Transcorp International Ltd Management Discussions

(Within the limits set by Companys competitive position)

BUSINESS REVIEW GENERAL ECONOMY

Strong economic growth in the first quarter of FY23 helped India overcome the UK to become the fifth-largest economy after it recovered from the COVID-19 pandemic shock. Nominal GDP for FY25 is estimated at Rs. 33.10 lakh crore (US$ 3.8 trillion) with growth rate of 9.9%, compared to Rs. 30.12 lakh crore (US$ 3.5 trillion) in FY24. Strong domestic demand for consumption and investment, along with Governments continued emphasis on capital expenditure are seen as among the key driver of the GDP in the second half of FY25. In FY25, Indias exports stood at Rs. 37.31 lakh crore (US$ 433.56 billion), with Engineering Goods (26.88%), Petroleum Products (13.86%) and electronic goods (8.89%) being the top three exported commodity. Rising employment and increasing private consumption, supported by rising consumer sentiment, will support GDP growth in the coming months.

Future capital spending of the government in the economy is expected to be supported by factors such as tax buoyancy, the streamlined tax system with low rates, a thorough assessment and rationalisation of the tariff structure, and the digitization of tax filing.

In the medium run, increased capital spending on infrastructure and asset-building projects is set to increase growth multipliers. The contact-based services sector has demonstrated promise to boost growth by unleashing the pent-up demand. The sectors success is being captured by a number of HFIs (High-Frequency Indicators) that are performing well, indicating the beginnings of a comeback.

India has emerged as the fastest-growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 1015 years, backed by its robust democracy and strong partnerships.

Indias appeal as a destination for investments has grown stronger and more sustainable because of the current period of global unpredictability and volatility, and the record amounts of money raised by India-focused funds in 2022 are evidence of investor faith in the "Invest in India" narrative.

Market Size:

Real GDP for FY25 is estimated at Rs. 187.95 lakh crores (US$ 2.2 trillion) with growth rate of 6.5%, compared to Rs. 176.51 lakh crore (US$ 2.06 trillion) for FY24. As on Jan 2025, there are 118 unicorn startups in India, with a combined valuation of over Rs. 3.0 lakh crore (US$ 354 billion). The government is also focusing on renewable sources by achieving 40% of its energy from non-fossil sources by 2030. India is committed to achieving the countrys ambition of Net Zero Emissions by 2070 through a fivepronged strategy, ‘Panchamrit. Moreover, India ranked 3rd in the renewable energy country attractive index.

According to the McKinsey Global Institute, India needs to boost its rate of employment growth and create 90 million non-farm jobs between 2023 to 2030 in order to increase productivity and economic growth. The net employment rate needs to grow by 1.5% per annum from 2023 to 2030 to achieve 8-8.5% GDP growth between same time periods. The Current Account Deficit (CAD) stood at Rs. 98,095 crore (US$ 11.5 billion) for Q3 of FY25 as compared to Rs. 88,712 crore (US$ 10.4 billion) in Q3 of FY24. This was largely due to increase in merchandise trade deficit.

Exports fared remarkably well during the pandemic and aided recovery when all other growth engines were losing steam in terms of their contribution to GDP. Going forward, the contribution of merchandise exports may waver as several of Indias trade partners witness an economic slowdown. According to Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles Mr. Piyush Goyal, Indian exports are expected to reach US$ 1 trillion by 2030.

Recent Developments

India is primarily a domestic demand-driven economy, with consumption and investments contributing to 70% of the economic activity. With an improvement in the economic scenario and the Indian economy recovering from the Covid-19 pandemic shock, several investments and developments have been made across various sectors of the economy. According to World Bank, India must continue to prioritise lowering inequality while also putting growth-oriented policies into place to boost the economy. In view of this, there have been some developments that have taken place in the recent past. Some of them are mentioned below.

• The HSBC India Manufacturing PMI increased to 58.4 in April 2025, up from 58.1 in March 2025, based on preliminary estimates. This rise signifies improved operating conditions and represents the most rapid growth pace observed in the past year. Contributing factors include a notable surge in new export orders, which experienced their most significant increase in over fifteen years, alongside a faster expansion in overall new business activity.

• In Q1 CY25, private equity (PE) and venture capital (VC) investments stood at Rs. 1,16,861 crore (US$ 13.7 billion) across 284 deals.

• India saw a robust 10.35% growth in passengers carried by domestic airlines at 431.98 lakh in FY25, from 391.46 lakh in FY24, according to the Directorate General of Civil Aviation (DGCA).

• As of April 18, 2025, Indias foreign exchange reserves stood at Rs. 58,57,537 crore (US$ 686.70 billion).

• India secured 39th position out of 133 economies in the Global Innovation Index 2024. India rose from 81st position in 2015 to 39th position in 2024. India ranks 3rd position in the global number of scientific publications.

• The gross GST (Goods and Services Tax) revenue collection stood at Rs. 1.84 lakh crore (US$ 21.57 billion) in February 2025.

• Between April 2000-December 2024, cumulative FDI equity inflows to India stood at Rs. 89.88 lakh crore (US$ 1.05 trillion).

• In February 2025, the overall IIP (Index of Industrial Production) stood at 151.3. The Indices of Industrial Production for the mining, manufacturing and electricity sectors stood at 141.9, 148.6 and 194.0, respectively.

• According to data released by the Ministry of Statistics & Programme Implementation (MoSPI), Indias Consumer Price Index (CPI) - Combined inflation was 3.34% in March 2025 against 4.85% in March 2024.

• Foreign Institutional Investors (FII) inflows in FY25 were close to Rs. 1.27 lakh crore (US$ 14.89 billion), while Domestic Institutional Investors (DII) bought Rs. 6.00 lakh crore (US$ 70.34 billion) in the same period.

• Indias wheat procurement rose 34% YoY, reaching 22.36 MT as of April 28, 2025, with target of 31 MT in sight. Strong MSP, bonuses, and robust crop output boost sales to government agencies, ensuring food security and potential for open market intervention.

Government Initiatives

Over the years, the Indian government has introduced many initiatives to strengthen the nations economy. The Indian government has been effective in developing policies and programmes that are not only beneficial for citizens to improve their financial stability but also for the overall growth of the economy. Over recent decades, Indias rapid economic growth has led to a substantial increase in its demand for exports. Besides this, a number of the governments flagship programmes, including Make in India, Start-up India, Digital India, the Smart City Mission, and the Atal Mission for Rejuvenation and Urban Transformation, is aimed at creating immense opportunities in India. In this regard, some of the initiatives taken by the government to improve the economic condition of the country are mentioned below:

• According to a report by Wood Mackenzie in January 2025, India, the United States, and West Asia are expected to collectively add 100 Gigawatts (GW) of solar capacity by 2025, while China is anticipated to continue its leadership in the solar industry.

• In July 2024, the Ministry of Finance held the Union Budget and announced that for 2024-25, the total receipts other than borrowings and the total expenditure are estimated at Rs. 32.07 lakh crore (US$ 383.93 billion) and Rs. 48.21 lakh crore (US$ 577.16 billion), respectively.

• In February 2024, the Finance Ministry announced the total expenditure in Interim 2024-25 estimated at Rs. 47,65,768 crore (US$ 571.64 billion) of which total capital expenditure is Rs. 11,11,111 crore (US$ 133.27 billion).

• On January 22, 2024, Prime Minister Mr. Narendra Modi announced the Pradhan Mantri Suryodaya Yojana. Under this scheme, 1 crore households will receive rooftop solar installations.

• On September 17, 2023, Prime Minister Mr. Narendra Modi launched the Central Sector Scheme PM-VISHWAKARMA in New Delhi. The new scheme aims to provide recognition and comprehensive support to traditional artisans & craftsmen who work with their hands and basic tools. This initiative is designed to enhance the quality, scale, and reach of their products, as well as to integrate them with MSME value chains.

• On August 6, 2023, Amrit Bharat Station Scheme was launched to transform and revitalize 1309 railway stations across the nation. This scheme envisages development of stations on a continuous basis with a long-term vision.

• On June 28, 2023, the Ministry of Environment, Forests, and Climate Change introduced the ‘Draft Carbon Credit Trading Scheme, 2023.

• From April 1, 2023, Foreign Trade Policy 2023 was unveiled to create an enabling ecosystem to support the philosophy of ‘Aatmanirbhar Bharat and ‘Local goes Global.

• To enhance Indias manufacturing capabilities by increasing investment and production in the sector, the government of India has introduced the Production Linked Incentive Scheme (PLI) for Pharmaceuticals.

• Prime Ministers Development Initiative for North-East Region (PM-DevINE) was announced in the Union Budget 2022-23 with a financial outlay of Rs. 1,500 crore (US$ 182.35 million).

• Prime Minister Mr Narendra Modi has inaugurated a new food security scheme for providing free food grains to Antyodaya Ann Yojna (AAY) & Primary Household (PHH) beneficiaries, called Pradhan Mantri Garib Kalyan Ann Yojana (PMGKAY) from January 1,2023.

Road Ahead: -

Indias economy grew by 6.2% in Q3 FY25. Signs of recovery are now visible, with growth expected to rise to 7.6% in Q4 FY25—indicating a possible turnaround in the coming months. Indias comparatively strong position in the external sector reflects the countrys positive outlook for economic growth and rising employment rates. India ranked 5th in foreign direct investment inflows among the developed and developing nations listed for the first quarter of 2022.

Indias economic story during the first half of FY24 highlighted the unwavering support the government gave to its capital expenditure, which, in FY24, stood 37.4% higher than the same period last year. In the Union Budget of FY26, capital expenditure took lead by steeply increasing the capital expenditure outlay by 10.0 % to Rs. 11.21 lakh crore (US$ 131.42 billion) over Rs. 10.18 lakh crore (US$ 119.34 billion) in FY25. Stronger revenue generation because of improved tax compliance, increased profitability of the company, and increasing economic activity also contributed to rising capital spending levels.

Indias total exports of goods and services rose by 5.5% to a record Rs. 69.8 lakh crore (US$ 820.9 billion) in FY25, compared to Rs. 65.8 lakh crore (US$ 773.0 billion) in FY24.

With a reduction in port congestion, supply networks are being restored. With a proactive set of administrative actions by the government, flexible monetary policy, and a softening of global commodity prices and supply-chain bottlenecks, inflationary pressures in India look to be on the decline overall.

Source: https://www.ibef.org/economy/indian-economy-overview BUSINESS AND INDUSTRY DEVELOPMENTS. OPPORTUNITIES & THREATS OUTLOOK, OPPORTUNITIES AND THREATS

The principal focus areas of the company are money changing, remittance and prepaid payment systems.

1. Foreign Exchange Business:

Your Company is designated Authorized Dealer (Category II) from Reserve Bank of India, for money changing which includes buying and selling of Foreign Exchange in retail as well as wholesale to individuals and corporate clients and various permissible Outward Remittance activities such as remittance for overseas education, medical treatment abroad, emigration and emigration consultancy fees and for other permissible purpose.

The company continues to steadily grow and be profitable on an ongoing basis. The Company has added many new clients and done several strategic businesses tie ups to increase market share and Transcorp received a Recognition Award from Thomas Cook Forex Cards Division for its Superlative Performance.

Performance at a glance:

Profitability Q4FY25 highlights

Profit Before Tax (PBT) for Q4 FY25 rose 122% YoY to ?114.04 Lakhs, compared to ?51.54 Lakhs in Q4 FY24.

Profit After Tax (PAT) for Q4 FY25 stood at ?128.16 Lakhs, up from ? 103.51 Lakhs in Q3 FY25 and ?12.55 Lakhs in Q4 FY24.

FY ended March 25 highlights.

Full-year PBT surged more than 3x YoY, reaching ?345.10 Lakhs, up from ? 108.54 Lakhs in FY24.

2. Setting up and operating payment systems:

The companys Payments Division added that the Payments Systems division of the Company, which includes the Prepaid Payment Instruments (PPI) license continues to flourish with tremendous growth in transaction volumes and issuance. The company has over 40 lac instruments issued, and transaction volumes compared to the last fiscal year have grown by over 500%. With a progressive regulatory framework from Reserve Bank of India, which is empowering PPIs with additional authorizations, the Payments Systems division is a sunrise business with immense lucrative opportunities which will also digitally and financially empower the nation. The Company continues to work closely with payment networks, strategic partners, and the Apex regulator to steadily compound the growth of the business.

Company has become the first non-Bank in India for various activities including:

1. First non-Bank to go live with network cards (Rupay)

2. First non-Bank to get RBI approvals for co-branding.

3. First (and currently only) non-Bank live on the VISA network

4. CKYC and Video KYC

5. First issuer to go live with contactless wearables (rings) and biometric cards

6. Preferred partners for Rupay and VISA for co-branding programs and any new product innovation

7. Only non-Bank offering cash withdrawals.

Company works selectively with marquee clients to deliver full stack co-branded card programs which bundles licensing & technology- the only non-Bank offering this in India. Company powers co-branded prepaid cards and wallets for leading fintech companies, lenders, aggregators, industry giants and startups using its unique licensing and platform bundle.

Companys PPI platform is being used for many kinds of payouts including merchant settlements, commission/incentives, gifts, loans, salaries, expenses/meals. In addition to tax benefits, payouts on these cards give visibility on customer spend patterns and data analytics to optimize marketing. In April 2021, Reserve Bank of India has strategically broadened the scope of services for PPIs - allowing cash withdrawals and other financial products to enabling Transcorp to provide offerings akin to a traditional Bank. These changes include offering and settling NEFT/RTGS transactions and cash withdrawals from the ATM.

Transcorp is proud to announce several significant achievements in Financial Year 2024-25, highlighting our commitment to growth, innovation, and delivering exceptional value to our stakeholders.

• Successful completion of the Test Phase under RBIs ‘On Tap Regulatory Sandbox for the theme "Retail Payments", marking a significant stride toward offline digital payment innovation.

• Over 5 million Prepaid Payment Instruments (PPIs) issued in India.

• Participation in the 46th UNESCO World Heritage Event, promoting the use of "UPI One World" wallets to facilitate seamless cashless transactions for international visitors and NRIs.

the Financial Inclusion Division (FID) Under the SBI Monsoon Dhamaka Campaign, achieved remarkable milestones, exceeding its targets with achievements of 114.87% in PMJDY (Pradhan Mantri Jan Dhan Yojana) and 107% in APY (Atal Pension Yojana).

SEGMENT WISE REPORTING

Segment wise revenue, results and capital employed are provided in the notes on account forming part of the Annual Report.

RISK AND CONCERNS

Your company has exposure in foreign exchange and any wide fluctuations in foreign exchange prices have an adverse effect on the performance of the company. Further the increase in competition, reduction in profit margins and change in government policies may affect the operation of the company.

Your Company has satisfactory internal control systems, the adequacy of which has been reported by the Auditors in their report as required under Companies (Auditors

Report) Order, 2020. The discussion on the financial performance of the company is covered in the Directors Report.

FORWARD- LOOKING STATEMENTS

This report contains forward-looking statements, which may be identified by use of words like plans, expects, will, anticipates, believes, intends, projects, estimates or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the Companys strategy for growth, market position, expenditures and financial results, are forward-looking statements.

These statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Companys actual results, performance or achievements could thus differ materially from those projected in any such forwardlooking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events.

CHANGES IN THE KEY FINANCIAL RATIOS

S.n o	Particular s	As on 31.03.202 5	As on Chang 31.03.202 e in % 4		Explanatio n for reduction (if significant i.e., more than 25%)
1	Return on net worth (%)	5.86%	1.08%	443.54%	Due to higher inflow of dividend as compared to previous year
2	Return on Capital Employed (%)	8.18%	4.55%	79.91%	Due to substantial increase in earnings before interest and tax as compared to borrowing
3	Debt Equity Ratio	0.39	0.32	21.75%	NA
4	Current Ratio	0.83	0.74	13.03%	NA
5	Debtors Turnover Ratio	84.90	116.41	-27.07	Lower Credit sales as compared to previous year
6	Inventory Turnover	392.46	674.74	-41.84	Due to reduction in Cost of goods sold, and increase in average inventory
7	Interest in Coverag e Ratio	3.64	3.14	15.92	Due to higher Income
8	Operatin g Profit Margin (%)	2.95%	1.52%	93.46%	Due to higher operating profit compared to previous year
9	Net Profit Margin (%)	0.22%	0.03%	740.88%	Due to higher inflow of dividends as compared to previous year