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India is a nation on move. Its liberalized and open economic policies
have shown result. New avenues have opened up for new business activity. There
is aroma of all round profession in the air. In this progressive economic scenario,
one sector that has emerged as the most happening sector is the small-scale sector.
Therefore, the Govt. of India is providing various help for establishment and its
growth. It is proving with technical, financial & other guidance also.
The main objective of selecting this product is that there is a large
demand for the candles in every occasions & festivals as India is called the country
AIMS & OBJECTIVES
Business objective are very imp in an enterprise. It refers to the
purpose or goal for which the organization is performing.
1. Consumer Satisfaction:
Consumer here refers to the customer to whom this products will
be supplied for future processing and making ready for final consumption.
The primary objective of OM industries are to satisfy its customers and
fulfilling their expectations.
2. Profit earning:
The second objective is to earn profit through satisfying the
customer as business cannot survive without earning profit.
3. Performing Social Responsibilities:
Performing the social responsibilities of business enterprise
price is also one of the basic moral responsibilities. Social responsibility will
be fulfilled by giving employment opportunities, providing good quality
product at reasonable rate.
VISSION OF THE COMPANY
"To be India's NO 1 Company in Candle deparment Industry Dedicated to
Quality and Consistent Performance"
MISSION OF THE COMAPANY.
Consistently make good Products at the friendliest Prices.
Constantly Grow in Volume and Value through New Ideas
And by Imbibing the World's Best Technologies, Continuing to remain
relevant to our customers in India and the World as a Brand that Stands for
our Quality and More Value for Money than any others..
PROJECT AT GLANCE
1. Name of the Company: AV Industries
2. Location of the unit: “AV Industries”
Plot No. 1881
3 Brand Name: ‘INDIGO’
4 Form of Organization: Partnership firm
5. Name of the Partners: Twinkal Sureja
6. Name of the Product: Candles
7. Size of unit: Small – scale
8. Cost of Project: Rs.2778700 /-
9. Sources of Finance: Ownership Capital
10. Investment in Working
11. Investment in Fixed
JUSTIFICATION OF LOCATION
Best location is one, which is followed by availabilities of
infrastructure facilities with Raw Materials, labour, transportation, Govt. facilities,
if available & marketing etc. All these factors easily available at cheaper cost best
suits the factory site. These factors must be taken into due consideration before
deciding location of the unit so that any difficulties might not rise-up in future.
(a) Raw Material –
The first & foremost factor that affects the factory location is
availability of Raw Materials. Raw Material is of prime importance for the smooth
functioning of any production unit. In this unit 60% of the total cost is material
cost. The wax & thread rolls are easily available in Metoda so this site has been
(b) Supply of Labour –
Labour supply must also be cheap & readily available in ample
amount so that the work does not break down due to labour inadequacy. Making
candles is 99% manual work and therefore the need for semi-skilled & unskilled
workers arises. Here the labour is cheaply available.
(c) Transport Facilities –
A good transportation facility is very well required so that raw
materials reach in time to the unit & finished goods to the market – be it to the
wholesalers or to the retailers. A good deal of proper & cheap transport facility is
needed. Metoda has railways & roadways facility, which help to cater all markets.
At present the target market for my product is Gujarat & Maharashtra whereby
Roadways & Railways facility is easily available from Metoda.
(d) Infrastructure Facility –
For smooth functioning of any unit even the infrastructure facilities
must be properly available. Telephone, Fax, Banking, Insurance, Postal, Water,
Fuel, etc must be available at cheaper & regular interval. These are all available in
The brand name under which “AV” industry is going to manufacture
the candles is “INDIGO”. Indigo candles will be available in red light brown &
These candles can be used during marriages, festivals, to decorate the
hotels and restaurants as the wick, which will be used, is of good quality as the
making of candles is related to quality consciousness rather than quantity.
Later on, perfumed and aromatherapy candles will also be
Market Potential is the scope of your product occupying space in existing
market. Your customers, your market share, your contribution in the market
already existing, share in whole industry – all these aspects are covered under the
head Market Potential.
These days the artificial lighting concept as vanished and now people prefer
natural lightening during festivals and occasions, especially religious and
marriages. Therefore demand for candles will increase.
As all the classes of people can afford the candles the sales will definitely
increase, as the new concept is very catchy.
In the field of marketing, channels of distribution indicates the routes
of pathway through which goods and services flow or move from producers
to consumers. The route of channels of distribution includes the
manufacturer and the consumer as well as all intermediaries. These
components are linked in the channel system by one or more of the
marketing flows, such as transfer of title of ownership, physical distribution
of merchandise, transfer of title of ownership, physical distribution of
merchandise, transmission of marketing information and the flow of money
in the form of payment of prices and other dues.
The channel of Candle distribution of is as follows:
Dealers & Retailers
The raw materials are the base for the products without which the final
product is not possible. The raw materials used in making candles are:-
• Paraffin Wax-Wax is very essential for candle making. This can be
purchased at a candle making supply store and comes in the form of
granulated wax. Ensure that you buy it from quality suppliers, as it
can have a bearing on the final product.
• Color Dyes and Stearic acid - Use stearic acid to harden the candle.
It also helps the candles release from their molds by causing the wax
to shrink as it cools. Apply your creative ideas and use different or
blended colors to your candles. You can get color dyes from the
candle making supply stores and the use of these dyes depends on the
size of your candle. You can find these dyes in block, chips and liquid
form. Color dyes are highly concentrated and must be used sparingly.
• Moulds- Shop around to find out different designs of candle making
moulds. Moulds come in all shapes and sizes and you can put them to
best use by your creative efforts. You are limited only by your
• Ladle and Spoons - Use handy metal spoons or ladle to stir the wax
and pour it out.
• Wick - There is a wide range of wick types and sizes available in the
market. Choose a wick that is suitable for the size and shape of candle
you are making. The most common candle-making wick is braided
cotton that has been treated chemically to improve the quality of
burning. If the wick is too small, the candle will not burn well
whereas a large wick will cause a smoky flame
Paraffin wax melts at 130 degrees. While the wax melts, measure the size of
wick required for your mold.
Tie the wick to the center of the pencil or dowel.
Suspend the wick in the center of the mold with the help of small weight on
the other end.
Add stearic acid and color in another pot and allow them to dissolve. Once
the temperature reaches 190 degrees, combine the mixture into the pot with
the paraffin wax.
Stir and blend them together completely while maintaining the temperature
at 190 degrees.
Finally pour the contents into the mold and let the mixture cool. As the wax
cools, it will contract and a small well will form around the wick.
Touch the candle; if it is cold it is time to remove it from the mold. Safety is
critical in candle making especially when it comes to wax melting.
Wax melting is one of the dangerous aspects of candle making.
Keep attending to your pans once you heat wax. The characteristics of a
good candle are absence of bubbles or lines and long and even burning of
The color must be well distributed and the fragrance it emits must be
pleasant without being overpowering.
Production Capacity Schedule
Sr. no. Particulars Installed Capacity Utilized Capacity
a. Capacity in % 100% 60%
b. Daily Production 1000 Units 600 Units
c. No. of working days in
25 days 25 days
d. Monthly Production
(b * c)
25000 units 15000 units
e. No. of working days in
300 days 300 days
f. Yearly Production
(b * e)
300000 units 180000 units
Finance is an important function of business. The application of
planning to the function is financial planning. It involves the policies,
determination of objectives and procedure relating to the finance function.
Financial planning is an important function of a financial manager whether a
business is big or small this function has to be performed. It is necessary to
do financial planning for an existing as well as new business.
A financial plan is a statement estimating the amount of capital and
determining its compensation and another important aspect of financial plan
is to determine the pattern of financing.
0 Before raising finance it is essential to make estimates for long term as
well as short tern financial needs.
0 Long term financing is generally needed for fixed capital requirement i.e.
purchase of fixed assets.
Short term finance is generally needed for working capital
requirement i.e. marketable securities, debtors, etc.
In Candle, the financial planning is done for long tern or short term
financial requirements. Financial planning is necessary to reduce the cost of
finance and all the long term and short term finances is raised through
family funds and overdrafts. The requirement of all the long term is also
fulfilled through bank as and when needed
1 60 180000 150000 9.5 1425000
2 70 210000 210000 10 2100000
3 80 240000 260000 10 2600000
4 90 270000 265000 10.5 2782500
5 100 300000 295000 11 3245000
Total Fixed Assets
Particulars Area Rate (Rs.) Amount
Land (sq. mt.) 1000 810 810000 810000
Building (sq. ft.) 5000 300 1500000 1500000
Aluminum mould 8 1500 12000
Designer block 4 100 400
Stove 3 500 1500
Enamel vessels 8 50 400 14300
Furniture 50000 50000
Delivery Van 1 250000 250000
Computer 1 35000 35000 335000
Other equipments 700
Preliminary Expenses 60000 60000 60000
Interest on Own Capital
Details Amount Rate (%)
Total Interest On Capital: 222300
Depreciation @ SLM
Building 10 150000
Equipments 15 2250
Computer 40 14000
Furniture 15 7500
Delivery Van 15 37500
Total Depreciation 211250
Staff & Labour Salary
Rate Amount/ month Amount
Manager 1 5500 5500 66000
Salesman 1 1000 1000 12000
Delivery boy 2 500 1000 12000
Peon 1 500 500 6000
Watchman 1 500 500 6000
Semi-skilled labour 3 2000 6000 72000
Unskilled labour 2 1000 2000 24000
Total Salary: 16500 198000
BREAK EVEN ANALYSIS
Break even point is the point of sale at which company makes neither
profit nor loss. The marginal costing technique is based on the idea that
difference of sales and variable cost of sales provides for a fund, which is
referred to as contribution. Contribution provides for fixed cost and profit.
At break-even point, the contribution is just enough to provide for fixed
cost. If actual sales level is above break-even point, the company will make
profit. If actual sales level is below break-even point, the company will incur
loss. When cost-volume-profit relationship is presented graphically, the
point, at which total cost line and total sales line intersect each other will be
the break-even point.
Break-even point is that point of achieving; where total revenue &
total expenses are equal. It is the point of zero profit. If the sales exceed
BEP the business will earn profit & if it decreases from BEP the business
will incur loss. Thus, BEP can be defined as the minimum level of
production & sales & company must attain in order to be economically
BREAK EVEN ANALYSIS
Raw Materials 360000
Salary (labourers) 96000
Other expenses (40%) 69840
Utilities (60%) 57600
Total Variable Cost: 560160
Interest on Capital 222300
Salary (wages) 102000
Other expenses (60%) 69840
Preliminary Expenses 20000
Utilities (40%) 38400
Total Fixed Cost: 663790
Fixed cost per unit = 663790
= Rs. 3.68/-
Variable cost per unit = 560160
= Rs. 3.112/-
Total cost per unit = 3.96 + 3.11
A comparative study of the relationship, between various items of
financial statements, expressed as ratios, reveals the profitability, liquidity,
solvency as well as the overall financial position of the enterprises.
Ratio analysis helps to analyze and understand the financial health
and trend of a business, its past performance makes it possible to have
forecast about future state of the business. Inter-firm comparison and intra-
firm comparison becomes easier through the analysis. Past performance and
future projections could be reviewed through ratio analysis easily.
The ratio analysis provides useful data to the management, which
would help them in taking important policy decisions. Diverse groups of
people make use of ratios, to determine a particular aspect of the financial
position of the company, in which they are interested.
1. Contribution Per Unit = Sales Price - Variable Cost
per unit per unit
= 9.5 – 3.11
2. BEP (in Units) = Fixed Cost _
Contribution per unit
= 103880 units.
3. BEP (in Rs.) = BEP * Sales Price per unit
= Rs. 986860/-
4. BEP (in %) = Fixed Cost _ * Utilized Capacity
= 663790 *60
5. P/V Ratio = Contribution * 100
= 864840 * 100
6. Gross Profit Ratio = Gross Profit
1425000 – 203700
7. Net Profit Ratio = Net Profit *100
= 322870 * 100
“Profit planning is the planning of future operations to attain
maximum profit or to maintain a specific level of profit.”
Profit is not merely a result of enough financial investment but it is a
result of collective efforts of management, their decision capacity, proper
planning of production and marketing and proper use of professional skills.
Profit means excess of revenue after deducting all expenditures,
inclusive of all cost.
Candle has specified future plans to follow. It has fixed goals to be
achieved in future. Certain future plans of this unit are as under.
0 Company wants to increase its sales and profit and be a large scale
0 Company wants to wider its network in whole country. For it they are
deciding to establish branches in most of the state in India.
0 To increase the production capacity and thereby employing more and
more number of workers.
0 The risk of failure of the project is that initially the required amount
of sales will not be achievable & will result in loss.
0 Initially productive would be low but cost of production may be
0 The unit will operate in highly competitive market where already
other such products have gained important position.
0 It may take time to beat the competitor’s products.
Thus, this company has bright future vision and it wants to extend its
Looking for the government for globalization in fast industrial
development liberalization and relaxation policy of Govt. has given very
much boosting up to the growth of industries small & big produces in India.
But now-a-days market competition has increased in all fields.
Particularly, for this product at small business concern the owner
should not fight out with the competition because there are no more than 15
small & tiny industries of Candle products in Rajkot district. We can see that
there is keen competition for such small products among big industries. But
small scale industries are trying to develop their market all over India.
Every new business requires to determine its risk factors
involved in the business. As the product is new the main risk is that whether
market will readily accept the product or not. It will prove success if it
properly marketed. Following are some of the risk factors the new business
1. The unit will operate in competitive market where other
units have already achieved a good name in the market.
2. It may take time to beat the competitors market.
In the product project report on Candle I have discussed all financial
data relevant information.
The market of Candle is expanding & demand for the product is
increasing day by day. The return in this business is also satisfactory.
At last it can be said that future of this product is very bright.
With the expectation of high profitability & good completing of high
That it would be the perfect product to be manufactured in today’s
Roll no:- 91