Cambridge Technology Enterprises Ltd Management Discussions

Headline: IntelligentTransformation: Legacy and AI Futures Bridging

Leading global enterprises today view AI and data as strategic imperatives that drive both operational efficiency and growth. Rather than isolated experiments, these organizations are pursuing enterprise-scale AI/ML solutions to streamline processes and unlock new revenue models. Reports have found businesses increasing their investments in generative AI, while about 80% of businesses have said they already use AI in at least one core business function. This momentum reflects a strategic shift: C-suite leaders now expect AI-driven automation and analytics to shorten cycle times, reduce costs, and create differentiated value across the enterprise.

The other theme that was noticed this past year was the integration of modern AI capabilities environments. Roughly 70% of the software being used in large enterprises was developed over two decades ago, creating significant technical debt. To bridge this gap, companies are looking to build open, cloud-enabled architectures and embed advanced analytics into existing systems. By breaking down data silos and layering machine learning onto legacy platforms, enterprises are moving to enable new "smarts" across established work flows from intelligent process automation to predictive maintenance without disrupting critical operations. In practice, this means making data actionable across the business and ensuring that new AI models can communicate seamlessly with legacy processes.

This is where we believe Cambridge Technology is uniquely positioned to help large enterprises capture these AI-driven opportunities. Our proven methodology from deep data engineering through AI/ML model development and systems integration is tailored to the scale and interoperability that is being asked by these enterprises. This year, we have met enterprises where theyare,buildingbespokeAIanddatasolutionson top of existing processes to drive e ciencies and growth. By delivering tailored machine-learning pipelines and interoperable platforms, we deployed high-impact use cases and continuously re ned them through feedback loops. We paired deep domain expertise with cutting-edge AI, data, and cloud technologies to turn enterprise data into advantage.

Preferred Partner for the Changing Tech Landscape

Enterprises today face an overwhelming number of solutions what they need are the right technologies, infrastructures, and integrations that align with existing systems while keeping pace with evolving trends.

Cambridge Technology bridges this gap as a preferred partner to Fortune 100 enterprises, combining 25+ years of experience and 1,000+ successful projects.

Our AI and data specialists deliver scalable solutions from model development to enterprise environments. We help clients adopt advanced technologies like LLMs, machine learning, and cloud-native architectures at the right time and scale.

Every engagement is approached as a long-term partnership, ensuring continuous strategy re nement and ROI. By applying AI to optimize processes, enhance e ciencies, and drive meaningful outcomes, we turn experiments into enterprise-ready results. This blend of strategic guidance, deep expertise, and execution excellence makes us the preferred AI partner for forward-looking U.S. enterprises.

Service O erings

Recognized as a thought leader with ISO 20000-1: 2018 and ISO 27001:2022 certi cations,our gamut of end-to-end services in AI, data, applications, infrastructures, and the cloud can help with every unique, complex challenge. Our services, solutions, and over 350 plus employees transform businesses for a changing world with strategic workshops to ready-to-deploy solutions. Arti cial Intelligence

Our AI practicedelivers enterprise-grade integration of advanced AI models and agents into daily enterprise operations, increasing e ciencies, predictive capabilities deep domain expertise in operationalizing processes, and deliver meaningful outcomes with custom models and solutions, gence, cross-platform interoperability, accelerating time-to-value and innovation. Our AI solutions leverage predictive analytics, NLP, computer vision, and other capabilities decisions at scale for enterprises, keeping them ahead of the competition.

Data Engineering

Our data engineering services provide the foundational backbone for enterprise AI and analytics initiatives. We design and implement modern data architectures that unify fragmented data sources, enable real-time processing, environments. From building robust data lakes and ETL pipelines to enabling data observability and lineage, we ensure that enterprise data is accessible, reliable, and AI-ready with curated solutions engineered for performance, compliance, and seamless integrationwith downstream AI and BI systems

Enterprise Applications

Through our enterprise application services, we help modernize core business systems and enable seamless interoperability across digital ecosystems. We architect, develop, and integrate cloud-native applications tailored to enterprise needs spanning ERP, CRM, supply chain, and workforce solutions. With our approach focused on modularity, API- first design, and low-code extensibility, our solutions help enterprises accelerate deployment and adaptability, embedding analytics and AI into enterprise work flows, driving automation, optimizing user experiences, and ensuring business continuity across complex, distributed environments.

Energy/Industrials

a. From how energy is produced and transmitted to how it is consumed, AI can help transform the energy industry to match the new, rising demands. For instance, about 27.6% of total US energy consumption is by the residential and commercial sectors. b. The sectors focus has been on exploring renewable energy, making energy consumption sustainable, and enabling powerful computation models that can help reduce dependency on energy, availability, costs, and consumption. c. We proudly serve one of the worlds most potent energy management and automation specialists in the energy vertical.

Healthcare and Life Sciences

a. The recent developments in agentic AI, Large language models, and data engineering have opened new promises for the sector to offer personalized cases, accelerate research, and enable higher accuracy in data processing and decision-making. b. Our experts have an extensive understanding of the complexities in managing, processing, transforming, and securing varied data from areas like clinical research, plants, and animal genomics. c. Our experts help enterprises create predictive models that leverage AI and advanced data methodologies to detect patterns and anomalies effectively to help reduce the time spent making a drug discovery d. We also help create engaging experiences for various stakeholders by extending work flows across the supply chain, clinical, and financial processes without systems or low-code platforms

Banking, Financial Services & Insurance (BFSI)

a. Digital payments are soaring, and businesses in the sector are looking at efficient technologies that can manage the volume, variety, and velocity of transactions while ensuring high levels of security for data and accounts. b. From fraud detection, risk assessment to credit scoring, businesses are looking at AI and advanced data models to identify patterns in real-time and assess creditworthiness more accurately than traditional c. Our experts help enterprises improve customer experiences and understand the market better, with AI and data solutions that get valuable insights into behavior, preferences, and needs, enabling personalized offerings and strategic decision-making d. We have helped customers build cross-border electronic trading infrastructures to enable global flows and provide a unique distribution and regulatory network for capital raising in international markets.

Security/Access Management

a. The total amount of data created, captured, copied, and consumed globally was expected to reach 149 zettabytes in 2024 and rise over 394 zettabytes by 2028. It presents a huge opportunity to increase collaboration and manage information better with AI in data storage, fraud detection & prevention, compliance reporting, risk management, and several other areas. b. We serve one of the worlds largest companies in storage and information management solutions in this vertical.

FINANCIAL AND OPERATIONAL PERFORMANCE

CONSOLIDATED PERFORMANCE

(In Rupees Crores)

Year	2024-25	2023-24
Revenue from operations	198.92	206.23
Total Expenses	250.22	203.68
Profit Before Tax	(46.05)	8.04
Profit After Tax	(48.06)	5.58
Total Comprehensive Income	(44.50)	7.97
Reserves & Surplus	48.31	92.83
EPS	(24.48)	2.84

a. Revenue

During the year ended 31^st March, 2025, the Company recorded consolidated revenue of Rupees 198.92 crores as against Rupees 206.23 crores in the previous year, reflecting a marginal decrease of 3.54%.

The decline in revenue during the year under review was primarily attributable to the expiry of certain projects, a general slowdown in market conditions, a decline in service-related revenues, and lower revenues and contribution margins from recently acquired entities. Despite these headwinds, the management continues to implement focused strategic initiatives aimed at strengthening engagement with existing and potential clients, broadening the Companys service offerings, and pursuing new growth opportunities. These efforts are aligned with the Companys objective of enhancing operational resilience and driving sustainable long-term value for stakeholders.

b. Profit Before Tax (PBT)

The Company reported a consolidated loss before tax of Rupees46.05 crores for the year ended 31^st arch, 2025 as compared to a profit before tax of Rupees8.04 crores in the previous year.

The consolidated losses for the year under review were primarily driven by multiple factors, including the closure of underperforming projects, subdued revenues and lower contribution margins from certain subsidiaries, elevated bench costs, and one-time adjustments associated with recently acquired entities. In addition, the Company made targeted investments in strategic initiatives aimed at expanding its capabilities, optimizing cost structures, and repositioning its service offerings. While these initiatives have not yet translated into immediate revenue generation, they are expected to strengthen the Companys competitive positioning and support sustainable long-term growth through enhanced operational efficiency and improved pricing strategies.

c. Profit After Tax (PAT), Comprehensive Income & Reserves and Surplus

During the year ended 31^st March, 2025, the Company reported a consolidated loss after tax of Rupees 48.06 crores as compared to a profit after tax of Rupees 5.58 crores in the previous year, reflecting a decline of 961.29%. Total Comprehensive Income also decreased by 658.34% during FY 2024-25, highlighting the overall impact on the bottom line. Consequently, Reserves and Surplus reduced by 47.96%, from Rupees 92.83 crores in FY 2023-24 to Rupees 48.31 crores in FY 2024-25.

Decline in Profitability

The decline in profitability after tax during the year under review was driven by a combination of factors, both operational and strategic:

A reduction in revenue resulting from the closure of certain underperforming projects; Lower revenues and contribution margins from subsidiaries;

Losses from acquired entities, which led to significant one-time adjustments in the consolidated financials; Cost absorption pressures in specific business units due to delays in project execution and ramp-up activities; A lack of recurring revenue streams, with a significant portion of projects being one-time in nature; Strategic development expenditure incurred during the year, which, while not yet yielding revenue, is expected to enhance the Companys long-term positioning and competitiveness.

While these factors had a material impact on profitability for the year, it is important to highlight that a portion of the impact is non-recurring in nature, stemming from past acquisitions and transitional adjustments. Looking ahead, the Company remains focused on restoring profitability and strengthening its financial position. Investments made towards new product development, delivery capability enhancement, and strategic initiatives are expected to contribute positively over the medium to long term.

Additionally, the Company has initiated a series of measures aimed at optimizing operating costs, improving internal efficiencies, and better aligning resources with its long-term growth roadmap. These steps are expected to support margin recovery and facilitate the rebuilding of reserves in the forthcoming periods.

d. Expenditure

Total Expenditure increased by 22.85% to Rupees 250.22 crores for the year ended 31^st March, 2025 as compared to Rupees 203.68 crores in the previous year. Out of the above, Employee Benefits Expense stood at Rupees 145.97 crores in FY 2024-25 as against Rupees 125.06 crores in FY 2023-24.

The increase in employee costs during the year reflects the Companys deliberate focus on retaining and nurturing its existing talent base, which remains its most critical asset. Concurrently, the Company has initiated rationalization measures, including the scale-down of non-profitable projects within acquired entities, to better align the workforce with its long-term strategic objectives. While these actions have led to an uptick in short-term employee-related expenses, the management considers them essential investments toward strengthening organizational capabilities and driving sustainable growth in the future.

STANDALONE PERFORMANCE

(In Rupees Crores)

Year	2024 25	2023 24
Revenue from operations	66.43	76.32
Total Expenses	66.04	75.14
Profit Before Tax	4.85	4.99
Profit After Tax	2.54	3.48
Total Comprehensive Income	2.56	3.31
Reserves & Surplus	32.07	29.50
EPS	1.30	1.77

a. Revenue

Revenue decreased by 12.96% to Rupees66.43 crores for the year ended 31^st March, 2025 as compared to Rupees76.32 crores in the previous year.

The decline in performance was primarily driven by reduced revenue from existing projects, the closure of certain domestic engagements, and lower license sales during the year. In response, the Company has intensified its focus on strengthening core operations, diversifying its business portfolio, and actively exploring new growth opportunities to regain and sustain momentum in the coming periods.

b. Profit Before Tax

Profit Before Tax (PBT) stood at Rupees 4.85 crores for the year ended 31^st March, 2025 as compared to Rupees 4.99 crores in the previous year, reflecting a marginal decrease of 2.80%.

The decline was primarily attributed to lower revenue from domestic projects and reduced license sales. However, the impact was partly mitigated by the Companys focus on cost control and operational efficiency, which helped to contain the overall decline in profitability.

c. Profit After Tax, Comprehensive Income & Reserves and Surplus

Profit After Tax (PAT) decreased by 27.01% to Rupees 2.54 crores for the year ended 31^st March, 2025 as compared to Rupees 3.48 crores in the previous year. Total Comprehensive Income also decreased by 22.66% during FY 2024-25, reflecting the overall impact on bottom-line performance.

The decline in Profit After Tax (PAT) is primarily attributable to variations in tax provisions. Despite the moderation in profitability, the Companys financial position remains robust, with Reserves and

Surplus increasing from Rupees 29.50 crores in FY 2023-24 to Rupees 32.07 crores in FY 2024-25, bolstered by retained earnings. The Company remains committed to enhancing operational efficiency, strengthening its core business, and maintaining a strong and healthy balance sheet to support sustainable future growth.

d. Expenditure

Total Expenditure decreased by 12.11% to Rupees66.04 crores for the year ended 31^st March, 2025 as compared to Rupees 75.14 crores in the previous year. Out of the above, Employee Benefits Expense stood at Rupees 44.89 crores in FY 2024-25 as against Rupees 52.21 crores in FY 2023-24.

The reduction in manpower costs was due to the reallocation of certain employees to other group entities, aligned with project-specific requirements. Since the standalone entity primarily operates on ODC model, this manpower movement was undertaken to optimise resource utilization across the Group. At the same time, the Company has continued to safeguard its core ODC talent pool, which remains central to delivering sustained value to its global clients.

The details of the financial performance of your company are appearing in the Balance Sheet, Profit & Loss Account and other financial statements forming part of this Annual report.

SEGMENT INFORMATION

The primary business segment of your Company is Information Technology Services. The primary activity as per NIC code is Computer programming, consultancy and related activities.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your companys board and management team monitor and make enhancements to your companys systems for internal control and risk management on an ongoing basis. Your companys efforts towards this go beyond what is mandatorily required, with active monitoring and review to ensure adequacy of control systems and to identify potential risks as well as recommend or implement measures to mitigate them.

Your Company has a proper and adequate system of internal control to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and that the transactions are authorized, reported and recorded correctly. Your companys internal control system is adequate considering the nature, size and complexity of its business. Your companys internal control systems provide, among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of company assets. These also enable your company to adhere to procedures, guidelines, and regulations as applicable in a transparent manner.

HUMAN RESOURCES / INDUSTRIAL RELATIONS

Your company is committed to create an environment of learning and development, openness, promote internal talent and build an appreciating culture and transparent communication. Your Company has created platforms for recognizing and motivating employees for the good work they do in the organization. Sound human resource development policies of your Company ensures that each employee grows as an individual and contributes to the performance of your Company. It also works towards building a work culture aimed at achieving higher performance orientation. Recognition and Appreciation culture in the Company has been further strengthened. It also continues to build on the engagement level of employees.

Our employees are our most important and valuable assets. All your Companys policies are focused towards a healthy, happy and prosperous work environment for its employees and thereby also fulfil the aspirations of the people at work. The key elements that define our culture include professional working environment, training and development, and compensation.

There are no material developments in Human Resources/Industrial Relations front during the period ended March 31^st, 2025. Your Company had 242 permanent employees on its rolls as on March 31, 2025 when compared to 286 permanent employees as on March 31, 2024. The headcount of the Company along with its subsidiaries is 369.

FINANCIAL RATIOS

Following are ratios for the current financial year and their comparison with preceding financial year, along with explanations where the change has been 25% or more when compared to immediately preceding financial year:

STANDALONE:

S. No. Ratio Description	March 31, 2025	March 31, 2024	Change (%)	Explanation
1 Debtors Turnover/ Trade Receivables Turnover Ratio	27.75	37.50	(26)	The ratio has decreased from 37.50 in FY 2023 24 to 27.75 in FY 2024 25. This decline is mainly due to an increase in average trade receivables and a reduction in revenue. The receivables are taking longer to convert into cash, due to slower collections during the year. The company is actively monitoring receivables and working on improving collection efficiency.
2 Inventory Turnover	NA	NA	-	-
3 Interest Coverage Ratio/ Debt Service Coverage Ratio	2.27	2.54	(10.63)	-
4 Current Ratio	0.85	0.79	7.59	-
5 Debt Equity Ratio	0.58	0.68	(14.70)	The Debt-Equity Ratio has come down from 0.68 in the previous year to 0.58 as of 31 March 2025. This improvement is mainly due to repayment of debt by using funds from fixed deposits. This step has helped reduce the companys dependence on borrowings and reflects better financial stability and prudent fund management.
6 Operating Profit Margin (%)	0.15	0.13	15.38	-
7 Net Profit Margin (%)	0.04	0.05	(20)	-
8 Return on Net Worth/ Return on Equity Ratio (%)	0.05	0.07	(28.57)	The ROE has reduced from 0.07 in the previous year to 0.05 in the current year. This change is mainly due to a decline in the companys net profit, even though the equity base has grown slightly. The lower ROE reflects a dip in earnings efficiency.

CONSOLIDATED:

S. No. Ratio Description	March 31, 2025	March 31, 2024	Change (%)	Explanation
1 Debtors Turnover/ Trade Receivables Turnover Ratio	3.65	3.51	3.99	-
2 Inventory Turnover	NA	NA	-	-
3 Interest Coverage Ratio/Debt Service Coverage Ratio	(2.30)	3.02	(176.16)	The DSCR for the year ended 31-Mar- 25 is (2.30) as compared to 3.02 in the previous year. The sharp decline is primarily due to a significant reduction in net operating cash flows (from Rs. 266.48 lakhs in FY24 to negative Rs.215.74 lakhs in FY25), despite a marginal increase in debt obligations (from Rs. 88.22 lakhs to Rs. 93.65 lakhs). The negative cash flow position has adversely impacted the companys ability to service its debt from operational earnings.
4 Current Ratio	1.63	1.83	(10.93)	-
5 Debt Equity Ratio	1.27	1.04	22.11	-
6 Operating Profit Margin (%)	(0.18)	0.08	(325)	Operating Profit Margin (%) declined from 0.08% in FY 2023 24 to (0.18) % in FY 2024 25, mainly due to continued fixed operational costs against reduced or delayed project execution in certain business segments. The drop also reflects one-time adjustments and expenses incurred as part of the ongoing clean-up and streamlining process for acquired entities. These measures, though affecting margins in the short term, are aimed at strengthening operational efficiency and positioning the company for improved performance in future periods.
7 Net Profit Margin (%)	(0.23)	0.04	(675)	Net Profit Margin (%) declined from 0.04% in FY 2023 24 to (0.23) % in FY 2024 25, primarily due to one-time expenses arising from the alignment and clean-up of legacy balances and operational inefficiencies in acquired entities. These expenses were absorbed during the year as part of the companys strategic effort to streamline operations and strengthen the financial position of the group.
8 Return on Net Worth (%)/ Return on Equity Ratio (%)	(0.68)	0.07	(1071.43)	The Return on Equity (ROE) declined from 0.07 in FY 2023-24 to (0.67) in FY 2024-25, primarily due to a net loss of Rs. 460.53 lakhs during the year, as compared to a net profit of Rs. 80.41 lakhs in the previous year. This loss, coupled with a reduction in shareholders equity, has materially impacted the ROE.
				The current years loss is driven by planned strategic investments aimed at positioning the Company for long- term growth. These include increased spend on insurance- focused technology projects, as well as continued development efforts on various projects which are expected to enhance operational scalability and create future revenue opportunities.

CAUTIONARY STATEMENT

Certain statements in this report or elsewhere in the Annual Report may contain statements concerning Cambridge Technology Enterprises Limited and its growth prospects, expected financial position, business strategy, future development of the companys operations, general economy, industry structure and other developments that are individually and collectively forward-looking statements.

Such forward-looking statements are not guarantees of actual results, future performance or achievements and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the industry in India and world-wide, competition, changes in government policies or regulations of India, changes relating to the administration of the company, the companys ability to successfully implement its strategy, the Companys future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the

Companys market preferences and its exposure to market risks, as well as other risks.

The Companys actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this report. The Company assumes no obligation to update any forward-looking information contained in this report.