Project Report

M/s. reshmi bakery

Stationkadavu kazhakuttom Trivandrum

Promoter
reshmi
Sivodhayam, stationkadavu
kazhakuttom
Trivandrum
Mob: 8714104441

PROJECT AT A GLANCE
 Name of Unit : M/s. Reshmi Bakery

Name of the Proprietor   Mrs. Reshmi

Address of the Proprietor with Sivodhayam, Stationkadavu, Kazhakuttom

:
Mob No P.O, 8714104441

     
Constitution of Unit : Proprietory

Product/Service : Bakery unit

Cost of the Project : Rs. 100000

Capital Expenditure : Rs. 100000
Working capital : Rs. 0
Term Loan : Rs. 90000
Working Capital Loan : Rs. 0
Gov: Subsidy   Rs. 50000
Promoter’s Contribution : Rs. 10000
Number of Employment : 2  
Profit before tax : Rs. 36039
Break Even Point : 75.68 %
Debt Service Coverage Ratio : 2.60  
Debt Equity Ratio 1st year : 262.87%  
Power Required : SINGLE PHASE - 1HP
Implementaton Period : 15 days  
Net Profit Ratio : 11.41 %
Return on Investment : 34.24 %

1. Introduction:
This is a proposal to set up a Bakery unit under self employment scheme of Trivandrum corporation.
This is a proprietary concern of Mrs. Reshmi, sivodhayam, Stationkadavu, Kazhakuttom P.O. There is
low no of such type of unit working in the locality and hence the scope of such unit is very high.
2. Promoter:
Mrs. Reshmi, sivodhayam, Stationkadavu, Kazhakuttom P.O, Trivandrum is the promoter of the unit.
She is hard working and belongs OBC category and average family. She has enough knowledge and
years of experience in the proposed line of activities.

3. Location:
She intends to set up her unit at Stationkadavu, Kazhakuttom P.O. The promoter intends to sell all
types of Bakery items. This is an ideal location for getting enough work for her proposed activities
blessed with all infrastructure facilities.

4. Market and Scope:

The market for Bakery items is increasing in all over the state has a good scope. The
marketing of the above items will not be a problem provided the users are made aware of the cost
benefit. The promoter sells items to homes in that locality.

5. Consumable Materials:
The main consumables required for the unit is all Bakery items is available in the market. The annual
requirement of raw materials is assessed and given in the annexure.

6. Employment:
The Unit can provide employments to 1 person directly. The annual expenditure on labour is assessed
and given in the annexure.

7. Cost of service and profitability:

The estimate of this project is on the basis of the following:

1) The unit will function for 300 days in a year.

2) The capacity utilization has been assumed at 70% in the first year and 75% on next year and
so on.

3) The price of the raw material and services are taken at the prevailing market rates.

4) Wages and salaries have been increased by 10% every year.

5) Repairs, insurance, telephone charge, etc., are taken at lump.

6) No contingency provision is made since the costs are taken at prevailing market price.

7) Depreciation has been calculated on Written down Value Method.

8) Income tax has been calculated at the rate applicable to proprietary concern.

8. Cash flow statement:

A cash flow statement for a period of 5 years on the basis of the above profitability is
furnished as annexure. The cash generation is found sufficient to serve the term obligations.

9. Projected balance sheet:

The projected balance sheet for a period of 5 years is given as an annexure.

ANNEXURE -1

Assets
Sl
Item No Rate Amount Rs
No
Counter, furniture and other food
1 1 100000 100000
product etc
         
         
  G.TOTAL 100000
  TOTAL (Rounded) 100,000

ANNEXURE - 2
REQUIREMENTS OF STOCK FOR ONE MONTH (70% Capacity Utilisation)
Sl
Item Qty Unit Rate Amount
No
  NIL       0
          0
          0
          0
           
Total 0

ANNEXURE- 3
MAN POWER REQUIREMENTS
Sl Monthly
Designation/Category No Amount
No. Salary
1 Skilled labours 2 7000 14000
         
         
  TOTAL 2 14000

OTHER EXPENSES PER MONTH

Sl
Item Amount
No
1 Power 250
2 Rent 2000
3 Office expenses 500
4 Postage & Telephone 500
5 Stationery 500
6 Travelling expenses 500
7 Miscellaneous/Marketing & Advt. 2000
  TOTAL 6250

ANNEXURE- 4
WORKING CAPITAL REQUIREMENT (One Cycle)
Sl Period in Total
Item
No days Amount
1 Stock 0 0
2 Work in Process 0 0
3 Stock of finished goods 0 0
4 Receivables 0 0
5 Working Expenses 0 0
  TOTAL 0
  Total 0

ANNEXURE - 5
REVENUE GENERATION PER MONTH (Capacity utilization 70%)
Sl
Item Qty Unit Rate Amount
No
1 Bakery product sale 1   25000 25000
          0
          0
          0
           
  TOTAL 25,000

PROJECT COST
1 Fixed Assets 100000
2 Working Capital 0
  Total 100,000
 ANNEXURE - 6
PROJECT COST DETAILS
Sl
Particulars Amount
No.
1 Building 0
2 Asset 100000
3 Prelim. & Pre-operative expenses 0
4 Working Capital 0
  TOTAL 100,000

MEANS OF FINANCE
Sl Capital Bank Promoter's
Particulars
No. Amount Credit Contribution
1 Asset 100000 90000 10000
2 Working Capital 0 0 0
  TOTAL 100,000 90,000 10,000

Promoter contribution : Rs. 10,000

ANNEXURE - 7
ANNUAL COST OF PRODUCTION & PROFITABILITY STATEMENT
  Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year
  No. of working days 300 300 300 300 300
  No.of shifts 1 1 1 1 1
  Installed Capacity (in Rs) 428571 428571 428571 428571 428571
  Capacity Utilisation 70 75 80 85 90
  Production 300000 321429 342857 364286 385714
A Sales 300000 321429 342857 364286 385714
   
B Cost of Production  
  Raw materials 0 0 0 0 0
  Wages 100800 108000 115200 122400 129600
  Salaries 67200 72000 76800 81600 86400
  Power Charges 3000 3214 3429 3643 3857
  Repairs & Maintenance 1500 1607 1714 1821 1929
  Insurance 1000 900 810 729 656
  Depreciation 10000 9000 8100 7290 6561
  Total 183500 194721 206053 217483 229003
 
C Gross Operating Profit 116500 126707 136804 146802 156711
Administrative &
D Selling expenses 72000 77143 82286 87429 92571
E Financial expenses  
  1. Interest on Term loan 8461 6940 5260 3402 1351
  2. Interest on WC loan 0 0 0 0 0
F Total of D & E 80461 84083 87546 90831 93922
G Net Operating Profit 36039 42624 49259 55972 62789
H Income Tax 0 0 0 0 0
I Sales tax 1802 2131 2463 2799 3139
J Net Profit 34237 40493 46796 53173 59650

K Withdrawals 20000 20000 20000 20000 20000

L Add Depreciation 10000 9000 8100 7290 6561
M Cash Surlpus 24237 29493 34896 40463 46211

ANNEXURE - 8
BREAK - EVEN ANALYSIS & DSCR
  Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year
FIXED COST  
  Salaries 67200 72000 76800 81600 86400
  Repairs & Maintenance 1500 1607 1714 1821 1929
  Insurance 1000 900 810 729 656
  Administrative expenses 24000 25714 27429 29143 30857
  Depreciation 10000 9000 8100 7290 6561
  Interest on Term Loan 8461 6940 5260 3402 1351
  Total 112161 116161 120113 123985 127754
 
VARIABLE COST  
  Raw materials 0 0 0 0 0
  Wages 100800 108000 115200 122400 129600
  Power Charges 3000 3214 3429 3643 3857
  Selling expenses 24000 25714 27429 29143 30857
  Interest on WC loan 0 0 0 0 0
  Total 127800 136929 146057 155186 164314
 
  BEP in % of Installed Capacity 75.68 62.96 61.03 59.29 57.70

DSCR

Netprofit 34237 40493 46796 53173 59650

Depreciation 10000 9000 8100 7290 6561
A Working Capital Interest 0 0 0 0 0
Termloan Interest 8461 6940 5260 3402 1351
Total 52698 56433 60156 63865 67562
             
Termloan repayement 23160 23160 23160 23160 23160
B
Working Capital Interest 0 0 0 0 0
    23160 23160 23160 23160 23160
  DSCR=A/B 2.28 2.44 2.6 2.76 2.92

Average DSCR 2.6

ANNEXURE -9
Term Loan Repayment
 Interest
Year Principle Balance Amount
@10%
Amount (in Rs.) of Principle
1st 14699 8461 75301
2nd 16220 6940 59179
3rd 17900 5260 41279
4th 19758 3402 21521
5th 21521 1351 0

Term loan
90000
interes
 
  principal t Balance
1
5790 3540 2250 86460
2
5790 3628 2162 82832
3
5790 3719 2071 79113
4
5790 3812 1978 75301
 
14699 8461  
5
5790 3907 1883 71394
6
5790 4005 1785 67487
7
5790 4103 1687 63384
8
5790 4205 1585 59179
 
16220 6940  
9
5790 4311 1479 54868
10
5790 4418 1372 50450
11
5790 4529 1261 45921
12
5790 4642 1148 41279
 
17900 5260  
13
5790 4758 1032 36521
14
5790 4877 913 31644
 15
5790 4999 791 26645
16
5790 5124 666 21521
 
19758 3402  
17
5790 5252 538 16269
18
5790 5383 407 10886
19
5790 5518 272 5368
20
5502 5368 134 0
 
21521 1351  

Equated Monthly Installment on Term Loan =Rs 1930

ANNEXURE -10

INTEREST ON WORKING CAPITAL LOAN (7%)

Principle Interest @ Balance Amount

Year Amount (in Rs.) 7% of Principle

1st 0 0 0

2nd 0 0 0

3rd 0 0 0

4th 0 0 0

5th 0 0 0
ANNEXURE-11
CASH FLOW STATEMENT
A Source of Funds 1st year 2nd year 3rd year 4th year 5th year
  Cash accruals:-  
1 Share Capital 10000 0 0 0 0
2 Govt. Subsidy          
3 Profit before taxation 36039 42624 49259 55972 62789
4 Depreciation 10000 9000 8100 7290 6561
5 Investment allowance 0 0 0 0 0
6 Increase in long term loan 90000 0 0 0 0
8 Increase in unsecured loans 0 0 0 0 0
9 Increase in WC loan 0 0 0 0 0
10 Sale of fixed assets investmnts 0 0 0 0 0
11 Others 0 0 0 0 0
  Total 146039 51624 57359 63262 69350
   
B Disposition of Funds  
1 Preli& Pre-op. expenses 0 0 0 0 0
2 Increase in Capital expenditure 100000 0 0 0 0
3 Increase in current assets 0 0 0 0 0
4 Decrease in long term loans 14699 16220 16220 16220 16220
5 Decrease in unsecured loans 0 0 0 0 0
7 Decrease in WC loan 0 0 0 0 0
8 Interest on Term loan to Bank 8461 6940 5260 3402 1351
9 Interest on WC loan 0 0 0 0 0
11 Taxation 1802 2131 2463 2799 3139
12 Divident on equity 0 0 0 0 0
13 Other expenses 2500 2507 2524 2550 2585
  Total 127462 27798 26467 24971 23295
C Opening balance 0 18577 42403 73294 111585
D Net surplus 18577 23826 30891 38291 46055
E Closing balance 18577 42403 73294 111585 157640
ANNEXURE -12
PROJECTED BALANCE SHEET

A Liabilities 1st year 2nd year 3rd year 4th year 5th year

1 Share capital 10000 10000 10000 10000 10000

2 Reserve & Surplus 24237 42403 73294 111585 157640

3 Long term loans 90000 75301 59179 41279 21521

4 Working Capital Loan 0 0 0 0 0

5 Other liabilities 0 0 0 0 0

124237 127704 142473 162864 189161

  Total Liabilities

             

B Assets          

1 Opening Stock 0 0 0 0 0

2 Gross Block 100000 90000 81000 72900 65610

3 Less Depreciation 10000 9000 8100 7290 6561

4 Net Block 90000 81000 72900 65610 59049

5 Investment 0 0      

6 Current assets 0 0 0 0 0

7 Cash and Bank Balance 34237 46704 69573 97254 130112

124237 127704 142473 162864 189161

  Total Assets

OTHER RATIOS
Net Profit Ratio
Net Profit 34237
Sales 300000
Net Profit Ratio 11.41 %

Return on Investment
Net Profit 34237
Capital Employed 100000
Return on Investment 34.24 %

Debt Equity Ratio

Debts
Term loan 90000
Total 90000
 Equity
Share Capital 10000
Surplus 24237
Total 34237

DER 262.9 %

CONCLUSION:

On examining the technical aspects like availability of consumables and availability

of skills and opportunity of market, it can easily be assumed that the project is technically
feasible. The income generated is enough for the repayment of loan and for the better
prospects of the unit.

Promoter