PRODUCT PROJECT REPORT ON

GOLD RINGS
PREPARED BY KAMAL V. RANDHANPURA COLLEGE R.P. BHALODIA COLLEGE ACADEMIC YEAR 2007-2008 CLASS TYBBA ROLL NO. 33 GUIDED BY MR. JAY PATEL
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SUBMITTED TO SAURASHTRA 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 own contribution and has been carried out under the supervision of Mr. Jay Patel of R.P. Bhalodiya College Rajkot.(Gujrat). This work has not been previously submitted to any other university for any other examination.

Date : Place : RAJKOT

Signature (Kamal V. Radhanpura)

ACKNOWLEDGEMENT
I feel great pleasure in submitting this report to you. Product project Report is crucial function, which must be done by every small-scale entrepreneur 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)

PREFACE
Indian management scenario seemed to have mix hopes at the end of 2000. SSI is the pillars of Indian Economy. Most of the Indian Business firms are small-scale firms. But, due to the success of globalization & liberalization people are less interested in such business. The main reason is they do not have expert management skills & techniques. So there is an urgent need for substituting traditional management by modern & scientific management. I am extremely happy to submit this project report for S.S.I under the prescribed syllabus of Saurashtra University. It is the best way to develop entrepreneurial skills in students. In this regard, I have prepared my project report on 5Gram GOLD RING MANUFACTURING. I have got a chance to acquire practical knowledge at the time of gathering the information.

INDEX

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

PARTICULARS
Project At A Glance Justification Of Location Product Uses Market Analysis Market Demand & Potential Manufacturing Process Manufacturing Capacity Schedule Pollution Control

Page No.
6 7 11 12 12 13 16 17

PROJECT AT A GLANCE

Name of the unit Address

Shriji Gold Pvt Ltd

: 203, Aabhushan Complex, Second Floor, Soni Bazar, Rajkot 360001 : : 5 Gram GOLD RINGS 203, Aabhushan Complex, Second Floor, Soni Bazar, Rajkot 360001. Off:- 91-0281-2238150 Kamal V. Radhanpura Syndicate Bank

Manufacturing of Location of Factor

Telephone No. Name of Promoters Bankers

: : :

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 most important decision because, once plant location is chosen, it cant be changed in the near future. So, mistake in location selection cant be corrected without heavy losses. The selection of location bears a lot of a factory affects it. The selected location of the GOLD CAST PVT.LTD. Is situated 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 been selected.

JUSTIFICATION OF LOCATION INDEX

NO.
1. 2. 3. 4. 5.

PARTICULARS
Availability of Raw Materials Promixity To Market Communication Labor Supply Power Supply

Page No.
9 9 10 10 10

AVAILABILITY OF RAW MATERIAL & EQUIPMENTS

In the business of ornaments casting, first important is of equipments. The equipment necessary for running business is available in Rajkot by HIGH-TECH INDUSTRIAL CORPORATION & UNIQUE INDUSTRIES, which provide the quality equipments. Raw material is also the basic input, which must be given equally importance. The all raw material is made available from HIGH-TECH INDUSTRIAL 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 the market, In this type of business producer has not to find the market but market 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 can come to office. More over if the factory is far from the office then the transportation becomes too Risky for transportation of Raw Gold to factory and 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 exporters of jewellery ornaments are mainly situated at Rajkot, Ahmedabad and Mumbai.

COMMUNICATION
Every business firm requires every type of business information in order to know position of labour, market, raw material and new trends in market. All such communication facilities are available in Rajkot. As the factory and office are both in the Soni bazaar, so all information 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 easily in 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 also never creates problem Thus the above all factors justify the selection of the location so the selection would definitely contribute to the profitability & success of plant.

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PRODUCT USES
In the market jewellery industry, varieties of ornaments are available such as, gents rings and ladies rings from light weight to heavy weight. More than this, there are also varieties in studded as well as plain rings. Ranges are 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 two according to their own design; wide selection options are available for customers. The buyer of jewellery ornaments can be divided in to two according to their utilization.

1. Dealers or Commercial Buyers. 2. Individual Buyer. Commercial buyer includes Dealers, Wholesaler, Agents, Show-room holders, Fashion-design institutes, Ornament House, etc. Individual buyer covers a person or family or a group who purchase in retail. The manufacturers generally deals with the commercial buyers, if individual buyer asks, they recommends the name & address of the dealers 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 is overcrowded with brands of Jewellery Ornaments. Experiment has shown that advertisement & Publicity of new designed ornaments have influenced the consumption pattern of jewellery ornaments. So, Small Scale Industries in Jewellery ornament manufacturing is increasing their market share by following promotion & advertisement policies of multinational companies & introducing the modern techniques. It has given better infrastructure and sales of Jewellery industry.

MARKET DEMAND & POTENTIAL

Jewellery ornaments manufacturing industries is still in the growing stage. Earlier the local producers with mostly unbranded or unaware brand were 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, GULF Countries the multinationals have created a good market in India. The factors governing the demand of jewellery ornaments are:

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1. 2. 3. 4. 5. 6.

Increase in The Population of Country. Rapid Industrialization In the Country Increase In Purchasing Power Of People. Durability Of Product Wide selection Opportunity Available Change In Fashion Industry. 7. Increase In living Standard. There has been an appreciable increase n export of jewelry Ornaments. In addition the boom period in the jewellery industry has widened the demand potential for jewellery products. So, the jewellery industries are having local, national & Multinational demand and potential.

MANUFACTURING PROCESS
The production process of the firm is somewhat complex, but the whole process is being managed by efficient administration and supervision and performed by most experienced person. The production process of jewellery ornaments includes following stages.

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MANUFACTURING PROCESS INDEX

NO.
1. 2. 3. 4. 5. 6. 7.

PARTICULARS
Preparation of pattern Raw material Die making department Wax department Vacuum department Vibrators of Finishing department Packing & Dispatching department

Page No.
15 15 15 15 15 16 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 by customer. 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, the dies 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 die department, 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 plastic transparent 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 finish ornament put it into vibrator & start the machine. After one or one & half hour the ornaments are finished and they are glittering & 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 are vacuumed. The main reason for such packing is to maintain its finishing and also for its presentation. The ornaments are dispatched through Angadiya or Agents. If exported, then by air agents.

MANUFACTURING CAPACITY SCHEDULE

INSTALLED CAPACITY CURRENT CAPACITY OR CAPACITY UTILIZED 2580 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 pollution control board, as the company having the all standards to get this certificate the company will not find problem in getting this certificate.

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FINANCE DEPARTMENT INDEX

NO.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

PARTICULARS
Total Fixed Assets Working Capital Requirement Total Cost of Project Source of Finance Interest Depreciation Cost of Production Profitability Statement Ratios Sales Forecast

Page No.
19 20 21 22 22 22 24 25 26 28

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TOTAL FIXED ASSETS

No.
01. 02. 03. 04. 05.

Particulars
Work Shop Machinery Furniture Electric fittings Other tools

Amount
4,00,000 85,920 80,000 24,000 16,000

Total

---------6,05,920 =====

MACHINERY
NO
01. 02. 03. 04. 05. 06.

PARTICULARS
Die press Polish Machine Machine Cut Painting Plant Roll Press Machine Metal melting furnace.

RATE
@ 13,440 @ 8,960 @ 20,000 @ 4,000 @ 20,000 @ 19,520

AMOUNT
13,440 8,960 20,000 4,000 20,000 19,520

TOATAL

85,920

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WORKING CAPITAL REQUIRMENT

RAW MATERIAL
No. Particular
1 2 3 4 Gold Silver Copper Cadmium

Quantity
11.000 kg. 265 gm. 500 gm. 250 gm.

Rate@Kg.
8,90,000 20,000 270 300

Amount
97,90,000 5,300 135 75

TOTAL

97,95,510

UTILITY
No.
1

Particular
Power

Quantity
6,000 Units

Rate
5 @ Unit

Amount
30,000

WAGE & SALARY

Particular
Manager Accountant Skilled workers Unskilled workers

No. Salary
1 1 2 5 5,000 2,500 1,500 500

Monthly
5,000 2,500 3,000 2,500

Total Yearly

13,000 1,56,000

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OTHER MISCELLANEOUS EXPENSES

Particular
Packing material Telephone Insurance Advertisement

Yearly
2,000 12,000 12,000 1,000

Total

27,000

TOTAL WORKING CAPITAL

Particular
Raw material Wage & salary Utility Other expenses

Amt.
97,95,000 1,56,000 30,000 27,000

Total

1,00,08,510

TOTAL COST OF PROJECT

Particulars
Fixed asset Working capital

Amount
6,05,920 1,00,08,510

Total

1,06,14,430

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SOURCE OF FINANCE
1. 2. Ownership capital 80% Borrowed Capital ICICI BANK 10% HDFC BANK 10% 85,60,000 10,07,000 10,07,000 --------------1,07,00,000 =========

INTEREST
1. 2. Ownership capital 8% Borrowed Capital ICICI BANK HDFC BANK 11% 11% 6,84,800 1,17,700 1,17,700 ------------9,20,200 =======

DEPRECIATION
No.
1 2 3 4 5

Particular
Machinery Work Shop Furniture Electric fittings Other tools

Amt.
85,920 4,00,000 80,000 24,000 16,000

Depreciation
20% 10% 15% 15% 15%

Amt.
17,184 40,000 12,000 3,600 2,400

Total

75,184

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VARIABLE COST
PARTICULAR
Variable Cost :Raw material Wage and salary Utility Other expenses [A.] Total Variable Cost Fixed cost :Depreciation Interest Insurance [B.] Total fixed cost [C.] Total cost [A.] + [B.] cost per piece. 1,10,15,894/2,400

AMOUNT
97,95,510 1,56,000 30,000 27,000 --------1,00,08,510

75,184 9,20,200 12,000 ---------10,07,384 1,10,15,894 4,589.95

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COST OF PRODUCTION
Installed capacity Total utilized capacity Total fixed cost Total variable cost Total cost Cost per piece (100%) (93%) = = = = 2,580pcs. 2,400 pcs. 10,07,384 1,00,08,510 1,10,15,894 4,589.95 Rs.

MARGIN OF TOUCH
Weight 5 gm. Sales cost price + profit = Touch 3.50 0.175 4,589.95 155.75 ---------4,745.70 ====== 2,400.00 0000.00 ----------2,400.00 ====== 1,13,89,689 Rate 890@gm. 155.75

Production - closing stock

Sales 2400 X 4745.70

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PROFITABILITY STATEMENT
PARTICULAR Sales Less Variable cost: raw material utility wage & Salary other expenses CONTRIBUTION Less: Fixed cost : Depreciation Interest Insurance PBT Less: Tax PAT 75,184 9,20,200 12,000 --------97,95,510 30,000 1,56,000 27,000 -------AMOUNT AMOUNT 1,13,89,680

1,00,08,510 ----------13,81,170

1,00,73,84 ---------3,73,786 59,136 --------3,14,650 =====

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RATIOS
EBIT ----------------------Total cost of prices 12,95,986 -------------1,10,15,894 11.75% X100

ROI

100

= =

NPR

= =

Net profit ----------Sales 3,14,650 ----------1,13,89,680 2.76%

X100

X100

GPR

= =

Gross Profit ---------------- X100 Sales 14,08,170 --------------1,13,89,680 12.36% X100

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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 Selling Price Variable Cost/Unit 4,745.70 4,170.21 5,79.45/ unit Total Fixed Cost -------------------Contribution / unit 10, 07,384 -----------575.47 1,750.48 Units BEP in Units X Selling Price 1,750.48 X 4,745.70 83,07,252.94 Rs.

= Contribution = = = BEP (IN UNITS) =

= BEP (IN Rs.) = = =

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BEP (IN %)

Total Fixed Cost X capacity Utilization ---------------------------------------------------- x 100 Total Fixed Cost + EBIT 10,07,384 X 93 ------------------------------------- x 100 {10,07,384 + 12,93,986} 40.71%

SALES FORECAST
Capital 1st Year 93% Sales ( in Pieces ) 2,400 2nd Year 95% 2,451 3rd Year 98% 2,528

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COST SHEET
Particulars
COST OF RAW MATERIAL CONSUMED Opening + Purchase - Closing _____ Raw material consumed Utilities PRIME COST Factory overheads Salaries Depreciation 4,129.6 2 WORKS COST Office overheads Salaries Packing Material Telephone Insurance Advertisement Interest Depreciation on furniture 4,566.7 9 Opening stock of finished goods
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Cost Per Piece

Rs.

Rs.

97,95,51 0 0000000 _______ _ 30,000 ________ 97,95,510 30,000 98,25,510

4,081.4 6 12.50 4,093.9 6

66,000 19,584

85,584 99,11,094

90,000 2,000 12,000 12,000 1,000 9,20,200 12,000

10,49,200 1,09,60,294 -- ___

- closing stock of finished goods COST OF PRODUCTION

------1,09,60,294 ======

COST SHEET
Particulars
COST OF RAW MATERIAL CONSUMED Opening + Purchase - Closing Raw material consumed Utilities PRIME COST Factory overheads Salaries Depreciation WORKS COST Office overheads Salaries Packing Material Telephone Insurance Advertisement Interest on Land Owned Depreciation on furniture Opening stock of finished goods - closing stock of finished goods COST OF PRODUCTION
30

2nd

3rd

1,00,06,166

1,03,22,150

--------------------___________ ____________ 1,00,06,166 1,03,22,150 30,645 31,613 1,00,36,811 1,03,53,763

66,000 14,688 1,01,17,499

66,000 11,016 1,04,30,779

90,000 2,043 12,258 11,800 1,022 9,39,989 10,200 1,11,84,811 -- ___ ---------1,11,84,811

90,000 2,108 12,645 11,600 1,054 9,69,673 8,670 1,15,26,529 -- ___ ---------1,15,26,529

======

======

Loan repayment schedule with interest

ICICI
Loan Installment Interest Remaining

10,70,000 8,56,000 6,42,000 4,28,000 2,14,000

2,14,000 2,14,000 2,14,000 2,14,000 2,14,000

1,17,700 96,160 70,620 47,080 23,540

8,56,000 6,42,000 4,28,000 2,14,000 --

HDFC
Loan Installment Interest Remaining

10,70,000 8,56,000 6,42,000 4,28,000 2,14,000

2,14,000 2,14,000 2,14,000 2,14,000 2,14,000

1,17,700 94,160 70,620 47,080 23,540

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8,56,000 6,42,000 4,28,000 5,40,000 --

TRADING & P&L

PARTICULAR INCOME Sales Total income / sales [A] Manufacturing expenses Raw material Utility Wages Total manufacturing expenses [B] GROSS PROFIT (A-B) C Administrative Expenses Depreciation Interest Insurance Other expenses Total administrative expenses [D] Operating profit (C-D) Less :- Tax NET PROFIT
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AMOUNT 1,13,89,680 ---------1,13,89,680 97,95,510 30,000 1,56,000 ----------99,81,510 ----------14,08,170 75,184 9,20,200 12,000 27,000 10,34,384 3,73,786 59,136 -----------3,14,650

======

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BALANCE SHEET
PERTICULAR
SOURCES OF FUNDS Ownership capital Borrowed loan:ICICI BANKHDFC BANK P&L A/C. TOTAL APPLICATION OF FUNDS Workshop (Net Block) Machinery (Net Block) Furniture (Net Block) Electric fitting (Net Block) Other tools (Net Block) Debtors Cash Bank TOTAL 1,10,14,650 ======= 36,000 68,736 68,000 20,400 13,600 19,00,000 68,07,914 21,00,000 ----------86,56,000 10,70,000 10,70,000 3,14,650 ------------1,10,14,650 =======

AMOUNT

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TRADING & P&L

PARTICULAR INCOME Sales Total income / sales [A] Manufacturing expenses Raw material Utility Wages Total manufacturing expenses [B] GROSS PROFIT (A-B) C Administrative Expenses Depreciation Interest Insurance Other expenses Total administrative expenses [D] Operating profit (C-D) Less :- Tax NET PROFIT AMOUNT 2nd AMOUNT 3rd

1,16,34,691 1,20,02,028 --------------------1,16,34,619 1,20,02,028 1,00,06,166 1,03,22,150 30,645 31,613 1,56,000 1,56,000 ----------1,01,92,811 ----------14,41,808 65,047 8,39,522 11,800 27,581 ----------9,43,950 4,97,858 96,357 -----------4,01,501 ====== ----------1,05,09,763 ----------14,92,265 56,403 7,66,075 11,600 28,452 ----------8,62,530 6,29,735 1,35,920 -----------4,93,815 ======

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BALANCE SHEET
PERTICULAR SOURCES OF FUNDS Ownership capital Borrowed loan:ICICI BANK HDFC BANK P&L A/C. TOTAL APPLICATION OF FUNDS Workshop (Net Block) Machinery (Net Block) Furniture (Net Block) Electric fitting (Net Block) Other tools (Net Block) Debtors Cash Bank TOTAL 32,400 54,989 57,800 17,340 11,560 20,90,000 60,99,412 24,00,000 -----------1,07,63,501 ======= 29,160 43,991 49,130 13,872 9,826 19,50,000 56,31,836 27,00,000 -----------1,04,27,815 ======= 86,50,000 8,56,000 8,56,000 4,01,501 1,07,63,501 86,50,000 6,42,000 6,42,000 4,93,815 1,04,27,815 AMOUNT 2nd AMOUNT 3rd

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TAXES
Rs.
PROFIT Exemption -------100001-150000 X 10% 150001-250000 X 20% 250001-209000 X 30% 373786 110000 ---------263786 50000 ---------213786 100000 ---------113786 113786 ----------

Rs.

5000 20000 34136 -------

TOTAL ------87700 -------

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NAME & ADDRESS OF SUPPLIER

HIGH-TECH INDUSTRIAL CORPORATION DARBAR GADH CHOWK, SONI BAZAAR, RAJKOT 360 002 PH. NO. 0091 0281 2238150

&
MANKI INDUSTRIES 304, GIRIRAJ CHEMBER, OLD GADHIVAD, RAJKOT 360 002 PH. NO. 0091 0281 2227086

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