PROJECT REPORT

Of

SLIPPERS

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Slippers making unit.

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in project
identification for investment and in order to serve his objective; the document covers various aspects
of the project concept development, start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can also prepare
project report on any subject as per your requirement.]

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 SLIPPER MAKING PROJECT REPORT

INTRODUCTION
Slippers are commonly used in by every household. Mostly made by rubber, slippers are being
used for regular and rough use at home. With the increase in using slippers at home and
sometimes at outside, many manufacturers from different regions of the nation are setting up
slipper making business. This is a profitable business and requires comparatively less investment.

MARKET POTENTIAL

Slipper is one such thing that is used by almost every household. Chappals or commonly called
Hawai chappals are being used largely by every section of society. It is obvious that there must
be many manufacturers who are in same business. So, the marketing strategies must be unique
for you to attract more customers towards your product or business.
To make it popular manufacturers can use advertisements such as local newspapers, leaflets,
kiosks, banners and hoardings. For the Indoor advertisements radio channels or television ads
can make a lot difference.
MANUFACTURING PROCESS

Raw Material Procurement

Cutting of Rubber/Sole sheets

Drilling of Holes and Strapping

Printing of Color and Branding

Drying

Packing
 PROJECT AT A GLANCE

1 Name of the Entreprenuer XXXXXXX

2 Constitution (legal Status) XXXXXXX

3 Father's/Spouce's Name XXXXXXXX

4 Unit Address : XXXXXXXX

Taluk/Block:
District : XXXXX
Pin: XXXXX State:
E-Mail : XXXXX
Mobile XXXXX

5 Product and By Product : Slippers

6 Name of the project / business activity proposed :

7 Cost of Project : Rs14.59lac

8 Means of Finance
Term Loan Rs.6.93 Lacs
KVIC Margin Money - As per Project Eligibility
Own Capital Rs.1.1 Lacs
Working Capital Rs.3 Lacs

9 Debt Service Coverage Ratio : 3.49

10 Pay Back Period : 5 Years

11 Project Implementation Period : 15 Days

12 Break Even Point : 32%

13 Employment : 3-4 Persons

14 Power Requirement : - HP

15 Major Raw materials : Sole Sheets and Strips

16 Estimated Annual Sales Turnover : 39.69 Lacs

16 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lacs)

Particulars Amount
Land Rented/Owned
Building & Civil Work (5000 Sq Ft) 3.00
Plant & Machinery 2.70
Other Equipment 2.00
Working Capital Requirement 3.33
Total 11.03

MEANS OF FINANCE
Particulars Amount
Own Contribution @10% 1.10
Term Loan 6.93
Workign Capital Finance 3.00

Total 11.03

Beneficiary's Margin Money General Special

(% of Project Cost) 10% 5%
PROJECTED BALANCE SHEET

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

SOURCES OF FUND

Capital Account 1.10 1.10 1.10 1.10 1.10

Retained Profit 3.30 6.39 11.15 18.33 27.82

Term Loan 6.93 5.21 3.49 1.77 -

Cash Credit 5.11 5.11 5.11 5.11 5.11
Sundry Creditors 0.73 1.00 1.23 1.47 1.74
Provisions & Other Liab 0.36 0.40 0.44 0.48 0.53

TOTAL : 17.54 19.21 22.52 28.27 36.31

APPLICATION OF FUND

Fixed Assets ( Gross) 7.70 7.70 7.70 7.70 7.70

Gross Dep. 1.01 1.87 2.63 3.28 3.84
Net Fixed Assets 6.70 5.83 5.07 4.42 3.86

Current Assets
Sundry Debtors 1.32 1.98 2.39 2.94 3.62
Stock in Hand 5.09 4.44 5.52 6.71 8.10
Cash and Bank 1.93 4.22 6.51 10.87 17.07
Deposits & Advances 2.50 2.75 3.03 3.33 3.66

TOTAL : 17.54 19.21 22.52 28.27 36.31

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

A) SALES
Gross Sale 39.69 59.38 71.79 88.34 108.65

Total (A) 39.69 59.38 71.79 88.34 108.65

B) COST OF SALES

Raw Mateiral Consumed 31.19 42.89 52.59 63.17 74.64

Elecricity Expenses 1.98 2.97 3.59 4.42 8.69
Repair & Maintenance 0.79 1.19 1.44 1.77 2.17
Labour & Wages 2.25 2.48 2.72 2.99 3.29
Depriciation 1.01 0.87 0.75 0.65 0.56
Consumables and Other Expense 0.79 1.19 1.44 1.77 2.17
Cost of Production 38.01 51.58 62.53 74.77 91.53

Add: Opening Stock /WIP - 3.53 2.29 2.89 3.55

Less: Closing Stock /WIP 3.53 2.29 2.89 3.55 4.37

Cost of Sales (B) 34.48 52.81 61.93 74.11 90.72

C) GROSS PROFIT (A-B) 5.21 6.56 9.86 14.23 17.94

13% 11% 14% 16% 17%
D) Bank Interest (Term Loan ) 0.60 0.72 0.52 0.33 0.13
Bank Interest ( C.C. Limit ) 0.51 0.51 0.51 0.51 0.51
E) Selling & Adm Expenses Exp. 0.79 1.90 2.87 4.42 5.43

TOTAL (D+E) 1.90 3.13 3.91 5.26 6.07

H) NET PROFIT 3.30 3.43 5.95 8.98 11.86

I) Taxation - 0.34 1.19 1.80 2.37

J) PROFIT (After Tax) 3.30 3.09 4.76 7.18 9.49

PROJECTED CASH FLOW STATEMENT

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

SOURCES OF FUND

Share Capital 1.10 -

Reserve & Surplus 3.30 3.43 5.95 8.98 11.86
Depriciation & Exp. W/off 1.01 0.87 0.75 0.65 0.56
Increase in Cash Credit 5.11 - - - -
Increase In Term Loan 6.93 - - - -
Increase in Creditors 0.73 0.27 0.23 0.25 0.27
Increase in Provisions 0.36 0.04 0.04 0.04 0.05

TOTAL : 18.54 4.61 6.97 9.92 12.74

APPLICATION OF FUND

Increase in Fixed Assets 7.70 - - - -

Increase in Stock 5.09 - 0.65 1.08 1.19 1.39
Increase in Debtors 1.32 0.66 0.41 0.55 0.68
Increase in Deposits & Adv 2.50 0.25 0.28 0.30 0.33
Repayment of Term Loan - 1.72 1.72 1.72 1.77
Taxation - 0.34 1.19 1.80 2.37

TOTAL : 16.61 2.32 4.68 5.56 6.54

Opening Cash & Bank Balance - 1.93 4.22 6.51 10.87

Add : Surplus 1.93 2.29 2.29 4.36 6.20

Closing Cash & Bank Balance 1.93 4.22 6.51 10.87 17.07
COMPUTATION OF MANUFACTURING OF Electric Door Chims

Items to be Manufactured Slippers Making

Manufacturing Capacity per day - 700.00 Pairs per hour

-
No. of Working Hour 10

No of Working Days per month 25

No. of Working Day per annum 300

Total Production per Annum 210,000.00 pairs per year

Year Capacity pairs per year

Utilisation

IST YEAR 60% 126,000

IIND YEAR 70% 147,000
IIIRD YEAR 80% 168,000
IVTH YEAR 90% 189,000
VTH YEAR 100% 210,000

COMPUTATION OF SALE

Particulars IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

Op Stock - 12,600 7,350 8,400 9,450

Production 126,000 147,000 168,000 189,000 210,000

126,000 159,600 175,350 197,400 219,450

Less : Closing Stock 12,600 7,350 8,400 9,450 10,500

Net Sale 113,400 152,250 166,950 187,950 208,950

Sale Price per pair 35.00 39.00 43.00 47.00 52.00

Sale (in Lacs) 39.69 59.38 71.79 88.34 108.65

COMPUTATION OF RAW MATERIAL

No. of Sole sheet required 10,500.00

Sole Sheets Requirement

Particulars IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR
Capacity 60% 70% 80% 90% 100%

Op Stock - 630 735 840 945

Production 6,300 7,350 8,400 9,450 10,500

6,300 7,980 9,135 10,290 11,445

Less : Closing Stock 630 735 840 945 1,050

Net Sale 5,670 7,245 8,295 9,345 10,395

Sale Price per sheet 430.00 432.00 434.00 436.00 438.00

Sale (in Lacs) 24.38 31.30 36.00 40.74 45.53

Strips

(No. of Strips required per pair) 2.00

Total strips required 420,000.00

Particulars IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR
Capacity 60% 70% 80% 90% 100%

Op Stock - 25,200 29,400 33,600 37,800

Production 252,000 294,000 336,000 378,000 420,000

252,000 319,200 365,400 411,600 457,800

Less : Closing Stock 25,200 29,400 33,600 37,800 42,000

Net Sale 226,800 289,800 331,800 373,800 415,800

Sale Price per strip 3.00 4.00 5.00 6.00 7.00

Sale (in Lacs) 6.80 11.59 16.59 22.43 29.11

COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

Finished Goods
(15 Days requirement) 3.53 2.29 2.89 3.55 4.37
Raw Material
(15 Days requirement) 1.56 2.14 2.63 3.16 3.73

Closing Stock 5.09 4.44 5.52 6.71 8.10

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Total
Amount
Stock in Hand 5.09

Sundry Debtors 1.32

Total 6.41
Sundry Creditors 0.73

Working Capital Requirement 5.68

Margin 0.57

Working Capital Finance 5.11

COMPUTATION OF DEPRECIATION

Description Land Building/shed Plant & TOTAL

Machinery

Rate of Depreciation 10.00% 15.00%

Opening Balance Leased - - -
Addition - 3.00 4.70 7.70
- 3.00 4.70 7.70
Less : Depreciation - 0.30 0.71 1.01
WDV at end of Ist year - 2.70 4.00 6.70
Additions During The Year - - - -
- 2.70 4.00 6.70
Less : Depreciation - 0.27 0.60 0.87
WDV at end of IInd Year - 2.43 3.40 5.83
Additions During The Year - - - -
- 2.43 3.40 5.83
Less : Depreciation - 0.24 0.51 0.75
WDV at end of IIIrd year - 2.19 2.89 5.07
Additions During The Year - - - -
- 2.19 2.89 5.07
Less : Depreciation - 0.22 0.43 0.65
WDV at end of IV year - 1.97 2.45 4.42
Additions During The Year - - - -
- 1.97 2.45 4.42
Less : Depreciation - 0.20 0.37 0.56
WDV at end of Vth year - 1.77 2.09 3.86
REPAYMENT SCHEDULE OF TERM LOAN 11.5%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

IST YEAR Opening Balance
Ist Quarter - 6.93 6.93 - - 6.93
Iind Quarter 6.93 - 6.93 0.20 - 6.93
IIIrd Quarter 6.93 - 6.93 0.20 - 6.93
Ivth Quarter 6.93 - 6.93 0.20 - 6.93
0.60 -
IIND YEAR Opening Balance
Ist Quarter 6.93 - 6.93 0.20 0.43 6.50
Iind Quarter 6.50 - 6.50 0.19 0.43 6.07
IIIrd Quarter 6.07 - 6.07 0.17 0.43 5.64
Ivth Quarter 5.64 5.64 0.16 0.43 5.21
0.72 1.72
IIIRD YEAR Opening Balance
Ist Quarter 5.21 - 5.21 0.15 0.43 4.78
Iind Quarter 4.78 - 4.78 0.14 0.43 4.35
IIIrd Quarter 4.35 - 4.35 0.13 0.43 3.92
Ivth Quarter 3.92 3.92 0.11 0.43 3.49
0.52 1.72
IVTH YEAR Opening Balance
Ist Quarter 3.49 - 3.49 0.10 0.43 3.06
Iind Quarter 3.06 - 3.06 0.09 0.43 2.63
IIIrd Quarter 2.63 - 2.63 0.08 0.43 2.20
Ivth Quarter 2.20 2.20 0.06 0.43 1.77
0.33 1.72
VTH YEAR Opening Balance
Ist Quarter 1.77 - 1.77 0.05 0.43 1.34
Iind Quarter 1.34 - 1.34 0.04 0.43 0.91
IIIrd Quarter 0.91 - 0.91 0.03 0.43 0.48
Ivth Quarter 0.48 0.48 0.01 0.48 0.00
0.13 1.77
CALCULATION OF D.S.C.R

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

CASH ACCRUALS 3.96 5.51 7.83 10.05

Interest on Term Loan 0.72 0.52 0.33 0.13

Total 4.68 6.04 8.16 10.18

REPAYMENT
Instalment of Term Loan 1.72 1.72 1.72 1.77
Interest on Term Loan 0.72 0.52 0.33 0.13

Total 2.44 2.24 2.05 1.90

DEBT SERVICE COVERAGE RATIO 1.92 2.69 3.99 5.36

AVERAGE D.S.C.R. 3.49

BREAK EVEN POINT ANALYSIS

Year I II III IV V

Net Sales & Other Income 39.69 59.38 71.79 88.34 108.65
Less : Op. WIP Goods ‐ 3.53 2.29 2.89 3.55
Add : Cl. WIP Goods 3.53 2.29 2.89 3.55 4.37

Total Sales 43.22 58.14 72.38 89.00 109.47

Variable & Semi Variable Exp.

Raw Material & Tax 31.19 42.89 52.59 63.17 74.64

Electricity Exp/Coal Consumption at 85% 1.69 2.52 3.05 3.75 7.39
Manufacturing Expenses 80% 1.27 1.90 2.30 2.83 3.48
Wages & Salary at 60% 1.35 1.49 1.63 1.80 1.98
Selling & adminstrative Expenses 80% 0.64 1.52 2.30 3.53 4.35
Intt. On Working Capital Loan 0.51 0.51 0.51 0.51 0.51
Total Variable & Semi Variable Exp 36.64 50.83 62.38 75.60 92.34

Contribution 6.58 7.31 10.00 13.41 17.13

Fixed & Semi Fixed Expenses

Manufacturing Expenses 20% 0.32 0.48 0.57 0.71 0.87

Electricity Exp/Coal Consumption at 15% 0.30 0.45 0.54 0.66 1.30
Wages & Salary at 40% 0.90 0.99 1.09 1.20 1.32
Interest on Term Loan 0.60 0.72 0.52 0.33 0.13
Depreciation 1.01 0.87 0.75 0.65 0.56
Selling & adminstrative Expenses 20% 0.16 0.38 0.57 0.88 1.09
Total Fixed Expenses 3.28 3.88 4.05 4.43 5.27

Capacity Utilization 60% 70% 80% 90% 100%

OPERATING PROFIT 3.30 3.43 5.95 8.98 11.86
BREAK EVEN POINT 30% 37% 32% 30% 31%
BREAK EVEN SALES 21.52 30.87 29.33 29.41 33.68
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