Option‐2

Rolling Unit- Standalone with

RHF

Rolling Mills - Input tpa 38400

Rolling Mills-Output tpa 37440

RETURN ON EQUITY‐ Post Tax 33%

RETURN ON INVESTMENT‐ Post Tax 19%

IRR % 11%

Pay Back period yrs 4.32

Capital Cost 23

Land & Land Development Rs.Cr. 7.5

Factory Shed Rs.Cr. 1.0

Electrification Rs.Cr. 1.5

Errection Rs.Cr. 0.43

Contingencies Rs.Cr. 0.43

Pre‐operating Exp Rs.Cr. 0.1

WCM Rs.Cr. 5.1

Sub total 16

Main Equipment Cost 7

Rolling Mill Rs.Cr. 6Re-Heating Furnace Rs.Cr. 1

Capital Cost Rs. Cr. 23Debt to Equity ratio Ratio 2:1Debt-SFC Rs. Cr. 15Equity portion Rs. Cr. 8

Working Capital req Rs Cr. 17Borrowing from banks Rs. Cr. 12Interest on Working Capital Rs. Cr. 1.2

Assumptions

Debt 2Equity 1Cost of debt 12%Income Tax 33.60%Cost of Power 6.00 Rs/UnitManpower Option 2Permanent manpower-Rolling Mill

Executives 7NonExecutives 6Sub total 13

Contract Labour

Item Unit

Contract LabourSkilled 4Un-Skilled 8

Total 25

Item Unit

Qty. Rs/Unit Rs.Cr.

Rolling Mill‐ O/p tpa 37440

Billet - Purchased from Market tpa 38400 22600 86.78

Power -110 kwh/t kwh/t 110 6.00 2.53

Fuel - Coal Rs./t Rs 600/t 2.30

Water KL/day 50 20 0.04

Manpower-Labor & Wages Nos. 25 600000 1.50

Repair & Maintenance (R&M)-2.5% on CAPEX Rs.Cr 7Cr x 2.5% 45.4 0.17

Other Manufacturing expenses Rs/t Rs 200/t 0.94

Consumables (lubr, rolls, roll pass, motors spares) Rs/t Rs 200/t 0.74

Burning Loss- 2.5% =960, 60% is NR Rs/t 38400x2.5%=960tx22600*0.6 1.30

Coversion cost- Utilities Rs. / t 2542

Interest on WC Rs. Cr. 12 12% 1.13

Depreciation Rs.Cr. 1.0

Interest on Debt Rs.Cr. 15 12% 1.84

TOTAL COST Rs.Cr. 100

Cost of Production Rs/ ton Rs. /t 26782

Coversion cost- Billet to Angle Rs. /t 4182

REVENUE‐Angles Rs.Cr. 37440 27600 103Revenue-Others-Scrap sale= 960, 40% is Recoverable Rs Cr Recovable=960tx20000x

0.420000 0.77

Total Revenue Rs Cr 104

Surplus Before Tax Rs. Cr. 3.83

T R C %

Option‐2 ‐ Rolling Mill with RHF

Tax Rs. Cr. 33.60% 1.29

Post tax Margins Rs. Cr. 2.54

RETURN ON EQUITY ‐ Post Tax 8 33%

RETURN ON INVESTMENT(ROI)‐Post Tax 23 19%