Detailed Project Report
Zuggrain Leather Tannery (Safety Shoe Upper Leather)
—
Prepared on: 13 November 2026 · Prepared with Building Business DPR (buildingbusiness.in)
01 Project at a glance
- Total project cost
- ₹59.33 L
- Term loan from bank
- ₹53.39 L
- Promoter’s contribution
- ₹5.93 L
- Sales · Year 3
- ₹0.00 L
- Profit after tax · Year 3
- ₹-14.90 L
- Average DSCR
- -0.41
- 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
Chrome-tan heavy buffalo hides and print them with a zuggrain pattern to make upper leather for safety shoes and boots.
| Main product or service | Zuggrain Leather Tannery (Safety Shoe Upper Leather) |
|---|---|
| Installed capacity per year (at 100%) | 10,000 units |
04 Market
- Safety shoe and boot manufacturers
- Suppliers to defence, paramilitary forces and NCC
- Shoe upper makers and leather exporters
- Direct sale to footwear factories by grade and area
- Leather merchants in tannery clusters
- Export orders for leather and uppers
05 Plant and machinery
| Item | Qty | ₹ | Total ₹ |
|---|---|---|---|
| Wooden paddle vats 8 × 8 ft with 10 HP motor (× 4) | 1 | 4,00,000 | 4,00,000 |
| Tanning drums with 10 HP motor (× 3) | 1 | 6,00,000 | 6,00,000 |
| Fleshing machine 2,700 mm with 40 HP motor | 1 | 5,00,000 | 5,00,000 |
| Shaving machine 12 inch, 7.5 HP | 1 | 2,00,000 | 2,00,000 |
| Setting-out machine 2,000 mm, 25 HP | 1 | 3,00,000 | 3,00,000 |
| Splitting machine 2,700 mm with 25 HP motor (imported) | 1 | 15,00,000 | 15,00,000 |
| Slow comb staking machine, 5 HP | 1 | 1,00,000 | 1,00,000 |
| Buffing machine, 5 HP | 1 | 1,00,000 | 1,00,000 |
| Spray booth with gun and air compressor | 1 | 1,00,000 | 1,00,000 |
| Weighing scales (500 kg, 100 kg, 5 kg) (× 3) | 1 | 50,000 | 50,000 |
| Diesel generating set 50 kVA | 1 | 3,00,000 | 3,00,000 |
| Effluent treatment plant with chrome recovery (estimate, listed separately) | 1 | 15,00,000 | 15,00,000 |
| Total | 56,50,000 |
Pre-filled from: DC-MSME project profile — Zuggrain Leather. Prices in older reports will have gone up — enter today’s quotations.
06 Raw materials
- Wet salted buffalo hides, about 20 kg and 40 sq ft each — 2,500 a month at ₹1,200 a piece = ₹30,00,000
- Tanning, dyeing and finishing chemicals — ₹15 per sq ft = ₹15,00,000 a month
07 Cost of project
| ₹ in lakh | |
|---|---|
| Plant and machinery | 56.50 |
| Contingency | 2.83 |
| Total fixed capital | 59.33 |
| Working capital margin | 0.00 |
| Total project cost | 59.33 |
08 Means of finance
| ₹ in lakh | % | |
|---|---|---|
| Promoter’s contribution | 5.93 | 10.0 |
| Term loan from bank | 53.39 | 90.0 |
| Total | 59.33 | 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 | 1.19 | 1.19 | 1.19 | 1.19 | 1.19 | 1.19 | 1.19 |
| Insurance | 0.30 | 0.30 | 0.30 | 0.30 | 0.30 | 0.30 | 0.30 |
| Total cost of operations | 4.36 | 4.36 | 4.36 | 4.36 | 4.36 | 4.36 | 4.36 |
| Operating profit (EBITDA) | -4.36 | -4.36 | -4.36 | -4.36 | -4.36 | -4.36 | -4.36 |
| Depreciation | 8.90 | 7.56 | 6.43 | 5.46 | 4.65 | 3.95 | 3.36 |
| Preliminary expenses written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest on term loan | 5.78 | 5.01 | 4.10 | 3.20 | 2.30 | 1.39 | 0.49 |
| Interest on working capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit before tax | -19.04 | -16.93 | -14.90 | -13.03 | -11.30 | -9.70 | -8.21 |
| Income tax | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit after tax | -19.04 | -16.93 | -14.90 | -13.03 | -11.30 | -9.70 | -8.21 |
12 Cash flow
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Profit after tax | -19.04 | -16.93 | -14.90 | -13.03 | -11.30 | -9.70 | -8.21 |
| Depreciation | 8.90 | 7.56 | 6.43 | 5.46 | 4.65 | 3.95 | 3.36 |
| Cash accruals (PAT + depreciation) | -10.14 | -9.37 | -8.47 | -7.56 | -6.66 | -5.76 | -4.85 |
| Term loan repaid | 4.11 | 8.21 | 8.21 | 8.21 | 8.21 | 8.21 | 8.21 |
| Owner’s drawings | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Surplus after repayment | -14.25 | -17.58 | -16.68 | -15.78 | -14.87 | -13.97 | -13.07 |
| Cash and bank | -14.25 | -31.83 | -48.51 | -64.29 | -79.17 | -93.14 | -106.20 |
13 Projected balance sheet
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capital (own + subsidy) | 5.93 | 5.93 | 5.93 | 5.93 | 5.93 | 5.93 | 5.93 |
| Reserves and surplus | -19.04 | -35.98 | -50.87 | -63.90 | -75.20 | -84.91 | -93.12 |
| Term loan outstanding | 49.29 | 41.07 | 32.86 | 24.64 | 16.43 | 8.21 | 0.00 |
| Working capital loan | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities | 36.18 | 11.03 | -12.08 | -33.32 | -52.84 | -70.76 | -87.19 |
| Net fixed assets | 50.43 | 42.86 | 36.43 | 30.97 | 26.32 | 22.37 | 19.02 |
| 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 | -14.25 | -31.83 | -48.51 | -64.29 | -79.17 | -93.14 | -106.20 |
| Total assets | 36.18 | 11.03 | -12.08 | -33.32 | -52.84 | -70.76 | -87.19 |
14 Ratios and break-even
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Debt service coverage ratio (DSCR) | -0.44 | -0.33 | -0.35 | -0.38 | -0.42 | -0.45 | -0.50 |
| Break-even (% of capacity used) | — | — | — | — | — | — | — |
| Cash break-even | — | — | — | — | — | — | — |
| Average DSCR | -0.41 |
|---|---|
| Lowest DSCR | -0.50 |
| Payback period | — |
15 Depreciation
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Depreciation | 8.90 | 7.56 | 6.43 | 5.46 | 4.65 | 3.95 | 3.36 |
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 | 53.39 | 5.78 | 4.11 | 49.29 |
| 2 | 49.29 | 5.01 | 8.21 | 41.07 |
| 3 | 41.07 | 4.10 | 8.21 | 32.86 |
| 4 | 32.86 | 3.20 | 8.21 | 24.64 |
| 5 | 24.64 | 2.30 | 8.21 | 16.43 |
| 6 | 16.43 | 1.39 | 8.21 | 8.21 |
| 7 | 8.21 | 0.49 | 8.21 | 0.00 |
17 Licences and registrations
- Udyam registration
- GST registration
- Factory licence
- Consent to establish and operate from the State Pollution Control Board (tanneries are a highly polluting category)
- Hazardous waste authorisation for chrome sludge
- Membership of a common effluent treatment plant, or your own ETP
18 Government schemes that may apply
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
19 Sources
- DC-MSME project profile — Zuggrain Leather — https://www.dcmsme.gov.in/old/reports/leather/zuggrainleather.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.