MINI TOOL ROOM

PRODUCT CODE 359960313

QUALITY AND STANDARDS Tool room facility/Machine shop is a

servicing industry to cater the tooling needs
such as jigs, fixture, press tools, die sets,
forming tools and moulds etc, to other
industrial units as per their products. Every
tool produced in the tool room requires
100% of inspection to adhere to the
drawing, design and specifications of the
user industry. Wherever necessary relevant
IS: Specifications are to be followed in
selecting the tool material and tolerances in
the production of components of the tooling
to be produces.

PRODUCTION CAPACITY
S.No. Item Qty. Rate Value (Rs.)
1. Sheet metal dies. 600 Nos. Rs. 20,000 1,20,00,000
2. Plastic injection moulding dies. 600 Nos. Rs. 12,000 72,00,000
3. Bakelite moulding dies. 600 Nos. Rs. 8,000 48,00,000
4. Job work L.S. L.S. 5,00,000
5. Sale of Scrape L.S. L.S. 1,00,000
Total 2,46,00,000

MONTH AND YEAR May, 2014

OF PREPARATION

PREPARED BY Sh. Kamal Singh

Deputy Director (Mechanical)

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1. INTRODUCTION
Tool room facility is a necessity for production of tooling in all disciplines of
engineering industry whether mechanical, electrical, and electronic or plastics, etc
with the rapid industrialization in our country. It has become imperative to produce
various tools on job work basis e.g.
i. Jigs & fixtures
ii. Press tools
iii. Forming tools
iv. Moulding dies
v. Forging dies

2. MARKET POTENTIAL
The tool room serves as a backbone to a number of SSI Units situated in any
area. The demand for a tool room depends directly on the growth of other units.
Wherever there is concentration of more than 100 SSI Units, a tool room of this size
will be viable. The decision to set up a tool room facility can be taken, keeping in
view an action plan of the area and growth of existing units.

3. BASIS AND PRESUMPTIONS

i. The project profile has been prepared on the basis of single shift of 8 hours a
day. 25 days in a month and at 75% efficiency.
ii. It is presumed that in the first year, the capacity utilization will be 70% and
followed by 85% in the next year and 100% in the subsequent years.
iii. The rates quoted in respect of salary and wages for skilled workers and others
are above the minimum rates in other states.
iv. Interest rate for fixed and working capital has been taken at 15% on an
average, whether by bankers and or financial corporation.
v. Margin money required is minimum 30% of the promoters.
vi. The rental value of the work has been taken at the rate of Rs. 100 per square
meter approx.
vii. After the initial gestation period of one a half year. It will require seven years
to pay back the loans

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4. IMPLEMENTATION SCHEDULE
i. Preparation of project report:
a) Inviting quotation 1 month
b) Preparation month
ii. Provisional registration month
iii. Financial arrangements 1 month
iv. Purchase of machinery 2 months
v. installation of machinery 2 months
vi. Installation of machinery 1 month
vii. Electrification 1 month
viii. Recruitment of manpower 1 month
Total time Taken 9 months

5. TECHNICAL ASPECTS
1. In the tool room various machine tools including EDM facilities have been
provided to carry out various machining operations e.g. hacksaw wing,
drilling, turning, shaping, milling, surface grinding, and cylindrical grinding
to produce different parts/components of a tool. However, heat treatment
facilities will be availed from outside as the same is not economical for this
size of tool room.
2. The quality of the tools produces will be 100% inspected conforming to
drawing and specification of the user industries, wherever possible is
Specifications for tolerances and standard parts will be used to meet the
requirements.
3. Production capacity in term of machine hours is available as the products
tooling cannot be specified except types as mentioned above in the
introduction.
4. Approximate motive power has been given against each machine to the
installed. The total horsepower comes to 50 H.P.
5. Rate of interest is taken @ 15% in the report.
6. Pollution control needs: The tool room workshop is equipped with machine
tools only for doing job works like machining of ferrous metals to make
different types of tooling and there will also be no discharge of effluents.
There will be no chance of pollution and hence no pollution control
equipment is required.
7. Energy conservation: The machine tools provided in the scheme are
individually motorized. The motive power of each motor is according to the
requirement of each for proper performance.

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6. FINANCIAL ASPECT
6.1. Fixed Capital
Building: Built up workshop shed, Covered area of 500 sq. mtrs. on Rent.

6.1.1. Machinery and Equipments

a) Production Unit:

1. Surfacing, sliding and screw cutting Precision 1 Nos. Rs. 10,00,000

lathe machine cap. 1500 mm. Bedx400 mm swing
x 40 mm, Bore motorized with 3 HP Motor &
Electrical complete with standard Accessories i.e.
face place, steady and with one 250 mm 4 jaw
chuck and One 200 mm true chuck (3 jaws) and
tool Holders etc of graded quality.
2. 24 stroke shaping machine with 3 HP Electric 1 No. Rs. 50,000
motor & electrical
3. Power hacksaw machine cutting capacity 7 dia 1 No. Rs. 20,000
with 1 HP motor and starter
4. Bench type capacity drill Machine with HP 1 No. Rs. 7,500
Motor and Starter
5. MTR Vertical Milling with 2 HP Motor & 1 No. Rs. 6,00,000
Accessories
6. Surface grinding machine 16x8 with 2 HP 2 No. Rs. 3,00,000
Motor & Starter
7. Cylindrical grinding machine Cap, 150x500mm, 2 No. Rs. 3,00,000
with internal Attachment with 2 HP main motor
HP internal grinding motor and HP spindle
driving motor and starter
8. Double ended bench type 10 dia wheel Grinder 1 No. Rs. 10,000
motorized with 1 HP motor & starter
9. EDM Spark Erosion Machine Table size 20 1 No. Rs. 5,00,000
cmx30cm with 7.5 HP Load
10 CNC milling Machine with all accessories 1 No. Rs. 25,00,000

Total Rs. 52,87,500

Installation & Electrification Charges @ 10 % Rs. 5,28,750

Total Rs. 58,16,250

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b) Testing Equipments:
1. Rockwell Hardness Tester 1 No. Rs. 50,000
2. Profile Projector 1 No. Rs. 3,00,000
Installation & Electrification Charges L.S. Rs. 35,000
Total Rs. 3,85,000

c) Measuring Instruments:
1. Surface plate 600x600 1 No. Rs. 50, 000
2. 12 Vernier height gauge 1 No. Rs. 12,000
3. Vernier Caliper 200 mm 1 No. Rs. 3000
4. Vernier caliper 300 mm 1 No. Rs. 4000
5. Micrometer 0.25 mm 1 No. Rs. 3000
6. Micrometer 0.50 mm 1 No. Rs. 3500
7. Inside Micrometer 0.20 1 Set Rs. 25,000
8. 41 pcs slip gauges set 1 Set Rs. 50,000
9. Combination set consisting of right angle bevel 1 Set Rs. 20,000
protector and center head and 12 scale
10. Dial vernier caliper 1 No. Rs. 7500
11. Misc. marking instruments and vices etc. L.S. Rs. 50,000
Total Rs. 2,28,000
Initial Purchase of non-recurring type cutting tools L.S. Rs. 3,00,000

Total cost of machinery & equipments Rs. 67,29,250

d) Office Equipments:
1. Computer with Design software 1 No. Rs. 1,50,000
2. Office table 2 Nos. Rs. 15,000
3. Chairs 5 Nos. Rs. 10,000
4. Almirah 2 Nos. Rs. 20,000
5. Working tables & stools 3 Nos. Rs. 10,000
6. Fixtures etc. L.S. Rs. 10,000
Total Rs. 2,15,000

Total cost of machinery, equipments and office equipments Rs. 69,44,250

Pre-operative expenses i.e. project cost and Non-refundable Rs. 1,50,000
deposits etc.
Total Rs. 70,94,250

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6.2. Working Capital (per month)

6.2.1. Building

Building (on rent) (Rs.)

Built up workshop shed, Covered area of 500 sq. mtrs.
50,000
@ Rs. 100 per sq. mtr.

6.2.2. Personnel

S. No. Designation Nos. Salary (Rs.) Total (Rs.)

1. Manager 01 20,000 20,000
2. Designer-Cum-Engineer 01 15,000 15,000
3. Accountant/Storekeeper 01 7500 7,500
4. Supervisor 02 12,000 24,000
5. Clerk-Cum-Typist 01 7,500 7,500
6. Skilled Workers 03 10,000 30,000
7. Semi-Skilled Worker 04 7,500 30,000
8. Die fitters 02 7,500 15,000
9. Helpers 03 6,000 18,000
10. Peon/Chowkidar 01 6,000 6,000
Total 1,73,000
Perquisites @ 15% of salary 26,000
Total 1,99,000

6.2.3. Raw Material

Die steels assorted size 5000 kg @ Rs. 200 per kg. Rs. 10,00,000
Mild sheets assorted size: 2500 kg @ Rs. 60 per kg. Rs. 1,50,000
Total Rs. 11,50,000

6.2.4. Utilities
Power 1500 KWH Units @ Rs. 5/- Rs. 7,500
Water L.S. Rs. 300
Total Rs. 7,800

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6.2.5. Other Contingent Expenses (per month)

1. Postage & Stationery Rs. 2000
2. Telephone Rs. 1000
3. Consumable store, Waste Cotton,
Lubricants, Cutting tools, grinding Wheels, etc. Rs. 20,000
4. Repairs & Maintenance Rs. 20,000
5. Transport Charges Rs. 10,000
6. Advertisement & Publicity Rs. 10,000
7. Taxes Rs. 3,000
8. Sales Expenses Rs. 5000
9. Misc. expenses including heat treatment
charges to outside units Rs. 25,000

Total Rs. 96,000

6.2.6. Total Recurring Expenditure (per month)

1. Rent Rs. 50,000
2. Personnel Rs. 1,99,000
3. Raw Material Rs. 11,50,000
4. Utilities Rs. 7,800
5. Other contingent Expenses Rs. 96,000
Total Rs. 15,02,800

Total Working Capital for 3 months Rs. 45,08,400

6.3. Total Capital Investment

Total Fixed Capital Rs. 70,94,250
Total Working Capital (for 3 months) Rs. 45,08,400
Total Rs. 1,16,02,650

Machinery Utilization
This project profile is for tool room facility (medium size). It is expected that
in 1st year 70%, 2nd year 85% and third year 100% machines will be utilized at 75%
efficiency. No provision has been made in respect of heat treatment facilities, which
are to be out sourced. This is necessary as the HT Equipment cannot be economically
viable for this size of tool room.

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7. FINANCIAL ANALYSIS
7.1. Cost of Production (per annum)
1. Total recurring cost Rs. 1,80,33,600
2. Depreciation of machinery & equipment including
Testing machines @ 10% Rs. 5,28,750
3. Depreciation on measuring & marking instruments
and cutting tools etc. @ 20% Rs. 1,82,600
4. Depreciation on office equipments @ 20% Rs. 43,000
5. Interest on total capital investment @ 15% Rs. 17,40,398
Total Rs. 2,05,28,348
Say Rs. 2,05,28,000

7.2. Turnover (per annum)

S. No. Item. Qty. Rate Value (Rs.)

1. Sheet metal dies. 600 Nos. Rs. 20,000 1,20,00,000
2. Plastic injection moulding dies. 600 Nos. Rs. 12,000 72,00,000
3. Bakelite moulding dies. 600 Nos. Rs. 8,000 48,00,000
4. Job work L.S. L.S. 5,00,000
5. Sale of Scrape L.S. L.S. 1,00,000
Total 2,46,00,000

7.3. Net Profit (per annum)

= Turnover cost of production
= Rs. 2,46,00,000 - 2,05,28,000
= Rs. 40,72,000

7.4. Net Profit Ratio

Net profit per year
= X 100
Turnover per year

40,72,000
= X 100
2,46,00,000

= 16.6 %

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7.5. Rate of Return

Net profit per year
= X 100
Total Capital Investment

40,72,000
= X 100
1,16,02,650

= 35.1 %

7.6. Break-even Point

Fixed Cost (Per Annum)
1. Total depreciation Rs. 7,54,350
2. Rent Rs. 6,00,000
3. Interest Rs. 17,40,398
4. 40% of salaries Rs. 9,55,200
5. 40% of other expenses Rs. 4,60,800
Total Rs. 45,10,748

B.E.P
Fixed Cost
= X 100
Fixed Cost + Net Profit

45,10,748
= X 100
45,10,748 + 40,72,000

= 52.6 %

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Address of Suppliers of Machines:

1. M/s H.M.T. Bangalore

2. M/s Addison & Co. Madras.
3. M/s Cooper Engg. Works, Chuchawad, Poon
4. M/s Perfect Machine Tools (P) ltd. Bell Building Sir P.M. Road Bombay
5. M/s Leading Engg. Co., 31, New Rohtak road, New Delhi
6. M/s Daulat Industries Corpn. Pvt. Ltd, Civil Lines, Ludhiana.
7. M/s. R.K. Machine Toos, Indl. Area-A, Ludhiana.
8. M/s Sagar Engg. Works, Indl. Area-B, Ludhiana
9. M/s Ashoka Bros., Panchkuian Road, New Delhi.
10. M/s Internation Machine Tools Corporation, 5, Park Street, Behind State
Bank of India, for, Bombay.

Address of Suppliers of Raw Materials:

1. M/s Radhi & sons, 82, Nagdevi Cross Lane, Bombay.

2. M/s Durga Mill Store, Miller Gnaj, Ludhiana
3. M/s Victor Steels Pvt. Ltd., Sirkiwalan Bazar, Delhi.
4. M/s B.K. Steel, Ludhiana
5. M/s. B.K. Steel, Ludhiana
6. M/s. New India Steel Engg. Co., Bank of India Building, 185, Sheikh
Memun Street, Bombay.
7. M/s Excel Steel Corporation, 162, Nagdevi Street, Bombay.

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