Detailed Project Report
Cotton Thread Manufacturing
—
Prepared on: 13 November 2026 · Prepared with Building Business DPR (buildingbusiness.in)
01 Project at a glance
- Total project cost
- ₹15.70 L
- Term loan from bank
- ₹10.20 L
- Promoter’s contribution
- ₹1.57 L
- Subsidy
- ₹3.92 L
- Sales · Year 3
- ₹0.00 L
- Profit after tax · Year 3
- ₹-5.76 L
- Average DSCR
- -1.61
- Break-even (% of capacity used)
- —
02 Promoter and unit
| Promoter name | — |
|---|---|
| Business / firm name | — |
| Legal form | Proprietorship |
| Address of the unit | — |
| Applicant category | General · Rural |
03 The project
Open, card, comb, spin and wind cotton fibre into sewing thread on a small mill line.
| Main product or service | Cotton Thread Manufacturing |
|---|---|
| Installed capacity per year (at 100%) | 10,000 units |
04 Market
- Garment factories
- Tailors and boutiques
- Embroidery and home-furnishing units
- Garment-cluster wholesalers
- Haberdashery and tailoring-material dealers
- Direct bulk supply to factories
05 Plant and machinery
| Item | Qty | ₹ | Total ₹ |
|---|---|---|---|
| Cotton bale pre-opener machine | 1 | 1,90,000 | 1,90,000 |
| Carding machine | 1 | 2,50,000 | 2,50,000 |
| Combing machine | 1 | 2,00,000 | 2,00,000 |
| Sliver lap machine | 1 | 3,50,000 | 3,50,000 |
| Spinning machine | 1 | 3,40,000 | 3,40,000 |
| Winding and spooling machine | 1 | 1,65,000 | 1,65,000 |
| Total | 14,95,000 |
Pre-filled from: PMEGP sample project report — Thread Manufacturing (prepared by Udyami/Samadhan); DGFT — ITC(HS) classification of export and import items. Prices in older reports will have gone up — enter today’s quotations.
06 Raw materials
- Cotton fibre — bought in bales
- Caustic soda — used in finishing
07 Cost of project
| ₹ in lakh | |
|---|---|
| Plant and machinery | 14.95 |
| Contingency | 0.75 |
| Total fixed capital | 15.70 |
| Working capital margin | 0.00 |
| Total project cost | 15.70 |
08 Means of finance
| ₹ in lakh | % | |
|---|---|---|
| Promoter’s contribution | 1.57 | 10.0 |
| Subsidy | 3.92 | 25.0 |
| Term loan from bank | 10.20 | 65.0 |
| Total | 15.70 | 100.0 |
| Working capital loan (outside project cost) | 0.00 |
09 Key assumptions
| Selling price | ₹0 per units |
|---|---|
| Raw material & packing cost | ₹0 per units |
| Capacity used each year | 60% · 70% · 80% · 80% · 80% · 80% · 80% |
| Term loan interest rate (% a year) | 11% · 84 months (Moratorium 6) |
| Working capital method | Turnover method (RBI) · Working capital interest (% a year) 11% |
| Income tax rate | 25% |
| Yearly price and cost rise | 0% |
10 Production and sales
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capacity used | 60% | 70% | 80% | 80% | 80% | 80% | 80% |
| Production (units) | 6,000 | 7,000 | 8,000 | 8,000 | 8,000 | 8,000 | 8,000 |
| Sales | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
11 Projected profitability
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Sales | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Raw material and packing | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Power and fuel | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Salaries and wages | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 |
| Rent | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Administration | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Selling and distribution | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Repairs and maintenance | 0.31 | 0.31 | 0.31 | 0.31 | 0.31 | 0.31 | 0.31 |
| Insurance | 0.08 | 0.08 | 0.08 | 0.08 | 0.08 | 0.08 | 0.08 |
| Total cost of operations | 3.27 | 3.27 | 3.27 | 3.27 | 3.27 | 3.27 | 3.27 |
| Operating profit (EBITDA) | -3.27 | -3.27 | -3.27 | -3.27 | -3.27 | -3.27 | -3.27 |
| Depreciation | 2.35 | 2.00 | 1.70 | 1.45 | 1.23 | 1.04 | 0.89 |
| Preliminary expenses written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest on term loan | 1.10 | 0.96 | 0.78 | 0.61 | 0.44 | 0.27 | 0.09 |
| Interest on working capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit before tax | -6.73 | -6.23 | -5.76 | -5.33 | -4.94 | -4.58 | -4.25 |
| Income tax | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit after tax | -6.73 | -6.23 | -5.76 | -5.33 | -4.94 | -4.58 | -4.25 |
12 Cash flow
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Profit after tax | -6.73 | -6.23 | -5.76 | -5.33 | -4.94 | -4.58 | -4.25 |
| Depreciation | 2.35 | 2.00 | 1.70 | 1.45 | 1.23 | 1.04 | 0.89 |
| Cash accruals (PAT + depreciation) | -4.38 | -4.23 | -4.06 | -3.88 | -3.71 | -3.54 | -3.37 |
| Term loan repaid | 0.78 | 1.57 | 1.57 | 1.57 | 1.57 | 1.57 | 1.57 |
| Owner’s drawings | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Surplus after repayment | -5.16 | -5.80 | -5.63 | -5.45 | -5.28 | -5.11 | -4.94 |
| Cash and bank | -5.16 | -10.96 | -16.59 | -22.04 | -27.32 | -32.43 | -37.37 |
13 Projected balance sheet
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capital (own + subsidy) | 5.49 | 5.49 | 5.49 | 5.49 | 5.49 | 5.49 | 5.49 |
| Reserves and surplus | -6.73 | -12.96 | -18.72 | -24.05 | -28.99 | -33.57 | -37.83 |
| Term loan outstanding | 9.42 | 7.85 | 6.28 | 4.71 | 3.14 | 1.57 | 0.00 |
| Working capital loan | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities | 8.18 | 0.38 | -6.95 | -13.85 | -20.36 | -26.51 | -32.33 |
| Net fixed assets | 13.34 | 11.34 | 9.64 | 8.19 | 6.97 | 5.92 | 5.03 |
| Preliminary expenses not written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Current assets (stock and debtors) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Cash and bank | -5.16 | -10.96 | -16.59 | -22.04 | -27.32 | -32.43 | -37.37 |
| Total assets | 8.18 | 0.38 | -6.95 | -13.85 | -20.36 | -26.51 | -32.33 |
14 Ratios and break-even
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Debt service coverage ratio (DSCR) | -1.73 | -1.30 | -1.39 | -1.50 | -1.63 | -1.78 | -1.97 |
| Break-even (% of capacity used) | — | — | — | — | — | — | — |
| Cash break-even | — | — | — | — | — | — | — |
| Average DSCR | -1.61 |
|---|---|
| Lowest DSCR | -1.97 |
| Payback period | — |
15 Depreciation
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Depreciation | 2.35 | 2.00 | 1.70 | 1.45 | 1.23 | 1.04 | 0.89 |
Written-down value method at Income-tax Rules block rates (building 10%, plant & machinery 15%, furniture 10%, computers 40%). Change them if your CA uses other rates.
16 Term loan repayment
| Year | Opening | Interest | Term loan repaid | Closing |
|---|---|---|---|---|
| 1 | 10.20 | 1.10 | 0.78 | 9.42 |
| 2 | 9.42 | 0.96 | 1.57 | 7.85 |
| 3 | 7.85 | 0.78 | 1.57 | 6.28 |
| 4 | 6.28 | 0.61 | 1.57 | 4.71 |
| 5 | 4.71 | 0.44 | 1.57 | 3.14 |
| 6 | 3.14 | 0.27 | 1.57 | 1.57 |
| 7 | 1.57 | 0.09 | 1.57 | 0.00 |
17 Licences and registrations
- Udyam registration
- GST registration
- Factory licence if worker count crosses the limit
- Pollution Control Board consent as applicable (cotton dust)
18 Government schemes that may apply
- Prime Minister's Employment Generation Programme (PMEGP)
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
19 Sources
- PMEGP sample project report — Thread Manufacturing (prepared by Udyami/Samadhan) — https://pmegp.msme.gov.in/Home/DownloadDocument?fileName=Documents/ProjectSampleReport/Thread_Manufacturing_DPR_%28_Samadhan_Projects_%29.pdf
- DGFT — ITC(HS) classification of export and import items — https://www.dgft.gov.in/CP/?opt=itchs-import-export
This report is a projection from the figures entered by the promoter. It is not a bank appraisal or a guarantee of a loan or subsidy. Check every figure with current quotations and your chartered accountant before submitting it.