MIRA
INFORM REPORT
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Report Date : |
26.10.2007 |
IDENTIFICATION DETAILS
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Name : |
TAJGVK HOTELS AND RESORTS LIMITED |
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Registered Office : |
Taj Krishna, Road No.1, |
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
02.02.1995 |
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Com. Reg. No.: |
19349 |
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CIN No.: [Company
Identification No.] |
L40109AP1995PLC019349 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
HYDT00765C |
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Legal Form : |
Public limited liability company. Company’s Shares are listed on the
Stock Exchange. |
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Line of Business : |
Hotel Business |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reported company having fine track. It
is a Joint venture of Tata Group and GVK Group, both prominent industrial
houses. Available information indicates high financial responsibility of the
company. Trade relations are fair. Payments are usually correct and as per
commitments. The company is doing well. It can be considered good for any normal business dealings. It can be regarded as a promising business partner in a medium to
long-run. |
LOCATIONS
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Registered Office : |
Taj Krishna, Road No.1, |
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Tel. No.: |
91-40-66662323 |
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Fax No.: |
91-40-66625364 |
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E-Mail : |
DIRECTORS
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Name : |
Mr. G V Krishna Reddy |
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Designation : |
Executive Chairman |
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Date of Birth/Age : |
70 Years |
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Qualification : |
B. A. |
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Date of Appointment : |
43 Years |
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Previous Employment : |
GVK Industries Limited |
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Name : |
Mr. G Indira Krishna Reddy |
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Designation : |
Managing Director |
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Date of Birth/Age : |
63 Years |
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Qualification : |
B. Sc. |
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Date of Appointment : |
22 Years |
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Previous Employment : |
Novopan Industries Limited |
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Name : |
Ms. Shalini Bhupal |
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Designation : |
Executive Director |
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Date of Birth/Age : |
44 Years |
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Qualification : |
B. A. |
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Date of Appointment : |
16 Years |
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Previous Employment : |
Orbit Travels & Tours Private Limited |
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Name : |
Dr. Raymond N Bickson |
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Designation : |
Director |
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Name : |
Mr. Anil P Goel |
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Designation : |
Director |
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Date of Birth/Age : |
20.05.1957 |
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Qualification : |
C. A. |
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Date of Appointment : |
23.10.2004 |
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Previous Employment : |
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Name : |
Mr. Ajoy Kumar Misra |
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Designation : |
Director |
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Date of Birth/Age : |
25.04.1957 |
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Qualification : |
B. Tech, MBA |
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Date of Appointment : |
23.04.2007 |
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Previous Employment : |
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Name : |
Mr. Somanadri Bhupal |
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Designation : |
Director |
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Name : |
Mr. N Anil Kumar Reddy |
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Designation : |
Director |
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Name : |
Mr. G V Sanjay Reddy |
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Designation : |
Director |
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Name : |
Dr. Abid Hussain |
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Designation : |
Director |
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Name : |
Mr. D R Kaarthikeyan |
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Designation : |
Director |
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Date of Birth/Age : |
02.10.1939 |
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Qualification : |
B. Sc., BL., IPS |
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Date of Appointment : |
27.04.2001 |
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Previous Employment : |
Magus Media Private Limited |
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Name : |
Mr. C B Mouli |
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Designation : |
Director |
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Date of Birth/Age : |
13.08.1946 |
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Qualification : |
B. Sc., L.LB, F.C.A. |
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Previous Employment : |
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Name : |
Mr. N K Singh |
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Designation : |
Director |
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Date of Birth/Age : |
27.01.1941 |
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Qualification : |
M. A. Economics |
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Date of Appointment : |
26.04.2005 |
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Name : |
Mr. T R Prasad |
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Designation : |
Director |
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Name : |
Dr. A Ramakrishna |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. S B Kamath |
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Designation : |
Financial Controller & Company Secretary |
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Audit Committee : |
Mr. N Anil Kumar Reddy : Chairman |
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Dr. Raymond N
Bickson |
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Mr. Anil P Goel |
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Mr. D R
Kaarthikeyan |
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Dr. A
Ramakrishna |
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Mr. C B Mouli |
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Remuneration Committee : |
Dr A Ramakrishna : Chairman |
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Mr. N Anil Kumar
Reddy |
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Mr. C B Mouli |
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Shareholders' / Investors' Grievances Committee : |
Mr. N Anil Kumar Reddy : Chairman |
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Mr. G Indira Krishna Reddy |
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Mr. Anil P Goel |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
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Names of Shareholders |
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Percentage of
Holding |
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Promoters |
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74.64 % |
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FIs, Banks and MF |
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10.33 % |
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Others |
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15.03 % |
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Total |
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100.00
% |
BUSINESS DETAILS
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Line of Business : |
Hotel Business |
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Products : |
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GENERAL INFORMATION
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No. of Employees : |
1600 |
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Bankers : |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Statutory Auditors Brahmayya & Company Flat No.403 & 404, Golden Green Apartments, Irrum Manzil Colony, Internal Auditors A F Ferguson & Company Coromandel House, 1-2-10, |
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Joint Venture : |
The Indian Motels Company Limited |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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170500000 |
Equity Shares |
Rs. 2/- each |
Rs. 341.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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62701495 |
Equity Shares |
Rs. 2/- each |
Rs. 125.403
Millions |
FINANCIAL DATA
[all figures are in
Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
125.403 |
125.403 |
125.403 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1734.422 |
1390.781 |
1071.286 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1859.825 |
1516.184 |
1196.689 |
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LOAN FUNDS |
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1] Secured Loans |
683.936 |
706.250 |
291.505 |
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2] Unsecured Loans |
50.000 |
150.000 |
478.643 |
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TOTAL BORROWING |
733.936 |
856.250 |
770.148 |
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DEFERRED TAX LIABILITIES |
80.515 |
64.970 |
46.470 |
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TOTAL |
2674.276 |
2437.404 |
2013.307 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
1936.774 |
1931.950 |
1109.060 |
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Capital work-in-progress |
539.012 |
207.359 |
670.808 |
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Expenditure during construction pending allocation |
221.232 |
0.000 |
0.000 |
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DEFERREX TAX ASSETS |
0.000 |
139.589 |
139.589 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
30.694
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25.412 |
16.117 |
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Sundry Debtors |
60.145
|
73.469 |
36.004 |
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Cash & Bank Balances |
252.563
|
139.986 |
11.540 |
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Other Current Assets |
0.000
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0.000 |
0.000 |
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Loans & Advances |
275.790
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388.593 |
331.522 |
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Total
Current Assets |
619.192
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627.460 |
395.183 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
402.090
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351.925 |
258.847 |
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Provisions |
267.178
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155.160 |
93.108 |
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Total
Current Liabilities |
669.268
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507.085 |
351.955 |
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Net Current Assets |
[50.076]
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120.375 |
43.228 |
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MISCELLANEOUS EXPENSES |
27.334 |
38.131 |
50.622 |
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TOTAL |
2674.276 |
2437.404 |
2013.307 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Guest Accommodation, Restaurants, Bars, Banquets and other services
etc. |
2429.454 |
1889.172 |
1154.729 |
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Other Income |
12.772 |
4.347 |
6.277 |
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Total Income |
2442.226 |
1893.519 |
1161.006 |
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Profit/(Loss) Before Tax |
1007.876 |
699.486 |
357.176 |
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Provision for Taxation |
364.664 |
237.000 |
136.306 |
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Profit/(Loss) After Tax |
643.212 |
462.486 |
220.870 |
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Earnings in Foreign Currency : |
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Export Earnings |
1007.021 |
786.764 |
473.326 |
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Total Earnings |
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Expenditures : |
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Consumption of
provisions, stores & wines |
199.616 |
152.847 |
104.268 |
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Personnel Cost |
319.403 |
270.896 |
164.498 |
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Oilier Operating
Expenses |
265.320 |
226.045 |
196.417 |
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Interest |
31.389 |
39.688 |
13.400 |
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Other Expenses |
506.403 |
395.639 |
256.687 |
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Depreciation |
112.219 |
108.917 |
68.561 |
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Total Expenditure |
1434.350 |
1194.032 |
803.831 |
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QUARTERLY RESULTS
|
PARTICULARS |
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|
30.06.2007 |
|
Type |
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1st
Quarter |
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Sales Turnover |
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|
565.300
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Other Income |
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|
6.800
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Total Income |
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|
572.100
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Total Expediture |
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305.900
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Operating Profit |
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266.200
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Interest |
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|
7.200
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Gross Profit |
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|
259.000
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Depreciation |
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30.100
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Tax |
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|
75.900
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Reported PAT |
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|
150.800
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KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Debt-Equity Ratio |
0.47 |
0.60 |
0.47 |
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Long Term Debt-Equity Ratio |
0.44 |
0.56 |
0.43 |
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Current Ratio |
0.88 |
0.94 |
0.75 |
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TURNOVER RATIOS |
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Fixed Assets |
0.95 |
0.91 |
0.73 |
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Inventory |
86.30 |
91.05 |
68.53 |
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Debtors |
36.37 |
34.51 |
27.14 |
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Interest Cover Ratio |
33.10 |
18.62 |
27.66 |
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Operating Profit Margin(%) |
47.40 |
44.89 |
38.03 |
|
Profit Before Interest And Tax Margin(%) |
42.78 |
39.13 |
32.09 |
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Cash Profit Margin(%) |
31.09 |
30.25 |
25.06 |
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Adjusted Net Profit Margin(%) |
26.48 |
24.48 |
19.13 |
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Return On Capital Employed(%) |
42.41 |
34.78 |
23.35 |
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Return On Net Worth(%) |
38.10 |
34.10 |
19.75 |
LOCAL AGENCY FURTHER INFORMATION
FIXED ASSETS
- Land and Land Scaping
- Buildings
- Plant and Machinery
- Furniture and Fixture
- Vehicles
OPERATIONS/PERFORMANCE
During the previous year, the Indian Economy, as expected, grew stronger, with
the GDP growth of 9.4% with an average growth of 8.6% in the last three years. The
services sector continues to maintain impressive growth and has recorded, in
the three years, a growth rate of 9.6%, 9.8% and 11.2% respectively.
The hotel industry is witnessing a sustained growth with a
healthy performance, riding on a booming economy, with strong average room
rates and occupancy rates in the year 2006/07, resulting in surge in business.
The industry is also enjoying the benefits of mismatch
between the demand and the supply.
During the year 2006/07, the Company has achieved a 29% increase in turnover at
Rs.2442.200 Millions compared to Rs.1893.500 Millions of previous year.
The gross operating profit (PBDIT) was higher by 36% at
Rs.1151.500 Millions from the previous year's Rs.848.100 Millions and the net
profit was higher by 39% in the current year at Rs.643.200 Millions compared to
Rs.462.500 Millions of the previous year.
EXPORTS/FOREIGN EXCHANGE EARNINGS
The
company's foreign exchange earnings during the year was Rs 1007 Millions as
compared to Rs 786.700 Millions during the previous year. The company was
accorded status of Star Export House by Ministry of Commerce & Industry,
Government of India.
CHENNAI HOTEL PROJECT
The
merger of Sri Tripurasundari Hotels Limited (STHL) with the Company was
successfully completed during the year. The Hon'ble High Court of Andhra
Pradesh had vide its Order dated 08.12.2006, approved the merger, with effect
from 01.04.2006. The Chennai Project, which was being executed by STHL is
currently being executed by the Company.
The
Company is in the process of completing the Hotel Project at Chennai and work
is progressing swiftly. The Hotel is expected to commence operations in
2007.
MANAGEMENT DISCUSSION AND ANALYSIS
Economic Overview:
The Indian
economy witnessed rapid growth based on strong macroeconomic fundamentals
during 2006-07, for the fourth year in succession. The GDP growth of 9.4%
during 2006-07 was driven by the continued momentum in the services and the
manufacturing sectors, both of which are expected to record double-digit growth.
The services sector, with a contribution of 61.9% of the country's GDP has
exhibited a vibrant performance during the current fiscal and continued to be
the key driver of economic activity. While growth rate in manufacturing sector
has accelerated to 12.3%, the services sector has recorded growth rate of 11%
during 2006-07. Among the three sub-sectors of services, trade, hotels,
transport and communication services' has continued to boost the sector by
growing at double-digit rates for the fourth successive year.
Impressive
progress in information technology (IT) and IT-enabled services, both rail and
road traffic, and fast addition to existing stock of telephone connections,
particularly mobiles, played a key role in such growth. Financial services
(comprising banking, insurance, real estate and business services), grew by 11.1%
during 2006-07 compared to previous year's 10.9% maintaining the
momentum.
The Indian
economy is in a stronger position than ever before and has sustained the growth
momentum resulting in the rise in income levels thereby showing a healthy
growth in the number of households in the middle income and higher-income
categories. After three years of near double-digit growth, the Indian economy
is showing signs of facing an inflationary spiral.
India's exports
for the period April-March 2007 was USD 124.6 billion as against USD 100.6
billion during the same period last year, indicating a growth of 23.88%,
according to the provisional data available from Directorate General of
Commercial Intelligence & Statistics (DGCI&S).
Buoyancy of
exports was driven by the resurgence in the manufacturing sector and sustained
demand from major trading partners. The total imports during April-March, 2007
was USD 181.3 billion which was higher than previous year's imports at USD
140.2 billion. During FY 2006-07, foreign exchange reserves increased by USD
47.6 billion to USD 199.2 billion from USD 151.6 billion at end-March
2006.
Capital flows
into
Total FDI inflows
for April-December 2006 stood at USD 9.3 billion, as compared to USD 3.5
billion in the corresponding period last fiscal. It is estimated that the FDI
for 2006-07 would be above USD 10 billion including profits reinvested by
foreign players in Indian operations. According to certain estimates,
Hospitality & Tourism industry
overview:
According to
World Tourism Organisation (WTO),
Driven by a
surge in business traveller arrivals and a soaring interest in
The World
Travel and Tourism Council (WTTC) has named
According to
WTTC, the travel industry in
The Indian
hotel industry witnessed strong average room rates (ARR) and occupancy rates in
the year under review. The performance of the Indian hotel industry remained
strong in 2006 due to the fact that, in most of the major cities, a huge
demand-supply gap continued, which resulted in an excellent growth in
occupancies and ARRs. The growth in the economy has resulted in higher business
travel, and the initiatives taken by the Government to promote tourism have
also increased the leisure travel. The economy is expected to grow at a good
pace and as a result, business travel is expected to increase. With new room
capacity, the companies will be able to cater to the strong inflow of
tourists.
The strong
performance in tourist arrivals can be attributed to a strong sense of business
and investment confidence in
Market Overview:
The
In addition to
being a major IT hub in
With the brand
new Airport expected to be commissioned in 2008 and development of FabCity (for
semiconductors), Biotech city (for biotech research), substantial traffic for
Hotels is expected to be generated over the coming years. With its dominant
position in the five star segments, the company's
With its close proximity to four key States of Punjab/Haryana/Himachal Pradesh
and
With several IT
hubs coming up in nearby clusters, the city is expected to continue reporting
increased traffic for hotels. As also, the city is emerging as a conference
centre with increased business/Industrial activity in the Northern
states.
During the peak
season, expatriate Indians/NRI's visit this region and the Food and Beverages
segment is also expected to buoyant.
With first
mover advantage, the company's Chandigarh Five star property is expected to do
well in the coming years.
Outlook:
The WTO forecasts a 4.1% growth in global tourist arrivals for 2007 as well.
South Asia, with
Arrivals to
South Asia are expected to grow at 6.2% between 1995-2020, just below the rest
of Asia at 6.5% and the
According to
government estimates, India needs about 80,000 more rooms in all categories
over the next two to three years at an estimated cost of about USD 8 to 9
billion, out of which about 20% should be in the premium segment.
One of the
major reasons for the demand for hotel rooms is the underlying boom in the
economy, particularly the growth in the information technology enabled services
and information technology industries. Rising stock indices and new business
opportunities are also attracting foreign institutional investors, funds,
equity and venture capitalists. The overall growth outlook appears to be very
buoyant. Growth in demand in 2005, 2006 and 2007 is expected to be 20 per cent
year on year. This can be partly attributed to the growth of the services
sector in the last few years, particularly information technology, IT-enabled
services, retailing, insurance, and banking.
The hotel sector has also got a fillip from the entry of low cost airlines and
the open skies policy which has led to a dramatic increase in commercial
flights into and out of
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.39.38 |
|
|
1 |
Rs.80.96 |
|
Euro |
1 |
Rs.56.81 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|