TAJGVK HOTELS AND RESORTS LIMITED
ANNUAL REPORT 2009-2010
Ladies and Gentlemen,
It gives me great pleasure in welcoming you all to the 15th Annual General
Meeting of your Company.
The Audited Accounts for the Financial Year 2009-10 along with the
Directors' Report are already with you and with your permission, I will
take it as read.
India's diverse economy encompasses traditional village farming, modern
agriculture, handicrafts, a wide range of modern industries, and a
multitude of services. Slightly more than half of the work force is in
agriculture, but services are the major source of economic growth,
accounting for more than half of India's output, with less than one-third
of its labour force. India has capitalized on its large numbers of well-
educated people, skilled in the English language, to become a major
exporter of software services and software workers. An industrial slowdown
early in 2008, fol lowed by the global financial crisis, contributed to the
slowdown in annual GDP growth to 6.1% in 2009.
However, India escaped the brunt of the global financial crisis because of
cautious banking policies and a relatively low dependence on exports for
growth. Domestic demand, driven by purchases of consumer durables and
automobiles, has re-emerged as a key driver of the economy, as exports have
fallen since the global crisis started. The government has expressed a
commitment to fiscal stimulus in 2010, and to deficit reduction the
following two years. It has proposed limited privatization of government-
owned industries, in part to offset the deficit. The economy is predicted
to grow at 8.5% in 2010-11 as against the 7% growth witnessed in the
previous financial year.
Hospitality & Tourism Industry:
India appears among the top 5 in the best country brand for authenticity
and art & culture, and the fourth best new country for business. India made
it to the list of 'rising stars' or the countries that are likely to become
major tourist destinations in the next five years, led by the United Arab
Emirates, China, and Vietnam.
The Government of India promoted India as a safe tourist destination and
undertook various measures, such as stepping up vigilance in key cities and
at historically important tourist sites. It also deployed increased
manpower and resources for improving security checks at key airports and
railway stations. According to the latest Tourism Satellite Accounting
(TSA) research, released by the World Travel and Tourism Council (WTTC),
the demand for travel and tourism in India is expected to grow by 8.2 per
cent between 2010 and 2019 and will place India at the third position in
Your Company weathered the global slowdown and the aftermath of the terror
attacks in Mumbai and reported satisfactory results.
Your company recorded a turnover of Rs.229.25 crores which is 4% lower than
that of previous year's figure of Rs.238.21 crones. The PBDIT of Rs.86.74
crores was 14% lower than the previous year figure of Rs.101.46 crores.The
net profit after taxes at Rs.36.27 crores, saw a de-growth of 31% as
compared to Rs.52.76 crores in the previous year.
Your board of directors has recommended a dividend of 100% (100% in
previous year) for the financial year 2009-2010, considering the remarkable
recovery in business in the second half of the 2009-10 fiscal as well as
the future outlook for the economy and the hospitality industry as such.
Expansion plans at Hyderabad:
The civil works and interiors for the new five star hotel project site at
Begumpet, Hyderabad is progressing as per schedule. As per asset light
strategy of the company, the owner of land has put up the structure and the
company is doing the interiors. The project would consist of around 189
rooms with cost of interiors and equipments estimated at around Rs.80
crones, and is expected to be operational by 2011.
A top end branded retail arcade atTaj Krishna has already been completed
with super luxury brands like Rolex, Burberry, Canali, Paul & Shark,
Versace occupying the same. Further, the Company is also planning to
construct service apartments, a spa and an additional car parking facility
at the existing premises of Taj Krishna.
The company has been allotted around 6 acres of land at Yelahanka near
Bengaluru for hotel projects.The Company is also planning to enter the
value for money segment through the 'Ginger' brand in Andhra Pradesh.
The first 'Ginger' hotel in Hyderabad planned near the Hardware Park close
to the Shamshabad Airport is expected to be completed over the next two
The past year and a half has been quite turbulent for the Indian economy.
The economic outlook for the global economy in general and India in
particular seemed extremely bleak.
However, the second half year of the 2009-10 fiscal has seen an upturn.The
stimulus program put in place by the government involved reducing interest
rates, offering tax breaks, and increased spending, and has been very
successful in guiding the Indian economy through a global downturn.The
Sensex has rebounded from a low of 8,000 to its current level of about
18000 within the last one year. Companies are hiring again and salaries are
on the rise once again. Consumer confidence is strong and discretionary
spending is exhibiting healthy increases.
The amount of new supply proposed in many markets remains an area of
concern, especially as numerous projects that were proposed during the
heady days see completion and open in the next one year.Though there wil I
be pressure on occupancy in some markets in the near future, in the long
term, however, the demand-supply gap in India is very real and there is
need for more hotels in most cities.Tourism will also be boosted by sports
events such as the Commonwealth Games, The ICC World Cup Cricket and
Formula One over the next one year. Barring unforeseen circumstances, the
Company's immediate prospects appear to be promising and the long term
I take this opportunity to thank my colleagues on the board for their
whole-hearted support, our employees for their dedication and you our
shareholders for the confidence reposed in the company. I am confident that
with your continued support, the company will scale greater heights in the
days to come.
Dr. G.V. Krishna Reddy