BUSINESS PLAN     

PORSALANO RESORT

The Porsalano outlines how it will provide quality hospitality services,

cost-effectively, in a popular northern INDIA resort environment. This

plan successfully raised capital for property acquisition, renovation, and

company start-up related costs.

Contents

Five Objectives of Porsalano, Inc..............................................................6

Ideal Property Location..............................................................................6

Mission Statement.......................................................................................7

Management & Organizational Summary................................................9

Competitive Advantage.............................................................................11

Industry Keys to Success..........................................................................11

Economic Environment......................................................................12

Geographical/Competitive Environment...........................................12

Legal/Political Environment..............................................................12

Marketing Strategies.........................................................................17

Target Markets - Consumer...............................................................17

Distribution Strategy.........................................................................18

Pricing Strategy.................................................................................18

Service and Support Philosophy........................................................20

Evaluation & Control Strategies........................................................23

Projected Balance Sheet.......................................................................28

Table: Balance Sheet.........................................................................28

Questionnaire……………………………………………………………………..…...……….29

2

EXECUTIVE SUMMARY

We seek funds for the acquisition and renovation of Porsalano, an adult-

marketed, 17-room "boutique style" hotel specializing in a couples'

"getaway" to provide relaxation and recreation in Manali, a popular

tourism spot. Moderately priced between the high-line hotel properties

and the older motel strips, Porsalano shall fill an affordability niche not

presently available in Manali.

Combined with an on-site lounge, grill, poolside beverage service, and

morning continental breakfast bar, we are seeking investment funds to

renovate the hotel building, build-out a piano bar/lounge area with dance

floor, and construct an outdoor pool adjacent to the indoor pool. With this

refurbishment and other new amenities, Porsalano will form the basis of

a highly profitable hotel venture. We are seeking funds to develop and

expand the business in a phased approach, as highlighted within this

document.

The foundation for the plan is a combination of primary and secondary

research, upon which the marketing strategies are built. Discussions and

interviews were held with a variety of individuals involved with other

similar businesses to develop the proforma data, review the market

potential, and competitive situation.

Renovation in the Prairie Style period, our hotel's design elements and

furniture will reflect this "organic" approach and provide an overall

comfortable experience. Porsalano shall specialize in meeting an

individual or couple's needs. As growth warrants, the 10-acre site would

allow for future expansion of the lodging portion of the resort.

3

Business Plan Purpose

Introduction

In today's highly competitive environment, formal business planning is an

essential element in achieving business success. A well-written business

plan is primarily a communication tool used to obtain financing. In

certain instances, particularly with our early stage company, this

business plan also serves as a strategic plan.

Considering that lenders are inundated by numerous investment

opportunities from which they choose only a few, this business plan

describes our story and how we intend to grow. Porsalano, Inc.

management team has made an in-depth analysis of its opportunities and

weaknesses and it has concluded that the company has an excellent

chance to succeed.

Methodology for Business Planning

Sophisticated business planning helps management answer questions,

such as:

What will be our record of achievement?

How have we fared compared to our competitors?

Are we setting realistic and attainable goals and objectives?

Constructive and useful business planning requires a broad-based

understanding of changes taking place in the marketplace in which the

company competes, or plans to compete, and the ever-changing financial

markets. In-depth technical skills in a variety of disciplines such as

financial analysis, sales and marketing, latest technology, and managing

growth are critical components in assessing a company's opportunities

and risks.

Developing the Business Plan

4

The management of Porsalano, Inc. has developed this disciplined

planning methodology to help the company anticipate its start-up costs

and other critical information to arrive at this realistic plan.

5

Guidance from Outside Professionals

We will seek legal assistance and advisors to develop the Porsalano

concept. The management of Porsalano, Inc. will maintain an active

management involvement in every aspect of daily resort operations. This

plan reflects his vision.

Five Objectives of Porsalano, Inc.

1. Attract Rs. 10 Cr mortgage/investment capital;

2. Focus ideas and establish goals;

3. Identify and quantify objectives;

4. Track and direct growth;

5. Create benchmarks for measuring success.

Management is soliciting commercial finance partners who share its

vision and desire to participate in this exciting business opportunity in

the resort community of Manali, India. The integration of these

disciplines results in extensive and innovative services set in a unique

Prairie Style surrounding for our prospective guests.

Ideal Property Location

The preferred location is a 10-acre parcel with 8 acres of woods. Of the

18 rooms, 3 are executive suites, with Jacuzzi tubs, and one of them will

be converted to an onsite manager's apartment. Each room has

individual climate control, direct-dial phones, and televisions. The facility

has a large main lobby area, indoor pool/Jacuzzi/sauna, lighted tennis

court, 2-car garage, storage shed, ample parking, and all equipment

necessary for operation of the motel. The separate onsite manager

residence and meeting room complex will serve as a future lounge/grill

space. The grounds are beautifully landscaped.

The Hotel is situated on 9.43 beautifully landscaped, wooded acres.

Approximately 7 of the 9.43 acres are wooded and undeveloped, which

6

creates an opportunity for significant expansion or potential for an

entirely new enterprise.

This facility consists of one building, built in two phases: a 22- and 15-

year-old two- and one- story wood frame 18-unit Hotel and

manager's/owner's apartment, which when combined, total

approximately 14,787 square feet of living area. The 18-unit hotel

includes a lobby with a fireplace, reception area, storage area, laundry

room, bathroom, meeting rooms, a balcony, 18 room units, a men's and

women's bathroom, kitchen, a whirlpool/sauna room, an indoor

swimming pool, and mechanical room. The hotel has a partial basement

and includes a laundry room with two washers and two dryers.

The manager's apartment (future piano bar and basement bar/meeting

room area) offers a living room, kitchen, dining area, family room, half

bath, and gift shop on the first floor with 3 bedrooms and 2 baths on the

second floor. The home has a concrete block basement that is partially

finished with a recreation room and a 3/4 bathroom.

The exterior is cedar and the roof is pitch and pebble. The building is

seated on a poured concrete and a concrete block foundation. Interior

walls are concrete block and drywall. The flooring is carpet and ceramic

tile. There are casement windows and wood storms and screens. There is

a basement area under the living quarters and a portion of the hotel.

Other improvements include a 2-car garage with 2 electric door openers.

A detached storage shed is located to the rear of the manager's

apartment. Land improvements include parking lot with 23 parking

spaces, concrete sidewalks, a lighted tennis court, street signage, and

beautiful landscaping with a mature variety of trees and shrubs.

Mechanical systems include five gas hydropic, two gas forced air

furnaces, electric baseboard heat, individual heat, and central air for

each unit; 120-gallon hot water heater, 600-amp electrical service,

intercom system, two central vacs, water softener, sump pump, 4-camera

security system, cable television, smoke alarms, and telephone system.

7

Mission Statement

Porsalano, Inc.'s mission is to provide quality hospitality services to our

guests in a comprehensive and cost competitive manner, providing the

finest accommodations in Manali, India.

8

Company Business Plan Objective

This business plan serves to detail the direction, vision, and planning to

achieve our goal for providing superior and comprehensive hotel and

lounge services. Our plan objectives are:

Attract Rs. 3 Cr bridge loan to secure Rs. 10 Cr property mortgage

Focus ideas and establish goals

Identify and quantify long-term expansion

Track and direct growth

Create benchmarks for measuring success

Porsalano shall fill a niche not presently available, namely a moderately

priced (under Rs. 10,000per night, summer rate) resort. Combined with

an on-site lounge, a grilled food service, an indoor and outdoor pool bar,

and a morning continental breakfast offering, we shall differentiate

ourselves by becoming a "boutique style" resort versus simply another

hotel. With the construction of an outdoor pool adjacent to the present

indoor pool/whirlpool/sauna complex and our other refurbishment and

new amenities, Porsalano will form the basis of a highly profitable

venture set in a Prairie Style environment.

9

COMPANY SUMMARY

Key Advisors to the Company

Porsalano, Inc. has additional key staff members and advisors to assist

during the development, planning, and initial planning phases. They

include an architect trained at the CEPT University, Ahmedabad, CPAs,

and former managers of bar and Bed and Breakfast style properties.

Management & Organizational Summary

The Medusa Group will manage all aspects of the business and service

development to ensure effective customer responsiveness. Qualified

resort associate professionals will provide additional support services.

Support staff will be added as guest and/or patron load factors mandate.

10

Corporate Development Plan

For purposes of this Business Plan document, Porsalano, Inc.—Phase I

and Phase II for developmental growth are defined below:

Phase I

This phase involves preparation and development of Porsalano. Until the

ideal property is acquired, Porsalano, Inc. offices will be housed at

Mumbai, India. The property will establish its own Prairie Style identity,

management directives, and capital. Incorporating a total quality

management approach and a guest appreciation program, Porsalano will

develop key repeat guests and lounge patrons. Through word of mouth

and advertising, our reputation as an affordable "boutique style" resort

shall grow.

Property renovation will include the makeover of 18 to 17 rooms (with 3

suites) and the conversion of the present onsite property manager's

house to lounge gathering space. New construction includes a bar room

addition, extra parking lot build-out, and an outdoor pool. [Phase I capital

(start-up) funds are documented later on in this business plan.] It is

anticipated that the funding and transfer of this property will happen in

early 2013.

Phase II

Continue implementation of sales, advertising, and marketing strategies

developed in Phase I. Identify and pursue additional guest markets, i.e.

Internet room guarantee services. Porsalano shall evaluate its room

occupancy position to determine if a facility expansion is warranted.

Porsalano anticipates additional support staff would be needed at the

proper time (Phase II). This Plan does not contain funding needs for this

Phase.

11

HOTEL & LOUNGE OVERVIEW

Establishing a hotel and lounge business clientele will take some time, as

the research revealed word-of-mouth /recommendations /referrals and

value as the primary way in which hotel and lounge services are selected

by new guests. People who are completely new to the area, or who have

few established connections, may look to the Yellow Pages or other

advertising and Social networking websites to establish available

services, then call for information or pricing.

Competitive Advantage

Currently, a mid-size "boutique" resort niche is vacant in the Manali

market, with present lodging on the high end, averaging Rs. 10,000 per

night (and up) down to older Hotel properties of Rs. 3,500 per night.

Several B&B establishments may fall into the middle, however,

Porsalano, as a resort-style property, will serve its niche by itself and

cater to a customer oriented market.

Industry Keys to Success

1. A property designed for the guest and/or lounge patron

2. Frequent Guest Award Program

3. Controlled overhead and operational costs

4. Regular and ongoing guest feedback

5. Latest technology/software capacity

6. Weekend lounge (piano bar, dance floor) entertainment

7. Unique, timeless and comfortable environment

8. Dedicated management and associate support staff

12

MARKET ANALYSIS

Porsalano, Inc. like all businesses is affected by forces and trends in the

market environment. These include economic, geographical, competitive,

legal/political, and technical.

Economic Environment

Positive forces include the generally prosperous economy that is

currently in place, full employment, rising wages, and low inflation,

leading more people to be able and willing to spend money and to get

away for some time. The close locality of Shimla market is an affordable

alternative to a flyaway destination.

Geographical/Competitive Environment

The area would have several golf courses, two ski hills, water recreation

activities, numerous dining establishments, various retail and specialty

shops, art galleries, theatre entertainment venues, and the beauty and

serenity of Manali, India.

Porsalano shall fill a niche not presently available, namely a moderately

priced (under Rs. 10,000 per night), resort-type establishment. Combined

with an on-site lounge, a grilled food service, an indoor and outdoor pool

bar, and a morning continental breakfast offering, we shall differentiate

ourselves by becoming a "boutique style" resort versus simply another

hotel.

Our Prairie Style surroundings will attract and retain guests who

appreciate such refined environments.

Legal/Political Environment

The MEDUSA Group management will not move the project forward until

it has obtained an option to acquire one of the Manali liquor licenses. As

faced by all businesses, the proper insurance needs shall be met and all

operations and policy manuals shall be reviewed by appropriate legal

13

experts. The facility will obtain all the necessary building permits prior to

construction. Present facility zoning allows for this proposed use,

including a bar, cabaret, grill, and dance floor space.

14

Technology Environment

Computer programs greatly simplify the financial recordkeeping for

today's businesses. As a small business, Porsalano will need to watch its

expenses closely. By utilizing the existing software packages available in

the hotel industry, including: room and facility management database,

controlled bar and inventory measuring systems, and room key cards that

allow patrons to charge directly to their room account, this technology

shall assist management in controlling costs, reducing cash management,

and maximizing revenue. The MEDUSA Group shall attract the resources

necessary to train and operate the system in order to generate the

reports and manage the inventory.

15

COMPETITIVE ENVIRONMENT

A listing of the hotel properties in Manali, India is as follows

- Holiday Inn (Rs 21,000 and above)

- Snow Valley Resort (9000 and above)

- Manali INN (16,000 and above)

- Manali Heights (13,000 and above)

- Manali Resorts (15,000 and above)

Bed & Breakfast (B&B)

Dahlia House

The Mixer House

Precious Times Inn

Hotel properties in adjacent communities are not listed, however, they do

advertise in the Yellow Pages and any other social media.

Porsalano hotel and lounge is attempting to carve out a fourth segment

in the lodging market; that of a "boutique" style, high-line property at

mid-line pricing geared towards adult couples and not marketed to

families.

A review of competitors' marketing strategies reveals no one targeting

this market segment. Hotel and lounge is a referral-driven business—new

business can be obtained by encouraging and rewarding present guests

to refer future guests. Networking within business and civic groups is

important; even if the business results are not immediately felt, it is an

excellent public relations opportunity. Live piano, or jazz style trio, on

the weekends will add excitement to the resort and draw community

residents and guests from other properties.

16

Market Research

A hypothetical behavior sequence model for a new customer (future

guest) contemplating using a hotel and lounge service for the first time

might look something like the following (based on discussions and

interviews with potential guests):

Individual or couple decided to getaway for a few days. This may happen

as a result of a need for a change of pace, vacation, or a celebration

purpose. The need can arise anytime year round. Even in the late fall and

winter months people are thinking "getaway" to break the weather

doldrums.

Individual or couple investigates hotel services. In most cases, this means

they will consider first any recommendations that they are

knowledgeable of through prior association (relative, friend, or social

group). If the individual or couple is new to the area or otherwise has not

made any close connections with people, he/she would look in the Yellow

Pages for a listing, website or perhaps look in a newspaper for

advertising and in any social media.

Acting on the advice of friends (or own knowledge), the individual or

couple will call the recommended property to obtain information that will

help him/her decide if this place is the best for them. Criteria for

selection include: (1) amenities (pool, on-site food service, non smoking

rooms, bar lounge area, etc.); (2) reputation (what kind of persons

usually stay here?); (3) Physical plant (how recent the renovation,

upkeep, etc?); (4) courtesy (professional and attentive staff?); and (5)

pricing (is the place affordable?).

Based on the information received, the individual or couple makes a

decision and either schedules an appointment to view the property or

makes a reservation.

The individual's satisfaction with his/her decision and with the service

itself is largely a function of their interaction with the staff during their

stay. Everyone associated with Porsalano will do everything possible to

17

ensure a satisfactory experience for the guest, so that future business

(and a future referral) is not at risk.

Marketing strategies will build on this model, taking advantage of

precipitating events, fostering word-of-mouth recommendations, and

creating satisfaction through interacting with the future or present

guests.

Summary of Opportunities and Threats in the Environment

Overall, the environment appears very positive for Porsalano, Inc. The

forces driving market demand, mainly economic and geographical, are

strong, with more people staying closer to home for shorter getaway

trips and their comfort level of visiting Manali, one of the North prime

travel destinations. On the negative side, there is competition, and it will

take a while for Porsalano to get "established" in its market niche.

18

STRATEGY & IMPLEMENTATION

The business is driven by referrals and repeat business, so for the first

few years Porsalano will need to be aggressive in attracting new guests.

The marketing strategy is subject to change upon guest feedback and

surveys.

Marketing Strategies

Target Markets—Geographical: The major cities within a three-hour drive

of the property.

Target Markets - Consumer:

New visitors travelling to the area

Middle- and upper-income bracket

Returning visitors to the area

Businesses needing to hold small overnight planning and strategy

sessions

Area wedding parties

Couples

19

Positioning and Product Strategy

For its guests, Porsalano will be positioned as a new, beautifully

landscaped, nature-filled, unique atmosphere hotel with a bar lounge

service that fits an adult "getaway" market niche. A full range of referral

services (i.e. restaurant recommendations, shopping, taxis, area

attractions) will be made available and tailored to the needs of the

particular guest.

Business services range from room phones that are Internet jack ready

and telephone answering message service for each room to on-site fax

services and meeting room space (lounge sitting area and cabaret room).

Porsalano will aim to attract business guests and their partners needing

to hold planning or strategy sessions away from the office in new and

comfortable surroundings, in order to even out revenues throughout the

week.

Distribution Strategy

Unlike products that are produced, then distributed, and sold, hotel and

lounge services are produced and consumed simultaneously in a real-

time environment. Thus, distribution issues center on making the

services available in a convenient manner to the greatest number of

potential guests. Porsalano will maintain a front office staff member

throughout the night so guests are able to get answers to any question or

service when they need it. This flexibility is especially attractive to the

business traveller. Clients will be able to contact Porsalano by telephone,

fax, and e-mail.

Pricing Strategy

Rooms per night fees have been developed. The fee schedule takes into

account seasonal rates that are common in the area. For businesses and

other large group functions, pricing can be discounted depending upon

the number of rooms reserved.

20

Example lounge pricing and grill food offerings are also noted.

Example fees:

Room Fees

Winter Rates (November through April):

Regular Rooms Rs10200

Suites Rs18000

Summer Rates (May through October):

Regular Rooms Rs12000

Suites Rs24000

(Includes Continental Breakfast, use of indoor and outdoor pools, and

exercise equipment room.)

Telephone Rates (set at going company rate)

Hotel Safe Storage Fee (per day) Rs600

Liquor and Drink Fees(Sandwiches include fries, onion rings or chips.)

"Top Shelf" Brands Rs2400-6000

Specialty Drinks Rs1800-4800

Import Beers & Wine rs700(beer)- 2400(wine)

Domestic Beers Rs495

Draft Beer Rs360

Juices, Bottled Water, and Soft Drinks Rs240

Grill Menu

Rib-Eye Steak Sandwich Rs499

Cheese Vegetable Grill Sandwich Rs299

Burger (1/4 pound) Rs149

Fried Cod Fish Sandwich Rs399

Salads Rs249-549

21

Chicken Tenders Rs449-949

Cheese Sticks (with sauce) Rs249

Service and Support Philosophy

By giving careful consideration to customer responsiveness, Porsalano's

goal will be to meet and exceed every service expectation of its hotel and

lounge services. Our guests can expect quality service and a total quality

management (TQM) philosophy throughout all levels of the staff.

PROMOTION STRATEGY

Promotion strategies will vary depending on the target market segments.

Given the importance of word-of-mouth referrals among all market

segments when choosing a "getaway" hotel or small business meeting

location, our efforts are designed to create awareness and build referrals.

A cost-effective campaign—focused on direct marketing, publicity, our

frequent guest reward program, and advertising—is being proposed.

22

Marketing Plan

New Business Segment

A direct marketing (direct mail) package consisting of a tri-fold brochure,

letter of introduction, and reply card will be sent to a list of potential

guests. This list can be obtained from Yellow pages and just Dial. The

above will be compiled from tax records (by upper-income geographical

areas, Secretary of State Incorporation registrations, business license

applications, and announcements from newspaper clippings).

The brochure and letter introduces Porsalano, stresses the importance of

having a good time in comfortable surroundings, provides information on

our resort services, and describes what sets us apart from other area

hotel and lounge properties. The initial mailing may contain a

promotional offer: the opportunity to receive a 10% discount on the first

night's room rate.

Approximately two months after the mailing, an additional letter shall be

sent. The potential guest would be asked to address any questions and

the follow-up would remind them to drop in for a property tour on their

next trip to Manali. Additionally, new businesses will be targeted and

sent information.

The cycle would repeat itself with new target communities and select

businesses and would continue through the first year. After that,

additional mailings would be conducted, as needed, based upon

occupancy goals.

Porsalano, Inc. will also consider developing a one-page newsletter to be

mailed quarterly to past guests and prospects in the database. The

newsletter can be used to update clients on hotel and lounge and area-

related developments, but also serves as a reminder of what sets

Porsalano apart. The newsletter can be produced in-house and for the

cost of paper and a stamp creates a lot of goodwill among guests and

business prospects.

23

Publicity and Public Relations

A news release will be sent to area newspapers and magazines

announcing the launch of Porsalano, Inc. and lounge. Area talent

searches will be conducted to secure weekend cabaret room

entertainment.

The MEDUSA Group will join the Manali Chamber of Commerce as a

means of networking in the community. They will make themselves

available for speaking engagements at other community or civic

organizations as a low-cost way of increasing awareness and building

goodwill in the community.

Guest Reward Programs

For present guests: "Stay 6 nights and get the seventh night for free"

promotion and as a means of building business by word-of-mouth,

present customers should be encouraged and rewarded for referring

future guests. This can be accomplished by offering a small "rebate" (5%

or 10% rebate on first night stay) to current customers who successfully

refer a new guest.

Advertising

Advertising is utilized primarily to attract new guests and serves to build

awareness and name recognition of the resort in general, which is

important for word-of-mouth referrals ("Oh yes, I've seen that resort's

ads before.")

Periodic advertising in target market area newspapers will afford

Porsalano, Inc. name recognition benefits. From quarter page ads

announcing its entertainment line-up to business card-sized logo

ads.

Yellow Pages—Manali Telephone Directory. Research indicated

that new visitors or people who don't have many personal

acquaintances to ask about hotel and lounge services will look to

the Yellow Pages to establish a list of potential hotel and lounge

24

services to call. Even a small 2" × 2" boxed ad can create

awareness and attract the desired target client, above and beyond

the ability of a simple listing. Yellow Pages cover the relevant

market area, delivering over 30,000 copies to residents and

business.

Telephone Book Cover. A business card-like ad on the plastic cover

which is placed over any telephone book enables the business

name/logo to be seen virtually 24 hours a day, 365 days a year.

Covers are distributed bi-annually free of charge to residents and

businesses.

Restaurant Placemats—Opportunities exist for a business card-like

ad to be placed on the paper placemats used in area restaurants

(shelf-life of the ad is about six months), or for special (holiday)

events taking place at a restaurant (1-off opportunities).

Additional places to post flyers/business cards or for a business

card ad include bulletin boards in public buildings (grocery stores,

senior centers), and playbills for local theatre groups.

Along with the above, all the other social media.

Web Plan Summary:

The company is still in search for a Domain name and would like to

have a website name www.porsalona.in

The Website will be tracing all the visitor’s and would even be

customer friendly to use

It would also include Pre- Booking and all the ongoing offers during

seasons.

Evaluation & Control Strategies

25

Objectives have been established for Porsalano so that actual

performance can be measured. Thus, at the end of its first year,

Porsalano should have:

Rs. 3 Cr in total revenue

Anticipate 60% occupancy rating

Each subsequent year new objectives will be set for these benchmarks

and actual performance will be measured against them. If actual

performance falls short of objectives, investigation will be made into the

cause, and plans will be adjusted accordingly.

In addition, it is recommended that Porsalano keep track of the source of

all new guests ("Where did you hear of us?") in order to measure the

effectiveness of each type of promotion. Each subsequent year's budget

should adjust spending toward the types of promotion that reach the

most new clients.

Customer satisfaction is most directly reflected in the year-to-year

customer retention percentage. All lost customers should be investigated

to find out why they left. A customer satisfaction survey may be

considered after three to four years in the business.

26

FINANCIAL PLAN

Start-up FundingStart-up Expenses to Fund Rs92,70,000 Start-up Assets to Fund Rs1,82,30,000 Total Funding Required Rs2,75,00,000

Assets Non-cash Assets from Start-up Rs1,75,00,000 Cash Requirements from Start-up Rs7,30,000Additional Cash Raised - Cash Balance on Starting Date Rs7,30,000 Total Assets Rs1,82,30,000

Liabilities and Capital

LiabilitiesCurrent Borrowing - Long-term Liabilities Rs1,75,00,000 Accounts Payable (Outstanding Bills) - Other Current Liabilities (interest-free) - Total Liabilities Rs1,75,00,000

Capital

Planned InvestmentMarty Snyderman Rs50,00,000 Luke Roth Rs50,00,000 Additional Investment Requirement - Total Planned Investment Rs1,00,00,000

Loss at Start-up (Start-up Expenses) Rs92,70,000Total Capital Rs7,30,000

Total Capital and Liabilities Rs1,82,30,000

Total Funding Rs2,75,00,000

Start-up

Requirements

Start-up ExpensesLegal Rs2,50,000 Stationery etc. Rs20,000 Brochures Rs3,00,000 Rental Shop Setup Rs25,00,000 Property Down payment Rs25,00,000 Lodge Setup Rs10,00,000 Store Setup Rs25,00,000Insurance Rs2,00,000 Total Start-up Expenses Rs92,70,000

Start-up AssetsCash Required Rs7,30,000Other Current Assets - Long-term Assets Rs1,75,00,000 Total Assets Rs1,82,30,000

Total Requirements Rs2,75,00,000

27

Sales Forecast Year 1 Year 2 Year 3

SalesRooms Rs2,15,00,000 Rs2,80,00,000 Rs3,00,00,000 Food Rs60,50,000 Rs70,00,000 Rs90,00,000Ski Rentals Rs66,00,000 Rs72,50,000 Rs80,00,000 Clothing Rs29,00,000 Rs35,00,000 Rs41,00,000 Total Sales Rs3,70,50,000 Rs4,57,50,000 Rs5,11,00,000

Direct Cost of Sales Year 1 Year 2 Year 3Rooms - - - Food Rs29,75,000 Rs35,50,000 Rs45,00,000 Ski Rentals - - - Clothing Rs11,85,000 Rs15,00,000 Rs19,00,000 Subtotal Direct Cost of Sales $83,200 $101,000 Rs64,00,000

Personnel Plan Year 1 Year 2 Year 3

Manager Rs18,00,000 Rs19,50,000 Rs21,00,000 Assistant Manager Rs21,00,000 Rs22,50,000 Rs24,00,000 Lodge Staff Rs55,00,000 Rs60,00,000 Rs63,00,000 Food Store Staff Rs19,50,000 Rs21,50,000 Rs23,00,000 Clothing Store Staff Rs17,50,000 Rs19,50,000 Rs21,00,000 Maintenance Staff Rs24,00,000 Rs26,00,000 Rs27,50,000 Cleaning Staff Rs36,00,000 Rs3800000 Rs39,50,000 Total People 9 22 22

Total Payroll Rs1,91,00,000 Rs2,07,00,000 Rs2,19,00,000

Pro Forma Profit and Loss Year 1 Year 2 Year 3

Sales Rs3,70,50,000 Rs4,57,50,000 Rs5,11,00,000Direct Cost of Sales Rs41,60,000 Rs50,50,000 Rs64,00,000Other Production Expenses - - - Total Cost of Sales Rs41,60,000 Rs50,50,000 Rs64,00,000

Gross Margin Rs3,28,90,000 Rs4,07,00,000 Rs64,00,000 Gross Margin % 88.77% 88.96% 87.48%

ExpensesPayroll Rs1,91,00,000 Rs2,07,00,000 Rs2,19,00,000 Sales and Marketing and Other Expenses

Rs30,00,000 Rs40,00,000 Rs50,00,000

Depreciation Rs7,14,000 Rs7,14,000 Rs7,14,000 Leased Equipment - - - Utilities Rs13,00,000 Rs13,00,000 Rs13,00,000 Insurance Rs12,00,000 Rs12,00,000 Rs12,00,000 Lease - - - Payroll Taxes Rs28,65,000 Rs31,05,000 Rs32,85,000 Other - $0 -

Total Operating Expenses Rs2,81,79,000 Rs3,10,19,000 Rs3,33,99,000

Profit Before Interest and Taxes Rs47,11,000 Rs96,81,000 Rs1,13,01,000EBITDA Rs54,25,000 Rs1,03,95,000 Rs1,20,15,000 Interest Expense Rs16,68,750 Rs15,25,000 Rs13,75,000 Taxes Incurred Rs9,12,700 Rs24,19,800 Rs29,77,800

Net Profit Rs21,29,600 Rs57,09,200 Rs69,48,200

28

Net Profit/Sales 5.75% 12.48% 13.60%

Projected Balance SheetThe following is the projected balance sheet for three years.

Table: Balance Sheet

Pro Forma Balance Sheet(Rs) Year 1 Year 2 Year 3

Assets

Current AssetsCash 1,571,850 59,27,750 82,79,200 Other Current Assets 7,00,000 16,00,000 26,50,000Total Current Assets 22,71,850 75,27,750 1,09,29,200

Long-term AssetsLong-term Assets 1,75,00,000 1,85,00,000 215,00,000 Accumulated Depreciation 7,14,000 14,28,000 21,42,000 Total Long-term Assets 1,67,86,000 1,70,72,000 1,93,58,000 Total Assets 1,90,57,850 245,99,750 3,02,87,200

Liabilities and Capital Year 1 Year 2 Year 3

Current LiabilitiesAccounts Payable 1,98,250 15,30,950 17,70,250 Current Borrowing - - - Other Current Liabilities - - - Subtotal Current Liabilities 1,98,250 15,30,950 17,70,250

Long-term Liabilities 1,60,00,000 1,45,00,000 13,00,000 Total Liabilities 1,61,98,250 1,60,30,950 147,70,250

Paid-in Capital 1,00,00,000 1,00,00,000 1,00,00,000 Retained Earnings (92,70,000) (71,40,450) (14,31,250)Earnings 21,29,600 57,09,200 69,48,200Total Capital 28,59,600 85,68,800 1,55,17,000 Total Liabilities and Capital 1,90,57,850 24,599,750 3,02,87,200

Net Worth 28,59,600 8,568,800 1,55,17,000

Projected Cash Flow

Pro Forma Cash Flow(Rs) Year 1 Year 2 Year 3

Cash Received

Cash from OperationsCash Sales 3,70,50,000 4,57,50,000 5,11,00,000Subtotal Cash from Operations 3,70,50,000 4,57,50,000 5,11,00,000

Additional Cash ReceivedSales Tax, VAT, HST/GST Received - - -

29

New Current Borrowing - - - New Other Liabilities (interest-free) - - - New Long-term Liabilities - - - Sales of Other Current Assets - - - Sales of Long-term Assets - - - New Investment Received - - - Subtotal Cash Received 3,70,50,000 4,57,50,000 5,11,00,000

Expenditures Year 1 Year 2 Year 3

Expenditures from OperationsCash Spending 1,91,00,000 2,07,00,000 2,19,00,000 Bill Payments 1,49,08,150 1,72,94,100 2,12,98,550 Subtotal Spent on Operations 3,40,08,150 3,79,94,100 4,31,98,550

Additional Cash SpentSales Tax, VAT, HST/GST Paid Out - - - Principal Repayment of Current Borrowing

- - -

Other Liabilities Principal Repayment - - - Long-term Liabilities Principal Repayment

15,00,000 15,00,000 15,00,000

Purchase Other Current Assets 7,00,000 9,00,000 10,50,000 Purchase Long-term Assets - 10,00,000 30,00,000 Dividends - - - Subtotal Cash Spent 3,62,08,150 4,13,94,100 4,87,48,550

Net Cash Flow 84,11,850 43,55,900 23,51,450 Cash Balance 15,71,850 59,27,750 82,79,200

Net Cash Flow

Cash Balance

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

($20,000)

Mon

th 1 M

onth

2 Mon

th 3 M

onth

4 Mon

th 5 M

onth

6 Mon

th 7 M

onth

8 Mon

th 9

Mon

th 1

0 M

onth

11

Mon

th 1

2

Cash

30

Financial Plan Assumptions

The following assumptions will be incorporated into Porsalano, Inc.

proforma statements.

All operating costs are based on Porsalano, Inc. management

research of similar operating companies.

Automated informational and bar control systems will reduce

Porsalano, Inc. staff requirements.

Developmental start-up costs are amortized over a five-year period.

Room Occupancy Rate at 60%.

Property manager are fixed salary expense basis.

All fixed and variable labour costs should rise annually at 2.5% per

year.

All revenues are figured to rise annually at five percent. Fixed

annual, administrative, and office expenses rise at an annual rate of

one half of one percent.

31

Questionnaires

A. For families

Name: ________________________________________________ Age:

________ Sex: Male/Female

Occupation: ______________________________

Range of Annual income

Less than 6 Lacs 6 Lacs to 12 Lacs 12 Lacs to 36

Lacs

More than 36 Lacs

How frequently do you travel for vacations?

Rarely Once a year Twice a year A Lot

(Please tick mark whichever is applicable for the following question)

1. What other amenities would you like the resort to provide?

Souvenir Shop Spa Game Parlor

Children Amusement Park

Outdoor Games WiFi Sight-seeing Medical

Practitioner

2. Apart from the already served Indian, Chinese, Continental and Italian

what other cuisines would you like to be served at the restaurants?

32

Thai Mughlai Kids Special Menu

Mediterranean

Mexican African Fast-Food

(Please rate the following question from 1 to 5 with 1 being the least satisfied and 5 being very

satisfied.)

1 2 3 4 5

3. How would rate the location and

landscaping of the resort?

4. How good you think are you with

the amenities provided for family

and kids?

5. How good are you with the room

services and facilities?

6. How secure do you feel with the

resort security system?

7. How would you rate our ‘ease of

payment’ with respect to banking

facilities?

8. Would you like the resort to design a special packages/tours for a

family of 2 Adults and 2 Children?

Yes No

33

9. Would you like the resort to “Plan Your Travel” right from your home-

station and back?

Yes No

B. For college students

Name: ________________________________________________ Age:

________ Sex: Male/Female

Education: ______________________________

How frequently do you travel for vacations?

Rarely Once a year Twice a year A Lot

(Please tick mark whichever is applicable for the following question)

1. What other amenities would you like the resort to provide?

Gym Spa Game Parlor Adventure

Sports

Outdoor Games WiFi Sight-seeing Medical

practitioner

2. Apart from the already served Indian, Chinese, Continental and Italian

what other cuisines would you like to be served at the restaurants?

34

Thai Mughlai Burmese

Mediterranean

Mexican African Mongolian

(Please rate the following question from 1 to 5 with 1 being the least satisfied and 5 being very

satisfied.)

1 2 3 4 5

3. How would rate the location and

landscaping of the resort?

4. How good is the theme and

ambience of the resort?

5. How good is the room services and

facilities?

6. How secure do you feel with the

resort security system?

7. How would you rate our ‘ease of

payment’ with respect to banking

facilities?

8. Would you like the resort to organize events, workshops and festivals?

Yes No

35

9. Would you like the resort to “Plan Your Travel” right from your home-

station and back?

Yes No

C. For professionals

Name: ________________________________________________ Age: ________ Sex: Male/Female

Occupation: ______________________________

Range of Annual income

Less than 6 Lacs 6 Lacs to 12 Lacs 12 Lacs to 36

Lacs

More than 36 Lacs

How frequently do you travel for office related work?

Rarely Frequently Often A Lot

(Please tick mark whichever is applicable for the following question)

1. What other amenities would you like the resort to provide?

Gym Spa Welcome Kit Exclusive

events

Outdoor Games WiFi Sight-seeing Medical

practitioner

36

2. Apart from the already served Indian, Chinese, Continental and Italian

what other cuisines would you like to be served at the restaurants?

Thai Mughlai Burmese

Mediterranean

Mexican African American

(Please rate the following question from 1 to 5 with 1 being the least satisfied and 5 being very

satisfied.)

1 2 3 4 5

3. How would rate the location,

ambience and landscaping of the

resort?

4. How good you feel is the

Conference Hall and the facilities

provided?

5. How good you think is the room

services and facilities?

6. How secure do you feel with the

resort security system?

7. How would you rate our banking

facilities and ForEx Management?

37

8. Would you like the resort to organize professional events and

workshops exclusive for your organization?

Yes No

9. Would you like the resort to “Manage the Conference” by providing an

entire package of logistics support, travel, stay and food?

Yes No

Bibliography

http://www.foodandhospitalityworld.com/sections/ market-section/1338-v-resorts-plans-to-open-10-resorts-by-year-end

http://www.fortunehotels.in/resort/Mussoorie- Fortune_The_Savoy/Guide.aspx

http://india.businessesforsale.com/indian/search/ Hotels-for-sale

http://www.99acres.com/property-in-kulu-manali-ffid

38

http://manali.citrushotels.com/

http://www.tripadvisor.in/Hotel_Review-g297618- d736513-Reviews-Citrus_Manali_Resorts-Manali_Himachal_Pradesh.html

39