Notes to Accounts of AGS Transact Technologies Ltd.

Mar 31, 2024

V. Provisions (other than for employee benefits)

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the reporting date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

Provision for warranties:

Provision for current warranty-related costs is recognised when the related product is sold. Provision is based on technical estimates which are based on historical experience. The estimates of such warranty-related costs are reviewed and revised annually.

W. Contingent liabilities and contingent assets

Contingent liabilities are possible obligations whose existence will only be confirmed by future events not wholly within the control of the Company, or present obligations where it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured with sufficient reliability.

Contingent liabilities are not recognised in the financial statements but are disclosed unless the possibility of an outflow of economic resources is considered remote.

A contingent asset is not recognised but disclosed in the Financial Statements where an inflow of economic benefit is probable.

Contingent liabilities and contingent assets are reviewed at each reporting date.

X. Leases

The Company assesses whether a contract contains a 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 of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contact involves the use of an identified asset (ii) the Company has substantially all of the

economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

As a lessee

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Companyâs incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the fixed payments, including in-substance fixed payments.

The lease liability is measured at amortised cost using the effective interest method.

Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. Right-of-use assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

Under Ind AS 116, the Company recognised a right-of-use asset and a lease liability for the sale and leaseback transaction, measured in the same way as other right-of-use assets and lease liabilities at that date and adjusted the

leaseback right-of-use of asset for proportionate gains and losses recognised in statement of profit and loss.

The Company has used number of practical expedients when applying Ind AS 116: - Short-term leases, leases of low-value assets and single discount rate

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. The Company applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date. The Company has used hindsight when determining the lease term and did not recognise right of use asset for leases to which the lease term end within 12 months of date of initial application.

Lease liability and ROU assets have been separately presented in Balance Sheet and lease payments have been classified as financing cash flows.

Y. Income tax

Income tax comprises current and deferred tax. It is recognised in the Statement of Profit and Loss except to the extent that it relates to an item recognised directly in equity or in other comprehensive income.

(i) Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any.

(ii) Deferred tax

Deferred tax is recognised in respect of temporary differences arising between the carrying amounts of assets and liabilities for financial reporting purposes

and tax base of assets and liabilities. Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilised.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves. Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be utilised.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

Z. Finance Cost

Finance costs include interest and other borrowing costs incurred in connection with the borrowing of funds. Interest cost on financial liabilities is measured at amortized cost such as borrowings from banks and others or bonds or similar instruments etc. calculated as per the effective interest method. Interest and other dues on statutory liabilities that are compensatory in nature are measured at the interest rates as applicable under the Statue. Other borrowing cost includes processing fees, bill discounting charges, commission or charges paid for letter of credit and bank guarantees, exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs etc.

AA. Operating segments

(i) Basis for segmentation

An operating segment is a component of the entity that engages in business activities from which it may earn and incur expenses, including revenues and expenses that relate to transactions with any of the company''s other components and for which discrete financial information is available. Such decision is taken by chief operating decision maker (CODM).

(ii) Business segment

The Companyâs operating businesses are organised and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products or services and serves different markets. Accordingly, the Company has identified ''Payment Solutionsâ, ''Banking Automation Solutionsâ and ''Other Automation Solutionsâ segments as the primary reportable segments.

(iii) Geographical segment

The Companyâs business is primarily within India. Hence no separate geographical disclosure is considered necessary.

(iv) Segment information

- Inter-segment transfers: The Company generally accounts for inter-segment sales and transfers at cost plus appropriate margins.

- Allocation of common costs: Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

- Unallocated items: Unallocated items include general corporate income and expense items which are not allocated to any business segment.

- Segment accounting policies: The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

AB. Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the year is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares), if any, 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 year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

AC. Dividend

The Company recognises a liability for any dividend declared but not distributed at the end of the reporting period when the distribution is authorised and the distribution is no longer at the discretion of the Company on or before the end of the reporting period. A corresponding amount is recognised directly in equity.

AD. Measurement of earnings before interest, tax, depreciation and amortisation (EBITDA)

The Company has opted to present earnings before interest (Finance Cost), tax, depreciation and amortisation (EBITDA) as a separate line item on the face of the Statement of Profit and Loss. The Company measures EBITDA on the basis of profit/loss from continuing operations including other income.

AE. Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, unrestricted bank balances and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

AF. Current and non-current classification

The Schedule III to the Act requires assets and liabilities to

be classified as either current or non-current.

An asset is classified as current when it satisfies any of the

following criteria:

(a) it is expected to be realized in, or is intended for sale or consumption in, the entityâs normal operating cycle;

(b) it is held primarily for the purpose of being traded;

(d) it is cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

All other assets are classified as non-current.

A liability is classified as current when it satisfies any of the

following criteria:

(a) it is expected to be settled in, the entityâs normal operating cycle;

(b) it is held primarily for the purpose of being traded;

(d) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

All other liabilities are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. Based on the nature of services and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.

AG. Recent amendments/ pronouncements

Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

Notes:

Weighted average number of shares is the number of equity shares outstanding at the beginning of the year adjusted by the number of equity shares issued during year, multiplied by the time weighting factor. The time weighting factor is the number of days for which the specific shares are outstanding as a proportion of total number of days during the year.

Note 36 Employee benefits

A. Defined contribution plans

Contribution to Provident fund, Employee State Insurance and any other funds

Amount of '' 34.24 million (31 March 2023: '' 31.41 million) is recognised as an expense and included in âEmployee benefit expensesâ (refer note 32) in the Statement of Profit and Loss.

B. Defined benefit plans Gratuity

The gratuity benefit payable to the employees of the Company is as per the provisions of the Payment of Gratuity Act, 1972, as amended. Under the gratuity plan, every employee who has completed at least 5 years of service gets gratuity on separation or at the time of superannuation calculated for equivalent to 15 days salary for each completed year of service calculated on last drawn basic salary.

The Company does not have a fund plan for gratuity liability.

The following table shows a reconciliation from the opening balances to the closing balances for the net defined benefit (asset) / liability and its components:

Note 39 Service concession arrangement

During the year ended 31 March 2016, the Company along with a private bank (acting in the capacity of lead bidder) and another third party jointly bid for a public private arrangement to set up an open loop, contactless, smart card based Automatic Fare Collection System (AFCS) in relation to a metro rail project. The roles, responsibilities and obligations of all the parties was agreed as part of a consortium agreement executed between the three parties.

The Company''s responsibilities include supply, installation and testing of AFCS equipment and support / maintenance of such equipment for a year of 6 years. The Company is entitled to receive a specified percentage of the value of ticket sales generated by the metro rail project for a period of 10 years.

The arrangement has been identified as a service concession arrangement in accordance with Appendix A to Ind AS 11 Construction Contracts (now in accordance with Appendix C to Ind AS 115) where the Company''s responsibilities include supply of the specified equipment and maintenance / support in relation to the same and the consideration linked to the ticket revenue generated by the related metro rail project.

During the year ended 31 March 2017, the Company was in the process of fulfilling its supply / installation / testing obligation and hence the cost incurred in relation to the project was capitalised as Intangible Assets under Development, net of in substance reimbursements received from co-bidders. In addition, amounts payable in relation to such projects have been reflected as Other financial liabilities.

To the extent the installation and consequent deployment of equipment has been completed, related expenditure (net of in substance reimbursements received from co bidders) and corresponding revenue based on the percentage of installation and deployment is recognised in the Statement of Profit and Loss and the consequent Intangible Assets are recognised in the Standalone Balance Sheet. The useful life is assessed based on the go live date.

Note 44

During the year ended 31 March 2014, the Company had entered into an agreement with a customer for providing ATM Management services for 10 years. As a part of the arrangement, the Company acquired existing ATM sites at total consideration of '' 926.25 million. Further, an interest free security deposit of '' 880.00 million has been advanced towards such acquisition of the ATM network.

The property, plant and equipment acquired were capitalised at the respective fair value of '' 649.64 million and the difference of '' 276.61 million between the fair value of property, plant and equipment acquired and the total consideration was recognised as Premium on purchase of assets under ''Other assets''. In addition, the difference between the fair value and transaction price of the interest free security deposit referred to above has also been adjusted with premium on purchase of assets under ''Other assets''. The aggregate premium on purchase of equipment is amortised over the life of the contract with an adjustment to revenue. The charge for the current year is '' 31.80 million (31 March 2023: ''.58.40 million).

The Company is depreciating the property, plant and equipment acquired over the remaining useful life.

Note 46 Investment in subsidiaries

As at 31 March 2024, the Company has investment amounting to '' 3,006.42 million (31 March 2023: '' 2,904.01 million) in its wholly owned subsidiaries namely âGlobal Transact Services Pte. Ltd.â, âIndia Transact Services Limitedâ and âSecurevalue India Limitedâ. The Company has also provided loans amounting to '' 191.94 million (31 March 2023: '' 0.83 million) to fund the operations of its subsidiaries and the loans are considered recoverable (refer note 49).

Letters of support are provided in respect of subsidiaries namely Novus Technologies Pte. Limited. and India Transact Services Limited. The Company consider its investments in subsidiaries as strategic and long-term in nature. The Company is committed to operationally, technically and financially support the operations of its subsidiaries.

B. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

â¢ Credit risk

â¢ Liquidity risk; and

â¢ Market risk

i. Risk management framework

The Companyâs Board of Directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework.

The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities.

ii. Credit risk

Credit risk is the risk of financial loss to the Company, if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Companyâs receivables from customers and investments. The carrying amounts of financial assets represent the maximum credit risk exposure. In respect of guarantees, refer note (ii) to liquidity risk below.

a. Trade receivables

The Company has a policy under which each new customer is analysed individually for creditworthiness before offering credit period and delivery / service terms and conditions. The Company makes specific provisions against such trade receivables wherever required and monitors the same at periodical intervals.

Credit risk from trade receivables is managed through the Companyâs policies, procedures and controls relating to customer credit risk management by establishing credit limits, credit approvals and monitoring creditworthiness of the customers to which the Company extends credit in the normal course of business. Outstanding customer receivables are regularly monitored. Based on prior experience, the portfolio of customers (largely being banks and public sector undertakings in India) and an assessment of the current economic environment, management believes there is no credit risk provision required. Revenue from two external customers based in India, covered across segments aggregating to '' 2,267.75 million (31 March 2023: '' 2,357.99 million) and '' 1,806.89 million (31 March 2023: '' 1987.71 million) respectively represented more than 10% of the Company''s total revenue.

b. Cash, cash equivalents and other bank balances

The Company held cash and cash equivalents and other bank balances of '' 814.05 million (31 March 2023: '' 601.66 million) The cash and cash equivalents are held with bank and financial institution counterparties with good credit ratings.

c. Security deposits

The Company has furnished security deposits to its lessors for obtaining the premises on lease. The Company considers that its deposits have low credit risk or negligible risk of default. Also, where Company expects that there is an uncertainty in the recovery of deposit, it provides for suitable impairment on the same.

iii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation. The Company aims to maintain the level of its cash and bank balances at an amount in excess of expected cash outflows on financial liabilities (other than trade payables) over the next six months. The Company also monitors the level of expected cash inflows on trade receivables and loans together with expected cash outflows on trade payables and other financial liabilities.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments.

(i) The interest payments on variable interest rate loans in the table above reflect market forward interest rates at the reporting date and these amounts may change as market interest rates change.

(ii) Guarantees issued by the Company on behalf of subsidiaries are with respect to borrowings / financial assistance by the respective subsidiaries. These amounts will be payable on default by the concerned parties. As of the reporting date, none of the subsidiaries have defaulted and hence, the Company does not have any present obligation to third parties in relation to such guarantees.

(iii) The carrying amounts of the reverse factoring include payables which are subject to reverse factoring arrangement aggregating to '' 753.26 million (31 March 2023: '' 651.78). The amount repayable under the reverse factoring arrangement is presented in current borrowings.

iv. Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates etc.- will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

a. Currency risk

The functional currency of the Company is Indian rupees. The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the functional currency. The Company uses forward exchange contracts to hedge its currency risk on borrowings, mostly with a maturity of less than one year from the reporting date. Exposure on trade receivables and trade payables is unhedged. The Company manages itself against currency risk of External Commercial Borrowings by entering into cross-currency swaps.

The summary quantitative data about the Company''s exposure to currency risk is as follows (the amounts below have been presented in their respective foreign currencies):

b. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

The management is responsible for the monitoring of the Companyâs interest rate position. Various variables are considered by the management in structuring the Companyâs borrowings to achieve a reasonable, competitive, cost of funding. The Company uses cross-currency swaps to hedge the Interest rate of External Commercial Borrowings.

Note 50 Segment reporting

Ind AS 108 establishes standards for the way that business enterprises report information about operating segments and related disclosures about products and services and major customers. Based on the ''management approachâ as defined in Ind AS 108, the Chief Operating Decision Maker (CODM) evaluates the Companyâs performance and allocates the resources based on the analysis of various performance indicators by business segments. Information regarding the results of each reportable segment is included below. Performance is measured based on segment results, as included in the internal management reports that are reviewed by the Chief Operating Decision Maker (CODM). Segment results is used to measure performance as management believes that such information is most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm length''s basis. Segment results is segment revenue less segment expenses. Segment expense is the aggregate of the expense resulting from the operating activities of a segment that is directly attributable to the segment, including expenses that can be allocated on a reasonable basis. Operating profit is Earnings before Interest and tax excluding other income.

The Company''s business segments have been divided into three business verticals - Payment Solutions, Banking Automation Solutions and Other Automation Solutions.

(I) Formula used for calculation :

(a) Current Ratio = Current assets / (Current liabilities* - Current maturities of long term borrowings).

(b) Debt / Equity Ratio = (Non-current borrowings Current borrowings*) / Total equity.

(c) Debt Service Coverage Ratio (DSCR) = (EBITDA - Current taxes non-cash items cash and cash equivalents) / (Interest on financial liabilities Other borrowing costs Principal repayments of long-term borrowings Payment of lease liabilities).

(d) Return on Equity (RoE) = Net profit / (loss) after taxes / Average Equity.

(e) Inventory turnover ratio = Revenue from operations / Average Inventories.

(f) Trade receivables turnover ratio = Revenue from operations / Average Trade and unbilled receivables.

(g) Trade payables turnover ratio = Total expenses excluding Employee benefit expenses / Average Trade payables*.

(h) Net capital turnover ratio = Revenue from operations / Working capital where Working capital = Current Assets - (Current liabilities* - Current maturities of long term borrowings).

(i) Net profit ratio = Net profit / (loss) after taxes / Total income.

(j) Return on capital employed (ROCE) = (Earnings before interest, tax, depreciation and amortisation (EBITDA) - Depreciation and amortisation expense - Interest on lease liabilities) / Average Capital employed where Capital employed = (Total Equity - Intangible Assets - Intangible Assets under development Net Debt*) and Net Debt* = (Non-current borrowings Current borrowings - (Cash, cash equivalents and Other bank balances Margin money (non-current) Investment in Quoted Mutual Funds Amount held as margin money against borrowings)).

(k) Return on investment (ROI) = Income from current investments / Time weighted average investments.

(II) Reason for variances :

(l) Movement in Inventory turnover ratio during the year ended 31 March 2024 was primarily due to increase in Inventories.

(m) Company has reported loss during the year ended 31 March 2024 vis-a-vis profit during the year ended 31 March 2023 which has lead to the variance in Return on Equity (ROE), Net Profit ratio and Return on capital employed (ROCE).

(n) Decrease in working capital has primarily led to movement in Net Capital Turnover Ratio.

(o) There is no investment in quoted instruments during the year ended 31 March 2023.

* - Borrowings excludes reverse factoring which is included in current liabilities for the purpose of calculating above ratios.

Note 52

The Company has incurred loss after tax for the year ended 31 March 2024 of '' 669.85 million (profit after tax for the year ended 31 March 2023: '' 148.77 million). There is a decline in revenue during the period and delays in collections from customers resulting into delays in payments and increased working capital requirement. Management has assessed its business forecasts and cash forecasts and expects an increase in revenue, both from existing and new customers, new contracts in hand and from contracts in pipeline. The Company expects it will generate sufficient cashflows from operating activities including through reduction in receivables outstanding days and through other source of borrowings (including undrawn commitments on existing borrowing facilities) to meet its liabilities and provide additional support to its subsidiaries as required in the foreseeable future. The Company also expects to finance its acquisition of property, plant and equipment through internal accruals / debt financing as has been the case in past years. Based on the aforesaid assessment, management believes the Company will continue to operate as a going concern i.e., continue its operations and will be able to discharge its liabilities and realise the carrying amount of its assets.

Note 53

During the year, a Scheme of Arrangement (''the Scheme''), involving merger of India Transact Services Limited into the Company was approved by the Board of Directors of the respective companies at their meetings held on 19 March 2024. The first motion application was jointly filed by both the companies with the Honâble National Company Law Tribunal, Mumbai (''NCLT'') on 27 March 2024. The matter is pending before the Honâble NCLT. The appointed date as per the Scheme is opening hours of 1 April 2023. Pending approval of the said Scheme, no impact has been given in these standalone financial statements.

Note 54

There are no significant events subsequent to 31 March 2024 and upto 29 May 2024 that would require adjustment or disclosures in the standalone financial statements.

Note 55

Other matters

a. No proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

b. The Company has not been declared wilful defaulter (in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India) by any bank or financial Institution or other lender.

c. The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956.

d. The Company has not traded or invested in Crypto currency or Virtual Currency during the year.

e. The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

The Company has not received any funds from any persons or entities, including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall:

(i) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Funding Party or

(ii) provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

f. The Company does not have any transaction not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income tax Act, 1961 and there is no previously unrecorded income and related assets that are required to be recorded in the books of accounts during the year.

g. There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.

h. The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017

As per our report of even date attached.

For B S R & Co. LLP For and on behalf of the Board of Directors of

Chartered Accountants AGS Transact Technologies Limited

Firmâs Registration No: 101248W/W-100022 CIN : L72200MH2002PLC138213

Rajesh Mehra Ravi Goyal Vinayak Goyal

Partner Managing Director Executive Director

Membership No. 103145 DIN: 01374288 DIN: 09199173

Saurabh Lal Sneha Kadam

Chief Financial Officer Company Secretary

Membership No.: 504653 Membership No.: 31215

Place: Mumbai Place: Mumbai

Date : 29 May 2024 Date : 29 May 2024

Mar 31, 2023

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. Significant management judgment is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income in which the relevant entity operates and the period over which deferred income tax assets will be recovered.

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used.

Note: As the Company does not have any intention to dispose investments in unlisted subsidiaries and associates in the foreseeable future, deferred tax asset on indexation benefit in relation to such investments has not been recognised.

# During the year ended 31 March 2023, 10,155,000 Equity Shares held by Ravi B. Goyal were pledged as security in respect of his personal borrowing.

* As at 01 April 2021, 117,514,576 Equity Shares held by the Promoters, were pledged with Catalyst Trusteeship Limited as security in respect of secured redeemable non-convertible debentures issued by Vineha Enterprises Private Limited (Vineha NCDs). The Vineha NCDs were redeemed on 03 April 2021 and pledge on the Equity Shares of the Company held by the Promoters was released on 05 April 2021.

Terms / rights attached to equity shares

The Company has equity shares having a par value of ''10/- per share. Each holder of equity shares is entitled to one vote per share. The dividend, if proposed by the Board of Directors, will be subject to the approval of the shareholders in the ensuing Annual General Meeting except interim dividend.

The holders of equity shares will be entitled to receive remaining assets of the Company in the event of liquidation of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

Shares reserved for issue under options

For details of shares reserved for issue under the Employee Stock Option Scheme (ESOS) of the Company, refer note 37.

(i) Promoter means promoter as defined in Section 2 (69) of the Companies Act, 2013

(ii) Percentage change shall be computed with respect to the number at the beginning of the year (also refer note 53).

On 29 March 2022, the Company had issued 1,010,500 equity shares to AGS Transact Employees Welfare Trust under the approved ESOP schemes and the same were disclosed as treasury shares. The Company was required to obtain prior in-principle approval from Stock Exchanges, which was not complied with and the shares were allotted. The Company has made an application seeking condonation from SEBI in this regard and were granted the condonation on 22 November 2022. Thereafter, pursuant to receipt of in-principle approvals from the Stock Exchanges, these 1,010,500 equity shares were listed and admitted for trading on the Stock Exchanges with effect from 27 December 2022.

Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date: Nil

General reserve

The Company has transferred a portion of the net profit of the Company before declaring dividend to General reserve pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to General reserve is not required under the Companies Act, 2013. Further transfer has been made from Debenture redemption reserve to General reserve upon redemption of Non Convertible Debentures.

Debenture redemption reserve

Debenture redemption reserve is a statutory reserve (as per Companies Act, 2013) created out of profits of the Company available for payment of dividend for the purpose of redemption of Debentures issued by the Company. On completion of redemption, the reserve is transferred to General reserve.

Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, debenture redemption reserve, dividends or other distributions paid to shareholders.â

Dividend

Dividend of '' 120.39 Million (Re. 1 per equity share), including '' 1.81 Million on treasury shares, was recommended by the Board of Directors for FY 2020-21 and was approved by shareholders at the Annual General Meeting held on 21 September 2021. The same was subsequently paid on 21 October 2021. In respect of the dividend paid during the previous year by the Company, except for not transferring amount of dividend to separate bank account within the timeline specified in sub-section (4) of section 123 of the Act, the payment of dividend was in accordance with section 123 of the Companies Act, 2013.

The treasury shares of the Company includes the shares held by the AGS Transact Employee Welfare Trust (âââTrustââ, considered as a branch of the Company). As at 31 March 2023, the Trust held 911,880 shares (31 March 2022: 1,812,000) of the Company. The amount equivalent to the face value of the treasury shares has been reduced from share capital and the excess of cost over such face value has been reduced from securities premium.

Nature and purpose of reserves

Securities premium

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.

Employee stock options reserve

The Company has established various equity-settled share-based payment plans for certain categories of employees of the Company and its subsidiaries refer note 37 for further details on these plans.â

(i) Indian rupee term loan from banks carry an interest rate in the range of 9.30% p.a. to 11.75% p.a. The loans are repayable as per the balance amortisation schedule spread over from 47 months to 69 months. Loans are secured by charge on specific assets comprising of ATMs, specific receivables and other related equipments of assigned contract. Out of this, two of the loans are also secured by charge on specific assets comprising of land and building,

(ii) Loan in the form of External Commercial Borrowings (ECB) outside India carry an interest rate in the range of 1 month Term SOFR plus 300 bps to 360 bps. The loans are repayable as per the balance amortisation schedule spread over from 18 months to 51 months. Loans are secured by charge on specific assets comprising of ATMs and specific receivables.

(iii) There are no material breaches of the covenants associated with the borrowings (refer to above(i) to (iii)) and none of the borrowings were called back during the year.

(iv) The borrowings have been utilised for the purpose for which it was taken including towards lease obligations relating to Right-of-use assets and hence considered capital in nature.

(v) Refer note 22(a) for current maturities of long term borrowings.

(i) Includes interest accrued amounting to '' 0.90 Million (31 March 2022: '' 0.06 Million).

(ii) Working capital loans from Banks are secured by hypothecation of current assets and are repayable on demand. These loans carry an interest rate as mentioned below:

Working capital loans 9.50% p.a. to 10.60% p.a.

Cash credit and other facilities 9.50% p.a.

(iii) The working capital loans from others are secured by hypothecation of current assets and are repayable on demand. These loans carry an interest rate ranging from 10.10% p.a. to 11.50% p.a.

(iv) Working capital loans from others includes factored receivables which is secured by factored invoices and second charge on current assets (refer note 47 (B)).

(v) Includes interest accrued amounting to '' 24.85 Million (31 March 2022: '' 20.38 Million).

(vi) The Company has availed short term borrowings from banks or financial institutions on the basis of security of current assets. The Company is required to file periodic returns with banks, including those related to current assets. The returns are extracted from audited / unaudited financial information provided by the Company, summary of which are tabulated below:

EMPLOYEE BENEFITSA. Defined contribution plans

Contribution to Provident fund, Employee State Insurance and any other funds

Amount of '' 31.41 Million (31 March 2022: '' 36.16 Million) is recognised as an expense and included in âEmployee benefit expensesâ (refer note 32) in the Statement of Profit and Loss.

B. Defined benefit plans Gratuity

Estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Assumptions regarding future mortality are based on published Statistics & Mortality tables. The calculation of death benefit obligation is sensitive to the mortality assumptions.

The Company expects '' 34.48 Million contribution to be paid to its defined benefit plan in the next year.

The Company does not have a fund plan for gratuity liability.

The following table shows a reconciliation from the opening balances to the closing balances for the net defined benefit (asset) / liability and its components:

vi. Compensated absences

The liability towards compensated absences at 31 March 2023 based on actuarial valuation amounted to '' 47.01 Million (31 March 2022 : '' 51.33 Million).

Amount of '' 15.29 Million (31 March 2022 : '' (7.22) Million) is recognised as an expense / (released) and included in âEmployee benefit expensesâ in the Statement of Profit and Loss.

EMPLOYEE STOCK OPTION PLAN (ESOP)

On 29 February 2012, the Board of Directors approved the Equity-Settled Employee Stock Option Scheme (ESOS 2012) for issue of stock options to the key employees of the Company and others as approved by the Board of Directors comprising of 2,319,588 options convertible into one equity share each.

The Company has instituted the Equity-Settled Employee Stock Option Scheme (ESOS 2015) on 30 January 2015 pursuant to resolutions dated 30 January 2015 and 03 February 2015 passed by the Board and Shareholders, respectively comprising of 1,216,000 options convertible into one equity share each. The Company has not granted any options under the said scheme.

On 03 February 2015, the Board of Directors approved the Equity-Settled Employee Stock Option Scheme (ESOS 2015) for issue of stock options to the key employees of the Company and others as approved by the Board of Directors comprising of 1,216,000 options convertible into one equity share each.

On 04 August 2021, the Board of Directors increased the existing ESOP Pool by 2,200,000 options.

Effect of employee share based payment plans on the Standalone Statement of Profit and Loss and on its financial position.

The Company has granted options to the employees of its subsidiary companies and the related expense amounting to ''14.26 Million (31 March 2022 : ''25.54 Million) has been charged to the respective subsidiary companies (refer note 49).

LEASES

Company as a Lessee

Effective 01 April 2019, the Company adopted Ind AS 116 âLeasesâ and applied the standard to all lease contracts existing on 01 April 2019 using the modified retrospective method and has taken the cumulative adjustment to retained earnings on the date of initial application. Consequently, the Company recorded the lease liability at the present value of the lease payments discounted at the incremental borrowing rate and the right of use asset at its carrying amount as if the standard had been applied since the commencement date of the lease, but discounted at the Companyâs incremental borrowing rate at the date of initial application.

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

The weighted average incremental borrowing rate applied to lease liabilities for the year ended 31 March 2023 is 9.84% (31 March 2022: 9.57%).

The average tenure of leases covered under Ind AS 116 is ranging from 1 to 8 years.

The outflow on account of lease liabilities for the year ended 31 March 2023 is '' 1,284.17 Million (31 March 2022; '' 1,383.94 Million). SERVICE CONCESSION ARRANGEMENT

The Companyâs responsibilities include supply, installation and testing of AFCS equipment and support / maintenance of such equipment for a year of 6 years. The Company is entitled to receive a specified percentage of the value of ticket sales generated by the metro rail project for a period of 10 years.

The arrangement has been identified as a service concession arrangement in accordance with Appendix A to Ind AS 11 Construction Contracts where the Companyâs responsibilities include supply of the specified equipment and maintenance / support in relation to the same and the consideration linked to the ticket revenue generated by the related metro rail project.

During the year ended 31 March 2017, the Company was in the process of fulfilling its supply / installation/testing obligation and hence the cost incurred in relation to the project was capitalised as Intangible Assets under Development, net of in substance reimbursements received from co-bidders. In addition, amounts payable in relation to such projects have been reflected as Other financial liabilities.

During the year ended 31 March 2023, to the extent the installation and consequent deployment of equipment has been completed, related expenditure (net of in substance reimbursements received from co bidders) and corresponding revenue based on the percentage of installation and deployment is recognised in the Statement of Profit and Loss and the consequent Intangible Assets have been recognised in the Standalone Balance Sheet. The useful life is assessed based on the go live date.

Against the above pending tax and other litigation, the Company has paid '' 4.52 Million under protest (31 March 2022: ''4.16 Million).

The Companyâs pending litigations comprise of claims against the Company and pertaining to proceedings pending with Indirect tax authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for, where provisions are required and disclosed as contingent liabilities where applicable, in its standalone financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its standalone financial statements.

For the Assessment Year 2017-18, the Company has received demand of '' 66.43 Million of which '' 13.29 Million has been adjusted against the refund. The Company has filed an appeal for the same.

For the Assessment Year 2016-17, the Company has received demand of '' 71.66 Million. The Company has filed an application for rectification for the same and is in the process of filing application u/s 264 before CIT.

The Company has received a notice for the delayed payments of TDS for the financial year 2012-13 which has been closed during the previous year.

The Company has received a notice for the delayed payments of TDS for the financial year 2019-20 & 2021-22. Matter is pending before CIT-TDS.

There has been a Supreme Court (SC) judgement dated 28 February 2019, relating to components of salary structure that need to be taken into account while computing the contribution to provident fund under the EPF Act. There are interpretative aspects related to the Judgement including the effective date of application. In view of the management, the liability for the year from date of the SC order to 31 March 2019 is not significant and has been provided in the books of account. Company has incorporated the effect of changes in the books of accounts since 01 April 2019. The Company will continue to assess any further developments in this matter for the implications on financial statements, if any. Further, pending directions from the EPFO, the impact for the past year, if any, was not ascertainable and consequently no effect was given in the accounts.

The Code on Social Security, 2020 (code) relating to employee benefits received presidential assent in September 2020. The code has been published in the Gazette of India. However, the date on which the code will come into effect has not been notified. The Company will assess the impact of the code when it comes into effect and will record any related impact in the year the codes become effective.

The Company has received a show cause cum demand notice amounting to '' 548.33 Million, excluding interest and penalty thereon, with respect to transfer of GST on services provided by the Head office to its branches. The issue is presently contentious and the amount of present obligation cannot be measured with sufficient reliability.

The amount of the contingent liability is based on the best possible estimate which in turn is based on likelihood of possible outcomes of proceedings by the regulators.

CAPITALISATION OF EXPENDITURE(A) Disclosure under Ind AS 115, Revenue from Contracts with Customers

(i) Sale of product and manufactured goods

The Company applies practical expedient in paragraph 121 of Ind AS 115 for all contract entered for sales of products and manufactured goods and does not disclose information about remaining performance obligations that have original expected duration of one year or less.

(ii) Revenue from services

The Company applies practical expedient in paragraph 121 of Ind AS 115 for all contracts entered for revenue from services, whereby it has right to receive consideration from a customer in an amount that corresponds directly with the value to the customer of the entityâs performance completed to date. Hence, the Company does not disclose information of remaining performance obligation of such contracts.

(B) Disaggregation of revenue from contracts with customers

Revenue from contracts with customers is disaggregated by primary business segment. Disaggregated revenue with the Companyâs reportable segments is given in the note 50.

During the year ended 31 March 2014, the Company had entered into an agreement with a customer for providing ATM Management services for 10 years. As a part of the arrangement, the Company acquired existing ATM sites at total consideration of ''926.25 Million. Further, an interest free security deposit of '' 880.00 Million has been advanced towards such acquisition of the ATM network.

The property, plant and equipment acquired were capitalised at the respective fair value of ''649.64 Million and the difference of '' 276.61 Million between the fair value of property, plant and equipment acquired and the total consideration was recognised as Premium on purchase of assets under âOther assetsâ. In addition, the difference between the fair value and transaction price of the interest free security deposit referred to above has also been adjusted with premium on purchase of assets under âOther assetsâ. The aggregate premium on purchase of equipment is amortised over the life of the contract with an adjustment to revenue. The charge for the current year is '' 58.40 Million (31 March 2022: ''58.40 Million). The Company is depreciating the property, plant and equipment acquired over the remaining useful life.

INVESTMENT IN SUBSIDIARIES

As at 31 March 2023, the Company has investment amounting to ''2,904.01 Million (31 March 2022: ''2,661.93 Million) in its wholly owned subsidiaries namely âGlobal Transact Services Pte. Limitedâ, âIndia Transact Services Limitedâ and âSecurevalue India Limitedâ. The Company has also provided loans amounting to ''0.83 Million (31 March 2022: ''0.83 Million) to fund the operations of its subsidiaries and the loans are considered recoverable (refer note 49).

a. The fair value of cash and cash equivalents, other bank balances, current trade receivables, trade payables approximated their carrying value largely due to short term maturities of these instruments.

b. Measurement of fair values : The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique

- Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities

- Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly

- Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

B. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

â¢ Credit risk ;

â¢ Liquidity risk ; and

â¢ Market risk

i. Risk management framework

The Companyâs Board of Directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework.

ii. Credit risk

a. Trade receivables

Credit risk from trade receivables is managed through the Companyâs policies, procedures and controls relating to customer credit risk management by establishing credit limits, credit approvals and monitoring creditworthiness of the customers to which the Company extends credit in the normal course of business. Outstanding customer receivables are regularly monitored. Based on prior experience, the portfolio of customers and an assessment of the current economic environment, management believes there is no credit risk provision required. Also the Company does not have any significant concentration of credit risk.

The carrying amounts of the trade receivables include receivables which are subject to factoring arrangement aggregating to ''419.35 Million (31 March 2022: ''405.96 Million). The amount repayable under the factoring arrangement is presented in secured borrowings.

Loss allowance on trade receivables of '' 387.43 Million (31 March 2022: '' 118.76 Million) has been debited in Standalone Statement of Profit and Loss.

The amounts reflected in the table above are not impaired as at the Balance Sheet date. The allowance for expected credit loss is nil and there are no trade receivables which have significant increase in credit risk.

b. Cash, cash equivalents and other bank balances

The Company held cash and cash equivalents and other bank balances of ''601.66 Million (31 March 2022: ''478.57 Million) The cash and cash equivalents are held with bank and financial institution counterparties with good credit ratings.

c. Derivatives

The derivatives are entered into with banks with good credit ratings.

iii. Liquidity risk

The Company aims to maintain the level of its cash and bank balances at an amount in excess of expected cash outflows on financial liabilities (other than trade payables) over the next six months. The Company also monitors the level of expected cash inflows on trade receivables and loans together with expected cash outflows on trade payables and other financial liabilities.

(i) The interest payments on variable interest rate loans in the table above reflect market forward interest rates at the reporting date and these amounts may change as market interest rates change.

(iii) The carrying amounts of the reverse factoring include payables which are subject to reverse factoring arrangement aggregating to ''651.78 Million (31 March 2022: ''Nil). The amount repayable under the reverse factoring arrangement is presented in current borrowings.

iv. Market risk

a. Currency risk

The summary quantitative data about the Companyâs exposure to currency risk is as follows (the amounts below have been presented in their respective foreign currencies):

b. Interest rate risk

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against USD, EUR, SGD and JPY at the reporting date would have affected the measurement of financial instruments denominated in foreign currencies and affected Statement of Profit and Loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

Fair value sensitivity analysis for fixed-rate instruments

The entity does not account for any fixed-rate financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect the Statement of Profit and Loss.

Cash flow sensitivity analysis for variable rate instruments

A reasonably possible change of 100 basis points in interest rate would have resulted in variation in the interest expense for the entity by the amounts indicated in the table below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant. This calculation also assumes that the change occurs at the reporting date and has been calculated based on risk exposures outstanding as at that date. The year end balances are not necessarily representative of the average debt outstanding during the year.

CAPITAL MANAGEMENT

The Companyâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The primary objective of the Companyâs Capital Management is to maximise shareholders value.

The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position.

The Company monitors capital using a ratio of âadjusted net debtâ to âtotal equityâ. For this purpose, adjusted net debt is defined by the management as gross debt comprising of interest-bearing borrowings and lease liabilities, less cash, cash equivalents, other bank balances and non-current margin money. Total equity comprises all components of equity.

SEGMENT REPORTING

Information regarding the results of each reportable segment is included below. Performance is measured based on segment results, as included in the internal management reports that are reviewed by the Chief Operating Decision Maker (CODM). Segment results is used to measure performance as management believes that such information is most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm lengthâs basis.

Segment results is segment revenue less segment expenses. Segment expense is the aggregate of the expense resulting from the operating activities of a segment that is directly attributable to the segment, including expenses that can be allocated on a reasonable basis.

Operating profit is Earnings before Interest and tax excluding other income.

The Companyâs business segments have been divided into three business verticals - Payment Solutions, Banking Automation Solutions and Other Automation Solutions.

Payment Solutions - Comprises of ATM / cash recyclers outsourcing and managed services, intelligent cash deposit machines (iCDs), transaction switching and Fastlane and toll & transit solutions.

Banking Automation Solutions - Comprises of sale of ATM machines and cash recyclers, currency technology products and self service terminals and services and upgrades related to such sales.

Other Automation Solutions - Comprises of sale of machines and related services and upgrades to customers in the Retail, Petroleum and Colour sectors.

(I) Formula used for calculation :

(a) Current Ratio = Current assets / (Current liabilities* - Current maturities of long term borrowings)

(b) Debt / Equity Ratio = (Non-current borrowings Current borrowings*) / Total equity

(d) Return on Equity (RoE) = Net profit / (loss) after taxes / Average Equity

(e) Inventory turnover ratio = Revenue from operations / Average Inventories

(f) Trade receivables turnover ratio = Revenue from operations / Average Trade and unbilled receivables

(g) Trade payables turnover ratio = Total expenses excluding Employee benefit expenses / Average Trade payables*

(h) Net capital turnover ratio = Revenue from operations / Working capital where Working capital = Current Assets - (Current liabilities* - Current maturities of long term borrowings)

(i) Net profit ratio = Net profit / (loss) after taxes / Total income

(k) Return on investment (ROI) = Income from current investments / Time weighted average investments (II) Reason for variances :

(l) Reduction in current liabilities primalrily led to improvement in Current Ratio

(m) Movement in Debt Service Coverage Ratio during the year ended 31 March 2023 was primarily due to repayment of longterm borrowings

(n) Company has reported profit during the year ended 31 March 2023 vis-a-vis loss during the year ended 31 March 2022 which has lead to the variance in Return on Equity (ROE) and Net Profit ratio

(o) Increase in working capital has primarily led to movement in Net Capital Turnover Ratio

(p) There is no investment in quoted instruments during the year ended 31 March 2023

* - Borrowings excludes reverse factoring which is included in current liabilities for the purpose of calculating above ratios.

The Company has earned profit after tax for the year ended 31 March 2023 of '' 148.77 Million. While revenue related to Payment solutions business has largely been consistent during the year, increased receivable days lead to increased working capital cycle and borrowings. Management has assessed its business forecasts and cash forecasts and expects an increase in transaction levels from existing customers and contracts with new customers based on existing pipeline. The Company expects it will generate sufficient cashflows from operating activities through reduction in receivables outstanding days and through other source of borrowings (including undrawn commitments on existing borrowing facilities) to meet its liabilities and provide additional support to its subsidiaries as required in the foreseeable future. The Company also expects to finance its acquisition of property, plant and equipment through internal accruals / debt financing as has been the case in past years. Based on the aforesaid assessment, management believes the Company will continue to operate as a going concern i.e., continue its operations and will be able to discharge its liabilities and realise the carrying amount of its assets.

The Company had issued listed NCDs during the year ended 31 March 2021 and the proceeds thereof were utilised towards purchase of Compulsorily Convertible Preference Shares (ââCCPSââ) of Vineha Enterprises Private Limited. On 31 January 2022, the Company completed its Initial Public offer (âIPOâ), comprising of an offer for sale of 38,857,141 equity shares of face value of ''10 each at an issue price of '' 175 per share by the Selling Shareholders. As per the objects of the issue defined in RHP and the terms of the Share Purchase Agreement, the offer proceeds received by Mr Ravi B. Goyal for the sale of his portion of the offered shares were utilised for the purchase of Compulsorily Convertible Preference Shares (ââCCPSââ) of Vineha Enterprises Private Limited held by the Company for a consideration of '' 6,500 Million on 28 January 2022, upon receipt of the listing and trading approvals from the Stock exchange. Such amount received by the Company was utilised to redeem the listed NCDs on 29 January 2022. Also, consequent to the redemption of the NCDs, these had been de-listed from the NSE. Pursuant to the IPO, the equity shares of the Company were listed on NSE and BSE on 31 January 2022.

There are no significant events subsequent to 31 March 2023 and upto 26 May 2023 that would require adjustment or disclosures in the standalone financial statements.

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

Other matters

a. No proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

c. The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956.

d. The Company has not traded or invested in Crypto currency or Virtual Currency during the year.

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(i) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Funding Party or

(ii) provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries, other than those disclosed in notes to the Standalone Financial Statements.

g. There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.

h. The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017

Mar 31, 2011

1. Employee Benefits :

1 Short term employee benefits:

The liability towards short term employee benefits for the year ended 31st March, 2011 has been recognised in the Profit and Loss Account.

2 Post -employment benefits:

The following disclosures are made in accordance with AS 15 (Revised) pertaining to defined Benefits Plans:

3.The Liability towards compensated absences (Leave Encashment) as on 31/3/2011 based on actuarial valuation, carried out using the projected accrual benefit method is Rs.1,26,36,991/- (P. Y Rs.78,85,410/-). The resulted increase in liability of Rs.58,11,878/- (P.Y.Rs31,61,815/-) including actual payment of Rs.10,60,297/-(P.Y Nil) has been recognized in the Profit & Loss A/c.

2 Pursuant to Business Purchase Agreement dated 16th September 2010, rights, benefits and interest in maintenance business as per Business Purchase Agreement has transferred from Advance Graphic System (AGS) to the Company for purchase consideration of Rs. 50,000/-. Accordingly all the employee of AGS along with their Loans & Advances and liability towards gratuity & leave encashment for past service, as per actuarial valuation are transferred to the Company.

3. Pursuant to Accounting Standard (AS 19) Leases, the following information is given:

(a) The Company has provided A.T.M to its customers on an operating lease basis. The lease period is for three years & Lease rentals are payable monthly by the dealers.

(b) Future minimum lease rentals receivable as at 31st March,2011 as per the lease agreements:

The information pertaining to future minimum lease rentals receivable is based on the lease agreements entered into between the Company and the dealers and variation made thereto. Lease rentals are reviewed periodically taking into account prevailing market conditions.

(c) Total amount of contingent rents recognized as income - Nil.

(d) The initial direct cost relating to acquisition of ATM is capitalized.

(e) The information on gross amount of leased assets, depreciation and impairment is given in Schedule D to the Balance Sheet.

4. The Company has recognized deferred tax arising on account of timing differences, being the difference between the taxable income and accounting income, that originates in one period and is capable of reversal in one or more subsequent period(s) in compliance with Accounting Standard (AS 22) Accounting for Taxes on Income.

5. Disclosure under the Micro, Small and Medium Enterprises Development Act, 2006 are provided as under for the year 2010-11, to the extent the Company has received intimation from the Suppliers regarding their status under the Act.

Interest paid by the Company in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, along-with the amount of the payment made to the supplier beyond the appointed day during the period.

6. Managerial remuneration

Computation of Profit for the year ended 31st March, 2011 under Section 349 of the company Act, 1956.

(i) The above remuneration does not include contribution to gratuity fund and leave encashment/entitlement as this contribution is a lump sum amount based on actuarial valuation.

(ii) The Company depreciates certain fixed assets at higher rates of depreciation based on estimated useful lives which are lower or equal to the implicit estimated useful lives prescribed by Schedule XIV of the Companies Act, 1956. The above higher value of depreciation has been considered as deduction for the computation of managerial remuneration in (a) above.

(iii) No managerial Remuneration paid in financial year 2009-10 and hence previous year figures are not applicable.

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