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Prepared By : ZINZUWADIYA JUGAL H.
Class : T.Y.B.B.A.
Roll No : 108
Academic Year : 2011-12
College
C.U.SHAH COLLEGE OF COMMERCE,MANAGEMENT
& COMPUTER EDUCATION WADHWAN.
Enrolment No:
402/515/09
Guided By
PROF. RASHMI PARMAR
Submitted To
SAURASHTRA UNIVERSITY RAJKOT
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DECLARATION
I, the undersigned, Zinzuwadiya Jugal H 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 and guidance of Prof. RASHMI PARMAR of
C.U.SHAH college
This work has not been previously submitted to any other
university for any other examination.
Date: SIGNATURE,
Place: SURENDRANAGAR Zinzuwadiya.Jugal.H
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PREFACE
SSI is a pillar of Indian economy. Most of the businesses
carried out in china are those of small scale units. In India , due to
liberalization and globalization , the competition has increase and a
severe problem has to be faced by SSI of India and thus most of the
small scale units are paralyzed.
Today there is a need for substituting the traditional
management techniques by the scientific system of management
proper implementation of such a technique provides necessary
impetuous to SSI in the right direction at the right time.
I am extremely happy to submit this project report on a small
scale unit under the prescribed syllabus of Saurashtra University
Rajkot. The preparation of a Product Project Report is a modest way
of helping students to develop entrepreneur skills, ability and
aptitude. By making this report , I got a golden opportunity to
acquire practical knowledge of forming such a unit. I have tried to
cover all the relevant points precisely.
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ACKNOWLEDGEMENT
It is a matter of pleasure for me to prepare this report.
I would like to thank the SSI Office Staff, zoom Beverages
(Drink) , Sagar Mineral Water and Giriganga Mineral Water
packages for providing valuable information.
I am also thankful to all the local manufacturers and traders
of Mineral Water for helping me and providing me with valuable
information.
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INDEX
Sr. No Particulars
1 Introduction2 Project at a Glance
3 Bio-Data of Promoters
4 Management Set-up
5 Justification of Location
6 Location of the unit
7 Product Details
8 Market Potential
9 Marketing Strategies
10 Manufacturing Process11 Implementation of Schedule
12 Presumptions
13 Staff and Labour
14 Raw Material
15 Miscellaneous Expenses
16 Utilities
17 Working Capital Requirement
18 Fixed Capital
19 Project Fund20 Sources of Finance
21 Cost of Production
22 Break Even Analysis
23 Ratio Analysis
24 Risk Factors
25 Future Plans
26 Name and Address of Machinery Suppliers
27 Name and Address of Raw-Material
Suppliers
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Introduction
Gujarat is a state where temperature starts from 35 dg to 40
dg and goes up to 40 to 45 dg in summer season. Apart from that
majority part of state of Gujarat is facing deep water crisis in
summer especially kutch. Rajkot is one of the fast developing city
of Gujarat and it is one of the best centres for various economic and
industrial activities.
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Due to continuous increase in population of Gujarat, the
problem of drinkable water is great in Gujarat and Mineral Water
industry try to lessen this problem of drinkable water.
Factually supply of Mineral Water is satisfying only 60% of
total demand. Several firms are already engaged in this business but
capacity & production is limited and demand for the same is
increasing violently. So there is a great possibility of development
of business of mineral water in future in RAJKOT. The product will
enjoy great Marketing acceptance in present as well as in future.
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Project at a Glance
Name of the unit Ganga Mineral WaterForm of Organization Partnership
Name of promoters 1. Mr. Rahul Maheta
2. Mr. Vimal Shah
3. Mr. Smit Ranpara
4. Mr. Hemal patel
Product Mineral Water
Size of the Unit Small Scale UnitSSI Registration No. Application has been made registration
number has not yet been allotted
Location of the Unit Ganga Mineral Water,
Shapar (Veraval), Rajkot.
Cost of the Project 1,24,12,000
Sources of Finance or
Capital Structure
Ownership : - 1,06,12,000
Borrowed Capital: - 18,00,000
Brand Name Pure
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Bio-Data of P artners
Partner I
Name Mr. Rahul Maheta
Age 28
Address 102, Gokul Appartment, Palace
Road, Rajkot
Qualification M.B.A. (FINANCE) & C. A.
Experience 3 years experience in FINANCE
DEPT. OF RAJA MINERAL
WATERResponsibility Responsibility of Policy Making
& Accounting Department
Financial cont. 30%
Partner II
Name Mr. Vimal Shah
Age 30Address 303, Hemsagar Palace, Gondal
Road, Rajkot
Qualification MBA (HRM)
Experience 2 Years experience in HRM
DEPT. OF PURE MINERAL
WATER
Responsibility Responsibility of Personnel
Dept.
Financial cont. 30%
Partner III
Name Mr. Smit Ranpara
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Age 28
Address Radha-Krishna, 25/44 Prahlad
Plot corner, Prahlad Road,
RajkotQualification M.B.A. (MARKETING)
Experience Fresher
Responsibility Responsibility of Mktg. Dept.
Financial cont. 20%
Partner IV
Name Mr. Hemal Patel
Age 30Address 201, Siddhi-Vinayak
Appartment, Kalawad Road,
Rajkot
Qualification M.B.A. (PRODUCTION)
Experience 2 Years experience in
PRODUCTION DEPT. OF
NATIONAL MINERAL
WATER
Responsibility Responsibility of Production
Dept.
Financial cont. 20%
Management Set Up
All these four promoters are entitled to take the post of
directors and all these are working partners. Mr. Rahul Maheta will
handle the finance and accounting Department. Mr. Vimal Shah
will handle Human Resource or Personnel Department.
Mr. Smit Ranpara will handle Marketing Department and Mr.
Hemal Patel will handle Production Department.
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The capital ratio of all these four partners i.e. Mr.Rahul, Mr.
Vimal, Mr. Smit and Mr. Hemal is 30:30:20:20 and the profit
sharing ratio will be 25% each.
Justification of Location
The location of a unit is a crucial decision which an
entrepreneur has to take. There are various factors affecting such a
decision. The location that Ganga Mineral Water has chosen after
analyzing various factors.
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Cost of land: -
The cost of land in this area is lower as compared to land in
the middle area of the city. After cost analysis of land, price and
transportation cost the location has been selected.
Labour: -
Cheap labour resides in large Quantity in this area. Therefore,
the availability of labour is convenient and economical.
Transportation: -
The transport cost is comparatively less because the market
place is away only at a distance of 10-12 Kms and various
transportation vehicles are also available at this location.
Availability of Raw-Material: -
The basic Raw-Material is water. Water is easily available.
Market Nearness:-
The market is near to the mftg. Area so that whenever the
need arises ,
It is possible to supply specified quantity of mineral water to the
local groceries and supermarkets.
LOCATION OF THE UNIT
Name : GANGA MINERAL WATER
ADDRESS : SHAPAR (VERAVAL)
PLOT NO.1 & 2 , SECTOR-3
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RAJKOT
PHONE NO : 0281- 2229497, 2229496
FAX NO : 0281- 4567890
WEBSITE : WWW.GANGAMINERALWATER.COMEMAIL : [email protected]
Product Details
Water is a basic necessity of life, something without whichwe cant exist. Unfortunately, most of the water which reaches our
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home and establishment for drinking is full of bacteria and
without pure Filtering.
The Ganga Mineral Water will be available in the market to
the customers in pouches, bottles and jars. It passes through three
different filters then it reaches for packing.
Per Pouch Rs.1
Per Bottle Rs. 10
The production capacity of this Mineral Water Plant is 24,000
Litres per Month.
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Market Potential
Water is common denomination for every living thing on the
earth. Various impurities such as bacterias, organics, metals
mineral salts and gases are present in water which is naturally
available but we cannot see by eyes but once we look at
microscopic lenses picture, We shall come to know about them.
These impurities cause various diseases in our body and i.e. why we
step into to introduction of a pure water. Purifying system which
produces healthy water at nominal cost and reaches to our day to
day use. Especially for drinking water purpose.
Summer is a period of holidays during which the demand or
requirement of pure mineral water increases because most of the
people are going for picnic.At that time, for the purpose of
drinkable water on picnic places , most of the people uses pouches
as well as bottles of pure mineral water .Gujarat is one of the mostimportant place for picnic, during summer, rush of the people
increase in Gujarat, so at that time, the problem of drinkable water
is great and mineral water industry plays an important role to lessen
this problem. And also. Summer is a season of marriages. Hence, in
marriages also, demand or requirement of pure mineral water is
more.By seeing the potentiality and demand of pure mineral water,
the product will 100% enjoy great acceptance of customers in
present as well as in future.so, thereis a huge potential in mineral
water industry.
As we know that the water is the essential and easily
available element for survival of life, there is no one on the earth
who is not using water, and today in this health conscious era,
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people are so much aware about different diseases which is
spread through water. So, In this era, every one think of use of pure
and treated water.
Thus, by looking all these potentialities , the mineral water
industry has bright future.
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Marketing Strategies
With the launch of this product, Ganga Mineral Water enters
the market with an intention to penetrate consumers with new
strategies like:
(1) Daily Free Delivery: -
Ganga Mineral Water gives the unique facility to its
customers of daily free delivery in offices, home, educational
institute and other places twice a day.
(2) Unique Concept: -
This concept is totally unique. The Ganga Mineral Water uses
Bio-Grade Plastic to packing their product. So, the plastic does not
affect the water.
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Manufacturing Process
Clean/treated water storage There are different steps involved
in this system or process, as under:
Water pumping from bore well.
Addition of Alum and other Chlorination dosage in raw water
storage tank.
Filtration by sand filters.
Filtration by activated carbon filters.
Filtration by micron filters.
Cosmetic pressure system.
Passing of water from no membranes.
UV systems for bacteria killing.
Final polishing filters.
tank.
Packing of water.
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Implementation of Schedule
No. Activity Completion
Time
1. Acquisition of land and construction of building. 1 Month
2. Approval of loan and other formalities. 1 Month
3. Installation of machinery. 1 Week
4. Arrangement of power. 1 Month
5. SSI registration. 20 Days
6. Staff appointment. 3-4 Weeks
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Presumptions
I Working days: 6 Days in a Week
26-27 Days in a Month
II Shift: Double shift
III Working Hours: 7 A.M. to 3 P.M.
4 P.M. to 12 P.M.
IV Government Policy: Very low tax rate prevails at 0.1%
V Banking Policies: (a) Loan Rate 24% p.a.
(b) Subsidy of 10%
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Staff and Labour
No. Particulars No. of
Persons
Rate
per day
Amt. (per
month)
Amt. (per
year)
1. Manager 1 135 4,050 48,600
2 Supervisor 1 110 3,300 39,600
3. Accountant 1 150 4,500 54,000
4. Distributors 1 100 3,000 36,000
5. Salesman (door to
door delivery)
4 70 8,400 1,00,800
6. Unskilled Labour 12 35 12,600 1,51,200
7. Driver 2 50 3,000 36000
8. Peon Cum
watchman
2 25 1,500 18,000
TOTAL 40,350 4,84,200
Therefore, staff salary for three months will be:
40,350 3 = 1,21,050
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Raw Material
The raw material required to produce mineral water are as follow:
No. Items Rate
(Rs./Lit.)
Monthly
Reqmt.
(Lit.)
Yearly
Reqmt.
(Lit.)
Yearly
(Rs.)
Amount
1. Raw Material 8.88 24,000 2,88,000 25,57,440
2. Alum 12.00 5,000 60,000 7,20,000
3. Chlorine &
other Anti
effluents
15.00 6,000 72,000 10,80,000
TOTAL 43,57,440
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Mis cellaneous Expenses
No. Particulars Amount
Rs./Month
Amount Rs./Annum
1. Traveling expenses
(Rs. 300 daily)
9,000 1,08,000
2. Postage & Stationary 800 9,600
3. Repairs &
Maintenance
3,000 36,000
4. Packaging Expenses 14,000 1,68,000
5. Telephone Charges 2,000 24,000
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Utilities
No. Particulars Amount (Rs./Annum)
1. Water (Rs. 9,000 Per Month) 1,08,000
2. Electricity (Rs. 2,000 Per Month) 24,000
TOTAL 1,32,000
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Working Capital Requirement
No. Particulars Amount (per months)
1. Postage & Stationery 800
2. Traveling Expenses 9,000
3. Electricity Expenses 2,000
4. Telephone Expenses 2,000
5. Salaries 40,350
6. Repairs & Maintenance 3,000
7. Raw Material 3,63,1208. Packaging Expenses 14,000
9. Interest on Borrowed capital @ 24% 36,000
10. Depreciation on Plant & Machinery @
8.75%
29,730
TOTAL 5,00,000
Working Capital Requirement for Three Months:
5,00,000 3 = 15,00,000
Working Capital Requirement for Whole Years:
5,00,000 12 = 60,00,000
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Fixed Capital
Fixed Assets
No. Particulars Amount
1. Land (3600 sq. mt). 25,20,000
2. Building (construction cost). 33,92,000
3. Plant & Machinery @ 8.75% 40,00,000
4. Other Assets
Erection & Commissioning Cost.
Furniture & Electricification.
Consultancy Charges
5,00,000
1,00,000
1,00,000
Total Fixed Cost 1,06,12,000
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Sources of Finance
No. Particulars % (Percentage) Amount (Rs.)
1. Owned Capital
Mr. Rahul (30%)
Mr. Vimal (30%)
Mr. Smit (20%)
Ms. Hemal
(20%)
85.50% 1,06,12,000
2. Borrowed Capital 14.50% 18,00,000
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Project Fund
Particulars Amount (Rs.)
Fixed Capital 1,06,12,000
Working Capital 60.00,000
Total Project Cost 1,66,12,000
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Cost of Production
No. Particulars Amt.(Per Month)
1. Raw Material 3,63,120
2. Labour (Direct) 15,900
3. Administrative Cost 66,150
4. Depreciation 29,730
5. Repairs & Maintenance 3,000
6. Interest 0n Borrowed Capital @ 24% 36,000
7. Power & Fuel 6,100TOTAL 5,20,000
Direct labour includes wages of supervision and unskilled
laborers.
Administrative costs include salaries of staff, traveling
expenses, packaging expenses, postage and stationery and
telephone charges.
Depreciation includes the total depreciation of all.
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Break Even Point/Analysis
Break Even point is that level of activity where there is no
profit no loss. Break Even Point can be derived through
mathematical formula or graphical chart.
Break Even Chart indicates approximate profit or loss at
different levels of sales volume. However, Break Even Analysis is
based on certain assumptions, they are as follows:
All costs can be segregated in fixed and variable components.
Production and Sales are equal.
Selling price remains constant at all level.
B.E.P. in Rupee Value: -
Contribution= Fixed Cost + Profit
= 8,06,000 + 8,10,000
= 16,16,000
Whete, Fixed Cost = Electricity Exps. + Int. on Borrowed Capital +
Depreciation on Plant & Machinery
= 4,32,000 + 24,000 + 3,50,000
= 8,06,000
P/V Ratio = Contribution 100
Sales
= 16,16,000 100
70,50,000
= 22.92%
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Where, Sales is a approximately sales for a year
Therefore B.E.P. = Fixed Cost
P/V Ratio
= 8,06,000
22.92%
= 35,16,580 Rs.
B.E.P. in Percentage:
B.E.P. = Fixed Cost 100
Fixed Cost + Profit
= 8,06,000 100
8,06,000 + 8,10,000
= 49.88%
Where, Profit = Sales Cost of Production
= 70,50,000 62,40,000 (5,20,000 * 12)
= 8,10,000
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Ratio Analysis
Net Profit Ratio: -
N.P.R. = Net Profit 100
Sales
= 8,10,000 100
70,50,000
= 11.50%
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Risk Factors
(1) Competition: -
Existing competition from universal Raja Mineral
water, Bisleri Mineral water, Kinley & Oxyrich mineral
Water etc.
(2) Seasonal Fluctuations: -
Seasonal Fluctuations during the year especially in
summer because the basic raw material is water. So, in
summer there is scarcity of water.
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Future Plans
The firm plans the following for years to come:
It may increase its production of mineral water in both
Pouches and Bottles.
The firm plans to have take big orders from Marriages,
Functions and in Parties.
To increase the production capacity and thereby employing
more and more number of workers.
To cover the large part of market share of local region within
2-3 Years.
To provide the best quality of mineral water at reasonable
prices.
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Name & Address of Machinery
Suppliers1. Hindustan Machinery Limited
Near Lal Darwaja,
Baroda
2. Doshi Equipment & Tools Limited
Plot No. 24, 25, 26,
Phase 2,
GIDC VATAVA,
Ahmedabad.
3. Universal System
Tagore Road,
Golden Plaza
Rajkot
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Name & Address of Raw-Material
Suppliers
1. Arena Chemicals Limited
Aji Industrial Estate,
Rajkot
2. Paramount Polythene Limited
Dhebar Road Oneway,
Near City Traffic Police,
Rajkot
3. Orra Plastic Bottle Manufacturing CompanyAshram Road,
Near Sharda School,
Ahmedabad
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