Rear Admiral Kapil Gupta, VSM, President DSOI (Gurgaon) 14 Apr 14 Dear Members, 1. During the last meeting of the Management Committee of the DSOI (Gurgaon), a proposal to raise the monthly membership fee from Rs 300 to Rs 400, was approved. A corresponding increase in out-station membership was also approved. The increased rates will take effect from 01 Apr 14. 2. There is a general aversion to any increase and, I have therefore, decided to write this mail to explain the circumstances leading to this increase. 3. Those of you, who may have attended the AGM in Feb 14, would have had occasion to peruse the balance sheet for the last financial year which was presented by the Secretary. During the last Management Committee Meeting we reviewed the balance sheets for the past three years and concluded that the overall financial health of your institute is in decline and corrective measures are essential. The various observations of this comparison, inter alia include:a) Revenue from subscription has been steady from the time the Institute was commissioned in 2007, with marginal variation depending upon number of members on our rolls. The rate of subscription has remained the same since inception. b) Apart from the subscription, the Canteen, Banquet halls, Guest rooms and shops are our primary sources of revenue. Despite the usage of the Institute facilities having remained steady, our revenues have declined over the years for various reasons. c) Canteen has been a primary source for income and for subsidising the running of the institute. This source of revenue has been affected for a variety of reasons and may decline further as the army unit providing manpower for the canteen is unlikely to do so in the future. Should this happen, there will be substantial reduction in the profits that accrue to us. This is a matter of concern as the financial viability of the institute could be impacted in case the canteen is to be run by civilian manpower. d) Revenue from banquet hall parties has come down by about 25 % over the last three years. We have five guest room but these are not optimally used by members thus providing us very limited revenue. Similarly, our shops remain unattractive for shop-owners due to which revenue has declined to a third from Rs 7 lakhs to 2.5 lakhs last year. Most of the shops have remained vacant despite lowering the rentals. . e) Due to limited ‘footfalls’, revenue from bar and restaurant has also remained stagnant. The auditorium, banquet halls, gymnasium, swimming pool etc are very scarcely used and hence generate very little revenue. 4. On the other hand, expenditure on maintenance increased by about 15 % in FY 2012-13, primarily due to hike in electricity tariff and salaries. There is a marginal annual increase under this head in line with inflation. The Institute continues to operate with a very lean staff structure and I have resisted several requests for increase in the staffing levels, primarily due to financial considerations. 5. Notwithstanding these observations, your institute is in a satisfactory condition financially but seeing a declining trend in revenue , it became essential to revise the subscription to Rs 400 per month which is still the lowest among all service institutes / officers messes in the NCR and, more importantly, is being raised for the first time in the 7 years of its existence. You would also agree that it would not be appropriate to dip into our reserves for the day to day functioning of the institute. . 6. It is also pertinent to inform you that despite the nearly 10% annual inflation over the past two years, increase in electricity tariff, higher manpower costs etc, the Management Committee declined approval for increase in any other charges at the Institute. This implies that charges for gymnasium, swimming pool, sports facilities, banquet and guest room booking rates will continue to remain the same. A proposal to revise the Cat II booking charges for banquets downwards, is under consideration and should be finalised shortly. 7. I may also inform you that a new catering contract is being concluded with M/s Salt and Pepper, who were the lowest bidders in the tender enquiry floated by us in January this year. With aggressive price negotiation by the Finance Committee, there is only a marginal increase in rates of individual dishes despite the inflation that has plagued all of us. Efforts have been to restrict enhancement of rates in the region of 5% only for most dishes. The Banquet menus have also been made more attractive by introducing optional dishes over and above the standard menu options. We would shortly be starting the process of identifying another caterer to operationalise our 2nd restaurant so that members have options of restaurants, décor, cuisine etc. With a view to ensure that healthy food is served in the institute, the caterer has now started using sunflower/soya/mustard oils only. The success of these facilities, however, depends on their usage as lack of revenues drives away the contractors. I would, therefore, urge members to frequent the restaurant as also utilise the facility of the several banquet rooms by hosting their parties at the Institute. 8. I would also request members to spread the word about our auditorium which could be used by corporates in Gurgaon as also by members. The guest rooms and other facilities also need to be exploited by members. Should the patronage of the shops operating within DSOI premises improve, we could introduce variety. 9. I trust members will take the decision of the Management Committee in the right spirit. The Management Committee, the Secretary and the Assistant Secretary are all available to receive your suggestions for bringing about improvements to your Institute. Yours Sincerely, Rear Admiral Kapil Gupta, VSM President DSOI , Gurgaon