Feasibility Study of Ice Cream Business in Gujrat

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A Feasibility Report on Ice Cream
Chapter-1
INTRODUCTIO
N
K. S. School of Business Management 1

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What is Feasibility Study?

A feasibility study is a process designed to determine the difficulty in
carrying out a designated task. Generally, a feasibility study precedes
technical development and project implementation. In other words, a
feasibility study is an evaluation or analysis of the potential impact of a
proposed project. Five factors to be taken care off in feasibility report:
Technology and system feasibility

Technological feasibility is carried out basically to determine whether the
company has the capability in terms of software, hardware, personnel and
expertise to handle the completion of the project.
Economic feasibility
Economic analysis is the most frequently used method for evaluating the
effectiveness of a new system. More commonly known as cost/benefit
analysis, the procedure is to determine the benefits and savings that are
expected from a system and compare them with costs. If benefits outweigh
costs, then the decision is made to design and implement the system.
Legal feasibility
Determines whether the proposed system conflicts with legal requirements
e.g. data processing system must comply with the local data protection acts.
Operational feasibility
Is a measure of how well a proposed system solves the problem, and takes
advantages of the opportunities identified during the scope of definition and

how it satisfies the requirements identified in the analysis phase of system

requirement.
Market feasibility
Market feasibility study typically involves testing geographic locations for
developing any project, and developers often conduct market studies to
determine the best location within a jurisdiction. It takes into account the
importance of the business in the selected area.
Resource feasibility
This involves questions such as how much time is available to build the new
system, when it can built, type and amount of resources required,
dependencies, etc. Contingency and mitigation plans also are stated here.
Cultural feasibility
In this stage, the project‟s alternatives are evaluated for their impact on the
local and general culture. For example, environmental factors need to be
considered and these factors are to be well known. Further an enterprise‟s
own culture can clash with the results of the project.


Steps of Feasibility Report

As a part of our feasibility study we conducted the following steps:-
 We visited various ice-cream manufacturers:
 Vadilal, Gandhinagar.
 Havmor, Ahmedabad.
 Janta icecream,Ahmedabad.
 We did a market survey of 200 consumers & 3 dealers.

Selection of Project
Each and every individual firm, industry and nation wants to be ahead.
Adequate and amiable labour force, proper transportation and other
infrastructural facilities help the business unit to bloom.
Project report on the feasibility on ice-cream was allotted by the college

authority as a part of practical study curriculum to group “J”. We did market
research about the ice-cream in the various areas of Ahmedabad for getting in
depth knowledge and to get the clear ideas of activity relating to project. We
visited the production unit Vadilal ice-cream plant situated in Gandhinagar.
The population growth, urbanization, income growth, high income elasticity

of demand and changes in food habits that fueled the increase in ice-cream
consumption are expected to continue well into the new millennium.

Project at a glance
Name of the firm : T-20 Icecream
Address : Pavilion Parlour,
Near Keshavbagh Soc.,
Premchandnagar char rasta,
Judges Bunglow Road,
Bodakdev,
Ahemdabad.
Registered Office : No
Constitution : Partnership Firm
Status of industry : Manufacturing
Total cost of project: 15140011RS.
Logo:
Tag line : RUN…SPIN…GET BOWLED…!!!

Chapter-2
HISTOR
Y


HISTORY OF ICE-CREAM
Once upon a time hundreds of years ago, Charles one of England
hosted a sumptuous state banquet for many of his friends and family. The
meal, consisting of many delicious of the day, had been simply superb, but
the “cup-de-grace” was yet to come. After much preparations king‟s French
chef had concocted with closed and resembled fresh fallen show but was
much creamier and sweeter than any other after dinner decent. The king
rewarded his chief for chief for his recipe to keep this secret of making such
ice-cream. But that chef could not keep that secret of making such ice-cream
but that chef could not keep that secret for long and it was spread out and ice-
cream was born. In 1983, cookies and cream made with real Oreo cookies
became an instant hit climbing to no five on the list of selling ice-cream
flavours. It also holds the distinction of being the fastest growing new
flavours in the history of the ice-cream industry.
In 1991, another flavour phenomenon was created chocolate chips

cookie dough ice-cream, which combines the best part of the chocolate chip
cookie.
This ice-cream becomes very popular in our world. The consumption

market of ice-cream is growing day to day. The first commercial ice-cream
plant was established in Baltimore in 1851 by Jacob Fuss Ell.
The first ice-cream cone was made on September 22, 1896. He was
granted a patent for his special mold in December 1903. In 1904 the waffle
ice-cream cone was introduced at the St. Louis world‟s fair when a waffle
concessionaire started rolling waffle into the shape of a cone for the benefit
of ice-cream vender who occupied on adjoining both.

The first frozen dessert is credited to Emperor Nero of Rome. It was a

mixture of show and nectar, fruit pulp and honey.
During the stuffy Victorian period, drinking soda water was considered
improver so on towns banned its sale on Sundays. An enterprising druggist in
Evanston, Illinois, reportedly concocted a legal Sunday alternative containing
ice-cream and syrup but no soda. To show respect for the Sabbath he later
changed the spelling to “sundae”.
The first ice-cream parlor in America opened in Newyork city in 1776.
HISTORY OF ICE-CREAM INDUSTRY

Though India has a low per capita Ice-cream consumption of 300 ml
per annum the trend is slowly changing due to a number of reasons.
In 2007, the global market of ice-cream was pegged of $61.6 billion in

terms of volume of 15 billion liters in terms if volume of this, the Asian-
Pacific ice-cream market was worth $13 billion in terms of retail value and
5128 million liters in terms of volume coming to India, the Indian ice-cream
industry is currently estimation to be worth Rs. 2000crores, growing at a rate
of approximately 12% Rs. CGM of Gujarat co-operative milk marketing the
makers of Amul explains “ the ice-cream market in India can be divided into
the branded market and grey market. The branded market at present is 100
million liters per annum valued at Rs. 800 crores. The grey market consists of
small local players and cottage industry players. In 2008-09, in the branded
ice-cream market, Amul held the no.1 spot, with a market share of 38%,
followed by quality walls at1%, Vadilal at 12% and mother dairy at 8%.
Despite a decent growth rate, the ice-cream industry faces challenges of low
per capita income.

CHAPTER-3
LEGAL
FEASIBILITY

Legal Documents
Legal document includes the following:-
 Partnership deed
 Sanction letter of loan
 License
 Labour registration certificate
 Small scale industry license
 Income tax registration number
 No objection certificate from:
 Engineers
 Chief of fire departments

Partnership Deed
Partnership is an association of two or more people who come together for
achieving some common goals. A written document which binds them and
gives a legal enforcement right is called a partnership deed. In this deed 5 are
active partners and 6 are sleeping partners. Our partnership deed is as
follows:
In all we are 11 partners. A partner may be admitted or may retire with the
mutual consent of all other partners.
Date:
“This deed of partnership executed on 1st APRIL,2012.”
Name and address of all the partners are as follows:
1) Priyanka Parmar
A/404, Pratyaksha Appts,
Nava Vadaj,
Ahemdabad-380013
Ph.(R)079-27642030
2) Hetal Parmar
B.O.Qtrs 9/33,
D.C.C. Colony,
Digvijaygram, Sikka,
Jamnagar-361140
Ph.(M)9033485654

3) Gedia Nimisha S.
69/sector-1,
Nirnaynagar,
Ahemdabad
Ph.(M)8866839893
4) Payal K Gamit
C-1/8, Jail staff Quarters,
Sabarmati Central Jail,
Ahemdabad.
Ph.(M)9978179638
5) Bharat Pirabhai Nai

Ratanpura (Bhildi),Deesa,
Banaskantha.
Ph.(M)7383536451
6) Varun Vinodchandra Parmar

43- Sarthi bunglows,
Opp. Gokuldham soc.,
Chandkheda,
Ahemdabad-382424
Ph.(M)9408133550
7) Dhara Sureshkumar Prajapati

911-Golwad Lunsawad,
Dariyapur,
Ahemdabad-380001
Ph.(M)8905852373

8) Vaidehi Sunilbhai Raval

1868/1 Padi Pole Mandavi‟s Pole
Manek Chawk,
Ahemdabad.
Ph.(M)8000298043
9) Khushboo Shirishbhai Shah

14/8, Virvijay soc.,
Naranpura,
Ahemdabad-380013
Ph.9724482107
10) Nirali V Jalu

Krishna Park Soc.,
Airport road,
Keshod,
Junagadh-362220
Ph.8460430274
11) Aakash Ashokkumar Shah

2B, Shantiniketan-1,
13, Geetabaug Soc.,
Opp. Suvidha Shopping centre,
Paldi,
Ahemdabad-380007
Ph.(M)9429365855

 Preamble:
“If the deed is retrospective”
“We are as the aforesaid party have come together to carry on business
of ice-cream, as from and the terms and conditions of the partnership
as agreed to are hereby in writing.
 Date Of Commencement: 1st April,2012
 Business of Partnership:
The partnership will carry on the business of ice-cream and such other
business or businesses as the parties may from time to time determine.
 Name:
The name of partnership firm shall be Pavilion Parlour and other
name or names as the parties may from time to time determine.
 Place Of Business:
Whereas the parties here to have mutually agreed to carry on the
business of “manufacturing, processing, preservation and distribution
of all kind of ice-cream in any for” at Judges bunglow road Bodakdev
and such other name or names as the parties from time to time
determine.
 Duration:
The partnership shall be a partnership at will.
 Capital:
The capital of the firm for the time being is fixed at Rs.1,51,40,011.
The partners of the firm bring amount equivalent to Rs10,00,000

each and other contributions as the parties may from time to time
determine.
 Sharing Of Profits And Losses:

All the partners of the firm will receive or bear the profits and
losses of the firm for the full and final settlement of the claim in the
profit of the firm and such ratio of contribution as the partners may
time to time determines. Current ratio is equal between all the
partners.
 Interest to partners:
All the partners are working and may be allowed interest on capital
at maximum rate of 12% per annum and salary as maximum
permissible under sec40(b) of the Income Tax Act.
 Appointment of Employee:
No clerk or servant shall be employed or dismissed without the
consent of all the partners.
 Authority of partners:
 The authority of the partners individually shall be limited to
the following:
(a) No partner shall individually purchase goods for
partnership without consulting the other and obtaining his
consent for purchase of the value exceeding Rs.
(b) No partners shall singly bind the partnership by taking
any loan or raising any money whether with or without
security to the extent of more than Rs.

 Admission of Partner:
The partnership shall be deemed to be continuing on the admission
of a fresh partner or partners, provided the admission is on the
terms herein laid down and is approved by all the partners.
 Dissolution:
Every partnership shall be entitled to dissolve the partnership in the
event of the other commiting breach of the conditions herein
covenanted. The partnership may be dissolved by a notice in
writing sent by registered post to the address herein given or suchas
may be registers from time to time with the registrar of firms. On
the dissolution of firm under the clause the expelled partners shall
not be liable for any loss incurred as from the date of dissolution.
But no profit or loss shall be paid or become payable except at the
time of annual accounting.
 Dispute between partners:

If at any time any dispute, doubt question shall arise between the
partners, or their representatives either on the construction of these
presents or respecting the accounts, transaction, profit or losses of the
business or otherwise in relation to the partnership then every such
dispute of the par, doubt or question shall be referred to arbitrators
choose by each partners and the representatives of the umpire to be
appointed in the mode and consequence thereof conform to be
provisions in that behalf contained and Conciliation Act, 1996 or any
statutory modification thereof.

To,
Pavilion Parlour,
Near Keshavbagh Soc.,
Judges Bunglow Road,
Bodakdev,
Ahemdabad.
Dear sir / madam,

Sub: offer letter for mortgage loan application no 1132 Branch code:
Ahmedabad
Thank you for choosing BANK OF BARODA. We are pleased to

inform you that with reference to the above application, we have in principle
sanctioned you a loan , the details of which are given below.
Type of loan: Mortgage loan

Loan amount sanctioned: 4116000
Term of loan: 60 months (5 years)
Interest rate type: variable
Mortgage loan reference rate: 14%
Number of equated monthly installments (Emi): 60
Amount of each Emi: 116620
Security: 25, judges bungalow, Ahmedabad 380006

Fees on part pre-payment : 25% there off in any financial year.
Fees on full & final pre-payment: Nil
We confirm the above terms and conditions and accept the loan approval.
(Mr. H. A. Panchal )
Branch Manager

EVALUATION OF PROJECT
BUSINESS ENVIRONMENT ANALYSIS
Since 1961 the industry has grown rapidly and tremendously. Research
has shown that ice-cream products are stable in the environment. During use
when they are properly disposed off ice-cream are rapidly handled by
municipal west handling process length or incineration.
Managers always have to perform their function in the organization.

The system approaches of managing suggest that an organization being a sun
system of boarders, societal system has to work within the framework
provided by the society and in the various constituents. These constituents are
combined to constitute environment for the given organization. Environment
includes all the conditions, circumstances and influence surrounding the total
organization or any of its part. Environment can be defined as “environment
consist of atoms and molecules, agglomeration of things in motion, alive of
man and emotions of physical and social law, social ideas, norms of actions
of force and resistance. There number is infinitive, they are always present
and they are always changing.”
There are many forces in environment which influents the working of

the organization. These forces may be classified as economy, legal, political,
technological, culture etc. These forces have an important effect in
determining the resources available for the inputs and the most appropriate
organizational output. The organizational environment can be broadly
classified into followings categories:-

EXTERNAL ENVIRONMENT
External environment consists of those factors which lie outside the
organization. This may be economical, geographical, technical, political, etc.
change in the organization social value and many changes in the economy,
changes in the recourses availability and change in the market place and so
on. Which of this external factor will have particular significance for a
specific organization depends on circumstances surrounding that business.
As then ice-cream is an industrial product, we can relate the various
environment factors in the following ways:

PEST ANALYSIS
POLITICAL ENVIRONMENT:-
Frequent changes in the central and the state government leads to
changes in the industrial policies. The environment compose of regulation,
government spending and patent protection even personal thinking of
particular political leader may affect adversely or favourable to this service
industry.
ECONOMICAL ENVIRONMENT:-
As far as economic aspect is concerned the entrepreneur of the ice-
cream industry has to fight the tough competition. However, there are all
together two kinds of sectors i.e. organized sector and unorganized sector.
The companies like Vadilal, Amul etc. can be included in the organized
sector and the local companies like janta, patel etc are included into
unorganized sector.
If we further clarify then, the company can enjoy the new market, as well as
the replacement market also.
SOCIAL FACTORS:-
Our ice-cream product is made up of hygiene raw materials which will
not effect society in any bad manner. Our wastages are re-used to make new
ice-cream.
TECHNICAL ENVIRONMENT:-
One of the most important forces shaping people‟s lives is technology.
The latest technology can excel their growth. Every new technology is a force
for “creative destruction”. Moreover, the innovating process always leads to

the increase in the investment. Technological inventories are introduced for

higher productivity, lower cost and more revenues. Technology refers to sum
total of knowledge providing ways to do things. Organization should give
constant consideration of the manner in which innovation may affect their
product and also to their internal operation efficiency.
In past days every process is done manually but now-a-days it is done
automatically.

SWOT ANALYSIS
STRENGTH OPPORTUNITY
1 .Quality 1. Growing ice-cream industry
2. Knowledge 2. Changes in the consumer taste and
3. Pricing preference
4. Packaging
WEAKNESS THREAT
1. Low advertising budget 1. Availability of substitute goods
2. Manufacturing process is not 2. Health conscious and awareness
completely automatic 3. Hygiene problem

CHAPTER-4
TECHNICAL
FEASIBILITY

What is technical feasibility?
It is a flow chart of concern‟s proposed products and service and move

through your business to physically reach your market.
The assessment of technical feasibility is based on an outline design of

product requirement in terms of input , process, fields, programmers and
procedures and this can be quantified in order to estimate whether the new
product will perform adequately or not.
(A) Machines
(B) Plant Layout
(C) Location Analysis
(D) Raw Material
(E) Supplier
(F)Manufacturing process

A. Machines:
Milk Boiler Machine
Price Rs. 150000

Capacity 500 ltrs
Durability 10 years
Dimensions 4‟ x 5‟

Flavour milk tank
Price Rs. 15000

Capacity 500 ltrs
Durability 10 years

Synergy‟s Continuous freezer
Price Rs. 350000

Capacity 500 kg
Durability 10 years

Mixer machine
Price Rs. 350000

Capacity 500 kg
Durability 10 years

Continuous freezer
Price Rs. 350000

Capacity 500 kg
Durability 10 years

Hardener
Price Rs. 800000

Capacity 500 kg
Durability 10 years

(B) Plant Layout:

(C) Location analysis:
Our location:
Pavilion Parlour
Near Keshav Bagh Society,
Judges Bunglow road,
Bodakdev,
Ahmedabad.
Key factor for any firm is setting up an industry and designing its convenient
location of the unit should be such that it give the maximum benefit for the
life time
So to locate business unit after the deep study to facilitate acquisition of best
raw material, cheap labour and basic amenities at the minimum cost.
Criteria for selection of location:
1. Near to target customers

2. Utility and facilities:
Electricity: connection from torrent power
Water: water supply from AMC
3. Competition : least competition faced near our location
We have selected this location as it is very near to S.G Highway and is tight
spot of our target audience. As well as it is situated nearby a residential area
which would be beneficial to us.There is easy connectivity and affordability
in terms of rent, electricity and other amenities.

(D) Raw materials:
NAME QUANTITY PRICE
Milk 1 ltr Rs.25
American almond 1 kg Rs. 400
Walnuts 1 kg Rs. 700
Raisin 1 kg Rs. 250
Cashew nuts 1 kg Rs. 640
Sugar 1 kg Rs. 32
Glucose 1Kg Rs.175
Skimmed milk powder 1Kg Rs.220
Cocoa powder 100gm Rs. 80
Essence 10 ml Rs.150
Chocolate slab 1Kg Rs.150
Cream 1Kg Rs.180

(E) Suppliers:
1. Machines
Airtemp refrigeration services .
4, Kotadiya estate,
Opp, Raj rani beda works ,
Nr, Corporation garden ,
Ambica nagar odhav ,
Gidc, Ahmedabad.
(079)22977999
2. Raw materials:
Gujrat general foodchem Pvt.Ltd.
427,Arun chambers,
Choka bazaar,
Kalupur,
Ahmedabad
(079)-22130225
(079)-22136595

(F) Manufacturing Process:
Scoop
Milk Synergy 's
Flavour Mixer Continous making
boiler continous Hardner
milk Tank machine freezer and
machine freezer
cutting
Process starts as soon as milk and other ingredients are made available.
Step 1: Mix making:- Mix making begins with taking of milk and cream in
stainless steel pasteurizer. Other different key ingredients like SMP( skimmed
milk powder), sugar, stabilizer-emulsifiers are added for proper mixing and
quick dispersion at different temperatures.
Step 2: Flavouring:- the flavour tank are series of stainless steel tanks of
500ltrs capacity. Here the mix is transformed from unflavoured to
euphorically flavoured.
Step 3: Once the proper amount of flavouring is added, the mix is pumped to
freezer.(-40‟ C is freezing temperature for smooth icecream)

Step 4: Mixer:- we are keenly interested in coming upwith new chunky

things to feed in the mixer from loads of chocolate to dry fruits.
Step 5: Hardening tunnel:- Before the packed icecream can be stored or

transported, it needs to be frozen further- from a semi finished frozen state at
22‟C to a fully frozen solid state of at least -25‟C in the cold room. The
process is called hardening and it happens in the the hardener.
Step 6: Scoop making and Cutting slots for family pack:- This is done
manually by workers using scoop equipments and knifes.

CHAPTER-5
HUMAN
RESOURCE
FEASIBILITY
MANPOWER PLANNING
Man power planning is indispensable for an organization to perform the
activities efficiently as well as in a way that produces desired results.
Capital strategy and research development do not always work and when they
do not work what we can fall back on is our human power ,human resource
and human talents that the company is having for any industry organization
like machine ,man power is also the consider one of the most important
aspect which play a vital role for its overall growth and development and
hence our organization is also based on the same concept or principle.
We would definitely create the feelings of oneness into the employees

towards the organization through various training program.Thus we would
consider and implementing.The concept,people are primer source of
competitive advantage.We are medium scale organization.We are having a
great organization structure.

ORGANIZATIONAL STRUCTURE
Partner
s
Manager
Productio Marketing Finance

n Dept. Dept. Dept.
Sales Accountan
Executive t
Technicia Supervisor
n
Shop
Skilled Unskilled
Executive
Workers Workers
Sweepers Peon

JOB ANALYSIS
JOB DESCRIPTION
Job description is a broad, general, and written statement of a specific job,
based on the findings of a job analysis. It generally includes duties, purpose,
responsibilities, scope, and working conditions of a job along with the job's
title, and the name or designation of the person to whom the employee
reports. Job description usually forms the basis of job specification.
A job description may include relationships with other people in the

organization: Supervisory level, managerial requirements, and relationships
with other colleagues.
JOB SPECIFICATION
A statement of employee‟s characteristics and qualification required for
satisfactory performance of defined duties and tasks comprising a specific job
or function. Job specification is derived from the job analyses.
MANAGER
Job Description
Job title: Manager
Reports to: Partners
Supervises: All department
Functions:
 Co-ordinate with different department workers, setting up targets and
corrective actions to achieve them.
 Handling emergency affairs.
 Approve organizational change and approving policies.

Duties:
 Check the accomplishment of various targets.
 Implementing policies.
 Any organizational failures or inability to convert plan into action.
Job Specification:
Education: MBA
Experience: minimum 5 years in similar role
Physical health: Smart and energetic
SUPERVISOR
Job Description
Job title: Supervisor
Reports to: manager
Supervisor: Skilled worker and unskilled worker
Functions:
 Try to apply innovative method.
 To keep a record of raw material required and give order to the
department.
 To give instruction to the worker and to the workers and to see whether
they are working properly or not.
Duties:
 To create a good loyalty for the product in the market.
 To guide workers and train them on the work.
 To report the technician about the work.

Job Specification:
Education: B.sc
Experience: minimum 3 years
Mental ability: To have knowledge in the Field of production. He should be
good at interpersonal communication.
ACCOUNTANT
Job Description
Job title: accountant
Reports to: manager
Functions:
 To maintain all the records and files of the day to day requirements.
 To prepare the salary structure.
Duties:
 Responsible to submit all the accounting records and report to the
manager.
 Responsible to any mistake committed in making the salaries of
employees.
Job Specification:
Education: M.com having good knowledge of account.
Mental ability: Should be hardworking and capable of understanding the
numerical data easily.

SALES EXECUTIVE
Job Description
Job title: Sales executive
Reports to: manager
Functions:
 To make strategies for the market.
 To decide various promotion schemes.
 To decide advertising budget.
Duties:
 Keep records of past sales volume and customers.
 To maintain good relation with dealers.
 He decides the price by analyzing the market competitors.
Job Specification:
Education : Graduate in sales or marketing
Mental ability: energetic, good communication skill and good decision
making
SKILLED WORKERS
Job Description
Job title: Skilled Workers
Reports to: supervisor

Functions:
 To perform the work efficiently given by the supervisor.
 To do work with co-operation.
 To take care of raw material and machines.
Duties:
 To follow the instruction of the supervisor properly.
 To inform the supervisor immediately in case of any default.
Job Specification:
Education: B.E./diploma in electronics.
Experience: not required
Mental ability: capable of understanding the working of the machine.
Unskilled workers:
Job Description
Job title: Unskilled Workers
Functions:
 To perform the work efficiently given by the supervisor.
 To do work with co-operation.
 To work in production process.
Duties:
 To follow the instruction of the supervisor properly.
 To inform the supervisor immediately in case of any default.

Job Specification:
Education: S.S.C. /H.S.C. passed
Experience : not required
OTHER:
This category includes all the other personnel such as the sweeper and peon.
Job Description
Job title: Other
Functions:
To do all work that has been assigned by their seniors.
 To be punctual and perfect about their work.
Duties:
 To work honestly with his full capacity.
 Responsible for any mistake committed by him.
Job Specification:
Education: S.S.C. / H.S.C. passed
Experience: not required
Mental ability: very strong to work for.

SALARY STRUCTURE
No. Designation Persons Salary p.m. Salary p.a.

per person
1 Manager 1 20000 240000
2 Supervisor 1 10000 120000

3 Technician 1 10000 120000
4 Sales Executive 2 7500 180000

5 Shop Executive 2 5000 120000
5 Accountant 1 6000 72000
6 Skilled Worker 5 4000 240000
7 Sweeper 2 2500 60000
8 Peon 1 2000 24000

MANPOWER REQUIREMENT
Dept. Particulars Years

2012-13 2013- 2014- 2015- 2016-
14 15 16 17
PRODUCTION DEPARTMENT
Technician 1 1 2 2 2
Supervisor 1 1 2 2 2
Skilled 5 5 7 7 7
Workers
Unskilled 3 3 5 5 5
Workers
MARKETING DEPARTMENT
Sales& Shop 4 4 4 4 4
executive
FINANCE DEPT
Accountant 1 1 1 1 1
Others Sweeper 2 2 3 3 3
Peon 1 1 2 2 2

RECRUITMENT PROCESS
We are using some recruitment processes as following:
1. Friend to friend:-
We recruit people by preference of our employees in this method.
2. Applications:-
We recruit candidate on the application basis by selecting favorable

candidates in this method.
3. Through Mail:-
In this process candidate can directly send job application through E-mail to
our HR department.
TRAINING PROCESS
In the training process we are using two methods.
1. In house:-
In which we are giving training to our employee on the running
work who already employed.
2. Out house:-
In this process training given to our new employees who are newly
recruited we send them training agencies. Also fire training given to
them at our cost Rs.1500 per employees.

EMPLOYEE’S WELFARE
1. Medical allowances:-
Health insurance is given to our employees. Also we held
health check up for employees.
2. Conveyance Allowance:-
Conveyance allowances are given to our employees to meet
transaction expenses incurred by him.
3. Pension:-
We also provide pension to our employees.
4. Travelling Allowances:-
Travelling allowances given to employee to meet tour
expenses incurred on transfer of employees.
5. Gratuity:-
Lump-sum amount paid to employee when he retires after
long service. It is reward for his long service.
6. Provident fund:-
Provident fund given to the employee at 12%

CHAPTER-6
MARKETING
FEASIBILITY

What is marketing feasibility?
 The purpose of marketing feasibility study in to determine the

sustainability of the proposed product for profitable development and
to define optimal quality in accordance with project market demand.
 It includes a description of the industry, current market anticipated,
future market potential, competition, sales projects, potential buyers,
etc. and collecting information about a potential market that can be
used in deciding how a new product or service should be designed ,
delivered, priced and marketed.
 Thus, it can provide accurate, timely, in depth information that will
help you make best possible decisions, given the characteristics of your
likely customer base and competitors.


4 P’s of marketing
 The marketing mix is the set of marketing tools that the firm uses to
pursue its marketing objectives in the target market. Here, all classify
the set of marketing tools into 4 broad groups that we call 4 P‟s of
marketing.
PRODUCT PRICE
PLACE PROMOTION

1. PRODUCT
 Product is anything which is offered to market for exchange or
consumption. Product can be in different form like service, physical
product, place ideas, events, persons, organisations, information ,etc.
our product comes under the head of „impulse goods‟ ( goods that are
purchased without planning).
Product level
In planning marketing offering, the marketers need to think through 5

levels of products.
Each level adds customer value and constitutes a customer value

hierarchy.

Potential Product
Augmente
d Product
Expected
Product
Basic
Product
Core
Benefit
1. Core benefit:
 The most fundamental level is core benefit. The service or benefit,

the customer is really buying. The core benefit of icecream is
“frozen icecream”
2. Basic product:
 At this level, the marketer has to convert the core benefit into a
basic product or generic product. The basic product is cup, cone
candy, or family pack.
 Due to financial constraints, we decided upon making scoops
and family pack only.
3. Expected products:
 At the third level, the marketer prepares an expected product, that
is, asset of attributes and conditions buyers normally expect when

they purchase the product. The expected product of icecream is as

under:
 Various fruit flavors like green apple, custard apple,
watermelon, litchi
 Sugar free
 Fat free
4. Augmented product:
 At the fourth level, the marketers prepare an augmented product
that exceeds customer expectation. In in developed countries brand
competition take place at this level. Differentiation arises on the
basis of product augmentation. The augmented product is built up in
the order to make it competitive and attractive. It offers the
additional benefit.
In case of icecream augmented product is:
 Customised icecream
 Icecream in various shapes
5. Potential product:
 At the fifth level stands the potential product, which encompasses
all the possible augmentations and transformations the product
search for new ways to satisfy customers and distinguish their offer.
Here, innovations play a very important role.
 Here we have created ice cream flavor on basis of cricket theme.
 E.g. All rounder chocolate, Not out nuts.

Product Mix
Product mix is a set of all the products and items that seller offer for
sells. Product mix is considered of width, length, line, depth, and consistency.
All rounder
Chocolate
Googly
Strawberry
Bowled
Scoop
Blackcurrent
Not Out
Nuts
Catch out
Vanilla
Ice creame
All rounder
Chocolate
Googly
Strawberry
Bowled
Family pack
Blackcurrent
Not Out
Nuts
Catch out
Vanilla

A product mix related to ice cream is as follows:

1. Product line-
Product line refers to always particular company. In our icecream
product line is icecream.
2. Product width-
It refers to how many product line the company carries i.e. quantity of
product. In our icecream product width is one.
3. Product length-
It refers to total number of items in product line. In product line, we
ignore the product sizes and consider the product the product varieties.
Our product length is 5:
 All rounder Chocolate
 Googly Strawberry
 Bowled Black current
 Not Out Nuts
 Catch out Vanilla
4. Product depth-
It refers to how many varieties are offered of each product in line.
We are offering two types, in which our icecream will be sold i.e.
scoop and family pack.
All the flavours that are we offering in scoop are same for that of
family pack also.
5. Product consistency:-
It refers to how closely relate the various product lines are in end use,
production requirements, distribution channel.

2. PRICE
 Price is an important variable of the marketing mix. In response of
product customers are charged something that is nothing but price.
 Price planning is one of the most overlooked areas in industrial
marketing. The pricing decision is at the core of every business plan
and impacts directly on the critical components of a company‟s
marketing strategy.
Pricing policy
Our main objectives are:-
1. Maximisation of market share:-Our foremost attention is to grab the
greater market share to become one of the prospective competitors to
other players.
2. Survival:- this is a short term objective as we would be facing fierce
competition
3. Profit maximisation:-to earn marginal profits to expand and further
diversify our product line.
4. To divert the preference of people from price to flavour and taste by
keeping affordable price.

Price list:
Scoops: (Single Scoop)
Catch out Vanilla Rs.15
Googly Strawberry Rs. 15
Bowled Black current Rs. 30
Not out Nuts Rs. 18
All rounder Chocolate Rs.20
Family Packs: (750ml)

Catch out Vanilla Rs. 70
Googly Strawberry Rs.70
Bowled Black Current Rs.90
Not out Nuts Rs.150
All rounder Chocolate Rs.100

3. PLACE
 It covers the channels from manufacturing house to the customers and
also area covered by the product like where the product is sold. It also
covers where and how the company store its stock like information of
warehouses
Distribution channel
 Marketers face many complexities in designing their distribution

channels. In some markets the distribution system is complex and hard
to penetrate, consisting of many layers and large number of
intermediaries.
 As we are launching our icecream in the market and due to
financial constraint we have set up an icecream parlour with
manufacturing unit beside it.
Future prospectus
 In future we are planning to set up numbers of parlours in various

areas of A‟bad with a centralised manufacturing unit.

Old
Youth Children
Pavilion
Parlour
4. PROMOTION
 Promotion refers to the activities designed by the organisation

stimulate quicker or greater purchase of services by customers.
 In marketing promotion means all those tools through which the
marketer communicates its product to the consumer. It also includes
different means that the uses to increase the sale of his products.
Effective promotion can be done through following five tools:

Advertisement
Sales
Public Relation
Promotion
Personal Direct
Selling Marketing
Advertisement:
The word „advert‟ explains that:
A-Active watch
D-develop relation
V-velocity
E-estimate
R-responsible
T-timely
Advertising is non personal form of marketing with identified sponsor .

Today the market is of innovators i.e. how you can present your
product in the most creative in unique way to the target customers so that
they are easily influenced.
We have also opted for innovative and creative ideas to advertise our
product to generate the preference for our product.
Sales promotion:
 We have strike a deal with “Snapdeal” –A‟bad to promote our
icecream.
 30% discount on order worth Rs.250 or more
 10% discount on family packs or takeaways.
Therefore total cost for placing ad in Snapdeal would cost us Rs. 34500
Direct marketing:
 Vehicles and pamphlets used in areas where our target customers are
likely to get attracted like university area, school campuses, near
restaurants ,etc.
Vehicles would cost worth Rs. 24000
Pamphlets would cost us worth Rs. 450
Rickshaw Advertising worth Rs. 600
Hand carts on Rent worth Rs. 12000 for 4 carts
5 M’S OF MARKETING

MISSION
MEASURE
MONEY
MENT
MEDIA MESSAGE

1. MISSION:
 Mission consists of the central objective of advertising. It
answers the questions” why are we doing advertising?” Every
company has its own advertising objective whether it is new or
existent. Our advertising objectives are:
1. To create consumer awareness
2. To occupy a favourable image in minds of target market
3. To attract the consumers
4. To encourage immediate sale
2. MONEY
 It refers to how much amount to be spent behind advertising.
The cost of advertising is different for different products. It high
for those products which are highly substituble.
 As far as our product is concerned following are the factors to be
considered while deciding the advertising budget:
a) Stage in product life cycle: we are just launching our icecream in
the market. Icecream being highly substituble product needs to be
heavily advertised.
b) Advertising frequency: to withhold the attracted the customers,
advertisement should be made effective and brought to attention
repeatedly
c) Outlet setup: we are planning to make our parlour a theme parlour
with Cricket theme so we would need things to advertise the same.
d) Choose the medium of advertisement: we have opt for cheaper
ways to advertisement to reduce the cost

3. MESSAGE
 The impact of message largely depends on how it is sold and

what is to be conveyed and hence the message generation plays
an important role in the company‟s image or reputation.
Tag line- “RUN….SPIN…….Get BOWLED !....”
4. MEDIA
 It refers to means through which advertiser communicates the
message to target audience in order to make them aware
regarding the product or generating brand loyalty.
 The following are the advertising media that we have used for
marketing:
a) Vehicle: hired a cycle to roam around the areas of target audience
so that at least they know about the existence of our product
b) Pamphlets: it refers to giving details about product, company
name, and address in brief and send it to potential consumers.
c) Internet: we have deal with Snapdeal – that is growing now a day‟s
immensely.
5. MEASUREMENT
 It refers to impact of advertising.
 As we are into direct selling, potential sales will definitely reveal
the effectiveness of advertising.

MARKET RESEARCH
DEFINE MARKET RESEARCH:
We define marketing research as the systematic design, collection,
analysis, and reporting of data and findings relevant to a specific marketing
situation facing the company.
MARKET RESEARCH PROCESS:

Step 1: Define the Problem, the Decision Alternatives, and the
Research Objectives
The goal is to shed light on the real nature of the problem and to suggest
possible solutions or new ideas.
We conducted a market survey with an objective to figure out who are
our actual target customers and the competition we would face while
entering into market. And also to know about preference of target
customers.
Step 2: Develop the Research Plan

Designing a research plan calls for decisions on
Data sources:-
Primary data: Primary data is the raw data we gather from direct
customers.
We used questionnaire method to gather primary data.
Secondary data: the kind of data that has already been collected by
somebody.
We have used internet to know the price list of icecreams and
machines.

Research Approaches Primary data can be collected in five main ways:

1. Observation,
2. Focus groups,
3. Surveys,
4. Behavioural data, and
5. Experiments.
We have used survey method.

Research Instruments Marketing researchers have a choice of three main
research instruments in collecting primary data:
1. Questionnaires,
2. Qualitative measures, and
3. Mechanical devices.
We have only used Questionnaires for our survey with personal

interview.
Sample Survey After deciding on the research approach and instruments,

the marketing researcher must design a sampling plan.
 Sampling unit: Who is to be surveyed?
We selected upon common man individually.
 Sample size: How many people should be surveyed?
We surveyed 200 customers.
 Sampling procedure: How should the respondents be chosen?
We chose individuals randomly.
Contact Method Once the sampling plan has been determined, the
marketing researcher must decide how the subject should be contacted:
1. Mail,

2. Telephone,
3. Personal interview, or
4. Online interview.
We had opted for personal interview along with online interview in

case of gathering information from suppliers.
Step 3: Collect the Information

The data collection phase of marketing research is generally the most
expensive and the most prone to error. In the case of surveys, four major
problems arise. Some respondents will not be at home and must be
contacted again or replaced. Other respondents will refuse to cooperate.
Still others will give biased or dishonest answers. Finally, some
interviewers will be biased or dishonest. Getting the right respondents is
critical.
We had personally met all the sample units and had tried to minimise
the research error.
Step 4: Analyze the Information

We have analysed data by making frequency tables and charts.
Step 5: Present the Findings

We have presented our analysed data in form of charts.
Step 6: Make the Decision

Finally after the analysis of data and interpreting it in the terms we
require the information we reached down to decision.

CONSUMER QUESTIONNAIRE
K.S.SCHOOL OF BUSINESS MANAGEMENT
MARKET RESEARCH ON ICE CREAM
T.Y. - M.B.A
CONSUMER QUESTIONNAIRE
Name:
Area:
Gender: Male Female
Age group: - < 15 15-25
25-40 40-50 >50
Occupation: Student Employed Business
House wife Other ______________
1. Do you consume ice cream?

Yes No
If yes then go for section A, if no then go for section B.

Section A
2. . When we talk about ice cream, which brand you prefer more?
Havmor Vadilal Kwality Walls
Vimal Amul
Local brands: - Diary Den Trupti Other
3. Why do you prefer that brand?
Havmor Vadilal Kwality Amul Vimal Local

walls
Price
Flavour
Taste
Nutrition
Degree of
smoothness

4. What is more important while consuming ice cream:-
Most
Least important Important
important
Price
Flavour
Brand
Taste
Nutrition
Degree of smoothness
5. Which flavor you like the most?
sometimes frequently every time

Vanilla
Butterscotch
Chocolate
Strawberry
Fruit Flavor
6. You consume ice cream as:

Cup Cone Candy Sundae Family/party
pack
Vanilla strawberry Mango dolly Strawberry Kesar pista
Strawberry Butterscotch Raspberry Orange Rajbhog
Butterscotch Kesar pista Kaccha aam Black current Kajudraksh
Chocolate Chocolate Chocobar Chocolate butterscotch
If other,
Specify:-

7. How often do you eat ice cream?

Every day Every week Twice/Thrice a week Every month
8. What is your monthly expenditure on consumption of icecream?

Less than Rs.100 Rs.100-200 Rs.200-500 More
than 500
9. From where do you get ice cream?

Malls Factory Outlet Retail shop Other
10. Which is the most convenient way for you to get your ice cream?
Going to shop to get it
Getting it from handcarts/Vans
Home delivery
11. What are your expectations about icecream?

Customized icecream New flavours Fat free Sugar free
Section B
1. Can you give us reason, why don‟t you consume ice cream?
Price Taste Health conscious
Allergic issues (consist of dairy product)
2. If healthier ice cream comes out, will it induce you to consume ice cream?
Yes, it will
I don‟t care at all
3. If home delivery service is started, will it make you to prefer ice cream more?
Yes, that would be fantastic
Does not matter much
No, bad idea
THANK YOU…!!!

ANALYSIS
Most Preferred Brand
Most prefered brand

120
105
100
83
80
64
60
40
26 26
20
6
0
Havmor Vadilal Amul Kwality walls vimal Local
After conducting survey on 200 different samples we came across that

most preferred brand of icecream is Havmor followed by Amul and then
Vadilal.
Local and Kwality walls are preferred indifferently and Vimal is least
famous as it has just launched.

Reason For The Preference of Havmor
100
90 85
86
80
70
60
50 49 47
40
30 41
20
10
0
Price Flavour Taste Nutrition Degree of smoothness
Reason for preference of Havmor
Havmor is mostly preferred because of its variety of flavours offered and the
taste.
Reason for Preference of Vadilal
50
45
43
40
43
35 40 35
30
25 28
20
15
10
5
0
Price Flavour Taste Nutrition Degree of
smoothness
Reason for preference of Vadilal
Vadilal , a tough competitior to Havmor is also preferred due to its taste,

variety of flavours and also price.

Reason for preference of Amul
50
45 47 43
40 44
35
37 38
30
25
20
15
10
5
0
smoothness
Reason for preference of Amul
As from above chart we can see that Amul is being preferd for almost all
features e.g. nutrition, degree of smoothness, et
Reason for Preference of Kwality walls
30
25 25
20 21
17
15
12 13
10
0
smoothness
Reason for preference of Kwality walls
From the information we gathered we came to know that kwality walls is less
preferred to its high price but also preferable due to its taste.

Reason for Preference for Vimal
6 6
3
2
2 1 2
1
1
0
smoothness
Reason for preference of Gokul
It is clearly evident from above chart that Vimal is mostly prefers due to its
affordable price.
Reason for preference of Local
14
12 11 12
10
10
8
6
5
4
2 2
0
smoothness
Reason for preference of Local
Local icecream is being preferred due its taste , easy availability and
affordable price.

Age v/s brand
( less than 15 years)
2.5
2
2 2
1.5
1 1
0.5
0 0
0
0
Havmor Vadilal Amul Kwality walls Gokul Local
Age v/s brands-less than 15
Among the 200 sample size, we came across 5 kids under 15 years of age
who mostly preferred Havmor and Vadilal in comparison to others.
15-25 years
80
70 70
60 60
50
50
40
30
20 19
15
10 2
0
Age v/s brands-15-25
From the above chart , we conclude that Havmor and amul is being preferred
by youth

25-40 years
12
10 10
8
7
6
4 3 4
3
2 1
0
Again, the working class people ageing 25-40 years prefer Havmor to other
brands
40-50 years
8
7 7
6
5
5 5
4
3
2 1
1 1
0
0
Havmor again stands first in preference but this age group also like to prefer
Vadilal and Amul

50 and above
6 6
5 5
4 4
1 0 0 0
0
Age v/s brands-More than 50
Here we can see that Havmor captures the major market share followed by
Vadilal and amul
Importance Level
Least important
60
50
50
38
40
30
19 20
20
12
10 3
0
Price Flavour Brand Taste Nutrition Degree of
smoothness
Importance level-Least important
From above chart we conclude that the desire for consumption of icecream is
not motivated by price or brand. People consume icecream whenever they
feel to have it and irrespective of brand, that means they consume those
icecream which are easily available to them.

Important
70
58
60 55 53
52
50
38
40 35
30
20
10
0
smoothness
Importance level- important
From the above data we interpret that importance level differs from person to
person on the basis of preference of an individual.
Most important
120
100
100 94
80
65
59
60 53
40 29
20
0
smoothness
Importance level-Most important
It is clearly evident from the above data that the desire to consume icecream
is motivated by it‟s flavour and taste.

Which Flavour you Consume Sometimes?
100
90
90
80
70
60
60
49 48
50
40 33
30
20
10
0
Vanilla Butterscotch Chocolate Strawberry Fruit flavour
Which flavour you prefer sometimes?
Flavours that are consumed sometimes are chocolate followed by vanilla
Which Flavour you Consume Frequently?
60
49
50
44
40
40
30 26
24
20
10
0
Which flavour you prefer frequently?
Ranked high among frequent consumption of flavours is butterscotch and

strawberry.

Which Flavour you Consume Everytime?
120
107
100
80
60
40 31 33
26 26
20
0
Which flavour you prefer everytime?
The all time favourite flavour is chocolate.
Flavours of cup:
80
70 67
64
60
50
40 40
40
30
20
10
0
0
Vanilla Strawberry Butterscotch Chocolate Other
Cup
Chocolate and strawberry are consumed highly in cups.

Flavours of cone:
80
68
70
60
50 47
40
30 24
20
8
10 2
0
Strawberry Butterscotch Kesar pista Chocolate Other
Cone
Chocolate and butterscotch cones are consumed highly.
Flavours of candy:
70 65
60
50
40
30
30 27
20
10 5
0
0
Mango dolly Rasberry Kaccha aam Chocobar Other
Candy
Chocobar, the most famous candy ranks high in consumption of candies

among people.
We have opt for cups only and not cones for our product line due to
additional charges incurred on biscuit cone and candy sticks and additional
machine to be installed for same.

Flavours of sundae:
20 Sundae
Strawberry
5 Sundae Orange
Sundae Black
67 current
Sundae Chocolate
34
Sundae Other
Most favourite sundae is chocolate followed by strawberry
Flavours of party pack/ family pack:
60
49
50
40
40
34
30
20 15
10
3
0
Kesar pista Rajbhog Kajudraksh Butterscotch Other
Family/Party pack
When it comes to family treat, kaju draksh tops the chart of family pack.

Frequency of Consumption:
Frequency of consumption
9 Every day
54
64
Every week
39 Twice/thrice a week
Every month
Consumption pattern we get from above data shows that icecream is

consumed on weekly basis. There are few people only who consume
icecream everyday whereas significant number of consumers consume it
monthly.

Monthly expenditure on icecream consumption:
Monthly expenditure
Less than
100
18
56
28 100-200
200-500
64
More than
500
Our sample survey was limited to Ahmedabad city only, and A‟bad being a
tropical zone and has rising temperatures therefore there are people who
spend more than Rs. 500 monthly on just consumption of icecream which
give us an average expenditure of Rs. 100-200 per person in a month.

How do you get your icecream?
How do you get your icecream?
2
13
Going to shop
Getting from handcarts
home delivery
151
As we can see that going to shop and getting icecream is most convenient
way of getting icecream.
One of the significant information that we interpreted from the above data is
home delivery service has greater prospective of expansion and growth and
we will be looking forward to it.

Expectations from icecream:
Expectations from icecream
100 92
90
80
70
60
50
38
40
30 20
16
20
10
0
Customised New Flavour Fat free Sugar free
New flavours ranks high among the expectations of people from icecream.

DEALER ANALYSIS
Name of dealer: Vadilal Industries Ltd.
Address:-Vadilal Industries Ltd, Pundhra, Near Gandhinagar
Type of firm- Company
Per month production capacity:
In peak season-70000 ltrs icecream
In off season- 25000 ltrs icecream
 Raw materials:
1. Milk: getting from nearby dairy on annual contract basis. Every day
approx consumption of milk amounts to 22000 ltrs with 6% fat content
2. Skimmed powder: getting from near by dairies
3. Nuts: from local whole salers and from Goa and importing only
almonds from America.
4. Stabilizers and Emulsifiers: from suppliers
5. Sugar: from local market
6. Essence : from suppliers
 Machines:
1. Pasteurisers- Pasteurisering department with capacity of 22000 ltrs at
a time
2. Homogenisers- with capacity of 18000 ltrs
3. Candy machine:
Automated: with capacity of 6000 candies per batch
Manual: with capacity of 1800 candies per batch
4. Cone machine: fully automated with capacity of 1200 cones per batch
5. Cup filling machine: automated drainage of basic mix with manual
filling.

6. Hardening tunnel: 6 hardening tunnels with temperature ranging

between -30‟ to -40‟
7. Oven: for baking cakes with capacity of 12 cakes per batch
 Equipments and moulds:

1. Cassata cut: with 3 moulds in single equipment
2. Moulds: all kinds of moulds for manual candy machines.
 Manpower requirement:
 In peak season: 4 persons per machine plus administrative staff
 In off season: 2 persons per machine plus administrative staff
 Skilled workers are appointed on annual contract basis by production
department fulfilling all the labour laws.
 Semi skilled workers are appointed by supervisors.
 Sweepers and other cleaning staff also to be appointed by supervisor.
 Administrative staff recruited by top management by placing ads in
daily newspaper.
 Salary structure:
Skilled workers Rs.165
Semi skilled workers Rs.150
Unskilled workers Rs.100
Administrative staff Information not revealed
Vadilal takes all the safety measures required. Like caps and gloves for
workers to adhere to quality measures.
They store milk at storage tanks for smooth flow of production
They also store icecream at storage houses with temperature of -18‟ and also
with facility of direct loading to trucks.
Transport vehicles are hired on annual contract basis.
Electricity consumption information was not revealed. They use 3 generators.

Name of dealer: Havmor

Address: Near S.T. stand, naroda, Ahmedabad
Type of firm: private company
We were allowed to visit havmor industries but due to their policy we
were not given any information regarding production, sales or manufacturing
process.
We had just seen the industry from gallery.
Name of dealer: Janta icecream

Address: opp. Panchalnagar, Dudheshwar, Ahmedabad.
Type of firm: private company
Per month production capacity:
In peak season: 1500-2000ltrs icecream
In slake season: 500-600ltrs icecream
 Raw materials:
1. Milk: getting from local dairy, everyday consumption of milk 1000ltr
2. Skimmed powder: getting from local market
3. Nuts: from local market
4. Chocolate slabs: from supplier
 Machines
1. Cup filling machine: automated drainage of basic mix with manual filling.
2. Candy machine: Manual: with capacity of 500 candies per batch
3. Milk Boiler Machine
4. Flavour milk tank
5. Synergy‟s Continuous freezer
6. Continuous freezer
7. Hardner

 Salary to workers
150 Rs to 400 Rs on daily basis according to their work experience.
 Manpower requirement
In peak season 7 to 8 workers
In slack season 3 to 4 person
 Electric consumption
Approx 55000rs per month

CHAPTER-7
FINANCIAL

FEASIBILITY
-I
ASSUMPTIONS
 We have considered 300 working days of production in each year.
 The loan from Bank Of Baroda is taken at 14% interest rate p.a. and
repayable in 5 years with equal monthly installments of Rs.8232000/-

 All the partners are working partners and they have equal liabilities as well
as equal share of profit.

 Salary is calculated after considering yearly increase in pay as well as
increase in number of employees as per the Human Resource requirements.

 One of 11 partners one is manager, accountant and supervisor while two
of them are Sales Executive as explained in the Manpower Planning and
Organization Chart and will be eligible for the Salary in due course as per
the terms of engagement.
 Production capacity will increase as per the demand of consumers.
 Tax provision is 30.90% without any Surcharge as the same is not
applicable.
 Depreciation is provided as per Income Tax Act, 1961 as Written Value
Method.
 We are taking loan from relatives in the beginning of the first year and the
same is repaid in the first year itself.

 Carriage inward & Transportation Costs is 4% while other charges are 1%
of Raw Material costs.

 Bonus paid is the minimum bonus paid as per The Bonus Act.
 Valuation of Inventory is made as per AS-2 (Valuation of Inventory).
 Interest to Partners‟ Fixed Capital is paid at the rate of 12% p.a. to all the
partners.
 No Remuneration is given to the partners except the salaries regularly paid
to the active partners, in due course.

 No Work in Process is considered as per the industry standards and
parameters.
 Closing Stock of Raw Material and Finished Goods are estimated to be in
inventory for 1 month.

 Debtors are valued at sales. Credit Sales is estimated at 50% of the total
sale. Credit period allowed to debtors is taken as 45 days looking to the

industry standards and parameters.
 Finished Goods are valued at Cost of goods produced
 We have followed the concept of Integrated Accounting System (Merging
of Financial And Cost Accounting).

 Creditors for Raw Material are estimated to hold allowable credit period of
1 month.
 Creditors for expenses are estimated to hold allowable credit period of 15
days.
Addition to the Working Capital is assumed to be required at the beginning
of the year.

COST OF PROJECT
Particulars Amount
Land & Building 12000000
Plant & Machinery 1902500
Furniture 104900
Working Capital 1132611
Total Cost 15140011
SOURCE OF FINANCE
Particulars Amount
Partner‟s Capital 11000000
Loan From Bank of Baroda 4116000
Loan From Relatives 24011
Total 15140011
APPLICATION OF FUNDS
1) LAND & BUILDING:
Particulars Sq.Ft. Rate ( per Total

sq. ft.)
Land & Building at SG 600 20000 12000000
Highway

2) FURNITURE & FIXTURE:

Particulars Units Amount Total
Computer 1 20,000 20,000
Printer 1 4,000 4,000
Telephone 2 1,000 2,000
Air Conditioner 1 25,000 25,000
Water Purifier 1 2,000 2,000
Tube Light 28 125 3500
Fans 12 1,200 14,400
Exhaust Fan 7 500 3,500
Chair 10 250 2,500
Cup-Board 2 4,000 8,000
Table 4 5,000 20,000
Total - - 104900
3) PLANT & MACHINERY:

Particulars Units Amount Total
Milk Boiler Machine 1 1,50,000 1,50,000
Flavor milk tank 1 15000 15000
Synergy 1 350000 350000
continuous reezer
Continuous freezer 1 3,50,000 3,50,000
Hardener 1 800,000 8,00,000
Freezer 2 23,000 46,000
Label Machine 1 1500 1500
Cold storage tank 1 150000 150000
Installation charges - - 40000
Total 1902500

REPAIR & MAINTENANCE :

Year Amount Percentage Total
1 1902500 1% 19025
2 1617125 1.3529% 21878
3 1374556 1.83% 25154
4 1168373 2.48% 28976
5 993117 3.335% 33120
INSURANCE:
Particulars Years
1 2 3 4 5
Building & Plant &
Machinery
Total 41333 35208 29995 25553 21770

DEPRECIATION:
PLANT & MACHINERY
Year Opening Balance Depreciation Closing Balance
@15%
1 1902500 285375 161725
2 1617125 242569 1374556
3 1374556 206183 1168373
4 1168373 175256 993117
5 993117 148968 844149
FURNITURE
@10%
1 104900 10490 94410
2 94410 9441 84969
3 84969 8497 76427
4 76427 7643 68784
5 68784 6878 61906
BUILDING
@10%
1 750000 75000 675000
2 675000 67500 607500
3 607500 60750 546750
4 546750 54675 492075
5 492075 49208 442868

TOTAL DEPRECIATION
Year Depreciation
1 370865
2 319510
3 275430
4 237574
5 205054
FACTORY OVERHEAD:
Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year
Salary to 120000 120000 126000 252300 258915
Supervisor
Salary to 120000 120000 126000 252300 258915
Technician
Salary to Peon 24000 24000 49200 50460 52983

Salary to 60000 60000 63000 66150 69460
Sweeper
Research 5000 8000 12000 15000 18000
Outsourcing cost
Bonus 5600 6300 7700 8400 9100
Power & Fuel 484000 561840 831165 1025268 1279672
Repairs & 19025 21878 25154 28976 33120

Maintenance
Insurance 41333 35208 29995 25553 21770
Depreciation on 285375 242569 206183 175256 148968
Plant &
Machinery
Total Factory 1164333 1199795 1476397 1899663 2150903

Overheads
OFFICE & ADMINISTRATION OVERHEAD:
Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year
Interest on Fixed 1320000 1320000 1320000 1320000 1320000
Capital of
Partners
Salary to 240000 240000 252000 264600 277830
manager
Salary to 72000 72000 75600 79300 83350
accountant
Depreciation on 10490 9441 8497 7643 6878
Furniture &
Fixtures
Depreciation on 75000 67500 60750 54675 49208
Building
Interest on Loan 576240 460992 345744 230496 115248
(Secured)

Stationery & 6420 7009 9640 10315 11037

Printing
Computer 1580 1706 1900 2024 2124
Expenses
Electricity( Shop 18920 21654 22758 23587 25125
Proportion)
Telephone 6541 6672 6805 6941 7080
Audit Fees 5000 6000 7500 8500 11000
Misc. Expenses 7000 8250 9370 10280 11360
Total Office & 2339191 2221224 2120564 2018361 1920240
Administrative
Expense

WORKING CAPITAL STATEMENT:
Particulars 2012-13 2013-14 2014-15 2015-16 2016-17

CURRENT
ASSTES
Inventories:
i) Raw 385070 529173 638348 804318 891453
Material
iii) Finished 684195 848708 989914 1187255 1299578
Goods
1069265 1377881 1628261 1991573 2191031
Sundry 517903 481066 566460 690155 753819
Debtors
Cash & Bank 50,987 170,245 406,816 557,837 777,619
Balance
Total Current 1638154 2029192 2601538 3239564 3722469

Assets (A)
CURRENT
LIABILITIES
Sundry 385070 529173 638348 804318 891453
Creditors for
Goods
Sundry 120473 136823 160003 201904 219006
Creditors for
Expenses
Total Current 505542.81 665995.63 798350.67 1006221.93 1110458.80

Liabilities (B)
Working 1132611 1363197 1803187 2233343 2612010

Capital (A-B)

CHAPTER-8
FINANCIAL

FEASIBILITY-
II
COST SHEET
Particulars 2012-13 2013-14 2014-15 2015-16 2016-17
Opening Stock 0 385070 529173 638348 804318

of Raw
Material
Purchase of 4620842 6350075 7660170 9651814 10697430
Raw Material
Expenses
related to
Purchase:-
Carriage 184834 254003 306407 386073 427897
inward &
Transportation
- 4%
Other Charges- 46208 63501 76602 96518 106974
1%
Total Expenses 231042 317504 383009 482591 534872
Less:
Closing stock 385070 529173 638348 804318 891453
of Raw
Material
Consumption of 4235771 6205972 7550995 9485844 10610295

Raw Material
Direct Expenses
Direct Labour 240000 240000 348000 360600 378630
Prime Cost 4706813 6763475 8282004 10329034 11523797

Factory

Overhead
Salary to 120000 120000 126000 252300 258915
Supervisor
Salary to 120000 120000 126000 252300 258915
Technician
Salary to Peon 24000 24000 49200 50460 52983

Salary to 60000 60000 63000 66150 69460
Sweeper
Research 5000 8000 12000 15000 18000
Outsourcing
cost
Bonus 5600 6300 7700 8400 9100
Power & Fuel 484000 561840 831165 1025268 1279672
Repairs & 19025 21878 25154 28976 33120
Maintenance
Insurance 41333 35208 29995 25553 21770
Depreciation 285375 242569 206183 175256 148968
on Plant &
Machinery
Total Factory 1164333 1199795 1476397 1899663 2150903

Overheads
Total Factory 5871146 7963270 9758401 12228697 13674700

Cost
Cost of 5871146 7963270 9758401 12228697 13674700

Production
Add:
Office &
Administrative
Expense
Interest on 1320000 1320000 1320000 1320000 1320000

Fixed Capital
of Partners
Salary to 240000 240000 252000 264600 277830
manager
Salary to 72000 72000 75600 79300 83350
accountant

Depreciation 10490 9441 8497 7643 6878

on Furniture &
Fixtures
Depreciation 75000 67500 60750 54675 49208
on Building
Interest on 576240 460992 345744 230496 115248
Loan (Secured)
Stationery & 6420 7009 9640 10315 11037
Printing
Computer 1580 1706 1900 2024 2124
Expenses
Electricity( 18920 21654 22758 23587 25125
Shop
Proportion)
Telephone 6541 6672 6805 6941 7080
Audit Fees 5000 6000 7500 8500 11000
Misc. Expenses 7000 8250 9370 10280 11360
Total Office & 2339191 2221224 2120564 2018361 1920240
Administrative
Expense
Cost of 8210337 10184494 11878965 14247058 15594940

Production of
Finished Goods
Add: Opening 0 684195 848708 989914 1187255

Stock Of
Finished Goods
Less: Closing 684195 848708 989914 1187255 1299578
Stock of
Finished Goods
Cost of 7526143 10019981 11737759 14049717 15482616

Production of
goods Sold
Add:
Selling &
Distribution
Expenses
Packing 197432 227760 279195 337338 375724
Expenses-2.1%
of sales
Carriage 56409 65073 79770 96382 107350

Outward
Cart Rent & 240000 300000 300000 504000 504000
Misc. Expenses
Advertisement 238200 258500 232650 209385 188447
Salary to Sales 300000 300000 315000 330750 347290
& Shop
Executives
Salary of Cart 192000 300000 300000 462000 462000
Workers
Total Selling & 1224041 1451333 1506615 1939855 1984811

Distribution
Expenses
Total Cost 8750184 11471314 13244374 15989572 17467427
Profit/(Loss) -348654 74276 350666 574138 624223
Sales 8401530 11545590 13595040 16563710 18091650
PRODUCT WISE COST SHEET

COST SHEET FOR 2012-13
Particulars Cup Family Pack Total
Opening Stock of Raw 0 0 0

Material
Purchase of Raw 2772505 1848337 4620842
Material
Expenses related to
Purchase:-
Carriage inward & 110900 73933 184834
Transportation- 4%
Other Charges-1% 27725 18483 46208
Total Expenses 138625 92417 231042
Less:
Closing stock of Raw 231042 154028 385070
Material

Consumption of Raw 2541463 1694309 4235771

Material
Direct Expenses
Direct Labour 144000 96000 240000
Prime Cost 2824088 1882725 4706813
Factory Overhead
Salary to Supervisor 72000 48000 120000
Salary to Technician 72000 48000 120000
Salary to Peon 14400 9600 24000

Salary to Sweeper 36000 24000 60000
Research Outsourcing 3000 2000 5000
cost
Bonus 3360 2240 5600
Power & Fuel 290400 193600 484000
Repairs & Maintenance 11415 7610 19025
Insurance 24800 16533 41333
Depreciation on Plant & 171225 114150 285375
Machinery
Total Factory Overheads 698600 465733 1164333
Total Factory Cost 3522688 2348459 5871146
Cost of Production 3522688 2348459 5871146
Add:
Office & Administrative
Expense
Interest on Fixed 792000 528000 1320000

Capital of Partners
Salary to manager 144000 96000 240000
Salary to accountant 43200 28800 72000
Depreciation on 6294 4196 10490
Furniture & Fixtures

Depreciation on 45000 30000 75000

Building
Interest on Loan 345744 230496 576240
(Secured)
Stationery & Printing 3852 2568 6420
Computer Expenses 948 632 1580
Electricity( Shop 11352 7568 18920
Proportion)
Telephone 3925 2616 6541
Audit Fees 3000 2000 5000
Misc. Expenses 4200 2800 7000
Total Office & 1403515 935676 2339191
Administrative Expense
Cost of Production of 4926202 3284135 8210337

Finished Goods
Add: Opening Stock Of 0

Finished Goods
Less: Closing Stock of 410517 273678 684195
Finished Goods
Cost of Production of 4515686 3010457 7526143

goods Sold
Add:
Selling & Distribution
Expenses
Packing Expenses-2.1% 118459 78973 197432
of sales
Carriage Outward 33845 22564 56409
Cart Rent & Misc. 144000 96000 240000
Expenses
Advertisement 142920 95280 238200
Salary to Sales & Shop 180000 120000 300000
Executives
Salary of Cart Workers 115200 76800 192000
Total Selling & 734425 489616 1224041

Distribution Expenses
Total Cost 5250110 3500073 8750184
Profit/(Loss) -209192 -139461 -348654

Sales 5040918 3360612 8401530

Opening Stock of Raw Material 231042 154028 385070

Purchase of Raw Material 3810045 2540030 6350075
Expenses related to Purchase:-
Carriage inward & Transportation- 4% 152402 101601 254003
Other Charges-1% 38100 25400 63501
Total Expenses 190502 127001 317504
Less:
Closing stock of Raw Material 317504 211669 529173
Consumption of Raw Material 3723583 2482389 6205972

Direct Expenses
Direct Labour 144000 96000 240000
Prime Cost 4058085 2705390 6763475
Factory Overhead
Salary to Peon 14400 9600 24000

Research Outsourcing cost 4800 3200 8000
Bonus 3780 2520 6300
Power & Fuel 337104 224736 561840
Insurance 21125 14083 35208

Depreciation on Plant & Machinery 145541 97028 242569
Add:
Office & Administrative Expense
Interest on Fixed Capital of Partners 792000 528000 1320000

Depreciation on Furniture & Fixtures 5665 3776 9441
Depreciation on Building 40500 27000 67500
Interest on Loan (Secured) 276595 184397 460992
Electricity( Shop Proportion) 12992 8662 21654
Telephone 4003 2669 6672
Audit Fees 3600 2400 6000
Total Office & Administrative Expense 1332734 888490 2221224
Cost of Production of Finished Goods 6110697 4073798 10184494
Add: Opening Stock Of Finished Goods 410517 273678 684195

Less: Closing Stock of Finished Goods 509225 339483 848708

Cost of Production of goods Sold 6011989 4007993 10019981
Add:
Selling & Distribution Expenses
Packing Expenses-2.1% of sales 136656 91104 227760
Cart Rent & Misc. Expenses 180000 120000 300000
Advertisement 155100 103400 258500
Salary to Sales & Shop Executives 180000 120000 300000
Total Selling & Distribution Expenses 870800 580533 1451333
Total Cost 6882789 4588526 11471314
Profit/(Loss) 44565 29710 74276
Sales 6927354 4618236 11545590


Other Charges-1% 45961 30641 76602
Total Expenses 229805 153203 383009
Less:

Direct Expenses
Direct Labour 208800 139200 348000
Prime Cost 4969202 3312802 8282004
Factory Overhead
Salary to Peon 29520 19680 49200

Bonus 4620 3080 7700
Power & Fuel 498699 332466 831165
Insurance 17997 11998 29995

Add:

Telephone 4083 2722 6805
Audit Fees 4500 3000 7500

Add:
Advertisement 139590 93060 232650
Total Cost 7946624 5297750 13244374
Profit/(Loss) 210400 140266 350666
Sales 8157024 5438016 13595040

Particulars Cup Family Total

Pack

Carriage inward & Transportation- 231644 154429 386073
4%
Other Charges-1% 57911 38607 96518
Total Expenses 289554 193036 482591
Less:

Direct Expenses
Direct Labour 216360 144240 360600
Prime Cost 6197421 4131614 10329034
Factory Overhead
Salary to Peon 30276 20184 50460

Bonus 5040 3360 8400
Power & Fuel 615161 410107 1025268
Insurance 15332 10221 25553
Add:


Telephone 4165 2776 6941
Audit Fees 5100 3400 8500

Add:
Advertisement 125631 83754 209385
Total Cost 9593743 6395829 15989572
Profit/(Loss) 344483 229655 574138
Sales 9938226 6625484 16563710

" Cup Family Total

Pack

Other Charges-1% 64185 42790 106974
Total Expenses 320923 213949 534872
Less:

Direct Expenses
Direct Labour 227178 151452 378630
Prime Cost 6914278 4609519 11523797
Factory Overhead
Salary to Peon 31790 21193 52983

Bonus 5460 3640 9100
Power & Fuel 767803 511869 1279672
Insurance 13062 8708 21770

Add:


Depreciation on Furniture & 4127 2751 6878
Fixtures
Telephone 4248 2832 7080
Audit Fees 6600 4400 11000
Add: Opening Stock Of Finished 712353 474902 1187255
Goods
Less: Closing Stock of Finished 779747 519831 1299578
Goods

Add:
Advertisement 113068 75379 188447
Total Cost 10480456 6986971 17467427
Profit/(Loss) 374534 249689 624223
Sales 10854990 7236660 18091650

PROFIT & LOSS ACCOUNT
Particulars 2012-13 2013-14 2014-15 2015-16 2016-17
Sales 8401530 11545590 13595040 16563710 1809165

0
Closing Stock 1069265 1377881 1628261 1991573 2191031
Total 9470795 12923471 15223301 18555283 2028268

1
Opening Stock 0 1069265 1377881 1628261 1991573

Purchase of Raw 4620842 6350075 7660170 9651814 1069743
Material 0
Carriage Inward & 184834 254003 306407 386073 427897
Other
Transportation
Charges
Other Charges 46208 63501 76602 96518 106974
Salary & Wages 1368000 1476000 1654800 2118460 2189373
Bonus 5600 6300 7700 8400 9100
Power & Fuel 484000 561840 831165 1025268 1279672
Repairs & 19025 21878 25154 28976 33120
Maintenance
Depreciation 370865 319510 275430 237574 205054
Interest on Secured 576240 460992 345744 230496 115248
Loan
Stationary & 6420 7009 9640 10315 11037
Printing

Computer Expense 1580 1706 1900 2024 2124

Telephone 6541 6672 6805 6941 7080
Audit Fees 5000 6000 7500 8500 11000
Misc. Expense 7000 8250 9370 10280 11360
Packing Expense 197432 227760 279195 337338 375724
Carriage Outward 56409 65073 79770 96382 107350
Advertisement 238200 258500 232650 209385 188447

Interest on Capital 1320000 1320000 1320000 1320000 1320000
Research 5000 8000 12000 15000 18000
Outsourcing Cost
Insurance 41333 35208 29995 25553 21770
Electricity (shop) 18920 21654 22758 23587 25125
Cart Rent & Misc. 240000 300000 300000 504000 504000
Expenses
Profit Before Tax -348654 74276 350666 574138 624223
Total 9470795 12923471 15223301 18555283 2028268

1
Tax Provision @ 0 22951 108356 177409 192885

30.9% in case of
Profit
Profit After Tax -348654 51324 242310 396729 431338

BALANCE SHEET
Particulars Sche 2012-13 2013-14 2014-15 2015-16 2016-17

dule
No.
Sources of Fund
Partner‟s capital 11000000 11000000 11000000 11000000 11000000

A/c
Partner‟s Current A 476346 1187671 2089981 3036710 4018048
A/c
Loan & Fund
Secured Loan ( 3292800 2469600 1646400 823200 0

BOB @14%)
Sources of Fund 14769146 14657271 14736381 14859910 15018048
Application of
Funds
Fixed Assets:-
WDV at the end B 13636535 13317025 13041550 12803976 12598923
of year
Current Assets:-
Inventories: C 1069265 1377881 1628261 1991573 2191031
Sundry Debtors 517903 481066 566460 690155 753819
Cash & Bank 50987 170245 406816 557837 777619

Balance
Total Current 1638154 2029192 2601538 3239564 3722469
Assets
Less:
Current Liabilities
& Provisions:-
Current Liabilities
Sundry Creditors 385070 529173 638348 804318 891453

for Goods
Sundry Creditors 120473 136823 160003 201904 219006

for Expenses
Provision

Income Tax 0 22951 108356 177409 192885

Payable (30.9%)
Total Current 505543 688947 906706 1183630 1303344

Liabilities &
Provisions:-
Net Current Assets 1132611 1340246 1694831 2055934 2419125
Application of 14769146 14657271 14736381 14859910 15018048

Funds

SCHEDULES FORMING PART OF BALANCESHEET

Particulars 2012-13 2013-14 2014-15 2015-16 2016-17
Schedule A
Partner‟s capital A/c 11000000 11000000 11000000 11000000 11000000

Partner‟s Current A/c
Opening Balance 0 476346 1187671 2089981 3036710

Add: Profit during the -348654 51324 242310 396729 431338
year
Add: Interest on 1320000 1320000 1320000 1320000 1320000
capital
Less: Withdrawal 495000 660000 660000 770000 770000
Balance at the end of the 476346 1187671 2089981 3036710 4018048

year
Schedule B
Fixed Assets
Land 11250000 11250000 11250000 11250000 11250000
Plant & Machinery
Op. WDV 1902500 1617125 1374556 1168373 993117
Less: Current year 285375 242569 206183 175256 148968
Depre
Cl. WDV 1617125 1374556 1168373 993117 844149
Furniture
Op. WDV 104900.00 94410 84969 76427 68784
Depre
Cl. WDV 94410 84969 76427 68784 61906

Building
Op. WDV 750000.00 675000 607500 546750 492075
Depre
Cl. WDV 675000 607500 546750 492075 442868
Net Fixed Assets 13636535 13317025 13041550 12803976 12598923
Schedule C
Closing stock of
Inventories:
i) Raw Material 385070 529173 638348 804318 891453
iii) Finished Goods 684195 848708 989914 1187255 1299578
Total Inventories 1069265 1377881 1628261 1991573 2191031

CASH FLOW STATEMENT

PARTICULARS 2012-13 2013-14 2014-15 2015-16 2016-17
CASH FLOW FROM
OPERATING
ACTIVITIES
NET PROFIT AFTER -348654 51324 242310 396729 431338
TAXATION (PAT)
INTERESTON LOAN 576240 460992 345744 230496 115248
TAX PROVISION 0 22951 108356 177409 192885
DEPRECIATION 370865 319510 275430 237574 205054
CHANGES IN -1162311 230586 439990 430156 378667
WORKING CAPITAL
TAX PAID 0 0 -22951 -108356 -177409
NET CASH FLOW -563860 1085363 1388879 1364008 1145783
FROM OPERATING
ACTIVITIES
CASH FLOW FROM
INVESTMENT
ACTIVITIES
PURCHASE OF -14007400 0 0 0 0
ASSETS
NET CASH FLOW -14007400 0 0 0 0
FROM INVESTMENT
ACTIVITIES
CASH FLOW FROM
FINANCIAL
ACTIVITIES
PARTNER'S CURRENT 476346 711325 902310 946729 981338
ACCOUNT
PARTNER'SFIXED 11000000 0 0 0 0
CAPITAL
TERM & OTHER 4140011 0 0 0 0
LOAN TAKEN
Repayment of loan from -24011
relatives
REPAYMENT OF -393859 -1216438 -1708874 -1929220 -1792091
TERM LOAN
INTEREST ON LOAN -576240 -460992 -345744 -230496 -115248
NET CASH FLOW 14622247 -966105 -1152308 -1212987 -926001
FROM FINANCIAL

ACTIVITIES
TOTAL 50987 119258 236571 151021 219782
ADD : OPENING 0 50987 170245 406816 557837

BALANCE
CLOSING BALANCE 50987 170245 406816 557837 777619
PARTICULARS 2012-13 2013-14 2014-15 2015-16 2016-17
CASH FLOW FROM
OPERATING
ACTIVITIES
NET PROFIT AFTER -348654 51324 242310 396729 431338
TAXATION (PAT)
INTERESTON LOAN 576240 460992 345744 230496 115248
TAX PROVISION 0 22951 108356 177409 192885
DEPRECIATION 370865 319510 275430 237574 205054
CHANGES IN -1162311 230586 439990 430156 378667
WORKING CAPITAL
TAX PAID 0 0 -22951 -108356 -177409
NET CASH FLOW -563860 1085363 1388879 1364008 1145783
FROM OPERATING
ACTIVITIES
CASH FLOW FROM
INVESTMENT
ACTIVITIES
PURCHASE OF -14007400 0 0 0 0
ASSETS
NET CASH FLOW -14007400 0 0 0 0
FROM INVESTMENT
ACTIVITIES
TOTAL 50987 119258 236571 151021 219782
ADD : OPENING 0 50987 170245 406816 557837

BALANCE
CLOSING BALANCE 50987 170245 406816 557837 777619

CAPITAL BUDGETING AND INVESTMENT DECISIONS
PVCO
Year 0 1 2 3 4 5
Land & Building 12000000 0 0 0 0 0

Plant & Machinery 1902500 0 0 0 0 0
Furniture 104900 0 0 0 0 0
Working 1132611 230585 439990 430156 378668 0
Capital/additional
working capital
yearly outflows 15140011 230585 439990 430156 378668 0
PVF @ 12% 1 0.8929 0.7972 0.7118 0.6355 0.5674
PVCO 15140011 205880 350760 306185 240643 0
total PVCO 16243479
PVCI
Year 0 1 2 3 4 5
EBT 0 -348654 74276 350666 574138 624223

Less : carry forward NIL
of Losses
ADD: DEPRE 0 370865 319510 275430 237574 205054
&Amortisation
Add: Non Cash Exps 825000 660000 660000 550000 550000
Cash Inflows before 0 847211 1053786 1286096 1361712 1379277
Tax
less:Tax 0 0 22951 108356 177409 192885
After Tax Cash Inflows 0 847211 1030834 1177740 1184303 1186392
ADD: Tax Saving in 0 0 98729 85108 73410 63362
Depre &Amortisation
Fixed Assets Released 1348923
(other than Land)
Expected Value of 15000000
Land
Working Capital 2612010

Investment Released
Net Cash Inflows 0 847211 1129563 1262848 1257714 20210686

PVF @ 12% 1 0.8929 0.7972 0.7118 0.6355 0.5674

PVCI 0 756439 900488 898895 799277 11467543
TOTAL PVCI 14822642
NPV In 5 Years At Cost

of Capital 12%
PVCI 14822642
Less : PVCO 16243479
NPV In 5 Years At Cost -1420837
of Capital 12%
PVF @ 10% 1 0.9090 0.8264 0.7513 0.6830 0.6209

PVCI 0 770115 933471 948778 859018 12548815
TOTAL PVCI 16060197
PVCO 15140011 209602 363608 323176 258630 0
TOTAL PVCO 16295027
NPV In 5 Years At Cost -234830
of Capital 10%
DIFFRENCE OF NPV -1186007
DIFFRENCE OF 2.00
RATE
-2.3960
IRR 9.6040
CUMMULATIVE 847211 1976774 3239622 4497336 24708022

CASH FLOW
TOTAL 16619410
CASHOUTFLOW
PAYBACK PERIOD 4.60

YEARS

Note : As the all the machines used in the project are having useful life of 10
years and the business is expected to run its operations smoothly, it is not
feasible to compute NPV for 5 years. However we have endeavored our best
efforts to project the same for 5 years which comes to negative 14 lacs approx
and thus other methods of capital budgeting like IRR and Pay Back Period
will also be effective for 10 years and not feasible for 5 years. However it is
pertinent to note that for 10 years, project will definitely have positive cash
inflows.

BREAK EVEN ANALYSIS

Particulars 2012-13
Sales 8401530
v.c.
DIRECT LABOUR 240000
CONSUMPTION of Raw Material 4235771
Carriage Inward & Other Transportation Charges 184834
Other Charges 46208
Salary & Wages 1368000
Bonus 5600
Power & Fuel 484000
Repairs & Maintenance 19025
Stationary & Printing 6420
Computer Expense 1580
Telephone 6541
Audit Fees 5000
Misc. Expense 7000
Packing Expense 197432
Carriage Outward 56409
Advertisement 238200
Research Outsourcing Cost 5000
Insurance 41333
Electricity (shop) 18920
Cart Rent & Misc. Expenses 240000
TOTAL OF V.C. 7407273
CONTRIBUTION 994257
F.C. 4284890

P/V Ratio = contribution/sales * 100

= 994257/8401530* 100
= 11.83%
Break Even Sales = Fixed Cost/ P/V Ratio

= 4284890 / 11.83
= 362205

RATIO ANALYSIS
 LIQUIDITY RATIOS
1) Current Ratio
Year Ratio
1 3.24
2 2.95
3 2.87
4 2.74
5 2.86
2) Quick Ratio= Current Assets- Stock

Current Liabilities-BOD
Year Ratio
1 1.13
2 0.95
3 1.07
4 1.05
5 1.18

 CAPITAL STRUCTURE/LEVERAGE RATIO
1) Equity Ratio:
Year Ratio
1 77.70
2 83.15
3 88.83
4 94.46
5 100.00
2) Debt Ratio:
Year Ratio
1 22.30
2 16.85
3 11.17
4 5.54
5 -
3) Debt to Equity Ratio
Year Ratio
1 28.69
2 20.26
3 12.58
4 5.86
5 -

 ACTIVITY RATIO
1) Capital Turnover Ratio:
Year Ratio
1 56.89
2 78.77
3 92.25
4 111.47
5 120.47
2) Fixed Assets Turnover Ratio
Year Ratio
1 61.61
2 86.70
3 104.24
4 129.36
5 143.60
3) Working Capital/Turnover Ratio
Year Ratio
1 7.42
2 8.47
3 7.54
4 7.42
5 6.93

 TURNOVER RATIO
1) Inventory Turnover Ratio
Year Ratio
1 22.00
2 13.07
3 12.77
4 12.91
5 12.45
2) Debtors Turnover Ratio:
Year Ratio
1 8.11
2 12.00
3 12.00
4 12.00
5 12.00
3) Creditors Turnover Ratio:
Year Ratio
1 12.00
2 12.00
3 12.00
4 12.00
5 12.00

 PROFITABILITY RATIO
Based on Sales
Net Profit Ratio:
Year Ratio
1 -4.15
2 0.44
3 1.78
4 2.40
5 2.38
Based on Assets/Investment
1) Return on Capital Employed
Year Ratio
1 -2.36
2 0.35
3 1.64
4 2.67
5 2.87

2) Fixed Assets to Partners Capital Ratio
Year Ratio
1 1.19
2 1.09
3 1.00
4 0.91
5 0.84

Conclusion
We would like to conclude our project with sense of having gained enormous
knowledge about ice cream industry.
It is very obvious that ice cream industry will have to face very tough
competition from big market players but we are very much confident that
marketing will be our major weapon to fight with competition.
We have gained in depth knowledge about various management aspects and

learnt how to make true theoretical fundamentals.

Webography
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Feasibility Study of Ice Cream Business in Gujrat

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Feasibility Study of Ice Cream Business in Gujrat

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K. S. School of Business Management 1

What is Feasibility Study?

Technology and system feasibility

K. S. School of Business Management 2

how it satisfies the requirements identified in the analysis phase of system

K. S. School of Business Management 3

K. S. School of Business Management 4

Steps of Feasibility Report

 We did a market survey of 200 consumers & 3 dealers.

K. S. School of Business Management 5

Project report on the feasibility on ice-cream was allotted by the college

The population growth, urbanization, income growth, high income elasticity

K. S. School of Business Management 6

Address : Pavilion Parlour,

Near Keshavbagh Soc.,

Premchandnagar char rasta,

Judges Bunglow Road,

Constitution : Partnership Firm

Status of industry : Manufacturing

Total cost of project: 15140011RS.

Tag line : RUN…SPIN…GET BOWLED…!!!

K. S. School of Business Management 7

K. S. School of Business Management 8

K. S. School of Business Management 9

In 1991, another flavour phenomenon was created chocolate chips

This ice-cream becomes very popular in our world. The consumption

K. S. School of Business Management 10

The first frozen dessert is credited to Emperor Nero of Rome. It was a

The first ice-cream parlor in America opened in Newyork city in 1776.

HISTORY OF ICE-CREAM INDUSTRY

In 2007, the global market of ice-cream was pegged of $61.6 billion in

K. S. School of Business Management 11

K. S. School of Business Management 12

K. S. School of Business Management 13

“This deed of partnership executed on 1st APRIL,2012.”

Name and address of all the partners are as follows:

K. S. School of Business Management 14

5) Bharat Pirabhai Nai

6) Varun Vinodchandra Parmar

7) Dhara Sureshkumar Prajapati

K. S. School of Business Management 15

8) Vaidehi Sunilbhai Raval

9) Khushboo Shirishbhai Shah

10) Nirali V Jalu

11) Aakash Ashokkumar Shah

K. S. School of Business Management 16

 Date Of Commencement: 1st April,2012

K. S. School of Business Management 17

 Sharing Of Profits And Losses:

K. S. School of Business Management 18

 Dispute between partners:

K. S. School of Business Management 19

Dear sir / madam,

Thank you for choosing BANK OF BARODA. We are pleased to

Type of loan: Mortgage loan

Security: 25, judges bungalow, Ahmedabad 380006

K. S. School of Business Management 20

Managers always have to perform their function in the organization.

There are many forces in environment which influents the working of

K. S. School of Business Management 21

K. S. School of Business Management 22

K. S. School of Business Management 23