INTRODUCTION

Small Scale Industries are very important from the view of overall
economic growth of India. Products are easily available through SSI in small
villages and towns. It’s a desirable way of getting equitable distribution of
the national income and they facilitate an effective mobilization of resources
of capital and skill.

Unemployment is a key issue concerning the developing country like

INDIA. Small Scale Industries helps in reducing the crisis of unemployment.
One of the promising opportunities for employment lies in developing SSI.
The healthy development of SSI would help in solving unemployment
problem and would provide a strong sector of the Indian economy.

Glass mirrors are made up of good quality sheets of glass being

coated one side with chemicals to give the desired reflectance. It is popularly
used for looking purpose by all in day-to-day life. It has got certain
industrial uses also, but very limited.

In the view of the use of mirrors, it can be said as an important and

essential item without which one cannot imagine the present sophisticated
modern life.

1
 PROJECT AT GLANCE

Name of the unit : SONI MIRRORS

Plant Location : SONI MIRRORS

GIDC Plot No – 0531,
Metoda,
Rajkot.

Official Address : 1-2 1st Floor,

Mahalaxmi Complex,
Kalawad Road,
RAJKOT.

Forms of organization : Sole proprietor

Promoters Name : Soni Jalev G.

Product : Mirrors

Brand Name : “GLASS DECOR”

Accounting Year : 1st April to 31st March

2
SSI Registration No. : Applied for the same.

Bankers : State Bank of Saurashtra

Corporation Bank

Estimated Cost : 60, 00,000 (Rs)

Website : WWW.GLASSDECOR.COM

3
 PROMOTERS BACKGROUND

Name : SONI JALEV G.

Age : 21 years

Education Qualification : B.B.A. (Finance)

Experience : 1 year in Finance
Religion : Hindu
Family Background : Own Business
Address : 9, Raghuvir Para,
“NARMADA KUNJ”,
Sanghanava Chowk,
RAJKOT.
Role in the firm : To look mainly after the Financial and
Sales side of the Firm.

4
IMPLEMENTATION SCHEDULE

SR. NO PARTICULARS MONTH

1. Preparation of Project Report 1
2. Registration and other formalities 2
3. Procurement of finance, Power connection, 3
construction of factory, machinery
procurement.
4. Recruitment of staff and Labour 1

Total time needed for the above procedure is 7 months.

5
ORGANIZATIONAL STRUCTURE

PROPRIETOR

Personnel Production Sales Finance

Dept. Dept. Dept. Dept.

Production Manager Salesman Accountant

Skilled worker

Semi-skilled worker

Unskilled worker

Watchman

6
 JUSTIFICATION OF LOCATION

Generally the word location is always followed by availabilities of

infrastructure facilities such as water, power, raw materials, transportation,
government regulations, marketing etc.

After a careful watch and a proper consideration of all these factors,

the promoters have decided to set up the plant at G.I.D.C. Metoda, its 15 km
from Rajkot city, which is rapidly growing in the field of industrialization.
Therefore the unit is having the following advantages….

1. RAW MATERIAL & LABOUR

We can get the raw material easily by the nearest area. The
transportation facility and workers for the company are easily available.
Most of the workers including skilled and unskilled are from nearest village
METODA.

2. GOVERNMENT
The reason for establishing such a big plant near a small village like
METODA can be justified by the fact that this region is very much
supported by the government policies of Gujarat by providing liberal policy
of market, land & building distribution system, loans and subsidies, free
from tax for next 5 years from the starting of the plant, transportation,
drainage facilities, etc.

7
4. Market Reach
Nearness to market ensures that quick and timely availability of
products and cheap transportation costs. So the area chosen is one where raw
materials and the ready market for finished goods is readily available. Also
one of the important considerations is that there is no other Mirror Industry
in this area so it has a ready market of the goods produced being easily given
to the Distributors.

5. Infrastructure Facility

As the unit is located in Metoda which itself is a main industrial

center so all the basic requirements like water, electricity are easily fulfilled.
Thus the proper selection of site and infrastructure will reduce the cost of
production and product.

8
 PRODUCT DETAILS

Φ CLARITY
Commonly referred to as Brightness, CLARITY is an
indicator of the sharpness of the reflection seen in a mirror. It is related to
the quantum of the light absorption of the mirrors. Lesser the percentage of
light absorption, the sharper and clearer the reflection of the image will
appear. Better the reflection, closer the image to reality. Extend of absorption
of light by the mirror and, as mirror is dependent on the color of the glass,
which in turn is dependent on its iron content. Our Best Quality glass has the
least amount of iron (less than 0.1%) which leads to least absorption of light
thereby making GLASS DÉCOR mirrors is the clearest mirror.

Φ DISTORTION

Distortion is the phenomenon wherein the images reflected by a

mirror appear disproportionate, wavy and fuzzy in parts or whole. This
arises due to defects like inconsistencies, impurities and irregularities found
in the glass used for making the mirror. These defects may be surface related
or found in the body of the glass. These defects lead to irregular deviation-
free because of its even surfaces, no scratches and minimal point defects
thereby GLASS DÉCOR making mirror an exceptionally distortion-free
mirror.

9
Φ DURABILITY

Like all products, mirror too have a life beyond which the ageing
start to appear – black spots on the mirror, the edge start to corrode and the
images begins to appear dull. Durability is related to the strength of the
coating used in the back – side of the mirror. Mirrors with the strength have
low durability. The coating on our mirror is applied with the revolutionary
new stage special treatment process which replaces copper, and improves the
durability of the coating. GLASS DÉCOR’S mirror is Evolutionary as it
comes with multiple coats of specially made from environment-friendly lead
free paint. These protect the silver from corrosion and abrasion.

10
 MARKET POTENTIAL

In view of the use of mirrors, it can be said as an important and

essential item without which one cannot imagine the sophisticated modern
life.

In the household and new progressing industrial establishments, there

is considerable demand for these mirrors. Fancy shop, jewel leery shop,
hotels, bars, salons, furniture manufacturer, tailoring shop, theatres, show
room largely consume mirrors, it is an essential item which is always in
demand in the market. The life of our silvering coating is very much high
than the others so we get good market. The replacement demand of this
product is estimated at 5%.

On the research point of view there is a very good demand in Gujarat.

From the view point of export, the demand of comparatively cheap and good
quality mirrors is increasing very well, so in future it will be one of the main
criteria for the firm.

As per the export opinion the demand of this product is very much in
growing state and as we know the Gujarat is the most growing state in all
over India. So we covered all Gujarat for selling our product.

11
The following are the major unit that produces the
mirrors:

[1] Modiguard float glass co. ltd,

Ankleshwer.

[2] Indo Ashahi sheet glass,

Bihar.

[3] Saint Gobain float glass,

Chennai.

12
 RAW MATERIAL

The Raw Materials used for manufacturing GLASS MIRRORS

are:

1. Plane Glass
2. Silver Nitrate
3. Copper
4. Water
5. Silver Paint Color

13
 MACHINES & EQUIPMENTS

SR NO. PARTICULARS QTY

1 Automatic Beveling Machine 1
2 Surface Polishing Machine 1
3 Bevel Polishing Machine 1
4 Spray Gun with Air Compressor (3 HP Motor) 1
5 Drilling Machine 1
6 Diamond Drill Bits 6
7 High Carbon Drill Bits 12
8 Diamond Cutters 5
9 Circular Cutters 1
10 Measuring Jars, Felt Brushes, -
11 Electricity Generator of 15 KV 1

14
 MANUFACTURING PROCESS

The most important process in the manufacture of glass mirrors is

silvering on glass. The following various operation involved in the process
of manufacture of mirror.

BASE GLASS

SENSITIZING

ACTIVATION

SILVERING

PASSIVITY

PAINTING

COPPERING

PRE-PAINT COAT

15
 Plate glass and sheet glass are cleaned by chemical process or by
surface polishing to clean the surface contamination so as to give proper
adherence.

We are given further treatment known as sensitizing makes the

surface active for attracting the silver metal to form a quick adherence and
uniform coating of film. Then the plate and sheet glasses are silvered either
by spraying process or by pouring method (brasher process & tartaric acid /
Rochelle salt process). Then we are passivity the glass coating for proper
adherence of coating. Then we painting by special paint color than we are
given copper coating to protect the silver from damage. The sheets are
getting further protective coating by painting either with red lead and varnish
or cellulose enamel paint.

16
 PRODUCTION CAPACITY

The production capacity schedules are as below:-

Installed capacity:-

DAILY WEEKLY MONTHLY YEARLY

Production Production Production Production
SR.NO.
(Sq. mt.) (Sq. mt) (Sq. mt.) (Sq. mt.)
PRODUCT
1. 5 mm. Glass
mirror 2,000 12,500 50,000 6,00,000

Firm has the Installed Capacity of 6, 00,000 units but in its First year
it will utilize 50% of its Installed Capacity i.e. 3, 00,000 units. And it will
increase its Production Capacity by 10% every year.

17
 STAFF & LABOUR DETAILS

“GLASS DÉCOR” is a Small Scale Industry, and it’s a Family in

itself. It treats all the employees of the firm as the family members and takes
sufficient care and responsibility of them.

STAFF & LABOUR – SALARY & WAGES DETAIL

SR. PARTICULAR NO. OF SALARY TOTAL

NO. PERSON (P.M.) VALUE
1 Admin. & Production 1 6,000 72,000
Manager
2 Accountant 1 3,000 36,000
3 Sales Manager 1 2,000 24,000
4 Skilled Worker 16 2,000 3,84,000
5 Semi-Skilled Worker 10 15,00 1,80,000
6 Unskilled Worker 10 1,000 1,20,000
7 Watch-Man 1 1,200 14,400

FINANCIAL DETAILS

18
(a) Land

SR NO. PARTICULARS AREA AMOUNT

1 Land 2500 sq yard 13,75,000
2 Stamp duty - 1,23,750
3 Registration - 11,250
Total - 15,10,000

(b) Building

PARTICULARS AREA RATE AMOUNT

Building 5000 sq feet 210 10,50,000
Total - - 11,00,000

(c) Machinery and equipments

SR NO. PARTICULARS QTY RATE

19
 1 Automatic Beveling Machine 1 10,00,000
2 Surface Polishing Machine 1 1,00,000
3 Bevel Polishing Machine 1 10,000
4 Spray Gun with Air Compressor (3 HP Motor) 1 20,000
5 Drilling Machine 1 17,000
6 Diamond Drill Bits 6 3,500
7 High Carbon Drill Bits 12 7,500
8 Diamond Cutters 5 6,500
9 Circular Cutters 1 2,500
10 Measuring Jars, Felt Brushes, - 20,000
11 Electricity Generator of 15 KV 1 60,000
Total 12,47,000

(d) Other Fixed Assets

SR. NO PARTICULARS AMOUNT

1. Computer 50,000
2. Furniture 150,000
3. Delivery Van 250,000

20
 Total 4,00,000

(e) Preliminary expense and project cost = 30,000

(f) Total Fixed Assets

SR. NO PARTICULARS AMOUNT

1. Land 15,10,000
2. Building 10,50,000
3. Machinery and equipment 12,47,000
4. Other fixed assets 4,50,000
5. Pre operative and Preliminary Expenses 30,000
Total 42,87,000

COST OF PRODUCTION

(a) Raw Material

SR. RAW QTY RATE DAILY MONTHLY ANNUALLY

NO MATERIAL (SQ (RS.) (RS.) (RS.)
. MT)
1 5mm Glass 1 3.5 3,500 87,500 10,50,000
sheet
2 Copper 2 2.0 2,000 50,000 9,00,000
3 Silver nitrate 12 2.7 2,700 67,500 8,10,000
21
 4 Silver paint 8 1.0 1,000 25,000 3,60,000
Total - 9.2 - - 31,20,000

(b) Staff & Labour

PARTICULAR NO. OF RATE P. M. (RS) P.A. (RS)

PERSON
Admin. & Production 1 6,000 6,000 72,000
Manager
Accountant 1 3,000 3,000 36,000
Salesman 1 2,000 2,000 24,000
Skilled worker 16 2,000 32,000 3,84,000
Semi skilled worker 10 1,500 15,000 1,80,000
Unskilled worker 10 1,000 10,000 1,20,000
Watchman 1 1,200 1,200 14,400
Total 40 69,200 8,30,400

22
 (c) Other Expenses & Utilities

PARTICULAR AMT. AMT.

(P.M.) (P.A.)
Postage & Stationary 500 6,000
Repairs & Maintenance 1,500 18,000
Packing Materials 15,000 1,80,000
Advertising & Publicity 5,000 60,000
Transport Charges 4,000 48,000
Insurance 3,000 36,000
Consumables 2,000 24,000
stores, cotton waste, grease, lubricating , etc.
Telephone expenditure 2,000 24,000
Electricity 6000 kwh @ Rs.3/unit 15,000 1,80,000
Total 57,000 6,84,000

Total Cost of Production / [a + b + c]

PARTICULAR AMT.
(P.A.)
(a) Raw Material 31,20,000
+ (b) Staff lab our 8,30,400
+ (c) Other Expenses & utilities 6,84,000
Total 46,34,400

23
 Total Working Capital

PARTICULARS AMT. ANNUAL AMT.

Raw Materials (4 Months) 7,80,000 31,20,000
Salary & Wages (1 Months) 8,30,400 8,30,400
Utilities (2 Months) 48,000 2,88,000
Total 16,58,400 42,38,400

TOTAL CAPITAL INVESTMENT /

PROJECT FUND

PARTICULAR AMT. (P.A.)

Fixed Assets 42,87,000
Working Capital [On the Credit Basis] 16,58,400
Total 59,45,400

24
 SOURCES OF FINANCE

PARTICULAR AMT.
Ownership Capital (60 %) 35,67,240
Borrowed Capital (40 %) 23,78,160
Total 59,45,400

INTEREST ON BORROWED
CAPITAL

DETAILS LOAN INT. INTEREST

AMT. RATE (P.A.)
Borrowed Loan
State Bank of India 23,78,200 11% 2,61,602

INTEREST ON OWN CAPITAL

DETAILS LOAN INT. INTEREST

AMT. RATE (P.A.)
Own Capital 35,67,200 9% 3,21,048

25
 DEPRECIATION

PARTICULAR AMT. RATE AMT OF DEP.

Building 10,50,000 10% 1,05,000
Machinery 12,47,000 25% 3,11,750
Computer 50,000 40% 20,000
Delivery Van 2,50,000 15% 37,500
Furniture 1,50,000 15% 22,500
Total 4,96,750

26
 STATEMENT OF COST OF
PRODUCTION

PARTICULAR RS. RS.

Variable Expenses
Raw material 31,20,000
Utilities 2,88,000
Salary & Wages [25%] 2,07,600

Other Adm. Expenses

Telephone 24,000
Postage & Stationary 6,000
Advertising & Publicity 60,000
Repairs & Maintenance 18,000
Packing materials 1,80,000
Transport Charges 48,000
Consumable stores, cotton waste, grease, 24,000
lubricant etc. 3,60,000
----------
Total Per Annum (A) 39,75,600

Fixed Expenses
Salaries [75%] 6,22,800
Depreciation 4,96,750
Written off preliminary expenses[30000/5]
27
 Insurance 6,000
36,000

Interest : Borrowed Capital = 2,61,602

+ Own Capital = 3,21,048
--------- 5,82,650
Total Per Annum (B) ----------
17,44,200

Total Cost of Production :- (A + B)

= Rs. 39, 75,600 + 17, 44,200

= Rs. 57, 19,800

Total Cost Per Unit:-

= Total Cost
---------------
Total “sq meter of glass sheet” per annum

= 57, 19,800/3, 00,000

= 19.06 Rs
Thus from the above calculation we can get the cost price of per unit of
this product. Thus the cost price per unit of the product is Rs 19.06

28
 SALES FORECASTING

Sales forecast for 5 years

YEAR UTILIZED SQ MTS S. P. NET SALES

CAPACITY (UNITS)
1st 50% 3,00,000 20.70 62,10,000
2nd 60% 3,60,000 20.85 75,06,000
3rd 70% 4,20,000 20.85 87,57,000
4th 80% 4,80,000 20.95 1,00,56,000
5th 90% 5,40,000 21.00 1,13,40,000

29
 FIXED & VARIABLE COST
SCHEDULE
(a) Fixed cost schedule:

PARTICULAR AMT.
Salaries [ 75%] 6,22,800
Depreciation 4,96,750
written off preliminary exp. 6,000
Insurance 36,000
Interest 5,82,650
Total 17,44,200

Fixed Cost per unit = Total fixed cost

-------------------
No of units

= 17,44,200
------------
300000
Fixed Cost per unit
= 5.81 Rs

30
(b) Variable cost schedule:

PARTICULAR AMT.
(RS.)
Raw materials 31,20,000
Utilities 2,88,000
Salary & wages Exp. [25%] 2,07,600
Other ad. Expenses

Telephone 24,000
Postage & stat. 6,000
Ad. & Publicities 60,000
Repairs & materials 18,000
Packing materials 1,80,000
Transport charges 48,000
Consumable stores, cotton waste, etc 24,000
Total 39,75,600

Variable Cost per unit = Total variable cost

-----------------------
No. of unit

31
 = 39, 75,600
----------
3, 00,000

Variable Cost per unit = 13.23 Rs.

Total Cost / Unit

Total cost per unit = Fixed cost/unit + variable cost/unit

= 13.23 + 5.81
= 19.06 Rs

32
 BREAK EVEN ANALYSIS

(a) Contribution = Sales Price - variable cost

(Sq Mt) (Sq Mt) (Sq Mt)

= 20.70 – 13.23

= 7.47

(b) BEP (in units) = Fixed Cost = 17, 44,200

------------- ----------
C. P. U. 7.47

= 2, 33,494 (Sq Mt)

(c) BEP (in Rs.) = BEP (Sq Mt) X Selling Price

= 2, 33,494 X 20.70

= 48,33,326 Rs.

33
(d) BEP (in %) = Fixed Cost X Utilized Capacity
-------------
Contribution

= 17, 44, 200 X 50

----------
(62, 10,000 – 39, 75,600)

= 17, 44,200 X 50
----------
22, 34,400

= 39.03%

34
 TERM LOAN
REPAYMENT

SR OPENING INSTALLMENT CLOSING INTEREST

NO BALANCE BALANCE
1 23,78,200 2,00,000 21,78,200 2,61,602
2 21,78,200 2,00,000 19,78,200 2,39,602
3 19,78,200 2,00,000 17,78,200 2,17,602
4 17,78,200 2,00,000 15,78,200 1,95,602
5 15,78,200 2,00,000 13,78,200 1,73,602
6 13,78,200 2,00,000 11,78,200 1,51,602
7 11,78,200 2,00,000 9,78,200 1,29,602
8 9,78,200 2,00,000 7,78,200 1,07,602
9 7,78,200 2,00,000 5,78,200 85,602
10 5,78,200 2,00,000 3,78,200 63,602
11 3,78,200 2,00,000 1,78,200 41,602
12 1,78,200 1,78,200 - 19,602

AVG. COST OF CAPITAL

CAPITAL RATE INTEREST

35
 Own Capital :- 35,67,240 9% 3,21,052
+ borrowed Capital :- 23,78,160 11% 2,61,602
Total 5,82,650

Avg. Cost of Capital = Total interest X 100

----------------
Total Capital

= 5, 82,650 X 100
---------
59, 45,400
= 9.8 %

RETURN ON INVESTMENT

ROI = EBIT
-------------- X 100

36
 Cost of project

EBIT = Sales - [Variable Cost + Fixed Cost –

Interest]

= 62, 10,000 - [39, 75,600 + 17, 44,200 – 5, 82,650]

= 62, 10,000 - [51, 37, 150]

= 10, 72,850 Rs.

Return on Investment = 10, 72,850 X 100

---------
59, 45,400

= 18.05%

PROFITABILITY ANALYSIS

PARTICULAR RS.

37
 Sales 60,00,000
Less : Cost of Production [Fc+Vc-Interest]
[3975600 + 1672856 – 511306] 51,52,500
= EBIT 10,72,850

Less : Interest 5,82,650

---------
Earning Before Tax 4,90,200

Less : Income Tax 97,060

+ Education cess (2% of IT) 1,941
---------
Earning After Tax 3,91,199
=====

NOTE: - Computation of Income Tax of sole proprietorship

1st 1, 00,000 Rs. < = NIL

2nd 1, 01,000-1, 49,999 Rs. @ 10 % = 5,000
3rd 1, 50,000-2, 49,999 Rs. @ 20 % = 20,000

4th 2, 50,000 >= @ 30%

[4, 90,200-2, 50,000] =

2, 40,200 Rs. @ 30 % = 72,060

38
 -------
+ 2 % Edu. Cess - 1,941
------
= 99,001

Gross profit Ratio = GP X 100

----
Sales

= 21, 18,000 X 100

-------------
62, 10,000

= 34.15%

Net profit Ratio = N.P. X 100

-------
Sales

39
 = 3, 91,199 X 100
---------
62, 10,000
= 6.29%

Fixed Asset turnover Ratio

Sales = 62, 10,000

------ ----------
Fixed Assets 42, 87,000

= 1.45 %

40
 RISK FACTOR

In each and every business activity there is some risk in the some way
our unit is also having some risk factory, which are as follows:

As we are dealing in Glass, we have to be extremely careful in

packaging the product due to its breaking tendency. At most care
should be taken for transportation and handling of goods.
Change in level of present Competition may bring tough task for
SSI.
Price Hikes in Raw material may prove adverse for the firm.
Continuous changes in the price of copper may result in price hikes
in selling price of the product.

41
 NAME & ADDRESS OF RAW
MATERIAL SUPPLIERS

1) M/s. Gujarat Chemical

114, Shreeji complex,
Navrangpura,
Ahmedabad.

2) M/s. Indo Ashahi Glass & Co. Ltd.

Bhurukunda (P.O. Bhadaninagar)
Hazaribagh Dist.
Bihar

3) Triveni Sheet Glass

Allahabad, U.P.
Madras Office:
11, Devraj Madji Street,
Madras

42
 SUPPLIER OF MACHINES

1) M/s. Bando Trading Co., Ltd.,

Tokushima 770 Japan.
(For automatic beveling machine model-B-10)

2) M/s. Narang Glass & Frame Industries,

2-1-77 Ridge,
Hyderabad-2.

3) M/s. Atliers Botte

JEMPLE SURSAMBER BELGIUM,
(For automatic beveling machine, bevel, polishing machine,
Surface polishing machine.

43
 PROJECTED OPERATING
STATEMENT

PARTICULARS 1ST YEAR 2ND YEAR 3RD YEAR

Sales (a) 62,10,000 75,06,000 87,57,000

Less: Cost of Operation

Raw materials 31,20,000 37,44,000 43,68,000
Labour 6,84,000 8,20,800 9,57,600
Utilities 2,88,000 3,45,600 4,03,200

(b) 40,92,000 49,10,400 57,28,800

Gross profit (a - b) 21,18,000 25,95,600 30,28,200

Less: Total Factory Cost

Salaries 72,000 86,400 1,00,800

Repair and Maintenance 18,000 21,600 25,200
Depn on building & machine 4,16,750 3,28,313 2,60,410
Consumable storage 24,000 28,800 33,600
(c) 5,30,750 4,65,113 4,20,010

Office and Administrative

cost

Postage and Stationary 6,000 7,200 8,400

Telephone 24,000 28,800 33,600
Salary 50,400 60,480 70,560
W/O preliminary expenses 6,000 6,000 6,000
Insurance 36,000 36,000 36,000
Depreciation on furniture & 42,500 31,125 23,456
computer

44
 (d) 1,64,900 1,69,605 1,78,016

Selling & distribution O/H

Salaries 24,000 28,800 33,600

Advertisement 60,000 72,000 84,000
Packaging expenses 1,80,000 2,16,000 25,200
Transportation expenses 48,000 57,600 67,200
Depn on delivery van 37,500 31,875 27,094

(e) 3,49,500 4,06,275 4,63,894

Total Indirect Expenses

[c + d + e] 1,0,45,150 10,40,993 10,61,920

EBIT
[GP - total indirect expenses] 1,0,72,850 15,54,607 19,66,280

Less: Int on borrowed loan 2,61,602 2,39,602 2,17,602

EBT 8,11,248 13,15,005 17,48,678

Less: Income Tax 1,97,241 3,51,392 4,84,095

EAT 6,14,007 9,63,613 12,64,583

45
 Projected Trading Account
[1st yr]

PARTICULARS AMOUNT PARTICULARS AMOUNT

To purchase 31,20,000 By Sales 62,10,000
To direct labour 6,84,000
To utilities 2,88,000

To GROSS PROFIT 21,18,000

Total 62,10,000 62,10,000

Projected Trading Account

[2ndyr]

PARTICULARS AMOUNT PARTICULARS AMOUNT

To purchase 37,44,000 By Sales 75,06,000
To direct labour 8,20,800
To utilities 3,45,600

To GROSS PROFIT 25,95,600

Total 75,06,000 75,06,000

46
 Projected Trading Account [3rd
yr]

PARTICULARS AMOUNT PARTICULARS AMOUNT

To purchase 43,68,000 By Sales 87,57,000
To direct labour 9,57,600
To utilities 4,03,200

To GROSS PROFIT 30,28,200

Total 87,57,000 87,57,000

47
 Projected Profit and loss
account [1st yr]

PARTICULARS AMOUNT PARTICULARS AMOUNT

To Salaries 8,30,400 By GROSS PROFIT 21,18,000
To Repair & Maint. 18,000
To Telephone 24,000
To Postage & Stat. 6,000
To Advertisement 60,000
To Packing Exp 1,80,000
To Transport Exp 48,000
To Consumables 24,000
To Insurance 36,000
To Int on Borrowed 2,61,602
loan
To Depreciation 4,96,750

To Income Tax 13,391

To NET PROFIT 1,29,857

Total 21,18,000 21,18,000

48
 Projected Profit and loss
account [2nd yr]

PARTICULARS AMOUNT PARTICULARS AMOUNT

To Salaries 9,96,480 By GROSS PROFIT 25,95,600
To Repair & Maint. 21,600
To Telephone 28,800
To Postage & Stat. 7,200
To Advertisement 72,000
To Packing Exp 2,16,000
To Transport Exp 57,600
To Consumables 28,800
To Insurance 36,000
To Int on Borrowed 2,39,602
loan
To Depreciation 3,91,313

To Income Tax 1,02,062

To NET PROFIT 3,98,143

Total 25,95,600 25,95,600

49
 Projected Profit and loss
account [3rd yr]

PARTICULARS AMOUNT PARTICULARS AMOUNT

To Salaries 11,62,560 By GROSS PROFIT 30,28,200
To Repair & Maint. 25,200
To Telephone 33,600
To Postage & Stat. 8,400
To Advertisement 84,000
To Packing Exp 2,52,000
To Transport Exp 67,200
To Consumables 33,600
To Insurance 36,000
To Int on Borrowed 2,17,602
loan
To Depreciation 3,10,960

To Income Tax 1,92,906

To NET PROFIT 6,04,172

Total 30,28,200 30,28,200

50
 PROJECTED BALANCE SHEET
FOR 3YEARS

PARTICULAR 1ST YEAR 2ND YEAR 3RD YEAR

Capital Liability
Own Capital 35,67,200 35,67,200 35,67,200
+ Interest on own capital 3,92,392 3,92,392 3,92,392
+ Net profit 1,29,857 3,98,143 6,04,172
Less: Drawings 5,22,249 7,90,535 9,96,564
----------- ----------- -----------
35,67,200 35,67,200 35,67,200
====== ====== ======

Borrowed Loan 23,78,200 21,78,200 19,78,200

+ Interest on borrowed 2,61,602 2,39,602 2,17,602
loan ----------- ---------- -----------
26,39,802 24,17,802 21,95,802
======= ====== ======
Creditor 2,00,000 5,00,000 7,00,000
----------- ---------- ----------
Total (A) 64,07,002 64,85,002 64,63,002
====== ====== ======

51
 Property Assets
Land 15,10,000 15,10,000 15,10,000
Building less dep. 9,45,000 8,50,500 7,65,450
Machinery less dep. 9,35,250 7,01,437 5,26,078
Computer less dep. 30,000 18,000 10,800
Furniture less dep. 1,27,500 1,08,375 92,119
Pre-op exp. 24,000 18,000 12,000
Delivery van less dep. 2,12,500 1,80,625 1,53,531
Cash [NP + dep. - Inst] 4,26,607 5,89,456 715,132

Debtor 21,96,145 25,08,609 26,77,892

------------- ----------- ----------
Total (B) 64,07,002 64,85,002 64,63,002
======= ====== ======

52
 COST SHEET (3 yrs)

PARTICULARS 1ST YR 2ND YR 3RD YR

Raw materials

Purchases 31,20,000 37,44,000 43,68,000

Cost of R.M consumed 31,20,000 37,44,000 43,68,000

Direct Wages 6,84,000 8,20,800 9,57,600

Utilities 2,88,000 3,45,600 4,03,200

Prime Cost 40,92,000 49,10,400 57,28,800

Factory O/H
Consumable Storage 24,000 28,800 33,600
Salaries 72,000 86,400 1,00,800
Repairs & Maint [Fac Exp] 18,000 21,600 25,200
Depn on Build & Machinery 4,16,750 3,28,313 2,60,410
5,30,750 4,65,113 4,20,010

Work Cost 46,22,750 53,75,513 61,48,810

Office & Ad. O/H

Salaries 50,400 60,480 70,560

Dep. on Computer & Furniture 42,500 31,125 23,456
Telephone 24,000 28,800 33,600
Post & Stationary 6,000 7,200 8,400
Insurance 36,000 36,000 36,000
Int of own capital 3,92,392 3,92,392 3,92,392

53
 5,51,292 5,55,997 5,64,408

Cost of production 51,74,042 59,31,510 67,13,218

Selling & Dist O/H

Salaries 24,000 28,800 33,600

Ad. & Publicity 60,000 72,000 84,000
Packing Mat. 1,80,000 2,16,000 2,52,000
Transport charges 48,000 57,600 67,200
Dep. On Delivery Van 37,500 31,875 27,094
3,49,500 4,06,275 4,63,894

Cost of Sales 55,23,542 63,37,785 71,77,112

Sales 62,10,000 75,06,000 87,57,000

Net Profit 6,86,458 11,68,215 15,79,888

Net Profit (per unit) 2.29 3.25 3.76

54
 SCHEDULE OF FIXED ASSETS

PARTICULAR GROSS BLOCK DEPRECIATION NET

BLOCK
[WDV]
Op+Add Total Total During Qty
Accumulated the year
Building 10,50,000 10,50,000 1,05,000 9,45,000
Machinery 12,47,000 12,47,000 3,11,750 9,35,250
Computer 50,000 50,000 20,000 30,000
Delivery Van 2,50,000 2,50,000 37,500 2,12,500
Furniture 1,50,000 1,50,000 22,500 1,27,500

Total 27,47,000 - 4,96,750 22,50,250

55
SCHEDULE FOR FACTORY O/H

PARTICULAR AMT.
Salaries 72,000
Repair & Maint [Factory Exp.] 18,000
Depreciation On building 1,05,000
On machinery 3,11,750 4,16,750
Total 5,06,750

56
 Schedule for Administrative and
Selling O/H

PARTICULAR AMT
(RS.)
(1) Administrative O/H

Salaries 50,400
Depreciation :- On Computer 20,000
On Furniture 22,500 42,500
Telephone 24,000
Postage & Stat. 6,000
Consumable stores & coaster 24,000
Insurance 36,000
Int. on own capital 2,49,704
---------
Total Adm. O/H (A) 4,32,604
======
(2) Selling O/H

Advertising & Publicity 24,000

Salaries 60,000
Packing Material 1,80,000
Transport Charges 48,000
Dep. On Del. Van 37,500

Total Selling O/H (B) ----------

3,49,500
Total adm. & selling O/H [a+b] ======
7,82,104
======

57
 DISCOLOSURE OF
SIGNIFICANT

We take double entry system in our books of account

Method of Depreciation: - Written Down Method.

Accounting Year: - 1st April to 31st March.

58