PROJECT REPORT

ON
VENKY GOWDA BAKERY

SUSHEEL PRAJAPAT
FINANCE B
19MBAJ0209
INTRODUCTION
Venky gowda bakery(VGB) is a start-up bakery retail establishment
located in Agrahara Dasarahalli,Bangalore.VGB expects to catch the
interest of a regular loyal customer base with its broad variety of biscuit
and pastry products. The company plans to build a strong market position
in the town.

VGB aims to offer its products at a competitive price to meet the demand
of the middle-to higher-income local market area residents and tourists.

Name of the company Venky gowda bakery

Address 20/1 7th main 2nd cross rajajinagar

Bangalore 560079.

constitution Private ltd

Activities bakery puffed biscuits,Aata

biscuits,rusk,cake and pastries

Promoters-cum partners • Mr.venky gowda

• Mr.kiran gowda

Cost of project 6000000

Mean of finance

• Term loan from bank • 2000000

• promoters contribution • 4000000

THE PROMOTERS

VVB is incorporated in the BANGALORE. It is equally owned and managed

by its two partners.
Mr.Venky Gowda has extensive experience in bakery products and he
have worked in iyengar bakery for 5 years.

PROFILE

Name : Mr.Venky gowda

Father’s Name : Sri ramu gowda
Age : 29 years
Educational Qualification : B.COM
Experience : 5 years

Mr.Kiran Gowda brings experience in the area of finance and

administration.

PROFILE

Name : Mr.Kiran gowda

Father’s Name : Sri venkatesh gowda
Age : 31 years
Educational Qualification : B.COM
Experience : 8 years

THE PROPOSAL
It is proposed here to manufacture khari (bakery puffed biscuits), rusk
(toast)and Aata biscuits with an installed capacity of total 500 kg/day, in
which, 20% khari,20% rusk , 30% assorted bakery Atta biscuits and 30%
cakes and pasteries.

IMPLEMENTATION SCHEDULE
The implementation of the project includes market surveys, selection of site,
registration, financing of project, procurement of machinery and raw materials etc.,
recruitment of staff, commissioning of machines, trial production and commercial
production etc. In order to efficiently and successfully implement the project in the
shortest period, simultaneous exercises are carried out. Project implementation will
take a period of 8 months from the date of approval of the scheme. Breakup of
activities with relative time for each activity is shown below.
 Activity Period ( in months)
Scheme Preparation and approval 0-1(Jan)
SSI Provisional Registration 1-3(Jan-Mar)
Sanction of loan 3-5(Mar-May)
Placement of order for machinery and 3-4(Mar-April)
delivery
Installation of machines 4-5(April-May)
Power connection 5-6(May-June)
Trial run 6-7(June-July)
Commencement of Production 8(Aug)

STATUTORY & GOVERNMENT APPROVALS

It is mandatory for the bakeries to acquire licenses from FSSAI, GST,
Local Municipality, Police Eating House, Fire Department and State
Pollution Control Board. Out of these, the FSSAI, GST and local Municipal
Health permits are of priority before starting the unit

DOCUMENTS REQUIRED FOR BAKERY BUSINESS LOANS

Personal KYC PAN card

Residential Address Proof (Any One) Rent Agreement | Driving License | Voter's ID
| Ration Card | Passport | Aadhar Card

Banking Last 6 months current account bank statements

Business KYC (Any One) GST Registration Certificate | Shops &

Establishment Certificate | Business PAN Card
MANUFACTURING PROCESS

KHARI
Weigh all ingredients as per formula. Make soft dough in a dough kneader still
it becomes smooth and glossy. Roll the dough into sheets of required
dimensions and thickness, apply flour dusting as required. Apply ghee on
layers and fold it still of required size. Repeat the process still layers are
formed. Refrigerate it for 15 minutes. Remove from refrigerator, cut into
pieces of required size and dimensions. Place all the pieces in baking oven and
bake at 200 °C 20-25 minutes. After that lower the temperature and bake at
180° C for another 15-20 minutes. Cool the pieces, pack as per weight decided
of SKU into poly bags and then put into corrugated carton for dispatch.

RUSK (TOAST)
Pre-mixing of ingredients as per formulation to form dough of proper
consistency. The dough is then divided and pieces put into moulds for
proofing, followed by first baking, cooling, second baking and again cooling
and packing. First baking to do at 200° C and second baking at 180° C.

ATTA BUISCUIT
Weigh all ingredients and make soft dough with addition of sugar, ghee and water as
per formula. Beat the dough still it becomes soft and fluffy.
Add yoghurt and best again. Keep it in such condition for 10-15 min.
Press the dough into flatten rounds and make incision with knife at centre. Sprinkle
cardamom, coconut or sesame seeds just for decoration. Bake the rounds at 200° C
for 20-25 minutes.

CAKE
Preheat the oven to 350 degrees F. Coat two 9-inch-round cake pans with cooking
spray and line the bottoms with parchment paper. Whisk the cocoa powder and 1
1/2 cups boiling water in a medium bowl until smooth; set aside. Whisk the flour,
sugar, baking powder, baking soda and salt in a large bowl until combined. Add the
eggs, vegetable oil, sour cream and vanilla and beat with a mixer on medium speed
until smooth, about 1 minute. Reduce the mixer speed to low; beat in the cocoa
mixture in a steady stream until just combined, then finish mixing with a rubber
spatula. (The batter will be thin.) Divide the batter between the prepared pans and
tap the pans against the counter to help the batter settle. Bake until a toothpick
inserted into the middle comes out clean, 30 to 40 minutes. Transfer to racks and let
cool 10 minutes, then run a knife around the edge of the pans and turn the cakes out
onto the racks to cool completely. Remove the parchment. Trim the tops of the
cakes with a long serrated knife to make them level, if desired.
PROCESS FLOW CHART
FINANCIAL STATEMENTS
1.Cost of the Project

SL NO PARTICULARS AMOUNT

1 Land 2000000

2 Building 1000000

3 Plant & Machinery* 2500000

4 Working Capital* 500000

TOTAL 6000000

* Machinery Particulars are as under:

SL NO Equipment Quantity Rate Total

(Rs./Unit) Amount
(Rs.)
1 Baking Ovens 2 100000 200000
2 Dough Mixers 1 100000 100000
3 Cutter, Divider, Sheeter 2 300000 600000
4 Rusk Making Machine 1 100000 100000
5 Flour Sifter, Sugar Pulveriser, Biscuit 2 80000 160000
Grinder
6 Trays, Scoops, SS Bins, Pellets, 1 60000 60000
7 Packing Equipment 2 300000 600000
8 Miscellaneous Equips: Small RO - - 680000
Plant, small flour mill
TOTAL 2500000
2.Working Capital Requirement

(i) Raw Material

Ingredients Qty./yr Rate Amount

Maida/Atta 80 3000 240000

Ghee 30 2000 80000
Edible oil 40 1600 64000
Sugar 30 700 21000
Salt 30 500 15000

Packaging - 80000
Material -
Total 500000
- -
3.Manpower Requirement

Particular Number of Salary/ Wages Amount per Total Amount

Employees Per month month Per year
Technical Staff 3 7000 21000 252000
Admn. Staff 2 7000 14000 168000
Marketing Staff 3 5000 15000 180000
Labour 6 4000 24000 288000
Total 74000 888000

• The Term loan is calculated at an interest rate of 11.10% for 6 years

• It is presumed that in the first year, the capacity utilization (CU) will be
70% followed by 75%, 80%, 85% and 90% onwards in the subsequent
years.
• Raw material consumption is 75% for first year then 80% ,85%,90%and
after that 100% in subsequent years.
• The selling price of the products is kept fixed for calculation purpose.
• The rate of salaries and wages for skilled workers and others are on the
basis of the minimum rates in the State of Karnataka.
• Cost of the land on the basis on current rate
 • Value of raw material & utility charges as per the current market
conditions
• All other assumptions are calculated based on the basis of experience of
the promoter and deep study on the working of similar model

SALES
Khari @ 20%@Rs. 100/ Kg = Rs. 7,20,000/-
Rusk @ 20% @ Rs. 120/Kg = Rs. 9,60,000/-
Atta Biscuits @ 30% @ Rs. 150/Kg =
Rs.12,00,000

Cake@30%@Rs.300/kg=Rs. 36,00,000/-
Total sales = Rs. 64,80,000/-

Since capacity utilization (CU) is taken different for different years therefore,
projected sales will be:

Year 1 2 3 4 5 6
CU @ 70% 75% 80% 85% 90% 90%
Sales 4536000 4860000 5184000 5508000 5832000 5832000
 PROFIT AND LOSS ACCOUNT

Project Cost Rs 60.000 Lakhs

Promoter's Capital Rs 40.000 Lakhs

Loan from NCDC @11.10% Rs 20.000 Lakhs

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

CU 70% 75% 80% 85% 90% 90%

Sales 4536000 4860000 5184000 5508000 5832000 5832000

Expenses

raw material 375000 400000 425000 450000 500000 500000

salary 888000 888000 888000 888000 888000 888000

other expenses @ 10% of sales 453600 486000 518400 550800 583200 583200
(electricity, insurance and others)

depreciation @ 10% 250000 250000 250000 250000 250000 250000

Loan due 2000000 1666666 1333333 1000000 666667 333333

Interest on Term loan 222000 185000 148000 111000 74000 37000

Loan instalments 333333 333333 333333 333333 333333 333333

Total Expences 2521933 2542333 2562733 2583133 2628533 2591533

Gross Profit 2014067 2317667 2621267 2924867 3203467 3240467

Tax@10% 201407 231767 262127 292487 320347 324047

Net Profit 1812660 2085900 2359140 2632380 2883120 2916420

 BALANCE SHEET
Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
LIABILITIES
Share Holders Fund:
Share Capital 4000000 4000000 4000000 4000000 4000000 4000000
Profits 1812660 3898560 6257700 8890080 11773200 14689620
Loan Funds
Secured Loan 2000000 1666666 1333333 1000000 666667 333333
Current Liabilities
Provision for tax 201407 231767 262127 292487 320347 324047
TOTAL 8014067 9796993 11853160 14182567 16760214 19347000
ASSETS
Fixed Asset
Gross Profit 6000000 6000000 6000000 6000000 6000000 6000000
Less: Depreciation 250000 500000 750000 1000000 1250000 1500000
Net Profit 5750000 5500000 5250000 5000000 4750000 4500000
Current Assets:
Cash & bank balances 1132033 2148496 3301580 4591280 6005000 7423500
Sundry debtors 754689 1374000 1940000 2550000 3250000 3950000
Advance Tax 377345 774497 1361580 2041287 2755215 3473500
TOTAL 8014067 9796993 11853160 14182567 16760214 19347000

CASH FLOW STATEMENT

Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

Sources of finance
Capital 4000000 4000000 4000000 4000000 4000000 4000000
Profit after tax 1812660 2085900 2359140 2632380 2883120 2916420
Depreciation 250000 250000 250000 250000 250000 250000
Term loan taken 2000000 2000000 2000000 2000000 2000000 2000000
TOTAL 8062660 8335900 8609140 8882380 9133120 9166420
Disposition of funds
Interest 222000 185000 148000 111000 74000 37000

Tax 201407 231767 262127 292487 320347 324047

Purchase of fixed assets 6000000 6000000 6000000 6000000 6000000 6000000

TOTAL 6423407 6416767 6410127 6403487 6394347 6361047
 CALCULATION OF RATIOS

1. DEBT SERVICE COVERAGE RATIO

PAT+INTEREST+DEPRECIATION
INTEREST ON LOAN + REPAYMENT OF LOAN

Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

PROFIT AFTER TAX 1812660 2085900 2359140 2632380 2883120 2916420
250000 250000 250000 250000 250000 250000
DEPCRICIATION
222000 185000 148000 111000 74000 37000
INTEREST ON TERM LOAN
TOTAL 2284660 2520900 2757140 2993380 3207120 3203420
INTEREST ON TERM LOAN 222000 185000 148000 111000 74000 37000
333333 333333 333333 333333 333333 333333
REPAYMENT OF TERM LOAN
TOTAL 555333 518333 481333 444333 407333 370333
D.S.C.R. 4.11 4.86 5.72 6.73 7.87 8.65

2.INTEREST COVERAGE RATIO(ICR)

EBITDA
INTEREST

Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

EBITDA 350000 380000 410000 450000 490000 310000

Interest 222000 185000 148000 111000 74000 37000

ICR 1.57 2.05 2.77 4.05 6.62 8.37