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    L&T - Leather Waist Belt

    Uploaded by

    Vinoth Kumar
    The document summarizes a proposal for a leather waist belt manufacturing business. It outlines the production capacity of 18,000 belts per year, with an estimated annual turnover of Rs. 39,60,000. Key details include the machinery required, production process, financial projections, and analysis. The total capital investment is estimated at Rs. 9,58,100, with annual costs of Rs. 34,30,000 and projected net profit of Rs. 5,30,000. The proposal finds there is market potential and sufficient raw materials and labor for the business.

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    L&T - Leather Waist Belt

    Uploaded by

    Vinoth Kumar
    60 views6 pages
    The document summarizes a proposal for a leather waist belt manufacturing business. It outlines the production capacity of 18,000 belts per year, with an estimated annual turnover of Rs. 39,60,000. Key details include the machinery required, production process, financial projections, and analysis. The total capital investment is estimated at Rs. 9,58,100, with annual costs of Rs. 34,30,000 and projected net profit of Rs. 5,30,000. The proposal finds there is market potential and sufficient raw materials and labor for the business.

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    L&T_Leather Waist Belt

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    The document summarizes a proposal for a leather waist belt manufacturing business. It outlines the production capacity of 18,000 belts per year, with an estimated annual turnover of Rs. 39,60,000. Key details include the machinery required, production process, financial projections, and analysis. The total capital investment is estimated at Rs. 9,58,100, with annual costs of Rs. 34,30,000 and projected net profit of Rs. 5,30,000. The proposal finds there is market potential and sufficient raw materials and labor for the business.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    60 views6 pages

    L&T - Leather Waist Belt

    Uploaded by

    Vinoth Kumar
    The document summarizes a proposal for a leather waist belt manufacturing business. It outlines the production capacity of 18,000 belts per year, with an estimated annual turnover of Rs. 39,60,000. Key details include the machinery required, production process, financial projections, and analysis. The total capital investment is estimated at Rs. 9,58,100, with annual costs of Rs. 34,30,000 and projected net profit of Rs. 5,30,000. The proposal finds there is market potential and sufficient raw materials and labor for the business.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 6

    LEATHER WAIST BELT

    PRODUCT CODE : 292918002

    QUALITY AND STANDARDS : As Per Customer Requirement

    PRODUCTION CAPACITY : 18,000 Nos. (Per Annum)


    Value : Rs. 39,60,000/-

    MONTH AND YEAR : July, 2014


    OF PREPARATION

    PREPARED BY : Sh. Tarsem Lal


    Deputy Director (Leather & Footwear)

    1. INTRODUCTION
    Leather waist belt is an item of dress used by young and old. It has a
    functional value besides being a fashion item. The actual use of this belt is to keep
    the pant tight at the waist. They are made in different widths and lengths to suit
    customers of all age groups and build. The leather used is plain or chrome tanned
    cowhides of even substance in different colours and shades of mainly black and
    brown. The buckles used are in different attractive designs and plated. They are
    detachable and fitted as per customer’s choice. Leather belts are more comfortable in
    use and long lasting than belts made of other materials. The manufacturing process
    of these belts is very simple. This item can easily be fabricated by small
    scale/cottage scale units.

    2. MARKET POTENTIAL
    The demand of waist belts made of leather is increasing in domestic as well as
    export markets. It is popular among school-going children and youths wearing
    western dress. It is also popular among the other age groups of men. There is no
    scarcity of raw materials and skilled workers, as the same is available in abundant
    quantity at every place of the country.

    -97-
    Leather & Footwear Division

    3. BASIS AND PRESUMPTIONS


    This project is made on the basis of the following presumptions:
    i. The production is based on single shift basis of 8 hrs. per day and 25 numbers
    of working days in a month.
    ii. Maximum capacity period 5 years.
    iii. Labour will be engaged on monthly basis keeping in view the present rates
    prevailing in the market.
    iv. Rate of interest @ 15% per annum.
    v. Margin money of the total investment – 25%.
    vi. Payback period – 10 to 12 years.
    vii. Land and building rented; constructed area 75 sq.mt.

    4. IMPLEMENTATION SCHEDULE
    It will take 10 month time to complete all the formalities before starting the
    commercial production.

    5. TECHNICAL ASPECTS
    5.1. Process of Manufacturing
    After selection of suitable leather, the belts of different sizes are cut by strap
    cutting machine and skived from the edges. Similarly the lining of the same sizes of
    required leather is also cut. The skived edges are folded. Then the lining is attached
    by paste. After pasting the belts are stitched with help of stitching machine. The
    excess of lining are to be trimmed. The other operations like buckle attaching edge
    setting punching are then carried out according to the design. The belts are then
    finally inspected and packed.

    5.2. Quality Control and Standards


    The belts are generally manufactured as per buyer’s requirements and
    specifications. However, the quality of this item will be maintained by the good
    quality of raw materials, selection of appropriate designs and strict supervision
    during manufacturing process.

    5.3. Production Capacity


    The unit is proposed to produce 18,000 nos. leather waist belt per year.

    5.4. Motive Power


    Total power requirement is about 3 H.P.

    5.5. Pollution Control


    This industry does not create any kind of pollution and as such there is no
    need to take any preventive measures for pollution control.

    -98-
    Leather Waist Belt

    6. FINANCIAL ASPECT
    6.1. Fixed Capital
    Land & Building:
    Built-up area of 75 Sq. meters rented @ Rs. 10,000/- per month.

    6.1.1. Machinery and Equipments


    Qty. Rate Value
    S.No. Particulars Ind/Imp
    (Nos.) (Rs.) (Rs.)
    1. Strap cutting machine Power Ind. 1 15,000 15,000
    Operated
    2. Upper Leather skiving machine Ind. 1 40,000 40,000
    3. Single Needle flatbed Industrial Ind. 2 15,000 30,000
    Sewing Machine 31 ND 15 Merrit
    4. Side creasing machine Ind. 1 5,000 5,000
    5. Hand tools and other equipments 10,000
    6. Office equipment and working table 15,000
    7. Electrification and installation 9,000
    charges @ 10% of machinery
    Total 1,24,000
    Preoperative expenses Rs. 16,000/-

    Total Fixed Capital Rs. 1,40,000/-

    6.2. Working Capital (per month)


    6.2.1. Personnel
    S.No. Description Nos Salary (Rs.) Amount (Rs.)
    1. Manager (self) 1 15,000 15,000
    2 Supervisor 1 8,500 8,500
    3. Accountant-cum-Storekeeper 1 8,000 8,000
    4. Skilled Workers 4 8,000 32,000
    5. Semi-Skilled Workers 2 7,000 14,000
    6. Watchman/Peon 1 8,000 8,000
    Total 85,500
    Add perquisites @ 20% on salary 17,100
    Grand Total 1,02,600

    6.2.2. Raw Materials including Packaging Materials


    S.No. Description Qty. Rate (Rs.) Amount (Rs.)
    1 Chrome Tanned upper Leather 9000 dcm @ Rs.9/dcm 81,000
    2 Split Upper 9000 @ Rs.4/dcm 36,000
    3 Buckle, thread, solution etc. 1500 pcs @ Rs.20/pc 30,000
    4 Packing material 1500 pcs @ Rs.2/pc 3,000
    Total 1,50,000

    -99-
    Leather & Footwear Division

    6.2.3. Utilities
    Power: 400 units @ Rs. 6/- per unit Rs. 2,400/-
    Water: L.S. Rs. 200/-
    Total Rs. 2,600/-

    6.2.4. Other Contingent Expenses (Per Month)


    S.No. Particular Amount (Rs.)
    1. Rent 10,000
    2. Postage & Stationery 500
    3. Repair & Maintenance 500
    4. Transportation 1,000
    5. Insurance 500
    6. Sales Expenses 1,500
    7. Consumable stores 500
    8. Advertisement/Publicity 2,000
    9. Miscellaneous expenses 1,000
    Total 17,500

    6.2.5. Total Recurring Expenditure (per month) Rs. 2,72,700/-

    6.3. Total Capital Investment


    Fixed Capital Rs. 1,40,000
    Working Capital for 3 months Rs. 8,18,100
    Total Rs. 9,58,100/-

    MACHINERY UTILISATION
    Initially 60% utilization of machinery is there and thereafter it will increase
    @ 10% per year and 100% utilization will be achieved during the next five years.

    7. FINANCIAL ANALYSIS
    7.1. Cost of Production (per annum in Rs.)
    S. No. Description Amount (Rs.)
    1. Total recurring cost 32,72,400
    2. Deprecation on machinery @ 10% 9,000
    3. Depreciation on tools, furnitures & fixtures @ 20% 5,000
    4. Interest on total capital investment @ 15% 1,43,715
    Total 34,30,115
    Say 34,30,000

    7.2. Turnover (per annum)


    Leather Waist Belts 18,000 pcs. @ Rs.220/- Rs. 39,60,000/-

    -100-
    Leather Waist Belt

    7.3. Net Profit (per annum)


    = Turnover – Cost of Production
    = Rs. 39,60,000 - 34,30,000
    = Rs. 5,30,000/-

    7.4. Net Profit Ratio


    Net profit per year
    = X 100
    Turnover per year

    5,30,000
    = X 100
    39,60,000

    = 13.4 %

    7.5. Rate of Return


    Net profit per year
    = X 100
    Total Capital Investment

    5,30,000
    = X 100
    9,58,100

    = 55.3 %

    7.6. Break-even Point


    Fixed Cost (Per Annum) (Rs.)
    Total Depreciation 14,000
    Rent 1,20,000
    Interest on total capital investment 1,43,715
    Insurance 6,000
    40% of Salary and Wages 4,92,480
    40% of Other Contingent Expenses excluding rent & 33,600
    insurance
    Total 8,09,795

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

    8,09,795
    = X 100
    8,09,795 + 5,30,000

    = 60.4 %

    -101-
    Leather & Footwear Division

    Names & Addresses of suppliers of Machinery & Equipments


    1. M/s Raj Machine Home
    35/118-D, Lashkarpur
    Near Kamla Nagar
    Agra – 282 005

    2. M/s Leather Machinery Corpn.


    11, Harrington Road
    Chetpet, Chennai – 600 006

    3. M/s Paul Bros.


    Nai Sarak, Delhi

    Names & Addresses of suppliers of Raw Material


    Can be locally procured from Delhi.

    -102-

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