Pre-Feasibility Study

(Veterinary Clinic)

Small and Medium Enterprises Development Authority

Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road,
Lahore
Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7
helpdesk@smeda.org.pk
REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE
Punjab Sindh Khyber Pakhtunkhwa Balochistan
3rd Floor, Building No. 3, 5TH Floor, Bahria Ground Floor Bungalow No. 15-A
Aiwan-e-Iqbal Complex, Complex II, M.T. Khan Road, State Life Building Chaman Housing Scheme
Egerton Road Lahore, Karachi. The Mall, Peshawar. Airport Road, Quetta.
Tel: (042) 111-111-456 Tel: (021) 111-111-456 Tel: (091) 111-111-456 Tel: (081) 2831623, 2831702
Fax: (042) 36304926-7 Fax: (021) 35610572 Fax: (091) 5286908 Fax: (081) 2831922
helpdesk.punjab@smeda.org.pk helpdesk-khi@smeda.org.pk helpdesk-pew@smeda.org.pk helpdesk-qta@smeda.org.pk

Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost
December, 2013
Pre-Feasibility Study Veterinary Clinic

Table of Contents
1. DISCLAIMER........................................................................................................................................... 2
2. PURPOSE OF THE DOCUMENT ......................................................................................................... 3
3. INTRODUCTION TO SMEDA .............................................................................................................. 3
4. INTRODUCTION TO SCHEME............................................................................................................ 3
5. EXECUTIVE SUMMARY....................................................................................................................... 4
6. BRIEF DESCRIPTION OF PROJECT & PRODUCT ......................................................................... 4
7. CRITICAL FACTORS ............................................................................................................................ 5
8. INSTALLED & OPERATIONAL CAPACITIES ................................................................................. 5
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT ...................................................................... 5
10. PROJECT COST SUMMARY ......................................................................................................... 5
10.1. PROJECT ECONOMICS ............................................................................................................................ 6
10.2. PROJECT FINANCING ............................................................................................................................. 6
10.3. PROJECT COST ....................................................................................................................................... 7
10.4. SPACE REQUIREMENT............................................................................................................................ 7
10.5. MACHINERY AND EQUIPMENT ............................................................................................................... 8
10.6. OFFICE EQUIPMENT ............................................................................................................................... 9
10.7. RAW MATERIAL REQUIREMENTS .......................................................................................................... 9
10.8. HUMAN RESOURCE REQUIREMENT ....................................................................................................... 9
10.9. REVENUE GENERATION ....................................................................................................................... 10
10.10. OTHER COSTS...................................................................................................................................... 10
11. CONTACTS OF SUPPLIERS AND EXPERTS ............................................................................ 11
12. ANNEXURE ..................................................................................................................................... 13
12.1. INCOME STATEMENT ........................................................................................................................... 13
12.2. STATEMENT OF CASH FLOW ................................................................................................................ 14
12.3. BALANCE SHEET ................................................................................................................................. 15
12.4. USEFUL PROJECT MANAGEMENT TIPS................................................................................................. 16
12.5. USEFUL LINKS ..................................................................................................................................... 17
13. KEY ASSUMPTIONS ...................................................................................................................... 20
1. DISCLAIMER
This information memorandum is to introduce the subject matter and provide a
general idea and information on the subject. Although, the material included in this
document is based on data / information gathered from various reliable sources;
however, it is based upon certain assumptions which may differ from case to case.
The information has been provided on as is where is basis without any warranties
or assertions as to the correctness or soundness thereof. Although, due care and
diligence has been exercised 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, its employees or
agents do not assume any liability for any financial or other loss resulting from this
memorandum in consequence of undertaking this activity. The contained
information does not preclude any further professional advice. The prospective
user of this memorandum is encouraged to carry out additional diligence and
gather any information which is necessary for making an informed decision,
including taking professional advice from a qualified consultant / technical expert
before taking any decision to act upon the information.
For more information on services offered by SMEDA, please contact our website:
www.smeda.org.pk

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2. 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, operations, marketing, finance and business management.
The purpose of this document is to facilitate potential investors in veterinary clinic
by providing them with a general understanding of the business with the intention
of supporting potential investors in crucial investment decisions.
The need to come up with pre-feasibility reports for undocumented or minimally
documented sectors attains greater imminence as the research that precedes
such reports reveal certain thumb rules; best practices developed by existing
enterprises by trial and error, and certain industrial norms that become a guiding
source regarding various aspects of business set-up and its successful
management.
Apart from carefully studying the whole document one must consider critical
aspects provided later on, which form basis of any investment decision.

3. INTRODUCTION TO SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was
established in October 1998 with an objective to provide fresh impetus to the
economy through development of Small and Medium Enterprises (SMEs).
With a mission "to assist in employment generation and value addition to the
national income, through development of the SME sector, by helping increase the
number, scale and competitiveness of SMEs" , SMEDA has carried out sectoral
research to identify policy, access to finance, business development services,
strategic initiatives, institutional collaboration and networking initiatives.
Preparation and dissemination of prefeasibility studies in key areas of investment
has been a hallmark of SME facilitation by SMEDA.
Concurrent to the prefeasibility studies, a broad spectrum of business
development services is also offered to the SMEs by SMEDA. These services
include identification of experts and consultants and delivery of need based
capacity building programs of different types in addition to business guidance
through help desk services.

4. INTRODUCTION TO SCHEME
Prime Ministers Youth Business Loan scheme, for young entrepreneurs, with an
allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide
subsidised financing at 8% mark-up per annum for one hundred thousand
(100,000) beneficiaries, through designated financial institutions, initially by the
National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL).

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Loans from Rs. 0.1 million to Rs. 2.0 million with tenure up to 8 years including
grace period of 01 year and a debt: equity of 90: 10 will be disbursed to SME
beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwah,
Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally Administered
Tribal Areas (FATA).
SMEDA has been tasked with an advisory role in the implementation of PMs
scheme by providing pre-feasibilities for referencing by SME beneficiaries and
participating banks to optimally utilize their financial resources.

5. EXECUTIVE SUMMARY
This particular Pre-feasibility is for setting up Veterinary Clinic. Veterinary
medicine is the branch of science that deals with the prevention, diagnosis and
treatment of disease, disorder and injury in animals. Infectious diseases in animals
pose a major threat to animal health and productivity, thereby leading to overall
economic loss. The most common diseases are Foot and Mouth Disease (FMD),
diarrhea, fever, respiratory inspections like pneumonia etc. However, these
diseases can be cured through an early diagnosis and proper treatment.
As compared to animal population, the ratio of veterinary clinics is far less in
Pakistan. This creates an opportunity for setting up a Veterinary Clinic. The project
will provide medical facilities such as health check, vaccination, and major & minor
surgeries to livestock. The clinic shall have its own laboratory and pharmacy run
by a licensed veterinary compounder.
The total project cost for Veterinary Clinic is estimated at Rs. 1.77 million, out of
which capital cost is Rs. 1.41 million and working capital Rs. 0.35 million. The
project is proposed to be financed through 90% debt and 10% equity. The project
NPV is calculated to be around Rs. 2.27 million, with an IRR of 30% and Payback
period of 3.35 years.
It is assumed that the clinic shall handle 4,500 cases per year. The total staff
requirement for the project will be 07 persons. The proposed location for project
depends upon sizeable population of livestock such as, Sahiwal, Pakpattan,
Okara, D.I. Khan, Lasbela, Sukkur etc.

6. BRIEF DESCRIPTION OF PROJECT & PRODUCT

This particular project is for establishing veterinary clinics as a large number of
animals die due to infectious ailments annually, causing economic losses to the
farmers. However, it is pertinent to mention that most of these diseases are
curable through appropriate diagnosis and timely treatment. The clinic can be
established in rented premises having a covered area of around 3,000 sq. ft. It will
provide veterinary health care services such as health check, vaccination,
treatment and minor and major surgeries for livestock. The services will be

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extended not only to the farmers bringing in their animals to the clinic, but field
visits will also be carried out to provide on-site diagnosis and medication.
Since, an early diagnosis usually leads to accurate and successful treatment of the
diseased animal, clinics diagnostic laboratory will be established to render
necessary tests. The project shall have a fully equipped surgical suite and well-
trained staff to perform surgeries. A fully equipped pharmacy will also be operated
by a licensed veterinary compounder. The project will employ 7 individuals
including the owner manager for providing standardized animal healthcare and
support services.

7. CRITICAL FACTORS
Background knowledge, experience and technical qualification of the
entrepreneur.
Appropriate project location with catchment area having sizeable livestock
population.
Hiring of qualified staff to meet client requirements.
Retention of staff through incentives to ensure smooth and regular services.
Coverage of maximum area of operation and capturing the market through field
visits and quality of service.
Competition with non-qualified vets through competitive fee structure and
standardized services.

8. INSTALLED & OPERATIONAL CAPACITIES

There are no installed capacities since the proposed business is a service based
venture. Based on 300 operational days per year, the clinic would have the
capacity to manage 4,500 cases per year. The project will handle around 3,600
cases by operating at 80% of capacity utilization in first year.

9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT

The proposed location should be near an area where population of animals is
significant. Thus location for the veterinary clinic is suggested to be at Sahiwal,
Pak Pattan, Okara, Sargodha, Sheikhupura, Faislabad, Jhang, Sialkot, Peshawar,
D. I. Khan, Sukkur, Lasbela, Qilla Saifullah and other similar cities/areas.

10. PROJECT COST SUMMARY

A detailed financial model has been developed to analyze the commercial viability
of Veterinary Clinic project under the Prime Ministers Youth Business Loan
scheme. Various cost and revenue related assumptions along with results of the
analysis are outlined in this section.

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The projected Income Statement, Cash Flow Statement and Balance Sheet are
attached as annexure.

10.1. Project Economics

All the figures in this financial model have been calculated for rendering services
to the livestock farmers. The following table shows internal rate of return and
payback period.
Table 1: Project Economics
Description Details
Internal Rate of Return (IRR) 30%
Payback Period (yrs) 3.35
Net Present Value (NPV) Rs. 2,270,659
Returns on the scheme and its profitability are highly dependent on the availability
and efficiency of qualified veterinary doctors and trained staff, provision of
accurate and quality service on time and ability to handle emergency cases by
accurate diagnosis and successful treatment.
In case veterinary clinic project is not very efficient, it will not be able to cover the
potential market. Hence, cost of operating the business will increase.

10.2. Project Financing

Following table provides details of the equity required and variables related to
bank loan;
Table 2: Project Financing
Description Details
Total Equity (10%) Rs. 176,846
Bank Loan (90 %) Rs. 1,591,614
Markup to the Borrower (percent/annum) 8%
Tenure of the Loan (Years) 8
Grace Period (Years) 1

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 10.3. Project Cost
Following requirements have been identified for operations of the proposed
business.
Table 3: Capital Investment
Capital Investment Amount (Rs.)
Machinery & equipment 695,000
Furniture & fixtures 258,500
Office vehicles 120,000
Office equipment 73,600
Pre-operating costs 217,241
Training costs 50,000
Total Capital Cost 1,414,341
Raw material inventory 64,119
Upfront building rent 90,000
Cash 200,000
Total Working Capital 354,119
Total Project Cost 1,768,460
10.4. Space Requirement
The area has been calculated on the basis of space requirement for management
office, pharmacy, animal shed, operation theatre, laboratory, veterinary doctors
office, assistants room, kitchen, washrooms, waiting area and some open area.
Following table shows calculations for project space requirement.

Table 4: Space Requirement

Requirement Space (Sq. ft)
Animal Sheds/ Animal Holding Area 500
Operation Theater 500
Management Office 400
Pharmacy 120
Vet. Doctors Office 240
Veterinary Assistants' Room 100
Laboratory 350
Kitchen 80
Wash Rooms 108
Waiting Room/Reception 100
Open Area 500
Total Space Required 2,998

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The veterinary clinic is assumed to be established at rented property. The monthly
rent is estimated to be Rs. 30,000 per month.
10.5. Machinery and Equipment
Following table provides list of machinery and equipment required for veterinary
clinic.
Table 5: Machinery & Equipment

Description No. Unit cost (Rs.) Total (Rs.)

Surgical Kit 1 15,000 15,000
Dystocia Kit 2 10,000 20,000
Refrigerator 1 30,000 30,000
Lab Equipment
- Micro Scope (Binocular) 1 60,000 60,000
- Blood Analyzer 1 450,000 450,000
- Centrifugal Machine 1 50,000 50,000
- Autoclave Machine 1 20,000 20,000
Other Lab equipment 50,000 50,000
Total 695,000
Following office furniture and equipments are required for proposed veterinary
clinic.
Table 6: Furniture & Fixture
Description No. Unit Cost (Rs.) Total (Rs.)
Doctors' Room Table 1 15,000 15,000
Doctors' Room Chair 1 3,500 3,500
Visitors' Chairs 3 2,500 7,500
Veterinary Assistants' Room Table 1 10,000 10,000
Veterinary Assistants' Room Chair 1 2,000 2,000
Visitors' Chairs 2 2,500 5,000
Pharmacy Table 1 10,000 10,000
Pharmacy Chair 1 2,000 2,000
Laboratory Table 1 10,000 10,000
Laboratory Chairs 2 2,000 4,000
Operation Theatre - Steel Table 2 20,000 40,000
Computer Table 1 10,000 10,000
Computer Chair 1 2,000 2,000
Reception Table 1 7,500 7,500
Bench for visitors 4 5,000 20,000
Pharmacy Cabins 30,000
Air Conditioners 55,000 55,000

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Electric Installations 25,000
Total 258,500
10.6. Office Equipment
These costs are based on the assumption that a setup will be required to carry on
the activities at veterinary clinic. Following office equipment is required.
Table 7: Office Equipment
Description No. Unit Cost (Rs.) Total (Rs.)

Computer 1 45,000 45,000

Printer 1 15,000 15,000
Fax Machine 1 10,000 10,000
Telephone Sets 3 1,200 3,600
Total 73,600

Office Vehicles required for the project are as follows:

Table 8: Office Vehicle

Number Cost / Unit Amount (Rs.)
Motor Cycles 2 60,000 120,000
Total 120,000
The proposed project will be using two motor cycles costing Rs. 60,000/- each to
cover outdoor cases.
10.7. Raw Material Requirements
It is assumed that 25% of the revenues would be spent on the purchase of stock of
veterinary medicines. Sales margin on medicines is 15%.
10.8. Human Resource Requirement
Table 9: Human Resource Rquirement
No. of Monthly Salary Annual Salary
Description
Employees (Rs.) (Rs.)
Admin. & Accounts Officer 1 15,000 180,000
Veterinary Doctor 1 30,000 360,000
Veterinary Assistant 1 10,000 120,000
AI Technicians 1 10,000 120,000
Receptionist / Operator 1 10,000 120,000
Security Guard, Gate Keeper 1 10,000 120,000
Office Boy cum sweeper 1 10,000 120,000
Total 7 1,140,000

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The table above provides details of human resource required for the project.
Salaries of all employees are estimated to increase at 10% annually.
10.9. Revenue Generation
The table below shows revenue generation from the proposed business:
Table 10: Revenue Generation

Expected No. of Fee Revenue in

Particulars
Patients/ Year (Rs.) Year 1
Large Ruminants (cattle, buffaloes, camels, horses etc.)
Soft Tissue Surgery Minor 110 300 33,000
Soft Tissue Surgery Major 55 5,000 275,000
Out Door Animals 700 300 210,000
Artificial Insemination 400 500 200,000
Castration 100 200 20,000
Parturition Cases 300 5,000 1,500,000
Small Ruminants (goats and sheep etc.)
Soft Tissue Surgery Minor 160 200 32,000
Soft Tissue Surgery Major 110 300 33,000
Out Door Fee per Animal 1,000 100 100,000
Indoor patients - Admission 175 200 35,000
Castration 500 100 50,000
Sub Total 3,610 2,488,000
Income from Farm visits 280,000
Sale of Medicine 309,693
Total Revenue 3,077,693
10.10. Other Costs
An essential cost to be borne by the clinic is the fuel cost incurred by staff during
their outdoor visits to deliver the services. It is estimated that each motorcycle
would be used for travelling of 100 km per day for 280 working days annually. In
year one, therefore, fuel cost amounts to Rs. 94,769 for two motor cycles.

Similarly, electricity expense is estimated to be about 12,000 per month.

Communication during field visits is very necessary to keep the staff informed
about the cases. Communication charges are estimated to be Rs. 3,000 per
month.

The other office expenses related to stationery, entertainment and janitorial

services are expected to be Rs. 36,000 per annum. It is estimated that marketing
would be done to promote the services of veterinary clinic through local media
resources such as newspapers and cable networks. These promotional expenses
are expected to be Rs. 40,000 per annum.

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 11. CONTACTS OF SUPPLIERS AND EXPERTS

Pakistan Veterinary Medical Council ICI Pakistan Ltd.

(PVMC) 63 Mozang Road, Lahore
Government of Pakistan Ph: 042-36302685,
House# 850, St.No. 26, G-9/1, Islamabad
Web. www.akzonobel.com/pk
Ph: +92-51-9262108
A&K Pharmaceuticals Agriprom Pakistan (Pvt) Ltd
94-A,Punjab Small Industrial Estate, 80-A Judicial Colony, Thokar Niaz
Sargodha Road, Faisalabad Baig, Lahore
Ph: 041-8869076 Ph: 042-35310854, 35063332
Web. www.aandkpharma.com Web www.agriprom.pk
Attabak Pharmaceuticals Ghazi Brothers
Plot 5-C, Sector I-10/3, Service Road, Ghazi House, D-35, K.D.A Scheme No.
Industrial Area, Islamabad 1, Miran Muhammad Shah Road,
Ph: 051-4434125 Karachi, Ph: 021-111250365
Web. www.attabak.com 212- Defence Road, Lahore
Ph: 042-35341260-61
Pfizer Laboratories Ltd. Naseem Traders International
12-Dockyard Road, West Wharf, Karachi 12, Satellite Plaza, 6th Road,
Ph: 021-2310051, 2310053 Rawalpindi, Ph: 051-4421339
Web. www.pfizer.com.pk Web. www.naseemtraders.com
Orient Animal Health
Prix Pharmaceutical
Suiete No. M-16, Falak Niaz Tower,
26-Abbot Road, Lahore
Opp. Jinnah Airport, Shahrah-e-Faisal,
Ph: 042-36312582, 36316499
Karachi, Ph: 021-34494555
Web. www.prixpharma.com
Web. www.oah.com.pk
Saadat International Selmore Pharmaceuticals (Pvt.) Ltd.
117 - Habitat Apartment, Shadman II, Jail 36 Km, Multan Road, Lahore
Road, Lahore Ph: 042-35380381
Ph: 042-37550143-5, 37522528 - 30 Web. www.selmorepharma.com
Web. www.saadatinternational.com

UM Enterprises Star Laboratories (Pvt) Ltd.

786 - Sharjah Centre, 3rd Floor, 62 23, K.M. Multan Road, Lahore
Shadman Market, Lahore Ph: 042-7511331
Ph: 042-37566937-8 Web. www.starlabs.com.pk

Delta Chemical & Machinery Symans Pharmaceuticals (Pvt.) Ltd.

Corporation 1st Floor Symans Tower 25-Lower Mall,
28/2 Taj Arcade, 73-Jail Road, Lahore Lahore
Tel. 042-7568704 Tel: 042-37248226
Web. www.deltachemcorp.com Web. www.symans.org

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Selmore Pharmaceuticals (Pvt.) Ltd. Bio- Labs
36 Km, Multan Road, Lahore Plot # 145, Kahuta Industrial Triangle.
Ph: 042-35380381 Kahuta Road. Islamabad
Web. www.selmorepharma.com Ph: 051 4491742 & 3
Web. www.bio-labs.net

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Pre-Feasibility Study Veterinary Clinic

12. ANNEXURE
12.1. Income Statement
Income Statement
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenue 3,077,693 3,589,132 4,117,503 4,405,728 4,714,129 5,044,118 5,397,206 5,775,011 6,179,261 6,611,810
Cost of sales
Purchase of medicines for use and sale 769,423 897,283 1,029,376 1,101,432 1,178,532 1,261,029 1,349,302 1,443,753 1,544,815 1,652,952
Direct labor 600,000 660,000 726,000 798,600 878,460 966,306 1,062,937 1,169,230 1,286,153 1,414,769
Office vehicles running expense 94,769 104,246 114,671 126,138 138,752 152,627 167,889 184,678 203,146 223,461
Vehicle maintenance 12,000 12,600 13,230 13,892 14,586 15,315 16,081 16,885 17,729 18,616
Operating costs 3 (direct electricity) 144,000 158,400 174,240 191,664 210,830 231,913 255,105 280,615 308,677 339,544
Total cost of sales 1,620,192 1,832,529 2,057,516 2,231,725 2,421,160 2,627,191 2,851,314 3,095,162 3,360,521 3,649,342
Gross Profit 1,457,500 1,756,603 2,059,986 2,174,003 2,292,969 2,416,927 2,545,893 2,679,849 2,818,740 2,962,467
General administration & selling expenses
Administrative Salaries expense 540,000 594,000 653,400 718,740 790,614 869,675 956,643 1,052,307 1,157,538 1,273,292
Building rental expense 360,000 396,000 435,600 479,160 527,076 579,784 637,762 701,538 771,692 848,861
Travelling expense 27,000 29,700 32,670 35,937 39,531 43,484 47,832 52,615 57,877 63,665
Communications expense (phone, fax, mail, internet, etc.) 36,000 37,800 39,690 41,675 43,758 45,946 48,243 50,656 53,188 55,848
Office expenses (stationary, entertainment, janitorial services, etc 36,000 37,800 39,690 41,675 43,758 45,946 48,243 50,656 53,188 55,848
Promotional expense 40,000 41,200 42,436 43,709 45,020 46,371 47,762 49,195 50,671 52,191
Professional fees (legal, audit, consultants, etc.) 15,388 17,946 20,588 22,029 23,571 25,221 26,986 28,875 30,896 33,059
Depreciation expense 131,638 131,638 131,638 108,086 107,350 107,350 107,350 107,350 107,350 107,350
Amortization of pre-operating costs 43,448 43,448 43,448 43,448 43,448 - - - - -
Amortization of legal, licensing, and training costs 10,000 10,000 10,000 10,000 10,000 - - - - -
Subtotal 1,239,475 1,339,532 1,449,160 1,544,458 1,674,126 1,763,777 1,920,822 2,093,192 2,282,401 2,490,113
Operating Income 218,026 417,071 610,827 629,545 618,842 653,150 625,071 586,657 536,339 472,354
Earnings Before Interest & Taxes 218,026 417,071 610,827 629,545 618,842 653,150 625,071 586,657 536,339 472,354
Interest expense on long term debt (Project Loan) 132,103 120,942 106,272 90,385 73,179 54,545 34,364 12,508 - -
Subtotal 132,103 120,942 106,272 90,385 73,179 54,545 34,364 12,508 - -
Earnings Before Tax 85,922 296,130 504,555 539,160 545,663 598,606 590,707 574,149 536,339 472,354
Tax - - 10,455 13,916 14,566 19,861 19,071 17,415 13,634 7,235
NET PROFIT/(LOSS) AFTER TAX 85,922 296,130 494,099 525,244 531,097 578,745 571,636 556,734 522,706 465,119

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Pre-Feasibility Study Veterinary Clinic

12.2. Statement of Cash Flow

Cash Flow Statement

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Operating activities
Net profit 85,922 296,130 494,099 525,244 531,097 578,745 571,636 556,734 522,706 465,119
Add: depreciation expense 131,638 131,638 131,638 108,086 107,350 107,350 107,350 107,350 107,350 107,350
amortization of pre-operating costs 43,448 43,448 43,448 43,448 43,448 - - - - -
amortization of training costs 10,000 10,000 10,000 10,000 10,000 - - - - -
Deferred income tax - - 10,455 13,916 14,566 19,861 19,071 17,415 13,634 7,235
Accounts receivable (252,961) (21,018) (42,732) (33,559) (24,519) (26,235) (28,072) (30,037) (32,139) (34,389)
Raw material inventory (64,119) (14,394) (16,062) (11,680) (13,122) (14,743) (16,564) (18,609) (20,908) (23,490) 213,689
Pre-paid building rent (90,000) (9,000) (9,900) (10,890) (11,979) (13,177) (14,495) (15,944) (17,538) (19,292) 212,215
Accounts payable 70,680 11,878 11,869 7,055 7,606 8,202 8,848 9,548 10,307 (8,603)
Cash provided by operations (154,119) 65,334 446,115 636,208 649,090 661,629 656,864 644,279 622,563 579,075 962,617
Financing activities
Project Loan - principal repayment - (176,745) (191,415) (207,302) (224,508) (243,142) (263,323) (285,179) - -
Additions to Project Loan 1,591,614 - - - - - - - - - -
Issuance of shares 176,846 - - - - - - - - - -
Cash provided by / (used for) financing activities 1,768,460 - (176,745) (191,415) (207,302) (224,508) (243,142) (263,323) (285,179) - -
Investing activities
Capital expenditure (1,414,341) - - - - - - - - - -
Cash (used for) / provided by investing activities (1,414,341) - - - - - - - - - -

NET CASH 200,000 65,334 269,369 444,793 441,787 437,121 413,722 380,956 337,385 579,075 962,617

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 12.3. Balance Sheet
Balance Sheet
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Assets
Current assets
Cash & Bank 200,000 265,334 534,703 979,496 1,421,283 1,858,404 2,272,126 2,653,082 2,990,467 3,569,542 4,532,159
Accounts receivable 252,961 273,979 316,711 350,270 374,789 401,024 429,096 459,132 491,271 525,660
Equipment spare part inventory - - - - - - - - - - -
Raw material inventory 64,119 78,512 94,574 106,254 119,376 134,119 150,683 169,292 190,200 213,689 -
Pre-paid annual land lease - - - - - - - - - - -
Pre-paid building rent 90,000 99,000 108,900 119,790 131,769 144,946 159,440 175,385 192,923 212,215 -
Total Current Assets 354,119 695,807 1,012,156 1,522,251 2,022,698 2,512,258 2,983,273 3,426,854 3,832,722 4,486,718 5,057,820
Fixed assets
Machinery & equipment 695,000 625,500 556,000 486,500 417,000 347,500 278,000 208,500 139,000 69,500 -
Furniture & fixtures 258,500 232,650 206,800 180,950 155,100 129,250 103,400 77,550 51,700 25,850 -
Office vehicles 120,000 108,000 96,000 84,000 72,000 60,000 48,000 36,000 24,000 12,000 -
Office equipment 73,600 49,312 25,024 736 - - - - - - -
Total Fixed Assets 1,147,100 1,015,462 883,824 752,186 644,100 536,750 429,400 322,050 214,700 107,350 -
Intangible assets
Pre-operation costs 217,241 173,793 130,345 86,897 43,448 - - - - - -
Legal, licensing, & training costs 50,000 40,000 30,000 20,000 10,000 - - - - - -
Total Intangible Assets 267,241 213,793 160,345 106,897 53,448 - - - - - -
TOTAL ASSETS 1,768,460 1,925,062 2,056,325 2,381,333 2,720,247 3,049,008 3,412,673 3,748,904 4,047,422 4,594,068 5,057,820
Liabilities & Shareholders' Equity
Current liabilities
Accounts payable 70,680 82,558 94,427 101,482 109,088 117,290 126,138 135,685 145,992 137,389
Total Current Liabilities - 70,680 82,558 94,427 101,482 109,088 117,290 126,138 135,685 145,992 137,389
Other liabilities
Deferred tax - - 10,455 24,371 38,938 58,798 77,869 95,284 108,918 116,153
Long term debt (Project Loan) 1,591,614 1,591,614 1,414,869 1,223,454 1,016,152 791,644 548,501 285,179 - - -
Long term debt (Working Capital Loan) - - - - - - - - - - -
Total Long Term Liabilities 1,591,614 1,591,614 1,414,869 1,233,909 1,040,523 830,581 607,300 363,048 95,284 108,918 116,153
Shareholders' equity
Paid-up capital 176,846 176,846 176,846 176,846 176,846 176,846 176,846 176,846 176,846 176,846 176,846
Retained earnings 85,922 382,052 876,151 1,401,395 1,932,492 2,511,237 3,082,873 3,639,607 4,162,313 4,627,431
Total Equity 176,846 262,768 558,898 1,052,997 1,578,241 2,109,338 2,688,083 3,259,719 3,816,453 4,339,159 4,804,277
TOTAL CAPITAL AND LIABILITIES 1,768,460 1,925,062 2,056,325 2,381,333 2,720,247 3,049,008 3,412,673 3,748,904 4,047,422 4,594,068 5,057,820

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Pre-Feasibility Study Veterinary Clinic

12.4. Useful Project Management Tips

Technology
Required spare parts & consumables: Suppliers credit agreements and
availability as per schedule of maintenance should be ensured before start of
operations
Energy Requirement: Should not be overestimated or installed in excess and
alternate source of energy for critical operations be arranged in advance
Machinery Suppliers: Should be asked for training and after sales services
under the contract
Quality Assurance Equipment & Standards: Quality standards need to be
defined and a mechanism to check them should be developed for improving
quality
Marketing
Product Development & Packaging: Experts help may be sought for product
/ service and design & development
Advertisement & Promotion: Business promotion and dissemination through
banners and launch events is highly recommended. Product brochures should
be developed from good quality service providers.
Sales & Distribution Network: Experts advice and distribution agreements
should be sought for developing the sales and distribution network.
Price / Bulk Discounts, Cost Plus Introductory Discounts: Pricing
decisions should never compromise quality of the products. Price during
introductory phase may be kept lower and used as promotional tool. Product
cost estimates should be carefully documented before price setting.
Government controlled prices need to be displayed, as required.
Human Resources
Adequacy & Competencies: Skilled and experienced staff should be
considered an as assets of the business and investments should be made in
developing and motivating them through various means and incentives.
Performance Based Remuneration: Efforts to manage human resource cost
should be focused through performance measurement and performance based
compensation.
Training & Skill Development: Encouraging training and skill development of
self & employees through experts and exposure to best practices helps in

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continuous improvement in the business. Least cost options for Training and
Skill Development (T&SD) should be developed and linked with compensation
benefits and awards.
12.5. Useful Links
Prime Ministers Office, www.pmo.gov.pk
Small and Medium Enterprises Development Authority, www.smeda.org.pk
Government of Pakistan, www.pakistan.gov.pk
Ministry of Industries & Production, www.moip.gov.pk
Ministry of Education, Training & Standards in Higher Education,
www.moptt.gov.pk
Government of Punjab, www.punjab.gov.pk
Government of Sindh, www.sindh.gov.pk
Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk
Government of Balochistan, www.balochistan.gov.pk
Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk
Government of Azad Jammu & Kashmir, www.ajk.gov.pk
Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk
Security Commission of Pakistan (SECP), www.secp.gov.pk
Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
www.fpcci.com.pk
Punjab Board of Investment & Trade (PBIT), 23-Aikman Road, GOR-I, Lahore
Tel. 042-99205201, www.pbit.gop.pk
Sindh Board of Investment (SBI), 1st Floor, Tower B, Finance & Trade Center,
Shahra-e-Faisal, Karachi, Tel. 021-99207512-4, www.sbi.gos.pk
State Bank of Pakistan (SBP), www.sbp.org.pk
National Bank of Pakistan (NBP), www.nbp.com.pk
First Women Bank Limited (FWBL), www.fwbl.com.pk
Pakistan Veterinary Medical Council (PVMC), Islamabad,
www.pvmcregistration.net
National Vocational and Technical Training Commission (NAVTTC) Head
Quarter, Islamabad, www.navttc.org
Pakistan Agricultural Research Council (PARC), Islamabad Tel. 051-9203966,
www.parc.gov.pk
National Agricultural Research Centre (NARC), Islamabad, Tel. 051-9255061,
www.parc.gov.pk
National Veterinary Laboratory, NARC, Park Road, Islamabad Tel. 051-9255108
Balochistan Agricultural Research Centre (BARC), Quetta, Tel: 081-
9213286-7, www.parc.gov.pk
Southern-zone Agricultural Research Centre (SARC), Karachi, Tel: 021-
99261661, 99261561, www.parc.gov.pk

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Pre-Feasibility Study Veterinary Clinic

Arid Zone Research Institute (AZRI), Bahawalpur, Tel: 0622-876833,

www.parc.gov.pk
Punjab Livestock & Dairy Development Board (PLDDB), 11- Shami Road, Lahore
Cantt. Tel. 042-36676821, www.plddb.pk
Faculty of Animal Husbandry, University of Agriculture, Faisalabad,
www.uaf.edu.pk
Faculty of Veterinary Sciences, University of Agriculture, Faisalabad,
www.uaf.edu.pk
Faculty of Veterinary and Animal Sciences, Lasbela University of Agriculture,
Water & Marine Sciences, Lasbela, www.luawms.edu.pk
Faculty of Veterinary Sciences and Animal Husbandry, Sindh Agriculture
University, Tondojam, www.sau.edu.pk
Gomal College of Veterinary Sciences, Dera Ismail Khan, www.gu.edu.pk
KPK Agricultural University, Peshawar, www.aup.edu.pk
Pir Mehr Ali Shah Arid Agricultural University, Rawalpindi, www.uaar.edu.pk
University College of Veterinary & Animal Sciences, Islamia University Bahawalpur
(IUB), www.iub.edu.pk
University of Veterinary & Animal Sciences (UVAS), Out Fall Road, Lahore,
www.uvas.edu.pk
College of Veterinary & Animal Sciences, Jhang, ww.uvas.edu.pk/other_campuses
Bahauddin Zakariya University (BZU), Multan, www.bzu.edu.pk
Nestle Sarsabz Training Institute, Renala Khurd, Okara c/o Nestle Lahore, Tel:
0423-111-637-853
Animal Husbandry In-Service Training Institute (AHITI), Peshawar, Tel. 091-
2960109, 9210309
Veterinary Research Institute (VRI), Ghazi Road, Lahore Cantt., Tel. 042-
99220140
Al - Haiwan Sires Training Institute, Jogi Chowk, Sahiwal, Tel. 040-4227196,
4221486, 061-6775708, Cell. 0321-8695054, 0300-9695054
Altaf & Co Livestock Training Institute, Altaf & Co Plaza,16/1,Out Fall Road,
Lahore, Tel: 042-35763411-4, www.altafandco.com
Solve Agri Dairy Institute, F-6/2, Main Link Road, Model Town, Lahore,
www.solveagripak.com
Dairy & Rural Development Foundation (DRDF), Lahore, www.dairyproject.org.pk
Agribusiness Support Fund (ASF), Lahore, www.asf.org.pk
Directorate of Animal Health, L&DD, Punjab, Tel: 042-99201115
Directorate of Animal Disease Reporting and Surveillance, L&DD, Punjab, Tel:
042-99201116
Foot and Mouth Disease (FMD) Research Centre, L&DD, Lahore, Tel: 042-
99201115
Directorate of Livestock Farms, L&DD, Lahore, Tel: 042-99201126-7
Directorate of Small Holder Dairy Development, Gujranwala Tel: 055-9200410-11,
9200194

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Buffalo Research Institute Bhunikey, District Pattoki, Tel: 049-4421887, 4420072

Directorate of Small Ruminants, Multan, L&DD, Punjab, Tel: 061-9201311
Research Centre for Conservation Sahiwal Cattle (RCCSC), Jhang, Tel: 047-
9200329, 9200371, www.rccsc.com.pk
Directorate of Livestock Training Centre (LSTC), Bahadurnagar, Okara, Tel: 044-
2661393
Livestock Training Centre (LSTC), Sheikhupura, Tel: 056-9200056
Livestock & Fisheries Department, Government of Sindh, www.sindh.gov.pk
Agriculture & Livestock Department, Government of KPK,
www.khyberpakhtunkhwa.gov.pk
Cattle Breeding & Dairy Farm, Harichand, District Charsadda, KPK, Tel: 091-
6640187
Buffalo Breeding & Dairy Farm, D.I.Khan, KPK, Tel: 0966-923150
Livestock & Dairy Development, Government of Balochistan,
www.balochistan.gov.pk
Directorate of Animal Health and Production Extension, L&DD, Quetta, Tel 081-
9202564
Para Veterinary Training Institute, L&DD, Quetta, Tel: 081-9202564

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13. KEY ASSUMPTIONS

Table 11: Project Assumptions
Projected Life of The Project in Years 10
Sponsors' Equity 10%
Debt Financing 90%
Annual Mark Up Rate (Short Term & Long Term) 8%
Debt Tenure in Years 8
Grace Period (Year) 1
General Inflation Rate 10%
No of Working Days in One Year 300
Table 12: Depreciation Rate Assumptions
Tools & Equipment 10% of the Written Down Value
Fittings & Installations 10% of the Written Down Value
Office Equipments 33% of the Written Down Value
Furniture & Fixtures 10% of the Written Down Value
Table 13: Working Capital Assumptions
Stock of Medicines 30 Days Medicines Consumption
Accounts Payable 30 Days of Total Annual Purchases
Table 14: Expenditures
Salaries, Wages & other benefits
Inflation Rate for Salaries & Wages 10%
Vehicle Repair & Maintenance 10% of the cost.
Traveling & Conveyance 5% of admin expanses
Table 15: Expense Assumptions
Description Cost / Rate Rationale

Medicines Consumed and kept for Sale 25% % of revenue

Table 16: Vehicle Running Expenses
Qty Type Consumption Rate Traveling/ Annual Total
of petrol Rs. /Ltr Day (km) Tours cost
(Km/liter) (Rs.)
2 Motor 65 110 100 280 94,769
cycle

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