The financial year 2019-20 was highly challenging. The turnover of the Company was '283 Crores as against ' 292 Crores in the previous year. The net profit after taxwas ' 65 Crores as against ' 55 Crores in the previous year. This increasewas mainly due to an exceptional item of ' 19 Crores arising out of reversal ofearlier provision for disputed service tax demands which were settled under the 'SabkaVishwas' scheme of the Government. Your Company had paid interim dividend of 18% duringthe year the same rate as in the year 2018-19.
The first quarter of 2019-20 was quite positive for us and the business grew but theeconomic slowdown in the second quarter put severe income constraints on middle-classIndians whose footfall is essential for the profitability of our business. We had put inextra marketing efforts to take advantage of the festival season in the third quarter butthe footfall was not as many as we had hoped for. The fourth quarter which is usually thelean season for us because of the school exams was hurt badly from the middle of February2020 as people began
to practice social distancing following the growing threat of the corona virusinfection (pandemic). We closed our parks around the middle of March 2020 consequent tothe directions of the State Governments. We are not sure about the date when Governmentswill give clearance for re-opening of amusement parks.
We enhanced our efforts to further strengthen the safety measures of all the parksfollowing a minor accident in June 2019 at the Bengaluru park. There were some highlyexaggerated - and untruthful - social media posts about this accident but thatfortunately had no noticeable impact on our visitor count.
We have in place a system of rigorous checking of rides and other equipment in theparks. Now the frequency of checks has increased significantly. We have issued detailedmanuals containing all the information and operating instructions of various rides andthese protocols are scrupulously followed. Every morning a
pre-opening check of each ride is done by the ride operator and augmented by randomchecks by a safety supervisor. There is also a monthly check where all park safetyaspects are reviewed. In addition yearly shutdown maintenance and non-destructive testsfor the integral parts of the rides are done. If the tests (scans) reveal any excessivewear and tear the ride is immediately shut down for maintenance. A reputable Germanagency (TUV) visits our parks every year and checks all the high-thrill rides on arotational basis. A well-equipped paramedic first-aid clinic is available in each parkwith ambulance facility and service of a Doctor in Bangalore and Hyderabad parks.
We have unfortunately lost business for almost the entire first quarter of the year2020-21 which means losing the largest share of the profits generated by our parks in anyyear. We are optimistic that post-lockdown the public sentiments will improve to restorefootfalls. When people come to play at any of the Wonderla parks they will be protectedby every measure possible with special attention to their health and safety concernsarising out of the pandemic.
In the meantime the management is doing everything under their control to save costsby implementing several measures. These measures include re-negotiating annual maintenancecontracts digital promotion of Park attractions implementation of alternate revenuestreams etc. As your Company was following a very conservative policy on preserving fundsfor growth and expansion it has been able to survive without additional assistance fromBanks even during this lockdown period.
Our major planned investment is the upcoming Chennai park. Following the lockdown theconstruction work at the site was stopped. Once the lockdown is lifted we shall resumethe work.
I take this opportunity to thank the Tamil Nadu Government for allowing exemption toWonderla from the 10% Local Body Tax (LBT) on ticket revenue for a period of five yearsfrom the date of commencement of commercial operations or September 30 2021 whichever isearlier. We have to renegotiate the exemption period in view of the delay in constructionwork due to lockdown.
People need recreation and the world- class amusement parks of Wonderla would remainhighly desirable destinations for them. We shall continue to strategise and add value toour offerings and keep a tight rein on operational costs to navigate this very difficultperiod.
On behalf of the Board of Directors and the Wonderla team I thank our shareholderspatrons investors regulators bankers and vendors for their support and faith in us. Iam grateful for the dedicated efforts made by each employee of the Company.
Details of the Company's financial performance for 2019-20 and growth strategies wouldbe presented by Mr. George Joseph Joint Managing Director.
|Best Wishes |
|M. Ramachandran |