MARKET SCENARIO
Indias Hospitality sector is showing fast recovery post the Covid 19 Pandemic that
crippled it. There has been unprecedented Zeal through 2022 to make up for the lost travel
opportunities during the pandemic lockdowns. The improving dynamics of Players has
resulted in supply additions that were deferred due to Covid-19, gathering momentum during
fiscals 2022 and 2023
The Tourism and hospitality sectors are a significant source of foreign exchange and
crucial for socioeconomic growth. According to the statistics of India Brand Equity
Foundations (IBEF), the tourism Industry and hospitality industry in India is growing on
robust demand, and the travel market is projected to reach US $ 125 billion by FY 27 form
as estimated US $75 billion in FY 20. The influx of International tourists to India is
projected to reach 30.05 million by 2028. FDI inflows in the tourism sector is projected
to contribute US $56 billion forex to GDP and generate 140 million jobs.
According to the Bureau of immigration (BOI) report, the numbers have risen after the
pandemic. Around 7.5 lakh Indians went abroad for higher education in 2022, a drastic
increase from 4.5 lakhs in 2017 and 2.6 lakhs in 2020. India surpassed China in terms of
the most international students in the US in 2022.
INDIAN HOSPITALITY AND TOURISM INDUSTRY
FY 2022-23 continued to be a year of strong recovery in the Indian travel and tourism
industry. Restrictions on flights were relaxed in most countries into and from India.
Travel restrictions, documentation and certifications were also progressively relaxed for
travel within India. Consequently, demand for accommodation grew significantly, mainly
arising from domestic leisure travel, weddings, social events, conferences and resumption
of business travel within the country. Foreign tourist arrivals were 6.19 million for the
calendar year 2022 in comparison with 1.52 million in 2021.
This constituted 57% of 2019 foreign tourist arrivals at 10.93 million (Government of
India, Ministry of Tourism Annual Report - 2022-23
Outlook
The outlook for the Indian hospitality industry during 2023 remains positive. As the
International tourism provides an excellent outlet for relaxation and motivates the
travellers for exploration of new areas, visiting religious places, traveling for
pleasure, attending and participating in sports events, professional and business visits.
We also witness people traveling more in numbers for enhancing prestige and status. Hence
the future of International Tourism is quite bright.
After international travel, Indians spent most on maintenance of close relatives,
followed by gifts, investment in equity and overseas education.
Outward Remittances - LRS: Snapshot of the Indian money changing industry.
| Item |
2022 - 2023 |
2021 - 2022 |
| 1.outward Remitances Under The LRS |
27140.65 |
19610.77 |
| 1.1. Deposit |
1011.07 |
830.05 |
| 1.2 Purchase Of Immovable Property |
188.73 |
112.90 |
| 1.3 Investment In Equity / Dept |
1256.15 |
746.57 |
| 1.4. Gift |
3005.27 |
2336.29 |
| 1.5 Donations |
12.78 |
16.55 |
| 1.6 Travel |
13662.15 |
6909.04 |
| 1.7 Maintenance Of Dos Relatives |
4174.06 |
3302.37 |
| 1.8 Medical Treatment |
55.74 |
37.79 |
| 1.9 Studies Abroad |
3427.81 |
5165.33 |
| 1.10 Others |
346.89 |
153.88 |
Indians took out $ 27.14 billion (around Rs 2.24 lakh crore) during the year ended
March 2023 under the Liberalised Remittances Scheme of the Reserve bank of India, a rise
of 38.39 per cent when compared to $ 19.61 billion in the previous year ended March 2022.
The outflow works out to just 4.54 per cent of Indias forex reserves of $ 600 billion.
Indians spent around $ 13.66 billion (over Rs 1.13 lakh crore) on overseas travel in
the current financial year, a 98 per cent jump from the same period of last year, the
latest data from the RBI showed. The total amount spent on travel outside India was $ 6.90
billion under the LRS In the same period of FY2022. The amount spent on foreign travels
during the first 10 months of fiscal 2022-23 almost doubled when compared to the same
period of previous fiscal as flights resumed and travel restrictions were eased by
countries in the wake of subsiding Covid pandemic.
The data showed that travel constitutes around 50 per cent of the total outward
remittances allowed under the LRS for resident individuals in FY2023. During 2021-22, the
share of travel was 35 per cent of the overall international spending by Indians. The
overseas education segment had a contradicting year with 3.42 bn$ against 5.16 bn$ in FY
2021-22.
Overseas education:
More than 1.3 million Indian students went abroad for studies in 2022, as per Ministry
of External Affairs data. This was the highest ever! A study by revealed the number of
students planning to go overseas in 2023 is likely to be more than 1.5 million. The
increasing desire to study overseas is credited to the pent-up demand from the pandemics
two-year duration. This has got further pronounced because of growing aspiration and
affordability among the middle-class students from Tier II and Tier III cities.
The top countries for Indian students are US, Canada, UK, Australia and Western
European countries like Germany, France and Netherlands. While the maximum number of
students continue pursuing post-graduate degrees and diplomas, the number of Indian
students pursuing under-graduate degrees is rapidly growing as well. According to a
Report, most international students in the US, Canada and Western Europe (about 75%) apply
for undergraduate and graduate programmes, and more than half choose to enrol in
engineering, maths, computer science, or business and management courses.
India is second to China when it comes to students pursuing international courses.
Apart from exciting research opportunities, most countries provide a stay back option on
visas to foreign students for job search. The major draw is exposure to multiculturalism,
among other factors listed below:
• Attractive salary packages (44%)
•High quality of education (33%)
• Pursue niche courses (17%)
• Gain international exposure (6%)
Which Indian states send most students abroad?
| •Andhra Pradesh (12%) |
•Gujarat (8%) |
| •Punjab (12%) |
•Tamil Nadu (7%) |
| •Maharashtra (11%) |
•Karnataka (5%) |
Which Indian states send most students abroad?
As you can see from the data above, most students from Andhra Pradesh, Punjab, and
Maharashtra migrate abroad, which are among the richest Indian states with presumably high
awareness of the benefits of foreign education.
In 2022, about 750 thousand students from India emigrated to study abroad. The number
of students emigrating from India was the highest that year. Australia, Canada, and the
United States of America were the countries with the highest numbers of Indian students
during the measured time period.
| United Arab emirates |
1,64,000 |
| Canada |
1,83,300 |
| USA |
4,65,000 |
| Australia |
1,00,009 |
| Saudi Arabia |
65,000 |
| United Kingdom |
55,465 |
Opportunities:
Presently in India roughly 33 active non-bank AD cat IIs share the market with
presence across the countrys length and breadth. Our peers cover the areas from Jammu
until Kanyakumari and from the remote part of the west starting in Gujarat until the end
of the rising sun. With a favourable market and positive sentiment, your company will
explore the best possible way to grow its business activities. Airport counters, sea ports
and border check points pose a profitable business module which is being explored with the
best man power available and various other opportunities owing to market consolidation is
being considered. Further, on the technology driven business module with advent of RBI
norms allowing Vkyc and online Form A2 submission system will work favorably on the AD II
side thereby improving the compliance mechanism and ease of doing business. Moreover, we
are planning to accelerate our growth via inorganic methods and organic methods like
branch expansions in Punjab, Kerala, West Bengal, Vizag, Vijaywada, Indore etc., plans are
also under pipeline to explore international presence in Canada & Singapore.
RISK MANAGEMENT FRAMEWORK
The Company has a Risk Management Framework, which provides the mechanism for risk
assessment and mitigation.
Forex Business - Risk Management
Corporate & Retail Business : Sale & Encashment of Currency Notes, Prepaid
Cards As corporate require a minimum processing time, we are exposed to Credit risk which
is mitigated by Customer Acceptance Policy and Credit Policy where customer is profiled as
per his business type, market standing, financial strength and limits are fixed and
monitored with system level controls.
Outward Remittance Business & Wholesale Business: Sale & Encashment of Currency
Notes
There is minimal risk as all Outward remittance transactions are booked back to back
with the bank treasury.
Depreciation of Currency has some business impact, as there is postponement of
transactions by customers during periods of extreme volatility.
Import & Exports are hedged to minimize exchange volatility through forwards
contracts and coverings with overseas supplier / buyer.
INTERNAL CONTROLS AND SYSTEMS
Prithvi Exchange (India) Limited has an adequate system of internal control in place
which has been designed to provide a reasonable assurance with regard to maintaining of
proper accounting controls, monitoring of operations, protecting as set from unauthorized
use or losses, Adhering compliance and regulations to ensure the reliability and integrity
of reporting financial information.
MATERIAL DEVELOPMENTS IN HUMAN RESOURCES
Value based policies have been laid down to attract, train, retain and motivate
employees. Your company continuously takes steps to maintain a competitive, healthy and
harmonious work environment. As on 31 March, 2023, there were 99 employees in the company.
DISCLOSURE OF ACCOUNTING TREATMENT
The company has adopted Indian Accounting Standards ("IND AS") with effect
from April1, 2016. Financial Statements for the year ended 31st March, 2023 have been
prepared in accordance with IND AS notified under the Companies (Indian Accounting
Standards) Rules, 2015 as amended time to time, read with section 133 and other applicable
provisions of the Companies Act, 2013.
DETAILS OF SIGNIFICANT KEY FINANCIAL RATIOS
| Particulars |
2022 - 2023 |
2021 - 2022 |
Variance % |
| Current ratio |
2.06 |
2.78 |
-25.92 % |
| Debt -Equity ratio |
0.19 |
0.14 |
34.11 % |
| Inventory Turnover ratio |
385.78 |
280.14 |
37.71 % |
| Net Profit ratio |
0.002 |
0.000 |
2273.91% |
| Return on Capital employed |
0.19 |
0.01 |
1399.62% |
The above comparison is on Standalone Financial Statement. The details of Key Financial
ratios with explanation is provided in Note: 37 of Standalone financial Statement.
CAUTIONARY STATEMENT
Statements in this Management Discussion and Analysis Report describing the Companys
objectives, projections, estimates and expectations may be forward looking statements
within the meaning of applicable laws and regulations. Actual results might differ
substantially or materially from those expressed or implied. Important developments that
could affect the Companys operations include significant changes in political and
economic condition.
COMPLIANCE
The Company Continued to vigorously pursue its commitment in adhering to the highest
standards ofcompliance. The compliance function in the Company plays a pivotal role in
ensuring that the overall business of the Company is conducted in accordance with
regulatory prescriptions. The Compliance function on facilitates improvement in the
compliance culture in the Company through various enablers like dissemination on of
regulatory changes and spreading compliance knowledge through training, circulars and
other means of communication on and direct interaction.
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