AWS Crane

Solution company.

1. YA S H K U M A R V YA S - 3 4 0 6 5

2. ZALAK SAG AR - 34049

3. R U S H I L PAT E L- 3 4 0 4 4

4. A R PA N M A K WA N A - 3 4 0 2 8

5. RENCY LIMBANI-34023
FLOW OF BUSINESS ANALYSIS:-

About us, permits required, capital required For the whole company and its analysis

THEORY PART THEORY PART Capital Budgeting Capital budgeting

Legal compliance For the particular plant and its analysis

WHO ARE WE?
We are a start-up mainly focused on repairing and maintaining cranes
and their related services. Our main focus is to facilitate our services to
the crane operators situated on the seaports to simplify the cargo
handling capacity. We are the crane solution providers who provide
services at your place and even we carry it to our mechanical warehouse
for repair and maintenance.
Well there can be various maintenance and services which a crane
requires, lets just go through some of them very quickly:-
 TYPES OF MAINTENANCE:-
A. Preventive Maintenance: This type of maintenance involves regular inspections, cleaning, lubrication, and
replacement of parts before they fail. It helps to identify and fix potential issues before they become major
problems.

B. Corrective Maintenance: This type of maintenance involves repairing or replacing components that have failed or
are malfunctioning. It is done to restore the crane to its normal operating condition.

C. Predictive Maintenance: This type of maintenance uses data analysis and monitoring to predict when
maintenance

D. Routine Maintenance: This type of maintenance involves regular checks, such as checking fluid levels,
inspecting cables and pulleys, and tightening bolts and nuts.

E. Overhaul Maintenance: This type of maintenance involves disassembling and inspecting major components of
the crane, such as the hoist, trolley, and boom. It is done to identify and fix any wear or damage before it causes
failures needed. It helps to prevent unexpected downtime and reduce repair costs.
 WHAT ARE THE LICENSES &
PERMITS REQUIRED?
1. Business registration: Most countries require businesses to be registered with the government. This involves
obtaining a business license and registering with the appropriate authorities.

2. Contractor's license: In some countries or states, a contractor's license may be required to operate a crane
maintenance company.

3. Occupational licenses: Technicians who work on cranes may require an occupational license or certification to
ensure they have the necessary training and experience.

4. Environmental permits: If the company disposes of waste materials, such as oil or hydraulic fluids, it may require
an environmental permit.

5. Insurance: The company may be required to carry certain types of insurance, such as liability insurance and
workers' compensation insurance.

6. Tax permits: The company may need to obtain tax permits or register for sales tax or value-added tax (VAT)
depending on the country or state/province in which it is located.

It's recommended to research the specific licenses and permits required in the country, state/province, or city in which
the company is located and consult with a business advisor or attorney to ensure compliance with all regulations.
 FOR WHAT/WHERE EXACTLY
THE CAPITAL IS REQUIRED?
1. Business registration and legal fees: This includes the cost of registering the company, obtaining necessary licenses and
permits, and legal fees.

2. Equipment and tools: This includes the cost of purchasing or renting tools and equipment needed to service cranes, such
as hoists, winches, and inspection equipment.

3. Employee salaries and benefits: This includes the cost of hiring and training employees, as well as providing benefits such
as health insurance and retirement plans.

4. Insurance: This includes liability insurance, workers' compensation insurance, and other insurance policies that may be
required.

5. Marketing and advertising: This includes the cost of advertising the company's services and building a client base.

6. Rent and utilities: This includes the cost of renting or leasing a facility and paying for utilities such as electricity, water, and
internet.

The total amount required to set up a crane maintenance company can vary widely depending on the size of the company and
the location, but it could range from tens of thousands to several hundred thousand dollars or more. It's recommended to consult
with a business advisor or accountant to help estimate the cost of setting up a crane maintenance company.
WHAT ACTS ARE IMPLIED:-
The acts applicable in setting up a crane maintenance business may vary depending on the
country or state/province in which the business is being established. However, here are
some common acts that may be applicable:
1. Occupational Safety and Health Act (OSHA): This act sets out regulations and standards
for workplace safety, including requirements for cranes and other heavy equipment.
2. Environmental Protection Act: This act sets out regulations and standards for
environmental protection, including regulations for the disposal of waste materials such
as oil or hydraulic fluids.
3. Contractor's License Acts: In some countries or states, a contractor's license may be
required to operate a crane maintenance business.
CONTD….
1. Taxation Laws: The company may need to comply with various tax laws, such as sales tax or
value-added tax (VAT), depending on the country or state/province in which it is located.

2. Business Registration Acts: Most countries require businesses to be registered with the
government. This involves obtaining a business license and registering with the appropriate
authorities.

3. Employment Laws: The company may need to comply with various employment laws, such as
minimum wage requirements, non-discrimination laws, and employee safety regulations.

It's important to research the specific acts and regulations applicable in the country or
state/province in which the crane maintenance business is being established and consult with a
business advisor or attorney to ensure compliance with all regulations.
WHAT IS THE AMOUNT
REQUIRED?
So, for setting up the crane solution company we would be required the lump sum of 250000$/
2Cr. INR. For the same, we have identified the two potential alternative plans i.e PLAN A & PLAN B.

For each plan initial investment will be 20,000,000 INR (2Cr. INR), the project’s life is five years.
The depreciation is calculated and rate of taxation is 50%. Discount rate is at 12%
YEAR PLAN 1 PLAN 2
1 80,00,000 1,00,00,000
2 80,00,000 1,00,00,000
3 80,00,000 80,00,000
4 80,00,000 80,00,000
5 80,00,000 40,00,000
CAPITAL BUDGETING ON THE BASIS OF CASH FLOW:-
PLAN A
YEAR PBDT DEP PBT TAX (50%) PAT DEP CF DISC RATE PVCF
1 8000000 4000000 4000000 2000000 2000000 4000000 6000000 0.893 5358000
2 8000000 4000000 4000000 2000000 2000000 4000000 6000000 0.797 4782000
3 8000000 4000000 4000000 2000000 2000000 4000000 6000000 0.711 4266000
4 8000000 4000000 4000000 2000000 2000000 4000000 6000000 0.636 3816000
5 8000000 4000000 4000000 2000000 2000000 4000000 6000000 0.567 3402000
10000000 21624000

PLAN B
YEAR PBDT DEP PBT TAX (50%) PAT DEP CF DISC RATE PVCF
1 10000000 4000000 6000000 3000000 3000000 4000000 7000000 0.893 6251000
2 10000000 4000000 6000000 3000000 3000000 4000000 7000000 0.797 5579000
3 8000000 4000000 4000000 2000000 2000000 4000000 6000000 0.711 4266000
4 8000000 4000000 4000000 2000000 2000000 4000000 6000000 0.636 3816000
5 4000000 4000000 0 0 0 4000000 4000000 0.567 2268000
10000000 22180000
 PLAN A PLAN B

PAYBACK 3.33 YEARS 3 YEARS

PERIOD

ARR 20% 20%

NPV 1624000 INR 2180000 INR

PI 1.08 1.11

ORR 10% 10%

HENCE IT SEEMS THAT PLAN B WILL BE MORE SUITABLE TO MOVE ON WITH…….

After accepting plan B hence we have prepared the estimated figures for setting up the Plant and other
expenses….. So we are considering the installation/purchase of the plant for our business which will carry out
some operations performed by labour. From the following figures we have prepared the profitability
statement and work out the payback period and return on original investment in respect of plant:-
PARTICULARS PLAN B

Estimated life of plant 6 years

Cost of Plant 6,00,00,000

Cost of indirect material 1,92,000

Savings in scrap 20,00,000

Additional cost of maintenance 6,48,000

Estimated savings in direct wages 200

No. of employees not required
Wages per employees 800
PARTICULARS PLAN B PARTICULARS ANALYSIS

INCOMES
SAVINGS IN SCRAP 2000000
PAYBACK PERIOD 5.42 YEARS
SAVINGS IN DIRECT WAGES 160000

TOTAL (A) 2160000

A.R.R. 0.59%
EXPENSES
COST OF INDIRECT MATERIAL 300000
ADDITIONAL COST OF MAINTENANCE 648000
N.P.V 636000 INR
TOTAL (B) 948000

P.B.D.T (A-B) 1212000 P.I. 1.11

DEP 1000000
PBT 212000
TAX 106000
O.R.R. 0.29%
PAT 106000
DEP 1000000
CASH FLOW/PVCF 1106000