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 MEANS OF FINANCE Rs. In '00000

Plant & Machinery Electrical 66.16 Promoter's Contribution 29.78
Equipments Misc. Fixed 2.00 Term Loan 50.00
Assets 4.00
others 2.00
Prel. & Preoperative Working 1.00
Capital Margin 4.61
TOTAL 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 - 3

(b) No. of Hours per Shift - 8

(c) No. of Days per Year - 300

PRODUCTION TARGETS
Capacity utilization & production targets will be as given
below:

Sl. Item 1st Year 2nd Year 3rd Year 4th Year &
No. Onwards
A Production of Embroidery Sarees
1 Plant Capacity (in Sarees / Annum) 36000 36000 36000 36000
2 Capacity Utilisation 60% 70% 80% 90%
3 Annual Production in Sarees 21600 25200 28800 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 75.16
Margin for Working Capital 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 Amount VAT TOTAL COST
4%
1 Computerized Embroidery Machine compete set 8 7.31 58.48 2.34 60.82
2 Computer set 2 0.32 0.64 0.03 0.67
3 Air Conditioner 18 0.25 4.50 0.18 4.68

TOTAL 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
A EMBROIDERISED SAREE
1 Plant Capacity (in NOS / Annum) 36000.00 36000.00 36000.00 36000.00

2 Capacity Utilisation 60% 70% 80% 90%

3 Annual Production in Nos 21600.00 25200.00 28800.00 32400.00

 ESTIMATION OF TOTAL RAW MATERIAL REQUIREMENT & COST AT PLANT CAPACITY

Total Annual Annual Annual Cost

SI. No. Item Cost/ MT
Production Requirement (Rs in Lacs)
MT MT
1 Plain Saree 9,000.00 9,000.00 500.00 45.00
2 Plain Saree 27,000.00 27,000.00 Supplied by Party _
3 Threads 300000 Bobbins 300,000.00 12.00 36.00
Total 36,000.00 336,000.00 81.00
OVERALL DEPLOYMENT OF MANPOWER & COST

No. of Cost/Head/
Sl. No. Item Rs. in Lacs
Heads Annum in Lacs

FACTORY & OFFICE

1 Manager 1 1.80 1 80
2 Supervisor 2 0.96 1 92
3 Accountant 1 1.20 1.20
4 Clerk 1 0.60 0.60
5 Peon 1 0.36 0.36
6 Head Operator 1 0.96 0.96
7 Designer 1 1.80 1.80
8 Operator 16 0.72 11 52
9 Helper 16 0.42 6.72
10 Unskilled Worker 4 0.42 1 68
11 Driver 1 0.60 060
12 Deliveryman 2 0.48 096
13 Storekeeper 1 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) 120
2 Unit Consumption per NO 8
Unit Consumption per Day 960
3
Number of Days Operation per Annum 300
4
Annual Consumption at Plant Capacity (in Lac 2.88
5
Units)

Total Connected Load 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 Rs. In Lacs
For the Year ended March 31 1st Year 2nd Year 3rd Year 4thYear 5thYear 6thYear 7thYear
Installed Capacity (MT) 36000 36000 36000 36000 36000 36000 36000
Production: (MT) 21600 25200 28800 32400 32400 32400 32400
Capacity Utilisation (%) 60% 70% 80% 90% 90% 90% 90%
Sales Realization 13175 157.13 179.63 20113 20150 20250 20250
Raw Material Consumption 48.60 56.70 64.80 7190 7190 7190 7190
Consumables 3.60 420 4.80 5.40 5.40 5.40 5.40
Wages & Salary 36.86 38.71 40.64 4167 4167 4167 4167
Power 8.73 10.17 11.61 13.05 13.05 13.05 13.05
Miscellaneous manufacturing Expenses 5.42 5.69 5.97 627 659 6.92 726
Depreciation 526 526 5.26 526 526 5.26 526
Sub-Total 108.48 120.73 133.09 14556 145.87 14620 146.55
Add: Opening Stock-in-Process - 126 152 177 3.03 3.03 3.03
Sub-Total 108.48 12199 135.60 148.33 148.91 14924 14958
Less: dosing Stock-in-process 126 152 177 3.03 3.03 3.03 3.03
Total Cost of Production 106.22 120.47 13183 145.30 145.87 14620 14655
Add: Opening Stock-of-Finished Goods - 181 328 3.75 422 422 422
10622 12329 136.11 149.05 150.09 150.42 15077
Less: Closing- Stock-of-Finished Goods 181 328 3.75 422 422 422 422
Cost of Sales 103.40 120.01 13136 144.83 145-87 14620 14655
Selling & Administrative Expenses 1129 1229 1129 1129 1229 1229 1229
Operating Profit before Interest 17.06 24.83 34.97 45.01 4434 44.01 43.66
Interest on Term Loan 6.00 5.25 4.05 185 1.65 0.45 0.00
Interest on Working Capital Loan 1.66 1.94 221 148 148 148 148
Financial Expenses 7.66 7.19 6.26 5.33 4.13 193 148
Operating Profit after Interest 9.40 17.64 28.71 39.67 4021 41.08 41.18
Preliminary Expenses - W/O 020 0.20 020 0.20 0.20 0.00 0.00
Profit before Tax 9.20 17.44 2851 39.47 40.01 41.08 41.18
Provision for Taxation 1.15 4.09 7.82 11.45 11.90 1147 3.47
Profit after Tax 8.05 13.34 20.69 28.02 28.11 28.61 37.72
Net Cash Accruals 13.31 18.60 25.95 33.29 33.37 33.87 42.98
OPM(%) 1185% 15.80% 19.47% 2127% 21.90% 21.73% 21.56%
NPM (%) 6.06% 8.49% 11.52% 13.86% 13.88% 14.13% 18.62%
CALCULATION OF PROJECTED SALES
Rs. In Lacs

For the Year ended March 31 1st Year 2nd Year 3rd Year 4thYear 5thYear 6thYear 7thYear
Installed Capacity (NOS) 36,000 36,000 36,000 36,000 36,000 36,000 36,000

Capacity Utilisation (%) 60% 70% 80% 90% 90% 90% 90%

Production (NOS) Production - (Rs) 5,400 54 6,300 63 7,200 72 8,100 81 8,100 81 8,100 81 8,100 81

Opening Stock - 225 263 300 338 338 338

Closing Stock of WIP & Finish 225 263 300 338 338 338 338
Sale- (NOS) 5,175 6263 7,163 8,063 8,100 8,100 8,100
Sales Price-(Rs) 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Sales Value of 51.75 6163 71.63 80.63 81.00 81.00 81.00

JOB WORK (NOS) 16,200 18,900 21,600 24,300 24,300 24,300 24,300
Jobwork Rate Per No 500 500 500 500 500 500 500
Jobwork Earning Value 81.00 94.50 108.00 121.50 121.50 12150 121.50
TOTAL 132.75 157.13 179.63 202.13 20150 20150 20150

Total Value of Production 135.00 157.50 180.00 202.50 202.50 202.50 202.50
BREAK - EVEN ANALYSIS ANNEXURE - 21
Rs. In Lacs
For the Year ended March 31 1st Year 2nd Year 3rd Year 4thYear 5thYcar 6thYear 7thYear
Capacity Utilisation 60% 70% 80% 90% 90% 90% 90%
Production (MT) 5400 6300 7200 8100 8100 8100 8100
Value of Production 135.00 157.50 180.00 202.50 202.50 202.50 202.50
Less: Variable Costs:
Raw Material Consumption 48.60 56.70 64.80 7190 7190 7190 7190
Consumables 3.60 4.20 4.80 5.40 5.40 5.40 5.40
Wages& Salary (60 % Variable) 22.12 23.22 24.39 25.60 25.60 25.60 25.60
Power & Fuel Consumption 8.73 10.17 11.61 13.05 13.05 13.05 13.05
Interest on Working Capital 1.66 1.94 221 Z48 2.48 248 2.48
Administrative & Selling exp (60% variable) 7.37 6.14 6.14 6.14 6.14 6.14 6.14
Contribution 42.92 55.12 66.05 76.92 76.92 76.92 76.92
Less: Fixed Costs:
Interest on Term Loan 6.00 5.25 4.05 2.85 1.65 0.45 0.00
Depreciation 5.26 5.26 5.26 5.26 5.26 5.26 5.26
Wages & Salary (40 % Fixed ) 14.75 15.48 16.26 17.07 17.07 17.07 17.07
Administrative & Selling exp (40% fixed) 4.92 6.14 6.14 6.14 6.14 6.14 6.14
Misc. Expenses 5.42 5.69 5.97 6.27 6.59 6.92 7.26
36.34 37.83 37.69 37.60 36.71 35.84 35.74
Profit 6.5S 17.29 2836 3932 40.21 41.08 41.18
Contribution Per Unit 0.0079 0.0087 0.0092 0.0095 0.0095 0.0095 0.0095
Break Even Point 84.68% 68.63% 57.06% 48.88% 47.73% 46.60% 46.46%
Cash BEP 7142% 59.09% 49.09% 4104% 40.89% 39.76% 39.62%
Average Break Even Point 57.15%
 PAY BACK PERIOD
Rs. in Lacs
CASH GENERATION
YEAR
NET PROFIT DEPRECIATION
For the Year Cumulative
1 8.05 5.26 1331 13.31
2 13.34 5.26 18.60 31.91
3 20.69 5.26 25.95 57.87
4 28.02 5.26 33.29 91.15
5 28.11 5.26 33.37 124.52
6 28.61 5.26 33.87 158.39
7 37.72 5.26 42.98 201.37
Fixed Investment 75.16
Pay Back Period
= 3+
or 3.5 Years 6.235 months
 REQUIREMENT OF WORKING CAPITAL

Rs. in Lacs

Items No. of Bank Year 1 Year 2 Year 3 Year 4

Months Margin Amount Bank Fin. Margin Amount Bank Fin. Margin Amount Bank Fin. Margin Amount Bank Fin. Margin
Raw materials
0.5 25% 2.03 1.52 0.51 136 1.77 0.59 270 203 0.68 3.04 228 0.76
Consumable Stores
1 25% 030 0.23 0.08 035 0.26 0.09 0.40 030 0.10 0.45 034 0.11
Finished Goods
0.25 25% 281 2.11 0.70 3.28 246 0.82 3.75 281 0.94 4.22 3.16 1.05
Work-in-process
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
Total
7.40 5.55 1.85 851 6.38 113 9.62 7.22 141 10,74 8.05 168

Debtors (Trade)
1 25% 11.06 8.30 177 13.09 9.82 3.27 14.97 11.23 3.74 16.84 1163 4.21
Total
18.46 13.84 4.61 21.60 16.20 5.40 2459 18.44 6.15 27.58 20.69 6.90

Working Capital Int 12.00% 1.66 1.94 121 2.48