MODEL PROJECT REPORT FOR WOVEN RMG UNIT WITH A
CAPACITY OF 100 STITCHING MACHINES ON OWN PRODUCTION,
WITHOUT PROCESSING
The Project details consists of the project cost estimates for land, building, plant
& machinery, raw material requirement, working capital requirement, means of finance,
power cost, maintenance cost, insurance, salaries & wages, depreciation, expenditure
statement, profit statement, break-even analysis, Repayment schedule, etc. Each of the
Estimates are furnished below in details.
1. Project Cost Estimates
Rupees in lakhs
1.1 Land measuring 5000 Sq.ft at the
rate of 600/sq. ft
30.00
1.2 Building (8,000 sq.ft) at the rate of
Rs.500/sq.ft construction cost (Ground & 1st floor)
40.00
54.54
1.3 Plant & machinery (imported)
(a) Stitching machines and other machines
(total 120 machines) including import
duty & others taxes (as detailed in
Annexure-I)
1.4 Plant and Machinery (Indigenous)
(a) Fire fighting Equipment
10 Nos ABC type, Minimax make, 5 Kg capacity
Rs.3700 each
(b) Weighing Equipments
Avery Make 3 weighing machines of capacity
120 Kgs, 30 Kgs, & 6 Kgs (Rs.34,000/- 13,000/-,
11150/- respectively)
(c) Material Handling : 10 Nos Trollys, 100 bins and
100 No. storage bins (Rs.1,000/- each, Rs. 100/each, Rs.100/- each respectively)
(d) Ramsons Boiler (for steam Ironing) 12 Kw/hr 2 Nos
(Rs. 55,400/- each
(e) Steam irons (8 Nos) with tables (8 Nos)
(Rs.1,200/- each & Rs.5,000/- each respectively)
Total
: 0.37
: 0.58
: 0.30
: 1.11
: 0.50
:
2.86
Rupees in Lakhs
1.5 Miscellaneous fixed assets Indigenous
(a) Diesel generator krilosker make
1 set 125 KVA, Rs.14 lakhs
(b) Tables (7 Nos Rs.5000 each)
(c) Office equipments/furniture/computer
(d) Deposite to state electricity board for
LT connection of 149 HP
Total
: 14.00
: 0.35
: 3.00
: 2.50
:
19.85
1.6 Total cost of Plant and Machinery
(1.3+1.4+1.5)
77.25
1.7 Preliminary & Pre-operative expenses
(5% of 1.6)
3.86
1.8 Working Capital Margin
(25% of Rs.181.99 lakhs)
45.50
1.9 Total Cost
196.61
1.10 Contingency
(5 % of PC- 5% of 196.61 lakhs)
9.83
1.11 Total cost of the project
(1.1 to 1.10)
206.44
2. Raw Material requirement for manufacture of Cotton Shirts & Cotton
Bottoms:
No. of machines
producing the items
Production/day/machine
Production/day
Production per annum
Raw material
requirement/piece
Cost of Raw
material/mtr
Shirts
60
Bottoms
40
Total
100
8 Nos
480
1,49,760 pcs
2.2 mts
10 Nos
400
1,24,800 pcs
1.3 mts
18 Nos
880
2,74,560
-
Rs.70
Rs.140
No. of hours working per day
No. of days working per month
: 8 hours
: 26 days
Rupees in Lakhs
Cost of raw material of shirts/annum
149760 X 2.2 X 70
Buttons/collars/cuffs/stitching thread @ Rs.15/shirt
Cost of raw material for bottoms/annum
124800 X 1.3 X 140
Zips/Buttons/Hooks/Stitching thread @ Rs.25/bottom
Raw material requirement/annum
3. Sale Value
Sale value of Shirt
Sale value of Bottom
Total Sale Value/annum for shirts
200 X 149760
Total Sale Value/annum for Bottoms
340 X 124800
Total
: 230.63
: 22.46
: 227.14
: 31.20
:
511.43
: Rs.200
: Rs.335
Rs.299.52
: Rs.418.08
:
717.60
181.99
:
:
45.50
136.49
4. Working capital requirement
(i) Cost of Raw material for 45 days
(ii) Finished goods for 45 days
(iii) Cost of consumable stores for 30 days
(Rs.3/machine/day)
(iv) Cost of maintenance spares etc for 90 days
(Rs.10/machine/day)
(v) Cost of packing material for 30 days
(Rs.10/piece)
Total Cost
: Rs. 73.76
: Rs.104.40
: Rs. 0.11
:Rs.
1.08
: Rs. 2.64
Margin money on working capital 25%
Bank finance
5. Means of finance:
S.No
1
2
Description
Promoters contribution
Term loan
Total
Debt Equity ratio
Amount (Rs in lakhs)
68.81
137.63
206.44
: 2:1
Rupees in Lakhs
6. Salaries & Wages:
S.
No
I
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
II
16
17
18
19
20
21
22
23
24
25
26
27
28
Description
Rs.
Nos/
day
Gross
Salary/Wages
per month
Total/
annum
Office & production staff:
Production Manager
Accountant
Cutting master
Merchandise
Pattern master
Stores-in-charge
Assistant Merchandiser
Assistant Cutting master
Assistant Accountant
Production coordinator
Supervisor
Clerical Staff
Receptionist
Security persons
Peons
Total
Labour
1
1
1
1
1
1
1
1
1
1
2
4
1
2
2
21
20000
9000
14000
12000
10000
6000
5500
5500
5000
7000
6000
3500
4000
2000
2000
-
240000
108000
168000
144000
120000
72000
66000
66000
60000
84000
144000
168000
48000
48000
48000
1584000
Cutting section
14
2200
369600
4
1
2800
2200
134400
26400
100
10
8
2800
2400
2400
3360000
288000
230400
2
2
2
10
6
1
1
161
182
2400
2400
2800
2400
2400
3000
2800
-
57600
57600
67200
288000
172800
36000
33600
51,21,600
67,05,600
Cutters & helpers
Sample section
Tailors
Helpers
Production department
Tailors
Helpers
Line checkers
Finishing & packing Dept
Final checkers
Trimming helpers
Alteration Tailor
Ironing section
Packing helpers
Electrician
Mechanic
Total
GRAND TOTAL
Rupees in Lakhs
Statutory Contribution (Provident Fund @ 12% for all employees,
On basic salary, Contribution towards ESI @ 4.75 %of the basic
Salary for employees whose gross salary is less than Rs. 7500/- p.m). : Rs.6,51,683
Total : 73.57
7. Power Cost
S.
No
Item
Machinery used for
manufacture of
garment
Lighting for 8,000
sq.ft
2 Boilers for steam
ironing + Iron press
No. of
machines
KW/
machines
Total KW
Kw - Hours
100
stitching
machines +
20
additional
machines &
equipments
8,000 Sq.ft
0.33 KW/
machines
39.6
317
(8 Hrs)
10
2 boilers
10 Iron box
25
25
100
(10 hrs)
200(8 hrs)
74.6
617
Total
Total Connected load
: 80 KW
Power cost Rs.4.70/unit
at power factor 70%
utilization 95%
: 617 X 0.7 X 0.95
= 410.30 KWH
Power cost/annum
: 410X4.70X312
:
6.01
8. Maintenance stores/cost
Maintenance cost/machine/day
No. of machines
No. of working days/annum
No. of shifts / annum
Maintenance cost of machines/annum
Maintenance cost of other equipments (Building, Boiler,
Generator, AC, Computer etc other than machines)
Total
:
:
:
:
:
Rs.10
120
312
312
Rs.3.74 lakhs
: Rs.1.25 lakhs
:
4.99
Rupees in Lakhs
9. The interest rate for the term loan has been assumed as 11% and the Net
Interest rate will be 6% after taking into account TUFS interest subsidy of 5 %. The
entire project cost is eligible under TUFS since the cost of land/building is less than
50% of the Total Project Cost and all the machines are new machines. The rate of
interest for working capital has been assumed as 13.5%.
10. The Depreciation has been assumed at 10% under
straight line method.
Value of machines
:Rs.77.25
Depreciation 10%
11. Income/annum
Production/annum:
Shirts
Bottoms
Total
Selling price Rs/pc.
Shirts
Bottoms
7.73
717.60
14.48
27.46
21.52
0.56
: 1,49,760 pcs)
: 1,24,800 pcs)
------------------2,74,560 pcs
-------------------: Rs.100/pc
: Rs.335/pc
Income by sales
12. The value loss is assumed as 2% of the sale value
13. Packing charges
Packing charges at the rate of Rs.10/- per
piece for 274560 pcs
14. The selling expenses has been assumed as 3% of sale value
Selling Expenses (3%)
15. The cost of Insurance of garmenting m/c and other
machines has been assumed at 0.75% of the cost
Insurance for machinery (0.75%)
: Rs.77.25 X 0.75%
Rupees in Lakhs
16. EXPENDITURE STATEMENT
1
10
R/M
Year
511.43
511.43
511.43
521.66
521.66
521.66
532.09
532.09
532.09
542.73
Salary &
wages
73.57
75.78
78.05
80.39
82.80
85.28
87.84
90.48
91.19
95.99
Power cost
Maintenance
6.01
4.99
6.01
4.99
6.01
4.99
6.01
4.99
6.01
4.99
6.01
5.14
6.01
5.14
6.01
5.14
6.01
5.14
6.01
5.14
Int.term loan
8.26
8.26
8.26
7.23
6.19
5.16
4.13
3.10
2.07
1.03
Depreciation
7.73
7.73
7.73
7.73
7.73
7.73
7.73
7.73
7.73
7.73
Int.wr/capital
Values loss
18.43
14.48
18.43
14.48
18.43
14.48
18.43
15.20
18.43
15.20
18.43
15.20
18.43
15.96
18.43
15.96
18.43
15.96
18.43
16.76
Packing
27.46
27.46
27.46
28.00
28.00
28.00
28.56
28.56
28.56
29.13
Selling Exp.
21.52
21.52
21.52
22.60
22.60
22.60
23.73
23.73
23.73
24.92
Insurance
0.56
694.44
0.56
696.65
0.56
698.92
0.56
712.8
0.56
714.17
0.56
715.77
0.56
730.18
0.56
731.79
0.56
731.47
0.56
748.43
increase
increase
increase
increase
increase
after every
every year
after every
after every
after every
3 years
Total
Assumptions:
i) Raw material/packing charges
ii) Wages
iii) Selling Expenses/value loss
iv) Maintenance
v) Selling Price
:
:
:
:
:
2%
3%
5%
3%
5%
3 years
5 years
3 years
17. PROFIT STATEMENT
1
10
Income
Year
717.60
717.60
717.60
753.48
753.48
753.48
791.15
791.15
791.15
830.71
Expenditure
694.44
696.65
698.92
712.8
714.17
715.77
730.18
731.79
731.47
748.43
Profit
23.16
20.95
18.68
40.68
39.31
37.71
60.97
59.36
59.68
82.28
Depreciation
7.73
7.73
7.73
7.73
7.73
7.73
7.73
7.73
7.73
7.73
Cash profit
30.89
28.68
26.41
48.41
47.04
45.44
68.70
67.09
67.41
90.01
Gross profit
Tax
Profit after
tax
23.16
8.10
20.95
7.33
18.68
6.53
40.68
14.23
39.31
13.75
37.71
13.19
60.97
21.33
59.36
20.77
59.68
20.88
82.28
28.79
15.58
14.14
12.67
27.0
26.11
25.07
40.21
39.17
38.08
54.10
Rupees in Lakhs
18. DEBT SERVICE COVERAGE RATIO (DSCR)
Year
10
Profit
30.89
28.68
26.41
48.41
47.04
45.44
68.70
67.09
67.41
90.01
Int on term
loan in lakhs
Installments
8.26
8.26
8.26
7.23
6.19
5.16
4.13
3.10
2.07
1.03
Nil
Nil
17.20
17.20
17.20
17.20
17.20
17.20
17.20
17.20
DSCR
4.73
4.47
1.36
2.27
2.27
2.26
3.41
3.45
3.60
4.99
Two years moratorium & 8 years term loan repayment under TUFS scheme
(Cash) profit + Interest paid
* DSCR = -----------------------------------------Installment paid + interest paid
Installment amount
Maximum DSCR
4.99
Minimum DSCR
1.36
Average DSCR
3.28
Term loan
-----------8
a+b
-----c+b
137.63
-------- = 17.20 lakhs
8
Rupees in Lakhs
19. Break Even Analysis:
Variable Cost
Rs. in lakhs
Raw material
Packing
Wages & Salaries 50%
Selling expenses
Int. on Working Capital
Value loss
Power cost
511.43
27.46
36.78
21.52
18.43
14.48
6.01
636.11
Total
Fixed cost
Rs. in lakhs
Wages & Salaries 50%
Repair & maintenance
Insurance
Depreciation
Interest on term loan
Income by sales
36.78
4.99
0.56
7.73
8.26
58.32
Rs. 717.60 lakhs
Sales Variable cost
Rs. 81.49 lakhs
Break-Even point
Fixed cost X 95
------------------Sales-Variable cost
Total
= 58.32 X 95
81.49
= 67.98 %
Cash Break-Even Point
Fixed cost- Depreciation X 95
---------------------------------Sales-Variable cost
= (58.32-7.73) X 95
81.49
= 58.97 %
Rupees in Lakhs
20. BANK LOAN REPAYMENT SCHEDULE
Interest @ 11% (net Interest = 6% Interest reimbursement under TUFS =5%)
Year
1
2
3
4
5
6
7
8
9
10
Opening
balance
137.63
137.63
137.63
120.43
103.23
86.03
68.82
51.63
34.42
17.20
Interest
Principal
payment
Nil
Nil
17.20
17.20
17.20
17.20
17.20
17.20
17.20
17.20
8.26
8.26
8.26
7.23
6.19
5.16
4.13
3.10
2.07
1.03
Total
Nil
Nil
25.46
24.43
23.39
22.36
21.33
20.30
19.27
18.23
Closing
Balance
137.63
137.63
120.43
103.23
86.03
68.82
51.63
34.42
17.20
0
Two years moratorium & 8 years term loan repayment under TUF scheme
21. EXPENDITURE & PROFIT PER PIECE
Expenditure
:
Selling Price
:
Profit
:
Depreciation
:
Cash profit
:
Profit/pc
Rs. 694.44 lakhs
Rs. 717.63 lakhs
Rs 23.19 lakhs
Rs. 7.73 lakhs
Rs. 30.92 lakhs
30.92 X 100000
--------------------- = Rs. 11.26 /pc
274560
22. INTERNAL RATE OF RETURN(IRR): Initial Investment = Cash flows
--------------1+ IRR
206.44 =
287.88
---------1 + IRR
IRR
23. Pay Back period
= 39 %
6 years 6 months
-----------
10
Rupees in Lakhs
PROJECT FOR 100 MACHINES
Annexure-I
1.3 Plant & Machinery (Imported)
S.
No
Name
No. of
Machines
1
2
Oshima Make End cutter
Oshima make Bandknife cutting
m/c
Juki make DDL 300 Model Single
Needle stitching m/c
Juki make DDL 8700-7 model
Electronic Single Needle stitching
m/c
Juki make DLM 5200 Model single
needle stitch and Trimmer m/c
Juki make LH 3128 Model Double
Needle Stitching m/c
Juki make LH 3168 Model Split
Needle bar Double Needle
Stitching machineries
Juki Make Overlock m/c
Juki Make Feed of Arm
Juki Made LK-1900 Model Bar
Tack m/c
Juki Make LBH-781 Button Hole
M/c
Juki Make MEB-2000 Button Hole
M/c
Juke Make LK 1903 Button
stitching m/c
Oshima Make Fusing m/c
Kansari Make special m/c
Oshime Make Cuff Turning m/c
Oshima Make Collar Turning m/c
2
1
Rate/
machine
in Dollars
750
3900
80
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Total
Rate in Rs.
with Import
Duty
42,066
1,89,464
Total cost of
machines in Rs.
330
16,032
12,82,528
10
800
38,864
3,88,640
955
46,394
1,85,578
1320
64,126
1,92,378
1850
89,874
2,69,622
4
2
2
850
2200
3025
41,294
1,06,877
1,69,666
1,65,176
2,13,754
3,39,332
2950
1,43,313
1,43,313
10500
5,10,096
5,10,096
4000
2,24,351
4,48,702
1
2
1
1
3000
2100
4000
5100
-
1,68,263
1,68,263
2,04,040
2,24,351
2,86,048
5295417
(or)
Rs.52.95
120
2,24,351
2,86,048
-
84,132
1,89,464
Note: Machines at S.No.2 to 9, 11, 12, 15 are having Import Duty of (Basic) 5.5% + 2% cess
on Import duty.
Machines at S.No.1,10,13,14,16 & 17 are having In-built Motor therefore Import Duty is (Basic)
5.5% +(CVD)16% + 2% cess on Import Duty.
Erection Charges 2%
=
1.06
Local Transport Expenses-1%
=
0.53
--------------Total Cost of Imported machines
Rs. 54.54 lakhs
11
