ABSTRACT This project deals with the production of good quality of sponge iron at Kuarmunda, which is one of the remote areas of Sundargarh but is rich in iron ores and the transport facility is good as it is on the national highway. The firm is designed such that its growth occurs fast; it grows in line with other industries. It should be that much strong so that it can defend the existing status in the market. It can catch up the leading demand in the market so that the consumers get their work done within limited time. Apart from the establishment of this project, it would also provide employment to the poor people in the unskilled workers grade so that they don’t go beyond the line of poverty. Basically the purpose of making this project is to make huge amount of profit by utilizing the resources available at Kuarmunda. Since the commissioning of the first Sponge iron unit in 1980, it has been a period of notable accomplishments for Sponge Iron India Limited which has played vital role in developing and establishing coal based DR Technology. Establishment and upgradation of coal based Sponge Iron technology in the Country, innovations in the usage of Sponge Iron and its conversion into Steel, conversion of waste material into value added products, visualization of new concepts for
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ABSTRACT
This project deals with the production of good quality of sponge iron at Kuarmunda,
which is one of the remote areas of Sundargarh but is rich in iron ores and the
transport facility is good as it is on the national highway. The firm is designed such
that its growth occurs fast; it grows in line with other industries. It should be that
much strong so that it can defend the existing status in the market. It can catch up the
leading demand in the market so that the consumers get their work done within
limited time.
Apart from the establishment of this project, it would also provide employment to the
poor people in the unskilled workers grade so that they don’t go beyond the line of
poverty. Basically the purpose of making this project is to make huge amount of profit
by utilizing the resources available at Kuarmunda. Since the commissioning of the
first Sponge iron unit in 1980, it has been a period of notable accomplishments for
Sponge Iron India Limited which has played vital role in developing and establishing
coal based DR Technology. Establishment and upgradation of coal based Sponge Iron
technology in the Country, innovations in the usage of Sponge Iron and its conversion
into Steel, conversion of waste material into value added products, visualization of
new concepts for updating technology and the unique expertise in total consultancy
for establishing new Sponge Iron plants have all contributed to the evolution of
Sponge Iron India into a 'Technology Corporation'. which our project also intends to
TABLE OF CONTENTS...............................................................................................2
1. GENERAL INFORMATION....................................................................................2
2. DETAILS OF THE PROPOSED PROJECT.............................................................5
2.1. Land and Building:.........................................................................................52.2. Machineries / Equipments:.............................................................................62.3. Miscellaneous Fixed Assets...........................................................................62.4. Preliminary and Pre Operative Expenses.......................................................62.5 Working Capital..............................................................................................7
3.1. Present Demand and Supply of the Product Competition:..................................73.2 Target Clients:......................................................................................................83.3 Marketing Strategy:..............................................................................................8
4.1 Technical Know How Availability:.....................................................................94.2 Step by Step Description:...................................................................................10
5. PRODUCTION SCHEDULE..................................................................................11
5.1 Number of Working Days per Annum:........................................................115.2 Number of Working Shifts :.........................................................................11
5.2.1 Sales Revenue:..........................................................................................115.2.2 Utilities:.....................................................................................................115.2.3 Salaries/Wages:.......................................................................................115.2.4 Repairs and Maintance :............................................................................125.2.5 Selling and Distribution Expenses:...........................................................125.2.6 Administrative Expenses:..........................................................................125.2.7 Interest:.....................................................................................................125.2.8 Depreciation:............................................................................................125.2.9 Misc. Expenses:......................................................................................135.2.10 Rent:......................................................................................................13Total Cost of the Project:.....................................................................................13Means Of Finance:...............................................................................................13
Stationery & PrintingPost/Telephone/FaxGuest Entertainment Expenses
Total
20,000 50,000 20,000
SufficientAmount
90,000
(L) INTEREST - Annual:
Loan Amount
(Rs)
Interest (Rs) Installment(Rs.) Balance(Rs.)
70,00,00,000 1,40,00,000 5,00,000 1,35,00,000
17
(M) DEPRECIATION:
Sr.No.
Type of Asset Cost of Asset
Depreciation(WDV)
Amount(Rs.)
1. Buildings 23,13,60,000 10% 2,31,36,0002. Plant and
Machinery2,04,58,000 33% 67,51,140
3. Moulds and Equipments
4,07,52,000 50% 2,03,76,000
Total: 5,02,63,140
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7. WORKING CAPITAL (one month) / One cycle
Sr. No. ITEM Amount (Rs.)1.2.3.4.5.
Raw-MaterialSalary/LabourAdministrative expensesRepairs and maintenance expensesSelling and distribution expenses
12,32,26,000 64,87,500 90,000 45,000 4,70,000
8. TOTAL COST OF THE PROJECT
Sr. No. Particulars Total Value(Rs.)1.
2.
3.
4.
Fixed Capital
Working Capital margin
Preliminary & Pre-operative Expenses
Cost escalation & contingencies
10,00,00,000
13,03,18,500
97,50,00,000
10,00,00,000
Total 130,53,18,500
9. MEANS OF FINANCE
Sr. No. Particulars Amount(Rs.)
Remarks
1.
2.
Own Investment
Term Loan
50,00,00,000
70,00,00,000Some amount from
the sponsors.
Total: 120,00,00,000
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10. PROFITABILITY PROJECTIONS
Sr.No.
Particulars Amount(Rs)
1. Annual sale realization 432,00,00,00,0002. Cost of manufacturing and servicing 12,32,26,000A Annual working capital 13,03,18,500B Annual interest on loan 1,40,00,000C Annual depreciation 5,02,63,140
Total: 19,45,81,6403. Gross profit / Loss (A-B) 11,63,18,500
20
11. BREAK EVEN POINT
Break Even Point = (Fixed Cost ) * 100 / (Fixed Cost + Profit )
The Fixed Cost is primarily associated with the cost that doesnot change with respect
to time which are fixed assets like land, building, machinery and equipments.
Break Even Point = (88,86,24,000) * 100 / (88,86,24,000 + 40752500)
= 95.61
21
CONCLUSION
Thus we have formulated the action plan that takes both the short term and long term
goals into account, and good use of every resource. Accept, Adapt and Achieve; these
are the three watch words for success in today’s ever-changing situation. We would
stick to our goals inspite of the keen competitions in the market. Keeping in view the
needs and demands of our employees we would also try our level best to provide them
good facilities and yield good profit in the forthcoming years.