CSM Technologies Ltd Management Discussions

The following discussion is intended to convey managements perspective on our financial condition and results of operations for Fiscals 2025, 2024 and 2023. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our Restated Consolidated Financial Information as of and for Fiscals 2025, 2024 and 2023, including the related annexures on page 284. This Draft Red Herring Prospectus may include forward-looking statements that involve risks and uncertainties, and our actual financial performance may materially vary from the conditions contemplated in such forward-looking statements as a result of various factors, including those described below and elsewhere in this Draft Red Herring Prospectus. For further information, see ‘Forward-Looking Statements on page 28.

Unless otherwise indicated or context otherwise requires, the financial information for Fiscals 2025, 2024 and 2023 is derived from the Restated Consolidated Financial Information, included in this Draft Red Herring Prospectus.

For further information, see "Restated Consolidated Financial Information " and "Summary Financial Information " on pages 284 and 90. Our Fiscal year ends on March 31 of each year. Accordingly, all references to a particular Fiscal are to the 12-month period ended March 31 of that year.

The industry-related information contained in this section is derivedfrom the industry report titled "Research Report on IT/ITes Industry dated September 17, 2025prepared by CARE (the "CARE Report") and CARE was appointed by our Company pursuant to engagement letter dated March 11, 2025. A copy of the CARE Report is available on the website of our Company at www.csm.tech. We commissioned and paid for the CARE Report for the purposes of confirming our understanding of the industry specifically for the purpose of the Issue, as no report is publicly available which provides a comprehensive industry analysis, particularly for our Companys services, similar to the CARE Report. CARE is an independent agency and is not a related party of our Company, its Directors, Promoters, Promoter Group, Key Managerial Personnel, Senior Management or the Book Running Lead Manager.

We have included certain non-GAAP financial measures and other performance indicators relating to our financial performance and business in this Draft Red Herring Prospectus, each of which is a supplemental measure of our performance and liquidity and not required by, or presented in accordance with, Ind AS, Indian GAAP, IFRS or U.S. GAAP. Furthermore, such measures and indicators are not defined under Ind AS, IFRS, U.S. GAAP or other accounting standards, and therefore should not be viewed as substitutes for performance, liquidity or profitability measures under such accounting standards. In addition, such measures and indicators, are not standardised terms, hence a direct comparison of these measures and indicators between companies may not be possible. Other companies may calculate these measures and indicators differently from us, limiting their usefulness as a comparative measure. Although such measures and indicators are not a measure of performance calculated in accordance with applicable accounting standards, our Companys management believes that they are useful to an investor in evaluating our operating performance. For risks relating to such non-GAAP measures, see "Risk Factors - 63. We have in this Draft Red Herring Prospectus included certain non-GAAP financial measures and certain other industry measures related to our operations and financial performance. These non-GAAP measures and industry measures may vary from any standard methodology that is applicable across the Indian IT industry, and therefore may not be comparable with financial or industry related statistical information ofsimilar nomenclature computed and presented by other companies. " on page 79.

This discussion contains forward-looking statements that involve risks and uncertainties and reflects our current view with respect to future events and financial performance. Actual results may differ from those anticipated in these forward-looking statements as a result of factors such as those set forth under "Forward-Looking Statements" on pages 28. The following discussions on our financial condition should be read in conjunction with ‘Risk Factors and ‘Our Business, on pages 42 and 216, respectively.

Business Overview

For details in relation to our business overview, see "Our Business-Overview" on page 216.

Significant Factors Affecting our Financial Condition and Results of Operations

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

Ability to enhance operating efficiency through investments in technology

As emerging technologies like AI and blockchain evolve rapidly, customers expect continuous innovation. IT companies like CSM, need to constantly invest in R&D to provide cutting-edge solutions, which can strain resources. Clients across various industries expect highly tailored solutions. Developing customized solutions that address the unique needs of each industry or client requires significant investment in R&D and client-specific consultations (Source: CARE Report). Our results of operations have been, and will continue to be, affected by our ability to improve our operating efficiency, especially through investment in technology. As our business continues to grow, it is essential to improve operating efficiency to maintain the competitiveness of our platform.

We intend to continue to design and develop customised solutions tailored to the specific needs, operational processes, and regulatory environments of each industry and client. This often necessitates significant investment in research and development, detailed client-specific consultations, and iterative solution design. Such engagements typically involve longer lead times, higher upfront costs, and allocation of specialised resources, without any assurance that the client will ultimately award the project or that the solution will achieve the desired outcomes.

The table below sets forth our R&D expenses and such expenses as a percentage of revenue from operations for the period and years indicated

Particulars	Fiscal 2025	Fiscal 2024	Fiscal 2023
R&D expenses (Z in lakhs)	158.16	137.60	76.91
Revenue from operations (as a %)	0.79	0.70	0.48

In the future, we will continue to invest in technology to further enhance our operations, which may increase our expenditure or operating costs but will improve our operating leverage, cost efficiency and service quality. Our continued improvement of our platform is paramount to our customer experience, driving our ability to attract and retain customers, improve subscriptions, and generate revenues. Going forward, we intend to continue to prudently invest resources in technology in a cost-effective manner to support the long-term growth of our business.

Ability to retain and expand existing customer relationships by continuing to bid for and wining projects floated by our customers.

Over the years, we have invested and successfully delivered numerous projects for agencies such as Odisha Computer Application Centre (OCAC)-Government of Odisha, JSW Steel Limited, Varanasi Smart City Limited, Odisha Bridge and Construction Corporation Limited, Steel and Mines Department, Government of Odisha and Spatial Planning & Analysis Research Centre Private Limited, resulting in long-standing relationships with various government agencies and enterprises in the process, which enables us to execute projects efficiently and to the satisfaction of our clients. Our ability to increase sales to existing customers will depend on a number of factors, including the size of our sales force and professional services teams, customers level of satisfaction with our services and professional services, pricing, economic conditions and our customers overall budget and spending levels.

We have developed a suite of proprietary technology platforms and patented solutions that enhance our ability to deliver scalable, efficient, and compliant digital solutions across sectors. These in-house innovations strengthen our competitive position and support our long-term engagement model with government and enterprise clients.

The following table sets forth the percentage of revenue from operations contributed by our top 3, top 5 and top 10 customers for the periods indicated:

	Fiscal 2025		Fiscal 2024		Fiscal 2023
Contribution from top Customer	Revenue from operations (in Rs. lakhs)	As a % of Revenue from Operations	Revenue from operations (in Rs. lakhs)	As a % of Revenue from Operations	Revenue from operations (in Rs. lakhs)	As a % of Revenue from Operations
Top 3	10,099.87	50.69	11,282.14	57.35	9,369.85	58.40
Top 5	12,696.58	63.72	13,408.59	68.16	11,193.08	69.77
Top 10*	15,452.96	77.56	15,933.38	81.00	13,127.65	81.82

*Our top ten customers include Spatial Planning & Analysis Research Centre Private Limited and Odisha Bridge and Construction Corporation Limited. Names of balance customers have not been provided either because relevant consents for disclosure of their names were not available or in order to preserve confidentiality.

While we have established long-standing relationships with several of our customers, the majority of projects in our industry are awarded through a competitive bidding process. As such, we are required to meet prescribed qualification criteria and submit commercially competitive bids to secure contracts. We cannot assure you that we will always qualify to participate in tenders, or that our bids, once submitted, will be successful. Our ability to retain existing customers and attract prospective customers depends, among other factors, on the competitiveness and flexibility of our pricing model. If we are unable to appropriately adjust our pricing in response to market conditions, customer expectations, or competitive pressures, we may lose business opportunities or face customer attrition. Such developments could adversely affect our revenue growth, profitability, and overall business operations.

Our ability to deepen and expand the portfolio of services we offer while maintaining our high standard of quality

We plan to continue to enhance our existing offerings and platforms to further expand our capabilities and our addressable market. We aim to invest in building advanced AI capabilities to enhance our solutions for clients, enabling automation, predictive analytics, and data-driven insights. In parallel, we will integrate AI/ML technologies across our internal operations to improve productivity, automate routine processes, and enable intelligent decision-making. This will involve targeted talent acquisition, continuous skill development, and the application of AI/ML to address complex client requirements, enabling scalable and cost-effective outcomes.

In India, cybersecurity has become a top priority in recent years due to the growing number of cyber-attacks on Indian businesses and government institutions. AI drives cybersecurity beyond individual capabilities by forming powerful partnerships between humans and machines. AI monitors user and network behavior to detect unusual activities, such as unauthorized access or insider threats, enhancing security protocols (Source: CARE Report). Capitalizing on the industry trends, we aim to pursue acquisitions selectively, prioritizing the preservation of our entrepreneurial culture and the sustainable management of our growth. We intend to selectively pursue mergers, acquisitions, and strategic partnerships to accelerate capability-building, strengthen vertical depth, and expand into new geographies and technology segments. For further details, see "Our Business — Our Strategies" beginning on page 230.

The requirements of our customers vary across a wide range of industries, geographies and service or technical requirements. To service and grow our relationships with our existing customers and to secure new customers, we must provide them with services and solutions that address their needs, anticipate and understand trends in their markets and address their dynamic requirements. We believe that our innovative approach, highly skilled employees, proprietary platforms and global delivery capabilities have enabled us to expand the range of our offerings and improve the delivery of our services and solutions. Continuing to anticipate and respond to changing customer requirements with expanded and improved services will be an important factor in our growth and our ability to continue increasing our profitability.

Competition

The IT Market is highly competitive, with numerous local and global players offering similar solutions. As new entrants innovate or established players expand their offerings, it becomes challenging to maintain a competitive edge. Also, with increasing number of service providers in emerging tech domains like AI, cybersecurity and cloud services, there is often pressured to reduce margins and hence lower profits. The rapid pace of technological advancements, especially in AI, data analytics, poses a risk of companies falling behind if they fail to adopt, learn and implement new technologies quick enough (Source: CARE Report). Increased competition, including aggressive pricing and bidding strategies adopted by competitors, may result in reduced margins, loss of market share, and increased business acquisition costs. Certain competitors may have greater financial, operational, and technical resources, more established relationships with clients, or a longer track record in specific sectors or geographies, providing them with a competitive advantage over us. While we continuously endeavor to enhance our competitive position through innovation, operational efficiency, and developing solutions to cater to the needs of diverse industries, however, failure to maintain or increase our market share in the face of increasing competition, which could adversely affect our business, financial condition, and results of operations.

Basis Of Preparation and Significant Accounting Policies

The Restated Consolidated Financial Information, has been prepared on the basis of relevant Ind AS that are effective as at the reporting dates in accordance with the requirements of:

(a) Section 26 Chapter III of the Companies Act 2013 (the "Act") as amended from time to time (the "Act"); and

(b) The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India (the "ICAI") as amended from time to time (the "Guidance Note"); and

(c) Paragraph (A) of Clause 11 (I) of Part A of Schedule VI of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended to date (the "SEBI ICDR Regulations") issued by the Securities and Exchange Board of India (the "SEBI").

In accordance with the notification dated February 16, 2015, issued by Ministry of Corporate Affairs, the Company has voluntarily adopted Indian Accounting Standards notified under Section 133 of the Companies Act, 2013, as amended (the ""Act"") read with the Companies (Indian Accounting Standards) Rules, 2015, as amended (""Ind AS""). Accordingly, the transition date for adoption of Ind AS is 01 April, 2022.

The Restated Consolidated Financial Information of the Company comprises of the Restated Consolidated Balance Sheet as at 31st March, 2025, 31st March, 2024 and 31st March, 2023, the Restated Consolidated Statements of Profit and Loss (including other comprehensive income), the Restated Consolidated Statement of Changes in Equity, the Restated Consolidated Cash Flow Statement for the financial years ended 31st March, 2025, 31st March, 2024 and 31st March, 2023, the Summary Statement of Significant Accounting Policies, and other explanatory information (collectively, the ""Restated Consolidated Financial Information""). The financial statements for the year ended 31st March, 2025 are the first Financial Statements prepared in accordance with Ind AS. Refer to Note 2 for information on how the Company has adopted Ind AS.

The Restated Consolidated financial statements have been prepared on accrual and going concern basis in accordance with the historical cost convention, except for certain items that are measured at fair values, as explained in the accounting policies.

All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act, 2013.

The Restated Consolidated Financial Statements are presented in Rs. (Indian Rupees) and all values are rounded off to the nearest Lakh as per the requirements of Schedule III, unless otherwise stated.

Basis of Consolidation

The Company consolidates all entities which are controlled by it.

The Company establishes control when; it has power over the entity, is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect the entitys returns by using its power over relevant activitie s of the entity.

Entities controlled by the Company are consolidated from the date control commences until the date control ceases.

The results of subsidiaries acquired, or sold, during the year are consolidated from the effective date of acquisition and up to the effective date of disposal, as appropriate.

The financial statements of the foreign wholly owned subsidiaries and chain subsidiary are consolidated on a line-by-line basis and all inter-company transactions, balances, income and expenses are eliminated in full on consolidation.

Changes in the Companys interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amount of the Companys interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to shareholders of the Company.

Assets and liabilities of entities with functional currency other than the functional currency of the Company have been translated using exchange rates prevailing on the balance sheet date. Statement of profit and loss of such entities has been translated using weighted average exchange rates. Translation adjustments have been reported as foreign currency translation reserve in the statement of changes in equity. When a foreign operation is disposed off in its entirety or partially such that control, significant influence or joint control is lost, the cumulative amount of exchange differences related to that foreign operation recognised in OCI is reclassified to statement of profit and loss as part of the gain or loss on disposal.

The consolidated financial statements include the financial statements of CSM Technologies Limited and its subsidiaries. The financial statements of the subsidiaries, namely CSM Technologies DWC LLC (Dubai), CSM Technologies INC (USA), CSM Tech Limited (Kenya), CSM Tech Corp (Canada), and CSM Technologies Africa Ltd. (Rwanda), have been prepared up to December 31, 2024, which is different from the reporting date of the parent company, March 31, 2025. For the purpose of consolidation, adjustments have been made, where material, to bring the financial information of these subsidiaries in line with the reporting date of the parent. The difference between the reporting dates is not more than three months. All the transactions and events that occurred between December 31, 2024 and March 31, 2025 have been duly considered in the consolidated financial statements.

The consolidated financial statements of CSM Technologies Limited ("the Company") have been prepared on a going concern basis. Management has evaluated the ability of each entity within the Group to continue as a going concern. In this regard, attention is drawn to the financial statements of the subsidiaries:

CSM Technologies Inc, whose statutory auditors have included a remark expressing substantial doubt about the subsidiarys ability to continue as a going concern as the company has suffered losses from current year operations USD 159,867 (equivalent to INR 136.81 Lakh) and accumulated losses of USD 287,247 (equivalent to INR 245.83 Lakh) and has a negative net worth USD 287,147 (equivalent to INR 245.74 lakh) as of 31st December, 2024. The conversion rate used is as 1 USD is equal to Rs. 85.5804 as on 31st December, 2024.

CSM Tech Corp, whose statutory auditors have included a remark expressing substantial doubt about the subsidiarys ability to continue as a going concern as the company has suffered losses from current year operations CAD $ 131,945 (equivalent to INR 78.40 Lakh) and accumulated losses as of 31st December 2024 of cAd $ 143,296 (equivalent to INR 85.14 Lakh) and has a negative net worth CAD $ 143,196 (equivalent to INR 85.08 Lakh) as of 31st December, 2024. The conversion rate used is as 1 CAD is equal to Rs. 59.4165 as on 31st December, 2024. Management of the Group has assessed the situation and believes that the available cash resources together with the committed financial support from the parent entity will be sufficient to fund operations and meet obligations as they fall due within one year from the date of approval of these financial statements. The Companys management is also confident of successfully raising additional capital, expanding its market reach for existing services, increasing revenues, and ultimately achieving profitable operations.

Considering the above measures, management is confident that the Group will be able to maintain adequate liquidity and solvency. Accordingly, these consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business.

"Operating Cycle"

All assets and liabilities have been classified as current or non current as per the Companys normal operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act, 2013. Based on the nature of operations, the Company has ascertained its operating cycle as twelve months for the purpose of current/non-current classification of assets and liabilities. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.

Current and Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.

An asset is classified as current when it is:

(a) expected to be realised or intended to be sold or consumed in the Companys normal operating cycle;

(b) held primarily for the purpose of trading;

(c) expected to be realised within twelve months after the reporting period; or

(d) cash and cash equivalent (as defined in Ind AS 7), unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Current maturities of non-current asset are also termed as current assets.

All other assets are classified as non-current.

A liability is classified as current when it is:

(a) expected to be settled in the Companys normal operating cycle;

(b) held primarily for the purpose of trading;

(c) expected to be settled within twelve months after the reporting period; or

(d) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

Current maturities of non-current liabilities are also termed as current liability.

All other liabilities are classified as non-current.

Company classifies deferred tax assets/ (liabilities) as non-current assets /(liabilities). All other liabilities are classified as Non-Current.

Use of Estimates and Judgements

The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the year.

Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

Application of accounting policies require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements.

The areas involving critical estimates or judgments are:

(i) Lease

Ind AS 116 requires Lessees to determine the lease term as the non-cancellable period of a lease adjusted with an option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to the Companys operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances.

(ii) Revenue Recognition

The Company uses the percentage-of-completion method in accounting for its fixed-price contracts. Use of the percentage-of-completion method requires the Company to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended. Efforts or costs expended have been used to measure progress towards completion as there is a direct relationship between input and satisfaction of performance obligation. Provisions for estimated losses, if any, on partially executed contracts are recorded in the year in which such losses probable based on the expected estimates at the reporting date.

The company exercises judgement for identification of performance obligations, determination of transaction price, ascribing the transaction price to each distinct performance obligation and in determining whether the performance obligation is satisfied at a point in time or over a period of time. These judgements have been explained in detail under the revenue recognition note (Refer Note No-1B.9).

(iii) Employee benefits

The accounting of employee benefit plans in the nature of defined benefit, requires the Company to use assumptions. These assumptions have been explained under employee benefits note (Refer note 1B. 10).

(iv) Gratuity benefits

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexity of the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

In determining the appropriate discount rate, management considers the interest rates of government bonds, and extrapolated maturity corresponding to the expected duration of the defined benefit obligation. The mortality rate is based on publicly available mortality tables. Future salary increases are based on expected future inflation rates. Further details about the assumptions used, including a sensitivity analysis, are given in Note 41.

(v) Estimates related to useful life of property, plant and equipment & intangible assets

Depreciation on property plant and equipment is calculated on a straight-line basis over the useful lives estimated by the management. These rates are in line with the lives prescribed under Schedule II of the Companies Act, 2013. (Refer note 1B.1).

(vi) Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on internal / external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

(vii) Impairment of investments in subsidiaries

The Company reviews its carrying value of investments carried at cost (net of impairment, if any) annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for in the statement of profit and loss.

(viii) Impairment of Financial Assets

The measurement of impairment of financial assets requires the use of estimates, as explained in the note on financial assets, financial liabilities, and equity instruments, under the section "Impairment of Financial Assets (Other Than at Fair Value)" in note 1B.6.

(ix) Allowances for expected credit loss

The Company makes provision for expected credit losses through appropriate estimations of irrecoverable amount. The identification of expected credit loss requires use of judgment and estimates. The Company evaluates trade receivables ageing and makes a provision for those debts. Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses in the period in which such estimate has been changed.

(x) Trade receivables

In respect of trade receivables, the Company applies the simplified approach of Ind AS 109, which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.

(xi) Fair Value Measurement of Financial Instruments

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is determined using valuation techniques, including the Discounted Cash Flow (DCF) model. The inputs to these models are derived from observable market data, wherever possible. However, where such data is not available, judgement is applied in establishing fair values. This judgement includes evaluating factors such as liquidity risk, credit risk, and volatility. Changes in assumptions related to these factors could impact the reported fair value of financial instruments.

(xii) Provisions

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cashflows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

(xiii) Contingent liabilities and capital commitments

A Contingent liability is a possible obligation that arises from past events whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company, or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.

Material Accounting Policies

The following paragraphs provide a list of significant accounting policies adopted by the Company in preparation of the Financial statements. These policies have been consistently applied over the reported years, unless otherwise stated.

Property, Plant and Equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and impairment losses, if any. Such cost includes borrowing cost for long-term construction projects. The cost of an item of property, plant and equipment comprises of:

(a) its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.

(b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Subsequent costs are incurred are included in the carrying amount of assets or recognized as separate assets, as appropriate, only when it is probable that future economic benefits associated with them will flow to the Company and the cost of the item can be measured reliably and it is expected to be used for more than one year.

An item of Property, plant or equipment is derecognized upon disposal or when no future economic benefits are expected from the continued use of assets. Any gain or loss arising on the disposal or retirement of an item of property plant and equipment is recognized in profit and loss.

Each part of an item of Property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. Advance paid towards the acquisition of Property, plant and equipment outstanding at each reporting date is classified as capital advance under other non-current assets and the cost of assets not put to use before such date are disclosed under Capital work in progress.

The useful lives and residual values of Companys assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology. The estimated useful lives of assets are as follows:

- Building: 50 - 60 years

- Plant and machinery: 6 - 10 years

- Office equipment: 5 - 15 years

- Computers: 3 years

- Furniture and Fixtures: 10 years

- Vehicles: 8 years

The residual value of assets for depreciation purpose is considered at 5% of the original cost of the asset. The estimated useful life of the assets is reviewed at the end of each financial year. Property, plant and equipment with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit and loss.

Intangible Assets (including intangible assets under development)

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses.

Research costs are expensed as incurred. Software development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the Company has an intention and ability to complete and use or sell the software and the costs can be measured reliably. The costs, which can be capitalized include the cost of material, manpower cost, overhead costs that are directly attributable to prepare the asset for its intended use.

Intangible assets comprising of computer software purchase from outside are capitalised and amortised as per their estimated useful life of 3 years. Computer Softwares devloped in-house are amortised over 3 years.

Intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the cash generating unit (CGU) to which the asset belongs.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit and loss.

Depreciation and Amortisation

Depreciation is charged on Property, plant and equipment on a straight-line basis so as to expense the carrying cost less residual value over their estimated useful lives as prescribed in Schedule II of the Companies Act, 2013 except in respect of certain categories of assets, where the useful life of the assets has been assessed based on a technical evaluation.

The estimated useful lives and residual values are reviewed at the end of each reporting financial year, with the effect of any change in estimate accounted for on a prospective basis. However, assets which are built/constructed on leased space is depreciated over the period of lease or their useful lives whichever is shorter. Depreciation on addition to property, plant and equipment is provided on pro-rata basis from the date the asset is available for use.

Leasehold land is amortised over the period of lease.

Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready for its intended use.

All assets costing Rs. 5,000 or below are depreciated fully in the year of purchase.

The estimated useful life of an identifiable intangible asset is based on a number of factors, including the effects of obsolescence, demand, competition, and other economic factors (such as the stability of the industry, and known technological advances), and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.

Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date that they are available for use. However, if the useful life estimated is not more than one year, the entire amount is amortised in the year in which the software is purchased.

Amortization methods and useful lives are reviewed periodically including at each financial year end.

Investment Property

Investment properties are properties held to earn rental income and/or for capital appreciation. Investment property is initially recognized at cost, including transaction costs. Subsequent to initial recognition, investment property is measured using the cost model and is depreciated over its estimated useful life. Fair value of the investment property is disclosed in the notes to the financial statements, as required by Ind AS 40.

Leases

Company as a Lessee

The Companys lease assets classes primarily consist of lease for land & building. The Company assess whether a contract contains lease, at inception of the contract. A contract is, or contains a lease, if the contract conveys the right to use of an identified asset for a period of time in exchange of the consideration. To assess whether the contract conveys right to control the identified asset, the Company assess whether:

i) the contract involves the use of an identified asset.

ii) the Company has substantially all the economic benefits from the use of assets through the period of the lease.

iii) the Company has right to direct the use of asset.

Lease and non-lease components:

The Company has elected the practical expedient provided under Ind AS 116 to not separate lease and non-lease components for all classes of underlying assets. Accordingly, the entire consideration is accounted for as a single lease component

Right of Use Assets:

The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located.

The right-of-use asset is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability.

The right-of-use asset is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.

Lease Liability:

The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate. For leases with reasonably similar characteristics, the Company, on a lease-by-lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole. The lease payments shall include fixed payments, variable lease payments, residual value guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments.

The Company recognises the amount of the re-measurement of lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the re-measurement in statement of profit and loss.

Short term leases and leases of low value assets:

The Company has elected not to apply the requirements of Ind AS 116 - Leases to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.

Company as a Lessor

At the inception of the lease the Company classifies each of its leases as either an operating lease or a finance lease. The Company recognises lease payments received under operating leases as income on a straight-line basis over the lease term. In case of a finance lease, finance income is recognised over the lease term based on a pattern reflecting a constant periodic rate of return on the lessors net investment in the lease. When the Company is an intermediate lessor it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies Ind AS 115 - Revenue from contracts with customers to allocate the consideration in the contract.

1B.6 Financial Instruments:

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. They are initially measured at fair value, except for trade receivables, which are initially measured at the transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and liabilities (other than those at fair value through profit or loss) are added to or deducted from the fair value at initial recognition.

The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity. Financial liabilities are derecognised when, and only when, the Companys obligations are discharged, cancelled, or have expired.

Cash and Cash Equivalents:

The Company considers all highly liquid investments that are readily convertible into known amounts of cash and subject to an insignificant risk of changes in value to be cash equivalents. Cash and cash equivalents consist of balances with banks that are unrestricted in terms of withdrawal and usage. Cash and Cash equivalents in the balance sheet comprise cash at bank and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

Financial Assets at Amortised Cost

Financial assets are subsequently measured at amortised cost if they are held within a business model whose objective is to hold assets in order to collect contractual cash flows, and the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial Assets at Fair Value Through Other Comprehensive Income (FVTOCI)

Financial assets are measured at fair value through other comprehensive income if they are held within a business model whose objective is achieved by both collecting contractual cash flows (that are solely payments of principal and interest) and selling financial assets. The Company has made an irrevocable election to present subsequent changes in the fair value of equity investments not held for trading in other comprehensive income.

Financial Assets at Fair Value Through statement of Profit & Loss (FVTPL)

Financial assets are measured at fair value through statement of profit or loss unless they are measured at amortised cost or at fair value through other comprehensive income upon initial recognition. Transaction costs directly attributable to the acquisition of financial assets and liabilities at FVTPL are recognised immediately in the statement of profit and loss.

Investment in Subsidiaries

Investments in subsidiaries are measured at cost, less impairment loss, if any.

Financial Liabilities

Financial liabilities are measured at amortised cost using the effective interest method. While calculating the effective interest rate of loan liability, the company takes into account the processing fees and other initial expenses incurred for obtaining the loan if the amount so paid is in excess of Rs. 0.50 lakh. Otherwise the same is charged to Statement of Profit & Loss.

Equity Instruments

An equity instrument is a contract that evidences a residual interest in the assets of the Company after deducting all liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

Derecognition of Financial Assets

A financial asset or, where applicable, a part of a financial asset or part of a Company of similar financial assets is primarily derecognized when:

a) The right to receive cash flows from the assets have expired, or

b) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through arrangement; and either

(i) the Company has transferred substantially all the risks and rewards of the asset, or

(ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Companys continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

Derecognition of Financial Liability:

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, shall be recognized in profit & loss.

Reclassification of Financial Assets:

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Companys senior management determines change in the business model as a result of external or internal changes which are significant to the Company s operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest.

The following table shows various reclassification and how they are accounted for:

Original Classification	Revised Classification	Accounting Treatment
Amortized cost	Fair Value Through Profit or Loss	Fair value is measured at reclassification date. Difference between previous amortized cost and fair value is recognized in Statement of Profit & Loss.
Fair Value Through Profit or Loss	Amortized Cost	Fair value at reclassification date becomes its new gross carrying amount. Effective interest rate is calculated based on the new gross carrying amount.
Amortized cost	Fair Value Through Other Comprehensive Income	Fair value is measured at reclassification date. Difference between previous amortized cost and fair value is recognized in other comprehensive income. No change in effective interest rate due to reclassification.
Fair Value Through Other Comprehensive Income	Amortized cost	Fair value at reclassification date becomes its new amortized cost carrying amount. However, cumulative gain or loss in other comprehensive income is adjusted against fair value. Consequently, the asset is measured as if it had always been measured at amortized cost.
Fair Value Through Profit or Loss	Fair Value Through Other Comprehensive Income	Fair value at reclassification date becomes its new carrying amount. No other adjustment is required.
Fair Value Through Other Comprehensive Income	Fair Value Through Profit or Loss	Assets continue to be measured at fair value. Cumulative gain or loss previously recognized in other comprehensive income is reclassified to Profit & Loss at the reclassification date.

Impairment of Financial Assets

The Company assesses at each balance sheet date, whether a financial asset or a group of financial assets is impaired. As per Ind AS 109, expected credit losses are measured through a loss allowance. The Company recognises lifetime expected credit losses for all contract assets and for all trade receivables that do not constitute a financing transaction.

In determining the allowance for expected credit losses, the Company applies a practical expedient by computing the expected credit loss allowance for trade receivables using a provision matrix. This provision matrix considers the Companys historical credit loss experience and is adjusted to incorporate forward-looking information. The expected credit loss allowance is based on the ageing of receivables and the allowance rates applied through the provision matrix.

For all other financial assets, expected credit losses are measured at an amount equal to either the 12-month expected credit losses or the lifetime expected credit losses, if the credit risk on the financial asset has increased significantly since initial recognition.

Foreign Currency

The Companys reporting currency and the functional currency for its operations is Indian Rupees (?) being the principal currency of the economic environment in which it operates.

Transaction and Balances

A foreign currency transaction shall be recorded, on initial recognition in the functional currency, by applying to the foreign currency amount the spot exchange rate, of the date on which the transaction first qualifies for recognition as per Ind AS, between the functional currency and the foreign currency at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies outstanding at the end of the reporting year are translated at the exchange rates prevailing as at the end of reporting year. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.

Exchange differences arising on the settlement of monetary assets and liabilities or on translating monetary assets and liabilities at rates different from those at which they were translated on initial recognition during the period or in previous financial statements shall be recognized in statement of profit and loss in the year in which they arise. When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss shall be recognized in other comprehensive income. Conversely, when a gain or loss on a non-monetary item is recognized in statement of profit & loss, any exchange component of that gain or loss shall be recognized in Statement of Profit & Loss.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date:

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

- Level 2 - inputs other than quoted prices included in level 1 that are observed for the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Company recognizes transfers between level of the fair value hierarchy at the end of the financial year in which the change has occurred. The management has an established control framework with respect to fair value measurement.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

Revenue Recognition

The Company earns revenue primarily from providing IT services, consulting and business solutions. The Company offers a consulting-led, cognitive powered, integrated portfolio of IT, business and engineering services and solutions.

Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those products or services.

• Revenue from Rs. ime & material and Job contracts are recognised on output basis measured by units delivered, efforts expended, number of transactions processed, etc.

• Revenue related to fixed price maintenance and support services contracts where the Company is standing ready to provide services is recognised based on time elapsed mode and revenue is straight-lined over the period of performance.

• In respect of other fixed-price contracts, revenue is recognised using percentage-of-completion method (‘POC method) of accounting with contract costs incurred determining the degree of completion of the performance obligation. The contract costs used in computing the revenues include cost of fulfilling warranty obligations.

• Revenue from the sale of distinct internally developed software and manufactured systems and third party software is recognised upfront at the point in time when the system / software is delivered to the customer. In cases where implementation and / or customisation services rendered significantly modifies or customises the software, these services and software are accounted for as a single performance obligation and revenue is recognised over time on a POC method.

• Revenue from the sale of distinct third party hardware is recognised at the point in time when control is transferred to the customer.

• The solutions offered by the Company may include supply of third-party equipment or software. In such cases, revenue for supply of such third party products are recorded at gross or net basis depending on whether the Company is acting as the principal or as an agent of the customer. The Company recognises revenue in the gross amount of consideration when it is acting as a principal and at net amount of consideration when it is acting as an agent.

Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, service level credits, performance bonuses, price concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.

Contract fulfilment costs are generally expensed as incurred except for certain conditions which meet the criteria for capitalisation. Such costs are amortised over the contractual period or useful life of licence, whichever is less. The assessment of this criteria requires the application of judgement, in particular when considering if costs generate or enhance resources to be used to satisfy future performance obligations and whether costs are expected to be recovered.

Contract Asset is recognized when the Company has transferred goods or services to the customer but does not yet have an unconditional right to consideration. In such case revenue is recognised in line with the contact price in proportion to work executed by the company (net of discounts, rebates, returns, and taxes collected on behalf of statutory authorities).

The billing schedules agreed with customers include periodic performance based payments and / or milestone based progress payments. Invoices are payable within contractually agreed credit period.

Contracts with customers includes subcontractor services or third-party vendor equipment or software in certain integrated services arrangements. In these types of arrangements, revenue from sales of third-party vendor products or services is recorded net of costs when the Group is acting as an agent between the customer and the vendor, and gross when the Group is the principal for the transaction. In doing so, the Group first evaluates whether it controls the good or service before it is transferred to the customer. The company considers whether it has the primary obligation to fulfil the contract, inventory risk, pricing discretion and other factors to determine whether it controls the goods or service and therefore, is acting as a principal or an agent.

A contract modification is a change in the scope or price, or both, of a contract that is approved by the parties to the contract. A contract modification that results in the addition of distinct performance obligations are accounted for either as a separate contract if the additional services are priced at the Consolidated selling price or as a termination of the existing contract and creation of a new contract if they are not priced at the Consolidated selling price. If the modification does not result in a distinct performance obligation, it is accounted for as part of the existing contract on a cumulative catch-up basis.

The Company disaggregates revenue from contracts with customers by nature of services and geography.

Government Grant

The Company recognizes government grants only when there is reasonable assurance that the conditions attached to them are complied with, and the grants will be received. Government grants related to revenue are presented as an offset against the related expenditure in the Statement of Profit and Loss.

Interest income

Interest income is recognised using the effective interest method.

Dividend income

Dividend income is recognised when the right to receive payment is established.

Rent income

Rent income is recognised on accrual basis in accordance with the terms of the relevant agreement.

Insurance Recoveries / Claims

Insurance claims with insurance company are recognised as income in the year in which the right to receive the claim amount from insurance company is established.

Employee Benefits Expenses

Defined Contribution Plan:

The Company operates a defined benefit gratuity plan which requires contributions to be made to a separately administered fund. The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method. Liability for gratuity funded are determined by an independent actuarial valuation made at the end of each financial year.

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income in the year in which they occur. Re-measurements are not reclassified to profit or loss in subsequent year.

Past service costs are recognized in statement of profit & loss on the earlier of:

i) the date of the plan amendment or curtailment

ii) the date that the Company recognizes related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognizes the following changes in the net defined benefit obligation as an expense in the Consolidated statement of profit and loss:

i) Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and

ii) Net interest expense or income

Contributions to defined contribution plans are recognised as expense when employees have rendered services entitling them to such benefits. Companys contributions paid/payable during the year to Provident Fund and Employee state insurance are recognized in statement of profit and loss.

Short-term employee benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Employee benefits including salary is recognised in the year in which the employee renders the related service. A liability is recognised for the amount expected to be paid when there is a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Gratuity:

Company provides for gratuity, a defined benefit retirement plan covering eligible employees. In accordance with the Payment of Gratuity Act, 1972, the Gratuity Plan provides a lump sum payment to eligible employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment. The Gratuity Scheme is funded. Liability at each financial year is determined and charged to the Statement of Profit & Loss on the basis of actuarial valuation.

Provident fund:

All eligible employees of the Company are entitled to receive benefits from a provident fund which is a defined benefit plan. The periodical contributions are deposited in Government administered provident fund by expensing to the statement of profit and loss as and when the liability arises.

Compensated Absence :

As compensated absence, all employees are entitled to Earned Leave (EL). However, to avail the EL the employee concerned should have put in at least 240 days of continuous working.

At the end of each financial year, if the unutilized Earned leave balance of an employee is 15 or less, then the entire unutilised leave is carried over to the next year. If the unutilized Earned Leave balnce is more than 15, then 15 Earned Leaves are carried over to the next year and the remaining is encashed and paid to the employee based on the employees basic pay.

Income Taxes

Income tax expense comprises current and deferred income tax. Income tax expense is recognized in the Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity or other comprehensive income.

Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Deferred income taxes are not provided on the undistributed earnings of subsidiaries where it is expected that the earnings of the subsidiary will not be distributed in the foreseeable future.

The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Provisions, Contingent Liabilities & Contingent Assets

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Where the time value of money is material, provisions are stated at the present value of the expenditure expected to settle the obligation. All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future uncertain events not wholly within the control of the Company, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote. Contingent Assets are not recognized in the financial statements. However, when the realization of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.

Earnings per Share

In determining the Earnings per share, the Company considers profit attributable to the owners of the Company. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year unless issued at later date.

Borrowing Costs

Borrowing costs are expensed as and when the liability to pay arises. However, where the borrowing cost is directly attributable to any acquisition, construction or production of qualifying assets which takes substantial period of time to get ready for intended use, such attributable borrowing cost till the time the asset is ready for its intended use, is capitalized as part of the cost of such asset. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Impairment

Periodically during the year but definitely at the end of each Financial year, the Company assesses whether there is any indication that an asset (tangible or intangible) needs to be impaired. If such indication exists, the entity estimates the recoverable amount of the asset. An asset is impaired when its carrying value exceeds its recoverable amount. Where an indication of impairment exists, the assets recoverable amount is estimated.

An assets recoverable amount is, higher of the assets or cash-generating units value in use and its fair value less costs of disposal; and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets, in which case the recoverable amount is determined for the cash-generating unit to which the asset belongs.

Share issue expenses

The company adopts Ind AS 32 for accounting of share issue expenses. Expenses associated with an equity transaction is accounted for as a deduction from equity, net of any related income tax benefit.

An expenses is treated as expense associated with an equity transaction if expenses is directly attributable to the equity transaction that otherwise would have been avoided. The costs of an equity transaction that is abandoned are recognised as an expense immediately upon its abandonment.

Segment Reporting

Operating segment is a component of Company that engages in a business activities from which it may earn revenue and incur expenses, including revenues and expenses that relate to transaction with any other component of Company, and for which discrete financial information is available. All operating segment results are reviewed by management to make decision about resources to be allocated to the segment and assess their performance.

The accounting policies adopted for segment are in conformity with the accounting policy adopted by the Company. Further, Inter segment revenue has been recognized based on transaction price agreed between two segments which is primarily market based.

Revenue and expenses have been identified to the segment on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relate to the Company as a whole and are not allocable to segment on a reasonable basis, have been included under "un-allocated corporate expenses net of un-allocated income".

Prepaid expenses

Expenditure of Rs. 25,000/- or less, in each case, incurred in advance of the subsequent year(s) are charged off as expenses of the current year.

Prior Period / Extraordinary Adjustments

Expenditure / Receipts relating to the particular year, coming to notice after closure of the Accounts i.e. after the cut-off date are booked under the relevant head of expenditure / receipt of the next year, if the amount involved is not more than the materiality decided by management. In case the amount is more than the materiality as per management, the provisions contained in Ind AS 8 are applied for determination of its accounts under natural head of account of Current year / Prior period / Extraordinary Expenditure / Income.

Principal Components of Our Statement of Profit and Loss

Set forth below are the key components of our statement of profit and loss from our continuing operations from our restated consolidated statement of profit and loss for Fiscal 2025, Fiscal 2024 and Fiscal 2023:

Income

Our income comprises (i) revenue from operations; and (ii) other income.

Our total income for Fiscal 2025, Fiscal 2024 and Fiscal 2023, was Rs. 20,062.73 Lakhs, Rs. 19,865.05 Lakhs and Rs. 16,150.49 Lakhs, respectively.

Set out below is a brief description of the components of our revenue.

Revenue from operations

Our revenue from operations comprised (i) revenue from the sale of products; and (ii) sale of services.

Other income

Our other income comprises (i) Interest on fixed deposits from banks, (ii) foreign exchange fluctuation gain, (iii) profit on sale of property, (iv) plant and equipment, (v) liabilities no longer required, (vi) interest on financial assets carried on amortized cost, (vii) profit on sale of current investments and (viii) other misc. income etc.

Expenses

Our expenses comprise of (i) cost of material consumed, (ii) cost of services rendered, (iii) employee benefit expenses, (iv) finance cost, (v) depreciation and (vi) amortization and other expenses.

Our total expenses for Fiscal 2025, Fiscal 2024 and Fiscal 2023, was Rs. 18,019.06 lakhs, Rs. 18,082.55 Lakhs and 13,887.69 Lakhs respectively.

Set out below is a brief description of our key elements of our expenses.

Cost of Materials Consumed

This relates to the purchase of material and software licenses.

Cost of Services Rendered

This relates to direct manpower cost and other expenses directly attributed to Contract.

Employee benefit expenses

Employee benefit expenses comprise of (i) Salaries, (ii) Staff welfare and (iii) contribution to provident and other funds. Finance cost

Finance cost comprises of (i) interest of working capital loans, (ii) term loans, (iii) lease liabilities and (iv) other borrowing cost.

Depreciation and amortization expense

Depreciation and amortization expense comprises of (i) depreciation / amortization on property, (ii) plant & equipment, (iii) ROU assets and, (iv) Buildings.

Other expenses

Other expenses primarily comprise of (i) Travel & Conveyance; (ii) Rent; (iii) Legal & Professional Charges, (iv) Housekeeping & Security expenses; (v) Repair & Maintenance; (vi) Power & Fuel; (vii) Rates & Taxes; (viii) Insurance; (ix) Tender Participation Expenses; (x) Recruitment Expenses; (xi) Business Promotion Expenses; (xii) Vehicle Hire Charges;(xiii) Printing & Stationary Expenses;(xiv) Auditors Fee; (xv) Incentives and (xvi) other Misc. expenses.

Our results of operations

The following table sets forth select financial data derived from our restated consolidated statement of profit and loss for

Fiscals 2025, 2024 and 2023 and we have expressed the components of select financial data as a percentage of total income for such years:

Particulars	Fiscals
	2025		2024		2023
	(? in lakhs)	(% of total income)	(? in lakhs)	(% of total income)	(? in lakhs)	(% of total income)
Income
Revenue from operations	19,924.42	99.31	19,671.05	99.02	16,043.87	99.34
Other income	138.31	0.69	194.00	0.98	106.62	0.66
Total Income	20,062.73	100.00	19,865.05	100.00	16,150.49	100.00
Expenses
Cost of Materials Consumed	1,495.42	7.45	2,226.70	11.21	3,188.64	19.74
Cost of Service Rendered	4,842.96	24.14	5,238.73	26.37	2,817.63	17.45
Employee Benefits Expense	9,345.08	46.58	8,347.89	42.02	5,998.01	37.14
Finance costs	410.55	2.05	236.62	1.19	212.24	1.31
Depreciation and amortization expenses	611.09	3.05	545.82	2.75	418.81	2.59
Other expenses	1,313.96	6.55	1,486.79	7.48	1,252.36	7.75
Total expenses	18,019.06	89.81	18,082.55	91.03	13,887.69	85.99
Profit Before Exceptional Items and Tax	2,043.67	10.19	1,782.50	8.97	2,262.80	14.01
Exceptional Items	-	-	-	-	-	-
Loss on Fair Valuation of NonCurrent Asset held for Sale	-	-	-	-	-	-
Profit Before Tax	2,043.67	10.19	1,782.50	8.97	2,262.80	14.01
Tax Expenses
Current Tax	579.88	2.89	503.14	2.53	509.16	3.15
Deferred Tax	26.04	0.13	15.54	0.08	148.06	0.92
Income Tax Adjustment for Earlier Year	29.10	0.15	8.89	0.04	23.18	0.14
Total Tax Expenses	635.02	3.17	527.57	2.66	680.39	4.21
Profit for the Year	1,408.65	7.02	1,254.93	6.32	1,582.40	9.80%
Other Comprehensive Income	(21.23)	(0.11)	(75.43)	(0.38)	(156.85)	(0.97)
Restated total Comprehensive Income/(Expense) for the year	1,387.42	6.92	1,179.50	5.94	1,425.55	8.83

Fiscal 2025 compared to Fiscal 2024 Total income

Our total income increased by 1.00 % to Rs. 20,062.73 lakhs for Fiscal 2025 from Rs. 19,865.05 lakhs for Fiscal 2024. This increase was primarily due to an increase in revenue from operations, which was primarily driven by sales of services within and outside India. For further details, see "-Fiscal 2025 compared to Fiscal 2024 - Total income - revenue from operations " below.

Revenue from operations. Our revenue from operations increased by 1.29 % to Rs. 19,924.42 lakhs for Fiscal 2025 from Rs. 19,671.05 lakhs for Fiscal 2024. This was primarily attributable to:

• decrease in sales of products within India by 31.51% to Rs. 1,470.94 lakhs for Fiscal 2025 from Rs. 2,147.71 lakhs for Fiscal 2024:

• an increase in sales of services within India by 4.22% to Rs. 15,946.34 lakhs for Fiscal 2025 from Rs. 15,299.99 lakhs for Fiscal 2024;

• an increase in sales of services outside India by 12.76% to Rs. 2,507.14 lakhs for Fiscal 2025 from Rs. 2,223.35 lakhs for Fiscal 2024;

Reason for Variation

The composition of contracts executed by our Company varies depending on the scope defined in the bids or tenders floated by customers. Certain contracts involve a higher proportion of hardware, whereas in others the share of hardware is relatively lower, with services forming a larger component. In general, a lower hardware component corresponds to a higher share of services. Consequently, the overall mix of product and services delivery is a function of specific customer requirements. Since the deliverables under such contracts are often spread across multiple financial years, the proportion of hardware and service components may differ from one year to another, leading to variations in the revenue mix on a year-on-year basis.

Other income. Our other income decreased by 28.71 % to Rs. 138.31 lakhs for Fiscal 2025 from Rs. 194 lakhs for Fiscal 2024, primarily due to decrease in foreign exchange fluctuation gain, written off of liability no longer required, profit on sale of sale of land offset by an increase in interest on fixed deposits with banks, interest on financial asset carried at amortised cost, other interests, profit from sale of current investments, profit on sale of other items of property, plant & equipment and other miscellaneous income.

Expenses

Cost of materials consumed. The cost of material consumed decreased by 32.84 % to Rs. 1,495.42 lakhs for Fiscal 2025 from Rs. 2,226.70 lakhs for Fiscal 2024, primarily due to (i) decrease in purchase of materials to Rs. 560.69 lakhs for Fiscal 2025 from t1,031.44 lakhs for Fiscal 2024, and (ii) decrease in purchase of software licenses to Rs. 934.73 lakhs for Fiscal 2025 from Rs. 1,195.26 lakhs for Fiscal 2024.

Cost of service rendered. The cost of services rendered decreased by 7.55 % to Rs. 4,842.96 lakhs for Fiscal 2025 from Rs. 5,238.73 lakhs for Fiscal 2024, primarily due to decrease in (i) manpower expenses to Rs. 1,179.46 lakhs for Fiscal 2025 from t1,582.93 lakhs for Fiscal 2024, and partially offset by increase in other expenses to Rs. 3,663.50 lakhs for Fiscal 2025 from Rs. 3,655.80 lakhs for Fiscal 2024.

Employee benefits expense. Employee benefits expense increased by 11.95 % to Rs. 9,345.08 lakhs for Fiscal 2025 from Rs. 8,347.89 lakhs for Fiscal 2024, primarily due to an increase in (i) salaries including bonus expenses to Rs. 8 ,569.32 lakhs for Fiscal 2025 from Rs. 7,632.17 lakhs for Fiscal 2024, (ii) increase in contribution to provident and other funds expenses to Rs. 632.84 lakhs for Fiscal 2025 from Rs. 573.26 lakhs for Fiscal 2024 and (iii)increase in staff welfare expenses to Rs. 142.92 lakhs for Fiscal 2025 from Rs. 142.46 lakhs for Fiscal 2024.

Finance costs. Finance costs increased by 73.51 % to Rs. 410.55 lakhs for Fiscal 2025 from Rs. 236.62 lakhs for Fiscal 2024, primarily due to (i) an increase in the interest on working capital loans expenses to Rs. 225.12 lakhs for Fiscal 2025 from Rs. 94.63 lakhs for Fiscal 2024, (ii) an increase in the interest on term loans to Rs. 89.78 lakhs for Fiscal 2025 from t46.89 lakhs for Fiscal 2024, (iii) an increase in other borrowing cost to Rs. 68.13 lakhs for Fiscal 2025 from t61.12 lakhs for Fiscal 2024 and partially offset by decrease in interest on lease liabilities to Rs. 27.52 lakhs for Fiscal 2025 from t33.98 lakhs for Fiscal 2024.

Depreciation and amortization expense. Depreciation and amortization expense increased by 11.96 % to Rs. 611.09 lakhs for Fiscal 2025 from Rs. 545.82 lakhs for Fiscal 2024, primarily due to an increase in the (i) depreciation of right of use assets to Rs. 122.91 lakhs for Fiscal 2025 from Rs. 118.18 lakhs for Fiscal 2024, (ii) depreciation of property, plant, and equipment to Rs. 406.32 lakhs for Fiscal 2025 from t355.27 lakhs for Fiscal 2024, and (iii) Amortisation of other intangible assets to Rs. 81.86 lakhs for Fiscal 2025 from t72.37 lakhs for Fiscal 2024.

Other expenses. Our other expenses decreased by 11.62 % to Rs. 1,313.96 lakhs for Fiscal 2025 from Rs. 1,486.79 lakhs for Fiscal 2024, primarily due to decrease in:

• rent, rates and taxes decreased by 32.73% to Rs. 123.35 lakhs in Fiscal 2025 from Rs. 183.37 lakhs in Fiscal 2024. The rent, rates and taxes decreased due to (i) surrender of a rented premises, (ii) implementation hybrid policy of working, including work from home and (iii) moving a part of team to owned premises completed in Fiscal 2024.

• power and fuel expenses decreased by 8.77% to Rs. 48.19 lakhs in Fiscal 2025 from Rs. 52.82 lakhs in Fiscal 2024, due to less power outage which results in decrease of genset fuel usage during power outage.

• tender participation expense decreased by 70.85% to ?5.83 lakhs in Fiscal 2025 from Rs. 20.01 lakhs in Fiscal 2024. Due to volatile tender participation expense which is dependent on fee fixed by the organisations floating the tenders and the companys decision to participate..

• travel and conveyance expenses decreased by 22.48% to Rs. 191.97 lakhs in Fiscal 2025 from Rs. 247.63 lakhs in Fiscal 2024 which represent costs incurred for client project delivery and business development, which vary year-on-year based on activity levels, with cost savings achieved through use of virtual meetings wherever feasible..

• incentives decreased by 36.64% to Rs. 80.72 lakhs in Fiscal 2025 from Rs. 127.39 lakhs in Fiscal 2024. Primarily due to lower payouts under the predefined incentive scheme linked to sales achievements.

• recruitment expenses decreased by 29.54% to Rs. 41.86 lakhs in Fiscal 2025 from Rs. 59.40 lakhs in Fiscal 2024. Due to efficiency in man-power utilisation leading to lower incremental manpower requirements.

• business promotion expenses is decreased by 44.68% to Rs. 49.81 lakhs in Fiscal 2025 from Rs. 90.05 lakhs in Fiscal 2024 due to a reduction in promotional activities and related travel.

• printing and stationary expenses reduced by 69.13% to Rs. 4.95 lakhs in Fiscal 2025 from Rs. 16.04 lakhs in Fiscal 2024 due to reduction in the usage of papers and stationary in line with our strategy of reducing costs and usage to preserve environment.

• capital work-in-progress written off to Rs. Nil in Fiscal 2025 from Rs. 74.53 lakhs in Fiscal 2024.

• provision for doubtful receivables Rs. (35.39) lakhs in Fiscal 2025 from Rs. 46.38 lakhs in Fiscal 2024 due to net reversal of provisions upon realisation of delayed receivables.

• repair and maintenance- plant & machinery increased by 47.68% to Rs. 93.41 lakhs in Fiscal 2025 from Rs. 63.25 lakhs in Fiscal 2024, primarily on account of higher expenditure on software licences (COTS) and related maintenance requirements arising from increased usage.

• repair and maintenance- others increased by 99.82% to Rs. 50.38 lakhs in Fiscal 2025 from Rs. 25.21 lakhs in Fiscal 2024, due to an increase in maintenance and upkeep expenses of the building at the registered office.

• Housekeeping and security expenses increased by 6.39%, to Rs. 122.14 lakhs in Fiscal 2025 to ^114.81 lakhs in Fiscal 2024due to inflationary cost escalation and revised service contracts

Restated profitfor the year

For the reasons discussed above, the restated profit for Fiscal 2025 was stood at Rs. 1,408.65 lakhs, as compared to the restated profit of 1,254.93 lakhs for Fiscal 2024.

Restated total other comprehensive profitfor the year

Our restated total other comprehensive profit for the year was Rs. 1,387.42 lakhs for Fiscal 2025 as compared to Rs. 1,179.50 lakhs for Fiscal 2024. This was on account of reclassification of items to profit or loss.

Fiscal 2024 compared to Fiscal 2023

Total income

Our total income increased by 23.00% to Rs. 19,865.05 lakhs for Fiscal 2024 from Rs. 16,150.49 lakhs for Fiscal 2023. This increase was primarily due to an increase in revenue from operations, which was primarily driven by . increase in sales of services and increase in other income. For further details, see "-Fiscal 2024 compared to Fiscal 2023 - Total income - revenue from operations " below.

Revenue from operations. Our revenue from operations increased by 22.61 % to Rs. 19,671.05 lakhs for Fiscal 2024 from Rs. 16,043.87 lakhs for Fiscal 2023. This was primarily attributable to:

• a decrease in sales of products within India by 38.74 % to Rs. 2,147.71 lakhs for Fiscal 2024 from Rs. 3,506.14 lakhs for Fiscal 2023

• an increase in sales of services within India by 28.12% to Rs. 15,299.99 lakhs for Fiscal 2024 from Rs. 11,942.35 lakhs for Fiscal 2023

• an increase in sales of services outside India by 273.44% to Rs. 2,223.35 lakhs for Fiscal 2024 from Rs. 595.38 lakhs for Fiscal 2023

Reason for Variation

The composition of contracts executed by our Company varies depending on the scope defined in the bids or tenders floated by the customers. Certain contracts involve a higher proportion of hardware, whereas in others the share of hardware is relatively lower, with services forming a larger component. In general, a lower hardware component corresponds to a higher share of services. Consequently, the overall mix of product and service delivery is a function of specific customer requirements. Since the deliverables under such contracts are often spread across multiple financial years, the proportion of hardware and service components may differ from one year to another, leading to variations in the revenue mix on a year-on-year basis.

Other income

Our other income increased by 81.96 % to Rs. 194.00 lakhs for Fiscal 2024 from Rs. 106.62 lakhs for Fiscal 2023, primarily due to an increase in interest on fixed deposits with banks, interest on financial asset carried at amortised cost, net gain on fair valuation of investments carried at fair value through statement of profit & loss, profit on sale of land, profit on sale of other items of property, plant & equipment, liability no longer required written back and foreign exchange fluctuation gain.

Expenses

Cost of materials consumed. The cost of material consumed decreased by 30.17 % to Rs. 2,226.70 lakhs for Fiscal 2024 from Rs. 3,188.64 lakhs for Fiscal 2023, primarily due to decrease in purchase of software licenses to Rs. 1 ,195.26 lakhs for Fiscal 2024 from Rs. 2,806.92 lakhs for Fiscal 2023, and partially offset by increase in purchase of materials to Rs. 1,031.44 lakhs for Fiscal 2024 from Rs. 381.72 lakhs for Fiscal 2023,

Cost of service rendered. The cost of services rendered increased by 85.93 % to Rs. 5,238.73 lakhs for Fiscal 2024 from Rs. 2,817.63 lakhs for Fiscal 2023, primarily due to increase in (i) manpower expenses to Rs. 1,582.93 lakhs for Fiscal 2024 from Rs. 915.10 lakhs for Fiscal 2023, and (ii) other expenses to Rs. 3,655.80 lakhs for Fiscal 2024 from Rs. 1,902.53 lakhs for Fiscal 2023.

Employee benefits expense. Employee benefits expense increased by 39.18 % to Rs. 8,347.89 lakhs for Fiscal 2024 from Rs. 5,998.01 lakhs for Fiscal 2023, primarily due to an increase in (i) salaries including bonus expenses to Rs. 7,632.17 lakhs for Fiscal 2024 from Rs. 5,475.43 lakhs for Fiscal 2023; (ii) contribution to provident and other funds expenses to Rs. 573.26 lakhs for Fiscal 2024 from Rs. 405.33 lakhs for Fiscal 2023; and (iii)increase in staff welfare expenses to Rs. 142.46 lakhs for Fiscal 2024 from Rs. 117.25 lakhs for Fiscal 2023.

Finance costs. Finance costs increased by 11.49 % to Rs. 236.62 lakhs for Fiscal 2024 from Rs. 212.24 lakhs for Fiscal 2023, primarily due to an increase in the interest on working capital loans expenses to Rs. 94.63 lakhs for Fiscal 2024 from Rs. 63.34 lakhs for Fiscal 2023, and increase in (i) interest on lease liabilities to Rs. 33.98 lakhs for Fiscal 2024 from Rs. 33.37 lakhs for Fiscal 2023; and (ii) other borrowing cost to Rs. 61.12 lakhs for Fiscal 2024 from Rs. 60.60 lakhs for Fiscal 2023.

Depreciation and amortization expense. Depreciation and amortization expense increased by 30.33 % to Rs. 545.82 lakhs for Fiscal 2024 from Rs. 418.81 lakhs for Fiscal 2023, primarily due to an increase in (i) depreciation of right of use assets to Rs. 118.18 lakhs for Fiscal 2024 from Rs. 102.06 lakhs for Fiscal 2023; (ii) depreciation of property, plant, and equipment to Rs. 355.27 lakhs for Fiscal 2024 from Rs. 275.39 lakhs for Fiscal 2023;and (iii) amortisation of other intangible assets to Rs. 72.37 lakhs for Fiscal 2024 from Rs. 39.50 lakhs for Fiscal 2023.

Other expenses. Our other expenses increased by 18.72 % to Rs. 1,486.79 lakhs for Fiscal 2024 from Rs. 1,252.36 lakhs for Fiscal 2023, primarily due to increase in:

• rent by 125.11% to Rs. 155.26 lakhs in Fiscal 2024 from Rs. 68.97 lakhs in Fiscal 2023 due to leasing of additional office space to accommodate delivery team expansion for new customer contracts.

• power and fuel expenses by 32.90% to Rs. 52.82 lakhs in Fiscal 2024 from Rs. 39.75 lakhs in Fiscal 2023.

• insurance expense by 79.68% to Rs. 5.52 lakhs in Fiscal 2025 from Rs. 3.07 lakhs in Fiscal 2024 due to purchase of new insurance policies for new vehicles purchased and for new constructed building etc.

• tender participation expense by 239.04% to Rs. 20.01 lakhs in Fiscal 2024 from Rs. 5.90 lakhs in Fiscal 2023 reflecting higher participation in tenders and volatile fee fixed by the organisations floating such tender and the companys choice of participating in a tender.

• travel and conveyance by 138.31% to Rs. 247.63 lakhs in Fiscal 2024 from Rs. 103.91 lakhs in Fiscal 2023 in line with higher physical client visits and revenue growth.

• CSR expenses by 65.02% to Rs. 29.68 lakhs in Fiscal 2024 from Rs. 17.99 lakhs in Fiscal 2023. CSR Expenses is calculated under Section 135 of Companies Act, 2013 and expenditure is increasing with increase in profitability of the Company.

• recruitment expenses by 76.71% to Rs. 59.40 lakhs in Fiscal 2024 from Rs. 33.62 lakhs in Fiscal 2023 primarily or account of higher hiring costs incurred to strengthen the workforce in line with the Companys growing business requirements.

• business promotion expenses by 33.94% to Rs. 90.05 lakhs in Fiscal 2024 from Rs. 67.23 lakhs in Fiscal 2023 mainly attributable to higher promotional initiatives undertaken by the Company.

• printing and stationary expenses by 4.52% to Rs. 16.04 lakhs in Fiscal 2024 from Rs. 15.34 lakhs in Fiscal 2023 was primarily due to higher consumption in line with the expanded scale of business operations.

• Bank charges by 33.41% to Rs. 23.25 lakhs in Fiscal 2024 from Rs. 17.43 lakhs in Fiscal 2023 on account of highei banking transactions and charges incurred in relation to the enhanced scale of business operations and additional utilization of banking facilities.

• soft link charges by 16.00% to Rs. 48.36 lakhs in Fiscal 2024 from Rs. 41.69 lakhs in Fiscal 2023 due to enhanced scale of business operations.

• Housekeeping and security expenses increased by 24.38%, from Rs. 92.30 lakhs in Fiscal 2023 to Rs. 114.81 lakhs in Fiscal 2024 primarily attributable to the leasing of additional premises by the Company to support its growing business operations.

• capital work-in-progress written off to Rs. 74.53 lakhs in Fiscal 2024 from Nil in Fiscal 2023.

• Provision for doubtful receivables stood at ?46.38 lakhs in Fiscal 2024 as compared to a reversal of ?58.20 lakhs in Fiscal 2023. reflecting reversals recognised once delayed collections are realised.

Restated profit for the year

For the reasons discussed above, the restated profit for Fiscal 2024 was Rs. 1,254.93 lakhs, as compared to the restatec profit of 1,582.40 lakhs for Fiscal 2023.

Restated total other comprehensive profitfor the year

Our restated total other comprehensive profit for the year was Rs. 1,179.50 lakhs for Fiscal 2024 as compared tc Rs. 1,425.55 lakhs for Fiscal 2023. This was on account of reclassification of items to profit or loss.

Non-GAAP measures

Certain measures included in this Draft Red Herring Prospectus, for instance Net Asset Value per Equity Share, Revenue from Operations, EBITDA, EBITDA Margin, PAT, PAT Margin, Total Income, Return on Capital Employed and Return on Equity, Total Debt to Equity Ratio, Net Worth and Return on Net Worth (the "Non-GAAP Measures), presented in this Draft Red Herring Prospectus are supplemental measures of our performance and liquidity that are not required by, or presented in accordance with Ind AS, IFRS or US GAAP. Furthermore, these Non-GAAP Measures, are not a measurement of our financial performance or liquidity under Indian GAAP, IFRS or US GAAP and should not be considered as an alternative to net profit revenue from operations or any other performance measures derived in accordance with Ind AS, IFRS or US GAAP or as an alternative to cash flow from operations or as a measure of our liquidity. Further, these Non- GAAP Measures and other statistical and other information relating to operations and financial performance should not be considered in isolation or construed as an alternative to cash flows, profit for the years or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS, Indian GAAP, IFRS or US GAAP. In addition, these Non-GAAP Measures and other statistical and other information relating to operations and financial performance, are not standardised terms and may not be computed on the basis of any standard methodology that is applicable across the industry and therefore, may not be comparable to financial measures of similar nomenclature that may be computed and presented by other companies and are not measures of operating performance or liquidity defined by Ind AS and may not be comparable to similarly titled measures presented by other companies. Further, they may have limited utility as a comparative measure. Although such Non-GAAP financial measures are not a measure of performance calculated in accordance with applicable accounting standards, our Companys management believes that they are useful to an investor in evaluating us as they are widely used measures to evaluate a companys operating performance.

Cash flows and cash and cash equivalents

The following table sets forth our cash flows and cash and cash equivalents for the Fiscals indicated:

Particulars	Fiscal 2025	Fiscal 2024	Fiscal 2023
Net cash flow from Operating Activities	871.61	959.26	1 ,742.24
Net cash flow used in Investing Activities	(895.54)	(3,187.05)	(823.13)
Net cash flow from/ (used in) Financing Activities	31.22	1,879.11	(606.20)
Net increase / (decrease) in cash and cash equivalents	7.29	(348.68)	312.92
Cash and cash equivalents at the beginning of the period / year	114.42	476.96	199.24
Cash and cash equivalents at the end of the period / year	105.45	114.42	476.96

Operating activities

Fiscal 2025

Net cash flows from operating activities aggregated to Rs. 871.61 lakhs for Fiscal 2025. Our restated Profit before tax of Rs. 2,043.67 lakhs, was adjusted for depreciation and amortization expense of Rs. 611.09 lakhs and finance cost of Rs. 410.55 lakhs, interest income of Rs. 56.84 lakhs, property, plant and equipment write off cost of Rs. 6.36 lakhs, profit on sale of current investments (net) cost of Rs. 4.90 lakhs, profit on sale of other property, plant and equipment (net) of Rs. 19.09 lakhs, liabilities no longer required written back of t31.16 lakhs, provision for doubtful receivables (net) of Rs. (35.39 lakhs), receivables written off cost of Rs. 117.48 lakhs, increase in market value of investment cost of Rs. 0.32 lakhs. Our changes in working capital for Fiscal 2025 primarily consisted of increase in (i) trade receivables of Rs. 2,732.08 lakhs (ii) in other current and assets of Rs. 112.60 lakhs, (iii) in other current liabilities of Rs. 511.01 lakhs and (iv) in trade payables of Rs. 147.78 lakhs, (v) in Liabilities associated with Non-Current Assets held for Sale of Rs. 10.00 lakhs, (vi) in other financial liabilities of Rs. 412.06 lakhs, (vii) in provisions of Rs. 121.60 lakhs, (viii) in bank balance other than cash & cash equivalent of Rs. 15.00 lakhs. This was partially offset by a decrease in other financial assets of Rs. 32.97 lakhs.

Fiscal 2024

Net cash flows from operating activities aggregated to Rs. 959.26 lakhs for Fiscal 2024. Our restated Profit before tax of Rs. 1,782.50 lakhs, was adjusted for depreciation and amortization expense of Rs. 545.82 lakhs and finance cost of Rs. 236.62 lakhs, interest income of Rs. 36.82 lakhs, property, plant and equipment write off cost of Rs. 0.11 lakhs, capital work-inprogress written off of Rs. 74.53 lakhs, profit on sale of land (net) cost of Rs. 12.99 ,profit on sale of other property, plant and equipment (net) of Rs. 12.20 lakhs, liabilities no longer required written back cost of Rs. 95.13 lakhs, provision for doubtful receivables (net) of Rs. 46.38 lakhs, receivables written off cost of Rs. 42.62 lakhs, increase in market value of investment cost of Rs. 5.58 lakhs. Our changes in working capital for Fiscal 2024 primarily consisted of increase in (i) trade payables of Rs. 917.02 lakhs, (ii) in other financial liabilities of Rs. 47.42 lakhs, (iii) in provisions of Rs. 183.23 lakhs, (iv) in trade receivables of Rs. 1,388.20 lakhs, (v) in other current and assets of Rs. of Rs. 682.83 lakhs and, (vi) in other financial assets of Rs. 54.68 lakhs. This was partially offset by a decrease in (i) other current liabilities of Rs. 112.43 lakhs, and (ii) in bank balance other than cash & cash equivalentt 3.71 lakhs.

Fiscal 2023

Net cash flows from operating activities aggregated to Rs. 1,742.24 lakhs for Fiscal 2023. Our restated Profit before tax of Rs. 2,262.80 lakhs, was adjusted for depreciation and amortization expense of Rs. 418.81 lakhs and finance cost of Rs. 212.24 lakhs, interest income of Rs. 30.23lakhs, property, plant and equipment write off cost of Rs. 0.29 lakhs, loss on sale of current investments (net) of Rs. 0.05 lakhs, profit on sale of other property, plant and equipment (net) of Rs. 1.58 lakhs, profit on sale of investment property of Rs. 10.91 lakhs, liabilities no longer required written back cost of Rs. 25.41 lakhs, provision for doubtful receivables (net) cost of Rs. (58.20 lakhs), receivables written off cost of Rs. 104.64 lakhs, increase in market value of investment cost of Rs. 0.55 lakhs. Our changes in working capital for Fiscal 2023 primarily consisted of increase in other current liabilities of Rs. 2 76.27 lakhs, increase in (i) other financial assets of Rs. 45.36 lakhs, (ii) other current and assets of Rs. 585.13 lakhs and (iii) liabilities associated with Non-Current Assets held for Sale of Rs. 16.00 lakhs, (iv) in provisions of Rs. 79.64 lakhs, (v) in bank balance other than cash & cash equivalent of Rs. 12.28 lakhs. This was partially offset by a decrease in (i) trade receivables of Rs. 335.67 lakhs, and (ii) other current liabilities of Rs. 276.27 lakhs and (iii) other financial liabilities of Rs. 158.13 lakhs.

Investing activities

Fiscal 2025

Net cash flows used in investing activities aggregated to Rs. 895.54 lakhs for fiscal 2025, primarily due to (i) Rs. 179.84 lakhs used for purchase of property, plant, and equipment, (ii) purchase of intangible assets Rs. 28.13 lakhs, capital work- in-progress of Rs. 843.16 lakhs, (iii) purchase of current investments of Rs. 48.42 lakhs and (iv) investment in fixed deposits (deposits maturing after 12 months) Rs. 321.35 lakhs. This was partially set off by (i) Rs. 160.27 lakhs generated from receipts on sale of current investments, (ii) receipts on disposal of property, plant and equipment of Rs. 30.31 lakhs, (iii) interest income Rs. 56.84 lakhs and (iv) redemption in fixed deposits (deposits maturing within 3-12 months) Rs. 277.94 lakhs.

Fiscal 2024

Net cash flows used in investing activities aggregated to Rs. 3,187.05 lakhs for fiscal 2024, primarily due to (i) Rs. 472.40 lakhs used for purchase of property, plant, and equipment, (ii) purchase of intangible assets Rs. 157.92 lakhs, (iii) capital work-in-progress of Rs. 2,327.34 lakhs, (iv) intangible assets under development of Rs. 8.35 lakhs, (v) purchase of current investments of Rs. 85.27 lakhs and (vi) investment in fixed deposits (deposits maturing within 3-12 months) Rs. 322.71 lakhs. This was partially set off by (i) Rs. 36.81 lakhs generated from interest income, (ii) redemption in fixed deposits (deposits maturing after 12 months) Rs. 42.58 lakhs and (iii) receipts on disposal of property, plant and equipment of Rs. 107.55 lakhs.

Fiscal 2023

Net cash flows used in investing activities aggregated to Rs. 823.13 lakhs for fiscal 2023, primarily due to (i) Rs. 543.87 lakhs used for purchase of property, plant, and equipment, (ii) purchase of intangible assets Rs. 101.85 lakhs, (iii) capital work-in-progress of Rs. 284.34 lakhs,(iv) purchase of current investments of Rs. 35.53 lakhs and (iv) investment in fixed deposits (deposits maturing after 12 months) Rs. 94.78 lakhs. This was partially set off by (i) Rs. 50.62lakhs generated from receipts on sale of current investments, (ii) receipts on sale of investment property Rs. 25.99 lakhs, (iii) receipts on disposal of property, plant and equipment Rs. 1.58 lakhs, (iv) interest income Rs. 30.23 lakhs and (v) redemption in fixed deposits (deposits maturing within 3-12 months) Rs. 128.82 lakhs.

Financing activities

Fiscal 2025

Net cash flows from financing activities aggregated to Rs. 31.22 lakhs for Fiscal 2025, primarily due to proceeds on issue of equity shares of Rs. 518.92 lakhs and proceeds from long-term borrowings of Rs. 395.19 which was offset by (i) principal re payment of long-term borrowings Rs. 181.84 lakhs; (ii) Repayment of Lease Liability of Rs. 107.87 lakhs; (iii) Interest and Other Borrowing Cost paid of Rs. 410.55 lakhs, and (iv) payment of dividend of Rs. 182.63 lakhs.

Fiscal 2024

Net cash flows from financing activities aggregated to Rs. 1,879.11 lakhs for Fiscal 2024, primarily due to proceeds from long-term borrowings of Rs. 2,659.83 which was offset by (i) principal re payment of long-term borrowings Rs. 210.88 lakhs, (ii) repayment of lease liability of Rs. 97.05 lakhs, (iii) interest and other borrowing cost paid of Rs. 236.62 lakhs, and payment of dividend of Rs. 236.17 lakhs.

Fiscal 2023

Net cash flows used in financing activities aggregated to Rs. 606.20 lakhs for Fiscal 2023, primarily due to proceeds from long-term borrowings of Rs. 130.27 which was offset by (i) principal re payment of long-term borrowings Rs. 268.07 lakhs, (ii) repayment of Lease Liability of Rs. 256.16 lakhs, (iii) interest and Other Borrowing Cost paid of Rs. 212.24 lakhs.

Financial Indebtedness

The following table sets forth our financial indebtedness as of June 30, 2025:

Category of borrowings	Sanctioned amount as on the June 30, 2025	Outstanding amount as on the June 30, 2025
Borrowings of Company
Fund based
Secured:
Working Capital Loan	3,000.00	2,979.87
Term Loan	2,746.00	2,229.93
Vehicle Loan	211.82	173.74
Unsecured:
Working Capital Loan	-	-
Term Loan	375.59	358.11
Non-fund based
Secured:
Bank Guarantee	5,800.00	3,473.72
Unsecured:
Bank Guarantee	-	-
Grand Total	12,133.42	9,215.37

*As certified by M/s. SRB & Associates, Chartered Accountants, our Statutory Auditors, pursuant to their certificate dated September 25, 2025.

For further details of financial indebtedness, see "FinancialIndebtedness" on page 346.

Liquidity and capital resources

We have historically financed the expansion of our business and operations through a combination of debt financing, and funds generated from our operations. From time to time, we also avail loan facilities to meet our short-term working capital requirements. We believe that, after taking into consideration the expected cash flows from our business and operations, the Net Proceeds from the Fresh Issue, and the proceeds from our existing bank borrowings, we will have adequate capital to meet our anticipated working capital and capital expenditure requirements if any for the 24 months following the date of this Draft Red Herring Prospectus. Our principal capital requirements relate to working capital funding, the servicing of principal and interest obligations on borrowings and acquisitions. Our primary source of funding has been, and is expected to continue to be, cash flows generated from operations, supplemented by borrowings from banks and financial institutions. For Fiscal 2025, Fiscal 2024, and Fiscal 2023, we met our funding requirements, including repayment of debt obligations, capital expenditure, investments, working capital, and other operational cash outflows, primarily through internal accruals, with the balance financed by external borrowings.

Capital expenditure

Capital expenditure primarily relates to addition of property, plant and equipment for purchase of furniture and fixtures, office equipment, computers, Servers and Networks, Electrical installations and equipment, Motor vehicles. The capital expenditure is primarily funded through cash generated from operations, supplemented by equity contributions by our shareholders and committed credit lines.

In Fiscals 2025, 2024 and 2023, we incurred capital expenditure for addition to property, plant and equipment of Rs. 3,352.17 lakhs, Rs. 731.33 lakhs and Rs. 543.86 lakhs primarily due to purchase of furniture and fixtures, office equipment, computers and electronic installation and construction of building.

Contingent liabilities

Particulars	Fiscal 2025	Fiscal 2024	Fiscal 2023
Claims against the Company not acknowledged as debts under:	3,012.23	2,273.64	1,896.71
Outstanding guarantees to Punjab National Bank in respect of the guarantees given by the bank in favour of various Govt. and other authorities

Capital Commitments

Particulars	Fiscal 2025	Fiscal 2024	Fiscal 2023
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)	649.54	935.37	1,454.35

Off-balance sheet commitments and arrangements

We do not have any off-balance sheet arrangements, derivative instruments, swap transactions or relationships with affiliates or other unconsolidated entities or financial partnerships that would have been established for the purpose of facilitating off-balance sheet arrangements.

Quantitative and Qualitative Analysis of Market Risks

We are exposed to various types of market risks during the normal course of business. For further details, see "Risk Factors" beginning on page mentioned below; may refer the schedule 45 and comment if this is it.

Credit risk

Credit risk arises when a customer or counterparty does not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing / investing activities, including deposits with banks, mutual fund investments and foreign exchange transactions. The Company has no significant concentration of credit risk with any counterparty.

The Company uses a provision matrix to measure the ECLs of trade receivables. The provision matrix is initially based on the Companys historical observed default rates. The Company will calibrate the matrix to adjust the historical credit loss experience with forward looking information. Based on evaluation carried out and to the best estimate of management, historical loss sufficiently covers expected loss as well as future contingencies and adjustment for forward looking factors are not considered significant, hence no adjustment for forward looking factors is carried.

Trade receivables: The companys exposure to credit risk is influenced mainly by the respective characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry.

The company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables. The companys receivables can be classified into two categories; one is from the non-Government customers and second is from the Government and quasi-Government customers. As far as receivables from the Government and quasi-Government are concerned, credit risk is Nil.

Collective Provisions: ECL is computed based on the trade receivable as at reporting year minus specific provision by applying the bucket wise lifetime loss rate (Probability of Defaults) determined for each reporting year.

Liquidity risk

Liquidity risk is the risk that the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or other financial asset. The companys approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are fallen due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the companys reputation.

Liquidity risk management implies maintaining sufficient cash and cash equivalents or other financial assets which can be converted into cash and cash equivalent within a reasonable period of time.

Management monitors rolling forecasts of the companys liquidity position on the basis of expected future cash flows. This is generally carried out in accordance with practice and limits set by the company. These limits vary by location to take into account requirement, future cash flow and the liquidity in which the company operates. In addition, the companys liquidity management strategy involves projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and exploring debt financing plans.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in the market prices. The Company is exposed in the ordinary course of its business to risks related to changes in foreign currency exchange rates and interest rates.

Interest rate risk

The Company is not exposed to interest rate risk because Company does not have any borrowed funds either at fixed or floating interest rates.

Price risk

The Companys exposure to equity securities prices risk arises from investments held by the company and classified in the balance sheet at as fair value through OCI & fair value through P&L. To manage its price risk arising from investments in securities, the company diversifies its portfolio and diversification is done in limit set by company.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companys exposure to the risk of changes in foreign exchange rates relates primarily to the Company s operating activities (when revenue or expense is denominated in a foreign currency).

Auditor qualifications and emphasis of matter

The extracts of the emphasis of matters and remarks by the Statutory Auditors included in the examination report on the Restated Consolidated Financial Information is set forth below:

V. "Substantial Doubt about Entitys Ability to Continue as a Going Concern:

c) CSM USA Inc for the Year Ended December 31, 2024

The accompanying financial statements have been prepared assuming that the company will continue as a going concern. As explained in Note 2 to the financial statements, the Company has suffered losses from current year operations USD 159,867 (equivalent to INR 136.81 Lakh) and accumulated losses of USD 287,247 (equivalent to INR 245.83 Lakh) and has a negative net worth USD 287,147 (equivalent to INR 245.74 Lakh). Managements evaluations of the events, conditions and future plans regarding these matters are also described in Note 2 of the Financial Statements. As described in Note 2, the Company has secured support from CSM Technologies Private Limited (Parent Entity) to honor its all-short-term obligation due within one year from the date of financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The conversion rate used is as 1 USD is equal to Rs. 85.58 as on 31st December, 2024.

Our opinion is not modified in this matter.

Note 2: to the Standalone Financial Statement to CSM USA Inc for the Year Ended December 31, 2024

The Company has incurred net losses USD 159,867 (equivalent to INR 136.81 Lakh) during the current year and has accumulated losses of USD 287,247 (equivalent to INR 245.83 Lakh) and has a negative net worth USD 287,147 (equivalent to INR 245.74 Lakh) as of for the year ended December 31, 2024. The company has cash available in hand and secure additional loan from its Parent entity for the year to support towards future liabilities and obligation and business operation of the entity to support its going concern. Management believes that and this cash parent entity support will sufficient to fund operation and meet its obligation as they come due within one year from the date of its financial statements are issued. The Company management is confident to successfully raise additional capital, Market towards existing services, increasing revenue and ultimately achieve profitable operations. The conversion rate used is as 1 USD is equal to Rs. 85.58 as on 31st December, 2024.

Considering the above measures in place, the company is confident maintain adequate liquidity and solvency. Hence these financial statements are prepared on a going concern basis which contemplates the realization of assets and satisfaction of liabilities in the Normal course of business.

d) CSM Tech Corp for the Year Ended December 31, 2024

The accompanying financial statements have been prepared assuming that the company will continue as a going concern. As explained in Note 2 to the financial statements, the Company has suffered losses from current year operations CAD $ 131,945 (equivalent to INR 78.40 Lakh) and accumulated losses as of 31st December 2024 of CAD $ 143,296 (equivalent to INR 85.14 Lakh) and has a negative net worth CAD $ 143,196 (equivalent to INR 85.08 Lakh) as of 31st December, 2024. Managements evaluations of the events, conditions and future plans regarding these matters are also described in Note 2 of the Financial Statements. As described in Note 2, the Company has secured support from CSM Technologies Private Limited (Parent Entity) to honor its all-short-term obligation due within one year from the date of financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The conversion rate used is as 1 CAD is equal to Rs. 59.42 as on 31st December, 2024.

Our opinion is not modified in this matter

Note 2: to the standalone financial statement to CSM Tech Corp for the Year Ended December 31, 2024

The Company has incurred net losses CAD $ 131,945 (equivalent to INR 78.40 Lakh) during the current year and accumulated losses as of 31st December 2024 of CAD $ 143,296 (equivalent to INR 85.14 Lakh) and has a negative net worth CAD $ 143,196 (equivalent to INR 85.08 Lakh) as of 31st December, 2024. The company has cash available in hand and secure additional loan from its Parent entity for the year to support towards future liabilities and obligation and business operation of the entity to support its going concern. Management believes that and this cash parent entity support will sufficient to fund operation and meet its obligation as they come due within one year from the date of its financial statements are issued. The Company management is confident to successfully raise additional capital, Market towards existing services, increasing revenue and ultimately achieve profitable operations. The conversion rate used is as 1 CAD is equal to Rs. 59.42 as on 31st December, 2024.

Though the company has no Revenue, considering the above measures in place, the company is confident maintain adequate liquidity and solvency. Hence these financial statements are prepared on a going concern basis which contemplates the realization of assets and satisfaction of liabilities in the Normal course of business.

VI. Emphasis of Matter

a) CSM India for the Year Ended March 31, 2024

We draw attention to Note 29.10 relating to Trade Receivables, which include 74.93 lakhs due for more than one year from foreign debtors. The company is in the process of complying all applicable laws pertaining realization.

Our opinion is not modified with respect to those matters.

b) CSM India for the Year Ended March 31, 2023

We draw attention to Note 29.11 relating to Trade Receivables, which include 23.57 lakhs due for more than one year from foreign debtors. The company is in the process of complying all applicable laws pertaining realization.

Our opinion is not modified with respect to those matters.

c) CSM Dubai for the Year Ended December 31, 2022

We draw attention to Note 2.2 to the financial statements, which describes the basis of accounting. The financial statements are prepared to assist the Company to meet the requirements of the Reserve Bank of India. As a result, the financial statements may not be suitable for another purpose.

Our opinion is not modified in this matter.

VII. Cut-Off Issues

a) CSM USA Inc for the Year Ended December 31, 2024

Observation- During the audit, we noted that transactions near the reporting periods end December 31,2024 were not consistently recorder in the correct accounting period. This misstatement can impact accuracy of financial reporting, particularly with respect to revenue and expenses.

b) CSM Tech Corp for the Year Ended December 31, 2024

During the audit, we noted that transactions near the reporting periods end December 31,2024 were not consistently recorder in the correct accounting period. This misstatement can impact accuracy of financial reporting, particularly with respect to revenue and expenses.

VIII. Companies (Auditors Report) Order, 2020

a) CSM India for the Year Ended March 31, 2023 Remarks

According to the information and explanations given to the previous auditor and the records examined by the previous auditor and based on the examination of the registered sale deed provided to them, it has been reported that the title deeds of the following immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) which are freehold, are not in the name of the Company as at Balance Sheet date:

Sr. No	Description of item of property	Gross Carrying Value as on March 31, 2023	Title deeds held in the name of	Whether promoter, director or relative of the employee	Property held since which date	Reason for not being held in the name of the company
1	Freehold land at Tangi, Plot No: 574,1033,1043,1127,1128,1132	17.70 lakhs	Padma Charan Baghasingha	NA	December 29, 2014	Mutation Pending
2	Freehold land at Tangi, Plot No: 1075		Rangabati Baghasingha	NA	December 29, 2014	Mutation Pending"

Unusual or infrequent events or transactions

Except as described in this Draft Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions including unusual trends on account of business activity, unusual items of income and discretionary reduction of expenses, etc. that have in the past or may in the future affect our business or results of operations.

Known trends or uncertainties

Our business has been subject to significant economic changes arising from the trends identified above in "Managements Discussion and Analysis of Financial Condition and Results of Operations - Significant Factors Affecting our Financial Conditions and Results of Operations" above and the uncertainties described in "Risk Factors" on page 42.

Future relationship between cost and revenue

Other than as described in "Risk Factors" and this section, there are no known factors that might affect the future relationship between cost and revenue.

Related party transactions

We have engaged in the past, and may engage in the future, in transactions with related parties. For details of our related party transactions, see "Other Financial Information - Related Party Transactions" on page 343.

Competitive conditions

We operate in a competitive environment. Please refer to "Risk Factors"", "Industry Overview" and "Our Business""on pages 42, 151 and 216, respectively, for further information on our industry and competition.

Seasonality and cyclicality of business

Our business is not subject to seasonality.

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 Fiscals, are as described in "Managements Discussion and Analysis of Financial Condition and Results of Operations - Fiscal 2025 compared to Fiscal 2024" and "Managements Discussion and Analysis ofFinancial Condition and Results of Operations - Fiscal 2024 compared to Fiscal 2023" above on pages 368, and 370, respectively.

Significant dependence on single or few customers

The table below outlines the contribution to our revenue from our top clients during the last three Fiscals:

Contribution from top Customer	Fiscal 2025		Fiscal 2024		Fiscal 2023
	Amount (in Rs. lakhs)	As a % of Revenue from Operations	Amount (in Rs. lakhs)	As a % of Revenue from Operations	Amount (in Rs. lakhs)	As a % of Revenue from Operations
Top 3	10,099.87	50.69	11,282.14	57.35	9,369.85	58.40
Top 5	12,696.58	63.72	13,408.59	68.16	11,193.08	69.77
Top 10*	15,452.96	77.56	15,933.38	81.00	13,127.65	81.82

*Our top ten customers include Spatial Planning & Analysis Research Centre Private Limited and Odisha Bridge and Construction Corporation Limited. Names of balance customers have not been provided either because relevant consents for disclosure of their names were not available or in order to preserve confidentiality.

New products or business segments

Except as disclosed in "Our Business"" on page 216, and products that we announce in the ordinary course of business, we have not announced any new products or business segments.

Significant developments occurring after March 31, 2025

Except as disclosed below, there are no significant developments after March 31, 2025 till the date of filing of this Draft Red Herring Prospectus:

The Board of Directors, in its meeting held on 4th June, 2025, approved a bonus issue of equity shares in the ratio of 5:1 (five new Equity Shares for every one existing Equity Share held on the record date). The said bonus issue was approved by the Shareholders by way of an ordinary resolution passed in the EGM held on June 10, 2025.

Consequently, the Company allotted 3,22,52,060 fully paid-up equity shares of Rs. 10 each as bonus shares on June 25, 2025.

In accordance with the requirements of paragraph 64 of Ind AS 33 - Earnings per Share, the basic and diluted earnings per share for all periods presented in these financial statements have been adjusted retrospectively to give effect to the bonus issue.

Recent accounting pronouncements

As on the date of this Draft Red Herring Prospectus, there are no recent accounting pronouncements, which, we believe, would have a material effect on our financial condition or results of operations.