Pre-Feasibility Study

MEDICAL STORE

Small and Medium Enterprise Development Authority

Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
6 Floor LDA Plaza Egerton Road, Lahore
th

Tel 111 111 456, Fax: 6304926-7 Website www.smeda.org.pk

[email protected]
REGIONAL OFFICE
PUNJAB

8th Floor LDA Plaza Egerton

Road, Lahore
Tel 111 111 456, Fax:
6304926-7 Website
www.smeda.org.pk
[email protected]

REGIONAL OFFICE
BALOCHISTAN

REGIONAL OFFICE
SINDH

REGIONAL OFFICE

5TH Floor, Bahria

Ground Floor

Bungalow No. 15-A

Complex II, M.T. Khan Road,

Karachi.

State Life Building

Chaman Housing Scheme

Tel: (021) 111-111-456

Fax: (021) 5610572
[email protected]

NWFP

The Mall, Peshawar.

Airport Road, Quetta.

Tel: (091) 9213046-47

Tel: (081) 831623, 831702

Fax: (091) 286908

Fax: (081) 831922

[email protected]

[email protected]

January, 2007

Pre-Feasibility Study

Medical Store

DISCLAIMER
The purpose and scope of this information memorandum is to introduce the subject
matter and provide a general idea and information on the said area. All the material
included in this document is based on data/information gathered from various sources and
is based on certain assumptions. Although, due care and diligence has been taken to
compile this document, the contained information may vary due to any change in any of
the concerned factors, and the actual results may differ substantially from the presented
information. SMEDA does not assume any liability for any financial or other loss
resulting from this memorandum in consequence of undertaking this activity. The
prospective user of this memorandum is encouraged to carry out additional diligence and
gather any information he/she feels necessary for making an informed decision.
For more information on services offered by SMEDA, please contact our website:
www.smeda.org.pk

DOCUMENT CONTROL
Document No.

PREF-82

Revision

Prepared by

SMEDA-Punjab

Issue Date

August, 2004

Revision Date

January , 2007

Issued by

Library Officer

PREF-82/January 2007/Rev3

Pre-Feasibility Study

Medical Store

INTRODUCTION TO SMEDA.................................................................................................... 4

PURPOSE OF THE DOCUMENT ............................................................................................... 4

CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT..................... 5

PROJECT PROFILE.................................................................................................................... 5
4.1
OPPORTUNITY RATIONALE ...................................................................................................... 5
4.2
PROJECT BRIEF ....................................................................................................................... 5
4.3
MARKET ENTRY TIMING ......................................................................................................... 6
4.4
PROPOSED BUSINESS LEGAL STATUS ....................................................................................... 6
4.5
PROJECT CAPACITY AND RATIONALE ....................................................................................... 6
4.6
PROJECT INVESTMENT ............................................................................................................. 6
4.7
PROPOSED PRODUCT MIX ........................................................................................................ 7
4.8
PROPOSED LOCATION .............................................................................................................. 7
4.9
KEY SUCCESS FACTORS/PRACTICAL TIPS FOR SUCCESS ............................................................ 8
4.10
STRATEGIC RECOMMENDATIONS ............................................................................................. 8
4.10.1
Product Range counts a lot............................................................................................ 8
4.10.2
Customer Service .......................................................................................................... 8
4.10.3
Location of the outlet..................................................................................................... 8

SECTOR & INDUSTRY ANALYSIS........................................................................................... 8

5.1
SECTOR CHARACTERISTICS ..................................................................................................... 8
5.2
SUB SECTOR INFORMATION ..................................................................................................... 9
The Pharma Industry has experienced major growth in recent years. As per an estimate the Pharma
industry is growing at 18 % annually. The Pakistans harsh climate provides more favorable business
opportunities in pharmaceutical business.......................................................................................... 9
5.3
LEGAL ISSUES REGARDING INDUSTRY ..................................................................................... 9
5.4
MAJOR PLAYERS ..................................................................................................................... 9

MARKET INFORMATION ......................................................................................................... 9

6.1
6.2

MARKET POTENTIAL ............................................................................................................... 9

TARGET CUSTOMERS ............................................................................................................ 10

PRODUCT................................................................................................................................... 10
7.1
MAJOR SUPPLIERS ................................................................................................................. 10
7.1.1
Products of Multinational Companies .............................................................................. 10
7.1.2
Products of National Companies...................................................................................... 11
7.1.3
Herbal Products .............................................................................................................. 11
7.1.4
Food Supplements............................................................................................................ 11
7.1.5
Eatables .......................................................................................................................... 11
7.1.6
Toiletries ......................................................................................................................... 11
7.1.7
Sanitation Products.......................................................................................................... 11
7.1.8
Prepaid Cards ................................................................................................................. 11
7.2
PROFIT MARGINS .................................................................................................................. 11
7.3
OTHER INCOME ..................................................................................................................... 12

LAND & BUILDING REQUIREMENT .................................................................................... 12

8.1
8.2

LAND REQUIREMENT ............................................................................................................ 12

UTILITIES REQUIREMENT ...................................................................................................... 12

OFFICE EQUIPMENT............................................................................................................... 12

10

HUMAN RESOURCE REQUIREMENT................................................................................... 13

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Medical Store

11

PROJECT COSTS ...................................................................................................................... 14

12

FINANCIAL ANALYSIS............................................................................................................ 15
12.1
12.2
12.3
12.4

13

PROJECTED INCOME STATEMENT ........................................................................................... 15

PROJECTED BALANCE SHEET ................................................................................................. 16
PROJECTED CASH FLOW STATEMENT ..................................................................................... 17
REVENUE CALCULATION ....................................................................................................... 18

KEY ASSUMPTIONS................................................................................................................. 19

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Medical Store

INTRODUCTION TO SMEDA

The Small and Medium Enterprise Development Authority (SMEDA) was established
with the objective to provide fresh impetus to the economy through the launch of an
aggressive SME support program.
Since its inception in October 1998, SMEDA had adopted a sectoral SME development
approach. A few priority sectors were selected on the criterion of SME presence. In depth
research was conducted and comprehensive development plans were formulated after
identification of impediments and retardants. The all-encompassing sectoral development
strategy involved recommending changes in the regulatory environment by taking into
consideration other important aspects including finance, marketing, technology and
human resource development.
SMEDA has so far successfully formulated strategies for sectors including, fruits and
vegetables, marble and granite, gems and jewelry, marine fisheries, leather and footwear,
textiles, surgical instruments, transport and dairy. Whereas the task of SME development
at a broader scale still requires more coverage and enhanced reach in terms of SMEDAs
areas of operation.
Along with the sectoral focus a broad spectrum of business development services is also
offered to the SMEs by SMEDA. These services include identification of viable business
opportunities for potential SME investors. In order to facilitate these investors, SMEDA
provides business guidance through its help desk services as well as development of
project specific documents. These documents consist of information required to make
well-researched investment decisions. Pre-feasibility studies and business plan
development are some of the services provided to enhance the capacity of individual
SMEs to exploit viable business opportunities in a better way.
This document is in the continuation of this effort to enable potential investors to make
well-informed investment decisions.

PURPOSE OF THE DOCUMENT

The objective of the pre-feasibility study is primarily to facilitate potential entrepreneurs

in project identification for investment. The project pre-feasibility may form the basis of
an important investment decision and in order to serve this objective, the document/study
covers various aspects of project concept development, start-up, marketing, finance and
business management. The document also provides sectoral information, brief on
government policies and international scenario, which have some bearing on the project
itself.
This particular pre-feasibility is regarding Medical Store, which comes under
Pharmaceutical sector. Before studying the whole document one must consider following
critical aspects, which forms the basis of any investment decision.

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Medical Store

CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT

Before making any investment decision, it is advisable to evaluate the associated risk
factors by taking into consideration certain key elements. For starting a medical store
critical factors that should be taken into consideration before launching the project are
listed below:

Number of customers to the Medical Store will determine the financial success of the
project. The entrepreneur should analyze the minimum percentage of population that
it will have to mobilize out of the total population to achieve a steady flow of
customers. In order to do this, the entrepreneur should analyze existing competing
Medical Store businesses in the target vicinity.

Looking at the nature of the products offered on a medical store, it is advised that the
store should be established in a city that has a population to cover the sales concept of
the project.

Another aspect linked with the revenue generating capacity of the project is the
spending pattern of the potential customers in a specific city. Average per capita
income in Pakistan is USD 830/yr and increasing concern of people about their health
and fitness show that now people are consuming more medicines. This factor is very
helpful and it is observed in recent days that international multinational
pharmaceutical companies are looking at our country as potential market.

Selection of location for sales outlet is an important factor in the successful running
of any medical store. Areas in the vicinity of a hospital/clinic or the developing areas
are most suitable locations.

Availability of complete product line is another important factor. In addition to this,

provision of other general items, for the customers, also plays a major role in
increasing sales of a medical store.

4
4. 1

PROJECT PROFILE
Opportunity Rationale

Pakistan is a very populous country. Pakistans population has soared up to 149.50

million, and at least one-third of it is living below the poverty level. Majority of
population has no access to clean water to drink or proper sanitation facilities. This poses
serious threats to health of masses. Moreover the variable and harsh climate of Pakistan
causes major viral diseases through out the year. This creates a great demand for
Pharmaceutical Products in Pakistan. As the major source of retail sales of Pharma
Products is through medical stores, a big investment opportunity exists in this sector.
4. 2

Project Brief

The proposed project is a well built medical store with all of the product range in stock
for sales. The proposed Size of the medical store should be around 500 sq. feet, with
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Medical Store

electricity and 2 telephone lines. The proposed project is based on well-established

Pharmaceutical Retail Chains of Pakistan.
4. 3

Market Entry Timing

As such there is no specific time required for the entry time in pharmaceutical sector. As
the need is increasing day by day due to the increase in population and diseases,
investment in this sector can be made any time in the year.
4. 4

Proposed Business Legal Status

A medical store can be started as a sole proprietorship or a partnership and even it can be
registered under company law with Securities and Exchange Commission of Pakistan.
Although selection totally depends upon the choice of the entrepreneur but this financial
feasibility is based on a Sole Proprietorship. For getting information on the formation of
type of firm/company, please visit the Website:
www.saarcnet.org/newsaarcnet/govtpolicies/Pakistan/settingbusiness.html.
http://www.secp.gov.pk/Guides/PromotersGuide.pdf
Project Capacity and Rationale

4. 5

The product range offered on a Medical Store is blend of both multinational and national
companies products and General Products (Food Supplements, Toiletries, Shampoo,
Soaps, Diapers (sanitary napkins), Internet Cards, Payphone Cards and Cellular Prepaid
Cards). The proposed medical store will remain open for 24 hours (3 shifts). It is
recommended to start with one retail outlet and expand the operation by one outlet after
every 3 years.
4. 6

Project Investment

The total cost of the project is around Rs. 4.47 million.

Table 4-1

Project Costs

Capital Investment
Working Capital Requirement
Total Investment

Rs. 2,939,900
Rs. 1,536,124
Rs. 4,476,024

The proposed pre-feasibility is based on the assumption of 50% debt and 50% equity.
However this composition of debt and equity can be changed as per the requirement of
the investor.

Table 4-2

Project Financing

Debt
PREF-82/January 2007/Rev3

50%
6

2,238,012

Pre-Feasibility Study

Medical Store

Equity
Total project Investment
Table 4-3

50%

Viability

IRR
NPV @25%
Pay Back Period (year)
4. 7

2,238,012
Rs. 3,918,224

%
Rs.
Yrs.

73.22
23,892,003
0.70

Proposed Product Mix

The proposed medical store will be offering a blend of different products. Percentage
quantity of each item offered on the store is based on survey of distribution companies.
Following is the list of products, which are to be offered on medical store.
Table 4-4

Product Mix

Product Category
Products of Multinational Companies
Products of National Companies
Herbal Products
Food Supplements
Eatables
Toiletries
Sanitation Products
Pre Paid Cards
4. 8

Percentage In Total Sales

39.1
44.1
4.2
4.2
3.3
1.7
1.7
1.7

Proposed Location

A medical store should be easily accessible and should have considerable population
concentration. Considering the spread of new well developed residential areas some of
the suitable locations in Lahore are:

Main Boulevard Allama Iqbal Town

Near Akbar Chowk Faisal Town
Johar Town Near Doctors Hospital
DHA
EME Colony
Tech Society
Jail Road
Mughal Pura
Chowk Chauburji
Or any locations near any new hospital or emerging clinics.

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Medical Store

Key Success Factors/Practical Tips for Success

4. 9

Some of the Key Success factors that will determine the success of this project include:

Availability of regular medicine supplies.

A well trained Pharmacist
Availability of complete product range
Reasonable and competitive prices.
Inventory control to avoid any pilferage.

4. 10

Strategic Recommendations

4.10.1 Product Range counts a lot

Variety and availability are the key factors in retail business. As far as the Pharma
business is concerned, this is the most crucial factor. Almost all major manufacturers of
pharmaceutical products offer same drugs with different names (Company Names). So
availability of all major brands is crucial.
4.10.2 Customer Service
Outlet must have a proper temperature and proper outlook to attract the customers. If we
take a look at major players in Pharma retail business, like Fazal Dins, Zakas Pharmacy,
Clinix Plus, all of them have well-organized outlets all around the city. Not only the
outlets for the proposed medical store should be well organized, also the service provided
to the customers should be very quick and efficient.
4.10.3 Location of the outlet
The investment in better location pays in the long run. The Pharma retails business is
highly dependent upon the easy access for the buyers. This includes all areas near any
major hospital or popular clinics.

5
5. 1

SECTOR & INDUSTRY ANALYSIS

Sector Characteristics

The review of Pakistani pharmaceutical market shows that there are around 450
companies, which are registered with the Ministry of Health. Out of some 350
manufacturing units operating in the country include dozens of multinationals.
Multinational pharmaceutical companies have played a vital role to provide the base for
the growth of the pharmaceutical industry since the emergence of Pakistan. They have
been enjoying the bulk of the business and are still enjoying after so many years, though
their collective market share has dropped significantly during last 18 years. In 1985, the
MNCs enjoyed 65 per cent of the market share while the national companies had 35 per
cent of it. The national pharmaceutical companies have improved their market share by
an average of 1.2 per cent every year. This percentage share increased up to a level of
53% in the year 2000 and this 18 per cent gain has come at the cost of MNCs whose
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Medical Store

collective share has dropped by an equal percentage to 47 per cent during the same
period. Thus in 2000, the share of national companies stood at 53 per cent, 6 per cent
more than that of the MNCs1.
5. 2

Sub sector Information

The Pharma Industry has experienced major growth in recent years. As per an estimate
the Pharma industry is growing at 18 % annually. The Pakistans harsh climate provides
more favorable business opportunities in pharmaceutical business.
5. 3

Legal Issues Regarding Industry

The medical store must be registered under Drugs Act 1976 with respective District
Health Officer (DHO). The registration fee for obtaining license is Rs. 1,200/- and license
will be renewed after every 2 years. The office of Executive Director Health is located at
24-Cooper Road, Lahore. A form is duly filled and submitted along with all the required
documents. The said form is available at the same office. After that a physical survey is
conducted by the health department and only after that license is issued.
Purchase and sale of drugs of narcotics and steroid nature will be maintained in the stock
register. All the purchase invoices and stock register will be kept for 5 years.
5. 4

Major Players

The pharmaceutical industry is growing in Pakistan day by day. Out of the national and
multinational companies operating in Pakistan the major players in this sector are:
Table 5-1

Major Players

Name of the Company

Fazal Din & Sons (Pvt.) Ltd.
Fazal Din Pharma Plus
Zaka Pharmacy
Clinix

6
6. 1

No. of retail stores in Lahore

4
9
11
6

MARKET INFORMATION
Market Potential2

The review of Pakistani pharmaceutical market shows that there are around 450
companies which are registered with the Ministry of Health, some 350 manufacturing

http://www.piribo.com/publications/country/asia_pacific/pharmaceutical_market_pakistan.html

Pakistan Economist Apr 2004

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Medical Store

units operating in the country including dozens of multinationals. Healthcare in Pakistan

is still in the early stages of development. Widespread poverty and a weak health system
underlie the poor health status of the population. Government funding continues to be
minimal, equal to around 3% of GDP and achieves little more than maintaining the status
quo, while the problems of poor nutrition and sanitation are compounded by Pakistan's
large and fast growing population. However as the economy improves, the level of
spending may well begin to rise. Other issues at the heart of the problem include the
continuing prevalence of communicable diseases, low health manpower levels and the
under- utilization of primary health facilities.
The Pakistani pharmaceutical market remains beset with difficulties. Strict government
control over pricing has made many drugs uneconomical, with the result that they either
become available only on the black market at inflated prices, or disappear completely. In
this environment, manufacturers, both local and foreign-owned, have proved unable to
generate the profits needed for capital investment. This is not helped by a regulatory
system best described as rudimentary. There is virtually no public drug reimbursement or
IP protection; patent law was officially tightened in December 2000, although the
effectiveness of this has been questioned. In 2002, further changes were made, making
Pakistan's IP laws even weaker. The appointment of drug inspection teams to investigate
the manufacture and sale of 'fake' drugs has met with disappointing results so far, largely
due to a lack of resources and bureaucratic complications.
Drug prices are officially controlled, although the government lacks the capacity to
enforce its policies in this area. Some price rises have been allowed since 2000, but the
current government shows little sign of enacting any serious reform of the pharmaceutical
sector, preferring to allege profiteering on the part of the pharmaceutical industry. New
legislation permitting imports of Indian-made drugs was introduced in June 2005,
although this has yet to be capitalized upon in any significant way and is unlikely to be in
the near future.
6. 2

Target Customers

The major target market for the facility consists of residential areas in the vicinity of the
medical store.

PRODUCT

The proposed medical store will be offering a blend of different pharmaceuticals.

Alongwith pharmaceutical products, it will also be providing approximately 33% general
items. These general items include herbal products, eatables, food supplements and
toiletries.
7. 1

Major suppliers

7.1.1 Products of Multinational Companies

Abbott, GSK, Aventis, Novartis, Pfizer, Wythe, ICI, Squib, SKB, Schering, Lilly, Rackitt
& Benckiser, BD
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Medical Store

7.1.2 Products of National Companies

Sami, Hilton, Highmount, Schazoo, Eferoze, Reko, Atco, Nabi Qasim, Highnoon,
Woodwards
7.1.3 Herbal Products
Hamdard, Qurshi, Ajmal
7.1.4 Food Supplements
Nestle Cereals, Nido, Maggi, Slim up, Set point diet
7.1.5 Eatables
Cadburys, Union, Mitchells, Coca Cola, Pepsi, Nestle
7.1.6 Toiletries
Rose Petal, Flying, Lever Bros. Etc.
7.1.7 Sanitation Products
Pampers, Always
7.1.8 Prepaid Cards
Jazz, Instaone, UFone, Tango, PTCL, Flash, Rabta, WOL, CyberNet, Beconet, Hello
7. 2

Profit Margins

The sales prices charged for each item would be competitive and will only be earning a
certain percentage of revenue. Percentage margin charged on each type of product is as
under:

Table 7-1

Profit Margins

Item
Margin on Multinational Sales
Margin on National Sales
Margin on Herbal Products
Margin on Food Supplements
Margin on Eatables
Margin on Toiletries
Margin on Sanitation products
Margin on Mobile Cards
Margin on Calling Cards
Margin on Net Cards
PREF-82/January 2007/Rev3

Profit Margin
10%
15%
30%
50%
10%
10%
10%
3.5%
5%
20%
11

Pre-Feasibility Study

Medical Store

Total amount of sales is based on survey and observation. Total sales assumed for the
first year are as under:
Table 7-2

Estimated Sales3

Product Category
Expected Sales Amount (Rs.)
Products of Multinational Companies
10,998,000
Products of National Companies
12,402,000
Herbal Products
1,440,000
Food Supplements
1,260,000
Eatables
1,080,000
Toiletries
540,000
Sanitation Products
540,000
Pre Paid Cards
1,116,000
Total sales for the first year
29,376,000
Above mentioned sales are assumed for the first year on the basis of survey. Annual
growth rate in sales is taken as 10%.
7. 3

Other Income

Other income includes revenues from diabetes tests, blood pressure checking and any sort
of intra muscular injections. Such income is taken as 1% of the total annual revenues.

8
8. 1

LAND & BUILDING REQUIREMENT

Land Requirement

Approximately 500-sq. ft. will be required for a medical store. It is recommended that the
area should be acquired for rent. Rent cost for the proposed areas will be ranging between
Rs.80,000 to Rs.100,000. Rent cost incorporated for financial analysis is Rs.100,000.
Advance rent of six months is also to be paid.
8. 2

Utilities Requirement

Electricity
Telephone

OFFICE EQUIPMENT

The following equipment and furniture will be required for the offices

details given in financial analysis(Revenue Calculation)

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Pre-Feasibility Study

Table 9-1

Medical Store

Details of Office Equipment

Office Equipment
Refrigerator
Split Units
Computers

Quantity
1
2
1

UPS
Printers (Epson small)
Software
Chairs
Counter & Show cases

1
1
1
6

Gluco meter & BP

apparatus
Total

Price (Rs.)
20,000
25,000
25,000

Total (Rs.)
20,000
50,000
25,000

8,500
12,000
100,000
600
537,000

8,500
12,000
100,000
3,600
537,000

8,800

8,800
764,900

10 HUMAN RESOURCE REQUIREMENT

Medical Store will run for 24 hours in three shifts (i.e. 8 hours per shift). Shift timing will
be:
Table 10-1

Shift Schedules

Shift 1
Shift 2
Shift 3

8:00 am to 4:00 pm
4:00 pm to mid night
midnight to 8:00 am

The staff will include Pharmacist who will have B-Pharmacy degree. Accounts officer
must be B. Com and having one year experience in related field. Computer operator will
be one year diploma holder having knowledge of proper inventory control.
Human resource requirement for the proposed project is as under:
Table 10-2

Staff Requirement (3 shifts)

Positions

Number

Salary/month
(Rs.)

Annual salary
(Rs,)

ADMINISTRATIVE STAFF:
Owner

100,000

1,200,000

Accounts officers

10,000

240,000

Pharmacist

12,000

1,008,000

Computer operators

7,500

450,000

Security Guards

4,500

162,000

PREF-82/January 2007/Rev3

13

Pre-Feasibility Study

Grand Total:

Medical Store

18

3,060,000

11 PROJECT COSTS
The breakdown of total project cost is in the table below:
Table 11-1

Project Costs

Capital Costs
Office Equipment
Preliminary Expenses
Pre-operational Expenses4
Total Capital Costs
Working Capital
Inventory
Accounts Payable
Total Working Capital
Project Cost

Rs.
764,900
75,000
2,100,000
2,939,900
1,569,000
( 32,876)

1,536,124
4,476,024

Pre-operational Expenses include advance rent of six months

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Medical Store

12 FINANCIAL ANALYSIS
12. 1

Projected Income Statement

Projected Income Statement

Rs. in Thousands
Sales/Revenue
Cost of Sales:
Add opening stock
Operating expenses
Less closing stock

Gross Profit
Operating Expenses:
Administrative Expenses
Marketing Expenses
Operating Profit
Financial Charges
L C Charges
Other Income
Profit before Taxation
Taxation

Profit after Taxation

Acc. Profit b/f
Un-appropriated Profit c/f

Year - I
29,376

Year - II
32,314

Year - III
35,545

Year - IV
39,099

Year - V
43,009

20,519
1,569
18,950

1,569
20,820
1,726
20,663

1,726
22,876
1,898
22,704

1,898
25,137
2,088
24,947

2,088
27,622
2,297
27,414

2,297
30,355
2,527
30,125

2,527
33,359
2,780
33,106

2,780
36,662
3,058
36,384

3,058
40,294
3,363
39,988

3,363
44,287
3,700
43,950

10,426

11,650

12,841

14,152

15,596

17,185

18,935

20,862

22,982

25,317

3,356
100

3,675
95

4,027
90

4,415
86

5,521
81

6,046
77

6,642
74

7,298
70

8,020
66

8,815
63

6,970
298

7,881
235

8,724
172

9,651
110

9,994
47

11,062
-

12,220
-

13,494
-

14,896
-

16,438
-

294

323

355

391

430

473

520

572

630

693

6,966
1,393
5,573

7,969
1,594
6,375

8,907
1,781
7,126

9,932
1,986
7,946

10,377
2,075
8,301

11,535
2,307
9,228

12,740
2,548
10,192

14,066
2,813
11,253

15,525
3,105
12,420

17,131
3,426
13,705

5,573

11,948

19,074

27,020

35,321

44,549

54,741

65,994

78,415

5,573

11,948

19,074

27,020

35,321

44,549

54,741

65,994

78,415

92,119

15
PREF-82/January, 2007/Rev3

Year - VI Year - VII Year - VIII Year - IX

47,310
52,041
57,246
62,970

Year - X
69,267

Pre-Feasibility Study

12. 2

Medical Store

Projected Balance Sheet

Projected Balance Sheet

Tangible Fixed Assets
Preliminary Expenses
Current Assets:
Stock in hand
Accounts Receivable
Pre-paid rent
Cash in Hand / Bank

Owners Equity:
Capital
Accumulated Profit
Long Term Loan
Current Liabilities:
Current Portion
of Long Term Loan
Tax provision
Accounts Payable

Year - I
673
60

Year - II
593
45

Year - III
524
30

Year - IV
464
15

Year - V
411
-

Year - VI
365
-

Year - VII
324
-

Year - VIII
289
-

1,569
600
1,500
3,669
4,509

1,569
8,703
10,272
11,005

1,726
14,759
16,485
17,123

1,898
21,529
23,427
23,981

2,088
29,112
31,201
31,680

2,297
36,911
39,208
39,619

2,527
46,185
48,712
49,077

2,780
56,406
59,186
59,510

3,058
67,683
70,741
71,030

3,363
80,124
83,487
83,744

3,700
93,844
97,544
97,773

2,238
11,916
895

2,238
19,031
448

2,238
26,968
-

2,238
35,262
-

2,238
44,484
-

2,238
54,671
-

2,238
65,921
-

2,238
78,338
-

2,238
92,040
-

448
1,590
36
2,074
17,123

448
1,779
39
2,265
23,981

448
1,984
42
2,474
31,680

2,074
46
2,119
39,619

2,305
50
2,355
49,077

2,547
54
2,601
59,510

2,812
59
2,871
71,030

3,104
64
3,168
83,744

3,426
70
3,495
97,773

2,238
2,238

33
33
4,509

2,238
5,555
1343

448
1,389
32.876
1,869
11,005

16
PREF-82/January, 2007/Rev3

Rs. In Thousands
Year - IX
Year - X
257
229
-

Year - 0
765
75

Pre-Feasibility Study

12. 3

Medical Store

Projected Cash Flow Statement

Projected Cash Flow Statement

Rs. in Thousands
Net Profit
Amortization
Depreciation

Year 0
-

Year 1
6,944
15

Year 2
7,951
15

92

Year 3
8,893
15

80

Year 4
9,921
15

69

Year 5
10,368
15

60

Year 6
11,527
0

53

Year 7
12,734
0

46

Year 8
14,062
0

41

Year 9
15,522
0

36

Year 10
17,128
0

31

28

7,051
600

8,046
(154)

8,977
(170)

9,996
(186)

10,435
(205)

11,574
(226)

12,775
(248)

14,097
(273)

15,553
(301)

17,156
(331)

2,238
2,238
4,476
4476

7651

7892

8808

9810

10230

11348

12527

13824

15252

16825

448
448
7,203
1,500

Opening Balance

765
75
2,100
1,536
4,476
1,500

448
1,389
1,836
6,055
8,703

448
1,590
2,038
6,770
14,759

448
1,779
2,226
7,584
21,529

448
1,984
2,432
7,798
29,112

2,074
2,074
9,274
36,911

2,305
2,305
10,221
46,185

2,547
2,547
11,277
56,406

2,812
2,812
12,440
67,683

3,104
3,104
13,721
80,124

Closing Balance

1,500

8,703

14,759

21,529

29,112

36,911

46,185

56,406

67,683

80,124

93,844

Working Capital Change

Cash form other Sources
Owners
Bank Finance
Total Sources
Applications:
Fixed Assets
Preliminary Expanses
Preoperational Expenses
Working Capital
Re -Payment of Loan
L C Charges
Tax
Cash Increase/(Decrease)

1,500

8,703

14,759

21,529

29,112

17
PREF-82/January, 2007/Rev3

36,911

46,185

56,406

67,683

80,124

93,844

Pre-Feasibility Study

12. 4

Medical Store

Revenue Calculation
Year - I
Sales Growth Rate

10%
10%

Purchase Price Growth Rate

Proportion
Revenue (Rupees):
Multinational
National
Herbal
Food Supliments
Eatables
Toiletries
Sanitation Products
Pre-paid Cards
Diseases
ALLOPATHIC
Infection
Health care products
Cardic
Diabetics
ENT
B.P. / Relaxation
Skin / Allergies
Kidney
Gyne
Muscullar
Ortopadeic
Others
Multinational
National
Herbal
Qurshi
Hamdard
Food Suppliments
Slim up
Others

Year - II

Year - III
10%
10%

Year - IV
10%
10%

Year - V
10%
10%

Year - VI
10%
10%

Year - VII
10%
10%

Year - VIII
10%
10%

Year - IX
10%
10%

Year - X
10%
10%

37.4
42.2
4.9
4.3
3.7
1.8
1.8
3.8

10,998,000
12,402,000
1,440,000
1,260,000
1,080,000
540,000
540,000

12,097,800
13,642,200
1,584,000
1,386,000
1,188,000
594,000
594,000

13,307,580
15,006,420
1,742,400
1,524,600
1,306,800
653,400
653,400

14,638,338
16,507,062
1,916,640
1,677,060
1,437,480
718,740
718,740

16,102,172
18,157,768
2,108,304
1,844,766
1,581,228
790,614
790,614

17,712,389
19,973,545
2,319,134
2,029,243
1,739,351
869,675
869,675

19,483,628
21,970,900
2,551,048
2,232,167
1,913,286
956,643
956,643

21,431,991
24,167,989
2,806,153
2,455,384
2,104,614
1,052,307
1,052,307

23,575,190
26,584,788
3,086,768
2,700,922
2,315,076
1,157,538
1,157,538

25,932,709
29,243,267
3,395,445
2,971,014
2,546,584
1,273,292
1,273,292

1,116,000
29,376,000

1,227,600
32,313,600

1,350,360
35,544,960

1,485,396
39,099,456

1,633,936
43,009,402

1,797,329
47,310,342

1,977,062
52,041,376

2,174,768
57,245,514

2,392,245
62,970,065

2,631,470
69,267,071

25%
7%
10%
13%
7%
7%
5%
5%
7%
5%
5%
4%
100%
47%
53%
100%

5,850,000
1,638,000
2,340,000
3,042,000
1,638,000
1,638,000
1,170,000
1,170,000
1,638,000
1,170,000
1,170,000
936,000
23,400,000
10,998,000
12,402,000
23,400,000

6,435,000
1,801,800
2,574,000
3,346,200
1,801,800
1,801,800
1,287,000
1,287,000
1,801,800
1,287,000
1,287,000
1,029,600
25,740,000
12,097,800
13,642,200
25,740,000

7,078,500
1,981,980
2,831,400
3,680,820
1,981,980
1,981,980
1,415,700
1,415,700
1,981,980
1,415,700
1,415,700
1,132,560
28,314,000
13,307,580
15,006,420
28,314,000

7,786,350
2,180,178
3,114,540
4,048,902
2,180,178
2,180,178
1,557,270
1,557,270
2,180,178
1,557,270
1,557,270
1,245,816
31,145,400
14,638,338
16,507,062
31,145,400

8,564,985
2,398,196
3,425,994
4,453,792
2,398,196
2,398,196
1,712,997
1,712,997
2,398,196
1,712,997
1,712,997
1,370,398
34,259,940
16,102,172
18,157,768
34,259,940

9,421,484
2,638,015
3,768,593
4,899,171
2,638,015
2,638,015
1,884,297
1,884,297
2,638,015
1,884,297
1,884,297
1,507,437
37,685,934
17,712,389
19,973,545
37,685,934

10,363,632
2,901,817
4,145,453
5,389,089
2,901,817
2,901,817
2,072,726
2,072,726
2,901,817
2,072,726
2,072,726
1,658,181
41,454,527
19,483,628
21,970,900
41,454,527

11,399,995
3,191,999
4,559,998
5,927,997
3,191,999
3,191,999
2,279,999
2,279,999
3,191,999
2,279,999
2,279,999
1,823,999
45,599,980
21,431,991
24,167,989
45,599,980

12,539,995
3,511,198
5,015,998
6,520,797
3,511,198
3,511,198
2,507,999
2,507,999
3,511,198
2,507,999
2,507,999
2,006,399
50,159,978
23,575,190
26,584,788
50,159,978

13,793,994
3,862,318
5,517,598
7,172,877
3,862,318
3,862,318
2,758,799
2,758,799
3,862,318
2,758,799
2,758,799
2,207,039
55,175,976
25,932,709
29,243,267
55,175,976

60%
40%
100%

864,000
576,000
1,440,000

950,400
633,600
1,584,000

1,045,440
696,960
1,742,400

1,149,984
766,656
1,916,640

1,264,982
843,322
2,108,304

1,391,481
927,654
2,319,134

1,530,629
1,020,419
2,551,048

1,683,692
1,122,461
2,806,153

1,852,061
1,234,707
3,086,768

2,037,267
1,358,178
3,395,445

60%
40%
100%

756,000
504,000
1,260,000
1,080,000

831,600
554,400
1,386,000
1,188,000

914,760
609,840
1,524,600
1,306,800

1,006,236
670,824
1,677,060
1,437,480

1,106,860
737,906
1,844,766
1,581,228

1,217,546
811,697
2,029,243
1,739,351

1,339,300
892,867
2,232,167
1,913,286

1,473,230
982,153
2,455,384
2,104,614

1,620,553
1,080,369
2,700,922
2,315,076

1,782,608
1,188,406
2,971,014
2,546,584

540,000

594,000

653,400

718,740

790,614

869,675

956,643

1,052,307

1,157,538

1,273,292

540,000

594,000

653,400

718,740

790,614

869,675

956,643

1,052,307

1,157,538

1,273,292

540,000
540,000
36,000
1,116,000

594,000
594,000
39,600
1,227,600

653,400
653,400
43,560
1,350,360

718,740
718,740
47,916
1,485,396

790,614
790,614
52,708
1,633,936

869,675
869,675
57,978
1,797,329

956,643
956,643
63,776
1,977,062

1,052,307
1,052,307
70,154
2,174,768

1,157,538
1,157,538
77,169
2,392,245

1,273,292
1,273,292
84,886
2,631,470

Eatables
Toiletries
Sanitation Products
Pre-paid Cards
Mobile
Calling Cards
Internet

18
PREF-82/January, 2007/Rev3

Pre-Feasibility Study

Medical Store

13 KEY ASSUMPTIONS
Table 13-1

Operating Assumptions

Hours operational per day

Days operational per month
Day operational per year
Table 13-2

24 hours
30 days
360 days

Revenue Assumptions

Revenue assumption

Survey of Distribution companies &

Pharmacy
On the basis of diseases
10%
1%

Revenue classification
Sales growth rate
Other Income (%age of revenues)
Table 13-3

Expense Assumptions

Printing & Stationary

Entertainment
Communication Expense
Consultancy Charges and Audit (Annual)
Electricity cost growth rate
Electricity rate / unit
Kilo Watts Consumed per day
Depreciation Method
Depreciation Rate on Furniture
Depreciation Rate on Electric Equipment
Computers and printers
Table 13-4

1% of Revenue
0.1 % of Revenue
0.1% of Revenue
Rs.15,000
10%
Rs. 6.75
8.3
Written Down Value
10%
10%
20%

Cash Flow Assumptions

Accounts payable cycle

Inventory

7 days
30 days

19
PREF-82/January, 2007/Rev 3

Pre-Feasibility Study

Table 13-5

Medical Store

Financial Assumptions

Project Life
Debt
Equity
Debt Tenure
Interest rate
Income tax rate
Discount rate (weighted avg. cost of capital for NPV)
Minimum Cash Balance

20
PREF-82/January, 2007/Rev 3

10 Years
50%
50%
5 Years
14 %
20 %
25%
Rs. 1.5 Million