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Production Capacity	:	Qty. 500 MT / annum Value : Rs. . 48,00,000
Uploaded on	:	April 2007

Introduction

The traditional cottage industry of processing of cereals and pulses occupied a prominent place amongst the industries for processing a agriculture produce. Compared to hullar, the hand pounding of paddy gives higher percentage of recovery of rice, higher nutritional value and provides wholesome food. The conversion of paddy to rice, wheat to flour, processing of pulses and their various products like papad, wadi, and different type of spices etc. have the capacity of of generating large scale opportunity in the rural area especially for women.

Basis and Presumptions

i) The basis for calculation of production capacity has been taken on single shift basis and three hundred days.

ii) The salaries and wages, cost of raw materials, utilities, rents, etc. are base on the prevailing rates in North India. These cost factors may vary with time and location.

iv) Interest on term loan and working capital loan has been taken at the rate of 12%. This rate would essentially depend on the policy of the financial institutions

v) The cost of machinery and equipments refer to a particular make/model and prices are approximate.

vi) The break-even point percentage indicated is of full capacity utilization.

vii) The project preparation cost etc. whenever required could be considered under pre-operative expenses.

Implementation Schedule

The major activities in the implementation of the project has been listed and the average time for implementation of the project is estimated at 12 months:

Sl. No.	Name of Activity	Period in Months (Estimated)
1	Preparation of project report	0.5
2	Registration and other formalities	1
3	Sanction of loan by financial institutions	1
4	Plant and Machinery: a) Placement of orders	1
	b) Procurement	2
	c) Power connection/ Electrification	1
	d) Installation/Erection of machinery/Test Equipment	0.5

Notes
1. Many of the above activities shall be initiated concurrently.

Technical Aspects
Process of Manufacture

It is well known that hullers which have proliferated in the country side for processing of paddy wastes 4% to 6% as compared to when it is hand pounded. In hullers the husk and bran get mixed up and renders bran unfit for cattle consumption or further processing. The percentage broken rice is also high in hullers which give more polish and adversely effect the nutritional ingredients of rice. To tackle this problem KVIC developed decentralized paddy dehusker and polisher which can ensure yield of rice recoverfy, less brken rice and availability of bran and husk separately.

Production Capacity ( per annum)

Quantity	Value (Rs.)
500 MT/annum	48,00,000
Motive Power	5 KVA

Financial Aspects
A. Fixed Capital

(i) Land and Building
Built up area	75 Sq. mtrs.
Working shed	50 Sq. mtrs.
Rent in a ( village)	Rs. 3,000 (per month)

(ii) Machinery and Testing Equipments

Sl. No.	Description	Ind./ Imp.	Qty.	Total (Rs.)
1.	All Machinery and equipments	Ind.	Lump Sum	400,000
2.	Pre-operative expenses			25,000
	Total			4,25,000
	Total fixed cost			4,25,000

B. Working Capital (per month)

(i) Staff and Labour

Sl.No.	Designation	No.	Salary (Rs.)	Total (Rs.)
1	Staff and workers	13	L.S	30,000
	Total			30,000

(ii) Raw Materials (per month)

Sl. No.	Description	Qty.	Value (Rs.)
	Paddy @ Rs. 7 per Kg	41.66 MT	2,92,000

(iii) Utilities (per month)	(Rs.)
Power and water (Lump Sum)	3,000
Total	3,000

(iv) Other Contingent Expenses (per month)	(Rs.)
Rent	3,000
Postage and Stationery	1,000
Telephone and communication	3,000
Consumable stores	1,000
Repairs and Maintenance	1000
Transport charges	10,000
Advertisement and Publicity	5,000
Sales expenses	4,000
Misc. expenses	3,000
Total	31,000

(v) Total Recurring Expenditure per month = (i + ii + iii + iv)

Rs. 30,000 + Rs.292,000 + Rs. 3,000 + Rs. 31,000

= Rs. 3,56,000

C. Total Capital Investment

(i) Fixed capital	Rs. 4,25,000
(ii) Working capital for three months	Rs. 10,59,000
Total	Rs. 14,84,000

Financial Analysis

(1) Cost of Production (per year)	(Rs.)
Total recurring expenditure	42,36,000
Depreciation on machinery and equipment @ 10%	42,000
Interest on total investment @ 12%	1,78,000
Total	44,56,000

(2) Turnover (per annum)

Item	Qty.	Rate (Rs.)	Total (Rs.)
Rice and bran	500	Rs. 9.6 per Kg	48,00,000

(3) Net Profit (per year)(Before Tax)

Rs. 48,00,000 – Rs. 44,56,000

Rs. 3,44,000

(4) Net Profit Ratio

	Net Profit per year x 100
=	-------------------------------
	Turnover per year

	3,44,000 x 100
=	--------------------- 48,00,000

	7.17%

(5) Rate of Return

	Net Profit per year x 100
=	--------------------------------
	Total Investment

	3,44,000 x 100
=	---------------------------
	14,84,000

=	23.18%

(6) Break-even Point

Fixed Cost (per annum)	(Rs.)
Depreciation on machinery and equipment	42,000
Rent	36,000
Interest on total investment	1,78,000
40% of Salary and wages	1,44,000
40% of other contingent expenses (excluding rent)	1,34,000
Total	5,34,000

B.E.P.

	Fixed Cost × 100
=	-------------------------------
	Fixed Cost + Net Profit

	5,34,000 × 100
=	----------------------
	5,34,000 + 3,44,000

=	60.8%