Readymade Garment - 50 Machines

PROJECT REPORT
OF
READYMADE GARMENTS
M/S. REVANSIDDHA INDUSTRIES
-: Prepared by:-
SHREYANS TEJPAL SHAH

Chartered Accountants
127/2, Rockel Lane,

Vakharbhag, Sangli
Tel: (0233) 2623625, 2622536
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
8.
Education & Experience
14.00 Lacs
Bank Loan
40.00 Lacs
Total
54.00 Lacs
: B. A. & Diploma in Fashion Designing

Experience of 1 year as trainer in Fashion
Designing Institute.
Project Report of M/s. Revansiddha Industries, prepared by CA Shreyans Tejpal Shah.
PROJECT REPORT
OF
READYMADE GARMENTS
M/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. Its
contribution 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 acceptance
in 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.
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 of
MIDC 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: -
1. Sewing Machines
2. Industrial Garment Press / Iron
3. Cutting Machines
4. Other Tools
5. 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
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 electrical
equipment so as to ensure minimum power consumption.
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
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 weeks
8.
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.
*****
PROJECT REPORT
OF
GARMENTS MANUFACTURING
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 M/s. Revansiddh Industries, prepared by CA Shreyans Tejpal Shah.
DEPRECIATION :
Building
10%
3.20
Machinery
20%
6.00
9.20
CAPACITY
Products
Multiple Products
Number of Machines
50
Installed Capacity
(17 Shirts per m/c per shift)
750 Nos / Day
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
Labour
Qty
Salary
Month
Rs. In Lacs
Official
6500.00
12
1.56
Marketing
6500.00
12
1.56
Supervisor
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

Total Cost
45000.00 Units
@ 7.10
3.20 Lacs
PROFITABILITY STATEMENTS
in Lacs
Jobwork Charges
[-] Consumables purchases @ 5%
Labour
108.00
5.40
51.66
Mfg. Exps @ 30000 p.m.
3.60
Electricity
3.20
Repair & Maintenance @ 5 %
3.40
Depreciation
9.20
76.46
GROSS PROFIT
31.55
[-] Interest on T. L.
6.88
Interest on C.C.
1.65
Admn Exps
2.40
10.93
Net Profit Bef. Tax

[-] I. Tax provision @
76.46
10.93
20.62
30%
Net Profit After I.Tax prov.
6.19
14.43
Add Depreciation
9.20
CASH ACCRUALS
23.63
Loan Repayment
10.00
D. S. C. R.
1.81
PROFITABILITY STATEMENT
in Lacs
YEAR
II
III
IV
80%
108.00
85%
114.75
85%
117.05
90%
123.93
90%
126.41
5.40
5.74
5.91
6.26
6.44
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
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
20.62
25.89
27.43
32.13
33.07
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
1.81
2.02
2.11
2.40
2.56
Utilization %
Sales
[-] Consumables purchases
Labour
Gross Profit
Net profit Before I. Tax prov.

[-] I.Tax provision.
D.S.C.R.
Average D.S.C.R.
2.18
INTEREST SCHEDULE :
in Lacs
PARTICULARS
T.L.
INTEREST
C. C.
13.75%
BALANCE
50.00
[-] Ist Yr. Installment
10.00
BALANCE
40.00
[-] IIst Yr. Installment
10.00
BALANCE
30.00
[-] IIIrd Yr. Installment
10.00
BALANCE
20.00
[-] IVth Yr. Installment
10.00
BALANCE
10.00
[-] Vth Yr. Installment
10.00
BALANCE
0.00
INTEREST
13.75%
12.00
6.88
0.00
1.65
12.00
5.50
0.00
1.65
12.00
4.13
0.00
1.65
12.00
2.75
0.00
1.65
12.00
1.38
0.00
12.00
1.65
DEPRECIATION SCHEDULE
in Lacs
PATICULARS
Machinery
Building
20%
10%
30.00
32.00
6.00
3.20
24.00
28.80
4.80
2.88
19.20
25.92
3.84
2.59
15.36
23.33
3.07
2.33
12.29
21.00
[-] 5th Yr. Depr.
2.46
2.10
WDV
9.83
18.90
OP.BALANCE
[-] 1st YR. Depr.
W.D.V.
[-] 2nd Yr. Depr.
[-] 3rd YR. Depr.

W.D.V.
[-] 4th Yr. Depr.
WDV
Total Depr.
9.20
7.68
6.43
5.40
4.56
CASH / FUNDS FLOW STATEMENT

in Lacs
I
II
III
IV
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
107.01
25.81
25.63
27.90
27.71
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
0.00
0.00
0.00
0.00
0.00
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
Sources of Funds
Total Application (A)

Dispossion of Funds
Pre-op Expenses
Others (specify)
Total Dispossion (B)
PROJECT BALANCE SHEET

in Lacs
I
II
III
IV
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
87.81
95.93
105.13
117.62
130.77
Gross Block
68.00
68.00
68.00
68.00
68.00
Depreciation
9.20
16.88
23.31
28.72
33.27
58.80
51.12
44.69
39.28
34.73
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
Liabilities
Total
Assets :
Net Block
Capital WIP
Note: Addition in the gross block denotes proposed expansion in future.
BREAK EVEN POINT ANALYSIS

in Lacs
I
II
III
IV
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
10.33
10.98
11.53
12.20
12.81
7.52
8.00
8.30
8.81
9.14
33.93
32.16
30.38
29.17
27.88
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
41.33
43.91
46.11
48.82
51.26
1.88
2.00
2.07
2.20
2.28
51.80
55.04
57.59
60.98
63.80
56.20
59.71
59.46
62.95
62.61
0.52
0.52
0.51
0.51
0.50
65.20
61.81
59.81
57.43
56.30
60.37%
53.87%
51.10%
46.34%
44.54%
Fixed Costs
Wages / Salaries : Fixed : 20 %

Utilities : Fixed : 20 %
Variable Costs
Salaries & Wages : Variable : 80%

Utilities : Variable : 80%
Contribution
P/V ratio (contribution to sales)
Break even sales Lacs
Break Even %

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PROJECT REPORT

SHREYANS TEJPAL SHAH

127/2, Rockel Lane,

HIGHLIGHTS OF THE PROJECT

Name of the proprietor

: MRS. PADMINI PANDURANG GAVADE

: Plot No. B 21, MIDC Jath, Dist. Sangli.

: Proprietorship, M/s. Revansiddha Industries

: Readymade Garments Manufacturing

Education & Experience

: B. A. & Diploma in Fashion Designing

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

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

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

PROJECT COST DETAILS:

B. Plant & Machinery

C. Electrification & Installation

D. Misc. & Other Assets

B. Bank Term Loan

TECHNICAL ASPECTS: METHOD OF PRODUCTION:

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

WASTE AND EFFLUENT:

Selection of site/working shed / Application

Acquisition of Plot of Land

Preparation of feasibility report

Arrangement of finance (Term loan and

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

Construction of required building

Procurement of machinery and equipment

Plant erection and electrification

Arrangement of raw material including

Selection of market channel

Miscellaneous works like power/water

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

Land & Building

Plant & Machinery

Working Capital Requirement

Stock in Trade (Work in Progress)

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

750 Nos / Day

Number of working days

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

Consumption for 12 Hrs

Consumption Per Year

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

Mfg. Exps @ 30000 p.m.

Repair & Maintenance @ 5 %

Net Profit Bef. Tax

Net Profit After I.Tax prov.

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

Other Material Exps

Repair & Maintenance

Net profit Aft. I. Tax prov

Added Back Depreciation

Net profit Before I. Tax prov.

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

[-] Ist Yr. Installment

[-] IIst Yr. Installment

[-] IIIrd Yr. Installment

[-] IVth Yr. Installment

[-] Vth Yr. Installment

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

[-] 5th Yr. Depr.

[-] 3rd YR. Depr.