Eco Resort

Commercially Confidential Information

Eco-Resort Environmentally Responsible and Sustainable Tourism

RRM EcoApril Resort Prospectus 2012

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Commercially Confidential Information

company overview Eco Resort Concept Roberts & Rose Mariculture Corp (RRM), a proprietor-owned and registered Philippines corporation, is poised to launch an eco-resort alongside a major sea cucumber farming and global distribution business. Company facilities are ideally located on 15 square miles in one of the most biodiverse and pristine marine ecosystems in the world. The company’s business and environmental management plans are supported and endorsed as a “for-profit, sustainable and culturally worthwhile venture” by the ECAN (Environmentally Critical Area Network) Board of the Municipality of Busuanga, Province of Palawan. The mission of RRM is to leverage competitive differentiating advantages to become a distinctive outdoor recreation and relaxation resort providing excellence in comfort and service at non-exorbitant prices.

Corporate and Legal Structure Roberts & Rose Mariculture Corp fully conforms to the Philippine foreign investment and ownership laws and regulations of the Republic Act 7042 – also known as the Foreign Investments Act. The company qualifies as a new export business through the Board of Investment (BOI) and Department of Trade and Industry, which enables the following: • •

Tax exemptions for the first six years of operation; and Exemptions from payment of import duty and value added taxes (VAT) on new and secondhand imported goods and equipment for the development of RRM’s fixed assets.

RRM Eco Resort Prospectus

The eco-tourism project proposed by TM Roberts and RA Rose is ideally located in one of the world’s most bio-diverse marine ecosystems within the Calamian Group of Islands in the Philippines. Despite the area’s ecological importance, the company’s eco-resort and aquaculture business and environmental management plan have been highly recommended and endorsed as a profitable, sustainable and culturally worthwhile venture by the ECAN Board (Environmentally Critical Area Network) of the Municipality of Busuanga, Province of Palawan. All facilities and practices will be designed and managed to meet or exceed ISO 14001 standards. The proponents will build a unique eco-resort adjacent to its sea cucumber project at Desambuang with cottages that are a blend of traditional Filipino and European accommodation that provide exhilarating views of surrounding mountainous islands. The resort will be situated on a beachfront hill surrounded by pristine marine coral habitats ideal for outdoor hiking, diving, fishing and sailing. Each cottage will be able to accommodate four people. The resort will also include recreational facilities and functional rooms for guest enjoyment and convenience. Guests will have access to jungle trails, scenic waterfalls at Concepcion, and unique local wildlife within the resort’s property, such as local birds, monkeys and large bayawak lizards. Guests will have the opportunity to visit the ruins of an old Spanish fort on Culion Island and relax in the wellknown hot mineral springs at Coron.

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Commercially Confidential Information Day trips by boat are also available to Calauit Island game reserve where local and African wildlife, such as crocodiles, zebras, Calamian deer, giraffes, impalas and bearcats live in a natural savannah setting. Visitors will be able to dive, fish or sail within the resort’s 25 square-kilometre area of inter- and sub-tidal sea leases, as well as visit south sea pearl and sea cucumber farms. All of these leases have been carefully selected to be adjacent to marine parks and WWII wrecks for diving. The resort is just over an hour’s travel from Manila, making it both accessible and retreated from the busy capital. The Calamian Islands have several historical landmarks and small fishing villages,

Thomas M Roberts

RRM Eco Resort Prospectus

which are ideal for summer vacation or off-season relaxation for both professional individuals and families. Special educational programs will be available for children, students and adults to collect, identify and look after live marine animals, as well as enrol in photographic, sailing and SCUBA diving courses. The following prospectus includes a descriptive overview of the resort, background experience of the management team, description of cottages, details of the resort staff required, and financial information relating to annual revenue, capital and operating costs for the first two years. For ease of presentation all costs are shown in USD with the exchange rate at Philippine Pesos 42.00 = 1 USD.

Robert A Rose

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Commercially Confidential Information

Mission Statement: Ethical and Sustainable Eco-Tourism in the Philippines

Guiding Principles: •

• • •

To create a sound and sustainable hospitality business based on ethical governance that ensures customer satisfaction with visiting a healthy coastal rural marine environment known for its biodiversity and underwater WWII wreck diving and pearling industries. To construct a resort using best-practice, ecologically sustainable practices that help protect the biodiversity of the local environment, including historical underwater landmarks. To build a rewarding vacation environment in Busuanga, Philippines that respects both Filipino and non-Filipino cultural values. To grow the business through the consolidation of local, traditional knowledge and life styles and contemporary understanding of global markets.

Disclaim er The information in this document is intended to express the opinions of the proponents only. Financially interested individuals or investment groups should understand that the information contained relates to an eco-resort venture at the developmental phase and involvement should be considered speculative. No responsibility will be taken by the proponents of this document for the financial decisions or actions made by others on the basis of the information contained within.

RRM Eco Resort Prospectus

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Commercially Confidential Information

Executive Summary Overview Roberts & Rose Mariculture Corp is a proprietorowned Philippine company created on the basis of the strategic and commercial symbiosis of colocating an eco-resort with an aquaculture and aquatic research facility in the bio diverse coastal waters off Busuanga Island in the Calamian Group northeast of Palawan, Philippines (Figure 1).

the sea cucumber base camp. The resort and farm will share electrical, water, road and communication infrastructure. The environmental plan for the eco-resort will meet or exceed international ISO 14001 standards to ensure best practice management. Initially, the resort will consist of 20 tropical

Fig ure 1 . Desambuang Eco-Resort located of the on the eastern side of Busuanga. The ECAN Board (Environmentally Critical Area Network) of the municipality of Busuanga, Palawan Province, has recently endorsed the construction of an eco-resort complex, a hatcherybase camp and pier at Desambuang. Also, included is the approval to utilize 240-hectares of sub-tidal sea leases adjacent to the property as personal access to the marine environment. This endorsement is based on the company’s ethical mission and technical ability to operate the ecoresort and sea farm without damaging the environment while meeting or exceeding all local and international regulations and standards.

cottages built to international standards. All cottages will be free standing and built on a hillside facing the sea with views of pristine intertidal waters and coastal islands. Current plans include construction of 12 additional cottages (4 cottages every two years, in years 3, 5 and 7). Guests will have access to the company’s boating, diving and accommodation facilities. Various holiday activities designed for children, students and adults will be provided. They will also have access to a vegetable/herb garden, sporting activities (e.g., horse riding, hiking, camping, fishing) and a “hobby” or “student” research

The company is planning to set-up an exclusive eco-tourism resort on company land, adjacent to RRM Eco Resort Prospectus

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Commercially Confidential Information facility with aquaria, microscopes, cameras, reference books and computers. Divers can partake in underwater sea life monitoring surveys on the sea leases and marine parks with resort staff. A survey of resorts located near Desambuang indicates that over-booking is a chronic problem for diving resorts. This chronic over-booking demonstrates that there is space in the local resort market and we expect to enjoy high to full occupancy rates during both high and low season. Presently there are 3 hectares of terrain available for a cottage style resort that includes hills and valleys with seaside views and access to spring water. After demonstrated success with the initial 20 cottages, there will be plenty of space and market demand to support an expansion of ___ additional cottages.

Management team The eco-resort will have two directors in combination with the sea cucumber farm: Tom Roberts, an expatriate American living/working in the Philippines, and Robert Rose, an Australian/American working in Australia and SE Asia. Roberts is pearl farmer with resort business experience. Rose is an aqua culturist with experience in large-scale aquaculture projects and in building and establishing self-sufficient, remote area living and working base camps for farming. All company office bearers are Filipino with experience in international law and business management and accountancy. The majority of the company’s ‘foreign and national’ shares are owned and controlled by the two directors. Ivelle Legaspi, Resort Manager, has worked over 11 years in the hotel and communication industries, since 1998, she has worked at a number of prestigious national and international hotels in the Philippines and Dubai, Arab Emirates. Ivelle has worked as a front desk and senior front desk officer, senior customer care specialist and administration manager at the following respective hotels and communication companies: Days Inn Hotel

RRM Eco Resort Prospectus

International; Angelo King International Center; Digital Telecommunication and FK Manpower & Training Center. Further, she worked as a Manila sales and front desk manager at the Batangas Country Club / Techno Park Hotel, a senior guest service officer at the Sheraton Dubai Creek Hotel & Towers, a Manila sales manager at the Paseo Premier Hotel and a corporate sales manager for Pontefino Residences. Thomas M Roberts, Operations Director, was the founder and general manager of one of the first dive resorts on Busuanga Island 26 years ago, as well as Pier House Resort, which is still in business today. TM Roberts has served as Director for Portade Corp., and where he trained management personnel in management and sales for Batangas Country Club, Techno Park Hotel and Premier Hotel. During this period, he also consulted with Portade’s parent company, Richaland Properties, to develop a retirement village targeting foreign customers outside of Manila. TM Roberts has relatives living in the Philippines and over 25 years of work experience. Educated in the USA, he has worked as an archeologist diver, business manager/proprietor of several companies involved in retail and primary industry, and managed his family’s pearl farming business operations in the region where the company’s aquaculture venture is to occur. Robert A Rose, Technical Director, is a long-standing business colleague of TM Roberts. He will be responsible for oversight of development and on-going operations. RA Rose is a professional aqua culturist with a PhD in marine biology and has developed and consulted aquaculture and construction project in several areas of the world, including Australia, New Zealand, Tahiti, Malaysia, Indonesia, Thailand, Tonga and the Philippines. He has over 20 years commercial experience in tropical, largescale sea farming and marketing, and has worked in the Philippines with TM Roberts in the pearling industry.

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Commercially Confidential Information

Financial Projections

Construction of Buildings and Facilities Cottages will be designed to have a small carbon foot print and positioned to ensure there is maximum natural ventilation and views. Construction will exceed standards necessary to withstand inclement weather conditions. Current layout plans position resort cottages on a hillside and along side the of the planned sea cucumber farm. There is a natural vegetative zone between the eco-resort and sea cucumber farm facilities ranging from 100 to 150 meters in width to ensure there is no noise pollution. Each unit will have ceiling fans and air conditioners, television, DVD, mini bar, refrigerator and tea/coffee service. All units will have a full bathroom with washbasin, toilet and shower. At the reception, restaurant/bar and corporate function room there will be wireless Internet available. All accommodation will include transfer services between Desambuang Eco-Resort and Busuanga Airport. Power will be primarily from the municipality electrical grid system and we will have a back-up resort generator to ensure consistent power service. Addtionally, we are conducting feasibility analysis to determine the potential for onsite renewable energy generation, such as solar or wind. Cottages will be approximately 30 square meters with a concrete foundation, concrete walls, wood trimming and tiled roof and floor. French doors and louvered windows with screens will be used for front and back entrances to create cross ventilation. Each cottage will have a lanai with a small patio and landscaping to provide privacy, attract birds and enhance the tropical appearance of each unit. The estimated cost to build a 30-square-meter, high-strength unit is US$25,000 per unit. This price includes furnishing.

Annual Revenue from Accommodation The pricing structure developed during the first year of operation will generate revenues within the first year of just over $1,220,000 (Budget; Table 1) while at the same time remaining competitive enough to attract guests and promote the resort as a unique holiday destination providing value for money. Eventually, the eco-resort will develop a reputation as a place of relaxation uniqueness and outdoor recreation at nonexorbitant prices. High season for tourism in Busuanga is from October to June. Low season is during July, August and September. We estimate that the resort will function an average of 350 days per year, with a high season of 260 days and a low season of 90 days. Annual accommodation revenues are estimated at $1,401,200. Income generated from accommodation during high season is estimated at $1,092,000: 100% occupancy in 20 cottages at $210 per night. Income generated during low season is estimated at $259,200: 80% occupancy in 20 cottages at $180 per night. Additional revenues from meetings and conventions are estimated at $50,000 annually RRM Eco Resort Prospectus

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Commercially Confidential Information

Annual Revenue From Non-Accommodation Sources Sources of income beyond accommodation include diving, boating, fishing, food and drinks, banca tours, gift shop sales, and other miscellaneous services. Non-accommodation income forecasts are derived from a company survey on other resort rates in the Calamian Group during the high and low seasons. Diving & Recreation: Diving activities range from: underwater photography, night diving, wreck diving, deep sea / nitrox diving, globally recognized SCUBA diving courses (both SDI and PADI), and renting and retailing of equipment. Dive rates are not dependent on season. Other miscellaneous recreation activities include “banca” boat tours, kayaking, sailing and Jet Ski rentals. Food & Beverage: Food during the high season is expected to provide revenues of $3,500 per day and $2,000 per day during the low season. Guest Services & Gift Shop: This includes a combination of retail from the gift shop and other miscellaneous revenue sources. Income generated annually is estimated to be at $30,000. Table 1. S um m ary o f Estim ated R evenue Years 1 & 2

Income

Year 1

Year 2

Accommodation / Meetings & Conventions

$1,401,200

$1,471,260

Diving & Recreation

$1,017,000

$1,067,850

Food & Beverage

$1,090,000

$1,144,500

$30,000

$31,500

$3,538,200

$3,715,110

Guest Services & Gift Shop Total

Most resorts in Busuanga are focused specifically on underwater diving, generating their income mainly from wreck diving. Desambuang Eco-Resort will offer diving, but in addition it will couple the dives with simple and enjoyable photographic and visual environmental monitoring programs, which will be satisfying, educational and interesting. The resort is approximately five minutes from one of the best shipwrecks in Busuanga and 15 minutes by boat from Sangat Bay to another large group of wrecks resulting from the battle of Sangat in September 1944 (see Figure 1). Guests at the resort that enjoy fishing will also be accommodated, as well as other land based activities, such as, hiking and navigational training, painting, horse back riding, bike tours and endurance courses.

Capital Expenses To establish the resort’s infrastructure a number of construction activities are required and can be divided into three sections: site development; infrastructure up to complete refurbishment; and plant and equipment. The cost of capital goods are listed in Table 1 and summarized below. Infrastructure costs will include cottages, restaurant, staff quarters, reception, laundry, workshop, generator shed, storage sheds, pier, retail shops, dive/boat shed, spa/pool and landscaping. The infrastructure costs also include most of the contents of the buildings. Prices shown are derived from similar remote area projects in SE Asia and from quotes. Plant and equipment relate to: boats; diesel power generators; ski-jets; vehicles; dive gear; tools; office equipment; and cabinets/desks.

RRM Eco Resort Prospectus

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Commercially Confidential Information Table 2. C aptial C osts Infrastructure Engineering survey (job cost and travel)

$24,000

Power lines/transformer/underground cables

$100,000

Road/water (supply, storage and reticulation)

$90,000

Power generation shed

$25,000

Workshop

$35,000

Restaurant/Bar

$200,000

Staff Quarters/Ablution

$90,000

Reception/Corporate Function Room

$193,000

Diving/Boat storage shed

$30,000

Concrete pier

$87,000

Cottages (20 units)

$500,000

Manager/ bungalows (2 units)

$40,000

Retail shop and Pool bar

$25,000

Landscape/lighting

$50,000

Spa/pool (connected)

$80,000

Infrastructure (furnished) Total

$1,569,000

Plant & Equipment Generator

$100,000

Vehicles

$80,000

Tools

$10,000

Dive boats (2), Yamaha Wave Runners (3)

$200,000

Banca (traditional native outrigger motor boat)

$15,000

Dive gear and equipment

$170,000

Outdoor furniture/Office cabinets/desks

$13,000

Indoor Furniture & Fixtures

$50,000

Lounge Bar Furniture & Fixtures

$50,000

Start-up Supplies

$25,000

Office Equipment (computers, software, phones)

$12,000

Plant & Equipment Total

$725,000

Other Capital Costs Project and Site Manager Services

$100,000

Construction Labor

$75,000

Start-up Marketing Costs

$25,000

Communications & Advertising

$28,000

Work Visas & Travel Expense

$39,000

Uniforms, Linens, Sanitation

$16,000

Other Capital Costs Total Total Capital Costs

RRM Eco Resort Prospectus

$325,450 $2,619,450

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Commercially Confidential Information

Resort Operational Costs The following cost calculations relate to resort staff and other overhead expenses. Table 3. O perating Expenses Administration

$65,000

Housekeeping

$39,100

Food Service

$50,600

Buildings & Grounds

$77,900

Recreational

$79,500

Employee Benefits

$62,420

Employee Training

$5,000

Employee Room & Board

$20,000

Other Employee Costs

$1,500

Temporary Labor

$5,000

Meeting & Convention Supplies

$5,000

Transportation & Freight Costs

$10,000

General Consumables

$25,000

Equipment Repair and Maintenance

$20,000

Building Repair & Maintenance

$20,000

Grounds Keeping Expense

$15,000

Housekeeping Expense

$15,000

Small Equipment & Supplies

$5,000

Cleaning Supplies

$10,000

Utilities & Fuel

$71,000

Taxes & Licenses

$20,000

Insurance

$50,000

Office Expenses

$10,000

Telecommunications

$18,000

Marketing Expenses

$20,000

Information Technology

$10,000

Professional Services

$30,000

Contractors

$100,000

Travel & Entertainment

$25,000

Miscellaneous Expences/Contingency

$47,900

Total

RRM Eco Resort Prospectus

$932,920

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Commercially Confidential Information Table 3. B udget fo r D esam buang Eco -R esort Income / Revenues Investment Funds Operating Revenues Total Receipts

Year 1

Year 2

Year 3

$3,000,000

0

0

0

$3,538,200

$3,715,110

$3,000,000

$3,538,200

$4,469,040

Capital Costs Site Development Infrastructure

$214,000 $1,355,000

$15,000

$150,000

Plant & Equipment

$725,000

$8,000

$58.000

Other Capital Costs

$325,450

$2,000

$5,000

$2,619,450

$25,000

$213,000

Wages and Employment

$406,020

$414,140

Overhead

$526,900

$537,438

0

$932,920

$951,578

$2,619,450

$957,920,

$1,164,578

0

$380,550

$2,960,830

Net Cash: Inflows less Outflows

$460,000

$2,580,280

$3,304462

Closing Bank Balance

$380,550

$2,960,830

$6,265,292

Total Capital Costs Operational Expenses

Total Operational Expenses Total Cash Outflows Opening Bank Balance

Profit This business plan shows that the project is profitable with sufficient revenue to pay back the initial capital investment of $3,000,000 by the end of the fourth year of operation. The proponents of this eco-resort are currently developing a construction work schedule.

Project’s Sustainability Having exclusive access to large sea lease areas that are protected for aquaculture will ensure that the project has a renewable, pristine recreational environment representative of the famous natural marine biodiversity known to occur in the Palawan Province. The project’s proposed best practice custodial land management style will provide the resort every opportunity to be an economically, environmentally and culturally sustainable business. Tourism within the Calamian Group of islands in northeast Palawan Provence is anticipated to continue to grow, attracting both foreign and local tourists.

RRM Eco Resort Prospectus

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Commercially Confidential Information

Contact information

Operations Director

Technical Director

Thomas M Roberts

Robert A Rose

Concepcion

8 Kelat Court, Bayview 0820

Busuanga Island

Northern Territory, Australia

Palawan, Philippines

Mob: 6140 208 2494

Mob: 0920 981 5500

Email: [email protected]

Email: [email protected] Resort Manager

Email: [email protected]

Ivelle B Legaspi

Registered Office

Concepcion

Roberts & Rose Mariculture Corp

Busuanga Island

12th Floor Net One Center, 26th St. corner 3rd Ave.

Palawan, Philippines

Crescent Park West, Bonifacio Global City

Mob: 0917 418 4619

Taguig City, Metro Manila, Philippines 1634

A complete Business and Operations Plan, with detailed 6-year financial projections are available to prospective investors by contacting the directors above.

RRM Eco Resort Prospectus

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