Project Report

on
FAIRY GARMENTS

Submitted By,
Mini Shaji

Kallurumbil (H)

Karimannoor P.O

Thodupuzha,
Idukki(Dist)

Pin :685581

Page 1 of 25
 PROJECT AT A GLANCE

1. Name and Address of the Unit : FAIRY GARMENTS Unit , Karimannoor

2. Promoter : Mini Shaji

3. Project : Readymade and Designer Garments making

unit

4. Type : Micro Enterprise

5. Management : Proprietary

6. Location : Karimannoor

7. Total Project Cost : 15.63 L

8. Fixed Capital : 8.7 L

9. Working Capital : 5.92 L

10. Equity(20 %) : 1.93 L

11. Margin Money Grant(20%) : 1.93 L

12. Employment : 17 Nos

13. DSCR : 3.90

14. Break Even Point : 42.67%

Page 2 of 25
 BIO – DATA

1. Full name and address : Mini Shaji

Kallurumbil (H)

Karimannoor P.O Thodupuzha

2. Name of Panchayath : Karimannoor Panchayath

3. Taluk : Thodupuzha Taluk

4. Name of Father/Husband : Shaji K.K (Husband)

5. Age : 47

6. Sex : Female

7. Nationality : Indian

8. Category : Christian /Roman Catholic (RC)

9. Academic Qualification : BA (Sociolagy)

10. Functional Responsibilities in the unit : Proprietor

Signature

Page 3 of 25
 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 one of the channel of India’s

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. 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

Page 4 of 25
 Promoter
The promoter of the unit is Mini Shaji . She is very well experienced in the
garment industry. She has specialized in the Designer Nighties & Churidars
making and is well known for it in the surrounding areas. She is capable of
managing the unit. Her husband’s contacts with a lot of customers and
various shops make her very confident of running and managing the unit
profitably. She is a dynamic person with a greater aspiration.

Location, Land and Building

The unit is intended to start in Promoter’s own property. 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

Scope
The conventional tailoring unit cannot 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

Page 5 of 25
 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.

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.

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.

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.

Page 6 of 25
 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.

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.

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.

6.7 Lakhs

2.92 Lakhs

1.93 Lakhs

Page 7 of 25
 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.

Page 8 of 25
 IMPLEMENTATION SCHEDULE

Sl.No. Activity
Period of Completion (Change as per needs)
1. Sanction of loan sept’ 2020
2. Building Sept’ 2020
3. Procurement of Oct’ 2020
machinery
Electrification
4. Government Approvals oct’ 2020
6. Procurement of oct’ 2020
materials
7. Commercial production nov’2020

ECONOMICS OF THE PROJECT

Land and Building : own land -

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 Jack machine 3 28000 United
Machine
house
2 Usha Tailoring 5 22000 United
machine Machine
House
3 Cotton thread 10 45000
set

Page 9 of 25
2

Feiyue Button hole machine & button fixing machine

156000

-do-

Feiyue collar fusing machine

140000

-do-

Feiyue cutting machine

16120

-do-

Page 10 of 25
Ranew overlock machine

8000

-do-

Merrit 8208 foot + power motor auto oil lubricant

10

200000

-do-

Scissors, Accessories etc.

2000

-do-

Sub Total(1)

550120

Cash cuboard

15000

Stool

20

16000

Page 11 of 25
10

Cutting table

14500

11

Shelf with glass front 210 sq.ft

49500

12

Ironing - Table

10500

Sub Total(2)

105500

Grant Total

655620

Page 12 of 25
 Pre Operative Expenses
Pre operative expenses such as Electrification, Installation etc. costs
:Rs15,000/-

Total Fixed Capital :

Rs.6,70,620/-

Raw Material required per month

Various clothing and sewing materials for Churidar, Nighty, Kurthi etc. for one
month costs : Rs.2,50,000/-

Staff and Labour per month

Manager 1 No. Rs.5000/-
Tailors 14 Nos. Rs.49000/-
Helper/Trainee 2 Nos. Rs.6000/-
Total 17Nos. Rs.60,000/-

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

Page 13 of 25
 Total Rs.11,000/-

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/-

Total Capital Investments

Land and Building Own
Plant and machinery Rs.6,55,620/-
Pre- Operative Expenses Rs.15,000/-
Working capital R s.2,92,000/-
Total Project Cost Rs.9,62,620/-

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 Rs.1,75,200/-
P.C& Grant)
Margin Money Grant from Industries Rs.1,92,524/-
Dept(20%)
Total Rs.9,62,620/-

Page 14 of 25
 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 Rs.1898/
Loan(@13%)
Repayment of Working Capital Loan Rs.2920/
Depreciation(@10%) Rs.5464/
Sales promotion expenses Rs.5000/
Total Rs.3,47,348/

Sales Revenue per Month

SI NO: Sales Income
Churidar 750 Nos Rs.2,25,000/-
Nighty 1000 Nos Rs.80,000/-
Kurthi 375 Nos Rs.93,750/-
Total Sales Rs.3,98,750/-

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

Page 15 of 25
REPAYMENT CHART OF TERM LOAN

Rs. in Rupees Opening Balance Principal Repayment per year Closing Balance

1 year 402372 80474

2 year 321898 80474

3 year 241424 80474

4 year 160950 80474

5 year 80474 80474

Interest@13%

52308

41847

31385

20924

10462

Page 16 of 25
Total Repayment per year

132782

122321

111859

101398

90936

Depreciation of Plant and Machinery

Year

Opening Balance

6556

590058

531052

477947

430152

Page 17 of 25
Depreciation @ 10%

65562

59006

53105

47795

43015

Closing Balance

590058

531052

477947

430152

387137

Page 18 of 25
Projected profitability statement

Rs. in Lakhs

Sales Revenue

Year

Capacity (%)

70

75

80

Page 19 of 25
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

Page 20 of 25
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

Page 21 of 25
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

Page 22 of 25
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

asfar as I am considered iaknow that the besttt

Total B = 1.554

DSCR A/B = 3.90

Page 23 of 25
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 %

Page 24 of 25
The Project is Economically viable and Technically feasible. The project is
submitted for approval.

Signature of Promoter

Page 25 of 25