Description
Plumbing is the system of pipes, drains fittings, valves, valve assemblies, and devices installed in a building for the distribution of water for drinking, heating and washing, and the removal of waterborne wastes, and the skilled trade of working with pipes, tubing and plumbing fixtures in such systems.
A FEASIBILITY REPORT ON
PLUMBINGACCESSORIES
GROUP NAME –‘I’ T.Y.M.B.A. 2005-2006
K.S.SCHOOLOF BUSINESS MANAGEMENT GUJARATUNIVERSITY AHMEDABAD.
Certificate
This is to certify that the project report – ‘Feasibility Report On Plumbing Accessories’ submitted by Group- I to K. S. School of Business Management, Gujarat University in the partial fulfillment of the requirement for the third year of Bachelors Business Administration. It is a bonafied work carried out by members of the group under my guidance and that no part of this report has been submitted for any other degree.
Project coordinator (Mrs. Radha Ravichandran)
MEMBERS OF GROUP – ‘I’
MAULI BODIWALA NISHITA DOSHI 3023 RAKESH KOLAWALE 3035 VIRALI MODI 3048 JIGISHA PATEL 3053 JINALI PATVA 3055 MANTHAN PRAJAPATI 3067 ESHA SHAH 3068 GAURAV SHAH 3074 LENCY SHAH 3082 VAIBHAVI SHAH
ACKNOWLEDGEMENT
An acknowledgment is something which is so often over looked by people who read a project best to us this is something very important, an integral part of this project as this expresses our heart felt gratitude towards all those people who helped us during the course of this project and in the end helped us give it the form as seen today. It is true that world outside name many of a time is different from what we have perceived. Similarly it is possible that the theoretical knowledge. Getting practical knowledge is an important thing, which is not possible without the support, guidance, motivation and inspiration provided by different persons. Hence, our project bears the imprints of many people. We are greatly indebted to Mrs. Sarla Achuthan, the director ofK.S.Schoolof Business Management, who gave us the valuable opportunity of involving ourselves in such project assignments. We wish to express our deep sense of gratitude to our esteemed faculties for their immense help and valuable guidance in conducting the study from its conception to its completion. We would like to thanks Mrs. R. Radha for her kind support and criticisms that she had expended to as at every junction of air journey. We want to thank Ismail sir, Tasneem madam, McDonald sir and Bindiya madam for their immense help and support. We are thankful to Mr. Kishanbhai Shah of Shriji Kripa Exports and Mr. Ashokbhai Shah without whose help, it was impossible to know the details of the production process of the plumbing fittings.
INDEX
WHAT IS A ‘FEASIBILITY REPORT’?
“A report which projects the practical viability of a venture with respect to different dimensions is called a FEASIBILITY REPORT” By feasible we mean that the venture must be practically possible with respect to the following aspect. TECHNICAL: The technology must be such that it must use the available resources in the most potential efficient manner and at the same time it should be easily obtained and practically possible implications in the different phases of work process. MARKETING: Just producing a product is not the ultimate end but rather a beginning. It must be readily accepted and adored by customer or market. FINANCIAL: It must assure a fair rate of return of the capital invested first to owners as well as it should be more acceptable and trustworthy to the third party i.e. Investors also. SOCIAL: It should not only be viable from the above mention angels but it must be such that it does not harm the society. The above four aspects should be effectively formulated. Project estimation parameters and road map to set up an enterprise inGujarat. 1) Identification ofProject:? Assessment of market potential. ? Assessment of status of technology available. ? Balance requirement and resource availability ? Ensure technical feasibility and financial viability.
2) Formulation of Project Proposal:? Market potential ? Decision about location ? Requirement of land and building ? Requirement of plant and machineries ? Requirement of other facilities and utilities ? Assessment of working capital ? Technology tie-up ? Schedule of implementation ? Legal entity of the organisation ? Assessment of project cost ? Tie-up means of finance ? Cost of production and profitability ? Break Even Point ? Cash Flow ? Debt service coverage ratio ? Other ratio to establish financial viability ? Economic benefit 3) Undertaking Government formalities:? To register the company at company registration office ? Building plant approval from Gujarat Industrial Development Corporation (GIDC) ? Water connection and power connection ? Clearance from pollution angle N.O.C. or consent from Gujarat Pollution Control Board. ? To use molasses send license in needed. ? A PAN card is needed for Sales Tax. 4) Actual Implementation:? After all government formalities promoters can start their project.
REASON FOR SELECTING THE PROJECT
Each and every individual, firm, industry and nation wants to be ahead of one another with the help of entrepreneurs, adequate and amiable labour force, proper transportation andother infrastructural facilitiesalong with the line help the business units to bloom. Plumbing Accessories is a product categorized as a durable good, because of vast range of availability of shapes. Its demand is increasing at 5% p.a. With the same hope of bright future, we propose to venture ourselves in the field of plumbing accessories where the scope of development is extended up to the horizons. As people have started thinking of investing in home and especially in bathrooms, the demand of plumbing accessories is increasing day by day. Today's world is "Glamour World". Living standards of people inIndiaare also increasing. Every person in the society is ready to pay higher amounts for things that can be considered as "status symbol".
PROFILE OF THE FIRM
Name of unit Constitution Factory address : EASY FLOWENTERPRISE : : PARTNERSHIP FIRM
Easy Flow Enterprise 57/7, GIDC Kerla Ahmedabad –Kandala Highway, Bavla. : Plumbing Accessories : : : Sep 1, 2004 Rs. 8029457 Partners? Contribution Rs. 4700365 Loan for working capital: Rs. 1600000 Loan from bank: Rs. 5000000
Project
Date of incorporation Cost of project Financing mix
PARTNERSHIP DEED
This agreement of partnership made at Ahmedabad on this theApril 1, 2006by and between: 1. MAULI BODIWALA 15, Shivali Appt., LawGarden, Ahmedabad –06. ESHA SHAH “Shri Sadan”, Pankaj Society, Ahmedabad – 07. GAURAV SHAH New Purvi Society, Vasna Barrage Road, Ahmedabad – 07. NISHITA DOSHI Riddhi Flats, Vasna, Ahmedabad – 07. RAKESH KOLAWALE Jawaharnagar Soci., Vasna, Ahmedabad – 07. VIRALI MODI Tripura Apartments, Navarangpura, Ahmedabad – 15. JIGISHA PATEL Rameshwar flats, Fatehnagar, Ahmedabad – 07.
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JINALI PATWA Jaydarshan Appartments, Paldi, Ahmedabad – 07. MANTHAN PRAJAPATI Abhishek Apartments, Bhattha, Ahmedabad – 07. LENCY SHAH Sarjan Apartments, Paldi, Ahmedabad – 07. VAIBHAVI SHAH C- 105 Sumey Apartments, LawGarden, Ahmedabad - 06
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Where as the above parties have decided to commence the business of manufacturing and/or trading of PLUMBING ACCESSARIES under the name and style of M/S EASY FLOW ENTERPRISE with effect from todayApril 1, 2006. And whereas the parties here to being the respective partners of this partnership herein after referred to as firm. And whereas it is deemed desirable that the terms and conditions to which the partners have agreed mutually to carry on the business in partnership may be reduced into writing.
HENCE THIS DEED OF PARTNERSHIP WITHNESSETH AS UNDER : Name : The business of the firm shall be carried on under the name and style of M/S EASY FLOW ENTERPRISE, however partners shall be entitled to change the name of the firm as may be mutually agreed upon. Place of the Business : That the principal place of the business of the firm shall be situated at Plot No. 42, Kerla Estate, Bavla. But the partners shall be at liberty to shift it to any other place Or places and to open branch or branches at any other place or places as may be agreed upon. Nature of Business : That the nature of business of the firm shall be manufacturing and/or trading of plumbing accessories. However the partners shall be entitled to carry on any other business or businesses under this partnership which they may decide mutually. Commencement : That this partnership shall be deemed to have been commenced on and with effect fromApril 1, 2006. Duration : That the duration of this partnership is not fixed and it shall be partnership “AT WILL”. Accounting Year : That the accounting year of the company shall commence from April 1 and will end on March 31 every year. The first accounting year of the firm will be from1-04-2006to31-03-2007. AccountsandRecords: That proper and regular accounts and records of the affairs and transaction of the firm shall be maintained and kept at the principal place or any other relevant or appropriate place or places in accordance with the requirements of the business of the firm.
Final Accounts : That the balance sheet as on the last day of the accounting year and profit and loss account for the year shall be prepared at the end of each accounting year. The profit and loss as the case may be of the year shall be worked out and be allocated between the partners as per the profit –loss sharing ratio. Capital : That the initial capital of the firm shall be Rs. 4700365 which shall be contributed by the partners equally. Drawings : That the drawing shall be made by partners as many times in the year as per the wish to the partners taking into consideration the respective accounts. Borrowing Power : That the film shall be entitled to secure deposits, borrow money and take loans from banks, financial institution and other corporate bodies or non corporate parties, the partners can also provide loans to the firm. Bank Account : That bank account in one or more banks will be operated in the names of the firm by any one or more of the partners and they shall be authorised to avail all types of facilities in the name of then firm that are generally allowed by the banks. Partners are also entitled to authorize any other person for operation of bank account through a power of attorney signed by all the partners. Remuneration : That all partners shall keep themselves actively engaged in conducting the affairs in the business of the partnership as working partners of the firm. It is hereby agreed that in consideration of the working partners keeping themselves actively engaged in the conduct of the affairs of the firm as working partners they shall be entitled to draw remuneration w.e.f., 1-42006 as under.
A) The remuneration payable to the working partners shall be calculated as percentage of the book profit for each accounting year (first accounting year from1-4-2006to31-3-2007and subsequent accounting year of 12 months) in the following manner. Name of Partners MAULI BODIWALA NISHITA DOSHI RAKESH KOLAWALE VIRALI MODI JIGISHA PATEL JINALI PATVA MANTHAN PRAJAPATI ESHA SHAH GAURAV SHAH LENCY SHAH VAIBHAVI SHAH Amount (Per Month) 20000 10000 10000 10000 10000 10000 10000 20000 20000 10000 10000
For the purpose of above calculation book profit shall be calculated on basis as defined in explanation 3 to section 40(b) of the income tax act, 1961 or any other applicable provision as may be in force for the income tax assessment of the partnership firm for the relevant accounting period. B) In case of loss remuneration will be paid to the working partners as paid in the case of profit. The partners shall be entitled to increase the above remuneration and may agree to pay remuneration to other working partner of partners as the case may be. The parties here to also agree to revise the mode of calculation the above said remuneration as may be agreed to by and between the partners from time to time. The remuneration payable to the working partners shall be credited to their accounts at the close of accounting period when final account of the partnership are made up and the amount of
remuneration the same in the manner referred to herein before. However nothing herein contained shall preclude the working partners from withdrawing any amount standing to the capital and/or current or loan account year share of profit for the relevant accounting year in such manner as may be decided by the partners by mutual consent. Interest : We do not provide interest on the capital up to the five years but then we will provide interest at the rate of 10% p.a. Share in Profit or Loss : The profits and loss will be distributed among all the partners equally. Modification : That the partners shall be entitled to modify the above terms relating to remuneration, interest etc. payable by executing supplementary deed and any such deed when executing shall have effect, unless otherwise provided, from the first day of the accounting period in which supplementary deed is executing and the same shall from part of this deed of partnership. Arbitration : That any dispute of difference of opinions among the partners as may arise during the continuation of this partnership shall be referred to arbitration and in such cases the provision of INDIAN ARBITRATION ACT, 1940 shall be made applicable. Application of Act : That with respect to all other matters not specified herein connected with this partnership regard shall be had to the law of partnership, for the time being in force. Amendment and Alteration : That the partners shall by mutual, oral and written agreement is at liberty to amend, alter, vary or add to the aforementioned terms and conditions. After hearing the translation of this partnership deed and fully understanding the terms and conditions, we the parties hereof put our hands to this deed on the date, month and year. Introduction
THE HISTORY OF PLUMBING
From ancient times, the rise and fall of the River Nile portended periods of famine or good fortune for the peoples ofEgypt. Other than wells, the River Nile is the only source of water in the country. During an idyllic year, the flooding of theNilewould begin in July, and by September its receding waters would deposit rich, black silt in its wake for farming. Before taming the river, however, the ancient Egyptians had to overcome the river's peculiar problem. TheNilesruns along an alluvial plain, the ebb and tide of theNilecorresponding to an annual movement of the ground. When theNileis the lowest, the ground completely dries up. When it floods, the water seeps into the dry soil and causes the ground to rise as much as a foot or two like some bloated sponge. As the inundation subsides the ground settles again to its original dry level, but never settles evenly. The nameEgyptmeans "Two Lands," reflecting the two separate kingdoms of Upper and Lower prehistoricEgypt- Delta region in the north and a long length of sandstone and limestone in the south. In 3000 B.C., a single ruler, Menes, unified the entire land and set the stage for an impressive civilization that lasted 3,000 years. He began with the construction of basins to contain the flood water, digging canals and irrigation ditches to reclaim the marshy land. From these earliest of times, so important was the cutting of a dam that the event was heralded by a royal ceremony. King Menes is credited with diverting the course of theNileto build the city ofMemphison the site where the great river had run. By 2500 B. C., an extensive system of dikes, canals and sluices had developed. It remained in use until the Roman occupation, circa 30 B.C. - 641 A.D. For pure water, the Egyptians depended upon wells. Their prowess in divining hidden sources is shown in the "Well of Joseph," constructed about 3000 B.C. near the Pyramids of Gizeh. Workers had to dig through 300 feet of solid rock to tap into the water.
PLUMBING FOR THE DEAD: Egypt's pyramid-temples which have withstood thousands of years of time also attest to the skill of the ancient construction workers. The earliest pyramids were built from 2660-2500 B.C., a period running parallel with the Sumer-Mesopotamians when they achieved their greatest advances in civilization. Yet any cultural ties thatEgypthad withMesopotamiahad vanished by this period. By 2500 B.C. the Egyptians were pretty adept with drainage construction, accentuated by the significance that water played in their priestly rituals of purification and those affecting the burial of the kings. Excavators of the mortuarytempleofKing Suhuraat Abusir discovered niches in the walls and remnants of stone basins. These were furnished with metal fittings for use as lavatories. The outlet of the basin closed with a lead stopper attached to a chain and a bronze ring. The basin emptied through a copper pipe to a trough below. The pipe was made of 1/16" beaten copper to a diameter of a little under 2". A lap joint seam hammered it tight. COPPERSMITHS: The ancient Egyptians were early developers of pipe and the techniques of making copper alloys. In the begimling, of course, their pipe and fittings were very crude. Like the Mesopotamians, they used clay pipe made from a combination of straw and clay. First it was dried in the sun, and then baked in ovens. As they improved upon their clay sewer pipe, the Egyptians were able to drain the low-lying portions of theNileValley, and gradually the entire region evolved into a fertile garden. The Egyptians were quite skilled in working metals. They melted metal in a crucible over a super-hot fire, the intense heat provided by men fanning the fire with blowpipes made of reeds tipped with clay. The molten metal was poured out and allowed to cool, then beaten out with smooth stones into sheets of the required thickness. It was then cut to shape. One explanatory picture in a tomb chapel describes the process as "causing metal to swim." The homes of the wealthy were airy and roomy, literally. There were bedrooms, servants' quarters, halls, dining rooms - and bathrooms. Actually, a "bathroom" was usually a small recessed room with a square slab of
limestone in the corner. There the master of the house stood while his slaves liberally doused him with water. The waste water ran into a large bowl in the floor below or through an earthenware channel in the wall where it emptied into still another bowl outside. Then that bowl was baled out by hand.
BUSINESS ENVIRONMENT
Past few years were not good years for the economy but now the economy is showing signs of recovery & expanding market. The level of income is increasing. People are more concern with the present merry making and luxurious rather than future saving. The major expansions are vertical giving way to urbanization and increasing the real estate. These circumstances give rise to high-rise development and thus expanding the market of PLUMBING ACCESSORIES. ECONOMIC ENVIRONMENT: The erection of a stable government together with a revival in industrial growth helped the Indian economy to grow about 7.9 % broadly in line with expectations. Economy shows signs of recovery, boom, increase in capital formation. These all things show a better market and a constant increase in demand of plumbing accessories.Indiaas being developing economy, any industry that helps to increase GDP will be entertained in the country. The contribution of Plumbing Accessories industry towards the GDP is about 12.8 %. POLITICAL ENVIRONMENT: The political environment for next few years seems to be stable. UPA government has just showed their power in the center since few months butGujaratgovernment is stable since three years. So, 'Easy flow' will not face any problems to start its business in the cities ofGujarat. It shows good sign for both industry and democracy.
LEGAL ENVIRONMENT : Plumbing Accessories are not included in the products that have to becompulsory registered.
GujaratPollution Control Board Certificate: The unit will be eco-friendly and there will be no emission of effluents by the company. Yet it has to obtain permission from Gujarat Pollution Control Board. It is easily available as unit in none polluting unit.
OTHERS: Being a factory "Easy Flow " will be governed by the following acts. (i) Indian Factories Act (ii) Industrial Disputes Act (iii) Payment ofGratuityAct, 1972 (iv) Payment of Bonus Act, 1965 (v) The Employees Provident Fund Act, 1952 (vi) EmployeeStateInsurance Act The provisions of above acts would be taken into consideration as and when need arises. SOCIAL/CULTURAL ENVIRONMENT: Nowadays, the meaning of having bathroom has become wider because people treat it as status symbol. That is why they consider plumbing accessories as ornaments of bathroom. In this view, we can expect that 'Easy Flow' can cover wider market. There is no biological harm to the workers in the plant. So 'Easy Flow' industry is very safe for society at whole. COMPETITION : InGujarat, there are some brands of plumbing accessories. 'Easy Flow' will have to face high competition due to many players in the market
PRODUCT DESCRIPTION
SELECTION OFPRODUCT: Having vast range of availability of design and different kinds of material, plumbing accessory is a product categorized as industrial goods. Its demand is increasing at faster rate per annum. And if rural market is properly taped by increasing sales, the growth rate may be increased. “Easy Flow” will be adhering to all the quality and safety norms. Keeping in mind the present and potential demand, we have selected these products for feasibility project. “Easy Flow” produces plumbing accessory using stainless steel and brass. These materials ensure that “Easy Flow” products provide not only quality but also proper water flow function and the most important, high durability. “Easy Flow” is going to produce various categories of plumbing accessory. ? Plumbing Fittings ? Kim nipple ? Drain strainer
PARAMETERS
SIZE: The plumbing accessories manufactured by “Easy Flow” would range as follows. ? ? ? ? ? ? ? ? ? ½” ¾” 1” 1.1/4” 1.1/2” 2” 2.1/2” 3” 4”
SPECIFICATIONS: Our products are available infollowing andplating. ? Nickel plating ? Chromium plating ? Brass plating ? Radium plating ? Copper plating Our products are available in black, white, granite, pearl finish, cherry. We also provide other colours as per customer?s requirements. Combination of two plating is also possible.
WEIGHT: Plumbing fittings : as per size Minimum: 100gms. Kim nipple: as per size Minimum: 100 gm Selection of product 220 gms.
Drain strainer:
THICKNESS: As per size Brand : We have decided the brand name for our product and that is “EASY FLOW”. And our punch line is “ Where durability matters…”. PACKAGING DESIGN : We will use plastic bags which avoid surface damages of the surface of our products. For outer packing we are going to use brown card paper to avoid damages in transit. The cost of plastic bag is Rs.0.50/- per plastic bag and brown cardboard cost Rs.5/per box. Supplier (plastic bag) : Avinash Enterprises, Nr.Lakhia?s garage, Mirzapur, Ahmedabad. Supplier (cardboard box): Ahmedabad. Gokulesh print-O-Graph, Nr.Kankaria Circle,
PLUMBING ITEMS : Building plumbing designis important in creating a robustplumbing system. Because having a proper drainage and water flow is extremely
important in avoidingplumbing problemssuch as back up and water pressure problems. Plumbingdesigns are difficult tasks for larger building because of the extensive piping required. Furthermore, creating enough water pressure to move water through the pipes must be carefully fit. Thereforeplumbingfittings play an important role in building plumbing design. Because once the plumbing has been completed and set in place, any future problems will be difficult to correct so here, durability matters a lot. SSS, SST, SS, ST, etc... These are the terms used in describing the connections for plumbing fittings. „S? stands for „Slip?, „Socket?, or „Spigot?, which means that the connection is a solvent weld (or glued) type. And both sockets and spigots can be threaded. Male and Female Many plumbing terms were originated by sex like male means spigot, female means socket. Spigots, Sockets, and Slip. A spigot is the equivalent of a male end. A socket is a female end. In other words, a spigot is to be fit into a socket. Slip can mean either a spigot or socket, but normally means socket, and the connection is solvent welded. Cu, Type K, Type L. All are abbreviations sometimes used for pipe and fittings. Insert A type of fitting used with the pipes.
THE BASIC FITTINGS
BellReducer.A bell reducer has female threads on both ends.Bellreducers are generally not available in PVC.
Cap.A cap may have a solvent weld socket end or a female threaded end. The other end is closed off. If a solvent weld cap is used to provide for a future connection point, be sure to leave several inches of pipe before the cap! When the cap is cut off for the future connection, there will need to be enough pipes present to glue a new fitting onto! When a solvent weld cap is butted right up against another fitting, making it possible to ever use the capped connection again and again!
Coupling.A coupling connects two sections of a pipe together. Couplings may have solvent weld socket ends or female threaded ends.
Cross.A cross connects four pipe sections together. Crosses may have solvent weld socket ends or female threaded ends (no female threads available for PVC). Crosses are special order parts at many suppliers. Crosses create a great deal of stress on the pipe because they have four connection points. Female Adapter.Female adapters are used to add a female threaded pipe connection on a solvent welded pipe. Never use female adapters when converting to a metallic pipe. The metal male pipe threads tend to split the PVC fittings.
Male Adapter.Male adapters are used to add a male threaded pipe connection to a solvent weld pipe section.
Plug.It is used to plug a unused fitting outlet. It may have female threads or a solvent weld spigot. In most cases, a threaded plug is used to provide a connection point for future use. Side Outlet Ell.Side outlet ells are an ell with a side outlet. They most commonly have two 3/4" or 1" solvent weld sockets, with a 1/2" side outlet having female threads. Side outlet ells are common in residential sprinkler systems, but are seldom used in commercial installations. The side outlet is listed last when stating the side outlet ell size. Tee. It is the most common fitting! It is available with all female thread sockets, all solvent weld sockets, or with opposed solvent weld sockets and a side outlet with female threads. Many configurations of „reducer tees' are available, meaning that one or more of the sockets is smaller than the others. Tees are always labeled as „NxNxN TEE? with the side outlet as the last size. The largest of the other two sockets is always listed first. Thus a 1x3/4x1/2 TEE SST has a 1/2" threaded side outlet (T for threaded) with the remaining sockets being 1" and 3/4" solvent weld sockets (SS for slip, slip). On a "bullhead tee" the side outlet is the largest socket on the tee (thus it looks somewhat like a bull's head I guess). The side outlet is referred to as the "bullhead".
SINKS: There are many types of sinks which are used for different purposes in which our drain strainers are used. They are as under.
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Bathroom sinks Kitchen sink Countersink Console sinks Countertop sinks Pedestal sinks Undermount sinks Wall-mount sinks Laundery sinks Glass Sinks Apron Front Sink Farmhouse Sink
These are big drain strainers
PRECISION U 2
PRECISION U 1 3/4
PRECISION U MAXI
PRECISION U 1
PRECISION U 3/4
PRECISION U 1 1/2
PRECISION U
MEDIAN 8S
MEDIAN 9
MINI
MEDIAN XL 6S
AXIS 6S
PRACTIKA
DIAMOND U 2
DIAMOND U 1 3/4
DIAMOND U 1
PRECIS U 1
PRECIS U 3/4
DIAMOND MINI
KINDS OF MATERIALS AVAILABLE : Stainless Steel, Oil Rubbed Bronze, Copper, Brushed Nickel, Satin Nickel, Polished Chrome, Polished Brass, Black, White, Biscuit, Brushed Chrome, Antique Brass, Weathered Copper, Chrome, Old Bronze, Brushed Nickel, Weathered Brass, Oil Rubbed Bronze, Polished Chrome, Satin Nickel, Verde Green, Antique Copper, Antique Brass, Polished Copper, Weathered Copper, Brushed Chrome, Wrought Iron and many other finishes.
CHROME STAINLESS BRUSHED STEEL COPPER
BLACK
WHITE
BISCUIT
BRASS:
Brass metalis an alloy created by combining zinc and copper. Distinct from bronze,brass materialsgenerally have a shiny yellow coloration that is highly desirable in home fixtures. The specific hardness and shades of brass depends on the percent makeup of each of its elemental components. Brass alloy importand export businesses are fairly common and provide a wholesale source for all kinds of brass parts. In theIndia, brassis imported fromChinaand other Asian countries with key production and cost advantages that get passed onto the consumer. Generally,brass decoris common in bathrooms and kitchens because it is visually appealing, while the metal is not used as heavily in machine parts. Brass suppliers will usually offer volume discounts on purchases.
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Brass is a yellowish alloy consisting mainly of copper and zinc -usually 67 percent copper and 33 percent zinc. Sometimes other metals are included in the amalgamation. Brass has boldness and impudent aggressiveness The higher the copper content, the more expensive the brass will be. Brass with a higher copper content will tend to be redder in color than brass with lower copper content Some types of brass are called bronzes, despite their high zinc content. An alloy is made up of roughly half copper and half zinc which has a nice yellow color. An alloy of copper and zinc, usually yellow in colour, therefore sometimes mistaken for gold. Brass was used by the ancient Romans for some of its base metal coins, and frequently used for counters and jetons in the late 18th century.
CHROMIUM: Chrome is ametal. As a general rule, and especially in the metals field, chromium is not useful as a solid, pure substance. Things are not made of solid chrome. Rather, when you hear that something is chrome, what is invariably really meant is that there is a thin layer of chrome, a plating of chrome, on the object (the bulk of the object usually being steel, but occasionally aluminum, brass, copper, plastic, or stainless steel). Chrome isalwaysapplied by electroplating; it is never melted onto parts in the fashion of chocolate on strawberries, or applied in any other way than by electroplating.
There are two different general applications for chrome plating: "hard chrome plating" (sometimes called 'engineering chrome plating') and "decorative chrome plating" (sometimes called 'nickel-chrome plating'). Hard Chrome Plating: Hard chromium plating is chrome plating that has been applied as a fairly heavy coating for wear resistance, lubricity, oil retention, and other 'wear' purposes. Some examples would be mold surfaces, thread guides etc. Hard chrome plating is almost always applied to items that are made of steel, usually hardened steel. It is metallic in appearance but is not particularly reflective or decorative. Decorative Chrome Plating: Decorative chrome plating is sometimes called nickel-chrome plating because it always involves electroplating nickel onto the object before plating the chrome (it sometimes involves electroplating copper on the object before the nickel, too). The nickel plating provides the smoothness, much of the corrosion resistance, and most of the reflectivity. The chrome plating is exceptionally thin. The chrome adds a bluish cast (compared to the somewhat yellowish cast of nickel), protects the nickel against tarnish, minimizes scratching, and symbiotically contributes to corrosion resistance. But the point is, without the brilliant leveled nickel undercoating, you would not have a reflective, decorative surface. STEEL:
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An alloy of iron with small amounts of carbon; widely used in construction; mechanical properties can be varied over a wide range. Steel is a metal alloy whose major component is iron, with carbon being the primary alloying material. Carbon acts as a hardening agent, preventing iron atoms, which are naturally arranged in a lattice, from sliding past one another. Varying the amount of carbon and its distribution in the alloy controls the qualities of the resulting steel. Steel with increased carbon content can be made harder and stronger than iron, but is also more brittle. ... Steel usually contains some other alloying elements such as silicon, manganese, etc. as well as impurities such as sulfur and phosphorus.
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Alloy of iron; the most common types are Cor-Ten and stainless
PLASTIC : ? A material made from petroleum capable of being molded, extruded, or cast into various shapes. There are many different kinds of plastic made from different combinations of compounds.
PACKAGING: Packaging is an important part of production process. It includes all the activities of designing and producing for container. For a product, the container is called a package and it includes three levels material. ? Primary package ? Secondary package ? Shipping package Advantages of packaging: ? We do well design packing because it can create convenience and promotion value also. ? We believe that packaging contribute to instant brand recognition so we give importance to packaging. The factors that we consider while doing packaging Consumer affluence : We check whether the customer is ready to pay a little more for convenience, appearance, dependability and prestige of better packages. If they are ready then we pay more attention towards packaging but if they are not ready to pay more for that at that time, we only do basic packaging. We do not go for secondary packaging. Steps that we take before packaging are as under: 1) Decision regarding packaging material: We do primary packaging with plastic bags. We also do secondary packaging with plastic bags. 2) Decision regarding size, colour and shape of package We pack the products into cartons as per their size. If total number of units is more then they are packed in big cartons and if they are less, they are packed in small cartons.
The colour of the cartons does not matter for us bur we insist for brown colour as it looks good. Brand name : We have all the cartons on which name of our brand is typed so it is also a kind of brand recognition 3) Testing of packaging We test the package as under. Engineering test is to be done to ensure that the package stands up under normal conditions. Visual test is to be done to ensure that the script is legible. Dealer testing to find that the dealers find it attractive and easy to handle. We do packaging when manual checking of products is done.. STEPS FOR PACKAGING : First of all, in the manual checking unit, a person keeps a close watch on each product and if he finds anything wrong with product?s quality, size or shape, he rejects that product. So this is one of the important steps of process. After that, each of these products is packed in small plastic bags. This is primary packaging.
Afterwards, these plastic packed products are again packed in one big plastic bag. That is called secondary packaging. Then they are packed in cartons this is called shipping packaging. Afterwards they are to be sent to customers. If they are produced in advanced they are stored in the godowns. For packing, cartons are acquired from specialized dealers appointed by the firm for packing purposes. They are made of special material so that they can last long and the products which are packed inside will not be defected.
Most of the times we use taping machine for packaging. After packing the products in cartons, these cartons are directly are sent to the storage area. These areas are much necessary for any company for retaining their manufactured items properly and for long duration storing safety. We have a storage area having 3 compartments differently divided according to their utilities. ? In first compartment, raw materials are to be stored. ? The second one is used for storing packed cartons. ? The third compartment is used to store goods which are specially manufactured according to any order and which are on the last stage of delivery.
EXPECTED CAPACITY OF PRODUCTION Working Days : 300 Days
PRODUCT MACHINE INSTALLED CAPACITY IN HRS INSTALL ED CAPACI TY IN UNITS 2880000 1728000 5400000 RUNNING HRS PER DAY TOTAL HOURS OF YEAR PER HR PRODC. IN UNITS UNITS PRODUC ED YEARLY 1440000 1620000 1440000 WORKE RS COST OF MACHINE
KIM NIPPLE
LEATHE MACHINE THREADING MACHINE ELECTRO PLATING MACHINE
2400 hrs 2400 hrs 900 hrs
4 hrs 7.5 hrs 1 hr (Only for 240 days)
1200 hrs 2250 hrs 240 hrs
1200 720 6000
1 S.Sk 1 S.Sk 2 S.Sk
374500 244500 375000
PLUMBING FITTINGS ( 9 in 1 )
FURNACE AND WATER EXTRUSION MACHINE ( 2 machines) 2400 hrs 4800 hrs 1440000 2880000 5 hrs 10 hrs 1500 hrs 3000 hrs 600 1200 900000 1800000
2 SK 2 S.Sk
175000 578000
4 S.Sk 1156000 780000 90000 375000 425000 160000
DRAIN STAINER
TURNING MACHINE THREADING MACHINE ELECTRO PLATTING MACHINE SHEARING MACHINE POWER PRESS MACHINE
2400 hrs 2400 hrs 2400 hrs 2400 hrs 2400 hrs
7200000 1920000 2880000 4320000 7200000
2 hrs 7.5 hrs 5 hrs 5 hrs 2 hrs
600 hrs 2250 hrs 1500 hrs 1500 hrs 600 hrs
3000 800 1200 1800 3000
1800000 1620000 1800000 2700000 1800000
1 SK 1 S.Sk 2 S.Sk 4 S.Sk 1 Sk 1 S.Sk
HYDROLIC DEEP DRAWING PRESS MACHINE BUFFERING / POLISHING MACHINE ( 7 Machines )
2400 hrs
7200000
2 hrs
600 hrs
3000
1800000
2 S.Sk
340000
2400 hrs
144000 7 hrs for 6 8 hrs for 1
15000
16800 hrs
1008000
15000 hrs
180
2700000
14 S.Sk
105000
ANNUAL PRODUCTION OF PRODUCTS KIM NIPPLE DRAIN STRAINER PLUMBING FITTINGS : : : 1440000 Units 900000 Sets(2700000units) 1800000 Units
TECHNICAL FEASIBILITY
SELECTION OF TECHNOLOGY: In order to keep the investment at a minimum necessary level, while ensuring global competitiveness machinery selection has carried out. There were two types of machinery available. (1) Capital intensive (Automatic machines) For this machinery, only operators for machine are required. The whole process is automated right from casting of raw brass to getting finished product. (2) Labour intensive Here,laborersare to be employed for running machinery as well as assembling the parts. We have adopted both the types of technologies as we need workers to maintain and operate machines and the packaging is completely done by the manpower.
PROCESS
Product –I: Name
lumbing fitting made of Brass Input: Brass Scrap Oil Nickel Chromium (Plating Material) (Polishing material) Luster 1) Melting of Brass Scrap: The basic raw material for this product is Brass scrap which is imported fromU.K.andU.S.This brass scrap is melted in the furnace at 800?In this process 2% impurities are removed and 8% is the burning loss so finally we can get 90% material for further process. The capacity of this furnace is 500 kg of brass scrap at a time and 2 semi skilled workers are needed for operation. 2) Making Pipes of Brass: The moulds of pipes are filled with this melted brass. The pipes are made as per the required size of finished products. After that these molds are put in water so they can become solid. Here, 2 semi skilled, workers are needed. 3) Polishing the rough pipes: For this process, Extrusion machine is needed. The rough pipes are polished with luster capacity is 10 pipes per minute. Here, 1 worker is needed for operation. 4) Cutting the pipes into required size: In this process, the in the Turning machine polished pipes are cut as per the required size to make the pipe fittings as per order. At this stage, 1 worker is needed on the machine. The capacity of the machine depends on the size 10 required. 5)Here, the small pieces made above are put into threading machine to give the proper shape so that the fitting can be easily fit into the pipes of relevant size. The capacity of it is 12 pieces.
I semiskilled worker is needed for this purpose. The wastage, which is in the powder form, is remelted to use it as a raw material. If we want the plating of nickel-chromium, we have to polish it again otherwise the output of the above process can be considered as the finished produce made of Brass. 6) Nickel Chromium Plating: Here, in Elector Platting Machine, the brass fittings are plated by nickel chromium solution to give the finishing like stainless steel. The capacity of the machine is 15-20 pieces/minute. Here, 2 semi-skilled workers are required. Now, this finished product is sent for inspection & then for packing. Packing: Each piece is packed in plastic bags & then these small packs are packed in a big carton. Now, they are sent for dispatching.
Plumbing fittings
Plumbing Fittings
Melting the brass scrap
Making pipes of brass
Polishing the rough pipes
Cutting the pipes and giving proper shape
Making threads
Nickel chromium plating
Packing
(2) Kim Nipple/Zinc Plated Nipple: Input: ERW Black Steel Pipe (Electro Resistant Welded Pipe) Zinc Process : (1) Cutting the Pipes: Here, ERW pipes are cut into required size 10 cm, 20 cm long in Lathe machine. (2) Making Threads: Each piece is fixed on threading machine to make threads of required size. 1 worker is needed & time consumption is 5 second per piece. (3) For Shining / Silvernization : At this stage, the pieces made in the above stages are put into Electro Plating Shining machine to give finishing of zinc plating. Here, the pieces are put in the liquid for silvernization. The capacity of this machine is 250 pieces weighing 25 kgs. in 1 minute. Now, this is the finished product.
Kim nipple
Kim Nipple
Cutting the pipes
Making threads
Silvernisation
Packing
Stainless Steel Strainer This product consists 3 pieces- base plate, grating and cover Input : Stainless Steel Sheet = 200 gms./ kgs. Luster (for polishing) Process (Base Plate) Stage - I : Cutting the sheet into required size : First of all, stainless steel sheet is to be put into the shearing machine which is operated by 3 to 4 semi-skilled workers.
Stage - II : Making hole in the piece : The pieces made in the above stage are put in the power press machine which is operated by one skilled worker. There is a slab in the machine which makes hole of required size in the piece. The size of hole depends upon size of piece. The capacity of this machine is to make hole on 50 pieces per minute.
Stage - III: Pressing : After making holes, the same square is to be put in different types of Hydrolic Deep Drawing Press machine to give a proper shape. 2 skilled of semi-skilled workers operate this machine. The capacity of this machine is to press 50 pieces per minute. Stage IV : Polishing : Here, base plate is to be put into Buffing or Polishing machine. Luster is used us polishing material. Its consumption is 3 grams per base plate. This polishing process takes 0.3 minute per base plate on each piece Luster is applied and pressed with the rotating buffing wheel to create the effect of mirror polish. For this, I worker on each side of Buffing machine is needed. Process of Grating: Inputs: Stainless Steel Sheet Oil: Stage - I : Stainless Steel Sheet is cut into required size in shape of circle in shearing machine. Stage - II : After the above process, the required holes and slits are made in the circle to give the shape of grating to it. And then the grating made to above process is to be fixed into the base plate. Process of Cover : Inputs: Stainless Steel Sheet Oil : Stage I : Required size of cover is to be cut from the stainless steel sheet in the shearing machine.
Stage II: Now it is to be pressed in the Hydraulic press machine to give the proper shape of cover. These three pieces are arranged in proper manner and this is the finished product. Now it is to be sent for quality control and then for packing. Packing : First of all each set is packed in plastic bags and this packing is put into the inner box of card-board. These small boxes are packed in the master box before dispatching.
Drain Strainer
Drain Strainer Set
Base plate
Grating
Cover
Cutting
Cutting
Cutting
Making hole
Making small holes
Pressing
Pressing the piece
Polishing
Packing
DESCRIPTION OF MACHINERIES
Hydrolic Deep Drawing Press Machine
Power Press Machine
Shearing Machine
Threading Machine
Furnace
Electro Plating Machine
Electro Plating Machine
Lathe Machine
Turning Machine
Extrusion Machine
MACHINERY
NO. NAME SUPPLIER MADE IN India India India HEIGHT WEIGHT (in ft.) (in kg.) 5 7 6 500 300 400 AREA (in sq. ft) 18 6 16 WORK
1. 2. 3.
4. 5. 6. 7. 8. 9.
Shearing Machine Power Press Machine Hydrolic Deep Drawing Press Machine Buffing/ Polishing Machine Extrusion Machine Turning Machine Threading Machine Electro Plating Machine Lathe Machine
Trimans Machines Apex Machines Chamunda Industries Chamunda Industries Apex Machines Swastik Machineries Swastik Machineries Apex Machines Swastik Machineries
Cutting the stainless steel sheets Making holes in the pieces of stainless steel sheet Giving a proper shape of strainer
India India India India India India
4 4 3.5 3.5 4 4.5
175 450 320 220 350 300
12 20 24 8 20 20
Polishing the pieces of stainless steel strainer Polishing the rough pipes of brass Cutting the pipes into small pieces as per the ordered size Making threads on the small pieces cut Polishing the small pieces with the solution of nickel chromium Cutting the ERW pipes into the small pipes as per the required size between 10- 20 cms. Plating the small pipes with zinc
10. 11.
ThreadingMachine AS per 7 Electro Plating Chamunda Shining Machine Industries
India
3.5
125
16
MACHINES
LEATHE MACHINE THREADING MACHINE ELECTRO PLATING MACHINE EXTRUSION MACHINE TURNING MACHINE SHEARING MACHINE POWER PRESS MACHINE HYDROLIC DEEP DRAWING PRESS MACHINE BUFFERING MACHINE / POLISHING MACHINE
NO. OF INSTALLED INSTALLED NO. OF COST OF MACHINES CAPACITY CAPACITY WORKERS MACHINES IN HOURS IN UNITS 1 2400 Hrs 2880000 1 S.Sk 374500 2 4800 Hrs 3456000 2 S.Sk 489000 2 4800 Hrs 5760000 4 S.Sk 750000 2 4800 Hrs 2880000 4 S.Sk 1156000 1 2400 Hrs 7200000 1 Sk 780000 1 2400 Hrs 4320000 4 S.Sk 425000 1 2400 Hrs 7200000 1 Sk 160000 1 S.Sk 1 2400 Hrs 7200000 2 S.Sk 340000 7 16800 Hrs 1008000 14 S.Sk 105000
SELECTION OF LOCATION
EASY FLOWENTERPRISE, 57/7, GIDC Kerla Estate, Ahmedabad-Kandala Highway Bavla. Location of any industry is very important aspect, while establishing an industrial unit. Any location so selected must have been evaluated properly from all points of view. The choice of location is influence by a variety if considerations proximately to raw materials and market availability of infrastructure, government policies and other factor. Several other factors have to be assessed before reaching a location decision: ease in copy with environmental pollution, labor situation, climatic condition and general living conditions. We required 1175 sq. meters land for our plant. Cost of different Areas: Area Cost (Rs.) Vatva 900 / Sq. meter Odhav 1000 / Sq. meter Kerla 125 / sq. meter Gandhinagar 1200 / sq. meter After having selected the location the site for the plant is to be finalized, keeping certain factor in consideration. The options available to us for plant insight are Kerla, Vatva, Odhav and Gandhinagar. And we have selected Kerla due to the following reasons. REASONS FOR SELECTING THE LOCATION: ? The cost of land is low. Kerla estate is recently open for the industrial development. ? Skilled persons and workers are easily available from near places. ? Power in GIDC area is easily available at the doorstep. ? Other facilities and utilities are provided by GIDC. Like water, roads, etc. ? NA permission is not required. The Government cannot take any steps against firm without prior notice.
UTILISATION OFPLACE: The total area of plant is 1100 sq. meter. The total construction area is 5600 sq. feet. 1. Security Cabin: It is located at the right side of our unit. 2.Parking: A parking plot is separate for two wheelers, cycles and cars. 3.Gardens: There are four gardens in the land. 4. Partners’ cabin: It has dimension of 24.6 x 24 feet. 5. Manager’s office: It has dimension of 10.9x12 feet where the manager is doing his work. 6. Accountant’s Cabin: Its area is 12.9x12 feet. 7. Supervisor’s cabin: Its area is 9x12 feet. 8. Lunch Room: Its area is 12.9x19 feet. 9. Packingroom: After the process the finished goods are kept here to packaging. It has the dimension of 24.6 x 24 feet. 10. Store room: ? For raw material: Its area is 18x31.3 feet. ? For finished goods: Its area is 19x24.9 feet. 11. Furnace: The area allotted for it is 12x12 feet. 12. Process Department: Its area is 42x32 feet.
Plant lay out
Office lay out
Space planning
Feasibility 2
PRICES OF RAW MATERIALS: Product Drain Strainer Kim Nipple Plumbing Fittings Raw Material Steel Luster ERW Zinc Brass Nickel Chromium Luster Per Unit Requireme nt 0.2 Kgs. 0.5 Pieces 0.25 Kgs. 0.10 Kgs. 0.2 Kgs. 0.3 Kgs. 1 Piece Price (Per Unit) 50 20 32 120 185 10 20
RAW MATERIAL: Suppliers ? Stainless steel: ? Luster: ? ERW pipes: ? Zinc: ? Brass: ? Nickel Chromium:
Steel Authority of India Ltd. Mahesh Metals, Rakhiyal, Ahmedabad. Mahavir Metals, Rakhiyal Ahmedabad. Slavastic Pipe Ltd. Rita Chemicals, Mumbai. Wholesalers of brass scrap from Ahmedabad. Wastage of brass from threading machine Rita chemicals, Mumbai
ORGANISATION CHART
MANAGING PARTNER
PRODUCTION MANAGER
FINANCE MANAGER
GENERAL MANAGER
H RE M
SUPERVISOR
ACCOUNTANT
COMPUTER OPERATOR
SALESMEN
WORKERS
STORE KEEPER
JOB SPECIFICATION AND JOB DESCRIPTION Job Title Education Mental Abilities Special Abilities : : General Manager Master in Business Administration (MBA) + Additional qualification. The candidate should be alert, stable and should have great presence of mind. His mental abilities would be good with figures. He should be able to deal with large number of people under him. He should get the needed resources of the organization, put them into proper use and strive to reach the organizational goals. The candidate should have knowledge about the present scenario of the market. The candidate should have an experience for the same post for at least 3 years. He should have to supervise working of the manager under him. He should give some guidance, inspiration and implement required controls. He should be regularly updated regarding the market condition and should even change the strategies, if needed. He should investigate the differences and take required actions. Average starting salary is Rs. 20000/- p.m.
:
Specials Kills Work Experience Supervises Functions
: : : :
Responsibilities :
Salary
:
Job Title Education Mental Abilities Special Abilities Specials Kills : : :
:
Work Experience
:
Reports To Supervises Functions Duties
Responsibilities
: : : : :
Salary
:
Production and Purchase Manager Master in Business Administration (MBA) + Additional qualification. The candidate should be alert, stable and should have great presence of mind. He should be able to deal with creditors and suppliers. He should be able to achieve targeted purchase and production. He should have some special skills regarding purchase and production methods. He should have some special knowledge regarding the market scenario. He should have good command over at least three languages namely English, Hindi, Gujarati. He should have good communication of skills. He should have worked in purchase and production department of any organization manufacturing bathroom fittings products. He should have an experience for the same post for at least two years. To the General Manager He Should have to supervise the work of supervisors and stock-keeper. He should give some guidance, inspiration and help to supervisors and stock-keeper. He should keep a check over the purchase and production policies of the competitors. He should have regular check of stocks purchase and manpower conditions. He should be regularly updated regarding the market condition. Average starting salary is Rs.20000/- p.m.
Job Title Education Mental Abilities Special Abilities Specials Kills
Finance Manager : Master in Business Administration (MBA) + Additional qualification. : The candidate should be alert, stable and should have great presence of mind. He should be co-operative and quick in calculation of mathematics. : He should be able to deal with people under him.
: He should have good knowledge of finance sources and better way of spending the sources. He should have knowledge regarding the market scenario. He should have good command over at least three languages namely English, Hindi andGujarat. Work : He should have worked in finance department of any organization. He should have an experience for the Experience same post for at least two years. Reports To : To the General Manager Supervises : He Should have to supervise the accountants and regular accounts of the organization. Functions : He should give some guidance, inspiration and help to accountants when needed. Duties : He should keep a check over good and rising finance policies. Responsibilities : He should have regular check of accounts. He should be regularly updated regarding the market condition. Salary : Average starting salary is Rs-20000/- p.m.
Job Title Education Mental Abilities Special Abilities Specials Kills Work Experience Reports To Supervises Functions Duties : : : : : : : : :
Responsibilities : Salary :
Supervisor / Trainer Diploma or specialization in a particular field. The candidate must be capable of assuming increased responsibility within a year. He should be able to deal with different types of workers like skilled, semi-skilled and unskilled. He should have some special skills. He should have good communication of skills. He should have an experience of minimum one year preferably in an industrial organization. To the Production and Purchase Manager. He should have to supervise the workers, security guards, helper/peons and the production process. He should give some guidance, help during the training process. He should train the employee/ workers in their work, organize various programmes, solving the problems related to the workers. He should follow-up the training process, motivate the employees and maintaining industrial relations. Average starting salary is Rs. 10000/- p.m.
Job Title Education Mental Abilities Special Abilities Specials Kills
Store Keeper : He should be 12 pass through commerce stream. : He should have good remembrance power and friendly nature. : He should have ability to work with others.
th
: He should be good in filing the documents, checking the records, compiling the data, initiating the reports and keep the records accurate and up-to-date. Work : Fresher are invited and experience would be entertained. Experience Reports To : To the Production and Purchase Manager. Supervises : The stock of all the items. Functions : He should check the materials, requirements along with the orders to be dispatched. Duties : He should place the orders for the goods at the right time, checking quality and quantity of the goods and maintaining the stock register. Responsibilities : He should try to reduce wastage, keep the stocks in limits. Salary : Average starting salary is Rs. 3750/- p.m.
Job Title Education Mental Abilities Special Abilities Specials Kills
Salesman : Graduation. : The Candidate should be alert, stable and should have great presence of mind. : He should be able to achieve targeted sales
: He should have some special knowledge regarding the market scenario. He should have good command over at least three languages namely English, Hindi, Gujarati. He should have good communication of skills. Work : He should have worked for six months in the same field. Fresher are invited. Experience Reports To : To the Sales Executive Supervises : He should supervise the sales of the unit. Duties : He should fulfill the demand of the customers. Responsibilities : He should give proper service and information to the customer regarding the product. Salary : Average starting salary is Rs. 3000/- p.m.
Job Title Education Mental Abilities Report To Functions Duties
Helper / Peon : H.S.C : The Candidate should be of sound mind.
: To the Supervisor. : He should help to serve the customer in a better way. : He should serve water/ tea/coffee/cold drinks to the guests. Responsibilities : He should undertake the orders given by his superiors. To clean the office daily morning before the office work starts. Salary : Average starting salary is Rs. 2500/- p.m.
Job Title Education Mental Abilities Report To Duties
Workers : S.S.C. (skilled), Well versed with reading and writing skills (semi-skilled) : The Candidate should be of sound mind. : To the Supervisor. : He should be good in working on the minor machines with sound knowledge.
Job Title Education Mental Abilities Special Abilities Report To Supervisors
Security Guard : S.S.C. or some level of education. : The Candidate should be polite and able to convince.
: He should be strong enough to stop any stranger to enter the premises. Guard the place from the thieves. : To the Supervisor. : The people entering in and going out from the industry area, Check everyone of them. Duties : He should restrict any unknown person to enter. Responsibilities : He should responsible for the parts/vehicle stolen from the premises. Salary : Average starting salary is Rs. 2500/- p.m. (Night shift) Average starting salary is Rs. 2500/- p.m. (Day shift)
MANAGERIAL SKILLS
Ms. Mauli Bodiwala: M.B.A. (H.R.) Along with her specialization in HRM, she holds acertificate course forHuman Psychology. She will be the head of the HRD, dealing with the personnel recruitment, selection and training of the staff as well as customer inquires, queries and complaints, if any. Mr. Gaurav shah: M.B.A. (Finance),C.A. He is the head of the Finance Department, tackling with all financial aspects and accounting system. Investment and financial decisions will be taken with joint consent with Mr.Rakesh Kolawale. Ms. Esha Shah: M.B.A. (Managing Partner) Along with that, she is a certificate holder forManagement in Mass Media. She is the head of Sales and Marketing Dept, dealing with communicating the product to customers through advertisements and respective budgets.
.
COST OF MANPOWER:
Managers (4 managers @ Rs. 20000 per month) Partners (8 partners @ Rs. 10000 per month) Accountant (1accountant @ Rs. 7500 per month) Computer Operators (1 operator @ Rs. 7500 per month) Peons (5 peons @ Rs. 2500 per month) Security Guards (2 guards @ Rs. 2500 per month) Gardener (1 gardener @ Rs. 1500 per month) Salesmen (6 salesmen @ Rs. 3000 per month) Production Manager (Rs.20000 per month) Supervisor (Rs. 10000 per month) Two Technician for Each Product (Each Rs. 5000 per month) Two Store-keepers (Each Rs. 3750 per month) Other Supporting (11workmen for each product) Workmen (Each Rs. 2500 per month) 960000 960000 90000 90000 150000 60000 18000 216000 240000 120000 120000 90000 990000
AMENITIES TO WORKERS: The amenities provided to the workers at the workplace are as under. ? ? ? ? ? ? Drinking water Urinels and laterines First aid Lunchroom Recreational facilities Other faciltilies
Drinking water: We have made effective arrangements to provide wholesome drinking water for all workers. The cooler has been kept in the lunchroom so the workers can easily get cold water after taking lunch and whenever needed. And on that place, it has been clearly marked in Gujarati which is the language understood by majority of the workers. Urinals and laterine facilities: There are sufficient number of conveniently situated & accessible latrines and urinals. All of them are maintained in clean and sanitary conditions. Laterines:
? ? ?
are in a cubicle or room fitted with a door and located in a position that allows privacy. have fresh air. have an adequate supply of water and toilet paper.
First aid Workers have reasonable access to appropriate and adequate first aid equipment.
? ?
The equipments of first aid are mauntained in a separate cupboard. Respective medicines for different purposes are maintained separately and marked in Gujarati which is understood by most of all the workers and employees.
Lunchroom: We provide a separate area for taking lunch to the workers. Workers have reasonable access to a room or sheltered area to eat meals or take breaks.
? ? ?
There is no health or safety risk in the lunch room. The room has been maintained in hygienic conditions and kept clean. It has adequate space, seating arrangements and facilities for washing and storing utensils.
Recreational facilities:we have make provision for recreational facilities for the workers and their families. ? Feast is to be given to the workers once in a month. ? Get to gather is arranged once in a year for the workers with their families. Liability of employer in case of accidents resulting from collapse of houses provided by him:If the house collapse is not solely or directly attributable to a fault on the part of the occupant or to a natural calamity, the employer shall be liable to pay compensation to the worker or his kin suffering injury or death.In order to claim this compensation, the worker or his next of kin or his authorised agent must write to Labour Commissioner within 6 months of the accident.The compensation would be paid under the Workmen's Compensation Act, 1923. Other facilities: We provide the workers umbrellas, blankets, raincoats or other like amenities for the protection of workers from rain or cold
WORKERS’ RIGHTS : Hours and Limitation of Employment Weekly hours: ? 48 hours a week for adult workers ? 27 hours a week for adolescent or child workers Maximum hours of work are 9 hours a day and 54 hours a week. The worker is entitled to overtime wages at twice the rates of ordinary wages. He or she also has a right to one weekly holiday. Working on a holiday or the day of rest of the worker will entitle worker for double the wages as in overtime work. The notice of period of work It has to be displayed and correctly maintained. We can refuse to employ a worker for any day on which he is more than half hour late from the time displayed on notice of period of work. No Night for women and children: Women and children can be employed only between the hours of6 a.m.and7 p.m.unless permitted by the State Government. Non-adult workers to carry tokens: No child or adolescent will be allowed to work, unless we have a certificate of fitness from the Certifying Surgeon. The token that non adult worker is required to carry bears a reference to this fitness certificate valid for twelve months. The fee for the fitness certificate, if any, is to be paid by us and cannot be recovered from the young worker or his or her guardian. Annual leave with wages:An adult worker is entitled to one day paid; leave for every twenty days of work. A Child or adolescent is entitled to one day
paid leave for every fifteen days. Half or more than half day's work is counted as full days' work. This earned leave excludes. Holidays The worker is entitled to average daily wages (including D.A., cash value of food and other concessions, if any allowed to him by the employer). Maximum earned leave that can be encashed is 30 days. If the Employer terminates the services of the worker who has to his credit earned leave, then he shall pay the worker the average daily wages in respect of the leave not taken [Section 30-31].
Marketing feasibility
MARKETING
Marketing is the process of planning and executing the conception, pricing, promotion and distribution of idea, goods and services to create exchanges that safety individual and organisation goals. While marketing management is the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer value. Thus the most important thing in marketing is to forecast where customers are moving and to be in front of them so the aim of our firm is to satisfy our customers as much as possible. Our products are not bought directly by the users i.e. layman. Contractors and plumbers or wholesalers buy these products and then they are to be fit in the users? places. So the users are not directly in touch with us. Besides, the products like tee, elbows or kim nipple are used in showers, taps, wash basins, etc. Therefore the users of these products do not concern with the manufacturing of the plumbing fittings. Thus we have to serve the business market i.e. the contractors, wholesalers, and the manufacturers producing the products in which our products areused as intermediate goods. Business Market: The business market consists of all the organisations that acquire goods and services used in the production of other products or services that are sold, retended or supplied to others. Characteristics of our business market: 1) Fewer buyers: The number of buyers of our products is quite less than the consumers or FMCG products. Contractors, plumbers and the producers of the goods in which our fittings are used, are the only buyers. 2) Larger buyers: Though the number of buyer is less but they used to makepurchases in bulk.
3) Close supplier customer relationship: Because of the smaller customer base and the importance and power of the buyers, we are frequently expected to customize their offering to individuals business customers needs. And we also expect this practice from our suppliers of raw material. Thus, the closer the relationship with customers, it is better for our firm. 4) Derived demand: The demand for our products is usually derived demand. It is derived from the demand for the goods in which our products are used i.e. taps, showers, etc. Besides, it depends also on the number of contracts of pipeline or plumbing our buyers get. Higher the number, higher will be the sale of our products. 5) Direct purchasing: Business buyers often buy directly from the manufacturer rather than through intermediaries. So in our case, Contractors or other manufacturers usually prefer to buy our products from our factory itself.
Variables taken into consideration for segmentation of business market: Demographic: Industry:Construction, plumbing accessories fittingsindustries are to be served by us. Location: We plan to serve the wholeGujarat.
and
bathroom
Operating Variables: User or non-user status: We serve heavy users, medium users, light users and try to convert non- users into users through various promotional strategies. Customer capabilities: We serve customer needing many or few products. Situational Factors: Specific Application: We focus on certainapplicants of our productrather than all applications. Size of order: We focus on bothlarge and smallorders.
EVALUATION AND SELECTION OF THE MARKET SEGMENTS: Market segmentation: We first identify the distinct group of buyers who differ in their needs and preferences. And then we make the products as per their requirement so that their need is satisfied and they become loyal to us. As there exists so many types of plumbing fittings, which all are almost same but they differ in size, colour and shape, we have to identify which type of product is required by our customers and it is to be produced as per their requirements. So we have to identify the segment and decide the target. It is beneficial to us in the following ways. 1. 2. 3. 4. 5. We can create more fine-tuned product. Price of product will be almost as per target segment. We can have easy distribution and communication channels. We can have clear picture of our competitors. We can know which other firms are also going for same segment.
Niche market: As we are producing products as per orders, we can say that we serve a kind of niche market. We produce as per particular customer?s demand. And these products can satisfy need of only that customer and not anyone else. Local market: We prefer local marketing in initial years because it is important to satisfy the huge local market. Besides, it is difficult to cover the market of the whole country while commencing the manufacturing. We prefer only local market which includes Ahmedabad,Rajkot, Kadi, Bavala and Baroda etc. So we advertise in only that particular region and not to anywhere else. But before advertising, we found out customers needs and preferences through demand analysis. Patterns of market segmentation : Among all the patterns of market segmentation, we fall under the category of Homogeneous Segments because there is not any noticeable difference in the products of all the manufacturers of the plumbing fittings.
Our consumers? preferences scatter through out the space, which indicates that consumers vary greatly in their preferences. So our brand would stand near to the other competitors. We try to locate our brand near to the corner to attract a customer group that has not been satisfied with the other brands. While segmenting the market, we took the following steps. We grouped the customers into segments based on similar needs. For each segment, we found out various behaviors and made that segments distinct and identifiable. We found out attractiveness of each segment. Determination of profitability of the segment Finding unique customer needs and characteristics
Expansion of segment positioning strategy Among these three, we fall in the category of homogeneous preferences. Our consumer preferences generally do not scatter through out the space that indicates that consumers do not vary greatly in their preferences. So our brand would stand near to the other competitors.
How we have segmented market We group the customers into segment based on similar needs For each segment we find out various behaviors and make that segment distinct and identifiable We find out attractiveness of each segment Determine segment profitability Find out unique customer needs and characteristics Expand segment-positioning strategy
ESTIMATE FUTURE DEMAND: We estimate the future demand to identify market opportunities. Then we do sales forecast. The measures of market demand: 1 2 3 4 5 6 All sales Industry sales Company sales Product line sales Product from sales Product item sales
From that, we have measured the market demand on basis of product item sales. We have estimated it in this way so that we can get exact idea for raw material required, planning production, and borrowing cash for each product. We have forecastedregional demand. We have measured the demand in targeted market, which is only the contractors, builders and dealers. We forecast demand with the help of outside sources such as marketing firms, which develop a forecast by interviewing customers, distributors and other knowledge parties, and specialised forecasting firms, which produce long-range forecasts of particular macro environmental components, such as population, natural resources, and technology. Three main bases of our forecast are as under. ? What people say. ? What people do. ? What people have done.
4 P’S OF MARKETING
Marketing mix Product
PRODUCT: “A product is anything that can be offered to a market to satisfy a want or need of the consumer”. It represents bundle of satisfaction that a consumer buys. Our products are as under. 1) Plumbing fittings
Price
Place
Promotion
2) Drain strainer
A drain strainer is used in every sink or bathroom. It is used for effective removal of water. They are found in different types of material, sizes, and prices as per the requirement. There are mainly two types of drain strainers. For kitchen a) Small drain strainer b) Big drain strainer
For bathroom
a) Small drain strainer
b) Big drain strainer
We produce these products in different sizes, shapes, and colour. We also produce the products as per special requirement of consumers. The description of our products and their types has been discussed earlier.
Product Levels: There are five levels of the product. Each level adds more customer value.
Core Benefit Basic Product Expected Product Augmented Product Potential Product
(1) Core Benefits: It is the fundamental product or service that consumer is really buying. ? Ourplumbing fittingsare used to join the pipes or the other components of the products like taps, showers, wash basins, sinks, etc. ? Thedrain straineris to be fit in the bath rooms, kitchen or in the sink. (2) Basic Product :? Ourplumbing fittingsjoin the pipes or the other components in such a way that the fittings is long lasting.
? Thedrain strainerallows unnecessary water gathered in the bathroom or sink to flow very easily. (3) Expected Product:It is a set of attributes & conditions that buyers normally expect while purchasing a product. ? Theplumbing fittingsjoin the pipes or components in such a way that water cannot be leaked from the pipes or from the joints of the pipes. ? Thedrain strainerhas small holes in the grating so that unnecessary liquid can flow into the drainage system and any solid thing cannot go inside it so the strainer will not be clogged easily. Besides the lid is provided with it so the insects from the main drainage system cannot come outside in the bathroom or sink. ? Besides, our all products with along withkim nippledo not allow the process of oxidation i.e. the problem of rust or red oxide will not arise even though all of them will be constantly in touch with water. (4) Augmented Product It generally exceeds customers? expectations. ? Our plumbing fittingsare polished with nickel chromium and zinc. (5) Potential Product Here, new ways to satisfy the customers & to differentiate the products from the competitors are to be found out. ? We are planning to introduce thedrain strainerwith a special lid, which need not be opened with hand. It can be opened by foot only. So there is no need to spoil hand while opening the lid of the drain strainer.
PRODUCT HIERARCHY: The product hierarchy stretches from basic needs to particular items that satisfy needs. There are six levels of product hierarchy. Need family: The core need underlines the existence of a product family. For us, it iseasy flow of water. It is applicable to both plumbing fittings and also drain strainer. Product family: All the product classes that can satisfy a core need with reasonable effectiveness. For us, it isplumbing items. Product class: A group of products within the product family recognised as having a certain functional coherence. For us, it isdrain strainer and connectors. Product type: A group of items within a product line that share one of the several possible forms of the product. For us,other plumbing itemsare product type. Item: A distinct unit within a brand is known as item. Wedon?t haveany distinct item within a brand.
PRODUCT CLASSIFICATION
Durability and tangibility
Consumer goods classification
Industrial goods classification
Nondurable goods
Convenience goods Shopping goods Specialty goods
Material and parts Capital items
Durable goods
Services Unsought goods
Supplies and business services
? Our goods aredurable goods. For us, durability is the important feature. As they will not have to face the problem of oxidation and because of good material, they can last long. ? Our goods aresupplies goods. There are two types of supply goods. 1. Maintenance and repairs 2. Operating supplies Our products fall into the category ofmaintenance and repairsas they help to maintain our customers? plumbing structure. PRODUCT LINE: A group of products that are closely related can be termed as a product line. Our product line is as under.
Product line (product width 3)
Plumbing fittings
Drain strainer
Kim nipple
Bellreducer Kitchen drain strainer Cap Bathroom drain strainer
Coupling Small Cross Big
Female adaptor
Male adaptor
Plug
Side outlet ell Tee
PRODUCT MIX:
Product mix is the set of all the products and items that a particular seller offers for sale. PRODUCT LINE LENGTH: If we feel that we havenot been utilising our installed capacityrationally and we can increase profit byadding a new product, we can produce other types of plumbing fittings that are required by the customers as per their order. This type of strategy helps us in protesting against economic ups and downs. In this way, we are able to cover more market share and market growth. It will alsoincrease our profitability. It helps in utilising the excess capacity. We can lengthen our product line by two ways.
Line stretching
Line filling
Up market stretch Down market stretch Two way stretch
As our products cover the middle market, we have decided to stretch our product line in both the ways. So it istwo way stretching. We provide high quality products at high prices and also medium quality products at lesser price compared to dearer priced products. Apart from there can be variation of plating on products. But we produce these products as per consumers? requirement and their orders.
Line filling:
We also lengthen our product line byadding more itemswithin the present range. For that we just have to change moulds while producing products. Our intentions behind doing this are as under. ? To earn incremental profits ? To satisfy dealers who complain about lost sales because of missing items in line ? To utilise excess capacity ? To plug holes to keep out competitors We provide different sizes so that customers can get the product as per their requirements. There isnoticeable differenceamong all these products. But we must check that whether these sizes meet customers? needs or not. They must satisfy the internal need of customer.
Size
We provide different sizes, which are mentioned earlier. But we must take care that there is relative difference among them rather than absolute difference.
POSITION IN THE PRODUCT LIFE CYCLE: The bell-shaped curve of the product life cycle 1 divided into four stages shown as under: The products like kim nipple and other plumbing fittings have been used for number of years but they are made of galvanize or plastic especially in our country. But we made of galvanize or plastic especially in our country. But we make these products of brass which are quite new in the Indian market. We arenot the pioneer of plumbing fittings of brass. Only afew companiesused to produce these things of brass. So these products of brass are in the growth stage of their product life cycle. The current pattern of the product life cycle of the products is as under. As these products are used in constructions, theirdemand increases because of the increase in the number of construction. Now-a-days, number of high-rise buildings, official buildings, etc. rises so pipe fitting also increase in this construction and the demand for plumbing firings also goes up due to all the above revolutions. As the plumbing fittings of brass are more durable and attractive than those of any other material like galvanize or plastic, their demand increases day by day as shown in the above figure of Scalloped pattern of product life cycle. Strategies as per the position in the product life cycle: It is necessary to watch the product life cycle; but watching the market life cycle is more important. So marketing strategies should be decided according to the position of the product in the product life cycle but it must not be bound strictly in the stages of product life cycle :The marketing strategies formed by us after considering the product life cycle are as under : Product awareness advertising: As the plumbing Fittings of brass are not so popular inIndia, we have to advertise in such a way that people can be aware of these products. To do so we have tosend sales representatives to the contractors and other probable customers to let them know about our products.
Converting Nonusers: We have toexplain the features and benefits of our productsto the targeted market who use plumbing fittings of other materials. By doing this, we have to make the nonusers use our products of brass. Winning Competitors' Customers: To catch more and more market share, we can try to win the customers of our competitors by offering them better quality and other supplementary services likequick delivery better credit terms, commissionetc. STRATEGIES Offering of basic products i.e. drain strainer, plumbing fittings of brass. Cost Plus Selective distribution channel Building of product awareness among early adopters and dealers. Heavy Sales Promotion.
Product Price Distribution Advertising Sales Promotion
BRANDING: A brand is a name term, sign, symbol or design or a combination of them, intended to identify the goods or services or one seller or group of sellers and differentiate them form those of competitors. Thus, a brand identifies the seller or maker. Therefore, we have chosen'Easy Flow'as our brand name which conveys the idea of the attributes of our products i.e. they let the water flow easily into the pipesand the punch line shows thatthey are durable. The manufacturers brand name falls under the category of 'Corporate Combined with individual product names.' i.e. Easy Flow Kin Nipple. Easy Flow Elbow etc. Naming the brand is just like giving name to the newborn baby. Therefore, we conducted following tests before deciding our brand name. Learning tests: How easily is the name pronounced?
Memory tests: How well is the name remembered? Preference tests: Which names are preferred? Our brand is ourpromise to deliver good quality, durability and special features constantly to our buyers. It is a fact that brands are not built by advertising but by the brand experience. Therefore , we focus on direct marketing and providing free samples to our buyers. PRICE: It is one of the most important elements of the marketing but in today?s world it has come to occupy the centre stage in the marketing business. Price also communicates to the market, the company?s intented value position of its product or brand. In order to arrive at the most acceptable price level, we need to have the information on the 3 C?s. 1). Customer 2). Competition 3). Cost storage of the firm We believe that price is the major determinant of buyer?s choice. Our price isdecided by finance manager with help of managing partners.. In general, top-level management determines pricing objective and policies. Our pricing department also reports all the information regarding prices to the marketing department, finance department and the top management so that they also can give their suggestions and price can be decided by all of them collectively which is accepted to all. Setting the price We set the price for the first time as we are going to manufacture for the first time. We also decide where to position our product on quality and price.
There are mainly 9 strategies.
Price High High Premium Product quality Medium Over chasing Low Rip off
Medium High value Medium value False economy
Low Super value Good value economy
From the above table, we can have the idea of all types of strategies. Among these 9 strategies, we follow third strategy that is “super value”. We apply this strategy because we offer thesame thing but at low priceso our consumers are benefited and even they can have greater savings. So our target consumers are those who are quality conscious and they will sensibly buy from us and save their money. We consider the following factors in setting the pricing policy. 1) Selecting a pricing method: Our objective differs in theinitial timeand in the next few years. In the initial years, our objective is tomaximise current profitso that we canget return of investment. So we have set the price which gives us maximum current profit. So for doing so, we must have knowledge of its demand and cost functions. But this is very difficult to estimate. But in emphasizing current performance, the firm has tosacrifice long-run performanceby ignoring the effects of other marketing mix variables, competitors? reactions and legal restrains on price. Butafter some years, our objective would be tomaximise themarket shareso that by the time we follow that type of price strategy.
2) Determining demand: As each price will lead to a different level of demand, it has impact on firm?s marketing objective. Estimating demand curve: We estimate demand by conductingprice experiments. We sold the products at discount rate and observed the results. Sometimes even we charge different prices to similar territories to see how sales are effected. And afterwards we take these results into consideration when we determine the price. Price elasticity of demand: The demand of our product isprice elasticwhich means when price changes its demand also changes. As customers are contractors and the producers in whose products, these goods are used as intermediary items will look for the producer who offers them low prices. 3) Estimating cost: “Demand sets ceilings on the price of a firm that can be charged for its product and costs set the floor.” 4) Analysing competitors’ costs, prices , and offer : We took into account competitors? costs, prices, and offers to determine our prices. We first considered thenearest competitor?s priceand if competitor?s offer contained some features not offered by our firm, we made changes in our price to attract more customers. 5) Selecting the pricing policy We select a pricing method that includes one or more of these three considerations. 1). Customer 2). competition 3).cost storage of the firm We have selected themark up pricing method. We add a standard mark up to the product?s cost. For that first we calculated the product?s cost and then we added up mark up.
Our cost includes Unit cost = variable cost + fixed cost/unit sales Mark up price = unit cost/(1 – desired return on sales) Reasons for selection of this method are as under. ? We candeterminethe cost moreeasily. ? If all firms use this method,price competitionwould bereduced. ? This method is morefair to both buyers and sellers. PLACE: Generally it is said that the three keys to success are “location, location & location”. So for any company, place is one of the most important factors. It is a distribution channel used by a firm and it should be such that each and every consumer can get product/service very easily whenever required. The distribution channel must be strong. But distribution decisions are very critical in nature as they affect the variability of the firm and the product. The seller needs to select appropriate place for product in such a way that it fulfils the criteria of availability to the prospective and present buyers. Distribution Channel: A set of intermediaries performing a variety of functions stands between the producer and the final users. These intermediaries constitute a marketing channel or a trade channel or a distribution channel. Marketing channels are sets of interdependent organisation involved in the process of making a product or service available for use or consumption. Functions of our marketing Channel: ? Getting information about potential and current customers, competitors and other factors and forces in the marketing environment. ? Developing and disseminating persuasive communications to stimulate purchasing
? Agreements on price and other terms so that transfer of ownership or possession can be possible. ? Placing orders with us ? Provision for the successive storage and movement of the products. Levels of our distribution channels '0' Level Channel/Direct Marketing Channel Manufacturer / Factory
Contractors, p[roducers of showers, taps etc. '1' Level Channel It contains are intermediary. Factory
Dealer
Retailer, Plumbers, Contractors etc. - '2' Level Channel It contains two intermediaries Factory Wholesaler Retailer Plumbers, Contractors, etc.
Our project site is situated at “KerlaEstate” nearChandodar at DholkaKandla highway. This place is easily accessible in terms of transportation. The products are sold to contractors, builders and dealers. Contractors and builders use them directly while dealers sell them to retailer and then they reach to the consumers. PROMOTION : Promotion decisions are important as they help to move the product from the manufacturing end to the consumption point. For a brand to be successful, it must build enduring relationships with its different audiences. Integral to this relationship is the visual image of the brand the consumer carries in his or her mind. “We advertise because it offers a reason to buy but we do sale promotion because it offers incentives.” Our sales promotion includes, Consumer promotion: It mainly includes, 1) Prices off We offer fewer prices to our regular customers so they are attracted to remain loyal to us. 2) Prizes We also provide prizes to our customers who place more number of orders with us than others do. 3) Warranties We also provide warranties to our regular customers i.e. if there is any problem while construction or while making the finished product by using our product as a part of it, we replaces the defective pieces with the good pieces. ? Trade promotion 1) Prices off
We offer fewer prices to our regular contractors and builders so they are attracted to remain loyal to us. Advertising: We do advertising to for public promotion of our product. This is described in more detail in 5 M?s of marketing in later part. Business and sales force promotion Trade shows and conventionsWe take part in trade shows and conventions. Our advertising to sales promotion ratio is about40: 60. Our sales promotion expendituredepends upon our expenditure budget. Purpose of sales promotion Our sales promotion tools vary in their specific objectives. ? A free management advisory service aims at cementing along-term relationshipwith a retailer. ? We do incentive type promotions to attract new trials and a reward to loyal customers and to increase the repurchase rates of occasional users. ? We also do promotions toattract brand switcherswho are primarily looking for low prices and good value. We unlikely turn them into loyal customers. Our strategy for sales promotion: We first estimate what we need to spend in trade promotion. Then we decide what we need to spend in consumer promotion. As mentioned earlier, our advertising to sales promotion ratio is 40: 60. We follow this strategy becausesales promotions yield fasterand more measurable responses in sales than advertising.
Major decisions in sales promotion Establishing objectives For consumers Encouragement to the purchase in bulk Attracting switchers away from competitors? brand For retailers To pursue them to buy new products Offsetting competitive promotions Building brand loyalty For the sales force Encouragement to the new products Encouragement to new prospective
ADVERTISING
The wordadvertisinghas 2 meanings: 1ublic promotion of some product or service 2:The business of drawing public attention to goods and services Advertising means the activity of attracting public attention to a product or business, as by paid announcements in the print, broadcast, or electronic media. The major advertising media are newspapers, magazines, television and radio, business publications, billboards, and circulars sent through the mail. With the advent of the wide availability of electronic mail and access to the World Wide Web in the 1990s, the internet has also become an important advertising venue. We advertise for several purposes depending upon the market condition, market demand, product life cycle etc. Some of our purposes are as follows? ?
As we are new in the market, we have to advertise and promote our products a lot to make out target market aware about our firm. Plumbing fittings are the hidden products for the users. They would not concern about its brand and even about its purchase. Thus, we must have to promote them among the contractors, dealers, plumbers who are concerned with them.
Advertising agencies have always been intermediaries between advertisers and the mass media. But we have not chosen this option because we have industrial buyers like contractors, wholesalers, manufacturers of other plumbing goods or bathroom fittings in which our products are used as intermediate goods. They will attract towards the product by discount rates, quality, commission, and durability instead of the advertisements. Thus, direct marketing and personal attention are more important for selling our products.
In our firm, advertising is handled by the managing partner. The marketing manager?s job is to propose an advertising budget, develop advertising strategies, and approve advertisements and campaigns, dealer displays and other forms of advertising. Our marketing manager ? First start by identifying the target market and buyers motives. ? Second they make five major decisions in developing advertising programme which is known as „5 M?s?.
5 M?s of advertising
Mission
Money
Message
Media
Measurement
MISSION: It is all about setting the advertisement goal in the initial stage. We preferinformative advertisementbecause our aim is to make target market aware about our firm. When we are popular in our target market, we will startpersuasive advertisingto create liking, preference, conviction and purchase of our product. Once the target market will be covered, we will startreminder advertising, which aims to stimulate repeat purchase of products. Our advertising objective depends upon the market situation i.e. the degree of competition.
MONEY: Deciding on the advertising budget We consider advertising as a current expense, part of it is really an investment that builds up an intangible asset called “Brand Equity”. We consider the following factors while deciding our advertising budget. 1) Stage in product life cycle In the initial stage, our advertising budget is high because we want to introduce our product to the customers. Afterwards, it will be low compared to the first year. 2) Market share and consumer base When the firm covers enough market share, it will requires less marketing budget because it will have a set of loyal buyers and recognition in the market. 3) Competition When there exists tough competition, we do more marketing and when there is less competition, we will advertise less. 4) Advertising frequency When advertising frequency is high, advertising budget will be high and when it is low, required money will be less. The frequency of our advertisement will be once in two months in the Gujarati newspapers. MESSAGE: Choosing the advertising message
MEDIA : It includes the decision regarding media vehicles, deciding on media timings and deciding on geographical allocation. Major media types: Telemarketing: It means the business or practice of marketing goods or services by telephone i.e. selling over the telephone. Telemarketingis a form ofdirect marketingwhere asalespersonuses thetelephoneto solicit prospectivecustomersto sellproductsorservices. We find the prospective customers by various means, including past purchase histories, previous requests for information, credit limit, competition entry forms or application forms. Names are also purchased from another company's customerdatabase, or are obtained from atelephone directoryor some other public list or forum. We do The qualification process and find those prospective customers who are most likely to purchase our product. We also apply telemarketing to other forms of electronic marketing usinge-mailorfaxmessages. Pamphlet: Pamphlets include, 1. An unbound printed work, usually with a paper cover. 2. A short essay or treatise, usually on a current topic, published without a binding. We give advertisement in a pamphlet which is an unbound bookletthat is, without a hard cover or binding. It consists a single sheet of paper that is printed on both sides and folded in half, in thirds, or in fourths which is called a leaflet.
For us, pamphlets are very important in marketing as they are cheap and can be distributed easily. We will distribute pamphlets to the hardware shops, wholesalers, offices of contractors, etc. who are our target customers. Newspaper We also give advertisement in „Gujarat Samachar?, „Sandesh?, and „Divya Bhaskar? because we cover market only in Gujarat at this stage and the circulation and impact of local language news papers is higher than those of English especially in out state. So there is no need to give advertisement in English newspaper. We almost give advertisement in every two months. By this media vehicle, we can reach too many customers as everyone will definitely read newspaper. Internet advertising It is delivering advertisements to internet users via web sites, e- mail, ad-supported soft wares and internet-enabled cell phones. It is also called an "Ad Network". Our Internet marketing includesinformation management,public relations,customer service, andsales. We expect that electronic commerce and Internet marketing will help to make our product more popular as internet access has been becoming more widely available and used. We can also save money because of a reduced need for a sales force. Apart from this, internet marketing helps us to expand from a local market to both national marketplaces also. Yellow pages: We also give advertisement in Tata Yellow Pages because we can advertise our product to many of our target market through it. While deciding the media, we took following factors into consideration. ? Target audience: contractors, builders and dealers. ? Characteristics of our products - durable, reliable, good quality ? Cost of medium: As television is very costly medium and our products need not to be advertised on TV, we do not advertise on that medium.
Media vehicles Media: Print media ? ? ? ? „GujaratSamachar? „Sandesh? „Divya Bhaskar? Tata Yellow Pages
A WIDE RAGE OF PLUMBING FITTINGS OF BRASS WITH GUANTEE* STAINLESS STEEL DRAIN STRAINER* *ALL THE FITTINGS WILL BE AVAILABLE IN VARIOUS SIZE. THE FITTINGS WILL BE AVAILABLE AS PER YOUR REQUIREMENTS AND ORDER. FOR MORE DETAILS CONTACT ON: EASYFLOWENTERPRISE Kerla Estate, GIDC, Bawla. Dist. Ahmedabad Phone: 9545- 22993 Log on:www.easyflow.com E- mail address: easyflow_india.com Media Vehicle Size of the advertisement (in column centimetre) 2x8 1x4 1x4 1x4 Coloured/ Black and White Frequency Distribution Cost (in Rs.)
Divya Bhaskar GujaratSa machar Sandesh Tata Yellow Pages
Black and white Black and white Black and white -
Per 2 months Per 2 months Per 2 months -
WholeGujarat WholeGujarat WholeGujarat -
131400 72000 30000 121000
Media timings The demand for our products is equal for the whole year; there is no specific time or season for advertising them. So the frequency of the advertisement is even for the whole year. Measurement Good planning and control of advertising depend upon measures of advertising effectiveness. We try to measure the communication effect of an advertisement – that is, its potential effect on awareness, knowledge, or preference. We also measure the advertisement's sales effect. Direct marketing Direct marketing is the main marketing or promotional tool for us. It is the use of buyer direct channels to reach and deliver products to customers without any middleman. Our strategies for direct marketing are as under. ? ? ? ? ? Direct mail Catalogs Telemarketing Web sites Salesmen
For us, it is the fastest growing avenues for serving the target customers. We seek a measurable response typically a customer order. We use this type of promotional strategy to build a good relationship with our buyers. It helps in reducing the following things in terms of transportation. ? ? ? ? ? Higher cost of driving Traffic congestion Parking headaches Lack of time A shortage of retail sales help
COMPETITION: “Poor firms ignore their competitors, average firms copy their competitors and winning firms lead their competitors.” The products of brass are not so much popular inIndiaso the manufactures of plumbing fittings of brass are less in number. We therefore do not have many competitors particularly for brass fittings. But these products are also made of galvanize, plastic or PVC, and steel. So we have to face them as competitors because these small products can be substituted very easily. Thus, we have a very laugh competition because of the substitute materials. The threats in terms of competitions to us are as under. Threat of new entrants : In this segment,entry and exit barriers are quite fewso profit potential is high. Because of the high profitability many new forms are eager to enter the segments. Therefore market will be divided among all the firms and profitability of each individual firm will go down. Threat of substitute products : Drain strainer, elbows, kim nipple etc. are available in brass, plastic, galvanize, still etc. So a number of options are available to the customers. Moreover these are very small and hidden products so they can be substituted very easily. Therefore, we have to compete with the manufacturers of plumbing fittings made of all the above materials. These products have not been produced under any particular brand name. The local manufacturers used to produce them in different materials. So they can be said our main competitors. Steps involved in marketing “Easy flow” undertakes marketing analysis for systematic designing, collecting, analyzing and reporting of data and findings relevant to a specific market situation. a) Define objective The main objective of our market survey was to know the market demand of plumbing products made out of “brass”.
Apart from that we also want to know ? Which size of plumbing accessories are the most preferable among customers so we can have idea and can produce plumbing accessories. ? How much percentage of market is really interested in the plumbing accessories? ? To know how many customers are really interested in the superior product produced by us and how many of them really buy them. ? To know the factors considered by them in taking the decision regarding any product ? To know what is the future growth of our product. b) Define target population As per the market survey carried out by easy flow, contractors and dealers are the major decision makers for the purchase of plumbing accessories. Primary data sources c) Sample size: contractors dealers 100 people 100 people Questionnaires.
d) Develop questionnaire :
QUESTIONNAIRE
QUESTIONNAIRE[FORDEALERS]
N.B. = 1. The information obtained will be kept confidential and will be used for research purpose only. 2. Please mark the boxes for „YES? response. Leave the boxes blank for „NO? response. ________________________________________________________________________ PERSONAL DETAILS Name Address Category : : : [] Wholesaler [] Retailer
SECTION - I
1. Which material do you prefer most [ ] Brass [ ] Stainless Steel [ ] Ceramic [ ] Plastic [ ] Iron
2. Why do customers prefer thismaterial? (Makein order of preference.) [ ] Price [ ] Attractiveness [ ] Durability [ ] Available in different colors [ ] Availability [ ] Any other (Please specify) [ ] Quality of material 3. Which size of product do customers prefer most? [ ] ½” [ ] 2” [ ] ¾” [ ] 2.1/2” [ ] 1” [ ] 3” [ ] 1.1/4” [ ] 4” 4. Howmany units do you sale per year? KIM NIPPLE Drain Strainer Plumbing Less than 50000 50000 to 75000 More than 75000
5. How do you sale your product? [ ] Bulk [ ] Both [ ] Retail 6. How do you get your payments? [ ] Cash [ ] Credit (If your answer is credit, please specify credit period.
Days)
7. What is the commission rate that you receive from the manufacturer? KIM NIPPLE Drain Strainer Plumbing Fittings % % %
8. Which is the most convenientpackage size to store the stock? KIM NIPPLE Drain Strainer Plumbing Less than 50 units 50 to 100 units 100 to 200 units More than 200 units 9. How do you advertise theproducts? [ ] Banners [ ] Magazines [ ] Newspapers [ ] Leaflets [ ] Brochure [ ] Local Cable [ ] Others
10. Do customers prefer polishedproducts? [ ] Yes [ ] No 11. Are you satisfied with the quality and availability of the products? [ ] Yes [ ] No 12. Please give your suggestions. 1. 2. 3. THANKS FOR YOUR KIND RESPONSE AND CO-OPERATION.
QUESTIONNAIRE[FORCONTRACTORS]
N.B. = 1. The information obtained will be kept confidential and will be used for research purpose only. 2. Please mark the boxes for „YES? response. Leave the boxes blank for „NO? response. ________________________________________________________________________ PERSONAL DETAILS Name Address : :
SECTION - I
1. Which material do you prefer most at the time of buying? [ ] Brass [ ] Plastic [ ] Stainless Steel [ ] Iron [ ] Ceramic 2. Why docustomers prefer this material? (make in order of preference.) [ ] Price [ ] Attractiveness [ ] Durability [ ] Available in different colors [ ] Availability [ ] Any other (Please specify) [ ] Quality of material 3. Which size of product do customers prefer most? [ ] ½” [ ] 2” [ ] ¾” [ ] 2.1/2” [ ] 1” [ ] 3” [ ] 1.1/4” [ ] 4” 4. Howmany units do you sale per year? KIM NIPPLE Drain Strainer Plumbing Less than 50000 50000 to 75000 More than 75000
5. How do you sale your product? [ ] Bulk [ ] Retail
[ ] Both
6. How doyou get your payments? [ ] Cash [ ] Credit (If your answer is credit, please specify credit period.
Days)
7. What is the commission rate that you receive from themanufacturer? KIM NIPPLE Drain Strainer Plumbing Fittings % % %
8. Which is the most convenientpackage size to store the stock? KIM NIPPLE Drain Strainer Plumbing Less than 50 units 50 to 100 units 100 to 200 units More than 200 units 9. Do you prefer polished products? (Polished with chromium or mico) [ ] Yes [ ] No 10. Are you satisfied with the quality and availability of the products? [ ] Yes [ ] No 11. Please give your suggestions. 1. 2. 3.
THANKS FOR YOUR KIND RESPONSE AND CO-OPERATION.
e) Collect information f) Analyse data
Marketing analysis of survey of contractors
Prefrence of Material
70 60 50 40 30 20 10 0 Brass Stainless steel Ceramic Plastic Iron
Percentage (%)
Type of Material
The above diagram reveals that 60% contractors prefer brass material. Stainless steel is the second most preferable material.18% contractors prefer it. Other materials like ceramic, plastic and iron is less preferable by contractors.
Price
40 30 18 12 7 6 33 24
%
20 10 0
Rank 1
Rank 2
Rank 3
Rank 4
Rank 5
Rank 6
Rank
The above diagram revels that 33% contractors have given the price second rank while they purchase the products. So we can say that price plays important role while contractors decide to buy products.
Durability
50 40 30 20 10 0 45
%
14
12 4
12
13
Rank 1
Rank 2
Rank 3
Rank 4
Rank 5
Rank 6
Rank
The above diagram revels that 45% contractors have given the durability first rank while they purchase the products. So we can say that durability is the most important factor.
Availability
30 21 20 13 8 9 25 24
%
10 0
Rank 1
Rank 2
Rank 3
Rank 4
Rank 5
Rank 6
Rank
The above diagram revels that 25% contractors have given the availability third rank while they purchase the products. And 24% contractors have given the availability fourth rank while they purchase the products.
Quality of Material
30 20 28 27 20 14 7 4
%
10 0 Rank 1 Rank 2 Rank 3
Rank 4
Rank 5
Rank 6
Rank
The above diagram revels that 28% contractors have given the quality of material first rank while they purchase the products. It reveals that quality of material plays important role while purchasing product.
Attrativeness
30 20 14 3 Rank 1 4 28 24 27
%
10 0 Rank 2
Rank 3
Rank 4
Rank 5
Rank 6
Rank
The above diagram revels that 28% contractors have given attractiveness fifth rank while they purchase the products. So we can say that attractiveness is not so important factor while contractors purchase products.
Available in Different Colours
30 20 20 28 27 14 5 6
%
10 0 Rank 1 Rank 2 Rank 3 Rank 4 Rank 5
Rank 6
Rank
The above diagram revels that 28% contractors have given attractiveness fourth rank while they purchase the products.
Preferance for Size 60 50 40 % 30 20 10 0 1 size 1/2" 3/4" 1" 1.1/4" 2" 2.1/2" 3" 4"
The above diagram revels that 51% contractorsprefersize 1”. While 37% prefer size 2” and 4” is the least preferred size among contractors.
No of Units Purchased Per Year
72 <50000 13 Kim Nipple Nam e of product 15 50000-75000 >75000
80 60 % 40 20 0
The above diagram revels that 72% contractors generally buy 50000 – 75000 units of kim nipple.
No of Units Purchased Per Year
83 <50000 5 12 50000-75000 >75000 Plumbing Fittings Nam e of product
100 80 60 % 40 20 0
The above diagram revels that 83% contractors generally buy >75000 units of plumbing fittings. It shows that they are much in demand.
No of Units Purchased Per Year
65 <50000 13 12 50000-75000 >75000 Drain Strainer Nam e of product
80 60 % 40 20 0
The above diagram revels that 65% contractors generally buy more than 75000 units of drain strainer.
Manner of Purchasing
13% 10% bulk retail both 77%
The above diagram revels that 77% contractors purchase products in bulk.
Mode of Paym ent
13% cash credit 87%
The above diagram revels that as contractors purchase the products in bulk they prefer credit purchase the most.
Credit Period
80 60 58 25
%
40 20 0
17
10 days
20 days No of days
30 days
Theabove diagram revels that 58% contractors prefer 20 days credit periodwhile only 17% contractors prefer 30 days credit period.
Kim Nipple
40 30 % 20 10 0 10 20 Discount Rate >20 27 37 36
The above diagram revels that 37% contractors get 20% discount from manufactures, while 36% contractors get more than 20% discount from manufactures.
Plumbing Fittings
40 30 % 20 10 0 10 20 Discount Rate >20 33 39 28
The above diagram revels that 39% contractors get 20% discount from manufactures, while 33% contractors 10% discount from manufactures.
Drain Strainer
40 30 % 20 10 0 10 20 Discount Rate >20 37 28 35
The above diagram revels that 37% contractors get 10% discount from manufactures, while 35% contractors get more than 20% discount frommanufactures. The above diagram revels the most convenient package size for kim nipple is 50 – 100 units.
Most Convenient Package Size To Store Kim Nipple 58 60 50 40 % 30 20 10 0 <50 units 50-100 units 100-200 units >200 units No of Units 14 27
1
Most Convenient Package Size To Store Plum bing Fittings 57 60 50 40 % 30 18 20 10 0 <50 units 50-100 units 100-200 units >200 units No of Units 24
1
The above diagram revels the most convenient package size for plumbing fittings is more than 200 units.
Most Convenient Package Size To Store Drain Strainer 37
40 35 30
28 24
25 % 20 15 10 5 0 <50 units 50-100 units 100-200 units >200 units No of Units 11
The above diagram revels the most convenient package size for drain strainer is less than 50 units.
Preferance For Polished Products
13%
Polished Unpolished
87%
The above diagram revels 87% contractors prefer polished products. While only 13%prefer unpolished products.
Satisfaction Level
100 % 50 0 Satisfied Type 91 9 Dissatisfied
The above diagram revels 91% contractors are satisfied with theproducts,while 9% contractors are not satisfied with the products.
Marketing analysis of surveyof dealers
Category of Dealers
retailer 37%
w holeseller 63%
The above diagram reveals that 63% are wholesellers and only 37% are retailers.
Preferance For Material 60 50 40 30 20 10 0
Bras s Stainles s Steel
58 34 3
Ceramic
3
Plas tic
4
Iro n
Type of Materials
The above diagram reveals that 58% dealers prefer brass material. Stainless steel is the second most preferable material.34% dealers prefer it. Other materials like ceramic, plastic and iron is less preferable by dealers.
Price 60 50 40 30 20 10 0 57
%
10
11
11
9 2
Rank 1
Rank 2
Rank 3
Rank 4
Rank 5
Rank 6
Rank
The above diagram revels that 57% dealers have given the price third rank while they purchase the products.
Durability 60 50 40 30 20 10 0 54
%
12
14 7 5 Rank 5
8
Rank 1
Rank 2
Rank 3
Rank 4
Rank 6
Rank
The above diagram revels that 54% dealers have given the durability first rank while they purchase the products. So we can say that durability is the most important factor
Availability 60 50 40 30 20 10 0 51
%
17 9
14 5 4 Rank 6
Rank 1
Rank 2
Rank 3
Rank 4
Rank 5
Rank
The above diagram revels that 51% dealers have given the availability fourth rank while they purchase the products.
Quality of MaterialQuality of Material 80 58 60
%
40 20 0 Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 14 15 6 3 4
The above diagram revels that 58% dealers have given the quality of material second rank while they purchase the products. It reveals that quality of material plays important role while purchasing product.
Attractiveness 30 25 20 15 10 5 0
25 20 15 14 10 16
%
Rank 1
Rank 2
Rank 3
Rank 4
Rank 5
Rank 6
Rank
Theabove diagram revels that 25% dealers have given attractivenessfifth rankwhile they purchase the products. So we can say that attractiveness is alsoan importantfactor while dealers purchase products.
Available in Different Colours 80 60
63
%
40 20 0 Rank 1 Rank 2 Rank 3 Rank 4 2 3 5 6
21
Rank 5
Rank 6
Rank
Theabove diagram revels that 63% dealers have given attractivenesssixth rankwhile they purchase the products. So we can say that it is not an important factor.
Most Preferable Size
40 30 % 20 10 0 1 2 1 2 3 3
31
30
28
1/2" 3/4" 1" 1.1/4" 2" 2.1/2" 3" 4"
Theabove diagram revels that 34% dealersprefersize 1”. While 30% prefer size 2” and 3/4"” is the least preferred size among dealers.
No of Units Sold Per Year 70 80 60 % 40 20 0 kim nipple Name of Product 12 18 <50000 50000-75000 >75000
Theabove diagram revels that 70% dealers generally buy 50000 – 75000 units of kim nipple.
No of Units Sold Per Year 80 80 60 % 40 20 0 plumbing fittings Nam e of Product 6 14 <50000 50000-75000 >75000
Theabove diagram revels that 80% dealers generally buy >75000 units of plumbing fittings. It shows that they are much in demand.
No of Units Sold Per Year
100 80 60 % 40 20 0
83 <50000 9 8 50000-75000 >75000 drain strainer Name of Product
Theabove diagram revels that 83% dealers generally buy more than 75000 units of drain strainer.
Manner of Selling
27% Bulk Retail 60% Both 13%
Theabove diagram revels that 60% dealers purchase products in both bulk and retail.
Mode of Payment
24% Cash Credit 76%
Theabove diagram revels that dealers prefer credit purchase the most.
Received Com ission Rate for Kim Nipple
60 40 % 20 0 5 10 >15 Com m ission Rate 60 37 3
Theabove diagram revels that 60% dealers get 5% commission from manufactures, while only 3% dealers get more than 15% commission from manufactures.
Received Com m ission Rate for Plum bing Fittings 70 60 50 40 % 30 20 10 0 5 10 Com m ssion Rate >15 63
29 8
Theabove diagram revels that 63% dealers get 5% commission from manufactures, while only 8% dealers get more than 15% commission from manufactures
Received Com m ission Rate for Drain Strainer
60 50 40 % 30 20 10 0 5 10 Commission Rate >15 18 57 25
Theabove diagram revels that 57% dealers get 5% commission from manufactures, while 25% dealers get more than 15% commission from manufactures
The Most Convenient Packing Size for Kim Nipple
50 40 30 % 20 10 0 <50 units 50-100 units 9 22
45
24
100-200 units
>200 units
No of Units
Theabove diagram revels the most convenient package size for kim nipple is 100 - 200 units.
The Most Convenient Packing Size for Kim Nipple
60 50 40 % 30 20 10 0 <50 units 50-100 units 100-200 units 9 12 24
55
>200 units
No of Units
Theabove diagram revels the most convenient package size for plumbing fittings is more than 200 units.
The Most Convenient Packing Size for Kim Nipple
70 60 50 40 % 30 20 10 0 <50 units 13
64
14 8
50-100 units 100-200 units No of Units
>200 units
Theabove diagram reveals the most convenient package size for drain strainer is 50 - 100 units.
Preferance for Polished Products
8%
Poshied Unpolished
92%
Theabove diagram revels 92% dealers prefer polished products. While only 8%prefer unpolished products.
Level of Satisfaction
100 80 60 % 40 20 0
87
13
Satisfied Type
Dissatisfied
Theabove diagram revels 87% dealers are satisfied with the products,while 13% dealers are not satisfied with the products.
g) Findings: From the survey we found that mainly brass plumbing accessories are more preferable by users. We also found that some of thesize ismore preferable and people consider durability, quality and price as main factors.
PERT- CPM
C A x B D
E H I
F F
G J
L
K
M
N J
P
Activities: A: Generation of idea B: Collection of information C: Market survey D: Location analysis E: Requirement of site with utilities F: Requirement of machineries and labour G: Sources of finance H: Purchase of land I : Placing an order for machineries J: Placing an order for raw materials K: Delivery of machineries and raw materials L: Installation of machineries M: Recruitment of labour N: Trial run P: Commercial production
MISSION: ? Expansion of new custom made parts as raw material being used by the manufacturers ? To enter the new market segments ? Maintenance of quality to compete the international standards ? To lengthen the product line to provide better service to customers
VISION: ? ? ? ? ? ? High quality products Fastest and sincere communication In time deliveries and response Better servicing Designing new products as per the requirements of the customers Competitive and fair prices
MOTTO: “Quality is never a co- incidence, it is a result of sincere andhard efforts.”
LIST OF ASSUMPTIONS: ? The firm beings its commercial production on1/4/2005. ? There are 300 working days in all five years. ? Equal numbers of units are produced in all the months throughout five years. ? Estimated units of all products will be produced & projected sales of them will be realized. ? The firm has adopted „piece wage rate? system for the direct workers. ? The management has decided to purchase raw material required for 10% of the production of next month in one month advance. ? The fixed production overheads will not change throughout all five years. ? All administrative expenses except depreciation will remain constant throughout five years. ? For the first year, selling & distribution expenses are taken as 1% of the total sales and they are assumed to be constant for next four years irrespective of sales. ? The frights are estimated to increase by Rs. 5000/- for every increase of Rs. 200000/- in purchase of raw material after the first year. ? The credit days received from creditors & allowed to debtors are taken as 15 and 20 respectively while the creditors of direct wages are based on 10 days. ? Out of total sales 60% sales is taken as credit sales & remaining as cash sales.
COST OF PROJECT Our total cost of project works out to be Rs.8029457/-, which includes cost of land, building, furniture, machinery, equipments, preliminary expenses, pre-operative expenses, miscellaneous assets, contingency and working capital margins. Cost of land & site development: The unit has acquired total land of about 1175 sq. meters in Kerala region in GIDC, at the rate of Rs. 325/- per sq. meter. So the total cost of land comes out to be Rs.381875/-. Cost of Buildings & Civil Works: The total cost of all the buildings comes out to be Rs. 2097368/-, which comprises the followings: Particulars FactoryBuilding Furnace Room Supervisor?s Cabin Packing Room Storage Room: For Raw Material For Finished Goods Lunch Room Reception Counter Partners? Cabin Account Department Sales Department Security Man?s Cabin Compound Wall Total
Required
sq. feet 2207 144 108 588 562.50 70.25 242.25 320 588 153 129 88 5600
Cost per sq. feet Total Cost (In Rs.) (In Rs.) 350 350 350 350 350 350 380 400 400 400 400 300 772450 50400 37800 205800 196875 164588 92055 128000 235200 61200 51600 26400 75000 2097368
Cost of Equipments: The total cost of equipments comes out to be Rs. 234450/-, which includes the items like computers, aqua-guard, cease fire, fax machine, trolies, cylinder, telephones, intercoms, etc. Cost of Furniture & Fixtures: The total cost of furniture comes out to be Rs. 202325/-, which includes tables, Chairs, fans, Air coolers, tube-lights, etc. The details are shown below. Particulars Units Rs. Required in Factory 10 2500 -8 44000 5 625 20 2600 20 500 17 19550 5 2500 20 ----2000 Units Required in Office 15 11 2 7 10 5 5 2 1 1 2 5 Rs. Total Cost Rs. 6250 19250 55000 1500 3900 625 25300 2500 53000 10000 8500 11000 2500
Chairs Revolving Chairs Tables Stools Tube lights Bulbs Fans Exhausting Fans A.C. Refrigerator Sofa set Cupboards Electric Board & Circuits Total
3750 19250 11000 875 1300 125 5750 -53000 10000 8500 11000 500
74275
128050
202325
Cost of Machineries: The total cost of machineries is Rs. 4550500/-. The details of all machineries are as below: Total Cost Machine Units (In Rupees) Leathe Machine 1 750000 Threading Machine 1 414500 Electro Platting Machine 1 475000 Extrusion Machine 2 1156000 Turning Machine 1 750000 Shearing Machine 1 400000 Power Press Machine 1 100000 Hydrolic Deep Drawing 1 400000 Press Machine Buffering Machine 7 105000 Total 4550500 Cost of Cost of Miscellaneous Assets: Additionally, miscellaneous assets of Rs. 130500/- is required the details of which are as follow: Particulars Furnace Cycle Stand Total
Total Cost
(In Rupees) 125000 5500 130500
Cost of Preliminary Expenses: The details of preliminary expenses are as under: Particulars Legal & documentation Advertisement Expenses of preparing feasibility report Stamp duty Establishment Expenses Total Amount 50000 75000 20000 5750 15000 165750
Cost of Pre-operative Expenses: The details of pre-operative expenses are as under: Particulars Electricity Deposit Telephone Deposit Total Amount 100000 6100 106100
Provision for contingency : The management believes that any contingency be it an earthquake or sudden rise in raw material prices and wages etc. can affect the working. So it has decided to keep aside 2% of the total cost of project, which amounts to Rs. 160589/-.
TOTAL COST OF PROJECT
Particulars
Land & Site Development Buildings & Civil Works Furniture & Fixtures Equipments Machineries Miscellaneous Assets Preliminary Expenses Pre-operative Expanses Contingency Margin @ 2% Total
Total Cost Rs. 381875 2097368 202325 234450 4550500 130500 165750 106100 160589 8029457
MEANS OF FINANCE The management of the firm has decided to finance the total of project of Rs. 8029457/- in the following manner. Particulars Partners? Capital 15% loan from bank Total Amount (In Rs.) 3029457 5000000 8029457
Means of Finance
Partners? Capital 15% loan from bank
WORKING CAPITAL REQUIREMENT ………………………… Closing Stock ………………………… …………………………
Debtors
5759200
Raw Material Finished Goods
579000 368535 327090
Cash & Bank Less:
…………………………
Creditors Raw Material ………………………… 3502950 Direct Wages …………………………. 259967 ………………………… Working Capital 3270908
Finance of Working Capital Requirement: Particulars Partners? Capital 12% Loan from relatives Total Amount (In Rs.) 1670908 1600000 3270908
Finance of Working Capital
Partners? Capital
12% Loan from relatives
BREAK-EVEN POINT FOR THE YEAR 2005-2006
Particulars Sales (A) Variable Expenses: Raw Material Direct Wages Packing Depreciation Power & Fuel Other Factory Overheads (70% of total) Excise Total (B) Total Contribution (A-B) Contribution per unit produced Fixed Cost: Freight Lightening Indirect Labour Insurance Other Factory Overheads (30% of total) Administration Overheads Selling & distribution Overheads Preliminary Expenses (Apportioned Equally) Interest (Apportioned Equally) Total 899946 57000 600000 3500 55920 970200 426790 11050 314000 3338406 863613 38000 600000 6590 21050 776160 358750 11050 314000 2989213 1160982 95000 600000 4115 40014 1487640 654260 11050 314000 4367061 Drain Strainer 42678750 18900000 3728000 2250000 198154 1494000 130480 4400000 31100634 11578116 12.8646 Kim Nipple 35875000 17280000 1403480 3960000 204602 397800 49115 2082000 25376997 10498003 7.2903 Plumbing Fittings 65426250 33300000 2667530 4050000 452994 1481000 93366 6455000 48499890
16926360 9.4035
Break-even point (In units): B.E.P.=Total Fixed Cost Per Unit Contribution
=3338406 12.8646 = 259503
=2989213 7.2903 = 410026
=4367061 9.4035 = 464408
Break-even point (In sales): B.E.P.= Break-even units* Selling Price Per unit
= 259503*47.5 = 12326393
= 410026*25 = 10250650
= 464408*36.5 = 16950892Rs.
ESTIMATED COST-SHEET FOR THE YEAR 2005-2006
Particulars Purchase of Raw Material Less: Closing Stock Raw Material Consumed Freight Wages Packing Expanses Prime Cost Excise Duty Lightening (3:2:5) Indirect Labour Depreciation Insurance Power & Fuel Other Factory Overheads (Estimated @5% of wages) Factory Cost Administrative Overheads (Apportioned on the basis of Factory Cost) Cost of Production Less: Closing Stock of Finished Goods Cost of Goods Sold Selling & distribution Cost Cost of Sales Profit
DRAIN STAINER
(900000 Sets) 19057500 157500 18900000 941928 3728000 2250000 5819928 4400000 57000 600000 199172 3500 1494000 186400 2760000 970200
KIM NIPPLE
(1440000 Units) 17424000 144000 17280000 861938 1403480 3960000 23505418 2082000 38000 600000 206277 6590 397800 70165 26906250
PLUMBING FITTIGS
(1800000 Units) 33577500 277500 33300000 1163674 2667530 4050000 41181204 6455000 95000 600000 450301 4115 1481000 133380 50400000
776160 33730200 56215 (1500 units) 33673985 426790 34100775 8577975 27682410 96120 (5000 units) 27586290 358750 27945040 7929960
1487640 51887640 216200 (7500 units) 51671440 654260 52325700 13100550
42678750 Sales
35875000
65426250
PROJECTED TRADING AND PROFIT & LOSS ACCOUNT FOR
THE YEAR ENDED ON31/3/2006
Dr.
Particulars To Raw Materials To Wages To Freight To Excise Duty To Gross Profit To Packing Expenses To Indirect Wages To Lightening Expenses To Power & Fuel To Depreciation To Other Factory Overheads To Salaries To Insurance To Telephone Charges To Electricity To Printing & Stationeries To Postage To Audit Fees To Legal Charges To Staff Welfare Expenses To Interest To Selling & distribution To Preliminary Expenses To General Reserve (30% of Net Profit) To Provision for Taxation 144927535 10260000 By Gross Profit 1800000 190000 3372800 965960 389945 2328000 15715 60000 56400 74680 23200 50000 40000 490000 942000 1439800 33150 5705076 9616415 144927535 51164985 Rs. Particulars 70059000 By Sales 7799010 By Closing Stock of Raw Materials 2967540 By Closing Stock of Finished Goods 12937000 51164985
Cr.
Rs. 143980000 579000 368535
13311844 To Net Profit 51164985 51164985
BALANCE SHEET AS ON31/3/2006
Liabilities Capital 4700365 P & L Account13311844 18012209 - Distribution of Profit 13311844 Reserves & Surplus: General Reserve Borrowings: 15% bank loan 12% loan from relatives Current Liabilities: Creditors Provisions: Depreciation Provision: Building 209737 Furniture & Fixtures 20233 Equipments 46890 Plant & Machineries 682575 Miscellaneous Assets6525 Provision for Taxation Assets Fixed Assets: Land Buildings 4700365 Furniture & Fixtures Equipments Plant & Machineries 5705076 Miscellaneous Assets Current Assets: 5000000 Debtors 1600000 Closing stock of Raw Material Closing stock of Finished Goods Cash & Bank 3762917 Pre-operative Expenses Preliminary Expenses 165750 - Written Off (1/5 th) 33150 Rs. Rs. 381875 2097368 202325 234450 4550500 130500
5759200 579000 368535 16808280 106100 132600
965960 9616415 31350733 31350733
CASH FLOW STATEMENT FOR THE YEAR 2005-2006 Particulars Profit13311844 + Provision for Taxation9616415 + Transfer to General Reserve5705076 + Preliminary Expenses 33150 + Depreciation965960 Funds from Operations 29632445 + Increase in Current Liability 3762917 - Increase in Current Assets 6706735 Cash from Operations Funds from Financing Activities: Capital4700365 + 12% bank loan from relatives1600000 + 15% bank loan5000000 11300365 Funds from Investing Activities: Purchase of assets (total) (7597018) Cost of Project: Preliminary Expenses165750 Pre-operative Expenses106100 (271850) Less: Distribution of Profit Closing Cash Balance (13311844) 16808280 Rs.
2668862 7
CONSUMPTION OF RAW MATERIALS FOR THE YEAR 2005-2006
Product
Raw Material Steel Luster ERW Zinc Brass Nickel Chromium Luster
Per Unit Production Total Requirement (In Units) Requirement
Price (Per Unit) 55 20 32 80 190 20 20
Total Cost Rs. 9900000 9000000 18900000 11520000 5760000 17280000 17100000 7200000 9000000 33300000
Drain Stainer Total Kim Nipple Total Plumbing Fittings
0.20Kgs. 0.5 Pieces 0.25 Kgs. 0.05 Kgs. 0.05 Kgs. 0.20 Kgs. 0.25 Piece
900000 900000 1440000 1440000 1800000 1800000 1800000
180000 Kgs. 450000 Pcs. 360000 Kgs. 72000 Kgs. 90000 Kgs. 360000 Kgs. 450000 Pcs.
Per Unit Cost (Rs.) 11 10 21 08 04 12 9.5 4 5 18.5
Total
TOTAL DIRECT WAGES FOR THE YEAR 20052006
PARTICULARS DRAIN STAINER KIM NIPPLE PLUMBING FITTINGS TOTAL WAGES (RS.)
Chargeable to Drain Stainer: 21 Semi-skilled Workers*0.15Rs.Per Unit *900000 Units + 1 Skilled Worker*0.25Rs. Per Unit *900000 Units=22500 + Bonus @8.33% + Provided Fund @9% + E.S.I. @4.5%
2835000 225000 3060000 254900 275400 137700
Chargeable to Kim Nipple: 8 Workers*0.20Rs. Per Unit*1440000 Units + Bonus @8.33% + P.F @9% + E.S.I. @4.5% ____________________________________ Chargeable to Plumbing Fittings: 8 Workers*0.15Rs. P.U.*1800000 Units + 2 Workers (on Furnace)*1500 Rs. Per Month + Bonus @8.33% + P.F. @9% + E.S.I @4.5%
1152000 95960 103680 51480
2160000 36000 179930 194400 97200
________ 3728000 _________ 1403480
______________ 2667530 ______________ 7799010
TOTAL INDIRECT WAGES FOR THE YEAR 2005-2006
Particulars Production Manager (Rs.20000 per month) Supervisor (Rs. 10000 per month) Two Technician for Each Product (Each Rs. 5000 per month) Two Store-keepers (Each Rs. 3750 per month) Other Supporting Workmen (11workmen for each product) (Each Rs. 2500 per month) Total Drain Stainer 80000 40000 Kim Nipple 80000 40000 Plumbing Fittings 80000 40000
120000 30000
120000 30000
120000 30000
330000 600000
330000 600000
330000 600000
TOTAL DEPRICIATION FOR THE YEAR 2005-2006 Particulars On Machineries @15%: Total cost of Shearing Machine 400000 + Power Press Machine 100000 + Hydrolic Deep Drawing Press Machine 400000 + Buffering Machine105000 1005000 Depreciation on Rs. 1005000 @15% p.a.will come to Rs. 150750 that will be charged to only Drain Stainer. Total cost of the Leathe Machine is Rs. 750000. Depreciation on this machine comes to be Rs. 112500 that will be charged only to Kim Nipple. Total cost of Extrusion Machine & Turning Machine comes to Rs. 1906000. Depreciation of Rs. 285900 on them is Charged only to Plumbing Fittings. Total depreciation of Threading Machine Is charged equally to Nipple & Plumbing Fittings that comes Rs.31087 respectively. 9830 Depreciation of Rs.71250 on Electro Plating Machine will be charged to Nipple & 61420 Drain Stainer Kim Nipple Plumbing Fittings
150750
112500
285900
31087
31088
Plumbing Fittings in the ratio of hrs. i.e. 240:1500 that comes to Rs.9830 & Rs.61420 respectively. Total On Furniture & Fixtures @10%: The cost of furniture & Fixtures used in Factory is Rs.74275. Depreciation of Rs.7428 will be charged equally to all products. The cost of furniture & Fixtures used in Office is Rs.128050. Depreciation of Rs.12805 will be charged to all products In the ratio of Factory Cost. Total On Building @10%: Total depreciation on Factory Bldg., Compound Wall, Lunch Room & Supervisor?s Cabin is Rs. 97730 that Will be charged equally to all products. . Depreciation of Rs. 5040 on Furnace Room Is charged to Plumbing Fittings only. Depreciation of Rs. 20580 on Packing Room Is charged on the basis of production. 150750 153417 378408
2476
2476
2476
3842
3073
5890
6318
5549
8366
32577
32577
32576
5040
4475
7160
8945
5316 + 3518 Depreciation on Raw Material Storage Room & Finished goods Storage Room
4922 + 5725
9450 + 7216
is charged on the basis of Raw Materials & Production respectively. Total depreciation of Rs.50240 on Reception Counter, Partners? Cabin, Account & Salesdept., Security Man?s Cabin is charged on the basis of Factory Cost.
15072
12058
23110
Total Miscellaneous Assets @5%: Depreciation on Furnace is charged to Plumbing Fittings. Depreciation on cycle stand is charged on the Basis of factory cost. Total Equipments @20%: Total depreciation of Rs. 46890 is charged on The basis of factory cost. Total
61018
62442
86277 6250
83 83
66 66
126 6376
14067 14067
11254 11254
21569 21569
Cost
DEPRECIATION AS PER SECTION 32 OF THE INCOME TAX ACT, 1961 FOR THE YEAR 2005-2006 Particular s Rate of Tax Opening Balance as on1/4/05 + Acquisitio n during the year W.D.V. as on31/3/200 6 Depreciati on Machineri Furnitu Buildi es re & ng Fixtures 15% Nil 10% Nil 10% Nil Equipme nts 25% Nil Compute Misc. rs Asset s 60% Nil 25% Nil
4550500
202325 209736 8
159450
75000 13050 0
4550500
202325 209736 8
159450
75000 13050 0
682575
20233 209737
39860
45000 32625
TOTAL INSURANCE PREMIUM FOR THE YEAR 2005-2006 Particulars Buildings Plant & Machineries Furniture & Fixtures Finished Goods Computers Miscellaneous Assets Total Amount (in Rs.) 4195 9100 405 1660 225 130 15715
TOTAL ADMINISTRATION EXPANSES FOR THE YEAR 2005-2006
Particulars Depreciation Insurance Legal Charges Audit Fees Printing & Stationeries Postage Electricity Charges Staff Welfare Expanses Telephone Charges Salaries: Managers (4 managers @ Rs. 20000 per month) Partners (8 partners @ Rs. 10000 per month) Accountant (1accountant @ Rs. 7500 per month) Computer Operators (1 operator @ Rs. 7500 per month) Peons (5 peons @ Rs. 2500 per month) Security Guards (2 guards @ Rs. 2500 per month) Gardener (1 gardener @ Rs. 1500 per month) Rs. 110210 1510 40000 50000 74680 23200 56400 490000 60000
960000 960000 90000 90000 150000 60000 18000
Total
3234000
TOTAL POWER & FUEL COST FOR THE YEAR 2005-2006 Particulars Drain Stainer Kim Nipple Plumbing Fittings Total Cost (Rs.)
Shearing Machine: 1500 hrs. *4Rs.*25 units per hr. Power Press Machine: 600 hrs. *4 Rs.*30 units per hr. Hydrolic Deep Drawing Press Machine: 600 hrs. *4 Rs. *25 units per hr. Buffering Machines: 15000 hrs. *4 Rs.*20 units per hr. Leathe Machine: 1200 hrs. *4Rs.*30 units per hr. Extrusion Machine: 4500 hrs. *4 Rs.*30 units per hr. Turning Machine: 600 hrs. *4 Rs.*15 units per hr. Threading Machine: 2250 hrs. *4 Rs.*25 units per hr. 2250 hrs. *4 Rs.*25 units per hr. Electro Platting machine: 240 hrs. *4 Rs.*30 units per hr. 1500 hrs. *4 Rs.*30 units per hr. Cost of Coal used in Furnace Total
150000
72000
72000
1200000 144000
540000
36000
225000 225000
28800 180000 500000
1494000
397800
1481000
3372800
TOTAL SELLING & DISTRIBUTION EXPENSES FOR THE YEAR 2005-2006 Rs. 1000000 162000 216000 61800 1439800
Particulars Advertisement Rent of Truck Salaries of Salesmen Commission Total
ESTIMATED TAX LIABILTY FOR THE YEAR 2005-2006: Net Profit as per P&L account Partners? salaries 28633335 1920000 30553335 64070
30489265
+
Less: Additional Allowable Depreciation Less: Salary allowed Taxable Profit Tax on Rs. 28104638 @ 30% Surcharge @10% Educational Cess @ 2% Total Tax
1920000 28569265 8431229 843123 185488 9616415
+ +
ESTIMATED COST-SHEET FOR THE YEAR 2006-2007
Particulars Opening Stock + Purchase of Raw Material Less: Closing Stock Raw Material Consumed Freight Wages Packing Expanses Prime Cost Excise Duty Lightening (3:2:5) Indirect Labour Depreciation Insurance Power & Fuel Other Factory Overheads (Estimated @5% of wages) Factory Cost Administrative Overheads (Apportioned on the basis of Factory Cost) Cost of Production Add: Opening Stock of Finished Goods Less: Closing Stock of Finished Goods Cost of Goods Sold Selling & distribution Cost Cost of Sales Profit 56215 56163 (1500 units) 33698142 426790 34124932 8553818 96120 96030 (5000 units) 27650425 358750 28009175 7865825 216200 215903 (7500 units) 51817033 654260 52471293 12954957 DRAIN STAINER (900000 Sets) 157500 18907875 165375 18900000 941928 3728000 2250000 25819928 4400000 57000 600000 171770 3500 1494000 186400 32732598 965492 KIM NIPPLE (1440000 Units) 144000 17283600 147600 17280000 861938 1403480 3960000 23505418 2082000 38000 600000 177969 6590 397800 70165 26877942 772393 PLUMBING FITTIGS (1800000 Units) 277500 33306937.5 284437.5 33300000 1163674 2667530 4050000 41181204 6455000 95000 600000 386618 4115 1481000 133380 50336317 1480419
33698090
27650335
51816736
42678750 Sales
35875000
65426250
PROJECTED TRADING AND PROFIT & LOSS ACCOUNT FOR
THE YEAR ENDED ON31/3/2007
Dr.
Particulars To Opening Stock: Raw Material 579000 Finished Goods368535 To Raw Materials To Wages To Freight To Excise Duty To Gross Profit 144945508.5 To Packing Expenses To Indirect Wages To Lightening Expenses To Power & Fuel To Depreciation To Other Factory Overheads To Salaries To Insurance To Telephone Charges To Electricity To Printing & Stationeries To Postage To Audit Fees To Legal Charges To Staff Welfare Expenses 10260000 By Gross Profit 1800000 190000 3372800 830871 389945 2328000 15715 60000 56400 74680 23200 50000 40000 490000 144945508.5 50796011 Rs.
Cr.
Particulars By Sales 947535 69498412.5 By Closing Stock of Raw Materials 7799010 By Closing Stock of Finished Goods 2967540 12937000 50796011 Rs.
143980000 597412.5 368096
To Selling & distribution To Preliminary Expenses To General Reserve (30% of Net Profit) To Provision for Taxation To Net Profit
1439800 33150 5926330 9587015 13828105 50796011 50796011
BALANCE SHEET AS ON31/3/2007
Liabilities Capital 4700365 P & L Account13828105 18528470 -Distribution of Profit13828105 Reserves & Surplus: General Reserve Current Liabilities: Creditors Provisions: Depreciation Provision: Building 398500 Furniture & Fixtures 38443 Equipments 84402 Plant & Machineries 1262763 Miscellaneous Assets12723 Provision for Taxation Rs. Assets Rs. 381875 2097368 202325 234450 4550500 130500 Fixed Assets: Land Buildings 4700365 Furniture & Fixtures Equipments Plant & Machineries 11631406 Miscellaneous Assets Current Assets: 3734887.5 Debtors Closing stock of Raw Material Closing stock of Finished Goods Cash & Bank Pre-operative Expenses Preliminary Expenses 165750 1796831 - Written Off66300 9587015
5759200 597412.5 368096 16923228 106100
99450
31450504.5
31450504.5
CASH FLOW STATEMENT FOR THE YEAR 2006-2007 Particulars Profit 13828105 + Provision for Taxation 9587015 + Transfer to General Reserve 5926330 + Preliminary Expenses 33150 + Depreciation 830871 Funds from Operations 30205471 - Decrease in Current Liability 28029.5 - Increase in Current Assets 17973.5 Cash from Operations Less: Tax Paid Funds from Financing Activities: Repayment of… + 12% loan from relatives 1600000 + 15% bank loan5000000 Less: Distribution of profit Rs.
30159468 (9616415) 20543053
(6600000) 13943053 (13828105) 114948 16808280 16923228
Add: Opening Cash Balance Closing Cash Balance
ESTIMATED COST-SHEET FOR THE YEAR 2007-2008
Particulars Opening Stock + Purchase of Raw Material Less: Closing Stock Raw Material Consumed Freight Wages Packing Expanses Prime Cost Excise Duty Lightening (3:2:5) Indirect Labour Depreciation Insurance Power & Fuel Other Factory Overheads (Estimated @5% of wages) Factory Cost Administrative Overheads (Apportioned on the basis of Factory Cost) Cost of Production Add: Opening Stock of DRAIN STAINER (945000 Sets) 165375 19845000 165375 19845000 964928 3914400 2362500 27086828 4620000 57000 600000 148369 3500 1568700 195720 34280117 961534 KIM NIPPLE (1476000 Units) 147600 17712000 147600 17712000 873188 1438567 4059000 24082755 2134050 38000 600000 154720 6590 407745 71928 27495788 769227 PLUMBING FITTIGS (1845000 Units) 284437.5 34132500 284437.5 34132500 1184674 2734218 4151250 42202642 6616375 95000 600000 330919 4115 1518025 136710 51503786 1474352
35241651
28265015
52978138
Finished Goods Less: Closing Stock of Finished Goods Cost of Goods Sold Selling & distribution Cost Cost of Sales Profit Sales
56163 727208 (19500 units) 34570606 426790 34997396 6765792 41763188
96030 371505 (19400 units) 27989540 358750 28348290 6245960 34594250
215903 732218 (25500 units) 52461823 654260 53116083 9975079 63091162
PROJECTED TRADING AND PROFIT & LOSS ACCOUNT FOR
THE YEAR ENDED ON31/3/2008
Dr.
Particulars To Opening Stock: Raw Material 597412.5 Finished Goods 368096 To Raw Materials To Wages To Freight To Excise Duty Rs.
Cr.
Rs.
Particulars
By Sales 965508.5 71689500 By Closing Stock of Raw Materials 8087185 By Closing Stock of Finished Goods 3022790 13370425 44741535 141876943.5 To Packing Expenses To Indirect Wages To Lightening Expenses To Power & Fuel To Depreciation To Other Factory Overheads To Salaries To Insurance To Telephone Charges 10572750 139448600 597412.5 1830931
To Gross Profit
141876943.5 44741535
By Gross Profit
1800000 190000 3494470 715331 404358 2328000 15715 60000
To Electricity To Printing & Stationeries To Postage To Audit Fees To Legal Charges To Staff Welfare Expenses To Selling & distribution To Preliminary Expenses To General Reserve (30% of Net Profit) To Provision for Taxation
56400 74680 23200 50000 40000 490000 1439800 33150 4569461 7722143 10662077 44741535 44741535
To Net Profit
BALANCE SHEET AS ON31/3/2008
Liabilities Capital 4700365 P & L Account10662077 15362442 - Distribution of Profit 10662077 Reserves & Surplus: General Reserve Current Liabilities: Creditors Provisions: Depreciation Provision: Building 568387 Furniture & Fixtures 54830 Equipments 114411 Plant & Machineries 1755923 Rs. Assets Rs. 381875 2097368 202325 234450 4550500 130500 Fixed Assets: Land Buildings 4700365 Furniture & Fixtures Equipments Plant & Machineries 16200867 Miscellaneous Assets
Current Assets: 3854048 Debtors 5577943.5 Closing stock of Raw Material 597412.5 Closing stock of Finished 1830931 Goods 19213880 Cash & Bank 106100 Pre-operative Expenses Preliminary Expenses 165750 66300
Miscellaneous Assets 18611 Provision for Taxation
2512162 - Written Off 99450 7722143
34989585
34989585
CASH FLOW STATEMENT FOR THE YEAR 2007-2008 Particulars Profit 10662077 + Provision for Taxation 7722143 + Transfer to General Reserve 4569461 + Preliminary Expenses 33150 + Depreciation 715331 Funds from Operations 23702162 + Increase in Current Liability 119160.5 - Increase in Current Assets 1281578.5 Cash from Operations Less: Tax Paid Less: Distribution of Profit Rs.
22539744 (9587015) 12952729 (10662077) 2290652 16923228 19213880
Add: Opening Cash Balance Closing Cash Balance
ESTIMATED COST-SHEET FOR THE YEAR 2008-2009
Particulars Opening Stock + Purchase of Raw Material Less: Closing Stock Raw Material Consumed Freight Wages Packing Expenses Prime Cost Excise Duty Lightening (3:2:5) Indirect Labour Depreciation Insurance Power & Fuel Other Factory Overheads (Estimated @5% of wages) Factory Cost Administrative Overheads (Apportioned on the basis of Factory Cost) Cost of Production Add: Opening Stock of Finished Goods Less: Closing Stock of Finished Goods Cost of Goods Sold Selling & distribution Cost Cost of Sales Profit
DRAIN STAINER
(945000 Sets) 165375 19853274 173649 19845000 964928 3914400 2362500 27086828 4620000 57000 600000 128088 3500 1568700 195720 34259836
KIM NIPPLE
(1476000 Units) 147600 17715696 151296 17712000 873188 1438567 4059000 24082755 2134050 38000 600000 133647 6590 407745 71928 27474715
PLUMBING FITTIGS
(1845000 Units) 284437.5 34139622.5 291560 34132500 1184674 2734218 4151250 42202642 6616375 95000 600000 284497 4115 1518025 136710 51457364
958198 35218034
766558 28241273
1469236 52926600
727208 726721 (19500 units) 35218521 426790 35645311 6117877
371505 371193 (19400 units) 28241585 358750 28600335 5993915
732218 731506 (25500 units) 52927312 654260 53581572 9509590
41763188 Sales
34594250
63091162
PROJECTED TRADING AND PROFIT & LOSS ACCOUNT FOR
THE YEAR ENDED ON31/3/2009
Dr.
Particulars To Opening Stock: Raw Material 597412.5 Finished Goods 1830931 To Raw Materials To Wages To Freight To Excise Duty Rs.
Cr.
Rs.
Particulars
By Sales 2428343.5 71708592.5 By Closing Stock of Raw Materials 8087185 By Closing Stock of Finished Goods 3022790 13370425 43277189 141894525 To Packing Expenses To Indirect Wages To Lightening Expenses To Power & Fuel To Depreciation To Other Factory Overheads To Salaries To Insurance To Telephone Charges To Electricity To Printing & Stationeries To Postage To Audit Fees 10572750 139448600 616505 1829420
To Gross Profit
141894525 43277189
By Gross Profit
1800000 190000 3494470 616434 404358 2328000 15715 60000 56400 74680 23200 50000
To Legal Charges To Staff Welfare Expenses To Selling & distribution To Preliminary Expenses To General Reserve (30% of Net Profit) To Provision for Taxation
40000 490000 1439800 33150 4296880 7265299 10026053 43277189 43277189
To Net Profit
BALANCE SHEET AS ON31/3/2009
Liabilities Capital 4700365 P & L Account 10026053 14726418 - Distribution of Profit 10026053 Reserves & Surplus: General Reserve Current Liabilities: Creditors Provisions: Depreciation Provision: Building 721285 Furniture & Fixtures 69580 Equipments 138417 Plant & Machineries 2175109 Miscellaneous Assets 24205 Provision for Taxation Rs. Assets Rs. 381875 2097368 202325 234450 4550500 130500 Fixed Assets: Land Buildings 4700365 Furniture & Fixtures Equipments Plant & Machineries 20497747 Miscellaneous Assets Current Assets: 3855003 Debtors Closing stock of Raw Material Closing stock of Finished Goods Cash & Bank Pre-operative Expenses Preliminary Expenses 165750 - Written Off 132600 3128596 7265299 39447010
5577943.5 616505 1829420 23686873.5 106100 33150
39447010
CASH FLOW STATEMENT FOR THE YEAR 2008-2009
Particulars Profit 10026053 + Provision for Taxation 7265299 + Transfer to General Reserve 4296880 + Preliminary Expenses 33150 + Depreciation 616434 Funds from Operations 22237816 + Increase in Current Liability 955 - Increase in Current Assets 17581.5 Cash from Operations Less: Tax Paid Rs.
Less: Distribution of Profit
22221189.5 (7722143) 14499046.5 (10026053) 4472993.5 19213880 23686873.5
Add: Opening Cash Balance
Closing Cash Balance
ESTIMATED COST-SHEET FOR THE YEAR 2009-2010
Particulars Opening Stock + Purchase of Raw Material Less: Closing Stock Raw Material Consumed Freight Wages Packing Expenses Prime Cost Excise Duty Lightening (3:2:5) Indirect Labour Depreciation Insurance Power & Fuel Other Factory Overheads (Estimated @5% of wages) Factory Cost Administrative Overheads (Apportioned on the basis of Factory Cost) Cost of Production Add: Opening Stock of Finished Goods Less: Closing Stock of Finished Goods Cost of Goods Sold Selling & distribution Cost Cost of Sales Profit
DRAIN STAINER
(992250 Sets) 173649 20837250 173649 20837250 1009420 4110120 2480625 28437415 4851000 57000 600000 110815 3500 1647135 205506 35912371
KIM NIPPLE
(1512900 Units) 151296 18154800 151296 18154800 891460 1474531 4160475 24681266 2187400 38000 600000 115476 6590 417940 73726 28120398
PLUMBING FITTIGS
(1891125 Units) 291560 34985813 291560 34985813 1219880 2802573 4255031 43263297 6781784 95000 600000 244629 4115 1555976 140128 52684929
987220 36899591
764300 28884698
1433063 54117992
726721 1603724 (43125 units) 36022588 426790 36449378 5312122
371193 722642 (37850 units) 28533249 358750 28891999 5034151
731506 1389690 (48562 units) 53459808 654260 54114068 6690511
41761500 Sales
33926150
60804579
PROJECTED TRADING AND PROFIT & LOSS ACCOUNT FOR
THE YEAR ENDED ON31/3/2010
Dr.
Particulars To Opening Stock: Raw Material 616505 Finished Goods 1829420 To Raw Materials To Wages To Freight To Excise Duty Rs.
Cr.
Rs.
Particulars
By Sales 2445925 73977863 By Closing Stock of Raw Materials 8387224 By Closing Stock of Finished Goods 3120760 13820184 39072834 140824790 To Packing Expenses To Indirect Wages To Lightening Expenses To Power & Fuel To Depreciation To Other Factory Overheads To Salaries To Insurance To Telephone Charges To Electricity To Printing & Stationeries To Postage To Audit Fees To Legal Charges 10896131 136492229 616505 3716056
To Gross Profit
140824790 39072834
By Gross Profit
1800000 190000 3621051 531713 419360 2328000 15715 60000 56400 74680 23200 50000 40000
To Staff Welfare Expenses To Selling & distribution To Preliminary Expenses To General Reserve (30% of Net Profit) To Provision for Taxation
490000 1439800 33150 3384107 5723277 7896250 39072834 39072834
To Net Profit
BALANCE SHEET AS ON31/3/2010
Liabilities Capital 4700365 P & L Account7896250 12596615 - Distribution of Profit 7896250 Reserves & Surplus: General Reserve Current Liabilities: Creditors Provisions: Depreciation Provision: Building 858893 Furniture & Fixtures 82856 Equipments 157623 Plant & Machineries 2531418 Miscellaneous Assets 29519 Provision for Taxation Rs. Assets Fixed Assets: Land Buildings Furniture & Fixtures Equipments Plant & Machineries Miscellaneous Assets 381875 2097368 202325 234450 4550500 130500 Rs.
4700365
23881854
3978467
Current Assets: Debtors Closing stock of Raw Material Closing stock of Finished Goods Cash & Bank Pre-operative Expenses Preliminary Expenses 165750 - Written Off 165750
5459689 616505 3716056 24448904 106100
3660309 5723277
Nil
41944272
41944272
CASH FLOW STATEMENT FOR THE YEAR 2009-2010
Particulars Profit 7896250 + Provision for Taxation 5723277 + Transfer to General Reserve 3384107 + Preliminary Expenses 33150 + Depreciation 531713 Funds from Operations 17568497 + Increase in Current Liability 123464 - Increase in Current Assets 1768381.5 Cash from Operations Less: Tax Paid Rs.
Less: Distribution of Profit
15923579.5 (7265299) 8658280.5 (7896250) 762030.5 23686873.5 24448904
Add: Opening Cash Balance
Closing Cash Balance
ANALYSIS OF RATIOS (1) Current Ratio: Current Ratio =Total Current Assets Total Current Liabilities
2005-2006 1.184
2006-2007 1.786
2007-2008 2.354
2008-2009 2.864
2009-2010 3.544
Conclusion: The ideal current ratio is considered as 2:1. It looks that though the firm not achieves the ideal ratio for initial two years, its liquidity position is quiet satisfactory. From the third year itself the firm achieves very concrete liquidity position. Constant improvement in the current ratio suggest better liquidity picture in future.
(2) Proprietary Ratio: Proprietary Ratio =Owner?s Fund Total Tangible Assets 2005-2006 0.334 2006-2007 0.521 2007-2008 0.599 2008-2009 0.640 2009-2010 0.682
Conclusion: The ideal proprietary ratio is considered as 1:3, which the firm achieves from the beginning. Constant improvement in this ratio indicates healthy financial strength of the business in coming future.
(3) Fixed Assets Ratio:
Fixed Assets Ratio =Fixed Assets * 100 Capital Employed 2005-2006 38.92% 2006-2007 35.44% 2007-2008 24.29% 2008-2009 17.71% 2009-2010 13.76%
Conclusion: The ideal fixed assets ratio is considered as 0.67. This reveals that the firm invests very small portion of its capital employed in fixed assets. The substantial part of the firm?s capital is invested in its current assets. The main reason for these values lower than the ideal one may the nature of business.
(4) Gross Profit Ratio: Gross Profit Ratio =Gross Profit * 100 Net Sales 2005-2006 35.54% 2006-2007 35.28% 2007-2008 32.08% 2008-2009 31.03% 2009-2010 28.63%
Conclusion: The analysis of gross profit ratio reveals declining trend. In the year 2007-2008 & 2009-2010, gross profit declines comparatively faster which is mainly on account of reduction in selling price during these years. However even in the fifth year the firm is getting 28.63% gross profit margin on its sales, which is significant.
(5) Net Profit Ratio: Net Profit Ratio =Net Profit * 100 Net Sales 2005-2006 13.21% 2006-2007 13.72% 2007-2008 10.92% 2008-2009 10.27% 2009-2010 8.26%
Conclusion: The analysis of the Net Profit ratio implies ups & downs in net profit margin over the period of five years. In second year the ratio improves but due to the price cuts in the third & in the fifth year, the ratio falls considerably.
(6) Operating Ratio: Operating Ratio =(Cost of Goods Sold + Operating Expenses) *100 Net Sales 2005-2006 80.75% Conclusion: For the initial two years the ratio is normal. During third & forth year the Ratio remains stable. The main reason behind the increase in the ratio during these years is reduction in total sales rather than decrease in efficiency. However the efficiency seems to be very unsatisfactory in the last year. Therefore the firm must required to think about the means for maintaining efficiency during the declining in sales. 2006-2007 80.27% 2007-2008 85.26% 2008-2009 86.25% 2009-2010 90.69%
(7) Return on Capital Employed:
Return on Capital Employed =Earnings Before Interest & Tax * 100 Capital Employed
2005-2006 173.58%
2006-2007 180.40%
2007-2008 109.10%
2008-2009 85.56%
2009-2010 59.42%
Conclusion: The above figure shows tremendous returns during the first three ears. However the overall trend in returns shows declining trend. Especially the returns begins to decline sharply from the third year. Though the returns of third year is more than 100%, it is worth noting that the return declines by more than 40% during this year compare to the second year.
(8) Return on Total Assets: Return on Total Assets =Profit after interest & tax * 100 Net Total Assets 2005-2006 62.79% Conclusion: Though the returns are decreasing from the year, the overall returns seems to be Remarkable till the end of fifth year. The main reason behind falling returns from the third year is decreasing profits & increasing total assets. 2006-2007 66.77% 2007-2008 46.95% 2008-2009 39.44% 2009-2010 29.44%
CAPITAL BUDGETING (1) PAYBACK PERIOD METHOD:
Year 2005-2006
Cash Inflow after Tax (Rs.) 19016920
Required Cash Inflow (Rs.) 9662110
Thus the payback period comes out to be 6.097 months i.e. 6 months & 3 days (Approximately). (2) AVARAGE RATE OF RETURN: Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Total Profit after Tax (Rs.) 19016920 19754435 15231538 14322933 11280357 79606183
Average Profit =Total Profit=79606183= 15921237 Rs. (Approximately) No. of Years 5 Average Rate of Return =Avg. Profit * 100 Total Investment =15921237 * 100 9662110 = 164.78% (Approximately).
(3) NET PRESENT VALUE METHOD:
NPV @25% Discount factor 0.8 0.64 0.512 0.4096 0.32768 Cash inflow 7463622 3070785 958437 361036 113562 Present value of cash inflow 5970897 1965302 490720 147880 37212 8612012 Outflow8029457 NPV 582555
(4) IRR METHOD :
NPV @25% Discount factor 0.8 0.64 0.512 0.4096 0.32768 Cash inflow 7463622 3070785 958437 361036 113562 Present value of cash inflow 5970897 1965302 490720 147880 37212 8612012 Outflow8029457 NPV 582555
NPV at 50% Discount factor 0.6667 0.4444 0.2963 0.1975 0.1317
Cash inflow 7463622 3070785 958437 361036 113562
Present value of cash inflow 4975996 1364657 283984 71304 14956 6710897
Outflow8029457
-1318560
I.R.R. = Lower rate + + NPV/+NPV-(- NPV)*(Higher rate-Lower rate) = 25% + 582555/582555+1318560*(50-25) = 25% + 582555/1901115*25
= 25% + 7.66% = 32.66%
SWOT STRENGTH : (1) The labour required does not require much specific qualifications and skills. (2) Less marketing is required in this field as the main marketing aspect is direct. (3) As our unit will be located in the vicinity of GIDC, infrastructural facility will be easily available and moreover we well also get support from the government. (4) As it is in GIDC area, our social duty will also be fulfills as the polluted water would be first by common effluent plant and then disposed. (5) Availability of labour is easy, cheap and is on contract basis also. WEAKNESS: (1) Huge investments at time becomes weakness for the industry and the project becomes financially infeasible. (2) Due to credit facilities given to the customers the lot of working capital gets locked up. (3) Due to developing technology in this field. It has to be a upgraded frequently, which involves high in sunk cost. OPPORTUNITIES : (1) International technical innovations can be achieved by attending different nationalized and internationalized exhibitions and conferences. (2) Creates more chances, as the world is moving towards globalization.
CONCLUSION
By conducting and extensive research on all aspects of establishingEasyFlow Enterprise,manufacturing unit, we conclude that it is defamatory feasible. There is a high potential for market growth in future. As market growth in future. As new residential, commercial and other areas are developing and going are developing and going to be developed in near future, so there is a high potential for the growth of out industry. In the end we can say that we have gained a deep insight into thePlumbing Goods Industry.We had an opportunity to learn about the nitty-gritty of issues ranging from petty once to long term policy issues. We want thank again the people without whose help this study could not be possible.
BIBLIOGRAPHY: ? ? ? ? Ahuja Girish, Systematic Approach To Taxation, 2005- 06 Kotler Philip, Marketing Management, 2003- 04 Advance Accountancy- 4 Advance Accountancy- 5
WEBOGRAPHY: ? www.cera_india.com ? www.shrutisinks.com ? www.niralisinks.com SEARCH ENGINES: ? www.google.com ? www.yahoo.com ? www.msn.com
doc_793970716.docx
Plumbing is the system of pipes, drains fittings, valves, valve assemblies, and devices installed in a building for the distribution of water for drinking, heating and washing, and the removal of waterborne wastes, and the skilled trade of working with pipes, tubing and plumbing fixtures in such systems.
A FEASIBILITY REPORT ON
PLUMBINGACCESSORIES
GROUP NAME –‘I’ T.Y.M.B.A. 2005-2006
K.S.SCHOOLOF BUSINESS MANAGEMENT GUJARATUNIVERSITY AHMEDABAD.
Certificate
This is to certify that the project report – ‘Feasibility Report On Plumbing Accessories’ submitted by Group- I to K. S. School of Business Management, Gujarat University in the partial fulfillment of the requirement for the third year of Bachelors Business Administration. It is a bonafied work carried out by members of the group under my guidance and that no part of this report has been submitted for any other degree.
Project coordinator (Mrs. Radha Ravichandran)
MEMBERS OF GROUP – ‘I’
MAULI BODIWALA NISHITA DOSHI 3023 RAKESH KOLAWALE 3035 VIRALI MODI 3048 JIGISHA PATEL 3053 JINALI PATVA 3055 MANTHAN PRAJAPATI 3067 ESHA SHAH 3068 GAURAV SHAH 3074 LENCY SHAH 3082 VAIBHAVI SHAH
ACKNOWLEDGEMENT
An acknowledgment is something which is so often over looked by people who read a project best to us this is something very important, an integral part of this project as this expresses our heart felt gratitude towards all those people who helped us during the course of this project and in the end helped us give it the form as seen today. It is true that world outside name many of a time is different from what we have perceived. Similarly it is possible that the theoretical knowledge. Getting practical knowledge is an important thing, which is not possible without the support, guidance, motivation and inspiration provided by different persons. Hence, our project bears the imprints of many people. We are greatly indebted to Mrs. Sarla Achuthan, the director ofK.S.Schoolof Business Management, who gave us the valuable opportunity of involving ourselves in such project assignments. We wish to express our deep sense of gratitude to our esteemed faculties for their immense help and valuable guidance in conducting the study from its conception to its completion. We would like to thanks Mrs. R. Radha for her kind support and criticisms that she had expended to as at every junction of air journey. We want to thank Ismail sir, Tasneem madam, McDonald sir and Bindiya madam for their immense help and support. We are thankful to Mr. Kishanbhai Shah of Shriji Kripa Exports and Mr. Ashokbhai Shah without whose help, it was impossible to know the details of the production process of the plumbing fittings.
INDEX
WHAT IS A ‘FEASIBILITY REPORT’?
“A report which projects the practical viability of a venture with respect to different dimensions is called a FEASIBILITY REPORT” By feasible we mean that the venture must be practically possible with respect to the following aspect. TECHNICAL: The technology must be such that it must use the available resources in the most potential efficient manner and at the same time it should be easily obtained and practically possible implications in the different phases of work process. MARKETING: Just producing a product is not the ultimate end but rather a beginning. It must be readily accepted and adored by customer or market. FINANCIAL: It must assure a fair rate of return of the capital invested first to owners as well as it should be more acceptable and trustworthy to the third party i.e. Investors also. SOCIAL: It should not only be viable from the above mention angels but it must be such that it does not harm the society. The above four aspects should be effectively formulated. Project estimation parameters and road map to set up an enterprise inGujarat. 1) Identification ofProject:? Assessment of market potential. ? Assessment of status of technology available. ? Balance requirement and resource availability ? Ensure technical feasibility and financial viability.
2) Formulation of Project Proposal:? Market potential ? Decision about location ? Requirement of land and building ? Requirement of plant and machineries ? Requirement of other facilities and utilities ? Assessment of working capital ? Technology tie-up ? Schedule of implementation ? Legal entity of the organisation ? Assessment of project cost ? Tie-up means of finance ? Cost of production and profitability ? Break Even Point ? Cash Flow ? Debt service coverage ratio ? Other ratio to establish financial viability ? Economic benefit 3) Undertaking Government formalities:? To register the company at company registration office ? Building plant approval from Gujarat Industrial Development Corporation (GIDC) ? Water connection and power connection ? Clearance from pollution angle N.O.C. or consent from Gujarat Pollution Control Board. ? To use molasses send license in needed. ? A PAN card is needed for Sales Tax. 4) Actual Implementation:? After all government formalities promoters can start their project.
REASON FOR SELECTING THE PROJECT
Each and every individual, firm, industry and nation wants to be ahead of one another with the help of entrepreneurs, adequate and amiable labour force, proper transportation andother infrastructural facilitiesalong with the line help the business units to bloom. Plumbing Accessories is a product categorized as a durable good, because of vast range of availability of shapes. Its demand is increasing at 5% p.a. With the same hope of bright future, we propose to venture ourselves in the field of plumbing accessories where the scope of development is extended up to the horizons. As people have started thinking of investing in home and especially in bathrooms, the demand of plumbing accessories is increasing day by day. Today's world is "Glamour World". Living standards of people inIndiaare also increasing. Every person in the society is ready to pay higher amounts for things that can be considered as "status symbol".
PROFILE OF THE FIRM
Name of unit Constitution Factory address : EASY FLOWENTERPRISE : : PARTNERSHIP FIRM
Easy Flow Enterprise 57/7, GIDC Kerla Ahmedabad –Kandala Highway, Bavla. : Plumbing Accessories : : : Sep 1, 2004 Rs. 8029457 Partners? Contribution Rs. 4700365 Loan for working capital: Rs. 1600000 Loan from bank: Rs. 5000000
Project
Date of incorporation Cost of project Financing mix
PARTNERSHIP DEED
This agreement of partnership made at Ahmedabad on this theApril 1, 2006by and between: 1. MAULI BODIWALA 15, Shivali Appt., LawGarden, Ahmedabad –06. ESHA SHAH “Shri Sadan”, Pankaj Society, Ahmedabad – 07. GAURAV SHAH New Purvi Society, Vasna Barrage Road, Ahmedabad – 07. NISHITA DOSHI Riddhi Flats, Vasna, Ahmedabad – 07. RAKESH KOLAWALE Jawaharnagar Soci., Vasna, Ahmedabad – 07. VIRALI MODI Tripura Apartments, Navarangpura, Ahmedabad – 15. JIGISHA PATEL Rameshwar flats, Fatehnagar, Ahmedabad – 07.
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JINALI PATWA Jaydarshan Appartments, Paldi, Ahmedabad – 07. MANTHAN PRAJAPATI Abhishek Apartments, Bhattha, Ahmedabad – 07. LENCY SHAH Sarjan Apartments, Paldi, Ahmedabad – 07. VAIBHAVI SHAH C- 105 Sumey Apartments, LawGarden, Ahmedabad - 06
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Where as the above parties have decided to commence the business of manufacturing and/or trading of PLUMBING ACCESSARIES under the name and style of M/S EASY FLOW ENTERPRISE with effect from todayApril 1, 2006. And whereas the parties here to being the respective partners of this partnership herein after referred to as firm. And whereas it is deemed desirable that the terms and conditions to which the partners have agreed mutually to carry on the business in partnership may be reduced into writing.
HENCE THIS DEED OF PARTNERSHIP WITHNESSETH AS UNDER : Name : The business of the firm shall be carried on under the name and style of M/S EASY FLOW ENTERPRISE, however partners shall be entitled to change the name of the firm as may be mutually agreed upon. Place of the Business : That the principal place of the business of the firm shall be situated at Plot No. 42, Kerla Estate, Bavla. But the partners shall be at liberty to shift it to any other place Or places and to open branch or branches at any other place or places as may be agreed upon. Nature of Business : That the nature of business of the firm shall be manufacturing and/or trading of plumbing accessories. However the partners shall be entitled to carry on any other business or businesses under this partnership which they may decide mutually. Commencement : That this partnership shall be deemed to have been commenced on and with effect fromApril 1, 2006. Duration : That the duration of this partnership is not fixed and it shall be partnership “AT WILL”. Accounting Year : That the accounting year of the company shall commence from April 1 and will end on March 31 every year. The first accounting year of the firm will be from1-04-2006to31-03-2007. AccountsandRecords: That proper and regular accounts and records of the affairs and transaction of the firm shall be maintained and kept at the principal place or any other relevant or appropriate place or places in accordance with the requirements of the business of the firm.
Final Accounts : That the balance sheet as on the last day of the accounting year and profit and loss account for the year shall be prepared at the end of each accounting year. The profit and loss as the case may be of the year shall be worked out and be allocated between the partners as per the profit –loss sharing ratio. Capital : That the initial capital of the firm shall be Rs. 4700365 which shall be contributed by the partners equally. Drawings : That the drawing shall be made by partners as many times in the year as per the wish to the partners taking into consideration the respective accounts. Borrowing Power : That the film shall be entitled to secure deposits, borrow money and take loans from banks, financial institution and other corporate bodies or non corporate parties, the partners can also provide loans to the firm. Bank Account : That bank account in one or more banks will be operated in the names of the firm by any one or more of the partners and they shall be authorised to avail all types of facilities in the name of then firm that are generally allowed by the banks. Partners are also entitled to authorize any other person for operation of bank account through a power of attorney signed by all the partners. Remuneration : That all partners shall keep themselves actively engaged in conducting the affairs in the business of the partnership as working partners of the firm. It is hereby agreed that in consideration of the working partners keeping themselves actively engaged in the conduct of the affairs of the firm as working partners they shall be entitled to draw remuneration w.e.f., 1-42006 as under.
A) The remuneration payable to the working partners shall be calculated as percentage of the book profit for each accounting year (first accounting year from1-4-2006to31-3-2007and subsequent accounting year of 12 months) in the following manner. Name of Partners MAULI BODIWALA NISHITA DOSHI RAKESH KOLAWALE VIRALI MODI JIGISHA PATEL JINALI PATVA MANTHAN PRAJAPATI ESHA SHAH GAURAV SHAH LENCY SHAH VAIBHAVI SHAH Amount (Per Month) 20000 10000 10000 10000 10000 10000 10000 20000 20000 10000 10000
For the purpose of above calculation book profit shall be calculated on basis as defined in explanation 3 to section 40(b) of the income tax act, 1961 or any other applicable provision as may be in force for the income tax assessment of the partnership firm for the relevant accounting period. B) In case of loss remuneration will be paid to the working partners as paid in the case of profit. The partners shall be entitled to increase the above remuneration and may agree to pay remuneration to other working partner of partners as the case may be. The parties here to also agree to revise the mode of calculation the above said remuneration as may be agreed to by and between the partners from time to time. The remuneration payable to the working partners shall be credited to their accounts at the close of accounting period when final account of the partnership are made up and the amount of
remuneration the same in the manner referred to herein before. However nothing herein contained shall preclude the working partners from withdrawing any amount standing to the capital and/or current or loan account year share of profit for the relevant accounting year in such manner as may be decided by the partners by mutual consent. Interest : We do not provide interest on the capital up to the five years but then we will provide interest at the rate of 10% p.a. Share in Profit or Loss : The profits and loss will be distributed among all the partners equally. Modification : That the partners shall be entitled to modify the above terms relating to remuneration, interest etc. payable by executing supplementary deed and any such deed when executing shall have effect, unless otherwise provided, from the first day of the accounting period in which supplementary deed is executing and the same shall from part of this deed of partnership. Arbitration : That any dispute of difference of opinions among the partners as may arise during the continuation of this partnership shall be referred to arbitration and in such cases the provision of INDIAN ARBITRATION ACT, 1940 shall be made applicable. Application of Act : That with respect to all other matters not specified herein connected with this partnership regard shall be had to the law of partnership, for the time being in force. Amendment and Alteration : That the partners shall by mutual, oral and written agreement is at liberty to amend, alter, vary or add to the aforementioned terms and conditions. After hearing the translation of this partnership deed and fully understanding the terms and conditions, we the parties hereof put our hands to this deed on the date, month and year. Introduction
THE HISTORY OF PLUMBING
From ancient times, the rise and fall of the River Nile portended periods of famine or good fortune for the peoples ofEgypt. Other than wells, the River Nile is the only source of water in the country. During an idyllic year, the flooding of theNilewould begin in July, and by September its receding waters would deposit rich, black silt in its wake for farming. Before taming the river, however, the ancient Egyptians had to overcome the river's peculiar problem. TheNilesruns along an alluvial plain, the ebb and tide of theNilecorresponding to an annual movement of the ground. When theNileis the lowest, the ground completely dries up. When it floods, the water seeps into the dry soil and causes the ground to rise as much as a foot or two like some bloated sponge. As the inundation subsides the ground settles again to its original dry level, but never settles evenly. The nameEgyptmeans "Two Lands," reflecting the two separate kingdoms of Upper and Lower prehistoricEgypt- Delta region in the north and a long length of sandstone and limestone in the south. In 3000 B.C., a single ruler, Menes, unified the entire land and set the stage for an impressive civilization that lasted 3,000 years. He began with the construction of basins to contain the flood water, digging canals and irrigation ditches to reclaim the marshy land. From these earliest of times, so important was the cutting of a dam that the event was heralded by a royal ceremony. King Menes is credited with diverting the course of theNileto build the city ofMemphison the site where the great river had run. By 2500 B. C., an extensive system of dikes, canals and sluices had developed. It remained in use until the Roman occupation, circa 30 B.C. - 641 A.D. For pure water, the Egyptians depended upon wells. Their prowess in divining hidden sources is shown in the "Well of Joseph," constructed about 3000 B.C. near the Pyramids of Gizeh. Workers had to dig through 300 feet of solid rock to tap into the water.
PLUMBING FOR THE DEAD: Egypt's pyramid-temples which have withstood thousands of years of time also attest to the skill of the ancient construction workers. The earliest pyramids were built from 2660-2500 B.C., a period running parallel with the Sumer-Mesopotamians when they achieved their greatest advances in civilization. Yet any cultural ties thatEgypthad withMesopotamiahad vanished by this period. By 2500 B.C. the Egyptians were pretty adept with drainage construction, accentuated by the significance that water played in their priestly rituals of purification and those affecting the burial of the kings. Excavators of the mortuarytempleofKing Suhuraat Abusir discovered niches in the walls and remnants of stone basins. These were furnished with metal fittings for use as lavatories. The outlet of the basin closed with a lead stopper attached to a chain and a bronze ring. The basin emptied through a copper pipe to a trough below. The pipe was made of 1/16" beaten copper to a diameter of a little under 2". A lap joint seam hammered it tight. COPPERSMITHS: The ancient Egyptians were early developers of pipe and the techniques of making copper alloys. In the begimling, of course, their pipe and fittings were very crude. Like the Mesopotamians, they used clay pipe made from a combination of straw and clay. First it was dried in the sun, and then baked in ovens. As they improved upon their clay sewer pipe, the Egyptians were able to drain the low-lying portions of theNileValley, and gradually the entire region evolved into a fertile garden. The Egyptians were quite skilled in working metals. They melted metal in a crucible over a super-hot fire, the intense heat provided by men fanning the fire with blowpipes made of reeds tipped with clay. The molten metal was poured out and allowed to cool, then beaten out with smooth stones into sheets of the required thickness. It was then cut to shape. One explanatory picture in a tomb chapel describes the process as "causing metal to swim." The homes of the wealthy were airy and roomy, literally. There were bedrooms, servants' quarters, halls, dining rooms - and bathrooms. Actually, a "bathroom" was usually a small recessed room with a square slab of
limestone in the corner. There the master of the house stood while his slaves liberally doused him with water. The waste water ran into a large bowl in the floor below or through an earthenware channel in the wall where it emptied into still another bowl outside. Then that bowl was baled out by hand.
BUSINESS ENVIRONMENT
Past few years were not good years for the economy but now the economy is showing signs of recovery & expanding market. The level of income is increasing. People are more concern with the present merry making and luxurious rather than future saving. The major expansions are vertical giving way to urbanization and increasing the real estate. These circumstances give rise to high-rise development and thus expanding the market of PLUMBING ACCESSORIES. ECONOMIC ENVIRONMENT: The erection of a stable government together with a revival in industrial growth helped the Indian economy to grow about 7.9 % broadly in line with expectations. Economy shows signs of recovery, boom, increase in capital formation. These all things show a better market and a constant increase in demand of plumbing accessories.Indiaas being developing economy, any industry that helps to increase GDP will be entertained in the country. The contribution of Plumbing Accessories industry towards the GDP is about 12.8 %. POLITICAL ENVIRONMENT: The political environment for next few years seems to be stable. UPA government has just showed their power in the center since few months butGujaratgovernment is stable since three years. So, 'Easy flow' will not face any problems to start its business in the cities ofGujarat. It shows good sign for both industry and democracy.
LEGAL ENVIRONMENT : Plumbing Accessories are not included in the products that have to becompulsory registered.
GujaratPollution Control Board Certificate: The unit will be eco-friendly and there will be no emission of effluents by the company. Yet it has to obtain permission from Gujarat Pollution Control Board. It is easily available as unit in none polluting unit.
OTHERS: Being a factory "Easy Flow " will be governed by the following acts. (i) Indian Factories Act (ii) Industrial Disputes Act (iii) Payment ofGratuityAct, 1972 (iv) Payment of Bonus Act, 1965 (v) The Employees Provident Fund Act, 1952 (vi) EmployeeStateInsurance Act The provisions of above acts would be taken into consideration as and when need arises. SOCIAL/CULTURAL ENVIRONMENT: Nowadays, the meaning of having bathroom has become wider because people treat it as status symbol. That is why they consider plumbing accessories as ornaments of bathroom. In this view, we can expect that 'Easy Flow' can cover wider market. There is no biological harm to the workers in the plant. So 'Easy Flow' industry is very safe for society at whole. COMPETITION : InGujarat, there are some brands of plumbing accessories. 'Easy Flow' will have to face high competition due to many players in the market
PRODUCT DESCRIPTION
SELECTION OFPRODUCT: Having vast range of availability of design and different kinds of material, plumbing accessory is a product categorized as industrial goods. Its demand is increasing at faster rate per annum. And if rural market is properly taped by increasing sales, the growth rate may be increased. “Easy Flow” will be adhering to all the quality and safety norms. Keeping in mind the present and potential demand, we have selected these products for feasibility project. “Easy Flow” produces plumbing accessory using stainless steel and brass. These materials ensure that “Easy Flow” products provide not only quality but also proper water flow function and the most important, high durability. “Easy Flow” is going to produce various categories of plumbing accessory. ? Plumbing Fittings ? Kim nipple ? Drain strainer
PARAMETERS
SIZE: The plumbing accessories manufactured by “Easy Flow” would range as follows. ? ? ? ? ? ? ? ? ? ½” ¾” 1” 1.1/4” 1.1/2” 2” 2.1/2” 3” 4”
SPECIFICATIONS: Our products are available infollowing andplating. ? Nickel plating ? Chromium plating ? Brass plating ? Radium plating ? Copper plating Our products are available in black, white, granite, pearl finish, cherry. We also provide other colours as per customer?s requirements. Combination of two plating is also possible.
WEIGHT: Plumbing fittings : as per size Minimum: 100gms. Kim nipple: as per size Minimum: 100 gm Selection of product 220 gms.
Drain strainer:
THICKNESS: As per size Brand : We have decided the brand name for our product and that is “EASY FLOW”. And our punch line is “ Where durability matters…”. PACKAGING DESIGN : We will use plastic bags which avoid surface damages of the surface of our products. For outer packing we are going to use brown card paper to avoid damages in transit. The cost of plastic bag is Rs.0.50/- per plastic bag and brown cardboard cost Rs.5/per box. Supplier (plastic bag) : Avinash Enterprises, Nr.Lakhia?s garage, Mirzapur, Ahmedabad. Supplier (cardboard box): Ahmedabad. Gokulesh print-O-Graph, Nr.Kankaria Circle,
PLUMBING ITEMS : Building plumbing designis important in creating a robustplumbing system. Because having a proper drainage and water flow is extremely
important in avoidingplumbing problemssuch as back up and water pressure problems. Plumbingdesigns are difficult tasks for larger building because of the extensive piping required. Furthermore, creating enough water pressure to move water through the pipes must be carefully fit. Thereforeplumbingfittings play an important role in building plumbing design. Because once the plumbing has been completed and set in place, any future problems will be difficult to correct so here, durability matters a lot. SSS, SST, SS, ST, etc... These are the terms used in describing the connections for plumbing fittings. „S? stands for „Slip?, „Socket?, or „Spigot?, which means that the connection is a solvent weld (or glued) type. And both sockets and spigots can be threaded. Male and Female Many plumbing terms were originated by sex like male means spigot, female means socket. Spigots, Sockets, and Slip. A spigot is the equivalent of a male end. A socket is a female end. In other words, a spigot is to be fit into a socket. Slip can mean either a spigot or socket, but normally means socket, and the connection is solvent welded. Cu, Type K, Type L. All are abbreviations sometimes used for pipe and fittings. Insert A type of fitting used with the pipes.
THE BASIC FITTINGS
BellReducer.A bell reducer has female threads on both ends.Bellreducers are generally not available in PVC.
Cap.A cap may have a solvent weld socket end or a female threaded end. The other end is closed off. If a solvent weld cap is used to provide for a future connection point, be sure to leave several inches of pipe before the cap! When the cap is cut off for the future connection, there will need to be enough pipes present to glue a new fitting onto! When a solvent weld cap is butted right up against another fitting, making it possible to ever use the capped connection again and again!
Coupling.A coupling connects two sections of a pipe together. Couplings may have solvent weld socket ends or female threaded ends.
Cross.A cross connects four pipe sections together. Crosses may have solvent weld socket ends or female threaded ends (no female threads available for PVC). Crosses are special order parts at many suppliers. Crosses create a great deal of stress on the pipe because they have four connection points. Female Adapter.Female adapters are used to add a female threaded pipe connection on a solvent welded pipe. Never use female adapters when converting to a metallic pipe. The metal male pipe threads tend to split the PVC fittings.
Male Adapter.Male adapters are used to add a male threaded pipe connection to a solvent weld pipe section.
Plug.It is used to plug a unused fitting outlet. It may have female threads or a solvent weld spigot. In most cases, a threaded plug is used to provide a connection point for future use. Side Outlet Ell.Side outlet ells are an ell with a side outlet. They most commonly have two 3/4" or 1" solvent weld sockets, with a 1/2" side outlet having female threads. Side outlet ells are common in residential sprinkler systems, but are seldom used in commercial installations. The side outlet is listed last when stating the side outlet ell size. Tee. It is the most common fitting! It is available with all female thread sockets, all solvent weld sockets, or with opposed solvent weld sockets and a side outlet with female threads. Many configurations of „reducer tees' are available, meaning that one or more of the sockets is smaller than the others. Tees are always labeled as „NxNxN TEE? with the side outlet as the last size. The largest of the other two sockets is always listed first. Thus a 1x3/4x1/2 TEE SST has a 1/2" threaded side outlet (T for threaded) with the remaining sockets being 1" and 3/4" solvent weld sockets (SS for slip, slip). On a "bullhead tee" the side outlet is the largest socket on the tee (thus it looks somewhat like a bull's head I guess). The side outlet is referred to as the "bullhead".
SINKS: There are many types of sinks which are used for different purposes in which our drain strainers are used. They are as under.
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Bathroom sinks Kitchen sink Countersink Console sinks Countertop sinks Pedestal sinks Undermount sinks Wall-mount sinks Laundery sinks Glass Sinks Apron Front Sink Farmhouse Sink
These are big drain strainers
PRECISION U 2
PRECISION U 1 3/4
PRECISION U MAXI
PRECISION U 1
PRECISION U 3/4
PRECISION U 1 1/2
PRECISION U
MEDIAN 8S
MEDIAN 9
MINI
MEDIAN XL 6S
AXIS 6S
PRACTIKA
DIAMOND U 2
DIAMOND U 1 3/4
DIAMOND U 1
PRECIS U 1
PRECIS U 3/4
DIAMOND MINI
KINDS OF MATERIALS AVAILABLE : Stainless Steel, Oil Rubbed Bronze, Copper, Brushed Nickel, Satin Nickel, Polished Chrome, Polished Brass, Black, White, Biscuit, Brushed Chrome, Antique Brass, Weathered Copper, Chrome, Old Bronze, Brushed Nickel, Weathered Brass, Oil Rubbed Bronze, Polished Chrome, Satin Nickel, Verde Green, Antique Copper, Antique Brass, Polished Copper, Weathered Copper, Brushed Chrome, Wrought Iron and many other finishes.
CHROME STAINLESS BRUSHED STEEL COPPER
BLACK
WHITE
BISCUIT
BRASS:
Brass metalis an alloy created by combining zinc and copper. Distinct from bronze,brass materialsgenerally have a shiny yellow coloration that is highly desirable in home fixtures. The specific hardness and shades of brass depends on the percent makeup of each of its elemental components. Brass alloy importand export businesses are fairly common and provide a wholesale source for all kinds of brass parts. In theIndia, brassis imported fromChinaand other Asian countries with key production and cost advantages that get passed onto the consumer. Generally,brass decoris common in bathrooms and kitchens because it is visually appealing, while the metal is not used as heavily in machine parts. Brass suppliers will usually offer volume discounts on purchases.
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Brass is a yellowish alloy consisting mainly of copper and zinc -usually 67 percent copper and 33 percent zinc. Sometimes other metals are included in the amalgamation. Brass has boldness and impudent aggressiveness The higher the copper content, the more expensive the brass will be. Brass with a higher copper content will tend to be redder in color than brass with lower copper content Some types of brass are called bronzes, despite their high zinc content. An alloy is made up of roughly half copper and half zinc which has a nice yellow color. An alloy of copper and zinc, usually yellow in colour, therefore sometimes mistaken for gold. Brass was used by the ancient Romans for some of its base metal coins, and frequently used for counters and jetons in the late 18th century.
CHROMIUM: Chrome is ametal. As a general rule, and especially in the metals field, chromium is not useful as a solid, pure substance. Things are not made of solid chrome. Rather, when you hear that something is chrome, what is invariably really meant is that there is a thin layer of chrome, a plating of chrome, on the object (the bulk of the object usually being steel, but occasionally aluminum, brass, copper, plastic, or stainless steel). Chrome isalwaysapplied by electroplating; it is never melted onto parts in the fashion of chocolate on strawberries, or applied in any other way than by electroplating.
There are two different general applications for chrome plating: "hard chrome plating" (sometimes called 'engineering chrome plating') and "decorative chrome plating" (sometimes called 'nickel-chrome plating'). Hard Chrome Plating: Hard chromium plating is chrome plating that has been applied as a fairly heavy coating for wear resistance, lubricity, oil retention, and other 'wear' purposes. Some examples would be mold surfaces, thread guides etc. Hard chrome plating is almost always applied to items that are made of steel, usually hardened steel. It is metallic in appearance but is not particularly reflective or decorative. Decorative Chrome Plating: Decorative chrome plating is sometimes called nickel-chrome plating because it always involves electroplating nickel onto the object before plating the chrome (it sometimes involves electroplating copper on the object before the nickel, too). The nickel plating provides the smoothness, much of the corrosion resistance, and most of the reflectivity. The chrome plating is exceptionally thin. The chrome adds a bluish cast (compared to the somewhat yellowish cast of nickel), protects the nickel against tarnish, minimizes scratching, and symbiotically contributes to corrosion resistance. But the point is, without the brilliant leveled nickel undercoating, you would not have a reflective, decorative surface. STEEL:
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An alloy of iron with small amounts of carbon; widely used in construction; mechanical properties can be varied over a wide range. Steel is a metal alloy whose major component is iron, with carbon being the primary alloying material. Carbon acts as a hardening agent, preventing iron atoms, which are naturally arranged in a lattice, from sliding past one another. Varying the amount of carbon and its distribution in the alloy controls the qualities of the resulting steel. Steel with increased carbon content can be made harder and stronger than iron, but is also more brittle. ... Steel usually contains some other alloying elements such as silicon, manganese, etc. as well as impurities such as sulfur and phosphorus.
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Alloy of iron; the most common types are Cor-Ten and stainless
PLASTIC : ? A material made from petroleum capable of being molded, extruded, or cast into various shapes. There are many different kinds of plastic made from different combinations of compounds.
PACKAGING: Packaging is an important part of production process. It includes all the activities of designing and producing for container. For a product, the container is called a package and it includes three levels material. ? Primary package ? Secondary package ? Shipping package Advantages of packaging: ? We do well design packing because it can create convenience and promotion value also. ? We believe that packaging contribute to instant brand recognition so we give importance to packaging. The factors that we consider while doing packaging Consumer affluence : We check whether the customer is ready to pay a little more for convenience, appearance, dependability and prestige of better packages. If they are ready then we pay more attention towards packaging but if they are not ready to pay more for that at that time, we only do basic packaging. We do not go for secondary packaging. Steps that we take before packaging are as under: 1) Decision regarding packaging material: We do primary packaging with plastic bags. We also do secondary packaging with plastic bags. 2) Decision regarding size, colour and shape of package We pack the products into cartons as per their size. If total number of units is more then they are packed in big cartons and if they are less, they are packed in small cartons.
The colour of the cartons does not matter for us bur we insist for brown colour as it looks good. Brand name : We have all the cartons on which name of our brand is typed so it is also a kind of brand recognition 3) Testing of packaging We test the package as under. Engineering test is to be done to ensure that the package stands up under normal conditions. Visual test is to be done to ensure that the script is legible. Dealer testing to find that the dealers find it attractive and easy to handle. We do packaging when manual checking of products is done.. STEPS FOR PACKAGING : First of all, in the manual checking unit, a person keeps a close watch on each product and if he finds anything wrong with product?s quality, size or shape, he rejects that product. So this is one of the important steps of process. After that, each of these products is packed in small plastic bags. This is primary packaging.
Afterwards, these plastic packed products are again packed in one big plastic bag. That is called secondary packaging. Then they are packed in cartons this is called shipping packaging. Afterwards they are to be sent to customers. If they are produced in advanced they are stored in the godowns. For packing, cartons are acquired from specialized dealers appointed by the firm for packing purposes. They are made of special material so that they can last long and the products which are packed inside will not be defected.
Most of the times we use taping machine for packaging. After packing the products in cartons, these cartons are directly are sent to the storage area. These areas are much necessary for any company for retaining their manufactured items properly and for long duration storing safety. We have a storage area having 3 compartments differently divided according to their utilities. ? In first compartment, raw materials are to be stored. ? The second one is used for storing packed cartons. ? The third compartment is used to store goods which are specially manufactured according to any order and which are on the last stage of delivery.
EXPECTED CAPACITY OF PRODUCTION Working Days : 300 Days
PRODUCT MACHINE INSTALLED CAPACITY IN HRS INSTALL ED CAPACI TY IN UNITS 2880000 1728000 5400000 RUNNING HRS PER DAY TOTAL HOURS OF YEAR PER HR PRODC. IN UNITS UNITS PRODUC ED YEARLY 1440000 1620000 1440000 WORKE RS COST OF MACHINE
KIM NIPPLE
LEATHE MACHINE THREADING MACHINE ELECTRO PLATING MACHINE
2400 hrs 2400 hrs 900 hrs
4 hrs 7.5 hrs 1 hr (Only for 240 days)
1200 hrs 2250 hrs 240 hrs
1200 720 6000
1 S.Sk 1 S.Sk 2 S.Sk
374500 244500 375000
PLUMBING FITTINGS ( 9 in 1 )
FURNACE AND WATER EXTRUSION MACHINE ( 2 machines) 2400 hrs 4800 hrs 1440000 2880000 5 hrs 10 hrs 1500 hrs 3000 hrs 600 1200 900000 1800000
2 SK 2 S.Sk
175000 578000
4 S.Sk 1156000 780000 90000 375000 425000 160000
DRAIN STAINER
TURNING MACHINE THREADING MACHINE ELECTRO PLATTING MACHINE SHEARING MACHINE POWER PRESS MACHINE
2400 hrs 2400 hrs 2400 hrs 2400 hrs 2400 hrs
7200000 1920000 2880000 4320000 7200000
2 hrs 7.5 hrs 5 hrs 5 hrs 2 hrs
600 hrs 2250 hrs 1500 hrs 1500 hrs 600 hrs
3000 800 1200 1800 3000
1800000 1620000 1800000 2700000 1800000
1 SK 1 S.Sk 2 S.Sk 4 S.Sk 1 Sk 1 S.Sk
HYDROLIC DEEP DRAWING PRESS MACHINE BUFFERING / POLISHING MACHINE ( 7 Machines )
2400 hrs
7200000
2 hrs
600 hrs
3000
1800000
2 S.Sk
340000
2400 hrs
144000 7 hrs for 6 8 hrs for 1
15000
16800 hrs
1008000
15000 hrs
180
2700000
14 S.Sk
105000
ANNUAL PRODUCTION OF PRODUCTS KIM NIPPLE DRAIN STRAINER PLUMBING FITTINGS : : : 1440000 Units 900000 Sets(2700000units) 1800000 Units
TECHNICAL FEASIBILITY
SELECTION OF TECHNOLOGY: In order to keep the investment at a minimum necessary level, while ensuring global competitiveness machinery selection has carried out. There were two types of machinery available. (1) Capital intensive (Automatic machines) For this machinery, only operators for machine are required. The whole process is automated right from casting of raw brass to getting finished product. (2) Labour intensive Here,laborersare to be employed for running machinery as well as assembling the parts. We have adopted both the types of technologies as we need workers to maintain and operate machines and the packaging is completely done by the manpower.
PROCESS
Product –I: Name
lumbing fitting made of Brass Input: Brass Scrap Oil Nickel Chromium (Plating Material) (Polishing material) Luster 1) Melting of Brass Scrap: The basic raw material for this product is Brass scrap which is imported fromU.K.andU.S.This brass scrap is melted in the furnace at 800?In this process 2% impurities are removed and 8% is the burning loss so finally we can get 90% material for further process. The capacity of this furnace is 500 kg of brass scrap at a time and 2 semi skilled workers are needed for operation. 2) Making Pipes of Brass: The moulds of pipes are filled with this melted brass. The pipes are made as per the required size of finished products. After that these molds are put in water so they can become solid. Here, 2 semi skilled, workers are needed. 3) Polishing the rough pipes: For this process, Extrusion machine is needed. The rough pipes are polished with luster capacity is 10 pipes per minute. Here, 1 worker is needed for operation. 4) Cutting the pipes into required size: In this process, the in the Turning machine polished pipes are cut as per the required size to make the pipe fittings as per order. At this stage, 1 worker is needed on the machine. The capacity of the machine depends on the size 10 required. 5)Here, the small pieces made above are put into threading machine to give the proper shape so that the fitting can be easily fit into the pipes of relevant size. The capacity of it is 12 pieces.I semiskilled worker is needed for this purpose. The wastage, which is in the powder form, is remelted to use it as a raw material. If we want the plating of nickel-chromium, we have to polish it again otherwise the output of the above process can be considered as the finished produce made of Brass. 6) Nickel Chromium Plating: Here, in Elector Platting Machine, the brass fittings are plated by nickel chromium solution to give the finishing like stainless steel. The capacity of the machine is 15-20 pieces/minute. Here, 2 semi-skilled workers are required. Now, this finished product is sent for inspection & then for packing. Packing: Each piece is packed in plastic bags & then these small packs are packed in a big carton. Now, they are sent for dispatching.
Plumbing fittings
Plumbing Fittings
Melting the brass scrap
Making pipes of brass
Polishing the rough pipes
Cutting the pipes and giving proper shape
Making threads
Nickel chromium plating
Packing
(2) Kim Nipple/Zinc Plated Nipple: Input: ERW Black Steel Pipe (Electro Resistant Welded Pipe) Zinc Process : (1) Cutting the Pipes: Here, ERW pipes are cut into required size 10 cm, 20 cm long in Lathe machine. (2) Making Threads: Each piece is fixed on threading machine to make threads of required size. 1 worker is needed & time consumption is 5 second per piece. (3) For Shining / Silvernization : At this stage, the pieces made in the above stages are put into Electro Plating Shining machine to give finishing of zinc plating. Here, the pieces are put in the liquid for silvernization. The capacity of this machine is 250 pieces weighing 25 kgs. in 1 minute. Now, this is the finished product.
Kim nipple
Kim Nipple
Cutting the pipes
Making threads
Silvernisation
Packing
Stainless Steel Strainer This product consists 3 pieces- base plate, grating and cover Input : Stainless Steel Sheet = 200 gms./ kgs. Luster (for polishing) Process (Base Plate) Stage - I : Cutting the sheet into required size : First of all, stainless steel sheet is to be put into the shearing machine which is operated by 3 to 4 semi-skilled workers.
Stage - II : Making hole in the piece : The pieces made in the above stage are put in the power press machine which is operated by one skilled worker. There is a slab in the machine which makes hole of required size in the piece. The size of hole depends upon size of piece. The capacity of this machine is to make hole on 50 pieces per minute.
Stage - III: Pressing : After making holes, the same square is to be put in different types of Hydrolic Deep Drawing Press machine to give a proper shape. 2 skilled of semi-skilled workers operate this machine. The capacity of this machine is to press 50 pieces per minute. Stage IV : Polishing : Here, base plate is to be put into Buffing or Polishing machine. Luster is used us polishing material. Its consumption is 3 grams per base plate. This polishing process takes 0.3 minute per base plate on each piece Luster is applied and pressed with the rotating buffing wheel to create the effect of mirror polish. For this, I worker on each side of Buffing machine is needed. Process of Grating: Inputs: Stainless Steel Sheet Oil: Stage - I : Stainless Steel Sheet is cut into required size in shape of circle in shearing machine. Stage - II : After the above process, the required holes and slits are made in the circle to give the shape of grating to it. And then the grating made to above process is to be fixed into the base plate. Process of Cover : Inputs: Stainless Steel Sheet Oil : Stage I : Required size of cover is to be cut from the stainless steel sheet in the shearing machine.
Stage II: Now it is to be pressed in the Hydraulic press machine to give the proper shape of cover. These three pieces are arranged in proper manner and this is the finished product. Now it is to be sent for quality control and then for packing. Packing : First of all each set is packed in plastic bags and this packing is put into the inner box of card-board. These small boxes are packed in the master box before dispatching.
Drain Strainer
Drain Strainer Set
Base plate
Grating
Cover
Cutting
Cutting
Cutting
Making hole
Making small holes
Pressing
Pressing the piece
Polishing
Packing
DESCRIPTION OF MACHINERIES
Hydrolic Deep Drawing Press Machine
Power Press Machine
Shearing Machine
Threading Machine
Furnace
Electro Plating Machine
Electro Plating Machine
Lathe Machine
Turning Machine
Extrusion Machine
MACHINERY
NO. NAME SUPPLIER MADE IN India India India HEIGHT WEIGHT (in ft.) (in kg.) 5 7 6 500 300 400 AREA (in sq. ft) 18 6 16 WORK
1. 2. 3.
4. 5. 6. 7. 8. 9.
Shearing Machine Power Press Machine Hydrolic Deep Drawing Press Machine Buffing/ Polishing Machine Extrusion Machine Turning Machine Threading Machine Electro Plating Machine Lathe Machine
Trimans Machines Apex Machines Chamunda Industries Chamunda Industries Apex Machines Swastik Machineries Swastik Machineries Apex Machines Swastik Machineries
Cutting the stainless steel sheets Making holes in the pieces of stainless steel sheet Giving a proper shape of strainer
India India India India India India
4 4 3.5 3.5 4 4.5
175 450 320 220 350 300
12 20 24 8 20 20
Polishing the pieces of stainless steel strainer Polishing the rough pipes of brass Cutting the pipes into small pieces as per the ordered size Making threads on the small pieces cut Polishing the small pieces with the solution of nickel chromium Cutting the ERW pipes into the small pipes as per the required size between 10- 20 cms. Plating the small pipes with zinc
10. 11.
ThreadingMachine AS per 7 Electro Plating Chamunda Shining Machine Industries
India
3.5
125
16
MACHINES
LEATHE MACHINE THREADING MACHINE ELECTRO PLATING MACHINE EXTRUSION MACHINE TURNING MACHINE SHEARING MACHINE POWER PRESS MACHINE HYDROLIC DEEP DRAWING PRESS MACHINE BUFFERING MACHINE / POLISHING MACHINE
NO. OF INSTALLED INSTALLED NO. OF COST OF MACHINES CAPACITY CAPACITY WORKERS MACHINES IN HOURS IN UNITS 1 2400 Hrs 2880000 1 S.Sk 374500 2 4800 Hrs 3456000 2 S.Sk 489000 2 4800 Hrs 5760000 4 S.Sk 750000 2 4800 Hrs 2880000 4 S.Sk 1156000 1 2400 Hrs 7200000 1 Sk 780000 1 2400 Hrs 4320000 4 S.Sk 425000 1 2400 Hrs 7200000 1 Sk 160000 1 S.Sk 1 2400 Hrs 7200000 2 S.Sk 340000 7 16800 Hrs 1008000 14 S.Sk 105000
SELECTION OF LOCATION
EASY FLOWENTERPRISE, 57/7, GIDC Kerla Estate, Ahmedabad-Kandala Highway Bavla. Location of any industry is very important aspect, while establishing an industrial unit. Any location so selected must have been evaluated properly from all points of view. The choice of location is influence by a variety if considerations proximately to raw materials and market availability of infrastructure, government policies and other factor. Several other factors have to be assessed before reaching a location decision: ease in copy with environmental pollution, labor situation, climatic condition and general living conditions. We required 1175 sq. meters land for our plant. Cost of different Areas: Area Cost (Rs.) Vatva 900 / Sq. meter Odhav 1000 / Sq. meter Kerla 125 / sq. meter Gandhinagar 1200 / sq. meter After having selected the location the site for the plant is to be finalized, keeping certain factor in consideration. The options available to us for plant insight are Kerla, Vatva, Odhav and Gandhinagar. And we have selected Kerla due to the following reasons. REASONS FOR SELECTING THE LOCATION: ? The cost of land is low. Kerla estate is recently open for the industrial development. ? Skilled persons and workers are easily available from near places. ? Power in GIDC area is easily available at the doorstep. ? Other facilities and utilities are provided by GIDC. Like water, roads, etc. ? NA permission is not required. The Government cannot take any steps against firm without prior notice.
UTILISATION OFPLACE: The total area of plant is 1100 sq. meter. The total construction area is 5600 sq. feet. 1. Security Cabin: It is located at the right side of our unit. 2.Parking: A parking plot is separate for two wheelers, cycles and cars. 3.Gardens: There are four gardens in the land. 4. Partners’ cabin: It has dimension of 24.6 x 24 feet. 5. Manager’s office: It has dimension of 10.9x12 feet where the manager is doing his work. 6. Accountant’s Cabin: Its area is 12.9x12 feet. 7. Supervisor’s cabin: Its area is 9x12 feet. 8. Lunch Room: Its area is 12.9x19 feet. 9. Packingroom: After the process the finished goods are kept here to packaging. It has the dimension of 24.6 x 24 feet. 10. Store room: ? For raw material: Its area is 18x31.3 feet. ? For finished goods: Its area is 19x24.9 feet. 11. Furnace: The area allotted for it is 12x12 feet. 12. Process Department: Its area is 42x32 feet.
Plant lay out
Office lay out
Space planning
Feasibility 2
PRICES OF RAW MATERIALS: Product Drain Strainer Kim Nipple Plumbing Fittings Raw Material Steel Luster ERW Zinc Brass Nickel Chromium Luster Per Unit Requireme nt 0.2 Kgs. 0.5 Pieces 0.25 Kgs. 0.10 Kgs. 0.2 Kgs. 0.3 Kgs. 1 Piece Price (Per Unit) 50 20 32 120 185 10 20
RAW MATERIAL: Suppliers ? Stainless steel: ? Luster: ? ERW pipes: ? Zinc: ? Brass: ? Nickel Chromium:
Steel Authority of India Ltd. Mahesh Metals, Rakhiyal, Ahmedabad. Mahavir Metals, Rakhiyal Ahmedabad. Slavastic Pipe Ltd. Rita Chemicals, Mumbai. Wholesalers of brass scrap from Ahmedabad. Wastage of brass from threading machine Rita chemicals, Mumbai
ORGANISATION CHART
MANAGING PARTNER
PRODUCTION MANAGER
FINANCE MANAGER
GENERAL MANAGER
H RE M
SUPERVISOR
ACCOUNTANT
COMPUTER OPERATOR
SALESMEN
WORKERS
STORE KEEPER
JOB SPECIFICATION AND JOB DESCRIPTION Job Title Education Mental Abilities Special Abilities : : General Manager Master in Business Administration (MBA) + Additional qualification. The candidate should be alert, stable and should have great presence of mind. His mental abilities would be good with figures. He should be able to deal with large number of people under him. He should get the needed resources of the organization, put them into proper use and strive to reach the organizational goals. The candidate should have knowledge about the present scenario of the market. The candidate should have an experience for the same post for at least 3 years. He should have to supervise working of the manager under him. He should give some guidance, inspiration and implement required controls. He should be regularly updated regarding the market condition and should even change the strategies, if needed. He should investigate the differences and take required actions. Average starting salary is Rs. 20000/- p.m.
:
Specials Kills Work Experience Supervises Functions
: : : :
Responsibilities :
Salary
:
Job Title Education Mental Abilities Special Abilities Specials Kills : : :
:
Work Experience
:
Reports To Supervises Functions Duties
Responsibilities
: : : : :
Salary
:
Production and Purchase Manager Master in Business Administration (MBA) + Additional qualification. The candidate should be alert, stable and should have great presence of mind. He should be able to deal with creditors and suppliers. He should be able to achieve targeted purchase and production. He should have some special skills regarding purchase and production methods. He should have some special knowledge regarding the market scenario. He should have good command over at least three languages namely English, Hindi, Gujarati. He should have good communication of skills. He should have worked in purchase and production department of any organization manufacturing bathroom fittings products. He should have an experience for the same post for at least two years. To the General Manager He Should have to supervise the work of supervisors and stock-keeper. He should give some guidance, inspiration and help to supervisors and stock-keeper. He should keep a check over the purchase and production policies of the competitors. He should have regular check of stocks purchase and manpower conditions. He should be regularly updated regarding the market condition. Average starting salary is Rs.20000/- p.m.
Job Title Education Mental Abilities Special Abilities Specials Kills
Finance Manager : Master in Business Administration (MBA) + Additional qualification. : The candidate should be alert, stable and should have great presence of mind. He should be co-operative and quick in calculation of mathematics. : He should be able to deal with people under him.
: He should have good knowledge of finance sources and better way of spending the sources. He should have knowledge regarding the market scenario. He should have good command over at least three languages namely English, Hindi andGujarat. Work : He should have worked in finance department of any organization. He should have an experience for the Experience same post for at least two years. Reports To : To the General Manager Supervises : He Should have to supervise the accountants and regular accounts of the organization. Functions : He should give some guidance, inspiration and help to accountants when needed. Duties : He should keep a check over good and rising finance policies. Responsibilities : He should have regular check of accounts. He should be regularly updated regarding the market condition. Salary : Average starting salary is Rs-20000/- p.m.
Job Title Education Mental Abilities Special Abilities Specials Kills Work Experience Reports To Supervises Functions Duties : : : : : : : : :
Responsibilities : Salary :
Supervisor / Trainer Diploma or specialization in a particular field. The candidate must be capable of assuming increased responsibility within a year. He should be able to deal with different types of workers like skilled, semi-skilled and unskilled. He should have some special skills. He should have good communication of skills. He should have an experience of minimum one year preferably in an industrial organization. To the Production and Purchase Manager. He should have to supervise the workers, security guards, helper/peons and the production process. He should give some guidance, help during the training process. He should train the employee/ workers in their work, organize various programmes, solving the problems related to the workers. He should follow-up the training process, motivate the employees and maintaining industrial relations. Average starting salary is Rs. 10000/- p.m.
Job Title Education Mental Abilities Special Abilities Specials Kills
Store Keeper : He should be 12 pass through commerce stream. : He should have good remembrance power and friendly nature. : He should have ability to work with others.
th
: He should be good in filing the documents, checking the records, compiling the data, initiating the reports and keep the records accurate and up-to-date. Work : Fresher are invited and experience would be entertained. Experience Reports To : To the Production and Purchase Manager. Supervises : The stock of all the items. Functions : He should check the materials, requirements along with the orders to be dispatched. Duties : He should place the orders for the goods at the right time, checking quality and quantity of the goods and maintaining the stock register. Responsibilities : He should try to reduce wastage, keep the stocks in limits. Salary : Average starting salary is Rs. 3750/- p.m.
Job Title Education Mental Abilities Special Abilities Specials Kills
Salesman : Graduation. : The Candidate should be alert, stable and should have great presence of mind. : He should be able to achieve targeted sales
: He should have some special knowledge regarding the market scenario. He should have good command over at least three languages namely English, Hindi, Gujarati. He should have good communication of skills. Work : He should have worked for six months in the same field. Fresher are invited. Experience Reports To : To the Sales Executive Supervises : He should supervise the sales of the unit. Duties : He should fulfill the demand of the customers. Responsibilities : He should give proper service and information to the customer regarding the product. Salary : Average starting salary is Rs. 3000/- p.m.
Job Title Education Mental Abilities Report To Functions Duties
Helper / Peon : H.S.C : The Candidate should be of sound mind.
: To the Supervisor. : He should help to serve the customer in a better way. : He should serve water/ tea/coffee/cold drinks to the guests. Responsibilities : He should undertake the orders given by his superiors. To clean the office daily morning before the office work starts. Salary : Average starting salary is Rs. 2500/- p.m.
Job Title Education Mental Abilities Report To Duties
Workers : S.S.C. (skilled), Well versed with reading and writing skills (semi-skilled) : The Candidate should be of sound mind. : To the Supervisor. : He should be good in working on the minor machines with sound knowledge.
Job Title Education Mental Abilities Special Abilities Report To Supervisors
Security Guard : S.S.C. or some level of education. : The Candidate should be polite and able to convince.
: He should be strong enough to stop any stranger to enter the premises. Guard the place from the thieves. : To the Supervisor. : The people entering in and going out from the industry area, Check everyone of them. Duties : He should restrict any unknown person to enter. Responsibilities : He should responsible for the parts/vehicle stolen from the premises. Salary : Average starting salary is Rs. 2500/- p.m. (Night shift) Average starting salary is Rs. 2500/- p.m. (Day shift)
MANAGERIAL SKILLS
Ms. Mauli Bodiwala: M.B.A. (H.R.) Along with her specialization in HRM, she holds acertificate course forHuman Psychology. She will be the head of the HRD, dealing with the personnel recruitment, selection and training of the staff as well as customer inquires, queries and complaints, if any. Mr. Gaurav shah: M.B.A. (Finance),C.A. He is the head of the Finance Department, tackling with all financial aspects and accounting system. Investment and financial decisions will be taken with joint consent with Mr.Rakesh Kolawale. Ms. Esha Shah: M.B.A. (Managing Partner) Along with that, she is a certificate holder forManagement in Mass Media. She is the head of Sales and Marketing Dept, dealing with communicating the product to customers through advertisements and respective budgets.
.
COST OF MANPOWER:
Managers (4 managers @ Rs. 20000 per month) Partners (8 partners @ Rs. 10000 per month) Accountant (1accountant @ Rs. 7500 per month) Computer Operators (1 operator @ Rs. 7500 per month) Peons (5 peons @ Rs. 2500 per month) Security Guards (2 guards @ Rs. 2500 per month) Gardener (1 gardener @ Rs. 1500 per month) Salesmen (6 salesmen @ Rs. 3000 per month) Production Manager (Rs.20000 per month) Supervisor (Rs. 10000 per month) Two Technician for Each Product (Each Rs. 5000 per month) Two Store-keepers (Each Rs. 3750 per month) Other Supporting (11workmen for each product) Workmen (Each Rs. 2500 per month) 960000 960000 90000 90000 150000 60000 18000 216000 240000 120000 120000 90000 990000
AMENITIES TO WORKERS: The amenities provided to the workers at the workplace are as under. ? ? ? ? ? ? Drinking water Urinels and laterines First aid Lunchroom Recreational facilities Other faciltilies
Drinking water: We have made effective arrangements to provide wholesome drinking water for all workers. The cooler has been kept in the lunchroom so the workers can easily get cold water after taking lunch and whenever needed. And on that place, it has been clearly marked in Gujarati which is the language understood by majority of the workers. Urinals and laterine facilities: There are sufficient number of conveniently situated & accessible latrines and urinals. All of them are maintained in clean and sanitary conditions. Laterines:
? ? ?
are in a cubicle or room fitted with a door and located in a position that allows privacy. have fresh air. have an adequate supply of water and toilet paper.
First aid Workers have reasonable access to appropriate and adequate first aid equipment.
? ?
The equipments of first aid are mauntained in a separate cupboard. Respective medicines for different purposes are maintained separately and marked in Gujarati which is understood by most of all the workers and employees.
Lunchroom: We provide a separate area for taking lunch to the workers. Workers have reasonable access to a room or sheltered area to eat meals or take breaks.
? ? ?
There is no health or safety risk in the lunch room. The room has been maintained in hygienic conditions and kept clean. It has adequate space, seating arrangements and facilities for washing and storing utensils.
Recreational facilities:we have make provision for recreational facilities for the workers and their families. ? Feast is to be given to the workers once in a month. ? Get to gather is arranged once in a year for the workers with their families. Liability of employer in case of accidents resulting from collapse of houses provided by him:If the house collapse is not solely or directly attributable to a fault on the part of the occupant or to a natural calamity, the employer shall be liable to pay compensation to the worker or his kin suffering injury or death.In order to claim this compensation, the worker or his next of kin or his authorised agent must write to Labour Commissioner within 6 months of the accident.The compensation would be paid under the Workmen's Compensation Act, 1923. Other facilities: We provide the workers umbrellas, blankets, raincoats or other like amenities for the protection of workers from rain or cold
WORKERS’ RIGHTS : Hours and Limitation of Employment Weekly hours: ? 48 hours a week for adult workers ? 27 hours a week for adolescent or child workers Maximum hours of work are 9 hours a day and 54 hours a week. The worker is entitled to overtime wages at twice the rates of ordinary wages. He or she also has a right to one weekly holiday. Working on a holiday or the day of rest of the worker will entitle worker for double the wages as in overtime work. The notice of period of work It has to be displayed and correctly maintained. We can refuse to employ a worker for any day on which he is more than half hour late from the time displayed on notice of period of work. No Night for women and children: Women and children can be employed only between the hours of6 a.m.and7 p.m.unless permitted by the State Government. Non-adult workers to carry tokens: No child or adolescent will be allowed to work, unless we have a certificate of fitness from the Certifying Surgeon. The token that non adult worker is required to carry bears a reference to this fitness certificate valid for twelve months. The fee for the fitness certificate, if any, is to be paid by us and cannot be recovered from the young worker or his or her guardian. Annual leave with wages:An adult worker is entitled to one day paid; leave for every twenty days of work. A Child or adolescent is entitled to one day
paid leave for every fifteen days. Half or more than half day's work is counted as full days' work. This earned leave excludes. Holidays The worker is entitled to average daily wages (including D.A., cash value of food and other concessions, if any allowed to him by the employer). Maximum earned leave that can be encashed is 30 days. If the Employer terminates the services of the worker who has to his credit earned leave, then he shall pay the worker the average daily wages in respect of the leave not taken [Section 30-31].
Marketing feasibility
MARKETING
Marketing is the process of planning and executing the conception, pricing, promotion and distribution of idea, goods and services to create exchanges that safety individual and organisation goals. While marketing management is the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer value. Thus the most important thing in marketing is to forecast where customers are moving and to be in front of them so the aim of our firm is to satisfy our customers as much as possible. Our products are not bought directly by the users i.e. layman. Contractors and plumbers or wholesalers buy these products and then they are to be fit in the users? places. So the users are not directly in touch with us. Besides, the products like tee, elbows or kim nipple are used in showers, taps, wash basins, etc. Therefore the users of these products do not concern with the manufacturing of the plumbing fittings. Thus we have to serve the business market i.e. the contractors, wholesalers, and the manufacturers producing the products in which our products areused as intermediate goods. Business Market: The business market consists of all the organisations that acquire goods and services used in the production of other products or services that are sold, retended or supplied to others. Characteristics of our business market: 1) Fewer buyers: The number of buyers of our products is quite less than the consumers or FMCG products. Contractors, plumbers and the producers of the goods in which our fittings are used, are the only buyers. 2) Larger buyers: Though the number of buyer is less but they used to makepurchases in bulk.
3) Close supplier customer relationship: Because of the smaller customer base and the importance and power of the buyers, we are frequently expected to customize their offering to individuals business customers needs. And we also expect this practice from our suppliers of raw material. Thus, the closer the relationship with customers, it is better for our firm. 4) Derived demand: The demand for our products is usually derived demand. It is derived from the demand for the goods in which our products are used i.e. taps, showers, etc. Besides, it depends also on the number of contracts of pipeline or plumbing our buyers get. Higher the number, higher will be the sale of our products. 5) Direct purchasing: Business buyers often buy directly from the manufacturer rather than through intermediaries. So in our case, Contractors or other manufacturers usually prefer to buy our products from our factory itself.
Variables taken into consideration for segmentation of business market: Demographic: Industry:Construction, plumbing accessories fittingsindustries are to be served by us. Location: We plan to serve the wholeGujarat.
and
bathroom
Operating Variables: User or non-user status: We serve heavy users, medium users, light users and try to convert non- users into users through various promotional strategies. Customer capabilities: We serve customer needing many or few products. Situational Factors: Specific Application: We focus on certainapplicants of our productrather than all applications. Size of order: We focus on bothlarge and smallorders.
EVALUATION AND SELECTION OF THE MARKET SEGMENTS: Market segmentation: We first identify the distinct group of buyers who differ in their needs and preferences. And then we make the products as per their requirement so that their need is satisfied and they become loyal to us. As there exists so many types of plumbing fittings, which all are almost same but they differ in size, colour and shape, we have to identify which type of product is required by our customers and it is to be produced as per their requirements. So we have to identify the segment and decide the target. It is beneficial to us in the following ways. 1. 2. 3. 4. 5. We can create more fine-tuned product. Price of product will be almost as per target segment. We can have easy distribution and communication channels. We can have clear picture of our competitors. We can know which other firms are also going for same segment.
Niche market: As we are producing products as per orders, we can say that we serve a kind of niche market. We produce as per particular customer?s demand. And these products can satisfy need of only that customer and not anyone else. Local market: We prefer local marketing in initial years because it is important to satisfy the huge local market. Besides, it is difficult to cover the market of the whole country while commencing the manufacturing. We prefer only local market which includes Ahmedabad,Rajkot, Kadi, Bavala and Baroda etc. So we advertise in only that particular region and not to anywhere else. But before advertising, we found out customers needs and preferences through demand analysis. Patterns of market segmentation : Among all the patterns of market segmentation, we fall under the category of Homogeneous Segments because there is not any noticeable difference in the products of all the manufacturers of the plumbing fittings.
Our consumers? preferences scatter through out the space, which indicates that consumers vary greatly in their preferences. So our brand would stand near to the other competitors. We try to locate our brand near to the corner to attract a customer group that has not been satisfied with the other brands. While segmenting the market, we took the following steps. We grouped the customers into segments based on similar needs. For each segment, we found out various behaviors and made that segments distinct and identifiable. We found out attractiveness of each segment. Determination of profitability of the segment Finding unique customer needs and characteristics
Expansion of segment positioning strategy Among these three, we fall in the category of homogeneous preferences. Our consumer preferences generally do not scatter through out the space that indicates that consumers do not vary greatly in their preferences. So our brand would stand near to the other competitors.
How we have segmented market We group the customers into segment based on similar needs For each segment we find out various behaviors and make that segment distinct and identifiable We find out attractiveness of each segment Determine segment profitability Find out unique customer needs and characteristics Expand segment-positioning strategy
ESTIMATE FUTURE DEMAND: We estimate the future demand to identify market opportunities. Then we do sales forecast. The measures of market demand: 1 2 3 4 5 6 All sales Industry sales Company sales Product line sales Product from sales Product item sales
From that, we have measured the market demand on basis of product item sales. We have estimated it in this way so that we can get exact idea for raw material required, planning production, and borrowing cash for each product. We have forecastedregional demand. We have measured the demand in targeted market, which is only the contractors, builders and dealers. We forecast demand with the help of outside sources such as marketing firms, which develop a forecast by interviewing customers, distributors and other knowledge parties, and specialised forecasting firms, which produce long-range forecasts of particular macro environmental components, such as population, natural resources, and technology. Three main bases of our forecast are as under. ? What people say. ? What people do. ? What people have done.
4 P’S OF MARKETING
Marketing mix Product
PRODUCT: “A product is anything that can be offered to a market to satisfy a want or need of the consumer”. It represents bundle of satisfaction that a consumer buys. Our products are as under. 1) Plumbing fittings
Price
Place
Promotion
2) Drain strainer
A drain strainer is used in every sink or bathroom. It is used for effective removal of water. They are found in different types of material, sizes, and prices as per the requirement. There are mainly two types of drain strainers. For kitchen a) Small drain strainer b) Big drain strainer
For bathroom
a) Small drain strainer
b) Big drain strainer
We produce these products in different sizes, shapes, and colour. We also produce the products as per special requirement of consumers. The description of our products and their types has been discussed earlier.
Product Levels: There are five levels of the product. Each level adds more customer value.
Core Benefit Basic Product Expected Product Augmented Product Potential Product
(1) Core Benefits: It is the fundamental product or service that consumer is really buying. ? Ourplumbing fittingsare used to join the pipes or the other components of the products like taps, showers, wash basins, sinks, etc. ? Thedrain straineris to be fit in the bath rooms, kitchen or in the sink. (2) Basic Product :? Ourplumbing fittingsjoin the pipes or the other components in such a way that the fittings is long lasting.
? Thedrain strainerallows unnecessary water gathered in the bathroom or sink to flow very easily. (3) Expected Product:It is a set of attributes & conditions that buyers normally expect while purchasing a product. ? Theplumbing fittingsjoin the pipes or components in such a way that water cannot be leaked from the pipes or from the joints of the pipes. ? Thedrain strainerhas small holes in the grating so that unnecessary liquid can flow into the drainage system and any solid thing cannot go inside it so the strainer will not be clogged easily. Besides the lid is provided with it so the insects from the main drainage system cannot come outside in the bathroom or sink. ? Besides, our all products with along withkim nippledo not allow the process of oxidation i.e. the problem of rust or red oxide will not arise even though all of them will be constantly in touch with water. (4) Augmented Product It generally exceeds customers? expectations. ? Our plumbing fittingsare polished with nickel chromium and zinc. (5) Potential Product Here, new ways to satisfy the customers & to differentiate the products from the competitors are to be found out. ? We are planning to introduce thedrain strainerwith a special lid, which need not be opened with hand. It can be opened by foot only. So there is no need to spoil hand while opening the lid of the drain strainer.
PRODUCT HIERARCHY: The product hierarchy stretches from basic needs to particular items that satisfy needs. There are six levels of product hierarchy. Need family: The core need underlines the existence of a product family. For us, it iseasy flow of water. It is applicable to both plumbing fittings and also drain strainer. Product family: All the product classes that can satisfy a core need with reasonable effectiveness. For us, it isplumbing items. Product class: A group of products within the product family recognised as having a certain functional coherence. For us, it isdrain strainer and connectors. Product type: A group of items within a product line that share one of the several possible forms of the product. For us,other plumbing itemsare product type. Item: A distinct unit within a brand is known as item. Wedon?t haveany distinct item within a brand.
PRODUCT CLASSIFICATION
Durability and tangibility
Consumer goods classification
Industrial goods classification
Nondurable goods
Convenience goods Shopping goods Specialty goods
Material and parts Capital items
Durable goods
Services Unsought goods
Supplies and business services
? Our goods aredurable goods. For us, durability is the important feature. As they will not have to face the problem of oxidation and because of good material, they can last long. ? Our goods aresupplies goods. There are two types of supply goods. 1. Maintenance and repairs 2. Operating supplies Our products fall into the category ofmaintenance and repairsas they help to maintain our customers? plumbing structure. PRODUCT LINE: A group of products that are closely related can be termed as a product line. Our product line is as under.
Product line (product width 3)
Plumbing fittings
Drain strainer
Kim nipple
Bellreducer Kitchen drain strainer Cap Bathroom drain strainer
Coupling Small Cross Big
Female adaptor
Male adaptor
Plug
Side outlet ell Tee
PRODUCT MIX:
Product mix is the set of all the products and items that a particular seller offers for sale. PRODUCT LINE LENGTH: If we feel that we havenot been utilising our installed capacityrationally and we can increase profit byadding a new product, we can produce other types of plumbing fittings that are required by the customers as per their order. This type of strategy helps us in protesting against economic ups and downs. In this way, we are able to cover more market share and market growth. It will alsoincrease our profitability. It helps in utilising the excess capacity. We can lengthen our product line by two ways.
Line stretching
Line filling
Up market stretch Down market stretch Two way stretch
As our products cover the middle market, we have decided to stretch our product line in both the ways. So it istwo way stretching. We provide high quality products at high prices and also medium quality products at lesser price compared to dearer priced products. Apart from there can be variation of plating on products. But we produce these products as per consumers? requirement and their orders.
Line filling:
We also lengthen our product line byadding more itemswithin the present range. For that we just have to change moulds while producing products. Our intentions behind doing this are as under. ? To earn incremental profits ? To satisfy dealers who complain about lost sales because of missing items in line ? To utilise excess capacity ? To plug holes to keep out competitors We provide different sizes so that customers can get the product as per their requirements. There isnoticeable differenceamong all these products. But we must check that whether these sizes meet customers? needs or not. They must satisfy the internal need of customer.
Size
We provide different sizes, which are mentioned earlier. But we must take care that there is relative difference among them rather than absolute difference.
POSITION IN THE PRODUCT LIFE CYCLE: The bell-shaped curve of the product life cycle 1 divided into four stages shown as under: The products like kim nipple and other plumbing fittings have been used for number of years but they are made of galvanize or plastic especially in our country. But we made of galvanize or plastic especially in our country. But we make these products of brass which are quite new in the Indian market. We arenot the pioneer of plumbing fittings of brass. Only afew companiesused to produce these things of brass. So these products of brass are in the growth stage of their product life cycle. The current pattern of the product life cycle of the products is as under. As these products are used in constructions, theirdemand increases because of the increase in the number of construction. Now-a-days, number of high-rise buildings, official buildings, etc. rises so pipe fitting also increase in this construction and the demand for plumbing firings also goes up due to all the above revolutions. As the plumbing fittings of brass are more durable and attractive than those of any other material like galvanize or plastic, their demand increases day by day as shown in the above figure of Scalloped pattern of product life cycle. Strategies as per the position in the product life cycle: It is necessary to watch the product life cycle; but watching the market life cycle is more important. So marketing strategies should be decided according to the position of the product in the product life cycle but it must not be bound strictly in the stages of product life cycle :The marketing strategies formed by us after considering the product life cycle are as under : Product awareness advertising: As the plumbing Fittings of brass are not so popular inIndia, we have to advertise in such a way that people can be aware of these products. To do so we have tosend sales representatives to the contractors and other probable customers to let them know about our products.
Converting Nonusers: We have toexplain the features and benefits of our productsto the targeted market who use plumbing fittings of other materials. By doing this, we have to make the nonusers use our products of brass. Winning Competitors' Customers: To catch more and more market share, we can try to win the customers of our competitors by offering them better quality and other supplementary services likequick delivery better credit terms, commissionetc. STRATEGIES Offering of basic products i.e. drain strainer, plumbing fittings of brass. Cost Plus Selective distribution channel Building of product awareness among early adopters and dealers. Heavy Sales Promotion.
Product Price Distribution Advertising Sales Promotion
BRANDING: A brand is a name term, sign, symbol or design or a combination of them, intended to identify the goods or services or one seller or group of sellers and differentiate them form those of competitors. Thus, a brand identifies the seller or maker. Therefore, we have chosen'Easy Flow'as our brand name which conveys the idea of the attributes of our products i.e. they let the water flow easily into the pipesand the punch line shows thatthey are durable. The manufacturers brand name falls under the category of 'Corporate Combined with individual product names.' i.e. Easy Flow Kin Nipple. Easy Flow Elbow etc. Naming the brand is just like giving name to the newborn baby. Therefore, we conducted following tests before deciding our brand name. Learning tests: How easily is the name pronounced?
Memory tests: How well is the name remembered? Preference tests: Which names are preferred? Our brand is ourpromise to deliver good quality, durability and special features constantly to our buyers. It is a fact that brands are not built by advertising but by the brand experience. Therefore , we focus on direct marketing and providing free samples to our buyers. PRICE: It is one of the most important elements of the marketing but in today?s world it has come to occupy the centre stage in the marketing business. Price also communicates to the market, the company?s intented value position of its product or brand. In order to arrive at the most acceptable price level, we need to have the information on the 3 C?s. 1). Customer 2). Competition 3). Cost storage of the firm We believe that price is the major determinant of buyer?s choice. Our price isdecided by finance manager with help of managing partners.. In general, top-level management determines pricing objective and policies. Our pricing department also reports all the information regarding prices to the marketing department, finance department and the top management so that they also can give their suggestions and price can be decided by all of them collectively which is accepted to all. Setting the price We set the price for the first time as we are going to manufacture for the first time. We also decide where to position our product on quality and price.
There are mainly 9 strategies.
Price High High Premium Product quality Medium Over chasing Low Rip off
Medium High value Medium value False economy
Low Super value Good value economy
From the above table, we can have the idea of all types of strategies. Among these 9 strategies, we follow third strategy that is “super value”. We apply this strategy because we offer thesame thing but at low priceso our consumers are benefited and even they can have greater savings. So our target consumers are those who are quality conscious and they will sensibly buy from us and save their money. We consider the following factors in setting the pricing policy. 1) Selecting a pricing method: Our objective differs in theinitial timeand in the next few years. In the initial years, our objective is tomaximise current profitso that we canget return of investment. So we have set the price which gives us maximum current profit. So for doing so, we must have knowledge of its demand and cost functions. But this is very difficult to estimate. But in emphasizing current performance, the firm has tosacrifice long-run performanceby ignoring the effects of other marketing mix variables, competitors? reactions and legal restrains on price. Butafter some years, our objective would be tomaximise themarket shareso that by the time we follow that type of price strategy.
2) Determining demand: As each price will lead to a different level of demand, it has impact on firm?s marketing objective. Estimating demand curve: We estimate demand by conductingprice experiments. We sold the products at discount rate and observed the results. Sometimes even we charge different prices to similar territories to see how sales are effected. And afterwards we take these results into consideration when we determine the price. Price elasticity of demand: The demand of our product isprice elasticwhich means when price changes its demand also changes. As customers are contractors and the producers in whose products, these goods are used as intermediary items will look for the producer who offers them low prices. 3) Estimating cost: “Demand sets ceilings on the price of a firm that can be charged for its product and costs set the floor.” 4) Analysing competitors’ costs, prices , and offer : We took into account competitors? costs, prices, and offers to determine our prices. We first considered thenearest competitor?s priceand if competitor?s offer contained some features not offered by our firm, we made changes in our price to attract more customers. 5) Selecting the pricing policy We select a pricing method that includes one or more of these three considerations. 1). Customer 2). competition 3).cost storage of the firm We have selected themark up pricing method. We add a standard mark up to the product?s cost. For that first we calculated the product?s cost and then we added up mark up.
Our cost includes Unit cost = variable cost + fixed cost/unit sales Mark up price = unit cost/(1 – desired return on sales) Reasons for selection of this method are as under. ? We candeterminethe cost moreeasily. ? If all firms use this method,price competitionwould bereduced. ? This method is morefair to both buyers and sellers. PLACE: Generally it is said that the three keys to success are “location, location & location”. So for any company, place is one of the most important factors. It is a distribution channel used by a firm and it should be such that each and every consumer can get product/service very easily whenever required. The distribution channel must be strong. But distribution decisions are very critical in nature as they affect the variability of the firm and the product. The seller needs to select appropriate place for product in such a way that it fulfils the criteria of availability to the prospective and present buyers. Distribution Channel: A set of intermediaries performing a variety of functions stands between the producer and the final users. These intermediaries constitute a marketing channel or a trade channel or a distribution channel. Marketing channels are sets of interdependent organisation involved in the process of making a product or service available for use or consumption. Functions of our marketing Channel: ? Getting information about potential and current customers, competitors and other factors and forces in the marketing environment. ? Developing and disseminating persuasive communications to stimulate purchasing
? Agreements on price and other terms so that transfer of ownership or possession can be possible. ? Placing orders with us ? Provision for the successive storage and movement of the products. Levels of our distribution channels '0' Level Channel/Direct Marketing Channel Manufacturer / Factory
Contractors, p[roducers of showers, taps etc. '1' Level Channel It contains are intermediary. Factory
Dealer
Retailer, Plumbers, Contractors etc. - '2' Level Channel It contains two intermediaries Factory Wholesaler Retailer Plumbers, Contractors, etc.
Our project site is situated at “KerlaEstate” nearChandodar at DholkaKandla highway. This place is easily accessible in terms of transportation. The products are sold to contractors, builders and dealers. Contractors and builders use them directly while dealers sell them to retailer and then they reach to the consumers. PROMOTION : Promotion decisions are important as they help to move the product from the manufacturing end to the consumption point. For a brand to be successful, it must build enduring relationships with its different audiences. Integral to this relationship is the visual image of the brand the consumer carries in his or her mind. “We advertise because it offers a reason to buy but we do sale promotion because it offers incentives.” Our sales promotion includes, Consumer promotion: It mainly includes, 1) Prices off We offer fewer prices to our regular customers so they are attracted to remain loyal to us. 2) Prizes We also provide prizes to our customers who place more number of orders with us than others do. 3) Warranties We also provide warranties to our regular customers i.e. if there is any problem while construction or while making the finished product by using our product as a part of it, we replaces the defective pieces with the good pieces. ? Trade promotion 1) Prices off
We offer fewer prices to our regular contractors and builders so they are attracted to remain loyal to us. Advertising: We do advertising to for public promotion of our product. This is described in more detail in 5 M?s of marketing in later part. Business and sales force promotion Trade shows and conventionsWe take part in trade shows and conventions. Our advertising to sales promotion ratio is about40: 60. Our sales promotion expendituredepends upon our expenditure budget. Purpose of sales promotion Our sales promotion tools vary in their specific objectives. ? A free management advisory service aims at cementing along-term relationshipwith a retailer. ? We do incentive type promotions to attract new trials and a reward to loyal customers and to increase the repurchase rates of occasional users. ? We also do promotions toattract brand switcherswho are primarily looking for low prices and good value. We unlikely turn them into loyal customers. Our strategy for sales promotion: We first estimate what we need to spend in trade promotion. Then we decide what we need to spend in consumer promotion. As mentioned earlier, our advertising to sales promotion ratio is 40: 60. We follow this strategy becausesales promotions yield fasterand more measurable responses in sales than advertising.
Major decisions in sales promotion Establishing objectives For consumers Encouragement to the purchase in bulk Attracting switchers away from competitors? brand For retailers To pursue them to buy new products Offsetting competitive promotions Building brand loyalty For the sales force Encouragement to the new products Encouragement to new prospective
ADVERTISING
The wordadvertisinghas 2 meanings: 1
ublic promotion of some product or service 2:The business of drawing public attention to goods and services Advertising means the activity of attracting public attention to a product or business, as by paid announcements in the print, broadcast, or electronic media. The major advertising media are newspapers, magazines, television and radio, business publications, billboards, and circulars sent through the mail. With the advent of the wide availability of electronic mail and access to the World Wide Web in the 1990s, the internet has also become an important advertising venue. We advertise for several purposes depending upon the market condition, market demand, product life cycle etc. Some of our purposes are as follows? ?As we are new in the market, we have to advertise and promote our products a lot to make out target market aware about our firm. Plumbing fittings are the hidden products for the users. They would not concern about its brand and even about its purchase. Thus, we must have to promote them among the contractors, dealers, plumbers who are concerned with them.
Advertising agencies have always been intermediaries between advertisers and the mass media. But we have not chosen this option because we have industrial buyers like contractors, wholesalers, manufacturers of other plumbing goods or bathroom fittings in which our products are used as intermediate goods. They will attract towards the product by discount rates, quality, commission, and durability instead of the advertisements. Thus, direct marketing and personal attention are more important for selling our products.
In our firm, advertising is handled by the managing partner. The marketing manager?s job is to propose an advertising budget, develop advertising strategies, and approve advertisements and campaigns, dealer displays and other forms of advertising. Our marketing manager ? First start by identifying the target market and buyers motives. ? Second they make five major decisions in developing advertising programme which is known as „5 M?s?.
5 M?s of advertising
Mission
Money
Message
Media
Measurement
MISSION: It is all about setting the advertisement goal in the initial stage. We preferinformative advertisementbecause our aim is to make target market aware about our firm. When we are popular in our target market, we will startpersuasive advertisingto create liking, preference, conviction and purchase of our product. Once the target market will be covered, we will startreminder advertising, which aims to stimulate repeat purchase of products. Our advertising objective depends upon the market situation i.e. the degree of competition.
MONEY: Deciding on the advertising budget We consider advertising as a current expense, part of it is really an investment that builds up an intangible asset called “Brand Equity”. We consider the following factors while deciding our advertising budget. 1) Stage in product life cycle In the initial stage, our advertising budget is high because we want to introduce our product to the customers. Afterwards, it will be low compared to the first year. 2) Market share and consumer base When the firm covers enough market share, it will requires less marketing budget because it will have a set of loyal buyers and recognition in the market. 3) Competition When there exists tough competition, we do more marketing and when there is less competition, we will advertise less. 4) Advertising frequency When advertising frequency is high, advertising budget will be high and when it is low, required money will be less. The frequency of our advertisement will be once in two months in the Gujarati newspapers. MESSAGE: Choosing the advertising message
MEDIA : It includes the decision regarding media vehicles, deciding on media timings and deciding on geographical allocation. Major media types: Telemarketing: It means the business or practice of marketing goods or services by telephone i.e. selling over the telephone. Telemarketingis a form ofdirect marketingwhere asalespersonuses thetelephoneto solicit prospectivecustomersto sellproductsorservices. We find the prospective customers by various means, including past purchase histories, previous requests for information, credit limit, competition entry forms or application forms. Names are also purchased from another company's customerdatabase, or are obtained from atelephone directoryor some other public list or forum. We do The qualification process and find those prospective customers who are most likely to purchase our product. We also apply telemarketing to other forms of electronic marketing usinge-mailorfaxmessages. Pamphlet: Pamphlets include, 1. An unbound printed work, usually with a paper cover. 2. A short essay or treatise, usually on a current topic, published without a binding. We give advertisement in a pamphlet which is an unbound bookletthat is, without a hard cover or binding. It consists a single sheet of paper that is printed on both sides and folded in half, in thirds, or in fourths which is called a leaflet.
For us, pamphlets are very important in marketing as they are cheap and can be distributed easily. We will distribute pamphlets to the hardware shops, wholesalers, offices of contractors, etc. who are our target customers. Newspaper We also give advertisement in „Gujarat Samachar?, „Sandesh?, and „Divya Bhaskar? because we cover market only in Gujarat at this stage and the circulation and impact of local language news papers is higher than those of English especially in out state. So there is no need to give advertisement in English newspaper. We almost give advertisement in every two months. By this media vehicle, we can reach too many customers as everyone will definitely read newspaper. Internet advertising It is delivering advertisements to internet users via web sites, e- mail, ad-supported soft wares and internet-enabled cell phones. It is also called an "Ad Network". Our Internet marketing includesinformation management,public relations,customer service, andsales. We expect that electronic commerce and Internet marketing will help to make our product more popular as internet access has been becoming more widely available and used. We can also save money because of a reduced need for a sales force. Apart from this, internet marketing helps us to expand from a local market to both national marketplaces also. Yellow pages: We also give advertisement in Tata Yellow Pages because we can advertise our product to many of our target market through it. While deciding the media, we took following factors into consideration. ? Target audience: contractors, builders and dealers. ? Characteristics of our products - durable, reliable, good quality ? Cost of medium: As television is very costly medium and our products need not to be advertised on TV, we do not advertise on that medium.
Media vehicles Media: Print media ? ? ? ? „GujaratSamachar? „Sandesh? „Divya Bhaskar? Tata Yellow Pages
A WIDE RAGE OF PLUMBING FITTINGS OF BRASS WITH GUANTEE* STAINLESS STEEL DRAIN STRAINER* *ALL THE FITTINGS WILL BE AVAILABLE IN VARIOUS SIZE. THE FITTINGS WILL BE AVAILABLE AS PER YOUR REQUIREMENTS AND ORDER. FOR MORE DETAILS CONTACT ON: EASYFLOWENTERPRISE Kerla Estate, GIDC, Bawla. Dist. Ahmedabad Phone: 9545- 22993 Log on:www.easyflow.com E- mail address: easyflow_india.com Media Vehicle Size of the advertisement (in column centimetre) 2x8 1x4 1x4 1x4 Coloured/ Black and White Frequency Distribution Cost (in Rs.)
Divya Bhaskar GujaratSa machar Sandesh Tata Yellow Pages
Black and white Black and white Black and white -
Per 2 months Per 2 months Per 2 months -
WholeGujarat WholeGujarat WholeGujarat -
131400 72000 30000 121000
Media timings The demand for our products is equal for the whole year; there is no specific time or season for advertising them. So the frequency of the advertisement is even for the whole year. Measurement Good planning and control of advertising depend upon measures of advertising effectiveness. We try to measure the communication effect of an advertisement – that is, its potential effect on awareness, knowledge, or preference. We also measure the advertisement's sales effect. Direct marketing Direct marketing is the main marketing or promotional tool for us. It is the use of buyer direct channels to reach and deliver products to customers without any middleman. Our strategies for direct marketing are as under. ? ? ? ? ? Direct mail Catalogs Telemarketing Web sites Salesmen
For us, it is the fastest growing avenues for serving the target customers. We seek a measurable response typically a customer order. We use this type of promotional strategy to build a good relationship with our buyers. It helps in reducing the following things in terms of transportation. ? ? ? ? ? Higher cost of driving Traffic congestion Parking headaches Lack of time A shortage of retail sales help
COMPETITION: “Poor firms ignore their competitors, average firms copy their competitors and winning firms lead their competitors.” The products of brass are not so much popular inIndiaso the manufactures of plumbing fittings of brass are less in number. We therefore do not have many competitors particularly for brass fittings. But these products are also made of galvanize, plastic or PVC, and steel. So we have to face them as competitors because these small products can be substituted very easily. Thus, we have a very laugh competition because of the substitute materials. The threats in terms of competitions to us are as under. Threat of new entrants : In this segment,entry and exit barriers are quite fewso profit potential is high. Because of the high profitability many new forms are eager to enter the segments. Therefore market will be divided among all the firms and profitability of each individual firm will go down. Threat of substitute products : Drain strainer, elbows, kim nipple etc. are available in brass, plastic, galvanize, still etc. So a number of options are available to the customers. Moreover these are very small and hidden products so they can be substituted very easily. Therefore, we have to compete with the manufacturers of plumbing fittings made of all the above materials. These products have not been produced under any particular brand name. The local manufacturers used to produce them in different materials. So they can be said our main competitors. Steps involved in marketing “Easy flow” undertakes marketing analysis for systematic designing, collecting, analyzing and reporting of data and findings relevant to a specific market situation. a) Define objective The main objective of our market survey was to know the market demand of plumbing products made out of “brass”.
Apart from that we also want to know ? Which size of plumbing accessories are the most preferable among customers so we can have idea and can produce plumbing accessories. ? How much percentage of market is really interested in the plumbing accessories? ? To know how many customers are really interested in the superior product produced by us and how many of them really buy them. ? To know the factors considered by them in taking the decision regarding any product ? To know what is the future growth of our product. b) Define target population As per the market survey carried out by easy flow, contractors and dealers are the major decision makers for the purchase of plumbing accessories. Primary data sources c) Sample size: contractors dealers 100 people 100 people Questionnaires.
d) Develop questionnaire :
QUESTIONNAIRE
QUESTIONNAIRE[FORDEALERS]
N.B. = 1. The information obtained will be kept confidential and will be used for research purpose only. 2. Please mark the boxes for „YES? response. Leave the boxes blank for „NO? response. ________________________________________________________________________ PERSONAL DETAILS Name Address Category : : : [] Wholesaler [] Retailer
SECTION - I
1. Which material do you prefer most [ ] Brass [ ] Stainless Steel [ ] Ceramic [ ] Plastic [ ] Iron
2. Why do customers prefer thismaterial? (Makein order of preference.) [ ] Price [ ] Attractiveness [ ] Durability [ ] Available in different colors [ ] Availability [ ] Any other (Please specify) [ ] Quality of material 3. Which size of product do customers prefer most? [ ] ½” [ ] 2” [ ] ¾” [ ] 2.1/2” [ ] 1” [ ] 3” [ ] 1.1/4” [ ] 4” 4. Howmany units do you sale per year? KIM NIPPLE Drain Strainer Plumbing Less than 50000 50000 to 75000 More than 75000
5. How do you sale your product? [ ] Bulk [ ] Both [ ] Retail 6. How do you get your payments? [ ] Cash [ ] Credit (If your answer is credit, please specify credit period.
Days)
7. What is the commission rate that you receive from the manufacturer? KIM NIPPLE Drain Strainer Plumbing Fittings % % %
8. Which is the most convenientpackage size to store the stock? KIM NIPPLE Drain Strainer Plumbing Less than 50 units 50 to 100 units 100 to 200 units More than 200 units 9. How do you advertise theproducts? [ ] Banners [ ] Magazines [ ] Newspapers [ ] Leaflets [ ] Brochure [ ] Local Cable [ ] Others
10. Do customers prefer polishedproducts? [ ] Yes [ ] No 11. Are you satisfied with the quality and availability of the products? [ ] Yes [ ] No 12. Please give your suggestions. 1. 2. 3. THANKS FOR YOUR KIND RESPONSE AND CO-OPERATION.
QUESTIONNAIRE[FORCONTRACTORS]
N.B. = 1. The information obtained will be kept confidential and will be used for research purpose only. 2. Please mark the boxes for „YES? response. Leave the boxes blank for „NO? response. ________________________________________________________________________ PERSONAL DETAILS Name Address : :
SECTION - I
1. Which material do you prefer most at the time of buying? [ ] Brass [ ] Plastic [ ] Stainless Steel [ ] Iron [ ] Ceramic 2. Why docustomers prefer this material? (make in order of preference.) [ ] Price [ ] Attractiveness [ ] Durability [ ] Available in different colors [ ] Availability [ ] Any other (Please specify) [ ] Quality of material 3. Which size of product do customers prefer most? [ ] ½” [ ] 2” [ ] ¾” [ ] 2.1/2” [ ] 1” [ ] 3” [ ] 1.1/4” [ ] 4” 4. Howmany units do you sale per year? KIM NIPPLE Drain Strainer Plumbing Less than 50000 50000 to 75000 More than 75000
5. How do you sale your product? [ ] Bulk [ ] Retail
[ ] Both
6. How doyou get your payments? [ ] Cash [ ] Credit (If your answer is credit, please specify credit period.
Days)
7. What is the commission rate that you receive from themanufacturer? KIM NIPPLE Drain Strainer Plumbing Fittings % % %
8. Which is the most convenientpackage size to store the stock? KIM NIPPLE Drain Strainer Plumbing Less than 50 units 50 to 100 units 100 to 200 units More than 200 units 9. Do you prefer polished products? (Polished with chromium or mico) [ ] Yes [ ] No 10. Are you satisfied with the quality and availability of the products? [ ] Yes [ ] No 11. Please give your suggestions. 1. 2. 3.
THANKS FOR YOUR KIND RESPONSE AND CO-OPERATION.
e) Collect information f) Analyse data
Marketing analysis of survey of contractors
Prefrence of Material
70 60 50 40 30 20 10 0 Brass Stainless steel Ceramic Plastic Iron
Percentage (%)
Type of Material
The above diagram reveals that 60% contractors prefer brass material. Stainless steel is the second most preferable material.18% contractors prefer it. Other materials like ceramic, plastic and iron is less preferable by contractors.
Price
40 30 18 12 7 6 33 24
%
20 10 0
Rank 1
Rank 2
Rank 3
Rank 4
Rank 5
Rank 6
Rank
The above diagram revels that 33% contractors have given the price second rank while they purchase the products. So we can say that price plays important role while contractors decide to buy products.
Durability
50 40 30 20 10 0 45
%
14
12 4
12
13
Rank 1
Rank 2
Rank 3
Rank 4
Rank 5
Rank 6
Rank
The above diagram revels that 45% contractors have given the durability first rank while they purchase the products. So we can say that durability is the most important factor.
Availability
30 21 20 13 8 9 25 24
%
10 0
Rank 1
Rank 2
Rank 3
Rank 4
Rank 5
Rank 6
Rank
The above diagram revels that 25% contractors have given the availability third rank while they purchase the products. And 24% contractors have given the availability fourth rank while they purchase the products.
Quality of Material
30 20 28 27 20 14 7 4
%
10 0 Rank 1 Rank 2 Rank 3
Rank 4
Rank 5
Rank 6
Rank
The above diagram revels that 28% contractors have given the quality of material first rank while they purchase the products. It reveals that quality of material plays important role while purchasing product.
Attrativeness
30 20 14 3 Rank 1 4 28 24 27
%
10 0 Rank 2
Rank 3
Rank 4
Rank 5
Rank 6
Rank
The above diagram revels that 28% contractors have given attractiveness fifth rank while they purchase the products. So we can say that attractiveness is not so important factor while contractors purchase products.
Available in Different Colours
30 20 20 28 27 14 5 6
%
10 0 Rank 1 Rank 2 Rank 3 Rank 4 Rank 5
Rank 6
Rank
The above diagram revels that 28% contractors have given attractiveness fourth rank while they purchase the products.
Preferance for Size 60 50 40 % 30 20 10 0 1 size 1/2" 3/4" 1" 1.1/4" 2" 2.1/2" 3" 4"
The above diagram revels that 51% contractorsprefersize 1”. While 37% prefer size 2” and 4” is the least preferred size among contractors.
No of Units Purchased Per Year
72 <50000 13 Kim Nipple Nam e of product 15 50000-75000 >75000
80 60 % 40 20 0
The above diagram revels that 72% contractors generally buy 50000 – 75000 units of kim nipple.
No of Units Purchased Per Year
83 <50000 5 12 50000-75000 >75000 Plumbing Fittings Nam e of product
100 80 60 % 40 20 0
The above diagram revels that 83% contractors generally buy >75000 units of plumbing fittings. It shows that they are much in demand.
No of Units Purchased Per Year
65 <50000 13 12 50000-75000 >75000 Drain Strainer Nam e of product
80 60 % 40 20 0
The above diagram revels that 65% contractors generally buy more than 75000 units of drain strainer.
Manner of Purchasing
13% 10% bulk retail both 77%
The above diagram revels that 77% contractors purchase products in bulk.
Mode of Paym ent
13% cash credit 87%
The above diagram revels that as contractors purchase the products in bulk they prefer credit purchase the most.
Credit Period
80 60 58 25
%
40 20 0
17
10 days
20 days No of days
30 days
Theabove diagram revels that 58% contractors prefer 20 days credit periodwhile only 17% contractors prefer 30 days credit period.
Kim Nipple
40 30 % 20 10 0 10 20 Discount Rate >20 27 37 36
The above diagram revels that 37% contractors get 20% discount from manufactures, while 36% contractors get more than 20% discount from manufactures.
Plumbing Fittings
40 30 % 20 10 0 10 20 Discount Rate >20 33 39 28
The above diagram revels that 39% contractors get 20% discount from manufactures, while 33% contractors 10% discount from manufactures.
Drain Strainer
40 30 % 20 10 0 10 20 Discount Rate >20 37 28 35
The above diagram revels that 37% contractors get 10% discount from manufactures, while 35% contractors get more than 20% discount frommanufactures. The above diagram revels the most convenient package size for kim nipple is 50 – 100 units.
Most Convenient Package Size To Store Kim Nipple 58 60 50 40 % 30 20 10 0 <50 units 50-100 units 100-200 units >200 units No of Units 14 27
1
Most Convenient Package Size To Store Plum bing Fittings 57 60 50 40 % 30 18 20 10 0 <50 units 50-100 units 100-200 units >200 units No of Units 24
1
The above diagram revels the most convenient package size for plumbing fittings is more than 200 units.
Most Convenient Package Size To Store Drain Strainer 37
40 35 30
28 24
25 % 20 15 10 5 0 <50 units 50-100 units 100-200 units >200 units No of Units 11
The above diagram revels the most convenient package size for drain strainer is less than 50 units.
Preferance For Polished Products
13%
Polished Unpolished
87%
The above diagram revels 87% contractors prefer polished products. While only 13%prefer unpolished products.
Satisfaction Level
100 % 50 0 Satisfied Type 91 9 Dissatisfied
The above diagram revels 91% contractors are satisfied with theproducts,while 9% contractors are not satisfied with the products.
Marketing analysis of surveyof dealers
Category of Dealers
retailer 37%
w holeseller 63%
The above diagram reveals that 63% are wholesellers and only 37% are retailers.
Preferance For Material 60 50 40 30 20 10 0
Bras s Stainles s Steel
58 34 3
Ceramic
3
Plas tic
4
Iro n
Type of Materials
The above diagram reveals that 58% dealers prefer brass material. Stainless steel is the second most preferable material.34% dealers prefer it. Other materials like ceramic, plastic and iron is less preferable by dealers.
Price 60 50 40 30 20 10 0 57
%
10
11
11
9 2
Rank 1
Rank 2
Rank 3
Rank 4
Rank 5
Rank 6
Rank
The above diagram revels that 57% dealers have given the price third rank while they purchase the products.
Durability 60 50 40 30 20 10 0 54
%
12
14 7 5 Rank 5
8
Rank 1
Rank 2
Rank 3
Rank 4
Rank 6
Rank
The above diagram revels that 54% dealers have given the durability first rank while they purchase the products. So we can say that durability is the most important factor
Availability 60 50 40 30 20 10 0 51
%
17 9
14 5 4 Rank 6
Rank 1
Rank 2
Rank 3
Rank 4
Rank 5
Rank
The above diagram revels that 51% dealers have given the availability fourth rank while they purchase the products.
Quality of MaterialQuality of Material 80 58 60
%
40 20 0 Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 14 15 6 3 4
The above diagram revels that 58% dealers have given the quality of material second rank while they purchase the products. It reveals that quality of material plays important role while purchasing product.
Attractiveness 30 25 20 15 10 5 0
25 20 15 14 10 16
%
Rank 1
Rank 2
Rank 3
Rank 4
Rank 5
Rank 6
Rank
Theabove diagram revels that 25% dealers have given attractivenessfifth rankwhile they purchase the products. So we can say that attractiveness is alsoan importantfactor while dealers purchase products.
Available in Different Colours 80 60
63
%
40 20 0 Rank 1 Rank 2 Rank 3 Rank 4 2 3 5 6
21
Rank 5
Rank 6
Rank
Theabove diagram revels that 63% dealers have given attractivenesssixth rankwhile they purchase the products. So we can say that it is not an important factor.
Most Preferable Size
40 30 % 20 10 0 1 2 1 2 3 3
31
30
28
1/2" 3/4" 1" 1.1/4" 2" 2.1/2" 3" 4"
Theabove diagram revels that 34% dealersprefersize 1”. While 30% prefer size 2” and 3/4"” is the least preferred size among dealers.
No of Units Sold Per Year 70 80 60 % 40 20 0 kim nipple Name of Product 12 18 <50000 50000-75000 >75000
Theabove diagram revels that 70% dealers generally buy 50000 – 75000 units of kim nipple.
No of Units Sold Per Year 80 80 60 % 40 20 0 plumbing fittings Nam e of Product 6 14 <50000 50000-75000 >75000
Theabove diagram revels that 80% dealers generally buy >75000 units of plumbing fittings. It shows that they are much in demand.
No of Units Sold Per Year
100 80 60 % 40 20 0
83 <50000 9 8 50000-75000 >75000 drain strainer Name of Product
Theabove diagram revels that 83% dealers generally buy more than 75000 units of drain strainer.
Manner of Selling
27% Bulk Retail 60% Both 13%
Theabove diagram revels that 60% dealers purchase products in both bulk and retail.
Mode of Payment
24% Cash Credit 76%
Theabove diagram revels that dealers prefer credit purchase the most.
Received Com ission Rate for Kim Nipple
60 40 % 20 0 5 10 >15 Com m ission Rate 60 37 3
Theabove diagram revels that 60% dealers get 5% commission from manufactures, while only 3% dealers get more than 15% commission from manufactures.
Received Com m ission Rate for Plum bing Fittings 70 60 50 40 % 30 20 10 0 5 10 Com m ssion Rate >15 63
29 8
Theabove diagram revels that 63% dealers get 5% commission from manufactures, while only 8% dealers get more than 15% commission from manufactures
Received Com m ission Rate for Drain Strainer
60 50 40 % 30 20 10 0 5 10 Commission Rate >15 18 57 25
Theabove diagram revels that 57% dealers get 5% commission from manufactures, while 25% dealers get more than 15% commission from manufactures
The Most Convenient Packing Size for Kim Nipple
50 40 30 % 20 10 0 <50 units 50-100 units 9 22
45
24
100-200 units
>200 units
No of Units
Theabove diagram revels the most convenient package size for kim nipple is 100 - 200 units.
The Most Convenient Packing Size for Kim Nipple
60 50 40 % 30 20 10 0 <50 units 50-100 units 100-200 units 9 12 24
55
>200 units
No of Units
Theabove diagram revels the most convenient package size for plumbing fittings is more than 200 units.
The Most Convenient Packing Size for Kim Nipple
70 60 50 40 % 30 20 10 0 <50 units 13
64
14 8
50-100 units 100-200 units No of Units
>200 units
Theabove diagram reveals the most convenient package size for drain strainer is 50 - 100 units.
Preferance for Polished Products
8%
Poshied Unpolished
92%
Theabove diagram revels 92% dealers prefer polished products. While only 8%prefer unpolished products.
Level of Satisfaction
100 80 60 % 40 20 0
87
13
Satisfied Type
Dissatisfied
Theabove diagram revels 87% dealers are satisfied with the products,while 13% dealers are not satisfied with the products.
g) Findings: From the survey we found that mainly brass plumbing accessories are more preferable by users. We also found that some of thesize ismore preferable and people consider durability, quality and price as main factors.
PERT- CPM
C A x B D
E H I
F F
G J
L
K
M
N J
P
Activities: A: Generation of idea B: Collection of information C: Market survey D: Location analysis E: Requirement of site with utilities F: Requirement of machineries and labour G: Sources of finance H: Purchase of land I : Placing an order for machineries J: Placing an order for raw materials K: Delivery of machineries and raw materials L: Installation of machineries M: Recruitment of labour N: Trial run P: Commercial production
MISSION: ? Expansion of new custom made parts as raw material being used by the manufacturers ? To enter the new market segments ? Maintenance of quality to compete the international standards ? To lengthen the product line to provide better service to customers
VISION: ? ? ? ? ? ? High quality products Fastest and sincere communication In time deliveries and response Better servicing Designing new products as per the requirements of the customers Competitive and fair prices
MOTTO: “Quality is never a co- incidence, it is a result of sincere andhard efforts.”
LIST OF ASSUMPTIONS: ? The firm beings its commercial production on1/4/2005. ? There are 300 working days in all five years. ? Equal numbers of units are produced in all the months throughout five years. ? Estimated units of all products will be produced & projected sales of them will be realized. ? The firm has adopted „piece wage rate? system for the direct workers. ? The management has decided to purchase raw material required for 10% of the production of next month in one month advance. ? The fixed production overheads will not change throughout all five years. ? All administrative expenses except depreciation will remain constant throughout five years. ? For the first year, selling & distribution expenses are taken as 1% of the total sales and they are assumed to be constant for next four years irrespective of sales. ? The frights are estimated to increase by Rs. 5000/- for every increase of Rs. 200000/- in purchase of raw material after the first year. ? The credit days received from creditors & allowed to debtors are taken as 15 and 20 respectively while the creditors of direct wages are based on 10 days. ? Out of total sales 60% sales is taken as credit sales & remaining as cash sales.
COST OF PROJECT Our total cost of project works out to be Rs.8029457/-, which includes cost of land, building, furniture, machinery, equipments, preliminary expenses, pre-operative expenses, miscellaneous assets, contingency and working capital margins. Cost of land & site development: The unit has acquired total land of about 1175 sq. meters in Kerala region in GIDC, at the rate of Rs. 325/- per sq. meter. So the total cost of land comes out to be Rs.381875/-. Cost of Buildings & Civil Works: The total cost of all the buildings comes out to be Rs. 2097368/-, which comprises the followings: Particulars FactoryBuilding Furnace Room Supervisor?s Cabin Packing Room Storage Room: For Raw Material For Finished Goods Lunch Room Reception Counter Partners? Cabin Account Department Sales Department Security Man?s Cabin Compound Wall Total
Required
sq. feet 2207 144 108 588 562.50 70.25 242.25 320 588 153 129 88 5600
Cost per sq. feet Total Cost (In Rs.) (In Rs.) 350 350 350 350 350 350 380 400 400 400 400 300 772450 50400 37800 205800 196875 164588 92055 128000 235200 61200 51600 26400 75000 2097368
Cost of Equipments: The total cost of equipments comes out to be Rs. 234450/-, which includes the items like computers, aqua-guard, cease fire, fax machine, trolies, cylinder, telephones, intercoms, etc. Cost of Furniture & Fixtures: The total cost of furniture comes out to be Rs. 202325/-, which includes tables, Chairs, fans, Air coolers, tube-lights, etc. The details are shown below. Particulars Units Rs. Required in Factory 10 2500 -8 44000 5 625 20 2600 20 500 17 19550 5 2500 20 ----2000 Units Required in Office 15 11 2 7 10 5 5 2 1 1 2 5 Rs. Total Cost Rs. 6250 19250 55000 1500 3900 625 25300 2500 53000 10000 8500 11000 2500
Chairs Revolving Chairs Tables Stools Tube lights Bulbs Fans Exhausting Fans A.C. Refrigerator Sofa set Cupboards Electric Board & Circuits Total
3750 19250 11000 875 1300 125 5750 -53000 10000 8500 11000 500
74275
128050
202325
Cost of Machineries: The total cost of machineries is Rs. 4550500/-. The details of all machineries are as below: Total Cost Machine Units (In Rupees) Leathe Machine 1 750000 Threading Machine 1 414500 Electro Platting Machine 1 475000 Extrusion Machine 2 1156000 Turning Machine 1 750000 Shearing Machine 1 400000 Power Press Machine 1 100000 Hydrolic Deep Drawing 1 400000 Press Machine Buffering Machine 7 105000 Total 4550500 Cost of Cost of Miscellaneous Assets: Additionally, miscellaneous assets of Rs. 130500/- is required the details of which are as follow: Particulars Furnace Cycle Stand Total
Total Cost
(In Rupees) 125000 5500 130500
Cost of Preliminary Expenses: The details of preliminary expenses are as under: Particulars Legal & documentation Advertisement Expenses of preparing feasibility report Stamp duty Establishment Expenses Total Amount 50000 75000 20000 5750 15000 165750
Cost of Pre-operative Expenses: The details of pre-operative expenses are as under: Particulars Electricity Deposit Telephone Deposit Total Amount 100000 6100 106100
Provision for contingency : The management believes that any contingency be it an earthquake or sudden rise in raw material prices and wages etc. can affect the working. So it has decided to keep aside 2% of the total cost of project, which amounts to Rs. 160589/-.
TOTAL COST OF PROJECT
Particulars
Land & Site Development Buildings & Civil Works Furniture & Fixtures Equipments Machineries Miscellaneous Assets Preliminary Expenses Pre-operative Expanses Contingency Margin @ 2% Total
Total Cost Rs. 381875 2097368 202325 234450 4550500 130500 165750 106100 160589 8029457
MEANS OF FINANCE The management of the firm has decided to finance the total of project of Rs. 8029457/- in the following manner. Particulars Partners? Capital 15% loan from bank Total Amount (In Rs.) 3029457 5000000 8029457
Means of Finance
Partners? Capital 15% loan from bank
WORKING CAPITAL REQUIREMENT ………………………… Closing Stock ………………………… …………………………
Debtors
5759200
Raw Material Finished Goods
579000 368535 327090
Cash & Bank Less:
…………………………
Creditors Raw Material ………………………… 3502950 Direct Wages …………………………. 259967 ………………………… Working Capital 3270908
Finance of Working Capital Requirement: Particulars Partners? Capital 12% Loan from relatives Total Amount (In Rs.) 1670908 1600000 3270908
Finance of Working Capital
Partners? Capital
12% Loan from relatives
BREAK-EVEN POINT FOR THE YEAR 2005-2006
Particulars Sales (A) Variable Expenses: Raw Material Direct Wages Packing Depreciation Power & Fuel Other Factory Overheads (70% of total) Excise Total (B) Total Contribution (A-B) Contribution per unit produced Fixed Cost: Freight Lightening Indirect Labour Insurance Other Factory Overheads (30% of total) Administration Overheads Selling & distribution Overheads Preliminary Expenses (Apportioned Equally) Interest (Apportioned Equally) Total 899946 57000 600000 3500 55920 970200 426790 11050 314000 3338406 863613 38000 600000 6590 21050 776160 358750 11050 314000 2989213 1160982 95000 600000 4115 40014 1487640 654260 11050 314000 4367061 Drain Strainer 42678750 18900000 3728000 2250000 198154 1494000 130480 4400000 31100634 11578116 12.8646 Kim Nipple 35875000 17280000 1403480 3960000 204602 397800 49115 2082000 25376997 10498003 7.2903 Plumbing Fittings 65426250 33300000 2667530 4050000 452994 1481000 93366 6455000 48499890
16926360 9.4035
Break-even point (In units): B.E.P.=Total Fixed Cost Per Unit Contribution
=3338406 12.8646 = 259503
=2989213 7.2903 = 410026
=4367061 9.4035 = 464408
Break-even point (In sales): B.E.P.= Break-even units* Selling Price Per unit
= 259503*47.5 = 12326393
= 410026*25 = 10250650
= 464408*36.5 = 16950892Rs.
ESTIMATED COST-SHEET FOR THE YEAR 2005-2006
Particulars Purchase of Raw Material Less: Closing Stock Raw Material Consumed Freight Wages Packing Expanses Prime Cost Excise Duty Lightening (3:2:5) Indirect Labour Depreciation Insurance Power & Fuel Other Factory Overheads (Estimated @5% of wages) Factory Cost Administrative Overheads (Apportioned on the basis of Factory Cost) Cost of Production Less: Closing Stock of Finished Goods Cost of Goods Sold Selling & distribution Cost Cost of Sales Profit
DRAIN STAINER
(900000 Sets) 19057500 157500 18900000 941928 3728000 2250000 5819928 4400000 57000 600000 199172 3500 1494000 186400 2760000 970200
KIM NIPPLE
(1440000 Units) 17424000 144000 17280000 861938 1403480 3960000 23505418 2082000 38000 600000 206277 6590 397800 70165 26906250
PLUMBING FITTIGS
(1800000 Units) 33577500 277500 33300000 1163674 2667530 4050000 41181204 6455000 95000 600000 450301 4115 1481000 133380 50400000
776160 33730200 56215 (1500 units) 33673985 426790 34100775 8577975 27682410 96120 (5000 units) 27586290 358750 27945040 7929960
1487640 51887640 216200 (7500 units) 51671440 654260 52325700 13100550
42678750 Sales
35875000
65426250
PROJECTED TRADING AND PROFIT & LOSS ACCOUNT FOR
THE YEAR ENDED ON31/3/2006
Dr.
Particulars To Raw Materials To Wages To Freight To Excise Duty To Gross Profit To Packing Expenses To Indirect Wages To Lightening Expenses To Power & Fuel To Depreciation To Other Factory Overheads To Salaries To Insurance To Telephone Charges To Electricity To Printing & Stationeries To Postage To Audit Fees To Legal Charges To Staff Welfare Expenses To Interest To Selling & distribution To Preliminary Expenses To General Reserve (30% of Net Profit) To Provision for Taxation 144927535 10260000 By Gross Profit 1800000 190000 3372800 965960 389945 2328000 15715 60000 56400 74680 23200 50000 40000 490000 942000 1439800 33150 5705076 9616415 144927535 51164985 Rs. Particulars 70059000 By Sales 7799010 By Closing Stock of Raw Materials 2967540 By Closing Stock of Finished Goods 12937000 51164985
Cr.
Rs. 143980000 579000 368535
13311844 To Net Profit 51164985 51164985
BALANCE SHEET AS ON31/3/2006
Liabilities Capital 4700365 P & L Account13311844 18012209 - Distribution of Profit 13311844 Reserves & Surplus: General Reserve Borrowings: 15% bank loan 12% loan from relatives Current Liabilities: Creditors Provisions: Depreciation Provision: Building 209737 Furniture & Fixtures 20233 Equipments 46890 Plant & Machineries 682575 Miscellaneous Assets6525 Provision for Taxation Assets Fixed Assets: Land Buildings 4700365 Furniture & Fixtures Equipments Plant & Machineries 5705076 Miscellaneous Assets Current Assets: 5000000 Debtors 1600000 Closing stock of Raw Material Closing stock of Finished Goods Cash & Bank 3762917 Pre-operative Expenses Preliminary Expenses 165750 - Written Off (1/5 th) 33150 Rs. Rs. 381875 2097368 202325 234450 4550500 130500
5759200 579000 368535 16808280 106100 132600
965960 9616415 31350733 31350733
CASH FLOW STATEMENT FOR THE YEAR 2005-2006 Particulars Profit13311844 + Provision for Taxation9616415 + Transfer to General Reserve5705076 + Preliminary Expenses 33150 + Depreciation965960 Funds from Operations 29632445 + Increase in Current Liability 3762917 - Increase in Current Assets 6706735 Cash from Operations Funds from Financing Activities: Capital4700365 + 12% bank loan from relatives1600000 + 15% bank loan5000000 11300365 Funds from Investing Activities: Purchase of assets (total) (7597018) Cost of Project: Preliminary Expenses165750 Pre-operative Expenses106100 (271850) Less: Distribution of Profit Closing Cash Balance (13311844) 16808280 Rs.
2668862 7
CONSUMPTION OF RAW MATERIALS FOR THE YEAR 2005-2006
Product
Raw Material Steel Luster ERW Zinc Brass Nickel Chromium Luster
Per Unit Production Total Requirement (In Units) Requirement
Price (Per Unit) 55 20 32 80 190 20 20
Total Cost Rs. 9900000 9000000 18900000 11520000 5760000 17280000 17100000 7200000 9000000 33300000
Drain Stainer Total Kim Nipple Total Plumbing Fittings
0.20Kgs. 0.5 Pieces 0.25 Kgs. 0.05 Kgs. 0.05 Kgs. 0.20 Kgs. 0.25 Piece
900000 900000 1440000 1440000 1800000 1800000 1800000
180000 Kgs. 450000 Pcs. 360000 Kgs. 72000 Kgs. 90000 Kgs. 360000 Kgs. 450000 Pcs.
Per Unit Cost (Rs.) 11 10 21 08 04 12 9.5 4 5 18.5
Total
TOTAL DIRECT WAGES FOR THE YEAR 20052006
PARTICULARS DRAIN STAINER KIM NIPPLE PLUMBING FITTINGS TOTAL WAGES (RS.)
Chargeable to Drain Stainer: 21 Semi-skilled Workers*0.15Rs.Per Unit *900000 Units + 1 Skilled Worker*0.25Rs. Per Unit *900000 Units=22500 + Bonus @8.33% + Provided Fund @9% + E.S.I. @4.5%
2835000 225000 3060000 254900 275400 137700
Chargeable to Kim Nipple: 8 Workers*0.20Rs. Per Unit*1440000 Units + Bonus @8.33% + P.F @9% + E.S.I. @4.5% ____________________________________ Chargeable to Plumbing Fittings: 8 Workers*0.15Rs. P.U.*1800000 Units + 2 Workers (on Furnace)*1500 Rs. Per Month + Bonus @8.33% + P.F. @9% + E.S.I @4.5%
1152000 95960 103680 51480
2160000 36000 179930 194400 97200
________ 3728000 _________ 1403480
______________ 2667530 ______________ 7799010
TOTAL INDIRECT WAGES FOR THE YEAR 2005-2006
Particulars Production Manager (Rs.20000 per month) Supervisor (Rs. 10000 per month) Two Technician for Each Product (Each Rs. 5000 per month) Two Store-keepers (Each Rs. 3750 per month) Other Supporting Workmen (11workmen for each product) (Each Rs. 2500 per month) Total Drain Stainer 80000 40000 Kim Nipple 80000 40000 Plumbing Fittings 80000 40000
120000 30000
120000 30000
120000 30000
330000 600000
330000 600000
330000 600000
TOTAL DEPRICIATION FOR THE YEAR 2005-2006 Particulars On Machineries @15%: Total cost of Shearing Machine 400000 + Power Press Machine 100000 + Hydrolic Deep Drawing Press Machine 400000 + Buffering Machine105000 1005000 Depreciation on Rs. 1005000 @15% p.a.will come to Rs. 150750 that will be charged to only Drain Stainer. Total cost of the Leathe Machine is Rs. 750000. Depreciation on this machine comes to be Rs. 112500 that will be charged only to Kim Nipple. Total cost of Extrusion Machine & Turning Machine comes to Rs. 1906000. Depreciation of Rs. 285900 on them is Charged only to Plumbing Fittings. Total depreciation of Threading Machine Is charged equally to Nipple & Plumbing Fittings that comes Rs.31087 respectively. 9830 Depreciation of Rs.71250 on Electro Plating Machine will be charged to Nipple & 61420 Drain Stainer Kim Nipple Plumbing Fittings
150750
112500
285900
31087
31088
Plumbing Fittings in the ratio of hrs. i.e. 240:1500 that comes to Rs.9830 & Rs.61420 respectively. Total On Furniture & Fixtures @10%: The cost of furniture & Fixtures used in Factory is Rs.74275. Depreciation of Rs.7428 will be charged equally to all products. The cost of furniture & Fixtures used in Office is Rs.128050. Depreciation of Rs.12805 will be charged to all products In the ratio of Factory Cost. Total On Building @10%: Total depreciation on Factory Bldg., Compound Wall, Lunch Room & Supervisor?s Cabin is Rs. 97730 that Will be charged equally to all products. . Depreciation of Rs. 5040 on Furnace Room Is charged to Plumbing Fittings only. Depreciation of Rs. 20580 on Packing Room Is charged on the basis of production. 150750 153417 378408
2476
2476
2476
3842
3073
5890
6318
5549
8366
32577
32577
32576
5040
4475
7160
8945
5316 + 3518 Depreciation on Raw Material Storage Room & Finished goods Storage Room
4922 + 5725
9450 + 7216
is charged on the basis of Raw Materials & Production respectively. Total depreciation of Rs.50240 on Reception Counter, Partners? Cabin, Account & Salesdept., Security Man?s Cabin is charged on the basis of Factory Cost.
15072
12058
23110
Total Miscellaneous Assets @5%: Depreciation on Furnace is charged to Plumbing Fittings. Depreciation on cycle stand is charged on the Basis of factory cost. Total Equipments @20%: Total depreciation of Rs. 46890 is charged on The basis of factory cost. Total
61018
62442
86277 6250
83 83
66 66
126 6376
14067 14067
11254 11254
21569 21569
Cost
DEPRECIATION AS PER SECTION 32 OF THE INCOME TAX ACT, 1961 FOR THE YEAR 2005-2006 Particular s Rate of Tax Opening Balance as on1/4/05 + Acquisitio n during the year W.D.V. as on31/3/200 6 Depreciati on Machineri Furnitu Buildi es re & ng Fixtures 15% Nil 10% Nil 10% Nil Equipme nts 25% Nil Compute Misc. rs Asset s 60% Nil 25% Nil
4550500
202325 209736 8
159450
75000 13050 0
4550500
202325 209736 8
159450
75000 13050 0
682575
20233 209737
39860
45000 32625
TOTAL INSURANCE PREMIUM FOR THE YEAR 2005-2006 Particulars Buildings Plant & Machineries Furniture & Fixtures Finished Goods Computers Miscellaneous Assets Total Amount (in Rs.) 4195 9100 405 1660 225 130 15715
TOTAL ADMINISTRATION EXPANSES FOR THE YEAR 2005-2006
Particulars Depreciation Insurance Legal Charges Audit Fees Printing & Stationeries Postage Electricity Charges Staff Welfare Expanses Telephone Charges Salaries: Managers (4 managers @ Rs. 20000 per month) Partners (8 partners @ Rs. 10000 per month) Accountant (1accountant @ Rs. 7500 per month) Computer Operators (1 operator @ Rs. 7500 per month) Peons (5 peons @ Rs. 2500 per month) Security Guards (2 guards @ Rs. 2500 per month) Gardener (1 gardener @ Rs. 1500 per month) Rs. 110210 1510 40000 50000 74680 23200 56400 490000 60000
960000 960000 90000 90000 150000 60000 18000
Total
3234000
TOTAL POWER & FUEL COST FOR THE YEAR 2005-2006 Particulars Drain Stainer Kim Nipple Plumbing Fittings Total Cost (Rs.)
Shearing Machine: 1500 hrs. *4Rs.*25 units per hr. Power Press Machine: 600 hrs. *4 Rs.*30 units per hr. Hydrolic Deep Drawing Press Machine: 600 hrs. *4 Rs. *25 units per hr. Buffering Machines: 15000 hrs. *4 Rs.*20 units per hr. Leathe Machine: 1200 hrs. *4Rs.*30 units per hr. Extrusion Machine: 4500 hrs. *4 Rs.*30 units per hr. Turning Machine: 600 hrs. *4 Rs.*15 units per hr. Threading Machine: 2250 hrs. *4 Rs.*25 units per hr. 2250 hrs. *4 Rs.*25 units per hr. Electro Platting machine: 240 hrs. *4 Rs.*30 units per hr. 1500 hrs. *4 Rs.*30 units per hr. Cost of Coal used in Furnace Total
150000
72000
72000
1200000 144000
540000
36000
225000 225000
28800 180000 500000
1494000
397800
1481000
3372800
TOTAL SELLING & DISTRIBUTION EXPENSES FOR THE YEAR 2005-2006 Rs. 1000000 162000 216000 61800 1439800
Particulars Advertisement Rent of Truck Salaries of Salesmen Commission Total
ESTIMATED TAX LIABILTY FOR THE YEAR 2005-2006: Net Profit as per P&L account Partners? salaries 28633335 1920000 30553335 64070
30489265
+
Less: Additional Allowable Depreciation Less: Salary allowed Taxable Profit Tax on Rs. 28104638 @ 30% Surcharge @10% Educational Cess @ 2% Total Tax
1920000 28569265 8431229 843123 185488 9616415
+ +
ESTIMATED COST-SHEET FOR THE YEAR 2006-2007
Particulars Opening Stock + Purchase of Raw Material Less: Closing Stock Raw Material Consumed Freight Wages Packing Expanses Prime Cost Excise Duty Lightening (3:2:5) Indirect Labour Depreciation Insurance Power & Fuel Other Factory Overheads (Estimated @5% of wages) Factory Cost Administrative Overheads (Apportioned on the basis of Factory Cost) Cost of Production Add: Opening Stock of Finished Goods Less: Closing Stock of Finished Goods Cost of Goods Sold Selling & distribution Cost Cost of Sales Profit 56215 56163 (1500 units) 33698142 426790 34124932 8553818 96120 96030 (5000 units) 27650425 358750 28009175 7865825 216200 215903 (7500 units) 51817033 654260 52471293 12954957 DRAIN STAINER (900000 Sets) 157500 18907875 165375 18900000 941928 3728000 2250000 25819928 4400000 57000 600000 171770 3500 1494000 186400 32732598 965492 KIM NIPPLE (1440000 Units) 144000 17283600 147600 17280000 861938 1403480 3960000 23505418 2082000 38000 600000 177969 6590 397800 70165 26877942 772393 PLUMBING FITTIGS (1800000 Units) 277500 33306937.5 284437.5 33300000 1163674 2667530 4050000 41181204 6455000 95000 600000 386618 4115 1481000 133380 50336317 1480419
33698090
27650335
51816736
42678750 Sales
35875000
65426250
PROJECTED TRADING AND PROFIT & LOSS ACCOUNT FOR
THE YEAR ENDED ON31/3/2007
Dr.
Particulars To Opening Stock: Raw Material 579000 Finished Goods368535 To Raw Materials To Wages To Freight To Excise Duty To Gross Profit 144945508.5 To Packing Expenses To Indirect Wages To Lightening Expenses To Power & Fuel To Depreciation To Other Factory Overheads To Salaries To Insurance To Telephone Charges To Electricity To Printing & Stationeries To Postage To Audit Fees To Legal Charges To Staff Welfare Expenses 10260000 By Gross Profit 1800000 190000 3372800 830871 389945 2328000 15715 60000 56400 74680 23200 50000 40000 490000 144945508.5 50796011 Rs.
Cr.
Particulars By Sales 947535 69498412.5 By Closing Stock of Raw Materials 7799010 By Closing Stock of Finished Goods 2967540 12937000 50796011 Rs.
143980000 597412.5 368096
To Selling & distribution To Preliminary Expenses To General Reserve (30% of Net Profit) To Provision for Taxation To Net Profit
1439800 33150 5926330 9587015 13828105 50796011 50796011
BALANCE SHEET AS ON31/3/2007
Liabilities Capital 4700365 P & L Account13828105 18528470 -Distribution of Profit13828105 Reserves & Surplus: General Reserve Current Liabilities: Creditors Provisions: Depreciation Provision: Building 398500 Furniture & Fixtures 38443 Equipments 84402 Plant & Machineries 1262763 Miscellaneous Assets12723 Provision for Taxation Rs. Assets Rs. 381875 2097368 202325 234450 4550500 130500 Fixed Assets: Land Buildings 4700365 Furniture & Fixtures Equipments Plant & Machineries 11631406 Miscellaneous Assets Current Assets: 3734887.5 Debtors Closing stock of Raw Material Closing stock of Finished Goods Cash & Bank Pre-operative Expenses Preliminary Expenses 165750 1796831 - Written Off66300 9587015
5759200 597412.5 368096 16923228 106100
99450
31450504.5
31450504.5
CASH FLOW STATEMENT FOR THE YEAR 2006-2007 Particulars Profit 13828105 + Provision for Taxation 9587015 + Transfer to General Reserve 5926330 + Preliminary Expenses 33150 + Depreciation 830871 Funds from Operations 30205471 - Decrease in Current Liability 28029.5 - Increase in Current Assets 17973.5 Cash from Operations Less: Tax Paid Funds from Financing Activities: Repayment of… + 12% loan from relatives 1600000 + 15% bank loan5000000 Less: Distribution of profit Rs.
30159468 (9616415) 20543053
(6600000) 13943053 (13828105) 114948 16808280 16923228
Add: Opening Cash Balance Closing Cash Balance
ESTIMATED COST-SHEET FOR THE YEAR 2007-2008
Particulars Opening Stock + Purchase of Raw Material Less: Closing Stock Raw Material Consumed Freight Wages Packing Expanses Prime Cost Excise Duty Lightening (3:2:5) Indirect Labour Depreciation Insurance Power & Fuel Other Factory Overheads (Estimated @5% of wages) Factory Cost Administrative Overheads (Apportioned on the basis of Factory Cost) Cost of Production Add: Opening Stock of DRAIN STAINER (945000 Sets) 165375 19845000 165375 19845000 964928 3914400 2362500 27086828 4620000 57000 600000 148369 3500 1568700 195720 34280117 961534 KIM NIPPLE (1476000 Units) 147600 17712000 147600 17712000 873188 1438567 4059000 24082755 2134050 38000 600000 154720 6590 407745 71928 27495788 769227 PLUMBING FITTIGS (1845000 Units) 284437.5 34132500 284437.5 34132500 1184674 2734218 4151250 42202642 6616375 95000 600000 330919 4115 1518025 136710 51503786 1474352
35241651
28265015
52978138
Finished Goods Less: Closing Stock of Finished Goods Cost of Goods Sold Selling & distribution Cost Cost of Sales Profit Sales
56163 727208 (19500 units) 34570606 426790 34997396 6765792 41763188
96030 371505 (19400 units) 27989540 358750 28348290 6245960 34594250
215903 732218 (25500 units) 52461823 654260 53116083 9975079 63091162
PROJECTED TRADING AND PROFIT & LOSS ACCOUNT FOR
THE YEAR ENDED ON31/3/2008
Dr.
Particulars To Opening Stock: Raw Material 597412.5 Finished Goods 368096 To Raw Materials To Wages To Freight To Excise Duty Rs.
Cr.
Rs.
Particulars
By Sales 965508.5 71689500 By Closing Stock of Raw Materials 8087185 By Closing Stock of Finished Goods 3022790 13370425 44741535 141876943.5 To Packing Expenses To Indirect Wages To Lightening Expenses To Power & Fuel To Depreciation To Other Factory Overheads To Salaries To Insurance To Telephone Charges 10572750 139448600 597412.5 1830931
To Gross Profit
141876943.5 44741535
By Gross Profit
1800000 190000 3494470 715331 404358 2328000 15715 60000
To Electricity To Printing & Stationeries To Postage To Audit Fees To Legal Charges To Staff Welfare Expenses To Selling & distribution To Preliminary Expenses To General Reserve (30% of Net Profit) To Provision for Taxation
56400 74680 23200 50000 40000 490000 1439800 33150 4569461 7722143 10662077 44741535 44741535
To Net Profit
BALANCE SHEET AS ON31/3/2008
Liabilities Capital 4700365 P & L Account10662077 15362442 - Distribution of Profit 10662077 Reserves & Surplus: General Reserve Current Liabilities: Creditors Provisions: Depreciation Provision: Building 568387 Furniture & Fixtures 54830 Equipments 114411 Plant & Machineries 1755923 Rs. Assets Rs. 381875 2097368 202325 234450 4550500 130500 Fixed Assets: Land Buildings 4700365 Furniture & Fixtures Equipments Plant & Machineries 16200867 Miscellaneous Assets
Current Assets: 3854048 Debtors 5577943.5 Closing stock of Raw Material 597412.5 Closing stock of Finished 1830931 Goods 19213880 Cash & Bank 106100 Pre-operative Expenses Preliminary Expenses 165750 66300
Miscellaneous Assets 18611 Provision for Taxation
2512162 - Written Off 99450 7722143
34989585
34989585
CASH FLOW STATEMENT FOR THE YEAR 2007-2008 Particulars Profit 10662077 + Provision for Taxation 7722143 + Transfer to General Reserve 4569461 + Preliminary Expenses 33150 + Depreciation 715331 Funds from Operations 23702162 + Increase in Current Liability 119160.5 - Increase in Current Assets 1281578.5 Cash from Operations Less: Tax Paid Less: Distribution of Profit Rs.
22539744 (9587015) 12952729 (10662077) 2290652 16923228 19213880
Add: Opening Cash Balance Closing Cash Balance
ESTIMATED COST-SHEET FOR THE YEAR 2008-2009
Particulars Opening Stock + Purchase of Raw Material Less: Closing Stock Raw Material Consumed Freight Wages Packing Expenses Prime Cost Excise Duty Lightening (3:2:5) Indirect Labour Depreciation Insurance Power & Fuel Other Factory Overheads (Estimated @5% of wages) Factory Cost Administrative Overheads (Apportioned on the basis of Factory Cost) Cost of Production Add: Opening Stock of Finished Goods Less: Closing Stock of Finished Goods Cost of Goods Sold Selling & distribution Cost Cost of Sales Profit
DRAIN STAINER
(945000 Sets) 165375 19853274 173649 19845000 964928 3914400 2362500 27086828 4620000 57000 600000 128088 3500 1568700 195720 34259836
KIM NIPPLE
(1476000 Units) 147600 17715696 151296 17712000 873188 1438567 4059000 24082755 2134050 38000 600000 133647 6590 407745 71928 27474715
PLUMBING FITTIGS
(1845000 Units) 284437.5 34139622.5 291560 34132500 1184674 2734218 4151250 42202642 6616375 95000 600000 284497 4115 1518025 136710 51457364
958198 35218034
766558 28241273
1469236 52926600
727208 726721 (19500 units) 35218521 426790 35645311 6117877
371505 371193 (19400 units) 28241585 358750 28600335 5993915
732218 731506 (25500 units) 52927312 654260 53581572 9509590
41763188 Sales
34594250
63091162
PROJECTED TRADING AND PROFIT & LOSS ACCOUNT FOR
THE YEAR ENDED ON31/3/2009
Dr.
Particulars To Opening Stock: Raw Material 597412.5 Finished Goods 1830931 To Raw Materials To Wages To Freight To Excise Duty Rs.
Cr.
Rs.
Particulars
By Sales 2428343.5 71708592.5 By Closing Stock of Raw Materials 8087185 By Closing Stock of Finished Goods 3022790 13370425 43277189 141894525 To Packing Expenses To Indirect Wages To Lightening Expenses To Power & Fuel To Depreciation To Other Factory Overheads To Salaries To Insurance To Telephone Charges To Electricity To Printing & Stationeries To Postage To Audit Fees 10572750 139448600 616505 1829420
To Gross Profit
141894525 43277189
By Gross Profit
1800000 190000 3494470 616434 404358 2328000 15715 60000 56400 74680 23200 50000
To Legal Charges To Staff Welfare Expenses To Selling & distribution To Preliminary Expenses To General Reserve (30% of Net Profit) To Provision for Taxation
40000 490000 1439800 33150 4296880 7265299 10026053 43277189 43277189
To Net Profit
BALANCE SHEET AS ON31/3/2009
Liabilities Capital 4700365 P & L Account 10026053 14726418 - Distribution of Profit 10026053 Reserves & Surplus: General Reserve Current Liabilities: Creditors Provisions: Depreciation Provision: Building 721285 Furniture & Fixtures 69580 Equipments 138417 Plant & Machineries 2175109 Miscellaneous Assets 24205 Provision for Taxation Rs. Assets Rs. 381875 2097368 202325 234450 4550500 130500 Fixed Assets: Land Buildings 4700365 Furniture & Fixtures Equipments Plant & Machineries 20497747 Miscellaneous Assets Current Assets: 3855003 Debtors Closing stock of Raw Material Closing stock of Finished Goods Cash & Bank Pre-operative Expenses Preliminary Expenses 165750 - Written Off 132600 3128596 7265299 39447010
5577943.5 616505 1829420 23686873.5 106100 33150
39447010
CASH FLOW STATEMENT FOR THE YEAR 2008-2009
Particulars Profit 10026053 + Provision for Taxation 7265299 + Transfer to General Reserve 4296880 + Preliminary Expenses 33150 + Depreciation 616434 Funds from Operations 22237816 + Increase in Current Liability 955 - Increase in Current Assets 17581.5 Cash from Operations Less: Tax Paid Rs.
Less: Distribution of Profit
22221189.5 (7722143) 14499046.5 (10026053) 4472993.5 19213880 23686873.5
Add: Opening Cash Balance
Closing Cash Balance
ESTIMATED COST-SHEET FOR THE YEAR 2009-2010
Particulars Opening Stock + Purchase of Raw Material Less: Closing Stock Raw Material Consumed Freight Wages Packing Expenses Prime Cost Excise Duty Lightening (3:2:5) Indirect Labour Depreciation Insurance Power & Fuel Other Factory Overheads (Estimated @5% of wages) Factory Cost Administrative Overheads (Apportioned on the basis of Factory Cost) Cost of Production Add: Opening Stock of Finished Goods Less: Closing Stock of Finished Goods Cost of Goods Sold Selling & distribution Cost Cost of Sales Profit
DRAIN STAINER
(992250 Sets) 173649 20837250 173649 20837250 1009420 4110120 2480625 28437415 4851000 57000 600000 110815 3500 1647135 205506 35912371
KIM NIPPLE
(1512900 Units) 151296 18154800 151296 18154800 891460 1474531 4160475 24681266 2187400 38000 600000 115476 6590 417940 73726 28120398
PLUMBING FITTIGS
(1891125 Units) 291560 34985813 291560 34985813 1219880 2802573 4255031 43263297 6781784 95000 600000 244629 4115 1555976 140128 52684929
987220 36899591
764300 28884698
1433063 54117992
726721 1603724 (43125 units) 36022588 426790 36449378 5312122
371193 722642 (37850 units) 28533249 358750 28891999 5034151
731506 1389690 (48562 units) 53459808 654260 54114068 6690511
41761500 Sales
33926150
60804579
PROJECTED TRADING AND PROFIT & LOSS ACCOUNT FOR
THE YEAR ENDED ON31/3/2010
Dr.
Particulars To Opening Stock: Raw Material 616505 Finished Goods 1829420 To Raw Materials To Wages To Freight To Excise Duty Rs.
Cr.
Rs.
Particulars
By Sales 2445925 73977863 By Closing Stock of Raw Materials 8387224 By Closing Stock of Finished Goods 3120760 13820184 39072834 140824790 To Packing Expenses To Indirect Wages To Lightening Expenses To Power & Fuel To Depreciation To Other Factory Overheads To Salaries To Insurance To Telephone Charges To Electricity To Printing & Stationeries To Postage To Audit Fees To Legal Charges 10896131 136492229 616505 3716056
To Gross Profit
140824790 39072834
By Gross Profit
1800000 190000 3621051 531713 419360 2328000 15715 60000 56400 74680 23200 50000 40000
To Staff Welfare Expenses To Selling & distribution To Preliminary Expenses To General Reserve (30% of Net Profit) To Provision for Taxation
490000 1439800 33150 3384107 5723277 7896250 39072834 39072834
To Net Profit
BALANCE SHEET AS ON31/3/2010
Liabilities Capital 4700365 P & L Account7896250 12596615 - Distribution of Profit 7896250 Reserves & Surplus: General Reserve Current Liabilities: Creditors Provisions: Depreciation Provision: Building 858893 Furniture & Fixtures 82856 Equipments 157623 Plant & Machineries 2531418 Miscellaneous Assets 29519 Provision for Taxation Rs. Assets Fixed Assets: Land Buildings Furniture & Fixtures Equipments Plant & Machineries Miscellaneous Assets 381875 2097368 202325 234450 4550500 130500 Rs.
4700365
23881854
3978467
Current Assets: Debtors Closing stock of Raw Material Closing stock of Finished Goods Cash & Bank Pre-operative Expenses Preliminary Expenses 165750 - Written Off 165750
5459689 616505 3716056 24448904 106100
3660309 5723277
Nil
41944272
41944272
CASH FLOW STATEMENT FOR THE YEAR 2009-2010
Particulars Profit 7896250 + Provision for Taxation 5723277 + Transfer to General Reserve 3384107 + Preliminary Expenses 33150 + Depreciation 531713 Funds from Operations 17568497 + Increase in Current Liability 123464 - Increase in Current Assets 1768381.5 Cash from Operations Less: Tax Paid Rs.
Less: Distribution of Profit
15923579.5 (7265299) 8658280.5 (7896250) 762030.5 23686873.5 24448904
Add: Opening Cash Balance
Closing Cash Balance
ANALYSIS OF RATIOS (1) Current Ratio: Current Ratio =Total Current Assets Total Current Liabilities
2005-2006 1.184
2006-2007 1.786
2007-2008 2.354
2008-2009 2.864
2009-2010 3.544
Conclusion: The ideal current ratio is considered as 2:1. It looks that though the firm not achieves the ideal ratio for initial two years, its liquidity position is quiet satisfactory. From the third year itself the firm achieves very concrete liquidity position. Constant improvement in the current ratio suggest better liquidity picture in future.
(2) Proprietary Ratio: Proprietary Ratio =Owner?s Fund Total Tangible Assets 2005-2006 0.334 2006-2007 0.521 2007-2008 0.599 2008-2009 0.640 2009-2010 0.682
Conclusion: The ideal proprietary ratio is considered as 1:3, which the firm achieves from the beginning. Constant improvement in this ratio indicates healthy financial strength of the business in coming future.
(3) Fixed Assets Ratio:
Fixed Assets Ratio =Fixed Assets * 100 Capital Employed 2005-2006 38.92% 2006-2007 35.44% 2007-2008 24.29% 2008-2009 17.71% 2009-2010 13.76%
Conclusion: The ideal fixed assets ratio is considered as 0.67. This reveals that the firm invests very small portion of its capital employed in fixed assets. The substantial part of the firm?s capital is invested in its current assets. The main reason for these values lower than the ideal one may the nature of business.
(4) Gross Profit Ratio: Gross Profit Ratio =Gross Profit * 100 Net Sales 2005-2006 35.54% 2006-2007 35.28% 2007-2008 32.08% 2008-2009 31.03% 2009-2010 28.63%
Conclusion: The analysis of gross profit ratio reveals declining trend. In the year 2007-2008 & 2009-2010, gross profit declines comparatively faster which is mainly on account of reduction in selling price during these years. However even in the fifth year the firm is getting 28.63% gross profit margin on its sales, which is significant.
(5) Net Profit Ratio: Net Profit Ratio =Net Profit * 100 Net Sales 2005-2006 13.21% 2006-2007 13.72% 2007-2008 10.92% 2008-2009 10.27% 2009-2010 8.26%
Conclusion: The analysis of the Net Profit ratio implies ups & downs in net profit margin over the period of five years. In second year the ratio improves but due to the price cuts in the third & in the fifth year, the ratio falls considerably.
(6) Operating Ratio: Operating Ratio =(Cost of Goods Sold + Operating Expenses) *100 Net Sales 2005-2006 80.75% Conclusion: For the initial two years the ratio is normal. During third & forth year the Ratio remains stable. The main reason behind the increase in the ratio during these years is reduction in total sales rather than decrease in efficiency. However the efficiency seems to be very unsatisfactory in the last year. Therefore the firm must required to think about the means for maintaining efficiency during the declining in sales. 2006-2007 80.27% 2007-2008 85.26% 2008-2009 86.25% 2009-2010 90.69%
(7) Return on Capital Employed:
Return on Capital Employed =Earnings Before Interest & Tax * 100 Capital Employed
2005-2006 173.58%
2006-2007 180.40%
2007-2008 109.10%
2008-2009 85.56%
2009-2010 59.42%
Conclusion: The above figure shows tremendous returns during the first three ears. However the overall trend in returns shows declining trend. Especially the returns begins to decline sharply from the third year. Though the returns of third year is more than 100%, it is worth noting that the return declines by more than 40% during this year compare to the second year.
(8) Return on Total Assets: Return on Total Assets =Profit after interest & tax * 100 Net Total Assets 2005-2006 62.79% Conclusion: Though the returns are decreasing from the year, the overall returns seems to be Remarkable till the end of fifth year. The main reason behind falling returns from the third year is decreasing profits & increasing total assets. 2006-2007 66.77% 2007-2008 46.95% 2008-2009 39.44% 2009-2010 29.44%
CAPITAL BUDGETING (1) PAYBACK PERIOD METHOD:
Year 2005-2006
Cash Inflow after Tax (Rs.) 19016920
Required Cash Inflow (Rs.) 9662110
Thus the payback period comes out to be 6.097 months i.e. 6 months & 3 days (Approximately). (2) AVARAGE RATE OF RETURN: Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Total Profit after Tax (Rs.) 19016920 19754435 15231538 14322933 11280357 79606183
Average Profit =Total Profit=79606183= 15921237 Rs. (Approximately) No. of Years 5 Average Rate of Return =Avg. Profit * 100 Total Investment =15921237 * 100 9662110 = 164.78% (Approximately).
(3) NET PRESENT VALUE METHOD:
NPV @25% Discount factor 0.8 0.64 0.512 0.4096 0.32768 Cash inflow 7463622 3070785 958437 361036 113562 Present value of cash inflow 5970897 1965302 490720 147880 37212 8612012 Outflow8029457 NPV 582555
(4) IRR METHOD :
NPV @25% Discount factor 0.8 0.64 0.512 0.4096 0.32768 Cash inflow 7463622 3070785 958437 361036 113562 Present value of cash inflow 5970897 1965302 490720 147880 37212 8612012 Outflow8029457 NPV 582555
NPV at 50% Discount factor 0.6667 0.4444 0.2963 0.1975 0.1317
Cash inflow 7463622 3070785 958437 361036 113562
Present value of cash inflow 4975996 1364657 283984 71304 14956 6710897
Outflow8029457
-1318560
I.R.R. = Lower rate + + NPV/+NPV-(- NPV)*(Higher rate-Lower rate) = 25% + 582555/582555+1318560*(50-25) = 25% + 582555/1901115*25
= 25% + 7.66% = 32.66%
SWOT STRENGTH : (1) The labour required does not require much specific qualifications and skills. (2) Less marketing is required in this field as the main marketing aspect is direct. (3) As our unit will be located in the vicinity of GIDC, infrastructural facility will be easily available and moreover we well also get support from the government. (4) As it is in GIDC area, our social duty will also be fulfills as the polluted water would be first by common effluent plant and then disposed. (5) Availability of labour is easy, cheap and is on contract basis also. WEAKNESS: (1) Huge investments at time becomes weakness for the industry and the project becomes financially infeasible. (2) Due to credit facilities given to the customers the lot of working capital gets locked up. (3) Due to developing technology in this field. It has to be a upgraded frequently, which involves high in sunk cost. OPPORTUNITIES : (1) International technical innovations can be achieved by attending different nationalized and internationalized exhibitions and conferences. (2) Creates more chances, as the world is moving towards globalization.
CONCLUSION
By conducting and extensive research on all aspects of establishingEasyFlow Enterprise,manufacturing unit, we conclude that it is defamatory feasible. There is a high potential for market growth in future. As market growth in future. As new residential, commercial and other areas are developing and going are developing and going to be developed in near future, so there is a high potential for the growth of out industry. In the end we can say that we have gained a deep insight into thePlumbing Goods Industry.We had an opportunity to learn about the nitty-gritty of issues ranging from petty once to long term policy issues. We want thank again the people without whose help this study could not be possible.
BIBLIOGRAPHY: ? ? ? ? Ahuja Girish, Systematic Approach To Taxation, 2005- 06 Kotler Philip, Marketing Management, 2003- 04 Advance Accountancy- 4 Advance Accountancy- 5
WEBOGRAPHY: ? www.cera_india.com ? www.shrutisinks.com ? www.niralisinks.com SEARCH ENGINES: ? www.google.com ? www.yahoo.com ? www.msn.com
doc_793970716.docx