Air Coolers

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Product Project Report On

Air Coolers
Prepared By

Zala Pratipalsinh
Academic Year

2006 – 2007
Class

T.Y.B.B.A.
Roll No.

41

Seat No. Submitted To

R.P. Bhalodia College Saurashtra University-Rajkot
Guided By

Ms. Rhuta

Declaration
I undersigned Zala Pratipalsinh K., the student of T.Y. B,B.A. here by declares that this project is my own work & has been carried out under the supervision of my guide Ms Rhuta, The work has not been previously submitted to any other university for any examination.

Date: Place: -

Signature: Zala Pratipalsinh K.

Preface
As a management student of the final year of graduation, practical knowledge about the corporate world is no more a desire or a voluntary action to be undertaken but a simple bare necessity. Books don’t suffice the level of knowledge a student is required to possess. A student should have a purview about the real happenings of the corporate structure. To suffice the above mentioned requirements BBA the course has expanded its purview and scope to the world of practical training. Along with the big corporate entities, a student should have knowledge about all the happenings and functioning of the small scale industries, in order to be competent managers or entrepreneurs. As a student of BBA, one should have sufficient and basic knowledge regarding how to start a small business, how to management it, how to make a financial estimates and manage funds and the most important of all how to make a product project report on the basis of which they can apply for a loan from bank. Thus, product project report at this stage makes many things clear in mind of student which helps lot in future therefore it ensures practical exposure in the world of business and entrepreneurship and inculcates necessary skills which are indispensable for any venturous entrepreneur.

Acknowledgement
Successful accomplishment of any work requires co-operation, help and guidance from many people. I had a wonderful opportunity to make a product project report on Air Coolers as a part of my practical training in T.Y. B.B.A. This report would not have been possible without the help of many people whom I would like to acknowledge and thank for their kind co-operation. First of all I thank R.P. Bhalodia College – Rajkot, for giving me opportunity of doing product project report. I specially thank Ms. Rhuta for giving me important guidance for making the project informative and well –constructed. She had spent her precious time for my product project report. It would be impossible for me to complete this project without her important instruction and supervision. I thank All My Friends and Classmates for giving me their important guidance, which was very helpful for me to complete my project in perfect time duration. At last, but not least, I thank MY PARENTS & MY FAMILY MEMBERS to give me every kind of support, and almighty the GOD for helping me out whenever I viewed an obstacles, as they have left no stone unturned and betterment.

Date: Place: - Rajkot

Signature:-

Index
[1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] Introduction Project at Glance Management Set – Up About the Partners Proposed Location Justification Location Market Potential Raw – Materials Names & Address of Suppliers Manufacturing Process Basis & Presumption Implementation Schedule Total Fixed Capital - Land & Building - Machinery & Equipments - Pre – Operative Expenses [14] Total Working Capital - Personnel - Raw Materials - Utilities - Other Contingencies Expenses [15] [16] [17] [18] [19] [20] Total Investments Cost of Production Net Profit per Year Net Profit Ratio Rate of Return Break Even Point

Introduction
As a part of practical training, I have selected to prepare a product project report on Air Coolers. There are mainly two types of coolers; 1. Room Coolers. 2. Desert Coolers. Evaporative type Air Coolers are used in peak summer season for cooling of rooms, offices, hotels etc. In general Air Coolers are used for cooling similar areas and desert coolers are used for larger area. Air Coolers basically consist of body, fan, water pump and control switch etc. An electric fan generally of exhaust fan type is mounted inside a louvered housing and three vertical sides of the housing are fitted with filtered pads which are kept wet with help of water pump. Rotation of fan mounted inside the body draws air from all the three sides through wet pads. Thus, air gets cooled by evaporation of water and which is blown into the room. But this benefits are not enough reasons to pursue an entire project in order to commence such a business, a business person has to check the financial viability of the project also certain questions to be answered like, How much capital is more required? From where this capital will be procured? What will be the cost of production? What will break even point be reached? What would be the profits and return on investments? And the list is endless …………..!!!! A genuine attempt has been made to answer all these questions with almost justification possible in the following pages…….

    

Project at Glance

Name of the Unit: Address For:

Gaytri Air Coolers “Gayatri Air Coolers” Plus Point – 09 Opp. Haribhai Hall, Dr. Yagnik Road, Rajkot – 360001.

Size of Unit: Form of Organisation: Name of Partners:

Small Scale Industry Partenership Firm Miss Pooja J. Vyas Mr. Prakash P. Pathak

Name of the Product: SSI Registration No: Location of the Unit:

Air Coolers Applied For “Gayatri Air Coolers” Shapar Industrial Zone, Gondal Road, National High-Way, Village: Shapar, Dis.:- Rajkot.

Management Set – Up



Both the partners of the firm, viz, Miss Pooja J. Vyas Mr. Prakash P. Pathak They will be the working partners of the firm whose capital contribution and profit sharing ration will be as per the partnership deed.  While, Mr. Prakash P. Pathak on the basis of his business experience and expertise will look after the factory work as well as some of the major office work, Miss Pooja J. Vyas will take care of official work.  All stage and policy decisions shall be taken by the consent of all the parties concerned.

About the Partners

(1) About Mr. Abhijitsinh H. Jadeja … Name: Address: Mr. Abhijitsinh H. Jadeja ‘Osho’ app. 4, Vidhyanagar, Vidhyanagar main road, Rajkot – 360002. Age: Qualification: Experience: 35 Years Master in Science 10 Years Experience in Similar Business Responsibility: Factory Work Supervision and Major Official Work.

(2) About Mr. Zala Pratipalsinh K.

Name: Address:

Mr. Zala Pratipalsinh K. “Ashutosh”, 1, Brahamkunj Soci, B/H Chandrapark, 150 ft Ring Road, Rajkot- 360005

Age: Qualification:

23 Years Master in Business Administration

Experience: Responsibility:

Fresh Official Work.

PROPOSED LOCATION JUSTIFICATION
Factory Location is the decision regarding geographical situation of the plant. This decision is a very crucial one because it is not easily alterable and involves a considerably huge amount of investment. The location of the factory plays a very vital role in success of failure of the business. But this decision is affected by many factors, which are to be kept in mind while selecting the location.

The following site has been selected for work premises:“Gayatri Air Coolers” Shapar Industrial Zone, Gondal Road, National High-Way, Village: Shapar, Dis.:- Rajkot. The correctness of this decision can be justified on the full basis: 1. Industry Choice: Many other industries are situated in this locality, and hence it is a common choice of all the entrepreneurs in this business. 2. Nearness to the Registered Office: As the registered office located at Dr. Yagnik Road, the location of the factory is near to the administrative office and the computer room which is useful in faster communication.

3.

Market Proximity: The location also provides proximity to the market in the sense that a direct sale from factory is also possible.

4.

Transportation Cost: As the materials is loaded from railway boggy and it is sprightly carried to factory such not transportation cost is incurred and so far as finished goods are to be dispatched, Factory owns a delivery van.

5.

Rapid Sales: As the factory location is nearer to industrial area of shaper as well as registered office locations are situated in the heart of the city, sales are bound to increase at unimaginable rates.

Locations
 Registered Office: “Gaytri Air Coolers” Plus Point – 09 Opp. Haribhai Hall, Dr. Yagnik Road, Rajkot – 360001. Factory Office: “Gaytri Air Coolers” Nr. K. K. Chemicals, Shaper.



MARKET POTENTIAL
As the construction of residential accommodation, office complex and the standard of living is increasing day by day, demand for this item is also increasing specially in the sections of society who are not able to afford air conditioned. It is understood that during the period of last 10 years there is a rise in demand for the item @ 60 % p.a. and this trend is likely to continue.

Raw Materials

The main raw materials required for manufacturing Air Cooler are as follows: 1. GI Sheet 2. Cooler Motor 3. Pump Vertical 4. Wire Net 5. Filter Pad 6. Switches 7. Cable ( 3 core ) 8. Hardware Items 9. Consumable Stores

Names and Addresses of Suppliers
[1] M/S. Amar Sons, 57, Rani Jhansi Road, New Delhi. M/S. Prem Engineering Works, Okhala Industrial Estate, New Delhi. M/S. K. G. Khosla & Co. 1, Deshbandhu Gupta Road, New Delhi. M/S. Jaymes Engg. Co. Pvt. Ltd. M-block, Connaught Place, New Delhi. M/S. Toshniwal Brothers Pvt. Ltd. 3E/8, Jhandewalan Extension, New Delhi. M/S. Philips India Ltd., 68, Najafgarh Road, New Delhi. M/S. Balak Ram Banarasi Das & Sons, 37/19, The Mall, Kanpur – 208001. M/S. Bazari Trading Co., 129, Moti Street, Fort, Bombay – 400001 M/S. Maruti Electricals, 123/286 A, Gaddarian Purwa, Fazalganj, Kanpur.

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

Manufacturing Process
[1] GI sheets are purchased from the local market and cut to size, louvers made and bent for making the vertical sides, top cover and water pump. Filter pads are fitted in the 3 vertical sides and electric fan and vertical pump are mounted. On the grill is fixed through which cooled air is brown out. Switches are provided in the front panel, vertical sides, top cover are assembled together with screws/ nut and both assembled cooler is then painted. [2] Assembled cooler is tested as per the requirement of ISO: 2000. The basic requirements of the tests are as follows: a) Insulation Resistance Test :The insulation resistance between all electrical circuits when measures at normal room temperature with measure of 500 V DC should be not less then 1 Mega Ohm. b) High Voltage Test :The electrical insulation all electric circuits shall be able to withstand high voltage tests of 1000 V rms for single phase motors applied for not less then 2 seconds. c) Production Efficientcy Test :Cooling efficiency and air delivery for various capacities of air coolers shall bee within the limits prescribed in relevant ISS. [3] Production Capacity:(a) Quantity 2500 nos. Air Coolers p.a. (b) Value Rs. 1,00,00,000

[4]

Approximate Motive Power Requirement:5KW

[5]

Pollution Control Requirement:No Pollution control certificate is required for registration of the units for manufacture of this item.

[6]

Energy Conservation Need:The design of the fan and electric pump should ensure minimum iron losses and the cooler should be able to withstand cooling efficient and air delivery tests as per ISO: 2000

Basis and Presumption
1. The basis for calculation of production capacity is on single shift basis, working of 25 days per month on 75% efficiency. year. 2. utilisation 3. Rate of interest has been taken as 18% on an average. This however, is likely to vary depending upon the financial outlay and the location of unit. 4. unit. 5. Rental Charges of Rs. 100/- per sq. meter per month has been taken on an average. This figure is likely to vary depending upon the location of the unit. 6. Margin money requirement differs from project to project to project and type of entrepreneurs such women, SC/ST, physically handicapped etc. and the minimum margin money usually asked for by the financial institutions and banks is 15%. Margin money upto 25% in some cases is also asked for. The entrepreneur may check up the margin money requirement form financial institutions for the project. 7. Terms of loan differ from one financial institution to another and in generals minimum growth period is normally 6 months and it could Labour wages have been taken on the basis of minimum applicable. These are likely to change depending upon the location of the BEP for the scheme has been calculated on full capacity Time required for achieving visualized capacity utilisation is assumed as one

be 2 years. Maximum period for repayment of loan is 7 years including growth period. The exact terms and conditions may be found by the entrepreneurs from the concerned financial institutions.

8. scheme.

The costs of machinery and equipment as indicated in the scheme are approximate to those ruling at the time of preparation of the The entrepreneur may check up the exact price for specific make and model of the machine selected.

9.

Non-refundable deposits, cost of preparation of project report etc. may be considered under pre-operative expenses.

10.

The provisions made in other respects viz; raw materials, utilities, overheads etc. Are drawn on the basis of standard variations and output. The costs indicated against each are approximate based on local market conditions and observation. The entrepreneur may find out the exact cost from the concerned sources.

11.

The operative period of this project is estimated to be about 10 years considering technology obsolescence.

Implementaion Schedule
The period required from the time of provisional registration with the concerned District Industries Centre to commercial production is 6 months to 2 years. This includes clearance from concerned agencies including financial institutions etc.

Land & Building
Particulars Land & Building Construction Amt Rs. 30,00,000 45,00,000 75,00,000

Machinery & Equipments

Particulars Guillotine Shearing Machines Power Press 20 tons capacity Screw type break press Air Compressor complete with motor spray Gas welding set Portable electric drill Portable flexible shaft grinder Double ended grinder Merger High voltage test set 3 KV Control panel for measuring power input consisting of ammeter, voltmeter, wattmeter etc. Multimeter Air flow & temperature measuring apparatus Anemometer

Amt Rs. 7,50,000 9,00,000 4,50,000 3,00,000 3,00,000 90,000 90,000 1,20,000 3,00,000 1,65,000 1,80,000 60,000 1,50,000 1,50,000 40,05,000

Pre – Operative Expenses
Particulars Fees for preparation of project report, Deposit to electricity boarded etc. Total Pre – Operative Expenses Amt Rs. 1,00,000 1,00,000

Total Fixed Capital

Particulars Land & Building Machinery and Equipment Pre – Operative Expenses

Amt Rs. 75,00,000 40,05,000 1,00,000 1,16,05,000

Personnel

Designation Works Manager Accountant Skilled fitter Unskilled fitter Store keeper Peon-cum-Watch man Mechanic Skilled fitter

No. 1 1 3 5 2 3 3 2

Salary 15,000 10,000 2,500 1500 1500 1000 5000 5000

Total 15,000 10,000 7,500 7,500 3000 3000 3000 10000 56,000

Perquisites @ 20% of salary Total Personnel

11,200 67,200

Raw Materials

Particulars GI sheet Cooler Motor Pump Vertical Wire Net Filter Pad Switches Cable(3 core) Hardware Items Consumable Stores

Qty 3 tons 100 100 L.S. 200 kg 200 kg 250 mtr L.S. L.S.

Rate 20,000 800 200 16/kg 10/kg 10/mtr

Amount Rs. 60,000 80,000 20,000 17,000 3,200 2,000 2,500 500 3,000 1,88,200

Utilities

Particulars Power (6000 Units) Water Total Utilities

Amt Rs. 75,000 25,000 1,00,000

Other Contingent Expenses

Particulars Postage & Stationary Telephone Consumable stores Repairs & maintenance Transport Charges Advertising and publicity Miscellaneous expenses Total Contingencies

Amt Rs. 10,000 15,000 12,000 4,500 5,000 2,000 4,500 53,000

Total Working Capital

Particulars

Amt Rs.

PARTICULARS Personnel Raw Materials Utilities Other Contingencies Expenses TOTAL RECURRING EXPENSES

AMOUNT 67,000 1,88,200 1,00,000 43,000 3,58,400

TOTAL WORKING CAPITAL := 3,58,400 * 3 =10,75,200 /-

TOTAL INVESTMENTS
FIXED CAPITAL WORKING CAPITAL TOTAL CAPITAL INVESTMENT 80,00,500 10,75,200

90,75,700

COST OF PRODUCTION
PARTICULARS Total recurring cost pre unit Depreciation on building @ 10 % AMOUNT 43,00,800 7,50,000 60,075 17,49,265 68,60,140

Depreciation on machinery and equipment @ 15 % Interest on total capital investment @ 23 % TOTAL COST OF PRODUCTION

TURNOVER
PARTICULARS Desert Coolers Of Assorted Capacity QTY. 2,000 RATE 5,000 AMOUNT 1,00,00,000

 NET PROFIT PER YEAR := Turnover – cost of production = 1,00,00,000 – 68,60,140 = 31,39,860

NET PROFIT PER YEAR = Rs.31,39,860 /-

 NET PROFIT RATIO := Net Profit Per Year x 100 Turnover Per Year = 31,39,860 x 100 -----------------------1,00,00,000 31.40 %

=

NET PROFIT RATIO - 31.40 %

 RATE OF RETURN := Net Profit Per Year x 100 Total Investments = 31,39,860 x 100 90,75,700 = 34.60%

RATE OF RETURN – 34.60%

BREAK EVEN POINT



FIXED COST :[a] Depreciation on Building 7,50,000 [b] Depreciation on Machinery 60,075 [c] Interest on Total Investments 17,49,265 [d] 40 % Salary on Wages 3,22,560 [e] 40 % Other Contingency Expenses 2,06,400 TOTAL FIXED COST NET PROFIT PER YEAR :B.E.P. = Total Fixed Cost x 100 Total Fixed Cost + profit = 30,88,300 x 100 . 30,88,300 + 31,39,860 30,88,30,000 62,28,160 49.58 % 30,88,300



= =

BREAK EVEN POINT - 49.58 %

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