Description
Spices are distinguished from herbs, which are parts of leafy green plants also used for flavoring or as garnish.
“WITHOUT WHICH YOUR FOOD IS INCOMPLETE”
A FEASIBILITY REPORT ON SPICES
REPORT PRESENTED BY GROUP - K
K.S.SCHOOL OF BUSINESS MANAGEMENT GUJARAT UNIVERSITY, AHMEDABAD-380009
CERTIFICATE
This is to certify that members ofgroup “K” of Third Year MBA of K.S.SCHOOL OF BUSINESS MANAGEMENT have successfully completedtheir feasibility report on SPICES for the Academic Year 2010-2011 and have duly submitted to the institute.
Date of submission: 10-3-2011 Project Guide : Name: Ms.Ingita Jain Sign :
K.S.SCHOOL OF BUSINESS MANAGEMENT GUJARAT UNIVERSITY, AHMEDABAD-380009
GROUP MEMBERS
Sr.No 1. 2. 3. 4. 5. 6. 7. NAME SUNILSINH RAJPUT DASHRATH MASANI ATIK DODHIYA KARAMSHI DHIYAD ANKUR CHARPOT VIKRAM HATHILA KAUSHIK RANA ROLL NO. 3127 3168 3170 3177 3235 3237 3240
INDEX
1. INTRODUCTION. ? What is feasibility report? ? History of spices. 2. PROJECT AT GLANCE. 3. ENVIRONMENTAL SCANNING. ? PEST analysis ? SWOT analysis ? Legal environment. 4. EVALUATION OF MARKET SEGMENT 5. LEGAL DOCUMENTS ? Memorandum of association. ? Article of association. ? Certificate of incorporation. 6. TECHNICAL FEASIBILITY ? ? ? ? ? ? ? ? Location analysis Process chart Process steps Plant and machinery description Machinery cost Technology selection Requirement of utilities Raw material description
7. HUMAN RESOURCE FEASIBILITY
? ? ? ? ?
Manpower planning. Organization charts. Job description and specification Workers rights. Amenities to workers.
8. MARKETING FEASIBILITY. ? ? ? ? ? ? 4P’S of marketing. Vision. Market research. Objectives of conducting a survey. Questionnaire. Consumer analysis
9. FINANCIAL FEASIBILITY. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Cost of project. Means of finance Land cost Building cost Plant and machinery cost Furniture Bank loan payment Raw material Depreciation Salary Factory o/h Office o/h S& D o/h Adm, O/H Installed Capacity Statement Cash flow statement Cost sheet
? P&L A/c ? BALANCE SHEET ? WC Requirement ? B-E-P Analysis ? Assumptions ? Ratio Analysis
10.
EVALUATION OF PROJECT ? PBP ? NPV ? PI ? IRR ? ARR
11.
CONCLUSION ? Estimate of future demand ? Bibliography ? Webography
AKNOWLEDGEMENT
We have made project report on feasibility study of SPICES in Third Year at K.S.SCHOOL OF BUSINESS MANAGEMENT and we are highly satisfied with the task of project work provided to us. We are thankful to Dr. Sarla Achuthan, Director of K.S.SCHOOL OF BUSINESS MANAGEMENT who gave us an opportunity of implying our creativity in such project work and applying theoritical knowledge into practical life. We are also thankful to our project guide Ms.Ingita Jain,who has constantly motivated us to put our best in the project. We would also like to thank all faculty members of K.S.SCHOOL OF BUSINESS MANAGEMENT for giving their valuable advice which made it possible for us to work efficiently. It is not possible to express the name individually of each and every one who helped us but we would like to express our sincere gratitude to all group members.
PREFACE
MBA is a stepping stone to management career, in order to achieve practical, positive and concert result the classroom learning needs to be efficiently fitted to the realities and the situation. Existing outside the classroom which is in the market this is particular what we learn in the management. Every study incomplete without having a well - planned and concrete exposure given to a student. Management studies are not exceptions. The study of management only as a theoretical knowledge is just like a wondering ship in ocean without a compass, so at this side it provides sound basis to adopt the theoretical knowledge and on the other hand it gives opportunity for exposes to real market situation. It gives us the basic practical experiences, which serve us a compass in the directionless ship; this enables the ship to reach its destination against all odds from all of its rivals. So, in order to inquire them about management practice which require undergoing a project. This point is given to the students for having a first hand knowledge of business activities and ads to their existing stock of information.
INTRODUCTION
? What is feasibility report?
A report which forecast or gives pre-estimation of venture with respect to different dimensions is called a feasibility report. By feasibility we mean that the venture must be practically possible with respect to the following areas of management.
? Industrial feasibility:
For manufacturing a product it is necessary for a manufacture to verify whether the industry concerned is feasible or not.
? Financial feasibility:
It must assure a fair return on the capital invested by the owner.
? Technical feasibility:
The technology required in the unit must be such that it is easily obtainable and practically feasible.
? Marketing feasibility:
Just producing is not the end but the beginning. It should be accepted by the customers and the market.
? Social feasibility:
It should not only believe from the above mentioned angles but it must also be secreting that it does not harm the society.
PROJECT AT GLANCE
Name of the Company: Product: SPICES Plot No. D 233/55, Division-A, Changodar GIDC, Ahmedabad. GUJARAT. Private Ltd RS. 60,00,000 Owners Fund and Term Loan. SUNRAJ SPICES PVT. LTD.
Factory address:
Constitution: Cost of project: Means of finance:
Payback period:3years and 1/4month Debt equity ratio: Current ratio: 2.24 77.91%
HISTORY OF SPICES
The history of spice is almost as old as human civilisation. It is a history of lands discovered, empires built and brought down, wars won and lost, treaties signed and flouted, flavours sought and offered, and the rise and fall of different religious practices and beliefs. Spices were among the most valuable items of trade in ancient and medieval times. As long ago as 3500 BC the ancient Egyptians were using various spices for flavouring food, in cosmetics, and for embalming their dead. The use of spices spread through the Middle East to the eastern Mediterranean and Europe. Spices from China, Indonesia, India, and Ceylon (now Sri Lanka ) were originally transported overland by donkey or camel caravans. For almost 5000 years, Arab middlemen controlled the spice trade, until European explorers discovered a sea route to India and other spice producing countries in the East. Spices were all imported from plantations in Asia and Africa, which made them extremely expensive. From the 8th until the 15th century, the Republic of Venice had the monopoly on spice trade with the Middle East, and along with it the neighboring Italian city-states. The trade made the region phenomenally rich. It has been estimated that around 1,000 tons of pepper and 1,000 tons of the other common spices were imported into Western Europe each year during the Late Middle Ages. The value of these goods was the equivalent of a yearly supply of grain for 1.5 million people. While pepper was the most
common spice, the most exclusive was saffron, used as much for its vivid yellow-red color as for its flavor. Spices that have now fallen into some obscurity in European cuisine include grains of paradise, a relative of cardamom which almost entirely replaced pepper in late medieval north French cooking, long pepper, mace, spikenard, galangal and cubeb. A popular modern-day misconception is that medieval cooks used liberal amounts of spices, particularly black pepper, merely to disguise the taste of spoiled meat. However, a medieval feast was as much a culinary event as it was a display of the host's vast resources and generosity, and as most nobles had a wide selection of fresh or preserved meats, fish, or seafood to choose from, the use of ruinously expensive spices on cheap, rotting meat would have made little sense.
ENVIRONMENTAL SCANNING BUSINESS ENVIRONMENT
Business environment is just like a human being. It cannot survive in alone; it is made for the people and of the people. Managers have to perform their functions in the organization the system approach of managing suggests that an organization being a subsystem of brooder social system has to work within the frame work provided by the society and its various constituents. These constituents are combining to constitute environment for a given organization. Environment includes all the condition, circumstances, and influences, surrounding and affecting the total organization or any of its part. Environment consists of atoms and molecules, agglomeration of thing in motion, alive of men and emotions of physical and social law, social ideas, norms of actions of forces and resistance their number is infinite and they are always present, they are always changing. For environmental analysis the following theoretical models are used. ? PEST Analysis ? SWOT Analysis
PEST Analysis
1. Political Environment:
Frequent changes in the central or state government lead to changes in industrial policies. This environment is composed of regulation, government spending and patent protection changes in the budget, subsidies, tax relief measures, tax structure and holidays, licensing policies may follow. Here the political factor also the affect to the SPICES processing for its maintaining quality for industry of spices.
2. Economical Environment:
Economical environment plays very important for our product which is eco friendly and our product does not affect the environment.
3. Social Environment :
It reflects as what we are giving to the society and there is also the expectation of the society towards the business. We have pollution control certificate however, the general feature for pollution control must be taking into consideration during the process of manufacturing.
4. Technological Environment:
One of the most important aspects of shaping people’s lives is technology. The COMPANY which moves with the latest technology can excel their growth.
Every new technology is a force for creative destruction. Moreover the innovative process always leads to an increase in the investment. Technological invention is introduced for higher productivity lower cost, and more revenues. Technology refers to sum total of the knowledge providing ways to do things organization must give constant consideration to the manner in which innovation may affect their product and internal efficiency.
SWOT ANALYSIS
A SWOT Analysis is requiring checking the Company’s Strength, Weakness, Opportunities and Threats. It will give the overall idea about competitor and current situation of the Company. Strength and Weakness are the Company internal characteristic that can be improved by the Company while Opportunity and Threats are the external factors which will predict the current condition of the Company to make decision.
STRENGTH
? A Company’s strength is its resources and capabilities that can be used as a basis for developing and competitive advantage. ? The increase in living standards of people, now they spend more on spices. As we are offering good quality at reasonable price so it will definitely attract customers so our venture is less risky. ? Our Company offers the high quality. ? Our target market is Gujarat which is one of the most developing states of India. ? Gujarat is immerging as an industrial hub to many growing industries. ? More and more investment means more industries, more housing and more construction. ? All this is positive sign for the spices industry to prosper. ? When we talk about spices, it has been found that following are its strengths. ? There are many players it is like a perfect competition. ? The labour does not require much specific qualification and skill.
? The spices have got a very bright future and demand will remain constant through out the year.
WEAKNESSES
? In the spices industry, the labour work on the part of workers is very tedious and laborious. Workers often complaint about the work load. ? Since there are already big players in the market, we would have to face cut throat competition in order to get the market share, ? Huge capital investment is requiring on the machineries.
OPPORTUNITIES
? ujarat which is one of the most developing states of India is emerging as an industrial hub with many growing industries like, fast malls, big buildings, residential expansion and more housing so future requirement of spices will be continuous. ? ur research and survey so that people are interested in buying of the spices which is qualitative and at the same time something which is offered at a reasonable time. This thinking matches which our Company policy to produce the best at the least. ? y using eco-friendly technology the unit may get an edge over the other players in the market
THREATS
? Competition, this is one of the biggest threats faced by all the business. ? Existence of big spices Company like RAMDEV pose tough competition for us.
SWOT MATRIX
S
Its resource and capabilities High demand
W
Huge investment already big players
O
Eco friendly technology Scope for expansion
T
Competition Supply position Unpredictable
LEGAL ENVIRONMENT
LAWS RELATING TO LABOURS:
? ? ? ? ? ? Industrial dispute act, 1947 Industrial trade union act ,1926 Industrial relation act ,1946 Industrial employment act ( standing orders ), 1946 Workmen compensation act,1923 Payment of wages act,1936
EVALUATION AND SELECTION OF MARKET SEGMENTS
Among all the patterns of market segmentation, we fall under the category of homogeneous segment because there is no any noticeable different in the products of all the manufactures ofTermeric, Black Pepper, Chilly etc. Our customers preferences do not scatter throughout the space which indicates that customers do not vary greatly in their preferences so our brand hear the corner to attract a customers group that has not been satisfied with other brands. While segmenting the market, we took the following steps. 1. We grouped the customers into segments based on their budget on spices and according to their quality and price preferences. 2. Determination of profitability of the segment finding unique customers and characteristics.
NAME:SUNRAJ SPICES PVT.LTD. LOGO:
TAG LINE: “WITHOUT WHICH YOUR FOOD IS INCOMPLETE”.
LEGAL DOCUMENTS FOR PRIVATE LTD COMPANY
? Memorandum of association. ? Articles of association. ? Certificate of incorporation of Company.
Memorandum of association of SUNRAJ SPICES PVT LTD. (Limited by shares as per section 15 of the companies act, 1956). 1. The name is SUNRAJ SPICES PVT LTD. 2. The registered office of the Company is situated in the state of Gujarat.
3. Objects of the Company:
a) Main object:
The main object of SUNRAJ SPICES PVT LTD is to manufacture spices to expand the production process for manufacturing spices in future or distribute in within India.
b)Other objects:
To enter into joint sector arrangement with any present body or corporate whether in India or abroad for the business of the Company.
To train and get trained and for pay training for the employee both present and future for and connection with business of the Company.
4. Capital clause:
It remains related to financial terms. 5.
Liability clause:
The liability of the member is limited.
6.
Association clause:
We the several persons whose names and address are satisfied are desire of being formed to companies in pursuable of this memorandum of association.
ARTICLES OF ASSOCIATION
1. SUNRAJ SPICES Pvt.Ltd. will follow the regulation contained in table a in the first schedule of the companies act, 1956. 2. No invitation shall be issued to subscribe for any share in or debenture of the companies. 3. Prohibited for from making any invitation for or acceptance from person other than its member directory of their relatives.
5. Copy of association clause
Sr.No NAME No. of equity shares of Rs.10 each 49715 49715 49715 49715 49715 49715 49715
1. 2. 3. 4. 5. 6. 7.
SUNILSINH RAJPUT DASHRATH MASANI ATIK DODIYA KARAMSHI DHIYAD ANKUR CHARPOT VIKRAM HATHILA KAUSHIK RANA
Our customers preferences do not scatter through out the space which indicates that customers do not vary greatly in their preferences so our brand hear the corner to attract a customer group that has not been satisfied with other brands.
CERTIFICATE OF INCORPORATION OF SUNRAJ SPICES PVT. LTD.
CERTIFICATE OF INCORPORATION NO.01 I hear by certify that SUNRAJ SPICES PVT. LTD is incorporated under the companies act, 1956(No. 1of 1956) and that the Company is private ltd given under my hand at AHMEDABAD first day of APRIL, 2011.
SD/NAME______________ Ass. Registrar of companies, Seal of registrar of companies, Gujarat.
TECHNICAL FEASIBILITY
Introduction
Long term growth of business and profitability are the two basic requirements of any enterprise. In the modern era of globalization without the help of Technology Company can not survive any more. Higher productivity in a competitive situation can come only from relation and control of cost, which in turn comes from improved technology. Now a day with the emergence of newer and faster technology, new innovation and technology advancement take place every now and then. In this kaleidoscopic era of competition for competing of other Company organization has to very well take care of its technology in order to meet the present emerging demands and modern requirements. Moreover, only the adoption any technology at one time cannot help the Company to survive any longer unless if does not implement it at the right time with the right intention and that too at the right place. To meet the competition more important beat the competition the companies have to upgrade their technology from time to time. The Company should be very innovative in implementing modern technology with proper care. And that is what is being adopted at our organization with full consciousness. We are equipped with high technology oriented machineries, it help us to enhance the quality of our product.
LOCATION ANALYSIS
The Selection of location plays a vital role for the growth. We have decided to establish our production unit and marketing department in AHMEDABAD only. The address is as follows:
Plot No. D 233/55, Division-A, Changodar GIDC, Ahmedabad. GUJARAT. Reasons for selecting the side:
1. Land of Changodar GIDC is cheaper than compared to other areas. 2. Changodar GIDC is in Ahmedabad and Ahmedabad is connected with all the leading cities of Gujarat as well as of other states hence delivery of the goods is convenient and fast. 3. It is very easy to get raw materials and transportation cost is also gets lower because of the same. 4. Other big spices companies are also located at the same place that is why labour is trained and cheaper in that area. 5. Natural gas is also easily available in that area.
The process chart of steps for manufacturing of spices:
1)RAW MATERIAL:
(cleaned , washed , dried etc….)
2)DISINTIGRATOR:
(converting solid into small pieces…)
3)GRINDING MACHINE:
(converting pieces into powder form…)
4)WEIGHING SCALES :
(weighing of spices….)
5)
PLASTIC SEALING MACHINE:
(packaging of spices……)
6)
WARE HOUSES:
(storing of spices……)
PROCESS explanation
The manufacturing process is very well established and does not involve technicalities. Unground spices are cleaned manually to remove impurities like mud and stones and are then washed in water. After drying them in sunlight, they are graded and ground with the help of grinding machine to convert them in powder form. Disintegrator is used in case of solid material like turmeric to obtain uniform mesh size. Spices in powder form are then weighed as per t he contemplated packing quantities and packed in printed polythene bags and then these bags are sealed on automatic sealing machine.
PHOTOGRAPHS OF MACHINES
Machinery Name: DISINTEGRATER
Price: Rs.180000/unit Usages: grinding of soft and medium hard products.
Machinery Name: SPICE GRINDING MACHINE
Price: Rs.40000/unit Usages: Grinding of SPICES.
Machinery Name: PLASTIC SEALING MACHINE
Price: Rs.6000/unit Usages: Packaging of product.
Machinery Name: WEGHING SCALES
Price: Rs.2000/unit Usages: Weighing of product.
MACHINERY COST
S.R.NO. NAME OF MACHINE NO.OF MACHINE RATE OF MACHINERY AMOUNT
1. 2. 3 4
Disintegrater Spice Grinding machine Plastic Sealing machine Weighing Scales TOTAL
4 4 6 12
190000 45000 6000 2000
760000 180000 36000 24000 1000000
TECHNOLOGY SELECTION
Basically there are two types of production techniques are available. 1. Capital intensive 2. Labour intensive.
CAPITAL INTENSIVE
For the machineries, only operators are required. The whole process is automatic right from casting of raw material in a lower fixed cost and preparing the final product. Capital input resulting in a lower fixed cost and lower cost. This type of substitution often occurs in economic with in expensive labour or raw material and higher interest rate of capital.
LABOUR INTENSIVE
Here, labours are employed for running machineries as well as assembling the parts. Labours are well trained to run machinery efficiently.
REQUIRENMENT OF UTILITIES:
?? POWER: Power facilities available for 24 hours from torrent power. In our unit, most of all the machines run through power for spices. Besides we have generator which is capable to provide electricity for the whole day if necessary. ?? STORAGE SYSTEM: For spices we have our storage department for raw material and in another storage department we keep our finish goods and in the same we do packaging. ?? COMMUNICATION: The present scenario of changing business environment effective and uninterrupted communication is the key to all human activities. Keeping in view technological changes and speedy communication we have installed various instruments like telephone, computer, internet etc. ?? FIRE SYSTEM: In factory we will instal fire equipments in order to face any eventuality, the Company keep one set of first aid appliances as per provision of factory act.
RAW MATERIAL DISCRIPTION FOR SPICES
? Item : Turmeric Suppliers: J D industry Rate: Rs. 35000 per ton Place: Meghalaya ? Item : Black Pepper
Suppliers: Raj Enterprises Rate: Rs. 60000 per ton Place: Meghalaya
? Item : Chilly
Suppliers: J D industry. Rate: Rs. 10000 per ton Place: Meghalaya
MAN POWER PLANNING
It is the man behind machine that wins the war and not merely the machine. Capital strategy and research and development do not always work and when they do not work what we can fall back on is our human power, human resource and human talents that the Company is having. For any industry organization like machine, manpower is also the consider one of the most important aspect which play a vital role for its overall growth and development and hence our organization is also based on the same concept or principal.
We would definitely create the feelings of oneness into the employees towards the organization through various training program .Thus we would consider and implementing. The concept, people are primer source of competitive advantage. We are medium scale organization .We are having a great organization structure.
ORGANIZATIONAL CHART
Directors
Managing Director
Finance Manager
Marketing Manager
Production Manager
Personnel Manager
Accountants
Sales Executive
Quality Control Manager
Clerks
Technician
Supervisor
Skilled Workers
Unskilled Workers
MANAGING DIRECTOR
JOB DESCRIPTION Job title Reporting to Supervises to Functions Managing director Board of directors The Company performance overall. Day to day operation of business Monitoring, implementation of policies & plans. Expense control & cost control. To evaluate an approved / disapproved the purpose budgets by marketing manager & production manager for various plans. To check loopholes & implement corrective measure. To hold meeting whenever necessary for above function. Maintain co-ordination between various departments of organization. To maintain cordial business contacts. To direct manager of marketing, finance, production & personnel Responsible for major faults made by middle level made by middle level management. Laptop.
Duties, Responsibility & Authority
Equipments
JOB SPECIFICATION Job Title Education Skill Requirement Managing director. MBA / PGDM from a reputed institute. Innovative, knowledgeable about marketing trends, economic trends. Good communication skills. Good analytical & reasoning skills. Sound health. At least 3-4 years in a similar role.
Physical Health Experience
FINANCE MANAGER
JOB DESCRIPTION Job title Reporting to Supervises to Functions Finance manager. Managing director. Accountants. To make proper policies for sound condition of Company. To provide appropriate rate of depreciation, reserve & surplus. To ascertain budgets fop all plans & projects. To decide upon investment of funds of the Company. To check discrepancies in Company's financial records. To ensure optimum & fair use of Company's financial resources’. To co-ordinate well with an accountants & director. Analyze financial position at regular intervals. Laptop.
Duties, Responsibility & Authority
Equipments
JOB SPECIFICATION
Job Title Education Skill Requirement
Physical Health Experience
Finance manager. MBA with finance /C.A. Sharp & speed in calculation. Good analytical skill. Decision making ability. Should have depth knowledge of taxation, Companies act. Smart & fit. At least 2 years in a similar role.
MARKETING MANAGER
JOB DESCRIPTION
Job Title Reporting to Supervises to Functions
Duties, Responsibility & Authority
Marketing manager. Managing director. Salesman. To Plan marketing & advertising strategies. To determine the target segments. To estimate ads budget out of total fund. Motivating marketing team Building the brand in the market. Responsible for effective competitive strategy implementation. To create good loyalty for the product in the market. To maintain market of the product. Laptop
Equipments
JOB SPECIFICATION Job Title Education Skill Requirement Marketing manager. MBA with marketing from recognized institute Innovative, knowledgeable about marketing trends, economic trends. Good communication skills Good analytical & reasoning skills Good communication skill Capable of analyzing different market trends. Should be creative, polite & humble. Smart energetic. 2-3 years for similar position
Physical Health
Experience
PRODUCTION MANAGER
JOB DESCRIPTION Job Title Reporting to Supervises to Functions Production manager Managing director Production department Try to apply innovative method To achieve production target in specified period To arrange manpower & other sources for production. Planning, have a control over the process & check the deviations. To co-ordinate with administrative department for implementation of policies &plans. Responsible for production schedules & arrangement of labours. Regular check of stock purchase & manpower condition. Laptop
Duties, Responsibility & Authority
Equipments
JOB SPECIFICATION Job title : Education: Skill Requirement: Production Manager. Graduate in mechanical engineer from reputed institute. Capable of leading tem of workers. Good communicaication skill & ability to undertake work from subordinates. Energetic, hard work. At least 3 Years.
Physical Health: Experience:
PERSONNEL MANAGER
JOB DESCRIPTION Job title Reporting to Supervises to Functions Personnel Manager. Managing director. Human resource department. To Frame motivational leading and communication policy and strategies. To keep an eye on employee's work. He will be responsible for any decision on salary ,administration, maintaining employee discipline and welfare services &resolve grievances. Laptop.
Duties, Responsibility & Authority
Equipments JOB SPECIFICATION Job Title Education Skill Requirement
Physical health Experience:
Personnel Manager. MBA /PGDM in HR. Impartial attitude towards all employee & must posses’ leadership qualities. Sound health, good presence of mind & co-operation. Minimum 1 year in the relevant field.
SALES EXECUTIVE
JOB DESCRIPTION
Job title Reporting to Functions
Sales executive. Marketing manager. To carry out all operations for the implementation of advertising plans & promotion plan decided by marketing manager. To act as bridge between marketing manager & customer. To achieve the target. Responsible for any customer or dealer's complaint about his service.
Duties, Responsibility & Authority
JOB SPECIFICATION Job Title Education Skill Requirement Sales executive. Diploma in marketing. Knowledge of surrounding market. Should have innovative ideas Good command on at least three languages namely Gujarati, Hindi and English. Ability to convience people. Good co-operation ,good present of mind 1year or fresher can also apply.
Physical Health Experience
WORKERS
JOB DESCRIPTION Job Title Reporting to Functions Workers. Production manager. To Perform work effectively given by executives. To work with co-operation. Follow instructions of supervisors. To inform manager immediately for any kinds of defaults.
Duties, Responsibility & Authority
JOB SPECIFICATION:Job Title Education Skill Requirement Workers. 12th standard pass or ITI. Technical knowledge a bought their work and machines should be able to do the job Assigned to them. Capable of working at least 8 hours. Not necessary.
Physical Health Experience
WORKER'S RIGHT
? WEEKLY HOURS 48 hours a week for all workers. ? THE NOTICE PERIOD OF WORK We can refuse to employ a worker for any day for which he has been given the prior notice. ? ANNUAL LEAVE WITH WAGES An adult worker is entitled to one day paid, Leave for every twenty days of work. Half or more than Half day's worker is counted as full day’s work. This Earned excludes. ? HOLIDAYS The worker is entitled to average monthly wages Maximum earned. If the employer terminates the service of the worker who has to his credit earn leave, and then he shall pay the average daily wages in respect of the leave not taken. (Sec.30-31) ? CAPITAL SAVING TECHNOLOGY This is the opposite of automation where a lower Cost variable input such as raw material or direct labour is substituted for a higher cost capital input resulting in a Lower fixed cost and lower total cost. This type of substitution often occurs in economic within experienced labour or Raw material and higher interest rate of capital.
?
AMENITIES TO WORKERS The amenities provided to the workers at the work place As under. ? Drinking water ? Lavatory ? First aid box ? Other facilities 1. DRINKING WATER We have made effective arrangement to provide wholesome drinking water for all workers. We have placed "Ro Plant" with facilities of hot and cool water. 2. LAVATORY There are sufficient no.of conveniently suitable and accessible toilets. All of them are maintain in clean and sanitary condition. They are in a cubical or room fitted with a door. There is a proper circulation of air and an adequate supply of water and fresher. 3. FIRST AID BOX
? ? ?
Workers have reasonable access to appropriate & adequate first aid equipment. The equipment of first aid is maintained in a separate. Respective medicines for different purpose are maintained separately & market in Gujarati which is understood by most of all the workers and employees.
4. OTHER FACILITIES We also provide umbrellas, blankets, rain coats & other amenities for the protection of workers from rain or cold.
MARKETING FEASIBILITY
Marketing mix is an important concept in the modern marketing. It consists of 4Ps that is Product, Price, Promotion and Place. So it is known as 4Ps of marketing mix. It represents the seller’s view of marketing tools available for influencing or enrolling the buyer to opt for their product MARKETING MIX
Product
Price
Place
Promotion
PRODUCT
“Product is a key element in the offering” our product is spices. There are various levels of any product which can be explained as under:
? Core benefit: Core benefit is the basic product or benefit which the consumer is really buying. The core benefit that our Company is going to provide spices to customers. ? Basic Product: At the second level, the marketer has to turn the core benefit into a basic product. The basic product that our Company is going to give its customer isQUALITATIVE SPICES. ? Expected Product: An expected product is a set of attributes and conditions, which the buyers normally expect when he purchases the product. Here in our product has variety in terms of colors and test packagings etc.
? Augmented Product: The augmented product that our Company will provide in the market is various variants of spices such as Termeric, chilly,Black pepper etc with proper colors and test. ? Potential Product: A potential product is the maximum possible level up to which a Company can provide the augmented and expected product in future. Innovation plays large and important part in this type of product. It is important for the producers at this stage to invest in research. We have created our website for selling of the product and that is www.sunrajspices.com.
PLACE
With the faster communication, transportation and financial flow, the world is rapidly shrinking. Products developed in one country are finding enthusiastic acceptation in other country also with the emergence of a computer world; it has become even easier to market the product from one place to another. Moreover in this competitive era the Company has to make its product available at the nearest place in order to make it convenient for the consumer. After all “Customer is the King” of the market who is to purchase the product and to decide the Market shares. Marketer should make the product available at as many places as possible so that it can easily attract the consumer and increases market share by a way of selling it to them. The seller needs to select appropriate place for manufacturing a product in such a way that it fulfills the criteria of availabilities to the prospective and present buyers. (1)LOCATION FACTORY
Plot No. D 233/55, Division-A, Changodar GIDC, Ahmedabad. GUJARAT.
(2) COVERAGE The coverage of SUNRAJ SPICES has been extended in the whole of Gujarat state through its dealers network and has one spices manufacturing unit at AHMEDABAD. (3) DISTRIBUTION CHANNEL Distribution means making available right product, at a right place in right quality, at a right time in right condition by the most effective mode. DISTRIBUTES CHANNEL OF SUNRAJ SPICES: Plant location ? Storage ? Dealers ? Retailers ? Customers
Territories:
We have planed to open 3 branches at 3 different places. 1) Palanpur, 2) Visnagar, 3) Vijapur
1) 31, Shreeji Market Char-rasta Visnagar Pin:384315
2)
15,Satelite Shopping Center Gurunanak Chock Palanpur Pin:385001
3) 27, Maniratan Complex T.B Hospital Road Vijapur Pin:382870
PRICE
Price means consideration for any goods or services which the customers pays to the producer. Price is the only mix in the marketing mix which generated revenues for the Company. In order to arrive at the most acceptable price level the marketer needs to have information of 3 C’S. 1. Customer. 2. Competition. 3. Cost structure. ? Customer The product SPICES are required by people for cooking foods. hence our Company has decided such a price as suits to every one to maximize its market share. ? Competition The price of SPICES has been so decided or kept lower than its competitors so as to penetrate the whole market otherwise the Company would not be able to grasp the maximum benefits from the markets. ? Cost structure The Company has arrived at such a price that does not give it any kind of losses. The optimum cost structure has been adopted that enables the Company to earn reasonable profit. The over leaf are the factors affecting the price of product: ? ? ? ? ? Marketing Objects Marketing mix strategy Cost Nature of marketing Demand
? Government
PRICE QUOTATIONS OF SPICES AT SUNRAJ SPICES
Particulars Price /ton
Turmeric Black pepper Chilly PACKAGINGS :250GM PARTICULARS SUNRAJ turmeric SUNRAJ black pepper SUNRAJ chilly PACKAGINGS :500GM PARTICULARS SUNRAJ turmeric SUNRAJ black pepper SUNRAJ chilly PACKAGINGS : 1kG PARTICULARS SUNRAJ turmeric SUNRAJ black pepper SUNRAJ chilly
Rs.55000 Rs.100000 Rs.75000
RS 15 25 20
RS 30 50 40
RS 60 100 80
Promotion
Promotion is the term taken From the Latin word “Prom over” Which means moving from one end to another. In marketing, Promotion means all those tools through which the marketer communicates its Products to the customer. It also includes different means that he uses to increase the service of its products. PROMOTION TOOLS Advertising Sales promotion Public relation Personal selling Direct marketing
? ADVERTISING
“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 trade magazines, Business publications, News paper, Television, wall painting, yellow pages and circulars sent through the mail. Advertising agencies have always been intermediaries between and the mass media. But we have industrial buyers like dealers only in which our products are used as intermediate goods. They will attract towards the product by discount rates, quality, commission, and durability along with the advertisement.
5 M’S OF ADVERTISING Mission Media Money Message Measurement
(1) Mission:
To create dealer’s and consumers awareness. To create a favorable Company image. To encourage immediate sales.
(2)Money: Decide the Advertising Budget Deciding about the advertising budget depends upon the following factors: a. Stage in product life cycle. b. Market share and consumer base. c. Competition. d. Advertising frequency. In our product the prices of advertising are as follows: Pamphlets at Rs 1000 per 5000 copies in local area. Catalogue at Rs 20. Television at Rs. 10,00,000 for 2 minute advertisement a day in etv guj.
(3)Media: Pamphlets Yellow pages Catalogue
Television Wall Paintings News papers Hoardings
(4)Message: The message selection depends upon the following criteria: Message generation. Message evaluation and selection. Message execution. Our message is “WITHOUT WHICH YOUR FOOD IS INCOMPLETE”. (5) Measurement: The demands for our products have been increased during 5 years and advertising is one of the reasons for that. Thus good planning and control of advertising can increase the sale of the product.
Vision
? ? ? ? ? To pursue excellence in quality with the futuristic approach. To keep abreast of changing consumer perception. To provide comprehensive value for money to our deserving consumers. An aggregate commitment towards quality through technical and Professional perfection. A steadfast dedication to qualify attainment of maximum satisfaction.
MARKET RESEARCH PROCESS
1. DEVELOP THE RESEARCH PLAN The next step of marketing research is to develop a step by step plan regarding decision factors like source of data, data collection method, sampling plan and contact method. SOURCES OF DATA The data sources can be primary and secondary we have used both. PRIMARY DATA Primary data are the raw data and structures of variables that have been specifically collected and assembled for a correct information research problem. Our research for primary source consists of companies own records. We visited the manufacturing units of spices to get information. SECONDARY DATA The information that is collected from contractors, dealers of spices.
Data collection method
Research Approaches
1. Observational research 2. Focus groups method 3. Survey method 4. Behavioral research 5. Experimental research
We used the survey research through questionnaire and behavioral data by analyzing manufacture, dealers and consumers.
Research Instruments 1. Questionnaire 2. Psychological tools 3. Mechanical devices 4. Quantitative measures The measure research instruments that we used were Questionnaires of Dealers and Consumers. Sampling plan The marketing researcher must design sampling plan which consist of three components such as: Sampling unit: Dealers of Ahmedabad , Consumers of Ahmedabad. Sample size: 50 dealers. 100 consumers. Sampling procedure: For dealers, random sampling. For consumer, selective sampling.
CONTACT METHOD There are various ways, mail, and telephone, personal or online interview to contact the people. But we use only direct contacts with the dealers and consumers for filling questionnaires.
1. Collect the information The data collection phase of marketing research is generally the most expansive and the most prone to error. In case of consumer’s survey, we have faced some problem because of having selected selective sampling procedure for consumers, we had some difficulties in finding selected consumes. Though collecting the information is mostly prone to error we have tried our best to cover all possible aspects so that research will be able to give us correct idea of current scenario. 2. Analysis of the information The data collected in the previous stages have to be arranged properly and orderly. They have to be carefully processed and edited so as to make a comparative study.
OBJECTIVES OF CONDUCTING A SURVEY
Surveys are best suitable way for descriptive research. Companies undertake survey to learn about people's knowledge, belief, preferences and satisfaction. It requires development of a survey instruments, usually a questionnaire which the respondent is asked to fill up. When one Company enters in the market, it requires identifying specific Objectives which is the basic of Company's position in the market. Our Main short term objectives before entering into the market will be: (1) Create awareness regarding the product spices in future. (2) Get our new Company to the notice of consumers and dealers. Long term objectives (1) Improve and matches qualify level to get customer satisfaction. (2) Maximizing the profit.
QUESTIONNAIRE
Dealer survey
K.S.SCHOOL OF BUSINESS MANAGEMENT
Subject: Market survey Questionnaires for identifying the preference and satisfaction level of dealers for the product Spices by the students of third year M.B.A. 1. Name of the dealer’s COMPANY: ___________________________________________________.
2. Dealer’s Name:____________________________________________.
3. Address: ____________________________________________________ __________________________________________________________. 4. Since how many years are you in field of spices industry? [ ] less than 5 years. [ ] 5 to 10 years. [ ] more than 10 years.
5. Which type of Spices do you sell? (Please name them along with their approximation prices).
No. 1. 2. 3. 4. Turmeric Black pepper Chilly
Type
Price
Any other (please mention below)
6. Which is your highest selling type of Spices among all of the mentioned above? (Quantity and amount). Give the details as per the preferences of customers. No. 1 2 3 4 Type Quantity Price
Give the reasons of preferences above mentioned:
________________________________________________________.
7. What is your average monthly turnover? ________________________________________________________.
8. Do you directly purchase spices from the Company or is there any intermediary? Yes [ ] No [ ] If yes please mention the name: _______________________________________________________. 9. Is there any noticeable hike over the turnover during any particular season? Yes [ ] No [ ] If yes then in which month or season? _______________________________________________________. 10. What is the profit margin per unit of spices? 0-5% [ ] 6-10 [ ] More than 10% [ ]
11. Who are your customers? Mention below: Consumers [ ]
Institutional buyers
[ ]
Any other______________________________________. 12. As per your experience which are the factors that customers mostly considers while purchasing Spices? Price [ ] Attractive offers [ ] Quality [ ] Size [ ] Any other _____________. 13. Have you ever come across any complaint from your customers? Yes [ ] No [ ] If yes mention the complaint easy availability [ ]
14. Are you giving any kind of advertisement? Yes [ ] No [ ] If yes mention the medium. T. V. [ ] Radio [ ] Hoardings [ ] Newspaper [ ] Any other______________________________. 15. Does the Company help you in advertising? Yes [ ] No [ ]
If yes mention the types of help. _________________________________________________________ 16. Would you like to give any suggestion? _________________________________________________________
Thank You…
FINDINGS
1. YEARS IN THE FIELD OF SPICES INDUSTRY.
Less than 5 years 5 to 10 years Mora than 10 years
10 17 23
Interpretation :
The number of dealer is 50. We found out that majority of dealers dealing in this business are more than 10 years.
2.WHICH TYPE OF SPICES DO YOU SELL ?
TYPES TURMERIC BLACK PEPPER CHILLY
Below 200 10 14 6
200-400 12 15 10
400-600 3 4 0
>600 5 6 0
16
14
12 10 8 6
4
TURMERIC BLACK PEPPER CHILLY
2 0 Below 200 200-400 400-600 >600
Interpretation :
We found out that majority of dealers sell product in between 1000 ton to 2000 ton.
3.WHAT IS YOUR AVERAGE MONTHLY TURNOVER ?
TURNOVER 50 TO 100 LAC 100 TO 150 LAC 150 TO 200 LAC 200 TO 250 LAC 250 TO 300 LAC ABOVE 300 LAC DEALERS 20 10 8 6 4 2
Interpretation :
We found out that majority of dealers have turnover between 50 to 100 lacs.
4.DO YOU PURCHASE SPICES FROM THE COMPANY?
YES NO
36 14
Interpretation :
We found out that majority of dealers directly purchase spices from companies.
5.IS THERE ANY NOTICEABLE HIKE OVER THE TURNOVER ANY SEASON ?
YES NO 16 34
Interpretation :
We found out that majority of dealers do not notice hike over turnover during any particular season.
6.WHAT IS THE PROFIT MARGIN OF SPICES ?
0-5% 40 6-10% 10
Interpretation :
The range of profit margin for the spices business is between 0-5%.
7.WHO ARE YOUR CUSTOMERS ?
ONLY CUSTOMER 10
ONLY INSTITUTIONAL CUSTOMERS 10
BOTH 30
ONLY CUSTOMER ONLY INSTITUTIONAL CUSTOMERS BOTH
Interpretation :
The customers for spices business are both customer and institutional customers like hotels, catering etc.
8.WHICH ARE THE FACTORS THAT CUSTOMERS MOSTLY CONSIDER WHILE PURCHASING SPICES ?
FACTORS Price Quality Size Easy availability Attractive offers NO. OF DEALERS 30 20 14 17 4
NO. OF DEALERS
30 25 20 15 10 5 0
NO. OF DEALERS
Interpretation :
Customers mostly prefer price, quality, size while purchasing spices.
9.ARE YOU GIVING ANY ADVERTISEMENT ?
YES NO 29 21
35 30 25 20 Column F 15 10 5 0 YES NO
Interpretation :
We found out that majority of dealers are advertising their product by way of hoardings.
10.DOES THE COMPANY HELP YOU IN ADVERTISING ?
YES NO 11 39
45 40 35 30 25 20 15 10 5 0 YES NO Column F
Interpretation :
We found out that Gnerally,company does not help to give an advertisement.
QUESTIONNAIRE Consumer’s survey
K.S.SCHOOL OF BUSINESS MANAGEMENT
Subject:Market survey Questionnaires for identifying the preference
and satisfaction level of consumer’s for the product Spices by the students of third year M.B.A. 1. Name: _____________________________________. 2. Occupation: _______________________________.
3. What is the general size of spices you mostly purchase? Turmeric : ____________________________________. Black pepper : ____________________________________. Chilly : ______________________________________. Any other____________________________________.
4. How much spices do you purchase in a month? Turmeric : ____________________________________. Black pepper : ____________________________________. Chilly : ______________________________________.
Any other____________________________________.
5. Which factor do you mostly consider while purchasing the spices? Price Quality
[ ] [ ]
Discount scheme [ ] Durability [ ]
Easy availability [ ]
6. Mostly from which source do you come to know about spices? News paper [ ] Hoardings [ ] T.V. [ ] Sales representatives [ ]
7. What is your satisfaction level as far as the following factors are concerned in regards to the spices you are using? ( ?)
Factors
Highly satisfied
Satisf ied
neutral
Dissatisfied
Highly Dissatis fied
Price Quality Easy availability Durability Discount
8. Would you like to give any suggestion? _________________________________________________________
Thank You
1.GENERAL SIZE OF SPICES YOU PURCHAES MOSTLY.
SPICES TURMERIC BLACK PEPPER CHILLY 250GM 16 48 14 500GM 34 36 28 1000GM 50 16 58
70 60 50 40 30 20 10 0 1 2 3
TURMERIC BLACK PEPPER CHILLY
Interpretation :
We found out that Customers buy black pepper in 250gm and turmeric and chilly in 1000gm.
2.HOWMUCH SPICES YOU PURCHASE IN A MONTH (Gm) ?
SPICES TURMERIC CHILLY Below 250 16 18 250-500 52 18 58 500-1000 18 14 14 above1000 14 12 10
BLACK PEPPER 56
70 60 50 40 30 20 10 0 1 2 3 4
TURMERIC BLACK PEPPER CHILLY
Interpretation :
We found out that Customers buy black pepper in 250gm and turmeric and chilly in 250 to 500gm in a month.
3.WHILE PURCHASING SPICES WHICH FACTOR YOU MOSTLY CONSIDER ?
FACTORS PRICE QUALITY EASY AVAILIBILITY DISCOUNT DURABILITY NO. OF RESPONDENTS 80 48 14 20 12
NO. OF RESPONDENTS
PRICE
QUALITY EASY AVAILIBILITY
DISCOUNT
DURABILITY
Interpretation :
We found out that Customers mostly prefer price,quality while purchasing spices.
4.FROM WHERE DO YOU GET INFORMATION ?
SOURCE OF INFORMATION NEWS PAPER T.V SALES REPRESENTATIVE HOARDINGS NO. OF RESPONDENTS 28 32 18 56
NO. OF RESPONDENTS
NEWS PAPER
T.V
SALES REPRESENTATIVE HOARDINGS
Interpretation :
We found out that Customers get the information about spices from news papers, hoardings etc.
5.SATISFACTION LEVEL AS FAR AS FACTORS.
FACTORS PRICE QUALITY HIGHLY SATISFIED 16 30 SATISFIED 30 14 28 26 14 NEUTRAL 40 38 14 24 22
PRICE
DISSATISFIED 10 14 4 10 20
HIGHLY DISSATISFIED 4 4 0 2 2
EASY 54 AVAILIBILITY DURABILITY DISCOUNT 38 8
40 35 30 25 20 15 10 5 0 HIGHLY SATISFIED SATISFIED NEUTRAL DISSATISFIED HIGHLY DISSATISFIED
PRICE
Interpretation :
We found out that MOST OF Customers are highly satisfied in easy availibility and neutral in price.
COST OF PROJECT
(Rs. In lacs)
A S S E T S PLANT & MACHANIRIES PLANT & MACHANIRIES LAND & BUILDING
RS.
RS.
10.00 37.00
FURNITURE & FICTURES
4.20
MISC.ASSETS
1.00
Pre-operative and Preliminary Expense
0.50
Contingency Workin Capital Margin
3.30 4.00
60.00 TOTAL
MEANS OF FINANCE
(Rs. In lacs)
SOURCES CAPITAL CONTRIBUTION RS. 34.80 34.80 RS.
BANK FINANCE - TERM LOAN
25.20 25.20
TOTAL
60.00
60.00
COST OF LAND
PARTICULARS SQ.FT RATE TOTAL(RS)
Cost Of Land Docu. Charges Other Charges TOTAL
5000
300
1500000 150000 50000 1700000
COST OF CONSTRUCTION
PARTICULARS
SQ.FT
RATE
TOTAL(RS)
CONSTRUCTION COST TOTAL
2500
800
2000000
2000000
COST OF PLANT & MACHINERY
NO. PARTICULARS QTY. PRICE TOTAL(RS)
1 2 3 4
DISINTEGRATER SPICE GRINDING MACHINE PLASTIC SEALING MACHINE WEIGHING SCALES TOTAL
4 4 6 12
190000 45000 6000 2000
760000 180000 12000 24000 1000000
COST OF FURNITURE
PARTICULARS QUANTITY PRICE
(Rs.) AMOUNT
Sofa set Revolved Chair Comfort Chair Cabin Table Cupboard Dustbin Air Condition Lights Ceiling Fans Exhaust Fan Dinning Table Electrification Others TOTAL
3 20 8 9 2 10 6 70 10 15 2
5000 1500 1000 2500 5000 100 20000 300 1200 1200 2000
15000 30000 8000 20000 10000 1000 120000 21000 12000 18000 4000 150000 11000 420000
BANK LOAN PAYMENT
Rs.in thousand
Term Loan Interest & Repayment Loan Amount Rate of Interest Installments Repayment mode YEAR QUARTER OPENING 1ST YEAR I st April May June July August September October November December January February March 2ND YEAR 2520 2478 2436 2394 2352 2310 2268 2226 2184 2142 2100 2058 42 42 42 42 42 42 42 42 42 42 42 42 504 2478 2436 2394 2352 2310 2268 2226 2184 2142 2100 2058 2016 25.2 24.78 24.36 23.94 23.52 23.1 22.68 22.26 21.84 21.42 21 20.58 274.68 Monthly 60 Monthly Installments PRINCIPAL INST. YR.REPAY CLOSING INTEREST AMOUNT YR.INTT. 2520 12 with no moratorium 42
II nd
April May June July August September October November December January February March 3RD YEAR
2016 1974 1932 1890 1848 1806 1764 1722 1680 1638 1596 1554 1512 1470 1428 1386 1344 1302
42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 504
1974 1932 1890 1848 1806 1764 1722 1680 1638 1596 1554 1512 1470 1428 1386 1344 1302 1260
20.16 19.74 19.32 18.9 18.48 18.06 17.64 17.22 16.8 16.38 15.96 15.54 15.12 14.7 14.28 13.86 13.44 13.02 214.2
III rd
April May June July August
September
October November December January February March 4thYEAR IVth APRIL May June July August September October November December January February
1260 1218 1176 1134 1092 1050 1008 966 924 882 840 798 756 714 672 630 588
42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 504
1218 1176 1134 1092 1050 1008 966 924 882 840 798 756 714 672 630 588 546
12.6 12.18 11.76 11.34 10.92 10.5 10.08 9.66 9.24 8.82 8.4 7.98 7.56 7.14 6.72 6.3 5.88 153.72
March 5TH YEAR V th April May June July August September October November December January February March
546
42
504
504
5.46
93.24
504 462 420 378 336 294 252 210 168 126 84 42 Principal Repayment
42 42 42 42 42 42 42 42 42 42 42 42 504 2520
462 420 378 336 294 252 210 168 126 84 42 0
5.04 4.62 4.2 3.78 3.36 2.94 2.52 2.1 1.68 1.26 0.84 0.42 Interest 32.76 768.6
RAW MATERIAL
RAW MATERIAL COST @ 100%
S.N. ITEM QTY. RATE RS
35000 60000 10000
TOTAL (LACS)
128.5 63 15.7 207.2
1
TURMERIC
367.5 105 157.5 630
2 BLACK PEPPER 3 CHILLY TOTAL
R.M.CONSUMED
(Rs. In lacs) YEAR 1 2 3 4 5
RAW MATERIAL TOTAL
(Rs. In lacs)
120 120
130 130
140 150.00 160.00 140 150.00 160.00
R.M.PURCHASE
YEAR RM CONSUMED ADD :-CL ST OF RM LESS :- OP ST RM PURCHASED 1 120 12 0 132 2 130 18.5 12 136.5 3 140 20.5 18.5 142 4 150.00 22.5 20.5 152.00 5 160.00 24 22.5 161.50
POWERCOST
RS IN LACS)
YEAR
1
2
3
4
5
POWER COST
4.32
4.68
5.04
5.4
5.76
TOTAL
4.32
4.68
5.04
5.4
5.76
PACKINGCOST
(Rs. In lacs)
YEAR
EXPECTED SALES
RS 500/TON
1
1.8
2
1.95
3
2.1
4
2.25
5
2.4
TOTAL
1.8
1.95
2.1
2.25
2.4
DEPRECIATION
Depreciation as Per Income Tax Act :
(Rs. In lacs)
Rate 0.15 0.1 0.1 0.6 0 Opening Block Less
epreciation Closing Block
Gross Block Plant & Machinery Building Furniture & Fixture Other Fixed assets LAND
cost 10 20 4.2 1 17
1 8.5 18 3.78 0.4 17 52.2 4.52 47.68
2 7.23 16.2 3.4 0.16 17 47.68 3.69 43.99
3 6.15 14.66 3.06 0.06 17 43.99 3.14 40.85
4 5.23 13.12 2.76 0.02 17 40.85 2.72 38.13
5 4.45 11.8 2.48 0.008 17 38.13 2.39 35.74
SALARY STRUCTURE
DIRECT WAGES
PARTICULARS
NO. OF NO. OF WAGES/MNTH TOTAL(P.A) MONTH PERSON SUPERVISOR 12 2 8000 192000 SKILLED WORKER 12 9 6500 702000 UNSKILLED WORKER 12 24 3500 1008000 TOTAL 1902000
ADMINISTRATION &SELLING STAFF
PARTICULARS M.D FIN.MGR MKT.NGR SALES EXECUTIVES ACCOUNTANT WATCHMAN TOTAL COST/MNTH TOTAL COST/ANNUM NO.OF EMPLOYEE 1 1 1 4 1 2 SALARY TOTAL PER MNTH 40000 20000 15000 7000 10000 2500
40000 20000 15000 28000 10000 5000 118000
14.16 LACS
FACTORY OVERHEADS
(Rs. In lacs)
PARTICULAR Power cost Stores & spares Repairs & Maintenance Packing Cost Depreciation TOTAL
1 4.32 0.3 0.45 1.8 4.52 11.39
2 4.68 0.47 0.5 1.95 3.69 11.29
(Rs.)
3 5.04 0.5 0.53 2.1 3.14 11.31
4 5.4 0.6 0.57 2.25 2.72 11.54
5 5.76 0.7 0.63 2.4 2.39 11.88
SELLING AND DISTRIBUTION OVERHEADS
PARTICULARS Salary(+5%) Advertising Expenses Discount(2%) Transportation Cost TOTAL
1 516000 100000 486000 60000 1162000
2 541800 240000 526500 86100 1394400
3 568800 400000 567000 137000 1672800
4 597300 600000 607500 202500 2007300
5 627200 800000 648000 333600 2408800
ADMINISTRATIVE OVERHEADS
(Rs.)
PARTICULAR Salary Insurance Stationary Telephone Expenses Repairs & Maintenance Audit fee R&D exp. Office rent TOTAL
1 2 3 4 5 900000 945000 992200 1041800 1093400 40000 40000 40000 40000 40000 5000 10000 17800 10000 20000 10000 40000 50000 40000 50000 20000 50000 50000 30000 80000 5000 15000 20000 10000 20000 20000 100000 150000 100000 150000 0 0 0 180000 180000 1000000 1200000 1320000 1451800 1633400
STATEMENT SHOWING INSTALLED CAPACITY AND QUANTIATIVE DETAILS
PARTICULARS
INSTALLED CAPACITY (IN TONNES) TURMERIC BLACK PEPPER CHILLY
1
2
3
4
5
350 100 150 600
350 100 150 600
350 100 150 600
350 100 150 600
350 100 150 600
A.PROJECTED PRODUCTION TURMERIC BLACK PEPPER CHILLY B.OP.ST. TURMERIC BLACK PEPPER CHILLY C.CL.ST. TURMERIC BLACK PEPPER CHILLY D.SALES(A+B-C) TURMERIC BLACK PEPPER CHILLY E.SALES (IN LACS) TURMERIC BLACK PEPPER CHILLY
210 60 90 360 0 0 0 0 0 0 0 0 210 60 90 360 115.5 60 67.5 243
229.5 66.3 99.5 395.3 0 0 0 0 2 1.3 2 5.3 227.5 65 97.5 390 125.125 65 73.125 263.25
245 70.3 105 420.3 2 1.3 2 5.3 2 1.6 2 5.6 245 70 105 420 134.75 70 78.75 283.5
263.5 74.75 112.5 450.75 2 1.6 2 5.6 3 1.35 2 6.35 262.5 75 112.5 450 144.375 75 84.375 303.75
280.5 79.65 120.5 480.65 3 1.35 2 6.35 3.5 1 2.5 7 280 80 120 480 154 80 90 324
F.EXPECTED FIN.GOODS TURMERIC BLACK PEPPER CHILLY
0 0 0 0 0
1.1 1.3 1.5 3.9 3.9
1.1 1.6 1.5 4.2 4.2
1.65 1.35 1.5 4.5 4.5
1.925 1 1.875 4.8 4.8
G.CL.ST. OF FIN.GOODS
CASH FLOW STATEMENT
(Rs. In lacs)
PARTICULAR A. SOURCES OF FUND Net Profit before taxes with interest added back but after depreciation Capital including Reserves Depreciation Priliminery exp. w/off Term Loan Increase in creditors Increase in Other Liab. Total A B. DEPOSITION OF FUNDS Preliminary and Preoperative Exp. Increase in Capital Expenditure Increase in current Assets Inentories Debtors Investments Others Decrease in long term loans Decrease in creditors Intrest Taxation Total B C. Opening Balance 12.85 20.25 6.66 7 0 0 5.328 5.73 110.4 0 4.193 7.38 34.63 1 10.53 1.75 4.44 1.3 5.04 0 4.32 5.9 5.04 0.01 4.116 3.88 6.83 29.81 2.52 7.1 6.92 28.89 4.83 29.03 7.7 1.89 1.7 2.82 1.8 4.18 4.1 5.04 0 1.82 1.5 0 9.9 5.04 0.08 3.77 34.8 4.52 0 20.16 10.06 27.04 111.4 0 3.69 0.1 0 0.58 3 36.15 0 3.14 0.1 0 0 2 32.12 31.76 0 2.72 0.1 0 0.47 1 31.34 0 2.39 0.1 0 0 2 24.42 28.78 26.88 27.47 26.85
1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
0.4 52.2
0 0
0 0
0 0
0 0
D. Net Surplus (A-B) E. Closing Balance
1 1
1.52 2.52
2.31 4.83
2.87 7.7
2.31 10.01
COST SHEET
(Rs. In lacs)
PARTICULARS Raw Material Consumed Direct Wages
Freight inward
1ST YEAR 120 19.02
21.42
2ND YEAR 130 19.97
23.95
3RD YEAR 140 20.97
25.42
4TH YEAR 5TH YEAR 150 22.02
27.04
160 23.12
28.56
Prime Cost Add.:- Factory O/H Factory Cost Add. :- Administration O/H Add. :- Op ST of F.G. Less :- Cl ST of F.G. Cost of Production Add :-S&d O/H Total Cost of Goods Sold Net Sales Profit before Interest Interest Operating Profit
160.44 11.39 171.83 10 0 0 181.83 11.62 193.45 217.97 24.52 5.328 19.19
173.92 11.29 185.21 12 0 3.9 193.31 13.94 207.25 236.13 28.88 4.193 24.69
186.39 11.31 197.7 13.2 3.9 4.2 210.6 16.73 227.33 254.3 26.97 4.116 22.85
199.06 11.54 210.06 14.52 4.2 4.5 224.28 20.07 244.35 272.46 28.11 3.88 23.68
211.68 11.88 223.56 16.33 4.5 4.8 239.59 24.09 263.68 290.63 26.95 3.77 23.18
(Rs. In lacs)
PROFIT & LOSS A/C
60.00% 1ST YEAR 243 25.03 217.97 65.00% 2ND YEAR 263.25 27.12 236.13 70.00% 3RD YEAR 283.5 29.2 254.3 75.00% 4TH YEAR 303.75 31.29 272.46 80.00% 5TH YEAR 324 33.37 290.63
WORKING CAPACITY OF WHOLE PLANT
A.
SALES less : excise duty net sales
B. 1 2 3 4 5 6 7 8
COST OF PRODUCTION Raw material Consumption Transpotation cost Power Stores & Spares Direct labour Packing Cost Repairs & Maintence Depreciation Sub - total B [ Total Cost of Production] Add : Op ST OF FIN. GOODS Deduct : Cl ST OF FIN. GOODS 120 21.42 4.32 0.3 19.02 1.8 0.45 4.52 171.83 0 0 171.83 130 23.95 4.68 0.47 19.97 1.95 0.5 3.69 185.21 0 3.9 185.21 140 25.42 5.04 0.5 20.97 2.1 0.53 3.14 197.7 3.9 4.2 197.4 150 27.04 5.4 0.6 22.02 2.25 0.57 2.72 210.6 4.2 4.5 210.3 160 28.56 5.76 0.7 23.12 2.4 0.63 2.39 223.56 4.5 4.8 223.26
C.
Sub - total [Total cost of sales ]
D.
Gross profit [A-C]
46.14
50.92
56.9
62.16
67.37
a Interest on unsecured loan b Interest on secure loan c Selling general and administrative expenses E. F. Sub-total [item a + b ] Operating profit [D-E] Preliminery & Issue Exp. G. H. I. Profit before tax/loss Provision for taxes Net profit (PAT) [F-G] proposed dividend Withdrwal / Remuneration to Partners J. P & L A/c Balance C/F
2.578 2.75 21.62
2.053 2.14 25.94
2.576 1.54 29.92
2.958 0.93 34.59
3.436 0.33 40.42
26.948 19.19 0.1 19.09 5.73 13.36
30.133 24.69 0.1 24.59 7.38 17.21
34.036 22.86 0.1 22.76 6.83 15.93
38.478 23.68 0.1 23.58 7.1 16.48
44.186 23.18 0.1 23.08 6.92 16.16
2.78 0 10.58
2.78 0 14.43
2.78 0 13.15
2.78 0 13.7
2.78 0 13.38
PROJECTED BALANCESHEET
As on 31 March
Rs in lacs
PARTICULERS A 1 a. b. 2 a. b. SOURCES OF FUNDS Shareholders funds Capital (equity share of Rs.10 each) Reserves and Surplus Profit and loss a/c Loan funds Secured loans Unsecured loans TOTAL OF A B 1 a. b. c. 2 3 a. APPLICATION OF FUNDS Fixed assets Gross block less depreciation Net block INVESTMENTS Current assets,loans and advances Closing stock of inventory Raw materials
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
34.8
34.8
34.8
34.8
34.8
10.58 20.16 15.2 80.74
25.01 15.12 20.53 95.46
38.16 10.08 25.56 108.6
51.86 5.04 29.58 121.28
65.24 0 34.36 134.41
52.2 4.52 47.68 6.66
52.2 8.21 43.99 11.1
52.2 11.35 40.85 15.42
52.2 14.07 38.13 19.6
52.2 16.46 35.75 19.6
12
18.5
20.05
22.5
24
Finished goods Other consumable spares b c d Sundry debtors Cash and bank balance Loan and advances Advances to suppliers of raw material and stores/ spare consumable Advance payment of taxes Total of a to d less: Current liabilities and a. b. c. Provision Creditors Provisions for tax Installment of T/ L deferred Total of a to c NET CURRENT ASSETS 4 Preliminary expenses not written off TOTAL OF B
0 0.85 20.25 1
3.9 0.98 22 2.52
4.2 1.02 23.7 4.83
4.5 1.09 25.5 7.7
4.8 1.11 27 10.01
7
8.3
14.2
18.3
28.2
5.73 46.83
7.38 63.58
6.83 74.83
7.10 86.69
6.92 102.04
10.06 5.73 5.04 20.83 26 0.4 80.74
10.64 7.38 5.04 23.51 40.07 0.3 95.46
10.63 6.83 5.04 22.5 52.133 0.2 108.6
11.1 7.10 5.04 23.24 63.45 0.1 121.28
11.02 6.92 5.04 22.98 79.06 0 134.41
WORKING CAPITAL
(Rs. In lacs)
PARTICULERS CURRENT ASSETS 1 2 3 4 5 Raw material Other consumable spares Finished goods Recievables Advances of suppliers of raw materials and stores/ spares consumables 6 A Cash & Bank Balance Total current assets CURRENT LIABILITIES 1 Creditors for purchase of raw materials and stores and consumable spares 2 3 Provision For Taxation Instalment of term loan Total current liabilities 22 5.04 37.1 25 5.04 40.68 27 5.04 42.67 28 5.04 44.14 30 5.04 46.06 10.06 10.64 10.63 11.1 11.02 41.1 1 2.52 56.2 68 4.83 79.59 7.7 10.01 95.12 12 0.85 0 20.05 7 18.5 0.98 3.9 22 8.3 20.05 1.02 4.2 23.7 14.2 22.5 1.09 4.5 25.5 18.3 24 1.11 4.8 27 28.2 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
B
Net working capital margin [A-B]
4
15.52
25.33
35.45
49.06
BREAK-EVEN ANALYSIS
(Rs. In lacs)
PARTICULERS BREAK EVEN POINT :TOTAL SALES
1ST YEAR
2ND YEAR 3RD YEAR
4TH YEAR
5TH YEAR
217.97
236.13
254.3
272.46
290.63
LESS :- VARIABLE COST Raw Materials Transpotation cost Power Stores & Spares Direct Labour Repairs & Maintence Packing Expense Selling & Administration Cost (Assumed 40% Variable) TOTAL CONTRIBUTION (SALES-VC) FIXED COSTepreciation Interest Selling & Administration Cost (Assumed 60% Fixed) Total Fixed COST BEP Sales(%)
BEP Sales(RS)
120 21.42 4.32 0.3 19.02 0.45 1.8 8.65 175.96 42.01
130 23.95 4.68 0.47 19.97 0.5 1.95 10.38 191.9 44.23
140 25.42 5.04 0.5 20.97 0.53 2.1 11.97 206.53 47.77
150 27.04 5.4 0.6 22.02 0.57 2.25 13.84 221.72 50.74
160 28.56 5.76 0.7 23.12 0.63 2.4
16.17
237.34 53.29
4.52 5.328 12.97 22.818
54.32% 118.4
3.69 4.193 15.56 23.443 53.00%
125.15
3.14 4.116 17.95 25.206 52.76%
134.17
2.72 3.88 20.75 27.35 53.90%
146.85
2.39 3.77
24.25
30.41 57.00%
165.65
RATIO ANALYSIS
PARTICULAR LIQUIDITY RATIO Current ratio = C.A/ C.L. Liquid ratio= C.A.-Stock/ C.L.-B.O.D PROFITABILITY RATIO Gross Profit Ratio(%) GP/SALES*100 Net Profit Ratio NP/SALES*100 Debt-equity Ratio Debt / share capital Fixed Assets Turnover Ratio SALES/FA 1 2.24 1.63 2 2.7 1.71 3 3.32 2.2 4 3.73 2.5 5 4.44 3.1
21.17% 21.56% 22.37% 22.81% 23.18%
6.20%
7.30%
6.30%
6.10%
5.60%
77.91% 59.60% 48.85% 39.95% 34.36%
4.57
5.36
6.28
7.14
8.12
Debtors ratio DEBTORS+BR/SALES*300
28 days
28 days
28 days
28 days
28 days
Creditors ratio CREDITORS+BP/PURCHASE*300
23 days
23 days
22 days
22 days
21 days
Assumptions made for making this financial feasibility report:
SBI 12% Term Loan is taken against the security of the Land Documents. There are 300 Working days in a year. Manufacturing is done evenly in all the months throughout the year. Estimated production will be done and sales of them will be realized. The credit allowed to debtors is 30 days. The credit is received from creditors is also 30 days. Fixed assets are valued at historical cost less depreciation as per the Income Tax act, 1961 on WDV bases. Closing stock of Raw Material and Finished Goods has been valued on FIFO basis. Total capacity of plant is to manufacture 600 TONNES SPICES where as capacity utilize is 60, 65, ,70, 75,80 percentage for five years respectively. For calculating working capital requirements debtors are valued on Selling price. Discount is calculated at 2% of Sales. Raw material and finished goods is taken as 30 days. Direct labour is increase by 5% every year. From forth Year Company has decided to take three offices on rent in three different areas for its sales development.
EVALUATION OF PROJECT PAY BACK PERIOD
(Rs. In lacs)
2ND YEAR 17.21 3.69 0.1 21 38.98 PARTICULERS PAYBACK PERIOD PAT Add :- Depreciation Add: Preliminary Exp. (written off) TOTAL CASH FLOW Cummulative CF Total Project Cost 17.98 17.98 19.18 58.15 60 Net pay back period is 3 years and 1/4 month. 19.3 77.45 18.65 96.1 13.36 4.52 0.1 15.93 3.15 0.1 16.48 2.72 0.1 16.16 2.39 0.1 1ST YEAR 3RD YEAR 4TH YEAR 5TH YEAR
COST OF CAPITAL:
(Rs. In lacs)
Particulars share capital secure loan un-secure loan K 8% 8.29% 6.91% Amount 34.8 25.2 15.2 75.2 Cost 2.78 2.09 1.05 5.9
5.9/75.2*100=
7.85%
NET PRESENT VALUE
(Rs. In lacs)
Year 1 2 3 4 5 PAT 13.36 17.21 15.93 16.48 16.16 Depre. 4.52 3.69 3.14 3.72 2.39 Pre.Exp 0.1 0.1 0.1 0.1 0.1 CFAT 17.98 21 19.17 19.3 18.85 PVFACTOR 0.9272 0.8597 0.7971 0.7391 0.6853 PV 16.67 18.05 15.28 14.26 12.92
CASH-IN-FLOW LESS CASH OUT FLOW NPV
77.18 60 17.18
PROFITABILITY INDEX:
(Rs. In lacs)
PI =
PV OF CAS-IN-FLOW PV OF CASH-OUT-FLOW 77.18
PI=
60 1.286333333
INTERNAL RATE OF RETURN
Year 1 2 3 4 5 (@7.85%) PVFACTOR 0.9272 0.8597 0.7971 0.7391 0.6853
PAT 13.36 17.21 15.93 16.48 16.16
Depre. 4.52 3.69 3.14 3.72 2.39
Pre.Exp 0.1 0.1 0.1 0.1 0.1 (@20%) PV 15.63 15.88 12.6 11.03 9.37 64.51
CFAT 17.98 21 19.17 19.3 18.85
(@15%) PV 16.67 18.05 15.28 14.26 12.92 77.18 PVFACTOR 0.8695 0.7561 0.6575 0.5717 0.4971
PVFACTOR 0.8333 0.6944 0.5787 0.4822 0.4019
PV 14.98 14.58 11.09 9.31 7.58 57.54
= = = =
15% + 64.51 - 60.0 / 64.51 – 57.54 * 5 15 % + 4.51 / 6.97 * 5 15 % + 3.23 % 18.23 %
ACCOUNTING RATE OF RETURN:
PARTICULARS
AMOUNT
initial investment
60
average income ARR = INVST/AVG.INCOME
15.83 26.38%
CONCLUSION
By doing extensive research overall aspects we come to the conclusion that subject to the condition and circumstances the project is definitely economically and socially viable. We would finally like to conclude our project with a high feeling by having gained enormous knowledge. This task has provide us with the much needed a breath from the minute activities that one has to undergo. This includes thanks giving to the valued cooperation by the Company like J.P.FOODS that we visited for guidance purpose which provide us with financial data required for making this project but also our professors who gave us such a wonderful opportunity to learn so much about the practical aspects by the corporate world. We are also thankful to our project guide Ms.Ingita Jain.
BIBLIOGRAPHY
1. Marketing Management by Philip Kotler 2. Financial Management by I M PANDEY 3. Accountancy-4 by Sudhir Prakashan 4. Financial Management by KHAN & JAIN
WEBOGRAPHY:
1. www.google.com 2. www.wikipedia.com
doc_657328532.docx
Spices are distinguished from herbs, which are parts of leafy green plants also used for flavoring or as garnish.
“WITHOUT WHICH YOUR FOOD IS INCOMPLETE”
A FEASIBILITY REPORT ON SPICES
REPORT PRESENTED BY GROUP - K
K.S.SCHOOL OF BUSINESS MANAGEMENT GUJARAT UNIVERSITY, AHMEDABAD-380009
CERTIFICATE
This is to certify that members ofgroup “K” of Third Year MBA of K.S.SCHOOL OF BUSINESS MANAGEMENT have successfully completedtheir feasibility report on SPICES for the Academic Year 2010-2011 and have duly submitted to the institute.
Date of submission: 10-3-2011 Project Guide : Name: Ms.Ingita Jain Sign :
K.S.SCHOOL OF BUSINESS MANAGEMENT GUJARAT UNIVERSITY, AHMEDABAD-380009
GROUP MEMBERS
Sr.No 1. 2. 3. 4. 5. 6. 7. NAME SUNILSINH RAJPUT DASHRATH MASANI ATIK DODHIYA KARAMSHI DHIYAD ANKUR CHARPOT VIKRAM HATHILA KAUSHIK RANA ROLL NO. 3127 3168 3170 3177 3235 3237 3240
INDEX
1. INTRODUCTION. ? What is feasibility report? ? History of spices. 2. PROJECT AT GLANCE. 3. ENVIRONMENTAL SCANNING. ? PEST analysis ? SWOT analysis ? Legal environment. 4. EVALUATION OF MARKET SEGMENT 5. LEGAL DOCUMENTS ? Memorandum of association. ? Article of association. ? Certificate of incorporation. 6. TECHNICAL FEASIBILITY ? ? ? ? ? ? ? ? Location analysis Process chart Process steps Plant and machinery description Machinery cost Technology selection Requirement of utilities Raw material description
7. HUMAN RESOURCE FEASIBILITY
? ? ? ? ?
Manpower planning. Organization charts. Job description and specification Workers rights. Amenities to workers.
8. MARKETING FEASIBILITY. ? ? ? ? ? ? 4P’S of marketing. Vision. Market research. Objectives of conducting a survey. Questionnaire. Consumer analysis
9. FINANCIAL FEASIBILITY. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Cost of project. Means of finance Land cost Building cost Plant and machinery cost Furniture Bank loan payment Raw material Depreciation Salary Factory o/h Office o/h S& D o/h Adm, O/H Installed Capacity Statement Cash flow statement Cost sheet
? P&L A/c ? BALANCE SHEET ? WC Requirement ? B-E-P Analysis ? Assumptions ? Ratio Analysis
10.
EVALUATION OF PROJECT ? PBP ? NPV ? PI ? IRR ? ARR
11.
CONCLUSION ? Estimate of future demand ? Bibliography ? Webography
AKNOWLEDGEMENT
We have made project report on feasibility study of SPICES in Third Year at K.S.SCHOOL OF BUSINESS MANAGEMENT and we are highly satisfied with the task of project work provided to us. We are thankful to Dr. Sarla Achuthan, Director of K.S.SCHOOL OF BUSINESS MANAGEMENT who gave us an opportunity of implying our creativity in such project work and applying theoritical knowledge into practical life. We are also thankful to our project guide Ms.Ingita Jain,who has constantly motivated us to put our best in the project. We would also like to thank all faculty members of K.S.SCHOOL OF BUSINESS MANAGEMENT for giving their valuable advice which made it possible for us to work efficiently. It is not possible to express the name individually of each and every one who helped us but we would like to express our sincere gratitude to all group members.
PREFACE
MBA is a stepping stone to management career, in order to achieve practical, positive and concert result the classroom learning needs to be efficiently fitted to the realities and the situation. Existing outside the classroom which is in the market this is particular what we learn in the management. Every study incomplete without having a well - planned and concrete exposure given to a student. Management studies are not exceptions. The study of management only as a theoretical knowledge is just like a wondering ship in ocean without a compass, so at this side it provides sound basis to adopt the theoretical knowledge and on the other hand it gives opportunity for exposes to real market situation. It gives us the basic practical experiences, which serve us a compass in the directionless ship; this enables the ship to reach its destination against all odds from all of its rivals. So, in order to inquire them about management practice which require undergoing a project. This point is given to the students for having a first hand knowledge of business activities and ads to their existing stock of information.
INTRODUCTION
? What is feasibility report?
A report which forecast or gives pre-estimation of venture with respect to different dimensions is called a feasibility report. By feasibility we mean that the venture must be practically possible with respect to the following areas of management.
? Industrial feasibility:
For manufacturing a product it is necessary for a manufacture to verify whether the industry concerned is feasible or not.
? Financial feasibility:
It must assure a fair return on the capital invested by the owner.
? Technical feasibility:
The technology required in the unit must be such that it is easily obtainable and practically feasible.
? Marketing feasibility:
Just producing is not the end but the beginning. It should be accepted by the customers and the market.
? Social feasibility:
It should not only believe from the above mentioned angles but it must also be secreting that it does not harm the society.
PROJECT AT GLANCE
Name of the Company: Product: SPICES Plot No. D 233/55, Division-A, Changodar GIDC, Ahmedabad. GUJARAT. Private Ltd RS. 60,00,000 Owners Fund and Term Loan. SUNRAJ SPICES PVT. LTD.
Factory address:
Constitution: Cost of project: Means of finance:
Payback period:3years and 1/4month Debt equity ratio: Current ratio: 2.24 77.91%
HISTORY OF SPICES
The history of spice is almost as old as human civilisation. It is a history of lands discovered, empires built and brought down, wars won and lost, treaties signed and flouted, flavours sought and offered, and the rise and fall of different religious practices and beliefs. Spices were among the most valuable items of trade in ancient and medieval times. As long ago as 3500 BC the ancient Egyptians were using various spices for flavouring food, in cosmetics, and for embalming their dead. The use of spices spread through the Middle East to the eastern Mediterranean and Europe. Spices from China, Indonesia, India, and Ceylon (now Sri Lanka ) were originally transported overland by donkey or camel caravans. For almost 5000 years, Arab middlemen controlled the spice trade, until European explorers discovered a sea route to India and other spice producing countries in the East. Spices were all imported from plantations in Asia and Africa, which made them extremely expensive. From the 8th until the 15th century, the Republic of Venice had the monopoly on spice trade with the Middle East, and along with it the neighboring Italian city-states. The trade made the region phenomenally rich. It has been estimated that around 1,000 tons of pepper and 1,000 tons of the other common spices were imported into Western Europe each year during the Late Middle Ages. The value of these goods was the equivalent of a yearly supply of grain for 1.5 million people. While pepper was the most
common spice, the most exclusive was saffron, used as much for its vivid yellow-red color as for its flavor. Spices that have now fallen into some obscurity in European cuisine include grains of paradise, a relative of cardamom which almost entirely replaced pepper in late medieval north French cooking, long pepper, mace, spikenard, galangal and cubeb. A popular modern-day misconception is that medieval cooks used liberal amounts of spices, particularly black pepper, merely to disguise the taste of spoiled meat. However, a medieval feast was as much a culinary event as it was a display of the host's vast resources and generosity, and as most nobles had a wide selection of fresh or preserved meats, fish, or seafood to choose from, the use of ruinously expensive spices on cheap, rotting meat would have made little sense.
ENVIRONMENTAL SCANNING BUSINESS ENVIRONMENT
Business environment is just like a human being. It cannot survive in alone; it is made for the people and of the people. Managers have to perform their functions in the organization the system approach of managing suggests that an organization being a subsystem of brooder social system has to work within the frame work provided by the society and its various constituents. These constituents are combining to constitute environment for a given organization. Environment includes all the condition, circumstances, and influences, surrounding and affecting the total organization or any of its part. Environment consists of atoms and molecules, agglomeration of thing in motion, alive of men and emotions of physical and social law, social ideas, norms of actions of forces and resistance their number is infinite and they are always present, they are always changing. For environmental analysis the following theoretical models are used. ? PEST Analysis ? SWOT Analysis
PEST Analysis
1. Political Environment:
Frequent changes in the central or state government lead to changes in industrial policies. This environment is composed of regulation, government spending and patent protection changes in the budget, subsidies, tax relief measures, tax structure and holidays, licensing policies may follow. Here the political factor also the affect to the SPICES processing for its maintaining quality for industry of spices.
2. Economical Environment:
Economical environment plays very important for our product which is eco friendly and our product does not affect the environment.
3. Social Environment :
It reflects as what we are giving to the society and there is also the expectation of the society towards the business. We have pollution control certificate however, the general feature for pollution control must be taking into consideration during the process of manufacturing.
4. Technological Environment:
One of the most important aspects of shaping people’s lives is technology. The COMPANY which moves with the latest technology can excel their growth.
Every new technology is a force for creative destruction. Moreover the innovative process always leads to an increase in the investment. Technological invention is introduced for higher productivity lower cost, and more revenues. Technology refers to sum total of the knowledge providing ways to do things organization must give constant consideration to the manner in which innovation may affect their product and internal efficiency.
SWOT ANALYSIS
A SWOT Analysis is requiring checking the Company’s Strength, Weakness, Opportunities and Threats. It will give the overall idea about competitor and current situation of the Company. Strength and Weakness are the Company internal characteristic that can be improved by the Company while Opportunity and Threats are the external factors which will predict the current condition of the Company to make decision.
STRENGTH
? A Company’s strength is its resources and capabilities that can be used as a basis for developing and competitive advantage. ? The increase in living standards of people, now they spend more on spices. As we are offering good quality at reasonable price so it will definitely attract customers so our venture is less risky. ? Our Company offers the high quality. ? Our target market is Gujarat which is one of the most developing states of India. ? Gujarat is immerging as an industrial hub to many growing industries. ? More and more investment means more industries, more housing and more construction. ? All this is positive sign for the spices industry to prosper. ? When we talk about spices, it has been found that following are its strengths. ? There are many players it is like a perfect competition. ? The labour does not require much specific qualification and skill.
? The spices have got a very bright future and demand will remain constant through out the year.
WEAKNESSES
? In the spices industry, the labour work on the part of workers is very tedious and laborious. Workers often complaint about the work load. ? Since there are already big players in the market, we would have to face cut throat competition in order to get the market share, ? Huge capital investment is requiring on the machineries.
OPPORTUNITIES
? ujarat which is one of the most developing states of India is emerging as an industrial hub with many growing industries like, fast malls, big buildings, residential expansion and more housing so future requirement of spices will be continuous. ? ur research and survey so that people are interested in buying of the spices which is qualitative and at the same time something which is offered at a reasonable time. This thinking matches which our Company policy to produce the best at the least. ? y using eco-friendly technology the unit may get an edge over the other players in the market
THREATS
? Competition, this is one of the biggest threats faced by all the business. ? Existence of big spices Company like RAMDEV pose tough competition for us.
SWOT MATRIX
S
Its resource and capabilities High demand
W
Huge investment already big players
O
Eco friendly technology Scope for expansion
T
Competition Supply position Unpredictable
LEGAL ENVIRONMENT
LAWS RELATING TO LABOURS:
? ? ? ? ? ? Industrial dispute act, 1947 Industrial trade union act ,1926 Industrial relation act ,1946 Industrial employment act ( standing orders ), 1946 Workmen compensation act,1923 Payment of wages act,1936
EVALUATION AND SELECTION OF MARKET SEGMENTS
Among all the patterns of market segmentation, we fall under the category of homogeneous segment because there is no any noticeable different in the products of all the manufactures ofTermeric, Black Pepper, Chilly etc. Our customers preferences do not scatter throughout the space which indicates that customers do not vary greatly in their preferences so our brand hear the corner to attract a customers group that has not been satisfied with other brands. While segmenting the market, we took the following steps. 1. We grouped the customers into segments based on their budget on spices and according to their quality and price preferences. 2. Determination of profitability of the segment finding unique customers and characteristics.
NAME:SUNRAJ SPICES PVT.LTD. LOGO:
TAG LINE: “WITHOUT WHICH YOUR FOOD IS INCOMPLETE”.
LEGAL DOCUMENTS FOR PRIVATE LTD COMPANY
? Memorandum of association. ? Articles of association. ? Certificate of incorporation of Company.
Memorandum of association of SUNRAJ SPICES PVT LTD. (Limited by shares as per section 15 of the companies act, 1956). 1. The name is SUNRAJ SPICES PVT LTD. 2. The registered office of the Company is situated in the state of Gujarat.
3. Objects of the Company:
a) Main object:
The main object of SUNRAJ SPICES PVT LTD is to manufacture spices to expand the production process for manufacturing spices in future or distribute in within India.
b)Other objects:
To enter into joint sector arrangement with any present body or corporate whether in India or abroad for the business of the Company.
To train and get trained and for pay training for the employee both present and future for and connection with business of the Company.
4. Capital clause:
It remains related to financial terms. 5.
Liability clause:
The liability of the member is limited.
6.
Association clause:
We the several persons whose names and address are satisfied are desire of being formed to companies in pursuable of this memorandum of association.
ARTICLES OF ASSOCIATION
1. SUNRAJ SPICES Pvt.Ltd. will follow the regulation contained in table a in the first schedule of the companies act, 1956. 2. No invitation shall be issued to subscribe for any share in or debenture of the companies. 3. Prohibited for from making any invitation for or acceptance from person other than its member directory of their relatives.
5. Copy of association clause
Sr.No NAME No. of equity shares of Rs.10 each 49715 49715 49715 49715 49715 49715 49715
1. 2. 3. 4. 5. 6. 7.
SUNILSINH RAJPUT DASHRATH MASANI ATIK DODIYA KARAMSHI DHIYAD ANKUR CHARPOT VIKRAM HATHILA KAUSHIK RANA
Our customers preferences do not scatter through out the space which indicates that customers do not vary greatly in their preferences so our brand hear the corner to attract a customer group that has not been satisfied with other brands.
CERTIFICATE OF INCORPORATION OF SUNRAJ SPICES PVT. LTD.
CERTIFICATE OF INCORPORATION NO.01 I hear by certify that SUNRAJ SPICES PVT. LTD is incorporated under the companies act, 1956(No. 1of 1956) and that the Company is private ltd given under my hand at AHMEDABAD first day of APRIL, 2011.
SD/NAME______________ Ass. Registrar of companies, Seal of registrar of companies, Gujarat.
TECHNICAL FEASIBILITY
Introduction
Long term growth of business and profitability are the two basic requirements of any enterprise. In the modern era of globalization without the help of Technology Company can not survive any more. Higher productivity in a competitive situation can come only from relation and control of cost, which in turn comes from improved technology. Now a day with the emergence of newer and faster technology, new innovation and technology advancement take place every now and then. In this kaleidoscopic era of competition for competing of other Company organization has to very well take care of its technology in order to meet the present emerging demands and modern requirements. Moreover, only the adoption any technology at one time cannot help the Company to survive any longer unless if does not implement it at the right time with the right intention and that too at the right place. To meet the competition more important beat the competition the companies have to upgrade their technology from time to time. The Company should be very innovative in implementing modern technology with proper care. And that is what is being adopted at our organization with full consciousness. We are equipped with high technology oriented machineries, it help us to enhance the quality of our product.
LOCATION ANALYSIS
The Selection of location plays a vital role for the growth. We have decided to establish our production unit and marketing department in AHMEDABAD only. The address is as follows:
Plot No. D 233/55, Division-A, Changodar GIDC, Ahmedabad. GUJARAT. Reasons for selecting the side:
1. Land of Changodar GIDC is cheaper than compared to other areas. 2. Changodar GIDC is in Ahmedabad and Ahmedabad is connected with all the leading cities of Gujarat as well as of other states hence delivery of the goods is convenient and fast. 3. It is very easy to get raw materials and transportation cost is also gets lower because of the same. 4. Other big spices companies are also located at the same place that is why labour is trained and cheaper in that area. 5. Natural gas is also easily available in that area.
The process chart of steps for manufacturing of spices:
1)RAW MATERIAL:
(cleaned , washed , dried etc….)
2)DISINTIGRATOR:
(converting solid into small pieces…)
3)GRINDING MACHINE:
(converting pieces into powder form…)
4)WEIGHING SCALES :
(weighing of spices….)
5)
PLASTIC SEALING MACHINE:
(packaging of spices……)
6)
WARE HOUSES:
(storing of spices……)
PROCESS explanation
The manufacturing process is very well established and does not involve technicalities. Unground spices are cleaned manually to remove impurities like mud and stones and are then washed in water. After drying them in sunlight, they are graded and ground with the help of grinding machine to convert them in powder form. Disintegrator is used in case of solid material like turmeric to obtain uniform mesh size. Spices in powder form are then weighed as per t he contemplated packing quantities and packed in printed polythene bags and then these bags are sealed on automatic sealing machine.
PHOTOGRAPHS OF MACHINES
Machinery Name: DISINTEGRATER
Price: Rs.180000/unit Usages: grinding of soft and medium hard products.
Machinery Name: SPICE GRINDING MACHINE
Price: Rs.40000/unit Usages: Grinding of SPICES.
Machinery Name: PLASTIC SEALING MACHINE
Price: Rs.6000/unit Usages: Packaging of product.
Machinery Name: WEGHING SCALES
Price: Rs.2000/unit Usages: Weighing of product.
MACHINERY COST
S.R.NO. NAME OF MACHINE NO.OF MACHINE RATE OF MACHINERY AMOUNT
1. 2. 3 4
Disintegrater Spice Grinding machine Plastic Sealing machine Weighing Scales TOTAL
4 4 6 12
190000 45000 6000 2000
760000 180000 36000 24000 1000000
TECHNOLOGY SELECTION
Basically there are two types of production techniques are available. 1. Capital intensive 2. Labour intensive.
CAPITAL INTENSIVE
For the machineries, only operators are required. The whole process is automatic right from casting of raw material in a lower fixed cost and preparing the final product. Capital input resulting in a lower fixed cost and lower cost. This type of substitution often occurs in economic with in expensive labour or raw material and higher interest rate of capital.
LABOUR INTENSIVE
Here, labours are employed for running machineries as well as assembling the parts. Labours are well trained to run machinery efficiently.
REQUIRENMENT OF UTILITIES:
?? POWER: Power facilities available for 24 hours from torrent power. In our unit, most of all the machines run through power for spices. Besides we have generator which is capable to provide electricity for the whole day if necessary. ?? STORAGE SYSTEM: For spices we have our storage department for raw material and in another storage department we keep our finish goods and in the same we do packaging. ?? COMMUNICATION: The present scenario of changing business environment effective and uninterrupted communication is the key to all human activities. Keeping in view technological changes and speedy communication we have installed various instruments like telephone, computer, internet etc. ?? FIRE SYSTEM: In factory we will instal fire equipments in order to face any eventuality, the Company keep one set of first aid appliances as per provision of factory act.
RAW MATERIAL DISCRIPTION FOR SPICES
? Item : Turmeric Suppliers: J D industry Rate: Rs. 35000 per ton Place: Meghalaya ? Item : Black Pepper
Suppliers: Raj Enterprises Rate: Rs. 60000 per ton Place: Meghalaya
? Item : Chilly
Suppliers: J D industry. Rate: Rs. 10000 per ton Place: Meghalaya
MAN POWER PLANNING
It is the man behind machine that wins the war and not merely the machine. Capital strategy and research and development do not always work and when they do not work what we can fall back on is our human power, human resource and human talents that the Company is having. For any industry organization like machine, manpower is also the consider one of the most important aspect which play a vital role for its overall growth and development and hence our organization is also based on the same concept or principal.
We would definitely create the feelings of oneness into the employees towards the organization through various training program .Thus we would consider and implementing. The concept, people are primer source of competitive advantage. We are medium scale organization .We are having a great organization structure.
ORGANIZATIONAL CHART
Directors
Managing Director
Finance Manager
Marketing Manager
Production Manager
Personnel Manager
Accountants
Sales Executive
Quality Control Manager
Clerks
Technician
Supervisor
Skilled Workers
Unskilled Workers
MANAGING DIRECTOR
JOB DESCRIPTION Job title Reporting to Supervises to Functions Managing director Board of directors The Company performance overall. Day to day operation of business Monitoring, implementation of policies & plans. Expense control & cost control. To evaluate an approved / disapproved the purpose budgets by marketing manager & production manager for various plans. To check loopholes & implement corrective measure. To hold meeting whenever necessary for above function. Maintain co-ordination between various departments of organization. To maintain cordial business contacts. To direct manager of marketing, finance, production & personnel Responsible for major faults made by middle level made by middle level management. Laptop.
Duties, Responsibility & Authority
Equipments
JOB SPECIFICATION Job Title Education Skill Requirement Managing director. MBA / PGDM from a reputed institute. Innovative, knowledgeable about marketing trends, economic trends. Good communication skills. Good analytical & reasoning skills. Sound health. At least 3-4 years in a similar role.
Physical Health Experience
FINANCE MANAGER
JOB DESCRIPTION Job title Reporting to Supervises to Functions Finance manager. Managing director. Accountants. To make proper policies for sound condition of Company. To provide appropriate rate of depreciation, reserve & surplus. To ascertain budgets fop all plans & projects. To decide upon investment of funds of the Company. To check discrepancies in Company's financial records. To ensure optimum & fair use of Company's financial resources’. To co-ordinate well with an accountants & director. Analyze financial position at regular intervals. Laptop.
Duties, Responsibility & Authority
Equipments
JOB SPECIFICATION
Job Title Education Skill Requirement
Physical Health Experience
Finance manager. MBA with finance /C.A. Sharp & speed in calculation. Good analytical skill. Decision making ability. Should have depth knowledge of taxation, Companies act. Smart & fit. At least 2 years in a similar role.
MARKETING MANAGER
JOB DESCRIPTION
Job Title Reporting to Supervises to Functions
Duties, Responsibility & Authority
Marketing manager. Managing director. Salesman. To Plan marketing & advertising strategies. To determine the target segments. To estimate ads budget out of total fund. Motivating marketing team Building the brand in the market. Responsible for effective competitive strategy implementation. To create good loyalty for the product in the market. To maintain market of the product. Laptop
Equipments
JOB SPECIFICATION Job Title Education Skill Requirement Marketing manager. MBA with marketing from recognized institute Innovative, knowledgeable about marketing trends, economic trends. Good communication skills Good analytical & reasoning skills Good communication skill Capable of analyzing different market trends. Should be creative, polite & humble. Smart energetic. 2-3 years for similar position
Physical Health
Experience
PRODUCTION MANAGER
JOB DESCRIPTION Job Title Reporting to Supervises to Functions Production manager Managing director Production department Try to apply innovative method To achieve production target in specified period To arrange manpower & other sources for production. Planning, have a control over the process & check the deviations. To co-ordinate with administrative department for implementation of policies &plans. Responsible for production schedules & arrangement of labours. Regular check of stock purchase & manpower condition. Laptop
Duties, Responsibility & Authority
Equipments
JOB SPECIFICATION Job title : Education: Skill Requirement: Production Manager. Graduate in mechanical engineer from reputed institute. Capable of leading tem of workers. Good communicaication skill & ability to undertake work from subordinates. Energetic, hard work. At least 3 Years.
Physical Health: Experience:
PERSONNEL MANAGER
JOB DESCRIPTION Job title Reporting to Supervises to Functions Personnel Manager. Managing director. Human resource department. To Frame motivational leading and communication policy and strategies. To keep an eye on employee's work. He will be responsible for any decision on salary ,administration, maintaining employee discipline and welfare services &resolve grievances. Laptop.
Duties, Responsibility & Authority
Equipments JOB SPECIFICATION Job Title Education Skill Requirement
Physical health Experience:
Personnel Manager. MBA /PGDM in HR. Impartial attitude towards all employee & must posses’ leadership qualities. Sound health, good presence of mind & co-operation. Minimum 1 year in the relevant field.
SALES EXECUTIVE
JOB DESCRIPTION
Job title Reporting to Functions
Sales executive. Marketing manager. To carry out all operations for the implementation of advertising plans & promotion plan decided by marketing manager. To act as bridge between marketing manager & customer. To achieve the target. Responsible for any customer or dealer's complaint about his service.
Duties, Responsibility & Authority
JOB SPECIFICATION Job Title Education Skill Requirement Sales executive. Diploma in marketing. Knowledge of surrounding market. Should have innovative ideas Good command on at least three languages namely Gujarati, Hindi and English. Ability to convience people. Good co-operation ,good present of mind 1year or fresher can also apply.
Physical Health Experience
WORKERS
JOB DESCRIPTION Job Title Reporting to Functions Workers. Production manager. To Perform work effectively given by executives. To work with co-operation. Follow instructions of supervisors. To inform manager immediately for any kinds of defaults.
Duties, Responsibility & Authority
JOB SPECIFICATION:Job Title Education Skill Requirement Workers. 12th standard pass or ITI. Technical knowledge a bought their work and machines should be able to do the job Assigned to them. Capable of working at least 8 hours. Not necessary.
Physical Health Experience
WORKER'S RIGHT
? WEEKLY HOURS 48 hours a week for all workers. ? THE NOTICE PERIOD OF WORK We can refuse to employ a worker for any day for which he has been given the prior notice. ? ANNUAL LEAVE WITH WAGES An adult worker is entitled to one day paid, Leave for every twenty days of work. Half or more than Half day's worker is counted as full day’s work. This Earned excludes. ? HOLIDAYS The worker is entitled to average monthly wages Maximum earned. If the employer terminates the service of the worker who has to his credit earn leave, and then he shall pay the average daily wages in respect of the leave not taken. (Sec.30-31) ? CAPITAL SAVING TECHNOLOGY This is the opposite of automation where a lower Cost variable input such as raw material or direct labour is substituted for a higher cost capital input resulting in a Lower fixed cost and lower total cost. This type of substitution often occurs in economic within experienced labour or Raw material and higher interest rate of capital.
?
AMENITIES TO WORKERS The amenities provided to the workers at the work place As under. ? Drinking water ? Lavatory ? First aid box ? Other facilities 1. DRINKING WATER We have made effective arrangement to provide wholesome drinking water for all workers. We have placed "Ro Plant" with facilities of hot and cool water. 2. LAVATORY There are sufficient no.of conveniently suitable and accessible toilets. All of them are maintain in clean and sanitary condition. They are in a cubical or room fitted with a door. There is a proper circulation of air and an adequate supply of water and fresher. 3. FIRST AID BOX
? ? ?
Workers have reasonable access to appropriate & adequate first aid equipment. The equipment of first aid is maintained in a separate. Respective medicines for different purpose are maintained separately & market in Gujarati which is understood by most of all the workers and employees.
4. OTHER FACILITIES We also provide umbrellas, blankets, rain coats & other amenities for the protection of workers from rain or cold.
MARKETING FEASIBILITY
Marketing mix is an important concept in the modern marketing. It consists of 4Ps that is Product, Price, Promotion and Place. So it is known as 4Ps of marketing mix. It represents the seller’s view of marketing tools available for influencing or enrolling the buyer to opt for their product MARKETING MIX
Product
Price
Place
Promotion
PRODUCT
“Product is a key element in the offering” our product is spices. There are various levels of any product which can be explained as under:
? Core benefit: Core benefit is the basic product or benefit which the consumer is really buying. The core benefit that our Company is going to provide spices to customers. ? Basic Product: At the second level, the marketer has to turn the core benefit into a basic product. The basic product that our Company is going to give its customer isQUALITATIVE SPICES. ? Expected Product: An expected product is a set of attributes and conditions, which the buyers normally expect when he purchases the product. Here in our product has variety in terms of colors and test packagings etc.
? Augmented Product: The augmented product that our Company will provide in the market is various variants of spices such as Termeric, chilly,Black pepper etc with proper colors and test. ? Potential Product: A potential product is the maximum possible level up to which a Company can provide the augmented and expected product in future. Innovation plays large and important part in this type of product. It is important for the producers at this stage to invest in research. We have created our website for selling of the product and that is www.sunrajspices.com.
PLACE
With the faster communication, transportation and financial flow, the world is rapidly shrinking. Products developed in one country are finding enthusiastic acceptation in other country also with the emergence of a computer world; it has become even easier to market the product from one place to another. Moreover in this competitive era the Company has to make its product available at the nearest place in order to make it convenient for the consumer. After all “Customer is the King” of the market who is to purchase the product and to decide the Market shares. Marketer should make the product available at as many places as possible so that it can easily attract the consumer and increases market share by a way of selling it to them. The seller needs to select appropriate place for manufacturing a product in such a way that it fulfills the criteria of availabilities to the prospective and present buyers. (1)LOCATION FACTORY
Plot No. D 233/55, Division-A, Changodar GIDC, Ahmedabad. GUJARAT.
(2) COVERAGE The coverage of SUNRAJ SPICES has been extended in the whole of Gujarat state through its dealers network and has one spices manufacturing unit at AHMEDABAD. (3) DISTRIBUTION CHANNEL Distribution means making available right product, at a right place in right quality, at a right time in right condition by the most effective mode. DISTRIBUTES CHANNEL OF SUNRAJ SPICES: Plant location ? Storage ? Dealers ? Retailers ? Customers
Territories:
We have planed to open 3 branches at 3 different places. 1) Palanpur, 2) Visnagar, 3) Vijapur
1) 31, Shreeji Market Char-rasta Visnagar Pin:384315
2)
15,Satelite Shopping Center Gurunanak Chock Palanpur Pin:385001
3) 27, Maniratan Complex T.B Hospital Road Vijapur Pin:382870
PRICE
Price means consideration for any goods or services which the customers pays to the producer. Price is the only mix in the marketing mix which generated revenues for the Company. In order to arrive at the most acceptable price level the marketer needs to have information of 3 C’S. 1. Customer. 2. Competition. 3. Cost structure. ? Customer The product SPICES are required by people for cooking foods. hence our Company has decided such a price as suits to every one to maximize its market share. ? Competition The price of SPICES has been so decided or kept lower than its competitors so as to penetrate the whole market otherwise the Company would not be able to grasp the maximum benefits from the markets. ? Cost structure The Company has arrived at such a price that does not give it any kind of losses. The optimum cost structure has been adopted that enables the Company to earn reasonable profit. The over leaf are the factors affecting the price of product: ? ? ? ? ? Marketing Objects Marketing mix strategy Cost Nature of marketing Demand
? Government
PRICE QUOTATIONS OF SPICES AT SUNRAJ SPICES
Particulars Price /ton
Turmeric Black pepper Chilly PACKAGINGS :250GM PARTICULARS SUNRAJ turmeric SUNRAJ black pepper SUNRAJ chilly PACKAGINGS :500GM PARTICULARS SUNRAJ turmeric SUNRAJ black pepper SUNRAJ chilly PACKAGINGS : 1kG PARTICULARS SUNRAJ turmeric SUNRAJ black pepper SUNRAJ chilly
Rs.55000 Rs.100000 Rs.75000
RS 15 25 20
RS 30 50 40
RS 60 100 80
Promotion
Promotion is the term taken From the Latin word “Prom over” Which means moving from one end to another. In marketing, Promotion means all those tools through which the marketer communicates its Products to the customer. It also includes different means that he uses to increase the service of its products. PROMOTION TOOLS Advertising Sales promotion Public relation Personal selling Direct marketing
? ADVERTISING
“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 trade magazines, Business publications, News paper, Television, wall painting, yellow pages and circulars sent through the mail. Advertising agencies have always been intermediaries between and the mass media. But we have industrial buyers like dealers only in which our products are used as intermediate goods. They will attract towards the product by discount rates, quality, commission, and durability along with the advertisement.
5 M’S OF ADVERTISING Mission Media Money Message Measurement
(1) Mission:
To create dealer’s and consumers awareness. To create a favorable Company image. To encourage immediate sales.
(2)Money: Decide the Advertising Budget Deciding about the advertising budget depends upon the following factors: a. Stage in product life cycle. b. Market share and consumer base. c. Competition. d. Advertising frequency. In our product the prices of advertising are as follows: Pamphlets at Rs 1000 per 5000 copies in local area. Catalogue at Rs 20. Television at Rs. 10,00,000 for 2 minute advertisement a day in etv guj.
(3)Media: Pamphlets Yellow pages Catalogue
Television Wall Paintings News papers Hoardings
(4)Message: The message selection depends upon the following criteria: Message generation. Message evaluation and selection. Message execution. Our message is “WITHOUT WHICH YOUR FOOD IS INCOMPLETE”. (5) Measurement: The demands for our products have been increased during 5 years and advertising is one of the reasons for that. Thus good planning and control of advertising can increase the sale of the product.
Vision
? ? ? ? ? To pursue excellence in quality with the futuristic approach. To keep abreast of changing consumer perception. To provide comprehensive value for money to our deserving consumers. An aggregate commitment towards quality through technical and Professional perfection. A steadfast dedication to qualify attainment of maximum satisfaction.
MARKET RESEARCH PROCESS
1. DEVELOP THE RESEARCH PLAN The next step of marketing research is to develop a step by step plan regarding decision factors like source of data, data collection method, sampling plan and contact method. SOURCES OF DATA The data sources can be primary and secondary we have used both. PRIMARY DATA Primary data are the raw data and structures of variables that have been specifically collected and assembled for a correct information research problem. Our research for primary source consists of companies own records. We visited the manufacturing units of spices to get information. SECONDARY DATA The information that is collected from contractors, dealers of spices.
Data collection method
Research Approaches
1. Observational research 2. Focus groups method 3. Survey method 4. Behavioral research 5. Experimental research
We used the survey research through questionnaire and behavioral data by analyzing manufacture, dealers and consumers.
Research Instruments 1. Questionnaire 2. Psychological tools 3. Mechanical devices 4. Quantitative measures The measure research instruments that we used were Questionnaires of Dealers and Consumers. Sampling plan The marketing researcher must design sampling plan which consist of three components such as: Sampling unit: Dealers of Ahmedabad , Consumers of Ahmedabad. Sample size: 50 dealers. 100 consumers. Sampling procedure: For dealers, random sampling. For consumer, selective sampling.
CONTACT METHOD There are various ways, mail, and telephone, personal or online interview to contact the people. But we use only direct contacts with the dealers and consumers for filling questionnaires.
1. Collect the information The data collection phase of marketing research is generally the most expansive and the most prone to error. In case of consumer’s survey, we have faced some problem because of having selected selective sampling procedure for consumers, we had some difficulties in finding selected consumes. Though collecting the information is mostly prone to error we have tried our best to cover all possible aspects so that research will be able to give us correct idea of current scenario. 2. Analysis of the information The data collected in the previous stages have to be arranged properly and orderly. They have to be carefully processed and edited so as to make a comparative study.
OBJECTIVES OF CONDUCTING A SURVEY
Surveys are best suitable way for descriptive research. Companies undertake survey to learn about people's knowledge, belief, preferences and satisfaction. It requires development of a survey instruments, usually a questionnaire which the respondent is asked to fill up. When one Company enters in the market, it requires identifying specific Objectives which is the basic of Company's position in the market. Our Main short term objectives before entering into the market will be: (1) Create awareness regarding the product spices in future. (2) Get our new Company to the notice of consumers and dealers. Long term objectives (1) Improve and matches qualify level to get customer satisfaction. (2) Maximizing the profit.
QUESTIONNAIRE
Dealer survey
K.S.SCHOOL OF BUSINESS MANAGEMENT
Subject: Market survey Questionnaires for identifying the preference and satisfaction level of dealers for the product Spices by the students of third year M.B.A. 1. Name of the dealer’s COMPANY: ___________________________________________________.
2. Dealer’s Name:____________________________________________.
3. Address: ____________________________________________________ __________________________________________________________. 4. Since how many years are you in field of spices industry? [ ] less than 5 years. [ ] 5 to 10 years. [ ] more than 10 years.
5. Which type of Spices do you sell? (Please name them along with their approximation prices).
No. 1. 2. 3. 4. Turmeric Black pepper Chilly
Type
Price
Any other (please mention below)
6. Which is your highest selling type of Spices among all of the mentioned above? (Quantity and amount). Give the details as per the preferences of customers. No. 1 2 3 4 Type Quantity Price
Give the reasons of preferences above mentioned:
________________________________________________________.
7. What is your average monthly turnover? ________________________________________________________.
8. Do you directly purchase spices from the Company or is there any intermediary? Yes [ ] No [ ] If yes please mention the name: _______________________________________________________. 9. Is there any noticeable hike over the turnover during any particular season? Yes [ ] No [ ] If yes then in which month or season? _______________________________________________________. 10. What is the profit margin per unit of spices? 0-5% [ ] 6-10 [ ] More than 10% [ ]
11. Who are your customers? Mention below: Consumers [ ]
Institutional buyers
[ ]
Any other______________________________________. 12. As per your experience which are the factors that customers mostly considers while purchasing Spices? Price [ ] Attractive offers [ ] Quality [ ] Size [ ] Any other _____________. 13. Have you ever come across any complaint from your customers? Yes [ ] No [ ] If yes mention the complaint easy availability [ ]
14. Are you giving any kind of advertisement? Yes [ ] No [ ] If yes mention the medium. T. V. [ ] Radio [ ] Hoardings [ ] Newspaper [ ] Any other______________________________. 15. Does the Company help you in advertising? Yes [ ] No [ ]
If yes mention the types of help. _________________________________________________________ 16. Would you like to give any suggestion? _________________________________________________________
Thank You…
FINDINGS
1. YEARS IN THE FIELD OF SPICES INDUSTRY.
Less than 5 years 5 to 10 years Mora than 10 years
10 17 23
Interpretation :
The number of dealer is 50. We found out that majority of dealers dealing in this business are more than 10 years.
2.WHICH TYPE OF SPICES DO YOU SELL ?
TYPES TURMERIC BLACK PEPPER CHILLY
Below 200 10 14 6
200-400 12 15 10
400-600 3 4 0
>600 5 6 0
16
14
12 10 8 6
4
TURMERIC BLACK PEPPER CHILLY
2 0 Below 200 200-400 400-600 >600
Interpretation :
We found out that majority of dealers sell product in between 1000 ton to 2000 ton.
3.WHAT IS YOUR AVERAGE MONTHLY TURNOVER ?
TURNOVER 50 TO 100 LAC 100 TO 150 LAC 150 TO 200 LAC 200 TO 250 LAC 250 TO 300 LAC ABOVE 300 LAC DEALERS 20 10 8 6 4 2
Interpretation :
We found out that majority of dealers have turnover between 50 to 100 lacs.
4.DO YOU PURCHASE SPICES FROM THE COMPANY?
YES NO
36 14
Interpretation :
We found out that majority of dealers directly purchase spices from companies.
5.IS THERE ANY NOTICEABLE HIKE OVER THE TURNOVER ANY SEASON ?
YES NO 16 34
Interpretation :
We found out that majority of dealers do not notice hike over turnover during any particular season.
6.WHAT IS THE PROFIT MARGIN OF SPICES ?
0-5% 40 6-10% 10
Interpretation :
The range of profit margin for the spices business is between 0-5%.
7.WHO ARE YOUR CUSTOMERS ?
ONLY CUSTOMER 10
ONLY INSTITUTIONAL CUSTOMERS 10
BOTH 30
ONLY CUSTOMER ONLY INSTITUTIONAL CUSTOMERS BOTH
Interpretation :
The customers for spices business are both customer and institutional customers like hotels, catering etc.
8.WHICH ARE THE FACTORS THAT CUSTOMERS MOSTLY CONSIDER WHILE PURCHASING SPICES ?
FACTORS Price Quality Size Easy availability Attractive offers NO. OF DEALERS 30 20 14 17 4
NO. OF DEALERS
30 25 20 15 10 5 0
NO. OF DEALERS
Interpretation :
Customers mostly prefer price, quality, size while purchasing spices.
9.ARE YOU GIVING ANY ADVERTISEMENT ?
YES NO 29 21
35 30 25 20 Column F 15 10 5 0 YES NO
Interpretation :
We found out that majority of dealers are advertising their product by way of hoardings.
10.DOES THE COMPANY HELP YOU IN ADVERTISING ?
YES NO 11 39
45 40 35 30 25 20 15 10 5 0 YES NO Column F
Interpretation :
We found out that Gnerally,company does not help to give an advertisement.
QUESTIONNAIRE Consumer’s survey
K.S.SCHOOL OF BUSINESS MANAGEMENT
Subject:Market survey Questionnaires for identifying the preference
and satisfaction level of consumer’s for the product Spices by the students of third year M.B.A. 1. Name: _____________________________________. 2. Occupation: _______________________________.
3. What is the general size of spices you mostly purchase? Turmeric : ____________________________________. Black pepper : ____________________________________. Chilly : ______________________________________. Any other____________________________________.
4. How much spices do you purchase in a month? Turmeric : ____________________________________. Black pepper : ____________________________________. Chilly : ______________________________________.
Any other____________________________________.
5. Which factor do you mostly consider while purchasing the spices? Price Quality
[ ] [ ]
Discount scheme [ ] Durability [ ]
Easy availability [ ]
6. Mostly from which source do you come to know about spices? News paper [ ] Hoardings [ ] T.V. [ ] Sales representatives [ ]
7. What is your satisfaction level as far as the following factors are concerned in regards to the spices you are using? ( ?)
Factors
Highly satisfied
Satisf ied
neutral
Dissatisfied
Highly Dissatis fied
Price Quality Easy availability Durability Discount
8. Would you like to give any suggestion? _________________________________________________________
Thank You
1.GENERAL SIZE OF SPICES YOU PURCHAES MOSTLY.
SPICES TURMERIC BLACK PEPPER CHILLY 250GM 16 48 14 500GM 34 36 28 1000GM 50 16 58
70 60 50 40 30 20 10 0 1 2 3
TURMERIC BLACK PEPPER CHILLY
Interpretation :
We found out that Customers buy black pepper in 250gm and turmeric and chilly in 1000gm.
2.HOWMUCH SPICES YOU PURCHASE IN A MONTH (Gm) ?
SPICES TURMERIC CHILLY Below 250 16 18 250-500 52 18 58 500-1000 18 14 14 above1000 14 12 10
BLACK PEPPER 56
70 60 50 40 30 20 10 0 1 2 3 4
TURMERIC BLACK PEPPER CHILLY
Interpretation :
We found out that Customers buy black pepper in 250gm and turmeric and chilly in 250 to 500gm in a month.
3.WHILE PURCHASING SPICES WHICH FACTOR YOU MOSTLY CONSIDER ?
FACTORS PRICE QUALITY EASY AVAILIBILITY DISCOUNT DURABILITY NO. OF RESPONDENTS 80 48 14 20 12
NO. OF RESPONDENTS
PRICE
QUALITY EASY AVAILIBILITY
DISCOUNT
DURABILITY
Interpretation :
We found out that Customers mostly prefer price,quality while purchasing spices.
4.FROM WHERE DO YOU GET INFORMATION ?
SOURCE OF INFORMATION NEWS PAPER T.V SALES REPRESENTATIVE HOARDINGS NO. OF RESPONDENTS 28 32 18 56
NO. OF RESPONDENTS
NEWS PAPER
T.V
SALES REPRESENTATIVE HOARDINGS
Interpretation :
We found out that Customers get the information about spices from news papers, hoardings etc.
5.SATISFACTION LEVEL AS FAR AS FACTORS.
FACTORS PRICE QUALITY HIGHLY SATISFIED 16 30 SATISFIED 30 14 28 26 14 NEUTRAL 40 38 14 24 22
PRICE
DISSATISFIED 10 14 4 10 20
HIGHLY DISSATISFIED 4 4 0 2 2
EASY 54 AVAILIBILITY DURABILITY DISCOUNT 38 8
40 35 30 25 20 15 10 5 0 HIGHLY SATISFIED SATISFIED NEUTRAL DISSATISFIED HIGHLY DISSATISFIED
PRICE
Interpretation :
We found out that MOST OF Customers are highly satisfied in easy availibility and neutral in price.
COST OF PROJECT
(Rs. In lacs)
A S S E T S PLANT & MACHANIRIES PLANT & MACHANIRIES LAND & BUILDING
RS.
RS.
10.00 37.00
FURNITURE & FICTURES
4.20
MISC.ASSETS
1.00
Pre-operative and Preliminary Expense
0.50
Contingency Workin Capital Margin
3.30 4.00
60.00 TOTAL
MEANS OF FINANCE
(Rs. In lacs)
SOURCES CAPITAL CONTRIBUTION RS. 34.80 34.80 RS.
BANK FINANCE - TERM LOAN
25.20 25.20
TOTAL
60.00
60.00
COST OF LAND
PARTICULARS SQ.FT RATE TOTAL(RS)
Cost Of Land Docu. Charges Other Charges TOTAL
5000
300
1500000 150000 50000 1700000
COST OF CONSTRUCTION
PARTICULARS
SQ.FT
RATE
TOTAL(RS)
CONSTRUCTION COST TOTAL
2500
800
2000000
2000000
COST OF PLANT & MACHINERY
NO. PARTICULARS QTY. PRICE TOTAL(RS)
1 2 3 4
DISINTEGRATER SPICE GRINDING MACHINE PLASTIC SEALING MACHINE WEIGHING SCALES TOTAL
4 4 6 12
190000 45000 6000 2000
760000 180000 12000 24000 1000000
COST OF FURNITURE
PARTICULARS QUANTITY PRICE
(Rs.) AMOUNT
Sofa set Revolved Chair Comfort Chair Cabin Table Cupboard Dustbin Air Condition Lights Ceiling Fans Exhaust Fan Dinning Table Electrification Others TOTAL
3 20 8 9 2 10 6 70 10 15 2
5000 1500 1000 2500 5000 100 20000 300 1200 1200 2000
15000 30000 8000 20000 10000 1000 120000 21000 12000 18000 4000 150000 11000 420000
BANK LOAN PAYMENT
Rs.in thousand
Term Loan Interest & Repayment Loan Amount Rate of Interest Installments Repayment mode YEAR QUARTER OPENING 1ST YEAR I st April May June July August September October November December January February March 2ND YEAR 2520 2478 2436 2394 2352 2310 2268 2226 2184 2142 2100 2058 42 42 42 42 42 42 42 42 42 42 42 42 504 2478 2436 2394 2352 2310 2268 2226 2184 2142 2100 2058 2016 25.2 24.78 24.36 23.94 23.52 23.1 22.68 22.26 21.84 21.42 21 20.58 274.68 Monthly 60 Monthly Installments PRINCIPAL INST. YR.REPAY CLOSING INTEREST AMOUNT YR.INTT. 2520 12 with no moratorium 42
II nd
April May June July August September October November December January February March 3RD YEAR
2016 1974 1932 1890 1848 1806 1764 1722 1680 1638 1596 1554 1512 1470 1428 1386 1344 1302
42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 504
1974 1932 1890 1848 1806 1764 1722 1680 1638 1596 1554 1512 1470 1428 1386 1344 1302 1260
20.16 19.74 19.32 18.9 18.48 18.06 17.64 17.22 16.8 16.38 15.96 15.54 15.12 14.7 14.28 13.86 13.44 13.02 214.2
III rd
April May June July August
September
October November December January February March 4thYEAR IVth APRIL May June July August September October November December January February
1260 1218 1176 1134 1092 1050 1008 966 924 882 840 798 756 714 672 630 588
42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 42 504
1218 1176 1134 1092 1050 1008 966 924 882 840 798 756 714 672 630 588 546
12.6 12.18 11.76 11.34 10.92 10.5 10.08 9.66 9.24 8.82 8.4 7.98 7.56 7.14 6.72 6.3 5.88 153.72
March 5TH YEAR V th April May June July August September October November December January February March
546
42
504
504
5.46
93.24
504 462 420 378 336 294 252 210 168 126 84 42 Principal Repayment
42 42 42 42 42 42 42 42 42 42 42 42 504 2520
462 420 378 336 294 252 210 168 126 84 42 0
5.04 4.62 4.2 3.78 3.36 2.94 2.52 2.1 1.68 1.26 0.84 0.42 Interest 32.76 768.6
RAW MATERIAL
RAW MATERIAL COST @ 100%
S.N. ITEM QTY. RATE RS
35000 60000 10000
TOTAL (LACS)
128.5 63 15.7 207.2
1
TURMERIC
367.5 105 157.5 630
2 BLACK PEPPER 3 CHILLY TOTAL
R.M.CONSUMED
(Rs. In lacs) YEAR 1 2 3 4 5
RAW MATERIAL TOTAL
(Rs. In lacs)
120 120
130 130
140 150.00 160.00 140 150.00 160.00
R.M.PURCHASE
YEAR RM CONSUMED ADD :-CL ST OF RM LESS :- OP ST RM PURCHASED 1 120 12 0 132 2 130 18.5 12 136.5 3 140 20.5 18.5 142 4 150.00 22.5 20.5 152.00 5 160.00 24 22.5 161.50
POWERCOST
RS IN LACS)YEAR
1
2
3
4
5
POWER COST
4.32
4.68
5.04
5.4
5.76
TOTAL
4.32
4.68
5.04
5.4
5.76
PACKINGCOST
(Rs. In lacs)
YEAR
EXPECTED SALES
RS 500/TON
1
1.8
2
1.95
3
2.1
4
2.25
5
2.4
TOTAL
1.8
1.95
2.1
2.25
2.4
DEPRECIATION
Depreciation as Per Income Tax Act :
(Rs. In lacs)
Rate 0.15 0.1 0.1 0.6 0 Opening Block Less
epreciation Closing BlockGross Block Plant & Machinery Building Furniture & Fixture Other Fixed assets LAND
cost 10 20 4.2 1 17
1 8.5 18 3.78 0.4 17 52.2 4.52 47.68
2 7.23 16.2 3.4 0.16 17 47.68 3.69 43.99
3 6.15 14.66 3.06 0.06 17 43.99 3.14 40.85
4 5.23 13.12 2.76 0.02 17 40.85 2.72 38.13
5 4.45 11.8 2.48 0.008 17 38.13 2.39 35.74
SALARY STRUCTURE
DIRECT WAGES
PARTICULARS
NO. OF NO. OF WAGES/MNTH TOTAL(P.A) MONTH PERSON SUPERVISOR 12 2 8000 192000 SKILLED WORKER 12 9 6500 702000 UNSKILLED WORKER 12 24 3500 1008000 TOTAL 1902000
ADMINISTRATION &SELLING STAFF
PARTICULARS M.D FIN.MGR MKT.NGR SALES EXECUTIVES ACCOUNTANT WATCHMAN TOTAL COST/MNTH TOTAL COST/ANNUM NO.OF EMPLOYEE 1 1 1 4 1 2 SALARY TOTAL PER MNTH 40000 20000 15000 7000 10000 2500
40000 20000 15000 28000 10000 5000 118000
14.16 LACS
FACTORY OVERHEADS
(Rs. In lacs)
PARTICULAR Power cost Stores & spares Repairs & Maintenance Packing Cost Depreciation TOTAL
1 4.32 0.3 0.45 1.8 4.52 11.39
2 4.68 0.47 0.5 1.95 3.69 11.29
(Rs.)
3 5.04 0.5 0.53 2.1 3.14 11.31
4 5.4 0.6 0.57 2.25 2.72 11.54
5 5.76 0.7 0.63 2.4 2.39 11.88
SELLING AND DISTRIBUTION OVERHEADS
PARTICULARS Salary(+5%) Advertising Expenses Discount(2%) Transportation Cost TOTAL
1 516000 100000 486000 60000 1162000
2 541800 240000 526500 86100 1394400
3 568800 400000 567000 137000 1672800
4 597300 600000 607500 202500 2007300
5 627200 800000 648000 333600 2408800
ADMINISTRATIVE OVERHEADS
(Rs.)
PARTICULAR Salary Insurance Stationary Telephone Expenses Repairs & Maintenance Audit fee R&D exp. Office rent TOTAL
1 2 3 4 5 900000 945000 992200 1041800 1093400 40000 40000 40000 40000 40000 5000 10000 17800 10000 20000 10000 40000 50000 40000 50000 20000 50000 50000 30000 80000 5000 15000 20000 10000 20000 20000 100000 150000 100000 150000 0 0 0 180000 180000 1000000 1200000 1320000 1451800 1633400
STATEMENT SHOWING INSTALLED CAPACITY AND QUANTIATIVE DETAILS
PARTICULARS
INSTALLED CAPACITY (IN TONNES) TURMERIC BLACK PEPPER CHILLY
1
2
3
4
5
350 100 150 600
350 100 150 600
350 100 150 600
350 100 150 600
350 100 150 600
A.PROJECTED PRODUCTION TURMERIC BLACK PEPPER CHILLY B.OP.ST. TURMERIC BLACK PEPPER CHILLY C.CL.ST. TURMERIC BLACK PEPPER CHILLY D.SALES(A+B-C) TURMERIC BLACK PEPPER CHILLY E.SALES (IN LACS) TURMERIC BLACK PEPPER CHILLY
210 60 90 360 0 0 0 0 0 0 0 0 210 60 90 360 115.5 60 67.5 243
229.5 66.3 99.5 395.3 0 0 0 0 2 1.3 2 5.3 227.5 65 97.5 390 125.125 65 73.125 263.25
245 70.3 105 420.3 2 1.3 2 5.3 2 1.6 2 5.6 245 70 105 420 134.75 70 78.75 283.5
263.5 74.75 112.5 450.75 2 1.6 2 5.6 3 1.35 2 6.35 262.5 75 112.5 450 144.375 75 84.375 303.75
280.5 79.65 120.5 480.65 3 1.35 2 6.35 3.5 1 2.5 7 280 80 120 480 154 80 90 324
F.EXPECTED FIN.GOODS TURMERIC BLACK PEPPER CHILLY
0 0 0 0 0
1.1 1.3 1.5 3.9 3.9
1.1 1.6 1.5 4.2 4.2
1.65 1.35 1.5 4.5 4.5
1.925 1 1.875 4.8 4.8
G.CL.ST. OF FIN.GOODS
CASH FLOW STATEMENT
(Rs. In lacs)
PARTICULAR A. SOURCES OF FUND Net Profit before taxes with interest added back but after depreciation Capital including Reserves Depreciation Priliminery exp. w/off Term Loan Increase in creditors Increase in Other Liab. Total A B. DEPOSITION OF FUNDS Preliminary and Preoperative Exp. Increase in Capital Expenditure Increase in current Assets Inentories Debtors Investments Others Decrease in long term loans Decrease in creditors Intrest Taxation Total B C. Opening Balance 12.85 20.25 6.66 7 0 0 5.328 5.73 110.4 0 4.193 7.38 34.63 1 10.53 1.75 4.44 1.3 5.04 0 4.32 5.9 5.04 0.01 4.116 3.88 6.83 29.81 2.52 7.1 6.92 28.89 4.83 29.03 7.7 1.89 1.7 2.82 1.8 4.18 4.1 5.04 0 1.82 1.5 0 9.9 5.04 0.08 3.77 34.8 4.52 0 20.16 10.06 27.04 111.4 0 3.69 0.1 0 0.58 3 36.15 0 3.14 0.1 0 0 2 32.12 31.76 0 2.72 0.1 0 0.47 1 31.34 0 2.39 0.1 0 0 2 24.42 28.78 26.88 27.47 26.85
1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
0.4 52.2
0 0
0 0
0 0
0 0
D. Net Surplus (A-B) E. Closing Balance
1 1
1.52 2.52
2.31 4.83
2.87 7.7
2.31 10.01
COST SHEET
(Rs. In lacs)
PARTICULARS Raw Material Consumed Direct Wages
Freight inward
1ST YEAR 120 19.02
21.42
2ND YEAR 130 19.97
23.95
3RD YEAR 140 20.97
25.42
4TH YEAR 5TH YEAR 150 22.02
27.04
160 23.12
28.56
Prime Cost Add.:- Factory O/H Factory Cost Add. :- Administration O/H Add. :- Op ST of F.G. Less :- Cl ST of F.G. Cost of Production Add :-S&d O/H Total Cost of Goods Sold Net Sales Profit before Interest Interest Operating Profit
160.44 11.39 171.83 10 0 0 181.83 11.62 193.45 217.97 24.52 5.328 19.19
173.92 11.29 185.21 12 0 3.9 193.31 13.94 207.25 236.13 28.88 4.193 24.69
186.39 11.31 197.7 13.2 3.9 4.2 210.6 16.73 227.33 254.3 26.97 4.116 22.85
199.06 11.54 210.06 14.52 4.2 4.5 224.28 20.07 244.35 272.46 28.11 3.88 23.68
211.68 11.88 223.56 16.33 4.5 4.8 239.59 24.09 263.68 290.63 26.95 3.77 23.18
(Rs. In lacs)
PROFIT & LOSS A/C
60.00% 1ST YEAR 243 25.03 217.97 65.00% 2ND YEAR 263.25 27.12 236.13 70.00% 3RD YEAR 283.5 29.2 254.3 75.00% 4TH YEAR 303.75 31.29 272.46 80.00% 5TH YEAR 324 33.37 290.63
WORKING CAPACITY OF WHOLE PLANT
A.
SALES less : excise duty net sales
B. 1 2 3 4 5 6 7 8
COST OF PRODUCTION Raw material Consumption Transpotation cost Power Stores & Spares Direct labour Packing Cost Repairs & Maintence Depreciation Sub - total B [ Total Cost of Production] Add : Op ST OF FIN. GOODS Deduct : Cl ST OF FIN. GOODS 120 21.42 4.32 0.3 19.02 1.8 0.45 4.52 171.83 0 0 171.83 130 23.95 4.68 0.47 19.97 1.95 0.5 3.69 185.21 0 3.9 185.21 140 25.42 5.04 0.5 20.97 2.1 0.53 3.14 197.7 3.9 4.2 197.4 150 27.04 5.4 0.6 22.02 2.25 0.57 2.72 210.6 4.2 4.5 210.3 160 28.56 5.76 0.7 23.12 2.4 0.63 2.39 223.56 4.5 4.8 223.26
C.
Sub - total [Total cost of sales ]
D.
Gross profit [A-C]
46.14
50.92
56.9
62.16
67.37
a Interest on unsecured loan b Interest on secure loan c Selling general and administrative expenses E. F. Sub-total [item a + b ] Operating profit [D-E] Preliminery & Issue Exp. G. H. I. Profit before tax/loss Provision for taxes Net profit (PAT) [F-G] proposed dividend Withdrwal / Remuneration to Partners J. P & L A/c Balance C/F
2.578 2.75 21.62
2.053 2.14 25.94
2.576 1.54 29.92
2.958 0.93 34.59
3.436 0.33 40.42
26.948 19.19 0.1 19.09 5.73 13.36
30.133 24.69 0.1 24.59 7.38 17.21
34.036 22.86 0.1 22.76 6.83 15.93
38.478 23.68 0.1 23.58 7.1 16.48
44.186 23.18 0.1 23.08 6.92 16.16
2.78 0 10.58
2.78 0 14.43
2.78 0 13.15
2.78 0 13.7
2.78 0 13.38
PROJECTED BALANCESHEET
As on 31 March
Rs in lacs
PARTICULERS A 1 a. b. 2 a. b. SOURCES OF FUNDS Shareholders funds Capital (equity share of Rs.10 each) Reserves and Surplus Profit and loss a/c Loan funds Secured loans Unsecured loans TOTAL OF A B 1 a. b. c. 2 3 a. APPLICATION OF FUNDS Fixed assets Gross block less depreciation Net block INVESTMENTS Current assets,loans and advances Closing stock of inventory Raw materials
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
34.8
34.8
34.8
34.8
34.8
10.58 20.16 15.2 80.74
25.01 15.12 20.53 95.46
38.16 10.08 25.56 108.6
51.86 5.04 29.58 121.28
65.24 0 34.36 134.41
52.2 4.52 47.68 6.66
52.2 8.21 43.99 11.1
52.2 11.35 40.85 15.42
52.2 14.07 38.13 19.6
52.2 16.46 35.75 19.6
12
18.5
20.05
22.5
24
Finished goods Other consumable spares b c d Sundry debtors Cash and bank balance Loan and advances Advances to suppliers of raw material and stores/ spare consumable Advance payment of taxes Total of a to d less: Current liabilities and a. b. c. Provision Creditors Provisions for tax Installment of T/ L deferred Total of a to c NET CURRENT ASSETS 4 Preliminary expenses not written off TOTAL OF B
0 0.85 20.25 1
3.9 0.98 22 2.52
4.2 1.02 23.7 4.83
4.5 1.09 25.5 7.7
4.8 1.11 27 10.01
7
8.3
14.2
18.3
28.2
5.73 46.83
7.38 63.58
6.83 74.83
7.10 86.69
6.92 102.04
10.06 5.73 5.04 20.83 26 0.4 80.74
10.64 7.38 5.04 23.51 40.07 0.3 95.46
10.63 6.83 5.04 22.5 52.133 0.2 108.6
11.1 7.10 5.04 23.24 63.45 0.1 121.28
11.02 6.92 5.04 22.98 79.06 0 134.41
WORKING CAPITAL
(Rs. In lacs)
PARTICULERS CURRENT ASSETS 1 2 3 4 5 Raw material Other consumable spares Finished goods Recievables Advances of suppliers of raw materials and stores/ spares consumables 6 A Cash & Bank Balance Total current assets CURRENT LIABILITIES 1 Creditors for purchase of raw materials and stores and consumable spares 2 3 Provision For Taxation Instalment of term loan Total current liabilities 22 5.04 37.1 25 5.04 40.68 27 5.04 42.67 28 5.04 44.14 30 5.04 46.06 10.06 10.64 10.63 11.1 11.02 41.1 1 2.52 56.2 68 4.83 79.59 7.7 10.01 95.12 12 0.85 0 20.05 7 18.5 0.98 3.9 22 8.3 20.05 1.02 4.2 23.7 14.2 22.5 1.09 4.5 25.5 18.3 24 1.11 4.8 27 28.2 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
B
Net working capital margin [A-B]
4
15.52
25.33
35.45
49.06
BREAK-EVEN ANALYSIS
(Rs. In lacs)
PARTICULERS BREAK EVEN POINT :TOTAL SALES
1ST YEAR
2ND YEAR 3RD YEAR
4TH YEAR
5TH YEAR
217.97
236.13
254.3
272.46
290.63
LESS :- VARIABLE COST Raw Materials Transpotation cost Power Stores & Spares Direct Labour Repairs & Maintence Packing Expense Selling & Administration Cost (Assumed 40% Variable) TOTAL CONTRIBUTION (SALES-VC) FIXED COST
epreciation Interest Selling & Administration Cost (Assumed 60% Fixed) Total Fixed COST BEP Sales(%)BEP Sales(RS)
120 21.42 4.32 0.3 19.02 0.45 1.8 8.65 175.96 42.01
130 23.95 4.68 0.47 19.97 0.5 1.95 10.38 191.9 44.23
140 25.42 5.04 0.5 20.97 0.53 2.1 11.97 206.53 47.77
150 27.04 5.4 0.6 22.02 0.57 2.25 13.84 221.72 50.74
160 28.56 5.76 0.7 23.12 0.63 2.4
16.17
237.34 53.29
4.52 5.328 12.97 22.818
54.32% 118.4
3.69 4.193 15.56 23.443 53.00%
125.15
3.14 4.116 17.95 25.206 52.76%
134.17
2.72 3.88 20.75 27.35 53.90%
146.85
2.39 3.77
24.25
30.41 57.00%
165.65
RATIO ANALYSIS
PARTICULAR LIQUIDITY RATIO Current ratio = C.A/ C.L. Liquid ratio= C.A.-Stock/ C.L.-B.O.D PROFITABILITY RATIO Gross Profit Ratio(%) GP/SALES*100 Net Profit Ratio NP/SALES*100 Debt-equity Ratio Debt / share capital Fixed Assets Turnover Ratio SALES/FA 1 2.24 1.63 2 2.7 1.71 3 3.32 2.2 4 3.73 2.5 5 4.44 3.1
21.17% 21.56% 22.37% 22.81% 23.18%
6.20%
7.30%
6.30%
6.10%
5.60%
77.91% 59.60% 48.85% 39.95% 34.36%
4.57
5.36
6.28
7.14
8.12
Debtors ratio DEBTORS+BR/SALES*300
28 days
28 days
28 days
28 days
28 days
Creditors ratio CREDITORS+BP/PURCHASE*300
23 days
23 days
22 days
22 days
21 days
Assumptions made for making this financial feasibility report:
SBI 12% Term Loan is taken against the security of the Land Documents. There are 300 Working days in a year. Manufacturing is done evenly in all the months throughout the year. Estimated production will be done and sales of them will be realized. The credit allowed to debtors is 30 days. The credit is received from creditors is also 30 days. Fixed assets are valued at historical cost less depreciation as per the Income Tax act, 1961 on WDV bases. Closing stock of Raw Material and Finished Goods has been valued on FIFO basis. Total capacity of plant is to manufacture 600 TONNES SPICES where as capacity utilize is 60, 65, ,70, 75,80 percentage for five years respectively. For calculating working capital requirements debtors are valued on Selling price. Discount is calculated at 2% of Sales. Raw material and finished goods is taken as 30 days. Direct labour is increase by 5% every year. From forth Year Company has decided to take three offices on rent in three different areas for its sales development.
EVALUATION OF PROJECT PAY BACK PERIOD
(Rs. In lacs)
2ND YEAR 17.21 3.69 0.1 21 38.98 PARTICULERS PAYBACK PERIOD PAT Add :- Depreciation Add: Preliminary Exp. (written off) TOTAL CASH FLOW Cummulative CF Total Project Cost 17.98 17.98 19.18 58.15 60 Net pay back period is 3 years and 1/4 month. 19.3 77.45 18.65 96.1 13.36 4.52 0.1 15.93 3.15 0.1 16.48 2.72 0.1 16.16 2.39 0.1 1ST YEAR 3RD YEAR 4TH YEAR 5TH YEAR
COST OF CAPITAL:
(Rs. In lacs)
Particulars share capital secure loan un-secure loan K 8% 8.29% 6.91% Amount 34.8 25.2 15.2 75.2 Cost 2.78 2.09 1.05 5.9
5.9/75.2*100=
7.85%
NET PRESENT VALUE
(Rs. In lacs)
Year 1 2 3 4 5 PAT 13.36 17.21 15.93 16.48 16.16 Depre. 4.52 3.69 3.14 3.72 2.39 Pre.Exp 0.1 0.1 0.1 0.1 0.1 CFAT 17.98 21 19.17 19.3 18.85 PVFACTOR 0.9272 0.8597 0.7971 0.7391 0.6853 PV 16.67 18.05 15.28 14.26 12.92
CASH-IN-FLOW LESS CASH OUT FLOW NPV
77.18 60 17.18
PROFITABILITY INDEX:
(Rs. In lacs)
PI =
PV OF CAS-IN-FLOW PV OF CASH-OUT-FLOW 77.18
PI=
60 1.286333333
INTERNAL RATE OF RETURN
Year 1 2 3 4 5 (@7.85%) PVFACTOR 0.9272 0.8597 0.7971 0.7391 0.6853
PAT 13.36 17.21 15.93 16.48 16.16
Depre. 4.52 3.69 3.14 3.72 2.39
Pre.Exp 0.1 0.1 0.1 0.1 0.1 (@20%) PV 15.63 15.88 12.6 11.03 9.37 64.51
CFAT 17.98 21 19.17 19.3 18.85
(@15%) PV 16.67 18.05 15.28 14.26 12.92 77.18 PVFACTOR 0.8695 0.7561 0.6575 0.5717 0.4971
PVFACTOR 0.8333 0.6944 0.5787 0.4822 0.4019
PV 14.98 14.58 11.09 9.31 7.58 57.54
= = = =
15% + 64.51 - 60.0 / 64.51 – 57.54 * 5 15 % + 4.51 / 6.97 * 5 15 % + 3.23 % 18.23 %
ACCOUNTING RATE OF RETURN:
PARTICULARS
AMOUNT
initial investment
60
average income ARR = INVST/AVG.INCOME
15.83 26.38%
CONCLUSION
By doing extensive research overall aspects we come to the conclusion that subject to the condition and circumstances the project is definitely economically and socially viable. We would finally like to conclude our project with a high feeling by having gained enormous knowledge. This task has provide us with the much needed a breath from the minute activities that one has to undergo. This includes thanks giving to the valued cooperation by the Company like J.P.FOODS that we visited for guidance purpose which provide us with financial data required for making this project but also our professors who gave us such a wonderful opportunity to learn so much about the practical aspects by the corporate world. We are also thankful to our project guide Ms.Ingita Jain.
BIBLIOGRAPHY
1. Marketing Management by Philip Kotler 2. Financial Management by I M PANDEY 3. Accountancy-4 by Sudhir Prakashan 4. Financial Management by KHAN & JAIN
WEBOGRAPHY:
1. www.google.com 2. www.wikipedia.com
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