Biscuit Mixture project

7/29/2019 Biscuit Mixture project

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A

PRODUCT PROJECTREPORT

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


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DECLARATION

I Hirpara Anil v. undersigned a student ofT.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 ofProf. Nirav

joshi ofGeetanjali 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.)


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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.


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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.)


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INDEX

No. Particular

1 Introduction of Product.

2 Project at a Glance.

3 Partners Background.

4 Location.

5 Market Potential.

6 Raw material.

7 Basis and Presumption.

8 Implementation Schedule.

9 Manufacturing Process.

10 Production Capacity.

11 Financial Details of Project.

(A) Details of lord and Building.

(B) Machinery & Equipments.

(C) Other Fixed Assets.


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12 Working Capital.

(A) Personnel.

(B) Raw material.

(C) Utilities.

(D) Other Contingent Express.

13 Project Cost.

14 Sources of Funds.

15 Depreciation.

16 Financial Analysis.

(A) Cost of Production.

(B) Turnover.

(C) Return on Investment.

(D) Profitability Analysis.

(E) Break Even Analysis.

(F) Balance Sheet.

17 Suppliers of Machinery.

18 Future Prospects.

19 Risk Factors.


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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.


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Project At A Glance

Name of unit : Sun feast Food ProductCommunication Address : GIDC, AJI Vasahat, Rajkot- 360 001

Form of organization : Partnership Firm, Register Under,

Partnership Act, 1932

Partners : 1. Hirpara Anil v.

2. Aambalia Jaimin

Name of the Product : BISCUIT

S.S.I. Registration No. : Application has been Made

Subsidy Registration No. : Application has been MadeType of Industry : Food Industries

Type of Organization : Partnership

Budget cost of Product : 22,23,000

Means of Finance : Owned Capital and Loan from GSFC

Bank Rajkot.

No. of Employees : 16

Plant Installed Capacity : 100 %

Partners Background

Partner I


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Name : Hirpara anil v.

Age : 20 Years.

Education : B.B.A. with Advance, Marketing

Management.

Address : Kalavad Main Road, Gurudev Park,

DHANAN JAY Rajkot-360005

Financial Contribution : 5,55,750.

Duties and Responsibilities : Marketing and Production Department.

Partner II

Name : Aambalia Jaimin.

Age : 25 Years.

Education : M.B.A. with Financial Management.

Address : MADHUVAN 150 Ring road,Maruti

Park, RAJKOT-360005

Financial Contribution : 5,55,750.

Duties and Responsibilities : 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:


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1. Availability of Raw material.

2. Cheaper Manpower.

3. Transport Facilities.

4. 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.


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So, we can class by whole Biscuit market into there

categories based on area:

1. Urban Market.

2. Semi-Urban Market.

3. Rural Market.

Raw Material

The main raw material used in Biscuit Mixture are as

follows:

1. Wheat Flour.

2. Sugar.

3. Vegetable Fat.

4. Miscellaneous Items.

(A) Milk Powder.


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(B) Chemical.

(C) Colour Flavor.

(D) Coco Vit Fat.

(E) 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.


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Implementation Schedule

The Implementation Schedule will be given as below:

1. Preparation of Project Report Selection of Site

Registration as S.S.I. unit.

3 Months

2. Availability of Finance Selection of Machinery,

Procurement of Machines.

3 Months

3. Erection and Commissioning Trial Run. 1 Months

4. Recruitment of labours and Commercial

Production.

Months


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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.


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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 Production Utilized

1. Biscuit Mixture. 100 gm. Packets 3,50,000

Packets

2,62,500

Packets.

2. Biscuit Mixture. 200 gm. Packets 3,50,000

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.


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Financial Aspect

(I) Details of Lard & Building

No. Details Area [sq. Ht] PSM Rate Total Valve

1. Lard & Building 600 2,000 12,00,000

(II) Machinery & Equipment

No. Details No. of

Machines

Amount

1. Shifter Fitted with 3 Hp Motor 1 30,000

2. Micropuluerser complete with Motor 1 50,000

3. Cabinet model electrically operated

oven with 48 trays each 32" 16" 1"

with thermostatic control & other

1 1,00,000


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accustoms

4. Weighing machine

a. Platform Type capacity 100

kg.b. Table model.

1

1

20,000

5,000

5. Polythene Bag sealing machine (5,000

each)

2 10,000

6. Miscellaneous equipments tools, trays,

bells etc.

50,000

Total Machinery & Equipment 2,65,000

(III) Other Fixed Assets

No. Details Amount

1. Electricity & Installation 25,500

2. Office Furniture & Other Equipment 81,500

1,07,000

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

= 15,72,000


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Working Capital

1. Personnel

No. Particular No. of

Employees

Monthly Total Cost

1. Manager 1 8,500 8,500

2. Accountant Store-keeper 1 6,500 6,500

3. Clerk cum Typist 1 4,000 4,000

4. Mechanical Supervisor 1 3,000 3,0005. Peon cum Chowkidar 2 2,000 4,000

6. Skilled labour 3 2,100 6,300

7. Unskilled labour 7 1,100 7,700

Total salary & wages 16 40,000

Add Facilities (20% of salary) 8,000

Total 48,000

2. Raw material [per month]

No. Particular Quantity

(14 Kg)

Rate

[perkg.]

Value

1. Wheat Flour 4,200 7 29,400

2. Sugar 1,300 15 19,500

3. Vegetable Fat 750 60 37,500

4. Miscellaneous items Milk

Powder, Chemicals, Colour,

Flavor, Coco, Vit, Fat, Glucose,

etc.

15,600

5. Packing Material 42,000


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Total 1,44,000

3. Utilities [per month]

No. Particular Amount

1. Power 4,000

2. Water 6,000

Total 10,000

4. Other Contingent Expenses [per month]

No. Particulars Amount

1. Postage and Stationary. 800

2. Telephone. 2,000

3. Consumable Stores. 1,200

4. Repair & maintenance. 1,000

5. Transport Charge. 2,000

6. Insurance. 1,0007. Sales Expenses. 3,000

8. Other Miscellaneous Expenses. 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


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1. Fixed Capital


1. Land and Building 12,00,000

2. Machinery & Equipment 2,65,000

3. Other Fixed & Installation

a. Electricity & Installation

b. Office Function & other Equipment

26,500

80,500

Total 15,72,000

2. Working Capital


1. Personnel (Wages & Salary) 48,000

2. Raw Material 1,44,000

3. Utility of Power & Water 10,000

4. Other contingent Expenses 15,000

Total 2,17,000

Total capital investment: -

Fixed Capital Investment 15,72,000

Working Capital for 3 months (2,17,000 3) 6,51,000

Total Project Cost 22,23,000

Sources of Funds: -

No. Description Amount

1. Owned Capital 11,11,500

2. Borrowed Capital 11,11,500

22,23,000


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Partners Capital: -


1. Vasoya Jayesh J. (50%) 5,55,7502. Vasoya Kirit V. (50%) 5,55,750

11,11,500

Borrowed Capital: -


1. G.S.F.C. Bank Loan 11,11,500

11,11,500

Interest on Fund: -

No. Description Rate Amount

1. Owned Capital 9% 1,00,035

2. Borrowed Capital 12% 1,33,380

2,33,415

Depreciation: -

No. Description Rate Amount


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1. Depreciation on Machinery 25% 66,250

2. Depreciation on L&B 15% 1,80,000

3. Depreciation on Other 12% 12,840

Assets

2,59,090

Cost of Production

No. Particulars Amount

1. Total recurring cost per year (2,17,000 12) 26,04,000

2. Total Depreciation 2,59,0903. Interest on Investment 2,33,415

30,96,505


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Turnover

No. Particular Rate per packet Quantity Value

1. Biscuit Mixture 200

g.m. Packet

Rs. 9.5 2,30,000 21,85,000

2. Biscuit Mixture 100

g.m. Packet

Rs. 4.5 2,30,000 10,35,000

Annual Turnover 32,20,000


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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 9 %

Interest on Borrowed Capital 12 %

COC = 9 + 12

2


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= 10.5 %

Thus, ROI > COC

Profitability Analysis

Sales 32,20,000.00

Less: Cost of Production 28,36,090.00

EBIT 3,56,910.00

Less: Interest 2,33,415.00

EBIT 1,23,495.00Less: Tax 35 % 43,223.25

PAT 80,271.75

Profit Volume Ratio:

PUR = Contribution 100

Sales

= 9,18,400 100

32,20,000

= 28.52%

Net Profit Ratio:


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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 2,59,090

40% of Salary & Wages 2,30,400

40% of other Contingent Expenses 72,000

Interest on Total Investment 2,33,415

7,94,905

Variable Cost:

60% of Salary & Wages 3,45,600

60% of other Contingent Expenses 1,08,000

Raw Materials 17,28,000


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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%


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Trading & P&L Acc.

Particulars Amount Particulars Amount

Purchase 17,28,000 Sales 32,20,000

Utility 1,20,000

Wages 92,400

Gross Profit 12,79,600

32,20,000 32,20,000

Salary 4,83,600.00 Gross Profit 12,79,600Depreciation 2,59,090.00

Interest 2,33,415.00

Other Contingent 1,80,000.00

ExpensesEBT 1,23,495.00

Less: Tax 43223.25

Net Profit 80271.25

12,79,600 12,79,600


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Balance Sheet

Capabilities Amount Assets AmountCapital: L & B

Owned: 12,00,000

Dep.: 1,80,000 10,20,000

Paresh 5,55,750

Deepak 5,55,750 11,11,500.00

Machine& Equip.Borrowed: 11,11,500.00 2,65,000

Dep.: 66,250 1,98,750

Interest 2,33,415.00

Other Assets

Net Profit 80,271.75 1,07,000

Dep.: 12,840 94,160

25,36,686.75 Cash & Bank 12,23,776.75

25,36,686.75

Suppliers of Machinery


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Address of Machines andEquipment Suppliers:

(i) M/s. Nagpal Brothers,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


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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.


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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.


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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


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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.


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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.

Biscuit Mixture project

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