enhance convenience for the travellers

    but also the airport officials.

    We will patent the technology, so that no one else can copy our

    technology. Hence till the time the patent rights last, we will have

    no completion.

    RISK ASSESSMENT

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    RISK OF NOT ACHIEVING THE PROJECTED PROFITS AND

    SALES REVENUE AS PROJECTED

    RISK OF THE INNOVATION NOT BEING ACCPETED BY THE

    GOVERNMENT FOR THE AIRPORTS.

    RISK OF THE PRODUCT NOT MEETING THE EXPECTATIONS

    ANS UTILITY AS WAS PLANNED.

    WAYS TO OVERCOME THE RISKS:

    Since we are already into the business of making security

    equipments like metal detectors, CCTV etc, we can simplify the

    product and sell them as ordinary metal detectors as we have

    been since so many years.

    We have many other opportunities and avenues to sell thisinnovative product at schools, prisons, malls, multiplexes,

    hospitals, banks and financial institutions, gold bullion/mint

    corporations, high security printing businesses, hotels, educational

    institutions, gem and diamond cutting enterprises, high rise office

    buildings, oil refineries and petrochemical plants, large

    manufacturing plants, entertainment venues and condominiums,

    etc.

    We also have a lot of scope in the world market, where we can

    export the product at low cost, as US and Europe are the countries

    who sell this product in the high price segment, we can target the

    low cost segment.

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    FINANCIALPLAN

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    NAME OF THE COMPANY: METALAX PVT. LTD.

    NAME OF THE INNOVATIVE PRODUCT: DETNO TRACKER

    PLACE: PANJI, GOA

    INVESTMENT REQUIRED: Rs 120 CORE

    TIME PERIOD FOR REPAYMENT OF BANK LOAN WITH INTEREST:

    7 YEARS. AFTER WHICH IT WILL BECOME A SELF SUSATAINING

    COMPANY

    1ST

    YEAR : LOSS OF Rs 7, 90, 00,000

    SUBSEQUENT 2 YEARS : PROFIT OF Rs 6-20 CRORE

    EXPECTED.

    SOURCES OF FINCANCE

    RS 20: PROVIDED BY ENTREPRENEURS THEMSELVES

    RS 40: Economic Development Corporation of Goa and Goa

    Industrial Development Corporation (Interest rate 14% p.a)

    RS 60: VENTURE CAPITALIST. (Return of 25% on profits)

    BREAK UP OF INVESTMENT

    CASH IN HAND - RS 20 CRORE

    PLANT AND MACHINERY - 35 CRORE

    FACTORY BUILDING - 15 CRORE

    LAND - 30 CRORE

    RESERVE - 15 CRORE

    WORKING CAPITAL AND OVERHEADS - 5 CRORE

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    EXIT ROUTE FOR THE VENTURE CAPITALISTS

    The venture capitalists, will be getting a 25% return on the profits earned

    by the company upto 7 years, after which it has the following options to

    exit-

    1. They can issue an IPO and sell of their share as equity.

    2. The existing entrepreneurs can buy their share.

    3. They can sell their share to the Goa government.

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    PROJECTED P&L ACCOUNT AND BALANCE SHEET FOR YEAR 1

    Income Statement for the year ending 1

    Wages & Salary 30000000 Gross profit 150000000

    Electricity Bill 18000000

    Power backup 12000000

    Medical & confectionary 12000000

    Insurance 15000000

    TQM 15000000

    Bank Interest 56000000

    Depreciation-

    Land @ 5% 15000000

    Factory @ 10% 15000000

    Machinery @ 10% 35000000 Net loss 79000000

    Interest on capital @ 6% 6000000

    150000000 150000000

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    PROJECTED P&L ACCOUNT AND BALANCE SHEET FOR YEAR 2

    Income Statement for the year ending 2

    Wages & Salary 31800000 Gross profit 300000000

    Electricity Bill 19080000

    Power backup 12000000

    Medical & confectionary 12720000

    Insaurance 15000000

    TQM 15900000

    Bank Interest 56000000

    Depreciation

    Land @ 5% 15000000

    Factory @ 10% 15000000

    Machinery @ 10% 35000000

    Interest on capital @ 6% 6000000

    Net profit 66500000

    300000000 300000000

    Increase @ 6% Inflation

    Balance Sheet as on Year 1

    Libilities Assests

    Capital 100000000 Plant / Machinery 350000000

    (Less) Net loss 79000000 (less) Depr @ 10% 35000000

    21000000 315000000

    (Add) Int @ 6% 6000000 Land 300000000

    27000000 (less) Depr @ 5% 15000000Bank loan 400000000 285000000

    Reserves 150000000 Factory 150000000

    Bank overdraft 150000000 (less) Depr @ 10% 15000000

    B/P 200000000 135000000

    Creditors 240000000 Patents 200000000

    O/S Expenses 170000000 B/R 150000000

    Pre paid expenses 52000000

    cash in hand 200000000

    1337000000 1337000000

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    Balance Sheet as on Year 2

    Libilities Assests

    Capital 100000000 Plant / Machinery 315000000

    (Add) Net profit 66500000 (less) Depr @ 10% 35000000

    166500000 280000000

    (Add) Int @ 6% 6000000 Land 285000000

    172500000 (less) Depr @ 5% 15000000

    Bank loan 400000000 270000000

    Reserves 150000000 Factory 135000000

    Bank overdraft 170000000 (less) Depr @ 10% 15000000

    B/P 230000000 120000000

    Creditors 240000000 Patents 200000000

    O/S Expenses 200000000 B/R 340000000

    Pre paid expenses 102500000

    cash in hand 200000000

    1512500000 1512500000

    PROJECTED P&L ACCOUNT AND BALANCE SHEET FOR YEAR 3

    Income Statement for the year ending 3

    Wages & Salary 33708000 Gross profit 450000000

    Electricity Bill 20224800

    Power backup 12000000Medical & confectionary 13483200

    Insaurance 15000000

    TQM 16854000

    Bank Interest 56000000

    Depreciation

    Land @ 5% 15000000

    Factory @ 10% 15000000

    Machinery @ 10% 35000000

    Interest on capital @ 6% 6000000

    Net profit 211730000

    450000000 450000000

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    Increase @ 6% Inflation

    Balance Sheet as on Year 3Libilities Assests

    Capital 100000000 Plant / Machinery 280000000

    (Add) Net profit 211730000 (less) Depr @ 10% 35000000

    311730000 245000000

    (Add) Int @ 6% 6000000 Land 270000000

    317730000 (less) Depr @ 5% 15000000

    Bank loan 400000000 255000000

    Reserves 150000000 Factory 120000000

    Bank overdraft 150000000 (less) Depr @ 10% 15000000

    B/P 250000000 105000000

    Creditors 270000000 Patents 300000000

    O/S Expenses 230000000 B/R 390000000

    Pre paid expenses 162500000

    Short term Investment 60230000

    cash in hand 250000000

    1767730000 1767730000

    CASH FLOW STATEMENT FOR YEAR 1

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    PARTICULARS DETAILS AMOUNTCash flow from operating activitiesnet loss -12500000ADD: depriciationplant/ machinery 35000000

    Land 15000000Factory 15000000Net working capital 52500000ADD: increase in bills payable 30000000ADD: increase in outstanding expenses 30000000LESS: increase in bills recevables -190000000LESS: increase in prepaid expenses -5050000NET INCREASE OR DECREASE OFCASH -82550000LESS: bank overdraft -20000000ADD: opening cash balance 200000000CLOSING CASH BALANCE 97450000

    PROJECTED SALES REVENUE

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    In the 1st year we are going to target 5 states of India (each state

    includes 2 Airports) , that means we are targeting 10 airports & we are

    going to manufacture 10 machines. The cost per machine is Rs. 1.5

    crore. Therefore our first year sales revenue is projected at Rs.

    150000000.

    In the 2nd year the target will be extended up to 10 states i.e., we will sell

    20 machine, then the sales revenue will be Rs. 300000000.

    In the next year we will sell 30 machines in fifteen different states.

    Hence the sales revenue will be (30 x 1.5cr.) i.e., 450000000.

    PROJECTED BUSINESS EXPENSES

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    As mentioned in the Profit & Loss A/c, the existing Inflation rate is 6%.

    Therefore all the business expenses are subjected to increase by 6%every year.

    Bank Interest is will remain constant for each year.

    Depreciation is calculated as per the following:

    Land @ 5%

    Factory @ 10%

    Machinery @ 10%

    Interest on Capital is calculated @ 6% per year.

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    PROJECTED PROFIT/LOSS

    Since it is a new business, people know very less about it, the company

    will not earn much profit in the first year because there are no clientele in

    this year. We will establish ourselves in the initial year that will cost a lotto the company. Therefore it is projected that the company will suffer

    from losses in the first year. The projected loss for the 1st year is Rs.

    79000000

    The projected profits for the second year are Rs. 66500000. In this year

    the business will establish itself, the goods will be manufactured on the

    basis of order received. We expect to get quite a few orders that will

    generate profit for us.In the third year, since our targets will be higher, therefore we expect

    higher profits of the business. The profit for the third year is expected to

    reach up to Rs. 211730000.

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    APPENDIX