Armour Security India Ltd Management Discussions

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our restated financial statements including the schedules, notes and significant accounting policies thereto for the Financial Years ended March 31, 2025, March 31, 2024, and March 31, 2023. The restated financial statements have been derived from audited financial statements and restated in accordance with SEBI (ICDR) Regulations and Guidance Notes issued by ICAI in this respect, as described in the Examination Report of auditors dated August 28, 2025, which is included under the chapter titled "Financial Information" beginning on page 211 of this Draft Prospectus.

This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those set forth in "Forward-Looking Statements" and "Risk Factors" beginning on pages 28 and 38 respectively, of this Draft Red Herring Prospectus.

COMPANY OVERVIEW

Our Company was incorporated as "Armour Security (India) Pvt. Ltd." on August 27, 1999, vide certification of incorporation bearing No. 101313 under the provision of Companies Act, 1956 issued by the Registrar of Companies, NCT of Delhi and Haryana. Further, our Company was converted into a public limited company, pursuant to a special resolution passed in the Extraordinary General Meeting of our Shareholders held on February 09, 2024, and the name of our Company was changed to ‘Armour Security (India). Ltd., and a fresh certificate of incorporation dated May 03, 2024 was issued to our Company by the RoC, CPC. Our Corporate Identification Number is U74920DL1999PLC101313.

Our company was founded under the leadership of Mr. Vinod Gupta, with the vision of providing cost-effective and comprehensive security solutions to both corporate and government organizations. In FY 2007-2008, Mrs. Arnima Gupta joined as a Promoter, further strengthening the leadership team. Our registered office is located at B-87, 2nd Floor, Defence Colony, New Delhi-110024, and we operate branch offices across Haryana, Himachal Pradesh, Uttar Pradesh, Punjab, and Maharashtra.

From a single office in Defence Colony, Delhi, we have expanded over the past two decades to establish a strong PAN-India presence, consistently delivering high-quality services. Our branch network across various states enables us to effectively navigate the evolving dynamics of the security industry. By carefully building our client base, we have gained substantial experience, developed specialized methodologies, and enhanced our operational capabilities, ensuring reliable delivery of manpower security and integrated facility solutions.

Mr. Vinod Gupta, Promoter of the Company, brings with him more than two decades of experience in security planning and management. With deep expertise in the domain, he continues to play a pivotal role in guiding the companys strategic direction, shaping its long-term vision, and driving sustainable growth.

Mrs. Arnima Gupta, Promoter and Managing Director, contributes over 15 years of experience in the security planning and management industry. She is responsible for the overall management of the company, which includes setting strategic goals, spearheading business development, overseeing financial decisions, and ensuring effective risk identification and mitigation.

We deliver comprehensive private security solutions, ranging from individual security personnel to full security teams, tailored to meet the needs of diverse sectors including corporate, industrial, banking, healthcare, government institutions, and educational establishments. Each solution is customized to address the specific security requirements of our clients. To meet the growing demands nationwide, we combine a trained workforce with modern equipment to ensure reliable, efficient, and professional services. In addition, we provide integrated facility management, housekeeping, and manpower services, offering skilled, semi-skilled, and unskilled personnel as per client requirements.

We focus on ensuring that the ideal candidate is placed in each position

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST AUDITED PERIOD

The Directors of our Company confirm that since the date of the last audited period i.e., March 31, 2025, as disclosed in this Draft Red Herring Prospectus, there are no circumstances that materially or adversely affect or are likely to affect the trading or profitability of our Company, the value of its assets or its ability to pay its material liabilities, within the next twelve months.

FACTORS AFFECTING THE RESULTS OF OUR OPERATIONS

Our business is subject to various risks and uncertainties.

The results of operations and financial condition are affected by a number of important factors including:

Inability to balance the demand and supply of skilled labor.

Failure to adapt to changing economic conditions affecting hiring trends.

Non-compliance with evolving labor laws and regulations.

Weakness in maintaining strong client relationships.

Inadequate quality and performance of the workforce.

Lagging behind in adopting new technologies.

Inability to stay competitive in the market.

Inefficiency in internal processes.

Failure to keep up with market trends.

Poor financial management practices.

Over-reliance on manpower without leveraging digital automation.

Underutilization of AI and machine learning in operations.

Lack of integration of remote monitoring and surveillance.

Inability to meet client-specific security requirements.

Inadequate training and certification of employees.

Absence of effective crisis management plans.

Non-compliance with health and safety regulations.

Failure to differentiate services in a competitive market.

Delayed integration of new technologies for service delivery.

Vulnerability to economic and political instability in operational regions.

Lack of preparedness for environmental disruptions.

Refer section titled "Risk Factors" beginning on page no 38 of this Draft Red Hearing Prospectus.

SIGNIFICANT ACCOUNTING POLICIES

For significant accounting policies, please refer "Significant Accounting Policies to the Restated Financial Statements", under Section titled "Financial Information" beginning on page 211 of the Draft Red Herring Prospectus.

KEY PERFORMANCE INDICATORS OF OUR COMPANY

A list of our KPIs for Financial Years ended March 31, 2025, 2024 and2023.

(in , unless stated otherwise)

Key Financial Performance	Financial Year ended March 31, 2025	Financial Year ended March 31, 2024	Financial Year ended March 31, 2023
Revenue from Operations (1)	3,565.54	3,293.29	2,884.64
EBITDA (2)	496.86	367.29	311.81
EBITDA Margin (%) (3)	13.94%	11.15%	10.81%
PAT	397.35	261.76	225.66
PAT Margin (%) (4)	11.14%	7.95%	7.82%
Profit after tax growth (%)	51.80%	16.00%	674.74%
Trade Receivables days (5)	81	94	99
Trade Payable days (6)	6	34	61
Return on equity (%) (7)	21.56%	18.10%	64.65%
Return on capital employed (%) (8)	24.47%	22.26%	70.20%
Debt-Equity Ratio (times) (9)	0.25	0.12	0.24
Net fixed asset turnover ratio (times) (10)	4.76	8.18	36.53
Current Ratio (times) (11)	1.53	1.34	0.99
Net Asset Value per equity share (in Rs.) (12)	15.08	11.83	6.43

Notes:

(1) Revenue from operation means revenue from sale of the products

(2) EBITDA is calculated as Profit before tax + Depreciation + Finance Costs Other Income

(3) EBITDA Margin is calculated as EBITDA divided by Revenue from Operations

(4) PAT Margin is calculated as PAT for the period/year divided by revenue from operations

(5) Trade receivable days is calculated as average trade receivables divided by revenue from operations multiplied by 365 for fiscal years

(6) Trade payable days is calculated as average trade payables divided by employee benefit expenses multiplied by 365 for fiscal years. Employee benefit expenses have been defined as salary expenses of employee other benefits provided to employees

(7) Return on Equity is calculated by comparing the proportion of net income against the amount of shareholder equity

(8) Return on Capital Employed is calculated as follows: Profit for the period/ year plus finance cost plus tax expenses (EBIT) divided by Capital employed (Equity share capital plus reserves plus long term and short term borrowings).

(9) Debt to Equity ratio is calculated as Total Debt (short term and long term) divided by equity

(10) Net fixed asset turnover ratio is calculated by dividing net sales by the average fixed assets (property plant and equipment)

(11) Current Ratio is calculated by dividing Current assets to Current Liabilities

(12) Net Asset Value per share (in ) = Restated net worth at the end of the year (or) period / Number of Equity Shares outstanding at the end of period

Explanations for the certain financial data based on Restated Financial Statements

Key Performance	Financial Explanations
Revenue from Operations	Revenue from Operations is used by the management to track the revenue profile of the business and in turn helps to assess the overall financial performance of the Company and volume of the business.
EBITDA	EBITDA provides information regarding the operational efficiency of the business
EBITDA Margin	EBITDA Margin (%) is an indicator of the operational profitability and financial performance of the business
PAT	Profit after tax provides information regarding the overall profitability of the business
PAT Margin	PAT Margin (%) is an indicator of the overall profitability and financial performance of the business
Profit after tax growth	Profit after tax growth provides information regarding the growth of the operational performance for the respective period
Trade Receivables days	Trade Receivables days is the average number of days required for a company to receive payments from its customers
Trade Payable days	Since the Company is into manpower supply services, the major expenses incurred by the Company is employee related. Therefore, in the present case, Trade Payable days are customised and calculated as the average number of days required for a company to pay its employees.
Return on Equity	Return on equity provides how efficiently the Company generates profits from shareholders funds
Return on Capital Employed	Return on capital employed provides how efficiently the Company generates earnings from the capital employed in the business
Debt-Equity Ratio	Debt / Equity Ratio is used to measure the financial leverage of the Company and provides comparison benchmark against peers
Working Capital Cycle	Working Capital Cycle is the time it takes to convert net current assets and current liabilities into cash
Net fixed asset turnover ratio	Net fixed asset turnover ratio is indicator of the efficiency with which the company is able to leverage its assets to generate revenue from operations
Current Ratio	The current ratio is a liquidity ratio that measures the companys ability to pay short-term obligations or those due within one year
Net Asset Value per share (in )	NAV represents the per share book value of the company.

Operational KPI

Particulars	FY 2025	FY 2024	FY 2023
Average revenue Per employee (in lakh)	2.94	3.46	3.21
Average employee expenses per employee (in lakh)	2.28	2.79	2.71
Average gross Margin Per Employee (in lakh)	0.66	0.68	0.50
No of Customers Served	92	96	78
Average Revenue Per Customer (Rs. In lakh)	38.76	34.31	36.98
Average Expenses Per Customer (Rs. In lakh)	30.06	27.60	31.26
Average gross Margin Per Customer (Rs. In lakh)	8.69	6.71	5.72

Notes:

a) Revenue per Employee is revenue from operations/average no of employee directly attributable to generating revenue during the year

b) Expenses per employee is Total Employee expenses divided by average no of employee directly attributable to generating revenue during the year

c) Margin per employee equal to Revenue per employee-Expenses per employee d) Revenue per customer equal to Revenue from operations/no of customer served during the year

e) Expenses per customer equal to Total Employee expenses/no of customer served during the year

f) Gross margin per Customer equal to Revenue per Customer minus Expenses per Customer (For the above details relating to KPI, we have relied upon the certificate dated Sepetmber 10, 2025 vide 25099065BMNVAC1931 issued by the Statutory Auditors of our Company i.e.M/s PDMS AND CO., Chartered Accountants).

For further details regarding Key performance indicators, kindly refer the head tilted "Key Performance Indicators" under the chapter titled "Basis for Issue Price" on page 126 of this Draft Red Herring Prospectus.

DISCUSSION ON RESULTS OF OPERATIONS

The following table sets forth financial data from restated profit and loss accounts for Year Ended March 31, 2025 and financial year ended on March 31, 2024 and March 31, 2023. The components of which are also expressed as a percentage of total income for such periods.

(Amount in Lakhs)

Particulars	FY24- 25	% of Total Income	FY23- 24	% of Total Income	FY22- 23	% of Total Income
Revenue from operations	3,565.54	97.52%	3,293.29	99.49%	2,884.64	99.57%
Other Income	90.50	2.48%	16.81	0.51%	12.44	0.43%
Total Income (I+II)	3,656.04	100.00%	3,310.10	100.00%	2,897.08	100.00%
Expenses:
Cost of Material Consumed	-	-	-	-	-	-
Employee benefit expenses	2,765.86	75.65%	2,649.57	80.05%	2,438.62	84.18%
Finance costs	34.70	0.95%	12.08	0.36%	3.45	0.12%
Depreciation & amortisation	21.71	0.59%	22.22	0.67%	19.25	0.66%
Other expenses	302.82	8.28%	276.43	8.35%	134.21	4.63%
Total expenses	3125.09	85.48%	2,960.30	89.43%	2,595.52	89.59%
Profit before tax (PBT)	530.95	14.52%	349.80	10.57%	301.56	10.41%
Tax Expenses:
(a) Current tax	134.19	3.67%	89.68	2.71%	76.78	2.65%
(b) Deferred tax (credit)/charge	(0.59)	-0.02%	(1.64)	-0.05%	(0.88)	-0.03%
Profit After Tax (PAT)	397.35	10.87%	261.76	7.91%	225.66	7.79%

KEY COMPONENTS OF OUR STATEMENT OF PROFIT AND LOSS BASED ON OUR RESTATED FINANCIAL STATEMENTS INCOME

Our Total Income comprises of Revenue from operations and Other Income.

REVENUE FROM OPERATIONS

Revenue from operations consists of income derived from Manpower Services and Integrated Facility Management Services

Manpower Supply Services include the provision of Private Security Services, where trained security personnel, including guards, are provided to ensure safety and security across various sectors. Additionally, Other manpower Services encompass the supply of skilled, semi-skilled, or unskilled blue-collar manpower, catering to a variety of tasks, from administrative roles to operational support, based on client needs and Recruitment Services, Offering staffing solutions for specific client needs, including recruitment and HR management.

Integrated Facility Management Services include a wide range of services such as Housekeeping Services, professional cleaning, and maintenance for client facilities. Other services under this category encompass Event Management Services, where we organize and manage corporate events, seminars, and large-scale gatherings; Firefighting Services, which involve the installation, maintenance, and management of fire safety systems and Security Training programs designed to enhance the skills of security personnel; Supervision Services, which involve managing daily operations and ensuring compliance with safety standards.

Following is the revenue bifurcation with respect to the services Issued by our Company:

Service Category	FY 2022-23	%	FY 2023-24	%	FY 2024-25	%
Security Manpower Personal Services	1,274.64	44%	1550.79	47%	1677.79	47%
Other Manpower and Supervision Services	517.19	18%	818.97	25%	1142.81	32%
Housekeeping Services	1,092.82	38%	923.53	28%	744.94	21%
Total	2,884.64	100%	3293.29	100%	3565.54	100%

For the above details relating to revenue bifurcated into nature of services, we have relied upon the certificate dated September 10, 2025 vide UDIN: 25099065BMNVAR8801issued by the Statutory Auditors of our Company i.e.M/s PDMS AND CO., Chartered Accountants) )

Following is the revenue bifurcation with respect to the contribution of our top customers towards our revenue from operations:

Category of Customers	FY 2024-25		FY 2023-24		FY 2022-23
	Amount	% of Total Sales	Amount	% of Total Sales	Amount	% of Total Sales
Top 5 Customers	2276.77	63.85%	1952.29	59.28%	1847.96	64.06%
Top 10 Customers	2726.99	76.48%	2451.77	74.45%	2217.85	76.88%

(For the above details relating to top 5/10 customers, we have relied upon the certificate dated September 10, 2025 vide UDIN: 25099065BMNVAE6102 issued by the Statutory Auditors of our Company i.e.M/s PDMS AND CO., Chartered Accountants)

For detailed information regarding the product Offerings and revenue bifurcation by geography, please refer to the "Our Business" chapter on page 160of this draft red herring prospectus.

Other Income

Other income comprises interest income received from bank deposits, including fixed deposits maintained for issuing bank guarantees required for the procurement of tenders from government organizations and institutions. Additionally, it includes other non-operating income. Other income constitutes a very negligible portion of the total revenue from operations.

EXPENSES

Our total expenditure primarily consists of Employee Benefit Expenses, Finance Costs, Depreciation and Amortization Expenses, and Other Expenses. The Total Expenses constitute 85.48%, 89.43% and 89.59% of total income for the years ended March 2025, 2024 and 2023 respectively. Further details of each financial statement line item of total expenses are explained below:

Employee Benefit Expenses

Based on the companys operations, line of services, and business model, employee expenses represent a primary and significant portion of the overall expenses. The company actively staffs employees based on current contracts with customers as well as expected tenders or projects that are anticipated to be procured. Therefore, employee expenses are directly linked to the companys revenue from operations.

Employee benefit expenses include both variable expenses (directly linked to revenue from operations) and fixed expenses, such as annual costs. These expenses encompass salaries, wages, and bonuses, directors remuneration, gratuity, provident fund and other employee funds, as well as staff welfare expenses. Based on the restated financials, employee benefit expenses accounted for approximately 75.65%, 80.05%, 84.18%, of total income for the years ended March 2025, 2024, and 2023, respectively.

Finance Costs

Finance costs primarily include charges incurred from banking services, other financial charges associated with taking loans or credit facilities, and the interest paid on loans. These costs are a direct result of the companys financing activities and play a crucial role in supporting its operations and driving business growth. Based on the restated financials, finance costs are negligible as a percentage of total income, accounting for approximately 0.95%, 0.36% and 0.12% of total income for March 2025, and for the years ended March 2024 and 2023, respectively.

Depreciation and Amortization Expenses

Depreciation and amortization include depreciation on tangible assets, specifically Property, Plant, and Equipment. These depreciable assets encompass equipment used by the company to provide services to customers, such as metal detectors and other tools necessary for service delivery. Additionally, depreciable assets also include cars, office furniture, and fixtures used for office operations. Based on the restated financials, depreciation and amortization expenses are negligible as a percentage of total income, accounting for approximately 0.59%, 0.67% and 0.66% of total income for the years ended March 2025, 2024, and 2023 respectively.

Other Expenses

In line with the companys operations and business model, the company incurs tender fees to participate in bids and tenders for government institutions and organizations. Additionally, the company also incurs costs for consumable items used by office staff. Other expenses include office rent, paid for offices located in different states, as well as professional fees, electricity charges, interest on delayed GST compliances and various other operational expenses. Based on the restated financials, other expenses, as a percentage of total income, accounted for approximately 8.28%, 8.35% and 4.63%, of total income for the years ended March 2025, 2024, and 2023 respectively.

Tax Expenses

Tax expenses include both current tax and deferred tax. The provision for current taxation is computed in accordance with the relevant tax regulations. Deferred tax is recognized on timing differences between accounting income and taxable income for the year, and it is quantified using the tax rates and laws enacted or subsequently enacted as of the balance sheet date. Deferred tax assets are recognized in the companys books due to timing differences, such as those arising from depreciation, provisions for gratuity under the Income Tax Act, and other differences between amounts recognized in the books and actual amounts reported for tax purposes. Based on the restated financials, tax expenses as a percentage of total income accounted for approximately 3.65%, 2.66% and 2.62% for the years ended March 2025, 2024, and 2023 respectively. Furthermore, the effective tax rate as per the books has been approximately 25% to 26% during past 3 years.

COMPARISON OF FINANCIAL YEAR ENDED MARCH 31, 2025 WITH FINANCIAL YEAR ENDED MARCH 31, 2024

Particulars	Comments
Total Income	Our Total Income increased by 10.45% to 3,656.04 Lakhs for Fiscal 2025 from 3,310.10 Lakhs for Fiscal 2024. Total increase in total Income by Rs. 345.94 primary consists of increase in Rs. 272.25 crore of revenue from operations and Rs. 73.69 lakh from other income
Revenue from Operations	Our revenue from operations increased by 8.27%, reaching 3,565.54 Lakhs in Fiscal Year 2025, compared to 3,293.29 Lakhs in Fiscal Year 2024. This increase of 272.25 lakhs can primarily be attributed to growth in line with overall industry and market trends, coupled with the successful retention and continued engagement of existing clients. In addition, the Company has benefited from improved execution efficiency, timely delivery of projects, and expansion in the scope of services offered under ongoing contracts. The increase also reflects higher demand for our offerings in line with government-led initiatives and sectoral momentum, as well as the Companys continued focus on strengthening client relationships and enhancing service quality.
Other Income	Other income rose 438.37% to 90.50 Lakhs in FY 2025 (vs. 16.81 Lakhs in FY 2024), mainly due to the write-off of certain creditor balances which, based on managements assessment and declarations, were no longer payable and accordingly written off in the books... This was partly offset by lower interest income, as security and fixed deposits declined following a shift toward utilizing a maximum bank guarantee facilities provided by bank which require deposit ofmargin money instead of whole bank guarantee amount.
Employee Benefit Expenses	Employee benefits expense increased marginally by 4.39%, rising to 2,765.86 Lakhs for Fiscal Year 2025 compared to 2,649.57 Lakhs in Fiscal Year 2024. This increase of 116.29 Lakhs was broadly in line with the growth in revenue from operations, consistent with our business model. Importantly, the percentage increase in employee benefit expenses was lower than the percentage increase in revenue, reflecting the Companys ability to effectively manage its workforce and derive benefits from economies of scale and operational synergies. Since we operate in the manpower services sector, our workforce comprises skilled, semi-skilled, and unskilled employees. Through efficient workforce allocation, multipurpose deployment of employees across projects, and improved productivity measures, the Company has been able to contain employee cost escalation while supporting higher revenue growth. This demonstrates our focus on optimising human resources, enhancing efficiency, and leveraging synergies across assignments, resulting in a lower proportional increase in employee benefit expenses compared to revenue.
Finance Costs	Our finance costs increased by 187.25%, rising from 12.08 Lakhs in Fiscal 2024 to 34.70 Lakhs in Fiscal 2025. The increase of 22.62 Lakhs was primarily due to higher working capital loans availed to support the growing scale of operations.
Depreciation & Amortization	Depreciation and amortization expenses decreased slightly by 2.29%, falling from 22.22 Lakhs in Fiscal 2024 to 21.71 Lakhs in Fiscal 2025. The decrease of 0.51 Lakhs is attributable to lower incremental additions of depreciable assets compared to the previous year.
Other Expenses	Other expenses increased by 9.55%, from 276.43 Lakhs in Fiscal 2024 to 302.82 Lakhs in Fiscal 2025. The increase of 26.39 Lakhs was is primarily in line with the growth in revenue from operations and is further influenced by the number of tenders applied for, which are closely associated with revenue growth from the award of new tenders and projects..
Profit Before Tax	Profit before tax increased by 51.79%, rising from 349.80 Lakhs in Fiscal 2024 to 530.95 Lakhs in Fiscal 2025. The increase of 181.15 Lakhs is primarily driven by a lower percentage increase in employee benefit expenses compared to the percentage increase in revenue from operations, reflecting the benefits of effective workforce management and operating efficiencies. This improvement was partly offset by higher finance costs, attributable to loans availed during the year for funding project requirements. The PBT margin improved to 14.52% in FY 2025 from 10.57% in FY 2024, showing stronger profitability
Tax Expense	Tax expense increased from 88.04 Lakhs in Fiscal 2024 to 133.60 Lakhs in Fiscal 2025, an increase of 45.56 Lakhs, in line with the higher profit before tax. The effective tax rate remained consistent at around 25.17%.
Profit After Tax (PAT) and PAT Margin	Profit after tax (PAT) increased by 135.58 lakhs in FY 2025, primarily attributable to the increase in profit before tax, which directly translated into higher profit for the year. The PAT margin improved from 8% in FY 2024 to 11% in FY 2025. This improvement is largely due to revenue from operations increasing by 8.27%, while employee benefit expenses (direct costs) increased at a lower rate of 4.39%. This favourable variance contributed to an expansion in profit before tax margin by 3.88% (8.27% 4.39%). After applying the effective tax rate of 25.17%, the net PAT margin reflected an overall increase of nearly 3% (2.88% ? 1.2517). Accordingly, the lower proportional increase in employee benefit expenses relative to revenue growth was the key driver of improved profitability, as explained in detail in the section on employee benefit expenses. During FY 2025, the Company achieved an overall increase in gross profit (revenue from operations less employee benefit expenses) of about 155 lakh. This improvement was primarily driven by an increase in gross margin per customer of 1.99 lakh, rising from 6.71 lakh in FY 2024 to 8.69 lakh in FY 2025. This enhancement contributed to an overall increase in gross margin of approximately 182.78 lakh. The improvement in margin per customer significantly strengthened profitability. However, this positive impact was partially offset by a reduction in the average number of customers served, which declined from 96 in FY 2024 to 92 in FY 2025, resulting in a decrease in gross margin of about 26.82 lakh. Despite this marginal decline in customer base, the improvement in gross margin per customer remained the key contributor to the overall growth in profitability. The increase in gross margin also translated into higher profit after tax for the year. Refer operational KPI section for details.

COMPARISON OF FINANCIAL YEAR ENDED MARCH 31, 2024 WITH FINANCIAL YEAR ENDED MARCH 31, 2023

Particulars	Comments
Total Income	Our Total Income increased by 14.26% to 3,310.10 Lakhs for Fiscal 2024 from 2897.08 Lakhs for Fiscal 2023.
	Our revenue from operations increased by 14.17%, reaching 3,293.29 Lakhs in Fiscal Year 2024, compared to 2,884.64 Lakhs in Fiscal Year 2023. This increase of 408.65 Lakhs can primarily be attributed to the successful procurement of new tenders. The company has leveraged its brand value and established reputation, this growing recognition has been a significant factor in securing new contracts, driving overall revenue growth during the fiscal year.
Revenue from operations	In FY2024, the company was able to successfully procure contracts based on its eligibility criteria, along with the availability of sufficient funds to cover necessary requirements, such as performance guarantees and Earnest Money Deposits (EMD). However, it is important to note that this increase in revenue is in line with the companys ongoing operations and aligns with industry trends.
Other Income	Our other income increased by 35.13%, rising to 16.81 Lakhs in Fiscal Year 2024, compared to 12.44 Lakhs in Fiscal Year 2023. The increase of 4.37 Lakhs is primarily attributable to the interest earned, which resulted from a higher average security deposit and an overall improvement in bank balances compared to the previous year.
	The employee benefits expense increased by 8.65%, rising to 2,649.57 Lakhs for Fiscal Year 2024, compared to 2,438.62 Lakhs for Fiscal Year 2023. This increase of 210.95 Lakhs was primarily attributed to higher salaries and wages. As mentioned earlier, employee benefit expenses are a significant component of our overall costs, directly linked to our revenue generation, reflecting our business model.
Employee Benefit Expenses	The increase in salaries and wages is primarily driven by the growth in sales, following the procurement of new tenders, which necessitated the expansion of our workforce to meet the demands of these new contracts. As a result, employee expenses increased in line with the growth in labour force required for the new projects. Despite the rise in employee expenses, the percentage increase in these costs is lower than the growth in revenue, indicating that the company is efficiently utilizing its workforce for the awarded projects, optimizing labour allocation and managing expenses effectively.
Finance Costs	Our finance costs increased by 250.14%, rising from 3.45 Lakhs in Fiscal 2023 to 12.08 Lakhs in Fiscal 2024. This increase of 8.63 Lakhs can primarily be attributed to higher working capital loans, driven by the increased capital requirements to participate in tenders.
	As the company expands and secures more tenders and projects, the demand for working capital grows. To address these financial needs, the company has relied on working capital loans and credit facilities, leading to a rise in finance costs.
Depreciation & Amortization	Our depreciation and amortization expenses increased by 15.43% rising from 19.25 Lakhs in Fiscal 2023 to 22.22 Lakhs in Fiscal 2024. This increase of 2.97 Lakhs is primarily due to the addition of depreciable tangible assets, such as office cars, during the fiscal year.
Other Expenses	Other expenses increased by 105.97%, rising from 134.21 Lakhs in Fiscal 2023 to 276.43 Lakhs in Fiscal 2024. The increase of 142.22 Lakhs is primarily attributable to recurring expenses, such as tender fees paid for bidding on projects. These expenses vary depending on the number of tenders applied for, and they are closely linked to the increase in revenue driven by the award of new tenders and projects. Additionally, there were non-recurring or one-time costs incurred, including interest and late fees paid for delayed compliance under ROC, EPF, and TDS. Moreover, there was a significant increase in non-recurring professional charges, primarily due to business support services availed.
Profit Before Tax	Profit before tax increased by 16%, rising from 301.56 Lakhs in Fiscal 2023 to 349.80 Lakhs in Fiscal 2024. The increase of 48.24 Lakhs can be attributed to the faster growth in revenue from operations, which outpaced the rise in the companys expenses, particularly employee benefit expenses, as previously discussed. The company successfully secured new tenders, contributing to overall revenue growth. However, the company efficiently managed its labour force, ensuring that the percentage increase in employee expenses was lower than the percentage increase in revenue. Despite this growth, increases in other expenses partially offset the rise in profit before tax. The profit before tax margin for the Fiscal year 2024 was 10.62% and that for the Fiscal year 2023 was 10.45%. As can be seen from the figures, the margins remains consistent with the prior years margin, showing minimal variance.
Tax Expense	Our tax expense increased from 75.90 Lakhs in Fiscal 2023 to 88.04 Lakhs in Fiscal 2024. The increase of 12.14 Lakhs is primarily attributable to the rise in profit before tax by 48.24 Lakhs, reflecting an effective tax rate of 25.17%. We anticipate a further increase in tax expenses in the coming periods, in line with the growth in profitability.
Profit After Tax	For the reasons discussed above, Profit after Tax (PAT) has increased by 16%, from 225.66 Lakhs in Fiscal 2023 to 261.76 Lakhs in Fiscal 2024. The increase in PAT is primarily attributed to the growth in revenue from operations during FY 2024. PAT margin for FY 2024 was 7.95% while that for FY 2023 was 7.82%. As can be seen from the PAT margin numbers, it is worth noting that the PAT margin remains consistent with the prior years margin, with only minor differences. This consistency is due to the companys efficient management of its labor force, ensuring that the percentage increase in employee expenses was lower than the percentage increase in revenue. While there was growth in PAT, increases in other expenses wholly offset the rise in profit before tax. As a result, although PAT has increased in absolute terms, the relative increase in PAT is marginal.

RELATED PARTY TRANSACTIONS

For information regarding Related Party Transactions, refer chapter titled "Related Party transactions" beginning on page 211of this Draft Red Herring Prospectus.

CONTINGENT LIABILTITES

For information regarding Contingent liabilities of our company, refer relevant chapter in chapter titled "Restated Financial Statement" beginning on page 211 of this Draft Red Herring Prospectus.

DISCUSSION OF THE STATEMENT OF CASH FLOWS

The table below summaries our cash flows from our Restated Audited Financial Information for the financial year ended March 31, 2025, 2024 and 2023:

(Amount in Lakhs)

Particulars	For the Year ended March 31, 2025	Year ended March 31, 2024	Year ended March 31, 2023
Net Cash (used in)/ generated from Operating activities	22.87	59.84	42.67
Net Cash (used in)/ generated from Investing activities	(401.49)	(200.59)	(54.94)
Net Cash (used in)/ generated from Finance activities	256.08	271.77	14.70
Net Increase/(Decrease) in Cash and Cash Equivalents	(122.54)	131.02	2.43

Note: In FY24, the company issued the right shares for consideration other than cash, for the procurement of property, plant, and equipment worth 640 Lakhs. This transaction is not considered in the cash flow statement as it does not involve cash flow. For further details regarding this transaction, please refer to the page number 90 in the chapter titled Capital Structure of this Draft Red Herring Prospectus.

CASH FLOW FROM OPERATING ACTIVITIES For the financial year ended March 31, 2025 he Net cash generated from operating activities is 22.87 Lakhs, which consists of profit before tax of 530.95 Lakhs as adjusted primarily for:

Depreciation and amortization expenses of 21.71 Lakhs.

Gain on sale of assets of 1.40 Lakhs.

Interest income of 3.51 Lakhs.

Finance charges of Rs. 34.70 Lakhs.

Working capital changes mainly due to increase in trade receivables of 37.14 Lakhs, increase in loans and advances of 75.76 Lakhs, decrease in trade payables and other current liabilities of 64.77 Lakhs, and decrease in short-term provisions of 259.12 Lakhs.

Direct taxes paid of 122.79 Lakhs.

For the financial year ended March 31, 2024

The Net cash generated from operating activities is 59.84 Lakhs, which consists of profit before tax of 349.80 Lakhs as adjusted primarily for:

Depreciation and amortization expenses of 22.22 Lakhs.

Interest charges of 12.08 Lakhs.

Interest income of 12.10 Lakhs.

Prior period adjustment of 2.57 Lakhs.

Working capital changes including decrease in trade receivables of 151.05 Lakhs, decrease in loans and advances of 1.73 Lakhs, decrease in trade payables and other current liabilities of 559.99 Lakhs, and increase in short-term provisions of 145.40 Lakhs.

Direct taxes paid of 50.35 Lakhs.

For the financial year ended March 31, 2023

The Net cash generated from operating activities is 42.67 Lakhs, which consists of profit before tax of 301.56 Lakhs as adjusted primarily for:

Depreciation and amortization expenses of 19.25 Lakhs.

Interest charges of 3.45 Lakhs.

Interest income of 10.95 Lakhs.

Working capital changes including increase in trade receivables of 291.04 Lakhs, increase in loans and advances of 15.02 Lakhs, and increase in trade payables and other current liabilities of 69.99 Lakhs, along with increase in short-term provisions of 4.25 Lakhs.

Direct taxes paid of 36.24 Lakhs.

CASH FLOW FROM INVESTING ACTIVITIES

For the financial year ended March 31, 2025

The Net cash used in investing activities is 401.49 Lakhs, primarily on account of:

Addition to fixed assets and WIP amounting to 59.93 Lakhs.

Increase in non-current assets of 346.47 Lakhs.

Partly offset by proceeds from sale of assets of 1.40 Lakhs and interest income of 3.51 Lakhs.

For the financial year ended March 31, 2023

The Net cash used in investing activities is 200.59 Lakhs, primarily on account of:

Addition to fixed assets and WIP amounting to 37.78 Lakhs.

Increase in non-current assets of 174.91 Lakhs.

Partly offset by interest income of 12.10 Lakhs.

For the financial year ended March 31, 2023

The Net cash used in investing activities is 54.94 Lakhs, primarily on account of:

Addition to fixed assets and WIP amounting to 11.03 Lakhs.

Increase in non-current assets of 54.86 Lakhs.

Partly offset by interest income of 10.95 Lakhs.

CASH FLOW FROM FINANCING ACTIVITIES

For the financial year ended March 31, 2025

The Net cash generated from financing activities is 256.08 Lakhs, primarily on account of:

Increase in long-term borrowings of 78.51 Lakhs.

Increase in short-term borrowings of 209.99 Lakhs.

Increase in long-term provisions of 2.28 Lakhs.

Partly offset by interest paid of 34.70 Lakhs.

For the financial year ended March 31, 2024

The Net cash generated from financing activities is 271.77 Lakhs, primarily on account of:

Increase in long-term borrowings of 24.40 Lakhs.

Increase in short-term borrowings of 70.23 Lakhs.

Issue of share capital amounting to 195 Lakhs.

Partly offset by decrease in long-term provisions of 5.78 Lakhs and interest paid of 12.08 Lakhs.

For the financial year ended March 31, 2023

The Net cash generated from financing activities is 14.70 Lakhs, primarily on account of:

Increase in long-term borrowings of 15.40 Lakhs.

Increase in long-term provisions of 2.75 Lakhs.

Partly offset by interest paid of 3.45 Lakhs.

CAPITAL EXPENDITURE IN THE LAST THREE YEARS

For details and ageing of Capital Expenditure and Capital Work-in-progress, refer chapter titled "Restated Financial Statements" beginning on page 211 of this Draft Red Herring Prospectus.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Financial market Risk

Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk. We are exposed to interest rate risk, inflation and credit risk in the normal course of our business.

Interest rate Risk

Our financial results are subject to changes in interest rates, which may affect our debt service obligations and our access to funds.

Liquidity Risk

Liquidity risk is the risk that we will encounter difficulties in meeting the obligations associated with our financial liabilities that are settled by delivering cash or another financial asset. Our approach to managing liquidity is to ensure, to the extent possible, that we will have sufficient liquidity to meet our liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to our reputation. We manage liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

Effect of Inflation

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

Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. Majority of the clients of the company are Government entities, with no history of defaults. Hence, credit risk on the trade receivables are negligible. The company takes adequate precaution in terms of evaluation of the creditworthiness of its direct clients. The track record of collection of Trade Receivables has been very healthy.

OTHER FACTORS

Information required as per Item 11 (II) (C) (iv) of Part A of Schedule VI to the SEBI (ICDR) Regulation:

1. Unusual or infrequent events or transactions

There has not been any unusual trend on account of our business activity.

2. Significant economic changes that materially affected or are likely to affect income from continuing operations.

Our business has been subject to economic changes, and we expect it to continue to be subject to significant economic changes arising from the trends identified above in "Factors Affecting our Results of Operations" and the uncertainties described in the section entitled "Risk Factors" beginning on page 38 of this Draft Red Herring Prospectus. To our knowledge, except as we have described in this Draft Red Herring Prospectus, there are no known factors which we expect to bring about significant economic changes.

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

Apart from the risks as disclosed under Section titled "Risk Factors" beginning on page 38 of the Draft Red Herring Prospectus, in our opinion, there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

4. Future changes in relationship between costs and revenues

Other than as described in the section titled "Risk Factors" and chapters titled "Our Business" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 38, 160 and 214 of this Draft Red Herring Prospectus respectively, to our knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

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

Changes in revenue in the last three financial years and the stub period 31.07.2025 are as explained in the part " COMPARISON OF FINANCIAL YEAR ENDED MARCH 31, 2025 WITH FINANCIAL YEAR ENDED MARCH 31, 2024", "COMPARISON OF FINANCIAL YEAR ENDED MARCH 31, 2024 WITH FINANCIAL YEAR ENDED MARCH 31, 2023" and "COMPARISON OF FINANCIAL YEAR ENDED MARCH 31, 2023 WITH FINANCIAL YEAR ENDED MARCH 31, 2022" above.

6. Total Turnover of Each Major Industry Segment in which the Issuer Operates

Following is the revenue bifurcation with respect to the services Issued by our Company:

Service Category	Up to 31.7.25	%	FY 2024-25	%	FY 2023-24	%	FY 2022-23	%
Manpower Services
Security Manpower Personal Services	654.26	51%	1,677.79	47%	1,550.79	47%	1,274.64	44%
Other Manpower and Supervision Services	363.36	28%	1142.81	32%	818.97	25%	517.19	18%
Integrated Facility Management
Housekeeping Services	273.37	21%	744.94	21%	923.53	28%	1,092.82	38%
Total	1,290.98	100%	3,565.54	100%	3,293.29	100 %	2,884.64	100 %

(For the above details relating to revenue bifurcated into nature of services, we have relied upon the certificate dated September 10, 2025 vide UDIN: 25099065BMNVAR8801issued by the Statutory Auditors of our Company i.e.M/s PDMS AND CO., Chartered Accountants)

For detailed information regarding the product Offerings and revenue bifurcation by geography, please refer to the "Our Business" section on page 160 of this Draft Red Herring Prospectus.

7. Status of any publicly announced New Products or Business Segment

Except as disclosed in the chapter titled "Our Business" beginning on page 160of this Draft Red Herring Prospectus, our Company has not announced any new product or service. Further, there is no publicly announced new products or business segment.

8. The extent to which business is seasonal

Services provided by the Issuer Company are such that they are required throughout the year and hence, the business of the Issuer Company is not seasonal.

9. Significant Dependence on a single or few suppliers or customers

The table set forth below are contribution of our top customers towards our revenue from operations:

Category of Customers	FY 2024-25		FY 2023-24		FY 2022-23
	Amount	% of Total Sales	Amount	% of Total Sales	Amount	% of Total Sales
Top 5 Customers	2248.04	63.90%	1952.29	59.28%	1847.96	64.06%
Top 10 Customers	2678.67	76.14%	2451.77	74.45%	2217.85	76.88%

(For the above details relating to top 5/10 customers, we have relied upon the certificate dated September 10, 2025 vide UDIN: : 25099065BMNVAE6102 issued by the Statutory Auditors of our Company i.e.M/s PDMS AND CO., Chartered Accountants)

10. Competitive conditions

Competitive conditions are as described under the head ‘Competition under chapters titled "Our Business" on page 160 of this Draft Red Herring Prospectus.