Project Report

On

Welding Workshop

SAI INDUSTRIES
Prop: J Thanikesh, AN-84,
Autonagar and MSME Palamaner,Chittoor,
Andhra Pradesh- 517408
+91-9652633320
Thanikesh6567@gmail.com
 DISTRICT INDUSTRIES CENTER
PROJECT AT A GLANCE - TOP SHEET
1 Name of the Entreprenuer J Thanikesh

2 Constitution (legal Status) Individual

3 Father's/Spouce's Name S/o J S Jayanarayana

4 Unit Address : AN-84

MSME & Autonagar Palamaner, Industrial Area
Taluk/Block: Palamaner
District : Palamaner
Pin: 517408 State: AndhraPradesh
Phone 9652633320
E-Mail thanikesh6567@gmail.com

5 Product and By Product SAI IDUSTRIES

6 Cost of Project : Rs. 12,10,600

7 Means of Finance
Term Loan Rs. 11,50,070.00

Own Capital Rs. 60,530.00

8 Debt Service : 0.32

Coverage Ratio

9 Pay Back Period : 5 Years

10 Project : 12 Months
Implementation
Period

11 Break Even Point : 103.84%

12 Employment : 4

13 Power Requirement : 2 HP

14 Major Raw materials : Welding Rods, Welding Gases

15 Estimated Annual : Rs. 1000000.00

Sales Turnover
 DETAILED PROJECT REPORT
INTRODUCTION :

Gates, Grills, Fencing are essentially used for defining and defending the boundaries of premises and ensuring
and avoiding unauthorized entry or trespassing of humans or animals. Timber or wood was used since ancient
times, which has now been replaced by iron and steel fabrications. The strength of steel. Light weight and
compact size gives better protection, and offers good aesthetic appeal with better designs.

PRODUCT & ITS APPLICATION:

Gates, Grills, Fencing are essentially made from steel via fabrication of various sections, sheets and pipes.
These products are a norm for all most all premises to install to cover area under their ownership. Railings and
grills are part of protection and are also used as structure for most of stairways, people movement
management and to provide natural view of both inside or outside of the covered areas. Depending on the
location and use, these products are designed with several geometric patterns and décor. They are made from
wood, stone, cast iron, or metals like mild steel, stainless steel, aluminum, brass, bronze etc.

INDUSTRY OUTLOOK/TREND

The grill fences and railings fabrication industry in India comprises various medium and small companies that
manufacture wide range of simple and decorative ornamental products form mild steel, stainless steel sections
tubes and rods, as also from cast items. The units in this sector compete with offer for various innovative
designs and patterns with lowest costs. The medium and small companies are located all over India and also
take up the general fabrication services to industries. Most innovative designers of these items dominate the
market and lately the stainless steel fabricators are coming off age in view of shopping and other commercial
buildings in urban centers. The leading units in unorganized sector follow proper standards and specification of
materials used. The technology and market trend is of new finishes with bright brass/ copper/ golden color
metal and color plating techniques, with/ without engraving and other decorative designs.

MARKET POTENTIAL AND MARKETING ISSUES. IF ANY:

These products are a normal feature for construction industry for new and old premises. Commercial and
domestic buildings use railing and gates/ doors for indoor for protection and décor and fences for marking the
land plots. The Indian industry is dominated by low technology and very rare technological innovation is taken
up. However, in recent years, the demand of stainless steel indoor railings and grills is rising. Demand for
fence, grill and railing is mostly from new or redevelopment/ remodeling of housing and commercial buildings.
The improvement in contemporary designs and décor is anticipated to improve demand significantly due to
rapid industrial investments. Factors such as lower wastage weather and wear resistance coatings, higher
productivity and better quality will lead to wide usage of new products. The segment is projected to witness
moderate growth. The growth of construction industry with growing population is the main demand driver.
There is very good potential for good design and aesthetic designed products.

RAW MATERIAL REQUIREMENTS:

Structural section, round and square tubes, pipes, rods, flats, of various metal are required viz mild steel,
stainless steel, aluminum extrusions, brass bronze and cast iron. Other materials are fasteners and
consumables like welding materials.

MANUFACTURING PROCESS:

The process of manufacture involves operations as below. Cutting of material sheets, tubes, pipes, sections as
per required dimensions
 in shear machine. Certain components like cast iron and steel rods may be machined.
 Bending twisting and of rods/ pipes and forming of sheets in bending
 machine, press brake as per need. Welding of sections, pipes and sheets, Drilling and threading
of components
 Pickling and surface treatment like phosphating, anodizing, hard chrome
 plating etc. to provide surface finish to components. Painting and polishing of components.
Assembly of parts with fasteners.
 Inspection and packing for dispatch/ installations.
 The entrepreneur should also develop several new aesthetic designs for different uses in
residential as well as commercial premises.
1 COST OF PROJECT
A. Fixed Capital Investment
a. Land : 108 Sq.Mts Own

b. Workshed Area Sq.ft Rate in Rs. Amt. In Rs.

Land 1200 150.00 180000.00
Storage 200 750.00 150000.00
Work Area 600 350.00 210000.00
Parking 300 150.00 45000.00
Greenary 100 50.00 5000.00
0 0 0.00 0.00
0 0 0.00 0.00
Total 590000.00

C. Machinery Qty. Rate Amount in Rs.

Welding Machines 2 40000.00 80000.00
Gas Welding Machine 1 50000.00 50000.00
Cutting Machines 1 20000.00 20000.00
Other Tools 5 20000.00 100000.00
0 0 0.00 0.00
Total 250000.00
 d. Preliminary & Pre-operative Cost : Rs. 50000.00

e. Furniture & Fixtures : Rs. 25000.00

f. Contingency/Others/Miscellaneous Rs. 15000.00

Total Capital Expenditure : Rs. 930000.00

Working Capital : Rs. 280600.00

Total Cost Project : Rs. 1210600.00

3.1 Means of Financing :

Own Contribution 5% Rs. 60530.00

Bank Finance : 95%

Term Loan Rs. 883500.00
Working Capital Rs. 266570.00

Total Rs. 1150070.00

STATEMENT SHOWING THE REPAYMENT OF TERM LOAN & WORKING CAPITAL :

TERM LOAN

Interest @
Year Opening Balance Installment Closing Balance 10.45%
1st 883500 176700 706800 92326
2nd 706800 176700 530100 73861
3rd 530100 176700 353400 55395
4th 353400 176700 176700 36930
5th 176700 176700 0 18465
6th 0 0 0 0
7th 0 0 0 0
8th 0 0 0 0

WORKING CAPITAL

Interest @
Year Opening Balance Installment Closing Balance 10.45%
1st 266570 53314 213256 27857
2nd 213256 53314 159942 22285
3rd 159942 53314 106628 16714
4th 106628 53314 53314 11143
5th 53314 53314 0 5571
6th 0 0 0 0
7th 0 0 0 0
8th 0 0 0 0
STATEMENT SHOWING THE DEPRECIATION ON FIXED ASSETS:
WORKSHED @ 5.00%
Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year
Opening Balance 590000 560500 532475 505851 480559
Depreciation 29500 28025 26624 25293 24028
Closing Balance 560500 532475 505851 480559 456531
MACHINERY @ 10.00%
Opening Balance 250000 225000 202500 182250 164025
Depreciation 25000 22500 20250 18225 16403
Closing Balance 225000 202500 182250 164025 147623
TOTAL DEPRECIATION
Workshed 29500 28025 26624 25293 24028
Machinery 25000 22500 20250 18225 16403
Total 54500 50525 46874 43518 40430

2 Schedule of Sales Realization :

Details of Sales
Rate/ No. of Amount in Rs.
Particulars of Product Pair/Unit Pair/Unit
0
Gates 5000.00 80 400000.00
Shutters 7000.00 50 350000.00
Windows 2500.00 100 250000.00
0 0.00 0 0.00
0 0.00 0 0.00
0 0.00 0 0.00
0 0.00 0 0.00
Total 1000000.00

Capacity Utilization of Sales

Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year

Capacity Utilization 70% 80% 90% 90% 90%

Sales / Receipts 700000 800000 900000 900000 900000

3 Rawmaterials :
Particulars Unit Rate/unit Reqd.Unit Amount in Rs.
Welding Rods Boxes 1000.00 70 70000.00
Welding Gases Kgs 60.00 200 12000.00
0 0 0.00 0 0.00
0 0 0.00 0 0.00
0 0 0.00 0 0.00
0 0 0.00 0 0.00
0 0 0.00 0 0.00
0 0 0.00 0 0.00
0 0 0.00 0 0.00
Total 82000.00

5.1 Wages :
No. of Wages Amount in Rs.
Particulars Worker Per Month (Per Annum)
Workers 3 8000.00 288000.00
0 0 0.00 0.00
Total 3 288000.00

5.2 Repairs and Maintenance : Rs. 10000.00

5.3 Power and Fuel : Rs. 10000.00

5.4 Other Overhead Expenses : Rs. 10000.00

4 Administrative Expenses :
6.1 Salary
Supervisor 1 15000.00 180000.00
0 0 0.00 0.00
0 0 0.00 0.00
0 0.00 0.00
0 0.00 0.00
Total 1 180000.00

6.2 Telephone Expenses 2000.00

Stationery & Postage 1000.00

Advertisement & Publicity 30000.00

Workshed Rent 0.00

Other Miscellaneous Expenses 1000.00

Total 214000.00

5 Capacity Utilization of Manufacturing & Administrative Expenses :

Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year
Capacity Utilization 70% 80% 90% 90% 90%
Manufacturing Expenses
Rawmaterials 57400 65600 73800 73800 73800
Wages 201600 230400 259200 259200 259200
Repairs & Maintenance 7000 8000 9000 9000 9000
Power & Fuel 7000 8000 9000 9000 9000
Other Overhead Expenses 7000 8000 9000 9000 9000
Administrative Expenses
Salary 180000 180000 180000 180000 180000
Postage Telephone Expenses 1400 1600 1800 1800 1800
Stationery & Postage 700 800 900 900 900
Advertisement & Publicity 21000 24000 27000 27000 27000
Workshed Rent 0 0 0 0 0
Other Miscellaneous Expenses 700 800 900 900 900
Total: 483800 527200 570600 570600 570600
6 Assessment of Working Capital :
Particulars Amount in Rs.
Sale 1000000.00

Manufacturing Expenses
Raw Material 82000.00
Wages 288000.00
Repair & Maintenance 10000.00
Power & Fuel 10000.00
Other Overhead Expenses 10000.00

Production Cost 400000.00

Administrative Cost 214000.00
Manufacturing Cost 614000.00
 Working Capital Estimate :
Element of Working Capital No of Day Basis Amount in Rs.
Raw materials 60 Material Cost 16400.00

Stock in process 60 Production Cost 80000.00

Finished goods 60 Manufacturing Cost 122800.00

Receivable by 30 Manufacturing Cost 61400.00

Total Working Capital Requirement Per Cycle 280600.00

7 Financial Analysis
Projected Profit & Loss Account :
Particulars 0 Year 1st Year 2nd Year 3rd Year 4th Year
Sales / Receipts 700000 800000 900000 900000
700000 800000 900000 900000
Manufacturing Expenses
Rawmaterials 57400 65600 73800 73800
Wages 201600 230400 259200 259200
Repairs & Maintenance 7000 8000 9000 9000
Power & Fuel 7000 8000 9000 9000
Other Overhead Expenses 7000 8000 9000 9000
Depreciation 54500 50525 46874 43518
Production Cost 334500 370525 406874 403518
Administrative Expenses
Salary 180000 189000 198450 208373
Postage Telephone Expenses 1400 1600 1800 1800
Stationery & Postage 700 800 900 900
Advertisement & Publicity 21000 24000 27000 27000
Workshed Rent 0 0 0 0
Other Miscellaneous Expenses 700 800 900 900
Administrative Cost 203800 216200 229050 238973
Interest on Bank credit @ 10.45%
Term Loan 92326 73861 55395 36930
Working Capital Loan 27857 22285 16714 11143
Cost of Sale 658482 682871 708033 690563
Net Profit Before Tax 41518 117129 191967 209437
Less Tax 0.00 0.00 0.00 0.00
Net Profit 41518 117129 191967 209437

CALCULATION OF DEBT SERVICE CREDIT RATIO (D.S.C.R) :

Particulars 0 Year 1st Year 2nd Year 3rd Year 4th Year
Net Profit 41518 117129 191967 209437
Add :
Depreciation 54500 50525 46874 43518
TOTAL - A 96018 167654 238841 252954
Payments :
On Term Loan :
Interest 92326 73861 55395 36930
Installment 176700 176700 176700 176700
On Working Capital
Interest 27857 22285 16714 11143
TOTAL - B 296882 272846 248809 224773
D.S.C.R = A/B
0.32 0.61 0.96 1.13
Average D.S.C.R
PROJECTED BALANCE SHEET :
Particulars 0 Year 1st Year 2nd Year 3rd Year 4th Year
LIABILITIES :
Promoters Capital 60530 60530 60530 60530
Profit 41518 117129 191967 209437
Term Loan 883500 706800 530100 353400
Working Capital Loan 266570 213256 159942 106628
Current Liabilities 0 0 0 0
Sundry Creditors 0 0 0 0
1252118 1097715 942539 729995
ASSETS :
Gross Fixed Assets : 865000 810500 759975 713101
Less : Depreciation 54500 50525 46874 43518
Net Fixed Assets 810500 759975 713101 669584
Preliminary & Pre-Op. Expenses 50000 37500 28125 21094
Current Assets 266570 213256 159942 106628
Cash in Bank/Hand 175048 124484 69496 -46217
Total 1252118 1097715 942539 729995

CASH FLOW STATEMENT :

Particulars 0 Year 1st Year 2nd Year 3rd Year 4th Year
Net Profit 41518 117129 191967 209437
Add : Depreciation 54500 50525 46874 43518
Term Loan 883500 706800 530100 353400
Working Capital Loan 266570 213256 159942 106628
Promoters Capital 60530 0 0 0
Total 1306618 1087710 928883 712982

Total Fixed Capital Invested 930000

Repayment of Term Loan 176700 176700 176700 176700

Repayment of WC Loan 53314 53314 53314 53314
Current Assets 266570 213256 159942 106628
Total 496584 443270 389956 336642

Opening Balance 0 810034 1454474 1993400

Surplus 810034 644440 538927 376340
Closing Balance 810034 1454474 1993400 2369741

BREAK EVEN POINT AND RATIO ANALYSIS :

Particulars 0 Year 1st Year 2nd Year 3rd Year 4th Year
Fixed Cost 350626 340586 331319 319421
Variable Cost 362357 392810 423588 414660
Total Cost 712982 733396 754907 734081

Sales 700000 800000 900000 900000

Contribution (Sales-VC) 337643 407190 476412 485340

B.E.P in % 103.84% 83.64% 69.54% 65.81%

Break Even Sales in Rs. 726915 669144 625902 592325

Break Even Units 145 134 125 118

Current Ratio 0.76 0.65 0.53 0.38

Net Profit Ratio 5.93% 14.64% 21.33% 23.27%
 This Project Report has been prepared based on the data furnished by the entrepreneur whose
details are given in the application.

Place : Palamaner
Date: 19-Jun-22
.

Full Name : J THANIKESH

Signature of the Beneficiary