Description
plan for a luxury cruise.Can be useful for people looking at luxury,hospitality marketing
2008
Goan Riviera – Experience the Essence
Goan Riviera – Experience the Essence 2
Mission
We believe that caring for guests has gone beyond the scope of just hoteliering, it is now more of presenting an experience to the guest which is par excellence. The experience should start from the time the guest starts planning for the holiday and this should go on to build a never ending relationship. Our pampering of the customer should start with innovation, continue with the search of excellence and finally celebrate excellence. But beyond all this is the simple and endearing philosophy...... Atithi Devo Bhava (Guest is God)
Goan Riviera – Experience the Essence 3 Contents
1 2 3 4 5 6 7 Executive Summary ........................................................................................................................ 4 Market Analysis ............................................................................................................................... 6 Organisation Structure .................................................................................................................. 13 Financial Requirements ................................................................................................................ 15 The Cruise ..................................................................................................................................... 21 Marketing Strategy ........................................................................................................................ 24 Licenses and Approvals ................................................................................................................ 26
Goan Riviera – Experience the Essence 1 Executive Summary
Introduction
We, BASS and Co., seek funds for the setting up of ?Goan Riviera‘ a concept luxury casino cruise hotel, with 110 "boutique style" rooms specializing in creating an experience getaway to provide relaxation and recreation in Panaji, the capital of the popular tourist state of Goa. Priced between the high-end hotel properties and the general 4–Star hotels, ?Goan Riviera‘ shall create a niche for high luxury cruise experience not presently available in Goa. The idea is to buy the ?Ocean Odyssey‘ presently with the Indian Ocean Cruises Ltd., combined with an on-board lounge, swimming pool, and theme bar, we are seeking investment funds to renovate the ship, build-out a piano bar/lounge area with dance floor, and construct an outdoor miniature golf course and mini theatre. With this refurbishment and other new amenities, ?Goan Riviera‘ will form the basis of a highly profitable cruise-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 market analysis and the latent demand for such a niche experience. Renovation of the ?Ocean Odyssey‘ will be done keeping in mind the Goan theme and the predominant Portuguese influence present here. Our cruise-hotel's basic design elements will not be tampered with and due to the underlying principle of the cruise-hotel being generally anchored off the coast, major overhauling of the engines wouldn‘t be required.
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The Location
The Goan Riviera is to be semi-permanently anchored in the sea, a kilometre off the coast of Panaji. The anchor point will be off the main thoroughfare of the barges so that the guests can have an undisturbed experience. Guests will be escorted to the hotel from the company owned private jetty in a small catamaran.
Our Services
The hotel will have 110 deluxe suites and 8 penthouses. It will have conference facilities for 30 people. The hotel will have an outdoor swimming pool, a mini theatre, 2 themed restaurants, and a bar with a dance floor that will provide live entertainment. The upper deck will have a miniature golf course for the guests to practise their swings while on their holidays. For the guests to take back remembrances and souvenirs from their trip to Goa, the hotel will also have a small curio shop.
The Company
BASS and Co. is a new start-up partnership that has been created to launch this business. The four partners will equal interest in this partnership are Lynn Bouselly, Shweta Ajmani, Soutik Sarkar and Sreejith S.
The Market
The Indian hospitality industry is in the midst of a strong cyclical upturn on the back of a buoyant economy, with a growth in business and leisure tourists @ 25% p.a. and an existing shortage in room supply of about 100,000 guest rooms according to the Ministry of Tourism, Government of India. An additional 100,000 guest rooms are required to meet the projected foreign tourist arrival of 10 million by 2015. And the premium end of the market
Goan Riviera – Experience the Essence
(5 Star Deluxe) generates around 65-70% of the industry revenue, and this is the sector we plan to tap. According to a recent study by hotel monitoring body: HVS International, the status of hotel rooms needed and available by the year 2009, in some major destinations, would be as follows: Destination Bangalore Goa Hyderabad Chennai Rooms needed by 2009 20,000 6,500 8,000 7,500 Rooms available by 2009 6,800 2,800 5,400 5,000
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From the table it is obvious that Goa with some other destinations in India has acute shortage of rooms, and with the proposed International Airport in Goa and allowance of open charter policy, the time is right to present to the discerning customer the ultimate Goan experience.
Financial Considerations
After due consideration for all the budget needs for the whole project was done it was felt that as the partners don‘t have enough capital to start the business on their own and would need external funding. With the modes of financing presently available and the funding requirements it is felt that the best way for arranging the capital would be through the Venture Capital route.
Goan Riviera – Experience the Essence 2 Market Analysis
About Goa
Goa also known as "Pearl of the Orient" is the hub of tourism industry in India handling almost 12 % of tourists of the country. The numbers of tourists visiting Goa is more than two million a year and among those 400,000 were from abroad. Tourism is the main industry in Goa which provides a major chunk of GDP of the state. The following sections summarise the data that we will be basing our market analysis on. All the figures quoted are sourced from ?Collection of Domestic Tourism Statistics for the State of Goa – Final Report 2006‘ prepared by the Ministry of Tourism, Government of India.
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Tourist Statistics
Foreign Overnight visitors 16%
Domestic Overnight Visitors 84%
?
In 2006, 18,98,853 domestic tourists visited Goa while the number of foreign tourists was 3,48,396.
Tourist trends
The main purpose of domestic and foreign tourists was leisure. Data reveal that 83.56% and 86.49% of domestic and foreign tourists respectively visited for leisure.
100% 80% 60% 40% 20% 0% Domestic Tourists Foreign Tourists Others Leisure
Goan Riviera – Experience the Essence
The above data suggests that Goa is a preferred destination for leisure and enjoyment by both domestic and foreign tourists. The Goan Rivera will cater to this very desire: facilities such as the casinos, shopping centres, theatres, discotheques etc will be equipped to capitalise on these trends.
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Income and Stay of tourists
Find below the table which describes the domestic tourist incomes. Annual income of the household: Up to 1 Lakh 1-2 Lakh 2-5 Lakh 5-10 Lakh 10 Lakh + NA/DK All Domestic tourists Percentage distribution 20.82 33.90 29.94 6.87 4.80 3.67 100.00
Here we can see that around 11.5% of domestic tourists visiting Goa are above Rs.5 lakh income group, i.e. an estimated 2.2 lakh tourists per year and this is the consumer base that the Goan Rivera will target. The next table will show us the trend of night stays in Goa by domestic and foreign tourists. Type of Percentage distribution according to number of nights stay tourists Domestic Foreign All 1 5.28 1.18 4.10 2 12.41 1.89 9.06 3 18.67 9.17 15.38 4 21.44 8.12 15.53 5 15.35 10.29 12.86 6 11.24 11.40 11.41 7 8.06 16.05 11.12 8 5.60 11.39 8.18 8+ 2.13 30.51 12.65 Estimated no. 1862704 348370 2211074
The table suggests that over 2.64 lakh tourists in 2006 were in Goa for a long vacation i.e. they spent more than 8 nights. We estimate that the more tourists spend time in Goa, the more they would be interested in unique experiences such as a stay in a floating hotel. Statistics - GOA Parameter Occupancy Average rate (Indian Rupees) Average rate (US Dollars) RevPAR(Indian Rupees) RevPAR(US Dollars) 2002 - 2003 - 2004 - 2005 - 2006 - 2007 - 2008 2003 2004 2005 2006 2007 2008 2009 60.50 59.30 62.50 69.20 69.96 76.96 84.65 2754.00 3086.00 3985.00 4663.00 5022.05 5408.75 5825.22 57.00 67.00 89.00 105.00 109.52 114.22 119.14
1766.00 1830.00 2491.00 3227.00 3514.20 3826.97 4167.57 34.00 40.00 56.00 73.00 76.94 81.10 85.48
Goan Riviera – Experience the Essence
Occupancy
100.00 80.00 60.00 40.00 20.00 0.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
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RevPAR (INR)
4500.00 4000.00 3500.00 3000.00 2500.00 2000.00 1500.00 1000.00 500.00 0.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Average rate (INR)
7000.00 6000.00 5000.00 4000.00 3000.00 2000.00 1000.00 0.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source : HVS International The data was provided till 2005 - 2006, Data for 2006 onwards is an estimate based on the CAGR
On general the Hotel industry is observing an upward trend as there has been an increase in the occupancy rate and the average room rate. The Increase in room rate also helps in increasing the profit margins making it the sustainable industry.
Goan Riviera – Experience the Essence
Hotel Classification - Occupancy
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Hotel Classification - Average Rate
The markets across categories witnessed an increase both in terms of occupancy and average rate. However, the occupancy growths were a lot more tepid than in the past few years and the five-star category actually saw occupancies decline marginally. Average rates, on the other hand, saw exceptionally strong increases over the previous year.
SWOT Analysis Opportunity –
? ? India‘s strong GDP performance, strengthening of ties with the developed world and the opening of sectors of the economy to private sector/ foreign investment. Domestic travel, both business and leisure, has benefited from a strong performance of the corporate sector in India, and the overall sense of optimism with regard to the economy. Increase in charter flights into India and new airlines providing additional seats for domestic travel Goa as a destination is very popular amongst Europeans, Goa is now increasingly sought-after by domestic tourists as well as the growing MICE segment.
? ?
Threats –
? The increasing taxes are contributing to the shrinking profit margins, which makes the business less lucrative. The hospitality sector is being charged almost 52 per cent of its earning through various taxes and levies by locals and Central government, thereby contributing 32 per cent of the Gross Domestic Product (GDP). The outsourcing of visas and tour operators charging 60 pounds as a surcharge is contributing to the tourist downfall. The increase in the fuel charges lead to the increase in the prices of the air tickets which in turn causes the decrease in demand. This negatively affected the hotel industry with lesser number of tourists. Due to fall in demand for air tickets, the
? ?
Goan Riviera – Experience the Essence
number of flights at Goa's Dabolim Airport has plunged down from 42 flights per day to mere 25
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Places of major interests in Goa
The table given below is an indication of tourist‘s perception about various places in Goa. Teswadi Taluka which includes the capital city of Panaji appears to be a major tourist attraction. For the two positive categories ?Very Good‘ and ?Reasonable‘ Teswadi leads among the remaining Talukas. Moreover, for the category ?Poor‘ it has the least percentage distribution. This therefore represents a real location advantage for the Goan Rivera. Name of the Percentage Distribution Taluka’s Very Good Reasonable Pernam 25.17 57.35 Bardez 30.78 61.36 Bicholim 24 57.16 Satari 26.67 58.86 Ponda 29.84 62.61 Teswadi 35.61 57.96 Mormugao 31.47 59.07 Salcete 33.98 59.13 Quepem 22.31 51.79 Canacona 22.51 50.39 Sanguem 27.72 54.8 Total 32.5 59.31 Estimated No of Tourists Poor 17.48 7.86 18.84 14.47 7.55 6.43 9.46 6.89 25.9 27.1 17.48 8.19 All 100 100 100 100 100 100 100 100 100 100 100 100 21063 470351 19734 2727 96561 552831 225849 472367 1939 28042 7389 1898853
CASE STUDY: FLOATEL Location Advantages
? ? In the heart of the business activity in Kolkotta The Floatel Rooms and the Restaurants overlook the colonial buildings like The Calcutta High Court which was the original Supreme Court of India founded in 1757, the Town Hall, Central Secretariat Building and the World famous Eden Gardens No land whatsoever is available in the business district of Calcutta to build a land hotel with the equivalent views and river-side charms of The Floatel – Floatel is possible because it‘s a floating hotel 5 minutes 5 minutes 20 minutes 15 minutes
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Eden Gardens The Oberoi Grand Airport Howrah Rail Station
The Maidan (Calcutta's version of Central Park) 5 minutes
USPs
? ? ? ? India‘s only floating urban resort Boat rides on the River Hooghly A coffee shop with spectacular views Fishing
Goan Riviera – Experience the Essence
? ? ? Exclusive jogging and walking in the Millennium Park next door Meditation and Relaxation at a Nature Park on the Ganges Left Luggage, Foreign Exchange and Doctor on call
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FACILITIES Rooms
? ? Total of 46 rooms Of these there are 3 suite rooms o Vasco-da-Gama Suite Room o Columbus Suite Room o Owner's Suite Room The remaining are Super Deluxe Rooms (Sunrise Deluxe and Sunset Deluxe) The standard rate for the different category rooms are o Sunrise Rooms : Rs 7500/- + luxury taxes o Sunset Rooms : Rs 8000/-+luxury taxes o Suite Rooms : Rs 13000/-+luxury taxes All rooms offer the following o Centrally Air Conditioned Deluxe Rooms, Optional Twin and King Sized Bed, Attached Bath with 24 hours running Hot & Cold water o Welcome Drink on Arrival, Fruit Basket on request, Daily News Paper, Readymade Tea/Coffee Maker in room with one replenishment daily o Chargeable Soft Bar in the room. Spectra wide glass window ensures a better view of the river front, Wall to Wall Carpet, Remote Controlled CTV, Telephone, Wi-Fi Connectivity o Complimentary Bottle of Mineral Water, Standard Toiletries in the Toilet, Bath Tub with Telephone Shower and Fixed Shower, Room and Bath room linens
? ?
?
Restaurants
? ? ? The restaurants are located on the Top Deck with a 24 hour multi-cuisine restaurant ?The Bridge‘ and the specialty restaurant ?The Compass Room‘ The Bridge has 102 covers and an open-air deck where one can have their food with a beautiful view of the Hooghly River The Bridge offers the following cuisines o Indian Cuisine o Colonial or Signature Cuisine o Continental Cuisine and o Oriental Cuisine
Open Air Banquets
? Open Air Banquets literally next to the river provide a wonderful location for a variety of events o Constellation Deck : Capacity 200 persons o Cosmos : Capacity 50 persons o Promenade Deck : Capacity 300-350 persons o Concourse : Capacity 450-500 persons
Goan Riviera – Experience the Essence
Closed Banqueting Areas
? The closed banqueting areas provide for official functions and corporate meetings events o State Room : ? U' Shaped Arrangement : Capacity 40 persons ? Classroom Style : Capacity 50-55 persons ? Cluster Style : Capacity 40-42 persons ? Theatre Style : Capacity 80-90 persons o Captain's Room : Capacity 20-25 persons Click for Larger View o Board Room : Capacity 10 persons o Training Room : Capacity 15-20 persons o Compass Room : ? U' Shaped Arrangement : Capacity 38-40 persons ? Classroom Style : Capacity 60 persons ? Cluster Style : Capacity 35-38 persons ? Theatre Style : Capacity 75-80 persons The Floatel also provides A High-Tech Business Center surrounded by glass windows looking onto the river Hooghly
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?
TARIFF RATES Standard Rates
? ? ? ? ? ? ? Cancellation is allowed at no charge up to 24 hours before the hotel's local Check-In time. Fixed rate will be offered throughout the dates of stay If a credit card guaranteed reservation is cancelled less than 24 hours before the hotel's Check-In time, a retention fee of one room night stay will be charged Room Type ? You Pay Average Per Average ? Tariff You Save ? Room Night Sunrise Deluxe ? Sunset Deluxe ? Suites ? 4900 4900 8500 ? ? ? Rate 7500 8000 13000 ? ? ? 34% 38% 34%
Special Credit Card Rates
? ? ? ? ? ? ? Offers variable rates depending on availability Cancellation charge will apply Booking a Special Credit Card Rate is possible only if guaranteed by a credit card Room Type ? You Pay Average Per Average ? Tariff You Save ? Room Night Sunrise Deluxe ? Sunset Deluxe ? Suites ? 4500 4500 8500 ? ? ? Rate 7500 8000 13000 ? ? ? 40% 43% 34%
Goan Riviera – Experience the Essence 3 Organisation Structure
Directors
The main borad of the committee consists of 4 members, The Board members meets 6 times in a year and calls for an Annual General Meeting in August.
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Biographies:
Soutik Sarkar – Chairman (24) B.E.(Electronics & Commn.), worked with Xchanging Technologies for 3 years as Advanced Software Analyst. Lynn Bouselly - Managing Director (22) B.A. (Economics Honours), Has worked with Watson Wyatt for 1 year as a research Analyst. Shweta Ajmani – Managing Director (23)B.COM (Honours), Has worked with Watson Wyatt for 17 months as a Research Analyst and 7 months with Mckinsey & Co in the Financial and Institutional group, Analyst. Sreejith - Managing Director (24), B Tech (Electronics and Communication), has worked with Polaris Software Lab Ltd as an Associate Consultant for 30 months.
Chairman
Managing Director Finance
Managing Director - Human Resource
Managing Director Operations
Figure 1 : ORGANIZATIONAL CHART
Goan Riviera – Experience the Essence
Manpower Planning
Manpower Requirements in GOA Luxury First Class Mid Market Budget Base Yr Estimates * 2005 – 06 Projection Year estimate * 2011 - 12 Percent Growth 585 2065 1215 728 3941 8533 117%
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The industry will also have an acute shortage of manpower in the foreseeable future and payroll costs will shoot up, directly impacting hotels‘ bottom lines. While this scenario will certainly prevail in South Asia, the problem of inadequate trained manpower persists internationally as well. We expect to see certain new developments, both in India and elsewhere: ? ? Many more hotels will need to rely heavily on technology and somehow reduce the employee to room ratio. Secondly, outsourcing of services will increase dramatically in the next few years. Currently only a few services - mostly security, landscaping, some maintenance, and potentially some housekeeping activities - are being outsourced. In the future one could have potentially all activities related to reservation and MIS reports, accounting, payroll & HR functions outsourced at the global level.
Goan Riviera – Experience the Essence 4 Financial Requirements
Modes of raising finance
Venture Capital: It is used in the small and medium sized firms for raising funds. These are usually used for ventures which involve a lot of risk in which are generally avoided by the usual investors. The venture capitalists aim to earn huge returns on their investments. They provide technical as well as managerial talent to support the new business idea. Banks: It is an institution which accepts deposits which have to be paid back in certain time. In the mean time these deposits are used to distribute loans which could be used by the new business for their initial investments, R&D etc Capital Market: This is the important source which is used to raise huge capital for a long term investment. It is the mode which offers a company to raise capital from the public. The money could be raised by shares or debentures in the primary or the secondary markets. Government Funding and Schemes: The government – both at the Centre and State – constitute yet another source of business financing. Credit support is provided in the form of loans, advances, discounting bills, project financing, term loans, export finance etc. This form of funding is however mostly focused towards the support, promotion and development of small and medium scale projects. Financial Institutions: Financial institutions have conventionally been the major source of long term funds for the economy. These provide a diverse range of financial products and services to meet the various needs of the commercial sector. In addition, they also provide support to new enterprises, small and medium firms as well as to the industries set up in the backward areas. Non-Banking Financial Companies (NBFCs): NBFCs is a diverse group of financial institutions that perform financial intermediation in many ways such as accepting deposits, making loans and advances, leasing, hire purchases, etc. Funds are raised from the public directly and indirectly; and these loans are then advanced to wholesale and retail traders, small scale industries and self employed persons. Having looked at the nature and the scope of the various modes of raising capital for new projects, we feel the large scale nature of our funding requirements as also the risk associated with it make venture capital the ideal source of raising funds for the Goan Riviera.
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Capital Contribution
30% 70% Directors Contribution Venture Capitalist
The True Costs of Venture Capital
Goan Riviera – Experience the Essence
Sub-Optimal Use Of Founder Time: When you decide to try and raise venture capital, you are basically committing to expend a fair amount of your time in the process. This time is spent on documenting your plan (either an executive summary, PowerPoint, business plan – or all three), ?pitching? your opportunity (i.e. VC meetings) and follow-ups to those meetings as VCs ask for more detail, other meetings, etc. Assuming for a minute that you get a yes/no answer relatively quickly from VCs that you pitch to (which you generally won‘t), you are still spending a lot of time trying to create a ?story? that is fundable. More often than not, this wasn‘t the story you started with. Now, if your prospects for success were actually improved as a result of doing all of this work and having all of these conversations, this wouldn‘t be such a bad thing. You could then think of this as free consulting from really smart people (and trust me on this one, VCs are really smart people). However, unfortunately, this time spent is rarely worth it (for you). Most of the time you spend putting your story together has minimal positive impact on your actual business. I can‘t prove this, but I still think I‘m right. Now, given that the most common answer you get from a VC pitch is ?maybe?, you will generally spend a lot of time trying to ?fill in the blanks? and respond to the questions/concerns/issues that the VCs have. Though some of this work may actually be useful, I‘ll still categorize it as ?suboptimal? because it is not the best time you could spend to improve your odds of success. Non-Fundable Ideas Are Not Always Bad: Let us assume that your odds of actually convincing a VC to fund your business/idea are really, really low (which they are). If they were simply rejecting ideas that had no chance of succeeding anyways, then they‘d be doing you a favor. Rejection simply means they saved you a bunch of future grief. Unfortunately, this is not the case. Simply because an idea is not VC-fundable provides little information regarding whether or not it could have been a successful business. The VC benchmark is often so high that even rational, reasonable business ideas get rejected. So, the cost to you here is that you automatically assume that your failure to raise capital is conclusive proof that you had a failure of a business. Though indeed, your idea/business may suck (I‘ve had many, many ideas that ranged from mediocre to bad), rejection from VCs is not a way to reliably determine that. Misaligned Goals: What you would call a ?success? is very different from what the VCs consider a success. What you‘re looking to do is somehow figure out a path that leads to a decent chance of putting about $3-5 million in your pocket in 3-5 years (numbers vary, but this is as good as any). With this kind of money, you could invest it all in long-term investment vehicles and live a reasonable life doing whatever you want. You‘re not going to be buying small islands, but (I‘ve been told) this is highly overrated anyways. VCs, on the other hand want a small chance at making a lot of money (i.e. 10 times whatever they invested). Why the asymmetry? Very simple. VCs have a ?portfolio? of companies (so their risk is diversified). They want 1 or 2 out of ten companies to succeed tremendously – so on average, they are making a great return for their investors. They don‘t care, if any specific company (like yours) dies – as long as the portfolio of companies does really well on average. You, on the other hand, have all of your eggs in one basket. When your life savings is wrapped up in the company (which it will be), then it is in your interests to optimize for the modest exist – anything else would be bordering on stupid. Basically, you and the VCs are looking for different things – and thereby running different companies.
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Goan Riviera – Experience the Essence
Cost Of Capital Is Very High: Putting aside all the ?softer? stuff above, its important to remember that the cost of selling your equity to a VC is actually very expensive. For discussion purposes, assume that you were offered a loan (I understand the difference between debt/equity – I‘m just trying to make a point). Lets say the interest rate is 30%. Most people would think that was very ?expensive? and would think twice about taking the loan unless they really, really had a strong belief that they needed the money and could do something with it to overcome this ?cost of capital? and were desperate because there were no other alternatives. Unfortunately, raising VC money has a similar dynamic, its just not that clear at the time you do it what your cost is. If it helps you understand it better, remember that VCs are expected to return 30%+ to their investors. By definition, these returns (and the VC salaries and bonuses), can only really come from one place – the startup companies. Sure, you may not necessarily incur this cost – but on average, somebody is paying for it. I‘m not a brilliant financial mind, but even I understand this bit. Limited VC Control: Yes, you read that right. I‘m saying that VCs actually have very limited control in what they can do in regards to your company – and that‘s a bad thing. Things VCs control include limiting founder compensation, limiting how much cash can be taken out of the company, how much debt can be incurred, etc. All of these are designed to protect their interests and are reasonably easy to understand. However, when things go badly, there‘s very little they can do to ?fix it?. Of these, the most drastic is pushing the ?CEO eject button?. Basically, VCs can fire the founder/CEO should they choose to. This may be a last desperate attempt to turn things around and try to salvage their investment when things have gone wrong. Now, here‘s the problem: In just about all companies, things will always go wrong. Its just a matter of time. The odds of you actually walking the straight and narrow path to success are near zero. So, the cost to you is that in any given year, you may be fired. Perhaps, you may need to be fired, but maybe you don‘t. Fatal Distraction: This is the most subtle of all the costs outlined so far – but, still supremely important. Once you decide to raise venture capital, your reality is distorted. You no longer think in terms of talking to customers, narrowing your focus, building a product, etc. Instead, you become singularly driven by ?building and pitching the story?. This tends to distort your reality significantly. Instead of working on figuring out the names of your first 10 potential customers, you try to find an analyst prediction that shows that you are pursuing an opportunity that could be $700 million. Or, when looked at just right, even $1 billion!! Instead of feeling satisfaction from hitting an intermediate goal of getting our product out there (even if its crap), you instead feel satisfaction because a VC called you back for a follow-up meeting. Instead of measuring ultimate success by shipping a product and generating revenue, you start thinking of ultimate success as being closing your round of capital. As it turns out, even if you do actually successfully raise VC money – you have created zero value. All you have is the opportunity to create value (and, you had that all along). This distraction is very often fatal and has killed countless startups.
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Goan Riviera – Experience the Essence
Budget Heads
Operating costs Operating costs can be broadly subdivided as: ? ? Fixed costs Variable costs
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Fixed costs include: ? ? ? Administrative and general expenses (a small portion is variable) Property taxes, and Insurance.
Variable costs include: ? ? ? Room expenses Direct expenses for food and beverage (F&B), and Management fees.
The variable component is concurrent to the occupancy and facility usage (use of food and beverage and other leisure facilities) that produced the known level of revenue or expense. There are some items that are classified as semi-fixed expenses, since they include both fixed variable portions. They include: ? ? ? Energy costs Payroll Operation and maintenance expenses.
Employee costs Currently, India has about 25 Institutes of Hotel Management (IHMs) and 150 private institutions. Together, they produce around 10,500 graduates in various courses every year. Apart from the 5-star category, the 3-star and 4-star categories also compete for the same pool of graduates. CRISIL Research expects addition of at least 30,400 rooms by 2010-11 to the current stock of rooms, which will create a need for around 55,000 employees. Fresh graduates moving abroad for employment opportunities and further education, opportunities available in other service industries and increased demand for trained manpower in the 3star and 4-star segment all put together will create a demand-supply mismatch of trained manpower. This situation will pose a problem more importantly for the budget segment, given the preference of graduates for the 5-star segment to the budget segment. Supply of trained manpower for the 5-star segment will not be a major issue when compared with the budget segment. But this increased demand for the available trained manpower has other implications for the 5-star segment. The employee retention will become an issue, due to the number of opportunities available in the burgeoning hotel industry as well as other service-oriented industries such BPOs, aviation, retail and restaurants. CRISIL Research expects increasing salaries to put pressure on operating margins, especially when RevPARs are expected to decline post-2008-09. As salaries are
Goan Riviera – Experience the Essence
sticky in the downward direction and also because of the innumerable opportunities available, laying off of staff or reducing salaries will not be an option available for hoteliers, thus affecting the profitability of properties. F&B costs Food and beverage (F&B) costs constitute costs incurred for the operation of a hotel's food, beverage and banquet facilities. F&B costs also encompass employee costs incurred in F&B operations, cost of F&B supplies, kitchen stewarding expenses (such as cleaning supplies) and service department costs (laundering napkins and tablecloths, printing menu cards, and entertainment expenses). Capital costs A hotel project is capital-intensive, with a gestation period of 2.5-3 years. The project's capital intensity varies according to the category of the hotel, the type of the property (business/leisure) and the location. On an average, the capital cost for setting up a premium segment hotel (excluding the land cost) is Rs 6-7 million, while the cost of a budget hotel (excluding the land cost) is Rs 3-4 million. The cost for building the structure of hotels would be constant across cities. However, the overall capital cost would accordingly increase, depending on the cost of land in a particular city. Civil works, plant and machinery, and interiors (which account for key costs) constitute major capital costs for a new hotel. If the land cost is included, these three costs account for nearly 70 per cent of total costs. Table 1: Hotels: Indicative cost of construction % of cost (excluding land) Civil works 40 Plant and machinery1 20 Interiors 40 1 The major items of plant and machinery include air-conditioning plant, diesel generator sets, elevators, boiler, steam piping, kitchen equipment and laundry equipment. Source: CRISIL Research The gestation period for the construction of a new premium segment hotel is 27-36 months. Table 2: Hotels: Indicative gestation period No. months 6-8 12 8-9 of
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Foundation work Super structure Interiors Source: CRISIL Research
Goan Riviera – Experience the Essence
REVENUE CONTRIBUTIONS
SEGMENT-WISE CONTRIBUTION MARGIN
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Room contribution Room contribution comprises the largest chunk of revenues in a hotel industry, accounting for 60-65 per cent of the total revenue. Room contribution is highly dependent on average room rates (ARRs) as other costs associated with rooms, such as manpower and energy, are not significant. Thus, a rise in the average room rate (ARR) results in the direct increase in room contribution. F&B contribution F&B contribution depends on F&B revenues and costs. F&B revenue comprises income from room service, restaurant and banqueting activity. Banqueting accounts for a significant portion of the total F&B revenue. The revenue from room service is directly dependent on the room occupancy in the property. It has been observed that budget hotels face intense competition from standalone restaurants as compared with premium segment hotels. Premium segment hotels are in a better position to compete with standalone restaurants, as the type of clientele visiting premium segment hotels prefer to have their dinner at the hotel itself rather than visiting a restaurant outside. Also, premium segment hotels are able to attract a large amount of customers from outside.
The Break Even Analysis of the revenues and expenses has been attached alongwith:
Break-Even.xlsx
Goan Riviera – Experience the Essence 5 The Cruise
The company proposes to buy ?Ocean Odyssey‘ presently with the Indian Ocean Cruises Ltd. for a total consideration of Rs 50 million, in ?as is where is‘ condition. This ship has been chosen as it is in a sea faring condition and only requires some minor structural changes regarding the swimming pool and the casino which are to be created after removing the lounge area and the Jacuzzi.
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Ship Details
The small cruise ship was built in the late 1980s and carries about 120 passengers in 60 passenger guest rooms. The vessel has an overall length of about 302 feet and breadth of about 50 feet, and has six decks. Decks two through six are passenger decks. With a draught of about 14 feet, the vessel travels to ports and areas of the world not navigable to larger vessels. Decks two through six are entry decks.
Figure 2 : Outboard Profile (1) Deck 1 — The first deck is open only to crew members.
Figure 3 : Second Deck (1) Deck 2 — The second deck (main deck) is approximately 302 feet long and 50 feet wide. Eleven Deluxe suites are provided in the forward half of the deck, and a galley and restaurant is provided in the after half. Near the middle of the deluxe suite area, a stair tower connects decks one through six.
Figure 4 : Third Deck (1) Deck 3 — The third deck is approximately 302 feet long and 50 feet wide. In the forward half of the deck, 19 state rooms are provided. Toward the bow, an enclosed stair connects the second deck and an open stair connects the fourth deck. After the Deluxe suite area, an
Goan Riviera – Experience the Essence
elevator lobby with two multi-user toilet rooms (one male and one female) and stair separate the Deluxe suites from the lounge near the stern, this is the lounge that is to be converted into the casino lounge.
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Figure 5 : Fourth Deck (1) Deck 4 — The fourth deck is approximately 234 feet long and 50 feet wide. In the forward half of the deck, 15 state rooms are provided. An exterior walkway (jogging track) encircles the deck. This deck has the club which is after the deluxe suite area. A bar is provided in the club and a curving stair connects the lecture lounge on the third deck. At the stern, two open stairs (one on each side) connect the third deck and another open stair connects the Jacuzzi at the stern area of the fifth deck.
Figure 6 : Fifth Deck (1) Deck 5 — The fifth deck is approximately 218 feet long and 46 feet wide. At the bow, the pilot house is located, followed by officer cabins. Near the middle of the deck, eight deluxe suites with balconies are provided. The stern area contains a buffet and an open deck area, about half covered by an awning. At the aft end of this area, a Jacuzzi (which is being converted to a small swimming pool) and open stair to the fourth deck is provided.
Figure 7 : Sixth Deck (1)
Goan Riviera – Experience the Essence
Deck 6 — The sixth deck is approximately 165 feet long and 45 feet wide. At the bow end, a large stateroom ?King‘s suite? with a forward facing balcony is provided. Behind the ?King‘s suite‘, six Super Deluxe suites with balconies are provided. Adjacent to the elevator lobby, the hair dresser‘s space is located.
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Location
We propose to anchor ?Goan Riviera‘ off the coast of Panaji near the mouth of the Mandovi river. The point of anchoring will be a kilometre from the fort Aguada Light House.
Figure 8 : Location of Goan Riviera The location of the anchorage has been chosen taking into consideration the following points: ? Accessibility – It will be only 4 kms from the Panaji Jetty, and therefore our guests will be only minutes away from the center of Goa and North Goa beaches will be easily accessible by our speed boats. The airport will be only be 45 min drive from the Jetty. ? Scenic pleasure – The anchorage point will be near the mouth of the Mandovi River and therefore the ship will have a panoramic view of the Aguada fort, Panaji Skyline and the Mormugao port. ? Exclusivity – As the place of anchorage is quite far from the shore and also off from the main shipping routes so the guests wont be disturbed by other ships and fishing trawlers. The guests can also enjoy short boating trips from the ship. ? Disturbance to general shipping : As the cruise is to be in a semi-permanent location so it is needed that the ship is not anchored in the middle of the regular shipping and barge routes.
Operating Criteria
The ?Goan Riviera‘ will operate through Mid August to July. It will be docked between Mid June and Mid August for essential maintenance works and as these are the slowest months in terms of tourist traffic due to monsoons which make the seas quite rough.
Goan Riviera – Experience the Essence 24
6 Marketing Strategy
The Goan Riveria?s marketing strategy would be to promote the experience of a luxury casino cruise hotel to draw the target consumer base of domestic and foreign tourists belonging to the higher middle class to upper class income groups. 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 ?complete experience‘ hotel, 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.
Marketing Plan
Direct Marketing A direct marketing package consisting of a brochure, letter of introduction and reply card will be sent to a list of potential guests. The guest list will be compiled by identifying the customers that are frequent residents of five star hotels in Goa (such as the Marriott, Leela and Majorda Beach Resort). The brochure and letter introduces the Goan Rivera describes what sets us apart from the other hotels. The initial mailing may contain a promotional offer: the opportunity to receive a 10% discount on the first night's room rate. Publicity and Public Relations A press conference cum launch party will be held at the Goan Rivera hotel to entertain the media and also the important members of the society. The launch party would be attended by known Bollywood celebrities so as to generate publicity and a sense of exclusivity. A news release will be sent to Goa newspapers and magazines announcing the launch of the hotel and casino and an exclusive interview of the directors would feature in popular life style magazines. Guest Reward Programs Promotional schemes such as ?live seven nights and get the eighth night free‘ will be used to target the initial customers. 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 hotel and casino in general. A comprehensive advertising strategy that includes print, television and billboard advertising will be employed:
Goan Riviera – Experience the Essence
? Print Advertising - Periodic advertising in target market area newspapers will give the Goan Rivera name-recognition benefits. From quarter page ads announcing its special features to business card-sized logo ads Television Advertising – The Company will hire the services of a professional advertising firm to create a series of television ads that emphasize the unique floating hotel experience of the Goan Rivera. Billboard Advertising – Billboards near the airport and in all main cities of Goa will carry advertisements for the Goa Rivera. These will guarantee maximum visibility and facilitate easier recall for the hotel.
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Goan Riviera – Experience the Essence 7 Licenses and Approvals
Obtain the mandatory licenses and permissions from the Government of Goa and Central Government: ? ? ? ? ? ? ? ? ? Registration under Indian Companies Act,1956. Permission from RBI under FEMA for dealing in Foreign exchange License from Director General, Shipping, Ministry of Surface Transport. NOC from the Captain of Ports, Goa Approval from the Pollution Control Board. Excise license from Commissioner of Excise for liquor items Meat Product Order for meat products Fruit Product Order for soft drinks and any fruit based products License from the Directorate of Food and Drugs Administration for food
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Office Requirements
1) Buy Land -- Under Registration Act , 1908: ?Under Section 2(6) of the Registration Act, 1908 the term "immovable property" includes: "land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries or any other benefit to arise out of land, and things attached to the earth, or permanently fastened to any thing which is attached to the earth, but not standing timber, growing crops nor grass." 2) The Office needs to be registered with land registration department 3) For any related construction of office or any related infrastructures: a) Make a plan and elevation of the whole construction and submit it to the local body (i.e., municipality, panchayat , corporation etc). In this case it is Panjim Corporation. b) Once we get the permission letter from the local body , start the construction and when construction finishes , get a completion certificate from the same local body (i.e., municipality, panchayat , corporation etc). In this case it is Panjim Corporation.
Floating Hotel
1) Get a license from the local government (i.e., municipality, panchayat, corporation etc). For municipalities and Municipal Corporations this should be in accordance with Goa Municipalities Act, 1968. In this case it is Panjim Corporation. 2) Do a sales tax registration from sales tax department and get a number and token of sales tax. Now include this number and token in all the bills of the hotel so that the Sales Tax Department can keep a track on transactions.
Bar
1) To sell alcohol, get a bar license from State Excise department.
Casino
For registration of the casino deposit processing fees of Rs 10 lakh with the Government and then get permission for the casino.
Goan Riviera – Experience the Essence
Spa
As massaging is illegal, get a certificate for ayurvedic treatment from medical department usually from DMO. Also for such a treatment, a supervision of a doctor is mandatory. So need to appoint a doctor for supervision in the spa. Also refer THE AYURVEDIC ACT, 1963.
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Electricity
We need to get a commercial connection and approval from state electricity board
Goan Riviera – Experience the Essence
PROCEDURE TO REGISTER A COMPANY
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S. No 1 2 3 Procedure Obtain director identification number (DIN) Obtain digital signature certificate Present name of company for approval to the Registrar of Companies (ROC); Get the memorandum and articles of association vetted by the Registrar and printed Make an application to the Superintendent of Stamps or an authorized bank requesting for stamping of the memorandum and articles of association. Time to complete 1 day 4 days 2-3 days Cost to complete no charge INR 400 to INR 2,650 INR 50
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1 day
INR 200 (for MOA) + INR 1000 (for AOA) for every INR 500,000 or part thereof + INR 100 (stamp paper for declaration Form 1) see comments
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Present the required documents along with the registration fee to the Registrar of Companies to get the certificate of incorporation Visit an authorized franchise or agent appointed by National Securities Depository Services Limited to obtain a permanent account number Obtain a tax account number for income taxes deducted at source from the Assessing Office in the Goa Income Tax Department Register for VAT before the Sales Tax Officer of the ward in which the company is located
5-10 days
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7 days
INR 66 (INR 66 fee & INR 5 for application form if not downloaded) INR 55
7*
7 days, simultaneously with Procedure 7 12 days, simultaneous with previous procedure 2 days, simultaneous with procedure 10
8*
INR 5,000 (Registration Fee) + INR 100 (Stamp Duty) no charge
9*
Register for profession tax
10*
Register with Organization
Employees'
Provident
Fund
2 days, simultaneous with procedure 10 1 day, simultaneous with procedure 10
no charge
11*
Register for medical insurance (ESIC)
no charge
* Is performed simultaneously with another procedure
Goan Riviera – Experience the Essence
EXPLANATIONS PROCEDURES INVOLVED IN THE REGISTRATION OF A 29 COMPANY
? Procedure 1. Obtain director identification number (DIN) Obtain the provisional DIN by filing application Form DIN-1 online. This form is on the Ministry of Corporate Affairs 21st Century (MCA 21) portal (www.mca.gov.in). The provisional DIN is immediately issued. The application form must then be printed and signed and sent for approval to the ministry by courier along with proof of identity and address. The concerned authority verifies all the documents and, upon approval, issues a permanent DIN. The process takes about 4 weeks. Within 30 days of receipt of the approved DIN, directors submit Form DIN-2 to the MCA with the approved number of all companies of which they hold a director position. The above companies submit Form DIN-3 attested by the Company Secretary to the concerned Registrar of Companies (ROC). ? Procedure 2. Obtain digital signature certificate The digital signature certificate can be obtained from six private agencies authorized by MCA 21. To use the new electronic filing system under MCA 21, the applicant must obtain a Class-II Digital Signature Certificate. Company directors submit the prescribed application form along with proof of identity and address. Each agency has its own fee structure, ranging from INR 400 to INR 2650. ? Procedure 3. Present name of company for approval to the Registrar of Companies (ROC); Get the memorandum and articles of association vetted by the Registrar and printed Company name approval must be done electronically. Under e-filing for name approval, the applicant can check the availability of the desired company name on the MCA 21 Web site. The Registrar of Companies electronically informs the applicant whether the name is available within 7 days of the date of application submission. If approved, the memorandum and articles of association and miscellaneous documents must be filed within 6 months of the approval. In practice, if the proposed name is available, the approval is granted within 2 or 3 days. ? Procedure 4. Make an application to the Superintendent of Stamps or an authorized bank requesting for stamping of the memorandum and articles of association The request for stamping the incorporation documents should be accompanied by unsigned copies of the memorandum and articles of association and the payment receipt. The company must ensure that the copies submitted to the Superintendent of Stamps or to the authorized bank for stamping are unsigned and that no promoter or subscriber has written anything on it by hand. The Superintendent returns the copies, one of which is duly stamped, signed, and embossed, showing payment of the requisite
Goan Riviera – Experience the Essence
stamp duty. Once the memorandum and articles of association have been stamped, they must be signed and dated by the company promoters, including the company name and the description of its activities and purpose, father‘s name, address, occupation, and the number of shares subscribed. This information must be in their own handwriting, duly witnessed. ? Procedure 5. Present the required documents along with the registration fee to the Registrar of Companies to get the certificate of incorporation After the stamping of the memorandum and articles of association, three copies must be scanned and uploaded on the MCA 21 portal with the following documents: - The stamped copies of the memorandum and articles of association. - Form 32 (copy), along with the consent letters of the company directors appointed therein. - Form 1, application and declaration for company incorporation (printed on non-judicial stamp paper worth INR 20. Form 18, evidencing the address the company. - Form-1A, evidencing approval of company name. - Copy of challenge, evidencing the fee for these forms. - Power of attorney from the subscribers for third parties to amend registration documentation, filed on non-judicial stamped paper worth INR 100. - Personal identity documentation for the subscribers (a copy of driving license, passport, or voter identity or ration card). These documents must also be filed in original with the Registrar of Companies. The registration fees paid to the Registrar are scaled according to the company‘s authorized capital (as stated in its memorandum): - INR 100,000 or less: INR 4,000. If the nominal share capital is over INR 100,000, additional fees based the amount of nominal capital apply to the base registration fee of INR 4,000: - For every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 1,00,000, up to INR 500,000: INR 300. - For every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 500,000, up to INR 5,000,000: INR 200. - For every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 5,000,000, up to INR 1 10,000,000: INR 100. - For every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 10,000,000: INR 50. The Registrar will scrutinize the documents filed by the company and, if necessary, the authorized person will make and initial the necessary corrections. That person will be provided the certificate of incorporation of the company at the Registrar office. The company can start operations on receiving an incorporation certificate from Registrar. The other procedures (below) can be completed after the business is started. Procedure 6. Visit an authorized franchise or agent appointed by National Securities Depository Services Limited to obtain a permanent account number Under the Income Tax Act, 1961, each person must quote his or her permanent account number (PAN) for tax payment purposes and the tax deduction and collection account number (TAN) for depositing tax deducted at source. The Central Board of Direct Taxes (CBDT) has instructed banks not to accept any form for tax payment without the PAN or TAN, as applicable. Any authorized franchise or agent appointed by The National Securities Depository Services Limited can accept and process a PAN application. If an application is made through a service center, 14 days are
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Goan Riviera – Experience the Essence
required. The PAN application is made on Form 49A, with a certified copy of the certificate of registration, issued by the Registrar of Companies, along with proof of company address and personal identity. A fee of INR 60 (plus applicable taxes) applies for processing the PAN application and for the request for a new PAN card or changes or corrections in PAN data. PAN forms can be obtained from TIN Facilitation Centers (TINFCs) or freely download from www.tin-nsdl.com ? ? Procedure 7. ? ? Obtain a tax account number for income taxes deducted at source from the Assessing Office in the Goa Income Tax Department ? The tax deduction and collection account number (TAN) is a 10-digit alphanumeric number required by all persons responsible for deducting or collecting tax. The provisions of Section 203A of the Income Tax Act require that all persons who deduct or collect tax at the source must apply for a TAN. The section also makes it mandatory for the TAN to be quoted in all taxdeducted-at-source (TDS) and tax-collected-at-source (TCS) returns, all TDS/TCS payment fines, and all TDS/TCS certificates issued. The application for allotment of a TAN must be filed using Form 49B and submitted at any TIN Facilitation Center authorized to receive e-TDS returns. Locations of TIN Facilitation Centers are at www.incometaxindia.gov.in and http://tin.nsdl.com. The processing fee for both applications (a new TAN or a change request) is INR 50 (plus applicable taxes). The national government levies the income tax. Since outsourcing, any authorized franchise or agent appointed by National Securities Depository Services Limited can accept and process the TAN application. ? Procedure 8. ? ? VAT tax registration will be effective from the date of application. In the state of Goa, from April 1, 2005, the sales tax has been replaced by the VAT, which requires registration by filing Form 101. The authorized representative signing the application must be available at the Sales Tax Office on the day of application verification. ? In addition to Form 101, other accompanying documentation includes: ? Certified true copy of the memorandum and articles of association of the company ? Registered office address proof of the company ? Antecedents of directors ? Copy of the office premises agreement as proof of the place of business ? Copy of the income tax order. ? PAN card ? Bank current account number ? Original challan of payment of registration fees ? Two passport-size photographs of the authorized signatory ? Board resolution authorizing the signatory to sign the application form, appear before the Sales Tax Officer, and complete the formalities related to registration Procedure 9. Register for profession tax
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Goan Riviera – Experience the Essence
According to section 5 of the Profession Tax Act, every employer (not being an officer of the government is liable to pay tax and shall obtain a certificate of registration from the prescribed authority. The company is required to apply in Form I to the registering authority. Depending on the nature of the business, the application should be supported with such documents as address proof, details of company registration number under Indian Companies Act (1956), details of head office (if the company is a branch of company registered outside the state), company deed, certificates under any other act, and so forth. ? Procedure 10. Register with Employees' Provident Fund Organization The Provident Commission is part of local labor authority. The applicant fills in an application and is then allotted a social security number. The Provident Fund registration focuses on delinquent reporting, underreporting, or not reporting of workforce size. Provident Fund registration is optional if workforce size is not more than 20. ? Procedure 11. Register for medical insurance (ESIC) Registration is the process by which every employer/factory and every employee employed for wages are identified for the purpose of the medical insurance scheme and their individual records are set up for them. The employer registration form is Form 1A, and employers can submit an application online for registration under the Employees State Insurance Corporation ESI Act of 1948.
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Goan Riviera – Experience the Essence
EMPLOYING WORKERS
Protection of the interests of labor is the responsibility of the State in the democratic countries. Under the Constitution of India, Labor is a subject in the Concurrent List where both the Central and the State Governments are competent to enact legislations subject to certain matters being reserved for the Centre. The Ministry of Labor and Employment has the responsibility of protecting and safeguarding the interests of workers in general and those of the poor, deprived and disadvantaged sections of the society, in particular. It also has the responsibility of creating a healthy work environment for higher production and productivity and to develop and coordinate vocational skill training and employment services. These objectives are sought to be achieved through enactment and implementation of various labor laws, which regulate the terms and conditions of service and employment of workers.
Laws relating to wages:
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A company must formulate its wage and salary policy in an integrated manner by taking into account the overall objectives of setting up the business. This is because a remunerative wage structure helps the organization in obtaining and retaining a healthy, competent and devoted work force, which in turn affects its productivity and profitability. Such a wage policy acts as a dominating force in motivating the employees to contribute their maximum worth to the enterprise. There are three main legislations governing wages: ?
Payment of Wages Act, 1936: The Payment of Wages Act, 1936 is a central legislation which has been enacted to regulate the payment of wages to workers employed in certain specified industries and to ensure a speedy and effective remedy to them against illegal deductions and/or unjustified delay caused in paying wages to them. It applies to the persons employed in a factory, industrial or other establishment or in a railway, whether directly or indirectly, through a sub-contractor. Further, the Act is applicable to employees drawing wages up to Rs. 1600/- a month. Minimum Wages Act, 1948: The Minimum Wages Act, 1948 was enacted to safeguard the interests of workers, mostly in the unorganized sector by providing for the fixation of minimum wages in certain specified employments. It binds the employers to pay their workers the minimum wages fixed under the Act from time to time. Under the Act, both the Central Government and the State Governments are the appropriate Governments to fix, revise, review and enforce the payment of minimum wages to workers in respect of 'scheduled employments' under their respective jurisdictions. There are 45 scheduled employments in the Central sphere and as many as 1530 in State sphere. Payment of Bonus Act, 1965: The Payment of Bonus Act, 1965 was enacted to provide for the payment of bonus to persons employed in certain establishments on the basis of profits or productivity and for the matters connected therewith. The Act applies to:- (i) every factory as defined under the Factories Act, 1948; and (ii) every other establishment in which twenty or more persons are employed on any day during an accounting year. However, the Government may, after giving two months' notification in the Official Gazette, make the Act applicable to any factory or establishment employing less than twenty but not less than ten persons.
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Goan Riviera – Experience the Essence
Articles of association
POWERS OF DIRECTORS The business of the company shall be managed by the directors who may exercise all the powers of the company. The directors may, by power of attorney, appoint any person to be the agent of the company in specific conditions to delegate all or any of his powers. NUMBER OF DIRECTORS The number of directors (other than alternate directors) shall not be subject to any maximum but shall be not less than two. ALTERNATE DIRECTORS Any director (other than an alternate director) may appoint any other director, or any other person approved by resolution of the directors An alternate director shall be entitled to receive notice of all meetings of directors and of all meetings of committees of directors and to vote at any such meetings Any appointment or removal of an alternate director shall be by notice to the company signed by the director or board of directors An alternate director shall be deemed for all purposes to be a director and shall alone be responsible for his own acts and defaults DELEGATION OF DIRECTORS‘ POWERS The directors may delegate any of their powers to any committee consisting of one or more directors. APPOINTMENT AND RETIREMENT OF DIRECTORS The company may by ordinary resolution appoint a person who is willing to act to be a director either to fill a vacancy or as an additional director DISQUALIFICATION AND REMOVAL OF DIRECTORS The office of a director shall be vacated if: He ceases to be a director by virtue of any provisions or he becomes prohibited by law from being a director; or he becomes bankrupt ; or he is suffering from mental disorder and either: he resigns his office by notice to the company; or
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REMUNERATION OF DIRECTORS The directors shall be entitled to remunerations as the company by ordinary resolution determine and,
Goan Riviera – Experience the Essence
the remuneration shall be deemed to accrue from day to day. DIRECTORS‘ EXPENSES The directors may be paid all travelling, hotel, and other expenses properly incurred by them in connection with their discharge of duties. PROCEEDINGS OF DIRECTORS The directors may regulate their proceedings as they think fit. A director may, and the secretary at the request of a director shall, call a meeting of the directors. Questions arising at a meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman shall have a second or casting vote. A director who is also an alternate director shall be entitled in the absence of his appointor to a separate vote on behalf of his appointor in addition to his own vote. A director shall not vote at a meeting of directors or of a committee of directors on any resolution concerning a matter in which he has, directly or indirectly, an interest. A director shall not be counted in the quorum present at a meeting in relation to a resolution on which he is not entitled to vote. SECRETARY The secretary shall be appointed by the directors upon such remuneration they may think fit; and any secretary so appointed may be removed by them. MINUTES The directors shall cause minutes to be made in books kept for the purpose of all proceedings at meetings of the company, including the names of the directors present at each such meeting.
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THE SEAL The seal shall only be used by the authority of the directors or of a committee of directors authorised by the directors. ACCOUNTS No member shall have any right of inspecting any accounting records or other book or document of the company except as authorised by the directors or by ordinary resolution of the company. WINDING UP If the company is wound up, the liquidator may, divide among the members.
Goan Riviera – Experience the Essence
MEMORANDUM OF ASSOCIATION
MEMORANDUM OF ASSOCIATION OF Goan Riviera LIMITED
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I. II. III.
The name of the Company is Goan Riviera LIMITED. The Registered Office of the Company will be situated in the State of Goa. The objects for which the Company is established are the following:
A. MAIN OBJECT TO BE PURSUED ON INCORPORATION OF THE COMPANY
1.Setting up of ‘Goan Riviera’ a concept luxury casino cruise hotel, with 110 "boutique style" rooms specializing in creating an experience getaway to provide relaxation and recreation in Panaji, the capital of the popular tourist state of Goa
B. THE OBJECTS INCIDENTAL OR ANCILLARY TO THE ATTAINMENT OF MAIN OBJECTS
1. To park the cruise anywhere on the shores of the Goa where company finds suitable for entertaining its guests pertaining to the restrictions of the Government. 2. To allow the functioning of casino activities to entertain the guests only on the vessel and strictly not outside the vessel or its premises 3. To allow ayurvedic treatment of the guests on the vessel on the supervision of a doctor mainly for two purposes 1) for healing and providing relief to guests who are suffering from long diseases like back pain , migraine etc 2) for providing rejuvenating treatment to patients 4. To entertain guests with cultural activities in the vessel 5. To arrange for the travel of the guests who are booking their rooms in advance in case they need it. 6. To facilitate exchange facilities of foreign currencies in case guests from foreign countries need it. 7. To enter into agreements with local tour operators for spreading awareness of the company among tourists and for facilitating the transport arrangement of tourists
doc_512153480.docx
plan for a luxury cruise.Can be useful for people looking at luxury,hospitality marketing
2008
Goan Riviera – Experience the Essence
Goan Riviera – Experience the Essence 2
Mission
We believe that caring for guests has gone beyond the scope of just hoteliering, it is now more of presenting an experience to the guest which is par excellence. The experience should start from the time the guest starts planning for the holiday and this should go on to build a never ending relationship. Our pampering of the customer should start with innovation, continue with the search of excellence and finally celebrate excellence. But beyond all this is the simple and endearing philosophy...... Atithi Devo Bhava (Guest is God)
Goan Riviera – Experience the Essence 3 Contents
1 2 3 4 5 6 7 Executive Summary ........................................................................................................................ 4 Market Analysis ............................................................................................................................... 6 Organisation Structure .................................................................................................................. 13 Financial Requirements ................................................................................................................ 15 The Cruise ..................................................................................................................................... 21 Marketing Strategy ........................................................................................................................ 24 Licenses and Approvals ................................................................................................................ 26
Goan Riviera – Experience the Essence 1 Executive Summary
Introduction
We, BASS and Co., seek funds for the setting up of ?Goan Riviera‘ a concept luxury casino cruise hotel, with 110 "boutique style" rooms specializing in creating an experience getaway to provide relaxation and recreation in Panaji, the capital of the popular tourist state of Goa. Priced between the high-end hotel properties and the general 4–Star hotels, ?Goan Riviera‘ shall create a niche for high luxury cruise experience not presently available in Goa. The idea is to buy the ?Ocean Odyssey‘ presently with the Indian Ocean Cruises Ltd., combined with an on-board lounge, swimming pool, and theme bar, we are seeking investment funds to renovate the ship, build-out a piano bar/lounge area with dance floor, and construct an outdoor miniature golf course and mini theatre. With this refurbishment and other new amenities, ?Goan Riviera‘ will form the basis of a highly profitable cruise-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 market analysis and the latent demand for such a niche experience. Renovation of the ?Ocean Odyssey‘ will be done keeping in mind the Goan theme and the predominant Portuguese influence present here. Our cruise-hotel's basic design elements will not be tampered with and due to the underlying principle of the cruise-hotel being generally anchored off the coast, major overhauling of the engines wouldn‘t be required.
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The Location
The Goan Riviera is to be semi-permanently anchored in the sea, a kilometre off the coast of Panaji. The anchor point will be off the main thoroughfare of the barges so that the guests can have an undisturbed experience. Guests will be escorted to the hotel from the company owned private jetty in a small catamaran.
Our Services
The hotel will have 110 deluxe suites and 8 penthouses. It will have conference facilities for 30 people. The hotel will have an outdoor swimming pool, a mini theatre, 2 themed restaurants, and a bar with a dance floor that will provide live entertainment. The upper deck will have a miniature golf course for the guests to practise their swings while on their holidays. For the guests to take back remembrances and souvenirs from their trip to Goa, the hotel will also have a small curio shop.
The Company
BASS and Co. is a new start-up partnership that has been created to launch this business. The four partners will equal interest in this partnership are Lynn Bouselly, Shweta Ajmani, Soutik Sarkar and Sreejith S.
The Market
The Indian hospitality industry is in the midst of a strong cyclical upturn on the back of a buoyant economy, with a growth in business and leisure tourists @ 25% p.a. and an existing shortage in room supply of about 100,000 guest rooms according to the Ministry of Tourism, Government of India. An additional 100,000 guest rooms are required to meet the projected foreign tourist arrival of 10 million by 2015. And the premium end of the market
Goan Riviera – Experience the Essence
(5 Star Deluxe) generates around 65-70% of the industry revenue, and this is the sector we plan to tap. According to a recent study by hotel monitoring body: HVS International, the status of hotel rooms needed and available by the year 2009, in some major destinations, would be as follows: Destination Bangalore Goa Hyderabad Chennai Rooms needed by 2009 20,000 6,500 8,000 7,500 Rooms available by 2009 6,800 2,800 5,400 5,000
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From the table it is obvious that Goa with some other destinations in India has acute shortage of rooms, and with the proposed International Airport in Goa and allowance of open charter policy, the time is right to present to the discerning customer the ultimate Goan experience.
Financial Considerations
After due consideration for all the budget needs for the whole project was done it was felt that as the partners don‘t have enough capital to start the business on their own and would need external funding. With the modes of financing presently available and the funding requirements it is felt that the best way for arranging the capital would be through the Venture Capital route.
Goan Riviera – Experience the Essence 2 Market Analysis
About Goa
Goa also known as "Pearl of the Orient" is the hub of tourism industry in India handling almost 12 % of tourists of the country. The numbers of tourists visiting Goa is more than two million a year and among those 400,000 were from abroad. Tourism is the main industry in Goa which provides a major chunk of GDP of the state. The following sections summarise the data that we will be basing our market analysis on. All the figures quoted are sourced from ?Collection of Domestic Tourism Statistics for the State of Goa – Final Report 2006‘ prepared by the Ministry of Tourism, Government of India.
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Tourist Statistics
Foreign Overnight visitors 16%
Domestic Overnight Visitors 84%
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In 2006, 18,98,853 domestic tourists visited Goa while the number of foreign tourists was 3,48,396.
Tourist trends
The main purpose of domestic and foreign tourists was leisure. Data reveal that 83.56% and 86.49% of domestic and foreign tourists respectively visited for leisure.
100% 80% 60% 40% 20% 0% Domestic Tourists Foreign Tourists Others Leisure
Goan Riviera – Experience the Essence
The above data suggests that Goa is a preferred destination for leisure and enjoyment by both domestic and foreign tourists. The Goan Rivera will cater to this very desire: facilities such as the casinos, shopping centres, theatres, discotheques etc will be equipped to capitalise on these trends.
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Income and Stay of tourists
Find below the table which describes the domestic tourist incomes. Annual income of the household: Up to 1 Lakh 1-2 Lakh 2-5 Lakh 5-10 Lakh 10 Lakh + NA/DK All Domestic tourists Percentage distribution 20.82 33.90 29.94 6.87 4.80 3.67 100.00
Here we can see that around 11.5% of domestic tourists visiting Goa are above Rs.5 lakh income group, i.e. an estimated 2.2 lakh tourists per year and this is the consumer base that the Goan Rivera will target. The next table will show us the trend of night stays in Goa by domestic and foreign tourists. Type of Percentage distribution according to number of nights stay tourists Domestic Foreign All 1 5.28 1.18 4.10 2 12.41 1.89 9.06 3 18.67 9.17 15.38 4 21.44 8.12 15.53 5 15.35 10.29 12.86 6 11.24 11.40 11.41 7 8.06 16.05 11.12 8 5.60 11.39 8.18 8+ 2.13 30.51 12.65 Estimated no. 1862704 348370 2211074
The table suggests that over 2.64 lakh tourists in 2006 were in Goa for a long vacation i.e. they spent more than 8 nights. We estimate that the more tourists spend time in Goa, the more they would be interested in unique experiences such as a stay in a floating hotel. Statistics - GOA Parameter Occupancy Average rate (Indian Rupees) Average rate (US Dollars) RevPAR(Indian Rupees) RevPAR(US Dollars) 2002 - 2003 - 2004 - 2005 - 2006 - 2007 - 2008 2003 2004 2005 2006 2007 2008 2009 60.50 59.30 62.50 69.20 69.96 76.96 84.65 2754.00 3086.00 3985.00 4663.00 5022.05 5408.75 5825.22 57.00 67.00 89.00 105.00 109.52 114.22 119.14
1766.00 1830.00 2491.00 3227.00 3514.20 3826.97 4167.57 34.00 40.00 56.00 73.00 76.94 81.10 85.48
Goan Riviera – Experience the Essence
Occupancy
100.00 80.00 60.00 40.00 20.00 0.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
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RevPAR (INR)
4500.00 4000.00 3500.00 3000.00 2500.00 2000.00 1500.00 1000.00 500.00 0.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Average rate (INR)
7000.00 6000.00 5000.00 4000.00 3000.00 2000.00 1000.00 0.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source : HVS International The data was provided till 2005 - 2006, Data for 2006 onwards is an estimate based on the CAGR
On general the Hotel industry is observing an upward trend as there has been an increase in the occupancy rate and the average room rate. The Increase in room rate also helps in increasing the profit margins making it the sustainable industry.
Goan Riviera – Experience the Essence
Hotel Classification - Occupancy
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Hotel Classification - Average Rate
The markets across categories witnessed an increase both in terms of occupancy and average rate. However, the occupancy growths were a lot more tepid than in the past few years and the five-star category actually saw occupancies decline marginally. Average rates, on the other hand, saw exceptionally strong increases over the previous year.
SWOT Analysis Opportunity –
? ? India‘s strong GDP performance, strengthening of ties with the developed world and the opening of sectors of the economy to private sector/ foreign investment. Domestic travel, both business and leisure, has benefited from a strong performance of the corporate sector in India, and the overall sense of optimism with regard to the economy. Increase in charter flights into India and new airlines providing additional seats for domestic travel Goa as a destination is very popular amongst Europeans, Goa is now increasingly sought-after by domestic tourists as well as the growing MICE segment.
? ?
Threats –
? The increasing taxes are contributing to the shrinking profit margins, which makes the business less lucrative. The hospitality sector is being charged almost 52 per cent of its earning through various taxes and levies by locals and Central government, thereby contributing 32 per cent of the Gross Domestic Product (GDP). The outsourcing of visas and tour operators charging 60 pounds as a surcharge is contributing to the tourist downfall. The increase in the fuel charges lead to the increase in the prices of the air tickets which in turn causes the decrease in demand. This negatively affected the hotel industry with lesser number of tourists. Due to fall in demand for air tickets, the
? ?
Goan Riviera – Experience the Essence
number of flights at Goa's Dabolim Airport has plunged down from 42 flights per day to mere 25
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Places of major interests in Goa
The table given below is an indication of tourist‘s perception about various places in Goa. Teswadi Taluka which includes the capital city of Panaji appears to be a major tourist attraction. For the two positive categories ?Very Good‘ and ?Reasonable‘ Teswadi leads among the remaining Talukas. Moreover, for the category ?Poor‘ it has the least percentage distribution. This therefore represents a real location advantage for the Goan Rivera. Name of the Percentage Distribution Taluka’s Very Good Reasonable Pernam 25.17 57.35 Bardez 30.78 61.36 Bicholim 24 57.16 Satari 26.67 58.86 Ponda 29.84 62.61 Teswadi 35.61 57.96 Mormugao 31.47 59.07 Salcete 33.98 59.13 Quepem 22.31 51.79 Canacona 22.51 50.39 Sanguem 27.72 54.8 Total 32.5 59.31 Estimated No of Tourists Poor 17.48 7.86 18.84 14.47 7.55 6.43 9.46 6.89 25.9 27.1 17.48 8.19 All 100 100 100 100 100 100 100 100 100 100 100 100 21063 470351 19734 2727 96561 552831 225849 472367 1939 28042 7389 1898853
CASE STUDY: FLOATEL Location Advantages
? ? In the heart of the business activity in Kolkotta The Floatel Rooms and the Restaurants overlook the colonial buildings like The Calcutta High Court which was the original Supreme Court of India founded in 1757, the Town Hall, Central Secretariat Building and the World famous Eden Gardens No land whatsoever is available in the business district of Calcutta to build a land hotel with the equivalent views and river-side charms of The Floatel – Floatel is possible because it‘s a floating hotel 5 minutes 5 minutes 20 minutes 15 minutes
?
Eden Gardens The Oberoi Grand Airport Howrah Rail Station
The Maidan (Calcutta's version of Central Park) 5 minutes
USPs
? ? ? ? India‘s only floating urban resort Boat rides on the River Hooghly A coffee shop with spectacular views Fishing
Goan Riviera – Experience the Essence
? ? ? Exclusive jogging and walking in the Millennium Park next door Meditation and Relaxation at a Nature Park on the Ganges Left Luggage, Foreign Exchange and Doctor on call
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FACILITIES Rooms
? ? Total of 46 rooms Of these there are 3 suite rooms o Vasco-da-Gama Suite Room o Columbus Suite Room o Owner's Suite Room The remaining are Super Deluxe Rooms (Sunrise Deluxe and Sunset Deluxe) The standard rate for the different category rooms are o Sunrise Rooms : Rs 7500/- + luxury taxes o Sunset Rooms : Rs 8000/-+luxury taxes o Suite Rooms : Rs 13000/-+luxury taxes All rooms offer the following o Centrally Air Conditioned Deluxe Rooms, Optional Twin and King Sized Bed, Attached Bath with 24 hours running Hot & Cold water o Welcome Drink on Arrival, Fruit Basket on request, Daily News Paper, Readymade Tea/Coffee Maker in room with one replenishment daily o Chargeable Soft Bar in the room. Spectra wide glass window ensures a better view of the river front, Wall to Wall Carpet, Remote Controlled CTV, Telephone, Wi-Fi Connectivity o Complimentary Bottle of Mineral Water, Standard Toiletries in the Toilet, Bath Tub with Telephone Shower and Fixed Shower, Room and Bath room linens
? ?
?
Restaurants
? ? ? The restaurants are located on the Top Deck with a 24 hour multi-cuisine restaurant ?The Bridge‘ and the specialty restaurant ?The Compass Room‘ The Bridge has 102 covers and an open-air deck where one can have their food with a beautiful view of the Hooghly River The Bridge offers the following cuisines o Indian Cuisine o Colonial or Signature Cuisine o Continental Cuisine and o Oriental Cuisine
Open Air Banquets
? Open Air Banquets literally next to the river provide a wonderful location for a variety of events o Constellation Deck : Capacity 200 persons o Cosmos : Capacity 50 persons o Promenade Deck : Capacity 300-350 persons o Concourse : Capacity 450-500 persons
Goan Riviera – Experience the Essence
Closed Banqueting Areas
? The closed banqueting areas provide for official functions and corporate meetings events o State Room : ? U' Shaped Arrangement : Capacity 40 persons ? Classroom Style : Capacity 50-55 persons ? Cluster Style : Capacity 40-42 persons ? Theatre Style : Capacity 80-90 persons o Captain's Room : Capacity 20-25 persons Click for Larger View o Board Room : Capacity 10 persons o Training Room : Capacity 15-20 persons o Compass Room : ? U' Shaped Arrangement : Capacity 38-40 persons ? Classroom Style : Capacity 60 persons ? Cluster Style : Capacity 35-38 persons ? Theatre Style : Capacity 75-80 persons The Floatel also provides A High-Tech Business Center surrounded by glass windows looking onto the river Hooghly
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?
TARIFF RATES Standard Rates
? ? ? ? ? ? ? Cancellation is allowed at no charge up to 24 hours before the hotel's local Check-In time. Fixed rate will be offered throughout the dates of stay If a credit card guaranteed reservation is cancelled less than 24 hours before the hotel's Check-In time, a retention fee of one room night stay will be charged Room Type ? You Pay Average Per Average ? Tariff You Save ? Room Night Sunrise Deluxe ? Sunset Deluxe ? Suites ? 4900 4900 8500 ? ? ? Rate 7500 8000 13000 ? ? ? 34% 38% 34%
Special Credit Card Rates
? ? ? ? ? ? ? Offers variable rates depending on availability Cancellation charge will apply Booking a Special Credit Card Rate is possible only if guaranteed by a credit card Room Type ? You Pay Average Per Average ? Tariff You Save ? Room Night Sunrise Deluxe ? Sunset Deluxe ? Suites ? 4500 4500 8500 ? ? ? Rate 7500 8000 13000 ? ? ? 40% 43% 34%
Goan Riviera – Experience the Essence 3 Organisation Structure
Directors
The main borad of the committee consists of 4 members, The Board members meets 6 times in a year and calls for an Annual General Meeting in August.
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Biographies:
Soutik Sarkar – Chairman (24) B.E.(Electronics & Commn.), worked with Xchanging Technologies for 3 years as Advanced Software Analyst. Lynn Bouselly - Managing Director (22) B.A. (Economics Honours), Has worked with Watson Wyatt for 1 year as a research Analyst. Shweta Ajmani – Managing Director (23)B.COM (Honours), Has worked with Watson Wyatt for 17 months as a Research Analyst and 7 months with Mckinsey & Co in the Financial and Institutional group, Analyst. Sreejith - Managing Director (24), B Tech (Electronics and Communication), has worked with Polaris Software Lab Ltd as an Associate Consultant for 30 months.
Chairman
Managing Director Finance
Managing Director - Human Resource
Managing Director Operations
Figure 1 : ORGANIZATIONAL CHART
Goan Riviera – Experience the Essence
Manpower Planning
Manpower Requirements in GOA Luxury First Class Mid Market Budget Base Yr Estimates * 2005 – 06 Projection Year estimate * 2011 - 12 Percent Growth 585 2065 1215 728 3941 8533 117%
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The industry will also have an acute shortage of manpower in the foreseeable future and payroll costs will shoot up, directly impacting hotels‘ bottom lines. While this scenario will certainly prevail in South Asia, the problem of inadequate trained manpower persists internationally as well. We expect to see certain new developments, both in India and elsewhere: ? ? Many more hotels will need to rely heavily on technology and somehow reduce the employee to room ratio. Secondly, outsourcing of services will increase dramatically in the next few years. Currently only a few services - mostly security, landscaping, some maintenance, and potentially some housekeeping activities - are being outsourced. In the future one could have potentially all activities related to reservation and MIS reports, accounting, payroll & HR functions outsourced at the global level.
Goan Riviera – Experience the Essence 4 Financial Requirements
Modes of raising finance
Venture Capital: It is used in the small and medium sized firms for raising funds. These are usually used for ventures which involve a lot of risk in which are generally avoided by the usual investors. The venture capitalists aim to earn huge returns on their investments. They provide technical as well as managerial talent to support the new business idea. Banks: It is an institution which accepts deposits which have to be paid back in certain time. In the mean time these deposits are used to distribute loans which could be used by the new business for their initial investments, R&D etc Capital Market: This is the important source which is used to raise huge capital for a long term investment. It is the mode which offers a company to raise capital from the public. The money could be raised by shares or debentures in the primary or the secondary markets. Government Funding and Schemes: The government – both at the Centre and State – constitute yet another source of business financing. Credit support is provided in the form of loans, advances, discounting bills, project financing, term loans, export finance etc. This form of funding is however mostly focused towards the support, promotion and development of small and medium scale projects. Financial Institutions: Financial institutions have conventionally been the major source of long term funds for the economy. These provide a diverse range of financial products and services to meet the various needs of the commercial sector. In addition, they also provide support to new enterprises, small and medium firms as well as to the industries set up in the backward areas. Non-Banking Financial Companies (NBFCs): NBFCs is a diverse group of financial institutions that perform financial intermediation in many ways such as accepting deposits, making loans and advances, leasing, hire purchases, etc. Funds are raised from the public directly and indirectly; and these loans are then advanced to wholesale and retail traders, small scale industries and self employed persons. Having looked at the nature and the scope of the various modes of raising capital for new projects, we feel the large scale nature of our funding requirements as also the risk associated with it make venture capital the ideal source of raising funds for the Goan Riviera.
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Capital Contribution
30% 70% Directors Contribution Venture Capitalist
The True Costs of Venture Capital
Goan Riviera – Experience the Essence
Sub-Optimal Use Of Founder Time: When you decide to try and raise venture capital, you are basically committing to expend a fair amount of your time in the process. This time is spent on documenting your plan (either an executive summary, PowerPoint, business plan – or all three), ?pitching? your opportunity (i.e. VC meetings) and follow-ups to those meetings as VCs ask for more detail, other meetings, etc. Assuming for a minute that you get a yes/no answer relatively quickly from VCs that you pitch to (which you generally won‘t), you are still spending a lot of time trying to create a ?story? that is fundable. More often than not, this wasn‘t the story you started with. Now, if your prospects for success were actually improved as a result of doing all of this work and having all of these conversations, this wouldn‘t be such a bad thing. You could then think of this as free consulting from really smart people (and trust me on this one, VCs are really smart people). However, unfortunately, this time spent is rarely worth it (for you). Most of the time you spend putting your story together has minimal positive impact on your actual business. I can‘t prove this, but I still think I‘m right. Now, given that the most common answer you get from a VC pitch is ?maybe?, you will generally spend a lot of time trying to ?fill in the blanks? and respond to the questions/concerns/issues that the VCs have. Though some of this work may actually be useful, I‘ll still categorize it as ?suboptimal? because it is not the best time you could spend to improve your odds of success. Non-Fundable Ideas Are Not Always Bad: Let us assume that your odds of actually convincing a VC to fund your business/idea are really, really low (which they are). If they were simply rejecting ideas that had no chance of succeeding anyways, then they‘d be doing you a favor. Rejection simply means they saved you a bunch of future grief. Unfortunately, this is not the case. Simply because an idea is not VC-fundable provides little information regarding whether or not it could have been a successful business. The VC benchmark is often so high that even rational, reasonable business ideas get rejected. So, the cost to you here is that you automatically assume that your failure to raise capital is conclusive proof that you had a failure of a business. Though indeed, your idea/business may suck (I‘ve had many, many ideas that ranged from mediocre to bad), rejection from VCs is not a way to reliably determine that. Misaligned Goals: What you would call a ?success? is very different from what the VCs consider a success. What you‘re looking to do is somehow figure out a path that leads to a decent chance of putting about $3-5 million in your pocket in 3-5 years (numbers vary, but this is as good as any). With this kind of money, you could invest it all in long-term investment vehicles and live a reasonable life doing whatever you want. You‘re not going to be buying small islands, but (I‘ve been told) this is highly overrated anyways. VCs, on the other hand want a small chance at making a lot of money (i.e. 10 times whatever they invested). Why the asymmetry? Very simple. VCs have a ?portfolio? of companies (so their risk is diversified). They want 1 or 2 out of ten companies to succeed tremendously – so on average, they are making a great return for their investors. They don‘t care, if any specific company (like yours) dies – as long as the portfolio of companies does really well on average. You, on the other hand, have all of your eggs in one basket. When your life savings is wrapped up in the company (which it will be), then it is in your interests to optimize for the modest exist – anything else would be bordering on stupid. Basically, you and the VCs are looking for different things – and thereby running different companies.
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Goan Riviera – Experience the Essence
Cost Of Capital Is Very High: Putting aside all the ?softer? stuff above, its important to remember that the cost of selling your equity to a VC is actually very expensive. For discussion purposes, assume that you were offered a loan (I understand the difference between debt/equity – I‘m just trying to make a point). Lets say the interest rate is 30%. Most people would think that was very ?expensive? and would think twice about taking the loan unless they really, really had a strong belief that they needed the money and could do something with it to overcome this ?cost of capital? and were desperate because there were no other alternatives. Unfortunately, raising VC money has a similar dynamic, its just not that clear at the time you do it what your cost is. If it helps you understand it better, remember that VCs are expected to return 30%+ to their investors. By definition, these returns (and the VC salaries and bonuses), can only really come from one place – the startup companies. Sure, you may not necessarily incur this cost – but on average, somebody is paying for it. I‘m not a brilliant financial mind, but even I understand this bit. Limited VC Control: Yes, you read that right. I‘m saying that VCs actually have very limited control in what they can do in regards to your company – and that‘s a bad thing. Things VCs control include limiting founder compensation, limiting how much cash can be taken out of the company, how much debt can be incurred, etc. All of these are designed to protect their interests and are reasonably easy to understand. However, when things go badly, there‘s very little they can do to ?fix it?. Of these, the most drastic is pushing the ?CEO eject button?. Basically, VCs can fire the founder/CEO should they choose to. This may be a last desperate attempt to turn things around and try to salvage their investment when things have gone wrong. Now, here‘s the problem: In just about all companies, things will always go wrong. Its just a matter of time. The odds of you actually walking the straight and narrow path to success are near zero. So, the cost to you is that in any given year, you may be fired. Perhaps, you may need to be fired, but maybe you don‘t. Fatal Distraction: This is the most subtle of all the costs outlined so far – but, still supremely important. Once you decide to raise venture capital, your reality is distorted. You no longer think in terms of talking to customers, narrowing your focus, building a product, etc. Instead, you become singularly driven by ?building and pitching the story?. This tends to distort your reality significantly. Instead of working on figuring out the names of your first 10 potential customers, you try to find an analyst prediction that shows that you are pursuing an opportunity that could be $700 million. Or, when looked at just right, even $1 billion!! Instead of feeling satisfaction from hitting an intermediate goal of getting our product out there (even if its crap), you instead feel satisfaction because a VC called you back for a follow-up meeting. Instead of measuring ultimate success by shipping a product and generating revenue, you start thinking of ultimate success as being closing your round of capital. As it turns out, even if you do actually successfully raise VC money – you have created zero value. All you have is the opportunity to create value (and, you had that all along). This distraction is very often fatal and has killed countless startups.
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Goan Riviera – Experience the Essence
Budget Heads
Operating costs Operating costs can be broadly subdivided as: ? ? Fixed costs Variable costs
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Fixed costs include: ? ? ? Administrative and general expenses (a small portion is variable) Property taxes, and Insurance.
Variable costs include: ? ? ? Room expenses Direct expenses for food and beverage (F&B), and Management fees.
The variable component is concurrent to the occupancy and facility usage (use of food and beverage and other leisure facilities) that produced the known level of revenue or expense. There are some items that are classified as semi-fixed expenses, since they include both fixed variable portions. They include: ? ? ? Energy costs Payroll Operation and maintenance expenses.
Employee costs Currently, India has about 25 Institutes of Hotel Management (IHMs) and 150 private institutions. Together, they produce around 10,500 graduates in various courses every year. Apart from the 5-star category, the 3-star and 4-star categories also compete for the same pool of graduates. CRISIL Research expects addition of at least 30,400 rooms by 2010-11 to the current stock of rooms, which will create a need for around 55,000 employees. Fresh graduates moving abroad for employment opportunities and further education, opportunities available in other service industries and increased demand for trained manpower in the 3star and 4-star segment all put together will create a demand-supply mismatch of trained manpower. This situation will pose a problem more importantly for the budget segment, given the preference of graduates for the 5-star segment to the budget segment. Supply of trained manpower for the 5-star segment will not be a major issue when compared with the budget segment. But this increased demand for the available trained manpower has other implications for the 5-star segment. The employee retention will become an issue, due to the number of opportunities available in the burgeoning hotel industry as well as other service-oriented industries such BPOs, aviation, retail and restaurants. CRISIL Research expects increasing salaries to put pressure on operating margins, especially when RevPARs are expected to decline post-2008-09. As salaries are
Goan Riviera – Experience the Essence
sticky in the downward direction and also because of the innumerable opportunities available, laying off of staff or reducing salaries will not be an option available for hoteliers, thus affecting the profitability of properties. F&B costs Food and beverage (F&B) costs constitute costs incurred for the operation of a hotel's food, beverage and banquet facilities. F&B costs also encompass employee costs incurred in F&B operations, cost of F&B supplies, kitchen stewarding expenses (such as cleaning supplies) and service department costs (laundering napkins and tablecloths, printing menu cards, and entertainment expenses). Capital costs A hotel project is capital-intensive, with a gestation period of 2.5-3 years. The project's capital intensity varies according to the category of the hotel, the type of the property (business/leisure) and the location. On an average, the capital cost for setting up a premium segment hotel (excluding the land cost) is Rs 6-7 million, while the cost of a budget hotel (excluding the land cost) is Rs 3-4 million. The cost for building the structure of hotels would be constant across cities. However, the overall capital cost would accordingly increase, depending on the cost of land in a particular city. Civil works, plant and machinery, and interiors (which account for key costs) constitute major capital costs for a new hotel. If the land cost is included, these three costs account for nearly 70 per cent of total costs. Table 1: Hotels: Indicative cost of construction % of cost (excluding land) Civil works 40 Plant and machinery1 20 Interiors 40 1 The major items of plant and machinery include air-conditioning plant, diesel generator sets, elevators, boiler, steam piping, kitchen equipment and laundry equipment. Source: CRISIL Research The gestation period for the construction of a new premium segment hotel is 27-36 months. Table 2: Hotels: Indicative gestation period No. months 6-8 12 8-9 of
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Foundation work Super structure Interiors Source: CRISIL Research
Goan Riviera – Experience the Essence
REVENUE CONTRIBUTIONS
SEGMENT-WISE CONTRIBUTION MARGIN
20
Room contribution Room contribution comprises the largest chunk of revenues in a hotel industry, accounting for 60-65 per cent of the total revenue. Room contribution is highly dependent on average room rates (ARRs) as other costs associated with rooms, such as manpower and energy, are not significant. Thus, a rise in the average room rate (ARR) results in the direct increase in room contribution. F&B contribution F&B contribution depends on F&B revenues and costs. F&B revenue comprises income from room service, restaurant and banqueting activity. Banqueting accounts for a significant portion of the total F&B revenue. The revenue from room service is directly dependent on the room occupancy in the property. It has been observed that budget hotels face intense competition from standalone restaurants as compared with premium segment hotels. Premium segment hotels are in a better position to compete with standalone restaurants, as the type of clientele visiting premium segment hotels prefer to have their dinner at the hotel itself rather than visiting a restaurant outside. Also, premium segment hotels are able to attract a large amount of customers from outside.
The Break Even Analysis of the revenues and expenses has been attached alongwith:
Break-Even.xlsx
Goan Riviera – Experience the Essence 5 The Cruise
The company proposes to buy ?Ocean Odyssey‘ presently with the Indian Ocean Cruises Ltd. for a total consideration of Rs 50 million, in ?as is where is‘ condition. This ship has been chosen as it is in a sea faring condition and only requires some minor structural changes regarding the swimming pool and the casino which are to be created after removing the lounge area and the Jacuzzi.
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Ship Details
The small cruise ship was built in the late 1980s and carries about 120 passengers in 60 passenger guest rooms. The vessel has an overall length of about 302 feet and breadth of about 50 feet, and has six decks. Decks two through six are passenger decks. With a draught of about 14 feet, the vessel travels to ports and areas of the world not navigable to larger vessels. Decks two through six are entry decks.
Figure 2 : Outboard Profile (1) Deck 1 — The first deck is open only to crew members.
Figure 3 : Second Deck (1) Deck 2 — The second deck (main deck) is approximately 302 feet long and 50 feet wide. Eleven Deluxe suites are provided in the forward half of the deck, and a galley and restaurant is provided in the after half. Near the middle of the deluxe suite area, a stair tower connects decks one through six.
Figure 4 : Third Deck (1) Deck 3 — The third deck is approximately 302 feet long and 50 feet wide. In the forward half of the deck, 19 state rooms are provided. Toward the bow, an enclosed stair connects the second deck and an open stair connects the fourth deck. After the Deluxe suite area, an
Goan Riviera – Experience the Essence
elevator lobby with two multi-user toilet rooms (one male and one female) and stair separate the Deluxe suites from the lounge near the stern, this is the lounge that is to be converted into the casino lounge.
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Figure 5 : Fourth Deck (1) Deck 4 — The fourth deck is approximately 234 feet long and 50 feet wide. In the forward half of the deck, 15 state rooms are provided. An exterior walkway (jogging track) encircles the deck. This deck has the club which is after the deluxe suite area. A bar is provided in the club and a curving stair connects the lecture lounge on the third deck. At the stern, two open stairs (one on each side) connect the third deck and another open stair connects the Jacuzzi at the stern area of the fifth deck.
Figure 6 : Fifth Deck (1) Deck 5 — The fifth deck is approximately 218 feet long and 46 feet wide. At the bow, the pilot house is located, followed by officer cabins. Near the middle of the deck, eight deluxe suites with balconies are provided. The stern area contains a buffet and an open deck area, about half covered by an awning. At the aft end of this area, a Jacuzzi (which is being converted to a small swimming pool) and open stair to the fourth deck is provided.
Figure 7 : Sixth Deck (1)
Goan Riviera – Experience the Essence
Deck 6 — The sixth deck is approximately 165 feet long and 45 feet wide. At the bow end, a large stateroom ?King‘s suite? with a forward facing balcony is provided. Behind the ?King‘s suite‘, six Super Deluxe suites with balconies are provided. Adjacent to the elevator lobby, the hair dresser‘s space is located.
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Location
We propose to anchor ?Goan Riviera‘ off the coast of Panaji near the mouth of the Mandovi river. The point of anchoring will be a kilometre from the fort Aguada Light House.
Figure 8 : Location of Goan Riviera The location of the anchorage has been chosen taking into consideration the following points: ? Accessibility – It will be only 4 kms from the Panaji Jetty, and therefore our guests will be only minutes away from the center of Goa and North Goa beaches will be easily accessible by our speed boats. The airport will be only be 45 min drive from the Jetty. ? Scenic pleasure – The anchorage point will be near the mouth of the Mandovi River and therefore the ship will have a panoramic view of the Aguada fort, Panaji Skyline and the Mormugao port. ? Exclusivity – As the place of anchorage is quite far from the shore and also off from the main shipping routes so the guests wont be disturbed by other ships and fishing trawlers. The guests can also enjoy short boating trips from the ship. ? Disturbance to general shipping : As the cruise is to be in a semi-permanent location so it is needed that the ship is not anchored in the middle of the regular shipping and barge routes.
Operating Criteria
The ?Goan Riviera‘ will operate through Mid August to July. It will be docked between Mid June and Mid August for essential maintenance works and as these are the slowest months in terms of tourist traffic due to monsoons which make the seas quite rough.
Goan Riviera – Experience the Essence 24
6 Marketing Strategy
The Goan Riveria?s marketing strategy would be to promote the experience of a luxury casino cruise hotel to draw the target consumer base of domestic and foreign tourists belonging to the higher middle class to upper class income groups. 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 ?complete experience‘ hotel, 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.
Marketing Plan
Direct Marketing A direct marketing package consisting of a brochure, letter of introduction and reply card will be sent to a list of potential guests. The guest list will be compiled by identifying the customers that are frequent residents of five star hotels in Goa (such as the Marriott, Leela and Majorda Beach Resort). The brochure and letter introduces the Goan Rivera describes what sets us apart from the other hotels. The initial mailing may contain a promotional offer: the opportunity to receive a 10% discount on the first night's room rate. Publicity and Public Relations A press conference cum launch party will be held at the Goan Rivera hotel to entertain the media and also the important members of the society. The launch party would be attended by known Bollywood celebrities so as to generate publicity and a sense of exclusivity. A news release will be sent to Goa newspapers and magazines announcing the launch of the hotel and casino and an exclusive interview of the directors would feature in popular life style magazines. Guest Reward Programs Promotional schemes such as ?live seven nights and get the eighth night free‘ will be used to target the initial customers. 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 hotel and casino in general. A comprehensive advertising strategy that includes print, television and billboard advertising will be employed:
Goan Riviera – Experience the Essence
? Print Advertising - Periodic advertising in target market area newspapers will give the Goan Rivera name-recognition benefits. From quarter page ads announcing its special features to business card-sized logo ads Television Advertising – The Company will hire the services of a professional advertising firm to create a series of television ads that emphasize the unique floating hotel experience of the Goan Rivera. Billboard Advertising – Billboards near the airport and in all main cities of Goa will carry advertisements for the Goa Rivera. These will guarantee maximum visibility and facilitate easier recall for the hotel.
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Goan Riviera – Experience the Essence 7 Licenses and Approvals
Obtain the mandatory licenses and permissions from the Government of Goa and Central Government: ? ? ? ? ? ? ? ? ? Registration under Indian Companies Act,1956. Permission from RBI under FEMA for dealing in Foreign exchange License from Director General, Shipping, Ministry of Surface Transport. NOC from the Captain of Ports, Goa Approval from the Pollution Control Board. Excise license from Commissioner of Excise for liquor items Meat Product Order for meat products Fruit Product Order for soft drinks and any fruit based products License from the Directorate of Food and Drugs Administration for food
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Office Requirements
1) Buy Land -- Under Registration Act , 1908: ?Under Section 2(6) of the Registration Act, 1908 the term "immovable property" includes: "land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries or any other benefit to arise out of land, and things attached to the earth, or permanently fastened to any thing which is attached to the earth, but not standing timber, growing crops nor grass." 2) The Office needs to be registered with land registration department 3) For any related construction of office or any related infrastructures: a) Make a plan and elevation of the whole construction and submit it to the local body (i.e., municipality, panchayat , corporation etc). In this case it is Panjim Corporation. b) Once we get the permission letter from the local body , start the construction and when construction finishes , get a completion certificate from the same local body (i.e., municipality, panchayat , corporation etc). In this case it is Panjim Corporation.
Floating Hotel
1) Get a license from the local government (i.e., municipality, panchayat, corporation etc). For municipalities and Municipal Corporations this should be in accordance with Goa Municipalities Act, 1968. In this case it is Panjim Corporation. 2) Do a sales tax registration from sales tax department and get a number and token of sales tax. Now include this number and token in all the bills of the hotel so that the Sales Tax Department can keep a track on transactions.
Bar
1) To sell alcohol, get a bar license from State Excise department.
Casino
For registration of the casino deposit processing fees of Rs 10 lakh with the Government and then get permission for the casino.
Goan Riviera – Experience the Essence
Spa
As massaging is illegal, get a certificate for ayurvedic treatment from medical department usually from DMO. Also for such a treatment, a supervision of a doctor is mandatory. So need to appoint a doctor for supervision in the spa. Also refer THE AYURVEDIC ACT, 1963.
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Electricity
We need to get a commercial connection and approval from state electricity board
Goan Riviera – Experience the Essence
PROCEDURE TO REGISTER A COMPANY
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S. No 1 2 3 Procedure Obtain director identification number (DIN) Obtain digital signature certificate Present name of company for approval to the Registrar of Companies (ROC); Get the memorandum and articles of association vetted by the Registrar and printed Make an application to the Superintendent of Stamps or an authorized bank requesting for stamping of the memorandum and articles of association. Time to complete 1 day 4 days 2-3 days Cost to complete no charge INR 400 to INR 2,650 INR 50
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1 day
INR 200 (for MOA) + INR 1000 (for AOA) for every INR 500,000 or part thereof + INR 100 (stamp paper for declaration Form 1) see comments
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Present the required documents along with the registration fee to the Registrar of Companies to get the certificate of incorporation Visit an authorized franchise or agent appointed by National Securities Depository Services Limited to obtain a permanent account number Obtain a tax account number for income taxes deducted at source from the Assessing Office in the Goa Income Tax Department Register for VAT before the Sales Tax Officer of the ward in which the company is located
5-10 days
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7 days
INR 66 (INR 66 fee & INR 5 for application form if not downloaded) INR 55
7*
7 days, simultaneously with Procedure 7 12 days, simultaneous with previous procedure 2 days, simultaneous with procedure 10
8*
INR 5,000 (Registration Fee) + INR 100 (Stamp Duty) no charge
9*
Register for profession tax
10*
Register with Organization
Employees'
Provident
Fund
2 days, simultaneous with procedure 10 1 day, simultaneous with procedure 10
no charge
11*
Register for medical insurance (ESIC)
no charge
* Is performed simultaneously with another procedure
Goan Riviera – Experience the Essence
EXPLANATIONS PROCEDURES INVOLVED IN THE REGISTRATION OF A 29 COMPANY
? Procedure 1. Obtain director identification number (DIN) Obtain the provisional DIN by filing application Form DIN-1 online. This form is on the Ministry of Corporate Affairs 21st Century (MCA 21) portal (www.mca.gov.in). The provisional DIN is immediately issued. The application form must then be printed and signed and sent for approval to the ministry by courier along with proof of identity and address. The concerned authority verifies all the documents and, upon approval, issues a permanent DIN. The process takes about 4 weeks. Within 30 days of receipt of the approved DIN, directors submit Form DIN-2 to the MCA with the approved number of all companies of which they hold a director position. The above companies submit Form DIN-3 attested by the Company Secretary to the concerned Registrar of Companies (ROC). ? Procedure 2. Obtain digital signature certificate The digital signature certificate can be obtained from six private agencies authorized by MCA 21. To use the new electronic filing system under MCA 21, the applicant must obtain a Class-II Digital Signature Certificate. Company directors submit the prescribed application form along with proof of identity and address. Each agency has its own fee structure, ranging from INR 400 to INR 2650. ? Procedure 3. Present name of company for approval to the Registrar of Companies (ROC); Get the memorandum and articles of association vetted by the Registrar and printed Company name approval must be done electronically. Under e-filing for name approval, the applicant can check the availability of the desired company name on the MCA 21 Web site. The Registrar of Companies electronically informs the applicant whether the name is available within 7 days of the date of application submission. If approved, the memorandum and articles of association and miscellaneous documents must be filed within 6 months of the approval. In practice, if the proposed name is available, the approval is granted within 2 or 3 days. ? Procedure 4. Make an application to the Superintendent of Stamps or an authorized bank requesting for stamping of the memorandum and articles of association The request for stamping the incorporation documents should be accompanied by unsigned copies of the memorandum and articles of association and the payment receipt. The company must ensure that the copies submitted to the Superintendent of Stamps or to the authorized bank for stamping are unsigned and that no promoter or subscriber has written anything on it by hand. The Superintendent returns the copies, one of which is duly stamped, signed, and embossed, showing payment of the requisite
Goan Riviera – Experience the Essence
stamp duty. Once the memorandum and articles of association have been stamped, they must be signed and dated by the company promoters, including the company name and the description of its activities and purpose, father‘s name, address, occupation, and the number of shares subscribed. This information must be in their own handwriting, duly witnessed. ? Procedure 5. Present the required documents along with the registration fee to the Registrar of Companies to get the certificate of incorporation After the stamping of the memorandum and articles of association, three copies must be scanned and uploaded on the MCA 21 portal with the following documents: - The stamped copies of the memorandum and articles of association. - Form 32 (copy), along with the consent letters of the company directors appointed therein. - Form 1, application and declaration for company incorporation (printed on non-judicial stamp paper worth INR 20. Form 18, evidencing the address the company. - Form-1A, evidencing approval of company name. - Copy of challenge, evidencing the fee for these forms. - Power of attorney from the subscribers for third parties to amend registration documentation, filed on non-judicial stamped paper worth INR 100. - Personal identity documentation for the subscribers (a copy of driving license, passport, or voter identity or ration card). These documents must also be filed in original with the Registrar of Companies. The registration fees paid to the Registrar are scaled according to the company‘s authorized capital (as stated in its memorandum): - INR 100,000 or less: INR 4,000. If the nominal share capital is over INR 100,000, additional fees based the amount of nominal capital apply to the base registration fee of INR 4,000: - For every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 1,00,000, up to INR 500,000: INR 300. - For every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 500,000, up to INR 5,000,000: INR 200. - For every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 5,000,000, up to INR 1 10,000,000: INR 100. - For every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 10,000,000: INR 50. The Registrar will scrutinize the documents filed by the company and, if necessary, the authorized person will make and initial the necessary corrections. That person will be provided the certificate of incorporation of the company at the Registrar office. The company can start operations on receiving an incorporation certificate from Registrar. The other procedures (below) can be completed after the business is started. Procedure 6. Visit an authorized franchise or agent appointed by National Securities Depository Services Limited to obtain a permanent account number Under the Income Tax Act, 1961, each person must quote his or her permanent account number (PAN) for tax payment purposes and the tax deduction and collection account number (TAN) for depositing tax deducted at source. The Central Board of Direct Taxes (CBDT) has instructed banks not to accept any form for tax payment without the PAN or TAN, as applicable. Any authorized franchise or agent appointed by The National Securities Depository Services Limited can accept and process a PAN application. If an application is made through a service center, 14 days are
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Goan Riviera – Experience the Essence
required. The PAN application is made on Form 49A, with a certified copy of the certificate of registration, issued by the Registrar of Companies, along with proof of company address and personal identity. A fee of INR 60 (plus applicable taxes) applies for processing the PAN application and for the request for a new PAN card or changes or corrections in PAN data. PAN forms can be obtained from TIN Facilitation Centers (TINFCs) or freely download from www.tin-nsdl.com ? ? Procedure 7. ? ? Obtain a tax account number for income taxes deducted at source from the Assessing Office in the Goa Income Tax Department ? The tax deduction and collection account number (TAN) is a 10-digit alphanumeric number required by all persons responsible for deducting or collecting tax. The provisions of Section 203A of the Income Tax Act require that all persons who deduct or collect tax at the source must apply for a TAN. The section also makes it mandatory for the TAN to be quoted in all taxdeducted-at-source (TDS) and tax-collected-at-source (TCS) returns, all TDS/TCS payment fines, and all TDS/TCS certificates issued. The application for allotment of a TAN must be filed using Form 49B and submitted at any TIN Facilitation Center authorized to receive e-TDS returns. Locations of TIN Facilitation Centers are at www.incometaxindia.gov.in and http://tin.nsdl.com. The processing fee for both applications (a new TAN or a change request) is INR 50 (plus applicable taxes). The national government levies the income tax. Since outsourcing, any authorized franchise or agent appointed by National Securities Depository Services Limited can accept and process the TAN application. ? Procedure 8. ? ? VAT tax registration will be effective from the date of application. In the state of Goa, from April 1, 2005, the sales tax has been replaced by the VAT, which requires registration by filing Form 101. The authorized representative signing the application must be available at the Sales Tax Office on the day of application verification. ? In addition to Form 101, other accompanying documentation includes: ? Certified true copy of the memorandum and articles of association of the company ? Registered office address proof of the company ? Antecedents of directors ? Copy of the office premises agreement as proof of the place of business ? Copy of the income tax order. ? PAN card ? Bank current account number ? Original challan of payment of registration fees ? Two passport-size photographs of the authorized signatory ? Board resolution authorizing the signatory to sign the application form, appear before the Sales Tax Officer, and complete the formalities related to registration Procedure 9. Register for profession tax
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Goan Riviera – Experience the Essence
According to section 5 of the Profession Tax Act, every employer (not being an officer of the government is liable to pay tax and shall obtain a certificate of registration from the prescribed authority. The company is required to apply in Form I to the registering authority. Depending on the nature of the business, the application should be supported with such documents as address proof, details of company registration number under Indian Companies Act (1956), details of head office (if the company is a branch of company registered outside the state), company deed, certificates under any other act, and so forth. ? Procedure 10. Register with Employees' Provident Fund Organization The Provident Commission is part of local labor authority. The applicant fills in an application and is then allotted a social security number. The Provident Fund registration focuses on delinquent reporting, underreporting, or not reporting of workforce size. Provident Fund registration is optional if workforce size is not more than 20. ? Procedure 11. Register for medical insurance (ESIC) Registration is the process by which every employer/factory and every employee employed for wages are identified for the purpose of the medical insurance scheme and their individual records are set up for them. The employer registration form is Form 1A, and employers can submit an application online for registration under the Employees State Insurance Corporation ESI Act of 1948.
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Goan Riviera – Experience the Essence
EMPLOYING WORKERS
Protection of the interests of labor is the responsibility of the State in the democratic countries. Under the Constitution of India, Labor is a subject in the Concurrent List where both the Central and the State Governments are competent to enact legislations subject to certain matters being reserved for the Centre. The Ministry of Labor and Employment has the responsibility of protecting and safeguarding the interests of workers in general and those of the poor, deprived and disadvantaged sections of the society, in particular. It also has the responsibility of creating a healthy work environment for higher production and productivity and to develop and coordinate vocational skill training and employment services. These objectives are sought to be achieved through enactment and implementation of various labor laws, which regulate the terms and conditions of service and employment of workers.
Laws relating to wages:
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A company must formulate its wage and salary policy in an integrated manner by taking into account the overall objectives of setting up the business. This is because a remunerative wage structure helps the organization in obtaining and retaining a healthy, competent and devoted work force, which in turn affects its productivity and profitability. Such a wage policy acts as a dominating force in motivating the employees to contribute their maximum worth to the enterprise. There are three main legislations governing wages: ?
Payment of Wages Act, 1936: The Payment of Wages Act, 1936 is a central legislation which has been enacted to regulate the payment of wages to workers employed in certain specified industries and to ensure a speedy and effective remedy to them against illegal deductions and/or unjustified delay caused in paying wages to them. It applies to the persons employed in a factory, industrial or other establishment or in a railway, whether directly or indirectly, through a sub-contractor. Further, the Act is applicable to employees drawing wages up to Rs. 1600/- a month. Minimum Wages Act, 1948: The Minimum Wages Act, 1948 was enacted to safeguard the interests of workers, mostly in the unorganized sector by providing for the fixation of minimum wages in certain specified employments. It binds the employers to pay their workers the minimum wages fixed under the Act from time to time. Under the Act, both the Central Government and the State Governments are the appropriate Governments to fix, revise, review and enforce the payment of minimum wages to workers in respect of 'scheduled employments' under their respective jurisdictions. There are 45 scheduled employments in the Central sphere and as many as 1530 in State sphere. Payment of Bonus Act, 1965: The Payment of Bonus Act, 1965 was enacted to provide for the payment of bonus to persons employed in certain establishments on the basis of profits or productivity and for the matters connected therewith. The Act applies to:- (i) every factory as defined under the Factories Act, 1948; and (ii) every other establishment in which twenty or more persons are employed on any day during an accounting year. However, the Government may, after giving two months' notification in the Official Gazette, make the Act applicable to any factory or establishment employing less than twenty but not less than ten persons.
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Goan Riviera – Experience the Essence
Articles of association
POWERS OF DIRECTORS The business of the company shall be managed by the directors who may exercise all the powers of the company. The directors may, by power of attorney, appoint any person to be the agent of the company in specific conditions to delegate all or any of his powers. NUMBER OF DIRECTORS The number of directors (other than alternate directors) shall not be subject to any maximum but shall be not less than two. ALTERNATE DIRECTORS Any director (other than an alternate director) may appoint any other director, or any other person approved by resolution of the directors An alternate director shall be entitled to receive notice of all meetings of directors and of all meetings of committees of directors and to vote at any such meetings Any appointment or removal of an alternate director shall be by notice to the company signed by the director or board of directors An alternate director shall be deemed for all purposes to be a director and shall alone be responsible for his own acts and defaults DELEGATION OF DIRECTORS‘ POWERS The directors may delegate any of their powers to any committee consisting of one or more directors. APPOINTMENT AND RETIREMENT OF DIRECTORS The company may by ordinary resolution appoint a person who is willing to act to be a director either to fill a vacancy or as an additional director DISQUALIFICATION AND REMOVAL OF DIRECTORS The office of a director shall be vacated if: He ceases to be a director by virtue of any provisions or he becomes prohibited by law from being a director; or he becomes bankrupt ; or he is suffering from mental disorder and either: he resigns his office by notice to the company; or
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REMUNERATION OF DIRECTORS The directors shall be entitled to remunerations as the company by ordinary resolution determine and,
Goan Riviera – Experience the Essence
the remuneration shall be deemed to accrue from day to day. DIRECTORS‘ EXPENSES The directors may be paid all travelling, hotel, and other expenses properly incurred by them in connection with their discharge of duties. PROCEEDINGS OF DIRECTORS The directors may regulate their proceedings as they think fit. A director may, and the secretary at the request of a director shall, call a meeting of the directors. Questions arising at a meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman shall have a second or casting vote. A director who is also an alternate director shall be entitled in the absence of his appointor to a separate vote on behalf of his appointor in addition to his own vote. A director shall not vote at a meeting of directors or of a committee of directors on any resolution concerning a matter in which he has, directly or indirectly, an interest. A director shall not be counted in the quorum present at a meeting in relation to a resolution on which he is not entitled to vote. SECRETARY The secretary shall be appointed by the directors upon such remuneration they may think fit; and any secretary so appointed may be removed by them. MINUTES The directors shall cause minutes to be made in books kept for the purpose of all proceedings at meetings of the company, including the names of the directors present at each such meeting.
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THE SEAL The seal shall only be used by the authority of the directors or of a committee of directors authorised by the directors. ACCOUNTS No member shall have any right of inspecting any accounting records or other book or document of the company except as authorised by the directors or by ordinary resolution of the company. WINDING UP If the company is wound up, the liquidator may, divide among the members.
Goan Riviera – Experience the Essence
MEMORANDUM OF ASSOCIATION
MEMORANDUM OF ASSOCIATION OF Goan Riviera LIMITED
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I. II. III.
The name of the Company is Goan Riviera LIMITED. The Registered Office of the Company will be situated in the State of Goa. The objects for which the Company is established are the following:
A. MAIN OBJECT TO BE PURSUED ON INCORPORATION OF THE COMPANY
1.Setting up of ‘Goan Riviera’ a concept luxury casino cruise hotel, with 110 "boutique style" rooms specializing in creating an experience getaway to provide relaxation and recreation in Panaji, the capital of the popular tourist state of Goa
B. THE OBJECTS INCIDENTAL OR ANCILLARY TO THE ATTAINMENT OF MAIN OBJECTS
1. To park the cruise anywhere on the shores of the Goa where company finds suitable for entertaining its guests pertaining to the restrictions of the Government. 2. To allow the functioning of casino activities to entertain the guests only on the vessel and strictly not outside the vessel or its premises 3. To allow ayurvedic treatment of the guests on the vessel on the supervision of a doctor mainly for two purposes 1) for healing and providing relief to guests who are suffering from long diseases like back pain , migraine etc 2) for providing rejuvenating treatment to patients 4. To entertain guests with cultural activities in the vessel 5. To arrange for the travel of the guests who are booking their rooms in advance in case they need it. 6. To facilitate exchange facilities of foreign currencies in case guests from foreign countries need it. 7. To enter into agreements with local tour operators for spreading awareness of the company among tourists and for facilitating the transport arrangement of tourists
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