A PRODUCT PROJECT REPORT ON

-: PERPARED BY: PATEL SAPAN B. COLLEGE H.N. SUKLA ACADEMIC YEAR 2006 07 CLASS T.Y.B.B.A. ROLL NO. SEAT NO. - : SUBMITTED TO: Saurashtra University -: GUIDED BY:Prof. Dr. M.M.Thaker

I have undersigned Mr. Praful A. Chauhan a student of T.Y.B.B.A. hereby declare that the project report is my own work and has been carried out under the supervision on guidance of Prof. Dr. M.M.Thaker , M.T.D.C.C. Rajkot. This work has not been previously submitted to any other university for any other examination.

Date : Place : Rajkot

Signature [Praful A. Chauhan]

Small Scale Industry is the pillar of industrialised Indian economy. In India, the S.S.I. provides more than five times employement than the Large Scale Industry. More over, in a short time preiod, S.S.I. I have made a notable contribution in the adoption of modern techniques. It is very good opportunity for me to submit this report for S.S.I. under the prescribed syllabus of Saurashtra University, Rajkot. The object of this report is to develop enterpreneur skills and awareness. For this purpose the product of leather balls for cricket and hockey. This project provided me with the knowledge of various aspects of launching a new product in this era. I have tried my level best to make this report most precise, relavant and in systematic manner.

Time has no passage to mark its existance but we have language to express. No doubt that the word Thanks is very small to express my hearly feelings. I sincerely express my gratitude and warm regards to our Prof. Dr. M.M.Thaker for her valuable suggestion and guidance during my work. I am also thankful to our Principal Mr. B.S.Dalsania of M.T.D.C.C. Last but not least, I am indeed thankful to my parents for their moral support, encouragement and involvement in my mission and other friends for their help and co-operation.

Praful A. Chauhan

SR. NO.

NAME OF THE TOPIC

PAGE 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 25 26 27

Introduction.........................................................................01 Project at a glance...............................................................02 Implimentation schedule....................................................03 Partners background..........................................................04 Justification of location.......................................................06 Basis and presumption.......................................................09 Pro. details...........................................................................10 Details of Raw material........................................................11 Use of application of product..............................................12 Market Potential..................................................................13 Process outline.....................................................................14 Capacity utilization..............................................................16 Financial aspects..................................................................17 Fixed capital details.............................................................18 Working capital details.......................................................20 Total capital investment......................................................21 Sources of finance................................................................22 Interest on investment or capital........................................22 Depreciation schedule.........................................................23 Cost of production...............................................................23 Sales turnover......................................................................24 Annual fixed cost.................................................................24 Profitability analysis............................................................25 BEP Analysis........................................................................26 Ratio analysis.......................................................................27 Projection.............................................................................28 Future plan..........................................................................29

S.S.I. is economic strength of country. This fact is realised by India after independence. But in recent years, the S.S.I. of India has undergone rapid changes and had flourished in India in earlytimes. S.S.I. provides Raw Material to large scale units and to be partner of success. The most important role of S.S.I. in Indian economy is as greater of employment and equal distribution of income. ROYAL Balls Ltd. is one of the unit of S.S.I. The purpose of this uit is to create cricket and hockey balls from leather. Cricket and Hockey are the two games which are very popular and played not onlyin our country but all over the world. After partition of the country in 1947, a large number of workers migrated to India. They subsequently settled down in Meerut and Jalandhar, where they started manufacturing cricket and hockey balls.

Name of the unit Products Name Address of the office

Royal Balls Ltd. Cricket & Hockey balls G.I.D.C. Metoda, Plot No. 6

Form of the unit S.S.I. registration no. Location of the unit

Partnership Applied for ROYAL Entertainment Balls Ltd. G.I.D.C. Metoda, Plot No. 6, Rajkot.

Cost of production Partners name

1, 12, 22, 307 Vishal Maheta Hiren Ghediya Devang Kamdar

Subsidy registration no. BEP -

Applied for 53.068 %

Sr. No. 1 2 3 4 5 6 7 8 9 10 11

Particular Collection of data Preparation of project report Locan formalities Selection of site Construction of building Machinery installation Recruiting personnel Selection of procurement Receipt of Raw material Obtaining power and water connection and installation of power facilities Registration of S.S.I.
Total

Period 2 months 1 month 1.5 month 1 month 3 month 1 month 1 month 1 month 15 days 1.5 months 1 month
24.5 months

PARTNER 1

Name Age Address

Praful A. Chauhan 20 Jay Bhim Nagar, Kalawad Road Rajkot .

Specialized subjectPresent activity Income Responsibility Experience -

Research Promoter of the Star Engineers 1,00,000 40% Research and Development Fresh

Financial contribution

PARTNER 2

Name Age Address

Makwana Nilesh 25 Ambedkar Nagar, Kalawad Road, Rajkot.

Qualification Present activity Income Responsibility Experience

M.B.A. Financial management The M.D. of Star Engineers 50,000 30% Production Engineer, Finance Deptt. & HRM 3 years

Specialized subject-

Financial contribution

PARTNER 3

Name Age Address Qualification Present activity Income Responsibility Experience

Devang Pandya 22 Nirmal-Shanti, 7-Chhotunagar, Raiya Road, Rajkot. M.B.A. Marketing 30% Marketing Head, Chairman -

Specialized subject-

Financial contribution

Site of selection is an important activity. Because a good location may reduce the cost of production. Locating a business involves a large relatively permanent investment. If the site selection is not proper, all the money spent on factory building machinery and their installation will go in waste and the owner has to suffer a great loss. Therefore, the site for the factory should be selected very carefully. According for our purpose industrial proposition at Metoda, GIDC, Taluka Rajkot, District Rajkot, Gujarat state is selected by us. All infrastructure facilities available the same place are as follows. A TRANSPORTATION The purposed factory will be at Metoda, Rajkot well connected by three modes of transportation, Railway, Roadway & Airway. The factory site is in proximity with the Rajkot Railway Junction and Domestic Airport, the national highway 8B and the state highway Ahmedabad-RajkotKandla. The nearest international city is Mumbai 45 minutes flying time and the nearest major port is Kandala 200 km. by road. So all kind of transporting vehicle, truck, train, ship, plane etc are available not to far from the site and hence our location in respect of to transport availability for the product concerned is the most suitable one. B AVAILABILITY OF RAW MATERIAL

Mainly for our product leather is needed and other raw materials which are in detail given later in this report. All those raw materials are available at Ahmedabad, Bombay, Delhi & Chennai. Most of the raw materials are available at Ahmedabad, which is hardly 235 kms away from our site. As stated earlier, the transportation agencies services are easily available at competitive price from Rajkot which minimizes the cost. So, procurement and transportation of raw materials is not a problem. C MAN POWER All manufacturing concern small or big always depends on available man power skilled, unskilled, semiskilled. We have also given a thought to this matter and found that ours is an area cheep labour is easily available in our project. We had 60% workers labourers type and 40% skilled type. Two options are available with as for recruiting the skill employees, first the Saurashtra University, IIT near Aji Dam and B.K. Modi near Aji Dam in Rajkot and the Ahmedabad city which is hardly 235 kms away from out site. D MARKET All products manufacturers always think about market of these product. Our nearest and main markets are Bombay, Delhi, Ahmedabad, Rajkot, Baroda, Jamnagar, Mahesana etc. To our pleasure, some big parties have afford us to purchase whole of our manufacture lost in full quality and also cricket and hockey balls are needed by them. So, there is no problem in marketing.

WATER FACILITIES Water is not required for product purpose. It is required only for domestic purpose. Arrangement will be made at the site by installing tubewell.

SOURCES OF FINANCE Finance is oxygen or blood for the industry and thus the procurement of finance is very vital. Proximity of the site, to the Rajkot city makes the source of finance closes to the concern. The various financial industries like the nationalized banks, commercial banks, GSFC branch are located in Rajkot city near to the site of the factory.

G OTHER FACILITIES Along with all the above mentioned facilities, other facilities like, the insurance cos, tele-communication, medical services, post-office services etc. are also available in the near by area.

The profit is drawn on the basis of following presumption. 1 No. of shifts Working days Working hours 2 2 shifts 300 days 16 hours

The cost of land is based on the prevailing rates at

Metoda GIDC, Rajkot. 3 The interest rate and depreciation rate are fixed as

per the government specification. 4 The salary and wages have been decided on the basis of local markets. 5 Break Even Point has been calculated on the full capacity utilisation basis.

Generally, these products are based on the leather, thread, cork, polishes and wool are also used with leather in production on cricket and hockey balls. The purpose of unit is to produce qualitative product in the less cost. To make proper and qualitative ball, proper shape, proper weight, qualitative leather, initial stitching etc. are needed. Because these things are help the bowler in delivery and spinning the ball. In this unit, four types of cricket balls are produced according to quality. The hockey and cricket balls are duco finished. There is also the demand for unglazed balls. So, unglazed balls are also produced in this unit.

Raw materials is one of the important things for production. If there is no raw material then there would be no product of this unit. Obtain most of its raw material from the local market. The important raw materials required for the manufacture of cricket and hockey balls are leather, thread, cork, polishes and wool. Fortunately all the items mentioned above except cork are indigenously available. Cork will have to be imported. Thus, the raw materials are available in open market in Gujarat. So, unit does not find any difficulty in collecting raw materials.

Cricket Ball (EXS1275)

Description: Squeezable cricket ball. Minimum quantity - 500. Please check current stock availability. Product Size: 70 x 70 x 70mm Print Area: 40 x 40mm

Prices inclusive of print in one position. Screens are charged extra at 50 Rs per colour, per position. over 500 1 Colour Logo 2 Colour Logo 3 Colour Logo 4 Colour Logo Rs.300 Rs.300 Rs.300 Rs.300 over 1000 Rs.400 Rs.400 Rs.400 Rs.400 over 2500 Rs.500 Rs.500 Rs.500 Rs.500

Cricket is the most popular game in our country. While Hockey is our national game and it is also popular. But compare with the cricket, popularity of the hockey is less. A ball is an important thing for these two games. We can say that ball is blood for cricket and hockey. this unit produce qualitative balls. Care is to be taken to see that properly tanned leather is selected and correct pattern cutting delivery and spinning Stitching also provides the main strength to the balls. So, the balls are stictched clamped in a special mould holding clamps to give the desired shape of the balls. An attractive polish is needed. Hockey and cricket balls are duco finished. Unglazed balls are also produced. These balls re qualitative, strong, attractive and cheap.

Hockey and cricket, these two games are very popular. These games are played in all over the world. So, cricket and hockey balls are demanded product. Looking to the internal and increase in export demand, there is a good scope for starting new manufacturing units in different parts of the country. Meerut, Jalandhar are the starting place or city, where a large number of workers started manufacturing cricket and hockey balls. The demand for quality goods is increasing hence there is a scope for another 10 to 15 new units every year. The raw materials required for the manufacture of cricket and hockey balls are indigenosly available. Even in rural areas, these games are very famous.

The heart of any unit is manufacturing department. This department is also called lubricant oil of any unit. The main aim of any industry is to manufacture something extra-ordinary which attracts the customers. Let us see the process of manufacturing of this unit. Alum tanned leather is used in the manufacture of hockey balls, while vegetable tanned leather is used in manufacturing cricket balls. Properly tanned leather is selected and correct pattern cuting is adopted. Zicronium tanned leather is used for the manufacture of first quality cricket balls. As regards other raw materials such as thread, cork, polish and wool the quality of material used depends upon the quality of balls required to be supplied. The cutting of pieces can be done manually as well as by mechanical dicking process. Two sections are stitched together in seamless stich which runs inside the leather and are called cups. It should be nated that there side not be more than 25 to 26 stitches in the manufacture of joint otherwise the stitches might tear the leather. Different types of raw materials are used for different types of raw materials are used for different quality for ex. For cheaper varieties the mixture of rubber and cork mixtures are usd. Now dry

the balls with the help of machines. Now press the cup in such a way so that wrinkless do not appear in the cup. Now dried cups are stitched by skilled workers. The skilled workers are to be very careful when making the final stitching in two parallel rows. Because it helps the bowler in delivery and spinning the ball. After stitching, electrically heated and good polish is needed. There is also demand for unglazed balls.

The total capacity installed is 25,000 balls per month. In the first year, 50% of the capacity shall be utilized i.e. the month production of balls will be 15,000. In the second and third capacity utilization will be 60% and 70% respectively. Actually the capacity of the unit is alwys fluctuating. At the time of worldcup or cricket tournament, the demand of cricket balls will be increased. So unit can produce more balls at that time.

LAND, BUILDING & FURNITURE

Particular 500 sq.mtrs. of Land of Rs.600 per sq.mtr. 4920 sq.feets of building of Rs.250 per sq.feet Furniture Total Cost 3,00,000 12,30,000 1,00,000 16,30,000

Sr. No. 1 2 3

MACHINERY AND EQUIPMENTS

Particular HP Motor (having capacity of 24 dozens balls) Power operated press Automtic injection moulding machine Stamping press qty. 3 Automatic mixture machines with electrical (2) Electric drying oven heated 2 Electrification, installation and transportation charges Other equipments Stitching frames Other office equipments Total Cost 14,00,000 17,00,500 10,00,000 9,00,000 8,75,000 7,50,000

Sr. No. 1 2 3 4 5 6 7 8 9 10

3,00,000 54,000 20,500 70,00,000

STATEMENT SHOWING TOTAL FIXED COST

Particular Land Building Furniture Machinery & Equipments Total Cost 3,00,000 12,30,000 1,00,000 70,00,000 86,30,000

Sr. No. 1 2 3 4

1 2

RAW MATERIALS

5,50,000

SALARY AND WAGES OF TECHNICAL STAFF AND OFFICE STAFF

Particular Qty. Purchase sales manager 1 Production manager 1 Supervisors 2 Maintanance Engineers 1 Accountant 1 Store Keeper 1 Computer Operator 1 Skilled workers 10 Unskilled workers 15 Total Salary + 20% Benefits ( Labour Act ) Total
3 UTILITIES

Per Person Value 8000 8,000 8000 8,000 2500 5,000 4000 4,000 3500 3,500 2000 2,000 2500 2,500 2400 2,4000 1200 18,000 75,000 15,000 90,000

Electricity Fuel Packing Total

14,000 10,000 7,000 31,000

OTHER CONTINGENT EXPENSES

Postage & Stationary Transportation Sales Expenses Repair and maintanance Insurance Telephone Advertising and publicity Total

2,000 20,000 5,000 2,000 5,000 6,000 5,000 45,000

STATEMENT SHOWING TOTAL WORKING CAPITAL (MONTHLY)

Raw material Salary & Wages Contingent Expenses Utilities Total

5,50,000 90,000 45,000 31,000 7,16,000

WORKING CAPITAL REQUIREMENT ( FOR 3 MONTHS )

Rs. 7,16,000 3

= 21,48,000

Fixed Capital Working Capital Total

86,30,000 21,48,000 1,07,78,000

Particular Machinery Building Land Furniture Working Capital Total

Owned (35%) Bank (25%) IDBI (40%) 24,50,000 17,50,000 28,00,000 4,30,500 3,07,500 4,92,000 1,05,000 75,000 1,20,000 35,000 25,000 40,000 7,51,800 5,37,000 8,59,200 37,72,300 26,94,500 43,11,200

Bank Loan Owned Capital IDBI Total

13% 10% 16%

3,50,285 3,77,230 6,89,792 14,17,307

Machinary Building Land Furniture Total

15% 10% 10% 10%

10,50,000 1,23,000 30,000 10,000 12,13,000

Total requirement of working capital Department of Land Department of Building Department of Machinary Department of Furniture Interest on Bank Loan Interest on Owned Capital Interest on GSFC Loan Total

85,92,000 30,000 1,23,000 10,50,000 10,000 3,50,285 3,77,230 6,89,792 1,12,22,307

Yearly production : 15,000 12 = Selling price Rs. 95 per piece Total annual sales volume : 1,80,000 95 =

1,80,000

1,71,00,000

Dep. on Machinary Dep. on Building Dep. on Land Dep. on Furniture Int. on Bank Loan Int. on GSFC Loan Int. on Owned capital 40% on salary & wages 40% other contingent exp. Total

10,50,000 1,23,000 30,000 10,000 3,50,285 6,89,792 3,77,230 4,32,000 2,16,000 32,78,307

Sales Volume - Cost of Production Earning before interest & tax - Interest on capital Earning before tax - Income tax at 35%

1,71,00,000 1,12,22,307 ---------------58,77,693 14,17,307 ---------------44,60,386 15,61,135 ---------------28,99,251

BEP =

Fixed Cost 100 Fixed cost + Profit 32,78,307 100 32,78,307 + 28,99,251

32,78,307 100 61,77,558

= =

0.53068 100 53.068

ROI

Profit 100 Total Invest

28,99,251 100 1,07,78,000

26.8997

26.9 %

Net Profit =

Profit after interest and tax 100 Sales

28,99,251 100 1,71,00,000

16.95 %

Statement showing sales for the next five year

Particular Qty. Sold (PM) Qty. Sold (PA) Selling Price (PM) Total sales volume Year-1 15,000 1,80,000 95 17,100 Year-2 18,000 2,16,000 95 20,520 Year-3 21,000 2,52,000 95 23,940 Year-4 24,000 2,88,000 95 27,360 Year-5 30,000 3,60,000 95 34,200

ROYAL Entertainment Balls Ltd. has specified future plans to follow. It has fixed goals to be achieved in future. Certain future plans of this unit are as under.

Company wants to increase its sales and profit and be a larbe Company wants to start the production of another balls, such

scale industry. as footballs and volleyballs. Because after cricket, football is very famous game. Company wants to wider its network in whole country. For it they are deciding to establish branches in most of the state in India. Thus, this company has bright future vision and it wants to extend its coverage.