Entrepreneurship Development Institute of India

PRODUCT PROJECT REPORTON

W H E E L C A P S

PREPARED BY Enrolment No.: - 091010067E

Name: - HIREN P MEHTA

Address: - “MAA”

36, Divya Siddhi Park

Airport Road

RAJKOT 360 005.

Tele No : - 0281 – 2471683

EVALUATED BY Name: - SHRI MAYANK UPADHYAY

Address: - YUVAK VIKAS TRUST

OPP. NAVJIVAN PRESS

OFF ASHRAM ROAD

AHMEDABAD, GUJARAT

Tele No : - 079 -27540482

DECLARATION

I undersigned Nainesh M. Mashrani, a student of TYBBA hereby declare that the project work presented in this report is my own work and has been carried out under the supervision of Dr. Swati Doshi of Christ College, Rajkot.

This work has not been previously submitted to any other industries or university for examination.

Date:-

Place: - Rajkot

(Nainesh Mashrani)

PREFACE

The course of B.B.A. is designed in a special way through which young entrepreneurs are generated. In the third year of this course, the subject “entrepreneurship and Management of Small Scale Business” is included with a view to creating and developing good entrepreneur skills and attitudes among students in a practical and professional way.

Today in the growth rate of the Indian economy, contribution of small scale industry is highly important. The S.S.I. plays a vital role by contributing 40% to the total national income. Therefore it is management and working of SSI as a student of management.

As such, I have great pleasure in the presentation of the report on “Wheel Caps” which is the practical study in TYBBA of Saurashtra University.

The report prepared is completely imaginary with fictitious information and imaginary figures to acquire practical knowledge.

ACKNOWLEDGEMENT

In accomplishing any task a person is aided by many people who through their little or more contribution help in his/her success.

I take this opportunity to express my sincere thanks to all those who have helped me in the preparation of this report.

Also I would thank my parents and friends and Dr. Swati Doshi for constant support and encouragement due to which the work is accomplished.

Date :–

Place :–

(Nainesh Mashrani)

INDEX Sr. No. Particulars Page No.

1 Introduction

2 Project at Glance

3 Promoter Background

4 Organizational Structure

5 Justification of Location

6 Product Details

7 Market Potential

8 Raw Materials

9 Machines

10 Manufacturing Process

11 Production Capacity Schedule

12 Staff and Labour Details

13 Financial Details

Total Fixed Asset

Cost of Production

14 Total Working Capital Requirement

15 Total Capital Investment

16 Source of Finance

17 Interest of Capital

18 Depreciation

19 Annual Cost of Production

20 Break Even Analysis

21 Cost of Capital

22 Return on Investment

23 Profitability Analysis

24 Projected Operating Statement

25 Projected Cost Sheet

26 Projected Balance Sheet

27 Projected Profit & loss Account

28 Projected Balance Sheet

29 Risk Factors

30 Name & Address of Raw Material Suppliers

31 Name & Address of Machineries Suppliers

32 Disclosure of Significant Accounting Policy

33 Conclusion

I N T R O D U C T I O N

Small scale industry is the pillar of Indian economy. Most of the business carried out in India is from small scale units. Small scale units provide raw materials to large scale units. The number of small scale units, the volume and range of products manufactured, the employment provision and value of exports by these industries have grown substantially during the last few decades.

In this fast moving world vehicles play a vital role in itself. Without the help of vehicles, no matter whether private or transport vehicles a task could not be completed independently. As per the current market trend everyone likes changes and not rigidity. Many a time we get bored by seeing same things again and again. Wheels are the main part of the car and are used the most than any other part in the car. It is not possible every time to change the whole wheel to change its show, so here I came with a solution by manufacturing the wheel caps, the whole view of your wheels gets changed just by changing its caps.

P R O J E C T A T G L A N C E

Name of Unit - Torque Wheel caps Pvt. Ltd.

Registered Office - Aji G.I.D.C. Industrial Area, Plot No. B/3/97 - Rajkot Gujarat – India.

Factory Location - Aji G.I.D.C. Industrial Area, Plot No. B/3/97 - Rajkot Gujarat – India.

Form of Organization - Sole Proprietorship

Name of Promoter - Nainesh M. Mashrani

Name of Product - Wheel Caps

Size of Unit - Small Scale Industries

S.S.I. Registration No. - Applied For

Mean of Finance - Owners Capital 50% Rs. lakhs Borrowed Capital 50% Rs. lakhs

Cost of Project - Rs. 1, 50, 00, 000

P R O M O T E R B A C K G R O U N D

Name - Nainesh M. Mashrani

Age - 21 years

Office Address - Torque Wheel caps Pvt. Ltd. Plot No. B/3/97, Aji G.I.D.C. Industrial Area Rajkot.

Qualification - B.B.A. [Marketing]

Role in Unit - Administration & Marketing

Financial Contribution - 50% of Total Capital

O R G A N I Z A T I O N A L S T R U C T R E

Chairman

Finance MarketingProduction

Supervisor Accountant Salesman

Skilled Worker Peon / Clerk Watchman

Semi Skilled Worker

Unskilled Worker

J U S T I F I C A T I O N O F L O C A T I O N

One of the most important issues that need to be taken into consideration before establishing a new unit is the location of the proposed project. We have to take into consideration many points. It involves cost which affect to the profitability of the business. Moreover there are other environmental condition and infrastructure facilities too.

This unit is to be located at Rajkot in Aji G.I.D.C. which is an industrial area. Here there are many benefits for setting up the unit.

Following are the advantages which justify the location of Aji area –

Easy availability of the raw materials

Nearness to target market

Availability of good infrastructure facilities

Easy availability of labour and at cheaper rate

P R O D U C T D E T A I L

A product is anything that can be offered to market for satisfying the consumers needs and wants. This product is mainly used in the replacement market and rarely used for the OE [Original Equipment] customers.

Product Features:

There are many features of wheel caps and they are as follows:

Wheel caps are of many different designs, shapes and sizes. So the customers have wide choice for selection.

Wheel caps can be fit in all the four or more wheel vehicles, no matter whether small cars or large trailers.

One gets 100% consumption from this product as there is no wastage of product.

Price of the product is economical as compared to other competitors so even the small class people can afford to buy it.

USES:

Wheel caps are used to cover the rims of the tyres. It is available in many different sizes, colours, shapes, designs, etc.

BRAND NAME:

Brand represents the company in the mind of the customers. Brand also plays an important role in marketing. Good brand creates goodwill of the firm in the market. Once the brand occupies its space in the market, company would have to face less competition in this competitive market.

Company ‘ s LOGO:

M A R K E T P O T E N T I A L

Market oriented thinking is necessary in today’s competitive world. Now a day’s most of the companies are competing to enlarge their share in the existing market. As a result there are winners and losers. The Losers are those who bring nothing special in the market and the winners are those who carefully analyze the market need, identify opportunities and create value added offer for target customers group that matches the needs.

Now a day the main aim of business is creation of customers as marketing is more important than production. Customer oriented marketing is a theme of modern marketing management. Today to stand in the competition and capture more market, to attract the customer by providing effective and attractive sales, promotional schemes and advertising is done and the most important is by providing qualitative goods with innovation.

There is a vast market available for wheel caps and considering the population of our country, there is a great scope for growth of this industry. It has also enormous demand as these wheel caps help in improving the looks of the vehicles. We too know now a day the accessories market is flourishing day by day and touching the heights which were never touched before. This itself shows there is unlimited demand for these kinds of products. Here the thing matters is not “How would you sell?” but “How much can you manufacture?”

R A W M A T E R I A L S

T h e m a i n r a w m a t e r i a l u s e d f o r m a n u f a c t u r i n g w h e e l c a p s i s H I P G r a d e P l a s t i c G r a n e a u l s . P l a s t i c a r e a v a i l a b l e o f m a n y d i f f e r e n t g r a d e s , b u t f o r h i g h e r d u r a b i l i t y i t i s p r e f e r r e d t o u s e H I P G r a d e p l a s t i c w h i c h i s s u i t a b l e f o r w h e e l c a p s . T h e r e a r e m a n y c o m p a n i e s i n I n d i a w h i c h m a n u f a c t u r e s t h i s g r a d e o f p l a s t i c . F o r m a n u f a c t u r i n g w h e e l c a p s e x a c t p l a s t i c s h e e t s a r e n o t u s e d b u t i n s t e a d p l a s t i c g r e n e a u l s a r e u s e d .

M A C H I N E S

Machines play a very important role in any manufacturing unit. Machines make the work easy, simpler, accurate and qualitative. The same standard of quality can be achieved in the product through the use of machines.

Machines give lot of work if not handled properly. Basically machines require regular and proper maintenance and at time servicing is also required. If this is done then machines will last for a longer durations.

Machines make the work of the workers easier and even with the help of the machines we get faster work done. The unit to be set up need the following machines for producing the wheel caps –

1) Cooling tower :- This machine helps to cool down the hot plastic wheel plate after grinding.

2) Injection moulding [horizontal] :- This machine moulds or in other words gives the hot plastic its desired shape based on the die used. This machine pushes the plastic from left and leaves the plastic to dense itself on the right hand side in the die.

3) Injection moulding [vertical] :- The only difference between the working of horizontal and vertical moulding machine is that one works on horizontal way and the other on vertical basis. Rest all the functions remains the same.

4) Injection moulding [manual] :- Manual moulding machine is operated fully by the labors whereas horizontal and vertical moulding machines are fully automatic.

5) Grinding machine :-

This machine gives the wheel caps its proper shape after moulding is done. As caps are automobile component, its all dimensions are of great importance to be checked.

6) Mixer drum :- Mixer drum heats and melts the plastic greneaules to turn them to liquid state. This liquid form of plastic is then further used to make wheel caps.

7) Sticker machine :- Sticker machine is used at the time of packing. Sticker here does not only refer to MRP sticker but also the batch no., serial no., etc.

8) Stamping machine :- Stamping machine refers to the machine which marks the brand name and the company name on the caps as they are manufactured.

9) Stripping:- Stripping machine refers to that machine which at last stripes the corrugated cartons on the basis of orders and dispatches.

M A N U F A C T U R I N G P R O C E S S

Raw material comes in the form of greneauls having round and rectangular shape and transparent or opaque color. Readily colored materials are also available.

Than put that ready colored greneauls in the hopper of the moulding machine. Than with the help of “screw barrel” [the gap between barrel and screw thread consist of the material], this material than passes, pushed by the machine pressure and heaters. Heaters are connected from outside of screw barrel into the mould of the article.

The mould is of two parts, “punch & cavity” [the gap between these two forms the article] both these parts are connected with the continous supply of chilled water from outer side which help mould to keep cool and give shape to the article from the hot material injected.

Water supply is cycled by, “cooling tower” which

absorbs the heat of the water and supplies the cold water. The scrap of the moulding is recycled and used again.

After the product is out of the machine, finishing work is done via small blade and than it is sent to the packing department.

P R O D U C T I O N C A P A C I T Y S C H E D U L E

S T A F F A N D L A B O U R D E T A I L S

Installed Capacity 1604285 pieces p.a.

Number of working days in a month

25 days

Number of shifts per day 1

Number of hours per shift 8 hours

Production capacity 70%1123000 pieces

p.a.

Mgt. representative General managerProduction managerPurchase managerPersonnel managerFinance managerMarketing managerTechnical supervisorSales manager Accountant Salesman PeonWatchman

1111111114421

Skilled workerSemi skilled worker Unskilled worker

885

FINANCIAL DETAILS

TOTAL FIXED ASSET

LAND

BUILDING

Particular Sq. feet Rate (Rs.) Total Cost

Land 8000 500 40,00,000

Particular Sq. feet Rate (Rs.) Total Cost

Building 6750 300 20,25,000

PLANT & MACHINERY

Name Qty. Rate (Rs.) Total Cost

Cooling tower 1 90,000 90,000

Grinding Machine 2 40,000 80,000

Injection moulding horizontal

2 5,00,000 10,00,000

Injection moulding vertical

2 2,50,000 5,00,000

Manual moulding 1 2,00,000 2,00,000

Mixer drum 2 15,000 30,000

Stripping machine 1 40,000 40,000

Sticker and stamping Machine

1 1,00,000 1,00,000

Dial gauge 1 40,000 40,000

Die measuring instrument

1 50,000 50,000

FURNITURE & FIXTURES

Particulars Rate AmountFactory furniture 3,00,000 3,00,000Office furniture 3,00,000 3,00,000

OTHER ASSETS

Particular Qty. Rate (Rs.) Total Cost

Electrification Installation Charges

- 600,000 600,000

Computers 4 30,000 1,20,000

Telephone 4 3,000 12,000

Fire equipment - 1,00,000 1,00,000

Production dies 5 1,00,000 5,00,000

Trolley & other Handling Equipments

- 3,30,000 3,30,000

Pre-operative expenses - 5,00,000 5,00,000

TOTAL 21,62,000

TOTAL FIXED ASSETS

No. Particulars Amount 1. Land 40,00,000

2. Building 20,25,000

3. Plant & Machinery 21,30,000

4. Furniture & Fixture 6,00,000

5. Electrification & Installation Charges 6,00,000

6. Computers, Telephones & Trolley 4,62,000

7. Fire equipment & Production dies 6,00,000

8. Pre-operative expenses 5,00,000

Total fixed assets 1,09,17,000

RAW MATERIALS

Particular Rate (Rs.)

Per Day Per YearQty. Amt. Qty. Amt.

Greneauls

Total

72 per kg.

1921.3 1,38,334 576293 4,14,93,108

1,38,334 4,14,93,108

Working capital

STAFF & LABOUR

Particulars No. of person

Salary Per Month

Per Year

Manager 1 7,000 7,000 84,000General manager 1 10,000 10,000 1,20,000Production manager 1 6,300 6,300 75,600Purchase manager 1 6,300 6,300 75,600Personnel manager 1 6,300 6,300 75,600Financial manager 1 6,300 6,300 75,600Technical supervisor

1 6,300 6,300 75,600

Marketing manager 1 6,300 6,300 75,600Sales manager 1 5,800 5,800 69,600Accountant 4 5,500 22,000 2,64,000Skilled Worker 8 4,000 32,000 3,84,000Semi Skilled Worker

8 3,000 24,000 2,88,000

Unskilled Worker 5 2,000 10,000 1,20,000Salesman 4 4,000 16,000 1,92,000Peon 2 2,300 4,600 55,200Watchman 1 1,700 1,700 20,400

Total 1,70,900 20,50,800

OTHER EXPENSES &UTILITIES

Sr. No.

Particulars Amount

1. Machinery parts & Repairs 1,30,000

2. Postage & Telegram 20,400

3. Telephone Expenses 1,20,000

4. Transportation 1,50,000

5. Miscellaneous Expenses 24,000

6. Advertisement 3,00,000

7. Insurance 1,20,000

8. Medical Expenses 60,000

9. Freight inward 1,20,000

10. Legal Expenses 60,000

11. Audit Fees 60,000

12. Traveling Expenses 2,40,000

13. Electricity expenses[3 Phase] 13,00,000

14. Fuel 2,97,000

15. Water 1,50,000

16. Electricity expenses[office] 1,38,000

17. Packing expenses 16,83,000

18. Other selling expenses 2,40,000

19. Internet expenses 12,000

20. Stationery expenses 25,000

21. Conveyance expenses 68,000

Total 53,17,400

T O T A L W O R K I N G C A P I T A L R E Q U I R E M E N T

Sr. No. Particular Amount 1. Raw Material 4,14,93,108

2. Staff & Labour 20,50,800

4. Other Expenses 53,17,400

Total 4,88,61,308

T O T A L C A P I T A L I N V E S T M E N T

Sr. No. Particular Amount1. Fixed Cost 1,09,17,000

2. Working Capital (1 month) 40,71,775

3. Cash in Hand 11,225

Total 1,50,00,000

S O U R C E S O F F I N A N C E

Sr. No. Particular Amount 1. Owners Capital (50%) 75,00,000

2. Borrowed Capital (50%) 75,00,000

Total 1,50,00,000

I N T E R E S T O N C A P I T A L

Particular Loan Amount

Interest Rate

Interest Amount

Owner Capital 75,00,000 8% 6,00,000

Borrowed Capital 75,00,000 12% 9,00,000

Total 1,50,00,000 15,00,000

D E P R E C I A T I O N

Particular Value Rate of Depreciation

Depreciation

Building 20,25,000 10% 2,02,500

Machinery 20,40,000 15% 3,06,000

Furniture & fixtures 6,00,000 10% 60,000

Measuring instrument & gauge

90,000 15% 13,500

Other Fixed Asset 15,42,000 15% 2,31,300Computers 1,20,000 60% 72,000

Electrification 6,00,000 10% 60,000

Telephone 12,000 10% 1,200

Trolley & other equipments

8,30,000 10% 83,000

Total 10,29,500

A N N U A L C O S T O F P R O D U C T I O N

Sr. No. Particular Amount 1. Raw Material 4,14,93,1082. Salaries 20,50,8003. Other Expenses & utilities 53,17,4004. Interest on Capital 15,00,0005. Depreciation 10,29,500

Total 5,13,90,808

FIXED COST

Sr. No. Particular Amount 1. Depreciation 10,29,500

2. Interest on Capital 15,00,000

3. Salary (50%) 10,25,400

4. Other Expenses (30%) 15,95,220

Total 51,50,120

Fixed Cost per unit = Total Fixed Cost No. of Units

= 51, 50,120 11, 23,000

= Rs. 4.58

VARIABLE COST

Sr. No. Particular Amount 1. Raw Material 4,14,93,108

2. Salary (50%) 10,25,400

3. Other Expenses (70%) 37,22,180

Total 4,62,40,688

Variable Cost per unit = Total Variable Cost No. of Units

= 4,62,40,688 11,23,000

= Rs. 41.17

TOTAL COST PER UNIT

= Fixed cost per unit + variable cost per unit

= 4.58 + 41.17

= 45.75

B R E A K E V E N A N A L Y S I S

Break-even point is that point of achieving, where total revenue and total expenses are equal. It is that point of zero profit. If sales exceed BEP,

the business will earn profit and if it decreases from BEP, the business will incur loss. Thus, BEP may take, as the minimum level of production and sales and company must attain in order to be economically viable.

Contribution/unit = Selling price/unit – Variable cost/unit

= Rs. 49 – Rs. 41.17

= Rs. 7.83

BEP ( in % ) = [Fixed Cost ÷ {Fixed Cost + Profit}] × Capacity Utilization

= [51,50,120 ÷ {51, 50, 120 + 30,71,983}] × 70

= [51,50,120 ÷82,22,103] × 70

= 43.8%

BEP (units) = Fixed Cost ÷ Contribution per unit

= 51, 50, 120 ÷ 7.83

= 6,57,742 units

BEP (Rs.) = BEP (units) × Selling price p. u.

= 6,57,742 × 49

= Rs. 3,22,29,359

LOAN REPAYMENT SCHEDULE

Sr. No.

Opening Balance

Installment Closing Balance

Interest

1. 75,00,000 7,50,000 67,50,000 9,00,0002. 67,50,000 7,50,000 60,00,000 8,10,0003. 60,00,000 7,50,000 52,50,000 7,20,0004. 52,50,000 7,50,000 45,00,000 6,30,0005. 45,00,000 7,50,000 37,50,000 5,40,0006. 37,50,000 7,50,000 30,00,000 4,50,0007. 30,00,000 7,50,000 22,50,000 3,60,0008. 22,50,000 7,50,000 15,00,000 2,70,0009. 15,00,000 7,50,000 7,50,000 1,80,00010. 7,50,000 7,50,000 - 90,000

A V E R A G E C O S T O F C A P I T A L

Particular Capital Rate Interest

Owned Capital 75,00,000 8% 6,00,000

Borrowed Capital 75,00,000 12% 9,00,000

Total 15,00,000

Avg. Cost of Capital = R.O.I. own capital + R.O.I of borrowed capital 2

= 8% + 12%

2

= 10%

R E T U R N O N I N V E S T M E N T

R.O.I. = [EAT ÷Total Capital Invested] × 100

= [30,71,983÷1,50,00,000] × 100

= 20.48 %

P R O F I T A B I L I T Y A N D P R O F I T A B I L I T Y A N A L Y S I S

Particulars Amount Sales 5,43,90,000Less : Cost of Production 4,88,59,335

EBIT 55,30,665Less : Interest 9,00,000

EBT 46,30,665Less : Tax 15 58 682

EAT 30,71,983

Gross Profit Ratio : GPR = Gross Profit ÷ Sales × 100 = 1,00,82,865 ÷ 5, 43, 90, 000 × 100 = 18.5 %

Net Profit Ratio : NPR = Net Profit (EAT) ÷ Sales × 100 = 30,71,983 ÷ 5, 43, 90, 000 × 100 = 5.60%

P R O J E C T E D C O S T S H E E T

Particular Year 1 Year 2 Year 3

Raw Material Consumed Purchases Add: Direct Wages Utilities

4,14,93,1087,92,000

14,50,000

4,14,93,1087,92,000

14,50,000

4,14,93,1087,92,000

14,50,000

PRIME COST (A) 4,37,35,108 4,37,35,108 4,37,35,108

Add: Repairs Manager’s Salary Supervisor’s Salary Watchman’s Wage Fuel Dep. on Machine Dep. on Building

1,30,00084,00075,60020,400

2,97,0003,06,0002,02,500

1,30,00084,00075,60020,400

2,97,0002,60,1001,82,250

1,30,00084,00075,60020,400

2,97,0002,21,0851,64,025

TOTAL FACTORY OVERHEAD (B)

11,15,500 10,49,350 9,92,110

Administrative OverheadsAdd: General Mag. Salary

Personnel Mag. SalaryAccountant Salary

Finance Mag. Salary Clerk’s Salary Post & Tele. Exp. Telephone Exp. Misc. Exp. Insurance Exp. Medical Exp. Legal Exp. Audit Fees Dep. on Computer Dep. on other F. A. Int. on Own Capital

1,20,00075,600

2,64,0007560055,20020,400

1,20,00024,000

1,20,00060,00060,00060,00072,000

4,35,5006,00,000

1,20,00075,600

2,64,00075,60055,20020,400

1,20,00024,000

1,20,00060,00060,00060,00028,800

3,80,3856,00,000

1,20,00075,600

2,64,00075,60055,20020,400

1,20,00024,000

1,20,00060,00060,00060,00011,520

3,32,5166,00,000

TOTAL ADMINISTRATIVE

OVERHEAD (C)22,34,300 21,35,985 20,70,836

COST OF PRODUCTION

(A+B+C)4,70,84,908 4,69,20,443 4,67,98,054

Add: Op. Stock of Finished goods Less: Cl. Stock of Finished goods

-

5,45,060

5,45,060

10,86,315

10,86,315

1,47,520COST OF

PRODUCTION OF GOODS SOLD

4,65,39,848 4,63,79,188 4,77,36,849

Selling & Distribution Overhead

Add: Salesman SalaryMarketing Mag. SalaryPurchase Mag. Salary

Sales Mag. Salary Transportation Exp. Advertising Exp. Traveling Exp.

Packing Exp.Conveyance Exp.

1,92,00075,60075,60069,600

3,00,0003,00,0002,40,000

16,83,00068,000

1,92,00075,60075,60069,600

3,00,0003,00,0002,40,000

16,83,00068,000

1,92,00075,60075,60069,600

3,00,0003,00,0002,40,000

16,83,00068,000

COST OF SALES 4,95,43,648 4,93,82,988 5,07,40,649

SALES 5,43,90,000 5,43,90,000 5,61,27,540

PROFIT (Sales–COS) 48,46,352 50,07,012 53,86,891

Operating Statement

PARTICULARARS YEAR 1 YEAR 2 YEAR 3

A. SALES [A] 5,43,90,000 5,43,90,000 5,61,27,540

B. Direct expense 4,48,52,195 4,48,52,195 4,48,52,195COST OF OPERATION

4,48,52,195 4,48,52,195 4,48,52,195

Add: Opening stock - 5,45,060 10,86,315Less: closing stock 5,45,060 10,86,315 1,47,047B. TOTAL [B] 4,43,07,135 4,43,10,940 4,57,91,463GROSS PROFIT[A-B] 1,00,82,865 1,00,79,060 1,03,36,077Less: Indirect expense 45,52,200 43,74,235 36,54,146

EBIT 55,30,665 57,04,825 66,81,931Less: Interest 9,00,000 8,10,000 7,20,000

EBT 46,30,665 48,94,825 59,61,931Less: Tax @ 33.66 % 15 58 682 16,47,598 20,06,786

EAT 30,71,983 32,47,227 39,55,145

PROJECTED TRADING AND PROFIT & LOSS ACCOUNT

PARTICULARS 1 5t year 2nd year 3 rd yearSales 5,43,90,000 5,43,90,000 5,61,27,540

NET SALES/INCOME 5,43,90,000 5,43,90,000 5,61,27,540- OPENING STOCK NIL 5,45,060 10,86,315+CLOSING STOCK 5,45,060 10,86,315 1,47,047

Total (A) 5,49,35,060 5,49,31,2555,51,88,272Manufacturing ExpensesRaw materials 4,14,93,108 4,14,93,108 4,14,93,108Labor 7,92,000 7,92,000 7,92,000Utilities 13,00,000 13,00,000 13,00,000Factory expenses 6,76,587 6,76,587 6,76,587Maintenance & Repairs 23,500 23,500 23,500Fuel 2,97,000 2,97,000 2,97,000Water 1,50,000 1,50,000 1,50,000Freight inward 1,20,000 1,20,000 1,20,000TOTAL MANU. EXP. (B) 4,48,52,195 4,48,52,195 4,48,52,195

GROSS PROFIT (A-B) (C) 1,00,82,865 1,00,79,060 1,03,36,077Adm. & Selling ExpensesStamp & Postage duty 20,400 20,400 13,000Telephone 1,20,000 1,20,000 1,20,000Interest on Borrowed Capital 9,00,000 8,10,000 7,20,000Traveling expenses 2,40,000 2,40,000 25,000Advg. & Mktg. 3,00,000 3,00,000 5,25,000Misc. expenses 24,000 24,000 24,000Selling expenses 2,40,000 2,40,000 3,00,000Packing expenses 1,92,000 1,92,000 2,70,000Medical expenses 60,000 60,000 75,000Salaries 12,58,800 12,58,800 5,50,000Depreciation 10,29,500 8,51,535 7,29,146Maintenance & Repairs 1,06,500 1,06,500 20,000Electricity 1,38,000 1,38,000 1,38,000Other selling expense 2,40,000 2,40,000 2,40,000Internet expense 12,000 12,000 12,000Stationery & printing 25,000 25,000 25,000Conveyance expense 68,000 68,000 68,000Audit fees 60,000 60,000 60,000Legal expense 60,000 60,000 60,000Transportation 3,00,000 3,00,000 3,00,000Tax @ 33.66 % 15 58 682 16,47,598 20,06,786

W/o pre-operative expo 1,00,000 1,42,000 1,00,000

Insurance 48,000 48,000 48,000

Interest 9,00,000 8,10,000 7,20,000

NET PROFIT(C-D) 30,71,983 32,47,227 39,55,145

P R O J E C T E D B A L A N C E S H E E T

Liabilities Year 1 Year 2 Year 3CAPITAL

Owned Capital

SECURED LOAN

Bank Loan

CREDITORS

NET PROFIT

75,00,000

67,50,000

12,55,630

30,71,983

75,00,000

60,00,000

14,32,940

32,47,227

75,00,000

52,50,000

17,54,667

39,55,1451,85,77,613 1,81,80,167 1,84,59,812

Asset Year 1 Year 2 Year 3Land BuildingMachinery Furniture & FixtureElectric InstallationTelephoneComputer

Trolley & other equipments

DEBTORS

Cash in Hand Closing Stock

40,00,00018,22,50015,30,000

5,40,000

5,40,00010,80048,000

7,47,000

88,43,028

11,2255,45,060

40,00,00016,40,25013,00,500

4,86,000

4,86,0009,720

19,200

6,72,300

90,39,812

1,12,37010,86,315

40,00,00014,76,22511,05,425

4,37,400

4,37,4008,7487,680

6,05,070

93,70,380

8,64,4371,47,047

1,85,77,613 1,81,80,167 1,84,59,812

R I S K F A C T O R

Every new business needs to determine its risk factors that the business will face. If risk factors are carefully determined then the entrepreneur can take better measures to see that they have limited effect on the business following are some of the risks that the new business will face:-

The unit will operate in highly competitive market where already other wheel caps manufacturing units have gained important position.

The risk of failure of the position..It may take time to beat the competitor’s product.

Due to heavy advertising, it might prove to be expensive and might not give desired results.Initially, the production would be low but cost of production may be higher.The business would take a longer period to reach breakeven point.Initially, the required amount of sales will not be achievable and will result in loss.

Non-acceptance from the customer’s side.

N a m e & a d d r e s s o f r a w m a t e r i a l s u p p l i e r

J . K I n d u s t r i e s P v t . L t d .W e s t e r n h i g h w a y , G . I . D . CP u n e .

N A M E & A D D R E S S O F M A C H I N E R Y S U P P L I E R

M/S RIAT MACHINE TOOLS P.L. G.T. Road, Miller Gunj, Ludhiana – 141 003.

M/S SK MACHINES TOOLS National highway G.I.D.C

Gondal (Guj) India.

M/S J.K. MACHINE TOOLS Gokuldham Main Road, Rajkot.

M/S TURN-O-TECH ENGINEERS C/1/276, G.I.D.C., Phase II, Road – R, Baroda.

M/S RAVI Industries Udhyognagar, G.I.D.C., Delhi.

D I S C L O S U R E O F S I G N I F I C A N T A C C O U N T I N G P O L I C I E S

The accounting policies used in this report is Double Entry System and all the effect of income and expenditure is given according to Double Entry System.

The Depreciation is being calculated according to Reducing Balance Method. In this method, the depreciation changes according to the value of the asset remain in the last year. The asset is totally written off slowly and gradually.

C O N C L U S I O N

In the product project report on Torque Industries, I have discussed all financial data and other relevant information.

The market of Osim Industries is expanding its demand for the product day by day. The return in this business is also satisfactory.

At last, it can be said that, the future of this product is very bright.

With the expectation of high profitability and good market, it is assumed that it would be the perfect product to be manufactured in today’s environment.