DECLARATION

I, the under sign CHIRAG LIMBASHIA G., a student of T.Y. B.B.A. here by declare that the project work submitted in this report is my own contribution and is carried out under the supervision of Miss. Rhuta Mehta of R.P.Bhalodia College - Rajkot. This work had not been previously submitted to any other university for any examination. Shree

Date: Place: Rajkot

____________________ (Limbashia Chirag)

(1)

ACKNOWLEDGEMENT
It is really a matter of great pleasure for me to prepare Project Report. At this stage project report is an important part of learning, and every entrepreneur prepares it before he starts actual production. I am heartily thankful to the Saurashtra University, which has given me the golden opportunity to prepare the product project report on bad of lathe machine. I would like to express my deep gratitude to Miss. Rhuta Mehta, Project in charge of our college. Without her helpful co-operation and guidance, my efforts would have never been materialized in such worth. Her inspiration and encouragement has leaded me to come with a successful task. I personally want to thanks My Parents & My Friends who have directly or indirectly had helped me in preparing the project report. No serious & lasting achievement or success, one can ever achieve without the help & guidance and co-operation of so many people involved in the work.

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PREFACE
Bachelor of business Administration is a dynamic degree course offering unique opportunity, which enables an individual to find ones way through the labyrinths at the business world. It covers a very wide spectrum of activities. It is a great chance for the students to feel world. It becomes helpful to bridge the gap between theoretical aspects and practical filed. Practical study plays a vital role in the field of education. It has been introduce for the student to get practical knowledge along with the theoretical knowledge. How management principles are implemented in business can only be known through practical study through visit, student can be berry well become aware about industrial environment like problem, opportunities students for better understanding & also gives then a chance to show their skills & ability. It is a matter of great pleasure to present this report work. The main object of this report is to prepare a project for the starting of a small scale unit. I am sure that this practical knowledge will help me a lot in future to start a new business or in job.

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INDEX
SR. NO
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.

PARTICULARS
Introduction Project at Glance Partners Background Organizational Structure Location Justification Product Details Market Potential Machines Manufacturing Process Production Capacity Schedule Staff and Labour Details Financial Details Risk Factors Raw Material Suppliers Machineries Supplier Disclosure of Significant Accounting Policy Conclusion

PAGE NO.
5 6 7 8 9 10 11 12 14 16 16 17 43 44 44 45 46

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INTRODUCTION
The project work presented in this report refers to setting up of a manufacturing unit engaged in ball bearing in future so it is necessary to know some detailed information about them. In India there are many company production Iron and Steel. There are many big companies whose main dealing is in Iron and Steel. So there are many industries involved in the product where there is use of Iron and Steel. Basic reason to choose ball bearing is that it is a product which is widely used in all type of equipment such as machineries, automobiles, etc. Ball bearing is a product which is used in every equipment where wheel is affixed to make wheel working freely ball bearing is used. In India usage of ball bearing is very high. Earlier ball bearings where exported. But now there are few companies which are producing ball bearing but due to there monopoly they are charging very high prices and the quality of some bearing are not so much good.

PROJECT AT GLANCE
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Name of Unit Registered Office

M. G. Engineering G-777, GIDC Metoda, Lodhika, Dist.- Rajkot Gujarat India. G-777, GIDC Metoda, Lodhika, Dist.- Rajkot Gujarat India. Sole Proprietorship Chirag Patel Ball Bearing M. G. Small Scale Industries 10007 Rs. 675 for 120 mm diameter Owners Capital 60% Rs 81 lacs Borrowed Capital 40% Rs 54 lacs from RNSBL 9.8% 15.69%

Factory Location

Form of Org. Name of Promoter Name of Product Name of Brand Size of Unit SSI Registration No. Cost of Product Means of Finance

Cost of Capital Return on Investment

PARTNERS BACKGROUND
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Name Age Residential

Chirag patel 21 years MAYANK , 6-Visranti society,

Address kothariya main road, Rajkot- 2. Registered Office M. G. Engineering Address Qualification Role in Unit Financial Contribution G-777, GIDC, Metoda, Lodhika, Dist Rajkot, Gujarat India. Under Graduate BBA Chair person 60% of Total Capital

ORGANIZATIONAL STRUCTURE
Chairman

(7)

Manager

Supervisor Skilled Workers Semi Skilled Workers Unskilled Worker

Accountant Peon / Clerk

Salesman Watchman

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LOCATION JUSTIFICATION
It is very important for any firm to decide that where the plant should be established at the time of selection of establishment place. We have to take into consideration many points. It involves cost which affects the overall profitability of a unit. Moreover there other environmental considerations and infrastructure facilities too. This unit is to be located at Rajkot district at Metoda GIDC which is an industrial area. Here price of land is reasonable. Following incentives and advantages justify the location at Metoda: Easy availability of raw materials Labour easily available Long term subsidy Nearness to market Cheap labour

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PRODUCT DETAILS
The basic product of the unit is ball bearing. It is a product which is used in day to day life in every industrial machines, auto mobiles, etc. Ball bearing is manufactured by special steel called SAE 52100. Our unit manufactured ball bearing from size 20 mm to 300 mm diameters. It is manufactured according to order given. Especially for manufacturing of ball bearing it has to be passed with various processes. It has to go through various machinery and after that ball bearing is manufactured. These ball bearings are to be sold on our own brand name of M.G..

MARKET POTENTIAL
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The popularity of ball bearing is very much because ball bearing is used at every place where there is revolving wheel so the demand of ball bearing is very much. There are many companies which are manufacturing ball bearing but they are very costly and some times there is not proper quality. There are many companies which are engaged in producing ball bearing. Among this popular companies are Kasuma Eng. (I) Pvt. Ltd., Galaxy Bearing Ltd, etc. This shows that ball bearing have a great market potential. So it will be beneficiary to enter the market of ball bearing and sell the same.

MACHINES
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Machines

play

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 a lot of work if handled properly basically machines require regular repairs and maintenance. If this is done then machines will last for a longer duration. Machines make the work of the workers easier and even with machines we get faster work done for the unit to be set up, we need following machines for producing ball bearings: Grinding Machine:This machine is used for grinding the upper surface of ball bearing ring as soon as it is forged. Internal Grinding Machine:This machine is used for grinding inside surface of ball bearing ring. Lathe Machine:This machine is used for turning the bearing ring which is not accurate in size when it comes from forging.

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Cylindrical Grinding Machine:This machine is used for making proper grinding the inner surface of ball bearing ring so that it is polished and rough grinding of internal grinding machine can be made proper.

Horizontal Grinding Machine:This machine is used for making proper grinding the upper surface of ball bearing ring so that it is polished and rough grinding of upper surface grinding machine can be made proper.

Annealing Machine:This machine is used make annealing of bearing ring which is forged. Through this machine the bearing ring forged is uneven or not in proper round shape can be made proper by this machine.

Press machine for assembling cage into bearing ring and assembling machine for assembling ball into cage.

There are also other machines which are used for checking the accuracy and quality of ball bearing and this machines are venire, micro meter, etc.

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MANUFACTURING PROCESS
The main raw material used for manufacturing of ball bearing is as follow: Forging The first and foremost step for the production of bearing is forging of the steel bar for the exact size of the bearing ring. The company purchases this forging from out sources. When forging is purchased form out sources all the dimensions of metal are checked and then this forging is sending for other process. Annealing and Turning It is the second step in the process of manufacturing bearing. This step is always conducted after forging. The process of annealing is used for making ring of ball bearing straight which is not proper in shape. After that turning is done so that all the dimensions of bearing ring can be made of appropriate size for this lathe machine is used. Then bearing are heated to check the hardness.

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Cage Component First the dye of the cage is prepared and then the cage is manufactured but in our company it is directly purchased from out sources.

Grinding and Polishing For grinding and polishing of ball bearing various machines are used so that it looks good. These machines are horizontal and cylindrical grinding machines. Horizontal grinding machine is used to make out surface plain by grinding it up to appropriate size.Cylindrical grinding machine is used to make grinding inner surface of bearing.

Assembling and Packing Press machine is used for assembling cage inside the ring of bearing. The other machine is used to fix ball inside this cage. After all this procedure there are few gazette which are used for checking quality and accurate size of the bearing. After all this procedure it is packed into bristle pack.

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PRODUCTION CAPACITY SCHEDULE

INSTALLED CAPACITY NUMBER OF WORKING DAYS IN A WEEK NUMBER OF SHIFT PER DAY NUMBER OF HOURS PER SHIFTS PRODUCTION CAPACITY PER MONTH

70% 6 DAYS 1 8 HOURS 12000 UNITS

STAFF AND LABOUR

FACTORY STAFF
SKILLED WORKERS SEMI SKILLED WORKERS UNSKILLED WORKERS 3 5 7 1 2 1 1 1 1

ADMINISTRATIVE STAFF

MANAGER SUPERVISOR CLERK ACCOUNTANT SALESMAN WATCHMAN

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(17)

FIXED ASSETS
Land
Particulars Sq.mt Land s. 2300 Rate(Rs.) 700 Total Cost 16,10000

Building
Particulars Building Sq.feet 7510 Rate(Rs.) 300 Total Cost 22,53,000

Plant & Machinery

Name Grinding machine Internal Grinding machine Cylindrical Grinding machine Annealing machine Lathe machine Horizontal Grinding machine Press machine for assembling bearing Other quality checking

Qty. 1 1 1 1 4 2 2

Rate 1,50,00 0 2,00,00 0 90,000 30,000 25,000 1,00,00

Total Cost 1,50,000 2,00,000 90,000 30,000 1,00,000 2,00,000 1,30,000

--

0 65,000

10,000

(18)

machine

--

(19)

Other Assets
Sr. no. 1 2 3 4 5 6 7 Furniture & Fixtures Electrification Installation Charges Computer Telephone Production dyes Boundary wall & 1,00,0 00 1 2 1 50,000 40,000 5,000 40,000 50,000 50,000 40,000 10,000 40,000 50,000 Particulars Qty. Rate Total Cost 1,00,000

Gate Trolly and other handling equipment

10,000

10,000

Total Fixed Assets

NO. 1. 2. 3. 4. 5. 6. 7. PARTICULAR Land (2300sq mts @700) Building (7510 sq feet @ 300} Boundary Wall & Gate Plant & Machinery Furniture & Fixtures Electrification & Installation Charges Computer, Telephones, production dyes and trolly Total 50,000 1,00,00 0 51,63,0 00 AMOUNT 16,1000 0 22,53,00 0 50,000 10,00,00 0 1,00,000

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COST OF PRODUCTION
RAW MATERIALS
PARTICULAR PER PER MONTH AMT (RS) PER YEAR QTY AMT (RS) 840000 00 720000 518400 0 144000

UNIT QTY (RS) FORGED RING OF SAE 52100 70/kg 1000 0 units 1200 0 1440 00 1200 0

kg 70000 12000 00 0 60000 14400 0 43200 17280 0 00 12000 14400 0 75040 00

CAGE BALLS BOX FOR PACKING

5/3/1/-

TOTAL

90048 000

UTILITIES
PARTICULAR WATER FUEL ELECTRICITY PER YEAR 50,000 1,00,000 3,50,000

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TOTAL

5,00,000

(22)

STAFF AND LABOUR

PATICULARS
NO. OF PERSO N MANAGER SUPERVISOR SKILLED WORKER SEMI SKILLED WORKER UNSKILLED WORKER WATCH MAN ACCOUNTANT SALES MAN CLERK TOTAL 1 2 3 5 7 1 1 1 1 5000 3000 3500 3000 2500 2000 5000 5000 2000 SALAR Y PER MONT H 5000 6000 10,500 15,000 17,500 2000 5000 5000 2000 60,000 72,000 1,26,000 1,80,000 2,10,000 24,000 60,000 60,000 24,000 PER YEAR

68,000 81,6000

ANNUAL COST OF PRODUCTION

SR. NO 1 2 3 4 5 6 PARTICULAR RAW MATERIAL UTILITY SALARIES OTHER EXPENSES INTEREST ON CAPITAL DEPRECIATION AMOUNT 9,00,48,00 0 5,00,000 8,16,000 5,37,700 13,23,000 4,80,300

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OTHER EXPENSES
SR.N O 1 2 3 4 5 6 7 8 9 10 11 12 PARTICULAR REPAIR AND MAINTENANCE POSTAGE AND TELEGRAM TELEPHONE EXPENSES TRANSPORTATION MISCELLENEOUS EXPENSES ADVERTISEMENT INSURANCE MEDICAL EXPENSES PROFESSIONAL TAX LEGAL EXPENSES AUDIT FEES TRAVELLING EXP TOTAL AMOUNT 75,000 25,000 35,000 50,000 25,000 80,000 90,000 50,000 1000 20,000 36,700 50,000 5,37,700

(24)

TOTAL CAPITAL INVESTMENT

SR. NO 1 2 3 PARTICULAR FIXED COST WORKING CAPITAL ( 1 MONTH) CASH IN HAND TOTAL AMOUNT 51,63,00 0 76,58,47 5 6,78,525 1,35,00, 000

(25)

TOTAL WORKING CAPITAL REQUIREMENT

SR. NO 1 2 3 4 PARTICULARS RAW MATERIALS STAFF AND LABOUR UTILITIES OTHER EXPENSES TOTAL AMOUNT 9,00,48,00 0 8,16,000 5,00,000 5,37,700 9,19,01,7 00

SOURCES OF FINANCE
SR NO. 1 2 PARTICULAR OWNERSHIP CAPITAL (60%) BORROWED CAPITAL (40%) LOAN BORROWED FORM NAGRIK SHAKARI BANK LTD. @ 11% 1,35,00, 000 INTEREST RATE TOTAL AMOUNT 81,00,00 0 54,00,00

(26)

INTEREST ON CAPITAL
SR. NO 1 2 DETAILS OWNER CAPITAL JAY R. PARSANA (60%) BORROWED CAPITAL NAGRIK SHAKARI BANK LTD (40%) TOTAL LOAN AMT 81,00,00 0 54,00,00 0 1,35,00, 000 INTERES T RATE 9% 11% INTERST AMOUNT 7,29,000 5,94,000

13,23,0 00

DEPRECIATION
SR. NO 1 2 3 4 PARTICULAR BUILDING MACHINARY OTHER FIXED ASSET COMPUTER TOTAL RATE OF DEPRICIATION DEPRICIATION 22,53,0 10% 2,25,300 00 10,00,0 20% 2,00,000 00 2,60,00 15% 39,000 0 40,000 40% 16,000 4,80,300 VALUE

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SALES FORECAST
YEAR 1 2 3 4 5 UNITS PER ANNUM 1,40,000 1,60,000 1,80,000 1,90,000 2,00,000 RATE PER UNIT 675 675 675 680 680 SALES (RS) 9,45,00,000 10,80,00,000 12,15,00,000 12,92,00,000 13,60,00,000

FIXED COST
SR. NO. 1. 2. 3. 4. PARTICULARS DEPRECIATION INTEREST ON CAPITAL SALARY (50%) OTHER EXP & UTILITIES (30%) TOTAL 25,22,610 AMOUNT 4,80,300 13,23,000 4,08,000 3,11,310

Fixed Cost per unit = Total Fixed Cost / number of units = Rs 25, 22,610 / 1, 44,000 units = Rs 17.52 per unit

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VARIABLE COST
SR. NO. 1 2 3 PARTICULARS RAW MATERIAL SALARIES (50%) OTHER EXP AND UTILITIES TOTAL AMOUNT 9,00,48000 4,08,000 7,26,390 9,11,82,39 0

Variable Cost Per Unit = = =

Total Variable Cost Number Of Units Rs 9, 11, 82,390 / 1, 44,000 Unit Rs 633.21 Per Unit

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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.
Contribution/unit = S.P./unit-V.C./unit = Rs 675 633.21 = Rs 41.79 B.E.P. (%) = {Fixed Cost / (Fixed Cost + Profit)} X Capacity utilization = 5,22,610 (25,22,610+21,18,000) X 70 = 38.05% B.E.P. (units) = Fixed Cost/ (Contribution/unit) = 25,22,610/41.79 = 60,364 ball bearing B.E.P. (Rs.)= B.E.P. x S.P./unit = 60,364 x675 = Rs.40,745,700

(30)

RATIO
RETURN ON INVESTMENT = EBIT / Cost of Capital = 21,18,000 / 1,35,00,000 = 15.69%

GROSS PROFIT RATIO

= Gross Profit / Sales X 100 = 61,36,000 / 9,45,00,000 X 100 = 6.49%

NET PROFIT RATIO

= Net Profit / Sales X 100 = 6,06,500 / 9,45,00,000 X 100 = 0.64%

FIXED ASSETS TURNOVER = Total Fixed Asset / Sales X 100 = 51,63,000 / 9,45,00,000 X 100 = 5.46%

(31)

LOAN REPAYMENT SCHEDULE

YEAR 1 2 3 4 5 6 7 8 9 10 O/P BAL. INSTALLMENT 54,00,000 5,40,000 48,60,000 5,40,000 43,20,000 5,40,000 37,80,000 5,40,000 32,40,000 5,40,000 27,00,000 5,40,000 21,60,000 5,40,000 16,20,000 5,40,000 10,80,000 5,40,000 5,40,000 5,40,000 CL. BAL. 48,60,000 43,20,000 37,80,000 32,40,000 27,00,000 21,60,000 16,20,000 10,80,000 5,40,000 ----INTERST 5,94,000 5,34,600 4,75,200 4,15,800 3,56,400 2,97,000 2,37,600 1,78,200 1,18,800 59,400

AVERAGE COST OF CAPITAL

SR.N O 1 2 PARTICULAR Owned Capital Borrowed Capital CAPITAL 81,00,000 54,00,000 RATE 9% 11% Total INTEREST 7,29,000 5,94,000 13,23,00 0

Average Cost Of Capital = Interest / Capital X 100 (32)

= 13,23,000 / 1,35,00,000 X 100 = 9.8%

(33)

PROFITABILITY ANALYSIS
PARTICULAR Sales Less Cost of Production EBIT Less Interest EBT Less Tax EAT AMOUNT 9,45,00,000 9,23,82,000 21,18,000 13,23,000 7,95,000 1,88,500 6,06,500

TAX SLAB
PATICULAR EBT Less Less Less AMOUNT RATE AND TAX AMT 9,72,000 1,00,000 NIL 8,72,000 50,000 5000 @ 10% on 50,000 8,22,000 1,00,000 20,000 @ 20% on 1,00,000 7,22,000 2,16,600 @ 30 % on 7,22,000 Total Taxable 2,41,600 Amt.

(34)

PROJECTED OPERATING STATEMENT

(35)

PARTICULAR Sales COST OF OPERATION Raw material Utilities Labour ADD: Op. Stock of raw material LESS: Cl. stock of raw material ADD: Op. stock of finished goods LESS: Cl. stock of finished goods TOTAL COO GROSS PROFIT (Sales Cost of Operation) INDIRECT EXPENSES Factory expenses Administrative expenses Selling and Distribution exp Total Indirect Expenses EBIT: (Gross Profit Indirect exp) LESS: Interest on Borrowed Capital EBT: LESS: TAX EAT:

YEAR 1 9,45,00,000 9,00,48,000 5,00,000 5,16,000 ------------27,00,000 8,83,64,000 61,36,000 6,56,300 4,21,700 2,40,000 13,18,000 48,18,000 5,94,000 42,24,000 12,17,200 30,06,800

YEAR 2 10,80,00,000 10,29,12,000 5,50,000 5,16,000 --------27,00,000 27,00,000 10,39,78,000 40,22,000 6,67,014 4,62,085 2,65,715 13,94,814 26,27,186 5,34,600 20,92,586 5,77,776 15,14,810

YEAR 3 12,15,00,000 11,57,76,000 5,80,000 5,16,000 --------27,00,000 27,00,000 11,68,12,000 46,28,000 6,77,729 4,94,472 2,91,429 14,63,630 31,64,370 4,75,200 26,89,170 7,56,751 19,32,419

(36)

PROJECTED COST SHEET

(37)

PARTICULAR Raw Material Consumed Purchase Less: Cl. Stock Add: Direct wages Utilities PRIME COST (A) Factory Cost Add: Repairs Managers Salary Supervisors Salary Watchmans Wage Depreciation on Machines Depreciation on Building TOTAL FACTORY COST (B) Administrative Expenses Add: Accountants Salary Clerks Salary Postage and Telegram Exp. Telephone Exp. Mis. Expenses Insurance Exp. Medical Exp. Professional Tax Legal Exp. Audit Fees Depreciation on Computer Depreciation on Other FA Interest on Owned Capital TOTAL ADMINISTRATIVE EXPENSES (C)

YEAR 1 9,00,48,00 0 ---

YEAR 2 10,29,12, 000 ---

YEAR 3 11,57,76,0 00 --5,16,000 5,80,000 11,68,72, 000 96,429 60,000 72,000 24,000 2,00,000 2,25,300 6,77,729

5,16,000 5,16,000 5,00,000 5,50,000 9,10,64,0 10,39,78, 00 000 75,000 60,000 72,000 24,000 2,00,000 2,25,300 6,56,300 85,714 60,000 72,000 24,000 2,00,000 2,25,300 6,67,014

60,000 24,000 25,000 35,000 25,000 90,000 50,000 1,000 20,000 36,700 16,000 39,000 7,29,000 11,50,700

60,000 24,000 28,571 40,000 28,571 1,02,857 57,143 1,143 22,857 41,943 16,000 39,000 7,29,000 11,91,08 5

60,000 24,000 32,143 45,000 32,143 1,15,714 64,286 1,286 25,714 47,186 8,000 39,000 7,29,000 12,23,472

(38)

COST OF PRODUCTION (A+B+C) Add: Op. stock of Finished Goods Less: Cl. Stock of Finished Goods COST OF PRODUCTION OF GOODS SOLD

9,28,71,0 10,58,36, 00 099 ----27,00,000 27,00,000 27,00,000

11,87,73, 201 27,00,000 27,00,000 11,87,73, 201

9,01,71,0 10,58,36, 00 099

(39)

PROJECTED TRADING ACCOUNT

YEAR 1
DR. PARTICULARS To Opening stock To Purchase To Direct Wages To Utilities To Gross Profit TOTAL CR. AMT. ----9,00,48,0 00 5,16,000 5,00,000 61,36,00 0 9,72,00, 000 PARTICULARS By Sales By Closing Stock AMT. 9,45,00,0 00 27,00,00 0

TOTAL

9,72,00, 000

YEAR 2
DR. PARTICULARS To Opening stock To Purchase To Direct Wages To Utilities To Gross Profit TOTAL CR. AMT. 27,00,000 10,29,12,0 00 5,16,000 5,50,000 40,22,000 11,07,00, 000 PARTICULARS By Sales By Closing Stock AMT. 10,80,00,0 00 27,00,000

TOTAL

11,07,00, 000

YEAR 3
DR. PARTICULARS To Opening stock To Purchase To Direct Wages To Utilities To Gross Profit CR. AMT. 27,00,000 11,57,76,0 00 5,16,000 5,80,000 46,28,000 PARTICULARS By Sales By Closing Stock AMT. 12,15,00,0 00 27,00,000

(40)

TOTAL

12,42,00, 000

TOTAL

12,42,00, 000

(41)

PROJECTED PROFIT & LOSS ACCOUNT

YEAR 1
DR. PARTICULARS To Repairs exp. To Postage and Tele. Exp. To Telephone exp. To Transportation To Mis. Expenditure To Advertising exp. To Insurance To Medical exp. To Professional Tax To Legal Exp. To Audit Fees To Traveling exp. To Salaries to employees To Depreciation To Int. on Borrowed Capital To Income Tax To Net Profit TOTAL 30,06,80 0 61,36,00 0 AMT. 75,000 25,000 35,000 50,000 25,000 80,000 90,000 50,000 1,000 20,000 36,700 50,000 3,00,000 4,80,300 5,94,000 12,17,20 0 PARTICULARS By Gross Profit CR. AMT. 61,36,00 0

TOTAL

61,36,00 0

(42)

YEAR 2
DR. PARTICULARS To Repairs exp. To Postage and Tele. Exp. To Telephone exp. To Transportation To Mis. Expenditure To Advertising exp. To Insurance To Medical exp. To Professional Tax To Legal Exp. To Audit Fees To Traveling exp. To Salaries to employees To Depreciation To Int. on Borrowed Capital To Income Tax To Net Profit TOTAL 15,14,81 0 40,22,00 0 AMT. 85,714 28,714 40,000 57,143 28,571 91,429 1,02,857 57,143 1,143 22,857 41,943 57,143 3,00,000 4,80,300 5,34,600 5,77,776 PARTICULARS By Gross Profit CR. AMT. 40,22,00 0

TOTAL

40,22,00 0

(43)

YEAR 3
DR. PARTICULARS To Repairs exp. To Postage and Tele. Exp. To Telephone exp. To Transportation To Mis. Expenditure To Advertising exp. To Insurance To Medical exp. To Professional Tax To Legal Exp. To Audit Fees To Traveling exp. To Salaries to employees To Depreciation To Int. on Borrowed Capital To Income Tax To Net Profit TOTAL 19,32,41 9 46,28,00 0 AMT. 96,429 32,143 45,000 64,286 32,143 1,02,857 1,15,714 64,286 1,286 25,714 47,186 64,286 3,00,000 4,72,300 4,75,200 7,56,751 PARTICULARS By Gross Profit CR. AMT. 46,28,00 0

TOTAL

46,28,00 0

(44)

PROJECTED BALANCE SHEET

LIABILITIES CAPITAL Owned Capital SECURED LOAN Nagrik Shakari Bank Ltd Net Profit Less: Drawings CREDITORS Steel Trade Ltd TISCO Ltd Steel age India Pvt. Ltd TOTAL YEAR 1 81,00,000 54,00,000 30,06,800 30,06,800 3,72,616 4,17,656 -----1,42,90,2 72 YEAR 2 81,00,000 48,60,000 15,14,810 15,14,810 8,41,803 61,620 3,45,140 1,42,08,5 63 YEAR 3 .81,00,000 43,20,000 19,32,419 19,32,419 6,13,490 5,04,919 10,12,514 1,45,50,9 23

(45)

Op. stock -------------------------Add: DEBTORS Purchase 17,80,00 9,00,48,0 2,03,4 10,29,12,0 2,28,8 11,53,76,0 Less: Cl 0 00 29 00 57 00 Shreenathji Industries 11,16,032 ----3,59,321 stock --------------------------

YEAR 1 YEAR 2 Land 16,10,000 16,10,000 Building 23,27,700 21,02,400 Machinery 8,00,000 6,00,000 Furniture & Fixtures 85,000 70,000 Electric Installation 42,500 35,000 Telephone 8,500 7,000 Computer 24,000 8,000 YEAR 1 YEAR 2 Boundary, Walls ,Gates 42,500 35,000 QTY AMT QTY QTY Production Dyes 34,000 AMT 28,000 Troll and other eqp. 8,500 7,000

ASSETS

YEAR 3 16,10,000 18,77,100 4,00,000 55,000 27,500 5,500 ----YEAR 3 27,500 AMT 22,000 5,500

ShreeKrishna Enterprise Ram & Ram Pvt. Ltd. Kkassuma Eng. Pvt. Ltd Cash at Bank Cash in Hand Closing Stock TOTAL

10,15,620 5,58,528 -----31,26,892 7,90,500 27,00,000

10,214 6,56,713 1,01,406 51,86,400 10,51,430 27,00,000

5,12,121 7,54,612 ----50,45,619 11,49,150 27,00,000

1,42,90,2 72

1,42,08,5 63

1,45,50,9 23

RAW MATERIAL CONSUMED

PARTICULARS OF FINISHED GOODS

Particul ars
QTY

YEAR 1
AMT. QTY

YEAR 2
AMT.

YEAR 3
QTY AMT.

(46)

Op . balance Add: good manu. Less: Sales Cl. Stock

-----

-------

4,000

27,00,000

4,000

27,00,000 12,15,00,0 00 12,15,00,0 00 27,00,000

1,44,000 9,72,00,000 1,60,000 10,80,00,000 1,80,000 1,40,000 9,45,00,000 1,60,000 10,80,00,000 1,80,000 4,000 27,00,000 4,000 27,00,000 4,000

SCHEDULE FOR WRITTEN DOWN VALUE OF FIXED ASSETS

PARTICULAR Gross Block Op. +add. Total Depreciation Tot al acc u. Dep. During year Net Block W.D.V

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Land Building Machinery Furniture & Fixture Electric installation charges Telephone ----Computer 50,000 Boundary, wall & gates Production Dyes Trolley and other eqp 10,000 40,000 50,000 40,000 10,000 50,000 10,000 ----40,000 ----50,000 ----40,000 1,500 8,500 10,000 7,500 42,500 6,000 34,000 ----1,500 8,500 16,000 24,000 7,500 42,500 16,10,0 00 22,53,0 00 10,00,0 00 1,00,00 0 16,10,0 00 22,53,0 00 10,00,0 00 1,00,00 0 ------------2,00,0 00 ----15,000 86,000 --------2,25,3 00 16,10,0 00 23,27,7 00 8,00,00 0

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SCHEDULES FOR FACTORY OVERHEADS

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

SCHEDULES FOR AMINISTRATIVE OVERHEADS

PARTICULARS Accountants Salary Clerks Salary Postage & Telegram Exp. Telephone Exp. Mis. Expenditures Insurance Exp. Medical Exp. Professional Tax Legal Exp. Audit Fees Depreciation on Computer Depreciation on Other Fixed Asset Interest on Owned Capital AMOUNT 60,000 24,000 25,000 35,000 25,000 90,000 50,000 1,000 20,000 36,700 16,000 39,000 7,29,000

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TOTAL

11,50,70 0

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SCHEDULES FOR SELLING OVERHEADS

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

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RISK FACTORS
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 ball bearing manufacturing units have gained important position. The risk of failure of the project. Initially the required amount of sales will not be achievable and will result in loss. Initially production would be low but cost of production may be higher. The business would take a longer period to reach break even point. Heavy advertising may prove to be expensive and might not give desired results. Negative attitude of customers. unacceptance from the customers side. It may take time to beat the competitors product.

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RAW MATERIAL SUPPLIER

STEEL TRADE PVT. LTD. M.G. Road, Opp. ICICI Bank, New Delhi. TISCO LTD. 210, C.G. Road, Jamshedpur. STEEL INDIA PVT. LTD. Dalal Street (east), Near, Conar Palace, New Delhi.

MACHINARY SUPPLIER
M/S ROCKET ENG. PVT. LTD Ahmedabad bank chambers, Navrangpura, Ahmedabad. M/S MARSH MACHINERY LTD. 210, Cross Road, Mumbai. M/S S.P. TOOLS 15, Aji Vasahat, Rajkot.

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DISCLOSURE OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies used in this report is Double Entry system and all the effect of income and expenditure is give according to Double Entry system. The Depreciation is being calculated according to Straight Line Method. In this method depreciation remains same year until it is write off. When the last of amount is less then depreciation in significant year then that amount is considered as depreciation amount in that last year.

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CONCLUSION
In the product project report on M. G. Engineering BEARING, I have discussed all financial data and other relevant information. The market of M. G. Engineering is expanding its demand for the product is increasing day by day. The return in this business is also satisfactory. At last it can be said that future of this product is very bright. With the expectation of high profitability and good completing of high is assumed that it would be the perfect product to be manufactured in today's environment.

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