Beacon Trusteeship Ltd Management Discussions

You should read the following discussion of our financial condition and results of operations together with our Restated Consolidated financial statements included in the Red Herring Prospectus. You should also read the section entitled "Risk Factors" beginning on page 27, which discusses several factors, risks and contingencies that could affect our financial condition and results of operations. The following discussion relates to our Company and is based on our Restated Consolidated financial statements, which have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI Regulations. Portions of the following discussion are also based on internally prepared statistical information and on other sources. Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year ("Fiscal Year") are to the twelve-month period ended March 31 of that year.

The financial statements have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI (ICDR) Regulations and restated which is included in this Red Herring Prospectus under the section titled "Restated Financial Information" beginning on page 161 of this Red Herring Prospectus. The restated financial statements have been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. We do not provide a reconciliation of our restated financial statements to US GAAP or IFRS and we have not otherwise quantified or identified the impact of the differences between Indian GAAP and U.S. GAAP or IFRS as applied to our restated financial statements. This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those described under "Risk Factors" and "Forward Looking Statements" beginning on pages 27 and 16 respectively, and elsewhere in this Red Herring Prospectus Accordingly, the degree to which the financial statements in this Red Herring Prospectus will provide meaningful information depend entirely on such potential investors level of familiarity with Indian accounting practices. Please also refer to section titled "Presentation of Financial, Industry and Market data" beginning on page 14 of this Red Herring Prospectus.

BUSINESS OVERVIEW

Our Company was originally incorporated as Public Limited Company in the name of "Beacon Trusteeship Limited" under the provisions of the Companies Act, 2013 vide Certificate of Incorporation dated December 23, 2015 issued by the Deputy Registrar of Companies, Mumbai. Our company is a SEBI registered Debenture Trustee vide Registration No. IND000000569, which provides wide range of trusteeship service across various sectors such as Debenture Trustee Services, Security Trustee Services, Trustee to Alternate Investment Fund (AIF), Trustee to ESOP, Securitization Trustee, Bond Trusteeship Services, Escrow Services, Safe keeping and other allied services. Our company is currently managed by group of professionals having extensive experience in the field of Investment Banking, Finance, Debt Syndication and financial services at large. Our company provides trusteeship services by acting as intermediary between the Issuer Company or entity and investors. Our company as a Debenture Trustee plays a pivotal role in Our Scope of work under trusteeship services includes Due diligence, Custodial services, Monitoring compliance, Documentation, Disclosures, Record keeping etc. As a trustee, our company plays a crucial role in maintaining investor confidence by safeguarding their interests and promoting transparency and accountability. Our Company with the help of a technology, a dedicated legal and compliance team for each of our products viz. Debenture Trusteeship, Security Trustee for Loans, Alternative Investment Funds, Securitization and Escrow, we are able to execute transactions as per our clients needs. Our company has built its own client-facing ERP System, a dedicated platform for Securitization & a Covenant Monitoring Tech Platform, demonstrating our adaption and flexibility to the new age business and ease of doing business for our customers.

FINANCIAL KPIs OF COMPANY

The financial performance of the company for the last three years as per restated Consolidated Financial Statement are:

Particulars		For the Year ended on
	31-Mar-24	31-Mar-23	31-Mar-22
Revenue from Operations ( in Lakhs)	1,991.56	1,480.56	1,002.90
Growth in Revenue from Operations (%)	34.51%	47.63%	-
EBITDA ( in Lakhs)	689.29	499.86	487.67
EBITDA Margin (%)	34.61%	33.76%	48.63%

 

Particulars		For the Year ended on
	31-Mar-24	31-Mar-23	31-Mar-22
Profit After Tax ( in Lakhs)	516.36	384.64	361.59
PAT Margin (%)	25.93%	25.98%	36.05%
RoE (%)	31.12%	31.82%	50.52%
Operating Cash Flows ( in Lakhs)	503.99	(67.20)	66.25

Notes:

1) Revenue from Operations means the Revenue from Operations as appearing in the Restated Consolidated Financial Statements.

2) Growth in Revenue from Operations (%) is calculated as a percentage of Revenue from Operations of the relevant period minus Revenue from Operations of the preceding period, divided by Revenue from Operations of the preceding period.

3) EBITDA is calculated as profit for the period / year, plus tax expenses (consisting of current tax, deferred tax and current taxes relating to earlier years), finance costs and depreciation and amortization expenses reduced by other Income.

4) EBITDA Margin (%) is calculated as EBITDA divided by Revenue from Operations.

5) Profit after Tax Means Profit for the period/year as appearing in the Restated Consolidated Financial Statements.

6) PAT Margin (%) is calculated as Profit for the year/period as a percentage of Revenue from Operations.

7) RoE (Return on Equity) (%) is calculated as net profit after tax for the year / period divided by Average Shareholder Equity.

8) Operating cash flows means net cash generated from operating activities as mentioned in the Restated Consolidated Financial Statements.

OUR BUSINESS MODEL

Our spectrum of services are broadly divided into the following categories.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO LAST AUDITED BALANCE SHEET:

After the date of last Audited accounts i.e. March 31, 2024, the Directors of our Company confirm that, there have not been any significant material developments except mentioned below;

On April 05, 2024, Company has acquired 100% stake in Beacon Investor Holdings Private Limited (Formerly known as Beacon RTA Services Private Limited) from existing shareholders for a consideration of 1.00 Lakhs.

FACTORS AFFECTING OUR FUTURE RESULTS OF OPERATIONS:

Our Companys future results of operations could be affected potentially by the following factors:

Our dependence on our key personnel, including our Directors and senior management; Our ability to successfully implement our business strategy and plans;

General economic and business conditions in the markets in which we operate and in the local, regional, national and international economies; Changes in political and social conditions in India, the monetary and interest rate policies of India and other countries; Changes in government policies and regulatory actions that apply to or affect our business; Inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices; The performance of the financial markets in India and globally; The occurrence of natural disasters or calamities; Other factors beyond our control; Global GDP growth; Competition from existing players; Our dependence on limited number of customers/suppliers/brands for a significant portion of our revenues; Failure to obtain any applicable approvals, licenses, registrations and permits in a timely manner; Failure to adapt to the changing technology in our industry of operation may adversely affect our business and financial condition; Conflicts of interest with affiliated companies, the promoter group and other related parties; Our ability to expand our geographical area of operation; Concentration of ownership among our Promoters.

OUR SIGNIFICANT ACCOUNTING POLICIES:

For Significant accounting policies please refer Significant Accounting Policies and Notes to accounts, "Annexure IV" beginning under Chapter titled "Restated Financial Information" beginning on page 161 of this Red Herring Prospectus.

RESULTS OF OUR OPERATION

The following table sets forth detailed total income data from our Restated Consolidated Statement of Profit and Loss for the financial year ended on March 31, 2024, March 31, 2023 and March 31, 2022, the components of which are also expressed as a percentage increase from previous year and also percentage of total revenue from operations for such years.

( in Lakhs)

	31-Mar-24		31-Mar-23		31-Mar-22
Particular	in Lakhs	% of Total Income	in Lakhs	% of Total Income	in Lakhs	% of Total Income
Revenue from operations	1,991.56	95.24%	1,480.56	94.16%	1,002.90	95.60%
Other Income	99.64	4.76%	91.80	5.84%	46.12	4.40%
Total Income	2,091.20	100.00%	1,572.36	100.00%	1,049.02	100.00%
Expenses
Employee benefits expense	742.88	35.52%	622.12	39.57%	339.89	32.40%
Finance Costs	0.00	0.00%	0.00	0.00%	9.53	0.91%
Depreciation and amortisation expenses	81.95	3.92%	56.67	3.60%	34.03	3.24%

 

	31-Mar-24		31-Mar-23		31-Mar-22
Particular	in Lakhs	% of Total Income	in Lakhs	% of Total Income	in Lakhs	% of Total Income
Other expenses	561.10	26.83%	360.41	22.92%	177.33	16.90%
Total Expenses	1,385.93	66.27%	1,039.20	66.09%	560.78	53.46%
Profit / (Loss) before share in net profit
/ (loss) of Associates, exceptional items and tax	705.27	33.73%	533.16	33.91%	488.24	46.54%
Share in net profit / (loss) of Associates	1.71	0.08%	1.83	0.12%	1.99	0.19%
Exceptional Items	0.00	0.00%	0.00	0.00%	0.00	0.00%
Profit before Tax	706.98	33.81%	534.99	34.02%	490.23	46.73%
Total tax expense	190.62	9.12%	150.35	9.56%	128.65	12.26%
Profit and Loss for the Year as Restated	516.36	24.69%	384.64	24.46%	361.58	34.47%

The following table sets forth detailed total income data from our Restated Consolidated Statement of Profit and Loss for the financial years 2024, 2023 and 2022, the components of which are also expressed as a percentage increase from previous year and also percentage of total revenue from operations for such years.

( in Lakhs)

Particular	For the Year end on
	31-Mar-24	31-Mar-23	31-Mar-22
Revenue from operations	1,991.56	1,480.56	1,002.90
% of growth	34.51%	47.63%
Other Income	99.64	91.80	46.12
% of growth	8.54%	99.05%
Total Income	2,091.20	1,572.36	1,049.02
% of growth	33.00%	49.89%
Expenses
Employee benefits expense	742.88	622.12	339.89
% Increase/(Decrease)	19.41%	83.03%
Finance Costs	-	-	9.53
% Increase/(Decrease)	N.A.	N.A.
Depreciation and amortization expenses	81.95	56.67	34.03
% Increase/(Decrease)	44.61%	66.55%
Other expenses	561.10	360.41	177.33
% Increase/(Decrease)	55.68%	103.24%
Total Expenses	1,385.93	1,039.20	560.78
% to Total Income	66.27%	66.09%	53.46%
Profit / (Loss) before share in net profit / (loss) of
	705.27	533.16	488.24
Associates, exceptional items and tax
% to Total Income	33.73%	33.91%	46.54%
Share in net profit / (loss) of Associates	1.71	1.83	1.99
Exceptional Items	-	-	-
Profit before Tax	706.98	534.99	490.23

 

Particular	For the Year end on
	31-Mar-24	31-Mar-23	31-Mar-22
Total tax expense	190.62	150.35	128.65
Profit and Loss after tax for the Year as Restated	516.36	384.64	361.58
% to Total Income	24.69%	24.46%	34.47%
Profit and Loss for the Year as Restated	516.36	384.64	361.58
% Increase/(Decrease)	34.25%	6.38%

COMPARISON OF FY 2023-24 WITH FY 2022-23: REVENUE: Revenue from operations

Our Company is engaged in the business of Trusteeship, Agency & Administration service. The Company offers its services as a Trustee for Debt Securities (Bonds and Debentures), Loans extended to corporate debtors by banks and financial institutions, Alternative Investment Funds (AIF), Real Estate Investment Trust (REIT), Infrastructure Investment Trust (InvIT), Securitization Trustee (Direct Assignment, Pass Through Certificates, Securitized Debt Instruments etc.). The agency services primarily relate to managing & monitoring syndicated credit facilities, Escrow Accounts, Trust & Retention Account, Safe custody of documents, etc. The Total Revenue from operations for the year ended on FY 2023-24 was 1,991.56 lakh as compared to 1,480.56 lakh during the FY 2022-23. Revenue from sale of services related to Debenture Trustee constitutes 46.06%, Revenue from sale of services related to Alternate Investment Fund constitutes 9.75%, Revenue from sale of services related to Security Trustee constitutes 25.18%, Revenue from sale of services related to Securitization Trustee constitutes 12.76%, Revenue from sale of services related to Escrow Agent constitutes 4.58% and remaining services constitutes 0.73% of total revenue from operations for FY 2023-24. Revenue from operations increased by 34.51% from previous year i.e. FY 2022-23 mainly due to increase in customer base and increase in realization per client. Following are the segment wise and geography wise bifurcation of Revenue from Operations.

Particulars of Revenue Segment wise (Amt. in Lakhs)

Particulars	For the year ended 31st March, 2024	Percentage	For the year ended 31st March, 2023	Percentage
Alternate Investment Fund	194.10	9.75%	167.90	11.34%
Bond Trustee	19.02	0.96%	16.88	1.14%
Debenture Trustee	917.24	46.06%	830.62	56.10%
Escrow Agent	91.21	4.58%	46.51	3.14%
Other related services	14.47	0.73%	37.17	2.51%
Security Trustee	501.42	25.18%	205.47	13.88%
Securitization Trustee	254.11	12.76%	176.01	11.89%
Total	1,991.56	100.00%	1,480.56	100.00%

Particulars of Revenue Geographic wise (Amt. in Lakhs)

State / Country	For the year ended 31st March, 2024	Percentage	For the year ended 31st March, 2023	Percentage
Himachal Pradesh	3.62	0.18%	4.73	0.32%
Punjab	5.94	0.30%	4.69	0.32%
Uttarakhand	5.19	0.26%	-	0.00%
Haryana	52.83	2.65%	37.77	2.55%
Delhi	109.01	5.47%	99.21	6.70%
Rajasthan	16.91	0.85%	18.32	1.24%
Uttar Pradesh	36.82	1.85%	30.8	2.08%
Bihar	8.07	0.41%	3.28	0.22%
West Bengal	3.56	0.18%	0.4	0.03%
Odisha	8.73	0.44%	2.35	0.16%
Chattisgarh	2.71	0.14%	1.1	0.07%
Madhya Pradesh	2.7	0.14%	5.04	0.34%
Gujarat	53.14	2.67%	53.53	3.62%
Maharashtra	1,341.54	67.36%	996.66	67.32%

Particulars of Revenue Geographic wise

State / Country	For the year ended 31st March, 2024	Percentage	For the year ended 31st March, 2023	Percentage
Karnataka	139.61	7.01%	69.09	4.67%
Kerala	4.01	0.20%	8.09	0.55%
Tamil Nadu	122.4	6.15%	100.27	6.77%
Telangana	21.11	1.06%	11.99	0.81%
Andhra Pradesh	29.17	1.46%	26.11	1.76%
Ladakh	-	0.00%	0.5	0.03%
Singapore	2.25	0.11%	3.6	0.24%
Gift City	16.08	0.81%	3.02	0.20%
Total	1,991.56	100.00%	1,480.56	100.00%

Other Income:

Other income of the company was 99.64 lakhs and 91.80 lakhs for FY 2023-24 and FY 2022-23 respectively showing an increase of 8.54% from previous year i.e. FY 2022-23. Other Income mainly includes interest income, rental income and dividend income. Increase in other income was mainly due to increase in interest income.

EXPENDITURE:

Employee Benefit Expenses

Employee Benefit expenses increased to 742.88 lakhs in FY 2023-24 from 622.12 lakhs in FY 2022-23 showing an increase of 19.41%. Employee Benefit Expenses mainly includes Salary, Wages & Bonus, Directors remuneration, Contribution to Gratuity, Contribution to Provident Fund and ESIC, staff welfare expenses, and Employee medical insurance expenses. Employee Benefit Expenses increased mainly due to salary raise.

Depreciation and Amortization

The Depreciation and amortization expense for FY 2023-24 was 81.95 lakhs as against 56.67 lakhs for FY 2022-23. Depreciation represents depreciation on Computer and Hardware, Leasehold Building including Improvement cost, furniture and fixtures, office equipment and Software. Increase in Depreciation and amortization expense was mainly due to amortization of Software purchased in the end of previous financial year.

Other Expenses

Other Expenses increased to 561.10 lakhs in FY 2023-24 from 360.41 lakhs in FY 2022-23 showing an increase of 103.24%. Other expense mainly includes Rent Expense, Legal & Professional charges, Brokerage & Commission, Travelling & Conveyance, Repairs & Maintenance Expenses, Payment to Auditors, Advertising Promotional Expenses, Advisory Fees, Car Lease charges, Electricity Expenses, Printing & Stationery, Telephone and communication expenses, and General Administration Expenses. Other expense increased mainly on account of increase in Legal & Professional charges (that are related to Trusteeship services provided) rent expense, and Brokerage & Commission (i.e. Referral fees paid to increase revenue from operation).

Profit / (Loss) before share in net profit / (loss) of Associates, exceptional items and tax

Due to above mentioned reasons, Profit before share in net profit / (loss) of Associates, exceptional items and tax for the FY 2023-24 was 33.73% of the total income and it was 33.91% of Total Income for the FY 2022-23. The Profit before share in net profit / (loss) of Associates, exceptional items and tax has increased to 705.27 lakhs in FY 2023-24 from 533.16 lakhs in FY 2022-23.

Profit after Tax (PAT)

Due to above mentioned reasons, PAT increased to 516.36 lakhs in FY 2023-24 from 384.64 lakhs in the FY 2022-23. PAT was 24.69% and 24.46% of Total Income of our company for the year ended on March 31, 2024 and March 31, 2023 respectively.

COMPARISON OF FY 2022-23 WITH FY 2021-22: INCOME: Revenue from operations

Our Company is engaged in the business of Trusteeship, Agency & Administration service. The Company offers its services as a Trustee for Debt Securities (Bonds and Debentures), Loans extended to corporate debtors by banks and financial institutions, Alternative Investment Funds (AIF), Real Estate Investment Trust (REIT), Infrastructure Investment Trust

(InvIT), Securitization Trustee (Direct Assignment, Pass Through Certificates, Securitized Debt Instruments etc.). The agency services primarily relate to managing & monitoring syndicated credit facilities, Escrow Accounts, Trust & Retention Account, Safe custody of documents, etc. The Total Revenue from operations for the year ended on FY 2022-23 was 1,480.56 lakh as compared to 1,002.90 lakh during the FY 2021-22. Revenue from sale of services related to Debenture Trustee constitutes 56.10%, Revenue from sale of services related to Alternate Investment Fund constitutes 11.34%, Revenue from sale of services related to Security Trustee constitutes 13.88%, Revenue from sale of services related to Securitization Trustee constitutes 11.89%, Revenue from sale of services related to Escrow Agent constitutes 3.14% and remaining services constitutes 2.51% of total revenue from operations for FY 2022-23. Revenue from operations increased by 47.63% from previous year i.e. FY 2021-22 due to increase in customer base and increase in realization per client. Following are the segment wise and geography wise bifurcation of Revenue from Operations.

Particulars of Revenue Segment wise (Amt. in Lakhs)

	For the year		For the year
Particulars	ended 31st March,	Percentage	ended 31st March,	Percentage
	2023		2022
Alternate Investment Fund	167.90	11.34%	137.74	13.73%
Bond Trustee	16.88	1.14%	14.45	1.44%
Debenture Trustee	830.62	56.10%	601.65	59.99%
Escrow Agent	46.51	3.14%	37.37	3.73%
Other related services	37.17	2.51%	10.00	1.00%
Security Trustee	205.47	13.88%	91.21	9.09%
Securitization Trustee	176.01	11.89%	110.48	11.02%
Total	1,480.56	100.00%	1,002.90	100.00%

Particulars of Revenue Geographic wise

(Amt. in Lakhs)

State / Country	For the year ended 31st March, 2023	Percentag e	For the year ended 31st March, 2022	Percentag e
Himachal Pradesh	4.73	0.32%	2.24	0.22%
Punjab	4.69	0.32%	3.24	0.32%
Chandigarh	-	0.00%	0.06	0.01%
Uttarakhand	-	0.00%	-	0.00%
Haryana	37.77	2.55%	32.39	3.23%
Delhi	99.21	6.70%	116.07	11.57%
Rajasthan	18.32	1.24%	16.12	1.61%
Uttar Pradesh	30.80	2.08%	27.45	2.74%
Bihar	3.28	0.22%	1.18	0.12%
West Bengal	0.40	0.03%	23.20	2.31%
Odisha	2.35	0.16%	0.87	0.09%
Chattisgarh	1.10	0.07%	1.49	0.15%
Madhya Pradesh	5.04	0.34%	4.19	0.42%
Gujarat	53.53	3.62%	65.20	6.50%
Daman & Diu	-	0.00%	1.25	0.12%
Dadra Nagar Haveli	-	0.00%	2.80	0.28%
Maharashtra	996.67	67.32%	582.99	58.13%
Karnataka	69.09	4.67%	47.03	4.69%
Kerala	8.09	0.55%	-	0.00%
Tamil Nadu	100.27	6.77%	41.25	4.11%
Telangana	11.99	0.81%	22.81	2.27%
Andhra Pradesh	26.11	1.76%	8.61	0.86%
Ladakh	0.50	0.03%	-	0.00%
Singapore	3.60	0.24%	0.33	0.03%
Gift City	3.02	0.20%	2.13	0.21%
Total	1,480.56	100.00%	1,002.90	100.00%

Other Income:

Other income of our company was 91.80 lakhs and 46.12 lakhs for FY 2022-23 and FY 2021-22 respectively. Other Income mainly includes interest income, rental income, Provision for bad and doubtful debts written back and Dividend income. Increase in other income from FY 21-22 to FY 22-23 was mainly due to increase in rental and interest income.

EXPENDITURE:

Employee Benefit Expenses

Employee Benefit expenses increased to 622.12 lakhs in FY 2022-23 from 339.89 lakhs in FY 2021-22 showing an increase of 83.03%. Employee Benefit Expenses mainly includes Salary, Wages & Bonus, Directors remuneration, Contribution to Gratuity, Contribution to Provident Fund and ESIC, staff welfare expenses, and Employee medical insurance expenses. Employee Benefit Expenses increased mainly due to salary raise and increase in employee count.

Finance Cost

Finance expense was Nil in FY 2022-23 as against 9.53 lakh in FY 2021-22 showing decrease of 100.00%. Finance costs include interest expense on borrowings.

Depreciation and Amortization

The Depreciation and amortization expense for FY 2022-23 was 56.67 lakh as against 34.03 lakhs for FY 2021-22 showing an increase of 66.55% from previous year. Depreciation represents depreciation on Computer and Hardware, Leasehold Building including Improvement cost, furniture and fixtures, office equipment and Software. Increase in Depreciation and amortization expense was mainly due to capital expenditure towards leasehold improvements.

Other Expenses

Other expenses increased to 360.41 lakhs in FY 2022-23 from 177.33 lakhs in FY 2021-22 showing increase of 103.24%. Other expense mainly includes Rent Expense, Legal & Professional charges, Brokerage & Commission, Travelling & Conveyance, Repairs & Maintenance Expenses, Payment to Auditors, Advertising Promotional Expenses, Advisory Fees, Car Lease charges, Electricity Expenses, Printing & Stationery, Telephone and communication expenses, and General Administration Expenses. Other expense increased mainly on account of increase in rent expense (due to addition of leasehold property to accommodate increase in employees) and increase in Brokerage & Commission (i.e. Referral fees paid to increase revenue from operation).

Profit / (Loss) before share in net profit / (loss) of Associates, exceptional items and tax

Due to above mentioned reasons, The Profit / (Loss) before share in net profit / (loss) of Associates, exceptional items and tax for the FY 2022-23 was 33.91% of the Total Income and it was 46.54% of Total Income for the FY 2021-22. The Profit before share in net profit / (loss) of Associates, exceptional items and tax increased to 533.16 lakhs in FY 2022-23 from

488.24 lakhs in FY 2021-22.

Profit after Tax (PAT)

Due to above mentioned reasons, PAT increased to 384.64 lakhs in FY 2022-23 from 361.59 lakhs in the FY 2021-22. PAT was 24.46% and 34.47% of Total Income of our company for the year ended on March 31, 2023 and March 31, 2022 respectively.

CASH FLOW BASED ON RESTATED CONSOLIDATED FINANCIAL STATEMENTS
Particular	Year/Period ended on
	31.03.2024	31.03.2023	31.03.2022
A. Cash Flow From Operating Activities	577.32	(67.19)	66.24
B. Cash Flow From Investing Activities	(73.33)	(13.83)	(55.98)
C. Cash Flow From Financing Activities	-	-	40.00
Net increase in cash and cash equivalents	503.99	(81.03)	50.26
Opening Balance Cash & Cash Equivalent	60.27	141.30	91.04
Closing Balance - Cash & Cash Equivalent	564.26	60.27	141.30

(Amount shown in brackets reflect cash outflow)

NET CASH FLOW FROM OPERATING ACTIVITIES

Net cash flow from operating activities comprises cash consumed / generated from operations, increase / decrease in working capital and increase / decrease in non-current / current liabilities.

Financial Year 2023-24

During the FY 2023-24, net cash flow generated from operating activities was 577.32 Lakhs. Profit before tax stood at 706.98 Lakhs. Primary adjustments were on account of Provision for Tax of (194.52) lakhs, depreciation and amortisation expenses of 81.95 Lakhs, Provision for Gratuity of 10.96 lakhs, Interest income of (96.47) lakhs, Dividend on shares of (0.21) Lakhs, Share in net profit / (loss) of Associates of (1.71) Lakhs, Operating cash flows before working capital changes was at 506.99 Lakhs during the FY 2023-24. Primary adjustments included Increase in Short term Provisions of

49.84 Lakhs, decrease in other current asset of 173.05 Lakhs, decrease in other current liability of (130.61) Lakhs, Decrease in Trade Payable of (0.41) Lakhs, an Increase in Other Non-Current Assets of (4.12) Lakhs, an Increase in Loans & Advances of (101.22) Lakhs, decrease in Trade Receivables of 83.80 Lakhs. Cash generated from operations during the FY 2023-24 was 577.32 Lakhs.

Financial Year 2022-23

During the FY 2022-23, net cash flow generated from operating activities was (67.20) Lakhs. Profit before tax stood at 534.99 Lakhs. Primary adjustments were on account of Provision for Tax of (150.35) lakhs, depreciation and amortisation expenses of 56.67 Lakhs, Provision for doubtful debts of 4.49 lakhs, Provision for Gratuity of 3.52 lakhs, Interest income of (76.08) lakhs, Dividend on shares of (0.16) Lakhs, Share in net profit / (loss) of Associates of (1.83) Lakhs, Operating cash flows before working capital changes was at 371.25 Lakhs during the FY 2022-23. Primary adjustments included Increase in Short term Provisions of 26.87 Lakhs, Increase in other current liability of 184.03 Lakhs, Decrease in Trade Payable of (29.91) Lakhs, an Increase in Other Non-Current Assets of (19.11) Lakhs, an Increase in Loans & Advances of (285.64) Lakhs, an Increase in Trade Receivables of (81.48) Lakhs, an Increase in Other Current Assets of (233.21) Lakhs. Cash generated from operations during the FY 2022-23 was (67.20) Lakhs.

Financial Year 2021-22

During the FY 2021-22, net cash flow generated from operating activities was 66.25 Lakhs. Profit before tax stood at 490.24 Lakhs. Primary adjustments were on account of Provision for Tax of (128.00) lakhs, depreciation and amortisation expenses of 34.03 Lakhs, Provision for doubtful debts of 7.83 lakhs, Provision for Gratuity of 5.80 lakhs, Interest income of (41.85) lakhs, Dividend on shares of (0.17) Lakhs, Share in net profit / (loss) of Associates of (1.99) lakhs. Operating cash flows before working capital changes was at 366.46 Lakhs during the FY 2021-22. Primary adjustments included Increase in Short term Provisions of 80.85 Lakhs, Increase in other current liability of 310.86 Lakhs, an Increase in Trade Payable of 16.91 Lakhs, an Increase in Other Non-Current Assets of 0.05 Lakhs, an Increase in Loans & Advances of (166.10) Lakhs, an Increase in Trade Receivables of (218.99) Lakhs, an Increase in Other Current Assets of (323.79) Lakhs. Cash generated from operations during the FY 2021-22 was 66.25 Lakhs.

NET CASH FLOW FROM INVESTING ACTIVITIES

Net cash flow from investing activities comprises proceeds from purchase and sale of fixed assets including capital work-in-progress, sale/adjustment of property, plant and equipment, increase in intangible assets and increase in Non-Current Investments.

Financial Year 2023-24

During the FY 2023-24, Net cash used in investing activities stood at (73.33) Lakhs as at the end of Financial Year 2023- 4 , primarily on account of net investment made in Fixed Assets of (175.27) lakhs, proceeds from sale of fixed assets of 5.26 lakhs, Interest Income received of 96.47 lakhs and Receipt of Dividend on shares of 0.21 lakhs.

Financial Year 2022-23

During the FY 2022-23, Net cash used in investing activities stood at (13.83) Lakhs as at the end of Financial Year 2022-

23, primarily on account of net investment made in Fixed Assets of (90.09) lakhs, proceeds from sale of non-current investments - Others of 0.03 lakhs, Interest Income received of 76.08 lakhs, Receipt of Dividend on shares of 0.16 lakhs and Profit/(loss) on sale of Investments of (0.01) Lakhs.

Financial Year 2021-22

During the FY 2021-22, Net cash used in investing activities stood at (55.99) Lakhs as at the end of Financial Year 2021-22, primarily on account of net investment made in Fixed Assets and Noncurrent investments - Others of (93.63) lakhs and (24.16) lakhs respectively, proceeds from sale of non-current investments - Others of 20.35 lakhs, Interest Income received of 41.85 lakhs, Receipt of Dividend on shares of 0.17 lakhs and Profit/(loss) on sale of Investments of (0.57) Lakhs.

NET CASH FLOW FROM FINANCING ACTIVITIES

Net cash flow from financing activities comprises impact due to business combination, proceeds / repayment of borrowing, interest and financial charges.

Financial Year 2023-24

Net cash generated from financing activities in financial year 2023-24 was 0.00 lakhs.

Financial Year 2022-23

Net cash generated from financing activities in financial year 2022-23 was 0.00 lakhs.

Financial Year 2021-22

Net cash inflow from financing activities in financial year 2021-22 was 40.00 lakhs comprising of Proceeds from offer of share capital of 40.00 lakhs.

RELATED PARTY TRANSACTIONS

For further information please refer "Annexure VI Note 24" under section "Restated Consolidated Financial Information" beginning from page no. 161 of this Red Herring Prospectus.

FINANCIAL RISKS

Our business operations activities are exposed to a variety of financial risks. The key financial risks include market risk

(including foreign currency risk and interest rate risk), credit risk and liquidity risk. Our Companys Management oversees the management of these risks. Our Companys management is responsible for formulating an appropriate financial risk governance framework for our Company and for periodically reviewing the same. Management ensures that financial risks are identified, measured and managed in accordance with our Companys policies and risk objectives. Our Board reviews and agrees policies for managing each of these risks, which are summarized below:

Market Risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of Companys assets and liabilities. The value of Companys assets and liabilities may change as a result of changes in interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

Credit Risk

Credit risk is the risk that a customer or counterparty to the given assets will fail to perform or fail to pay amounts due causing financial loss. The potential activities where credit risks may arise include from cash and cash equivalents, security deposits or other deposits and principally from credit exposures to customers relating to outstanding receivables. The maximum credit exposure associated with the assets is equal to the carrying amount. Our exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Credit risk is managed through credit approvals, establishing credit limits, and continuously monitoring the creditworthiness of customers to which our Company grants credit terms in the normal course of business.

Liquidity Risk

Liquidity risk is the risk that we will encounter difficulty in meeting the obligations associated with its financial liabilities that are proposed to be settled by delivering cash or other financial asset. Our financial planning has ensured, as far as possible, that there is sufficient liquidity to meet the liabilities whenever due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to our reputation. Management have practiced financial diligence and syndicated adequate liquidity in all business scenarios.

EFFECT OF INFLATION

We are affected by inflation as it has an impact on the operating cost, staff costs etc. In line with changing inflation rates, we rework our margins so as to absorb the inflationary impact.

INFORMATION REQUIRED AS PER ITEM (11) (II) (C) (iv) OF PART A OF SCHEDULE VI TO THE SEBI REGULATIONS, 2018:

1. Unusual or infrequent events or transactions

Except as described in this Red Herring Prospectus, there have been no other events or transactions to the best of our knowledge which may be described as "unusual" or "infrequent".

2. Significant economic changes that materially affected or are likely to affect income from continuing operations. Our business has been subject, and we expect it to continue to be subject to significant economic changes arising from the trends identified above in ‘Factors Affecting our Results of Operations and the uncertainties described in the section entitled "Risk Factors" beginning on page no. 27 of the Red Herring Prospectus. To our knowledge, except as we have described in the Red Herring Prospectus, there are no known factors which we expect to bring about significant economic changes.

3. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations.

Apart from the risks as disclosed under Section titled "Risk Factors" beginning on page no. 27 in this Red Herring Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

4. Future changes in relationship between costs and revenues, in case of events such as future increase in labour or material costs or prices that will cause a material change are known.

Our Companys future costs and revenues will be determined by demand/supply situation, both of the end products/services as well as the government policies and other economic factors.

5. Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or increased sales prices.

Our Company is engaged in the business of Trusteeship, Agency & Administration service. The Company offers its services as a Trustee for Debt Securities (Bonds and Debentures), Loans extended to corporate debtors by banks and financial institutions, Alternative Investment Funds (AIF), Real Estate Investment Trust (REIT), Infrastructure Investment Trust (InvIT), Securitization Trustee (Direct Assignment, Pass Through Certificates, Securitized Debt Instruments etc.). The agency services primarily relate to managing & monitoring syndicated credit facilities, Escrow Accounts, Trust & Retention Account, Safe custody of documents, etc. Increases in revenues are by and large linked to increases in assignments and also dependent on the price realization of our services.

6. Total turnover of each major industry segment in which the offeror company operated.

Our Company is engaged in the business of Trusteeship, Agency & Administration service. The Company offers its services as a Trustee for Debt Securities (Bonds and Debentures), Loans extended to corporate debtors by banks and financial institutions, Alternative Investment Funds (AIF), Real Estate Investment Trust (REIT), Infrastructure Investment Trust (InvIT), Securitization Trustee (Direct Assignment, Pass Through Certificates, Securitized Debt Instruments etc.). The agency services primarily relate to managing & monitoring syndicated credit facilities, Escrow Accounts, Trust & Retention Account, Safe custody of documents, etc. Relevant Industry data, as available, has been included in the chapter titled "Industry Overview" beginning on page no. 93 of this Red Herring Prospectus.

7. Status of any publicly announced new products or business segment.

Our Company is engaged in the business of Trusteeship, Agency & Administration service. The Company offers its services as a Trustee for Debt Securities (Bonds and Debentures), Loans extended to corporate debtors by banks and financial institutions, Alternative Investment Funds (AIF), Real Estate Investment Trust (REIT), Infrastructure Investment Trust (InvIT), Securitization Trustee (Direct Assignment, Pass Through Certificates, Securitized Debt Instruments etc.). The agency services primarily relate to managing & monitoring syndicated credit facilities, Escrow Accounts, Trust & Retention Account, Safe custody of documents, etc. Except as disclosed elsewhere in the Red Herring Prospectus, we have not announced and do not expect to announce in the near future any new products or business segments.

8. The extent to which business is seasonal.

Our Company is engaged in the business of Trusteeship, Agency & Administration service. The Company offers its services as a Trustee for Debt Securities (Bonds and Debentures), Loans extended to corporate debtors by banks and financial institutions, Alternative Investment Funds (AIF), Real Estate Investment Trust (REIT), Infrastructure Investment Trust (InvIT), Securitization Trustee (Direct Assignment, Pass Through Certificates, Securitized Debt Instruments etc.). The agency services primarily relate to managing & monitoring syndicated credit facilities, Escrow Accounts, Trust & Retention Account, Safe custody of documents, etc. Our Companys business is not seasonal in nature.

9. Any significant dependence on a single or few suppliers or customers.

The percentage of contribution of our Companys customer vis-?-vis the total revenue from operations respectively as on FY 2023-24, FY 2022-23 and FY 2021-22 is as follows:

Particulars	Top Customers as a percentage (%) of revenues
	FY 2023-24	FY 2022-23	FY 2021-22
Top 1	22.10%	12.15%	5.48%
Top 3	31.99%	25.76%	15.24%
Top 5	36.21%	31.18%	22.49%
Top 10	44.39%	41.99%	34.38%

Since, Company is into Service Industry major constituent of expense relates to expense related to employees and for other related expenses, Company do not have any material dependence on a single or few suppliers.

10. Competitive conditions:

We face competition from existing and potential competitors which is common for any business. We have, over a period, developed certain competitors who have been discussed in section titles "Business Overview" beginning on page no. 110 of this Red Herring Prospectus.