M/S SHRI BAJRANG TRADERS (PROP.

Arjun Dalal)

DETAILED PROJECT REPORT

IRON AND STEEL (INCLUDING CAST AND FORGED PRODUCTS)

Gram Porsa, Post Morena, Bhind, Mp - 477222

 TABLEOFCONTENTS

SNo. Topic PageNu

mber
1. ProjectSummary 3
2. AbouttheProduct 4-5
3. Process Flow Chart 6
4. Economicsof theProject 7-16
4.1. Basis&Presumptions 7-8
4.2. Premises/Infrastructure 9
4.3. Total Cost of Project 9
4.4. MeansofFinance 9
4.5. TermLoan 10
4.6. TermLoan repayment & interest schedule 10
4.7. Salaries/Wages 11
4.8. PowerRequirement 12
4.9. DepreciationCalculation 12
4.10. Repairs&Maintenance 12
4.11. ProjectionsofProfitabilityAnalysis 13
4.12. ProjectedBalanceSheet 14
4.13. Cash-FlowStatement 15
4.14. Key Ratio and Feasibility 16
 1. PROJECTSUMMARY
1.Nameoftheproposedproject : Manufacturing of Iron and Steel (including cast
and forged products)
2.Natureofproposedproject : Proprietorship
3.Proposedprojectcapacity : 720 MT/annum

4.Rawmaterial : Mild Steel Scrap, Sponge Iron, Ferro Alloys

5.Majorproductoutputs : Iron and Steel Castings
6.Totalprojectcost : Rs.76.84.00Lakh
 Land development, building & : Rs. 20.84 Lakh
CivilConstruction
 Machineryandequipment’s : Rs. 25.00 Lakh
 MiscellaneousFixedAssets : Rs.5.00Lakh
 Workingcapital : Rs.26 Lakh
8.MeansofFinance
 Promoter’scontribution(min10%) : Rs. 25.00 Lakh

 Loan from relative : Rs.11.84 Lakh

 Termloan : Rs.40.00 Lakh

 WorkingCapitalRequirement : Rs.26.00Lakh
9.ProfitafterDepreciation,Interest& Tax

 1styear : Rs.-0.49Lakh
 2ndyear : Rs.5.27Lakh
 3rdyear : Rs.8.39Lakh
 4thyear : Rs.11.74 Lakh
 5thyear : Rs.14.18Lakh
11.AverageDSCR : 1.70
12.Termloanrepayment : 5Years
2. ABOUTTHEPRODUCT

2.1. PRODUCTINTRODUCTION:

The company will manufacture Iron Castings by using sponge Iron and scrap as raw materials.
Silicon & manganese are added as alloying elements using medium frequency induction
furnace and continues casting technology. In the Induction Melting Furnace where the iron
melts at a temperature of about 16500C. When the total charge gets melted into hot liquid
metal then the metallurgy of steel in terms of carbon, phosphorous content, alloy elements etc
is controlled. Based upon the composition of the molten steel, additives like Silico, Manganese
will be added to get the requisite composition and grade of steel. For production of billets the
molten material is poured into a ladle and then transported to Continuous Casting machine
with the help of overhead cranes. The ladle is placed over the Continuous Casting machine to
cast the molten steel into required size of ingots/billets. This is an automatic machine, which is
totally programmed to cut the Billets once the preset value is reached. The Cut Billets are
transported by a handling crane and stored in the Storage yard as per the Grade and Quality for
dispatch. The hot gases from the Furnace are being handled by special deducting equipment
followed by Ventury scrubber before it is let out to atmosphere through a Self Supported
Chimney
PROCESSFLOWCHART

Mild Steel Scrap, Sponge Iron,

Ferro Alloys

Induction Furnace APCD (De-dusting

Equipment and Venturi
Scrubber)

Molten Metal ToLaddle

Continuous Casting machine

Iron casting
 4.1. BASIS AND PRESUMPTIONS

Assumptions Used

Capacity Utilization

Itisassumedthatpostinvestmentofloanfundsintobusiness,thebusinesswouldreachitsoptimumcapacityint
hefollowingmanner

Year 1 Year 2 Year 3 Year 4 Year 5

SalesCapacityofBusiness 60% 80% 90% 100% 100%

ExpensesCapacity
(Variable&SemiVariable) 70% 90% 100% 100% 100%

Estimated Sales

Particulars Current Year

Capacity Utilization 70%

AverageSalesperDay ₹20,949

InProjectedYears,Salesareconsideredattheoperationalcapacitytabulated
above.Overtheyearsthecurrentsellingpriceisincreasedmarginallyasitis
assumedthatafterourproductisestablishedinthemarket,wewillbeableto command premium in the market

Estimated Expenses
Basedontheworkingexperienceandmarketstudy,thePromotershaveassumedthatat100%operationalcapacity,f
ollowingexpenseswouldhavetobeincurred

Particulars MonthlyCostatcurrentprices
Purchases(Stock,RawMaterial,etc.)* ₹6,50,000
BuildingRent ₹1,700
 Salary&Wages* ₹75,000
Electricity,Fuel&Water* ₹42,500
Repair&Maintenance ₹6,500
Transportation* ₹15,000
Telephone/postage&Internetcosts ₹2,500
Advertising&Marketing ₹7,500
Insuranceexpenses ₹0
Consumables,Spares,Stores,etc.* ₹0.00
Otherexpenses ₹5,000
Total ₹8,05,700
*TheseExpenses(50%ofSalary)areconsideredtocalculateGrossProfitmargin

Current Year Period

FortheCurrentPeriod,theprojectionsworkedoutareforthebalanceperiodof12month(s)

Adjustment for Inflation

InSales&Expenses,both,nominaladjustmentforpriceincreaseduetoinflationismade

4.2. PREMISES/INFRASTRUCTURE

Theapproximatetotalarearequiredforcompletefactorysetupis904.5Sq.mtr. forsmothproduction
includingstoragearea.It isexpected that thepremises willbe on lease taken from Madhya Pradesh Industrial
Development Corporation (MPIDC).
4.3. TOTALCOSTOFPROJECT

COSTOFPROJECT
(inLacs)

PARTICULARS Amount

Land&Building 20.84
Plant&Machinery 25.00
MiscellaneousAssets 5.00
Workingcapital 26.00
Total 76.84

4.4. MEANSOFFINANCE

MEANSOFFINANCE

PARTICULARS AMOUNT
OwnContribution(min10%) 25.00
Loan from Friends and Family 11.84
TermLoan 40.00
WorkingCapital(BankFinance) 0.00
Total 76.84
4.5. TERMLOAN:TermloanofRs.40.00LakhisrequiredforprojectcostofRs.76.84
Lakh

4.6. TERMLOANREPAYMENT&INTERESTSCHEDULE
Term Loan Amount Rs.40, 00,000.00
Loan O/s after Moratorium Period Rs.42, 14,648.00

Monthly EMI Amount Rs.98270.00

Year Interest Charged Total Payment to Principal Repaid Closing Loans O/s
bank
1st Year 3,93,620 4,91,348 3,12,376 39,02,272
2nd Year 3,71,605 11,79,234 8,07,630 30,94,642
3rd Year 2,82,601 11,79,234 8,96,633 21,98,009
4th Year 1,83,789 11,79,234 9,95,445 12,02,564
5th Year 74,088 11,79,234 11,05,147 97,417
6th Year 852 98,270 97,417 0
4.7. SALARY&WAGES

Particulars Wages Noof Total

Rs.perMonth Employees Salary

PlantOperator 10000 4 40,000

Supervisor 15,000 1 15,000
Back Office Staff 20,000 2 20,000
Totalsalarypermonth 75,000
Totalannuallabourcharges 9,00,000
 4.8. POWERREQUIREMENT - 150KW

4.9. DEPRECIATION SCHEDULE

Assets to be purchased Depreciation Rate

Land 0%

Machinery and Equipment 15%

Computers, Printers etc 40%

Furniture, Fittings and Racks 10%

Electrification and back up 10%

Other Initial Expenditure 15%

4.10. REPAIR&MAINTENANCE:Repair&Maintenanceis2.5%ofGrossSale.
4.11. PROJECTIONSOFPROFITABILITYANALYSIS

Particulars 1St Years 2nd Years 3rd Years 4th Years 5th Years
Income
Revenue Income 70.18 105.36 115.37 130.43 136.27

Expenses
Purchases (Raw 58.24 78.62 79.08 91.80 92.90
Materials)
Changes in (9.53) (4.94) (1.16) (2.87) (0.99)
Inventory
Salary and Wages 0.19 0.20 0.23 0.23 0.24
Electricity, Fuel 3.27 4.86 5.68 5.85 6.02
and Water
Repair and 0.36 0.41 0.65 0.89 1.20
Maintenance
Transportation 1.15 1.72 2.00 20.6 2.12
Phone, postage & 0.27 0.32 0.33 0.34 0.35
Internet
Advertising & 0.91 0.95 1.10 1.19 1.27
marketing
Consumables, 0 0 0 0 0
Spares, etc.
Other Expenses 0.38 0.57 0.67 0.69 0.71

EBIDTA 9.15 14.53 16.77 19.92 21.81

Depreciation and 5.71 5.31 4.50 3.84 3.30

Amortization

EBIT 3.45 9.22 12.27 16.08 18.51

Interest Expenses 3.94 3.72 2.83 1.84 0.74

Profit Before -0.49 5.50 9.44 14.24 17.77

Tax

Tax Expenses - 0.23 1.05 2.49 3.59

Profit after Tax -0.49 5.26 8.39 11.75 14.18

 4.12. PROJECTEDBALANCESHEET

Particulars 1st Years 2nd Years 3rd Years 4th Years 5th Years
SOURCES OF FUNDS
A. Own Funds
Intial Capital Invested 25.00 25.00 25.00 25.00 25.00
Additional Capital added 0.00 0.00 0.00 0.00 0.00
Total Owner’s Capital 25.00 25.00 25.00 25.00 25.00
Surplus(+) or deficit (-) -0.49 4.78 13.17 24.91 39.09
in P&L

B. Long Term Liabilities

Term Loan From Bank 39.02 30.95 21.98 12.03 0.97
Loan from Friends & 11.84 11.84 11.84 11.84 11.84
Family

C. Current Liabilities
Working capital Loan 0.00 0.00 0.00 0.00 0.00
Interest payable 0.36 0.31 0.24 0.15 0.06
Provision for Taxation - 0.23 1.05 2.49 3.60
Trade payables 7.34 9.24 9.08 9.20 8.57

Total Sources of Funds 83.07 82.35 82.36 85.63 89.13

Particulars 1st Years 2nd Years 3rd Years 4th Years 5th Years
APPLICATION OF FUNDS
A.Non-Current Assets
Fixed Assets
Gross Block 5.84 50.84 50.84 50.84 50.84
Depreciation till date 5.71 11.02 15.52 19.37 22.67
Net block 45.13 39.82 35.31 31.47 28.17
B.Current Assets
Cash & Bank balances 18.14 12.35 13.04 13.39 17.08
Trade Receivables 6.38 9.66 11.63 14.33 16.18
Stock in Hand 9.53 14.47 15.63 18.50 19.50
Other Current Assets 3.88 6.05 6.74 7.93 8.21

Total Application of 589.62 734.03 820.06 1084.38 1124.82

Funds
4.13. CASHFLOWSTATEMENT

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

A.CashFlowfromOperatingActivities
NetProfitAfterTax -0.49 5.27 8.39 11.75 14.18
Add:InterestExpense 3.94 3.72 2.83 1.84 0.74
Add:Depreciation 5.71 5.31 4.50 3.84 3.30
OperatingProfitbeforeWorkingCa
pitalChanges 9.15 14.30 15.72 17.43 18.22
(Increase)/
DecreaseinCurrentAssets(oth
erthanCash) (19.79) (10.39) (3.82) (6.77) (3.12)
Increase/
(Decrease)inCurrentLiabilitie
s(otherthan WCloan) 7.69 2.09 0.59 1.48 0.38
(319.91) (79.25) 19.49 (9.91) 151.73

B.CashFlowfromFinancingActivities
InterestExpense (3.94) (3.72) (2.3) (1.84) (0.74)
TermLoanTaken/(Repaid) 39.2 (8.07) (8.97) (9.96) (11.05)
WorkingCapitalLoanTa
ken/(Repaid) 0.00 - - - -
LoanfromFriends&Family 11.84 - - - -
CapitalIntroduced/
(Drawings) 25.00 0.00 0.00 0.00 0.00
SubsidyReceived - - - - -
71.93 (11.79) (11.79) (11.79) (11.79)

C.CashFlowfromInvestingActivities
PurchaseofFixedAssets (50.84) - - - -

TotalCashInflow//
(Outflow)(A+B+C) 18.14 (5.79) 0.70 3.69 15.80
AddOpeningCashBalance - 18.14 12.35 13.04 13.39
ClosingCashBalance 18.14 12.35 13.04 13.39 17.08
 4.14. KEY RATIOS AND FEASIBILITY

Particulars FY23-24 FY24-25 FY25-26 FY26-27 FY27-28

Ratios
DebtEquityRatio 2.08 1.44 0.89 0.48 0.20
InterestCoverage 2.33 3.91 5.93 1.84 29.45
DebtServiceCoverage
Ratio(DSCR-Gross) 1.30 1.21 1.33 1.48 1.55

Ratios
CurrentRatio 4.93 4.35 4.54 4.57 4.99
QuickRatioorLiquidRatio 3.19 2.25 2.38 2.34 2.82

ProfitabilityRatios
GrossProfitMargin 20.2% 20% 21.50% 21.80% 22.70%
EBIDTAMargin 13.0% 13.80% 14.50% 15.30% 16.00%
NetProfitMargin -0.7% 5.0% 7.3% 9.0% 10.4%

ActivityRatios(onclosingvalue)
DebtorsTurnover(days) 30.45 33.46 36.80 40.12 43.33
TradePayables(days) 34.83 32.02 29.02 26.03 23.35
InventoryTurnover(days)* 54.82 67.17 72.13 73.56 76.60
FixedAssetstoTurnoverRatio
1.55 2.65 3.27 4.14 4.84

*ClosingInventoryvalueconsidered
ENDOFREPORT