pfr on bakery

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A

FEASIBILITY REPORT

ON

BEYOND BREAD BAKERY

of

BACHOLORS OF BUSINESS ADMINSTRATION

by

TWINKLE MALHOTRA

(BBA/4510/10)

AKSHITA CHAUHAN

(BBA/4528/10)

PRIYA SAXENA

(BBA/4530/10)

DEPARTMENT OF MANAGEMENT

BIRLA INSTITUTE OF TECHNOLOGY

MESRA-835215, RANCHI

2012


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DECLARATION CERTIFICATE

This is to certify that the work presented in the feasibility report onBeyond

Bread Bakeryentitled in partial fulfillment of the requirement for the award of

Degree of Bachelors of Business Administration of Birla Institute of

Technology Mesra, Ranchi is an authentic work carried out under my

supervision and guidance.

To the best of my knowledge, the content of this thesis does not form a basis

for the award of any previous Degree to anyone else.

PROFESSOR: Meenakshi Sharma

Department of Management

Birla Institute of Technology

Mesra, Ranchi


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MEMBERS OF GROUP

S.No ROLL NO. NAME

1. 4510 TWINKLE MALHOTRA

2. 4528 AKSHITA CHAUHAN

3. 4530 PRIYASAXENA


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TABLE OF CONTENTS

S.No PARTICUALAR PAGE

NUMBER

1. Acknowledgment 52 Preface 63 Executive Summary 74 Introduction to Beyond

Bread Bakery8

5 Environmental Scanning 10

6 Technical Feasibilty 127 Marketing Feasibilty 328. Financial Feasibilty 449 Conclusion 58

10 Bibliography/Webography 59


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ACKNOWLEDGEMENT

Our sincere thanks to our teacher Mrs. Meenakshi Sharma, BIT Mesra, Noidaextension Centre for extending all the support and for her ideas and

knowledge which acted as preliminary information for all the project work.

She was always ready with answers to all my doubts. Finally, I would

thank my friends for their valuable suggestions and inputs that proved to

be of invaluable assistance, and constantly motivated me to learn as much as

possible.


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PREFACE

Feasibility reports address things like where and how the business will operate.

They provide in-depth details about the business to determine if and how it can

succeed, and serve as a valuable tool for developing a winning business plans.

This project studies and analyses various parameters that decide the establishment

of a Beyond Bread Bakery and whether the venture shall be feasible or not.

The project has been divided into four major branches of feasibility study, namely,

technical, human resource, marketing and financial.

Our team has made an all out effort to present a comprehensive feasibility report

and depict the feasibility of the project.

We hope that this project will receive a warm welcome from Birla Institute Of

Technology.

Valuable suggestions from the teachers and students are welcome for the

improvement of the project.


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EXECUTIVE SUMMARY

This project is a feasibility report for establishing a Beyond Bread Bakery. Thename of our partnership firm has been decided as Beyond Bread Bakery. We will

enter into the business with breads, buns, toasts, khari and cream rolls as our chief

products. Legal, technical, marketing & financial feasibility have been covered in

this project.

For the legal feasibility, we have shown laws that govern Beyond Bread Bakery

production and products.

Technical feasibility includes raw materials, machineries required for production

and the production process for different products. These have been decided after

visiting bakeries in Noida and conducting a small survey for dealers.

Marketing feasibility covers the marketing mix for our firm, marketing strategy

adopted and the market research conducted for consumers and dealers of Beyond

Bread Bakery products. The analyses of these surveys show the customer trends


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for Beyond Bread Bakery products and the pattern of demand and supply in the

Beyond Bread Bakery industry.

The workforce required by the firm is specified in human resource feasibility.

Estimated costs, sales, profits make the financial feasibility. Ratio analysis and

break even sales are also covered in this part.


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INTRODUCTION TO

BEYOND BREAD BAKERY


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PROJECT AT A GLANCE

BEYOND BREAD BAKERY

Name: Beyond Bread Bakery

Product: Breads, buns, Cream rolls, Tea cakes

Status: Small Scale

Address: shop no.-2, C block market, sec- 41, Noida 201301

Constitution: Partnership Firm

Date of incorporation: 12th NOV 2012

Cost of project: Rs. 62, 18,180


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Source of finance: Partners capital - Rs.30, 47,525

Bank Loan - Rs.31, 09,090

ENVIRONMENTAL

SCANNING

SWOT ANALYSIS

A scan of the internal and external environment is an important part of the strategicplanning process. Environmental factors internal to the firm usually can beclassified as strengths (S) or weaknesses (W), and those external to the firm canbe classified as opportunities (O) or threats (T). Such an analysis of the strategicenvironment is referred to as a SWOT analysis.

The SWOT analysis provides information that is helpful in matching the firm's

resources and capabilities to the competitive environment in which it operates. Assuch, it is instrumental in strategy formulation and selection.


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The SWOT Analysis of our firm is

The prices of our products are very reasonable and less than ourcompetitors.

New and different varieties of breads have been introduced which shall giveus the benefit of product differentiation.

Our sales are through tie-ups with grocery stores and supermarkets across

Noida. This gives us a wide consumer base and a chance to serve different

levels of customers.

The firm also gives a little more commission to its distributors to encouragedealership.

The labour required does not need any specific qualification & skill and

hence can be made easily available.

Beyond Bread Bakery products are perishable items hence need to be soldas soon as possible to gain maximum benefit. The customers also prefer

fresh products. But the far location of the factory can increase the timebetween baking and actual selling.

Our Beyond Bread Bakery has introduced few Beyond Bread Bakery itemsfrom the possible product lines. We are not making cakes, pastries,chocolates and other various products. This limited menu can be seen as aweakness.

We are not introducing our own outlets but are selling through tie-ups acrossthe city. This delays our brand establishment time.

Expansion of the product line in the future with the introduction of biscuitsand cakes and pastries.

Scope for expansion with the establishment of our own outlets and BeyondBread Bakery cafs

Growing concern for health and multigrain food products shall become areason for increase of our sales of food items such as brown breads, tomato-spinach bread and white-coriander bread.


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Severe competition in the industry with well-established players like Modernbreads, Bakers Street,Bon-Bon,Top Breads,Bread Bakery etc.

TECHNICAL FEASIBILITY


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OUR PRODUCTS

WHITE BREAD

BROWN BREAD

WHITE CORIANDER BREAD


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TOMATO SPINACH BREAD

PAV

DABELI


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TUTTI FRUITY


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CHOCOLATE


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StarterOften referred to as sourdough, this is a pre-made mixture of flour water and

naturally occurring yeast. A portion of the starter from the previous day is included

in the next days starter.

The starter is a continuous and dynamic mixture. It is

allowed to develop until it has reached its

maturity for many hours and then it is included in themixing process.

Starter imparts a sour flavor and develops a distinctivecrust.

MixingIn the mixing step the ingredients of the recipe are incorporated into a

homogeneous mixture and then developed. This is a two stage process.

First everything (flour, water, salt and leavening) is mixed together and water is

added gradually on a low speed. After the appropriate amount of water is added thesecond stage of gluten formation and development begins.

PACKAGING

SLICING

COOLING

BAKING

PROOFING

SHAPING

PRE-SHAPING

MIXING


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In gluten development, or strength, the gluten is formedby the combining of the water and protein in the flour.The gluten is developed by the stretching and folding ofthe strands (or kneading). Gluten developmentbecomes the foundation and structure for the bread.Here begins the first fermentation stage. (fermentationis the conversion of carbohydrates (sugars) to alcohol

and CO2) At this point the dough will spring back when touched.

Pre shape

In this step the dough is given a shape and divided into proportional sizes

In our process we shape all loaves first into rounds.

Here some of the developing gas is worked out by hand.Once rounded the dough is allowed to rest. Generally wecover the dough to keep from drying and crusting over. In ourcase the resting is usually 10-20 minutes.

ShapingOnce the dough is relaxed the final shape is given.

Here the excess gases are expelled very gently by pressing and squeezing the


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dough by hand. The expulsion of the gases makes for a more uniform loaf of breadand less air pockets. By expelling the gases the fermentation process is also

rejuvenated and slightly accelerated. Once shaped, the dough is placed on flourlined pans or boards.

ProofingAt this point fermentation is allowed to take its course in a warm and humidatmosphere while the dough is covered.

This type of proofing, combined with other details of the bread making process,gives our bread its uniqueness, depth of flavor and crispy crust. Here the doughferments (or rises) to a desired volume and consistency. Ideally the dough should

be soft and slightly pliable. If pushed with a finger it should leave an impression.

BakingDuring the initial baking there is a tremendous burst of gas that occurs called ovenspring.

To allow for controlled tearing the bakers score(make cuts to) the loaves. The cuts create aweak area for the expansion to occur. This iswhere the final result can be experienced. Thesight of warm fresh baked bread being pulled


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from the oven, the smell of freshly baked bread and the sound of the cracklingcrust is where the results of all the hard work are realized.

CoolingThe bread formed is then allowed to cool for some time.

PackingThe ready bread is then packed and wrapped. The seal and logo of the firm isimprinted on the packing. Thus the final product is ready to be sold.

The process for making toast starts with bread as the raw material.

Cut the slices of bread in the desired shape of toasts.

Butter it up liberally

Add salt and pepper to taste

Pour hot milk over the toast

Let all that soak in.

The toasts are ready. After proper packing, they are ready

to be sold

Rub solidified ghee into flour till crumbly.

Make a well in center. Add salt in it. Add 1 cup of cold water and mix well till dough is formed. Use more water ifrequired, to make a soft dough.

Knead for 3-4 minutes till smooth. Keep aside covered for 10 minutes. Roll into a rectangle, of the desired size, with help of dry flour for dusting. Dust

away excess flour. Spread fat over the rectangle keeping a 0.5 margin all around. Roll rectangle into a tight roll, pressing sides to keep ghee inside intact. Dust liberally with dough, place in freezer for 15 minutes. Remove, roll back to a

rectangle. Brush with very little ghee. Fold one-third of the outer portion onto the central portion.


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Brush with flour, return to chiller for 15 minutes. Roll again, cut into desired shapes (rectangle, triangle, etc.).

Place on a greased baking sheet, brush with ghee. Place in a preheated oven at 200 degree Celsius for 15 minutes. Reduce thereafter to minimum (50C or lower) for 10 minutes to allow drying out. Remove place on racks till fully cooled, before storing in airtight container.

PLANT LAYOUT

The plant layout of the factory building and the planned interior setup is

depicted below:


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LOCATION ANALYSIS

The selection of location plays a vital role for the growth. We have decided to

establish our production unit as well as the administrative office in our factory

building in Noida.

Factory & Administrative office address:

Beyond Bread Bakery,

Shop no.-2,C Block Market,Sector-41,

Noida, U.P.

Area: 3600 sq. feet

Cost of land: 16, 42,000 including documentation charges and agents

commission.

Reason for selecting the site:

Fast growing area

Easy availability of land and building at reasonable rates.

Easily accessible location

Easy availability of raw materials and amenities like electricity and

water as the whole area is an industrial site.

Easy availability of the labour in industrial area.

PROCUREMENT OF RAW MATERIALS

The estimated daily requirement of ingredients is:

S.NO INGREDIENTDAILY REQUIREMENT

(in Kgs.)

PRICE PERKg./Ltr.

1. Maida 400 17

2. Wheat Flour 50 17

3. Yeast 12 180

4. Milk 57 22

5. Vegetable Oil 12 60

6. Sugar 23 30

7. Butter 15 1008. Brown Sugar 4 409. Baking Powder 2.5 90


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10. Curd 8 5011. Salt 10 5

12. Spinach leaves 5 1713. Tomato 5 30

14. Cumin powder 0.2 100

15. Red chili powder 0.2 250

16. Cinnamon 0.2 10017. Coriander 0.7 100

18. Ginger 0.350 75

Apart from the above mentioned ingredients, we shall also need the following

ingredients on weekly basis.

S.No. INGREDIENT WEEKLYREQUIREMENT

PRICE PERKg/gms.

1. Tutti-Fruity 1.5 kg 80

2. Choc powder 300 gms 200

3. Cocoa powder 300 gms 200

The ingredients will be purchased from local suppliers at Kundlimarkets.

SPECIFICATION OF MACHINERY


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NAME Deck oven(in-built proofer)

QUANTITY PURCHASED 1

SUPPLIER Canon engineering industries

PRICE Rs. 2,64,000

WEIGHT 490 kg

CAPACITY 9 trays

FUEL Gas-fired

NAME Dough Mixer


SUPPLIER Canon Engineering Industries

PRICE PER UNIT Rs. 46,500

WEIGHT 285 kg

CAPACITY 25 kg

FUEL Electric fired


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NAME Dough moulder



PRICE PER UNIT Rs. 42,350

WEIGHT 290 kgs

CAPACITY 80 kg/hour

FUEL Electric fired


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NAME Sugar Grinder


SUPPLIER Kaps Engineers

PRICE Rs. 35,000

WEIGHT 250 kg

CAPACITY 135 kg/hour

NAME Packing Machine


SUPPLIER Apple Beyond Bread BakeryMachinery Pvt. Ltd.

PRICE Rs. 47,650

WEIGHT 265 kgs


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NAME Bread Slicer



PRICE Rs. 38,000

WEIGHT 270 kgs

CAPACITY 300 loaves per hour

Capable of slicing bread upto 25 cm long

NAME Freezer


SUPPLIER KPM Industries


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PRICE Rs. 16,400

WEIGHT 300 kgs

NAME Mixer Grinder


SUPPLIER Local Shop

PRICE Rs. 3,600


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NAME Rolling Racks



PRICE Rs. 7500

CAPACITY 7 storey


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NAME Trays



PRICE PER UNIT Rs. 200


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NAME Stainless steel utensils

SUPPLIER Local Shops

PRICE Rs.83,400


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MARKETING FEASIBILITY


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MARKETING MIX

PRODUCT

The product is the heart of the marketing exchange. Customers buy product to

solve problems or enhance their lives and thus the marketer has to ensure that the

product can fully satisfy the customers, not just in functional terms but also in

psychological terms.

A product is physical good, service, idea, person or place that is capable of

offering tangible and intangible attributes that individuals or organization regard as

to necessary, worthwhile or satisfied that they are prepared to exchange money,

patronage or some other unit of value in order to acquire it.

In this report, our products are breads and buns, cream rolls, toasts and khari and

tea cakes.

PRODUCT LEVEL


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PRODUCT LEVEL CHART FOR BEYOND BREAD

BAKERY

Core benefit includes the benefit that the

product provides to the customers to

satisfy their needs.To satisfy hunger

In the basic product the marketer has to

turn the core benefit into a basic product.

This is the actual tangible item thatpeople purchase.

Beyond Bread Bakery

products like Breads

Toasts/ Khari

Tea cakes

Cream rolls

POTENTIAL

LEVEL

AUGMENTED

LEVEL

EXPECTED

LEVEL

BASIC

PRODUCT

CORE

BENEFIT


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At this level, the marketer prepares anexpected product, a set of attributes and

conditions buyers normally expect when

they purchase this product.

Good taste

Good quality

Varieties

Purity and no

adulteration

Attractive packaging

This is the non tangible elements that

are perhaps provided in addition to thephysical parts. The marketer prepares an

augmented product that exceeds

customer expectations. Brand

positioning & competition takes place at

this level.

Diet products

Sugar free or low

calorie products

Free home delivery

At this level, the potential product

encompasses all the possible

augmentation and transformations.

The product or offering might undergo

future.

Mix flavour bread

having different flavours

in the same slice

Breads and butter-

jam-cheese-chopped

vegetables-ketchup in

the same packet

PRICE

The price is the only component in the mix that generates revenue, while other

components generate costs.

Price means consideration of any goods or services that a customer paid to the

producer.

To a manufacturer, price represents the quality of money received by the firm on

sales of its products. To a customer, it represents monetary scarifies and hence his

perception of the value of the products.


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Depending on the objective, the Beyond Bread Bakery can set the prices. As far as

Beyond Bread Bakery is concerned, it has the objective of the selling its products to

the consumer at reasonable price and offer good quality.

In order to arrive at an acceptable price level, the manufacturer needs to have the

information on the 3 Cs namely Customer, Competition and Cost structure of the

firm.

Every individual consumes Beyond Bread Bakery products. Hence, our firm has

decided prices that suit everyone.

The prices of some of our products have been kept lower than our competitors so

as to penetrate the whole market and grasp the maximum benefits from the market.

PRICE

COMPETITION

COST

STRUCTURE

OF THE

FIRM

CUSTOMER


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An optimum cost structure has been adopted that enables the firm to earn a

reasonable profit and minimizes wastage of resources and losses. We have priced

our product somewhere near the prices of the competitors considering the following

objectives:

Survival:

As we shall face intense competition survival in the market is our short-term

objective. In the long run, we shall work for new innovative varieties offering our

customers wider choices.

Maximization of market share:

Our long-term objective is to become a role player in this market. We shall try toachieve this by charging less than our competitors price.


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ITEM VARIETY PRICE

WHITE BREAD

Small

Medium

Large

09

15

25

BROWN BREAD

Small

Medium

10

20

TOMATO SPINACH

Small

Medium

12

20

WHITE CORIANDER

Small

Medium

12

20

Pizza bread 8 09

Dabeli bun 08

Pav

Small

Medium

10

20

Milk

Jeera

15

17

Butter

Jeera

18

20

Vanilla

Strawberry

08

08


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PLACE

The location of the plant is a very important aspect in economic analysis of any

project as it plays a vital role in continuing life of the business as in future. The firm

has to leverage the advertisement while operating with location of plant as the

biggest constraint.Location of plant and industry means a specific site in the region where the

business units is to be started for selecting location or the pertinent factors

influencing the location have to be considered and weighted out very carefully.

Place: Noida

Address:Shop no.-2,C block market,sector-41,

Noida.

Why have wechosen Noida?

Native place

An emerging mega city

Easy availability of building

To create the brand image

Easily accessible location.

Area: 3600 sq. feet.

DISTRIBUTION CHANNEL

It means the channel through which goods passed from source to destination that

is from manufacture to retailer.

Company should pay attention to how the product is distributed. They should have

proper distribution channel so that consumers may get rid of the problems

regarding unavailability of the product.

Our firm uses the following distribution channel :


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In order to have the seamless distribution of the finished goods to the Dealers i.e.

Supermarkets and Grocery stores, we have also purchased two tempos and we

solely have our own private medium of transportation.

The ready Beyond Bread Bakery goods are distributed to grocery stores and

supermarkets having our dealership. These stores then make the final sale to the

consumers.

PROMOTION

Promotion is the part of the marketing mix that many people consider to be

"marketing" but this is really the end result of all your hard work in defining products

to satisfy needs and pricing it accordingly.

Promotion decisions are those related to communicating and selling to potential

consumers.

The success of any business entity depends on how well it has been able to createawareness about its products or services in its target segment so as to induce itsconsumption by customers.

Promotion is the marketing communication.

There are traditionally 5 promotional tools:

1. Advertisement

2. Sales Promotion

3. Public relation

4. Direct marketing

5. Personal Selling

FACTORY

DEALERS

i.e.

SUPERMARKETS

AND GROCERY

STORES

CUSTOMERS


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Our firm is using advertisement tools to create awareness among the public, about

our products and the Beyond Bread Bakery.

Advertising is used to build up a long-term image for a product and can reachgeographically dispersed buyers.

Advertisement is an informal way of communication which induces customers tobuy the product and services and which also creates awareness amongconsumers.

Types of advertisement:

(a) Informative advertisement: - Informative advertisement is that from which

the consumer gets the necessary information about our products and

other relevant details.

(b) Influential advertisement: -Influential advertisement shall influence the

customers to buy our products.

ADVERTI

SING

MONEY

MISSIO

N

MESSA

GEMEDIA

MEASUR

EMENT


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1. MISSION:

It is all about setting the advertisement goal in the initial stage.

We have printed information brochures that includes list of our products andvarieties, commission rates, terms of sale etc. These shall be distributed to thegrocery stores and supermarkets to make them aware of our firm and products andgenerate their interest in dealership.

Apart from these we shall also advertise by putting up floor signboards at bannersat our distributor stores to catch the eye of the public and create awareness and

interest about our products.

2. MONEY:

Deciding on the advertising budget

We have considered the following factors while deciding our advertising budget:

a) Stage in life cycle: In the initial stage, our advertising budget is high becausewe want to introduce our product to the customers and dealers. Afterwards, it

will be low compared to the first year.b) Market share and consumer base: When the firm covers enough marketshares, it will require less marketing budget because it will have a set of loyalbuyers and recognition in the market.

c) Competition: in the initial stage, we shall face good competition from the wellestablished players in the market, such as Modern breads, Bakers Street,Bon-Bon. Therefore, we shall have to advertise more in order to get somepublic attention.

d) Advertising frequency: When advertising frequency is high, advertisingbudget will be high and when it is low, required money will be less.

3. MESSAGE:

Our message is to give the customer such a delicious taste that they dont forgethence truly We bake memories

4. MEDIA:

It includes the decision regarding media vehicles, deciding on media timings anddeciding on geographical allocation. Major media types are print media which

includes pamphlet, newspapers, hoardings, magazines and television media


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Our firm prints pamphlets 4 times in a year to be distributed along with thevernacular newspaper in the areas in which we have tie-ups with the stores.

5. MEASUREMENT

Our company tries to measure the communication effect of an advertisement thatis, its potential effect on awareness, knowledge or preference.

ANALYSIS OF PAST AND PRESENT DEMAND.

In the market, it has been observed that there is enough demand of all Beyond Bread Bakeryitemsas per the sales of already running counters.

According to marketing details there is continuous increase or growth in the number of customers

from last few years so there is big scope for the firms to provide qualitative products to the

increasing demand & establish it as successful firm.


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FINANCIAL

FEASIBILITY


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SR. NO PARTICULAR AMOUNT (in Rs.)

1. Land 1642800

2. Building 2340000

3. Machinery 879300

4. Furniture & Fixtures 122100

5. Equipments 362900

6. Vehicles 494000

7. Preliminary expenses 56800

8. Pre-operative Expenses 120500

9. Working Capital 138215

10. Reserves for contingency 61565

TOTAL COST 6218180

NO. PARTICULAR AMOUNT

1. Partners capital (50%) 3047525

2. Secured loans (50%) 31090903. Reserve and surplus 61565

TOTAL 6218180

Note: 1 Cost of Land

No. Particular Amount

1. Basic Cost of Land 1480000

2. 1% Commission of Agent 14800

3. Stamp duty @ 10% 148000

TOTAL 1642800


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Note: 2 Cost of Construction

No Particular Area(in sq. feet) Amount1. Production area 1813 1313950

2. Storage area 300 230500

3. Administrative office 375 321750

4. Water room & wash room 244 174600

5. Finished goods storage 300 237500

6. Loading Dock 168 109700

7. Parking space 150 52500

8. Security cabin 56 27400

9. Open land 194 102600TOTAL 3600 2340000

Note: 3 Machinery

No. Particular Quantity Price Amount

1 Deck oven 1 264000 264000

3 Dough mixer 3 46500 1395004 Dough molder 2 42350 84700

5 Sugar grinder 1 35000 350006 Packing machine 2 47650 953007 Toast slicer/bread slicer 2 38000 76000

8 Freezer 2 16400 32800

9 Mixer 1 3600 3600

10 Rolling racks 6 7500 45000

11 Trays 100 200 20000

12 Stainless steelutensils/tools/equipment knives

- - 83400

TOTAL 879300

Note: 4 Cost of Furniture

No. Particular Quantity Price Amount1 Sofa Set 2 10400 20800

2 Revolved Chairs 4 1500 6000

3 Comfort Chairs 8 950 7600

4 Office desk 3 3000 90005 Office Cupboard 1 8000 8000

6 Cabinet 1 11300 11300

7 Working table 1 9000 9000


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8 Dustbin 4 100 4009 Air Conditioner 1 25000 25000

10 Lights 50 40 200011 Fans 10 1200 12000

12 Exhaust Fans 4 1500 600013 Others 5000

TOTAL 122100

Note: 5 Cost Of equipments


1 Computer 3 23900 717002 Telephone instruments 2 600 1200

3 Fire extinguisher equipment 3 5000 15000

4 Generator 1 25000 275000TOTAL 362900

Note: 6 Cost Of Vehicle


1 Tempo 2 247000 494000

TOTAL 494000

Note: 7 Preliminary Exp.

No. Particular Amt.

1 Licence Fees 350002 Registration Fees (1%) 14800

3. Partnership deed 7000

TOTAL 56800


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Note: 8 Pre-operatives Exp.

No. Particular Amount1 Market Survey Exp. 2500

2 Connection Charges1) A.E.C. (Three phase)

2) Electricity connection charges3) Plumbing

4) Telephone charges5) Gas pipe line charges

480001850090002500

40000

TOTAL 120500

Particular 1st Year

Opening Stock of R.M. 0

Add:- Purchases 4540510Less:- Cl. Stock of R.M. 30270Cost Of R.M. Consumed 4510240

Add:-Direct Labour 264000

Bonus 22000Prime Cost 4796240

Add:-Factory O.H. 1146895

Total Factory Cost 5722135

Add:- Office O.H. 345230Cost of Production 6067365

Add:- Opening stock of FG -Less:- Closing Stock of FG 25870

Cost of Sales 6041495Add:- Selling & Distribution

Exp 811390Cost of goods sold 6852885

Add:- Profit 908115TOTAL SALES 7761000


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Particulars 1st YearINCOME:-Cash Sales 7114250

Credit Sales 646750

Total Sales Income 7761000

Closing Stock of FG 25870

Less:- Opening Stock of FG ------Total Income 7786870

Raw Material Consumed 4510240

Direct Labour& Bonus 286000

Factory Cost 781000

Administrative Cost 290000

Selling & Distribution Cost 613790

Preliminary Expenses WrittenOff 35460

Interest on Partners' Capital 182852

Total Expenditure 6699342

Gross Profit(PBDIT) 1087528

Less:- Depreciation 618725

PBIT 468803

Interest- Long Term Loan @ 11% 342000PBT 126803

Tax Paid @ 30% 38041PAT 88762


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Particulars Year 1

SOURCE OF FUNDS

Owners Funds 3136287

Reserve &

Surplus

61565

Bank Loan 2487272TOTALSOURCE OFFUND

5685124

APPLICATION OF FUNDS

Fixed AssetsLand 1642800Building 2340000Less:Depreciation

234000

2106000Machinery 879300Less:Depreciation

131895

747405Furniture 122100Less:

Depreciation

12210

109890Vehicle 494000Less:Depreciation

197600

296400Computer 71700Less:Depreciation

43020

28680

Otherequipment

291200


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TOTAL FIXEDASSETS

5222375

CURRENT ASSETS, LOANS AND ADVANCEInventoryRaw Material 30270

FinishedGoods

25870

Sundry Debtors 546750

Cash & BankBalance 307583

TOTALCURRENTASSETS

910473

LESS : CURRENT LIABILITIES AND PROVISION

Creditors 567564

DeferredWages

22000

TOTALCURRENTLIABILITY

589564

NETCURRENTASSETS

320909

MiscellaneousExpenditure(To the extent

not written off)

141840

TOTALAPPLICATIONOF FUNDS

5685124


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Particular 1st year

CASH FLOW FROM OPERATING ACTIVITIES

PAT 88762

Interest 524852

Tax Provision 38041

Depreciation 618725

Preliminary Expenses 35460CHANGES IN WORKINGCAPITAL (13326)Tax Paid (38041)

Net Cash Flow FromOperating Activities 1254473

CASH FLOW FROM INVESTMENT ACTIVITIES

Purchase of Assets (5841100)

Preliminary Activities (177300)Net Cash Flow FromInvesting Activities (6018400)

CASH FLOW FROM FINANCIAL ACTIVITIESCapital 3109090Term Loan Taken 3109090

Repayment of Term Loan (621818)

Interest on Loan (342000)Interest on Capital (182852)

Net Cash Flow FromFinancial Activities 5071510

Total 307583

Add:- Opening Balance 0

Closing Balance 307583

No. Particular Amount

1. Current Assets

A. Raw material requirement 30270

B. W.I.P requirement ------

C. Finished Goods requirement 25870


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Debtors Requirement 546750

D. Cash Balance 124889

Total Current Assets 727779

2. Current Liabilities

A. Creditors 567564

B. Deferred Wages 22000

Total Current Liabilities 589564

TOTAL WORKING CAPITAL 138215

PARTICULARS 1st year

PROFITABILITY RATIO

Net profit ratio (%)

(Net profit/sales)100 1.14

Operating ratio (%)

(PBIT/sales)*100 6.04

Cash profit ratio (%)

[(PAT+depreciation)/sales]*100 9.12

EFFICIENCY RATIOFixed assets turnover ratio

Sales/fixed assets 1.49

Total asset turnover ratio

(Sales)/(total assets-misc.exp.) 1.27

SOLVANCY RATIO

Proprietor's ratio (%)

Proprietor's fund/total asset-misc.exp*100 52.14

COVERAGE RATIO

Interest coverage ratio


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PBIT/interest on debt 1.37

LIQUIDITY RATIO

Current ratio

Current asset/current liabilities 1.54

YEAR PAT

DEPRECIATION

PRE.EXP.

CFAT

DISCOUNTING

P V OFCASHFLOW

DISCOUNTING

P V OFCASHFLOW

CUMCFAT

FACTOR 11%

FACTOR 1%

1stYear

88762 618725

35460

742947 0.901 669395 0.990 735518

742947

Particular Amount

Total Discounted Cash Inflow 3904609

Less

Total Cash Outflow 6218180NPV (2313571)

PROFITABILITY INDEX

Particular Amount

Total Cash Inflow 3904609

Divide

Total Cash Outflow 6218180P.I 0.6279

INTERNAL RATE OF RETURN


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In case of IRR we require two NPV i.e. one negative and one positive at two

different discounting factor. Hence in our project we have taken in to consideration

two discounting factor i.e. 1 and 11% discount level and at both the levels NPV is

negative so it is not feasible within the scope of five years.

Particular 1st Year

Total Income 7786870

Less : Variable Cost

Direct Material 45,10,240Direct Labour 286000

Electricity Charges 311000

Repairs Maintenance 166330

Power and Fuel 180000Commission on sales 175800

Total Variable Cost 56,29,370Contribution 2157500

Less : Fixed Cost

Salary & Wages 767000Depreciation 618725

Insurance 35160

Telephone & Internet 26000

Stationery & Postage 5000Advertisement 18500

interest on Partner's Capital 182852Interest on Loan 342000

Preliminary Exp. 35460Total Fixed Cost 2030697

Profit126803

PV Ratio=Contribution/Sales

27.71%

BES=Fixed cost/PV ratio(In Rupees)

7328390


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ASSUMPTIONS

The number of working days is 25 in a month leading to a total of 300

days in a year.

The registration charges and stamp duty for land is assumed at 1% and

10% respectively.

Reserves for contingency is taken at 1% of the cost of project.

The rates for insurance premium are:

ITEM RATE

Machinery 1.5%

Building 0.2%

Vehicle 3.5%

Repairs and maintenance is assumed at following rates throughout the

project:

ITEM RATE

Machinery 1%

Building 0.1%

Bank loan is taken at 11% rate of interest.

Interest on partners capital is 6%.

The number of utility workers varies throughout the project.

YEAR NUMBER OF WORKERS

First year 5

Second year 5

Third year 10

Fourth year 10

Fifth year 13


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An accountant is recruited from the second year.

Depreciation is calculated as per Reducing balance method i.e. W.D.V

Depreciation rate are taken as per Income Tax Act, 1961, for partnership

firms.

ITEM RATE

Machinery 15%

Building 10%

Computer 60%

Vehicle 40%

Furniture 10%

Preliminary expenses are written off over a period of 5 years

Telephone expenses, electricity charges and power expenses vary

throughout the project. Their increase or decrease is not fixed at a certain

rate.

Closing stock of raw material is kept at 2 days on the total purchase.

Closing stock of finished goods is kept at 1 day on total sales.


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CONCLUSION

We would finally like to conclude the project with a great feeling of having gained

enormous knowledge about Beyond Bread Bakery industry. First of all we are

thankful to our faculty members who gave us such a wonderful opportunity to learn

about the practical aspects of knowledge.

By conducting an extensive research on all the aspects of establishing a

Beyond Bread Bakery, we conclude that the project is not feasible as per capital

budgeting techniques.

While making the project we learnt how to communicate or deal with people and

how to maintain contacts with them. We saw all the marketing factors and were

able to understand more about it because of seeing them practically. It has been

said that practical knowledge is more important than theoretical knowledge.

Lastly we are obliged to our co-ordinates who helped us from the beginning to the

end for giving us an excellent experience of present scenario of market. Whatever

we learnt from market research will definitely help in enhancing our academic

career and come up as an efficient manager.


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BIBLIOGRAPHY

Marketing Management - A South Asian Perspective

13th edition

- Philip Kotler

- Kevin Lane Keller

- Abraham Koshy

- Mithileshwar Jha

Brochures given by the dealers

WEBOGRAPHY

www.Beyond Bread Bakerybazaar.com

www.wikipedia.org

www.justdial.com

www.fao.org

www.blog.franchiseindia.com
http://www.bakerybazaar.com/http://www.wikipedia.org/http://www.justdial.com/http://www.fao.org/http://www.blog.franchiseindia.com/http://www.blog.franchiseindia.com/http://www.fao.org/http://www.justdial.com/http://www.wikipedia.org/http://www.bakerybazaar.com/

pfr on bakery

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