Comfort Jeans Prepared by Lalitsingh Jodha (section B) Vandana singh (section B) ACADEMIC YEAR-- 2009-2011 PROGRAM – PGPM UNITED WORLD SCHOOL OF BUSINESS (AHMEDABAD)
Project report on starting a new business.... ( Comfort Jeans)
Nov 18, 2014
Project report on starting a new business.... ( Comfort Jeans)
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Comfort Jeans Prepared by
Lalitsingh Jodha (section B)
Vandana singh (section B)
ACADEMIC YEAR-- 2009-2011
PROGRAM – PGPM
UNITED WORLD SCHOOL OF BUSINESS
(AHMEDABAD)
Submitted to
Gautam 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.
no.Material Sources
1 Denim Cloth Mumbai2 Cotton Cloth Ahmedabad3 Thread Sirmour4 Button Delhi5 Rivet Delhi6 Zip Delhi7 Stickers Ahmedabad8 Plastic Ahmedabad9 Washing acid Ahmedabad
INPUTS
Materials
Labour
Capital
Energy
OUTPUTS
Products
Service
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 Completion 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 &
equipments
1 month
7 Erection & commissioning including
electrification
1 month
8 Recruitment of personnel & Labour 2 month
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
Total 19,00,000
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. Particulars Amount (Rs)
1 Land & Building 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 RequirementsRaw 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
3 Thread - 15,000 1,80,000
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
7Pocketing
Clothes500 m 8 4,000 48,000
8 Plastic Box 2700 2 5,400 64,800
9Washing
Acid500 lt 20 10,000 1,20,000
Total 4,33,100 51,97,200
Utility
No. Particulars Qty. Rate Monthly Annually
1 Electricity 1000KWH 5 10,000 1,20,000
2 Water - - 1,500 18,000
Total 11,500 1,38,000
Man Power RequirementsMan Power Requirements
TOP LEVEL
No. Particulars No. of Employees
MonthlySalary
Yearly Salary
1 Manager 2 14,000 1,68,000
2 Accountant 1 5,000 60,000
3 Designers 1 5,000 60,000
Total 24,000 2,88,000
MIDDLE LEVEL
No. Particulars No. of
Emp.
Monthly
Salary
Yearly
Salary
1 Salesman 5 15,000 1,80,000
2 Clerk & computer
operator
1 2,500 30,000
3 Store keeper 2 3,000 36,000
Total 20,500 2,46,000
Lower LevelNo. Particulars No. of
Emp.MonthlySalary
Yearly Salary
1 Stain stitch machine
Operator
6 15,000 1,80,000
2 Simple stitch machine
Operator
10 20,000 2,40,000
3 Folding machine Operator 1 1,500 2,40,000
4 Washing machine Operator 1 1,200 18,000
5 Cutting & Fitting machine
Operator
1 1,500 14,400
6 Embroidery machine
Operator
2 3,000 36,000
7 Over Lock machine
Operator
1 1,500 18,000
8 Printing machine Operator 1 1,500 18,000
9 Iron Machine Operator 1 1,200 14,400
10 Packing machine Operator 1 1,200 14,400
11 Watchman 2 2,900 34,800
Total 50,500 606000
Level Of ManagementLevels Of Management Monthly
Salary Annual Salary
Top Level 24,000 2,88,000
Middle Level 20,500 2,46,000
Lower Level 50,500 6,06,000
Total 95,100 11,40,000
Other Administrative ExpensesOther Administrative Expenses
Total Working CapitalTotal Working Capital
No. Particular Monthly Annually
1 Raw Material 4,17,700 50,12,400
2 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
Total 5,30,500 64,26,000
No. Particular Monthly Annually
1 Telephone 1,500 18,000
2 Postage & stamp Duty 500 6,000
3 Advertising & Marketing 7,000 84,000
4 Consumer stores 1,200 14,400
5 Miscellaneous 1,000 12,000
Total 11,200 1,34,400
No. Particular Monthly Annually
1 Raw Material 4,17,700 50,12,400
2 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
Total 5,30,500 64,26,000
Total Cost of ProjectTotal 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 FundSources 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
InterestInterest
No. Particulars Percentage Amt. (Rs.)1 Owned 9.5 % 3,44,365
2 Borrowed Loan (SBS) 12.5 % 3,02,075
Total 6,43,498
DepreciationDepreciation
Maintenance & RepairMaintenance & Repair
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
Cost of ProductionCost 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
No. Particulars Amt. (Rs.)1 Raw Material 51,97,200
2 Utilities 1,38,000
3 Manpower 11,40,000
4 Repairs & Maintenance 1,97,500
Total 66,72,700
Cost AnalysisCost Analysis
Profitability AnalysisProfitability 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
written off
50,000
Man Power (Middle & Top level) 5,34,000
Interest on capital 6,43,498
Depreciation 6,90,000
Repairs & Maintenance 1,97,500 21,14,998
Total Cost 82,26,598
Particulars Amt. (Rs.) Amt. (Rs.)
Sales 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 61,11,600
Contribution 27,03,400
(Less) Fixed Cost
Manpower 5,34,000
Depreciation 6,80,000
Maintenance & Repairs 1,97,500
Insurance 20,000
Int. on loan 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 small-
scale 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
suffers loss in called Break-even point.
No. Particulars Amt. (Rs.)
1 Sales 88,15,000
2 Variable cost 61,11,600
3 Fixed Cost 20,74,998
BEP = Fixed Cost
Contribution
= 20, 74,998 x 60% =46.05%.
27, 03,400
BEP (Rs.) = Fixed cost x sales
Contribution
= 20, 74,998 x 88, 15,000=67, 65,512Rs.
27, 03,400
Return on Investment
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 x 100 88, 15,000
= 4.63%
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 fashionable garments increases day by day especially Jeans.
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.
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