Project Report

On
JCB Service Center

M/s Sri Vinayaka Traders,

Plot No – 17, Autonagar & MSME
Palamaner, Chittoor,
Andhrapradesh – 517408
+91-7780732280
powerstarprakash8@gmail.com
1. INTRODUCTION:

JCB Tractor is used for heavy purposes and substantial works. JCB manufactures equipment for
agriculture, construction, and demolition. It builds over 300 types of machines like excavators, diggers,
excavators, tractors, and diesel engines, etc. JCB machines have some of the lowest cost of
ownership and are in high demand around the world. JCB units also do not have a need for DPF filters,
this means more uptime, and more efficiency throughout the entire project. In addition to simple
innovation, JCB focuses on operator and job site safety.

2. PRODUCT & ITS APPLICATION:

JCB Backhoe Loader is extensively used in applications like plantation, construction of rural
roads, fibre optics laying, truck unloading, and tractor trolley loading.

JCB machines have some of the lowest cost of ownership and are in high demand around the
world. JCB units also do not have a need for DPF filters, this means more uptime, and more
efficiency throughout the entire project. In addition to simple innovation, JCB focuses on
operator and job site safety.

3. DESIRED QUALIFICATIONS FOR PROMOTER:

The promoter with experience heavy commercial vehicle maintenance will be having good scope to
invest in such a project.

4. MARKET POTENTIAL AND MARKETING ISSUES. IF ANY:

India’s passenger vehicles of around 29 million during 2015 are expected to grow to more than 48 million
vehicles by 2020. Also, domestic sales of commercial vehicles are expected to grow at a CAGR of 11.6%
from 0.6 million in 2015 to more than 2 million by 2026. With the increasing automobile demand, the
country is also proportionately expected to witness a surge in sheet metal products used to manufacture
these vehicles. Considering the economic growth and increased trade due to GST introduction the
frequency of goods transport directly to end customers shall increase and the no of commercial vehicles
plying the road will increase.A good repair station can also tie up with goods and heavy vehicle OEM to
be an authorized service station. Also tie ups with fleet owners viz transport operators for regular
inspection andservicing for preventive maintenance will be a better business model.
5. RAW MATERIAL REQUIREMENTS:
The service station shall require mostly consumables like lubes, grease, welding consumables and
servicing requirements and spares as raw materials.

6. MANPOWER REQUIREMENT:

The unit shall require highly skilled service persons. The unit can start from 5 employees initially
and increase to _15_ or more depending on business volume.

Monthly No of Employees
Sr. No. Type of Employees
Year 1 Year 2 Year 3 Year 4 Year 5
Salary
1. Skilled Operators 20000 1 2 3 3 4
2. Semi-Skilled/ Helpers 8000 4 3 5 6 8
3. Supervisor/ Manager 25000 0 1 1 1 1
4. Accounts/ Marketing 15000 0 0 1 1 1
5. Other Staff 5000 0 0 1 1 1
TOTAL 5 6 11 12 15

7. IMPLEMENTATION SCHEDULE:

The unit can be implemented within _3_ months from the serious initiation of project work. The unit
is based on selection of location, renting premises for the unit.

Time Required in
Sr. No. Activities
Months

1 Acquisition of Premises 2

2 Construction (if Applicable) 8

3 Procurement and Installation of Plant and Machinery 3

4 Arrangement of Finance 3

5 Manpower Recruitment and start up 2

Total Time Required (Some Activities run
17
concurrently)
 DETAILED PROJECT REPORT

1 COST OF PROJECT
A. Fixed Capital Investment
a. Land : 5000 Sq Fts Own

b. Workshed Area Sq.ft Rate in Rs. Amt. In Rs.

Land 5000 135.00 675000.00
Storage 1500 150.00 225000.00
Work Area 2000 100.00 200000.00
Parking 1000 150.00 150000.00
Administrative Buildings 500 200.00 100000.00
Total 1350000.00

Qty. Rate Amount in Rs.

C. Machinery
Hydraulic Pipe Joiner 1 150000.00 150000.00
Greesing Unit 1 50000.00 50000.00
Cutting, Drilling and Welding Machines 6 75000.00 450000.00
Compressor 1 50000.00 50000.00
Other Tools 10 10000.00 100000.00
Total 800000.00
 d. Preliminary & Pre-operative Cost : Rs. 200000.00

e. Furniture & Fixtures : Rs. 75000.00

f. Contingency/Others/Miscellaneous Rs. 50000.00

Total Capital Expenditure : Rs. 2475000.00

Working Capital : Rs. 963200.00

Total Cost Project : Rs. 3438200.00

3.1 Means of Financing :

Own Contribution 40% Rs. 1375280.00

Bank Finance : 60%

Term Loan Rs. 1485000.00

Working Capital Rs. 577920.00

Total Rs. 2062920.00

STATEMENT SHOWING THE REPAYMENT OF TERM LOAN & WORKING CAPITAL :

TERM LOAN

Interest @
Year Opening Balance Installment Closing Balance 10.45%
1st 1485000 297000 1188000 155183
2nd 1188000 297000 891000 124146
3rd 891000 297000 594000 93110
4th 594000 297000 297000 62073
5th 297000 297000 0 31037
6th 0 0 0 0
7th 0 0 0 0
8th 0 0 0 0

WORKING CAPITAL

Interest @
Year Opening Balance Installment Closing Balance 10.45%
1st 577920 115584 462336 60393
2nd 462336 115584 346752 48314
3rd 346752 115584 231168 36236
4th 231168 115584 115584 24157
5th 115584 115584 0 12079
6th 0 0 0 0
7th 0 0 0 0
8th 0 0 0 0
STATEMENT SHOWING THE DEPRECIATION ON FIXED ASSETS:
WORKSHED @ 5.00%
Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year
Opening Balance 1350000 1282500 1218375 1157456 1099583
Depreciation 67500 64125 60919 57873 54979
Closing Balance 1282500 1218375 1157456 1099583 1044604
MACHINERY @ 10.00%
Opening Balance 800000 720000 648000 583200 524880
Depreciation 80000 72000 64800 58320 52488
Closing Balance 720000 648000 583200 524880 472392
TOTAL DEPRECIATION
Workshed 67500 64125 60919 57873 54979
Machinery 80000 72000 64800 58320 52488
Total 147500 136125 125719 116193 107467

2 Schedule of Sales Realization :

Details of Sales
Rate/ No. of Amount in Rs.
Particulars of Product Pair/Unit Pair/Unit
0
JCB Service 15000.00 200 3000000.00
0 0.00 0 0.00
Total 3000000.00

Capacity Utilization of Sales

Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year

Capacity Utilization 70% 80% 90% 90% 90%

Sales / Receipts 2100000 2400000 2700000 2700000 2700000

3 Rawmaterials :

Particulars Unit Rate/unit Reqd.Unit Amount in Rs.

Welding Rods Boxes 1000.00 350 350000.00
Greese Kgs 90.00 500 45000.00
0 0 0.00 0 0.00
Total 395000.00

5.1 Wages :
No. of Wages Amount in Rs.
Particulars Worker Per Month (Per Annum)
Workers 4 8000.00 384000.00
0 0 0.00 0.00
0 0 0.00 0.00
0 0 0.00 0.00
0 0 0.00 0.00
0 0 0.00 0.00
0 0 0.00 0.00
Total 4 384000.00

5.2 Repairs and Maintenance : Rs. 30000.00

5.3 Power and Fuel : Rs. 60000.00

5.4 Other Overhead Expenses : Rs. 60000.00

 4 Administrative Expenses :
6.1 Salary
Supervisor 1 12000.00 144000.00
0 0 0.00 0.00
0 0 0.00 0.00
0 0.00 0.00
0 0.00 0.00
Total 1 144000.00

Telephone Expenses 6000.00

Stationery & Postage 3000.00

Advertisement & Publicity 150000.00

Workshed Rent 180000.00

Other Miscellaneous Expenses 3000.00

Total 486000.00

5 Capacity Utilization of Manufacturing & Administrative Expenses :

Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year
Capacity Utilization 70% 80% 90% 90% 90%
Manufacturing Expenses
Rawmaterials 276500 316000 355500 355500 355500
Wages 268800 307200 345600 345600 345600
Repairs & Maintenance 21000 24000 27000 27000 27000
Power & Fuel 42000 48000 54000 54000 54000
Other Overhead Expenses 42000 48000 54000 54000 54000
Administrative Expenses
Salary 144000 144000 144000 144000 144000
Postage Telephone Expenses 4200 4800 5400 5400 5400
Stationery & Postage 2100 2400 2700 2700 2700
Advertisement & Publicity 105000 120000 135000 135000 135000
Workshed Rent 180000 180000 180000 180000 180000
Other Miscellaneous Expenses 2100 2400 2700 2700 2700
Total: 1087700 1196800 1305900 1305900 1305900

6 Assessment of Working Capital :

Particulars Amount in Rs.
Sale 3000000.00

Manufacturing Expenses
Raw Material 395000.00
Wages 384000.00
Repair & Maintenance 30000.00
Power & Fuel 60000.00
Other Overhead Expenses 60000.00

Production Cost 929000.00

Administrative Cost 486000.00
Manufacturing Cost 1415000.00
 Working Capital Estimate :

Element of Working Capital No of Day Basis Amount in Rs.

Raw materials 90 Material Cost 118500.00

Stock in process 90 Production Cost 278700.00

Finished goods 90 Manufacturing Cost 424500.00

Receivable by 30 Manufacturing Cost 141500.00

Total Working Capital Requirement Per Cycle 963200.00

7 Financial Analysis

Projected Profit & Loss Account :

Particulars 0 Year 1st Year 2nd Year 3rd Year 4th Year
Sales / Receipts 2100000 2400000 2700000 2700000
2100000 2400000 2700000 2700000
Manufacturing Expenses
Rawmaterials 276500 316000 355500 355500
Wages 268800 307200 345600 345600
Repairs & Maintenance 21000 24000 27000 27000
Power & Fuel 42000 48000 54000 54000
Other Overhead Expenses 42000 48000 54000 54000
Depreciation 147500 136125 125719 116193
Production Cost 797800 879325 961819 952293
Administrative Expenses
Salary 144000 151200 158760 166698
Postage Telephone Expenses 4200 4800 5400 5400
Stationery & Postage 2100 2400 2700 2700
Advertisement & Publicity 105000 120000 135000 135000
Workshed Rent 180000 180000 180000 180000
Other Miscellaneous Expenses 2100 2400 2700 2700
Administrative Cost 437400 460800 484560 492498
Interest on Bank credit @ 10.45%
Term Loan 155183 124146 93110 62073
Working Capital Loan 60393 48314 36236 24157
Cost of Sale 1450775 1512585 1575724 1531021
Net Profit Before Tax 649225 887415 1124276 1168979
Less Tax 0.00 0.00 0.00 0.00
Net Profit 649225 887415 1124276 1168979

CALCULATION OF DEBT SERVICE CREDIT RATIO (D.S.C.R) :

Particulars 0 Year 1st Year 2nd Year 3rd Year 4th Year
Net Profit 649225 887415 1124276 1168979
Add :
Depreciation 147500 136125 125719 116193
TOTAL - A 796725 1023540 1249995 1285172
Payments :
On Term Loan :
Interest 155183 124146 93110 62073
Installment 297000 297000 297000 297000
On Working Capital
Interest 60393 48314 36236 24157
TOTAL - B 512575 469460 426345 383230
D.S.C.R = A/B
1.55 2.18 2.93 3.35
Average D.S.C.R
PROJECTED BALANCE SHEET :

Particulars 0 Year 1st Year 2nd Year 3rd Year 4th Year
LIABILITIES :
Promoters Capital 1375280 1375280 1375280 1375280
Profit 649225 887415 1124276 1168979
Term Loan 1485000 1188000 891000 594000
Working Capital Loan 577920 462336 346752 231168
Current Liabilities 0 0 0 0
Sundry Creditors 0 0 0 0
4087425 3913031 3737308 3369427
ASSETS :
Gross Fixed Assets : 2225000 2077500 1941375 1815656
Less : Depreciation 147500 136125 125719 116193
Net Fixed Assets 2077500 1941375 1815656 1699463
Preliminary & Pre-Op. Expenses 200000 150000 112500 84375
Current Assets 577920 462336 346752 231168
Cash in Bank/Hand 1432005 1509320 1574900 1438796
Total 4087425 3913031 3737308 3369427

CASH FLOW STATEMENT :

Particulars 0 Year 1st Year 2nd Year 3rd Year 4th Year
Net Profit 649225 887415 1124276 1168979
Add : Depreciation 147500 136125 125719 116193
Term Loan 1485000 1188000 891000 594000
Working Capital Loan 577920 462336 346752 231168
Promoters Capital 1375280 0 0 0
Total 4234925 2673876 2487747 2110340

Total Fixed Capital Invested 2475000

Repayment of Term Loan 297000 297000 297000 297000

Repayment of WC Loan 115584 115584 115584 115584
Current Assets 577920 462336 346752 231168
Total 990504 874920 759336 643752

Opening Balance 0 3244421 5043377 6771788

Surplus 3244421 1798956 1728411 1466588
Closing Balance 3244421 5043377 6771788 8238376

BREAK EVEN POINT AND RATIO ANALYSIS :

Particulars 0 Year 1st Year 2nd Year 3rd Year 4th Year
Fixed Cost 740083 721071 703388 670764
Variable Cost 858193 927639 998054 976450
Total Cost 1598275 1648710 1701443 1647214

Sales 2100000 2400000 2700000 2700000

Contribution (Sales-VC) 1241807 1472361 1701946 1723550

B.E.P in % 59.60% 48.97% 41.33% 38.92%

Break Even Sales in Rs. 1251541 1175371 1115869 1050774

Break Even Units 83 78 74 70

Current Ratio 0.92 0.79 0.64 0.46

Net Profit Ratio 30.92% 36.98% 41.64% 43.30%
This Project Report has been prepared based on the data furnished by the entrepreneur whose
details are given in the application.

Place : Palamaner
Date: 30-July-2022

N Prakash

Signature of the Beneficiary