1. ON
PREPARED BY
Pooja b Kothari
Class
MBA SEM 3
ROLL NO.
34
ACADEMIC YEAR
2009-10
COLLEGE
N R V I BMS COLLEGE JUNAGADH
GUIDED BY
RAJESH PATEL

2. Declaration
I undersigned KOTHARI POOJA B. a student of T.Y.
M.B.A 3. here by declare that the project work presented in this
reporting is my own work & has been carried out under the
supervision of Prof. Rajesh patel head of the department ,M.B.A.
NRVIBMS College affiliated to GUJRAT TECHNOLOGICAL
UNIVERSITY,JUNAGADH
This work has not been previously submitted to any other
university or any institution from examination or any other purpose.
Date: Signature
Place :junagadh
________________
( Kothari pooja b )

3. Acknowledgement
I feel great pleasure that get an opportunity to present my
product project report before you. The present report could not been
possible but for the co- ordination help and guidance of lecturer,
director and faculty members of nrvibms college.
Firstly I give my sincere thanks to the head of the
management department, who has been tried very hard and put lots
of efforts to guide me.
Secondly II give my sincere thanks to the director of nrvibms
College Mr. rajesh patel , who give me inspiration to do this
project.
Date:
Place:

4. PREFACE
The subject “THE NEW ENTERPRIZE AND INOVATION
MANAGEMENT” has been including in the syllabus of . by the
GTU. with a view to develop the entrepreneurship skill among the
student. There is entrepreneurship development program is also
conducted by the government authority to give the training for
establishing a new firm and to develop the small scale industry.
The product project report is very important as it reveals the
entire structure of setting up a small scale industry and gives the all
related knowledge that request to be a good entrepreneur.
With regard to this, I presented and submitting this project
report with sincerely.

5. Index
Sr. No. Particular Page No.
1. Introduction 6
2. Project At Glance 7
3. Partner’s Background 8
4. Implementation of Schedule 9
5. Justification of Location 10
6. Product Detail 13
7. Raw Materials 14
8. Manufacturing Process 15
9. Market Analysis 17
10. Basis & Presumptions 18
11. Machinery & Equipments 19
12. Financial Detail 20
13. Break Even Analysis 24
14. Name of Supplies 27
15. Future Plan 28
16. Conclusion 29

6. Introduction
As we know that the small scale industry is the pillar of the
Indian economy. most of the business is carried out in India is from
the small scale industry. Small scale industry provides basic
material or raw material to the large scale industry and is the
partner of their success. The small scale industry is very important
to the economic development as it reduce employment crisis, it
produce the basic product and it also contributes in the total export
and foreign research to the country. Due to the benefits facilities
providing by the government to the country.
So, there is wide scope to establish a small scale industry as if
enjoy all benefits facility and subsidies providing by the
government for the development of small scale industry and also
for the economic development.

7. PROJECT AT GLANCE
Name of the unit : R.K. Food Industry
Office address : R.K. Food Industry
Aji G. I. D. C.
Plot No.333
Rajkot
Form of unit : Small Scale Industry
Name of the product : Toffee & Candy
Brand name : Smily
Name of the partner : Kothari Pooja B..
Vipani Kajal J.
Cost of project : 15,00,000
Factory area : 1600 sq.mt.
Market area : Gujarat
Financial contribution : 50% own
50% financial institutes
Total employees : 15
SSI reg. no. : Applied for
Subsidy reg. no. : Applied for
Shift :1
Off day : Friday

8. Partner’s Background
Partner 1:
Name : Kothari Pooja B.
Address : “Raj Tarang” Apt B/11 Talav Street 3
Junagadh
Age : 21
Financial contribution : 50%
Education qualification : M.B.A.
Working responsibility : Finance
Partner 2:
Name : Vipani Kajal J..
Address : Jetpur road,
B/d old bus stand,
Dhoraji, 360 410
Age : 28
Financial contribution : 50%
Education qualification : M.B.A. from B.K. School of
Management
Working responsibility : Production & Finance
Experience : as a production manager in his own
business for last 5 years

9. Implementation of Schedule
Sr.no. Particulars Time
period
1 Small Scale Industry Registration 15 days
2 Acquision Of Land 15 days
3 Preparation Of Project Report 1 month
4 Finance Assistance 2 month
5 Building Construction 3 month
6 Arrangement Of Power 1 month
7 Acquision Of Machinery 1 month
8 Installation Of Machinery 1 month
9 Appointment Of Staff & Labour 15 days
10 Trial Production & Shooting Problems 15 days
Total time period require for the commencement of
commercial production 12 months.

10. Justification of Location
Site selection is an important activity which decides the fact
of the business. A good location may reduce the cost of production
and distribution to a considerable extent. The reduction helps in
evaluate either the competitive strength or the profit margin of the
business.
Location of a business involves a large relatively permanent
investment. If the site selection is not proper all money spent on
factory building, machinery and their installation will go in waste
and the owner has to suffer a great loss. There fore, the site for the
factory should be selected very carefully, with selecting site. It is
necessary to consider technical, commercial and financial aspect
than the select a site that may provide maximum advantages.
1) PROXIMITY TO RAW MATERIAL AND MARKET:
An important consideration for location is the proximity to
raw material and source and nearness to the market for the final
product terms of a basic location model, the optimal location is
one where the total cost plus production cost plus distribution is
minimized. The maximum raw material available at the Rajkot
and also it brought from Ahmedabad & Mumbai.

11. 2) AVAILABILITY OF INFRASTRUCTURE FACILITES:
Availability of power, transportation, water and
communication should be carefully assessed before a location
decision is made.
Adequate supply of power is a very important condition for
the location. Insufficient power can be a major constraint
particularly in the case of an electricity intensive project. In
evaluating power supply, following should be looked into:
• The quantum of power available ,
• The stability of the power tariff, etc.
For transporting the inputs of the project and distributing
the output of the project, adequate transport connection
whether by rail, road, sea, island.
Water of air is required. The availability, reliability cost of
transportation for various alternatives locations should be assessed.
3) LABOUR SITUATION:
In labour intensive project the labor situation in a particular
location becomes important. The key factor is to be considered in
evaluating the labour situations are:
• Availability of labour – skilled, semi skilled & unskilled
• Prevailing market about rates
• Labour productivity

12. 4) OTHER FACTORS:
• Climate conditions
• Political factors
• General living condition
• Proximity to ancillary unit, etc.
From the above detail discuss it can derive that the
R.K.Food Industry situated at a very favorable, proper and
ideal location.

13. Product Detail
The product is the most tangible and important single
component of the marketing program. With out a product, nothing
to promote, nothing to price. Product is vehicle by which a
company provides consumer satisfaction. It is the engine that pulls
the rest of the marketing program. Product fills in the needs of the
society.
Toffee and candy is in the great demand, it is an evergreen
product or we can say in marketing term i.e. the product, which
never see its decline stage of its life cycle and is being extensively
used by the all segment of people. So, we can say that it is made for
all age people. It can be form in any step and size and just by
adding the different flavors we can satisfy the all kinds of consumer
who have the different taste and choice at the different time.

14. RAW MATERIALS
⇒ TOFFEE
1. Sugar & liquid glucose
2. GMS
3. Milk powder
4. Vegetable fate
5. Starch
6. Salt
7. Food colours and essence
8. Coco powder and coffee powder
⇒ CANDY
1. Sugar & Glucose
2. Milk Powder
3. Vegetable
4. Sordid Acid
5. Food Colours And Essence
6. Coconut And Coffee Powder

15. MANUFACTURING PROCESS
⇒ TOFFEE:
• Sugar, liquid glucose ,water, salt add in the batch cooker
• Then add milk powder and vegetable fate and mix it.
• The mixture is adding in boiler with stretch and boils it at the
temp. of 200 c. this process will take time about the 20
minutes
• Than this come to cooling plate to cool the material and then
add flavors, colours, and essence and mix it.
• After that this mixture is came to batch roller. Here through
the different types of die different shape are given to toffee by
the automatic machine.
• Then the toffee came for packaging and packed by the
automatic machine in different quantities.

16. ⇒ CANDY:
• Sugar, liquid, glucose, water milk powder and vegetable
fate are adding in the batch cooker and mix it.
• This mixture of material come to stream boiler and boils
the mixture at the temp. of 300 c. this process takes time of
15 to 20 minuts.
• After that the material came to candy vacuum machinery
and then adding the flavours, colours and essence and mix
it.
• Then it came to cooling plate.
• After cooling the material it came to batch roller. Heat the
shape to candy is dome through the different die.
• Then the candy is come to pilo-cack machinery and the
candy is packed in the different quantities.

17. Market Analysis
Today, the world is known as global village where the market
has very wide meaning. There is mot requiring meeting place or the
face to face meeting of seller and buyer. But by the means of
interaction or intercommunication the buyer and seller are meeting
even with out face to face meeting of with knowing to each other
directly. hear, the main role performs by the middlemen who
facilitate the all marketing operation.
There is a very well known not international, also local
company’s in the market that engages in producing TOFFEE AND
CANDY and chocolates like parle, Cadbury and there is more or
less competition between them.
DISTRIBUTION CHANNEL
WHOLESALERS
RETAILERS
CONSUMERS

18. Basis & Presumptions
 The unit will work for 9 hours in a day on one shift basis, inc.
lunch time.
 Wastage has been considered at the rate of 2%
 The time period for achieving full of max. capacity of
production is 3 year
 The labour wages are considered as per the prevailing wage
rate in the market
 The unit is working for the 6 day in a week.
 Working efficiency of the unit will be the 75%

19. Machinery & Equipments
⇒ CANDY
1. Steam boiler
2. Batch cooker with vacuum
3. Plasto plast machinery
4. 3 stage convener
5. Cutting plan
6. Candy vacuum machinery
7. Pilo pack machinery
8. Tools and other Misc.Instruments
⇒ TOFFEE
1. Boiler
2. Batch cooker
3. Stage wrapl seizer
4. Toffee content wrap machinery
5. Cooling plate

20. Financial Detail
FIXED CAPITAL
Sr. Particulars Sq. mt. Rs./ Sq. Amt.
No. Mt.
1 Land 250 2000 5,00,000
2 Building 250 3000 7,50,000
TOTAL 500 5000 12,50,000
TOTAL FIXED ASSENTS
Sr. Particulars Amt.
No.
1 Land & Building 12,50,000
2 Total Machinery & Equipment 12,50,000
TOTAL 25,00,000
WAGES & SALARY ADM.

21. Sr. Particulars No. of Amt.
No. Employees ( p.m.)
1 Supervisor 1 5,000
2 Mac.Operators 4 16,000
3 Semi Skilled Workers 3 9,000
4 Skilled Workers 4 16,000
5 Helper 2 4,000
6 Office Assistant Account 1 5,000
7 Sales Officer 5 15,000
8 Person & Watchman 5 10,000
80000
Add: Perquisites@15% 12000
NET WAGES & SALARY 92000

22. OTHER CONTINGENT EXPENDITURES
Sr. Particulars Amt.
No.
1 Printing & stationery 5,000
2 Telephone & postage 3,000
3 Transportation exp. 12,000
4 Misc.exp. 2,500
5 Repair 2,500
TOTAL 25,000
TOTAL WORKING CAPITAL
Sr. Particulars Amt.
No.
1 Raw material 5,00,000
2 Wages & salary 80,000
3 Utilities 20,000
4 Other contingent exp. 25,000
TOTAL 6,25,000
WORKING CAPITAL OF THE 3 MONTHS : 3* 6,25,000 =
18,75,000
WORKING CAPITAL OF THE 12 MONTH S: 12* 6,25,000 =
75,00,000
TOTAL CAPITAL INVESTMENT
Sr. Particulars Amt.
No.
1 Total Fixed Capital 24,50,000

23. 2 Total W.C. 18,75,000
TOTAL 43,25,000
SOURCES OF FINANCE
Sr. Particulars Contribution Amt.
No.
1 Owner capital 50% 2162500
2 Bank loan 20% 865000
3 Other loan 30% 1297500
TOTAL 100% 4325000
INTEREST ON CAPITAL
Sr. Particulars Rate Amt.
No. (%)
1 Owner capital 15% 324375
2 Bank loan 17% 147050
3 Other loan 16% 207600
TOTAL 679025
COST OF PRODUCT
Sr. Particulars Amt.
No.
1 Total W.C. 7500000
2 Dep. On Mac. (20%) 240000
3 Dep. On Land & Building (10%) 125000
4 Int. On Capital 679000
TOTAL 8544025

24. SALES PER ANNUM
Sr. Particulars Production Production Price Amt.
No. Monthly annual (K.G.)
(K.G.)
1 Toffee 12000 144000 30 4320000
2 Candy 12000 144000 35 5040000
Total 9360000

25. FIXED COST
Sr. No. Particulars Amt.
1 Dep. On Building 125000
2 Dep. On Machinery 240000
3 35% of Wages & Salary 32200
4 40% of Other exp. 10000
TOTAL 407200
V.C. = T.C. - F.C.
= 85,44,025 - 4,07,200
= 81,36,825

26. PROFIT BEFORE TAX = TOTAL REVENUE – TOTAL
COST
= 93,60,000 – 85,44,025
= 8,15,975
TAX = 8,15,975 * 30%
= 2,44,792
PROFIT AFTER TAX = PROFIT BEFORE TAX – TAX
PAYABLE
= 8,15,875 – 2,44,792
= 5,71,183

27. Break Even Analysis
• Break even point = fixed cost
-------------------- * 100
Fixed cost + profit
4, 07,200
= ------------------------ * 100
4,07,200 + 5,71,183
= 41.62%
• NAT PROFIT RATIO = NET PROFIT
----------------------- * 100
SALES
= 8, 15,975
---------------- * 100
93, 60,000
= 8.72%

28. • CONTRIBUTION = SALES – V.C.
= 93,60,000 – 81,36,825
= 12,23,175
• PROFIT VOLUME RATIO = CONTRIBUTION
--------------------------- * 100
SALES
= 12,23,175
------------------- * 100
93,60,000
= 13.07 %
SALES AT B.E.P. = FIXED COST
-----------------------* 100
P/V RATIO
= 4,07,200
------------- * 100
13.07%
= 31,15,532

29. Name of suppliers
1. M/S Vadgama Eng. Works
Fac. Area, Opp. Law Garden
Ahmedabad
2. M/S India Bakery Pvt. Ltd.
Nr. Juhu Chopaty
Bombay
3. M/S Patel & Patel Group
C.G. Road
Ahmedabad
Raw material supplier
1. Nutrin Syrups Ltd.
Metoda plot no. 90
Rajkot
2. Dairy Fresh & Dairy Farm
Near Tirupati Petroleum
Rajkot

30. Future plans
 To increase the profit of the co.
 To capture the local market share in the near future
 To expand the business activity & also producing food item
like, biscuit, bread etc.
 To implement the new technology in the business in the neat
future.

31. Conclusion
To conclude I must say that this is a great experience for the
student of M.B.A. This will enhance the entrepreneur skill among
the student, I get practical knowledge from the project like this and
aware about the industrial env. I got knowledge about the starting
of the business to the production process and to the selling of the
product. These will also reveals with the small scale industry for the
preparation of this ind. Like the same and it was a great
experiences.
At last but not in a least I wish and hopes that the co. get more
success and achieve its all desire goal in the near future.