1

REVIVAL

PROJECT REPORT

ON

M/s. J K ENGINEERING
KODUMON EAST
PATHANAMTHITTA
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REVIVAL

PROJECT REPORT
on
M/s. J K ENGINEERING
KODUMON EAST
PATHANAMTHITTA

INTRODUCTION AND BACKGROUND

From time immemorial timber had been in use for the

manufacturing of furniture and other building materials like doors , windows etc.
But due to the scarcity of hardwood timber people thought about other
alternatives and where steel furniture and other building materials stands in. It
has more advantages that wooden or plastic furniture like :-
1. Easy to clean and maintain. steel does not absorb dirt; in fact, it actually
resists smudges, fingerprints and scuff marks relatively easily, making it very
easy to clean and maintain. steel furniture can be wiped down with a damp cloth
and sanitized easily. The surface can be protected with a cleaner to preserve its
smooth, sleek and shiny surface.
2. Long life span. steel does not fade or become discolored over time. It's also a
rust-proof and stain-resistant material, so it will maintain its shine and preserve
all of the aesthetic qualities of your appliances for several years to come.
3. Does not harbor germs. Because steel is non-porous, it resists bacteria and
germs more effectively than wood or plastic surfaces. steel can be wiped clean
with a disinfectant cleaner after use, and is an attractive option for homes with
young children and pets or for anyone who wants to keep their furniture as clean
and immaculate as possible.
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4. Aesthetically pleasing. steel appliances can complement almost any furniture

or home design and theme, and the sleek, gleaming metallic finish can be
balanced out with wood or plastic accents
Promoted by the above favourable advantages and increased
demand for these products we started our industrial unit for the manufacturing
of Steel Furniture and other allied products during the year 2013.
Till 2019 we done our business in well manner but for the last 1
year we were also forced to closed down our unit due to various reasons , like
lock down due to covid etc, which were beyond our control . Due to this close
down we bearded a lot of loss like damage of machinery and raw materials But
we are confident that with little push and erecting new machineries can bring
our industry to a new horizon . Hence with the new supports declared by the
state government we proposes this revival project report for the revival of our
closed down industry.

About the Proprietor

The unit is a proprietary concern . The proprietor of the unit is Sri.

Jyothish Kumar V , Pushpavilasom , Kodumon East , Pathanamthitta . He is young
and have years of experience in industrial and business field . He is qualified
with substantial means. Further, he has immense knowledge about industry. He
is capable to manage the unit and it has already proven by him . The unit was
closed down due to the various reasons beyond his control .

Present Stage of the unit

The production of the unit was closed down around 1 year back and
proprietor can not supply items against the orders before him due to the lack of
production. In the unit at present there exists various fixed assets like land ,
building etc with a book value of Rs. 6,88,148/ ( as on 01.04.20 ) ..
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In plant and machinery even though there are some usable

machines with a book value of Rs. 2,07,650 / - are already existing .. But in order
to start production the unit has to be equipped with more machineries like pipe
bending machine , Welding Machine , Compressor etc. All other existing
machineries can be used for the production to some extent and repairing and
reconditioning. The promoter already brought the quotation for the new
machineries and the cost of the same will be Rs. 3.60 lakhs . In addition to that
new electrification and allied works are needed to restart the production . An
amount of Rs. 32,350/ is to be needed in this segment. Thus with a total fresh
outlay of Rs.3,92,350 /-is needed in machineries for restart
One of the main reason behind the lay off was the insufficient
stock of raw materials. At present there is no stock of raw materials to restart its
production. Hence with fresh financial input only the unit can restart its
production . As per the projected estimation the proprietor is confident to restart
the unit with a total out lay of Rs. 8.00 lakhs in this segment. The remaining fund
for the working capital segment can be arranged from the realization debtors and
credit from the trade creditors

Requirement For Revival

In order to revive the unit and restart its production the unit has
rise fresh cash inputs by the way own fund , incentives from Industries
Department , Financial assistance from bank are required . The remaining fund
required if any for revival can be meet from own fund , unsecured loans etc.

.Market Potential , Scope & Other Favorable Circumstances

Recently there is high increase in the demand of quality and

fashionable steel furniture. This is primarily due to the inflow of foreign
currency to the state. More over banks are allotting huge funds as loans for
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construction of residential and commercial buildings at concessional rate of

interest, since housing finance is treated as a priority sector advance. The vital
components for house furnishing are these steel furniture . Moreover scarcity
and restrictions of hard wood leads people to think about steel furniture as
alternative. It is durable and easy maintenance which attracts more customers.
Moreover in addition to the common steel furniture the promoter also intends
to manufacture steel hospital furniture also.

As such, although there is enough scope for the product the number of
units engaged in the manufacture of the above products are very much limited in
the district as a whole. In Adoor area there is hardly any unit of the type
proposed by the promoter The promoter has already got many valuable regular
customers who were placing big orders before him. All these customers will be
come back , if the production restart. Hence the scope of unit after revival is
beyond doubt,
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COST OF PROJECT ( Rs. )

ITEM EXISTING PROPOSED TOTAL

(BV) During
Revival

Land 125000 125000

Building 563148 0.00 563148

Plant & Machinery

( Including
207650 392350 600000
Electrification &
Furniture- Approx)

Working Capital 0.00 800000 800000

TOTAL :- 895798 1192350 2088148

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PLANT & MACHINERY

EXISTING ( B V )

1. Bending machine

2. Cutter

3. Welding machine

4. Drill

5. Furniture and Office Equipments etc

6. Industrial Electrification and Installation

Total Rs. 2,07,650.00

PROPOSED
Pipe bending machine Rs. 1,63,000.00
Bench Drill with motoressor Rs. 32,000.00
Impact Drill Rs. 11,000.00
110 Ltr Compressor Rs. 36,000.00
Tig Welding machine Rs. 24,000.00
Arc Welding machine Rs. 24000.00
Cut Off machine Rs. 96,000.00
Orbital Sander Round Rs. 21,000.00
Jigsaw Rs. 12,000.00
Straight Grinder Rs. 19,000.00
Additional Electrification Rs. 32,350.00
Total Rs. 3,92,350.00
Grand Total Rs. 6,00,000.00
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WORKING CAPITAL COMPUTATION

A Raw materials required per month

MS Items , Welding Consumables etc in LS Rs. 2,40,000.00

Total :- Rs. 2,40,000.00

B. Labour Cost
a. Store cum Accountant Rs. 7,500.00
b. Skilled Fabricators – 2 Nos Rs. 30,000.00
c. Skilled Workers -3 Nos Rs. 36,000.00
Rs. 73,500.00
C. OTHER EXPENSES /MONTH

Item Amount/ Month Rs.

Electricity/ Fuel Charges 2,500

Carriage 2000

Repairs & Maintenances 500

Other Direct expenses 1000

Printing & Stationery 250

Communication 250

Travelling/ Transporting Expenses 3,000

Other unforeseen expenses 500

TOTAL 10,000
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Working Capital
Stock of Raw
Materials 45 Days Rs. 4,32,000.00
Work in in Process 5 Days Rs. 48,000.00
Stock of Finished
Goods 10 Days Rs. 96,000.00
Credit Sale 15 Days Rs. 1,44,000.00
One month working expenses Rs. 83,500.00
Total Rs. 8,03,500.00
Say Rs. 8,00,000.00

COST OF PRODUCTION / MONTH

( at 60% capacity utilization on 1st year after revival)
Item Amount. Rs.
Raw materials 2,40,000.00
Staff & Labor 73,500.00
Other Expenses 10,000.00
Interest on Term Loans ( Existing and New ) 4,360.00
Interest on Working Capital CC 4,355.00
Depreciation 9,690.00
Sales Promotion Expenses 3,750.00
T O T A L :- 3,45,655.00

SALES REVENUE / MONTH

1 From the sale of various steel furniture in LS Rs. 3,75,000.00

Total Rs. 3,75,000.00

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Details of Depreciation

(Rs)
VALUE
OF DEPRECIATED
YEAR PARTICULARS DEPRECIATION
FIXED VALUE
ASSETS

1 Land 125000.00 No depreciation or appreciation provided

2 Building 563148.00

3 Machinery 600000.00

Dep provided on 1163148.00

I 1163148 116315 1046833

II 1046833 104683 942150

III 942150 94215 847935

IV 847935 84794 763141

V 763141 76314 686827

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REPAYMENT OF EXISTING TERM LOAN

Repayment Payment
Beginning Scheduled towards towards Ending
Instl.No Balance Payment Principal Interest Balance

1 300000 6301 3926 2375 296074

2 296074 6301 3957 2344 292117
3 292117 6301 3988 2313 288129
4 288129 6301 4020 2281 284109
5 284109 6301 4052 2249 280057
6 280057 6301 4084 2217 275973
7 275973 6301 4116 2185 271857
8 271857 6301 4149 2152 267708
9 267708 6301 4182 2119 263526
10 263526 6301 4215 2086 259311
11 259311 6301 4248 2053 255063
12 255063 6301 4282 2019 250781
13 250781 6301 4316 1985 246465
14 246465 6301 4350 1951 242115
15 242115 6301 4384 1917 237731
16 237731 6301 4419 1882 233312
17 233312 6301 4454 1847 228858
18 228858 6301 4489 1812 224369
19 224369 6301 4525 1776 219844
20 219844 6301 4561 1740 215283
21 215283 6301 4597 1704 210686
22 210686 6301 4633 1668 206053
23 206053 6301 4670 1631 201383
24 201383 6301 4707 1594 196676
25 196676 6301 4744 1557 191932
26 191932 6301 4782 1519 187150
27 187150 6301 4819 1482 182331
28 182331 6301 4858 1443 177473
29 177473 6301 4896 1405 172577
30 172577 6301 4935 1366 167642
31 167642 6301 4974 1327 162668
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32 162668 6301 5013 1288 157655

33 157655 6301 5053 1248 152602
34 152602 6301 5093 1208 147509
35 147509 6301 5133 1168 142376
36 142376 6301 5174 1127 137202
37 137202 6301 5215 1086 131987
38 131987 6301 5256 1045 126731
39 126731 6301 5298 1003 121433
40 121433 6301 5340 961 116093
41 116093 6301 5382 919 110711
42 110711 6301 5425 876 105286
43 105286 6301 5467 834 99819
44 99819 6301 5511 790 94308
45 94308 6301 5554 747 88754
46 88754 6301 5598 703 83156
47 83156 6301 5643 658 77513
48 77513 6301 5687 614 71826
49 71826 6301 5732 569 66094
50 66094 6301 5778 523 60316
51 60316 6301 5823 478 54493
52 54493 6301 5870 431 48623
53 48623 6301 5916 385 42707
54 42707 6301 5963 338 36744
55 36744 6301 6010 291 30734
56 30734 6301 6058 243 24676
57 24676 6301 6106 195 18570
58 18570 6301 6154 147 12416
59 12416 6301 6203 98 6213
60 6213 6213 6164 49 0
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REPAYMENT OF NEW TERM LOAN FOR REVIVAL

Repayment Payment
Beginning Scheduled towards towards Ending
Instl.No Balance Payment Principal Interest Balance

1 295000 6196 3861 2335 291139

2 291139 6196 3891 2305 287248
3 287248 6196 3922 2274 283326
4 283326 6196 3953 2243 279373
5 279373 6196 3984 2212 275389
6 275389 6196 4016 2180 271373
7 271373 6196 4048 2148 267325
8 267325 6196 4080 2116 263245
9 263245 6196 4112 2084 259133
10 259133 6196 4145 2051 254988
11 254988 6196 4177 2019 250811
12 250811 6196 4210 1986 246601
13 246601 6196 4244 1952 242357
14 242357 6196 4277 1919 238080
15 238080 6196 4311 1885 233769
16 233769 6196 4345 1851 229424
17 229424 6196 4380 1816 225044
18 225044 6196 4414 1782 220630
19 220630 6196 4449 1747 216181
20 216181 6196 4485 1711 211696
21 211696 6196 4520 1676 207176
22 207176 6196 4556 1640 202620
23 202620 6196 4592 1604 198028
24 198028 6196 4628 1568 193400
25 193400 6196 4665 1531 188735
26 188735 6196 4702 1494 184033
27 184033 6196 4739 1457 179294
28 179294 6196 4777 1419 174517
29 174517 6196 4814 1382 169703
30 169703 6196 4853 1343 164850
31 164850 6196 4891 1305 159959
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32 159959 6196 4930 1266 155029

33 155029 6196 4969 1227 150060
34 150060 6196 5008 1188 145052
35 145052 6196 5048 1148 140004
36 140004 6196 5088 1108 134916
37 134916 6196 5128 1068 129788
38 129788 6196 5169 1027 124619
39 124619 6196 5209 987 119410
40 119410 6196 5251 945 114159
41 114159 6196 5292 904 108867
42 108867 6196 5334 862 103533
43 103533 6196 5376 820 98157
44 98157 6196 5419 777 92738
45 92738 6196 5462 734 87276
46 87276 6196 5505 691 81771
47 81771 6196 5549 647 76222
48 76222 6196 5593 603 70629
49 70629 6196 5637 559 64992
50 64992 6196 5681 515 59311
51 59311 6196 5726 470 53585
52 53585 6196 5772 424 47813
53 47813 6196 5817 379 41996
54 41996 6196 5864 332 36132
55 36132 6196 5910 286 30222
56 30222 6196 5957 239 24265
57 24265 6196 6004 192 18261
58 18261 6196 6051 145 12210
59 12210 6196 6099 97 6111
60 6111 6111 6063 48 0
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Details of Rescheduled Working Capital Cash Credit & Interest

Rs..
YEAR PRINCIPAL INTEREST BALANCE

I 550000 52250 550000

II 550000 52250 550000

III 550000 52250 550000

IV 550000 52250 550000

V 550000 52250 550000

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Total Cost of Production & Profitability Analysis

(Rs)
PARTICULARS I II III IV V
Installed Capacity 7500000 7500000 7500000 7500000 7500000
No of Working Days 300 300 300 300 300
No of Shifts 1 1 1 1 1
Capacity Utilisation 60% 65% 70% 75% 80%
A Cost of Manufacturing
1. Raw Materials Cost 2880000 3120000 3360000 3600000 3840000
2. Labour Cost 792000 858000 924000 990000 1056000
3. Other Manufacturing Exp 72000 78000 84000 90000 96000
TOTAL 3744000 4056000 4368000 4680000 4992000
B Administrative & Selling Exp
1. Salaries 90000 94000 98000 102000 105000
2. Other Administrative Exp 48000 52500 59000 67000 70000
3. Selling Exp 45000 48750 52500 56250 60000
TOTAL 183000 195250 209500 225250 235000
C Non Cash Expenses
1. Depreciation 116315 104683 94215 84794 76314
D Financial Expense
1. Interest on New Term Loan 25953 21151 15868 10065 3686
Interest on Existing Term Loan 26393 21507 16138 10236 3747
2. Interest on Working Capital CC 52250 52250 52250 52250 52250
TOTAL 104596 94908 84256 72551 59683
E Total cost of production 4147911 4450841 4755971 5062595 5362997
F Total Production 4500000 4875000 5250000 5625000 6000000
G Wastage and Sales Return @1% 45000 48750 52500 56250 60000
H Net Sales 4455000 4826250 5197500 5568750 5940000
I Operating Profit 307089 375409 441529 506155 577003
J Provision for Tax 17127 37623 57459 76847 98101
K Net Profit 289962 337786 384070 429308 478902
L Depreciation added Back 116315 104683 94215 84794 76314
M Net Cash Accruals 406277 442469 478285 514102 555216
N Repayment of Term Loan 97618 107306 117958 129663 142455
O Total Repayment 97618 107306 117958 129663 142455
P Return on Sales 6.44% 6.93% 7.32% 7.63% 7.98%
Q Return on Investment 13.89% 16.18% 18.39% 20.56% 22.93%
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Computation of DSCR

(Rs)

PARTICULARS I II III IV V

Net Profit After Tax 289962 337786 384070 429308 478902

Interest on Term Loans 52346 42658 32006 20301 7433

Depreciation 116315 104683 94215 84794 76314

TOTAL A 458623 485127 510291 534403 562649

Repayment of Term Loans 97618 107306 117958 129663 142455

Interest on Term Loans 52346 42658 32006 20301 7433

TOTAL B 149964 149964 149964 149964 149888

DSCR A/B 3.06 3.23 3.40 3.56 3.75

DSCR Average 3.40

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Break Even Analysis Based On The Second Year Of Operation After Revival

(Rs )
A Sales Revenue 4875000.00

B Variable Cost
1. Raw Materials Cost 3120000.00
2. 80 %Labour Cost 686400.00
3. Other Manufacturing Exp 78000.00
4. 50 % Other Administrative Exp 26250.00
5. Interest on Working Capital CC 52250.00
6. Selling Expenses 48750.00
4011650.00 4011650.00

C Contribution A-B 863350.00

D Fixed Over Heads

1. Salaries 94000.00
2. Interest on Term Loan 42658.00
3.50% of Administrative Exp 26250.00
4. 20 % Labour Cost 171600.00
334508.00 334508.00

E Non Cash Exp

1. Depreciation 1,04,683.00 1,04,683.00

439191.00

F Break- Even Point 4,39,191.00 X 100

50.87 %
863350.00
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Projected Cash Flow Statement

(Rs )
PARTICULARS I II III IV V

A. Source of Funds

1. Increase in Share Capital and Grant 497350

2. Increase in Term Loan 295000

3. Increase in Working Capital C C 400000

4. Netprofit before Tax with Interest added Back 411685 470317 525785 578706 636686

5. Depreciation 116315 104683 94215 84794 76314

TOTAL 1720350 575000 620000 663500 713000

B. Disposition of Funds

1. Increase in Fixed Assets 392350

2. Increase in Current Assets

a. Stock / Debtors 1000000 150000 150000 150000 150000

3. Repayment of Term Loan 97618 107306 117958 129663 142455

4. Interest on Borrowings 104596 94908 84256 72551 59683

5.Drawings 100000 175000 200000 200000 225000

6. Income Tax 17127 37623 57459 76847 98101

TOTAL 1711691 564837 609673 629061 675239

C. Cash Surplus 8659 10163 10327 34439 37761

D. Cumulative Cash Surplus 8659 18822 29149 63588 101349

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PROJECTED TRADING PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED
AMOUNT Rs. AMOUNT Rs.
PARTICULARS 1st Year 2nd Year 3rd Year 4th Year 5th Year PARTICULARS 1st Year 2nd Year 3rd Year 4th Year 5th Year

TO Opening Stock 0 1030000 1185000 1340000 1495000 BY Sales 4500000 4875000 5250000 5625000 6000000
" Purchases 3910000 3279500 3525700 3773000 4016000 " Less Sales Return 45000 48750 52500 56250 60000
" Labour Charges 792000 858000 924000 990000 1056000 Net Sales 4455000 4826250 5197500 5568750 5940000
" Electricity Charges 30000 31500 33075 34800 36540 Closing Stock 1030000 1185000 1340000 1495000 1650000
Repairs & Disinfection 6000 6300 6600 6930 7200
Carriage on Purchase 24000 25200 26490 27815 29000
" Other Misc Direct Expenses 12000 12600 13230 13900 14300
" Gross Profit c/d 711000 768150 823405 877305 935960
5485000 6011250 6537500 7063750 7590000 5485000 6011250 6537500 7063750 7590000
TO Salary & Allowances 90000 94000 98000 102000 105000 BY Gross Profit B/d 711000 768150 823405 877305 935960
" Office Expense 6000 6300 6615 6950 7100
" Telephone Charges 3000 3150 3300 3465 3600
" Packing & Stationery 3000 3150 3300 3465 3640
" Travelling Expense 36000 37800 39690 41675 43620
Interest & Bank Charges 104596 94908 84256 72551 59683
Provision for Tax 17127 37623 57459 76847 98101
Promotional Expenses 45000 48750 52500 56250 60000
" Depreciation 116315 104683 94215 84794 76314
" Net Profit 289962 337786 384070 429308 478902
711000 768150 823405 877305 935960 711000 768150 823405 877305 935960
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PROJECTED BALANCE SHEET

LIABILITIES ASSETS
AMOUNT Rs. AMOUNT
1st year 2nd year 3rd year 4th year 5th year 1st year 2nd year 3rd year 4th year 5th year
CAPITAL ACCOUNT FIXED ASSETS
Land 125000 125000 125000 125000 125000
Proprietor 943148 1133110 1295896 1479966 1709274 BUILDING 563148 506833 456150 410535 369481
Add Net Profit 289962 337786 384070 429308 478902 Less Depriciation 56315 50683 45615 41054 36948
1233110 1470896 1679966 1909274 2188176 506833 456150 410535 369481 332533
Less Drawings 100000 175000 200000 200000 225000 MACHINERY 600000 540000 486000 437400 393660
1133110 1295896 1479966 1709274 1963176 Less Depriciation 60000 54000 48600 43740 39366
540000 486000 437400 393660 354294
CURRENT
SECURED LOANS
ASSETS
Closing Stock/
Term Loan 497382 390076 272118 142455 0 1030000 1185000 1340000 1495000 1650000
Debtors
Working Capital CC 550000 550000 550000 550000 550000
Cash at
Sundry Creditors 30000 35000 40000 45000 50000 8659 18822 29149 63588 101349
Bank/Hand
2210492 2270972 2342084 2446729 2563176 2210492 2270972 2342084 2446729 2563176
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CURRENT RATIO
I II III IV V
CURRENT ASSETS
Cash 8659 18822 29149 63588 101349
Stock 1030000 1185000 1340000 1495000 1650000

Total 1038659 1203822 1369149 1558588 1751349

CURRENT LIABILITIES
Working Capital CC 550000 550000 550000 550000 550000
Term Loan Repayment of Current Year 97618 107306 117958 129663 142455
Sundry Creditors 30000 35000 40000 45000 50000

Total 677618 692306 707958 724663 742455

Current Ratio 1.53 1.74 1.93 2.15 2.36

The scheme technically feasible and economically viable

JYOTHISH KUMAR V.
PROPRIETOR