A PRODUCT PROJECT REPORT

ON

PREPARED BY :- VICKY.J.VASANI

CLASS :- T.Y.B.B.A.

ACADEMIC YEAR :- 2005-2006

COLLEGE :- CHRIST COLLEGE

ROLL NO :- 42

SEAT NO :-

SUBMITTED TO

SAURASHTRA UNIVERSITY

GUIDED BY

DR.SWATI DOSHI

1
DECLARATION

I, undersigned Mr. Vicky Vasani , a student of

T.Y.B.B.A. here by declare that the project work presented in
the report is my own work & has been carried out under the
supervision & guidance of Prof. Swati Doshi of Christ College
Rajkot

The work has not been previously submitted to any

other university or institution for any examination

Date :-

Place:- Rajkot

Sigunature

(Vicky .j. Vasani)

2
Preface

Being a student of T.Y.B.B.A., I am extremely happy

to submit this project report on small scale Industry. Under
the prescribed syllabus of Saurashtra University for
particularly introducing a subject
Enterpreneaurship.Enterprenearship is management of SSI
with a view to create & develop such skills & attitude among
the student in practical & professional education faculty.

The goal or object of this project report is to make

students learn about various factors that should be kept in
mind before setting up an industry . In other words, it is
purely enterpreneaureship development & training for
establishment of SSI.

The contribution of SSI is 45% in the economic

growth of the country so, it becomes essential to study the
management & working of SSIs as a student of management .

3
ACKNOWLEDGEMENT

It is really a matter of great pleasure for me to

undertake & present this creative & practical work , a product
project report of T.Y.B.B.A. on PETROL SAVER.

This report has been prepared by keeping in mind

various aspects relating to financial capacity of the plant
which is to be established , the fast growth & development in
the fields of petrol industry .

I grab the opportunity to express my sincere thanks

to Prof . swati joshi who has guided me in preparing this
report . I would also like to express my gratitude to SSI & all
those who have assisted me in the preparation of project.
Date :-

Place :- Rajkot

Signature

4
(Vicky.j.Vasani)

INDEX

SR. NO PARTICULARS PAGE.N

O
1 Introduction

2 Project at Glance

3 Organizational Structure

4 Justification of Location

5 Product Details

6 Market Potential

7 Raw Materials

8 Machines

9 Manufacturing Process

10 Production Capacity Schedule

11 Staff and Labour Details

12 Financial Details

5
13 Cost of Production

14 Total Working Capital Requirement

15 Total Project Fund

16 Sources of Finance

17 Interest on Borrowed Capital

18 Depreciation

19 Annual Cost of Production

20 Sales Forecast

21 Break Even Analysis

22 Cost of Capital

23 Return on Investment

24 Profitability Analysis

25 Projected Operating Statement

26 Projected Cost Sheet

27 Projected Balance Sheet

6
28 Particulars of Raw Material
Consumed

29 Particulars of Finished Goods

30 Schedule for Fixed Assets

31 Schedule for Factory Overhead

32 Schedule for Selling and

Administrative Overhead
33 Risk Factors

34 Name and Address of Raw Material

Suppliers
35 Name and Address of Machineries
Supplier
36 Disclosure of Significant Accounting
Policy
INTRODUCTION

The industrial structure of India can be classified

into three main groups ; they are capital goods, consumere
goods & small scale sectors . the small scale industries can
further be subdivided into village or cottage industries &
modern small scale industry . The village / cotton industries
produce traditional commodities like handloom clothes &
other necessary products ,etc. The modern small scale

7
industries on the other hand produce non-trditional
commodities like machine tools, radio sets, automobiles
parts , components , etc.

According to the industrial policy paper of 1956, SSI

ensure more equitable distribution of national income & they
facilities an effective mobilization of resources, capital & skills.
Some of the problems that unplanned urbanization tends to
create will be avoided by the establishment of small centers of
industrial production all over the country

To over come such problems , we now a days find

some firms co-existing with the large firms in the business
world.

PROJECT AT A GLANCE

Name of unit :- vishal petrol saver

Product :- petrol saver

Address of communication :- Radhe Kishana

150ft ring road,

8
Rajkot-05

Gujrat (India)

Forms of Organisation :- Private sector

Locaton of the unit :- GIDC industrial

area Shaper -
veraval
industrial area ,
Rajkot

Owner name :- VICKY.J.VASANI

Cost of Project :- 70,00,000

ORGANISATION STRUCTURE

General Manager

Production R&D Accounts & Personnel

& Mrkt
Manager manager Finance Admin.
Manager
Manager Manager

9
Dispatch R&D Accounts & Personnel &
Mrkt
Officer Officer Finance Admin.
Officer
Officer Officer

Procurement R&D Chief Seniour

Mrkt
Prod. Mger Executive Accountant Officer
Executive

Peon Peon Asst. Clerk

Peon
Accountant

Peon Peon

JUSTIFICATON OF LOCATION

Location is the prime factor which has to be

considered for starting a new business. The location should be

10
decided by considering all factors & making independent
analysis of each variable separately through cost benefit
analysis & the location should either be near to the market
(i.e. customer) or where the raw material is easily available &
in the adequate quantity.

1). Raw Material :-

The major component or major input which is an

inevitable part of any product process is , raw material. Raw
Material at proper time, at a reasonable cost , in right quality
directly affects the price of the final product.

In case of this industry , the basic Raw material is

choronated hydrocarbon components , lubricating oil & also
ferrous, calcium , aluminium & magnesium which are
available from the surrounding areas of the state.

2). Labour :-

11
Man power input i.e. labour holds importance after
the raw material . cheaper & effective labour availability
enriches the firm & thus , it is very crucial in nature.

In this case ,technically skilled & unskilled labour is

required which is easily available from the nearby areas.

3). Water :-

The purposed product does not highly depend upon

water supply but still there is requirement of water at some or
the other extent & that is easily available from our own
sources & water supply by municipal corporation.
4). Market :-

The main aim of every product is to get potential

market & proximity to market is also one of the most
considerable variables . Due consideration to the variables will
add to the prosperity of the firm & ultimately will help in
attaining consumer satisfaction.

12
The market for petrol saver is definitely going to
increase because of the peaking hights of the petrol , increased
day by day. It has got opportunities with in & abroad the
county.

5). Transportation :-

Speedy transport facilities are needed for the

regular & timely supply of raw material & finished goods. It
should be done keeping in mind the requirement & its nature .
This also includes controlling supply according to change in
demand .

As far as our product is concerned , we easily get

road transport & rail transport facility, & as far as export is
concerned, our state process kandla port which can be taken
into use if necessary.

6). Miscellaneous factors :-

13
We have selected our location after taking into
account the following factors :-

1) Availability of infrastructural facilities

2) Availability of banks or financial institution

3) Availability of bodies such as hospital dispensaries,

post offices, etc enjoyed by the community.

14
PRODUCT DETAILS

1). Product characteristics :-

The principle of preparation of this product is
to mix together the basic raw material to let them undergo the
chemical process . This would result into a dilute which could
also be conveted into dried form after passing it through the
dryer. This can be shaped into tablets or capsules also. This
dilute substance / tablets will have to be added to the petral
tank to any machinery where petrol is used as a fuel to get the
unexpected result of saving petrol to 18% & it also ensure
drastic reduction of exhaust & noise pollution above 60%. It
also cleans carburetter & make the engine performance more
effective. It is harmless to engine components & improves
pick-up .

2). Product Properties :- IT IS

- Non inflammable

- Harmless to skin

- Non poisonous

- Non explosive

15
- Does not mix in water

- Stain free

- Evaporates on temperature 63 degree

calcious -75 degree calcious

3).Product abstract material :-

This has been developed by bringing together,

non-inflammable & non-explosive liquids which are blended
with fossil fuel & mixed with appropriate quantity of catalysis
an essential ingredients of synprol process.

4). Product uses :-

This product is a complementary product

therefore its use depends upon petrol & so this can be used
wherever / in machinery / engine where petrol is utilized as
fuel .

16
5). Product benefits ;-
Saves petrol over 18%
Reduces exhaust & noise pollution

Improves pick-up

Frequency of recharging the electic battory &

voltage dripping will reduce considerably

Reduces wear & tare.

17
MARKET POTENTIAL

The business is becoming more & more competitive

everyday. We generally believe that the business segment in
which we will we operate offers us opportunity for growth. In
such competition , one has to endeavour their skills in quality
product gifting, brand equity & healthy distribution network
so, as to maintain a sustainable , stable & leading position in
the market. Now let us have a look over the figures of on road
vehicles which have maximum usage of petrol and that is the
potential market of this product.

Sr. Class of At the As on 31st

no vehicles end of oct 2005
march
2003 2004 2005 2005
1). Motor cycle 13,25,826 40,64,869 47,025,52 50,64,773
9
2). Auto 99,918 2,30,664 2,56,375 2,86,900
rickshaws
3). Jeep 33,700 84,117 90,263 1,08,227
4). Motor cars 3,41,584 5,38,549 6,41,950 9,52,959
5). Passenger 1,82,500 2,50,550 3,45,660 4,58,320
buses
6). Goods 1,19,461 3,30,911 5,52,625 6,75,150
vehicles

18
Taking a keep observation over the figures it can be
said that the vehicles so specified would demand much petrol
and if at once this product is offered to the market then it will
be able to save more petroleum which is becoming rather an
Exhaustive resource.

Bright prospects & promising future :-

Petrol being an exhaustive resource has

started giving intimation about its non-availability in future
since last decade. The petrol saver shall be used extensively so
as to use petrol at optimum level. Therefore there will be no
problem of selling this product because of its proposed
increasing demand. But in future there is a greater possibility
of the competitors to enter into this market. So we will have to
be more cautious & alert regarding the study of business
environment & market environment.

19
RAW MATERIAL DETAILS

The basic raw material of this product is

fossil fuel. They constitute choronated Hydrocarbon
components, lubricating oil, ferrous, calcium, aluminium &
magnesium. The above raw material is available form the
area stated below

Bharuch :- all chemicals

Surendranagar :- all chemicals

Kerala&lakshwadee :-calcium ,calcium

carbonate

Madhya Pradesh ,
Chhatisgarh, goa
Maharashtra,
Karnatak :- magnesium

20
MACHINARY REQUIREMENT

The manufacturing of this product requires the

following type of machinery

PARTICULARS NO . OF . UNITS
Equilization tank 1
Shield drier 2
Primary system 1
Filtration system 1
Boiler 1
Discharge sump 2
Solid waste storage pit with 1
imperious lining

MANUFACTURING PROCESS

21
The principle of this product mix together the basic raw
material to let them undergo the chemical process. This would
result into a dilute which could also be converted into dried
form after passing it through the dryer. This can be shaped
into tablets or capsules also. This dilute substance / tablets
will have to be added to the petrol tank to any machinery
where petrol is being used to get the unexpected result of
saving petrol to 18% & it also ensure drastic reduction of
exhaust & noise pollution above 60%. It also cleans the
carburetor & makes the engine performance more effective. It
is harmless to engine components & improve the pick-up.

It is non-flammable harmless to skin non poisonous &

non explosive. Thats why it can be easily used in petrol n due
to this it is easily mixed with petrol & covers the layer of the
engine to give you a better mileage & pick-up. But it should
never mix with water and it will be evaporates on temperature
63 degree Celsius 75 degree Celsius. This has been
developed by bringing together, non-inflammable & non-
explosive liquids which are blended with fossil fuel & mixed
with appropriate quantity of catalysts an essential ingredient
of synprol process.

PRODUCTION CAPACITYSCHEDULE

22
The production capacity of this establishment plant will
be 800 lts. Per day.

The schedule for production would be as follows.

There would be a single shift i.e

8:00am to 8:00pm
(including lunch break)

The whole production process would be carried out

simultaneously & the post production process will also be
speedily carried out.

23
STAFF & LABOUR DETAILS

Factory staff Skilled workers 3

Semi skilled
workers 5
Unskilled
workers
7

Administrative Manager 1
staff Supervisor 2
Clerk 1
Accountant 1
Salesman 1
Watchman 1

24
FINANCIAL DETAILS

LAND

SR.NO PARTICULAR SQ.FT PRICE PER TOTAL

SQ.FT
1. LAND 1500 600 9,00,000

BUILDING

SR.NO PARTICULAR SQ.FT PRICE PER TOTAL

SQ.FT
1. BUILDING 2500 300 7,50,000

TOTAL

TOTAL - 4000 900 16,50,000

PLANT & MACHINERY

25
SR PARTICULAR NO OF PRICE TOTAL
.N UNITS PER
O UNIT
1. EQUILISATION TANK 1 2,00,000 2,00,000
2. SHIELD DRIER 2 2,00,000 4,00,000
3. PRIMARY 1 1,50,000 1,50,000
CLARIFICATION
4. FILTERATION SYSTEM 1 1,60,000 1,60,000
5. BOILER 1 5,00,000 5,00,000
6. DISCHARGE SUMPS 2 3,00,000 6,00,000
7. SOLID WASTE STORAGE 1 2,68,000 2,68,000
PIT
TOTAL 22,78,000

OTHER FIXED ASSET

PARTIDCULAR NO OF QTY TOTAL
FURNITURE & FIXTURE - 8,72,000
COMPUTER 2 70,000
ELECTRIC FITTING - 1,20,000
TELEPHONE 2 10,000
TOTAL 10,72,000

TOTAL FIXED ASSETS

SR.NO PARTICULAR TOTAL

1. LAND & BUILDING 16,50,000
2. MACHINARY & EQUIPMENTS 22,78,000
3. OTHER FIXED ASSETS 10,72,000
TOTAL 50,00,000

COST OF PRODUCTION

26
RAW MATERIAL

SR.NO CHEMICALS RS PER QTY REQ AMOUNT

K.G
1. CALCIUM 120 12000 14,40,000
2. MAGNESIUM 150 18000 27,00,000
3. ALUMINIUM 10 15000 1,50,000
4. FERROUS 20 1800 36,000
TOTAL 42,00,000

STAFF & LABOUR SALARY

SR.NO PARTICULAR SALARY NO AMOUNT

1. MANAGER 1,20,000 1 1,20,000
2. ASS.GEN MANAGER 96,000 1 96,000
3. DEPT MANAGER 84,000 5 4,20,000
4. OFFICER (DEPT) 48,000 5 2,40,000
5. STORE KEEPER 24,000 2 48,000
6. PEON 14,400 2 28,800
7. SALES PEOPLE 30,000 4 1,20,000
TOTAL 10,72,800

UTILITIES

PARTICULAR PER YEAR

DIESEL 1,50,000

ELECTRICITY 3,50,000

TOTAL 5,00,000

27
OTHER EXPENSES

SR.NO PARTICULAR AMT

1. POSTAGE & STATIONARY 9,600
2. TRANSPORTATE EXPENSE 96,000
3. INSURANCE 48,000
4. REPAIRS & MAINTAINANCE 24,000
5. SALES EXPENSE 30,000
6. TELEPHONE & ADVERTISING EXPENSE 1,08,000
7. ELECTRICITY EXPENSE 1,20,000
8. WATER EXPENSE 48,000
9. UTILITIES 1,32,000
TOTAL 6,15,600

TOTAL WORKING CAPITAL

SR.NO PARTICULAR AMOUNT

1. Raw Material 42,00,000
2. Salary & wages 10,72,800
3. Utilities 1,32,000
4. Other expenses 4,83,600
Total 57,56,400

TOTAL CAPITAL INVESTMENT

28
SR.NO PARTICULARS AMT
1. TOTAL FIXED ASSETS 50,00,000
2. TOTAL WORKING CAPITAL REQ 14,39,100
3. CASH IN HAND 5,60,900
TOTAL 70,00,000

SOURES OF FINANCE

OWN CAPITAL

PARTICULAR %OF TOTAL CAPITAL AMT

VICKY.J.VASANI 50% 35,00,000

BORROWED CAPITAL

PARTICULAR %OF TOTAL CAPITAL AMT

ICICI BANK 50% 35,00,000

TOTAL CAPITAL INVESTED

PARTICULAR TOTAL AMT

TOTAL 70,00,000

29
INTEREST ON CAPITAL

SR. DETAILS LOAN AMT INTEREST INTERST

NO RATE AMOUNT
1 OWNER CAPITAL 35,00,000 8% 2,80,000
VICKY.J.VASANI
(50%)

2 BORROWED 35,00,000 12% 4,20,000

CAPITAL
ICICI BANK LTD
(50%)

TOTAL 70,00,000 7,00,000

DEPRECIATION

SR.NO PARTICULAR AMT

1. BUILDING @ 13% 97,500
2. MACHINERY & EQUIPMENTS @ 15% 3,71,700
3. OTHER FIX ASSETS @ 15% 1,50,300
4. COMPUTERS @ 40% 28000
TOTAL 6,47,500

30
ANNUAL COST OF PRODUCT

SR NO PARTICULAR TOTAL
1. RAW MATERIAL 42,00,000
2. DEPRECIATION 6,47,500
3. STAFF & LABOURS SALARY 10,72,800
4. OTHER EXPENSES & UTILITIES 6,15,600
5. INTEREST ON CAPITAL 7,00,000
TOTAL 72,35,900

SALES FORECAST

YEAR UNITS PER RATE PER SALES (RS)

ANNUM UNIT

1 8,67,305 20 1,73,46,100
2 9,25,125 20 1,85,02,500
3 9,25,125 25 2,31,28,125
4 10,40,766 25 2,60,19,150
5 11,56,407 30 3,46,92,216

31
FIXED COST
SR. PARTICULARS AMOUNT
NO.
1. Depreciation 6,47,500
2. Interest on Capital 7,00,000
3. Salary (50%) 5,36,400
4. Other exp & utilities 2,41,800
(30%)
TOTAL 21,25,700

FIXED COST :- TOTAL FIXED COST

TOTAL NO OF UNITS

21,25,700
8,67,305

TOTAL FIXED COST = 2.45 PER UNIT

32
VARIABLE COST

SR. PARTICULARS AMOUNT

NO.
1 Raw Material 42,00,000
2 Salaries (50%) 5,36,400
3 Other exp and 6,15,600
utilities
TOTAL 55,93,800

VARIABLE COST = TOTAL VARIABLE COST

TOTAL NO OF UNITS

55,93,800
8,67,305

VARIABLE COST = 6.45 PER UNIT

TOTAL COST = FIXED COST + VARIABLE COST

= 2.45 + 6.45

= 8.90 PER UNIT

33
BREAK EVEN ANALYSIS

Break-even point is that point of achieving, where total

revenue and total expenses are equal. It is the point of zero
profit. If the 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.

1) Contribution per unit = sales price variable cost

= 20-6.45

= 14.11 per unit

2) B.E.P (in units) = Total fixed cost

Contribution per unit

21,25,700
14.11

B.E.P.= 1,50,625 (bottles)

3) B.E.P (in Rs) = B.E.P(units) X sales price per unit

1,50,652 X 20

B.E.P.=30,13,040 Rs

34
4) B.E.P in (%) = Total fixed cost X capacity units
Total f.c + profit(EBIT)

21,25,700 X 75
21,25,700+11,55,000

15,94,27,500
32,80,700

B.E.P in (%) = 48.60%

LOAN REPAYMENT SCHEDULE

YEAR O/P BAL. INSTALLMENT CL. BAL. INTERST

1 35,00,000 3,50,000 31,50,000 4,20,000
2 31,50,000 3,50,000 28,00,000 3,78,000
3 28,00,000 3,50,000 24,50,000 3,36,000
4 24,50,000 3,50,000 21,00,000 2,94,000
5 21,00,000 3,50,000 17,50,000 2,52,000
6 17,50,000 3,50,000 14,00,000 2,10,000
7 14,00,000 3,50,000 10,50,000 1,68,000
8 10,50,000 3,50,000 7,00,000 1,26,000
9 7,00,000 3,50,000 3,50,000 84,000

35
10 3,50,000 3,50,000 ----- 42,000

AVERAGE COST OF CAPITAL

SR.NO PARTICULAR CAPITAL RATE INTEREST

1 Owned 35,00,000 8% 2,80,000
Capital
2 Borrowed 35,00,000 12% 4,20,000
Capital
Total 70,00,000 20% 7,00,000

Average Cost Of Capital = Interest X 100

Capital

= 7,00,000 X 100
70,00,000

Average cost of capital = 10 %

RETURN ON INVESTMENT

Return on investment = EBIT X 100

Cost of product

= 11,55,000 X100
70,00,000

36
Return on investment = 16.5%

PROFITABILITY AND PROFITABILITY

ANALYSIS

PARTICULAR AMOUNT
Sales 1,73,46,100
Less
Cost of 1,61,91,100
Production
EBIT 11,55,000
Less
Interest 7,00,000
EBT 4,55,000
Less
Tax 86,500
EAT 3,68,500

GROSS PROFIT RATIO

GPR = Gross Profit / Sales X 100

= 14,36,000 / 1,73,46,100 X 100

= 8.27%

NET PROFIT RATIO

NPR = Net Profit / Sales X 100

37
= 6,06,500 / 1,73,46,100 X 100

= 3.50%

FIXED ASSET TURNOVER RATIO

FATR= Total Fixed Asset / Sales X 100

= 15,00,000 / 1,73,46,100 X 100

= 8.64%

TAX SLAB

PATICULAR AMOUNT RATE AND TAX AMT

EBT 4,55,000
Less 1,00,000 NIL
3,55,000
Less 50,000 5000 @ 10%
3,05,000
Less 1,00,000 20,000 @ 20%
2,05,000 61500 @ 30 %
Total Taxable 86,500
Amt.

38
PROJECTED OPERATING STATEMENT
PARTICULAR YEAR 1 YEAR 2 YEAR 3
Sales 1,73,46,10 1,85,02,50 2,31,28,125
0 0
COST OF OPERATION
Raw material 42,00,000 60,00,000 90,28,000
Utilities
6,15,600 2,55,000 4,80,000
Labour 10,72,800 10,72,800 10,72,000
ADD:
Op. Stock of raw ----- ----- -----
material
LESS:
Cl. stock of raw ----- ----- -----
material
ADD:
Op. stock of finished -----
goods 27,00,000 27,00,000
LESS:
Cl. stock of finished
goods 27,00,000 27,00,000 27,00,000
TOTAL COO 2,14,82,10 2,27,30,30 3,70,08,125
0 0
GROSS PROFIT
(Sales Cost of 14,36,000 12,27,800 13,50,000
Operation)
INDIRECT EXPENSES
Factory expenses 4,83,600 5,67,000 5,77,729
Administrative 89,400 1,94,651
expenses 90,000
Total Indirect 5,73,000 6,57,000 5,50,700
Expenses
EBIT:

39
(Gross Profit Indirect 8,63,000 6,09,100 7,99,300
exp)
LESS:
Interest on Borrowed 4,20,000 3,78,000 4,75,200
Capital
EBT: 4,43,000 2,31,100
3,24,100
LESS:
TAX 86500 65,000 73,780
EAT: 3,56,500 1,66,150 2,50,320

PROJECTED COST SHEET

PARTICULAR YEAR 1 YEAR 2 YEAR 3

Raw Material Consumed
Purchase 1,73,46,100 1,85,02,500 2,31,28,125
Less: Cl. Stock --- --- ---
Add:
Direct wages 5,16,000 5,16,000 5,16,000
Utilities 5,00,000 5,50,000 5,80,000
PRIME COST (A) 1,83,62,100 1,95,68,500 2,42,24,125
Factory Cost
Add:
Repairs 75,000 85,714 96,429
Managers Salary 60,000 60,000 60,000
Supervisors Salary 72,000 72,000 72,000
Watchmans Wage 24,000 24,000 24,000
Depreciation on Machines 2,00,000 2,00,000 2,00,000
Depreciation on Building 2,25,300 2,25,300 2,25,300
TOTAL FACTORY COST 6,56,300 6,67,014 6,77,729
(B)
Administrative Expenses
Add:
Accountants Salary 60,000 60,000 60,000
Clerks Salary 24,000 24,000 24,000
Postage and Telegram Exp. 25,000 28,571 32,143
Telephone Exp. 35,000 40,000 45,000
Mis. Expenses 25,000 30,571 32,143
Insurance Exp. 90,000 1,02,857 1,15,714
Medical Exp. 50,000 57,143 64,286
Professional Tax 1,000 1,143 1,286
Legal Exp. 20,000 30,000 25,714
Audit Fees 36,700 41,943 47,186
Depreciation on Computer 16,000 16,000 8,000
Depreciation on Other FA 39,000 50,000 39,000
Interest on Owned Capital 2,80,000 2,80,000 2,80,000

40
TOTAL ADMINISTRATIVE 11,50,700 12,91,085 12,23,472
EXPENSES (C)
COST OF PRODUCTION 2,01,69,100 2,15,26,599 2,87,73,201
(A+B+C)
Add:
Op. stock of Finished Goods ----- 28,76,000 28,76,000
Less:
Cl. Stock of Finished Goods
28,76,000 28,76,000 28,76,000
COST OF PRODUCTION
OF GOODS SOLD 1,55,63,100 1,64,07,686 2,04,01,326

Selling and Distribution

Expenses
Add:
Salesmans Salary 60,000 60,000 60,000
Transportation exp. 45,000 57,143 64,286
Advertising exp. 75,000 91,429 1,02,857
Traveling exp. 50,000 57,143 64,286
COST OF SALES 1,57,93,100 1,66,73,401 2,06,92,755

SALES 1,73,46,100 1,85,02,500 2,31,28,125

PROFIT 15,53,000 18,29,099 24,35,370

41
PROJECTED TRADING ACCOUNT

YEAR 1
DR. CR.
PARTICULARS AMT. PARTICULARS AMT.
To Opening stock ----- By Sales 1,73,46,100
To Purchase 60,00,000 By Closing Stock 27,00,000
To Direct Wages 6,15,600
To Utilities 5,00,000

To Gross Profit 61,36,000

TOTAL 2,00,46,10 TOTAL 2,00,46,100

0

YEAR 2
DR. CR.
PARTICULARS AMT. PARTICULARS AMT.
To Opening stock 27,00,000 By Sales 1,85,02,500
To Purchase 90,00,000 By Closing 27,00,000
To Direct Wages 5,16,000 Stock
To Utilities 5,50,000

To Gross Profit 40,22,000

TOTAL 2,12,02,50 TOTAL 2,12,02,500

0

YEAR 3
DR. CR.
PARTICULARS AMT. PARTICULARS AMT.
To Opening stock 27,00,000 By Sales 2,31,28,125
To Purchase 1,57,76,00 By Closing 27,00,000
To Direct Wages 0 Stock
To Utilities 5,16,000
5,80,000
To Gross Profit 46,28,000

42
TOTAL 2,58,28,12 TOTAL 2,58,28,125
5

43
PROJECTED PROFIT AND LOSS ACCOUNT

YEAR 1
DR. CR.
PARTICULARS AMT. PARTICULARS AMT.
To Repairs exp. 75,000 By Gross Profit 61,36,000
To Postage and
Tele. Exp. 25,000
To Telephone exp. 35,000
To Transportation 50,000
To Mis. 25,000
Expenditure 80,000
To Advertising 90,000
exp. 50,000
To Insurance 1,000
To Medical exp. 20,000
To Professional 36,700
Tax 50,000
To Legal Exp.
To Audit Fees 3,00,000
To Traveling exp. 4,80,300
To Salaries to
employees 5,94,000
To Depreciation
To Int. on 5,40,000
Borrowed Capital 10,55,200
To Loan
Installment Paid
To Income Tax

To Net Profit 26,28,800

TOTAL 61,36,000 TOTAL 61,36,000

44
YEAR 2
DR. CR.
PARTICULARS AMT. PARTICULARS AMT.
To Repairs exp. 85,714 By Gross Profit 40,22,000
To Postage and
Tele. Exp. 28,714
To Telephone exp. 40,000
To Transportation 57,143
To Mis. 28,571
Expenditure 91,429
To Advertising 1,02,857
exp. 57,143
To Insurance 1,143
To Medical exp. 22,857
To Professional 41,943
Tax 57,143
To Legal Exp.
To Audit Fees 3,00,000
To Traveling exp. 4,80,300
To Salaries to
employees 5,34,600
To Depreciation
To Int. on 5,40,000
Borrowed Capital 4,15,776
To Loan
Installment Paid
To Income Tax

To Net Profit 11,36,810

TOTAL 40,22,000 TOTAL 40,22,000

45
YEAR 3
DR. CR.
PARTICULARS AMT. PARTICULARS AMT.
To Repairs exp. 96,429 By Gross Profit 46,28,000
To Postage and
Tele. Exp. 32,143
To Telephone exp. 45,000
To Transportation 64,286
To Mis. 32,143
Expenditure 1,02,857
To Advertising 1,15,714
exp. 64,286
To Insurance 1,286
To Medical exp. 25,714
To Professional 47,186
Tax 64,286
To Legal Exp.
To Audit Fees 3,00,000
To Traveling exp. 4,72,300
To Salaries to
employees 4,75,200
To Depreciation
To Int. on 5,40,000
Borrowed Capital 5,94,751
To Loan
Installment Paid
To Income Tax

To Net Profit 15,54,419

TOTAL 46,28,000 TOTAL 46,28,000

46
PROJECTED BALANCE SHEET
LIABILITIES YEAR 1 YEAR 2 YEAR 3
CAPITAL

Owned Capital 35,00,000 35,00,000 35,00,000

SECURED LOAN

ICICI Bank Ltd 35,00,000 31,50,000 28,00,000

CREDITORS

Pranav Trade Ltd 3,72,616 8,72,613 6,13,490

TISCO Ltd 5,51,425 ----- -----
Raj enterprise Ltd ------ 3,45,140 10,12,514
Net Profit 26,28,800 11,36,810 15,54,419

TOTAL 81,86,841 90,04,563 94,80,423

ASSETS YEAR 1 YEAR 2 YEAR 3

Land 16,10,000 16,10,000 16,10,000
Building 23,27,700 21,02,400 18,77,100
Machinery 8,00,000 6,00,000 4,00,000
Furniture & Fixtures 85,000 70,000 55,000
Electric Installation 42,500 35,000 27,500
Telephone 8,500 7,000 5,500
Computer 24,000 8,000 -----
Boundary, Walls ,Gates 42,500 35,000 27,500
Production Dyes 34,000 28,000 22,000
Troll and other eqp. 8,500 7,000 5,500

DEBTORS

Shreenathji Industries 21,16,032 ----- 3,59,321

ShreeKrishna Enterprise 20,15,620 10,214 10,12,121
Ram & Ram Pvt. Ltd. 9,58,528 10,56,713 12,54,612
Kkassuma Eng. Pvt. Ltd 3,62,568 8,01,406 -----

Cash at Bank 31,26,892 51,86,400 50,45,619

Cash in Hand 7,90,500 10,51,430 11,49,150
Closing Stock 27,00,000 27,00,000 27,00,000

TOTAL
47
1,70,50,841 1,53,14,563 1,56,00,423
YEAR 1 YEAR 2 YEAR 3
QTY AMT QTY AMT QTY AMT

Op. stock ----- ----- ----- ----- ----- ------

Add:
Purchase 8,67,305 1,73,46,100 9,25,125 1,85,02,500 9,25,125 2,31,28,125
Less: Cl stock ------ ----- ----- ----- ----- -----

PARTICULARS OF RAW MATERIAL

CONSUMED

PARTICULARS OF FINISHED GOODS

Particulars YEAR 1 YEAR 2 YEAR 3
QTY AMT. QTY AMT. QTY AMT.

Op .
balance ----- ------- 4,000 27,00,000 4,000 27,00,000

Add: good
manu. 1,44,000 9,72,00,000 1,60,000 1,80,000 1,80,000 12,15,00,000

Less:
Sales 1,40,000 9,45,00,000 1,60,000 1,80,000 1,80,000 12,15,00,000

4,000 27,00,000 4,000 27,00,000 4,000 27,00,000

Cl. Stock

48
SCHEDULE FOR WRITTEN DOWN VALUE
OF FIXED ASSETS

PARTICULAR Gross Block Depreciation Net Block

Land 16,10,000 16,10,000 ----- ----- 16,10,000

Building 22,53,000 22,53,000 ----- 2,25,300 23,27,700

Machinery 10,00,000 10,00,000 ----- 2,00,000 8,00,000

Furniture &
Fixture 1,00,000 1,00,000 ----- 15,000 86,000

Electric
installation
charges 50,000 50,000 ----- 7,500 42,500

Telephone 10,000 10,000 ----- 1,500 8,500

Computer 40,000 40,000 ----- 16,000 24,000

Boundary,
wall & gates 50,000 50,000 ----- 7,500 42,500

Production 40,000 40,000 ----- 6,000 34,000

Dyes

Trolley and 10,000 10,000 ----- 1,500 8,500

other eqp

49
SCHEDULES FOR FACTORY OVERHEADS

PARTICULARS AMOUNT
Repairs 75,000
Managers Salary 60,000
Supervisors Salary 72,000
Watchmans Salary 24,000
Depreciation on Machinery 2,00,000
Depreciation on Building 2,25,300
FACTORY COST 6,56,300

SCHEDULES FOR AMINISTRATIVE

OVERHEADS
PARTICULARS AMOUNT
Accountants Salary 60,000
Clerks Salary 24,000
Postage & Telegram Exp. 25,000
Telephone Exp. 35,000
Mis. Expenditures 25,000
Insurance Exp. 90,000
Medical Exp. 50,000
Professional Tax 1,000
Legal Exp. 20,000
Audit Fees 36,700
Depreciation on Computer 16,000
Depreciation on Other Fixed 39,000

50
Asset
Interest on Owned Capital 7,29,000
TOTAL 11,50,700

SCHEDULES FOR SELLING OVERHEADS

PARTICULAR AMOUNT
Salesmans Salary 60,000
Transportation Exp. 50,000
Advertising Exp. 80,000
Traveling Exp. 50,000
TOTAL 2,40,000

51
RISK FACTORS

RISK is the biggest threat which ever entrepreneur has

to look upon very seriously in order to safeguard the
investment & there by earn profit.

As far as this is concerned, owing to the current

situation, there have started emerging some competitors which
are proving to be threats for future. Therefore, it is very
important to notice the risk factors in the environment in
which the business works. It is again very important to notice
the degree of competition in the existing market so as to make
planning for future.

This product as in the initial stage does not face high

competition therefore the Risk factor for competition & market
share is reduced.

52
ADDRESS OF RAW MATERIAL
SUPPLIERS

1) M/S. Vijay & co

Kaliwara koti
Surendranagar
Dt. Rajkot

2) Shri D.T. balasania & co

Godamle station plot,
B/H. industrial Estate
Lal road,
Bharuch,
Gujrat

3) Kalabadevi industrial estate

Nr. Kalbadevi High Road,
Mumbai

4) S.G.Pillai & Pillai co. Ltd

Surakvarna Roa. Road
Nr.Clwai Nallah.
Block -603
Kerala,

53
ADDRESS OF MACHINERY SUPPLIERS
1) Shri Guygon Forges Ltd.
36112, Estate,
Moti Baug,
Delhi.

2) M/s Shankar machine tools.ltd

36/18-court area,
OMNI bldg
near factory area
Surendranagar

3) M/s Siddhi prakash Engg. Work Pvt.Ltd

Nr. Jagdish Tower,
Nautambai industrial Estate
Mumbai

54
CONCLUSION

This product, has such characteristics which build the

the power to explore new market boundaries. Proper planning
& management. Will definitely up bring this product & hence
will contribute at some or the other extent to the saving of ir-
reversible & exhausting resource.

55