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I am extremely happy to submit this report for

small-scale industries under the prescribed


syllabus of Saurashtra University. The subject
“Entrepreneurship & manufacturing small scale
business. “Helps to create & develop particular skill
attitudes among the student in practical &
professional education faculty of B.B.A.

Today most of small-scale industries in the


country are handicapped and there is an urgent
need for substitution of traditional management
techniques by specific system of management.
Hence it has been suggested to under such short
term training to manage the business unit
effectively.

1
I the undersigned, Paras C. Fichadiya
student of T.Y.B.B.A here by declare that the project
work presented in this report is my own work and
has been carried out under the supervision of Mrs.
Shyma Gokul of H.N. Shukla College Rajkot.

This work has not been previously


submitted to any other university for any
examination.

Date :

Place :- Rajkot

Sign
ature of student

2
[Paras C.
Fichadiya]

3
Being a student of T.Y.B.B.A. We are
required to prepare a product project report as a
part of our subject entrepreneurship and
management of small-scale industries. This report
has been prepared by my financial capacity and
regulation sentence structure.

I have selected food product “BESHAN”


because it is the fast moving consumer product.
Every food products has big past, present, &
future. Beshan is the most demandable product in
this part of country. Beshan is useful in the making
of sweets, farshan etc..,
I would like to thank my lecturer Mrs.
Shyma Gokul & all staff members of B.B.A. who
have provided me proper guidance and knowledge
in preparing this report.

4
 Project at a Glance.

 Detail about promoters.

 Location.

 Infrastructure, facilities

 Market Analysis.

 Inspection And Quality Control.

 Production Process.

 Details Of Land & Building.

 Details of Plant & Machinery

 Details Of Raw Materials.

 Personnel.

 Production Capacity.

 Financial Details of Project.

 Ratio Analysis.

 Break Even Point.

 Suppliers.

5
 Name of unit :~ PC Private Limited.

 Name of Products :~ Beshan

 Address of Communication :~ IndustrialArea,G.I.D.C.

(Resi. Office) 150/165, metoda,

Rajkot.

 Types of Unit :~ Partnership Firm.

 Size of Unit :~ Small Scale Industry.

 S.S.I. Reg. No. :~ Application Made for

 Location Of Unit :~ IndustrialArea,G.I.D.C.

150/165,Metoda,Rajkot.

 Partners :~ 1) Paras Fichadiya

2) Vishal Kothari.

 No. of Shifts :~ 1 Shifts.

6
Promoter (1) (2)

Name Paras Fichadiya Vishal Kothari

Address “Shree Krishna Kunj” “Purusharth”

21/28, New Jagnath Aaradhana Socity,

Plot, Rajkot – 360 001.

Rajkot – 360 001.

Age 21 years 21 year

Degree B.B.A. B.B.A.

Nature of Marketing & Finance Production &

Work & Department. Technical

Department and all


Responsibility
other Department.
Contribution 50%. 50%.

Experience Fresh Fresh

7
The major activities in the implementation
of the project have been listed and the average time for
implementation is estimated at 11 month.

SR NO PARTICULARS MONTH

1. Preparation of Report ½ month

2. Registration and other formalities 1½ month

3. Sanction of loan by financial institutions 3 month


4. Plant and Machinery

 Placement of orders 1 month

 Procurement 1 month

 Power Connection 1 month

 Installation of Machine 1 month


5. Procurement of Raw Materials 1 month

6. Recruitment of technical personnel 1 month

8
The unit is located at such area where it can avail the

concerned business easily. Moreover exact location is place where

there us minimum of cost & maximum profit can be achieved.

Before setting a unit, entrepreneur has to kept in mind

the various location factors such as availability of land, power,

water such infrastructure facilities availability of labour etc..,

It is quite known that metoda G.I.D.C. (Rajkot) is an

industrial area & we can obtain any facility as a convenient way.

Surrounding area is containing a big market for the Beshan. There

are many other facilities of factors, which inspired us to choose

proposal location.

9
 LABOURS :~

Generally all types of main power are available have at

reasonable cost. As for as this manufacturing firm is concerned

with semiskilled labour and there ew also get labour in adequate

number and at cheap rate.

 RAW-MATERIALS :~

There is more transportation facility because of center

point of Saurashtra. From this we can easily get the raw materials

like gram , gram-dal , bags etc., We purchase raw materials from

Delhi, Aakola and also from Rajkot.

 TRANSOPRTATION & COMMUNICATION :~

As we have seen that Rajkot is a center point of

Saurashtra. So transportation facilities are available in Rajkot. It is

situated on National High Way. So, road transport is easily

available.

10
 INDUSTRIAL ATMOSPHERE :~

There is better industrial atmosphere in metoda near

Rajkot as so many other industrial. Like Textile, Steel, Cotton,

chemical, oil Industrial etc., are located there. Hence we could

easily develop jour industry through inspiration of other industries.

 FINANCIAL FACILITIES :~

There are so many banks and individual many land

from which our financial requirement is satisfied.

 OTHER FACTORS :~

There are so many other factors, like electric

connection, maintenance of machine, technical knowledge, which

are responsible for the set up of our industry in this area.

Thus, location proposed by us in suitable in every

aspects.

11
Infrastructure, facilities
provided by G.I.D.C.

The industrial sheds of G.I.D.C. are fully equipped with

facilities like electricity, telephone, water, transportation, etc

Skilled & semi-skilled workers are available from Rajkot &

surrounding areas.

From marketing viewpoint, a good demand exists for own

product.

Rajkot, being a big city, all the means of transportation is

available.

Rajkot is developing commercially. Small & Medium scale

industries are coming up in Shapar, Varaval, Morbi &

Bamanbor. Hence for these industries also, demand for

Beshan still exists.

12
Industrial progress is the backbone of nation’s

economy. Industrial Evolution is a natural process over a number

of years.

A Market consists of all the potential customers sharing

a particular need or want who might be willing & able to engage in

exchange to satisfy that need or want.

Food Industry has experienced tremendous growth

over last 2 decades in light of growing business, increased

expansion of industrial undertakings.

The market potential for Beshan should be

evaluated in light of in Increase demand of farshan. Every Age of

person wants to eat new variety of farshan, Which was made by

the Beshan. Items made by the Beshan are almost used in every

function of this side of the country. So, this business has the big

future ahead of its.

13
To survive in a competitive business environment

organization makes all possible efforts to produce the products,

which satisfy their customers to the maximum extent.

“Quality cannot reliability. Quality is consumers is the

golden code the existence of the product”.

In a product like Beshan, from raw material to finish

goods inspection & quality control is required. Simple devices &

methods will be used to check the raw material proportion & quality

& every stage.

14
 CLEANING :~

The gram are taken out of room and cleaned by

labourers employed for cleaning. Any dust particle or other

particles along with gram are separated from it. Then the grams

are read for further process.

 WASHING :~

To make Beshan, this is the second process of the

production. In this process grams are washed and made gram

separated from the dust.

 SEPARATING :~

After being washed grams are ready for separating

process. This separating process is between gram and dal. When

husk taken-up on to the gram become dal and ready to further

processing.

15
 GRINDING :~

In this process the dal are grinding in to the

machine, which is roller and palvarider flour. In this machine dal of

gram is become Beshan which is the final product of the firm when

the Beshan is ready its go to the packing department.

 PACKING :~

In this part or we can say in this manufacturing

process, Beshan is packed in different scale in bardan bags,

generally the scale of packing is 50 Kg. or 100 Kg.

16
PARTICULAR AREA AREA

Land @ Rs 135 2,000 sq. ft. 2,70,000

Building @ Rs. 2600 375 sq. mtrs. 9,75,000

Total 2,000 sq. ft. 12,45,000

17
NO. PARTICULAR QTY. COST (RS.)

1 Separator & Cleaning 1 1,50,000


2 roller & Pulverizer 1 2,25,000
3 Sent Figure 1 1,40,000
4 Scale & Packing 1 50,000
5 Octroy Charge
+ Installation & Electrification 7,500
Charges 7,500 15,000

Total 5,80,000

6 Furniture 60,000
7 Tools 25,000
8 Computer & Telephones 45,000
Preliminary & Pre-operative
9 Expense 68,000

TOTAL 7,78,000

18
The following is regarding raw-material required per

month to manufacturing Beshan.

MONTHLY
NO. DESCRIPTION QTY. kg.
1 Gram & Gram Dal 90,000

 Raw – material for Beshan, Rs. 20 per kg.

 Total Cost of Raw Material per month 1800000 Rs .

19
No. Description Person
1 Marketing Manager 1
2 Finance Manager
3 Personnel Manager 1
4 Skilled Workers 2
5 Semi Skilled Workers 8
6 Clerck 1
7 Accountant 1
8 Peons 1
9 Computer Operator 1

Total 17

20
The expected capacity utilization on double basis for

300 das during first year operation is 50 %

The unit is expected to achieve full capacity utilization

from the 2nd year onwords.

PARTICULAR 1st year 2nd year


50% 100%
Beshan 5,40,000 kg. 10,80,000 kg.

Total Rs ( P. A.) 1,19,07,000 2,46,24,000

21
22
No. PARTICULARS
1 Fixed Capital Details
2 Personnel
3 Other Expense
4 Utilities
5 Fixed Cost
6 Variable Cost
7 Working Capital Requirement
8 Total Capital Investment
9 Source of Finance
10 Interest On Capital
11 Loan Repayment Schedule
12 Depreciation
13 Production Schedule
14 Details Of Sales
15 Cost of Production
16 Cost Sheet
17 Operating Statement
18 Profit & Loss A./c.
19 Balance Sheet.

23
No. Details Price
1 Machinery
a) Separator & Cleaning 1,50,000
b) Roller & Pulverizer 2,25,000
c) Sent Figure 1,40,000
d) Scale & Packing 50,000
e) Octroy Charge 15,000

Total 5,80,000

2 Furniture 60,000
3 Tools 25,000
4 Computer 45,000
5 Preliminary & pro-operative Exp. 68,000
Total 7,78,000

6 Land & Building 12,45,000

Total Fixed Capital 20,23,000

24
Salar Total Totla P.
NO. Description Nos. y (P.M.) a.
Production Staff
1
Skilled Workers 2 3,500 7,000 84,000
2 Semi-Skilled Workers 8 2,500 20,000 2,40,000
Total 27,000 3,24,000

Administration Staff
3 Accountant 1 3,500 3,500 42,000
4 Peons 1 2,000 2,000 24,000
5 Computer Operator 1 2,500 2,500 30,000
6 Clerks 1 3,000 3,000 36,000
Total 11,000 1,32,000

Manager
Marketing Manager
7 (partner 1
Finance Manager 12,000 12,000 1,44,000

8 Production Manager
Personnel Manager
(Partner) 1 12,000 12,000 1,44,000

Total 24,000 2,88,000

Total 62,000 7,44,000

25
DETAILS AMT. AMT.
(P. M.) (P.A.)
Postage & Stationary 900 10,800
Repair / Maintanance 3,400 40,800
Advertisment & Publicity 1,200 14,400
Miscellaneous Expenses 600 7,200
Telephone Expense 3,500 42,000
Transport 5,600 67,200

Total 15,200 1,82,400

26
Details Amt. Amt

P.M. P.M.

Power 16,000 1,92,000

27
PARTICULAR 1STYear 2nd year

Rs. Rs.
Administration Staff 1,32,000 1,32,000
Managers 2,88,000 2,88,000
Other Expenses 1,09,440 1,09,440

Particular 1st year 2nd Year

Rs. Rs.
Production Staff 3,24,000 6,48,000
Utilities 1,92,000 2,56,000
Other Expenses ( 40%) 72,960 1,45,920

28
No. DETAILS Two Months P. A.
1) Raw Material

45000 Kg. @ 20 Rs. 18,00,000 1,08,00,000

900000
2) Personnel

Fixed 70,000 4,20,000

Variable 54,000 3,24,000


3) Other Expenses

Fixed 18,240 1,09,440

Variable 12,160 72,960


4) Utilities 32,000 1,92,000
Total 19,86,400 1,19,18,400

29
No, DETAILS Rs. Rs.
1) Fixed Capital

a. Machinery 5,80,000

b. Furniture 60,000

c. Tools 25,000

d. Computer 45,000

e. Preliminary & Pro- 68,000

Operative Exp.

f. Land & Building 12,45,000 20,23,000


2) Working Capital 19,86,400`

(2 months)
Total Project Cost 40,09,400
Round about to Say 40,10,000

30
Finance is the lifeblood for any unit. All transaction &

production process revolve around the finance. Due to its location

the financial facilities are easily available & Government. Also

provides loans at subsidized rates. The unit will collect its required

funds in following ways.

No. DETAILS Rate Amount


1. Own Capital (60 %) 9% 24,06,000
2. Borrowed Capital (40 %) 11 % 16,04,000
Total 40,10,000

31
No. PARTICULAR 1st Year 2Nd Year

50% 100 %
1 Own Capital 2,16,540 2,16,540
2 Borrowed Capital 1,76,440 1,41,152
Total 3,92,980 3,57,692

No. PARTICULAR 1st Year 2nd Year


1 Opening Balance 16,04,000 12,83,200
2 Payment Of Principal 3,20,800 3,20,800
3 Payment of Interest 1,76,440 1,41,152
Total 4,97,240 4,61,952

32
No. Name Of Assets 1st year 2nd year
BUILDING
1 Building 9,75,000 8,77,500
Less : Depreciation @ 10 % 97,500 87,750
Depreciated Value 8,77,500 7,89,750

Plant & Machinery


2 Plant & Machinery 5,80,000 4,35,000
Less : Depreciation @ 25 % 1,45,000 1,08,750
Depreciated Value 4,35,000 3,26,250

Tools
3 Tools 25,000 21,250
Less : Depreciation @ 15 % 3,750 3,187
Depreciated Value 21,250 18,063

Computer
4 Computer 45,000 18,000
Less : Depreciation @ 60 % 27,000 10,800
Depreciated Value 18,000 7,200

Other Fixed Assets


5 Other Fixed Assets 60,000 51,000
Less : Depreciation @ 15 % 9,000 7,650
Depreciated Value 51,000 43,350

33
RAW MATERIAL REQUIREMENT

No. Particular 1st year 50 % 2nd year 100 %


Rs. Rs.
1. Gram & Gram 1,08,00,000 2,16,00,000

Dal (45,000 X 12 X 20) (90,000 X 12 X

20)
Total 1,08,00,000 2,16,00,000

34
Particular Amt. Amt.
Capacity of Machinery (Kg.) 10,80,000 10,80,000

Capacity Utilization 50 % 100 %

Production (Kg.) 5,40,000 10,80,000

Add : Opening Stock (kg.) - 54,000

Less : Closing Stock (kg.) 54,000 10,800

Kg. Sold 4,86,000 10,26,000

Selling Price (Rs.) 24.5 24


Total Rs. 1,19,07,000 24,62,400

35
PARTICULARS 1st year 2nd year
Capacity Of Machinery 10,80,000 Kg. 1,08,000 Kg.
Capacity Utilization 50 % 100 %
Production Quantity 5,40,000 kg. 10,80,000 kg.
Variable cost
Raw – Material 1,08,00,000 2,16,00,000
Labour 3,24,000 6,48,000
Utility 1,92,000 3,84,000
Other Expenses ( 40 % ) 72,960 1,45,920
Total Variable Cost 1,13,88,960 2,27,77,920
Variable Cost Per Unit 21.09 21.09
Fixed cost
Dep. On Building 97,500 87,750
Dep. On Plant & Machinery 1,45,000 1,08,750
Dep. On Computer 27,000 10,800
Dep. On Tools 3,750 3,187
Dep. On Fixed Asset 9,000 7,650
Labour 4,20,000 4,20,000
Other Exp. (60 %) 1,09,440 2,18,880
Int. On Capital 3,92,980 3,57,692
Total Fixed Cost 12,04,670 12,14,709
Total Cost
V.C. + F.C. 1,25,93,630 2,39,92,629
Total Cost Per Kg. 23.50 26.65

36
DETAIL Price 1st year 2nd year
P.U. 5,40,000 9,00,000
Kg. Kg.
Raw Material 20 1,08,00,000 2,16,00,000
Utility 0.35 1,92,000 3,84,000
Direct Wages 0.6 3,24,000 6,48,000
Prime Cost 20.95 1,13,16,000 2,26,32,000

Add : Factory Overheads


a) Personnel Manager 0.26 1,44,000 1,44,000
b) Depreciation 0.52 2,82,250 2,18,137
c) Repair & Maintanance 0.8 40,800 48,960
d) Miscellaneous Exp. 0.2 7,200 14,400
Factory Overheads 22.73 1,17,90,250 2,30,57,497
Add : Administrative
Overheads 0.02 10,800 18,000
1. Postage & Stationary 0.08 42,000 70,000
2. Telephone Expenses 0.08 42,000 42,000
3. Accountant 0.04 24,000 24,000
4. Peons 0.06 30,000 30,000
5. Computer Operators 0.07 36,000 36,000
6. Clerks 0.03 1,44,000 1,44,000
7. Finance Manager 0.04 2,16,540 2,16,540
8. Interest On Loan
Cost Of Production 25.25 1,22,93,590 2,36,38,037
Add : Opening Stock Of - 13,23,000
Beshan 2.45 13,23,000 26,46,000
Less: Closing Stock 22.8 1,09,70,590 2,23,15,037
Cost Of Good Sold
Add : Selling & Dist.
Overheads 0.03 14,400 27,000
Advertisement 0.15 67,200 18,000
Transport
Selling & Distribution Cost 23 1,10,52,190 2,25,22,037
Profit 1.57 8,54,810 21,01,963

37
Sales 24.5 1,19,07,000 2,46,24,000

PARTICULAR 1ST year 2nd year


Rs. Rs.
(A) Total Sales 1,19,07,000 2,46,24,000
Cost Of Operation
Raw – Material 1,08,00,000 2,16,00,000
Utility 1,92,000 3,84,000
Wages 3,24,000 6,48,000
Total Cost 1,13,16,000 2,26,32,000
Add : Op. Stock - 13,23,000
Less : Closing Stock 13,23,000 26,46,000
(B) Total Operating Cost 99,93,000 2,13,09,000
(C) Gross Profit [ A – B] 19,14,000 33,15,000
Indirect Expenses
Fixed 1,09,440 1,09,440
Variable 72,960 1,45,920
Salary Of Staff 4,20,000 4,20,000
Depreciation 2,82,250 2,18,137
Preliminary Exp.{W.D.} 10,200 8,670
8,94,850 9,02,167
(D) Total Indirect Exp.
(E) E.B.I.T. [C – D] 10,19,150 24,12,833
Interest of Owners Loan 2,16,540 2,16,540
Interest On Bank Loan 1,76,440 1,41,152
(F) Total Interest 3,92,980 3,57,692
(G) E.B.T. [E – F] 6,26,170 20,55,141
(H) Tax @ 35 % 2,19,160 7,19,300
(I) E.A.T. [G – H ] 4,07,010 13,35,841
Add : Depreciation 2,82,250 2,18,137
Less : Payment Of 3,20,800 3,20,800
Installment 3,68,461 12,33,178
Net Cash Received

38
DETAILS 1st year
Rs.
Sales 1,19,07,000
Closing Stock 13,23,000
Total 1,32,30,000
Expenditure
Opening Stock
Purchase 1,08,00,000
Utility 1,92,000
Wages 3,24,000
Other Expense
a) Postage & Stationary 10,800
b) Repair & Maintenance 40,800
c) Advertisement & Publicity 14,400
d) Miscellaneous Exp. 7,200
e) Telephone Exp. 42,000
f) Transport 67,200
Salary 4,20,000
Depreciation
a) Building 97,500
b) Plant & Machinery 1,45,000
c) Tools 3,750
d) Computer 27,000
e) Fixed Assets 9,000
Preliminary Exp. {W. D} 10,200
Interest
a) Own Loan 2,16,540
b) Borrowed Loan 1,76,440

Income Tax 2,19,160


Profit After Tax 4,07,010

Total 13,23,000

39
DETAILS 1st year
Rs.
Liabilities
Own Capital 24,06,000
Net Profit 4,07,010

Loan Borrowed 16,04,000


Less : Loan Repayment 3,20,800
Net Loan Borrowed 12,83,200

Creditors 50,000
Total 41,46,210
Assets
Fixed Asset 19,55,000
Less : Depreciation 2,82,250
Net Assets 16,72,750

Debtors 6,11,660
Closing Stock 13,23,000

Preliminary Expenses 68,000


Less : Written Down 10,200
Net Preliminary 57,800

Cash 2,00,000
Bank Balance 2,81,000
Total 41,46,210

40
Net Profit Ratio :~ Net Profit After Interest & Tax X 100
Sales

= 4,07,010 X 100
1,19,07,000

= 3.42 %

Gross Profit Ratio :~ Gross Profit X 100


Sales

= 19,14,000 X 100
1,19,07,000

= 16.07 %

Return On Investment :~ EBIT X 100


Sales

= 10,19,150 X 100
40,10,000

= 25.40 %

41
Cost Of Capital :~ Interest On Capital X 100
Capital Employed

= 3,92,980 X 100
40,10,000

= 9.80 %

ROI is hire Than COC , So We can say that Project is viable.

42
Break even analysis refers to a system of

determination of that level of activity where total cost equals total

revenue, Boarder interpretations refer to that probable profit at any

level of activity. The relationship among cost of profit, volume of

production, profit & sales value established by Break Even

Analysis. The Point of sales at which there is neither profit nor liss

is regarded as BEP. At this point income equals expenditure. If

production is enhanced beyond this level, Profit shall accrue & if it

is decreased, loss shall be suffered.

Following is the breakeven analysis of this project.

43
Contribution = Sales Price - Variable cost (P.U.)

= 24.5 - 21.09

= 3.41 Rs. Per Kg.

B.E.P. = Fixed Cost X Capacity Utilization


[ in unit] Contribution P.U.

= 12,04,670 X 50 %
3.41

= 1,76,638 Kg.

Contribution = Fixed Cost - Profit

= 12,04,670 + 4,07,010

= 16,11,680 Rs.

44
B.E.P. = Fixed Cost X Capacity Utilization
[ in % ] Contribution

= 12,04,670 X 50 %
16,11,680

= 37.37 %

P. V. Ratio = C X 100
S

= 16,11,680 X 100
1,19,07,000

= 13.50 %

45
Machinery :

JK PVT. LTD.
Puna Highway
Industrial Area.
MUMBAI

Raw Materials :

Dalal Narendra Popat


Canvassing Agent,
Kirana Market , Kothari Bazar,
AKOLA (M.S.)

M/s. DEEPAK CANVASING AGENT


CANVASING AGENT
NATARAJ CHAMBER,BARADAN GALI
DANAPITH,
RAJKOT- 360001

M/s. VALAJI MADHAVAJI


MARKETING – YARD
RAJKOT

46
It is truly said, “The world is a Book. Every step, we

take, open up a new page for us.” Competitions & innovations are

increasing day by day.

1. The industry will bear the loan liability of Rs. 1604000 from

Raj Bank.

2. Changes in government policy & restrictions on raw material

acquisition may considerably affect profitably of the industry.

In the initial years, industry will demand substantial

efforts, time & money in exploiting markets. However it has

promising markets all over Gujarat.

47
Success lies in the constancy of purpose. From the

very beginning it has followed the above punch lines. No doubt it is

a small-scale unit, but from the viewpoint of production. Marketing,

profits, services, etc. This unit will prove to be a successful unit. It

is truly said that, “Knowledge & motivation coupled with sustained

efforts is the recipe of success.” In any field, success demands lots

if efforts, Knowledge, guidance and the most important thing

motivation. Beshan is a food product, seeing the growth of its

market it has a definite bright future.

In short, innovative decision making, goal setting, drive

& dynamism sums up the achievement of PC Pvt. Ltd Where all

seven “S” of management viz. “System”, “Strategy”, ”Structure”,

“Service”, “Staff”, “Skill” & “Style” are blended into a new stature.

48