TAJGVK HOTELS AND RESORTS LIMITED
ANNUAL REPORT 2011-2012
DIRECTOR`S REPORT
Dear Shareholders,
Your Directors have pleasure in presenting the Seventeenth Annual Report of
the Company together with the Audited Accounts for the year ended 31st
March 2012.
FINANCIAL RESULTS
The performance of the Company for the financial year ended 31st March 2012
is summarized below:
(Rs. in crores)
Particulars 2011/12 2010/11
Turnover 255.94 260.66
Profit before Depreciation, Interest &
Tax (PBDIT) 80.02 97.74
Less: Depreciation 22.10 20.61
Profit Before Interest & Tax 57.92 77.03
Less: Interest 15.14 11.30
Profit Before Tax 42.78 65.73
Less: Provision for
- Current Tax & Wealth Tax 8.70 19.22
- Deferred Tax 13.48 3.19
- MAT credit entitlement (8.70) -
- Short provision for earlier years (0.03) (0.02)
Profit After Tax 29.33 43.34
Balance brought forward from
previous year 177.88 159.12
Profit available for appropriation 207.21 202.46
Less: Proposed Dividend 9.40 12.54
Dividend Tax on the above 1.53 2.03
Transfer to General Reserve 5.00 10.00
Balance carried over to balance sheet 207.21 177.88
Earnings per Share (Rs.) 4.68 6.91
OPERATIONS/PERFORMANCE
During the year 2011-12 your Company`s turnover decreased by 2% from
Rs.260.66 crores to Rs.255.94 crores. The gross operating profit (PBDIT)
was lower by 18.04% at Rs.80.02 crores from the previous year`s Rs.97.64
crores and the net profit was lower by 32.33% in the current year at
Rs.29.33 crores compared to Rs.43.34 crores of the previous year.
DIVIDEND
Your Directors are pleased to recommend a dividend of 75% ( Rs. 1.50 per
equity share) on the Equity Shares of the Company for the financial year
2011/12. The outflow on account of the dividend would be Rs.10.93 crores
including tax on Dividend.
INVENTORY ADDITION
During the financial year 2011-12, new five star hotel by name Vivanta By
Taj Begumpet, Hyderabad became operational. This 181 room hotel was well
received by the city and with this expansion, the Company`s room inventory
has gone up from 902 rooms to 1083 rooms.
EXPANSION PLANS
Taj Krishna
The construction of an additional Car parking facility along-with enhanced
landscaping and connecting bridges at the existing premises of Taj Krishna
is nearing completion.
GINGER HOTEL PROJECTS
The Company is also planning to enter the value for money segment through
the `Ginger` brand in Andhra Pradesh. The excavation works on the first
Ginger hotel on a site located near the Shamshabad International Airport
have been completed and civil work is expected to commence shortly.
INVESTMENT IN MUMBAI HOTEL PROJECT
The Company jointly with M/s. Greenridge Hotels & Resorts Private Limited
(Greenridge - a GVK Company) through its SPV M/s. Green Woods Palaces &
Resorts Private Limited (Green Woods) are setting up a 5 Star Deluxe
(Luxury category) Hotel Project comprising of 275 rooms near Terminal 1C,
Santacruz, Mumbai at Mumbai International Airport under the `TAJ` brand.
Necessary agreements to this effect have been entered into. TAJGVK in
tranches would invest around Rs.110.25 crs in the Hotel Project.
OTHER PROJECTS
Company has been allotted around 6 acres land in Yellahanka Bengaluru for
hotel project. Plans are under evaluation.
HUMAN RESOURCES
Your Company, growing in a competitive and dynamic environment, places
great importance in the overall training and development of its employees,
who make the decisive difference in the hotel industry.
The total strength of employees of your Company for the year under review
was about 1956, which included executives, bargainable staff, probationers,
trainees, apprentices and contract employees.
Industrial Relations throughout the year continued to remain cordial.
QUALITY
The three properties at Hyderabad and Chandigarh property are HACCP (Hazard
Analysis Critical Control Points) certified by the international
certification agency BVQI. The 3 properties at Hyderabad, Chandigarh and
Chennai are also ISO 22000:2005 compliant by maintaining the desired norms
for Food Safety Management Systems in Food & Beverage operations.
LISTING
The Equity Shares of your Company are listed on Bombay Stock Exchange
Limited and The National Stock Exchange of India Limited. It may be noted
that there are no payments outstanding to the Stock Exchanges by way of
Listing Fees, etc.
DIRECTORS
During the year 2011, Mr. Ajit Singh, Independent Director expired on 24th
December, 2011. Mr. Ajit Singh was the Director since 2009 and he was also
a Director in the erstwhile GVK Hotels Limited and the Company has availed
his services for the Hospitality business since inception of the GVK`s
flagship hotel under the name Krishna Oberoi. The Board acknowledged the
immense contribution of Mr. Ajit Singh and deeply regretted his demise.
In accordance with the Companies Act, 1956 read with the Articles of
Association of the Company, Mr. G V Sanjay Reddy, Dr. Abid Hussain, Dr. A
Ramakrishna and Mr. M B N Rao Directors, retire by rotation and being
eligible have offered themselves for re-appointment.
Mrs. Deepa Misra Harris, Mr. Ch G Krishna Murthy have been co-opted as an
Additional Directors on 30th January 2012, 30th April 2012 respectively and
shall hold the office up to this Annual General Meeting. Your company is in
receipt of individual notice under section 257 of the Companies Act, 1956
for their appointment as Director of the company.
Your Board recommends the above appointments/ reappointment of Directors in
the best interest of the company.
INTERNAL AUDIT
M/s. A F Fergusson & Company, Chartered Accountants, Hyderabad acting as
the internal auditors, have been conducting periodic audit of the
operations of the Company, and the Audit Committee has reviewed their
findings.
AUDITORS
The Statutory Auditors, M/s. Brahmayya & Co., Chartered Accountants,
Hyderabad, retire at the ensuing Annual General Meeting and have confirmed
their eligibility and willingness to accept office, if reappointed. Your
Directors propose the reappointment of M/s Brahmayya & Co., as Statutory
Auditors to hold office until the conclusion of the next Annual General
Meeting of the Company.
PUBLIC DEPOSITS
During the year under review, your company has neither invited nor accepted
any deposits from the public.
PARTICULARS OF EMPLOYEES
Information as required under section 217(2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees) Rules, 1975 will be made
available on request by the Members.
DIRECTORS` RESPONSIBILITY STATEMENT
Pursuant to the provisions of section 217(2AA) of the Companies Act, 1956,
the Board of Directors, based on the representations received from the
Operations Management, hereby confirms that:
i. In the preparation of the annual accounts, the applicable accounting
standards have been followed and that there are no material departures.
ii. It has in the selection of the accounting policies, consulted the
Statutory Auditors and has applied them consistently and made judgements
and estimates that are reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company as at 31st March 2012 and of
the profit of the Company for that period.
iii. It has taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities, to the best of its knowledge and ability.
There are however, inherent limitations, which should be recognised while
relying on any system of internal control and records.
iv. It has prepared the annual accounts on a going concern basis.
CORPORATE GOVERNANCE
Your Company is committed to maintain the highest standards of Corporate
Governance. As required under Clause 49 of the Listing Agreement with the
Stock Exchanges, the report on Management Discussion and Analysis,
Corporate Governance as well as the Auditors` certificate on the compliance
of Corporate Governance are annexed and form part of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management discussion and analysis of the financial condition and results
of operations of the Company for the period under review as required under
Clause 49 of the Listing Agreement with the Stock Exchanges, is given a
separate statement in the Annual Report.
IMPACT ON HOSPITALITY BUSINESS
The hospitality business is presently passing through a challenging phase
with increasing inventory and competition. However the medium and long term
prospects of the industry remain intact with growing demand in a booming
economy.
OTHER INFORMATION
The Audit Committee of the Company reviewed the financial statements for
the year under review at its meeting held on 30th April 2012 and
recommended the same for the approval of the Board of Directors. Your
Company`s effort towards conservation of energy, which results in savings
in consumption of electricity, a significant component of the energy cost,
is an ongoing process.
The Company continues to absorb and upgrade modern technologies and
advanced hotel management techniques in various guest contact areas, which
includes wireless internet connectivity in all the hotels.
FOREIGN EXCHANGE EARNINGS AND OUTGO
As required under Section 217(1)(e) of the Companies Act, 1956, read with
rule 2 of the Companies (Disclosure of Particulars in the Report of Board
of Directors) Rules, 1988, the information relating to foreign exchange
earnings and outgo is given in Note No.21 (iii).
ACKNOWLEDGEMENTS
Your Directors would like to express their grateful appreciation for the
assistance and co-operation received from customers, banks, suppliers,
shareholders, Central and State Governments and other statutory authorities
and others associated with the Company. Your directors also wish to place
on record their deep sense of appreciation for the excellent contribution
made by employees at all levels, which enabled the Company to achieve
sustained growth in the operational performance during the year under
review.
By Order and on behalf of the Board
Place: Hyderabad G V Krishna Reddy
Date : 30th April 2012 Executive Chairman
Registered Office:
Taj Krishna, Road No.1
Banjara Hills,
Hyderabad - 500 034
Management Discussion and Analysis
1. ECONOMIC OVERVIEW:
The Indian economic growth was slightly subdued in 201112 because of
various factors, both global and internal. Slower economic expansion of
world output and recent corporate governance issues are some of the main
reasons. Headline inflation surged sharply to its highest level in more
than a year, maintaining pressure on the RBI for a fresh dose of interest-
rate hikes despite flagging economic growth. Sharp higher year-on-year
inflation in food items, and fuel products led to the spike in the headline
estimates. Industrial growth during the year slumped to 3.3 per cent with
high interest rates affecting the factory output. Eight core infrastructure
sectors of crude oil, petroleum refinery products, natural gas,
fertilisers, coal, electricity, cement and finished steel logged a 3.5 per
cent growth down from 4.4 per cent expansion witnessed in the previous
year. The services sector also witnessed a slow pace in growth on account
of the lagged effects of monetary policy tightening, the elevated level of
inflation and the heightened uncertainty about the global economic outlook.
The Euro-zone crisis have had a negative impact on the Indian capital
markets as Indian shares posted their biggest fall since the months
following the Lehman Brothers collapse. Indian Rupee also weakened by close
to 9 per cent to the USD by the third quarter of the year. This had a
severe impact on the profitability of Indian companies especially those who
had borrowed through the External Commercial Borrowing window. The
corporates have been increasingly tapping overseas loans mostly in the US
currency to save costs arising out of higher interest rates and liquidity
constraints in the domestic market in the recent months, but the falling
value of rupee seems to have negated the benefits. Further the decline in
tax collections also dented the feasibility of the government in achieving
its fiscal deficit target for 2011/12.
However, exports grew at double digit figures. The government also adopted
certain policy measures to rope in inflation and increase investment in the
country. It eased overseas borrowing rules and allowed companies to tap
foreign markets like China for debt. RBI continued with its hawkish
monetary stance and raised key rates to rope in inflationary pressures.
2. HOSPITALITY & TOURISM INDUSTRY OVERVIEW:
The global hotels industry appears to be now on a path of slow recovery,
having coming out of two exceptionally bad years 2009 and 2010. While the
main recovery leaders are the emerging countries in the Asia-Pacific
region, the developed luxury hotel markets of the USA and Europe have also
reported signs of demand recovery during the past 12 months.
Travel & Tourism globally enjoyed a strong year in 2011. Airline passenger
traffic, international tourist arrivals, hotel occupancy and average room
rates (ARRs), and international tourism receipts were all higher than in
2010. However, growth was typically slower than in 2010 and, more
significantly, began to slow progressively towards the end of 2011 as
economic growth lost momentum. International airline traffic growth, which
had been on a downward trend before stabilizing, is now showing some signs
of an upturn. The Asia Pacific region witnessed a 5%-6% increase in
international tourist arrival which was higher than the world par increase
of 4%-4.5%.
In India, the occupancy led recovery that started with the return of
domestic travellers late in calendar 2010-11, received a boost with foreign
tourist arrivals (FTAs) picking up in the year 2011-12. One of the key
risks to recovery came from demand dampeners, namely, expectations of
relatively mute corporate performance in fiscal 2011-12, increase in
interest rates, rise in fuel and food prices and subdued macroeconomic
signals from the developed markets. Additionally on the supply front, heavy
supplies in markets like the National Capital Region (NCR), Hyderabad,
Pune, Bangalore and Chennai suppressed pricing power to an extent.
With the latest technology and facilities, warm hospitality, rich heritage
and natural beauty, India is an ideal destination for meetings and
congresses and offers a unique and exotic destination that can be combined
with a leisure holiday. India boasts many world-class convention centres as
well as stunning scenery, transforming an annual business meeting into a
glamorous and enjoyable event. India has now become an attractive
destination for any global hotel company which is evidenced from the entry
of a slew of international hotel brands in the country and other plotting
their strategies for entry. Also, what is remarkable to note is that
inspite of the intense competition from international brands, the Indian
brands have held their turf and thrived.
3. Market Overview
Hyderabad
Hyderabad is the largest contributor to the state`s GDP, state tax and
other revenues. In addition to being an IT and ITeS hub Hyderabad emerged
as a pharmaceutical and biotechnology hub and is known as India`s
pharmaceutical capital and Genome Valley of India. It is also a house to
many entertainment industries, and financial services.
Certain political disturbances have had an impact on the number of tourists
visiting Hyderabad. However, industry analysts say they have not come
across any incident where hospitality projects have moved out of the city
due to the current scenario. Hyderabad remains one of the sought-after
destinations for launching new hotels.
Lately, there is clear polarisation in hospitality preference with one
bunch of hotels in the Central Business District (CBD), and another group
located in and around the Hitec City area along with those coming up in the
IT business hub. The first half of this year witnessed the launch of Lemon
Tree and Sarovar Hotel projects. This was followed by the opening up of
Vivanta by Taj - Begumpet, the Park Hyatt, and Marigold by Greenpark - all
in the five-star category. The 181 room Vivanta by Taj - Begumpet hotel at
Hyderabad became operational in the third quarter. With this recent
capacity expansion, the Company`s room inventory has gone up from 902 rooms
to 1083 rooms.
Further, Hyderabad Airport is aiming to become India`s first cargo hub. GMR
Hyderabad International Airport Ltd, which runs the airport, is in talks
with airlines and industry to develop the hub. With its central location,
world-class infrastructure, free trade and special economic zone, and huge
presence of pharma sector, Hyderabad is ideally suited to be a cargo hub.
This would certainly boost the business travel inflow into Hyderabad and
hence would benefit the hotel industry in the city.
The city has also been voted by MICE (Meetings, Incentives, Conferences,
Exhibitions) readers as the best city for MICE in Asia for the Annual MICE
report Awards 2012. The city has got a double bonanza with the Hyderabad
International Convention Centre (HICC) hosting the 11th Conference of the
Parties to the UN Convention on Biological Diversity in October 2012 and
Hyderabad being voted Winner of the Best City for MICE in Asia for Annual
Mice Report Awards 2012.
Chandigarh
With an international airport on the cards, and a lot of big hotel chains
investing in the city, Chandigarh is set to consolidate its position as the
Gateway to the Punjab. Chandigarh is the first planned, modern city of
India; the union territory includes the satellite cities of Mohali
(Punjab), and Panchkula (Haryana). The hospitality demand drivers here are
the liberal government policies, economic reforms, and the interest from
the IT sector, which have largely supported economic growth in the city.
With more international flights slated to operate from the city, sanction
for the Metro project and the growth of the IT industry in and around
Chandigarh, the hospitality industry is bound to get a boost from the
corporate as well as tourist activity. Further, the city hotels have always
got a boost from the business brought in by the cricket matches held at the
Mohali Stadium.
The city is becoming a hot spot for the hospitality sector. While Taj
Chandigarh was a forerunner in making Chandigarh its destination, other
hotel chains are having new plans to open their accommodation. Hotel JW
Marriott has already become operational in 2011-12. Sarovar Hotel and
resorts, one of India`s leading hotel management Company, has also launched
their property during the year.
Chennai
There was a time when Chennai that was Madras had just a couple of upmarket
hotels. That was also when the city was known for its magnificent open
spaces and plenty of tourist attractions. Now we have an embarrassment of
riches when it comes to choice of hotels. And the number is all set to
increase, with several hotel projects nearing completion. The Chennai five
star hotel market would have nearly doubled in size. Four hospitality
player Hilton already getting its hotel operational groups like Hyatt,
Leela and ITC are set to open their new properties soon. In Chennai, there
are less than 2,000 rooms of four star and five star hotels as of now. By
year end, nearly 1,500 rooms would have been added thereto.
The diverse nature of demand in Chennai, comprising of IT/ITeS, automotive
industry, as well as other manufacturing industries located in
Sriperumbudur will sustain the growth in demand going forward. The
expansion of existing manufacturing facilities and setting up of new plants
is responsible for attracting extended-stay demand to the city, and is also
responsible for travel by foreign corporate guests with high paying
propensity.
4. Future Expansion plans
Taj Krishna
The construction of an additional Car parking facility along-with enhanced
landscaping and connecting bridges at the existing premises of Taj Krishna
is nearing completion.
Investment in Mumbai Hotel
The Company jointly with M/s. Greenridge Hotels & Resorts Private Limited
(Greenridge - a GVK Company) through its SPV M/s. Green Woods Palaces &
Resorts Private Limited (Green Woods) are setting up a 5 Star Deluxe
(Luxury category) Hotel Project comprising of 275 rooms near Terminal 1C,
Santacruz, Mumbai at Mumbai International Airport under the `TAJ` brand.
Necessary agreements to this effect have been entered into. TAJGVK in
tranches would invest around Rs.110.25 crs in the Hotel Project.
Other plans
The company has been allotted around 6 acres of land at Yelahanka near
Bangalore for hotel project. The Company is also planning to enter the
value for money segment through the `Ginger` brand in Andhra Pradesh. The
excavation works on the first Ginger hotel on a site located near the
Shamshabad International Airport have been completed and civil work is
expected to commence shortly.
5. Financials
Revenues:
Income has decreased by 2% to Rs. 255.94 crores from Rs. 260.76 crores in
the previous year.
The room revenues fell by 4% to Rs. 122.50 crores from Rs. 127.35 crores.
The Food & Beverage income was Rs. 110.46 crores a fall of 3% compared to
previous year`s Rs. 114.44 crores.
Expenditure:
* The total expenditure increased by 9% to Rs. 213.16 crores from Rs.
195.03 crores in the previous year due to a combination of addition of the
new Vivanta property at Hyderabad, the one-time write-off of pre-operative
expenses of that property as well as the effect of inflation.
* Payroll cost was higher by 5% ( Rs.2.48 crores) over previous year mainly
on account of salary increments as well as addition of the new Vivanta
property at Hyderabad.
* Other operating expenses were higher by 9% as compared to previous year
mainly on account of rise in cost of raw material as well as that of power
and fuel in addition to the effect of the addition of the new property at
Hyderabad.
* Other expenses were higher than previous year by 9%. Earnings before
Interest, Depreciation, Tax and Amortisation (EBIDTA):
EBIDTA registered a decline of 18% ( Rs. 17.72 crores) to Rs. 80.02 crores
in 2011-12 from Rs. 97.74 crores in the previous year.
Profit before Tax:
The PBT fell by 35% to Rs. 42.78 crores from Rs. 65.73 crores in the
previous year.
Profit after Tax:
The PAT decreased by 32% to Rs. 29.33 crores from Rs. 43.34 crores in the
previous year.
6. RISK MANAGEMENT:
Risks and Concerns
Economic Risks: Hotel business in general is sensitive to fluctuations in
the economy. The hotel sector may be unfavourably affected by changes in
global and domestic economies, changes in local market conditions, excess
room supply, reduced international or local demand for hotel rooms and
associates services, competition in the industry, government policies and
regulations, fluctuations in interest rates and foreign exchange rates and
other natural and social factors. Since demand for hotels is affected by
world economic growth, a global recession could lead to a downturn in the
hotel industry.
Socio-Political Risks: The Hotel industry faces risk from volatile socio-
political environment, internationally as well as within the country.
India, being one of the fastest growing economies of the world in the
recent past, continues to attract investments. However, any adverse events
such as political instability, conflict between nations, terrorist attacks
or spread of any epidemic or security threats to any countries may affect
the level of travel and business activity.
Security Risks: The Hotel industry demands peace at all times to flourish.
The biggest villain in South East Asia has been terrorism supplemented by
political instability. Subsequent to the Mumbai terror attacks in November
2008, the hotel industry has invested substantially on security and
intelligence. The security concerns have been duly addressed instilling
confidence in the customer by providing international standards of safety.
Company-specific Risks
Heavy Dependence on India:
Risk of wage inflation: The hotel industry needs quality employees and with
demand for the same improving across the industry, the Company feels that
wage inflation would be a critical factor in determining costs for the
Company. Thus, your Company will continue to focus on improving manpower
efficiencies and creating a lean organisation, while maximising
effectiveness in terms of customer service and satisfaction, which is an
area of great importance for your Company.
Foreign Exchange Risk: Your Company may be impacted by the fluctuation of
the Indian Rupee against other foreign currencies. To mitigate this risk
the Company has migrated to single currency billing in Indian Rupees.
Project Implementation Risk: Your Company may be impacted by delays in
implementation of projects which would result in increasing project cost
and loss of potential revenue. To mitigate this risk, the Company has in
place an experienced project team supported by the leading external
technical consultants and a dedicated project management company. The
Company will endeavour to complete its projects on time at optimal cost so
as to maximise the profitability.
7. Internal Controls
Your Company`s Internal Auditors carryout audit of the transactions of the
Company at all the hotels and the corporate office periodically, in order
to ensure that recording and reporting are adequate and proper. The
Internal Audit also verifies whether internal controls and checks &
balances in the systems are adequate, proper and up to date. Corrective
actions for any weaknesses in the system that may be disclosed by the
Audits are taken. The Internal audit is based on an exhaustive list of
parameters called the Taj Positive Assurance Model (TPAM) which identifies
the critical issues needing immediate management attention. The meticulous
implementation of the improvements resulting from the TPAM exercise has
overhauled the existing system and resulted in higher efficiencies.
The Audit Committee of the Board reviews the important observations of the
Internal Audit and suggests corrective actions for the management to
implement. The Internal Audit team also assesses the risks facing the
company, steps taken to mitigate the risks and holds discussions with the
management on the subject in order to create awareness of the risks and to
take appropriate actions for reducing the impact and frequency of
occurrence of the risks.
The Audit Committee of the Company meets periodically to review and
recommend quarterly, half-yearly and annual financial statements of the
Company. The Committee also holds discussions with the internal auditors,
statutory auditors and the management on the matters relating to internal
controls, auditing and financial reporting. The Committee also reviews with
the statutory auditors, the scope and results of the audits.
8. HUMAN RESOURCES:
Human Capital
Nobel Prize-winning economist Gary S. Becker, who coined the term "human
capital," says that the basic resource in any company is the people. The
most successful companies will be those that manage human capital in the
most effective and efficient manner.
The present day economy has been titled as "Knowledge economy". In such an
economy, it is people who make all the difference. Talent occupies centre
stage in the Indian workplace. In view of this, managing and retaining
manpower is becoming crucial to an organization`s success. Therefore, your
Company endeavours to take a more strategic and supportive approach to
recruiting and retention to find and keep the new breed of evolving talent.
Recognition & Communication
Your Company has inculcated the best practices of Human Resources of Taj
Group to weight its Human resources capital. In line with the corporate
guidelines, the `STARS` -Special Thanks and Recognition System is being
followed to motivate the associates who excel in their service standards
and reward them accordingly. The TATA core values are imparted to
associates including new inductees, through the Tata Code of Conduct - TCOC
as a group policy along with the Sexual Harassment Redressal Policy - SHRP.
An Employee Satisfaction Survey is conducted at the end of every financial
year by an external organization, the Gallup Organization to provide
feedback to the Company on the satisfaction levels so as to enable the
Company to frame necessary measures to improve the work environment. Acts
of excellence are recognized by displaying the names of the employees on
the notice board.
A continuous dialogue between the management and the associates is promoted
through the monthly Town Hall meetings. A quarterly Newsletter is published
every year to share all the information and events at our hotel across
TAJGVK group of hotels. Customary meetings are organized with the
associates at department and hotel level.
It is indeed gratifying to note that Taj was awarded the Gallup "Great work
place" award recognising its extraordinary capability to create an engaged
work place ethnicity. It was among 25 distinguished organisations worldwide
and only two organisations in India to receive this prestigious award.
Social Activities
Each hotel`s Annual Day is celebrated every financial year at all
properties where all associates participate actively making this the most
happening event of the year. It is the consequence of various activities
conducted for the associates. Various cultural activities mark this
occasion and the service awards are presented for employee motivation which
is a very good way of employee recognition, awarding them in front of all
the associates makes them feel conceited and acts as catalyst for others to
do better and get recognized, this marks a healthy competition which
benefits both the organization as well as the associate`s. These awards
were conceptualized as an appreciation for employees, who have worked with
the hotel and hold an exceptional professional record.
The Joy at Work or "JAW" initiative is the other benefits that the
organization gives to its associates which are necessary for contravening
the day to day work activities and giving the associates the necessary
break. These activities are conducted for the associates as an avenue to
unwind from their busy work schedules.
1. Movie Screening
2. Employee Recognition
3. Medical facilities including a dental, yoga & an eye camp provided to
associates
4. Food Festival
5. Team outings for the Associate
6. A wide range of sports both indoor and outdoor, are held to keep the
employees bright which is essential for the work place culture.
The following YOA initiatives have been rolled out for the associates:
* Birthday Celebrations including cake and meal for the family.
* Total employee involvement initiatives.
* FTC medical insurance cover.
* Free stay for newlyweds and Retiring employees.
* Health Camp.
* Up gradation of Heart of the House facility.
* Learn at Taj: Children of the associates have been given scholarships to
3 Taj scholars on merit based in their age category
* Paternity leave: 1 week leave has been provided
* Vidya scheme: the associates of the hotels have been driven for computer
literacy.
* Bridging gaps
* House system.
* Partner of the month.
* Mid management holiday plan
* Hotel management scholarship.
The various initiatives and endeavours which have been talked about here
are part of a greater strategy set in place by the Company. The aim is to
bring the employees together in a cohesive structure that works efficiently
towards the larger ideals and goals of the Company, without losing sight of
the dynamics that exist at a more personal level. The professional
satisfaction quotient of an employee dictates his/her productive output,
which in turn enhances and contributes towards the larger goal of providing
the best customer service possible.
9. Corporate Social Responsibility (CSR)
Your company believes in undertaking for the society and play an active
role in contribution towards the society and taking the environmental and
social responsibility sincerely. It continues to be a member of the Tata
Council for Community Initiative (TCCI) which carries out social
development programs.
As an employee well being measure an "Aadhar Card Enrollment help Desk" was
organized for all Taj Associates (Taj Hyderabad Hotels) and their families
for a period of 4 days wherein 2652 applications were registered.
A New Year lunch is organized by each of the hotels in our group. The New
Year is ushered in with lunch served in Little Sisters of Poor home for the
aged, Ashray Akruthi School for the hearing impaired and Don Bosco
Navajeevan a shelter for the street children. Each of our hotels
distributes discard linen, uniforms, lost and found articles as per the
corporate directive to registered underprivileged organizations.
In alignment with the theme `Building livelihoods we have trained
adolescents / adults in F & B Service, Food Production, Housekeeping to
equip them with skills for developing in their future endeavours. Local
organisations like Don Bosco were instrumental in assisting our hotels in
acquiring youth to train. Training of specially challenged adolescents is a
continuous culture followed at our hotels which has been inspirational and
a challenge which can be cherished.
Support by purchasing products from different NGO`s to provide them
sustainable income was a good step taken in the right direction. Printing
of associate`s birthday cards from PAWMENCAP, a school for the specially
challenged, purchase of articles made by the physically challenged and
leprosy affected supported and promoted by MESH organization are gifts for
all the rewards and recognition initiatives for associates.
NGO`s are given a platform to showcase their products and sell them to
associates. Products included handmade jute products by women self-help
groups, products by weavers, organic bakery products etc. The sales give
them incredible support and enthusiasm. A blood donation camp was organized
on 1st October, World Voluntary Blood Donation Day which is used for
Thalesimic patients in particular. Associates from our hotels spend quality
time with children affected with cancer in the MNJ Cancer hospital
distributing colours, books and snacks which is enduring.
The total beneficiaries from Corporate Social Responsibility are 1695 and
there are 250 volunteers from the TAJGVK group and will continue to scale
many a heights in future.
The organisations/NGO`S who have been benefited from our CSR:
1. MESH
2. Kriti Foundation
3. Hyderabad Goes Green
4. Chitrika
5. Don Bosco Navajeevan
6. GMR Varalakshmi Foundation
7. Vocational Rehabilitation Center
8. Boys Town
9. Cancer Patients Aid Association
EARTH (Environment Awareness and Renewal at Taj Hotels):
Water and air, the two elements on which all life depends have become
garbage cans. This propels the need to view climate change as the greatest
challenge to face man and treated as a much bigger priority than it has
been in the past. As you are aware, your Company believes and inculcate by
spreading knowledge and through their practises in playing an important
role in preservation of the natural elements. World Environment Day on 5th
June is observed worldwide and at the Taj hotels it is the EARTH -
Environment Awareness and Renewal at Taj Hotels.
EACH year this day is of huge importance wherein activities involving
associates are intended and achievements by the hotels in areas like
reducing water consumption, saving electricity and waste management is
dealt with. Activities included an Eco-walk in which associates of our
hotels participated in solidarity for Our Planet Earth, sapling plantation,
pollution check for guests and associates vehicles, sales by organizations
who promote and make environment friendly products and to add a delicious
`Green Menu` at the staff cafeteria.
Your Company has attained a Green Globe Certification at the Silver level.
Green Globe is a global brand that includes programs for sustainability,
carbon neutrality and Benchmarking, Certification and Performance
improvement. The overall objective to is to target specific areas in
environment awareness like waste minimization, reuse, recycling; energy
efficiency, conservation, management; management of freshwater resources;
waste water management; hazardous substances management; transport; land-
use planning and management; involvement of staff, customers, communities
in environmental issues; design for sustainability and partnerships for
sustainable development. Over the next few years your Company aims to
upgrade the level of certification by improved performance in all the above
mentioned areas.
10. Outlook and the way forward:
The global recovery is threatened by intensifying strains in the euro area
and fragilities elsewhere. Financial conditions have deteriorated, growth
prospects have dimmed, and downside risks have escalated.
The most immediate policy challenge is to restore confidence and put an end
to the crisis in the euro area by supporting growth, while sustaining
adjustment, containing deleveraging, and providing more liquidity and
monetary accommodation. In other major advanced economies, the key policy
requirements are to address medium term fiscal imbalances and to repair and
reform financial systems, while sustaining the recovery. In emerging and
developing economies, near-term policy should focus on responding to
moderating domestic growth and to slowing external demand from advanced
economies.
The upcoming year is projected to be a better and brighter one for the
hospitality industry though, but the question is as to what will be the new
factors driving the market in 2012. The landscape is evolving quickly as
new technology demands that hotels become more social and engaging in their
marketing efforts, travelers are looking for the best value propositions,
and consumer demand is pushing for hotels to make concerted efforts on
property upgrades and improvements.
After years of delaying capital expenditures, hotel companies are betting
that now is the best opportunity to renovate their properties. In 2012-13,
we`ll see even more hotels renovating lobbies, restaurants, bars and
fitness centers, as well as renovating rooms. Hotel sales, an absolute
outcome of an improved market, will spur even more renovations. Further,
Revenue management will make the art of managing a hotel more of a science.
Revenue management has morphed from the days it was first introduced by the
airline industry in the 1970s to being a complex science today. Managers
have always lowered prices to stimulate sales when demand is weak and have
raised prices during peak demand periods. Hotels are now able to update
prices for all future arrival dates to match market demands each day, via
advanced market intelligence applications.
Another new and important trend that is gaining in importance in generating
revenues in the hotel industry is social networking. In the upcoming two
years, almost half of the travel industry will be using social media as a
way of generating revenue and bookings. Currently more than one-fifth (22
percent) use social media as a revenue generating tool with a further 27
percent planning to do so over the next five years. Plus, social media will
become more of a key component of Search Engine Results Page (SERP)
algorithms. Hotels can no longer afford to linger over adding social media
to their marketing mix. It`s now a necessary element of traffic-driving
success.
Further, the Indian Hotel and Tourism sector successfully attracted
Rs.4,041 crore foreign direct investment (FDI) during April 2011-January
2012. In the recent times, Centre has announced that the Hotel and Tourism
sector is a high priority sector. This highlights the confidence evinced in
the Indian hospitality sector with the aim to boost investments in the
sector and to develop job opportunities therefrom.
11. Cautionary Statement:
Statements in the Management Discussion and Analysis describing the
company`s 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 realised by the company. Actual results
could differ materially from those expressed or implied. Significant
factors that could make a difference to the company`s operations include
domestic and international economic conditions affecting demand, supply and
price conditions in the hospitality industry, changes in government
regulations, tax regimes and other statutes. |