Tev Report

M/S. Medi Mart India Private Limited.

PROJECT AT A GLANCE

Particulars

Description

1.

Name

M/S. Medi Mart India Private Limited.

2.

Constitution

Private Limited Company

3.

Date of incorporation

08-10-2008

4.

Office

Flat No.302 & 303, Classic Court Apartments Erramanzil, Hyderabad – 500 082.

6.

Line of Activity

To set up Retail Outlets of Pharmaceuticals

7.

Directors

Dr. R.Reddeppa Reddy Ms. N.Bharathi Mr. D.SudhakarReddy Mr. P.Chaitanya Mr. D.Prabhakar Reddy

10.

Cost of the Project

11.

Finance

12.

Financial Projections

Rs. 750 lacks Term Loan (Proposed) Rs. 250 Lacks Working Capital

Rs. 300 Lacks

a)

Debt equity Ratio

:

1.25:1

b)

Promoters Contribution

:

26.67 %

c)

DSCR: Gross

:

2.42

DSCR: Net

:

2.85

d)

B.E.P.

:

65.60 %

e)

I.R.R.

:

24.76 %

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M/S. Medi Mart India Private Limited.

SCOPE OF THE STUDY

State Bank of Hyderabad, Secretariat Branch, Hyderabad, has entrusted us the task of Conducting Techno Economic Viability study of M/S. Medi Mart India Pvt Ltd., who have approached them for financial assistance. The study is based on the

 Information provided by them.  Discussions we had with the promoters.  Information gathered from the present market situation. We have discussed the contents of the report with the promoters who have confirmed that it does not contain any material error or fact of omission and fairly set out the state of affairs. The projections contained in the report are estimates and represent only one possible result depending upon the assumptions made. Further the projections and the underlying assumptions may vary depending upon evolving circumstances. There is no representation or assurance that the new development will achieve the results indicated in the projections as the assumptions upon which they were based are inherently subject to uncertainty and variation depending upon evolving events. However, the projections have been conscientiously prepared, based on the discussions and knowledge of the market and the information supplied to us.

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M/S. Medi Mart India Private Limited.

INTRODUCTION M/s. Medi Mart India Private Limited is a private limited company incorporated on 08-102008 by a group of people with diverse backgrounds and experience with a mission to establish a successful chain of genuine, friendly neighborhood drugstores in South India. After all necessary clearances and full fledged infrastructure setup, its first store was launched in April 2009 at V.V.Nagar, Kukatpalli, Hyderabad. As on July 2009, Medimart presently operates 20 stores across Hyderabad, and proposes to open 350 stores in south India by the end of 2014. Professional and passionate to the core, the company is moving fast forward into the future. The main objects of the Company are as follows:

To do the Business of Marketing in Medicines, Drugs, Pharmaceuticals, Cosmetics, Surgicals, Medical Instruments and Equipments in whole sale, Retail, and to set up chain stores, Marketing outlets, clinics and Laboratories. To Carry on the business of Manufacturing, buying, selling or otherwise deal in drugs, Pharmaceuticals, Medicines, Surgicals, Lab Equipments, Bio-chemicals, Organic and inorganic Chemicals, biological products, diagnostic agents, immunological agents, veterinary products, Animal foods, Cosmetics, Fine Chemicals, Dyes and Intermediates, and all kids of by Products thereof. To Export, Import, Manufacture, Purchase or Prepare for market and generally deal in merchandised of every kind and description used in Pharmaceutical, Medical, Surgical, Diagnostic and Drug Industry.

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M/S. Medi Mart India Private Limited.

PHARMACY RETAIL IN INDIA

The Indian pharmaceutical market is the world’s 13th largest in terms of value and the 4th largest in terms of volume. The total market size is US $ 5.7 bn (Ref: IMS Health) and includes all the pharmaceutical products, fast moving healthcare products and some FMCG products sold through the chemists across the country. While all the formats of retailing have changed, be it apparel retailing, grocery retailing, fuel retailing or jewellery retailing, somehow pharmacy retailing has not undergone changes. The changes in the next 5 years in this business will be more than what has happened in the past 55 years. Earlier shopping was considered a headache involving running from pillar to post. Now retailing has changed it to leisure and pleasure & it’s become more of an outing for the entire family. Pharmacy retailing has seen consolidation world over. 5 pharmacy chains control 40% of the sales in the US. 7 pharmacy chains control more than 60% of the market in UK. A similar situation prevails in most developed nations around the world. This is a need driven business and every family requires medicines / health related goods. So the scope of educated people getting into the same is higher. Margins are decent and returns are good. Doctors are getting into this business. An average family spends 20% of its monthly wallet spend on health care, up from 10% in 1985. Pharmaceutical Retail just got an image makeover. Much like the beauty products hitherto sold off dusty shelves promised, it’s a whole new look. For one, new pharmacy stores boast of excellent in store display. But that’s cosmetic. What is intrinsic is that they also promise better quality, ambience, convenience and prices. So Indian customers fed-up and resigned to spurious, expired or poorly stored drugs are offered an option. The pharmacy retail sector is set for a shakeup and consolidation with many organized players investing long term in it.

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M/S. Medi Mart India Private Limited.

Some of the change is driven by market characterized by low entry barriers and capital requirements. It’s a highly lucrative market with high margins that require low investment. The Rs.48, 000–crore Indian pharmacy sector is dominated by the highly fragmented, unorganized players, constituting mainly the neighborhood chemist that sells medicines and OTC drugs along with other medical equipments and accessories. There are currently over 8, 00,000 medical shops serving the Indian market. Trade associations and experts opine that nearly 97 – 99% is dominated by unorganized sector. This is high penetration compared to other similar countries. Number of local pharmacies in India is more than that of US, Europe and China put together for a pharmaceutical market size which is less than a percentage of their combined market. When we compare with China, which has approximately 2 lakh outlets for a domestic market of $15 billion, the Indian Pharma retail with approximately 5.5 lakh retailers for $6 billion market appears highly over-proliferated. However the business and the landscape are changing. There are other serious regulatory and supervisory hurdles to be crossed before the country can really leverage the benefits of high penetration of medical shops. 1. Prevalence of spurious or counterfeit drugs is high with estimates ranging from 5% to 30% of the market. 2. Standalone medical shops are able to avoid sales tax, this being a cash business offering fake bills to regular customers. 3. The drugs are stored in sub-optimal store conditions in most places, making the efficacy of the medicines questionable.

In such a scenario, customers are patronising reputed chains wherever they operate. The organised pharmacy retail is growing at 100 % per year. Last year, chains like Medicine Shoppe grew almost by 100%. With internet being used at a much lower level in India, internet pharmacies may be the order of the day 5 to 10 years from now. This is going to bring about a big change in the customer’s perception, cost and service levels in pharmacy retailing.

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M/S. Medi Mart India Private Limited.

With India becoming a major destination for medical tourism, the retail medicine business cannot remain unaffected. It has to change and adopt global standards. While India can be considered as a developed country for IT, Health care and Pharma are still looked upon as developing areas. How will change happen? Corporates and organized pharmacies will have to drive the change like Apollo did in 1987 and the ‘Dial for Health’ initiative by the Zydus group. The future of pharmacy retailing is in for a big shakeout from all the three stakeholders; manufacturers, retailers and customers Since all are looking at a better value for saving time, costs and delivering a better value with fast and relevant information, there could not be a better time for the changes in pharmacy retail The pharmacy market is growing at 27% annually and revenue from pharmacies is expected to touch 50,000-crore by 2010. Other experts like murlidharan Nair of Ernst & young say that the sector is growing at 15% and will double its size in the next 5 years.

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M/S. Medi Mart India Private Limited.

KEY PLAYERS IN SOUTH INDIA Apollo Pharmacy: Apollo Pharmacy, a division of Apollo hospitals enterprises ltd., is India’s largest branded pharmacy network with over 700 outlets in key locations across 17 states. The pharmacy business of Apollo is growing at a phenomenal rate of 70% with revenues of Rs.600 crore achieved last year. The chain has served over one crore customers ever since they started their first store in the year1983.

Med Plus Pharmacy: Med plus is a pioneering chain of retail pharmacies based out of Hyderabad. Started in February 2006, it has already opened 500 company owned outlets spread across 6 states. The Rs.100 crore companies have set a target of opening 1000 stores by the end of this year mainly by franchisee route.

Hetero Pharmacy: Hetero Group launched its retail pharmacy chain hetero pharmacy in Hyderabad in the first quarter of 2008. Presently they have grown to 100 stores in 12 months, with 75 stores in Hyderabad and the rest in various cities and towns in Andhra Pradesh. Hetero plans to establish 1000 pharmacy stores by 2011 all over India.

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M/S. Medi Mart India Private Limited.

MISSION Our mission is to be a successful chain of friendly, neighbourhood drugstores offering quality genuine medicines. Our knowledgeable, caring staff work together to provide a superior pharmacy experience, and offer everyday products and services that help our valued customers lead healthier, happier lives.

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M/S. Medi Mart India Private Limited.

PROMOTERS OF THE COMPANY

The promoters/ the subscribers to the memorandum of the Company are Mr. R.Reddeppa Reddy and Ms. N.Bharathi. Sensing the potentials of the retail pharmacy in India, have floated a company by name M/s. Medi Mart Private Limited to set up retail outlets of pharmaceuticals.

R.Reddeppa Reddy: S/o Sidda Rami Reddy, R/o H.No.08-01-301/41, Laxmi Nagar Colony, Shaikpetnala, Hyderabad – 500 008.He is aged about 45 years. He is a consultant anaesthesiologist in medicity hospitals. Mrs. N.Bharathi: W/o N.Krishna Reddy, R/o H.No.08-01-301/41, Laxmi Nagar Colony, Shaikpetnala, Hyderabad – 500 008. She is aged about 55 years. She is a house wife.

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M/S. Medi Mart India Private Limited.

BACKGROUND OF THE DIRECTORS Mr.D.SudhakarReddy. Chairman Mr.Devireddy Sudhakar Reddy is the Managing Director of DSR Infrastructure Pvt. Ltd., one of the fastest growing Construction companies headquartered in Hyderabad with operations in Hyderabad and Bangalore. He has over 20 years of varied experience and has carved a separate `position for himself in the real estate sector and commands a healthy respect in the industry. Today he is at the helm of affairs, with a highly focused vision. He has been the source of inspiration for and reason behind the astronomical rise of DSR Group. At Medimart, he provides hands-on leadership to the Planning and implementation of company's finance, accounting and generation of high quality reports for decision making. Mr. R.Reddeppa Reddy Managing Director Dr. R .R. Reddy is a Consultant Anaesthesiologist and Intensivist at Mediciti Hospitals, Hyderabad for the past Ten years. He is also a consultant Anesthesiologist at Wockhardt Genesis Hospital and pacific Hospitals in Hyderabad. He worked as in charge Emergency Medical officer at Apollo Hospitals for three and half years. His three months fellowship course in critical care in U.S.A. helped in upgrading the training and experiencing the management of various medical and surgical problems. His vision of starting a Retail chain of pharmacy stores dates back to 1994. He was instrumental in starting a chain of Pharma Retail stores for Apollo Hospitals at Hyderabad then. Today the company has around 1000 stores across India. But his dream did not last long as he had to head to USA for further education. Today, He is back with Medimart Pharmacy. His previous experience with retail Pharma business and his present professional experience have helped him gain enormous amount of understanding in the field of Pharma retailing. Mr. Reddy wants to bring in professionalism to an otherwise unorganized retail Pharma industry. He is responsible for devising business development strategies, forging strategic alliances, establishing high level contacts in the industry, recruiting and purchase of genuine medicines from authorized stockiest and distributors.

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M/S. Medi Mart India Private Limited.

Mr.P.Chaitanya Executive Director Mr.Pellakuru Chaitanya is a mechanical engineering graduate having over 10 years of experience in the field of Construction and pharmaceutical industry. Prior to setting up Medimart Pharmacy, he worked with an ayurvedic based pharmaceutical company for two years. He was responsible for Marketing and Operations. His last assignment was with DSR Infrastructure Pvt. Ltd, a major Infrastructure company based in Hyderabad. He was heading the Bangalore Operations. Some of the key responsibilities handled by him include operations, Marketing, Organizational transformation and overseeing the overall business development operations of the company. At Medimart, he is responsible in overseeing the overall business development operations of the company and brand building.

Mrs.N.Bharathi W/o N.Krishna Reddy, R/o H.No.08-01-301/41, Laxmi Nagar Colony, Shaikpetnala, Hyderabad – 500 008. She is aged about 55 years. She is a house wife.

Mr.D.Prabhakar Reddy S/o Late D.Subba Rami Reddy, R/o H.No.455/1, Road No-19, Jubilee Hills, Hyderabad – 500 033. He is aged about 51 years.

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M/S. Medi Mart India Private Limited.

ABOUT THE ASSOCIATE CONCERNS Following are companies /firms with which the directors are associated:

M/s. DSR Infrastructure Pvt Ltd. M/s. D.S.R Constructions. M/s. Sri Sreenivasa Constructions. M/s. Subham Developers. M/s. D S R Builders & Developers.

M/s. DSR Infrastructure Pvt Ltd: is a private limited company in which Mr.D.Sudhakar Reddy, Mr.D.Prabhakar Reddy and Mr.P.Chaitanya are the directors. The Company is engaged in the Construction activity. A brief summary of the financial performance of the company is given below: Year

Turnover

Net Profit

Depreciation

(Rs. in Lakhs) Cash Profit

2007-08

15.00

7.11

0.02

7.13

2008-09

2119.51

137.76

21.52

159.28

M/s. D.S.R Constructions: is a Partnership firm in which Mr.D.Sudhakar Reddy and Mr.D.Prabhakar Reddy are one of the partners of the firm. The firm is engaged in real estate by constructing and sale of flats.

A brief summary of the financial performance of the firm is given below: Net Profit

Year

Turnover

2006-07

5685.11

460.87

18.49

479.36

2007-08

2464.41

195.52

33.48

229.00

2008-09

5512.59

349.52

30.59

380.11

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Depreciation

(Rs. in Lakhs) Cash Profit

M/S. Medi Mart India Private Limited.

M/s. Sri Sreenivasa Constructions: is a Partnership firm in which Mr.D.Sudhakar Reddy and Mr.D.Prabhakar Reddy are one of the partners of the firm. The firm is engaged in real estate by constructing and sale of flats. A brief summary of the financial performance of the firm is given below: Year

Turnover

Net Profit

Depreciation

(Rs. in Lakhs) Cash Profit

2006-07

227.64

22.05

6.68

28.73

2007-08

9058.20

992.03

17.85

1009.88

2008-09

7170.20

434.32

58.10

492.42

M/s. Subham Developers: is a Partnership firm in which Mr.D.Sudhakar Reddy and Mr.D.Prabhakar Reddy are one of the partners of the firm. The firm is engaged in real estate by constructing and sale of flats.

A brief summary of the financial performance of the firm is given below: Net Profit

Depreciation

(Rs. in Lakhs) Cash Profit

Year

Turnover

2006-07

2217.43

218.90

0.51

219.41

2007-08

986.36

96.04

0.39

96.43

2008-09

1051.12

102.37

0.31

102.68

M/s. D S R Builders & Developers: is a Partnership firm in which Mr.D.Sudhakar Reddy is one of the partners of the firm. The firm is engaged in real estate by constructing and sale of flats.

A brief summary of the financial performance of the firm is given below: (Rs. in Lakhs) Year

Turnover

Net Profit

Depreciation

Cash Profit

2007-08

35.69

1.22

0.00

1.22

2008-09

99.60

8.06

0.00

8.06

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M/S. Medi Mart India Private Limited.

ABOUT THE ACTIVITY  M/s. Medi Mart India Private Limited is a company to do the Business of Marketing in Medicines, Drugs, Pharmaceuticals, Cosmetics, Surgicals, Medical Instruments and Equipments in whole sale, Retail, and to set up chain stores, Marketing outlets, clinics and Laboratories.  To Carry on the business of Manufacturing, buying, selling or otherwise deal in drugs, Pharmaceuticals, Medicines, Surgicals, Lab Equipments, Bio-chemicals, Organic and inorganic Chemicals, biological products, diagnostic agents, immunological agents, veterinary products, Animal foods, Cosmetics, Fine Chemicals, Dyes and Intermediates, and all kids of by Products thereof.  To Export, Import, Manufacture, Purchase or Prepare for market and generally deal in merchandised of every kind and description used in Pharmaceutical, Medical, Surgical, Diagnostic and Drug Industry.

.

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M/S. Medi Mart India Private Limited.

LOCATIONS OF THE OUTLETS Presently, Medimart has presence in 35 various locations across Hyderabad city. Medimart Plans to open 65 more stores in Andhra Pradesh by the end of second quarter of 2010-11.So that the total out lets become 100 nos. Some of the strategic locations planned for Hyderabad are:

Alkapuri colony

Ameerpet (Durganagar)

Ameerpet(gurudwar)

Anand Nagar

A.S.Rao Nagar(Brindavan colony)

S.R.Nagar-2

Bagh Amberpet

Baghameeri, Kukatpalli

Balkampet

Balanagar -2

Boduppal(chilakanagar)

Boggulakunta

Chaitanyapuri

Charminar-2

Chintal

Film nagar, Jubille Hills

Gandhi Nagar

Golkonda Fort

IDPL colony

Huda colony(chanda nagar)

Javahar nagar

Jayanagar, kukatpalli

Kalian nagar (Dilsukhnagar)-2

Kondapur-2

KPHB 3rd Phase

Kamala nagar(Dilshuk Nagar)

Krishna Nagar-2

L.B.Nagar

Lothukunta

Madinaguda

Madhuranagar

Mahendra Hills

Mothinagar

Moulali-2

Mehdipatnam, Opp. Rythu bazaar

Miyapur-2

Nallakunta

Namalagundu

Srinagar colony

Nizampet Road-2

NGO’s bustand (Vanastalipuram)

Pragathi Nagar

Ramkoti

Sanath Nagar(Swamy theatre)

Ramnagar

Shamshabad-2

Suraram village-2

Tolichowki-2

Uppal(prashanti Nagar)

Vengal Rao Nagar

Vidya Nagar

West Marredpalli

Banjara Hills Rd. No.10

Yakootpura

Banjara Hills Road No.4

Madhapur Main Road

Vijaya Nagar colony

Mehdipatnam-2

Sanath Nagar Bus Stop-2

Ayappa Society

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M/S. Medi Mart India Private Limited.

PROPOSED COST OF THE SCHEME AND MEANS OF FINANCE

COST OF THE SCHEME:

Particulars

Rs lakhs

Furniture & Fixtures

133.00

Interiors

119.00

Computers & Software

79.00

Vehicles

11.00

Other Assets

67.00

Rent Deposits (1 lack per shop)

105.00

Preliminary & Pre operative Expenses

109.00

Working Capital Margin

127.00

Total

750.00

MEANS OF FINANCE:

Particulars

Rs lakhs

Promoters Contribution

200.00

Term Loan

250.00

Unsecured Loans from Promoters

300.00

Total

750.00

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M/S. Medi Mart India Private Limited.

WORKING CAPITAL MARGIN (Financial figures considered from the F.Y.2010-11) (Rs. in Lakhs) Amount Months Particulars

Rs in

Consumption Lakhs % of Loan

Stock of Medicines

1 ½ Month

Less: Creditors

7 days Lump sum

Margin

Loan

Money

470.00 70.00 400.00

Other Current Assets

Bank

75%

300.00 100.00

27.00

27.00

Total

427.00

300.00 127.00

Rounded Off To

427.00

300.00 127.00

Total Working Capital Requirement

Rs

427.00

Less: Bank Borrowings

Rs

300.00 Lakhs

Working Capital Margin

127.00

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Lakhs

Lakhs

M/S. Medi Mart India Private Limited.

UTILITIES

MEDICINES

Medimart purchases all its medicines from authorised distributors and stockists directly without having to deal with middlemen. This exercise helps in eliminating the middlemen and also procuring the material directly at much better margins and quality guarantee.

MAN POWER

Medimart already has 190 plus employee strength and is growing steadily. The strength of the company lies with the employees and Medimart has been successful in finding the best talent available for its operations. Medimart employs totally 4 personnel for each store. They are 3 pharmacy aides and 1 Pharmacist. Apart from the store, they employ marketing executives, projects personnel, and ware house staff on a regular basis.

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M/S. Medi Mart India Private Limited.

MARKETING ASPECT The Visibility of the store plays an important role in generating more business. Medimart stores are strategically located with good visibility and income generating locations. The interiors play an important role in drawing customers inside the store. The Interiors have been planned and designed by a leading architect who has been successful in giving them the best designs in retail pharmacy chain store. All are air-conditioned stores with hygiene as the top priority. The company wants to give different retail experience to customers

Distribution of Pamphlets and customer enrolment: Medimart has already enrolled more than 3lakh customers through its marketing team. The marketing team conducts door to door canvassing to cater to the customer needs. Diabetic, cardiac and various camps are conducted every month across the city to increase customer database. All the tests are carried out for free of cost to the customers.

Call centre: Medimart has been successful in getting a fancy call centre number which is easy to remember at all times. The customer can call on 040-23 44 44 44 for any kind of queries including deliveries between 7:00am to 11:00Pm. Free home delivery is offered to any customer within city limits. The dedicated call centre staff calls up the existing customers on a regular basis to find out their medicine requirements and intimates them the latest offers available. Medimart has developed unique call centre software to facilitate the company to send out bulk sms to all its customers regarding its monthly offers.

Tie-up with local doctors and Nursing Homes: Medimart is in talks with local doctors and nursing homes in and around the outlets for sending their patients to its outlets for their medicine requirements and also setting up stores inside their clinics and nursing homes. Presently Medimart has tied up with 4 nursing homes to setup pharmacy stores inside.

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M/S. Medi Mart India Private Limited.

Tie-up with corporate companies and Hospitals: Medimart is in talks with various corporate companies to fulfill their monthly medicine requirements and is also offering additional discounts to corporate employees as a value added feature. Medimart is also in talks with various corporate hospitals to take over the pharmacy store in their premises. These stores contribute major revenues for the company.

Tie-up with Old age Homes and NGO’s: Medimart is pleased to offer special pricing on all medicines for all old age homes and NGO’s in Hyderabad city. Presently, we supply medicines to various old age homes on a monthly basis in Hyderabad city.

Tie-up with Banks and Insurance Companies: Medimart is in talks with banks to introduce a co-branded credit card so that the card holder can get an additional discount on all medicine purchases at any of the outlets. It is also in talks with insurance companies to introduce a co-branded Health Insurance card to all customers opting for health Insurance cover. This exercise helps in immense Brand building and more customer data which in turn is additional revenue generation to the company.

Introduction of Health plus Membership Card: Medimart pharmacy Health plus Card is a Reward Programme, which enables the customers to get discounts and multiple benefits at all our outlets. There is no membership fee. All they need to do is fill the Customer Enrolment Form & they will be provided with Medimart Pharmacy Health plus card with their membership number immediately. This card works across all Medimart pharmacy outlets in India. The benefits of Health plus card are: 1. Discounts Up to 15% on all medicine purchases 2. 5% Discount on all non-Pharma products 3. Free Home Delivery 4. Free Health Camps 5. Free Prescription reminders 6. Free Purchase History

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M/S. Medi Mart India Private Limited.

SWOT ANALYSIS Strengths: 

Dr.R.Reddeppa Reddy is a consultant Anesthesiologist, is having good contacts with various hospitals and having knowledge in pharmacy trade.



The required qualified technicians, managerial personnel and skilled Man power is easily available.

Weaknesses: 

Any increase in the cost of Medicines has an impact on the selling price of the product

Opportunities: 

There is a wide demand in pharmacy outlets as population is growing.



Competition from other existing players, which may have effect on selling price

Threats:

of the medicines.

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M/S. Medi Mart India Private Limited.

SCHEDULE OF IMPLEMENTATION The Schedule provided below is based upon the project continuing in a logical sequence without interruption of implementation. Accordingly the schedule of the setting up of shops is as follows.

Year 2009-10

2010-11

Month

No. of Shops Commenced

April

0

May

8

June

13

July

15

August

18

September

19

October

19

November

22

December

35

January

40

February

50

March

60

April

67

May

74

June

81

July

88

August

95

September

100

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M/S. Medi Mart India Private Limited.

SUMMARY OF OBSERVATIONS 1. The promoters’ contribution is 26.67% of the proposed cost of the scheme. 2. The average Debt Coverage ratio of the project is 2.42 (Gross) and 2.85 (Net), which is good. 3. It is observed that the scheme of setting up of medical retail outlets is economically viable. 4.

SENSITIVITY ANALYSIS: The viability of the projections is verified by making a Sensitivity analysis by increasing the Medicines cost by 2% and also by decreasing the Selling price by 2%. The DSCR and Break Even point particulars both normal and after above said changes are indicated as under:

Parameters

Normal

2% increase in

2% decrease in

Cost of Medicines

Selling price

DSCR (Gross)

2.42

1.04

1.17

DSCR (Net)

2.85

1.05

1.22

BEP

65.60 %

84.69%

80.10%

IRR

24.76%

16.00%

17.53%

The above analysis indicates that the scheme is viable and can withstand adverse change in cost of Medicines and Selling price to an extent of 2%.

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M/S. Medi Mart India Private Limited.

ASSUMPTIONS MADE IN PROJECTIONS

1. An increase of 5% per annum is considered in salaries, repairs and maintenance and other administrative expenses from the third year onwards.

2. Depreciation provided on straight-line method as per companies act, 1956.

3. Income Tax is calculated as per the IT Act 1961.

4. Interest on term loan @ 14.25 % and on working capital worked out at 14.25 %

5. Term loan is assumed to be repaid in 5 years with a moratorium of ½ Year.

6. Credit purchase is considered from 2010-11 onwards.

7. During 2009-10, 20% margin is considered on sales as the cost of Medicines, and 17% margin is considered from 2010-11 onwards as credit period allowed by the suppliers.

8. Credit sales considered for hospitals sales from 2011-12 onwards.

9. Unsecured loans from the shareholders considered as interest free and interest not charged.

10. An increase of 10% considered on sales.

The various items of expenditure and income as considered in the projections are based on the prevailing trends in the trade industry.

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