Financial Performance Analysis of Dolphin Hotels PLC (BBA1143 Report)
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This report presents a comprehensive financial analysis of Dolphin Hotels PLC, focusing on its historical performance and the impact of the COVID-19 pandemic. It begins with an overview of the company and its operations, followed by an analysis of its financial ratios, including profitability, liquidity, efficiency, and investor market ratios, from 2017 to 2019. The analysis provides insights into the company's financial strengths and weaknesses. The report then examines the impact of COVID-19 on Dolphin Hotels PLC, the broader tourism industry, and the Sri Lankan economy, discussing the challenges faced and the company's risk management strategies. The report concludes by assessing the company's going concern status and the measures taken to mitigate the pandemic's effects. The report includes financial data, ratio calculations, and a discussion of the company's responses to the crisis, providing a detailed understanding of its financial health and resilience in a challenging environment.

ASSIGNMENT
SEPTEMBER 2020 SEMESTER
SUBJECT CODE : BBA1143
SUBJECT TITLE : INTRODUCTION TO ACCOUNTING
LEVEL : BBA
STUDENT’S NAME :
STUDENT NO. :
PROGRAMME : BBA
ACADEMIC :
FACILITATOR
LEARNING CENTRE : CAMBRIDGE COLLEGE
INSTRUCTIONS TO STUDENTS
1) Plagiarism in all forms is forbidden. Students who submit plagiarised
assignment will be penalised.
2) References MUST be included and taken from reliable sources. Please use the
Harvard Referencing Style and cite your work appropriately.
3) This assignment carries a 60% weightage toward final grade.
4) The submission date for this assignment is XXXXXX
1
SEPTEMBER 2020 SEMESTER
SUBJECT CODE : BBA1143
SUBJECT TITLE : INTRODUCTION TO ACCOUNTING
LEVEL : BBA
STUDENT’S NAME :
STUDENT NO. :
PROGRAMME : BBA
ACADEMIC :
FACILITATOR
LEARNING CENTRE : CAMBRIDGE COLLEGE
INSTRUCTIONS TO STUDENTS
1) Plagiarism in all forms is forbidden. Students who submit plagiarised
assignment will be penalised.
2) References MUST be included and taken from reliable sources. Please use the
Harvard Referencing Style and cite your work appropriately.
3) This assignment carries a 60% weightage toward final grade.
4) The submission date for this assignment is XXXXXX
1
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DECLARATION BY STUDENT
I certify that this assignment is my own work and is in my own words. All sources
have been acknowledged and the content has not been previously submitted for
assessment to Lincoln University College or elsewhere. I also confirm that I have kept
a copy of this assignment.
Signed: _________________________
2
I certify that this assignment is my own work and is in my own words. All sources
have been acknowledged and the content has not been previously submitted for
assessment to Lincoln University College or elsewhere. I also confirm that I have kept
a copy of this assignment.
Signed: _________________________
2

Contents
PART A..................................................................................................................................................................4
Task One: Financial Ratios.....................................................................................................................................4
Historical performance of the company..............................................................................................................4
Ratio analysis of Dolphin Hotels PLC................................................................................................................5
Analyze the impact of COVID 19 on the company, the industry and the Sri Lankan economy..........................7
Task Two: Budgets...............................................................................................................................................11
Task Three: Compliance and record keeping........................................................................................................13
References............................................................................................................................................................17
3
PART A..................................................................................................................................................................4
Task One: Financial Ratios.....................................................................................................................................4
Historical performance of the company..............................................................................................................4
Ratio analysis of Dolphin Hotels PLC................................................................................................................5
Analyze the impact of COVID 19 on the company, the industry and the Sri Lankan economy..........................7
Task Two: Budgets...............................................................................................................................................11
Task Three: Compliance and record keeping........................................................................................................13
References............................................................................................................................................................17
3
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PART A
Task One: Financial Ratios
Historical performance of the company
The PLC and Dolphin Hotels PLC Beruwala Resorts are listed on the Colombo Stock Exchange.
This assignment helps to get an idea of how these hotels performed. Ratio analysis is a process in
which a firm's financial strengths and weaknesses are identified and analyzed by establishing
meaningful relationships between the elements of financial statements. The Ratio analysis was
defined as one of those parameters for calculating efficiency. However, it is not advised to
calculate market success based solely on financial metrics, as non-financial considerations play a
crucial role in this too. (William.F,1999)1
It was located nestled in one of Sri Lanka's most historically important places. Dolphin Hotel has
a fun atmosphere to sell its visitors. The tranquility of the environment supports the traveler in a
relaxed atmosphere while the luxurious collection of facilities ensures absolute comfort. The
hotel is a sanctuary for residents as well as visitors, with convenient lodging to a variety of
leisure activities.
The hotel is situated about 169 km from Colombo and about 162 km from Katunayake
International Airport, Bandaranaike. Dolphin Hotel offers 79 superior rooms to its guests which
speak for their name. With relaxing colors and decor to help relax amid nature's wonders, these
guestrooms provide complete privacy and luxury at all times. Sri Lanka's warm climate is
making swimming outdoors a pleasurable pastime. (Gulpenko,K,2017)2The Dolphin Hotel’s
main restaurant, a pavilion-type air restaurant, serves tasty and gastronomic local and foreign
cuisine.
Other services at Dolphin Hotel include an Eco Center, an in-house pharmacy, physician on call,
and guest machine internet. In an extremely challenging climate, including lower than expected
occupancy levels due to severe competition and lack of demand formation, Dolphin Hotels PLC
reported top line growth during the year. (Gulpenko,K,2017) 3Total occupancy was 74 per cent
on average compared to 76 per cent in the previous financial year. The turnover was Rs.26Mn
1 (William.F,1999)
2 (Gulpenko,K,2017)
3 (Gulpenko,K,2017)
4
Task One: Financial Ratios
Historical performance of the company
The PLC and Dolphin Hotels PLC Beruwala Resorts are listed on the Colombo Stock Exchange.
This assignment helps to get an idea of how these hotels performed. Ratio analysis is a process in
which a firm's financial strengths and weaknesses are identified and analyzed by establishing
meaningful relationships between the elements of financial statements. The Ratio analysis was
defined as one of those parameters for calculating efficiency. However, it is not advised to
calculate market success based solely on financial metrics, as non-financial considerations play a
crucial role in this too. (William.F,1999)1
It was located nestled in one of Sri Lanka's most historically important places. Dolphin Hotel has
a fun atmosphere to sell its visitors. The tranquility of the environment supports the traveler in a
relaxed atmosphere while the luxurious collection of facilities ensures absolute comfort. The
hotel is a sanctuary for residents as well as visitors, with convenient lodging to a variety of
leisure activities.
The hotel is situated about 169 km from Colombo and about 162 km from Katunayake
International Airport, Bandaranaike. Dolphin Hotel offers 79 superior rooms to its guests which
speak for their name. With relaxing colors and decor to help relax amid nature's wonders, these
guestrooms provide complete privacy and luxury at all times. Sri Lanka's warm climate is
making swimming outdoors a pleasurable pastime. (Gulpenko,K,2017)2The Dolphin Hotel’s
main restaurant, a pavilion-type air restaurant, serves tasty and gastronomic local and foreign
cuisine.
Other services at Dolphin Hotel include an Eco Center, an in-house pharmacy, physician on call,
and guest machine internet. In an extremely challenging climate, including lower than expected
occupancy levels due to severe competition and lack of demand formation, Dolphin Hotels PLC
reported top line growth during the year. (Gulpenko,K,2017) 3Total occupancy was 74 per cent
on average compared to 76 per cent in the previous financial year. The turnover was Rs.26Mn
1 (William.F,1999)
2 (Gulpenko,K,2017)
3 (Gulpenko,K,2017)
4
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compared to Rs.333Mn when last year's operating profit was Rs.63Mn compared to Rs.83Mn.
The after-tax benefit was in Rs.67Mn from Rs.66Mn.
2018 2019
Profit Rs. Rs.
Accumulated profit at 67,108,395 66,529,146
end of the year
Stated Capital
The Company's reported capital as at 31 March 2017 was 97,650,000 (2016-97,650,000) split
into 5,859,000 (2016-5,859,000) common shares. (Vaitlingam.D,2005)4There was no
improvement to the Company's Reported Capital during the year under study.
Accounting Ratio Analysis
ï‚· Ratio analysis is a method in which a firm's financial assets and weaknesses are
identified and evaluated by creating clear relationships between the components of
financial statements.
ï‚· Five kinds of ratios are popularly used to measure a company's financial performance.
ï‚· Profitability Ratios-assess the viability of the company or the financial performance
ï‚· Liquidity Ratios-measure the financial state of the company in the short term
ï‚· Gearing Ratios-measure long-term financial performance and the company's role
ï‚· Productivity Ratios-measure how well organization has invested its money.
(Charles.P,2010)5
 Sector of buyers Ratios-measure quality of the investment Investors’ market Ratios -
evaluate the attractiveness of the investment and its return using both financial
statements and market-based information. (Vaitlingam.D,2005)6
Ratio analysis of Dolphin Hotels PLC
Profitability Ratios
Gross Profit Ratio = Gross Profit x 100
4 (Vaitlingam.D,2005)
5 (Charles.P,2010)
6 (Vaitlingam.D,2005)
5
The after-tax benefit was in Rs.67Mn from Rs.66Mn.
2018 2019
Profit Rs. Rs.
Accumulated profit at 67,108,395 66,529,146
end of the year
Stated Capital
The Company's reported capital as at 31 March 2017 was 97,650,000 (2016-97,650,000) split
into 5,859,000 (2016-5,859,000) common shares. (Vaitlingam.D,2005)4There was no
improvement to the Company's Reported Capital during the year under study.
Accounting Ratio Analysis
ï‚· Ratio analysis is a method in which a firm's financial assets and weaknesses are
identified and evaluated by creating clear relationships between the components of
financial statements.
ï‚· Five kinds of ratios are popularly used to measure a company's financial performance.
ï‚· Profitability Ratios-assess the viability of the company or the financial performance
ï‚· Liquidity Ratios-measure the financial state of the company in the short term
ï‚· Gearing Ratios-measure long-term financial performance and the company's role
ï‚· Productivity Ratios-measure how well organization has invested its money.
(Charles.P,2010)5
 Sector of buyers Ratios-measure quality of the investment Investors’ market Ratios -
evaluate the attractiveness of the investment and its return using both financial
statements and market-based information. (Vaitlingam.D,2005)6
Ratio analysis of Dolphin Hotels PLC
Profitability Ratios
Gross Profit Ratio = Gross Profit x 100
4 (Vaitlingam.D,2005)
5 (Charles.P,2010)
6 (Vaitlingam.D,2005)
5

Sales
Net Profit Ratio = Net Profit before Tax x 100
Sales
Year 2017 2018 2019
Gross Profit Ratio (Rs.) 204,169,931 / 258,287,530 x
100 = 79.0
268,666,925 / 333,028,739 x 100
= 80.67
242,583,874 / 325,263,132 x 100
= 74.58
Net Profit Ratio (Rs.) 63,930,106 / 258,287,530 x 100
= 24.75
86,120,462 / 258,287,530 x 100
= 33.34
69,572,745 / 258,287,530 x 100 =
29.93
Liquidity Ratios
Current Ratio = Current Assets
Current Liabilities
Year 2017 2018 2019
Current Ratio (Rs.) 84,365,707 / 52,344,216 = 1.6 139,859,503 / 58,796,645 = 2.4 128,808,574 / 77,284,750 = 1.67
Efficiency Ratios
Asset Turnover = Sales
Total Assets
Year 2017 2018 2019
Asset Turnover (Rs) 258,287,530 / 395,002,203 =
0.65
258,287,530 / 497,411,140 =
0.52
258,287,530 / 520,093,308 =
0.49
Investors’ market Ratios
Earning Per Share = Profit after Tax
Numbers of Ordinary Shares
Dividends Per Share = Dividend Paid
Numbers of Ordinary Shares
6
Net Profit Ratio = Net Profit before Tax x 100
Sales
Year 2017 2018 2019
Gross Profit Ratio (Rs.) 204,169,931 / 258,287,530 x
100 = 79.0
268,666,925 / 333,028,739 x 100
= 80.67
242,583,874 / 325,263,132 x 100
= 74.58
Net Profit Ratio (Rs.) 63,930,106 / 258,287,530 x 100
= 24.75
86,120,462 / 258,287,530 x 100
= 33.34
69,572,745 / 258,287,530 x 100 =
29.93
Liquidity Ratios
Current Ratio = Current Assets
Current Liabilities
Year 2017 2018 2019
Current Ratio (Rs.) 84,365,707 / 52,344,216 = 1.6 139,859,503 / 58,796,645 = 2.4 128,808,574 / 77,284,750 = 1.67
Efficiency Ratios
Asset Turnover = Sales
Total Assets
Year 2017 2018 2019
Asset Turnover (Rs) 258,287,530 / 395,002,203 =
0.65
258,287,530 / 497,411,140 =
0.52
258,287,530 / 520,093,308 =
0.49
Investors’ market Ratios
Earning Per Share = Profit after Tax
Numbers of Ordinary Shares
Dividends Per Share = Dividend Paid
Numbers of Ordinary Shares
6
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Dividend Payout Ratio = Dividends Per Share x 100
Earning Per Share
Price Earning Ratio = Market Price per Share
Earning Per Share
Year 2017 2018 2019
Earning Per Share (Rs) 60,807,630 / 5,859,000 =
10.40
66,529,146 / 5,859,000 =
11.35
67,108,395 / 5,859,000 = 11.45
Dividends Per Share (Rs) 29,295,000 / 5,859,000 = 5 - 58,590,000 / 5,859,000 = 10
Dividend Payout Ratio
(Rs)
5 / 10.40 x 100 = 48.07 - 10 /11.45 x 100 = 7.3
Price Earning Ratio (Rs) 87.90 / 10.40 = 8.4 96.00 / 11.35 = 8.4 97.30 / 11.45 = 8.5
Analyze the impact of COVID 19 on the company, the industry and the Sri Lankan
economy
The 2019/20 financial year put the travel and leisure industry at a turning point and challenged
organizations to navigate the status quo armed with a resilient, innovative mindset and a market-
sensitive drive to pursue sustainable growth. In this context, Dolphin Hotels PLC persevered by
implementing timely and more effective tactics to overcome the existing problems in a cautious
manner and prepare for the future. (Maievskaia,2016)7The Government's attempts to boost the
sector by proposing a financial support plan comprising of a 12-month moratorium on loans and
interest repayments, a guaranteed soft-working capital credit program to be repaid within 24
months and a 15 per cent cut in VAT from 15% to 7%, were welcome. However, the COVID-19
pandemic brought these recovery attempts to a halt during the latter part of the financial year,
with subsequent worldwide sanctions and travel bans. Colombo airport was closed for tourist
arrivals in late March, and an island-wide curfew was imposed for nearly 2 months.
(Charles.P,2010)8
7
(Maievskaia,2016)
8 (Charles.P,2010)
7
Earning Per Share
Price Earning Ratio = Market Price per Share
Earning Per Share
Year 2017 2018 2019
Earning Per Share (Rs) 60,807,630 / 5,859,000 =
10.40
66,529,146 / 5,859,000 =
11.35
67,108,395 / 5,859,000 = 11.45
Dividends Per Share (Rs) 29,295,000 / 5,859,000 = 5 - 58,590,000 / 5,859,000 = 10
Dividend Payout Ratio
(Rs)
5 / 10.40 x 100 = 48.07 - 10 /11.45 x 100 = 7.3
Price Earning Ratio (Rs) 87.90 / 10.40 = 8.4 96.00 / 11.35 = 8.4 97.30 / 11.45 = 8.5
Analyze the impact of COVID 19 on the company, the industry and the Sri Lankan
economy
The 2019/20 financial year put the travel and leisure industry at a turning point and challenged
organizations to navigate the status quo armed with a resilient, innovative mindset and a market-
sensitive drive to pursue sustainable growth. In this context, Dolphin Hotels PLC persevered by
implementing timely and more effective tactics to overcome the existing problems in a cautious
manner and prepare for the future. (Maievskaia,2016)7The Government's attempts to boost the
sector by proposing a financial support plan comprising of a 12-month moratorium on loans and
interest repayments, a guaranteed soft-working capital credit program to be repaid within 24
months and a 15 per cent cut in VAT from 15% to 7%, were welcome. However, the COVID-19
pandemic brought these recovery attempts to a halt during the latter part of the financial year,
with subsequent worldwide sanctions and travel bans. Colombo airport was closed for tourist
arrivals in late March, and an island-wide curfew was imposed for nearly 2 months.
(Charles.P,2010)8
7
(Maievskaia,2016)
8 (Charles.P,2010)
7
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The recent pandemic and the ensuing economic and health crises have created major obstacles
for the global tourism market. Even if the spread of the virus is kept under control in the
foreseeable future, global tourism and ultimately occupancy rates will be hit hard during 2020
and beyond in realistic terms. (Charles.P,2010)9However, this is also a chance to create a more
sustainable and robust industry. In the case of Sri Lanka, officials need to build a regulatory
framework that protects heritage sites, avoids unlicensed tourism activity and provides a
sustainable forum that centers around the conservation of wildlife and our natural resources. We
need to develop a system for saving endangered animals including elephants and whales. The
global recession presents us with an opportunity to re-examine our growth plans and create an
atmosphere that prioritizes sustainable development and protection of the country's natural
resources to support growth. Despite difficulties facing the industry, Dolphin Hotels PLC posted
operating profit revenues of Rs 728 million and Rs 40 million.
Risk Management
The Organization has introduced a mechanism to identify, analyze and handle any major risks
posed by the business, where the Community Risk & Control Department performs periodic risk
assessments. The Audit Committee reviews the key risks and mitigation activities on a quarterly
basis.
Going Concern
Having considered the financial situation, market circumstances, legal and other considerations
and the concerns to be resolved in the Corporate Governance Code, the Board has realistic hopes
that the Organization will have ample capital to sustain its activities in the near future. For that
reason, in planning the financial statements, the Organization tends to follow the 'Going Concern
Principle. (Gulpenko,K,2017)10
Owing to the considerable uncertainties stemming from the COVID-19 pandemic management, a
thorough ongoing analysis of the liquidity positions of the company has been carried out to
ensure that there is ample headroom to absorb negative cash flow impacts,
(Gulpenko,K,2017)11the company's success and the subsequent effects on the company taking
9 (Charles.P,2010)
10 (Gulpenko,K,2017)
11 (Gulpenko,K,2017)
8
for the global tourism market. Even if the spread of the virus is kept under control in the
foreseeable future, global tourism and ultimately occupancy rates will be hit hard during 2020
and beyond in realistic terms. (Charles.P,2010)9However, this is also a chance to create a more
sustainable and robust industry. In the case of Sri Lanka, officials need to build a regulatory
framework that protects heritage sites, avoids unlicensed tourism activity and provides a
sustainable forum that centers around the conservation of wildlife and our natural resources. We
need to develop a system for saving endangered animals including elephants and whales. The
global recession presents us with an opportunity to re-examine our growth plans and create an
atmosphere that prioritizes sustainable development and protection of the country's natural
resources to support growth. Despite difficulties facing the industry, Dolphin Hotels PLC posted
operating profit revenues of Rs 728 million and Rs 40 million.
Risk Management
The Organization has introduced a mechanism to identify, analyze and handle any major risks
posed by the business, where the Community Risk & Control Department performs periodic risk
assessments. The Audit Committee reviews the key risks and mitigation activities on a quarterly
basis.
Going Concern
Having considered the financial situation, market circumstances, legal and other considerations
and the concerns to be resolved in the Corporate Governance Code, the Board has realistic hopes
that the Organization will have ample capital to sustain its activities in the near future. For that
reason, in planning the financial statements, the Organization tends to follow the 'Going Concern
Principle. (Gulpenko,K,2017)10
Owing to the considerable uncertainties stemming from the COVID-19 pandemic management, a
thorough ongoing analysis of the liquidity positions of the company has been carried out to
ensure that there is ample headroom to absorb negative cash flow impacts,
(Gulpenko,K,2017)11the company's success and the subsequent effects on the company taking
9 (Charles.P,2010)
10 (Gulpenko,K,2017)
11 (Gulpenko,K,2017)
8

into account the changing circumstances as outlined below. Following the outbreak of COVID-
19, the organization took necessary steps including high-quality medical and public health
guidance, social isolation, provision of protective equipment and home work to protect the
welfare of all our workers and ensure compliance with various recommendations provided by the
Governor. (Francis,1999)12
The Organization works through a comprehensive cash management strategy and cost control
strategy. In addition , the organization has also looked at the possible sources of financing that
can be used if necessary. Management is now focused on the Company's sound corporate
continuity strategy. The Company's current and expected effects of the pandemic has been
properly analyzed and discussed in several stress-tested conditions across a wide variety of
considerations. Was one of the sectors considerably impacted by the COVID-19 pandemic,
Owing to the imposed shutdown scenario, transport delays / limitations and quarantine
conditions from the outset of the lockout, the last 2 weeks of 2019/20 and the early part of
2020/21 finished with nil or minimal occupancy. (Francis,1999) 13However, with the
management taking effective steps to minimize the effect of the pandemic on the Company and
taking into account the resources available to the Company, the directors agreed that the usage of
the present issue is acceptable and that the Group has ample capital to sustain its activities in the
near future
Current income tax assets and liabilities are measured at the amount expected to be recovered
from or paid to the Commissioner General of Inland Revenue for the current and prior periods.
The tax rates and tax legislation used to measure the number are those enacted or partially
enacted in the country where the corporation resides and earns taxable revenue on the reporting
date. Present income tax in terms of products reported explicitly in equity is included in equity
and not in the benefit or loss statement
Impact of COVID-19 Pandemic
The Organization reassessed the valuation of its property , plant and equipment with COVID-19
outbreak and based on that appraisal, the fair value recorded as of 31 March 2019 was not
significantly changed. The said reassessment was carried out in accordance with the same
12 (Francis,1999)
13 (Francis,1999)
9
19, the organization took necessary steps including high-quality medical and public health
guidance, social isolation, provision of protective equipment and home work to protect the
welfare of all our workers and ensure compliance with various recommendations provided by the
Governor. (Francis,1999)12
The Organization works through a comprehensive cash management strategy and cost control
strategy. In addition , the organization has also looked at the possible sources of financing that
can be used if necessary. Management is now focused on the Company's sound corporate
continuity strategy. The Company's current and expected effects of the pandemic has been
properly analyzed and discussed in several stress-tested conditions across a wide variety of
considerations. Was one of the sectors considerably impacted by the COVID-19 pandemic,
Owing to the imposed shutdown scenario, transport delays / limitations and quarantine
conditions from the outset of the lockout, the last 2 weeks of 2019/20 and the early part of
2020/21 finished with nil or minimal occupancy. (Francis,1999) 13However, with the
management taking effective steps to minimize the effect of the pandemic on the Company and
taking into account the resources available to the Company, the directors agreed that the usage of
the present issue is acceptable and that the Group has ample capital to sustain its activities in the
near future
Current income tax assets and liabilities are measured at the amount expected to be recovered
from or paid to the Commissioner General of Inland Revenue for the current and prior periods.
The tax rates and tax legislation used to measure the number are those enacted or partially
enacted in the country where the corporation resides and earns taxable revenue on the reporting
date. Present income tax in terms of products reported explicitly in equity is included in equity
and not in the benefit or loss statement
Impact of COVID-19 Pandemic
The Organization reassessed the valuation of its property , plant and equipment with COVID-19
outbreak and based on that appraisal, the fair value recorded as of 31 March 2019 was not
significantly changed. The said reassessment was carried out in accordance with the same
12 (Francis,1999)
13 (Francis,1999)
9
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objective professional values stated in note 11.8. Accordingly, the Organization did not identify
any disability with respect to land, plant and equipment at the reporting date due to the COVID-
19 outbreak and land functions under the respective business continuity plans thus adhering
strictly to the related steps and guidance issued by the Ministry of Health. (Black.J,2009)14
With COVID-19 outbreak the Company reassessed the net realizable worth of its inventories.
However, there was no need to change the carrying value of the inventory to reflect its net
realizable worth as the business agreed either to sell the perishable goods to vendors with limited
shelf life or to use them for internal requirements. (Black.J,2009)15
The Business was given a one-year loan moratorium ending March 31, 2020 for the above two
loans as the Sri Lankan tourism industry was seriously impacted by the Easter Sunday terrorist
attack. The said moratorium was prolonged with the COVID-19 outbreak for a further six
months, as the tourism industry is currently critical. The Organization is currently accruing debt
interest on the two bonds, and with the expiry of the debt moratorium, the aforementioned
accumulated interest will be transferred to two new loans. As a policy decision taken to keep the
economic system stable by enhanced liquidity during the outbreak of COVID-19, CBSL has
relaxed its policy rates by allowing the country's financial sector to lower lending rates.
Therefore, interest rate exposure attributable to the COVID-19 outbreak was not adversely
altered. With the COVID-19 outbreak in March 2020, the Sri Lankan Rupee witnessed a steep
decline against the US Dollar. However, the exposure of the Company to foreign currency risk
has not been adversely altered with the aforementioned currency depreciation, as the Company
has ample foreign currency reserves to fulfill its foreign currency obligations. With the COVID-
19 pandemic, the organization has placed in motion more solid frameworks to track its debtors'
recoverability closely and on a continuing basis. However, there has been no substantial increase
in credit risk as the Firm deals only with known, creditworthy third parties.
14 (Black.J,2009)
15 (Black.J,2009)
10
any disability with respect to land, plant and equipment at the reporting date due to the COVID-
19 outbreak and land functions under the respective business continuity plans thus adhering
strictly to the related steps and guidance issued by the Ministry of Health. (Black.J,2009)14
With COVID-19 outbreak the Company reassessed the net realizable worth of its inventories.
However, there was no need to change the carrying value of the inventory to reflect its net
realizable worth as the business agreed either to sell the perishable goods to vendors with limited
shelf life or to use them for internal requirements. (Black.J,2009)15
The Business was given a one-year loan moratorium ending March 31, 2020 for the above two
loans as the Sri Lankan tourism industry was seriously impacted by the Easter Sunday terrorist
attack. The said moratorium was prolonged with the COVID-19 outbreak for a further six
months, as the tourism industry is currently critical. The Organization is currently accruing debt
interest on the two bonds, and with the expiry of the debt moratorium, the aforementioned
accumulated interest will be transferred to two new loans. As a policy decision taken to keep the
economic system stable by enhanced liquidity during the outbreak of COVID-19, CBSL has
relaxed its policy rates by allowing the country's financial sector to lower lending rates.
Therefore, interest rate exposure attributable to the COVID-19 outbreak was not adversely
altered. With the COVID-19 outbreak in March 2020, the Sri Lankan Rupee witnessed a steep
decline against the US Dollar. However, the exposure of the Company to foreign currency risk
has not been adversely altered with the aforementioned currency depreciation, as the Company
has ample foreign currency reserves to fulfill its foreign currency obligations. With the COVID-
19 pandemic, the organization has placed in motion more solid frameworks to track its debtors'
recoverability closely and on a continuing basis. However, there has been no substantial increase
in credit risk as the Firm deals only with known, creditworthy third parties.
14 (Black.J,2009)
15 (Black.J,2009)
10
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Task Two: Budgets
A hotel manager who is responsible for the day-to-day administration of a hotel and its
employees, they provide operational responsibility for budgeting and financial control,
arranging, coordinating and overseeing all hotel facilities, including front-of-house (reception,
concierge and reservations), food and drink operations and housekeeping. Managers also have
particular roles in bigger hotels (guest services, accounting, and marketing)
(Vaitlingam.D,2005)16and form a general management committee. When providing a strategic
analysis and looking ahead to optimize revenues, the boss often has to pay attention to specifics,
setting a precedent for workers to provide a quality of operation and performance that satisfies
the needs and desires of customers. Equally relevant are business and people management.
The manager of a large hotel may have less make contact with guests but will have regular
meetings with heads of department to coordinate and monitor the progress of business strategies.
In a smaller establishment, the manager is much more involved in the hands-on day-to-day
running of the hotel, which may include carrying out reception duties or serving meals if the
need arises(Vaitlingam.D,2005)17
The hotel sector is developing rapidly, whatever the political changes taking place. The training
of human resources is done by rapidly increasing hotel schools in the country and sometimes
foreign institutes. Business development is more essential in this sector to be in par with the
physical and employee capacity. Therefore CRM plays a crucial role in building and sustaining
client bases for the leaders of hotel industry are looking for a new age of strong leadership
backed by consistent tourism policies. Many are expecting that the current administration will
put greater focus on tourism policy, encourage fresh construction and have stronger coordination
around the industry with Whitehall policies.
Customer Relationship Management Customer Relationship Management (CRM) is described as
a 'strategic strategy that allows companies to use internal tools (technology, personnel, processes)
to manage customer interactions during their life cycle to build a competitive edge and enhance
organizational efficiency.
16 (Vaitlingam.D,2005)
17 (Vaitlingam.D,2005)
11
A hotel manager who is responsible for the day-to-day administration of a hotel and its
employees, they provide operational responsibility for budgeting and financial control,
arranging, coordinating and overseeing all hotel facilities, including front-of-house (reception,
concierge and reservations), food and drink operations and housekeeping. Managers also have
particular roles in bigger hotels (guest services, accounting, and marketing)
(Vaitlingam.D,2005)16and form a general management committee. When providing a strategic
analysis and looking ahead to optimize revenues, the boss often has to pay attention to specifics,
setting a precedent for workers to provide a quality of operation and performance that satisfies
the needs and desires of customers. Equally relevant are business and people management.
The manager of a large hotel may have less make contact with guests but will have regular
meetings with heads of department to coordinate and monitor the progress of business strategies.
In a smaller establishment, the manager is much more involved in the hands-on day-to-day
running of the hotel, which may include carrying out reception duties or serving meals if the
need arises(Vaitlingam.D,2005)17
The hotel sector is developing rapidly, whatever the political changes taking place. The training
of human resources is done by rapidly increasing hotel schools in the country and sometimes
foreign institutes. Business development is more essential in this sector to be in par with the
physical and employee capacity. Therefore CRM plays a crucial role in building and sustaining
client bases for the leaders of hotel industry are looking for a new age of strong leadership
backed by consistent tourism policies. Many are expecting that the current administration will
put greater focus on tourism policy, encourage fresh construction and have stronger coordination
around the industry with Whitehall policies.
Customer Relationship Management Customer Relationship Management (CRM) is described as
a 'strategic strategy that allows companies to use internal tools (technology, personnel, processes)
to manage customer interactions during their life cycle to build a competitive edge and enhance
organizational efficiency.
16 (Vaitlingam.D,2005)
17 (Vaitlingam.D,2005)
11

Hotel Industry customer relationship management Many advertisers described consumers as the
center of their business. They feel they need to attract consumers to meet all of their corporate
goals. (Gulpenko,K,2017)18CRM programs is launched with the growing need to handle
customers well. CRM is not limited to a specific industry with CRM is not limited to a particular
industry, it is applicable for all the industries. The service industry is really significant in these
multiple sectors, so it's not like the goods sector. Satisfying consumers with the service is very
challenging when there is a strong propensity for service disruptions to occur. Avoiding these
disruptions by standard of operation is also a problem (Azmian, Nasrinahr & Foroughi, 2012).
With reference to the above literature, CRM is often considered to be better suited for the hotel
industry due to higher transaction costs, raised consumer demands, price volatility, volatile
demand and reduced brand loyalty
The novel Corona's global pandemic has not only brought full socio-economic systems to a halt,
but has also threatened business globalization and global operations. Paradoxically, there are also
unpredictable future consequences and possible routes out. However, a sustainable and fresh start
in most of the worsened economic sectors is necessary for a speedy recovery and recovery of the
economy, employment and business functions. Conventionally, a virus used to target
disadvantaged communities with food, instability in their environment, and they were usually the
weak in society. (William.F,1999)19Ironically, the novel Corona infection first attacked
international travelers and caused the pandemic through travel and thus confronted the affluent
social class worldwide in particular. Since tourism is one of the world's largest and fastest
growing industries; after the Covid 19 pandemic, it is expected to play a significant role in
restoring socio-economic stability. It is a major contributor to the economies of the Island and
one of the most important industries in the Sri Lankan economy that generates much needed
foreign currency. (Gulpenko,K,2017)20
The hotel will be built by Mr I.T.H. Gamage and Mr E. Bojang with equal share as a joint
partnership business venture, and it is proposed to be called 'Budget Hotel Sri Lanka.' After
extensive market research the business opportunity was identified to venture a small budget hotel
18 (Gulpenko,K,2017)
19 (William.F,1999)
20 (Gulpenko,K,2017)
12
center of their business. They feel they need to attract consumers to meet all of their corporate
goals. (Gulpenko,K,2017)18CRM programs is launched with the growing need to handle
customers well. CRM is not limited to a specific industry with CRM is not limited to a particular
industry, it is applicable for all the industries. The service industry is really significant in these
multiple sectors, so it's not like the goods sector. Satisfying consumers with the service is very
challenging when there is a strong propensity for service disruptions to occur. Avoiding these
disruptions by standard of operation is also a problem (Azmian, Nasrinahr & Foroughi, 2012).
With reference to the above literature, CRM is often considered to be better suited for the hotel
industry due to higher transaction costs, raised consumer demands, price volatility, volatile
demand and reduced brand loyalty
The novel Corona's global pandemic has not only brought full socio-economic systems to a halt,
but has also threatened business globalization and global operations. Paradoxically, there are also
unpredictable future consequences and possible routes out. However, a sustainable and fresh start
in most of the worsened economic sectors is necessary for a speedy recovery and recovery of the
economy, employment and business functions. Conventionally, a virus used to target
disadvantaged communities with food, instability in their environment, and they were usually the
weak in society. (William.F,1999)19Ironically, the novel Corona infection first attacked
international travelers and caused the pandemic through travel and thus confronted the affluent
social class worldwide in particular. Since tourism is one of the world's largest and fastest
growing industries; after the Covid 19 pandemic, it is expected to play a significant role in
restoring socio-economic stability. It is a major contributor to the economies of the Island and
one of the most important industries in the Sri Lankan economy that generates much needed
foreign currency. (Gulpenko,K,2017)20
The hotel will be built by Mr I.T.H. Gamage and Mr E. Bojang with equal share as a joint
partnership business venture, and it is proposed to be called 'Budget Hotel Sri Lanka.' After
extensive market research the business opportunity was identified to venture a small budget hotel
18 (Gulpenko,K,2017)
19 (William.F,1999)
20 (Gulpenko,K,2017)
12
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