UPDATED PROJECT PROFILE

Cold Storage Unit

1. PRODUCT CODE : Nil

2. MONTH AND YEAR OF : MARCH, 2012

UPDATED

3. PREPARED BY : MSME Development Institute

(Mechanical Division)
CGO Complex,
”C” Block,
Seminary Hills,
NAGPUR-440 006.
Ph. 2510046, 2510352.
Telefax: 0712-2511985

E-mail:dcdi-nagpur@dcmsme.gov.in

………………………..

1
 UPDATED PROJECT PROFILE
COLD STORAGE UNIT
1. INTRODUCTION.

India is the largest producer of fruits and second largest producer of

vegetables in the world. In spite of that per capita availability of fruits and vegetables
is quite low because of post harvest losses which account for about 25% to 30% of
production. Besides, quality of a sizable quantity of produce also deteriorates by the
time it reaches the consumer. This is mainly because of perishable nature of the
produce which requires a cold chain arrangement to maintain the quality and extend
the self-life if consumption is not meant immediately after harvest. In the absence of a
cold storage and related cold chain facilities, the farmers are being forced to sell their
produce immediately after harvest which results in low price realization. Sometime
farmers do not even get their harvesting and transportation costs what to talk of the
cost of production or profit. As a result, our production is not getting stabilized and
the farmers after burning fingers in one crop switch over to another crop in the
subsequent year and the vicious cycle continues. Our farmers continue to remain poor
even though they take risk of cultivating high value fruits and vegetable crops year
after year. A cold storage facility accessible to them will go a long way in removing
the risk of distress sale to ensure better returns. This project profile endeavors to
provide information on various broad technical and financial aspects of a cold storage
unit to enable the financing banks and entrepreneurs in formulation and
implementation such projects.

2. MARKET POTENTIAL.

The estimated annual production of fruits and vegetables in the country

is about 130 million tonnes. This accounts for 18% of our agricultural output. Due to
diverse agro climatic conditions and better availability of package of practices, the
production is gradually rising. Although, there is a vast scope for increasing the
production, the lack of cold storage and cold chain facilities are becoming major
bottlenecks in tapping the potential. The cold storage facilities now available are mostly
for a single commodity like potato, orange, apple, grapes, flowers, etc. which results in
poor capacity utilization.

Present availability of cold storage capacity is only 130.5 lakh tonnes.

Although 90% of these units are made to store only potato even then it does not meet the
requirement of the single crop, the production of which is about 300 lakh tones per
annum.

3. BASIS AND PREASSUMPTIONS.

Assumptions for working out economics of a 5000 MT capacity potato cold storage

1. 70% of the capacity is rented out and rest 30% capacity is used to store potato
owned by the promoter(s).
2. Rental charges per season per MT of potato are Rs. 1800/-.
3. Marketing margin on own potato considered at Rs. 6500/- per MT.
4. Electricity and other utilities expenses at Rs. 410.4/- per MT per annum.
5. Insurance charges for the potato considered as Rs. 40/- per MT per season.
6. Margin money considered at 25% of the financial outlay.
7. Interest on term loan considered at 15% per annum.

2
 8. Even though the life of the cold storage will be much more, the life has been
considered as 15 years for working out internal rate of return.
9. Depreciation rate of 5% and 9% has been considered for civil structures and plant
& respectively.

4. IMPLEMENTATION SCHEDULE.
1. Provisional registration with the Director of industries (DIC) one week.
2. Site selection, Land development, Power connection, Water Connection &
Construction of Building 12 months.
3. Purchasing machinery, equipments and employing personnel 02 month.
4. Installation of machinery 02 months
5. Testing installed machinery & Marketing 01 month.
The proposed unit can be set up in 18 Months.

5. TECHNICAL ASPECTS.
5.1 Process of Service / Manufacturing.
After harvesting potato transport it to cold storage premises then pre cool it in precooler
remove damaged potatoes then pack in certain quantity like 50Kg, 100 Kg bags, number
bags and store in cold storage racks. Maintain constant cooling whenever potato /
products are in storage, frequent inspection of stored product is required. Transport to
wholesale market whenever required.
5.2 Quality Specifications.
Constant continuous cooling, security of product, perfect service is essential.
5.3 Service Capacity per Season /Annum.
Quantity: 5000 MT of Potatoes
Value : 1,60,50,000 Rs
5.4 Motive Power. Three phase, 75 HP (For Vapor Compression Refrigeration System)

6. TOTAL CAPITAL INVESTMENT.

Sr. Description Value Rs.
No.
1. Fixed Capital 29000000.00
2. Working Capital (3 times of WC/ Month) 752856.00
Total Cost 2,97,52,856.00
Say
3,00,00,000

7. MEANS OF FINANCE. Rs.

1. Promoters Contribution (25 % of Total Cost) 75.00,000.00
2. Bank Loan (Total Cost - Promoters Contribution ) 2,25,00,000.00

8. FINANCIAL ASPECTS.
8.1 FIXED CAPITAL.
Sr. Description Cost / MT Value
No. (Rs) (Rs)
1. Civil cost 3200.00 16000000.00
2. Insulation cost 900.00 4500000.00
3. Machinery & Equipment cost 1500.00 75,00,000.00
4. Miscellaneous cost 200.00 10,00,000.00
Total Fixed Cost 2,90,00,000.00

3
 8.2 WORKING CAPITAL.

8.2.1 Establishment Expenses per Month & Year.

Sr. Designation Persons Salary Value
No. (Rs / Month) (Rs/Year)
1. Manager 1 15000.00 180,000.00
2. Supervisor 1 10000.00 120,000.00
3. Skilled worker 2 6000.00 144,000.00
4. Labors/ helpers for loading, unloading 5 3500.00 210,000.00
product & other related work
Total Cost for Staff & Labor 34500.00 6,54,000.00

8.2.2 Maintenance & Repair Expenses per Month & Year.

Sr. Description Quantity M&R Expenses Value
No. Per Month (Rs/Month) (Rs/Year)
1. Refrigerant (NH3 ) 30 Kg 7084.00 85000.00
2. Lubricants 10 Lit. 2000.00 24000.00
3. Fuel 06 Lit. 500.00 6000.00
4. Preventive maintenance cost 6250.00 75000.00
5. Parts to Replace 6250.00 75000.00
6. Repairing expenses 4167.00 50000.00
Total M & R Expenses 26251.00 3,15,000.00

8.2.3 Utilities per Month & Year.

Sr. Description Units Bill Value
No. (Rs / Month) (Rs/Year)
1. Power (125 KW @ 5 ) 34000 170000.00 2040000.00
2. Water 1000.00 12000.00
Total Utilities 171,000.00 20,52,000.00

8.2.4 Other Expenses per Month & Year.

Sr. Description Expenses Value
No. (Rs / Month) (Rs/Year)
1. Insurance charges of stored product / potato 16667.00 200000.00
2. Postage & Stationary 500.00 6000.00
3. Conveyance and Transport 1000.00 12000.00
4. Advertisement & Publicity 834.00 10000.00
(Stickers , pamphlets & Cards )
5. Other Unforeseen Expenses 200.00 2400.00
Total other Expenses 19201.00 230400.00

8.2.5 Total Working Capital Per Month.

Sr. Description Value Rs
No.
1. Total Establishment Expenses per Month 34500.00
2. Total Maintenance & Repair Expenses per Month 26251.00
3. Total Utility (Power & Water Expenses) per Month 171000.00
4. Total Other (Insurance, Marketing etc)Expenses Per Month 19201.00
Total Working Capital Per Month 2,50,952.00

4
9. COST OF PRODUCTION / SERVICE PER ANNUM.

Sr. Description Value Rs

No.
1. Total Working Capital Per Annum 30,11,424.00
2. Depreciation on Machinery & Equipment 6,75,000.00
3. Interest on total capital investment (FC+WC) 44,62,928.00
Total Cost of Servicing Per Annum 81,49,352.00

10. TURNOVER PER YEAR.

Sr. Description Quantity Rate Value
No. (MT) (Rs /MT) (Rs)
1. 70 % capacity of cold storage is rented 3500 1800.00 63,00,000.00
2. 30% capacity of cold storage is used to 1500 6500.00 9750000.00
store potato owned by promoter(s)
Total revenue per year 1,60,50,000.00

11. FIXED COST PER YEAR.

Sr. Description Value Rs
No
1. Depreciation of Machinery, equipment & Insulation 10,80,000.00
(At the rate 9% / Year in average)
2. Depreciation of civil structure (At the rate 5% / Year ) 8,00,000.00
3. Interest 44,62,928.00
4. 40 % of Salaries & Wages 2,61,6000.00
5. 40 % of Other Expenses (Utilities + OE) 9,12,960.00
Total Fixed Cost per 75,17,488.00
year

12. PROFIT ANALYSIS.

Profit : Revenue per year-Total Cost of Servicing Per Annum : 79,00,648.00 Rs
Income Tax on Profit @ 30% : 23,70,194.00 Rs
Net Profit (PAT) : 55,30,453.00 Rs
% of Profit on Sale : Net Profit / Sale × 100 : 34.46 %
% of Return on Investment : Net Profit / (FC + WC) × 100 : 17.28 %

13. MACHINERY SUPPLIERS.

1. RINAC INDIA Ltd., No.5, Saraswati Niwas,Main Channal Road, Saraswathipuram
Ulsoor, Banglore-560008 (Karnataka) PH- 080-41132929

2. AIRTECH ENGINEERS, B-93, Okhala Industrial Area, Phase II, New Delhi
-110020, PH- 011-26385711

3. NEER ENTERPRISES,
232/2,Mangal Nagar, Opp. Saraswati Vidya Mandir, Near Shastri Nagar, N.H. No. 8
Rakhial, Ahmedabad-380023, Gujarat, India. Phone : +91-79-22910062,
22910326 Fax : +91-79-22910393 E-Mail: info@neerenterprises.com Ctd…...

5
14. DOS AND DON'TS

Dos Don'ts

1 Suitability of site with proper elevation, Site in a low lying area with poor road
drainage and linkages by road and and other communication linkages
other communications must be ensured. must be avoided.

2 Land should be converted to non Agricultural land should not be used for
agricultural category. construction of cold storage without
converting it to non agricultural
category.

3 Soil should be tested for its load bearing Do not avoid soil load bearing test and
strength and matching rack design proper rack design.
should be adopted.

4 Necessary permission from local Don't avoid taking permissions from

authorities for construction of cold local authorities for constructions.
storage should be obtained.

5 Capacity of the plant and its room Don't select the capacity of the cold
temperature should be matched to the storage arbitrarily.
product to be stored and market size.

6 Selection of technology and machinery Costly and energy intensive technology

should be for power efficiency, low should be avoided.
investment and maintenance cost.

7 Plant operation may be planned in a Plant operation for more than 12 hours
manner to not exceed an average 12 a day should be avoided.
hours operation a day.

8 Refrigeration system should be properly Proper pressure testing and vacuum

pressure tested and vacuum tested for testing of the refrigeration system
safety. should not be over looked.

9 Soft water should be used for plant Don't use hard water without softening
operation. it.

10 Trained personnel should be employed Untrained and inexperienced

for operating the plant and maintaining personnel should be avoided for critical
desired room conditions. plant operations.

11 Proper standby equipment like Standby provisions for critical

compressor with motor and water equipment should not be avoided to
circulation pump should be provided. save on cost.

12 Assured electricity supply matching to Don't compromise on DG set to ensure

the electrical power requirement should assured power supply.
be provided. In case of power failures,
the supply should be ensured by DG set
matching to the essential power
requirement of the unit.

13 Proper safety provisions like fire Don't compromise on safety aspects

extinguishers and safety alarms should for risk free operation of the unit.
be provided.

14 Proper insurance cover should be taken Don't avoid insurance cover to save on
for building, plant and machinery and operational costs.
stored stocks to take care of unforeseen
risk.

6
 UPDATED PROJECT PROFILE

Explosive Van Body Building

1. PRODUCT CODE : Nil

2. QUALITY & STANDARDS : The quality specification of

the Explosive van depends
upon Explosives Rules of
Department of Explosives,
Govt. of India and RTO.

3. MONTH AND YEAR OF : MARCH, 2012

UPDATED

5. PREPARED BY : MSME Development Institute

(Mechanical Division)
CGO Complex,
”C” Block,
Seminary Hills,
NAGPUR-440 006.
Ph. 2510046, 2510352.
Telefax: 0712-2511985

E-mail:dcdi-nagpur@dcmsme.gov.in

………………………..

7
 UPDATED PROJECT PROFILE

Explosive Van Body Building

1. Introduction:
Explosive van carries explosives , which were mounted on different vehicles
chassis such as on Ashok layland, TATA or Swaraj Mazda. These van are having
different carrying capacity such as 1 MT, 3 MT, 5MT, 10 MT & 15 MT. These are
fabricated as per Govt. of India, Department of Explosive rules. This project profile is
prepared for caring Class-2 type of explosive.

Explosive Rules, 1983

Explosives Rules deal with condensed explosives like high explosives (dynamite,
detonators etc. ) fireworks, low explosives ( safety fuse etc. ) The type of explosives
have been catogarised as category X,Y, Z, and ZZ and for various purposes, either
licence or approval is required.

Licence is required for manufacture, storage, ( possession ) for sale and/or use,
transport, import, export of explosives, display of fireworks or for special purpose not
covered in the Rules. The details regarding Shot Firer‟s permit have been stated in
„Licensed Premises‟.

Approval is required for manufacture of portable Magazine, Explosives Carrying

Boxes, Authorisation of Explosives, Issue of Foreman Certificate, Acetylene Generator
and BMD system.

Form no Purpose Licensing Authority

Form 26 To Transport Explosive Controller of Explosives

2. Market Potential:

There are numbers of ordnance factories, Explosives manufacturing units

fire crackers manufacturing units. The explosives vans are essential explosive material
handling vehicles for transportation of explosives from one destination to other. Most
of the units they hire the vans for transport. Therefore the market potential of explosive
van body building and repair is highly demanded.

8
3. Pre assumptions:
i) Interest on fixed capital and working capital has been calculated at an average
rate of 15% per annum.
ii) The present schemes have been worked out on single shift working of 8 hours per
day at a 80% of efficiency and 300 working days in an year.
iii) The rate in respect of machinery equipments cost of land and building, raw
materials are as per prevailing market rates at the time of preparation of this
project profile and are likely to vary quality wise and capacity wise from supplier
to supplier and place to place.
iv) Arrangements of labour wages has been made as per the prevailing market rates
which may vary from place to place.
v) The unit can function in rented premises as the manufacturing activity does not
involve any special constructional features for the premises.
vi) Fabrication of Explosive van of capacity 10 MT to carry only class-2
Explosives is considered for project profile preparation.

4. Implementation Schedule:
Every project requires some specific time for commercial production and
are briefly as under.
Selection of product and procurement of technical Know-how 6 weeks
Selection of industrial site 2 weeks
Provisional registration 1 week
Preparation of project report
(a) Calling quotations 4 weeks
(b) Preparation of reports 2 weeks
Application for finance and getting loan sanctioned 10 weeks
Recruitment of man-power 2 weeks
Procurement, installation & electrification 8 weeks
of machineries
Trial run 1 week

In between the financial exercise and installation of machinery, labour

requirement and other miscellaneous work will be completed for manufacturing
the product.

5. Technical Aspects:
Class 2 Explosive– Nitrate Mixture Class

“Nitrate-mixture” means any preparation, other than gunpowder which is formed by the
mechanical mixture of a nitrate with any form of carbon or with any carbonaceous
substance not possessed of explosives properties, whether Sulphur be or be not added to
such preparation, and whether such preparation be or be not mechanically mixed with any
other non-explosive substance, and includes any explosive containing a perchlorate and
not being a chlorate-mixture, fulminate or nitro-compound as defined in this Schedule.

9
 (a) MANUFACTURING PROCESS:
i) The following point must be noted while body building of Explosive van:

1. Disconnect all connection of battery and alternator before electric welding work
on chasses / body.
2. Exhaust silencer is to be install in between front wheel & back compartment
body, spark arrester is to be fitted at the end of silencer. For short circuit
precaution earthing chain and cutout switch is to be installed.
3. There should be gap between driver‟s cabin and back storage compartment.
4. The inner wall of compartment is to be lined by aluminum and fabricated by brass
screw.

FLOW CHART OF BODY BUILDING OF EXPLOSIVE VAN

Purchase of Raw Material like

Aluminum sheet, wood, angles, Bending of pipes cutting of
pipes & hardware items wood

Erection & Fabrication of

Welding, Riveting and pipes, packing wooden
fabrication planks and bolts.

Completion and painting Sent for passing to RTO and

Explosive Dept.

Delivery to customer

(b) QUALITY CONRTOL AND STANDARDS:

The fabrication of Explosives van cabin/ body construction should followed

with the specification under schedule to Explosives Rule 1983.

6. Production Capacity :

It is proposed to build body of 24 Explosives vans of capacity 10 MT per annum

i.e. two vans per month

10
7. Pollution Control Measures:

The manufacturing activities of the unit do not produce any waste or

effluents which may require pollution control measures.
8. Financial Aspects:
(i) LAND AND BUILDING
Rented shed with floor Rs . 15000/- PM
area of 200 sq. mtr.

(ii) MACHINERY AND EQUIPMENT:

Sr. Description Indigenous/ Qty Price

No. Imported (Rs.)
1. Arc welding Transformer 3 phase, Ind. 1 set 40000
oil cooled
2. TIG welding equipments 500 Amp. -do- 1 60000
3. Portable spot welding gun -do- 1 25000

4. Double end bench grinder -do- 1 12000

8” wheel dia.
5. Electrical portable shear machine -do- 1 12000
6. Universal hand shearing machine. -do- 1 6000
7. Bending machine -do- 1 60000
Hand operated
8. Air compressor 5 HP -do- 1 40000

9. Electric portable drilling machine -do- 1 6000

10. Spray gun -do- 1 5000

11. Power hacksaw machine -do- 1 30000

Sub total 296000

Electrification & installation 30000
charges @ 10% of cost of LS
machinery & equipment
Total cost of machinery & equipments
Cost of dies, tools, handling 50000
equipment and measuring LS
instruments
Cost of office equipment/working 25000
table/furniture LS
Pre-operative expenses (Project cost 25000
non-refundable deposits, if any) LS
Total fixed Capital: 426000

11
(iii) WORKING CAPITAL (PER MONTH)
A. STAFF AND LABOUR

Sr. No. Designation No. Salary Total (Rs.)

1. Manager 1 10000 10000
2. Accountant 1 6000 6000
3. Clerk cum storekeeper 1 5000 5000
4. Welder 1 4000 4000
5. Fitter 2 4000 8000
6. Helpers 1 3000 3000
7. Peon/chowkidar 1 3000 3000
Perquisites @ 15% of salaries 5850
Total: 44850
Say 45000

B. RAW MATERIAL (PER MONTH):

Particular Ind/Imp. Qty. Rate Value

Rs (Rs.)
Aluminum sheet Ind. 400 Kgs 245/- 98000
22SWG to 20 SWG per Kgs
4‟X6‟=24 sq ft/ sheet. One
sheet = 7 KG approx.
Rolled steel angle Ind. 400 Kgs 45/- per 18000
35X35X5 mm, 2.6 Kgs kgs
/mtr
Square pipe Ind. 850 kgs 48/- per 40800
40X40 mm, 5mm kgs
thickness, 18‟ each
Channel Ind. 100 kgs 48/- per 4800
40X40X40 mm, 5mm kgs
thickness,
Brass sheet, brass screw, 60000
paint, spark arrester,
cutout switches, earthing
chain, wooden planks.
Total: 221600
Say 225000

C. UTILITIES:

Power 30 HP L.S. 15000

Water L.S. 500
---------
Total 15500
----------

12
 D. OTHER EXPENSES (PER MONTH):

Rent 15000
Postage, stationery telephone etc. 1500
Insurance 1000
Transport charges 3000
Repair & maintenance 2000
Advertisement, sales expenses etc. 500
Miscellaneous expenses 2000
---------------
Total: 25000
----------------

E. WORKING CAPITAL (PER MONTH):

Working capital = A+B +C +D

= 45000+225000+15500+25000
= 310500/-

(iv) TOTAL CAPITAL INVESTMENT :

Fixed Capital Rs. 426000
Pre operative expenses Rs. 25000
Working capital for 3 months Rs. 931500
---------------------
Total: Rs. 13,82,500
---------------------

(v) FINANCIAL ANALYSIS:

1. COST OF PRODUCTION (PER YEAR):

(a) Total recurring cost per year 37,26,000

(b) Dep. on machinery and equip.@ 10% 42,600
(c) Interest on total capital investment @15% 2,07,375
` -----------------
Total cost of production: 39,75.975
---------------
Say 40,00,000
2. SALES/TURNOVER (PER YEAR):

Item Qty Rate (Rs.) Value (Rs.)

Cost of Explosive 24 @ 2.25 lakhs 5400000
van body building
Total 5400000

In addition to explosive van body building repairing work also under

taken as per availability of time & job which can be charged as per job requirement.

13
3. NET PROFIT (per year):

Net Profit .= Sales - Cost of Production

= 54,00,000 – 40,00,000
= 14,00,000

4. NET PROFIT RATIO:

Net profit
= ---------- x 100
Sales

14,00,000
= -------------- x 100 = 25.92 %
5400000

5. RATE OF RETURN:

Net profit
= ----------------------- x 100
Total investment

14,00,000
= ------------------ x 100 = 35%
40,00,000

6. BREAK EVEN ANALYSIS:

Fixed cost
1 Depreciation on machinery & eqpt 42600

2 Insurance 10000
3 Interest on total investment 2,07,375
4 40% of annual salary and wages 2,16,000
5 40% of utilities 74400
6 40% of other contingent expenditures 1,20,000

Total Fixed cost 6,70,375

Fixed cost
BEP= ------------------------------- x 100
(Fixed cost + Net profit)

670375
BEP= ------------------------- x 100
670375 + 1400000

BEP= 32.38%

14
 9. Names And Addresses Of Machine Suppliers:

1. M/s. Essential Machine Tools Pvt. Ltd., 5, Nyaya Murti G. N. Vaidya road,
Bank Street, P.O. Box No. 2, Behind state bank fort,
Mumbai –400001.

2. M/s. Machine Tools & Equipments, 81, Narayan Dhuru Street,

Mumbai – 400003.

3. M/s Machine Tools Traders, 25,Ganesh Chander Avenue,

Kolkata – 700 013.

10. Names And Addresses Of Raw Material Suppleirs:

1. M/s. Vinayaka Metal Industries, 283, Tawkal Lay-out, Behind Sheela

Complex, wadi, Nagpur- 440023

2. M/s. Metals & Machinery Corporation, 130, Mahalaxmi Niwas,

Opp.Mayo Hospital, Central Avenue, Nagpur – 440 018

3. M/s. B. N. Enterprises, B-107, MIDC Indl area, Butibori,

Nagpur – 441 108

15
 PROJECT PROFILE

ALUMINIUM SEAL FOR LPG CYLINDER

Product Code : 335902006

Quality & Standards : Buyers Specifications
Production capacity : 1,80,00, 000 per Annum
Date of Preparation : Aug. 2011
Prepared By ; MSME Development Institute
C- Block, CGO Complex, Nagpur

Introduction

The Aluminium Seal is used in the LPG Cylinder as a security measure i.e. before delivery to
the customers. So no body can tamper with it and use the gas partly, so as to avoid customer
being cheated.

Market Potential

This type of product is required by all the manufacturers of LPG Bottles, i.e. I.O.L., HPCL.
BPCL etc. The product has got increasing and steady demand as the production of LPG
cylinders is increasing day by day.

Basis and Presumptions

The basis of calculation of production capacity is based on present local market rates on single
shift per day and efficiency at 70% of installed capacity. The cost of machinery and
equipments as indicated in this profile refer to a particular make and prices are approximate.

Working Hours – 8 Hrs / Day,

Working Days – 300 days / Year

Implementation Schedule

This project will take its time of 6 to 8 months from the date of approval. Break up of
activities with expected time and schedule is given below:

Sr No Activity Period
1 Market Survey and Project scheme Preparation 1 Month
2 Unit approvals and registration (EM II Filing ) 1 Month
3 Sanction of Loan and Disbursement 2 Months
4 Placement of Order and Procurement of machines 2 Months
5 Installation of machines and power connection 1 Month
6 Trial run and Commencement of production 1 Month

Few activities can start simultaneously.

TECHNICAL ASPECTS
Process of Manufacture

Aluminium (Al) Sheets (0.2/0.3 mm or 36 SWG) of size 20" × 30" cut from the continuous
coil, will be used as the raw material. The above raw material will be fed into high speed
power press for blanking and drawing. After the operation of power press, the material will be

16
processed in the knotching press for keeping gap. Finally, the trimming operation is done, for
removal of extra material and polishing, the seals are polished in the polishing barrel. The
finished Al-sheets are inspected, properly packed and despatched.

Quality Control and Standards

There is no Indian Standard Specification for this item. All the parameters are covered by
I.O.L./H.P. Specification vide Ref. No. RD 15G 214.

FINANCIAL ASPECTS
A. Fixed Capital

(i) Land and Building (Rented)

Covered Area of 600 Sq.Ft. @ 10,000 Rs per Month

(ii) Machinery and Equipments

Sr Description Qty. Rate Amount

No (Rs.) (In Rs.)
1 High Speed Power Press-10 Ton Cap. 4 80000 320000
Motorised
2 Trimming Machine Motorised 2 35000 70000
3 Knotching Machine-Hand operated 2 20000 40000
4 Treadle Shearing Machine 1 80000 80000
5 Polishing Barrel 2 25000 70000
6 Composite Tools and Dies, Work Bench - 50000
etc.
7 Installation and Electrification Charge - 70000
8 Office Furniture - 150000
Total 850000

B. Working Capital (per month)

(i) Staff and Labour (per month)

Sr. Description Nos Amount (In Rs.)

No.
1 Manager/Supervisor 1 10000
2 Machine Operator 4 20000
3 Skilled Worker 4 16000
4 Helper/Peon 2 6000
Total 52000

(ii) Raw Material (per month)

Raw Material Qty. Rate (Rs) Amount (Rs)

Al-Sheet 0.2 mm thick in the 3000 Kg 200 Rs / Kg 600000
form of roll.
Total 600000

(iii) Other Contingent Expenses (per month)

Sr No Description Amount
1 Rent 10,000
2 Power and Water 5,000
3 Consumable Stores 6,000

17
4 Packaging, Grease, Kerosene Oil etc. 20,000
5 Office Expenses 10,000
Total 51,000

(iv) Total Working Capital (per month)

Sr No Description Amount
1 Raw Material 6,00,000
2 Staff and Labour 52,000
3 Other Contingent Expenses 51,000
Total 703000

C. Total Capital Investment

Sr No Description Amount
1 Machinery and Equipment 850000
2 Working Capital (for 3 months) 703000 × 3 2109000
Total 2959000

Financial Analysis

(1) Cost of Production (per annum)

Sr No Description Amount
1 Recurring Expenditure 8436000
2 Depreciation on M/c and office equipment @ 15% 127500
3 Interest on total capital investment @ 12% 355080
Total 8918580

(2) Turn-over (per year)

Sr No Description Amount
1 Sale of 180 Lac pieces of Al. seal @ Rs 0.50 each 9000000
2 By sale of scrap @ Rs 70 per Kg. for 6000 Kgs 600000
Total 9600000

(3) Net Profit

Net Profit = Turn over per year – Cost of production per year

= 96 00 000 – 89 18 580
= 6 81 420 Rs
(4) Net Profit Ratio = ( Profit / Sales ) x 100
= ( 681420 / 9600000) x 100
= 7.10 %

(5) Rate of Return = (Net Profit / Total Capital Investment) x 100

= ( 681420 / 2959000) x 100
= 23.03 %

18
(6) Break-even Point

Fixed Cost Amount (In Rs.)

Rent 120000
Interest 355080
Depreciation 127500
40% of Salary 249600
40% of Other Contingent Expenses 244800
Total 1096980

B.E.P = (Fixed Cost / (Fixed cost + Profit)) x 100

= (1096980 / (1096980 + 681420)) x 100

= 61.68 %

Addresses of Machinery Suppliers

1. M/s. Batliboi and Co.

190–A, Forbes Street,
Fort, Mumbai-1.

2. M/s. H.P. Singh

75, Ganesh Ch. Avenue,
Kolkata–13.

3. M/s. Oriental Machinery Works

23, R.N. Mukherjee Road,
Kolkata-13.

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