While the dust of COVID was yet to settle down with less severe variant omicron of the pandemic coupled with getting better off with daily restricted number of covid cases across the globe and the world was recovering from the irreparable damage of COVID, the clash of two titans has acted as second jolt across the globe as the Russia Ukraine crisis has aggravated the perils of high inflation driven by galloping brent crude oil prices from 50 USD per barrel on the onset of 2021 to 77 USD per barrel by the end of the calendar year 2021, exhibiting an upsurge of 53% in span of just one year on account of locking the horns by these two nations. While on covid 19 pandemic, the world wide economies have exhibited sharp recovery despite of the resurgence of new variant of the covid-19. Many nations have adopted a perspective of zero endurance policies to check the virus spread. The government has encouraged COVID appropriate behavior, boosting the healthcare system, increased the testing sweep and wide vaccination drive and booster dose impetus has successfully controlled the subsequent waves of the pandemic.
The Global Economy
According to IMF, the global economy bounced back at 6.1 % in 2021 after the contraction of 3.1 % in calendar year 2020 as against the projection of 4.9% in later part of 2021 on account of upsurge in inflation and commodity prices being at stature of many decades in early 2022 backed by the rift between Russia and Ukraine. The growth projection for advanced economies is 5.2% in 2021. The emerging economies are poised in slight better positions to show growth rate of 6.8%. Nation wise, in 2021, the growth projection for US is at 5.7%, UK - 7.4%, Emerging Asian economies -7.3% under the leadership of India at 8.9, China at 8.1% Maldives at whopping 33.4%, South Africa and Nepal is moderately poised at 4.9% and 2.7% in order with Bhutan having degrowth of 3.7%. The world bank has forecasted expansion of global economic output at 4.1 % in 2022 to 3.2% in 2023 being attributed to the timid growth rate in 2022 as an unceasingly impact of COVID 19 infections, subdued fiscal stimulations, soaring inflation due to short supply of key inputs and lingering supply paucity. The global economy is expected to hit hard on account of inflation at the end of this year.
After the degrowth of 7.3% in 2020-21, the indian economy has bounced back with estimated growth rate of 8.6% in 2021-22. By the close of 2021-22, India was amongst the six largest global economies, posting fastest pace of economic growth with market size of 1.40 billion the second largest populous nation after china with under consumed rural population, certainly being the largest in the world. In terms of economic fronts, India has witnessed largest receipts of global remittances of 87 billion USD in 2021 with highest ever forex reserves of 642 billion USD. While the indian rupee has witnessed fall of 3.6 % from Rs 73.28 to Rs 75.91 against USD in 21-22. The CPI stood at estimate of 5.3% in 21-22. The monthly
GST collections are breaching all past levels standing at 1.5 lakh crores. The country ranked fifth amongst the worlds leading stock markets with market capitalization of 3.21 trillion USD in March 22. The fiscal deficit stands at around Rs 16 trillion for year ended March 2022 predominantly on account of high government expenditure. The per capita income in India has estimated to be at Rs 1.5 lakhs (21-22) from Rs 1.3 lakhs (20-21) attributed to relaxation in lockdown coupled with increased roll out of vaccines. Indias tax collections have been increased to Rs 27 lakh crores in 21-22 breaking it further down to direct tax collections increased 49% as against 30% in case of indirect taxes. Above the RBI tolerance level of 6% of retail inflation, the same was at 6.95% in March 2022- 17 months high and that too for consecutive three months in raw breaching 6% comfort level mark.
Travel & Tourism:
The global tourism has witnessed negative impact in 2021 on account of repeated waves of pandemic as consequence of re introduction of travel constraints. The silver line in dark cloud however is the same is expected to bounce back in 2022 and 23 slowly as the travel restrictions are to be uplifted and normalcy would return. The cause of concern for world wide traveling is the conflict of Russia and Ukraine, inflation led savings, high energy and commodity pricing. The international tourist arrival across the globe stood at 421 million in 2021 witnessing meager upsurge of 4.6% in compare to 2020 but lower by mammoth 71.3% compared to 2019 - the pre covid levels, a difference of almost a billion travelers than the pre pandemic levels of 2019. The Asia pacific region has seen decline in international arrivals by 64.7% in 2021 over 2020. In south Asia, international tourist arrival was 5.7 million in 2021 as against 33.7 million in 2019. In 2023, however the global travel is expected to be at pre pandemic level as the pandemic is not acute anymore. In monetary terms, The Asia pacific hospitality sector will likely to reach 3.4 trillion USD in 2023 above 3.3 trillion USD in 2019. In long term, the travel and tourism segment is expected to post growth rate of 5.8 % from 2022 to 2032 as against the GDP growth of 2.7% globally.
The rich and diversified Indian culture makes it a preferred travel destination and favourite amongst international tourists. The industry is one of the largest service industries amongst all service sectors in India apportioning almost 7% in Indias GDP. In 2020, the industry accounted for almost 40 million jobs and the same is projected to be around 55 million by 2027. In terms of the report of Horwath HTL Market, the occupancy for calendar year 2021 was 43.5% as against 32% in 2020 –the pandemic peak year and almost 25% during the initial pandemic period of March to December 2020. The total air passenger traffic within India for 2021 was 182 million higher than 2020 by 27% still lower by 48% in 2019. Of this, 164 million or 90% was attributed to domestic air passenger traffic. On the contrary, foreign tourist arrivals were 1.41 million for calendar year 2021 as against 2.74 million in 2020 and 10.93 million in 2019. As per the STR tracking, 13 Indian holiday destinies have registered occupancy of 50% in Q4FY2021-22 in compare to 46% for FY2020-21 with improvement of almost 40% in RevPAR. Led by Goa with 63.3% occupancy, Mumbai has stood second with 62.6% occupancy.
After two abysmal years effected by covid, the year 2023 is expected to see the normalcy of tour and travel and hospitality segment in line with 2019. Low fatality of omicron variant, controlled number of daily covid infection and low death numbers with well-equipped health care facilities, the consumer confidence has boosted significantly to see improvements in travel and tourism activities. Various state governments have already lifted travel constraints and resuming of international flights has paved out the way of greater inflow on international tourists visiting India. With end of work from home scenario in most of the corporates, the business travel activities would also see revamp as a measure of client acquisitions, relationship building, industry conferences, exhibitions and tradeshows. With increase in international travelling for leisurely indulgence coupled with domestic travel for social gathering and events, conferences which would further improve the occupancies with improvement in average room rate. This would act as boon for branded hotels to have fillip in serving its customers with cynosure of the industry to exploit other arena of generating revenues by maximizing and extracting out of the each square feet of real estate as a measure to generate more revenues. The governments core focus on infrastructure development of road, metro rails, airports and port development to act as an aid for hotel industry.
Financial and Operating Performance
The total revenue from operations of the Company for the year was recorded at Rs. 10,818.68 lakhs (of which the turnover of Rs. 4,849.04 lakhs pertains to The Orchid, Mumbai, Rs. 2,409.43 lakhs pertains to VITS Mumbai and Rs. 3,560.21 lakhs pertains to other units) as against Rs. 5,162.26 lakhs in the previous year, an increase of around 109.57% over the last year. The Companys loss after tax is Rs. 2,234.40 lakhs as compared to Loss of Rs. 2,757.20 lakhs of previous year (excluding other comprehensive income) The key financial ratios are given in the financial statements of the Company with reason for variation in the same over the previous year.
Internal Control Systems and Their Adequacy
Adequate internal controls have been laid down by the Company to safeguard and protect its assets as well as to improve the overall productivity of its operations. The Internal Audit Department of the Company together with Internal Auditors, Mazars India LLP Chartered Accountants, Mumbai, ensures compliance with the prescribed internal control procedures. Internal audits are carried out at regular intervals and the audit reports are periodically laid before the Audit Committee fore view. The Companys internal controls are in line with the requirements of the Company, however, in view of achieving excellence the systems are regularly updated as per the changing needs of the business.
Internal Financial Controls (IFC)
The Directors have devised a framework for Internal Financial Controls to be followed by the Company that conforms to the requirements of
Section 134(5)(e) of the Companies Act, 2013 and incorporates measures that ensure adequate and continuing operating effectiveness of internal financial controls.
Furthermore, in accordance with Section 149(8), read with the Code for Independent Directors laid down under Schedule IV, Clause II (4) of the Companies Act, 2013, the Independent Directors have satisfied themselves on the integrity of financial information and have ensured that
Financial Controls and systems are robust and secure.
In order to enable the Directors to meet these responsibilities, the Board has devised the necessary systems, frameworks and mechanisms within the Company. The Board has empowered the Audit Committee to periodically review and confirm that the mechanism remains effective and fulfil the objectives for which they have been created.
Human Resources and Industrial Relations
Given the highly specialized nature of the Companys business and the large number of locations where it operates, attracting and nurturing the right talent is at the core of your Companys strategy for success and growth. The companys believe in employing the right talent and nurture and polish them vis-a-vis to Companys vision and mission, significant improvements were made in the recruitment process in the form of standardized pre-employment evaluation as well as interview and assessment processes across locations based on the job profile.
Towards this end, it also institutionalized internal job postings to provide employees opportunities to grow with the organisation. During the year there were 689 employees on the pay roll of the Company. Constant efforts are being made to motivate the employees for coming with innovative ideas which may result into improving the operational efficiency, cost rationalization etc. All efforts are made to retain the right talent and also recognize the talent of employees.
Statements contained in the Management Discussion and Analysis describing the Companys estimates, projections and expectations are forward looking statements and based upon certain assumptions and expectations of future events over which the Company has no control and which could cause actual results to differ materially from those reflected in such statements. Readers should carefully review other information in this Annual Report and in the Companys periodic reports. The Company undertakes no obligation to update or revise any of these futuristic statements, whether as a result of new information, future events, or otherwise.
Gold/NCD/NBFC/Insurance and NPS
Gold/NCD/NBFC/Insurance and NPS