PROJECT REPORT

Of

CLOTHES

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Ladies suits.

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in project
identification for investment and in order to serve his objective; the document covers various aspects
of the project concept development, start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can also prepare
project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak Building ,

27/1/B, Gokhlley Marg, Lucknow-226001

Delhi Office : Multi Disciplinary Training

Centre, Gandhi Darshan Rajghat,
New Delhi 110002

Email : [email protected]
Contact : +91 7526000333, 444, 555
 PROJECT REPORT
ON
LADIES SUITS

INTRODUCTION:

While global fashion trends bring garments of new style and design in market every
day, women also look for a standard looking, easy to wear and functional outfit for
long term use. Ladies suit is such a common outfit for women. It comprises of a
kurta or top, salwar or churidar and optionally a dupatta. It provides ease of physical
movement, convenience of household and office functions without any hurdles and
smart look. It is formal dressing for women and can be worn on all occasions.

PRODUCT & ITS APPLICATION:

Ladies suit comprising of two or three pieces (with or without dupatta) is a formal
dress and is used on all occasions. The use of Ladies suit started in north India and
gradually spread to almost entire India. Over period of time, the variety in top or
kurta has expanded to long kurta, short kurta, with or without sleeves and variety in
churidar has expanded to leggings, palazzo and skirts etc. The use of this outfit is
also growing outside India and increasing number of women in Asia and Europe
now wear Salwar Kurta Dupatta in different styles & designs.
INDUSTRY OUTLOOK & TRENDS:

Market for Ladies Suit has witnessed a continuous growth in last two decades. The
growth is result of increasing women literacy, number of working women, impact of
urbanization in semi urban & rural areas and awareness of women’s rights. The
ladies suits are not just formal but are also comfortable and go well in offices,
educational institutions and celebrations / events. Designer suits have become a
rage with people having high disposable income. The demand follows income and
education charts.

MARKET POTENTIAL AND MARKETING ISSUES, IF ANY:

An increasing number of women now prefer to work and therefore need formal
clothing. Ladies suit offers good look, physical comfort and perfect functionality in
office as well as industrial duties. It can also be worn on all outdoor occasions.
Therefore the market for this product is simply huge. The price of a ladies suit varies
from low of Rss500 to high of Rs10,000 depending on type of material, design, style,
fitting and accessories etc. There are several branded and unbranded (local labels)
products in the market. Although the competition is severe, there is room for every
player to find his niche offering the right product and price. There is also some
market for partly stitched ladies suits and unstitched dress material.

RAW MATERIAL REQUIREMENTS:

The main raw material is fabric. Variety of cotton and synthetic fabric is available in
all major cities. Accessories like buttons, laces, zippers, patches, danglers, piping
etc are also easily available with traders dealing in tailoring materials or dress
materials.

MANUFACTURING PROCESS:

The fabric purchased in roll form is spread in layers on the cutting table. Patterns of
various parts of the garmentmade out of card board or plywood or metal are laid on
the fabric in such a way that wastage of fabric is minimized. Several layers of fabric
are then cut through vertical motorized blade. Garments are stitched in assembly
line manner wherein each machine operator completes only a part of the product.
The stitching starts on the 1st machine and gets completed at the last stage where
the product is inspected for quality defects if any. Garments are then cleaned of
loose yarn or dirt and packed in plastic bags as per customer requirements.
STATUTORY APPROVALS:

The project does not require any specific government approval. Registration with
MSME is optional. An Entrepreneur may be required to obtain Shops &
Establishment Registration and Professional Tax registration by local Municipal
authorities. Registration under Factories Act, Provident Fund Act and ESI
provisions would be required depending upon the number of employees, the
location, the level of mechanization and the age of the enterprise. Entrepreneur may
contact State Pollution Control Board where ever it is applicable.

BACKWARD OR FORWARD INTEGRATION:

As the machines used in the project are versatile, the Entrepreneur can also
consider manufacture of home furnishing articles like bed sheets, pillow covers, wall
hangings etc depending on opportunities in the market he / she is familiar with.
Disclaimer:
Only few machine manufacturers are mentioned in the profile, although many
machine manufacturers are available in the market. The addresses given for
machinery manufacturers have been taken from reliable sources, to the best of
knowledge and contacts. However, no responsibility is admitted, in case any
inadvertent error or incorrectness is noticed therein. Further the same have been
given by way of information only and do not carry any recommendation.
 PROJECT AT A GLANCE
1 Name of the Entreprenuer VIMLA DEVI

2 First Nane VIMLA DEVI

3 Father's/Spouce's Name MUNDIRKA SHARMA

4 Unit Address : RANCHI RATU

Taluk/Block:
District : RANCHI
Pin: 835222 State: JHA
E-Mail : XXXXX
Mobile XXXXX

5 Product and By Product : Ladies Suits

6 Name of the project / business activity proposed Ladies Suits

7 Cost of Project : Rs10.00 lac

8 Means of Finance
Term Loan Rs.17.26 Lacs
KVIC Margin Money - As per Project Eligibility
Own Capital Rs.2.5 Lacs
Working Capital Rs.5.24 Lacs

9 Debt Service Coverage Ratio : 4.98

10 Pay Back Period : 5 Years

11 Project Implementation Period : 6 Months

12 Break Even Point : 35%

13 Employment : 15 Persons

14 Power Requirement : 5.00 HP

15 Major Raw materials : Cloth material and accessories

16 Estimated Annual Sales Turnover : 100.21 Lacs

16 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lacs)

Particulars Amount
Land Rented/Owned
Building & Civil Work (2000 Sq ft) 4.00
Plant & Machinery 13.00
Furniture & Fixtures 1.50
Pre-operative Expenses 0.68
Working Capital Requirement 5.82
Total 25.00

MEANS OF FINANCE
Particulars Amount
Own Contribution @10% 2.50

Term Loan 17.26

Workign Capital Finance 5.24

Total 25.00

General Special
Beneficiary's Margin Monery 10% 5%
(% of Project Cost)
PLANT & MACHINERY

Single Needle Machine 8 60,000.00 480,000.00

Double Needle Machine 4 75,000.00 300,000.00
Border/Piping machine 3 50,000.00 150,000.00
Over-lock Machine 3 40,000.00 120,000.00
Cutting Table & machine 1 100,000.00 100,000.00
Embroidary Machine 2 75,000.00 150,000.00
TotalMachinery 1,300,000.00
PROJECTED BALANCE SHEET

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

SOURCES OF FUND

Capital Account 2.50 2.50 2.50 2.50 2.50

Retained Profit 10.44 22.47 36.42 53.47 73.39

Term Loan 17.26 12.95 8.63 4.32 2.16

Cash Credit 5.22 5.22 5.22 5.22 5.22
Sundry Creditors 4.66 5.44 6.22 6.99 7.77
Provisions & Other Liab 0.36 0.40 0.44 0.48 0.53

TOTAL : 40.45 48.97 59.43 72.97 91.56

APPLICATION OF FUND

Fixed Assets ( Gross) 18.50 18.50 18.50 18.50 18.50

Gross Dep. 2.43 4.59 6.45 8.05 9.43
Net Fixed Assets 16.08 13.92 12.05 10.45 9.07

Current Assets
Sundry Debtors 7.01 8.35 9.55 10.75 11.94
Stock in Hand 3.47 6.12 6.99 7.87 8.74

Cash and Bank 11.39 17.83 27.80 40.59 58.16

Deposits & Advances 2.50 2.75 3.03 3.33 3.66

TOTAL : 40.45 48.97 59.43 72.97 91.56

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

A) SALES
Gross Sale 100.21 119.30 136.40 153.50 170.60

Total (A) 100.21 119.30 136.40 153.50 170.60

B) COST OF SALES

Raw Mateiral Consumed 66.60 77.70 88.80 99.90 111.00

Elecricity Expenses 0.43 0.50 0.57 0.64 0.72
Repair & Maintenance - 1.19 1.36 1.54 1.71
Labour & Wages 13.99 15.39 16.93 18.62 20.49
Depriciation 2.43 2.16 1.86 1.60 1.38
Consumables and Other Expense 2.00 2.39 2.73 3.07 3.41
Cost of Production 85.45 99.33 112.26 125.38 138.70

Add: Opening Stock /WIP - 1.92 2.23 2.55 2.87

Less: Closing Stock /WIP 1.92 2.23 2.55 2.87 3.19

Cost of Sales (B) 83.54 99.01 111.94 125.06 138.38

C) GROSS PROFIT (A-B) 16.67 20.29 24.46 28.44 32.22

17% 17% 18% 19% 19%
D) Bank Interest (Term Loan ) 1.46 1.55 1.05 0.56 0.09
Bank Interest ( C.C. Limit ) 0.52 0.52 0.52 0.52 0.52

E) Salary to Staff 2.24 2.47 2.72 2.99 3.29

F) Selling & Adm Expenses Exp. 2.00 2.39 2.73 3.07 3.41

TOTAL (D+E) 6.23 6.93 7.02 7.14 7.31

H) NET PROFIT 10.44 13.36 17.44 21.31 24.90

I) Taxation - 1.34 3.49 4.26 4.98

J) PROFIT (After Tax) 10.44 12.03 13.96 17.04 19.92

PROJECTED CASH FLOW STATEMENT

PARTICULARS IST YEAR IIND YEAR IIIRD YEARIVTH YEAR VTH YEAR

SOURCES OF FUND

Share Capital 2.50 -

Reserve & Surplus 10.44 13.36 17.44 21.31 24.90
Depriciation & Exp. W/off 2.43 2.16 1.86 1.60 1.38
Increase in Cash Credit 5.22 - - - -
Increase In Term Loan 17.26 - - - -
Increase in Creditors 4.66 0.78 0.78 0.78 0.78
Increase in Provisions 0.36 0.04 0.04 0.04 0.05

TOTAL : 42.87 16.33 20.12 23.73 27.11

APPLICATION OF FUND

Increase in Fixed Assets 18.50 - - - -

Increase in Stock 3.47 2.65 0.87 0.87 0.87
Increase in Debtors 7.01 1.34 1.20 1.20 1.20
Increase in Deposits & Adv 2.50 0.25 0.28 0.30 0.33
Repayment of Term Loan - 4.32 4.32 4.32 2.16
Taxation - 1.34 3.49 4.26 4.98

TOTAL : 31.48 9.89 10.15 10.95 9.54

Opening Cash & Bank Balance - 11.39 17.83 27.80 40.59

Add : Surplus 11.39 6.45 9.97 12.78 17.57

Closing Cash & Bank Balance 11.39 17.83 27.80 40.59 58.16
COMPUTATION OF MANUFACTURING OF LADIES SUITS

Items to be Manufactured Ladies Suits

Manufacturing Capacity per day - 200 Ladies Suits

No. of Working Hour 8
No of Shift per day 1
No of Working Days per month 25
No. of Working Day per annum 300
Total Production per Annum 60,000.00 Ladies Suits

Year Capacity
Utilisation
Ladies Suits
IST YEAR 60% 36,000
IIND YEAR 70% 42,000
IIIRD YEAR 80% 48,000
IVTH YEAR 90% 54,000
VTH YEAR 100% 60,000

COMPUTATION OF RAW MATERIAL

Item Name Quantity of Recovery Unit Rate of Total Cost

Raw Material of RM Per Annum (100%

Cloth material other accessoroes and

packaging 100% 60,000.00 100% 185.00 111.00

Total (Rounded off in lacs) 111.00

Annual Consumption cost ( In Lacs) 111.00

Raw Material Consumed Capacity Amount (Rs.)

Utilisation

IST YEAR 60% 66.60

IIND YEAR 70% 77.70
IIIRD YEAR 80% 88.80
IVTH YEAR 90% 99.90
VTH YEAR 100% 111.00
COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

Finished Goods
(15 Days requirement) 1.92 2.23 2.55 2.87 3.19
Raw Material
(15 Days requirement) 1.55 3.89 4.44 5.00 5.55

Closing Stock 3.47 6.12 6.99 7.87 8.74

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Total
Amount
Stock in Hand 3.47

Sundry Debtors 7.01

Total 10.48
Sundry Creditors 4.66

Working Capital Requirement 5.82

Margin 0.60

Working Capital Finance 5.22

BREAK UP OF LABOUR

Particulars Wages No of Total

Per Month Employees Salary
Stitching machine operator 7,500.00 6 45,000.00
Master Cutter 7,500.00 2 15,000.00
Skilled 5,000.00 6 30,000.00
Unskilled Worker 4,000.00 4 16,000.00

106,000.00
Add: 10% Fringe Benefit 10,600.00
Total Labour Cost Per Month 116,600.00
Total Labour Cost for the year ( In Rs. Lakhs) 13.99

BREAK UP OF SALARY

Particulars Salary No of Total

Per Month Employees Salary
Supervisor 10,000.00 1 10,000.00
Sales Man 7,000.00 1 7,000.00
Total Salary Per Month 17,000.00

Add: 10% Fringe Benefit 1,700.00

Total Salary for the month 18,700.00

Total Salary for the year ( In Rs. Lakhs) 2.24

COMPUTATION OF DEPRECIATION

Description Land Building/shed Plant & Furniture TOTAL

Machinery

Rate of Depreciation 10.00% 15.00% 10.00%

Opening Balance Leased - - - -
Addition - 4.00 13.00 1.50 18.50
- 4.00 13.00 1.50 18.50
Less : Depreciation - 0.40 1.95 0.08 2.43
WDV at end of Ist year - 3.60 11.05 1.43 16.08
Additions During The Year - - - - -
- 3.60 11.05 1.43 16.08
Less : Depreciation - 0.36 1.66 0.14 2.16
WDV at end of IInd Year - 3.24 9.39 1.28 13.92
Additions During The Year - - - - -
- 3.24 9.39 1.28 13.92
Less : Depreciation - 0.32 1.41 0.13 1.86
WDV at end of IIIrd year - 2.92 7.98 1.15 12.05
Additions During The Year - - - - -
- 2.92 7.98 1.15 12.05
Less : Depreciation - 0.29 1.20 0.12 1.60
WDV at end of IV year - 2.62 6.79 1.04 10.45
Additions During The Year - - - - -
- 2.62 6.79 1.04 10.45
Less : Depreciation - 0.26 1.02 0.10 1.38
WDV at end of Vth year - 2.36 5.77 0.93 9.07
REPAYMENT SCHEDULE OF TERM LOAN 11.5%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

IST YEAR Opening Balance
Ist Quarter - 17.26 17.26 - - 17.26
Iind Quarter 17.26 - 17.26 0.50 - 17.26
IIIrd Quarter 17.26 - 17.26 0.50 1.08 16.18
Ivth Quarter 16.18 - 16.18 0.47 1.08 15.10
1.46 2.16
IIND YEAR Opening Balance
Ist Quarter 15.10 - 15.10 0.43 1.08 14.03
Iind Quarter 14.03 - 14.03 0.40 1.08 12.95
IIIrd Quarter 12.95 - 12.95 0.37 1.08 11.87
Ivth Quarter 11.87 11.87 0.34 1.08 10.79
1.55 4.32
IIIRD YEAR Opening Balance
Ist Quarter 10.79 - 10.79 0.31 1.08 9.71
Iind Quarter 9.71 - 9.71 0.28 1.08 8.63
IIIrd Quarter 8.63 - 8.63 0.25 1.08 7.55
Ivth Quarter 7.55 7.55 0.22 1.08 6.47
1.05 4.32
IVTH YEAR Opening Balance
Ist Quarter 6.47 - 6.47 0.19 1.08 5.39
Iind Quarter 5.39 - 5.39 0.16 1.08 4.32
IIIrd Quarter 4.32 - 4.32 0.12 1.08 3.24
Ivth Quarter 3.24 3.24 0.09 1.08 2.16
0.56 4.32
VTH YEAR Opening Balance
Ist Quarter 2.16 - 2.16 0.06 1.08 1.08

Iind Quarter 1.08 - 1.08 0.03 1.08 -

IIIrd Quarter - - - - - -
Ivth Quarter - - - - -
0.09 2.16
CALCULATION OF D.S.C.R

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

CASH ACCRUALS 12.87 14.19 15.82 18.65 21.31

Interest on Term Loan 1.46 1.55 1.05 0.56 0.09

Total 14.33 15.74 16.87 19.21 21.40

REPAYMENT
Instalment of Term Loan 4.32 4.32 4.32 2.16 2.16
Interest on Term Loan 1.46 1.55 1.05 0.56 0.09

Total 5.77 5.87 5.37 2.72 2.25

DEBT SERVICE COVERAGE RA 2.48 2.68 3.14 7.07 9.51

AVERAGE D.S.C.R. 4.98

COMPUTATION OF SALE
Particulars IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

Op Stock - 840 980 1,120 1,260

Production 36,000 42,000 48,000 54,000 60,000

36,000 42,840 48,980 55,120 61,260

Less : Closing Stock 840 980 1,120 1,260 1,400

Net Sale 35,160 41,860 47,860 53,860 59,860

Sale Price per dress 285.00 285.00 285.00 285.00 285.00

Sale (in Lacs) 100.21 119.30 136.40 153.50 170.60

The above calculations are based on assumed unit sales price varying from Rs175to Rs2000/ for various products.
The key raw material is assumed at a cost range of Rs75 to Rs150 per meter.
For ease of calculation the average sale price of dress is taken as Rs285/- and Raw material such as cost of cloth hooks,frills
labels packaging etc as Rs185/-
COMPUTATION OF ELECTRICITY
(A) POWER CONNECTION

Total Working Hour per day Hours 8

Electric Load Required 5
Load Factor 0.7460
Electricity Charges per unit 8.00
Total Working Days 300
Electricity Charges ( 8 Hrs Per day ) 71,616.00

Add : Minimim Charges (@ 10%)

(B) D.G. SET

No. of Working Days 300 days
No of Working Hours - Hour per day
Total no of Hour -
Diesel Consumption per Hour 8
Total Consumption of Diesel -
Cost of Diesel 65.00 Rs. /Ltr
Total cost of Diesel -
Add : Lube Cost @15% -
Total -

Total cost of Power & Fuel at 100% 0.72

Year Capacity Amount

(in Lacs)

IST YEAR 60% 0.43

IIND YEAR 70% 0.50
IIIRD YEAR 80% 0.57
IVTH YEAR 90% 0.64
VTH YEAR 100% 0.72
BREAK EVEN POINT ANALYSIS

Year I II III IV V

Net Sales & Other Income 100.21 119.30 136.40 153.50 170.60
Less : Op. WIP Goods ‐ 1.92 2.23 2.55 2.87
Add : Cl. WIP Goods 1.92 2.23 2.55 2.87 3.19

Total Sales 102.12 119.62 136.72 153.82 170.92

Variable & Semi Variable Exp.

Raw Material & Tax 66.60 77.70 88.80 99.90 111.00

Electricity Exp/Coal Consumption at 85% 0.37 0.43 0.49 0.55 0.61
Manufacturing Expenses 80% 1.60 2.86 3.27 3.68 4.09
Wages & Salary at 60% 9.74 10.72 11.79 12.97 14.26
Selling & adminstrative Expenses 80% 1.60 1.91 2.18 2.46 2.73
Intt. On Working Capital Loan 0.52 0.52 0.52 0.52 0.52
Total Variable & Semi Variable Exp 80.44 94.14 107.05 120.08 133.22

Contribution 21.69 25.48 29.67 33.74 37.70

Fixed & Semi Fixed Expenses

Manufacturing Expenses 20% 0.40 0.72 0.82 0.92 1.02

Electricity Exp/Coal Consumption at 15% 0.06 0.08 0.09 0.10 0.11
Wages & Salary at 40% 6.49 7.14 7.86 8.64 9.51
Interest on Term Loan 1.46 1.55 1.05 0.56 0.09
Depreciation 2.43 2.16 1.86 1.60 1.38
Selling & adminstrative Expenses 20% 0.40 0.48 0.55 0.61 0.68
Total Fixed Expenses 11.24 12.12 12.22 12.44 12.80

Capacity Utilization 75% 80% 85% 90% 95%

OPERATING PROFIT 10.44 13.36 17.44 21.31 24.90
BREAK EVEN POINT 39% 38% 35% 33% 32%
BREAK EVEN SALES 52.95 56.90 56.33 56.70 58.02
 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN assume no
financial liability to anyone using the content for any purpose. All the materials and content
contained in Project report is for educational purpose and reflect the views of the industry
which are drawn from various research material sources from internet, experts, suppliers and
various other sources. The actual cost of the project or industry will have to be taken on case
to case basis considering specific requirement of the project, capacity and type of plant and
other specific factors/cost directly related to the implementation of project. It is intended for
general guidance only and must not be considered a substitute for a competent legal advice
provided by a licensed industry professional. SAMADHAN hereby disclaims any and all
liability to any party for any direct, indirect, implied, punitive, special, incidental or other
consequential damages arising directly or indirectly from any use of the Project Report
Content, which is provided as is, and without warranties.