A

PROJECT PRODUCT 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:
SAURASTRA UNIVERSITY

GUIDED BY:
Mrs. NAMITA TALSANIA
 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.
 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.
 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
 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. Conclusion
 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.
 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%

 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
  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
4. ORGANISATIONAL STRUCTURE

OWNER [DIRECTOR]

MANAGER

SUPERVISOR

EMPLOYEES

CLERK
 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

 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.

 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.
 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 continue 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.
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)
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”

 8. MARKETING DETAILS

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.
 7. FINANCIAL DETAILS

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

NO DETAILS QTY TOTAL

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

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 5,95,000

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 5,95,000
 8. 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 50 600
1,00,000 12,00,000

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

TOTAL 50,090 3,50,000 601080

42,00,000
B. Details of wages and salary

N PARTICULA NO.OF RATE P.M. AMT

O R PERSO P.A.
N

TOP LEVEL
1 Production 1 10,000 10,000 1,20,000
Manager
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 1,08,000
 Labor

BOTTOM
LEVEL
1 Unskilled 6 2,500 15,000 1,80,000
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

TOTAL 74,200 8,90,40

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
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
9. 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

TOTAL 62,00,000

10. 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

11. SOURCES OF FINANCE

There are mainly 2 types of

sources finance i.e.

Borrowed Capital
Ownership Capital

NO. PARTICULARS AMOUNT

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

TOTAL 62,00,000
 OWNERSHIP CAPITAL

NO. DETAILS AMOUNT

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

TOTAL 37,20,000

INTEREST ON BORROWED CAPITAL

PARTICULAR LOAN INTERES AMOUN

S AMOUN T RATE T
T (RS.)
RDB( Rajkot 24,80,0 13% 3,22,40
District 00 0
Bank)

12. 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) = Total

Fixed Cost
Units Produced

= 17,09,680
73,500

= 23.26

13. 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

(%)
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.
AVERAGECOSTOFCAPITAL  X100
62,00,000
 10%

\
 14. 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)
 15. ACCOUNTING DATA

(A) TRADING ACCOUNT

OF “OM MANUFACTURING” FOR THE YEAR

ENDING ON 31ST MARCH 2009

PARTICULAR AMT PARTICULAR AMT

(RS.) (RS.)
To Purchase 37,62,0 By Sales 66,15,0
00 00
To Salary
Skilled 84,000
Workers
Semi-Skilled 1,08,00
Workers 0
Unskilled 1,80,00
Workers 0
To Direct 1,10,00
Expense 0

To Gross 23,71,0
Profit 00
66,15,0 66,15,0
00 00
 (A) PROFIT & LOSS ACCOUNT

OF “OM MANUFACTURING” FOR THE YEAR

ENDING ON 31ST MARCH 2009
PARTICULAR AMT PARTICULA AMT
(RS.) R (RS.)
To salary By Gross 23,71,0
profit 00
Peon 30,000
Production 1,20,00
Manager 0
Accountant 84,000
Supervisor 60,000
Sales 54,000
manager
Clerk 26,400
Storekeeper 72,000
Watchman 48,000
Driver 24,000
To
Depreciatio
n
Land & 1,75,00
Building 0
Plant & 3,25,00
Machinery 0
Computer 30,000
Furniture 24,000
Vehicle 25,800
To Expenses
Postage & 7,500
Stationary
Advertisem 30,000
ent &
Marketing

Consumable 11,000
store
Legal
Expense
Miscellaneo 2,000
us Expense
Repairs & 30,000
Maintenanc
e
Transport 40,000
expense
Audit Fees 25,000
Label 12,000
Expense
Insurance 35,000
Cold 5,100
Storage
To Interest 2,97,60
on 0
Ownership
Capital
 To Interest 3,22,40
on 0
Borrowed
Capital
To 1,53,02
Imcometax 0
To 7,105
Surcharge
To 5,542
Education
Cess
To Net 2,71,53
Profit 3
23,71,0 23,71,0
00 00

(C) BALANCE SHEET

PROJECT OF “OM MANUFACTRING’ FOR THE

YEAR ENDING ON 31ST MARCH, 2009

LIABILITY AMT ASSETS AMT

CAPITAL (RS.) (RS.)
CAPITAL A/c. LAND 21,00,00
Lopa 0
21,44,567 Bldg.
Nupur 42,89,13 17,50,000 15,75,00
21,44,567 4 (-) Dep 0
1,75,000
 P&M
3,00,000 9,75,000
(-) Dep
3,25,000
Comp.
50,000 20,000
(-) Dep
30,000
Bank Loan Furniture
Rajkot 28,02,40 2,00,000 1,76,000
District 0 (-) Dep
Bank 24,000
Vehicle
2,15,000 1,89,200
(-) Dep
25,800
A/c.
Receivables 3,00,000
Om Industries 3,00,000
Raj Traders 5,00,000
Rani Industries 4,16,168
Shrunit
Company
Bank A/c. s
HDFC 3,00,000
ICICI 2,00,000
Cash in Hand 40,166
70,91,53 70,91,53
4 4
16. 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.

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.

17. 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.
 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.