PROJECT COST

The total cost of the project is estimated at Rs. 122779.9 Lakhs, detailed break-up of which is
given below:

Rs. In
COST OF THE PROJECT Lakhs

Land & Site Development 6000

Building & Other Civil Structures 73000
Plant & Machinery 7300
Furniture & Fixtures 7300
Cost of Motor Vehicles 2340
Pre-operative Expenses 959.4
Preliminary Expenses 1439.1
Administrative Expenses 2878
Working Capital Margin Money 732.69
Provision for Contingencies 4797
16033.5
Interest on Term Loan 0
122779.
TOTAL 9

1. Cost of Land & Site Development

2. Cost of Building & Other Civil Structures

3. Cost of Plant & Machinery

4. Cost of Furniture & Fixtures

5. Cost of Motor Vehicles

6. Pre-operative Expenses is taken @1%, of sub-total of cost of Land & Site development, Building,
Plant & Machinery, Furniture & Fixtures, and Motor Vehicles. This includes expenses incurred till
the commencement of operations of the hotel. It mainly includes establishment expenses,
travelling expenses, insurance charges, mortgage expenses, and miscellaneous expenditure etc.
7.Preliminary Expenses in taken @ 1.5%, of sub-total of cost of Land & Site development, Building, Plant
& Machinery, Furniture & Fixtures, and Motor Vehicles. This includes expenses incurred for conducting
the market survey, preparing the feasibility report, etc.

8. Administrative Expenses @ 3%, of sub-total of cost of Land & Site development, Building, Plant &
Machinery, Furniture & Fixtures, and Motor Vehicles. This includes Salary of supervisor till construction
period, etc.

9. Provision of Contingencies @ 5%, of sub-total of cost of Land & Site development, Building, Plant &
Machinery, Furniture & Fixtures, and Motor Vehicles. This is made to provide for any unforeseen
expenses and price increases over and above the normal inflation rate which is already incorporated in
the cost estimates

10. Interest during construction period has been calculated at a rate of 12% p.a. on the term loan of Rs.
94250.0 Lakhs which amounts to Rs. 16033.50 Lakhs.

11. Working Capital Margin Money is taken @ 25% of net working capital requirement and the balance
75% will be financed by Working Capital Loan.

MEANS OF FINANCE

The project Cost of Rs. 122779.9 is to be funded from Promoter’s Contribution and Term Loan through
Consortium financing which is being headed by State Bank of India.

Rs. In
Particulars Lakhs

Equity Share Capital (Promoter's Contribution) 28529.9

Term Loan 94250.0

122779.
TOTAL 9
1. Promoter’s contribution:

The total Promoter’s contribution required for the proposed project is estimated at RS. 28529.9 Lakhs.
The same would be funded by Dreamers Limited.

2. The company proposes to raise Rupee term loan to the extent of Rs. 94250.0 Lakhs through
Consortium financing which is being headed by State Bank of India. The broad terms of the
proposed loan is as given below:

Particulars Details
Loan Amount Rs. 94250 Lakhs
Interest Rate 12% p.a.
Drawdown Period 12 quarters
Moratorium Period 4 quarters after Drawdown Period
 Repayment 24 equal quarterly installments of Rs.
3927.08 Lakhs each

Repayment Starts on After 16 quarters from the date of first

disbursement
Repayment Ends on After 40 quarters from the date of first
disbursement

FINANCIAL PROJECTIONS

The Dreamers hotels will be a 7-star hotel planned by the company. The financial projections have been
carried out on the following assumptions:

Basic Assumptions Underlying the Financial Projections

1. Occupancy Levels

Year0 Year1 Year2 Year3 Year4 Year5 Year6 Year7 Year8 Year9
40% 45% 50% 55% 60% 65% 70%

2. Revenue
Sources of Income

A. Estimated receipt from Room Rent (Average Rent Rs.23722.22)

B. Food & Beverage Income [158.99Lakhs (100% occupancy)]

C. Other Income
1. Room services,laundry services, Transportation services & Miscellenous services
(20.00% of Room Receipt)
2. Banquet , conference room & Auditorium [51.71Lakhs(100 % occupancy)]
3. Disco (Rs.5000 per person)
4. Casino (Rs.100000 per person)
5. Lounge (Rs.5000 per person)
6. Salon (Rs.2000 per person)
7. Massage & Spa (Rs.4000 per person)
8. Pub (Rs.3000 per person)

3. Expenditure
Heads of Expenditure
A. F&B Expenses as % of F&B Sales is 40%.
B. Utility Charges @48 Lakhs in the first year of Operation with annual escalation of Rs.2 Lakhs per
year.
C. Expenditure by way of Salary, Wages etc. is fixed at 200 Lakhs in the first year of Operation with
annual escalation of 10%. Fringe benefits is taken at 20% of Salary.
D. Royalty is to be paid at 3% of Annual Sales.
E. Administrative Expenses is fixed at Rs.1500 Lakhs in the first year of Operation with annual
escalation of 5%. It also includes marketing expenses.
F. Other Expenses is taken @ 8% of previous year’s expenditure.

4. Finance Cost

Particulars Details
Term Loan Interest Rate 12% p.a.
Working Capital Loan Interest Rate 13% p.a.
Drawdown Period 12 quarters
Moratorium Period 4 quarters after Drawdown Period
Repayment 24 equal quarterly installments of Rs.
3927.08 Lakhs each

Repayment Starts on After 16 quarters from the date of first

disbursement
Repayment Ends on After 40 quarters from the date of first
disbursement

5. Other Information

No. of Rooms 1000

Cost of Capital (WACC) 8.62%

6. Depreciation Rates

Fixed Assets Companies Income Tax

Act Act

Land & Site Development 0% 0%

Building 10% 10%

Plant & Machinery 13.91% 15%

Furniture & Fixtures 18.1% 10%

Motor Vehicles 40% 15%

Amortization of Pre-Operative, Preliminary, Administrative 10yrs

Expenses, and Interest during construction period
7. Tax Rates
Corporate Tax @ 34%.

8. Dividend
Dividend is paid @ 20% of that year PAT.