Chapter - 1

Introduction

1.1 - Industry Profile

India’s textiles sector is one of the oldest industries in Indian economy. 11% of total
exports is contributed by textiles sector. The textiles industry is labour intensive and
one of the largest employers. It has 2 broad segments. First, the unorganised sector
which are operated on a small scale and through traditional tools and methods, are
consisted of handloom, handicrafts and sericulture. The second is the organised
sector where modern machinery and techniques are applied, that is spinning, apparel
and garments segment which result in economies of scale.

India’s overall textile exports during FY 2015-16 stick up at US$ 40 billion. Indian
textiles sector is referred as unique one when compared to industries of other country
because of the link between textile industry and agriculture (raw materials such as
cotton) and the early culture and traditions of the country. The Indian material
industry has the ability to create assortment of items appropriate to various market
sections, both inside India and over the world.
History

Those archaeological surveys and investigations discovered that the individuals from
Harrapan progress knew weaving and turning of cotton from a considerable length
of time that is four thousand years ago. Reference to weaving and turning materials
was discovered in the vedic writing. There might have been material exchange
throughout the early time in India. An piece printed furthermore resist-dyed fabrics,
whose root may be starting with Gujarat may be found to tombs about Fostat, Egypt.
This turns out that Indian traded cotton materials of the Egypt alternatively those
Nile development clinched alongside medieval times with an extensive degree.
Extensive amount about North Indian silk were exchanged through the silk course
over China of the Western nations. Those Indian silk were regularly traded for those
western nations for their spices in the trade framework. Throughout those late
seventeenth and eighteenth century there were huge fare of the Indian cotton of the
western nations with help of the requirement of the European commercial enterprises
throughout mechanical upset. Consequently, there might have been improvement
about patriot development such as those renowned swadeshi development which
might have been headed by Aurobindo Ghosh.

Cotton Manufacturing

In the early years, the cotton material industry might have been focused in the cotton
developing cinch of Maharastra and Gujarat. Accessibility of crude materials,
market, transport, labour, damp atmosphere What's more different Components
helped localisation. In the initial twentieth century, this business assumed an
immense part over Bombay's economy Be that as quickly declined following
freedom same time turning keeps on being brought together Previously, Maharashtra,
Gujarat and Tamil Nadu, weaving will be exceptionally decentralized. Concerning
illustration about 30 september 2013, there need aid 1962 cotton material factories
done India, about which around 80% need aid in the private division and the rest in
the government funded and helpful division. Separated starting with these, there need
aid a few thousand little industrial facilities with four on ten looms.
India fares yarn with Japan, United States, United Kingdom, Russia, France, Nepal,
Singapore, Sri Lanka and different nations. India need the second-biggest introduced
limit from claiming spindles in the world, with 43.13 million spindles (30 Walk
2011) following China. In spite of the fact that India need an extensive impart done
globe trade of cotton yarn, its exchange garments is just 4% of the world's aggregate.
This may be because of those incompetency for neighbourhood turning and weaving
plants on methodology yarn. There exist some extensive factories, yet all the majority
of the generation will be divided in little units, which cook of the neighbourhood
business sector. This befuddle will be a major detriment for the industry. As a result,
a number of the spinners fare yarn same time clothing and article of clothing Makers
must import fabric. Those control supply will be flighty and hardware is old
fashioned, Furthermore necessities to make upgraded. Different issues incorporate
low yield from claiming labour and firm rivalry for the manufactured fibre industry.

Cotton is the world’s most imperative customary fibre. In the year 2007, those overall
yields were 25 million tons from 35 million hectares growed over more than 50
nations.

There are 5 phases:

 Cultivating & Harvesting

 Preparatory forms
 Spinning- giving yarn
 Weaving- giving textures
 Finishing- giving materials

Jute Textiles
India may be those biggest producer from claiming crude jute furthermore jute
products and the second biggest exporter then afterward Bangladesh. There were
over 80 jute factories clinched alongside India clinched alongside 2010-11,
practically of which need aid placed to West Bengal, basically along the banks of the
Hooghly River, in a limited cinch (98 km long Furthermore 3 km wide). Elements
answerable for their area in the Hooghly bowl are: modest water transport, beneficial
system of railways, roadways furthermore waterways to encourage development
from claiming crude material on mills, abundant water supply, Shabby work from
neighbouring states.

Done 2010-2011 the jute industry might have been supporting 0. 37 million
specialists straightforwardly What's more another 400,000 little Also minor farmers
who were locked in in the development of jute.

Tests faced by those business incorporate firm rival in the universal business sector
starting with engineered substitutes and starting with different nations for example,
such that Bangladesh, Brazil, Philippines, Egypt furthermore Thailand. However,
those internal request need been on the ascent because of administration arrangement
of compulsory utilization of jute bundling. Will animate demand, those items
necessity should be differentiated. Previously, 2005, the national jute Policy might
have been figured with the goal from claiming moving forward quality, Expanding
benefit an upgrading the yield of the crop.

Those principle business sectors to jute are those United States, Canada, Russia,
United Kingdom and Australia.

Synthetic fibres

Through expelling a Polymer, over a spinneret into a methods where it solidifies, by

this counterfeit fibres are prepared. Wet spinning utilizes a coagulating medium. In
dry spinning, the Polymer is contained in a dissolvable that disappears in the warmed
leave chamber. In liquefy spinning the expelled Polymer is cooled in gas or air and
afterwards sets. Every one of these strands will be of incredible length, regularly
kilometres long.

Natural fibres

Natural fibres are moreover from creatures (sheep, goat, rabbit, silk -worm) mineral
(asbestos) or from plants (cotton, flax, sisal). These vegetable strands can originate
from the seed, stem or the leaf. Without concession, many procedures are required
before a clean even staple is gotten each with a particular name. Expect for silk, each
of these strands is short being just centimetres long, and each has an unpleasant
surface that empowers it to bond with comparative staples.

Cottage stage (before 19th century)

There are a few signs that weaving was at that point known in the Palaeolithic. A
misty material impression has been found at Pavlov, Moravia. Neolithic materials
were found in heap abodes unearthing in Switzerland & at EI Fayum, Egypt at a site
which dates to about 5000BC.
Already, in Roman circumstances, fleece, material and cowhide dressed the
European populace, and silk, imported along the Silk Street from China, was an
inordinate extravagance. The utilization of flax fibre in the assembling of material in
Nothern Europe goes back to Neolithic circumstances.

Cotton started to be transported in into Northern Europe, amid the late medieval
period. With no information of what it originated from, other than that it was a plant,
nothing its similarities to fleece, individuals in the locale could just envision that
cotton must be delivered by plant-borne sheep. Cotton was developed all through the
hotter areas of Asia and the Americas, before the finish of the sixteenth century.

The key British industry toward the start of the eighteenth century was the generation
of materials made with wool from the expensive sheep- cultivating regions in the
Midlands and the nation over. Business was given all through Britain, with real
focuses being the West Country; Norwich and Environs; and the West Riding of
Yorkshire, resulting in labour- intensive activity. Throughout the 18th century, the
fares for woollen products were more than a quarter for British exports, multiplying
between 1701 and 1770.
During this time exports by the cotton business were centred in Lancashire-had
grown ten times, yet at the same time represented just a tenth of the estimation of the
woollen exchange. Before the seventeenth century, the fabricate of products was
done on a restricted scale by single workers, generally all alone premises. The
clothiers who went by the town with their trains of packhorses transported the
merchandise around the nation. Large number of cloth were exported after satisfying
the need of people living in the area. Stream routes were built, and some form taking
after waterways. In the mid eighteenth century, Artisans were finding approaches to
wind up plainly more profitable. Silk, fleece, fustian and material were being
darkened by cotton, which was turning into the most essential textile. This set the
establishments for the progressions.

Industrial Revolution

The production of yarn and cloth became a mainstream in the industry because of the
growth of the woven fabric portion in the 18th century.

In 1734 in Bury, Lancashire, John Kay invented the flying shuttle – the first series of
inventions related with the cotton woven fabric industry. The apparent threat of jobs
resisted by workers postponed the extensive introduction of this technology, even
though the greater rate of production produced an enlarged demand for spun cotton.
James Hargreaves, in 1764, invented spinning jenny which increased the generation
limit of a solitary specialist at first eightfold and in this manner considerably further.
Others credit the innovation to Thomas Highs. Inability to patent the innovation and
mechanical unsettling influence until 1770 constrained Hargreaves from Blackburn.
However, others exploited his concept due to absence of security of thought. Thus,
by the time of his death, there were over 20000 spinning Jennies in use. Thorp Mill,
in 1764, the principal water- fuelled cotton process on the world was developed at
Royton, Lancashire, and was utilized for checking cotton. Cotton mills cropped up
all over the North West of England with the spinning and weaving process that was
mechanized.

19th century developments

The Spinning Mule and the Boulton & Watt steam engine, with the Cartwright Loom,
the pieces were in place to build a mechanised woven fabric textile industry. The
mill-owner strove to reduce cost and improve quality by continuous improvement in
technology. The import of raw materials and export of finished cloth was raised by
the developments in the transport infrastructure that is canals and railways.
The utilization of water energy to drive factories was supplemented by steam driven
water pumps, and afterward obsolete totally by the steam motors. In 1830, the
Roberts Loom, was invented with the cast iron frame by Richard Roberts. In 1842
James Bullough and William Kenworthy prepared the Lancashire Loom.

Textile manufacturing, iron founding and steam power motivated the changes in the
nature of work and society. The geographical focus of material production in Britain
was Manchester and the minor towns of the Pennines and southern Lancashire. Over
1926, material fabrication was at top in England, a number of the scrapped mules
and looms were bought up and reinstated in India as the mills were withdrawn.

20th century

In twentieth century, the textile industry encountered major fluctuations with

continuous mechanical advancements in hardware, logistics, manufactured fibre and
globalization of the business. Compound organizations made new manufactured
strands that had predominant qualities for some uses, for example rayon, created in
1910 and DuPont’s nylon, designed in 1935 as cheap silk substitute and utilized for
items running from ladies’ leggings to tooth brushes and military parachutes.

The 20th century was regarded as growth of synthetic fibres used in manufacturing.
The PC was imagined in 1920s, acetate, modacrylic, metal strands and saran were
created in 1940s. Polyester, spandex and acrylic were presented in 1950s. By the late
1970s more Polyester were sold in the United States than cotton, as polyester turned
out to be massively prevalent in the attire showcase.
By the late 1980s, with mechanical and home decorations together speaking to a
bigger extent of the fibre showcase, the clothing portion was no longer the biggest
market for fibre items. In 1970s and 1980s, the global manufacturing and industry
integration led to many small firms closing for good in the United States; 95 % of
the weaving machines North Carolina, South Carolina and Georgia closed down and
Alabama and Virginia additionally observed numerous production lines shut in those
decades.

Ministry of Textiles and Organizations

Administration from claiming India passed those national material approach to 2000.
Those significant capacities of the service of materials need aid planning
arrangement Also coordination about man-consuming shark fibre, cotton, jute, silk,
wool industries, decentralization of energy loom sector, advancement for exports,
arranging & budgetary analysis, account and pushing utilization of majority of the
data innovation organization. The consultative sheets for those services incorporate
all India Handlooms Board, every last bit India Handicrafts Board, every last bit
India energy looms Board, counselling under Handlooms reservation from claiming
Articles for processing furthermore Co-ordination committee from claiming
materials research cooperation. There are a few general population segment units and
material Look into acquaintanceships the nation over.

Commerce and regulation

The world trade in textiles and garments was governed by The Multi-Fibre
Arrangement (MFA) from 1974 through 2004, imposing quotas on the amount
developing countries could export to developed countries, expired on 1st January
2005.

To enable created nations to conform to imports from the creating nations; a short
term measure was introduced by The MFA in 1974. The natural advantage of
developing countries in textile production is its labour- intensive and low labour
costs. The system has cost the developing world 27 million jobs and 40$ billion a
year in lost exports, according to a World Bank / International Monetary Fund study.

The course of action was not negative for all creating nations. For instance, there
were no limitations or obligations forced on imports from very poor countries, such
as Bangladesh, leading to a massive expansion of the industry by the European
Union.

It was decided to bring the textile trade under the jurisdiction of the World Trade
Organization, at the General Agreement on Tariffs and Trade (GATT) Uruguay
Round. The quotas that were existed under the MFA were gradually pull to bits by
the agreement provided on Textiles and Clothing by the WTO. This process was
accomplished on 1st January 2005. However, large tariffs remain in place on many
textile products.

The end of the MFA lead to the expectations that Bangladesh would suffer the most,
as to face more rivalry especially from China. In any case, this was not the situation,
it worked out that even in the phase of other monetary monsters, and Bangladesh’s
labour was less expensive than anyplace else in the planet. The requests for
merchandise continued coming even after the MFA terminated because the
production lines were reported making pay cuts and cutbacks, this scaling back was
basically theoretical. In 2006, indeed Bangladesh’s fares expanded in an incentive
by about $500 million.

Market size

The Indian textiles industry, right now expected at around US$ 223 billion by 2021.
It contributes approx. 5 % to India’s GDP, and 14% to general Index of Industrial
Production (IIP). The Indian material industry can possibly achieve US$ 500 billion
in size as per a review by Wazir Advisors and PCI Xylenes &Polyester. The
development infers residential deals to rise to US$ 315 billion from now US$ 68
billion. In the mean time, exports are implied to increase to US$ 185 billion from
approx. US$ 41 billion as of now.

Growth

Development alongside the investment for an industry relies vigorously on the

financial wellbeing of the nation over. Indian economy grew quickly throughout the
monetary year 2006-2007 presenting a Growth rate from claiming 9. 4% p. An. Not
main this, India need been performing fundamentally in the last three a considerable
length of time the place its Normal yearly rate of development need been assessed
with be 8%.

The fruits of monetary development need trickled down should kin of the state which
might be prove starting with those climbing for every capita wage for India. Detail
uncover that Throughout 2001-2007 (up with Walk 2007) the for every capita wage
about India need expanded Eventually Tom's perusing sixty two percent What's more
need arrived at the level about Rs 25,778 alternately US$ 581. 37 for every annum.

A standout amongst those mossy cup oak advantageous class for this monetary
development adventure need been the working salary segment of the pop culture.
Those aggregate quality for this population clinched alongside outright terms need
been discovered out to be 216 million which will be normal with Ascent with 351
million eventually Tom's perusing 2010. The major interest that is being produced
will be Toward another population for people starting with those blasting IT-BPO
segment who are at present during their prime ageists Furthermore need aid
ostensibly design smart. This need produced immense interest for popular dresses
which need thus prompted the rise from claiming a portion globe population Indian
designers for their most recent design apparels.

Affinity from claiming utilization (after excluding every one using ahead
fundamental things in housing, health, education, and so forth throughout this way,
observing and stock arrangement of all instrumentation may be near.) by the Normal
Indian kin need expanded at those rate about 5% with an aggregate amount from
claiming US$ 219 billion in the quite a while over 2,800 doctor look assignments led
from April 1, 2009 to March 31, 2010. At this time, those composed retail division
need been ready with tap a market about around US$ 8. 2 billion which may be
anticipated will increment to US$ 25 billion toward 2010.
Material industry will be a standout amongst those significant supporters of the
aggregate yield of the quickly developing Indian modern division which is at present
revolving around 14%. Material sector's commitment on GDP about India is likewise
critical which at present sums should 4%. It need been found out that Indian material
business is a standout amongst the major sources for remote trade income for India
What's more contributes around 16-17% of the aggregate send out procuring.

From the over dialog it is exactly clear to us that those business sector size of India
is developing during a helter smelter pace. That is the reason the remote gurus need
aid flocking to India for venture purposes in place will get hold of a lump about this
growing pie. With expanding interest to those results for Indian material Industry,
new players need aid bouncing in the association will get a cut of the gainful pie and
the officially existing material plants are raising their ability to expanding their
supply. Hence, those extension procedure of the provincial industry is also not far
behind.

Thus, it camwood make said that the entirety Indian economy will be on a developing
pattern which need its self-evident sway with respect to each conceivable segment
including those Indian industry.

Cotton production over the past few years was unpredictable

  In India the production of raw cotton grew from 28 million bales in FY 15 &
further improved to 35.2 million bales in FY16.
 Of the overall amount of raw cotton produced in the country, with domestic
consumption totalling to 30 million bales, during FY16.

Production of man-made fibre has been growing

 There was an upward trend in the production of man-made fibre.

 With the figure highlighting a recovery from 2009 levels, the production
stood at 1.34 million tonnes in FY15.
 The production mounted at 0.77 million tonnes during FY16.

Investments

In the last 5 years the textile industry has experienced a spurt in investments. The
industry attracted FDI worth US$ 2.41 billion during April 2000 to December 2016.

According to M. Senthil Kumar, chairman of Southern India Mills’ Association, the

Indian textile industry is expected to attract Rs 1 lakh crore investments in technical
textiles by 2025. The technology mission launched in 2010 with an outlay of Rs. 200
crore was extended till the end of this FY with an additional outlay of Rs. 55.2 crore.

Government Initiatives

A number of export promotion policies were introduced by the Indian government

for the textiles sector. 100% FDI was allowed by the government in the Indian
textiles sector under the automatic route.

The key activities announced in the Union Budget 2017-18 to improve the textiles
sector are listed below:

 Encourage new entrepreneurs to invest in sectors such knitwear by increasing

allocation of funds to Mudra Bank from Rs 136000crore to Rs 244000 crore.
 Allocation of Rs 2200 crore for up gradation of labour skills.

Road Ahead

The future for the Indian material industry looks auspicious, upheld by both solid
home utilization as well as export order. The retail segment has experienced a quick
growth in the past decade with the entrance of several international players like
Marks & Spencer, Guess & Next into the Indian market, with the rise in consumerism
and disposable income. Over a 10 years of period the organised sector is expected to
grow at a CAGR of more than 13%.

The Union Ministry of Textiles, along with working on a new textile policy to
promote value addition, plans to enter into bilateral agreements with Africa &
Australia apart from finalising guidelines for the revised Textile Upgradation Fund
Scheme.

In FY2017-18 the industry is expected to show a stable growth, supported by stable

input prices, healthy capacity utilisation & steady domestic demand.
India may be right away a quick rising advertise inching to scope half a billion centre
pay populace eventually Tom's perusing 2030. All these variables need aid handy for
the Indian material industry on a long run. Despite the fact that those worldwide
financial emergency seams with a chance to be intensifying day-by-day, Likewise in
length Likewise economies are rising What's more developing Similarly as the
individuals Previously, soutane Also soutane east Asia, material industry may be
here will develop given it takes rival and improvement genuinely. Read underneath
should bring a knowledge of the remained of the Indian material industry in the
economy.

Likewise those saying dives in the fiscal sector, it will be not prudent on set every
last bit eggs for particular case crate. This may be what happened to some degree on
account of the Indian material industry. For the opening of reality businesses and the
annulment for material quotas since 2005, there went a negative circumstances and
also blacks. But, insight into the past is dependably 20-20. Indian material business
if have kept tabs ahead constantly on major parts good from fibre with style What's
more wanted to a sorted out development crosswise over those supply chain along
these lines Concerning illustration on contend for china Furthermore actually nations
for example, such that Pakistan, Vietnam Also Thailand. Instead, the business needed
place lion's share of its stock in the turning segment. This may be obviously obvious
in the usage from claiming engineering up gradation store plan viably by those
turning segment. In spite of the fact that it will be a certain outcome, for my opinion,
those business transformed a visually impaired eye once value-adding parts for
example, such that weaving furthermore completing. Indian power loom sector,
which empowers value-addition may be An Exceedingly chaotic business
Furthermore needs real up gradation. Not just India doesn't have universe personal
satisfaction indigenous shuttle less looms, as well as ventures would not satisfactory
to adapt to those nature and amount to cook of the send out business sector.
Specialized foul materials division will be even now On its earliest stages
Furthermore a substantial Growth will make Exceedingly noticeable Eventually
Tom's perusing 2035 when the development in this segment will a chance to be
exponential. Will be there a panacea of the complexities encompassing those India
material Industry.
A few results to the Growth about Indian material business.

Several from claiming focuses provided for underneath will provide for
something worth mulling over for every last one of stake holders in the Indian
material industry:

The powerless joins in the Indian customary business for example, such that weaving
and completing must make reinforced. An real push here may be will need united
deliberations Eventually Tom's perusing Indian material apparatus Producers
Association, end-users and the administration with embrace a moon shot what's more
come-up for plan B to European machinery, which those weaving division might
manage. This ought to be possible inside the next five years, on committed exertions
are embraced with the budgetary backing to R&D eventually Tom's perusing the
legislature through its Different schemes.

Inch ahead in the non-commodity material sector, that is, specialized foul materials
segment from a non slithering stage should no less than a slithering business in the
following three a long time. All consciousness once nonwoven and specialized foul
parts need been made with those late marathon preparing workshops and conferences
such as, "Advances in Textiles, Nonwoven and specialized foul Textiles", sorted out
for as long as five a considerable length of time for Coimbatore Eventually Tom's
perusing Texas guru University, USA furthermore the individuals for example, those
excellence furthermore IIT's specialized foul materials conferences. These need set
India on the universal guide previously, specialized foul materials. These
conferences are for Lesquerella use though they don't interpret under ventures and
new tasks. This perspective need been moderate. The reason will be it so? In spite of
the fact that the mindfulness on the wide based innovation know-how Furthermore
end items need been created, lesquerella should no consciousness need been made
around industrialists on the marketability about non-commodity material items.
1.2 - Theoretical background of the study

Cost Benefit Analysis (CBA) is an orderly approach to evaluate the strengths and
weaknesses of choices. CBA is also useful in defining the options that provide the
best approach to achieve benefits while guarding savings. It can be defined as a
process for calculating and comparing benefits and costs of a decision, policy or a
project.

Purpose of CBA are;

 To decide whether an investment is feasible or not and by how much.

 To provide a basis for comparing projects which involves
comparison between the total expected cost of each alternative
against its total expected benefits.

Cost benefit analysis is related to cost effectiveness analysis. In CBA, costs and
benefits are expressed in monetary terms and are adjusted for time value of money,
so that all flows of benefits and flows of projects costs over time are expressed on a
common basis in terms of their net present value.

Evaluation

CBA endeavour on measure those certain alternately negative outcomes of a project,

which might include:

 Impacts once clients or members.

 Impacts looking into non-users alternately non-participants.
 Externality impacts.
 Alternative worth or different social reductions.

A comparable breakdown is utilized done Ecological examination about aggregate

budgetary quality. Both costs what's more profits could a chance to be different.
Monetary fetches tend should make mossy cup oak completely spoke to a cost-
benefit analyses because of moderately abundant business sector information. Those
net profits of an undertaking might fuse expense reserve funds alternately
government funded eagerness will pay recompense (implying people in general need
no lawful right of the profits of those policy) alternately eagerness on accept payment
(implying people in general need a straight of the profits of the policy) for those
welfare progress coming about because of the approach. Those controlling guideline
about assessing reductions will be on rundown the sum (categories of) gatherings
influenced Toward an mediation and include the (positive or negative) value,
generally monetary, that they credit will its impact for their welfare.

Those real payment a distinctive might oblige should need their welfare unaltered by
an approach will be estimated best case scenario. Surveys (stated inclination
techniques) alternately business conduct technique (revealed inclination techniques)
need aid regularly utilized on gauge the recompense connected with a strategy. Stated
Inclination offers Inclination strategy is immediate method for surveying readiness
should pay. In view it includes asking kin straightforwardly to demonstrate their
eagerness to pay for a portion Ecological feature, alternately some result that is nearly
associated with those state of the earth. However, overview respondents frequently
bring solid incentives should misreport their accurate inclination Furthermore
business conduct doesn't give acceptable whatever majority of the data something
like significant non-market welfare affects. Uncovered Inclination offers Inclination
procedure will be backhanded methodologies on distinct readiness with pay.
Individuals aggravate showcase decisions around sure things that need distinctive
aspects identified with those environment, they uncover the worth they spot on these
natural Components.

You quit offering on that one discussion will be valuing a mankind's life, e. G. When
surveying street wellbeing measures alternately life-saving drugs. However, this
might now and then make avoided Toward utilizing those related system of cost-
utility analysis, over which profits would communicated to non-monetary units for
example, such that quality-adjusted an aggregation quite some time. For example,
way safety camwood a chance to be measured As far as cosset for every an
aggregation saved, without formally setting a monetary worth on the existence.
However, such non-monetary measurements need set convenience to assessing
approaches with significantly diverse conclusions. Additionally, a number other
profits might accumulate from those policy, Furthermore measurements for example,
'cost for every life saved' might prompt An considerably different positioning of plan
B over accepted cost–benefit dissection.
An alternate debate will be valuing the environment, which in the 21st century will
be commonly evaluated toward valuing biological community benefits to humans,
for example, air What's more water nature What's more contamination. Fiscal values
might additionally be doled out with different immaterial holding impacts for
example, such that business reputation, advertise penetration, or long haul endeavour
system arrangement.

Duration of the Time and Discounting

CBA typically tries with set every last bit pertinent costs furthermore profits ahead
as a relatable point transient balance utilizing time quality of cash calculations. This
is often finished by converting what's to come required streams of costs and profits
under a present worth measure utilizing a markdown rate. Experimental
investigations furthermore An specialized foul schema propose that Previously,
reality, people do rebate what's to come in this.

The decision for markdown rate will be subjective. A more modest rate values future
generations just as with the present era. Bigger rates (e. G. a business sector rate from
claiming return) reflects humans' fascination on time inconsistency—valuing cash
that they accept today more than cash they get later on. The decision makes an
expansive distinction to surveying intercessions with long haul impacts. Person issue
may be those value premium puzzle, done which long haul returns for equities might
make rather higher over they ought to be. Whether thereabouts after that seemingly
showcase rates of comeback ought to not a chance to be used to focus a rebate rate,
similarly as finishing along these lines might need those impact from claiming
undervaluing the inaccessible future (e. G. Atmosphere change).

Risk and Uncertainty

Risk connected with venture conclusions will be normally took care of utilizing
likelihood hypothesis. This camwood make factored under the markdown rate (to
need questionable matter expanding through time), will be as a rule recognized
independently. Specific attention may be frequently all the provided for on hazard
aversion—the Inclination offers Inclination for avoiding reduction through
accomplishing addition. Anticipated come back calculations don't represent the
impeding impact for questionable matter.

Vulnerability done CBA parameters (as restricted with hazard from claiming venture
disappointment and so forth throughout this way, observing and stock arrangement
of all instrumentation may be near. ) camwood a chance to be assessed utilizing a
affectability analysis, which reveals to how effects react with parameter
progressions. Then again more formal danger dissection might make embraced
utilizing Monte Carlo simulations.

History

Those French engineer and economist Jules Dupuit, credited with those making from
claiming cost–benefit dissection.

The idea for CBA dates go will 1848 article by Jules Dupuit furthermore might have
been formalized on ensuing meets expectations Eventually Tom's perusing Alfred
Marshall. Those corps from claiming particular architects initiated the utilization
about CBA in the US, after the elected route demonstration of 1936 successfully
needed cost–benefit examination to suggested central waterway foundation. Those
surge control enactment from claiming 1939 might have been instrumental moulding
previously, making CBA Concerning illustration central approach; it requested that
"the reductions on whomever they accumulate to abundance of the evaluated costs".

Government funded policy

Those requisition to more extensive government funded approach off from those
worth of effort for Otto Eckstein who on 1958 laid crazy a welfare commercial
concerns framework for CBA Also its requisition to water asset improvement. Again
those 1960s, CBA might have been connected in the US for water quality diversion
travel, Furthermore area protection. Throughout this period, the idea about
alternative esteem might have been produced to representable those non-tangible
esteem for preserving assets for example, national parks.

CBA might have been after the fact extended on address both immaterial holding and
substantial profits of state funded arrangements identifying with mental illness,
substance abuse, school education, and compound waste approaches. in the US, the
national Ecological strategy act about 1969 initial required those provision from
claiming CBA for administrative programs, Furthermore since then, other
administrations need sanctioned comparable tenets. Administration guidebooks to
the requisition for CBA with government funded approaches incorporate those
Canada wild rye aide for administrative analysis, Australian aide to regulation and
finance, us aide for health awareness programs, furthermore us aide for crisis
management projects.

Transportation investment

CBA provision to transport venture off in the UK for those m1 motorway project,
Furthermore might have been after the fact connected with respect to a significant
number ventures including London Underground's Victoria line. The new
methodology with examination (NATA) might have been presented by those then
Branch for Transport, earth and the locales. This exhibited cost–benefit effects and
point by point natural effect appraisals clinched alongside an adjusted best approach.
NATA might have been 1st connected should national way schemes in the 1998
streets Audit However thusly took off to every one transport modes. Concerning
illustration for 2011 it might have been a foundation for transport examination in the
UK also may be supported furthermore formed toward the section for transport.

Those EU's 'Developing corresponded European methodologies for transport

fetching and venture Assessment' (HEATCO) project, and only its sixth skeleton
Programme, reviewed transport examination direction crosswise over EU part states
Furthermore discovered that noteworthy contrasts exist between nations. HEATCO's
point might have been should create rules to orchestrate transport examination act
crosswise over the EU.

Transport Canada Canadensis advertised the utilization about CBA for real transport
ventures with the 1994 issuance about its Guidebook.

In the US, both national and state transport offices ordinarily apply CBA, utilizing
an assortment from claiming accessible product instruments including HERS, BCA.
Net, StatBenCost, Cal-BC, also TREDIS. Guides need aid accessible starting with
those national roadway Administration, Central Aeronautics Administration,
Minnesota Branch of Transportation, California Bureau of Transportation (Caltrans),
the Transportation Examine Board and Transportation Commercial Concerns
Council.

CBA and Regulation under Different US Administrations

Those expanded use of CBA in the US administrative transform will be frequently

connected with President Ronald Reagan's organization. In spite of the utilization
about CBA On us arrangement making going a number decades, Reagan's official
request 12291 mandated the utilization for CBA in the administrative methodology.
Reagan campaigned looking into An deregulation platform, and once he took office
for 1981 rapidly issued this EO, which vestal virgin the office about data Also
administrative issues (OIRA) for those power to survey office regulations
Furthermore needed central orgs to prepare administrative sway analyses when the
twelve-month effect Might be assessed over $100M. Quickly thereafter, in the 1980s,
academic What's more regulate critiques from claiming CBA began to develop.
Those three principle criticisms were.

 That CBA Might make utilized to political objectives. Open deliberations on

the benefits for cosset furthermore profit correlations camwood make used to
avoid political alternately philosophical goals, guidelines Also regulations.
 That CBA is naturally anti-regulatory, thusly not a nonpartisan dissection
device around. This is a moral argument: that those adaptation about
 approach effects will be an improper apparatus for surveying things for
example, such that mortal sin dangers furthermore distributional affects.
 That the period of duration of the time fundamental will finish CBA might
make critical delays, which might obstruct arrangement regulations.

These criticisms proceeded through the 1990s under those Clinton administration,
who furthered those anti-regulatory surroundings through as much official request
12866. EO 12866 transformed some for Reagan's language, requiring reductions will
justify, as opposed surpass costs, and included "reduction from claiming separation
or bias" Likewise a standout amongst those reductions will make broke down.
Criticisms about parts claiming CBA, including uncertain valuations, discounting
future values, and the count of risk, were used to contend that CBA ought assume no
a major aspect in the administrative methodology. The utilization for CBA in the
administrative transform proceeds today under the Obama administration, In spite of
the banter in its useful and destination esteem proceeds. A few examiners contradict
the utilization about CBA to approach making, same time the individuals energetic
about its use support upgrades of the Investigation Furthermore calculations.

Accuracy

The worth of a cost–benefit dissection relies on the exactness of the distinct cosset
furthermore profit estimates. Similar investigations show that such estimates are
often flawed, keeping upgrades clinched alongside Pareto What's more Kaldor-Hicks
effectiveness. Reason for these inaccuracies include:

 Over-reliance with respect to information from secret word activities (often

varying markedly over work or measure and the ability levels of the
cooperation members).
 Utilization of subjective impressions to appraisal.
 Unseemly utilization of heuristics to infer cash expense of the immaterial
holding components.
 Affirmation segregation racial inclination "around task supporters (looking
for reasons with proceed).
Premium aggregations might endeavour will incorporate alternately avoid
noteworthy costs from an examination should impact the Conclusion.

On account of the portage Pinto (where, due to configuration flaws, the Pinto might
have been at risk to blast under flames clinched alongside a rear-impact collision),
the organization's choice might have been not should issue a recall. Ford's cost–
benefit examination needed evaluated that dependent upon those number from
claiming autos being used and the possible mischance rate, passing because of those
outline imperfection might expense it regarding $49. 5 million will settle wrongful
passing lawsuits versus recall costs about $137. 5 million. Portage neglected (or
viewed as insignificant) the costs of the negative publicity that might result, which
constrained a recall and harmed offers.

Over wellbeing economics, some examiners feel cost–benefit examination might

make an insufficient measure in view willingness-to-pay systems for deciding the
worth about human life could a chance to be impacted eventually Tom's perusing
salary level. They help utilization of variants for example, cost–utility dissection
What's more quality-adjusted existence quite a while will examine those impacts of
wellbeing arrangements.

To a portion ecological impacts expense invade camwood make substituted for cost-
effectiveness dissection. This is particularly valid at there is special case sort of
physical Conclusion that is sought, for example, such that the diminishment for
vitality utilization by expanding vitality proficiency. Utilizing cost-effectiveness
Investigation may be lesquerella relentless What's more drawn out Likewise it
doesn't include those adaptation for outcomes, which camwood a chance to be was
troublesome in a percentage instances.

Previously, Ecological also word related wellbeing regulation, it need been

contended that if present day cost–benefit analyses required been connected
prospectively to choices for example, such that if should mandatory those evacuation
about lead starting with gasoline, piece those development of two suggested dams
only over What's more The following those stupendous gulch on the Colorado River,
Also control workers' purposes of presentation should vinyl chloride, these measures
might not bring been executed despite the fact that they are recognized with a chance
to be Exceedingly fruitful to hindsight. The clean air act need been cited in review
investigations Concerning illustration an instance the place reductions surpassed
costs, yet the information of the reductions (attributable generally of the profits of
decreasing particulate pollution) might have been not accessible until A large number
a considerable length of time after the fact.

Process of cost benefit analysis

The first step is to collect the complete list of all the costs and benefits associated
with the project. Costs should consist of direct and indirect costs, intangible costs,
opportunity costs and cost of potential risks. Benefits should comprises of all direct
and indirect revenues and intangible benefits, like increased sales from client
goodwill, or enlarged production from improved worker safety and morale. All the
items on the list should be termed with a common unit of monetary amount. Caution
should be taken not to underestimate costs or overestimate benefits.

The final step is to compare the results of the costs and benefits in quantitative to
determine if the benefits be greater than the costs. If so, then the decision would be
to go forward with the project. If not, the project should be reviewed and adjustments
should be made to either increase benefits or decrease costs to make the project
possible. If not, the project should be abandoned.

Limitations of cost benefit analysis

The ventures that include small to medium-level capital consumption and

furthermore are short to intermediate in terms of time to completion, an in-depth cost
benefit analysis may be sufficient enough to make a well-informed sensible result.
The vast projects with a long term time horizon, cost benefit analysis usually fails to
effectually take into account the financial concerns like interest rates, inflation,
varying cash flows and the present value of money. Net present value or internal rate
of return methods under the capital budgeting analysis methods are more appropriate
for these situations.

Steps to do cost benefit analysis

A CBA is a detailed outline of the potential risks and gains of a proposed venture.
This is useful for making many types of business and personal decisions, especially
ones with a potential for profit.

Step 1:- Define CBA’s unit of cost

To figure out if a certain scheme is worth the cost it might take to sanction, it’s critical
to establish what precisely the CBA measures in terms of cost at the outset. CBA
measures exact cost as far as money, anyhow in cases where money is not an issue,
CBAs could measure cost in terms of time, energy usage and more.

Step 2:- Note those tangible costs of the proposed project

Virtually any project comes with cost. Preliminary monetary investments are
required to buy goods and supplies, train staff and the like. Firstly a thorough,
comprehensive, full list of these costs must be prepared. Expenses could be chance
of being one-time occasions or progressing costs. Costs should be created on actual
market prices or research when possible, but should be intelligent, researched
estimates when this is not possible.

The type of costs that will be included in CBA:

 Goods or equipment prices associated with the venture.

 Operating expenses
 Staffing costs (wages, training, etc.)
 Insurance and taxes
 Shipping, handling and transportation costs
 Utilities (electricity, water, etc.)
 Real estate (rented offices, etc.)
Step 3:- Itemize any and all intangible costs

Intangible demands like the time and energy required to complete a project are also
taken into account while calculating CBA. Even though these things can’t be bought
and sold, real world costs can be assigned to them by determining the amount of
money one would be able to make if they were used for another purpose.

Intangible costs to consider under CBA:

 Cost of energy spent on venture

 Cost of time spent on venture
 Risk factor value like safety and customer loyalty
 Cost of adjusting an established routine

Step 4: - Itemize the projected benefits

Comparison between the benefits and the costs of the project is the main purpose of
the CBA. Benefits are itemized the same way as the costs, though they must rely on
educated estimates more than the costs. Estimates must be supported with evidence
from research and assign financial value to any tangible and intangible methods to
acquire positive returns on the venture.

Benefits to be considered in CBA:

 Money saved
 Income produced
 Equity built
 Time and effort saved
 Intangibles like referrals, happier employees, safer workplace, customer
satisfaction, etc.

Step 5: - Add up and compare the projects costs and benefits

This is the core step of any CBA. Determination is done whether the benefits are
greater than the costs of the project. Then the ongoing costs are subtracted from the
ongoing benefits, then the one-time costs are added to get a sense of size of the initial
investment required for the project. This information will help to determine the
project is profitable and feasible.

Step 6: - Calculate a payback time for the venture.

The total costs and benefits are taken into account to determine the amount of time
it takes to recover the projected costs of the initial investment. The project is better
when it pays off in a very short period.

Step 7: - Use CBA to inform decision whether to pursue the project

If the projected benefits are clearly greater than the costs and the pay-back period is
reasonable, then the venture can be taken into action. If the venture is not able to
generate the profits in the long run in a reasonable time, then the venture should not
be considered.

1.3 - Importance of the Topic

The importance of CBA approach comes from the need of taking decisions. The need
is not about disregarding the quality and value and decreasing things to a monetary
value. While taking decisions, one alternative is selected from various sources,
perhaps it might be problematic because they might not be equivalent to each other.
During CBA, the listing of possible costs will help to analyse the budget to undertake
the venture. Benefits can also be anticipated to project the sales which can be
computed into financial goals.

It is useful for business persons, who examine the projects and select those ventures
which is profitable. Investments can be prioritized, selecting the projects with lowest
cost to invest and with greatest benefit. This will help in achieving fastest returns on
investments and to use left-over capital for additional ventures.

Revenue goals can be set using quantifiable benefits. Time, productivity and
management goals are set by other benefits.

1.4 - Need to study the Topic

Cost –benefit analysis is one of the tool in managing funds in an organization. The
study also concentrates to know what costs are incurred in manufacturing firm and
the benefits obtained by the firm in long run. To identify what are the extra costs and
identify cost cutting measures.

Cost benefit analysis is typically used to compare projects and take important
business decisions. These rely on finance and spending money and used early in the
project development phase.

Some common applications include:

 Opening a new location

 Acquisition of additional capital
 Hiring a costly employee
 Purchase of new machinery

Chapter – 2

Review of Literature and Research Design

2.1 - Review of Literature and Gaps

1. Md. Khairul Islam, Md. Elias Hossain and Bikash Chandra Ghosh
(2013), “A study on CBA of Handloom Weaving Industry in Bangladesh”.
The study concluded that the objective of the study is to analyse cost-benefit
of handloom weavers. The data was collected through structured
questionnaire and this data was analysed using mathematical and statistical
techniques. The study revealed that handloom weaving activity was
profitable and per-loom profit for small scale and large scale units was higher
than the medium scale units.

2. Sunil Jauhar, K.M.Asthankar and A.M.Kuthe (2012), “CBA of Rapid

Manufacturing in Automotive Industries”. This research included the
application of rapid manufacturing techniques to save the time as well as cost
of manufacturing of few critical components of automobiles. Their aim was
to reduce the lead time required for tooling the conventional block type
investment casting process. The finding was that RP was an ideal method
when the components are complex in shape because it substantially
compresses the time for developing prototypes, patterns and tooling. This
method was even more promising on cost and time front. The use of benefits
in terms costs have proved that the adoption of RP technology is techno-
economically justifiable for the Indian manufacturing industries.

3. Samuel J. Wang, Blackford Middleton (2003), “CBA of electronic medical

records in primary care”. The purpose of the study was to estimate the net
financial benefit or cost of implementing electronic medical record systems
in primary care. Cost-benefit study was performed to investigate the money
related impacts from claiming electronic medicinal record frameworks.
Information was gained from studies at our institution and from the
distributed writings. The result were that the estimated net benefit from using
an electronic medicinal record for a 5 year period was $86400 per provider.
The net profit wide-ranging from a low of $8400 to a high of $140100. This
concludes that implementation of an electronic medical record system in
 primary care can result in a positive financial return on investment to the
health care organization.

4. J.K. Kaldellis, K.A. Kavadias (2007), “CBA of remote hybrid wind- diesel
power stations”. This study was concentrated on a detailed energy production
cost analysis in order to estimate the optimum configuration of a wind-diesel-
battery stand-alone system used to guarantee the energy autonomy of a
typical remote consumer. Accordingly, the influence of the governing
parameters- such as wind potential, capital cost, oil price, battery price and
first installation cost-on the corresponding electricity production cost is
investigated using the developed model. Taking into account the results
obtained, hybrid wind-diesel systems may be the most cost-effective
electrification solution for numerous isolated consumers located in suitable
wind potential regions.

5. Nava Haruvy (1997), “Agricultural reuse of wastewater: nation-wide cost-

benefit analysis”. The available paper demonstrates, how should tackle
choice-making inquiries regarding the disposal of wastewater from a
budgetary angle. It compares different wastewater recovery and reuse
alternatives, for example, medicine levels and area of reuse, by computing
the net national profit as applied to a specific case study in central Israel.
Various alternatives were compared including waterway disposal, nearby
agriculture reuse of water, and also movement to the south. The costs which
were estimated includes those of treatment, storage and conveyance, while
benefits were the worth of agricultural output, the decrease in fertilization
costs, and aquifer recharge. As stated by this analysis, waste water irrigation
in the core from claiming Israel recovers US$0.50-0.60/m3 compared with
waterway disposal, and US$0.10-0.20/m3 compared with movement to the
south. Movement to the south of tertiary treated effluent instead of discard
saves US$0.12/m3, justifying a subsidy.

6. H S Ruchlin and J N Morris (1981), “CBA of an emergency alarm and

response system: a case study of a long-term care program”. This article
demonstrates the utility of applying cost-benefit analysis to evaluations of
 long-term care programs. A case study is presented in which cost-benefit
analysis is used to evaluate an emergency alarm and response system
developed to monitor the safety of vulnerable and disabled persons in their
home environment. In this case of long-term care, it is frequently alleged that
cost benefit analysis cannot be fruitfully applied.

7. Kristin L. Nichol (2001), “CBA of a strategy to vaccinate healthy working

adults against influenza”. Influenza is a major cause of illness, disruption to
daily life, and work absenteeism among healthy working adults aged between
18 and 64 years. The objective was to assess the economic implications of a
strategy for annual vaccination of this group. The methods included direct
and indirect costs prevented by vaccination. Monte Carlo simulation was
used to calculate the mean net costs or savings along with 95% probability
interval. The author concluded by saying Influenza vaccination of healthy
working adults on average is cost saving. These findings support a strategy
of routine, annual vaccination for this group, especially when vaccination
occurs in efficient and low cost sites.

8. William S. Cartwright (2000), “CBA of drug treatment services”. The aim

of this study is to audit CBA with logical legitimacy so experts will have a
momentum photo of the condition of the examination. It will likewise give
open chiefs data with respect to the accessible confirmation for arrangement
purposes. The author finishes up saying drug manhandle treatment
administrations might be considered as contributing positive monetary comes
back to society. In any case, extensive work should be done to institutionalize
strategies utilized as a part of the reviews. A striking region of exclusion is
the nonattendance of studies for teenagers and just a single for ladies in
treatment.

9. Ann- Christine Falck, Roland Ortengren, Dan Hogberg (2009), “The

impact of poor assembly ergonomics on product quality: A CBA in car
manufacturing”. The point of this review was to break down the connection
between gathering ergonomics, collect capacity and item quality and at
evaluating these connections in monetary terms. This was to better to bolster
 the advancement of more ergonomic item and gathering arrangements,
especially at early phases of the car improvement process. The get-together
of 24,443 cars was studied for 2 months in a get-together plant and for an
additional 4 months as manufacturing works complete vehicles. The outcome
demonstrated that expanded risks for quality blunders of 3.0 and 3.7 times
and aggregate activity costs that were 8.7 times and 8.2 times higher for high
and medium physical load gatherings contrasted with low physical load
congregations for 55 assignments surveyed.

An attempt has been made to analyse the cost involved and the benefit received
through this study.

2.2 - Statement of the Problem

Now a days the manufacturing firms prefer to import small materials from low cost
manufacturing countries, rather producing them because of low margins in the
production process. This study will help in finding out the measures to improve the
benefit share.
2.3 - Scope of the Study

This study help me to put into practice the theoretical aspects of financial aspects.
The study is conducted at “GARUDA FASHIONS PVT LTD, Bangalore”. The study
is confined to use the financial reports provided by the company, and the data is
analysed, interpreted into a meaningful form. The study is confined to COST-
BENEFIT ANALYSIS.

2.4 - Objectives of the Study

 To know the costs incurred and the benefits in long run.

 To assign monetary values to the benefits
 To study the cost- benefit analysis
 To identify cost cutting measures.

2.5 - Sampling

For the purpose of study, sampling methods used were:

 Direct interview with the finance team of Garuda Fashions PVT.LTD

 Financial statements of the firm from annual reports.
GARUDA FASHIONS is a premier manufacturer and supplier of readymade
garments established in 1993 by Managing Director, Mr M.G. Reddy. With annual
turnover of 25-50 crores.

Sources of Data

For the present study data collected from 2 sources:

Primary Data

It is the first hand data collected directly from the correspondence by researcher's
from the employee of the organization particularly with the field workers and with
the help of structural questionnaire which was issued to the correspondence by
researcher on subject.

In this study, information is collected through direct discussion with officials, finance
professionals at GARUDA FASHIONS PVT LTD, Bangalore.

Secondary Data

The data which is available from the source this data has already been collected and
analyzed. This may either be published or unpublished from the publisher used by
researcher.

Secondary data is collected by reviewing literature on cost-benefit analysis, annual

reports of the company and financial statements of 4 years.

2.6 - Tools for Data Collection

To do analysis, data is collected through:

 Profit & Loss account statement

 Balance sheet
 Annual reports

2.7 - Data Analysis

Data of 4 years is collected and few financial formulas are applied and interpolated
for drawing conclusions regarding the cost-benefit analysis of the company.

 Tables
 Graphs
 Budgeting techniques

Data collected are tabulated and analysis is done using financial costs and benefits,
capital budgeting techniques and cost management techniques.
2.8 - Limitations of the Study

 The study restricted to GARUDA FASHIONS PVT. LTD. this could have
given rise to a unique perception of the culture.

 The information and data provided is only for 4 years.

 Any errors in the financial statements could have been carried out in the study
as well.

2.9 - Chapter Schemes

1. Introduction :
This chapter covers the introduction to textile industry, cost benefit analysis
and its importance and its need.
2. Review of Literature and Research Design :
This chapter deals with explaining how the entire project is being dealt with
towards providing suggestions and conclusions to title. Review of previous
studies have been mentioned.

3. Company Profile :
Brief introduction of the Garuda Fashions Pvt Ltd. Profile of the company,
when it came into existence, its products profile.

4. Data Analysis and Interpretation :

This chapter deals with application of trend analysis for better interpretation
of data collected for the project report and is being represented in graphs and
diagrams.

5. Findings, Conclusions and Suggestions :

This chapter deals with findings and providing suitable suggestions to the
company based on the findings.
Conclusion deals with how the project was dealt with and its suitability to the
organization.

Chapter – 3

Company Profile

GARUDA FASHIONS PVT LTD

Company GARUDA FASHIONS PRIVATE LIMITED
Name

Company Manufacturing – Textiles

Activity

CIN U18101KA1997PTC022671

Registration 20 August, 1997

Date

Registeration 022671
No.

RoC Bangalore

State Karnataka

Registered M.m.m.p Tower, No.10, Behind Shri Lakshmi

Address Hospital,sunkadakatte Bangalore Karnataka India 560091,
Bangalore - 560044, Karnataka, India

Category Company Limited by Shares

Sub Category Indian Non-Government Company

 Authorised Rs 10,000,000.00 INR
Capital

PaidUp Rs 9,500,000.00 INR

Capital

Company Private
Class

Last Annual Not Available

General
Meeting Date

Date of Not Available

Balance Sheet

Is Company Not Listed

Listed

Company Active
Status

Garuda Fashions Pvt. Ltd. started its business operations as Private Limited
Company in the famous city of gardens, Bangalore, Karnataka, India. It was not
imagined at the time of inception in 1993, a modest beginning would turn into a huge
manufacturing and supplying of Party Wear Garments, Formal Wear Garments and
Casual Garments which include shirts and many more apparels for both men and
women. We manufacture and supply our products under the brand name of British
Club, Nature and Independence. We have a great sense of understanding regarding
the prevailing trend of fashion in the market, and we ensure to manufacture only
those clothing items which are customer’s delight. Our entire production is on done
on the latest machines and equipments which are specially meant to cater to the needs
of customers. We ensure while pursuing the fashion the quality is not compromised,
and customers are benefited the most. We have a huge base of clients, who are happy
and satisfied with our range of products this is owing to our usage of quality raw
material in our manufactured items.

The complete business activities of Garuda Fashions Pvt. Ltd. are looked after by
Mr. Kushal M. G. who is a person with great qualities. He is a strong leader, who
provides excellent support in complete business operations which helps us to achieve
our goals very efficiently. Mr. Kushal M. G. has demonstrated a great commitment
in ensuring the prosperity and growth of the organization. He gives a lot of
importance to ethical business values. MG Reddy is the founder of the organisation.

Our entire unit is sprawled over a huge area with complete state-of- the-art
Infrastructure facilities. This has immensely benefited us directly, in meeting bulk
production while keeping assured quality. We are apt in usage of change in
technology for the benefit of our business. Our infrastructure is segmented into
manufacturing, R&D, warehousing, dispatch and transportation. Every unit knows
its roles, and they are in close coordination of each other for achieving common end.

Our team of workforce is wonderful, they know their job very well and have great
love and appreciation for their team workers, the mutual respect has led to a great
bonding and respect for each other. All this has led to a great performing team
subsequently leading to a progressing company meeting the expectations and even
going a step beyond their duties. We are proud to have people full of professionalism
with values. Our clients hold us in great esteem owing to our client centric approach
which ensures all their requirements are met.

For greater customer satisfaction we ensure our packaging is done in such a manner
which is a delight for the customer.

Our Team

No amount of machines can do you well, if your team behind them is not efficient.
Thus, we have ensured to hire excellent team of people who are great technicians,
designers, sewers and many more who are thorough in their job. We are known for
hiring quality people who can do job for us. The right hiring leads to better results
and therefore excellent client satisfaction. We are proud of our team members
working for us.

Our Legacy

Our chairman and managing director, Mr. M.G.Reddy started Garuda Fashions in
1993 with the brand - Independence. Our expertise comes from over two decades of
experience in the branded apparel segment, which gives us the ability to combine
affordability with international standards of quality and style.

.
Vision

We aim to expand and sustain our market share by increasing brand visibility and
increasing our production to triple capacity by the year end of 2018-19; to complete
our men's wear wardrobe collection and reinforce our brand presence through
exclusive stores in the near future and maintain a strong market presence through
trendy products created through the best quality practices, ensuring customers of the
very best products every time

Quality policy

We are committed to provide apparel that meet or exceed present and continual
expectations of our customers in terms of product quality, delivery and cost

Infrastructure facilities

1. Use of advance technological system

2. Highly reliable customers

3. Quality assurance
 4. First aid kits

5. Good security system

6. Ample parking place for both employees and visitors

Our Brands

We are Providing Following Brands Shirts:-

 Independence

 Nature

 British club

Products & Services

We are engaged in manufacturing and supplying to our valuable clients a qualitative

range of Formal Wear Garments, Casual Garments and Party Wear Garments. Our
products are highly reckoned among our clients due to their fine quality and attractive
designs.

Men's Formal Shirts

Formal Shirts

Sport Wear Shirts

Casual Wear Shirts

New Items

Formal Plain Shirts

Sport Wear Shirts

Casual Wear Shirts

Party Wear Shirts

Casual Wear Shirts

Casual Garments

Men's Casual Shirts

Designer Casual Shirts

Sport Shirts

Party Wear Shirts

Formal Wear
Competitors:

a) Arvind mills

b) Black bird

Future growth & prospectus:

1. To expand its operations at international market.

2. To have profitable growth in all segments.

3. Our brands have been growing at the rate of 20-30% and we foresee the same
to continue for the next few years.

4. We have plans to achieve this by strengthening our retail presence

5. Organized retail is increasing its share and with more brands coming to India
offering world-class retail experience, retail has become one of the critical
growth drivers of the company.

6. Our company is also focusing on making innovative product offerings to the

market.
 7. The industry is in an expansion mode and is likely to benefit from growing
demand both in the domestic as well as global markets.

8.

SWOT ANALYSIS OF GARUDA FASHIONS PVT LTD

STRENGHTS:

1. Established product name reputation of input

2. Good distribution network

3. Cost advantage

4. Continuous innovation in style and design

5. Hard working and trusted employees

WEAKNESS:

1. High costs of inputs power blocked working capitals and hence high
interested cost affecting cost.

2. High levels of fluctuation in inputs prices.

OPPORTUNITIES:

1. Scope for innovation and R&D.

2. Scope to work together on various common business plans as to enhance cost

and quality competitiveness.

THREATS:

1. Fluctuations in raw materials cost.

2. Enhanced cost and quality competition.

 Chapter - 4

Data Analysis and Interpretation

Generally, research consists of two parts, namely, the gathering of the data and its
analysis. The mass of the data collected through sophisticated tools however valid,
reliable, systematically classified and tabulated, scientifically analysed, intelligently
interpreted and rationally concluded.

The analysis and explanation of data involves the purposes materials in the
possession for the researcher and subjective response to derive from the data, the
integral relation among variables relating to the problem. Analysis and interpretation
represents the application of logical and inductive logic to the research process.

Interpretation refers to the stating of what the findings depict and what they mean,
their significance that helps drawing answers to the original problems. Interpretation
of the analysed data required considerable skill and experience. It is a purely
subjective process. Hence, interpretation calls for a critical examination of the results
of one analysis in the light of the entire data gathering.

Cost Benefit Analysis refers to analysing the costs and benefits of the particular
venture. If the benefits earned by the company is greater than the costs incurred then
the project will be profitable. If the benefits are less than the costs then the project
will not be acceptable.

For this study, analysis is done using 4 years annual reports from GARUDA
FASHIONS PVT LTD. The analysis is done using the following tables and graphs.

1. Revenues and Expenditures

2. Investment in Raw Materials
3. Assets
4. Earnings Per Share
5. Net Present Value
6. Pay Back Period
Table 4.1:- Showing Expenditures incurred by the Firm

Particulars Year 2012 2013 2014 2015

Total Expenditures 233,105,779 242,191,710 311,722,778 323,714,462

Graph 4.1: - Showing expenditures incurred by the firm

Expenditures Incurred
350000000 323714462
311722778
300000000

242191710
250000000 233105779

200000000

150000000

100000000

50000000

2012 2013 2014 2015

Interpretation:

From the above graph, we can analyse that the expenditures incurred by the firm are
comparatively increasing between 2012-2013 and 2014-2015.
Table 4.2: - Showing total Revenues of the firm

Particulars Year 2012 2013 2014 2015

Total Revenues 243,787,849 253,768,464 329,451,767 341,555,971

Graph 4.2: - showing revenues of the firm

Total revenues
400000000
341555971
350000000 329451767

300000000
243787849 253768464
250000000

200000000

150000000

100000000

50000000

0
Revenues

2012 2013 2014 2015

Interpretation:

The above graph shows the revenues earned by the firm. The revenues are showing
comparative rise in the earnings, but when compared with expenditures from graph
2 we can analyse that the revenue ratio which is earned is very low.

Table 4.3: - Showing comparison of Expenses and Revenues

 Particulars Year 2012 2013 2014 2015

Total Expenditures 233,105,779 242,191,710 311,722,778 323,714,462

Total Revenues 243,787,849 253,768,464 329,451,767 341,555,971

Graph 4.3: - Showing Comparison of Expenses and Revenues

Chart Title
400000000

350000000

300000000

250000000

200000000

150000000

100000000

50000000

0
2012 2013 2014 2015

Total Expenses Total Revenues

Interpretation:

From the above graph we can see that the expenses and the revenues are increasing
in same manner. We can analyse that the ratio between the expenses and the revenues
is not much.

Table 4.4: - Showing Profit Before Tax

 Particulars Year 2012 2013 2014 2015

Profit Before Tax 10,682,070 11,576,754 17,728,989 17,841,509

Graph 4.4: - Showing Profit Before Tax

Profit Before Tax

20000000
17728989 17841509
18000000
16000000
14000000
11576754
12000000 10682070
10000000
8000000
6000000
4000000
2000000
0
PBT

2012 2013 2014 2015

Interpretation:

This graph shows the profits calculated before tax, there is a drastic change in the
profits between 2013 and 2014 because of rise in the revenues earned during this
year. And during 2015 there is a slight increase in the profits.

Table 4.5: - showing profit after tax

 Particulars Year 2012 2013 2014 2015

Profit After Tax 6,633,699 7,591,656 11,523,715 11,827,665

Graph 4.5: - showing Profit After Tax

Profit After Tax

14000000

11523715 11827665
12000000

10000000

7591656
8000000
6633699
6000000

4000000

2000000

0
PAT

2012 2013 2014 2015

Interpretation:

The above graph shows the profits calculated after deducting the tax. Comparing
with the graph 3 we can see that the profit share has reduced to greater value after
deducting the tax concerns.

Table 4.6: - Showing Comparison of Profit before tax and Profit

after tax
 Particulars Year 2012 2013 2014 2015

Profit Before Tax 10,682,070 11,576,754 17,728,989 17,841,509

Profit After Tax 6,633,699 7,591,656 11,523,715 11,827,665

Graph 4.6: - Showing Comparison of Profit before tax and Profit

after tax

Chart Title
20000000
18000000
16000000
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
2012 2013 2014 2015

Profit before tax Profit after tax

Interpretation:

From the above graph shows the profits calculated before tax and after tax. We can
see that the tax elements are slightly going on increasing from 2012 to 2015. From
this it is interpreted that the company is paying more tax elements in 2014-2015.

Table 4.7: - Showing Stock of Raw Materials

 Particulars 2012 2013 2014 2015

Opening stock 16,174,421 34,048,351 38,420,795 34,610,411

Closing stock 34,048,351 38,420,795 34,610,411 38,713,038

Actual materials used (17,873,930) (4,372,444) 3,810,384 (4,102,627)

Graph 4.7: - Showing stock of Raw Materials

Materials Stock
45000000
40000000
35000000
30000000
25000000
20000000
15000000
10000000
5000000
0
2012 2013 2014 2015

opening stock closing stock

Interpretation:

From the above graph we get the opening and closing stock of the materials. During
the year 2012, we can see huge difference in the stock management. Then from the
data of year 2014 and 2015, we can analyse that the company is managing its stock
in a better way.

Table 4.8: - Showing Cost of Materials Consumed

 Particulars 2012 2013 2014 2015

Raw materials 120,395,665 111,498,095 159,499,816 170,598,696

Graph 4.8: - Showing Cost of Materials Consumed

Cost of materials consumed

180000000 170598696
159499816
160000000

140000000
120395665
120000000 111498095

100000000

80000000

60000000

40000000

20000000

0
Category 1

2012 2013 2014 2015

Interpretation:

This graph shows the cost incurred in the materials, the value of the materials
consumed is increasing through the years. During 2014 and 2015 the cost of materials
consumed is in rise due to increase in the purchases of the raw materials in these
years and the production work.

Table 4.9: - Showing Cost of Accessories Consumed

 Particulars 2012 2013 2014 2015

Accessories consumed 46,283,940 45,866,298 50,802,306 54,945,899

Graph 4.9:- Showing Cost of Accessories Consumed

Cost of Accessories Consumed

56000000 54945899

54000000

52000000 50802306
50000000

48000000
46283940 45866298
46000000

44000000

42000000

40000000
Accessories consumed

2012 2013 2014 2015

Interpretation:

The above graph shows the consumption of accessories in cost. The purchase of
accessories during 2012 and 2013 were low when compared with the year 2014 and
2015. This is due to increase in the production of goods.

Table 4.10: - Showing Cost of Consumables/ Spares

 Particulars 2012 2013 2014 2015

Consumables consumed 857,151 528,413 786,661 907,790

Graph 4.10: - Showing Cost of Consumables/Spares

Cost of Consumables
1000000
907790
900000 857151
786661
800000
700000
600000 528413
500000
400000
300000
200000
100000
0
consumables

2012 2013 2014 2015

Interpretation:

This graph shows the cost of consumables utilised during this period. There is a
decrease in the year 2013 and during 2014 and 2015 the purchase of consumables is
increasing in a stable manner.

Table 4.11: - Showing Consumption of Materials

 Particulars 2012 2013 2014 2015

Raw materials 120,395,665 111,498,095 159,499,816 170,598,696

Accessories consumed 46,283,940 45,866,298 50,802,306 54,945,899

Consumables consumed 857,151 528,413 786,661 907,790

Graph 4.11: - Showing Consumption of Materials

Consumption of Materials
180000000

160000000

140000000

120000000

100000000

80000000

60000000

40000000

20000000

0
2012 2013 2014 2015

Raw Materials Accessories Consumables

Interpretation:

From the above graph we can see that the consumption of raw materials is increasing
in trend from 2013 to 2015. And the consumption of accessories is varying in a very
low rate. The consumption of consumables / spares is showing stagnant over the
years 2012 to 2015. So the cost is spent mostly on raw materials.

Table 4.12: - Showing Total Cost of Materials Consumed

 Particulars 2012 2013 2014 2015

Cost of materials consumed 167,536,756 157,892,806 211,088,783 226,452,385

Graph 4.12: - Showing Total Cost of Materials Consumed

Total Cost of Materials Consumed

250000000
226452385
211088783
200000000
167536756
157892806
150000000

100000000

50000000

0
total materials consumed

2012 2013 2014 2015

Interpretation:

This graph shows the total cost of materials consumed, this includes materials,
accessories and consumables which are shown separately in the above graphs. The
cost is increasing in a decent manner from 2013 to 2015.

Table 4.13: - Showing Revenue from Sale of Products

 Particulars 2012 2013 2014 2015
Sale of 260,671,245 266,729,775 325,722,436 338,011,186
Products

Graph 4.13: - Showing Revenue from Sale of Products

Sale of Products
400000000

350000000 338011186
325722436

300000000
260671245 266729775
250000000

200000000

150000000

100000000

50000000

0
Sale of Products

2012 2013 2014 2015

Interpretation:

This graph shows the revenue generated by sale of the products. We can see that the
sales are going on increasing by each year.

Table 4.14: - Showing Outstanding Trade Receivables

 Particulars 2012 2013 2014 2015
Outstanding Trade 4,780,735 10,233,381 9,223,174 12,852,055
Receivables

Graph 4.14: - Showing Outstanding Trade Receivables

Chart Title
14,000,000 12852055

12,000,000
10,233,381
10,000,000 9223174

8,000,000

6,000,000
4,780,735

4,000,000

2,000,000

0
Outstanding Trade Receivables

2012 2013 2014 2015

Interpretation:

The above graph shows the trade receivables which are outstanding over 6 months
from the date of due. The outstanding trade receivables has increased double from
the year 2012 to 2013, with slight decrease in 2014 and again an increase trend in
2015. This shows that the outstanding trade receivables are very huge.

Table 4.15: - Showing Investments in Fixed Assets

 Particulars 2012 2013 2014 2015
Fixed assets 18,151,160 17,003,761 14,661,225 11,983,314

Graph 4.15: - Showing Investments in Fixed Assets

Fixed Assets
20000000
18151160
18000000 17003761
16000000 14661225
14000000
11983314
12000000
10000000
8000000
6000000
4000000
2000000
0
fixed assets

2012 2013 2014 2015

Interpretation:

The above graph shows investments in fixed assets is decreasing from 2012 to 2015.
This represents that company depends more on current assets and less on fixed assets.

Table 4.16: - Showing Current Assets

 Particulars 2012 2013 2014 2015
Current 142,845,563 157,401,959 166,920,149 186,462,332
assets

Graph 4.16: - Showing Current Assets

Current Assets
200000000 186462332
180000000 166920149
157401959
160000000
142845563
140000000
120000000
100000000
80000000
60000000
40000000
20000000
0
current assets

2012 2013 2014 2015

Interpretation:

The above graph shows that the current assets are increasing from 2012 to 2015. This
represents investments in current assets is increasing in the previous years.

Table 4.17: - Showing Comparison of Fixed assets and current assets

 Particulars 2012 2013 2014 2015
Fixed assets 18,151,160 17,003,761 14,661,225 11,983,314
Current 142,845,563 157,401,959 166,920,149 186,462,332
assets

Graph 4.17: - Showing comparison of fixed assets and current assets

Total Assets
200000000
180000000
160000000
140000000
120000000
100000000
80000000
60000000
40000000
20000000
0
2012 2013 2014 2015

Fixed assets Current assets

Interpretation:

The above graph shows the investment in fixed assets is stagnant throughout the
years. And there is increase in the investments in current assets, this shows the
company is depending more on current assets.

Table 4.18: - Showing Earning Per Share

 Particulars 2012 2013 2014 2015
EPS 69.83 79.91 121.30 124.50

Graph 4.18: - Showing Earning Per Share

EPS
140

121.3 124.5
120

100

80 79.91
69.83
60

40

20

0
2012 2013 2014 2015

EPS

Interpretation:

The above graph shows the EPS of the firm. We can see that the earnings per share
has increased from 79.91 to 121.3 and later it was stagnant.

Net Present Value

Net Present Value is characterized as the distinction between the present estimation
cash flows from an outlay and the amount of investment. Existing value of the
expected cash flows is calculated by discounting them at the required rate of return.

A positive net present value means a well return, and a negative net present value
means a poorer return, than the return from zero net present value. It is one of the
two discounted cash flow techniques used in qualified appraisal of investment
proposals where the flow of income varies over time.

Formula:

NPV= ∑ {After-Tax Cash Flow / (1+r)^t} - Initial Investment

Year PAT Depreciation PBDAT Discount PVCF

factor @
10%
2012 6,633,699 3,844,374 10,478,073 0.9091 9,525,616
2013 7,591,656 3,278,324 10,869,980 0.8264 8,982,951
2014 11,523,715 3,515,165 15,038,880 0.7513 11,298,710
2015 11,827,665 4,167,376 15,995,041 0.6830 10,924,613
Total 40,731,890

Net Present Value = Discounted Cash Flow – Investment

NPV = 40,731,890 – 40,000,000

NPV = 731,890

Interpretation:

There is an up and down trend in the discounted cash flows in the firm. The NPV
shows positive value which is the good sign for the growth of the company.

Pay Back Period

The pay back sometimes called as pay out or pay off period method represents the
period in which the total investment in permanent assets pays back itself. This
method is based on the principle that every capital expenditure pays itself back within
a certain period out of the additional earnings generated from the capital assets. In
this way, it measures the timeframe for the first cost of a venture to be recovered
from the extra profits of the project itself. Under this technique, different investments
are positioned according to the length of their payback period in such a way that the
investment with a shorter payback period is desired to the one which has longer
payback period.

In case of evaluation of a single project, it is adopted if it pays back for itself within
a period specified by the management and if the project does not pay back itself
within the period specified by the management then it is rejected.

Formula:

Initial Investment
Payback Period =
Cash Inflow per Period

Years PBDAT Cumulative values

2012 10,478,073 10,478,073
2013 10,869,980 21,348,053
2014 15,038,880 36,386,933
2015 15,995,041 52,381,974

Pay- back period = 36386933+3613067÷15995.041

Pay- back period = 3+0.225

Pay- back period = 3. 225 years

Interpretation:

From the calculations, we can see that the company will get its investments in 3.225
years. Hence this shows that the company gets back its investment in a reasonable
time which is profitable.

Chapter – 5

Summary of Findings
 There is an increase in the expenses between the years 2012-2013 and 2014-
2015.

 The revenues are also increasing in the same manner.

 When we compare the expenses and the revenues there is just a slight change
in the profit ratio.

 The profits calculated after tax are reduced to greater extent than the profits
before tax. It shows the huge increase in the payment of tax elements.

 The stock of raw materials were not maintained effectively in the year 2012,
but coming in 2014-2015 the company has managed well in maintaining the
stock.

 The consumption of materials has increased in the year 2014 and 2015 when
compared to 2012-2013.

 The consumption of accessories has increased in 2014 and 2015 because of

purchase of accessories in this year.

 The consumption of consumables/ spares have decreased in 2013 and then

increased in 2014 and 2015.

 The raw materials consumption is showing an increasing trend, where

accessories vary at low rate and consumables are stagnant.

 The company’s generated sales are in an increasing trend.

 The company’s outstanding trade receivables over 6 months are very huge.
In 2013 to 2015, the outstanding receivables are very high.
 In 2012, the company has invested more in fixed assets and then it shows a
decreasing in trend.

 The company’s investment in current assets is showing an increasing trend.

 When comparing with fixed assets and current assets, the company is
investing more in current assets than fixed assets.

 The company’s earnings per share has increased in 2012 to 2015 from 69.83
to 124.5.

 The net present value of the company calculated is showing positive value.

 The payback period calculated is 3.225 years that is the company gets back
its investment in a reasonable time.

Conclusion
The study is all about analysing the expenses incurred in the manufacturing firm and
the revenues earned by the firm. The ratio of profits earned by the manufacturing
firm. The major investments in assets of the firm.

The study reveals that costs of manufacturing should be reduced so that the profits
ratio would increase. The company is maintaining its material turnover ratio. The
company’s maintenance of the debtor’s turnover is very poor over all the periods.

The company’s shareholders are assured of better Earnings Per Share. The tax
elements are increased in the year 2014-2015, so it reduced the profit share for the
company.

Proper use of Cost Benefit Analysis procedure will help the company to reduce the
cost and improve revenue, profits of the firm. And the stake holders also get better
return on their investment.

Suggestions
 Garuda Fashions need to maintain its inventory in more flexible
and efficient manner, in order to cut the cost of inventory.

 The company’s tax elements in 2014-2015 is very high, the

company is suggested to plan tax management to get more benefit.

 The company’s outstanding debtors are high over 6 months, hence

it should take measures so that it can recover the debtors within 3
months so that the cash can be utilised in other elements.

 The company should maintain its investment in current assets for

continuous production.

 Proper Cost Benefit Analysis mechanisms must be taken to

improve the productivity of the firm by using Make / Buy
decisions.