Pre-Feasibility Study

DIALYSIS CENTRE

Small and Medium Enterprise Development Authority

Government of Pakistan
www.smeda.org.pk
HEAD OFFICE 6th Floor LDA Plaza Egerton Road, Lahore Tel 111 111 456, Fax: 6304926-7 Website www.smeda.org.pk Helpdesk@smeda.org.pk
REGIONAL OFFICE PUNJAB REGIONAL OFFICE SINDH 5TH Floor, Bahria Complex II, M.T. Khan Road, Karachi. Tel: (021) 111-111-456 Fax: (021) 5610572 Helpdesk-khi@smeda.org.pk REGIONAL OFFICE NWFP Ground Floor State Life Building The Mall, Peshawar. Tel: (091) 9213046-47 Fax: (091) 286908 helpdesk-pew@smeda.org.pk REGIONAL OFFICE BALOCHISTAN Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) 831623, 831702 Fax: (081) 831922 helpdesk-qta@smeda.org.pk

8th Floor LDA Plaza Egerton Road, Lahore Tel 111 111 456, Fax: 6304926-7 Website www.smeda.org.pk
helpdesk@smeda.org.pk

March, 2008

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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. Therefore, the content of this memorandum should not be relied upon for making any decision, investment or otherwise. The prospective user of this memorandum is encouraged to carry out his/her own due diligence and gather any information he/she considers necessary for making an informed decision. The content of the information memorandum does not bind SMEDA in any legal or other form.

DOCUMENT CONTROL
Document No. PREF-107 Prepared by Approved by Issue Date Issued by SMEDA-Punjab Provisional Chief- Punjab March 2008 Library Officer

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1 2

PURPOSE OF THE DOCUMENT ............................................................................................... 4 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT..................... 4 2.1 2.2 2.3 KEY SUCCESS FACTORS/PRACTICAL TIPS FOR SUCCESS ............................................................ 4 OPPORTUNITIES ...................................................................................................................... 4 THREATS ................................................................................................................................ 4

PROJECT PROFILE.................................................................................................................... 5 3.1 3.2 3.2.1 3.2.2 3.3 3.4 3.5 3.6 3.7 INTRODUCTION TO DIALYSIS ................................................................................................... 5 TYPES..................................................................................................................................... 5 Hemodialysis ..................................................................................................................... 5 Peritoneal.......................................................................................................................... 6 OPPORTUNITY RATIONALE ...................................................................................................... 6 PROJECT BRIEF ....................................................................................................................... 7 NATURE OF BUSINESS ............................................................................................................. 7 PROJECT INVESTMENT ............................................................................................................. 7 PROPOSED LOCATION .............................................................................................................. 7

SECTOR & INDUSTRY ANALYSIS........................................................................................... 8 4.1 4.2 CURRENT SCENARIO ............................................................................................................... 8 HEALTH AND NUTRITION EXPENDITURES ................................................................................. 9

MARKET INFORMATION ......................................................................................................... 9 5.1 5.2 TARGET CUSTOMERS .............................................................................................................. 9 FACILITIES .............................................................................................................................. 9

MACHINERY DETAILS.............................................................................................................. 9 6.1 6.2 MACHINERY AND EQUIPMENT REQUIREMENT .......................................................................... 9 OTHER OPTIONS AVAILABLE FOR MACHINERY ...................................................................... 11

LAND & BUILDING REQUIREMENT .................................................................................... 11 7.1 7.2 7.3 7.4 7.5 7.6 TOTAL LAND REQUIREMENT ................................................................................................. 11 SUITABLE LOCATIONS ........................................................................................................... 11 COVERED AREA REQUIREMENT ............................................................................................. 12 ALTERNATIVE OPTION .......................................................................................................... 12 UTILITIES REQUIREMENT ...................................................................................................... 12 REGULATIONS....................................................................................................................... 12

HUMAN RESOURCE REQUIREMENT................................................................................... 13 8.1 HUMAN RESOURCE REQUIREMENTS....................................................................................... 13 8.1.1 Consultants...................................................................................................................... 13

FINANCIAL ANALYSIS............................................................................................................ 14 9.1 9.2 INITIAL PROJECT COSTS ........................................................................................................ 14 ESTIMATED TIME FOR PROJECT COMPLETION......................................................................... 14

10

FINANCIAL ANALYSIS............................................................................................................ 15 10.1 10.2 10.3 PROJECTED INCOME STATEMENT ........................................................................................... 15 PROJECTED CASH FLOW STATEMENT ..................................................................................... 16 PROJECTED BALANCE SHEET ................................................................................................. 17

11

KEY ASSUMPTIONS................................................................................................................. 18

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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, and production, marketing, finance and business management. The document also provides sectoral information, brief on government policies, which have some bearing on the project itself. Before studying the whole document one must consider following critical aspects, which forms the basis of any investment decision.

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. These may include availability of resources, academic knowledge, past experience and specific managerial and medical health care skill. At times evaluation and analysis of strengths, weaknesses, opportunities and threats (SWOT) for a particular project serves the purpose of a basic tool in investment decision making. Pre-feasibility study should capture all the important factors that can play an instrumental role in the success of a project. 2.1 Key Success Factors/Practical Tips for Success Availability of reputed consultants and trained and professional Paramedical Staff. Reasonable and competitive fees, positioned against competitors fees. High standard patient care and hygienic environment for the patients, trained nurses and courteous Para-medical staff. 2.2 Opportunities Considering the shortage of donor kidneys, each year only a small percentage of people, who need a transplant, actually receive a kidney, for this dialysis is the only mean to get their blood filtered. Law against illegal kidney donors in Pakistan plays a vital role in increasing the demand for such centers. This treatment is cheaper than Kidney transplant, therefore higher number of patient are expected. Its a continuous process, a renal patient has to get the treatment every week or after every week or two, hence the demand is usually very high as compare to supply. 2.3 Threats One of the major threats to the business is a high turnover rate of medical, paramedical staff and the consultants. To retain the consultants and other medical staff, salary package should be competitive.

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PROJECT PROFILE

The pre-feasibility study focuses on the establishment of a dialysis centre in Punjab. 3.1 Introduction to Dialysis Dialysis is a process by which, when the kidneys have failed, artificial means are used to remove toxins from the body that accumulate due to non-functioning kidneys. It is one way of replacing the critical function of the kidneys, or renal replacement therapy, thereby sustaining life. Dialysis is needed when a patient loses about 85 to 90 percent of the kidney function. Like healthy kidneys, dialysis keeps your body in balance. Dialysis removes waste, salt and extra water to prevent them from building up in the body. It keeps a safe level of certain chemicals in blood, such as potassium, sodium and bicarbonate, which helps to control blood pressure and improved breathing. Most people undergo three dialysis sessions each week, for about four hours each time. 3.2 Types There are two types of dialysis: hemodialysis and peritoneal dialysis. 3.2.1 Hemodialysis In this type of dialysis, an artificial unit called a dialyzer mimics the action of the nephron. To undergo hemodialysis, a person must first have a minor surgical procedure to create an access for the needles and tubing needed to connect the blood circulation to the dialysis machine. This minor surgery forms what is called an AV (arterio-venous) fistula, or a shunt, or simply a fistula. Once this is done, a person does not have to worry about difficulties being stuck with needles for each session of dialysis 3.2.1.1 Procedure A person is connected to the dialysis machine via the shunt. The dialysis machine pumps the blood through the dialyzer, which filters off the waste products, excess fluid, and excess body chemicals. The newly cleaned blood flows out of the dialyzer and is returned via a different set of tubes. During dialysis, a person also receives the hormones the kidneys are unable to produce.

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3.2.2 Peritoneal This is an entirely different way of filtering wastes from the body. Peritoneal dialysis utilizes the peritoneal membrane, which is the lining of the abdominal cavity. The peritoneal membrane is very large, and has a rich blood supply. In people with kidney failure, the peritoneal blood supply, like all the other blood in the body, contains excessive waste products and fluid, When clean fluid comes into contact with that blood supply, the wastes travel into the cleaner fluid 3.2.2.1 Procedure A solution, called the dialysate, is fed into the peritoneal cavity (the spaces around the intestines and other organs) via a small tube (catheter) that has been placed there in a minor surgical procedure. The dialysate remains in this cavity for two to six hours, during which the wastes, extra fluid, and excess chemicals pass from the blood vessels in the peritoneal membrane into the dialysate fluid, Then, the dialysate fluid is drained from the abdomen via the catheter. Once the fluid is drained, new fluid is placed to begin the process anew.

3.3 Opportunity Rationale Growing number of kidney patients and lack of maintained infrastructure has put tremendous pressure on public sector hospitals. This has resulted in a rising demand for health services in the private sector. Moreover, introduction of latest technology, hygienic environment and professional staff attitude at private sector hospitals has also contributed to the popularity of the hospitals in private sector. In addition to this, increasing trend of medical diagnosis through sophisticated scientific medical tests has increased the need of high capital investment in the hospital sector. Investors in the private sector can therefore
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exploit this opportunity and provide latest and dependable diagnostic services on round the clock basis, which not available in the public sector hospitals. Constrained public sector health system, growing population, introduction of new and modern medical technologies and increased healthcare awareness in the country provides a better business opportunity for the private sector to invest in the health care services. 3.4 Project Brief The proposed project is for setting up a private Dialysis Centre. This centre will comprise of 4 dialysis machines and will serve 8 patients per shift. Table 3-1 Centers Capacity Dialysis machine Time Taken By 1 Patient Hours Per Shift Number of Shifts Patient Per Machine Per Shift Patients Per Day Working Days Yearly Capacity To make it more prudent we assumed the starting capacity to be 60% 3.5 Nature of Business A Dialysis centre 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 3.6 Project Investment Total project cost is Rs 4.149 million. 3.7 Proposed Location Large public sector hospitals are concentrated in major cities of the country. Therefore, it is suggested that new centers should be opened up either in smaller cities, peripheral areas or in those areas of the larger cities where there is little presence of existing medical facilities. 4 4 hours 8 2 2 16 360 5,760

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SECTOR & INDUSTRY ANALYSIS

4.1 Current Scenario1 According to the Dialysis Registry of Pakistan 2003-2004 prepared by the Kidney Foundation, there are only 147 dialysis centers in Pakistan, catering to the needs of over 140 million people, carrying 732 machines and 3,369 dialysis patients. Table 4-1 Dialysis Centers in Pakistan (Dialysis Registry of Pakistan 2003-2004) Province Federal Punjab Sindh Balochistan NWFP AJK Total Cities 1 21 11 1 6 1 41 Machines 49 333 280 26 39 5 732 Centers 7 69 54 6 10 1 147

Out of the 147 centers across the country, 40 are in the government sector, 14 in the semi-government sector, 67 in the private sector and 26 are being looked after through community support.
2

In Lahore Following hospitals/institutes are famous for their dialysis treatment.

HKF Hemo Dialysis Unit Mayo Hospital, West Medical Unit Mayo Hospital, Lahore HKF Hemodialysis Unit Sir Ganga Ram Hospital, Medical Unit 1, Ganga Ram Hospital The Kidney Clinic, 125-Habitat Colony Jail Road Shadman Hoemodialysis Unit, Lahore General Hospital K.N.H.Dialysis Centre, 17-C,Civic,Centre Faisal Town Shakoh's Hemodialysis Centre, 10-Jail Road, Adj. Ammar Hospital,Gulberg, Ittefaq Hospital Trust, Ittefaq D/c Model Town Doctors Hospital, 152-A-G/1 Canal Block,johar town First Dialysis Centre, 934 B Faisal Town Maulana Shaukat Ali Road Masood Hospital, Chowk Ferozpur Road Services Hospital, Department of Nephrology , Services Hospital Jail Road Social Security Hospital, Multan Road,Lahore Sumaiya Azeem Kidney Unit, Choburgi Chowk Bhawalpur Road Surgimed Hospital, 1-Zafar Ali Road,Lahore Kaleem Medical Centre, 19-L, Model Town,Lahore Ihsan Mumtaz Hospital, 71- E Johar Town Shaukat Ali Road,Lahore National Institute of Kidney diseases Shaikh Zayed Hospital, New Muslim Town,Lahore
1 2

www.dailytimes.com.pk/default.asp?page=story_22-4-2005_pg7 www.globaldialysis.com/centres.asp?countrycode=PK 8

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4.2 Health and Nutrition Expenditures3 Fiscal year 2006-07 has witnessed an impressive increase in health sector allocation, rising from Rs.40 billion to Rs.50 billion (0.57%of GDP), thus registering a growth of 25 percent over the last year. Health expenditures have doubled during the last seven years; from Rs.24 billion in 2000-01 to Rs.50 billion in 2005-06 Table 4-2 Health & Nutrition Expenditures (1999-2007) Fiscal Year Total Development Current Percentage Health Expenditure Expenditure Change Expenditure 22.08 24.28 25.41 28.81 32.81 38.00 40.00 50.00 5.89 5.94 6.69 6.61 8.50 11.00 16.00 20.00 16.19 18.34 18.72 22.21 24.31 27.00 24.00 30.00 6.1 9.9 4.7 13.4 13.8 15.8 5.3 25 Health Expenditure as % of GDP 0.58 0.58 0.57 0.59 0.58 0.57 0.51 0.57

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

MARKET INFORMATION

5.1 Target Customers The major target market for the facility consists of people whose overall kidney function is so poor as to threaten adequate health and survival and are said to have end-stage renal disease (ESRD), and need renal replacement therapy in the forms of dialysis or kidney transplantation. 5.2 Facilities As the treatment takes about three to four hours each time so it is suggested that the patient will be facilitated with TV, cable, phone, computer, air conditioners and refreshment.

MACHINERY DETAILS

6.1 Machinery and Equipment Requirement The major cost involved (after land) in establishing a well-equipped dialysis centre is the cost involved in machinery, equipment and furnishing. The proposed Dialysis centre is comprised of four dialysis machines.

Economic Survey 2006-07

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Table 6-1 Equipment & Machinery4 Description Haemodialysis Machine Model: 4008 B Endotoxin Filter Water Treatment System Instrument Sterilizers Stethoscope Blood Pressure Apparatus Generator (5 KVA) Total Table 6-2: Other Equipment Requirement Description No Cost Per Unit (Rs) 25,000 12,000 3,500 12,000 1,850 30,000 72,000 Total No. 4 4 1 2 4 4 1 Unit Cost 625,000 25,000 375,000 5,000 2,000 1,950 60,000 Total Cost 2,500,000 100,000 375,000 10,000 8,000 7,800 60,000 3,060,800

Computers Computer Printer (s) Telephones Fax machines Fans Split Unit 32 Inch LCD For Dialysis Room Total

3 1 4 1 16 6 1

75,000 12,000 14,000 12,000 29,600 180,000 72,000 394,600

To furnish the treatment rooms and visiting area the following furniture is required. Table 6-3: Furniture and Fixture Requirement Description Single Side Lift Able Beds Bed Side Cabinet Sofa Set for reception & Waiting Room 2 Seater For Dialysis Centre 2 Seater for Nursing Room Waiting Room Chairs for Consultant Room Chairs for Doctors Room Chairs For Nursing Rooms
4

No. 4 1 1 1 1 4 3 3 4

Cost Per Unit (Rs) 3,500 2,000 30,000 12,000 12,000 1,200 3,500 3,500 1,200

Total 14,000 2,000 30,000 12,000 12,000 4,800 10,500 10,500 4,800

Fresenius Medical Care Pakistan (pvt) Limited, 52 AttaTturk Block,New Garden Town, Lahore: Tel;042-5868460-1,Fax:0425838339

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Reception Counter Tables Counter Chair Total

1 3 2

25,000 10,000 3,500

25,000 30,000 7,000 172,600

6.2 Other Options Available For Machinery Alternative Chinese machines are available; however, their prices are 2 to 3 times lower than Japanese equipment. However we use the mix of Japanese and Korean machinery for the proposed project.

LAND & BUILDING REQUIREMENT

7.1 Total Land Requirement For above recommended dialysis centre, approximately 2,700 square feet (12 marlas) area is required. Table 7-1: Land Cost Description Total Land 7.2 Suitable Locations Any medical centre should be located in an area that is easily accessible and has considerable population concentration. Considering the spread of new residential areas some of the suitable locations in some of the cities of Pakistan are: Table 7-2: Suitable Locations
City Location

No. of Marla 12

Rate per Marla (Rs.) 350,0005

Total Cost 4,200,000

Lahore

Main Road Johar Town LCCHS New Phases Jail Road, Gulberg Ferozepur Road West Ridge Peshawar Road North Nazimabad Gulshan-e-Iqbal Defence Phase I to III Satellite Town Madrussa Road, Cantt Hazara Town Jinnah Road Susan Road

Rawalpindi Karachi

Quetta

Faisalabad
5

Prevailing rate of per marla in johar town, Lahore

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Peshawar Multan 7.3 Covered Area Requirement

Railway Road Madina Town Dabgari garden Hayatabad Cantonment Area New Multan

Following is the covered area requirement split into various departments and sections: Table 7-3: Covered Area Requirement Space Requirement Dialysis Centre Emergency Room Reception Hall/Waiting room Consultant Room Doctors Room Washroom Nurses Room Admin Room Canteen Total Area Required (Sq. ft.) 7.4 Alternative Option One more option is, to get a place in any established hospitals on rental basis and run your dialysis centre under an established banner. This will also reduces the cost related to land, construction of building and will be very helpful in attracting a good number of patients. However for a dedicated dialysis centre, renting out any commercial place will also be a better option, a place will be available for 75 to 90 rupees per sq, ft rent. 7.5 Utilities Requirement Electricity: Three phase connection would be required to cater the need of the centre. Telephone: Four telephone lines are proposed in this feasibility report. Gas & water connection charges are included in pre operational expense. Dimensions 34 x 28 16 x 12 24 x 30 10 x 12 10 x 12 6 x6 12 x 12 10 x 10 In Sq. ft 952 192 720 120 120 36 144 100 316 2,700 Construction Cost 1,500 /Sq.ft 1,428,000 288,000 1,080,000 180,000 180,000 54,000 216,000 150,000 474,000 4,050,000

7.6 Regulations Prior approval from Ministry of Health is required for opening the dialysis centre. Plus the staff required for operating the machines should be qualified.

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HUMAN RESOURCE REQUIREMENT

8.1 Human Resource Requirements 8.1.1 Consultants Consultant services for this field would be available in the centre, and in addition to the salary consultant will be given 20 % share of the fee: For the proposed size of centre, following manpower is required: Table 8-1: Human Resource Requirement Positions Administrative Staff Chief Executive Admin officer/Accountant Office Boy Guard Sweeper Operational Staff Consultant Medical Officers Nursing Staff Technician Receptionist Total Required Salary Per Month Salary Per Annum

1 1 2 2 2

50,000 15,000 6,000 6,000 4,500

600,000 180,000 144,000 144,000 108,000 1,176,000 1,320,000 432,000 480,000 192,000 192,000 2,616,000 3,792,000

2 2 4 2 2

55,000 18,000 10,000 8,000 8,000

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FINANCIAL ANALYSIS

9.1 Initial Project Costs Table 9-1: Total Project Cost Project Costs Land Building Furniture Office equipment Plant & Machinery Preliminary Expenses6 Total Table 9-2: Financing Plan Financing Sponsors Equity (50%) Bank Finance (50%) Total Table 9-3 Project Returns NPV IRR Pay Back Period (000) % Years 7,276.27 36% 4.23 2,074,500 2,074,500 4,149,000 Costs (Rs) 4,200,000 4,050,000 172,600 394,600 3,060,800 521,000 4,149,000

9.2 Estimated Time for Project Completion . One year for purchase of land and construction of building. Six months for sanction of loan (In case, if financing has to be arranged through bank) 5-6 months for purchase of machinery, its installation and testing. Thirty days for premises furnishing and staff/labor appointments.

Preliminary expense includes the chief executive and admin staff salary, utility connection charges

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10 FINANCIAL ANALYSIS
10.1 Projected Income Statement
Rs(000) Year - I Sales/Revenue Operation Salaries Store& spares Repair & Maintenance other Utilities Misc Depreciation Amortization of Prelmn.Exp Cost of Sales Gross Profit Operating Expenses: Electricity Administrative Salaries Printing & Stationary Entertainment Marketing Telephone Fax and Postage Administrative Expenses Consultants share Operating Profit Financial Charges Profit before Taxation
Taxation 13%

Year - II 10,075 2,747 64 32 132 20 690 66 3,752 6,323 145 1,235 85 48 389 61 1,963 2,015 2,345 218 2,127 266 1,861 870 2,731

Year - III 11,649 2,884 67 34 145 20 619 56 3,826 7,823 147 1,297 86 49 350 61 1,989 2,330 3,504 160 3,344 418 2,926 2,731 5,657

Year - IV 13,378 3,028 71 35 160 21 555 48 3,918 9,460 148 1,361 87 49 315 62 2,022 2,676 4,762 102 4,661 583 4,078 5,657 9,735

Year - V 15,270 3,180 74 37 176 21 497 41 4,026 11,244 150 1,429 87 50 283 62 2,063 3,054 6,127 44 6,084 760 5,323 9,735 15,058

Year - VI 17,343 3,368 78 39 193 21 446 35 4,180 13,163 151 1,501 88 50 255 63 2,109 3,469 7,585 7,585 948 6,637 15,058 21,696

Year - VII 19,611 3,536 82 41 213 21 400 29 4,323 15,288 153 1,311 89 51 230 64 1,897 3,922 9,469 9,469 1,184 8,285 21,696 29,981

Year - VIII 21,434 3,713 86 43 234 21 359 25 4,482 16,952 154 1,376 90 51 207 64 1,943 4,287 10,723 10,723 1,340 9,382 29,981 39,363

Year - IX 22,720 3,899 90 45 257 22 322 21 4,657 18,063 156 1,445 91 52 186 65 1,995 4,544 11,525 11,525 1,441 10,084 39,363 49,447

Year - X 24,084 4,094 95 47 283 22 289 18 4,848 19,235 157 1,517 92 52 167 66 2,052 4,817 12,366 12,366 1,546 10,821 49,447 60,268

8,640 2,616 61 31 120 20 770 78 3,698 4,942 144 1,176 84 48 432 60 1,944 1,728 1,270 276 994 124 870 870

Profit after Taxation Acc. Profit b/f Accumulated Profit c/f

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10.2 Projected Cash Flow Statement

(000) Year 1 Profit before Financial Charges & Taxation Amortization Depreciation Working Capital Change Cash from other Sources Owners Bank Finance Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

1,270 78
770

2,345 66
690

3,504 56
619

4,762 48
555

6,127 41
497

7,585 35
446

9,469 29
400

10,723 25
359

11,525 21
322

12,366 18
289

2,118 0

3,102 0

4,179 0

5,365 0

6,665 0

8,066 0

9,899 0

11,107 0

11,868 0

12,674 0

2,075 2,075 4,149 6,267 11,705 521 691 124 13,041 (6,774) (6,774)

3,102 633 266 899 2,203 (6,774) (4,571)

4,179 575 418 993 3,186 (4,571) (1,384)

5,365 517 583 1,099 4,266 (1,384) 2,881

6,665 458 760 1,219 5,446 2,881 8,328

8,066 948 948 7,118 8,328 15,446

9,899 1,184 1,184 8,715 15,446 24,161

11,107 1,340 1,340 9,766 24,161 33,927

11,868 1,441 1,441 10,428 33,927 44,355

12,674 1,546 1,546 11,128 44,355 55,483

Total Sources Applications: Fixed Assets Preliminary Expenses Re -Payment of Loan L C Charges Tax

Cash Increase/(Decrease)

Opening Balance Closing Balance

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10.3 Projected Balance Sheet

Rs(000) Year - X

Year - I Fixed Assets Land Buildings Office Equipment Plant & Machinery Tangible Fixed Assets Preliminary Expenses Current Assets: Accounts Receivable Cash in Hand / Bank

Year - II

Year - III

Year - IV

Year - V

Year - VI

Year - VII

Year - VIII

Year - IX

4,200 3,645 335 2,755 10,935 443 (6,774) 4,604

4,200 3,281 285 2,479 10,245 376 (4,571) 6,050

4,200 2,952 242 2,231 9,626 320 (1,384) 8,562

4,200 2,657 206 2,008 9,071 272 2,881 12,225

4,200 2,391 175 1,807 8,574 231 8,328 17,133

4,200 2,152 149 1,627 8,128 196 15,446 23,770

4,200 1,937 126 1,464 7,728 167 24,161 32,056

4,200 1,743 108 1,186 7,368 142 33,927 41,438

4,200 1,569 91 1,186 7,046 121 44,355 51,522

4,200 1,412 78 1,067 6,757 103 55,483 62,343

Owners Equity: Capital Accumulated Profit Long Term Loan

2,075 870 1,660

2,075 2,731 1,245

2,075 5,657 830

2,075 9,735 415

2,075 15,058 -

2,075 21,696 -

2,075 29,981 -

2,075 39,363 -

2,075 49,447 -

2,075 60,268 -

4,604

6,050

8,562

12,225

17,133

23,770

32,056

41,438

51,522

62,343

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11 KEY ASSUMPTIONS
Table 11-1: Revenue Assumptions Description Dialysis Fee Checkup Fee Rs. 2,200 300

Table 11-2: Electricity Assumptions Room Electricity Consumption Main Power for Machines Generator Required Rate Per Unit (Rupees/Kwh) Electricity Price Growth Rate Standard Unit 230V240V Max. 5 KVA 8 10%

Table 11-3: Operating Expense Assumptions Costs Consultants' Share Basis 20 % of Total Fee

Table 11-4: Other Operating Expense Assumptions Maintenance Cost (% of Total Machinery & Building Cost) Maintenance Cost growth rate Telephone & Communication cost growth rate Amortization Of Pre-Operating Expenses 1% 5% 10% 10 Years

Table 11-5: Financial Assumptions Interest On Long Term Loan Long Term Debt Tenure 14% 5 years

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