HOTEL CONCEPTION AG

EURO 1, Blegistrasse 1, CH-6343 Rotkreuz

Executive Summary

Project Name:

Kempinski Bellevue Trochetia

Hotel & Golf Resort

Mauritius

Telefon +41 (0)41 790 20 22 - Telefax +41 (0)41 790 57 55

E-Mail: info@hotelconception.com / homepage: www.hotelconception.com
HOTEL CONCEPTION AG

Preamble:

The intention of this document is to in-

form about the basics in a brief form in
addition to the attached documentation
and to outline the necessary steps to
be taken in the near future to secure
the project and its prosperous possibilities.

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HOTEL CONCEPTION AG

SHORT OUTLINE OF THE PROJECT’S HISTORY

1997 • First negotiation with the site owner.
• Extensive preparation work on the site, surveys, architec-
tural project studies and a detailed Environmental – Impact
Assessment were carried out.
• Official offer received for the purchase of 150 hectares -
the potential building site.

1998 • Official offer received from the government to lease addi-

tional 152 hectares of land
• Permit to export dividends tax free was granted.
• Foundation of the Project company Bellevue Trochetia Ho-
tel (Mauritius) Ltd.
• General approval from the government to purchase the
site and to erect the full project without Mauritian partners.
Exceptional and unique permit as in general the law indi-
cates the participation of Mauritian investment of 51%.
• The corporate tax payments were reduced from 35% to
15% for a period of 10 years to start with. Extension nego-
tiable.
• Import duty-free license for all goods, transport materials,
construction and operational materials granted.
• Modification of the zoning plan (EIA-License) was granted.
The farm- and protection-site became a building site.
• Environmental-Protection-License received.

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HOTEL CONCEPTION AG

• Final development – approval granted.

• TVA (VAT)–License received, which enables to recuper-
ate all VAT accruing during the construction and pre-
opening period from the VAT tax payable of the later hotel
operation. Cash value approx. US $ 6-7 million.

1999 • Signing of the Operation & Management Agreement with

Kempinski Hotel & Resorts S.A., Geneva.
• Verbal approval of the government to explore part of the
“Ile aux Benitiers” in front of the site as a private bathing
and water sport center.
• At the end of the year the validity of all permits and li-
censes are confirmed by the government.

Since December 1999 we are in extensive negotiations with both - the present sole
shareholder of the Project Company and the owner of the potential building site. We
were able to build up excellent relationship to both, the project company and the site
owner, the major part of the old and new government, to high rank officials, to all im-
portant official institutions, essential for the project, as well as to very influential fami-
lies on the island. We do enjoy the full support of the government and the local politi-
cians as we not only create an important number of jobs during the construction
phase but also about 750 constant jobs, which will secure the well-being of some
2.500 – 3.000 people of the nearby villages and the rest of the island. This represents
an important and unique assurance for the smooth and efficient realization of the pro-
ject during the construction - as well as the operational period.

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HOTEL CONCEPTION AG

The projections for the start up financing (annex 1), the construction phase annex 2
page 7) and the operational period (annex 3) have been compiled and controlled by
several independent institutions and are judged as realistic - in the operational results
even conservative.

The project itself needs to be revised and optimized as the investigations of our ex-
pert team have in fact shown some week points as well the chance to optimize the
whole logistics for the later operation. One even more important factor will be the
possibilities to reduce construction costs and therefore raise the ROI and in return
also the profits when selling the complete property at a later stage. In order not to lose
any time we have gathered a team of experts and have negotiated the necessary
agreements.
A preliminary financial forecast for the start-up has been elaborated including the firm
offer of the former project company as well as the fees for our past and future in-
volvement in the project. The cash flow has been added to show the volume of funds
necessary in the nearby future.
Following our negotiations and the findings of our latest surveys we have listed below
the steps to be taken in not to distant future:

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HOTEL CONCEPTION AG

FACT SHEET

Kempinski Resort & Hotel

Bellevue Trochetia
MAURITIUS

Location Le Morne Brabant, South West on the Island of Mauritius, Indian

Ocean
Site purchase 1.500.000 M2 for US $ 11,5 million

Site leasehold 1.500.000 M2 at US $ 30,000 p. a.

Description Resort & Hotel § 2 Royal suites, approx. 250 M2 each

§ 18 VIP suites, approx. 200 M2 each
§ 84 Senior suites, approx. 150 M2 each
§ 20 Family suites, approx. 150 M2 each
§ 120 Junior suites, approx. 90 M2 each

244 suites in total

§ 5 restaurants
§ 4 bars
§ beauty center with wellbeing center
§ public full size casino
§ tennis courts
§ horse riding stables
§ 5 pools
§ all water sport and beach activities
§ 18 hole PGA Championship Golf Course + 9 hole Junior
Golf Course

Total Investment US $ 110.000.000

Permits & Licences § Unique/Special Investment permit

§ VAT permit already in power (represents tax-benefit of
approx. US $ 8 million)
§ Reduced corporate tax from 35 % to 15 %
§ General construction permits
§ Tax free import of all construction material, FF & E and
other goods such as transport material etc.
§ Environmental-Impact-Assessment
§ Dividends tax free

Construction timeframe 18 month

Average ROI p.a average 10,7 % for the first 5 years*

*Before Amortisation, Depreciation interests on loans, taxes and insurances

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HOTEL CONCEPTION AG

FACT SHEET

Kempinski Resort & Hotel

Bellevue Trochetia
MAURITIUS

Profit and Loss first 5 years

based on the worst case study
(average occupancy in 5-star hotels on Mauritius 83 %, average room rate US $ 495)

Year 1 2 3 4 5

Total Available Units 244 244 244 244 244

Average Occupancy 55% 61% 65% 69% 72%

Average Rate per Room (in USD) 340.00 359.00 373.00 388.00 405.00

Total Revenue (in 1000 USD) 27'505 31'529 34'733 37'999 41'025

Gross Return on Total Investment 8'948 10'518 11'924 13'180 14'197

Net ROI 8.1% 9.6% 10.8% 12.0% 12.9%

*Before Amortization, Depreciation interests on loans, taxes and insurances

Construction phase

Specification of the Investment- & construction costs (all figures are in thousends of US$)

FIX ASSETS 4.Q 00 1.Q 01 2.Q 01 3.Q.01 4.Q 01 Total 01 1.Q 02 2.Q 02 3.Q.02 4.Q 02 Total 02 Total
1 Property 14'900 2'100 2'000 2'000 2'000 8'100 2'000 2'000 2'000 800 6'800 14'900
2 Property-Development / Preparatory work 3'970 2'000 1'000 970 3'970 0 0 3'970
3 Constructions hotel & comercial area 62'000 350 400 8'000 8'000 8'000 24'750 10'000 10'000 8'000 9'250 37'250 62'000
4 Golf-course 10'600 2'500 2'500 2'000 2'000 2'000 2'100 8'100 10'600
5 Other costs 3'800 100 200 300 500 1'100 500 500 800 900 2'700 3'800
6 Preopeningcosts 3'900 500 500 500 800 1'000 1'100 3'400 3'900
7 Development/Consultancy/Controlling 3'300 100 1'000 1'000 2'100 1'200 1'200 3'300
8 Safety reserve/unexpected costs 1'700 1'000 1'000 700 700 1'700
9 Costs for financing (constructionperiod) 3'300 50 100 200 400 750 500 700 700 650 2'550 3'300
10 Rounding 2'530 0 2'530 2'530 2'530

Total Investment 110'000 2'550 1'550 12'300 11'500 16'870 44'770 15'500 16'000 14'500 19'230 65'230 110'000

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HOTEL CONCEPTION AG

Supporting Document to the start-up Budget

Kempinski Bellevue Trochetia Hotel & Resort, Mauritius

All in US $
PAYROLL

• Salaries& Wages Security 200,00

Secretary 700,00

OTHER EXPENSES

• Personal Cost Approx. 29% of total S & W

• Uniforms
• Contract Cleaning
• Postage & Telegram
• Telephone, e-mails
• Printing + Stationary
• Travel Expenses local
• Travel expenses international
Watchmen site
for office and housing
Assumption also for UPS + DHL etc.
Assumption for data transfers and communications
Company's start up stationary, presentations to offi-
cial bodies, investors.
Traveling in Europe of involved persons for meetings
etc. incl. hotels, f & b and misc. 5 - 7 persons x 7 trips
x DM 1.000,00
Trips to Mauritius and South Africa of persons in-
volved incl. hotel, f & b and misc.

Month 1 5-7 people/trips to Mauritius + S.A. x approx. 5.500,00

Month 2 2 people/trips to Mauritius x approx. 2.500,00
Month 3 4 people/trips to Mauritius x approx. 2.500,00
Month 4 2 people/trips to Mauritius x approx. 2.500,00
Month 5 4 people/trips to Mauritius x approx. 2.500,00

• Entertainment Internal Entertainment during meetings in Europe with in-

volved people, investors and politicians from Mauri-
tius.
• • Entertainment External Entertainment in Mauritius and S.A. for involved peo-
ple, politicians and VIP's, press conference etc.
• • Laundry internal cost of laundry for traveling people
• • Dry Cleaning cost of dry cleaning for traveling people
• Transportation Taxi, car rental, petrol Mauritius
• Decoration Flowers etc. for offices
• Print Shop printing of plans, promotional material
• Miscellaneous general reserves for office equipment and on the
above accounts.
HOTEL CONCEPTION AG
• VIP Service
• Housing
• Rentals
• Local Transport
• Leasing Office
• Leasing car
INVESTMENT PROJECT
• Architect
• Interior Architect
• Technical Advisors
• Technicians
• Owners Representatives
• Lawyers
• Legal Advisors
• Tax Advisors
• Construction Start Up
• Down payment former pro
• ject company
•
• Down payment Site Purchase
• Down payment for Project
• Consulting & Organization
• Others
Helicopter flights, presents, gifts etc.
housing in Mauritius and Europe
Office in Mauritius
Taxi, car rental, petrol Europe
Office rental in Europe incl. misc. cost
cars in Europe and Mauritius.
following the attached contract with T. Krause
Bohne & Partner considering that the total financing
will be in place at the end of month 5.
following the attached contract with Holstein Schulhof
& Partner considering that the total financing will be in
place at the end of month 5.
not yet closed agreements with special ad visors for
themes not covered by the hired specialists based on
the fee principals of the other specialists.
following the attached contract with Holstein Schul-
hof & Partner considering that the total financing will
be in place at the end of month 5.
misc. costs for the site owner, developer and in-
vestors.
cost of forming the company in Mauritius and misc.
consultations.
consultants for various licenses and permits still to be
negotiated as well as the site purchase down pay-
ment.
bookkeeping and misc. consultations in Mauritius.
soil movement Golf course, geological expertise hotel
site and cosmetic/political activities on site.
down payment on the agreed US $ 3,3 million.
down payment on the yet to be agreed final price for
the site
down payment on 3% fee of the project cost
Reserves for special programs, charity, donations
etc.
 Kempinski Bellevue Trochetia Hotel & Golf Resort, Mauritius
Case 3 taking into consideration the revenue "Extra rooms in the Senior and Family-Suites" IN US $ 000`s
Year 1 Year 2 Year 3 Year 4 Year 5

Days
Total Days of Operation 365 365 365 365 365
Rooms
Total Available (Keys) 244 244 244 244 244
Occupancy 68% 73% 77% 79% 82%
Total Occupied / Year 60'561 65'014 68'576 70'357 73'029
Average Rate in US$ 420 450 475 495 505
Double Occupancy 85% 85% 85% 85% 85%
Total Available Extra rooms 124 124 124 124 124
Occupancy 50% 55% 60% 64% 66%
Total Occupied / Year Extra rooms 22'630 24'893 27'156 28'966 29'872
Average Rate per extra room in US$ 100 105 110 155.5 155.5
Double Occupancy Extra rooms 40% 40% 40% 40% 40%
RevPAR 311 358 399 442 466
Total Overnights 143'719 155'126 164'884 170'714 176'924
F&B
Average Check US$ 90 95 105 112 121

Rooms
Revenue 27'625'536 100% 31'446'210 100% 35'201'695 100% 37'545'913 100% 39'779'746 100%
Payroll 1'243'149 4.5% 1'352'187 4.3% 1'513'673 4.3% 1'614'474 4.3% 1'710'529 4.3%
Other Expense 4'005'703 14.5% 4'402'469 14.0% 4'928'237 14.0% 5'256'428 14.0% 5'569'164 14.0%
Department Profit 22'376'684 81.0% 25'691'554 81.7% 28'759'785 81.7% 30'675'011 81.7% 32'500'052 81.7%
F&B
Revenue 12'934'753 100% 14'736'944 100% 17'312'859 100% 19'119'985 100% 21'407'835 100%
Cost of Sales 4'527'164 35.0% 5'157'931 35.0% 5'886'372 34.0% 6'500'795 34.0% 7'064'586 33.0%
Payroll 1'746'192 13.5% 1'915'803 13.0% 2'250'672 13.0% 2'485'598 13.0% 2'783'019 13.0%
Other Expense 1'616'844 12.5% 1'856'855 12.6% 2'164'107 12.5% 2'332'638 12.2% 2'611'756 12.2%
Department Profit 5'044'554 39.0% 5'806'356 39.4% 7'011'708 40.5% 7'800'954 40.8% 8'948'475 41.8%
M.O.D.
Revenue 7'500'750 100% 7'900'000 100% 8'150'000 100% 8'250'000 100% 8'500'000 100%
Cost of Sales 1'275'128 17.0% 1'501'000 19.0% 1'548'500 19.0% 1'567'500 19.0% 1'615'000 19.0%
Payroll 622'562 8.3% 711'000 9.0% 733'500 9.0% 742'500 9.0% 765'000 9.0%
Other Expense 982'598 13.1% 1'066'500 13.5% 1'100'250 13.5% 1'113'750 13.5% 1'147'500 13.5%
Department Profit 4'620'462 61.6% 4'621'500 58.5% 4'767'750 58.5% 4'826'250 58.5% 4'972'500 58.5%
Total Revenue 48'061'039 100% 54'083'154 100% 60'664'554 100% 64'915'898 100% 69'687'581 100%
Gross Operating Income 32'041'700 66.7% 36'119'410 66.8% 40'539'243 66.8% 43'302'215 66.7% 46'421'028 66.6%
Administration & General 3'844'883 8.0% 4'326'652 8.0% 4'549'842 7.5% 4'933'608 7.6% 5'226'569 7.5%
Marketing 2'883'662 6.0% 3'082'740 5.7% 3'154'557 5.2% 2'986'131 4.6% 3'135'941 4.5%
Repairs & Maintenance 2'883'662 6.0% 3'244'989 6.0% 3'336'550 5.5% 3'570'374 5.5% 3'832'817 5.5%
Energy Costs 2'643'357 5.5% 3'515'405 6.5% 3'943'196 6.5% 4'219'533 6.5% 4'599'380 6.6%
Gross Operating Profit I 19'786'135 41.2% 21'949'623 40.6% 25'555'098 42.1% 27'592'567 42.5% 29'626'321 42.5%
Reserve for FF&E 1'682'136 3.5% 2'163'326 4.0% 3'033'228 5.0% 3'440'543 5.3% 3'484'379 5.0%
… - - - - -
Gross Operating Profit II 18'103'999 37.7% 19'786'297 36.6% 22'521'870 37.1% 24'152'025 37.2% 26'141'941 37.5%

Incentive Fee (% GOP) 15% 15% 15% 15% 15%

Incentive Fee 2'715'600 5.7% 2'967'945 5.5% 3'378'281 5.6% 3'622'804 5.6% 3'921'291 5.6%
Owner's Return 15'388'399 32.0% 16'818'352 31.1% 19'143'590 31.6% 20'529'221 31.6% 22'220'650 31.9%
 Kempinski Bellevue Trochetia Hotel & Golf Resort, Mauritius
Case 3 taking into consideration the revenue "Extra rooms in the Senior and Family-Suites" IN US $ 000`s
Year 1 Year 2 Year 3 Year 4 Year 5
Owner's Return 15'388'000 16'818'000 19'144'000 20'529'000 22'221'000
Depreciation in % of owners return 10% 1'539'000 1'682'000 1'914'000 2'053'000 2'222'000
Insurance in % of owners return 3% 46'000 50'000 57'000 62'000 67'000
Subtotal 13'803'000 15'086'000 17'173'000 18'414'000 19'932'000
Coorperated taxes of subtotal 15% 2'070'000 2'263'000 2'576'000 2'762'000 2'990'000
Net Owner's Return 11'733'000 12'823'000 14'597'000 15'652'000 16'942'000
+ Depreciation 1'539'000 1'682'000 1'914'000 2'053'000 2'222'000
Net Cashflow 13'272'000 14'505'000 16'511'000 17'705'000 19'164'000

NET PRESENT VALUE OF EXPECTED NET CASH INFLOWS FROM THE HOTEL OPERATION

Investment of USD 110'000'000

end of Cash Inflows Impact

year Cash Outflow Net Cash Inflow IFp at ICC NET Present Value on NPV
8%
1 31.12.01 -45'000'000 { no interests the first 2 } 1.00000 -45'000'000 -45'000'000
2 31.12.02 -65'000'000 { years } 1.00000 -65'000'000 -110'000'000
3 31.12.03 13'272'000 0.92593 12'288'889 -97'711'111
4 31.12.04 14'505'000 0.85734 12'435'700 -85'275'412
5 31.12.05 16'511'000 0.79383 13'106'964 -72'168'447
6 31.12.06 17'705'000 0.73503 13'013'704 -59'154'744
7 31.12.07 19'164'000 0.68058 13'042'696 -46'112'047
8 31.12.08 19'164'000 0.63017 12'076'571 -34'035'477
9 31.12.09 19'164'000 0.58349 11'182'010 -22'853'467
10 31.12.10 19'164'000 0.54027 10'353'713 -12'499'754
11 31.12.11 19'164'000 0.50025 9'586'771 -2'912'983
12 31.12.12 19'164'000 0.46319 8'876'640 5'963'657
13 31.12.13 19'164'000 0.42888 8'219'111 14'182'768
14 31.12.14 19'164'000 0.39711 7'610'288 21'793'057
15 31.12.15 19'164'000 0.36770 7'046'563 28'839'620
16 31.12.16 19'164'000 0.34046 6'524'595 35'364'215
17 31.12.17 19'164'000 0.31524 6'041'292 41'405'507
18 31.12.18 19'164'000 0.29189 5'593'789 46'999'296
19 31.12.19 19'164'000 0.27027 5'179'434 52'178'730
20 31.12.20 19'164'000 0.25025 4'795'772 56'974'502