Pritesh water

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Prepped By :- Pritesh Radadiya

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DECLARATION

I, the undersigned PRITESH RADADIYA a student of

T.Y.B.B.A. hereby declare that the project work presented in this

report is my own and has been carried out under the supervision of

PROF. JATIN SHETH of VIVEKANAND COLLAGE

RAJKOT

Date :

Place : Rajkot . .

. (PRITESH RADADIYA)

3

PREFACE

Industrial growth is the measure of the health of any economy.

The technological development backed by globalization has helped

India to make a mark in the industrial world.

The growth in the economy generates a demand for skilled

managers. Management is a science as well as an art. The theoretical

knowledge gained in the classroom is not complete without having

practical exposure. Thus practical study forms and important part of

the BBA course. The BBA course has an edge over other courses

due to the emphasis laid on practical training and the reports made

therefrom. The students go for industrial visits and make reports on

them. Moreover the students have to make a report on a product

which will help them to know how a unit is being set up. This

actually helps them to know how the theories they learn are actually

implemented in the working premises.

The product that I have selected for my product project report

is Vrushti Mineral Water based under the category of ‘VRUSHTI

MINARAL WATER’ This product project report has helped me

learn how a unit is set up.

Date :

Place : Rajkot (PRITESH RADADIYA)

4

ACKNOWLEDGEMENT

I feel a great sense of pride and pleasure in presenting my first

product project report to the Saurashtra University as a student of

T.Y.B.B.A. on ‘VRUSHTI MINARAL WATER.

I convey my heartiest gratitude to Prof. Jatin Sheth without

whom this task would not have been so easy. Also, I am thankful

to. who gave me valuable advices and required knowledge for my

report. Also, I would like to thank.

I thank PROF. JATIN SHETH who guided me in making

the report and giving me motivation.

I thank all those who have helped me directly or indirectly in

the successful completion of this project.

Date :

Place: Rajkot (PRITESH RADADIYA)

5

INDEX

Sr.

No. Particulars

01 Acknowledgement

02 Introduction of S.S.I

03 Project at a glance

04 Implementation Scheduled

05 Promoters Bio- Data

06 Justification Of Location

07 Product Details

08 Market Potential

09 Marketing Strategies

10 Manufacturing Process

11 Types of Machinery

12 Production Capacity shedual

13 Financial Details

14 Total Fixed Assets

15 Cost of Production

16 Staff & Labour

17 Other Expenses & Utilities

18 Repair & Maintenance

19 Annual Cost of Production

20 Sales Forecast

21 Break Even Point

22 Ratio Analysis

23 Balance sheet 1

24 Balance sheet 2

25 Balance sheet 3

26 Risk Factors

27 Future Plan

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INTRODUCTION TO S.S.I.

The Small Scale Industrial Sector has emerged as a dynamic

and vibrant sector of the economy during the eighties. At the end

of the Seventh Plan period, it accounted for nearly 35 percent of the

gross value of output in the manufacturing sector and over 40

percent of the total exports from the country. It also provided

employment opportunities to around 12 million people.

The primary objective of the Small Scale Industrial Policy during

the nineties would be to impart more vitality and growth-impetus

to the sector to enable it to contribute its mite fully to the economy,

particularly in terms of growth of output, employment and exports.

The sector has been substantially deli censed. Further efforts would

be made to deregulate and debureaucratise the sector with a view

to remove all fetters on its growth potential, reposing greater faith

in small and young entrepreneurs.

All statutes, regulations and procedures would be reviewed

and modified, wherever necessary, to ensure that their operations

do not militate against the interests of the small and village

enterprises.

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PROJECT AT A GLANCE

Name of the unit : Vrushti Mineral Water

Address : Vrushti Mineral Water

Plot No. E - 300,

Lodhika G.I.D.C.,

Matoda – Rajkot

(GUJARAT)

Mo. : 0281-2111111

Name of proprietor : Pritesh Radadiya

Name of the product : Mineral Water

Size of the unit : Small Scale Industry

S.S.I. Reg. No. : {applied for}

Cost of the Project : 80,00,000/- Rs.

Source of finance : 50 : 50

50 % owned capital

50 % borrowed capital

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IMPLEMENTATION SCHEDULE

The major activities in the implementation of the project

have been listed here. Project implementation will take a period of

8 months. From of date of approval of the scheme, breakup of the

activities and relative time of each activity is shown below :

Particulars Months

Preparation of project 1.0

Selection of site 1.0

Registration of S.S.I. 1.5

Availability of finance 1.5

Selection of machines 1.5

Procuring of machines 1.0

Recruitment of labour 0.5

The company will start its actual production from the 9th

month after all the prime activities are completed.

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Promoter`s Bio -data

Name : Pritesh Radadiya

Age : 21 years

Address (R.) : “SHIVALAY”,

YOGI NAGAR SOCIETY,

150 FEET RAIYA RING ROAD,

RAJKOT - 360 005,

(GUJARAT)

INDIA.

Academic qualification : M.B.A. (Marketing)

Role in the unit : The owner of the unit and

Responsible for all the

Activities.

Financial contribution : 50 % of the project fund.

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Promoters 2

Name : Pratik Rathod

Age : 21 years

Address (R.) : “SHIVALAY”,

BHAGIRATH SOCIETY,

SANT KABIR MAIN ROAD,

RAJKOT – 360 002

(GUJARAT)

INDIA.

Academic

Qualification : M.B.A. (Finance)

Role in the unit : The owner of the unit and

responsible for all the

activities.

Financial contribution : 50 % of the project fund.

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JUSTIFICATION OF LOCATION

Location reveals the area where the plant will operate to

manufacture proposed goods & articles. Every entrepreneur, before

starting unit must give due attention to the suitable location of

business. One should locate the unit at the place where

infrastructural & other facilities are available.

We are going to setup our unit at G.I.D.C. Matoda as the

following facilities are available.

A) Raw Material: -

The basic component for manufacturing firm is raw

material. As in our case raw material comes from outside the

city that is Gondal. So, it is convenient to locate the firm at

Shapar so that raw material is available cheaply & easily.

B) Transportation: -

Here transportation facilities are available cheaply &

easily so that there is convenience in getting raw material

from outside to the production place & also from production

place to the other area to sell.

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C) Labour: -

The area in which our firm will be located is an

industrial area, so that labour is adequately available.

D) Water & Power Supply: -

There no such problem of power cuts or shortage of

water in this place

13

Product Details

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Product Details

Water is a basic necessity of life, something without which

we can’t exist. Unfortunately, most of the water which reaches our

home and establishment for drinking is full of bacteria and without

Vrushti Filtering.

The Vrushti Mineral Water will be available in the market to the

customers in pouches, bottles and jars. It passes through three different

filters then it reaches for packing.

Per jar Rs.30

Per Bottle Rs. 15

The production capacity of this Mineral Water Plant is 1,00,000

Liters per Month.

15

Market Potential

Water is common denomination for every living thing on the

earth. Various impurities such as bacteria’s, organics, metals mineral

salts and gases are present in water which is naturally available but we

cannot see by eyes but once we look at microscopic lenses picture, We

shall come to know about them. These impurities cause various diseases

in our body and i.e. why we step into to introduction of a Vrushti water.

Purifying system which produces healthy water at nominal cost and

reaches to our day to day use. Especially for drinking water purpose.

Summer is a period of holidays during which the demand or

requirement of Vrushti mineral water increases because most of the

people are going for picnic.At that time, for the purpose of drinkable

water on picnic places , most of the people uses pouches as well as

bottles of Vrushti mineral water .Gujarat is one of the most important

place for picnic, during summer, rush of the people increase in Gujarat,

so at that time, the problem of drinkable water is great and mineral water

industry plays an important role to lessen this problem. And also.

Summer is a season of marriages. Hence, in marriages also, demand or

requirement of Vrushti mineral water is more.

By seeing the potentiality and demand of Vrushti mineral water,

the product will 100% enjoy great acceptance of customers in present

as well as in future.so, thereis a huge potential in mineral water industry.

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Marketing Strategies

With the launch of this product, Vrushti Mineral Water enters the

market with an intention to penetrate consumers with new strategies

like:

(1) Daily Free Delivery: -

Vrushti Mineral Water gives the unique facility to its customers of daily

free delivery in offices, home, educational institute and other places

twice a day.

(2) Unique Concept: -

This concept is totally unique. The Vrushti Mineral Water uses

Bio-Grade Plastic to packing their product. So, the plastic does not

affect the water.

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Manufacturing

Process

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Manufacturing Process Diagram

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Manufacturing Process

There are different steps involved in this system or process, as

under:

Water pumping from bore well.

Addition of Alum and other Chlorination dosage in raw water storage

tank.

Filtration by sand filters.

Filtration by activated carbon filters.

Filtration by micron filters.

Cosmetic pressure system.

Passing of water from no membranes.

UV systems for bacteria killing.

Final polishing filters.

Clean/treated water storage tank.

Packing of water.

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RO Filtering

21

Types Of Machinery

22

RO Plant

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PRODUCTION CAPACITY SCHEDULE

Production capacity : 75 % utilisation

Working days in a week : 6 days

Working days in a month : 25 days

Working days in a year : 300 days

No. of shifts per day : 1 shift

No. of working hours per shift : 8 hours

Production capacity per month : 75000 Liter

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FINANCIAL DETAILS

A) Land and Building

Sr. No. Particulars Area Amount (Rs.)

1] Land 1500 yards

20,00,000

2] Building 2400

20,00,000

TOTAL 40,00,000

B) Other fixed assets

Sr. No. Particulars Amount

1] Delivery van 6,00,000

2] Furniture 1,00,000

3] Electrification 1,00,000

4] Preliminary expenses 70,000

5] Office equipment’s 30,000

TOTAL 9,30,000

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C) TOTAL FIXED ASSETS


1] Land and building 40,00,000

2] Machineries 20,00,000

3] Other fixed assets 9,00,000

TOTAL 69,00,000

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COST OF PRODUCTION

Raw Material

The raw material required to produce mineral water are as follow:

No. Items

Rate

(Rs./Lit.)

Monthly

Reqmt.

(Lit.)

Yearly (Rs.)

Amount

1. Raw Material 8.88 24,000 25,57,440

2. Alum 12.00 5,000 4,80,000

3. Chlorine & other

Anti effluents

15.00 6,000 10,80,000

TOTAL 43,57,440

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Staff and Labour

No. Particulars

No. of

Persons

Rate per

day

Amt. (per

month)

Amt. (per

year)

1. Manager 1 700 19500 234000

2 Supervisor 2 300 18000 216000

3, Distributors 2 300 9000 108000

4, Unskilled Labour 10 250 7500 9,00,000

5, Driver 2 300 9000 216000

6, Peon – Cum –

watchman

2 150 4500 108000

TOTAL 17,82,000

Therefore, staff salary for three months will be:

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OTHER EXPENSES AND UTILITIES

A) Other administrative expenses

Sr.

No. Particulars

1 month

Amt. (Rs.)

6 months

Amt. (Rs.)

1 year

Amt. (Rs.)

1] Telephone 5,000 30,000 60,000

2] Postage & Stamp 2,000 12,000 24,000

3] Advertisement 10,000 60,000 1,20,000

4] Transportation 10,000 60,000 1,20,000

5] Insurance 5,000 15,000 60,000

6] Miscellaneous

exp.

7,000 42,000 84,000

7] Packing charges 70,000 4,20,000 8,40,000

TOTAL 1,09,000 22,19,000 22,8000

B) Utility

Sr. No.

Particulars 1 month

Amt. (Rs.) 6 months Amt. (Rs.)

1 year Amt. (Rs.)

1] Electricity 10,000 60,000 1,20,0000

2] Water 1,000 6,000 12,000

3] TOTAL 62,500 1,72,000 1,32,000

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Repairs and maintenance

TOTAL WORKING CAPITAL

Sr. No.

Particulars Value (Rs.)

Rate Amt. (Rs.) (per

month)

Amt. (Rs.) (per annum)

1] Machineries 20,00,000 2 % 40,000 4,80,000

2] Other fixed

assets

9,30,000 1 % 9,300 1,11,600

TOTAL 81,000 5,91,600

Sr. No. Particulars Monthly

(Rs.)

Yearly

(Rs.)

i) Raw materials 3,63,120 43,57,440

ii) Staff and labour 2,01,00 17,82,000

iii) Other expenses &

utilities

41,000 4,92,000

TOTAL 424220 66,31,440

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TOTAL PROJECT FUND

Sr. No. Particulars Amount ( Rs. )

1] Total fixed assets 13,68,560

2] Total working capital 66,31,440

TOTAL 75,61,440

SOURCES OF FINANCE

Sr. No. Particulars Percentage Amount

( Rs. )

1] Owned Capital

50 % 40,00,000

2] Borrowed Capital

50 % 40,00,000

TOTAL 75,61,440

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INTEREST ON CAPITAL

Sr. No. Details Loan

Amount Interest

Rate Interest

(per annum)

1] S.I.D.B.I. 40,00,000 08 % 3,20,000

2] Owned

Capital

40,00,000

0 12 % 4,80,000

TOTAL 8,00,000

DEPRECIATION

Sr. No. Particulars Value Rate Amount ( Rs. )

1] Building 20,00,000 10 % 2,00,000

2] Machineries 20,00,000 15 % 3,00,000

3] Other fixed

assets 9,30,000 15 % 1,86,000

TOTAL 6,86,000

32

ANNUAL COST OF PRODUCTION


( Rs. )

1] Raw materials 43,57,440

3] Depreciation 6,86,000

4] Interest on capital 8,00,000

5] Staff 17,82,000

TOTAL 76,25,440

33

SALES FORECAST

Year Units

( per annum ) Rate

( Std. price ) Amount ( Rs. )

1st 10,000 20.00 24,00,000

2nd 12,000 25.00 36,00,000

3rd 15,000 30.00 45,00,000

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FIXED AND VARIABLE COST SCHEDULE

Schedule for Fixed Cost


1] Depreciation 6,86,000

4] Interest on capital 8,00,000

5] Preliminary expenses 70,000

6] Administrative expenses 2,28,000

7] Labour(60%) 10,69,200

TOTAL 28,53,200

Fixed cost per Ltr. :

= Total fixed cost / No. of units

= 28,53,200 / 1,80,000

= 15.86 /- Rs.

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Schedule for variable cost


1] Raw material 43,57,440

2] Packing and Packaging 8,40,000

3] Utilities 1,32,000

4] Salary (17,82,000*40%) 7,52,800

5] Other administration 2,28,000

TOTAL 63,10,240

Variable cost per unit = Total variable cost

No of units

= 63,10,240

1,80,000

= Rs 35.60 unit

(C) Total cost per unit:

Total cost per unit = Fixed cost/unit + variable cost/unit

= 23.77 + 52.60

= Rs 76/ unit

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BREAK EVEN ANALYSIS

(a) Contribution = Sales price/unit – Variable cost/unit

= 76-51

= 25/ unit

(b) BEP (In unit) = Fixed cost

Contribution / unit

= 7,31,963

37.12

= 1,14,128 units

(c) BEP (In Rs) = BEP (units) x selling price

= 1,14,128 x 30

= Rs 34,23,840

(d) BEP (In %) = Fixed cost x utilized capacity

Contribution

= 7, 31,963 x 60

(49, 68,000-40, 77,000)

= 7, 31,963 x 60

8, 91,000

= 49.29 %

37

AVERAGE COST OF CAPITAL

SR NO CAPITAL RATE INTEREST

1 Own capital :

40,00,000

12% 4,80,000

2 Borrowed capital

:40,00,000

9% 3,60,000

Total 8,40,000

Average cost of capital = Total interest x 100

Total capital

= 8,40,000 x 100

75,61,440

= 11.10 %

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RATE OF RETURN ON CAPITAL EMPLOYED

( i ) R.O.I. :

= EBIT * 100

Project Cost

= 10,25,438 * 100

75,61,440

= 17.93 %

( iii )Cost Of Capital :

= Total Interest * 100

Total Capital

= 8,00,000 * 100

` 75,61,440

= 10,58 %

( iv ) Fixed Assets Turnover Ratio :

= Fixed Assets * 100

Sales

= 9,30,000 * 100

55,08,000

= 25.8

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BALANCE SHEET

(1ST YEAR)

Balance Sheet

Liabilities Amount (Rs.) Assets

Amount (Rs.)

Capital Accounts: FIXED ASSETS:

Owen capital 40,00,000 Land 20,00,000

+ Interest 4,80,000 44,80,000

Building 20,00,000

Secured Loans: -depreciation 2,00,000 18,00,000

H.D.F.C. Bank loan 40,00,000

-installment paid 3,20,000 36,80,000 Plant & Machinery 20,000,000

-depreciation 3,00,000 17,00,000

Net Profit: 18,40,000

Furniture & Fixture: 3,00,000

- Depreciation 60,000 2,40,000

Other fixed assets 9,30,000

- Depreciation 18.6000 74,4000

Accounts Receivables:

Debtors 76,000

Bank Balance:

H.D.F.C. Bank A/c 20,00,000

Cash – in - hand:

Cash Balance 14,40,000

1,00,00,000 1,00,00,000

40

BALANCE SHEET

(2nd YEAR)

Balance Sheet


Amount (Rs.)



+ Interest 4,80,000 44,80,000

Building 18,00,000




-depreciation 3,00,000 14,00,000




Other fixed assets 74,4000

- Depreciation 18.6000 5,95,200


Debtors 91,200

Bank Balance:

H.D.F.C. Bank A/c 30,00,000

Cash – in - hand:


1,00,86,400 1,00,86,400

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BALANCE SHEET

(3rd YEAR)

Balance Sheet


Amount (Rs.)



+ Interest 4,80,000 44,80,000

Building 16,00,000




-depreciation 3,00,000 11,00,000




Other fixed assets 5,95,200

- Depreciation 18.6000 4,09,200


Debtors 1,63,600

Bank Balance:

H.D.F.C. Bank A/c 30,00,000

Cash – in - hand:


1,02,12,800 1,02,12,800

Risk Factors

(1) Competition: -

Existing competition from universal Raja Mineral water, Bisleri Mineral

water, Kinley & Oxyrich mineral Water etc.

(2) Seasonal Fluctuations: -

Seasonal Fluctuations during the year especially in summer

because the basic raw material is water. So, in summer there is

scarcity of water.

43

DISCLOSURE OF SIGNIFICANT ACCOUNTING

POLICIES

The basis for calculation of production capacity is considered

normally on 75 % utilization.

Written Down Value method of depreciation is adopted.

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

years.

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

44

FUTURE PLANS

The firm plans the following for years to come:

It may increase its production of mineral water in both Pouches and

Bottles.

The firm plans to have take big orders from Marriages, Functions and

in Parties.

To increase the production capacity and thereby employing more and

more number of workers.

To cover the large part of market share of local region within 2-3

Years.

To provide the best quality of mineral water at reasonable prices.

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Name & Address of Machinery Suppliers

1. Hindustan Machinery Limited

Near Lal Darwaja,

Baroda

2. Doshi Equipment & Tools Limited

Plot No. 24, 25, 26,

Phase – 2,

GIDC – VATAVA,

Ahmedabad.

3. Universal System

Tagore Road,

Golden Plaza

Rajkot

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Name & Address of Raw-Material Suppliers

1. Arena Chemicals Limited

Aji Industrial Estate,

Rajkot

2. Paramount Polythene Limited

Dhebar Road Oneway,

Near City Traffic Police,

Rajkot

3. Orra Plastic Bottle Manufacturing Company

Ashram Road,

Near Sharda School,

Ahmedabad

47

CONCLUSION

“Vrushti” have a rapid development and having a bright successful

future in the production and marketing of water.

Company has well established marketing and personnel department

and the financial condition is very strong.

A part form profit objective company has also social responsibility

objective. Company is doing much for the development of human resources

and provides various facilities to its personnel.

Business

Pritesh water