Datamatics Global Services Ltd Management Discussions

INTRODUCTION

We are entering a new era where autonomous AI agents, humanoid robotics, spatial computing, quantum intelligence, synthetic biology, satellite internet, and clean energy ecosystems are rapidly moving from experimentation to large-scale real-world adoption. The convergence of these breakthrough technologies is reshaping industries, redefining business models, and accelerating the emergence of intelligent, connected, and autonomous enterprises.

Artificial Intelligence is now evolving beyond automation into systems capable of reasoning, learning, decision-making, and autonomous execution. Enterprises across the world are increasingly embedding AI into core operations to enhance productivity, improve customer experiences, strengthen resilience, and unlock new sources of growth. At the same time, advances in cloud computing, data engineering, cybersecurity, and digital infrastructure are enabling organizations to scale these innovations faster than ever before.

At Datamatics, we believe this shift marks the beginning of the AI- native enterprise era. Guided by an AI-first strategy, we continue to strengthen our capabilities across Digital Technologies, Digital Operations, and Digital Experiences to help enterprises modernize systems, orchestrate intelligent workflows, and drive measurable business benefits. Through investments in enterprise AI, AI-driven automation, agentic platforms, and hyperscaler partnerships, Datamatics is enabling organizations to navigate complexity, accelerate transformation, and build future-ready digital enterprises.

A. Economic Environment

According to the International Monetary Funds World Economic Outlook (July 2026), global economic activity is expected to navigate a period of evolving macroeconomic conditions. Global growth is projected at 3.0% in 2026 and 3.4% in 2027, reflecting a stable yet measured expansion. Global headline inflation is anticipated to rise modestly in 2026 before resuming a downward trajectory in 2027. These trends are expected to be more pronounced across emerging market and developing economies.

The United States, Datamatics largest market, is projected to grow from 2.1% in 2025 to 2.3% in 2026, before moderating slightly to 2.2% in 2027. This trend reflects a combination of policy adjustments, evolving trade dynamics, and a gradual normalization in consumer demand.

Europe is expected to grow at 0.9% in 2026, compared with 1.4% in 2025, followed by a modest recovery to 1.2% in 2027, indicating a gradual recovery path. Supporting factors include improved consumption driven by rising real wages, although broader structural and external uncertainties may continue to influence growth momentum. The United Kingdom is projected to grow at 1% in 2026, compared with 1.4% in 2025, before stabilizing at 1.3% in 2027

Indias growth is expected to moderate from 77% in 2025 to 6.4% in 2026 and marginally increase to 6.7% in 2027 This outlook

is supported by continued momentum in domestic demand, ongoing digital transformation initiatives, and sustained policy focus on infrastructure and economic development.

Overall, the global economic outlook reflects a balance between near-term adjustments and underlying resilience. While certain uncertainties remain, the fundamental drivers of growth, including consumption recovery, technological advancement, and policy support are expected to underpin steady economic activity over the medium term.

B. Business Review Digital Technologies

- The global IT services market, including outsourced and in-house services, is projected to grow at a CAGR of 9%, reaching US$1.6 trillion by CY26, with outsourced services accounting for US$790 billion of the total market . Enterprise priorities continue to center around high- impact service areas such as enterprise application services, custom application development, cloud services, cybersecurity, and data, analytics, and AI, reflecting a broader shift toward intelligent, platform- driven operations and resilience.

- Datamatics Digital Technologies business continues to advance its AI-first strategy, enabling enterprises to modernize core systems, harness data, and deliver measurable business benefits at scale. Digital Technologies is evolving towards an AI-native, platform- led model, moving beyond traditional services to outcome-driven transformation. The business delivers end-to-end enterprise transformation, enhancing customer experience in the front office, enabling data- driven intelligence in the mid-office, and driving efficiency in the back office through automation and agentic solutions. A key differentiator is Datamatics AI and Agentic Centre of Excellence, supported by its proprietary KAi suite (KAiBRE, KAiSDLC, KAiTest, KAiData, KAiCloud, KAiVision), improved productivity.

- Datamatics continues to strengthen partnerships with Microsoft, Google, and Salesforce, delivering cloud- native, AI-integrated solutions aligned with evolving enterprise needs.

Source: Gartner IT spending forecast 2026 and Everest Group

Digital Operations

- The business process services market, including outsourced and in-house services, is projected to grow at a CAGR of 2.5%, reaching US$1.9 trillion by CY26, with outsourced services accounting for US$315 billion of the total market. Within this space, Finance & Accounting Outsourcing (FAO) continues to grow at a CAGR of 7% and expected to reach US$ 21 billion by 2026. The global digital content market is projected to grow at 6% to reach US$170 billion in this period.

- Datamatics digital operations are anchored by FINATO, its Al-powered finance transformation platform that drives automation across the procure-to-pay, order-to-cash, and record-to-report cycles. The Company continues to invest in enhancing FINATOs capabilities in line with growing enterprise demand for efficiency, accuracy, and compliance. FINATO is evolving into a modular, AI-first, agentic platform, where intelligent agents are configured around customer-specific policies, workflows, and operating cultures. Designed as an adaptive and continuously learning system rather than a hard-coded solution, FINATO aims to enable autonomous finance operations with human-in-the-loop oversight.

- Datamatics launched TruAI Underwriting, an agentic AI-based solution designed to support and streamline insurance underwriting decisions. The solution enables insurers to assess financial and medical risks with improved speed, consistency, and accuracy across data-intensive cases. Lumina Datamatics is transforming content operations through AI-powered digital content strategies, streamlining workflows, enabling personalization, and enhancing user experience. Its acquisition of TNQTech, which operates in digital content for scientific journals gives it a technology platform and several patents in content enrichment. Lumina Datamatics serves 9 of the 10 largest publishers worldwide.

Source: Everest Group & Nasscom

Digital Experiences

- The global contact center market continues its strong growth trajectory, with projections indicating it will surpass US$200-230 billion by the end of the decade. However, 2026 marks a structural shift in how this growth is distributed. The contact center software segment alone reached US$62 billion in 2026, expanding at over 20% CAGR. The industrys transformation is now firmly AI-led. Organizations are moving beyond omnichannel strategies toward AI-first customer engagement models, where intelligent systems increasingly handle interactions, optimize workflows, and augment human agents.

- Datamatics Digital Experiences solution blends Digital, AI, and Analytical capabilities to deliver outstanding customer experiences through its omnichannel contact centers. This innovative AI-First framework transforms contact centers into modern CX Command Centers, incorporating digital interventions to drive customer satisfaction and brand loyalty.

- The solution encompasses omnichannel capability, an in-built case management system, automated quality with voice of customer, Agent Assist & next best action, AI, Analytics and Open AI Integration. With a focus on optimizing Total Cost of Ownership, enabling selfservice, and delivering hyper-personalization across all touchpoints in the customer journey, Datamatic ensures exceptional experiences for agents and customers.

Source: Gartner, Forrester, Everest Group

Key Industry Focus

- Datamatics has identified Banking & Financial Services, Insurance, Manufacturing Logistics and Publication as the key focus industries. According to Gartner and

IDC estimates for 2027, banking & financial services is expected to remain the largest technology spender with an estimated IT and BPM market size of $1.25 trillion and projected growth of 8-10%, driven by AI-led banking, fraud analytics, and core modernization initiatives. Insurance spending is estimated at $380 billion with 7-9% growth, driven by claims automation, AI underwriting, and digital servicing. Manufacturing spending is estimated at $1.05 trillion with 9-11% growth, supported by smart factories, and AI-enabled supply chains. Logistics is projected to witness the fastest growth at 10-13%, reaching $340 billion, fuelled by supply chain digitization and warehouse automation.

- Datamatics has already delivered several transformational success stories across these industries. Its domain expertise and digital transformation capabilities in sectors such as Manufacturing and Logistics have also been consistently recognized by leading analyst firms including Gartner and Everest Group.

- Datamatics has further strengthened its AI-led offerings by developing AI Agents for Insurance, Banking, and Logistics, enabling autonomous workflow orchestration, intelligent decision-making, and enterprise-wide productivity enhancement at scale.

Source: Gartner, IDC

Key Analyst Recognition:

Digital Technologies:

- Everest recognized TruCap+ IDP as Major Contenders in Intelligent Document Processing (IDP) Products PEAK Matrix? Assessments 2026

- Quadrant recognized Datamatics as Leaders in SPARK Matrix: Intelligent Document Processing 2025

- IDC recognized TruCap+ IDP as Major Players in MarketScape Assessment for Worldwide IDP processing software 2025

- Everest Group recognized Datamatics as Major Contenders in Intelligent Process Automation Platform (IPAP) and Full Suite IPAP - Technology Provider Compendium 2026

- Everest Group recognized Datamatics as Major Contenders in Intelligent Process Automation (IPA) Solutions PEAK Matrix? Assessment 2025

- ISG recognized Datamatics as Product Challengers in Provider Lens™ Intelligent Automation Services 2025 study for Intelligent Enterprise Automation (Europe & US).

- ISG recognized Datamatics as Contenders in Provider Lens™ study Intelligent Enterprise Automation for AIOPS for IT US 2025

- ISG recognized Datamatics as Contenders in Provider Lens™ for Intelligent Automation Services 2025 - Next-Gen Automation (Europe & US)

- Nelson Hall Recognized Datamatics as Leaders in Gen AI Services category and overall Major Players for Gen AI & Process Automation Banking NEAT Assessment 2025.

- Avasant recognized Datamatics as Challengers in Salesforce Service 2025 Radarview Data Management and Advanced Analytics Services Assessment

- Avasant recognized Datamatics as Challengers Data Management and Advanced Analytics Services 2025 RadarView

- Everest recognized Datamatics as Major Contenders in Data and AI (D&AI) Services for Mid-market Enterprises PEAK Matrix? Assessment 2025

- Everest recognized Datamatics as Major Contenders in Application Development Services for AI Applications PEAK Matrix? Assessment 2025

- Everest recognized Datamatics as Major Contenders in Application Transformation Services for AI Applications PEAK Matrix? Assessment 2025

Digital Operations:

- Gartner recognized Datamatics as Niche Players in Magic Quadrant for Finance and Accounting Business Process Outsourcing, 2025 for the fourth consecutive year

- Gartner recognized Datamatics in Critical Capabilities for Finance and Accounting Business Process Outsourcing, 2025

- Everest recognized Datamatics as Major Contenders in Finance and Accounting Outsourcing (FAO) PEAK Matrix? Assessment 2025

- ISG recognized Datamatics as Product Challengers" in Finance and Accounting Outsourcing Services ISG Provider Lens™ Study, 2025 - Global

- ISG recognized Datamatics as Product Challengers in Global Capability Center (GCC) Services for Optimization and Enhancement 2025 ISG Provider Lens™ Study

- Avasant recognized Datamatics as Challengers in Banking Process Transformation 2025 RadarView

- Everest Group recognized Datamatics as Major Contenders in Order-to-Cash (O2C) Product PEAK Matrix? Assessment 2025

Digital Experiences:

- Everest Group recognized Datamatics as Major Contenders in PEAK Matrix for Customer Experience Management (CXM) Services, Americas Region PEAK Matrix? Assessment 2025

- ISG recognized Datamatics as Product Challengers in Provider Lens™ study Contact Center - Customer Experience Services 2025

- Quadrant recognized Datamatics as Strong Contenders in SPARK Matrix™: CX Management Services, 2025

- Everest Group recognized Datamatics as Aspirants in Customer Experience (CX) Services in Insurance Operations PEAK Matrix? Assessment 2025

- Quadrant recognized Datamatics as Leaders in SPARK Matrix™: Contact Center Outsourcing Services, 2025

Key Awards & Recognition:

- Dr. Lalit Kanodia, Chairman Datamatics Group Won the Transformational Impact on Industry 2024 award at MRSI Golden Key Awards

- Rahul Kanodia, Vice Chairman & CEO, Datamatics, conferred Honorary Doctorate by Amity University, Kolkata

- Rahul Kanodia, Vice Chairman & CEO, Datamatics recognized as CEO of the Year award at The Business Leader of the Year Awards 2025

- Datamatics won the Most Humane Organization award at MRSI Golden Key Awards

- Datamatics won Indias Top 100 Organisations in DEI Excellence 2025 - In Partnership with Ernst & Young

- Sameer Kanodia, Vice-Chairman & CEO, Lumina Datamatics, was honored with the CEO of the Year? Award for the second consecutive year.

- Sameer Kanodia, Vice-Chairman & CEO, Lumina Datamatics, was honored with the "Charismatic Business Leader" award at the International CXO Conference - PeopleFirst HR Excellence Awards.

- Lumina Datamatics was certified as a Great Place To Work? for the third consecutive year.

- Lumina Datamatics was recognized as "Asias Most Admirable Brand" at the Asian Brand & Leadership Awards 2025.

- Sameer Kanodia was named "Asias Leader of the Year" at the Asian Brand & Leadership Awards 2025.

- Lumina Datamatics was awarded "Most Preferred Workplace for Women 2024-2025" by Marksmen Daily.

- Lumina Datamatics received the Indo-American Corporate Excellence Award for Excellence in Service (Indian Company in the US) from the Indo-American Chamber of Commerce.

- Lumina Datamatics was recognized among the ET Now Best Organisations to Work 2025 by the Times Group.

C. Business drivers

- Invest in AI Services: Datamatics continues to invest in artificial intelligence, machine learning, and generative AI to expand its AI-led services portfolio. These investments focus on building advanced AI use cases, strengthening responsible AI frameworks, and embedding AI across operations, platforms, and customer experiences. By scaling AI services, the Company aims to drive higher- value engagements, improve margins, and address growing enterprise demand for intelligent automation and data-driven decision-making. We have rolled out Google Gemini Enterprise AI across the organization, empowering our teams to build intelligent agents, improve productivity, and drive innovation at scale. This strengthens our AI-first culture and positions Datamatics for sustainable growth and long-term value creation. TruAI is Datamatics enterprise AI suite for agentic automation, built for complex, decision-intensive processes by combining AI capabilities with process expertise. TruAI Underwriting is the first Agentic AI-based solution in this portfolio, designed to support and streamline insurance underwriting decisions. We will continue to innovate in the

AI space and currently working on the development of intelligent AI Agents designed to deliver contextual and autonomous support across business functions.

- Increasing market presence in US And Europe:

Datamatics aims to deepen its footprint in the United States and Europe, which represent the largest and fastest-growing markets for digital transformation, AI, and automation services. The Company has strengthened local sales, solutioning, and delivery capabilities to be closer to customers, improve deal velocity, and increase wallet share within existing accounts. This focus enhances revenue diversification, increases exposure to high-value enterprise clients, and supports long-term, sustainable growth.

- Strengthen Customer Relationships: Datamatics is focused on building deeper, long-term relationships with clients by transitioning from project-based engagements to strategic, outcome-driven partnerships. By aligning solutions more closely with customer business objectives, the Company aims to improve client lifetime value, and expand cross-sell and up-sell opportunities across Digital Technologies, Digital Operations, and Digital Experiences.

- Collaboration with Hyperscalers - Microsoft, Google,

Salesforce: Strategic partnerships with leading

Hyperscalers such as Microsoft, Google, and Salesforce are central to Datamatics go-to-market strategy. These alliances enable the Company to co-create industry- specific solutions, accelerate cloud and AI adoption for clients, and access joint sales and innovation ecosystems.

- Industry Focus: Datamatics is strengthening its

focus on high-growth industries including Banking & Financial Services, Insurance, Manufacturing, Logistics and Publication where enterprises are accelerating investments in AI, automation, and digital transformation. By combining deep domain expertise with AI-led solutions and platforms, the company is well-positioned to address evolving customer needs and drive long-term growth across these strategic sectors.

D. Business performance

Datamatics reported consolidated revenues of f 1,9872 Crores, reflecting a year-on-year growth of 15.3%. Our Consolidated EBIT stood at f2876 Crores, with an EBIT margin of 14.5%.

Digital Technologies including Digital Transformation Service & Intelligent Automation contributed 32% of total revenue and a 4.5% de-growth year-over-year. On the other hand, Digital Operations including Digital Finance & Digital Content contributed 55% of total revenue and witnessed a 40.2% growth (including acquisition of a subsidiary) year-over-year and Digital Experience including Customer Experience & Research & Analytics contributed 13% of total revenue and a 8.0% de-growth year-over-year.

E. Financial Performance Balance Sheet

Equity and Liabilities

EQUITY (INR in Crores)

Particulars	March 31, 2026	March 31, 2025	Change
Total equity	1535.95	1356.41	179.54

? The movement in retained earnings was on account of profit earned during the year and payment of dividends.

LIABILITIES (INR in Crores)

Particulars	March 31, 2026	March 31, 2025	Change
Non-current liabilities	254.26	410.89	(156.63)
Current liabilities	564.86	289.10	275.76
Total liabilities	819.12	699.99	119.13

? Liabilities include lease liabilities, capital expenditure creditors, borrowings, fair value of consideration payable for acquisitions, outstanding forward contracts at fair value, provisions for share appreciation rights, trade payables, unearned revenue, customer advances, and employee benefit obligations. The increase in liabilities due to increase in contingent consideration, provisions for employee benefits, trade payables, and lease liabilities. These were partially offset by a reduction of repayment of secured loans, statutory dues, advance from customers and unearned revenue.

ASSETS (INR in Crores)

Particulars	March 31, 2026	March 31, 2025	Change
Non-current Assets
Property, Plant and Equipment, capital work in progress	118.25	116.33	1.92
Goodwill / other intangibles/ Right- to-use assets	741.50	722.71	18.79
Other non- current assets	372.29	32712	45.17
Total	1232.04	1166.16	65.88

? The increase during the period was primarily due to increase in right to use assets, deferred tax assets, investments, unbilled revenue and deposits.

(INR in Crores)

Particulars	March 31, 2026	March 31, 2025	Change
Current Assets
Investment, cash and cash equivalents, bank balances (Cash, bank and investments)	563.60	365.33	198.27
Receivables	341.76	301.82	39.94
Other	21767	223.09	(5.42)
Total	1123.03	890.24	232.79

Other current assets include security deposits, accrued revenue, balances with government authorities, prepayments, and various financial assets. The overall increase in current assets was mainly driven by higher trade receivables and investments.

Tax expense

? The annual tax expenditure stood at f 65.14 Crores, up from last years f 43.79 Crores. The Effective Tax Rate (ETR) for the current year was 25.0% as against 176% in previous year.

Statement of Profit and Loss Revenue from operations

? Revenue stood at f 198715 Crores compared to f 1723.36 Crores in FY25, representing a growth of 15.3%.

Profit after Tax

? Net profit after non-controlling Interest decreases from f 205.02 Crores in FY 2024-25 to f 194.21 Crores in FY 2025-26 due to exceptional loss during the current year and exceptional gain during the previous year.

? A five-year revenue trend is presented below:

Cash Flow

(INR in Crores)

Particulars	March 31, 2026	March 31, 2025	Change
Interest, dividend and profits on investments	39.84	41.36	(1.51)
Exchange Gain	13.36	-	13.36
Miscellaneous Income (including Advances and excess provisions written back and profit on sale of fixed assets)	2.88	5.08	(2.20)
Total	56.08	46.44	9.64

Expenditure

? Operating costs (excluding depreciation and financing) encompass employee benefits, IT products and licenses, and various other expenditures. Operating expenses rose to f 1615.55 Crores in FY 2025-26 from f 1494.10 Crores the previous year. The ratio of operating expenses to revenue from operations has decreased from 86.7% in FY 2024-25 to 81.3% in FY 2025-26.

Particulars	2025-26	2024-25
Operating activities	323.99	223.72
Investing activities	(316.54)	(24923)
Financing activities	(83.67)	118.91
Net Cash flow during the year	(76.22)	93.40

Key Financial Ratios

Particulars	Refer notes for variance	March 31, 2026	March 31, 2025	Variance
Profitability Ratios
EBITDA Margin (%)	1	18.7%	13.3%	40.6%
EBIT Margin (%)	1	14.5%	10.5%	376%
PBT Margin (%)	1	15.9%	12.3%	293%
PAT Margin (%)		9.5%	11.6%	(17.9%)
EPS Basic (Rs.)		32.86	34.71	(5.3%)
Return on Equity (ROE) (%)		17.9%	14.9%	20.4%
Liquidity Ratios
Current Ratio (In Times)	2	1.99	3.08	(35.4%)
Efficiency Ratios
Debtors Turnover (No. of days)		63	57	10.6%
Leverage Financial Ratios
Debt Equity Ratio		0.09	0.12	(20.9%)
Interest Coverage Ratio	3	0.06	0.04	571%

1. Increase profit during the year.

2. Decrease in current assets during the year.

3. Increase in interest expenses during the year.

? Employee benefits expense has increased to f 1227.25 Crores in FY 2025-26 from f 1118.31 Crores in FY 2024-25. Employee benefit expenses to revenue from operations has decreased from 64.9% of in FY 2024-25 to 61.8% in FY 2025-26.

Depreciation and Amortization

? There is increase in depreciation to 84.03 Crores in FY 2025-26, from 48.04 Crores due acquisition amortization of customer contracts and depreciation on lease assets.

F. Risk management

The Companys global operations bring in considerable complexities and in response to that, Datamatics has established a robust enterprise risk and compliance management framework and process. This process provides an enterprise-wide view of risks and compliance which enables it to take a more holistic approach towards informed decision making. Some significant risks that could hinder Company operations are identified below:

Global Economic Risk

Datamatics derives significant portion of its revenues from overseas markets. Adverse changes in global economic conditions, such as inflation, reforms in tax laws, shifts in fiscal and monetary policies in these markets can increase cost pressure and negatively impact the Company in multiple ways. The Company may also witness price reduction, lose key projects and customers, deterring financial performance.

Employee Related Risks

Risk Overview & Impact

Datamatics business success and long-term value creation are fundamentally driven by the quality, expertise, and dedication of its workforce. Operating in a highly dynamic and specialized industry, the inability to attract, retain, and motivate high-caliber talent poses a potential risk to operational delivery, service quality, and client satisfaction.

Continuous Learning & Growth: The Company maintains a robust culture of continuous learning and skill enrichment, empowering employees to advance their careers and adapt to evolving client requirements.

The total number of Employees including subsidiaries as on March 31, 2026 was 15,744 as against 15,660 as on March 31, 2025.

Talent Management

To mitigate talent-related risks and reinforce market competitiveness, Datamatics actively aligns its Human Resources strategy with overall business objectives:

Employer Engagement: Datamatics continuously strengthens its corporate reputation to be recognized as an employer of choice, driving engagement and talent retention initiatives.

Targeted Talent Acquisition: The Company focuses on recruiting specialized expertise across all business verticals, ensuring optimal staffing levels and geographic deployment to enhance market differentiation.

Business Continuity and Information Security Risk

Datamatics recognizes the business continuity risks arising out of global disruptions such as natural disasters, IT outages, cyberattacks, pandemic, terror, political unrest and power disruptions. Such events can potentially impact availability of people and process, technology and infrastructure.

To address these risks, the Company has a well-defined, robust and tested Business Continuity Plan (BCP) and Disaster Recovery (DR) processes in place. As a part of this plan Datamatics have identified Primary and secondary locations that are equipped with the necessary infrastructure and facilities to ensure that the business processes can continue uninterrupted had there been any disaster. There are dedicated, trained and empowered cross-functional teams at various levels in all locations to ensure that the BCP and DR processes are implemented in shortest possible times. Readiness according to the BCP and DR processes are regularly tested through surprise mock drills and audits. The audit and mock-drill findings are reviewed by senior management in Management Information Security Forum

(MISF) - forum comprising senior management responsible for managing security posture of organization at par with current cybersecurity trends. These measures have proven effective in real scenarios, where customer processes were successfully restored within defined timelines, earning commendation from clients. Likewise during the global pandemic Datamatics ensured smooth transition of operations in the Work from home ( WFH ) mode seamlessly.

The Companys operations and Information Security Practices have been successfully assessed and are compliant to ISO 27001:2022, ISO 9001: 2015, SSAE 18 SOC 1 and SOC2 requirements and HIPAA requirements. The Company has PCI- DSS certification. To boost our Europe government business operations while maintaining security and privacy company has implemented Cyber Essentials, Cyber Essentials Plus and GDPR compliance. All These standards are especially critical to the financial, insurance and healthcare industries.

Moreover, Datamatics successfully implemented series of security solutions such as Security Information and Event Management (SIEM) solution, MDR , Data Leakage Prevention ( DLP) solution to strengthen Information security management framework. Additionally, to safeguard the security posture of its publicly exposed web applications Datamatics has implemented WAF across all these applications and it health is consistently monitored using security monitoring tools such as Upguard and BitSight.

Business resilience plays vital role in ensuring business operations continue irrespective of any threats that has potential to impact it. Datamatics has Disaster Management and business resumption plan in place which ensures business continues to operate within specified RTO and RPO. To fulfil this Datamatics has built redundancies in terms of servers, Leased line, internet connectivity, data backup. All systems we use upgraded regularly in terms of hardware, Operating systems as well as applications.

To ensure compliance against the personal data of Indian citizens Datamatics has already started the DPDPA process and should be completed by July end. Already Gap analysis, awareness training, identification of personal data within systems, Data privacy impact assessment has been completed.

Competition Risk

The technology market is evolving at an unprecedented pace. The world is moving towards smart automation and the emerging digital technologies are disrupting and changing the paradigm of business operations across Industries. This rapid transformation intensifies competitive risk. Datamatics mitigates these risks through a multi-pronged approach:

- Datamatics invests in new technologies and product development in Robotics, Artificial Intelligence "Agentic AI", Mobility and Analytics and consistently updates its own IP solutions in the digital technology space.

- Adopting a customer centric approach together with its ability to innovate customer specific solutions, through its in-house incubation hub, DataLabs, Datamatics conducts research and development based on emerging trends and cutting-edge technologies.

Legal and Regulatory Compliance Risk

Datamatics operations keep expanding, increasing the scope of processing data. Legislations such as Digital Personal Data Protection Act (DPDPA) in India, General Data Protection Regulation (GDPR) in Europe and California Consumer Privacy Act (CCPA) in the United States carry severe consequences for non-compliance or breach. Any violation or security breach, non-compliance or inadequacy of privacy policies and procedures can result in substantive liabilities, penalties and reputation impact. Furthermore, Privacy landscape is continuously shifting as governing bodies worldwide scrutinize the adequacy of privacy laws and regulations.

To keep the Company protected against the risk of data privacy breach, all its contracts with the customers in the EU region are monitored to continuously incorporate GDPR requirements. A dedicated Data Protection Officer (DPO) has been appointed to address issues, if any, raised around GDPR compliance. Regular online training and workshops on Data Privacy and GDPR are conducted to foster a culture of awareness and responsibility among its employees. GDPR awareness is an integral part of the employee induction program.

Further, Datamatics also continues to operate in a dynamic ESG regulatory environment across global markets. Evolving requirements around climate disclosures and responsible business conduct can lead to operational, financial and reputational impacts if not effectively managed. To mitigate this risk, Datamatics has established ESG oversight via ESG committee ensuring ESG is embedded into enterprisewide decision making and is continuously monitored. Also, enhanced disclosure systems are established whereby Business Responsibility & Sustainability Report is published annually.

Datamatics also continues to engage professional consultants, working under the supervision of its dedicated in-house compliance team, to proactively identify and manage compliance risks. The team is well-equipped to ensure adherence to both domestic and international laws and regulations. Changes in applicable regulations are continuously monitored and tracked on a global scale.

Currency R isk

Datamatics derives majority revenues in foreign currencies. Volatility in currency exchange movements can negatively impacts Companys financial performance. Through appropriate hedging strategy and business marketing practices aligned with market best practices, the management team takes adequate steps to minimize currency-related value erosion. The Company consistently reviews economic scenario and updates policies accordingly.

Internal Control Systems and their Adequacy

Datamatics has mechanisms in place to establish and maintain adequate internal controls over all operational and financial functions. The Company intends to undertake further measures as necessary in line with its intent to adhere to procedures, guidelines, and regulations as applicable in a transparent manner.

The Company has appointed, M/s. Ajmera & Ajmera, Chartered Accountants, Mumbai as Internal Auditors of the Company. During the year, the Internal Auditor has carried out Company audit on significant areas affecting the Companys business. The Audit Committee reviews its findings and recommendations at periodic intervals.

The Companys internal control system is adequate considering the nature, size and complexity of its business.

G. Outlook

Datamatics remains optimistic about the growth prospects in the current fiscal year. The company will continue to focus on key strategic areas including artificial intelligence, talent development, expansion in key international markets, and investments in technology and research. These initiatives are aligned with the Companys vision to enable customers in their digital transformation journeys and drive sustained long-term growth.

AI-First Approach. Artificial intelligence is a key area of focus for Datamatics. The company has set up a Center of Excellence to support customers in exploring and scaling AIled initiatives. Our approach is centered on building practical, use case-driven AI solutions that can bring efficiency and value to business operations.

Strengthening Hyperscaler Capabilities. Datamatics is investing in building competencies across major hyperscaler platforms such as Microsoft, Google, and Salesforce. Collaboration with the Hyperscalers will help enhance credibility, shortens sales cycles, and strengthens Datamatics positioning as a trusted digital transformation partner.

Focus on the US, European markets. The US and Europe continue to be key markets for Datamatics. With established regional teams and focused go-to-market initiatives, the company aims to further strengthen its presence and deepen customer relationships in these regions.

Industry-Focused Solutions. Datamatics is aligning its solutions to better serve industries such as Banking, Financial Services, Insurance (BFSI), Manufacturing, and Logistics. By combining domain knowledge with technology expertise, we are helping organizations in these sectors address specific business challenges and improve operational efficiency.

Talent Development and Innovation. To support future growth, Datamatics will continue to invest in people, processes, and technology. This includes upskilling programs, expanding global talent, and enhancing digital capabilities to meet evolving customer needs. The company remains focused on delivering long-term value through innovation and strong customer partnerships.

As opportunities across markets broaden, the Company continues to prioritize innovation and deeper client engagement. By working closely with customers, Datamatics aims to advance their digital transformation agendas and enable them to move confidently into the next phase of growth.