81795787-Air-Coolers
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Transcript of 81795787-Air-Coolers
Product Project Report On
Air Coolers
Prepared By
Zala Pratipalsinh
Academic Year
2006 – 2007
Class
T.Y.B.B.A.
Roll No. 41
Seat No.
Submitted To
R.P. Bhalodia CollegeSaurashtra University-Rajkot
Guided By
Ms. Rhuta
Declaration
I undersigned Zala Pratipalsinh K., the student of T.Y. B,B.A. here
by declares that this project is my own work & has been carried out under the
supervision of my guide Ms Rhuta,
The work has not been previously submitted to any other university
for any examination.
Date: - Signature:
Place: - Zala Pratipalsinh K.
Preface
As a management student of the final year of graduation, practical
knowledge about the corporate world is no more a desire or a voluntary action to
be undertaken but a simple bare necessity. Books don’t suffice the level of
knowledge a student is required to possess. A student should have a purview
about the real happenings of the corporate structure.
To suffice the above mentioned requirements BBA the course has
expanded its purview and scope to the world of practical training. Along with the
big corporate entities, a student should have knowledge about all the happenings
and functioning of the small scale industries, in order to be competent managers
or entrepreneurs.
As a student of BBA, one should have sufficient and basic knowledge
regarding how to start a small business, how to management it, how to make a
financial estimates and manage funds and the most important of all how to make
a product project report on the basis of which they can apply for a loan from
bank.
Thus, product project report at this stage makes many things clear in mind
of student which helps lot in future therefore it ensures practical exposure in the
world of business and entrepreneurship and inculcates necessary skills which
are indispensable for any venturous entrepreneur.
Acknowledgement
Successful accomplishment of any work requires co-operation, help and
guidance from many people. I had a wonderful opportunity to make a product
project report on Air Coolers as a part of my practical training in T.Y. B.B.A.
This report would not have been possible without the help of many people
whom I would like to acknowledge and thank for their kind co-operation.
First of all I thank R.P. Bhalodia College – Rajkot, for giving me
opportunity of doing product project report.
I specially thank Ms. Rhuta for giving me important guidance for making
the project informative and well –constructed. She had spent her precious time
for my product project report. It would be impossible for me to complete this
project without her important instruction and supervision.
I thank All My Friends and Classmates for giving me their important
guidance, which was very helpful for me to complete my project in perfect time
duration.
At last, but not least, I thank MY PARENTS & MY FAMILY
MEMBERS to give me every kind of support, and almighty the GOD for helping
me out whenever I viewed an obstacles, as they have left no stone unturned and
betterment.
Date: - Signature:-
Place: - Rajkot
Index
[1] Introduction
[2] Project at Glance
[3] Management Set – Up
[4] About the Partners
[5] Proposed Location Justification
[6] Location
[7] Market Potential
[8] Raw – Materials
[9] Names & Address of Suppliers
[10] Manufacturing Process
[11] Basis & Presumption
[12] Implementation Schedule
[13] Total Fixed Capital
- Land & Building
- Machinery & Equipments
- Pre – Operative Expenses
[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: Gaytri Air Coolers
Address For: “Gayatri 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 Partners: Miss Pooja J. Vyas
Mr. Prakash P. Pathak
Name of the Product: Air Coolers
SSI Registration No: Applied For
Location of the Unit: “Gayatri 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 Partners
(1) About Mr. Abhijitsinh H. Jadeja …
Name: Mr. Abhijitsinh H. Jadeja
Address: ‘Osho’ app.
4, Vidhyanagar,
Vidhyanagar main road,
Rajkot – 360002.
Age: 35 Years
Qualification: Master in Science
Experience: 10 Years Experience in Similar
Business
Responsibility: Factory Work Supervision and
Major Official Work.
(2) About Mr. Zala Pratipalsinh K.
Name: Mr. Zala Pratipalsinh K.
Address: “Ashutosh”,
1, Brahamkunj Soci,
B/H Chandrapark,
150 ft Ring Road,
Rajkot- 360005
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:-
“Gayatri 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 a direct sale 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
Registered Office:
“Gaytri Air Coolers”
Plus Point – 09
Opp. Haribhai Hall,
Dr. Yagnik Road,
Rajkot – 360001.
Factory Office:
“Gaytri 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 continue.
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 Suppliers
[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 Extension, 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.
Manufacturing 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 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 requirements of the tests are as follows:
a) Insulation Resistance Test :-
The insulation resistance between all electrical circuits when
measures at normal room temperature with measure 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] Approximate 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 visualized 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
however, 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. meter per month 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 growth period is normally 6 months and it could
be 2 years. Maximum period for repayment of loan is 7 years including
growth 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
Machinery & Equipments
Particulars Amt Rs. Land & Building 30,00,000Construction 45,00,000
75,00,000
Particulars Amt Rs.Guillotine Shearing Machines 7,50,000Power Press 20 tons capacity 9,00,000Screw type break press 4,50,000Air Compressor complete with motor spray 3,00,000Gas welding set 3,00,000Portable electric drill 90,000Portable flexible shaft grinder 90,000Double ended grinder 1,20,000Merger 3,00,000High voltage test set 3 KV 1,65,000Control panel for measuring power input consisting
of ammeter, voltmeter, wattmeter etc. 1,80,000Multimeter 60,000Air flow & temperature measuring apparatus 1,50,000Anemometer 1,50,000
40,05,000
Pre – Operative Expenses
Total Fixed Capital
Particulars Amt Rs.Fees for preparation of project report, Deposit to
electricity boarded etc. 1,00,000Total Pre – Operative Expenses 1,00,000
Particulars Amt Rs. Land & Building 75,00,000Machinery and Equipment 40,05,000Pre – Operative Expenses 1,00,000
1,16,05,000
Personnel
Designation No. Salary Total
Works Manager 1 15,000 15,000
Accountant 1 10,000 10,000
Skilled fitter 3 2,500 7,500
Unskilled fitter 5 1500 7,500Store keeper 2 1500 3000
Peon-cum-Watch man 3 1000 3000
Mechanic 3 5000 3000
Skilled fitter 2 5000 10000
56,000
Perquisites @ 20% of salary 11,200
Total Personnel 67,200
Raw Materials
Utilities
Other Contingent Expenses
Particulars Qty Rate Amount Rs.
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 L.S. 500
Consumable Stores L.S. 3,000
1,88,200
Particulars Amt Rs.Power (6000 Units) 75,000Water 25,000
Total Utilities 1,00,000
Particulars Amt Rs.Postage & Stationary 10,000Telephone 15,000Consumable stores 12,000Repairs & maintenance 4,500Transport Charges 5,000Advertising and publicity 2,000Miscellaneous expenses 4,500
Total Contingencies 53,000
Total Working Capital
PARTICULARS AMOUNT
Personnel 67,000
Raw Materials 1,88,200
Utilities 1,00,000
Other Contingencies Expenses 43,000
TOTAL RECURRING EXPENSES 3,58,400
TOTAL WORKING CAPITAL :-
= 3,58,400 * 3
=10,75,200 /-
Particulars Amt Rs.
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 % 7,50,000
Depreciation on machinery and equipment @ 15 % 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 2,000 5,000 1,00,00,000Assorted Capacity
NET PROFIT PER YEAR :-
= Turnover – cost of production
= 1,00,00,000 – 68,60,140
= 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 PER YEAR = Rs.31,39,860 /-
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%
BREAK EVEN POINT
RATE OF RETURN – 34.60%
FIXED COST :-
[a] Depreciation on Building 7,50,000[b] Depreciation on Machinery 60,075[c] Interest on Total Investments 17,49,265[d] 40 % Salary on Wages 3,22,560[e] 40 % Other Contingency Expenses 2,06,400
TOTAL FIXED COST 30,88,300
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 %