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Cotton Yarn Spinning Project

ASSUMPTIONS

Introduction

Promoters Market Processing Raw Material Comparison

1.The envisaged capacity of the plant is 24192 spindles in ring spinning section and two open-end rotors in Coarse Yarn section. The plant will operate on three-shift basis on a 355 days working schedule in a year.

2.The capacity utilization will be at 70%, 80% and 90% during first, second and subsequent years.

3. The products will be 100% cotton yarn of count 6’s to 20’s. The recovery of yarn is considered at:- Production Saleable Waste a) Coarse Yarn 84% 12.80% b) Combed Yarn 72% 22.38% c) Carded Yarn 86% 11.17%

4. The raw material mix and prices will be as under: - Virgin 80% Rs. 45500/- per MT Waste 20% Rs.. 36000/- per MT

5. The rates (Rs./MT) for markets will be as under: -
Product RATE (Rs./MT)
a) Coarse Yarn 90000
b) Combed Yarn 120000
c) Carded Yarn 105000
d) Cotton waste 18000

6. Consumables include packaging cost @ 1800 per MT of yarn.

6. Wages and salaries have been increased by 5% per annum to cover annual increments.

7. Repair has been considered as direct expenses on capital cost @ .5% Per annum.

8. Power bill has been considered at Rs 5 per unit including captive power generation.

9. Deprecation has been considered in profitability statement on SM basis to permit year to year comparison, though the company will adopt WDV deprecation for income tax purposes.

10. Selling expenses include @ 0.75% which is only commission involving select yarn varieties,

11. Interest on Term loan under Tech. Up gradation Fund Scheme has been considered @ 7.5%, and on working capital @ 10.5%.

12. Corporate tax and MAT have been considered @ 33.36% or 11.24% respectively as the case may be.

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