Hotel Project in Kandy Sri Lanka

1. MEEDUMA, KANDY
A boutique hotel with a difference
Investor Presentation
March 2012

2. Table of contents
Investment Rationale 3
Location Overview 4
Hotel Overview 8
Tourism Industry and Economic Overview 13
Financial & Investment Overview 24
The Next Steps 35

3. Investment Rationale
• Opportunity to acquire 37.55% equity stake in Meeduma Hotel Kandy Limited (“Meeduma Kandy”) under
incorporation;
• Benefit from the 2.5 million projected tourist arrivals to Sri Lanka by 2015 and the hotel location
(Kandy), where 80% of all tourist footfall is envisaged. As of end of December 2011, tourism arrivals
projections were exceeded by nearly 15% with the total arrivals at 855,000 plus;
• The hotel will be located in Heerasagala, Kandy – a mountainous area with picturesque, misty views of Kandy
and its surroundings;
• Hotel will feature 21 rooms (16 standard rooms and 5 deluxe rooms), restaurant, swimming pool, laundry
facilities etc.;
• While the hotel will adhere to the highest standards in hospitality, the hotel will be operated in a fully
shariah-compliant manner;
• Construction of the hotel is envisaged to be completed by end of March 2014, with the opening in June 2014,
well before some of the other major hotels projects supply comes in to the market;
• Expected Internal Rate of Return (IRR) in excess of 22%pa with a potential trade sale exit in 5 years.

4. Location Overview

5. Location Analysis
City of Kandy
• Kandy city is also home to ‘The Temple of the Tooth Relic’, one of
the most venerable places for the Buddhist community in Sri
Lanka and around the world. It was declared a world heritage site
by UNESSCO in 1988.
• The hotel is located within close proximity to Kandy town,
Mahaweli River, Peradeniya Botanical gardens and the hotels guest
can venture out to do the following activities:
- Sight seeing on the Kandy town and historical buildings;
- River rafting;
- Kayaking ;
- Mountain Hiking;
- Mountain Biking; and
- Many more…
• The geographical location of Kandy as the center of the hill country
of Sri Lanka, is ideal for visitors to reach out to Nuwara Eliya,
Haputale, some of the other most scenic places in Sri Lanka.

6. Location Analysis
Site Location & Views
Actual View from the Property
(On a Misty Day)

7. Location Analysis
Site Location & Views
Actual View from the Property (Normal vs. Misty day)

8. Hotel Overview

9. Hotel Specifications

10. Exterior Design

11. Interior Design

12. Interior Design

13. Tourism Industry and
Economic Overview

14. Tourism Industry Highlights
• Sri Lanka Tourism has surged to a new high record of 654,476 arrivals in 2010, surpassing the previous
all time high hits due to the post conflict peaceful environment.
• Foreign Exchange (FE) receipts per tourist per day recorded an increase of US $ 6.2, from US $ 81.8 to US $
88.0 in 2010, compared to the previous year .
• Due to the rise of the arrivals, Tourism was able to upgrade it's rank as the fifth largest FE
earner The portion of tourism contribution to total FE earnings in 2010 amounted to 3.8%.
• Western Europe emerged as the main source of tourism to Sri Lanka after the last four consecutive years
accounting 39.2% of the share. Asia was the second amounting it's share as 37.3% 2010. The other
significant contributors to the total are North America 6.1%, Eastern Europe 5.4% and Australasia & Middle
East 5.7% each.
• The average duration of stay increased to 10.0 as compared to 9.1 nights in the previous year.
• The room occupancy rate of the graded establishments increased to 70.1% in 2010 as compared to
48.4% in 2009. An astounding increase of 27.1%.
• The total foreign guest nights recorded in graded accommodation establishments increased at a rate of
46.4% in 2010 to 4,126,544 from 2,818,487 in the previous year .
• Employment generated in the tourism sector (both direct and indirect) increased by 5.7% to 132,055 in
2010.

15. Tourism Industry
What’s Ahead
• Officials said there are about 3000 to 4000 star category rooms at Kandy city apart from the guest houses
and home stay.
• Authorities to promote heritage, indigenous products, culture and environmentally important places in
Kandy to the world

16. Tourism Industry Statistics
Source: Annual Statistics Report 2010 by SLTDA

17. Tourism Industry Statistics
Source: Annual Statistics Report 2010 by SLTDA
Source: Annual Statistics Report 2010 by SLTDA

18. Tourism Industry Statistics
Source: Annual Statistics Report 2010 by SLTDA
Source: Annual Statistics Report 2010 by SLTDA

19. Tourism Industry Statistics
Source: Annual Statistics Report 2010 by SLTDA
Source: Annual Statistics Report 2010 by SLTDA

20. Tourism Industry Statistics
Source: Annual Statistics Report 2010 by SLTDA

21. Tourism Industry Statistics
Source: Annual Statistics Report 2010 by SLTDA
Source: Annual Statistics Report 2010 by SLTDA

22. Tourism Industry Statistics

23. Tourism Industry Statistics

24. Financial and Investment
Overview

25. Ownership Structure
37.55%
Investors
1.45%
Better Space 100% Meeduma Hotels 51% Hospitality
Meeduma Hotel
Holdings (Pvt.) & Resorts (Pvt.) /Industry
Kandy Limited
Limited Limited Consultant
10% Guardian
Investment
House (GIH)

26. Corporate Governance
Board of Directors
Promoter - Mohamed A Chairman
XXXXX (To be appointed) Vice – Chairman
Guardian Investment House (GIH) Director
Promoter - XXXXX (To be appointed) Director
Promoter - XXXXX (To be appointed) Director
XXXXX (To be appointed) Director
XXXXX (To be appointed) Director

27. General Information
• The proposal envisages raising app. LKR 85 million from selected group of investors
for a 37.55% equity stake in Meeduma Hotel Kandy limited “the company”.
• Promoters will contribute up to app LKR 50 million both cash and in kind and take a
51% equity stake in the company.
• Financial Advisors and Issue Manager, M/s. Guardian Investment House (GIH) shall
contribute both cash and in kind to take a 10% equity stake.
• Investors IRR with a potential exit plan at end of 5 years is expected to be in excess
of 22% pa.
• Potential investors with LKR 15 million can avail a Board Seat in the company.

28. Financial Overview
Sources & Uses

29. Financial Overview
Financial Model Assumptions

30. Financial Overview
Pro-Forma Income Statement

31. Financial Overview
Pro-Forma Balance Sheet

32. Financial Overview
Valuation Perspective and IRR

33. Financial Overview
Exit Strategy
As any investment of this nature, exit strategy is key in realizing the investor’s capital plus
gains. We have identified the following two potential scenarios for exiting the investors:
Option 1 – The Promoter, Mr. Mohamed Azmeer may buyout the remaining equity at an
acceptable market valuation. Therefore, Investors need to provide “first-right of refusal” to
Mr. Azmeer, prior to selling the shares to a third-party.
Option 2 – Selling of the Hotel to a third-party in its entirety (trade sale)

34. The Next Steps

35. Current status of the project
• The Promoters have filed necessary paper work with relevant approving authorities
including but not limited to Sri Lanka Tourism Board, Kandy Municipal Council etc.
• Short-listing of potential contractors and other relevant consultant/suppliers;
• Finalizing the equity investors and shareholding agreements

36. Disclaimer
Important Notice
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