GOLD RING MBA Porject Report Prince Dudhatra

8/6/2019 GOLD RING MBA Porject Report Prince Dudhatra

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PRODUCT PROJECT REPORT ON

GOLD

RINGSPREPARED BY KAMAL V. RANDHANPURA

COLLEGE

R.P. BHALODIA COLLEGEACADEMIC YEAR

2007-2008

CLASSTYBBA

ROLL NO.33

GUIDED BY MR. JAY PATEL

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SUBMITTED TOSAURASHTRA UNIVERSITY

DECLARATION

I undersigned, Kamal V. Radhanpura the student of T.Y.B.B.A. here

by declare that the project work presented in this report is my owncontribution and has been carried out under the supervision of Mr. Jay Patelof R.P. Bhalodiya College Rajkot.(Gujrat).

This work has not been previously submitted to any other universityfor any other examination.

Date : Signature

Place : RAJKOT (Kamal V. Radhanpura)

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ACKNOWLEDGEMENT

I feel great pleasure in submitting this report to you. Product projectReport is crucial function, which must be done by every small-scaleentrepreneur before he/she starts production.

I am very much thankful to our trusty & my Prof. Mr. Jay Patel for giving me necessary guidance.

Date: Students Sign

Place: RAJKOT (Kamal V. Radhanpura)

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PREFACE

Indian management scenario seemed to have mix hopes at theend of 2000. SSI is the pillars of Indian Economy. Most of theIndian Business firms are small-scale firms. But, due to thesuccess of globalization & liberalization people are less interestedin such business. The main reason is they do not have expertmanagement skills & techniques.

So there is an urgent need for substituting traditionalmanagement by modern & scientific management.

I am extremely happy to submit this project report for S.S.Iunder the prescribed syllabus of Saurashtra University. It is the

best way to develop entrepreneurial skills in students. In thisregard, I have prepared my project report on 5Gram GOLD RINGMANUFACTURING. I have got a chance to acquire practicalknowledge at the time of gathering the information.

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INDEX

NO. PARTICULARS Page No.

1. Project At A Glance 62. Justification Of Location 73. Product Uses 114. Market Analysis 125. Market Demand & Potential 126. Manufacturing Process 13

7. Manufacturing Capacity Schedule 168. Pollution Control 17

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PROJECT AT A GLANCE

Name of the unit : Shriji Gold Pvt Ltd

Address : 203, Aabhushan Complex ,Second Floor,

Soni Bazar,Rajkot 360001

Manufacturing of : 5 Gram GOLD RINGS

Location of Factor : 203, Aabhushan Complex, Second Floor,Soni Bazar,Rajkot 360001.

Telephone No. : Off:- 91-0281-2238150

Name of Promoters : Kamal V. Radhanpura

Bankers : Syndicate Bank

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JUSTIFICATION OF LOCATION

Location of any industry play a dominant role in success or failure of the co., as the location of the plant has direct influence on the cost of

production as well as on effectiveness of marketing. And it is also a mostimportant decision because, once plant location is chosen, it cant bechanged in the near future. So, mistake in location selection cant becorrected without heavy losses. The selection of location bears a lot of afactory affects it. The selected location of the GOLD CAST PVT.LTD. Issituated at

Aabhushan Chamber,Soni Bazaar,Rajkot.

So, it is best suitable to the production of any product. The GOLD

CAST PVT.LTD . Enjoys following benefits, as such location has beenselected.

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JUSTIFICATION OF LOCATIONINDEX


1. Availability of Raw Materials 92. Promixity To Market 93. Communication 104. Labor Supply 105. Power Supply 10

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AVAILABILITY OF RAW MATERIAL &EQUIPMENTS

In the business of ornaments casting, first important is of equipments. The equipment necessary for running business is available inRajkot by HIGH-TECH INDUSTRIAL CORPORATION & UNIQUEINDUSTRIES, which provide the quality equipments.

Raw material is also the basic input, which must be given equallyimportance. The all raw material is made available from HIGH-TECHINDUSTRIAL CORPORATION, which is situated at Darbar Gadh Chowk,which is also at Soni Bazaar.

PROMIXITY TO MARKET

As, product is for the market, it is beneficial to have nearness to themarket, In this type of business producer has not to find the market butmarket finds the producer, as the producer are few.

As the company is manufacturer of Gold Ornaments, it should be beneficial as the labour as well as other manufacturer or the assembling people are more in the market, so they can come there any time and cancome to office. More over if the factory is far from the office then thetransportation becomes too Risky for transportation of Raw Gold to factoryand after that finished product to the Office.

The markets of Gold ornaments are Calcutta, Delhi, Mumbai, Jaipur,Banglore, Ahmadabad and Madras.

Yet. Company has no problem as supplier, wholesalers and exportersof jewellery ornaments are mainly situated at Rajkot, Ahmedabad andMumbai.

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COMMUNICATION

Every business firm requires every type of business information inorder to know position of labour, market, raw material and new trends inmarket. All such communication facilities are available in Rajkot.

As the factory and office are both in the Soni bazaar, so allinformation and communication facilities are available.

LABOUR SUPPLY

Supply of labour also influence the selection of location, it requires both type of labour semiskilled & skilled. Both can be made available easilyin Rajkot. Therefore labour never creates problem.

POWER SUPPLY

An uninterrupted & adequate supply of power is must as the whole business is operated by electric power. As Rajkot is city area the power alsonever creates problem

Thus the above all factors justify the selection of the location so theselection would definitely contribute to the profitability & success of plant.

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PRODUCT USES

In the market jewellery industry, varieties of ornaments are availablesuch as, gents rings and ladies rings from light weight to heavy weight. Morethan this, there are also varieties in studded as well as plain rings. Rangesare available in weight range of lightweight range.

In todays modern era, there are thousands of designs available for above given ornaments at one producer or dealer. The customer can also ask for their own design, wide selection options are available for customers.

The buyer of jeweler ornaments can be can be divided in to twoaccording to their own design; wide selection options are available for customers. The buyer of jewellery ornaments can be divided in to twoaccording to their utilization.

1. Dealers or Commercial Buyers.2. Individual Buyer.

Commercial buyer includes Dealers, Wholesaler, Agents, Show-roomholders, Fashion-design institutes, Ornament House, etc.

Individual buyer covers a person or family or a group who purchase inretail.

The manufacturers generally deals with the commercial buyers, if individual buyer asks, they recommends the name & address of thedealers who sales their products.

Thus, wholesalers and dealers are the buyers of the firm.

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MARKET ANALYSIS

The market of jewellery ornaments is steadily increasing with more &more at local, national & international level. With greater demand from

people, producers are maximizing their capacities. The market isovercrowded with brands of Jewellery Ornaments.

Experiment has shown that advertisement & Publicity of new

designed ornaments have influenced the consumption pattern of jewelleryornaments. So, Small Scale Industries inJewellery ornament manufacturing is increasing their market share byfollowing promotion & advertisement policies of multinational companies &introducing the modern techniques. It has given better infrastructure andsales of Jewellery industry.

MARKET DEMAND & POTENTIAL

Jewellery ornaments manufacturing industries is still in the growingstage. Earlier the local producers with mostly unbranded or unaware brandwere produced and sold.

But, with the entry of multinationals (e.g. TANISHQ, GILI, ORRA,AURO etc.) having better market infrastructure and sales promotion. After

creating market in advanced countries like U.A.E., AMERICA, GULFCountries the multinationals have created a good market in India.

The factors governing the demand of jewellery ornaments are:

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1. Increase in The Population of Country.2. Rapid Industrialization In the Country3. Increase In Purchasing Power Of People.4. Durability Of Product5. Wide selection Opportunity Available6. Change In Fashion Industry.7. Increase In living Standard .

There has been an appreciable increase n export of jewelryOrnaments. In addition the boom period in the jewellery industry haswidened the demand potential for jewellery products.

So, the jewellery industries are having local, national & Multinationaldemand and potential.

MANUFACTURING PROCESS

The production process of the firm is somewhat complex, but thewhole process is being managed by efficient administration and supervisionand performed by most experienced person.

The production process of jewellery ornaments includes followingstages.

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MANUFACTURING PROCESSINDEX


1. Preparation of pattern 152. Raw material 153. Die making department 154. Wax department 155. Vacuum department 156. Vibrators of Finishing department 167. Packing & Dispatching department 16

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1. Preparation of pattern.

To make out pattern is the primary stage. Firstly the design is being prepared by special personnel or as per given bycustomer. On the basis of design, the pattern maker prepares

pattern.

2. Raw Material.

The basic raw material is GOLD, which can be made available

from the market at anytime.

3. Die Making Department.

After collecting the raw material with the help of kie rubber, thedies are made out by special die maker. After preparation of dies, they are being sent to wax department.

4. Wax Department.

After preparing die firstly, the wax being melted in wax injector machine. The temp. of wax reaches at 85C then the wax is

properly melted. Dyes, which have been made by diedepartment, are being injected (pushed) from the nozzle * wax

piece according to the pattern can be designed.

5. Vacuum Department.

The workers put flask on vacuum plates, flow the mixtures of investment powder and water into the flask & put plastictransparent doom on it. They start vacuum machine, when

bubbles are seen they stop it.

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6. Vibrators of Finishing Department.

Ornaments are to be finished with the help of vibrator to finishornament put it into vibrator & start the machine. After one or one & half hour the ornaments are finished and they areglittering & shining.

7. Packing & Dispatching Department.

As these ornaments are too precious they has been vacuum packed. Firstly ornaments are placed on white cardboard, after that they are packed in a plastic bags. And after that they arevacuumed.

The main reason for such packing is to maintain itsfinishing and also for its presentation.

The ornaments are dispatched through Angadiya or Agents. If exported, then by air agents.

MANUFACTURING CAPACITY SCHEDULE

INSTALLED CAPACITY 2580

CURRENT CAPACITY OR CAPACITY UTILIZED 2400

(AT 93% CAP.)

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POLLUTION CONTROL

The company also cares about health of the people.

The project does not create any noise or water pollution. So for as our pollution is concerned, the latest shuttle kilns and exhaust fan are settled.

The company has applied for certificate of (SPCG) state pollutioncontrol board, as the company having the all standards to get this certificatethe company will not find problem in getting this certificate.

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FINANCE DEPARTMENT

INDEX


1. Total Fixed Assets 19

2. Working Capital Requirement 203. Total Cost of Project 214. Source of Finance 225. Interest 226. Depreciation 227. Cost of Production 248. Profitability Statement 259. Ratios 26

10. Sales Forecast 28

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TOTAL FIXED ASSETS

No. Particulars Amount

01. Work Shop 4,00,00002. Machinery 85,92003. Furniture 80,00004. Electric fittings 24,00005. Other tools 16,000

----------Total 6,05,920

=====

MACHINERY

NO PARTICULARS RATE AMOUNT01. Die press @ 13,440 13,44002. Polish Machine @ 8,960 8,96003. Machine Cut @ 20,000 20,00004. Painting Plant @ 4,000 4,00005. Roll Press Machine @ 20,000 20,00006. Metal melting furnace. @ 19,520 19,520

TOATAL 85,920

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WORKING CAPITAL REQUIRMENT

RAW MATERIAL

No. Particular Quantity Rate@Kg. Amount1 Gold 11.000 kg. 8,90,000 97,90,0002 Silver 265 gm. 20,000 5,3003 Copper 500 gm. 270 1354 Cadmium 250 gm. 300 75

TOTAL 97,95,510

UTILITY

No. Particular Quantity Rate Amount1 Power 6,000 Units 5 @ Unit 30,000

WAGE & SALARY

Particular No. Salary MonthlyManager 1 5,000 5,000Accountant 1 2,500 2,500

Skilled workers 2 1,500 3,000Unskilled workers 5 500 2,500

Total 13,000Yearly 1,56,000

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OTHER MISCELLANEOUS EXPENSES

Particular YearlyPacking material 2,000Telephone 12,000Insurance 12,000Advertisement 1,000

Total 27,000

TOTAL WORKING CAPITAL

Particular Amt.

Raw material97,95,000

Wage & salary 1,56,000Utility 30,000Other expenses 27,000Total 1,00,08,510

TOTAL COST OF PROJECT

Particulars Amount

Fixed asset 6,05,920Working capital 1,00,08,510

Total 1,06,14,430

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VARIABLE COST

PARTICULAR AMOUNT

Variable Cost :-Raw material 97,95,510Wage and salary 1,56,000Utility 30,000

Other expenses 27,000---------

[A.] Total Variable Cost 1,00,08,510

Fixed cost :-Depreciation 75,184Interest 9,20,200Insurance 12,000

----------[B.] Total fixed cost 10,07,384

[C.] Total cost [A.] + [B.]

1,10,15,894

cost per piece.1,10,15,894/2,400

4,589.95

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COST OF PRODUCTION

Installed capacity (100%) 2,580pcs.

Total utilized capacity (93%) 2,400 pcs.

Total fixed cost = 10,07,384

Total variable cost = 1,00,08,510

Total cost = 1,10,15,894

Cost per piece = 4,589.95 Rs .

MARGIN OF TOUCH

Weight Touch3.50

Rate890@gm.

5 gm. 0.175 155.75

Sales cost price = 4,589.95+ profit 155.75

----------4,745.70======

Production = 2,400.00

- closing stock 0000.00-----------2,400.00

======

Sales2400 X 4745.70 = 1,13,89,689

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PROFITABILITY STATEMENT

PARTICULAR AMOUNT AMOUNT

Sales 1,13,89,680

Less Variable cost:raw material 97,95,510utility 30,000wage & Salary 1,56,000other expenses 27,000 1,00,08,510

-------- -----------CONTRIBUTION 13,81,170

Less: Fixed cost :Depreciation 75,184Interest 9,20,200Insurance 12,000 1,00,73,84

--------- ----------

PBT 3,73,786Less: Tax 59,136

---------PAT 3,14,650

=====

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RATIOS

EBITROI = ----------------------- X 100

Total cost of prices

12,95,986= -------------- X100

1,10,15,894

= 11.75%

Net profitNPR = ----------- X100

Sales

= 3,14,650----------- X1001,13,89,680

= 2.76%

Gross ProfitGPR = ---------------- X100

Sales

= 14,08,170--------------- X1001,13,89,680

= 12.36%

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Break Even Analysis

Variable Cost/Unit = Total Variable Cost------------------------Total No. of Units

= 1,00,08,510---------2,400

= 4170.21Rs. / Unit

Contribution = Selling Price Variable Cost/Unit

= 4,745.70 4,170.21

= 5,79.45/ unit

BEP (IN UNITS) = Total Fixed Cost--------------------Contribution / unit

= 10, 07,384------------575.47

= 1,750.48 Units

BEP (IN Rs.) = BEP in Units X Selling Price

= 1,750.48 X 4,745.70

= 83,07,252.94 Rs.

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COST SHEET

Particulars CostPer

Piece

Rs. Rs.

COST OF RAW MATERIALCONSUMED

Opening+ Purchase 97,95,51

0

- Closing 0000000 _____ _______

_ ________

Raw material consumed 4,081.46

97,95,510

Utilities 12.50 30,000 30,000

PRIME COST4,093.9

698,25,510

Factory overheadsSalaries 66,000Depreciation 19,584 85,584

4,129.62

99,11,094

WORKS COSTOffice overheadsSalaries 90,000

Packing Material 2,000Telephone 12,000Insurance 12,000Advertisement 1,000Interest 9,20,200Depreciation on furniture 12,000 10,49,200

4,566.79

1,09,60,294

Opening stock of finished goods -- ___

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- closing stock of finished goods -------COST OF PRODUCTION 1,09,60,294

======

COST SHEET

Particulars 2 nd 3rdCOST OF RAW MATERIALCONSUMED

Opening+ Purchase 1,00,06,166 1,03,22,150

- Closing ----------- -----------___________ ____________

Raw material consumed 1,00,06,166 1,03,22,150Utilities 30,645 31,613

PRIME COST1,00,36,811 1,03,53,763

Factory overheadsSalaries 66,000 66,000Depreciation 14,688 11,016

1,01,17,499 1,04,30,779

WORKS COSTOffice overheadsSalaries 90,000 90,000Packing Material 2,043 2,108

Telephone 12,258 12,645Insurance 11,800 11,600Advertisement 1,022 1,054Interest on Land Owned 9,39,989 9,69,673Depreciation on furniture 10,200 8,670

1,11,84,811 1,15,26,529Opening stock of finished goods -- ___ -- ___

- closing stock of finished goods ---------- ----------COST OF PRODUCTION 1,11,84,811 1,15,26,529

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====== ======

Loan repayment schedule with interest

ICICI

Loan Installment Interest Remaining

10,70,000 2,14,000 1,17,700 8,56,0008,56,000 2,14,000 96,160 6,42,0006,42,000 2,14,000 70,620 4,28,0004,28,000 2,14,000 47,080 2,14,0002,14,000 2,14,000 23,540 --

HDFC

Loan Installment Interest Remaining

10,70,000 2,14,000 1,17,700 8,56,0008,56,000 2,14,000 94,160 6,42,0006,42,000 2,14,000 70,620 4,28,0004,28,000 2,14,000 47,080 5,40,0002,14,000 2,14,000 23,540 --

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TRADING & P&L

PARTICULAR AMOUNT

INCOMESales 1,13,89,680

----------Total income / sales [A] 1,13,89,680

Manufacturing expensesRaw material 97,95,510Utility 30,000Wages 1,56,000

-----------Total manufacturing expenses [B] 99,81,510-----------

GROSS PROFIT (A-B) C 14,08,170

Administrative ExpensesDepreciation 75,184Interest 9,20,200Insurance 12,000

Other expenses 27,000Total administrative expenses [D] 10,34,384

Operating profit (C-D) 3,73,786

Less :- Tax 59,136------------

NET PROFIT 3,14,650

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======

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BALANCE SHEET

PERTICULAR AMOUNT

SOURCES OF FUNDS

Ownership capital 86,56,000

Borrowed loan:-ICICI BANK- 10,70,000HDFC BANK - 10,70,000

P&L A/C. 3,14,650-------------

TOTAL 1,10,14,650=======

APPLICATION OF FUNDS

Workshop (Net Block) 36,000Machinery (Net Block) 68,736Furniture (Net Block) 68,000Electric fitting (Net Block) 20,400Other tools (Net Block) 13,600Debtors 19,00,000Cash 68,07,914Bank 21,00,000

------------

TOTAL 1,10,14,650=======

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TRADING & P&L

PARTICULAR AMOUNT AMOUNT2nd 3rd

INCOMESales 1,16,34,691 1,20,02,028

----------- -----------Total income / sales [A] 1,16,34,619 1,20,02,028

Manufacturing expensesRaw material 1,00,06,166 1,03,22,150Utility 30,645 31,613Wages 1,56,000 1,56,000

----------- -----------Total manufacturing expenses [B] 1,01,92,811 1,05,09,763

----------- -----------GROSS PROFIT (A-B) C 14,41,808 14,92,265

Administrative ExpensesDepreciation 65,047 56,403Interest 8,39,522 7,66,075Insurance 11,800 11,600Other expenses 27,581 28,452

----------- -----------Total administrative expenses [D] 9,43,950 8,62,530

Operating profit (C-D) 4,97,858 6,29,735

Less :- Tax 96,357 1,35,920------------ ------------

NET PROFIT 4,01,501 4,93,815====== ======

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BALANCE SHEET

PERTICULAR AMOUNT AMOUNT2nd 3rdSOURCES OF FUNDS

Ownership capital 86,50,000 86,50,000

Borrowed loan:-ICICI BANK 8,56,000 6,42,000HDFC BANK 8,56,000 6,42,000

P&L A/C. 4,01,501 4,93,815

TOTAL 1,07,63,501 1,04,27,815

APPLICATION OF FUNDS

Workshop (Net Block) 32,400 29,160Machinery (Net Block) 54,989 43,991

Furniture (Net Block) 57,800 49,130Electric fitting (Net Block) 17,340 13,872Other tools (Net Block) 11,560 9,826Debtors 20,90,000 19,50,000Cash 60,99,412 56,31,836Bank 24,00,000 27,00,000

------------ ------------TOTAL 1,07,63,501 1,04,27,815

======= =======

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TAXES

Rs. Rs.

PROFIT 373786- Exemption 110000

------------------263786

- 100001-150000 X 10% 50000 5000----------213786

- 150001-250000 X 20% 100000 20000----------113786

- 250001-209000 X 30% 113786 34136----------

--------

TOTAL 87700-------

--------

-

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NAME & ADDRESS OF SUPPLIER

HIGH-TECH INDUSTRIAL CORPORATION

DARBAR GADH CHOWK,SONI BAZAAR,

RAJKOT 360 002PH. NO. 0091 0281 2238150

&

MANKI INDUSTRIES304, GIRIRAJ CHEMBER,

OLD GADHIVAD,RAJKOT 360 002

PH. NO. 0091 0281 2227086

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GOLD RING MBA Porject Report Prince Dudhatra