Business Expansion Plan

RAJAGIRI

Requesting financial assistance for LKR.10.00 Mio.,

repayable over 60 Months, in order to meet the

Renovations taken place in the Hotel-Rajagiri. Funds

will be used to part finance the construction works on

the Take-away outlet on the front side of the hotel and

to expand the existing Reception hall.

2011

2

Contents

Vision / Mission

Management Structure

Business Profile

Locations/ Sceneries

Accounts Summary

Purpose

Profit & Loss Projections

Marketability/ Bankers

Cash-flow Statement

Assessment of Risks

Page No.

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Our Vision

Our Mission

To be the number one

in highest quality, yet

affordable in hotel

restaurant trade.

We will be the highly

service oriented and the

premier in hotel cafeteria

beyond the customer

expectations, while

managing and expanding

the hotel effectively in a

sustainable manner.

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MANAGEMENT

STRUCTURE

5

BUSINESS PROFILE

Nowadays, occasions such as wedding receptions, parties or conference can be held

anywhere from a favourite neighbourhood restaurant or traditional banquet hall, to

museums or day spa hotels, and even on the high seas.!

Very special occasion like for wedding receptions, first it's always best to shop

around for several locations in closest area to see what's on offer and within budget

and always consider booking your venue at least several months to a year in advance,

say the experts.

First step, of course is determining how many people will be invited, the option of

location sites for photographs and the rates/ package offers. It’s wise to shop around

for the right size wedding hall, also better to think about what reception venue will

best reflect the style and mood of your wedding – formal, formal and fun, or kick-

back casual.?

is the restaurant/ cafeteria with reception hall facilities, located at

Kegall – Avissawella main road which is a idyllic and specious place where anyone

can have fine dining restaurant facilities where the food is served in the indoor or

open-air restaurant as desire with beautifully landscaped quiet surroundings. The

hotel consists of two reception halls; air-condition rooms with cable TV, telephone

with IDD facilities with 24-hours room service.

Two reception halls can be function for Weddings, Home-comings, Conferences etc.,

along with the restaurant/ lodging facilities, ideal for middle & upper class people

who concerned about the fine-cuisines/ warm welcome & better-service/ calm &

quiet/ eco-friendly place yet matches their budget.

Take-Away outlet is on the front side of the main hotel-restaurant and faced to the

Kegall – Avissawella main road, is a very popular among people due to high quality

of the food which is very appetizing with warm and quicker service with affordable

rate.

BACK GROUND OF THE INVESTOR

Mr. Rajapakshe Mohottige Don Naminda Namal Rajapakshe, aged 38-year is the

manager/ proprietor of the Rajagiri-hotel, who is studied in hotel management/ food

& beverage who is also having five years self experience in managing his own hotel

and able to start the hotel-business and able to build it from the grace-root level up

this level.

Rajagiri

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HOTEL LOCATIONS & SOME SCENERIES

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SUMMARY OF THE BALANCE SHEET/ PROFIT &

LOSS HIGHLIGHTS FOR PAST THREE YEARS .

01/04/10 - 31/03/11

LKR '000 01/04/09 - 31/03/10

LKR '000 01/04/08 - 31/03/09

LKR '000 FIXED ASSETS Furn & Fitts 665 560 369 Machinery 564 452 282 Vehicles 4,120 2,631 1,030 Land & Buildings

16,500 4,800 12,370

21,849 18,443 14,051 CURRENT ASSETS Cash 1,268 854 529

Accounts 825 2,093 525 1,379 228 757 23,942 19,822 14,808 EUITY Reserves 19,321 17,028 12,604 Add : Net Profit

4,911 4,574 3,051

24,232 21,602 15,655 Less : Drawings

3,683 3,430 1,317

20,549 18,172 14,338 CURRENT LIABILITIES Bank OD 250 250 250 Loans - - 220 Leases 3,143 3,393 1,400 1,650 - 470 23,942 19,822 14,808

Sales 15,348 13,704 9,839 Less : Cost of Sales Purchases 5,372 4,765 3,555 Gross Profit 9,976 8,939 6,284 Less : Expenditures Fuel/ Transport

230 215 121

Other/Variable costs

548 424 291

Salaries 907 875 692 Maintenance 808 782 575 Electricity 514 494 359 EPF/ETF 25 22 18 Other/Fixed costs

867 787 639

Bank Chgs. 209 181 157 OD Interest 618 383 298

Loan Interest - - 83

Lease Interest 186 67 - Taxes 153 5,065 135 4,365 - 3,233 Net Profit 4,911 4,574 3,051

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PURPOSE OF THE BUSINESS EXPANSION

Presently on the take-away outlet there are not enough spaces or place to have it

there leisurely and people have to take their meals and go elsewhere to have it. If

there is a place to sit and have meals at the outlet, definitely there will be more

business , at least 15% more business can be expected.

The investor plans to make available a wooden open restaurant facility with

beverages for approx 20 packs at once, beside the take-away outlet.

Presently the hotel is functioning with a single reception hall with a capacity of

150 packs. If necessary, to meet heavy demand, arrangements are made outside

the reception hall but on rainy days the outside arrangements cannot be made.

Further, only a single event can take place which is not sufficient to meet heavy

demand on auspicious days and seasons.

The investor wants to extend the existing reception hall to double size and this

results in a space underneath the hall (half of its size) which he plans to convert

into an air conditioned hall with a capacity of 150 packs.

Air conditioning the small hall enables the investor to hire it at a higher rate and

also prevents two functions disturbing each other.

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THE PROJECTED ANNUAL PROFIT & LOSS

HIGHLIGHTS DUE TO THE EXPANSION OF THE

HOTEL LKR ‘000

Particulars Debits Credits Total

Sales/ revenue 13,787

13,787

Less : Cost of Sales

Purchases

6,336

Gross Profit

7,451

Less : Expenditures

Fuel/ Transportation

170

Salaries/ wages

690

Maintenance

600

Electricity

390

Other variable costs

420

Loan Interest

491

Net Profit 4,690

Assumptions

Due to the double sized the existing reception hall, LKR.437,500/- (875 packs @

LKR.500/-) of additional income can be expected for a average month.

With the air conditioned hall, LKR.656,250/- (875 packs @ LKR.750/-) of

additional/ new revenue can be expected for a average month.

At least 15% of additional business of LKR.55,125/- (315 no’s @ average rate of

LKR.175/-) can be expected from the take-away outlet for a month.

From the reception halls over 35% of net profit & from the take-away outlet

approx 15% of net profit can be expected.

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MARKET AND MARKETABILITY

The market for the Take-away outlets with fine dining facilities are targeted for locals

who are having very busy life schedule, families of which both parents are being

working to meet high cost of living where they don’t find much time to prepare meals

at home and occasionally, for local & foreign crowed who travels where they looking

for nice quiet place to have a quick snacks with refreshments when they passing by.

The proposed take-away outlet is located faced to the Kegall – Avissawella main road

which is the centre road of which leads to very important places of the country and in

close proximity to the residence/ the office of very popular politician, Hon. Minister

…...

This hotel is blessed with ample pictorial sceneries and unique locations where the

wedding-photographer would die to capture with. Even now the demand for the

photographic location is very high and most of the time, the investor reluctantly

compelled reject requests of wedding receptions due to lack of capacity of the

existing reception hall/ unavailability of large reception hall, comes along with the

wedding photographs.

Under above circumstances achieving at least 15% additional business from the

Take-away outlet by constructing a open air restaurant with the capacity for 20 to

accommodate at once and to achieve the above assumptions and additional revenue

from the reception hall business by extension of the existing reception hall, would not

be a dream.

BANKING & BANKERS

Presently, the investor of the Rajagiri is banking with two bankers as follows under

personal and under business names;

Seylan Bank PLC at Ruwanwella since December 1994.

Commercial Bank at Avissawella since December 1994.

The several facilities were granted time to time, under fully secured nature and

managed to build up sound deposit base during the past and invested the same under

Fixed Deposits with the Seylan Bank PLC at Ruwanwella.

Further, with the proper guidance and the expertise of the Selan Bank PLC at

Avissawella branch’ welcoming staff and together with the commitments, enthusiasm

of the business partners, the business has made a tremendous growth in a very short

period

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ASSESSMENT OF RISK

Company Risk : Since Rajagiri hotel has been in this trade over decade of time, as

the name gained an excellent reputation and stands among the

leading Hotel in the vicinity, company risk are very low.

Industry Risk : There are no severe or huge risks or threats in this Industry other

than the competitors. However, now the Rajagiri holds the largest

market share of them all while handling the situation in an

effective manner.

Economy Risk : When it comes to an Economic risk there are always the Taxes

imposed by the Government time to time, but it will be affected to

the whole Industry.