Clear Secured Services Ltd Management Discussions

The following discussion is intended to convey managements perspective of our financial condition and results of operations should be read in conjunction with our Consolidated Restated Financial Statements as of and for the period ended August 31, 2025 and financial year(s) ended March 31, 2025, 2024 and 2023 prepared in accordance with the Companies Act, 1956 and Companies Act, 2013 to the extent applicable and AS and Consolidated Restated in accordance with the SEBI (ICDR) Regulations, including the schedules, annexure and notes thereto and the reports there on, included in "Financial Information" beginning on page 241 of this Red Herring 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 "Risk Factors " and "Forward Looking Statements " beginning on pages 38 and 28 respectively, of this Red Herring Prospectus.

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

In this section, unless the context otherwise requires, any reference to "we", "us" or "our" refers to Clear Secured Services Limited, our Company.

Business Overview

Our Company was originally incorporated as a private limited company under the Companies Act, 2013 in the name and style of "Clear Secured Services Private Limited" bearing Corporate Identification Number U74920MH2008PTC187508 dated October 14, 2008, issued by the Registrar of Companies, Mumbai. Subsequently, our Company was converted into a Public Limited Company vide Special Resolution passed by the Shareholders at the Extraordinary General Meeting, held on February 11, 2025 and consequently the name of our Company was changed from "Clear Secured Services Private Limited" to "Clear Secured Services Limited" vide a fresh certificate of incorporation dated March 06, 2025 issued by the Registrar of Companies, Mumbai, bearing CIN U46529MH2008PLC187508. At present, the Registered Office of the Company situated at 14B/4, Ground Floor, Plot -14A/14B, New Sion CHS, Swami Vallanbhdas Marg, Road No 24, Sindhi Colony, Sion, Mumbai, Maharashtra, India, 400022.

Our Company provides a range of services aimed at improving operational efficiency and supporting business functions across different sectors. We specialize in Integrated Facility Management (IFM), offering both soft services — such as housekeeping, security services, payment management services, and staffing services — and hard services, including electro-mechanical services, repair and maintenance services, facade cleaning and pest control services. These services are tailored to meet the operational needs of commercial and industrial clients, focusing on cleanliness, safety, and reliability.

Under Support Services, we also deliver Total Infrastructure Solutions (TIS), which include interior design, plumbing, fire safety, and office furniture services. These are designed to improve workplace functionality and design. In the agro-food sector, we assist with the sourcing and trading of millets and wheat. Our Telecom Infrastructure Solutions cover mobile tower installations, while our Cash Van service supports the secure transport of cash for ATM operations. Through our service network and domain experience, we help businesses manage routine operations, allowing them to focus on their primary activities.

Our operations prioritize efficiency, regulatory compliance, and consistent service delivery across regions. We have established processes for contract management, recruitment, labour compliance, and cost control. Technology and process improvements are used to maintain service quality and address client needs. We also focus on employee welfare, business development, and managing relationships with stakeholders to support long-term engagement.

As of August, 31, 2025, we are serving more than 117 clients through contracts for the provision of various IFM and support services. Our clients are spread across a wide variety of industries, including telecommunications, insurance, real estate, oil and gas, banking, retail, and government. Our Promoters have an experience of more than 16 years in the service industry, who have been a part of our Company since the very inception.

Significant Developments subsequent to the last audited period. In the opinion of the Board of Directors of our Company, since the date of the last audited period ended August 31, 2025, as disclosed in this Red Herring Prospectus, there are no circumstances that materially or adversely affect or are likely to affect the trading or profitability of our Company or the value of its assets or its ability to pay its material liabilities within the remaining months till October 31, 2025 except as follows:

1. The Board of Directors have decided to get their equity shares listed on Emerge Platform of NSE and pursuant to Section 62(1)(c) of the Companies Act 2013, by a resolution passed at its meeting held on May 26, 2025, proposed the Issue, subject to the approval of the shareholders and such other authorities as may be necessary.

2. The shareholders of the Company have, pursuant to Section 62(1)(c) of the Companies Act 2013, by a special resolution passed in the Extraordinary General Meeting held on May 28, 2025, authorized the Initial Public Issue.

3. The Company filed its Draft Red Herring Prospectus with the NSE Emerge on June 23, 2025, after it was approved at the Board meeting held on Monday, June 23, 2025.

Factors Affecting our Results of Operations:

Our financial condition and results of operations are affected by numerous factors and uncertainties, including those discussed in the section titled ‘Risk Factors on page 38 of this Letter of Offer. The following is a discussion of certain factors that have had, and we expect will continue to have, a significant effect on our financial condition and results of operations:

• Any adverse changes in central or state government policies;

• Any qualifications or other observations made by our statutory auditors which may affect our results of operations;

• Loss of one or more of our key customers and/or suppliers;

• Cost and availability of skilled manpower;

• An increase in the productivity and overall efficiency of our competitors;

• Our ability to maintain and enhance our brand image;

• General economic and business conditions in the markets in which we operate and in the local, regional and national economies;

• Changes in political and social conditions in India or in countries that we may enter, the monetary and interest rate policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

• The performance of the financial markets in India and globally;

• Occurrences of natural disasters or calamities affecting the areas in which we have operations;

• Market fluctuations and industry dynamics beyond our control;

• Our ability to compete effectively, particularly in new markets and businesses;

• Inability to collect our dues and receivables from, or invoice our unbilled services to, our customers, our results of operations;

• Other factors beyond our control;

• Our ability to manage risks that arise from these factors;

• Changes in Regulatory environment for the Labour market in India;

• Changes in domestic laws, regulations and taxes and changes in competition in our industry;

• Termination of customer contracts without cause and with little or no notice or penalty; and

• Inability to obtain, maintain or renew requisite statutory and regulatory permits and approvals or noncompliance with and changes in, safety, health and environmental laws and other applicable regulations, may adversely affect our business, financial condition, results of operations and prospects.

SIGNIFICANT ACCOUNTING POLICIES:

For Significant accounting policies please refer "Significant Accounting Policies to the Consolidated Restated Financial Statements", under

Section titled "Financial Information" beginning on page 241 of the Red Herring Prospectus.

SUMMARY OF THE RESULTS OF OPERATION:

The following table sets forth select financial data from Consolidated Restated profit and loss accounts for the five months period ended August 31, 2025 and financial year(s) ended on FY 2025, FY 2024 and FY 2023 and the components of which are also expressed as a percentage of total income for such periods.

Particulars	Five months ended on August 31, 2025		For the year ended March 31,
	Five months ended for FY25	% of Total Revenue	FY25	% of Total Revenue	FY24	% of Total Revenue	FY23	% of Total Revenue
Revenue from Operations	22,844.61	98.61%	47,617.53	98.64%	34,754.28	99.12%	30,903.86	99.14%
Other Income	322.93	1.39%	656.35	1.36%	308.91	0.88%	267.58	0.86%
Total	23,167.55	100.00%	48,273.88	100.00%	35,063.19	100.00%	31,171.44	100.00%
Expenditure
Cost of Material Consumed	3,046.65	13.15%	10,468.52	21.69%	11,950.51	34.08%	11,546.47	37.04%
Purchase of Stock-In-Trade	5,573.03	24.06%	10,288.98	21.31%	-	-	-	-
Changes in Inventories of Finished Goods	(164.75)	(0.71%)	(540.26)	(1.12%)	10.82	0.03%	(300.14)	(0.96%)
Employee Benefit Expenses	5,077.26	21.92%	10,530. 96	21.82%	10,861.90	30.98%	12,500.39	40.10%
Finance Costs	400.09	1.73%	1002.94	2.08%	377.24	1.08%	305.86	0.98%
Depreciation and Amortization Expense	302.25	1.30%	210.90	0.44%	307.87	0.88%	431.71	1.38%
Other Expenses	7,168.00	30.94%	13,788.31	28.56%	9,752.25	27.81%	5,680.13	18.22%
Total
Profit before Tax and exceptional items	1,765.03	7.62%	2,523.52	5.23%	1,802.59	5.14%	1,007.02	3.23%
Exceptional Items	-	-	(844.16)	(1.75%)	1.26	0.00%	(18.69)	-0.06%
Net Profit before Tax	1,765.03	7.62%	1679.36	3.48%	1,803.86	5.14%	988.32	3.17%
Less: Provision for Taxes
Current Tax	482.81	2.08%	614.41	1.27%	441.80	1.26%	358.10	1.15%
Deferred Tax	(107.38)	(0.46%)	69.15	0.14%	30.59	0.09%	(55.17)	(0.18%)
Tax Adjustments of earlier Years	-	-	3.62	0.01%	123.03	0.35%	-	-
Net Profit after Tax	1,389.59	6.00%	992.19	2.06%	1,208.43	3.45%	685.41	2.20%

MAIN COMPONENTS OF PROFIT AND LOSS ACCOUNT Income

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

Revenue from operation

The Revenue from operations consists of revenue from Integrated facility management services, Sale of Agro Products and Sale of Iron and Steel Products. Our Revenue from operations as a percentage of total revenue was 98.61%, 98.64%, 99.12% and 99.14% for Five months ended August 31, 2025, FY25, FY24 and FY23 respectively.

Other Income:

Other Income comprises of Interest Income, Rental Income, Miscellaneous Receipts, Profit on sale of Property, Plant and Equipment and Profit on sale of Equity Shares. Other Income as a percentage of Total Revenue was 1.39%, 1.36%, 0.88% and

0.86% for Five months ended August 31, 2025, FY25, FY24 and FY23 respectively. In FY 25 the major contributors of Other Income are Interest Income, Rental Income, Profit on sale of property, plant and equipment, Profit on sale of equity shares and Amounts no longer payable written back. However, in the rest FYs Interest and Rental Income is the major contributor.

Expenditure:

Our total expenditure primarily consists of Cost of Material Consumed, Purchase of Stock-In-Trade, Changes in Inventories of Finished Goods, Employee Benefit expenses, Finance Expenses, Depreciation and Amortization and Other Expenses which is 92.38%, 94.77%, 94.86% and 96.77% of total revenue for Five months ended August 31, 2025, FY25, FY24 and FY23 respectively.

Cost of Material Consumed:

Cost of Material Consumed is represented by consumables including composite services. Cost of Material Consumed form a major part of the Total Expenditure and over the years with 13.15%, 21.69%, 34.08% and 37.04%recorded in Five months ended August 31, 2025, FY24, FY23 and FY22 respectively.

Purchases of Stock-in-Trade:

In FY 25 the new business has been introduced i.e. Trading of Agro products and hence, the Purchases of Agro products is nil in the FY 24 and FY 23. In five months ended August 31, 2025 and in FY 25 the purchases are Rs5,573.03 Lakhs and Rs10,288.98 Lakhs respectively.

Employee Benefit Expenses:

Employee Benefit expenses is a major part of the total expenses and include Salaries, wages and bonus, Managerial Remuneration, Contribution to provident and other funds, Gratuity and Staff Welfare Expenses. Employee Benefit Expenses as a percentage of Total Revenue was 21.92%, 21.82%, 30.98% and 40.10% for Five months ended August 31, 2025, FY24, FY23 and FY22 respectively.

Other Expenses:

Other Expenses are bifurcated into two components. First component consists of Operating Expenses which includes Repairs & Maintenance Cost, Service defects/ Credit notes/Volume Discount and Other Operating Expenses. Second component consists of Rent of Premises, Power and Fuel, Legal and professional, Travelling and conveyance, Insurance expenses, Provision for doubtful debts, Bad Debts, Telephone and Internet Charges, Corporate Social Responsibility Expenses, Office Expenses, Auditors Remuneration, Rates and Taxes, Service Tax Assessment Dues, Fine & Penalty, Donation, Bank Charges, Service Contract Charges, Sales Promotion Expenses, Postage and Courier, Commission & Brokerage Expenses, Business Support Services, Transportation and freight expenses, Installation & Commission Expenses, Software Development Charges, Annual Maintenance Charges and Miscellaneous Expenses. Other Expenses as a percentage of Total Revenue was 30.94%, 28.56%, 27.81% and 18.22% for Five months ended August 31, 2025, FY25, FY24 and FY23 respectively.

Finance Cost:

Finance Cost includes Interest on Borrowings and Interest on Statutory Dues. Interest on borrowings has increased from Rs262.29 Lakhs in FY23 to Rs399.53 Lakhs in five months ended August 31, 2025 and Interest on Statutory Dues has decreased from Rs43.57 lakhs in FY 23 to Rs0.56 lakhs in five months ended August 31, 2025. However, in FY 25 the Interest on Statutory dues was Rs197.85 lakhs due to delay in payment of Provident fund of earlier years.

Depreciation & Amortization:

Depreciation & Amortization includes Depreciation on Tangible and Intangible assets which has decreased from 1.38% of Total Revenue in FY22 to 0.44% of Total Revenue in FY 25. However, in five months ended August 31, 2025 the Depreciation & Amortization expenses have increased due to purchases of E-Surveillance system, Plant & machinery etc.

FIVE MONTHS ENDED AUGUST 31, 2025

The total revenue was Rs23,167.55 lakhs for five months ended August 31, 2025.

Revenue from Operations

Revenue from operations contributed Rs22,844.61 lakhs for five months period or 98.61% of total revenue for this period.

Other Income

Other Income contributed Rs322.93 lakhs for five months ended August 31, 2025 or 1.39% of total revenue for this period.

Cost of Material Consumed

Cost of Material Consumed contributed to Rs3,046.65 lakhs or 13.15% of Total Revenue for five months ended August 31, 2025. Purchase of stock-in-trade

The Purchases of Agro products in five months ended August 31, 2025 is Rs5,573.03 Lakhs.

Employee Benefit Expense

Employee Benefit Expense contributed to Rs5,077.26 lakhs or 21.92% of Total Revenue for five months ended August 31, 2025. Finance Costs

Finance Costs contributed to Rs400.09 lakhs or 1.73% of Total Revenue for five months ended August 31, 2025.

Other Expenses

Other Expenses contributed Rs7,168.00 lakhs or 30.94% of Total Revenue for five months ended August 31, 2025.

Depreciation & Amortization

Depreciation & Amortization contributed Rs302.25 lakhs or 1.30% of Total revenue for five months ended August 31, 2025.

Tax Expenses

Tax Expense contributed Rs375.43 lakhs or 1.62% of Total revenue for five months ended August 31, 2025.

Profit after Tax

Profit After Tax stood at Rs1,389.59 lakhs or 6.00% of Total revenue for five months ended August 31, 2025.

Other key ratios:

Particulars	For the Five months period ending August 31, 2025
Return on Net worth %	12.09%
Current Ratio (times)	1.53

Return on Net worth

This is defined as Net profit after tax divided by Average Net worth, based on the Consolidated Restated financial statements. Current Ratio

This is defined as total current assets divided by total current liabilities, based on the Consolidated Restated Financial Statements.

FINANCIAL YEAR 2024-25 COMPARED WITH 2023-24

The Total Income for FY2024-25 has increased by 37.68% from Rs35,063.19 lakhs for FY 2023-24 to Rs48,273.88 lakhs for FY 2024-25.

Revenue from Operations

Revenue from operations has increased by 37.01% from Rs34,754.28 lakhs for FY 2023-24 to Rs47,617.53 lakhs for FY 202425. The Increase was mainly due increase in the sale of Facility Management Services and trading of Agro products during the year.

Other Income

Other Income increased from Rs308.91 lakhs for FY 2023-24 to Rs656.35 lakhs for FY 2024-25.

Cost of Materials Consumed

Cost of Materials consumed decreased from Rs11,950.51 lakhs for FY 2023-24 to Rs10,468.52 lakhs for FY 2024-25. The Cost of material consumed as a percentage of sales has decreased by 12.40% from 34.08% of Total Revenue for FY 24 to 21.69% of Total Revenue for FY 25. Which indicates the efficiency brought in by the company in the services and procurement facility.

Employee Benefit Expenses

Employee Benefit Expense has been decreased by 3.05% from Rs10,861.90 lakhs for FY 2023-24 to Rs10,530.96 lakhs for FY 2024-25 mainly due to following reasons: i) Increased Employee Productivity, ii) Process Optimization through Experience, Better Resource Allocation and Quality Improvements.

Other Expenses

Other Expenses has been increased by 41.39% from Rs9,752.25 lakhs for FY 2023-24 to Rs13,788.31 lakhs for FY 2024-25 primarily due to increase in the Operating Expense segment of the other expenses, specifically due to increase in other operating expenses from Rs9,190.32 Lakhs to Rs12,720.46 Lakhs in FY2024-25. There is also an increase in Legal and Professional expenses from Rs51.06 Lakhs to Rs425.67 Lakhs in FY 2024-25.

Depreciation & Amortization

Depreciation & Amortization expense has decreased from Rs307.87 Lakhs for FY 2023-24 to Rs210.90 Lakhs for FY 202425. The decrease was due to no such major additions in the depreciable assets..

Profit Before Exceptional Items and Tax

Profit before tax has increased by 39.99% from Rs1,802.59 lakhs for FY 2023-24 to Rs2,523.52 lakhs for FY 2024-25. The substantial increase in Profit before Tax was due to decrease in cost of raw material consumed recorded during FY 202425.

Exceptional Items

During the year, the Company recognized an exceptional item amounting to Rs844.16 lakhs, representing an additional provision for bad and doubtful debts. This provision was necessitated by the admission of one of the Companys customers into the Corporate Insolvency Resolution Process (CIRP) under the National Company Law Tribunal (NCLT), Mumbai, on August 25, 2025—subsequent to the reporting period.

Profit After Exceptional Items Before Tax

Profit before tax has decreased by 6.90% from Rs1,803.86 lakhs for FY 2023-24 to Rs1,679.36 lakhs for FY 2024-25. The decrease is due to an Exceptional item.

Tax Expense

Tax Expense has increased to Rs687.18 lakhs from Rs595.43 lakhs for FY 2024-25 to FY 2023-24. The increase in tax expense incurred was primarily due to disallowance of provision for doubtful debt of Rs844.16 lakhs in the FY25.

Profit after tax

Profit after tax has decreased by 17.91% from Rs1,208.43 lakhs for FY 2023-24 to Rs992.19 lakhs for FY 2024-25. The resultant effect was due to an exceptional item amounting to Rs844.16 lakhs, representing an additional provision for bad and doubtful debts.

Other key ratios:

Particulars	For the Financial Years ended March 31,
	2025	2024
Return on Net worth %	10.74%	14.85%
Current Ratio (times)	1.52	2.04

Return on Net worth

This is defined as Net profit after tax by Average Net worth, based on the Consolidated Restated summary statements.

Current Ratio

This is defined as total current assets by total current liabilities, based on the Consolidated Restated Summary Statements. FINANCIAL YEAR 2023-24 COMPARED WITH 2022-23

The Total Income has increased from ^31,171.44 lakhs for FY 2022-23 to Rs35,063.19 lakhs for FY 2023-24, resulting in an increase of 12.49% in FY 24 from FY 23.

Revenue from operations

Revenue from operations has increased by 12.46% from Rs30,903.86 lakhs for FY 2022-23 to Rs34,754.28 lakhs for FY 2023-24. Increase in the revenue from operations can be primarily attributable to increase in business activity post covid-19.

Other Income

Other Income has substantially increased from Rs267.58 lakhs for FY2022-23 to Rs308.91 lakhs for FY 2023-24.

Cost of Material consumed

Cost of Material consumed has increased from Rs11,546.47 lakhs for FY 2022-23 to Rs11,950.51 lakhs for FY 2023-24.

Employee Benefit Expense

Employee Benefit Expense has decreased from Rs12,500.39 lakhs for FY 2022-23 to Rs10,861.90 lakhs for FY 2023-24 primarily due to following reasons: i) Increased Employee Productivity, ii) Process Optimization through Experience, Better Resource Allocation and Quality Improvements.

Other Expenses

Other Expenses has increased during the year from Rs5,680.13 lakhs for FY 2022-23 to Rs9,752.25 lakhs for FY 2023-24 primarily due to increase in the Operating expense component which constituted Repairs & Maintenance Cost, Service defects/ Credit notes/Volume Discount, Other Operating Expenses of Rs4,795.37 lakhs during FY 23 and Rs9,190.32 lakhs during FY 24.

Depreciation & Amortization

Depreciation & Amortization has decreased from Rs431.71 lakhs for FY 2022-23 to Rs307.87 lakhs for FY 2023-24.

Profit Before Exceptional Items and Tax

Profit before exceptional items and tax has increased by 79.00% from Rs1,007.02 lakhs for FY 2022-23 to Rs1,802.59 lakhs for FY 2023-24. The substantial increase in Profit Before Tax was due to decrease in cost of goods sold recorded during FY 2023-24.

Exceptional Items

The Company recognized an exceptional item amounting to Rs1.26 lakhs in FY 2022-23 and (Rs18.69) lakhs in FY 2023-24 representing the difference in capital balances of subsidiary and in the investment balance of the holding company i.e. the issuer company.

Profit After Exceptional Items Before Tax

Profit after exceptional items and before tax has increased from profit of Rs 988.32 lakhs for FY 2022-23 to profit of Rs1,803.86 lakhs for FY 2023-24.

Tax Expense

Tax expense has increased from Rs302.93 lakhs for FY 2022-23 to Rs595.43 lakhs for FY 2023-24 primarily due to increase the

Profit before Tax for FY24.

Profit after Tax

Profit after tax has increased from Profit of Rs685.40 lakhs for FY 2022-23 to Rs1,208.43 lakhs for FY 2023-24. Other Key Ratios:

Particulars	For the Financial Years ended March 31,
	2024	2023
Return on Net worth %	14.85%	9.53%
Current Ratio	2.04	1.94

Return on Net worth

This is defined as Net profit after tax by Average Net worth, based on the Consolidated Restated summary statements.

Current Ratio

This is defined as total current assets by total current liabilities, based on the Consolidated Restated Summary Statements.

CASH FLOW

The table below summaries our cash flows from our Consolidated Restated Financial Information for five-months period ended August 31, 2025 financial years FY 2025, FY 2024 and FY 2023:

Particulars	For the five- months period ended August 31, 2025	For the Financial Years ended March 31,
		2025	2024	2023
Net cash (used in)/ Generated from operating activities	(460.56)	(2,243.36)	94.64	(167.19)
Net cash (used in)/ Generated from investing activities	(4,199.75	(1,145.54)	(2,151.04)	(1,411.95)
Net cash (used in)/ Generated from finance activities	4,814.42	3,668.36	469.18	1,899.97

Cash flow from operating activities:

Five months Ended August 31, 2025

Net cash (used in) operating activities: Rs (461.19) lakhs

The Net cash used in operating activities for the five months ended August 31, 2025 is Rs (460.56) lakhs, which consisted of Operating Profit before Working Capital Changes of Rs2,144.86 lakhs, adjusted primarily for:

Non-cash and other adjustments

I. Depreciation and amortization expense - Rs302.25 lakhs

II. Finance costs - Rs400.09 lakhs

III. Profit on sale of property, plant & equipment - Nil

IV. Interest income - (Rs210.20) lakhs

V. Rent income - (Rs32.48) lakhs

VI. Dividend income - (Rs0.55) lakhs

VII. Amounts no longer payable written back - (Rs79.26) lakhs This results in total adjustments of Rs379.83 lakhs.

Working Capital Changes:

During the period, there was an increase in Inventories of Rs164.75 lakhs, an increase in Trade Receivables of Rs286.11 lakhs, and a significant increase in Loans and Advances of Rs2,894.72 lakhs. Further, there was a decrease in Other Assets of Rs49.77 lakhs, an increase in Trade Payables of Rs60.75 lakhs and an increase in Liabilities and Provisions of Rs909.03 lakhs. These movements collectively resulted in a net negative impact on operating cash flows.

For the year ended 31^st March 2025

Net cash (used in) operating activities: Rs (2,243.36) lakhs

The Net cash used in operating activities for FY 2025 is Rs (2,243.36) lakhs, derived from Operating Profit before Working Capital Changes of Rs3,099.08 lakhs, adjusted mainly for:

Non-cash and other adjustments

I. Depreciation and amortization expense - Rs210.90 lakhs

II. Finance costs - Rs1,002.94 lakhs

III. Interest income - (Rs459.12) lakhs

IV. Rent income - (Rs10.56) lakhs

V. Profit on sale of equity shares - (Rs88.83) lakhs

VI. Provision for doubtful debts - Rs844.16 lakhs

VII. Bad debts - Rs16.03 lakhs

VIII. Amounts no longer payable written back - (Rs60.77) lakhs

IX. Profit on Sale of PPE - (Rs35.65) lakhs

Total adjustments equal Rs1,419.71 lakhs.

Working Capital Changes:

During FY 2025, working capital adjustments included an increase in Inventories of Rs72.77 lakhs, a sharp increase in Trade Receivables of Rs4,159.44 lakhs, and a decrease in Loans and Advances of Rs52.14 lakhs. There was an increase in Other Assets of Rs864.56 lakhs, an increase in Trade Payables of Rs57.30 lakhs, and an increase in Liabilities and Provisions of Rs30.47 lakhs. The substantial rise in Trade Receivables and Other Assets primarily contributed to negative operating cash flow.

For the year ended 31^st March 2024

Net cash generated from operating activities: Rs94.64 lakhs

The Company generated Rs94.64 lakhs of operating cash flow in FY 2024 from Operating Profit before Working Capital Changes of Rs2,421.61 lakhs, primarily influenced by:

Non-cash and other adjustments

I. Depreciation and amortization expense - Rs307.87 lakhs

II. Finance costs - Rs377.24 lakhs

III. Profit on sale of property, plant & equipment - Nil

IV. Interest income - (Rs246.62) lakhs

V. Rent income - (Rs11.70) lakhs

VI. Dividend income - Nil

VII. Profit on sale of equity shares - (Rs47.65) lakhs

VIII. Prior period adjustments - Nil

IX. Provision for doubtful debts - Rs65.13 lakhs

X. Bad debts - Rs173.48 lakhs

XI. Amounts no longer payable written back - Nil Total adjustments amount to Rs617.75 lakhs.

Working Capital Changes:

Working capital movements during FY 2024 included a decrease in Inventories of ?45.31 lakhs, a decrease in Trade Receivables of ?283.71 lakhs, and an increase in Loans and Advances of ?1,566.92 lakhs. Further, there was an increase in Other Assets of ?177.46 lakhs, a decrease in Trade Payables of ?532.71 lakhs, and an increase in Liabilities and Provisions of ?134.86 lakhs. The increase in Loans and Advances and decline in Trade Payables offset the favourable movements in Receivables and Inventories.

For the year ended 31^st March 2023

Net cash (used in) operating activities: ?(167.19) lakhs

The Net cash used in operating activities for FY 2023 is Rs(167.19) lakhs, based on Operating Profit before Working Capital Changes of Rs1,490.06 lakhs, adjusted for:

Non-cash and other adjustments

I. Depreciation and amortization expense - Rs431.71 lakhs

II. Finance costs - Rs305.86 lakhs

III. Profit on sale of property, plant & equipment - Nil

IV. Interest income - (Rs239.44) lakhs

V. Rent income - (Rs10.32) lakhs

VI. Dividend income - Nil

VII. Profit on sale of equity shares - Nil

VIII. Prior period adjustments - Nil

IX. Provision for doubtful debts - Rs18.85 lakhs

X. Bad debts - Rs8.53 lakhs

XI. Amounts no longer payable written back - (Rs13.46) lakhs Total adjustments equal Rs501.74 lakhs.

Working Capital Changes:

During FY 2023, the Company experienced an increase in Inventories of Rs482.75 lakhs, an increase in Trade Receivables of Rs261.62 lakhs, and an increase in Loans and Advances of Rs129.86 lakhs. This was partly offset by a decrease in Other Assets of Rs125.56 lakhs. Additionally, there was a decrease in Trade Payables of Rs3.30 lakhs and a decrease in Liabilities and Provisions of Rs677.09 lakhs. These movements collectively contributed to negative operating cash flow for the year.

Cash flow from Investing Activities:

Five Months Ended August 31, 2025

The Company reported net cash used in investing activities of Rs4,199.75 lakhs. This outflow was primarily on account of purchase of property, plant and equipment (including CWIP) amounting to Rs2,830.20 lakhs, investment in equity shares of Rs545.33 lakhs, fixed deposits placed amounting to Rs900.68 lakhs, and long-term advances given of Rs261.86 lakhs. These outflows were partially offset by interest received of Rs210.20 lakhs, rent received of Rs32.48 lakhs, dividend income of Rs0.55 lakhs, and capital reserve receipt of Rs95.09 lakhs.

Financial Year Ended March 31, 2025

The Company recorded net cash used in investing activities of Rs1,145.54 lakhs during FY 2025. The primary outflows consisted of purchase of property, plant and equipment (including CWIP) of Rs377.76 lakhs, fixed deposits invested of Rs1,488.05 lakhs, and investment in equity shares of Rs19.17 lakhs. These were partly offset by interest received of Rs459.12 lakhs, rent received of Rs10.56 lakhs, and receipt of long-term advances amounting to Rs224.75 lakhs.

Financial Year Ended March 31, 2024

The Company reported net cash used in investing activities of Rs2,151.04 lakhs for FY 2024. This primarily comprised purchase of property, plant and equipment (including CWIP) of Rs837.93 lakhs, fixed deposits invested of Rs2,031.71 lakhs, and investment in equity shares of Rs37.46 lakhs. These outflows were partly offset by interest received of Rs246.62 lakhs, rent received of Rs11.70 lakhs, dividend income of Rs0.00 lakhs, and proceeds from the sale of property, plant and equipment of Rs7.90 lakhs.

Financial Year Ended March 31, 2023

During FY 2023, the Company recorded net cash used in investing activities of Rs1,411.95 lakhs. The main outflows consisted of purchase of property, plant and equipment (including CWIP) of Rs128.23 lakhs, fixed deposits invested of Rs1,399.92 lakhs, investment in equity shares of Rs35.71 lakhs, and long-term advances given of Rs97.84 lakhs. These were partially offset by interest received of Rs239.44 lakhs and rent received of Rs10.32 lakhs.

Cash flow from Financing Activities:

Five Months Ended August 31, 2025

The net cash generated from financing activities amounted to Rs4,814.42 lakhs. This inflow was primarily driven by the issue of equity shares including securities premium of Rs2,023.91 lakhs, along with a net availment of short-term borrowings amounting to Rs1,951.00 lakhs and a net availment of long-term borrowings of Rs1,239.60 lakhs. These inflows were partly offset by interest paid of Rs400.09 lakhs during the period. The increase in both short-term and long-term borrowings indicates reliance on external financing to support business expansion and working capital needs.

Financial Year Ended March 31, 2025

The Company reported net cash generated from financing activities of Rs3,668.36 lakhs during FY 2025. The positive cash flow was primarily supported by a net availment of short-term borrowings of Rs4,760.62 lakhs. This was offset by a net repayment of long-term borrowings amounting to Rs89.32 lakhs and interest paid of Rs1,002.94 lakhs. The strong inflow from short-term borrowings underscores continued dependence on short-duration credit facilities for operational funding requirements.

Financial Year Ended March 31, 2024

For FY 2024, the Company generated net cash from financing activities of Rs469.18 lakhs. This was primarily attributable to a net availment of long-term borrowings of Rs80.84 lakhs and a net availment of short-term borrowings of Rs765.59 lakhs. These inflows were partially offset by interest paid of Rs377.24 lakhs. The movement indicates moderate utilisation of both long-term and short-term borrowing facilities to fund business operations.

Financial Year Ended March 31, 2023

During FY 2023, the Company generated net cash from financing activities of Rs1,899.97 lakhs. The inflows were mainly driven by a net availment of short-term borrowings of Rs1,613.66 lakhs and a net availment of long-term borrowings of Rs592.17 lakhs. These were partly offset by interest paid of Rs305.86 lakhs. The financing pattern reflects utilisation of borrowings as a key source of funding for business activities in this period.

OTHER FACTORS

An analysis of reasons for the changes in significant items of income and expenditure is given hereunder:

1. Unusual or infrequent events or transactions

There has not been any unusual trend on account of our business activity. Except as disclosed in this Red Herring Prospectus, there are no unusual or infrequent events or transactions in our Company.

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

There are no significant economic changes that may materially affect or likely to affect income from continuing operations.

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 "Risk Factors" beginning on page 38 of the 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 sections "Risk Factors", "Our Business" and "Managements Discussion and Analysis of Financial Position and Results of Operations" on pages 38, 178 and 315 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. Total turnover of each major industry segment in which our Company operates

We currently operate in the Integrated financial management and other support services segments. For details on revenue break-up from each segment, kindly refer the chapter titled "Our Business" beginning on Page 178. Relevant industry data, as available, has been included in the section titled "Industry Overview" beginning on page 124 of this Red Herring Prospectus.

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

Except as disclosed in the Section "Our Business", our Company has not announced any new product or services.

7. Seasonality of business

Our Companys business is not seasonal in nature.

8. Dependence on single or few customers or suppliers

The revenue of our company is dependent on a few limited numbers of customers.