Air Coolers

PRODUCT PROJECT REPORT ON

AIR COOLERS

PREPARED BY

POOJA VYAS

ACADEMIC YEAR

2005 – 2006

CLASS

T.Y.B.B.A.

ROLL NO.

SEAT NO.

SUBMITTED TO

J.H. BHALODIA WOMENS’ COLLEGE

SAURASHTRA UINVERSITY-RAJKOT

GUIDED BY

PROF.SMITA VYAS DECLARATION

I undersigned Pooja J Vyas, 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 professor Smita C. Vyas,

The work has not been previously submitted to any

other university for any examination.

Date :- Signature :-

Place :- Pooja J. Vyas

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 there #fore 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 J. H. BHALODIA WOMENS’

COLLEGE-RAJKOT for giving me opportunity of doing product

project report.

I would like to thank my respected PRINCIPLE MR. R. M.

FULETRA for giving me such an opportunity to have an insight

into the small scale business work in the form of this product

project report.

I specially thank PROF, SITA VYAS-H. O. D. 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.

I thank ALL HIDDEN PERSONALITIES, who played

important roles to complete my product project report successfully.

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 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 60,000

13. Air flow & temp. Measuring apparatus 1,50,000

14. Anemometer 1,50,000 40,05,000

PRE – OPERATIVE EXPENSES

PERTICULARS AMOUNT

Fees for preparation of project report, 1,00,000Deposit to electricity boarded etc.

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 NO. SALARY TOTAL

Works Manager 1 15,000 15,000

Accountant 1 10,000 10,000

Skilled fitter 3 2,500 7,500

Unsilled fitter 5 1500 7,500

Store keeper 2 1500 3000

Peon-cum-Watch man 3 1000 3000

Mechanic 3 5000 3000

Skilled fitter 2 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 L.S. 500

Consumable Stores 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 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 /-

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%

RATE OF RETURN – 34.60%

BREAK EVEN POINT

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 %