A PRODUCT PROJECT REPORT ON

CANNED MUSHROOMS
Name Roll No. Class Year College : JHALA AVANIBA N. : 16 : T.Y.B.B.A. : 2006 2007. : Shri J.H.Bhalodiya womens college

* Submitted To *

Saurashtra University RAJKOT.

* Guided By *

Prof. Vijay Bhatasna Prof. Smita C. Vyas

* DECLARATION *
I Jhala Ananiba N. the students of T.Y.B.B.A. in shri J. H. Bhalodia womens college, here declare that the project work presented in tis report is my own work & has been carried out under the supervision of Prof. Smita C. Vyas of Shri J. H. Bhalodiya womens college.

The work has not been the submitted to any other university for any examination.

Date :

Place : RAJKOT

Signature Avaniba Jhala

* PREFACE *
For a Socio-economic growth & balanced structure development, small scale industries are a very important tool. It is considered highly for the creation of employment

opportunities as well as development of entrepreneur skills. The better use of scarce financial resources & appropriate technology is also ensuring by the small-scale industries.

In

the

present

era

of

big

industries

global

competition, the condition of position of SSI is not in the best form. So, there is a great need to change the style of management. In the syllabus of T.Y.B.B.A. university has include the subject of entrepreneurship & management of small business. The main use of this subject is to teach, to solve problems & to take decisions I the management of small business.

I am extremely, happy to submit this report for SSI, under the prescribed syllabus of Saurashtra university. I have got a chance to acquire practical knowledge at the time of collecting information. I have prepared a project a report on Canned mushrooms. I have tried my level best to make this report most presice, relevant & systematic.

* ACKNOWLEDGEMENT *
Successful accomplishment of any work requires cooperation, help & guidance from many people. I had a wonderful opportunity to make a product project report on Canned Mushrooms as a part of my practical training in T.Y.B.B.A.

This report would not have been possible without the help of many people whom I would like to acknowledge & thanks for their kind co-operation.

First of all I thanks Shri J. H. BHALODIA WOMENS COLLEGE RAJKOT. For giving me opportunity of doing product project report.

I would like to thank my respected principal Mr. N. H. KORINGA for giving me such an opportunity to have an insight into the small scale business work in the form of this product project report.

I specially thank Prof. SMITA VYAS H.O.D for giving me important guidance for making the project informative & well constructed. She had spent her precious time for my product project report. It would be impossible for me to

complete this project without her important instructions 7 supervision. I thank All My FRIENDS AND CLASSMATES for giving me important guidance, which is very helpful for me to complete my project in perfect time duration. I thank All HIDDEN PERSONALITIES, who played important roles to complete my product project report successfully.

At last, but not least. I thank MY PARENTS & FAMILY MEMBERS to give me every kind of support & almighty the GOD for helping me out whenever I viewed an obstacles, as they have left no stone unturned & betterment.

Date : Place : RAJKOT

Signature Avaniba Jhala

* MAIN INDEX *

No. 1. 2. 3. 4. 5. 6 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26.

Particulars Introduction to S.S.I. Project at a glance Bio-data of partners Basis & Presumptions Organizational structure Implementation schedule Location Justification Portrait of Product Details of Raw-Materials Marketing Analysis Production process Quality control & standards Production capacity Pollution control Energy conservation Machinery Utilization Financial Aspects Financial Analysis Profitability Analysis Break-even analysis Computation of Ratios Risk factors Benefits for Export-oriented unit Future prospects List of Suppliers Conclusion

Pg. No.

INTRODUCTION TO S.S.I. *
Small Scale Industry, has place of pride in our

economy. It is the base for medium & large scale industry helps in earning foreign exchange, helps generating employment opportunities & many more benefits are available to the economy. Hence, the government has introduced the small & medium enterprise development Bill 2005 in the LOK Sabha, Seeking to enhance the investment cap for small scale units from Rs, 1 corer to Rs. 5 corers. The bill aims to consolidate the laws governing small & medium enterprises. It also seeks to extend progressive credit facilities to SMEs in line with the guidelines laid out by the RBI.

In a move to enable small enterprise to grow the bill provides that more than 50 employees can be freed from the purview of labour laws including the employers liability Act, 1938. This report is made within the boundaries of S.S.I. with the intense to acquaint the students with the functions of entrepreneur.

* PROJECT AT A GLANCE *
Name of the unit : Varni canned mushrooms

Address for Communication

: Varnicanned mushrooms, Sir Lakhajiraj road, RAJKOT.

Type of the unit

: Partnership firm

Location of the unit

: Varni canned mushrooms G.I.D.C., Kalawad road RAJKOT. Metoda

Name of the product

: Canned mushrooms [Export orinted]

S.S.I. registration no

: Applied for

Partners name

: Ananiba Jhala Kripalsinh Rana

Brand name

: Healthy Bite

Banker

: ICICI

* BIO-DATA OF PARTNERS *
PARTNER I Name : Jhala Avaniba N.

Address

: Pramukh Drashti, 29, Sadguru nagar, Opp. Ruda-2 Kalawad road, RAJKOT 360005.

Educational Qualification

: M.B.A. With Marketing & Finance.

Age

: 24 yrs.

Experience

: 2 yrs.

Financial contribution

: 25%

Role in the unit

: Managing Marketing & Finance

 *PARTNER II *

Name

: Rana Kripalsinh N.

Address

: Pramukh Drasti, 29, Sadguru nagar, Opp. Ruda 2 Kalawad road, RAJKOT 360005.

Educationsal Qualification : M.D. [Medicine]

Age

: 28 yrs.

Experience

: 2 yrs.

Financial contribution

: 15%

Role in the unit

: Research activity

* BASIS & PRISUMPTIONS *

1. This project is based on single shift & 300 working days in a year. 2. To run the unit viable throughout the year, the other fruits & vegetables can be canned with the same machinery equipments whenever mushroom is not available. 3. The yield of canned mushroom has been considered as 60% based on fresh mushrooms. The drain weight of canned mushroom has been taken as 440 gms. In each A-2-1/2 can. 4. The cost of machinery & equipments/materials indicated refers to a particular make & the prices are approximate to those prevailing at the time of preparation of this profile.
5. The cost of packaging, forwarding, tax etc. is taken @10%

of the cost of machinery & equipments. 6. The cost of installation & electrification is taken @10% of the cost of machinery & equipments. 7. Non-refundable deposits-project cost, trial production, FPO fees etc. are considered under pre-operative expenses. 8. Depreciation has been taken on:

(i)
(ii)

Building @ 5% & Plant & Machinery @ 20%.

9. Interest on total capital investment has been taken @ 14% per annum. 10. Minimum 40% of the total investment is required as margin money. 11. Pay-back period of the project will be 7 yrs. with yearly Installments. 12. Break-even point has been calculated on full capacity Utilization. 13. For smooth functioning of the unit, it is suggested that unit should have own arrangements for cultivation of mushroom for consistency & regular availability of quality raw-materials. 14. Mushroom cuttings/stems can be utilized for preparation f mushroom pickles & sold in local markets to get additional profit.

*ORGANISATION STURCTURE *

Board of Directors

M. D. / Chairman

V.P./E.P. (Production)

V.P./E.P (Marketing)

V.P./E.P V.P./E.P (Finance) (Personnel)

Manager

Manager

Manager

Manager

Assistance

Assistance

Assistance

Assistance

Salesman

* IMPLEMANTATION SCHEDULE *
The following steps are involved in implementation of the project. 1. 2. 3. 4. 5. 6.
7. 8.

Selection of site Form of ownership Feasibility report Registration with D/C. Arrangement of finance (term loan & W.C.) Construction of factory shed & Building Procurement of machinery & Equipment Plant erection & electrification Recruitment of manpower Arrangement of raw-material including packaging material.

9.
10.

11. Selection of marketing channel

12.

Miscellaneous: Power & water connection, pollution control board, clearance etc.

As it is a 100% export oriented unit of canned mushroom, normally project. Efficient planning & simultaneous operations will be major factors for timely stare of the production.

* LOCATION JUSTIFICATION *

Location is the prime factors to be considered for starting a new business.

Location of plant or industry means a scientific choice of a region or specific sight in a region where the business unit is to be situated.

In other words the main object of an industries is to maximize profit through minimization of production & distribution cost. The objective is realized only if the firm is located at a place which offers all economics of production & distribution.

The location should be either near to the customer i.e. market or where raw-materials is easily available. The location should be such which can provide ancillary facilities like water, electricity, communication, transportation & easy

availability of labour. In other worlds it can also be said as :

Selected location on one side can earn variety of benefit & any mistake in selection of location on the other side can result in a great loss. The following factors have been considered at the time of choosing the above location. Raw-materials: The major component or major input which is an inevitable part of any production process is the availability of raw-material. Raw-material at proper time & at reasonable cost & in right quantity directly affects the price of he final product.
Availability of labour:

Availability of labour influences the selection of location. Unit requires both semiskilled & skilled labors. Both type of labour can be made available from the local are so availability of labour never creates problems.

Transportation facilities: Transportation is required for assembling of rawmaterials & distribution of finished product.

For the distribution of he finished product, trucks, rickshaw will be used & for a exporting out of the nation ships will be used. As the product is of lightweight & not of costly nature. Land: The basic necessity for each & every industry is land without land no industry can be come into existence. Our unit is situated at Veraval-shaper. Water & Electricity: This area has no problem of water & electricity is also easily available with the help of the PGVCL.

Other anciliary services: Rajkot is considered as the main hub of Saurashtra region as far as banking, insurance, technical assistance etc. is concerned.

Hence, it can be concluded that selection of location of unit is really necessary as it helps a lot in lowering the cost of production.

* PORTRAIT OF PRODUCTS *

Mushroom, a fungus trait body, is considered a delicious food all over the world because of its taste aroma & structure. It is full of nutrients, low in calories, high in proteins, vitamins, minerals & a rich source of folic acid. It is an alternate choice for weight conscious people & anaemic patients. It has 4.9% protein content which is more than cow-milk, greenvegetables such as beans etc.

Mushrooms are highly perishable commodity & should be marketed & consumed as soon as possible after harvest because of their high moisture content (90.92%). However, its shelf-life can be enhanced for a larger period by way of processing. Generally mushrooms are processed-frozen dried & canned.

This project profile has been prepared for canning of mushrooms, for a 100% export-oriented unit. The agricus bisporus [white button] type of mushroom is suitable & preferred for commercial canning.

* DETAILS OF RAW-MATERIALS *

No. 1.

Particulars

Quantity

2.

3. 4. 5.

Mushrooms A 55 tonnes Grade(canning Quality) Salt, sugar, critic L.S Acid, chemicals, preservations. A-21/2 can 75,000 Carton Boxes labels, Gums, Box Serapping etc. wastage of canes cartons Boxes, labels etc. 6,250 L.S.

Rate (in Rs.) 35,000

Amount (Rs. In lakhs) 19.25

0.25

12.00 each 15.00 each -

9.00 0.94 0.85

6.

L.S.

Total

0.15 30.44

*MARKETING ANALYSIS *

INDEX

No.

Particular

Pg. No.

1.

Market Potential

2.

Market channel

3.

Pricing decision

4.

Promotion Decision

* MARKET POTENTIAL *

It has been estimated that the export market of canned mushrooms in the world trade is about US $ 1000 million. The world trade of mushroom is expected to reach a staggering figure of US $ 15 billion by next 5 years.

The present global demand of mushroom is about 1,15,000 tonnes per annum. It is also estimated that the gap between the demand & supply of mushroom in the world market is around 25 lakh tones. The consumption of mushroom is going up at the rate of around 10% in international market.

At, present, china, Taiwan & Indonesia are the main producers of mushroom products which also capture the major share of world market over 50% of the total world production of the mushroom, is sold in fresh form, mainly in producers domestic markets. The balance is processed. i.e. dried, frozen, canned etc. It has also been estimated that 50% of the mushrooms for processing are canned.

The major importing countries are Germany, U.S.A., Canada, Japan, Australia etc. In India, Present production is around 30,000 M.T. as per the information available from APEDA(2001-2002) 15897 M.T. of mushroom of he value of Rs. 72,47,54,829 is exported. Total export is divided into 2 categories. i.e. Fresh mushroom 1,17,97,631 kg. value Rs. 51,05,30,325 & prepared & preserved 40,99,258 kg., value Rs. 21,42,24,504 which is a very negilible figure as compared to the world share.

* MARKET CHANNEL *
If you can sell your mushrooms or mushroom products directly to an end user, you will naturally receive a better price than if you sell to a wholesaler.

Direct marketing of mushrooms at local farmers markets, to restaurants, or in supermarkets is possible in many locations. When competing in local markets, excellent service, top quality & consistent supply rather than the lowest price, might win the sale, particularly with gourmet chefs. Some chefs specialize in locally grown foods & may be interested for that reason. Other are willing to pay for fresh, premium produce. In any case, establishing a relationship with the buyer & reliably delivering a quality product are essential for this type of marketing.

Local grocery stores are another potential buyer to fresh mushrooms.

Although the wholesaler with an established account creats stiff competition, the small, efficient producer might still have an advantage in some niche markets.

Selling fresh mushrooms to a wholesaler will mean a lower price than if you market directly. However, for growers who choose not to involve themselves in direct sales. There are established wholesale markets for mushrooms.

Small-Scale commercial production of white-button mushrooms & other Agaricus varieties such as portobellas & criminis is not recommended for the beginner, except on a small scale for direct marketing.

A significant capital outlay & a high level of management skills are required to begin production & at current prices, recovery of he initial investment might not be possible. The market is extremely competitive.

* PRICING DECISION *

Prices play a vital role in the regulation of the entire spectrum of economic activities, particularly in smallscale industries. A competitive economic system is essentially based on price mechanism. Prices serve as guide posts in : (i) (ii) (iii) (iv) (v) Organising production Fixing standards [quality] The distribution of the product Providing for economic maintenance & progress. Adjusting consumption over short periods.

Influencing factors: Cost of production Cost of Raw-materials Prevailing demand Competitors price Pricing Method Cost + Pricing

* PROMOTION DECISION *

To increase the sales volume is also an important marketing goal. When any company is facing some marketing problem like decreasing sales volume, decreasing popularity for that purpose to increase the quick sales promotion.

Objectives: Brand awareness Brand preference Brand loyalty

Budget: Rs. 20,000 per month

Tools: Sign boards Hoardings Catalogs Printed materials Other materials of social group

* PRODUCTION PROCESS *
While button mushroom (Agarious bisporus) are preferred over other types of mushrooms for canning. Commercially, mushrooms are canned in brine. The process involves the following steps.

a) PICKING:

Mushrooms are picked at button stage [cap.

Diameter 2-2.5 c.m.] by gentle hand twisting. The soil & portion carrying any microbial flora is then cut

off/removed with the help of a sharp edge stainless steel knife/blade. The stalk length should preferably be kept 0.5-1 cm. long.
b) Sorting

&

granding:

Diseased,

damaged/bruised,

shriveled & browned mushrooms are discarded & only the healthy white & tight buttons are selected & separated into 2 grades. i.e. Cap. Diameter up to 2.5. cm with compact head as A & cap. Diameter beyond 2.5 cm as B grade.
c) Washing : Graded mushrooms are thoroughly washed 3-4

times in cold running water to remove adhering dirt, soil, etc. without damaging or rubbing them excessively.

d) Blanching:

To inhibit enzymatic activity blanching is

necessary. It also inactivates micro-organisms & removes the air from the raw-materials to achieve a satisfactory & uniform pack.

Mushrooms are blanched in boiling water for 2-3 minutes followed by immediate cooling in cold water. However, to reduce leaching losses, steam blanching is preferred, because the leaching losses in boiling water had been estimated to be about 30%.

e) Filling of cans: Mushrooms are commercially packed in 2

can sizes i.e. A-1 tall can & A-2.5 A-1 tall cans are preferred by retailers while A-2.5 cans are liked by boteliers, exporters & other establishments. The blanched mushrooms are filled into cans with declared drain weight i.e. 440 gms. In A-2.5 can.
f) Filling of cans: After filling the cans with mushrooms

strained hot brine solution of 2% common salt, 1% sugar & 0.05% citric acid is added up to the brim of the can. Brining adds flavour to the product, reduces processing time & enhances the shelf life of canned mushrooms.

g) Exausting: After brining, cans are exhausted to remove

any entrapped air & other accumulated gases from the product to ensure a longer shelf life.

Cans filled with brine solution are fed to the exhaust box for a specified period of time depending upon the length of exhaust tunnel & size of container. The shorter the tunnel, the longer will be the time required for exhausting. Exhausting can also be performed by placing the filled cans in boiling water till temperature of he center of can reaches 85-90o c for 1-2 mts.
h) Seaming/can closing: Immediately after exhausting, cans

are sealed with the help of a double seamer to get hermetically sealed container. Sealed cans are then placed in upside down position to sterilize the closed lids.
i) Processing/sterilization: Processing, also designated as

sterilization, is an indispensable unit operation in canning. This is accomplished by processing the hermetically sealed cans at a pressure of 15lbs PSI for a specified period of time depending upon the size of can & altitude of processing place. However, for areas like shimla,

processing time for A-2.5 size cans is recommended to be 45 minutes.

j) Cooling:

Cooling of cans is done immediately after

sterilization in cold running water to room temperature in

order to give an abrupt shock to the micro-organisms to get rid of their adverse activities.

k) Labelling & Storage: The cooled cans are stored in a cool

dry place & smeared with grease to remove any adhering moisture from he can body to avoid rusting cans are kept at ambient temperature for 8-10 days to check any swell, leakage, puffing & other disorders before labeling.

Before the cans are exposed for sale, proper labeling is done to meet staturory requirements of fruit products order 1955. Prevention of food ?adulteration [Regulation] Act, 1975.

QUALITY CONTROL AND STANDARDS

The specification of fruit products order, 1955 & prevention of food Adulteration Act. 1954 certification are mandatory. The canned mushrooms should conform to the specification laid down in F.P.O. 1955.

The ISO 9000-2000, HACCP, ISO-14000 series & European norms series standards promise a frame-work which may guide the entrepreneurs towards fulfillment of a commitment of quality of products.

ISO series standards are available with the Bureau of Indian standards from their head quarters office: 9, Bahadurshah zafar Marg, New Delhi-110002. PRODUCTION CAPACITY [PER ANNUM] a) Quantity: 9,00,000 A-2.5 Size cans b) Value : Rs. 445.50 lakhs MOTIVE POWER 30 KW

* POLLUTION CONTROL *

The entrepreneurs are advised to contact concerned state pollution control Board for detailed guidance in the matter.

However, the water effluent in this industry is generated during cleaning, washing, pre-treatment, blanching of raw-materials. It is advisable to test the water discharge as per specification laid down by the Bureau of Indian Standards. The provision of such treatment has been made in the profile.

*ENERGY CONSERVATION*
Although the energy requirement is small yet some important points for conservation of energy are given below:

1) In electrical installations appropriate electric motors should be used & properly installed.

2) There should be no leakage of steam from pipe line.

* FINANCIAL ASPECTS* INDEX

No. 1.

Particular Fixed Capital details Land & Building Machinery & Equipments Pre-operative Expenses Working capital details

Pg. No.

2.

Personnel Raw-materials Utilities Other Contingent Expenses

3. 4. 5.

Sources of finance Interest on Capital Depreciation Details

*FIXED CAPITAL DETAILS *

1) Land & Building

No.

Land & Building

Area

Rate (in Rs)

Amt. (in lakhs) 2.50

1.

Land

1000 sq.mtr.

@250 per sq. mtr.

2.

Build up area Factory shed Raw-material store Finished store Others

700 sq. mtr. 100 sq. mtr. 350 sq. mtr

@ 2500 per sq. mtr.

17.50

goods 100 sq. mtr

150 sq. mtr Total 20.00

2) Machinary & Equipments: No. Description Qty. Amt (Rs.in 1. 2. S.S. still Tables size-6 * 3 @ Rs. 13,400 Washing machine Rotary Rod washer equipped with spray arrangement collection 3. tank etc. Blanching equipments consisting of 3 S.S. tank each of 380 * 1140 mm complete with 2 trays of size 1015 mm * 350 mm * 880mm & the top folds ot trays 30 mm * 12 mm & S.S. steam coil 25 mm along 3 slides 4. 5. of tank. S.S. tilting type steam Jacketed kettle (capacity 50 Gallons) Straight line exhaust box. Exhaust box tunnel of 3962 mm long with 2 HP electric motor with reduction gear boxes to accommodate 4 cans of A-2.5 size at a 6. time. Canning retorts size-810 * 915 mm & 5 mm thick with dia. Thermometer, pressure gauge, safety valve, etc. @ Rs. 49,200 each. 2 0.984 1 1 0.536 0.700 1 0.577 2 1 lakhs) 0.268 0.660

7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

Crates for canning retorts @ Rs. 6600 each Can reformer for reforming flattened can body Hanger with one change part. Add1. change part of the above Flage rectifier Semi automatic can seamer Add1. change part of the above Can end embossing machine Add1. change part for the above Water storage tanks (plastic) capacity 15Kl. Concrete tank lined with tiles size (8 * 8 * 3.5) Steam Boiler (oil fired) capacity 500 kgs./hr. Wide mouthed empty plastic container @ Rs. 150 each-capacity 50 kgs. Each. Cold storage cap-2 tonnes area 1500 cu. Ft. Can tester pneumatically operated with 2 pressure cylinders & water tanks. (a) Miscellaneous equipments such as buckets, cutting, pealing, knives, weighing balance Trays, box streping machine etc. (b) Laboratory equipments such as-weighing balance, dehydrator etc.

8 1 1 1 1 1 1 1 1 1 1 1 100 1 1 L.S.

0.528 0.505 0.538 0.140 0.208 0.850 0.145 1.065 0.180 0.500 0.200 3.000 1.150 1.500 0.450 0.230

L.S.

1.000

20.

Pollution control equipments discharge of water-treatment tank. Total Packaging, forwarding C.S.T. & other charges @ 10% Erection & electrification charges @ 10% Cost of office equipment including almirah office furniture, computers etc. Total

L.S.

0.350 15.264 1.526

1.526

1.000

19.316

3) Pre-Operative expenses 0.750 * Total fixed Investment (i + ii + iii) = 40.066

* WORKING CAPITAL DETAILS *

[PER MONTH] i) Personnel * Administration *

No.

Designation

No.

Salary

Total (Rs. In lakhs)

1 2 3 4 5 6 7 8

Manager Purchase Assistant Salesman Accountant Store keeper/Clerk Computer operator Peon Watchman

1 1 3 1 1 1 1 2

8000 4000 4000 4000 3000 3000 2000 2000

0.08 0.04 0.12 0.04 0.03 0.03 0.02 0.04

Total

0.40

* TECHNICAL *

No.

Designation

No.

Salary

Total (Rs. In

1 2 3 4 5 6 7 8

Plant manager Food Technologist Production Supervision Skilled Workers Foreman Boiler Attendant Unskilled workers Sweeper Total Grand Total (Administration + Technical) (0.40 + 0.52) Peark @ 15% Total (ii) Raw-Material

1 1 1 2 1 1 9 1

8000 7000 4000 3000 4000 3000 2000 2000

lakhs) 0.08 0.07 0.04 0.06 0.04 0.03 0.18 0.02 0.52

0.92 0.138 1.058

No.

Particulars

Qty.

Rate (in Rs)

Amt (Rs. In lakhs) 19.25 0.25 9.00 0.94 0.85 0.15 30.44

1 2 3 4. 5 6

Mushroom A grade Salt, sugar, citric

55 tonnes Acid, L.S. 75,000 6250 L.S. L.S.

35,000 P.t. 12.00 each 15.00 each -

chemicals, preservatives. A-21/2 Can Carton Boxes Cabels, gums, box. Scrapping etc. Boxes, Labels etc Total

(iii)

* Utilities *

No.

Utilities

Amt. (Rs. In lakhs)

1.

Power 30 KW units @ Rs. 3 (30 * 8 *25 * 0.90 * 3)

0.162

2. 3.

Fuel (Furnace Oil) 4000 Ltr @ Rs. 8 Water 500 K. Ltr @ Rs. 1/- K.Ltr. Total or Say

0.320 0.005 0.487 0.50

(iv)

* Other contingent Expenses *

No. 1. 2. 3. 4. 5. 6. 7.

Particulars Postage & Stationary Consumable stores Repair & Maintenance Transport Charges Advertisement & Publicity Insurance, Taxes, Telephone Bills etc. Micellaneous Total

Amt (Rs. In lakhs) 0.1 0.2 0.2 0.14 0.10 0.08 0.03 0.40

* Total recurring expenses is Rs. 32.390 lakhs (per month)

( i + ii + iii + iv ) * (v) *Working Capital for 3 months =Rs. 97.170

* TOTAL CAPITAL INVESTMENT *

No.

Total Capital Investment

Amt (Rs. In lakhs)

(i) (ii)

Fixed capital Working capital (For 3 months)

40.066 97.170

Total

137.236

* SOURCES OF FINANCE *

No. 1. 2.

Particulars Own Capital Loan from bank Total

Contribution 40% 60%

Amt (Rs. In lakhs) 54.89 82.34 137.23

* Interest on Capital * No. Paticulars Rate Amt (Rs. In lakhs) 1. 2. Owned Capital Bank loan from ICICI Total 9% 12% 4.94 9.88 14.82

* Depriciation Details *

No.

Particulars

Amt (Rs. In lakhs)

(a)

Depriciation on machinery & equipment @ 10%.

1.526

(b) (c)

Depriciation on building @ 5% Depriciation on office furniture, fixture etc. @ 20%

0.875 0.200

Total

2.601

* Financial Analysis *
Index

No.

Particular

Pg.No.

1.

Cost of Production

2.

Sales turnover

3.

Fixed cost

1.] * Cost of Production *

No.

Cost of Production

Amt (Rs. In lakhs

1. 2.

Total recurring expenditure (per year) Depreciation on machinery & Equipment @ 10%

388.68 1.526

3. 4.

Depreciation on Building @ 5% Depreciation on office furniture, fixture etc. @ 20%

0.875 0.200

5.

Interest on total Investment @ 14%

19.213

Total

410.494

2.] * Sales turn Over *

No.

Item

Qty.

Rate

Amt (Rs. In lakhs)

1.

Canned Mushrooms A-2

9,00,000

55

495.00

2.

Commission, brokerage & Marketing expenses

10%

49.50

Total

445.50

3] * Fixed Cost *

No. (a) (b) (c) (d) (e) (f) (g) (h)

Fixed Cost Depriciation on machinery & Equipments Depriciation on building Depriciation on office furniture & fixtures. Interest on total Investment Insurance 40% of salary & wages 40% of other contingent expenses Power charges. Total

Amt (Rs. In lakhs) 1.526 0.875 0.200 19.213 0.360 4.416 1.584 0.360 28.534

* Profitability analysis *
Profit is the life blood of any business. As blood is important for like, same profit is important for the survival of any business. * Profitability Ratio * Particular Sales Less : Cost of production [per annum] Earning before interest & Tax Less : Interest on Capital Profit before tax Less : Tax (35%) Profit after Tax Amt 495.000 410.494 84.506 14.82 69.69 24.40 45.29

Profitability

Profit x 100 salts 45.29 x 100 495.00 9.15

* Break even analysis *

Changing business situation have led to changing decision situations. B.E. analysis being a simple but effective tool has been used in cost analysis of single product, multiple products or composite products.

Break even point is the level of activity at which there is neither profit nor loss.

= =

Break even point Fixed cost x 100 Fixed cost + Profit

28.534 x 100 63.54

44.91 % say 45 %

* Computation of ratios *

The term ratio refers to a numerical or quantities relationship between 2 terms or variables. 1) Net Profit Ratio : = Net Profit ( Per year) x 100 Total over (per year) = 35.006 x 100 445.50 = 7.86 %.

2) Rate of Return Ratio: = Net profit (per year) x 100 Total investment = 35.006 x 100 137.236 = 25.51%.

3) Return on fixed assets : = Net profit (per year) x 100 Total fixed assets = 35.006 x 100 40.006 = 87.50 %

* Risk Factors *

Risk is another name of business. However, it is also there is mushroom business. But as we have earlier mentioned that this business has very bright future because it is a 100% Export Orienterd unit.

So, in a canned mushroom business there is some risk in a local market but it is covered by the exporting of canned mushroom out side India.

Therefore, the level of risk is only for some extent. It is not affected the unit at a higher level.

* Benefits for export oriented units *

Some of the benefits for export oriented units are mentioned below:

1) The unit may import free of duty capital goods, rawmaterials, components prototypes, office equipments & consumables for office equipments, material handling equipments etc.

2) An

export

oriented may

unit/export export

processing

zone

[EOU/EPZ] unit

goods manufactured

through an export House/Trading House/Star trading House.

3) Foreign equity upro 100% is permissible in case of EOUs & EPZ units.

4) EOU/EPZ units will be eligible for concessional rent for lease of industrial plot & standard design factory building sheds.

5) EOUs/EPZ units will be exempted from payment of

corporate income tax for a block of 5 yrs. During the 1st eight yrs. Of operations.

6) Net foreign exchange earned by an EOU/EPZ unit can be clabbed, with the net foreign exchange of its parent/associate company in the domestic tariff area for the purpose of according export House, Trading House or star Trading House status later.

* Future Prospects *

The modern world is fast growing. New innovation of yesterday is old for today, it is a past & tomorrow is a present.

The following are the future prospects or future plan of canned mushrooms.

Expansion in existing market & cover the entire world.

Development of various branches all over the world.

To get more profit.

* LIST OF SUPPLIERS *
Address of machinery & Equipments Suppliers.
1. M/S Somani International Corporation,

1510, maker chamber-v, Nariman Point, Mumbai-400021.

2. M/S B.Sen Berry & Company, 65/11, Rohtak Read, Karol Bagh, New Delhi,-110005

3. M/S Narang Corporation, P-25, connaught place, [Below Madras Hotel], New Delhi-1110001

4. M/S Raylans Metal works, Kondivita lane, post box-17426 J.B. nagar, P.O. Andheri(E) Mumbai 400059

* Addresses of raw-materials & Packaging material Suppliers * CANS

1) M/S. Cowel Can ltd., Industrial Area, Barotiwala, dist. Solan (H.P.)

2) M/S Divecha Glass Industries, 249, Bal Rajeshwar Road, Office L.B.S Marg, Mulund (w)

3) M/S Poysha Industries Co. Ltd. Nehru House, 4, Bahadurshah zafar marg, New-Delhi-110002

 CHEMICALS

1) M/S S.B. Mehta & Associates 2-B, Ganga Vihar, 94. Kazi Sayed, st. Mumbai-400003

2) M/S Devendra Cottage Industries

Sector -22-4, Chandigarh.

3) M/S Sesu Trading corporation, R. No.-2, (4th floor), Sai Chambers, 367-369, Narsi Natha Street, Mumbai-400009. * Material Suppliers * Local Market

* CONCLUSION *

Future of quality mushroom is very good. Because now a days people are more conscious about their diet & health.

Mushrooms are full of nutrients, low in calories, high in proteins, vitamins, minerals & a rich source of folic acid.

It is an alternate choice for weight conscious people anaemic patients. It has 4.9% protein content which is more than cow milk, green, vegetable such as beans, etc.

So, mushroom has a very bulky demand not only in a national market but on a International market too.

Govt. should support these kinds of small scale units to serve the public with quantitative mushrooms.