Objective To point all possible factors contributing to the setting up of a fabrication business on a small scale .

SCOPE Fabrication industry has gained importance with growing housing industry and stress on the security factors. Factors contributing to this include rapid industrialization, and new uses of the fabricated products. Our aim is to make a Feasibility study for setting up an iron and steel fabrication unit named NS Fabrication engaged in the manufacturing of gates, doors grills and windows. TECHNICAL FEASIBILITY DESCRIPTION OF THE PRODUCT Products manufactured in the iron & steel fabrication industries are as follows: Doors Windows Grills Gates Rolling shutters

USES OF THE PRODUCTS

DOORS : Iron fabrication are growing because the people are nowadays concerned for the security of the houses, offices and buildings. Doors are the main thing it produces in this category. WINDOWS: These are of different shape and sizes with the aim of providing ventilation with proper security.

GRILLS: Grills also get manufactured through iron fabrication which are used to put over the stairs. GATES: It refers to the main gate or entrance of any house or office. ROLLING SHUTTERS: These are the doors made for the security of the shops.

MANUFACTURING PROCESS
DESIGNING : The designs would be first decided and will be drawn on sheets according to which the product will be made. PRODUCING THE REQUIRED MATERIAL : The material required will be assembled at the production location. JOINING : The joining will include giving basic shape to the product with the use of the welding machine, sheet cutters and pipe cutters would be used to cut the pipes and sheets into desired size and shape. NUTS AND BOLTS: Applying nuts and bolts comes next in the series. FINISHING : The final shape would be given to the product by finishing by the grinding machine and tools and dies.

Designing

Procuring required material

Joining

Applying nuts and bolts

Finishing

PLANT SIZE The plant size is 200 sq mtr. Production schedule At 100% capacity utilization the proposed unit can manufacture 200 tones per annum assuming 300 working days in a year DETAILS OF MACHINERY The following machinery is required for the proposed project.

S.NO 1 2 3 4 5 6 7 Total

PARTICULAR UNIT Drill machine Welding machine Pipe cutter Grinder base Hand rill machine sheet cutter Portable 3 2 2 1 3 2 1

PRICE 6000 5000 10000 4000 4000 3000 10000

AMOUNT 18000 10000 20000 4000 12000 6000 10000 80,000

COST OF MACHINES = 80,000

PLANT LOCATION Details of land LOCATION hall, Greater Noida The area is well-developed and all infrastructural facilities like power, water, transportation, labour etc. are readily available. Labour requirement : N.S. FABRICATION Plot no-80, Surajpur, near durga cinema

S.NO 1 2

PARTICUL AR SKILLED LABOUR UNSKILLED LABOUR SUPERVIS OR WATCHMA N PEON

NOS 5 5

SALARY 4,000 2800

AMOUNT 20,000 14,000

3 4 5

2 1 1

5,000 2500 2000

10,000 2,500 2000

TOTAL TOTAL COST PER ANNUM-48,500*12= ADD 15% FRINDGE BENEFIT=

48,500 5,82,000 87,300

TOTAL-

6,69,300

POWER REQUIRED 60,000 UNIT UNIT RATES UNIT COST TOTAL COST Installed capacity At 100% capacity utilization the proposed unit can manufacture 200 tones per annum assuming 300 working days in a year Year 4th year Capacity utilisation in % MARKET FEASIBILITY MARKET DESCRIPTION The concept of iron and steel fabrication is not new to to the market and the demand for fabricated goods is increasing day by day with the civilization of society and different uses have come in front. CHANNELS OF DISTRIBUTION Distribution channel will be direct delivery of the product and direct and indirect receiving of orders CONSUMERS OF THE PORDUCT The potential buyers are the industrialists dealing with the iron products. The other buyers are owners of the construction companies who put some iron products in the buildings, houses and factories they used to construct. 60% 70% 80% 90% 1st year 2nd year 3rd year = 4.50(COMMERCIAL METER) = 2,70,000 = 2,70,000

COMPETITIVE POSITION OF THE PRODUCT The competition on this field is considerably growing but with the growth and development of the business environment as a whole, there is no need to mention the importance of fabrication in this industry. With the increasing demand day by day fabrication is now an integral part of the industry. Fabrication of iron goods, welding of items in the industry is a very common process. FINANCIAL FEASIBILITY COST OF PROJECT PARTICULAR LAND BUILDING PLANT & MACHINERY OTHER ASSETS PRE-OPERATIVE EXP MARGIN OF WORKING CAPITAL AMOUNT 18,00,000 5,00,000 80,000 32,000 100,000 1,43,000 26,55,000

TOTAL

Means of finance
OWNERS CAPITAL UNSECURED LOAN(family) 20,00,000 6,55,000 _________ 26,55,000 ___ ______

PROJECTED PROFITABILITY STATEMENT

YEAR
CAPACITY UTILISATION TURN OVER TOTAL(A) (B) COST OF PRODUCTIO N (1) RAW MATERIAL (2) POWER (3) DIRECT LABOUR 28,80,000 1,62,000 52,380 33,60,000 1,89,000 61,110 8568 38,40,000 2,16,000 69,840 9792 43,20,000 2,43,000 78,570 11,016

1ST
60% 54,00,000 54,00,000

2ND
70% 63,00,000 63,00,000

3RD
80% 72,00,000 72,00,000

4TH
90% 81,00,000 81,00,000

(4) REPAIR & 7344 MAINTAINAN CE (5) DEPRICIATIO N (6) PREOPERATIVE EXP( W.OFF) TOTAL (B) GROSS PROFIT (A-B) INT.ON WORKING 51,240 73,200

62,880

54,342

47,220

20,000

20,000

20,000

20,000

31,94,924 22,05,076

37,01,558 25,92,442

42,09,974 29,90,026

47,19,806 33,80,194

51,240

51,240

51,240

CAPITAL LOAN (D) ADMINISTRA TIVE EXP (E) SELLING & DIST EXP (F) PROFIT BEFORE TAX (G) PROVISION FOR TAX (35 %) (H) PROFIT AFTER TAX (I) ADD DEP & PRE OPERATIVE EXP (J) NET CASH ACCRUAL 1,62,000 1,89,000 2,16,000 2,43,000

1,08,000 18,83,836 6,59,342

1,26,000 22,26,202 7,79,170

1,44,000 25,78,786 9,02,575

1,62,000 29,23,954 10,23,383

12,24,494 93,200

14,47,032 82,880

16,76,211 74,342

19,00,571 67,220

13,17,694

15,29,912

17,50,553

16,67,791

CASH FLOW STATEMENT

PROJECTED CASH FLOW STATEMENT

YEAR (A) SOURCES OF FUND 1. NET CAH ACCRUAL 2. OWNERS CAPITAL 3. WORKING CAPITAL REQUIREMENT 4. UNSECURED LOAN

1ST

2ND

3RD

4TH

10.98 20 4.28 5.37

12.97 -

14.95 -

17.64 -

5.INCREASE IN SUNDRY CREDITORS TOTAL (B) APPLICATION OF FUND 1. FIXED ASSETS 2.PRE-OPERATIVE EXP 3.INC. IN CURRENT ASSETS (A) RAW MATERIAL (B) SUNDRY DEBTORS

1.20 41.83

0.24 13.21

0.24 15.19

0.24 17.88

23.45 0.50

2.40 4.50

0.48 0.90 1.38 10.98 11.83 22.81

0.48 0.90 1.38 22.81 13.81 36.62

0.48 0.90 1.38 36.62 16.5 53.12

TOTAL OPENING BALANCE SURPLUS/(DEFICENCY) CLOSING BALANCE

40.85 10.98 10.98

WORKING CAPITAL REQUIREMENT

(FIG IN LACS)

PARTICULAR

PERIOD

AMOUNT

CURRENT ASSETS

RAW MATERIAL

1 MONTH

2,40,000

SUNDRY DEBTORS

1 MONTH

4,50,000

TOTAL 6,90,000 LESS:- SUNDRY

CREDITORS WORKING CAPITAL REQUIRED

15 DAYS

(1,20,000)=5,70,000

MARGINS OF WORKING CAPITAL WORKING CAPITAL LOAN REQUIRED INTEREST ON WORKING CAPITAL @ 12%

1,43,000 4,27,000 51,240

PROJECTED BALANCE SHEET

YEAR LIABILITIES OWNERS CAPITAL RESERVE & SURPLUS UNSECURED LOAN WORKING CAPITAL LOAN CREDITORS TOTAL FIXED ASSETS LAND BUILDING 18,00,000 4,50,000 18,00,000 4,05,000 18,00,000 3,64,500 18,00,000 3,28,050 20,00,000 12,24,494 6,55,000 4,27,000 20,00,000 26,71,526 6,55,000 4,27,000 20,00,000 43,47,737 6,55,000 4,27,000 20,00,000 62,48,308 6,55,000 4,27,000 1ST 2ND 3RD 4TH

120,000 44,26,494

1,40,000 58,93,526

1,60,000 75,89,737

1,80,000 95,10,308

P&M OTHER ASSET RAW MATERIAL DEBTORS PREOPERATIVE CASH & BANK TOTAL

60,000 28,800 2,40,000 4,50,000 80,000 13,14,194 44,26,494

45,000 25,920 2,80,000 5,25,000 60,000 14,35,312 58,93,526

33,750 23,328 3,20,000 6,00,000 40,000 16,52,053 75,89,737

25,312 20,995 3,60,000 6,75,000 20,000 18,69,291 95,10,308

CALCULATION OF BREAK EVEN POINT

BEP/UNIT = FIXED COST/S.P-V.C BEP/UNIT =22.44/unit BEP(RS) =18.70*45,000=10,09,800 in Rs