Reliable Ventures India Ltd Management Discussions

Company Approach to the Business

With a consistently growing middle class and increasing disposable income, the tourism and hospitality sector wasexpected to witness a healthy growth and account for 7.5 per cent of countrys GDP but due to the effect of Coronapandemic the expectation did not show requisite growth as expected. The hospitality sector encompasses a wide varietyof activities within the services sector and is a major job provider both direct and indirectly. The sector attracts the mostFDI (Foreign Direct Investment) inflow and is the most important net foreign exchange earners for the country. It isexpectedthat the said growthexpectation wouldmaterialize soonafterthe pandemic is over.

Having weathered many adverse situations in the past three years to post consistent growth, the prevailing sentiment inthe Indian hospitality industry is of confidence. The industry stakeholders feel that they will be able to maintain thegrowth trend. The reason for this confidence emanates not very much on the high expectations on inbound visitors,butonnumerousdomesticfactorsincludingtheemergenceofaninspirationalyoungmillennialtravelers,revivalincorporatean dbusinesstravelin thecountry, andrapidly evolvingconnectivityfactorinthecountry.

Thecompanyistakingforwarditsobj ectivetobethebestmarketleader,hasstrengtheneditsbaseinthefiscalyear2012-2013. Noor-Us-Sabah Palace is the first preferred destination for the High end travelers visiting Bhopal. The rooms onoffer are far more superior to any other existing hotel rooms in the city. Company is also operational with two stores innameofWonder Breadoutlets,whichofferswiderange ofbakeryandconfectionaryproductsat averynominalprice.

Employees are one of the key assets to the company and efforts are made on regular basis to improve the efficiency oftheemployeesbytrainings,providingthemwithbetterworkingconditionsandkeepingthemmotivatedatalltimesalongwithappreciations.Regularteammeetingsareheldtoimprovecommunicationandinteractionsbetweentheemployees.However,duetotheeffectcoronadiseasetheoperationofthehotelundertakingofthecompanyremainedclosedandthecompanywascompelledtolayoffagoodnumberofitsemployeesandnowitisengagedinfulfillthevacancysocaused.

Qualitv Management

Hospitality services quality is one of the most important parameters in assessing hospitality service. Quality control isdirectly proportional to guest satisfaction. Better the quality of services, higher the guest satisfaction, and vice-versa. AtNoor-Us-Sabah Palace strict quality parameters have been laid and practiced to adhere to the hotel values, which resultsinquality servicetocustomers and highersatisfactionlevel.

Toremainatparwithcitycompset,hotelhastargetedtorenovateitsrooms,someofthemarealreadyrenovatedincludingthe upgrading of the F&B outlets. The various initiatives listed include- standardization of recipes and focus on bestquality food at a reasonable pricing. Banqueting has been a major key player for Noor-Us-Sabah palace as the hotel hasbeenapreferreddestinationforall highendweddings and conferencehappeninginthe city.

Standard Operating Procedures (SOPs) are being followed at all operational levels for implementation & for strictadherence which would be constantly reviewed to adapt to the changing service trends of hotel industry. The majorinitiative in Environmental practices includes Ban of Polyphone bags, Conversion to LED lamps, Water conservation atalllevels, Massive Treeplantation,Garbage DisposalManagement etc.

Internal Control Systems:

Total transparency in all transactions ismaintained with allstatuary licensing and dues to the State and centralGovemment which have been updated & are paid on time. All necessary controls, financial checks and otherwise as perstatuary requirements as also towards making the company a highly profitable venture are in place. Internal controls asregards operations aimed at ensuring that the expenditure is in line with industry norms. Proper accounting proceduresare being strictly adhered to. Reduction in cost will be a major focus area for next FY

Opportunities

The Corporate and Conference segment along with foreign tourist segment is expected to show a decent growth.Economic projections appear to indicate towards a Major Boom for the Hospitality Industry for the coming season. TheBhopal Airport is now an International Airport, and this is resulting in increase in number of flights. However, due tolack of International flights at present the actual impact is not felt. Technology will be the ruling factor in the years tocome sinceitishelpinghospitalitybusinessesmeetguestexpectationsand outpacethecompetition.

Threats

Opening of competition Hotel with 100 room inventory, effect of Corona epidemic causing some recession in theeconomyhasputsomepressureontheHoteloccupancyaswellasfoodbusiness.RealEstateDevelopershavestartedtoshow interest in Bhopal. Current market players in Hospitality Industry in the city also have comprehended enough partof the market and thus have either made additions to their current setup or have made provisions to do the same in thecurrent financial year. This again could make a dent in our market share. With the advent of new players in the market,thecompetitionisgrowingtougher bytheday.

Cityfacesanissueofmanpowerinhotels;almost80%ofthehotelstaffcomesfromotherpartsofthecountry.Theonlyinstitute that city can boast of is the IHM Bhopal. City has immediate requirement of trained manpower, and this maycome as ahurdleinthepath ofcompletingthe addoninventorybyhotels withtheirtargetinthegiven time span.

With the increased fuel prices, corporate houses these days are focusing on reducing travel and boarding /lodgingexpensestherebyadverselyaffectingthehotelsrevenue.Somecorporatehavegonestepfurtherandbought/hired/runn ing guesthouses for their travelling executives & their offices in the city generally have a conferenceroomattachedtotakecareof routine and otherweekly/monthlyconferencing.

Riskand Concerns:

ThecompanyishopefulthatthecurrentrecessionandadverseeffectofCoronaEpidemicinthemarketwillcontinuefora few more months. However, we do not foresee any potential risk to Hospitality Industry for very longer time. There isdefinitely a concern about the state Government not doing enough on infrastructure development so as to ease inflow oftouristsand corporate.

Other Disclosures:

The Hotel shall strive tobe the number one Hotel in the city.It shall work to wards socio-economic growth, and in order to achieve this very goal shall focus on training the existing man power in accordance with the customer requirementsand perceptions.

The extended lease term of leasehold land with respect to hotel segment has expired as on July 7, .2022, building structure and assets affixed thereof ( All immovable Assets) situated on the said land is owned by the Company and the company is under negotiation with the lessor to transfer the said building structure and assets affixed for a consideration. Since the negotiation is, still under process, no provision has been provided by the company for any deviation/ devaluation in the value of the said fixed assets and the loss is understood to that extent which is still to be ascertained.

Human Resources Development:

Led with the realization of th efact that continuous up-gradation of skills and service delivery systems/inputs go al ong with to make a decisive difference in the hotel industry ,as amatter of policy, continues to invest in up-gradation of the quality of its human resources and lays emphasis on efforts to tone up skills of and service delivery byitsexistingman power.

Company is not far behind the industry standards, in the matter of employees benefits and compensation and with the growth of the company it will see that the benefits and compensation package scontinue to remain tailored to the industry norms enabling it to hire and retain skilled and professional manpower.

Industrial relations scenario in the company throughout the year remained cordial. The employees remained committed to higher qualitative service and productivity. The management too on its part played its role in maintaining andpromotingharmoniousr elations.