Vidli Restaurants Ltd Management Discussions

Industry structure and development

Indian economy has demonstrated resilience and maintained healthy macro-economic fundamentals, despite global economic challenges. There has been strong growth across sectors. The accelerated pace of economic reforms and strong domestic consumption have led to higher and sustainable growth of the Indian economy and strengthened its position in the world. In the three quarters of the fiscal year, Indias GDP growth touched 8.2% year over year (YoY) in these quarters. The geopolitical tensions, supply chain disruptions, high inflation, and tighter monetary conditions were some of the challenges for the economic recovery.

The hospitality sector in India is an integral part of the travel and tourism industry. Indias tourism and hospitality industry experienced significant recovery and growth in 2023, marked by increased domestic and international demand, major global events, spiritual and religious tourism, and expansions in hotel chains. The government has also initiated various measures like developing ports as cruise tourism hubs, supporting new projects from international hotel chains, increase in budget to the tourism sector, launch of Scheme to develop theme-based tourist to boost the industry.

Outlook and Opportunities

The Tourism and Hospitality Industry in India is reaching to robust demand. There is an upward trend in international tourists in India marked by escalating hotel prices, soaring airfares, and increased travel expenditures. There has been a buoyancy of domestic leisure trips and the thriving landscape of meetings, incentives, conferences, and exhibitions events. Hosting major global events, including the G20 Summit and the ICC World Cup, played a pivotal role in driving the industrys success. The return of business travellers was equally significant, contributing substantially to the growth of hotel industry in India during the year. The attraction of visa-free travel offerings from few countries has also contributed to the escalating demand for outbound travel.

Threats, Risks and concerns

Some of the biggest threats or risks faced remains unchanged which are the economic uncertainty or slow recovery, business interruption, failure to innovate or meet customer needs, uncertainty in International Travel, natural disasters, geo-political tension, pandemic risk and health crises. The industry was among the hardest hit by the COVID-19 pandemic. Employee management continues to be a major challenge faced by the industry, shortage of experienced personnel, high attrition rate, lack of workforce quality. Maintenance of food safety and hygiene, catering to changing consumer likings are some of the critical factors. Changing government guidelines becomes difficult to adhere to, risk of fire, to maintain competitive menu prices with ever changing price of raw materials, supply chain issues, numerous clearance / licenses /approvals from authorities, high real estate cost are some of the concerns faced by the industry.

Ever changing scenario demands the industry to adapt to a new reality and innovation to stay competitive in the market. While some of the changes may be temporary, others become permanent as the evolution is inevitable to meet the changing needs and expectations.

Segment-wise or product-wise performance

The Company is presently operational in only one segment i.e. hospitality, food products and allied activities.

Internal control systems and their adequacy

Your Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. Review of the internal financial controls mechanism of the Company was undertaken during the year under review which covered verification of entity level controls, process level control and IT controls, review of key business processes and analysis of risk control etc. During the period under review, effectiveness of internal financial controls was evaluated. Reasonable Financial Controls are operative for all the business activities of the Company and no material weakness in the design or operation of any control was observed.

Our Company has developed a set of rules, systems, policies and procedures to ensure the reliability of financial reports, the effectiveness of the operations and its activities comply with applicable laws, rules, regulations and code of conduct. The Board of directors, management team and other connected personnel of the Company are integral part of the internal control system.

The Company has appointed M/s Pipalia Singhal & Associates, Chartered Accountants, Chartered Accountant firm to carry out the internal audit of the Company for the financial year 2023-2024. The Audit Committee of the Company reviews the internal audit report submitted by the internal auditor and provides suggestion, if any.

Discussion on financial performance with respect to operational performance

The net worth of the Company is Rs. 1,969.31 Lakhs as compared to Rs. 1,263.96 Lakhs over previous year. The Secured loans are Rs. 1,983.91 Lakhs as compared to Rs. 145.78 Lakhs in the previous year. The turnover of the Company was Rs. 1,823.54 Lakhs as compared to Rs. 1,758.01 Lakhs in the previous year. Further, the Company has earned profit before tax of Rs. 107.12 Lakhs as compared to Rs. 100.72 Lakhs in the previous year. The operational performance is illustrated in detail in the financial statement.

Material developments in Human Resources / Industrial Relations front, including number of people employed.

The Company has always perceived its Manpower as its biggest strength. The emphasis is on grooming in-house talent enabling them to take higher responsibilities. As on 31^st March, 2024 the Company has 117 employees on its payroll. The Employee relations continue to be cordial at all the divisions of the Company. Your Directors place on record their deep appreciation for exemplary contribution of the employees at all levels. Their dedicated efforts and enthusiasm have been integral to your Companys steady performance.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including:

There are significant changes in key financial ratios mainly due to impact of Covid-19 pandemic on the operations and working of the Company. Details are mentioned under:

F - Favourable A - Adverse

Disclaimer:

Statements mentioned in this report are forward looking statements and based on certain assumptions and expectations of future events which are out of control of the Company and the actual results can differ materially from those reflected herein. The Company assumes no responsibility to publicly amend, modify or revise any statement on basis of any development, information, event.