FOR

MANUFACTURING
OF

FOR

Prepared by:
GAK Consultancy Services Pvt. Ltd.
((Registered vide: Order No. 223 DI & C of 2006 dt. 13-12-2006)
Sec 14, Railway Road, Nanak Nagar, Jammu. 180004. 2432601
email : satishkrgupta_ca@yahoo.com
 PROJECT HIGHLIGHTS

1. Name & Address : M/S X Steel Industries

Jammu

2. Constitution : Proprietorship Concern

3. Line of activity : Manufacturing of:

Stainless & Mild steel gates, Railings, Stairs, Steps,
Almirahs, Cot frame, bed, car carriers, guards, racks,
desks, tables, chair , garden Jullas , steel bench,
hooks etc

4. Installed capacity : 400 MT / annum

5. Project Cost. (Amount in Lacs)

(a) Land Rented

(b) Building Rented
(c) Plant & Machinery 9.96
(d) Misc. fixed assets 3.00
(e) Working capital 12.04
----------
25.00
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6. MEANS OF FINANCE.

(a) Promoter's contribution : 1.25

(b) Working Capital : 11.43
(b) Term loan : 12.32
-----------
25.00
-----------

7. Employment potential : 15 persons

8. Power Requirement : 20 HP
 INTRODUCTION

Messers x Steel Industries is being promoted as a small scale industrial unit by a

businessman – Mr. X S/O S, Jammu.

The unit will be engaged in the manufacturing of Stainless & Mild steel gates,

Railings, Stairs, Steps, Almirahs, Cot frame, bed, car carriers, guards, racks, desks,

tables, chair , garden Jullas, steel bench & hooks etc at Village Lohrakote, Tehsil

Sunderbani and the promoter has already acquired land on lease for this purpose.

The promoter of the proposed unit has sensed the market demand and intends

to setup a manufacturing unit at Village Lohrakote, Tehsil Sunderbani to meet the

grown up market demand.

The unit will be located in industrially backward state and both the Central

Government and the State Government has announced very attractive incentives for

the promotion of the Industry in the State.

 PROMOTERS AND MANAGEMENT

M/S X Steel Industries is being promoted as a proprietorship concern of Mr X S/O

Sh. S R/O Jammu.

The unit will be engaged in the production of Stainless & Mild steel gates,

Railings, Stairs, Steps, Almirahs, Cot frame, bed, car carriers, guards, racks,

desks, tables, chair , garden Jullas, Steel bench & hooks etc. This unit will meet

the requirement of growing demand in region.

So far as the management is concerned, it will be in the hands of the

promoter himself but for day to day activity experienced staff will be employed.

Considering these aspects, it can be safely assumed that the Proprietor will

not face any difficulty in implementing its manufacturing plant, as well as running it

smoothly.
 MARKET DEMAND AND MARKETING POTENTIAL

The product to be manufactured by the unit has immense demand in our state as

well in the adjoining areas. The promoter proposes to manufacture a wide range of

Stainless & Mild steel gates, Railings, Stairs, Steps, Almirahs, Cot frame, bed, car

carriers, guards, racks, desks, tables, chair , garden Jullas, steel bench & hooks etc and

they have good demand from different corners of the society. Due to large scale

construction of houses their demand will continuously increase.

In view of the above, there is good scope of setting up of a few more units for the

manufacture of these items.

Taking into account the above stated factors of increasing demand in the state,

advantages accruing to the promoters in the form of lower cost of production and tax

concessions and the promoter’s experience in the business line and their contacts, the

unit is not likely to face any major problem in selling its products.
 PROJECT PARTICULAR & MEANS OF FINANCE

PROJECT PARTICULARS:-
A-1 LOCATION OF THE PROJECT :-
The unit is located Jammu. The location is best suited for the project with all infra-structure

facility like Power , Water , Transport , Proximity to raw material etc. The promoter has

already possesses land for this purpose.

The land will be adequate to take care of existing as well as future requirements of the

proposed unit upon expansions.

A-2 BUILDING :- The building to be constructed that will be required to carry on the

manufacturing activity is already constructed.

A-3 PLANT & MACHINERY :-

Plant and machinery to be used in the manufacture of final product will cost 9.96 Lacs.

A-4 MISC. FIXED ASSETS: - This includes furniture fixtures etc. An approx. amount of Rs.

3.00 lacs is kept for this purpose.

A-5 Working Capital :- The total working capital requirement is estimated at Rs.12.03

Lacs against which the promoter will be contributing Rs.3.00 Lakhs in the first year and

getting a finance from bank of Rs. 9.03 Lakhs.

 A-6 Technical Know-how :- Manufacturing process to be adopted by the unit is not very

intricate and does not require any sophistication . The technology is well established and as

such no technical collaboration is required. The necessary assistance can be sought from

equipment supplier. Further more, experienced skilled labour will be recruited for smooth

operation of the unit. In view of the above, it can be safely concluded that the promoters will

not face any difficulty in running the unit smoothly.

A-7 Plant Capacity:-

The unit is proposed to be having annual manufacturing capacity of 400 MT of various

Stainless & Mild steel gates, Railings, Stairs, Steps, Almirahs, Cot frame, bed, car carriers,

guards, racks, desks, tables, chair , garden Jullas etc per annum. This capacity is on the

working of 300 days in a year on 8 hourly single shift bases.

A-8 Utilities :-

(a) Power: The unit will be requiring 8 H.P. of power load for the plant operation which will be

available from PDD authorities.

(b) Water: - The water is required for drinking and washing purposes. The requisite water is

freely available in the area.

A-9 Pollution: - The unit will not generate any discharge from the factory and therefore, it is

pollution free industry.

A-10 Quality Control: - The Promoter must purchase good quality machinery, raw-

material and frames strict post production inspection procedure to ensure the quality of the

finished products.

A-11 Man Power :- the unit upon commercial operation will generate employment potential

for 15 persons which is freely available.

A-12. Source of Finance:- The unit proposes to take finance from bank

Conclusion & Recommendations:- On the basis for profitability estimates, it can be

concluded that the unit will be having good profitability . Therefore, the unit

deserves liberal financial assistance and other incentives available to the industrial

unit.
 PROJECT REPORT IN FAVOUR OF Mr. X S/O S
R/O JAMMU
FOR STEEL FABRICATION
AT JAMMU

1 LAND AND BUILDING : -

Land & building Rented 0.00

Total (i) 0.00

2 MACHINERY : - QTY.
1 Cutter 2 No. Rs. 125,500.00
2 Lathe Machine 6' with gear Box 1 No. Rs. 176,000.00
3 Bending Machine 7" 1 No. Rs. 155,000.00
4 Drill Machine 1 No. Rs. 135,000.00
5 Air Compressor with spray Gun 1 No. Rs. 25,000.00
6 Power Press 1 No. Rs. 25,000.00
7 Electricity welding set 2 No. Rs. 35,000.00
8 Buffering Machine 1 No. Rs. 20,000.00
9 Cutting Machine 1 No. Rs. 20,000.00
10 Gas Welding Set 1 No. Rs. 20,000.00
11 Bench Grinder 1 No. Rs. 10,000.00
12 Sheft Grinder 1 No. Rs. 21,000.00
13 Hand Tools LS Rs. 125,000.00

Rs. 892,500.00
Add : VAT Rs. 104,125.00
Total (ii) 996,625.00
3 OTHER FIXED ASSETS
Office Furniture Rs. 25,000.00
D G set Rs. 150,000.00
Electrical Fitting Trasformer and other misc Rs. 125,000.00
Total (iii) 300,000.00

4 TOTAL CAPITAL EXPENDITURE :-

(i+ii+iii ) Total Rs. 1,296,625.00

4 RAW MATERIAL CHARGES PER MONTH :-

Steel/Aluminium Section, G.P./B.P. Sheet, M. S. Angle/

Flat/Square/Round, Plate, Channels, Joist, H. R Sheet, C R sheet 700,000.00
C I casting, M.S Pipe/G.I Pipe, Shutter spring, chain Channels
Locks, Kundas, Nuts, Bolts, Paints, Ribbets, Fibre sheet,
Screws, Paints, Pipe, lockers , Plywood and other hardware
materials and Plastic Thread (Niwar) etc

(Value taken in Lumsum) Total (iii) 700,000.00

5 STAFF AND LABOUR PER MONTH :-
1 Skilled Labour (4 Nos.) @ Rs. 5000 p. m. Rs. 20,000.00

2 Unskilled Workers (8 No.) @ Rs. 4500 p. m. Rs. 36,000.00

3 Helper (3 No.) @ Rs. 3000 p. m. Rs. 9,000.00

Total (iv) 65,000.00

7 OTHER EXPENSES PER MONTH:-

1 Stationary, Postage, Conveyance, Telephone
Stamp, Electricity etc. Rs. 750.00

2 Miscellaneous Rs. 500.00

3 Rent Rs. 36,000.00

Total (vi) 37,250.00

8 WORKING CAPITAL PER MONTH:-

1 Raw Material Rs. 700,000.00

2 Staff & Labour Rs. 65,000.00

3 Other Expenses Rs. 37,250.00

Total (vii) 802,250.00

WORKING CAPITAL FOR 45 DAYS 1,203,375.00

9 TOTAL INVESTMENT :-
1 Capital Expenditure Rs. 1,296,625.00

2 Working Capital Rs. 1,203,375.00

Total (viii) 2,500,000.00

10 MEANS OF FINANCE:-
1 Term Loan @ 75% Rs. 972,469.00
1,875,000.00
2 Working Capital @ 75% Rs. 902,531.00

3 Equity Money @ 25% of the project

scheme (Self investment and unsecured
loans from friends and relatives) Rs.
} 625,000.00
11 DEPRECIATION, INTEREST AND INSURANCE PER MONTH :-
1 Depreciation on Plant & Machinery
@ 10% per annum 10,805.00

2 Interest on Loan @ 13.25% per annum 20,703.00

3 Insurance @ 1% per annum on Capital Investment 1,081.00

Total (ix) 32,589.00

12 COST OF PRODUCTION PER MONTH :-

1 Working Capital 802,250.00
2 Depreciation, Interest, Insurance 32,589.00

Total (x) 834,839.00

13 SALES PROCEEDS PER MONTH:-

1 By Sales 865,000.00
Total (xi) 865,000.00

14 PROFIT AFTER SALE PER MONTH:-

1 Sale Proceeds 865,000.00

2 Cost of Production 834,839.00

3 Net Profit Total (xii) 30,161.00

Hence, the scheme is technically feasible and economically viable.