B.E.

(Full Time) - END SEMESTER EXAMINATIONS, Nov / Dec 2022

Mechanical Engineering

5thSemester

ME5075 &ENTREPRENEURSHIP DEVELOPMENT

PART- A(10x2=20Marks)

1) What does it mean to be an Entrepreneur?

A)

An entrepreneur is independent in his

Dependency
operations.

An entrepreneur himself raises funds required

Raising of Funds
for the enterprise

Entrepreneur bears the risk involved in the

Risk
business

Operation An entrepreneur operates from out-side.

2) What are the factors affecting the Entrepreneurial growth?

A) Factors affecting the entrepreneurial growth:

Economic Factors

 Capital
 Labor
 Raw material
 Market
 Infrastructure
 Non Economic Factors:

 Cultural Factors
 Social Factors
 Personality Factors

 Technological Factors
 Educational Factors

3) What are the stages of entrepreneurial growth process?

A) Phases of Entrepreneurship Development Programme (EDP)

 Pre- training phase

 Training phase
 Post- training phase

4) How is a TAT test scored?

A) Scoring Categories

These three aspects of test behavior have been objectified as

 Perceptual Organization,
 Perceptual Range, and
 Perceptual Personalization respectively.

5) What is the role of small enterprises?

Small and Medium Enterprises (SMEs) are vital for

 Development of a country

 Helps reshaping the productive sectors

 Generates employment

 Creating an environment for entrepreneurship

 Promotes innovation
Globally, SMEs contribute over 90% of Business, Enterprises and 50-60% of Total
Employment.

6) How many steps are present in the formulation of project?

7) What is Working capital management? And why is it important?

A) Management of working capital is an essential task of the finance manager.

 He has to ensure that the amount of working capital available is neither too large
nor too small for its requirements. A large amount of working capital would mean
that the company has idle funds. Since funds have a cost, the company has to
pay huge amount as interest on such funds.

 If the firm has inadequate working capital, such firm runs the risk of insolvency.
Paucity of working capital may lead to a situation where the firm may not be able
to meet its liabilities.

 Maintaining adequate working capital is not just important in the short-term.

Sufficient liquidity must be maintained in order to ensure the survival of the
business in the long-term as well.

8) Write down the various Capital structure theories.

A)

9) What is the institutional support to entrepreneurs?

A) Services like

 financing,
 technical guidance,
 equipment support,
 training,
 marketing and providing subsidy
 grants are supported by several institutions.
 These institutions provide financial support to promote and develop small
industries and entrepreneurs.

10) What are the taxation benefits available from the State government?
A) The main benefits available to Small Scale Industrial Units can be divided into two
parts as shown in the following figure below:

 Exemption Scheme Available to SSI

 Procedural Concession to SSI
 PART- B(5x 13=65Marks)

11)a) Explain the characteristics of entrepreneur and discuss the various

types of entrepreneurs?
1. A) Hard Work

 Willingness to work hard distinguishes a successful entrepreneur

from unsuccessful one.

 The entrepreneur with his tedious (dullness), sweat-filled hours and

perseverance revive (become active) their business even from on
verge of failure.

 In nutshell (something of small size), most of the successful

entrepreneurs work hard endlessly, especially in the beginning and
the same becomes their whole life.

B) Desire for High Achievement

 The entrepreneurs have a strong desire to achieve high goals in business.

  This high achievement motive strengthened them to surmount (to prevail
over) the obstacles, suppress anxieties, repair misfortunes and devise
expedients and only set up and run a successful business.

C) Highly Optimistic

 The successful entrepreneurs are not disturbed by the present problems

faced- by them.

 They are optimistic for future that the situations will become favorable to
business in future.

 Thus, they can run their enterprises successfully in future.

D) Independence

 One of the common characteristics of the successful entrepreneurs has

been that they do not like to be guided by others and to follow their
routine.

 They resist to be pigeon-holded (Assign to a particular category).

 They liked to be independent in the matters of their business.

E) Foresight

 The entrepreneurs have a good foresight to know about future business

environment.

 In other words, they well visualise the likely changes to take place in
market, consumer attitude, technological developments, etc. and take
timely actions.

F) Good Organiser

 Different resources required for production are divorced from each other.

 It is the ability of the entrepreneurs that brings together all resources

required for starting up an enterprise and then to produce goods.

G) Innovative

 Production is meant to meet the customers' requirement the changing

taste of customers from time to time, the entrepreneurs initiate innovative
activities to produce goods to satisfy the customers' changing the
products.
  The research institutes/ centres established by Tata, Birla, Kirloskar are
examples of the innovative activities taken by the successful
entrepreneurs in our country.

H) Perseverance

 One of the qualities of successful entrepreneurs is that they possess and

exhibit tremendous perseverance in their pursuits.

 They do not give up their effort even if they fail.

 They undergo lots and lots of failures, but donot become disheartened.

 Instead, they take failure as learning experience and make more

dedicated and serious effort on the next time.

 Ultimately become successful.

 Example of sunil mittal, given earlier under “desire for High Achievement”
is an example of entrepreneurial perseverance also.

I) Team Spirit:

 The word “team” refers to T for Together, E for Everyone, A Achieves and
M for More.

 Team, results in synergy (cooperation of two).

 Successful entrepreneurs build teams and work with teammates.

 Team is group of individuals who work in a face-to-face relationship to

achieve a common goal.

 They share collective accountability for the outcome of the teams effort.

Types of Entrepreneurs

Classification on the basis of:

1. Types of Business: Business entrepreneur, trading entrepreneur, industrial

entrepreneur, corporate entrepreneur and agricultural entrepreneur.

2. Use of technology: technical entrepreneur, non-technical entrepreneur and

professional entrepreneur.

3. Motivation: pure entrepreneur, induced entrepreneur, motivated entrepreneur

and spontaneous entrepreneur.
 4. Growth: growth entrepreneur and super growth entrepreneur.

5. Stages in development: First generation entrepreneur, modern entrepreneur and

classical entrepreneur.

6. Others: Area (rural and urban), gender (men and women), scale (micro, small
and medium).

11 (b) Describe the role of entrepreneurship in economic development.

A) 1. Employment opportunities

 Entrepreneurs employ labor for managing their business activities and provide
employment opportunities to a large number of people.
 They remove unemployment problem.

2. Balanced Regional Development

Thus, the entrepreneurs to avail the benefits establish industries in backward and rural areas.

 They remove regional disparities and bring balanced regional development.

 They also help to reduce the problems of congestion, slums, sanitation and
pollution in cities by providing employment and income to people living in rural
areas.
 They help in improving the standard of living of the people residing in suburban
and rural areas.
 Government promotes decentralized development of industries as most of the
incentives are granted for establishing industries in backward and rural areas.

3. Mobilization Of Local Resources

 Entrepreneurs help to mobilize and utilize local resources like small savings and
talents of relatives and friends, which might otherwise remain idle and unutilized.
Thus they help in effective utilization of resources.

4. Optimization Of Capital

 Entrepreneurs aim to get quick return on investment.

 They act as a stabilizing force by providing high output capital ratio as well as
high employment capital ratio.

5. Promotion of Exports
  Entrepreneurs reduce the pressure on the country’s balance of payments by
exporting their goods they earn valuable foreign exchange through exports.

6. Consumer Demands

 Entrepreneurs produce a wide range of products required by consumers. They

meet the demand of the consumers without creating a shortage for goods.

7. Social Advantage

 Entrepreneurs help in the development of the society by providing employment to

people and paves for independent living.
 They encourage democracy and self-governance.
 They are adept in distributing national income in more efficient and equitable
manner among the various participants of the society.

8. Increase per capita income

 Entrepreneurs help to increase the per capita income of the country in various
ways and facilitate development of backward areas and weaker sections of the
society.

9. Capital formation

 A country can attain economic development only when there is more amount of
investment and production.
 Entrepreneurs help in channelizing their savings and savings of the public to
productive resources by establishing enterprises.
 They promote capital formation by channelizing the savings of public to
productive resources.

10. Growth of capital market

 Entrepreneurs raise money for running their business through shares and
debentures.
 Trading of shares and debentures by the public with the help of financial services
sector leads to capital market growth.
11. Growth of infrastructure

 The infrastructure development of any country determines the economic

development of a country, Entrepreneurs by establishing their enterprises in rural
and backward areas influence the government to develop the infrastructure of
those areas.

12. Development of Trader

  Entrepreneurs play an important role in the promotion of domestic trade and
foreign trade.
 They avail assistance from various financial institutions in the form of cash credit,
trade credit, overdraft, short term loans, secured loans and unsecured loans and
lead to the development of the trade in the country

13. Economic Integration

 Entrepreneur reduces the concentration of power in a few hands by creating

employment opportunities and through equitable distribution of income.
 Entrepreneurs promote economic integration in the country by adopting certain
economic policies and laws framed by the government.
 They help in removing the disparity between the rich and the poor by adopting
the rules and regulation framed by the government for the effective functioning of
business in the country.

14. Inflow of Foreign Capital

 Entrepreneurs help to attract funds from individuals and institutions residing in

foreign countries for their businesses.

12 (a) What do you mean by Entrepreneurial motivation? Explain

the Maslow’s hierarchy of needs theory?
 Entrepreneurial motivation may be defined as the process that activates the
entrepreneurs to exert a high level of effort for the achievement of his/her goals.
 In other words, the entrepreneurial motivation refers to the drive or forces within an
entrepreneur that affects his/her direction, intensity and persistence of voluntary
behavior.
Most of the researchers have classified all the factors motivating entrepreneurs into
internal and external factors as follows:

Internal Factors:

 Desire to do something new.

 Become independent.
 Achieve what one wants to have in life.
 Be recognized for one’s contribution.
 One’s educational background.
 One’s occupational background and experience in the relevant field

External Factors

 Government assistance and support.

  Availability of labour and raw material.
 Encouragement from big business houses.
 Promising demand for the product.
 Compelling factors
 Ambitious factors.
Maslow’s hierarchy of needs theory
 Maslow’s theory is based on human needs.
 These needs are classified into a sequential priority from the lower to the higher.
 Abraham Maslow developed the Hierarchy of Needs model in 1940-50s USA, and the
Hierarchy of Needs theory remains valid today for understanding human motivation,
management training, and personal development.
 Maslow’s theory of motivation contends that people act to satisfy their unmet needs

12)b) Explain about the various elements of entrepreneurial competencies.

The essential elements of entrepreneurial competencies are as follows:
(i) Knowledge
(ii) Skills
(iii) Motives and traits.

Knowledge

Innovation is possible only through knowledge. in simple words, knowledge means

collection of information and retention of facts that an individual stores in some parts of his
brain. Creative process provides imagination, germinates ideas, nurtures them and develops
them successfully. But innovation is the development process which translates an idea into
an application. It requires persistence in analytical working out the details of product design
or service, and to develop marketing, obtain finances and plan operations.

Skills

Skill is the ability to demonstrate a system and sequence of behaviors that are functionally
related to attaining a goal. An entrepreneur is required to have certain skills which are as
follows:

(a) Anticipatory skill- foresight into a constantly changing environment.

(b) Visioning Skills- inducing a group to act in accordance with the leader’s purposes or
the shared purposes of a larger group.

(c) Value Congruence Skills- the need to be in touch with employee’s economic, safety,
psychological, spiritual, sexual, aesthetic and physical needs in order to engage people on
the basis of shared motives, values and goals.

(d) Empowerment Skills- the willingness to share power and to do so effectively.

(e) Self Understanding Skills- introspective or self knowledge skill as well as framework
within which leaders understand both their own needs and goals and those of their
employees.
In practice, an entrepreneur who pursues an idea, plans its application, acquires resources
and establishes its market though persistence, planning, organization and leadership needs
the above skills. With the help of these skills, an entrepreneur is expected to perform well in
his entrepreneurial venture.

13)a) What do you mean by small scale industries and describe the
various features of SSI.
 A SSI is an industrial undertaking in which the investment in fixed

assets in plant and machinery, whether held on ownership term or on lease or hire
purchase, does not exceed Rs.1 Crore.

 This investment limit is varied by the government from time to time.

 Entrepreneurs in small scale sector are normally not required to obtain a licence either
from the Central Government or the State Government for setting up units in any part
of the country.
 Registration of a small scale unit is also not compulsory.

Small and Medium Enterprises (SMEs) are vital for

 Development of a country

 Helps reshaping the productive sectors

 Generates employment

 Creating an environment for entrepreneurship

 Promotes innovation

Globally, SMEs contribute over 90% of Business, Enterprises and 50-60% of Total
Employment.

Classification of SSIs

TRADITIONAL SSIs

 It includes khadi and handloom, village industries,handicrafts, sericulture, etc

MODERN SSIs

Modern SSIs produce wide range of goods from comparatively simple items to sophisticated
products such as television sets, electronics, control system, various engineering products
etc
13)b)What are the steps followed in Project appraisal? Describe the Economic and
Organizational aspects of project appraisal.

 Project appraisal can be defined as the promoter taking a second look critically and
carefully at a project as presented by the promoter person who is in no way involved in
or connected with its preparation and who is as such able to take an independent,
dispassionate and objective view of the project in its totality as also in respect of its
various components.

 The person who carries out an appraisal of a project is usually an official from the
financial institutions or a team of institutional officials.
 Project appraisal aims at sizing up the quality of projects and their long-term profitability,
aims at minimising the risk of lending by rectifying their weaknesses and improving their
quality by incorporating into them features/safeguards missed by the promoters either
because of lack of knowledge or information.
 Project appraisal is an exercise whereby a lending financial institution makes an
independent and objective assessment of various aspects of an investment proposition
to arrive at the financing decision.
 Appraisal exercises are basically aimed at determining the viability of a project and
sometimes, also in reshaping the project so as to upgrade its viability.
 This is done by allocating the term finance sought by a promoter.
  The aspects generally considered by the financial institutions are as follows:

ECONOMIC ASPECTS OF PROJECT APPRAISAL

 The economic aspects of appraisal are fundamental as they are logically precede all
other aspects –this is so because the bank will not finance a project unless it stands
assured that the project represents a high-priority use of a region’s resources.
 So, an economic or social analysis looks at the project from the viewpoint of the whole
economy, asking whether the latter will show benefits sufficiently greater than project
costs to justify investment in it.
 The economic benefits brought about by a successful project normally take the form of
an increased output of goods or services, either directly or indirectly. This increased
production will also generate many different forms of additional income, such as
increased wages or employment of labour, larger government revenues, higher earnings
for the owners of capital, or most frequently, a combination of these income benefits.

MANAGERIAL ASPECTS OF PROJECT APPRAISAL

 If the management is incompetent, even a good project may fail. It is rightly pointed out
that if the project is weak, it can be improved upon, but if the promoters are weak and
lack in business acumen, it is difficult to reverse the situation.
 It is therefore, natural that financial institutions very carefully appraise the managerial
aspects before sanctioning assistance for a project.
 If a proper appraisal of the managerial aspects is made in the beginning itself, future
problems in this area can be avoided to a large extent. It is therefore, necessary that the
overall background of the promoters, their academic qualifications, business and
industrial experience, their past performance, etc. are looked into in great detail to
assess their capabilities for implementing the project for which assistance has been
sought.

TECHNICAL ASPECTS OF PROJECT APPRAISAL

  The importance of technical appraisal in project evaluation needs on emphasis.
Technical appraisal of a project broadly involves a critical study of the following
components:
 Location
 Sites
 Size of the plant/Scale of operation
 Technical feasibility
 Technical appraisal analyses the various components of the project from the operational
point of view. It looks into the workings of the production mechanisms and production
patterns.

14)a) Describe some of the financing methods and write its sources of long
term and short-term finance.
A) Sources of Finance

 Finance is the lifeblood of business.

 No business can be carried out without Finance.

 There are several sources of Finance which can be categorized as Internal or

External, Long Term or Short Term and Fixed and Working Capital Finance
Sources of Long Term Finance
 Equity shares –

Such a shareholder has to share the profits and also bear the losses incurred by the
company.

Equity shareholders are regarded as the real owners of the company.

 Preference shares –

A share which entitles the holder to a fixed dividend, whose payment takes priority
over that of ordinary share dividends.

 Debentures:

A debenture is a type of debt instrument issued by a company that is not secured by

physical assets or collateral.
 Public Deposit:

It implies any money received by a company through the deposits or loans collected
from the public.

Sources of Short Term Finance

 Bank Finance

Commercial banks grant short-term finance to business firms which is known as bank
credit.

 Cash Credit

It is an arrangement whereby banks allow the borrower to withdraw money upto a

specified limit.

 Bank overdraft

When a bank allows its depositors or account holders to withdraw money in excess of
the balance in his account upto a specified limit, it is known as overdraft facility.

 Bills Discounting –

Banks also advance money by discounting bills of exchange, promissory notes and
hundies.

When these documents are presented before the bank for discounting, banks credit the
amount to customer's account after deducting discount.

14)b) What do you mean by the term loans and write the
characteristics, features and benefits of term loans?
 A loan is the purchase of the present use of money with the promise to repay the
amount in the future according to a pre-arranged schedule and at a specified rate of
interest.

 A monetary loan that has to be repaid in regular payments over a set period of time is
referred to as a term loan.

 Bank term loans are very a common kind of lending .

 Term loans are generally provided as working capital for acquiring income producing
assets (machinery, equipment, inventory) that generate the cash flows for repayment of
the loan.

CHARACTERISTICS OF TERM LOANS

 Time to maturity

 Repayment Schedule.

 Interest.

 Security.

FEATURES OF TERM LOANS

 Type of debt financing

 FI provides rupee term loan and foreign currency term loan

 Mainly for investment in fixed assets

 Also for getting technical know-how, preliminary expenses and margin money for
working capital

 Foreign currency term loan for import of plant and machinery

 Assets which are financial with term loan is the prime security

 Other assets of the firm can be collateral

 Repayable in equal half yearly or quarterly instalment

 Interest rate charged is as per credit risk of the project

 In case of default of payment penal interest is charged

BENEFITS OF TERM LOANS

• Fixed rate –

• enjoy the peace of mind of fixed monthly repayments

• Variable rate –

• linked to base rates (Rates can rise or fall)

 Repayment holidays - improve your cash flow by making no loan repayments or
repaying only interest for a fixed term after drawing down your loan

 Repayment style

choose from capital and interest, capital only or interest only

 Repayment frequency

pick the frequency that suits you from monthly, quarterly, half yearly and yearly

 Staged drawdown

save on interest costs and enjoy lower initial payments Make one-off repayments

use surplus cash to reduce interest charges and benefit your business

 Flexibility

15)a) What are institutions available in central level in supporting

small scale industries.

 Small-scale Industries Board (SSI Board)

  Constituted in1954 to facilitate the coordination and inter- institutional linkages for the
development of SSI sector

 The Board Is an apex advisory body constituted to render advice to the government on
all issues pertaining to the SSI sector

 The office of the Development Commissioner(Small-Scale Industry) serves as the

secretariat for the board

 The Board operates broadly in the following areas:

 -Policies &programs

 -Development of industries in specific region like North east

 -Ancillary development, quality improvement,

 -Credit facilities, taxation and

 -Industrial sickness

Khadi and Village Industries Commission(KVIC)

 Statutory body created by an act of Parliament

 It is charged with planning, promotion, organization and implementation of the program

for the development of Khadi and other village industries in the rural areas in
coordination with other agencies engaged in rural development.

 KVIC’s functions comprise building up are serve of raw materials and implements for
supply to producers, creation of common service facilities for processing of raw
materials and provision of marketing of KVIC products.

 KVIC is entrusted with the task of providing financial assistance to institutions or persons
engaged in the development and operation of Khadi and village industries and guide
them through supply of designs, prototypes and other technical information

Small Industries Development Organization(SIDO)

 Established in 1954 on recommendation of Ford Foundation

 Over the years, it had seen its role evolve into an agency for advocacy, hand holding and
facilitation for the small industries sector.
  SIDO provides facilities for testing, tool mending, training for entrepreneurship
development, preparation of project and product profiles, technical and managerial
consultancy, assistance for export, pollution and energy audits, and so on.

SIDO provides economic information services and advises the government in policy formulation
for the promotion and development of SSIs

National Small Industries Corporation Ltd.(NSIC)

 Established in 1955 by GOI with the main objectives to promote, aid and foster the
growth of SSIs in the country

 Over four decades of transition and growth in the SSI sector, NSIC has provided strength
through a progressive attitude of modernization, upgradation of technology, quality
consciousness, strengthening linkages with large and medium – scale enterprise and
boosting exports of products from small enterprises

Main services provided by NSIC are:

 Machinery and Equipment (Hire Purchase / Lease scheme)

 Financial Assistance Scheme

 Assistance for Procurement of Raw Material

 Government Store Purchase Program Technology Transfer Centre (TTC)

 Marketing Assistance

National Science and Technology Entrepreneurship Development Board (NSTEDB)

 Established in 1982 by GOI, is an institutional mechanism to help promote knowledge-

driven and technology-intensive enterprises

 Major objectives are:

 promote and develop high-end entrepreneurship for S& T

 manpower as well as self-employment by utilizing S&T infrastructure and by using S &T

methods

 facilitate and conduct various informational services relating to promotion of

entrepreneurship
 network agencies of support system, academic institutions and R&D organizations to
foster self-employment using S&T with special focus on backward areas

 act as a policy advisory body with regard to entrepreneurship

National Productivity Council(NPC)

 Autonomous institution functioning under the overall supervision of the Ministry of

Industry, GOI

 Primary objective is to act as a catalyst in enhancing the productivity of all sectors of the
economy, including industry and agriculture

 Administered by a tripartite Governing Council (GC) which has equal representation

from the government, industry and trade unions

 Active in the field of consultancy and training and has a number of specialized divisions
to provide tailor- made solutions to agriculture and industry. These divisions, manned by
trained consultants, deal with issues related to industrial engineering, plant engineering,
energy management, HRD, informal sector, agriculture and so on

 NPC is a member of the Asian Productivity Organization (APO), Tokyo, an umbrella body
of all productivity councils in Asian region

 To channelise expertise of NPC to small-scale and informal sector, SIDBI has tied-up with
NPC for enhancing technology in small units

 Institutional support system is necessary at three stages enterprise development:

¨ Inception or Promotion

¨ Day-to-day management

 Expansion and Diversification

 Three dimensions of institutional support system are:

 Central Government

¨ State Government

 Non-government Support System

SMALL SCALE INDUSTRIES BOARD

 Established in 1954 to provide effective coordination and inter-institutional linkages for
the benefit of small scale sector.

 It consists of the following members:

¨ Union Industry Minister

¨ State Industry Minister

¨ Selected members of Parliament

¨ Secretaries of department concerned

¨ Financial Institutions

¨ Eminent experts in the field

15)b) Explain the various taxation benefits available to small

scale entrepreneurs.
Taxation Benefits Available to Small Scale Entrepreneurs

 The main benefits available to Small Scale Industrial Units can be divided into two parts
as shown in the following figure below:

 Exemption Scheme Available to SSI

 Procedural Concession to SSI
 (a) Exemption Scheme 1:

 A unit can avail full exemption up to 150 lakhs and pay normal duty thereafter. Such
units can avail CENVAT credit on inputs only after reaching a turnover of 150 lakhs in the
financial year.

 This concession is given by Notification No. 8/2003, dated March 1, 2003 (this
Notification is popularly known as SSI exemption Notification).

 All industries irrespective of their investment or the number of employees are eligible
for concession.

 In fact even a large industry will be eligible for the concession of its annual turnover is
less 4 crores.

(b) Exemption Schemes 2:

 A unit intending to avail CENVAT credit on inputs on its entire turnover has to pay
normal duty without any concession.

Exemption Scheme Available to SSI

Exemption Scheme 1

 Full Exemption of up to 150 lakhs No CENVAT Credit on Inputs Pay Normal duty after
Turnover of 150 lakhs and avail CENVAT on Inputs

Exemption Scheme 2

 Avail CENVAT credit on Inputs on its Entire Turnover Pay Normal Duty without any
Concession

Procedure to Obtain Exemption Scheme 2

 The first option, i.e., nil duty up to 150 lakhs and normal duty for subsequent clearance
is automatic. However, if assessee wants to avail second option he has to take the
following steps:

 Information of choice of option: He must inform its choice of option to the department.

 Supportive Information: He should inform in writing to Assistant Commissioner with a

copy to Superintendent of Central Excise, the following:

 Name and address of manufacturer,

 Location of factories

 Description of specified goods produced,

 Date from which option under the SSI exemption notification has been exercised.

 Aggregate value of clearances of specified goods till the date of exercising the option.

 Time for availing the option: The second option is available anytime during the year but
the option once availed cannot be withdrawn during the financial year.

 2. Procedural Concession to SSI: Following are some procedural concessions to SSI:

 (a) Quarterly Return: The SSI units availing SSI concession need not submit monthly ER-I
return. They have to submit a quarterly ER-1 return.

 (b) Payment of Duty: SSI units have option to pay duty quarterly.

 (c) Export Procedure for SSI: The SSI units are not covered under excise provisions and
have to follow simplified export procedures.

 (d) Sending Material for Job Work by Exempt SSI Unit: SSI units can send its raw
materials or semi-finished material to another unit for job work. Such another unit can
carry out job work and return to small enterprise without payment of duty. Further
processing can be done by small enterprises on these inputs and automatically clear its
final product without the payment of duty when its total turnover is below 150 lakhs.

 (e) Exempted Small Units from Registration: Exempted small units, having turnover
below 150 lakhs, which are exempt from duty, are also exempted from provisions of
registering their units with excise authorities.

 (f) Visit of Officers only with Prior Approval: With the specific permission of Assistant
Commissioner the audit parties, excise inspectors and preventive parties can visit small
scale enterprises and for a specific purpose. The entrepreneurs have to enter relevant
particulars in visitors’ book maintained by registered person.

 (g) Audit: Audit of SSI units is done in two to five years. Even small units may be audited
only once in five years.

PART- C(1x 15=15Marks)

16)a) Write the sequential stages of project formations

 A project comprises a series of activities for achieving predetermined objective or set of
objectives. In view of this, to begin with, the objectives of the project should be defined
as precisely as possible.

 The objectives maybe social, economic or a combination of both and they can be
defined under the following categories:

 General objectives

 Operational objectives

 A general objective merely states in broad terms the achievements expected whereas
an operational objective specifically mentions results expected from the implementation
of the project or scheme.
b)Case Study
(a) In what way is the body shop experiencing problems similar to those of many
rapidly growing companies.

By the improper implementation in advertising strategies of the body shop,

 they were dependent on Publicity and they were concentrated much on company’s
philosophy of doing good instead of concentrating on profits.

(b) If you were hired as a consultant, which problem would you consider most critical.

The problem of marketing the products to the society that the company manufacture, is of
most critical as the company lacked a plan for the future and had no clear sense of direction in
its marketing

(c) In what ways could the company innovate radically? Identify some adventurous
directions the company might consider.

Adventurous directions the company might consider

 The company should have prior knowledge on the products that are of use and
environmentally friendly.
 Apart from the competitors' products, the company should produce goods in an
innovative way rather than on a regular way to be in a pace with competitors.
 The company should know the product life cycle so that they cannot incur any losses
much in the future.