Entrepreneurship Development Institute of India PRODUCT PROJECT REPORT ON WHEEL CAPS PREPARED BY Enrolment No.: - 091010067E Name: - HIREN P MEHTA Address: - “MAA” 36, Divya Siddhi Park Airport Road RAJKOT 360 005. Tele No : - 0281 – 2471683 EVALUATED BY Name: - SHRI MAYANK UPADHYAY Address: - YUVAK VIKAS TRUST
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Entrepreneurship Development Institute of India
PRODUCT PROJECT REPORTON
W H E E L C A P S
PREPARED BY Enrolment No.: - 091010067E
Name: - HIREN P MEHTA
Address: - “MAA”
36, Divya Siddhi Park
Airport Road
RAJKOT 360 005.
Tele No : - 0281 – 2471683
EVALUATED BY Name: - SHRI MAYANK UPADHYAY
Address: - YUVAK VIKAS TRUST
OPP. NAVJIVAN PRESS
OFF ASHRAM ROAD
AHMEDABAD, GUJARAT
Tele No : - 079 -27540482
DECLARATION
I undersigned Nainesh M. Mashrani, a student of TYBBA hereby declare that the project work presented in this report is my own work and has been carried out under the supervision of Dr. Swati Doshi of Christ College, Rajkot.
This work has not been previously submitted to any other industries or university for examination.
Date:-
Place: - Rajkot
(Nainesh Mashrani)
PREFACE
The course of B.B.A. is designed in a special way through which young entrepreneurs are generated. In the third year of this course, the subject “entrepreneurship and Management of Small Scale Business” is included with a view to creating and developing good entrepreneur skills and attitudes among students in a practical and professional way.
Today in the growth rate of the Indian economy, contribution of small scale industry is highly important. The S.S.I. plays a vital role by contributing 40% to the total national income. Therefore it is management and working of SSI as a student of management.
As such, I have great pleasure in the presentation of the report on “Wheel Caps” which is the practical study in TYBBA of Saurashtra University.
The report prepared is completely imaginary with fictitious information and imaginary figures to acquire practical knowledge.
ACKNOWLEDGEMENT
In accomplishing any task a person is aided by many people who through their little or more contribution help in his/her success.
I take this opportunity to express my sincere thanks to all those who have helped me in the preparation of this report.
Also I would thank my parents and friends and Dr. Swati Doshi for constant support and encouragement due to which the work is accomplished.
Date :–
Place :–
(Nainesh Mashrani)
INDEX Sr. No. Particulars Page No.
1 Introduction
2 Project at Glance
3 Promoter Background
4 Organizational Structure
5 Justification of Location
6 Product Details
7 Market Potential
8 Raw Materials
9 Machines
10 Manufacturing Process
11 Production Capacity Schedule
12 Staff and Labour Details
13 Financial Details
Total Fixed Asset
Cost of Production
14 Total Working Capital Requirement
15 Total Capital Investment
16 Source of Finance
17 Interest of Capital
18 Depreciation
19 Annual Cost of Production
20 Break Even Analysis
21 Cost of Capital
22 Return on Investment
23 Profitability Analysis
24 Projected Operating Statement
25 Projected Cost Sheet
26 Projected Balance Sheet
27 Projected Profit & loss Account
28 Projected Balance Sheet
29 Risk Factors
30 Name & Address of Raw Material Suppliers
31 Name & Address of Machineries Suppliers
32 Disclosure of Significant Accounting Policy
33 Conclusion
I N T R O D U C T I O N
Small scale industry is the pillar of Indian economy. Most of the business carried out in India is from small scale units. Small scale units provide raw materials to large scale units. The number of small scale units, the volume and range of products manufactured, the employment provision and value of exports by these industries have grown substantially during the last few decades.
In this fast moving world vehicles play a vital role in itself. Without the help of vehicles, no matter whether private or transport vehicles a task could not be completed independently. As per the current market trend everyone likes changes and not rigidity. Many a time we get bored by seeing same things again and again. Wheels are the main part of the car and are used the most than any other part in the car. It is not possible every time to change the whole wheel to change its show, so here I came with a solution by manufacturing the wheel caps, the whole view of your wheels gets changed just by changing its caps.
One of the most important issues that need to be taken into consideration before establishing a new unit is the location of the proposed project. We have to take into consideration many points. It involves cost which affect to the profitability of the business. Moreover there are other environmental condition and infrastructure facilities too.
This unit is to be located at Rajkot in Aji G.I.D.C. which is an industrial area. Here there are many benefits for setting up the unit.
Following are the advantages which justify the location of Aji area –
Easy availability of the raw materials
Nearness to target market
Availability of good infrastructure facilities
Easy availability of labour and at cheaper rate
P R O D U C T D E T A I L
A product is anything that can be offered to market for satisfying the consumers needs and wants. This product is mainly used in the replacement market and rarely used for the OE [Original Equipment] customers.
Product Features:
There are many features of wheel caps and they are as follows:
Wheel caps are of many different designs, shapes and sizes. So the customers have wide choice for selection.
Wheel caps can be fit in all the four or more wheel vehicles, no matter whether small cars or large trailers.
One gets 100% consumption from this product as there is no wastage of product.
Price of the product is economical as compared to other competitors so even the small class people can afford to buy it.
USES:
Wheel caps are used to cover the rims of the tyres. It is available in many different sizes, colours, shapes, designs, etc.
BRAND NAME:
Brand represents the company in the mind of the customers. Brand also plays an important role in marketing. Good brand creates goodwill of the firm in the market. Once the brand occupies its space in the market, company would have to face less competition in this competitive market.
Company ‘ s LOGO:
M A R K E T P O T E N T I A L
Market oriented thinking is necessary in today’s competitive world. Now a day’s most of the companies are competing to enlarge their share in the existing market. As a result there are winners and losers. The Losers are those who bring nothing special in the market and the winners are those who carefully analyze the market need, identify opportunities and create value added offer for target customers group that matches the needs.
Now a day the main aim of business is creation of customers as marketing is more important than production. Customer oriented marketing is a theme of modern marketing management. Today to stand in the competition and capture more market, to attract the customer by providing effective and attractive sales, promotional schemes and advertising is done and the most important is by providing qualitative goods with innovation.
There is a vast market available for wheel caps and considering the population of our country, there is a great scope for growth of this industry. It has also enormous demand as these wheel caps help in improving the looks of the vehicles. We too know now a day the accessories market is flourishing day by day and touching the heights which were never touched before. This itself shows there is unlimited demand for these kinds of products. Here the thing matters is not “How would you sell?” but “How much can you manufacture?”
R A W M A T E R I A L S
T h e m a i n r a w m a t e r i a l u s e d f o r m a n u f a c t u r i n g w h e e l c a p s i s H I P G r a d e P l a s t i c G r a n e a u l s . P l a s t i c a r e a v a i l a b l e o f m a n y d i f f e r e n t g r a d e s , b u t f o r h i g h e r d u r a b i l i t y i t i s p r e f e r r e d t o u s e H I P G r a d e p l a s t i c w h i c h i s s u i t a b l e f o r w h e e l c a p s . T h e r e a r e m a n y c o m p a n i e s i n I n d i a w h i c h m a n u f a c t u r e s t h i s g r a d e o f p l a s t i c . F o r m a n u f a c t u r i n g w h e e l c a p s e x a c t p l a s t i c s h e e t s a r e n o t u s e d b u t i n s t e a d p l a s t i c g r e n e a u l s a r e u s e d .
M A C H I N E S
Machines play a very important role in any manufacturing unit. Machines make the work easy, simpler, accurate and qualitative. The same standard of quality can be achieved in the product through the use of machines.
Machines give lot of work if not handled properly. Basically machines require regular and proper maintenance and at time servicing is also required. If this is done then machines will last for a longer durations.
Machines make the work of the workers easier and even with the help of the machines we get faster work done. The unit to be set up need the following machines for producing the wheel caps –
1) Cooling tower :- This machine helps to cool down the hot plastic wheel plate after grinding.
2) Injection moulding [horizontal] :- This machine moulds or in other words gives the hot plastic its desired shape based on the die used. This machine pushes the plastic from left and leaves the plastic to dense itself on the right hand side in the die.
3) Injection moulding [vertical] :- The only difference between the working of horizontal and vertical moulding machine is that one works on horizontal way and the other on vertical basis. Rest all the functions remains the same.
4) Injection moulding [manual] :- Manual moulding machine is operated fully by the labors whereas horizontal and vertical moulding machines are fully automatic.
5) Grinding machine :-
This machine gives the wheel caps its proper shape after moulding is done. As caps are automobile component, its all dimensions are of great importance to be checked.
6) Mixer drum :- Mixer drum heats and melts the plastic greneaules to turn them to liquid state. This liquid form of plastic is then further used to make wheel caps.
7) Sticker machine :- Sticker machine is used at the time of packing. Sticker here does not only refer to MRP sticker but also the batch no., serial no., etc.
8) Stamping machine :- Stamping machine refers to the machine which marks the brand name and the company name on the caps as they are manufactured.
9) Stripping:- Stripping machine refers to that machine which at last stripes the corrugated cartons on the basis of orders and dispatches.
M A N U F A C T U R I N G P R O C E S S
Raw material comes in the form of greneauls having round and rectangular shape and transparent or opaque color. Readily colored materials are also available.
Than put that ready colored greneauls in the hopper of the moulding machine. Than with the help of “screw barrel” [the gap between barrel and screw thread consist of the material], this material than passes, pushed by the machine pressure and heaters. Heaters are connected from outside of screw barrel into the mould of the article.
The mould is of two parts, “punch & cavity” [the gap between these two forms the article] both these parts are connected with the continous supply of chilled water from outer side which help mould to keep cool and give shape to the article from the hot material injected.
Water supply is cycled by, “cooling tower” which
absorbs the heat of the water and supplies the cold water. The scrap of the moulding is recycled and used again.
After the product is out of the machine, finishing work is done via small blade and than it is sent to the packing department.
P R O D U C T I O N C A P A C I T Y S C H E D U L E
Sr. No. Particular Amount 1. Owners Capital (50%) 75,00,000
2. Borrowed Capital (50%) 75,00,000
Total 1,50,00,000
I N T E R E S T O N C A P I T A L
Particular Loan Amount
Interest Rate
Interest Amount
Owner Capital 75,00,000 8% 6,00,000
Borrowed Capital 75,00,000 12% 9,00,000
Total 1,50,00,000 15,00,000
D E P R E C I A T I O N
Particular Value Rate of Depreciation
Depreciation
Building 20,25,000 10% 2,02,500
Machinery 20,40,000 15% 3,06,000
Furniture & fixtures 6,00,000 10% 60,000
Measuring instrument & gauge
90,000 15% 13,500
Other Fixed Asset 15,42,000 15% 2,31,300Computers 1,20,000 60% 72,000
Electrification 6,00,000 10% 60,000
Telephone 12,000 10% 1,200
Trolley & other equipments
8,30,000 10% 83,000
Total 10,29,500
A N N U A L C O S T O F P R O D U C T I O N
Sr. No. Particular Amount 1. Raw Material 4,14,93,1082. Salaries 20,50,8003. Other Expenses & utilities 53,17,4004. Interest on Capital 15,00,0005. Depreciation 10,29,500
Fixed Cost per unit = Total Fixed Cost No. of Units
= 51, 50,120 11, 23,000
= Rs. 4.58
VARIABLE COST
Sr. No. Particular Amount 1. Raw Material 4,14,93,108
2. Salary (50%) 10,25,400
3. Other Expenses (70%) 37,22,180
Total 4,62,40,688
Variable Cost per unit = Total Variable Cost No. of Units
= 4,62,40,688 11,23,000
= Rs. 41.17
TOTAL COST PER UNIT
= Fixed cost per unit + variable cost per unit
= 4.58 + 41.17
= 45.75
B R E A K E V E N A N A L Y S I S
Break-even point is that point of achieving, where total revenue and total expenses are equal. It is that point of zero profit. If sales exceed BEP,
the business will earn profit and if it decreases from BEP, the business will incur loss. Thus, BEP may take, as the minimum level of production and sales and company must attain in order to be economically viable.
Net Profit Ratio : NPR = Net Profit (EAT) ÷ Sales × 100 = 30,71,983 ÷ 5, 43, 90, 000 × 100 = 5.60%
P R O J E C T E D C O S T S H E E T
Particular Year 1 Year 2 Year 3
Raw Material Consumed Purchases Add: Direct Wages Utilities
4,14,93,1087,92,000
14,50,000
4,14,93,1087,92,000
14,50,000
4,14,93,1087,92,000
14,50,000
PRIME COST (A) 4,37,35,108 4,37,35,108 4,37,35,108
Add: Repairs Manager’s Salary Supervisor’s Salary Watchman’s Wage Fuel Dep. on Machine Dep. on Building
1,30,00084,00075,60020,400
2,97,0003,06,0002,02,500
1,30,00084,00075,60020,400
2,97,0002,60,1001,82,250
1,30,00084,00075,60020,400
2,97,0002,21,0851,64,025
TOTAL FACTORY OVERHEAD (B)
11,15,500 10,49,350 9,92,110
Administrative OverheadsAdd: General Mag. Salary
Personnel Mag. SalaryAccountant Salary
Finance Mag. Salary Clerk’s Salary Post & Tele. Exp. Telephone Exp. Misc. Exp. Insurance Exp. Medical Exp. Legal Exp. Audit Fees Dep. on Computer Dep. on other F. A. Int. on Own Capital
1,20,00075,600
2,64,0007560055,20020,400
1,20,00024,000
1,20,00060,00060,00060,00072,000
4,35,5006,00,000
1,20,00075,600
2,64,00075,60055,20020,400
1,20,00024,000
1,20,00060,00060,00060,00028,800
3,80,3856,00,000
1,20,00075,600
2,64,00075,60055,20020,400
1,20,00024,000
1,20,00060,00060,00060,00011,520
3,32,5166,00,000
TOTAL ADMINISTRATIVE
OVERHEAD (C)22,34,300 21,35,985 20,70,836
COST OF PRODUCTION
(A+B+C)4,70,84,908 4,69,20,443 4,67,98,054
Add: Op. Stock of Finished goods Less: Cl. Stock of Finished goods
Asset Year 1 Year 2 Year 3Land BuildingMachinery Furniture & FixtureElectric InstallationTelephoneComputer
Trolley & other equipments
DEBTORS
Cash in Hand Closing Stock
40,00,00018,22,50015,30,000
5,40,000
5,40,00010,80048,000
7,47,000
88,43,028
11,2255,45,060
40,00,00016,40,25013,00,500
4,86,000
4,86,0009,720
19,200
6,72,300
90,39,812
1,12,37010,86,315
40,00,00014,76,22511,05,425
4,37,400
4,37,4008,7487,680
6,05,070
93,70,380
8,64,4371,47,047
1,85,77,613 1,81,80,167 1,84,59,812
R I S K F A C T O R
Every new business needs to determine its risk factors that the business will face. If risk factors are carefully determined then the entrepreneur can take better measures to see that they have limited effect on the business following are some of the risks that the new business will face:-
The unit will operate in highly competitive market where already other wheel caps manufacturing units have gained important position.
The risk of failure of the position..It may take time to beat the competitor’s product.
Due to heavy advertising, it might prove to be expensive and might not give desired results.Initially, the production would be low but cost of production may be higher.The business would take a longer period to reach breakeven point.Initially, the required amount of sales will not be achievable and will result in loss.
Non-acceptance from the customer’s side.
N a m e & a d d r e s s o f r a w m a t e r i a l s u p p l i e r
J . K I n d u s t r i e s P v t . L t d .W e s t e r n h i g h w a y , G . I . D . CP u n e .
N A M E & A D D R E S S O F M A C H I N E R Y S U P P L I E R
M/S RIAT MACHINE TOOLS P.L. G.T. Road, Miller Gunj, Ludhiana – 141 003.
M/S SK MACHINES TOOLS National highway G.I.D.C
Gondal (Guj) India.
M/S J.K. MACHINE TOOLS Gokuldham Main Road, Rajkot.
M/S TURN-O-TECH ENGINEERS C/1/276, G.I.D.C., Phase II, Road – R, Baroda.
M/S RAVI Industries Udhyognagar, G.I.D.C., Delhi.
D I S C L O S U R E O F S I G N I F I C A N T A C C O U N T I N G P O L I C I E S
The accounting policies used in this report is Double Entry System and all the effect of income and expenditure is given according to Double Entry System.
The Depreciation is being calculated according to Reducing Balance Method. In this method, the depreciation changes according to the value of the asset remain in the last year. The asset is totally written off slowly and gradually.
C O N C L U S I O N
In the product project report on Torque Industries, I have discussed all financial data and other relevant information.
The market of Osim Industries is expanding its demand for the product day by day. The return in this business is also satisfactory.
At last, it can be said that, the future of this product is very bright.
With the expectation of high profitability and good market, it is assumed that it would be the perfect product to be manufactured in today’s environment.