A

PRODUCT PROJECT REPORT

ON

PREPARED BY:
Lopa V. Sakaria

CLASS:
T.Y.B.B.A.

COLLEGE:
Gyanyagna College Of Science & Management,
Rajkot.

ACADEMIC YEAR:
2010 - 2011

Roll no. 67 Seat no.

SUBMATTED TO:
Saurashtra University

GUIDED BY:
Namita Talsania

1
 DECLARATION

I the undersigned Sakaria Lopa V. a student of

T.Y.B.B.A. hereby declare that the project work Presented in the
report is my own work and has been carried out under the kind
supervision of Mrs. NAMITA TALSANIA of Gyanyagn collage
of science and management, Rajkot.

This work has not been submitted to any Other

University for any examination.

Date

Place: RAJKOT
Signature
Sakaria Lopa V.

2
 PREFACE

Preparing and presenting the details regarding

product and submitting it in the form of report has been prepared
under the prescribed format of Saurashtra University, Rajkot.

The subject ‘Entrepreneurship and Management

of Small Business’ has been included in the syllabus of T.Y.B.B.A
with a view to create and develop entrepreneurship skills among as
it reveals entire structure of setting up a fresh industrial unit.

Today in the growth of Indian economy, small

scale industry contributed 40% and more than that. Hence, it is
suggested by the university to undergo a short training to manage
the small unit efficiency. By keeping in mind these views and
objectives. I, LOPA V. SAKARIA, submitting this product project
report.

3
 ACKNOWLEDGEMENT

The project report is an outcome of the efforts of

many people who have helped me throughout in the presentation of
this report and I am indebted to all of them.

First of all, I would like to acknowledge Principal of

the college and concerned professor Mrs. NAMITA TALSANIA
who has inspired me in preparing project report.

I am also highly thankful to all my family members

and friends who provided me the maximum help and motivation.

Date:

Place: RAJKOT Signature

4
 MAIN INDEX

1. Introduction of SSI
2. Project at glance
3. Bio-data of owner or partners
4. Organizational structure
5. Implementation schedule
6. Justification of location
7. Product details
8. Marketing details
9. Financial details
10. Details of Working Capital
11. Total capital investment or cost of project
12. Annual cost of production
13. Sources of finance
14. Fixed assets
15. Average cost of capital
16. Accounting details
17. Disclosure of significant account policies
18. Risk factors
19. Conclusion

5
 1. INTRODUCTION OF SMALL SCALE
INDUSTRIES

As we know that Small Scale Industry is the pillar of

Indian economy. Most of the business is carried out in India is
from small-scale unit. Small Scale Industry provides new materials
to the large scale industries and is partner of their success. The
number of small scale units, the volume range of products
manufactured, the employment provides and value of exports by
these industries have grown substantially during the last decade.
Small scale industries are considered as the base for large
industries. Most of the raw materials are supplied by the small
industries to the large one.

The industry whose investment in fixed assets is less

than one crore is termed as small scale industry. Small scale sector
or industry is the backbone of industrial environment in developing
country. In recent times small scale industries have made
remarkable achievement in the respective fields. So small scale
industries are very necessary in developing countries as well as in
under developed countries.

6
 2. PROJECT AT GLANCE

Name of unit : ‘OM’ Manufacturing

Name of product : GOGGLES

Address of factory : ‘OM’ Manufacturing

National highway 8 – B,
Bhojpara village,
Gondal road, RAJKOT

Form of organization : Partnership

Brand name : SUN-SHINE GOGGLES

Name of partners : Mrs. Lopa V. Sakaria

Mrs. Nupur V. Sakaria

Bankers : Partners capital - 37, 20,000

Bank loan - 24, 80,000

Cost of project : 62, 00,000

Address for communication : OM’ Manufacturing

‘VYANGTESH’ Plaza,
Bhd. Sanjivni hospital,
Kalawad road,
Rajkot

Average cost of capital : 10%

Rate of investment : 17.05%

7
 3. BIODATA OF PARTNERS

 Partner 1

Name of owner : Lopa V. Sakaria

Address of owner : ‘SWARAJ’

Patel nagar,
Kalawad road,
Rajkot

Age : 22 Years

Education qualification : B.B.A.

Financial contribution : 18, 60,000

Share of profit or loss : 50%

Types of responsibility : Marketing and Production

Department

Experience : Fresher

8
  Partner 2

Name of owner : Nupur V. Sakaria

Address of owner : ‘SWARAJ’,

Patel nagar,
Kalawad road,
Rajkot

Age : 37 Years

Education qualification : B.Com. , L.L.B.

Financial contribution : 18, 60,000

Share of profit or loss : 50%

Types of responsibilities : Finance and Personnel

Department

Experience : 5 Years

9
4. ORGANISATIONAL STRUCTURE

Chairman

Manager

Supervisor Accountant Salesman

Skilled Workers Peon\Clerk Watchman

Unskilled Workers

CLERK

10
 5. IMPLIMENTATION SCHEDULE

Small Scale Registration - 1 Month

Construction of Building - 2 ½ Month

Appraisal of Loan - 1 Month

Arrangement of powers - 20 Days

Acquisition & installation of machinery - 40

Days

Appointment of staff & Labors - 1 Month

Trial Production - ½ Months

Total implantations period 8 Months

11
 6. JUSTIFICATION OF LOCATION

The location of a unit is a crucial decision an

entrepreneur has to make. There are various factors affecting such
a decision. The project is set up at Gondal district which is at the
direction of industrial development. Gondal is 20 km away from
Rajkot. There are many factors which are responsible for selection
of this location.

 RAW MATERIALS

The major raw materials required for the unit is Fiber

and glasses. Glasses are easily available in the surrounding
area of Gondal, Bhavnagar, and Rajkot. But fiber is imported
from the outer countries especially from Korea.

 TRANSPORTATION

Being suited in an industrial area it gets the benefits of

various facilities like transportation and telecommunication
at reasonable rates. This will be again beneficial to the
company and reduces the transportation cost to some extent.

 TUFFEN GLASSES

There are only few suppliers who deal with these types
of glasses. It is very difficult to get sufficient supply of these
glasses in near by area. But, Indore is the perfect place for
getting tuffen glasses.

12
 AVAILIBILITY OF LABOUR

Rajkot being one of the leading engineering cities,

technical and skilled personnel will be available. Here,
skilled labors are available in a sufficient quantity in near by
area of Shapar and Gondal.

 WATER AND POWER SUPPLY

The industry as such will not face any difficulty

regarding power supply as it gets a regular power supply
except on Friday when there is a power cut. The industry will
take water from tanks and will have to pay for it.

 LAND

It is almost covering 7000 sq. ft. of the land and it

is available at cheaper rates. This is one of the greatest
advantages. Land plays an important role for the
establishment of the unit. It should be suitable to the product
to be manufactured.

13
14
 7. DETAILS OF PRODUCT
LIST OF RAW-MATERIAL..

 SCREWS

 FIBERS

 GLASSES

 SPRINGS

 METALS

 STEEL

Raw-material is the basic requirement for going

further in production process. Moreover most of the
raw-material is easily available in nearby area. So the
transportation cost can be gradually minimized. Our
raw-material requirements are fully adjusted with
production plan. We have continued contacts with our
suppliers so that our demand for raw-material can be
fulfilled as and when required.

As our godown is near to our unit, timely

movement of raw-material from the place of storage to
the place of manufacturing process.

15
NAME AND ADDRESS OF RAW-MATERIAL SUPPLIERS

RAW SUPPLIERS
MATERIALS
Screws Rajan Iron Pvt. Ltd.,
Gandhi circle,
(Gondal)
Glasses Madhav Glass Sheets,
9, Ankur Industry
Complex,
Behind Field Marshal
Farm,
(Rajkot)
Fiber Rishi Fiber
Manufacturing,
12, Royal Complex,
Dhebar Road,
(Indore)

16
  STORAGE OF RAW-MATERIAL :-

It is very important to store the raw-material at the

correct place in order have fuller utilization of it. We have special
godown facilities for storing our raw-material. It prevents the raw-
material from damages such as fire, theft, rain, etc…The
atmosphere of the storage place should be maintained in such a
way that it does not spoil the raw-material. It should also taken into
consideration that the raw-material is not over stocked or under
stocked.

 PRODUCT USAGE:

As we are living in the modern era, people are becoming more &
more stylish. This is the situation where, all are conscious about
the safety of their eyes from dust, sun-raises, smoke pollution,
etc…so SUN-SHINE GOGGLES gives protection against all this
harzdeous things. There is no limit for the usage of this product.

Especially we have designed funky goggles which catch the

attention from the youngsters. The older generation are also
attracting themselves towards the wearing of goggles. As their eyes
are more sensitive as compared to younger generation, they feel
the more need and usage of goggles.

“USE SUN-SHINE WHICH MAKES YOU SHINE”

17
TYPES OF GOGGLES

 PROFESSIONAL GOGGLES

18
 FUNKY GOGGLES

 GOGGLES FOR GIRLS (G-SERIES)

19
20
 GOGGLES FOR TEENAGERS

 GOGGELS FOR ELDERS/AGED PEOPLE

8. MARKETING DETAILS
21
  MARKET POTENTIAL :-

The demand of goggles varies from person to person.

It is very necessary to define our target group of person and
accordingly the production is undertaken. It is very vital to know
the needs, taste and preference of customers because it changes
frequently according to the change in fashion.

Our product has covered wide area of the market by

attracting the large number of people including teenagers,
youngsters, and elders.

 MARKET RESEARCH :-

Research can be considered as the base for the

market because without research company is not able to know the
current scenario and the position of the respective firm in the
market. So the company is able to take the decisions accordingly.

We are updating our product weekly according to

the change in the fashion and the demand of the customers. It helps
to bring out most competitive products and competitive marketing
plans to sell the products into the market.

 MARKET MEDIA :-

22
 To advertise our product we have different
marketing Medias such as:

 Television

 Radio

 Newspapers

 Hoarding

It is very vital to advertise the product in order to able

the customers to know about your product continuously and the
changes made in them. So we use the above Medias to contact with
our customers.

Today more than about 80% people follow the

advertisement in order to purchase their product. So it is very
necessary to select the right media to advertise. We do need to
expose our product through different Medias it is very known to
everyone but our purpose is to make the customers aware about the
changes that came in our product.

 COMPETITORS :-

23
 In market it is very important to take in consideration
competition prevailing into the market. There are many
competitors in the market as follows….

(1) COOL BLUE GLASSES

(2) FAST TRACK GOGGLES
(3) RAYBON GOGGLES
(4) SHADOW GLASSES

We have continuous contact with our competitors so that

we can easily measure the level of competition. First two
companies are situated in our local area. While the other two are
somewhat far from our plat-location. By having direct contact, the
new strategy of competitors can be easily judge and adopted.

If there is no competitors in market the chances for

company’s growth decreases. Consequently, company can’t raise
its profit margin as well. Through competitors only company is
able to know their strengths and weaknesses.

Competitor’s can be considered as the most effective

point giving influence to the company to produce more and more
with the highest quality. Competitors can be considered as one way
to grow by the company. So one should not ignore the competitors’
in spite it should be considered as a vital point by the company.

 MANUFACTURING PROCESS :-

24
 RAW-MATERIAL

GLASS CUTTING

GLASS SHAPING

FRAME CUTTING

FRAME SHAPING

DESIGNING

COLOURING GLASS

PACKAGING

GODOWN

MARKET

9. FINANCIAL DETAILS

25
A. Details of Fixed Capital

NO PARTICULARS SQUARE RATE TOTAL

FEET COST
1 Land 7000 300 21,00,00
0
2 Building 5000 350 17,50,00
0
TOTAL 38,50,00
0

B. Details of machinery and equipments

N DETAILS QTY TOTAL

O COST
1 Auto Ager machine 1 55,000
2 Automatic Fitting 1 50,000
3 Welding machine 1 3,00,000
4 Photosonix light 1 5,50,000
5 Warmer coil 1 55,000
6 Sun taster 1 50,000
7 Edge polishing 1 70,000
machine
8 Carbide cutter 1 50,000
9 Frame warmer- digital 1 60,000
10 Screw remover device 1 60,000
TOTAL 13,00,000

26
C. Details of other assets

NO. PARTICULARS AMOUN

T
1 Furniture & Fixtures 2,00,000
2 Electric Fittings 50,000
3 Computers 50,000
4 Delivery Van 2,15,000
5 Preliminary Expense 50,000
6 Telephone 30,000
TOTAL OTHER ASSETS 5,95,00
0
D. Total needed fixed capital

NO. PARTICULARS AMOUN

T
1 Fixed capital 38,50,00
0
2 Machinery and 13,00,00
equipments 0
3 Other assets 5,95,000
TOTAL FIXED CAPITAL 5,95,00
0

27
10. DETAILS OF WORKING CAPITAL

A. Details of raw material

PARTICUL RATE REQUIRED REQUIRED

AR (P.U) PER MONTH PER ANUM

NAME OF AMT QTY. AMT QTY AMT

MATERIAL (Rs.) (Rs.) (Rs.)

Screws 3 50,000 1,50,000 6,00,00 18,00,000

0
Glass 2000 50 1,00,00 600 12,00,00
0 0

Fiber 2500 40 1,00,000 480 12,00,000

TOTAL 50,09 3,50,00 60108

0 0 0
42,00,00
0

28
B. Details of wages and salary

NO PARTICULA NO.OF RATE P.M. AMT

R PERSON P.A.

TOP LEVEL
1 Production 1 10,00 10,00 1,20,00
Manager 0 0 0
2 Accountant 1 7,000 7,000 84,000
3 Supervisor 1 5,000 5,000 60,000
4 Skilled Labor 2 3,500 7,000 84,000

MIDDLE
LEVEL
1 Sales 1 4,500 4,500 54,000
Manager
2 Clerk 1 2,200 2,200 26,400
3 Storekeeper 2 3,000 6,000 72,000
4 Semi-skilled 3 3,000 9,000 1,08,00
Labor 0

BOTTOM
LEVEL
1 Unskilled 6 2,500 15,00 1,80,00
0 0
2 Watchmen 2 2,000 4,000 48000
3 Driver 1 2,000 2,000 24,000
4 Peon 1 2,500 2,500 30,000

29
 TOTAL 74,20 8,90,40
0 0

C. Details of utilities

NO. PARTICULARS AMOUNT

PER ANUM
1 Electricity 1,00,000
2 Water 10,000

TOTAL 1,10,000

D. Details of other expenses

NO. PARTICULARS AMOUNT

PER ANUM
1 Postage & Stationary 7,500
2 Advertising & Marketing 30,000
3 Consumable Stores 11,000
4 Legal Expense 18,000
5 Miscellaneous Expense 2,000
6 Repairs & Maintenance 30,000
7 Transport Expense 40,000
8 Audit Fees 25,000
9 Label Expense 12,000
10 Insurance 35,000

30
 11 Cold Storage 5,100

TOTAL OTEHR EXPENSE 2,15,600

E. Total Working Capital

NO PARTICULARS AMOUN
. T
1 Raw material 42,00,00
0
2 Wages and salary 8,90,400
3 Utilities 1,10,000
4. Other Expences 2,15,600

Total working capital 54,16,0

00

31
11. TOTAL CAPITAL INVESTMENT OR
COST OF PROJECT

NO. PARTICULARS AMOUNT

(RS.)
1 Fixed Assets
{ 38,50,000 + 57,45,000
13,00,000 }

51,50,000
(+) Other Assets
5,95,000
2 Working Capital
Raw Material
3,13,500
(1 Month)
Other Expense 4,14,834
17,967
(1 Month)
Staff & Labour
74,200
(1 Month)
Utilities
9,167
(1 Month)
3 Cash in Hand 40,166

32
 TOTAL 62,00,000

12. ANNUAL COST OF PRODUCTION

NO. PARTICULARS AMOUNT

(RS.)
1 Raw Materials 37,62,00
0

2 Staff & Labor 8,90,400

3 Other Expenses 2,15,600

4 Utilities 1,10,000

5 Depreciation 5,79,800

6 Interest on Capital
Owner – 2,97,600
Borrowed - 3,22,400 6,20,000

TOTAL ANNUAL COST OF 61,77,80

PRODUCTION 0

33
 13. SOURCES OF FINANCE

There are mainly 2 types of

sources finance i.e.

Borrowed Capital
Ownership Capital

NO. PARTICULARS AMOUNT

(RS.)
1 Ownership Capital (60%) 37,20,000
2 Borrowed Capital (40%) 24,80,000

TOTAL 62,00,000

Ownership capital

NO. DETAILS AMOUNT

(RS.)
1 Lopa Sakaria (50%) 18,60,000
2 Nupur Sakaria (50%) 18,60,000

34
 TOTAL 37,20,000

Interest on borrowed capital

PARTICULAR LOAN INTERES AMOUN

S AMOUN T RATE T
T (RS.)
RDB( Rajkot 24,80,00 13% 3,22,400
District Bank) 0

14. FIXED ASSETS

Fixed costs are those expenses which

remains same with the production or sale.
Increase or decrease in production or sales does
not make any difference in fixed cost.

NO. PARTICULARS AMOUNT

(RS.)
1 Depreciation 5,79,800
2 Staff & Labour (50%) 4,45,200
3 Other Expenses (30%) 64,680
4 Interest on Borrowed 3,22,400
Capital

TOTAL 17,09,68
0

Fixed Cost (Per Unit) = Fixed cost

35
 Units Produced

= 17,09,680
73,500

= 23.26

15. AVERAGE COST OF CAPITAL

Cost of capital includes both types of

raising capital.

i.e.
Cost of interest on borrowed capital
Cost of interest on ownership capital

Total cost of capital of “OM

MANUFACTURING” is as under:

CAPITAL VALUE RATE INTEREST

(%)

36
 Owners Capital 37,20,000 8% 2,97,600
Borrowed 24,80,000 13% 3,22,400
Capital

Total 6,20,000

6,20,000.
AVERAGE COST OF CAPITAL  X 100
62,00,000
 10%

16. ACCOUNTING DATA

 PROFATABILITY :-

PARTICULARS AMOUNT
(RS.)
Sales (73,500 x 66,15,000
90)
(-) Cost of
production
Raw materials 37,62,00
0
Utilities 1,10,000

37
Other expenses 2,15,600
Staff & Labor 8,90,400
Depreciation 5,79,800 55,57,800

EBIT 10,57,200
(-) Interest
Owner Capital 2,97,600
Borrowed Capital 3,22,400 6,20,000

EBIT 43,72,000
(-) 35 % Tax 1,53,020

2,84,180
(-) 2.5% 7,105
Surcharge
2,77,075
(-) 2 % Education 5,542
Cess
2,71,533

 GROSS PROFIT RATIO :-

GROSS PROFIT
 X 100
SALES
23,71,000
 X 100
66,15,000
 35.84 %

 NET PROFIT RATIO :-

38
 NET PROFIT
 X 100
SALES
23,71,533
 X 100
66,15,000
 4.10 %

 FIXED ASSEST TURNOVER RATIO :-

C.P.U.
PVR  X 100
SALES
29.21
 X 100
90
 32.45%

17. DISCLOSURE OF SIGNIFICANT

ACCOUNT POLICIES

The accounting policies used in this

report is Double Entry System and all the effects of
income and expenditure is given according to double
entry system.

39
 The depreciation is being calculated
according to written down value or reducing balance
method. In this method deprecation changes in every
year.

The taxation value has been counted

according to 35 % as per the accounting books.

18. RISK FACTORS

In any business there are many risks and the company

has to sustain from all the hindrances to survive in the market.
Following are some risk factors which are necessary to taken into
account……….

 CHANGE IN TECHNOLOGY :

40
 Today’s technology is changing day by day very
speedily and rapidly at the same time. So it is vital to cope up with
the technology and provide the customers with he latest one so that
they cannot switch over to the other product.

 PRICING :
Pricing can be considered as the most sensible
factor affecting the company as well to the whole market at the
same time. Increase or decrease in the price of our close substitute
will also affect the pricing of our product.

 TASTE AND PREFERANCE :

Goggles are such a product which needs some
changes in it according to the change in the fashion, taste, and
preference of the customers. It is very important to keep the
customers attracted towards our product and for that it is necessary
to know changing circumstances and taste of the customers.

 COMPTITOR’S STRATEGY :
If the competitors change their marketing
strategy it affects our company’s sales. It is the duty of the manager
to clearly define and analyses the competitor’s strategy so that we
can plan out accordingly and as a result it will increase profit.

19. CONCLUSION

In the product project report of on “OM

MANUFACTURING” I have discussed all financial data
and other relevant information.

The market of “SUN-SHINE GOGGLES”

is expanding its demand for the product day by day.
The returns in this business are also satisfactory.

41
 At last it can be said that future of this
product is very bright.

With the expectation of high

profitability and good market, it is assumed that it
would be the perfect product to be manufactured in
today’s world.

42