PROJECT REPORT

M/S. OM SAMARTH MUSIC SHOPPY

 HIGHLIGHTS OF THE PROJECT

1. Name of the Firm : M/S. OM SAMARTH MUSIC SHOPPY

2. Address of unit : Block No. 622/9, C S No. 1291, Opp. Old Police
Station, Kolhapur Road, Jaysingpur, Dist.
Kolhapur

3. Constitution : Proprietorship

4. Nature of Activity : Trading of Music Systems and Allied items

5. Contact Person : Mr. Prashant Babasaheb Avate

6. Working Capital Requirement : ₹ 7.87 Lakhs

7. Means of Finance : Capital ₹ 2.87 Lacs

Bank Loan ₹ 5.00 Lacs

Total ₹ 7.87 Lacs

Project Report of M/s. Om Samarth Music Shoppy, prepared by CA Shreyans Tejpal Shah
 PROJECT REPORT
OF
MUSIC SYSTEMS TRADING
M/S. OM SAMARTH MUSIC SHOPPY

INTRODUCTION

Music systems have become an integral part of our daily life. Music, is nature’s best
stress reliever. Thus, in our day to day life, music is a need for the peace of our mind.
The varied range of home audio devices includes home theatre systems, sound bar
systems, 4.1 & 5.1 speakers, speaker systems, DVD / Blue Ray players, video player devices,
projectors, headphones, MP3 and MP4 players, etc.

In this project, the proprietor is planning to open a music Shoppe where he has
planned to stock variety of music systems, speakers systems and other allied items. He
intends to stock most of the brands and non-branded also, so that to cater all types of
customers.

Project Report of M/s. Om Samarth Music Shoppy, prepared by CA Shreyans Tejpal Shah
INTRODUCTION AND CONSTITUTION OF THE FIRM

This project is proposed by Mr. Prashant Balasaheb Avate in his proprietary capacity
with the trade name as M/s. Om Samarth Music Shoppy.

Project Report of M/s. Om Samarth Music Shoppy, prepared by CA Shreyans Tejpal Shah
LAND AND BUILDING

This project is proposed at Block No. 622/9, C S No. 1291, opp. Old Police Station,
Kolhapur road, Jaysingpur. The said shop is owned by the proprietor and in his possession.

PRODUCTS

Following are some examples of the music systems and other items to be stocked: -

1. 5.1 Home Theater system

2. DVD / Blue Ray Players
3. 2 / 2.1 Channel Speakers
4. Twitters
5. Sub-woofers
6. Connectors and Cables
7. Sample CDs / DVDs
8. MP3 Players

MACHINERY

There are no machinery required for the project as it is a purely trading concern.

CAPACITY

Being a trading business, capacity cannot be defined and quoted. After studying the
existing demand and availability of the business, the proprietor estimates the business. The
financial projections are based on the same.

*****

Project Report of M/s. Om Samarth Music Shoppy, prepared by CA Shreyans Tejpal Shah
 M/S. OM SAMARTH MUSIC SHOPPY

PROJECT OF MUSIC SHOPPEE

COST OF PROJECT :
₹ Lacs

Land & Building Own

Building Improvement Own

Machinery
List of Machinery Attached 0.50

Electrical Installation & Erection 0.25

Furniture & Other Assets 0.75

1.50

MEANS OF FINANCE :

Equity Share Capital 1.50

Bank Term Loan 0.00

1.50

REQUIREMENT OF WORKING CAPITAL

Display Stock 7.77

Other Current Assets 0.10

7.87

Margin 2.87

Bank Finance 5.00

Cash Credit 5.00

Project Report Of M/s. Om Samarth Music Shoppy, Prepared by CA Shreyans Tejpal Shah
INTEREST

Bank Term Loan @ 15.00% 0.00

Bank Cash Credit @ 15.00% 0.75

0.75

DEPRECIATION ₹ In Lacs

Building 10% 0.00

Machinery 15% 0.11

0.11

LABOUR Qty Salary / Month Months ₹ In Lacs

Sales Staff 2 8500.00 12.00 2.04

Helpers 2 6500.00 12.00 1.56

3.60

POWER

Load Connected 5.00 KW

Maximum Demand 5.00 KW
Consumption per day 25.00 Units
Consumption Per Year 7500.00 Units
Total Cost @ ₹ 10.50 0.79 ₹ Lacs

SALES / REVENUE ₹ Lacs

Music Systems 48.00

Other Allied Sales 12.00

60.00

CONSUMABLES ₹ Lacs

Music Systems 38.40

Allied Materials 8.40

46.80

Project Report Of M/s. Om Samarth Music Shoppy, Prepared by CA Shreyans Tejpal Shah
PROFITABILITY STATEMENTS : @ 80 % operating ₹ In Lacs

Sales 60.00

60.00

Less :
Consumables 46.80

Labour 3.60

Power 0.79

Operating Expenses 1.80

52.99 52.99

7.01
Less : T. L. Interest 0.00

C. C. Interest 0.75

Depreciation 0.11

0.86 0.86

Net Profit Before Tax 6.15

Less :- Income Tax @ 10% 0.62

Net Profit After I. Tax Prov. 5.54

Add :Depreciation 0.11

CASH ACCRUALS 5.65

Project Report Of M/s. Om Samarth Music Shoppy, Prepared by CA Shreyans Tejpal Shah
 BREAK EVEN POINT ANALYSIS

₹ In Lacs

I II III IV V

Fixed Costs

Depreciation 0.11 0.10 0.08 0.07 0.06

Interest on term loan 0.00 0.00 0.00 0.00 0.00

Wages / Salaries : Fixed : 80 % 2.88 3.17 3.48 3.83 4.22

Utilities : Fixed : 20 % 0.00 0.00 0.00 0.00 0.00

Rent / Lease 1.80 1.98 2.18 2.40 2.64

4.79 5.24 5.74 6.30 6.91

Variable Costs

Raw Materials 46.80 51.48 56.63 62.29 68.52

Power & Fuel 0.79 0.87 0.95 1.05 1.15

Salaries & Wages : Variable : 20% 0.72 0.79 0.87 0.96 1.05

Utilities : Variable : 80% 0.00 0.00 0.00 0.00 0.00

48.31 53.14 58.45 64.30 70.73

Contribution 11.69 12.86 14.15 15.56 17.12

P/V ratio (contribution to sales) 0.19 0.19 0.19 0.19 0.19

Break even sales Rs.Lacs 24.59 26.91 29.48 32.32 35.46

Break Even % 40.99% 40.77% 40.60% 40.47% 40.37%

Project Report Of M/s. Om Samarth Music Shoppy, Prepared by CA Shreyans Tejpal Shah
 M/S. OM SAMARTH MUSIC SHOPPY

PROFITABILITY STATEMENT (FIVE YEARS)

₹ in Lacs

PARTICULARS I II III IV V
Utilization % 80% 88.00% 96.80% 106.48% 117.13%
Sales 60.00 66.00 72.60 79.86 87.85

60.00 66.00 72.60 79.86 87.85

Less- Direct Expenditures

- Raw Material / Purchases 46.80 51.48 56.63 62.29 68.52
- Labour 3.60 3.96 4.36 4.79 5.27
- Power 0.79 0.87 0.95 1.05 1.15
- Mfg. Expenses 1.80 1.98 2.18 2.40 2.64

52.99 58.29 64.11 70.53 77.58

Gross Profit 7.01 7.71 8.49 9.33 10.27

Less- Indirect Expenditure :

- Interest on T. L. 0.00 0.00 0.00 0.00 0.00
- Interest on C. C. 0.75 0.75 0.75 0.75 0.75
- Depreciation 0.11 0.10 0.08 0.07 0.06

0.86 0.85 0.83 0.82 0.81

Net Profit Before I. Tax 6.15 6.87 7.65 8.51 9.46

Less- I. Tax Provision 0.62 0.69 1.15 1.70 1.89

Net Profit After I. Tax prov. 5.54 6.18 6.51 6.81 7.57

Add- Depreciation 0.11 0.10 0.08 0.07 0.06

Cash Accruals 5.65 6.28 6.59 6.88 7.63

Project Report Of M/s. Om Samarth Music Shoppy, Prepared by CA Shreyans Tejpal Shah
 CASH FLOW & FUND FLOW STATEMENT

₹ in Lacs

I II III IV V

Sources of Funds

Cash Accruals 5.65 6.28 6.59 6.88 7.63

Increase in Capital 4.37 0.00 0.00 0.00 0.00

Increase in Term Loan 0.00 0.00 0.00 0.00 0.00

Increase in Bank Borrowing 5.00 0.00 0.00 0.00 0.00

Increase in U/S Loan 0.00 0.00 0.00 0.00 0.00

Total Application (A) 15.02 6.28 6.59 6.88 7.63

Disposition of Funds

Pre-op Expenses 0.00 0.00 0.00 0.00 0.00

Increase in Capital Expenditure 1.50 0.00 0.00 0.00 0.00

Decrease in Term Loan 0.00 0.00 0.00 0.00 0.00

Decrease in Unsecured loan 0.00 0.00 0.00 0.00 0.00

Interest 0.00 0.00 0.00 0.00 0.00

Withdrawals 4.80 4.80 6.00 6.00 7.20

Increase in Working Capital 7.87 0.75 0.75 0.75 0.75

Others (specify) 0.00 0.00 0.00 0.00 0.00

Total Disposition (B) 14.17 5.55 6.75 6.75 7.95

Opening Balance 0.00 0.85 1.57 1.41 1.54

Net Surplus (A-B) 0.85 0.73 -0.16 0.13 -0.32

Closing Balance 0.85 1.57 1.41 1.54 1.22

Project Report Of M/s. Om Samarth Music Shoppy, Prepared by CA Shreyans Tejpal Shah
 PROJECTED BALANCE SHEET

₹ in Lacs

I II III IV V
Liabilities

Proprietor's Capital 4.37 5.11 6.49 6.99 7.80

Profit for the year 5.54 6.18 6.51 6.81 7.57

Less Withdrawals 4.80 4.80 6.00 6.00 7.20

Capital in Business 5.11 6.49 6.99 7.80 8.17

Term Loans 0.00 0.00 0.00 0.00 0.00

Bank Borrowing for W. C. 5.00 5.00 5.00 5.00 5.00

Unsecured Loans 0.00 0.00 0.00 0.00 0.00

Total 10.11 11.49 11.99 12.80 13.17

Assets :

Gross Block 1.50 1.50 1.50 1.50 1.50

Depreciation 0.11 0.21 0.29 0.36 0.42

Net Block 1.39 1.29 1.21 1.14 1.08

Capital WIP 0.00 0.00 0.00 0.00 0.00

Current Assets 7.87 8.62 9.37 10.12 10.87

Cash & Bank balance 0.85 1.57 1.41 1.54 1.22

10.11 11.49 11.99 12.80 13.17

0.00 0.00 0.00 0.00 0.00

Note: -
Capital WIP denotes proposed expansion in future.

Project Report Of M/s. Om Samarth Music Shoppy, Prepared by CA Shreyans Tejpal Shah
 INTEREST SCHEDULE :

₹ in Lacs

PARTICULARS TERM LOAN INTEREST CASH CREDIT INTEREST

15.00% 15.00%

BALANCE 0.00 5.00

[-] 1st Yr. Installment 0.00 0.00 0.00 0.75

BALANCE 0.00 5.00

[-] 2nd Yr. Installment 0.00 0.00 0.00 0.75

BALANCE 0.00 5.00

[-] 3rd Yr. Installment 0.00 0.00 0.00 0.75

BALANCE 0.00 5.00

[-] 4th Yr. Installment 0.00 0.00 0.00 0.75

BALANCE 0.00 5.00

[-] 5th Yr. Installment 0.00 0.00 0.00 0.75

BALANCE 0.00 5.00

Project Report Of M/s. Om Samarth Music Shoppy, Prepared by CA Shreyans Tejpal Shah
 DEPRECIATION SCHEDULE

₹ in Lacs

PARTICULARS Building Machinery Total Depr.

10% 15%

OP. BALANCE Own 0.75

[-] 1st YR. Depr. 0.00 0.11 0.11

W. D. V. 0.00 0.64

[-] 2nd Yr. Depr. 0.00 0.10 0.10

W. D. V. 0.00 0.54

[-] 3rd YR. Depr. 0.00 0.08 0.08

W. D. V. 0.00 0.46

[-] 4th Yr. Depr. 0.00 0.07 0.07

W. D. V. 0.00 0.39

[-] 5th Yr. Depr. 0.00 0.06 0.06

W. D. V. 0.00 0.33

Project Report Of M/s. Om Samarth Music Shoppy, Prepared by CA Shreyans Tejpal Shah