INDEX

No. Particular

1 Introduction of Product.

2 Project at a Glance.

3 Partners Background.

4 Location.

5 Market Potential.

6 Raw material.

7 Basis and Presumption.

8 Implementation Schedule.

9 Manufacturing Process.

10 Production Capacity.

11 Financial Details of Project.

(A) Details of lord and Building.

(B) Machinery & Equipments.

(C) Other Fixed Assets.

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12 Working Capital.

(A) Personnel.

(B) Raw material.

(C) Utilities.

(D) Other Contingent Express.

13 Project Cost.

14 Sources of Funds.

15 Depreciation.

16 Financial Analysis.

(A) Cost of Production.

(B) Turnover.

(C) Return on Investment.

(D) Profitability Analysis.

(E) Break Even Analysis.

(F) Balance Sheet.

17 Suppliers of Machinery.

18 Future Prospects.

19 Risk Factors.

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 Introduction Of Product
Biscuits constitute an important item of bakery industry.

Today Biscuits become a common item of consumption among all

classes of people with tea or coffee, Biscuits make a tasty nutritious

shake. Biscuits has become here and more popular as a convenient

food with the changes taking place in the economic life of masses,

the consumption of Biscuit has been increasing over the years, and

this envisages the scope for setting up of Biscuit Mixture units.

People started manufacturing Biscuits of their own taste by

using baking ovens very popular in the market now-a-days. To

made it more convenient there is a need of Biscuit Mixture which

will be ready mix and after adding water, the dough will be ready

mix hour on commercial scale saves times, labour and is

sometimes ever cheap to the housewives.

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 Project At A Glance

Name of unit : RAM Food Product

Communication Address : GIDC, AJI Vasahat, Rajkot- 360 001
Form of organization : Partnership Firm, Register Under,
Partnership Act, 1932
Partners : 1. Ganglani Paresh K.
2. Ganglani Deepak K.
Name of the Product : BISCUIT
S.S.I. Registration No. : Application has been Made
Subsidy Registration No. : Application has been Made
Type of Industry : Food Industries
Type of Organization : Partnership
Budget cost of Product : 22,23,000
Means of Finance : Owned Capital and Loan from GSFC
Bank Rajkot.
No. of Employees : 16
Plant Installed Capacity : 100 %

Partners Background
Partner I

Name : Ganglani Paresh K.

Age : 20 Years.
Education : B.B.A. with Advance, Marketing

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Address
Financial Contribution
Duties and Responsibilities
Management.
: Shastri Nagar, Government Quarter, Q-
No. D-89, Rajkot 360 001.
: 5,55,750.
: Marketing and Production Department.

Partner II

Name : Ganglani Deepak K.

Age : 25 Years.
Education : M.B.A. with Financial Management.
Address : Shastri Nagar, Government Quarter, Q-
No. D-89, Rajkot 360 001.
Financial Contribution : 5,55,750.
Duties and Responsibilities : Personnel and Financial Department.

Location
To choose the proper location is first step for establishment

of unit. True selection of location helps unit for better growth,

while selecting the site of location the factors should be considered

are as follows:

1. Availability of Raw material.

2. Cheaper Manpower.

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3. Transport Facilities.

4. Availability of Energy sources.

I shall start Biscuits industry in Rajkot at GIDC, Aji Vasahat

because Raw material and labour are the main factors in this

industry which is early available at this place.

Market Potential
The consumption of Biscuit has been increasing over the

years. The finding of survey indicates that nearly 47% of Biscuits

are consumed in the rural and semi-urban areas which constitutes

bulk of our population. Looking at such a demand this ready mix

can definitely be a popular item particularly in rural and urban

areas.

So, we can class by whole Biscuit market into there

categories based on area:

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1. Urban Market.

2. Semi-Urban Market.

3. Rural Market.

Raw Material
The main raw material used in Biscuit Mixture are as

follows:

1. Wheat Flour.

2. Sugar.

3. Vegetable Fat.

4. Miscellaneous Items.

(A) Milk Powder.

(B) Chemical.

(C) Colour Flavor.

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 (D) Coco Vit Fat.

(E) Glucose Etc.

5. Packing Material.

Above all raw materials are easily available from local

market. So, there is no difficulty to get raw material. So, there is les

of transportation. All the materials are available from local market.

Basis And Presumption

1. The scheme is based on single shift 300 working days per

annul.

2. For the first 2 years the utilisation capacity will be 65.71% from

the third year onwards it will run at its full capacity.

3. Labour wages as per the rate prevailing in the area.

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Implementation Schedule
The Implementation Schedule will be given as below:

1. Preparation of Project Report Selection of Site 3 Months

Registration as S.S.I. unit.
2. Availability of Finance Selection of Machinery, 3 Months
Procurement of Machines.
3. Erection and Commissioning Trial Run. 1 Months
4. Recruitment of labours and Commercial Months
Production.

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 Manufacturing Process
The ingredients normally used are Maida, Sugar, Vanaspati

or Bakery Fat, Backing powder, Milk powder, Essence and

Chemicals. The ingredients as per formulation except Vanaspati

bakery fat are dried to desired moisture content before grinding if

required. They are then weighed, mixed and blended thoroughly.

The product thus obtained is packed in polythene bags of suitable

size paper box and then kept in big cartoons for storing and

transportation. The fat is to be added at the fire of preparation of

the mixture for baking by the consumer.

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 Quality Specification: -

It is a new product and therefore the quality specifications

about Moisture content and bacteriological count etc. are required

to be looked into.

Production Capacity
No. Item Size Production Utilized
1. Biscuit Mixture. 100 gm. Packets 3,50,000 2,62,500
Packets Packets.
2. Biscuit Mixture. 200 gm. Packets 3,50,000 2,62,500
Packets Packets.

The total production capacity at 100% is 3,50,000 packets of

100 gm & 3,50,000 packets of 200 gm.

The utilized capacity is about 65.71% so 2,30,000 packets of

100 gm & 2,30,000 packets of 200 gm.

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 Financial Aspect
(I) Details of Lard & Building

No. Details Area [sq. Ht] PSM Rate Total Valve

1. Lard & Building 600 2,000 12,00,000

(II) Machinery & Equipment

No. Details No. of Amount

Machines
1. Shifter Fitted with 3 Hp Motor 1 25,000
2. Micropuluerser complete with Motor 1 55,000
3. Cabinet model electrically operated 1 1,00,000
oven with 48 trays each 32" 16" 1"
with thermostatic control & other
accustoms
4. Weighing machine

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 a. Platform Type capacity 100 1 15,000
kg.
b. Table model. 1 5,000
5. Polythene Bag sealing machine (5,000 2 10,000
each)
6. Miscellaneous equipments tools, trays, 55,000
bells etc.
Total Machinery & Equipment 2,65,000

(III) Other Fixed Assets

No. Details Amount

1. Electricity & Installation 26,500
2. Office Furniture & Other Equipment 80,500
1,07,000

Total Fixed Cost = 12,00,000 + 2,65,000 + 1,07,000

= 15,72,000

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 Working Capital
1. Personnel
No. Particular No. of Monthly Total Cost
Employees
1. Manager 1 8,500 8,500
2. Accountant Store-keeper 1 6,500 6,500
3. Clerk cum Typist 1 4,000 4,000
4. Mechanical Supervisor 1 3,000 3,000
5. Peon cum Chowkidar 2 2,000 4,000
6. Skilled labour 3 2,100 6,300
7. Unskilled labour 7 1,100 7,700
Total salary & wages 16 40,000
Add Facilities (20% of salary) 8,000
Total 48,000
2. Raw material [per month]

No. Particular Quantity Rate Value

(14 Kg) [perkg.]
1. Wheat Flour 4,200 7 29,400
2. Sugar 1,300 15 19,500
3. Vegetable Fat 750 60 37,500
4. Miscellaneous items Milk 15,600
Powder, Chemicals, Colour,
Flavor, Coco, Vit, Fat, Glucose,
etc.
5. Packing Material 42,000
Total 1,44,000

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 3. Utilities [per month]

No. Particular Amount

1. Power 4,000
2. Water 6,000
Total 10,000

4. Other Contingent Expenses [per month]

No. Particulars Amount

1. Postage and Stationary. 800
2. Telephone. 2,000
3. Consumable Stores. 1,200
4. Repair & maintenance. 1,000
5. Transport Charge. 2,000
6. Insurance. 1,000
7. Sales Expenses. 3,000
8. Other Miscellaneous Expenses. 2,000
Total 15,000
Total Recurring expenditure

= 1,44,000 + 48,000 + 15,000 + 10,000

= Rs. 2,17,000

Working Capital for 3 Months

= 2,17,000 3

= Rs. 6,51,000

Project Cost
1. Fixed Capital

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No. Particular Amount
1. Land and Building 12,00,000
2. Machinery & Equipment 2,65,000
3. Other Fixed & Installation
a. Electricity & Installation 26,500
b. Office Function & other Equipment 80,500
Total 15,72,000

2. Working Capital

No. Particular Amount

1. Personnel (Wages & Salary) 48,000
2. Raw Material 1,44,000
3. Utility of Power & Water 10,000
4. Other contingent Expenses 15,000
Total 2,17,000

Total capital investment: -

Fixed Capital Investment 15,72,000

Working Capital for 3 months (2,17,000 3) 6,51,000

Total Project Cost 22,23,000

Sources of Funds: -

No. Description Amount

1. Owned Capital 11,11,500
2. Borrowed Capital 11,11,500
22,23,000

Partners Capital: -

No. Description Amount

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 1. Paresh K. Ganglani (50%) 5,55,750
2. Deepak K. Ganglani (50%) 5,55,750
11,11,500

Borrowed Capital: -

No. Description Amount

1. G.S.F.C. Bank Loan 11,11,500
11,11,500

Interest on Fund: -

No. Description Rate Amount

1. Owned Capital 9% 1,00,035
2. Borrowed Capital 12% 1,33,380
2,33,415

Depreciation: -

No. Description Rate Amount

1. Depreciation on Machinery 25% 66,250
2. Depreciation on L&B 15% 1,80,000
3. Depreciation on Other 12% 12,840
Assets

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 2,59,090

Cost of Production
No. Particulars Amount
1. Total recurring cost per year (2,17,000 12) 26,04,000
2. Total Depreciation 2,59,090
3. Interest on Investment 2,33,415
30,96,505

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 Turnover
No. Particular Rate per packet Quantity Value
1. Biscuit Mixture 200 Rs. 9.5 2,30,000 21,85,000

g.m. Packet
2. Biscuit Mixture 100 Rs. 4.5 2,30,000 10,35,000

g.m. Packet
Annual Turnover 32,20,000

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 Return on Investment
ROI = EBIT 100

Cost of Project

= 3,56,910 100

22,23,000

= 16.05%

Cost Of Capital

Interest on Owned Capital 9%

Interest on Borrowed Capital 12 %

COC = 9 + 12

= 10.5 %

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 Thus, ROI > COC

Profitability Analysis
Sales 32,20,000.00
Less: Cost of Production 28,36,090.00
EBIT 3,56,910.00
Less: Interest 2,33,415.00
EBIT 1,23,495.00
Less: Tax 35 % 43,223.25
PAT 80,271.75

Profit Volume Ratio:

PUR = Contribution 100

Sales

= 9,18,400 100

32,20,000

= 28.52%

Net Profit Ratio:

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Net Profit Ratio = Net Profit 100

Sales

= 80,271.75 100

32,20,000

= 2.50%

Break Even Analysis

For the calculation of B.E.P., we have to calculate fixed cost

& variable cost

Fixed Cost:

Total Depreciation 2,59,090

40% of Salary & Wages 2,30,400

40% of other Contingent Expenses 72,000

Interest on Total Investment 2,33,415

7,94,905

Variable Cost:

60% of Salary & Wages 3,45,600

60% of other Contingent Expenses 1,08,000

Raw Materials 17,28,000

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Utilities 1,20,000

23,01,600

Contribution:

Contribution = Sales Variable Cost

= 32,20,000 23,01,600

= 9,18,400

BREAK EVEN POINT:

B.E.P. (in %) = Fixed Cost Utilized Capacity

Contribution

= 7,94,905 65.71

9,18,400

= 56,87%

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 Trading & P&L Acc.

Particulars Amount Particulars Amount

Purchase 17,28,000 Sales 32,20,000
Utility 1,20,000
Wages 92,400
Gross Profit 12,79,600
32,20,000 32,20,000

Salary 4,83,600.00 Gross Profit 12,79,600

Depreciation 2,59,090.00
Interest 2,33,415.00
Other Contingent 1,80,000.00
Expenses
EBT 1,23,495.00
Less: Tax 43223.25
Net Profit 80271.25
12,79,600 12,79,600

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 Balance Sheet
Capabilities Amount Assets Amount
Capital: L&B
Owned: 12,00,000
Dep.: 1,80,000 10,20,000
Paresh 5,55,750
Deepak 5,55,750 11,11,500.00
Machine& Equip.
Borrowed: 11,11,500.00 2,65,000
Dep.: 66,250 1,98,750
Interest 2,33,415.00
Other Assets
Net Profit 80,271.75 1,07,000
Dep.: 12,840 94,160
25,36,686.75 Cash & Bank 12,23,776.75
25,36,686.75

Suppliers of Machinery

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 Address of Machines and
Equipment Suppliers:
(i) M/s. Nagpal Brothers,
2789 Zorawar Singh Marg, Delhi.

(ii) M/s. Nagpal Engg. Works,

Loharogate, Patiala.

(iii) M/s. Baltiboi & co. (p) Ltd.,

P.B. No. 1904 Fort, Bombay 400 001.

(iv) M/s. Novel Engineers Pvt. Limited,

4th Floor, Sambhava Chambers,

Sir Phirozshah Mehta Road,

Bombay 400 001.

(v) M/s. Narang Corporation,

P 24 Cop naught place,

New Delhi 110 002.

Address of raw material Suppliers:

Locally Available

Future Prospects
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 Every units airs at its growth and development in future at

the time of establishment. The future development of any unit

shows its success in the market. Future development may be get

through the increasing installed capacity or utilizing the existing

resources of the unit to the full extend.

So far as our unit is concern we have to utilize folly the

available resources of our unit and by increasing production

capacity we want to cover none market share with maintenance of

good quality.

There are so many varieties of Biscuits in the market. The

consumption of Biscuits has been increasing over the year. We

wants to cover more market in rural as well as in urban areas.

Looking to this good prospect I select the product of Biscuit.

It is for medium clays people as well as poor class people also.

Risk Factors

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 In each and every business activity there is some risk in the

some way our unit is also having some risk factory, which are as

follows:

As our product is under the list of food items so if license not

provided by government authority within a specific time it is

difficult to start the production.

There is also possibility for non-receipt or less receipt of loan

from government.

At present there is minimum competition in the market but in

the future then may be cut-throat competition and it may be

difficult to continue the business at the time of competition.

It is also possible that all the factory may suitable for production

and finance but the marketing of our products may not enough

so there is every possibility of failure or close-down the unit.

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