PROJECT REPORT

Of

SOCKS MANUFACTURING UNIT

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Socks Manufacturing 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.]

Lucknow Office: Sidhivinayak Building ,

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Delhi Office : Multi Disciplinary Training

Centre, Gandhi Darshan Rajghat,
New Delhi 110002

Email : info@[Link]
Contact : +91 7526000333, 444, 555
 SOCKS MANUFACTURING UNIT
Introduction
A sock is an item of clothing worn on the feet and often covering
the ankle or some part of the calf. Some type of shoe or boot is
typically worn over socks. In ancient times, socks were made from
leather or matted animal hair. In the late 16th century, machine-knit
socks were first produced. Until 1800 both hand knitting and
machine knitting were used to produce socks, but after 1800,
machine knitting became the predominant method.
One of the roles of socks is absorbing perspiration. The foot is
among the heaviest producers of sweat in the body, as it can
produce over 0.25 US pints of perspiration per day, socks help to
absorb this sweat and draw it to areas where air can evaporate the
perspiration. In cold environments, socks made from wool insulate
the foot and decrease the risk of frostbite. Socks are worn with
sport shoes (typically white-coloured socks) and dress shoes
(typically dark-coloured socks). In addition to the numerous
practical roles played by socks, they are also a fashion item, and
they are available in myriad colours and patterns.

Description of Sock Machine

Machinery for Sock includes the following:
 Polyester Blender
 Polyester Texturiser
 LYCRA Yarm
 DOP Dyed

Sock Machines are used to manufacture sock from different types

of raw material. With the help of this machine the work of rolling,
Cutting, stitching & packaging completes in a very short span.
Socks Market Analysis
The global socks market size was valued at USD 42.2 billion in 2018.
Rising importance of maintaining formal attire among white-collar
professionals on a global level is expected to play a crucial role in
expanding the utility of socks. This, in turn, is expected to boost the
market growth in the coming years.

Socks Manufacturing Process

 Put the roll of polypropylene on the roller.

 Put the input into the machine.
 Start the machine.
 After that machine will automatically complete the further
processing of manufacturing.
 Packaging of goods.

Machinery &Equipment’s required:

Name Cost
Total Value of Machinery 650000
GST @18% 117000
Total 7,67,000

 Cost of the machine is exclusive of other transportation cost.

Land &Building required:

Land required 1200 Square Feet (approx.)

Approximate rent for the same is 24000.

Labour Requirement:

2 Manpower is required for the Sock Manufacturing unit.

Includes:

1 skilled Labour

2 Unskilled Labour

Raw Material Requirement of Socks

 Polypropylene
 Blended yarn
 Cotton
Average raw material cost per KG: Rs. 140

Sock License &registration

For Proprietor:
 Obtain the GST registration.
 Obtain the license from cosmetic & Drug Control Department.
 Fire/ Pollution Registration as required.
 Choice of a Brand Name of the product and secure the name with
Trademark if required.

Implementation Schedule

S.N. Activity Time Required

(in Months)
1 Acquisition Of premises 1
2 Construction (if Applicable) 1- 2 Months
3 Procurement & installation of Plant & Machinery 1
4 Arrangement of Finance 1
5 Requirement of required Manpower 1
Total time Required (some activities shall run 2-3 Months
concurrently)
 PROJECT AT A GLANCE

1 Name of the Entrepreneur xx

2 Constitution (legal Status) : xx
3 Father's/Spouce's Name Xx
4 Unit Address :
Taluk/Block: xx
District : xx
Pin:
E-Mail : xx
Mobile xx
5 Product and By Product : SOCK
Name of the project / business
6 activity proposed :

7 Cost of Project : Rs. 6.99

8 Means of Finance

Term Loan Rs. 6.29 Lacs

25% of 6.99 Lacs
KVIC Margin Money Rs. (1.75 Lacs)

Own Capital Rs. 0.92 Lacs

9 Debt Service Coverage Ratio :

10 Pay Back Period : 5 years

11 Project Implementation Period : 6 months

12 Employment :
5 KW
13 Power Requirement : connection
Blended yearn, poly
14 Major Raw materials : propylen
15.84 Lacs (at 50%
15 Estimated Annual Sales Turnover : capacity)

Detailed Cost of Project & Means of

16 Finance
COST OF PROJECT (Rs. In Lacs)
Particulars Amount
Land
 Building & Civil
Work -

Plant & Machinery 6.49

Furniture &
Fixtures 0.50
Pre-operative Expenses
Contingencies
Working Capital
Requirement 2.22

Total 9.21
MEANS OF FINANCE
Particulars Amount

Own Contribution 0.92

Bank Finance 6.29

working capital
from bank 2.00

Total 9.21
KVIC Margin (25% of 6.99)
Monery Rs. 1,74,750
 FINANCIAL ASSISTANCE REQUIRED

Term Loan of Rs. 6.29 Lacs and Working Capital limit of Rs. 2.70 Lacs

COST OF
PROJECT PARTICULARS AMOUNT AMOUNT AMOUNT
10.00% 90.00%
Building Civil Work

Plant & Machinery 6.49 0.65 5.84

Furniture & Fixtures and Other

Assets 0.50 0.05 0.45

Working capital 2.22 0.22 2.00

Total 9.21 1.02 8.29

MEANS OF
FINANCE PARTICULARS AMOUNT

Own Contribution 0.92

Bank Loan 6.29

Working capital Limit 2.00

Total 9.21
COMPUTATION OF PRODUCTION OF SOCK

Items to be Manufactured

Sock

machine capacity 48pair per hour

machine capacity per day 384Pair

machine capacity per annum 115200 Pair

Raw Material

1 KG of raw material contains 40 Pair

Total raw Material Required 2,880 KG

Production of SOCK
Production Capacity Sock

1st year 50% 57,600

2nd year 55% 63,360

3rd year 60% 69,120

4th year 65% 74,880

5th year 70% 80,640

Raw Material Cost

Year Capacity Rate Amount

Utilisation (Rs. in lacs)

1st year 50% 140.00 2.02

2nd year 55% 141.00 2.23

3rd year 60% 142.00 2.45

4th year 65% 143.00 2.68

5th year 70% 144.00 2.90

 COMPUTATION OF SALE

Particulars 1st year 2nd year 3rd year 4th year 5th year
Op Stock - 4,800 5,280 5,760 6,240
Production 57,600 63,360 69,120 74,880 80,640
Less : Closing Stock 4,800 5,280 5,760 6,240 6,720
Net Sale 52,800 62,880 68,640 74,400 80,160
sale price per pair 30.00 31.00 32.00 33.00 34.00
Sales (in Lacs) 15.84 19.49 21.96 24.55 27.25

BREAK UP OF LABOUR CHARGES

Particulars Wages No of Total

Per Month Employees Salary

Skilled 15000 1 15000

Unskilled 12000 1 12000

Total Salary Per Month 27000

Total Annual Labour Charges (in Lacs) 3.24

Utility Charges at 100% capacity (per month)

Particulars value Description
Power connection required 15 KWH
consumption per day 120 units
Consumption per month 2400 units
Rate per Unit 7 Rs.
power Bill per month 16800 Rs.
PROJECTED PROFITABILITY STATEMENT

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year

Capacity Utilisation % 50% 55% 60% 65% 70%

SALES

Gross Sale

Socks 15.84 19.49 21.96 24.55 27.25

Total 15.84 19.49 21.96 24.55 27.25

COST OF SALES

Raw Material Consumed 2.02 2.23 2.45 2.68 2.90

Electricity Expenses 2.02 2.22 2.44 2.68 2.95

Depreciation 1.02 0.87 0.74 0.63 0.54

labour 3.24 3.56 3.92 4.31 4.74

Consumables 0.95 1.17 1.32 1.47 1.64

Repair & maintenance 0.82 1.01 1.14 1.28 1.42

other direct expenses 0.63 0.78 0.88 0.98 1.09

Cost of Production 10.70 11.85 12.90 14.04 15.28

Add: Opening Stock /WIP - 0.89 0.99 1.07 1.17

Less: Closing Stock /WIP 0.89 0.99 1.07 1.17 1.27

Cost of Sales 9.81 11.75 12.81 13.94 15.18

GROSS PROFIT 6.03 7.74 9.16 10.61 12.08

Interest on Term Loan 0.68 0.63 0.50 0.37 0.04

Interest on working Capital 0.22 0.22 0.22 0.22 0.22

Rent 2.88 3.17 3.48 3.83 4.22

Selling & adm Exp 1.19 1.85 2.24 2.21 3.27

TOTAL 4.97 5.87 6.45 6.63 7.74

NET PROFIT 1.06 1.87 2.71 3.97 4.33

Taxation

PROFIT (After Tax) 1.06 1.87 2.71 3.97 4.33

PROJECTED BALANCE SHEET

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year

Liabilities

Capital

opening balance 1.48 2.10 3.06 4.83

Add:- Own Capital 0.92

Add:- Retained Profit 1.06 1.87 2.71 3.97 4.33

Less:- Drawings 0.50 1.25 1.75 2.20 3.00

Closing Balance 1.48 2.10 3.06 4.83 6.17

Subsidy Reserve 1.75 1.75 1.75 - -

Term Loan 5.75 4.67 3.59 0.76 -

Working Capital Limit 2.00 2.00 2.00 2.00 2.00

Sundry Creditors 0.08 0.09 0.10 0.17 0.17

Provisions & Other Liab 0.30 0.40 0.55 0.66 0.83

TOTAL : 11.37 11.01 11.05 8.42 9.16

Assets

Fixed Assets ( Gross) 6.99 6.99 6.99 6.99 6.99

Gross Dep. 1.02 1.90 2.64 3.27 3.82

Net Fixed Assets 5.97 5.09 4.35 3.72 3.17

FD of Subsidy 1.75 1.75 1.75

Current Assets

Sundry Debtors 1.32 1.62 2.20 2.05 2.73

Stock in Hand 1.06 1.17 1.28 1.39 1.52

Cash and Bank 1.27 1.37 1.48 1.27 1.75

TOTAL : 11.37 11.01 11.05 8.42 9.16

PROJECTED CASH FLOW STATEMENT

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year

SOURCES OF FUND

Own Margin 0.92

Net Profit 1.06 1.87 2.71 3.97 4.33

Depriciation & Exp. W/off 1.02 0.87 0.74 0.63 0.54

Increase in Cash Credit 2.00 - - - -

Increase In Term Loan 6.29 - - - -

Increase in Creditors 0.08 0.01 0.01 0.07 0.00

Increase in Provisions & Oth lib 0.30 0.10 0.15 0.11 0.17

increase in subsidy 1.75

TOTAL : 13.43 2.85 3.61 4.78 5.04

APPLICATION OF FUND

Increase in Fixed Assets 6.99

Increase in Stock 1.06 0.11 0.11 0.11 0.12

Increase in Debtors 1.32 0.30 0.57 - 0.15 0.68

Repayment of Term Loan 0.54 1.08 1.08 2.83 0.76

Increase in FD 1.75 - -

Drawings 0.50 1.25 1.75 2.20 3.00

Taxation - - - - -

TOTAL : 12.16 2.75 3.51 4.99 4.56

Opening Cash & Bank Balance - 1.27 1.37 1.48 1.27

Add : Surplus 1.27 0.10 0.11 - 0.21 0.48

Closing Cash & Bank Balance 1.27 1.37 1.48 1.27 1.75
COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year

Finished Goods

0.89 0.99 1.07 1.17 1.27

Raw Material

0.17 0.19 0.20 0.22 0.24

Closing Stock 1.06 1.17 1.28 1.39 1.52

COMPUTATION OF WORKING CAPITAL REQUIREMENT

TRADITIONAL METHOD

Particulars Amount Own Margin Bank Finance

Finished Goods & Raw Material 1.06

Less : Creditors 0.08

Paid stock 0.98 10% 0.10 90% 0.88

Sundry Debtors 1.32 10% 0.13 90% 1.19

2.30 0.23 2.07

WORKING CAPITAL LIMIT DEMAND ( from Bank)

2.00
2nd Method

PARTICULARS 1st year 2nd year

Total Current Assets 3.65 4.17

Other Current Liabilities 0.38 0.49

Working Capital Gap 3.27 3.68

Min Working Capital

25% of WCG 0.82 0.92

Actual NWC 1.27 1.68

item III - IV 2.45 2.76

item III - V 2.00 2.00

MPBF (Lower of VI & VII) 2.00 2.00

3rd Method

PARTICULARS 1st year 2nd year

Total Current Assets 3.65 4.17

Other Current Liabilities 0.38 0.49

Working Capital Gap 3.27 3.68

Min Working Capital

25% of Current Assets 0.91 1.04

Actual NWC 1.27 1.68

item III - IV 2.35 2.64

item III - V 2.00 2.00

MPBF (Lower of VI & VII) 2.00 2.00

COMPUTATION OF DEPRECIATION

Description Plant & Machinery Furniture TOTAL

Rate of Depreciation 15.00% 10.00%

Opening Balance - - -

Addition 6.49 0.50 6.99

Total 6.49 0.50 6.99

Less : Depreciation 0.97 0.05 1.02

WDV at end of Year 5.52 0.45 5.97

Additions During The Year - - -

Total 5.52 0.45 5.97

Less : Depreciation 0.83 0.05 0.87

WDV at end of Year 4.69 0.41 5.09

Additions During The Year - - -

Total 4.69 0.41 5.09

Less : Depreciation 0.70 0.04 0.74

WDV at end of Year 3.99 0.36 4.35

Additions During The Year - - -

Total 3.99 0.36 4.35

Less : Depreciation 0.60 0.04 0.63

WDV at end of Year 3.39 0.33 3.72

Additions During The Year - - -

Total 3.39 0.33 3.72

Less : Depreciation 0.51 0.03 0.54

WDV at end of Year 2.88 0.30 3.17

s - - -

Total 2.88 0.30 3.17

Less : Depreciation 0.43 0.03 0.46

WDV at end of Year 2.45 0.27 2.71

Less : Depreciation 0.37 0.03 0.39

WDV at end of Year 2.08 0.24 2.32

Less : Depreciation 0.31 0.02 0.34

WDV at end of Year 1.77 0.22 1.98

CALCULATION OF D.S.C.R

1st 2nd 3rd 4th 5th

PARTICULARS year year year year year

CASH ACCRUALS 2.09 2.74 3.45 4.61 4.87

Interest on Term Loan 0.68 0.63 0.50 0.37 0.04

Total 2.76 3.37 3.95 4.98 4.91

REPAYMENT

Instalment of Term Loan 0.54 1.08 1.08 2.83 0.76

Interest on Term Loan 0.68 0.63 0.50 0.37 0.04

Total 1.22 1.71 1.58 3.20 0.80

DEBT SERVICE COVERAGE RATIO 2.27 1.97 2.50 1.56 6.17

AVERAGE D.S.C.R. 2.89

 REPAYMENT SCHEDULE OF TERM LOAN
Interest 12.00%
Closing
Year Particulars Amount Addition Total Interest Repayment Balance
ist Opening Balance

1st month - 6.29 6.29 - - 6.29

2nd month 6.29 - 6.29 0.06 - 6.29

3rd month 6.29 - 6.29 0.06 - 6.29

4th month 6.29 - 6.29 0.06 6.29

5th month 6.29 - 6.29 0.06 6.29

6th month 6.29 - 6.29 0.06 6.29

7th month 6.29 - 6.29 0.06 0.090 6.20

8th month 6.20 - 6.20 0.06 0.090 6.11

9th month 6.11 - 6.11 0.06 0.090 6.02

10th month 6.02 - 6.02 0.06 0.090 5.93

11th month 5.93 - 5.93 0.06 0.090 5.84

12th month 5.84 - 5.84 0.06 0.090 5.75

0.68 0.540
2nd Opening Balance

1st month 5.75 - 5.75 0.06 0.090 5.66

2nd month 5.66 - 5.66 0.06 0.090 5.57

3rd month 5.57 - 5.57 0.06 0.090 5.48

4th month 5.48 - 5.48 0.05 0.090 5.39

5th month 5.39 - 5.39 0.05 0.090 5.30

6th month 5.30 - 5.30 0.05 0.090 5.21

7th month 5.21 - 5.21 0.05 0.090 5.12

8th month 5.12 - 5.12 0.05 0.090 5.03

9th month 5.03 - 5.03 0.05 0.090 4.94

10th month 4.94 - 4.94 0.05 0.090 4.85

11th month 4.85 - 4.85 0.05 0.090 4.76

12th month 4.76 - 4.76 0.05 0.090 4.67

 0.63 1.080
3rd Opening Balance

1st month 4.67 - 4.67 0.05 0.090 4.58

2nd month 4.58 - 4.58 0.05 0.090 4.49

3rd month 4.49 - 4.49 0.04 0.090 4.40

4th month 4.40 - 4.40 0.04 0.090 4.31

5th month 4.31 - 4.31 0.04 0.090 4.22

6th month 4.22 - 4.22 0.04 0.090 4.13

7th month 4.13 - 4.13 0.04 0.090 4.04

8th month 4.04 - 4.04 0.04 0.090 3.95

9th month 3.95 - 3.95 0.04 0.090 3.86

10th month 3.86 - 3.86 0.04 0.090 3.77

11th month 3.77 - 3.77 0.04 0.090 3.68

12th month 3.68 - 3.68 0.04 0.090 3.59

0.50 1.080
4th Opening Balance

1st month 3.59 - 3.59 0.04 0.090 3.50

2nd month 3.50 - 3.50 0.04 0.090 3.41

3rd month 3.41 - 3.41 0.03 0.090 3.32

4th month 3.32 - 3.32 0.03 0.090 3.23

5th month 3.23 - 3.23 0.03 0.090 3.14

6th month 3.14 - 3.14 0.03 0.090 3.05

7th month 3.05 - 3.05 0.03 0.090 2.96

8th month 2.96 - 2.96 0.03 0.090 2.87

9th month 2.87 - 2.87 0.03 0.090 2.78

10th month 2.78 - 2.78 0.03 0.090 2.69

11th month 2.69 - 2.69 0.03 0.090 2.60

12th month(Subsidy
adjusted) 2.60 - 2.60 0.03 1.840 0.76
0.37 2.830
5th Opening Balance

1st month - 0.01 0.090

 0.76 0.76 0.67

2nd month 0.67 - 0.67 0.01 0.090 0.58

3rd month 0.58 - 0.58 0.01 0.090 0.49

4th month 0.49 - 0.49 0.00 0.090 0.40

5th month 0.40 - 0.40 0.00 0.090 0.31

6th month 0.31 - 0.31 0.00 0.090 0.22

7th month 0.22 - 0.22 0.00 0.090 0.13

8th month 0.13 - 0.13 0.00 0.090 0.04

9th month 0.04 - 0.04 0.00 0.040 0.00

0.04 0.76

DOOR TO DOOR 57 MONTHS

MORATORIUM PERIOD 6 MONTHS
REPAYMENT PERIOD 51 MONTHS
Supplier Details:
S L Machinery Address:
Plot No. 930, Tyre Wall Gali,
Mundka, Delhi.
 DISCLAIMER

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