EIH ASSOCIATED HOTELS LIMITED: EXEMPLIFYING LUXURY AND EXCELLENCE
EIH Associated Hotels Limited, founded in 1983, is renowned for its luxury hotels and
heart felt hospitality. The Company currently operates 8 exceptional hotels in India. The
company is distinguished by its dedication to environmental sustainability and the
preservation of cultural heritage, which contributes to its success in the industry.
ECONOMIC OVERVIEW
Global economy
Despite geopolitical tensions, the year 2022 commenced with a mixed outlook. While
there were concerns of potential flat growth, the global economy faced unforeseen
challenges such as supply chain disruptions, monetary tightening, inflation and
recessionary fears.
China experienced a temporary decline in growth during the fourth quarter of 2022 due
to a surge in COVID-19 cases following the relaxation of restrictions. Additionally, the
global inflation rate reached 8.7% in 2022, largely driven by supply chain disruptions
caused by the ongoing pandemic and the Russia-Ukraine conflict.
The effects of the Russia-Ukraine conflict also had spillover effects on Europe, with
the region grappling with acute energy shortages. This, coupled with the implementation of
Brexit, impacted various aspects of Europe, including immigration, trade, and tourism. The
UK economy experienced a slowing growth rate as a direct consequence of these factors.
The global economic landscape in 2022 was marked by a combination of both optimistic
and challenging factors, requiring careful analysis and evaluation.
According to the International Monetary Fund (IMF), the global economy experienced a
GDP growth rate of 3.4% in 2022, which was lower compared to the previous years growth
rate of 6.1%. Despite this moderation, there were notable developments in the tourism
sector, with international tourist arrivals rebounding to reach 63% of pre-pandemic
levels. Particularly, the Middle East and
Europe exhibited robust recovery in this aspect, reflecting positive trends in the
tourism industry.
Outlook
The International Monetary Fund (IMF) has projected a growth rate of 2.8% for the year
2023. The inflation outlook appears promising, with an anticipated decrease from 8.4% in
2022 to 7.0% in 2023. While the inter-country trade is a significant driver of global
economic growth, certain geopolitical factors, such as trade tensions between the United
States and China, as well as the ongoing Russia-
Ukraine conflict, may contribute to a slower expansion in inter-country trade. However,
despite these challenges, there are still opportunities for economic progress and
cooperation among nations. By working collectively, these obstacles can be addressed,
leading to sustained growth in the global economy.[1]
Indian economy
The Indian economy exhibited resilience and stability amidst the global economic
downturn, experiencing minimal disruptions. Notably, India emerged as the fastest-growing
major economy worldwide, propelled by robust growth in the infrastructure sector and
sustained private consumption driven by pent-up demand.
According to projections by the National Statistical Office
(NSO), Indias GDP for FY23 expanded by 7.0%, showcasing commendable growth despite a
slight decline from the previous fiscal years growth of 8.7% in the aftermath of the
COVID-19 pandemic. The successful implementation of various projects valued at US$ 1.3
trillion under the National Infrastructure Pipeline (NIP) and substantial government
spending in other areas contributed to positive momentum in the economy.
However, it is important to acknowledge that global factors, rising input costs, and
disparities in the distribution of disposable income have resulted in uneven growth across
sectors. Additionally, inflationary concerns prompted the Reserve Bank of India (RBI) to
raise the repo rate by 250 basis points since May 2022, indicating proactive measures to
address inflation. As a consequence, the cost of capital and interest rates have
increased, leading to some moderation in consumer sentiment. Nonetheless, the overall
trajectory of the economy remained positive, reflecting economy.
The formalisation of Indias economy has yielded transformative outcomes, promoting
transparency and generating favorable conditions for businesses. Indias potential as a
manufacturing hub has gained significant attention as nations and corporations seek
diversify their manufacturing bases and shift production away from China. Capitalising on
this opportunity, the Indian government has implemented initiatives such as
‘Aatmanirbhar Bharat and ‘Make in India to fortify the manufacturing sector.
Moreover, the establishment of the Infrastructure Finance Secretariat has fostered a
conducive ecosystem for private investment in infrastructure, positioning the private
sector as a vital and proactive contributor to the countrys development trajectory.
Significant strides is seen in various sectors, including creation of an agricultural
startup ecosystem, ensuring sustained growth in the medium to long term. The 2023-24
budget increases the capital investment outlay for infrastructure by 33% to US$ 122
billion, highlighting the governments commitment to bolstering infrastructure growth.
This support is expected to transform goods movement and exports, enabling efficient and
cost effective freight delivery. India is poised to become a formidable force in consumer
spending, projected to reach US$ 6 trillion by 2030, positioning it as the worlds
third-largest consumer spender, after the United States and China.[2]
Sectors such as travel and hospitality have experienced a significant rebound,
benefiting from the resurgence in demand following the easing of pandemic-related
restrictions. Several factors have contributed to this positive trend, including the
gradual resumption of business and leisure travel, higher disposable incomes among
affluent individuals, increased government focus on enhancing transport and tourism
infrastructure, and a diverse range of offerings in the hospitality sector
As a result of this upturn in demand, new supply announcements have been made, and
deferred projects have been initiated during the reviewed period. However, it is important
to note that the growth rate of the hotel supply pipeline is projected to remain modest,
at around 3.5-4%. Consequently, the supply of hotel rooms is expected to continue lagging
behind demand.
The ongoing economic recovery is expected to have a favorable impact on employment
levels, leading to a rise in disposable income and subsequently driving domestic
expenditure. Consequently, projections indicate that consumer spending will witness a
year-on-year growth of 7.1% in 2023. theresilience and adaptability of the Indian
Furthermore, the full resumption of international flights at their maximum capacity in
March 2022 has instilled confidence in a strong recovery in both outbound and inbound
tourism. The Airports Authority of India (AAI) has unveiled ambitious strategies for the
expansion and modernisation of the aviation sector, allocating a targeted capital outlay
of US$ 11.8 billion over the next five years.
These initiatives are poised to foster additional growth and advancement in the years
ahead.[3]
Outlook
According to the projections by the Reserve Bank of India (RBI), Indias GDP is
expected to grow by 6.5% in FY24, indicating a favorable outlook for the countrys
economic performance. Despite challenges posed by global trade trends and inflation,
Indias strong emphasis on infrastructure development and robust private consumption is
anticipated to contribute to a consistent growth trajectory, highlighting its resilience
against external factors. The prioritisation of enhancing public digital infrastructure
will create abundant prospects for individuals and businesses, bolstering economic
strength and fostering sustainable growth.
Industry review
Resilience and Growth: The Promising Trajectory of the Travel and Hospitality Industry
The World Travel & Tourism Council (WTTC) reported a substantial growth of 22% in
the travel and hospitality industry, reaching an impressive value of US$ 7.7 trillion in
2022. This notable achievement signifies yet another exceptional year for the industry
although it is yet to reach pre Covid19 levels.
The travel and tourism sector continues to thrive with the ongoing advancements in
transportation infrastructure, facilitating easier and more affordable travel experiences
for consumers. This, coupled with increasing affluence worldwide, has resulted in higher
disposable incomes allocated to travel and tourism. As a result, the World Travel &
Tourism Council (WTTC) estimates the sector to achieve a value of US$ 9.5 trillion by the
end of 2023 and a remarkable US$ 15.5 trillion by 2033, making a substantial contribution
of 11.6% to the global economy.
While the United States has witnessed a robust domestic traveller market, the slower
return of international traveller spending has posed challenges for the overall economic
recovery of many city destinations. Nevertheless, major city destinations are gradually
regaining employment in the travel and tourism sector, recovering from the job losses
experienced in 2020. The sector has demonstrated resilience and determination in
overcoming significant hurdles, positioning itself for a strong resurgence in 2023. The
future holds promising prospects for the travel and tourism industry to once again shine
brightly and make significant contributions to global economic growth.[4]
In 2022, the Asia-Pacific region experienced a remarkable rebound in international
arrivals, reaching a total of 10.4 million visitors in December 2022. The reopening of
borders in major tourist destinations such as mainland
China, Japan, and Hong Kong has contributed to the positive outlook for the
Asia-Pacific hotel industry.
Notably, markets like Australia, Korea, India, and
Southeast Asia, which resumed travel earlier in 2022, have already surpassed the hotel
performance metrics observed in 2019. As international travel across the region gradually
normalises, modest growth is anticipated for the Asia-Pacific hotel market in 2023, with a
return to pre-pandemic levels expected by early 2024.
This optimistic outlook reflects the ongoing recovery and increasing confidence in the
travel and tourism sector.
The encouraging trajectory in hotel performance signals a hopeful future for the
Asia-Pacific region, offering opportunities for sustained growth and a revival of travel
and hospitality to pre-pandemic levels.[5]
Resurgence of the Indian Hospitality and Tourism Sector
Indias hospitality and tourism sector experienced a notable resurgence in 2022,
marking its strongest performance since the pandemic began. Known for its rich cultural
heritage, India remained a popular destination for global travellers, leading to a
thriving tourism and hospitality industry. The demand for accommodations saw a significant
increase, driven by domestic leisure travel, weddings, social events, conferences, and
business trips.
The Indian governments permission for 100% Foreign Direct Investment (FDI) in the
hotel and tourism industry attracted substantial investments, reflecting its significance
in the economy. From April 2000 to
September 2022, the hospitality sector accounted for 2.6% of total investments in
India, highlighting its contribution. The sectors growth has been fuelled by rising
investor interest and active participation from domestic companies, driving expansion and
investment activities.
Furthermore, international recognition and acceptance of Indian hotel chains have
enhanced their reputation and visibility, enabling them to meet if not exceed global
expectations with elevated service standards. This has further strengthened the sectors
performance, positioning Indian hotel chains as dependable choices for discerning
travellers worldwide.
Overall, the rejuvenation of Indias hospitality and tourism sector demonstrates its
resilience and adaptability. With a positive outlook and ongoing investments, the industry
is poised for sustained growth and continued success in the future.
Despite encountering initial challenges at the beginning of the year due to the
emergence of the third wave of
COVID-19, the hospitality sector experienced a significant recovery starting from the
second quarter of 2022, demonstrating a consistent upward growth trend.
Growth in RevPar
| Year |
Growth (%) |
| 2022 vs 2020 |
134% |
| 2022 vs 2021 |
94% |
| (Source: CBRE) |
|
| Growth in ADR |
|
| Year |
Growth (%) |
| 2022 vs 2020 |
42% |
| 2022 vs 2021 |
43% |
(Source: CBRE)
Growth in occupancy rate
| Year |
Growth (%) |
| 2022 vs 2020 |
83% |
| 2022 vs 2021 |
40% |
Market positioning in India by properties in 2022:
Bright Horizons: Indias Tourism Sector Poised for Growth
The Ministry of Tourism has been allocated a budget of
US$ 2.1 billion in the 2023-24 fiscal year, with a substantial portion dedicated to
enhancing the tourism industry and infrastructure in India. The countrys tourism sector
is expected to witness steady growth in 2023, fueled by increasing domestic demand and a
resurgence in international travel. Investor interest in the Indian hospitality space is
also on the rise, with projected investments exceeding US$ 2.3 billion over the next five
years, further bolstering the positive outlook of the industry.
Prior to the pandemic, Indian leisure travelers ranked second across 31 countries,
highlighting a significant opportunity for the hospitality industry to strategically
enhance its offerings to attract and retain leisure travelers.
The rapid growth of homestays and villa rentals in India has also contributed to the
industrys positive trajectory. Overall, the hospitality sector is expected to maintain a
consistent growth trajectory in the coming years, with domestic demand playing a pivotal
role in driving this expansion. [6]
Industry trends[8]
Renewed focus on domestic tourism
The pandemic prompted a shift among domestic travelers, who began exploring local
destinations and uncovering new tourist spots. Recognising this trend, the Government of
India has implemented infrastructure initiatives, such as the introduction of the Vande
Bharat Express. With the planned introduction of 475 semi-high-speed trains by 2027, the
government aims to foster domestic tourism and facilitate the exploration of Indias
diverse and captivating destinations. These measures contribute to sustaining the positive
momentum and promoting the countrys tourism sector.[9]
Growing popularity of ‘bleisure travel
The business travel market in India is projected to experience a significant growth
rate of 8.1% over the period of 2022 to 2027, reaching a market value of US$ 55.2 billion.
The introduction of flexible work arrangements and remote work options has led to the
emergence of trends like ‘bleisure travel or ‘workcations.
Changing face of religious tourism
Traditionally, India has seen a significant inflow of tourists visiting religious
sites, surpassing conventional tourist destinations. In 2022, the number of domestic
tourists visiting pilgrimage sites exceeded 1.4 billion. However, there has been a
noticeable shift in the preferences of these tourists, who now prioritise clean, hygienic,
and family-friendly accommodations. Acknowledging this evolving demand, hotel chains are
actively embracing these changing aspirations and capitalising on the opportunities within
this segment.
A preferred destination for medical tourism
Indias standing as a leading medical tourism destination continues to flourish,
projected to yield a revenue of US$ 13 billion in this sector by 2026. The countrys
advanced medical facilities, well-regarded healthcare experts, and cost-effectiveness of
treatments attract patients globally.
FINANCIAL AND OPERATING PERFORMANCE
The outstanding performance of the Company is a testimony to our unwavering commitment
to quality, our premium positioning, and our meticulous attention to detail, principles
which are consistently prioritised in all aspects of our business, ensuring an exceptional
experience for our valued guests. The reopening of global economies has provided a
significant boost to our business, allowing us to capitalise on the increased demand for
travel and hospitality services. Notably, domestic travelers have played a crucial role in
driving growth across all our business segments, underscoring their importance in our
continued success.
The Company recorded a revenue of Rs 3,441.37 Million in 2022-23, an increase of 74.01%
year-on-year from Rs 1,977.73 Million in 2021-22. EBITDA was at Rs 1017.78, Million, up
192.01% year-on-year from Rs 348.54 Million. The Company incurred a profit before tax ofRs
848.49 Million compared to a profit before tax ofRs 183.90 Million in the previous year.
Overall, the net profit for the year was Rs 646.17 Million compared to the net profitof Rs
128.82 Million in the previous year.
Key Financial Ratios for Standalone Financials
Key financial ratios are given below:
| S no. Particulars |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
Remarks |
| 1. Debtor turnover ratio (in times) |
26.64 |
23.03 |
|
| 2. Debt – Equity ratio (in times) |
0.01 |
0.01 |
|
| 3. Debt service coverage ratio (in times) |
47.61 |
41.03 |
|
| 4. Interest Service Coverage Ratio (in times) |
210.39 |
90.32 |
The increase is mainly due to increase in earnings available for debt service in the
current year as compared to the previous year on account of improved business conditions. |
| 5. Current ratio (in times) |
3.00 |
2.43 |
|
| 6. Net capital turnover ratio (in times) |
2.53 |
2.92 |
|
| 7. Trade receivables turnover ratio (in days) |
14 |
16 |
|
| 8. Inventory turnover ratio |
6.69 |
5.02 |
The increase is due to an increase in consumption of provisions, wines and others in
the current year as compared to the previous year on account of improved business
conditions. |
| 9. Operating profit margin (in %) |
28.10% |
16.53% |
The increase is mainly due to increase in operating profit in the current year as to
the previous year on account of improved business conditions. |
| 10. Net profit margin (in %) |
18.78% |
6.51% |
The increase is mainly due to increase in net profit after taxes in the current year
as to the previous year on account of improved business conditions. |
| 11. Return on capital employed (in %) |
19.54% |
5.15% |
The increase is mainly due to higher earnings before interest and taxes in the current
year as compared to the previous year on account of improved business conditions. |
| 12. Return on equity (in %) |
17.73% |
3.96% |
The increase is mainly due to an increase in net profit after taxes in the current
year as to the previous year on account of improved business conditions and improved
revenue from operations during the current year. |
To ensure the well-being and security of guests and employees, the Company and its
hotels have implemented comprehensive measures in accordance with the guidelines provided
by the World Health Organisation (WHO). Further details about these measures can be found
on the official websites of Oberoi Hotels & and Trident Hotels.
RISK MANAGEMENT
The Company has established a dedicated Risk Management Committee (RMC) consisting of
Board members and senior management personnel. The RMC plays a crucial role in
periodically evaluating risks, ensuring the effective execution of business strategies,
and reviewing key leading indicators. It collaborates with management to define the
Companys risk appetite and strategy concerning key risks, as well as establish
guidelines, policies, and processes for monitoring and mitigating these risks.
The RMCs key responsibilities include:
1. Approving the Companys risk management framework and conducting periodic reviews
thereof.
2. Regularly reviewing risk management practices and processes to maintain a prudent
balance between risk and reward in all business activities, including ongoing and new
ventures.
3. Assessing significant risk exposures and evaluating managements actions to mitigate
them in a timely manner.
4. Reporting its evaluations, actions, and recommendations to the Board for their
awareness and consideration.
The Companys risk management framework encompasses guidelines, policies, and processes
for assessing and managing risks. The RMC has identified twelve key risks that could
potentially impact the business. These include risks of business slowdown, low or negative
returns, deterioration of financial health, business interruption, environmental impact,
reputation risk, safety, health, and security risk, cyber risk, inadequate compliance,
fraud risk, inadequate growth, and talent retention risk.
Mr. Samidh Das, Chief Financial Officer, has been appointed as the Chief Risk Officer.
This committee diligently monitors the identified risks and regularly reports its findings
to the Board, ensuring a proactive and comprehensive approach to risk management within
the Company.
EXPANSION PLANS FOR UPCOMING YEARS
Visakhapatnam Project
The Land Lease Agreement with favorable terms has been signed with the Andhra Pradesh
Tourism Development Corporation (Wholly owned Corporation of Government of Andhra Pradesh)
for setting up of Trident Hotel.
AWARDS
Oberoi Hotels & Resorts ranked the Worlds Best Hotel Brand by Travel +
Leisure,USA, Worlds Best Awards, 2022.
Oberoi Hotels & Resorts ranked the Worlds Best Hotel Brand for Service Excellence
by Travel + Leisure, India & South Asia, Indias Best Awards, 2022.
**Oberoi Hotels & Resorts has been voted the Best Hotel Group for the three
consecutive year by Telegraph Travel Awards, UK 2019, 2018 and 2017.
**Due to the pandemic, The Telegraph Travel Awards did not take place in 2020,2021 and
2022.
| HOTEL |
AWARD |
AWARDED BY |
| The Oberoi Rajvilas, Jaipur |
Top 25 Luxury Hotels in India (Ranked 1st) Editors Choice for Best Leisure
Resort ( Domestic) |
TripAdvisor Travelers Choice Awards, 2022 Travel + Leisure, India & South Asia,
Indias Best Awards, 2022. |
| The Oberoi Cecil, Shimla |
Top 25 Luxury Hotels in India (Ranked 1st) |
TripAdvisor Travelers Choice Awards, 2021 |
HUMAN RESOURCE DEVELOPMENT AT THE OBEROI GROUP
At The Oberoi Group, we regard our guests and colleagues as paramount, underpinning our
operations with our foundational culture and values. These principles are set forth in The
Oberoi Dharma, inspiring us to act ethically and rightly. We are committed to providing
the best working environment for our employees through regular reviews and realignments of
our Human Resource practices and policies.
The following key initiatives have been undertaken to develop our human resources:
1) Talent Acquisition and Retention: We recognise that hiring the right talent
significantly influences the success of our business. We have introduced initiatives to
maintain our talent pipeline, such as partnering with skill institutes to train
non-hospitality talent and employing them in our hotels. Additionally, weve implemented
several initiatives aimed at employee retention and motivation. For instance, weve
conducted multiple Executive Development Programmes and Supervisory Development
Programmes, and have provided career growth opportunities in addition to extra manpower to
hotels as needed.
2) Employee Engagement: We believe that engaged employees make happy guests. We
achieved an employee engagement score of 83% in Financial Year 2022-23, matching the Best
Employers India Score. We aim to improve our engagement score through action plans based
on employee feedback.
3) Gender Diversity: We value the distinct skills, perspectives, and innovative
ideas women bring to our organisation. We support ladies with flexi timings, extended
maternity leave, workplace facilities for mothers with young children, and opportunities
for changing roles to suite personal and professional asperations. Currently, ladies
comprise 14.6% of our workforce, and we aim to increase this percentage to 17% in the next
year.
4) Performance Management: We operate as a performance-driven organisation with
clearly defined appraisal formats to meet strategic objectives. Our Performance Management
System includes evaluation based on Balanced Score Cards and a competency framework,
making the appraisal process more objective.
5) Compensation Benchmarking: We strive to provide compensation above the 75th
percentile across all levels when compared to the market. This helps us make data driven
decisions and ensures fair and competitive compensation.
6) Employee Welfare: We prioritise the safety and health of our employees. All
our staff have received two doses of the Covid-19 vaccine. Our commitment is to provide a
secure and healthy environment for our guests and employees alike.
Learning & Development
The Oberoi Centre of Learning and Development (OCLD) consistently offers expansive
learning opportunities to every employee. Its primary function is to facilitate the
professional growth of employees by aligning their development with the Companys
expansion.
OCLD has been instrumental in executing The Oberoi Groups philosophy, which emphasises
continuous learning and skill enhancement. It sets the industry standard for training and
people development practices in the hospitality sector.
OCLD conducts the following core training programs:
1. Post Graduate Management Programmes in Guest Services, Housekeeping, Kitchen, and
Sales.
2. Systematic Training and Education Programme (STEP) in Hotel and Kitchen Operations.
3. Learning and Development (L&D) Programmes, designed to refine functional and
behavioural competencies of employees at all levels.
The Post Graduate Management Programmes, established since 1966, prepare talented
individuals for managerial roles. The curriculum is a fusion of classroom-led instruction
at OCLD and practical experience in hotels.
The relevance of the curriculum is ensured through period benchmarking with leading
global hospitality programs. Cross exposure training for faculty, guest lectures, and
continuous feedback from hotels and associates. These programmes have helped maintain a
steady talent pipeline of the finest hospitality professionals for the
Company. As a critical element of the Oberoi legacy, these programs cultivate the
potential of the talented associates for Operational Manager roles across the Company.
Blending Instructor Led Training with experiential learning at hotels, the curriculum
encourages students to learn actively. Techniques like peer mentoring, problem-based
learning, master class sessions from external and internal experts and simulations are
integrated into the pedagogy. The current batch strength for the years 2021-2023,
2022-2024 and 2023-2025 comprises a total of 34, 71 and 112 associates respectively.
The Systematic Training and Education Programme (STEP), launched in 2004,
transforms high school graduates into proficient hotel professionals. The three-year
programme offers trainees hands-on training and comprehensive lesson plans at a host
hotels of The Oberoi Group, resulting in them gaining practical exposure to the
hospitality industry. Its comprehensive curriculum, structure, and rigorous training at 14
host hotels had made it highly regarded in the hospitality industry. Many STEP graduates
are subsequently selected for one of the Post Graduate Management Training Programmes at
OCLD. 49 STEP graduates were enrolled in the Post Graduate Management Training Programmes
of 2021-2023 and 2022-2024.
The Learning and Development (L&D) Programmes aim to provide job-specific
knowledge and skills and behavioural competencies. In the fiscal year 2022-23, L&D
focussed on essential competencies such as leadership development, effective
communication, process improvements, and others. High potential employees were identified
and were provided with Individual Development Plans, preparing them for future leadership
roles.
| Number of training programmes completed in |
17,831 |
| FY23 |
|
| Average training hours per employee |
12.21 |
A new e-learning platform, Adobe Learning Manager, was introduced to ensure easy access
to training materials and courses, resulting in better recall and retention of
information.
The OCLDs impact on business has been recognised by Brandon Hall, a leading analyst
firm in Human Capital Management, awarding it with two gold medals.
Besides these, The Oberoi Group initiated a Corporate Effectiveness Survey to assess
the adequacy and timeliness of support from the Corporate Office to and Business Units.
A detailed policy document, The Oberoi Group Code of Conduct, was introduced to guide
employees on acceptable behaviour and ethical conduct.
The number of people employed by the Group as of March
31, 2023, was 1,579 and Industrial Relations remained stable throughout the year.
INTERNAL CONTROL MECHANISM AND ADEQUACY
The Company places great importance on maintaining a strong internal control mechanism,
guided by the principles of The Oberoi Dharma. As committed members of the organisation,
we adhere to the highest standards of conduct, encompassing ethics, intellect, finance,
and morality.
To ensure the orderly and efficient conduct of our operations, protection of assets,
prevention and detection of fraud and errors, accurate accounting records, timely
financial reporting, and compliance with laws and regulations, we have implemented robust
internal control processes at both the entity and process levels.
Our internal control mechanisms strike a balance between the imperative of governance
and the need for smooth operations and management. These mechanisms incorporate
appropriate checks and balances to provide assurance while ensuring operational
efficiency.
Internal financial controls (IFC)
Regarding internal financial controls, the Directors have established a framework in
accordance with Section 134(5) (e) of the Companies Act, 2013, incorporating measures to
ensure the adequacy and ongoing effectiveness of such controls. The Independent Directors,
as mandated by
Section 149(8) and the Code for Independent Directors under Schedule IV, Clause II(4)
of the Companies Act,
2013, have verified the integrity of financial information and ensured the robustness
and defensibility of financial controls and risk management systems. The Board has
implemented systems, frameworks, and mechanisms within the company, empowering the Audit
Committee to periodically review and confirm their effectiveness and suitability. The
companys internal control framework aligns with global best practices for organisations
of similar size, nature, and complexity. It involves structured control risk assessments
through Standard Operating Procedures (SOPs), Risk and Control Matrices (RACM), IT
policies, ERP-based information systems, including MIS and automated system controls
integrated within the ERP and other IT systems. The Internal Audit Team conducts regular
testing of the RACM using data analytics tools. The Internal Auditor has made separate
presentations on IFC controls to the Audit Committee during the Financial Year 2022-23.
Internal audit mechanism and review systems
The Internal Audit Department, led by the Internal Auditor, operates with a skilled
team of ERP-trained Chartered Accountants specialising in various areas such as finance,
operations, legal, statutory, projects, and process audits. They frequently collaborate
with reputable co-sourced firms to conduct audits and handle specialised tasks, ensuring
adherence to industry best practices. The department utilises advanced Computer Assisted
Audit Techniques (CAATs) and implements online monitoring systems across all IT functions
and units of the company. Specific audits are focused on areas identified through a
structured risk assessment process and an annual internal audit plan approved by the Audit
Committee. Audit findings are recorded in an online database for comprehensive
documentation, easy accessibility, and structured follow-ups. The Internal Audit and IT
departments jointly conduct regular IT security audits, while vulnerability assessments
and penetration testing are carried out by external agencies with expertise in these
areas.
A dedicated team of senior executives convenes periodically under the guidance of the
Managing Director to address and resolve pending audit issues. The Chief
Internal Auditor presents findings to the Audit Committee on a periodic basis,
prioritising risks and the likelihood of their occurrence, as well as the status of
pending issues in different units. The Internal Audit team is entrusted with the task of
developing effective monitoring mechanisms and procedures to prevent and detect process
failures and faults. Their observations, along with recommended mitigating actions and
target dates, are reported to the Board of Directors Audit Committee on a periodic basis.
The Audit Committee reviews the presentation and provides guidance for further actions.
The Audit
Committee expressed satisfaction with the effectiveness of the companys internal
control systems, procedures, and the performance of the Internal Audit Department.
Conclusion
In conclusion, this year has showcased our unwavering determination, adaptability, and
dedication to upholding excellence. Despite formidable challenges, we have achieved
remarkable financial growth, effectively managed risks, and embraced innovation to
optimise our operations. Our strategic alliances and expansion plans have laid a solid
foundation for future prosperity, while our numerous accolades reinforce our unwavering
commitment to delivering unparalleled service.
The driving force behind our accomplishments remains our exceptional workforce, whose
growth and well-being are of utmost importance to us. We have implemented robust internal
control mechanisms that ensure the integrity and efficiency of our operations. Looking
forward, we possess full confidence in our ability to continue delivering exceptional
value to our stakeholders, guests, and employees, while retaining our position as a
frontrunner in the global hospitality industry.
|
For and on behalf of the Board |
| New Delhi |
Vikramjit Singh Oberoi |
| 16th May 2023 |
Managing Director |
+91-9892691696
