MAGIC MUSHROOM

BAKERS
Presents

Detailed Project Report

On
Mushroom Cake Processing Unit
Submitted to:
■ Department of Food Science &
Technology College of Agriculture
Govind Ballabh Pant University of
Agriculture & Technology
Submitted By:
■ Vanshika Gupta (I’d.: 52968)
■ Toran Singh (I’d.: 52999)
■ ELP Food Technology (AFS- 491)
Table of contents:
S.No. Topic
1. Introduction
2. Details of the company
3. Problem statement
4. Executive Summary
5. Partnership
6. Project brief
7. Product
8. Project Plan
9. Connectivity with nearby districts
10. Tie-ups
11. Project Schedule
12. Processing Flowchart
13. Benefits of the product
14. Financials
15. Means of finance

16. Marketing

17. Marketing Strategies

18. Government Approvals

19. Innovation Tried

Introduction:
■ The company is currently conducting a feasibility study of starting a plant and
manufacturing unit to procure and process the mushroom based products or
delight.
■ There are many other growing segments of food industry. The entrepreneurs shall
study to sector thoroughly before investing in food industry. The size and outlay of
the project depends upon the market size, type of technology, and knowledge about
the product.
■ The entrepreneurs may decide upon the type of products based on raw material
availability and also market demand in project area.
Details of the company:
■ Name : Magic Mushroom Bakers
■ Industry: Food processing
■ Registered office: Plot no. 11, Near Suzuki showroom, Gaujajali west, Bareilly Road,
Haldwani, Nainital, Uttarakhand, 263139
Problem Statement
■ To make people aware about the importance and health benefits of mushroom and
mushroom based products.
■ To commercialize the mushroom based products among people in small cities.
■ Due to lack of knowledge of mushroom and its dislikes among people specially
youths ,this company tries to improve their perspective for the same.

Executive summary
■ Magic mushroom Bakers is an exciting company in the field of bakery food industry,
which is mainly focusing on providing healthy and tasty cakes to the customers
■ Due to increasing health consensus in the customers has led to the search of
something healthy and vitamin enriched sweet and snacks which are comparatively
healthier and tastier.
■ On behalf of this knowledge, Local Delights Is trying to commercialize mushroom
based cakes among the local people of Uttrakhand .
■ So here it is reported the detailed progress of the industry, as how it is going to
operate and function in near future if allowed and permitted.

Partnership:
■ New entrepreneurs may start their business as an individual, partnership firm, or a
joint stock company.
■ Individual & proprietary concern should have their PAN number and should
preferably have a bank account. Partnership firms should execute a partnership
deed as per Indian Partnership Act 1932 on a Non Judicial Stamp Paper as per the
Stamp Act of the State Government and register the partnership firm with the
Ministry of Corporate affairs.
Project Brief
■ The proposed project is to be located at Plot no. 11, Near Suzuki showroom, Gaujajali west, Bareilly Road,
Haldwani, Nainital, Uttarakhand. The Plant is situated at an ideal location with all necessary
infrastructure facilities to start a manufacturing plant.
■ The nearby towns are Kathgodam, Rudrpur and Lalkuan, Road and rail transportation to Dehradun,
Rishikesh, Bareilly and Delhi, ensuring good connectivity all around.

The Plant’s features :

1. The plant’s capacity is planned at 12,000 kg p.a. installed with technologically advanced and state of
the art machinery.
2. The factory will house a modern; state of the art laboratory to test the raw materials and finished
products; with modern equipments.
3. The plant will also house a captive diesel generator facility and in-house water supply, to ensure smooth
operations.
4. The plant also proposes to obtain ISO & allied Quality Assurance Certifications after commencement of
its operations.
5. The company plans to house the team of highly skilled process workers and management specialists,
who will prove best to the Industry.
Product:
■ The company intends to produce healthy and tasty cake enriched with the goodness
of Vitamin D.
■ Mushroom is highly nutritious yet underrated food amongst people. By preparing
mushroom riched delicacies, we are trying to enhance the nutrition status of people
without compromising with the taste.
■ The product which our industry will manufacture is:
“MUSHROOM CAKE”
Project plan:
■ The Company is setting up a processing and manufacturing plant measuring around
400 sq. meters area, in Nainital district of Uttarakhand.
Connectivity with near by district
Tie -ups
■ The company has entered into agreement with a well-known sweet shop, Standard
Sweets and Brew and Bite Cafe , near by the location.
■ The shops will provide the supply and sale of a product at optimal cost for the mass
sale in the local city. Our own production centre will also be an outlet for the sale of
the product to the interested buyers.
Project Schedule:
■ The company will start the construction of factory shed from the month of August
and start procurement in food plant and machinery from the month of August as
well.
■ The workers will start the production from September -October depending upon the
requirements.
■ The company will draw the working capital limit and will start the initial production
for which the payment will have to be made in advance for which there is need of
working capital.
Particulars July August September October November

Incorporation of
company

Approvals

Fund Raising

Construction of
Factory shed

Plant and
machinery
procurement
Production Starts

Packaging and
sale
Processing Flowchart:
Mixing of Addition of
ingredients shitake
(Maida, powedered Addition of
mushroom
sugar, curd, milk baking powder
cream, olive powder
oil,essence) (@ 10-15%)

Cooling and Greasing and

Baking
depanning Panning
Packaging Sales
Some Benefits Of This Product :
■ Cake are used in every occasion being small or large ,so our company is focusing on
enhancing the nutritional quality of this product.
■ Mushroom are rich in ergosterol which is the precursor of vitamin D, so it is the good
source of vitamin D.
■ Mushroom is also a rich source of potassium.
■ So our company by using mushroom powder in cakes is working upon enhancing the
mushroom based ready to eat products in the food industry.
Financials:
Cost of project: (All numerical values are in lakhs)

Particulars Amount Own Bank

contribution Finance
Land and - Self owned -
building
Plant and 6.80 1.70 5.10
machinery
Furnitures and 1.00 0.25 0.75
other assets
Working capital 3.33 0.83 2.50

Total 11.13 2.78 8.35

Balance Sheet:
Particulars 1 st Year 2 nd year 3 rd year 4 th year 5 th year
Liabilities
Capital opening 3.43 4.71 6.09 7.54
balance
Add:- Own Capital 2.78
Add:- Retained profit 1.65 2.37 3.18 4.15 4.71
Less:- Drawings 1.00 1.10 1.80 2.70 3.20
Closing Balance 3.43 4.71 6.09 7.54 9.05

Term loan 5.20 3.90 2.60 1.30

Working Capital limit 2.50 2.50 2.50 2.50 2.50
Sundry Creditors 0.59 0.66 0.74 0.83 0.92
Provision and other 0.20 0.24 0.29 0.35 0.41
liabilities
Total 11.92 12.01 12.22 12.51 12.88
Assets
Fixed Assets 7.80 7.80 7.80 7.80 7.80
(Gross)
Depreciation 1.12 2.08 2.89 3.59 4.19
Net Fixed 6.68 5.72 4.91 4.21 3.61
Assets

Current Assets
Sundry 3.33 3.78 4.23 4.72 5.25
Debtors
Stock in hand 0.66 0.74 0.83 0.92 1.02
Cash and 1.25 1.77 2.25 2.67 3.01
Bank
Total 11.92 12.01 12.22 12.51 12.88
Profitability Statement :
Particulars 1 st Year 2 nd Year 3 rd Year 4 th Year 5 th Year
Sales 33.26 37.77 42.31 47.20 52.46
Cost of sales
Raw material 17.64 19.89 22.27 24.89 27.65
Electricity expenses 1.01 1.21 1.45 1.60 1.76
Depreciation 1.12 0.96 0.82 0.70 0.60
Wages 4.56 5.02 5.52 6.07 6.68
Repair 0.50 0.76 0.85 0.94 1.00
Total cost of sales 24.58 27.80 30.87 34.16 37.64
Gross Profit 8.69 9.98 11.44 13.03 14.82
Other Expenses (interest 7.04 7.60 8.25 8.88 9.59
to loan, Salary to staff,
rent)

Net Profit 1.65 2.37 3.18 4.15 4.71

Production of Cake

Production Capacity Kilograms (kg)

1st year 70% 8,400

2nd year 75% 9,000

3rd year 80% 9,600

4th year 85% 10,200

5th year 90% 10,800

Power, Salary & Wages Calculation:
Utility Charges:

Particulars Value Description

Power connection 6 KWH

Consumption per day 48 Units

Consumption per month 1200 Units

Power bill per month 12000 Rupees

Break up of Labour Charges
Particulars Wages per month No. of Employees Total Salary
(in Rupees) (in Rupees)
Skilled 11000 2 22000
Unskilled 8000 2 16000
Total Salary 456000

Staff Salary
Particulars Salary per month No. of Employees Total Salary
accountant 15000 1 15000
Administration 12000 2 24000
staff
Total salary per 39000
month
Total annual staff 468000
charges
Depreciation:

Note: Here machinery and plant are depreciated at the rate of 15% and furniture at
10%.
Particulars Fixed cost Depreciated Depreciated Depreciated Depreciated Depreciated
cost cost cost cost cost
(1 st year) (2 nd year) (3 rd year) (4 th year) (5 th year)
Machinery 6.80 5.78 4.91 4.18 3.55 3.02
and plant

Furniture 1.00 0.90 0.81 0.73 0.66 0.59

Break Even Point Analysis:
Year I II III IV V
Total Sales 33.51 37.80 42.34 47.23 52.49
Variable 25.06 28.32 31.71 35.26 39
Expenditure
Total Fixed 6.81 7.11 7.45 7.82 8.26
Expenses
Break even 26.98 28.34 29.67 30.85 32.14
sales

Note: All the numerical values represent amount in Lakhs.

Means of Finance:
Financing to food processing falls under priority sector lending. The loans to units
meeting the criteria of MSME. Such units can be financed by any Scheduled
Commercial Banks, Regional Rural Banks, and Cooperative Banks. •
■ Margin Money: The margin money varies from minimum 10% to 25% of the total
project cost.
■ Bank Loans: It is compulsory to take bank loans to avail various subsidy schemes of
government. The bank loan taken by me for my Industry is of ₹8.35 Lakhs (Eight
Lakhs thirty five thousands) at an interest rate of 10.70% per annum. and with a
payback period of 5 years. We kept our land papers as security in bank.
■ Savings: We also invested the amount of money we’ve saved. We used Rs. 2.78
Lakhs from our side.
Marketing:
■ Marketing of Mushroom cakes is the biggest challenge. There are several popular
brands in the market which acts as an entry barrier for new food products. Therefore
especial emphasis need to be given in marketing and branding of the product.
■ The units shall also allocate remarkable budget for promotion and advertisement.
■ Indians are fond of trying new types of cuisines. Apart from households, restaurant,
roadside shops, hostels etc. are bulk consumers of the product. New comers need
to work on competitive pricing and hence the price decided by us is equivalent to
many other cakes and is decided ₹400/kg, the amount one can easily pay for it.
Marketing Strategies:
■ Designed an appealing sticker for packaging which will attract buyers and will
represent our culture.
■ Packaging in transparent air tight containers which will allow consumers to see the
product from outside.
■ The product will be available in many shops/ retailer’s shops from where one can
easily buy.
■ 10% discount on pre booked bulk orders with order more than 2 kg at once which
consumers buy for any event or ceremonies.
Government Approvals:

■ NOC with local bodies like Nagar-Palika / Municipal Corporation.

■ Consent to establish from State Pollution Control Board.
■ Approval for layout plan for construction.
■ Registration with District Industry Centre as Small/Medium Enterprise.
■ License from FSSAI.
■ Permission to commence production from State Pollution Control Board.
■ Certification of the trade mark or logo.
Innovation tried:
■ Incorporation of Mushroom in cakes.

Advantages:
1. Mushroom adds on to the qualitative value of cake by supplying Vitamin D and
potassium as well as fibers to the consumers.
2. It also enhances taste to mushroom lovers.
3. It encourages local mushroom growers as well.
THANK YOU