PROJECT REPORT

ON
PROPOSED INDUSTRIAL ESTABLISHMENT PLAN

OF

MR. AMAR NATH

FOR ALLOTMENT PLOT IN INDUSTRIAL PLOT ALLOTMENT UNDER GARMENT CLUSTER/PARK SCHEME 2021

AT

(SECTOR-26, GIDA, GORAKHPUR-273209, UTTAR PRADESH, INDIA)

FOR MANUFACTURING OF READYMADE GARMENTS

PREPARED BY:

VIJAY PAREEK & CO.

(Chartered Accountants)

1st Floor, Quazi-KatraIsmailpur, Sahebganj Gorakhpur -273005 (U.P.)

Contacts: 0551-2290011, +91-9621193185,+91-8318893021, +91-9532508582, Fax: 0551-2292402
Mail at: [email protected]
For more details Visit : www.vijaypareeknco.com
 1. CONCERN /PERSONAL DETAILS:
Concern (Unit) Name MR, AMAR NATH
Address (Proposed Unit Address) Sector-26, Gida, Gorakhpur-273209, Uttar Pradesh, India
Present Address of Unit 42-M, Raj Vila, Naya Gaon, Nanda Nagar, Kuraghat, Gorakhpur,
Uttar Pradesh-273008
Statue Proprietorship Firm (Individual)
Proprietor’s/Owner Details Name: MR, AMAR NATH
Father Name: Mr. SAWARU PRASAD
PAN: AKWPN5333K
Adhar No : 7338-1252-6081
Date of Birth: 03/06/1981

Resident Address:
42-M, Raj Vila, Naya Gaon, Nanda Nagar, Kuraghat,
Gorakhpur, Uttar Pradesh-273008
Proposed Business Activity Manufacturing of Readymade Garments
Unit Area 510 Sq Mtr. (400 Covered and 110 Uncovered)
Cost of Project and Details Land Cost :- Appx Rs. 30.60 Lacs
Construction Cost: Appx Rs. 35.20 Lacs
Machinery & Assets Cost: Appx Rs. 53.46 Lacs
Working Capital Requirements: Appx Rs. 50.25 Lacs
2. INTRODUCTION (PROJECT VIABILITY & FISIBILITY):

India as well as Indian sub-continent is known as a high quality and big quantity of garments
manufacturing hub in the world. Garment manufacturing units are belonging from
Livelihood unit/ Micro unit to Large unit. It contributes significant number of employment
generation and export earnings. Shirts, Trousers, T-Shirts, Jenas, Blazer-Suits, Sherwanis,
Wedding-Suit, Business Suit, Sports-Suit, etc. for men and Salwar-Kameez, Churidar-Kurtis,
Patiala-Salwar, Pyjama-Suit, Midi-Top, Gowns etc. for women are made in different sizes
under Readymade Garment category to cater the need of the customers both in export and
domestic market.

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 the maximum
revenue gathering industry in the country. 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 overall demand of clothing has gone up in the state because of increasing degree of
industrialization, 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.

Manufacturing of Shirts and Trousers, T-Shirt , Jeans & Jackets and Lower are under the
category of readymade Garment industry. Readymade garment industry has occupied a
unique place in the industrial scenario of our country by generating substantial export
earnings and creating lot of employment. Its contribution to industrial production,
employment and export earnings are very significant. This industry provides one of the
basic necessities of life. The employment provided by it is a source of livelihood for millions
of people. It also provides maximum employment with minimum capital investment. Since
this industry is highly labor-intensive, it is ideally suited to Indian condition. This project
report is prepared for the manufacture of gent’s shirts, gent’s trousers as they find wide
acceptance in local and international markets. Any person having the knowledge of cutting
and stitching operations can easily set up such establishments.

This profile envisages the establishment of Ready-made garments is mass-produced finished

textile products of the clothing industry. They are made from many different fabrics and
yarns. Their characteristics depend on the fibers used in their manufacture. The garments
are very simple to manufacture and easily marketable both in urban and rural areas. The
demand of readymade garments is increasing day by day due to urbanization of the cities.

Readymade garments are a part of our daily life. Clothes are an epitome of a culture. People
in different parts of the world have their own styles of dressing which symbolize their
culture and status. The Readymade garments industry is increasing day by day due to
changes of fashion in day-to-day life. The textile industry including readymade garments
occupies a unique position in the Indian economy.
Its predominant presence in the Indian economy is manifested in terms of its significant
contribution to the industrial production, employment generation and foreign exchange
earnings. The readymade garment industry in India owes its existence to the emergence of a
highly profitable market for exports. Ready-made garments account for approximately 45%
of India's total textile exports. It has immense potential for employment generation
particularly in the rural and remote areas of the country on account of its close linkage with
agriculture. They represent value added and less import sub sector. In the recent years,
however, the domestic demand has also been growing rapidly. Thus, due to demand it is a
good project for entrepreneurs to invest.

3. KEYS TO SUCCESS/FEASIBILITY
Readymade garment industry has occupied a unique place in the industrial scenario of our
country by generating substantial export earnings and creating lot of employment. Its
contribution to industrial production, employment and export earnings are very significant.
This industry provides one of the basic necessities of life. The employment provided by it is
a source of livelihood for millions of people. It also provides maximum employment with
minimum capital investment. Since this industry is highly labor-intensive, it is ideally suited
to Indian condition. This project report is prepared for the manufacture of gent’s shirts,
gent’s trousers as they find wide acceptance in local and international markets. Any person
having the knowledge of cutting and stitching operations can easily set up such
establishments.

4. MARKET:

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.
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 have
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.
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 have
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 gents shirts.

Nowadays in India the market for Readymade Garments extends from urban area to villages.
Retail shops of urban area, semi urban area and villages are potential domestic market for
Readymade Garments. Selling garments from home through online e-Market Place is very
convenient way. Government e Marketplace (GeM) is fully online, paperless and contactless
e-Market Platform for selling products to Government departments and their organizations.
Export of Readymade Garments has increased 9.25% in April-May this year compared to the
corresponding period last year. Readymade Garment has a very good opportunity to export.
Growing awareness about infectious disease and high standard of hygiene has led to
demand in healthcare garments products. Modern healthcare garments are required for
sanitization and precautionary measures to prevent infection / spread of communicable
diseases in Private and Government Hospitals.

In the present changing life style, each and every member in the family likes to follow latest
trend with regard to their wardrobe. They want to dress up neatly and like to display their
status. In today’s fast-moving life, it is difficult to take the time for getting clothes stitched.
We have to go to the market to buy a fabric, look for a toiler order stitching and wait till the
dress is ready. To overcome this problem, we have an alternative method of buying a
readymade dress. Almost for all occasions family members prefer to buy their garments
from the leading readymade shops. They are abundantly available for all the age groups.
Suitable accessories are also available along with the garments.

5. LAND , BUILDING, MACHINERIES ( LAND UTILIZATION/LAYOUT PLAN):

Full-scale Readymade Garments manufacturing does not requires setting up of a large-scale
factory with a complex production process. However, it is possible for small-scale
entrepreneurs to set up Readymade Garments Manufacturing assembly units as a small- or
medium-scale manufacturing operation. In our Unit we are considering it at small-scale
enterprises and Unit details as follows

 LAND :
The location of the proposed business with its production unit is at Plot is A-2/23,
Sector-26 of Gorakhpur Industrial Development Authority (GIDA). Total Area Approx.
510 Sq Mtr @ 6000 , within maximum initial payment @ 10%
Note : The Above Defined plot is not an final plot. Final Plot shall be as provided by
GIDA

 BUILDING (LAYOUT PALAN):

Covered or built-up area for the plant and Machinery including, Storages, Raw
material store, finished goods store, Processing section, Machinery spares store
room, Panel board room, For other construction for office, Toilets, Security office, Tin
Shedding in front of Procession and storage, Miscellaneous space etc. Double Story
Building. Housing area for Staff shall be within the limits as defined by the Authority
from time to time. Approx. Covered area for above construction shall be Appx 400 Sq
 Mtr. And uncovered area Appx 110 Sq Mtrs. for the purpose of loading, unloading,
sun drying raw or other material, and for all other works ancillary & relevant to the
proposed production line.

 MACHINE:
Readymade Garments manufacturing is not a complex process. Machines need to be
selected on the basis of the specific Readymade Garments quality type that is being
produced and the raw material being used. However, major machines include:
Plant & Machinery :
Machine Name Qty Rate Amount
Stitching machine Along with Motor 8 11000 88000
therein
Overlock Machine 6 3000 18000
6” Power driven cloth cutting machine 1 50000 50000
2 Needle Overlock Safety Stitching 1 50000 50000
Machine with Trimmer
Double Needle Lock Stitch Machine 2 75000 150000
Single Needle Lock Stitch Machine with 30 12000 360000
motor.
Button Hole making Machine 1 125000 125000
Button Stitching Machine 1 45000 45000
Garment Washing Machine 25 Kg capacity 1 120000 120000
Hydro extractor 25 Kg capacity 1 70000 70000
Tumbler Dryer 25 Kg capacity 1 110000 110000
Flat Bed Steam Iron Press with Vacuum 5 25000 125000
Table.
Zig Zag Embroidery Machine 1 45000 45000
Wash Room Trolleys 4 100000 400000
Hot Fusing Press 1 45000 45000
Scissors 10 500 5000
Eyelet Machine 1 1055000 1055000
Cutting Machine 2 108500 217000
Feed Off Arm 2 40000 80000
Bar Tracking 3 318000 954000
Waist Belt Machine 1 136000 136000
Button Stitching Machine 1 320000 320000
Loop Making Machine 1 156500 156500
Snap Fastener 1 50000 50000
Steam Boiler 1 138320 138320
Total Machinery 4912820
 Others Relevant Assets
Furniture & Others Qty Rate Amount
Working table 6 16000 96000
Fiber stool 4 500 2000
Steel almirah 4 8000 32000
Steel Rack 4 4000 16000
Iron box 1 2500 2500
Computers 3 30000 90000
Printer 1 15000 15000
Lay Table 10 10000 100000
Erection and installation 50000
Pre-operative expenses 30000
Total 433500

 INPLEMENTATION SHEDULE:
The machines are available from supplier within one month’s period. The project can be
implemented within six-month period. Subject to construction.

Activity Period Term

Construction of Building, Market tie-up 6 Month
Procurement of machinery and equipment 2 Weeks
Plant erection and Electrification 2 Weeks
Arrangement of raw material including Packaging Material etc. 1 Month
Recruitment of manpower 1 Month
Arrangement of finance (Term loan and working capital) 1 Month
Selection of market channel 1 Month
Miscellaneous works like power/water connection etc. 1 Month

Note: Considering that some of the above activities may be overlapping, the project
implementation will take a total period of 8-12 months approximately for starting the
production.

6. TOTAL CAPITAL COST OF PROJECT:

Total Cost of Project includes capital cost amount required for whole production unit
which are as follows:

Sr. No Description Amount

1. Land Cost 510 Sq Mtr @ Rs. 6000 3060000
2. Building Construction Cost 3520000
3. Machinery & Other Assets 5346320
Total 11926320
7. MATERIAL, PPROCESS, FINSHED GOODS:

 RAW MATERIALS:
The main raw materials for manufacturing Readymade garments are Cotton Fabric,
Blended Fabric, Polyester, Non-Woven Fabric, Trims & Embellishments, Collar, Plastic
Film, Packing Material, Sewing Thread. These fabrics are sold in meter. Fabric and
other materials are available in the wholesale market at different prices depending on
the quality. The amount of raw materials depends on the size of finished garment.
Therefore, an average rate of medium quality raw materials for a single & free size
garment is taken in below table: Main raw material required for Readymade Garments
is the fabric. Both, cotton and blended fabric is used in the products depending on
customer choice and the budget. Cotton fabrics of superior quality are expensive
compared to synthetic or blended fabrics. Raw material is available in almost all towns
of India either directly from the fabric manufacturers or wholesalers. Many mills have
their agents or brokers who book orders from traders and garment factories on regular
basis. Apart from fabric, other inputs are thread, buttons, labels, zippers, pocket &
lining fabric and interlining. The major raw materials for the textile and apparel
industry include cotton, jute, silk, wool and man-made fiber.

 PRODUCTION PROCESS:
 Procurement: Procurement of Dyed/ bleached/printed cotton/synthetic, non-
woven (for healthcare garment) fabrics, as per demand is to be procured from
the open market. The fabric will be inspected by laying on the inspection table
against light before cutting so that unevenness in color/ shade or any other
fault, if any visible in the fabric are eliminated.
 Designing and Pattern Making: As per the selected designs, the patterns are
prepared, checked for accuracy and then master patterns are developed. Then
these patterns are graded into different sizes.
 Cutting: Fabric is placed on the cutting table in layers and then the different
parts of the respective garments are demarked by a chalk as per different sizes
with the help of Patterns. Cutting is carried out by the cutting machine. The
inspected fabric is placed on the cutting table in layers and then the different
parts of the respective garments are demarked by a chalk as per different sizes.
Cutting is carried out by the cutting machine. Stitching is carried out for
individual portion of the garments by skilled workers with the help of over-
lock, lock stitch machines etc.
 Stitching: Stitching is carried out for individual portion of the garments by
skilled workers with the help of different stitch machines. Button Hole &
Button Attaching job will be outsourced.
 Thread Trimming: Unnecessary threads are trimmed
 Washing, Checking, Pressing and Packing: All garments are charged into
washing machine containing mild detergent and washed for 4 hours in order to
remove dirt and stains acquired during the manufacturing process. After
washing, the garments are hydro extracted to remove excess water and after
this, these garments are dried in tumbler dryer. Final checking is done before
pressing and packing on the checking table so that any fault in the piece may be
removed and protruding threads eliminated. The individual pieces are pressed
by steam presses to remove any wrinkle marks and packed in the carton boxes.
  Quality Control & Standard: The quality of garments mainly depends on
quality of fabric used. Therefore, care must be taken while purchasing fabrics
to ensure good colorfastness properties, uniformity in shade etc. Generally,
garments are made as per customer's specification in respect of size, design
and fashion.

 FINISHED GOODS:
In the proposed manufacturing unit finished goods is readymade garments which is
itself a very broad term from top to bottom of the men, women and kids. In the
proposed manufacturing unit finished goods include Shirts, Trousers, T-shirts and
Lowers, Jeans and Jacket.

8. WORKING CAPITAL REQUIRNMENTS:

At the One-month cycle, the project requires working capital for raw material of ₹ 42.03
lacs as detailed below:

Item description Unit Qty Rate Amount

Dyed/ Bleached/Printed Fabric Shirt Mtr. 6000 100 600000
Dyed/ Bleached/Printed Fabric Trouser Mtr. 4875 80 390000
Special Fabric for T-shirts Mtr. 5250 60 315000
Special Fabric for Lowers Mtr. 4875 65 316875
Special Fabric for Jeans Mtr. 4250 250 1062500
Special Fabric for Jacket Mtr. 5860 250 1465000
All types of thread Kgs 8 600 4800
Other items like laze, buttons, Sticker etc. Kgs 15 750 11250
Packing Materials Kgs 45 850 38250
Total 4203675

9. MANPOER/STAFFINGS:
The proposed manufacturing unit needs to recruit 71 people in the various capacities for
specific roles. The unit will further train and orient the recruits in their areas of work for
the smooth operations.

Designation Number Salary (Pm) Amount

Manager cum Production Manager 1 15000 15000
Designer cum Supervisor 3 15000 45000
Cutting Master 3 12000 36000
Skilled Workers 35 10000 350000
Unskilled Workers 14 8000 112000
Marketing Manager 1 12000 12000
Sales Representative 5 10000 50000
Accounts Officer 1 8000 8000
Pressman & Washmen 4 8000 32000
Cleaning Staff & Peon 4 8000 32000
Total 71 692000
10. UTILITIES & OTHER CONTIGENT EXPENSES PER MONTH:

Utilities include the monthly recurring cost directly related to production process, which
are as follows:

Sr. No Description Amount

1. Power Requirements 35000
2. Water Requirements 5000
3. Transportation & Freights 70000
4. Other Miscellaneous Expenses 20000
Total 130000

11. TOTAL WORKING CAPITAL REQUIRNMENTS: Rs. 5025675 Per Month

12. TOTAL COST OF PROJECT:

Total cost of project including Capital cost, working capital requirements and
means of finance thereof.

Cost of Unit
Rs in INR
Description Amount
Land Cost 3060000
Capital Cost (Other than Land) 8866320
Working Capital Requirements 5025675
Total Cost of Unit & Working Capital 16951995
Means of Finance
Description Amount
Down Payments (Part of Own Contributions) 306000
Bank Financial Assistant (Term Loan) 75% of Capital Cost 6650000
Bank Financial Assistant (Cash credit) 75% of Requirements 3750000
Own Contribution (Including Down Payment to GIDA and 6245995
Minimum Margin contribution required by bank in Capital and
Working Capital Requirements and outstanding amount of
GIDA after Down Payments)
Total Means of Finance 16951995

Note: The total projected cost of the business consists of startup cost and working
capital. For Machinery, Building, and other Installation a term Loan and Own
Contribution is Proposed. For the Purpose of Working Capital requirement Cash
Credit would be proposed along with additional contribution from proprietor if
required so. Working Capital Requirements includes cost of Inventory purchases,
Power, fuel, other Utilities, freight, Delivery expenses, Payroll, Taxes, licenses, and
Administrative Cost.
15. ADMINISTRATION COST:
Administration cost includes expenses which are not directly not related to
production but axially to production of unit which are as follows:

Description Amount (Annual)

Bank interest on term Loan (Taken Approx. 11.50 %) of 764750
Term Loan
Bank interest on Cash Credit (Taken Approx. 11.50 %) of 431250
Cash Credit
Depreciation Building @ 10% 412000
Depreciation Plant & Machinery @ 15% 736950
Depreciation Furniture & Fixtures @ 10% 43350
All other Administration cost (it includes GIDA Rentals and 250000
all cost which is not mentioned specially)
Total 2638300

16. ANNUAL TUROVER/REVENUE FROM OPERATION:

In the proposed production unit is considered mainly for the production of Shirts,
Trousers, T-shirt’s and Lowers, Jeans and Jacket.. However, this is not a final list of
production items. Expected annual production as follows.

Products Unit Qty Rate Value ( Rs.)

Shirts Pcs 45000 260 11700000
Trousers Pcs 45000 250 11250000
T- Shirts Pcs 45000 100 4500000
Lower Pcs 45000 110 4950000
Jeans Pcs 45000 550 24750000
Jackets Pcs 20000 650 13000000
Total Turnover Pcs 180000 70150000

17. PROFITABILITY:
Profitability of the proposed unit is as follows.
Particulars Amount
Gross Profit (Sales – Working Capital Cost x 12 Months) 9841900
(Rs. 70150000-Rs. 60308100)
Net Profit Before Tax (Gross Profit – Administration Cost) 7203600
(Rs. 9841900-Rs. 2638300)
Net profit After Tax =Net Profit before Tax – 30% 5042520
(Rs 7203600-Rs. 2161080)

18. RATIO:
Various Relevant ratio of proposed Manufacturing unit is as follows.
GP Ratio= Gross Profit/Sales x100=14.02%
NP Ratio =Net Profit /Sales x100= 7.18 %
Return of Investments: Net Profit/Own Investments = 5042520/6245995= 80.7%
19. BREAK- EVEN ANALYSIS:
FIXED COST (Per Annum)
Description Amount
Total Depreciation (Building & P& M and Furniture) 1192300
Interest on Term Loan 764750
Salary (40% of Total Salary) 3321600
Utilities (40 % of Total Utilities) 624000
Total 5902650

Break Even Point:

Fixed Cost 5902650

--------------------- X100 ---------------X 100 = 53.92%
Fixed Cost + Net Profit 5902650+5042520

20. POWER, WATER, & UTILITIES REQUIRNEMNTS:

 Power: The power requirement is 35 KW.

 Manpower: Labor requirement stated above.
 Water: Water is required for human consumption and utilities work
The proposed location is under the Estate of GIDA Gorakhpur, Uttar Pradesh,
where industrial electricity is available mostly.

21. WATER REQUIRMENTS:

The Proposed unit does not have much water requirements for production Apart
from this Unit want to plant trees and other beautiful greenery in front are of unit
keeping in mind the other rules and regulation provided by the authority for the
same it requires water. Unit also had requirement of water connection inside in
order to supply for labors and other personnel working in the proposed unit along
with RO system. Unit Requires some water in Utilities work like cleaning of dirty
fabrics and cloths.

22. POLLUTION AND ENVIROMENTL IMPACTS:

The process of manufacture does not generate pollution. However, entrepreneurs
are to contact State Pollution Control Board for necessary guidance. Maximum
care should be taken while selecting the machinery and other electrical
equipment’s so as to ensure minimum power consumption. Propose
Manufacturing plan total electricity consumption plant not producing any type of
Bye Products, Gases, Liquids or other Form which can harm, damage the
environment in any manner.
23. REGISTRATION REQUIRES:
The entrepreneur needs to obtain following registrations and licenses from
government authorities:
 Approval From GIDA
 Udyog Aadhaar MSME registration
 GST Registration
 NOC from Pollution Control Board (If Required So by Authority)
 Bureau of Energy Efficiency certification/ ISO/ Quality Control

However, specific license and registration requirements will depend on the

manufacturing process and the type of Manufacturing of Readymade Garments
that is being produced same shall be taken from time to time if so being applicable.

24. CONCLUSION:

Readymade Garments Manufacturing Unit is a commercial production unit to be

established at Industrial Estate under Industrial Estate of GIDA Gorakhpur, Uttar
Pradesh which requires a financial investment worth of Rs.169.51 Lacs.

Propose Manufacturing plan total electricity consumption plant not producing any
type of Bye Products, Gases, Liquids or other Form which can harm, damage the
environment in any manner except a DG set which would be latest sound proof
and less carbon emission machine if required so in future.

As a forward-looking concern unit is a socially responsible firm, we would bring

about benefits to the local community and our customers. We will create
employment to around 71 people and contribute to the nation’s economy in the
form of taxes.

The proposed unit will give satisfaction salary and allowances with commission to
the employees as they are bedrock of our business and our success depends on the
level of satisfaction, they derive working in the business house.

The business house will accord top priority to our customers and deliver high
quality and timely services, and products. Through an expansive marketing
strategy unit will create a unique brand for itself. The proposed unit would earn
profit of 7.18 % on an average. It is assured and guaranteed that the proposed unit
would make more profit once it starts production and marketing than as it is
aforementioned. The proposed business is feasible due to its strategic investment
and operational plans.