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
