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A

PRODUCT PROJECT REPORT

ON

PREPARED BY:

Kadri MohmedFaizal YusufmiyaAcademic Year : 2011-12

GUIDED BY:Prof. Gaurav Mehta

FOR PARTIAL FULFILLMENT OF T.Y.B.B.A

SUBMITTED TOSAURASHTRA UNIVERSITY

RAJKOT

SHRI G. H. GOSRANI COMMERCE (ENG. MED.) ANDSHRI D. D. NAGDA B.B.A. COLLEGE

JAMNAGAR

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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.)

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PREFACE

Above said proved holds the importance of practice & action. The field of

management provides practical as well as theoretical knowledge

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.

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INDEX

Sr.

No. ParticularsPage.

No.01 Introduction to S. S. I. 702 Project At a Glance 803 Introduction to the Unit 804 Bio-data of Partner 905 Justification of Location 11

06 Organization Structure 1407 Market Potential 1508 Production Details 1609 Raw-Material Consumed 1910 Raw-Material Suppliers 1911 Machinery 20

12

Production Capacity Schedule 2013 Manufacturing Process 2114 Schedule for fixed Assets 2315 Total Fixed Assets 24

16 Schedule for Required Manpower 2517 Working Capital Requirement 27

18

Total Working Capital 2919 Total Cost of the Project 3020 Sources of Finance 3121 Production Capacity Schedule 3322 Profitability Analysis 3423 Conclusion 36

24

Appendix 375

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25 Bibliography 38

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

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Registered Office : 11, Golden MarketOpp. Dr. Rathi Hospital,Summair Club Road,Jamnagar.

Showroom Location : Sanjari Complex - A/3,Opp. Hotel President,Nr. Town hall,Jamnagar.

Factory Location : Plot No.101 - STAR,Keshav industrial Estate,Hirji Mistry Road,Jamnagar.

Bankers : Navanagar Co-operative Bank Ltd.

NAME AND ADDRESS OF PARTNERS

PARTNER ( 1 ):

Name : Mr. Faizal Kadri

Age : 21 year

Education Qualification : M.B.A. & B.B.A.

Address : Khojagate, Ali Baug - A,

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2nd Floor, Flat No.11,

Nr. Hajipeer chowk,

Jamnagar - 361001.

Experience : 3 years

Financial Contribution : 50 %

Responsibility : Marketing and Personnel Department

PARTNER ( 2 ):

Name : Mr. Noman Kadri

Age : 27 years

Education Qualification : C. A. & B.Com.

Address : Khojagate, Ali Baug - B,

3nd

Floor, Flat No.15,

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Nr. Hajipeer chowk,

Jamnagar - 361001.

Experience : 5 years

Financial Contribution : 50 %

Responsibility : 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

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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 generalitems.

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

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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

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ProductionDepartment

PersonalDepartment

MarketingDepartment

FinancialDepartment

Designer Peons AccountantAssistantManager

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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. 1815

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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. weshould 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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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

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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 moldingmachine 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: 521

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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 beattired and the warranty card would be attached and pack it proper.

BRAND LOGO

SCHEDULE FOR FIXED ASSETS

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(D) Preliminary Expenses :

Table:-4. Preliminary Expenses

No. Particular Amount(1) Preliminary & Pre-operative expenses 1,30,000

TOTAL 1,30,000

(E) Total Fixed Assets :

Table:-5.Total Fixed Assets

No. Particular Amount(1) Land & Building 14,00,000(2) Plant & Machinery 26,35,000(3) Other Fixed Assets 8,50,000(4) Preliminary Expenses 1,30,000

TOTAL 50,15,000

SCHEDULE FOR REQUIRED MANPOWER

(A) TOP LEVEL

Table:-6.Top LevelNo. Particular No. of Emp. Salary Amount(1) Manager 1 9,000 9,000(2) Accountant 1 4,000 4,000(3) Designer 1 8,000 8,000

TOTAL 3 - 21,000

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(B) MIDDLE LEVEL

Table:-7. Middle Level

No. Particular No. of Emp. Salary Amount(1) Salesman 3 5,000 15,000(2) Clerk cum Typist 1 2,500 2,500(3) Storekeeper 1 1,500 1,500(4) Supervisor 2 3,500 7,000(5) Assistant Manager 1 4,000 4,000

TOTAL 8 30,000

(C) LOWER LEVEL

Table:-8. Lower Level

No. Particular No. of Emp. Wages Amount(1) Skilled Worker 5 3,600 18,000(2) Semiskilled Worker 5 3,000 15,000(3) Unskilled Worker 10 2,460 24,600(4) Watchman 01 1,600 1,600(5) Peon 2 1,800 3,600

TOTAL 23 62,800

(D) TOTAL SALARY

Table:-9. Total Salary

No. Particular Amount P. M. Amount Per Annum

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(1) Top Level 21,000 2,52,000(2) Middle Level 30,000 3,60,000(3) Lower Level 62,800 7,53,600

TOTAL 1,13,800 13,65,600

WORKING CAPITAL REQUIREMENT

(A) Raw Material Requirement

Table:-10. Raw Material Requirement

No. Particular Rate Monthly Yearly

Rupees Quantity Amount Quantity Amount

(1)Plastic

Granules27,000 5 Tons 1,35,000 60 Tons 16,20,000

(2) Resin 7,000 1 Tons 7,000 12 Tons 84,000(3) Fibre 9,000 3 Tons 27,000 36 Tons 3,24,000(4) Hardware 25,000 0.3 Tons 7,500 3.6 Tons 90,000

(5) Rubber frame 3.50 1,000 Mtr. 3,50012,000

Mtr.43,200

(6) Sponge sheet 18.00500 sq.

Mtr.9,000

6,000

sq. Mtr.1,08,000

(7) Lastic 1.70 2,500 Mtr. 4,25030,000

Mtr.51,000

(8) Wheels 4.001,500

Nos.6,000

18,000

Nos.72,000

(9) Absorber 25,000 0.10 Tons 2,500 1.2Tons 30,000

(10)Handle bar &

Handle 30,000 0.1 Tons 3,000 1.2 Tons 36,000

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(11) Adhesive 22,500 0.2 Tons 4,500 2.4 Tons 54,000(12) Extra exp. 30,000 98,000

TOTAL 2,39,250 26,10,200

(B) UTILITY

Table:-11. Utility

(C) Other Expenses

Table:-12. Other Expenses

No. Particular Monthly Amount Yearly Amount(1) Postage & Stationary. 500 6,000(2) Telephone. 2,000 24,000(3) Consumable Store. 5,000 60,000(4) Advertising. 2,000 24,000(5) Transportation. 4,000 48,000(6) Maintenance. 15,000 1,80,000(7) Insurance. 2,000 24,000(8) Contingency. 2,000 24,000

TOTAL 32,500 3,90,000

27

No. Designation Amount

1. Electricity 15,0002. Oil 1,32,000

Total 1,60,800

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(D) Staff & Labour Expenses

Table:- 13. Staff & Labour Expenses

No. Particular Monthly Amount Yearly Amount

(1)Total Wages &

Salaries1,13,800 13,65,600

TOTAL 1,13,800 13,65,600

(E) TOTAL WORKING CAPITAL

Table:- 14. Total Working Capital

No. Particular Monthly Required Yearly Required(A) Raw-Material Requirement. 2,39,250 26,10,200(B) UTILITY. 1,60,800(C) Other Expenses. 32,500 3,90,000(D) Staff & Labour Expenses. 1,13,800 13,65,600

TOTAL 3,85,550 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 byTotal Fixed Capital + Working Capital for three months.

TOTAL FIXED CAPITAL = 50, 15,000

+ Working Capital (3 Months) = 11, 56,650

TOTAL INVESTMENT = 38, 58,350

SOURCES OF FINANCE29

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(A) SOURCE

Table:-15. Sources of Finance

No. Particular Proportion Amount(i) Owned Capital 50% 20,00,000(ii) Barrowed Capital (S.B.I.) 50% 20,00,000

TOTAL 100% 40,00,000

(B) INTEREST

Table:-16. Interest

No. Particular Interest Rate Amount(1) Interest on owned Capital. 6% 1,20,000(2) Interest on Barrowed Capital. 13% 2,60,000

TOTAL 3,80,000

(C) DEPRECIATION

Table:-17. Depreciation

No. Particular Value of Asset Depreciation Rate Amount

(1) Building. 10,00,000 10% 1,00,000(2) Machinery. 26,35,000 20% 5,27,000

(3) Other Assets. 8,50,000 10% 85,000TOTAL 7,12,000

(D) FIXED COST

Table:-18. Fixed Cost

No. Particular Rs.1. Depreciation on Machinery 5,27,0002. Depreciation on Building 1,00,000

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(G) PROFITABILITY ANALYSIS

Table:-21. Profitability Analysis

No. Particular Rs.1. Sales volume 84,00,0002. Less: cost of prod 44,95,2003. Gross Profit 39,04,8004. Less: Depreciation 7,12,0005. EBIT 31,92,8006. Lees:Intrest 3,80,0007. EBT 28,12,800

Less: Provision For Tax 7,93,8408. EAT (NET PROFIT) 20,18,960

PROVISION FOR TAXATION

100000 = NIL

101000 to 150000 @ 10% = 5000

151000 to 250000 @ 20% = 20000

251000 to ---------- @ 30% = 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 Rs. 10, 09,480

(Profit sharing ratio is 50%)

PARTNER - 2

Mr. Noman Kadri Rs. 10, 09,480

(Profit sharing ratio is 50%)

(A) BREAK EVEN ANALYSIS

B.E.P. = Fixed cost

Fixed cost + Profit

= 20.64,000

28, 29,000 + 20, 18,960

= 50.55 %

(B) RETURN ON INVESTMENT

R.O.I.= E.B.I.T.

33

100

100

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Cost of Project

= 31, 92,800

58, 18,150

= 54.88 %

(C) NET PROFIT VOLUME

NPV = Net ProfitSales

= 20, 18,960

84, 00,000

= 24.03%

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

100

100

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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.Particulars Page. No.

01 Fixed Capital on Land & Building 23

02 Fixed Capital on Plant & Machinery 23

03 Other Fixed Assets 24

04 Preliminary Expenses 24

05 Total Fixed Assets 24

06 Top Level 25

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07 Middle Level 25

08 Lower Level 26

09 Total Salary 2610 Raw Material Requirement 19

11 Utility 2812 Other Expenses 28

13 Staff & Labour Expenses 2914 Total Working Capital 2915 Source of Finance 31

16 Interest 3117 Depreciation 3118 Fixed Cost 32

19 Cost of Production 32

20 Production Capacity Schedule 3321 Profitability Analysis 33

BIBILOGRAPHY

1. Desai Vasant, Project Management, 2 nd Edition, 1999, Himalaya

Publishing House.

2. Kapoor Sudarshan, Marketing Management, 1 st 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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***