ROYAL ICE CREAM P. MBA Porject Report Prince Dudhatra

8/6/2019 ROYAL ICE CREAM P. MBA Porject Report Prince Dudhatra

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AProduct Project Report

ON

PREPARED BYPRAJESH R. SISOTIA

STUDENT OFT.Y.B.B.A.

FROMSHRI R.P. BHALODIYA COLLEGE

ROLL NO52

SEAT NO

ACADEMIC YEAR2007-08

GUIDANCE BYMR. JAY PATEL

SUBMITTED TOSAURASHTRA UNIVERSITY

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INDEX

Sr. No. Particulars Page No.

(1) Acknowledgement 03(2) Promoters background 05

(3) Project at a glance 07

(4) Significance of location 08

(5) Product and production process 09

(6) Pricing structure 15

(7) Financial Details of the unit 16

(8) Financial provisions 21

(9) Profitability of the project 22

(10) Summary 26(11) Break-even point statement 27

(12) Estimation for next 5 years 29

(13) Future Prospects 33

(14) Bibliography 34

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ACKNOWLEDGEMENT

This is the outcome of product project report (P.P.R.) prepared by me. As per

the rules & regulations of the Saurashtra University, we are supposed to prepare a

product project report in the subject named E.M.S.B. [Entrepreneurship and

Management of small scale Business].

Product project report is important & useful for getting loans from G.S.F.C.

Commercial banks, scheduled banks or from any other financial institutions. This

report clears the idea that how small scale industries being established and how it can

working and developed. I also got an opportunity to produce and know practical

things of P.P.R., which will be useful to me in my future.

I am heartily thankful to the concerned prof. Mr. JAY PATEL for guiding me

in preparation of this report. I also thanks all of them who were guiding me and helps

to prepare this particular project.

I have tried my level best to perform my duty and trace out maximum efforts

for the preparation of this report.

The product, which I had selected, is Ice-cream. So, I also thanks to the local

retailer of Ice cream for providing me the basic necessary information.

Prajesh Sisotia

T.Y.B.B.A

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DECLARATION

I the under signed Mr. Prajesh R. Sisotia student ofT.Y.B.B.A.

studying in Sri R.P. Bhalodiya, 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

Mr. Jay Patel in charge of B.B.A. department of the college.

This project work has not been previously submitted to any other

university for any examination.

Date:

Place:

Prajesh Sisotia

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PROMOTERS BACKGROUND

(1) Name : Prajesh R. Sisotia

ANAND

Chandresh Nagar Main Road

Rajkot. 360 004.

Age : 21 Years.

Educational Qualification : Bachelor in Business Administration.

Experience : 6 months

Nature of work : Marketing Executive

Contribution to the Unit : Rs. 8,25,000

Details of the property held : One bungalow and a farmhouse at

Rajkot.

(2) Name : Hardik D. Goswami.

BALVI NIVAS,

Patel Colony,

Jamnagar.

Age : 21 yearsEducational Qualification : Bachelor in computer Application.

Experience : 6 months

Nature of work : Personnel department &

Other legal matters.

Contribution to the unit : Rs. 6,75,000

Details of the property held : One flat and Ice-cream parlour at

Jamnagar.

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(3) Name : Kalpesh D. Parmar

OM SHIV

Gulab Vihar Society,

Kalawad Road,

Rajkot. 360 005.

Age : 22 years

Educational Qualification : B.E. (Mech.)

Experience : One year

Nature of work : Production department,

Machine handling etc.

Contribution to the unit : 7,00,000

Details of property held : one bunglow at Rajkot and factory at

Metoda.

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PROJECT AT A GLANCE

(1) Name of the unit : ROYAL Fresh Ice-Cream

(2) Address of unit : 2245/2250 G.I.D.C. Metoda,

Near Ramakrishna way Bridge, Dist.

Rajkot.

(3) Address C/o : As Above.

(4) Size of the unit : Small Scale Industry.

(5) Line of activity : Ice-Cream producing unit.

(6) SSI Regd No : Application is made G.I.D.C. for

registration.

.

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PROPOSED LOCATION JUSTIFICATION

Generally the word location is always followed by availabilities of

infrastructural facilities such as power, raw materials, transportation, water,

government regulations, marketing etc.

After a careful watch and proper consideration of all these factors, the

promoters have decided to set-up the plant at G.I.D.C., Metoda, which is rapidly

growing in the field of industrialization. There fore the unit is having the following

advantages-

(1) Easy and quicker transportation is possible. Though, Rajkot is well

connected by road, rail and air transport.

(2) Rajkot is having most of the regional offices, banks, insurance and other

government institutions, which are beneficial for the easy availability of

finance though; finance is a life-blood for and business.

(3) The area is fully excepted from tax which is an added benefit.

(4) Since Metoda is an industrial region the availability of man-power (labour)

is made very easy. Without much effort. Laborers are living in near by

village of Lodhika, etc.

(5) Other facilities like-electricity, water is easily available.

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INFORMATION REGARDING PRODUCT AND

PRODUCTION

(A) INFRODUCTION

Ice-cream is Consumed by all the human being on earth. It doesnt matter that

they falls into which age group. From a small child to the teenagers, adults, mature

persons, or even old peoples tend to eat Ice cream. There is an unbelievable craze of

Ice-cream from U.S.A. to Japan, Europe to Asia, Africa to India. Every country, every

person are habituated to have Ice cream.

Somebody have it in the form of sweet dish, some in the form of fashion, some

in the status and some have no reasons. Because Ice cream creates a magic in the

minds of everybody. From a lower class people to the higher class, Ice cream remains

its position and also becomes a product to be stored by households.

Ice-cream is consumed world wide at the rate of approx. 15 kgs. Per capita.

While in India, it is near about 0-30 kgs. And Ice-cream consumption in the country is

expected to increase from the present 20 lacs tones per annum to 30 lacs tones per

annum by 2005.

The milk producing countries like New Zealand, Denmark, India etc. are

expected to give further boost to the Ice-cream industries processes in India and

particularly in Gujarat.

So, the facts, figures are clearly defines that Ice cream is not just a product, but

it is also become a part of our life. That day is not so far when Ice cream is declared as

a basic necessity.

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(B) MARKET STATUS

The demand for Ice cream is increasing day by day. The life-style and living

standards are changing. Our country is furnished with high society culture.

The fact thing is that, today, in this fact generation, many of the changes takes

place. Especially in the field of Ice-cream, though it was not a new product for people.

But it has an important characteristic that it may never losses its market, because the

word Ice-cream itself is having a deep-rooted meaning that no consumer can fed up

from eating Ice-cream.

Ice cream is highly consumed in the season of summer, but today, people have

it in any season whole the year. Eating Ice-cream in winter is considered as a fashion

and it becomes a trend in India.

As taking into consideration the competitors, there is only one industry

producing. Ice-cream in Saurashtra,. However, the present demand of Saurashtra

region is not fully satisfied by this industry, but the retailers are tend to have the stock

of the producers of mumbai and Ahemdabad that helps to meet the demand of

Saurashtra and Kutch. So, there is a very wide market scope.

The main competitors of Ice-cream at Gujarat level are Amul, Vadilal,

Hovmour etc. Our industry is facing the problem of existence with this big gigantic

and also it will face the competition with the other local producers. Therefore, our

efforts are made to achieve desired goal, which is to capture the Saurashtra region.

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(C) RAW MATERIALS AND ITS SUPPLIERS

The basic raw materials for the making of Ice-cream are as follows-

Milk and Cream

Backing power

Essense and flavoured colours

Sugar and other items

SUPPLIERS

The raw materials is supplied by the following

(1) Gopal Dairy (R.D.C.M.P.U.L.)

Doodh Sagar Marg.

Rajkot 360 001.

(2) Ramakrishna Dairy

7, Bajaj estate,

Silver avenue Road,

Rajkot 360 001.

(3) Baroda Dairy

Baroda 394 004.

[D] PRODUCTION PROCESS

The steps involved in the production of Ice-cream are as follows-

(1) Reciept of raw materials

The raw materials received from the supplier are stored in the

respective containers which has highly advanced technical technical inputs for the

proper maintenance of milk though it is a perishiable product. Then after the other raw

materials are taken to the assembly along with the milk and then production process

starts.

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(2) Mixing

Here all the raw materials are mixed together and freeze at 0 c.

afterwards, again this mixture is exposure to the normal room temperature and send to

the respective department where different flavours are added. Milk is first heated andthen cooled.

(3) Blending

The mixture is well-blended in this department. And when it becomes

soft different flovoures are added. For this purpose, variouse kinds of essense and

backing powder is used. Then the flavoured colour is added.

(4) Cooling

Now, the flavoured Ice-cream is transferred to the cooling tower where

the colling process is done.

(5) Freezing

Here, the Ice-cream is freezed at minimum temperature and dispatched

after 24 hors of freeze.

(6) Dispatched:

The ready made Ice-cream is dispatched as per the order given. For

this, we have a cold storage vans and trucks. The Ice-cream is packed in the boxes,

cups and other packs as per the requirement. Connes and Candies are also been made.

Thus, these are the step0s involving in the production of Ice-cream. One

thing that we care of , is to whole production process by machines only. The

production process is fully exempt from the human touch. So, we are considered the

quality which is the first requirement of consumers.

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(E) PRODUCTION CAPACITY

Installed Capacity

Sr. NO. Name of the Product Daily

Units

Monthly

units

Annual

units

(1) Vanila

(100 ml) cups 0.09 2.25 18.0

(500 ml) packs 0.09 2.25 18.0

(2) Butter scotch

(50 ml) small cups 0.45 1.125 13.5

(100 ml) large cups 0.45 1.125 13.5

Cones 0.45 1.125 13.5

(50 ml) packs 0.45 1.125 13.5

(3) Strawberry(100 ml) cups 0.45 1.125 18.0

(500 ml) packs 0.45 1.125 18.0

(4) Black current 0.90 2.0 20.0

(5) Rajbhog 2.25 2.20 20.5

Total Production 6.03 15.45 166.5

Other sizes and products of the above given can also be produced in the unit

according to the quantity of orders, taking into consideration the choice and taste of

the consumers.

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PRODUCTION CAPACITY

Installed Capacity

Sr. NO. Name of the Product Daily Units Monthly

units

Annual

units

(1) Vanila

(100 ml) cups 0.54 1.35 16.2

(500 ml) packs 0.54 1.35 16.2

(2) Butter scotch

(50 ml) small cups 0.027 1.125 13.5

(100 ml) large cups 0.027 0.675 8.1

Cones 0.027 0.675 8.1

(50 ml) packs 0.027 0.675 8.1

(3) Strawberry(100 ml) cups 0.027 0.675 8.1

(500 ml) packs 0.027 0.675 8.1

(4) Black current 0.054 2.25 10.1

(5) Rajbhog 2.75 2.35 11

Total utilised production 4.046 11.35 102.1

So, the utilised capacity of plant is near about 60%

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PRICING STRUCTURE

Pricing structure of our industry is flexible. It may vary accordingly. But

mostly, price is determined on the basis of raw material consumed. Some of the price

of our products are :

For small cups- from Rs. 5 to 7 per unit

For large cups - from Rs. 8 to 12 per unit

Family Pac - from Rs. 35 to 60 per unit

Party Pac - from Rs. 80 to 120 per unit

Candy - from Rs. 8 to 10 per unit

Cannes- from Rs. 8 to 10 per unit

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FINANCIAL DETAIALS OF THE UNIT

(1) LAND

Area : 52 m 52 mg sq.

Location : G.I.D.C., Metoda, Rajkot District

Non-Agricultural permission number: not yet received

Details of land :

Sr. NO. Open land Meters Rate Total value

(1) 52 m m 2704 Rs. Sq.m 300 per

sq.m.

Rs. 8,1,200

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(2) BUILDING AND PREMISES

Sr.

No.

Details Type of

construction

Area sq.

ft.

Area sq. ft. Rate

(1) Factory shed Only cement 60 60 225 5,40,000

Levelling = 2400

(2) Godown R.C.C. 30 30 450 4,50,000

= 450

(3) Office Room R.C.C. 15 30 525 2,36,250

= 450

(4) Compound wall R.C.C. R.C.C. 15 30 338 1.51.875

= 450

(5) Foundation for Only cement 15 30 375 1,68,750

For machineries Leveling = 450

Total cost of construction 15,01,875

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(3) MACHINARIES

Sr. No. Name of Machine Qty. No. Value

(Rs.)

Suppliers

(1) cooling tower 1 1,50,000 coroseal ind.

Plot 78/c. sector 25

Mumbai 400 002.

(2) Air compressor 1 75,000 Alight Industries

New chamber 6

Ahmedabad

(3) Cold storage container 2 18,00,000 2-B, M.G.Road,

Mumbai 400 003.

(4) High Tech 2 1,25,000 Accurated Pvt. Ltd.,

Blenders 225, Bandar Hill,

Mumbai 400 053.

(5) Refrigerator 2 40,000 Holypack Idustries

Capital comm. Center

Abad 380 009.

(6) Contingencies &

electron charges

(at 10%)

- 2,25,000 -

Total cost of plant &

machinery

24,15,00

0

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(4) FIXED CAPITAL COST OF THE PROJECT

Sr. No. Particulars Amount (Rs.)

(1) Land 8,11,200

(2) Building 15,01,875

(3) Machineries 24,15,000(4) Contingencies (10%) 2,25,000

(5) Preliminary expenses :

furniture 60,000

Others 15,000

Total Fixed capital cost 51,03,075

(5) WORKING CAPITAL REQUIREMENT

Sr. No. Details Period Amount (Rs.)

(1) Raw material 25 days 7,70,000

(2) Work-in-progress 2 days 1,50,000

(3) Finished goods 10 days 4,50,000

(4) bills receivable 30 days 3,75,000

(5) Current expenses

Electricity bill 2 months 7,500

Salary 1 months 42,000

Water 1 months 3,000

Repairs & maintenance 5 days 3,000

Transportation 10 days 19,500Total Working capital 18,00,000

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(6) TOTAL CAPITAL COST OF THE PROJECT

Sr. No. Details Amounts (Rs.)

(1) Fixed capital cost 51,03,075

(2) Working capital cost 18,00,000

Total capital cost of the project 69,03,075

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FINANCIAL PROVISIONS

(i) SOURCE OF FINANCE

For fixed capital, the finance is obtained mainly from G.S.F.C. in the form

of loans. Other sources are subsidy and contribution by partners. The related

details of sources of finance is as under:

Sr. No. Details Loan from

G.S.F.C.

Subsidy Own

contribution

Total

amount

(1) Land 1,80,075 77,175 1,10,250 3,67,500

(2) Building 2,97,675 1,82,250 1,27,575 6,07,500

(3) Machinary 11,02,500 6,75,000 4,72,500 22,50,000

(4) Contingency - - 2,25,000 2,25,000

(5) Preliminary

expenses - - 75,000 75,000

(6) working capital - - 18,00,000 18,00,000

(7) Other expenses - - 75,000 75,000

Total cost 15,80,250 9,34,425 28,85,325 54,00,000

(II) MEANS OF FINANCE

Sr. No. Details Amount (Rs.)

(1) G.S.F.C. Loan 18,80,250

(2) Bank -

(3) Subsidy 9,34,425

(4) Own contribution 28,85,325

Total cost of the project 54,00,000

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(3) SALARY AND WAGES

Factory Staff

Sr.No. Designation Total

No.

Monthly

salary

Total Yearly

Amount (Rs.)(1) Production Manager 1 4,500 54,000

(2) Engineer 1 3,750 45,000

(3) Supervisor 1 2,700 32,400

(4) Skilled workers 4 1,800 86,400

(5) Unskilled workers 6 900 64,800

(6) Guard 1 1,050 12,600

Total 2,95,200

Add: 20% Bonus 59,040

Total cost of factory staff 3,54,240

Office Staff

Sr. No. Designation Total

No.

Monthly

salary

Total Yearly

Amount Rs.

(1) Managing Director 1 4,500 54,000

(2) Marketing Manager 1 3,750 45,000

(3) Personnel Manager 1 3,750 45,000

(4) Accountant 1 2,250 27,000

(5) Clerk & Typist 1 2,250 27,000

(6) Peon 1 750 9,000Total 2,07,000

Add:20% Bonus 41,400

Total Salary of office staff 2,48,400

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(4) ELECTRICITY CONSUMED

Electricity consumed =

H.P. 0.75 Working Hours per day Total no. of days

Percentage in a year utilised capacity= 60 0.75 8 300 60

= 6,48,000

So, the total cost of electricity consumed is 2,50,000

(5) REPAIRS AND MAINTANANCE

Sr. No. Details Monthly Yearly(1) Repairs 1,500 18,000

(2) Maintanance 1,500 18,000

Total cost of repairs & maintanance

(6) INTEREST

Loan from G.S.F.C. is Rs. 15,80,250 and interest on loan is at 18% and the

amount is Rs. 2,84,445.

(7) DEPRECIATION ON ASSETSDepreciation on fixed assets is charged by straight line method. The details are

as under :

Sr. No. Details Asset value Rate of

Depreciation

Amount of

Depreciation

(1) Building 6,00,000 16% 96,000

(2) Machinaries 22,50,000 10% 2,25,000

(3) Furnitures 60,000 125% 750

Total depreciation 3,21,750

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(8) ADMINISTRATION EXPENSES

Sr. No. Details Monthly Yearly

(1) Postage & Stationary 375 4,500

(2) Telephone bill 450 5,400

(3) Miscellaneous expenses 75 900Total administration expenses 10,800

(9) SALES EXPENSES

Sr. No. Details Amount Rs.

(1) Commission on sales 90,000

(2) Salesmans salary (yearly) 13,500

(3) Advertising expenses 9,000

Total sales expenses 1,12,500

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SUMMARY

Sr. No. Details Amount (Rs.)

(1) Raw material 22,50,000(2) Salary & wages 6,02,640

(3) Electricity 2,50,000

(4) Repairs & maintanance 36,000

(5) Depreciation 3,21,750

(6) Interest on G.S.F.C. loan 2,84,445

(7) Administration Expenses 10,800

(8) Sales Expenses 1,12,500

Total cost of production 38,68,135

Profit = Sales - Total cost of production

= 61,85,390 - 38,68,135

= 23,17,255

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BREAK EVEN POINT STATEMENT

Particular Amount (Rs.)

Sales 61,85,390Less : Variable cost

Raw material 22,50,000

Electricity 2,50,000

Sales expenses 1,12,5000 26,12,500

Total variable cost 35,72,890

Contribution 26,12,500

Less : Fixed cost

Salry & wages 6,02,640

Repairs & maintanance 36,000

Depreciation 3,21,750Interest on G.S.F.C. loan 2,84,445

Administration expenses 10,800

Total fixed cost 13,56,865

Total cost 49,29,755

Profit 12,55,635

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P.V. Ratio = Contribution

----------------

Sales= 26,12,500

------------

61,85,390

= 0.42

B.E.P. = Fixed cost

------------

P.V. Ratio= 13,56,865

------------

0.42

= 32,30,630

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ESTIMATION FOR NEXT 5 YEARS

SALES PROJETION

Sr. No. / Year Capacity

Utilisation

Yearly sales (in

Tonnes

Ammount Rs.

(1) 60% 21 61,85,390

(2) 65% 22.75 64,94,660

(3) 70% 24.50 68,03,930

(4) 75% 26.50 71,13,200

(5) 80% 28 74,22,470

VARIABLE COST PROJECTION

(1) RAW MATERIAL

Sr. No./ Year Capacity

Utilisation

Raw material Cost of Raw

material

(1) 60% 26 13,00,000

(2) 65% 28.17 14,08,335

(3) 70% 30.33 15,16,670

(4) 75% 32.50 16,25,000

(5) 80% 34.67 17,33,335

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(2) ELECTRICITY

Sr. No. / Year Capacity Utilisation Cost of Electricity

(1) 60% 2,50,000

(2) 65% 2,70,000

(3) 70% 2,91,000(4) 75% 3,12,500

(5) 80% 3,33,335

(3) SALES EXPENSES

Sr. No. / Years Capacity Utilisation Sales Expenses

(1) 60% 75,000

(2) 65% 81,250

(3) 70% 87,500

(4) 75% 93,750(5) 80% 1,00,000

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CIRCULATION OF B.E.P. FOR FIRST 5 YEARS

Particulars Year 1

60%

Year 2

65%

Year 3

70%

Year 4

75%

Year 5

80%

Sales 61,85,390 64,94,660 68,03,93

0

71,13,200 74,22,470

Less : Variable cost

Raw material 22,50,000 23,62,500

0

24,75,00

0

25,87,500 27,00,000

Electricity 2,50,000 2,62,000 2,75,000 2,87,000 3,00,000

Sales exp. 1,12,500 1,18,125 1,23,750 1,29,375 1,35,000

Total

Variable cost 26,12,500 27,43,125 28,91,87

5

30,04,375 31,35,000

Contribution 35,72,890 37,51,535 39,12,05

5

41,08,825 42,87,470

Less : Fixed cost

Sales & Wages 6,02,640 6,02,640 6,02,640 6,02,640 6,02,640

Repairs &

Maintanance 36,000 36,000 36,000 36,000 36,000

Depreciation 3,21,750 3,21,750 3,21,750 3,21,750 3,21,750

Interest 2,84,445 2,84,445 2,84,445 2,84,445 2,84,445

Admn. Exp. 10,800 10,800 10,800 10,800 10,800

Total fixed

Cost 12,55,635 12,55,635 12,55,63

5

12,55,635 12,55,635

Total cost 38,68,135 39,98,760 41,47,51

0

42,60,010 43,90,635

Profit 32,17,255 24,95,900 36,56,42

0

28,53,190 30,31,835

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Particulars Year 1 Year 2 Year 3 Year 4 Year 5

P.V.Ratio

= Contribution

Sales 0.58 0.58 0.57 0.58 0.58B.E.P.

= B.E.P.

Sales 100 35% 33.33% 32.37% 30.43% 29.16%

M.O.S.

= Profit 39,95,267 43,03,275 46,60,386 49,19,293 52,27,300

P.V.Ratio

P.V. Ratio above 0.55 indicates a very good profitability. Also B.E.P. at sales, i.e., the

position at which firm would be able to break even is much lower than the expected

sales. This claim is further supported by break even ratio. Thus, the break even margin

is quite good and margin of safety is considerably large.

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FUTURE PROSPECTUS

Today, Ice-cream proved its significance that it is a part of our diet. As there is only

one unit in Saurashtra producing Ice-cream, we have a wider scope. Very first, our

main aim is to take over the market of Saurashtra. The unit within 2 years will have an

upper hand over the competitors due to better marketing, personnel, finance and

production.

We utilize maximum of we have, our plan is to increase the capacity upto

90%. And also we are changes the flavours of the Ice cream that people wants. We

introduce some new flavours within the end of next year. Very

Due to high profit volume Ratio, we are able to repay the loan of G.S.F.C.without any problem.

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BIBLOGRAPHY

Marketing Management- Philip Kotler

Project Management- Vasant Desai

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PREFACE

Small is beautiful, so also small scale industry, it is significant

segment of the Indian economy & the objectives underlying its development are

increase in the supply of manufactured goods. The promotion of capital formation, the

development of indigenous entrepreneurial talents and skills and the creation of

employment opportunities.

Students with initiative, creativity and Indian orientation have

wonderful opportunities of becoming successful entrepreneurs of small scale business

unit which have attained a lot of protection and encouragement from govt.

The subject entrepreneurship & management of small scale business.

Adds. Further to the vocational guidance through the course of bachelor of business

administration (B.B.A.).

Students enrolled in the course gain momentum to start their won

business concerns. After graduation and they recognize their destination and

difficulties by preparing this product project report.

PRAJESH R. SISOTIA

ROYAL ICE CREAM P. MBA Porject Report Prince Dudhatra

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