Prithvi Exchange (India) Ltd Management Discussions

ANNEXURE-A

GLOBAL ECONOMIC OVERVIEW

The global economy reflected a period of subdued growth for 2024-2025, increasing uncertainty, and persistent policy challenges. Major institutions, including the IMF, World Bank, and OECD, project global GDP growth to range between 2.3% and 3.3%, with a central tendency around 2.5-3.0%, down from earlier expectations due to rising trade tensions and geopolitical instability. Advanced economies are forecasted to grow modestly at 1.0-1.6%, while emerging markets may see stronger performance around 3.7-4.0%, led by India (6.3- 6.8%) and China (4.5%).

Trade disruptions, driven by escalating tariffs and dcglobalization, have reduced global trade growth and investment flows. Inflation is moderating globally expected to be around 4.2% in 2025 and easing further to 3.5% by 2026 but remains uneven across regions.

Monetary policy has begun casing in some economies, though central banks remain cautious amid fragile conditions. Technological advances, especially in Ah offer potential productivity gains but also raise labor market and equity concerns.

Overall, while consumer demand and select regional growth offer resilience, risks such as prolonged trade wars, policy fragmentation, and financial volatility continue to weigh heavily on the global economy.

OUTLOOK

As of mid-2025, the global economy is navigating a complex landscape marked by moderate recovery, lingering inflation, and geopolitical uncertainty. After a period of high interest rates aimed at curbing inflation, major central banks such as the U.S. Federal Reserve and the European Central Bank have begun cautiously shifting toward monetary easing, aiming to support slowing growth without reigniting price pressures.

The United States remains relatively resilient, supported by consumer spending and strong labor markets, while the Eurozone continues to face sluggish growth amid weak industrial output. Chinas economy shows signs of stabilization following stimulus efforts, but structural challenges like real estate debt and demographic shifts remain a drag.

Emerging markets arc seeing varied performance, with commodity exporters benefiting from stable prices, while others struggle with capital outflows and currency volatility. Looking ahead, the global outlook is cautiously optimistic, with modest growth expected in 2025, but downside risks persist due to geopolitical tensions, supply chain disruptions, and climate- related shocks.

INDIAN ECONOMIC OVERVIEW & OUTLOOK

Indias economy in 2024-25 demonstrated strong resilience amid global uncertainties, maintaining its position as one of the fastest-growing major economies. Real GDP grew by approximately 6.5%, supported by robust performance in the agriculture and services sectors, and bolstered by strong government capital expenditure. Inflation eased significantly, with retail inflation falling to a six-year low of 2.8% in May 2025, allowing the Reserve Bank of India to implement monetary easing measures, including rate cuts.

Fiscal consolidation remained a focus, with the fiscal deficit targeted to narrow to 4.8% of GDP. Exports, especially in services, picked up, and foreign direct investment (FDI) saw notable growth. On the employment front, formal job creation improved, though youth and urban female unemployment remain areas of concern. The financial sector continued to strengthen with improved asset quality and healthy credit growth.

While the outlook for 2025-26 remains optimistic with projected economic growth of 6.3-6.4%, challenges such as slow private investment, global trade tensions, and food price volatility persist and will need careful policy management to sustain momentum.

FOREX INDUSTRY

Indias foreign exchange market has seen a strong performance, marked by a significant increase in the countrys forex reserves. The surge in reserves has bolstered the Reserve Bank of Indias (RBI) ability to stabilize the rupee and manage external shocks.

India is also re-evaluating its Liberalised Remittance Scheme (LRS), which saw $30 billion in outflows in FY25. The central bank is looking to tighten oversight while encouraging legitimate cross-border capital flow. Additionally, theres a concerted effort to promote rupee internationalisation, with the RBI enabling greater cross-border use of the INR for trade and investments. Another major move is the rollout of Indias Digital Rupee (CBDC), which is expected to cut transaction costs and boost cross-border remittances, while offering a secure, state- backed digital alternative to private cryptocurrencies.

OUTWARD REMITTANCES UNDER LIBERALISED REMITTANCE SCHEME

In the financial year 2024-25, outward remittances under Indias Liberalised Remittance Scheme (LRS) totaled approximately USD 29.56 billion, marking a 6.85% decline from the previous years USD 31.74 billion.

The largest component of LRS continues to be international travel, which accounted for about USD 17 billion, remaining relatively stable. However, remittances for overseas education dropped significantly by 16%, to USD 2.92 billion, largely due to more restrictive visa policies, geopolitical concerns in countries like the US, UK, and Canada. Other segments like medical treatment abroad also saw a sharp 56% decline.

Moderation in the period has happened primarily because of a reduction in spending on travel. Apart from that, there also seems to be a fall in students going abroad. According to recent media reports, number of Indian students going abroad for higher education, especially to destinations, such as Canada, the US and the UK, has dropped for the first time in recent past. Data shows that the numbers of Indian students who have been issued study permits in these countries have fallen by at least 25 per cent in 2025, thereby reducing the flow of funds to other countries for education purchase.

The annual LRS cap remains USD 250.000 per individual, with Tax Collected at Source (TCS) continuing at 20% for most purposes beyond ?7 lakh. However, exemptions apply for education and medical expenses where TCS is 5% or as low as 0.5% for loans. A key regulatory update is the 180-day rule, requiring repatriation of unused remitted funds or reinvestment abroad within six months. As policy reviews continue, the LRS landscape is expected to evolve with a stronger focus on accountability and economic alignment.

OUTWARD REMITTANCES UNDER THE LIBERALISED REMITTANCE SCHEME (LRS) FOR RESIDENT INDIVIDUALS

(US $ Million)

Item	2023-24	2024-25	% Change Y-o-Y
1 Outward Remittances under the LRS	31735.7	29563.12	-6.85%
1.1 Deposit	916.45	705.26	-23.04%
1.2 Purchase of immovable property	242.51	322.82	33.12%
1.3 Investment in equity/debt	1510.89	1698.94	12.45%
1.4 Gift	3580.27	2938.69	-17.92%
1.5 Donations	11.31	11.81	4.42%
1.6 Travel	17006.3	16964.57	-0.24%
1.7 Maintenance of close relatives	4611.53	3722.03	-19.29%
1.8 Medical Treatment	79.62	81.19	1.97%
1.9 Studies Abroad	3478.65	2918.91	-16.09%
1.10 Others	298.23	198.90	-33.31%

GENERAL FOREIGN EXCHANGE BUSINESS SCENARIO

After pandemic related disruptions and low travel volumes, forex transactions picked up post 2023 which increased international travel, student remittances and medical tourism. However the traditional walk in money changer model is being challenged by:

1. Digital Apps

2. Forex enabled credit cards/ debit cards

3. Online remittance platforms

Indias forex outlook is one of cautious stability, with RBIs policy stance and global developments playing a crucial role in shaping the rupees trajectory for the rest of the year.

Impact of Tax Collected at Source (TCS) Changes

With the Union Budget 2025, the exemption threshold for TCS on foreign remittances has been raised from Rs. 7 lakhs to Rs. 10 lakhs per financial year across all purposes.

The earlier 20% TCS rule on outward remittance over ?7 lakh per year under the Liberalised

Remittance Scheme (LRS) had hurt retail forex demand. The TCS rule has led to the following:

1. Customers shifting to alternative payment structures or keeping remittance amounts below the threshold.

2. Reduced high-value forex sales for leisure travel and overseas investments.

3. Use of credit cards does not fall under the ambit of TCS applicability yet.

Under the new TCS rule. Education via education loan is fully exempt from TCS, regardless of amount. Further other categories like education, medical, travel, investments etc have higher thresholds. These changes were effective from 01st April 2025.

Rise of Digital First Players

RBI regulated fintech companies are replacing the traditional AD ITs and Money changers due to their features like:

1. Credit card with zero Forex markup / live rates

2. App based KYC

3. Lower markup than physical outlets

More focus on B2B than B2C

Larger players are focusing on corporate travel, student consultants, hospitals with inbound patients, and foreign airline crew services & CTM and walk-in retail business is slowly declining. The international tourism boom is intact with more travelers visiting abroad for leisure and business purposes.

TRENDS OF EDUCATION ABROAD

In the last few years interestingly, students see foreign education as their chance to explore, learn, and grow, not just personally but also professionally. Better jobs, quality education and permanent residency have remained the top three motivators among aspirants, suggesting a strong correlation between international education and career aspirations. In the 2024-2025 academic year, over 1.3 million Indian students pursued education abroad. Data further reveals that Gulf countries continue to attract an influx of Indian talent, with a total of 7.93 million living in the UAE, Saudi Arabia, Kuwait, Qatar and Oman alone.

State of International Students and 2026 Predictions

The demand for international education remains strong, with students becoming more flexible in their destination choices, exploring alternatives beyond traditional study hubs. The introduction of caps and stricter regulations in countries like Canada, Australia, and the UK has prompted students to consider European destinations that offer quality education with more favourable policies. For 2026, forecasts suggest continued growth in student mobility, particularly towards emerging destinations in Europe and Asia.

Similarly, Finland is strategically enhancing its appeal by targeting 15,000 international students by 2030, focusing particularly on talent from countries such as India to bolster its workforce amidst an aging population.

Current State of International Students in 2025

The landscape of international education in 2025 approximately 1.1 million international students studying in the United States, comprising about 24% of the global total. The global competition for international students has intensified, with countries like Germany projected to exceed 400,000 international students in the 2024/25 academic year.

International student mobility has been significantly influenced by policy changes in major destinations, with Canada implementing caps on study permits for 2025 at 437.000, showing a reduction from previous levels and now including graduate students. The attraction towards the American dream of studying and working is threatened with the policy decisions wherein in renowned universities like Harvard are facing challenges. It is a space which will evolve rapidly and is in a wait & watch situation.

TRENDS IN TRAVEL ABROAD

In 2024-25, global travelers are increasingly veering away from over-commercialized tourist destinations and seeking authentic, lesser-known experiences. This movement is driven by a desire to avoid overcrowding and to engage with local cultures more meaningfully. Destinations like Azerbaijan, Indonesia, Japan, Georgia, Almaty, South Korea, and remote parts of India (like Meghalaya) are rising in popularity. These "authenti-cities" offer rich cultural immersion, fewer tourists, and a stronger sense of connection with the local environment and people.

Rise of AI & Hvper-Personalization

Artificial Intelligence is rapidly transforming how people plan and experience travel. In 2024, AI tools—from itinerary planners to travel chatbots—are being widely adopted. Travelers are expecting real-time updates, tailored recommendations, and automated rebooking features. Platforms are leveraging user data to offer hyper-personalized trips that adjust based on individual preferences, current weather, local events, and even travel mood. The demand for seamless, Al-driven planning continues to grow.

Blcisure & Remote Work Integration

Remote work and flexible schedules have fueled the continued rise of "bleisure" travel combining business with leisure. Many travelers, particularly Gen Z and millennials, are extending business trips to explore destinations or booking longer stays to work remotely from scenic locations. Governments are supporting this shift by offering digital nomad visas and workcation packages, while hotels and resorts are integrating co-working spaces into their offerings.

Luxury, Wellness & Transformative Travel

Wellness and self-care are now central to travel decisions. In 2025, more people are seeking health-focused retreats, spa escapes, mental well-being programs, and even alcohol-free vacations. Luxury travel is also evolving, with an emphasis on personalized experiences and exclusivity. High-end travelers are opting for branded residences, boutique hotels, and wellness resorts that offer privacy, bespoke services, and transformative experiences beyond just relaxation.

Pop Culture & "Set-Jetting"

"Set-jetting" traveling to destinations seen in films, TV series, and social media is a major trend. Locations featured in popular shows like White Lotus, Emily in Paris, and Game of Thrones are drawing fans looking to live out their favorite on-screcn experiences. Social media, particularly TikTok and Instagram, continues to influence destination choices, with travelers prioritizing aesthetics, atmosphere, and viral moments.

Adventure, Noctourism & Experiential Travel

Experiential and adventure travel are witnessing explosive growth. Tourists are seeking immersive journeys that include hiking, wildlife safaris, diving, or cultural exchanges. Noctourism—travel focused on nighttime experiences like stargazing, aurora hunting, or cultural night markets—is also becoming more mainstream. Dark-sky destinations in places like Norway, Chile, and rural Canada are in high demand as travelers pursue more celestial and introspective experiences.

Eco-Conscious Travel vs. Budget Pressure

Sustainability remains important to many travelers, with increasing interest in eco-lodges, conservation tourism, and low-impact travel options. However, rising travel costs are causing a shift: many are willing to compromise on sustainability in favor of affordability. While affluent travelers continue to prioritize carbon offsetting and eco-luxury, the broader market shows a divide between intent and action when budgets are tight.

Smaller Cruise Ships & Boutique Airlines

In the cruise industry, theres a growing preference for smaller, more intimate ships offering personalized services and niche experiences. These vessels provide access to unique ports and a quieter, more luxurious environment compared to mega-ships. Similarly, airlines like Virgin Atlantic are rolling out luxurious onboard suites and personalized concierge services, catering to premium travellers who seek comfort and exclusivity during transit.

Visa Policies & Global Travel Shifts

Geopolitical factors are significantly impacting travel trends. For example, China has recently relaxed visa requirements for travelers from over 75 countries, which is expected to boost inbound tourism significantly. In contrast, stricter U.S. immigration policies and travel restrictions are deterring some international visitors. These shifts affect both outbound and inbound travel dynamics globally, shaping where people can and want to go.

HEADWINDS & TAILWINDS

RBI circular on the ratio of bulk and retail business

RBI with a view to have a check of guidelines on money changing activities, particularly concerning sourcing and utilization of foreign currency notes by Full Fledged Money Changers (FFMCs) and non-bank Authorized Dealers (ADs) Category-11 have issued the Circular no. 8 dated May 27th, 2024 stating that the Full-Fledged Money Changers (FFMCs) and non-bank Authorized Dealers Category II (ADs Cat-II) must ensure that the value of foreign currency notes they sell to the public for permitted purposes is at least 75% of the value of the foreign currency notes they purchase from other FFMCs and ADs on a quarterly basis.

This circular had a significant financial impact on the performance of the Company for the present financial year and may continue going forward.

Further due to stringent RBI reporting requirements, documentation, AML checks and KYC norms, several small FFMCs are majorly exiting the business, applying to upgrade to AD category II or surrender their FFMC license.

SBI empanelment

During the year, your company has successfully empanelled with State Bank of India as Authorized Money Changers. This prestigious partnership will enable us to provide enhanced foreign exchange services to their branches across the country and its customers.

In the last one year, our Company handled over $70 million in remittances, mostly for education. A decline in global student travel due to geopolitical issues in the big four markets- Canada, the USA, the UK and Australia. Canada recorded the sharpest drop, with Indian student enrolments falling by 41% has led to this drop in volumes compared to last year.

This year, the Company plans to foray into new international markets such as Germany, New Zealand, Austria, Dubai, Singapore and France where Indian students are now increasingly Hocking to. The total market for education related outward remittances in India is $3.5 billion.

Launch of Forex cards on own issuance.

Your company is in advanced stage to launch its own forex cards. This helps us to curate the programme of the card according to the needs of the customer.

Entry into the Cash to Master Vertical

Cash to Master was identified as a potential opportunity for the Company. This opportunity is being tapped by various branches of the Company. The management believed that this vertical will significantly improve the turnover of the Company in the forthcoming years.

Opening of 7 more branches this year

The Company has opened branches in Noida, Amritsar, Salt lake, Nagpur, Anand, Kanpur and Surat this year. All the new branches are located in significant cities in India. This will ensure increased penetration pan India and caters to the needs of more customer base.

Germanys Visa reforms

Germanys visa reforms, coming into effect in July 2025, are a welcome development for Indian travellers and professionals. By ending the visa remonstralion process, Germany to eliminate a lengthy and often unclear appeals system. This allows applicants to either reapply or pursue a formal legal route, bringing more transparency and predictability to the process.

Outbound Tourism

With more counties becoming VISA free for Indians, outbound tourism has improved tremendously in recent years. In the forthcoming years, this is projected to rise further.

Sports Tourism

Sports Tourism is a travel experience of the tourist who is either a spectator of the sports event or who actively participates in a sporting event generally involving commercial and noncommercial activities of a competitive nature.

Today, more and more tourists are interested in sports activities. Also sport events attract tourists as participants or spectators and destinations try to add local flavors to them to distinguish themselves and provide authentic local experiences. This sector is increasingly seen as an opportunity and is considered to actively contribute to outbound tourism.

Inbound tourism

As per the data from Ministry of Tourism, India recorded the Foreign Tourist Arrivals of 9.66 million (provisional) which account for Foreign Exchange Earnings of approximately Rs. 2,77,842 crores.

AWARDS & RECOGNITIONS FOR THE FY 2024-2025

1. The Company has been recognized as the top 500 Company in India by Fortune 500 in its December Publication.

2. The Company has received the Enterprise Growth Awards 2025 from Deloitte during the year.

RISKS AND CONCERNS

Your Company is exposed to foreign currency price fluctuations. Depreciation of Currency has some business impact, as there is postponement of transactions by customers during periods of extreme volatility.

We are exposed to credit risk as corporate require minimum processing time for sale and encashment of currency notes, prepaid cards etc.. However, this risk is mitigated by Customer Acceptance Policy and Credit Policy where a customer is profiled as per his business type, market standing, financial strength and limits are monitored with system level controls.

Further the economic and political conditions of the country, increase in competition and reduction in profit margins can adversely affect the performance of the Company.

INTERNAL CONTROLS AND RISK MANAGEMENT

Your Company has adequate system of internal controls 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.

MATERAL DEVELOPMENTS IN HUMAN RESOURCES

As on 31st March, 2025, there were 255 employees in the Company. Your Company continuously takes steps to maintain a competitive, healthy and harmonious work environment.

FUTURE PROSPECTS

Potential areas to enhance our business are-

(i) D2C Business

(ii) Mobile application

(iii) Royalty rewards programme

(iv) Government of India - Ministry tie-ups,

(v) Corporate tie-up,

(vi) Bankss referral,

(vii) Institutional tie-ups,

(viii) Ancillary products like Travel Insurance business

(ix) Effective Branch network optimizations (Multiple branches in Tier 1 cities / multiple branches in a state including tier 2 and tier 3)

Your Company is looking for expansion to other major Tier I and Tier II cities for increased penetration. Further the Company is looking for expansion to other countries like Dubai, Singapore etc., as well.

COMPLIANCE

The Company Continued to vigorously pursue its commitment in adhering to the highest standards of compliance. 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.

ANALYSIS OF KEY FINANCIAL RATIOS OF THE COMPANY

Particulars	2024-25	2023-24	Variance (%)
Current ratio	2.80	2.81	-0.54%
Debt - Equity ratio	0.08	0.03	177.50%
Inventory turnover ratio	309.48	424.43	-27.08%
Net profit ratio	0.002	0.003	-26.70%
Return on Capital Employed (ROCE)	0.22	0.42	-47.53%

FORWARD-LOOKING STATEMENTS

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. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these statements are accurate and will be realised. The general economic or political conditions might affect the operations of the Company.