Innovana Thinklabs Ltd Management Discussions

INTRODUCTION:

The Management Discussion and Analysis Report (MDAR) serves as a direct communication from the management of Innovana Thinklabs Limited to its esteemed shareholders, providing valuable insights into the prevailing business environment and the future prospects of the Company. This Report presents a comprehensive overview of the Companys objectives, strategies, industry outlook, predictions, and forward-looking statements, thereby enabling stakeholders to understand the overall direction and performance of the business. Being an integral part of the Boards Report, the MDAR covers aspects relating to industry structure and developments, opportunities and threats, outlook, risks and concerns, internal control systems and their adequacy, as well as material developments in human resources and industrial relations. The financial statements of Innovana Thinklabs Limited are prepared in accordance with the Indian Accounting Standards (Ind AS), notified under Section 133 of the Companies Act, 2013 ("the Act"), read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the relevant amendment rules issued thereafter. The financial statements have been prepared under the historical cost convention on an accrual basis, except for certain financial instruments that are measured at fair value, and are also in compliance with the guidelines issued by the Securities and Exchange Board of India (SEBI). The vision of Innovana Thinklabs Limited is to be the preferred technology partner across the globe, delivering innovative digital solutions and software products that enhance customer experiences and create long-term value for all stakeholders. The Companys values and guiding principles are deeply embedded in its culture and are reflected in all activities undertaken. These principles revolve around seven key aspects – Customer Satisfaction, Innovation, Quality Products and Services, Employee Growth, Culture, Responsibility towards Society, and Environmental Protection. Together, they form the foundation of the organizations growth, ensuring excellence in offerings, fostering a collaborative work environment, empowering employees, contributing to community development, and committing to sustainability. These guiding principles have evolved into the culture of the Company, ensuring that both internal and external stakeholders remain satisfied while the business continues its journey of sustainable growth. GLOBAL ECONOMIC OVERVIEW The global economy in the financial year 2024–25 witnessed a blend of cautious optimism and lingering uncertainty. A notable development has been the moderation of inflation across major economies, providing much-needed relief after a prolonged period of elevated price pressures. This easing trend, aided by stabilizing commodity prices and improved supply chain efficiencies, has enabled central banks in advanced economies to maintain tight monetary policies without resorting to further aggressive rate hikes. Although interest rate cuts have remained limited, the more predictable inflation trajectory has contributed to stabilizing financial markets and has laid a steady foundation for a gradual and sustainable economic. However, the progress of the global economy during the year was overshadowed by renewed geopolitical and trade tensions, particularly between the United States and China. The year 2024–25 was also marked by major global elections, adding another layer of complexity to the already fragile business environment. Monetary policy, with a strong focus on interest rate adjustments in advanced economies, remained a key determinant of financial conditions. Emerging markets reflected a mixed performance, influenced by commodity price movements and debt-related vulnerabilities. Persistent trade tensions and supply chain disruptions further strained global commerce and investment flows, while geopolitical volatility weighed heavily on business sentiment.

For the global technology sector, including Innovana Thinklabs Limited, these macroeconomic challenges coincided with transformative opportunities in Artificial Intelligence (AI), renewable energy adoption, and digital innovation. While these trends offer significant productivity gains and new business avenues, they also bring challenges in terms of workforce readiness, cybersecurity concerns, and the need for accelerated innovation cycles. According to the International Monetary Funds WORLD ECONOMIC OUTLOOK (April

2025), global GDP growth projections were revised downward from 3.3% in 2024 to 2.8% in 2025 and 3.0% in 2026, largely due to heightened trade frictions, inflationary pressures in the U.S., and weakening consumer sentiment (IMF WEO, April 2025). Additionally, the Organisation for Economic Co-operation and Development (OECD) has highlighted that effective tariff rates are at levels not seen in nearly a century, resetting the global trade system and creating uncertainty for cross-border operations (OECD Economic Outlook, 2025). This has dampened both consumer and business confidence, discouraging big-ticket expenditures and slowing investment cycles. As noted by the World Bank, global growth is expected to stabilize around 2.7% in 2025–26, below pre-pandemic averages, with downside risks continuing to dominate the outlook (World Bank Global Economic Prospects, 2025). Against this backdrop, Innovana Thinklabs Limited remains cautious yet optimistic. The Company recognizes that while the global IT sector is exposed to risks stemming from geopolitical and trade uncertainties, it is equally poised to benefit from the accelerating demand for digital solutions, AI-driven technologies, and cybersecurity services. Innovanas strategic focus on innovation, efficiency, and global market expansion positions it well to navigate the evolving environment, mitigate risks, and create sustainable value for its stakeholders. DOMESTIC ECONOMY OVERVIEW India remained one of the worlds fastest-growing major economies in FY 2024–25, demonstrating resilience amidst global uncertainties. According to the Reserve Bank of India (RBI) and the Ministry of Finance, Indias GDP growth for FY 2024–25 is projected at around 6.5%, driven by strong domestic demand, robust services sector performance, and continued public sector capital expenditure (RBI Monetary Policy Report, April 2025, Union Budget 2025–26, Ministry of Finance). Headline inflation moderated to an estimated 4.5% in 2025, aided by stable food and energy prices, though supply-side risks such as climate variability and global commodity volatility remain a concern (IMF WEO, April 2025). Macroeconomic fundamentals remained stable during the year. Indias foreign exchange reserves crossed USD 650 billion, providing a comfortable external buffer (RBI Weekly Statistical Supplement, 2025). Fiscal policy remained growth-oriented, with the fiscal deficit targeted at 5.1% of GDP for FY 2025–26, on track with the governments medium-term consolidation roadmap (Union Budget 2025–26). Tax collections recorded buoyancy, reflecting healthy corporate and consumption trends. The Indian IT-BPM industry continued to play a pivotal role in the domestic economy, contributing nearly 7.5% to Indias GDP and employing over 5.4 million professionals (NASSCOM Strategic Review 2025). The sector benefitted from rising global demand for digital services, Artificial Intelligence (AI), cloud computing, and cybersecurity solutions, while domestic adoption of digital platforms accelerated through government-led initiatives such as DIGITAL INDIA and STARTUP INDIA. For Innovana Thinklabs Limited, this favorable domestic environment presents significant opportunities. Rising internet penetration, supportive government policies, and the increasing reliance on digital technologies by businesses and individuals provide a strong platform for expanding its product portfolio and strengthening its leadership in software and digital solutions.

INDUSTRIAL STRUCTURE AND DEVELOPMENTS

The Indian Information Technology (IT) and Software industry continues to be a cornerstone of the nations economic growth, contributing significantly to GDP, exports, and employment. The sector has evolved into a global hub for technology services, software products, and digital transformation solutions, supported by strong talent availability, robust infrastructure, and government initiatives. According to NASSCOM Strategic Review 2025, the Indian IT-BPM industry is estimated to cross USD 270 billion in revenues during FY 2024–25, growing steadily despite global uncertainties. Software product companies and digital solution providers are increasingly contributing to this growth by addressing global demand for emerging technologies such as Artificial Intelligence (AI), Machine Learning (ML), Data Analytics, Cloud Computing, Cybersecurity, Internet of Things (IoT), and Blockchain. This shift from traditional IT services to high-value digital and product-based solutions reflects a structural transformation of the industry. Government initiatives such as Digital India, Startup India, and Production Linked Incentive (PLI) schemes for IT hardware and electronics have further accelerated innovation, digital adoption, and entrepreneurship. Rising domestic internet penetration, favorable demographics, and strong capital inflows in the technology ecosystem are creating a dynamic industrial landscape. The global IT industry also witnessed significant developments in FY 2024–25. While geopolitical uncertainties and trade restrictions weighed on overall business confidence, enterprises worldwide continued to prioritize digital transformation to enhance efficiency, resilience, and competitiveness. According to Gartner, global IT spending is expected to exceed USD 5.1 trillion in 2025, reflecting sustained demand for digital technologies and cloud-based solutions. BUSINESS OUTLOOK The global Information Technology (IT) and Software industry continues to demonstrate robust growth despite the prevailing global uncertainties. According to Gartner, worldwide IT spending is projected to reach USD 5.1 trillion in 2025, up 8% year-on-year, driven by continued investments in Artificial Intelligence (AI), Cloud Computing, Cybersecurity, and Software-as-a-Service (SaaS) models (Gartner IT Spending Forecast, 2025). The Asia-Pacific region remains the fastest-growing market, supported by rising internet penetration, increasing enterprise digital adoption, and government-led digital transformation initiatives. India has reinforced its position as a global technology hub. According to NASSCOM Strategic Review 2025, the Indian IT-BPM industry is expected to achieve USD 270 billion in revenues in FY 2024–25, contributing nearly 7.5% to Indias GDP and employing more than 5.4 million professionals (NASSCOM, 2025 ). The industrys growth is being fuelled by the rapid adoption of AI-based platforms, data analytics, cybersecurity solutions, and cloud technologies, as well as strong demand from e-commerce, fintech, healthtech, and edtech sectors.

Domestically, the governments initiatives such as Digital India, Startup India, and the Production Linked Incentive (PLI) scheme for IT hardware continue to create an enabling ecosystem for technology companies. The World Bank has also projected Indias economy to grow at 6.5% in FY 2024 –25, among the highest for major economies, providing a strong backdrop for the expansion of the IT industry (World Bank Global Economic Prospects, June 2025).

For Innovana Thinklabs Limited, this environment presents significant opportunities. The global demand for system optimization tools, user-friendly software, and subscription-based digital solutions aligns with the

Companys product portfolio and strategic direction. With innovation at its core, Innovana is focusing on expanding its global footprint, strengthening its suite of software and digital advertising solutions, and leveraging opportunities in AI-driven applications and cloud-enabled platforms.

Looking ahead, the Company remains confident of sustaining growth momentum by capitalizing on digital adoption trends, strengthening customer-centric innovations, and mitigating risks arising from cybersecurity threats, regulatory changes, and global trade uncertainties. With its strong technological capabilities, focus on quality, and expanding international presence, Innovana Thinklabs Limited is well-positioned to deliver long-term sustainable value to all stakeholders. OPPORTUNITIES AND THREATS: The global IT and software industry is undergoing rapid transformation, driven by accelerating digital adoption, advancements in Artificial Intelligence (AI), Cybersecurity, Cloud Computing, and Data Analytics. India, as one of the leading IT hubs, is strategically positioned to benefit from these developments. According to NASSCOM, Indias IT-BPM industry revenues are projected to cross USD 270 billion in FY 2024–25, supported by strong export demand, rising domestic digital consumption, and government-backed initiatives such as Digital India and Startup India. This favorable landscape presents significant opportunities for software product and digital solution providers like Innovana Thinklabs Limited. At the same time, the sector faces challenges stemming from global macroeconomic volatility, foreign exchange fluctuations, regulatory changes in international markets, cybersecurity risks, and intensifying competition. Companies must continue to innovate, optimize costs, and diversify their portfolios to maintain competitiveness in this dynamic environment. Opportunities

Rapid digital transformation across industries

Expansion of cloud computing services

Growth in artificial intelligence and machine learning

Increasing integration of IoT (Internet of Things)

Rising demand for cybersecurity solutions

Global expansion and outsourcing opportunities

Growth of e-commerce and fintech industries Threats

Rapid technological advancements leading to obsolescence

Intense competition in the global market

Cybersecurity threats and data breaches

Regulatory changes and compliance requirements

Shortage of skilled IT professionals

Fluctuations in foreign exchange rates affecting global operations

Intellectual property theft and piracy risks

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Operational performance of the Company can be obtained from the various following ratio analysis.

Debt Services Coverage Ratio 7.46 Time

Return on Equity Ratio: 25.04%

Current Ratio is 3.17 times

Debt to Equity Ratio is 0.03 times

Net Profit Margin Ratio is 68.38% percentage

Return on Capital Employed 29.71% RISKS AND CONCERNS

We believe that great things never come from comfort zones and so, we are constantly working on way to do things better every single moment. The Company is impacted by the change in the business environment both within the Country and globally and this necessitates continuous evaluation. In the current scenario of competitive business environment and open economy across the world, no Company can imagine risk free business environment. Your Company is proactively taking steps to identify and monitor the risk and make efforts to mitigate significant risks that may affected. The Board of Directors and Senior Management is continuously and carefully monitoring the risks and concerns related to the business for example: macroeconomic factors, foreign exchange fluctuation, geographical concentration, change in the Government policies and legislation, increase in the raw material prices etc. The Company has also taken several insurance policies to mitigate other risks and concerns of the Company. INTERNAL CONTROLS AND THEIR ADEQUACIES:

An internal control system requires proper documentation of policies, procedures, and controls implemented within the organization. This helps ensure consistency, clarity, and visibility of controls to relevant personnel and external stakeholders. They have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance of corporate policies. We adopt a comprehensive approach that addresses various aspects like segregation of duties, authorization processes, physical safeguards, IT controls, risk management, documentation, and compliance which is crucial for the effective implementation of internal controls within organization. OUTLOOK: The outlook of the Company is promising as we strive to lead the way in software development and application development in the coming years. Innovana Thinklabs Limited is committed to staying at the forefront of technological advancements and creating unique solutions for our customers. We anticipate a significant rise in the adoption of emerging technologies such as artificial intelligence, which would present opportunities for us to develop highly customized and transformative software solutions for our customers. There are no major risks and concerns except economic fluctuations, increasing demand for IT personnel leading to higher recruitment costs and growing competition. With appropriate risk-mitigation strategies and measures in place, the Company will continue to have a stable standing in the market which is to be supplemented by business plans and review mechanisms. HUMAN RESOURCES DEVELOPMENT: We place great importance on the development of our human resources. We believe that continuous learning and growth are crucial for both individual employees and the overall success of our organization. We offer a wide range of training programs to enhance employees technical skills, leadership abilities, and professional development. These programs are designed to address both immediate and future needs and are frequently updated to keep up with the evolving industry trends. Also, we provide access to various learning resources, such as online courses, webinars, and conferences, to encourage continuous learning and professional growth. Employees are encouraged to stay updated with the latest industry trends and technologies to excel in their respective roles. We have a robust performance management system in place that includes regular feedback, goal setting, and performance evaluations. This helps employees identify their areas of growth and improvement and provides them with the necessary support and resources to reach their full potential. CAUTIONARY STATEMENT Statement in the Management Discussion and Analysis and Directors Report describing the Companies strengths, objectives, strategies, projection and estimate are forward looking and progressive within the meaning of all applicable laws and regulation. Actual results may vary depending upon the various aspects of the economic such as government policies, rules and regulations, economic conditions and other incidental factors. Important factors that could make a difference to our Companys operations include raw material availability and prices, cyclical demand and pricing in our principal markets, changes in government regulations, tax regimes, economic developments within India and outside the countries in which we conduct business and other incidental factors. Management will not be in any way responsible for the actions taken based on such statements.

Date 05-09-2025	For and on behalf of the Board of Directors
Place: JAIPUR	FOR INNOVANA THINKLABS LIMITED
Registered office:	CHANDAN GARG	KAPIL GARG
Plot No. D-41, Patrakar Colony,	Chairman & Managing	Whole Time Director
	Director
Near Jawahar Nagar Moti Dungri Vistar Yojna,	DIN: 06422150	DIN: 07143551
Raja Park-302004, Jaipur, Rajasthan