FOREWORD

FOREWORD

BACKGROUND:

Rungta Weaving and Dyeing House Private Limited is a Private Limited company incorporated on 24th May, 2013 with Shri Ajay Kumar Rungta and Shri Anuj Kumar Rungta as the promoter director. Subsequently Shri Anuj Kumar Rungta resigned and Shri. Shreya Poddar was appointed as the promoter director of the company. The company will be engaged in manufacturing hosiery and related items as mentioned below –

Name of the Product Installed Capacity

Knitted Cotton Fabric 57,60,000.00 Kgs / annum

Narrow Woven Fabric Tape 4,83,84,000.00 Meters / annum

Leggings 92,16,000.00 Pcs / annum

KEY PERSON’S BACKGROUNDAND PROFILE

KEY PERSON’S BACKGROUND AND PROFILE

Rungta Weaving and Dyeing House Private Limited will be primarily managed by its promoter directors – Mr. Ajay Kumar Rungta and Mr. Shreya Poddar, both of them having a strong business experience in the textile and iron and steel sectors.

Shri Ajay Kumar Rungta, Director

Shri Ajay Kumar Rungta, S/o of Shri Shankar Lalji Rungta, aged 49 years, is a B.Com Graduate, and is residing at P 150 A, C.I.T. Road, Scheme – 6M, Kolkata – 700054, has been the prime motivating force in setting up of Rungta Weaving and Dyeing House Private Limited.

Prior to joining hands with Mr. Shreya Poddar, Mr. Rungta was actively involved in the textile business of manufacturing narrow woven fabric tape under the name of partnership firm – M/s Rungta Weaving and Dyeing House for 3 years along with his elder brother Mr. Suresh Kumar Rungta and his son Mr. Anuj Kumar Rungta. Since Mr. Rungta wanted to expand his business, the need for corporatization was felt and thus he incorporated Rungta Weaving and Dyeing House Private Limited. Later on his son Mr. Anuj Kumar Rungta decided to not to continue the business and resigned from the board of the directors and then Mr. Rungta joined hands with Mr. Shreya Poddar who has got good experience in this line of business through his other ventures.

After studying the entire Hosiery Market in Kolkata, West Bengal, he with the help of some other key person’s has decided to be engaged in manufacturing cotton fabrics, narrow woven fabric tape and leggings, all the products being the hosiery related items. He has further decided to further do the value addition by manufacturing men and women briefs and vests and market it under own brand name.

Shri Ajay Kumar Rungta, being having an experience of almost 30 years knows very well the basic nitty-gritty for running any factory and can manage it quiet efficiently.

Shri Shreya Poddar, Director.

Shri Shreya Poddar, S/o of Shri Bimal Poddar, aged 33 years, is residing at 69 Dr Abani Dutta Road, Golabari, Howrah - 711101. He is a B.Com Graduate having a diversified business experience and belongs to a business family whose experience is an added advantage to the company.

Mr. Poddar has a very strong experience in this line of business through his various other ventures like Dilip Polyfab Private Limited which is engaged in manufacturing of Cotton Fabrics used in Cots Wool Wears, Saundarya Fashion Traders Private Limited engaged in manufacturing Sarees and Embroidered Fabrics, Vikat Fabrics Private Limited engaged in similar business. All these business are being managed by Mr. Umesh Bharech in addition to Mr. Poddar. Apart from these businesses, Mr. Poddar is also director in Trishna Commercial Private Limited which is engaged in Cut to Size and Wholesale Trading of Iron and Steel Products and is being managed by Mr. Abhishek Sangai along with Mr. Shreya Poddar.

Shri Bichitra Kar, Key Technician.

Shri Bichitra Kar, S/o of Shri Bishnu Chandra Kar, aged 45 years is a graduate and is residing at Bera Bedi Sikhar Bagan, Rajarhat, Gopalpur, Kolkata – 700 136.

He has an experience of more than 20 years in this line of activity. He is associated with ANJ Narrow Fabric Pvt. Ltd. as Key Technician and now has given his consent to join Rungta Weaving and Dyeing House Private Limited.

Being having an experience of more than 20 years, he very well knows all factors required for proper functioning of machines. In these years he has learnt, what problems can be faced in operating these machineries and how to solve the same. He has a complete idea of latest technologies available in the market and how to make use of them. He has guided us on which machines are to be installed depending upon their production and quality specifications.

The company foresees a bright future under the leadership of Shri Ajay Kumar Rungta, Shri Shreya Poddar, Shri Santosh Saraiwala and Shri Bichitra Kar as the main heads.

BANKING PROFILE

BANKING PROFILE

Rungta Weaving and Dyeing House Private Limited is a newly incorporated company with no bank account as of now.

However, their need based requirement for financing their project is mentioned hereunder.

FACILITY TYPE AMOUNT (RS IN LACS)

Term Loan 675.00

Cash Credit 6000.00

ILC / FLC 1500.00

TOTAL 8175.00

PROJECT PROFILE

PROJECT PROFILE

The company will be engaged in manufacturing Knitted Cotton Fabrics, Narrow Woven Fabric Tape and Leggings. It proposes to go for further value addition in the short term by getting into manufacturing men and women briefs and vests and markets them under its own brand name. The products are primarily used in making hosiery like men and women briefs and vests, kids wear, night wears, etc. The manufacturing unit will be located at Krishnapur, Madanpur, Kemia Khamar Para (GP), Madhyamgram, Dist – 24 Parganas (N), Kolkata – 700128, West Bengal.

The highlights for setting up unit in Kolkata, West Bengal are:

Location Advantage of Kolkata, having a good rail, air and road connectivity with other parts of the country.

Easy availability of good quality raw material from nearby states, cheap labour and other industrial facilities like power, communication, etc.

Kolkata is referred to as one of the major centers for Cotton based Hosiery Garments in India.

HUMAN RESOURCE MANAGEMENT

HUMAN RESOURCE MANAGAMENT

MANPOWER:

“Employees are the Hands of Business”

An estimate of manpower allowing for leave, absenteeism, sickness and holiday for soot and efficient operation of different sections of the plant including its administrative and commercial department, has been prepared purely on technical and management ground primarily to indicate the order of manpower requirement, to provide guidelines for initiating action on recruitment and to make an estimate of the annual salary and wages bill, which will reflect on the production cost estimate.

Employee plays an important role in the success of any business. It is therefore important for the management to give much attention to them and provide better service to them. This will increase the efficiency and morale of the employee. Concern will provide basic services like Safety Facilities, i.e. First Aid and Medical Facilities, Newspapers and Magazines, Withdrawal Facilities, etc to the employees.

Firm has estimated total manpower at 105 including administrative and technical staff. Details of manpower requirement for all the working shifts taken together are as under:

Particulars No. of Employees

Administrative Staff

General Manager 1

Sales and Marketing Staff 2

Accounts & Finance 3

Technical Staff

Production Manager 6

Electrical In charge 2

Mechanical In charge 6

Other Labour and Staff

Operator 28

Asst. Operator 10

Helper 10

Checking and Packing Staff 20

Quality Control Engineer 6

Security 4

Peon 4

Total 105

MARKETING ARRANGEMENT

MARKETING ARRANGEMENT

Cotton Fabrics and Narrow Woven Fabric Tapes are industrial products and does not require mass consumer marketing and this will be marketed directly with the hosiery manufacturers. However Leggings require mass consumer marketing and this will be marketed to the wholesalers and various retailers. The company will have a separate marketing department consisting of marketing executives and headed by Mr. Saraiwala who will follow up with the customers for taking the orders and then passing the same to the production manager for execution.

CHANNEL OF DISTRIBUTION:

The Concern will have a direct channel of distribution, i.e. no middleman between Suppliers and Customers. This will not only help in reducing cost and maximize profit, but will help the concern in maintaining closer relationship with customers and this will enhance the creditability of the concern.

INDUSTRY ANALYSIS

INDUSTRY ANALYSIS

The demand for the product is ever increasing because of the constant growth

in cotton based hosiery garment making unit, not only in India, but worldwide.

Cotton Fabrics and Narrow Woven Fabric Tape are the most essential inputs

for hosiery units and thus its demand is ever lasting.

DOMESTIC DEMAND:

State Government is taking constant endeavor to promote hosiery units, the

result of which is huge demand for elastic tapes and cotton knitted fabrics.

Firm will first cater to the domestic demand for its product before

implementing any export planning. Company has already applied for Import

Export Code.

Expected buyers of the products are:

NEW LOOK: brassieres

NODY CARE: ladies and children inner wear

GROVER SONS: ladies and children inner wear

RUPA: ladies and men inner garments

OMTEX: sports and surgical accessories

STATES MAN FASHION: ladies and gents garments

LUX: ladies and men inner garments

DOLLAR: ladies and men inner garments

SARAS: Men inner wear.

EXPORT DEMAND:

The demand of this product is very good even outside India, as hosiery making

units there find our products cheaper without any kind of compromise in the

quality. Seeing the huge potential firm plans to export its product after

catering to the domestic market in India. Expected Buyers abroad are as

follows:

1. SARA LEE – Ladies and Men inner garments.

2. MULTIGROUP – Ladies and Girls Inner wear.

3. EMBEE GARMENT: Ladies &Gents inner wear

DETAILS AND USE

OF PRODUCT

DETAILS AND USE OF PRODUCT

1 Kg of Cotton Yarn is required to manufacture 1 Kg of Knitted Cotton Fabrics.

The cotton yarn is knitted into cotton fabrics in the interlock circular knitting

machines. 1 meter of Narrow Woven Fabric Tape weighs 20 gram (approx) as it

forms the basic overall market demand and this consists of 75% Polyester Yarn

and 30% Natural Latex Heat Resistance Rubber Threads. The polyester yarn

and rubber are woven into narrow woven fabric tape with the brand name of

the customer woven on top of it with the help of computerized jacquard

machines. Both of these products are consumed by the cotton based hosiery

garments manufacturing unit. The end product obtained by using our product

will be in the form of men and women inner wears which is largely used in the

entire country.

1 pc of Legging weighs 200 grams of cotton fabrics made from cotton yarn with

lycra finishing. The cotton yarn with lycra finishing is knitted into cotton fabrics

which is then processed (cutting and stitching) into leggings which is directly

used by the female consumers in wearing. The demand for leggings have

increased over a period of time and is now one of the most prime requirement

by majority of rural female population in their daily wear requirements.

Other end uses of Narrow Woven Fabric Tape:

1. Used in Hand Gloves.

2. Used in Denim Jeans for men and women.

3. Ladies, Men and Kids wear

4. Sports Wears

Other end uses of Cotton Fabrics:

1. Night Wears

2. Kids Wear

3. Sports Wear

4. Cots Wool Wear

COST OF THE PROJECT &

MEANS OF FINANCE

COST OF THE PROJECT AND MEANS OF FINANCE

Total cost of the project and the means of finance of the proposed project are

as follows:

COST OF THE PROJECT AMOUNT (RS IN LACS)

Land, Building & Civil Construction 929.00

Plant & Machinery 884.40

Computer & Peripherals 4.30

Electrical Installation 10.00

Furniture 6.50

Working Capital 11462.46

Total 13296.66

MEANS OF FINANCE AMOUNT (RS IN LACS)

Promoter’s Contribution 5121.66

Term Loan 675.00

Cash Credit 6000.00

ILC/FLC 1500.00

Total 13296.66

CREDIT ASSESSMENT

CREDIT ASSESSMENT

ASSESSMENT OF TERM LOAN:

The company proposes to buy land and do the civil construction from the

promoters own capital and take term loan for the installation, erection and

commissioning of plant and machinery along with computer and peripherals,

electrical installations and furniture and fixtures. The company proposes for a

term loan of Rs 675.00 Lacs for the above.

ASSESSMENT OF WORKING CAPITAL:

The Working Capital has been assessed at Rs. 11462.46 Lacs. The assessment of

the same has been done in the following manner:

Stock Rs 5527.48 Lacs

Debtors Rs 6209.42 Lacs

Creditors Rs 274.44 Lacs

Total Rs 11462.46 Lacs

Margin of 35% Rs 3962.46 Lacs

Cash Credit Rs 6000.00 Lacs

ILC/FLC Rs 1500.00 Lacs

HOLDING PERIOD ANALYSIS:

1. The average holding period of raw material is taken as 45 days, which is in

line with the nature of business and industry benchmarks. The order

processing time is 5 days, and it takes approximately 10 days to get the raw

materials from Maharashtra and South. Additionally, it is always advisable

to keep MOS stock for further 30 days.

2. The company proposes to have a WIP of 20 days approx which will include

cotton fabrics sent outside for dyeing purpose.

3. The company proposes to keep a minimum inventory of 25 days in order to

meet special demands of the customers and this is as per industry average.

4. Domestic Receivables level are for 75 days in terms of normal credit policy

prevailing for the industry.

5. There are no creditors in this line of activity, as one can procure raw

material only on making advance payment, but still company has proposed

a creditor of 5 days as it might procure materials from wholesalers and local

suppliers at the time of urgent needs on credit and company also proposes

to procure materials on LC both ILC and FLC.

COST OF PRODUCTION AND

PROFITABILITY CONSIDERATION

COST OF PRODUCTION AND PROFITABILITY CONSIDERATION

The estimated cost of production and profitability ratios for the project during

the years of operations has been estimated and the profitability projections

are based on the technical and commercial data furnished below:

Name of the Product Annual Installed Capacity Selling Price / Unit

Knitted Cotton Fabric 57,60,000.00 Kgs Rs 450.00 / Kg

Narrow Woven Fabric Tape 4,83,84,000.00 Mt Rs 10 / Meter

Leggings 92,16,000.00 Pcs Rs 185.00 / Pc

Interest on Term Loan and on Working Capital Loan has been taken @ 12 %

and ILC / FLC is proposed to be charged @ 1%.

Attainment of plant capacity depends on various activities. It needs co-

ordination among different section and maximum capacity can be achieved

after few years. Capacity Utilization also depends on power availability.

Considering all parameters, capacity utilization has been assessed at 70% for

the two year, 80% for the third year and 90% from fourth year onwards.

Company will be able to make commercial production for only three months in

the first year of its operation.

RAW MATERIALS

RAW MATERIAL

The Major Raw Materials required by the company are –

1. Cotton Yarn – This is the prime raw material required for both cotton fabrics as well as leggings. Cotton Yarn mills are mostly situated in Southern India and the company proposes to procure the same from them.

2. Polyester Yarn – Available in abundance in the state of Maharashtra and Southern India. Company proposes to procure this raw material from these states and this is one of the most important raw materials in the manufacturing of Narrow Woven Fabric Tape.

3. Heat Resistance Rubber Threads - Majority of the Rubber manufacturing units are situated in the Southern India. Alternatively company proposes to procure these materials from Thailand and Malaysia also.

TECHNOLOGY USED

TECHNOLOGIES USED

Cotton Fabrics

Cotton Yarn is loaded in the sinker machine which has needles fixed to the rim of

a rotating cylinder. As the cylinder turns, the needles work their way from stitch

to stitch producing tubular fabric. Its width is regulated by the size of the cylinder.

Once the desired weight of the cotton fabric is obtained it is cut off and

separated. The knitted fabric is then sent for dyeing on job work as per

customer’s specification. Once dyed fabric is received it is then sent for heat

setting so as to give proper shape to the fabric by ironing which makes it usable

for further processing down the line.

Narrow Woven Fabric Tape

The Raw Material passes through various stages in Woven fabric tape Unit, which is as follows:

1. Warping:Polyester yarn passes through warping machine. Here different colors of Polyester yarns are warped in single beam so as to meet customer requirement.

2. Rubber Covering:The yarn is then passed through the rubber-covering machine. Yarns are covered with rubber on both sides. After this stage semi finished goods are ready.

3. Weaving:The rubber covered yarn gets weaved at this stage. The product is now ready as elastic tapes. Customers Brand Names are weaved on them with the help of Jacquard Machines as required by the consumers.

4. Finishing:Ironing is done to enhance the marketability of the product.

5. Checking and Measuring:Quality of the product is checked by the production in charge. Tapes are then measured in meters.

6. Festooning:After measuring the product is winded for the purpose of packing in 500 mts per cartoon.

7. Packing:The product is now packed by the packing department and then stored in ware house.

Leggings

Cotton Yarn with Lycra finishing is loaded in the interlock circular knitting machine

which has needles fixed to the rim of a rotating cylinder. As the cylinder turns, the

needles work their way from stitch to stitch producing tubular fabric. Its width is

regulated by the size of the cylinder. Once the desired weight of the cotton fabric

is obtained it is cut off and separated. The knitted fabric is then sent for dyeing on

job work as per customer’s specification. Once dyed fabric is received cutting and

stitching work is carried on the job wok basis. After stitching ironing, checking and

packing is done. Once it is done, leggings are ready to be dispatched to the

customers.

GOVERNMENT INITIATIVE

GOVERNMENT INITIATIVE

Kolkata and Tirupur are the two major centers for Cotton based Hosiery products. It is gratifying to note that West Bengal’s Hosiery Industry is gradually awakening. Many Hosiery Knitwear units in State have started taking interest in exports and their scales of operation have expanded many fold.

The Union Ministry of Textiles deserves appreciation for their decision to set up 25 Integrated Textile Parks in the country with one of them reported to be earmarked for West Bengal. Two such parks have already started functioning in Gujarat and two more are under construction. A Textile Park has already been set up at Tirupur.

The State Government is reported to be ready to provide any support and the Hosiery Association in the State is eager to offer all possible cooperation.

The infrastructure facilities in West Bengal have started improving. New roads are being constructed, new bridges are being built, projects for new ports and cargo handling airports are under consideration and power supply position is better as compared to many other states of the country. A special focus is been given to improve the logistics system.

If concerted efforts are made by all concerned – the entrepreneurs, the workers, and the government – there is no reason why hosiery industry cannot achieve robust growth. Huge potential is there, but it is just the question of harnessing it in the right earnest.

There are various capital and interest subsidy in this segment from Central and State Government which has not been considered in this project. All these subsidies will be directly deposited in the Term Loan Account or will be kept as Fixed Deposit in Lien Account as the affect of both has not been considered in the Income Statement.

FINANCIAL ASSESSMENT