Logiciel Solutions Ltd Management Discussions

You should read the following discussion of our financial condition and results of operations together with our restated financial statements included in the Draft Red Herring Prospectus. You should also read the section entitled "Risk Factors " beginning on page 32, which discusses several factors, risks and contingencies that could affect our financial condition and results of operations. The following discussion relates to our Company and is based on our restated financial statements, which have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI Regulations. Portions of the following discussion are also based on internally prepared statistical information and on other sources. Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year ("Fiscal Year") are to the twelve-month period ended March 31 of that year.

The financial statements have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI (ICDR) Regulations and restated as described in the report of our auditors dated July 21, 2025 which is included in this Draft Red Herring Prospectus under the section titled "Restated Financial Statement" beginning on page 203 of this Draft Red Herring Prospectus. The restated financial statements have been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. We do not provide a reconciliation of our restated financial statements to US GAAP or IFRS and we have not otherwise quantified or identified the impact of the differences between Indian GAAP and U.S. GAAP or IFRS as applied to our restated financial statements.

This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those described under "Risk Factors" and "Forward Looking Statements" beginning on pages 32 and 22 respectively, and elsewhere in this Draft Red Herring Prospectus Accordingly, the degree to which the financial statements in this Draft Red Herring Prospectus will provide meaningful information depend entirely on such potential investors level of familiarity with Indian accounting practices. Please also refer to section titled "Certain Conventions, use of financial information and Market data and Currency of Financial Presentation " beginning on page 19 of this Draft Red Herring Prospectus.

Established in 2011, Logiciel Solutions Limited has grown into offshore software development partner, empowering startups and growing businesses to transform visionary ideas into scalable, secure, and high-performance digital platforms. With over a decade of consistent delivery excellence, we specialize in creating tailored, robust, and future- ready software solutions across web, mobile, and cloud-native technologies.

Our core operations are anchored at our central development center in Ludhiana, Punjab, which houses the majority of our engineering and delivery teams. While a large portion of our workforce operates from our primary development center, we also maintain a strategically structured remote engineering workforce across India. This hybrid model allows us to leverage the best of office-based and remote work environments, ensuring strong team cohesion and quality control from our office-based teams, while also tapping into a versatile and geographically diverse talent pool through remote contributors.

At the forefront of our innovation journey is a focused and pragmatic embrace of Artificial Intelligence (AI). Recognizing AI?s transformative impact on software development, we are actively integrating AI tools across the lifecycle from code generation and automated testing to UI/UX enhancement and intelligent project management. While AI remains an evolving space, we are moving fast to harness its capabilities and deliver greater speed, efficiency, and insight for our clients.

We offer a comprehensive suite of software development and technology services designed to support startups and scaling businesses at every stage of growth. Our approach is rooted in engineering excellence, process-driven execution, and the strategic integration of AI tools to improve delivery speed, quality, and decision-making across the board.

• Custom Software Development

Web & Mobile Application

Application Programming Interface (API) Development

• Infrastructure & Cloud Services

Cloud Migration & Management DevOps Implementation

• Big Data & Analytics

Data Engineering Business Intelligence

• UI/UX Design

User Research & Testing Design Systems

• Software Testing & QA Services

Automated Testing Performance Testing

• Minimum Viable Product (MVP) Development

• AI & Machine Learning

For further details on business of the Company refer to section titled "Our Business" beginning on page 134 of this Draft Red Herring Prospectus.

As per mutual discussion between the Board of the Company and BRLM, in the opinion of the Board of the Company there have not arisen any circumstances since the date of the last financial statements as disclosed in the Draft Red Herring Prospectus and which materially and adversely affect or is likely to affect within the next twelve months except as follows:

• The Shareholders of our Company has approved and passed a resolution on April 14, 2025, to approve the Initial Public Offer.

• The Shareholders of our Company has approved and passed resolution on April 14, 2025, for change in designation of Mr. Umesh Sharma to Managing Director and of Mr. Ajay Sharma to Whole Time Director.

• Our board in the board meeting dated July 10, 2025, has approved the audited financial statements for the financial years ending March 31, 2025.

• Our board has approved the Restated financial statements for the financial years ending March 31, 2025, March 31, 2024, and March 31, 2023, in its Board meeting dated July 18, 2025.

• Our Company has approved the Draft Red Herring Prospectus vide resolution in the Board Meeting dated August 06 ,2025.

Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factors" beginning on page 32 of this Draft Red Herring Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:

• Our success largely depends on our ability to attract, retain and effectively manage qualified and experienced professionals across various functions.

• A substantial portion of our revenue is derived from a limited number of customers, suppliers, or brand partners. Any disruption in these relationships may materially impact our business operations.

• Our ability to implement our growth strategies and achieve expansion targets remains critical to our long-term success. Any failure or delay in execution could affect our performance.

• Global GDP growth.

• The inability to keep pace with rapid technological changes and industry advancements may impair our competitiveness and negatively affect our financial condition.

• Competition from existing and new entities may adversely affect our revenues and profitability.

• Conflicts of interest with affiliated companies, the promoter group and other related parties.

• Fluctuations in the domestic and international financial markets may influence investor sentiment and access to capital, which can affect our funding strategies.

• Our ability to successfully enter and operate in new geographic markets is crucial for future growth. Any failure in market penetration or operational integration may limit our expansion potential.

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

For Significant accounting policies please refer "Significant Accounting Policies", under Chapter titled Restated Financial Statement beginning on page 203 respectively of the Draft Red Herring Prospectus.

Except as mentioned in chapter "Restated Financial Statement" on page 203 of this Draft Red Herring Prospectus, there has been no change in the accounting policies during the Fiscal 2025.

There are no reservations or qualifications or adverse remarks in the auditors? report on restated financial statements.

Our Results of Operations

The following discussion on the financial operations and performance should be read in conjunction with the Restated financial statements of the company.

	For the financial year ended on
Particulars	March 31, 2025	%*	March 31, 2024	%*	March 31, 2023	%*
Income
Revenue From Operation	2,090.55	98.63%	1,693.62	99.04%	1,392.10	98.79%
Other Income	29.06	1.37%	16.44	0.96%	16.99	1.21%
Total Income	2,119.61	100.00%	1,710.06	100.00%	1,409.09	100.00%
Expenditure
Direct Expenses	36.08	1.70%	47.89	2.80%	80.14	5.69%
Employee benefit expense	1,123.37	53.00%	893.39	52.24%	826.48	58.65%
Finance cost	2.24	0.11%	4.15	0.24%	4.16	0.30%
Depreciation	84.74	4.00%	95.91	5.61%	89.62	6.36%
Other expenses	116.86	5.51%	135.92	7.95%	233.61	16.58%
Total Expenditure	1,363.29	64.32%	1,177.26	68.84%	1,234.02	87.58%
Profit/(Loss) Before Tax	756.32	35.68%	532.80	31.16%	175.06	12.42%
Tax Expense:
Current Year	(198.41)	-9.36%	(139.30)	-8.15%	(53.17)	-3.77%
Taxes of Earlier Years	(14.17)	-0.67%	(1.44)	-0.08%	3.59	0.25%
Deferred Tax	3.70	0.17%	5.21	0.30%	8.91	0.63%
Net Current Tax Expenses	(208.88)	-9.85%	(135.54)	-7.93%	(40.67)	-2.89%
Profit/(Loss) for the Year	547.43	25.83%	397.26	23.23%	134.40	9.54%

*% of Total Income.

The following discussion on results of operations should be read in conjunction with the Restated Financial statements for the financial year ending March 31, 2025, 2024, and 2023. Our revenue and expenses are reported in the following manner:

? Revenue of operations:

The core revenue of our Company is derived from the supply of services (export sales).

? Other Income:

The major components of Other Income include Foreign Exchange Fluctuation Gain, Interest Received on FD, Profit on Sale of Shares/ Mutual Funds.

Our expenses primarily consist of Direct Expenses, Employee Benefit Expenses, Finance cost, Depreciation and other expenses.

? Direct Expenses

It includes opening Membership and Subscription Charges, Software Development Charges and Computer Maintenance.

? Employee benefit expense

It includes Salaries, wages and bonus paid to employees (Inclusive of provision for gratuity), Directors Remuneration, Contribution to Provident and Other Funds and Staff welfare expenses.

? Finance cost

It includes Interest expenses and other finance expenses.

? Depreciation

It includes depreciation on Computer, Office Equipment, Plant & Machinery, Vehicles and Furniture & Fixtures.

? Other expenses

Other expenses mainly comprise of Legal, Professional & Consultancy Charges, Rent Rates and Taxes, Business Promotion Expenses, Travelling Expenses, Corporate Social Responsibilities.

? Tax Expenses

Tax expense comprises of Current Tax, Tax of Earlier Year, and Deferred Tax.

? Total Income

Our total income increased by 23.95% to ? 2,119.61 lakhs for the financial year 2024-25 from ? 1,710.06 Lakhs for the financial year 2023-24 due to the factors described below:

? Revenue of operations

Our revenue from operations increased by 23.44% to ? 2,090.55 lakhs for the financial year 2024-25 from ? 1,693.62 lakhs for the financial year 2023-24, which is due to increase in sale of software services during the year.

Particulars	31-Mar-25	31-Mar-24
Sales of Services	2,090.55	1,693.62
Revenue from Operations	2,090.55	1,693.62

? Other Income

The other income increased by 76.76% to ^29.06 Lakhs for FY 2024-25 from ^16.44 lakhs for FY 2023-24. The table below presents the changes in the other income on year on year basis:

Particulars	31-Mar-25	31-Mar-24
Foreign Exchange Fluctuation Gain	13.74	-
Interest received on FD	15.32	1.18
Rebate & Discounts	-	-
Profit on Sale of Shares/MFs	-	15.14
Profit on Sale of Fixed Assets	-	-
Dividend Income	-	0.12
Total	29.06	16.44

From the above table it is attributed that the increase in the other income was majorly due to increase in the Foreign Exchange Fluctuation Gain, Interest received on FD.

? Total Expenses

Total Expenses increased by ^ 186.03 lakhs and 15.80% to ^1,363.29 lakhs in the financial year ended March 31, 2025, from ^1,177.26 lakhs in the financial year ended March 31, 2024. Our total expenses increased due to the factors described below:

? Direct Expenses

The direct expenses decreased by ?11.81 lakhs, marking an 24.65% decline from ^47.89 lakhs in Fiscal 2024 to ^36.08 lakhs in Fiscal 2025.

The decrease in the direct expenses during Fiscal 2025 is primarily attributable to the decline in expenses related to Membership & Subscription Charges and lower computer maintenance cost.

? Employee benefit expense

In FY 2024-25, Employee Benefit Expenses increased by ^229.97 lakhs, representing a growth of 25.74% compared to FY 2023-24. This increase is primarily attributable to higher outlays under Salaries, Wages, and Bonus (including provisions for gratuity), which rose from ^783.72 lakhs in FY 2023-24 to ^1,037.27 lakhs in FY 2024-25—constituting 92.34% of the total employee benefit expenses.

The growth in this component reflects adjustments made towards employee compensation, including annual increments, increased provision for gratuity, and expanded workforce in line with operational requirements. Other components such as contributions to provident and other funds also saw a marginal increase in absolute terms, in line with the higher salary base.

? Finance cost

Finance Expenses amounted to ? 2.24 lakhs in FY 2024-25, compared to ? 4.15 lakhs in FY 2023-24, reflecting a marginal decrease by ?1.91 lakhs. Finance costs primarily comprise interest on borrowings and other interest.

? Depreciation

Depreciation expense decreased by ? 11.16 lakhs, representing a 11.64% fall, from ?95.91 lakhs in Fiscal 2024 to ^84.74 lakhs in Fiscal 2025. The decrease is primarily attributable to lower addition of fixed assets during the year.

? Other expenses

In Fiscal Year 2024-25, Other Expenses declined by ?19.06 lakhs, representing a 14.02% reduction compared to ^135.92 lakhs in the previous fiscal year. This decrease is primarily attributable to the reduction in expenses items like Legal, Professional and Consultancy Charges, Rent Rates and Taxes, Bank Charges and Other Office Expenses.

? Net Profit after Tax

Net Profit After Tax has increased by ?150.17 Lakhs and 37.80% from ^397.26 lakhs in Fiscal 2024 to profit of ^547.43 lakhs in the Fiscal 2025. The growth in PAT and the expansion of PAT margin are primarily attributable to increased business and improved dost efficiency during the year.

? Total Income

Total Income for the period ended March 31, 2024, stood at ^1,710.06 lakhs whereas in financial year 2022-23 it stood at ^1,409.09 lakhs representing an increase of 21.36%. due to the factors described below:

? Revenue from operations

Our Revenue from Operations increased by 21.66%, rising to ^1,693.62 lakhs in the Financial Year 2023-24 from ^1,392.10 lakhs in 2022-23. This growth was primarily driven by a rise in the sale of services.

Particulars	31-Mar-24	31-Mar-23
Sales of Services	1,693.62	1,392.10
Revenue from Operations	1,693.62	1,392.10

? Other Income

The other income is decreased to ^16.44 Lakhs for FY 2023-24 from ^16.99 lakhs for the FY 2022-23.

? Total Expenses

Total Expenses decreased by ^56.76 lakhs and 4.60%, from ^1,234.02 lakhs in FY ended March 31, 2023, to ^1,177.26 lakhs in FY ended March 31, 2024. Our total expenses decreased due to the factors described below:

? Direct Expenses

Direct Expenses for the year ended March 31, 2024, stood at ^47.89 lakhs whereas in financial year ended March 31, 2023, it stood at ^80.14 lakhs representing an decrease by 40.25%.

The decrease in the direct expenses during Fiscal 2024 is primarily attributable to the decline in expenses related to Software Development Charges.

? Employee benefit expense

In FY 2023-24, Employee Benefit Expenses increased by ^66.91 lakhs, representing a growth of 8.10% compared to FY 2022-23. This increase is primarily attributable to higher outlays under Salaries, Wages, and Bonus (including provisions for gratuity), which rose from ^652.45 lakhs in FY 2022 -23 to ^783.72 lakhs in FY 2023-24 constituting 87.72% of the total employee benefit expenses.

The growth in this component reflects adjustments made towards employee compensation, including annual increments, increased provision for gratuity, and expanded workforce in line with operational requirements. Other components such as contributions to provident and other funds also saw a marginal increase in absolute terms, in line with the higher salary base.

? Finance cost

Finance Expenses remained almost flat to ? 4.15 lakhs as compared to fiscal 2023.

? Depreciation

Depreciation expense increased by ?6.29 lakhs, representing a 7.01% rise, from ^89.62 lakhs in Fiscal 2023 to ^95.91 lakhs in Fiscal 2024. The increase is primarily attributable to additions of Computer, Vehicles and Furniture & Fixtures during the year.

? Other expenses

In the fiscal year 2023-24, Other Expenses declined by ^97.69 lakhs, representing a 41.82% decrease from ^233.61 lakhs in the previous year. This reduction is primarily attributable to repair and maintenance expenses of ^97.23 lakhs incurred for the office building in FY 2022-23, which were not repeated in FY 2023-24.

? Net Profit After Tax

Net Profit has increased by ^262.87 lakhs from ^134.40 lakhs in FY 2022-23 to profit of ^397.26 lakhs in FY 2023-24. This improvement is primarily driven by increase in Total Income compared to the previous fiscal year, reflecting

enhanced business performance and revenue growth.

Related party transactions with certain of our promoters, directors and their entities and relatives primarily relate to Director?s Remuneration, Salary & Wages, and Loan taken, repaid, Sale and Purchases. For further details of related parties kindly refer chapter titled "Restated Financial Statement" beginning on page 203 of this Draft Red Herring Prospectus.

INFORMATION REQUIRED AS PER ITEM (II) (C) (IV) OF PART A OF SCHEDULE VI TO THE SEBI REGULATIONS:

1. Unusual or infrequent events or transactions

Except as described in this Draft Red Herring Prospectus, during the periods under review there have been no transactions or events, which in our best judgment, would be considered unusual or infrequent.

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

Other than as described in the section titled Risk Factors beginning on page 32 of this Draft Red Herring Prospectus, to our knowledge there are no known significant economic changes that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

3. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations

Other than as described in this Draft Red Herring Prospectus, particularly in the sections Risk Factors and Management?s Discussion and Analysis of Financial Conditions and Results of Operations on pages 32 and 205, respectively, to our knowledge, there are no known trends or uncertainties that are expected to have a material adverse impact on our revenues or income from continuing operations.

4. Income and Sales on account of major product/main activities

Income and sales of our Company on account of major activities derives from Sales of Services in IT Industry.

5. Future relationship between costs and income

Other than as described in the chapter titled "Risk Factors" beginning on page 32 of this Draft Red Herring Prospectus, to the best to our knowledge there are no factors, which will affect the future relationship between costs and income or which are expected to have a material adverse impact on our operations and finances. 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.

Increases in our revenues are by and large linked to increases in the volume of business.

6. The extent to which the business is seasonal

Our business is not seasonal in nature.

7. Competitive Conditions

We face competition from existing and potential competitors which is common for any business. Over a period of time, we have developed certain competitive strengths which have been discussed in section titled Our Business on page 134 of this Draft Red Herring Prospectus.