Air Conditioner Window Type

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Product Code 355204002
Quality and Standards IS 1391 : 1971
IS 7613 : 1975
IS 8148 : 1976
Production Capacity Value : Rs 240.Lakhs (per annum)
Uploaded on April 2007


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.

Basis 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 double shift basis.

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





Capacity Utilization 70% 75% 80%


Interest has been taken @ 12% per annum.


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)

Sales Value Computation


Ist Yr.

IInd Yr.

IIIrd Yr.

Capacity Utilization 70% 75% 80%
Production (Nos.) 840 900 960
Rate (each) 20000 20500 21000
Sale Value (in lakh) 168 184.5 201.6

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.

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
Charging of Gas
Final Testing.
The Various Components used are: Condensing Unit
Compressor (Kirloskar, Carrier, Shriram)
Fan with motor (960 RPM)
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.

Financial Aspects

Fixed Capital

(i) Land and Building (Rs. in Lakh)
Land and Site Development Land 200 Sq. Mtr. @ 6000/ Sq. mtr. 1200000
Cost of Building 2000 Sq. ft @ Rs. 1500/Sq. ft. 3000000
Total 4200000

(ii) Machinery and Equipments



Amount (In Rs.)

Sheet Bending Machine 1 25000
Sheet Cutting Machine 1 28000
Hand Press 1 12000
Portable Grinder - 1/2 HP 1 6000
Drilling Machine - 1/2 HP 1 10000
Riveting Machine - 1/2 HP 1 9000
Vacuum Pump for charging 1 HP 1 15000
Pressure Pump for Testing 1 HP 1 Set 14000
Charging Panel 2 Sets 5000
Accetylene, Oxygen Cylinder, Torch, hose etc. L.S. 28000
Swagging, Flaring, Soldering Tools and Fixture 1 25000
Spot Welding Machine 1 25000
Clamp Meter (digital) 1 Set 4000
Spray Gun, Compressor, etc.   5000
Working Table, Chair and Office equipments   50000
Generator Set & Bor well(for Electricity & Water)   100000
Electrification and Installation   26100
Total 387100
(iii) Pre-operative Expenses 50000

Total Fixed Capital Investment



Land and Building 4200000
Plant and Machinery 387100
Pre-Operative Expenses 50000
Total 4637100

B. Working Capital (per month)

(i) Personnel



Salary (Rs.)

Amount (In Rs.)

Manager 1 20000 20000
Sales Engineer 1 12000 12000
Supervisor 1 7000 7000
Clerk-cum-Accountant 1 7000 7000
Skilled workers 6 6000 36000
Un-skilled Workers 5 5000 25000
Watchman-cum-Peon 2 3000 6000
Total 113000
Add Perquisites @ 22% 24860
Total 137860

(ii) Raw Material (per month)




Rate/Unit (Rs.)

Amount (Rs.)

Compressor 1.5 Tonne A/c 100 Nos 8000 800000
G.I. Sheet 100 Nos 1500 150000
Fan Motor 100 Nos 1000 100000
Blower 100 Nos 1700 170000
Condenser Fan 100 Nos 300 30000
Starting Capacitor 100 Nos 250 25000
Running Capacitor 36 MFD 100 Nos 320 32000
Wires, Relay, Knob, Switch, etc. 100 Set 1000 100000
Capillary Copper 100 Set 800 80000
Plastic Grill 100 Set 300 30000
F-22/134 Gas 200 Kg 250 50000
Other Pretty items Materials like Screw, Nut Bolts, Flux, etc.       10000
Total 1577000

(iii) Utilities


(In Rs.)

Power requirement 10 HP Electricity Charges (per month) 3000
Total 3000

(iv) Other Contingent Expenses


(In Rs.)

Postage and Stationery/ Telephone charges 5000
Repair and Maintenance 5000
Selling and Marketing 10000
Travelling Expenses 10000
Miscellaneous Expenses 5000
Total 35000

(v) Total Recurring Expenditure (per month)

(v) Total Working Capital (per month) (i + ii + iii + iv) 1752860

C. Total Capital Investment

(i) Fixed Capital 4637100
(ii) Working Capital for 1½ months 2629290
Total 7266390

Financial Analysis

Cost of Production (per year)

(In Rs.)

Recurring expenditure 21034320
Depreciation on land and Building @ 5% 210000
Depreciation on Machines/ Equipment @20% 77420
Interest on Investment @ 12% 871967
Total 22193707
Sales/Turnover (per annum) 24000000
By sale of window type 1200 Nos. Rs.2,40,00,000 A-C 1.5 T Cap @ Rs. 20000 Each
Profit (per annum) 1806293

Net Profit Ratio

  Profit × 100
  Total Sales
  = 1806293 × 100
  = 7.53%

Rate of Return

  Profit × 100
  Total Investment
  1806293 × 100
  = 24.86

Break-even Point

Fixed Cost

(In Rs.)

Depreciation 287420
Interest on investment 871967
40% of Salary and wages 661728
40% of other contingent expenses 168000
40% of utilities 14400
Total 2003515

B.E.P Fixed Cost × 100
  Fixed Cost + Profit
  = 2003515 × 100
  2003515 +1806293
  = 52.59%

Addresses of Machinery Suppliers

  • M/s. Fridge Tools
    Darya Ganj,
    Delhi - 110002
  • M/s. Avery India Ltd.
    Plot No. 50-59,
    Sector - 25, Ballabhgarh,
    Faridabad – 121004
  • M/s. Henco Corporation
    P.B. No. 1645, 308,
    Perin Nariman Street,
    Behind Reserve Bank,
    Fort, Mumbai – 400001
  • M/s. Parekh Machine Tools
    5, Khetra Das Lane,
    Beside Broadway Hotel,
    Kolkata – 700012
  • M/s. Keshav Enterprises
    E-211, Kishan Vihar,
  • M/s. Essential Machine Tools Pvt. Ltd.
    5, Nyaymurthi G.N. Vaidya Marg,
    P.O. Box No.2,
    Behind State Bank,
    Fort, Mumbai–400001

Addresses of Machinery Suppliers

  • M/s. Quality Enterprises
    Shop No. 8, Shree Nath,
    Mulund (E),
  • M/s. Mistcold Sales and Service Pvt. Ltd.
    F-110, Lado Sarai,
    Near Central Bank,
    New Delhi–110030
  • M/s. Blowtech Air Devices Pvt. Ltd.
    F-53, Sector 11,
    Noida–201301 (U.P.)
  • M/s. Air Conditioning Components Company
    Shop No.3, Accord Building,
    Chakala, Opp. Videocon,
    Andheri-Kurla Road, Andheri (E),
  • M/s. Walia Refrigeration Co.
    3796, David Street,
    Darya Ganj,
    New Delhi–110002
  • M/s. Seagul Fabricators Pvt. Ltd.
    Industry House,
    23-B, Mahal Industrial Estate,
    Mahakali Caves Road, Andheri (E),
  • M/s. Kirloskar Copeland Limited
    Shree Meenakshi Nilayam,
    30, Arcot Mudali Street,
    T. Nagar,

For further information please contact

Information Manager
TIMEIS Project