INDEX

[1] INTRODUCTION
[2] PROJECT AT GLANCE
[3] MANAGEMENT SET UP
[4] ABOUT THE PARTENERS
[5] PROPOSED LOCATION JUSTIFICATION
[6] LOCATION
[7] MARKET POTENTIAL
[8] RAW MATERIALS
[9] NAMES & ADDRESS OF SUPPLIERS
[10] MANUFACTURING PROCESS
[11] BASIS & PRESUMPTION
[12] IMPLIMENTATION SCHEDULE
[13] TOTAL FIXED CAPITAL
- LAND & BUILDING
- MACHINERY & EQUIPMENTS
- PRE OPERATIVE EXPENTSES
[14] TOTAL WORKING CAPITAL
- PERSONNEL
- RAW MATERIALS
- UTILITIES

- OTHER CONTINGENCIES EXPENSES

[15] TOTAL INVESTMENTS
[16] COST OF PRODUCTION
[17] NET PROFIT PER YEAR
[18] NET PROFIT RATIO
[19] RATE OF RETURN
[20] BREAK EVEN POINT

INTRODUCTION
As a part of practical training, I have selected to prepare a product
project report on Air Coolers. There are mainly two types of coolers ;
(1) Room Coolers.
(2) Desert Coolers.
Evaporative type Air Coolers are used in peak summer season for
cooling of rooms, offices, hotels etc. In general Air Coolers are used for
cooling similar areas and desert coolers are used for larger area. Air Coolers
basically consist of body, fan, water pump and control switch etc.
An electric fan generally of exhaust fan type is mounted inside a
louvered housing and three vertical sides of the housing are fitted with
filtered pads which are kept wet with help of water pump. Rotation of fan
mounted inside the body draws air from all the three sides through wet pads.
Thus, air gets cooled by evaporation of water and which is blown into the
room.
But this benefits are not enough reasons to pursue an entire project in
order to commence such a business, a business person has to check the
financial viability of the project also certain questions to be answered like,
How much capital is more required?
From where this capital will be procured?
What will be the cost of production?
What will break even point be reached?
What would be the profits and return on investments?

And the list is endless ..!!!!

A genuine attempt has been made to answer all these questions with
almost justification possible in the following pages.

PROJECT AT GLANCE
NAME OF THE UNIT

: GYATRI AIR COOLERS

ADDERSS FOR

: GYATRI AIR COOLERS

PLUS POINT 09
OPP. HARIBHAI HALL,
DR. YAGNIK ROAD,
RAJKOT 360001.

SIZE OF UNIT

: SMALL SCALE INDUSTRY

FORM OF ORGANISATION : PARTENERSHIP FIRM

NAME OF PARTENERS

: MISS POOJA J. VYAS

MR. PRAKASH P. PATHAK

NAME OF THE PRODUCT

: AIR COOLERS

SSI REGISTRATION NO.

: APPLIED FOR

LOCATION OF THE UNIT

: GYATRI AIR COOLERS

SHAPAR INDUSTRIAL ZONE,
GONDAL ROAD,
NATIONAL HIGH-WAY,
VILLAGE : SHAPAR,
DIS. :- RAJKOT.

MANAGEMENT SET UP
Both the partners of the firm, viz,
Miss Pooja J. Vyas
Mr. Prakash P. Pathak
They will be the working partners of the firm whose capital
contribution and profit sharing ration will be as per the partnership deed.
While, Mr. Prakash P. Pathak on the basis of his business experience

and expertise will look after the factory work as well as some of the
major office work, Miss Pooja J. Vyas will take care of official work.
All stage and policy decisions shall be taken by the consent of all the
parties concerned.

ABOUT THE PARTENERS

(1)

ABOUT MR. PRAKASH P. PATHAK

NAME

: MR. PRAKASH P. PATHAK

ADDRESS

: SHREEJI NI VAS
3, SAURASTRA KALA KENDRA,
150 FEET RING ROAD,
RAJKOT 360005.

AGE

: 35 YEARS

QUALIFICATION

: MASTER IN SCIENCE

EXPERIENCE

: 10 YEARS EXPERIENCE IN SIMILAR

BUSINESS

RESPONSIBILITY

: FACTORY WORK SUPERVISION AND

MAJOR OFFICIAL WORK.

(2)

ABOUT MISS POOJA J. VYAS

NAME

: MISS POOJA J. PATHAK

ADDRESS

: GYATRI NI VAS
4, GAYKWADI PLOT,
NAGRIK BANK STREET,
RAJKOT 360001.

AGE

: 23 YEARS

QUALIFICATION

: MASTER IN BUSINESS
ADMINISTRATION

EXPERIENCE

: FRESH

RESPONSIBILITY

: OFFICIAL WORK.

PROPOSED LOCATION
JUSTIFICATION
Factory Location is the decision regarding geographical situation of
the plant. This decision is a very crucial one because it is not easily alterable
and involves a considerably huge amount of investment. The location of the
factory plays a very vital role in success of failure of the business. But this
decision is affected by many factors, which are to be kept in mind while
selecting the location.
The following site has been selected for work premises:GYATRI AIR COOLERS
SHAPAR INDUSTRIAL ZONE,
GONDAL ROAD,
NATIONAL HIGH-WAY,
VILLAGE: SHAPAR,
DIS.:- RAJKOT.
The correctness of this decision can be justified on the full basis:
1]

INDUSTRY CHOICE:Many other industries are situated in this locality, and

hence it is a common choice of all the entrepreneurs in this
business.

2]

NEARNESS TO THE REGISTERED OFFICE:As the registered office located at Dr. Yagnik Road, the
location of the factory is near to the administrative office and
the computer room which is useful in faster communication.

3]

MARKET PROXIMITY :The location also provides proximity to the market in the
sense that direct sales from factory is also possible.

4]

TRANSPORTATION COST:As the materials is loaded from railway boggy and it is

sprightly carried to factory such not transportation cost is
incurred and so far as finished goods are to be dispatched,
Factory owns a delivery van.

5]

RAPID SALES:As the factory location is nearer to industrial area of

shaper as well as registered office locations are situated in the
heart of the city, sales are bound to increase at unimaginable
rates.

LOCATIONS
REFISTERED OFFICE :GYATRI AIR COOLERS
PLUS POINT 09
OPP. HARIBHAI HALL,
DR. YAGNIK ROAD,
RAJKOT 360001.

FACTORY OFFICE :GYATRI AIR COOLERS

NR. K. K. CHEMICALS,
SHAPER.

MARKET POTENTIAL
As the construction of residential accommodation, office complex and
the standard of living is increasing day by day, demand for this item is also
increasing specially in the sections of society who are not able to afford air
conditioned. It is understood that during the period of last 10 years there is a
rise in demand for the item @ 60 % p.a. and this trend is likely to continued.

RAW MATERIALS
The main raw materials required for manufacturing Air Cooler are as
follows:
[1]

GI Sheet

[2]

Cooler Motor

[3]

Pump Vertical

[4]

Wire Net

[5]

Filter Pad

[6]

Switches

[7]

Cable ( 3 core )

[8]

Hardware Items

[9]

Consumable Stores

NAMES AND ADDRESSES OF

SUPLIERS
[1]

M/S. Amar Sons,

57, Rani Jhansi Road,
New Delhi.

[2]

M/S. Prem Engineering Works,

Okhala Industrial Estate,
New Delhi.

[3]

M/S. K. G. Khosla & Co.

1, Deshbandhu Gupta Road,
New Delhi.

[4]

M/S. Jaymes Engg. Co. Pvt. Ltd.

M-block,
Connaught Place,
New Delhi.

[5]

M/S. Toshniwal Brothers Pvt. Ltd.

3E/8, Jhandewalan Wxtension,
New Delhi.

[6]

M/S. Philips India Ltd.,

68, Najafgarh Road,
New Delhi.

[7]

M/S. Balak Ram Banarasi Das & Sons,

37/19, The Mall,
Kanpur 208001.

[8]

M/S. Bazari Trading Co.,

129, Moti Street,
Fort,
Bombay 400001

[9]

M/S. Maruti Electricals,

123/286 A, Gaddarian Purwa,
Fazalganj, Kanpur.

MANUFACTRING PROCESS
[1]

GI sheets are purchased from the local market and cut to size, louvers

made and bent for making the vertical sides, top cover and water pump.
Filter pads are fitted in the 3 vertical sides and electric fan fan and vertical
pump are mounted. On the grill is fixed through which cooled air is brown
out. Switches are provided in the front panel, vertical sides, top cover are
assembled together with screws/ nut and both assembled cooler is then
painted.
[2]

Assembled cooler is tested as per the requirement of ISO : 2000. The

basic requirement of the tests are as follows :

(a)

INSULATION RESISTANCE TEST :The insulation resistance between all electrical circuits when

measures at normal room temperature with megger of 500 V DC

should be not less then 1 Mega Ohm.
(b)

HIGH VOLTAGE TEST :The electrical insulation all electric circuits shall be able to

withstand high voltage tests of 1000 V rms for single phase motors
applied for not less then 2 seconds.
(c)

PRODUCTION EFFICIENTCY TEST :Cooling efficiency and air delivery for various capacities of air

coolers shall bee within the limits prescribed in relevant ISS.

[3]

Production Capacity:(a) Quantity 2500 nos. Air Coolers p.a.

(b) Value Rs. 1,00,00,000

[4]

Approximative Motive Power Requirement:5KW

[5]

Pollution Control Requirement:No Pollution control certificate is required for registration of

the units for manufacture of this item.

[6]

Energy Conservation Need:The design of the fan and electric pump should ensure
minimum iron losses and the cooler should be able to withstand
cooling efficient and air delivery tests as per ISO: 2000

BASIS AND PRESUMPTION

1.

The basis for calculation of production capacity is on single

shift basis, working of 25 days per month on 75% efficiency. Time
required for achieving envisaged capacity utilisation is assumed as
one year.

2.

BEP for the scheme has been calculated on full capacity

utilisation.

3.

Rate of interest has been taken as 18% on an average. This

how ever, is likely to vary depending upon the financial outlay and the
location of unit.

4.

Labour wages have been taken on the basis of minimum

applicable. These are likely to change depending upon the location of
the unit.

5.

Rental Charges of Rs. 100/- per sq. mtr. P.m. has been taken
on an average. This figure is likely to vary depending upon the
location of the unit.

6.

Margin money requirement differs from project to project to

project and type of entrepreneurs such women, SC/ST, physically
handicapped etc. and the minimum margin money usually asked for
by the financial institutions and banks is 15%. Margin money upto
25% in some cases is also asked for. The entrepreneur may check up
the margin money requirement form financial institutions for the
project.

7.

Terms of loan differ from one financial institution to another

and in generals minimum gestation period is normally 6 months and it
could be 2 years. Maximum period for repayment of loan is 7 years
including gestation period. The exact terms and conditions may be
found by the entrepreneurs from the concerned financial institutions.

8.

The costs of machinery and equipment as indicated in the

scheme are approximate to those ruling at the time of preparation of
the scheme.

The entrepreneur may check up the exact price for

specific make and model of the machine selected.

9.

Non-refundable deposits, cost of preparation of project

report etc. may be considered under pre-operative expenses.

10.

The provisions made in other respects viz; raw materials,

utilities, overheads etc. Are drawn on the basis of standard variations
and output. The costs indicated against each are approximate based
on local market conditions and observation. The entrepreneur may
find out the exact cost from the concerned sources.

11.

The operative period of this project is estimated to be about

10 years considering technology obsolescence.

IMPLEMENTAION SCHEDULE
The period required from the time of provisional registration with the
concerned District Industries Centre to commercial production is 6 months
to 2 years.

This includes clearance from concerned agencies including

financial institutions etc.

LAND & BUILDING

PARTICULARS

AMOUNT

Land & Building

30,00,000

Construction

45,00,000
75,00,000

MACHINERY & EQUIPMENTS

PARTICULARS

AMOUNT

1. Guillotine Shearing Machines

7,50,000

2. Power Press 20 tones capacity

9,00,000

3. Screw type break press

4,50,000

4. Air compressor Complete with motor spray

3,00,000

5. Gas welding set

3,00,000

6. Porteble Electric Drill

90,000

7. Portable flexible shaft grinder

90,000

8. Double ended grinder

1,20,000

9. Mergger

3,00,000

10.High voltage test set 3 KV

1,65,000

11. Control panel for measuring power input

1,80,000

consisting of ammeter, voltmeter, wattmeter etc.

12. Multimeter
13. Air flow & temp. Measuring apparatus
14. Anemometer

60,000
1,50,000
1,50,000
40,05,000

PRE OPERATIVE EXPENSES

PERTICULARS

AMOUNT

Fees for preparation of project report,

Deposit to electricity boarded etc.

1,00,000

TOTAL PRE OPERATIVE EXPENSES

1,00,000

TOTAL FIXED CAPITAL

PARTICULARS

AMOUNT

Land & Building

75,00,000

Machinery & equipments

40,50,000

Pre operative expenses

1,00,000

TOAL FIXED COST

80,00,500

PERSONNEL
DESIGNATION
Works Manager
Accountant
Skilled fitter

NO.
1
1
3

SALARY
15,000
10,000
2,500

TOTAL
15,000
10,000
7,500

Unsilled fitter
Store keeper
Peon-cum-Watch man
Mechanic

5
2
3
3

1500
1500
1000
5000

7,500
3000
3000
3000

Skilled fitter

5000

10000
56,000

Perquisites @ 20 % salaries

11,200

TOAL PERSONNEL

67,200

RAW MATERIALS
PARTICULARS

QTY

RATE

AMOUNT

GI sheet

3 tons

20,000

60,000

Cooler Motor

100

800

80,000

Pump Vertical

100

200

20,000

Wire Net

L.S.

17,000

Filter Pad

200 kg

16/kg

3,200

Switches

200 kg

10/kg

2,000

Cable(3 core)

250 mtr

10/mtr

2,500

Hardware Items
Consumable Stores

L.S.

500

L.S.

3,000
1,88,200

UTILITIES
PARTICULARS

AMOUNT

Power (6000 UNITS)

75,000

Water @ Rs. 20 /- per kg

25,000

TOTAL UTILITIES

1,00,000

OTHER CONTINGENT EXPENSES

PARTICULARS

AMOUNT

Postage & stationary

10,000

Telephone

15,000

Consumable stores

12,000

Repairs and Maintenance

4,500

Transport charges

5,000

Advertising and publicity

2,000

Miscellaneous expenses

4,500

TOAL CONTINGENCIS EXPENSE

43,000

TOTAL WORKING CAPITAL

PARTICULARS
Personnel

AMOUNT
67,000

Raw Materials

1,88,200

Utilities

1,00,000

Other Contingencies Expenses

TOTAL RECURRING EXPENSES

TOTAL WORKING CAPITAL := 3,58,400 * 3

=10,75,200 /-

43,000
3,58,400

TOTAL INVESTMENTS
FIXED CAPITAL

80,00,500

WORKING CAPITAL

10,75,200

TOTAL CAPITAL
INVESTMENT

90,75,700

COST OF PRODUCTION
PARTICULARS

AMOUNT

Total recurring cost pre unit

43,00,800

Depreciation on building @ 10 %
Depreciation on machinery and equipment @ 15 %

7,50,000
60,075

Interest on total capital investment @ 23 %

17,49,265

TOTAL COST OF PRODUCTION

68,60,140

TURNOVER
PARTICULARS

QTY.

RATE

AMOUNT

Desert Coolers Of
Assorted Capacity

2,000

5,000

1,00,00,000

NET PROFIT PER YEAR :-

= Turnover cost of production

= 1,00,00,000 68,60,140
= 31,39,860

NET PROFIT PER YEAR = Rs.31,39,860 /-

NET PROFIT RATIO :Net Profit Per Year x 100

Turnover Per Year

31,39,860 x 100
-----------------------1,00,00,000
31.40 %

NET PROFIT RATIO - 31.40 %

RATE OF RETURN :-

= Net Profit Per Year x 100

Total Investments
= 31,39,860 x 100
90,75,700
= 34.60%

RATE OF RETURN 34.60%

BREAK EVEN POINT

FIXED COST :[a] Depreciation on Building

[b] Depreciation on Machinery
[c] Interest on Total Investments
[d] 40 % Salary on Wages
[e] 40 % Other Contingency Expenses
TOTAL FIXED COST

NET PROFIT PER YEAR :B.E.P.

= Total Fixed Cost x 100

Total Fixed Cost + profit
=

30,88,300 x 100
.
30,88,300 + 31,39,860

30,88,30,000
62,28,160

49.58 %

BREAK EVEN POINT - 49.58 %

7,50,000
60,075
17,49,265
3,22,560
2,06,400
30,88,300