MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Industry's Structure and Developments

In the last few years, the structure of the industry has been changing and the development have been phenomenal especially on the mid size segment, hotels focusing more on the banqueting & conferencing and of course mushrooming of International & Domestic branded hotel even in the II tier and even III tier cities of India. This was significantly seen all over India and even more in Gujarat in the year 2014-15.

Opportunities & Threats

The budget hotel concepts and Service Apartments are briskly taking the place of established hotels. The advent of 'Room Aggregators & On-Line Travel Agents has been a bane as well as boon for the industry. The new trends have given rise to competition resulting in Lower occupancy and of course lower rates per room. Similarly the ever changing government policies , taxation and regulations has never been friendly for the Hotel Industry.

TGB's Business Outlook

Revenue

The Company recorded revenue Rs. 141 Crores during the financial year under review, compared to Rs. 158 Crores achieved during the brvious period. Though the growth in Room & Food Beverage revenue showed a marginal decline, but our mainstay Banqueting & Catering showed a growth. Forthcoming year seems to be promising with the addition of managed property in Indore - The Grand Bhagwati Palace.

Expenses

During the period under review, total expenses have increased marginally. Cost of sales has decreased, compared to brvious period and it is mainly due to change in revenue composition & the new rules applied on hospitality industry on Debrciation and Amortization of assets with retrospective effect. Administrative costs and Marketing & Promotion al expenses have decreased considerably. Power & Energy costs also show a favorable variance compared to last year. This is mainly due to implementation of energy saving initiatives by the Company. Good initiatives in controlling the expenses have resulted in the decrease in Administrative costs & Selling costs. Payroll costs increased, compared to brvious period, mainly due to salary revision to both Executive and Non-Executive staff. Debrciation for the year was reported a considerable increase, compared to brvious period. This is mainly due to additional debrciation charge effected on Hospitality Industry with retrospective effect.

Corporate Culture and Values

TGB proudly counts two decades in the catering & hospitality industry - a period over which an inval uable storehouse of knowledge has been built and experience gained. Our corporate culture is based on four key qualities - passion, humility, integrity and tenacity. We are an Indian entity, fully imbued with the character and culture of the country and are proud to reflect all that is best about this nation in all we do. We also believe strongly in the value of family and family values - we enshrine these at every turn in the way we live, work and interact.

Ethics, Integrity and Compliance

TGB is uncompromising in its espousal of the highest ethics and integrity. Our every strategy and action is founded on a scrupulous adherence to all applicable laws, regulations. We have a combrhensive governance mechanism in place.

Brand Equity

Over the years, TGB has carefully established its brand positioning to occupy 'top of mind' recall in niche market segments especially in food and catering. All the Hotels has been established as a banquet property primarily focusing on food and its services.

Positioned as we are as a unique and iconic Banqueting venue, that has fully earned its luxury rating, we are careful to maintain our brand equity at optimum levels in the market category we occupy. We keep constant tabs on how our brand is faring by paying close attention to guest comments posted on myriad review sites channels such as TripAdvisor, as well as to comments we receive directly at the Hotel.

Organizational Knowledge

The many years of operations that the TGB Family can count in the tourism, catering and hospitality industry has helped us acquire industry knowledge of enviable depth. We have used this knowledge to fashion a true Indian landmark banqueting enterprise, imbued with its own unique blend of professionalism and local flavor.

Risk and Concern

In the last few years the rise in operating & Manpower costs has been a major cause of concern along with the rising capital needs and of course the various compliances which takes a major component of revenue.

Human Resource and Security

High employee turnover, the novel age cyber crimes, and constant threat of terrorism pose a major concern on the day to day operations of a hotel industry. Constant vigilance in the form of CCTV camera for surveillance, sniffers, metal detectors etc doesn't provide safe atmosphere and besides the costs involved, a constant insecurity lurks in the mind of the guests, promoters as well the team members.