KAILAS HOTEL

Promoted by

J Sivan Nair
Priya Bhavan, Thoppummuku, Pappanamcode. Trivandrum 695018

Prepared by
Mahesh MV 9995556874
Kailas Hotel
Project at a Glance

The project is prepared with a view to avail to enhance a existing working

capital loan to 8 lakh from 3 lakh. The promoter of the project is Mr. Sivan

Nair is running the business in success manner for several years. The loan

propose is to revamp the hotel in such a manner to keep the standard

naturally every hotel keep. The credit proposes is to refurnish the hotel

with modern durable furniture and interior decoration and to procure

stock in trade for the business.

Kailas Hotel
Kailas Hotel
Name of Project Kailas Hotel
Promoted by J Sivan Nair
Address Priya Bhavan
Thoppummukku, Pappanamcode
Thiruvananthapuram -695018
Project Cost and finance

Purchase of stock in trade 8,00,000.00

Furniture fixtures and Furnishing 5,00,000.00
Total Project cost 13,00,000.00
Means of finance for Working capital
Capital Contribution 8,00,000.00
Bank Loan 5,00,000.00
Total 13,00,000.00
Means of Finance
Working capital loan 8,00,000.00
Capital Contribution 5,00,000.00
Total 13,00,000.00
Rate of interest 9.21%
Revenue from operation for the first year 54,50,000.00

Amount in Rs.

50% 50%

0%

Promoters contributon Term Loan Total

Kailas Hotel

About the promoter

The promoter Mr. Sivan Nair has about 15 years of experience in the
industry. His entrepreneurial spirit, positive approach, and dynamic
hands-on leadership will make the unit a premium in the industry. The
promoter has a strong track record in the field and success of the project
is unquestionable.

Location significance

Pappancode is on NH 47 route to Nagercoil, it is approximately 5 km

from Thampanoor, where the Trivandrum Central railway station and the
KSRTC central bus stand are located. Distance from the airport is roughly
15 km. KSRTC's Central Workshop is situated here, along with a KSRTC
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bus depot. Other offices include those of Bharat Sanchar Nigam Limited,
Kerala State Financial Enterprises, Regional Research Laboratory (NIIST
- CSIR), and Sree Chitra Thirunal College of Engineering. All buses to
Kaliyikkavila, Neyyattinkara, Nagercoil and Kanyakumari pass via
Pappanamcode except buses through bypass.

Project Assumption

For the projection purposes, the annual revenue growth rate of 5%to 10%
has been assumed which would cover anticipated growth in the industry
as well as price. Based on our previous experience and assumption and
discussions with the industry experts. These projections are made based
on the current market inputs with the following factors:

• The scheme is based on a single shift per day 300 working days per
annum.
• The break-even point has been calculated on a full capacity
utilization basis.
Kailas Hotel
• The cost of Equipment & Furniture's has been taken based on
competitive
• It is assumed that the services have very good demand, and the
promoters have sound experience and connections in this particular
field
• The suppliers shall be preferably based in local areas.
• An optimum working capital cycle has been taken for calculating
the requirements.
• The basis for calculation of production capacity has been taken on a
single shift basis on 75% efficiency.
• The maximum capacity utilization on a single shift basis for 300
days a year. During the first year and second year of operations, the
capacity utilization is 60% and 80% respectively. The unit is
expected to achieve full capacity utilization from the third year
onwards.
• The salaries and wages, cost of raw materials, utilities, rents, etc. are
based on prevailing rates in Trivandrum. These cost factors are
likely to vary with time and location.
• Interest on loans has been taken at the rate of 9% on average. This
rate may vary depending upon the policy of the financial
institutions/agencies from time to time.
• The subsidy eligible under the scheme is not considered for
preparation of the report since the applicability of the same is
subject to some conditions prescribed by the department.
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• There is no question of uncertainty in future growth and business
has normal growth. However unexpected contingencies have not
been considered

Financial Charges

Taxation and Other Statutory Liability

The business is assumed to be run as a sole proprietorship; therefore, tax

rates applicable on the income of a non-salaried individual taxpayer are
used for income tax calculation of the business.

Revenue Projection

For the projection purposes, annual revenue growth rate of 5%to 10% has
been assumed which would cover anticipated growth in the industry as
Kailas Hotel
well as price. Based on our previous experience and assumption and
discussions with the industry experts

Financial Viability

The proposed Profitability

Statement, Projected Balance Sheet
and the Projected Cash Flow
Statement, the debt service coverage
ratio, payback period and the
return-on-investment ratio etc
indicated the project is financially
viable. The projected profit and loss
account statement shows that there will be surplus fund even for meeting
any unforeseen contingencies. The Cash Flow Statement also revels the
healthy financial trend in the flow of fund.
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Statutory Compliance

Pollution Control

There is no major pollution problem associated with the setting up of this type

of industry. However, entrepreneurs seek guidance from the concerned State

Pollution Control Board in this regard. There is no major pollution problem

associated with this project in terms of air and sound pollution except for the

disposal of wastewater which would be managed appropriately through a

recycling facility. However, entrepreneurs should obtain NOC from the

concerned State Pollution Control Board.

Energy Conservation

Although the energy requirement is small, adequate care should be taken in

electrical installations and the optimal utilization of machinery.

EFFLUENT DISPOSAL:

Disposal of any effluent out of the project unit should be treated with a

recycling facility or dumped in such a way that these do not cause a hazard in

the vicinity of the site. The promoter is already paying the corporation

authorities to remove dispose the food and cooking waste from the hotel in

regular periodical basis.

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WATER:

A constant flow of water would be necessary for the operation of the unit. The

unit have a commercial water connection from water authority.

OTHER UTILITIES:

Other utilities include fuel etc. those should be locally available.

Key Success Factors

Having a great menu and a big marketing budget might help to attract

customers. In fact, some restaurants become victims of their own success,

bringing in many customers but making no profit off any of them.

Controlling your costs, meeting your legal obligations and managing

your cash flow are just a few key factors in reaching and maintaining

success in the food industry.

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Quality of Food

Quality of the food is one of the major factors in determining the success

of a catering unit. Customers aren’t expecting food that’s of four-star

quality, but they do expect the food to taste good and appear freshly

prepared. Successful catering consistently serve fresh food that is exactly

as described on the menu

Staff and Customer Service

Successful food service unit have to employ managers and employees

who perform at a high level and work to accomplish its goals. Employees

who don’t care will inevitably lead to poor service, a lack of attention to

detail and, eventually, decreased sales. All employees and managers of

the unit must focus on the customer to ensure success. Customers are the

lifeblood of the industry, and if employees do not make a point to satisfy

the customer, the unit will see less and less people walk through the

doors.

Food vs. Sales Costs

Many food service unit fail to keep control of their food costs, with some

having no idea what their direct food costs are for each meal served. In
Kailas Hotel
addition to covering the cost of the meat, vegetables, fruits and other

items on each plate, your tickets must cover your operating costs, such as

rent, labour, marketing, insurance and phones. Determine the food and

overhead costs and create a formula for setting prices that include both,

as well as a profit.

Costs

Industrial experts consider that an average 10% percent net profit margin

shall be expected in industry. By increasing the turn over above the fixed

expenses like labour charges, electricity and administrative expenses turn

the unit profitable.