Citizens' Issues
Public Interest Exclusive
Hotel Security– II: Ways to mitigate risk

For hotels, terrorism risk has raced past traditional risks such as theft and fire. But are they investing enough on security? Also, why is the insurance industry not asking for risk-mitigation measures?

It is strange that the 26/11 incident has not made the government or the home ministry announce broad guidelines about security to the hospitality sector. More so, when the government knows that the terrorism pool managed by GIC Reinsurance paid a loss of Rs400 crore to the affected parties after the 26/11 incident. It is even strange that even insurance companies haven’t done much in this area to press for mandatory guideline to all hotels. The insurance sector seems to have consoled themselves with the fact that of the loss that was paid, Rs300 crore was recovered through reinsurance. Imagine a large country like ours with so many mouths and hungry stomachs to feed, spending crores on paying insurance claims for five star hotels.

The cost of setting up an appropriate safety and security surveillance in a luxury five-star hotel won’t even be 1% of the claim amount paid by GIC Re from the terrorism pool. Yet, the reaction of the hospitality sector in the aftermath of the 26/11 incident continues to be lukewarm.

While some hotels are using the tags of ‘Ecotel’ and “Green Hotel” as a means of enhancing their brand equity, it is inscrutable that they do advertise safety or security as a part of their brands. As part of the security system, hotels can conduct emergency briefings, mock drills, self audits and self-assessment inspections, updating of the disaster response plan and creating greater awareness about emergency exits.

Won’t it be a better idea if a safety note is given to the guests at the time of check-in that would detail the efforts taken by the hotel? This note can be simple (in bullet points) that can briefly delineate the dos and don’ts and inform the guests about emergency exits, mock drills and assembly area when the guests can converge in case an incident occurs. Besides terrorist attacks, the hotels can be exposed to other risks like riots or fire too.

Dharmarajan G, a senior citizen based in Mumbai however begs to differ from Nagesh who believes that many hotels are still not serious about surveillance. As a freelance HR advisor and consultant, Mr Dharmarajan attends meetings in hotels in Mumbai and he feels that hotels are indeed taking the safety issue seriously. He says, “The hotels install CCTV devices as a deterrent. Unfortunately, the culprits seem to know that the hotels do not maintain the systems well.”

Ramesh Ved, a chartered accountant in Mumbai says that since 2001 when the twin towers were attacked, there has been no attack on the US. But in India, terrorist attacks have become regular affairs. He argues that hotels need to engage special staff for CCTV monitoring if they have not done so already.

Terrorism risk has raced past traditional risks such as theft and fire for hotels. The government needs to lay down some minimum standards for their security systems. Strong regulation is a must to improve matters.

As of now, the balance between human intervention and electronic surveillance is more tilted towards the latter. This should change. A vigilant staff is a great source of strength. Among the steps that the industry can take are deputing high-tech security personnel in every sensitive area of the hotel, inspecting vendors, trucks, vans, parking lots, regular training, electronic security surveillance for entry and exit, video analytics, fingerprint readers for high-level guests, CCTV surveillance for corridors, floors, parking, lobby areas, multiple exits, staircases, escalators, server rooms, food storage areas, kitchen and laundry. The three elements of security namely—Detection, Deterrence and Delay—deserve a heightened sense of importance. Fortunately, there is technology to serve this need such as surveillance cameras, biometric systems, high security doors, full body scanners, baggage scan, metal detectors, access control, video surveillance, intrusion detection, etc.



Nagesh Kini FCA

4 years ago

This matter needs to be sent to the Chairman IRDA to ask him to direct GICRe to come out with directions.

Economy & Nation Exclusive
Amara Raja Batteries FY12 net profit up 45% on record sales

The battery manufacturer has shown strong results despite challenging conditions, with its full year sales rising 34% while net profit was up to Rs215.1 crore

Amara Raja Batteries, India’s leading industrial and automotive battery major, today announced a topline growth of 34% for the financial year 2011-12, recording a net revenue of Rs2,367.4 crore (excluding other income) compared to Rs1,761.1 crore in the pervious fiscal. Its revenues breached the Rs2,000 crore mark for its first time. Net profit stood at Rs215.1 crore, recording a growth of 45% against Rs148.1 crore for the corresponding period last year. Here, too, the net profit breached Rs200 crore for the first time.

The performance was aided by the industrial battery business which registered double digit volume growth over the previous financial year. Also, its automotive battery business reported 39% increase in sales revenue enabled by good volume growth of 19% and 26% (year-on-year) in four-wheeler and two-wheeler batteries respectively.

For the fourth quarter of 2011-12, the company recorded net sales and net profit of Rs6,70.6 crore (Rs500.8 crore for the previous year) and Rs58.3 crore (Rs41.1 crore for the previous year). According to the company, the surge in topline and bottomline during the fourth quarter was due to volume growth, better price realization and softening of lead price. However, it remains to be seen how the rupee will act as a catalyst for the company, going forward as it depends on lead imports which constitutes the bulk of its raw material costs.

Jayadev Galla, managing director, Amara Raja Batteries said, “We are pleased to report the highest ever sales and profitability numbers of the company for the financial year 2011-12, despite uncertainty in the telecom sector and slowdown in the automobile industry. Both our industrial and automotive battery units have reported double-digit growth and gained market shares. The continuing Eurozone crisis, volatile rupee and high inflation are causes for concern as we step into the next financial year. However, the softening lead prices and our capability to perform with differentiated strategy will help us to sustain the growth momentum.”

K Suresh, chief financial officer, said, “the company enjoys debt-free status and free cash of over Rs200 crore at the end of the financial year. The year under review saw the company’s market capitalization sustaining around Rs2,300 crore, despite high volatility in the capital markets.”

Further, he added, “To enhance the liquidity and affordability for the small investors to participate in the growth story of Amara Raja, the board of directors have recommended splitting the face value of the company’s paid up share from Rs2 to Re1, subject to the approval of the shareholders in the ensuing general meeting. We expect that the proposed share split would enhance shareholder value.”

Apart from the share split, the board recommended a dividend of Rs3.78 per share, subject to members’ approval.


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