PROJECT REPORT

Of

CAKE MAKING UNIT

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Cake Making Unit.

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in project
identification for investment and in order to serve his objective; the document covers various aspects
of the project concept development, start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can also prepare
project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak Building ,

27/1/B, Gokhlley Marg, Lucknow-226001

Delhi Office : Multi Disciplinary Training

Centre, Gandhi Darshan Rajghat,
New Delhi 110002

Email : [email protected]
Contact : +91 7526000333, 444, 555
 PROJECT AT A GLANCE

1 Name of the Entreprenuer xxxxxxxxxx

2 Constitution (legal Status) xxxxxxxxxx :

3 Father / Spouse Name xxxxxxxxxxxx

4 Unit Address : xxxxxxxxxxxxxxxxxxxxxx

District : xxxxxxx
Pin: xxxxxxx State: xxxxx
Mobile xxxxxxx

5 Product and By Product : CAKE

6 Name of the project / business activity

CAKE
proposed
MANUFACTURING
: UNIT

7 Cost of Project : Rs. 20.72 Lakhs

8 Means of Finance
Term Loan Rs. 12.12 Lakhs
Own Capital Rs. 2.07 Lakhs
Working Capital Rs. 6.52 Lakhs

9 Debt Service Coverage Ratio : 2.93

10 Pay Back Period : 5 Years

11 Project Implementation Period : 6-7 Months

12 Break Even Point : 50%

13 Employment : 12 Persons

14 Power Requirement : 8.00 KW

15 Major Raw materials : Milk, sugar, wheat etc.

16 Estimated Annual Sales Turnover:(Max Capacity) 277.64 Lakhs

17 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lakhs)

Particulars Amount
Land Own/Rented
Plant & Machinery 12.27
Miss Assets 1.20
Furniture & Fixtures
Working Capital 7.25
Total 20.72

MEANS OF FINANCE
Particulars Amount
Own Contribution 2.07
Working Capital(Finance) 6.53
Term Loan 12.12
Total 20.72
 1. INTRODUCTION

Cake is a type of sweet food that is typically baked, made from flour, sugar, and
other ingredients. Cakes were modifications of bread in their earliest types, but now
cakes cover a wide variety of preparations that can be basic or complex, and that
share characteristics with other sweets such as pastries, meringues, custards, and
pies. Flour, sugar, eggs, butter or oil or margarine, a liquid, and leavening agents
such as baking soda or baking powder are the most widely used cake ingredients.
Dry, candied, or fresh fruit, nuts, cocoa, and extracts such as vanilla, with various
substitutions for the main ingredients, are common additional ingredients and
flavourings. Fruit preserves, nuts or dessert sauces (such as pastry cream), iced butter
cream or other icing, and decorated with marzipan, piped border or candied fruit
may also be filled with cakes. On ceremonial occasions, such as marriages,
anniversaries, and birthdays, cake is sometimes served as a celebratory dessert.
Countless cake recipes are available; some are bread-like, some are rich and
intricate, and many are centuries old. Cake making is no longer a complex process;
while considerable labor went into cake making at one time (especially the whisking
of egg foams), baking equipment and instructions have been streamlined so that a
cake can be baked even by the most amateur of cooks.

Two main types of cakes are available: butter cakes (also referred to as shortened
cakes) and sponge cakes. The difference is in the fat content of these two broad types
of cake. Of these big forms has countless variations.

1. Sponge Cakes-Sponge cakes have little to no fat and typically have a higher
percentage of eggs. This gives them an airy, lighter texture (think angel food and
sponge cake). When you bake sponge cakes, it is important to note that as soon as it
is ready, the batter needs to go into the oven to prevent the egg whites from deflating.
Owing to the raise the egg whites give them, they also need to be baked in a tall pan.
These cakes are not going to hold up well against heavy frosting, so it's best to give
them a dollop of whipped cream or a soft glaze.

2. Butter Cakes- On the other hand, butter cakes contain butter, margarine, or
shortening of vegetables, giving you the dense, moist cakes that we know and love.
If it says "cream butter and sugar," in the recipe, it's a butter cake. You'll usually add
egg, flour, and baking powder or baking soda for leavening once the creaming is
complete. To name a couple, butter cakes will come in chocolate, white, yellow and
marble. Other cakes in this type, such as carrot cake or red velvet cake, can be
"shortened" with oil
 2. MARKET POTENTIAL:

The global market bread product is divided by product type (Loaves, Baguettes,
Rolls, Burger Buns, Sandwich Slices, Ciabatta, Frozen Bread, and Others),
Distribution Channel (Convenience Stores, Specialist Retailers, Supermarkets and
Hypermarkets, Online Retail, Variety Stores, and Others), and by Geography.
Global bread market is projected to register a CAGR of 1.43% during the forecast
period, 2019 - 2024. During the forecast period, 2019 - 2024, the global bread market
is expected to register a CAGR of 1.43%. Since the nineties, the Indian bread
industry has come a long way. For certain clients, bread has progressed from being
viewed as a fundamental breakfast food item to being a confectionary item.

Rising disposable sales, urbanization, and changing customer tastes and behaviors
have provided the bread industry a boost over the years. The Indian bread market
stood at $640.73 million in 2017, and is projected to rise to $1024.54 million by
2024 at a CAGR of over 10.70 percent, in value terms, during 2019-2024. Market
factors and demographic patterns are increasingly affecting supply and demand;
India's bread market is aided by an expanding working population and a rising
number of health-conscious consumers. In addition, some of the other factors
expected to propel demand for bread over the next five years are rising disposable
income along with shifting lifestyle and knowledge of eating a good and safe diet to
minimize health problems. The bread industry in India is dominated by unorganized
players, leading to about 55% of the total market.
 3. PRODUCT DESCRIPTION

3.1 RAW MATERIAL

The raw materials required for Cake is as follow:

 Baking Powder
 Castor Sugar
 Eggs
 All Purpose Flour (Maida)
 Vanilla Essence
 Corn Starch
 Oil
 RO Water

Whipping Cream:
 Whipping Cream
 Icing Sugar

Decoration, Icing & Soaking: (Optional)

 Pineapple Juice
 Chopped Canned Pineapples
 Canned Cherry

Usually, a traditional cake recipe contains flour, a kind of sweetener, eggs, some sort
of fat, a liquid, a leavening agent to make it rise and flavour (like vanilla, cocoa
powder or cinnamon). In order to create cakes of varying density, texture and taste,
the ingredients communicate with each other. Here is how each ingredient functions:
3.2 MANUFACTURING PROCESS

 Ingredients scaling
All types of raw material are Procured from the raw material store and
transported by suitable material handling equipment to their respective
holding tanks.

 Mixing (hot/cold process)

In the drum of the batter mixing machine, all raw materials are added in the
amount needed according to the required sequence. There are different speeds
for mixing various components and they are maintained to achieve the most
effective batter features. This produces the cake batter .

 Depositing
The baking tray is appropriately greased with oil and a butter paper of
appropriate shape i.e. shape of the bottom is placed at bottom of the tray. Then
the cake batter is poured into a baking tray, followed by which batter is
appropriately levelled.

 Baking
Bake at 360–425°F (182–218°C) to an internal temperature of 204°F (95°C).
The hot processed batter should have a shorter baking time. The cold
processed batter should be baked longer. The baked cake is obtained from the
oven; it’s allowed to cool in the pan itself prior to de-panning.
  De-panning
De-pan from the oven onto dusted paper pan liners while the cakes are still
warm. The butter paper is then gently removed from cake, followed by which
outer skin of cake is also removed with a knife, and then the cake is divided
into multiple layers depending on the thickness of the cake.

 Cooling
Cool product to loaf internal temperature of 95–105°F (35–40°C) before icing
and packaging.

 Icing
Simultaneously Whipping Cream and Icing Sugar are beaten by a simple
beater until sufficiently stiff, which is then fed to holding tank of cake
decorating machine. The layer of cake is placed on a cake decorating and
icing machine, followed by the cake-decorating machine which uses the layer
of whipped cream over the cake, then the layer of chopped fruit slices is placed
and another layer of cake is placed over the pineapple layer. This is followed
by a layer of chopped fruit slices.

 Storage and Packaging or serving

When all layers are added, the last layer is filled with only one layer of whipping
cream and then easily decorated by the machine, then finished manually. The cake
is in the refrigerator until it is sold at the correct temperature.
 4. PROJECT COMPONENTS

4.1 Land & Building

The approximate total area required for complete factory setup is 1000-1500 Sq.
ft. for smooth production including storage area. It is expected that the premises
will be on rental.

4.2 Plant & Machinery

Steps Machine Uses Picture

Ingredients Weighing Weighting Scales are

scaling scale used to measure the
weight of an item

Mixing Batter mixer A machine that uses a

machine gear-driven
mechanism to rotate
a set of "beaters" in a
bowl.
Depositing Cake It’s used to fill batters
Depositor within baking pans or
Machine mold for the baking
process.
Baking Baking oven An oven is a
thermally insulated
chamber used for the
heating, baking, or
drying of a
substance.
De-panning De- panning De-panning is
generally done
manually by using
different tools.
Icing Cake Icing & As the name
Decorating suggests, this
Machine machine is used to
decorate the cake
with appropriate
cream or icing.
Storage Display It’s a refrigerator
Refrigerator designed to store the
given product in
temperature
controlled space with
at least one
transparent wall, so
as to display stored
content.
Note: Approx. Total Machinery cost shall be Rs 12.27 lakhs including equipment’s
but excluding GST and Transportation Cost.

4.3 Power Requirement

The borrower shall require power load of 08 KW which shall be applied with Power
Corporation.

4.4 Manpower Requirement

7 Manpower are required for the Cake Making Business.

Includes:

2 Skilled Labour

2 Unskilled Labour

2 Administrative Staffs

1 Accountant
 5. FINANCIALS

5.1 Cost of Project

COST OF PROJECT
(in Lacs)
PARTICULARS Amount

Land & Building Owned/Rented

Plant & Machinery 12.27
Miscellaneous Assets 1.20
Working capital Required 7.25
Total 20.72

5.2 Means of Finance

MEANS OF FINANCE

PARTICULARS AMOUNT
Own Contribution @ 10% 2.07
Term Loan @ 90% 12.12
Working Capital (Bank Finance) 6.52
Total 20.72
5.3 Projected Profitability Statement

PROJECTED PROFITABILITY STATEMENT (in Lacs)

2nd 3rd 4th

PARTICULARS 1st year year year year 5th year
Capacity Utilisation % 60% 65% 70% 75% 80%
SALES
Gross Sale
Cakes 277.64 319.13 361.24 406.71 455.72

Total 277.64 319.13 361.24 406.71 455.72

COST OF SALES
Raw Material Consumed 226.80 258.18 292.32 328.50 367.68
Electricity Expenses 1.92 2.21 2.54 2.92 3.21
Depreciation 2.02 1.72 1.46 1.24 1.05
Wages & labour 3.60 5.04 7.06 9.88 13.83
Repair & maintenance 6.94 7.98 9.03 10.17 11.39
Packaging 20.82 23.93 23.48 24.40 25.06
Cost of Production 262.10 299.06 335.89 377.11 422.23
Add: Opening Stock /WIP - 2.62 2.99 3.36 3.77
Less: Closing Stock /WIP 2.62 2.99 3.36 3.77 4.22
Cost of Sales 259.48 298.69 335.52 376.70 421.78
GROSS PROFIT 18.15 20.44 25.72 30.01 33.93
6.54% 6.40% 7.12% 7.38% 7.45%
Salary to Staff 4.68 5.43 6.62 7.62 8.38
Interest on Term Loan 1.19 1.05 0.75 0.46 0.16
Interest on working Capital 0.72 0.72 0.72 0.72 0.72
Rent 3.60 3.96 4.36 4.79 5.27
Selling & Administrative Exp. 5.28 5.11 6.14 6.51 5.47
TOTAL 15.46 16.26 18.59 20.09 20.00
NET PROFIT 2.69 4.17 7.13 9.92 13.94
0.97% 1.31% 1.97% 2.44% 3.06%
Taxation - - 0.44 1.02 2.23
PROFIT (After Tax) 2.69 4.17 6.68 8.90 11.71
5.4 Projected Balance Sheet

PROJECTED BALANCE SHEET (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
Liabilities
Capital
Opening balance 2.41 3.49 5.87 8.32
Add:- Own Capital 2.07
Add:- Retained Profit 2.69 4.17 6.68 8.90 11.71
Less:- Drawings 2.35 3.10 4.30 6.45 8.80

Closing Balance 2.41 3.49 5.87 8.32 11.23

Term Loan 10.78 8.08 5.39 2.69 -
Working Capital Limit 6.52 6.52 6.52 6.52 6.52
Sundry Creditors 7.56 8.61 9.74 10.95 12.26
Provisions & Other Liability 0.20 0.22 0.24 0.27 0.29
TOTAL : 27.47 26.92 27.77 28.75 30.30
Assets
Fixed Assets ( Gross) 13.47 13.47 13.47 13.47 13.47
Gross Dep. 2.02 3.74 5.20 6.44 7.49
Net Fixed Assets 11.45 9.73 8.27 7.03 5.98

Current Assets
Sundry Debtors 4.63 5.32 6.02 6.78 7.60
Stock in Hand 10.18 11.60 13.10 14.72 16.48
Cash and Bank 1.21 0.27 0.37 0.22 0.25
TOTAL : 27.47 26.92 27.77 28.75 30.30
5.5 Projected Cash Flow Statement

PROJECTED CASH FLOW STATEMENT (in Lacs)

1st 2nd 3rd 4th

PARTICULARS year year year year 5th year
SOURCES OF FUND
Own Margin 2.07
Net Profit 2.69 4.17 7.13 9.92 13.94
Depreciation & Exp. W/off 2.02 1.72 1.46 1.24 1.05
Increase in Cash Credit 6.52 - - - -
Increase In Term Loan 12.12 - - - -
Increase in Creditors 7.56 1.05 1.14 1.21 1.31
Increase in Provisions & Oth labilities 0.20 0.02 0.02 0.02 0.03
-
TOTAL : 33.19 6.96 9.75 12.39 16.32
APPLICATION OF FUND
Increase in Fixed Assets 13.47
Increase in Stock 10.18 1.42 1.51 1.62 1.76
Increase in Debtors 4.63 0.69 0.70 0.76 0.82
Repayment of Term Loan 1.35 2.69 2.69 2.69 2.69

Drawings 2.35 3.10 4.30 6.45 8.80

Taxation - - 0.44 1.02 2.23
TOTAL : 31.98 7.90 9.64 12.54 16.30

Opening Cash & Bank Balance - 1.21 0.27 0.37 0.22

Add : Surplus 1.21 -0.94 0.10 -0.15 0.03
Closing Cash & Bank Balance 1.21 0.27 0.37 0.22 0.25
5.6 DSCR

CALCULATION OF D.S.C.R

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year

CASH ACCRUALS 4.71 5.89 8.14 10.14 12.76

Interest on Term Loan 1.19 1.05 0.75 0.46 0.16
Total 5.90 6.94 8.90 10.60 12.92

REPAYMENT
Instalment of Term Loan 1.35 2.69 2.69 2.69 2.69
Interest on Term Loan 1.19 1.05 0.75 0.46 0.16

Total 2.54 3.74 3.45 3.15 2.85

DEBT SERVICE COVERAGE RATIO 2.32 1.85 2.58 3.36 4.53

AVERAGE D.S.C.R. 2.93

5.7 Production & Yeild

COMPUTATION OF PRODUCTION OF CAKES

Items to be Manufactured
Cakes

Machine capacity Per Hour 50

Total working Hours 8
Machine capacity Per Day 400 Kg
Working days in a month 25 Days
Working days per annum 300
Wastage Considered 5%
Raw material requirement 120000 Kg
Final Output per annum after wastage 114000 Kg
Final Product to be packed in 1 kg Packet
Number of Packets per annum 114000 Kg
5.10 Working Capital Requirement

COMPUTATION OF CLOSING STOCK & WORKING CAPITAL (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
Finished Goods
2.62 2.99 3.36 3.77 4.22
Raw Material
7.56 8.61 9.74 10.95 12.26
Closing Stock 10.18 11.60 13.10 14.72 16.48

COMPUTATION OF WORKING CAPITAL REQUIREMENT

TRADITIONAL METHOD (in Lacs)
Particulars Amount Own Margin Bank Finance
Finished Goods & Raw Material 10.18
Less : Creditors 7.56
Paid stock 2.62 10% 0.26 90% 2.36
Sundry Debtors 4.63 10% 0.46 90% 4.16
7.25 0.72 6.52
MPBF 6.52
WORKING CAPITAL LIMIT DEMAND ( from Bank) 6.52
Working Capital Margin 0.72
5.12 Repayment Schedule

REPAYMENT SCHEDULE OF TERM LOAN

Interest 11.00%
Closing
Year Particulars Amount Addition Total Interest Repayment Balance
1st Opening Balance

1st month - 12.12 12.12 - - 12.12

2nd month 12.12 - 12.12 0.11 - 12.12

3rd month 12.12 - 12.12 0.11 - 12.12

4th month 12.12 - 12.12 0.11 12.12

5th month 12.12 - 12.12 0.11 12.12

6th month 12.12 - 12.12 0.11 12.12

7th month 12.12 - 12.12 0.11 0.22 11.90

8th month 11.90 - 11.90 0.11 0.22 11.67

9th month 11.67 - 11.67 0.11 0.22 11.45

10th month 11.45 - 11.45 0.10 0.22 11.23

11th month 11.23 - 11.23 0.10 0.22 11.00

12th month 11.00 - 11.00 0.10 0.22 10.78

1.19 1.35
2nd Opening Balance

1st month 10.78 - 10.78 0.10 0.22 10.55

2nd month 10.55 - 10.55 0.10 0.22 10.33

3rd month 10.33 - 10.33 0.09 0.22 10.10

4th month 10.10 - 10.10 0.09 0.22 9.88

5th month 9.88 - 9.88 0.09 0.22 9.65

6th month 9.65 - 9.65 0.09 0.22 9.43

 7th month 9.43 - 9.43 0.09 0.22 9.20

8th month 9.20 - 9.20 0.08 0.22 8.98

9th month 8.98 - 8.98 0.08 0.22 8.76

10th month 8.76 - 8.76 0.08 0.22 8.53

11th month 8.53 - 8.53 0.08 0.22 8.31

12th month 8.31 - 8.31 0.08 0.22 8.08

1.05 2.69
3rd Opening Balance

1st month 8.08 - 8.08 0.07 0.22 7.86

2nd month 7.86 - 7.86 0.07 0.22 7.63

3rd month 7.63 - 7.63 0.07 0.22 7.41

4th month 7.41 - 7.41 0.07 0.22 7.18

5th month 7.18 - 7.18 0.07 0.22 6.96

6th month 6.96 - 6.96 0.06 0.22 6.73

7th month 6.73 - 6.73 0.06 0.22 6.51

8th month 6.51 - 6.51 0.06 0.22 6.29

9th month 6.29 - 6.29 0.06 0.22 6.06

10th month 6.06 - 6.06 0.06 0.22 5.84

11th month 5.84 - 5.84 0.05 0.22 5.61

12th month 5.61 - 5.61 0.05 0.22 5.39

0.75 2.69
4th Opening Balance

1st month 5.39 - 5.39 0.05 0.22 5.16

2nd month 5.16 - 5.16 0.05 0.22 4.94

3rd month 4.94 - 4.94 0.05 0.22 4.71

4th month 4.71 - 4.71 0.04 0.22 4.49

 5th month 4.49 - 4.49 0.04 0.22 4.27

6th month 4.27 - 4.27 0.04 0.22 4.04

7th month 4.04 - 4.04 0.04 0.22 3.82

8th month 3.82 - 3.82 0.03 0.22 3.59

9th month 3.59 - 3.59 0.03 0.22 3.37

10th month 3.37 - 3.37 0.03 0.22 3.14

11th month 3.14 - 3.14 0.03 0.22 2.92

12th month 2.92 - 2.92 0.03 0.22 2.69

0.46 2.69
5th Opening Balance

1st month 2.69 - 2.69 0.02 0.22 2.47

2nd month 2.47 - 2.47 0.02 0.22 2.24

3rd month 2.24 - 2.24 0.02 0.22 2.02

4th month 2.02 - 2.02 0.02 0.22 1.80

5th month 1.80 - 1.80 0.02 0.22 1.57

6th month 1.57 - 1.57 0.01 0.22 1.35

7th month 1.35 - 1.35 0.01 0.22 1.12

8th month 1.12 - 1.12 0.01 0.22 0.90

9th month 0.90 - 0.90 0.01 0.22 0.67

10th month 0.67 - 0.67 0.01 0.22 0.45

11th month 0.45 - 0.45 0.00 0.22 0.22

12th month 0.22 - 0.22 0.00 0.22 -

0.16 2.69
DOOR TO DOOR 60 MONTHS
MORATORIUM
PERIOD 6 MONTHS
REPAYMENT PERIOD 54 MONTHS
Assumptions:
1. Production Capacity of a Cake u n it is taken at 50 Kg per Hour. First
year, Capacity has been taken @ 60%.

2. Working shift of 8 hours per day has been considered.

3. Raw Material stock and Finished goods closing stock has been taken for 1 0-
3 days.

4. Credit period to Sundry Debtors has been given for 5 days.

5. Credit period by the Sundry Creditors has been provided for 10 days.

6. Depreciation and Income tax has been taken as per the Income tax Act,1961.

7. Interest on working Capital Loan and Term loan has been taken at 11%.

8. Salary and wages rates are taken as per the Current Market Scenario.

9. Power Consumption has been taken at 8 KW.

10. Selling Prices & Raw material costing has been increased by 5% & 5%
respectively in the subsequent years.
 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN
assume no financial liability to anyone using the content for any purpose. All the
materials and content contained in Project report is for educational purpose and
reflect the views of the industry which are drawn from various research material
sources from internet, experts, suppliers and various other sources. The actual
cost of the project or industry will have to be taken on case to case basis
considering specific requirement of the project, capacity and type of plant and
other specific factors/cost directly related to the implementation of project. It is
intended for general guidance only and must not be considered a substitute for a
competent legal advice provided by a licensed industry professional. SAMADHAN
hereby disclaims any and all liability to any party for any direct, indirect, implied,
punitive, special, incidental or other consequential damages arising directly or
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