Ppr mba wheel cap

BUSINESS PLAN
PREPARED BY
PANDYA RAKESH D.
MBA 3rd
SEM Roll No:- 56
ACADEMIC YEAR - 2 0 1 0 - 1 1
COLLEGE
SHREE N.R. VEKARIYA INSTITUTE OF,
BUSINESS MANAGEMENT STUDIES
M.B.A. COLLEGE, JUNAGADH
Prepared By:- Pandya Rakesh D. 1

DECLARATION
I undersigned PANDYA RAKESH D., a student of MBA 3rd
SEM
hereby declare that the project work presented in this report is my own work
and has been carried out under the supervision of Dr. RAJESH PATEL
director of college.
This work has not been previously submitted to any other industries or
university for examination.
Date:-
Place: - Junagadh
(Pandya Rakesh D.)

PREFACE
The course of M.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 innovation” 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 MBA of Gujarat Technology
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. Rajesh Patel for
constant support and encouragement due to which the work is accomplished.
Date :–
Place :–
(Pandya Rakesh D.)

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 - Rakesh D. Pandya
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 - Rakesh D. Pandya
Age - 22 years
Office Address - Torque Wheel caps Pvt. Ltd.
Plot No. B/3/97,
Aji G.I.D.C. Industrial Area
Rajkot.
Qualification - M.B.A. [HR]
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 Marketing
Production
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
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.

S T A F F
A N D
L A B O U R
D E T A I L S
Mgt. representative
General manager
Production manager
Purchase manager
Personnel manager
Finance manager
Marketing manager
Technical supervisor
Sales manager
Accountant
Salesman
Peon
Watchman
1
1
1
1
1
1
1
1
1
4
4
2
1
Skilled worker
Semi skilled worker
Unskilled worker
8
8
5

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 Amount
Factory furniture 3,00,000 3,00,000
Office 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

Working
capital
Particular Rate
(Rs.)
Per Day Per Year
Qty. Amt. Qty. Amt.
Greneauls
Total
72 per
kg.
1921.3 1,38,334
1,38,334
576293 4,14,93,108
4,14,93,108

STAFF & LABOUR
Particulars No. of
person
Salary Per
Month
Per Year
Manager 1 7,000 7,000 84,000
General manager 1 10,000 10,000 1,20,000
Production manager 1 6,300 6,300 75,600
Purchase manager 1 6,300 6,300 75,600
Personnel manager 1 6,300 6,300 75,600
Financial manager 1 6,300 6,300 75,600
Technical
supervisor
1 6,300 6,300 75,600
Marketing manager 1 6,300 6,300 75,600
Sales manager 1 5,800 5,800 69,600
Accountant 4 5,500 22,000 2,64,000
Skilled Worker 8 4,000 32,000 3,84,000
Semi Skilled
Worker
8 3,000 24,000 2,88,000
Unskilled Worker 5 2,000 10,000 1,20,000
Salesman 4 4,000 16,000 1,92,000
Peon 2 2,300 4,600 55,200
Watchman 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
TOTAL WORKING CAPITAL
REQUIREMENT
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
TOTAL CAPITAL INVESTMENT
1. 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
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% 2,31,300
Computers 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
ANNUAL COST OF PRODUCTION
2. Salaries 20,50,800
3. Other Expenses & utilities 53,17,400
4. Interest on Capital 15,00,000
5. Depreciation 10,29,500
Total 5,13,90,808
FIXED COST
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
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

BREAK EVEN ANALYSIS
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 9,00,000
2. 67,50,000 7,50,000 60,00,000 8,10,000
3. 60,00,000 7,50,000 52,50,000 7,20,000
4. 52,50,000 7,50,000 45,00,000 6,30,000
5. 45,00,000 7,50,000 37,50,000 5,40,000
6. 37,50,000 7,50,000 30,00,000 4,50,000
7. 30,00,000 7,50,000 22,50,000 3,60,000
8. 22,50,000 7,50,000 15,00,000 2,70,000
9. 15,00,000 7,50,000 7,50,000 1,80,000
10. 7,50,000 7,50,000 - 90,000
AVERAGE COST OF CAPITAL
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%
RETURN ON INVESTMENT
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 5,43,90,000
Less : Cost of Production 4,88,59,335
EBIT 55,30,665
Less : Interest 9,00,000
EBT 46,30,665
Less : 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%
PROJECTED COST SHEET
Particular Year 1 Year 2 Year 3
Raw Material Consumed
Purchases
Add: Direct Wages
Utilities
4,14,93,108
7,92,000
14,50,000
4,14,93,108
7,92,000
14,50,000
4,14,93,108
7,92,000
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
1,30,000
84,000
75,600
20,400
2,97,000
3,06,000
2,02,500
1,30,000
84,000
75,600
20,400
2,97,000
2,60,100
1,82,250
1,30,000
84,000
75,600
20,400
2,97,000
2,21,085
1,64,025
TOTAL FACTORY
OVERHEAD (B)
11,15,500 10,49,350 9,92,110
Administrative Overheads

Add: General Mag. Salary
Personnel Mag. Salary
Accountant 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
1,20,000
75,600
2,64,000
75600
55,200
20,400
1,20,000
24,000
1,20,000
60,000
60,000
60,000
72,000
4,35,500
6,00,000
1,20,000
75,600
2,64,000
75,600
55,200
20,400
1,20,000
24,000
1,20,000
60,000
60,000
60,000
28,800
3,80,385
6,00,000
1,20,000
75,600
2,64,000
75,600
55,200
20,400
1,20,000
24,000
1,20,000
60,000
60,000
60,000
11,520
3,32,516
6,00,000
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
1,47,520
COST OF
PRODUCTION OF
GOODS SOLD
4,65,39,848 4,63,79,188 4,77,36,849
Selling & Distribution
Overhead
Add: Salesman Salary
Marketing Mag. Salary
Purchase Mag. Salary
Sales Mag. Salary
Transportation Exp.
Advertising Exp.
Traveling Exp.
Packing Exp.
Conveyance Exp.
1,92,000
75,600
75,600
69,600
3,00,000
3,00,000
2,40,000
16,83,000
68,000
1,92,000
75,600
75,600
69,600
3,00,000
3,00,000
2,40,000
16,83,000
68,000
1,92,000
75,600
75,600
69,600
3,00,000
3,00,000
2,40,000
16,83,000
68,000

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 4,48,52,195
COST OF
OPERATION
4,48,52,195 4,48,52,195 4,48,52,195
Add: Opening stock - 5,45,060 10,86,315
Less: closing stock 5,45,060 10,86,315 1,47,047
B. TOTAL [B] 4,43,07,135 4,43,10,940 4,57,91,463
GROSS PROFIT[A-B] 1,00,82,865 1,00,79,060 1,03,36,077
Less: Indirect expense 45,52,200 43,74,235 36,54,146
EBIT 55,30,665 57,04,825 66,81,931
Less: Interest 9,00,000 8,10,000 7,20,000
EBT 46,30,665 48,94,825 59,61,931
Less: 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 year
Sales 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 5,49,31,2555,51,88,272
Manufacturing Expenses
Raw materials 4,14,93,108 4,14,93,108 4,14,93,108
Labor 7,92,000 7,92,000 7,92,000
Utilities 13,00,000 13,00,000 13,00,000
Factory expenses 6,76,587 6,76,587 6,76,587
Maintenance & Repairs 23,500 23,500 23,500
Fuel 2,97,000 2,97,000 2,97,000
Water 1,50,000 1,50,000 1,50,000
Freight inward 1,20,000 1,20,000 1,20,000
TOTAL 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 1,03,36,077
Adm. & Selling Expenses
Stamp & Postage duty 20,400 20,400 13,000
Telephone 1,20,000 1,20,000 1,20,000
Interest on Borrowed Capital 9,00,000 8,10,000 7,20,000
Traveling expenses 2,40,000 2,40,000 25,000
Advg. & Mktg. 3,00,000 3,00,000 5,25,000
Misc. expenses 24,000 24,000 24,000
Selling expenses 2,40,000 2,40,000 3,00,000
Packing expenses 1,92,000 1,92,000 2,70,000
Medical expenses 60,000 60,000 75,000
Salaries 12,58,800 12,58,800 5,50,000
Depreciation 10,29,500 8,51,535 7,29,146
Maintenance & Repairs 1,06,500 1,06,500 20,000
Electricity 1,38,000 1,38,000 1,38,000
Other selling expense 2,40,000 2,40,000 2,40,000
Internet expense 12,000 12,000 12,000
Stationery & printing 25,000 25,000 25,000
Conveyance expense 68,000 68,000 68,000
Audit fees 60,000 60,000 60,000
Legal expense 60,000 60,000 60,000
Transportation 3,00,000 3,00,000 3,00,000
Tax @ 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 3
CAPITAL
Owned Capital 75,00,000 75,00,000 75,00,000

SECURED LOAN
Bank Loan
CREDITORS
NET PROFIT
67,50,000
12,55,630
30,71,983
60,00,000
14,32,940
32,47,227
52,50,000
17,54,667
39,55,145
1,85,77,613 1,81,80,167 1,84,59,812
Asset Year 1 Year 2 Year 3
Land
Building
Machinery
Furniture &
Fixture
Electric
Installation
Telephone
Computer
Trolley & other
equipments
DEBTORS
Cash in Hand
Closing Stock
40,00,000
18,22,500
15,30,000
5,40,000
5,40,000
10,800
48,000
7,47,000
88,43,028
11,225
5,45,060
40,00,000
16,40,250
13,00,500
4,86,000
4,86,000
9,720
19,200
6,72,300
90,39,812
1,12,370
10,86,315
40,00,000
14,76,225
11,05,425
4,37,400
4,37,400
8,748
7,680
6,05,070
93,70,380
8,64,437
1,47,047
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 . C
P 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.

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