Project report on starting a new business.... ( Comfort Jeans)

Comfort Jeans Prepared by Lalitsingh Jodha (section B) Vandana singh (section B)

✔

ACADEMIC

YEAR--

2009-2011

✔

PROGRAM – PGPM

✔ UNITED WORLD SCHOOL

OF

BUSINESS (AHMEDABAD)

Sub mitted to Gauta m shukhla

 Name of the firm  Comfort Jeans

 Address of the company  “Comfort Jeans”, Sector 28, G- 1875 GIDC Gandhinagar (Gujarat)

 Scale of the organization  Small scale industry

 Nature of the product 

Garments (Jeans)

 Estimated cost of the project  60,41,500

 Market Area  Limited to Gujarat

 Raw Material:

The main raw materials required to produce the Jeans are Denim & cotton clothes, thread, button, rivet, zip, stickers.

 Product & its use:

The popularity and the demand of Jeans are increasing day by day. Jeans have left behind the tailor made cloth. Consumer can wear Jeans casually with shirt or short shirts & T-shirts. Today,

consumers wear Jeans even with blazers. Even in villages people have started wearing Jeans. Each & every class of people wears Jeans. So, we can say that it can be matched in any style and it can be change your style.

Generally, the raw material of Jeans is available from outside Gujarat.

Sr.

Material

Sources

1

Denim Cloth

Mumbai

2

Cotton Cloth

Ahmedaba d

3

Thread

Sirmour

4

Button

Delhi

no.

INPUTS

5

Rivet

Delhi

6

Zip

Delhi

7

Stickers

Ahmedaba d

8

Plastic

Ahmedaba d

9

Washing acid

Ahmedaba d

OUTPUTS

Materials Labour

Products

Capital

Service

Energy

Information

PRODUCTION FUNCTION

Cutting Process

Produces the Jeans in the following steps ocess

Over lock

Embroidery Work

Stitching Process

Fitting

Washing

Ironing

Folding

Packing

Storing

I take maximum one and half year to implement this type of project the time required for completing each activity of the project till commercial production is as follows:

No.

Activity

Completi on Time

1

Preparation of Project

1 month

2

Selection of a site

2 months

3

Registration of SSI

1 month

4

Availability of finance

3 months

5

Construction of building

6 month

6

Arrangement of machines & 1 month equipments

7

Erection

&

commissioning 1 month

including electrification 8

Recruitment of personnel & 2 month

Labour

Details of Land & Building No.

Particulars

Area

Rate

Total

1

Land

1400 yards

321

4,50,000

2

Building

2000 sq. ft.

350

7,00,000

Total

11,50,000

Details of Plant & Machinery No.

Particulars

Qty.

Amount (Rs)

1

Simple stitch machine

10

2,00,000

2

Chain stitch machine

6

4,80,000

3

Folding machine

1

1,50,000

4

Stain removing machine

1

70,000

5

Washing machine

2

3,00,000

6

Cutting machine

1

2,00,000

7

Fitting machine

1

1,00,000

8

Embroidery machine

2

1,00,000

9

Iron

1

25,000

10

Printing machine

1

75,000

11

Over lock machine

2

1,00,000

12

Logo-making machine

1

25,000

13

Handling equipment

-

75,000 19,00,000

Total

Other Fixed Assets No.

Particulars

Qty.

Amount (Rs)

1

Delivery Van

2

5,00,000

2

Furniture

-

3,50,000

3

Computer

2

50000

Total

9,00,000

Preliminary, Pre-operative & miscellaneous expenses Rs. 5, 00,000

Total Fixed Assets No. 1

Particulars Land & Building

Amount (Rs) 11,50,000

2

Plant & Machinery

19,00,000

3

Other Fixed Assets

9,00,000

4

Preliminary & miscellaneous Exps.

5,00,000

Total

44,50,000

Raw Material Requirements

No.

Particulars

Qty.

Rate

Monthly

Annually

1 Denim cloth

3000 m

80

2,40,000

28,80,000

2 Cotton cloth

1500 m

60

1,20,000

14,40,000

-

15,000

1,80,000

3 Thread 4 Button

6000

0.7

4,200

50,400

5 Zip

5000

4.8

24,000

2,88,000

6 Stickers

7000

1.5

10,500

1,26,000

500 m

8

4,000

48,000

2700

2

5,400

64,800

500 lt

20

10,000

1,20,000

Pocketing 7 Clothes 8 Plastic Box 9

Washing Acid

Total

4,33,100 51,97,200

Utility No.

Particulars

1

Electricity

2

Water

Qty.

Rate

1000KWH

5

10,000

1,20,000

-

-

1,500

18,000

11,500

1,38,000

Total

Monthly

Annually

Man Power Requirements TOP LEVEL No.

Particulars

No. of

Monthly

Employees

Salary

Yearly Salary

1

Manager

2

14,000

1,68,000

2

Accountant

1

5,000

60,000

3

Designers

1

5,000

60,000

24,000

2,88,000

Total

MIDDLE LEVEL No.

Particulars

No. of

Monthly

Emp.

Salary

Yearly Salary

1

Salesman

5

15,000

1,80,000

2

Clerk & computer

1

2,500

30,000

2

3,000

36,000

20,500

2,46,000

operator 3

Store keeper Total

Other Administrative Expenses Lower Level No.

1

Particulars

Stain stitch machine

Monthly

Yearly

Salary

Salary

6

15,000

1,80,000

10

20,000

2,40,000

No. of Emp.

Operator

2

Simple stitch machine Operator

3

Folding machine Operator

1

1,500

2,40,000

4

Washing machine Operator

1

1,200

18,000

5

Cutting & Fitting machine

1

1,500

14,400

2

3,000

36,000

1

1,500

18,000

Operator

6

Embroidery machine Operator

7

Over Lock machine

Level Of Management

Operator

Management PrintingOf machine Operator 8 Levels 9 10 11

Iron Machine Operator

Top Level

Packing machine Operator

Middle Level Watchman

Lower Level

Total

Total

Monthly 1 1,500Annual 18,000 Salary Salary 1 1,200 14,400 24,000 2,88,000 1 1,200 14,400 20,500 2,46,000 2 2,900 34,800 50,500 6,06,000 606000 50,500 95,100 11,40,000

Total Working Capital

No.

Particular

1 Telephone

Monthly

Annually

1,500

18,000

500

6,000

3 Advertising & Marketing

7,000

84,000

4 Consumer stores

1,200

14,400

5 Miscellaneous

1,000

12,000

11,200

1,34,400

2 Postage & stamp Duty

Total

No.

Particular

1

Raw Material

2

Monthly

Annually

4,17,700

50,12,400

Utility

11,500

1,38,000

3

Wages & salary

95,100

11,41,200

4

Administrative Exp.

11,200

1,34,400

5

Other contingencies

3,000

36,000

5,30,500

64,26,000

Total

Total Cost of Project

No.

Particulars

Amt. (Rs.)

1

Total Fixed Capital

44,00,000

2

Total Working Capital

17,28,000

Total

61,28,000

Sources of Fund

No.

Particulars

Percentage

Amt. (Rs.)

1

Owned Capital

60 %

36,24,900

2

Borrowed Capital

40 %

24,51,200

Total

60,41,500

Interest No. 1

Particulars Owned

Percentage 9.5 %

Amt. (Rs.) 3,44,365

2

Borrowed Loan (SBS)

12.5 %

Total

Depreciation

Maintenance & Repair

3,02,075 6,43,498

No.

Particular

Value

Rate

Amt.

1

Building

11,50,000

15%

1,72,500

2

Machinery

19,00,000

20%

3,80,000

3

Other Fixed Assets

8,50,000

15%

1,27,500

4

Computer

50,000

20%

10,000

Total

6,90,000

No.

Particulars

1

Raw Material

2

Utilities

3

Manpower

4

Repairs & Maintenance

Amt. (Rs.) 51,97,200 1,38,000 11,40,000 1,97,500

Total

66,72,700

Cost of Production No.

Particular

Value

Rate

Amt.

1

Building

11,50,000

5%

57,500

2

Machinery

19,00,000

5%

95,000

3

Other Fixed Assets

9,00,000

5%

45,000

Total

1,77,500

Cost Analysis

Particulars

Amt. (Rs.)

Amt. (Rs.)

Variable Cost Raw Material Denim Cloth

28,80,000

Cotton Cloth

14,40,000

Thread

1,80,000

Button

50,400

Zip

2,88,000

Stickers

1,26,000

Pocketing Clothes

48,000

Plastic box

64,800

Washing Acid

1,20,000

Other contingency

36,000

52,33,200

Semi Variable Cost Utilities

1,38,000

Administrative Exps.

1,34,400

Man Power (Lower Level)

6,06,000

8,78,400

Fixed Cost Preliminary

&

Pre-operative

expenses

50,000

written off Man Power (Middle & Top level)

5,34,000

Interest on capital

6,43,498

Depreciation

6,90,000

Repairs & Maintenance

1,97,500

Total Cost

21,14,998

82,26,598

Profitability Analysis

Particulars

Amt. (Rs.)

Sales

Amt. (Rs.) 88,15,000

(Less) Variable Cost Raw Material

51,97,200

Utilities

1,38,000

Manpower

6,06,000

Admin. Exp.

1,34,400

Other contingencies

36,000

Contribution

61,11,600 27,03,400

(Less) Fixed Cost Manpower

5,34,000

Depreciation

6,80,000

Maintenance & Repairs

1,97,500

Insurance Int. on loan

20,000 6,43,498

20,74,998

Profit Before Tax (PBT)

6,28,402

(Less) 35% Tax

2,19,941

Profit After Tax (PAT)

4,08,461

Break-even analysis is a scientific analysis, which leads producers towards more systematic and scientific production planning or sales planning. It is because of break-even analysis that the firm can accordingly work out the required size of the plant. By break even analysis the smallscale entrepreneur can get proper guidelines about volume of sales to be achieved to avoid the danger of loss. Break-even analysis indicates a point where total revenues are equal total cost. It means a volume of sales where firm earns neither profit nor No.

Particulars

Amt. (Rs.)

1

Sales

88,15,000

2

Variable cost

61,11,600

3

Fixed Cost

20,74,998

suffers loss in called Break-even point.

BEP

=

Fixed Cost

Contribution = 46.05%. 27, 03,400

20, 74,998

BEP (Rs.)

=

x 60%

Fixed cost

=

x

sales

Contribution =

20, 74,998

65,512 Rs. 27, 03,400

Return on Investment

x 88, 15,000=67,

ROI

=

EBIT

x

100

Project Cost =

12, 71.900 x 100 60, 41, 500 = 21.05%

EBIT

=

PBT

+ TOTAL INTEREST

=

6, 28,402 + 6, 43,498

=

12, 71,900

Net Profit Ratio NPR

=

PAT

x 100

Sales

=

4, 08,461 = 4.63%

x 100 88, 15,000

Fixed Assets Turnover Ratio F.A.T.R.

=

Sales

Fixed Assets

=

88, 15,000

=

2.23%

39, 50,000

Today’s generation is very much conscious about the garments.

The

consumption

of

new

increases day by day especially Jeans.

fashionable

garments

A Jeans became popular garment in all over the world. So, the demand increases day by day and the fashion trend changes every day in jeans. At present take an example of world leading Jeans producing company Wrangles, Lee, GAP, Flying machine etc. have launched the range Jeans trend. So, the Jeans is a forever product in the garments. It indicate that the demand of the Jeans will increase in India as well as foreign culture the company has wide spread market.

It indicates future expansion and development of the project according to proposed project is considered to have better prospects.