CHAPTER 1 INTRODUCTION

1.1 INTRODUCTION TO SSI: The SSI (Small Scale Industry) today is immense
for the growth of the country. Small scale industries are the industries which are run with the help of hired labour and which also use some simple machine and power. The investment scale in this industry varies from 5 lakhs to 1 crore for the fixed assets. Irrespective to number of workers engaged is called small cale unit. In India these type of industries are promoted to meet with the problems of excess population and unemployment so the government of India promotes entrepreneur to step up small scale industries by aiding him by giving loans, subsidiaries, land,guidance etc. The strategy adopted by the government is: 1. Public entrepreneurship should remain confirmed only to those industries and sectors where private enterprise, individual or corporate, is generally not attracted, Existing public entrepreneurship be improved through better management and by putting relatively greater emphasis on research and development. There is need to streamline the R & D wing of public sector enterprises. 2. All possible efforts be made very seriously (not casually) for the development of an industrial culture. It should be realized that the central core of entrepreneurship is the motive force since by its very nature, entrepreneurship implies positive action and initiative, Motivated individuals with the right kind of

combination of abilities and attributes can pursuer their goal with unremitting courage and enthusiasm. 3. There is need to develop management education and industrial training. 4. The development of backward regions/areas constitutes a new challenge. Programs for their development be drawn up and should be effectively implemented. 5. Adequate measures are a must for mobilizing and fostering the entrepreneurial talent in the country. In this context, it should be realized that entrepreneurs are not the gift of a particular class. 6. Economic administration by the sate should be improved and made more effective so that economic policies may fully achieve their objectives in the overall interest of the economy. 7. Financial institutions should provide adequate and timely credit and technical assistance, especially to the small and medium sized enterprises. They may also impart knowledge about the needs of the economy and they should file their massive data in terms of growth of new entrants or entrepreneurs in the field of industry.

1.2 PROCEDURE TO START A SMALL SCALE INDUSTRY:

Starting of a small scale industries is not a very easy task. at the same time it is not difficult so, if different factors are considered before taking a decision to start it. For starting , the first and most important work is to select a suitable sit and then to make a proper scheme and yet approve.

Procedure to start small scale industry consist of following important steps-

1.2.1 GETTING STARTED : An entrepreneur desiring to set up an industry must first formulate comprehensive setting the industry for its success. For this, he should be confident, enthusiastic and realizing. He should therefore make himself familiar with the permanent policies and procedures, assistants and facilities he can get from whom and how.

1.2.2 SELECTION OF INDUSTRY: Selection of a suitable place for an industry is the key to success. Different factors for the selection of the site are availability of the land , labor ,raw material, power and transport facilities and nearness to the market. Type and size of industry should be decided by the market study, quality and price of other product with which proposed item be in competition. Demand and supply of position of the product should be before selecting the type of industry. Owner should make himself conversant with all acts, rules of central and state governments etc.

1.2.3

PREPARATION OF SCHEME: After deciding the product to be manufactured and the place of industry , a detailed scheme is prepared .this scheme include number of machines ,their approximate cost, requirements of land and building ,number of workers and other staff ,their salaries and estimated production cost ,expected profit, proposed factory layout and plant layout.

CHAPTER 2 ENTREPRENUER
Entrepreneur is the owner of the business who contribute the capital and bear the risk of uncertainties in business life. He organizes, manages, assumes the risks and takes the decision about the enterprise. He takes all the steps to establish undertaking, coordinates the various factors of production, and gives it a start. He should be able to evaluate, business, opportunities, together all the necessary resources and ensures the success of the enterprise.

2.1 CLASSIFICATION OF ENTREPRENEUR: Entrepreneur views are

broadly classified into three groups: Risk bearer Organizer Innovator

2.1.1 ENTREPRENUER AS A RISK BEARER: According to Richard Cotillion, a rich man living in France, was the first who introduced the term entrepreneur as an agent who buys the factory production at certain price in order to combine them into product with a view to selling it at certain price. He illustrated the framer who pays out contractual income, which are certain to landlord, labour and sells at price that are uncertain. Thus they too are risk bearer agent of production. Uncertainty is defined as the risk which cannot be insure against and incalculable.

2.1.2 ENETREPREPNUER AS AN ORGANIZER: According to Jean-Baptize, Entrepreneur is a function of co-ordination, organization and supervision. According to him, an Entrepreneur is one who combines the land of one, the labor of another, capital of one another and thus produces product. By selling the product in the market he pays interest in capital, rent on land, wages to labor and what remains in his profit.

2.1.3 ENTREPREUER AS AN INNOVATOR: According to Joseph who has introduced new combination of factors of production. He said, it may occur in any one of the following five forms: 1. The introductions of new product in market. 2. The instituting of new production technique, which is not yet tested by experience in the branch of manufacture concern. 3. The opening of new market into which the specific product has not previously entered. 4. The discovery of new source of supply of raw material. 5. The carry input of new form of organization of any industry by creating of monopoly position or breaking up of it.

2.2 CHARACTERISTICS OF AN ENTREPRENEUR: An entrepreneur

should have following characterstics: Desire of high achievement.

Hardworking, willingness Highly optimistic Independence Foresight Good organizer Innovative Energetic Flexible Knowledgeable Resourceful and should be able to take initiative.

2.3 FUNCTIONS OF ENTREPRENEUR: The function of an entrepreneur are

as following: Idea generation Determination of business objectives Product analysis and market research Determination of form of ownership of organization completion of promotion facilities Raising the necessary funds Proper use of machine and material Recruitment of men.

CHAPTER 3 FINANCIAL REQUIREMENT

Since Independence Government of India has been giving all possible encouragement of SSI. A number of organizations have been set up by the Government of India to provide assistance and incentive to small scale industries. These packages of assistance are provided to SSI by a large number of organizations operating at national and State Level. Development programs are being carried out at two levels: 1. 2. National level State level

Agencies which work at National Level are : Small Scale Industrial Board(SSIB) Small Scale Industries Development Organization National Small Scale Industries Corporation

Agencies which work at State Level are: State Directorate of Industries District Industrial Centre(DIC) State Small Industrial Corporations(SSIC) State Financial Corporations Commercial Banks Small Industries Development Bank of India(SIDO)

3.1 DEVELOPMENT PROGRAMMES AT NATIONAL LEVEL

3.1.1 SMALL SCALE INDUSTRIAL BOARD(SSIB): It is all advisory body and comprises State Government Ministers Offices and representatives of several Institutions and associations. Its functioning is to plan, advice and coordinate the activities of Central and State Government. As such it does not render direct help to entrepreneurs. However, it helps the Government in involving new policy and programme for small scale sector.

3.1.2 SMALL SCALE INDUSTRIES DEVELOPMENT ORGANIZATION (SSIDO): Its Headquarter Nirman Bhawan, New Delhi headed by the Development Commissioner (SSI) has a network of Small Industries Service Institute (SSIs)one in each State which helps in economical, technical, industrial information service, management consultancy services, training and marketing etc.

3.1.3 NATIONAL SMALL SCALE INDUSTRIES CORPORATION (NSSIC): Its headquarters at New Delhi and Regional Offices at Kolkata, Mumbai,Chennai, Guwahati etc. FACILITIES PROVIDED: 1. 2. 3. 4. Supply of machines and equipment on hire purchase Distribution of scare raw material imported components. Marketing assistance Assistance to SSI in securing orders for railway and defense

5. within.

Operating a credit guarantee scheme for those units which are registered

3.2 DEVELOPMENT PROGRAMMES AT STATE LEVEL:

3.2.1 STATE FINANCIAL CORPORATIONS: Almost every state has its own financial corporation to provide machines and long term loans to small and medium scale industries. Amount of loan varies from Rs. 5,000 to Rs. 6,00,000 and these loans are repayable in equal installments spread Over a period of 10-12 years. Important schemes of financing SFC are 1. A loan scheme for financing of village and cottage industries, Under this

scheme they are financed to the extent of Rs. 25,000 and the interest rate is very low. 2. 3. Assistance to tiny units-these grant assistance up to Rs. 2.00 lakhs. Scheme for technical entrepreneur-in order to encourage self employment

these corporations provide financial assistance up to Rs. 2.00 lakhs at very low interest rate to such technical entrepreneurs who have acquired a diploma or degree in any discipline of engineering. 4. 5. Loans to hotel industry. Scheme for SC/ST-Grant financial assistance to SC/ST entrepreneurs at a

nominal margin such rates are charged at the rate of 10% 6. Scheme for physically handicapped-these provide financial assistance u

3.2.2 COMMERCIAL BANKS: SBI and its subsidiary banks and other Nationalised banks provide liberal term loans and working capital to small scale entrepreneurs and these loans are advanced for purchase of machine and material and to the technical entrepreneurs to encourage self employment. Specialized institutes like-Central Institute of Tool Design. Hyderabad, Central Tool Room, Ludhiana and Kolkata, Central institute of Hand Tools Jalandhar, Institute for Design of Electrical Measuring Instruments (IDEMI) Mumbai, Integrated Trading center, Nilokheri, National Institute of Small Extension, Hyderabad and National Institute for Entreprepreneurship and Small Business Development. They conduct special courses, programmes, workshops, training programmes for the benefit of small scale industries.

3.3 CREDIT SUPPORT: Credit is the prime input for sustained growth of small scale sector and its availability continued to be a matter of concern. To provide credit support to the various SSI units various policies have been formulated by the GOI. Various institutes like SFC, SIDC, NISC, SIDBI are providing financial support to various SSI units. OVERVIEW OF THE STEPS TAKEN BY THE GOI ARE:1) Composite loans limit raised from Rs. 10 Lakhs. 2) In the National equity fund scheme (NEF) the project cost limit has been raised from RS. 25 lakhs to RS. 50 Lakhs. 3) Soft loan limit restrained to 25% of the project cost. 4) Task Force is appointed by the Department of Economic Affairs to suggest revitalization/restructuring of the State Financial Corporation.

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CHAPTER 4 MARKETING
4.1 CONCEPT OF MARKETING
Studies reveal that different organizations have different perceptions of marketing and these different perceptions have led to the promotion of different concepts of marketing. It is found that at least Four distinct concepts of marketing have guided and are still guiding terms. They are: Exchange concept Production concept Product concept Sales concept

We will discuss these concepts in detail as below: 4.1.1 EXCHANGE CONCEPT: The exchange concept of marketing as the name indicates holds that the exchange of a product between the seller and buyer is a central idea of marketing. But a proper serutiny of the marketing would readily reveal that marketing is very much broader than exchange. The other important aspect of marketing such as concern for the customer, the generation of the venue satisfaction, the creative selling and integrated action for serving the customer get completely overshadowed in this concept of marketing.

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4.1.2 PRODUCTION CONCEPT: According to the production concept marketing is a merely related to production. They believe that marketing can be managed by managing production. The concept holds that consumers would as a rule support these products that are produced in a great volume and allow unit cost organization voting for this concept are influenced by a drive to produce all that they can. They do achieve high production efficiency and a substancial reduction in the unit cost of production. Yet they often do not get customers as they expected. Customers after all are motivated by a variety of considerations in their purchases. Easy availability and low cost are not the only parameters governing the customers buying action and the production concept thus fails to drive as the right marketing policy for the enterprise.

4.1.3 PRODUCT CONCEPT: The product concept is somewhat stiff form the production concept whereas the production concept seeks to win markers and profits v/a high volume of production and low unit cost of production. The product concept seeks to achieve the same result via product excellence, improved products, new products and ideally designed and engineering products. It also places emphasis on quality assurance. Organizations that subscribe to the product concept of marketing believe that consumer goods automatically vote for products of high quality they spent considerable energy. Time and money on research and development brings in a variety of new products. They do not bother to study the market and the consumer in depth. They get totally embraced with the product and almost forget the consumer for whom the product is actually meant. They fail to find what the consumers actually need and what they would gladly accept.

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4.1.4 SALES CONCEPT: The sales concept maintain that a company cannot except its products to get picked up automatically by the customers. The company has to consciously promote and push its products heavy advertising, high power personnel selling, large scale sales promotion, heavy price discounts and strong publicity and public relations are the normal tools used by the organization that rely on this concept. Evidently the sales concept too generates marketing myopia just as a exchange concept, production concept and product concept. It leads to a wrong or inadequate understanding of the market and consequently a total failure in the market place.

4.2 IMPORTANCE OF MARKETING TO THE SOCIETY:

1. Marketing helps to achieve, maintain and raise the standard of living marketing brings new variety of useful and quality goods to the consumer and better marketing gives soon for mass production. 2. Marketing increase employment opportunities. 3. Marketing helps to increase national income. 4. Marketing is a connecting link between the consumer and the producer. 5. Marketing helps to maintain economic stability. Economic stability is the sign of any efficient and dynamic economy and economic stability is maintained only when there is a balance in supply and demand. If production is more than demand the access goods cannot be sold at acceptable prices than the stocks of goods would be picked up and there would be glut all the market resulting fall in price. Similarly, if production is less than demand prices will shoot up resulting in higher prices. In

13

such a situation marketing maintains the economic stability by balancing production and consumption.

4.3 STUDY IN MARKETING MANAGEMENT

1. Product Planning 2. Sales Forecasting 3. Pricing Policy 4. Distribution Strategy 5. Role of Advertising (Personnel Selling) 6. Quality We will discuss now in details as below: 4.3.1 PRODUCT PLANNING: Product planning may be defined as the act of marketing out and supervising the search. Screening, development and commercialization of new products, modification of existing lines. Product planning involves three important considerations:1. The development and introduction of new ideas 2. The modification of exiting lines as may be required in terms of changing consumers need and preferences. 3. The discontinuance of elimination of marginal or unprofitable products.

4.3.2

SALES FORECAST:- A sales forecast is an estimate for the amount or unit sales for a specified future period under a proposed marketing plan or programme. As defined by the American Marketing Association it is an estimate of sales in physical units for a specified future period under a

14

proposed marketing plan or programme and under an assumed set of economic and other forces outside the unit for which the forecast is made. Marketing Of A Proper Sales Forecast Requires An Assessment Of: 1) 2) The outside uncontrollable force likely to influence the company sales. The internal proposed changes in the marketing strategies and tacties of the

company which are likely to affect the sales. Sales forecast can be for a specified product line or it can be for a market as a whole or for any portion of it. According to the time period, the sales forecast can be divided under three types:

1. SHORT RUN FORECAST:-Which generally extends from a few weeks to about six months or at most one year in future. This is mostly done by companies as dayto-day forecasts for their production control needs and to plan for long term financial needs.

2. MEDIUM RANGE FORECAST:- Which extends from one year to about four years into future. This type of forecasting is important for a) Estimating profits, budgeting expenses etc, b) Determining dividend policy c) Deciding rate of maintenance expenditure d) Determining schedule of operations.

15

3. LONG RANGE FORECAST:-extending to at least five years into future and in case we of really large organisations extending over a longer period up to ten years or even more.

It is useful in the following ways:1) Anticipating the magnitude and timing of capital expenditures required for new facilities in the future. 2) Determining probable trends and range of cash inflows from sales. 3) Estimating companies long range personnel needs. 4) Highlighting future problems.

4.3.3 PRICING POLICY :- Pricing is a very critical decision. Pricing decisions are not easy to make. Hence sound pricing policies must be adopted to ensure that the organization secures satisfactory profits. For pricing decisions a marketing manager has to be familiar with economic concepts useful decisions. He has to consider various pricing factors which influence pricing apart from costs such as the customers characteristics, the economic product characteristics, competitive environment and Governmental control wherever applicable. The price of the product materially affects the demand for it as well as the organization competitive ability for expenditure if the quality of the product is to be improved this may be possible only if the customers are willing to pay a higher price for it. Besides, if the product is not properly priced there might be a reluctance from the channels of distribution.

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4.3.4 DISTRIBUTION STRATEGY: Distribution may be defined as an operation or a series of operation, which physically bring goods manufactured or produced by only particular manufacturers into the hands of the final consumers to the users. A distribution strategy consists of distributing or sub-dividing the total products of a manufacturer on a geographical basis to various specific markets. There may be a state market, a National Market or even a world wide market for the production while defining a strategy we have to deal with two aspects. First, is the organizational aspects, it is concerned with how and through what channels we should distribute. For this general marketing policy is responsible for deciding the various channels we should distribute. For this general marketing policy is responsible for deciding the various channels for distribution. Secondly, is the operational aspect of distribution or the physical distribution, it is concerned with moving of goods from one place to another, including the warehousing storage and transportation costs as well includes.

4.3.5 ADVERTISING: To counter the markets at National and International level the GOI set up various institutes like:1) Export Credit Guarantee Corporation Ltd. (ECGC) 2) State Trading Corporation. (STC) 3) Trade Development Authority. 4) National small Industries Corporation.(NSIC)

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CHAPTER 5 ORGANIZATION
5.1 ORGANIZATIONAL STRUCTURE OF SSI: There are 28 SISIs and 30
Branch SISIs set up in State Capital and other industrial cities all over the country. The main activities of these institutions are as follows:1) Assistance/consultancy of prospective entrepreneurs. 2) Project profiles. 3) Entrepreneurship development programmes. 4) Motivational campaigns. 5) Production index. 6) Management development programmes. 7) Energy conservation 8) Quality control and up gradation. 9) Export promotion. 10) Market surveys 11) Intensive technical assistance.

5.2 ORGANIZATIONS UNDER SSI:1) Regional Testing Centers (RTCs) 2) Field Testing Stations (FTSs) 3) Tool Rooms/Tool Design Industries (TRs/TDs) 4) Training institutes: 18

National Institute of Small Industry Extension Training (NISIET) National Institute for Entrepreneurship and Small Business Development

(NIESBUD), New Delhi. Integrated Training Center (Industries), Nilokheri (Haryana)

5) Product-cum-Process Development Centers (PPDCs) Six centers are in existence. These are:-Firozpur for glass industry. -Kannauj for essential oils. -Meerut for sports goods and leisures time equipments. -Agra for foundry and forgings -Ramnagar for electronic industries -Mumbai for electrical measuring instruments The main motive of these centres is to upgrade the technology of the technology of the manufacturer and help in energy conservation.

5.3 TRAINING INSTITUTE :

All the training institutes mentioned above are autonomous body and an autonomous body and are under the administrative control of the office of DC (SSI). Their objective is to identify and motivate traditional/ non traditional entrepreneurs and to provide training at the national and international level. These institutes provide training by imparting seminar and work shop on topical issues. The integrated training center(industry), nilokheri is only institute that impart training to the junior field staff i.e. investigator / SIPOs to expose to

19

and educate them in the programmes and policies of development and promotion of small industries. At present its training consists of courses like 1) Rewarding of electric motors and house wiring. 2) Repairs to diesel engine and agricultural water pumps. 3) Servicing and repair to automobiles ( cars and scooters).

PROJECT AT GLANCE

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1. 2. 3.

Name Name of Director Address

Singh Co. Limited Jagbir singh Singh Co. Limited 2543/7 , Industrial area, OKHLA , NEW DELHI . 27-02-2008 Small scale industry Electric motor About 7,700 pieces of electric motor are produced Per annum of 308 working days based on 16hrs a day. Electric motor is the must need of the many industries and in houses to get driving power . Manufacturing process consist of casting of motor frame and bearing plate, turning and boring operation, stamping, grinding operation, electric winding and inspection etc. 24 No pollution of whatsoever nature is involved in the manufacturing process.

4. 5. 6. 7.

Date of incorporation Size Product Details about the project

8.

Marketing aspects

9.

Manufacturing process in brief.

10. 11.

Employment Pollution

LOCATION OF UNIT
It is planned to start the unit in Okhla industrial area in Delhi which is about 25 Km from Old Delhi which is the biggest market in Asia for electrical goods.

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SITE SELECTION
The proposed location of the plant is INDUSTRIAL AREA, OKHLA, NEW DELHI is selected on the basis of following consideration: 1. Plant location is nearest to OLD DELHI which is the biggest market in ASIA for electrical goods. 2. Government is providing this region as new industrial area. Hence this region possesses all the facilities which an industrial area needs. 3. Govt. provides proper electricity at cheap rate. 4. Plant layout involves arranging and coordinating the physical plant facilities in a pattern that effects the maximum efficiency in the combination of man, machine, and material for operation of any unit of business.

INTRODUCTION AND USE OF PRODUCT

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The invention of induction motor by Tesla in 1885 and its subsequent commercial development gave us a simple, cheap and robust type of motors which satisfied most of the requirement of house and industry now time. Specially designed for the highest level of perfomance, we offer our electric motor (single phase induction motor) that are made from high quality material to ensure long service life. Electric motor is a machine which convert electrical energy into mechanical energy. Their enduring designs and quality construction make them durable performers in any environment and economically priced. Our exclucive electric motor is light in weight and provide maximum efficiency.

Product Features
Single-phase induction motor has no inherent starting torque , and some special devices have to be incorporated for starting. Tough and lightweight. Elegant and ergonomically designed. Shock proof , weatherproof and virtually maintenance free.

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 Attractive colors.. Versatile utility: ideal for homes, offices, restaurants, shops, factory, etc. Superior quality Durability and reliability Excellent finish Cost effective Packaging: Durable and safe packaging as per the requirements Delivery: Immediate

MARKET POTENTIAL
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The requirement of electric drive for low power constant speed apparatus such as small machine tool , domestic apparatus and agricultural machinery where three phase supply is not available has led to a large demand for single-phase induction motors with size ranging from a fraction of a KW to about 5 KW . We need large no. of drive to be operated at different and variable speeds. The desired change in speed is accomplished by taking proper action on the drive motor or on the transmission, single phase induction motors are most suitable for moderate range control and are thereforeindispensable for many adjustable speed drives.

PRODUCTION PROGRAMS: The scheme is prepared on the basis of double shifts working and 308 working days in a year. Interest on loan from bank on fixed capital is taken as 9 % p.a. Interest on loan from bank on working capital is taken as 12% p.a. The raw material prices are taken on the basis of current price prevailing at the time of preparation on the report. Construction cost has been taken on the basis of estimate given by the Architect. No pollution control measures are required except exhaust fan.

SCOPE
Starting a manufacturing unit of the MOTOR MANUFACTURING industry seems to have quite good scope on account of the following: 1. The plant is not only reserved for a small sector but also for a medium and large sector industry which is good for future expansion. 2. 3. mode. Manufacturing of this item need simple machine tools. This industry does not need huge capital investment at the

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4. 5.

There are few manufacturing units in the area, so there is no heavy competition exists at present condition. The demand of this item rapidly increases with the time.

SPECFICATION OF PRODUCT
Electric Motor

Type Power R.P.M

Single phase induction motor 4 Horse Power Approx 370 rpm Single 1158 Frame with ball bearing

No. of output shaft Frame -

26

Volt

230 Volt

PROCESS FLOW CHART

Casting of body and bearing plate

Boring and turning on lathe

Ring welding inside the body

Electrical winding of stator

Preparing of rotor shaft

Rotor stamping

Motor fitting

Inspection

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ENTRY

OFFICE

STORE

INSPECTION AND PACKAGING

WORK SHOP

FOUNDARY SHOP

FITTING SHOP

PLANT LAYOUT: -

GENERATOR ROOM

WINDING SHOP

WELDING SHOP

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COST ANALYSIS :1) LAND COST: Land Cost {Area = 40m x 40m = 1600 Sq. m Rate per Sq. m = Rs.1500 Cost of Land = 1500 x 1600 = Rs. 24,00,000} Total Land Cost Rs. 24,00,000 Rs. 24,00,000

2) BUILDING COST: Material (Cement, Sand, Tile etc.) Wooden doors, Main Gate & Shutters Foundation Labour Others Total building Cost Rs. 4,50,000 Rs. 2,00,000 Rs. 55,000 Rs. 35,000 Rs. 10,000 Rs. 7,50,000

3)RAW MATERIAL COST: RAW MATERIAL INCLUDE : Cast iron, electrical winding wire, rotor shaft, rotor stamps, stator, paint, etc. Total Raw Material Cost = Rs . 12,840,000. Raw Material coming in 12 installments So cost of raw material per month = Rs. 10,70,000.

4) MACHINERY AND EQUIPMENTS: S.N o Machinery and equipment Price No. of piece Total value (Rs.)

29

Lathe machine

12,00,000

24,00,000

2 3

Welding machine (Oxy-acetylene) Milling machine Brand name = KIRLOSKAR Working surface of table = 1064x 250 mm No. of spindle speed = 16 Motor = 12 HP Speed = 3000 r.p.m. Grinding machine Brand name = KIRLOSKAR Thickness of wheel = 250 Grain size = 100 (fine) Wheel size = 300 mm Painting machine Furnace Die and patterns Weighing machine Jig and fixture Helping Tools Installation Expenses Water supply pipes Furniture TOTAL

15,000 9,55,000

1 1

15,000 9,55,000

22,500

45,000

5 6 7 8 9 10 11 12 13

6,500 1,90,000 2,50,000 9,000 1,000 -----------------

1 1 ---1 ------------

6,500 1,90,000 2,50,,000 9,000 1,000 8,000 15,000 7,000 50,000 Rs. 37,01,500

5) ELECTRICAL EQUIPMENT :S.No. Equipment Price (Rs.) No. Of piece Total value (Rs.)

30

1 2 3 4 5 6

Generator (200 KW) PVC Wires Ceiling fan Exhaust fan Tube light Fitting & Installation Total Electrical equipment Cost

1,50,000 ---1,000 900 300 ----

1 -15 5 25 --

1,50,000 3,000 15,000 4,500 7,500 2,000 Rs. 1,82,000

6) MANPOWER: Sr. No. 1 2 3 4 5 6 7 8 9 Name of Post Manager Engineer Accountant Junior Engineer Salesman store keeper Skilled worker Unskilled workers Security Man TOTAL SALARY PER MONTH No. of persons 1 2 1 2 2 2 4 8 2 Salary (Per Month) 25,000 12,000 5,000 7,500 5,000 4,000 3,500 3,000 2,500 Total Value (Rs.) 25,000 24,000 5,000 15,000 10,000 8,000 14,000 24,000 5,000 Rs. 1,30,000

7) OVERHEAD CHARGES: - (Per Month)

S.No. 1. 2. 3. 4. Particular Postage and Stationary Repair & Maintenance work Testing from ISI Testing lab Transportation Amount (Rs.) 2,000 6,500 20,000 35,000

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5.

Miscellaneous Total Overhead Charges per month

2,000 Rs. 65,500

8)UTILITIES: -(Per Month)

S.No. 1. 2. 3. 4. 5. Particular Electricity and Power Telephone Bill Water Uses Fuel for Generator Other Expenses Total (Per Month) Amount (Rs.) 60,000 2,500 1,000 10,000 5,000 Rs. 78,500

9)FIXED CAPITAL
S.No. 1. 2. 3. Particular Land Cost Building Cost Machinery & Equipment Cost Value in Rs. 24,00,000 7,50,000 37,01,500 Rs. 68,51,500

Total Fixed Capital

10) WORKING CAPITAL (For 2 month): S.No. 1 Particular Raw Material Amount for One month 10,70,000 Amount for Two months 21,40,000

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2 3 4. 3 5.

Electrical Equipment Salary & Wages Overhead Charges Utilities Other Necessity Total Working Capital (For 2 Month)

-------1,30,000 65,500 78,500 --------

1,82,000 2,60,000 1,31,000 1,57,000 1,20,000 Rs. 29,90,000

11) TOTAL COST OF PROJECT: S.No. 1. 2. Particular Fixed Capital Working Capital Total Cost of Project Value in Rs. 68,51,500 29,90,000 Rs. 98,41,500

12) MEANS OF FINANCE: S.No. A. Particular Loan from Bank For Land (90% of total value) at 9% p.a. interest For Building (70% of total value) at 9% p.a. interest For Machinery (80% of total value) at 9% p.a. interest For raw material (Short term loan) at 12% p.a. interest Total Loan From Bank B. Credit from Relatives (at 10% p.a. interest) Own Contribution 21,60,000 5,25,000 29,61,200 22,00,000 78,46,200 9,00,000 10,95,300 Value in Rs.

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C. Total Money Collected Rs. 98,41,500

13) COST OF PRODUCTION (Per Year): a) Fixed Cost of Production: S.No. 1 2. 3 4 5 6 7 8 Particular Salary & Wages Overhead charges Utilities Dpreciatione on lathe and milling Machine @ 10% Per annum Depreciation on other Machinery & Equipment @ 20% Per annum Depreciation on Electrical Equipments @ 25% Per annum Depreciation on Building @ 10% Per annum Interest pay to Bank On land On Building On Machinery 9 10. 1,94,400 47,250 2,66,508 -----------------90,000 1,09,530 47,85,263 Amount for One month (Rs.) 1,30,000 65,500 78,500 -------------------------------------Amount for One year (Rs.) 15,60,000 7,86,000 9,42,000 3,35,500 69,300 45,775 75,000 7,72,158

On Raw Material 2,64,000 Interest pay to Relatives Interest on Own Capital Total Fixed Cost of Production Per Annum

b)

Variable cost of Production S.No. Particular Value in Rs.

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1.

Raw Material For 7,700 motors @ 1667.53 per motor Total Variable cost of Production

1,28,40,000 1,28,40,000

Total Cost of Production: = Fixed Cost of Production + Variable Cost of Production = 47,85,263 + 1,28,40,000 = Rs. 1,76,25,263.00

14) TURNOVER (Per Year): S.No. 1. No. of motors are produce 7,700 Sale price per motor (Rs.) 2,700.00 Total Turnover Per Year Total Amount (Rs.) 2,07,90,000 2,07,90,000

GROSS PROFIT: = Turnover Cost of Production

= 2,07,90,000 1,76,25,263 = Rs. 31,64,737.00

NET PROFIT: = Gross Profit Income Tax = 31,64,737 9,49,421.1 = Rs. 22,15,315.9

RATE OF RETURN: = Profit x 100 Capital Investment = 98,41,500 22,15,315.9 x 100

= 22.51% 35

NAME OF THE MAIN CUSTOMER

General public Restaurant Hotel School & College

EXTENT OF COMPETITION
Just seven other companies in the region manufacturing the same kind of product. Also company is ISI approved and thus has an upper edge over the ones. Company is planning to lower down the prices to meet the competition. Dealers will also be given hand some margin so that they work hard to sell the product.

REGION WHERE PRODUCT WILL BE SOLD

Mainly northern India i.e. the company is planning to give dealership in major cities of Haryana, Punjab, Uttaranchal, Delhi,& Himachal pardesh.

ADDRESS OF MACHINARY SUPPLIERS

1) M/S LAMBA MACHINE WORKS A-110, ELECTRICAL MARKET, OLD DELHI, NEAR CHANDNI CHOWK 2) M/S KULDEEP MACHINARY MODEL TOWN, LUDHIANA. 3) M/S VINAY ELECTRICALS KIRTI NAGAR, NEW DELHI

SUPPLIERS OF RAW MATEIALS

1) M/S JAGDEEP STORES DARYAGANJ, NEW DELHI 36

2) M/S CHABBRA AND SONS, GOLE MARKET, PAHAAR GANJ NEW DELHI

BREAK EVEN ANALYSIS (THEORETICALLY)

Break Even Point (BEP) = Fixed Cost of Production *100 (Fixed cost of production + Gross profit)

47,85,263 *100 4785263+3164737

`60.19%

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