Sunteți pe pagina 1din 35

A PRODUCT PROJECT REPORT

On

: PREPARED BY:

HIRPARA ANIL V.
: CLASS:

T.Y.B.B.A.
: COLLEGE:

Geetanjali College of Commerce & B.B.A. RAJKOT.


: ACADEMIC YEAR :

2006 2007
ROLL NO.

___

SEAT NO.

: SUBMITTED TO:

SAURASHTRA UNIVERSITY.
: GUIDED BY:

Prof. Nirav joshi

DECLARATION
I Hirpara Anil v. undersigned a 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 Prof. Nirav joshi of Geetanjali College Of Commerce & B.B.A. Rajkot. This report has not been previously submitted to any other University your any examination.

DATE: PLACE: RAJKOT (Hirpara Anil V.)

PREFACE
The B.B.A. is a professional course, which helps the students to develop the skills in business, and about industry in T.Y.B.B.A. the product project report is the part of our syllabus. The product project report shows us actually what difficulties is new entrepreneur of small business faces while starting his unit. A product project report plays a significant role for small business especially for financial arrangement thats why proper care should be taken in preparing this report.

ACKNOWLEDGEMENT
I glad to present Product Project Report on BISCUIT MIXTURE to the Saurashtra University. In this reference, I am heartly thankful to Prof. Nirav joshi for support and guidance provided by her. I am also thankful to all those person who have helped me in every aspect for preparing the project.

DATE: PLACE: RAJKOT (Hirpara Anil V.)

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

Particular
Introduction of Product. Project at a Glance. Partners Background. Location. Market Potential. Raw material. Basis and Presumption. Implementation Schedule. Manufacturing Process. Production Capacity. Financial Details of Project. (A) (B) (C) Details of lord and Building. Machinery & Equipments. Other Fixed Assets.

12

Working Capital. (A) (B) (C) (D) Personnel. Raw material. Utilities. Other Contingent Express.

13 14 15 16

Project Cost. Sources of Funds. Depreciation. Financial Analysis. (A) (B) (C) (D) (E) (F) Cost of Production. Turnover. Return on Investment. Profitability Analysis. Break Even Analysis. Balance Sheet.

17 18 19

Suppliers of Machinery. Future Prospects. Risk Factors.

Introduction Of Product
Biscuits constitute an important item of bakery industry. Today Biscuits become a common item of consumption among all classes of people with tea or coffee Biscuits make a tasty nutritious shake. Biscuits are become here and more popular as a convenient food with the changes taking place in the economic life of masses, the consumption of Biscuit has been increasing over the years, and this envisages the scope for setting up of Biscuit Mixture units. People started manufacturing Biscuits of their own taste by using baking ovens very popular in the market now days. To made it more convenient there is a need of Biscuit Mixture which will be ready mix and after adding water, the dough will be ready mix hour on commercial scale saves times, labour and is sometimes ever cheap to the housewives.

Project At A Glance
Name of unit Communication Address Form of organization Partners Name of the Product S.S.I. Registration No. Subsidy Registration No. Type of Industry Type of Organization Budget cost of Product Means of Finance No. of Employees Plant Installed Capacity : : : : : : : : : : : : : Sun feast Food Product GIDC, AJI Vasahat, Rajkot- 360 001 Partnership Firm, Register Under, Partnership Act, 1932 1. Hirpara Anil v. 2. Aambalia Jaimin BISCUIT Application has been Made Application has been Made Food Industries Partnership 22,23,000 Owned Capital and Loan from GSFC Bank Rajkot. 16 100 %

Partners Background
Partner I

Name Age Education Address Financial Contribution Duties and Responsibilities

: Hirpara anil v. : 20 Years. : B.B.A. with

Advance,

Marketing

Management. : Kalavad Main Road, Gurudev Park, DHANAN JAY Rajkot-360005 : 5,55,750. : Marketing and Production Department.

Partner II
Name Age Education Address Financial Contribution Duties and Responsibilities : : : : Aambalia Jaimin. 25 Years. M.B.A. with Financial Management. MADHUVAN 150 Ring road,Maruti

Park, RAJKOT-360005 : 5,55,750. : Personnel and Financial Department.

Location
To choose the proper location is first step for establishment of unit. True selection of location helps unit for better growth, while selecting the site of location the factors should be considered are as follows:

1. 2. 3. 4.

Availability of Raw material. Cheaper Manpower. Transport Facilities. Availability of Energy sources.

I shall start Biscuits industry in Rajkot at GIDC, Aji Vasahat because Raw material and labour are the main factors in this industry which is early available at this place.

Market Potential
The consumption of Biscuit has been increasing over the years. The finding of survey indicates that nearly 47% of Biscuits are consumed in the rural and semi-urban areas which constitutes bulk of our population. Looking at such a demand this ready mix can definitely be a popular item particularly in rural and urban areas.

So, we can class by whole Biscuit market into there categories based on area:

1. 2. 3.

Urban Market. Semi-Urban Market. Rural Market.

Raw Material
The main raw material used in Biscuit Mixture are as follows: 1. 2. 3. 4. Wheat Flour. Sugar. Vegetable Fat. Miscellaneous Items. (A) Milk Powder.

(B) (C) (D) (E)

Chemical. Colour Flavor. Coco Vit Fat. Glucose Etc.

5.

Packing Material.

Above all raw materials are easily available from local market. So, there is no difficulty to get raw material. So, there is les of transportation. All the materials are available from local market.

Basis And Presumption


1. The scheme is based on single shift 300 working days per annul. 2. For the first 2 years the utilisation capacity will be 65.71% from the third year onwards it will run at its full capacity. 3. Labour wages as per the rate prevailing in the area.

Implementation Schedule
The Implementation Schedule will be given as below: 1. Preparation of Project Report Selection of Site Registration as S.S.I. unit. 2. Availability of Finance Selection of Machinery, 3 Months 3 Months

Procurement of Machines. 3. Erection and Commissioning Trial Run. 1 Months 4. Recruitment of labours and Commercial Months Production.

Manufacturing Process
The ingredients normally used are Maida, Sugar, Vanaspati or Bakery Fat, Backing powder, Milk powder, Essence and Chemicals. The ingredients as per 0formulation except Vanaspati bakery fat are dried to desired moisture content before grinding if required. They are then weighed, mixed and blended thoroughly. The product thus obtained is packed in polythene bags of suitable size paper box and then kept in big cartoons for storing and transportation. The fat is to be added at the fire of preparation of the mixture for baking by the consumer.

Quality Specification: -

It is a new product and therefore the quality specifications about Moisture content and bacteriological count etc. are required to be looked into.

Production Capacity
No. Item Size 1. Biscuit Mixture. 100 gm. Packets 2. Biscuit Mixture. 200 gm. Packets Production 3,50,000 Packets 3,50,000 Packets Utilized 2,62,500 Packets. 2,62,500 Packets.

The total production capacity at 100% is 3,50,000 packets of 100 gm & 3,50,000 packets of 200 gm. The utilized capacity is about 65.71% so 2,30,000 packets of 100 gm & 2,30,000 packets of 200 gm.

Financial Aspect
(I) Details of Lard & Building
Area [sq. Ht] 600 PSM Rate 2,000 Total Valve 12,00,000

No. Details 1. Lard & Building

(II) Machinery & Equipment


No. 1. 2. 3. Details Shifter Fitted with 3 Hp Motor Micropuluerser complete with Motor Cabinet model electrically operated oven with 48 trays each 32" 16" 1" with thermostatic control & other No. of Machines 1 1 1 Amount 30,000 50,000 1,00,000

4.

accustoms Weighing machine a. Platform kg. Type capacity 100 1 1 2 20,000 5,000 10,000 50,000

5. 6.

b. Table model. Polythene Bag sealing machine (5,000 each) Miscellaneous equipments tools, trays, bells etc.

Total Machinery & Equipment

2,65,000

(III) Other Fixed Assets


No. Details 1. Electricity & Installation 2. Office Furniture & Other Equipment Amount 25,500 81,500

1,07,000
Total Fixed Cost = = 12,00,000 + 2,65,000 + 1,07,000 15,72,000

Working Capital
1. Personnel
No. 1. 2. 3. 4. 5. 6. 7. Particular No. of Employees 1 1 1 1 2 3 7 16 Monthly 8,500 6,500 4,000 3,000 2,000 2,100 1,100 Total Cost 8,500 6,500 4,000 3,000 4,000 6,300 7,700 40,000 8,000 48,000

Manager Accountant Store-keeper Clerk cum Typist Mechanical Supervisor Peon cum Chowkidar Skilled labour Unskilled labour Total salary & wages Add Facilities (20% of salary) Total

2. Raw material [per month]


No. 1. 2. 3. 4. Particular Wheat Flour Sugar Vegetable Fat Miscellaneous items Milk Powder, Chemicals, Colour, Flavor, Coco, Vit, Fat, Glucose, etc. Packing Material Quantity Rate (14 Kg) [perkg.] 4,200 7 1,300 15 750 60 Value 29,400 19,500 37,500 15,600

5.

42,000

Total

1,44,000

3. Utilities [per month]


No. 1. 2. Particular Power Water Amount 4,000 6,000

Total

10,000

4. Other Contingent Expenses [per month]


No. 1. 2. 3. 4. 5. 6. 7. 8. Particulars Postage and Stationary. Telephone. Consumable Stores. Repair & maintenance. Transport Charge. Insurance. Sales Expenses. Other Miscellaneous Expenses. Amount 800 2,000 1,200 1,000 2,000 1,000 3,000 2,000

Total

15,000

= =

Total Recurring expenditure


1,44,000 + 48,000 + 15,000 + 10,000 Rs. 2,17,000

= =

Working Capital for 3 Months


2,17,000 3 Rs. 6,51,000

Project Cost

1. Fixed Capital
No. 1. 2. 3. Particular Land and Building Machinery & Equipment Other Fixed & Installation a. Electricity & Installation b. Office Function & other Equipment Amount 12,00,000 2,65,000 26,500 80,500

Total

15,72,000

2. Working Capital
No. 1. 2. 3. 4. Particular Personnel (Wages & Salary) Raw Material Utility of Power & Water Other contingent Expenses Amount 48,000 1,44,000 10,000 15,000

Total

2,17,000

Total capital investment: 15,72,000 6,51,000 22,23,000

Fixed Capital Investment Working Capital for 3 months (2,17,000 3) Total Project Cost

No. 1. 2.

Sources of Funds: Amount 11,11,500 11,11,500

Description Owned Capital Borrowed Capital

22,23,000


No. 1. 2.

Partners Capital: Amount 5,55,750 5,55,750

Description Vasoya Jayesh J. (50%) Vasoya Kirit V. (50%)

11,11,500

No. 1.

Borrowed Capital: Amount 11,11,500

Description G.S.F.C. Bank Loan

11,11,500

No. 1. 2.

Interest on Fund: Rate 9% 12% Amount 1,00,035 1,33,380

Description Owned Capital Borrowed Capital

2,33,415

No.

Depreciation: Description Rate Amount

1. 2. 3.

Depreciation on Machinery Depreciation on L&B Depreciation on Other Assets

25% 15% 12%

66,250 1,80,000 12,840

2,59,090

Cost of Production
No. Particulars 1. Total recurring cost per year (2,17,000 12) 2. Total Depreciation 3. Interest on Investment Amount 26,04,000 2,59,090 2,33,415

30,96,505

Turnover
No. Particular 1. Biscuit Mixture 200 2. g.m. Packet Biscuit Mixture 100 g.m. Packet Rate per packet Rs. 9.5 Rs. 4.5 Quantity 2,30,000 2,30,000 Value 21,85,000 10,35,000

Annual Turnover

32,20,000

Return on Investment
ROI = EBIT 100 Cost of Project = 3,56,910 100 22,23,000

16.05%

Cost Of Capital
Interest on Owned Capital Interest on Borrowed Capital 9% 12 %

COC

9 + 12 2

10.5 %

Thus, ROI > COC

Profitability Analysis
Less: Less: Less: Sales Cost of Interest EBIT Tax 35 % Production EBIT 32,20,000.00 28,36,090.00 3,56,910.00 2,33,415.00 1,23,495.00 43,223.25

PAT
Profit Volume Ratio: PUR = Contribution 100 Sales = 9,18,400 100 32,20,000

80,271.75

28.52%

Net Profit Ratio:

Net Profit Ratio

Net Profit 100 Sales

80,271.75 100 32,20,000

2.50%

Break Even Analysis


For the calculation of B.E.P., we have to calculate fixed cost & variable cost

Fixed Cost:
Total Depreciation 40% of Salary & Wages 40% of other Contingent Expenses Interest on Total Investment 2,59,090 2,30,400 72,000 2,33,415

7,94,905

Variable Cost:
60% of Salary & Wages 60% of other Contingent Expenses Raw Materials 3,45,600 1,08,000 17,28,000

Utilities

1,20,000

23,01,600

Contribution:
Contribution = = Sales Variable Cost 32,20,000 23,01,600

9,18,400

BREAK EVEN POINT:


B.E.P. (in %) = Fixed Cost Utilized Capacity Contribution = 7,94,905 65.71 9,18,400

56,87%

Trading & P&L Acc.


Particulars Purchase Utility Wages Gross Profit Amount Particulars 17,28,000 Sales 1,20,000 92,400 12,79,600 Amount 32,20,000

32,20,000
Salary Depreciation Interest Other Contingent 4,83,600.00 Gross Profit 2,59,090.00 2,33,415.00 1,80,000.00 1,23,495.00 43223.25 80271.25

32,20,000
12,79,600

Expenses
EBT Less: Tax Net Profit

12,79,600

12,79,600

Balance Sheet
Capabilities
Capital: Owned: Paresh 5,55,750 Deepak 5,55,750 Borrowed: Interest Net Profit 11,11,500.00 Machine& Equip. 11,11,500.00 2,65,000 Dep.: 66,250 2,33,415.00 Other Assets 80,271.75 1,07,000 Dep.: 12,840 1,98,750

Amount
L&B

Assets
12,00,000 Dep.: 1,80,000

Amount

10,20,000

94,160

25,36,686.75 Cash & Bank

12,23,776.75 25,36,686.75

Suppliers of Machinery


(i)

Address Equipment Suppliers:


M/s. Nagpal Brothers,

of

Machines

and

2789 Zorawar Singh Marg, Delhi.

(ii)

M/s. Nagpal Engg. Works, Loharogate, Patiala.

(iii)

M/s. Baltiboi & co. (p) Ltd., P.B. No. 1904 Fort, Bombay 400 001.

(iv)

M/s. Novel Engineers Pvt. Limited, 4th Floor, Sambhava Chambers, Sir Phirozshah Mehta Road, Bombay 400 001.

(v)

M/s. Narang Corporation, P 24 Cop naught place, New Delhi 110 002.

Address of raw material Suppliers:


Locally Available

Risk Factors

In each and every business activity there is some risk in the some way our unit is also having some risk factory, which are as follows:

As our product is under the list of food items so if license not provided by government authority within a specific time it is difficult to start the production. There is also possibility for non-receipt or less receipt of loan from government. At present there is minimum competition in the market but in the future then may be cut-throat competition and it may be difficult to continue the business at the time of competition. It is also possible that all the factory may suitable for production and finance but the marketing of our products may not enough so there is every possibility of failure or close-down the unit.

Future Prospects
Every unit airs at its growth and development in future at the time of establishment. The future development of any unit shows its success in the market. Future development may be get through the increasing installed capacity or utilizing the existing resources of the unit to the full extend. So far as our unit is concern we have to utilize folly the available resources of our unit and by increasing production capacity we want to cover none market share with maintenance of good quality. There are so many varieties of Biscuits in the market. The consumption of Biscuits has been increasing over the year. We wants to cover more market in rural as well as in urban areas. Looking to this good prospect I select the product of Biscuit. It is for medium clays people as well as poor class people also.

Risk Factors
In each and every business activity there is some risk in the some way our unit is also having some risk factory, which are as follows:

As our product is under the list of food items so if license not provided by government authority within a specific time it is difficult to start the production. There is also possibility for non-receipt or less receipt of loan from government. At present there is minimum competition in the market but in the future then may be cut-throat competition and it may be difficult to continue the business at the time of competition. It is also possible that all the factory may suitable for production and finance but the marketing of our products may not enough so there is every possibility of failure or close-down the unit

Future Plan
At present, we have production capacity 2604000 per year. This is highest capacity utilization of my unit. I want to go for expansion of my unit or I will establish other same type of unit at near area of the existing location.

There is a possibility of success of my future is up to 99.99% because rajkot city is on the highest level in exporting biscuit &final product Sun feast Food Product in India .

My next future plan is to get up new plant for feast Food Product. In this unit I will launch a lot of Food Product.

Conclusion
To set up any new unit and run it smoothly is not an easy task to handle. Moreover, in this world of competition, to stand in market for long time with desired profile is not an easy task for any entrepreneur. It is more import for government to increase of S.S.I. because S.S.I. sectors are the main sources for providing raw materials to the large scale sectors.

The preparation of this project is not any surprise for me because I am having each and every skill of production and marketing of my product. Though, I have gate more knowledge about the risk and financial measurement in theoretical manner, which is an important part of any small business unit.