Air Conditioner Window Type
| 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 |
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.
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
Year |
1st |
2nd |
3rd |
| Capacity Utilization | 70% | 75% | 80% |
Interest
Interest has been taken @ 12% 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)
Sales Value Computation
Particulars |
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
Assembly
Charging of Gas
Final Testing.
The Various Components used are: Condensing Unit
Compressor (Kirloskar, Carrier, Shriram)
Condensor
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
Particulars |
No. |
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
Rs |
|
| Land and Building | 4200000 |
| Plant and Machinery | 387100 |
| Pre-Operative Expenses | 50000 |
| Total | 4637100 |
B. Working Capital (per month)
(i) Personnel
Category |
No. |
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)
Description |
Qty. |
Unit |
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 | |
| 24000000 | |
| = 7.53% |
Rate of Return
| Profit × 100 | |
| Total Investment | |
| 1806293 × 100 | |
| 7266390 | |
| = 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,
Delhi–100041 - 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),
Mumbai–400008 - 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),
Mumbai–400069 - 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),
Mumbai–400093 - M/s. Kirloskar Copeland Limited
Shree Meenakshi Nilayam,
30, Arcot Mudali Street,
T. Nagar,
Chennai–600017
For further information please contact
Information Manager
TIMEIS Project
E-mail: timeis@ficci.com
