PROJECT REPORT

Of

PATCHWORK FABRICS UNIT

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Patchwork Fabrics unit.

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 AT A GLANCE

1 Name of the Entreprenuer xxxxxxxxxx

2 Constitution (legal Status) : xxxxxxxxxx

3 Father / Spouse Name xxxxxxxxxxxx

4 Unit Address : xxxxxxxxxxxxxxxxxxxxxxx

District : xxxxxxx
Pin: xxxxxxx State: xxxxx
Mobile xxxxxxx

5 Product and By Product Patchwork Fabric

6 Name of the project / business activity proposed : Patchwork Fabric Unit

7 Cost of Project :Rs.10.31 Lakhs

8 Means of Finance
Term Loan Rs.7.11 Lakhs
Own Capital Rs.1.03 Lakhs
Working Capital Rs.2.17 Lakhs

9 Debt Service Coverage Ratio : 2.59

10 Pay Back Period : 5 Years

11 Project Implementation Period : 5-6 Months

12 Break Even Point : 49%

13 Employment : 10 Persons

14 Power Requirement : 2.00 KW

15 Major Raw materials : Major raw materials used are fabric and thread etc.

16 Estimated Annual Sales Turnover (Max Capacity) : 48.86 Lakhs

17 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lakhs)

Particulars Amount
Land Own/Rented
Plant & Machinery 1.90
Civil Work 4.00
Furniture & Fixtures 2.00
Working Capital 2.41
Total 10.31
MEANS OF FINANCE
Particulars Amount
Own Contribution 1.03
Working Capital(Finance) 2.17
Term Loan 7.11
Total 10.31
 PATCHWORK FABRICS UNIT

Introduction:
Patchwork is a print trend rather than a fabric trend. In the distinctive way the
printed materials are placed in the patchwork design gives the outfit a distinct
personality. Print-on-print and patchwork are not the same thing. There isn't much
of a distinction between patchwork and print-on-print, as both provide the wearer
with a unique experience. Though there isn't much of a distinction between
patchwork and print-on-print, both provide the user with a variety of colours and
prints to choose from. Patchwork prints, on the other hand, are intelligently and
imaginatively made as one piece by stitching multiple pieces of print cloth
together, unlike layered prints. It may appear to be mismatched bits of fabric at
first glance, but putting together different pieces of cloth and turning them into a
beautiful outfit that is designed to look that way takes a lot of thinking. Patchwork
is a craft that promotes recycling and, as a result, has several environmental
advantages. There is no need to produce these textiles from raw materials because
existing fibres and fabrics may be reused (such as cotton, wool, and synthetic
fibres). This reduces the amount of energy consumed and pollutants produced in
production operations like as dying, washing, and scouring.
Uses & Market Potential:

Patchwork, often known as "pieced work," is a type of needlework in which pieces of

cloth are sewn together to make a bigger design. The bigger design is often made up of
recurring patterns made up of various fabric forms (which can be different colours).
These basic geometric shapes have been carefully measured and cut, making them simple
to piece together. Patchwork is most often used to make quilts, butit can also be used to
make rugs, bags, wall-hangings, warm jackets, cushion covers, skirts, waistcoats and
other items of clothing. Patchwork patterns were used with square patterned wall tiles
by brands like D&G, creating a gypsy atmosphere, and patchwork designs have been a
popular motif for numerous design companies since then. Patchwork with tribal patterns
and geometrical motifs is very popular. Metallic studs, sheer ruffles, mesh, embroidery,
pleats, and leather are just a few of the embellishments that may be used to create a
stunning look. The global decorated apparel market size was valued at USD 26.75 billion
in 2018 and is anticipated to expand at a CAGR of 10.91% over the forecast period of
2019 to 2025. Increasing demand for embroidery, screen printing, sublimation, and heat
transfer works on apparel is driving the growth of the market. With the growing
popularity of personalised t-shirts and tops, demand for clothing printing is rising,
resulting in market expansion. Furthermore, market growth will be fuelled by product
and technical advancements, particularly in the women's apparel sector. Over the
projected period, the rising trend of patchwork and vintage logo designs is likely to
enhance product demand.

Product:
PATCHWORK FABRIC

Raw Material:
1. Cotton Fabric: Pieces of cotton fabric is the basic material used for making
the applique patchwork.
2. Scissor: Scissor is used for cutting extra fabric and thread.
3. Thread: Thread is used for stitching the pieces of fabric together.
4. Needle: Needle is used for sewing the fabric.
Manufacturing Process

Fabric
Stitching Finishing
Procurement

Designing Pressing

Measuring Preparation

Fig. 1 – Process Flowchart

Area:
The setup requires space for manufacturing unit. Also, some of the area of building is
required for office staff facilities, documentation, office furniture, etc. Thus, the
approximate total area required for complete small-scale factory setup is 1000 Sq. ft.
approximately.
Cost of Machines:
S No. Machine Price (INR)
1. Scissors. 10,000/-
2. Sewing Machine 75,000/-
3. Rotary Cutter 5000/-
4. Fabric Cutting Table 1,00,000
Total 1,90,000/-

Power Requirement- - The estimated Power requirement is taken at 2

KW.

Manpower Requirement– Following manpower is required:

• Skilled/unskilled worker-6
• Manager- 1
• Helper- 2
• Sales Personal- 1

FINANCIALS
PROJECTED BALANCE SHEET

PARTICULARS I II III IV V

SOURCES OF FUND
Capital Account
Opening Balance - 1.49 2.50 3.68 4.98
Add: Additions 1.03 - - - -
Add: Net Profit 1.36 2.51 3.68 4.80 5.56
Less: Drawings 0.90 1.50 2.50 3.50 4.20
Closing Balance 1.49 2.50 3.68 4.98 6.34
CC Limit 2.17 2.17 2.17 2.17 2.17
Term Loan 6.32 4.74 3.16 1.58 -
Sundry Creditors 0.70 0.78 0.85 0.93 1.01

TOTAL : 10.69 10.19 9.86 9.66 9.52

APPLICATION OF FUND

Fixed Assets ( Gross) 7.90 7.90 7.90 7.90 7.90

Gross Dep. 1.09 2.02 2.82 3.51 4.10
Net Fixed Assets 6.82 5.88 5.08 4.39 3.80

Current Assets
Sundry Debtors 1.57 1.81 2.01 2.22 2.44
Stock in Hand 1.55 1.73 1.91 2.11 2.31
Cash and Bank 0.76 0.77 0.86 0.94 0.97

TOTAL : 10.69 10.19 9.86 9.66 9.52

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS I II III IV V

A) SALES
Gross Sale 31.32 36.18 40.22 44.45 48.86

Total (A) 31.32 36.18 40.22 44.45 48.86

B) COST OF SALES

Raw Material Consumed 14.04 15.51 17.04 18.62 20.26

Elecricity Expenses 0.36 0.39 0.42 0.45 0.48
Repair & Maintenance 0.13 0.14 0.16 0.18 0.20
Labour & Wages 9.07 9.98 10.98 12.07 13.28
Depreciation 1.09 0.93 0.80 0.69 0.59
Cost of Production 24.68 26.96 29.40 32.02 34.81

Add: Opening Stock /WIP - 1.08 1.21 1.34 1.49

Less: Closing Stock /WIP 1.08 1.21 1.34 1.49 1.63

Cost of Sales (B) 23.60 26.83 29.27 31.88 34.67

C) GROSS PROFIT (A-B) 7.72 9.35 10.96 12.58 14.19

24.64% 25.83% 27.24% 28.29% 29.04%
D) Bank Interest i) (Term Loan ) 0.77 0.63 0.46 0.28 0.11
ii) Interest On Working Capital 0.24 0.24 0.24 0.24 0.24
E) Salary to Staff 3.78 4.16 4.57 5.03 5.53
F) Selling & Adm Expenses Exp. 1.57 1.81 2.01 2.22 2.44

G) TOTAL (D+E+F) 6.36 6.84 7.28 7.77 8.32

H) NET PROFIT 1.36 2.51 3.68 4.80 5.87

4.3% 6.9% 9.1% 10.8% 12.0%
I) Taxation - - - - 0.31

J) PROFIT (After Tax) 1.36 2.51 3.68 4.80 5.56

PROJECTED CASH FLOW STATEMENT

PARTICULARS I II III IV V

SOURCES OF FUND

Own Contribution 1.03 - - - -

Reserve & Surplus 1.36 2.51 3.68 4.80 5.87
Depriciation & Exp. W/off 1.09 0.93 0.80 0.69 0.59
Increase In Cash Credit 2.17 - - - -
Increase In Term Loan 7.11 - - - -
Increase in Creditors 0.70 0.07 0.08 0.08 0.08

TOTAL : 13.46 3.52 4.55 5.57 6.54

APPLICATION OF FUND

Increase in Fixed Assets 7.90 - - - -

Increase in Stock 1.55 0.18 0.19 0.19 0.20
Increase in Debtors 1.57 0.24 0.20 0.21 0.22
Repayment of Term Loan 0.79 1.58 1.58 1.58 1.58
Taxation - - - - 0.31
Drawings 0.90 1.50 2.50 3.50 4.20
TOTAL : 12.70 3.50 4.47 5.49 6.51

Opening Cash & Bank Balance - 0.76 0.77 0.86 0.94

Add : Surplus 0.76 0.01 0.09 0.08 0.03

Closing Cash & Bank Balance 0.76 0.77 0.86 0.94 0.97
COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS I II III IV V

Finished Goods
(10 Days requirement) 1.08 1.21 1.34 1.49 1.63
Raw Material
(10 Days requirement) 0.47 0.52 0.57 0.62 0.68

Closing Stock 1.55 1.73 1.91 2.11 2.31

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Amount Margin(10%) Net

Amount
Stock in Hand 1.55
Less:
Sundry Creditors 0.70
Paid Stock 0.85 0.08 0.76

Sundry Debtors 1.57 0.16 1.41

Working Capital Requirement 2.17

Margin 0.24

MPBF 2.17
Working Capital Demand 2.17
REPAYMENT SCHEDULE OF TERM LOAN 11.0%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

I Opening Balance
Ist Quarter - 7.11 7.11 0.20 - 7.11
Iind Quarter 7.11 - 7.11 0.20 - 7.11
IIIrd Quarter 7.11 - 7.11 0.20 0.40 6.72
Ivth Quarter 6.72 - 6.72 0.18 0.40 6.32
0.77 0.79
II Opening Balance
Ist Quarter 6.32 - 6.32 0.17 0.40 5.93
Iind Quarter 5.93 - 5.93 0.16 0.40 5.53
IIIrd Quarter 5.53 - 5.53 0.15 0.40 5.14
Ivth Quarter 5.14 5.14 0.14 0.40 4.74
0.63 1.58
III Opening Balance
Ist Quarter 4.74 - 4.74 0.13 0.40 4.35
Iind Quarter 4.35 - 4.35 0.12 0.40 3.95
IIIrd Quarter 3.95 - 3.95 0.11 0.40 3.56
Ivth Quarter 3.56 3.56 0.10 0.40 3.16
0.46 1.58
IV Opening Balance
Ist Quarter 3.16 - 3.16 0.09 0.40 2.77
Iind Quarter 2.77 - 2.77 0.08 0.40 2.37
IIIrd Quarter 2.37 - 2.37 0.07 0.40 1.98
Ivth Quarter 1.98 1.98 0.05 0.40 1.58
0.28 1.58
V Opening Balance
Ist Quarter 1.58 - 1.58 0.04 0.40 1.19
Iind Quarter 1.19 - 1.19 0.03 0.40 0.79
IIIrd Quarter 0.79 - 0.79 0.02 0.40 0.40
Ivth Quarter 0.40 0.40 0.01 0.40 0.00
0.11 1.58

Door to Door Period 60 Months

Moratorium Period 6 Months
Repayment Period 54 Months
CALCULATION OF D.S.C.R
PARTICULARS I II III IV V

CASH ACCRUALS 2.45 3.44 4.48 5.49 6.15

Interest on Term Loan 0.77 0.63 0.46 0.28 0.11

Total 3.22 4.07 4.93 5.77 6.26

REPAYMENT
Principal Repayment of Term Loan 0.79 1.58 1.58 1.58 1.58
Interest on Term Loan 0.77 0.63 0.46 0.28 0.11

Total 1.56 2.21 2.04 1.86 1.69

DEBT SERVICE COVERAGE RATIO 2.06 1.84 2.42 3.10 3.71

AVERAGE D.S.C.R. 2.59

Assumptions:

1. Production Capacity of Patchwork Fabrics unit is taken at 120 MTR per day.
First year, Capacity has been taken @ 60%.
2. Working shift of 10 hours per day has been considered.
3. Raw Material stock and Finished goods closing stock has been taken for 10 days.
4. Credit period to Sundry Debtors has been given for 15 days.
5. Credit period by the Sundry Creditors has been provided for 15 days.
6. Depreciation and Income tax has been taken as per the Income
tax Act, 1961.
7. Interest on working Capital Loan and Term loan has been taken at 11%.
8. Salary and wages rates are taken as per the Current Market Scenario.
9. Power Consumption has been taken at 2 KW.
10.Selling Prices & Raw material costing has been increased by 3% & 2%
respectively in the subsequent years
 DISCLAIM ER

The views expressed in this Project Report are advisory in nature. SAMADHAN assum e
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.