Detailed Project Report
Upholstery Leather Tanning Unit
—
Prepared on: 26 October 2026 · Prepared with Building Business DPR (buildingbusiness.in)
01 Project at a glance
- Total project cost
- ₹28.46 L
- Term loan from bank
- ₹25.61 L
- Promoter’s contribution
- ₹2.85 L
- Sales · Year 3
- ₹0.00 L
- Profit after tax · Year 3
- ₹-8.64 L
- Average DSCR
- -0.71
- 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
Turn cow hides into finished upholstery leather for sofas, car seats and other furniture.
| Main product or service | Upholstery Leather Tanning Unit |
|---|---|
| Installed capacity per year (at 100%) | 10,000 units |
04 Market
- Sofa and furniture makers
- Car-seat and automotive interior makers
- Leather goods makers
- Supply on buyer specification
- Leather traders in tannery clusters
- Export orders
05 Plant and machinery
| Item | Qty | ₹ | Total ₹ |
|---|---|---|---|
| Wooden paddle, vat 8'×7', 10 HP motor (× 2) | 1 | 1,00,000 | 1,00,000 |
| Wooden drum 8'×6' with 10 HP motor (× 2) | 1 | 2,00,000 | 2,00,000 |
| Fleshing machine, 1800 mm, 15 HP | 1 | 2,50,000 | 2,50,000 |
| Splitting machine, 1800 mm, 15 HP | 1 | 5,00,000 | 5,00,000 |
| Unhairing machine, 1800 mm, 15 HP | 1 | 4,00,000 | 4,00,000 |
| Hydraulic press, 25 HP | 1 | 4,00,000 | 4,00,000 |
| Spray booth with compressor (× 2) | 1 | 1,00,000 | 1,00,000 |
| Measuring machine, 1800 mm, 5 HP | 1 | 2,00,000 | 2,00,000 |
| Generator set, 50 kVA | 1 | 2,00,000 | 2,00,000 |
| Testing equipment (× LS) | 1 | 60,000 | 60,000 |
| Effluent treatment plant | 1 | 3,00,000 | 3,00,000 |
| Total | 27,10,000 |
Pre-filled from: DC-MSME project profile — Upholstery Leather (SISI New Delhi, PMRY series); World Customs Organization – HS Nomenclature 2022, Chapter 41. Prices in older reports will have gone up — enter today’s quotations.
06 Raw materials
- Wet-salted cow hides — 2,500 pieces a month at ₹700 each; the profile says they are available locally
- Processing and finishing chemicals (lime, sodium sulphide, vegetable tannin extracts, fat liquor, pigments, acrylic and urethane finishes) — ₹10 per sq ft — ₹6.25 L a month
07 Cost of project
| ₹ in lakh | |
|---|---|
| Plant and machinery | 27.10 |
| Contingency | 1.36 |
| Total fixed capital | 28.46 |
| Working capital margin | 0.00 |
| Total project cost | 28.46 |
08 Means of finance
| ₹ in lakh | % | |
|---|---|---|
| Promoter’s contribution | 2.85 | 10.0 |
| Term loan from bank | 25.61 | 90.0 |
| Total | 28.46 | 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 | 0.57 | 0.57 | 0.57 | 0.57 | 0.57 | 0.57 | 0.57 |
| Insurance | 0.14 | 0.14 | 0.14 | 0.14 | 0.14 | 0.14 | 0.14 |
| Total cost of operations | 3.59 | 3.59 | 3.59 | 3.59 | 3.59 | 3.59 | 3.59 |
| Operating profit (EBITDA) | -3.59 | -3.59 | -3.59 | -3.59 | -3.59 | -3.59 | -3.59 |
| Depreciation | 4.27 | 3.63 | 3.08 | 2.62 | 2.23 | 1.89 | 1.61 |
| Preliminary expenses written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest on term loan | 2.77 | 2.40 | 1.97 | 1.53 | 1.10 | 0.67 | 0.23 |
| Interest on working capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit before tax | -10.63 | -9.62 | -8.64 | -7.75 | -6.92 | -6.15 | -5.44 |
| Income tax | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit after tax | -10.63 | -9.62 | -8.64 | -7.75 | -6.92 | -6.15 | -5.44 |
12 Cash flow
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Profit after tax | -10.63 | -9.62 | -8.64 | -7.75 | -6.92 | -6.15 | -5.44 |
| Depreciation | 4.27 | 3.63 | 3.08 | 2.62 | 2.23 | 1.89 | 1.61 |
| Cash accruals (PAT + depreciation) | -6.36 | -5.99 | -5.56 | -5.13 | -4.69 | -4.26 | -3.83 |
| Term loan repaid | 1.97 | 3.94 | 3.94 | 3.94 | 3.94 | 3.94 | 3.94 |
| Owner’s drawings | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Surplus after repayment | -8.33 | -9.93 | -9.50 | -9.07 | -8.63 | -8.20 | -7.77 |
| Cash and bank | -8.33 | -18.27 | -27.77 | -36.83 | -45.46 | -53.66 | -61.43 |
13 Projected balance sheet
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capital (own + subsidy) | 2.85 | 2.85 | 2.85 | 2.85 | 2.85 | 2.85 | 2.85 |
| Reserves and surplus | -10.63 | -20.25 | -28.90 | -36.64 | -43.56 | -49.72 | -55.15 |
| Term loan outstanding | 23.64 | 19.70 | 15.76 | 11.82 | 7.88 | 3.94 | 0.00 |
| Working capital loan | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities | 15.85 | 2.29 | -10.29 | -21.98 | -32.84 | -42.93 | -52.31 |
| Net fixed assets | 24.19 | 20.56 | 17.47 | 14.85 | 12.63 | 10.73 | 9.12 |
| 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 | -8.33 | -18.27 | -27.77 | -36.83 | -45.46 | -53.66 | -61.43 |
| Total assets | 15.85 | 2.29 | -10.29 | -21.98 | -32.84 | -42.93 | -52.31 |
14 Ratios and break-even
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Debt service coverage ratio (DSCR) | -0.76 | -0.57 | -0.61 | -0.66 | -0.71 | -0.78 | -0.86 |
| Break-even (% of capacity used) | — | — | — | — | — | — | — |
| Cash break-even | — | — | — | — | — | — | — |
| Average DSCR | -0.71 |
|---|---|
| Lowest DSCR | -0.86 |
| Payback period | — |
15 Depreciation
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Depreciation | 4.27 | 3.63 | 3.08 | 2.62 | 2.23 | 1.89 | 1.61 |
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 | 25.61 | 2.77 | 1.97 | 23.64 |
| 2 | 23.64 | 2.40 | 3.94 | 19.70 |
| 3 | 19.70 | 1.97 | 3.94 | 15.76 |
| 4 | 15.76 | 1.53 | 3.94 | 11.82 |
| 5 | 11.82 | 1.10 | 3.94 | 7.88 |
| 6 | 7.88 | 0.67 | 3.94 | 3.94 |
| 7 | 3.94 | 0.23 | 3.94 | 0.00 |
17 Licences and registrations
- Udyam registration
- GST registration
- State Pollution Control Board consent to establish and operate (tanning is Red category)
- Factory licence (the unit employs more than the Factories Act limit)
- Import Export Code (IEC) if you export
18 Government schemes that may apply
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
- Stand-Up India
19 Sources
- DC-MSME project profile — Upholstery Leather (SISI New Delhi, PMRY series) — https://www.dcmsme.gov.in/publications/pmryprof/leather/ch25.pdf
- World Customs Organization – HS Nomenclature 2022, Chapter 41 — https://www.wcoomd.org/-/media/wco/public/global/pdf/topics/nomenclature/instruments-and-tools/hs-nomenclature-2022/2022/0841_2022e.pdf
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.