Description
Incense is composed of aromatic plant materials, often combined with essential oils.[5] The forms taken by incense differ with the underlying culture, and have changed with advances in technology and increasing diversity in the reasons for burning it
1
A PRODUCT PROPSAL REPORT ON
INCENSE STICKS (AGARBATTI) SUBMITTED TO SAURASHTRA UNIVERSITY PREPARED BY JOBANPUTRA SNEHA D. T.Y.B.B.A. ROLL NO: - ____ SEAT NO: - _____ ACADEMIC YEAR: 2004-2005 INSTITUTE:K.H. MADHVANI ARTS & COMMERCE COLLEGE, PORBANDAR
2
K.H. MADHVANI ARTS & COMMERCE COLLEGE
This is to certify that Miss Sneha .D. Jobanputra, a student of T.Y.B.B.A has completed her project study under my supervision and guidance and prepared a report on following product “Incense Sticks” (Agarbatti).
Date
lace : - PORBANDAR Academic year: - 2004-2005
Signature of Guide Prof R.V.Keshwala
3
PREFACE
Under Entrepreneurship Development Programme, the Saurashtra University has made the provision of preparing a Product proposal report with a view to educate the student of management in a manner that they can come to know that what formalities are needed to establish a business unit. Under this programme, the student of T.Y.B.B.A has to prepare a report for comparison of information of company with its land, building, plant & machinery to start the company. This is an idea on practice given to a student which can be helpful in future for decision making. With a view to fulfill the objective of university, as mentioned above. I have made a Product proposal Report on Haridarshan Incense Sticks (Agarbatti). I hope that this shall be confirmed and accepted by the rules and regulations of the Entrepreneurship Development Programme as proposed by our University.
Sneha D Jobanputra
4
ACKNOWLEDGEMENT
I am extremely pleased to present this product proposal Report on Agarbati to Saurashtra University. I take this opportunity to express my gratitude to all the persons in this regard who have helped me. In this reference I am heartily thankful to our respected principal Dr J.S. Ramdatti and also very thankful to our Prof. R. V. Keshwala under whose guidance I have prepared this report. My special thanks to, Mr. Pathak and Mr. Pravin solanki of Ramakrishna mission also to Mr. Thanki of Shahid sumati sanstha who gave me guidance regarding product and related information. I express my deep sense of gratitude to my family and friends who have helped me in every aspect of preparing this project report on Incense Sticks.
Yours faithfully Sneha D Jobanputra
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INDEX
SR NO
PARTICULARS
PAGE NO
1)
INTRODUCTION ABOUT SMALL SCALE INDUSTRY
7
2)
GENERAL INFORMATIION
8
3)
PRODUCTIONDEPARTMENT
16
4)
PERSONNEL DEPARTMENT
24
5)
MARKETING DEPARTMENT
29
6)
FINANCIAL DEPARTMENT
31
7)
FUTURE PLAN
38
6
7
INTRODUCTION
Presently small scale industries are playing an important role in the development of economy. Importance of small scale industry can be hardly overemphasized in a developing country like India facing major economic problems of self employment and priority of capital. But now a day’s government is taking many measures for the importance and increment of small scale industry. In India the problem of unemployment is becoming more and more acute due to rapidly increasing population, insufficient capital investment generation of new job sector. In the beginning of first 5 year plan, there were 33 lacs unemployed persons, the figures which at present reached up to 450 lacs. As small scale industry are labor intensive they provide more employment compared to large scale industries. More employment could be provided through development of small scale industries. In India the cottage & small scale industries provided employment nearly to 24 million persons where as large scale industries provide only4.5 million persons. As far as employment is concerned small scale industries stands next to the agriculture so far the scale of decreasing unemployment importance should be given to small scale industries. Another important benefit of small scale industry is that it requires small investment to establish the unit compared to large scale unit which requires huge capital investment India also faces the problem of scarce capital. In small scale industries the returns are quick & hence generated returns may again form capital. Moreover export of goods earns previous foreign exchange form abroad worth Rs. 10,000 crores. Thus use of scarce capital resources in terms of employment and productivity. A small scale industry is presently defined as:“A unit engaged in manufacturing servicing, repairing, processing and presentation of goods having investment in plant & machinery at an original cost not exceeding Rs. 3 crores.”
8
GENERAL INFORMATION
CONTENTS
SR.NO
PARTICULARS
PAGE.NO
1)
Name Of The Organization
9
2)
Name And Address Of The Unit
9
3)
Address Of The Registered Office
9
4)
Biodata Of Partners
10
5)
Partnership Deed
12
6)
Licenses Required
13
7)
Products Manufactured
13
8)
How Idea Was Generated
14
9)
Reasons For Location:
15
9
Name of the organization
The name of the organization is Haridarshan sugandh vatika
Name and address of the unit
The name and address of the organization is Haridarshan sugandh vatika GIDC area Plot no 11 Porbandar-360577
Address of the registered office
The address of the registered office of the organization is Haridarshan sugandh vatika GIDC area Plot no 11 Porbandar -360577
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BIODATA OF PARTNERS
SNEHA D JOBANPUTRA
Full name Age Addresses
1. Office Haridarshan Sugandh Vatika GIDC Area Plot No 11 Porbandar-360577 Sneha D Jobanputra 21 Years
2. Resident
Neelkanth 29 Satyam Park Rajivnagar Narsan Tekari Area Porbandar- 360577
Academic qualification Nature of responsibility Experience Contribution of capital
B.B.A. With Advance Marketing Management Financial And Marketing Management. Worked As An Assistant In Kalpana Perfumery Works 50% Of Total Owners Contribution
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KHUSHBU S BHARALI
Full name Age Address
1.Office Haridarshan Sugandh Vatika GIDC Area Plot No 11 Porbandar 360577 Khushbu S Bharali 19 Years
2.Resident
Khushbu 19,Sitaram Nagar Opposite Airport. Porbandar 360577
Academic qualification Nature of responsibility Experience Contribution of
B.Com With Specialization In Accounts
Accounts And Production Management
Worked As An In Charge Of Accounts And Production Department In Elite Agarbatti Limited. 50% Of Total Owner’s Capital.
12
capital
PARTNERSHIP DEED
The partnership deed contains the terms and conditions relating to partnership and the regulation governing the internal management of the organization. The content of partnership deed is settled by mutual consent of the partners which are as under.
1) Name of the firm
Haridarshan sugandh vatika
2) Capital contribution
The contribution of own capital of each partner is as under Sneha d jobanputra Khushbu s bharali 50% 50%
3) Distribution of profit or loss
Sneha d jobanputra Khushbu s bharali 50% 50%
4) Remuneration and drawings of the partners
No partner is entitled to get remuneration in the form of salary from the firm. Each partner is allowed to draw maximum 24000 Rs. Per year.
5) Provision in case of death, insolvency and retirement of a partner
Death or insolvency of any of the partners will not cause for dissolution of the unit but any of the relative of partner capable to handle her responsibility will be appoint as partner.
6) Interest on capital and drawings
Each partner of the firm is entitled to get 15% interest on capital and no interest would be charged on drawings if there is any dispute on matters
13
except the above it will be solved as per the provisions of the partnership act 1932.
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LICENSES REQUIRED
An application has already been made for the following licenses required for the establishment of a firm. 1) 2) 3) 4) 5) Sales Tax No Permanent Account No Local Authority SSI Reg No Subsidy Reg No
PRODUCTS MANUFACTURED
The firm manufactures only one product and that is incense sticks (agarbatti) of course they are available in number of varieties that is in different fragrance according to the demand of the customers some of the common fragrances are 1) 2) 3) 4) 5) jasmine lavender mogra rose Sandal etc.
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HOW IDEA WAS GENERATED
I was looking for a product which is used by each and every person from child to old person whether male, female, rich, and poor and also by people of every caste and religion and at each and every place. Suddenly one day when I was doing my daily pooja to god I lighted the agarbatti and this is how the idea was generated agarbatti is the product used by every one whether child or old person, rich or poor, and at every place whether home ,temple, office , shop, schools, colleges, or any kind of institution or business undertakings. Because almost all people believe in god and have faith in him and they worship god. Also people of India are religious by nature and burning of agarbatti is as old as India itself. From times immemorial exotic aromas and scents have been a part of the Indian way of life whether it is a religious offering or an aid to medication. Incense transmits purity and develops pleasant atmosphere. This is how the idea was generated and I decided to start a unit producing incense sticks and am very thankful to god as I believe he only has given me this idea and as most of the people of India I am also religious by nature.
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REASONS FOR LOCATION
Location of any business is very important whether it is a small scale industry or a large scale industry many factors like availability of raw materials, power and water supply, labor etc; affect the various stages of production process in unit. The favorable reasons for the location of this unit are as follows:
1)
Availability of raw material
Raw material is very important for any production unit whether big or small. The raw materials required for making incense sticks are: 1) 2) 3) 4) 5) 6) 7) Bamboo sticks Jigat powder Wooden coal powder Water Coating powder Perfume/scent White oil/D.E.P (Di Ethail Petholet)
All the above mentioned materials are easily available to the unit whenever required.
2)
Power and water supply
As the unit is located in GIDC industrial area the water and power supply are regular and supply is continuous which helps to work in unit uninterrupted.
(3)
Labor
The unit is a labor intensive unit almost all of the work is done by labor power. The unit is getting all type of labor i.e. semiskilled, unskilled etc; very easily around the unit.
(4) Transport facility
The final product to reach the consumption requires transport facility and Porbandar is having along with rail and road transport the air and water transport facility also which will help to grow unit in future to a great extent.
17
18
PRODUCTION DEPARTMENT
CONTENTS
sr no
particulars
page no
1)
Total Number Of Products.
17
2)
Raw Materials Required.
17
3)
Suppliers Of Raw Materials.
19
4)
Equipments Required And Sources.
20
5)
Production Process.
21
6) 7)
Installed And Utilized Capacity. Uses Of The Product.
23 23
19
TOTAL NUMBER OF PRODUCTS
The product produced in the unit is only the main products i.e. incense sticks (agarbatti). But it is available in different fragrances according to the demand of customers some of the common fragrances agarbatti are: 1) 2) 3) 4) 5) Jasmine Lavender Mogra Rose Sandal etc
RAW MATERIALS REQUIRED
The following are the raw materials required to manufacture agarbatti: 1) 2) 3) 4) 5) 6) 7) Bamboo sticks Jigat powder Wooden coal powder Water Coating powder Perfume/scent White oil/D.E.P (Di Ethail Petholet)
20
Explanation of raw materials and uses
1) Jigat powder It is derived from the back of tree it has natural gumming properties this powder is mixed with other ingredients to make the dough for incense sticks. 2) Wooden coal powder This powder is obtained from coal made from wood. The powder used is very smooth there are no lumps in it. It is an important element in making dough for incense sticks and it helps the incense sticks it keep burning for long time. 3) Bamboo sticks Bamboo sticks are made from bamboo. These sticks are available in the market in different sizes in respect of length and thickness. Incense stick is made by rolling the dough around the stick. 4) Water This is the essential element for making the dough. If the jigat powder is not that much sticky then gum is mixed with water and that water is used to make the dough which increases the stickiness of dough which helps in making the dough better. 5) Coating powder This powder is available in different colors it is used for giving the incense sticks different colors. 6) D.E.P. (Di Ethail Petholete)
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It contains some elements of fragrance. It is expensive. But in the incense sticks made from D.E.P. the fragrance remains for a very long time. 7) Scent/perfume Scent is used for fragrance. It may be artificial or natural. Natural scent is expensive than the artificial and less in use in comparison to artificial scent.
SUPPLIERS OF RAW MATERIALS
1) Jamna Agarbatti Works: M/S Shankarlal Thakorelal Bharwani Small Chipwadi Near Gujarat Kanya Shala Vadodra Gujarat 2) Navy Products Near Sonaliya Talavadi Bapunagar Ahmedabad 3) Prakash Agarbatti Works Near Khodiyar Mata Temple Flat No 788/5746 Bapunagar Ahmedabad 4) Raja Corporation Near Mamu Nayak Pod Ahmedabad
The above mentioned are the suppliers of all raw materials except scent. The suppliers of scent are as follows: 1) Amit Traders Bapunagar Ahmedabad 2) Shah Agency Mamu Nayak
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Ahmedabad 3) Haren Traders Near Central Bus Station Dhebar Road Rajkot 4) Purvi Enterprises 6, Rajput Para Rajkot
EQUIPMENTS REQUIRED AND SOURCES
The equipments required to make incense sticks are mentioned as follows 1) Big vessels 2) Galvanizes 3) Small wooden stand with flat surfaces 4) Measure in litres 5) Barrels 6) Weighing machines The above mentioned equipments are very common and hence are available at any concerned shop in the city very easily in required quantity.
23
PRODUCTION PROCESS
The production process of making incense sticks is explained in various stages as follows:
Mixing
First of all take jigat powder in required proportion and filter them finely than take the mixture of powder in a big vessel.
Making dough
After taking the mixture of powder in a big vessel pour the required amount of water in the mixture and make tight dough. It must be noted that water is not added in excess quantity than required so that the dough does not become loose.
Making the dough soft
Afterwards squeeze the tight dough continuously with all energy to make it soft without using water.
Rolling on bamboo sticks
Than take the dough equal to a groundnut seed. Keep it and stick it at the one end of the bamboo stick and keep it on the wooden stand having a flat surface. Keep the bamboo stick on it and roll the dough around the stick on the stand on the other hand keep empty space on the stick about 1 to 1.5 inches. Roll the dough equally/evenly around the stick. This happens when we roll the dough from one end of the stick to the other and pushing while rolling and this is how incense stick is made.
Drying
When all the sticks are made in this way than they are kept to dry in open and airy space for about a day. These sticks are called raw sticks. 24
Adding fragrance by making compound
After wards fragrance is added to the raw sticks which are called a compound or scent or perfume. It is ready made and easily available in the market. To make a high quality compound 300 to 400 grams of favorite perfume/scent is added to D.E.P. of 1 liter and the compound is ready. Then this compound is coated of agarbatti by dipping process.
Dipping process
In dipping process the compound can be coated on sticks easily, fast and evenly in all and also the waste of compound is almost nil. In the deep vessel pour the compound and than make a big bundle of sticks and dip the bundle in the vessel filled with compound. The bundle is kept in it for a while so that the sticks bundled absorb the compound. Afterwards the bundles of sticks are taken out of the compound kept in an empty vessel big in size. The excess perfume not absorbed by the sticks is kept free and are spread in an open place in order to drip. When they are dried the final product is made.
Packing
When the final product is made it is sent for packing in attractive boxes of 100 grams each and ready for sale.
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INSTALLED AND UTILIZED CAPACITY:
INSTALLED CAPACITY: 100% Particulars Qty In Kilograms Per Day 50 Per Month 1500 Per Year 18000
UTILIZED CAPACITY: 80% Particulars Qty In Kilograms Per Day 40 Per Month 1200 Per Year 14400
USES OF THE PRODUCTS
Incense sticks is such a product which is used in almost all the places whether it be house, factory, institution, hospital any business undertakings etc. its main use is for religious or spiritual purpose. People of India are religious by nature and here caste or religion does not make any difference in way of worshipping god.
Suggested uses of fragrances of agarbatti are
1. For living room Jasmine, Lavender, Strawberry, Vanilla, Violet 2. Meditation Opium, Amber. 3. Bedroom Honey, suckle, Jasmine, Lavender, Rose, Sandal 4. Kitchen Coconut, Grass, Lemon, Lotus, Musk, Opium, Pine, Strawberry, Vanilla
26
PERSONNEL DEPARTMENT
CONTENTS
SR NO
PARTICULARS
PAGE NO
1)
Introduction and Number of Employees
25
2)
Recruitment and Selection
26
3)
Wages and Salary
26
4)
Incentives and Motivation
27
5)
Personnel Records
27
6)
Working Shifts
27
7)
ESI/Group Insurance Etc
27
27
INTRODUCTION AND NUMBER OF EMPLOYEES
Personnel department deals with various matters relating to man power ie recruitment, selection, wage and salary etc. of the man power employed in the unit. The unit is small scale so the manpower required is also less. No unit can run without manpower. The unit will require 20 personnel to work. The detailed explanation about workers of the unit is as follows:
Particulars
No. of employees
Supervisors
1
Accountant
1
Storekeeper
1
Semiskilled worker
3
Unskilled worker
12
Sweeper
1
Peon
1
TOTAL
20
28
RECRUITMENT AND SELECTION
Employees hold a key place in business. No business enterprise can exist and function without employees. The growth of business depends on great extent on the willingness and ability of its employee to work hard. The recruitment and selection of the unit is done directly that means the workers are appointed directly from local sources by the concerned authority when the need arises. As there is no need of highly skilled labor it is available easily. In all there are 20 workers and they are employed on monthly wage basis.
WAGES AND SALARY
The workers and employees working in the unit should be given monetary returns for their services rendered to the unit. These monetary returns are called wages and salary/remuneration. In our unit the wages and salary are paid on monthly basis. The detailed explanation is as follows:
particulars
supervisor accountant storekeeper semiskilled workers unskilled workers sweeper peon total
no of employees
1 1 1 3 12 1 1 20
amount paid
2500 3000 2000 1500 1000 500 500
total amount
2500 3000 2000 4500 12000 500 500 25000
29
INCENTIVES AND MOTIVATION
Incentives and motivation is very necessary to boost up the level of performance of employees working in the unit. In our unit as an incentive diwali bonus is paid to workers which are paid once in a year.
PERSONNEL RECORDS
Personnel records are made by every unit. It is prepared so as to keep up to date information regarding every employee in the unit. In our unit a separate register is maintained which contains all the necessary information like name, address, birth date, education, qualification, previous working experience etc. of the employees.
WORKING SHIFTS
The manufacturing of incense sticks does not provide a 24 hours production process to go on as no machinery is to be used as the unit as well as the production process is labor intensive. So in the unit there is only one general shift. It is from 8am to 1 pm And from 3pm to 8 pm.
E.S.I. OR GROUP INSURANCE SCHEME
As the number of employees working in the unit are very less the unit cannot afford to have E.S.I. Scheme. But our unit has taken a Group Insurance of all the members working in the unit as whole.
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MARKETING DEPARTMENT
sr no
contents
page no
1)
Prices Of The Product
29
2)
Distribution System
29
3)
Advertisement
30
4)
Marketing Research
30
5)
Coverage Of Market Area
30
6)
Terms And Conditions Of Selling The Product With Middlemen And Direct Customers.
30
31
PRICES OF THE PRODUCT
The price of the product is a very important element for the unit and it must be fixed such that it is able to achieve the company’s goal and satisfy customers also up to their expectation. We have fixed the price of the product on per 100 grams basis i.e. Rs. 25 per 100 grams. There is no such method used for fixing the price of the product. Firstly the survey was done for finding the prevailing prices in the market of different manufacturers who are also the competitions than adding the rate which will be able to give profit which is reasonable the price is fixed.
DISTRIBUTION SYSTEM
For transferring the finished goods from production unit to the real user the distribution system plays a very vital role. We can say that with good, efficient and fast distribution system the unit can achieve its goal fast by satisfying the customers. Our unit has a simple distribution system from the production unit goods are sold to wholesaler than it goes to retailers and than to final customer. The diagram of distribution system is as followsroduction Unit Wholesaler Retailer Final Customer
ADVERTISEMENT
32
The advertisement plays a very vital role in expanding the sales and hence the profit of a unit and also it makes the people know about our product. The advertising of our product is generally done with the help of magazine, journals and news papers etc. we are doing direct advertising by circulars, catalogue, pamphlets, booklets etc. something for outdoor advertising wall painting is also done.
MARKETING RESEARCH
Marketing research is a systematic gathering, recording, and analyzing the data about marketing problems to facilitate decision making. The need of marketing research arises in all the stages i.e. before establishing the unit. It helps in framing new policy and modifies the existing. Before the establishment of the unit a consumer survey was done regarding the use of product afterwards a survey of channel of distribution was also done. After a while the unit is to take a research on demand of the product and the potential market of the product.
COVERAGE OF MARKET AREA
Now at present the coverage area of product in market is with in different places of the same city i.e. Porbandar and in the near by villages. But efforts are being made to expand the market coverage area in other cities and gradually to cover whole saurashtra and Gujarat.
TERMS AND CONDITIONS OF SELLING THE PRODUCT WITH THE MIDDLEMEN AND DIRECT CUSTOMERS
The conditions with the middlemen is that as soon as the order is placed by the wholesaler and retailer the quantity ordered is supplied to them immediately and they are giving order which are comparatively large in size than certain amount of cash discount is given. All transactions of unit are on cash basis.
FINANCIAL DEPARTMENT
33
sr no
contents
page no
1)
Statements Showing Various Financial Estimates Of The Firm.
32
2) 3)
Statement Of Total Cost Of The Firm . Statement Showing The Sources Of Finance
33 33
4)
Statement Of Own Contribution Of Capital
33
5)
Statement Of Cost Of Production
34
6)
Determination Of Price Of The Product
34
7)
Statement Of Income And Expenses
35
8)
statement showing profit per annum
35
8)
Break Even Analyses
36
9)
Statement Of Profit Distribution Among Partners
10)
Ratio \ Financial Analysis
37
34
FIXED CAPITAL STATEMENT
particulars amount (rs)
Land Building Furniture Equipment Total 1600000 800000 80000 70000 2550000
MONTHLY WORKING CAPITAL STATEMENT
particulars
Raw Materials Wage And Salary Other Expenses Total
amount (rs)
150000 25000 34000 209000
STATEMENT SHOWING OTHER EXPENSES IN A MONTH
particulars
Power And Water Transport And Conveyance Post And Stationary Advertising Packing And Forwarding Insurance Telephone Miscellaneous Expenses Total
amount (rs)
10000 8000 1000 1000 8000 1000 2000 1000 34000
CALCULATION OF MONTHLY REQUIREMENT OF WORKING CAPITAL
1500kgs @ Rs 100 per kg. For a month =Rs 150000
35
36
STATEMENT OF THE TOTAL COST OF THE FIRM
particulars
Land Building Equipment Furniture Expenses In Respect Of Acquiring Land Preliminary Expenses Margin Of Two Months For Working Capital Requirement (209000*2) Total Cost
amount (rs)
1600000 800000 70000 80000 5000 15000 418000 2988000
STATEMENT SHOWING SOURCES OF FINANCE
particulars
Owners Loan @12% Total
amount (rs)
1800000 1188000 2988000
STATEMENT OF OWN CONTRIBUTION OF CAPITAL
name of partner
Sneha Khushbu
rate of contribution
50% 50%
amount (rs)
900000 900000
37
STATEMENT OF COST OF PRODUCTION
Working Capital =209000(12) 2508000
Depreciation @ 10% Equipment Furniture
7000 8000
15000
Interest On Own Capital @15%
=1800000(15%) 270000
Interest On Loan @ 12%
=1188000(12%)
142560
Total
2935560
DETERMINATION OF THE PRICE OF THE PRODUCT
Rupees 25 per 100 grams For 1 kilogram = rupees 250
38
STATEMENT OF INCOME AND EXPENSES
particulars amount (rs)
INCOME
14400kgs @ rs 250 3600000
EXPENSES
Raw Materials (150000) (12) Wages(25000) (12) Other Expenses (34000) (12) Depreciation Interest On Own Capital Interest On Loan total 1800000 300000 408000 15000 270000 142560 2935560
PROFIT PER ANNUM
Income Expenses PBT Less Tax@35% Add [email protected]% PAT 3600000 2935560 664440 232554 5814 238368 426072
39
BEP & FINANCIAL ANALYSIS
particulars
Total Sales (14400)(250) Less Variable Cost 1. Raw Materials 2. Wage & Salary 3. Other Expenses Total Variable Cost Contribution Less Fixed Cost 1. Depreciation 2. Interest On Capital 3. Interest On Loan Total Fixed Cost Pbt Less Tax Pat
amount(rs)
amount(rs)
3600000
1800000 300000 408000 2508000 1092000
15000 270000 142560 427560 664440 238368 426072
STATEMENT OF DISTRIBUTION OF PROFIT AMONG PARTNERS
name of partners
Sneha Jobanputra Khushbu Bharali
profit sharing ratio
1:1 1:1
amount of profit
213036 213036
40
RATIO ANALYSIS
1) p.v. ratio
=contribution\sales (100) =1092000\3600000 (100) =30.33%
2)
b.e.p in%
=fixed expenses\contribution (100) =427560\1092000 (100) =39.15%
3)
b.e.p in rupees
=fixed expenses\p.v. ratio =427560\30.33% =1409396
4)
gross profit ratio
=PBT\Total sales (100) =664440\3600000 (100) =18.46%
5)
net profit ratio
=PAT\total sales (100) =426072\3600000 (100) =11.84%
6) a)
margin of safety in rupees
= actual sales – bep sales =3600000- 1409396 =2190604
b)
in%
= actual sales – bep sales \actual sales (100) =3600000- 1409396\3600000 (100) =60.85%
41
7)
return on investment
= PBT\total investment (100) =664440\2988000 (100) =29.24%
FUTURE PLAN
Future plan means what the company is going to do or what the company expects to do. Future plan is inevitable for each & every organization it helps every organization to maintain quality of its product, to achieve pre decided goals and to compete in the market. The future plan of Haridarshan Sugandh Vatika is as under: In this project we will utilize the 80% if total capacity which is a good sign but rest 20% of the capacity is still remaining unused. In future within two or three years we wish to use the 100% capacity and satisfy our customers to the maximum extent. In the initial period the market will we local limited market but we are expecting to cover whole of the market within four to five years. Here whole market means entire national market and than we plan to cover the international market.
42
doc_900581293.docx
Incense is composed of aromatic plant materials, often combined with essential oils.[5] The forms taken by incense differ with the underlying culture, and have changed with advances in technology and increasing diversity in the reasons for burning it
1
A PRODUCT PROPSAL REPORT ON
INCENSE STICKS (AGARBATTI) SUBMITTED TO SAURASHTRA UNIVERSITY PREPARED BY JOBANPUTRA SNEHA D. T.Y.B.B.A. ROLL NO: - ____ SEAT NO: - _____ ACADEMIC YEAR: 2004-2005 INSTITUTE:K.H. MADHVANI ARTS & COMMERCE COLLEGE, PORBANDAR
2
K.H. MADHVANI ARTS & COMMERCE COLLEGE
This is to certify that Miss Sneha .D. Jobanputra, a student of T.Y.B.B.A has completed her project study under my supervision and guidance and prepared a report on following product “Incense Sticks” (Agarbatti).
Date
lace : - PORBANDAR Academic year: - 2004-2005Signature of Guide Prof R.V.Keshwala
3
PREFACE
Under Entrepreneurship Development Programme, the Saurashtra University has made the provision of preparing a Product proposal report with a view to educate the student of management in a manner that they can come to know that what formalities are needed to establish a business unit. Under this programme, the student of T.Y.B.B.A has to prepare a report for comparison of information of company with its land, building, plant & machinery to start the company. This is an idea on practice given to a student which can be helpful in future for decision making. With a view to fulfill the objective of university, as mentioned above. I have made a Product proposal Report on Haridarshan Incense Sticks (Agarbatti). I hope that this shall be confirmed and accepted by the rules and regulations of the Entrepreneurship Development Programme as proposed by our University.
Sneha D Jobanputra
4
ACKNOWLEDGEMENT
I am extremely pleased to present this product proposal Report on Agarbati to Saurashtra University. I take this opportunity to express my gratitude to all the persons in this regard who have helped me. In this reference I am heartily thankful to our respected principal Dr J.S. Ramdatti and also very thankful to our Prof. R. V. Keshwala under whose guidance I have prepared this report. My special thanks to, Mr. Pathak and Mr. Pravin solanki of Ramakrishna mission also to Mr. Thanki of Shahid sumati sanstha who gave me guidance regarding product and related information. I express my deep sense of gratitude to my family and friends who have helped me in every aspect of preparing this project report on Incense Sticks.
Yours faithfully Sneha D Jobanputra
5
INDEX
SR NO
PARTICULARS
PAGE NO
1)
INTRODUCTION ABOUT SMALL SCALE INDUSTRY
7
2)
GENERAL INFORMATIION
8
3)
PRODUCTIONDEPARTMENT
16
4)
PERSONNEL DEPARTMENT
24
5)
MARKETING DEPARTMENT
29
6)
FINANCIAL DEPARTMENT
31
7)
FUTURE PLAN
38
6
7
INTRODUCTION
Presently small scale industries are playing an important role in the development of economy. Importance of small scale industry can be hardly overemphasized in a developing country like India facing major economic problems of self employment and priority of capital. But now a day’s government is taking many measures for the importance and increment of small scale industry. In India the problem of unemployment is becoming more and more acute due to rapidly increasing population, insufficient capital investment generation of new job sector. In the beginning of first 5 year plan, there were 33 lacs unemployed persons, the figures which at present reached up to 450 lacs. As small scale industry are labor intensive they provide more employment compared to large scale industries. More employment could be provided through development of small scale industries. In India the cottage & small scale industries provided employment nearly to 24 million persons where as large scale industries provide only4.5 million persons. As far as employment is concerned small scale industries stands next to the agriculture so far the scale of decreasing unemployment importance should be given to small scale industries. Another important benefit of small scale industry is that it requires small investment to establish the unit compared to large scale unit which requires huge capital investment India also faces the problem of scarce capital. In small scale industries the returns are quick & hence generated returns may again form capital. Moreover export of goods earns previous foreign exchange form abroad worth Rs. 10,000 crores. Thus use of scarce capital resources in terms of employment and productivity. A small scale industry is presently defined as:“A unit engaged in manufacturing servicing, repairing, processing and presentation of goods having investment in plant & machinery at an original cost not exceeding Rs. 3 crores.”
8
GENERAL INFORMATION
CONTENTS
SR.NO
PARTICULARS
PAGE.NO
1)
Name Of The Organization
9
2)
Name And Address Of The Unit
9
3)
Address Of The Registered Office
9
4)
Biodata Of Partners
10
5)
Partnership Deed
12
6)
Licenses Required
13
7)
Products Manufactured
13
8)
How Idea Was Generated
14
9)
Reasons For Location:
15
9
Name of the organization
The name of the organization is Haridarshan sugandh vatika
Name and address of the unit
The name and address of the organization is Haridarshan sugandh vatika GIDC area Plot no 11 Porbandar-360577
Address of the registered office
The address of the registered office of the organization is Haridarshan sugandh vatika GIDC area Plot no 11 Porbandar -360577
10
BIODATA OF PARTNERS
SNEHA D JOBANPUTRA
Full name Age Addresses
1. Office Haridarshan Sugandh Vatika GIDC Area Plot No 11 Porbandar-360577 Sneha D Jobanputra 21 Years
2. Resident
Neelkanth 29 Satyam Park Rajivnagar Narsan Tekari Area Porbandar- 360577
Academic qualification Nature of responsibility Experience Contribution of capital
B.B.A. With Advance Marketing Management Financial And Marketing Management. Worked As An Assistant In Kalpana Perfumery Works 50% Of Total Owners Contribution
11
KHUSHBU S BHARALI
Full name Age Address
1.Office Haridarshan Sugandh Vatika GIDC Area Plot No 11 Porbandar 360577 Khushbu S Bharali 19 Years
2.Resident
Khushbu 19,Sitaram Nagar Opposite Airport. Porbandar 360577
Academic qualification Nature of responsibility Experience Contribution of
B.Com With Specialization In Accounts
Accounts And Production Management
Worked As An In Charge Of Accounts And Production Department In Elite Agarbatti Limited. 50% Of Total Owner’s Capital.
12
capital
PARTNERSHIP DEED
The partnership deed contains the terms and conditions relating to partnership and the regulation governing the internal management of the organization. The content of partnership deed is settled by mutual consent of the partners which are as under.
1) Name of the firm
Haridarshan sugandh vatika
2) Capital contribution
The contribution of own capital of each partner is as under Sneha d jobanputra Khushbu s bharali 50% 50%
3) Distribution of profit or loss
Sneha d jobanputra Khushbu s bharali 50% 50%
4) Remuneration and drawings of the partners
No partner is entitled to get remuneration in the form of salary from the firm. Each partner is allowed to draw maximum 24000 Rs. Per year.
5) Provision in case of death, insolvency and retirement of a partner
Death or insolvency of any of the partners will not cause for dissolution of the unit but any of the relative of partner capable to handle her responsibility will be appoint as partner.
6) Interest on capital and drawings
Each partner of the firm is entitled to get 15% interest on capital and no interest would be charged on drawings if there is any dispute on matters
13
except the above it will be solved as per the provisions of the partnership act 1932.
14
LICENSES REQUIRED
An application has already been made for the following licenses required for the establishment of a firm. 1) 2) 3) 4) 5) Sales Tax No Permanent Account No Local Authority SSI Reg No Subsidy Reg No
PRODUCTS MANUFACTURED
The firm manufactures only one product and that is incense sticks (agarbatti) of course they are available in number of varieties that is in different fragrance according to the demand of the customers some of the common fragrances are 1) 2) 3) 4) 5) jasmine lavender mogra rose Sandal etc.
15
HOW IDEA WAS GENERATED
I was looking for a product which is used by each and every person from child to old person whether male, female, rich, and poor and also by people of every caste and religion and at each and every place. Suddenly one day when I was doing my daily pooja to god I lighted the agarbatti and this is how the idea was generated agarbatti is the product used by every one whether child or old person, rich or poor, and at every place whether home ,temple, office , shop, schools, colleges, or any kind of institution or business undertakings. Because almost all people believe in god and have faith in him and they worship god. Also people of India are religious by nature and burning of agarbatti is as old as India itself. From times immemorial exotic aromas and scents have been a part of the Indian way of life whether it is a religious offering or an aid to medication. Incense transmits purity and develops pleasant atmosphere. This is how the idea was generated and I decided to start a unit producing incense sticks and am very thankful to god as I believe he only has given me this idea and as most of the people of India I am also religious by nature.
16
REASONS FOR LOCATION
Location of any business is very important whether it is a small scale industry or a large scale industry many factors like availability of raw materials, power and water supply, labor etc; affect the various stages of production process in unit. The favorable reasons for the location of this unit are as follows:
1)
Availability of raw material
Raw material is very important for any production unit whether big or small. The raw materials required for making incense sticks are: 1) 2) 3) 4) 5) 6) 7) Bamboo sticks Jigat powder Wooden coal powder Water Coating powder Perfume/scent White oil/D.E.P (Di Ethail Petholet)
All the above mentioned materials are easily available to the unit whenever required.
2)
Power and water supply
As the unit is located in GIDC industrial area the water and power supply are regular and supply is continuous which helps to work in unit uninterrupted.
(3)
Labor
The unit is a labor intensive unit almost all of the work is done by labor power. The unit is getting all type of labor i.e. semiskilled, unskilled etc; very easily around the unit.
(4) Transport facility
The final product to reach the consumption requires transport facility and Porbandar is having along with rail and road transport the air and water transport facility also which will help to grow unit in future to a great extent.
17
18
PRODUCTION DEPARTMENT
CONTENTS
sr no
particulars
page no
1)
Total Number Of Products.
17
2)
Raw Materials Required.
17
3)
Suppliers Of Raw Materials.
19
4)
Equipments Required And Sources.
20
5)
Production Process.
21
6) 7)
Installed And Utilized Capacity. Uses Of The Product.
23 23
19
TOTAL NUMBER OF PRODUCTS
The product produced in the unit is only the main products i.e. incense sticks (agarbatti). But it is available in different fragrances according to the demand of customers some of the common fragrances agarbatti are: 1) 2) 3) 4) 5) Jasmine Lavender Mogra Rose Sandal etc
RAW MATERIALS REQUIRED
The following are the raw materials required to manufacture agarbatti: 1) 2) 3) 4) 5) 6) 7) Bamboo sticks Jigat powder Wooden coal powder Water Coating powder Perfume/scent White oil/D.E.P (Di Ethail Petholet)
20
Explanation of raw materials and uses
1) Jigat powder It is derived from the back of tree it has natural gumming properties this powder is mixed with other ingredients to make the dough for incense sticks. 2) Wooden coal powder This powder is obtained from coal made from wood. The powder used is very smooth there are no lumps in it. It is an important element in making dough for incense sticks and it helps the incense sticks it keep burning for long time. 3) Bamboo sticks Bamboo sticks are made from bamboo. These sticks are available in the market in different sizes in respect of length and thickness. Incense stick is made by rolling the dough around the stick. 4) Water This is the essential element for making the dough. If the jigat powder is not that much sticky then gum is mixed with water and that water is used to make the dough which increases the stickiness of dough which helps in making the dough better. 5) Coating powder This powder is available in different colors it is used for giving the incense sticks different colors. 6) D.E.P. (Di Ethail Petholete)
21
It contains some elements of fragrance. It is expensive. But in the incense sticks made from D.E.P. the fragrance remains for a very long time. 7) Scent/perfume Scent is used for fragrance. It may be artificial or natural. Natural scent is expensive than the artificial and less in use in comparison to artificial scent.
SUPPLIERS OF RAW MATERIALS
1) Jamna Agarbatti Works: M/S Shankarlal Thakorelal Bharwani Small Chipwadi Near Gujarat Kanya Shala Vadodra Gujarat 2) Navy Products Near Sonaliya Talavadi Bapunagar Ahmedabad 3) Prakash Agarbatti Works Near Khodiyar Mata Temple Flat No 788/5746 Bapunagar Ahmedabad 4) Raja Corporation Near Mamu Nayak Pod Ahmedabad
The above mentioned are the suppliers of all raw materials except scent. The suppliers of scent are as follows: 1) Amit Traders Bapunagar Ahmedabad 2) Shah Agency Mamu Nayak
22
Ahmedabad 3) Haren Traders Near Central Bus Station Dhebar Road Rajkot 4) Purvi Enterprises 6, Rajput Para Rajkot
EQUIPMENTS REQUIRED AND SOURCES
The equipments required to make incense sticks are mentioned as follows 1) Big vessels 2) Galvanizes 3) Small wooden stand with flat surfaces 4) Measure in litres 5) Barrels 6) Weighing machines The above mentioned equipments are very common and hence are available at any concerned shop in the city very easily in required quantity.
23
PRODUCTION PROCESS
The production process of making incense sticks is explained in various stages as follows:
Mixing
First of all take jigat powder in required proportion and filter them finely than take the mixture of powder in a big vessel.
Making dough
After taking the mixture of powder in a big vessel pour the required amount of water in the mixture and make tight dough. It must be noted that water is not added in excess quantity than required so that the dough does not become loose.
Making the dough soft
Afterwards squeeze the tight dough continuously with all energy to make it soft without using water.
Rolling on bamboo sticks
Than take the dough equal to a groundnut seed. Keep it and stick it at the one end of the bamboo stick and keep it on the wooden stand having a flat surface. Keep the bamboo stick on it and roll the dough around the stick on the stand on the other hand keep empty space on the stick about 1 to 1.5 inches. Roll the dough equally/evenly around the stick. This happens when we roll the dough from one end of the stick to the other and pushing while rolling and this is how incense stick is made.
Drying
When all the sticks are made in this way than they are kept to dry in open and airy space for about a day. These sticks are called raw sticks. 24
Adding fragrance by making compound
After wards fragrance is added to the raw sticks which are called a compound or scent or perfume. It is ready made and easily available in the market. To make a high quality compound 300 to 400 grams of favorite perfume/scent is added to D.E.P. of 1 liter and the compound is ready. Then this compound is coated of agarbatti by dipping process.
Dipping process
In dipping process the compound can be coated on sticks easily, fast and evenly in all and also the waste of compound is almost nil. In the deep vessel pour the compound and than make a big bundle of sticks and dip the bundle in the vessel filled with compound. The bundle is kept in it for a while so that the sticks bundled absorb the compound. Afterwards the bundles of sticks are taken out of the compound kept in an empty vessel big in size. The excess perfume not absorbed by the sticks is kept free and are spread in an open place in order to drip. When they are dried the final product is made.
Packing
When the final product is made it is sent for packing in attractive boxes of 100 grams each and ready for sale.
25
INSTALLED AND UTILIZED CAPACITY:
INSTALLED CAPACITY: 100% Particulars Qty In Kilograms Per Day 50 Per Month 1500 Per Year 18000
UTILIZED CAPACITY: 80% Particulars Qty In Kilograms Per Day 40 Per Month 1200 Per Year 14400
USES OF THE PRODUCTS
Incense sticks is such a product which is used in almost all the places whether it be house, factory, institution, hospital any business undertakings etc. its main use is for religious or spiritual purpose. People of India are religious by nature and here caste or religion does not make any difference in way of worshipping god.
Suggested uses of fragrances of agarbatti are
1. For living room Jasmine, Lavender, Strawberry, Vanilla, Violet 2. Meditation Opium, Amber. 3. Bedroom Honey, suckle, Jasmine, Lavender, Rose, Sandal 4. Kitchen Coconut, Grass, Lemon, Lotus, Musk, Opium, Pine, Strawberry, Vanilla
26
PERSONNEL DEPARTMENT
CONTENTS
SR NO
PARTICULARS
PAGE NO
1)
Introduction and Number of Employees
25
2)
Recruitment and Selection
26
3)
Wages and Salary
26
4)
Incentives and Motivation
27
5)
Personnel Records
27
6)
Working Shifts
27
7)
ESI/Group Insurance Etc
27
27
INTRODUCTION AND NUMBER OF EMPLOYEES
Personnel department deals with various matters relating to man power ie recruitment, selection, wage and salary etc. of the man power employed in the unit. The unit is small scale so the manpower required is also less. No unit can run without manpower. The unit will require 20 personnel to work. The detailed explanation about workers of the unit is as follows:
Particulars
No. of employees
Supervisors
1
Accountant
1
Storekeeper
1
Semiskilled worker
3
Unskilled worker
12
Sweeper
1
Peon
1
TOTAL
20
28
RECRUITMENT AND SELECTION
Employees hold a key place in business. No business enterprise can exist and function without employees. The growth of business depends on great extent on the willingness and ability of its employee to work hard. The recruitment and selection of the unit is done directly that means the workers are appointed directly from local sources by the concerned authority when the need arises. As there is no need of highly skilled labor it is available easily. In all there are 20 workers and they are employed on monthly wage basis.
WAGES AND SALARY
The workers and employees working in the unit should be given monetary returns for their services rendered to the unit. These monetary returns are called wages and salary/remuneration. In our unit the wages and salary are paid on monthly basis. The detailed explanation is as follows:
particulars
supervisor accountant storekeeper semiskilled workers unskilled workers sweeper peon total
no of employees
1 1 1 3 12 1 1 20
amount paid
2500 3000 2000 1500 1000 500 500
total amount
2500 3000 2000 4500 12000 500 500 25000
29
INCENTIVES AND MOTIVATION
Incentives and motivation is very necessary to boost up the level of performance of employees working in the unit. In our unit as an incentive diwali bonus is paid to workers which are paid once in a year.
PERSONNEL RECORDS
Personnel records are made by every unit. It is prepared so as to keep up to date information regarding every employee in the unit. In our unit a separate register is maintained which contains all the necessary information like name, address, birth date, education, qualification, previous working experience etc. of the employees.
WORKING SHIFTS
The manufacturing of incense sticks does not provide a 24 hours production process to go on as no machinery is to be used as the unit as well as the production process is labor intensive. So in the unit there is only one general shift. It is from 8am to 1 pm And from 3pm to 8 pm.
E.S.I. OR GROUP INSURANCE SCHEME
As the number of employees working in the unit are very less the unit cannot afford to have E.S.I. Scheme. But our unit has taken a Group Insurance of all the members working in the unit as whole.
30
MARKETING DEPARTMENT
sr no
contents
page no
1)
Prices Of The Product
29
2)
Distribution System
29
3)
Advertisement
30
4)
Marketing Research
30
5)
Coverage Of Market Area
30
6)
Terms And Conditions Of Selling The Product With Middlemen And Direct Customers.
30
31
PRICES OF THE PRODUCT
The price of the product is a very important element for the unit and it must be fixed such that it is able to achieve the company’s goal and satisfy customers also up to their expectation. We have fixed the price of the product on per 100 grams basis i.e. Rs. 25 per 100 grams. There is no such method used for fixing the price of the product. Firstly the survey was done for finding the prevailing prices in the market of different manufacturers who are also the competitions than adding the rate which will be able to give profit which is reasonable the price is fixed.
DISTRIBUTION SYSTEM
For transferring the finished goods from production unit to the real user the distribution system plays a very vital role. We can say that with good, efficient and fast distribution system the unit can achieve its goal fast by satisfying the customers. Our unit has a simple distribution system from the production unit goods are sold to wholesaler than it goes to retailers and than to final customer. The diagram of distribution system is as follows
roduction Unit Wholesaler Retailer Final CustomerADVERTISEMENT
32
The advertisement plays a very vital role in expanding the sales and hence the profit of a unit and also it makes the people know about our product. The advertising of our product is generally done with the help of magazine, journals and news papers etc. we are doing direct advertising by circulars, catalogue, pamphlets, booklets etc. something for outdoor advertising wall painting is also done.
MARKETING RESEARCH
Marketing research is a systematic gathering, recording, and analyzing the data about marketing problems to facilitate decision making. The need of marketing research arises in all the stages i.e. before establishing the unit. It helps in framing new policy and modifies the existing. Before the establishment of the unit a consumer survey was done regarding the use of product afterwards a survey of channel of distribution was also done. After a while the unit is to take a research on demand of the product and the potential market of the product.
COVERAGE OF MARKET AREA
Now at present the coverage area of product in market is with in different places of the same city i.e. Porbandar and in the near by villages. But efforts are being made to expand the market coverage area in other cities and gradually to cover whole saurashtra and Gujarat.
TERMS AND CONDITIONS OF SELLING THE PRODUCT WITH THE MIDDLEMEN AND DIRECT CUSTOMERS
The conditions with the middlemen is that as soon as the order is placed by the wholesaler and retailer the quantity ordered is supplied to them immediately and they are giving order which are comparatively large in size than certain amount of cash discount is given. All transactions of unit are on cash basis.
FINANCIAL DEPARTMENT
33
sr no
contents
page no
1)
Statements Showing Various Financial Estimates Of The Firm.
32
2) 3)
Statement Of Total Cost Of The Firm . Statement Showing The Sources Of Finance
33 33
4)
Statement Of Own Contribution Of Capital
33
5)
Statement Of Cost Of Production
34
6)
Determination Of Price Of The Product
34
7)
Statement Of Income And Expenses
35
8)
statement showing profit per annum
35
8)
Break Even Analyses
36
9)
Statement Of Profit Distribution Among Partners
10)
Ratio \ Financial Analysis
37
34
FIXED CAPITAL STATEMENT
particulars amount (rs)
Land Building Furniture Equipment Total 1600000 800000 80000 70000 2550000
MONTHLY WORKING CAPITAL STATEMENT
particulars
Raw Materials Wage And Salary Other Expenses Total
amount (rs)
150000 25000 34000 209000
STATEMENT SHOWING OTHER EXPENSES IN A MONTH
particulars
Power And Water Transport And Conveyance Post And Stationary Advertising Packing And Forwarding Insurance Telephone Miscellaneous Expenses Total
amount (rs)
10000 8000 1000 1000 8000 1000 2000 1000 34000
CALCULATION OF MONTHLY REQUIREMENT OF WORKING CAPITAL
1500kgs @ Rs 100 per kg. For a month =Rs 150000
35
36
STATEMENT OF THE TOTAL COST OF THE FIRM
particulars
Land Building Equipment Furniture Expenses In Respect Of Acquiring Land Preliminary Expenses Margin Of Two Months For Working Capital Requirement (209000*2) Total Cost
amount (rs)
1600000 800000 70000 80000 5000 15000 418000 2988000
STATEMENT SHOWING SOURCES OF FINANCE
particulars
Owners Loan @12% Total
amount (rs)
1800000 1188000 2988000
STATEMENT OF OWN CONTRIBUTION OF CAPITAL
name of partner
Sneha Khushbu
rate of contribution
50% 50%
amount (rs)
900000 900000
37
STATEMENT OF COST OF PRODUCTION
Working Capital =209000(12) 2508000
Depreciation @ 10% Equipment Furniture
7000 8000
15000
Interest On Own Capital @15%
=1800000(15%) 270000
Interest On Loan @ 12%
=1188000(12%)
142560
Total
2935560
DETERMINATION OF THE PRICE OF THE PRODUCT
Rupees 25 per 100 grams For 1 kilogram = rupees 250
38
STATEMENT OF INCOME AND EXPENSES
particulars amount (rs)
INCOME
14400kgs @ rs 250 3600000
EXPENSES
Raw Materials (150000) (12) Wages(25000) (12) Other Expenses (34000) (12) Depreciation Interest On Own Capital Interest On Loan total 1800000 300000 408000 15000 270000 142560 2935560
PROFIT PER ANNUM
Income Expenses PBT Less Tax@35% Add [email protected]% PAT 3600000 2935560 664440 232554 5814 238368 426072
39
BEP & FINANCIAL ANALYSIS
particulars
Total Sales (14400)(250) Less Variable Cost 1. Raw Materials 2. Wage & Salary 3. Other Expenses Total Variable Cost Contribution Less Fixed Cost 1. Depreciation 2. Interest On Capital 3. Interest On Loan Total Fixed Cost Pbt Less Tax Pat
amount(rs)
amount(rs)
3600000
1800000 300000 408000 2508000 1092000
15000 270000 142560 427560 664440 238368 426072
STATEMENT OF DISTRIBUTION OF PROFIT AMONG PARTNERS
name of partners
Sneha Jobanputra Khushbu Bharali
profit sharing ratio
1:1 1:1
amount of profit
213036 213036
40
RATIO ANALYSIS
1) p.v. ratio
=contribution\sales (100) =1092000\3600000 (100) =30.33%
2)
b.e.p in%
=fixed expenses\contribution (100) =427560\1092000 (100) =39.15%
3)
b.e.p in rupees
=fixed expenses\p.v. ratio =427560\30.33% =1409396
4)
gross profit ratio
=PBT\Total sales (100) =664440\3600000 (100) =18.46%
5)
net profit ratio
=PAT\total sales (100) =426072\3600000 (100) =11.84%
6) a)
margin of safety in rupees
= actual sales – bep sales =3600000- 1409396 =2190604
b)
in%
= actual sales – bep sales \actual sales (100) =3600000- 1409396\3600000 (100) =60.85%
41
7)
return on investment
= PBT\total investment (100) =664440\2988000 (100) =29.24%
FUTURE PLAN
Future plan means what the company is going to do or what the company expects to do. Future plan is inevitable for each & every organization it helps every organization to maintain quality of its product, to achieve pre decided goals and to compete in the market. The future plan of Haridarshan Sugandh Vatika is as under: In this project we will utilize the 80% if total capacity which is a good sign but rest 20% of the capacity is still remaining unused. In future within two or three years we wish to use the 100% capacity and satisfy our customers to the maximum extent. In the initial period the market will we local limited market but we are expecting to cover whole of the market within four to five years. Here whole market means entire national market and than we plan to cover the international market.
42
doc_900581293.docx