18MT560 – Accounting & Finance

DETAILED
PROJECT
REPORT

20F009 Arishwa M
20F019 Deepak R
20F031 Jaysree V
PROJECT PROFILE - All Terrain Vehicle

 An all-terrain vehicle (ATV), also known as a light utility vehicle (LUV), a quad bike, or simply a quad,
is a vehicle that travels on low-pressure tires, with a seat that is straddled by the operator, along with
handlebars for steering control.
 As the name implies, it is designed to handle a wider variety of terrain than most other vehicles.
PLANT & MANUFACTURING

PLANT CAPACITY PER ANNUM

 No of ATV’s Manufactured in a year : 20,000 ATV’s

Component Split Up
 No. of Components required to make an ATV : 6836
 No. of in-house Manufactured components : 2743
 No. of outsourced components : 2125
 No. of OEM Components : 1968
 MARKET DEMAND FOR ATV’s

 Asia-Pacific would exhibit the highest CAGR of 6.2% during 2022-2031

Source : https://www.alliedmarketresearch.com/all-terrain-vehicle-market
BASIS OF PROJECT SELECTION

The global all-terrain vehicle market is witnessing growth, due to increase

in trend of
 adventure sports and recreational activities,
 rise in demand for ATV in military activities, and
 government rules to support driving ATVs on road.

In recent days, tourists are highly attracted to the trails of ATV along with
related activities for recreational purposes. Many tourism councils are
introducing ATV related activities by building tracks for these vehicles to
attract and retain visitors.
 PRESUMPTION

a) The cost in respect of plant and machinery, raw materials and selling price of finished product
are those generally obtained at the time of preparation of project profile and may vary.
b) The salary and wages of staff and laborers has been taken as per present market rate.
c) The time period for achieving full envisaged capacity utilization is 18 Months.
d) Working days per year is considered 300 days and working hours is 8 hour per day considering
single shift.
e) The rate of interest on Bank loan has been considered as 12% p.a. which may vary from time to
time.
 PRODUCTION CAPACITY PER ANNUM

At 75% Utilization Capacity

Items Nos. Rate (incl. tax) Total

       

ATV - Buggy 7,500 8,00,000.00 INR 600 Cr

ATV -Quad 7,500 6,00,000.00 INR 450 Cr

       

Total Turnover (incl. Tax)     INR 1050 Cr

FINANCIAL ASPECTS

FIXED CAPITAL

1. Land & Building: Factory Shed 40,000 sq.mtrs for lease @ Rs. 60,00,000 for 5 years

2. Furniture: Office Furniture Rs. 4,00,000

Machinery

Particulars Quantity Rate Total (Rs)

       
Manufacturing Section      
5-Axis CNC 2 15,00,000 30,00,000
Gear Hobbing 2 9,00,000 18,00,000
CNC Tube Bending 2 10,00,000 20,00,000
Laser Cutting 2 4,00,000 8,00,000
TOTAL A     76,00,000
       
Welding Section      
TIG Welding 2 17,000 34,000
MIG Welding 2 14,000 28,000
TOTAL B     62,000
       
Assembly Section      
Hoist Assembly 3 1,00,000 3,00,000
Torque Gun 10 10,000 1,00,000
Tools   50,000 50,000
Tuning Equipments 5 30,000 1,50,000
TOTAL C     6,00,000

TOTAL     82,62,000
TOTAL FIXED CAPITAL

 Land & Development : -NIL-

 Furniture : 04,00,000
 Machinery : 82,62,000
_______________

TOTAL : 86,62,000
_______________
WORKING CAPITAL

WORKING CAPITAL PER MONTH

Sl. No Particulars Employee Remuneration Total (Rs)

1 Manager 3 50,000 150000

2 CNC Operator 1 25,000 25000

3 Gear Hobbing Operator 1 25,000 25000

4 CNC Bending Operator 1 25,000 25000

5 Laser Cutting Operator 1 20,000 20000

6 Welders 4 25,000 100000

7 Laborers 15 12,500 187500

        532500

ADD perquiste (20%) 106500

  TOTAL: 639000
RAW MATERIAL

RAW MATERIALS PER MONTH

Sl. No Particular Weight (Kg) Cost per item Total Rs

1
4130 Tubes 45000 100 45,00,000

2
Billets (All Kind) 90000 5000 45,00,00,000

3
Sheet Metal 10000 2000 2,00,00,000

4
Metal Plates 15000 3000 7,50,00,000

5
PP Sheet 5000 1000 50,00,000

6
Filler Rods 2000 100 2,00,000

7
Lubricants 1000 90 90,000

TOTAL 55,47,90,000
Monthly Other Expenses

 Rent : 1,00,000
 Tax & Insurance : 15,00,000
 Electricity & Utilities : 4,00,000
 Office & Administrative Expenses : 20,00,000
 Travelling & Transportation : 10,00,000
 Repair & Maintenance : 1,00,000
 Misc. Expenses : 50,000
 Sales Promotion : 1,00,000
________________

TOTAL : 52,50,000
________________
TOTAL WORKING CAPITAL

Total Working Capital per Month

 Raw Material Consumption : 55,47,90,000
 Salary & Wages : 00,06,39,000
 Other Charges : 00,52,50,000
_____________________

TOTAL :56,06,79,000
_____________________

Total Working Capital for 3 Months

 Raw Material Consumption : 55,47,90,000 *3
 Salary & Wages : 6,39,000*3
 Other Charges : 52,50,000*3
______________________

TOTAL :1,68,20,37,000
______________________
TOTAL CAPITAL INVESTMENT

 Fixed Capital : 0,00,86,62,000

 Working Capital for 3 Months : 1,68,20,37,000

______________________

TOTAL : 1,69,06,99,000
______________________
FINANCIAL ANALYSIS

Cost of production per year

 Total Recurring Expenditure : 1,68,20,37,000

 Depreciation on Plant & Machinery @15% p.a. : 0,00,12,39,300
 Depreciation on Furniture @10% p.a. : 0,00,00,40,000
 Interest on Total Capital Investment @12% p.a. : 0,20,88,83,880
_________________________

TOTAL : 1,89,22,00,180
_________________________
Turnover Per Year
Items Nos. Rate (incl. tax) Total

       

ATV - Buggy 7,500 8,00,000.00 INR 600 Cr

ATV -Quad 7,500 6,00,000.00 INR 450 Cr

       

Total Turnover (incl. Tax)     INR 1050 Cr

Net Profit Per Year

Turnover per year – Cost of Production per year

= Rs. 10,50,00,00,000 – Rs. 1,89,22,00,180 = 8,60,77,99,820

Profit Ratio on Sale = 8,60,77,99,820 x 100

____________________________
= 81.98 %
10,50,00,00,000

Rate of Return = 8,60,77,99,820 x 100

____________________________
= 509.12 %
1,69,06,99,000
BEP ANALYSIS

FIXED COST
 Depreciation on Plant & Machinery : 00,12,39,300
 Depreciation on Furniture : 00,00,40,000
 Interest on Total Capital Investment : 20,88,83,880
 Rent : 00,01,00,000
 Insurance : 00,15,00,000
 40% Salary & Wages : 00,02,55,600
 40% of other expenses excluding rent & insurance : 00,14,60,000

_____________________

TOTAL : 21,34,78,780
_____________________
B.E.P. = Fixed Cost x 100 21,34,78,780 x 100
___________________________
= __________________________________________

Fixed Cost + Profit 21,34,78,780 + 8,60,77,99,820

21,34,78,78,000
____________________________
= 2.42 %
8,82,12,78,600