asian hotels east ltd share price Management discussions


ANNEXURE - IV

INDUSTRY STRUCTURE, DEVELOPMENT, OPPORTUNITIES AND OUTLOOK

The outlook for the Indian hospitality industry during 2023 remains positive. The upsides working in favour of the hospitality industry in India are good macroeconomic environment evidenced by 6%+ GDP growth, superior performance by the services sector of Indi-an economy. The post-COVID growth for the industry has been promising with the Q4 (Financial) being bullish in terms of recovery with the luxury and upper upscale portfolio of the city growing at a year-on-year pace of 189% in terms of occupancy, 15% in terms of ADR and 234% in terms of RevPAR. This quarter was driven by strong Social, MICE and Sports movements as the same was restricted in the Q4 of last financial year due to the impact of Omicron. The period also witnessed the reopening of certain hotels and spaces in the upper upscale segment that had been under renovation and management transfers during the COVID period, namely the Taj City Center adding a daily inventory of 147 rooms per day to the city.

The recovery from Q1 has been balanced and sustained to a 35% year-on-year change in terms of occupancy and 32% in terms of average rates. The sporadic growth has now diminished to organic business growth like pre-pandemic periods.

RISKS, CONCERNS AND THREATS

Resuming corporate travel including domestic and international travellers bringing back transient occupancy. Focusing on increasing corporate tie-ups for sustainable business trends.

Attrition is the biggest threat for the industry post-COVID due to uncertainty and this shall continue for a couple of more years. The right talent is in scarcity in the city.

Inbound MICE business due to the availability of multiple convention spaces is both an opportunities and threats for our hotel.

SEGMENTWISE, FINANCIAL AND OPERATIONAL PERFORMANCE

The Company is engaged in two lines of business through separate divisions namely Hotel Division and Investment division which in-turn consists of the "Securities Trading Unit" (The Scheme of Arrangement for Demerger of Robust Hotels Limited, Chennai is effective and operative from Wednesday, 21st September, 2022 and no longer subsidiary of the Company) and the "Strategic Investments Unit" (comprising inter alia of investment in and loans given to GJS Hotels Limited) till 20th September, 2022. For details please refer note no. 40 of the notes to the standalone audited financial statements.

EFFICIENT INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has in place an adequate system of internal controls, with documented procedures covering all corporate functions and hotel operating units. Systems of internal controls are designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls, and compliance with applicable laws and regulations. Adequate internal control measures are in the form of various policies and procedures issued by the Management covering all critical and important activities viz. Revenue Management, Hotel Operations, Purchase, Finance, Human Resources, Safety, etc. These policies and procedures are updated from time to time and compliance is monitored by Internal Audit.

The effectiveness of internal controls is reviewed through the internal audit process, which is undertaken for every operational unit and corporate statutory compliance. The Audit Committee of the Board oversees the adequacy of the internal control environment through regular reviews of the audit findings and monitoring implementations of internal audit recommendations through the compliance reports submitted to them. The Statutory Auditors of your Company have opined in their report that your Company has adequate internal controls over financial reporting.

DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Human Resource Development (HRD) refers to the organizations plan to help employees develop their abilities, skills, and knowledge. Industrial relations play a major role in human resource management. It is an important function of HRD that focuses on maintaining good relations between the Company, its employees, and its business partners. Hyatt tries to ensure that all their selected candidates either possess competencies or can be developed through training to fit into the organization with the mentioned characteristics. The interviewers are supposed to grade the employees according to what they perceive from the candidate during the rounds of interviews. This fits into the Hyatt strategy by ensuring that the right fit of people is employed keeping in check the overall mission of providing authentic hospitality. The competencies mentioned are characteristics required in employees to best match the manpower need of the Company. The core competencies include a basic framework of the employees personality and how he or she will be able to adapt to the culture of the Company. The hotel requires people who are proactive with good communication skills and can fit into a team by working in coordination with others. The hotel does not concentrate on the skill as much as the overall personality of the candidate as they have an extensive training and development module to teach the employees the standard operations. This is done through various extensive task training modules and sessions that are conducted for the employees. This is discussed further in detail below.

The Company continues to maintain a very cordial and healthy relationship with its workforce across all its units. The number of people employed on-roll by the hotel as on 31st March, 2023 was 235.

The overall well-being of our employees is important to us and we take necessary steps in ensuring that our associates are happy working for Hyatt Regency Kolkata. We had done multiple team building exercises, starting from the annual staff party with multiple rewards and recognition, football match and inter hotel cricket matches etc.

DETAILS OF SIGNIFICANT CHANGES IN FINANCIAL RATIOS:

In accordance with the SEBI (Listing Obligations and Disclosure Requirements 2018) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately preceding financial year) in key sector-specific financial ratios.

The Company has identified the following ratios as key financial ratios:

Financial Year
Particulars 2022-23 2021-22
Debtors Turnover Ratio 15.45:1 13.86:1
Inventory Turnover Ratio 14.40:1 9.48:1
Current Ratio 1.93:1 3.34:1
Debt Equity Ratio NA NA
Operating Profit Margin % 34.96% 0.671%
Net Profit Margin % 28.67% 1.11%
Interest Ratio NA NA

Net worth of Asian Hotels (East) Limited

Particulars 31st March 2023 (Rs.) 31st March 2022 (Rs.) Changes (Rs.)
Net worth 1,41,78,08,107/- 8,50,47,79,202/- 7,08,69,71,095/-

Net worth is decreased due to the following reason during the financial year 2022-23

Particulars Amount (Rs.) Reason/Remarks
Net Comprehensive Income (2,27,78,597/-) Due to increase in Net Comprehensive Income
Decrease in Net Worth (7,08,69,71,095/-) Pursuant to Scheme of Arrangement

CAUTIONARY STATEMENT

Statement made in the Management Discussion and Analysis Report, may be forward looking statement within the meaning of applicable laws and regulations. Actual result might differ materially from those either expressed or implied.

For and on behalf of the Board of Directors

A. C. Chakrabortti Umesh Saraf Rita Bhimani
Kolkata

Director

Jt. Managing Director

Director

22nd May, 2023 (DIN: 00015622) (DIN: 00017985) (DIN: 07106069)