PROJECT REPORT

M/s Shiv Shakti Cloth Collection And Beauty Hub

Introduction

The readymade garment industry is considered an off-shoot of India’s Textile industry

which the dates back to the middle of 19 century. The textile industry is a significant
contributor to the economy, both in terms of its domestic share and exports. It
contributes about seven per cent to industry output, two per cent to the GDP and 15
per cent to the country's total exports earnings.. The industry can be divided in to two
segments, the natural fibre segment and the man made synthetic fibre segment. The
industry even after the introduction of power – driven machines or mechanical process
of button holding, stitching or embroidery, continued to remain labour intensive and
cheap labour is our forte.
The sector is one of the largest sources of job creation in the country, employing
about 45 million people directly. The overall demand of clothing has gone up in the
state because of increasing degree of industrialisation, effecting clothing habits. The
increasing level of communication leading to increased travel and tourism has in turn
created the demand for both seasonal and occasional clothing.

LOCATION.
The unit here mentioned will set up in a Owned building. Location plays a major role in
overall output of the unit .
There will not be any problems if the required power and communication facilities are
available. Then with out any doubt one can easily say that the land selected is very
suitable these type of units.
 MARKET POTENTIAL:
Readymade garments are the choice of urban people. It is also gaining wider acceptance in
semi-urban and rural areas. The huge charges made by tailors and delay in delivery has 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 gent’s readymade garments.

BASIS & PRESUMPTIONS:

1. This project is based on single shift basis and 330 working days in a year.

2. Since this industry is labour-intensive, the working efficiency is considered at 75%.

3. Costs of machinery and equipment/ material indicated refer to a particular make and approximately
to those prevailing at the time of preparation of this project.

4. Installation and electrification cost is taken @ 10% of cost of machinery and equipment.

5. Non-refundable deposits, project report cost, trial production, security deposits with Electricity Board
are taken under pre-operative expenses.

6. Depreciation has been considered: (a) On Building @ 5% (b)On plant and machinery @ 10% (c) On
office furniture and fixtures @ 15% (d)On other fixed assets @ 15%.

7. Interest on capital investment has been taken @ 14% per annum.

8. Minimum 16.67 % of total investment is required as margin money.

PROMOTER.
Name:SUMAN
Address: Pawan Vihar, Saharanpur,247001,U.P
Qualification : Graduate
Experience : 3 Year
LAND & BUILDING. The unit will be set up in a Owned building. It is made available on
rented basis and the rent per month is Rs. 2000. We have already considered the suitability of
the location. The power, Communication facility etc are available. Hence with out doubt one
can say that the site selected is very suitable for these types of units.

PLANT & MACHINERY. The plant & machinery are enlisted in the economics of the
project. They include sewing machines, embroidery machines, furniture, cutting table etc. The
cost of the same will be Rs. 1,25,000.00. The selected machinery can be made available from
authorized suppliers of these items.

RAW MATERIALS. The raw materials needed include fabrics of different kinds and other
sewing materials. They are easily available and care will be taken on the quality of the same.

STAFF & LABOUR. The unit will be operated in one shift. The staff and labors needed for
the unit will be selected from locally. The details of staff & labors are enlisted in the
economics of the project.

OTHER EXPENSES. The probable other experiences are considered in the economics of the
project. They include rent, electricity charges, transportation, communication, travelling,
maintenance, postage & stationery etc.

POWER. The total connected load required for running the unit is estimated as 2 H.P. only-
single phase.

MANUFACTURING PROCESS. The clothing are taken and cut to required design. Then
they are stitched together to form the product. The necessary buttons, zibs, hooks etc are fixed
and it is then taken to ironing and ready for sale. The embroidery works are carried out if
necessary.
MARKETING. The marketing of any product is the decision making factor of the existence
of the unit and on considering that the promoter has taken all the possible ways for marketing
such as direct sales and personal contacts etc. In fact the promoter had made a wide network of
marketing for the last one year and is capable for the forthcoming years also. The marketing
area is concentrated in retail shops of small towns and there are a number of dealers through
which the product can be sold. Most care will be taken in the change of fashion and trends as
they are much affected in the field of ready-made garments.

MODE OF FINACE. The promoter expects financial assistance from leading nationalized
branch. This unit will be financed under ESS scheme and eligible for 40% subsidy of total
fixed investment .

ASSUMPTION. It is assumed that there will not be any major increase in the rate of raw
material and any major changes in prices will be compensated with corresponding change in
product.

CONCLUSION. On revealing the various aspects of the project and studying the financial &
technical features of the scheme it can easily be noted that the above project will be a great
success. The economics of the project is detailed as follows.

FINANCIAL ASPECTS
1 FIXED CAPITAL
1.1 Land and Building owned by Proprietor.
1.2 Machinery and Equipments

Sl. No. Description Qty. Rate(Rs). Value(Rs.)

1. Single Needle 1 19000/- 19000/-

Lock Stitch
Machine with
motor

2. Manual 6 8000/- 48000/-

Stiching
machine

3. Motor for 7 3000/- 21000/-

Stiching
machine

4. Cutting 1 42000/- 42000/-

Machine 6”
 5. Scissors 14 450/- 6300/-

7. OverLock 1 6700/- 6700/-

Machine

8. Other 15000/-
Equipments

Grand Total : 158000/-

1.3 Office Furniture items

Sl. No. Description Qty. Rate(Rs.) Value(Rs.)

1 Working table 1 3000/- 3000/-

2 Cutting table 1 3000/- 3000/-

3 Plastic Chair 8 500/- 4000/-

4 Steel almirah 1 8000/- 8000/-

5 Steel Rack 1 3000/- 3000/-

6 Iron box 5 200/- 1000/-

7 Chair 1 3500/- 3500/-

8 Office Table 1 4500/- 4500/-

Grand Total : 30000/-

2. Working capital
2.1 Staff and Labour (per month)

Sl. No. Description No Salary Total(Rs.)

1 Manager Cum 1 11000/- 11000/-
designer
2 Cutting Master 2 9000/- 18000/-
3 Skilled Labour 6 7000/- 42000/-
Grand Total : 71000

2.2 Raw Materials (per Month)

Sl. No. Description Qty Rate(Rs.) Total(Rs.)

2 Clothes for 850 75 /- 63750/-
Shirts(Mtr)
3 Clothes for 300 150 /- 45000/-
Trouser(Mtr)
5 Other Items like 7000/- 7000/-
Laze , buttons,
threads
6 Packing 1800 3 5400/-
materials
Grand Total: 121150

2.3 Utilities and Other Contingent Expenses (Per Month)

Sl. No. Description Amount Rs.

1 Power 6000/-
2 Stationary 500/-
3 Repair and Maintenance 1500/-
4 Transportation expenses 3000/-
5 Telephone 1850/-
6 Misscelaneous 1000/-
Grand Total : 13850/-
 Total Working Capital for 2 month : Rs. 412000/-

3. Total Capitail Investment:

Land & Building Owned

Plant & Machinery 188000/-
Working Capital 412000/-
Grand Total: 600000/-

4. Source of finance:
Promoter Contribution 100000/-
Term Loan for machinery 188000/-
Working Capital Loan 412000/-

5. Financial Analysis:
5.1 Cost of Production(per year )

Sl. No Description Amount Rs

1 Total recurring cost 2334450/-
2 Depreciation on machinery @10% 19780/-
3 Depreciation on furniture @20% 7820/-
4 Interest on Term Loan @14% 33166/-
5 Interest on Working Capital Loan @14% 50834/-
Grand Total:2446050/-

5.2 Turnover ( Per Year)

Sl no. Item Qty Rate Rs. Total Rs
1 Gents Shirt 3000 380 1710000/-
2 Gents Trousers 4500 350 1050000/-

Grand Total: 2760000/-

5.3 Net Profit (Per Year )

Turnover 2760000/-
Cost of production 2446050/-
Total:313950/-
6. Net Profit Ration:
(Net profit per year/Turnover per year)x100 = 14.174 %

7. Rate of Return on Investment:

(Net Profit/Total Capital Investment) Annual Profit X 100

313950*100/600000=52.35%

7. Break Even Analysis:

1. Depreciation Rs. 27600/-

2. Interest on Capital Investment Rs. 84000/-
3. 40% of Wages of Staff & Labour Rs. 28400/-
4. 40% of other contingent expenses Rs. 5540/-
Total Fixed Cost Rs. 145540/-

Fixed Cost *100/Fixed +Annual Profit : 145540*100/459490=

=31.67%
Name & Addresses of Machinery & Equipment Suppliers:
M/s Elite Steam and Garment Machine;
1. Sec 37, Gurugram

2. M/s JUKI Machinery (India) Pvt. Ltd., A-215/B, Okhla Industrial Area, Phase-
1, New Delhi.
3. M/s Star International Pvt. Ltd., Star Tower, 109/366-2, R. K. Nagar, G.T.
Road, Kanpur.
4. M/s Mehala Machine India Ltd., Plot NO. 18, Block H-1, 117/447, Pandu
Nagar, Kanpur.
5. M/s KP Tech Machine( India )Private Limited
Nikol, Ahmedabad,Gujarat
6. Adams Machinery
Bala Nagar Hyderabad

Name & Addresses of Raw Material Suppliers:

Sl no Supplier
1. M/s Goldstar Fabrics Pvt. Ltd.
VILLAGE BAJRA, Ludhiana - Rahon Rd, Bajrah, Punjab 141007
2. M/s Aadit Trading Co.
St. No 1 Tank Road, Mr Channi Prop Dealer, Manna Singh Nagar,
Ludhiana, Punjab 141001
3. Local Market