RNFI Services Ltd Management Discussions

You should read the following discussion of our financial condition and results of operations together with our Restated Financial Information which have been included in this Red Herring Prospectus. The following discussion and analysis of our financial condition and results of operations is based on our Restated Financial Information for the financial years ended March 31, 2024, 2023 and 2022 including the related notes and reports, included in this Red Herring Prospectus prepared in accordance with requirements of the Companies Act and restated in accordance with the SEBI (ICDR) Regulations 2018, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. Our Financial Statements, as restated have been derived from our audited financial statements for the respective period and years. Accordingly, the degree to which our Restated Financial Information will provide meaningful information to a prospective investor in countries other than India is entirely dependent on the readers level off a miliarity with Ind AS, Companies Act, SEBI Regulations and other relevant accounting practices in India.

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" on pages 32 and 21 respectively, and elsewhere in this Red Herring Prospectus.

Our Financial Year ends on March 31 of each year. Accordingly, all references to a particular Financial Year are to the 12 months ended March 31 of that year.

Business Overview

We are a tech enabled platform offering advanced financial technology solutions in B2B and B2B2C financial technology arena through an integrated business model via our online portal and mobile application, focusing on providing banking, digital and Government to Citizen ("G2C") services on PAN India basis. We segregate our business primarily into four (4) segments namely (i) business correspondent services; (ii) non-business correspondent services; (iii) full-fledged money changer service; and (iv) insurance broking. As on the date of this Red Herring Prospectus, we are providing full-fledged money changer service through our Material Subsidiary (wholly-owned), namely RNFI Money Private Limited which is RBI registered full-fledged money changer ("FFMC") and insurance broking service through our wholly-owned Subsidiary, namely Reliassure Insurance Brokers Private Limited which is registered as a direct (Life & General) broker with IRDAI.

Key Performance Indicators

In evaluating our business, we consider and use certain key performance indicators that are presented below as supplemental measures to review and assess our operating performance. The presentation of these key performance indicators is not intended to be considered in isolation or as a substitute for the Restated Financial Information included in this Red Herring Prospectus. We present these key performance indicators because they are used by our management to evaluate our operating performance. Further, these key performance indicators may differ from the similar information used by other companies, including peer companies, and hence their comparability may be limited. Therefore, these matrices should not be considered in isolation or construed as an alternative to AS measures of performance or as an indicator of our operating performance, liquidity, profitability or results of operation. A list of our KPIs for the Financial Years ended March 31, 2024, 2023 and 2022 is set out below

(? in lakhs, unless stated otherwise)

Particulars	Financial Year ended March 31, 2024	Financial Year ended March 31, 2023	Financial Year ended March 31, 2022
Financial
Revenue from Operations (1)	93,542.38	1,06,659.37	18,825.26
EBITDA (2)	1,923.88	993.87	979.66
EBITDA Margin (3) (in %)	2.06%	0.93%	5.20%
Net Profit after tax (4)	996.07	488.71	555.03
Net Profit Margin (5) (in %)	1.06%	0.46%	2.95%
Return on Net Worth (6) (in %)	40.92%	31.99%	49.42%
Return on Capital Employed (7) (in %)	29.74%	24.28%	33.25%
Debt-Equity Ratio (8)	1.02	0.90	0.85
Current Ratio (9)	0.97	1.10	1.06
Days Working Capital (10)	-1.63	3.15	10.72

As certified by M/s Dhariwal & Thakkar, Chartered Accountants pursuant to their certificate dated July 11, 2024.

Notes:

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

(2) EBITDA means Earnings before interest, taxes, depreciation and amortization expense, which has been arrived at by obtaining the profit/ (loss) before exceptional items and tax for the year and adding back finance costs, depreciation, and amortization expense.

(3) EBITDA margin is calculated as EBITDA as a percentage of revenue from operations.

(4) Net Profit after tax represents the restated profits of our Company after deducting all expenses and taxes.

(5) Net Profit margin is calculated as restated net profit after tax for the year divided by revenue from operations.

(6) Return on Net Worth (%) is calculated as Net Profit after tax attributable to owner of the company, as restated for the end of the year divided by Average Net worth as at the end of the year. Average net worth means the average of the net worth of current and previous financial year. Net worth means the aggregate value of the paid-up share capital and other equity (excluding capital reserves) attributable to the owners of the Parent.

(7) Return on capital employed is calculated as Earnings before interest and taxes divided by average capital employed (average capital employed is calculated as average of the total equity, including non-controlling interest, total debt (including borrowings and lease liabilities) and deferred tax liabilities (net of deferred tax assets) of the current and previous financial year.

(8) Debt- equity ratio is calculated by dividing total debt by total equity. Total debt represents long term and short term borrowings, including lease liabilities. Total equity includes the aggregate value of the paid-up share capital, other equity and the non-controlling interest.

(9) Current ratio is calculated by dividing the current assets by current liabilities.

(10) Days Working Capital is arrived at by dividing working capital (current assets less current liabilities) by revenue from operations multiplied by the number of days in the year (365).

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL PERIOD

In the opinion of the Board of Directors of our Company, since the date of the last financial statements disclosed in this Red Herring Prospectus, there have not arisen any circumstance that materially or adversely affect or are likely to affect the business activities or profitability of our Company or the value of its assets or its ability to pay its material liabilities within the next twelve months.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section titled " Risk Factors" on page 32. Our results of operations and financial conditions are affected by numerous factors including the following:

• We heavily rely on information technology systems which may be subject to vulnerabilities, disruptions, failures, or data breaches and thus may have the potential to negatively impact both our operations and our reputation. Additionally, our ability to succeed is contingent on our capacity to innovate, update, and adjust to emerging technological advancements.

• A substantial portion of the revenue is generated from our banking partners. Our banking partners are regulated by the RBI and any change in the RBIs policies, decisions and regulatory framework could adversely affect our business, cash flows, results of operations and financial condition.

• We derive a portion of our revenue from the fee and commission that we charge from our customers against our services. Any failure to earn revenue from such activities may have a negative impact on our financial performance.

• We heavily rely on our front-end network partners. If we are unable to attract new network partners or retain and grow our relationships with our existing network partners, our business, results of operations, financial condition, and future prospects would be materially and adversely affected.

• Security breaches and attacks against our tech platform, and any potential breach of or failure to otherwise protect personal, confidential and proprietary information, could damage our reputation and materially and adversely affect our business, financial condition and results of operations.

BASIS OF PREPARATION, MEASUREMENT AND SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of Preparation of Financial Statements

This Restated Financial Information has been specifically prepared for the purpose of preparation of the Restated Ind AS Statements in connection with the proposed Initial Public Offer of equity shares ("IPO"), prepared in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013, read with Companies (Indian Accounting Standards) Rules, 2015 (as amended) and other relevant provisions of the Act.

The Restated Financial Information has been prepared to comply in all material respects with the requirements of:

A. Section 26 of Part I of Chapter III of the Companies Act, 2013 (the "Act");

B. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended ("ICDR Regulations");

C. The Guidance Note on Report in company prospectus (Revised 2019) issued by the ICAI (referred to as the Guidance Note).

1.2 Basis of Consolidation

The consolidated financial statements comprise the financial statements of the Parent Company, and its subsidiaries. Control exists when the parent has power over the entity, is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns by using its power over the entity. Power is demonstrated through existing rights that give the ability to direct relevant activities, those which significantly affect the entity s returns. Subsidiaries are consolidated from the date control commences until the date control ceases.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

The financial statements of the Group companies are consolidated on a line-by-line basis and intra-Group balances, transactions including unrealised gain / loss from such transactions and cash flows relating to transactions between members of the Group are eliminated upon consolidation. These financial statements are prepared by applying uniform accounting policies in use at the Group.

Noncontrolling interests which represent part of the net profit or loss and net assets of subsidiaries that are not, directly or indirectly, owned or controlled by the Company, are excluded.

The difference between the cost of investment in the subsidiaries, over the net assets at the time of acquisition of shares in the subsidiaries is recognised in the financial statements as Goodwill or Capital Reserve, as the case may be.

1.3 Significant accounting judgements, estimates and assumptions

The preparation of Restated Financial Information in conformity with Ind AS requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures, and the disclosure of contingent liabilities, at the end of the reporting period. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

1.4 Property, Plant & Equipment and Intangibles

Plant, Plant and Equipment are stated at cost of acquisition or constructions including attributable borrowing cost till such assets are ready for their intended use, less of accumulated depreciation and accumulated impairment losses, if any. Cost of acquisition for the aforesaid purpose comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its location and working condition for its intended use, net of trade discounts, rebates and credits received if any.

Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the assets will flow to the Company and the cost of the asset can be measured reliably. Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding the amount at which development cost is capitalised, are not capitalised and the related expenditure is charged to Statement of profit or loss in the period in which the expenditure is incurred. Developed Technology/ Software and Non- Compete acquired in a business combination are recognised at fair value at the acquisition date. Company amortises intangible assets over the period of 3 to 10 years, as the Company expects to generate future benefits from the given assets for a period of 3 to 10 years.

The charge in respect of periodic depreciation/ amortization is derived after determining an estimate of an assets expected useful life and the expected residual value at the end of its life. The assets residual values, useful lives and methods of depreciation are reviewed at each financial year and adjusted prospectively, if appropriate. Depreciation is calculated on a written down value over the estimated useful lives of the assets. Useful lives used by the Company are same as rates prescribed under Schedule II of the Companies Act 2013. The range of useful lives of the property, plant and equipment are as follows:

:Particulars	Useful Lives
Plant and Equipment (Lift)	15 years
Plant and Machinery (Micro-ATM)	3 years
Computer Software	3 years
Computers	3 years
Motor cars	8 years
Furniture & Fixtures	10 years
Office Equipment	5 years

1.5 Right -Of-Use Asset

Ind AS 116 requires the lessee to determine the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Company has several lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).When it is reasonably certain to exercise extension option and not to exercise termination option, the Company includes such extended term and ignore termination option in determination of lease term.

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The Company has taken indicative rates from its bankers and used them for Ind AS 116 calculation purposes.

1.6 Leases

The Group evaluates at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Company as Lessee

The Companys leased assets consist of leases for Buildings. The Company assesses whether a contract contains lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

A. the contract involves the use of an identified asset

B. the Company has substantially all the economic benefits from use of the asset through the period of the lease and

C. the Company has the right to direct the use of the asset

The Company determines the lease term as the non-cancellable period of a lease, together with periods covered by an option to extend the lease, where the Company is reasonably certain to exercise that option.

The Company at the commencement of the lease contract recognizes a Right-of-Use (ROU) asset at cost and corresponding lease liability, except for leases with term of less than twelve months (short term leases) and low-value assets. For these short term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the lease term.

The cost of the ROU assets comprises the amount of the initial measurement of the lease liability, any lease payments made at or before the inception date of the lease plus any initial direct costs, less any lease incentives received. Subsequently, the ROU assets are measured at cost less any accumulated depreciation and accumulated impairment losses, if any. ROU asset are depreciated using the straightline method from the commencement date over the shorter of lease term or useful life of ROU assets. The estimated useful lives of ROU assets are determined on the same basis as those of property and equipment.

For lease liabilities at the commencement of the lease, the Company measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate is readily determined, if that rate is not readily determined, the lease payments are discounted using the incremental borrowing rate that the Company would have to pay to borrow funds, including the consideration of factors such as the nature of the asset and location, collateral, market terms and conditions, as applicable in a similar economic environment.

After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.

The Company recognizes the amount of the re-measurement of lease liability as an adjustment to the right-of-use assets. Where the carrying amount of the right of-use assets is reduced to zero and there is a further reduction in the measurement of the lease liability, the Group recognizes any remaining amount of the re-measurement in statement of income.

Lease liability payments are classified as cash used in financing activities in the statement of cash flows.

Short-term leases and leases of low-valued assets

The Company applies the short-term lease recognition exemption to its short-term leases of lease hold land (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipments that are low value. Lease payments on short-term leases and leases of low- value assets are recognized as expense in statement of profit and loss.

1.7 Defined benefit plans (gratuity benefits)

The Companys obligation on account of gratuity is determined based on actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates.

Due to the complexities involved in the valuation and its long-term nature, these liabilities are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries.

1.8 Revenue Recognition

Timing of Revenue Recognition

Revenue from contracts with customers is recognised when performance obligation related to the services are completed and the amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. The Company has generally recorded the income on the basis of point of time as and when the performance obligations are satisfied.

As the Company is acting as a Business Correspondent of various Banks and Payment Banks and engaged in the business of Domestic Money Transfer (DMT), IMPS, AEPS, Mobile Recharges, Railway and Air Tickets, Cash Collection Services, EMI Collection Services and other incidental business through its agents/channel partners network, the revenue of the company is service charges received for various transactions, onboarding fees of merchants, sale of recharges etc.

Service Charges on Banking Correspondent Services & Non-Banking Correspondent Services Service Charges are generally determined as a percentage of transaction value executed by the network partners of the company. Service Charges received on various transaction services (DMT, IMPS, AEPS, EMI Collection, Insurance, Ticket Bookings, etc.) provided through the Companys portal is recognised when the transaction is executed successfully. Service Charges are accounted on net-off Goods & Service Tax.

Onboarding Income

Onboarding Income is recognised as and when network partners are enrolled with the company and is included under the head "Revenue from Operations" in the Statement of Profit and Loss.

Sale of Recharges

Revenue from sale of recharges is recognised when the transaction is carried out successfully on the portal of the company. Revenue in respect of the same is recognised on gross basis on the amount of recharge net-off goods and service tax.

Sale of Devices & Intangibles

Revenue for Sale of Devices is recognised when the devices are dispatched to network partners and are accounted, net off, returns, trade discounts and Goods & Service Tax.

Foreign Exchange Sold

Revenue is recognized only when it is reasonably certain and when all significant risks and rewards of ownership of currency have been passed to the buyer, usually on delivery of currency and are accounted, net off, returns, trade discounts and Goods & Service Tax.

Commission Income on Insurance

Commission and brokerage income earned for the services rendered are recognised as and when they are due.

Interest Income

Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable and when no significant uncertainty of its realization exists

1.9 Taxes

Provision for the Current Tax is made on the basis of the amount of tax payable on taxable income for the year in accordance with the Income Tax Act, 1961.

1.10 Deferred tax

Deferred tax is provided using the Balance Sheet approach on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Minimum Alternate Tax (MAT) paid in accordance with Income-tax Act, 1961 for entities in India, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the restated balance sheet when it is highly probable that the future economic benefit associated with it will flow to the Group having reasonable certainty that it can be utilized against the normal taxes payable under the Income-tax Act, 1961.

1.11 Exceptional items

Certain occasions, the size, type or incidence of an item of income or expense, pertaining or the ordinary activities of the Company is such that its disclosure improves the understanding of the performance of the Company, such income or expense is classified as an exceptional item.

1.12 Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

1.13 Foreign currencies

The Companys financial statements are presented in INR, which is also the Companys functional currency. For each entity the Company determines the functional currency and items included in the financial statements of each entity are measured using that functional currency.

Foreign currency transactions are recorded on initial recognition in the functional currency, using the exchange rates at the date of the transaction. At each balance sheet date, foreign currency monetary items are reported using the closing exchange rate.

Exchange differences that arise on settlement of monetary items or on reporting at each balance sheet date of the Companys monetary items at the closing rate are recognised as income or expense in the period in which they arise. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value denominated in a foreign currency, are translated using the exchange rate at the date when such fair value was determined. The gain or loss arising on translation of non-monetary items is recognised in line with the gain or loss of the item that gave rise to translation difference (i.e. translation difference on items whose gain or loss is recognised in other comprehensive income or the statement of profit and loss is also recognised in other comprehensive income or the statement of profit and loss respectively).

1.14 Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

In the principal market for the asset or liability, or

In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

1.15 Borrowing costs

a. Borrowing costs that are attributable to the acquisition, construction, or production of a qualifying asset are capitalised as a part of the cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time (generally over twelve months) to get ready for its intended use or sale.

b. All other borrowing costs are recognised as expense in the period in which they are incurred.

1.16 Provisions, Contingent liabilities, Contingent assets and Commitments:

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit and loss.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability.

A contingent asset is disclosed, where an inflow of economic benefits is probable.

Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

1.17 Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of twelve months or less, which are subject to an insignificant risk of changes in value.

1.18 Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period adjusted for bonus elements and share split in equity shares, if any, issued during the period/year. The weighted average number of equity shares outstanding during the year is adjusted for events such as bonus issue, bonus element in a right issue, shares split and reserve share splits (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders after taking into account the after-income tax effect of interest and other financing costs associated with dilutive potential equity shares and the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares

1.19 Segment Accounting:

Operating Segments;

i) Basis of segmentation

Segment information is presented in respect of the Companys key operating segments. The operating segments are based on the Companys management and internal reporting structure. The management identifies primary segments based on the dominant source, nature of risks and returns and the internal organization and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly. All operating segments operating results are reviewed regularly by the Board of Directors to make decisions about resources to be allocated to the segments and assess their performance.

The following reportable segments of its business:

The following summary describes the operations in each of the Companys reportable segments:

Reportable segments
Business Correspondent	It comprises All services which are covered under Business correspondent guidelines issues by Reserve Bank of India such as AEPS, MATM, DMT etc.
Non-Business Correspondent	It comprises all services other than Business Correspondent services which are available in Company Business Portal & used by Merchants for catering to their customers such as Recharge, Flight/IRCTC Ticket Booking, CMS, PAN, BBPS etc.
Full Fledge Money Changer	It comprises all Sale & Purchase of foreign currency & services belongs to FFMC (Full Fledge Money Changer)
Direct Insurance Broking	It comprises all Direct Insurance broking commission (Life & general).

PRINCIPAL COMPONENTS OF STATEMENT OF PROFIT AND LOSS

Set forth below are the principal components of statement of profit and loss from our continuing operations:

Income

Our total income comprises of (i) revenue from operations and (ii) other income.

Revenue from Operations Revenue from operations comprises of:

i. sale of products which include Device Sale, Sale of Intangibles, Recharge Sale, Foreign Exchange Sold.

ii. sale of services which include Revenue from Service Charges (Business Correspondent), Revenue from Service Charges (Non-Business Correspondent), Service Charges Received - Full Fledge Money Changer, Service Charges Received - Commission Income on Insurance, Device Rental Income.

Other Income

Other income includes (i) Liabilities no longer required written back; (ii) Profit on Foreign Exchange Fluctuation; (iii) Consultancy Fee Received; (iv) Interest Income on Bank Deposits; (v) Interest on Loans to others; (vi) Interest income on Income tax refund; (vii) Security Deposit given; (viii) Rental Income; (ix) Interest income on Fair Valuation of Staff Advances, (x) Car Rental Charges; (xi) Provision for Bad & Doubtful Debts- Reversed; (xii) Provision for Doubtful Advances-Reversed; (xiii) Income from Debt Mutual Fund; (xiv) Technology Development Fee Received; (xv) Share of Profit from Partnership Firm; (xvi) Proceeds from Keyman Insurance Policy; (xvii) Gain on Sale of Fixed Assets and (xviii) Miscellaneous Income.

Expenses

Our expenses comprises of: (i) Direct Costs; (ii) Purchases of traded goods; (iii) changes in inventories of traded goods / finished goods; (iv) Employee benefits expense; (v) finance costs; (vi) depreciation and amortization expense; and (vii) other expenses.

Direct Costs

Direct Costs comprises of (i) service charges paid to merchants; (ii) Support services; (iii) Web Hosting Charges; (iv) Email Service Fee; (v) Payment Gateway Charges; (vi) SMS Service Fees; (vii) Bank Charges; (viii) Real Time Settlement Charges; (ix) Information Technology Expenses; (x) Technical Consultancy; (xi) Rental Charges of Equipment; (xii) Commission paid on Money Exchange; (xiii) Integration Fee; (xiv) Delivery Charges Paid on Money Exchange; (xv) Commission Paid on Insurance; (xvi) Commission Expenses and (xvii) Travel Card Charges

Purchases of Traded goods

Purchase of Traded goods includes (i) Device purchases; (ii) Recharge Purchases; (iii) Foreign Currency and (iv) Intangible Purchase.

Changes in Inventories

Changes in inventories denote the difference between opening and closing balance of stock in trade.

Employee Benefits Expense

Employee benefits expenses include (i) Director Remuneration; (ii) Salaries, wages and Bonus; (iii) Contributions to Provident and Other Fund, (iv) Staff Welfare Expenses; and (v) Gratuity.

Finance Cost

Finance cost includes (i) Interest expenses on Bank Overdraft; (ii) Interest on lease liability; (iii) Interest expenses on Security Deposit Received; (iv) Interest Expenses on Intercorporate Loans; (v) Interest Expenses on Term loans from banks and NBFC and (vi) Loan processing fees & Foreclosure Charges.

Depreciation and Amortisation expenses

Depreciation and amortisation expenses include depreciation expenses on our Property, Plant and Equipment, Right of use assets and amortization on Intangible assets.

Other Expenses

Other expenses include (i) bad debts; (ii) legal and professional charges; (iii) payment to auditors; (iv) concurrent audit fee; (v) brokerage paid for office rent; (vi) Rates and Taxes; (vii) Rent; (viii) Travel Expenses; (ix) Bank Charges; (x) Interest on delayed payment of taxes; ; (xi) insurance expense; (xii) printing and stationary; (xiii) postage & courier; (xiv) communication expenses; (xv) Liquidated Damages & Penalties - Sales; (xvi) Office Expenses; (xvii) Membership & Subscription; (xviii) Repairs & Maintenance; ; (xix) Support Services; (xx) Sponsorship fees; (xxi) Marketing and advertising expenses; (xxii) Technology Expenses; (xxiii) Power and Fuel; (xxix) Provision for Bad & Doubtful Debts; (xxv) Provision for Doubtful Advances; (xxvi) Preliminary Expenses written off; (xxvii) Loss on Sale of Investment; (xxviii) Invoice Discounting Charges; (xxix) CSR Expenses; (xxx) Advances written off; (xxxi) Staff Training Expenses; (xxxii) Manpower Supply; and (xxxiii) Miscellaneous expenses.

Our Results of Operations

	Restated Results for the Year ended March 31, 2024		Restated Results for the Year ended March 31, 2023		Restated Results for the Year ended March 31, 2022
Particulars	Amount	% of revenue from operations	Amount	% of revenue from operations	Amount	% of revenue from operations
Income:
Revenue from operations	93,542.38	100.00%	1,06,659.37	100.00%	18,825.26	100.00%
Other income	762.72	0.82%	280.26	0.26%	254.67	1.35%
Total Income	94,305.10	100.82%	1,06,939.62	100.26%	19,079.93	101.35%
Expenses:
Direct Costs	18,023.81	19.27%	18,294.26	17.15%	12,502.23.78	66.41%
Purchases of Traded Goods	69,246.36	74.03%	84,060.24	78.81%	3,402.08	18.07%
Change in inventories of traded goods/ finished goods	25.86	0.03%	-154.28	-0.14%	108.84	0.58%
Employee Benefit Expenses	3,685.47	3.94%	2,799.48	2.62%	1,672.76	8.89%
Finance Costs	242.92	0.26%	140.00	0.13%	49.20	0.26%
Depreciation and Amortization Expenses	378.92	0.41%	200.22	0.19%	149.49	0.79%
Other expenses	1,399.73	1.50%	946.05	0.89%	414.30.81	2.20%
Total Expenses	93,003.06	99.42%	1,06,285.97	99.65%	18,298.96	97.20%
Profit/(loss) before exceptional items and tax for the year	1,302.04	1.39%%	653.65	0.61%	780.97	4.15%
Exceptional items	-	0.00%	-	0.00%	-3.00	-0.02%
Profit/(loss) before tax for the year	1,302.04	1.39%	653.65	0.61%	777.97	4.13%
Tax expense:
- Current tax	335.43	0.36%	210.51	0.20%	226.37	1.20%
- Deferred tax	-29.46	-0.03%	-45.58	-0.04%	-3.42	-0.02%
Income tax expense	305.97	0.33%	164.94	0.15%	222.95	1.18%
Profit/(loss) after tax for the year	996.07	1.06%	488.71	0.46%	555.03	2.95%

The Companys revenue from operations comprises of two components -

• sale of products i.e. trading income from sale of Micro ATMs, PAN tokens, recharge coupons and foreign exchanges and

• sale of services i.e. commission-based income from rendering of Business correspondent services, NonBusiness Correspondent services, insurance services etc.

Below mentioned table gives a detailed year on year analysis of revenue and gross contribution made by each component of revenue and the corresponding PAT achieved in each year:

(Rs. in lakhs)

Particulars	Year ended March 31, 2024	% of Revenue from Operations	Year ended March 31, 2023	% of Revenue from Operatio ns	Year ended March 31, 2022	% of Revenue from Operations
Sale of Products (a)	70,190.33	75.04%	84,289.48	79.03%	3,523.60	18.72%
COGS (b)	69,272.22		83,905.96		3,510.92
Gross Contribution from sale of products (a-b)	918.11		383.52		12.68
Gross contribution margin (c)	1.31%		0.46%		0.36%
Sale of Services (d)	23,352.05	24.96%	22,369.89	20.97%	15,301.66	81.28%
Direct Cost (e)	18,023.81		18,294.26		12,488.78
Gross contribution from sale of services (d-e)	5,328.24		4,075.63		2,812.88
Gross contribution margin (f)	22.82%		18.22%		18.38%
Revenue from Operations (A = a + c)	93,542.38	100.00%	106,659.37	100.00%	18,825.26	100.00%
Total Direct Cost (B= b + d)	87,296.02	93.32%	102,200.22	95.82%	15,999.70	84.99%
Total Gross Contribution (C= c + f)	6,246.36	6.68%	4,459.15	4.18%	2,825.56	15.01%
Indirect expenses (net of other income) (D)	4,322.48	4.62%	3,465.28	3.25%	1,845.89	9.82%
EBITDA (E=C-D)	1,923.88	2.06%	993.87	0.93%	979.67	5.20%
Finance Cost (F)	242.92	0.26%	140.00	0.13%	49.20	0.26%
Depreciation (G)	378.92	0.41%	200.22	0.19%	149.49	0.79%
PBT (H = E-F-G)	1,302.04	1.39%	653.65	0.61%	780.98	4.15%
Exceptional Items and Tax (I)	305.97	0.33%	164.94	0.15%	225.95	1.20%
PAT (H-I)	996.07	1.06%	488.71	0.46%	555.03	2.95%

RESULTS OF OPERATIONS INFORMATION FOR THE FINANCIAL YEAR ENDED MARCH 31, 2024 COMPARED WITH FINANCIAL YEAR ENDED MARCH 31, 2023

(in Lakhs unless stated otherwise)

Particulars	Financial Year ended March 31, 2024	Financial Year ended March 31, 2023	Change in ? Lakhs	Change in %
Income:
Revenue from operations	93,542.38	1,06,659.37	-13,116.99	-12.30%
Other income	762.72	280.26	482.46	172.15%
Total Income	94,305.10	1,06,939.62	-12,634.52	-11.81%
Expenses:
Direct Costs	18,023.81	18,294.26	-270.45	-1.48%
Purchases of Traded Goods	69,246.36	84,060.24	-14,813.88	-17.62%
Change in inventories of traded goods/ finished goods	25.86	-154.28	180.14	-116.76%
Employee Benefit Expenses	3,685.47	2,799.48	885.99	31.65%
Finance Costs	242.92	140	102.92	73.52%
Depreciation and Amortization Expenses	378.92	200.22	178.70	89.25%
Other expenses	1,399.73	946.05	453.68	47.95%
Total Expenses	93,003.06	1,06,285.97	-13,282.91	-12.50%
Profit/(loss) before exceptional items and tax for the year	1,302.04	653.65	648.39	99.20%
Exceptional items
Profit/(loss) before tax for the year	1,302.04	653.65	648.39	99.20%
Tax expense:
- Current tax	335.43	210.51	124.92	59.34%
- Deferred tax	-29.46	-45.58	16.12	-35.38%
Income tax expense	305.97	164.94	141.03	85.51%
Profit/(loss) after tax for the year	996.07	488.71	507.36	103.82%

Total Income

Our total income has decreased by 11.81% to ? 94,305.10 Lakhs in Financial Year ended March 31, 2024 from ? 1,06,939.62 Lakhs in Financial Year ended March 31, 2023 primarily due to decrease in the revenue from operations.

Revenue from Operations

Our revenue from operations decreased by 12.30% to ?93,542.38 Lakhs in Financial Year ended March 31, 2024 from ? 1,06,659.37 Lakhs in Financial Year ended March 31, 2023. The decrease in revenue is predominantly attributed to decrease in sale of products being foreign exchange currencies by ? 11,951.71 Lakhs due to decrease in demand for foreign currencies in Financial Year ended March 31, 2024 as compared to Financial Year ended March 31, 2023.

Other Income

Our other income was ? 762.72 Lakhs in Financial Year ended March 31, 2024 as compared to ? 280.26 lakhs in Financial Year ended March 31, 2023, which has significantly increased by 172.15% mainly due to write back of liabilities no longer required, rental income and share of profit from partnership firm amounting to ? 541.38 lakhs.

Total Expenses

Our total expenses have also decreased by 12.50 % to ? 93,003.06 lakhs in Financial Year ended March 31, 2024 from ? 106,285.97 lakhs in Financial Year ended March 31, 2023. This decrease was due to ? 14,813.88 lakhs decrease in purchase of traded goods, ? 270.45 lakhs decrease in Direct Costs, ? 180.14 lakhs increase in change in inventories of traded goods / finished goods, ? 885.99 lakhs increase in employee benefit expenses, ? 102.92 lakhs increase in finance costs, ? 178.70 lakhs increase in depreciation and amortisation expenses and ? 453.68 lakhs increase in other expenses.

Cost of Services

Cost of Services represents sum of direct costs, purchases of traded goods, changes in inventories of traded goods / finished goods. Cost of Services has decreased by 14.58% from Financial Year ended March 31, 2023 to Financial Year ended March 31, 2024 due to the factors described below.

Direct Costs

Direct Costs decreased by 1.48% from ? 18,294.26 lakhs in Financial Year ended March 31, 2023 to ? 18,023.81 lakhs in Financial Year ended March 31, 2024. This decrease was primarily attributable to an decrease in payment gateway charges by an amount of ? 912.63 lakhs.

Purchase of Traded Goods

The purchase of traded goods has decreased by 17.62% to ? 69,246.36 lakhs in Financial Year ended March 31, 2024 from ? 84,060.24 lakhs in Financial Year ended March 31, 2023. The decrease in costs is mainly driven by a decrease in purchase of foreign currency which is in line with decrease in revenue from foreign currency sold.

Changes in Inventories of traded goods / finished goods

The change in inventories of traded goods / finished goods was at ? 25.86 lakhs as at the end of March 31, 2024 as compared to ? (154.28) lakhs as at the end of March 31, 2023, due to increase in opening inventory levels from Financial Year 2023 to Financial Year 2024.

Employee Benefits Expenses

Employee Benefits Expenses increased by 31.65% from ? 2,799.48 lakhs in Financial Year ended March 31, 2023 to ? 3,685.47 lakhs in Financial Year ended March 31, 2024. This increase was primarily attributable to increase in salaries, wages and bonus which amounted to increase of ? 727.19 lakhs.

Finance Cost

Finance cost has increased by 73.52% to ? 242.92 lakhs in Financial Year ended March 31, 2024 from ? 140.00 lakhs in Financial Year ended March 31, 2023 on account of increase in interest on term loans from banks and NBFC in Financial Year ended March 31, 2024.

Depreciation and Amortization Expenses

Depreciation and amortisation expense increased by 89.25 % to ? 378.92 lakhs in Financial Year ended March 31, 2024 from ? 200.22 lakhs in Financial Year ended March 31, 2023. This increase is primarily attributed to the addition of property, plant, and equipment during the Financial year 2024.

Other Expenses

Other expenses increased by 47.95% to ? 1,399.73 lakhs in Financial Year ended March 31, 2024 from ? 946.05 lakhs in Financial Year ended March 31, 2023. This was primarily due to increase in travel expenses, and marketing and advertising expense collectively amounting to an increase of ? 329.47 lakhs.

Profit Before Tax

Profit before tax has increased by 99.20% to ? 1,302.04 lakhs in Financial Year ended March 31, 2024 from ? 653.65 lakhs in Financial Year ended March 31, 2023.

Tax Expenses

Due to increase in our profit before tax, our current tax expense increased by 59.34% from ? 210.51 lakhs in

Financial Year ended March 31, 2023 to ? 335.43 lakhs in Financial Year ended March 31, 2024 and our deferred tax expense was ? (29.46) lakhs in Financial Year ended March 31, 2024, as compared to ? (45.58) lakhs in Financial Year ended March 31, 2023.

Profit After Tax

The Companys profit after tax stood at Rs. 996.07 lakhs in the Financial Year 2024 as compared to Rs. 488.71 lakhs in the Financial Year 2023. Also, the Companys PAT margin increased from 0.46% in Financial Year 2023 to 1.06% in the Financial Year 2024.

The increase in PAT is on account of the following factors:

• The Companys insurance broking business (conducted through its wholly owned subsidiary- Reliassure Insurance Brokers Private Limited) which commenced its business operations in November 2022 experienced a rise in its direct insurance broking business from Rs. 23.06 lakhs in the Financial Year 2023 to Rs. 508.34 lakhs in the Financial Year 2024 which enabled them to generate profit of an amount of Rs. 203.27 lakhs in the Company in the Financial Year 2024 as compared to a loss of Rs. 40.47 lakhs in the Financial Year 2023.

• The Companys full-fledged money changer business (conducted through its wholly owned subsidiary- RNFI Money Private Limited) also experienced an uptick in its profit margins owing to increased volume in retail category of money changer business.

RESULTS OF OPERATIONS INFORMATION FOR THE FINANCIAL YEAR ENDED MARCH 31, 2023 COMPARED WITH FINANCIAL YEAR ENDED MARCH 31, 2022

(? in Lakhs unless stated otherwise)

Particulars	Financial Year ended March 31, 2023	Financial Year ended March 31, 2022	Change in ? Lakhs	Change in %
Income:
Revenue from operations	1,06,659.37	18,825.26	87,834.10	466.58%
Other income	280.26	254.67	25.59	10.05%
Total Income	1,06,939.62	19,079.93	87,859.69	460.48%
Expenses:
Direct Costs	18,294.26	12,488.78	5,805.48	46.49%
Purchases of Traded Goods	84,060.24	3,402.08	80,658.16	2370.85%
Change in inventories of traded goods/ finished goods	(154.28)	108.84	(263.12)	(241.75%)
Employee Benefit Expenses	2,799.48	1,672.76	1,126.72	67.36%
Finance Costs	140.00	49.20	90.80	184.57%
Depreciation and Amortization Expenses	200.22	149.49	50.72	33.93%
Other expenses	946.05	427.81	518.25	121.14%
Total Expenses	1,06,285.97	18,298.96	87,987.02	480.83%
Profit/(loss) before exceptional items and tax for the year	653.65	780.97	(127.33)	-16.30%
Exceptional items	-	(3.00)	3.00	100.00%
Profit/(loss) before tax for the year	653.65	777.97	(124.33)	(15.98%)
Tax expense:
- Current tax	210.51	226.37	(15.85)	(7.00%)
- Deferred tax	(45.58)	(3.42)	(42.16)	(1232.59%)
Income tax expense	164.94	222.95	(58.01)	(26.02%)
Profit/(loss) after tax for the year	488.71	555.03	(66.31)	(11.95%)

Total Income

Our total income has increased by 460.48% to ? 1,06,939.62 Lakhs in Financial Year ended March 31, 2023 from ? 19,079.93 Lakhs in Financial Year ended March 31, 2022 primarily due to increase in the revenue from operations.

Revenue from Operations

Our revenue from operations increased significantly by 466.58% to ?1,06,659.37 Lakhs in Financial Year ended March 31, 2023 from ? 18,825.26 Lakhs in Financial Year ended March 31, 2022. The surge in revenue can be predominantly attributed to increase in sale of products being recharge vouchers and foreign exchange currencies amounting to ? 80,821.43 Lakhs, increase in revenue from business correspondent services amounting to ? 5,547.39 Lakhs and increase in revenue from non-business correspondent services amounting to ? 1,485.06 Lakhs. The detailed reason for revenue increase is as follows:

• Sale of products being recharge vouchers experienced a considerable rise, increasing from ? 2,614.43 lakhs in the financial year ended March 31, 2022 to ? 7,727.52 lakhs in the financial year ended March 31, 2023, driven by the easing of pandemic restrictions and the fully opening of the economy. Furthermore, foreign exchange sales increased from ? 466.30 lakhs in the financial year ended March 31, 2022 to ? 76,174.64 lakhs in the financial year ended March 31, 2023 due to ease of travel restrictions post-pandemic which initiated cross-border movement increasing the demand for money changing services. Also, the Company upgraded its FFMC license in March 2022 enabling them to establish multiple branches PAN India instead of a single branch operation.

• In addition to the uptick in product sales, the company experienced a rise in service sales. The revenue from business correspondent services increased from ? 11,466.58 lakhs in the financial year ended March 31, 2022 to ? 17,013.97 lakhs in the financial year ended March 31, 2023, mainly due to increase in partner networks.

• The revenue from non-business correspondent services also increased from ? 3,833.98 lakhs in the financial year ended March 31, 2022 to ? 5,319.04 lakhs in the financial year ended March 31, 2023. This is because though the Company became a vendor of Baroda Global Shared Services Limited in Financial Year 2022, the delinquent loan collection services gained momentum in Financial year 2023.

Other Income

Our other income was ? 280.26 Lakhs in Financial Year ended March 31, 2023 as compared to ? 254.67 lakhs in Financial Year ended March 31, 2022, which has increased by 10.05% mainly due to receipt of rental income amounting to ? 84.73 lakhs beginning from Financial Year 2023 offset by one-time technology development and consultancy fees amounting to ? 64.51 lakhs received for the Financial Year 2022.

Total Expenses

Our total expenses have also increased by 480.83 % to ? 106,285.97 lakhs in Financial Year ended March 31, 2023 from ? 18,298.96 lakhs in Financial Year ended March 31, 2022. This increase was principally due to ? 5,805.48 lakhs increase in Direct Costs, ? 80,658.16 lakhs increase in purchase of traded goods, ? 263.12 lakhs decrease in change in inventories of traded goods / finished goods, ? 1,126.72 lakhs increase in changes in employee benefit expenses, ? 90.80 lakhs increase in finance costs, ? 50.72 lakhs increase in depreciation and amortisation expenses and ? 518.25 lakhs increase in other expenses.

Cost of Services

Cost of Services represents sum of direct costs, purchases of traded goods, changes in inventories of traded goods / finished goods. Cost of Services has increased by 538.76% from Financial Year ended March 31, 2022 to Financial Year ended March 31, 2023 due to the factors described below.

Direct Costs

Direct Costs increased by 46.49% from ? 12,488.78 lakhs in Financial Year ended March 31, 2022 to ? 18,294.26 lakhs in Financial Year ended March 31, 2023. This increase was primarily attributable to an increase in service charges paid to the merchants by an amount of ? 5,715.72 lakhs which was in line with the increase in the revenue received from business correspondent services.

Purchase of Traded Goods

The purchase of traded goods has increased by 2370.85% to ? 84,060.24 lakhs in Financial Year ended March 31, 2023 from ? 3,402.08 lakhs in Financial Year ended March 31, 2022. The rise in costs is mainly driven by an increased procurement of traded goods, notably to meet the increased demand for foreign currency and recharge purchases. The surge in foreign exchange sales, resulting from the acquisition of multiple branch FFMC license in March 2022, necessitated a proportional rise in the costs associated with the procurement of foreign currency. Simultaneously, the significant growth in recharge sales, due to easing of pandemic restrictions, contributed to increased acquisition of recharge vouchers.

Changes in Inventories of traded goods / finished goods

The change in inventories of traded goods / finished goods was at ? (154.28) lakhs as at the end of March 31, 2023 as compared to ? 108.84 lakhs as at the end of March 31, 2022, a decrease of 241.75% was primarily because of accumulation of inventory at the close of Financial Year ended March 31, 2023.

Employee Benefits Expenses

Employee Benefits Expenses increased by 67.36% from ? 1,672.76 lakhs in Financial Year ended March 31, 2022 to ? 2,799.48 lakhs in Financial Year ended March 31, 2023. This increase was primarily attributable to increase in salaries, wages and bonus which amounted to increase of ? 951.47 lakhs. The increase in salaries, wages and bonus was on account of on-boarding of additional staff to meet the increased demand across the companys business segments.

Finance Cost

Finance cost has increased by 184.57% to ? 140.00 lakhs in Financial Year ended March 31, 2023 from ? 49.20 lakhs in Financial Year ended March 31, 2022 on account of increase in term loans from banks in Financial Year ended March 31, 2023.

Depreciation and Amortization Expenses

Depreciation and amortisation expense increased by 33.93 % to ? 200.22 lakhs in Financial Year ended March 31, 2023 from ? 149.49 lakhs in Financial Year ended March 31, 2022. This increase is attributed to the addition of property, plant, and equipment during the Financial year 2023.

Other Expenses

Other expenses increased by 121.14% to ? 946.05 lakhs in Financial Year ended March 31, 2023 from ? 427.81 lakhs in Financial Year ended March 31, 2022. This was primarily due to increase in legal and professional charges, travel expenses, marketing and advertising expense and provision for doubtful advances, collectively amounting to an increase of ? 338.30 lakhs.

Profit Before Tax

Profit before tax has decreased by 15.98% to ? 653.65 lakhs in Financial Year ended March 31, 2023 from ? 777.97 lakhs in Financial Year ended March 31, 2022.

Tax Expenses

Due to decrease in our profit before tax, our current tax expense decreased by 7.00% from ? 226.37 lakhs in Financial Year ended March 31, 2022 to ? 210.51 lakhs in Financial Year ended March 31, 2022 and our deferred tax expense was ? (3.42) lakhs in Financial Year ended March 31, 2023, as compared to ? (45.58) lakhs in Financial Year ended March 31, 2022.

Profit After Tax

The Companys revenue from operations grew exponentially from Rs. 18,825.26 lakhs in financial year 2022 to Rs. 1,06,659.37 lakhs in financial year 2023 representing a revenue growth of 466.58%. This is mainly attributable to the uptick in sale of products in financial year 2023 which experienced a revenue growth of 2292.14%. The sale of services grew at the stable growth rate of 46.19%. In spite of increased revenue from operations, the Companys PAT and PAT margin declined from Rs. 555.03 lakhs to Rs. 488.71 lakhs and 2.95% to 0.46% respectively. This is because of the following reasons:

1) Continuation of increased commission pay outs to the merchants/network partners/customers under sale of services to increase its customer base as part of its strategy.

2) The Companys wholly owned subsidiary named Reliassure Insurance Brokers Private Limited experienced loss in its first year of operation of insurance broking business in the financial year 2023 amounting to Rs. 40.47 lakhs which leads to a decline in consolidated profit. This has also contributed to decline in gross margin from sale of services segment from 18.38% to 18.22%.

3) The full-fledged money changer business in RNFI Money Private Limited (Companys wholly owned subsidiary) has contributed an increase in total revenue of Rs. 75,721.07 lakhs in FY23 out of total revenue from operations increase of Rs. 87,834.11 Lakhs which is 86.20% of the total revenue increase in FY23, while the PAT margin under this segment is only 0.05% in Financial Year 2023. Therefore, the business runs on high volume but low margin. As a result, the gross contribution margin from Company s overall revenue from operations also experienced a dip from 15.01% to 4.18% due to drastic increase in sale of foreign exchanges.

4) Further there is a decline in PAT during the FY 2023 due to an increase in Finance cost and Depreciation by Rs. 141.53 lakhs.

Cash Flow

The table below summaries our cash flows from our Restated Consolidated Financial Information for the financial years ended March 31, 2024, 2023 and 2022:

(? In lakhs)

Particulars	For year ended March 31,
	2024	2023	2022
Net cash flow generated from/ (utilized in) operating activities (A)	4,707.60	-2,009.33	2,017.25
Net cash flow generated from/ (utilized in) investing activities (B)	-2,615.11	-807.85	-37.55
Net cash flow generated from/ (utilized in) financing activities (C)	737.40	791.80	-599.46
Net (decrease)/ increase in cash & cash equivalents (A+B+C)	2,829.89	-2,025.38	1,380.24
Cash and cash equivalents at the beginning of the period/ year	3,237.11	5,262.48	3,882.24
Cash and cash equivalents at the end of the period/	6,067.00	3,237.11	5,262.48

Cash flow from Operating Activities

For the Financial year ended March 31, 2024

Net cash flow from our operating activities was ? 4,707.60 lakhs for the financial year ended March 31, 2024. Our operating cash flow before working capital changes was ? 1,942.94 lakhs in the financial year ended March 31, 2024, which was the result of the profit before tax for the year of ? 1,302.04 lakhs adjusted primarily for depreciation and amortization of ? 378.92 lakhs, finance costs of ? 227.78 lakhs, Minority Share in Post Acquisition Profit of ? 68.25 lakhs and interest income of ? (185.74) lakhs. Our movements in working capital primarily consisted of an decrease in inventories of ? 25.86 lakhs, an increase in trade receivables of ? 1,497.43 lakhs, decrease in loans and advances ?2,076.14 lakhs, an increase in other current assets of ? 1,375.90 lakhs, an increase in other non-current assets of ?143.99 lakhs and increase in other current liabilities of ? 3,631.30 lakhs.

For the Financial year ended March 31, 2023

Net cash flow utilized in our operating activities was ? (2,009.33) lakhs for the financial year ended March 31, 2023. Our operating cash flow before working capital changes was ? 1,000.91 lakhs in the financial year ended March 31, 2023, which was the result of the profit before tax for the period/year of ? 653.65 lakhs adjusted primarily for depreciation and amortization of ? 200.22 lakhs, finance costs of ? 133.27 lakhs, Minority Share in Post Acquisition Profit of ? 60.01 lakhs and interest income of ? (108.73) lakhs. Our movements in working capital primarily consisted of an increase in inventories of ? 154.28 lakhs, an increase in trade receivables of ? 226.42 lakhs, increase in loans and advances ?1,182.62 lakhs, an increase in other current assets of ? 170.87 lakhs, an increase in other non-current assets of ?252.48 lakhs and decrease in other current liabilities of ? 457.39 lakhs.

For the Financial year ended March 31, 2022

Net cash flow generated from our operating activities was ? 2,017.25 lakhs for the financial year ended March 31, 2022. Our operating cash flow before working capital changes was ? 829.74 lakhs in the financial year ended March 31, 2022, which was the result of the profit before tax for the period/year of ? 777.97 lakhs adjusted primarily for depreciation and amortization of ? 149.49 lakhs, finance costs of ? 41.38 lakhs and interest income of ? (138.59) lakhs. Our movements in working capital primarily consisted of an increase in trade receivables of ? 388.00 lakhs, a decrease in trade payables of ? 85.20 lakhs, an increase in loans and advances ? 901.00 lakhs, an increase in other current liabilities of ? 958.82 lakhs and an decrease in other non-current financial assets of ? 1,954.64 lakhs.

Cash flow from Investing Activities

For the Financial year ended March 31, 2024

Net cash used in investing activities was ? (2,615.11) lakhs for the financial year ended March 31, 2024. This reflected the capital expenditure made towards Purchase of Property, plant and equipment and intangible asset, capital work in progress, capital advances (net), Investment Property for ? 2,862.91 lakhs. These payments were partially offset by receipt of Proceeds from sale of property, plant and equipment of ? 2.07 lakhs and Interest received for ? 185.74 lakhs.

For the Financial year ended March 31, 2023

Net cash used in investing activities was ? (807.85) lakhs for the financial year ended March 31, 2023. This reflected the capital expenditure made towards Purchase of Property, plant and equipment and intangible asset, capital work in progress, capital advances (net), Investment Property for ? 732.73 lakhs. These payments were partially offset by receipt of Proceeds from sale of property, plant and equipment of ? 5.93 lakhs and Interest received for ? 108.73 lakhs.

For the Financial year ended March 31, 2022

Net cash used in investing activities was ? (37.55) lakhs for the financial year ended March 31, 2022. This reflected the capital expenditure made towards Purchase of Property, plant and equipment and intangible asset, capital work in progress, capital advances (net), Investment Property for ? 379.04 lakhs. These payments were partially offset by receipt of Proceeds from sale of property, plant and equipment of ? 1.55 lakhs and Interest received for ? 138.59 lakhs.

Cash flow from Financing Activities

For the Financial year ended March 31, 2024

Net cash generated from financing activities was ? 737.40 lakhs for the financial year ended March 31, 2024 primarily consisting of payment of finance costs of ? 227.78 lakhs, proceeds from long term borrowings of ? 421.08 lakhs, and proceeds from short term borrowings of ? 735.52 lakhs.

For the Financial year ended March 31, 2023

Net cash generated from financing activities was ? 791.80 lakhs for the financial year ended March 31, 2023 primarily consisting of Proceeds from issue of equity share capital of Subsidiary of ? 149.36 lakhs, payment of finance costs of ? 133.27 lakhs, proceeds from long term borrowings of ? 438.26 lakhs, and proceeds from short term borrowings of ? 344.72 lakhs.

For the Financial year ended March 31, 2022

Net cash generated from financing activities was ? (599.46) lakhs for the financial year ended March 31, 2022 primarily consisting of proceeds from long term borrowings of ? 787.99 lakhs, payment of finance costs of ? 41.38 lakhs and repayment of short term borrowings of ? 1,300.60 lakhs.

Financial Indebtedness

As on March 31, 2024 the total outstanding borrowings of our Company was ? 3,027.23 Lakhs. The following table sets out the details of the total borrowings outstanding as on March 31, 2024.

(in Lakhs)

Particulars	As on March 31, 2024
Long term borrowings
Secured
(a)Term Loan from banks	209.06
(b)Term Loan from Financial Institutions	1,385.85
(c)Vehicle Loans	31.09
Unsecured
(a) Loan From Banks	-
(b) Loan from Related parties and others	21.34
Short term borrowings
Secured
(a) Bank overdrafts	48.32
(b) Current Maturities of Long Term Borrowings	187.90
Unsecured
(a) Loans from Financial Institutions	177.68
(b) Loans from Others	867.15
(c) Current Maturities of Long Term Borrowings	98.85
Total Borrowings	3,027.23

In the event, any of our lenders declare an event of default, such current and any future defaults could lead to acceleration of our repayment obligations, termination of one or more of our financing agreements or force us to sell our assets, any of which could adversely affect our business, results of operations and financial condition.

Contingent Liabilities and Capital Commitments

The following table sets forth our contingent liabilities and capital commitments as at March 31, 2024, March 31, 2023 and March 31, 2022 as per the Restated Consolidated Financial Information:

(In Lakhs)

Particulars	As at 31 March 2024	As at 31 March 2023	As at 31 March 2022
Contingent liabilities
- Bank Guarantee	138.88	87.30	91.50
Capital commitments
Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for	13.84	204.22	40.00
	152.72	291.52	131.50

It is not practical for our Company to estimate the timings of cash outflow, if any in respect of above pending resolutions of the respective proceedings.

Off-Balance Sheet Items

We do not have any other off-balance sheet arrangements, derivative instruments or other relationships with any entity that have been established for the purposes of facilitating off-balance sheet arrangements.

Reservations, Qualifications and Adverse Remarks

Except as disclosed in chapter titled "Restated Financial Information" on page 203, there have been no reservations, qualifications and adverse remarks.

Material Frauds

There are no material frauds, as reported by our statutory auditor, committed against our Company, in the last three Financial Years.

Unusual or Infrequent Events or Transactions

As on date, there have been no unusual or infrequent events or transactions including unusual trends on account of business activity, unusual items of income, change of accounting policies and discretionary reduction of expenses.

Significant Economic Changes that Materially Affected or are Likely to Affect Income from Continuing Operations

Indian rules and regulations as well as the overall growth of the Indian economy have a significant bearing on our operations. Major changes in these factors can significantly impact income from continuing operations. There are no significant economic changes that materially affected our Company‘s operations or are likely to affect income from continuing operations except as described in chapter titled "Risk Factors" on page 32.

Seasonality of Business

Our Business is not seasonal in nature.

Known Trends or Uncertainties that have had or are expected to have a Material Adverse Impact on Sales, Revenue or Income from Continuing Operations

Other than as described in the section titled "Risk Factors" on page 32 and in this chapter, to our knowledge there are no known trends or uncertainties that are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

Future Changes in Relationship between Costs and Revenues, in Case of Events Such as Future Increase in Labour Costs or Prices that will Cause a Material Change are known

Other than as described in chapter titled "Risk Factors" on page 32 and in this section, to our knowledge there are no known factors that might affect the future relationship between cost and revenue.

Extent to which Material Increases in Net Sales or Revenue are due to Increased Sales Volume, Introduction of New Products or Services or Increased Sales Prices

Our business has been affected and we expect that it will continue to be affected by the trends identified above and the uncertainties described in the section "Risk Factors" on page 32. Changes in revenue in the last three Financial Years are as described in "Results of Operations Information for the Financial Year ended March 31, 2024 compared with Financial Year ended March 31, 2023" and "Results of Operations Information for the Financial Year ended March 31, 2023 compared with Financial Year ended March 31, 2022"" mentioned above.

Total Turnover of Each Major Industry Segment in Which the Issuer Operates

Our business activity primarily falls within five business segments i.e. Business Correspondent, Non-business Correspondent, FFMC, Insurance Broking and Others. For detail of turnover of each business segment in which the issuer operates, please see section titled "Restated Financial Information " on page 203.

Status of any Publicly Announced New Products or Business Segments

As on the date of the Red Herring Prospectus, there are no new products or business segments that have or are expected to have a material impact on our business prospects, results of operations or financial condition.

Significant Dependence on a Single or Few Customers

The percentage of revenue from operations derived from our top customers is given below:

(in f Lakhs)

		FY 2023-24		FY 2022-23		FY 2021-22
Sr. No.	Particulars	Revenue	%	Revenue	%	Revenue	%
1	Revenue from Top 5 customers	17,999.35	19.24%	33,717.31	31.61%	13,510.24	71.77%
2	Revenue from Top 10 customers	23,546.93	25.17%	48,550.02	45.52%	15,156.01	80.51%

As certified by M/s Vikash A. Jain & Co., Chartered Accountants vide certificate dated July 11, 2024