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M/s. KARTHIKA MEDICALS

PROJECT REPORT
(OF A MEDICAL STORE UNIT)

Prepared under
PMMY Loan Scheme

Submitted by
Mr. Rajesh V.
(Managing Partner)

S/o. Late Venugopal

Keezhedath Krishna Nivas
Thuvakode, Pookkad
Kolakkad, Kozhikode Dt 673304
Phone: 8078326305

Finance:
Canara Bank ,
Kattilpeedika Branch, Kozhikode Dt.
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PROJECT AT GLANCE

Name of the Unit M/s. Karthika Medicals

Address

a) Reg. Unit 6/44 Firdouse Building, East Road,

Pookkad, PO:Chemanchery Kozhikode
Dt. 673304

b) Administrative Office Same as above

Promoters 1. Mr. Rajesh V.

S/o. Late Venugopal
Keezhedath Krishna Nivas
Thuvakode, Pookkad
Kolakkad, Kozhikode Dt 673304

2.Mr. Satheeshan P.
S/o.Madavan
Palathil House, PO:Chemanchery
Kozhikode Dt.673304

Telephone Number 8078326305

Total Cost of the Project

Fixed Capital Rs. 8,00,000/-

Working Capital Rs. 8,89,700/-

Means of Financing
Own Capital Rs. 11,29,700/-
Term Loan Required Rs. 5,60,000/-
Total Rs. 16,89,700/-

Employment Potential 3 No’s

Expected Earnings Rs. 3,00,000 to 4,00,000/-

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EXPECTED EARNINGS RS. 5,00,000 TO6,00,000/-

A] INTRODUCTION:
Two decades back, the average consumer spending on healthcare was eight per cent; today
it is 20 per cent. The customer has also become aware of various offerings in the pharma
market, and is demanding better services.The mercury has reached a new high where the
Indian consumer's priority for healthcare is concerned today. His spending on healthcare is
comparatively higher than what he spends on apparels or entertainment.Pharmacy retailing is
expected to become more organised and corporatised in the coming years.Indian Retail
Pharmacy industry is widely fragmented throughout the country. The total Indian retail
pharmacy market has been growing at an average of 18% per annum over the last few years,
and is anticipated to grow by even higher numbers in the future
This report evaluates the technical feasibility and economical viability of a proposed
Medical Store unit M/s. KARTHIKA MEDICALS 6/44 Firdouse Building, East Road, Pookkad,
PO:Chemanchery, Kozhikode Dt.673304 for. It is a Partnership Firm. Mr. Rajesh V. (PAN No:
AQOPV1973B) and Mr. Satheeshan P. (PAN No: APXPS0362R) are the partners of the firm.
The partners proposes to set up this unit by availing long term loan from Canara Bank ,
Kattilpeedika Branch under PMMY ‘Scheme
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B] MARKET POTENTIAL & STRATEGY

As medical technology advances and buying power of people increases, more Indians are
accessing medical services, the key to which are medical stores. With medicines seeing around
17% inflation each year, medical stores have seen exponential growth during the last ten years,
and show no sloth.

Medical stores are now promising business avenues for small business owners and
entrepreneurs alike. the total size of the global health and beauty market is between US$ 18 to
20 billion (approximately Rs 900 billion), which includes over 7.5 lakh chemist shops. The
market is growing by approximately 18 per cent per annum. Statistics reveal that pharmacy
retailing in India has a market size of over Rs 32,000 crore. The increasingly health-conscious
Indian today has numerous retail pharmacies jostling for his attention (and money). These
pharmacies offer a great choice to the consumer. With pharmacy retailing becoming more and
more organized, and a large number of retail formats coming up, the consumer has a greater
choice with respect to quality, price and variety.

D] PROMOTERS
M/s. Karthika Medicals is a partnership firm Mr. Rajesh V. aged 45 years. S/o. Late
Venugopal,Keezhedath Krishna Nivas,Thuvakode, Pookkad, Kolakkad, Kozhikode Dt 673304
and Mr Satheeshan P., aged 55 years S/o.Madavan Palathil House, PO:Chemanchery
Kozhikode Dt.673304 are the Partners of this venture. Mr. Rajesh V is the Managing Partner
having signing authority. Since the business is a Sale of medical and healthcare items, the
technical know-how is essential for the smooth running of business other than better
management which is readily available. The proprietors are not anticipating any problems for
the smooth functioning of the unit. They are having high contact with people of various walks of
life. They can carry out all kinds of work in connection with this industry. They are well aware

and very expert in handling this activity.

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E] LOCATION& LICENCE
The Registered office and the unit locate at rented shop at 6/44 Firdouse Building, East
Road, Pookkad, PO:Chemanchery, Kozhikode Dt.673304 for a monthly rent of Rs. 5000/ where
necessary Infrastructure facilities are available. The shop is sufficient for the level of Service
envisaged in the project. The location ensures easy transport facilities, availability of raw
materials, water and three phase electricity. It is on the side of the road.

F] INFRA-STRUCTURAL FACILITIES
All infra-structural facilities such as electricity, road, water, bank, hospital etc., are available
in the vicinity of the venture.

G] SCHEDULE OF IMPLEMENTATION
For the implementation of the project, considering various activities involved in the project
took about 2 weeks for commissioning with the active follow up after approval of the project.
The project will be started immediately on getting required finance.

H] TECHNICAL ASPECTS

Working Capital

i. Manpower and Salary Requirement(per month)

Position NO’s Salary/ Month Total
1. Manager (Self )
1 12,000 12,000
Remuneration
2. Skilled Labour 1 10,000 10,000
3. Unskilled Labour 1 8,000 8,000
Total 3 30,000
The unit will employ 3 persons both skills & unskilled

ii. Utilities (per month)

S.No Description Unit Amount Rs.
1 Power LS 2,000
2 Water LS 500
Total 2,500
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iii. Other Expenses (per month)

S.No Description Amount Rs.
1 Postage & Stationery Expenses 200
2 travelling expenses 1,000
3 Repairs and maintenance 500
4 Insurance 1,000
5 Miscellaneous Expenses 500
Total 3,200

Total Capital Requirement:

1. Fixed Capital
i. Land
ii. Site Development 135000
iii. Building/Working Shed
iv. Machineries 245000
v. Furniture, Fixtures, (Racks) 400000
vi. Electrification etc.) 15000
Preliminary Expenses 5000
Total 800000
Total amount of Fixed Capital required 800000

2. Total Working Capital

Raw Materials for 10000 Pairs Qty Rate Total
1 For monthly purchase of goods LS Ls 350000
goods to be stock For Opening LS Ls 500000

Total amount for raw materials 850000

2 Rent 3000
3 Salary & Wages 30000
4 Utilities 2500
5 Other Expenses 3200
6 Advertisements & Service 1000
Total amount of Working Capital required 889700

Total Fund Required for the Project [1 + 2] 1689700

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3. Means of Finance:
Total Fixed Capital Amount 800,000
Total Working Capital Amount for Raw materials 889,700
Total Fund for the Project 1,689,700
i. Term loan under PMMY 560,000
ii. Working Capital Loan under PMMY not required
II. Own capital of Total Loan Amount 1,129,700
Total 1,689,700

Loan Amount Required 560,000

Yearly Income Forecasting:

@ 70% Capacity Utilisation.
No's item Total
1 Sales realization from Goods (on 20% of Profit rate) 420,000

Total Projected Monthly income Receipts 420,000

Total Projected Annual income Receipts 5,040,000

Projected Profitability of the Project:

Assumptions
Area of the Project
Annual Increase in Sales Income % 10% -12%
Annual Increase in Operating Expenses: % 10%
Rate of interest on loan: % 11%
Rate of depreciation on fixed assets: % 10%
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Projected profitability for: 1ST YEAR 2ND YEAR 3RD YEAR 4THYEAR 5TH YEAR
Capacity Utilization (In %)- 70 80 90 100 100
1 Expected Service 5,040,000 5,544,000 6,098,400 6,708,240 7,379,064
2 Less Cost of Materials: 4,200,000 4,620,000 5,082,000 5,590,200 6,149,220
3 Gross Profit (1-2): 840,000 924,000 1,016,400 1,118,040 1,229,844
4 Less other operating exp:
i) Rent for Land: 36,000 39,600 43,560 47,916 52,708
ii) Salary for staff: 360,000 396,000 435,600 479,160 527,076
iii) Electricity&Maint: 30,000 33,000 36,300 39,930 43,923
iv) Office expenses 38,400 42,240 46,464 51,110 56,221
v) Advt and Service expenses: 12,000 13,200 14,520 15,972 17,569
Total of Sl. 4. 476,400 524,040 576,444 634,088 697,497

5 Profit before Depreciation, Interest and

363,600 399,960 439,956 483,952 532,347
Taxes(3-4)
6 Less Depreciation on Fixed Assets: 80,000 72,000 64,800 58,320 52,488
7 profit before interest and taxes (5-6): 283,600 327,960 375,156 425,632 479,859
8 Less Interest payable on loan: 61,600 49,280 36,960 24,640 12,320
9 Profit before taxes (7-8): 222,000 278,680 338,196 400,992 467,539
10 Tax payable : 12% 26,640 39,015 47,347 56,139 65,455
11 Calculated Net profit (9-10): 195,360 239,665 290,849 344,853 402,083

Percentage of Profit on Services: 4 4 5 5 5

12 Provision for repayment of loan: 112,000 112,000 112,000 112,000 112,000
13 Retained Profit (11-12): 83,360 127,665 178,849 232,853 290,083
14 Net Cash Accruals 163,360 199,665 243,649 291,173 342,571
[Depreciation added back with retained profit]
15 Cumulated Net profit: 163,360 199,665 243,649 291,173 342,571
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Repayment Schedule:

Proposed Repayment Period: 5Years

Proposed Repayment Schedule: 1ST YEAR 2ND YEAR 3RD YEAR 4THYEAR 5TH YEAR
Refundable loan at the beginning of the year 560,000 448,000 336,000 224,000 112,000
Proposed Repayment during the year: 112,000 112,000 112,000 112,000 112,000
Refundable loan at the end of the year: 448,000 336,000 224,000 112,000 -
Total Debt-Service [Interest+Repayment]: 173,600 161,280 148,960 136,640 124,320
Fund Available for Debt-Service: 363,600 399,960 439,956 483,952 532,347
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Projected Cash Flow Statement:

a) Sources of Fund: During The- 1ST YEAR 2ND YEAR 3RD YEAR 4THYEAR 5TH YEAR
i) Own Investment: 1,129,700 1,129,700 1,129,700 1,129,700 1,129,700
ii) Loan from Bank: 560,000 448,000 336,000 224,000 112,000
iii) Increase in Subsidy:
iv) Profit Before Interest and taxes: 283,600 327,960 375,156 425,632 479,859
v) Depreciation added back: 80,000 72,000 64,800 58,320 52,488
Total 2,053,300 1,977,660 1,905,656 1,837,652 1,774,047
b) Uses of Fund:
i) Increase in Fixed Assets: 800,000
ii) Increase in Working Capital: 889,700 951,979 1,018,618 1,089,921 1,166,215
iii) Decrease in Loan: 112,000 112,000 112,000 112,000 112,000
iv) Interest payable: 61,600 49,280 36,960 24,640 12,320
Total 1,863,300 1,113,259 1,167,578 1,226,561 1,290,535

Opening Balance:
Surplus/Deficit Generated: 163,360 199,665 243,649 291,173 342,571
Closing Balance: 163,360 199,665 243,649 291,173 342,571
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Projected Balance Sheet:

At the end of- 1ST YEAR 2ND YEAR 3RD YEAR 4THYEAR 5TH YEAR
a) Liabilities:
i) Own Investment: 1,131,950 1,327,310 1,566,975 1,857,823 2,202,676
ii) Calculated Net Profit: 195,360 239,665 290,849 344,853 402,083
Net Worth: 1,327,310 1,566,975 1,857,823 2,202,676 2,604,759
iii) Loan at Bank: 448,000 336,000 224,000 112,000 -
Total 1,775,310 1,902,975 2,081,823 2,314,676 2,604,759
b) Assets:
Gross Block as Fixed Assets and 800,000 720,000 648,000 583,200 524,880
Less depreciation on Fixed Assets: 80,000 72,000 64,800 58,320 52,488
i) Net Block: 720,000 648,000 583,200 524,880 472,392
ii) Working Capital: 889,700 889,700 889,700 889,700 889,700
iii) Cash balance: 165,610 365,275 608,923 900,096 1,242,667
Total 1,775,310 1,902,975 2,081,823 2,314,676 2,604,759
Total Investment: 1,689,700 1,640,420 1,603,460 1,578,820 1,566,500
Return on Investment: 12 15 18 22 26

BEP [in % of target business] 79.09 76.37 73.57 71.12 68.99

DEBT SERVICE COVERAGE RATIO 1.94 2.24 2.64 3.13 3.76

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CONCLUSION

it will observed from the financial statements and projection given in this project report

that the project is financially sound and economically viable. Provided the required finance is

favored by the financial institution. The financial indication of the project is satisfactory.

Place : Kozhikode

Date : Mr.Rajesh V.

(Managing Partner, Karthika Medicals)