PROJECT REPORT
Of
METAL CRAFT UNIT
PURPOSE OF THE DOCUMENT
This particular pre-feasibility is regarding Metal Craft unit.
The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in project
identification for investment and in order to serve his objective; the document covers various aspects
of the project concept development, start-up, marketing, finance and management.
[We can modify the project capacity and project cost as per your requirement. We can also prepare
project report on any subject as per your requirement.]
Lucknow Office: Sidhivinayak Building ,
27/1/B, Gokhlley Marg, Lucknow-226001
Delhi Office : Multi Disciplinary Training
Centre, Gandhi Darshan Rajghat,
New Delhi 110002
Email : [email protected]
Contact : +91 7526000333, 444, 555
PROJECT AT A GLANCE
1 Name of the Entreprenuer xxxxxxxxxx
2 Constitution (legal Status) : xxxxxxxxxx
3 Father / Spouse Name xxxxxxxxxxxx
4 Unit Address : xxxxxxxxxxxxxxxxxxxxxxx
District : xxxxxxx
Pin: xxxxxxx State: xxxxx
Mobile xxxxxxx
5 Product and By Product : METAL HANDICRAFT
6 Name of the project / business activity proposed : METAL HANDICRAFT
7 Cost of Project : Rs.16.68 Lakhs
8 Means of Finance
Term Loan Rs.11.18 Lakhs
Own Capital Rs.1.67 Lakhs
Working Capital Rs.3.84 Lakhs
9 Debt Service Coverage Ratio : 2.59
10 Pay Back Period : 5 Years
11 Project Implementation Period : 5-6 Months
12 Break Even Point : 41%
13 Employment : 12 Persons
14 Power Requirement : 4.00 KW
Brass and Copper are major raw materials for making
15 Major Raw materials metal handicraft products. Also brass/zinc/borax powders
: are used.
16 Estimated Annual Sales Turnover (Max Capacity) : 90.80 Lakhs
17 Detailed Cost of Project & Means of Finance
COST OF PROJECT (Rs. In Lakhs)
Particulars Amount
Land Own/Rented
Civil Work 8.80
Plant & Machinery 1.62
Furniture & Fixtures 2.00
Working Capital 4.26
Total 16.68
MEANS OF FINANCE
Particulars Amount
Own Contribution 1.67
Working Capital(Finance) 3.84
Term Loan 11.18
Total 16.68
METAL CRAFT UNIT
Introduction:
Even from early times the craftsmen of India have been known to be masters of metal.
Their knowledge of metallurgy pre-dates technologies of many other civilisations and
their skill at working metals is surpassed by few others. The traditional metal workers
knew his medium so well that he could, indeed, be said to have been able to mix and
match them and create alloys to suit every function. Not only that, but to fashion them so
as to convey delight and create objects of enduring beauty. Metal Crafts (ancient) reflect
human skill and ingenuity rather than the use of power devices. In the past, metal crafts
were resorted to for making objects for rulers and nobles as well as for their subjects, for
both religious and secular purposes. Today objects are made for wealthy citizens, the
middle class, and humble households. While religious and secular demands remain
constant, objects have become even more disparate in use and form to meet diverse needs .
In India craftsmen use different metals like iron, copper, silver and alloys like bronze,
bell metal, white metal etc to make a variety of items such as pots, pans, utensils, photo
frames, sculptures of deities, mythological figures and animals etc. Items like doorknobs,
taps, key chains, boxes etc are also made, using different metals. Metal Craft enjoys a
special place in the handicrafts industry owing to the fine, intricate hand engraving on the
metal.
Uses & Market Potential:
The global handicrafts market has been up surging, due to the increasing interest of
people in art and culture. A large number of micro and small enterprises have evolved in
the developing countries in the past few years, where artisans from poor communities are
involved in the creation of handicrafts. Their artworks are also valued on humanitarian
grounds. With the advancement in distribution channels and increasing penetration of
online retail, the handicraft products have become more visible and easily purchasable
for the consumers around the globe. The key types of distribution channels for handicraft
products are discount retailers, department stores, specialty stores, catalogue retailer,
internet retailer, and independent retailer. The involvement of several non-profit
organizations in promoting handicrafts business has not only benefitted the artisans, but
also fuelled the growth of the global handicrafts market. The increasing travel and tourism
is also supporting the growth of the global handicrafts market. The tourists on recreational
tour are always on a hunt to collect souvenirs and specialty handicrafts from the places
they visit. This has also led to the development of a large unorganized handicrafts market
especially in the developing countries.
Product:
METAL HANDICRAFT
Raw Material:
1. Brass and Copper
2. Brass/Zinc/Borax Powder
Manufacturing Process:
Moulding
Casting
Enameling
Repousee
Finishing
Fig. 1 – Process Flowchart
Area:
The approximate total area required for complete small-scale factory setup is 1000-
1200Sq. ft. approximately.
Cost of Machines:
S No. Machine Price (INR)
1. Furnace Oven 22,200/-
2. Lathe Machine 85,000/-
3. Hammer 1,500/-
4. Tongs 1,000/-
5. Pincers 1,500/-
6. Files 2,500/-
7. Scrapers 3,500/-
8. Hand Operated Drill 4,500/-
9. Chisel 5,000/-
10. Crucible 1,000/-
11. Mallet 2,500/-
12. Hand blower 6,300/-
13. Buffing machine 25,500/-
Total 1,62,000/-
Power Requirement- - The estimated Power requirement is taken at 4
KW.
Manpower Requirement– Following manpower is required:
• Skilled/unskilled worker-4
• Helper- 6
• Sales Personal and Accountant- 2
FINANCIALS
PROJECTED BALANCE SHEET
PARTICULARS I II III IV V
SOURCES OF FUND
Capital Account
Opening Balance - 2.89 4.40 6.12 7.98
Add: Additions 1.67 - - - -
Add: Net Profit 3.72 4.51 6.03 6.86 8.17
Less: Drawings 2.50 3.00 4.30 5.00 5.50
Closing Balance 2.89 4.40 6.12 7.98 10.65
CC Limit 3.84 3.84 3.84 3.84 3.84
Term Loan 9.94 7.45 4.97 2.48 -
Sundry Creditors 1.36 1.52 1.69 1.87 2.04
TOTAL : 18.02 17.21 16.62 16.17 16.53
APPLICATION OF FUND
Fixed Assets ( Gross) 12.42 12.42 12.42 12.42 12.42
Gross Dep. 1.32 2.50 3.55 4.49 5.32
Net Fixed Assets 11.10 9.92 8.87 7.93 7.10
Current Assets
Sundry Debtors 2.79 3.27 3.67 4.10 4.54
Stock in Hand 2.83 3.20 3.58 3.98 4.40
Cash and Bank 1.30 0.82 0.49 0.15 0.49
TOTAL : 18.02 17.21 16.62 16.17 16.53
- - - - -
PROJECTED PROFITABILITY STATEMENT
PARTICULARS I II III IV V
A) SALES
Gross Sale 55.83 65.32 73.45 81.94 90.80
Total (A) 55.83 65.32 73.45 81.94 90.80
B) COST OF SALES
Raw Material Consumed 27.23 30.49 33.86 37.32 40.89
Elecricity Expenses 0.60 0.66 0.72 0.78 0.84
Repair & Maintenance 0.22 0.26 0.29 0.33 0.36
Labour & Wages 15.12 16.63 18.30 20.12 22.14
Depreciation 1.32 1.18 1.05 0.94 0.84
Cost of Production 44.49 49.22 54.22 59.49 65.06
Add: Opening Stock /WIP - 1.93 2.18 2.46 2.74
Less: Closing Stock /WIP 1.93 2.18 2.46 2.74 3.03
Cost of Sales (B) 42.57 48.96 53.95 59.21 64.77
C) GROSS PROFIT (A-B) 13.26 16.36 19.51 22.73 26.03
23.75% 25.04% 26.56% 27.74% 28.67%
D) Bank Interest i) (Term Loan ) 1.21 0.99 0.72 0.44 0.17
ii) Interest On Working Capital 0.42 0.42 0.42 0.42 0.42
E) Salary to Staff 5.67 6.52 7.50 8.62 9.92
F) Selling & Adm Expenses Exp. 2.23 3.92 4.41 5.74 6.36
G) TOTAL (D+E+F) 9.54 11.85 13.04 15.23 16.87
H) NET PROFIT 3.72 4.51 6.46 7.51 9.16
6.7% 6.9% 8.8% 9.2% 10.1%
I) Taxation - - 0.43 0.65 1.00
J) PROFIT (After Tax) 3.72 4.51 6.03 6.86 8.17
PROJECTED CASH FLOW STATEMENT
PARTICULARS I II III IV V
SOURCES OF FUND
Own Contribution 1.67 - - - -
Reserve & Surplus 3.72 4.51 6.46 7.51 9.16
Depriciation & Exp. W/off 1.32 1.18 1.05 0.94 0.84
Increase In Cash Credit 3.84 - - - -
Increase In Term Loan 11.18 - - - -
Increase in Creditors 1.36 0.16 0.17 0.17 0.18
TOTAL : 23.09 5.85 7.68 8.62 10.18
APPLICATION OF FUND
Increase in Fixed Assets 12.42 - - - -
Increase in Stock 2.83 0.37 0.38 0.40 0.41
Increase in Debtors 2.79 0.47 0.41 0.42 0.44
Repayment of Term Loan 1.24 2.48 2.48 2.48 2.48
Taxation - - 0.43 0.65 1.00
Drawings 2.50 3.00 4.30 5.00 5.50
TOTAL : 21.79 6.33 8.01 8.96 9.84
Opening Cash & Bank Balance - 1.30 0.82 0.49 0.15
Add : Surplus 1.30 - 0.48 - 0.33 - 0.34 0.34
Closing Cash & Bank Balance 1.30 0.82 0.49 0.15 0.49
COMPUTATION OF CLOSING STOCK & WORKING CAPITAL
PARTICULARS I II III IV V
Finished Goods
(10 Days requirement) 1.93 2.18 2.46 2.74 3.03
Raw Material
(10 Days requirement) 0.91 1.02 1.13 1.24 1.36
Closing Stock 2.83 3.20 3.58 3.98 4.40
COMPUTATION OF WORKING CAPITAL REQUIREMENT
Particulars Amount Margin(10%) Net
Amount
Stock in Hand 2.83
Less:
Sundry Creditors 1.36
Paid Stock 1.47 0.15 1.32
Sundry Debtors 2.79 0.28 2.51
Working Capital Requirement 3.84
Margin 0.43
MPBF 3.84
Working Capital Demand 3.84
REPAYMENT SCHEDULE OF TERM LOAN 11.0%
Year Particulars Amount Addition Total Interest Repayment Cl Balance
I Opening Balance
Ist Quarter - 11.18 11.18 0.31 - 11.18
Iind Quarter 11.18 - 11.18 0.31 - 11.18
IIIrd Quarter 11.18 - 11.18 0.31 0.62 10.56
Ivth Quarter 10.56 - 10.56 0.29 0.62 9.94
1.21 1.24
II Opening Balance
Ist Quarter 9.94 - 9.94 0.27 0.62 9.32
Iind Quarter 9.32 - 9.32 0.26 0.62 8.69
IIIrd Quarter 8.69 - 8.69 0.24 0.62 8.07
Ivth Quarter 8.07 8.07 0.22 0.62 7.45
0.99 2.48
III Opening Balance
Ist Quarter 7.45 - 7.45 0.20 0.62 6.83
Iind Quarter 6.83 - 6.83 0.19 0.62 6.21
IIIrd Quarter 6.21 - 6.21 0.17 0.62 5.59
Ivth Quarter 5.59 5.59 0.15 0.62 4.97
0.72 2.48
IV Opening Balance
Ist Quarter 4.97 - 4.97 0.14 0.62 4.35
Iind Quarter 4.35 - 4.35 0.12 0.62 3.73
IIIrd Quarter 3.73 - 3.73 0.10 0.62 3.11
Ivth Quarter 3.11 3.11 0.09 0.62 2.48
0.44 2.48
V Opening Balance
Ist Quarter 2.48 - 2.48 0.07 0.62 1.86
Iind Quarter 1.86 - 1.86 0.05 0.62 1.24
IIIrd Quarter 1.24 - 1.24 0.03 0.62 0.62
Ivth Quarter 0.62 0.62 0.02 0.62 - 0.00
0.17 2.48
Door to Door Period 60 Months
Moratorium Period 6 Months
Repayment Period 54 Months
CALCULATION OF D.S.C.R
PARTICULARS I II III IV V
CASH ACCRUALS 5.04 5.68 7.08 7.79 9.00
Interest on Term Loan 1.21 0.99 0.72 0.44 0.17
Total 6.26 6.67 7.79 8.24 9.17
REPAYMENT
Principal Repayment of Term Loan 1.24 2.48 2.48 2.48 2.48
Interest on Term Loan 1.21 0.99 0.72 0.44 0.17
Total 2.45 3.47 3.20 2.93 2.65
DEBT SERVICE COVERAGE RATIO 2.55 1.92 2.43 2.81 3.46
AVERAGE D.S.C.R. 2.59
Assumptions:
1. Production Capacity of Metal Handicraft is 110 Pcs per day. First year, Capacity
has been taken @ 50%.
2. Working shift of 10 hours per day has been considered.
3. Raw Material stock and Finished goods closing stock has been taken for 10 days.
4. Credit period to Sundry Debtors has been given for 15 days.
5. Credit period by the Sundry Creditors has been provided for 15 days.
6. Depreciation and Income tax has been taken as per the Income tax Act,
1961.
7. Interest on working Capital Loan and Term loan has been taken at 11%.
8. Salary and wages rates are taken as per the Current Market Scenario.
9. Power Consumption has been taken at 4 KW.
10. Selling Prices & Raw material costing has been increased by 3% & 2%
respectively in the subsequent years.
DISCLAIM ER
The views expressed in this Project Report are advisory in nature. SAMADHAN assum e
no financial liability to anyone using the content for any purpose. All the materials and
content contained in Project report is for educational purpose and reflect the views of the
industry which are drawn from various research material sources from internet, experts,
suppliers and various other sources. The actual cost of the project or industry will
have to be taken on case to case basis considering specific requirement of the project,
capacity and type of plant and other specific factors/cost directly related to the
implementation of project. It is intended for general guidance only and must not be
considered a substitute for a competent legal advice provided by a licensed industry
professional. SAMADHAN hereby disclaims any and all liability to any party for any direct,
indirect, implied, punitive, special, incidental or other consequential damages arising
directly or indirectly from any use of the Project Report Content, which is provided as is,
and without warranties.
