PROJECT REPORT ON MANUFACTURING OF EBBROIDERY SAREE

PROJECT COST
The Cost of the Project is estimated at Rs. 79.78 Lacs as shown in Table below:
REQUIREMENT OF FUNDS

Rs. In '00000

Plant & Machinery Electrical

MEANS OF FINANCE

Rs. In '00000

66.16 Promoter's Contribution

Equipments Misc. Fixed

2.00 Term Loan

Assets

4.00

others

2.00

Prel. & Preoperative Working

1.00

Capital Margin
TOTAL

29.78
50.00

4.61
79.78

79.78

ASSESSMENT OF PLANT CAPACITY

For assessment of Plant Capacity, the following assumptions have been made
(a) No. of Shifts per day

(b) No. of Hours per Shift

(c)

No. of Days per Year

300

PRODUCTION TARGETS
Capacity utilization & production targets will be as given
below:
Sl. Item
No.

A
1
2
3

1st Year

2nd Year 3rd Year 4th Year &

Onwards

Production of Embroidery Sarees

Plant Capacity (in Sarees / Annum)
Capacity Utilisation
Annual Production in Sarees

36000

36000

36000

36000

60%
21600

70%
25200

80%
28800

90%
32400

COST OF PROJECT
Rs. In Lacs
PROJECT COST
Land & Building (Rented)
Plant & Machinery

--66.16

Electrical Equipments

2.00

Misc. Fixed Assets

4.00

Others

2.00

Preliminary & Pre-operative Expenses

1.00

TOTAL FIXED ASSETS

Margin for Working Capital

75.16
4.61

PROJECT COST

79.78

Working Capital less Margin (Bank Borrowing)

13.84

TOTAL CAPITAL OUTLAY

93.62

DETAILS OF PLANT & MACHINERY

SI. No.

EQUIPMENT DESCRIPI ION

QTY

Unit Price

1
2
3

Computerized Embroidery Machine compete set

Computer set
Air Conditioner

8
2
18

7.31
0.32
0.25

TOTAL

Amount
58.48
0.64
4.50

VAT
4%

TOTAL COST
2.34
0.03
0.18

60.82
0.67
4.68

66.16

ESTIMATION OF PLANT CAPACITY

Plant Capacity

6 Nos/Hour

No. of working hours per Day

24 Hour

No. of Operating Hours per Day

20 Hours

Set- u p Time per Day

4 Hours

Total Production per Day (NOS)

120

No. of Operating Days per Annum

300

Production Per Annum (NOS)

36000

ESTIMATION OF PRODUCTION TARGET

SI. No.
Item
1st Year

2nd Year

3rd Year 4th Year &

Onwards

36000.00

36000.00

36000.00

36000.00

60%

70%

80%

90%

21600.00

25200.00

28800.00

32400.00

A
1

EMBROIDERISED SAREE
Plant Capacity (in NOS / Annum)

Capacity Utilisation

Annual Production in Nos

ESTIMATION OF TOTAL RAW MATERIAL REQUIREMENT & COST AT PLANT CAPACITY

SI. No.
1
2
3

Item
Plain Saree
Plain Saree
Threads
Total

Total Annual
Production
MT
9,000.00
27,000.00
300000 Bobbins
36,000.00

Annual
Cost/ MT
Requirement
MT
9,000.00
500.00
27,000.00 Supplied by Party
300,000.00
12.00
336,000.00

Annual Cost
(Rs in Lacs)
45.00
_
36.00
81.00

OVERALL DEPLOYMENT OF MANPOWER & COST

Sl. No.

Item

No. of
Heads

Cost/Head/
Annum in Lacs

Rs. in Lacs

FACTORY & OFFICE

1
2

Manager
Supervisor

1
2

1.80
0.96

1 80
1 92

Accountant

1.20

1.20

Clerk

0.60

0.60

Peon

0.36

0.36

Head Operator

0.96

0.96

Designer

1.80

1.80

Operator

16

0.72

11 52

Helper

16

0.42

6.72

10

Unskilled Worker

0.42

1 68

11

Driver

0.60

060

12

Deliveryman

0.48

096

13

Storekeeper

0.60

0.60

Total

48

30.72

Add: 20% Benefits

6 14

Grand Total

36 86

COST ESTIMATES FOR POWER & FUEL

ESTIMATION OF ANNUAL POWER CONSUMPTION AT PLANT CAPACITY

Sl No
Item
1
Production per Day at Plant Capacity (NO/ Day)
2
Unit Consumption per NO
Unit Consumption per Day
3
Number of Days Operation per Annum
4
Annual Consumption at Plant Capacity (in Lac
5
Units)
Total Connected Load

120
8
960
300
2.88

15 KVA

Power Tariff *:
5 Rs /K W H r

SI. No. Item

1st Year 2nd Year 3rd Year 5thYear 6thYear
1
Capacity Utilisation
60% 70%
80%
90%
90%
2
Annual Power Consumption
1.73 2.02
2.30
2.59
2.59
at Capacity Utilisation (in
Lacs Kw - hr)
3
Unit Charge (Rs / Kw - hr)
5.00 5.00
5.00
5.00
5.00
4
Annual Energy Charge (Rs
8.64 10.08
11.52
12.96
12.96
in Lacs)
5
Maximum Demand
15 15
15
15
15
6
Demand Charge Rs. 50 /KV
0.09 0.09
0.09
0.09
0.09
A/Month
7
Total Annual Charges
8.73 10.17
11.61
13.05
13.05

COST OF PRODUCTION AND PROFITABILITY

For the Year ended March 31
1st Year
Installed Capacity (MT)
36000
Production: (MT)
21600
Capacity Utilisation (%)
60%
Sales Realization
13175
Raw Material Consumption
48.60
Consumables
3.60
Wages & Salary
36.86
Power
8.73
Miscellaneous manufacturing Expenses
5.42
Depreciation
526
Sub-Total
108.48
Add: Opening Stock-in-Process
Sub-Total
108.48
Less: dosing Stock-in-process
126
Total Cost of Production
106.22
Add: Opening Stock-of-Finished Goods
10622
Less: Closing- Stock-of-Finished Goods
181
Cost of Sales
103.40
Selling & Administrative Expenses
1129
Operating Profit before Interest
17.06
Interest on Term Loan
6.00
Interest on Working Capital Loan
1.66
Financial Expenses
7.66
Operating Profit after Interest
9.40
Preliminary Expenses - W/O
020
Profit before Tax
9.20
Provision for Taxation
1.15
Profit after Tax
8.05
Net Cash Accruals
13.31
OPM(%)
1185%
NPM (%)
6.06%

2nd Year
36000
25200
70%
157.13
56.70
420
38.71
10.17
5.69
526
120.73
126
12199
152
120.47
181
12329
328
120.01
1229
24.83
5.25
1.94
7.19
17.64
0.20
17.44
4.09
13.34
18.60
15.80%
8.49%

3rd Year
36000
28800
80%
179.63
64.80
4.80
40.64
11.61
5.97
5.26
133.09
152
135.60
177
13183
328
136.11
3.75
13136
1129
34.97
4.05
221
6.26
28.71
020
2851
7.82
20.69
25.95
19.47%
11.52%

4thYear
36000
32400
90%
20113
7190
5.40
4167
13.05
627
526
14556
177
148.33
3.03
145.30
3.75
149.05
422
144.83
1129
45.01
185
148
5.33
39.67
0.20
39.47
11.45
28.02
33.29
2127%
13.86%

5thYear
36000
32400
90%
20150
7190
5.40
4167
13.05
659
526
145.87
3.03
148.91
3.03
145.87
422
150.09
422
145-87
1229
4434
1.65
148
4.13
4021
0.20
40.01
11.90
28.11
33.37
21.90%
13.88%

Rs. In Lacs
6thYear
36000
32400
90%
20250
7190
5.40
4167
13.05
6.92
5.26
14620
3.03
14924
3.03
14620
422
150.42
422
14620
1229
44.01
0.45
148
193
41.08
0.00
41.08
1147
28.61
33.87
21.73%
14.13%

7thYear
36000
32400
90%
20250
7190
5.40
4167
13.05
726
526
146.55
3.03
14958
3.03
14655
422
15077
422
14655
1229
43.66
0.00
148
148
41.18
0.00
41.18
3.47
37.72
42.98
21.56%
18.62%

CALCULATION OF PROJECTED SALES

Rs. In Lacs
For the Year ended March 31
Installed Capacity (NOS)

1st Year
36,000

2nd Year
36,000

3rd Year
36,000

4thYear
36,000

5thYear
36,000

6thYear
36,000

7thYear
36,000

60%

70%

80%

90%

90%

90%

90%

5,400 54

6,300 63

7,200 72

8,100 81

8,100 81

8,100 81

8,100 81

225
5,175
1,000
51.75

225
263
6263
1,000
6163

263
300
7,163
1,000
71.63

300
338
8,063
1,000
80.63

338
338
8,100
1,000
81.00

338
338
8,100
1,000
81.00

338
338
8,100
1,000
81.00

JOB WORK (NOS)

Jobwork Rate Per No
Jobwork Earning Value
TOTAL

16,200
500
81.00
132.75

18,900
500
94.50
157.13

21,600
500
108.00
179.63

24,300
500
121.50
202.13

24,300
500
121.50
20150

24,300
500
12150
20150

24,300
500
121.50
20150

Total Value of Production

135.00

157.50

180.00

202.50

202.50

202.50

202.50

Capacity Utilisation (%)

Production (NOS) Production - (Rs)
Opening Stock
Closing Stock of WIP & Finish
Sale- (NOS)
Sales Price-(Rs)
Sales Value of

BREAK - EVEN ANALYSIS

ANNEXURE - 21
Rs. In Lacs

For the Year ended March 31

Capacity Utilisation
Production (MT)
Value of Production
Less: Variable Costs:
Raw Material Consumption
Consumables
Wages& Salary (60 % Variable)
Power & Fuel Consumption
Interest on Working Capital
Administrative & Selling exp (60% variable)
Contribution
Less: Fixed Costs:
Interest on Term Loan
Depreciation
Wages & Salary (40 % Fixed )
Administrative & Selling exp (40% fixed)
Misc. Expenses
Profit
Contribution Per Unit
Break Even Point
Cash BEP
Average Break Even Point

1st Year
60%
5400
135.00

2nd Year
70%
6300
157.50

3rd Year
80%
7200
180.00

4thYear
90%
8100
202.50

5thYcar
90%
8100
202.50

6thYear
90%
8100
202.50

7thYear
90%
8100
202.50

48.60
3.60
22.12
8.73
1.66
7.37
42.92

56.70
4.20
23.22
10.17
1.94
6.14
55.12

64.80
4.80
24.39
11.61
221
6.14
66.05

7190
5.40
25.60
13.05
Z48
6.14
76.92

7190
5.40
25.60
13.05
2.48
6.14
76.92

7190
5.40
25.60
13.05
248
6.14
76.92

7190
5.40
25.60
13.05
2.48
6.14
76.92

6.00
5.26
14.75
4.92
5.42
36.34
6.5S
0.0079
84.68%
7142%

5.25
5.26
15.48
6.14
5.69
37.83
17.29
0.0087
68.63%
59.09%

4.05
5.26
16.26
6.14
5.97
37.69
2836
0.0092
57.06%
49.09%

2.85
5.26
17.07
6.14
6.27
37.60
3932
0.0095
48.88%
4104%

1.65
5.26
17.07
6.14
6.59
36.71
40.21
0.0095
47.73%
40.89%

0.45
5.26
17.07
6.14
6.92
35.84
41.08
0.0095
46.60%
39.76%

0.00
5.26
17.07
6.14
7.26
35.74
41.18
0.0095
46.46%
39.62%
57.15%

PAY BACK PERIOD

YEAR
1
2
3
4
5
6
7

Rs. in Lacs
CASH GENERATION
NET PROFIT
8.05
13.34
20.69
28.02
28.11
28.61
37.72
Pay Back Period
=
or

DEPRECIATION
5.26
5.26
5.26
5.26
5.26
5.26
5.26
Fixed Investment

For the Year

1331
18.60
25.95
33.29
33.37
33.87
42.98

3+
3.5 Years

Cumulative
13.31
31.91
57.87
91.15
124.52
158.39
201.37
75.16

6.235 months

REQUIREMENT OF WORKING CAPITAL

Rs. in Lacs
Items No. of

Bank

Months Margin
Raw materials
Consumable Stores
Finished Goods
Work-in-process

Bank Fin.

Margin

Amount Bank Fin.

Year 3

Year 4

Margin

Amount Bank Fin. Margin Amount Bank Fin.

Margin

25%

2.03

1.52

0.51

136

1.77

0.59

270

203

0.68

3.04

228

0.76

25%

030

0.23

0.08

035

0.26

0.09

0.40

030

0.10

0.45

034

0.11

0.25

25%

281

2.11

0.70

3.28

246

0.82

3.75

281

0.94

4.22

3.16

1.05

0.25

25%

2.26

1.69

0.56

2.52

1.89

0.63

2.77

108

0.69

3.03

127

0.76

7.40

5.55

1.85

851

6.38

113

9.62

7.22

141

10,74

8.05

168

11.06

8.30

177

13.09

9.82

3.27

14.97

11.23

3.74

16.84

1163

4.21

18.46

13.84

4.61

21.60

16.20

5.40

2459

18.44

6.15

27.58

20.69

6.90

25%

Total

Working Capital Int

Amount

Year 2

0.5

Total
Debtors (Trade)

Year 1

12.00%

1.66

1.94

121

2.48