MANORMA

GOSAIPUR, HARIHARPUR, VARANASI

PROJECT
REPORT

PROJECT REPORT ON
SETTING UP
MANUFACTURING UNIT OF
SAREE
 PROJECT REPORT
ON
SETTING UP MANUFACTURING UNIT OF SAREE

MANORMA
Proprietor: MANORMA

MANORMA Page 1
 PROJECT AT A GLANCE
Name & Address of Unit:
MANORMA
Gosaipur, Hariharpur, Varanasi-221405
Activity: Manufacturing of Saree
Constitution: Proprietorship
Proprietor: Manorma W/o Arvind Pratap Singh
Scheme: PMEGP
B.E.P in 3rd Year: 38.26%
AVERAGE DSCR: 4.03
Total Project Cost: 25.00 Lacks
Own Contribution: 1.25 Lacks
GOVT SUBSIDY @ 25%: 6.25 Lacks
Total Bank Loan: Term Loan: 14.25 Lacks
Working Capital Loan: 9.50 Lacks

MANORMA Page 2
 ASSUMPTION /FACTORS/CONSIDERED IN PROJECT PREPEARTION
 There will be more than 5 people in Full/part time employment.

 Interest rate on term Loan & Working capital loan: 11.75%

 Depreciation will be charged at 15% per annum on Plant & Machinery

on written down value method.

 It Will be assumed that government subsidy will be 25% of total

project cost.

 It has been assumed that government subsidy will be kept as FDR in

the name of the proprietor for the first 2 year & thereafter it will be
adjusted through CC & term Loan at the end of 3rd Year.

 It has been assumed that the term loan will be repaid in 60 monthly
installments.

 It has been assumed that interest on term loan & cash credit will be
charged only on that amount of loan which is remaining after
adjustment of subsidy received by the Govt.

 It has been assumed that proprietor own contribution will be 5% of the

total project cost.

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 INTRODUCTION
Saree had been adored throughout India for centuries. Despite the fact that the desire
has waned over time, saree nevertheless maintains a sizable market share among
Indian women’s clothing. In the Indian market, there is a broad spectrum of sarees
starting from INR 100 to INR 100000 with over 100 different styles, colors, patterns &
fabric kinds.

In the ladies clothing market, the saree is by far the most famous garment in the
country. The retail valuation of India’s women’s wear industry was approximated to be
around 156,400 crores in 2023, with saree account for roughly a third about that, or
well almost INR 48,000 crore. This sector is anticipated to expand at a CAGR of 5% to
6% between 2023 & 2028, because of to increased demand for the saree from
numerous regions across the country.

Cotton believes to be the most common material for sarees, but that has evolved over
the years, with artificial/blended materials currently contributing for nearly 72% of the
whole market, cotton contributing for 26% & silk contributing for roughly 2% of total
fiber usage. MMF & mixed fibers grown in prominence owing to their superior look &
reduced price when contrasted to cotton & silk. Nevertheless, as climatic conditions
change, ladies are choosing sarees made of silk or even other comparable fibers like
viscose.

Scope of the Project

The envisaged project is to set up the manufacturing unit of saree. The Project cost is
estimated of Rs 25.00 lakhs. The installed capacity is 100-120 sarees per day with 12
working hours in a day and 300 working days in a year. The operating capacity is
assumed 80%, 85% and 90% in first, second and conceding year operations, The unit is
eligible all incentives as per PMEGP Scheme

MANORMA Page 4
 DESIRED QUALIFICATION FOR PROMOTER
There is no specific need in qualification for setting up saree manufacturing unit.

Market Potential

One of the main causes for the rise of sarees in India is the internet market. Because
sarees are mostly worn in rural regions, wherein internet access is rising by the day,
this would open up new revenue streams for shareholders in the Indian saree business.

E-commerce has become an essential means of buying due to the rising prevalence of
the internet, the increasing spending capacity of women, strong brand awareness &
taste in fashion.

Consumers are becoming more conscious of brands & as a result they are considering
alternatives depending not just on price as well as on brand.

Many internet sites are developing concepts for customizing Indian women’s clothing.
As a result, like all other areas of the women’s clothing industry, the saree segment is
set to alter dramatically in the coming years.

COST OF PROJECTS DETAILS

COST OF PROJECT Total
Power loom Machine 15,00,000
WORKING CAPITAL 10,00,000
25,00,00
TOTAL (A):
0
MEANS OF FINANCE  
PROMOTER CONTRIBUTION (5%) 1,25,000
WORKING CAPITAL LOAN 9,50,000
Term Loan 14,25,000
TOTAL (B): 25,00,000

MANORMA Page 5
 LIST OF PLANT AND MACHINERY/FURNITURES & FIXTURES

Name Details Supplier Amount

      (In Rs.)
Power loom Machine 15,00,000
   

 TOTAL     15,00,000

TERM LOAN ASSESSMENT

Particulars Cost Eligibility as per Bank Norms Actual Bank Finance

Eligibl
Propos
Cost of Project e Propose
Sr. Margi Eligibility ed Proposed
excluding Deposit Amount Bank d
No. n for TL Bank TL
and margin on WC Margin
Fin
Finan
ce
1 Power loom
15,00,000 5% 95% 14,25,000 5% 95% 14,25,000
Machine
15,00,000. 14,25,000. 95.00 14,25,000.
Total 5% 95% 5.00%
00 00 % 00

DETAILS OF TERM LOAN (RATE OF INTEREST)

YEAR
PARTICULARS
1 2 3 4 5
142500 121500 100500 42000 21000
TERM LOAN  
0 0 0 0 0
21000 21000
INSTALLMENT OF TERM LOAN   210000 210000 210000
0 0
ADJUSTMENT OF SUBSIDY IN TERM LOAN   - - 375000 - -
INTEREST ON TERM LOAN   112066 87391 62716 38041 13366
70000 70000
W/CAPITAL LOAN   950000 950000 950000
0 0
ADJUSTMENT OF SUBSIDY IN WORKING
  - - 250000    
CAPITAL
INTEREST ON W/C LOAN   82250 82250 82250 82250 82250

MANORMA Page 6
Note: After the 1st disbursement of Loan, Govt will release subsidy of Rs.
6,25,000/- to the financing bank. Amount of subsidy will be kept as Fixed
deposit in the name of Loanee for 3 years & thereafter the same will be
adjusted in term loan at the end of 3rd year.

2) Bank will not charge interest on term loan to the extent of subsidy
amount i.e., Rs. 6,25,000/-, till the subsidy amount remain in shape of fixed
deposit with bank i.e., for 3 years.

3) Installment of term loan has been calculated considering the adjustment

of subsidy in term loan.

MANORMA Page 7
 PROJECTIONS OF PERFORMANCE & PROFITABILITY
YEAR
PARTICULARS
1 2 3 h 5
750000 850000 1050000 1150000
SALES 9500000
0 0 0 0
           
750000 850000 1050000 1150000
TOTAL (A) 9500000
0 0 0 0
           
COST OF GOODS SOLD          
330000 381000
Raw Materials (Op Stock + Purch - Cl Stock) 4320000 4830000 5340000
0 0
220000 254000
Finished Goods (Op Stock + Purch - Cl Stock) 2880000 3220000 3560000
0 0
REPAIR & MAINTAINANCE 42000 48000 54000 60000 66000
TRAVELLING & CONVEYANCE 26000 28000 30000 32000 34000
ELECTRICITY EXPENSES 38000 42000 46000 50000 54000
PRINTING & STATIONARY ITEMS 18000 20000 22000 24000 26000
Insurance 15000 15000 15000 15000 15000
SALARY & WAGES 660000 720000 780000 840000 900000
TELEPHONE EXPENSES 5000 5500 6000 6500 7000
OTHER MISCLLANEOUS EXPENSES 18000 20000 22000 24000 26000
DEPRICIATION 225000 191250 162563 138178 117451
           
654700 743975 1014545
TOTAL ((B) 8337563 9239678
0 0 1
           
106025
GROSS PROFIT (A-B) 953000 1162438 1260322 1354549
0
Interest on term Loan 112066 87391 62716 38041 13366
Interest on W/C Loan 82250 82250 82250 82250 82250
Advertising Expenses 14000 16000 18000 20000 22000
           
999471.
Net Profit 744684 874609 1120031 1236933
5
162562.
Add: Depreciation 225000 191250 138178.1 117451
5
106585
NET CASH ACCRUAL 969684 1162034 1258209 1354384
9

MANORMA Page 8
MANORMA Page 9
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 PROJECTED BALANCE SHEET
YEAR
PARTICULARS
1 2 3 4 5
A. LIABILITIES            
CAPITAL FUND   125000 449684 824293 1868765 2328795
ADD: NET PROFIT   744684 874609 999471.5 1120031 1236933
ADD: SUBSIDY FROM GOVT       625000    
    869684 1324293 2448765 2988795 3565728
LESS: DRAWINGS   420000 500000 580000 660000 740000
NET CAPITAL   449684 824293 1868765 2328795 2825728
SUBSIDY FROM GOVT   625000 625000      
TERM LOAN   1215000 1005000 420000 210000 0
WORKING CAPITAL   950000 950000 700000 700000 700000
SUNDRY CREDITORS (For Expenses)   70000 80000 90000 100000 110000
TOTAL (A) 3309684 3484293 3078765 3338795 3635728
B. DISPOSITION OF FUND            
PLANT & MACHINERY   1500000 1275000 1083750 921187.5 783009.4
LESS: DEPRICIATION   225000 191250 162562.5 138178.1 117451.4
NET BLOCK   1275000 1083750 921187.5 783009.4 665558
INVESTMENT IN FDR (Subsidy)   625000 625000 - - -
STOCK IN HAND   950000 1050000 1150000 1250000 1350000
SUNDRY DEBTORS:            
SUNDRY DEBTORS   120000 380000 550000 650000 700000
CASH & BANK BALANCE   339684 345543 457577 655786 920170
TOTAL (A) 3309684 3484293 3078765 3338795 3635728
Difference (Aseets-Liabilities) 0 0 0 0 0

MANORMA Page 11
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PROJECTED BALANCE SHEET YEAR 5 A. LIABILITIES

PROJECTED BALANCE SHEET YEAR 3 A. LIABILITIES
PROJECTED BALANCE SHEET YEAR 1 A. LIABILITIES
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Page 12
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 PROJECTED CASH FLOW STATEMENT
YEAR        
PARTICULARS
1 2 3 4 5
A. SOURCE OF FUNDS:            
Increase in Capital   125000   625000    
106585 116203 125820 135438
NET CASH ACCRUAL   969684
9 4 9 4
142500
INCREASE IN TERM LOAN          
0
INCREASE IN WORKING
  950000        
CAPITAL
-
SUBSIDY FROM GOVT   625000      
625000
ENCASHMENT OF FDR       625000    
SUNDRY CREDITORS   70000 10000 10000 10000 10000
416468 107585 179703 126820 136438
TOTAL (A)
4 9 4 9 4
B. DISPOSITION OF FUND            
150000
FIXED ASSETS          
0
INVESTMENT IN FDR   625000 - - - -
INCREASE IN STOCK   950000 100000 100000 100000 100000
DECREASE IN TERM LOAN   210000 210000 585000 210000 210000
DECREASE IN WORKING
  - - 250000 - -
CAPITAL
SUNDRY DEBTORS   120000 260000 170000 100000 50000
DRAWINGS   420000 500000 580000 660000 740000
             
382500 107000 168500 107000 110000
TOTAL (B)
0 0 0 0 0
             
C. OPENING BALANCE   0 339684 345543 457577 655786
D. NET SURLUS(A-B)   339684 5859 112034 198209 264384
E. CLOSING SURPLUS   339684 345543 457577 655786 920170

MANORMA Page 13
 BREAK EVEN ANALYSIS (CONSIDERED 3RD YEAR)
PARTICULARS FIXED COST VARIABLE COST TOTAL COST
SALES     9500000
TOTAL (A)     9500000
       
RAW MATERIAL CONSUMED   4320000 4320000
FINISHED GOODS   2880000 2880000
SALARY & WAGES 336000 504000 840000
TRAVELLING & CONVEYANCE   30000 30000
OTHER EXPENSES   22000 22000
DEPRICIATION 162562.5   162562.5
ELECTRICITY EXPENSES   46000 46000
REPAIR & MAINTAINANCE   54000 54000
INTEREST ON TERM LOAN 62716   62716
INTEREST ON W/C LOAN   82250 82250
TELEPHONE EXPENSES 6000   6000
INSURANCE EXPENSES 15000   15000
ADVERTISING EXPENSES   18000 18000
PRINTING & STATIONARY ITEMS   22000 22000
TOTAL (B) 582278.5 7978250 8560528.5

Break Even Point: Fixed Cost*100/Sales-Variable Cost

: 38.26 %

MANORMA Page 14
 STATEMENT OF WORKING CAPITAL REQUIREMENT
         
PARTICULARS       1ST YEAR
A. CURRENT ASSETS        
         
MATERIAL       950000.00
RECIEVABLES     120000.00
TOTAL (A) 1070000.00
         
B- CURRENT LIABILITIES        
Creditors For Purchase of Raw Material       70000.00
Own Contribution @ 5% 50000.00
TOTAL (B) 120000.00
         
WORKING CAPITAL (A-B)
950000.00

CALCULATION OF DSCR

YEAR
PARTICULARS
1 2 3 4 5
Interest on term Loan   112066 87391 62716 38041 13366
Installment of Term Loan   210000 210000 210000 210000 210000
Interest on W/C Loan   82250 82250 82250 82250 82250
             
Repayment Obligation 404316 379641 354966 330291 305616
             
Net Profit Before Depriciation & 116400 123550 130700 137850 145000
 
Interest 0 0 0 0 0
DSCR 2.88 3.25 3.68 4.17 4.74
AVERAGE DSCR 4.03

MANORMA Page 15
 PAYBACK PERIOD
YEAR
PARTICULARS
1 2 3 4 5
125820
CASH ACCRUAL 969684 1065859 1162034 1354384
9
445578
CUMULATIVE CASH ACCRUAL 969684 2035543 3197577 5810170
6
           

Cost Of the Project 2000000.00

Pay Back Period 2.35

CONCLUSION
The projects as a whole describe the scope & viability of the service industry & manly of
the financial, technical & market potential. The project guarantees sufficient fund to
repay the loan & also give a good return on capital investment. When analyzing the
social economic impact, the project is able to generate an employment of 5 & above. It
will cater the demand of service & thus helps the other business entities to increase the
production & service which provide service & support to this industry. Thus, more cyclic
employment & livelihood generation. So, in all ways we can conclude the project is
technically & socially viable & commercial sound too.

MANORMA Page 16