Pre-Feasibility Study

(Layer Farm)

Small and Medium Enterprises Development Authority

Ministry of Industries & Production
Government of Pakistan
[Link]
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@[Link]
REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE
Punjab Sindh Khyber Pakhtunkhwa Balochistan
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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
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[Link]@[Link] helpdesk-khi@[Link] helpdesk-pew@[Link] helpdesk-qta@[Link]

Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost
December, 2013
 Table of Contents
1. DISCLAIMER........................................................................................................................................2
2. PURPOSE OF THE DOCUMENT.......................................................................................................3
3. INTRODUCTION TO SMEDA............................................................................................................3
4. INTRODUCTION TO SCHEME.........................................................................................................4
5. EXECUTIVE SUMMARY....................................................................................................................4
6. BRIEF DESCRIPTION OF PROJECT & PRODUCT......................................................................5
7. CRITICAL FACTORS..........................................................................................................................5
8. INSTALLED & OPERATIONAL CAPACITIES..............................................................................5
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT...................................................................6
10. POTENTIAL TARGET MARKETS.................................................................................................6
11. LAYER PRODUCTION PROCESS..................................................................................................6
11.1 SELECTION OF DAY OLD CHICKS........................................................................................6
11.2 PRE-BROODING MANAGEMENT...........................................................................................6
11.3 BROODING, REARING AND LAYING MANAGEMENT......................................................7
11.4 FEEDING...........................................................................................................................................................................7
11.5 DISEASE PREVENTION AND CONTROL...............................................................................8
11.6 HOUSE TEMPERATURE AND VENTILATION......................................................................9
11.7 CULLING OF UNPRODUCTIVE LAYERS...............................................................................9
12. PROJECT COST SUMMARY...........................................................................................................9
12.1. PROJECT ECONOMICS.............................................................................................................9
12.2. PROJECT FINANCING.............................................................................................................10
12.3. PROJECT COST.............................................................................................................................................................10
12.4. SPACE REQUIREMENT...........................................................................................................11
12.5. MACHINERY & EQUIPMENT...................................................................................................................................11
12.6. FURNITURE AND FIXTURE...................................................................................................11
12.7. RAW MATERIAL REQUIREMENTS......................................................................................11
12.8. HUMAN RESOURCE REQUIREMENT..................................................................................12
12.9. REVENUE GENERATION.......................................................................................................12
12.10. OTHER COSTS..............................................................................................................................................................12
13. CONTACT DETAILS OF SUPPLIERS AND CONSULTANTS.................................................13
14. ANNEXURE.......................................................................................................................................14
14.1. INCOME STATEMENT.................................................................................................................................................14
14.2. CASH FLOW STATEMENT.........................................................................................................................................15
14.3. BALANCE SHEET.........................................................................................................................................................16
14.4. USEFUL PROJECT MANAGEMENT TIPS.............................................................................17
14.5. USEFUL LINKS.............................................................................................................................................................18
15. KEY ASSUMPTIONS.......................................................................................................................19
Pre-Feasibility Study Layer Farm

1. DISCLAIMER
This information memorandum is to introduce the subject matter and provide a
general idea and information on the said 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 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, 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:
[Link]

SMEDA Services / Information related to PM’s Youth Business Loan are FREE OF COST - 2
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, production, marketing, finance and business
management.
The purpose of this document is to facilitate potential investors in layer farming
by providing them a general understanding of the business with 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 it’s 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 and 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 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 Minister’s 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).
Small business loans up to 2 million with tenure up to 8 years, inclusive of 01
year grace period 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).
5. EXECUTIVE SUMMARY
Commercial layer farms contribute about 70% towards total egg production in
Pakistan, whereas the remaining 30% comes from rural poultry. The Day Old
Chicks (DOCs) of layer are procured from hatcheries and breeder companies.
These are brooded and reared for a period of 6 months after which, they start
laying eggs for a period of next 12 months. On an average, one hen lays about
300-350 eggs. The price of egg varies with demand and supply and is generally
higher in winter. As these birds stop laying or feed-efficiency drops, the layers
are culled and sold in market. The selling price of these birds is determined on
live body weight basis.
Layer farm management in line with best husbandry practices is vital for the
success of this business. All farm operations would be done with strict
compliance to recommended husbandry practices including standard hygiene,
proper temperature, humidity, vaccination, medication, feeding and lighting
management.
A conventional farm of 5,000 layers is suggested in this pre-feasibility study,
which may be started in a rented, purpose built building / shed requiring a total
estimated investment of Rs 2.22 million. This includes a capital investment of Rs.
0.20 million and working capital of Rs. 2.02 millions. The Net Present Value
(NPV) of the project is around Rs. 24.17 million with an Internal Rate of Return
(IRR) of 84% and a payback period of 2.12 years. The project will generate direct
employment for 02 persons. Higher return on investment and a steady growth of
business is expected with the entrepreneur having some prior experience in the
related field of business.
6. BRIEF DESCRIPTION OF PROJECT & PRODUCT
In the proposed layer farm, the Day Old Chicks (DOCs) of commercial layer
strain (e.g. Hy-Line W-36) are brooded and reared on specially formulated feed
for a period of six months. After that, layers start laying eggs with changed
feeding regime for next 12 months. Purpose built conventional farm having shed
space of 8,750 sq. ft. will be acquired on rental basis. On an average, one bird
lays about 300-350 eggs, after which, the layers are culled and sold in the market
on live body weight basis to traders and wholesalers.
One flock is housed for 1.5 years at the same farm. In this pre-feasibility, a layer
farm of 5,000 layers is recommended. The layer is ready to lay eggs in October /
November. The demand for eggs increases during winter season, hence fetching
higher prices.
Eggs are packed in paper or plastic trays, sold in bulk in wholesale markets.
Losses in eggs business can be minimized by following careful transportation
methods as eggs are prone to damage during transportation. In this study,
estimated average price of eggs is taken as Rs. 100 per dozen.

7. CRITICAL FACTORS
 Background knowledge and related experience of the entrepreneur in
commercial layer farm operations.
 Application of good poultry husbandry practices such as timely feeding,
watering, lighting, vaccination, medication, temperature / humidity control
and culling of uneconomical layers to ensure flock’s best performance and
higher efficiency in disease-free environment.
 Awareness of supply and demand of eggs in the market. The farm gate
price of eggs is usually higher in winter as compared to summer.
 Efficient marketing of the project and bulk supply to wholesalers.

8. INSTALLED & OPERATIONAL CAPACITY

In the proposed study, all calculations have been based on revolving flock size of
5,000 layers, kept for 1.5 years. There will be a lag time of one month for
cleaning and disinfection and necessary arrangements for preparation of next
flock. The flock will produce 10,287 dozen eggs per month.
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT
Rural and peri-urban and rural areas around big cities e.g. Rawalpindi, Lahore,
Multan, Karachi, Hyderabad, Sukkur, Quetta, Ziarat, Peshawar, Charsadda,
Abbotabad and Swat are recommended for starting a layer farm. Setting up a
farm at an isolated place will minimize the risk of diseases. Proximity of farms to
cities enables the farmer to develop easy links with the market for the purchase
of farm inputs and for selling eggs and culled birds.

10. POTENTIAL TARGET MARKETS

Layer farming is a profitable venture. Sale is channelized through dealer
contracts on farm gate basis or supplied in bulk to the wholesalers or bulk
buyers. There are bakeries and confectioneries that need daily supply of eggs for
their production. The wholesale and retail price of eggs and poultry meat is
determined daily on demand and supply dynamics.

11. LAYER PRODUCTION PROCESS

Layer farming must begin with a clean and sanitized shed. The layout of open
conventional shed should be north-south to ensure clean, dry and well-ventilated
shed, as this provides fresh air and carries off humidity. The shed should remain
empty at least two weeks after disinfection and fumigation to control disease
outbreaks through removal of debris and exposure of surfaces to fumigants.
11.1 Selection of Day Old Chicks

For the proposed project, strain of White Leghorn breed i.e. Hy-Line W-36 is
recommended as it is considered the most efficient layer with excellent livability
and good egg production capacity. It lays dozens of good quality and strong
shelled eggs at minimum feed intake. The DOCs procured from reliable
hatcheries should be of uniform size, active, alert and bright eyed. The skin of
shanks of healthy chicks should be bright and shiny.
11.2 Pre-Brooding Management

 Cleaning and disinfection of equipment, building interior and attached areas is

advised. Disinfectants can be prepared with Phenol, Potassium
Permanganate, Carbolic Acid and Formalin. A solution of Sodium
Hydroxide/Caustic Soda with warm water can also be used for cleaning. The
equipment requires regular cleaning with water.
 Farm is sanitized by fumigation with Formaldehyde gas, produced by putting
Formalin on Potassium Permanganate. The rooms should be vacant and
sealed for 30 minutes after fumigation so that the gas infiltrates in every
corner.
 Litter is spread on the floor to prevent direct contact with the floor. Rice-husk
and sawdust are generally used for making the litter. It should be dry and free
of moulds. Caked or moldy material should be removed and refilled with fresh
materials. Extensively wet and dusty litter should also not be used. Using new
litter for each flock is good for raising disease-free layer.
 Ensure proper ventilation and temperature.
 Remove all leftover feed from bins, hoppers and troughs.
 Place rodenticide out of the reach of DOCs.
 Check regularly the availability of water and feed for chicks.
11.3 Brooding, Rearing and Laying Management

 The DOCs should arrive at the farm early in the morning so that the
management has a full day to observe them for any issues.
 Flushing should be done by offering 250 gm glucose per gallon of water as
readily available source of energy and to clear the digestive tract.
 The brooder is an essential part of layer farming, also known as, ‘Artificial
Mother’ as it provides necessary heat to DOCs shortly after arrival till 7 days
of age. The temperature for brooders should be 99 oF, encircled by chick
guard sheets.
 Keep light at high intensity 20–22 hours per day for the first week. Closely
regulate temperature of shed.
 Starter feed should be offered as a source of energy to chicks as it is easily
digestible and a good source of energy.
 During the first six weeks, offer feed twice a day. After six weeks, feed
consumption and body weights should be monitored against the given charts
provided by DOCs suppliers.
 Follow the recommended vaccination schedule.
 Remove dead birds immediately and dispose them properly. Send the dead
birds to lab for postmortem examination if there is excessive mortality.
 At laying stage, properly placed nests are required so that layers could
produce eggs without any hindrance.
11.4 Feeding

Feeding requirement during laying period depends on the rate of egg production
and the body weight of layers. The birds require more feed in winter and less
feed in summer. During summer months, the flock is under severe stress and
therefore, it is suggested to temporarily change the feed to a higher level of
protein content. The actual feed consumption may be influenced by several
factors as follows;
 Health, physical condition and body weight of the bird.
 Rate of egg production.
 Weather condition.
 Feed quality such as protein and energy contents of feed.

The layers are fed following types of feed;

 Chick Starter (Mash or crumb form): fed for one month

 Grower (Mash or crumb form): fed from second to sixth month
 Layer (Mash/ crumbs/ pallet): fed during laying period
Feeding three or four times daily will stimulate feed intake and prevents wastage.
There are many feed mills that prepare above mentioned formulated feed.
11.5 Disease Prevention and Control

 Use effective medicines to prevent coccidiosis.

 Keep feed free from aflatoxins.
 Follow bio-security plans by not allowing visitors or attendants to enter
sheds without disinfected boots and clothes.
 Start daily farm operations from youngest group of birds.
 Mortality losses should be kept below 5% by timely prophylactic measures
(vaccination, medication, disinfection etc.). The New Castle Disease, Egg
Drop Syndrome and Avian Influenza are extremely dangerous diseases
and can eradicate the entire flock. Following is a typical vaccination
schedule for layers1;

Table 1: Vaccination Schedule for Layers

Age in Days Disease Vaccination Procedure

0 Maerk’s Disease Sub Cut (At hatchery)
1 to 2 IB (H 120) Eye drop/ aerial spray
5 to 7 New Castle Disease Eye drop/ aerial spray
Infectious Bursal Disease Eye drop/ aerial spray
9
(IBD) Gumboro
16 Infectious Bursal Disease (IBD) Eye drop/ aerial spray
1
As per recommendions of Poultry Research Institute (PRI), Rawalpindi
 Gumboro
18 Hydro Pericardium Sub Cut
22 ND+IB Eye drop
28 IB Eye drop
42 Fowl Pox Sub Cut (Wing web)
55 ILT Eye drop
60 Avian Influenza Sub Cut
65 ND+IB Sub Cut
90 Avian Influenza Sub Cut/IM
105 Avian Influenza Sub Cut/IM
110 ND+IB Drinking Water
118 to 120 EDS+IB Sub-cut/ Drinking Water
Sub cut: Sub Cutaneous (under skin), IM: Intra Muscular
11.6 House Temperature and Ventilation

The temperature in shed after brooding stage should be maintained at 75 o F.

Proper ventilation is necessary to maintain temperature, relative humidity,
Oxygen, CO2 and Ammonia at recommended levels. The air movement
requirements are best determined by observing bird comfort, litter condition and
odor build up. If necessary, exhaust fan may be installed.
11.7 Culling of Unproductive layers

Layers with poor efficiency and performance should be culled to minimize the
cost of production. The birds that have laid well for short period but have stopped
laying for some reason should be culled. The sale price of culled birds in this
study is taken as Rs. 160/ bird according to market sources.

12. PROJECT COST SUMMARY

A detailed financial model has been developed to analyze the commercial
viability of layer farming. Various cost and revenue related assumptions along
with results of the analysis are outlined in this section.
The projected Income Statement, Cash Flow Statement and Balance Sheet are
attached as appendix.
12.1. Project Economics

All the figures in this financial model have been calculated for a flock of 5,000
layer birds kept for 1.5 years at rented premises. It is assumed that one layer
would be able to produce 315 eggs per laying period of one year, with an
estimated 1% loss through breakage, resulting in availability of 312 eggs per bird
per year.
The following table shows Internal Rate of Return, payback period and Net
Present Value;
Table 2: Project Economics
Description Details
Internal Rate of Return (IRR) 84%
Payback Period (Yrs) 2.12
Net Present Value (NPV) 24,170,783

Return on investment and its profitability are highly dependent on the

entrepreneur having some practical knowledge about layer farming.
12.2. Project Financing

Following table provides details of the equity required and variables related to
bank loan;
Table 3: Project Financing
Description Details
Total Equity (10%) Rs.222, 170
Bank Loan (90%) Rs. 1,999,528
Markup to the Borrower (%age/annum) 8%
Tenure of the Loan (Years) 8
Grace Period (Year) 1
12.3. Project Cost

Following requirements have been identified for operations of the proposed

business.
Table 4: Capital Investment for the Project
Capital Investment Amount (Rs.)
Machinery & equipment 182,500
Furniture & fixtures 20,000
Total Capital Costs 202,500
Raw material inventory (incl. cost of DOCs) 1,861,198
Upfront building rent 90,000
Cash 68,000
Initial Working Capital 2,019,198
Total Project Cost 2,221,698
 12.4. Space Requirement

Following table shows calculations for project space requirements;

Table 5: Farm Space Requirements
Description Area (Sq. ft)
Shed space 8,750
Feed store 64
Room for workers 144
Pavement/ Boundary walls 510
Total Area 9,468
Monthly rent for the premises is Rs. 15,000.
12.5. Machinery & Equipment

Following table provides list of machinery and equipment for layer farm;
Table 6: Farm Machinery Details
Capacity Cost Total Cost
Description Quantity
Birds/unit Rs./unit Rs.
Brooders 500 10 3,500 35,000
Water drinkers 100 100 300 30,000
Feeders 30-35 150 250 37,500
Nests 20-25 200 200 40,000
Water tank (500 Liters) 1 8,000 8,000
Water pump 1 20,000 20,000
Plastic egg trays 240 50 12,000
Total Machinery & Equipment 182,500
12.6. Furniture and Fixture

Following furniture will be required at the farm;

Table 7: Furniture Costs
Description Unit Total Cost (Rs)
Furniture (Tables, chairs etc.) Lump sum 20,000
Total Furniture & Fixtures 20,000
12.7. Raw Material Requirements

Following table shows raw material requirements for proposed project.

Table 8: Cost of Material
Description Unit Quantity Rate Cost
 (Rs./ Unit) (Rs.)
year-1
Day Old Chicks Per DOC 5,000 70 350,000
Total feed cost Bags 2,182.5 2,100 4,583,250
Vaccination, medication and Per Bird 5,000 20 100,000
disinfection
Litter (saw dust or rice husk) Per Flock 1 25,000 25,000
Spray cost Per Flock 1 20,000 20,000
Brooding cost Per Flock 1 75,000 75,000
Direct labour per annum Per month 22,000 264,000
Electricity* Per bird 2.00 114,000
Total 5,531,250
* Electricity cost is estimated at Rs. 2.0 per bird per month for 4,750 birds (after 5% mortality)

12.8. Human Resource Requirement

Two semi-skilled workers are needed to look after the general poultry husbandry
operations. Salaries are increased at 15% annually.
Table 9: Farm Staff Requirements

Description No. Monthly Salary Total Annual

(Rs) Salary (Rs)
Farm Manager/Owner 1 12,000 1,44,000
Farm Labour 1 10,000 1,20,000
Total Staff 2 2,64,000
12.9. Revenue Generation

The revenue in first year would be generated at 6th month when birds start to lay.
Table 10: Revenues Generation
Description Unit Sale Price First Year Revenue in Year 1
Rs./Dozen Production (Rs.)
of eggs (Dozens)
Eggs Dozen 100 61,720 6,172,031
Total Revenue 6,172,031
12.10. Other Costs

An essential cost to be borne by the farmer is electricity expense which is

estimated to be Rs. 2.0 per bird. Fixed electricity cost for the rest of the area is
estimated to be Rs. 1,000 per month.
13. CONTACT DETAILS OF SUPPLIERS AND CONSULTANTS
Table 11: Contacts of Suppliers and Consultants
Machinery & Equipment Suppliers
Biovet (Pvt.) Ltd. Eastern Veterinary Services
97-A, Jail Road Lahore 4- C Chuburji Center, Near Venus Cinema,
Ph: 042-37534508 Multan Road, Lahore.
Ph: 042-37417649-50
DOC Suppliers
C & K Poultry Equipments, Kamboh SB Chicks
Brothers Poultry, Grain Market, 48-C, Satellite Town, Near Chandni Chowk,
Samundari. Rawalpindi
Ph: 041-3420581 Ph: 051-4457 551-60
Poultry Feed Suppliers Consultants
Supreme Feeds (Pvt.) Ltd. Prof. Dr. M. Akram
Head Office: 176-Shadman 1, Lahore. Department of Poultry Production,
Ph: 042-37522104-7 Uni. Of Veterinary and Animal Sciences
(UVAS), Lahore
Ph: 042-99211461
Ghazi Brothers Dr. Abdul Rehman
Ghazi House, D-35, KDA Scheme, No. 1, Director,
Miran Muhammad Shah Road, Karachi Poultry Research Institute, Shamsabad,
Ph: 021-111250365 Murree Road, Rawalpindi
Ph: 051-9290163-5
Asia Feed (Pvt.) Ltd. Dr. Fawwad Ahmad
359 Shamsabad Colony, Humayun Road Faculty of Animal Husbandry, University of
Multan. Agriculture, Faisalabad
Ph: 061-6224414 Ph: 041-9920161-70
Pre-Feasibility Study Layer Farm

14. ANNEXURE
14.1. Income Statement

Statement Summaries SMEDA

Income Statement
Rs. in actuals
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Revenue 6,172,031 7,831,075 14,194,026 8,378,091 14,239,367 16,315,842 11,770,614 24,553,417 17,828,676 16,536,865
Cost of goods sold 5,531,250 5,756,775 6,976,581 6,836,414 8,136,819 8,949,535 9,208,424 11,477,406 11,482,246 12,422,427
Gross Profit 640,781 2,074,300 7,217,445 1,541,677 6,102,548 7,366,307 2,562,190 13,076,011 6,346,430 4,114,438

General administration & selling expenses

Rental expense 180,000 198,000 217,800 239,580 263,538 289,892 318,881 350,769 385,846 424,431
Utilities expense 24,000 27,600 31,740 36,501 41,976 48,273 55,513 63,840 73,417 84,429
Depreciation expense 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250
Amortization expense - - - - - - - - - -
Subtotal 224,250 245,850 269,790 296,331 325,764 358,414 394,644 434,860 479,513 529,110
Operating Income 416,531 1,828,450 6,947,655 1,245,346 5,776,784 7,007,892 2,167,545 12,641,151 5,866,917 3,585,328

Earnings Before Interest & Taxes 416,531 1,828,450 6,947,655 1,245,346 5,776,784 7,007,892 2,167,545 12,641,151 5,866,917 3,585,328

Interest expense 165,960 151,938 133,508 113,549 91,934 68,524 43,171 15,714 - -
Earnings Before Tax 250,571 1,676,512 6,814,146 1,131,796 5,684,850 6,939,369 2,124,374 12,625,437 5,866,917 3,585,328

Tax - - - - - - - - - -
NET PROFIT/(LOSS) AFTER TAX 250,571 1,676,512 6,814,146 1,131,796 5,684,850 6,939,369 2,124,374 12,625,437 5,866,917 3,585,328

Balance brought forward 250,571 1,927,084 8,741,230 9,873,026 15,557,876 22,497,245 24,621,619 37,247,056 43,113,974
Total profit available for appropriation 250,571 1,927,084 8,741,230 9,873,026 15,557,876 22,497,245 24,621,619 37,247,056 43,113,974 46,699,302
Dividend - - - - - - - - - -
Balance carried forward 250,571 1,927,084 8,741,230 9,873,026 15,557,876 22,497,245 24,621,619 37,247,056 43,113,974 46,699,302

SMEDA Services / Information related to PM’s Youth Business Loan are FREE OF COST - 14
 14.2. Cash Flow Statement

Statement Summaries SMEDA

Cash Flow Statement
Rs. in actuals
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 - 250,571 1,676,512 6,814,146 1,131,796 5,684,850 6,939,369 2,124,374 12,625,437 5,866,917 3,585,328
Add: depreciation expense - 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250 20,250
- - - - - - - - - - -
Raw material inventory (1,365,948) (175,680) (744,099) 97,803 (710,565) (948,260) (29,291) (1,555,371) (1,024,502) (410,730) 6,866,643
Pre-paid building rent (15,000) (1,500) (1,650) (1,815) (1,997) (2,196) (2,416) (2,657) (2,923) (3,215) 35,369
Pre-paid lease interest - - - - - - - - - - -
Accounts payable - 17,054 2,372 4,312 (357) 5,753 3,920 2,377 8,436 3,235 (19,748)
Other liabilities - - - - - - - - - - -
Cash provided by operations (1,380,948) 110,696 953,386 6,934,696 439,128 4,760,397 6,931,832 588,973 11,626,698 5,476,457 10,487,842

Financing activities
Change in long term debt 1,999,528 - (222,043) (240,472) (260,432) (282,047) (305,457) (330,810) (358,267) - -
Change in short term debt - - - - - - - - - - -
Issuance of shares 222,170 - - - - - - - - - -
Purchase of (treasury) shares - - - - - - - - - - -
Cash provided by / (used for) financing act 2,221,698 - (222,043) (240,472) (260,432) (282,047) (305,457) (330,810) (358,267) - -

Investing activities
Capital expenditure (202,500) - - - - - - - - - -
Acquisitions - - - - - - - - - - -
Cash (used for) / provided by investing act (202,500) - - - - - - - - - -

NET CASH 638,250 110,696 731,343 6,694,224 178,696 4,478,349 6,626,375 258,163 11,268,431 5,476,457 10,487,842

Cash balance brought forward 638,250 748,946 1,480,288 8,174,512 8,353,208 12,831,558 19,457,933 19,716,096 30,984,527 36,460,984
Cash available for appropriation 638,250 748,946 1,480,288 8,174,512 8,353,208 12,831,558 19,457,933 19,716,096 30,984,527 36,460,984 46,948,826
Dividend - - - - - - - - - - -
Cash carried forward 638,250 748,946 1,480,288 8,174,512 8,353,208 12,831,558 19,457,933 19,716,096 30,984,527 36,460,984 46,948,826
 14.3. Balance Sheet

Statement Summaries SMEDA

Balance Sheet
Rs. in actuals
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 638,250 748,946 1,480,288 8,174,512 8,353,208 12,831,558 19,457,933 19,716,096 30,984,527 36,460,984 46,948,826
Accounts receivable - - - - - - - - - - -
Raw material inventory 1,365,948 1,541,628 2,285,727 2,187,924 2,898,489 3,846,750 3,876,041 5,431,412 6,455,913 6,866,643 -
Pre-paid annual land lease - - - - - - - - - - -
Pre-paid building rent 15,000 16,500 18,150 19,965 21,962 24,158 26,573 29,231 32,154 35,369 -
Pre-paid lease interest - - - - - - - - - - -
Total Current Assets 2,019,198 2,307,074 3,784,165 10,382,401 11,273,659 16,702,465 23,360,547 25,176,738 37,472,594 43,362,996 46,948,826

Fixed assets
Building/Infrastructure - - - - - - - - - - -
Machinery & equipment 182,500 164,250 146,000 127,750 109,500 91,250 73,000 54,750 36,500 18,250 -
Furniture & fixtures 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 -
Office vehicles - - - - - - - - - - -
Office equipment - - - - - - - - - - -
Total Fixed Assets 202,500 182,250 162,000 141,750 121,500 101,250 81,000 60,750 40,500 20,250 -

Intangible assets
Pre-operation costs - - - - - - - - - - -
Total Intangible Assets - - - - - - - - - - -
TOTAL ASSETS 2,221,698 2,489,324 3,946,165 10,524,151 11,395,159 16,803,715 23,441,547 25,237,488 37,513,094 43,383,246 46,948,826

Liabilities & Shareholders' Equity

Current liabilities
Accounts payable - 17,054 19,427 23,739 23,382 29,135 33,056 35,433 43,868 47,103 27,355
Export re-finance facility - - - - - - - - - - -
Short term debt - - - - - - - - - - -
Other liabilities - - - - - - - - - - -
Total Current Liabilities - 17,054 19,427 23,739 23,382 29,135 33,056 35,433 43,868 47,103 27,355

Other liabilities
Long term debt 1,999,528 1,999,528 1,777,485 1,537,013 1,276,581 994,534 689,077 358,267 - - -
Total Long Term Liabilities 1,999,528 1,999,528 1,777,485 1,537,013 1,276,581 994,534 689,077 358,267 - - -

Shareholders' equity
Paid-up capital 222,170 222,170 222,170 222,170 222,170 222,170 222,170 222,170 222,170 222,170 222,170
Retained earnings - 250,571 1,927,084 8,741,230 9,873,026 15,557,876 22,497,245 24,621,619 37,247,056 43,113,974 46,699,302
Total Equity 222,170 472,741 2,149,253 8,963,400 10,095,196 15,780,046 22,719,415 24,843,789 37,469,226 43,336,143 46,921,472
TOTAL CAPITAL AND LIABILITIES 2,221,698 2,489,324 3,946,165 10,524,151 11,395,159 16,803,715 23,441,547 25,237,488 37,513,094 43,383,246 46,948,826

Note: Total assets value will differ from project cost due to first installment of leases paid at the start of year 0
Pre-Feasibility Study Layer Farm

14.4. Useful Project Management Tips

Technology
 List of Machinery & Equipment: (As per Section 12.5)
 DOCs Selection: Selection of disease free birds with strain
characteristics, body conditions and health.
 Feed, Vaccination and Medication: Should be procured from reputed and
reliable sources.
 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 after sales services under the
contract with the machinery suppliers
 Quality Assurance & Standards: Quality standards need to be defined on
the ear tags and a system of record keeping to check them to improve
credibility
Marketing
 Product Development & Packaging: Experts’ help may be engaged for
packaging
 Advertisements & 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
 List of Human Resource: (As per Section 12.8)
 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.

SMEDA Services / Information related to PM’s Youth Business Loan are FREE OF COST - 17
 Performance Based Remuneration: Efforts to manage human resource cost
should be focused through performance measurement and performance based
[Link] & Skill Development: Encouraging training and skills
development of self & employees through experts and exposure of best
practices helps in continuous improvements in the business. Least cost options
for Training and Skill Development should be developed and linked with
compensation benefits and awards.
14.5. Useful Links

 Prime Minister’s Office, [Link]

 Government of Pakistan, [Link]
 Ministry of Industries & Production, [Link]
 Ministry of National Food Security & Research, [Link]
 Ministry of Education, Training & Standards in Higher Education,
[Link]
 Government of Punjab, [Link]
 Government of Sindh, [Link]
 Government of Khyber Pakhtunkhwa, [Link]
 Government of Balochistan, [Link]
 Government of Gilgit Baltistan, [Link]
 Government of Azad Jamu Kashmir, [Link]
 Trade Development Authority of Pakistan (TDAP), [Link]
 Securities & Exchange Commission of Pakistan (SECP), [Link]
 Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
 [Link]
 Punjab Board of Investment & Trade (PBIT), 23-Aikman Road, GOR-I, Lahore
Tel. 042-99205201, [Link]
 Sindh Board of Investment (SBI), 1st Floor, Tower B, Finance & Trade Center,
Shahra-e-Faisal, Karachi, Tel. 021-99207512-4, [Link]
 State Bank of Pakistan (SBP), [Link]
 National Bank of Pakistan (NBP), [Link]
 First Women Bank Limited (FWBL), [Link]
 Pakistan Poultry Association (PPA), Islamabad, [Link]
 Pakistan Agricultural Research Council (PARC), Park Road, Islamabad Tel. 051-
9203966, [Link]
 National Agricultural Research Centre (NARC), Islamabad, Tel. 051-9255061,
[Link]
 National Veterinary Laboratory, NARC, Islamabad Tel. 051-9255108
 University of Agriculture, Faisalabad, [Link]
 Lasbela University of Agriculture, Water & Marine Sciences, Lasbela,
[Link]
 Sindh Agriculture University, Tondojam, [Link]
  Gomal College of Veterinary Sciences, Dera Ismail Khan, [Link]
 KPK Agricultural University, Peshawar, [Link]
 Pir Mehr Ali Shah Arid Agricultural University, Rawalpindi, [Link]
 University College of Veterinary & Animal Sciences, Islamia University Bahawalpur
(IUB), [Link]
 University of Veterinary & Animal Sciences (UVAS), Out Fall Road, Lahore,
[Link]
 Bahauddin Zakariya University (BZU), Multan, [Link]
 Veterinary Research Institute (VRI), Ghazi Road, Lahore Cantt., Tel. 042-
99220140
 Agribusiness Support Fund (ASF), Lahore, [Link]
 Poultry Research Institute (PRI), Rawalpindi, Tel: 051-9290162, 9290173,
[Link]
 Livestock & Fisheries Department, Government of Sindh, [Link]
 Agriculture & Livestock Department, Government of KPK,
[Link]
 Livestock & Dairy Development, Government of Balochistan,
[Link]

15. KEY ASSUMPTIONS

Table A: Revenue Assumptions
No. of birds per flock 5,000
No. of eggs laid/layer/year 315
Egg Loss (%) 1
No. of eggs per bird per year (Sale) 312
No. of eggs per bird per month 26
Selling price (Rs. Per dozen) 100
Culled birds sale price (Rs) 160
Table B: Expense Assumptions
DoC price (Rs.) 70
Vaccination cost per bird (Rs) 20
Feed cost/bag of 50 kgs. (Rs.) 2,100
Feed/bird/month (Laying period) Kgs. 3