PROJECT REPORT

Of

WOOD CARVING

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Wood Carving.

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in

project identification for investment and in order to serve his objective; the document covers various
aspects of the project concept development, start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can also
prepare project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak Building ,

27/1/B, Gokhlley Marg, Lucknow-226001

Delhi Office : Multi Disciplinary Training

Centre, Gandhi Darshan Rajghat,
New Delhi 110002

Email : info@udyami.org.in
Contact : +91 7526000333, 444, 555
 PROJECT AT A GLANCE

1 Name of the Entreprenuer xxxxxxxxxx

2 Constitution (legal Status) xxxxxxxxxx

3 Father / Spouse Name xxxxxxxxxxxx

4 Unit Address : xxxxxxxxxxxxxxxxxxxxxxx

District : xxxxxxx
Pin: xxxxxxx State: xxxxxxxxxx
Mobile xxxxxxx

WOOD CARVING
PRODUCTS(PHOTO
5 Product and By Product : FRAMES)

6 Name of the project / business activity proposed : WOOD CARVING UNIT

7 Cost of Project : Rs.24.43 Lakhs

8 Means of Finance
Term Loan Rs.19 Lakhs
Own Capital Rs.2.43 Lakhs
Working Capital Rs.3 Lakhs

9 Debt Service Coverage Ratio : 2.75

10 Pay Back Period : 5 Years

11 Project Implementation Period : 5-6 Months

12 Break Even Point : 23%

13 Employment : 7 Persons

14 Power Requirement : 40.00 HP

15 Major Raw materials : Natural wood, MDF, Paint, Thinner, Sealer

16 Estimated Annual Sales Turnover (Max Capacity) : 81.69 Lakhs

17 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lakhs)

Particulars Amount
Land (1200-1500 sqft.) Own/Rented
Plant & Machinery 20.10
Furniture & Fixtures 1.00
Working Capital 3.33
Total 24.43

MEANS OF FINANCE
Particulars Amount
Own Contribution 2.43

Working Capital(Finance) 3.00

Term Loan 19.00

Total 24.43
 WOOD CARVING

Introduction: Wood carving is a form of woodworking by means of a

cutting tool (knife) in one hand or a chisel by two hands or with one hand on a
chisel and one hand on a mallet, resulting in a wooden figure or figurine, or in
the sculptural ornamentation of a wooden object. The phrase may also refer to
the finished product, from individual sculptures to hand-worked mouldings
composing part of a tracery. The making of sculpture in wood has been
extremely widely practised, but survives much less well than the other main
materials such as stone and bronze, as it is vulnerable to decay, insect damage,
and fire. It therefore forms an important hidden element in the art history of
many cultures.[1] Outdoor wood sculptures do not last long in most parts of
the world, so it is still unknown how the totem pole tradition developed. Many
of the most important sculptures of China and Japan, in particular, are in
wood, and so are the great majority of African sculpture and that of Oceania
and other regions. Wood is light and can take very fine detail so it is highly
suitable for masks and other sculpture intended to be worn or carried. It is
also much easier to work on than stone.
History of wood carving: Wood carvingis one of the oldest arts of
humankind. Wooden spears from the Middle Paleolithic, such as the Clacton
Spear, reveal how humans have engaged in utilitarian woodwork for
millennia. Indeed, the beginnings of the craft go so far back that, at least where
timber is present, the use of wood exists as a universal in human culture as
both a means to create or enhance technology and as a medium for artistry.
The North American Indian carves his wooden fish-hook or his pipe stem just
as the Polynesian works patterns on his paddle. The native of Guyana
decorates his cassava grater with a well-conceived scheme of incised scrolls,
while the native of Loango Bay distorts his spoon with a design of figures
standing up in full relief carrying a hammock. Wood carving is also present in
architecture.

Types of wood carving: Different types of wood carving techniques are as

follows:

1. Chip Carving: Chip carving is also known as Kerbschnitt to the

Germanpeople. This refers to the type of wood carving where the use of
chisels is encouraged. The aim of the chisels is to remove or detach
small chips of the materials that are to be carved. The material that is
usually worked on is a surface and usually is in a single piece.
2. Relief Craving: This type of wood carving is usually done by carving
figures into a panel of wood which is usually flat. The figures which are
carved into it would then take up a slightly projected shape from the
background which it has been carved into. There are two major
categories of relief carving. They include the high relief carving and the
medium relief carving.
3. Chainsaw Carving: This type of wood carving is the fastest growing art
in the world. This is due to the fact that it combines beautiful art with
the use of modern technology. This combination usually the key to
amazing carvings.
4. Treen Carving: This type of carving refers to the carving of household
items with wood. However, it is important to note that most Treen
 carving would not include the likes of household furniture like chairs
and cabinets.
5. Whittling: The act of whittling most times simply refers to using a tool
to carve out figures or shapes from wood. The tool which is normally
used is a knife or a chisel. It is however normally done with a small knife
rather a long knife as this is much more effective. These knives would
usually be made with big handles which would allow the users to have a
firm grip.

Types and characteristics of wood: Methods and styles of wood

carving include chip carving, relief carving, and Scandinavian flat-plane. Both
softwoods and hardwoods are used, principally oak, mahogany, walnut, elm,
limewood, chestnut, ebony, boxwood, cedar, cypress, olive, teak and pine.
Wood has various advantages, because of its fibrous strength, it can be carved
more thinly and precisely than stone or animal bone. For large compositions,
two or more pieces of wood may be carved then joined. Softwoods are easier
to shape, but less durable. No wood is as durable, weatherproof or insect-
immune as stone, and thus is used mainly for indoor works. Lastly, whatever
wood is used, it remains an anisotropic material (its properties differ when
measured in different directions), and is strongest in the direction of the grain.

Wood carving Market Potential: Although wood carving tends to be an

artistic pursuit, there are practical reasons to create utensils, bowls, and other
daily-use items from the medium. Wood is more antibacterial than manmade
objects, they won’t scratch the coating on non-stick cookware, and simple
mineral oils provide care for the product. In the developing world, the wood
carving industry contributes a significant income for households. The wood
carving industry in India provides $65 million worth of revenues to the local
economy each year. In Saharanpur, there are 50,000 people employed as
wood carvers.
Machinery & equipments: Major machines & equipments are:
1. Wood Chemical Treatment Plant: It is used for the long life
preservation of wood, so that wood will remain safe from bacterial &
fungal degradation.
2. Wood seasoning plant & boiler: It is used for conditioning and
drying of wood.
3. Band saw machine: It’s used to cut wood blocks as per requirement.
4. Planer machine: It is used to plain the surface of wood.
5. Belt sander machine: It’s used for finishing of product.
6. Buffing machine: It’s used for polishing surfaces.
7. Wood Lathe machine: It’s used to provide shape to wood by tools.
8. Tools: Chip carving knife, Palm tools, Chain saw, Drill press, etc.

Cost of Machines:
Name Cost(Rs.)
Wood Chemical treatment Plant 350000
Seasoning machine 300000
Planer machine 550000
Joining machine 200000
Buffing machine 50000
Belt sander machine 150000
Wood Lathe machine 200000
Band saw machine 200000
Other tools & equipments 10000

Raw material: Basic raw material requirements are as follows:

S no. Name Cost
1. Natural wood Rs. 8 per kg
2. MDF Rs. 30 per sqft.
3. Paint Rs. 200 per kg
4. Thinner Rs 70 per kg
5. Sealer Rs. 150 per kg
Assuming raw material cost per piece to be 80 Rs. and selling price to be 150
Rs.

Manufacturing process:
 First of all design is prepared according to the type of product a person
wants to prepare & wood is selected according to design.
 Soft wood is used for the carving of complicated designs, which is
mostly used for the preparation of decorative items. On the other hand,
hard wood is used for the preparation of furniture and other household
items.
 In 20% wood MDF (medium density fibre) is attached according to the
design & cutting is done according to the shape of the product.
 Then cutting and carving is done according to the design of products
and Then all wooden parts are joined together.
 After joining of parts accessories can be added in the product according
to the demand of the client.
 Then sealing and painting work is done.
 Final checking of the product.

Area:

The industrial setup requires space for Inventory, workshop or manufacturing

area, space for power supply utilities and auxiliary like Generator setup. Also
some of the area of building is required for office staff facilities,
documentation, office furniture, etc. Thus, the approximate total area required
for complete industrial setup is 1200 to 1500Sqft.

Power Requirement –The power consumption required to run all the

machinery could be approximated as 40 hp.
Manpower Requirement– There are requirement of skilled machine
operators to run the machine set. Experience quality engineers are required
for desired quality control. Some helpers are also required to transfer the
material from one work station to other. Office staffs are required to maintain
the documentation. The approximate manpower required is 7 including 1
Plant operator, 1 unskilled worker, 1 Helper and 1 security Guard. 3 Skilled
worker including Accountant, Manager and sales personal each.

Approvals & Registration Requirement:

Basic registration required in this project:

 GST Registration
 Udyog Aadhar Registration (Optional)
 Choice of a Brand Name of the product and secure the name with
Trademark if require

Bank Term Loan: Rate of Interest is assumed to be at 11%

Depreciation: Depreciation has been calculated as per the Provisions of

Income Tax Act, 1961

Implementation Schedule:
S No. Activity Time required
1. Acquisition of premises 1-2 Months
2. Procurement & installation of Plant & Machinery 1-2 Months
3. Arrangement of Finance 1.5-2 Months
4. Requirement of required Manpower 1 Month
5. Commercial Trial Runs 1 Month
Total time Required (some activities shall run 5-6 Months
concurrently)

FINANCIALS
PROJECTED CASH FLOW STATEMENT

PARTICULARS I II III IV V

SOURCES OF FUND

Own Contribution 2.43 -

Reserve & Surplus 5.43 8.73 11.88 15.23 18.91
Depriciation & Exp. W/off 3.12 2.65 2.26 1.92 1.64
Increase In Cash Credit 3.00
Increase In Term Loan 19.00 - - - -
Increase in Creditors 0.72 0.13 0.14 0.15 0.16

TOTAL : 33.70 11.51 14.28 17.30 20.71

APPLICATION OF FUND

Increase in Fixed Assets 21.10 - - - -

Increase in Stock 1.66 0.29 0.32 0.34 0.36
Increase in Debtors 2.96 0.63 0.58 0.62 0.66
Repayment of Term Loan 2.11 4.22 4.22 4.22 4.22
Taxation 0.81 1.31 1.78 2.28 2.84
Drawings 4.00 4.50 6.00 8.00 10.00
TOTAL : 32.64 10.96 12.90 15.46 18.08

Opening Cash & Bank Balance - 1.05 1.61 2.99 4.82

Add : Surplus 1.05 0.55 1.38 1.84 2.63

Closing Cash & Bank Balance 1.05 1.61 2.99 4.82 7.45
PROJECTED BALANCE SHEET

PARTICULARS I II III IV V

SOURCES OF FUND
Capital Account
Opening Balance - 3.05 5.97 10.06 15.01
Add: Additions 2.43 - - - -
Add: Net Profit 4.62 7.42 10.10 12.94 16.07
Less: Drawings 4.00 4.50 6.00 8.00 10.00
Closing Balance 3.05 5.97 10.06 15.01 21.08
CC Limit 3.00 3.00 3.00 3.00 3.00
Term Loan 16.89 12.67 8.44 4.22 -
Sundry Creditors 0.72 0.85 0.99 1.14 1.30

TOTAL : 23.66 22.48 22.50 23.37 25.38

APPLICATION OF FUND

Fixed Assets ( Gross) 21.10 21.10 21.10 21.10 21.10

Gross Dep. 3.12 5.77 8.03 9.95 11.59
Net Fixed Assets 17.99 15.33 13.07 11.15 9.51

Current Assets
Sundry Debtors 2.96 3.59 4.17 4.79 5.45
Stock in Hand 1.66 1.96 2.27 2.61 2.97
Cash and Bank 1.05 1.61 2.99 4.82 7.45

23.66 22.48 22.50 23.37 25.38

TOTAL :

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS I II III IV V

A) SALES
Gross Sale 44.37 53.82 62.51 71.80 81.69

Total (A) 44.37 53.82 62.51 71.80 81.69

B) COST OF SALES

Raw Material Consumed 21.60 25.50 29.70 34.20 39.00

Elecricity Expenses 2.66 2.95 3.25 3.55 3.84
Repair & Maintenance 1.77 2.15 2.50 2.87 3.27
Labour & Wages 4.03 4.44 4.92 5.51 6.18
Depreciation 3.12 2.65 2.26 1.92 1.64

Cost of Production 33.18 37.70 42.63 48.06 53.92

Add: Opening Stock /WIP - 1.30 1.53 1.78 2.04

Less: Closing Stock /WIP 1.30 1.53 1.78 2.04 2.32

Cost of Sales (B) 31.88 37.47 42.39 47.79 53.64

C) GROSS PROFIT (A-B) 12.49 16.35 20.12 24.01 28.05

28.15% 30.39% 32.19% 33.44% 34.33%
D) Bank Interest (Term Loan ) 2.06 1.68 1.22 0.75 0.29
ii) Interest On Working Capital 0.33 0.33 0.33 0.33 0.33
E) Salary to Staff 3.78 4.54 5.44 6.26 6.89
F) Selling & Adm Expenses Exp. 0.89 1.08 1.25 1.44 1.63

TOTAL (D+E) 7.06 7.63 8.24 8.78 9.14

H) NET PROFIT 5.43 8.73 11.88 15.23 18.91

12.2% 16.2% 19.0% 21.2% 23.1%
I) Taxation 0.81 1.31 1.78 2.28 2.84

J) PROFIT (After Tax) 4.62 7.42 10.10 12.94 16.07

Raw Material Consumed Capacity Rate Amount (Rs.)

Utilisation

I 45% 80.00 21.60

II 50% 85.00 25.50
III 55% 90.00 29.70
IV 60% 95.00 34.20
V 65% 100.00 39.00
COMPUTATION OF MAKING OF WOOD CARVING

Item to be Manufactured Wood carving(Photo frames)

Manufacturing Capacity per day 200 wooden photo frames

No. of Working Hour 8

No of Working Days per month 25

No. of Working Day per annum 300

Total Production per Annum 60,000 wooden photo frames

Total Production per Annum 60,000 wooden photo frames
WOOD CARVING
PRODUCTS(PHOTO
Year Capacity FRAMES)
Utilisation

I 45% 27,000.00
II 50% 30,000.00
III 55% 33,000.00
IV 60% 36,000.00
V 65% 39,000.00
COMPUTATION OF SALE
Particulars I II III IV V

Op Stock - 900.00 1,000.00 1,100.00 1,200.00

Production 27,000.00 30,000.00 33,000.00 36,000.00 39,000.00

27,000.00 30,900.00 34,000.00 37,100.00 40,200.00

Less : Closing Stock(10 Days) 900.00 1,000.00 1,100.00 1,200.00 1,300.00

Net Sale 26,100.00 29,900.00 32,900.00 35,900.00 38,900.00

Sale Price per piece 170.00 180.00 190.00 200.00 210.00

Sale (in Lacs) 44.37 53.82 62.51 71.80 81.69

COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS I II III IV V

Finished Goods
(10 Days requirement) 1.30 1.53 1.78 2.04 2.32
Raw Material
(5 Days requirement) 0.36 0.43 0.50 0.57 0.65

Closing Stock 1.66 1.96 2.27 2.61 2.97

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Amount Margin(10%) Net

Amount
Stock in Hand 1.66
Less:
Sundry Creditors 0.72
Paid Stock 0.94 0.09 0.85

Sundry Debtors 2.96 0.30 2.66

Working Capital Requirement 3.51

Margin 0.39

MPBF 3.51
Working Capital Demand 3.00
BREAK UP OF LABOUR

Particulars Wages No of Total

Per Month Employees Salary

Plant Operator 10,000.00 1 10,000.00

Unskilled Worker 8,000.00 1 8,000.00
Helper 8,000.00 1 8,000.00
Security Guard 6,000.00 1 6,000.00

32,000.00
Add: 5% Fringe Benefit 1,600.00
Total Labour Cost Per Month 33,600.00
Total Labour Cost for the year ( In Rs. Lakhs) 4 4.03

BREAK UP OF SALARY

Particulars Salary No of Total

Per Month Employees Salary
Manager 12,000.00 1 12,000.00
Accountant cum store keeper 10,000.00 1 10,000.00
Sales 8,000.00 1 8,000.00
Total Salary Per Month 30,000.00

Add: 5% Fringe Benefit 1,500.00

Total Salary for the month 31,500.00

Total Salary for the year ( In Rs. Lakhs) 3 3.78

COMPUTATION OF DEPRECIATION

Plant &
Description Land Machinery Furniture TOTAL

Rate of Depreciation 15.00% 10.00%

Opening Balance Leased - - -
Addition - 20.10 1.00 21.10
- 20.10 1.00 21.10
- -
TOTAL 20.10 1.00 21.10
Less : Depreciation - 3.02 0.10 3.12
WDV at end of Ist year - 17.09 0.90 17.99
Additions During The Year - - - -
- 17.09 0.90 17.99
Less : Depreciation - 2.56 0.09 2.65

WDV at end of IInd Year - 14.52 0.81 15.33

Additions During The Year - - - -
- 14.52 0.81 15.33
Less : Depreciation - 2.18 0.08 2.26
WDV at end of IIIrd year - 12.34 0.73 13.07
Additions During The Year - - - -
- 12.34 0.73 13.07
Less : Depreciation - 1.85 0.07 1.92
WDV at end of IV year - 10.49 0.66 11.15
Additions During The Year - - - -
- 10.49 0.66 11.15
Less : Depreciation - 1.57 0.07 1.64
WDV at end of Vth year - 8.92 0.59 9.51
 REPAYMENT SCHEDULE OF TERM LOAN 11.0%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

I Opening Balance
Ist Quarter 19.00 - 19.00 0.52 - 19.00
Iind Quarter 19.00 - 19.00 0.52 - 19.00
IIIrd Quarter 19.00 - 19.00 0.52 1.06 17.94
Ivth Quarter 17.94 - 17.94 0.49 1.06 16.89
2.06 2.11
II Opening Balance
Ist Quarter 16.89 - 16.89 0.46 1.06 15.83
Iind Quarter 15.83 - 15.83 0.44 1.06 14.78
IIIrd Quarter 14.78 - 14.78 0.41 1.06 13.72
Ivth Quarter 13.72 13.72 0.38 1.06 12.67
1.68 4.22
III Opening Balance
Ist Quarter 12.67 - 12.67 0.35 1.06 11.61

Iind Quarter 11.61 - 11.61 0.32 1.06 10.56

IIIrd Quarter 10.56 - 10.56 0.29 1.06 9.50
Ivth Quarter 9.50 9.50 0.26 1.06 8.44
1.22 4.22
IV Opening Balance
Ist Quarter 8.44 - 8.44 0.23 1.06 7.39
Iind Quarter 7.39 - 7.39 0.20 1.06 6.33
IIIrd Quarter 6.33 - 6.33 0.17 1.06 5.28
Ivth Quarter 5.28 5.28 0.15 1.06 4.22
0.75 4.22
V Opening Balance
Ist Quarter 4.22 - 4.22 0.12 1.06 3.17
Iind Quarter 3.17 - 3.17 0.09 1.06 2.11
IIIrd Quarter 2.11 - 2.11 0.06 1.06 1.06

Ivth Quarter 1.06 1.06 0.03 1.06 -

0.29 4.22

Door to Door Period 60 Months

Moratorium Period 6 Months
Repayment Period 54 Months
CALCULATION OF D.S.C.R

PARTICULARS I II III IV V

CASH ACCRUALS 7.73 10.07 12.36 14.87 17.71

Interest on Term Loan 2.06 1.68 1.22 0.75 0.29

Total 9.79 11.76 13.58 15.62 18.00

REPAYMENT
Repayment of Term Loan 2.11 4.22 4.22 4.22 4.22
Interest on Term Loan 2.06 1.68 1.22 0.75 0.29

Total 4.17 5.91 5.44 4.98 4.51

DEBT SERVICE COVERAGE RATIO 2.35 1.99 2.50 3.14 3.99

AVERAGE D.S.C.R. 2.75

COMPUTATION OF ELECTRICITY
(A) POWER CONNECTION

Total Working Hour per day Hours 8

Electric Load Required HP 40
Load Factor 0.7460
Electricity Charges per unit 7.50
Total Working Days 300
Electricity Charges 5,37,120.00

Add : Minimim Charges (@ 10%)

(B) DG set
No. of Working Days 300 days
No of Working Hours 0.3 Hour per day
Total no of Hour 90
Diesel Consumption per Hour 8
Total Consumption of Diesel 720
Cost of Diesel 65.00 Rs. /Ltr
Total cost of Diesel 0.47

Add : Lube Cost @15% 0.07

Total 0.54

Total cost of Power & Fuel at 100% 5.91

Year Capacity Amount

(in Lacs)

I 45% 2.66
II 50% 2.95
III 55% 3.25
IV 60% 3.55
V 65% 3.84
 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN
assume no financial liability to anyone using the content for any purpose. All the
materials and content contained in Project report is for educational purpose and
reflect the views of the industry which are drawn from various research material
sources from internet, experts, suppliers and various other sources. The actual
cost of the project or industry will have to be taken on case to case basis
considering specific requirement of the project, capacity and type of plant and
other specific factors/cost directly related to the implementation of project. It is
intended for general guidance only and must not be considered a substitute for a
competent legal advice provided by a licensed industry professional. SAMADHAN
hereby disclaims any and all liability to any party for any direct, indirect, implied,
punitive, special, incidental or other consequential damages arising directly or
indirectly from any use of the Project Report Content, which is provided as is, and
without warranties.