GUIDED BY:DECLARATION

I, the undersigned Jay. R. Parsana a student of TYBBA hereby declare that the project work presented in this report is my own work and has been carried out under the supervision of Dr. Swati Doshi of Christ College, Rajkot. This work has not been previously submitted to any other industries or university for examination.

Place: - Rajkot Date:-

Jay R. Parsana

PREFACE
I have a great pleasure in the presentation of this report on BALL BEARING which is the practical study in TYBBA of Saurashtra University. After passing 12th standard, I opted for BBA, because I found a greater scope to learn management techniques through this course and having studied since past two years in FY and SY, my task was rather fulfilled. This year of my TYBBA has given me an opportunity to plan a project for myself so that I can setup a real plant in near future. Thus the project report presented by me helps me to develop entrepreneurship skills.

ACKNOWLEDGEMENT
It is taking the responsibility regarding the accomplishment of project and showing that I am happy to submit this report along with thanking all those persons who are involved in the preparation of the project. I would like to thank our project guide Dr. Swati Doshi of Christ College, Rajkot who helped me to get the correct information about the project to be undertaken.

Jay R. Parsana

INDEX
SR. NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 PARTICULARS PAGE.NO

Introduction Project at Glance Partners Background Organizational Structure Justification of Location Product Details Market Potential Raw Materials Machines Manufacturing Process Production Capacity Schedule Staff and Labour Details Financial Details Cost of Production Total Working Capital Requirement Total Project Fund Sources of Finance Interest on Borrowed Capital Depreciation

20 21 22 23 24 25 26 27 28 29

Annual Cost of Production Sales Forecast Break Even Analysis Cost of Capital Return on Investment Profitability Analysis Projected Operating Statement Projected Cost Sheet Projected Balance Sheet Particulars Consumed of Raw Material

30 31 32 33 34 35 36 37 38

Particulars of Finished Goods Schedule for Fixed Assets Schedule for Factory Overhead Schedule for Selling and Administrative Overhead Risk Factors Name and Address of Raw Material Suppliers Name and Address of Machineries Supplier Disclosure of Significant Accounting Policy Conclusion

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
Name of Unit Registered Office

JP Bearings

G-777, GIDC Metoda, Lodhika, Dist.- Rajkot Gujarat India. Factory Location G-777, GIDC Metoda, Lodhika, Dist.- Rajkot Gujarat India. Form of Organization Sole Proprietorship
Name of Promoter Name of Product Name of Brand Size of Unit SSI Registration No. Cost of Product

Jay Ravjibhai Parsana Ball Bearing JP Small Scale Industries 10007 Rs. 675 for 120 mm diameter Owners Capital 60% Rs 81 lakhs Borrowed Capital 40% Rs 54 lakhs from Nagrik Shakari Bank Ltd. 9.8% 15.69%

Means of Finance

Cost of Capital Return on Investment

Since return on investment is greater than cost of capital, the project is viable.
9

PARTNERS BACKGROUND
Name Age Residential Address

Jay Ravjibhai Parsana 20 years Jay 9, Indraparsthnager, Nr. Panchvati Soc. Main Road, Rajkot: - 360 004. JP Bearing G-777, GIDC, Metoda, Lodhika, Dist Rajkot, Gujarat India. Under Graduate BBA Chairman 60% of Total Capital

Registered Office Address

Qualification Role in Unit Financial Contribution

10

ORGANIZATIONAL STRUCTURE
Chairman Manager

Supervisor Salesman Skilled Workers Watchman Semi Skilled Workers Unskilled Worker

Accountant

Peon / Clerk

11

12

JUSTIFICATION OF LOCATION
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

13

PRODUCT DETAILS
The bearing. day life mobiles, basic product of the unit is ball It is a product which is used in day to in every industrial machines, auto 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 JP.

14

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.

15

16

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:-

1) 2) 3)

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. 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:-

4)

17

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.

5)

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.

6)

Lathe Machine:This machine is used for turning the bearing ring which is not accurate in size when it comes from forging. 7)Press machine for assembling cage into bearing ring and assembling machine for assembling ball into cage.

8)

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

18

19

MANUFACTURING PROCESS
The main raw material used manufacturing of ball bearing is as follow:for

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. 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.

20

 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.

21

22

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 of ball bearing

STAFF AND LABOUR

Factory staff Skilled workers Semi skilled workers Unskilled workers Administrati ve staff Manager Supervisor Clerk Accountant Salesman Watchman 3 5 7 1 2 1 1 1 1

23

Fixed Asset s
Land
Particulars Land Sq.mt 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 machine --Qty . 1 1 1 1 4 2 2 Rate 1,50,0 00 2,00,0 00 90,000 30,000 25,000 1,00,0 00 65,000 10,000 Total Cost 1,50,000 2,00,000 90,000 30,000 1,00,000 2,00,000 1,30,000

24

Other Assets
Particulars Furniture Fixtures Electrification Installation Charges Computer Telephone Production dyes Boundary Gate Trolly and other handling equipment wall & 10,000 10,000 1 2 1 50,000 40,000 5,000 40,000 50,000 & Qty. Rate 1,00,00 0 50,000 40,000 10,000 40,000 50,000 Total Cost 1,00,000

Total Fixed Assets

NO. 1. 2. 3. 4. 5. 6. PARTICULAR Land (2300sq mts @700) Building (7510 sq feet @ 300} Boundary Wall & Gate Plant & Machinery Furniture & Fixtures Electrification Charges & Installation 50,000 AMOUNT 16,10000 22,53,000 50,000 10,00,000 1,00,000

25

7.

Computer, Telephones, production dyes and trolly Total

1,00,000 51,63,000

COST OF PRODUCTION
RAW MATERIALS
PARTICULAR PER PER MONTH AMT (RS) PER YEAR QTY AMT (RS) 840000 00 720000 518400 0 144000 14400 0 75040 00 90048 000

UNIT QTY (RS) FORGED RING OF SAE 52100 CAGE BALLS BOX FOR PACKING 70/5/3/1/kg 1000 0 units 1200 0 1440 00 1200 0 TOTAL

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

STAFF AND LABOUR

paticulars
MANAGER NO. OF PERSO N 1 SALARY 5000 PER MONTH 5000 PER YEAR 60,000

26

SUPERVISOR SKILLED WORKER SEMI SKILLED WORKER UNSKILLED WORKER WATCH MAN ACCOUNTANT SALES MAN CLERK TOTAL

2 3 5 7 1 1 1 1

3000 3500 3000 2500 2000 5000 5000 2000

6000 72,000 10,500 1,26,000 15,000 1,80,000 17,500 2,10,000 2000 24,000 5000 60,000 5000 60,000 2000 24,000 68,000 81,600 0

UTILITIES
PARTICULAR WATER FUEL ELECTRICITY TOTAL PER YEAR 50,000 1,00,000 3,50,000 5,00,000

27

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

TOTAL WORKING CAPITAL REQUIREMENT

SR. NO 1 2 3 PARTICULARS RAW MATERIALS STAFF AND LABOUR UTILITIES AMOUNT 9,00,48,00 0 8,16,000 5,00,000

28

OTHER EXPENSES TOTAL

5,37,700 9,19,01,7 00

TOTAL CAPITAL INVESTMENT

SR. NO 1 2 3 PARTICULAR FIXED COST WORKING CAPITAL ( 1 MONTH) CASH IN HAND TOTAL AMOUNT 51,63,000 76,58,475 6,78,525 1,35,00,000

SOURCES OF FINANCE

29

SR NO. 1 2

PARTICULAR OWNERSHIP CAPITAL (60%) BORROWED CAPITAL (40%) Loan borrowed form Nagrik Shakari Bank Ltd. @ 11% interest rate TOTAL

AMOUNT 81,00,00 0 54,00,00

1,35,00, 000

INTEREST ON CAPITAL
SR. NO 1 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% INTERST AMOUNT 7,29,000

11%

5,94,000

13,23,0 00

30

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

ANNUAL COST OF PRODUCTION

SR. NO 1 2 3 4 5 6 PARTICULAR RAW MATERIAL UTILITY SALARIES OTHER EXPENSES INTEREST ON CAPITAL DEPRECIATION TOTAL AMOUNT 9,00,48,00 0 5,00,000 8,16,000 5,37,700 13,23,000 4,80,300 9,37,05,0 00

31

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 AMOUNT 4,80,300 13,23,000 4,08,000 3,11,310 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

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 9,11,82,390

32

Variable Cost per unit = Total Variable Cost / number of units = Rs 9, 11, 82,390 / 1, 44,000 unit = Rs 633.21 per unit

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.)

33

= B.E.P. x S.P./unit = 60,364 x675 = Rs.40,745,700

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

RETURN ON INVESTMENT
ROI = EBIT / Cost of Capital = 21,18,000 / 1,35,00,000 = 15.69% 34

PROFITABILITY AND 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

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

35

FIXED ASSET TURNOVER RATIO

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

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.

36

PROJECTED OPERATING STATEMENT

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: 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 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 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

6,56,300 4,21,700 2,40,000 13,18,000

6,67,014 4,62,085 2,65,715 13,94,814

6,77,729 4,94,472 2,91,429 14,63,630

37

(Gross Profit Indirect exp) LESS: Interest on Borrowed Capital EBT: LESS: TAX EAT:

48,18,000 5,94,000 42,24,000 12,17,200 30,06,800

26,27,186 5,34,600 20,92,586 5,77,776 15,14,810

31,64,370 4,75,200 26,89,170 7,56,751 19,32,419

PROJECTED COST SHEET

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. YEAR 1 9,00,48,00 0 --5,16,000 5,00,000 9,10,64,0 00 75,000 60,000 72,000 24,000 2,00,000 2,25,300 6,56,300 YEAR 2 10,29,12, 000 --5,16,000 5,50,000 10,39,78 ,000 85,714 60,000 72,000 24,000 2,00,000 2,25,300 6,67,014 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

60,000 24,000 25,000

60,000 24,000 28,571

60,000 24,000 32,143

38

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

35,000 25,000 90,000 50,000 1,000 20,000 36,700 16,000 39,000 7,29,000 11,50,700 9,28,71,0 00 ----27,00,000 9,01,71,0 00

40,000 28,571 1,02,857 57,143 1,143 22,857 41,943 16,000 39,000 7,29,000

45,000 32,143 1,15,714 64,286 1,286 25,714 47,186 8,000 39,000 7,29,000

11,91,08 12,23,472 5 10,58,36 ,099 27,00,000 27,00,000 10,58,36 ,099 11,87,73, 201 27,00,000 27,00,000 11,87,73, 201

39

Selling and Distribution Expenses Add: Salesmans Salary Transportation exp. Advertising exp. Traveling exp. COST OF SALES SALES PROFIT 60,000 50,000 80,000 50,000 9,04,11,000 9,45,00,000 40,89,000 60,000 57,143 91,429 57,143 10,61,01,814 10,80,00,000 18,98,186 60,000 64,286 1,02,857 64,286 11,90,64,630 12,15,00,000 24,35,370

PROJECTED TRADING ACCOUNT

YEAR 1
40

DR. PARTICULARS To Opening stock To Purchase To Direct Wages To Utilities To Gross Profit TOTAL

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

CR. 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 AMT. 27,00,000 10,29,12,0 00 5,16,000 5,50,000 40,22,000 11,07,00, 000 TOTAL 11,07,00, 000 PARTICULARS By Sales By Closing Stock CR. AMT. 10,80,00,0 00 27,00,000

YEAR 3
DR. PARTICULARS To Opening stock To Purchase To Direct Wages To Utilities To Gross Profit TOTAL CR. AMT. 27,00,000 11,57,76,0 00 5,16,000 5,80,000 46,28,000 12,42,00, 000 TOTAL 12,42,00, 000 PARTICULARS By Sales By Closing Stock AMT. 12,15,00,0 00 27,00,000

41

PROJECTED PROFIT AND LOSS ACCOUNT

YEAR 1
DR. PARTICULARS AMT. To Repairs exp. 75,000 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 Borrowed Capital 12,17,20 0 To Income Tax To Net Profit TOTAL 30,06,80 0 61,36,0 00 PARTICULARS By Gross Profit CR. AMT. 61,36,00 0

TOTAL

61,36,0 00

42

YEAR 2
DR. PARTICULARS AMT. To Repairs exp. 85,714 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 5,77,776 Borrowed Capital To Income Tax To Net Profit TOTAL 15,14,81 0 40,22,0 00 CR. PARTICULARS By Gross Profit AMT. 40,22,00 0

TOTAL

40,22,0 00

43

YEAR 3
DR. PARTICULARS AMT. To Repairs exp. 96,429 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 7,56,751 Borrowed Capital To Income Tax To Net Profit TOTAL 19,32,41 9 46,28,0 00 CR. PARTICULARS By Gross Profit AMT. 46,28,00 0

TOTAL

46,28,0 00

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 54,00,000 30,06,800 30,06,800 3,72,616 4,17,656 -----48,60,000 15,14,810 15,14,810 8,41,803 61,620 3,45,140 43,20,000 19,32,419 19,32,419 6,13,490 5,04,919 10,12,514 YEAR 1 81,00,000 YEAR 2 81,00,000 YEAR 3 81,00,000

1,42,90,2 72

1,42,08,5 63

1,45,50,9 23

45

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 YEAR 1 YEAR 2 YEAR 3 Electric Installation 42,500 35,000 27,500 QTY AMT QTY AMT QTY AMT Telephone 8,500 7,000 5,500 Computer 8,000 --------- -----Op. stock --------- 24,000 --------Boundary, Walls 42,500 35,000 27,500 Add: ,Gates 28,000 22,000 Purchase 17,80,000 9,00,48,000 34,000 10,29,12,00 2,28,857 11,53,76,000 2,03,429 Less: Cl stock -------------0 ----Production Dyes 8,500 7,000 ----5,500 ----Troll and other eqp. DEBTORS Shreenathji Industries ShreeKrishna Enterprise Ram & Ram Pvt. Ltd. Kkassuma Eng. Pvt. Ltd Cash at Bank Cash in Hand Closing Stock TOTAL 11,16,032 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 3,59,321 5,12,121 7,54,612 ----50,45,619 11,49,150 27,00,000

ASSETS

1,42,90,2 72

1,42,08,5 63

1,45,50,9 23

PARTICULARS OF RAW MATERIAL CONSUMED

PARTICULARS OF FINISHED GOODS

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

46

Op . balance Add: good manu. Less: Sales

----1,44,00 0 1,40,00 0 4,000

------9,72,00,00 0 9,45,00,00 0 27,00,000

4,000 1,60,00 0 1,60,00 0 4,000

27,00,000 10,80,00,00 0 10,80,00,00 0 27,00,000

4,000 1,80,00 0 1,80,00 0 4,000

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

27,00,000

Cl. Stock

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

47

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

SCHEDULES FOR FACTORY OVERHEADS

PARTICULARS Repairs Managers Salary Supervisors Salary Watchmans Salary Depreciation on Machinery AMOUNT 75,000 60,000 72,000 24,000 2,00,000

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Depreciation on Building FACTORY COST

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 TOTAL 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 11,50,70 0

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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NAME AND ADDRESS OF 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.

NAME AND ADDRESS OF 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 JP BEARING, I have discussed all financial data and other relevant information. The market of JP BEARING 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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