Project Profile
on
Readymade Garments
Promoter
pROJECT AT A GLANCE
1. Name and Address of the Unit:
2. Promoter :
3. Project : Readymade and Designer Garments
Making Unit
4. Type : Micro Enterprise
5. Management : Proprietary
6. Category :
7. Location :
8. Total Project Cost : 9.63 L
9. Fixed Capital : 6.7 L
10. Working Capital : 2.92 L
11. Equity(20 %) : 1.93 L
12. Margin Money Grant(20%) : 1.93 L
12. Employment : 17 Nos
13. DSCR : 3.90
14. Break Even Point : 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 : Indian
8. Category : Minority
9. Academic Qualification : SSLC
10. Functional Responsibilities in the unit : Proprietor
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 India
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/husband’s 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 promoter’s 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 promoter’s vast experience in the industry will do a major role. Her and her husband’s 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
IMPLEMENTATION SCHEDULE
Sl.No. Activity Period of Completion
(Change as per needs)
1. Sanction of loan Aug’ 2010
2. Procurement of machinery Sept’ 2010
3. Erection & electrification Oct’ 2010
4. Government Approvals Nov’ 2010
6. Procurement of materials Dec’ 2010
7. Commercial production Dec’2010
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 | Qty. | Price(Rs) | Suppliers |
1 | Ranew Embroidery foot+ power motor | 2 | 28000 | Naidu and Sons,Attingal |
2 | Feiyue Button hole machine & button fixing machine | 1 | 156000 | -do- |
3 | Feiyue collar fusing machine | 1 | 140000 | -do- |
4 | Feiyue cutting machine | 1 | 16120 | -do- |
5 | Ranew overlock machine | 1 | 8000 | -do- |
6 | Merrit 8208 foot + power motor auto oil lubricant | 10 | 200000 | -do- |
7 | Scissors, Accessories etc. | - | 2000 | -do- |
Sub Total(1) | 550120 | |||
8 | Cash cuboard | 1 | 15000 | |
9 | Stool | 20 | 16000 | |
10 | Cutting table | 1 | 14500 | |
11 | Shelf with glass front 210 sq.ft | 1 | 49500 | |
12 | Ironing - Table | 1 | 10500 | |
Sub Total(2) | 105500 | |||
Grant Total | 655620 | |||
15. Pre Operative Expenses
Pre operative expenses such as Electrification, Installation etc. costs :
: Rs. 15,000/-
16. Total Fixed Capital : Rs.6,70,620/-
=========
17. 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
Manager 1 No. Rs.5000/-
Tailors 14 Nos. Rs.49000/-
Helper/Trainee 2 Nos. Rs.6000/-
______ __________
Total 17 : Rs.60,000/-
19. Other Expenses per Month
Electricity charges : Rs.1500
Traveling expenses : Rs.1000
Marketing and Selling : Rs.5000
Postage and telephone : Rs.1600
Rent : Rs.900
Repair and maintenance : Rs.500
Other unforeseen expenses : Rs.500
____________
Total : Rs.11,000/-
20. Working capital
Stock of Raw materials 1/2 month : Rs.1,25,000/-
Raw materials in process 3 days : Rs.30,000/-
Stock of finished goods 2 days : Rs.36,000/-
Credit sale 5 days : Rs.90,000/-
One month working expenses : Rs.11,000/-
_____________
Total : Rs.2,92,000/-
============
21. Total Capital Investments
Land and Building : Rented
Plant and machinery : Rs.6,55,620/-
Pre- Operative Expenses : Rs.15,000/-
Working capital : Rs.2,92,000/-
_____________
Total Project Cost : Rs.9,62,620/-
===========
22. Source of Finance
Promoter’s Contribution (20%) : Rs.1,92,524/-
Term loan from Bank(less P.C& Grant) : Rs.4,0,2372/-
Working Capital loan from Bank(less P.C& Grant) : Rs.1,75,200/-
Margin Money Grant from Industries Dept(20%) : Rs.1,92,524/-
______________
Total : Rs.9,62,620/-
=============
23. Cost of Production per Month
Raw materials : Rs.2,50,000/-
Staff and Labour : Rs.60,000/-
Other Expenses : Rs.11,000/-
Interest on Term loan(@13%) : Rs.4360/-
Repayment of Term Loan : Rs.6706/-
Interest on Working Capital Loan(@13%) : Rs.1898/-
Repayment of Working Capital Loan : Rs.2920/-
Depreciation(@10%) : Rs.5464/-
Sales promotion expenses : 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 750 Nos : Rs.2,25,000/-
Nighty 1000 Nos : Rs.80,000/-
Shirts 375 Nos : Rs.93,750/-
________________
Total Sales : Rs.3,98,750/-
==============
25. Profitability
Profit per month : Rs.51,402/-
Profit per year : Rs.6,16,824/-
Provision for taxes : Rs.1,28,047/-
Net profit : Rs.4,88,777/-
Break Even Point : 42.67 %
Debt service coverage ratio : 3.89
REPAYMENT CHART OF TERM LOAN
Rs. in Rupees
1 year | 2 year | 3 year | 4 year | 5 year | |
Opening Balance | 402372 | 321898 | 241424 | 160950 | 80474 |
Principal Repayment per year | 80474 | 80474 | 80474 | 80474 | 80474 |
Closing Balance | 321898 | 241424 | 160950 | 80474 | 0 |
Interest@13% | 52308 | 41847 | 31385 | 20924 | 10462 |
Total Repayment per year | 132782 | 122321 | 111859 | 101398 | 90936 |
Depreciation of Plant and Machinery
Year | 1 | 2 | 3 | 4 | 5 |
Opening Balance | 655620 | 590058 | 531052 | 477947 | 430152 |
Depreciation @ 10% | 65562 | 59006 | 53105 | 47795 | 43015 |
Closing Balance | 590058 | 531052 | 477947 | 430152 | 387137 |
Projected profitability statement
Rs. in Lakhs
Sales Revenue | |||||
Year | 1 | 2 | 3 | 4 | 5 |
Capacity (%) | 70 | 75 | 80 | 80 | 80 |
Sales | 47.85 | 51.27 | 54.69 | 60.15 | 66.15 |
Cost of Production | |||||
Raw materials | 30.0 | 32.14 | 34.29 | 37.71 | 41.48 |
Staff & Labour | 7.20 | 7.71 | 8.23 | 9.05 | 9.95 |
Other Expenses | 1.32 | 1.414 | 1.509 | 1.659 | 1.82 |
Interest on T.L | 0.523 | 0.561 | 0.598 | 0.658 | 0.724 |
Repayment of T.L | 0.804 | 0.861 | 0.919 | 1.01 | 1.11 |
Interest on W.C.L | 0.227 | 0.243 | 0.259 | 0.284 | 0.312 |
Repayment of W.C.L | 0.35 | 0.375 | 0.40 | 0.44 | 0.484 |
Depreciation@10% | 0.656 | 0.59 | 0.53 | 0.48 | 0.43 |
Sales Promotion Expenses | 0.60 | 0.643 | 0.686 | 0.754 | 0.829 |
Total Cost of Production | 41.68 | 44.537 | 47.421 | 52.045 | 57.139 |
Profit per Year | 6.17 | 6.733 | 7.269 | 8.105 | 9.011 |
Taxes, Cess etc. | 1.281 | 1.449 | 1.611 | 1.862 | 2.133 |
Net Profit | 4.89 | 5.284 | 5.658 | 6.243 | 6.88 |
Computation of DSCR (for Ist Year)
Net Income after Tax = 4.89
Interest on Term Loan = 0.523
Depreciation = 0.656
Total A = 6.069
Repayment of Term Loan = 0.804
Total Debt Obligation = 0.75
Total B = 1.554
DSCR A/B = 3.90
BREAK EVEN ANALYSIS (Based on Ist year)
Rs. in Lakhs
Sales : 47.85
Variable Cost : 32.15
Contribution : 15.70
Fixed Cost : 6.70
Fixed Cost x 100
Break Even Point = ---------------------------
Contribution
6.70 x 100
= -----------------
15.70
= 42.67 %
The Project is Economically viable and Technically feasible. The project is submitted for approval.
Signature of Promoter
