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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 Shree R. P.
Bhalodia College - Rajkot.

This work had not been previously submitted to any


other university for any examination.

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.

(2)
PREFACE

Bachelor of business Administration is a dynamic degree


course offering unique opportunity, which enables an individual
to find one’s 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.

(3)
INDEX

SR. NO PARTICULARS PAGE NO.


1. Introduction 5

2. Project at Glance 6

3. Partners Background 7

4. Organizational Structure 8

5. Location Justification 9

6. Product Details 10

7. Market Potential 11

8. Machines 12

9. Manufacturing Process 14
Production Capacity
10. 16
Schedule
11. Staff and Labour Details 16

12. Financial Details 17

13. Risk Factors 38

14. Raw Material Suppliers 39

15. Machineries Supplier 40

Disclosure of Significant
16. 41
Accounting Policy
17. Conclusion 42

(4)
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
equipments 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
(5)
Name of Unit M. G. Engineering
G-777, Metoda GIDC,
Registered Office Lodhika, Dist.- Rajkot
Gujarat – India.
G-777, Metoda GIDC,
Factory Location Lodhika, Dist.- Rajkot
Gujarat – India.
Form of Org. Sole Proprietorship
Name of Promoter Chirag Patel
Name of Product Ball Bearing
Name of Brand M. G.
Size of Unit Small Scale Industries
SSI Registration No. 10007
Cost of Product Rs. 675 for 120 mm diameter
Owner’s Capital 60% Rs 81 lacs
Means of Finance Borrowed Capital 40% Rs 54 lacs
from RNSBL
Cost of Capital 9.8%
Return on
15.69%
Investment

(6)
OWNER’S
BACKGROUND

Name Chirag patel


Age 21 years
Residential “ MAYANK ”, 6-Visranti society,
Address Kothariya main road, Rajkot- 2.
Registered Office M. G. Engineering
Address G-777, Metoda GIDC, Lodhika,
Dist – Rajkot, Gujarat – India.
Qualification Under Graduate BBA
Role in Unit Chair Person
Financial
60% of Total Capital
Contribution

(7)
ORGANIZATIONAL
STRUCTURE

Chairman

Manager

Supervisor Accountant Salesman

Skilled Workers Peon / Clerk Watchman

Semi Skilled Workers

Unskilled Worker

(8)
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. More over 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

(9)
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.”.

(10)
MARKET POTENTIAL
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.

(11)
MACHINES

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 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.

(12)
• 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.

(13)
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.

(14)
• 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.

(15)
PRODUCTION
CAPACITY SCHEDULE

INSTALLED CAPACITY 70%


NUMBER OF WORKING DAYS IN A 6 DAYS
WEEK
NUMBER OF SHIFT PER DAY 1
NUMBER OF HOURS PER SHIFTS 8 HOURS
PRODUCTION CAPACITY PER MONTH 12000 UNITS

STAFF AND LABOUR

SKILLED WORKERS 3
FACTORY STAFF SEMI SKILLED WORKERS 5
UNSKILLED WORKERS 7
MANAGER 1
SUPERVISOR 2
ADMINISTRATIVE CLERK 1
STAFF ACCOUNTANT 1
SALESMAN 1
WATCHMAN 1

(16)
(17)
SOURCES OF FINANCE

SR PARTICULAR AMOUN
NO. T
OWNERSHIP CAPITAL (60%) @
1 81,00,000
9%
BORROWED CAPITAL (40%)

2 LOAN BORROWED FORM


54,00,000
NAGRIK SHAKARI BANK LTD. @
11% INTEREST RATE
1,35,00,0
TOTAL
00

TOTAL CAPITAL
INVESTMENT
SR. PARTICULAR AMOUN
NO T

(18)
1 FIXED COST 51,63,000
2 WORKING CAPITAL ( 1 MONTH) 76,58,475
3 CASH IN HAND 6,78,525
1,35,00,0
TOTAL
00

(19)
FIXED ASSETS
Land
PARTICULAR SQ.MT RATE(RS. TOTAL
S S. ) COST
16,10,00
Land 2300 700
0

Building
PARTICULAR SQ.FEE RATE(RS. TOTAL
S T ) COST
22,53,00
Building 7510 300
0

Plant & Machinery

QTY TOTAL
NAME RATE
. COST
Grinding machine 1 1,50,00 1,50,000

Internal Grinding 1 0 2,00,000

machine 1 2,00,00 90,000

Cylindrical Grinding 1 0 30,000

machine 4 90,000 1,00,000

Annealing machine 2 30,000 2,00,000

Lathe machine 2 25,000 1,30,000

Horizontal Grinding 1,00,00

machine -- 0 10,000

(20)
Press machine for 65,000
assembling bearing

Other quality checking


machine --

(21)
Other Assets

SR. PARTICULARS QTY TOTAL


NO. . COST
1 Furniture & Fixtures - 1,00,00
Electrification
- 0
50,000
2 Installation Charges
3 Computer 1 40,000

4 Telephone 2 10,000

5 Production dyes - 40,000

6 Boundary wall & 1 50,000


Trolley and other 10,000
Gate -
7 handling equipment

Total Fixed Assets

NO AMOUN
PARTICULAR
. T
1. Land (2300sq meters @700) 16,10000
2. Building (7510 sq feet @ 300} 22,53,000
3. Boundary Wall & Gate 50,000
4. Plant & Machinery 10,00,000
5. Furniture & Fixtures 1,00,000
6. Electrification & Installation Charges 50,000
Computer, Telephones, production
7. 1,00,000
dyes and trolley
51,63,00
Total
0

(22)
COST OF PRODUCTION

Raw Materials

PARTICULAR PER PER MONTH PER YEAR

UNIT QTY AMT QTY AMT


(RS) (RS) (RS)
kg kg
FORGED 70/-
RING OF SAE 7,00,00 12000 84,00,00
1000
52100 0 0 0
0

units units
CAGE 5/- 60,000 7,20,000
1200 14400
0 0
BALLS 3/- 1440 4,32,00 17280 51,84,00
00 0 00 0
BOX FOR 1200 14400
1/- 12,000 1,44,000
PACKING 0 0
75,04, 9,00,48,
TOTAL 000 000

Utilities
PARTICULAR PER YEAR

WATER
50,000
FUEL
1,00,000
ELECTRICITY
3,50,000

TOTAL 5,00,000

(23)
Staff & Labour

NO. OF PER
PER
PATICULARS PERSO SALARY MONT
YEAR
N H
MANAGER 1 5000 5000 60,000
SUPERVISOR 2 3000 6000 72,000
SKILLED WORKER 1,26,00
3 3500 10,500
0
SEMI SKILLED 1,80,00
5 3000 15,000
WORKER 0
UNSKILLED 2,10,00
7 2500 17,500
WORKER 0
WATCH MAN 1 2000 2000 24,000
ACCOUNTANT 1 5000 5000 60,000
SALES MAN 1 5000 5000 60,000
CLERK 1 2000 2000 24,000
8,16,0
68,000
TOTAL 00

(24)
Other Expenses

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

(25)
Depreciation

RATE
SR.
PARTICULAR VALUE OF DEP.
NO.
DEP.
1 22,53,0
BUILDING 10% 2,25,300
00
2 10,00,0
MACHINARY 20% 2,00,000
00
3 OTHER FIXED 2,60,00
15% 39,000
ASSET 0
4 COMPUTER 40,000 40% 16,000
34,53,0
TOTAL 4,80,300
00

(26)
TOTAL WORKING CAPITAL
REQUIREMENT

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

INTEREST ON CAPITAL

INT.
SR. LOAN INT.
DETAILS AMOUN
NO. AMT. RATE
T
OWNER’ CAPITAL
1 JAY R. PARSANA 81,00,000 9% 7,29,000
(60%)
BORROWED CAPITAL
2 NAGRIK SHAKARI 54,00,000 11% 5,94,000
BANK LTD (40%)
TOTAL 1,35,00, 13,23,00
000 0

(27)
ANNUAL COST OF
PRODUCTION

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

SALES FORECAST

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

(28)
TOTAL FIXED COST

SR. PARTICULARS AMOUN


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

Fixed Cost per unit = Total Fixed Cost / number of units


= Rs 25, 22,610 / 1, 44,000 units
= Rs 17.52 per unit

TOTAL VARIABLE COST

SR.
PARTICULARS AMOUNT
NO.
1 RAW MATERIAL 9,00,48000

2 SALARIES (50%) 4,08,000

3 OTHER EXP AND UTILITIES 7,26,390

(29)
9,11,82,3
TOTAL
90

Variable Cost Per Unit = Total Variable Cost


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

(30)
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 per unit = S.P. per unit - V.C. per unit


= Rs 675 – 633.21
= Rs 41.79 per

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 per unit)


= 25,22,610/41.79
= 60,364 ball bearing

B.E.P. (Rs.) = B.E.P. x S.P. per unit


= 60,364 x675
= Rs.40,745,700

(31)
RATIO ANALYSIS

RETURN ON INVESTMENT RATIO

ROI = (EBIT / Cost of Capital) X 100


= (21,18,000 / 1,35,00,000) X 100
= 15.69%

GROSS PROFIT RATIO

GPR = (Gross Profit / Sales) X 100


= (61,36,000 /9,45,00,000) X 100
= 6.49%

NET PROFIT RATIO

NPR = (Net Profit / Sales) X 100


= (30,06,800/ 9,45,00,000) X 100
= 3.18%

FIXED ASSETS TURNOVER

FATO = (Total Fixed Asset / Sales) X 100


= (51,63,000 / 9,45,00,000) X 100
= 5.46%

(32)
LOAN REPAYMENT
SCHEDULE
[[
YEA O/P BAL. INSTALLMEN CL. INTERS
R T BAL. T
1 54,00,000 5,40,000 48,60,000 5,94,000
2 48,60,000 5,40,000 43,20,000 5,34,600
3 43,20,000 5,40,000 37,80,000 4,75,200
4 37,80,000 5,40,000 32,40,000 4,15,800
5 32,40,000 5,40,000 27,00,000 3,56,400
6 27,00,000 5,40,000 21,60,000 2,97,000
7 21,60,000 5,40,000 16,20,000 2,37,600
8 16,20,000 5,40,000 10,80,000 1,78,200
9 10,80,000 5,40,000 5,40,000 1,18,800
10 5,40,000 5,40,000 ----- 59,400

AVERAGE COST OF CAPITAL

SR.N PARTICULAR CAPITA RATE INTERES


O L T
1 OWNED CAPITAL 81,00,000 9% 7,29,000
2 BORROWED
54,00,000 11% 5,94,000
CAPITAL
Total 13,23,000

Avg. Cost Of Capital = Interest / Capital X 100


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

(33)
= 9.8%

(34)
PROFITABILITY ANALYSIS

PARTICULAR AMOUNT
SALES 9,45,00,000
LESS:- COST OF
9,23,82,000
PRODUCTION
EBIT 21,18,000
LESS:- INTEREST 13,23,000
EBT 7,95,000
LESS:- TAX 1,88,500
EAT 6,06,500

TAX SLAB

PATICULA AMOUNT RATE AND TAX


R AMT.
EBT 9,72,000
LESS:- 1,00,000 NIL
8,72,000
LESS:- 50,000 5000 @ 10% on 50,000
8,22,000
LESS:- 20,000 @ 20% on
1,00,000
1,00,000
2,16,600 @ 30 % on
7,22,000
7,22,000
Total Taxable Amt. 2,41,600

(35)
PROJECTED OPERATING
STATEMENT

PARTICULAR YEAR 1
SALES 9,45,00,000
COST OF
OPERATION
RAW MATERIAL 9,00,48,000

UTILITIES 5,00,000

LABOUR 5,16,000
ADD:- OP. STOCK OF
RAW MATERIAL -----
LESS:- CL. STOCK OF
RAW MATERIAL -----
ADD:- OP. STOCK OF
FINISHED GOODS -----
LESS:- CL. STOCK OF
FINISHED GOODS 27,00,000
TOTAL COST 8,83,64,000
GROSS PROFIT
(Sales – Cost of 61,36,000
Operation)
INDIRECT
EXPENSES
FACTORY EXPENSES 6,56,300
ADMINISTRATIVE 4,21,700
EXPENSES
SELLING AND 2,40,000
DISTRIBUTION EXP
Total Indirect 13,18,000
Expenses
EBIT:
(Gross Profit – Indirect 48,18,000
exp)
LESS:-Interest on
Borrowed Capital 5,94,000
EBT: 42,24,000
LESS:-TAX 12,17,200
EAT: (36) 30,06,800
PROJECTED COST SHEET

PARTICULAR YEAR 1
Raw Material
Consumed
Purchase 9,00,48,0
00
Less:- Cl. Stock ---
Add:-
Direct wages 5,16,000
Utilities 5,00,000
PRIME COST (A) 9,10,64,
000
Factory Cost
Add:-
Repairs 75,000
Manager’s Salary 60,000
Supervisor’s Salary 72,000
Watchman’s Wage 24,000
Depreciation on Machines 2,00,000
Depreciation on Building 2,25,300
TOTAL FACTORY COST (B) 6,56,300
Administrative
Expenses
Add:-
Accountant’s Salary 60,000
Clerk’s Salary 24,000
Postage and Telegram Exp. 25,000
Telephone Exp. 35,000
Mis. Expenses 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
COST OF PRODUCTION 16,000
9,28,71,
Depreciation
(A+B+C) on Other FA 39,000
000
Interest
Add: on Owned Capital ,29,000
TOTAL
Op. stockADMINISTRATIVE
of Finished Goods 11,50,70
-----
EXPENSES
Less: (C) 0
Cl. Stock of Finished Goods 27,00,000
COST OF PRODUCTION 9,01,71,
OF GOODS SOLD 000

(37)
PROJECTED FINAL
ACCOUNT

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

(38)
PROFIT & LOSS ACCOUNT
DR. CR.
PARTICULARS AMT. PARTICULARS AMT.
To Repairs exp. 75,000 By Gross Profit 61,36,00
To Postage and Tele. 25,000 0
Exp. 35,000
To Telephone exp. 50,000
To Transportation 25,000
To Mis. Expenditure 80,000
To Advertising exp. 90,000
To Insurance 50,000
To Medical exp. 1,000
To Professional Tax 20,000
To Legal Exp. 36,700
To Audit Fees 50,000
To Traveling exp. 3,00,000
To Salaries to 4,80,300
employees 5,94,000
To Depreciation
To Int. on Borrowed
Capital 12,17,20
0
To Income Tax

To Net Profit 30,06,80


0
TOTAL 61,36, TOTAL 61,36,
000 000

(39)
BALANCE SHEET

LIABILITIES Amt. ASSETS Amt.


CAPITAL Land 16,10,000
Owned Capital 81,00,000 Building 20,27,700
Net Profit 30,06,800 Machinery 8,00,000
1,11,06,80 Furniture & Fixtures 85,000
Less: Drawings 0 Electric Installation 42,500
1,00,000 Telephone 8,500
1,10,06,80 Computer 24,000
SECURED LOAN 0 Boundary, Walls ,Gates 42,500
Nagrik Shakari Bank Production Dyes 34,000
Ltd Troll and other eqp. 8,500
54,00,000
CREDITORS DEBTORS
Steel Trade Ltd
TISCO Ltd 3,72,616 Shreenathji Industries 11,16,032
Steel age India Pvt. 4,17,656 ShreeKrishna Enterprise 15,15,620
Ltd ------ Ram & Ram Pvt. Ltd. 10,58,528
Kkassuma Eng. Pvt. Ltd 22,05,800
Cash at Bank 31,26,892
Cash in Hand 7,90,500
Closing Stock 27,00,000
TOTAL 1,71,97,0
TOTAL 1,71,97,0 72
72

(40)
RAW MATERIAL
CONSUMED
YEAR 1
Qty. Amt.
Op. stock
----- -----
Add: 17,80,0 9,00,48,0
Purchase 00 00
Less: Cl
stock ----- -----

PARTICULARS OF
FINISHED GOODS

Particulars YEAR 1
Qty. Amt.
----- -----
Op . balance
1,44,0 9,72,00,0
Add:- Good 00 00
Manu.
1,40,0 9,45,00,0
Less:-Sales 00 00
27,00,00
Cl. Stock 4,000
0

(41)
SCHEDULE FOR W. D.V.
OF FIXED ASSETS

PARTICULAR GROSS BLOCK DEPRECIATION NET


BLOCK

Op. Total Total Dep. W.D.V


+add. accu. During
year

Land 16,10,0 16,10,0 ----- ----- 16,10,0


00 00 00
Building ----- 2,25,300
22,53,0 22,53,0 23,27,7
Machinery 00 00 ----- 2,00,000 00

Furniture & 10,00,0 10,00,0 8,00,00


Fixture 00 00 ----- 15,000 0

Electric
installation 1,00,00 1,00,00 ----- 7,500 86,000
charges 0 0
----- 1,500
Telephone 42,500
50,000 50,000 ----- 16,000
Computer 8,500
10,000 10,000
Boundary, wall ----- 7,500 24,000
& gates 40,000 40,000
----- 6,000
Production 42,500
Dyes 50,000 50,000
----- 1,500 34,000
Trolley and 40,000 40,000
other
equipments 8,500
10,000 10,000

(42)
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 customer’s side.
• It may take time to beat the competitor’s product.

(43)
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.

(44)
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 Industrial Estate,
Rajkot.

(45)
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.

(46)
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.

(47)