Panoramic Universal Ltd

BSE: 531816 | NSE: PANORAMUNI | ISIN: INE194B01029 
Market Cap: [Rs.Cr.] 107.36 | Face Value: [Rs.] 5
Industry: Computers - Software - Medium / Small

Management Discussions
Management Discussion and Analysis Report

Statements made in the Management Discussions and Analysis, describing theCompany’s objectives, projections, estimates, predictions and expectations may be‘forward-looking statements’, within the meaning of applicable securities lawsand regulations. As ‘forward-looking statements’ are based on certainassumptions and expectations of future events over which, the Company has no control, theCompany undertakes no obligation to publicly update or revise any forward-lookingstatements, whether as a result of new information, future events or otherwise. Actualresults, performance or achievements could differ materially from those expressed orimplied in such forward-looking statements. This report should be read in conjunction withthe financial statements included herein and the notes thereto and the other informationincluded elsewhere in the Annual Report.


Indian economy has strong fundamentals and is host to several eminent global corporategiants that are leaders in their respective fields. Indian economy is likely to growbetween 5.5 per cent to 6.0 per cent in 2013-14 on the back of global challenges andslowdown in investments. Following the slowdown induced by the global financial crisis in2008-09, the Indian economy responded strongly to fiscal and monetary stimulus andachieved a growth rate of 8.6 per cent and 9.3 per cent respectively in 2009-10 and2010-11, but due to a combination of both internal and external factors, the economydecelerated growing at 6.2 per cent and 5.0 per cent in 2011-12 and 2012-13 respectively.

However, with widespread reform measures initiated in recent months and the globaleconomy poised for a moderate recovery in 2013-14, the Indian economy is expected towitness an improved outlook in 2013-14. Reform process undertaken in the current year,forms the basis of fiscal policy of the government during 2013-14. Proactive policydecisions, contained government spending to provide space for private investment, alongwith reforms to attract capital inflows are expected to be key drivers of growth revivalduring 2013-14.

Indian economy's orientation is changing from a manufacturing and agriculture dominatedto a knowledge-based, wherein modern technologies and high value-added services aresignificantly contributing to the country's Gross Domestic Product (GDP). Service sectoraccounts for about 60 per cent of the Indian Economy.

We now discuss in greater detail the markets and opportunities, products, operationaland financial performance, as well as initiatives in the key functional areas such ashospitality and information technology. And conclude the report with a discussion on risksand concerns and the outlook of the Company for the future.



India, known to world the land of hospitality, is today in the defining stages ofbusiness of hospitality with unlimited tourism and untapped business prospects. In thecoming years Indian hospitality will only see green pastures of growth. Being one of thetop travel and tourism destinations in the world and given the rich historical value,India makes as an ideal product for multiple levels of tourism. India's rich culturalheritage and history, food, friendly people, architectural monuments, hospitality andservices are positive strengths for its tourism sector, which places it ahead of manyemerging markets.

Today, tourism is the most vibrant tertiary sectors and has a strong hold on theeconomy. The sector contributes 6.4 per cent to the National GDP and 7.9 per cent of thetotal employment in India. The constant transformation has made the Indian hotel industrymore functional and practical and has gained a level of acceptance world over. Thestandards of facilities and services offered have evolved over the last decade towards theextensive use of technology, environment friendly services, pricing, market segmentation,regional preferences, etc. The Indian hotel industry has seen a significant growth in roominventory across categories from upscale luxury to limited services and boutique &budget hotels. The occupancy and the room rates have seen continued gains both from thedomestic and the international traveller in both the business and leisure segment.

Moreover, India stands 42nd in the world rankings in terms of Foreign Tourist Arrivals(FTAs) in the country, according to a report titled 'Competitiveness of Tourism Sector inIndia with selected other Countries of the World' by Ministry of Tourism. The World Traveland Tourism Council (WTTC) named India as one of the fastest growing tourism industriesfor the next 10 to 15 years.

The performance of the hotels industry is intrinsically knit with economic growth,hence given the recent slump in the economic performance there was a marginal dip in theoperations of the industry, as is the case with industries that depend on discretionaryspending. Even though the sluggish economy and poor sentiments, there's good news from theworld of travel and tourism, domestic tourism in India has come of age with betterconnectivity and is likely to counter any downfall in the international tourist arrivals.India has emerged as the world's fastest-growing outbound market and in absolute numbersit is second only to China.


Some of the major initiatives taken by the Government of India to promote tourism andhospitality sector in the country are:

• The Ministry of Tourism, Government of India, has consistently been working onimproving India as a prime destination for tourists. It further aims at promoting variousIndian tourism products vis--vis competition faced from various destinations and toincrease India's share of the global tourism market.

• The Government of India allows 100 per cent foreign direct investment (FDI) inthe hotel sector on automated basis.

• The allocation for Ministry of Tourism in the Union Budget 2013-14 has beenincreased by Rs 87.66 Crores (US$ 16.03 million) to Rs 1,297.66 Crores (US$ 237.23million).

• Moreover, the Indian companies in the hotel sector, with a total project cost ofRs 250 Crores (US$ 45.70 million) or more, irrespective of their geographical location,have been allowed to tap the external commercial borrowing (ECB) route.

• The fourth meeting of ASEAN and India Tourism Ministers was held in Vientiane,Laos People's Democratic Republic (PDR). A protocol to amend the Memorandum ofUnderstanding (MoU) between ASEAN and India to strengthen tourism cooperation was alsosigned.

• Union Minister for Tourism has complimented the Government of Madhya Pradesh forbecoming the first State in the country to fully utilize plan funds for the development oftourism infrastructure at various tourist sites in the State.

• The Ministry of Tourism has also sanctioned Central Finance Assistance (CFA)worth Rs 43.87 Crores (US$ 8.02 million) for the development of Solapur mega circuit inMaharashtra.


The Indian Government is very well known to the fact that service-basedorientation of the Indian economy is providing fresh impetus to the country's growth anddevelopment. To sustain India's position as a strategic service industry on the globalplatform, the Government keeps introducing new norms and policies for the betterment ofrelated infrastructure and auxiliaries.

• The tourism sector can also be considered as the backbone for allied sectors,like hospitality, civil aviation and transport. Domestic tourism is very huge in thecountry, promoted by various intents. Pilgrim and Leisure tourism are two very importantsectors.

• The Ministry of Tourism has initiated advertising campaigns such as the'Incredible India', which promoted India's culture and tourist attractions in a fresh andmemorable way.

• On the other front, India has the potential to develop the rural tourismindustry. This can benefit the local community economically and socially and enableinteraction between tourists and locals for a mutually enriching experience.


The Indian Information Technology (IT) and Information Technology enabled Services(ITeS) sectors going parallel in every aspect. The industry has not only transformedIndia's image on the global platform, but also fuelled economic growth by energisinghigher education sector (especially in engineering and computer science). The industry hasemployed almost 10 million Indians and hence, has contributed a lot to socialtransformation in the country.

Furthermore, Indian firms, across all other sectors, largely depend on the IT &ITeS service providers to make their business processes efficient and streamlined. Indianmanufacturing sector has the highest IT spending followed by automotive, chemicals andconsumer products industries.

Industry body National Association of Software and Services Companies (Nasscom)predicts that the ITeS industry will bring in around US$ 225 billion by 2020, wherein 80per cent of the growth would come from the presently untapped sectors and regions.

The Indian IT & ITeS industry has continued to perform its role as the mostconsistent growth driver for the economy. Service, Software Exports and Business ProcessOutsourcing (BPO) remain the mainstay of the sector. Over the last five years, the IT& ITeS industry has grown at a remarkable pace. A majority of the Fortune 500 andGlobal 2000 corporations are sourcing IT/ITeS from India and it is the premier destinationfor the global sourcing of IT & ITeS accounting for 55 per cent of the global marketin offshore IT services and garnering 35 per cent of the ITeS/BPO market.

India's IT and BPO sector exports are expected to grow by 12-14 per cent in FY14 totouch US$ 84 billion - US$ 87 billion, according to Nasscom.


As a part of the National Electronics Policy, the Government of India is planning toset-up 15 new laboratories under public-private-partnership (PPP) model for hardware andsoftware testing. The labs, for which the locations are yet to be decided, will facilitateregistration and testing of IT products before they are launched in the market.

Meanwhile, in order to boost investments in Indian Special Economic Zones (SEZs), theGovernment is likely to announce incentives for the IT-oriented export hubs. Among all theSEZs across various sectors, the IT-related ones contribute the most to the exports. Thus,the Ministry of Commerce plans to streamline the incentives to encourage such zones toestablish their set-ups in tier-II and tier-III cities. The incentives would majorly aimat simplifying standards for setting up SEZs and not have any direct revenue implications.

FDI upto 100 per cent under the automatic route is allowed in data processing, softwaredevelopment and computer consultancy services; software supply services; business andmanagement consultancy services, market research services, technical testing &analysis services.

Some of the major initiatives taken by the Government to promote IT and ITeS sector inIndia are:

• The Government of West Bengal plans to spend Rs 41 Crores (US$ 7.54 million) toroll out citizen-centric services electronically across 19 districts including Kolkata.

• Kerala has set an ambitious target of becoming a cent per cent digital state ingovernance, said Minister for Industries and Information Technology, Government of Kerala.The State has around 600 small, medium and large IT firms employing over 80,000professionals directly and nearly three times the number indirectly.

• The Cabinet has approved the National Policy on

Information Technology 2012. The policy aims to increase revenues of IT and ITeSindustry from US$ 100 billion to US$ 300 billion by 2020 and expand exports from US$ 69billion to US$ 200 billion by 2020.

• The Ministry of Finance has issued a circular to chairman of public sector banksand regional rural banks, that all payments to customers, staff, vendors and suppliers aswell as disbursement of loans and payments towards investments should be made only throughthe electronic mode.


Indian corporate, across various industry segments, are installing and accepting ITproducts and services in a big way to improve their operations throughout the entireorganisation. There are estimates that spends over IT services, across the industrysegments, will witness quantum jump in the years to come.

The growth of Indian IT & ITeS companies / firms including mid-sized would dependon the global economic scenario as well as information technology spending in the majormarkets of North America and Europe in 2013.



With the diversity in demographics and culture, India presents itself as a very uniquetravel destination. Apart from locations waiting to be furnished by hotel properties,India, due to its inherent welcoming culture, makes it somewhat easier to set up shophere. The Indian hospitality industry has a tremendous pedigree of professionals who arewell-educated and ambitious to achieve great results. It, therefore, is a fantasticstarting point as hospitality is ingrained in them, hence, you must find a way to bring itout.

There are certain progressive aspects of the Union Budget 2013-14, the thrust on theworthy themes of social equity, financial inclusion and incentives to boost theinfrastructure sector. The Hon'ble Finance Minister has made a sincere endeavour torecharge business confidence and revive the investment cycle. The various initiatives,including innovative policy instruments and institutional mechanisms which were announcedto attract private investment in the country's core infrastructure are welcome. Theseincentives would indeed be valuable for hotels in those geographic locations which arealready included in the Government's Harmonised Master List of InfrastructureSub-sectors notified on 28th March, 2012 and the RBI's Infrastructure Lending List.

Reforms for retails, insurance and aviation are giving positive indications forbusiness scene and help in sustaining the growth momentum of the Indian economy. This willboost image of India and in turn bring more tourists. Even airports have been modernizedand Air India has been revamped. It has increased air seat capacity from many overseasCountries.

Ministry of Tourism’s pro-active ‘Brand Building’ under Incredible IndiaCampaign has started showing its result. Even visa problems are now streamlined and morecountries are expected to be included under visa-on-arrival policy of the Government ofIndia, with active persuasion of the Ministry of Tourism.

Another trend that is emerging is the Meetings, Incentives, Conference &Exhibitions (MICE) & Film Tourism segment that has immense potential and providestremendous growth opportunity in India for the sale of several hundred room nights asopposed to few by the transient travellers.


The emergence of India as a favoured destination for software development, businessprocess outsourcing (BPO) and 'Information Technology Enabled Services' (ITeS) has led toa surge in its contribution to the national 'Gross Domestic Product' (GDP). Besides, thesector is also among the most significant contributors to the employment opportunities inthe country.

A large number of factors has been shaping the growth of the Indian technology sector.Some of the key growth drivers for the sector include:

• forward and backward linkages with a number of sectors including banking andinsurance services, manufacturing, tourism, telecom, retail, etc.

• steadily increasing purchasing power

• large pool of skilled manpower having multi-lingual capabilities

• cost-effective outsourcing solutions

• increasing adoption of technology in the domestic industries

• emergence of new delivery platforms

• government initiatives to promote technology adoption across industries

The pace of technological advance is accelerating and Information and CommunicationTechnology (ICT) is increasingly becoming a ubiquitous and intrinsic part of people’sbehaviors and social networks as well as of business practices and government activities.These transformations will continue to move human progress forward by further leveragingIT’s positive social, political, and economic impact on government, enterprise, andcivil society.

The National Policy on IT focuses on application of technology-enabled approaches toovercome monumental developmental challenges in education, health, skill development,financial inclusion, employment generation, governance etc. to greatly enhance efficiencyacross the board in the economy. The policy seeks to achieve the twin goals of bringingthe full power of ICT within the reach of the whole of India and harnessing the capabilityand human resources of the whole of India to enable India to emerge as the Global Hub andDestination for IT and ITeS Services by 2020. The focus of the IT policy is therefore ondeployment of ICT in all sectors of the economy and on providing IT solutions to theworld.

The relationship between technology and hospitality will only grow stronger in theyears ahead. Technology is used almost in every department and function to increaseefficiency and standardise operations. Today, handheld devices having a display screenwith touch input and a miniature keyboard is used for KOT (kitchen order ticket)generation in restaurants. Besides, direct hotel reservations, the central reservationsystems (CRS) and global distribution systems (GDS) serve as the primary channels of salesfor hotel room nights. The hotels maintaining huge facility have now shifted their focusfrom revenue management to yield management by maximising occupancy and protecting ratesvariations to optimize the RevPAR.

The growth of the internet has played a key role in truly globalising the sales effortsas well as the marketing opportunities for the hotel industry. The advent of third partytravel websites such as, and as well as a few homegrown websites like our and has also been witnessed inrecent years. Additionally, independent hospitality review and opinion websites are also very popular with the travelling population of today. Thepressure on consistent delivery of brand promises is further maintained by online customerfeedback which impacts the attraction quotient of the product for other prospectivecustomers.


The hotel industry is at an interesting stage, where it is witnessing a flood ofinternational and domestic hotel companies opening new hotels across market positioningand locations. Additionally, with the growing disposable income of the Indian consumer, wesee that the domestic traveller is becoming far more discerning and demands superiorproducts and services. Logistical problems have served as bumps which keep impeding growthand dent excitement. One of the biggest challenges facing most hotel companies today asthey try to keep pace with the growing supply of new hotels is the recruitment of trainedmanpower, to maintain quality and professional service delivery and product up-keep. Theother key challenges that the hospitality industry faces today are infrastructure,regulatory, availability of product bouquet, rising inflation, intercultural differencesand the biggest amongst them the shortage of skilled manpower.

India’s travellers and hotel guests are not very kind in their praise as well.Indian guests certainly expect more. More in terms of value for money, particularly ontheir own home turf. So, one must understand that their expectations are high, especiallyin cuisine and personalized service. Be it Jain food or hand faucets, a hotel must adaptto cater to its captive audience, and ensure excellence and consistency. Indians are notnecessarily more finicky, but their expectations make them look tougher than what theyactually are.

Recessionary Trends

Today, the rapid and deep-seeded recessionary trends and lack of business confidencehave indeed placed the hospitality industry’s growth prospects in an extremelyprecarious and unknown territory. If the market conditions were to further deteriorate,there will be a significant impact on demand growth, revenue performance and profitabilityof hotel companies.

The pace of growth in tourist arrivals into the country has slowed down to 2.8 per centin the current year from 9.9 per cent in the previous year due to prolonged crisis inEurope and a slump in the US.

The executive management at hotels will have to constantly innovate and adopt dynamicbusiness practices to bring about inherent flexibility in operating cost structures. Whilehotels have already rationalized key fixed input costs like payroll and raw materials,continued improvements will be difficult to come by and hence guest satisfaction levelsand employee morale will be negatively impacted. Customization, re-alignment andre-engineering of processes will play a pivotal role in determining the extent to which acompany is geared operationally to deliver consistent profitability.

Debt restructuring and long-term capital availability

The rapidly changing macroeconomic environment and rationalization in asset values willprovide attractive opportunities for acquisitions of hotel assets. However, to leverageopportunities for growth and expansion, it will be necessary to focus on immediateimprovements in the health of the organization’s balance sheet. A key challenge wouldbe the implementation of debt restructuring strategy and plan for long-term capitalavailability.

Multi-channel customers

Rapid technological developments are now embedded in the consumer travel experience. Itis no longer an option for hotel companies to watch from the sidelines. Internet isincreasingly becoming an important medium for communication, generating reservations, andmarketing across hotel categories. At the property level, while direct enquiries continueto contribute the maximum share of reservations, online sources such as the globaldistribution systems, hotel websites, online travel agencies and other online reservationssystems are slowly gaining share. Presence on online channels enhances a property’svisibility and reach, two vital components required to generate business in a highlycompetitive environment. Within online marketing, hotel managers are beginning to usetools such as search engine optimization, pay per click, mobile website marketing, socialmarketing, and virtual marketing. Moreover, having a dedicated online marketing teameither at the property level or chain level that focuses on reputation management,adoption of multi channel initiatives and website analytics is a rising trend within theIndian hospitality industry.

Brand power and customer loyalty

The power of brands is proving to be a key influence on the hotel sector, particularlyin the new "asset light" or "asset right" era which has emerged in thelast decade of increasingly franchising out or managing hotels. All of the largeinternational hotel companies are now effectively brand managers and need to build,maintain and differentiate their brands across all segments from budget to luxury and inall markets, whether global or local.

Responsible business

As part of a greater transparency and engagement with their consumers, all companiesare increasingly trying to understand and quantify their total impact on society. Thatmeans going beyond simply cash and profits and measuring the wider contribution to societysuch as job creation and taxes, alongside environmental and social impact from carbonemissions, skills development and community contribution.


The Company has in place adequate systems of internal control commensurate with itssize and the nature of its operations. Internal controls and an effective risk managementregime are integral to the Company’s continued operation. Overall responsibility forthe risk management processes adopted by the Company lies with the Board. On behalf of theBoard, the Audit Committee reviews the effectiveness of the Company’s internalcontrol policies and procedures for the identification, assessment and reporting of risks.

In order to maintain oversight and seek comfort as to Company’s policies andprocedures, an independent internal auditor was appointed to act as a tool to rigorouslyand continuously test Company procedures. The Risk Management & Internal Controlprocesses are periodically audited by the internal auditor as well as the statutoryauditors. The Audit Committee of the Board is kept abreast on a regular basis, about thekey observations during such audits, and follow-up measures taken. A detailed note on thefunctioning of the Audit Committee forms a part of the chapter on Corporate Governance ofthis Annual Report. Due to evolving and expanding nature of its business activities, theCompany faces new challenges of data, system and process security, emerging out ofbusiness transactions and processes, which are large in volume and varied in nature. TheCompany has an internal control mechanism to facilitate formulation and revision ofpolicies and guidelines in order to align them with changing business needs.

The internal control policy is supported by other well documented procedures andguideline for specific areas of operation. The documents typically enlist a standardoperating procedure along with responsibility and authority level matrix to ensureeffective implementation of the same. These have been designed to provide reasonableassurance with regard to recording and providing reliable financial and operationalinformation, complying with applicable statutes, safeguarding assets from unauthorized useor losses, executing transactions with proper authorization and ensuring compliance ofcorporate policies.


The objective of risk management is to develop a culture and capabilities ofidentifying, assessing & mitigating the risk at all levels/functions across theorganization, by instituting framework, processes/policies suitable to the Company andcreating risk awareness which ultimately ensures the Company’s sustainability in thebusiness and provide benefits to the Company’s stakeholders and customers.

We describe the Company’s principal risks and uncertainties below. We provideinformation on the nature of the risk, actions to mitigate risk exposure and an indicationof the significance of the risk by reference to its potential impact on the Company’sbusiness, financial condition and results of operation and/or the likelihood of the riskmaterialising. Not all potential risks are listed below.

Some risks are excluded because the Board considers them not to be material to theCompany as a whole. Additionally, there may be risks and uncertainties not presently knownto the Directors, or which the Directors currently deem immaterial that may also have anadverse effect upon the Company.

Market and Hotel industry risks

The Company’s operations and their results are subject to a number of factors thatcould adversely affect its business, many of which are common to the hotel industry andbeyond the Company’s control, such as the global economic downturn, changes in travelpatterns or in the structure of the travel industry and the increase of acts of God. Theimpact of any of these factors (or a combination of them) may adversely affect sustainedlevels of occupancy, room rates and/or hotel values. Although management continually seeksto identify risks at the earliest opportunity, many of these risks are beyond the controlof the Company. The Company has in place contingency and recovery plans to enable it torespond to major incidents or crises and takes steps to minimise these exposures to thegreatest extent possible.

Financial Risks

The Company is exposed to a variety of risks associated with the Company’sexisting bank borrowings and its ability to satisfy debt covenants. Failure to satisfyobligations under any current or future financing arrangements could give rise to defaultrisk and require the Company to refinance its borrowings. The Board monitors funding needsregularly. Financial ratios are monitored and sensitized as part of normal financialplanning procedures.

Operational Risk

Operational risks are assessed primarily on three dimensions, namely, business processeffectiveness, compliance to policies and procedures and strength of underlying controls.Given the inherent nature of the product - which offers flexibility in terms of usageacross various resorts and seasons - the Company may not be able to make available thechoice of location/dates desired by the customers on every occasion, which could result indissatisfaction. To mitigate these risks, the Company invests significant resources insystems and processes to ensure quality of service and overall experience of thecustomers. As regards room inventory, the Company has been judicious in the use ofdifferent options - fresh developments, expansions, leases of different durations andacquisitions - to maintain a balance between the demand and the supply.

Project Implementation Risk

Your Company may be impacted by delays in implementation of projects which would resultin increasing project cost and loss of potential revenue. To mitigate this risk, theCompany has in place an experienced project team supported by the leading externaltechnical consultants and a dedicated project management team. The Company will endeavourto complete its projects on time at optimal cost so as to maximize the profitability.

Socio-Economic Risks

The global economic slowdown affected India and the hospitality industry. Although thesituation has improved considerably, such cyclical downturns may continue to resurface inthe future. Besides, inflation continues to be on the high side. If such situationpersists, it might adversely affect consumer confidence and impact the ability of peopleto spend on discretionary items, affecting the growth of the industry. The Companyrecognizes these risks and has initiated measures to minimize its impact.

Information technology and systems

The Company is reliant on certain technologies and systems for the operation of itsbusiness. Any material disruption or slowdown of the Company’s information systems,especially any failures relating to its reservation system, could cause valuableinformation to be lost or operations to be delayed. In addition, the Company and itshotels maintain personal customer data. Such information may be misused by employees ofthe Company or other outsiders if there is an inappropriate or unauthorised access to therelevant information systems. The Company invests in appropriate IT systems so as toobtain as much operational resilience as possible.

Key senior personnel and management

The success of the Company’s business is partially attributable to the efforts andabilities of its senior managers and key executives. Failure to retain its executivemanagement team or other key personnel may threaten the success of the Company’soperations. The Company has appropriate systems in place for recruitment, reward an

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Key Information

Key Executives:

Viidyaa Moravekar , Non Executive Director

Siddhartha Moravekar , Director

Vilas Mitbawkar , Director

Hemlatha Sawant , Director

Company Head Office / Quarters:

Aman Chambers 4th Floor,
Veer Savarkar Road Prabhadevi,
Phone : Maharashtra-91-022-66164000 / Maharashtra-
Fax : Maharashtra- / Maharashtra-
E-mail :
Web :


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