Introductory Document - Colombo Stock Exchange

SITE CHARACTERISTICS, LOCALITY, AREA & CONVENIENCES:Ramboda Falls Hotel is situated about 12 k.m from Nuwara Eliya which is a Municipal Council area. It isan agricultural cum residential area. Besides, the hotel has advantages that are unmatched. This hotelhas a lovely scenic beauty overlooking RambodaFalls, the beautiful hill country of Nuwara Eliyasurroundings to the hillside and the lower elevationtowards the South overlooking “Wedamulla Oya”(Ramboda Oya) and also towards the Western“Dewaturu Oya”.The locality is a beautiful and sought rafter area byany entrepreneur. It is served by 3 phase electricity,well and natural flow water, telephone and localauthority amenities.There is a regular and good bus service operating between Colombo & Nuwara Eliya as well as Kandy& Nuwara Eliya. Thus, this property has a good demand in the open market.BASIS OF VALUATION:The valuation of this property has to be considered on two bases according to valuation principles.1. Income Basis2. Contractor’s Principle.(a) The Income BasisThis method is adopted for income generating assets which are capable of long term running. Themain criteria is the nett profit generated from the concern. The subject hotel is situated en-route toNuwara Eliya which is a renowned holiday resort in the island. Tourists and holiday makers very oftenstop over at Ramboda Falls Hotel to avail themselves of viewing the beautiful Ramboda falls, thescenic beauty of the surrounding countryside and often stay over as food and lodging facilities aregood as well as economic compared to most hotels in Nuwara Eliya.(b) The Contractor’s PrincipleThis method, popularly called the ‘Check method’ is used where the value of land, buildings and otherassets are valued separately and the total value taken to arrive at the asset value. In an incomegenerating asset which could enhance the present income, the Investment Method is the mostappropriate method to be adopted in valuing a concern for the issue of shares. Depreciation is a factorthat has to be taken cognition of, in the Contractor’s Principle.113 Ramboda Falls Limited – Introductory Document