Readymade Garment - 50 Machines

7/25/2019 Readymade Garment - 50 Machines

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PROJECT REPORT

OF

RE DYM DE G RMENTS

M/S. REVANSIDDHA INDUSTRIES

-: Prepared by:-

SHREYANS TEJPAL SHAH

Chartered Accountants

127/2, Rockel Lane,

Vakharbhag, Sangli

Tel: (0233) 2623625, 2622536


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Project Report of M/s. Revansiddha Industr ies, prepared byCA Shreyans Tejpal Shah.

HIGHLIGHTS OF THE PROJECT

1. Name of the proprietor : MRS. PADMINI PANDURANG GAVADE

2. Proposed Location : Plot No. B 21, MIDC Jath, Dist. Sangli.

3. Constitution : Proprietorship, M/s. Revansiddha Industries

4. Nature of Activity : Readymade Garments Manufacturing

5. Status : Land in Possession

6. Cost of Project : 54.00 Lacs

7. Means of Finance : Capital 14.00 Lacs

Bank Loan 40.00 Lacs

Total 54.00 Lacs

8. Education & Experience : B. A. & Diploma in Fashion Designing

Experience of 1 year as trainer in Fashion

Designing Institute.


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PROJECT REPORT

OF

READYMADE GARMENTSM/S. REVANSIDDHA INDUSTRIES

_________________________________________________________________________

PREFACE: -

Readymade garment industry has occupied a unique place in the industrial scenario of our

country by generating substantial export earnings and creating lot of employment. Itscontribution to industrial production, employment and export earnings are very significant. This

industry provides one of the primary necessities of life. The employment provided by it is a source

of livelihood for millions of people.

It also provides maximum employment with minimum capital investment. Since this

industry is highly labor-intensive, it is ideally suited to Indian condition. This project report

is prepared for the manufacture of gents shirts, gents trousers as they find vast acceptancein local and international markets. Such establishments can be easily set up by any person having

the knowledge of cutting and stitching operations.

DEMAND AND SUPPLY SCENARIO: -

Readymade garments are the choice of urban people. It is also gaining vast acceptance in

semi urban and rural areas. The huge charges made by tailors and delays in delivery have made

people to switch over to readymade garments. In domestic market and export market, it has

made spectacular progress in the last decade.

This industry is becoming very vibrant and lot of foreign investment pouring in this

industry because of low risk and high earning nature of this industry. As these products are

fashion oriented, entrepreneurs should always keep in mind the changing fashion styles.

Considering its advantageous position, it is assumed that there will be no constraint in marketing

of gents readymade garments.


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CONSTITUTION OF THE FIRM: -

This project is proposed as a Proprietorship of Mrs. Padmini Pandurang Gavade in the trade

name as M/s. Revansiddha Industries. She is a dynamic woman entrepreneur and personally shall

be looking after the business. Initially she has decided to start the business as a job-work activity.

In the later stages, gradually, the business shall be shifted to own manufacturing.

REGISTRATION DETAILS:

Being a proprietorship firm, there is no registration required regarding the constitution of

the firm. Other statutory registrations such as VAT, etc. shall be taken afterwards.

UNIT REGISTRATION DETAILS:

This project shall be a small scale unit as per GR of Govt. of Maharashtra and MSME Act.

Registration under MSME Act as a SSI is in the process and shall be procured soon.

LAND & BUILDING:

It has been decided to start this project in own land at Plot No. B 21, MIDC Jath, Dist.

Sangli. The said location is well connected with transportation facilities as it is located very nearby

to the highway. So no problem of transportation and this location is situated at D+ Zone as per

notification by Government, making the project eligible for the Assistance Subsidy from the State

Government as well as Central Government.

The building required for the project is to be constructed adhering to the guidelines ofMIDC and as per the required specifications of the project. The required building shall admeasure

to approx. 4000 Sq. Ft., and total cost of Land & Building shall be approx. 32 Lacs.

MACHINERY:

This project is basically skill based and labour oriented business. The required machinery

can be enumerated as follows: -


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1. Sewing Machines

2. Industrial Garment Press / Iron

3. Cutting Machines

4.

Other Tools5. Designing & Embroidery Machine (if needed)

6. Computer and printer.

PROJECT COST DETAILS:

In Lacs

A. Land and Building 32.00

B. Plant & Machinery 30.00

C. Electrification & Installation 03.00

D. Misc. & Other Assets 03.00

Total 68.00

MEANS OF FINANCE:

This project shall be financed in following manner:

In Lacs

A. Capital contribution 18.00

B. Bank Term Loan 50.00

Total 68.00

TECHNICAL ASPECTS: -

METHOD OF PRODUCTION:

The process includes the following steps:

PROCUREMENT OF FABRIC:

Dyed/bleached/printed cotton/synthetic fabrics as per demand are to be procured from

the open market. The fabric will be checked by laying on the inspection table against light before


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cutting so that unevenness in color/shade or any other fault, if any visible in the fabric are

eliminated.

CUTTING AND STITCHING:The checked fabric is placed on the cutting table in layers and then the different

parts of the respective garments are marked by a chalk as per different sizes. Cutting is

carried out by the cutting machine. Stitching is carried out for individual portion of the garments

by skilled workers with the help of over lock, lock stitch machines etc.

SINGEING, CHECKING, PRESSING AND PACKING:

All garments are charged into singeing machine containing mild detergent and

enzymes and singeed for 4 hours in order to eliminate dirt and stains acquired during the

manufacturing process. After singeing, the garments are hydro extracted to eliminate excess

water and after this, these garments are dried in tumbler dryer. End checking is done before

pressing and packing on the checking table so that any fault in the piece may be eliminated

and protruding threads eliminated. The individual pieces are pressed by steam presses to

eliminate any wrinkle marks and packed in the carton boxes.

SPECIFICATIONS AND STANDARD:

The quality of garments primarily depends on quality of fabric used. Therefore, care

must be taken while purchasing fabrics to ensure good color, fastness properties, uniformity

in shade etc. Generally garments are made as per customers specification in respect of size,

design and fashion.

EFFECTS ON ECO SYSTEM:

The method of production does not generate pollution. The usage water is limited only

towards the domestic purposes and drinking. The effluent generated out of the same, shall be

utilized for gardening purposes.

POWER SAVING:

Maximum care should be taken while selecting the machinery and other electricalequipment so as to ensure minimum power consumption.


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WASTE AND EFFLUENT:

There is no chemical or water processes involved in this unit. Thus, there will be no effluent

or wastage generation. Water is to be used for domestic purposes only and the wastage of water

shall be utilized for gardening purposes.

PROJECT HYPOTHESIS (ASSUMPTIONS)

1. This project is based on 300 working days in a year.

2. This industry is labour intensive, thus working efficiency is considered at 80% in the initial

stages.

3. Costs of machinery and equipment/material mentioned refer to a specific make and

approximately to those prevailing at the time of preparation of this project.

4. Installation and electrification cost is taken as a percentage of cost of machinery

and electrification.

5. Non-refundable deposits, project report cost, trial production, security deposits with

Electricity Board are taken under preoperative expenses.

6. Depreciation has been considered:

(a) On Building @ 10%

(b) On plant and machinery @ 20%

TIME SCHEDULEP: -

Implementation period in months for executing this project in stage-wise is given

below:

Note: Considering that some of the above activities may be overlapping, the project

implementation will take a total period of six months approximately for starting the production.

Sr. No. Activity Period

1. Selection of site/working shed / Application 1 Week

2. Acquisition of Plot of Land 2 months

3. Preparation of feasibility report 1 month

4. Arrangement of finance (Term loan and


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Working capital) 1 month

5. Construction of required building 6 months.

6. Procurement of machinery and equipment 1 month

7. Plant erection and electrification 2 weeks8. Arrangement of raw material including

Packaging material etc. 1 month

9. Recruitment of manpower 1 month

10. Selection of market channel 1 month.

11. Miscellaneous works like power/water

Connection etc. 2 months.

FINANCIAL ANALYSIS:

Attached separately.

* * * * *


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COST OF PROJECT in Lacs

Land & Building 32.00

Plant & Machinery 30.00

Elect Installation 3.00

Other Assets 3.00

68.00

MEANS OF FINANCE :

Promoters 18.00

Bank T. L. 50.00

68.00

Working Capital Requirement in Lacs

Stock in Trade (Work in Progress) 6.37

Debtors / Receivables 9.00

15.37

Bank CC 12.00

Margin 3.37

PROJECT REPORT

OF

GARMENTS MANUFACTURING

Project Report of M/ s. Revansiddh Industries, prepared by CA Shreyans Tejpal Shah.


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DEPRECIATION :

Building 10% 3.20

Machinery 20% 6.00

9.20

CAPACITY

Products Multiple Products

Number of Machines 50

Installed Capacity 750 Nos / Day

(17 Shirts per m/c per shift)

Number of working days 300

Utilization 1 st year 80%

Annual production 180000 Nos

Job-Work Charges Qty/Nos Rate Total

180000.00 60.00 108.00

108.00

INTEREST :

Term Loan 13.75% 50.00 Lacs 6.88

Cash Credit 13.75% 12.00 Lacs 1.65

6.88



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Labour

Qty Salary Month Rs. In Lacs

Official 2 6500.00 12 1.56

Marketing 2 6500.00 12 1.56

Supervisor 6 7000.00 12 5.04

Skilled 55 5500.00 12 36.30

Unskilled 15 4000.00 12 7.20

51.66

Power / Electricity

Load Connected 30.00 KW

Maximum Demand 30.00 KW

Consumption for 12 Hrs 150.00 Units

Consumption Per Year 45000.00 Units

Total Cost @ 7.10 3.20 Lacs



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PROFITABILITY STATEMENTS

in Lacs

Jobwork Charges 108.00

[-] Consumables purchases @ 5% 5.40

Labour 51.66

Mfg. Exps @ 30000 p.m. 3.60

Electricity 3.20

Repair & Maintenance @ 5 % 3.40

Depreciation 9.20

76.46 76.46

GROSS PROFIT 31.55

[-] Interest on T. L. 6.88

Interest on C.C. 1.65

Admn Exps 2.40

10.93 10.93

Net Profit Bef. Tax 20.62

[-] I. Tax provision @ 30% 6.19

Net Profit After I.Tax prov. 14.43

Add Depreciation 9.20

CASH ACCRUALS 23.63

Loan Repayment 10.00

D. S. C. R. 1.81



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in Lacs

YEAR I II III IV V

Utilization % 80% 85% 85% 90% 90%

Sales 108.00 114.75 117.05 123.93 126.41

[-] Consumables purchases 5.40 5.74 5.91 6.26 6.44

Labour 51.66 54.89 57.63 61.02 64.07

Other Material Exps 3.60 3.83 3.94 4.17 4.30

Electricity 3.20 3.39 3.50 3.70 3.81

Repair & Maintenance 3.40 3.61 3.68 3.90 3.98

Depreciation 9.20 7.68 6.43 5.40 4.56

Total --> 76.46 79.14 81.10 84.46 87.17

Gross Profit 31.55 35.61 35.95 39.47 39.24

[-] Interest on T. L. 6.88 5.50 4.13 2.75 1.38

Interest on C. C. 1.65 1.65 1.65 1.65 1.65

Admn Exps 2.40 2.57 2.75 2.94 3.15

10.93 9.72 8.52 7.34 6.17

Net profit Before I. Tax prov. 20.62 25.89 27.43 32.13 33.07

[-] I.Tax provision. 6.19 7.77 8.23 9.64 9.92

Net profit Aft. I. Tax prov 14.43 18.13 19.20 22.49 23.15

Added Back Depreciation 9.20 7.68 6.43 5.40 4.56

Cash Accruals 23.63 25.81 25.63 27.90 27.71

Loan Repayment 10.00 10.00 10.00 10.00 10.00

D.S.C.R. 1.81 2.02 2.11 2.40 2.56

Average D.S.C.R. 2.18

PROFITABILITY STATEMENT



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in Lacs

PARTICULARS T.L. INTEREST C. C. INTEREST

13.75% 13.75%

BALANCE 50.00 12.00

[-] Ist Yr. Installment 10.00 6.88 0.00 1.65

BALANCE 40.00 12.00

[-] IIst Yr. Installment 10.00 5.50 0.00 1.65

BALANCE 30.00 12.00

[-] IIIrd Yr. Installment 10.00 4.13 0.00 1.65

BALANCE 20.00 12.00

[-] IVth Yr. Installment 10.00 2.75 0.00 1.65

BALANCE 10.00 12.00

[-] Vth Yr. Installment 10.00 1.38 0.00 1.65

BALANCE 0.00 12.00

INTEREST SCHEDULE :



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in Lacs

PATICULARS Machinery Building Total Depr.

20% 10%

OP.BALANCE 30.00 32.00

[-] 1st YR. Depr. 6.00 3.20 9.20

W.D.V. 24.00 28.80

[-] 2nd Yr. Depr. 4.80 2.88 7.68

19.20 25.92

[-] 3rd YR. Depr. 3.84 2.59 6.43

W.D.V. 15.36 23.33

[-] 4th Yr. Depr. 3.07 2.33 5.40

WDV 12.29 21.00

[-] 5th Yr. Depr. 2.46 2.10 4.56

WDV 9.83 18.90

DEPRECIATION SCHEDULE



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in Lacs

I II III IV V

Sources of Funds

Cash Accruals 23.63 25.81 25.63 27.90 27.71

Increas in Capital 21.37 0.00 0.00 0.00 0.00

Increase in Term Loan 50.00 0.00 0.00 0.00 0.00

Increase in Bank Borrowing 12.00 0.00 0.00 0.00 0.00

Unsecured 0.00 0.00 0.00 0.00 0.00

Depreciation 0.00 0.00 0.00 0.00 0.00

Others (specify) 0.00 0.00 0.00 0.00 0.00

Total Application (A) 107.01 25.81 25.63 27.90 27.71

Dispossion of Funds

Pre-op Expenses 0.00 0.00 0.00 0.00 0.00

Increase in Capital Expenditure 68.00 0.00 0.00 20.00 50.00

Decrease in Term Loan 10.00 10.00 10.00 10.00 10.00

Increase in Working Capital 15.37 2.00 2.00 2.00 2.00

Others (specify) 0.00 0.00 0.00 0.00 0.00

Total Dispossion (B) 93.37 12.00 12.00 32.00 62.00

Opening Balance 0.00 13.63 27.44 41.07 36.97

Net Surplus (A-B) 13.63 13.81 13.63 -4.10 -34.29

Closing Balance 13.63 27.44 41.07 36.97 2.67

CASH / FUNDS FLOW STATEMENT



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in Lacs

I II III IV V

Liabilities

Capital 21.37 21.37 21.37 21.37 21.37

Reserve & Surplus 14.43 32.56 51.76 74.25 97.40

Unsecured 0.00 0.00 0.00 0.00 0.00

Term Loans 40.00 30.00 20.00 10.00 0.00

Bank Borrowing for W.C. 12.00 12.00 12.00 12.00 12.00

Total 87.81 95.93 105.13 117.62 130.77

Assets :

Gross Block 68.00 68.00 68.00 68.00 68.00

Depreciation 9.20 16.88 23.31 28.72 33.27

Net Block 58.80 51.12 44.69 39.28 34.73

Capital WIP 0.00 0.00 0.00 20.00 70.00

Current Assets 15.37 17.37 19.37 21.37 23.37

Cash & Bank balance 13.63 27.44 41.07 36.97 2.67

87.81 95.93 105.13 117.62 130.77

0.00 0.00 0.00 0.00 0.00

Note: -

Addition in the gross block denotes proposed expansion in future.

PROJECT BALANCE SHEET



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in Lacs

I II III IV V

Fixed Costs

Depreciation 9.20 7.68 6.43 5.40 4.56

Interest on term loan 6.88 5.50 4.13 2.75 1.38

Wages / Salaries : Fixed : 20 % 10.33 10.98 11.53 12.20 12.81

Utilities : Fixed : 20 % 7.52 8.00 8.30 8.81 9.14

33.93 32.16 30.38 29.17 27.88

Variable Costs

Raw Material & Consumables 5.40 5.74 5.91 6.26 6.44

Power & Fuel 3.20 3.39 3.50 3.70 3.81

Salaries & Wages : Variable : 80% 41.33 43.91 46.11 48.82 51.26

Utilities : Variable : 80% 1.88 2.00 2.07 2.20 2.28

51.80 55.04 57.59 60.98 63.80

Contribution 56.20 59.71 59.46 62.95 62.61

P/V ratio (contribution to sales) 0.52 0.52 0.51 0.51 0.50

Break even sales Lacs 65.20 61.81 59.81 57.43 56.30

Break Even % 60.37% 53.87% 51.10% 46.34% 44.54%

BREAK EVEN POINT ANALYSIS

Readymade Garment - 50 Machines

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