MANAGEMENT DISCUSSION AND ANALYSIS
HOTEL INDUSTRYS POTENTIAL & GROWING PAN INDIA
The hotel industry comprises a major part of the tourism industry. Historically viewedas an industry providing luxury services valuable to economy only as a foreign exchangeearner, the industry today contributes massively to direct and indirect employmentgeneration. Gujarat offers a model for economic progress and development for thedeveloping nations, with Luxurious Lifestyle of leisure, pleasure, business and sports.Gujarats six percent of total Industrial Production comes from textile industry. Itis the largest producer (35%) and exporter (60%) of cotton and is the third largest Denimproducer in the world. Hence there is certainly a great potential for footfalls inhospitality.
Gujarat is one of the fastest growing sectors in the States economy is theChemical sector. Well diversified, it has a complete portfolio of chemical products,including petrochemicals and downstream products, dyes and Intermediates. Also Gujarat isthe hub of Pharmaceutical Industry; the most developed and cost competitive Sector withover 3245 manufacturing licenses and 42% of Indias pharmaceutical turnover and 22 %of Indias Exports.
Event based tourism, Adventure tourism and Eco tourism are the theme based tourismattractions with travel circuits, pilgrimage, theme parks, coastal cruises, healthtourism, recreational, urban and rural tourism with culture and tradition.
TGBS OUTLOOK AND OPPORTUNITIES
Today hospitality has evolved from the basic food and accommodation industry and takena very important position in almost all businesses. In fact, it has become a huge industryand drives economies across the globe. The scope of hospitality/ service industry today isfar more than one could have ever imagined a few years back. It includes hotels, motels,restaurants, bars, ships, airlines and railways. In the same breadth, catering can alsoregarded as an industry of its own, even though, it is a part of hotel industry. No wonderTGB has created a niche for itself by setting up a great, ever growing business model incatering.
Hospitality is deep-rooted in our traditions and comes as an integral part of ourheritage. TGB brings over a decade of hospitality knowledge in developing, owning andoperating room business, banqueting facilities, outdoor catering and foods &beverages. TGB also provides leisure / banquet hotels in Ahmedabad, Rajkot, and Surat andnow on the anvil are grand expansion of 5 star hotels in Nagpur, Indore, Vadodara &Udaipur. It has also extended its business in metros like Mumbai & Delhi and endowedwith executing outdoor catering services in foreign shores like Bangkok, Macau etc.
TGB has come up with a new concept of providing "Franchisee" after creatingbrand equity for itself. Furthermore, company is planning to come up with new projects inAhmedabad Mid-Town, "Lake City Udaipur", Nagpur, Indore, Nadiad &Vadodara.
The company has always concentrated on enhancing its quality standards in all variedservices thereby attracting huge loyal customers in India and abroad. In spite of enormouscompetition, your company has coped up considerably with a budding hospitality sector,gaining admiration for expertise services throughout the country and abroad. By cateringto sizeable quantity of clientele, it has expanded significantly and progression iscontinuous.
The hotel industry in India is having a tremendous opportunity in the future because ofincreasing trends in the tourism industry and government promoting the "IncredibleIndia" campaign and other tourism promotion measures. The hotel industry in India ismix of many brand internationally established hotels having the scope to attract shares inthe brand hotels which will help to expand the industry and the innovations in theindustry is helping the hotels to retain the customers with them.
Though "Meetings, Incentives, Conferences and Exhibitions (MICE) tourism has notdeveloped in the state because of the existing prohibition laws. We also lose out ondomestic tourism which should be the mainstay of the tourism industry. At present,Gujarati tourists head to Daman and Silvassa in the south, Diu in the west and Mount Abuin the northern precincts of the state. The hospitality business is by and large onlypatronized by the corporate sector," But we at TGB are upbeat and confident aboutgetting over this ambiguity too by enticing guests from corporate by providing the best ofservices to service this important MICE component and augment our sales, thereby profits.
RISKS AND CONCERNS
A. Dearth of skilled manpower & its solution
The hospitality industry has failed to retain good professionals because unavailabilityof quality workforce in different skill levels. Most of the hotel management graduates optfor other sectors like retail and aviation. Therefore, your company believes in nurturingits employees and encourages them to thrive and exhibit their abilities to the best andplans to create a platform of its own by venturing into in-house training.
QUEST knowledge Centre
Quality. Understanding. Essential. Service. Training.
Quest is an initiative by veterans in Hospitality the TGB, who will assist inidentifying and helping prospective work force to acquire these basic skills and arecommitted to achieve this mission by imparting, research and industry collaboration,thereby providing gainful confidence and then employment.
Its faculty members are recognized experts in hospitality deliverance. We explorecritical trends in hospitality, undertake research regularly, and shape operating andstrategic practices. Through our wide scope, we impart basic skills TO STAND TALL, andthereby create skilled work force for the worlds largest and dynamic industry. It isthe TGBs way of giving back to the Industry through QUEST!!! A Community SocialResponsibility initiative by TGB!!
With Gujarat gaining popularity as a tourist as well as commercial destination, theindustry is poised for a tremendous growth. To reinforce the growth in hospitality and tosupplement its need for dynamic and skilled work force, Quest aspires to provide thetrained manpower and set a benchmark. It has very unique teaching methodology likeRole Playing, Live It Up, Enjoy as U Learn, B/L Method, andAttitude- Aptitude- Action and so on.
Quest looks forward to working collectively with the Industry, the teaching fraternity,the new aspirants who want to join this dynamic industry and of course, the alreadyemployed work force who wish to upgrade their knowledge and skills.
B. Upsurge in Hotel Keys
The number of rooms too has shot up substantially. There are total 64,000 rooms in thestate today as compared to 48,000 in 2010. "This has been the highest increase intourists for any state. Considering the inflow of tourists, total number of hotel rooms inthe state is expected to go up to 1 lakh by 2017,"
The initiative by the Government to bring in investments and tourists to the state hasnot benefited the hotel industry. Hotel occupancy rates have dipped by almost 15 per centthis year as compared to the previous year. According to the Federation of Hotel &Restaurant Associations of India (FHRAI), hotel occupancy rates have fallen to 52 per centas compared to 67.6 per cent in last year.
We at TGB will continue our determined focus in our forte - The Food & Beveragesegment, and target the unmanned segment of MICE.
During the financial year 2012-13, the companys total income is Rs 16676.20 Lacsas compared to Rs 15409.23 Lacs in the previous year. This represents growth of 8.22%.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
An internal control system of your company is very well ordered which consists ofqualified and independent Audit Committee managed by our Board of Directors. It ensuresthe compliance with listing and other legal requirements relating to financial statements.It also ensures that all the assets of the company are fruitful as well as secured againstloss from unauthorized use or disposition. The company keeps on developing its systems andprocedures on continual basis for effective internal control. Adequate internal controlmeasures are in the form of various policies & procedures issued by the Managementcovering all critical and important activities viz. Revenue Management, Hotel Operations,Purchase, Finance, Human Resources, Safety, etc.
INDUSTRIAL RELATIONS AND HUMAN RESOURCE
Hospitality sector emphasizes on good quality of services which requires well behavedemployees and warmly welcoming managerial staff, this increases value and reputation ofthe hotels. Hence, your company believes "The Grass is Greener where you waterit". Therefore company ensures its privileged employees comfortable workplace,security, safety, nourishment, encouragement, freedom to express their innovative ideas,etc.
In essence, the human relations approach sees the organization as a cooperativeenterprise wherein workers morale is a primary contributor to productivity, and soseeks to improve productivity by modifying the work environment.
CORPORATE SOCIAL RESPONSIBILITY
Your company is inherently associated to the society and environment in which itoperates. It upholds the business of TGB with trust, transparency and commitment to humanvalues. It is conscious of its corporate social responsibilities and pursues its socialresponsibilities intensely. During the year, company with the support and mutual aid ofits staff pursued several social activities.
The company took forward a step to save many lives by organizing a blood donation campat TGB- Ahmedabad unit simultaneously at Changodar unit and Surat and plan to give theGIFT A PLANT to all donors partnering with Prathma "Go Green with Blood".
Also, an effort was undertaken by your company to put smiles on the frown faces bymaking a visit at an Old Age home and spending time with them. Collecting money from allemployees, company visited to charity of missionary at Mother Teresa orphanage to helpunderprivileged children. With the donation collected, we bought several eatables andother useful items for kids and distributed the same among them.
Statements in this Management Discussion and Analysis describing the companysobjectives, projections, estimates and expectations may be "forward lookingstatement" within the meaning of applicable securities laws and regulations. Theactual results may differ from those expected depending upon the economic conditions,changes in Government Regulations and amendments in tax laws and other internal andexternal factors.