Professional Documents
Culture Documents
(chilly powder)
PREPARED BY
BANSI M. PALAN
CLASS
T.Y.B.B.A.
ACADEMIC YEAR
2005-2006
ROLL NO.
20
SUBMITTED TO
SAURASHTRA UNIVERSITY, RAJKOT
GUIDED BY
Dr. SWATI DOSHI
Declaration
I, the undersigned Bansi M. Palan student of T.Y.B.B.A., hereby declare that the project work presented in this report is my own work & has been carried out under supervision of Dr. Swati Doshi. This project has not been previously submitted to any other university for my examination.
Acknowledgement
I am heartily thankful to everyone who have helped me. I am also thankful to Mr. Abhijit Vala for his guidance. Ltd. I am thankful to my parents. I am thankful to all managers and staff members of Balaji Wafers Pvt.
Preface
Practice makes man perfect, action makes man practical.
Above said proverb holds the importance of practice & action. The field of management provides practical as well as theoretical knowledge simultaneously. As a developing country, in Indian economy, contribution of small scale industries, as it is supportive to big industries & makes economy to reach heights of prosperity. The subject Entrepreneurship & Management of Small Business is included in T.Y.B.B.A. with a view to develop & implement the knowledge in action. It is essential for BBA students, who wants to become future entrepreneurs, to get practice from the inception.
Index
Particulars
Introduction Project at a Glance Partners Background Justification of Location Product Details Market Potential Raw Materials Machines Manufacturing Process Production Capacity Schedule Staff & Labour Details Financial Details Cost of Production Total Working Capital Requirement Total Project Fund Sources of Finance Depreciation Annual Cost of Production Sales Forecast Cost Per Unit BEP Analysis Cost of Capital Return on Investment Profitability & Profitability Analysis Risk Factors Name & Address of Raw Material Supplier Name & address of Machine Supplier Particulars of Raw Materials Consumed Particulars of Finished Goods Schedule for Fixed Assets Disclosure of Significant Accounting Policies Projected Operating Statement for Three Years Projected Trading A/C For First Year Projected P&L A/C For First Year Projected P&L Appropriation A/C For First Year
Page No.
Projected Capital A/C For First Year Projected Balance Sheet For First Year Projected Cost Sheet For First Year Projected Trading A/C For Second Year Projected P&L A/C For Second Year Projected P&L Appropriation A/C For Second Year Projected Capital A/C For Second Year Projected Balance Sheet For Second Year Projected Cost Sheet For Second Year Projected Trading A/C For Third Year Projected P&L A/C For Third Year Projected P&L Appropriation A/C For Third Year Projected Capital A/C For Third Year Projected Balance Sheet For Third Year Projected Cost Sheet For Third Year Future Plans Conclusion
Introduction
Small Scale industry is one of the greatest tool to develop country. Keeping this in mind, government is also active to develop small scale industry in the country so that big companies can also develop. And as increasing number of companies provides employment to many people through which standard of living also increases.
Project At A Glance
1 2 3 Name of the unit Form of the unit Name of Partners : Shri Ltd. : Partnership Firm : (i) Palan Bansi M. (ii) 4 5 6 7 8 9 Name of Product Size of Unit SSI Registration No. Cost of Project Means of Finance Implementation Schedule (i) (ii) (iii) (iv) Preparation Report Selection of site & : 1 Month : 2 Months : 15 Days : 8 Months Construction of Building SSI Registration Availability of finance, Selection of Machines, Procurement of Machines (v) Recruitment of Labour & Commencing Production TOTAL of : : : : : Chandarana Yash K. Shri Chilly Powder Small Scale Applied For. Rs.3837000 Ownership Capital
Partners Background
Partner 1
Name Address : Palan Bansi M. : Kamadgiri Apartment, 5th Floor, 501, Near K. K. V. Hall, Kalawad Road, Type of unit Products SSI registration Subsidy no. Rajkot 360 005. : 20 years : BBA with Advanced Management. : Management of
Marketing &
Marketing
Partner 2
Name Address : Chandarana Yask K. : Mile Stone, Opposite to Bank of Karnatak, Kalawad Road, Age Qualification Role in Unit Financial Contribution Rajkot. : 26 years : MBA with Finance Management. : Management of Finance & Production Department. : 50%
Justification Of Location
Location reveals the area where the plant will operate to manufacture proposed goods & articles. Every entrepreneur, before starting unit must give due attention to the suitable location of business. One should locate the unit at the place where infrastructural & other facilities are available. We are going to launch our unit at Shapar. The following facilities are available there cheaply & adequately.
Raw Material: The basic component for manufacturing firm is raw material. As in our case raw material comes from outside the city that is Gondal. So, it is convenient to locate the firm at Shapar so that raw material is available cheaply & easily.
Transportation: Here transportation facilities are available cheaply & easily so that there is convenience in getting raw material from outside to the production place & also from production place to the other area to sell.
Labour: The area in which our firm will be located is an industrial area, so that labour is adequately available.
Water & Power Supply: There no such problem of power cuts or shortage of water in this place.
Product Details
Product: The product that our firm is going to manufacture is, Chilly Powder.
Its Use: Chilly Powder is used as one of the main spices in most of the food items. It is used as a flavouring stuff for making the food item spicy.
Market Potential
In earlier years people used to have simple and pure food, but now is the era of fast food. Peoples Food habits have totally changed. People love to have delicious Punjabi Dish, Chinese, Thai, Mexican & Italian Food. People are more attracted towards hot & spicy food items. Chilly Powder is the main ingredient to make the dish hot & spicy. Even in our routine food preparations, chilly powder is used as one of the spices. Thus, right from simple food items to variety of food items chilly powder is used as the main spice. Moreover, chilly powder is used indirectly also, like, people consume tomato ketchup which has chilly powder in it. In various other preparations also it is used indirectly. Thus, when people use these items in any dish the use of chilly powder is indirect. Thus, chilly powder is widely used in food & food products. Moreover, earlier, people used to make chilly powder on their own. People used to buy dry red chilies and grind them on their own or in any flour mill. But now is the age of readymade. The lifestyle of people has changed. Everyone is busy in one or the other way so they do not have much time to do all these work ultimately they prefer readymade items. So also this product has great potential. Through our pure & best quality product at low price we will be able to sell it in market & also we will be able to create demand for our product.
Raw Materials
1. 2. Dry Red Chillies. Edible Oil.
Machines
1. 2. 3. 4. 5. 6. Pulverizer Machine Electronic Weighing Machine Filling Machine Plastic Bag Sealing Machine Electric HP Motors Mixing Tank with Agitator
Manufacturing Process
The word Process leads to series of steps. Product is not outcome of only one act but it has to pass through various stages to become final outcome. Following are the steps included in manufacturing :
(1)
Cleaning: Chilly is purchased in bulk, from outside area, so it needs cleaning. First of all, the chilly is to be cleaned and all the dust & dirt is to be removed.
(2)
Removing stalks and seeds: Before crushing the chilly into powder, stalks and also the seeds from inside are to be removed.
(3)
Pulverization: Next step is of Pulverization. Chillies are smashed into fine powder through special machines called Pulverizer.
(4)
Mixing Oil to it: Finally, the chilly powder has to be mixed with oil so that it does not spoil for longer time.
Flow Chart
Chilly Powder Manufacturing Process
Cleaning
Pulverizing
Mixing Oil
(2)
Utilized Capacity: 60% i.e. 15 kg. Per hour. Yearly Utilized capacity is 15 2400 hrs. = 36000 kg.
(3)
(4)
(5)
(6)
(7)
(8)
Sr. No.
1 2 3 4 5 6 7
Particulars
Supervisor Accountant Computer Operator & Clerk Unskilled Worker Salesman Peon Watchman TOTAL
No. of Person
1 1 1 4 3 1 1 12
Rate
6000 4000 5000 2500 3000 2000 2000
Amt. (p.a.)
72000 48000 60000 120000 108000 24000 24000 456000
Financial Details
Sr. No. (1) a. b. c. Particulars Fixed Assets Land Building Plant & Machinery (i) Pulverizer (ii) Electronic Machine (iii) Filling Machine (iv) Sealing Machine (v) HP Motors (vi) Mixing (2) d. e. f. g. (3) (4) Tank with Agitators Other Assets Furniture Computer Delivery Van Other Equipments Electrification & Installation Charges Preliminary & Pre1 1 30000 200000 70000 150000 30000 200000 70000 90000 1 35000 35000 Weighing 1 1 1 2 10000 36000 10000 12000 10000 36000 10000 24000 2 35000 70000 700 sq. mt. 600 sq. mt. 600 400 420000 240000 Rate Total Cost (Rs.)
operating Expenses
80000
Cost Of Production
(a) Raw Material Requirement: No. Particulars Rate per kg. Requirement per Day Requirement per Month Requirement per Year
Quantity Amount Quantity 1 2 Chilly Edible Oil 40 30 (k.g) 133 6 5320 180
Particulars
Supervisor Accountant Computer Operator Cum Clerk Unskilled Worker Salesman Peon Watchman TOTAL
No. of Person
1 1 1 4 3 1 1 12
Rate
6000 4000 5000 2500 3000 2000 2000
Amt. (p.a.)
72000 48000 60000 120000 108000 24000 24000 456000
Sr. No. 1 2 3 4 5 6 7 8 9 10 11
Particulars Selling Expenses Repair & Maintenance Electricity Water Charges Postage & Stationary Legal Fees Audit Fees Miscellaneous Expenses Insurance Preliminary Expenses W/F Electrification & Installation Charges W/F TOTAL
Amt. (Per Annum) 60000 24000 180000 24000 18000 36000 18000 18000 24000 12000 18000 432000
Particulars Raw Material Staff & Labour Other Expenses & Utilities TOTAL
Sources Of Finance
Sr. No. 1
Depreciation
Particulars Building Furniture & Fixture Plant & Machinery Computers Delivery Van Other Equipments
Rate of Depreciation 10% 15% 25% 40% 15% 15% TOTAL DEPRECIATION
Particulars Raw Material Total Recurring Expenses Depreciation Interest on Capital TOTAL
Sales Forecast
Year 1 2 3 4 5
Units (in kg.) (p. a.) 37800 44100 50400 56700 63000
79.21
27.33
43.76
(b)
1033250 41.24
25054.56
(c)
100
100
2141450.78 Rs.
(d)
100
100
48.25%
(e)
BEP = = =
39.77%
Return On Investment
ROI
= = =
100
525750 3837000
100
13.70%
Sales - Variable Cost Contribution - Fixed Cost EBIT - Interest EBT - Tax ( 35%) EAT
100
100
37.69%
100
100
6.81%
2.31%
Cost Of Capital
Capital 2161500 2161500 4323000 Rate 8% 8% 16% Interest 172920 172920 345840
100
345840 4323000
100
8%
8%
Risk Factors
1. Changes in Government policies for this type of industries may affect the organization positively or negatively accordingly, as profit may increase or decrease due to Governments intervention.
2.
There is always risk of competition from existing & potential units. But to avoid this risk, cost reduction through ideal utilization of resources, use of good quality of raw material etc. will be helpful.
(1)
(2)
(1)
(2)
(3)
(4)
Particulars Opening Bal. + Purchase Chilly Oil TOTAL - Closing Stock Chilly Raw Material Consumed Chilly Oil TOTAL
Year 1 Qty. (in Amt. kg) 42000 1800 43800 2000 1680000 54000 1734000 80000
Year 2 Qty. (in Amt. kg) 2000 80000 46667 2100 48767 2000 2053348 69300 2122648 88000
Year 3 Qty. (in Amt. kg) 2000 88000 53333 2400 55733 2000 2559984 86400 2646384 96000
The year
1 2 3 4 5 6 7
Land 420000 420000 Building 240000 240000 Plant & 185000 185000 Machinery Computer 30000 30000 Furniture 150000 150000 Delivery 200000 200000 Van Other 70000 70000 Equipment TOTAL 1295000 1295000
420000 24000 24000 216000 46250 46250 138750 12000 12000 18000 22500 22500 127500 30000 30000 170000 10500 10500 59500
Deferred Revenue Expenses: Preliminary Expenses are written off at 15% every year. Electrification & Installation charges are written off at 20% every year.
Projected Profit & Loss a/c. Of Shri Ltd. For 1st Year
Particulars To Salary to Supervisor Accountant Computer Operator cum Clerk Salesman Peon Watchman To Pre. Exp. W/F To Ele. & Ins. Exp. W/F To Depreciation Building 24000 P&M 46250 Computer 12000 Furniture 22500 Delivery Van 30000 Other Equip. 10500 To Selling Exp. To Postage & Stationary To Tax paid To Legal Fees To Audit Fees To Mis. Exp. To Insurance To Net Profit (Trans. To P & L App.) Rs. Particulars By Gross Profit Rs. 1211000 72000 48000 (Trans. From Trading A/c.) 60000 108000 24000 24000 12000 18000
145250 60000 18000 76577 36000 18000 18000 24000 449173 1211000 1211000
Projected Profit & Loss Appropriation A/C. Of Shri Ltd. For 1st Year
Particulars To interest on Capital Bansi 153480 Yash 153480 To Net Divisible Profit Bansi 71106.5 Yash 71106.5 Rs. Particulars Rs. By Net Profit 449173 (Trans. From P & L A/c.)
306960
3979213
3979213
Sr. N o . 1
Particulars
Rs.
Rs.
2 3
Direct Material Cost Opening Stock + Purchase of Raw Material - Closing Stock (A) Cost of Raw Material Consumed Other Direct Expenses Dep. on Equipments, P & M etc. (B) PRIME COST Factory Overhead Water Charges Electricity Charges Repair & Maintenance of Machines Insurance of Factory Electrification of Inst. Exp. Salary to Factory Supervisor Preliminary Expenses Salary to Watchman Wages to Unskilled Worker (C) FACTORY COST Office & Administrative Overhead Salary to Accountant Salary to Computer Operator Salary to Peon Postage & Stationary Legal Fees Audit Fees Interest on Capital Miscellaneous Expenses (D) COST OF PRODUCTION GOODS MANUFACTURED Selling & Distribution Overhead Selling Expenses Taxes paid Salary to Salesman Dep. on Delivery Van TOTAL COST PROFIT SALES
1734000 80000 1654000 115250 24000 180000 24000 24000 18000 72000 12000 24000 120000 48000 60000 24000 18000 36000 18000 306960 18000 OF 115250 1769250
498000 2267250
528960 2796210
Projected Profit & Loss A/C. Of Shri Ltd. For 2nd Year.
Particulars
To Salary to Supervisor Watchman Accountant Computer Operator cum Clerk Salesman Peon To Depreciation Building 24000 P&M 46250 Computer 12000 Furniture 22500 Delivery Van 30000 Other Equip. 10500 To Pre. Exp. W/F To Ele. & Ins. Charges W/F To Taxes paid To Selling Expenses To Postage & Stationary To Audit Fees To Mis. Exp. To Insurance To Legal Fees To Net Profit (Trans. To P & L App.)
Rs.
Particulars
Rs.
79200 By Gross Profit 1471552 26400 (Trans. From Trading A/c.) 52800 66000 118800 26400
145250 12000 18000 150760 66000 19800 19800 19800 24000 39600 586942 1471552 1471552
Projected Profit & Loss Appropriation A/C. Of Shri Ltd. For 2nd Year
Particulars
To interest on Capital Bansi 153480 Yash 153480 306960
Rs.
Particulars
Rs.
279982
586942
586942
4259195
4259195
Rs.
80000 2122648 88000 115250 26400 198000 26400 24000 18000 79200 12000 26400 132000 52800 66000 26400 19800 39600 306960 19800 19800
Rs.
2 3
542400 2772298
551160 3323458
365560
Projected Profit & Loss A/C. Of Shri Ltd. For 3rd Year
Particulars
To Salary to Supervisor Watchman Accountant Computer Operator cum Clerk Salesman Peon To Depreciation Building 24000 P&M 46250 Computer 12000 Furniture 22500 Delivery Van 30000 Other Equip. 10500 To Pre. Exp. W/F To Ele. & Ins. Charges W/F To Selling Expenses To Tax paid To Postage & Stationary To Audit Fees To Mis. Exp. To Insurance To Legal Fees To Net Profit (Trans. To P & L App.)
Rs.
Particulars
Rs.
87120 By Gross Profit 1980536 29040 (Trans. From Trading A/c.) 58080 72600 130680 29040
145250 12000 18000 72600 310193 21780 21780 21780 24000 43560 883033 1980536 1980536
Projected Profit & Loss Appropriation A/C. Of Shri Ltd. For 3rd Year
Particulars
To interest on Capital Bansi Yash 153480 153480
Rs.
Particulars
Rs.
Rs.
88000 2646384 96000 115250 29040 217800 29040 24000 18000 87120 12000 29040 145200 58080 72600 29040 21780 43560 306960 21780 21780
Rs.
2 3
591240 3344874
575580 3920454
543473
Bansi
Yash
Capital
Particulars
Bansi
Yash
Particulars By
Bansi
Yash
To c/d
b/d Balance 2129597.5 2129597.5 By Net Profit 139991 2129597.5 2129597.5 2129597.5
Particular s
Bansi Yash
Particulars
By Balance b/d By Net Profit
Bansi
Yash
To Balance c/d