REPAIR & SERVICING OF ELECTRICAL APPLIANCES

SERVICE CAPACITY : Repairing of Appliance – 5000 (Per annum)

VALUE : Rs. 27, 50,000/-

YEAROF PREPARATION : 2020 – 2021

PREPARED BY : ELECTRICAL DIVISION

MSME - Development Institute,
Shaheed Capt. Gaur MargOppt.
Okhla Industrial Area, Estate Okhla,
New Delhi:- 110020.
Tele. (91) 011-26838269, 26838068, 6838118.
Tele/Fax No.: (91) 011-23838016.

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1. INTRODUCTION

In almost every home there are horde of appliances that practically remain in
use throughout the day to provide us the comfort and easiness of life that we
deserve. We are really grateful to these appliances which are necessity of every
home. And if you are grateful to such appliances then you must care for them too.
The breakdown of electrical domestic devices is inevitable as machines after long
run tend to break down due to wear & tear. At times they break down early due to
over use. The electrical appliances like mixer/ grinder, geysers, water heater, fan,
electric iron, etc. are widely used in almost every household. The major
manufacturers are Usha Electrical, Bajaj Electrical, Crompton Greaves, Onida,
Videocon, LG etc. These electrical appliances do need periodic servicing,
maintenance and repair actively. Though there are a number of authorized repair &
servicing centers, provided by the authorized dealers network but still there is wide
spread need of the repair & servicing centers to cater the need of repair and servicing
activity for these appliances specially in semi-urban and rural areas

2. MARKETPOTENTIAL

This is a service-oriented industry to cater to the needs of the repair &

servicing of Electrical Appliances. There is hardly any household which does
not possess these items. In course of time, these items/ appliances need periodic
servicing and repair requirement. Therefore, there is a tremendous scope for the
repair & servicing centers, especially in semi-urban and Rural Areas. This can
be undertaken by the educated-unemployed youths of the area with a little skill
development without much capital requirement.

1. BASIS ANDPRESUMPTIONS

i. The basis for calculation of production capacity has been taken on

single shift basis on 75% efficiency.
ii. The maximum capacity utilization on single shift basis for 300 days a
year. During first year and second year of operations the capacity
utilization is 60% and 80% respectively. The unit is expected to achieve
full capacity utilization from the third yearonward.
iii. The salaries and wages, cost of raw material, utilities, rents, etc. are
based on the prevailing rates in and around Delhi. These cost factors
are likely to vary with time andlocation.
iv. Interest on term loan and working capital loan must be preferably

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 current
rate.Otherwise,therateof12.5%onanaveragemaybetaken.Thisratema
y vary depending upon the policy of the financial institutions/
agencies from time totime.
v. The cost of machinery and equipments refer to a particular/make
model and prices areapproximate.
vi. The break-even point percentage indicated is of full capacityutilization.
vii. The project preparation cost etc. whenever required could be
considered under pre-operativeexpense.

4. IMPLEMENTATIONSCHEDULE

The major activities in the implementation of the project have been

listed and the average time for implementation of the project is estimated at 12
months:
Sl. No. Activity Period (in
months)
(Suggestive)
1. Preparation of Project Report 1
2. Registration and other formalities 1
3. Sanction of loan by financial institutions 3
4. Plant & Machinery
i. Placement of orders 1
ii. Procurement
iii. Power corinection /Electrification 2
iv. Installation/Erection of 2
machinery/ Test Equipment
2
5. Procurement of rawmaterial 2
6. Recruitment of Technical Personnel etc. 2
7. Trial/Commercial Operation 11th – 12th month

Note:
1. Many of the above activities shall be initiatedconcurrently.
2. Procurement of raw materials commences from the 8thmonthonwards.

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 3. When imported plant and machinery are required, the implementation
period of project may vary from 12 months to 15months

5. TECHNICALASPECTS

5.1. Process ofServicing

Basically the process of repairing and servicing of Electrical

Appliances is servicing in nature. The periodic servicing of the appliances
can be carried out at a time interval as and when the customer brings the
appliances for servicing. The appliances i.e. electric fans, mixer, geysers,
iron etc. which is to be serviced is de- assembled. Then it is overhauled and
worn out parts like ball bearings, bushes etc. are replaced with the new one.
Finally it is lubricated and is re-assembled and tested. On the other hand,
under repairing activity, after testing and fault diagnosing, the repair
activity can be carried out by rectifications or replacement of worn out/
defective parts. Apart from these, the re-winding of burnt armature of the
motorized appliances is also carriedout.

5.2. Quality Control andStandards

There is no relevant specification of Bureau of Indian standard governing
the Repairing and Servicing of Electrical Appliances. However IS: 302:2008
(Part 1) & IS 302- (PART 2) with 35 sections for various appliances is
applicable as safety standard. The servicing unit shall have in house testing
facility for conducting the leakage current test and protection against electric
shock with other equipment as per abovespecification.

5.3. ServiceCapacity
Quantity : 5,000 Repairing & Servicing of Appliances
Value : Rs.27, 50,000/-

5.4. Motive Power 5KW

5.5Pollution Control

The Repairing/ Servicing Process of electrical appliance does not pose any
problems for pollution hence there is no need to install the pollution control

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equipments. However the entrepreneurs are advised to take "No Objection
Certificate" from the State Pollution Control Board.

5.6. Energy Conservation

The following steps may help for conservation of electrical energy:

i. Adoption of energy conserving technologies, repairing/ servicing aids
and testing facilities.
ii. Efficient management of Repairing/ Servicing Process and systems, QC
and testing equipments for yielding maximum EnergyConservation.
iii. Optimum use of electrical energy for heating during soldering process
can be obtained by using efficient temperature controlled soldering and
de soldering stations.
iv. Use switching on-off of the lights; use of compact fluorescent lamps
wherever possibleetc.

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6. FINANCIALASPECT
6.1. FixedCapital
Land & Building:
Area(Sq. Rent/ Sq. Rent/month
S.NO DESCRIPTION Mtr.) Mtr. (Rs.)
1 Work Shed 50
2 Office, Stores 10
3 TotalBuiltu area onRent 60 200 12,000
Total 12,000

6.1.1. Machinery andEquipments

(a) ServicingEquipments
S.No. Desert Qty Rate (Rs. Yalue
1 Motorizedwinding machine 1 50,000 50,000
2 Manual winding machine 2 22,500 45,000
3 '/2 Inch Bench Drilling machine 1 4,500 4,500
4 Portable drilling machine 1 3,500 3,500
5 Bench Grinder 200 mm 1 5,000 5,000
6 Soldering Machine 2 1000 2,000
Sub T o t a l 1,10,000

(b) TestingEquipments
S.No. Description Qty. Rate Value
(Rs.)
7 2.5 KV High Voltage Tester 1 13,000 13,000
8 Panel board for testing 1 9,000 9,000
9 3 1/2 digit clamp meter 1 3,000 3,000
10 Megger 500 volts DC 1 14,000 14,000
11 Millimeter 1 3,000 3,000
12 Leakage current tester 1 6,000 6,000
13 Auto Transformer 10 Amps 1 4,000 4,000
14 Other misc. instruments and meters LS 2,000 2,000

Sub Total 54,000

Total 1, 64,000

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6.1.2. Other Fixed Assets
(c) Power connection, erection and electrical LS. 16,400
installation (10%)
(d) Jig, Fixture &tooling 15,000
(e) Office equipments L.S. 50,000
(f) Pre-operative expenses LS. 30,000
SubTotal 1, 11,4,00/-
Total Fixed Capital Rs. 2,75,400/-

Working Capital (permonth)

Personnel
No. of Salary/month
S. No. Designation Total
Persons Rs.
1 Service Supervisor 25,000 25,000
2. Skilled Worker & 21,000 21,000
Electrician
3. Unskilled worker 19,000 19,000

Total Rs. 65,000

Perquisite A 15% ofsalary Rs. 9750
Total Rs. 74,750

RawMaterials
S. Description Rate Value
No. Rs.)
1 Su erEnameledCopper Wire(k 30 550 16,500
2 Ball Bearing Nos. 50 235 11,750
3 Heating Element of Electric IronNos. 40 120 4,800
4 Immersion Water heater for Geezer 40 150 6,000
Nos.
5 Shaft, Bush, Capacitor, Field Coil, LS 8,000
Armature, Cobon etc.
6 Consumables stores & Cables, Paper LS 6,000
Insulations
7 Mechanical & Electrical Accessories, LS 8,000
Hardware &misc
Total 61,050

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 Utilities
S.No. Desert Unit Rate Value
1 Electricial KWH 1,250 8 10,000
2 Water L.S. 1,000
Total 11,000

Other Contingent Expenses(Rs.)

1 Rent 12,000
2 Postage & Stationery 1,000
3 Telephone/ Fax charges 1,500
4 Repair & Maintenance 1000
5 Transport and conveyance charges 2,000
6 Advertisement 3,000
7 Insurance 1000
8 Consumables 1000
9 Other Misc. Expenses 2,000
Total 24,500

Total Recurring Expenditure (permonth)

Total CapitalInvestment Rs. 5, 13,900/-

Total Fixed Capital Rs.2, 75,400
Total Working Capital (for 2 months) Rs.5, 13,900
Total Rs. 7, 89,300

1. FINANCIALANALYSIS
Cost of Operation (perannum)
Total recurring costperyear Rs.
20,55,600Depreciation on plant and machineryA10% Rs. 16,400
Depreciation on jigs, fixtures, tooling etc.A25% Rs. 3,750
Depreciation on office equipmentA20% Rs. 10,000
Interest on total capital investment A 12 % Rs.94,716
Total Rs.21, 80,466

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Turnover (perannum)
ItemRepair & Servicing of Electrical trances

Net Profit (perannum)

Turnover - Cost of Operation

= Rs. 5,69,534/-

Net ProfitRatio
Net profit per yearX 100
Turnover per year= 20.71 %

Rate ofReturn
Net profitperyear X100
Total CapitalInvestment= 72.15 %

No Rate(Rs.) XTotalsales
5,000 X550=27, 50,000

TotalTurnOver
Rs. 27, 50,000

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Break-even Point

FixedCost
Depreciation on plant and machinery A10% 16,400
Depreciation on Jigs & Fixtures A 25% 3,750
Depreciation on office equipment A20% 10,000
Interest on total capital investment H12.5% 60,969
40 % of salary & wages 3,58,800
40% of Other Contingent (Excluding Rent + 40,800
Insurance)
Rent + Insurance 15,6,000
Total fixed Cost 6,46,716

FixedCost X100
Fixed Cost + NetProfit

= 646720x100
1216254

B.E.P. =53.17%

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 NAME AND ADDRESSES OF MACHINERY SUPPLIERS
1. M/s Mangal Instrumentation
144/G., Hari Nagar, Ashram, New Delhi Testing Equipment

2. M/s Acme Scientific International Plot No. S-12, Gali No.12,

Anand Parbat Industrial Area, Delhi-110005 Testing Equipment

3. M/s Instrument International 1702/3, 2nd FloorOppBhag-Hotel,

Bhagiiath Place, New Delhi; Phone: 23873711 Testing Equipment

4. M/s. Choudhary Trading Co.

A-91/3, Naraina Industrial Area, Ph. I, New Delhi Winding Machine

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