Project Feasibility Report on Gents Shirts And Trousers

By:Pankaj Kumar Taywade

MT14IND014M. Tech.(Industrial Engineering)

2014-15Mechanical Engineering

VNIT, Nagpur

Content

• Introduction

• Raw Material Study

• Demand Study

• Technical Study

• Location Study

• Financial Aspects

• Source of Finance

• Financial Analysis

• Profit Analysis2

Introduction

• Manufacturing of Shirts and Trousers are underthe category of readymade Garment industry.

• Its contribution to industrial production,employment and export earnings are verysignificant.

• This industry provides one of the basic necessitiesof life.

3

Raw Material Study

• J. A. I. Impex ,Villa Madonna, Mohan Nagar ,Nagpur - 440 001, Maharashtra

• Sharda Group Of Indian Silk Industries ,No. 12,Pragatisheel Colony, Opposite Sai Mandir Wardha Road,Nagpur - 440015, Maharashtra

• Sri Bhagirath Textile LimitedSarvodaya Cloth Market, Near Hotel Annapurna,Gandhibagh ,Nagpur - 440002, Maharashtra

4

Demand Study

• Readymade garments are the choice of urbanpeople. It is also gaining wider acceptance insemi-urban and rural areas.

• In domestic market and export market, it hasmade spectacular progress in the last decade.This industry is becoming very vibrant and lot offoreign investment pouring in this industrybecause of low risk and high earning nature ofthis industry.

5

Technical Study

• Procurement of Fabrics :Dyed/bleach/synthetic/cotton are procured from theopen market as per the demand. The procuredfabrics are inspected to check unevenness incolour/shade or any other before cutting and if fabricis found to be defective the it is eliminated.

• Cutting and stitching : Inspected fabrics are cut intodifferent sizes by the cutting machine and stitching iscarried out for individual portion of the garment bythe skilled workers with the help of over-lock, lockstitching machines etc.

6

Technical Study

• Washing, Checking, Pressing and Packing: All thegarments are put into the washing machinecontaining mild detergent and washed for fourshours in order to remove the dust , dirt and stainsacquired during the manufacturing process. Afterwashing garments are dried in tumbler dryer.Final checking is done into order to remove thedefective garment. The individual pieces arepressed by the steam presses to remove wrinklesand packed in the carton boxes.

7

Technical Study

• Quality Standard:

• Production Capacity(per annum):

S.No. BIS No. Title

1 IS:12675 Garment Quality Guide

2 IS:4039 Readymade Garment Packaging for Export.

3 IS:10194 Garment Guide for Positioning of Labels.

Product Quantity (Pcs.) Value(Rs.)

Gents Shirts 90,0004,77,00,000Gents Trousers 90,000

8

Technical Study

• Motive power required: Total30 HP is required to run this unit at installedcapacity.

• Pollution Control : Thisprocess of manufacturing does not generate anypollution.

• Energy Conservation : Maximum care should betaken while selecting the machinery and otherequipments so as to ensure minimum powerconsumption.

9

Location Study

• Availability of land :Rented 2,500 sq. feet land is available in theindustrial region of Warora @ Rs. 450 per Sq.feet.

• Approach to site :Good network of Rail and Road transport. Nearthe State Highway linking Nagpur - Chandrapur.

• Transportation : Rented vehicles fortransportation and supply are easily availablenear the working site.

10

Location Study

• Water : PersonalBore water of land Owner is available for drinking waterand daily needs. Municipal Corporation taps are alsoavailable.

• Power : Electricity iseasily available throughout 24 hrs. MSEB has establishedPower sub station in Warora.

• Other facilities : Theamenities like Post office, Banks, Police station, PetrolPumps, Canteen, Bus services etc. are available in this area.

11

Implementation Schedule

S.No. Activity Period

1 Selection of site/ working shed 1 month

2 Formation of company(Partnership/Ownership) 1 month

3 Preparation of feasibility report 1 month

4 Registration with commissioner of Industries 1 month

5 Arrangement of finance(Term loan & Working capital) 3 months

6 Procurement of machinery and equipment 1 month

7 Plant erection and electrification 6 months

8 Arrangement of raw material including packaging material 1 month

9 Recruitment of manpower 1 month

10 Selection of market channel 1 month

11 Miscellaneous work like power and water connection etc. 2 months

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Financial Aspects

• Land and Building :

Land : Total Area of 2500 Sq. Feet @ Rs. 450 per Sq. feet.

Building : Factory shed : 200 Sq. feet.Store(Raw Materials) : 50 Sq. feetStore(Finished Goods) : 50 Sq. feetTotal area covered : 300 Sq. feetTotal Cost : Rs 24,000

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Financial Aspects

• Machinery and Equipments :

S.No. Machinery Description Qty. No.s

Rate (Rs.) Value (Rs)

1 Single Needle Lock Stitch Machine with motor.

50 23,650 11,82,500

2 6” Power driven cloth cutting machine

1 50,000 50,000

3 2 Needle Over lock Safety Stitching Machine with Trimmer

1 50,000 50,000

4 Double Needle Lock Stitch Machine 2 75,000 1,50,000

5 Button Hole making Machine 1 1,45,000 1,45,000

6 Button Stitching Machine 1 75,000 75,000

7 Hot Fusing Press 1 65,000 65,000

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S.No. Machinery Description Qty. No.s

Rate (Rs.) Value (Rs)

8 Garment Washing Machine 25 Kg capacity

1 1,45,000 1,45,000

9 Hydro extractor 25 Kg capacity 1 70,000 70,000

10 Tumbler Dryer 25 Kg capacity 1 1,40,000 1,40,000

11 Flat Bed Steam Iron Press with Vacuum Table

4 75,000 3,00,000

12 Zig Zag Embroidery Machine 1 45,000 45,000

13 Generator Set 30 KVA 1 1,00,000 1,00,000

14 Wash Room Trolleys 4 10,000 40,000

Total 25,57,500

15

Financial Aspects

• Other Fixed Assets

• Total fixed capital = Rs. 28,45,000

S.No. Description Cost(Rs.)

1 Erection and installation 2,17,500

2 Office Furniture 40,000

3 Pre-operative expenses 30,000

Total 2,87,500/

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Financial aspects

• Working Capital (per month)

a) Staff and labour (per month)

S.No. Personnel No. Rate(Rs.) Amount(Rs.)

1 Marketing Manager 1 10000 10,000

2 Sales Representative 1 6000 6,000

3 Accounts Officer 1 5000 5,000

4 Clerk/ Store-Keeper 2 3500 7,000

5 Electrician 1 3500 3,500

6 Peon/Watchman 2 3000 6,000

Total 37,500

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Financial Aspects

Production Staff

7 Production Manager 1 10000 10,000

8 Cutting Master 1 8000 8,000

9 Skilled Workers 55 3500 1,92,500

10 Pressman 4 3500 14,000

11 Unskilled Workers 6 3000 18,000

Total 2,42,500

Perquisites @ 20% on the total salary 56,000

Grand Total 3,36,000

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Financial Aspects

b) Raw Material (per month)

S.No. Item Description Qty.Unit Rate(Rs.) Value(Rs.)

1 Cotton Fabric Shirts (Mtrs.) 16500 80 13,20,000

2 Blended Fabric for Trousers(Mtrs.) 10000 150 15,00,000

3 Trims and Embellishments (Nos.) 7500 15 1,12,500

4 Sewing Thread (Mtrs.) 15000 LS 1,23,750

5 Washing Detergents LS 5,000

6 Packing Material (Nos.) 15000 3 45,000

Total 31,06,25019

Financial Aspects

c) Utilities (per month)

1) Electricity Rs. 24,000

2) Water charges Rs. 2,000

3) Fuel for Generator Rs. 5,000

Total Rs. 31,000

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Financial Aspects

d) Other Contingent Expense(per month)

S.No. Contingent Expense Amount(Rs.)

1 Rent 24,000

2 Advertisement & Publicity 3,000

3 Postage & Stationery 1,000

4 Repair & Maintenance 2,000

5 Transport/Travelling charges 5,000

6 Telephone Bills 2,000

7 Miscellaneous Expenses 2,000

Total 39,00021

Financial Aspects

e) Total Recurring Expenses (per month)

1) Staff & Labour Rs. 3,36,000

2) Raw Material Rs. 31,06,250

3) Utilities Rs. 31,000

4) Other Contingent Expenses Rs. 39,000

Total Rs. 35,12,250

f) Total working capital for 3 months

= 3 × 35,12,250 = Rs. 1,05,36,75022

Financial Aspects

• Total Capital Investment

1. Machinery & Equipment Rs. 28,45,000

2. Working capital(3 months) Rs. 1,05,36,250

Total Rs. 1,33,81,750

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Source of Finance

• Bank Name – SBI

• Principal Amount – Rs. 1,07,05,400

• Rate of Interest – 14.10 % p.a.

• Loan Tenure – 15 years

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Financial Analysis

1) Cost of Production (p.a.)

S.No. Description Amount(Rs.)

1 Recurring Expenses 4,10,67,000

2 Depreciation on Machinery @ 10% 2,39,250

3 Depreciation on Office Furniture & other fixed assets @ 20%

8,000

4 Interest on Total Investment @ 16% 20,97,880

Total 4,34,12,130

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Financial Analysis

2) Turn Over(p.a.) by sales

3) Profit(per year)Profit = Turn over – Cost of production

= 4,77,00,000 - 4,34,12,130= Rs. 42,87,870

Product Qty Rate/Piece(Rs.) Value(Rs.)

Gents Shirts 90000 210 1,89,00,000

Gents Trousers 90000 320 2,88,00,000

Total 4,77,00,000

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Financial Analysis

4) Taxation

a) Income tax calculation : Rs. 1,00,000/- deduction under section 80(C) INCOME TAX ACT for capital repayment. Taxable Income: Rs. 42,87,870 - Rs. 1,00,000 = Rs. 41,87,870

b) Income above the Rs. 10,00,000 : Taxation rate = Rs. 30000 + 30 % of Amount Exceeding Rs. 10,00,000

c) Amount Exceeding Rs. 10,00,000 : Rs. 31,87,870

d)Tax Amount : 30 % × 3187870 = Rs. 9,56,361

e) Education Cess : 3 % of Income tax = Rs. 28690.83

f) Total Tax Payable : Rs. 10,15,051.8327

Financial Analysis

• Net Profit

= Total Profit – Tax Amount

= Rs. 42,87,870 - Rs. 10,15,051.83

= Rs. 32,72,818.17

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Profit Analysis• Profit on sales

• Rate Of Return on Total Capital Investment

ROR = (Total net profit / Total capital Investment) × 100

= (3272818.17 / 13381750) × 100

= 24.45 %

% Profit = (Total net Profit / Total Turn over) × 100

= (3272818.17 / 47700000) × 100

= 6.86 %

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Name & Address of the Machinery & Equipment Supplier

• Paras Special Machine Co.,Madhopur Kucha No. 7,Rohan Road, Ludhiana.

• Mehala Machines India Limited,C-62, Okhla Industrial Area, Phase-1,New Delhi-110020.

• Vijay Sewing (P) Ltd.,17-D, Everest House, 46-C,Chowringhee Road, Kolkata.

• Apparel & Leather Techniques Pvt. Ltd.,Kaikondanahalli, Near Bellaandur Gate,Bangalore-560035. 30

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