A PRODUCT PROJECT REPORT ON

PREPARED BY:

Kadri MohmedFaizal Yusufmiya

Academic Year : 2011-12

GUIDED BY: Prof. Gaurav Mehta

FOR PARTIAL FULFILLMENT OF T.Y.B.B.A SUBMITTED TO SAURASHTRA UNIVERSITY RAJKOT SHRI G. H. GOSRANI COMMERCE (ENG. MED.) AND SHRI D. D. NAGDA B.B.A. COLLEGE JAMNAGAR

DECLARATION
I, the under singed Mr. Kadri Mohmedfaizal Y. the student of T.Y.B.B.A. hereby declare that the project work presented in this report is my own work and has been carried out under the supervision of Prof. Gaurav Mehta of D.D.Nagda B.B.A. College of Jamnagar. This report has not been submitted previously to any other University for examination on any other purpose.

Date: Place: Jamnagar.

Kadri Mohmedfaizal Yusufmiya (T.Y.B.B.A.)

ACKNOWLEDGEMENT
It is really a matter of great pleasure for me preset this creative and practical work. At this stage, report is an important part of learning and every entrepreneur prepares it before starting of actual production. Our college SHRI. D. D. NAGDA B.B.A. COLLEGE deserves special thanks for giving us the opportunity to undertake this project as part of the syllabus of T.Y.B.B.A owe my sincere gratitude of PROF. GAURAV MEHTA without whose guidance and encouragement this project would not have been possible.

Date: Place: Jamnagar.

Kadri Mohmedfaizal Yusufmiya (T.Y.B.B.A.)

PREFACE
Above said proved holds the importance of practice & action. The field of management simultaneously. As developing country, In India economy contribution of Small Scale Industries ads it is supportive to big Industries & makes economy to reach highest of prospering. The subject Entrepreneurships & Management of Small Business is included in T.Y.B.B.A. with a view to develop & implement the knowledge in action. It is essential for BBA student, who wants to become future entrepreneurs, to get practice from the inception. I have prepared my project report on STAR LUGGAGE INDUSTRY I have got a chance to acquire practical knowledge at the time of gathering. The information about this report. provides practical as well as theoretical knowledge

INDEX
Sr. No. 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Particulars
Introduction to S. S. I. Project At a Glance Introduction to the Unit Bio-data of Partner Justification of Location Organization Structure Market Potential Production Details Raw-Material Consumed

Page. No.
7 8 8 9 11 14 15 16 19 19 20 20 21 23 24 25 27 29 30 31 33 34 36 37

Raw-Material Suppliers

Machinery Production Capacity Schedule Manufacturing Process Schedule for fixed Assets Total Fixed Assets Schedule for Required Manpower Working Capital Requirement Total Working Capital Total Cost of the Project Sources of Finance Production Capacity Schedule Profitability Analysis Conclusion Appendix
5

25

Bibliography

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INTRODUCTION OF SSI
In todays era, where global competition exists. There is need for professional management in every sector. So, our Finance Ministers and other economists always said that the S. S. I. is the only base or pillar of the Indian economy. Most of the business carried out in India is a small scale. The S. S. I. is enjoying the success of department of economy because it is the main part of the economy. It also provides the platform and opportunity to
6

the new entrepreneur. It provides employment opportunities, Raw material or inputs to large scale and middle scale industry. S. S. I. is the base for middle scale & large-scale industry. It also gives chance to new entrepreneurs to start the unit with the limited capital and it would be ultimately plays the major role in sharing the development of company. The S. S. I. makes the perfect entrepreneurs throught the experiences and provides high quality of Development towards personality, skills and sense.

PROJECT AT A GLANCE
Name of the unit Form of the unit Size of the unit SSI Registration No. Products Name of Partners : : : : : : STAR Luggage Industry Partnership Firm Small Scale Applied Suitcase, Handbags, Purses Mr. Faizal Kadri Mr. Noman Kadri
7

Registered Office

11, Golden Market Opp. Dr. Rathi Hospital, Summair Club Road, Jamnagar. Sanjari Complex - A/3, Opp. Hotel President, Nr. Town hall, Jamnagar. Plot No.101 - STAR, Keshav industrial Estate, Hirji Mistry Road, Jamnagar. Navanagar Co-operative Bank Ltd.

Showroom Location

Factory Location

Bankers

NAME AND ADDRESS OF PARTNERS

PARTNER ( 1 ): Name Age Education Qualification Address : : : : Mr. Faizal Kadri 21 year M.B.A. & B.B.A. Khojagate, Ali Baug - A,
8

2nd Floor, Flat No.11, Nr. Hajipeer chowk, Jamnagar - 361001. Experience Financial Contribution Responsibility : : : 3 years 50 % Marketing and Personnel Department

PARTNER ( 2 ):

Name Age Education Qualification Address

: : : :

Mr. Noman Kadri 27 years C. A. & B.Com. Khojagate, Ali Baug - B, 3nd Floor, Flat No.15,
9

Nr. Hajipeer chowk, Jamnagar - 361001. Experience Financial Contribution Responsibility : : : 5 years 50 % Production and Financial Department

PROPOSED LOCATION JUSTIFICATION

Location of any unit is the most important and crucial decision because once the building is constructed and the plant is located then it is not easy to move and involves a huge amount of Investment. The Industrial location plays an important role on the success or failure of the industry or unit. But this decision is affected by many factors. Location of a business involves a large, relatively permanent investment. If the site selection is not proper, all the money spent on factory building, machinery, and their installation will go in waste and a great loss. Choice of
10

location is done by considering several factors like, availability of raw material, man power, government policies, and availability of banking, power and transportation facilities.

The main reasons are as follows : As the state Government assisting the industries located in industrial estate by the way of subsidies for the procuring the assets. It will be helpful in reducing the capital expenditure. Exertion from sales tax will be helpful in reducing the price of the product. It is developing industrial area dew to available of the cheap labours from nearby village. Raw material required can be easily transported to the factory due to proximity to available source of raw material. Proximity to the market of city which centrally located in Saurashtra.

1.

Type of industries available :

Intermediary industry which provide Resin, Fibre, leather,

Fabric, Plastic, handles, Zippers, Machinery & other general items.

2.

Infrastructural Facilities : Easy transportation on road of raw materials. Cheap land rates and adequate availability of land.
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 Facilities like water supply, electricity. Availability of both skilled labour from city and unskilled labour from nearby villages. Substantial Market as it is near to city. Subsidy from government for setting up industry in suburban area.

INTRODUCTION TO THE PRODUCT

12

Luggage Industries are working since 2300 years approximately. This Industry had seen many development and deficits in the past. In the Ancient time the Luggage had made from Bamboo and other grasses. Then it moved towards cloth then again moved towards Wood and again moved to Iron and Steel and at last. It was moved towards plastic. Since every human moves here and there and they always moves on they need to carry with him their Daily prior utilities and it is only satisfied with the Luggage carrier. Luggage carrier is divided into different type of Names and Brands. E.g. SUITCASE, BRIEFCASE, HANDBAG, SHOULDER BAG etc. Just for your Information the Total Turnovers of Luggage Industry in India is about Rs. 758 crores. So it is the developing Industry and big Industry. And last but not the least it is a type of thing that a child also knows about it.

ORGANISATION STRUCTURE
PARTNERS

Production Department

Personal Department

Marketing Department

Financial Department

Designer

Peons
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Assistant Manager

Accountant

Supervisor s Workers Quality Controller

Salesman

Clerk

Peon

Workers Storekeeper

MARKET POTENTIAL
As we have seen before, the demand of Luggage Industry will never decrease but it will increase day by day. Market Potential means. If you produce a product and put into market for sale what types of features your product has so that consumer, market can be attracted. In short, what & how is the ability to develop your product. Every entrepreneur should define and decide his products Market Potential.

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 There is Total Rs. 758 crores (approx.) turnover or supply of the Luggage

Industry. There are the Total demand of Luggage Industry is about Rs. 1700 to Rs. 1800 crores and will be near by it. But in Luggage Industry market of India have very large gap between the demand & supply.
In the Luggage Industries of India, there are many Small Scale &

Medium Scale industries and also a Large & Huge Industries.

In this Market, now some foreign companies have come up to India for

capture the market share. In India both types of Prospects are there. One who prefer the quality and second who prefer the cost. Our unit will provides quality product to its Prospects. This Industry is like a open sky, because. It has a widened scope for development. So, our unit will be success in this field by fill the gap and provide the best Quality Product.

PRODUCT DETAILS
Our Products will be made from mixture of high quality plastic and fibre with high density so it will be light weight and very strong. Our product will be as following: SUITCASE: Four sizes of suitcase will be available for the small family.
1. 18
15

2. 24 3. 30 4. 36 PRODUCT FEATURES: Our product has and attractive features which are as follow: 1. STRENGTH: Our Luggage carriers will be made from high density fibre with mixture of High quality plastic so it would make the product unbreakable.
2. SAFETY:

In our luggage carriers we would assure 100% guarantee of safety because it has a secure design and strong frame work so it provides full safety against theft, fire, Hazardous Chemical, Accident etc.

3. LOCKING SYSTEM:

As per the present age there is an increasing fear of theft. Generally in other luggage carrier has two similar locks which are ordinary; But in my product there would be only one central lock with two keys and it would be totally inside the body of the luggage carriers and it would be made by a special orders in Punjab.
4. LIGHT WEIGT:

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In the present age, the human has become very comforts demanding, so we keep an eye on this aspect and we shall make the magically light weight product with the help of research. 5. NEW DESIGN: Though, it is an exceptional case we shall give an extra ordinary design, outlook comfort ness, colour, shape, size and nearly developed exterior appearance.
6. WARRANTY PERIOD:

In the present age, every luggage carrier product gives 1 to 7 years warranty time to customers. But we shall provide the best quality so we also would be give attractive 3 years warranty period.

7. MEDIUM PRICE:

At that time, there are Luggage carriers available from Rs. 100 to Rs. 25000 but it depends upon customers beliefs, need status, loyalty etc. we should provide the medium range for middle class and upper-middle class because it is a Major community.
8. PRODUCT BY CLASS:

Some of Industry emphases on any preferred class luggage carrier like, Suitcase, Briefcase, Hand Bag, Trolley Bag, shoulder Bag, Traveler Bag etc.
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But from the beginning we show provide a product class and depth for the different needs of the different prospectus.

RAW - MATERIAL CONSUMED

Raw material is main part of the finished product. It is always a input for every finished product. There are many types of raw materials in the different proportion.

RAW MATERIAL SUPPLIERS

(1) PLASTIC GRANULES:
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Reliance Industries Limited, Mumbai. (2) RESIN, FIBRE: FINOLEX fibre industry, Baroda.
(3)

LASTIC, RUBBER PIPE FRAME: Sudhir Farma Pvt. Ltd. Ahmedabad.

(4)

REVOLVING WHEELS, HARDWARE Etc: Hatim Bothers, Delhi.

(5)

HANDLE & HANDLE BAR: Prince Plastics Pvt. Ltd., Mumbai.

(6)

SPONGE SHEET, ABSORBS, MATE: VIJAY Handicrafts, Ahmedabad.

(7)

ZIPPER CHAIN: CNA Chains Pvt. Ltd., New Delhi.

MACHINERY

19

If someone wants to manufacture and produce something by the some process, they firstly need machinery because no process can be carried out without proper machine. Every product and process requires different types of machines. All types of Machineries will be purchase from the India or Other Country.

PRODUCTION CAPACITY SCHEDULE

The Installed capacity of our plant will be 80,000 units per annum. But in the first year only 70% of the capacity we can use. And it will be increase by 10% every year. So, we can use total capacity at the end of fourth year.

MANUFACTURING PROCESS
20

STEP: 1

Firstly Plastic granules, resin and fibre will be taken in predecided proportion, and put it in the mixture machine and start the mixture machine and get the proportion at mixture of the plastic granuals Resin and fiber.

STEP: 2
Then that mixture will be fed in the filter of the plastic infection molding machine and the decided die will be fit in the machine and. Machine could be started. After 110 seconds the machine. Automatically open and molded. Suitcase will be polished.

STEP: 3
Then these molded parts will be matched with each other as top & bottom in this stop and fit into each another by the hinges.

STEP: 4
After fitting both the parts, in this step there will be fitting at Tinges Covers, Mate, Zipper, Lastic, Absorbs, Sponge Sheet, Wheels etc.

STEP: 5
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Then the Suitcase will be come to the locking department. There the locks will be fit internally which will work centrally and the handler bar will be fit and go to the quality control department.

STEP: 6
In the quality control department, all the parts of Suitcase will be check and if it feels ok then it will be sent to packing department.

STEP: 7
In the packing department, the stickers and sign of Name Plate will be attired and the warranty card would be attached and pack it proper.

BRAND LOGO

SCHEDULE FOR FIXED ASSETS

22

(A)

Fixed Capital on Land & Building:

Table:-1. Land & Building

No. Particular (1) Land. (2) Building. TOTAL

Area 4,000 sq. mtr. 2,500 sq. mtr.

Rate 100

Amount 4,00,000 10,00,000 14,00,000

(B)

Fixed Capital on Plant & Machinery:

Table:-2. Plant & Machinery

No. (1) (2) (3) (4) (5) (6) (7) (8)

Particular Plastic Injection Molding Machine Hydraulic Mixture Machine Electric Finisher Waste Material Cutter Hand Drill Revate Press Machine Dies (approx.) General tools TOTAL

Quantity 1 1 2 1 2 1 12

Rate 10,00,000 1,00,000 50,000 1,75,000 7,500 20,000 (50,000 to 1,50,000)

Amount 10,00,000 1,00,000 1,00,000 1,75,000 15,000 20,000 12,00,000 25,000 26,35,000

(C)

Other Fixed Assets:

Table:-3. Other Fixed Assets

No. (1) (2) (3)

Particular Furniture & Fixture Computers & Systems Vehicles TOTAL

23

Quantity 4 2

Amount 1,00,000 2,50,000 5,00,000 8,50,000

(D)

Preliminary Expenses :

Table:-4. Preliminary Expenses

No. (1)

Particular Preliminary & Pre-operative expenses TOTAL

Amount 1,30,000 1,30,000

(E)

Total Fixed Assets :

Table:-5.Total Fixed Assets

No. (1) (2) (3) (4)

Particular Land & Building Plant & Machinery Other Fixed Assets Preliminary Expenses TOTAL

Amount 14,00,000 26,35,000 8,50,000 1,30,000 50,15,000

SCHEDULE FOR REQUIRED MANPOWER

(A) TOP LEVEL
Table:-6.Top Level

No. (1) (2) (3)

Particular Manager Accountant Designer TOTAL

No. of Emp. 1 1 1 3

Salary 9,000 4,000 8,000 -

Amount 9,000 4,000 8,000 21,000

24

(B)

MIDDLE LEVEL
Table:-7. Middle Level

No. (1) (2) (3) (4) (5)

Particular Salesman Clerk cum Typist Storekeeper Supervisor Assistant Manager TOTAL

No. of Emp. 3 1 1 2 1 8

Salary 5,000 2,500 1,500 3,500 4,000

Amount 15,000 2,500 1,500 7,000 4,000 30,000

(C)

LOWER LEVEL
Table:-8. Lower Level

No. (1) (2) (3) (4) (5)

Particular Skilled Worker Semiskilled Worker Unskilled Worker Watchman Peon TOTAL

No. of Emp. 5 5 10 01 2 23

Wages 3,600 3,000 2,460 1,600 1,800

Amount 18,000 15,000 24,600 1,600 3,600 62,800

(D)

TOTAL SALARY
Table:-9. Total Salary

No.

Particular

Amount P. M.
25

Amount Per Annum

(1) (2) (3)

Top Level Middle Level Lower Level TOTAL

21,000 30,000 62,800 1,13,800

2,52,000 3,60,000 7,53,600 13,65,600

WORKING CAPITAL REQUIREMENT

(A) Raw Material Requirement
Table:-10. Raw Material Requirement

No.

Particular
Plastic Granules Resin Fibre Hardware Rubber frame Sponge sheet Lastic Wheels Absorber Handle bar & Handle

Rate
Rupees

Monthly
Quantity 5 Tons 1 Tons 3 Tons 0.3 Tons 1,000 Mtr. 500 sq. Mtr. 2,500 Mtr. 1,500 Nos. 0.10 Tons 0.1 Tons
26

Yearly
Quantity 60 Tons 12 Tons 36 Tons 3.6 Tons 12,000 Mtr. 6,000 sq. Mtr. 30,000 Mtr. 18,000 Nos. 1.2Tons 1.2 Tons Amount 16,20,000 84,000 3,24,000 90,000 43,200 1,08,000 51,000 72,000 30,000 36,000

Amount 1,35,000 7,000 27,000 7,500 3,500 9,000 4,250 6,000 2,500 3,000

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

27,000 7,000 9,000 25,000 3.50 18.00 1.70 4.00 25,000 30,000

(11) (12)

Adhesive Extra exp. TOTAL

22,500

0.2 Tons

4,500 30,000 2,39,250

2.4 Tons

54,000 98,000 26,10,200

(B)

UTILITY
Table:-11. Utility

No. 1. 2. Total

Designation Electricity Oil

Amount 15,000 1,32,000 1,60,800

(C)

Other Expenses
Table:-12. Other Expenses

No. (1) (2) (3) (4) (5) (6) (7) (8)

Particular Postage & Stationary. Telephone. Consumable Store. Advertising. Transportation. Maintenance. Insurance. Contingency. TOTAL

Monthly Amount 500 2,000 5,000 2,000 4,000 15,000 2,000 2,000 32,500
27

Yearly Amount 6,000 24,000 60,000 24,000 48,000 1,80,000 24,000 24,000 3,90,000

(D)

Staff & Labour Expenses

Table:- 13. Staff & Labour Expenses

No. (1)

Particular Total Wages & Salaries TOTAL

Monthly Amount 1,13,800 1,13,800

Yearly Amount 13,65,600 13,65,600

(E)

TOTAL WORKING CAPITAL

Table:- 14. Total Working Capital

No. (A) (B) (C) (D)

Particular Raw-Material Requirement. UTILITY. Other Expenses. Staff & Labour Expenses. TOTAL

Monthly Required 2,39,250 32,500 1,13,800 3,85,550

Yearly Required 26,10,200 1,60,800 3,90,000 13,65,600 45,26,600

Generally there is the formality of working capital calculation 3 month because it is standard. Working Capital for 3 Months = = 3, 85,550 3 11, 56,650

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TOTAL COST OF THE PROJECT

Total cost of Project is also called as Total investment and it is getting by Total Fixed Capital + Working Capital for three months.

TOTAL FIXED CAPITAL + Working Capital (3 Months) TOTAL INVESTMENT

= = =

50, 15,000 11, 56,650 38, 58,350

SOURCES OF FINANCE
29

(A)

SOURCE
Table:-15. Sources of Finance

No. (i) (ii)

Particular Owned Capital Barrowed Capital (S.B.I.) TOTAL

Proportion 50% 50% 100%

Amount 20,00,000 20,00,000 40,00,000

(B)

INTEREST
Table:-16. Interest

No. (1) (2)

Particular Interest on owned Capital. Interest on Barrowed Capital. TOTAL

Interest Rate 6% 13%

Amount 1,20,000 2,60,000 3,80,000

(C)

DEPRECIATION
Table:-17. Depreciation

No. (1) (2) (3)

Particular Building. Machinery. Other Assets. TOTAL FIXED COST

Value of Asset 10,00,000 26,35,000 8,50,000

Depreciation Rate 10% 20% 10%

Amount 1,00,000 5,27,000 85,000 7,12,000

(D)

Table:-18. Fixed Cost

No. 1. 2.

Particular Depreciation on Machinery Depreciation on Building

30

Rs. 5,27,000 1,00,000

3. 4. 5. 6.

Depreciation on other assets Interest on borrowed capital 40%of salary & Wages. 40% of other contingent expenses TOTAL

85,000 2,60,000 5,46,000 5,46,000 20,64,000

(E)

COST OF PRODUCTION
Table:-19. Cost of Production

No. 1. 2. 3. 4.

Particular Raw Material Wages & Salary Preliminary Expenses Other Exp. TOTAL

Rs. 26,10,200 13,65,000 1,30,000 3,90,000 44,95,200

(F)

PRODUCTION CAPACITY SCHEDULE

Table: - 20. Production capacity

Sr. No.
1. 2. 3. 4. 5.

Particulars
Weekly sales Monthly sales Yearly sales No. of working days (yearly) No. of working days (monthly)

Total Production
1,167 4,667 56,000

Per Unit Cost

150 150 150

Amount
1,75,000 7,00,000 84,00,000 300

31

25

(G)

PROFITABILITY ANALYSIS
Table:-21. Profitability Analysis

No. 1. 2. 3. 4. 5. 6. 7. 8.

Particular Sales volume Less: cost of prod Gross Profit Less: Depreciation EBIT Lees:Intrest EBT Less: Provision For Tax EAT (NET PROFIT)

Rs. 84,00,000 44,95,200 39,04,800 7,12,000 31,92,800 3,80,000 28,12,800 7,93,840 20,18,960

PROVISION FOR TAXATION

100000 101000 to 150000 @ 10% 151000 to 250000 @ 20% 251000 to ---------- @ 30%

= = = =

NIL 5000 20000 7, 68,840 7, 93,840

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Above estimated Net profit of our industry will be divided among the two partners of this unit.

PARTNER - 1 Mr. Faizal Kadri (Profit sharing ratio is 50%) PARTNER - 2 Mr. Noman Kadri (Profit sharing ratio is 50%) Rs. 10, 09,480 Rs. 10, 09,480

(A) BREAK EVEN ANALYSIS

B.E.P.

Fixed cost Fixed cost + Profit

100

20.64,000 28, 29,000 + 20, 18,960

100

50.55 %

(B) RETURN ON INVESTMENT R.O.I.= E.B.I.T. 100

33

Cost of Project = 31, 92,800 58, 18,150 = 54.88 %

100

(C) NET PROFIT VOLUME NPV = Net Profit Sales = 20, 18,960 84, 00,000 = 24.03%

100

100

CONCLUSION
Todays Prospectus is a very much conscious with comfort and accommodation. The consumption of quality and accommodate product increases day by day as special image. The suitcase is demanded in all over world and the fashion trend change every day in Luggage Carrier. At present take on example of world leading, Luggage Carrier Producing Company SAFARI, V.I.P., AMERICAN TOURISTER etc. have launched the, comfort line Products. So out unit also will be Produce it and it has wide scope & Market.

34

It indicates future expectation and development of the project according to proposed project is considered to have better projects.

APPENDIX
LIST OF TABLES

Table No.
01 02 03 04 05 06

Particulars
Fixed Capital on Land & Building Fixed Capital on Plant & Machinery Other Fixed Assets Preliminary Expenses Total Fixed Assets Top Level

Page. No.
23 23 24 24 24 25

35

07 08 09 10 11 12 13 14 15 16 17 18 19 20 21

Middle Level Lower Level Total Salary Raw Material Requirement Utility Other Expenses Staff & Labour Expenses Total Working Capital Source of Finance Interest Depreciation Fixed Cost Cost of Production Production Capacity Schedule Profitability Analysis

25 26 26 19 28 28 29 29 31 31 31 32 32 33 33

BIBILOGRAPHY
1.

Desai Vasant, Project Management, 2nd Edition, 1999, Himalaya Publishing House.

2.

Kapoor Sudarshan, Marketing Management, 1st Edition, June 1997, S. K. Publisher.

3.

Chhabra T. N., Principles and Practice of Management, Edition 1997, J. C. Kapoor for Dhanpat Rai & Co (P) Ltd. Nai Sarak, Delhi.

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***

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