Ladies and Gentlemen,
I have great pleasure in writing to you all shareholders on the performance of the
company and the general economic environment in the world particularly after the
unprecedented impact of COVID -19 pandemic on businesses and on human lives, which was
never witnessed in recent times.
The company's operations are in travel and tourism industry and the hospitality
industry has been among the sectors hit hardest by the Corona Virus pandemic, with the
resulting lockdowns and economic slowdown decimating revenues, profits and incurred cash
losses to meet the obligations of the company.
General Economic Environment
The Indian economy witnessed a sharp drop in GDP following the impact of COVID —
19 induced lockdown during first half of FY21, showed moderate signs of improvement in the
second half of FY 21. The GST collections also got robust from November 2020 onwards.
However, the second wave that started in late March 2021 has come in the way of further
recovery necessitating deployment of resources to protect the lives, safety, and basic
needs of a large vulnerable sections of society besides augmenting healthcare
infrastructure that is needed to fight the second wave.
There have been lock downs by all the States across the country since April 2021,
causing shutdown of manufacturing facilities as well as off-line trade in most
geographies. Following the drop in cases and mass scale vaccination initiatives, the
lockdown is being relaxed in stages in many geographies since mid-June 2021.
The silver lining is that following a bountiful monsoon in FY 21, the monsoon during FY
22 is also expected to be normal. Unlike the Q1 of the previous year, the GST collections
during the first quarter of this fiscal year have been sizable indicative of a reasonable
state of activity in the overall economy.
Notwithstanding the huge spends on COVID relief packages, the Union Government kept
investing in various infrastructure projects and schemes envisaged in the Union Budget for
FY 20-21 and it is expected that the planned investments outlined in the FY 22 budget will
also continue. This can create employment as well as income generation that can boost
consumption especially in the rural economy in the coming months.
Notwithstanding the positives outlined above, there does exist a fair probability of
conditions remaining uncertain over a longer duration as the pandemic is yet to abate,
both globally and locally, with the emergence of newer and newer strains. The second wave
has impacted every other family forcing sizable spends on healthcare and also leading to a
mindset to preserve cash for any future emergency. Large scale deficit financing
necessitated by the pandemic can have inflationary effects affecting disposable income. It
is expected that the ever-resilient Indians will fight their way up to restore growth.
Indian Hospitality Sector
The Indian hotel industry has taken a hit of over Rs 1.30 lakh crore in revenue for the
fiscal year 2020-21 due to the impact of the COVID-19 pandemic, (Source: As per the
Federation of Hotel & Restaurant Associations of India (FHRAI reports). The apex
industry body submitted a representation to the Hon'ble Prime Minister and a few other
Union Ministers urging immediate support from the government to save the hospitality
sector from imminent collapse and has requested for several fiscal measures for this.
As pr the FHRAI reports, the Indian hotel industry's total revenue in FY2019-20 stood
at Rs.1.82 lakh crore and revenues generated by the Industry during the FY2020-21 was
approximately 75 per cent lower than the previous year revenues, resulting in a revenue
hit of around Rs.1.30 lakh crore. The pandemic left many hotels and restaurants to close
their businesses, because this is labour intensive industry and has large volume of fixed
cost components, which many small time entrepreneurs find it difficult to sustain in the
long run. The industry witnessed closure of many businesses and rise in nonperforming
assets (NPAs).
The industry per-se since March 2020, has been struggling to manage its statutory and
revenue / capital expenditure obligations, repayment of loans with interest which is not
just difficult but impossible under a more severe economic environment due to pandemic.
The Government of India announced Emergency Credit Line Guarantee Scheme (ECLGS) which
helped some companies to raise money to meet the obligations and also the loan repayment
moratorium announced by Reserve Bank of India in March 2020 for a period of 6 months i.e.
March to August 2020 also helped the company. The Industry association has also requested
the Government that the sector is very much in need to waive off property tax, water
charges, electricity charges and excise license fees for the lockdown period and some
State Government(s) come forward and waived for the lockdwon period.
When the second wave of the virus was at its peak in April and May 2021, the Federation
of Hotel and Restaurant Associations of India (FHRAI), the apex industry body, sought
immediate help from Hon'ble Prime Minister for government aid to save the hospitality
sector from imminent collapse.
With the above background, I shall proceed to briefly cover the highlights of FY 21 and
the steps being taken by your Company to stay stronger in these turbulent times.
Financial Year 2020-21
Your company had to deal with the following major challenges during FY 20-21.
a. Lockdown that started during the second fortnight of March 2020 continued upto end
Q1 of FY 21
b. The company operated with only Taj Deccan during Q1 of FY21 and gradually opened Taj
Chandigarh in July, Taj Club House in September, Taj Krishna & Vivanta Begumpet in
November 2020 and Taj Banjara in December 2020.
c. The company took various cost saving initiatives during the closed down period of
the hotels and normalized the operations gradually.
Standalone Revenues
Total income of the company for the year ended 31st March, 2021 is Rs.96.82 Crore as
compared to Rs.313.84 Crore of the previous year. EBITDA was Rs.0.47 Crore as against
Rs.75.35 Crore and Loss After Tax of Rs.26.13 Crore as compared to Profit After Tax of
Rs.23.31 Crore of the previous year. The company achieved an overall occupancy of 40% as
against 65% with an ADR of Rs. 3980 as against Rs. 5481.
Consolidated Revenues
Total income of the company for the year ended 31st March, 2021 is Rs.96.82 Crore as
compared to Rs.313.84 Crore of the previous year. The company reported a Loss After Tax of
Rs.39.65 Crore as compared to Profit After Tax of Rs.27.56 Crore of the previous year.
Dividend
Due to the current pandemic times and keeping in view the company philosophy to
conserve cash, the company has not declared any dividend for the FY 2020-21.
Finances
On a stand-alone basis, your Company is having a debt of Rs. 178.52 Crore as against
Rs. 165.62 Crore in the previous year. The company repaid Rs. 24.38 Crore during the year
under review and also borrowed Rs. 33.25 Crore under ECLGS scheme of Government of India.
Acknowledgments
I want to extend my heartfelt gratitude to all the employees ofTAJGVK who dedicate
their best to the organization and I count on continued support of Central and State
Governments, Bankers, and all other stakeholders who reposed confidence in the company in
a sustainable manner during these challenging times and look forward to engaging with them
more intensely.
Dr. G V K Reddy
Non Executive Chairman