1. BUSINESS OVERVIEW & TRENDS
The Continous outbreak of the Covid-19 pandemic that has had no similarity in recent
history in terms of impact has caused the world to be placed under lockdown, and the
industry to a halt until the population in mostly vaccinated we will continue to see
periodic outbreak of Covid. However, there is a revival of the demand due to reverse
tourism and normally having returned.
2. NATURE OF INDUSTRy
2.1 Currently the industry is taking all possible measures to survive in the
short-term, revive in the medium-term. This will prepare us for the "new
normal", with changed customer perceptions about consumption and services; a period
that will see higher emphasis on hygiene and safety, and an increase in the use of digital
solutions as India deals with the concept of "contact-less" interaction among
people. 2.1.1 The key characteristics of the hotel industry are :
The industry is primarily capital intensive coupled with depreciation costs on the
buildings, furniture, fixtures and equipment and other assets. During periods of growth
the depreciation and interest costs rise rapidly as capacity additions take place.
The relevant parameter for evaluation of management performance in the growth mode is
thus EBITDA (Earnings Before Interest Tax Depreciation and Amortization), rather than
Profit After Tax (PAT), since the depreciation and interest costs are expensed relatively
quickly (over a 8-10 year frame) against an asset that has a life of 80 to 100 years.
2.1.2 The hotel industry is also cyclical due to the nature of capacity additions being
lumpy while the demand growth is smooth. However, the exact position of the industry on
the business cycle varies from city to city, depending on the forces of demand and supply
in that city.
2.1.3 Seasonality Trend: The Indian hotel industry reflects a clear seasonality trend
in normal times. For example in India, the tourism and hospitality industry shows signs of
an uptrend in the months of November to February due to higher tourist flows. The months
of June to September on the other hand are months of low occupancies and revenue, with
fewer business or leisure visitors. There is considerable improvement in the months of
June to September that we have experienced. However there is hope that this coming year
the pent up demand of the last two covid years will sustain even during non season months.
2.1.4 Strong dependence on the services economy:
The hotel industry tourist segment is highly dependent on services economy in terms of
performance. Thus in the years of the services economy boom, the hotels business has grown
well and has been relatively unaffected by the under performance of the manufacturing
sectors of the economy.
2.1.5 Brand Impact: The hotel industry is characterized by strong brand focus resulting
in choices being made by the customer based on factors beyond price especially in the
high-end segment where the brand is a hallmark of product and service quality. Your
Company has tied up with Treat Resorts and re-branded itself as Ras By Treat Resorts as
to improve sales and brand recognition.
2.1.6 Instant perishability of the product: The industry belongs to the service sector
and thus the product (service) is instantly consumed and cannot be replenished. Thus, one
needs to maximize utilization of available capacity and reduce marginal costs over
marginal revenues. Thus, one needs to maximize utilisation of available capacity and
reduce marginal costs over marginal revenues.
2.1.7 The major cost drivers in the industry are:
- Food and beverage costs
- Employee costs
- Power and fuel expenses
- Administrative and other overhead costs
- Advertising and publicity expenses
- Operating and Marketing Fees
3. BUSINESS PERFORMANCE trends that drive the hotel The significant industry are
the opportunities for growth into new markets. Hospitality industry is undergoing a period
of unprecedented change and becoming more a real estate play and will continue to
transform. This is also a period of unparalleled opportunity and the need of the hour is
to remain at the forefront of understanding the travellers need and demand, both now and
into the future. understanding these key business drivers and delivering the technology
will support the hoteliers to stay competitive in a rapidly changing world.
4. RISK FACTORS
4.1 Risks related to presence in Silvassa, India 4.1.0 The Company has carried out a
risk assessment to ascertain any of the potential
COVID-19 related risks. As of now, it does not foresee any disruption in raw material
supplies nor any incremental risk to recoverability of assets (inventories, investments,
receivables, etc.) given the measures being taken to mitigate the risks. There is also no
impact on internal financial controls due to any emerging
COVID 19 situation.
4.1.1 Political and economic environment risks: With the political and economic
environment becoming stable over the coming years stable in India, the hospitality
industry will be benefited.With the services sector increasing its contribution share of
the Indian GDP, over the medium term the fortunes of our industry are expected to improve
further. With India joining the global mainstream of business and attracting more foreign
investments and its presently high levels of domestic tourist traffic, the future has good
potential for the hotel industry.
4.1.2 Socio-Political risks: The Hotels industry faces risk from the volatile
socio-political environment in the local area.
4.2 Industry / sector specific risks
4.2.1 Infrastructure related risks:
Presence of good infrastructure in terms of airports/ roads is critical to attract
customers.
With the Government of India planning to privatise the airport, to increase
international standards and the commissioning of the Golden Quadrilateral Highway,
business activity is expected to improve, and the hotel industry will benefit from these
improvements in infrastructure.
4.2.2 Government concessions / restrictions to the hospitality industry:
Tourism as a major economic activity has been identified as such by the Government of
India. The importance of the sector is expected to grow in the coming years.
4.3 Risk associated with the Company
4.3.1 With the Operations and Marketing being outsourced the main risk is the
effectiveness of the Operator.
4.3.2 To strengthen the operations and develop attention to detail your Company has
asked the Operator for added training as a requirement for all new hires.
4.3.3 Client Concentration: Your Company hotel provides its services to 7 broad market
segments, namely Corporate/Business, Leisure, Longstayers, Groups, Conferences, Events
(including weddings) and Packages.
5. INTERNAL CONTROL SySTEMS AND THEIR ADEQUACy
5.1 The systematic evaluation and improvement of internal control and internal Audit
continued during the year 2022-2023. The coverage has been comprehensive and exhaustive
with a great degree of involvement of the Unit personnel and satisfactory compliance with
previous years agreed audit recommendations.
6. LIMITATIONS OF FINANCIAL STATEMENTS
6.1 in keyThere financialis significant ratios due to covid and hence are not
comparable with the previous years.
6.2 The accounting standard definition of a contingent liability is as follows:
- a possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence of one or more uncertain future events not wholly within
the entitys control; or efficiency to - a present obligation that arises from past events
but is not recognized because it is not probable that a transfer of economic benefits will
be required to settle the obligation; or the amount of the obligation cannot be measured
with
7. FUTURE OUTLOOK
7.1 INTERNATIONAL
7.1.1 Has Little or no impact on our domestic market who we mainly service.
7.2 FUTURE OUTLOOK FOR INDIA
7.2.1 India will also see impact of its GDP and a lot depends on the Covidsituation and
liberalization of the economy.
7.2.2 The Indian economy handling of future Covid live waves.
7.2.3 Development of road infrastructure is expected to improve conditions in the
country and could emerge as a growth driving factor for the economy on the whole.
7.3 FUTURE OUTLOOK FOR THE INDUSTRY
In the medium and long tern, the demand for the Rooms and F & B is expected to grow
because of the following factors:
- Improvements in the infrastructure sector viz. roads
- Higher Disposable income
- Pent up demand from the lockdown periods
- Investment Reforms will further boost up long-term capital inflow into the sector.
In the long term, for the growth of the industry to be sustained, issues like poor
infrastructure, high levels of taxation need to be solved specially the GST rates. Land
development, less of paper and legal work, faster execution is needed to meet the growing
demand.
Adding rooms at a faster pace would stabilise the room rates and not have a negative
effect on the potential demand in the future.
7.4 REAL ESTATE ACTIVITY
Real Estate business activities in Silvassa are at a stand still due to softening of
demand.
7.5 CONCERNS FOR THE FUTURE
The good monsoon could enhance the business mood. Online travel agents near monopoly
and penetration are effecting the net price realisation for hotel rooms. reliability.
8. HUMAN RESOURCES AND INDUSTRIAL RELATIONS
8.1 The Companys mission is to achieve and sustain leadership in the Hospitality
industry and to deliver value to its customers by rewarding and recognizing quality
customer care based upon individual and team performance. The Company provides
opportunities for continuous learning and development and abides by fair policies to
ensure the well being of its employees, their family, the community and the environment.
8.2 Improvements in all the areas of the hotels have been affected through: 8.2.1 A
clear understanding of the groups vision, inphilosophy the Customer and flexibility
Relationship Management; 8.2.2 To build a culture of trust and transparency, Staff
Meetings have been initiated where employees are briefed on the new activities and the
business scenario and regular training imparted.
9. CAUTIONARy STATEMENT
Statements in the Management Discussion and Analysis describing the Companys
objectives, projections, estimates and expectations may be ‘forward looking
statements within the meaning of applicable securities laws and regulations. As
‘forward looking statements are based on certain assumptions and expectations of
future events over which the Company exercises no control, the Company cannot guarantee
their accuracy nor can it warrant that the same will be realized by the Company. Actual
results could differ materially from those expressed orSignificantfactors that implied.
could make a difference to the Companys operations include domestic economic conditions
affecting demand, supply and price conditions in the hospitality industry, changes in
government regulations, tax regimes and other statutes.
+91-9892691696
