An Assignment on

TAKSH PACKAGED DRINKING WATER/

MINERAL WATER

K.P.PATEL SCHOOL OF MANAGEMENT MBA PROGRAMME (2011-2013) PREPARED BY TO RAHUL SHAH ROLL NO 02 SUBMITTED Mr. Hitesh Shah Faculty Member.

AFFILIATED TO GUJARAT TECHNOLOGICAL UNIVERSITY In requirement of partial fulfillment of Masters of Business Administration (MBA)
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PREFACE

In each and every field of the life practical study is necessary. Theoretical knowledge is no enough. The subject New Enterprise Management has been introduced by our University with objective to develop entrepreneurial and management skill among student. The main object of the like practical study is to get personal touch of the organization problem and management of the unit. So practical knowledge is prime importance for student of management. The main aim of this subject is to assist the student in developing skill in problem solving and decision making in management of small business. To develop skill at student level the students are required to present a Project Report on selected product. In this regard we are glad to submit a Project Report on our product TAKSH PACKAGED DRINKING WATER/MINERAL WATER

INTRODUCTION

The development and importance of Medium scale industries have increased immensely in this era. Generally less capital is required for running small scale business as compared to large scale organization. Medium scale industries play a key role in the industrialization of developing countries. This is because they provide immediate large scale employment and have a comparatively higher labor capital. They need lower investment, offer a method of ensuring equitable distribution of national income and facilitate an effective mobilization of resources of capital and skill which might otherwise remained unutilized and the y stimulate the growth of industries, entrepreneurship and promote a more different pattern of ownership and location. It is needless to mention that water, a compound of Hydrogen and Oxygen is a precious natural gift which is very essential for survival o f mankind including animals. The water used for potable purposes should be free from undesirable impurities. The water available from untreated sources such as Well, Boreholes and spring is generally not hygienic and safe for drinking. Thus it is desirable and necessary to purify the water and supply under hygienic conditions for human drinking purpose. As the name implies, the mineral water is the purified water fortified with requisite amounts of minerals such as Barium, Iron, Manganese, etc. which can be absorbed by human body. The mineral water shall be manufactured and packed under hygienic conditions in properly washed and cleaned bottles in sterilized conditions. So, we have prepared a Project Report on medium scale industries for manufacturing of TAKSH PACKAGED DRINKING WATER/MINERAL WATER which is useful in each and every field.

ORGANIZATION PROF ILE

Name of unit

TAKSH PACKAGED DRINKING WATER/MINERAL WATER 2013 Plot no. 123 & 124, GIDC NADIAD Private Limited Ruchita G. Kachhadia TAKSH Mineral Water Medium scale unit April to march 75%

Year of establishment Location of unit Form of organization Name of owner Name of product Size of unit Accounting year Working efficiency

Total period for achieving maximum Third year from the date of commencement capacity utilization of production. Rate of Interest of Capital Means Of Finance 16% per annum Own 40% Borrowing 60%

PRODUCT DETAIL
PRODUCT
The product is the most tangible & important single component of the marketing program. The product is bundle of all kind of satisfaction of the both material and non material kinds with including physical object, design, brand, package, label, price, services etc. The demand for purified water becomes more during summer season. The product is widely accepted in offices, restaurants, railway stations, airport, bus stands, and hospitals and to some extent even in rich house-holds. So there is good scope for establishing the units for processing and bottling plain and mineralized drinking water in different parts of the country.

TECHNICAL ASPECTS
Processing and Bottling: Raw water to be processed is collected in tanks. A known quantity is pumped into the above tank where the water is dozed with alum for coagulation with heavy metals or insoluble matters. The water after coagulation is allowed to settle for an hour. The impurities may be removed by Reverse Osmosis techniques also. The supernatant water is taken to the chlorination tank where primary disinfection is brought about by bubbling chlorine gas. The water is then passed through sand filters for trapping of undisclosed impurities. The water after sand filtration is passed through Carbon filters for removal of odour, colour and also for dechlorination. It is then passed through series of micro fillers comprising of 5 micron, 1 micron and 0.4 micron filter followed by ultraviolet disinfection system for terminal disinfection. Packing is done in PET bottles of 1 litter capacity through an automatic rinsing, filling, and capping machine fitted with an ozone generator. The bottles after capping are shrink wrapped (Optional) and packed in corrugated boxes of one dozen each.

MARKET POTENTIAL
Unfortunately sufficient safe potable water is not available everywhere in the country; eit her harmful chemical substance is found in the layers of the earth which enter into water or it may be contaminated due to pathogenic micro-organisms. If such water is consumed, the body suffers from water born diseases. Due to this, it has become imperative to process and bottle safe potable water for the mankind in prevailing conditions. The demand for purified water becomes more during summer season. Although few companies have already entered in the bottling of safe potable water and mineralized water, but still huge gap is there in between demand and supply at all metropolitan-cities and towns. The product is widely accepted in offices, restaurants, railway stations, airport, bus stands, and hospitals and to some extent even in rich house-holds. So there is good scope for establishing the units for processing and bottling plain and mineralized drinking water in different parts of the country.

 Pollution Control
Although this unit will not affect the environment, but the entrepreneurs are advised to obtain, No Objection Certificate from competent authority of State Pollution Control Board. They should develop Kitchen Garden in the factory premises to utilize waste water from the plant. Energy conservation Suitable measures should be adopted o use appropriate amount of fuel and electricity. The promoters should arrange periodic auditing of electrical consumption, as the unit will be running in three shifts. Unnecessary operation of machines should be controlled to avoid excess consumption of electricity. Natural ventilation in production premises may be made available to avoid use of electric power during day hours.

FINANCIAL ANALYSIS

TOTAL FIXED COST:

Particular 1. Land and Building 2. Plant & Machinery 3. Other fixed assets Cost of furniture and furnishing Cost of deep bore tube well for water reservoir Security deposit of electricity deptt.etc. Preliminary expenses Delivery van and contingency etc. Total Total (Rs. In Lakhs) 30.00 25.32 0.88 1.30 1.00 1.50 5.00 65.00

 RAW MATERIAL:
Particular 1. PET/PVC bottle including cap labels etc. 1 lit. size Total (rs. In lakhs) 13.50

2. Che micals and Reagents etc. (L.S.) 3. Corrugated boxes, strip, tap etc. Total

0.50 3.10 17.10

SALARY:
Particular Factory Manage r Clerk cum typist Store cum-Purchase officer Account-Cum- cas hier Sweeper (Part time) Production manager cumchief chemist Lab. Assistant Production s upervisor Skilled Workers, including electrician drive r Un-skilled Worke rs Chowkidar Total salary and wages Number 1 1 1 1 1 1 1 3 9 Rate 6000 2500 2500 3000 1000 6000 2000 3000 3000 Total(monthly) 6000 2500 2500 3000 1000 6000 2000 9000 27000

3 3 25

2000 2000

6000 6000 71,000

 UTILITIES:
Particular Electricity Fuels and other Total Total (rs. In lakhs) (monthly) 0.41 0.04 .045

OTHER EXPENSES:
Particulars Cons umable stores Telephones exp. Stationary Repairs Transport Sales exp. Insurance Adve rtisement Licence and othe r fees Miscellaneous expenses Total Amount(monthly) 1000 3000 3000 4000 5000 5000 5000 6000 2000 3000 37000

WORKING CAPITAL:
Particular RM Salary Other expense Utilities Total Amount( in Lakhs) 17.10 8.52 4.44 0.54 30.60

 TOTAL INVESTMENT:
Particular Fixed assets Working capital Total Amount ( in lakhs) 65.00 30.60 95.60

SOURCE OF FINANCE:
Particular Own Borrowed Long term loan (70%) Borrowing for working capital (30%) Total Amount 38,24,000 57,36,000 4015200 1720800 95,60,000

COST OF CAPITAL:
Particular Own Borrowed Long term On working borrowing Weight 40% 60% 70% 30% Percentage 10% 15% 16%

capital

Term Loan repayment schedule:

Year 1 2 3 4 5 Amount 4015200 3212160 2409120 1606080 803040 Instalment 803040 803040 803040 803040 803040 Inte rest 602280 481824 361368 240912 120456 Principle 3212160 2409120 1606080 803040 -------------

 DEPRECIATION SCHEDULE:
Particular Building Machine ry Other Fixed assets 15% 968000 145200 123420 104907 89171 75795 698400 621300 552999 492454 438750 Total

Depreciation rate Total amount Depreciation 1 2 3 4 5

10% 30,00,000 300000 270000 243000 218700 196830

10% 25,32,000 253200 227880 205092 184583 166125

OPERATING STATEMENT

Particular Sales Less: Raw material electricity Wages Depreciation Inte rest on wc Inte rest on te rm loan Administration & selling expenses

1 year 40% 3500000 684000 196800 340800 698400 275328 602280

2 year 50% 4375000 855000 246000 426000 621300 275328 481824

3 year 60% 5250000 1026000 295200 511200 552999 275328 361368 . 158400

4 year 70% 6125000 1197000 344400 596400 492454 275328 240912

5 year 80% 7000000 1368000 393600 681600 438750 275328 120456

105600

132000

184800

211200

Total Ope rating profit Less: Tax(35%) Net profit

2903208 596792 208877 387915

3037452 1337548 468142 869406

3180495 2069505 724327 1345178

3331294 2793706 977797 1815909

3488934 3511066 1228873 2282193

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CASH FLOW STATEMENT

Particular Opening balance Receipts: Equity Term loan Credit available PBT Depreciation Bank limit Total Payment: Fixed assets Curre nt assets Repayment of term loan Tax

Initial Year -----------

1 year 40% 1339200

2 year 50% 983823

3 year 60% 1081626

4 year 70% 1089200

5 year 80% 2504660

38,24,000 40,15,200 140548 596792 698400 1720800 78,39,200 65,00,000 2500000 803040 625000 803040 625000 803040 625000 803040 625000 803040 35137 1337548 621300 35137 2069505 552999 35137 2793706 492454 35137 3511066 438750 -

Total Closing balance

65,00,000 1339200

208877 3511917 983823

468142 1896182 1081626

724327 2152367 1089200

977797 2405837 2504660

1228873 2656913 3832700

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BALANCE SHEET

Particular Liabilities: Own capital Term loan Loan for working capital Net profit Credit available

1 year 40%

2 year 50%

3 year 60%

4 year 70%

5 year 80%

3824000 3212160 1720800 387915 140548

3824000 2409120 1720800 869406 175685

3824000 1606080 1720800 1345178 210822

3824000 803040 1720800 1815909 245959

3824000 ---------1720800 2282193 281096

9285423 Assets: Land & Building machinery Other fixed assets Curre nt assets Cash balance 2700000 2278800 822800 2500000 983823 9285423

9386926

9466501

11014507

12528797

2430000 3050920 699380 31,25,000 1081626 9386926

2187000 1845828 594473 37,50,000 1089200 9466501

1968300 1661245 505302 43,75,000 2504660 11014507

1771470 1495120 429507 50,00,000 3832700 12528797

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RATIOS
DEBT SERVICE COVERAGE RATIO: = (NET PROFIT +DEPRECIATION + INTEREST ON TERM LOAN)/ (TERM LOAN INSTALLMENT+ INTEREST ON TERM LOAN)

Particular

Net profit Depreciation Inte rest on loan Total 1688595 Term loan 803040 installment Inte rest on term 602280 loan Total 1405320 Ratio 1.20

1 year 40% 387915 698400 term 602280

2 year 50% 869406 621300 481824 1972530 803040 481824 1284864 1.54

3 year 60% 1345178 552999 361368 2289545 803040 361368 1164408 1.97

4 year 70% 1815909 492454 240912 2549275 803040 240912 1043952 2.44

5 year 80% 2282193 438750 120456 2841399 803040 120456 923496 3.08

AVERAGE DEBT SERVICE COVERAGE RATIO: 2.50

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CONCLUTION

Thus from this project report it can be concluded that there is a good scope for setting up medium scale unit for packaged drinking water/ mineral water. But it has to be kept in mind there is the area of Survival for Fittest. Thus one who works hard can only succeed, besides many benefits are available to small scale unit. Thus if it is used properly the result would be optimum. It can also be concluded that increase in environmental awareness will result in high potential market for the product.

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