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Air Conditioner Window Type
PRODUCT CODE QUALITY AND STANDARDS : 355204002 : IS 1391 : 1971 IS 7613 : 1975 IS 8148 : 1976 : Value : Rs. 216 Lakhs (per annum) : February, 2003 : Small Industries Service Institute Masat Industrial Estate, Silvassa–396230 U.T. of Dadra And Nagar Haveli. Phone Nos. : (0260): 2640933, 2643103
PRODUCTION CAPACITY MONTH AND YEAR OF PREPARATION PREPARED BY
INTRODUCTION
Air Conditioners perform cleaning, circulating, temperature controlling and humidity controlling of air function within a specified area. Window type Air Conditioners being a compact unit, is installed near the space to be air conditioned.
MARKET POTENTIAL
Now a days, not only human beings but Machines, Computers, & Processors also require conditioned air for proper functioning e.g. CNC Machines, Testing Labs, Calibration Centre etc. The demand of Air Conditioners has emerged, in a bigway. In middle upper class families, Air Conditioners have become very popular. These are used in Offices, Showrooms, Houses, Hotels etc. Large Companies like Shri Ram, Carrier Aircon, Lllyods, Jainson, L.G.,
Videocon, Samsung, Voltas etc. are doing very good business in Air Conditioners upto the capacity of 2 Tonnes rating. As the society is moving towards materialism and a lot of emphasis is put on purchasing modern utilities/ amenities and domestic appliances with maximum facilities, the demand of Window type AC is bound to increase in times to come. Therefore, there is good demand of Window type Air Conditioners.
B ASIS AND PRESUMPTIONS
General Assumptions In carrying out financial analysis, it is assumed that the unit price of raw material, utilities, and finished goods shall increase by 5% every year. Number of Days and Shifts It is assumed that unit would be working 300 days in a year on single shift basis.
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A IR CONDITIONER WINDOW TY P E
Installed Capacity Installed Capacity is based on assembly of Air Conditioners and Testing Performance Test. Four Air Conditioners can be assembled every day. Hence capacity (per month) = 4 × 25 = 100 Capacity (per annum) = 100 × 12 = 1200 Capacity Utilization On the basis of general industrial experience, capacity utilization in terms of Installed Capacity is assumed as under: Year 1st 2nd 3rd Capacity Utilization 70% 75% 80%
Sales Value Computation
Particulars Capacity Utilization Production (Nos.) Rate (each) Ist Yr. 70% 840 18000 IInd Yr. 75% 900 19000 171.00 IIIrd Yr. 80% 960 19500 187.20
Sale Value (in lakh)151.20
Excise Duty Excise duty on Air Conditioner is 24% afer the budget 2003-2004.
Raw Material Basic Raw Materials for manufacturing of Air Conditioners are Compressor, G.I. Sheet, Fan Motor, Blower, Condenser Fan, Starting Capacitor, Running Capacitor, Wires, Relay Knob, Switch, Plastic Grill, F-22/134 A Gas.
Interest Interest has been taken @ 16% per annum. Depreciation Depreciation on Plant and Machinery has been taken @ 10%. Administrative and Selling Expenses Administrative and Selling Expenses have been assumed to be 10% of the total gross sale. This includes salary of Administrative and Technical Staff, Commission, Trade Discount, Printing Publication of Literatures, etc. Sales Price Market Price of the Window type Air Conditioner is around Rs. 20,000 (1.5 Tonne Capacity)
TECHNICAL ASPECTS
Process of Manufacture Manufacturing of Window type Air Conditioner involves procuring of various components like Compressor, Conductor, Coil, Copper Pipe Cabinet, Frame, Grill, Switches, Wire etc. Testing of equipments Assembly Charging of Gas Final Testing.
The Various Components used are: Condensing Unit Compressor (Kirloskar, Carrier, Shriram) Condensor Fan with motor (960 RPM)
A IR CONDITIONER WINDOW TY P E
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Outer Casing Evaporative Unit Evaporative Coil (Feeder Lllyods or local) Plastic Grill Blower with motor Air Filter Other items required are : starting Capacitor, Insulated Copper Pipe, F22/ 134A Gas, Nut Bolts, Rivets, Wires, etc. Quality Control and Standards Air Conditioner is a consumer durable item and hence its performance should be assured by strict Quality Control. All bought out components should be tested to avoid any gas leakage. After assembly, the performance of the Air Conditioner should be tested as IS 1391, IS 7613 and IS 8148. Pollution Control The Freon 22 Gas is considered harmful for Ozone layer and hence its escape to atmosphere must be avoided at all costs. The Unit should adopt a strategy to adopt new ozone friendly coolants such as HCFC; 134A etc.
Sl. Particulars No. 4. Portable Grinder - 1/2 HP 5. Drilling Machine - 1/2 HP 6. Riveting Machine - 1/2 HP 7. Vacuum Pump for charging 1 HP 8. Pressure Pump for Testing 1 HP 9. Charging Panel 10. Accetylene, Oxygen Cylinder, Torch, hose etc. 11. Swagging, Flaring, Soldering Tools and Fixture 12. Spot Welding Machine 13. Clamp Meter (digital) 15. Working Table, Chair and Office equipments
Electrification and Installation
Total (iii) Pre-operative Expenses Total Fixed Capital Investment 1. Land and Building 2. Plant and Machinery 3. Pre-Operative Expenses Total
(Rs. in lakh) 11.00 1.80 0.20 13.00
FINANCIAL ASPECTS
A. Fixed Capital
(i) Land and Building (Rs. in Lakh) 4.00 7.00 11.00 1. Land and Site Development Land 200 Sq. Mtr. @ 2000/ Sq. mtr. 2. Cost of Building 2000 Sq. ft @ Rs. 350/Sq. ft. Total (ii) Machinery and Equipment Sl. Particulars No. 1. Sheet Bending Machine 2. Sheet Cutting Machine 3. Hand Press No. 1 1 1 Amount (In Rs.) 12,000 15,000 10,000
B. Working Capital (per month)
(i) Personnel Sl. Category No. 1. Manager 2. Sales Engineer 3. Supervisor 5. Skilled workers 6. Un-skilled Workers No. 1 1 1 6 5 Total Salary (Rs.) 7000 6000 5000 4000 3000 2000 2000 Amount (In Rs.) 7,000 6,000 5,000 4,000 18,000 10,000 4,000 54,000 8,000 Total 62,000
4. Clerk-cum-Accountant 1
7. Watchman-cum-Peon 2
Add Perquisites @ 15%
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(ii) Raw Material (per month) Sl. Particulars No. Qty. Rate (Rs.) Amount (In Rs.) 8,00,000 1,00,000 1,00,000 1,70,000 30,000 25,000 32,000
C. Total Capital Investment
(1) Fixed Capital (2) Working Capital for 1½ months Total Rs. 13,00,000 Rs. 24,00,375 Rs. 37,00,375
FINANCIAL ANALYSIS
(1) Cost of Production (per annum) 1. Raw materials 2. Salary and wages 3. Utilities 4. Other Contingent Expenses 5. Depreciation on land and Building @ 5% 6. Depreciation on Machines/ Equipment @20% 7. Interest on Investment @ 16% Total (2) Sales/Turnover (per annum) By sale of window type 1200 Nos. Rs.2,16,00,000 A-C 1.5 T Cap @ Rs. 18000 Each (3) Profit (per annum) Rs. 2,16,00,000 - Rs. 1,98,90,000 = Rs. 17,10,000 (4) Net Profit Ratio = Profit × 100 Total Sales = 17,10,000 × 100 2,16,00,,000 = 7.9% (5) Rate of Return = Profit × 100 Total Investment = 17,10,000 × 100 37,00,375 = 46.2% (6) Break-even Point Fixed Cost (per year) Depreciation Interest on investment 40% of Salary and wages 40% of other contingent expenses 40% of utilities Total (In Rs.) 95,000 5,92,000 2,97,600 43,200 10,800 10,38,600 (Rs.) 183,24,000 7,44,000 27,000 1,08,000 55,000 40,000 5,92,000 1,98,90,000
8. Wires, Relay, Knob, 100 Set Switch, etc. 9. Capillary Copper 10. Plastic Grill 11. F-22/134 Gas 100 Set 100 Set 200 Kg
1000 800 300 250
1,00,000 80,000 30,000 50,000 10,000
12. Other Pretty items Materials like Screw, Nut Bolts, Flux, etc. Total (iii) Utilities Power requirement 10 HP Electricity Charges (per annum) Water and consumables Total (iv) Other Contingent Expenses Postage and Stationery/ Telephone charges Repair and Maintenance Selling and Marketing Travelling Expenses Miscellaneous Expenses Total
