INTRODUCTION

SSI is the pillar of Indian Economic. Most of the business carried out in India is Small Scale Unit. SSI provides raw materials to Large Scale Units & act as partners in their success. The no. of SSI, the volume & range of products manufactured, the employment & value of Exports provided by these industries has grown substantially during the last decade.

Ice-cream industry is the largest industry. Every age group likes it. Ice cream is preferred on each & every joyous occasion. Even without any occasion people love to have ice-cream. Especially Rajkot public even doesnt mind having ice-cream in winter or monsoon seasons.

So, there is more potential for ice- cream industry specially.

PROJECT AT A GLANCE
Name of the Company Location of the unit: : : Delight Ice-cream. Aji industrial Estate, Plot No.7, Bhavnagar road, Rajkot. Registered Office : Applied for

Registration No. Form of Organization Name of the Owner Name of Product Size of unit Source of Finance: Capital Invt in Work. Capital Invt in fixed Capital

: : : : :

Applied for PartnerShip Firm RASHMI SHARMA Ice-cream Small-scale Ownership capital & Borrowed

: :

10392060 3965000

PROMOTERS BACK GROUND

Details of partner

Name of partner Status as a partner Residential address

:- Miss Shweta Parsana :- Working partner :- Silver stone apartment, 212, Second floor, Kalawad road,

Rajkot. Contact No. Educational qualification Partners age Business experience :- 0281-2481080 :- BBA-MBA :- 28 years old :- 3 years

 Details of partner

Name Status Residential address

:- Miss Parita Parsana :- Working partner :- VARAD 1, Tapovan

Society Akshar Road Rajkot. Contact no. Educational qualification Age Business experience :- 9727298431 :- BBA :-20 years old :- 1 year

ORGANISATIONAL STRUCTURE

Proprietorship

Management Representative

Production / Personnel Department

Laboratory Assistant

Marketing Department

Finance

Unskilled labour Semi skilled labour Storekeeper

Salesmen

Accountant

JUSTIFICATION OF LOCATION
Location of any industry plays a dominant role in success or failure of the company. It is very important decision because it affects Cost of Production. It is a large & permanent decision & indirectly affects profitability. Thus we can conclude that as finance is major constraint for SSI, selection of location is of same important too.

This unit is located at Aji Industrial Estate which is best suited to this unit considering all the factors such as Raw Material, Labor, Transport, etc.

Raw Material:
In any product, Raw Material is the basic requirement. Regular surplus of business is very crucial. So regular flow of raw material must be maintained & subsequently production can also be maintained & hence production cost can be minimized. Main raw materials of Ice cream are: Milk Cream Powder Color Essence, etc.

Supply of Labour:
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Cheapest source of Labour is available from Rajkot City. So there are no problems related to Labor for this unit.

Transportation:
Ice-cream is such a low weight product & cannot be delivered through regular vehicles, as it may melt during transit. So for that purpose quick & specific vehicles are required to transport to the destination. The Co. owns its own vehicles & transportation facilities are well available here.

Power supply:
Since the unit is located in an Industrial Estate, there are no issues related to power supply & ample amount of power is available here. No frequent power cuts occur so even the production process is not hampered. Since the unit is located in an Industrial Estate, there are no issues related to power supply & ample amount of power is available here. No frequent power cuts occur so even the production process is not hampered.

PRODUCT DETAILS

Ice-cream industry is the biggest industry in whole world. All age grups have liked it.

Our product is not having any complexity in production. Marketing this product is simple & takes short time. Main thing is that the product has a very good local as well as regional market. In recent times the demand for it is going to increase.

Ice-cream is packed in attractive plastic packs. It is also served in cups, cones and candies. Parcel service is also available in packs of 250ml, 500ml and 1 liter.

SALES FORECAST

Year 1st 2nd 3rd 4th 5th

Units ( per annum ) 195000 200000 205000 210000 210000

Rate ( Std. price ) 50 50 50 55 55

Amount ( Rs. ) 9750000 10000000 10250000 11550000 11550000

RAW MATERIALS (Name & Supplier)

Raw Materials include the raw or pure form of material, which is then chemically of mechanically processed to form semi finished & then finished goods.

Raw materials used for ice cream are as under:

Milk Sugar
9

Powder Cream Essence Color Other materials: Dry Fruits, jelly, Chocolate Chips, etc.

Name of Suppliers:

1)

Gujarat Stores Para Bazaar, Rajkot.

10

All the ingredients are purchased from here except Milk & Cream. Milk used is of Gopal Brand & Cream is produced in the unit itself.

11

Sugar Milk

Cream
12

13

Dry fruits

Jelly

Chocolate Chips

MACHINES (NAME & SUPPLIERS)

Machines help in getting the final product out quickly & perfectly. Work done by machines is accurate & speedy which reduces down the wastage of time & Labour.
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Machines, which help in the manufacturing of ice cream, are:

Freezer Homonizer Vatezine Boiler Deep Freezer/Cold Storage

Name of Suppliers:

1)

M/s Light Co. (India) Pvt.Ltd. Karingi House 159, P.M. Road, Bombay
15

M/s Arun Engineering Works Leach Welenney Compound, 61, Off Haines Road, Bombay

M/s Rita Agencies Jamni Building, Madras

M/s Asia Refrigerator Co. 25, Haines Road, Bangalore 25

MANUFACTURING PROCESS
In the manufacturing of ice cream, the 1st and basic step is boiling the milk. Once the milk gets boiled at a certain temperature it is then set to cool. After cooling milk, its thickness is measured in the Homonizer. After testing its thickness it is again set to chill in Vatezine.

16

Once it reaches at a certain degree of temperature it is poured into ice cream maker. There it gets mixed with cream; sugar & powder along with required finally it is send to the deep freezer to set it thoroughly.

This is how ice-cream gets ready & it is cubed into the packs required & Packaging is done.

PRODUCTION CAPACITY SCHEDULE

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SR.NO

PARTICULARS

INSTALLED CAPACITY 100 1000 25 days

UTILIZED CAPACITY 65% 650 kgs 25 days

A B C

Capacity in % Daily production No. of working days (in month) Monthly production No. of working days (in year) Yearly production

25000kgs

16250 kgs

300 days

300 days

300000 kgs

195000kgs

FIXED ASSETS
18

PARTICULARS Land Building TOTAL

AREA 1000 sq.mt 5500 sq.mt.

RATE 700 300

AMOUNT 700000 1650000 2350000

(A)

LAND AND BUILDING

(B)PLANT AND MACHINERY PARTICULARS Deep freezer Freezer Homonizer Cold storage Vatezine Boiler TOTAL QTY. 1 1 1 2 1 1 RATE 30000 200000 100000 350000 100000 70000 AMOUNT 30000 200000 100000 700000 100000 70000 1200000

(C)OTHER ASSETS
19

PARTICULARS Furniture Delivery van Laptop Preliminary exp.

QTY

RATE 95000

AMOUNT 95000 300000 50000 20000

TOTAL

1 1

300000 50000 20000

445000 20000

TOTAL FIXED ASSTES

20

PARTICULARS Land and building Plant and machinery Other assets Preliminary expenses TOTAL

AMOUNT 2350000 1200000 445000 20000 4015000

Working capital requirement

[A] Raw Materials
Rate Particulars
1] milk 2] sugar

Per day Qty. 300 30 Amt. 5400 900

Per month Qty. 7500 750 Amt.

Per year Qty. Amt.

(per unit) 18 ltr 30 kg

135000 90000 1620000 22500 9000 270000

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3] powder 4] cream 5] essence 6] color 7] other material TOTAL

100 kg 100 kg 400 kg 1000kg 300kg

31 48 0.325 0.13 15

3100 4800 130 130 4500 18960

775 1200 8.125 3.25 375

77500

9300

930000

120000 14400 1440000 3250 3250 112500 474000 97.5 39 4500 39000 39000 1350000 5688000

[B] Staff and Labor Factory Staff

Lower Level Particulars No. of persons 8 1 Rate (Rs.) 1500 2000
22

Amount (monthly) 12000 2000

Amount (yearly) 144000 24000

Unskilled labor Peon

Watchman TOTAL

1200 4700

1200 15200

14400 182400

Middle Level Particulars No. of persons 1 2 Rate (Rs.) 5000 3000 8000 Amount (monthly) 5000 6000 11000 Amount (yearly) 60000 72000 132000

Supervisor Skilled labor TOTAL

Administrative Staff
Top Level Particulars No. of persons 1 1 Rate (Rs.) 10000 2000 12000 Amount (monthly) 10000 2000 12000 Amount (yearly) 120000 24000 144000

Manager Accountant TOTAL

Total Salary paid

23

Sr. No.

Particulars

Amount (Rs.) (monthly)

Amount (Rs.) (yearly) 314400 144000 458400

1] 2]

Factory Staff Administrative Staff TOTAL

26200 12000 38200

C] OTHER EXPENSES AND UTILITES

PARTICULARS

AMOUNT (PER MONTH) 1000

AMOUNT (PER ANNUM) 12000

Repairing and maintenance Packing Stationery & printing Gas (freezer) Transport Water Advertisement

2000 1000 1000 6000 1250 1500

24000 12000 12000 72000 15000 18000

24

Electricity Miscellaneous exp. Telephone bill Insurance TOTAL

10000 1000 2000 2000 28750

120000 12000 24000 24000 345000

TOTAL WORKING CAPITAL REQUIREMENT

PARTICULARS Raw materials Staff and labor salary Other expenses and utilities TOTAL MONTHLY 474000 43930 28750 YEARLY 5688000 527160 345000

546680

6560160

25

TOTAL PROJECT COST

PARTICULAR Fixed assets Working capital (3 MONTHS) TOTAL AMOUNT 4015000 1640040 5655040

26

SOURCES OF FINANCE
PARTICULARS Own capital Borrowed capital TOTAL %OF TOTAL CAPITAL 40% 60% AMOUNT 2262016 3393024 5655040

DEPRECIATION (1ST YEAR)

SR.NO. PARTICULARS 1 2 3 Building Machinery Laptop

COST 1650000 1200000 50000

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DEP.% 15% 20% 20%

DEP CLOSING AMOUNT BALANCE 247500 240000 10000 1402500 960000 40000

4 5

Furniture Delivery van

95000 300000

10% 20%

9500 60000

85500 240000

DEPRECIATION (2nd YEAR)

SR.NO.

PARTICULARS

Opening balance 1402500 960000 40000 85500 240000

DEP AMOUNT 247500 240000 10000 9500 60000

CLOSING BALANCE 1155000 720000 30000 76000 180000

1 2 3 4 5

Building Machinery Laptop Furniture Delivery van

DEPRECIATION (3rd YEAR)

SR.NO. 1

PARTICULARS Building

Opening balance 1155000

DEP AMOUNT 247500

CLOSING BALANCE 907500

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2 3 4 5

Machinery Laptop Furniture Delivery van

720000 30000 76000 180000

240000 10000 9500 60000

480000 20000 66500 120000

TOTAL DEPRECIATION =567000

LOAN REPAYMENT SCHEDULE

PERIOD OPENING BALANCE 3393024 INSTALLMENT CLOSING BALANCE 2827520 INTEREST

1ST year

565504

441093

29

2ND year 3RD year 4TH year 5TH year 6TH year

2827520 2262016 1696512 1131008 565504

565504 565504 565504 565504 565504

2262016 1696512 1131008 565504 -

367578 294062 220547 147031 -

ANNUAL COST OF PRODUCTION

PARTICULARS Raw material Staff and labor salary Depreciation Interest on capital Other expenses and utilities AMOUNT 5688000 527160 567000 622054 345000

FIXED AND VARIABLE COST SCHEDULE

Schedule for Fixed Cost

SR. NO.

PARTICULARS

AMOUNT

30

1 2 3 4 5 TOTAL

Depreciation Int. on capital Salary Other expenses and utilities Preliminary exp.

567000 622054 527160 172500 20000 1908714

Fixed cost per unit. :

=

Total fixed cost / No. of units 1908714 /195000 9.79Rs.

= =

SCHEDULE OF VARIABLE COST

SR.NO

PARTICULARS

AMOUNT

31

1 2 TOTAL

Raw material Other expenses

5688000 172500 5860500

Variable cost per kg. : = = = Total variable cost / No. of units 5860500 / 195000 30.05 /- Rs.

COST PER KILOGRAM : = = = Fixed Cost + Variable Cost 9.79+30.05 39.84 /- Rs.

COST PER 100 GRAMS : = = = Cost per kg / 10 39.84 / 10 3.984 =4/- Rs.

B.E.P. ANALYSIS
(i)

Selling Price Variable Cost

32

50.00 30.05

Contribution Fixed Cost Profit

19.95 9.79 10.16

Particulars Sales (50 * 195000) Less : Variable Cost Contribution Less : Fixed Cost Profit

Amount 9750000 5860500 3889500 1908714 1980786

( ii )

B.E.P. ( IN UNITS ) : = Total Fixed cost Contribution per unit = 1908714 19.95 = = 95674.88 95675 units

( iii )

B.E.P. ( IN RS. ) :

P.V. Ratio =

Contribution * 100 Sales

3889500 * 100
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9750000 = 39.89 %

B.E.P. (in Rs.) = Total Fixed cost P.V. Ratio = 1908714 39.89 % = 4784944 /- Rs.

( iv )

B.E.P. ( IN % ) :

Total Fixed Cost * Utilized Capacity Total Contribution

1908714 * 65 3889500

31.89 %

AVERAGE COST OF CAPITAL

CAPITAL Owned (2262016) RATE 8% INTEREST 180961.28

34

Borrowed (3393024) TOTAL

13%

441093.12 622054.4

Average Cost of Capital :

Total Interest * 100 Total Capital

622054.4 * 100 5655040

11 %

SCHEDULE FOR FACTORY OVERHEADS

PARTICULARS 1ST YEAR 2ND YEAR 3RD YEAR

35

Dep. On building Dep. On. Machinery Salaries Other exp.&utilities

247500 240000

247500 240000

247500 240000

132000 345000

132000 345000

132000 345000

TOTAL

964500

964500

964500

SCHEDULE FOR ADMINISTRATIVE OVERHEAD

36

PARTICULARS Int.on capital Salary to admin staff Dep.on laptop Dep.on other assets

1ST YEAR 180961 144000

2ND YEAR 180961 144000

3RD YEAR 180961 144000

10000 9500

10000 9500

10000 9500

Preliminary exp. TOTAL

20000 364461

20000 364461

20000 364461

SCHEDULE FOR SELLING AND DISTRIBUTION

PARTICULARS Dep.on delivery van TOTAL 1ST YEAR 60000 2ND YEAR 60000 3RD YEAR 60000

60000

60000

60000

OPERATING STATEMENT
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PARTICULARS SALES(A) Cost of operation: Raw materials Direct wages TOTAL COST OF OPERATION(B) Gross profit(AB) INDIRECT EXPENSES Total factory cost

1ST YEAR 9750000

2ND YEAR 10000000

3RD YEAR 10250000

5688000 182400 5870400

5834000 182400 6016400

5980000 182400 6162400

3879600

3983600

4087600

964500

991038

1044115

Total admin cost Total selling cost Total indirect expenses EBIT (-)int. on cap. EBT (-)Tax @30% Net earnings

364461 60000 1388961 2490639 441093 2049546 1434682 614864

364461 60000 1415499 2568101 367578 2200523 660157 1540366

364461 60000 1468576 2619024 294062 2324962 697489 1627473

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PROJECTED COST SHEET(FIRST YEAR)

Amt. Particulars Amt. Amt. ( per kg. ) 130.00 130.00 022.20 152.20

Opening stock of raw materials Add : purchase of raw materials Less : closing stock of raw material COST OF RAW MATERIAL Add : Direct Expenses PRIME COST Add : Factory Cost Depreciation On building Depreciation on machineries Salaries Utilities (50% fixed) (50% variable) 0

5688000 5688000 182400 5870400

247500 240000 13200 172500 172500 964500 125.31 277.51

FACTORY COST

6834900

39

Add : Administrative overheads Interest on owned capital Salary to administrative staff Administrative expenses :Preliminary expenses w/o Depreciation on computer Depreciation on other assets

180961 144000

5000 10000 9500 349461 066.96 344.48 344.48

ADMINISTRATIVE COST Add : Opening stock of finished Less : Closing stock of finished COST OF PRODUCTION

7184361 7184361

Add : Selling and distribution overhead Depreciation on delivery van

60000

60000 COST OF SALES 7244361

009.38 353.85

SALES OF FINISHED GOODS

9750000

459.00

PROFI T

2505639

105.15

40

PROJECTED TRADING A/C(FIRST YEAR)

PARTICULARS To purchase To direct wages

AMOUNT 5688000 182400

PARTICULARS By sales

AMOUNT 9750000

To Gross profit

3879600

TOTAL

9750000

TOTAL

9750000

41

PROJECTED PROFIT &LOSS A/C(FIRST YEAR)

PARTICULARS To salary To dep. To int. on borrowed cap. To loan installment To income tax To indirect expenses Repairing Packing Stationery Gas Transport Water Advertisement Electricity Mis. Exp. Telephone bill Insurance 12000 24000 12000 12000 72000 15000 18000 120000 12000 24000 24000 AMOUNT 276000 567000 441093 565504 614864 PARTICULARS By gross profit AMOUNT 3879600

Preliminary exp w/off

5000
42

NET PROFIT

1065139

TOTAL

3879600

TOTAL

3879600

43

PROJECTED BALANCE SHEET(FIRST YEAR)

LIABILITIES Capital amount AMOUNT ASSETS Fixed assets AMOUNT

Capital

2262016

land

700000

(+)profit

1065139

Building (-)dep.

1650000 247500 1402500

(+)int.

180961

3508116 P&M 1200000 240000 960000

Bank loan

(-)dep.

IDBI

3393024

Furniture (-)dep.

95000 9500 85500

(-)int.

441093

2951931 Vehicle (-)dep. 300000 60000 240000

Laptop (-)dep.

50000 10000 40000

44

debtors Shiv Patel dishaw 529973 420000 277074

Bank Cash Preliminary exp.

950000 840000 15000

TOTAL

6460047

TOTAL

6460047

45

PROJECTED COST SHEET(SECOND YEAR)

Amt. Particulars Amt. Amt. ( per kg. ) 130.00 6563077 182400 6745477 130.00 022.20 152.20

Opening stock of raw materials Add : purchase of raw materials Less : closing stock of raw material COST OF RAW MATERIAL Add : Direct Expenses PRIME COST Add : Factory Cost Depreciation On building Depreciation on machineries Salaries Utilities (50% fixed) (50% variable) 0

6563077

247500 240000 13200 172500 199038 991038 125.31 277.51

FACTORY COST

7736515

46

Add : Administrative overheads Interest on owned capital Salary to administrative staff Administrative expenses :Preliminary expenses w/o Depreciation on computer Depreciation on other assets

180961 144000

5000 10000 9500 349461 066.96 344.48 344.48

ADMINISTRATIVE COST Add : Opening stock of finished Less : Closing stock of finished COST OF PRODUCTION

8085976 8085976

Add : Selling and distribution overhead Depreciation on delivery van

60000

60000 COST OF SALES 8145976

009.38 353.85

SALES OF FINISHED GOODS

10000000

459.00

PROFI T

1854024

105.15

47

PROJECTED TRADING A/C(SECOND YEAR)

PARTICULARS AMOUNT PARTICULARS AMOUNT

To purchase To direct wages

5834000 182400

By sales

10000000

To Gross profit

3983600

TOTAL

10000000

TOTAL

10000000

48

PROJECTED PROFIT &LOSS A/C(SECOND YEAR)

PARTICULARS To salary To dep. To int. on borrowed cap. To loan installment To income tax To indirect expenses Repairing Packing Stationery Gas Transport Water Advertisement Electricity Mis. Exp. Telephone bill Insurance 15938 24000 16600 12500 72000 18500 20000 120000 17000 29000 26000 AMOUNT 276000 567000 367578 565504 660157 PARTICULARS By gross profit AMOUNT 3983600

49

Preliminary exp w/off

5000

NET PROFIT

1170823

TOTAL

3983600

TOTAL

3983600

50

PROJECTED BALANCE SHEET(SECOND YEAR)

LIABILITIES Capital amount AMOUNT ASSETS Fixed assets AMOUNT

Capital

3513116

land

700000

(+)profit

1170823

Building (-)dep.

1402500 247500 1155000

(+)int.

180961

4864900 P&M 960000 240000 720000

Bank loan

(-)dep.

IDBI

2827520

Furniture (-)dep.

85500 9500 76000

(-)int.

367578 2459942 Vehicle (-)dep. 240000 60000 180000

Laptop (-)dep.

40000 10000 30000

debtors

51

Shiv Patel dishaw

875000 900000 600000

Bank Cash Preliminary exp.

1280000 793842 10000

TOTAL

7324842

TOTAL

7324842

52

PROJECTED COST SHEET(THIRD YEAR)

Amt. Particulars Amt. Amt. ( per kg. ) 130.00 8313231 182400 8495631 130.00 022.20 152.20

Opening stock of raw materials Add : purchase of raw materials Less : closing stock of raw material COST OF RAW MATERIAL Add : Direct Expenses PRIME COST Add : Factory Cost Depreciation On building Depreciation on machineries Salaries Utilities (50% fixed) (50% variable) 0

8313231

247500 240000 13200 172500 252115 1044115 125.31 277.51

FACTORY COST 6

953974

53

Add : Administrative overheads Interest on owned capital Salary to administrative staff Administrative expenses :Preliminary expenses w/o Depreciation on computer Depreciation on other assets

180961 144000

5000 10000 9500 349461 066.96 344.48 344.48

ADMINISTRATIVE COST Add : Opening stock of finished Less : Closing stock of finished COST OF PRODUCTION

9889207 9889207

Add : Selling and distribution overhead Depreciation on delivery van

60000

60000 COST OF SALES 9949207

009.38 353.85

SALES OF FINISHED GOODS

10250000

459.00

PROFI T

300793

105.15

54

PROJECTED TRADING A/C(THIRD YEAR)

PARTICULARS AMOUNT PARTICULARS AMOUNT

To purchase To direct wages

5980000 182400

By sales

10250000

To Gross profit

4087600

TOTAL

10250000

TOTAL

10250000

55

PROJECTED PROFIT &LOSS A/C(THIRD YEAR)

PARTICULARS To salary To dep. To int. on borrowed cap. To loan installment To income tax To indirect expenses Repairing Packing Stationery Gas Transport Water Advertisement Electricity Mis. Exp. Telephone bill Insurance 17000 20400 15715 12000 72000 19000 24000 180000 16000 24500 24000 AMOUNT 276000 567000 294062 565504 721373 PARTICULARS By gross profit AMOUNT 4087600

56

Preliminary exp w/off

5000

NET PROFIT

1234046

TOTAL

4087600

TOTAL

4087600

57

PROJECTED BALANCE SHEET(THIRD YEAR)

LIABILITIES Capital amount AMOUNT ASSETS Fixed assets AMOUNT

Capital

4869900

land

700000

(+)profit

1234046

Building (-)dep.

1155000 247500 907500

(+)int.

180961

6284907 P&M 720000 240000 480000

Bank loan

(-)dep.

IDBI

2262016

Furniture (-)dep.

76000 9500 66500

(-)int.

294062 1967954 Vehicle (-)dep. 180000 60000 120000

Laptop (-)dep.

30000 10000 20000

debtors

58

Shiv Patel dishaw

1440000 1250000 1390000

Bank Cash Preliminary exp.

1080000 783861 5000

TOTAL

8252861

TOTAL

8252861

DISCLOSURE OF SIGNIFICANT ACCOUNTING POLICIES

The basis for calculation of production capacity is considered normally on 65 % utilization.

Straight line method of depreciation is adopted.

Salaries of the employees are assumed to be constant in all the three years.

59

There is no closing stock and opening stock as whatever produced is sold.

Suppliers allow us the credit of 1 week or sometimes differ on the amount

FUTURE PROSPECTUS
Today, Ice-cream proved its significance that it is a part of our diet. As there is only one unit in Saurashtra producing Ice-cream, we have a wider scope. Very first, our main aim is to take over the market of Saurashtra. The unit within 2 years will have an upper hand over the competitors due to better marketing, personnel, finance and production. We utilize maximum of we have, our plan is to increase the capacity upto 90%. And also we are changes the flavours of the Ice cream that people wants. We introduce some new flavours within the end of next year. Very Due to high profit volume Ratio, we are able to repay the loan . without any problem.

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BIBLOGRAPHY
Marketing Management- Philip Kotler

Project Management- Vasant Desai

61