Creative Newtech Ltd Management Discussions

Forwardlookingstatement

Statements in this Management Discussion and Analysis of Financial Condition and Results of Operations of the Company describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations. Forward looking statementsarebasedoncertainassumptionsandexpectationsoffutureevents.

The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company assumes no responsibility to publicly amend, modify or revise forward looking statements, on the basis of any subsequent developments, information or events. Actual results may differ materially from those expressed in the statement. Important factors that could influence the

Companys operations include changes in government regulations, tax laws, economic developments withinthecountryandsuchotherfactorsglobally.

The financial statements are prepared under historical cost convention, on accrual basis of accounting, and in accordance with the provisions of the Companies Act, 2013 (the Act) and comply with the Indian Accounting Standards as pronounced by the Institute of Chartered Accountants of India (ICAI) from time to time. The Management of Creative Newtech Limited has used estimates and judgments relating to the financial statements on a prudent and reasonable basis, in order that the financial statements, reflect in a true and fair manner, the state of affairs and profitfor the year.

The following discussions on our financial condition and result of operations should be read together with our audited financial statements and the notes to these statements included in the annual report. Unless otherwise specified or the context otherwise requires, all references here in to "we", "us", "our", "the Company", "Creative" are to "Creative Newtech Limited".

INDUSTRY OVERVIEW

Global Information Technology Market Overview

The global information technology (IT) market continued its growth momentum, expanding from USD 8.92 trillion in 2024 to an estimated USD 9.61 trillion in 2025, at a CAGR of 7.7%. The market is expected to cross USD 13 trillion by 2029, supported by accelerating digital transformation, rapid adoption of AI-driven technologies, and the development of smart city ecosystems. This growth reflectsthe increasing globalization of IT services, rising enterprise investments in cybersecurity, and the steady evolution of e-commerce and connected platforms.

Key industry trends shaping this growth include the mainstreaming of hybrid work, rapid cloud adoption, the integration of AI in business processes, and the growing emphasis on sustainable IT practices. The expanding role of the Internet of Things (IoT) is also expected to be a major driver, as connected devices create demand for the infrastructure, connectivity, and analytics capabilities that underpin digital ecosystems. These trends not only define the future of the IT industry but also open avenues for companies like Creative Newtech, which bridge global brands and fast-evolving consumer and enterprise markets.

The COVID-19 pandemic initially acted as a restraint on the IT market in 2020, disrupting supply chains and accelerating the global shift to remote working. However, by FY24–25 the industry has transitioned far beyond recovery. What began as a reactive digital adoption has matured into resilient hybrid and digital-first operating models, now reinforced by enterprise-wide investments in generative AI, advanced cybersecurity, and cloud-native infrastructure. The lessons of the pandemic continue to influence strategy, with businesses prioritizing agility, digital resilience, and future-ready technology frameworks.

Over the past year, the IT industry has also witnessed a new wave in the evolution of open-source platforms. No longer limited to being cost-efficient alternatives, they have become the backbone of AI-driven innovation, edge computing, and multi-cloud ecosystems. Leading enterprises are increasingly adopting open-source frameworks to build scalable AI models, drive interoperability across platforms, and accelerate time-to-market. This shift is complemented by a rising emphasis on sustainable IT practices, with open-source solutions enabling energy-efficient architectures and greener technology adoption, reinforcing competitiveness in a digitally and environmentally conscious world.

Regionally, Asia-Pacific remained the largest IT market in 2024, followed by North America, reflecting high levels of digitalization, AI adoption, and cloud investments. Other regions, including Western Europe, Eastern Europe, South America, the Middle East, and Africa, are also demonstrating steady growth, underscoring the truly global nature of digital transformation.

Source: https://www.researchandmarkets.com/reports/5781249/information-technology-market-report www.thebusinessresearchcompany.com/report/information-technology-global-market-report www.globalgrowthinsights.com/market-reports/information-technology-market-101192 www.techradar.com/pro/global-ai-adoption-to-push-it-spending-beyond-usd5-4-trillion-in-2025 www.investopedia.com/data-center-software-spending-ai-8678734

Global Computer Hardware Market Overview

Computer hardware, including peripherals, storage devices, servers, and processing units, remains the foundation of digital infrastructure. The global market is projected to grow from USD 714.77 billion in 2024 to USD 760.98 billion in 2025, representing a CAGR of 6.5%. Over the longer term, its expected to reach USD 972.16 billion by 2029, with a CAGR of 6.3%, driven by growth in remote working infrastructure, smart cities, and increased emphasis on sustainable hardware solutions.

Key industry trends include the rise of edge computing, integration of AI and machine learning, modular and upgradable systems, biometric security, and hybrid or multi-cloud setups. Market expansion is further supported by IT infrastructure demand and urban digitization efforts. Regionally, North America remains the largest market, while Asia-Pacific enjoys rapid growth thanks to expanding manufacturing capabilities and increasing consumer demand.

Source: www.researchandmarkets.com/reports/5781320/computer-hardware-market-report

Indian Industry Overview

Indias IT sector reaffirmed its role as a key engine of economic growth in FY24 25. According to

NASSCOMs Strategic Review 2025, the industry generated USD 282.6 billion in revenue in FY25, marking a 5.1% year-on-year increase, and is projected to surpass the USD 300 billion mark in FY26.

Exports remain the backbone of the sector, with IT exports reaching USD 224 billion in FY25, reflecting a strong 12.5% growth, a sharp acceleration from the 2.8% growth seen the previous year. Domestic revenue also displayed strong momentum, growing faster than exports in FY25 at approximately 7% versus 4.6%, pushing domestic receipts to an estimated USD 58.2 billion.

Looking back, the industrys rise is evident: from USD 118 billion in FY15 to a projected USD 283 billion in FY25, driven by dynamic exports, sustained FDI inflows, and government-led digital initiatives.

At the same time, India continues to build technological capability at scale, with the IT-BPM sector contributing 7.4% of GDP in FY22 and maintaining one of the largest global workforces.

Indias export strength also resonates in broader services trade. Total services exports are estimated at USD 388 billion in FY25, a healthy 13.6% year-on-year rise, contributing significantly to Indias record

USD 825 billion in overall exports for the year.

Beyond numbers, the country is actively shaping the future of tech. India is fostering AI and infrastructure growth through initiatives like the Indias AI Mission and an expanding data-center footprint, enabling rapid scaling of cloud, digital services, and AI capabilities.

Sources: https://nasscom.in/knowledge-center/publications/technology-sector-india-strategic-review-2025 https://www.business-standard.com/industry/news/indian-tech-sector-fy25-revenues-to-grow-5-1-to-282-6-billion-nasscom-125022400454_1.html https://economictimes.indiatimes.com/tech/technology/it-exports-climb-12-5-to-224-billion-in-fy25-meity/articleshow/123150339.cms https://www.telegraphindia.com/business/it-industry-body-nasscom-pegs-fy25-revenues-for-sector-to-grow-5-1-to-usd-282-6-billion/cid/2085404 https://www.ibef.org/news/india-s-information-technology-it-industry-registers-significant-growth-in-last-decade-projected-to-reach-rs-24-29-838-crore-us-283-billion-in-fy25 https://www.ibef.org/news/total-exports-jump-to-rs-69-11-025-crore-us-825-billion-in-fy25-as-services-shipments-rise-over-13 https://www.ft.com/content/e7ea1d50-37ee-40e5-9794-b1ec05f906e1

Brand Licensing Market Overview

Brand licensing, the practice of leasing intangible assets such as trademarks or characters to a third party in exchange for royalties, continues to gain traction as a strategic tool for revenue generation and brand extension. The global brand licensing market was valued at approximately USD 351.1 billion in 2024 and is projected to grow to USD 367.4 billion in 2025, expanding further to USD 512.7 billion by 2033 at a CAGR of around 4.3% from 2025 to 2033. Growth is being driven by rising consumer demand for authentic, branded merchandise across apparel, entertainment, fashion, and other categories, as well as the increasing digitization of licensing models. North America currently dominates the global landscape, while emerging markets, particularly in Asia-Pacific, show strong potential for future expansion.

In India, brand licensing is witnessing heightened interest amid the nations ascent as the worlds third-largest consumer market. Licensing now serves as a powerful mechanism for global brands to monetize intellectual property locally while navigating cultural, regulatory, and demographic dynamics. Licensing is increasingly leveraged not just for traditional categories like fashion and entertainment but also for digital collaborations, celebrity partnerships, and sustainable branding initiatives. Sources: https://www.proficientmarketinsights.com/market-reports/brand-licensing-market-2482 https://www.businessresearchinsights.com/market-reports/brand-licensing-market-100200 https://www.thewebwires.com/branding-and-licensing-trends-to-watch-in-india-for-2025

About Creative Newtech Limited

Established in 1992, Creative Newtech Ltd is a well-established company in Indias Information and Communication Technology distributionmarket. Through a robust network of partners and distribution channels, the Company has made a strong foothold in the IT distribution market in the country. The

Company has an omni-channel networkacross all three channels of online, offline and retail trade.

Creative Newtech specializes in market entry and penetration for global brands. The Company offers demographic intelligence, and enables the formulation and execution of marketing strategies for its clients. In addition to such services, Creative continues to focus on timely delivery, diversification of its product portfolio, sustained long-term relationships with its channel partners, and extending value- addedservicesoverandabovedistribution.

These efforts have enabled the Company to win long running contracts as well as garner accolades in the Industry as amongst the best distributors in India by leading brands. Creative is associated with over 25+ renowned brands globally. These brands encompass a wide range of applications and help the Company to cater to a broad array of customers, both in the consumer and industrial businesses. Moreover, the Company is well-positioned to leverage the changing trends in the technology industry and be a part of the paradigm shift towards digitization in India.

Creative has a unique value-added business model. They provide end-to-end solutions, from market research and competition analysis for brands, to import, distribution, sales and servicing for the brand Additionally, the Company suggests and executes marketing strategies and recommends viability in specific regions across India for their clients. This is enabled by specialized skill sets, local insights and experience, along with relevant market intelligence. Creative also prepares strategic plans for market entry for foreign brands and their target category.

Furthermore, the Company conducts pre-sales and marketing activities for the success of the brand as well as to enable the channel partners to leverage their expertise and bottom line. Creative works closely with partners across channels including Large Format Retail (LFR), e-commerce and specialized retailers. The Company is one of the few large distributors who conduct specialized training modules, events and promotional activities at the ground level with channel partners. They also conduct workshops and demos for resellers. This is possible due to the dedication and experience of the corporate and sales teams which constantly track latest market developments to build a closer market connect.

The Companys wide reach and superior logistics capabilities helps it provide end-to-end services including warranty and post-warranty, high-level repair services, and response centres, among others.

Such expertise and superior quality of service has led to increased confidence of brands, many of which have chosen Creative as exclusive partners and have been with the Company since over five years. The Company focuses on higher operational efficiencies and adding higher-margin and value- added products to its existing product portfolio and such brand associations are a concrete step in that direction.

Vendor	Product Category
AOC	Monitors & TV
Dahua Technology	Monitors & IFPs
POLYCAB	Fans, Light Bulbs etc.
COOLER MASTER	PC Casing and Cooling products
CRICUT	Craft and cutting products
HONEYWELL	Air Purifiers, Home Audio, Laptop Enhancement & Mobility products, Struc - tured Cabling Systems
LEXAR	Storage/Memory cards
Holoware	Laptops and Desktops
iBall	Computers & accessories
INSTAX FUJIFILM	Cameras
RAZER	Gamingproducts
Ruark	Audioproducts–speakers
OM systems	Cameras, Lenses, Binoculars
PHILIPS	SIGNAGE Monitors
PNY	GraphicsCardsandSSDs
pTron	Audioentertainment–earphones
SAMSUNG	Monitors
TRANSCEND	Memory, Storage
VIEWSONIC	Projectors, 3D Glass
TrueSense	TV
Rapoo	Computers & accessories
Panzer Glass	Premium Mobile Covers and Accessories
Dustor	Robotic Cleaner
Samsung CE	Consumer Electronics
Aabo Ring	Smart Ring
Nokia	Mobile Phones

FINANCIAL OVERVIEW

The consolidated financial performance of the Company for the financial year ended March 31st, 2025, is as follows: Total income stood at Rs. 1,801.47 crore for the year ended March 31, 2025, as against Rs. 1,740.91 crore for the corresponding previous period, an increase of 3.48%, mainly on account of strong sales driven by FMSG and EB product segments. Strong demand from brands such as Honeywell, Samsung, Cooler Master, ViewSonic, Iball to name a few who supported growth.

The cost of goods sold rendered for the financial year ended March 31, 2025 was Rs 1,625.85 crore as against Rs 1,599.09 crore for the corresponding previous period, an increase of 1.67%.

The staff expenses for the financial year ended March 31, 2025 were Rs 18.24 crore as against Rs. 15.71 crore for the corresponding previous period, an increase of 16.12%.

March 31, 2025 were Rs. 83.99 crore as against Rs 56.89 Theotherexpensesforthe crore for the corresponding previous period, an increase of 47.63%.

The EBIDTA (earnings before interest, depreciation and tax) (after considering loss of associate company) was Rs. 72.86 crore for the year ended March 31, 2025, as against Rs. 69.22 crore for the corresponding previous period, an increase of 5.27%.

The depreciation for the financial year ended March 31, 2025 was Rs. 1.16 crore, as against Rs. 1.33 crore for the corresponding previous period.

The interest for the financial year ended March 31, 2025 was Rs. 10.16 crore as against Rs. 9.66 crore for the corresponding previous period.

31, 2025, as against Rs. 48.25 crore ThePAT(profit for the corresponding previous period, a growth of 10.07%.

EPS was Rs. 32.18 for the year ended March 31, 2025, as against Rs. 32.58 for the corresponding previous year, decrease by 1.23%.

RESOURCES AND LIQUIDITY

As on March 31, 2025, the consolidated net worth stood at Rs. 309.26 crore and the consolidated debt was atRs.71.80crore.

The cash, cash equivalents and bank balances at the end of March 31, 2025 were Rs. 55.23 crore.The net debt to equity ratio of the Company stood at 0.23 as on March 31, 2025.

BUSINESS CATEGORY WISE PERFORMANCE

Creative Newtech operates in four broad product categories: distribution of fast moving social media gadgets (FMSG), fast moving consumer technology (FMCT), fast moving electronics goods (FMEG) and Enterprise business (EB).

The Company is performing well in all the categories and expects the momentum to continue in next financial year. Below is the consolidated performance:

1. Fast Moving Social Media Gadgets (FMSG)

Creative offers a broad range of products driven by social media penetration, which are targeted for the young and aspirational demographic. These cover imaging, lifestyle and gaming categories, amongothers.SomeofthekeybrandsunderthissegmentincludeHoneywell,CoolerMaster,Cricut,OM

Systems, Instax Fujifilm etc. FMSG contributed 21.72%to the total revenue in FY25.

2. Fast Moving Consumer Technology (FMCT)

This category encompasses a range of high-volume IT products. Some of the key brands under this segment are Samsung, Viewsonic, Rapoo, iBall etc. This category contributed 10.26% to revenue in FY25.

3. Fast Moving Electronics Goods (FMEG)

This segment covers high volume electrical products such as lights, bulbs, fans and small domestic appliances from well-established household brands such as Polycab. This category contributed 0.06% to revenue in FY25.

4. Enterprise Business (EB)

The Enterprise business comprises of products which are supplied primarily to large corporates and enterprises. Some major brands in this category include AOC, Philips and retail security specialist InVue. Revenue from this segment comprised 67.96% of total revenue in FY25.

BUSINESSES DEVELOPMENTS DURING THE YEAR:

Creative Newtech launched Ruarks R610 Console and Sabre-R Speakers in India, marking its strategic entry into the premium audio category. The brands presence was further reinforced through a retail partnership with Boomarang Hi-Fi in Mumbai, aligning with our focus on high-margin, design-led consumer segments.

Creative Newtech introduced the OM System OM-3, combining computational photography with all-weather durability for professional creators. The OM-5 was positioned as a rugged, monsoon-ready mirrorless camera, tailored for Indian outdoor conditions and content-driven users.

Entered Quick Commerce platforms (Blinkit, Zepto, Swiggy Instamart), strengthening digital retail footprint and enabling faster availability of partner brands in high-demand markets.

Creative Newtech entered into a strategic partnership with Rapoo to introduce a global range of computer peripherals, strengthening presence in the hybrid work and gaming ecosystems.

Creative Newtech entered into a strategic partnership with Panzer Glass to bring premium device protection solutions to the Indian market, enhancing participation in the device care segment.

Creative Newtech entered into a strategic partnership with MyFirst to launch child-focused technology products, marking entry into the innovation-led kids category.

Creative Newtech expanded its presence in Southeast Asia with brand launches and dedicated teams across Singapore, Vietnam, Philippines, Indonesia, and Thailand.

Creative Newtech strengthened its Middle East footprint with strategic launches and teams in Turkey and Saudi Arabia, marking entry into dynamic markets at the crossroads of innovation and global trade.

RISKS AND CONCERNS

Like every business, the Company faces risks, both internal and external, in the undertaking of its day- to-day operations and in pursuit of its longer-term objectives. A detailed policy drawn up and dedicated risk workshops are conducted for each business vertical and key support functions wherein risks are identified, assessed, analyzed and accepted / mitigated to an acceptable level within the risk appetiteof theorganization.Theriskregistersarealsoreviewedfromtimetotime.

The Company faces the following Risks and Concerns:

Rapid Obsolescence of Technology & Change in Consumer Preferences

A technology business is always exposed to sudden and unanticipated changes in technology and consumer trends and preferences. This exposes the company to the risk of becoming uncompetitive in terms of product/services offering to the customers. There is a need to constantly upgrade the product and service portfolio (e.g. Cloud, IoT, Mobility Analytics, etc.), and stay on top of changing consumer preferences.

Credit Risk

To manage its credit exposure, Creative Newtech has determined a credit policy with credit limit requests and approval procedures. Company does its own research of clients financial health and project prospects before entering into an agreement with them. Timely and rigorous process is followed up with clients for payments as per schedule. The company has suitably streamlined the process to developafocusedandaggressivereceivablesmanagementsystemtoensuretimelycollections.

Interest Rate Risk

The Company has judiciously managed the debt-equity ratio. It has been using a mix of loans and internal cash accruals to mitigate the interest rate risk.

Competition Risk

Like in most other industries, strong scope of opportunities come with intense competition. We face different levels of competition in each of our operating categories, from domestic as well as multinational companies. Creative has created strong differentiators in project execution, portfolio, level on involvement in marketing and delivery, which make it resilient to competition. Furthermore,the Company continues to invest in technology and people to remain ahead of the curve. A strong andstable client base, comprising large and mid-sized corporations, further helps mitigate this risk. Wecounter this risk with the quality of our infrastructure, our customer-centric approach, value-addedservices and our ability to innovate customer specific solutions, focusing on pricing and aggressive marketing strategy, disciplined project executions, along with prudent financial and human resourcesmanagement and better control over costs. Thus, we expect to be significantlyinsulated from this risk.

OPPORTUNITIES

Large and Growing Market: India has a massive consumer base with a rapidly increasing number of internet users, making it an attractive market for consumer electronics and connected devices.

Increasing Digital Penetration: The widespread adoption of smartphones and affordable internet accesshasledtoasurgeinonlineshopping.

Rising affordability among younger demographic: There is a notable increase in disposable incomes amongyoungerpopulation,spurringthedemandforsuchproducts.

Convenience and Accessibility: E-commerce platforms provide convenience to consumers by allowingthemtoshopfromanywhereatanytime.

Wide Product Range: Various platforms in India offer a wide variety of products, including both local and international brands, catering to diverse consumer preferences.

Distribution agreements with renowned brands: An increasing number of international brands want to come to India to tap into the market potential. Such brands typically want ready and modern distribution system covering the geographical territories of the country and serving customers on a pan-India basis, which will grow their brand quicker.

THREATS

Competition from local and multinational players

Offline retail competition

Regulatory changes including unfavorable tax changes or import regulations.

Attraction and retention of talented human resources

Frequent and rapid technological advancements leading to early obsolescence of products in inventory

Over-dependence on few brands which account for majority revenue

INTERNAL CONTROL SYSTEMS AND ADEQUACY

The Company has an internal audit function designed to review the adequacy of internal control checks in the system which covers all significant areas of procurement, business operations, statutory compliances, IT processes, safeguarding the assets and their protection against unauthorized use, among others. The Internal Audit function performs the internal audit of Companys activities based on an internal audit plan, which is reviewed each year and is approved by the Board of Audit Committee. The Audit Committee reviews the report submitted by the internal auditors. Suggestions for improvement are considered and the auditcommittee follows up on corrective action. Disciplinary action is taken, wherever required, for non- compliance to corporate policiesandcontrols.

The Company has also implemented effective systems for achieving highest level of efficiency in operations, to achieve optimum and effective utilization of resources, monitoring thereof and the compliance with provisions all laws including the Companies Act, 2013, Listing Agreement, directions issuedbytheSecuritiesandExchangeBoardofIndia,labourlaws,taxlawsetc.Italsoaimsatimprovement in financial management, and investment policy. The System ensures appropriate information flow to facilitateeffectivemonitoring.

HUMAN RESOURCES

We believe that our employees are key contributors to our business success. We focus on attracting and retaining the best possible talent. Our Company looks for specific skill-sets, interests and background thatwouldbeanassetforourbusiness.

As on 31^st March 2025, the Company, along with its group and subsidiary companies, had over 370+ employees. The manpower is a prudent mix of experiencedandyoungprofessionalswhichgivesusthedualadvantage of stability and growth. The work progress and skilled/ semi-skilled/ unskilled resources, together with the Companys strong managementteam,haveenabledittosuccessfullyimplementourgrowthplans. The Company also imparts behavioral, technical and on the job training to our employees. Technical trainings are mandated by the vendor whenever the employees have to deal with pre-technical or post technical issues. Training calendars are set by the vendors and nominated employees from our Company attend the program and obtain feedback on the completion of the program.

OUTLOOK

As we move into FY25 26, Creative Newtech is entering a definingchapter of its growth journey. The industrys accelerated shift toward digital lifestyles, gaming, creator-led content, and hybrid work ecosystems presents opportunities to move beyond distribution and into higher-value, brand-led businesses. This evolution is central to our strategy of transitioning towards a high-margin, value-driven model.

The Company will continue to strengthen its licensing portfolio, leveraging the Honeywell brand across APAC, the Middle East, and Africa, while scaling new opportunities such as CyberPower PC in high-performance computing. At the same time, Creative will expand its role as a brand enabler by incubating new categories, launching proprietary labels, and deepening its presence in lifestyle, gaming, and child-focused technology segments. These categories not only offer strong growth potential but also align with shifting consumer preferences.

International expansion remains a key pillar of growth. Building on its foothold in Southeast Asia and the Middle East, Creative will deploy local teams, bonded warehousing, and technology-driven demand planning to create a resilient and scalable platform across high-potential regions. Domestically, the

Company will enhance its omni-channel presence and strengthen its digital-first distribution model by expanding reach through e-commerce and quick-commerce channels, improving accessibility for partner brands and end consumers alike.

Underlying this growth trajectory is Creatives focus on building long-term value responsibly. With ESG as an integral part of its vision, the Company is working towards eco-friendly operations, inclusive growth, and technology-led efficiencies that balance profitability with sustainability.

With a robust financial foundation, proven execution capabilities, and a clear roadmap for transformation, Creative Newtech enters FY25 26 with confidence. The Company is poised to deliver sustainable growth, expand its role as a platform and brand enabler, and continue its journey toward becoming the innovation engine of tomorrows global consumer technology ecosystem.