Project Report

PROJECT REPORT

Nuvva Mars
Hotels and Resorts
Private Limited

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INTRODUTION

Nuvva Mars Hotels and Resorts Private Limited is a registered company with Register of
Companies (RoC - Hyderabad) under the provisions of Companies Act, 1956 in the year 2012.
The Company is mainly into the Resorts Industry.

1 Company Profile:

Name of the Company Nuvva Mars Hotels and Resorts Private Limited
Constitution Private Limited Company
Date of Incorporation August 17, 2012
Date of Commencement of Business April, 2016
Regd. Office ICAI Bhawan, Red Hills, Hyderabad
Location of Resort Patancheru, Hyderabad

2 ABOUT PROMOTERS

The Promoters of the Company are Mr.Naveen, Ms.Urwashi, Mr.Vinod, Mr.Vikas, Mr.Akhil,
Mr.Madhu, Ms.Anusha, Mr.Raja and Ms.Srujana who are highly qualified and have good
track record in running successful business. The Promoters are the Directors and Shareholders
of the Company.

Mr.Naveen, Managing Director

Mr.Naveen qualified Chartered Accountant, having Honours bachelor degree in

Commerce from IIMC, Hyderabad
He worked across verticals of industry just to say Management Consultancy,
Manpower supply management and hotels industry. He has vast experience of 7 years
in the areas of the above.

Ms.Urwashi, Director

Ms. Urwashi is a qualified chartered accountant from business family and has acquired
her bachelor degree in commerce from Badhruka college of commerce, Hyderabad.
she has vast experience of 10 years in the areas of Marketing and Advertisement.

Mr. Vikas, Director

Is a qualified chartered accountant and hails from business family and he is practicing
on Valuation on shares.
He has the vast experience in Share Market analysis.

Mr. Vinod kumar reddy, Director

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Is a qualified chartered accountant and experienced in internal audits

He has vast experience in audit of Airline industry and hotels.

Mr. Akhil, Director

Had Bachelor degree in Commerce from Osmania University and he has done hotel
management with internship from Taj Resorts. Had had vast experience of 10 years in Hotel
Industry.

Mr. Madhu, Director

Qualified Cost and Management accountant and worked in the industry of Hotels for a period
of 5 years and expert in the cost efficiency management.

Ms. Anusha, Director

She hails bachelor degree in Medicine from Osmania University and running a school for a
period of 8 years and she is very enthusiastic in business operations of the company.

Mr.Raja, Director

He hails bachelor degree in commerce from Sri Ram College of Commerce in Delhi and has
fresh ideas and innovative mind.

Ms. Srujana, Director

She is a qualified Company Secretary and Cost Management Accountant and in the practice
in companies act for a period of 5 years.

MANAGEMENT:
Composition of the Board of Directors of Nuvva Mars Hotels & Resorts Private Limited
(LMHRPL) is as under:

S.No Name Designation

1 Naveen Managing Director
2 Urswashi Director
3 Vinod Director
4 Vikas Director
5 Akhil Director
6 Madhu Director
7 Anusha Director
8 Raja Director
9 Srujana Director

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2.1 CAPITAL STRUCTURE:

Authorized, Subscribed and Paid-up capital

(Amount in Rs.)
Authorized Capital
45,00,000 Equity Shares of Rs.10 each 4,50,00,000

Subscribed and Paid up capital

35,00,000 Equity Shares of Rs.10 each 3,50,00,000

Shareholding pattern:

Description of Shareholding Pattern % Share Holding

Directors & Relatives 100%
Total 100%

3 PROJECT DETAILS

The entire resort construction will take place in two phases. Phase I is designed for students
aging between 9 years to 21 years. Phase II construction will take place soon which is basically
designed for adult adventure. It gives visitors unique experience and leaves them in the
adventurous world.

Phase I

Youngsters:

The Resort is in advance stage of completion of Phase I, (Students/ Youngsters) the entire
complex is theme based. The theme is being Mars. The entire resort is built in 1,00,000 sft. The
theme also boasts a Secret Tunnel, a Dungeon, an Aviary, Swimming Pool, Scary House and
several group games popular in west and in Singapore and Japan.

Phase II

Adventure Tourism for Adults

Phase II construction will take place soon which is basically designed for adult adventure.
This phase is aimed at adults mostly techno crafts working in software and similar sectors. It
gives visitors unique experience and leaves them in the adventurous world. This will a
adventure destination and will provide camping experience rappelling, mount evening, Tree
Top Adventures, Caving, Trekking and other outdoor activities and sauna, spa facilities at the
end of the day.

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3.1 Location:

The Resort is located at Patancheru, Hyderabad which is a distance of 25 kilometers from

Jubilee Bus Station, Hyderabad. The Resort is designed in such a way that public will be
attracted to the place very easily.

3.2 Land

The Land is registered in the name of the Company. The entire of Land is about 1,00,000 sfts

3.3 Manpower Requirements:

The estimated manpower requirements are as follows:

Managers and executives 10

Supervisors 5
Staff 32
Total 47

The company also conducts training programs regularly, which are oriented towards
improving knowledge, performance and personality development of the employees.

3.4 Utilities and Services:

The estimated requirements for Power, Water and Fuel are as follows:

Power : 960 units per day

Water : 14,000 liters per day
Fuel : 800 liters per day

4 INDUSTRY ANALYSIS & STRUCTURE

4.1 Overview of Market

In 2014-15, this segment of hotels are estimated to have grown by 9 per cent year on year to
reach Rs 208 billion while the overall hotel industry grew by 10 per cent year on year and
reached Rs 374 billion.

Hotels in India can be broadly classified into two segments - star hotels and hotels awaiting
classification. In addition, there are several important hotel concepts, depending on the nature
of service provided. This is independent of the broader classification standards.

In order to study the characteristics of the hotels industry, travel destinations may be classified
into two categories - business and leisure. Under both categories, hotels exhibit cyclicality,

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seasonality and different patterns of occupancy. Hotels in business destinations show greater
sensitivity to the macroeconomic environment.

After declining in 2013-14, the Revenue in business destinations is estimated to have increased
year on year in 2014-15. Also, Revenue in leisure destinations is estimated to have grown by
7 per cent year on year in 2014-15.

Hotel revenues can be classified under three broad headers - room revenues, food & beverages
(F&B) revenues and other revenues. Room revenues are a direct function of room rates and
occupancies, while F&B revenues comprise revenues from restaurants and
banquets/conventions. Other revenues largely consist of income from ancillary services
provided by the hotel such as telecommunication, laundry and transport. In terms of costs,
employee cost is the largest cost component for hotels.
(Taken from Crisil)
4.2 Future Outlook (Demand & Supply)

In phase I, we will take in school/ college kids between age 9 to 21. We estimate that students
between class 5 and Graduation in Hyderabad surrounding areas area 8 lakhs students and
in Warangal, Karimnagar, Sangareddy, Siddipet, Gajwal which are in the radius of less than
1 and 1 hours distance to the resort will account for about another 7 lakh students. Beside
students from other metro cities which target about 3 lakhs.

Total target clients for the resorts are 18 lakhs and we can service about 65,000 of them or less
than 5% of the target.

The students in schools and colleges at present are going to resorts like various other resorts
every year although none of the resorts have any special attractions for school children. All
the resorts are meant for adult primarily without exception.

This will be first resort built specifically with the youngsters in mind on par with westerns
standards. All games are group games meant to improve Management Skills, Creative Skills
and Cognitive Skills. So the so called Picnic is not mere time pass or entertainment but a
Leadership Camp where the children will not only enjoy the stay but learn in the course of
the day with a certificate of participation and prizes for winners in different events.

This concept will help in marketing as principals and parents will be compelled to send their
ward as it helps in growth & development of the child instead of mindless games and time
pass which is what is happening now.

Our resort will have a minimum of 8 event managers and a dozen events. The 300 students
who come to the resort/camp per day, will be divided into 6 groups of manageable 50 each
and each of our manager is trained to conduct that event and as soon as the event is over the
event managers hand over his wards to another event manager and collects another set of
students and repeats his Event.

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This will be professionally managed resort with a repeat client. As the Schools and colleges
are also under pressure to take their students to Picnic an annual event and when we explain
the concept schools will be more than willing to send the Student Specific Resorts without
hesitation. It will be a Win Win situation for school management, parents and the resort.

4.3 Competition:

As of now the competition is non-existence however as our concept is being unique and we
are presenting a real experience of Planet Mars it will be sometime for anybody to copy the
concept and its events. As construction of the massive structure itself will take 3 to 4 years and
still any copies will just that, as we will have a head start as original and we have enough land
we will be adding new events on regular basis to attract attention all the time.

4.4 Regulations & Policies

Requirement Approving authority

Approval of project Director General of Tourism (GOI) and
Department of Tourism of concerned state
Licence as per Shops and Establishment Act Form "K" equivalent as per state law
Catering establishment licence Municipal Corporation
Labour registration Directorate of Labour
No objection certificate from police Superintendent of Police
Fire prevention fitness Fire officer
Fitness licence for electrical installations Chief Electrical Inspections

In India, the central and state governments regulate the tourism industry. The different central
government bodies include the Department of Tourism (DoT), Central Indirect Tax
Department and Income Tax Authority. At the state level, the Directorate of Tourism of the
respective state, handles the regulation and implementation of policies. Since tourism is one
of the major foreign exchange earners in India, the central and state governments offer various
tax benefits and incentives to this industry.

5 MEANS OF FINANCE
The means of financing is as given below:
(Rs. in lacs)
Particulars Amount
Equity
- Internal Accruals 350.00
Sub-total 350.00
Debt
- Term Loan 300.00
Sub-total 300.00
Total 650.00

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6 PROFITABILITY ESTIMATES

The profitability projections of Nuvva Mars Hotels & Resorts are given in the following table.
Estimate of Cost of Production and Profitability
Particulars 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
Students capacity 800 800 800 800 800 800 800
In take of students - 280 310 340 370 420 480
Average capacity Ratio - 35 39 43 46 53 60
Package per each in take - 800 800 900 900 950 950
(including Food & Beverage)
No.of working days - 220 220 220 220 220 220
Revenue per day - 224,000 248,000 306,000 333,000 399,000 456,000
Total Annual Sales (in lakhs) - 492.80 545.60 673.20 732.60 877.80 1,003.20
Total - 492.80 545.60 673.20 732.60 877.80 1,003.20
Change in Revenue (Year by Year) - 0.00 52.80 127.60 59.40 145.20 125.40
Change in Revenue Percentage - 0.00 10.71% 23.39% 8.82% 19.82% 14.29%
(Year by Year)
COST OF PRODUCTION (in Lakh Rs)
Food & Bevarages - 123.20 145.95 172.04 194.55 231.00 274.56
Event Expenses 39.60 49.50 75.90 79.20 85.80 88.00
Water, Power & Fuel - 119.95 124.75 130.99 137.54 144.42 151.64
Salaries and Wages - 55.92 59.83 64.02 68.50 73.30 78.43
Repairs & Maintanance - 1.20 3.00 6.00 11.10 19.43 29.14
Local conveyance - 3.50 4.03 7.50 11.91 18.58 23.22
COST OF PRODUCTION - 343.37 387.06 456.45 502.80 572.52 644.99
Administrative Salaries 0.50 12.00 15.00 27.00 28.35 35.44 37.21
Selling & Advt. Expenses 3.64 44.35 43.65 47.12 36.63 30.72 30.10
Administrative overheads
COST OF SALES 4.14 399.73 445.71 530.58 567.78 638.68 712.29
Total cost of Sales 4.14 399.73 445.71 530.58 567.78 638.68 712.29
PBDIT (4.14) 93.08 99.89 142.62 164.82 239.12 290.91
Interest on Term loan - 31.76 26.10 19.77 12.71 4.81 -
Interest on Working Capital - - - - - - -
Total Interest - 31.76 26.10 19.77 12.71 4.81 -
Profit before Tax (PBDT) (4.14) 61.32 73.79 122.85 152.11 234.31 290.91
Depreciation - 36.88 38.28 40.82 43.91 49.54 57.99
Prelim Exp 0.25 - - - - - -
Profit before Tax (PBT) (4.39) 24.44 35.51 82.04 108.20 184.77 232.92
Taxation - 7.33 10.65 26.62 35.10 59.95 75.57
Profit after Tax (PAT) (4.39) 17.11 24.86 55.42 73.10 124.82 157.35

Net Profit Ratio % ( PAT / Sales ) 3.47% 4.56% 8.23% 9.98% 14.22% 15.68%

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Projected Cash Flow Statement Rs. in lacs

For the year ended 31st March 2016 2017 2018 2019 2020 2021 2022
SOURCE OF FUNDS
Share Capital 32.32 - - - - - -
Profit before Tax, Interest, Depreciation (4.14) 93.08 99.89 142.62 164.82 239.12 290.91
Provision for Expenses - 33.31 37.14 44.21 47.31 53.22 59.36
Term loan 300.00 - - - - - -
Total Sources 328.18 126.39 137.03 186.83 212.13 292.34 350.27
USES OF FUNDS
Increase in Capital Expenditure 322.03 30.00 25.00 45.00 55.00 100.00 150.00
Increase in Current Assets - 5.00 2.00 10.00 12.00 25.00 30.00
Decrease in Term Loan - 48.24 53.90 60.23 67.29 70.34 -
Interest on Term Loan SBI - 31.76 26.10 19.77 12.71 4.81 -
Provision for Expenses - Paid - - 33.00 37.00 44.00 47.00 53.00
Provision for Taxation - Paid - - 7.33 10.65 26.62 35.10 59.95
Total Uses 322.03 115.00 147.33 182.65 217.62 282.25 292.95
Opening Balance 1.23 7.38 18.77 8.47 12.65 7.16 17.26
Net Surplus (+)/Net Deficit (-) 6.15 11.39 (10.30) 4.18 (5.49) 10.09 57.32
Closing Balance 7.38 18.77 8.47 12.65 7.16 17.26 74.57

Projected Balance Sheet Rs. in lacs

Year Ended 31st March 2016 2017 2018 2019 2020 2021 2022
EQUITY & LIABILITIES
Share Capital 350.00 350.00 350.00 350.00 350.00 350.00 350.00
Reserves & Surplus (4.39) 12.72 37.58 92.99 166.09 290.91 448.26
Deferred Tax - - - - - - -
Term Loan from Bank 300.00 251.76 197.86 137.63 70.34 - -
Cash Credit - - - - - - -
Current Liabilities 0.34 40.98 48.13 71.17 82.75 113.51 135.27
Total 645.95 655.46 633.57 651.79 669.18 754.42 933.53
ASSETS
Gross Fixed Assets 625.00 655.00 680.00 725.00 780.00 880.00 1,030.00
Work in Progress - - - - -
Less: Depreciation - 36.88 73.75 112.04 152.85 196.77 246.31
Net Fixed Assets 625.00 618.12 606.25 612.96 627.15 683.23 783.69
Current Assets 13.57 18.57 18.85 26.18 34.87 53.93 75.27
Cash & Bank Balances 7.38 18.77 8.47 12.65 7.16 17.26 74.57
Preliminery Expensess - - - - - - -
Total 645.95 655.46 633.57 651.79 669.18 754.42 933.53

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Debt Service Coverage Ratio

2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
Cover
Profit After Tax (4.39) 17.11 24.86 55.42 73.10 124.82 157.35
Depreciation - 36.88 38.28 40.82 43.91 49.54 57.99
Interest on Term Loans - 31.76 26.10 19.77 12.71 4.81 -
Total (4.39) 85.75 89.24 116.00 129.72 179.17 215.34
Service
Repayment of term loan - 48.24 53.90 60.23 67.29 70.34 -
Interest on term loan - 31.76 26.10 19.77 12.71 4.81 -
Total - 80.00 80.00 80.00 80.00 75.15 -

D S C R RATIO - 1.07 1.12 1.45 1.62 2.38 -

AVERAGE D S C R 1.53

Average Debt Service Coverage Ratio is 1.53 which is much higher compared to industry.

7 SWOTANALYSIS

7.1 STRENGTHS

Promoters have vast experience in hotel industry which helps in keeping the project cost
and the property maintenance cost/problems low
Unique idea of castle based Resort.
No competitors
Promoters have a satisfactory credit history with institutions and banks
Value for money paid by the customers-quality services at comparatively low cost
Highly educated, experienced, successful personalities on the Board of the Company
Hyderabad is a fast growing economic powerhouse provides great opportunity for
hospitality industry.
Constant appreciation in the value of the properties due to increasing real estate prices.

7.2 WEAKNESS

During examination season the premises may not occupied fully need to search for other
alternatives to reach the estimates.

7.3 OPPORTUNITIES

1. Similarly with more number of people now opting for family outings and holiday travel,
business prospects have improved considerably.

2. Schools and parents are very much interested in extra-curricular activities to improve the
knowledge base of students.

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7.4 THREATS

1. Competition among the players of industry may cause revenue leakage.

8 TERMS OF SANCTION

Nature of Instrument Takeover of the existing high cost debts

Amount Rs.300 Lacs
Coupon Rate 11.25% p.a. (payable quarterly)
Repayment Schedule In 20 equal quarterly installments beginning from 1st April, 2016
and ending 31st March 2021.
Security First Charge on the Land, Building, Machineries and all
movable assets of M/s. Nuvva Mars Hotels and Resorts
Private Limited.
Unconditional and irrevocable personal guarantee of
Directors.

9 CONCLUSION & RECOMMENDATIONS

Nuvva Mars Hotels and Restores is unique business idea and give results in expected way
and management is well known for its superior service delivery already in the manpower and
cleaning services and the same will continue here in hotels & resorts industry. Considering
this, the resort may not face any difficulty in achieving its marketing projections. Promoters
are professionally qualified and have proven track records in the industry. The past track
record of the company with various Financial Institution's & Banks has been satisfactory.

NAHRPL proposes to borrow term loan of Rs 300 lacs and Secured Loan for construction of
resort. After including the up-front fee of 0.50%, the effective yield works out to 11.25% p.a.
In view of the satisfactory affairs and comfortable financial position of the company and
proposed scheme looks technically feasible and financially viable, we recommend that the
Bank subscribe to Term Loan of NAHRPL aggregating to Rs.300 lacs.

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