Project Profile on Readymade Garments

Project Profile on Readymade Garments

Promoter

PROJECT AT A GLANCE 1. Name and Address of the Unit: 2. Promoter : 3. Project : Making Unit Readymade and Designer Garments

4. Type 5. Management 6. Category 7. Location 8. Total Project Cost 9. Fixed Capital 10. Working Capital 11. Equity(20 %)

: :

Micro Enterprise Proprietary : : 9.63 L 6.7 L 2.92 L 1.93 L : 1.93 L

: : : :

12. Margin Money Grant(20%) 12. Employment 13. DSCR 14. Break Even Point : : :

17 Nos 3.90 42.67% BIO DATA

1. Full name and address 2. Name of Panchayath & Taluk 3. Occupation 4. Name of Father/Husband 5. Age 6. Sex 7. Nationality 8. Category 9. Academic Qualification : : : : : : : :

Indian Minority SSLC : Proprietor

10. Functional Responsibilities in the unit

Signature

1.

Introduction

After food and shelter, clothing is the most essential human need. It was earlier to wear individually tailored dresses, then it became fashion to wear readymade garments. It is easier to go to a shop and select what she/he likes and wear it right away. During readymade era, there is no need to go to a shop to select a shirt piece and go to another shop to get it tailored and wait for the clothing. Readymade garments are bulk manufactured and hence it is cheaper than individually tailored ones. But now people find that, many people wear the same clothing, since readymade dresses are made alike. Now fashion conscious people started turned to designer garments. By realising the potential of both areas, this project aims to establish a readymade garments as well as an designer garments unit for the fashion sensitive people. The readymade garment industry is on of the channel of Indias textile industry which dates back to the middle of 19th century. The textile industry is a leading industry in the country. There are mainly two types of clothing, one is natural and the other is synthetic. Cotton, Silk, Wool etc. comes under natural clothing and Polyester, Nylon etc. comes under synthetic clothing. The overall demand of clothing is gone up since the increase in number of middle and upper middle class people who are very keen in their dressing habits. Compared to any other state in the country, Keralite purchases more clothing for their personal needs. The increasing level of travel habits of the people has in turn created demand for occasional and seasonal clothing. The development in all spheres of life in general especially in educational, industrial and commercial sectors made the demand for garments manifold which can be evident from the fact that there are a lot of garment shops in every nuke and corner of even remote

places. Very big players are setting up garment shops in almost every town. Being in the field for a long time, the promoter studied various aspects of the industry and now confidently came forward to establish a garment unit. Moreover she is setting up a designer garment unit, which is a value addition to the readymade industry.

2.

Promoter

The promoter of the unit is ............. He/She is aged ..... years and is an enterprising and hard working Man/women. He/She is also well experienced in the industry. He/She has specialized in the Designer Churidar making and is well known for it in the surrounding areas. She is capable of managing the unit. His/Her Father/husbands long experience in the industry and contacts with a lot of customers and various shops make her very confident of running and managing the unit profitably. He/She is a dynamic person with a greater aspiration. 3. Location, Land and Building The unit intended to start in a rented building at ........ town . There is all necessary amenities for locating the unit. There will not be any problem for getting required power and communication facilities and is accessible. Therefore the location is highly suitable for the unit. The promoter already entered into an agreement with owner of the building for occupying the premises. 4. Scope

The conventional tailoring unit can not cater to the need of people who have no patience to go here and there to select a cloth piece and wait for long to get it tailored to the desired size and shape. Now readymade garments are preferred to individually tailored ones due to its cost effectiveness and time saving. We can straight away purchase it and is ready to wear. Business, industry, service sector and growing rapidly and demand for clothing are increasing manifold. Numerous industrial, educational, commercial, service and financial institutions are located in and around the unit. There are a great number of garment shops are functioning in the town and nearby places and this unit can sell their products through these shops also. Hence one can easily say the scope of the unit is beyond doubt.

5.

Plant and machinery

The details of plant and machinery are enlisted in the economics of the project. They include embroidery machines, sewing machines, overlock machines, button hole machine, collar fusing machine, furniture etc. The proposed machineries are selected from reputed machinery makers with utmost care. 6. Manufacturing Process

Different types of cloths are selected keeping in mind with the current trend of the industry. The promoters long time experience in the industry will make her able to keep up with the latest trend. She and her team can cut them, stitch them and finish them to latest fashion dresses which can easily sell. She can even make designer garments to the taste of special people and for special occasions. 7. Raw Materials

The raw materials are various clothing and sewing materials. They are easily available and care will be taken for the selection of the same. 8. Staff and Labour

Skilled and semi skilled workers are required for the smooth functioning of the unit. They can be arranged locally. The promoter herself has a lot of experience in the field and is capable of managing the staff and labour force of the unit. The total staff strength is detailed in economics of the project. The unit will be operated in on shift. 9. Power

Electricity works as the source of power. The promoter has already sought the power allocation from KSEB to the proposed building. The total requirement of the power is 8 HP single phase.

10.

Marketing

The marketing of the product is the decision making factor of the existence of any unit. Considering this as the key factor, the promoters vast experience in the industry will do a major role. Her and her husbands wide spread contacts can assure a stable market for the products. There are a great number of garments shop in the town and nearby areas through which the product can be sold in addition to direct sales through own shop. A wide potential market comes around the unit. Hence a sound market is assured for the products. Utmost care will be taken for the change of fashion and trend since they decide the sale of readymade garments day to day. 11. Source of Finance

The total outside fund is raised by way of loan to the tune of Rs.6.7 Lakhs from Bank as Term loan, and Rs.2.92 Lakhs as working capital loan. Rs.1.93 Lakhs is raised by the promoter herself. She is financially sound and is able to raise fund according to the need. The term loan will be repaid within 5 years. 12. Conclusion

The promoter of the unit is a dynamic and result oriented person. The project has enough scope in all over Kerala/India and nearby areas as the need for garments is increasing day by day. The sufficient orders for the product can be achieved since the promoter is working in the same line for a last several years. The demand for products can be increased by maintaining a distinct quality of the product. The unit can provide direct and full time employment to 16 persons and can provide indirect employment too. With the financial assistance, the promoter will be able to establish the unit in scheduled time. The promoter plans to start the unit under MSME sector and can get subsidy to the tune of 20% under WIS (Women Industries Scheme) of the Industries Department. On revealing the various aspect of the project and studying the financial and technical features if the scheme, it can be easily concluded that the project will be a great success.

IMPLEMENTATION SCHEDULE

Sl.No. needs) 1. 2. 3. 4. 6. 7.

Activity

Period of Completion (Change as per Aug 2010 Sept 2010 Oct 2010 Nov 2010 Dec 2010 Dec2010

Sanction of loan Procurement of machinery Erection & electrification Government Approvals Procurement of materials Commercial production

ECONOMICS OF THE PROJECT 13. Land and Building : Rented @ Rs. 900 per Month

14.

Plant and Machinery

The following machineries are required for the smooth functioning of the proposed unit. Their respective costs as per lowest quotation including taxes are as follows:-

Sl.No Description 1 Ranew Embroidery foot+ power motor 2 Feiyue Button hole machine & button fixing machine 3 Feiyue collar fusing machine 4 Feiyue cutting machine 5 Ranew overlock machine 6 Merrit 8208 foot + power motor auto oil lubricant 7 Scissors, Accessories etc. Sub Total(1) 8 Cash cuboard 9 Stool 10 Cutting table 11 Shelf with glass front 210 sq.ft 12 Ironing - Table Sub Total(2) Grant Total

Qty. Price(Rs) 2 28000 1 1 1 1 10 1 20 1 1 1 156000 140000 16120 8000 200000 2000 550120 15000 16000 14500 49500 10500 105500 655620

Suppliers Naidu and Sons,Attingal -do-do-do-do-do-do-

15.

Pre Operative Expenses Pre operative expenses such as Electrification, Installation etc.

costs : : Rs. 15,000/-

16. 17.

Total Fixed Capital

Rs.6,70,620/=========

Raw Material required per month

Various clothing and sewing materials for Churidar, Nighty, Shirt etc. for one month costs : Rs.2,50,000/18. Staff and Labour per moth 1 No. 14 Nos. 2 Nos. ______ 17 Rs.5000/Rs.49000/Rs.6000/__________ Rs.60,000/-

Manager Tailors Helper/Trainee Total 19.

Other Expenses per Month : : : Rs.1500

Electricity charges Traveling expenses Marketing and Selling Postage and telephone Rent Repair and maintenance :

Rs.1000 Rs.5000 : Rs.1600

Rs.900 : Rs.500

Other unforeseen expenses Total 20. Working capital

: :

Rs.500 ____________ Rs.11,000/-

Stock of Raw materials 1/2 month : Raw materials in process 3 days Stock of finished goods 2 days Credit sale 5 days One month working expenses Total 21. Total Capital Investments : :

Rs.1,25,000/Rs.30,000/: : Rs.36,000/Rs.90,000/-

: Rs.11,000/_____________ Rs.2,92,000/============

Land and Building Plant and machinery Pre- Operative Expenses Working capital Total Project Cost : : :

Rented

Rs.6,55,620/: Rs.15,000/-

Rs.2,92,000/_____________ Rs.9,62,620/===========

22.

Source of Finance : : Rs.1,92,524/-

Promoters Contribution (20%) Term loan from Bank(less P.C& Grant)

Rs.4,0,2372/: : Rs.1,75,200/Rs.1,92,524/-

Working Capital loan from Bank(less P.C& Grant) Margin Money Grant from Industries Dept(20%)

______________ Total 23. Cost of Production per Month : : : Rs.2,50,000/Rs.60,000/Rs.11,000/: : Rs.4360/: Rs.9,62,620/=============

Raw materials Staff and Labour Other Expenses Interest on Term loan(@13%) Repayment of Term Loan Interest on Working Capital Loan(@13%) Repayment of Working Capital Loan Depreciation(@10%) Sales promotion expenses

Rs.6706/: : Rs.1898/Rs.2920/-

: :

Rs.5464/Rs.5000/____________

Total

Rs.3,47,348/===========

24.

Sales Revenue per Month

Revenue by sale of Readymade garments and Designer garments per month for the first year : Churidar Nighty Shirts 750 Nos 1000 Nos 375 Nos : : : Rs.2,25,000/Rs.80,000/Rs.93,750/________________

Total Sales

: Rs.3,98,750/==============

25.

Profitability : : : : Rs.51,402/Rs.6,16,824/Rs.1,28,047/Rs.4,88,777/: : 3.89 42.67 %

Profit per month Profit per year Provision for taxes Net profit Break Even Point Debt service coverage ratio

REPAYMENT CHART OF TERM LOAN

Rs. in Rupees 1 year Opening Balance Principal Repayment per year Closing Balance 402372 80474 2 year 321898 80474 3 year 241424 80474 4 year 160950 80474 5 year 80474 80474

321898

241424

160950

80474

Interest@13% Total Repayment per year

52308

41847

31385

20924

10462

132782

122321

111859

101398

90936

Depreciation of Plant and Machinery

Year Opening Balance Depreciation @ 10% Closing Balance

1 655620 65562 590058

2 590058 59006 531052

3 531052 53105 477947

4 477947 47795 430152

5 430152 43015 387137

Projected profitability statement

Rs. in Lakhs Sales Revenue Year Capacity (%) Sales Cost of Production Raw materials Staff & Labour Other Expenses Interest on T.L Repayment of T.L Interest on W.C.L Repayment of W.C.L Depreciation@10% Sales Promotion Expenses Total Cost of Production Profit per Year Taxes, Cess etc. 1 70 47.85 30.0 7.20 1.32 0.523 0.804 0.227 0.35 0.656 0.60 41.68 6.17 1.281 2 75 51.27 32.14 7.71 1.414 0.561 0.861 0.243 0.375 0.59 0.643 44.537 6.733 1.449 3 80 54.69 34.29 8.23 1.509 0.598 0.919 0.259 0.40 0.53 0.686 47.421 7.269 1.611 4 80 60.15 37.71 9.05 1.659 0.658 1.01 0.284 0.44 0.48 0.754 52.045 8.105 1.862 5 80 66.15 41.48 9.95 1.82 0.724 1.11 0.312 0.484 0.43 0.829 57.139 9.011 2.133

Net Profit

4.89

5.284

5.658

6.243

6.88

Computation of DSCR (for Ist Year)

Net Income after Tax Interest on Term Loan Depreciation Total A

= = = =

4.89 0.523 0.656 6.069

Repayment of Term Loan Total Debt Obligation Total B DSCR A/B

= = = =

0.804 0.75 1.554 3.90

BREAK EVEN ANALYSIS (Based on Ist year)

Rs. in Lakhs Sales Variable Cost Contribution Fixed Cost Break Even Point : : : 47.85 32.15 : 6.70 Fixed Cost x 100 = --------------------------Contribution = = 6.70 x 100 ----------------15.70 42.67 % 15.70

The Project is Economically viable and Technically feasible. The project is submitted for approval. Signature of Promoter