Rating Rationale Brickwork Ratings assigns ‘BWR BB-’ for the Bank Loan facilities aggregating ₹ 12.50 Cr of Chennai Leisure Private Ltd. Brickwork Ratings has assigned the following Rating1 for Bank Credit facilities of Chennai Leisure Private Ltd. (CLPL). Limit Facility Tenure Rating (₹ Cr) BWR BB- Fund Based (BWR Double B minus) 12.50 Long Term Term Loan (Outlook-Stable) Total 12.50 INR Twelve Crores & Fifty Lakhs only The rating factors, inter alia, the experience of the promoters and established credentials of the promoters in the entertainment industry, established market for VGP Universal Kingdom, increasing trend in spending pattern of customers for amusement parks and high growth potential of amusement/theme park However, the rating is constrained by project implementation risks given the nascent stage of the project, risk of not able to achieve the projected revenues and profitability and competition from other theme parks in Chennai. Background: Chennai Leisure Private Limited (CLPL) is a private limited company having its registered office in Hyderabad – Andhra Pradesh, promoted in April 2013 to establish an Indoor Snow Theme Park in Chennai, Tamil Nadu. CLPL has entered into a License Agreement with VGP Housing Private Limited (VGPHPL) on the basis of revenue share model (85%: 15%) for 10-years for establishing and operating an indoor snow theme park independently in the name and style of VGP Snow City. CLPL has been allotted about an acre of land situated in the already very popular destination, VGP Universal Kingdom situated on East Coast Road, Injambakkam, Chennai, Tamil Nadu. Management Profile: The company is private limited company and has 4 appointed directors Mr. Puvvadi Chandrasekhar, Mr. Puvvadi Guruprasad, Mr. Rangineni Venkat Rao and Mr. Rangineni Anup Chakravarthy. 1 Please refer to www.brickworkratings.com for definition of the Ratings www.brickworkratings.com 1 16 May 2014 Project Economics: The total cost of the project is Rs18.75 Cr funded by promoters’ contribution of Rs.6.25 Cr and term loan from Bank e of Rs12.50 Cr. The project envisages setting up a Snow Theme park within the VGP Universal Kingdom, Chennai. Construction work is in progress and around 25% work is completed. Orders have been placed for part of the machinery The expected COD of the project is by Jan, 2015.The revenues expected for the first full year of operations are at Rs14.05 Cr for FY16. The project is for a term of 10 years on BOT basis. The average DSCR of the project is 2.32 and the project IRR is at 16.63%. Rating Outlook: The rating reflects the promoters experience in the amusement park sector, location being within VGP Theme Park which is already attracting large footfalls and earning revenues and the growth prospects in the sector. CLPL’s ability to execute the project without any time & cost overrun, establish its presence and achieve projected turnover and profitability will be the key rating sensitivities. Analyst Contact Relationship Contact [email protected] [email protected] Phone Media Contact 1-860-425-2742 [email protected] Disclaimer: Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources, which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it does not examine the precision or completeness of the information obtained. And hence, the information in this report is presented “as is” without any express or implied warranty of any kind. BWR does not make any representation in respect to the truth or accuracy of any such information. The rating assigned by BWR should be treated as an opinion rather than a recommendation to buy, sell or hold the rated instrument and BWR shall not be liable for any losses incurred by users from any use of this report or its contents. BWR has the right to change, suspend or withdraw the ratings at any time for any reasons. www.brickworkratings.com 2 16 May 2014 .