Ghano PPR

PREFACE
Small-scale Industry is significant segment of the Indian economy. But the fact is that the most of the small-scale industries in the country are handicapped. There is an accurate need for substituting the traditional management techniques by scientific system of management. Hence, it is suggested to undergo such training to manage the business unit efficiently right from its inception and avoid the National Loss. Keeping in view the central ideas and objectives, the Saurashtra University has introduced the subject "Entrepreneurship and Management of small-scale Business." The main object of this subject is to develop the skill in problem solving and decisionmaking in management of small business. Another objective is to assist the skill of entrepreneurship among the student. In lights of above objectives, the students are required to prepare a project report on selected products. In this regard, I am glad to submit a project report on the product AUDIO CASSETTE.
ACKNOWLEDGEMENT
1
DIVINE A DEDICATION TO CUSTOMER
I am glad to submit this report, which includes the practical aspect of the industrial study. I am happy to express my gratitude to all persons who spend their valuable time and help me a lot in preparing of this project work. A successful challenge of the visit to any industry gave me a chance to transfer it into a result. I am obliged to Saurashtra University for providing me with a valuable opportunity to undertake surveys of small-scale business and I am also thankful for introducing me to new horizons in the entrepreneurship skills. I am thankful to Ms. Rutha Mehta for guiding me towards successful preparation of this project. I would also like to thank my parents, my friends & all persons who have directly or in directly helped me in this work.
DATE :-- 18 / 12 / 2006
SIGNATURE (GHANSHYAM .B SAGLANI)
DECLARATION
2
I undersigned, Mr. GHANSHYAM B. SAGLANI a student of T.Y.B.B.A. hereby declare that the project work presented in this report is my own work and has been carried out under the supervision and guidance of Ms. Rhuta Mehta of Shri R. P. Bhalodia college Rajkot.
This work has not been previously submitted to any other university for any other examination.
Date:- 18 / 12 / 2006 Place: Rajkot
Signature (GHANSHYAM B. SAGLANI )
3
INDEX
SR.No
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.
Particulars
Introduction Project at a glance Bio-data of partners Schedule Implementation Organization Structure Proposed Location Demand Analysis & Market Survey Manufacturing Process Production Capacity Financial Details Total Fixed Capital Investment Working Capital Statement Total Cost of Project Provision of Fund Analyses of investment Total Expense Profitability of Project Ratio Analysis Supplier's List Balance sheet Competition Future Prospect Bibliography Disclosure of Significant Accounting Policies
Page No.
5 6 8 10 11 12 15 18 20 21 23 24 25 26 27 28 31 32 34 35 36 37 38 39
INTRODUCTION
The small-scale industry, the world over, is playing a vital role in the growth has been rightly considered as the engine of growth in most countries. They enhanced balanced regional industrial development, and they act as a nursery for entrepreneurship. The development of SSI is an affirmed and assured policy of the government. India is predominantly an agricultural country and the food processing industry is an important component of it. The proposed product project report is for assembling of audio cassettes. Introducing of audio cassettes has been of great help in today's modern world. It has been handily and successful in providing the society with the needed knowledge for all around department. The audio cassettes are basically used for the entertainment, for education and for other miscellaneous purposes. Moreover, Rajkot is the terminal of Gujarat and Saurashtra. So it is easy to get raw material and other required goods and transportation facilities. Rajkot is industrially developed city. So it is easy to get the entire infrastructure and other facilities.
5
PROJECT AT GLANCE
Name of the unit Factory Location
: DIVINE AUDIO CASSETTE : Divine Audio Cassatte Haripar, G.I.D.C. Taluka :- Lodhika. District :- Rajkot
Phone no. E-Mail Registered Office
: (0281) 2254321, 9879319167 : divineaudiocassatte@Yahoo.Com : Ronak Complex Office no. 10-11 Gondal Road, Rajkot.
Name of the product Constitution Name of the Partners
: Audio Cassette. : Partnership Firm. : Ghanshyam Saglani Mohsin savan.
6
Year Of Establishment Size of the unit SSI Register No. Subsidies Registration
: 2006 : Small Scale Unit : Applied For : Applied For
Whether new unit or expansion : New Unit Capacity Utilization Cost of the Project Total Employees BEP Level Weekly Off Working Shift : 60 % : 20,87,200 : 10 : 3,56,948, Rs. : Friday : 1 shift 8 to 12: 30 & 1: 30 to 6:30 Slogan Banker : DIVINE A DEDICATION TO CUSTOMER : State Bank Of India
7
BIO DATA OF PARTENERS

PARTENER :- 1 NAME ADDRESS : Saglani Ghanshyam .B : Aashirvad Street no. 22/15 Bhojraj Para, Gondal. 360311 : B.B.A. Graduate : 20 years
QUALIFICATION AGE
FINANCIAL CONTRIBUTION : 50 % SHARE IN PROFIT EXPERIENCE RESPONSIBILITY : 50 % : Training during study : marketing and financial matters of the unit
8
PARTENER :- 2 NAME ADDRESS : Savan Mohsin .A : 402, Anugrah apartments Opp. Jivrajani TVS, Kalawad Road, Rajkot. 360001 : Diploma in plastic engineering. : 26 years
QUALIFICATION
AGE
FINANCIAL CONTRIBUTION : 50 % SHARE IN PROFIT EXPERIENCE : 50 % : 2 years experience in plastic co. : Technical and Production matters of the unit.
RESPONSIBILITY
9
SCHEDULE IMPLEMENTATION
1. Preparation of Project Report 2. SSI Registration 3. Acquisition of land 4. Arrangement of finance 5. Building construction 6. Acquisition of machinery 7. Installation of machinery 8. Appointment of workers 9. Trail Production 10.Commercial Production
: 1 month : 1 week : 1 month : 1 month : 3 months : 1 month : 15 days : 15 days : 2 weeks : 1 week
Thus, total time required fir the commencement of the commercial production is about 9 months.
10
ORGANATION STRUCTURE
Proprietor
Production Department
Personal Department
Sales Department
Finance Department
Packing Stocks Foreman In Maintance. Charge Officer
Sales Manager
Accountant
Workers
Workers
Salesman
11
PROPSED LOCATION
Location of any industry plays an important role in the success or failure of the company. It is very important decision because it affects the cost of production. It is permanent decision and indirectly effects profitability. There are many factors like land, labour, water, electricity, government incentive, etc which effects the location of any unit. The proposed location for the establishment of manufacturing facilities for this unit is Haripar in Lodhika Taluka. It is nearer to Rajkot. Rajkot is considered as fast industrial developing city. The main reason behind this development is easy availability of skilled & semi-skilled labour. Moreover, Plastic Industry does not required heavy water supply and its requirement is very shortest. Plastic industry does not required NO OBJECTION CERTIFICATE from Pollution Control Board. Recently, the government has declared this area as an industrial backward. Under this provision, it can get 30% subsidy and sales tax exemption up to Rs 20 lakhs. Following are some of the favorable points, which say that the location of our plant is perfect for getting all the infrastructure facilities.
12
1.
Raw Material: Raw material is the basic constraint for all industries. Regular supply of
materials is very crucial to maintain the flow of production, thus subsequently the cost of production can be reduced. The major raw materials required for manufacturing Audio Cassette are polythene, PVC, magnetic tape, roller set, pressure pad, carbon paper, screw, packing materials, etc.
2. Labour Force:Cheap and semi-skilled labours are easily available to the unit as it is located in industrial area and nearer to the Rajkot city. Concentration on small-scale units in the area makes the availability of labour force easy.
3. Transportation:Transportation facility is needed by each and every organization to bring raw material and to sell the finished products in the market. As the unit is located nearer to the Rajkot, transportation facility is easily available.
13
4. Power:Power is available from the Gujarat Electricity Board (GEB) at the subsidized rates, since the unit is located in an industrial area. All the above-mentioned factors are very crucial as they affect the cost of production as well as profitability and ultimately the success of the unit.
14
DEMAND ANALYSIS AND MARKET SURVEY

The audio cassette are related with each and every person though he or she is a child , elder or an old. It is current years demand or fashion that each and every person wants different kind of audio cassette.
Generally majority of people uses Audio Cassette for the following three purposes. A] For Entertainment B] For Education C] For other Miscellaneous Purposes
[A] Entertainment:With the development of electronic industries, and the fast economic growth, the electronic items are become cheaper and cost of instrument is within the reach of the poor and middleincome groups. As the survey held by Electronic Authority of India, radio and audio cassette player is seen 9 out of 10 houses. It means if we considered 5 persons (average) family, the number of families in India is 14,00,00,000 as per income status, which is bifurcated as under:
15
Income Levels Below Poverty Line Lower Middle Class Higher Middle Class Rich and Wealthy
Percentages [%] 40% 30% 20% 10%
No. Of Families 56,000 42,000 28,000 14,000
The above mention data is for indoor entertainments. Outdoors demand for cassette are also a higher side, the use of cassette player in taxi, cars, lorries and rickshaws are as under: From the 50,00,000 vehicles on the road as per the R.T.O. registration, 80% or more have cassette player and having 10 to 15 cassettes per vehicle.
No. Of vehicles % Of vehicle having Audio Player 80% [40,00,000] No. Of cassettes per vehicle 10 to 15 Total Number 4,00,00,000
50,00,000
16
[B] Education:The total demands for Audio cassettes for the educational institutes are low in comparison with other purposes. However yearly demand is about 7 to 10 lakhs.
[C] Other Miscellaneous Purposes:The demand of the cassettes for miscellaneous purpose is on higher side. The yearly demand as per sample survey made personally it comes about 50 to 60 lakhs all over India. From the above statistics the total demand of Audio Cassette per year is as under:
Particulars
A. For entertainment I) Indoor II) Outdoor B. For Education C. For Misc.Purpose Total Demand
No. Of Cassette Yearly

13,89,920 48,000 800 5,500 14,44,220
17
MANUFACTURING PROCESS
The assembling process & manufacturing process of audio cassette is very easy. It requires some amount of technical know how scientifically. The materials are used in the machine process are PVC, polythene, polythrone, nylon etc. Plastics are the material, which can be molded into any shape. It is very essential for the body of the cassettes. Injection molding process is the backbone of modern plastic processing industry. This is the machine which mass products can manufacture molded articles automatically and fast. At present three types of injection molding machines are available. i) ii) iii) Hand operated. Plunger type injection type machine. Screw pew plasticing type machine. For manufacturing of audio cassette, the last type of injection molding machine is the most modern version of injection molding machine. In this machine, an extruder type screw substitutes plunger. The material is held in plastic state at the front of the screw and this build up of material causes the screw to move easily recorded and shot volume is easily controlled by stopping screw relation at a predetermined position. Thus, the main part of audio cassette is body, which can be molded, in plastic injection holding machine. This machine is fully automatic and does not require and highly qualified or technical person to operate.
18
After completion of main body of audio cassette which is manufactured by injection molding machine, assembling of other part of audio cassette taken place. In this process, the parts purchased from the outside market are assembled in main body manually. Thus, the main steps for assembling process are as under: Fixing the roller set Fixing the pressure pad Fixing the carbon paper Fixing the magnetic tape with double hub To put against carbon set Fixing the screw
The above steps of assembling several parts of cassette are done manually. So it is very easy and it is can be done by semi skilled worker only.
19
PRODUCTION CAPACITY
Installed Capacity:Yearly Value 34,87,500
Yearly Rate Daily Monthly Product Daily Monthly Name Production Production Production (Rs.) Value Value Audio Cassette 465 11,625 1,39,500 25 11,625 2,90,625
Utilized Capacity:Yearly Value 20,92,500
Product Daily Monthly Yearly Rate Daily Monthly Name Production Production Production (Rs.) Value Value Audio Cassette 279 6,975 83,700 25 6,975 1,74,375
20
FINANCIAL DETAILES
[ 1 ] LAND & BUILDING :No. 1. 2. Particulars Land Building Total Sq.Feet 2000 3000 Rate 200 100 Amt 4,00,000 3,00,000 7,00,000
[ 2 ] PLANT & MACHINARY:No. Particulars Imported/ Indigenous IMP IND IND IND Total No. Of Machines 1 1 1 2 Amt. 3,00,000 13,000 12,000 4,00,000 7,25,000
1. Injection Moulding machine 2. Cooling System 3. Grinder 4. Hoist take
21
[ 3 ] OTHER FIXED ASSETS:No.

1. 2. 3.
Particulars
Furniture & Fixtures Delivery Van Computer & Telephone
Amt
50,000 1,00,000 1,30,000
Total
2,80,000
[ 4 ] PRELIMINARY EXPENSES:No. 1. 2. 3. Particulars Market Survey Registration Expenses Postage & Stationery Total Amt 16,000 9,000 2,000 27,000
22
FIXED CAPITAL INVEST MENT

No.
1. 2. 3. 4.
Particulars
Land & Building Plant & Machinery Other Fixed Assets Preliminary Expenses
Amt
7,00,000 7,25,000 2,80,000 27,000
Total
17,32,000
23
WORKING CAPITAL STATEMENT

No. Particulars Amt (Rs.) [per month]
47,500 50,000 1,000 2,500 3,000 1,500 500 500 4,200 4,200 1,900 1,600
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.
Raw material Magnetic tape Roller set Pressure pad Carbon paper Screw Packing material Unloading charges Power Direct labour cost Office expenses Selling expenses
Total
1,18,400
For three months
3,55,200
24
TOTAL COST OF PROJECT
No.
1. 2.
Particulars
Fixed capital cost Working capital cost
Amt (Rs.)
17,32,000 3,55,200
Total
20,87,200
25
PROVISION OF FUNDS
No.
1. 2. 3.
Details
Total
7,00,000 7,25,000 3,55,000
Subsidy [30%]
2,10,000 2,17,500 -
Bank
2,48,640
G.S.F.C Owned [50%] Capital

3,50,000 3,62,500 1,40,000 1,45,000 1,06,560
Land & Building Machinery Working Capital
Total
17,80,200
4,27,500 2,48,640 7,12,500 3,91,560
26
ANALYSIS OF INVESTMENT
No.
1. 2. 3. 4. 5.
Particulars
Subsidy Bank Loan G.S.F.C. Loan Owned Capital Deposit
Amt (Rs.)
4,27,500 2,48,640 7,12,500 3,91,560 -
Total
17,80,200
OWNED CAPITAL
No.
1. 2.
Partners
Mr. Ghanshyam Saglani Mr. Mohsin Savan
Amt (Rs.)
1,95,780 1,95,780
Total
3,91,560
27
TOTAL EXPENSES
[1] Raw Material:No.
1. 2. 3. 4. 5. 6. 7. 8. 9.
Description
Polythene Magnetic Tape Roller Set Pressure Pad Carbon Paper Set Screw Packing Material Unloading Charges Power (28 H.P)
Amt (Rs.)
5,70,000 6,00,000 12,000 30,000 36,000 18,000 6,000 6,000 50,400
Total
13,28,400
[2] Direct Labour Cost:No.

1. 2.
Description
Skilled Workers Semi skilled workers [Rs.800p.m. per worker] Unskilled Workers
No.
1 3
Monthly
1,200 2,400
Yearly
14,400 28,800
3.
600
7,200
Total
4,200
50,400
28
[3] Office Administration Cost:-
No.
1.
Description
Staff a) Clerk b) Peon
No.
1 1 -
Monthly
1,000 600 100 200
Yearly
12,000 7,200 1,200 2,400
2. 3.
Stationery & Printing Misc. Expenses
Total
1,900
22,800
[41 Selling & Distribution Cost:-
No.
1.
Description
Staff a) Salesman
No.
1 -
Monthly
850 600 150
Yearly
10,200 7,200 1,800
2. 3.
Traveling Expense Misc. Expenses
Total
1,600
19,200
[5] Depreciation:-
29
No.
1. 2.
Description
Building Machinery
Opening Balance
3,00,000 7,25,000
Rate
Amt , (Rs.)
15,030 1,78,350
5.01% 24.60% ,
Total
1,93,380
[61 Interest:No. Description Amt. Of Loan

7,12,500 2,48,640
Rate of Int.
14.5% 15%
Amt (Rs.)
1,03,313 37,296
1. 2.
G.S.F.C Bank Loan
Total
1,40,609
30
PROFITABILITY OF PROJECT
No.
1. 2.
Description
Total Income From Selling Total Expenses
Amt (Rs.)
20,92,500
2.1 2.2
Direct Labour cost Office & Administration Cost
50,400 22,800
2.3
Selling & Distribution Cost
19,200
2.4
Depreciation
1,93,380
2.5
Interest
1,40,609
Total Income
16,66,111
31
RATIO ANALYSES
[A] Profit :-= 4,26,389 Less: Income Tax = 1,49,236 [35%] = Total sales - Exp = 20,92,500-16,66,111
Net Profit
= 2,77,153
[B] Calculations Of Ratios:[1] Profit Turnover Ratio = Profit * 100 Turnover
= 2,77,153 * 100
20,92,500 = 13.25%
[2] Rate of Return = Profit Total Capital Invested = 2,77,153 * 100 * 100
17,80,200 = 15.57%
32
[3] Profit Volume Ratio
Contribution sales
* 100
= 20,92,500 17,53,097 * 100
20,92,500 = 16.22%
[4] Break Even Point = Fixed Cost P.V.R. = 57,897 * 100 * 100
16.22 = 3,56,948 Rs.
DISTRIBUTION OF PROFIT
[1] [2] Mr. Ghanshyam Saglani Mr. Mohsin Savan 1,38,577 Rs. 1,38,577 Rs.
33
SUPPLIERS LIST
[1]
Pioneer Engineering, 110, Triveni Complex, Jamnagar Road , Rajkot. [2] Asian Industries LTD. A/44 Asian Complex, Swistik Society, Ahmedabad.
34
BALANCE SHEET OF DIVINE AUDIO CASSETTE ON 31-03-07

Liabilities
Partner's Capital A/c i)Ghanshyam ii)Mohsin 1,95,780 1,95,780 3,91,560 9,61,140 4,26,389 1,50,000
Rs.
Assets
Goodwill Fixed Assets: Land & Building Machinery Other fixed assets Stock Cash & Bank Preliminary Exp. Prepaid Exp.
Rs.
50,000 7,00,000 7,25,000 2,80,000 62,089 50,000 27,000 35,000
Loan [As per schedule 'B'] Profit & Loss A/c General Reserve
19.29,089
19,29,089
35
COMPETITION
Looking to the govt, policy for globalization in fast industrial development. Liberalization and relaxation policy of govt, growth of the industries in India. But now a day, market competition will also increase in all fields. Particularly, for this product, at small business concern the partners should not fight out with the competitors because there is no more than 10 small and tiny industries of AUDIO CASSETTE ASSEMBLING in Rajkot District though it is developed by govt, by giving various incentives to this type of industry. We can see that there is keen competition for audio cassette among big industries like T-series, Venus, HMV, Tips, etc. But small scale industries are trying to develop their market in all over India. They are also getting help from the big industries. So they have to develop image amongst the customers that they are also getting help, from the big industries. So they have to develop image amongst the customers that they are the best one.
36
FUTURE PROSPECTS
Present world which is shifting from agriculture to rapidly moving towards globalization requires a faithful helping hand for its matters. Electronic devices have met this demand. Today the market is growing wider and wider that means to bring this market together are being geared up. In this context, AUDIO CASSETTE could play a greater role in the future globalization of the society. Through Audio Cassette, information, knowledge, technology etc can be shared by many remarkable events and moments can be captured in the Audio Cassette and treasured for lifetime. In the end it can be conducted that AUDIO CASSETTE being a consumer durable product, having constantly increasing demand has a very potential market in the future.
37
BIBLIOGRAPHY
Principle & Practice of Management. Business Today. Entrepreneurship & Management of Small Business.
Disclosure of Significant
38
Accounting Policies
We take Double entry system in Book Keeping area. Method of Depreciation = Written Down Method.
Valuation of Inventory = Cost Price or Mkt. Price whichever less.

(Most of the time cost price is less. So we always take valuation of Inv. On cost price bases.)
Accounting Year = 1s' April to 31Sl March
39

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PREFACE

DATE :-- 18 / 12 / 2006

SIGNATURE (GHANSHYAM .B SAGLANI)

Date:- 18 / 12 / 2006 Place: Rajkot

Signature (GHANSHYAM B. SAGLANI )

DIVINE A DEDICATION TO CUSTOMER

Name of the unit Factory Location

Phone no. E-Mail Registered Office

Name of the product Constitution Name of the Partners

: Audio Cassette. : Partnership Firm. : Ghanshyam Saglani Mohsin savan.

: 2006 : Small Scale Unit : Applied For : Applied For

BIO DATA OF PARTENERS

Packing Stocks Foreman In Maintance. Charge Officer

DEMAND ANALYSIS AND MARKET SURVEY

Percentages [%] 40% 30% 20% 10%

No. Of Families 56,000 42,000 28,000 14,000

No. Of Cassette Yearly

Installed Capacity:Yearly Value 34,87,500

Utilized Capacity:Yearly Value 20,92,500

1. Injection Moulding machine 2. Cooling System 3. Grinder 4. Hoist take

[ 3 ] OTHER FIXED ASSETS:No.

FIXED CAPITAL INVEST MENT

WORKING CAPITAL STATEMENT

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

For three months

TOTAL COST OF PROJECT

G.S.F.C Owned [50%] Capital

Land & Building Machinery Working Capital

4,27,500 2,48,640 7,12,500 3,91,560

[2] Direct Labour Cost:No.

[3] Office Administration Cost:-

Stationery & Printing Misc. Expenses

[41 Selling & Distribution Cost:-

Traveling Expense Misc. Expenses

[61 Interest:No. Description Amt. Of Loan

G.S.F.C Bank Loan

Direct Labour cost Office & Administration Cost

Selling & Distribution Cost

[B] Calculations Of Ratios:[1] Profit Turnover Ratio = Profit * 100 Turnover

[3] Profit Volume Ratio

= 20,92,500 17,53,097 * 100

16.22 = 3,56,948 Rs.

BALANCE SHEET OF DIVINE AUDIO CASSETTE ON 31-03-07

Valuation of Inventory = Cost Price or Mkt. Price whichever less.

Accounting Year = 1s' April to 31Sl March

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