Despite carrying accumulated losses of over Rs.1.3 billion in its books and posting a loss of Rs.30.3 million, down from a loss of Rs.63.6 million a year earlier, in fiscal 2007/08, Taj Lanka Hotels PLC will continue with its renovation program "in spite of present turmoil," the company's Chairman, Mr. Anil P. Goel has said in the company's just released annual report.
"The year under review has been extremely difficult for the hotel industry, a year in which your company operated under even tougher conditions," he said reiterating tht investment in their Colombo property will continue.
Goel made the point that the conflict in the North and the East and widespread media exposure of these events had contributed to the industry's "dismal performance" during the year under review.
"Further, inflation and cost of living have gone up significantly along with cost of imports due to the sharp devaluation of the rupee. These have contributed adversely to the cost of operations. Due to the uncertain future based on the current scenario, the deferred tax charge had impacted further on the net results of the company," he explained.
However, the company was committed to enhancing the image and position of the hotel in the market having renovated four floors and the swimming pool and opened a brand new coffee shop which was already popular.
The next phase of the renovation will focus on the remaining floors, restaurants, banqueting and fitness centre facilities, the chairman said.
He was hopeful that tourism will stabilize by the end of the second half of the current financial year which is the winter tourist season on the basis of information received from key source markets.
This, together with the proactive stand taken by the Tourism Ministry and the Sri Lanka Tourist Board to increase arrivals, is expected to show results by the end of this year, he hoped.
"As a positive initiative to target India, one of the fastest growing outbound markets, Taj group is partnering with the Sri Lankan government in new strategies to cater to various segmented tourism and in (projecting) Sri Lanka as a selected destination," he said.
Goel identified negative travel advisories by major tourist originating countries including UK, Germany, Australia, Italy and France as a deterrent to the progress of the tourism industry.
"These advisories together with the uncertain security situation were reflected in a decline in arrivals from all the major markets, except the UK, the Maldives, Middle, East and Russia," he said.
"As a result, earning from tourism declined to US dollars 385 million in 2007/08, an all time low figure, from US dollars 410 million in 2006/07. Nevertheless several initiatives were taken in 2007/08."
Taj Lanka has a stated capital of nearly Rs.1.4 billion and a revaluation reserve of Rs.1.2 billion in its books with borrowings running at Rs.444.9 million.
Net finance cost during the year under review had declined to Rs.29.9 million from Rs.54.1 million the previous year.
The Taj had been marginally profitable for four of the last six years except 2004/05 when a tidy profit of Rs.155.3 million was posted. The last two years had been loss making.
Taj Asia Limited with 58.14%, the Indian Hotels Company (24.62%) and Mrs. Jane Elizabeth de Silva (2.04%) are the major shareholders of the company.
The Taj Lanka share with net assets of Rs.8.53 per share, down from Rs.8.74 the previous year, traded at a high of Rs.11.50 and a low of Rs.7 during the year under review. This compared with a trading range of Rs.17 to Rs.10.50 the previous year.
The directors of the company are: Messrs. Anil P. Goel, U.L. Kadurugamuwa, B.K. Chaudhary (alternate Nirvana Chaudhary), Arun K. Chaudhary, Tilak de Zoysa, J. Daboo, Souvik Das (resigned 27.03.2008), R.H. Parekh (w.e.f. 27.03.2008), J.P. Kanoria, Vish Govindasamy, Dr. G. Sundaram and Ms. D.M. Harris.
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